-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NOjpGYDcMIFsIKSwv9df2Uyi3lA7TW4IY6pq1atyi/NoQ+PLV8v1+kbu8+gqYuej ox9jKAVQDYQJFn/tQQFsNg== 0000950137-03-005410.txt : 20031024 0000950137-03-005410.hdr.sgml : 20031024 20031024121130 ACCESSION NUMBER: 0000950137-03-005410 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031024 ITEM INFORMATION: FILED AS OF DATE: 20031024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: USG CORP CENTRAL INDEX KEY: 0000757011 STANDARD INDUSTRIAL CLASSIFICATION: CONCRETE GYPSUM PLASTER PRODUCTS [3270] IRS NUMBER: 363329400 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08864 FILM NUMBER: 03955762 BUSINESS ADDRESS: STREET 1: 125 S FRANKLIN ST STREET 2: DEPT. 188 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3126064000 8-K 1 c80339e8vk.txt CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) October 24, 2003. USG Corporation - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Commission File Number: 1-8864 ------ Delaware 36-3329400 - ------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 125 South Franklin Street, Chicago, Illinois 60606-4678 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (312) 606-4000 ---------------------------- ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On October 24, 2003, USG Corporation issued a press release containing earnings information for the quarter ended September 30, 2003. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference. SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. USG CORPORATION Registrant Date: October 24, 2003 By: /s/ Richard H. Fleming ------------------------------ Richard H. Fleming, Executive Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit No. Exhibit - ----------- ------- 99.1 USG Corporation press release dated October 24, 2003. EX-99.1 3 c80339exv99w1.txt PRESS RELEASE EXHIBIT 99.1 Media Inquiries: (312) 606-4356 Investor Relations: (312) 606-4125 USG CORPORATION REPORTS THIRD QUARTER NET SALES OF $963 MILLION AND NET EARNINGS OF $39 MILLION - Net sales increased 7% compared to the third quarter last year - Net earnings declined by $5 million primarily due to higher energy costs - Gypsum and Distribution units achieved record shipments during quarter CHICAGO, October 24, 2003--USG Corporation (NYSE:USG), a leading building products company, today reported third quarter 2003 net sales of $963 million and net earnings of $39 million. Net sales increased $60 million while net earnings declined $5 million compared with the third quarter last year. Diluted earnings per share for the third quarter of 2003 were $0.89, compared with $1.03 a year ago. "We achieved solid revenue growth during the quarter amid market conditions that were mixed," commented William C. Foote, USG Corporation Chairman, CEO and President. "Sales growth from record product shipments in USG's two largest businesses, North American gypsum and building products distribution, more than offset weakness in our worldwide ceilings business caused by declining commercial construction." Commenting on profitability, Foote explained, "We continue to grow and strengthen our company, but we are facing many ongoing cost pressures, such as higher raw material and energy prices. We have been working hard this year to offset these rising operating costs and -more- USG CORPORATION REPORTS THIRD QUARTER RESULTS/2 mitigate their impact on earnings. In 2003, we further improved operating efficiencies, made better use of working capital and reduced administrative expenses. In addition, we added capacity in our growing Sheetrock(R) Brand joint compound and DUROCK(R) Brand cement board product lines, and continued to invest in our building products distribution business. Additional initiatives are underway." Net sales for the first nine months of 2003 were $2,739 million, versus net sales of $2,617 million for the same period in 2002. Net earnings for the first nine months were $76 million compared to $22 million for that period last year. Diluted earnings per share for the first nine months of 2003 were $1.75, compared to $0.51 for the first nine months of 2002. Results in both nine-month periods included charges related to the adoption of new accounting standards. Net earnings for the first nine months of 2003 include a noncash, after-tax charge of $16 million related to the adoption of Statement of Financial Accounting Standards (SFAS) No. 143, "Accounting for Asset Retirement Obligations." Net earnings in the first nine months of 2002 included a noncash, nontaxable charge of $96 million related to the adoption of SFAS No. 142, "Goodwill and Other Intangible Assets." Earnings before