Louisiana-Pacific Corp. (LP) (NYSE: LPX) reported its financial results for the fourth quarter and year ended Dec. 31.
In the fourth quarter, net sales from continuing operations decreased by 16% to $705 million, including 14% from lower oriented strand board (OSB) prices. Siding Solutions net sales increased by 38% to $385 million - a fourth quarter record. OSB net sales decreased by 45% to $257 million, including 34% from lower OSB prices.
For the full year, net sales from continuing operations decreased by 2% to $3.9 billion; Siding Solutions net sales increased by 26% to $1.5 billion and OSB net sales decreased by 14% to $2.1 billion. The corporation manufactures siding in Two Harbors and OSB in Hayward.
During 2022, the company paid $414 million in capital expenditures, including $193 million on Siding capacity expansions, and paid $900 million in 2022 to repurchase 14.4 million of its common shares. That left 71.7 million common shares outstanding at Dec. 31, and $200 million of share repurchase authorization remaining. LP paid $69 million in cash dividends for the full year.
“The fourth quarter was a strong end to another record year for the Siding business, with 38% sales growth compared to Q4 of last year," said Chair and CEO Brad Southern. "Inflationary pressures continue to present headwinds, housing starts have softened, and OSB prices remain depressed after falling steeply in the fourth quarter. However, LP has managed through challenges like these before. I am bullish about the long-term fundamentals for housing, and very confident that LP's strategy of growth specialization will continue to deliver value in 2023."
"LP ended the year with over $900 million of liquidity, comprising $383 million of cash and $550 million undrawn revolver," said EVP and CFO Alan Haughie. "With significant flexibility in our capital and operating plans, I am confident that LP's balance sheet leaves us very well positioned to withstand near-term headwinds and execute our growth and transformation strategy."
Siding Solutions’ first quarter of 2023 revenue is expected to decrease year-over-year by up to 5%. OSB revenue in the first quarter of 2023 is expected to be sequentially lower than the fourth quarter of 2022 by approximately 20%, assuming OSB prices published by Random Lengths remain unchanged from those published on Feb. 17 (this is an assumption for modeling purposes and not a price forecast). Under these assumptions, adjusted EBITDA for the first quarter of 2023 is expected to be at least $35 million.