EXHIBIT 99.1
FOR IMMEDIATE RELEASE
- --------------------- Contact:
Wednesday, February 25, 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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RECORD FOURTH QUARTER AND FULL YEAR OPERATING RESULTS
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Building Materials Corporation of America ("BMCA" or "the Company")
announced today fourth quarter of 2003 net income of $1.8 million compared to a
net loss of $3.5 million in the fourth quarter of 2002. Net income in the fourth
quarter of 2003 includes a $2.4 million after-tax loss ($3.8 million pre-tax)
from the write-down of the Albuquerque, New Mexico manufacturing facility closed
in 2000 and net income in the fourth quarter of 2002 includes a $1.1 million
after-tax loss ($1.8 million pre-tax) on the sale of the Monroe, Georgia
manufacturing facility. Excluding these items, net income was $4.2 million in
the fourth quarter of 2003 compared to a $2.4 million net loss in the fourth
quarter of 2002 (see attached reconciliation of non-GAAP financial measures).
The increase in fourth quarter of 2003 net income was primarily attributable to
record operating income together with lower other expenses, partially offset by
slightly higher interest expense.
Excluding the losses referred to above, operating income in the fourth
quarter of 2003 was a record $21.9 million compared to $12.6 million in the
fourth quarter of 2002 (see attached reconciliation of non-GAAP financial
measures). Operating results were positively affected by record net sales
partially offset by higher raw material costs, principally asphalt, due to
higher crude oil prices, together with an increase in selling, general and
administrative expenses primarily due to higher volume related expenses.
-continued-
Net sales for the fourth quarter of 2003 reached a record $398.6
million, a 26.6% increase over fourth quarter of 2002 net sales of $314.9
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 2003 increased to $14.2
million from $13.5 million for the same period in 2002, primarily due to higher
average borrowings partially offset by a lower average interest rate. Other
expense, net was $1.1 million for the fourth quarter of 2003 compared with $2.8
million for the same period in 2002 primarily due to a decline in financing
costs in connection with the termination of the Accounts Receivable
Securitization Agreement.
FULL YEAR RECORD OPERATING RESULTS
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For the full year of 2003, BMCA announced record net income of $47.2
million on record net sales of $1,607.8 million. The 2003 net income includes a
$2.4 million after-tax loss ($3.8 million pre-tax) from the write-down of the
Albuquerque, New Mexico manufacturing facility and a $3.7 million after-tax gain
($5.7 million pre-tax) from the sale of property in Ontario, California.
Excluding these items, 2003 full year net income would have been $45.9 million
compared to $33.7 million in 2002, after excluding a $1.1 million after-tax loss
($1.8 million pre-tax) from the sale of the Monroe, Georgia manufacturing
facility, representing an increase of $12.2 million or 36.2% (see attached
reconciliation of non-GAAP financial measures). The increase in 2003 full year
net income was primarily attributable to record operating income together with
lower other expenses, partially offset by higher interest expense.
Excluding the gains and losses referred to above, operating income for
the full year of 2003 was a record $134.6 million compared to $116.7 million in
2002, representing an increase of $17.9 million or 15.3% (see attached
reconciliation of non-GAAP financial measures). The significant increase in
operating results in 2003 was primarily attributable to record net sales of
residential and commercial roofing products partially offset by higher raw
material costs, principally asphalt, and higher selling, general and
administrative expenses due to higher volume related distribution and selling
costs. Selling, general and administrative expenses as a percentage of net sales
for 2003, declined to 21.1% from 21.3% in 2002.
-continued-
Net sales for 2003 were a record $1,607.8 million, an 18.2% increase
over 2002 net sales of $1,360.7 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 2003 increased to $56.7 million from $55.0 million
for the same period in 2002, primarily due to higher average borrowings
partially offset by a lower average interest rate. Other expense, net was $6.1
million for 2003 compared with $9.0 million for 2002 primarily due to a decline
in financing costs in connection with the termination of the Accounts Receivable
Securitization Agreement.
OTHER MATTERS
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On February 9, 2004, the Company announced plans to build a new high
speed, state-of-the-art shingle manufacturing facility to support continued
growth in the Northeast and Canadian markets. The Company is evaluating sites in
Maryland, Pennsylvania, and two other states, with final selection expected in
the second quarter of 2004. The new manufacturing facility is expected to be
completed in early 2006.
* * * *
Building Materials Corporation of America, which operates under the
name of GAF Materials Corporation, is an indirect subsidiary of G-I Holdings
Inc., and is a leading national 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)
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Fourth Quarter Ended Twelve Months Ended
-------------------- -------------------
Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2003 Dec. 31, 2002
------------- -------------- ------------- -------------
(Millions) (Millions)
Net sales $ 398.6 $ 314.9 $1,607.8 $1,360.7
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Costs and expenses, net: (1)
Cost of products sold 284.6 230.8 1,134.2 954.5
Selling, general and administrative 92.1 71.5 339.0 289.5
(Gain) loss on sale of assets - 1.8 (5.7) 1.8
Loss on write-down of
manufacturing facility assets 3.8 - 3.8 -
------- ------- -------- --------
Total costs and expenses, net 380.5 304.1 1,471.3 1,245.8
------- ------- -------- --------
Operating income 18.1 10.8 136.5 114.9
Interest expense (14.2) (13.5) (56.7) (55.0)
Other income (expense), net (1.1) (2.8) (6.1) (9.0)
------- ------- -------- --------
Income (loss) before income taxes 2.8 (5.5) 73.7 50.9
Income tax (provision) benefit (1.0) 2.0 (26.5) (18.3)
------- ------- -------- --------
Net income (loss) $ 1.8 $ (3.5) $ 47.2 $ 32.6
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(1) For the three month and twelve month periods ended December 31, 2003 and
December 31, 2002, depreciation and amortization amounted to $10.8, $10.4,
$41.5 and $40.7 million, respectively.
-continued-
BUILDING MATERIALS CORPORATION OF AMERICA
SALES AND EARNINGS DATA
(UNAUDITED) - (CONTINUED)
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Fourth Quarter Ended Twelve Months Ended
-------------------- -------------------
Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2003 Dec. 31, 2002
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(Millions) (Millions)
Reconciliation of non-GAAP financial
measures: (1)
Net income (loss) per GAAP $ 1.8 $ (3.5) $ 47.2 $ 32.6
Non-GAAP adjustments:
(Gain) loss on sale of assets (2) - 1.1 (3.7) 1.1
Loss on write-down of
manufacturing facility assets (2) 2.4 - 2.4 -
------ ------- ------- -------
Net income (loss), as adjusted $ 4.2 $ (2.4) $ 45.9 $ 33.7
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Operating income per GAAP $ 18.1 $ 10.8 $ 136.5 $ 114.9
Non-GAAP adjustments:
(Gain) loss on sale of assets - 1.8 (5.7) 1.8
Loss on write-down of
manufacturing facility assets 3.8 - 3.8 -
------ ------- ------- -------
Operating income, as adjusted $ 21.9 $ 12.6 $ 134.6 $ 116.7
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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) Non-GAAP adjustments in the periods presented above are prepared
on an after-tax basis using a 36% effective tax rate.