USG Corporation Reports 2012 First Quarter Results

First Quarter 2012 vs. First Quarter 2011

Consolidated Business Highlights

  • Sales increased 13 percent to $812 million
  • Operating profit of $27 million compared to operating loss of $58 million
  • Adjusted operating profit of $29 million compared to adjusted operating loss of $49 million

Business Unit Highlights

  • U.S. Gypsum wallboard shipments totaled 1.16 BSF vs. 992 MMSF
  • U.S. Gypsum average wallboard price of $130.43 per thousand square feet vs. $109.15
  • Worldwide Ceilings operating profit increased 12 percent to $29 million
  • L&W same store net sales increased 13 percent
  • SHEETROCK® Brand UltraLight Panels accounted for 41 percent of all USG wallboard shipments in the United States

CHICAGO--()--USG Corporation (NYSE:USG), a leading building products company, today reported first quarter 2012 net sales of $812 million, up 13 percent from first quarter 2011 net sales of $721 million. USG’s first quarter operating profit was $27 million compared to a $58 million operating loss in the first quarter of 2011. The first quarter 2012 net loss after-tax was $27 million or $0.26 per share. This result compares to a $105 million net loss in the first quarter of 2011 or $1.01 per share.

“Despite continuing low demand, our emphasis on achieving operating profit is succeeding, and continues to be a top priority,” said James S. Metcalf, Chairman, President and CEO. “Our focus on our customers, innovation and growing our adjacent businesses contributed to our first quarter results. All units showed improved results, supported by a modest increase in U.S. wallboard demand and solid performance across our product lines including ceilings, substrates and joint compounds. Of particular note is the market enthusiasm over our expanding line of SHEETROCK® Brand UltraLight Panels products, which now include both SHEETROCK® Brand UltraLight Panels FIRECODE® 30 and SHEETROCK® Brand UltraLight Panels FIRECODE® X, as well as our SHEETROCK® Brand UltraLightweight All Purpose Joint Compound.”

The corporation’s adjusted operating profit was $29 million in the first quarter of 2012, which compares to an adjusted operating loss of $49 million in the first quarter of 2011. The adjusted operating profit for the first quarter of 2012 excludes $2 million of restructuring and asset impairment charges. The adjusted operating loss for the first quarter of 2011 excludes $9 million of restructuring and asset impairment charges.

“Although demand in our core markets still remains near historical lows,” Metcalf said, “we are confident our strategy will continue to move us toward 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 32196653. 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, April 27, 2012. The replay dial-in number is 1-888-843-7419 (1-630-652-3042 for international callers), and the pass code is 32196653.

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 CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in millions except per share data)
(Unaudited)
 
Three Months
ended March 31,
2012 2011
 
 
Net sales $ 812 $ 721
 
Cost of products sold   702     685  
 
Gross profit 110 36
 
Selling and administrative expenses 81 85
 
Restructuring and long-lived asset
impairment charges   2     9  
 
Operating profit (loss) 27 (58 )
 
Interest expense 52 52
 
Interest income (1 ) (2 )
 
Other expense, net   1     -  
 
Loss before income taxes (25 ) (108 )
 
Income tax expense (benefit)   2     (3 )
 
Net loss $ (27 ) $ (105 )
 
 
Basic loss per common share $ (0.26 ) $ (1.01 )
Diluted loss per common share (0.26 ) (1.01 )
 
Average common shares 105,718,156 103,021,407
Average diluted common shares 105,718,156 103,021,407
 
Other Information:
Depreciation, depletion and amortization $ 40 $ 41
Capital expenditures 14 13
 
Average common shares and average diluted common shares outstanding are calculated in accordance with
Accounting Standards Codification 260, "Earnings Per Share."

