USG Corporation Reports 2012 Fourth Quarter and Full Year Results

USG Corporation Reports 2012 Fourth Quarter and Full Year Results

Fourth Quarter 2012 vs. Fourth Quarter 2011

Consolidated Business Highlights (continuing operations)

  • Sales increased 12 percent to $815 million

  • Operating loss of $8 million compared to operating loss of $43 million

  • Adjusted operating profit of $5 million compared to adjusted operating loss of $38 million


Business Unit Highlights (continuing operations)

  • U.S. Gypsum wallboard shipments totaled 1.22 BSF vs. 1.09 BSF

  • U.S. Gypsum average wallboard price of $132.26 per thousand square feet vs. $112.59

  • Worldwide Ceilings operating profit decreased 18 percent to $14 million

  • L&W Supply same store net sales increased 13 percent

  • SHEETROCK®Brand UltraLight Panels accounted for 49 percent of all USG wallboard shipments in the United States

CHICAGO--(BUSINESS WIRE)-- USG Corporation (NYS: USG) , a leading building products company, today reported fourth quarter 2012 net sales from continuing operations of $815 million, up 12 percent from fourth quarter 2011 net sales from continuing operations of $726 million. USG's fourth quarter operating loss from continuing operations was $8 million compared to a $43 million operating loss from continuing operations in the fourth quarter of 2011. The fourth quarter 2012 net loss was $13 million, or $0.11 per share. This result compares to a $100 million net loss in the fourth quarter of 2011, or $0.95 per share.

"Our wallboard results were the strongest we have seen in over three years, and we achieved our fourth consecutive quarter of positive adjusted operating profit," said James S. Metcalf, Chairman, President and CEO. "The results for Worldwide Ceilings and L&W Supply show the commercial markets remain choppy, but we continue to see signs of a housing recovery."

The corporation's adjusted operating profit from continuing operations was $5 million in the fourth quarter of 2012, which compares to an adjusted operating loss from continuing operations of $38 million in the fourth quarter of 2011. A reconciliation of adjusted operating profit to operating profit is set forth on a schedule attached hereto. The operating profit from continuing operations in the fourth quarter of 2012 includes $13 million in restructuring and long-lived asset impairment charges.

The Corporation recorded full year 2012 net sales from continuing operations of $3.2 billion, an operating profit from continuing operations of $73 million and a net loss of $126 million. For the full year 2011, net sales from continuing operations were $2.9 billion, the operating loss from continuing operations was $206 million and net loss was $390 million.

During the third quarter, the Corporation announced it had entered into a definitive agreement to sell its European operations. This transaction was completed on December 27, 2012, resulting in a gain on sale of $55 million. Results from European operations have been reported as discontinued operations for all periods presented. Those operations reported net sales of $106 million and operating profit of $7 million for 2012, and $114 million and $9 million, respectively, for 2011.

"While I am pleased with the progress on Our Plan to Win in 2012, there is more work to be done," Metcalf said. "Our focus remains on achieving positive net earnings, and I look forward to continued growth in 2013."

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 34052563. 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, February 15, 2013. The replay dial-in number is 1-888-843-7419 (1-630-652-3042 for international callers), and the pass code is 34052563.

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 commercial, residential, and repair and remodel construction markets. 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 materially from management's expectations and, accordingly, may affect our sales and profitability or other results and liquidity. Actual results may differ materially 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 and energy costs; volatility in the assumptions used to determine the funded status of our pension plans; 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; our ability to expand into new geographic markets and the stability of such markets; changes in laws or regulations, including environmental and safety regulations; the satisfactory performance of certain business functions by third party service providers; our ability to achieve anticipated savings from cost reduction programs; 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 CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in millions except per share data)

(Unaudited)

Three months

Twelve months

ended December 31,

ended December 31,

2012

2011(1)

2012

2011(1)

