The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Business Wire

USG Corporation Reports 2012 Second Quarter Results

<p> <span class='bwuline'><b>Second Quarter 2012 vs. Second Quarter 2011</b></span> </p> <p> Consolidated Business Highlights </p> <ul> <li class='bwlistitemmargb'> <i>Sales increased 8 percent to $825 million</i> </li> <li class='bwlistitemmargb'> <i>Operating profit of $31 million compared to operating loss of $21 million</i> </li> <li class='bwlistitemmargb'> <i>Adjusted operating profit of $31 million compared to adjusted operating loss of $19 million</i> </li> </ul> <p> Business Unit Highlights </p> <ul> <li class='bwlistitemmargb'> <i>U.S. Gypsum wallboard shipments totaled 1.15 BSF vs. 0.99 BSF</i> </li> <li class='bwlistitemmargb'> <i>U.S. Gypsum average wallboard price of $132.09 per thousand square feet vs. $111.55</i> </li> <li class='bwlistitemmargb'> <i>Worldwide Ceilings operating profit was flat at $22 million</i> </li> <li class='bwlistitemmargb'> <i>L&W same store net sales increased 11 percent</i> </li> <li class='bwlistitemmargb'> <i>SHEETROCK</i><sup><i>®</i></sup><i> Brand UltraLight Panels accounted for 44 percent of all USG wallboard shipments in the United States</i> </li> </ul>

Wednesday, July 25, 2012

USG Corporation Reports 2012 Second Quarter Results08:30 EDT Wednesday, July 25, 2012 CHICAGO (Business Wire) -- USG Corporation (NYSE:USG), a leading building products company, today reported second quarter 2012 net sales of $825 million, up 8 percent from second quarter 2011 net sales of $761 million. USG's second quarter operating profit was $31 million compared to a $21 million operating loss in the second quarter of 2011. The second quarter 2012 net loss after-tax was $57 million, or $0.53 per share. This result compares to a $70 million net loss in the second quarter of 2011, or $0.69 per share. “We are pleased to build on the positive operating profit in the first quarter with another quarter of improved results,” said James S. Metcalf, Chairman, President and CEO. “In addition, our recent announcement of a joint venture that will enable us to sell SHEETROCK® Brand gypsum wallboard in India is a major step forward in our efforts to diversify USG's sources of earnings. We intend to move quickly with our partner, the Zawawi Group of Oman, to establish the mining and manufacturing operations in Oman with the goal of commencing the sale of rock to the regional cement industry and wallboard in the Indian market toward the end of next year.” The corporation's adjusted operating profit was $31 million in the second quarter of 2012, which compares to an adjusted operating loss of $19 million in the second quarter of 2011. A reconciliation of adjusted operating profit to operating profit is set forth on a schedule attached hereto. The net loss in the second quarter of 2012 includes $41 million in charges associated with the extinguishment of debt. Excluding those charges, the adjusted net loss in the second quarter of 2012 was $16 million, or $0.15 per share, based on the average common shares of 106,089,602. “Our businesses performed well in the second quarter despite weak demand compared to long-term averages,” Metcalf said. “We are seeing the signs of a recovery in our core markets, and will continue to focus on reducing costs and improving margins as we work towards positive net earnings.” 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 website, www.usg.com, in the Investor Relations section. The dial-in number for the conference call is 1-800-315-2944 (1-847-413-2929 for international callers), and the pass code is 32677225. After the live webcast, a replay of the webcast will be available on the USG website. In addition, a telephonic replay of the call will be available until Friday, August 3, 2012. The replay dial-in number is 1-888-843-7419 (1-630-652-3042 for international callers), and the pass code is 32677225. USG Corporation is a manufacturer and distributor of high-performance building systems through its United States Gypsum Company, USG Interiors, LLC, 