EXHIBIT 99.1
FOR IMMEDIATE RELEASE
- --------------------- CONTACT:
WEDNESDAY, FEBRUARY 23, 2005 JOHN F. REBELE
SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
BUILDING MATERIALS CORPORATION
OF AMERICA
(973) 628-4038
BUILDING MATERIALS CORPORATION OF AMERICA ANNOUNCES
---------------------------------------------------
RECORD FOURTH QUARTER AND FULL YEAR OPERATING RESULTS
-----------------------------------------------------
Building Materials Corporation of America ("BMCA" or "the Company")
announced today record fourth quarter of 2004 net income of $8.4 million
compared to net income of $1.8 million in the fourth quarter of 2003. Net income
in the fourth quarter of 2003 included a $2.4 million after-tax operating loss
($3.8 million pre-tax) from the write-down of the Albuquerque, New Mexico
manufacturing facility. Net income for the fourth quarter of 2004 was $8.4
million compared to $4.2 million in the fourth quarter of 2003, after excluding
the operating loss on the Albuquerque, New Mexico manufacturing facility (see
attached reconciliation of non-GAAP financial measures). The increase in fourth
quarter of 2004 net income was primarily attributable to higher operating
income, partially offset by higher interest expense and slightly higher other
expenses.
Operating income in the fourth quarter of 2004 was a record $30.7
million compared to $21.9 million in the fourth quarter of 2003, excluding the
$3.8 million pre-tax operating loss from the write-down of the Albuquerque, New
Mexico manufacturing facility (see attached reconciliation of non-GAAP financial
measures). Operating income in the fourth quarter of 2004 was positively
affected by record net sales primarily resulting from higher unit volumes and
- continued -
higher average selling prices of both residential and commercial roofing
products. Partially offsetting these improvements in operating results were
higher raw material costs, including asphalt, and higher selling, general and
administrative expenses mostly due to higher volume related distribution costs
and higher transportation costs, principally due to a rise in fuel costs.
Net sales for the fourth quarter of 2004 reached a record $461.1
million, a 15.7% increase over fourth quarter of 2003 net sales of $398.6
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 fourth quarter of 2004 increased to $15.8
million from $14.2 million for the fourth quarter of 2003, primarily due to
higher average borrowings and a higher average interest rate. The higher average
borrowings in the fourth quarter of 2004 were primarily due to the issuance, in
July 2004, of $200 million 7 3/4% senior notes due 2014 together with an
issuance, in November 2004, of an additional $50 million of 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 $350 million senior secured revolving credit facility. Other expense,
net was $1.5 million for the fourth quarter of 2004 compared with $1.1 million
for the fourth quarter of 2003.
- continued -
FULL YEAR RECORD OPERATING RESULTS
----------------------------------
For the full year of 2004, BMCA announced record net income of $54.9
million, on record net sales of $1,773.4 million, compared with net income of
$47.2 million for the full year of 2003. Net income for the full year 2003
included a $3.7 million after-tax operating gain ($5.7 million pre-tax) from the
sale of property in Ontario, California and a $2.4 million after-tax operating
loss ($3.8 million pre-tax) from the write-down of the Albuquerque, New Mexico
manufacturing facility. The increase in 2004 full year net income was primarily
due to record operating income, partially offset by higher interest expense.
Operating income for the full year of 2004 was a record $156.3 million,
a 16.1% increase over full year of 2003 operating income of $134.6 million,
excluding the $5.7 million pre-tax operating gain on sale of the Ontario
property and the $3.8 million pre-tax operating loss from the write-down of the
Albuquerque, New Mexico manufacturing facility (see attached reconciliation of
non-GAAP financial measures). Operating income for the full year of 2004 was
positively affected by record net sales primarily resulting from higher unit
volumes and higher average selling prices of both residential and commercial
roofing products. Partially offsetting these improvements were higher raw
material costs, including asphalt, and higher selling, general and
administrative expenses mostly 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 full year of 2004 were a record $1,773.4 million, a
10.3% increase over full year of 2003 net sales of $1,607.8 million, with the
increase primarily due to higher unit volumes and higher average selling prices
of both residential and commercial roofing products.