the cumulative effect of these accounting changes were $92 million for the first nine months of 2003 and $118 million for the same period last year. Diluted earnings per share on that basis were $2.13 and $2.73 for the first nine months of 2003 and 2002, respectively. Earlier this year, the Judiciary Committee of the United States Senate approved the Fairness in Asbestos Injury Resolution Act of 2003, a bill intended to establish a nationally administered trust fund to compensate asbestos personal injury claimants. Since that time, various provisions -more- USG CORPORATION REPORTS THIRD QUARTER RESULTS/3 of the bill have been the subject of intense discussions. USG has been actively and directly involved in these discussions and remains very supportive of current efforts to pass asbestos litigation reform legislation. Foote praised those involved in developing a bipartisan, legislative solution to the asbestos litigation crisis, saying, "The tremendous amount of time and effort devoted to this legislative initiative by Senators Frist, Hatch, Daschle, Leahy and many others in Congress, together with representatives of labor and the business community, speaks to the seriousness of the asbestos crisis. For the sake of those suffering from asbestos-related diseases, as well as retirees, employees, creditors and shareholders who are being harmed by the current system, we must keep working toward an equitable solution to this crisis." CORE BUSINESS RESULTS NORTH AMERICAN GYPSUM USG's North American gypsum business recorded net sales of $600 million and operating profit of $60 million in the third quarter. This compares with net sales and operating profit of $552 million and $63 million, respectively, in the third quarter last year. United States Gypsum Company ("U.S. Gypsum") realized third quarter 2003 net sales of $540 million and operating profit of $43 million. These results compare with net sales and operating profit of $502 million and $50 million, respectively, in the third quarter last year. The largest factor contributing to the decline in profitability was a lower profit margin on SHEETROCK Brand gypsum wallboard due to increased energy costs. -more- USG CORPORATION REPORTS THIRD QUARTER RESULTS/4 U.S. Gypsum shipped 2.7 billion square feet of SHEETROCK Brand gypsum wallboard in the third quarter, a record for any quarter. Wallboard shipments for the third quarter of 2003 were 4 percent higher than the same period a year ago. For the first nine months of this year, shipments totaled 7.8 billion square feet, up 1 percent from the same period last year. U.S. Gypsum's nationwide average realized price of SHEETROCK Brand gypsum wallboard was $101.83 per thousand square feet during the third quarter, compared to $101.03 in the third quarter last year and $100.47 in the second quarter this year. There was modest price improvement late in the quarter following a price increase. Wallboard manufacturing costs were higher in the third quarter compared to the same period last year, primarily due to increased energy costs. Market prices for natural gas, a major source of energy for the company, were up over 50 percent in the third quarter of this year compared to the same period last year. Increased production efficiencies at the company's wallboard plants offset a portion of the cost increase. Higher energy and raw material costs also reduced profit margins on U.S. Gypsum's complementary products. The gypsum business of Canada-based CGC Inc. reported third quarter 2003 net sales of $69 million, which is $13 million higher than last year's third quarter. Operating profit of $11 million increased from $7 million in last year's third quarter. Most of the improvement in results was due to higher shipments of SHEETROCK Brand gypsum wallboard products and a stronger Canadian dollar. -more- USG CORPORATION REPORTS THIRD QUARTER RESULTS/5 WORLDWIDE CEILINGS USG's worldwide ceilings business recorded net sales of $157 million and operating profit of $12 million in the third quarter. This compared with net sales and operating profit of $162 million and $15 million, respectively, in the third quarter of 2002. Most of the decline in sales and profit was attributable to USG's domestic ceilings subsidiary, USG Interiors. USG Interiors had operating profit of $10 million in the third quarter, compared with $13 million for the same period last year. Higher energy and steel costs, combined with lower shipments of ceiling grid and tile, were the primary reasons for the decrease in operating profit. These factors more than offset the benefit of improved pricing the company achieved in most of its