USG Corporation Reports 2013 First Quarter Results First Quarter 2013 vs. First Quarter 2012 Consolidated Business Highlights *Sales increased 4 percent to $814 million *Operating profit of $49 million compared to $24 million *Net income of $2 million compared to net loss of $27 million Business Unit Highlights *U.S. Gypsum wallboard shipments totaled 1.11 BSF vs. 1.16 BSF *U.S. Gypsum average wallboard price of $153.07 per thousand square feet vs. $130.43 *Worldwide Ceilings operating profit increased 4 percent to $27 million *L&W same store net sales increased 9 percent *SHEETROCK^® Brand UltraLight Panels accounted for 51 percent of all USG wallboard shipments in the United States Business Wire CHICAGO -- April 24, 2013 USG Corporation (NYSE:USG), a leading building products company, today reported first quarter 2013 net sales of $814 million, up 4 percent from first quarter 2012 net sales of $783 million. USG’s first quarter 2013 operating profit was $49 million compared to a $24 million operating profit in the first quarter of 2012. First quarter 2013 net income was $2 million or $0.02 per diluted share. This result compares to a $27 million net loss in the first quarter of 2012 or $0.26 per diluted share. “We are pleased to report our first quarter of net income in more than five years,” said James S. Metcalf, Chairman, President and CEO. “All segments showed improved results in the period, and our commitment to innovation and lowering our break-even are evident in our results.” The corporation’s adjusted net income was $1 million in the first quarter of 2013, which compares to an adjusted net loss of $27 million in the first quarter of 2012. The adjusted net income for the first quarter of 2013 excludes $2 million of restructuring charges and a $3 million benefit from a change in tax law. The adjusted net income for the first quarter of 2012 excludes $2 million of restructuring charges and $2 million of income from discontinued operations. “Achieving positive net income in the first quarter is an important milestone as we emerge from the most significant downturn in our company’s history, but there is more work to be done,” Metcalf said. “We will continue to execute Our Plan to Win as the recovery continues in our core markets.” 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 34513612. 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, May 3, 2013. The replay dial-in number is 1-888-843-7419 (1-630-652-3042 for international callers), and the pass code is 34513612. 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 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 ended March 31, 2013 2012 ^(1) Net sales $ 814 $ 783 Cost of products sold 690 681 Gross profit 124 102 Selling and 73 76 administrative expenses Restructuring charges 2 2 Operating profit 49 24 Interest expense 50 52 Interest income (1 ) (1 ) Other expense, net 1 1 Loss from continuing operations before (1 ) (28 ) income taxes Income tax (benefit) (3 ) 1 expense Income (loss) from 2 (29 ) continuing operations Income from discontinued - 2 operations, net of tax Net income (loss) $ 2 $ (27 ) Earnings per common share - basic: Income (loss) from $ 0.02 $ (0.28 ) continuing operations Income from - 0.02 discontinued operations Net income (loss) $ 0.02 $ (0.26 ) Earnings per common share - diluted: Income (loss) from $ 0.02 $ (0.28 ) continuing operations Income from - 0.02 discontinued operations Net income (loss) $ 0.02 $ (0.26 ) Average common shares 108,390,706 105,718,156 Average diluted common 111,332,621 105,718,156 shares (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 March 31, December 31, 2013 2012 Assets Current Assets: Cash and cash equivalents $ 395 $ 546 Short-term marketable securities 99 106 Restricted cash 1 1 Receivables (net of reserves - $16 and $16) 397 326 Inventories 315 304 Income taxes receivable 3 2 Deferred income taxes 2 2 Other current assets 45 40 Total current assets 1,257 1,327 Long-term marketable securities 32 25 Property, plant and equipment (net of accumulated depreciation and depletion - $1,769 and $1,738) 2,115 2,100 Deferred income taxes 41 38 Other assets 226 233 Total Assets $ 3,671 $ 3,723 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 246 $ 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 480 551 Long-term debt 2,015 2,016 Long-term debt - related party 290 289 Deferred income taxes 6 5 Pension and other postretirement benefits 573 573 Other liabilities 267 270 Total liabilities 3,631 3,704 Stockholders' Equity: Preferred stock - - Common stock 11 11 Treasury stock (3 ) - Additional paid-in capital 2,595 2,595 Accumulated other comprehensive loss (224 ) (233 ) Retained earnings (accumulated deficit) (2,365 ) (2,367 ) Stockholders' equity of parent 14 6 Noncontrolling interest 26 13 Total stockholders' equity including 40 19 