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USG Corp. Reports Operating Results (10-Q)

July 25, 2012 | About:
10qk

10qk

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USG Corp. (USG) filed Quarterly Report for the period ended 2012-06-30.

Usg Corporation has a market cap of $2.13 billion; its shares were traded at around $15.65 with and P/S ratio of 0.7.

Highlight of Business Operations:

Consolidated net sales in the second quarter of 2012 were $825 million, up 8% from the second quarter of 2011. We had an operating profit of $31 million in the second quarter of 2012 compared to an operating loss of $21 million in the second quarter of 2011. Our net loss was $57 million, or $0.53 per share, in the second quarter of 2012 compared to a net loss of $70 million, or $0.69 per share, in the second quarter of 2011. The net loss in the second quarter of 2012 included a loss of $41 million on the extinguishment of debt resulting from our repurchase of $241 million of our senior notes due 2014.

U.S. Gypsum: Net sales in the second quarter of 2012 were $368 million, up $46 million, or 14%, compared with the second quarter of 2011. Net sales of SHEETROCK® brand gypsum wallboard increased $42 million, or 38%, reflecting a 17% increase in gypsum wallboard shipments, which favorably affected sales by $18 million, and a 18% increase in average gypsum wallboard selling prices, which increased sales by $24 million. Net sales of products other than SHEETROCK® brand gypsum wallboard, including freight, were $215 million in the second quarter of 2012, a 2% increase compared to the second quarter of 2011. Net sales of SHEETROCK® brand joint compound decreased $2 million, or 3%, due to 6% lower volume partially offset by 3% higher selling prices. Net sales of DUROCK® brand cement board were unchanged as a 3% increase in volume was offset by a 1% decrease in selling prices. Net sales of FIBEROCK® brand gypsum fiber panels were also unchanged as a 5% increase in volume was offset by a 3% decrease in selling prices. Net sales of other products increased an aggregate of $6 million compared with the second quarter of 2011.

Operating profit of $26 million was recorded in the second quarter of 2012 compared with an operating loss of $21 million in the second quarter of 2011. The $47 million favorable change in operating results reflected gross profit improvements of $36 million for SHEETROCK® brand gypsum wallboard, of which $34 million was due to a higher gross margin and $2 million was due to the increase in shipments. The higher wallboard gross margin was attributable to higher selling prices, increased sales of higher margin UltraLight Panel products and lower per unit manufacturing costs. Operating results also reflected an increase of $1 million for DUROCK® brand cement board due to higher gross margin and a $4 million aggregate increase in gross profit for other product lines. Operating profit for the second quarter of 2012 also benefited from a $3 million gain on the sale of surplus assets, a $1 million decrease in restructuring charges and a $2 million net decrease in depreciation, miscellaneous costs and selling and administrative expenses compared to the second quarter of 2011. Gross profit for SHEETROCK® brand joint compound was unchanged compared to the second quarter of 2011 as higher gross margin was offset by the decline in volume. Gross profit for FIBEROCK® brand gypsum fiber panels was unchanged compared to the second quarter of 2011 as the increase in volume was offset by a decrease in gross margin.

CGC (gypsum): Net sales in the second quarter of 2012 were $83 million, an increase of $7 million, or 9%, compared to the second quarter of 2011. Net sales of SHEETROCK® brand gypsum wallboard increased $8 million due to a 21% increase in volume that was partially offset by 2% lower selling prices. Net sales of joint treatment products and other non-wallboard products increased $1 million and $2 million, respectively, and outbound freight increased $1 million. These increases were partially offset by $4 million due to an unfavorable impact of currency translation and a $1 million increase in cash discounts. Operating profit in the second quarter of 2012 was $2 million, unchanged from the second quarter of 2011. Gross profit decreases of $1 million each for gypsum wallboard, primarily due to the lower selling prices, joint treatment and cash discounts were offset by a $1 million increase in gross profit for other non-wallboard products and an aggregate decrease of $2 million for overhead and miscellaneous costs.

USG Mexico: Net sales for our Mexico-based subsidiary were $40 million in the second quarter of 2012, unchanged from the second quarter of 2011. A sales increase of $3 million for gypsum wallboard, reflecting 29% higher volume and 8% higher selling prices, was offset by sales declines of $1 million each for DUROCK® brand cement board, drywall steel and joint treatment. Operating profit was $4 million in the second quarter of 2012, down $1 million compared to the second quarter of 2011, as gross profit declines of $1 million each for DUROCK® brand cement board and joint treatment were partially offset by a $1 million increase in gross profit for gypsum wallboard. Gross profits for all other product lines were unchanged compared to the second quarter of 2011.

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