LPX » Topics » 2007 compared to 2006

These excerpts taken from the LPX 10-K filed Feb 27, 2009.

2007 compared to 2006

OSB prices declined during 2007 as compared to the corresponding period of 2006 due to lower demand caused by a much weaker housing market. The impact of the reduction in selling price accounted for a decrease in net sales and operating profits of approximately $307 million for the period. As compared to the corresponding periods of 2006, the decline in sales volume is due to five factors: 1) our St. Michel, Quebec OSB mill was curtailed throughout 2007 (with permanent closure announced in October 2007); 2) our Silsbee, TX mill was curtailed in the fourth quarter of 2007; 3) production outages caused by wood shortages and maintenance aberrations; 4) the effect of the CN Railroad strike (primarily in the first quarter); and 5) planned capital outages. These declines were partially offset by higher production from our Peace Valley joint venture mill.

Compared to 2006, the primary factor, along with the reduced sales price, for decreased operating profits was the increase in our Canadian dollar denominated manufacturing costs and curtailed operations. The Canadian dollar strengthened significantly between 2006 and 2007, which caused our Canadian production costs stated in U.S. dollars to increase.

2007 compared to 2006

OSB prices declined during 2007 as compared to the corresponding period of 2006 due to lower demand caused by a much weaker housing market. The impact of the reduction in selling price accounted for a decrease in net sales and operating profits of approximately $307 million for the period. As compared to the corresponding periods of 2006, the decline in sales volume is due to five factors: 1) our St. Michel, Quebec OSB mill was curtailed throughout 2007 (with permanent closure announced in October 2007); 2) our Silsbee, TX mill was curtailed in the fourth quarter of 2007; 3) production outages caused by wood shortages and maintenance aberrations; 4) the effect of the CN Railroad strike (primarily in the first quarter); and 5) planned capital outages. These declines were partially offset by higher production from our Peace Valley joint venture mill.

Compared to 2006, the primary factor, along with the reduced sales price, for decreased operating profits was the increase in our Canadian dollar denominated manufacturing costs and curtailed operations. The Canadian dollar strengthened significantly between 2006 and 2007, which caused our Canadian production costs stated in U.S. dollars to increase.

2007 compared to 2006

Sales volume decreased in our SmartSide® siding line and in the commodity OSB produced at one of our siding mills for the year ended December 31, 2007 and remained relatively flat for our Canexel product line as

 

26


compared to the prior year. These declines were a result of reduced demand due to lower housing starts. Sales prices in our SmartSide® siding product line increased slightly as compared to the prior year due to changes in product mix, as well as price increases implemented in August of 2006. In our Canexel product line, sales prices increased due the impact of the strengthening Canadian dollar as a majority of these sales are made in Canada.

Overall, declines in operating results for our siding segment for the year ended December 31, 2007 as compared to the prior year were primarily due to lower sales volumes in our siding-based exterior products and lower sales volumes and prices in the OSB commodity products sold from this segment.

2007 compared to 2006

Sales volume decreased in our SmartSide® siding line and in the commodity OSB produced at one of our siding mills for the year ended December 31, 2007 and remained relatively flat for our Canexel product line as

 

26


compared to the prior year. These declines were a result of reduced demand due to lower housing starts. Sales prices in our SmartSide® siding product line increased slightly as compared to the prior year due to changes in product mix, as well as price increases implemented in August of 2006. In our Canexel product line, sales prices increased due the impact of the strengthening Canadian dollar as a majority of these sales are made in Canada.

Overall, declines in operating results for our siding segment for the year ended December 31, 2007 as compared to the prior year were primarily due to lower sales volumes in our siding-based exterior products and lower sales volumes and prices in the OSB commodity products sold from this segment.

2007 compared to 2006

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%;padding-bottom:3px;line-height:95%; vertical-align:top">Sales volume decreased in our SmartSideSIZE="1">® siding line and in the commodity OSB produced at one of our siding mills for the year ended December 31, 2007 and remained relatively flat for our Canexel product line as

 


26









compared to the prior year. These declines were a result of reduced demand due to lower housing starts. Sales prices in our SmartSideFACE="Times New Roman" SIZE="1">® siding product line increased slightly as compared to the prior year due to changes in product mix, as well as price increases implemented in August of 2006. In our Canexel product line, sales
prices increased due the impact of the strengthening Canadian dollar as a majority of these sales are made in Canada.

Overall, declines in
operating results for our siding segment for the year ended December 31, 2007 as compared to the prior year were primarily due to lower sales volumes in our siding-based exterior products and lower sales volumes and prices in the OSB commodity
products sold from this segment.

2007 compared to 2006

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%;padding-bottom:3px;line-height:95%; vertical-align:top">Sales volume decreased in our SmartSideSIZE="1">® siding line and in the commodity OSB produced at one of our siding mills for the year ended December 31, 2007 and remained relatively flat for our Canexel product line as

 


26









compared to the prior year. These declines were a result of reduced demand due to lower housing starts. Sales prices in our SmartSideFACE="Times New Roman" SIZE="1">® siding product line increased slightly as compared to the prior year due to changes in product mix, as well as price increases implemented in August of 2006. In our Canexel product line, sales
prices increased due the impact of the strengthening Canadian dollar as a majority of these sales are made in Canada.

Overall, declines in
operating results for our siding segment for the year ended December 31, 2007 as compared to the prior year were primarily due to lower sales volumes in our siding-based exterior products and lower sales volumes and prices in the OSB commodity
products sold from this segment.

2007 compared to 2006

Sales volumes in both LVL and I-Joist products decreased for the year ended December 31, 2007 as compared to the prior year due to the slowdown in the housing market. Net average selling prices declined as we continued to see price pressure caused by lower demand. During the year, we believe we gained market share in this business as our declines were less than the overall housing market (measured by housing starts).

