Wood Panels
October 30, 2015 - Norbord Inc. today reported Adjusted EBITDA of $30 million in the third quarter of 2015 compared to $19 million in both the second quarter of 2015 and third quarter of 2014. The increase versus the two comparative periods is primarily due to higher shipment volumes and a number of cost improvements. North American operations generated Adjusted EBITDA of $22 million in the quarter compared to $11 million in both the prior quarter and the same quarter last year. European operations delivered Adjusted EBITDA of $11 million in the quarter versus $10 million in the prior quarter and $11 million in the same quarter last year.

"Our improved financial results reflect the excellent operational performance of our North American and European mills," said Peter Wijnbergen, Norbord's president and CEO. "Our continued focus on controllables has generated $24 million more EBITDA year-to-date from increased productivity and lower raw materials usage. These improvements are positively impacting our manufacturing costs along with lower resin prices and the weaker Canadian dollar. North American housing demand continues to grow and sales to our home construction, home improvement and industrial customers are all increasing.  While the recent increase in North American OSB prices is not yet visible in our financial results due to the lag effect of maintaining an order file, we will see this benefit in the fourth quarter.

"In Europe, our panel business delivered another solid quarter. Sales volumes in our key U.K. and German markets continue to improve and are offsetting the impact of lower OSB prices and the weaker Euro. Encouragingly, we believe we have finally seen a bottom in the downward OSB price trend on the continent.

"Finally, we have made steady progress on our integration efforts following our merger with Ainsworth six months ago. To date, we have captured $20 million of our $45 million annualized synergies target, with further operational and sales/logistics benefits to come by year-end."

Norbord recorded an adjusted loss of $4 million or $0.05 per share (basic and diluted) in the third quarter of 2015 compared to an adjusted loss of $12 million or $0.14 per share (basic and diluted) in the prior quarter and $11 million or $0.13 per share (basic and diluted) in the third quarter of 2014.  Adjusted losses exclude non-recurring items and use a normalized income tax rate:

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Market conditions
In North America, September year-to-date U.S. housing starts were up 12 per cent versus the same period in 2014 and the current seasonally-adjusted annualized rate is 1.21 million. Single family starts, which use approximately three times more OSB than multi-family, increased by 11 per cent. Permits were 13 per cent higher year-to-date. The consensus forecast from U.S. housing economists is approximately 1.1 million starts for 2015, which would be a 10 per cent improvement over last year.

After bottoming in early August, North American benchmark OSB prices increased steadily during the remainder of the quarter as U.S. new home construction activity and OSB demand continued to improve. The North Central benchmark OSB price averaged $204 per thousand square feet (Msf) (7/16-inch basis) for the quarter, compared to $193 per Msf in the previous quarter and $216 per Msf in the same quarter last year. In the South East region, where approximately 35 per cent of Norbord's North American OSB capacity is located, benchmark prices were largely unchanged, averaging $176 per Msf compared to $174 per Msf in the prior quarter and $177 per Msf in the same quarter last year. The Western Canada benchmark averaged $158 per Msf for the quarter, compared to $152 per Msf in the previous quarter and $187 per Msf in the same quarter last year.

In Europe, panel demand continues to grow, reflecting improving housing markets and OSB substitution in the Company's core geographies, particularly the U.K. and Germany. OSB prices remained under pressure year-over-year as eastern European supply was redirected toward the west due to the ongoing Ukraine conflict, but were flat quarter-over-quarter for the first time in 12 months. Particleboard prices remained steady, while medium density fibreboard (MDF) prices were down slightly. As a result, third quarter average panel prices were in line with the prior quarter and 10 per cent lower than the same quarter last year.

Performance
North American OSB shipments increased two per cent quarter-over-quarter and year-to-date and three per cent year-over-year, primarily due to increased mill productivity and fewer maintenance shuts. 

Norbord's operating North American OSB mills produced at approximately 90 per cent of stated capacity (excluding the two curtailed mills in Huguley, Alabama and Val-d'Or, Quebec), unchanged from the prior quarter and up from 85 per cent in the same quarter last year. Mill productivity improved year-over-year with capacity utilization impacted by the timing of maintenance shuts. Two mills achieved quarterly production records.

Norbord's North American OSB cash production costs per unit decreased by four  per cent compared to the prior quarter, 14 per cent versus the same quarter last year and nine  per cent year-to-date. Unit costs declined due to improved productivity, lower raw material use and resin prices, fewer maintenance shuts and the weaker Canadian dollar.

In Europe, Norbord's shipments increased three per cent versus the prior quarter, five  per cent versus the same quarter last year and four per cent year-to-date. One mill achieved a quarterly production record and the European operations produced at approximately 100 per cent of stated capacity, unchanged from both the prior quarter and the same quarter last year (90 per cent based on restated capacity disclosed at year-end 2014). 

Norbord's mills delivered Margin Improvement Program (MIP) gains of $34 million year-to-date primarily from improved productivity and lower raw material use.  MIP gains are measured relative to the prior year at constant prices and exchange rates.

Capital investments totalled $43 million year-to-date, down from $88 million in 2014 due to the larger scope of capital projects undertaken last year. Norbord's 2015 planned capital expenditures remain targeted at $70 million and include further debottlenecking and cost reduction projects under the Company's multi-year capital reinvestment strategy.

Operating working capital was $145 million at quarter-end compared to $151 million in the prior quarter and $121 million at the end of the same quarter last year with changes primarily driven by the timing of both payments and maintenance shuts.

