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 CORPORATION | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (dollars in millions except per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months | Six Months | |||||||||||||||
| ended June 30, | ended June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| 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 CORPORATION | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (dollars in millions) | ||||||||
| (Unaudited) | ||||||||
| As of | As of | |||||||
| June 30, | December 31, | |||||||
| 2012 | 2011 | |||||||
| 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 CORPORATION | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (dollars in millions) | ||||||||
| (Unaudited) | ||||||||
| Six Months | ||||||||
| ended June 30, | ||||||||
| 2012 | 2011 | |||||||
| 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 CORPORATION | ||||||||||||||||
| CORE BUSINESS RESULTS | ||||||||||||||||
| (dollars in millions) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months | Six Months | |||||||||||||||
| ended June 30, | ended June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
|
Net 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 CORPORATION | ||||||||||||||||
| RECONCILIATION of ADJUSTED OPERATING PROFIT (LOSS) to REPORTED GAAP OPERATING PROFIT (LOSS) | ||||||||||||||||
| (dollars in millions) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months | Six Months | |||||||||||||||
| ended June 30, | ended June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| 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 COMPANY | |||||||||||||||||||||
| WALLBOARD 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. | |||||||||||||||||||||