   
USG CORPORATION
CORE BUSINESS RESULTS
(dollars in millions)
(Unaudited)
 
Three Months
ended March 31,
2012 2011

Net Sales:

 
North American Gypsum:
U.S. Gypsum Company $ 381 $ 318
CGC Inc. (gypsum) 84 76
USG Mexico S.A. de C.V. 40 41
Other * 8 7
Eliminations   (27 )   (26 )
Total   486     416  
 
Building Products Distribution:
L&W Supply Corporation   270     243  
 
Worldwide Ceilings:
USG Interiors, Inc. 119 110
USG International 59 61
CGC Inc. (ceilings) 18 19
Eliminations   (13 )   (13 )
Total   183     177  
 
Eliminations   (127 )   (115 )
Total net sales $ 812   $ 721  
 
 

Operating Profit (Loss):

 
North American Gypsum:
U.S. Gypsum Company $ 29 $ (29 )
CGC Inc. (gypsum) 3 3
USG Mexico S.A. de C.V. 5 5
Other *   (5 )   (8 )
Total   32     (29 )
 
Building Products Distribution:
L&W Supply Corporation   (6 )   (22 )
 
Worldwide Ceilings:
USG Interiors, Inc. 23 18
USG International 3 4
CGC Inc. (ceilings)   3     4  
Total   29     26  
 
Corporate (22 ) (29 )
Eliminations   (6 )   (4 )
Total operating loss $ 27   $ (58 )
 
* Includes a shipping company in Bermuda and a mining operation in Nova Scotia, Canada, that was
closed in the fourth quarter of 2011.

   
USG CORPORATION
CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(Unaudited)
 
As of As of
March 31, December 31,
2012 2011
 
Assets
Current Assets:
Cash and cash equivalents $ 470 $ 365
Short-term marketable securities 73 164
Restricted cash 1 1
Receivables (net of reserves - $18 and $18) 396 324
Inventories 313 305
Income taxes receivable 9 8
Deferred income taxes 4 4
Other current assets   37     55  
Total current assets 1,303 1,226
 
Long-term marketable securities 65 122
Property, plant and equipment (net of accumulated
depreciation and depletion - $1,684 and $1,637) 2,107 2,117
Deferred income taxes 25 25
Other assets   233     229  
 
Total Assets $ 3,733   $ 3,719  
 
 
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 249 $ 233
Accrued expenses 261 266
Current portion of long-term debt 7 7
Deferred income taxes 12 12
Income taxes payable   4     7  
Total current liabilities 533 525
 
Long-term debt 2,296 2,297
Deferred income taxes 6 6
Other liabilities 744 735
Commitments and contingencies
 
Stockholders' Equity:
Preferred stock - -
Common stock 10 10
Treasury stock - -
Capital received in excess of par value 2,568 2,561
Accumulated other comprehensive loss (156 ) (174 )
Retained earnings (deficit)   (2,268 )   (2,241 )
Total stockholders' equity   154     156  
 
Total Liabilities and Stockholders' Equity $ 3,733   $ 3,719  
         
Other Information:
Total cash and cash equivalents and marketable securities 608 651
Borrowing availability from lines of credit   219     183  
Total Liquidity   $ 827     $ 834  

   
USG CORPORATION
RECONCILIATION of ADJUSTED OPERATING LOSS to REPORTED GAAP OPERATING LOSS
(dollars in millions)
(Unaudited)
 
Three Months
ended March 31
2012 2011
 
Adjusted Operating Profit (Loss):
North American Gypsum $ 34 $ (22 )
Building Products Distribution (6 ) (21 )
Worldwide Ceilings 29 26
Corporate (22 ) (28 )
Eliminations   (6 )   (4 )
Total   29     (49 )
 
 
Restructuring and Long-Lived
Asset Impairment Charges:
North American Gypsum 2 7
Building Products Distribution - 1
Worldwide Ceilings - -
Corporate   -     1  
Total   2     9  
 
 
Reported GAAP Operating Profit (Loss):
North American Gypsum 32 (29 )
Building Products Distribution (6 ) (22 )
Worldwide Ceilings 29 26
Corporate (22 ) (29 )
Eliminations   (6 )   (4 )
Total   27     (58 )
 
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 COMPANY
WALLBOARD REALIZED PRICE & SHIPMENTS
     
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Full Year
Year Price   Volume Price   Volume Price   Volume Price   Volume Price   Volume
2012 $130.43 1.16
 
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.

Contacts

USG Corporation
Media Inquiries: 312/436-4356
Investor Relations: 312/436-6098

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Contacts

USG Corporation
Media Inquiries: 312/436-4356
Investor Relations: 312/436-6098