At quarter-end, Norbord had unutilized liquidity of $323 million, consisting of $2 million in cash and $321 million in unused credit lines. At quarter-end, $44 million was drawn under the accounts receivable securitization program. The Company's tangible net worth was $722 million and net debt to capitalization on a book basis was 51 per cent. Both ratios remain well within bank covenants. 

Dividend
The Board of Directors declared a quarterly dividend of CAD $0.10 per common share, payable on December 21, 2015 to shareholders of record on December 1, 2015.

Norbord's variable dividend policy targets the payment to shareholders of a portion of free cash flow based upon the Company's financial position, results of operations, cash flow, capital requirements and restrictions under the Company's revolving bank lines, as well as the market outlook for the Company's principal products and broader market and economic conditions, among other factors. The Board retains the discretion to amend the Company's dividend policy in any manner and at any time as it may deem necessary or appropriate in the future. For these reasons, as well as others, the Board in its sole discretion can decide to increase, maintain, decrease, suspend or discontinue the payment of cash dividends in the future.

Normal Course Issuer Bid
Norbord also announced today that the Toronto Stock Exchange (TSX) has accepted its notice of intention to conduct a normal course issuer bid in accordance with TSX rules. Under the bid, Norbord may purchase up to 4,270,085 of its common shares, representing five per cent of the company's issued and outstanding common shares of 85,401,715 as of October 20, 2015, pursuant to TSX rules.

Purchases under the bid may commence on November 3, 2015, and will terminate on the earlier of November 2, 2016, the date Norbord completes its purchases pursuant to the notice of intention to make a normal course issuer bid filed with the TSX or the date of notice by Norbord of termination of the bid. Purchases will be made on the open market by Norbord through the facilities of the TSX or alternative trading systems, if eligible, in accordance with the requirements of the TSX and applicable Canadian securities laws. The price that Norbord will pay for any such common shares will be the market price of such shares at the time of acquisition. Common shares purchased under the bid will be cancelled. Norbord's average daily trading volume on the TSX during the last six calendar months was 198,359 common shares. Daily purchases of common shares will not exceed 49,589 subject to the Company's ability to make "block" purchases under the rules of the TSX. Norbord did not acquire any common shares in the past 12 months.

Norbord believes that the market price of its common shares at certain times may be attractive and that the purchase of these common shares from time to time would be an appropriate use of Norbord's funds in light of potential benefits to remaining shareholders.

From time to time, when Norbord does not possess material non-public information about itself or its securities, it may enter into an automatic purchase plan with its broker to allow for the purchase of common shares at times when Norbord ordinarily would not be active in the market due to its own internal trading blackout periods, insider trading rules or otherwise. Any such plans entered into with Norbord's broker will be adopted in accordance with applicable Canadian securities laws.

Additional information
Norbord's Q3 2015 letter to shareholders, news release, management's discussion and analysis, consolidated unaudited interim financial statements and notes to the financial statements have been filed on SEDAR (www.sedar.com) and are available in the investor section of the Company's website at www.norbord.com.  The company has also made available on its website presentation materials containing certain historical and forward-looking information relating to Norbord, including materials that contain additional information about the Company's financial results.  Shareholders are encouraged to read this material.

Note:  Financial references in US dollars unless otherwise indicated.  Results reflect combined company performance following completion of merger with Ainsworth Lumber Co. Ltd. (Ainsworth) on March 31, 2015 and all prior period comparatives have been restated.

Norbord profile
Norbord Inc. is a leading global manufacturer of wood-based panels and the world's largest producer of oriented strand board (OSB).  In addition to OSB, Norbord manufactures particleboard, medium density fibreboard and related value-added products.  Norbord has assets of approximately $1.8 billion and employs approximately 2,600 people at 17 plant locations in the United States, Canada and Europe.  Norbord is a publicly traded company listed on the Toronto Stock Exchange under the symbol NBD.

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; ability to realize synergies; 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 January 27, 2015 Annual Information Form and the cautionary statement contained in the "Forward-Looking Statements" section of the 2014 Management's Discussion and Analysis dated January 27, 2015 and Q3 2015 Management's Discussion and Analysis dated October 29, 2015.

Norbord defines Adjusted EBITDA as earnings (loss) before finance costs, income taxes, depreciation and other unusual or non-recurring items, and adjusted earnings (loss) as earnings (loss) determined in accordance with IFRS before unusual or non-recurring items and using a normalized income tax rate. Adjusted EBITDA and adjusted earnings (loss) are non-International Financial Reporting Standards (IFRS) financial measures, do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. See "Non-IFRS Financial Measures" in Norbord's Q3 2015 Management's Discussion and Analysis dated October 29, 2015 for a quantitative reconciliation of Adjusted EBITDA and adjusted earnings (loss) to earnings (the most directly comparable IFRS measure). 

October 20, 2015 - Recovery is a word used often in the wood products industry. Every mill operation is looking to maximize what they can get out of every log that passes through their mills. So it’s no surprise that when Gorman Bros. decided to invest millions of dollars into a new green end lathe line for their Canoe Forest Products plywood plant in Salmon Arm, B.C., that optimization was the name of the game.

October 15, 2015 - Second quarter 2015 net earnings reported by the major Canadian forest products companies are overall lower than the first quarter 2015 and second quarter of 2014, according to PwC’s Global Forest and Paper Industry Net Earnings Summary. The report notes that a decrease in the price of lumber and panels impacted the major Canadian building products manufacturers, including Canfor, West Fraser and Norbord.

However, the foreign exchange rate in Q2 2015 was beneficial to Canadian companies exporting to U.S., and the average softwood pulp (NBSK) prices increased to US$975/tonne from US$888/tonne in Q1, reports PwC. Hardwood pulp (BEK) prices increased to US$892/tonne from US$759/tonne in Q1.

