Louisiana-Pacific Corporation (NYSE:LPX) Q3 2023 Results Conference Call November 1, 2023 11:00 AM ET

Company Participants

Aaron Howald - Vice President of Investor Relations and Business Development

Brad Southern - Chief Executive Officer

Alan Haughie - Chief Financial Officer

Conference Call Participants

Mark Weintraub - Seaport Research Partners

Kurt Yinger - D.A. Davidson

Michael Roxland - Truist Securities

Susan Maklari - Goldman Sachs

Ketan Mamtora - BMO

Sean Steuart - TD Securities

George Staphos - Bank of America

Paul Quinn - RBC Capital Markets

Operator

Good day. And welcome to the Q3 2023 Louisiana-Pacific Corporation Earnings Conference Call [Operator Instructions]. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker, Mr. Aaron Howald, Vice President of Investor Relations and Business Development. Please go ahead, sir.

Aaron Howald

Thank you, operator, and good morning, everyone. Thank you for joining us to discuss LP's results for the third quarter of 2023 as well as our updated full year outlook. My name is Aaron, and I am LP's Vice President, Investor Relations and Business Development. With me this morning are Brad Southern, LP's Chief Executive Officer; and Alan Haughie, LP's Chief Financial Officer. During this morning's call, we will refer to a presentation that is available on LP's IR web page, which is investor.lpcorp.com. Our 8-K filing is also available there along with our earnings press release and other materials detailing LP's strategy and sustainable business model. Today's discussion will contain forward-looking statements and non-GAAP financial metrics as described on Slides 2 and 3 of the earnings presentation. The Appendix of the presentation also contains reconciliations that are further supplemented by this morning's 8-K. I will incorporate that content here in my reference rather than reading the slides. And with that, I'll turn the call over to Brad.

Brad Southern

Thanks, Aaron, and thank you all for joining us to discuss LP's Q3 results and our full year outlook. The third quarter was our strongest of the year by far for both Siding and OSB. It was also a quarter in which LP's teams achieved key milestones for growth and sustainability, one of which we will recognize while continuing focus on building a stronger and more inclusive culture. Page 5 of the presentation shows financial highlights for the quarter. LP generated $728 million in net sales in the quarter, which was 15% lower than Q3 last year at higher OSB prices and improved sell-through and inventory normalization and Siding led to a higher overall EBITDA margin than last year with the result that LP earned $190 million in EBITDA, only 5% less in Q3 of last year. As a result, LP exceeded the high end of our guidance range despite OSB prices falling in September. The $190 million in EBITDA translated very cleanly to $187 million in operating cash flow and LP ended the quarter with $160 million in cash on hand after returning $17 million to shareholders via dividends and investing $49 million in growth and sustaining capital. We repaid our revolving credit facility and ended the quarter with over $700 million in liquidity.