Jul 25, 2013 | Posted in Corporate News, News

Note:  Financial references in US dollars unless otherwise indicated.


  • Earnings per share of $0.99 diluted ($1.00 basic) – versus $0.14 in Q2 2012
  • EBITDA of $102 million – more than triple Q2 2012
  • Norbord added to S&P/TSX Composite Index in June
  • Declared quarterly dividend of CAD $0.60 per share

TORONTO, ON (July 25, 2013) – Norbord Inc. (TSX: NBD, NBD.WT) today reported EBITDA of  $102 million in the second quarter of 2013, compared to $31 million in the same quarter last year and $111 million in the first quarter of 2013.  North American operations generated EBITDA of $92 million in the quarter versus $26 million last year and $106 million in the prior quarter.  European operations generated EBITDA of $12 million in the quarter versus $9 million last year and $10 million in the prior quarter.

Norbord recorded $53 million of earnings ($0.99 per share diluted) in the second quarter of 2013 compared to $6 million ($0.14 per share diluted) in the same quarter last year and $67 million ($1.26 per share diluted) in the prior quarter.

“In North America, we experienced a significant OSB price correction in the second quarter,” said Barrie Shineton, President and CEO.  “Although prices were expected to adjust after reaching record levels in the first quarter, I was surprised by the degree of the correction.  OSB prices are now recovering and I believe this trend will continue as the fundamentals supporting US new home construction remain very strong.”

“In Europe, panel demand and prices, particularly for OSB and particleboard, improved again this quarter and are reflected in our financial results.  And, we are beginning to see early signs of a fundamental turnaround in UK housing.  This is encouraging as the UK continues to be Norbord’s most important European market.”

Market Conditions

June year-to-date US housing starts and permits were both 24% higher than the same period last year.  Single family starts were 20% better.  Other key housing metrics, including home prices, existing home sales and the inventory of foreclosed homes, continued to improve.  The consensus forecast of US housing economists remains at 1.0 million starts for 2013, a 28% increase over last year.

After reaching a nine-year high of $430 per thousand square feet (Msf) (7⁄16-inch basis) in the first quarter, North American OSB prices moved steadily downward across all regions in the second quarter.  The North Central benchmark OSB price averaged $347 per Msf for the quarter, 48% higher than the same quarter last year but 17% lower than the previous quarter.  In the South East region, where approximately 55% of Norbord’s North American capacity is located, prices averaged $313 per Msf in the second quarter, compared to $204 per Msf in the same quarter last year and $396 per Msf in the prior quarter.

Second quarter European panel prices were 6% higher than the same quarter last year and 2% better than the prior quarter.  OSB and particleboard markets performed the strongest, with prices up 8% and 5%, respectively, over the same quarter last year.  Versus the prior quarter, OSB prices increased 3% while particleboard prices were flat.  MDF prices improved 3% versus both comparative periods.


In North America, second quarter OSB shipment volumes were flat year-over-year but increased 7% quarter-over-quarter due to improved mill operating performance and fewer scheduled annual maintenance shuts.  Norbord’s OSB mills produced at approximately 75% of installed capacity, unchanged from a year ago and up 5% versus the prior quarter.  Excluding the three mothballed mills, Norbord produced at 105% of stated capacity compared to 95% a year ago and in the prior quarter.

In response to increased demand from Norbord’s existing customers, the Company has been working to restart its Jefferson, Texas mill.  The mill had been mothballed since the first quarter of 2009 and represents 9% of the Company’s 4.4 billion square feet (3/8-inch basis) of North American OSB capacity.  The mill began initial production in June 2013 and is currently in ramp-up mode.  Norbord will continue to monitor market conditions, but does not currently expect to restart its curtailed mills in Huguley, Alabama or Val-d’Or, Quebec in 2013.

Norbord’s North American OSB cash production costs per unit (excluding mill profit share) increased by 11% year-over-year but decreased by 2% quarter-over-quarter.  Excluding the impact of higher raw material prices and Jefferson, Texas restart costs, unit costs increased by 4% compared to the prior year and decreased by 4% versus the prior quarter.  Year-over-year, the remaining increase in unit costs was driven primarily by higher supplies and maintenance costs.  Quarter-over-quarter, the decrease in unit costs is the result of fewer scheduled annual maintenance shuts and lower labour, supplies and maintenance costs.