PwC says the Canadian dollar averaged $0.81 USD in the second quarter of 2015, down significantly from the 2014 first quarter average of $0.91 USD.

Western Canadian-based companies posted net earnings of $3.6 million in the second quarter of 2015, compared to net earnings of $121.9 million in the first quarter of 2015 and net earnings of $167.6 million in the second quarter of 2014. Second quarter results of softwood lumber producers Canfor and West Fraser were impacted by the decrease in lumber and panel prices. Canfor reported quarterly earnings of $23.9 million, compared to $47.0 million in the first quarter and $64.5 million in the second quarter of 2014. West Fraser reported quarterly earnings of $14.0 million, compared to $49.0 million in the first quarter and $74.0 million in the second quarter of 2014.

Eastern Canadian-based companies posted net losses of $25.2 million in the quarter, compared to net losses of $121.3 million in the first quarter of 2015 and losses of $30.1 million in the second quarter of 2014. Cascades posted net earnings of $24.0 million in the quarter, compared to net losses of $35.0 million in the first quarter of 2015 and losses of $83.0 million in the second quarter of 2014. The company’s second quarter results were driven by higher sales volumes in the containerboard and tissue papers business segments, slight increases in average selling prices and a favourable foreign exchange environment.

South of the border, nine of the largest U.S.-based forest and paper companies reported net earnings of US$519.5 million in the second quarter of 2015, down from earnings of US$1.29 billion in the first quarter of 2015 and US$1.30 billion in the second quarter of 2014.

The merger of packaging companies Rock-Tenn Company and MeadWestvaco Corporation was finalized in the second quarter after receiving approval from the shareholders of both companies. The newly formed entity, WestRock Company, will be the second largest U.S.-based packaging company, with a market capitalization of US$16 billion. International Paper is currently the largest packaging company in the U.S. with a market capitalization of US$20 billion.

Ten of the largest European based forest and paper companies reported net earnings of € 751.0 million for the second quarter of 2015, down from € 825.1 million in the first quarter of 2015 and €615.9 million reported in the second quarter of 2014.

Six of the largest forest and paper companies in Japan posted net earnings of US$367.4 million in the second quarter of 2015, compared to earnings of US$215.2 million in the first quarter of 2015 and earnings of US$ 150.5 million in the second quarter of 2014.

In the Emerging Markets regions, five of the largest forest and paper companies reported net earnings of US$458.8 million, compared to net losses of US$409.2 million in the first quarter of 2015 and net earnings of US$562.9 million in the second quarter of 2014. The depreciation of the Brazilian Real against the US dollar and price increases for pulp bolstered both Fibria and Suzano’s second quarter results. Fibria reported quarterly earnings of US$199.9 million, compared to losses of US$202.0 million in the first quarter. Suzano reported quarterly earnings of US$148.4 million, compared to losses of US$271.9 million in the first quarter.
September 17, 2015 - Louisiana-Pacific Corporation announced that it will not submit a project to the Quebec Minister of Forests, Wildlife and Parks’ Project Office to reacquire the wood license associated with its Chambord, Que., oriented strand board (OSB) mill.

After an in-depth analysis of the mill’s historical and projected costs, LP determined that market demand does not warrant operating the Chambord mill at this time, and it is not appropriate to reacquire the wood license without a plan for operating the mill.

“Based on these analyses, we do not believe that in the current OSB market, the mill can be operated competitively,” LP executive vice-president, OSB, Brad Southern said. “The mill will remain curtailed indefinitely for the foreseeable future.”

LP indefinitely curtailed production at the mill in 2008 due to worsening North American housing market conditions.

OSB is a commodity structural panel product that is highly dependent on cyclical and sometimes volatile North American housing starts and subject to competitive forces of regional supply and demand.

LP’s decision to not submit a project is based on the ongoing soft market for residential building materials in North America, high production and raw materials costs in Chambord and a competitive landscape that has become more challenging over the last seven years.

“The restart of this mill will require a substantial capital investment, and there’s no guarantee that we would get a return on that investment now, or in the foreseeable future,” said Mike Blosser, LP’s vice-president for EHS, forest resources, supply and logistics. 

It is important to note that LP continues to operate and invest in its Maniwaki, Que., OSB mill, Blosser said.

“We look forward to working with the Ministry to ensure the economic viability of LP Maniwaki through volatile cycles of the North American housing market,” Blosser added.

About LP
Louisiana-Pacific Corporation is a leading manufacturer of quality engineered wood building materials including OSB, structural framing products, and exterior siding for use in residential, industrial and light commercial construction. From manufacturing facilities in the U.S., Canada, Chile and Brazil, LP products are sold to builders and homeowners through building materials distributors and dealers and retail home centers. Founded in 1973, LP is headquartered in Nashville, Tennessee and traded on the New York Stock Exchange under LPX. For more information, visit www.lpcorp.com.

September 16, 2015 - ARAUCO North America announced plans to build a new particleboard mill in Grayling, Mich. to produce 424 million sq. ft. (750,000m3)/year of panels, along with full lamination capabilities to support the company's thermally fused laminate decorative surfacing program.

This $325-million investment will be the single largest continuous particleboard press in North America and one of the highest capacity presses in the world. Groundbreaking is estimated for late 2016, with the rollout of the first panel during the latter part of 2018.