- continued -
Interest expense for the full year of 2004 increased to $62.7 million
from $56.7 million for the full year of 2003, primarily due to higher average
borrowings, partially offset by a lower average interest rate. The higher
average borrowings in 2004 were primarily due to the issuance, in July 2004, of
$200 million 7 3/4% senior notes due 2014 and the issuance, in November 2004, of
an additional $50 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 $350 million senior
secured revolving credit facility. In connection with entering into these
financing transactions, the Company recorded additional interest expense of
approximately $2.2 million, representing the write-off of the remaining 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 $6.1 million for the full year of 2004 compared with $6.1
million for the full year of 2003.
OTHER MATTERS
-------------
At December 31, 2004, long-term debt including current maturities was
$688.5 million, including no amount outstanding under the Company's $350 million
senior secured revolving credit facility.
- continued -
* * * *
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 2004 approximating $1.8 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.
- continued -
BUILDING MATERIALS CORPORATION OF AMERICA
SALES AND EARNINGS DATA (UNAUDITED)
(DOLLARS IN MILLIONS)
- ----------------------------------------------- -------------------------------------------------------------------------------
FOURTH QUARTER ENDED YEAR ENDED
-------------------- ----------
DEC. 31, 2004 DEC. 31, 2003 DEC. 31, 2004 DEC. 31, 2003
------------- ------------- ------------- -------------
Net sales $ 461.1 $ 398.6 $ 1,773.4 $ 1,607.8
---------- ---------- ---------- ----------
Costs and expenses, net: (1)
Cost of products sold 325.6 284.6 1,225.8 1,134.2
Selling, general and administrative 104.8 92.1 391.3 339.0
Loss on write-down of
manufacturing assets - 3.8 - 3.8
Gain on sale of assets - - - (5.7)
---------- ---------- ---------- ----------
Total costs and expenses, net 430.4 380.5 1,617.1 1,471.3
---------- ---------- ---------- ----------
Operating income 30.7 18.1 156.3 136.5
Interest expense (15.8) (14.2) (62.7) (56.7)
Other expense, net (1.5) (1.1) (6.1) (6.1)
---------- ---------- ---------- ----------
Income before income taxes 13.4 2.8 87.5 73.7
Income tax expense (5.0) (1.0) (32.6) (26.5)
---------- ---------- ---------- ----------
Net income $ 8.4 $ 1.8 $ 54.9 $ 47.2
========== ========== ========== ==========
- ----------------------------------------------- -------------------- ------------------ ------------------- -------------------
(1) For the three month periods and years ended December 31, 2004 and December
31, 2003, depreciation and amortization amounted to $12.4, $10.8, $46.2 and
$41.5 million, respectively.
BUILDING MATERIALS CORPORATION OF AMERICA
SALES AND EARNINGS DATA (UNAUDITED) - (CONTINUED)
(DOLLARS IN MILLIONS)
- ----------------------------------------------- -------------------------------------------------------------------------------
FOURTH QUARTER ENDED YEAR ENDED
-------------------- ----------
DEC. 31, 2004 DEC. 31, 2003 DEC. 31, 2004 DEC. 31, 2003
------------- ------------- ------------- -------------
Reconciliation of Non-GAAP to GAAP financial
measure: (1)
Net income, as adjusted $ 8.4 $ 4.2 $ 54.9 $ 45.9
Non-GAAP adjustments:
Gain on sale of assets (2) - - - 3.7
Loss on write-down of
manufacturing facility assets (2) - (2.4) - (2.4)
--------- --------- -------- --------
Net income, per GAAP $ 8.4 $ 1.8 $ 54.9 $ 47.2
========= ========= ======== ========
Operating income, as adjusted $ 30.7 $ 21.9 $ 156.3 $ 134.6
Non-GAAP adjustments:
Gain on sale of assets - - - 5.7
Loss on write-down of
manufacturing facility assets - (3.8) - (3.8)
--------- --------- -------- --------
Operating income, per GAAP $ 30.7 $ 18.1 $ 156.3 $ 136.5
========= ========= ======== ========
- ----------------------------------------------- -------------------- ------------------ ------------------- -------------------
(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 three month period and year ended December
31, 2003 is prepared on an after-tax basis using a 36% effective tax rate.