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 branch locations efficiently stock and deliver building materials nationwide. For additional information, visit the USG website 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 for us and the industry; changes in laws or regulations, including environmental and safety regulations; the outcome in contested litigation matters; our ability to complete surplus asset sales and other divestitures; 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 STATEMENTS OF OPERATIONS(dollars in millions except per share data)(Unaudited)   Three MonthsSix Monthsended June 30,ended June 30,2012201120122011     Net sales $ 825 $ 761 $ 1,637 $ 1,482   Cost of products sold   716     708     1,418     1,393     Gross profit 109 53 219 89   Selling and administrative expenses 78 72 159 157   Restructuring and long-lived asset impairment charges   -     2     2     11     Operating profit (loss) 31 (21 ) 58 (79 )   Interest expense 52 52 104 104 Interest income (1 ) (2 ) (2 ) (4 ) Loss on extinguishment of debt 41 - 41 - Other income, net   (2 )   (2 )   (1 )   (2 )   Loss before income taxes (59 ) (69 ) (84 ) (177 )   Income tax (benefit) expense   (2 )   1     -     (2 )   Net loss $ (57 ) $ (70 ) $ (84 ) $ (175 )   Basic loss per common share $ (0.53 ) $ (0.69 ) $ (0.79 ) $ (1.70 ) Diluted loss per common share $ (0.53 ) $ (0.69 ) $ (0.79 ) $ (1.70 )   Average common shares 106,089,602 103,550,643 105,839,241 103,286,025 Average diluted common shares 106,089,602 103,550,643 105,839,241 103,286,025     USG CORPORATIONCONSOLIDATED BALANCE SHEETS(dollars in millions)(Unaudited)   As ofAs ofJune 30,December 31,20122011   Assets Current Assets: Cash and cash equivalents $ 405 $ 365 Short-term marketable securities 74 164 Restricted cash 18 1 Receivables (net of reserves - $18 and $18) 371 324 Inventories 307 305 Income taxes receivable 6 8 Deferred income taxes 3 4 Other current assets   44     55   Total current assets 1,228 1,226   Long-term marketable securities 54 122 Property, plant and equipment (net of accumulated depreciation and depletion - $1,706 and $1,637) 2,108 2,117 Deferred income taxes 24 25 Other assets   235     229     Total Assets $ 3,649   $ 3,719       Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 228 $ 233 Accrued expenses 252 266 Current portion of long-term debt 7 7 Deferred income taxes 12 12 Income taxes payable   5     7   Total current liabilities 504 525   Long-term debt 2,305 2,297 Deferred income taxes 6 6 Other liabilities 703 735 Commitments and contingencies   Stockholders' Equity: Preferred stock - - Common stock 11 10 Treasury stock - - Capital received in excess of par value 2,589 2,561 Accumulated other comprehensive loss (157 ) (174 ) Retained earnings (deficit)   (2,325 )   (2,241 ) Stockholders' equity of parent 118 156 Noncontrolling interest   13     -   Total stockholders' equity including noncontrolling interest   131     156     Total Liabilities and Stockholders' Equity $ 3,649   $ 3,719             Other Information: Total cash and cash equivalents and marketable securities $ 533 $ 651 Borrowing availability from lines of credit   212     183   Total Liquidity   $ 745     $ 834       USG CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(dollars in millions)(Unaudited)   Six Monthsended June 30,20122011   Operating Activities Net loss $ (84 ) $ (175 ) Adjustments to reconcile net loss to net cash: Depreciation, depletion and amortization 79 85 Loss on extinguishment of debt 41 - Long-lived asset impairment charges 1 1 Share-based compensation expense 13 16 Deferred income taxes 2 1 Noncash income tax benefit (4 ) (3 ) Gain on asset dispositions (7 ) (1 ) (Increase) decrease in working capital: Receivables (48 ) (54 ) Income taxes receivable 2 1 Inventories (2 ) (23 ) Prepaid expenses 3 (6 ) Payables (4 ) 19 Accrued expenses (4 ) (13 ) Decrease (increase) in other assets 1 (12 ) (Decrease) increase in other liabilities (4 ) 6 Other, net   (2 )   4   Net cash used for operating activities   (17 )   (154 )   Investing Activities Purchases of marketable securities (70 ) (221 ) Sales or maturities of marketable securities 227 176 Capital expenditures (28 ) (25 ) Acquisition of mining rights (16 ) - Net proceeds from asset dispositions 14 1 Investments in joint ventures (11 ) - Loan to joint venture (4 ) (4 ) (Deposit) return of restricted cash   (16 )   2   Net cash provided by (used for) investing activities   96     (71 )   Financing Activities Issuance of debt 248 - Repayment of debt (280 ) (3 ) Payment of debt issuance fees (5 ) - Issuance of common stock 1 - Repurchases of common stock to satisfy employee tax withholding obligations   (5 )   (3 ) Net cash used for financing activities   (41 )   (6 )   Effect of exchange rate change on cash 2 4   Net increase (decrease) in cash & cash equivalents 40 (227 ) Cash and cash equivalents at beginning of period   365     629   Cash and cash equivalents at end of period $ 405   $ 402     Supplemental Cash Flow Disclosures: Interest paid $ 105 $ 97 Income taxes paid, net 2 8 Amount in accounts payable for capital expenditures 2 2         USG CORPORATIONCORE BUSINESS RESULTS(dollars in millions)(Unaudited)   Three MonthsSix Monthsended June 30,ended June 30,2012201120122011Net Sales:   North American Gypsum: United States Gypsum Company $ 368 $ 322 $ 749 $ 640 CGC Inc. (gypsum) 83 76 167 152 USG Mexico, S.A. de C.V. 40 40 80 81 Other subsidiaries* 11 7 19 14 Eliminations   (29 )   (25 )   (56 )   (51 ) Total   473     420     959     836     Building Products Distribution: L&W Supply Corporation   293     270     563     513     Worldwide Ceilings: USG Interiors, Inc. 113 112 232 222 USG International 60 55 119 116 CGC Inc. (ceilings) 16 18 34 37 Eliminations   (12 )   (12 )   (25 )   (25 ) Total   177     173     360     350     Eliminations   (118 )   (102 )   (245 )   (217 ) Total USG Corporation $ 825   $ 761   $ 1,637   $ 1,482       Operating Profit (Loss):   North American Gypsum: United States Gypsum Company $ 26 $ (21 ) $ 55 $ (50 ) CGC Inc. (gypsum) 2 2 5 5 USG Mexico, S.A. de C.V. 4 5 9 10 Other subsidiaries*   (1 )   (2 )   (6 )   (10 ) Total   31     (16 )   63     (45 )   Building Products Distribution: L&W Supply Corporation   (7 )   (14 )   (13 )   (36 )   Worldwide Ceilings: USG Interiors, Inc. 17 15 40 33 USG International 2 3 5 7 CGC Inc. (ceilings)   3     4     6     8   Total   22     22     51     48     Corporate (17 ) (15 ) (39 ) (44 ) Eliminations   2     2     (4 )   (2 ) Total USG Corporation $ 31   $ (21 ) $ 58   $ (79 )   * Includes our shipping company and, for 2011, our mining operation in Nova Scotia, Canada.         USG CORPORATIONRECONCILIATION of ADJUSTED OPERATING PROFIT (LOSS) to REPORTED GAAP OPERATING PROFIT (LOSS)(dollars in millions)(Unaudited)   Three MonthsSix Monthsended June 30,ended June 30,2012201120122011   Adjusted Operating Profit (Loss): North American Gypsum $ 32 $ (14 ) $ 66 $ (36 ) Building Products Distribution (9 ) (14 ) (15 ) (35 ) Worldwide Ceilings 23 22 52 48 Corporate (17 ) (15 ) (39 ) (43 ) Eliminations   2     2     (4 )   (2 ) Total   31     (19 )   60     (68 )     Restructuring and Long-Lived Asset Impairment Charges: North American Gypsum 1 2 3 9 Building Products Distribution (2 ) - (2 ) 1 Worldwide Ceilings 1 - 1 - Corporate   -     -     -     1   Total   -     2     2     11       Reported GAAP Operating Profit (Loss): North American Gypsum 31 (16 ) 63 (45 ) Building Products Distribution (7 ) (14 ) (13 ) (36 ) Worldwide Ceilings 22 22 51 48 Corporate (17 ) (15 ) (39 ) (44 ) Eliminations   2     2     (4 )   (2 ) Total   31     (21 )   58     (79 )   References to Adjusted Operating Profit (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 SELLING PRICES AND SHIPMENTS       1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full Year Year Price   Volume Price   Volume Price   Volume Price   Volume Price   Volume 2012 $130.43 1.16 $132.09 1.15   2011 $109.15 0.99 $111.55 0.99 $111.66 1.05 $112.59 1.09 $111.27 4.11   Wallboard price reflects amount per one thousand square feet. Volume expressed in billions of square feet. USG CorporationMedia Inquiries: 312/436-4356Investor Relations: 312/436-6098