ceiling product lines. USG International had break-even results in the third quarter of 2003, compared to a profit of $1 million for the same period a year ago. Third quarter 2003 results included a $1 million writedown related to a previously closed ceiling tile plant in Aubange, Belgium. The ceilings business of Canada-based CGC contributed $2 million in operating profit, $1 million higher than last year. BUILDING PRODUCTS DISTRIBUTION L&W Supply Corporation ("L&W"), USG's building products distribution subsidiary, reported third quarter 2003 net sales of $341 million, compared to $317 million in the same period a year ago. The increase in revenues was due to record shipments of gypsum wallboard and complementary building products, primarily drywall metal, joint treatment and roofing. -more- USG CORPORATION REPORTS THIRD QUARTER RESULTS/6 Operating profit for L&W was $17 million in the quarter versus $18 million in the third quarter of 2002. The decline was mainly due to higher product costs. As of September 30, 2003, L&W operated 185 locations in the U.S., distributing a variety of gypsum and ceiling products, as well as related building materials. OTHER CONSOLIDATED INFORMATION Third quarter 2003 selling and administrative expenses totaled $78 million, an increase of $2 million versus the third quarter of 2002. Selling and administrative expenses were 8 percent of net sales in the third quarter, the same level as in the third quarter of 2002. Selling and administrative expenses totaled $239 million for the first nine months of 2003 compared to $238 million for that period last year. These amounts were 9 percent of net sales in both nine-month periods. Interest expense of $2 million and $5 million was incurred in the third quarter and first nine months of 2003, respectively. This compares with interest expense of $1 million and $4 million in the same periods last year. Under AICPA Statement of Position 90-7 ("SOP 90-7"), "Financial Reporting by Entities in Reorganization under the Bankruptcy Code," virtually all of USG's outstanding debt is classified as liabilities subject to compromise, and interest expense on this debt is not accrued or recorded. Contractual interest expense not accrued or recorded on pre-petition debt totaled $17 million and $53 million in the third quarter and first nine months of 2003, respectively. -more- USG CORPORATION REPORTS THIRD QUARTER RESULTS/7 For the third quarter, USG's Chapter 11 reorganization expenses of $2 million reflected $4 million of legal and financial advisory fees, partially offset by $2 million of interest income earned by the USG companies in Chapter 11. Under SOP 90-7, interest income earned on cash accumulated as a result of the Chapter 11 filing is recorded as an offset to Chapter 11 reorganization expenses. As of September 30, 2003, USG had $901 million of cash, cash equivalents, restricted cash and marketable securities on a consolidated basis, up from $788 million as of June 30, 2003, and $830 million as of December 31, 2002. Capital expenditures for the third quarter and first nine months of 2003 were $25 million and $61 million, respectively. Expenditures for the same periods last year were $26 million and $64 million, respectively. USG Corporation is a Fortune 500 company with subsidiaries that are market leaders in their key product groups: gypsum wallboard, joint compound and related gypsum products; cement board; gypsum fiber panels; ceiling panels and grid; and building products distribution. For more information about USG Corporation, visit the USG home page at http://www.usg.com. # # # -more- USG CORPORATION CONSOLIDATED STATEMENT OF EARNINGS (dollars in millions except per share data) (Unaudited)
THREE MONTHS NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, --------------------------------- --------------------------------- 2003 2002 2003 2002 --------------- -------------- -------------- -------------- Net sales $ 963 $ 903 $ 2,739 $ 2,617 Cost of products sold 816 749 2,341 2,164 Selling & administrative expenses 78 76 239 238 Chapter 11 reorganization expenses 2 3 7 12 --------------- -------------- -------------- -------------- Operating profit 67 75 152 203 Interest expense 2 1 5 4 Interest income (1) (1) (3) (3) Other income, net - - (5) (1) --------------- -------------- -------------- -------------- Earnings before income taxes and cumulative effect of accounting change 66 75 155 203 Income taxes 27 31 63 85 --------------- -------------- -------------- -------------- Earnings before cumulative effect of accounting change 39 44 92 118 --------------- -------------- -------------- -------------- Cumulative