USG Corporation Reports 2013 Second Quarter Results

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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 monthsSix 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 profit151102275204
 
Selling and administrative expenses7674149150
 
Restructuring and long-lived asset impairment charges 1  -  3  2 
 
Operating profit742812352
 
Interest expense5052100104
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 taxes27(62)26(90)
 
Income tax expense (benefit) 2  (3) (1) (2)
 
Income (loss) from continuing operations25(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 shares108,544,752106,089,602108,449,431105,839,241
Average diluted common shares111,047,951106,089,602111,245,400105,839,241
 
(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 ofAs of
June 30,December 31,
20132012
Assets
Current Assets:
Cash and cash equivalents$416$546
Short-term marketable securities113106
Restricted cash11
Receivables (net of reserves - $16 and $16)396326
Inventories323304
Income taxes receivable22
Deferred income taxes22
Other current assets 48  40 
Total current assets1,3011,327
 
Long-term marketable securities2525
Property, plant and equipment (net of accumulated
depreciation and depletion - $1,793 and $1,738)2,0942,100
Deferred income taxes4038
Other assets 227  233 
 
Total Assets$3,687 $3,723 
 
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable$256$286
Accrued expenses206237
Current portion of long-term debt44
Deferred income taxes2222
Income taxes payable 2  2 
Total current liabilities490551
 
Long-term debt2,0182,016
Long-term debt - related party290289
Deferred income taxes55
Pension and other postretirement benefits575573
Other liabilities 269  270 
Total liabilities 3,647  3,704 
 
Stockholders' Equity:
Preferred stock--
Common stock1111
Treasury stock(1)-
Additional paid-in capital2,5992,595
Accumulated other comprehensive loss(255)(233)
Retained earnings (accumulated deficit) (2,340) (2,367)
Stockholders' equity of parent146
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 

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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 operations27(88)
 
Adjustments to reconcile income (loss) from continuing operations to net cash:
Depreciation, depletion and amortization7778
Loss on extinguishment of debt-41
Long-lived asset impairment charges-1