USG Corporation Reports 2013 Second Quarter Results

USG Corporation Reports 2013 Second Quarter Results

Second Quarter 2013 vs. Second Quarter 2012

Consolidated Business Highlights

  • Sales increased 15 percent to $916 million

  • Operating profit of $74 million compared to $28 million

  • Net income of $25 million compared to net loss of $57 million


Business Unit Highlights

  • U.S. Gypsum wallboard shipments totaled 1.29 BSF vs. 1.15 BSF

  • U.S. Gypsum average wallboard price of $153.77 per thousand square feet vs. $132.09

  • Worldwide Ceilings operating profit increased 37 percent to $26 million

  • L&W operating profit of $1 million compared to operating loss of $7 million

  • SHEETROCK®Brand UltraLight Panels accounted for 50 percent of all USG wallboard shipments in the United States

CHICAGO--(BUSINESS WIRE)-- USG Corporation (NYS: USG) , a leading building products company, today reported second quarter 2013 net sales of $916 million, up 15 percent from second quarter 2012 net sales of $798 million. USG's second quarter 2013 operating profit was $74 million compared to a $28 million operating profit in the second quarter of 2012. Second quarter 2013 net income was $25 million or $0.22 per diluted share. This result compares to a $57 million net loss in the second quarter of 2012 or ($0.53) per diluted share.

"We are pleased to generate net income for the second consecutive quarter," said James S. Metcalf, Chairman, President and CEO. "Results in all major business units have improved from one year ago, including L&W Supply, which achieved an operating profit for the first time since 2008."

The corporation's adjusted net income was $26 million in the second quarter of 2013, which compares to an adjusted net loss of $18 million in the second quarter of 2012. The adjusted net income for the second quarter of 2013 excludes $1 million in restructuring charges. The adjusted net income for the second quarter of 2012 excluded $2 million in income from discontinued operations and $41 million in loss on the extinguishment of debt.

"We will continue to lower our break-even, improve our margins, and find growth opportunities as we build upon the recovery," Metcalf said. "The positive trend in our results demonstrates that our Plan to Win is working."

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 35125479. 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 2, 2013. The replay dial-in number is 1-888-843-7419 (1-630-652-3042 for international callers), and the pass code is 35125479.

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. Additional information concerning these and other factors may be found in our filings with the Securities and Exchange Commission, including the "Risk Factors" in our most recent Annual Report on Form 10-K.

USG CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in millions except per share data)

(Unaudited)

Three months

Six months

ended June 30,

ended June 30,

2013

2012(1)

2013

2012(1)

Net sales

$

916

$

798

$

1,730

$

1,581

Cost of products sold

765

696

1,455

1,377

Gross profit

151

102

275

204

Selling and administrative expenses

76

74

149

150

Restructuring and long-lived asset impairment charges

1

-

3

2

Operating profit

74

28

123

52

Interest expense

50

52

100

104

Interest income

(1

)

(1

)

(2

)

(2

)

Loss on extinguishment of debt

-

41

-

41

Other income, net

(2

)

(2

)

(1

)

(1

)

Income (loss) from continuing operations before income taxes

27

(62

)

26

(90

)

Income tax expense (benefit)

2

(3

)

(1

)

(2

)

Income (loss) from continuing operations

25

(59

)

27

(88

)

Income from discontinued operations, net of tax

-

2

-

4

Net income (loss)

$

25

$

(57

)

$

27

$

(84

)

Earnings per common share - basic:

Income (loss) from continuing operations

$

0.23

$

(0.55

)

$

0.25

$

(0.83

)

Income from discontinued operations

-

0.02

-

0.04

Net income (loss)

$

0.23

$

(0.53

)

$

0.25

$

(0.79

)

Earnings per common share - diluted:

Income (loss) from continuing operations

$

0.22

$

(0.55

)

$

0.24

$

(0.83

)

Income from discontinued operations

-

0.02

-

0.04

Net income (loss)

$

0.22

$

(0.53

)

$

0.24

$

(0.79

)

Average common shares

108,544,752

106,089,602

108,449,431

105,839,241

Average diluted common shares

111,047,951

106,089,602

111,245,400

105,839,241

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

USG CORPORATION

CONSOLIDATED BALANCE SHEETS

(dollars in millions)

(Unaudited)

As of

As of

June 30,

December 31,

2013

2012

Assets

Current Assets:

Cash and cash equivalents

$

416

$

546

Short-term marketable securities

113

106

Restricted cash

1

1

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

396

326

Inventories

323

304

Income taxes receivable

2

2

Deferred income taxes

2

2

Other current assets

48

40

Total current assets

1,301

1,327

Long-term marketable securities

25

25

Property, plant and equipment (net of accumulated

depreciation and depletion - $1,793 and $1,738)

2,094

2,100

Deferred income taxes

40

38

Other assets

227

233

Total Assets

$

3,687

$

3,723

Liabilities and Stockholders' Equity

Current Liabilities:

Accounts payable

$

256

$

286

Accrued expenses

206

237

Current portion of long-term debt

4

4

Deferred income taxes

22

22

Income taxes payable

2

2

Total current liabilities

490

551

Long-term debt

2,018

2,016

Long-term debt - related party

290

289

Deferred income taxes

5

5

Pension and other postretirement benefits

575

573

Other liabilities

269

270

Total liabilities

3,647

3,704

Stockholders' Equity:

Preferred stock

-

-

Common stock

11

11

Treasury stock

(1

)

-

Additional paid-in capital

2,599

2,595

Accumulated other comprehensive loss

(255

)

(233

)

Retained earnings (accumulated deficit)

(2,340

)

(2,367

)

Stockholders' equity of parent

14

6

Noncontrolling interest

26

13

Total stockholders' equity including noncontrolling interest

40

19

Total Liabilities and Stockholders' Equity

$

3,687

$

3,723

Other Information:

Total cash and cash equivalents and marketable securities

$

554

$

677

Borrowing availability under existing credit facilities

292

197

Total Liquidity

$

846

$

874

USG CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in millions)

(Unaudited)

Six months

ended June 30,

2013

2012 (1)

Operating Activities

Net income (loss)

$

27

$

(84

)

Less: Income from discontinued operations, net of tax

-

4

Income (loss) from continuing operations

27

(88

)

Adjustments to reconcile income (loss) from continuing operations to net cash:

Depreciation, depletion and amortization

77

78

Loss on extinguishment of debt

-

41

Long-lived asset impairment charges

-

1