Lafarge Corporation Reports First-Quarter Results

Apr 24, 2001, 01:00 ET from Lafarge Corporation

    HERNDON, Va., April 24 /PRNewswire Interactive News Release/ -- Lafarge
 Corporation (NYSE:   LAF; Toronto), North America's largest diversified supplier
 of construction materials, said that results in its cementitious products and
 construction materials divisions were slightly better than expected in the
 first quarter, while results in its gypsum division continued to reflect the
 impact of depressed prices for gypsum drywall.
     Lafarge Corporation normally reports a loss in the first quarter of the
 year as business activity slows in the winter months and the company performs
 most of its major plant maintenance programs in preparation for the main
 construction season. This year's results were also affected by seasonal losses
 associated with a number of acquisitions the company completed in the last
 half of 2000 and early 2001, and by a return to more normal winter conditions
 in contrast with last year's mild first-quarter weather.
     For the first three months of 2001, the company posted a net loss of
 $66.0 million ($0.92 per share on a diluted basis), compared with a net loss
 of  $24.5 million ($0.34 per diluted share) in the first quarter of 2000. Net
 sales for the most recent quarter were $444.4 million compared with $437.6
 million last year. On a consolidated basis, the company registered an
 operating loss before interest and taxes (EBIT) of $89.9 million, compared
 with a loss of $31.8 million last year.
     John Piecuch, President and CEO, said that with the exception of the
 gypsum drywall business, Lafarge's operating results were slightly better than
 expected in the first quarter, with solid backlogs in paving and other sectors
 going into the main construction season.
     "It's difficult to get good visibility on the rest of the year from just
 the first quarter, when winter weather slows down construction activity,"
 Piecuch said. "That being said, the construction sector seems to be relatively
 healthy when compared with other sectors of the U.S. economy. While GDP growth
 has slowed, we believe that lower interest rates and infrastructure work
 should contribute to strong demand for our products this year."
     In Canada, where Lafarge is the largest supplier of cement, concrete,
 aggregates, asphalt and paving, the company is optimistic because of the
 healthy economy, various infrastructure renewal programs and recent reductions
 in corporate and personal income taxes, Piecuch said.
     "With demand in Canada looking strong, and the expectation of stable
 conditions in our U.S. markets, the biggest question we face right now is,
 when will the drywall business stabilize?" Piecuch said. "While we recognize
 the current situation in the drywall industry as a short-term phenomenon, it's
 clearly offsetting some of the better news in our other operations."
 
     Summarizing operating highlights by product line:
 
     Construction materials
     The construction materials division posted an operating loss of $49.6
 million in the most recent quarter compared with a loss of $21.6 million last
 year. As anticipated, seasonal losses from recent acquisitions significantly
 impacted results. Approximately $19 million of the $28 million variance in
 quarterly results came from the Warren Paving & Materials Group and Presque
 Isle quarry, which were not part of Lafarge in the first quarter of 2000.
     Sales volumes of aggregate (primarily crushed stone, sand and gravel)
 reached 13.5 million tons in the first quarter, 21 percent better than last
 year. The improvement was mostly due to shipments from recent acquisitions.
 Overall, the company's average selling price was 1 percent higher than the
 first quarter of last year.
     Ready-mixed concrete sales volumes for the quarter totaled 1.9 million
 cubic yards, 2 percent lower than the previous year. The average price was 3.5
 percent above the level of last year.
 
     Cementitious Materials
     Lafarge's cementitious materials division (which includes cement, fly ash
 and slag products) reported an operating profit of $242,000 versus a profit of
 $82,000 in the first quarter of 2000. Total sales volumes were 2.0 million
 tons, or 10 percent less than the 2.3 million tons shipped in the first
 quarter last year. U.S. sales volumes were 14 percent lower than last year as
 more typical winter weather prevailed. This offset a 3 percent increase in
 Canadian shipments, led by Alberta and Ontario.
     In Canada, average cement prices were 4 percent higher than last year and
 1 percent better in the U.S. The company expects full-year average prices in
 its U.S. markets to be relatively flat compared with last year. In Canada, it
 is expected that the year-over-year price improvement will range from 2 to 4
 percent.
 