August 25, 2015 - The wood/fiber-based panels sector is enjoying improved commercial and consumer end-use demand levels on a sub-regional scale, based on recovering organic growth following the recession.
July 30, 2015 - Norbord Inc. recently reported adjusted EBITDA of $18 million in the second quarter of 2015 compared to $14 million in the first quarter of 2015 and $46 million in the second quarter of 2014. The year-over-year change is primarily due to lower North American oriented strand board (OSB) prices. North American operations generated Adjusted EBITDA of $11 million in the quarter, unchanged from the prior quarter and compared to $37 million in the same quarter last year. European operations delivered Adjusted EBITDA of $10 million in the quarter versus $7 million in the prior quarter and $12 million in the same quarter last year.

“The poor North American OSB demand/capacity ratio continued to impact OSB prices in the second quarter,” said Peter Wijnbergen, Norbord's president and CEO. “We curtailed production at several mills in response to the slower than expected rebound in new home construction demand. However, the May and June US housing data was encouraging, we are starting to see a pick-up in export orders and our sales to home improvement and industrial customers continue to grow. All this supports our belief that the OSB market dynamic will gradually improve in the coming quarters. In the meantime, our manufacturing costs continue to decline as we focus on our controllables and benefit from lower resin prices and the weaker Canadian dollar.

"In Europe, our financial results are back on track, returning to their trend of generating double-digit quarterly EBITDA. Improving sales volumes in our key markets, particularly the UK, are offsetting the impact of lower OSB prices and the weaker Euro. 

"Finally, we remain focused on our integration efforts following the completion of our merger with Ainsworth four months ago. Of our $45 million annualized synergies target, we have already realized $4 million from early initiatives. Our sales and financial systems were recently integrated, and we remain on track to achieve half of our synergies target by year-end.”

Norbord recorded an adjusted loss of $13 million or $0.15 per share (basic and diluted) in the second quarter of 2015 compared to an adjusted loss of $15 million or $0.18 per share (basic and diluted) in the prior quarter and adjusted earnings of $9 million or $0.11 per basic share ($0.10 per diluted share) in the second quarter of 2014.  

Market Conditions
In North America, June year-to-date U.S. housing starts were up 11 per cent versus the same period in 2014. Single family starts, which use approximately three times more OSB than multi-family, increased by nine per cent. Permits were 16 per cent higher year-over-year and the seasonally-adjusted annualized rate stands at 1.34 million. The consensus forecast from U.S. housing economists is 1.1 million starts for 2015, which would be a 10 per cent improvement over last year.

Despite improving U.S. new home construction activity, prices continue to be impacted by the poor OSB demand/capacity ratio. While North Central, South East and Western Canada benchmark OSB prices all increased earlier in the quarter, this upward momentum flattened in June. The North Central benchmark OSB price averaged $193 per thousand square feet (Msf) (7/16-inch basis) for the quarter, unchanged from the previous quarter and compared to $219 per Msf in the same quarter last year. In the South East region, where approximately 35% of Norbord's North American OSB capacity is located, benchmark prices averaged $174 per Msf compared to $175 per Msf in the prior quarter and $199 per Msf in the same quarter last year. The Western Canada benchmark averaged $152 per Msf for the quarter, compared to $159 per Msf in the previous quarter and $206 per Msf in the same quarter last year.

In Europe, panel demand continues to grow, reflecting improving housing markets and OSB substitution in the Company's core geographies, particularly the UK and Germany. However, OSB prices remain under pressure due to the weaker Euro and the redirection of eastern European supply toward the west as a result of the ongoing Ukraine conflict. Particleboard prices remained steady, while medium density fibreboard (MDF) prices were down slightly.  As a result, second quarter average panel prices were down 3% from the prior quarter and 12% lower than the same quarter last year.

Performance
North American OSB shipments increased by 10 per cent, quarter-over-quarter, primarily due to increased productivity and more fiscal days in the second quarter.  Second quarter shipments were in line with the same quarter last year as improved mill productivity offset production curtailments.

Norbord's operating North American OSB mills produced at approximately 90% of stated capacity (excluding the two curtailed mills in Huguley, Alabama and Val-d'Or, Quebec) compared to 85% in the prior quarter and 90 per cent in the same quarter last year.  Mill productivity improved over both comparative quarters with capacity utilization impacted by the level of production curtailments.

Norbord's North American OSB cash production costs per unit decreased by five per cent compared to the prior quarter and seven per cent, versus the same quarter last year due to lower resin prices, improved productivity and lower raw material use. The year-over-year decline was also driven by the weaker Canadian dollar.

In Europe, Norbord's shipments were three per cent higher versus the prior quarter and 11 per cent higher than the same quarter last year. Three of the four mills achieved quarterly production records and the European operations produced at approximately 100 per cent of stated capacity compared to 95 per cent in the prior quarter and 95% in the same quarter last year (based on restated capacity). As previously reported, at year-end 2014 the annual capacity at three of the four mills was restated.

Norbord's mills delivered Margin Improvement Program (MIP) gains of $21 million year-to-date primarily from improved productivity and lower raw material use.

Capital investments totalled $28 million year-to-date compared to $53 million in 2014 due to the larger scope of capital projects undertaken last year. Norbord's 2015 planned capital expenditures remain targeted at $70 million and include further debottlenecking and cost reduction projects under the Company's multi-year capital reinvestment strategy.

Operating working capital was $151 million at quarter-end compared to $146 million in the prior quarter and $158 million at the end of the same quarter last year with changes primarily driven by seasonality, timing and foreign exchange translation.

