USG posts $110 million second-quarter net earnings on $1.3 billion net sales

By Caroline Salls

Pittsburgh, July 26 - USG Corp. reported second-quarter net sales of $1.3 billion, a quarterly record for USG, and net earnings of $110 million, according to a company news release.

Net sales increased $142 million, or 12%, and net earnings increased $30 million, or 38%, compared with the second quarter of last year.

"Net sales this quarter were a record, driven by stronger shipments and improved selling prices," chairman, chief executive officer and president William C. Foote said in the release.

"We shipped more Sheetrock brand gypsum wallboard and related gypsum products than ever before, and operating margins improved for many of our businesses, despite continuing cost pressures.

"We are successfully implementing our strategies to grow USG's core businesses and improve our business processes to cope with higher operating costs."

Net sales for the first half of 2005 were $2.5 billion versus $2.2 billion for the same period in 2004.

USG reported net earnings of $187 million for the first six months of this year compared with net earnings of $137 million for the same period a year ago.

"USG's outlook for the rest of 2005 is favorable," Foote continued in the release. "Demand for USG's gypsum wallboard products is likely to remain strong in the second half as the robust new housing and residential remodeling markets show no sign of slowing in the near term."

USG reported net Chapter 11 reorganization income of $1 million in the second quarter of 2005, compared with $4 million in last year's second quarter.

As of June 30, USG had $1.30 billion of cash, cash equivalents, restricted cash and marketable securities on a consolidated basis, compared with $1.20 billion as of March 31 and $1.25 billion as of Dec. 31, 2004.

USG, a Chicago-based building materials company, filed for bankruptcy on June 25, 2001 with the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 01-02094.

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