     Gypsum
     Lafarge's third main division, Lafarge Gypsum, recorded a net loss of
 $19.3 million, $26.6 million worse than the first quarter of 2000. The
 variance came primarily from deteriorating prices for drywall. The company's
 average selling price in the first quarter of  $73 per thousand square feet
 was 55 percent lower than the same period last year. As well, rising natural
 gas prices added $2.3 million more in costs than in the first quarter of last
 year. For the balance of year, however, fuel costs are expected to be
 comparable to 2000, reflecting a variety of actions taken over the past 12
 months.
     Operating costs were also higher because of the start up of the new
 Palatka, Florida drywall plant, which began to phase in production on January
 19. Through the end of March, the plant produced 77 million square feet of
 drywall, slightly ahead of target.
     Lafarge's total drywall sales volumes in the first quarter of 349 million
 square feet were 62 percent ahead of last year, due to shipments from the new
 plants in Kentucky and Florida that were not in operation last year.
     At the end of March, Lafarge Gypsum began commissioning its new joint-
 venture paper mill with the Rock-Tenn Corporation in Lynchburg, Va. The mill
 is expected to complete its start-up phase and begin supplying paperboard
 liner to Lafarge's U.S. plants by the fourth quarter of this year.
 
     Lafarge Corporation will broadcast its first-quarter conference call over
 the Internet beginning at 11:00 a.m. EST on Wednesday, April 25. Interested
 investors may log on to the company's web site at www.lafargecorp.com for
 further information. The conference call will be also be archived on the
 company's web site after the event.
 
     Lafarge Corporation is North America's largest diversified supplier of
 cement and cementitious materials, aggregates and asphalt, concrete and other
 construction materials used in residential, commercial, institutional and
 public works construction. The company operates 15 cement plants,
 approximately 800 construction materials operations, five gypsum wallboard
 manufacturing facilities and other businesses in 44 states in the U.S. and all
 provinces of Canada. The company's majority shareholder is Lafarge (Paris
 Stock Exchange: LAFP). The Lafarge Group is the world leader in building
 materials with operations in 71 countries and sales in excess of $11 billion.
 
     Statements made in this press release that are not historical facts are
 forward-looking statements made pursuant to the safe harbor provisions of the
 Private Securities Litigation Reform Act of 1995. These statements are not
 guarantees of future performance and involve risks, uncertainties and
 assumptions ("Factors") which are difficult to predict. Some of the Factors
 that could cause actual results to differ materially from those expressed in
 the forward-looking statements include, but are not limited to: the cyclical
 nature of the Company's business; national and regional economic conditions in
 the U.S. and Canada; Canadian currency fluctuations; seasonality of the
 Company's operations; levels of construction spending in major markets;
 supply/demand structure of the industry; competition from new or existing
 competitors; unfavorable weather conditions during peak construction periods;
 changes in and implementation of environmental and other governmental
 regulations; our ability to successfully identify, complete and efficiently
 integrate acquisitions; our ability to successfully penetrate new markets; and
 other Factors disclosed in the Company's Annual Report on Form 10-K and
 Quarterly Reports on Form 10-Q filed with the Securities and Exchange
 Commission. In general, the Company is subject to the risks and uncertainties
 of the construction industry and of doing business in the U.S. and Canada. The
 forward-looking statements are made as of this date and the Company undertakes
 no obligation to update them, whether as a result of new information, future
 events or otherwise.
 
     Visit the Lafarge Corp. web site at http://www.lafargecorp.com .
 
                              LAFARGE CORPORATION
                            Financial Highlights(1)
             (Unaudited and in thousands, except per share amounts)
 
 
                                                     Quarter Ended March 31
                                                       2001           2000
 
     Net Sales
     Construction Materials(2)                       $246,728       $220,387
     Cementitious Materials                           183,086        198,809
     Gypsum                                            35,260         40,044
     Eliminations                                     (20,689)       (21,614)
     Total Net Sales                                 $444,385       $437,626
 
     Income (Loss) from Operations
     Construction Materials                          $(49,648)      $(21,595)
     Cementitious Materials                               242             82
     Gypsum                                           (19,285)         7,302
     Total Loss from Operations                       (68,691)       (14,211)
     Corporate and unallocated expenses               (21,244)       (17,577)
     Total Loss Before Interest and Taxes             (89,935)       (31,788)
     Minority interest                                 (1,633)            --
     Interest expense, net                            (11,837)        (7,579)
     Pre-Tax Loss                                    (103,405)       (39,367)
     Income tax benefit                                37,433         14,819
     Net Loss                                        $(65,972)      $(24,548)
 
     Net Loss per Common Equity Share
     Basic and Diluted                                 $(0.92)       $ (0.34)
 
     Average Number of Common Equity
     Shares Outstanding
     Basic and Diluted                                 72,059         73,271
 
     NOTES:
     (1) Because of seasonal, weather-related conditions in several of the
         company's marketing areas, earnings of any one quarter should not be
         considered as indicative of results for a full year.
     (2) The company adopted the provisions of Emerging Issues Task Force Issue
         No. 00-10, Accounting for Shipping and Handling Fees and Costs, during
         the quarter ended December 31, 2000.  As a result of this adoption,
         construction materials net sales have been restated to include freight
         and delivery costs billed to customers.  Previously such billings were
         offset against corresponding expenses in cost of sales.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X97557333
 
