Louisiana-Pacific(LPX) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Overview Key Financial & Operational Highlights LP Building Solutions reported a decrease in consolidated net sales and net income for Q2 2025 compared to Q2 2024, primarily due to challenges in the OSB market, despite strong growth in the Siding segment Key Financial Highlights (Q2 2025 vs. Q2 2024) ($ Millions): | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | Siding Net Sales | $460 | $415 | +$45 (11%) | | OSB Net Sales | $250 | $351 | -$101 | | Consolidated Net Sales | $755 | $815 | -$60 | | Net Income | $54 | $160 | -$106 | | Net Income per Diluted Share | $0.77 | $2.23 | -$1.46 | | Adjusted EBITDA | $142 | $228 | -$86 | | Adjusted Diluted EPS | $0.99 | $2.09 | -$1.10 | - Cash provided by operating activities was $162 million in Q2 2025[2] Capital Allocation LP invested $68 million in capital expenditures and paid $19 million in cash dividends during Q2 2025, while maintaining strong liquidity. A quarterly cash dividend of $0.28 per share was announced - Invested $68 million in capital expenditures during Q2 2025[3] - Paid $19 million in cash dividends during Q2 2025[3] - Announced a quarterly cash dividend of $0.28 per share payable on August 29, 2025[3] - Total liquidity was $1.1 billion as of June 30, 2025[3] Outlook Financial Guidance LP provided financial guidance for the third quarter and full year 2025, projecting continued growth in Siding net sales and Adjusted EBITDA, while anticipating negative Adjusted EBITDA for OSB due to market conditions Financial Guidance (Third Quarter 2025) ($ Millions): | Metric | Value | | :-------------------------------- | :-------------------- | | Siding Net Sales Year-Over-Year Growth | ~$430 (~3% growth) | | Siding Adjusted EBITDA | ~$110 (~26% margin) | | OSB Adjusted EBITDA | ~$(45) | | Consolidated Adjusted EBITDA | ~$65 | Financial Guidance (Full Year 2025) ($ Millions): | Metric | Value | | :-------------------------------- | :-------------------- | | Siding Net Sales Year-Over-Year Growth | ~$1.7B (~9% growth) | | Siding Adjusted EBITDA | ~$430 (~25% margin) | | OSB Adjusted EBITDA | ~$(25) | | Consolidated Adjusted EBITDA | ~$405 | | Capital Expenditures | ~$350 | - Full year 2025 capital expenditures are expected to be approximately $180 million for strategic growth and $170 million for sustaining maintenance projects[6] Detailed Financial Review Second Quarter 2025 Performance Consolidated net sales decreased by $60 million to $755 million, primarily due to a $101 million decline in OSB revenue driven by lower prices. Siding revenue, however, increased by $45 million (11%) due to higher volumes and prices. Net income decreased significantly by $106 million to $54 million, impacted by lower Adjusted EBITDA, asset impairments, and reorganization costs - Consolidated net sales decreased by $60 million to $755 million compared to the prior-year period[7] - Siding revenue increased by $45 million (11%), driven by 8% higher volumes and 2% higher prices[7] - OSB revenue decreased by $101 million, primarily due to a decline in prices[7] - Net income decreased year-over-year by $106 million to $54 million ($0.77 per diluted share), reflecting an $86 million decrease in Adjusted EBITDA, $17 million in asset impairments, and $3 million in reorganization costs[8] First Six Months of 2025 Performance For the first six months of 2025, consolidated net sales decreased by $60 million to $1.5 billion. Siding revenue grew by $86 million (11%), while OSB revenue declined by $147 million due to lower prices and volumes. Net income decreased by $123 million to $145 million, mainly reflecting a $106 million decrease in Adjusted EBITDA and impairment charges - Consolidated net sales for the first six months of 2025 decreased year-over-year by $60 million to $1.5 billion[9] - Siding revenue increased by $86 million (11%), due to 9% higher volumes and 2% higher prices[9] - OSB revenue decreased by $147 million, driven by lower prices and a slight decline in volumes[9] - Net income decreased year-over-year by $123 million to $145 million ($2.07 per diluted share), primarily reflecting a $106 million decrease in Adjusted EBITDA, $17 million of impairment charges, and $5 million in reorganization costs[10] Segment