effect of accounting change, net of tax - - (16) (96) --------------- -------------- -------------- -------------- Net earnings 39 44 76 22 =============== ============== ============== ============== EARNINGS (LOSS) PER COMMON SHARE: Basic and diluted before cumulative effect of accounting change 0.89 1.03 2.13 2.73 Cumulative effect of accounting change - - (0.37) (2.22) --------------- -------------- -------------- -------------- Basic and diluted * 0.89 1.03 1.75 0.51 =============== ============== ============== ============== OTHER INFORMATION: Depreciation, depletion and amortization 28 26 80 77 Capital expenditures 25 26 61 64 Dividends paid per common share - - - - Average common shares 43,053,106 43,251,295 43,082,925 43,292,083 Average diluted common shares 43,054,141 43,251,295 43,082,925 43,292,083
* The sum of the per-share components may not be the same as the total. USG CORPORATION CORE BUSINESS RESULTS (dollars in millions) (Unaudited)
THREE MONTHS NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, ------------------------------- ------------------------------- 2003 2002 2003 2002 ------------- ------------- -------------- ------------- NET SALES: NORTH AMERICAN GYPSUM: U.S. Gypsum Company $ 540 $ 502 $ 1,548 $ 1,488 CGC Inc. (gypsum) 69 56 188 162 Other subsidiaries* 39 36 102 100 Eliminations (48) (42) (130) (122) ------------- ------------- -------------- ------------- Total 600 552 1,708 1,628 ------------- ------------- -------------- ------------- WORLDWIDE CEILINGS: USG Interiors, Inc. 113 120 337 348 USG International 45 46 127 132 CGC Inc. (ceilings) 11 9 33 30 Eliminations (12) (13) (39) (42) ------------- ------------- -------------- ------------- Total 157 162 458 468 ------------- ------------- -------------- ------------- BUILDING PRODUCTS DISTRIBUTION: L&W Supply Corporation 341 317 961 898 ------------- ------------- -------------- ------------- Eliminations (135) (128) (388) (377) ------------- ------------- -------------- ------------- Total USG Corporation 963 903 2,739 2,617 ============= ============= ============== ============= OPERATING PROFIT (LOSS): NORTH AMERICAN GYPSUM: U.S. Gypsum Company 43 50 109 164 CGC Inc. (gypsum) 11 7 23 20 Other subsidiaries* 6 6 13 18 ------------- ------------- -------------- ------------- Total 60 63 145 202 ------------- ------------- -------------- ------------- WORLDWIDE CEILINGS: USG Interiors, Inc. 10 13 23 31 USG International - 1 2 (4) CGC Inc. (ceilings) 2 1 4 4 ------------- ------------- -------------- ------------- Total 12 15 29 31 ------------- ------------- -------------- ------------- BUILDING PRODUCTS DISTRIBUTION: L&W Supply Corporation 17 18 41 38 ------------- ------------- -------------- ------------- Corporate (20) (17) (56) (54) Chapter 11 reorganization expenses (2) (3) (7) (12) Eliminations - (1) - (2) ------------- ------------- -------------- ------------- Total USG Corporation 67 75 152 203 ============= ============= ============== =============
*Includes USG Mexico, S.A. de C.V., a building products business in Mexico, Gypsum Transportation Limited, a shipping company in Bermuda, and USG Canadian Mining Ltd., a mining operation in Nova Scotia. USG CORPORATION CONSOLIDATED BALANCE SHEET (dollars in millions) (Unaudited)
AS OF AS OF SEPTEMBER 30, DECEMBER 31, 2003 2002 -------------- -------------- ASSETS Current Assets: Cash and cash equivalents $ 660 $ 649 Short-term marketable securities 64 50 Restricted cash 6 - Receivables (net of reserves - $14 and $17) 370 284 Inventories 281 270 Income taxes receivable 18 14 Deferred income taxes 56 49 Other current assets 60 77 -------------- -------------- Total current assets 1,515 1,393 Long-term marketable securities 171 131 Property, plant and equipment (net of accumulated depreciation and depletion - $784 and $701) 1,790 1,788 Deferred income taxes 168 199 Other assets 109 106 -------------- -------------- TOTAL ASSETS 3,753 3,617 ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable 228 170 Accrued expenses 204 243 Income taxes payable 7 25 -------------- -------------- Total current liabilities 439 438 Long-term debt 2 2 Other liabilities 440 370 Liabilities subject to compromise 2,252 2,272 Stockholders' Equity: Preferred stock - - Common stock 5 5 Treasury stock (258) (257) Capital received in excess of par value 414 412 Accumulated other comprehensive loss (24) (32) Retained earnings 483 407 -------------- -------------- Total stockholders' equity 620 535 -------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 3,753 3,617 ============== ==============
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