Norbord (OSB) Misses Q2 EPS by 78c, Revenues Miss

Norbord (NYSE: OSB) reported Q2 EPS of $0.22, $0.78 worse than the analyst estimate of $1.00. Revenue for the quarter came in at $421 million versus the consensus estimate of $532.58 million.

Q2 2020 HIGHLIGHTS

• Adjusted EBITDA of $84 million and Adjusted earnings of $0.38 per diluted share
• Reduced North American unit manufacturing costs by 9% quarter-over-quarter and 7% year-over-year
• Extended maturity of committed revolving bank lines to May 2022 and increased aggregate commitment from $245 million to $300 million
• Liquidity of $378 million at quarter-end
• Declared quarterly variable dividend of C $0.30 per share for shareholders of record on September 1, 2020
• Resuming limited production at Line 1 of Cordele, Georgia OSB mill to respond to stronger than expected demand

"The second quarter of 2020 started slowly as it overlapped with the significant pullback in economic activity that occurred during the early stages of the COVID-19 pandemic. However, we ultimately saw improving demand through the quarter that led to better than expected results. Our Adjusted EBITDA represented our best performance in seven quarters, more than doubling from year-ago levels and improving 12% from the prior quarter," said Peter Wijnbergen, Norbord's President & CEO. "Further, I am particularly pleased with our company's ability to drive down costs while continuing to work safely within the strict protocols required by the pandemic."

"Subsequent to the strong finish to the second quarter, customer demand has continued to increase well ahead of expectations, despite ongoing concern about the impact of COVID-19 on the broader economy. At Norbord, we have always been committed to producing what we can sell and what our customers need. A limited restart of Cordele Line 1 is the only option available to us to provide additional volume to our customers in the near term. Though these recent developments give us reason for optimism, it is unclear whether the worst of the pandemic is behind us, therefore we will maintain our approach of planning for the worst but being prepared for better. We will remain vigilant and will continue to focus on the health and safety of our employees as well as managing the business to be resilient and flexible."

For earnings history and earnings-related data on Norbord (OSB) click here.

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