Performance Analysis Siding Segment The Siding segment demonstrated strong growth, with net sales increasing by 11% for both the three and six months ended June 30, 2025, driven by higher sales volumes and selling prices. Adjusted EBITDA also saw significant increases, despite strategic investments and tariff expenses Siding Segment Performance (Three Months Ended June 30) ($ Millions): | Metric | 2025 | 2024 | % Change | | :---------------- | :----- | :----- | :------- | | Net sales | $460 | $415 | 11 % | | Adjusted EBITDA | $125 | $105 | 19 % | | Average Net Selling Price | | | 2 % | | Unit Shipments | | | 8 % | Siding Segment Performance (Six Months Ended June 30) ($ Millions): | Metric | 2025 | 2024 | % Change | | :---------------- | :----- | :----- | :------- | | Net sales | $862 | $776 | 11 % | | Adjusted EBITDA | $230 | $195 | 18 % | | Average Net Selling Price | | | 2 % | | Unit Shipments | | | 9 % | - ExpertFinish net sales increased by 17% for the three months and 20% for the six months ended June 30, 2025[12] OSB Segment The OSB segment experienced significant declines in both net sales and Adjusted EBITDA for the three and six months ended June 30, 2025, primarily due to lower OSB prices OSB Segment Performance (Three Months Ended June 30) ($ Millions): | Metric | 2025 | 2024 | % Change | | :------------------------------------ | :----- | :----- | :------- | | Net sales | $250 | $351 | (29)% | | Adjusted EBITDA | $19 | $125 | (85)% | | OSB - Structural Solutions Average Net Selling Price | | | (27)% | | OSB - commodity Average Net Selling Price | | | (33)% | OSB Segment Performance (Six Months Ended June 30) ($ Millions): | Metric | 2025 | 2024 | % Change | | :------------------------------------ | :----- | :----- | :------- | | Net sales | $517 | $664 | (22)% | | Adjusted EBITDA | $73 | $215 | (66)% | | OSB - Structural Solutions Average Net Selling Price | | | (19)% | | OSB - commodity Average Net Selling Price | | | (23)% | - Decreases in net sales and Adjusted EBITDA were primarily driven by lower OSB prices[14][15] LPSA Segment The LPSA segment saw a slight decline in Q2 2025 net sales and Adjusted EBITDA due to lower OSB prices. However, for the first six months of 2025, net sales and Adjusted EBITDA increased, driven by higher Siding volume and prices, partially offset by lower OSB prices LPSA Segment Performance (Three Months Ended June 30) ($ Millions): | Metric | 2025 | 2024 | % Change | | :---------------- | :----- | :----- | :------- | | Net sales | $43 | $46 | (7)% | | Adjusted EBITDA | $9 | $10 | (13)% | LPSA Segment Performance (Six Months Ended June 30) ($ Millions): | Metric | 2025 | 2024 | % Change | | :---------------- | :----- | :----- | :------- | | Net sales | $95 | $93 | 2 % | | Adjusted EBITDA | $21 | $20 | 4 % | - The Q2 decline was primarily due to lower OSB prices[17] - The YTD increase was driven by higher Siding volume and prices, partially offset by lower OSB prices[18] Company Information & Disclosures Conference Call Details LP held a conference call on August 6, 2025, at 11 a.m. ET to discuss the Q2 2025 results. A recorded webcast and presentation are available on the investor relations website - Conference call held on August 6, 2025, at 11 a.m. Eastern Time[19] - Recorded webcast and accompanying presentation are available at investor.lpcorp.com[19] About LP Building Solutions Louisiana-Pacific Corporation (LP Building Solutions) is a leading manufacturer of high-performance engineered wood products, including Siding Solutions, Structural Solutions, and Oriented Strand Board. Founded in 1972 and headquartered in Nashville, Tennessee, LP operates over 20 manufacturing facilities globally - LP manufactures engineered wood products for builders, remodelers, and homeowners worldwide[20] - Product portfolio includes Siding Solutions, LP Structural Solutions, and LP Oriented Strand Board[20] - Founded in 1972, headquartered in Nashville, Tennessee, operating over 20 manufacturing facilities across the U.S., Canada, Chile, and Brazil[20] Forward-Looking Statements This section outlines that the news release contains forward-looking statements subject to various risks and uncertainties, including changes in economic conditions, commodity prices, interest rates, and