USG records $256 million first-quarter operating profit

By Caroline Salls

Pittsburgh, April 25 - USG Corp. reported a $256 million operating profit for the first quarter on net sales of $1.5 billion, according to a company news release.

Net sales increased by $292 million, or 25%, from net sales of $1.2 billion reported in the first quarter of 2005, and the operating profit more than doubled, compared with operating profit of $124 million reported in last year's first quarter.

According to the release, the quarter's strong results reflect record gypsum wallboard shipments, as well as strong performance of key complementary products in the North American Gypsum and Building Products Distribution operating segments.

"We are very pleased with our record first-quarter results - all three of USG's businesses are performing very well," chairman and chief executive officer William C. Foote said in the release. "We achieved the highest net sales for any quarter in our 104-year history."

A net loss of $141 million was recorded for the first quarter of 2006, including a $300 million after-tax charge for post-bankruptcy interest and fees related to pre-bankruptcy debt obligations that are expected to be paid upon the corporation's planned emergence from bankruptcy later this year.

Net earnings of $77 million were recorded in the first quarter of 2005.

"USG is positioned for long-term growth," Foote said in the release. "Our record-setting operating performance reflects strong industry leadership, efficient, low-cost manufacturing operations, expansion of our distribution business and a commitment of resources and capital for providing customers with innovative building solutions and excellent service."

The company said it is continuing to focus its attention and capital investments on improving customer service, manufacturing costs and operating efficiencies, as well as strategic investments to grow its businesses.

As of March 31, USG had $1.5 billion of cash, cash equivalents, restricted cash and marketable securities on a consolidated basis, compared with $1.2 billion reported on March 31, 2005 and $1.6 billion reported on Dec. 31.

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

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