USG Corp. (USG, Financial) filed Quarterly Report for the period ended 2009-03-31.
USG Corp. through its subsidiaries is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential new nonresidential and repair and remodel construction as well as products used in certain industrial processes. USG's operations are organized into three operating segments: North American Gypsum Worldwide Ceilings and Building Products Distribution. USG Corp. has a market cap of $1.5 billion; its shares were traded at around $15.09 with and P/S ratio of 0.32.
As of March 31, 2009, we had $223 million of cash and cash equivalents compared with $471 million as of December 31, 2008. During the first quarter of 2009, we used $190 million of cash to repay all outstanding borrowings under our revolving credit facility in connection with its amendment and restatement. Uses of cash during the quarter also included $16 million for capital expenditures and a net $30 million for operating activities, including $28 million for severance and other obligations associated with 2008 restructuring activities, $27 million for interest and $21 million to provide cash collateral to derivative counterparties and in connection with related natural gas purchases as a result of changes in the market value of our derivatives and our credit rating.
During the first quarter of 2009, we recorded restructuring and long-lived asset impairment charges totaling $10 million pretax ($7 million after-tax, or $0.07 per diluted share). This amount included a $4 million charge to the reserve for future lease obligations and a $3 million asset impairment charge for the write-down of leasehold improvements related to leased space that we no longer occupy in our corporate headquarters and charges of $2 million for severance related to employees who were part of our 2008 workforce reductions, but continued to provide services after December 31, 2008, and $1 million for costs related to production facilities that were temporarily idled or permanently closed prior to 2009.
An operating loss of $21 million was recorded in the first quarter of 2009 compared with an operating loss of $62 million in the first quarter of 2008. The $41 million favorable change in operating loss was primarily attributable to improved gypsum wallboard gross margin, which reduced the loss by $23 million. Gross profit for SHEETROCK® brand joint treatment products was virtually unchanged compared with the first quarter of 2008. A net gross profit increase for other products lines and lower plant start-up costs, selling and administrative expenses and information technology, promotional and other expenditures contributed $16 million in operating profit improvement. Restructuring charges of $2 million pretax were recorded in the first quarter of 2009 compared with charges of $4 million pretax in the first quarter of 2008.
CGC Inc.: Net sales declined $23 million, or 27%, in the first quarter of 2009 compared with the first quarter of 2008. The unfavorable effects of currency translation resulting from a stronger U.S. dollar adversely affected net sales by $14 million, sales of SHEETROCK® brand gypsum wallboard decreased $4 million, reflecting a 9% decline in volume, and lower sales of other products and outbound freight reduced net sales by $5 million. An operating loss of $1 million was recorded in the first quarter of 2009 compared with operating profit of $4 million in the first quarter of 2008. This $5 million decline in operating profit primarily reflected a $2 million decrease in gross profit for gypsum wallboard and a $3 million favorable rebate adjustment recorded in the first quarter of 2008.
L&W Supplys net sales in the first quarter of 2009 were $353 million, down $137 million, or 28%, compared with the first quarter of 2008. A 34% decrease in gypsum wallboard shipments as a result of the weak residential construction market adversely affected net sales by $59 million, while a 4% increase in average gypsum wallboard selling prices contributed a $4 million improvement. Net sales of construction metal products decreased $27 million, or 23%, and net sales of ceilings products decreased $9 million, or 14%. Net sales of all other nonwallboard products decreased $46 million, or 35%. As a result of lower product volumes, same-location net sales for the first quarter of 2009 were down 17% compared with the first quarter of 2008.
Read the The complete ReportUSG is in the portfolios of Prem Watsa of Fairfax Financial Holdings, Inc., Wallace Weitz of Weitz Wallace R & Co, Warren Buffett of Berkshire Hathaway, Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund, Irving Kahn of Kahn Brothers & Company Inc., Irving Kahn of Kahn Brothers & Company Inc., John Rogers of ARIEL CAPITAL MANAGEMENT LLC.
USG Corp. through its subsidiaries is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential new nonresidential and repair and remodel construction as well as products used in certain industrial processes. USG's operations are organized into three operating segments: North American Gypsum Worldwide Ceilings and Building Products Distribution. USG Corp. has a market cap of $1.5 billion; its shares were traded at around $15.09 with and P/S ratio of 0.32.