At quarter-end, Norbord had unutilized liquidity of $326 million, consisting of $10 million in cash and $316 million in unused credit lines. At quarter-end, $50 million was drawn under the accounts receivable securitization program. The company's tangible net worth was $738 million and net debt to total capitalization on a book basis was 50%.  Both ratios remain well within bank covenants. As previously disclosed, following the Ainsworth merger Norbord amended its revolving bank lines to reset the tangible net worth covenant to $450 million and increased its accounts receivable securitization program commitment limit from $100 million to $125 million.

Developments
As previously announced, Norbord completed its merger with Ainsworth on March 31, 2015. Under the terms of the all-share transaction, Norbord acquired all of the outstanding common shares of Ainsworth and Ainsworth shareholders received 0.1321 of a share of Norbord for each Ainsworth share. Ainsworth became a wholly-owned subsidiary of Norbord.

On April 16, 2015, Norbord completed the issuance of $315 million in senior secured notes due 2023 with an interest rate of 6.25 per cent. Debt issue costs of $6 million were incurred in connection with the issuance. The company used the proceeds to redeem prior to maturity the $315 million senior secured notes due 2017 that were assumed upon closing of the merger on March 31, 2015. As a result of the early redemption, a cash premium of $13 million was paid, a $1 million non-cash charge related to net unamortized debt issue costs was recorded and an $11 million non-cash charge to extinguish the related derivative financial instrument was recognized.

Dividend
Norbord's variable dividend policy targets the payment to shareholders of a portion of free cash flow based upon the Company's financial position, results of operations, cash flow, capital requirements and restrictions under the Company's revolving bank lines, as well as the market outlook for the Company's principal products and broader market and economic conditions, among other factors.

Taking into account weaker than expected North American OSB prices to-date in 2015, to maintain flexibility in the Company's capital structure, as well as to fund growth and other attractive capital investment opportunities, the Board of Directors has adjusted the quarterly dividend level to CAD $0.10 per common share.  Accordingly, the Board declared a quarterly dividend of CAD $0.10 per common share, payable on September 21, 2015 to shareholders of record on September 1, 2015.

The Board retains the discretion to amend the Company's dividend policy in any manner and at any time as it may deem necessary or appropriate in the future.  For these reasons, as well as others, the Board in its sole discretion can decide to increase, maintain, decrease, suspend or discontinue the payment of cash dividends in the future.

Additional information
Norbord's Q2 2015 letter to shareholders, news release, management's discussion and analysis, consolidated unaudited interim financial statements and notes to the financial statements have been filed on SEDAR (www.sedar.com) and are available in the investor section of the Company's website at www.norbord.com. Shareholders are encouraged to read this material.

Norbord Profile
Norbord Inc. is a leading global manufacturer of wood-based panels and the world's largest producer of oriented strand board (OSB).  In addition to OSB, Norbord manufactures particleboard, medium density fibreboard and related value-added products.  Norbord has assets of approximately $1.8 billion and employs approximately 2,600 people at 17 plant locations in the United States, Canada and Europe.  Norbord is a publicly traded company listed on the Toronto Stock Exchange under the symbol NBD.

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; ability to realize synergies; 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 January 27, 2015 Annual Information Form and the cautionary statement contained in the "Forward-Looking Statements" section of the 2014 Management's Discussion and Analysis dated January 27, 2015 and Q2 2015 Management's Discussion and Analysis dated July 29, 2015.

Norbord defines Adjusted EBITDA as earnings (loss) before finance costs, income taxes, depreciation and other unusual or non-recurring items, and adjusted earnings (loss) as earnings (loss) determined in accordance with IFRS before unusual or non-recurring items and using a normalized income tax rate. Adjusted EBITDA and adjusted earnings (loss) are non-International Financial Reporting Standards (IFRS) financial measures, do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. See "Non-IFRS Financial Measures" in Norbord's Q2 2015 Management's Discussion and Analysis dated July 29, 2015 for a quantitative reconciliation of Adjusted EBITDA and adjusted earnings (loss) to earnings (the most directly comparable IFRS measure).

To Our Shareholders,

This is our first quarter following the merger with Ainsworth and in spite of a slower than expected recovery in OSB demand in North America, it is an exciting time for our Company. Through the transaction with Ainsworth, we now have the opportunity to build a leading global wood products company, active on three continents, better positioned to serve our customers, and able to achieve higher returns for our shareholders. We expect to realize the full benefits of the merger over the next several quarters.

Adjusted EBITDA for the quarter was $18 million, which is largely in line with the previous quarter. Low OSB prices have been offset by strong operational performance and cost reductions across all of our mills. Long time Norbord shareholders will notice that our North American numbers now include production at our mills in British Columbia, Alberta and Ontario, as well as results from our Asian export business.

With all the positive headlines coming out of the US housing market, you may be wondering why this did not flow through to our financial performance in the second quarter. The most recent numbers for June show that US housing starts have increased 11% year-to-date and are currently at a 1.17 million annual pace. But the APA industry production statistics show this did not translate into increased demand on North American OSB mills. We believe there were two main drivers: a pro-dealer network (which services the large home builders) that was destocking inventories and the stronger US dollar which has lowered overseas export volume. As a result, industry-wide operating capacity was more than sufficient to satisfy demand.

While this has made the first half of this year disappointing, we see encouraging signs in the market. Asian export orders are starting to pick-up again, and this region remains an exciting area with real growth potential for Norbord. In the US, June housing permits were at a 1.34 million annual pace and we believe pro-dealer inventories are now at rock bottom levels. These suggest increased demand, and a gradual improvement of the industry demand/capacity ratio, which we would expect to lead to better OSB prices.

Other positive signs include our year-to-date sales to North American home improvement and furniture customers that were up about 8%. Sales in these channels are an important aspect of our diversification strategy away from new home construction, giving us more consistent shipment volumes during periods of volatile homebuilding-related demand.