 

SOURCE Lafarge Corporation
    HERNDON, Va., April 24 /PRNewswire Interactive News Release/ -- Lafarge
 Corporation (NYSE:   LAF; Toronto), North America's largest diversified supplier
 of construction materials, said that results in its cementitious products and
 construction materials divisions were slightly better than expected in the
 first quarter, while results in its gypsum division continued to reflect the
 impact of depressed prices for gypsum drywall.
     Lafarge Corporation normally reports a loss in the first quarter of the
 year as business activity slows in the winter months and the company performs
 most of its major plant maintenance programs in preparation for the main
 construction season. This year's results were also affected by seasonal losses
 associated with a number of acquisitions the company completed in the last
 half of 2000 and early 2001, and by a return to more normal winter conditions
 in contrast with last year's mild first-quarter weather.
     For the first three months of 2001, the company posted a net loss of
 $66.0 million ($0.92 per share on a diluted basis), compared with a net loss
 of  $24.5 million ($0.34 per diluted share) in the first quarter of 2000. Net
 sales for the most recent quarter were $444.4 million compared with $437.6
 million last year. On a consolidated basis, the company registered an
 operating loss before interest and taxes (EBIT) of $89.9 million, compared
 with a loss of $31.8 million last year.
     John Piecuch, President and CEO, said that with the exception of the
 gypsum drywall business, Lafarge's operating results were slightly better than
 expected in the first quarter, with solid backlogs in paving and other sectors
 going into the main construction season.
     "It's difficult to get good visibility on the rest of the year from just
 the first quarter, when winter weather slows down construction activity,"
 Piecuch said. "That being said, the construction sector seems to be relatively
 healthy when compared with other sectors of the U.S. economy. While GDP growth
 has slowed, we believe that lower interest rates and infrastructure work
 should contribute to strong demand for our products this year."
     In Canada, where Lafarge is the largest supplier of cement, concrete,
 aggregates, asphalt and paving, the company is optimistic because of the
 healthy economy, various infrastructure renewal programs and recent reductions
 in corporate and personal income taxes, Piecuch said.
     "With demand in Canada looking strong, and the expectation of stable
 conditions in our U.S. markets, the biggest question we face right now is,
 when will the drywall business stabilize?" Piecuch said. "While we recognize
 the current situation in the drywall industry as a short-term phenomenon, it's
 clearly offsetting some of the better news in our other operations."
 
     Summarizing operating highlights by product line:
 
     Construction materials
     The construction materials division posted an operating loss of $49.6
 million in the most recent quarter compared with a loss of $21.6 million last
 year. As anticipated, seasonal losses from recent acquisitions significantly
 impacted results. Approximately $19 million of the $28 million variance in
 quarterly results came from the Warren Paving & Materials Group and Presque
 Isle quarry, which were not part of Lafarge in the first quarter of 2000.
     Sales volumes of aggregate (primarily crushed stone, sand and gravel)
 reached 13.5 million tons in the first quarter, 21 percent better than last
 year. The improvement was mostly due to shipments from recent acquisitions.
 Overall, the company's average selling price was 1 percent higher than the
 first quarter of last year.
     Ready-mixed concrete sales volumes for the quarter totaled 1.9 million
 cubic yards, 2 percent lower than the previous year. The average price was 3.5
 percent above the level of last year.
 
     Cementitious Materials
     Lafarge's cementitious materials division (which includes cement, fly ash
 and slag products) reported an operating profit of $242,000 versus a profit of
 $82,000 in the first quarter of 2000. Total sales volumes were 2.0 million
 tons, or 10 percent less than the 2.3 million tons shipped in the first
 quarter last year. U.S. sales volumes were 14 percent lower than last year as
 more typical winter weather prevailed. This offset a 3 percent increase in
 Canadian shipments, led by Alberta and Ontario.
     In Canada, average cement prices were 4 percent higher than last year and
 1 percent better in the U.S. The company expects full-year average prices in
 its U.S. markets to be relatively flat compared with last year. In Canada, it
 is expected that the year-over-year price improvement will range from 2 to 4
 percent.
 
     Gypsum
     Lafarge's third main division, Lafarge Gypsum, recorded a net loss of
 $19.3 million, $26.6 million worse than the first quarter of 2000. The
 variance came primarily from deteriorating prices for drywall. The company's
 average selling price in the first quarter of  $73 per thousand square feet
 was 55 percent lower than the same period last year. As well, rising natural
 gas prices added $2.3 million more in costs than in the first quarter of last
 year. For the balance of year, however, fuel costs are expected to be
 comparable to 2000, reflecting a variety of actions taken over the past 12
 months.
     Operating costs were also higher because of the start up of the new
 Palatka, Florida drywall plant, which began to phase in production on January
 19. Through the end of March, the plant produced 77 million square feet of
 drywall, slightly ahead of target.
     Lafarge's total drywall sales volumes in the first quarter of 349 million
 square feet were 62 percent ahead of last year, due to shipments from the new
 plants in Kentucky and Florida that were not in operation last year.
     At the end of March, Lafarge Gypsum began commissioning its new joint-
 venture paper mill with the Rock-Tenn Corporation in Lynchburg, Va. The mill
 is expected to complete its start-up phase and begin supplying paperboard
 liner to Lafarge's U.S. plants by the fourth quarter of this year.
 