regulatory policies. LP disclaims any obligation to update these statements - The news release contains forward-looking statements based on management's beliefs and assumptions[21] - Factors that could cause actual results to differ materially include changes in governmental policies, economic conditions, commodity prices, capital costs, housing market activity, competition, raw material costs, energy and transportation costs, and geopolitical conflicts[21][22] - LP undertakes no obligation to update any forward-looking statements to reflect new information, subsequent events, or circumstances, except as required by law[23] Use of Non-GAAP Information LP uses non-GAAP financial measures like Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS to provide additional insights into performance, believing they offer meaningful comparisons. These measures are not defined by U.S. GAAP and may not be comparable to similarly titled measures from other companies - Non-GAAP financial measures (Adjusted EBITDA, Adjusted Income, Adjusted Diluted EPS) are used to provide additional meaningful comparison to prior reported results[24] - Adjusted EBITDA excludes items such as interest expense, income taxes, depreciation, amortization, stock-based compensation, and impairment losses[24] - These non-GAAP measures are not substitutes for U.S. GAAP measures and may not be comparable to similarly titled measures reported by other companies[25][26] Consolidated Financial Statements Condensed Consolidated Statements of Income The condensed consolidated statements of income show a significant year-over-year decline in net sales, gross profit, and net income for both the three and six months ended June 30, 2025, primarily driven by increased cost of sales and impairment losses Condensed Consolidated Statements of Income (Amounts in Millions, Except Per Share Amounts): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $755 | $814 | $1,478 | $1,539 | | Gross profit | $178 | $263 | $375 | $477 | | Income from operations | $80 | $194 | $200 | $339 | | Net income | $54 | $160 | $145 | $267 | | Diluted EPS | $0.77 | $2.23 | $2.07 | $3.71 | - Loss on impairment was $17 million for both the three and six months ended June 30, 2025[27] Condensed Consolidated Balance Sheet As of June 30, 2025, LP's total assets increased slightly to $2,656 million compared to December 31, 2024, with an increase in current assets, property, plant, and equipment. Total liabilities also increased, while stockholders' equity grew to $1,742 million Condensed Consolidated Balance Sheet (Amounts in Millions): | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Total current assets | $895 | $855 | | Property, plant, and equipment, net | $1,639 | $1,592 | | Total assets | $2,656 | $2,569 | | Total current liabilities | $315 | $299 | | Long-term debt | $348 | $348 | | Total liabilities | $914 | $899 | | Total stockholders' equity | $1,742 | $1,671 | Condensed Consolidated Statements of Cash Flow Cash provided by operating activities decreased for both the three and six months ended June 30, 2025, compared to the prior year. Investing activities saw a significant increase in property, plant, and equipment additions, leading to higher net cash used in investing. Financing activities also used less cash due to reduced stock repurchases Condensed Consolidated Statements of Cash Flow (Amounts in Millions) - Three Months Ended June 30: | Metric | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Net cash provided by operating activities | $162 | $212 | | Net cash used in investing activities | $(68) | $(20) | | Net cash used in financing activities | $(17) | $(118) | | Cash, cash equivalents, and restricted cash at end of period | $333 | $317 | Condensed Consolidated Statements of Cash Flow (Amounts in Millions) - Six Months Ended June 30: | Metric | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Net cash provided by operating activities | $226 | $317 | | Net cash used in investing activities | $(132) | $(61) | | Net cash used in financing activities | $(105) | $(157) | | Cash, cash equivalents, and restricted cash at end of period | $333 | $317 | - Property, plant, and equipment additions increased significantly to $68 million in Q2 2025 (from $36 million in Q2 2024) and $132 million YTD 2025 (from $77 million YTD 2024)[29] Key Performance Indicators Housing Starts U.S. housing starts, particularly single-family, showed a slight decrease for both the three and six months ended June 30, 2025, compared to the prior year, while multi-family starts increased Housing Starts (in thousands): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Single-Family | 257 | 281 | 486 | 522 | | Multi-Family | 109 | 89 | 198 | 169 | | Total | 367 | 370 | 684 | 692 | - Housing starts are a leading external indicator of residential construction in the United States that correlates with the demand for many of LP's products[31] Sales Volumes Siding Solutions sales volumes increased for both the three and six months ended June 30, 2025. OSB Structural Solutions volumes slightly decreased, while OSB commodity volumes increased for both periods Sales Volume (in MMSF) - Three Months Ended June 30: | Sales Volume | Siding | OSB | LPSA | Total | | :---------------------- | :----- | :---- | :--- | :---- | | Siding Solutions (2025) | 498 | — | 7 | 505 | | Siding Solutions (2024) | 459 | — | 6 | 465 | | OSB - Structural Solutions (2025) | — | 450 | 128 | 578 | | OSB - Structural Solutions (2024) | — | 452 | 136 | 588 | | OSB - commodity (2025) | — | 430 | — | 430 | | OSB - commodity (2024) | — | 415 | — | 415 | Sales Volume (in MMSF) - Six Months Ended June 30: | Sales Volume | Siding | OSB | LPSA | Total | | :---------------------- | :----- | :---- | :--- | :---- | | Siding Solutions (2025) | 932 | — | 19 | 950 | | Siding Solutions (2024) | 858 | — | 18 | 876 | | OSB - Structural Solutions (2025) | — | 848 | 279 | 1,127 | | OSB - Structural Solutions (2024) | — | 895 | 266 | 1,161 | | OSB - commodity (2025) | — | 856 | — | 856 | | OSB - commodity (2024) | — | 830 | — | 830 | Overall Equipment Effectiveness (OEE) OEE for the Siding and OSB segments showed slight improvements in Q2 2025 compared to Q2 2024, while LPSA's OEE decreased. Year-to-date OEE remained stable for Siding and OSB, but declined for LPSA OEE by Segment: | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Siding | 78 % | 77 % | 78 % | 78 % | | OSB | 79 % | 78 % | 77 % | 78 % | | LPSA | 70 % | 76 % | 68 % | 76 % | - OEE is a composite metric that considers asset uptime, production rates, and finished product quality to track improvements in manufacturing asset utilization and productivity[34] Selected Segment Sales Data Net Sales by Business Segment This section provides a consolidated view of net sales by business segment, reinforcing the trends observed in the detailed segment results, with Siding sales increasing and OSB sales decreasing Net Sales by Business Segment (Amounts in Millions): | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Siding | $460 | $415 | $862 | $776 | | OSB | $250 | $351 | $517 | $664 | | LPSA | $43 | $46 | $95 | $93 | | Other | $2 | $2 | $4 | $5 | | Total Sales | $755 | $814 | $1,478 | $1,539 | Non-GAAP Reconciliations Reconciliation of Non-GAAP Measures This section provides detailed reconciliations of net income to non-GAAP Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS for both the three and six months ended June 30, 2025 and 2024, showing the adjustments made from GAAP figures Reconciliation of Net Income to Adjusted EBITDA (Amounts in Millions): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $54 | $160 | $145 | $267 | | Provision for income taxes | $19 | $53 | $45 | $94 | | Depreciation and amortization | $36 | $31 | $70 | $62 | | Loss on impairment | $17 | — | $17 | — | | Adjusted EBITDA | $142 | $229 | $304 | $411 | Segment Adjusted EBITDA (Amounts in Millions): | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Siding | $125 | $105 | $230 | $195 | | OSB | $19 | $125 | $73 | $215 | | LPSA | $9 | $10 | $21 | $20 | | Other | $(10) | $(11) | $(20) | $(19) | | Total Adjusted EBITDA | $142 | $229 | $304 | $411 | Reconciliation of Net Income to Adjusted Income and Adjusted Diluted EPS (Amounts in Millions, except per share): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $54 | $160 | $145 | $267 | | Loss on impairment | $17 | — | $17 | — | | Reported tax provision | $19 | $53 | $45 | $94 | | Adjusted Income | $69 | $150 | $158 | $261 | | Adjusted Diluted EPS | $0.99 | $2.09 | $2.26 | $3.62 |