Our European business performed well this quarter. The United Kingdom is our key market and we have realized double-digit year-over-year gains in sales there. Sales volume for all our panel products was up 5% versus the prior quarter and 12% versus the previous year. These higher volumes have helped offset the softer OSB price environment and put our European financial results back on trend.

All of our mills continued to operate well, with increased uptime and speed. These productivity improvements combined with further progress on reducing raw material use resulted in $21 million in year-to-date Margin Improvement Program gains. As a result, cash manufacturing costs – a key operational metric – decreased at both our North American and European mills and are now 12% lower than 18 months ago.

The key corporate priority this year is the integration of the former Ainsworth operations into the 'new Norbord'. Since the completion of the merger in April we have made great strides, including moving the two companies to single sales and financial reporting systems at the end of the quarter. We were able to complete this conversion in three months, without any disruption to the business, and our customers are telling us that the transition has been seamless from their perspective. As part of the integration effort we have achieved a number of early savings and have already captured $4 million in annualized synergies. Corporate synergies are already locked in and will be evident in our numbers starting in Q4. The majority of the remaining opportunities involve optimizing our product mix across a broader platform to lower freight and manufacturing costs and implementing a number of process and technology changes across our seventeen mills. We are on track to reach half of our $45 million annualized synergy target by year-end.

In today's press release, you will see that the Board has adjusted the quarterly dividend level to CAD $0.10 per share. For the reasons set out above, we did not see the expected improvement in the North American OSB market during the seasonally stronger second quarter. This had us re-evaluate our outlook for the near term and take the prudent step of reducing our dividend payout. We remain committed to returning cash to shareholders, and will continue to evaluate the dividend level as the US housing recovery plays out.

Looking further ahead, we remain convinced that OSB demand will improve. Our operational results, particularly our continued progress on costs, demonstrate that the fundamentals of our company are solid. Our financial results this quarter are not where we would like them to be. However, we are confident we will see the benefits of steadily improving market conditions in our results as we focus on continuing to execute on our business strategy and achieving the merger synergies.

Thank you for your continued confidence and investment in Norbord.  I look forward to reporting on our continued progress next quarter.

Peter Wijnbergen
President & CEO

This letter includes forward-looking statements, as defined by applicable securities 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, forward-looking statements can be identified by the use of words such as "expect," "suggest," "support," "believe," "should," "potential," "likely," "continue," "forecast," "plan," "indicate," "consider," "future," or variations of such words and phrases or statements that certain actions "may," "could," "must," "would," "might," or "will" be undertaken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Norbord to be materially different from any future results, performance or achievement expressed or implied by the forward-looking statements.  See the cautionary language in the Forward-Looking Statements section of the 2014 Management's Discussion and Analysis dated January 27, 2015 and Q2 2015 Management's Discussion and Analysis dated July 29, 2015.

Norbord defines Adjusted EBITDA as earnings (loss) before finance costs, income taxes, depreciation and other unusual or non-recurring items. Adjusted EBITDA is a non-International Financial Reporting Standards (IFRS) financial measure, does not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. See "Non-IFRS Financial Measures" in Norbord's Q2 2015 Management's Discussion and Analysis dated July 29, 2015 for a quantitative reconciliation of Adjusted EBITDA to earnings (the most directly comparable IFRS measure). 
July 8, 2015 - Canada's wood products industry is benefiting from the ongoing recovery in the U.S. housing and a weaker Canadian dollar, according to The Conference Board of Canada's latest outlook for Canada's wood products industry.

"The continued recovery in the U.S. housing market is supporting increased demand for Canadian wood products, leading to a 8.7 per cent increase in export volumes this year," said Michael Burt, Director, Industrial Economic Trends, The Conference Board of Canada. "However, while production should remain strong over the next five years, growth is set to eventually slow due to timber shortages in B.C. and softer growth in demand from China."

Highlights

  • Rising production and higher prices mean industry revenues are set to reach nearly $29 billion by 2016.
  • Pushed higher by increases in production and rising material costs, industry costs are expected to rise by 8.7 per cent in 2015.
  • The spread of the mountain pine beetle continues to pose a risk for Canada's lumber supply.
Industry production is expected to grow by 6 per cent in 2015. This, combined with higher prices will support industry revenues, which are set to reach just under $29 billion by 2016. However, rising production and material costs are expected to drive strong cost growth in the industry. Overall, industry costs are set to rise by 8.7 per cent in 2015. The industry will need to find cost-cutting initiatives to help support its bottom line.

With cost increases forecast to exceed revenue growth, pre-tax profits in the wood manufacturing industry are expected to fall 0.2 per cent to $1.4 billion in 2015.

Various risks cloud the outlook over the medium term. While production will continue to increase, timber supply constraints (a result of the mountain pine beetle infestation) will continue to limit domestic production. These supply problem will plague lumber companies operating in British Columbia's interior and could lead to plant closures.

In addition, the current Canada-U.S. Softwood Lumber agreement is set to expire this October, which will likely affect Canadian softwood lumber producers' access to the U.S. market.

SOURCE: Conference Board of Canada
June 4, 2015 - MTS Sensors, a division of MTS Systems Corporation, has further expanded its R-Series of robust, high performance magnetostrictive position sensors with a new device which has the capacity to deliver reliability and industry-leading accuracy in even the most demanding work environments. Utilizing the company’s proprietary Temposonics technology, the RT4 is a linear position measurement solution that features two independent sensor elements - each of which has a measuring length of 50 mm to 2540 mm (2” to 100”). 