     Lafarge Corporation will broadcast its first-quarter conference call over
 the Internet beginning at 11:00 a.m. EST on Wednesday, April 25. Interested
 investors may log on to the company's web site at www.lafargecorp.com for
 further information. The conference call will be also be archived on the
 company's web site after the event.
 
     Lafarge Corporation is North America's largest diversified supplier of
 cement and cementitious materials, aggregates and asphalt, concrete and other
 construction materials used in residential, commercial, institutional and
 public works construction. The company operates 15 cement plants,
 approximately 800 construction materials operations, five gypsum wallboard
 manufacturing facilities and other businesses in 44 states in the U.S. and all
 provinces of Canada. The company's majority shareholder is Lafarge (Paris
 Stock Exchange: LAFP). The Lafarge Group is the world leader in building
 materials with operations in 71 countries and sales in excess of $11 billion.
 
     Statements made in this press release that are not historical facts are
 forward-looking statements made pursuant to the safe harbor provisions of the
 Private Securities Litigation Reform Act of 1995. These statements are not
 guarantees of future performance and involve risks, uncertainties and
 assumptions ("Factors") which are difficult to predict. Some of the Factors
 that could cause actual results to differ materially from those expressed in
 the forward-looking statements include, but are not limited to: the cyclical
 nature of the Company's business; national and regional economic conditions in
 the U.S. and Canada; Canadian currency fluctuations; seasonality of the
 Company's operations; levels of construction spending in major markets;
 supply/demand structure of the industry; competition from new or existing
 competitors; unfavorable weather conditions during peak construction periods;
 changes in and implementation of environmental and other governmental
 regulations; our ability to successfully identify, complete and efficiently
 integrate acquisitions; our ability to successfully penetrate new markets; and
 other Factors disclosed in the Company's Annual Report on Form 10-K and
 Quarterly Reports on Form 10-Q filed with the Securities and Exchange
 Commission. In general, the Company is subject to the risks and uncertainties
 of the construction industry and of doing business in the U.S. and Canada. The
 forward-looking statements are made as of this date and the Company undertakes
 no obligation to update them, whether as a result of new information, future
 events or otherwise.
 
     Visit the Lafarge Corp. web site at http://www.lafargecorp.com .
 
                              LAFARGE CORPORATION
                            Financial Highlights(1)
             (Unaudited and in thousands, except per share amounts)
 
 
                                                     Quarter Ended March 31
                                                       2001           2000
 
     Net Sales
     Construction Materials(2)                       $246,728       $220,387
     Cementitious Materials                           183,086        198,809
     Gypsum                                            35,260         40,044
     Eliminations                                     (20,689)       (21,614)
     Total Net Sales                                 $444,385       $437,626
 
     Income (Loss) from Operations
     Construction Materials                          $(49,648)      $(21,595)
     Cementitious Materials                               242             82
     Gypsum                                           (19,285)         7,302
     Total Loss from Operations                       (68,691)       (14,211)
     Corporate and unallocated expenses               (21,244)       (17,577)
     Total Loss Before Interest and Taxes             (89,935)       (31,788)
     Minority interest                                 (1,633)            --
     Interest expense, net                            (11,837)        (7,579)
     Pre-Tax Loss                                    (103,405)       (39,367)
     Income tax benefit                                37,433         14,819
     Net Loss                                        $(65,972)      $(24,548)
 
     Net Loss per Common Equity Share
     Basic and Diluted                                 $(0.92)       $ (0.34)
 
     Average Number of Common Equity
     Shares Outstanding
     Basic and Diluted                                 72,059         73,271
 
     NOTES:
     (1) Because of seasonal, weather-related conditions in several of the
         company's marketing areas, earnings of any one quarter should not be
         considered as indicative of results for a full year.
     (2) The company adopted the provisions of Emerging Issues Task Force Issue
         No. 00-10, Accounting for Shipping and Handling Fees and Costs, during
         the quarter ended December 31, 2000.  As a result of this adoption,
         construction materials net sales have been restated to include freight
         and delivery costs billed to customers.  Previously such billings were
         offset against corresponding expenses in cost of sales.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X97557333
 
 SOURCE  Lafarge Corporation