USG Elaborates on Recent Form 8-K Filing; Quantifies Earnings Impact Of Unfavorable Operating Conditions

Apr 13, 2001, 01:00 ET from USG Corporation

    CHICAGO, April 13 /PRNewswire/ -- USG Corporation (NYSE:   USG) said today
 that the company's primary operating subsidiaries, United States Gypsum
 Company, L&W Supply Corporation and USG Interiors, Inc. continue to be
 negatively impacted by lower wallboard prices and/or higher energy costs.
     In a Form 8-K filing dated March 23, 2001, USG reported that conditions in
 the wallboard market remained difficult due to lower wallboard pricing and
 higher costs (primarily natural gas).  Seasonal factors have also affected
 results as many parts of the country experienced harsh winter weather or
 excessive rainfall during the first quarter.  Lower wallboard pricing has
 affected the results of U.S. Gypsum and L&W Supply.  Higher energy costs have
 reduced profitability at U.S. Gypsum and USG Interiors.
 
     Quantification of Earnings Impact
     These factors are expected to result in a first quarter operating profit
 of approximately $29 million to $31 million.  This level of operating profit
 is $33 million to $35 million below that of the fourth quarter of 2000, when
 operating profit totaled $64 million excluding $904 million of special
 charges.  The anticipated level of first quarter operating profit equates to
 fully diluted earnings per share of approximately $0.21 to $0.25.
     These results reflect the impact of average realized gypsum wallboard
 prices in the first quarter that were approximately $7 per thousand square
 feet lower than in the fourth quarter of last year.  In addition, gypsum
 wallboard production costs are up about $6 per thousand square feet in the
 first quarter compared to the fourth quarter due to higher energy costs.  The
 higher energy costs have also increased manufacturing costs of other products,
 such as ceiling tile.  Other factors contributing to lower profitability were
 lower margins on gypsum wallboard sold by L&W Supply and seasonally lower
 sales at USG Interiors.  Partially offsetting these unfavorable factors were
 lower overhead expenses and better results in certain non-gypsum wallboard
 product lines.
 
     Earnings Release and Conference Call
     Actual earnings will be released on Wednesday, April 25, 2001, before the
 opening of trading on the New York Stock Exchange.  A conference call to
 review first quarter results will be held at 10:00 a.m. CDT the same day.  The
 call will be webcast live at the USG Corporation website, http://www.usg.com .
 Those wishing to participate in the conference call by telephone should call
 212-346-6437 at least 10 minutes before the start of the call.
     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; ceiling tile and grid; and building products
 distribution.  For more information about USG Corporation, visit the USG
 homepage at http://www.usg.com .
 
 

SOURCE USG Corporation
    CHICAGO, April 13 /PRNewswire/ -- USG Corporation (NYSE:   USG) said today
 that the company's primary operating subsidiaries, United States Gypsum
 Company, L&W Supply Corporation and USG Interiors, Inc. continue to be
 negatively impacted by lower wallboard prices and/or higher energy costs.
     In a Form 8-K filing dated March 23, 2001, USG reported that conditions in
 the wallboard market remained difficult due to lower wallboard pricing and
 higher costs (primarily natural gas).  Seasonal factors have also affected
 results as many parts of the country experienced harsh winter weather or
 excessive rainfall during the first quarter.  Lower wallboard pricing has
 affected the results of U.S. Gypsum and L&W Supply.  Higher energy costs have
 reduced profitability at U.S. Gypsum and USG Interiors.
 
     Quantification of Earnings Impact
     These factors are expected to result in a first quarter operating profit
 of approximately $29 million to $31 million.  This level of operating profit
 is $33 million to $35 million below that of the fourth quarter of 2000, when
 operating profit totaled $64 million excluding $904 million of special
 charges.  The anticipated level of first quarter operating profit equates to
 fully diluted earnings per share of approximately $0.21 to $0.25.
     These results reflect the impact of average realized gypsum wallboard
 prices in the first quarter that were approximately $7 per thousand square
 feet lower than in the fourth quarter of last year.  In addition, gypsum
 wallboard production costs are up about $6 per thousand square feet in the
 first quarter compared to the fourth quarter due to higher energy costs.  The
 higher energy costs have also increased manufacturing costs of other products,
 such as ceiling tile.  Other factors contributing to lower profitability were
 lower margins on gypsum wallboard sold by L&W Supply and seasonally lower
 sales at USG Interiors.  Partially offsetting these unfavorable factors were
 lower overhead expenses and better results in certain non-gypsum wallboard
 product lines.
 
     Earnings Release and Conference Call
     Actual earnings will be released on Wednesday, April 25, 2001, before the
 opening of trading on the New York Stock Exchange.  A conference call to
 review first quarter results will be held at 10:00 a.m. CDT the same day.  The
 call will be webcast live at the USG Corporation website, http://www.usg.com .
 Those wishing to participate in the conference call by telephone should call
 212-346-6437 at least 10 minutes before the start of the call.
     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; ceiling tile and grid; and building products
 distribution.  For more information about USG Corporation, visit the USG
 homepage at http://www.usg.com .
 
 SOURCE  USG Corporation