Louisana-Pacific Corp. (LP) posted a $19 million second-quarter operating income, a swing into the black from a year ago, but decided to use it as an opportunity to pay off debt, thus moving the company’s bottom line further into the red with a $37.3 million net loss.
The improved operating results were driven by an 18% increase in sales to $427.8 million for the quarter ended June 30, the company announced today.
The Nashville, Tenn.-based building materials manufacturer paid $52.2 million in early debt extinguishment as part of a $64.5 million total non-operating expense, which more than quintupled from last year’s second quarter. Adjusted earnings before interest, taxes, depreciation and amortization, which excludes the debt payments, was $36.6 million, a huge change from the $3.5 million loss a year ago.
LP’s oriented strand board (OSB) unit swung into the black with a $17 million operating profit, compared with a $22.9 million loss last year. Net sales at the unit increased 39% to $194.9 million. LP, along with any joint ventures and sales arrangements it’s involved with, produced 922 million square feet of OSB (3/8-inch basis) during the quarter, up 14% from a year ago.
The company’s siding division reported a 72% jump in operating profit behind a 16% growth in net sales to $137 million. For the quarter, the division produced 236 million square feet of wood siding (3/8-inch basis), a 17% growth over last year’s production.
The engineered wood products segment posted a $3.4 million operating loss, a slight increase over the $3.2 million loss from last year. Net sales were also down by almost $2 million to $51.7 million. Production of engineered I-joists increased slightly to 18 million lineal feet, while laminated veneer lumber and laminated strand lumber production remained flat at 1.7 million cubic feet.
The South America unit, which consists of OSB mills in Chile and Brazil, reported an 8% increase in sales to $42.7 million and a slight decrease in operating profit to $3.6 million.
“Going into the second half of the year, we remain cautiously optimistic,” said Curt Stevens, LP’s CEO. “Though it appears that the general economy may be slowing, housing activity continues to improve.”