Targeted at use in lumber mills, steel processing plants and power generation sites, this fully redundant position sensing product employs a Synchronous Serial Interface (SSI), which means that data transfer is less susceptible to the presence of electro-magnetic interference. In addition, the IP68-rated enclosure protects against the threat of liquid ingress. The RT4’s detached electronics can be mounted up to 600 mm (23.6”) away from the sensing environment allowing the electronics to be kept further from sources of potential harm. A temperature range that reaches up to 100˚C (212˚F) is supported for the sensor rod and interconnection cables.

“Thanks to the combination of detached electronics and redundancy function, the RT4 sets itself apart from conventional position sensing hardware,” states Matt Hankinson, Technical Marketing Manager at MTS Sensors. ”This unit is optimized to function in extremely challenging application surroundings while maintaining high performance.”

Through MTS Sensor’s ground-breaking Temposonics magnetostrictive sensor technology, precise, non-contact position measurement data can be acquired. Temposonics-based devices can deal with the exacting mechanical stresses found in modern industrial settings without being subject to wear and tear.

April 20, 2015 - MTS Sensors, a division of MTS Systems Corporation, has introduced a high performance magnetostrictive position sensor, using its innovative Temposonics technology. The ET sensor is very well suited to deployment in applications with high temperature environments. It can deliver up to 0.005mm resolution when used in combination with a suitable controller.

Industrial facilities dedicated to pressboard production or the processing of steel/iron need instrumentation that provides maximum safety and reliability, regardless of difficult working conditions. The new ET product offering significantly extends the supported temperature range of the MTS E-Series, with the ability to precisely determine exact positions even at 105°C temperature levels. This small rod sensor can be integrated directly into a cylinder, with rod length options covering 50mm to 3000mm. It exhibits linearity deviation of less than 0.02 per cent (full scale).

ET sensors have liquid ingress protection in accordance with IP68. Furthermore, ATEX certification for hazardous areas is available. These devices are equipped with a start/stop interface. They also have the capacity for sensor parameters to be automatically uploaded. A 316L stainless steel variant can be specified if needed.

"The ET sensor is designed to be reliable and operationally effective in industry sectors where elevated temperatures are a major concern,” said Robert Luong, MTS Sensors’ industrial technical marketing manager. “The magnetostrictive technology it utilizes provides a wear-free sensing mechanism that has significant value in heavy industrial settings.”

The proprietary Temposonics magnetostrictive sensing technology developed by MTS Sensors is designed to offer a non-contact method for accurately measuring position, which permits its implementation into the most demanding of application environments. Sensors based on this technology are highly resilient to shock, vibrations and extreme temperatures.

April 2, 2015 - Norbord Inc. and Ainsworth Lumber Co. Ltd. announced the completion of their merger on April 1, 2015. 

March 24, 2015 - Globally traded hardwood chips for the manufacturing of pulp and wood-based panels have trended downward for much of the past three and a half years. However, this trend broke in late 2014 and early 2015 when prices slowly started to increase.

Feb. 27, 2015 – Lower OSB prices, a slower recovery of the U.S. housing market and higher overall unit costs contributed to weaker-than-expected fourth quarter and year end financial results for Ainsworth in 2014.

Sales of $102.5 million in the fourth quarter of 2014 were $1.9 million lower than sales of $104.4 million for the same period in 2013. The decrease in sales was mainly due to a 4% decrease in realized pricing. Sales volumes increased by 2% due to the ongoing ramp up of High Level notwithstanding downtime taken during the fourth quarter. The impact of the U.S. benchmark declines on realized pricing was moderated by factors including the effect of a weaker Canadian dollar relative to the fourth quarter of 2013 combined with stable export pricing in Japan.

Sales were $444.0 million in 2014 compared to $488.0 million in 2013. The $44.0 million decrease was primarily related to a 17% decrease in realized pricing, partially offset by a 9% increase in sales volumes. The impact of the U.S. benchmark declines on realized pricing was again moderated by factors including the effect of a weaker Canadian dollar relative to 2013 combined with stable export pricing in Japan. The increase in volume from High Level was partially offset by the downtime taken at the various mills to complete maintenance and other projects during the year.

Ainsworth President and Chief Executive Officer, Jim Lake said, "North American OSB market conditions continued to drift throughout the year as the pace of demand growth did not materialize as expected. However, we remain optimistic that U.S. housing starts will return to more historical levels within the next several years, with various indicators pointing towards strong growth in 2015 versus 2014.

"We maintained the strong performance we saw in 2013 in our key export market in Japan and also made progress in China as we began commercial shipments of our industrial core stock products. Additionally, we progressed in the ongoing ramp up of our High Level mill, including the completion of a number of strategic capital projects that will further position the mill to efficiently manufacture an enhanced range of products for North American and Asian customers."

While the pace of improvement in U.S. housing starts in 2014 was more gradual than anticipated, Ainsworth expects that the U.S. housing recovery will gain further traction in 2015. The company remains optimistic that U.S. housing starts will return to more historical levels within the next several years. The restart of the High Level mill will allow them to meet the growing requirements of its existing customer base in North America and Asia as well as service new market segments. Ainsworth expects the merger with Norbord will allow the combined company to capitalize on the ongoing recovery in the U.S. housing market and growth opportunities in our traditional and emerging markets in Asia.

Feb. 19, 2015 – River Bend Wood Products, a hardwood flooring business based in Nova Scotia’s Antigonish County, is shutting down due to a lack of locally-sourced hardwood.

