LP Building Solutions Reports Third Quarter 2021 Results, Provides Capital Allocation Update and Fourth Quarter Outlook, and Announces an Additional…

NASHVILLE, Tenn., Nov. 2, 2021 /PRNewswire/ --Louisiana-Pacific Corporation (LP) (NYSE: LPX) today reported its financial results for the three and nine months ended September 30, 2021.

Key Highlights for the Third Quarter

(1)

This is a non-GAAP financial measure. See "Use of Non-GAAP Information" and "Reconciliation of Net Income to Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income, and Non-GAAP Adjusted Diluted EPS below"

Capital Allocation Update

"As expected, the third quarter saw a significant correction in OSB prices and ongoing headwinds from raw material prices and availability," said LP Chair and Chief Executive Officer Brad Southern. "Despite these challenges, LP earned $522 million in EBITDA and $3.87 per share as Siding sales grew by 19%, EWP and South America delivered record quarters, and OSB continued to generate exceptional cash flow."

Third Quarter 2021 Highlights

Net sales for the third quarter of 2021 increased by $424million (or 53%) over the prior year to $1.2 billion. Siding Solutions revenue increased by $49million (or 19%) and OSB prices increased by $225 million over the prior year period. EWP revenue increased by $98 million (or 95%) over the prior year period, primarily due to increased pricing to offset increased input costs. Additionally, South America revenue increased by $31million (or 69%) over the prior year period due to price increases.

Net income attributed to LP for the third quarter of 2021 increased by $188million over the prior year period to $365million ($3.87 per diluted share) primarily due to the growth in Siding Solutions revenue and higher OSB prices, partially offset by increases in income taxes, raw material prices, freight costs, and maintenance projects. Adjusted EBITDA for the third quarter of 2021 increased by $249million over the prior year period to $522million.

First Nine Months of 2021 Highlights

Net sales for the first nine months of 2021 increased by $1.6 billion (or 85%) over the prior year period to $3.6 billion. Siding Solutions revenue increased by $222 million (or 34%) and OSB prices increased by $1.1 billion over the prior year period. EWP revenue increased by $200 million (or 71%) over the prior year period, primarily due to increased pricing to offset increased input costs. Additionally, South America revenue increased by $84 million (or 70%) over the prior year period due to price increases.

Net income attributed to LP for the first nine months of 2021 increased by $940 million over the prior year period to $1.2 billion ($11.73 per diluted share) primarily due to the growth in Siding Solutions and the higher OSB prices. We recognized debt extinguishment charges of $11million during the first nine months of 2021. During the first nine months of 2020, we recognized $21 million in fiber discontinuance costs, which included pre-tax impairment charges of $18 million as well as $3 million of severance costs. Adjusted EBITDA for the first nine months of 2021 increased by $1.2billion over the prior year period to $1.7 billion, primarily due to growth in Siding Solutions revenue and higher OSB prices.

Segment Results

Siding

The Siding segment serves diverse end markets with a broad product offering of engineered wood siding, trim, and fascia, including LP SmartSide Trim & Siding, LP SmartSide ExpertFinish Trim & Siding, LP BuilderSeries Lap Siding, and LP Outdoor Building Solutions (collectively referred to as Siding Solutions).

Segment sales and Adjusted EBITDA for this segment were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Change

Change

2021

2020

Amount

Percentage

2021

2020

Amount

Percentage

Net sales

$

312

$

268

$

44

16

%

$

889

$

700

$

189

27

%

Adjusted EBITDA

73

76

(3)

(4)

%

240

169

71

42

%

Three Months EndedSeptember 30,

2021 versus 2020

Nine Months EndedSeptember 30,

2021 versus 2020

Average Net

SellingPrice

Unit

Shipments

AverageNet

SellingPrice

Unit

Shipments

Siding Solutions

9%

9%

8%

24%

Improvements in net sales in the Siding segment compared to the corresponding prior year periods are the result of increased sales volume, increased price, and improved product mix. Increased Adjusted EBITDA for the nine months ended September 30, 2021, compared to the corresponding period in prior year, is the net effect of higher revenue and increased costs for raw materials, freight, maintenance, and higher investments in sales and marketing. Costs associated with the capacity expansion project underway in Houlton, Maine increased in the third quarter, contributing to a $3 million decline in Adjusted EBITDA compared to the prior year quarter.

Oriented Strand Board (OSB)

The OSB segment manufactures and distributes OSB structural panel products including the value-added OSB portfolio known as LP Structural Solutions (LP TechShield Radiant Barrier, LP WeatherLogic Air & Water Barrier, LP Legacy Premium Sub-Flooring, and LP FlameBlock Fire-Rated Sheathing) and LP TopNotch Sub-Flooring. OSB is manufactured using wood strands arranged in layers and bonded with resins.

Segment sales and Adjusted EBITDA for this segment were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Change

Change

2021

2020

Amount

Percentage

2021

2020

Amount

Percentage

Net sales

$

600

$

368

$

232

63

%

$

1,917

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LP Building Solutions Reports Third Quarter 2021 Results, Provides Capital Allocation Update and Fourth Quarter Outlook, and Announces an Additional...