Results of operations for EWP for the year ended December 31, 2007 as compared to the prior year were lower primarily due to lower sales volume and reductions in sales prices. Additionally, we realized some reductions in raw material costs (primarily OSB and lumber), which were offset by increases in conversion costs due to lower volumes.

2007 compared to 2006

Sales volumes in both LVL and I-Joist products decreased for the year ended December 31, 2007 as compared to the prior year due to the slowdown in the housing market. Net average selling prices declined as we continued to see price pressure caused by lower demand. During the year, we believe we gained market share in this business as our declines were less than the overall housing market (measured by housing starts).

Results of operations for EWP for the year ended December 31, 2007 as compared to the prior year were lower primarily due to lower sales volume and reductions in sales prices. Additionally, we realized some reductions in raw material costs (primarily OSB and lumber), which were offset by increases in conversion costs due to lower volumes.

2007 compared to 2006

In our moulding business, we saw a decline in sales volumes due to the loss of a home center customer. In our Chilean operations, sales pricing as well as volumes increased as we continued to penetrate the South American markets. We continued to construct our second OSB mill in Chile during 2007 and we incurred start up costs associated with this new operation. In our joint venture that produces and sells cellulose insulation, we saw increases in our paper costs as well as reduced sales due to the overall decline in new home construction. During 2007, we incurred significant legal expenses associated with a lawsuit relating to a non-operating facility. Overall, the operating profits of this category were lower primarily due to increased residual costs associated with several non-operating facilities.

2007 compared to 2006

In our moulding business, we saw a decline in sales volumes due to the loss of a home center customer. In our Chilean operations, sales pricing as well as volumes increased as we continued to penetrate the South American markets. We continued to construct our second OSB mill in Chile during 2007 and we incurred start up costs associated with this new operation. In our joint venture that produces and sells cellulose insulation, we saw increases in our paper costs as well as reduced sales due to the overall decline in new home construction. During 2007, we incurred significant legal expenses associated with a lawsuit relating to a non-operating facility. Overall, the operating profits of this category were lower primarily due to increased residual costs associated with several non-operating facilities.

2007 compared to 2006

As compared to 2006, we saw a decline in sales volumes of our decking business for 2007. Lower sales volumes in our decking operations are related to slower shipments to our distributors due to lower end user demand and production curtailments in the first half of 2007. Included in the loss on discontinued operations for 2007 is an impairment charge of $19.8 million to reduce the carrying values of the assets to their estimated fair value less estimated costs to sell. Also in 2007, we recorded a $2.9 million loss on an executed take-or-pay contract associated with related products to our decking operations and a $1 million charge associated with the anticipated settlement of an environmental issue on a previously closed site.

2007 compared to 2006

As compared to 2006, we saw a decline in sales volumes of our decking business for 2007. Lower sales volumes in our decking operations are related to slower shipments to our distributors due to lower end user demand and production curtailments in the first half of 2007. Included in the loss on discontinued operations for 2007 is an impairment charge of $19.8 million to reduce the carrying values of the assets to their estimated fair value less estimated costs to sell. Also in 2007, we recorded a $2.9 million loss on an executed take-or-pay contract associated with related products to our decking operations and a $1 million charge associated with the anticipated settlement of an environmental issue on a previously closed site.

2007 compared to 2006

SIZE="2">As compared to 2006, we saw a decline in sales volumes of our decking business for 2007. Lower sales volumes in our decking operations are related to slower shipments to our distributors due to lower end user demand and production
curtailments in the first half of 2007. Included in the loss on discontinued operations for 2007 is an impairment charge of $19.8 million to reduce the carrying values of the assets to their estimated fair value less estimated costs to sell. Also in
2007, we recorded a $2.9 million loss on an executed take-or-pay contract associated with related products to our decking operations and a $1 million charge associated with the anticipated settlement of an environmental issue on a previously closed
site.

2007 compared to 2006

SIZE="2">As compared to 2006, we saw a decline in sales volumes of our decking business for 2007. Lower sales volumes in our decking operations are related to slower shipments to our distributors due to lower end user demand and production
curtailments in the first half of 2007. Included in the loss on discontinued operations for 2007 is an impairment charge of $19.8 million to reduce the carrying values of the assets to their estimated fair value less estimated costs to sell. Also in
2007, we recorded a $2.9 million loss on an executed take-or-pay contract associated with related products to our decking operations and a $1 million charge associated with the anticipated settlement of an environmental issue on a previously closed
site.

These excerpts taken from the LPX 10-K filed Mar 7, 2008.

2007 compared to 2006

        As compared to 2006, we saw a decline in sales volumes of our decking business for 2007. Lower sales volumes in our decking operations are related to slower shipments to our distributors due to lower end user demand and production curtailment in the first half of 2007. Included in the loss on discontinued operations for 2007 is an impairment charge of $19.8 million to reduce the carrying values of the assets to their estimated fair value less estimated costs to sell. We also recorded a $2.9 million loss on an executed take-or-pay contract associated with related products to our decking operations and we recorded a $1 million charge associated with the anticipated settlement of an environmental issue on a previously closed site.

2007 compared to 2006



        As compared to 2006, we saw a decline in sales volumes of our decking business for 2007. Lower sales volumes in our decking operations are related to slower
shipments to our distributors due to lower end user demand and production curtailment in the first half of 2007. Included in the loss on discontinued operations for 2007 is an impairment charge of
$19.8 million to reduce the carrying values of the assets to their estimated fair value less estimated costs to sell. We also recorded a $2.9 million loss on an executed
take-or-pay contract associated with related products to our decking operations and we recorded a $1 million charge associated with the anticipated settlement of an
environmental issue on a previously closed site.



Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki