LP Building Solutions posts net loss in Q2

LP Building Solutions reported second quarter consolidated sales decreased 46% to $611 million from sales of $1.13 billion in the second quarter 2022.

The Nashville, Tennessee-based building products manufacturer also posted a net loss of $20 million from continuing operations in the second quarter compared to a net income of $384 million for the same period last year.

During the quarter, LP saw a $398 million decrease in Adjusted EBITDA, $34 million in business exit charges related to the shuttering of Entekra Holdings, LLC, and $16 million of settlements of OSB patent-related claims, partially offset by a $95 million lower income tax provision.

Oriented strand board (OSB) sales dropped 66% to $229 million in the period from sales of $673 million in the prior second quarter. 

LP said the decline was caused by a $368 million decrease in OSB prices, a $33 million decrease in sales volume from production curtailments, and a $28 million decrease related to production volume from the conversion of its Sagola, Michigan mill to siding production.

Overall, OSB structural solutions sales were down 59% while units shipped saw a 20% drop. OSB commodity prices dropped 55% as units shipped receded by 23%.

Siding sales fell 10% to $320 million for the quarter from sales of $358 million for the second quarter a year ago. While the average price increased 6% in the category, units shipped decreased by 16%.

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The Bottom Line: LP Building SOlutions reports a $20 million loss as OSB sales plummet by 66%.

What the CEO said: "LP earned $93 million in EBITDA in the quarter while operating with exceptional safety and efficiency," said Brad Southern, LP CEO and chairman. "As the housing outlook continues to improve, I am confident that LP's strategy positions us well for long-term growth."

Company Info: Click here to read the full second quarter 2023 financial report from LP Building Solutions.