EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT:
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WEDNESDAY, NOVEMBER 3, 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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THIRD QUARTER OPERATING RESULTS
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Building Materials Corporation of America ("BMCA" or "the Company")
announced today third quarter of 2004 net income of $17.1 million compared to
net income of $21.6 million in the third quarter of 2003, with the decrease
primarily attributable to lower operating income together with higher interest
expense and higher other expenses.
Operating income in the third quarter of 2004 was $47.4 million
compared to a record $49.7 million in the third quarter of 2003. Operating
income in the third quarter of 2004 was lower primarily due to higher raw
material costs, including asphalt, and higher selling, general and
administrative expenses primarily resulting from higher transportation costs,
principally due to a rise in fuel costs. These higher operating costs were
partially offset by higher selling prices during the quarter through a price
increase implemented late in the third quarter of 2004.
- continued -
Net sales for the third quarter of 2004 reached a record $468.7
million, an increase over third quarter of 2003 net sales of $459.9 million,
with the increase primarily due to higher average selling prices of both
residential and commercial roofing products together with higher unit volumes of
commercial roofing products.
Interest expense for the third quarter of 2004 increased to $18.2
million from $15.2 million for the same period in 2003. The increase in interest
expense for the third quarter of 2004 is primarily due to the issuance, in July
2004, of $200 million 7 3/4% senior notes due 2014, partially offset by the
redemption of the Company's $100 million 8 5/8% senior notes due 2006 and a
reduction in the amount outstanding under the Company's senior secured revolving
credit facility. In connection with entering into this financing transaction,
the Company recorded additional interest expense of approximately $2.2 million
representing the write-off of deferred financing costs of the $100 million
8 5/8% senior notes, the premium paid to exercise the call of the 2006 senior
notes and other interest related expenses. Other expense, net was $2.0 million
for the third quarter of 2004 compared with $0.8 million for the same period in
2003.
FIRST NINE MONTHS RECORD OPERATING RESULTS
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For the first nine months of 2004, BMCA announced record net income of
$46.5 million compared with net income of $45.3 million for the first nine
months of 2003. Net income for the first nine 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 nine months of 2004 was a record
$46.5 million compared to $41.6 million for the first nine 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
nine months of 2004 primarily attributable to higher operating income together
with slightly lower other expenses, partially offset by higher interest expense.
- continued -
Operating income for the first nine months of 2004 was a record $125.6
million compared to $112.7 million for the first nine 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
nine months of 2004 was positively affected by record net sales primarily
resulting from higher unit volumes and higher average selling prices. Partially
offsetting these improvements were higher raw material costs, including asphalt,
and higher selling, general and administrative expenses due to higher volume
related distribution and selling costs, and higher transportation costs,
principally due to a rise in fuel costs.
Net sales for the first nine months of 2004 reached a record $1,312.3
million, an 8.5% increase over the first nine months of 2003 net sales of
$1,209.1 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 nine months of 2004 increased to $46.9
million from $42.5 million for the same period in 2003, primarily due to higher
average borrowings due to the issuance, in July 2004, of $200 million 7 3/4%
senior notes due 2014, partially offset by the redemption of the Company's $100
million 8 5/8% senior notes due 2006 and a reduction in the amount outstanding
under the Company's senior secured revolving credit facility.
- continued -
In connection with entering into this financing transaction, the Company
recorded additional interest expense of approximately $2.2 million representing
the write-off of deferred financing costs of the $100 million 8 5/8% senior
notes, the premium paid to exercise the call of the 2006 senior notes and other
interest related expenses. Partially offsetting the higher average borrowings
was a lower average interest rate. Other expense, net was $4.6 million for the
first nine months of 2004 compared with $5.1 million for the same period in
2003.
OTHER MATTERS
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At October 3, 2004, long-term debt including current maturities was
$677.6 million, including $31.0 million outstanding under the Company's senior
secured revolving credit facility.
Under the terms and conditions of the $200 million 7 3/4% senior notes
due 2014, on October 7, 2004, BMCA filed a registration statement with the
Securities and Exchange Commission on Form S-4 to register the notes.
* * * *
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 press release contains "forward looking statements" within the
meaning of the federal securities laws with respect to the Company's financial
results and future operations and, as such, concerns 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.
BUILDING MATERIALS CORPORATION OF AMERICA
SALES AND EARNINGS DATA (UNAUDITED)
(DOLLARS IN MILLIONS)
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THIRD QUARTER ENDED NINE MONTHS ENDED
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OCT. 3, 2004 SEPT. 28, 2003 OCT. 3, 2004 SEPT. 28, 2003
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Net sales $ 468.7 $ 459.9 $1,312.3 $ 1,209.1
Costs and expenses, net: (1)
Cost of products sold 319.4 318.9 900.2 849.6
Selling, general and administrative 101.9 91.3 286.5 246.8
Gain on sale of assets - - - (5.7)
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Total costs and expenses, net 421.3 410.2 1,186.7 1,090.7
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Operating income 47.4 49.7 125.6 118.4
Interest expense (18.2) (15.2) (46.9) (42.5)
Other expense, net (2.0) (0.8) (4.6) (5.1)
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Income before income taxes 27.2 33.7 74.1 70.8
Income tax provision (10.1) (12.1) (27.6) (25.5)
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Net income $ 17.1 $ 21.6 $ 46.5 $ 45.3
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(1) For the three and nine month periods ended October 3, 2004 and September 28,
2003, depreciation and amortization amounted to $11.8, $10.4, $33.8 and
$30.7 million, respectively.
BUILDING MATERIALS CORPORATION OF AMERICA
SALES AND EARNINGS DATA (UNAUDITED) - (CONTINUED)
(DOLLARS IN MILLIONS)
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THIRD QUARTER ENDED NINE MONTHS ENDED
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OCT. 3, 2004 SEPT. 28, 2003 OCT. 3, 2004 SEPT. 28, 2003
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Reconciliation of Non-GAAP
to GAAP financial measure: (1)
Net income, as adjusted $ 17.1 $ 21.6 $ 46.5 $ 41.6
Non-GAAP adjustment:
Gain on sale of assets (2) - - - 3.7
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Net income, per GAAP $ 17.1 $ 21.6 $ 46.5 $ 45.3
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Operating income, as adjusted $ 47.4 $ 49.7 $ 125.6 $ 112.7
Non-GAAP adjustment:
Gain on sale of assets - - - 5.7
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Operating income, per GAAP $ 47.4 $ 49.7 $ 125.6 $ 118.4
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(1) As used herein, "GAAP" refers to accounting principles generally accepted
in the United States of America. 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) The non-GAAP adjustment for the nine-month period ended September 28, 2003
is prepared on an after-tax basis using a 36% effective tax rate.