Exhibit 99.1
FOR IMMEDIATE RELEASE
- --------------------- CONTACT:
TUESDAY, JULY 20, 2004 JOHN F. REBELE
SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
BUILDING MATERIALS CORPORATION
OF AMERICA
(973) 628-4038
BUILDING MATERIALS CORPORATION OF AMERICA ANNOUNCES
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SECOND QUARTER OPERATING RESULTS
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Building Materials Corporation of America ("BMCA" or "the Company")
announced today second quarter of 2004 net income of $18.8 million compared to
net income of $20.2 million in the second quarter of 2003. Net income for the
second quarter of 2003 included a $3.7 million after-tax ($5.7 million pre-tax)
gain from the sale of property in Ontario, California. Net income for the second
quarter of 2004 was $18.8 million compared to $16.5 million in the second
quarter of 2003, after excluding the gain on the sale of the Ontario property
(see attached reconciliation of non-GAAP financial measures), with the increase
in second quarter of 2004 net income primarily attributable to higher operating
income together with lower other expenses, partially offset by higher interest
expense.
Operating income in the second quarter of 2004 was a record $46.3
million compared to $42.4 million in the second quarter of 2003, excluding the
$5.7 million gain on sale of the Ontario property (see reconciliation of
non-GAAP financial measures). Operating income in the second quarter of 2004 was
positively affected by record net sales and an improvement in the gross margin
from 30.6% in the second quarter of 2003 to 32.1% in the second quarter of 2004.
Partially offsetting these improvements were higher selling, general and
administrative expenses due to higher volume related distribution and selling
costs, and, to a lesser extent, higher transportation costs, principally due to
a rise in fuel costs.
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Net sales for the second quarter of 2004 reached a record $451.5
million, a 10.0% increase over second quarter of 2003 net sales of $410.3
million, with the increase primarily due to higher unit volumes and higher
average selling prices of both residential and commercial roofing products.
Interest expense for the second quarter of 2004 increased to $14.5
million from $13.8 million for the same period in 2003, primarily due to higher
average borrowings, partially offset by a lower average interest rate. Other
expense net, was $1.8 million for the second quarter of 2004 compared with $2.7
million for the same period in 2003, primarily due to a decline in financing
costs as a result of the termination of the Accounts Receivable Securitization
Agreement in July 2003.
FIRST SIX MONTHS RECORD OPERATING RESULTS
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For the first six months of 2004, BMCA announced record net income of
$29.5 million compared with net income of $23.8 million for the first six months
of 2003. Net income for the first six months of 2003 included a $3.7 million
after-tax ($5.7 million pre-tax) gain from the sale of property in Ontario,
California. Net income for the first six months of 2004 was a record $29.5
million compared to $20.1 million for the first six months of 2003, after
excluding the gain on the sale of the Ontario property (see attached
reconciliation of non-GAAP financial measures), with the increase in the first
six months of 2004 primarily attributable to higher operating income and lower
other expenses, partially offset by higher interest expense.
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Operating income for the first six months of 2004 was a record $78.2
million compared to $63.0 million for the first six months of 2003, excluding
the $5.7 million gain on sale of the Ontario property (see attached
reconciliation of non-GAAP financial measures). Operating income for the first
six months of 2004 was positively affected by record net sales and an
improvement in the gross margin from 29.2% for the first six months of 2003 to
31.2% for the first six months of 2004. Partially offsetting these improvements
were higher selling, general and administrative expenses due to higher volume
related distribution and selling costs, and, to a lesser extent, higher
transportation costs, principally due to a rise in fuel costs.
Net sales for the first six months of 2004 reached a record $843.5
million, a 12.6% increase over the first six months of 2003 net sales of $749.3
million, with the increase primarily due to higher unit volumes and higher
average selling prices of both residential and commercial roofing products.
Interest expense for the first six months of 2004 increased to $28.7
million from $27.3 million for the same period in 2003, primarily due to higher
average borrowings, partially offset by a lower average interest rate. Other
expense net, was $2.5 million for the first six months of 2004 compared with
$4.2 million for the same period in 2003, primarily due to a decline in
financing costs as a result of the termination of the Accounts Receivable
Securitization Agreement in July 2003.
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OTHER MATTERS
On May 7, 2004, the Company acquired certain assets of a
manufacturing facility located in Quakertown, Pennsylvania from Atlas Roofing
Corporation for a purchase price of $23.2 million.