Net sales

$

815

$

726

$

3,224

$

2,910

Cost of products sold

730

688

2,829

2,752

Gross profit

85

38

395

158

Selling and administrative expenses

80

76

304

289

Restructuring and long-lived asset

impairment charges

13

5

18

75

Operating profit (loss)

(8

)

(43

)

73

(206

)

Interest expense

52

53

206

211

Interest income

(1

)

(1

)

(4

)

(6

)

Loss on extinguishment of debt

-

-

41

-

Other (income) expense, net

2

-

-

(1

)

Loss from continuing operations before income taxes

(61

)

(95

)

(170

)

(410

)

Income tax expense (benefit)

3

5

12

(14

)

Loss from continuing operations

(64

)

(100

)

(182

)

(396

)

Income (loss) from discontinued operations, net of tax

(3

)

-

2

6

Gain on sale of discontinued operations, net of tax

55

-

55

-

Net loss

$

(12

)

$

(100

)

$

(125

)

$

(390

)

Less: Net income attributable to noncontrolling interest

1

-

1

-

Net loss attributable to USG

$

(13

)

$

(100

)

$

(126

)

$

(390

)

Earnings per common share - basic:

Loss from continuing operations

$

(0.59

)

$

(0.95

)

$

(1.72

)

$

(3.81

)

Income from discontinued operations (2)

0.48

-

0.53

0.05

Net loss attributable to USG

$

(0.11

)

$

(0.95

)

$

(1.19

)

$

(3.76

)

Earnings per common share - diluted:

Loss from continuing operations

$

(0.59

)

$

(0.95

)

$

(1.72

)

$

(3.81

)

Income from discontinued operations (2)

0.48

-

0.53

0.05

Net loss attributable to USG

$

(0.11

)

$

(0.95

)

$

(1.19

)

$

(3.76

)

Average common shares

107,791,758

105,361,746

106,382,934

103,902,038

Average diluted common shares

107,791,758

105,361,746

106,382,934

103,902,038

(1) Prior-period amounts have been adjusted to reflect our European businesses as discontinued operations. These businesses were sold on December 27, 2012.

(2) Includes gain on sale of discontinued operations, net of tax

USG CORPORATION

CONSOLIDATED BALANCE SHEETS

(dollars in millions)

(Unaudited)

As of

As of

December 31,

December 31,

2012

2011 (1)

Assets

Current Assets:

Cash and cash equivalents

$

546

$

365

Short-term marketable securities

106

164

Restricted cash

1

1

Receivables (net of reserves - $16 and $17)

326

316

Inventories

304

292

Income taxes receivable

2

8

Deferred income taxes

2

4

Other current assets

40

54

Assets related to discontinued operations

-

35

Total current assets

1,327

1,239

Long-term marketable securities

25

122

Property, plant and equipment (net of accumulated

depreciation and depletion - $1,738 and $1,602)

2,100

2,104

Deferred income taxes

38

25

Other assets

233

229

Total Assets

$

3,723

$

3,719

Liabilities and Stockholders' Equity

Current Liabilities:

Accounts payable

$

286

$

226

Accrued expenses

237

258

Current portion of long-term debt

4

7

Deferred income taxes

22

12

Income taxes payable

2

6

Liabilities related to discontinued operations

-

15

Total current liabilities

551

524

Long-term debt

2,005

1,997

Long-term debt - related party

300

300

Deferred income taxes

5

7

Pension and other postretirement benefits

573

521

Other liabilities

270

214

Total liabilities

3,704

3,563

Stockholders' Equity:

Preferred stock

-

-

Common stock

11

10

Treasury stock

-

-

Additional paid-in capital

2,595

2,561

Accumulated other comprehensive loss

(233

)

(174

)

Retained earnings (accumulated deficit)

(2,367

)

(2,241

)

Stockholders' equity of parent

6

156

Noncontrolling interest

13

-

Total stockholders' equity including noncontrolling interest

19

156

Total Liabilities and Stockholders' Equity

$

3,723

$

3,719

Other Information:

Total cash and cash equivalents and marketable securities

$

677

$