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Press release from Business Wire

USG Corporation Reports 2011 First Quarter Results

Wednesday, April 20, 2011

USG Corporation Reports 2011 First Quarter Results08:30 EDT Wednesday, April 20, 2011 CHICAGO (Business Wire) -- USG Corporation (NYSE:USG): First Quarter 2011 vs. First Quarter 2010 Consolidated Business Highlights Sales increased 1%Operating loss of $58 million compared to $82 millionAdjusted operating loss of $49 million compared to $70 million Business Unit Highlights U.S. Gypsum wallboard shipments totaled 992 MMSF vs. 1.15 BSFU.S. Gypsum average wallboard price of $109.15 per thousand square feet vs. $106.58Worldwide Ceilings operating profit increased $8 millionL&W same-store net sales decreased 1% USG Corporation (NYSE:USG), a leading building products company, today reported first quarter 2011 net sales of $721 million, an operating loss of $58 million and a net loss of $105 million, or $1.01 per diluted share based on 103 million average diluted shares outstanding. In last year's first quarter, the operating loss was $82 million and the net loss was $110 million, or $1.10 per diluted share based on 99.4 million average diluted shares. “As expected, we experienced generally weak demand in our domestic markets during the quarter,” said James Metcalf, President and CEO. “Accordingly, we continue to focus on our operating initiatives to drive improvements in our results. “We are seeing signs of stabilization in U.S. commercial construction and positive trends in the repair and remodel segment, but the new residential construction market remains weak,” Metcalf continued. “The long term fundamentals that drive our business remain very solid. As demand improves we will benefit from the operating leverage inherent in both our manufacturing and distribution businesses.” The corporation's adjusted operating loss was $49 million in the first quarter of 2011, which compares to an adjusted operating loss of $70 million in the first quarter of 2010. The adjusted operating loss for the first quarter of 2011 excludes $9 million of restructuring and long-lived asset impairment charges, while the adjusted operating loss for the first quarter of 2010 excludes $12 million of restructuring and long-lived asset impairment charges. A conference call is being held today at 10:00 A.M. Central Time during which USG senior management will discuss the corporation's operating results. The conference call will be webcast on the USG Web site, www.usg.com, in the Investor Relations section. The dial-in number for the conference call is 1-866-352-2116 for participants in the United States (1-630-691-2782 for callers from other countries), and the pass code is 29486764. After the live webcast, a replay of the webcast will be available on the USG Web site. In addition, a telephonic replay of the call will be available until Friday, April 29, 2011. The replay dial-in number is 1-888-843-7419 (1-630-652-3042 for international callers), and the pass code is 29486764. USG Corporation is a manufacturer and distributor of high-performance building systems through its United States Gypsum Company, USG Interiors, Inc., L&W Supply Corporation and other subsidiaries. Headquartered in Chicago, USG's worldwide operations serve the residential and non-residential construction markets, repair and remodel construction markets, and industrial processes. USG's wall, ceiling, flooring and roofing products provide leading-edge building solutions for customers, while L&W Supply center locations efficiently stock and deliver building materials nationwide. For additional information, visit the USG Web site at www.usg.com. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 related to management's expectations about future conditions. Actual business, market or other conditions may differ from management's expectations and, accordingly, may affect our sales and profitability or other results and liquidity. Actual results may differ due to various other factors, including: economic conditions, such as the levels of new home and other construction activity, employment levels, the availability of mortgage, construction and other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates and consumer confidence; capital markets conditions and the availability of borrowings under our credit agreement or other financings; competitive conditions, such as price, service and product competition; shortages in raw materials; changes in raw material, energy, transportation and employee benefit costs; the loss of one or more major customers and our customers' ability to meet their financial obligations to us; capacity utilization rates; changes in laws or regulations, including environmental and safety regulations; the outcome in contested litigation matters; the effects of acts of terrorism or war upon domestic and international economies and financial markets; and acts of God. We assume no obligation to update any forward-looking information contained in this press release.     