According to an article from The Chronicle Herald, the struggles are not new in the region. River Bend may be the newest company to go out of business due to the hardwood shortage, but it certainly isn’t the first and is not likely to be the last. Groupe Savoie, which operates a hardwood sawmill in nearby Westville, could be next due to a lack of available logs.

It was expected that the hardwood consumed at the Nova Scotia Power biomass boiler would be low-value hardwood, leaving the higher value stems to companies like Groupe Savoie. However, to this point, that has yet to materialize.

For more on this story, CLICK HERE

Feb. 3, 2015 - How would you feel about saving $1.57/m³ on your delivered wood costs? How about having access to better-defined cutblock boundary lines, a fully optimized road network or dealing with reduced mill-yard inventory? Sounds good, right?

These appear to be just a few of the benefits related to the use of Enhanced Forest Inventory (EFI), yet not many companies seem interested in investing in EFI-allowing technologies such as aerial LiDAR. A formidable laser-based remote sensing technology, LiDAR measures distance by sending thousands of pulses of light with a laser from an aircraft and analyzing what reflects back (http://tinyurl.com/pe8ayfh).

Only a handful of cases of documented cost/benefit analyses actually exist to guide the decision-making process when choosing from all the available technologies designed to significantly improve inventory knowledge. Hence, EFI technologies still remain a marginal practice among forestry technology and service providers. Confident in its capacity to transform the forest sector, FPInnovations set out to find out what EFI is really about.

Partnering with Tembec and the Ontario Ministry of Natural Resources (OMNR) allowed researchers from FPInnovations’ Value Maximisation research program to evaluate the monetary impact of EFI on forest operations and primary wood products manufacturing. The results have turned out convincingly in favour of EFI: great return on investment, better knowledge of forest inventory, smaller road network, efficient harvesting operations and increased forest machine productivity. With smaller mill yard inventories of greater value, sawing cost can be reduced and lumber value increased, mostly due to the increased size of timber. The big question now is: why haven’t more companies picked up on the new generation of technologies designed to help them be more profitable?

Innovation in the field of forest inventory is no science-fiction. Today, there are very real cost-competitive technologies that allow accurate data gathering about forest stand attributes. Using these tools, foresters can truly maximize the value of forest products by lowering production costs and increasing the value of processed forest products. However, one obvious barrier in justifying the investment relates to the complexity of validating the benefits. Testing EFI processes and technologies involves getting access to data collected along the entire forest sector value chain. Since FPInnovations is all about value chain integration, researchers were able to gather the relevant information to compare the volumes as well as the wood net value resulting from two inventory data sets (traditional vs LiDAR-EFI).

Very promising advances
In addition to being costly, traditional forest inventories are difficult to update. In terms of stands, they produce a lack of volume precision in the area of 20 to 40 per cent, often making it necessary to obtain additional data in order to make informed decisions. There is a lack of data on variability of dendrometric characteristics within forest stands which limits harvest-planning decisions.

Accuracy of inventory data is very important since many decisions and actions are taken along the wood value chain based primarily on forestry inventory data. Inaccuracies result in costs for forest stakeholders at various levels and also mean that landowners run the risk of not maximizing benefits or value from resources (wood fibre, habitat, tourism, etc.).

Aerial LiDAR
One of the challenges met by the Enhanced Forest Inventory process is to provide foresters with precise and detailed information, both on a large and operational scale for each block to be processed. The arrival of aerial LiDAR (Light Detection and Ranging) has allowed foresters to meet this challenge head on. The quality of the information can now exceed expectations and an entire forest can now be inventoried at resolution as high as 400 m2. Furthermore, major steps have been taken toward posting the internal attributes of the wood’s fibre on forest maps using the EvaluTree program (a joint collaboration by FPInnovations and the University of Northern British Columbia).

Aerial LiDAR generates measurements in 3D space that provide a good description of the forest canopy and stand structure, which can be used to accurately predict tree crown dimensions, height, volume canopy density and biomass. Measurements made at the ground surface can be used to accurately map waterways (creeks, bogs, rivers, lakes) and topography across an entire forest (figure 1). While limited plot data are needed to calibrate LiDAR predictions, field sampling is no longer required for stand-, block-, and forest-level estimates. The wall-to-wall precision provided by LiDAR leads to better growth projections, product recovery models, taper models, biomass models, as well as silvicultural optimization and operational planning.

Maps created with LiDAR also provide valuable information for road construction by identifying optimized log extraction routes. Block contours are also better defined, impacting the precision of performance calculations (m³/stem/ha). Furthermore, a more detailed knowledge of forest structure makes silvicultural prescriptions easier. Combined with FPInterface software, LiDAR obtained cartographic and georeferenced data allow better prediction of operational costs for harvesting, transportation, road construction and silviculture.

Field testing EFI technology
By comparing two inventory data sets (traditional versus LiDAR-EFI), FPInnovations researchers were able to estimate costs and benefits of each method. To ensure the accuracy of LiDAR inventories, actual volumes harvested (scaled) were compared to yield estimates derived from the traditional inventory (OMNR provincial inventory) and to the LiDAR-enhanced inventory. The study focused on 14 cutblocks from Tembec’s 2009 forest management plan. Ultimately, in this study, the cost of $0.10/m³ for the LiDAR-EFI was largely offset by reduced wood costs. FPInnovations observed a net gain of $1.57/m³ when compared with the actual harvest as planned from traditional forest inventory.

Watch FPInnovations’ video on EFI: https://www.youtube.com/watch?v=-VmAy6rxt-U


For more information, please contact Francis Charette at 514-782-4608 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it . The FPInnovations report “Better planning with LiDAR-enhanced forest inventory” can be found here: http://tinyurl.com/p2yzcp7.

 

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