USG Corporation Reports Second Quarter 2015 Results
7.23.15 | Chicago, IL | USG Corporation (NYSE:USG), a leading building products company, today reported results for the second quarter of 2015. “All of our businesses expanded their margins and contributed to our strong second quarter,” said James S. Metcalf, Chairman, President, and CEO. “We generated the highest level of net income since the fourth quarter of 2006 when demand was fifty percent higher.”
On a consolidated basis in the second quarter of 2015, net sales were $970 million, up 2 percent from the second quarter of 2014. Operating profit improved 7 percent to $105 million. The corporation’s adjusted operating profit was $118 million in the second quarter of 2015, compared to an adjusted operating profit of $87 million in the second quarter of 2014.
Second Quarter 2015 vs. Second Quarter 2014
• Net income increases 39% to $79 million
• Adjusted net income increases 81% to $78 million
• US Gypsum operating profit margin improvement of 60 basis points to 17.6%
• US Ceilings operating profit margin improvement of 150 basis points to 19.0%
USG generated $79 million in net income and $0.54 per diluted share in the second quarter of 2015. On an adjusted basis, net income of $78 million and diluted earnings per share of $0.53 increased over 80 percent. Adjusted results exclude results from Gypsum Transportation Limited (GTL), a shipping operation that the Company has exited, included in the Gypsum segment.
The corporation’s Gypsum segment generated $98 million of operating profit in the second quarter of 2015. On an adjusted basis, operating profit in the Gypsum segment improved by $20 million, led by the US Gypsum business which realized 310 basis points of improved operating margins. Wallboard provided $14 million of improved operating profit and the surfaces and substrates businesses contributed $9 million in total incremental profit. Favorable pricing and improved volumes coupled with lower natural gas costs and operational efficiencies drove the margin expansion in the US Gypsum business.
“In the second quarter, our Gypsum segment realized its strongest operating margin in over 8 years,” Mr. Metcalf said. “We are focused on expanding our margins and growing our non-wallboard portfolio of products in this business.”
The corporation’s Ceilings segment earned $25 million of operating profit in the second quarter of 2015, led by the US Ceilings business, which drove operating margins higher by 150 basis points through lower costs and increased sales of higher performing, higher margin ceilings products.
The Distribution segment earned $9 million of operating profit and more than doubled its operating margins to 2.5% in the second quarter of 2015. Same store sales increased 5%.
“We made strides in all three phases of our Plan to Win in the second quarter by strengthening our core operations, diversifying our earnings base, and differentiating USG through innovation. The outlook for all of our businesses is bright,” Mr. Metcalf said.
The full text of USG’s 2Q15 earnings release, including all tables, and a webcast replay of the company’s July 23 conference call may be accessed on the USG website, www.usg.com, in the Investor Relations section. A telephonic replay of the call will be available until Thursday, Aug. 6, at 1-888-843-7419 (1-630-652-3042 for international callers), and the pass code is 40172695.
USG Corporation is a manufacturer and distributor of innovative, high-performance building systems through its United States Gypsum Company, USG Interiors, LLC, and L&W Supply Corporation subsidiaries and its USG Boral Building Products joint venture. Headquartered in Chicago, USG’s worldwide operations serve the commercial, residential, and repair and remodel construction markets, enabling our customers to build the outstanding spaces where people live, work and play. USG wall, ceiling, exterior sheathing, flooring underlayment and roofing systems provide leading-edge building solutions, while L&W Supply branch locations efficiently stock and deliver building materials throughout the United States. USG Boral Building Products is a leading plasterboard & ceilings joint venture across Asia, Australasia, and the Middle East. USG and its subsidiaries are proud sponsors of the U.S. Olympic and Paralympic teams and the Canadian Olympic team. For additional information, visit www.usg.com.