USG CORPORATIONCONSOLIDATED STATEMENT OF OPERATIONS(dollars in millions except per share data)(Unaudited)   Three Monthsended March 31,20112010     Net sales $ 721 $ 716   Cost of products sold   685     702     Gross profit 36 14   Selling and administrative expenses 85 84   Restructuring and long-lived asset impairment charges   9     12     Operating loss (58 ) (82 )   Interest expense 52 45   Interest income (2 ) (1 )   Other (income) expense, net   -     1     Loss before income taxes (108 ) (127 )   Income tax benefit   (3 )   (17 )   Net loss $ (105 ) $ (110 )     Basic loss per common share $ (1.01 ) $ (1.10 ) Diluted loss per common share (1.01 ) (1.10 )   Average common shares 103,021,407 99,385,442 Average diluted common shares 103,021,407 99,385,442   Other Information: Depreciation, depletion and amortization $ 41 $ 45 Capital expenditures 13 6   Average common shares and average diluted common shares outstanding are calculated in accordance with Accounting Standards Codification 260, "Earnings Per Share."     USG CORPORATIONCORE BUSINESS RESULTS(dollars in millions)(Unaudited)   Three Monthsended March 31,20112010Net Sales:   North American Gypsum: U.S. Gypsum Company $ 318 $ 332 CGC Inc. (gypsum) 76 76 USG Mexico S.A. de C.V. 41 36 Other * 7 6 Eliminations   (26 )   (26 ) Total   416     424     Building Products Distribution: L&W Supply Corporation   243     248     Worldwide Ceilings: USG Interiors, Inc. 110 103 USG International 61 57 CGC Inc. (ceilings) 19 17 Eliminations   (13 )   (12 ) Total   177     165     Eliminations   (115 )   (121 ) Total net sales $ 721   $ 716       Operating Profit (Loss):   North American Gypsum: U.S. Gypsum Company $ (29 ) $ (37 ) CGC Inc. (gypsum) 3 7 USG Mexico S.A. de C.V. 5 3 Other *   (8 )   (8 ) Total   (29 )   (35 )   Building Products Distribution: L&W Supply Corporation   (22 )   (39 )   Worldwide Ceilings: USG Interiors, Inc. 18 12 USG International 4 3 CGC Inc. (ceilings)   4     3   Total   26     18     Corporate (29 ) (23 ) Eliminations   (4 )   (3 ) Total operating loss $ (58 ) $ (82 )   *Includes a shipping company in Bermuda and a mining operation in Nova Scotia, Canada.     USG CORPORATIONCONSOLIDATED BALANCE SHEETS(dollars in millions)(Unaudited)   As ofAs ofMarch 31,December 31,20112010   Assets Current Assets: Cash and cash equivalents $ 464 $ 629 Short-term marketable securities 145 128 Restricted cash 4 4 Receivables (net of reserves - $18 and $17) 396 327 Inventories 306 290 Income taxes receivable 3 3 Deferred income taxes 6 6 Other current assets   46     50   Total current assets 1,370 1,437   Long-term marketable securities 160 150 Property, plant and equipment (net of accumulated depreciation and depletion - $1,581 and $1,546) 2,243 2,266 Other assets   239     234     Total Assets $ 4,012   $ 4,087       Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 240 $ 218 Accrued expenses 284 294 Current portion of long-term debt 7 7 Income taxes payable   7     10   Total current liabilities 538 529   Long-term debt 2,300 2,301 Deferred income taxes 6 7 Other liabilities 624 631 Commitments and contingencies   Stockholders' Equity: Preferred stock - - Common stock 10 10 Treasury stock (39 ) (55 ) Capital received in excess of par value 2,562 2,565 Accumulated other comprehensive loss (33 ) (50 ) Retained earnings (deficit)   (1,956 )   (1,851 ) Total stockholders' equity   544     619     Total Liabilities and Stockholders' Equity $ 4,012   $ 4,087             Other Information: Total cash and cash equivalents and marketable securities $ 769 $ 907 Borrowing availability from lines of credit   189     156   Total Liquidity   $ 958     $ 1,063       USG CORPORATIONRECONCILIATION of ADJUSTED OPERATING LOSS to REPORTED GAAP OPERATING LOSS(dollars in millions)(Unaudited)   Three Monthsended March 3120112010   Adjusted Operating Profit (Loss): North American Gypsum $ (22 ) $ (31 ) Building Products Distribution (21 ) (31 ) Worldwide Ceilings 26 18 Corporate (28 ) (23 ) Eliminations   (4 )   (3 ) Total   (49 )   (70 )     Restructuring and Long-LivedAsset Impairment Charges: North American Gypsum 7 4 Building Products Distribution 1 8 Worldwide Ceilings - - Corporate   1     -   Total   9     12       Reported GAAP Operating Profit (Loss): North American Gypsum (29 ) (35 ) Building Products Distribution (22 ) (39 ) Worldwide Ceilings 26 18 Corporate (29 ) (23 ) Eliminations   (4 )   (3 ) Total   (58 )   (82 )   References to Adjusted Operating Loss are non-GAAP measures. Management believes this information provides investors with a more useful comparison of the corporation's ongoing business performance.                       UNITED STATES GYPSUM COMPANYWALLBOARD REALIZED PRICE & SHIPMENTS   Quarter 1 Quarter 2 Quarter 3 Quarter 4 Full Year Year Price   Volume Price   Volume Price   Volume Price   Volume Price   Volume 2011 $109.15 0.99   2010 $106.58 1.15 $114.17 1.07 $114.45 1.03 $111.95 0.95 $111.66 4.20   Wallboard price reflects amount per one thousand square feet. Volume expressed in billions of square feet. USG CorporationMedia Inquiries: 312/436-4356Investor Relations: 312/436-4110