At July 4, 2004 and June 29, 2003, amounts outstanding under the
Company's senior secured revolving credit facility amounted to $139.0 million
and $0, respectively. The increase in the amount outstanding under the Company's
senior secured revolving credit facility at July 4, 2004 is primarily
attributable to the termination of the $115.0 million Accounts Receivable
Securitization Agreement in July 2003, the repayment of the $7.0 million
Precious Metals Note in August 2003 and the repayment of the $35.0 million
10 1/2 % Senior Notes in September 2003.
* * * *
Building Materials Corporation of America, which operates under the
name of GAF Materials Corporation, is an indirect subsidiary of G-I Holdings
Inc., with annual sales in 2003 exceeding $1.6 billion, and is North America's
largest manufacturer of residential and commercial roofing products and
specialty building products.
This news release contains "forward looking statements" within the
meaning of the federal securities laws with respect to the Company's financial
results and its future operations and, as such, concern matters that are not
historical facts. These statements are subject to risks and uncertainties that
could cause actual results to differ materially from those expressed in such
statements. Important factors that could cause such differences are discussed in
the Company's filings with the U.S. Securities and Exchange Commission and are
incorporated herein by reference.
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BUILDING MATERIALS CORPORATION OF AMERICA
SALES AND EARNINGS DATA (UNAUDITED)
(DOLLARS IN MILLIONS)
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SECOND QUARTER ENDED SIX MONTHS ENDED
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JULY 4, 2004 JUNE 29, 2003 JULY 4, 2004 JUNE 29, 2003
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Net sales $ 451.5 $ 410.3 $ 843.5 $ 749.3
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Costs and expenses, net: (1)
Cost of products sold 306.6 284.8 580.7 530.7
Selling, general and administrative 98.6 83.1 184.6 155.6
Gain on sale of assets - (5.7) - (5.7)
-------- -------- -------- --------
Total costs and expenses, net 405.2 362.2 765.3 680.6
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Operating income 46.3 48.1 78.2 68.7
Interest expense (14.5) (13.8) (28.7) (27.3)
Other expense, net (1.8) (2.7) (2.5) (4.2)
-------- -------- -------- --------
Income before income taxes 30.0 31.6 47.0 37.2
Income tax provision (11.2) (11.4) (17.5) (13.4)
-------- -------- -------- --------
Net income $ 18.8 $ 20.2 $ 29.5 $ 23.8
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(1) For the second quarter and six month periods ended July 4, 2004 and June
29, 2003, depreciation and amortization amounted to $11.4, $10.3, $22.0 and
$20.3 million, respectively.
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BUILDING MATERIALS CORPORATION OF AMERICA
SALES AND EARNINGS DATA (UNAUDITED) - (CONTINUED)
(DOLLARS IN MILLIONS)
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SECOND QUARTER ENDED SIX MONTHS ENDED
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JULY 4, 2004 JUNE 29, 2003 JULY 4, 2004 JUNE 29, 2003
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Reconciliation of non-GAAP financial measures: (1)
Net income per GAAP $ 18.8 $ 20.2 $ 29.5 $ 23.8
Non-GAAP adjustments:
Gain on sale of assets (2) - (3.7) - (3.7)
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Net income, as adjusted $ 18.8 $ 16.5 $ 29.5 $ 20.1
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Operating income per GAAP $ 46.3 $ 48.1 $ 78.2 $ 68.7
Non-GAAP adjustments:
Gain on sale of assets (2) - (5.7) - (5.7)
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Operating income, as adjusted $ 46.3 $ 42.4 $ 78.2 $ 63.0
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(1) As used herein, "GAAP" refers to U.S. generally accepted accounting
principles. The Company uses non-GAAP financial measures to eliminate the
effect of other operating gains and losses on reported operating income and
net income. Management believes that these financial measures are useful to
investors and financial institutions because such measures exclude
transactions that are unusual due to their nature or infrequency and
therefore allow investors and financial institutions to more readily
compare the Company's performance from period to period. Management uses
this information in monitoring and evaluating the Company's operating
performance.
(2) Non-GAAP adjustments for the second quarter and six month periods ended
June 29, 2003 are prepared on an after-tax basis using a 36% effective tax
rate.