Gypsum and Ceilings lead Q1 growth for USG
USG Corporation pointed to progress in its U.S. Gypsum and Ceilings businesses, which carried the Chicago-based building company's first-quarter results.
“USG is off to a great start in 2015, led by the performance of our U.S. Gypsum and U.S. Ceilings businesses,” said chairman, president and CEO James Metcalf. “We generated operating margin improvement in these businesses by achieving price increases, focusing on manufacturing cost control, and tailoring our spending on investments in these businesses.”
Net sales were up 6.9% to $909 million, compared to sales of $850 million in the year-ago quarter.
Meanwhile, Gypsum and Ceilings posted an operating profit margin improvement of 13.8% and 16.5%, respectively.
“While weather conditions were more favorable, we also saw organic volume growth across all of our businesses. Our non-wallboard products in the Gypsum business also played a part in our first quarter success by generating $5 million of incremental profit,” Metcalf said.
Net income for the quarter was $24 million, nearly half that of last year's income of $45 million.
USG also announced its plans to sell the two ships in its non-core shipping business, Gypsum Transportation Limited (GTL), for $42 million.
“Our customers continue to recognize USG’s value proposition in the marketplace, and it’s this commitment to quality, service, and innovation that differentiates us from our competition, enables us to capture price premiums on our products, and positions the company for future success,” Metcalf said. “With demand increasing in all of our end markets in 2015, I am excited about our prospects for the full year.”
With an eye on ProBuild, BLDR posts Q1 earnings
With the announcement of its ProBuild acquisition still reverberating through the industry, Builders FirstSource reported first-quarter gains in sales, gross margin and adjusted EBITDA.
However, fighting headwinds in the form of commodity inflation, the company's loss from continuing operations was $7.2 million, compared with $3.3 million in the year-ago quarter.
The Dallas-based pro dealer saw sales increase 7.2% to $371.0 million, up from $345.9 million in the same quarter last year.
Overall, CEO Floyd Sherman said he was pleased with the performance.
"I am extremely pleased with our start to fiscal 2015, as our first quarter sales of $371 million and our Adjusted EBITDA of over $11 million exceeded our first-quarter 2014 results," he said. "We were able to achieve these positive results despite the negative impact of commodity deflation on our current quarter sales, as average market prices for framing lumber have fallen 11.8% since the beginning of the year, and are down 13.6% when compared with the first quarter of 2014. As a result, our lumber and lumber sheet good sales were down 1.0% versus first quarter 2014 sales in the same product category. However, our value-added sales of prefabricated components, windows and doors, and millwork increased 12.8% versus first-quarter 2014 sales in the same product categories, largely due to our recent acquisitions."
With the impact of ProBuild looming in the future, Builders FirstSource completed the acquisition of Timber Tech Texas, a manufacturer of roof and floor trusses, located in the San Antonio metro area. Sales in 2014 for Timber Tech were about $4.4 million.
Chad Crow, Builders FirstSource president, COO and CFO, added, "Our 90 basis point improvement in gross margin reflects our on-going focus on profitable growth. Adjusted EBITDA flow through on incremental sales for the quarter was approximately 11%, as we increased our adjusted EBITDA margin by 50 basis points."
Meanwhile, Sherman looked ahead to residential construction growth, and the ProBuild deal. "Demand for new housing continues to slowly yet consistently improve, and we look to use this momentum to grow our revenues and market share, while conintuing to improve our operating margins."
Regarding ProBuild, the deal expected to close in the second half of 2015, Sherman said: "… we look forward to being able to bring the best talent in the industry together as one team. We believe this transaction significantly enhances our opportunity for growth."