Highlight of Business Operations:
Consolidated net sales in the first quarter of 2009 were $864 million, down 26% from the first quarter of 2008. An operating loss of $42 million and a net loss of $42 million, or $0.42 per diluted share, were incurred in the first quarter of 2009. These results compared with an operating loss of $60 million and net loss of $41 million, or $0.42 per diluted share, in first quarter of 2008. Financial information for the first quarter of 2008 has been retrospectively adjusted for our change in the fourth quarter of 2008 from the last-in, first-out method to the average cost method of inventory accounting.As of March 31, 2009, we had $223 million of cash and cash equivalents compared with $471 million as of December 31, 2008. During the first quarter of 2009, we used $190 million of cash to repay all outstanding borrowings under our revolving credit facility in connection with its amendment and restatement. Uses of cash during the quarter also included $16 million for capital expenditures and a net $30 million for operating activities, including $28 million for severance and other obligations associated with 2008 restructuring activities, $27 million for interest and $21 million to provide cash collateral to derivative counterparties and in connection with related natural gas purchases as a result of changes in the market value of our derivatives and our credit rating.
During the first quarter of 2009, we recorded restructuring and long-lived asset impairment charges totaling $10 million pretax ($7 million after-tax, or $0.07 per diluted share). This amount included a $4 million charge to the reserve for future lease obligations and a $3 million asset impairment charge for the write-down of leasehold improvements related to leased space that we no longer occupy in our corporate headquarters and charges of $2 million for severance related to employees who were part of our 2008 workforce reductions, but continued to provide services after December 31, 2008, and $1 million for costs related to production facilities that were temporarily idled or permanently closed prior to 2009.
An operating loss of $21 million was recorded in the first quarter of 2009 compared with an operating loss of $62 million in the first quarter of 2008. The $41 million favorable change in operating loss was primarily attributable to improved gypsum wallboard gross margin, which reduced the loss by $23 million. Gross profit for SHEETROCK® brand joint treatment products was virtually unchanged compared with the first quarter of 2008. A net gross profit increase for other products lines and lower plant start-up costs, selling and administrative expenses and information technology, promotional and other expenditures contributed $16 million in operating profit improvement. Restructuring charges of $2 million pretax were recorded in the first quarter of 2009 compared with charges of $4 million pretax in the first quarter of 2008.
CGC Inc.: Net sales declined $23 million, or 27%, in the first quarter of 2009 compared with the first quarter of 2008. The unfavorable effects of currency translation resulting from a stronger U.S. dollar adversely affected net sales by $14 million, sales of SHEETROCK® brand gypsum wallboard decreased $4 million, reflecting a 9% decline in volume, and lower sales of other products and outbound freight reduced net sales by $5 million. An operating loss of $1 million was recorded in the first quarter of 2009 compared with operating profit of $4 million in the first quarter of 2008. This $5 million decline in operating profit primarily reflected a $2 million decrease in gross profit for gypsum wallboard and a $3 million favorable rebate adjustment recorded in the first quarter of 2008.
L&W Supplys net sales in the first quarter of 2009 were $353 million, down $137 million, or 28%, compared with the first quarter of 2008. A 34% decrease in gypsum wallboard shipments as a result of the weak residential construction market adversely affected net sales by $59 million, while a 4% increase in average gypsum wallboard selling prices contributed a $4 million improvement. Net sales of construction metal products decreased $27 million, or 23%, and net sales of ceilings products decreased $9 million, or 14%. Net sales of all other nonwallboard products decreased $46 million, or 35%. As a result of lower product volumes, same-location net sales for the first quarter of 2009 were down 17% compared with the first quarter of 2008.
Read the The complete ReportUSG is in the portfolios of Prem Watsa of Fairfax Financial Holdings, Inc., Wallace Weitz of Weitz Wallace R & Co, Warren Buffett of Berkshire Hathaway, Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund, Irving Kahn of Kahn Brothers & Company Inc., Irving Kahn of Kahn Brothers & Company Inc., John Rogers of ARIEL CAPITAL MANAGEMENT LLC.