noncontrolling interest Total Liabilities and Stockholders' Equity $ 3,671 $ 3,723 Other Information: Total cash and cash equivalents and marketable $ 526 $ 677 securities Borrowing availability from lines of credit 241 197 Total Liquidity $ 767 $ 874 USG CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in millions) (Unaudited) Three months ended March 31, 2013 2012 (1) Operating Activities Net income (loss) $ 2 $ (27 ) Less: Income from discontinued operations, net of - 2 tax Income (loss) from continuing operations 2 (29 ) Adjustments to reconcile income (loss) from continuing operations to net cash: Depreciation, depletion and amortization 38 39 Share-based compensation expense 4 9 Deferred income taxes (2 ) 1 Gain on asset dispositions - (4 ) (Increase) decrease in working capital: Receivables (68 ) (67 ) Income taxes receivable (1 ) (1 ) Inventories (11 ) (7 ) Other current assets 1 10 Payables (37 ) 12 Accrued expenses (29 ) - Increase in other assets (1 ) - (Decrease) increase in other liabilities (1 ) 4 Other, net 5 1 Net cash used for operating activities - continuing (100 ) (32 ) operations Investing Activities Purchases of marketable securities (51 ) (23 ) Sales or maturities of marketable securities 50 170 Capital expenditures (25 ) (13 ) Acquisition of mining rights (17 ) - Net proceeds from asset dispositions - 10 Investments in joint ventures - (7 ) Net cash (used for) provided by investing (43 ) 137 activities - continuing operations Financing Activities Repayment of debt (1 ) (1 ) Loan from venture partner 2 - Issuance of common stock 1 - Repurchases of common stock to satisfy employee tax withholding obligations (9 ) (3 ) Net cash used for financing activities - continuing (7 ) (4 ) operations Effect of exchange rate change on cash (1 ) 4 Net (decrease) increase in cash and cash (151 ) 105 equivalents Cash and cash equivalents at beginning of period 546 365 Cash and cash equivalents at end of period $ 395 $ 470 Supplemental Cash Flow Disclosures: Interest paid $ 42 $ 44 Income taxes paid, net of refunds received 2 4 Amount in accounts payable for capital expenditures 1 3 (1) Prior-period amounts have been adjusted to reflect our European businesses as discontinued operations. USG CORPORATION CORE BUSINESS RESULTS (dollars in millions) (Unaudited) Three months ended March 31, 2013 2012 (1) Net Sales: North American Gypsum: United States Gypsum $ 402 $ 381 Company CGC Inc. (gypsum) 78 84 USG Mexico, S.A. de C.V. 43 40 Other subsidiaries* 14 8 Eliminations (28 ) (27 ) Total 509 486 Worldwide Ceilings: USG Interiors, Inc. 115 119 USG International 34 30 CGC Inc. (ceilings) 16 18 Eliminations (12 ) (13 ) Total 153 154 Building Products Distribution: L&W Supply Corporation 281 270 Eliminations (129 ) (127 ) Total USG Corporation $ 814 $ 783 Operating Profit (Loss): North American Gypsum: United States Gypsum $ 44 $ 29 Company CGC Inc. (gypsum) 1 3 USG Mexico, S.A. de C.V. 5 5 Other subsidiaries (2) (4 ) (5 ) Eliminations - - Total 46 32 Worldwide Ceilings: USG Interiors, Inc. 23 23 USG International 1 - CGC Inc. (ceilings) 3 3 Total 27 26 Building Products Distribution: L&W Supply Corporation (2 ) (6 ) Corporate (18 ) (22 ) Eliminations (4 ) (6 ) Total USG Corporation $ 49 $ 24 (1) Prior-period amounts have been adjusted to reflect our European businesses as discontinued operations. (2) Includes our mining operation in Little Narrows, Nova Scotia, Canada, and our shipping company. USG CORPORATION RECONCILIATION of ADJUSTED NET INCOME (LOSS) to REPORTED GAAP NET INCOME (LOSS) (dollars in millions) (Unaudited) Three months ended March 31, 2013 2012 (1) Net income (loss) - GAAP $ 2 $ (27 ) measure Less: Income from discontinued - (2 ) operations, net of tax Reduction in valuation allowance for deferred tax (3 ) - assets Add back: Restructuring charges 2 2 Adjusted net income (loss) $ 1 $ (27 ) - Non-GAAP measure (1) Prior-period amounts have been adjusted to reflect our European businesses as discontinued operations. Adjusted Net Income (Loss) is a non-GAAP financial measure. We present Adjusted Net Income (Loss) to provide additional information regarding our current financial and operating performance because the measure excludes certain items that may not be indicative of the company's core operating results. In addition, Adjusted Net Income (Loss) is utilized by the company in evaluating operating 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 2013 $153.07 1.11 2012 $130.43 1.16 $132.09 1.15 $131.97 1.20 $132.26 1.22 $131.70 4.72 Wallboard price reflects amount per one thousand square feet. Volume expressed in billions of square feet. Contact: USG Corporation Media Inquiries: Bob Williams, 312/436-4356 or Investor Relations: Ken Banas, 312/436-6098
USG Corporation Reports 2013 First Quarter Results
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