In Europe, shipments were 6% higher than the same quarter last year and 2% higher than the prior quarter as panel demand improved.  Norbord’s European panel mills produced at approximately 100% of capacity in both the first and second quarters of 2013, compared to 95% in the same quarter last year.

Norbord did not report any gains from its Margin Improvement Program (MIP) in the second quarter as the benefits of improved productivity and a richer added-value product mix were offset by continued higher supplies and maintenance, labour costs and raw material usages.

Capital investments totaled $18 million in the quarter, $14 million higher year-over-year and $6 million higher quarter-over-quarter primarily due to capital spending to prepare the Jefferson, Texas mill for restart.  Norbord’s 2013 planned capital expenditures are targeted at $70 million, including approximately $16 million for Jefferson.

Operating working capital was $86 million compared to $64 million at the end of the same quarter last year and $101 million in the prior quarter.  The changes were primarily driven by the impact of volatile North American OSB prices on accounts receivable.

At quarter-end, Norbord had unutilized liquidity of $562 million, including $220 million of cash.  The Company’s tangible net worth was $520 million and net debt to total capitalization on a book basis was 30%, well within bank covenants.


The Board of Directors declared a quarterly dividend of CAD $0.60 per common share, payable on September 21, 2013 to shareholders of record on September 1, 2013.

Additional Information

Norbord’s Q2 2013 letter to shareholders, news release, management’s discussion and analysis, consolidated unaudited financial statements and notes to the financial statements have been filed on SEDAR ( and are available in the investor section of the Company’s website at  Shareholders are encouraged to read this material.

Conference Call

Norbord will hold a conference call for analysts and institutional investors on Thursday, July 25, 2013 at 11:00 a.m. ET.  The call will be broadcast live over the Internet via and  A replay number will be available approximately one hour after completion of the call and will be accessible until August 23, 2013 by dialing 1-888-203-1112 or 647-436-0148.  The passcode is 8838161.  Audio playback and a written transcript will be available on the Norbord website.

Norbord Profile

Norbord Inc. is an international producer of wood-based panels with assets of $1 billion, employing approximately 1,900 people at 13 plant locations in the United States, Europe and Canada.  Norbord is one of the world’s largest producers of oriented strand board (OSB).  In addition to OSB, Norbord manufactures particleboard, medium density fibreboard (MDF) and related value-added products.  Norbord is a publicly traded company listed on the Toronto Stock Exchange under the symbols NBD and NBD.WT.


Heather Colpitts
Manager, Corporate Affairs
Tel. (416) 365-0705

This news release contains forward-looking statements, as defined in applicable legislation, including statements related to our strategy, projects, plans, future financial or operating performance and other statements that express management’s expectations or estimates of future performance. Often, but not always, words such as  “expect,” “believe,” “forecast,” “likely,” “support,” “target,” “consider,” “continue,” “suggest,” “intend,”  “should,” “appear,” “would,” “will,” “will not,” “plan,” “can,” “may,” and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identify forward-looking statements.  Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Norbord to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Although Norbord believes it has a reasonable basis for making these forward-looking statements, readers are cautioned not to place undue reliance on such forward-looking information.  By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predictions, forecasts and other forward-looking statements will not occur.  Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include:  general economic conditions; risks inherent with product concentration; effects of competition and product pricing pressures; risks inherent with customer dependence; effects of variations in the price and availability of manufacturing inputs; risks inherent with a capital intensive industry; and other risks and factors described from time to time in filings with Canadian securities regulatory authorities.

Except as required by applicable laws, Norbord does not undertake to update any forward-looking statements, whether as a result of new information, future events or otherwise, or to publicly update or revise the above list of factors affecting this information.  See the “Caution Regarding Forward-Looking Information” statement in the March 1, 2013 Annual Information Form and the cautionary statement contained in the “Forward-Looking Statements” section of the 2012 Management’s Discussion and Analysis dated January 30, 2013 and Q2 2013 Management’s Discussion and Analysis dated July 24, 2013.