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NATIONAL GYPSUM ANNOUNCES 1993 SECOND QUARTER RESULTS

 CHARLOTTE, N.C., Sept. 9 /PRNewswire/ -- National Gypsum Company (NASDAQ-NMS: NGCO) today announced financial results for operations for the three and six months ended June 30, 1993. On July 1, 1993, the company acquired certain assets, principally related to gypsum wallboard and related products, of the "old" National Gypsum in connection with the consummation of the Chapter 11 Plan of Reorganization initiated by the former National Gypsum. As of June 30, 1993, the "old" National Gypsum Company recorded various nonrecurring adjustments to implement fresh-start reporting whereby the carrying values of assets purchased by the company were written-down by $83.0 million based on current fair market values as well as adjustments to record a $757.3 million extraordinary gain to reflect the discharge of certain liabilities upon consummation of the Plan of Reorganization. As a result of these adjustments, the company's Consolidated Condensed Balance Sheet as of June 30, 1993, is not comparable to "old" National Gypsum Company's balance sheet at Dec. 31, 1992. In addition, results of operations to be reported by the company for periods beginning July 1, 1993, will not be comparable to the "old" company's results of operations. Due to the provisions of the Plan of Reorganization regarding the former National Gypsum's subsidiary, The Austin Company, the results of operations and cash flows related to Austin have been classified as discontinued operations.
 Second quarter net revenues were $120.8 million, compared with $111.6 million for the same period last year. There was a $915,000 operating loss for the second quarter, down from $6.6 million in the second quarter of 1992. The net loss from discontinued operations increased to $2.1 million, compared with a net loss of $1.9 million in 1992. Net income of $723.1 million was realized during this year's second quarter, compared with an $11.3 million loss during last year's second quarter, principally as a result of the adjustments described above.
 Second quarter results included bankruptcy expenses of $92.6 million, compared with $7.0 million in the same period of 1992; an income tax benefit of $38.5 million, compared with a benefit of $4.2 million in 1992; and an extraordinary gain on the extinguishment of liabilities subject to compromise of $757.3 million. This year's second quarter results also included a net casualty gain of $19.2 million resulting from the receipt of $30 million of insurance proceeds stemming from the loss in March 1993 of one of three oceangoing vessels chartered by "old" National Gypsum Company. Net cash provided by operating activities was $14.7 million, compared with net cash provided by operating activities during the same period in 1992 of $127,000.
 For the first six months, net revenues were $237.6 million, compared with $225.0 million during the same period last year. A $4.9 million operating loss was experienced, down from a loss of $14.6 million during last year's first six months. A net loss from discontinued operations of $14.3 million was incurred, compared with a net loss of $3.9 million in 1992 due primarily to an after-tax charge of $7.4 million in the first quarter of 1993 for the cumulative effect of the change in accounting principle resulting from the adoption of S.F.A.S. No. 106. Net income of $654.2 million was realized, compared with a net loss of $29.4 million in last year's first half. This increase was the result primarily of the extinguishment of liabilities subject to compromise of $757.3 million. Net cash provided by operating activities for the 1993 first six months was $25.6 million, compared with net cash used by operating activities in the same period last year of $9.9 million.
 Peter C. Browning, chairman and chief executive officer, said that the increase in revenues for the second quarter was due primarily to an approximate 10 percent increase in gypsum wallboard average selling prices. Browning said that gypsum wallboard sales volume for the 1993 second quarter remained level with 1992 at approximately 1.2 billion square feet. Compared with the first quarter of 1993, wallboard sales volume remained level while average selling prices increased approximately 5 percent. Browning noted that the operating loss for the second quarter was primarily the result of a $6.6 million increase in selling, general and administrative expenses due principally to an increase in the provision for doubtful accounts and an increase in net periodic postretirement benefit cost resulting from the adoption of S.F.A.S. No. 106. Browning also stated that the increase in net cash provided by operating activities was due to the previously mentioned increase in gypsum wallboard average selling prices.
 NATIONAL GYPSUM COMPANY
 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 FOR THE SECOND QUARTERS AND FIRST SIX MONTHS OF 1993 AND 1992
 Three Months Ended
 June 30
 1993 1992
 (thousands)
 Net Revenues $120,824 $111,585
 Cost of products sold 86,098 88,625
 Selling, general and administrative expenses 25,070 18,502
 Depreciation, depletion and amortization 10,571 11,074
 Operating loss (915) (6,616)
 Interest expense (contractual interest for
 1993--$36,469; 1992--$36,644) (732) (849)
 Other income (expense)--net(A) 23,652 881
 Bankruptcy expenses(B) 92,593 7,036
 Income tax benefit 38,458 4,207
 Loss from continuing operations (32,130) (9,413)
 Net loss of discontinued operations (net of
 applicable income tax benefit of $899 in
 1993 and $1,251 in 1992)(C) (2,127) (1,932)
 Extraordinary gain on extinguishment of
 liabilities subject to compromise (net of
 applicable income tax expense of $35,200)(D) 757,327 -
 Net income (loss) $723,070 $(11,345)
 Net cash provided (used) by operating activities $14,680 $127
 Six Months Ended
 June 30
 1993 1992
 (thousands)
 Net revenues $237,625 $224,980
 Cost of products sold 176,145 180,959
 Selling, general and administrative expenses 45,279 36,664
 Depreciation, depletion and amortization 21,112 21,952
 Operating loss (4,911) (14,595)
 Interest expense (contractual interest for
 1993--$72,991; 1992--$73,300) (1,517) (1,710)
 Other income (expense)--net(A) 25,444 1,760
 Bankruptcy expenses(B) 96,805 21,818
 Income tax benefit 41,216 10,857
 Loss from continuing operations (36,573) (25,506)
 Net loss of discontinued operations (net of
 applicable income tax benefit of $6,340 in
 1993 and $2,600 in 1992)(C) (14,275) (3,932)
 Extraordinary gain on extinguishment of
 liabilities subject to compromise (net of
 applicable income tax expense of $35,200)(D) 757,327 --
 Cumulative effect of change in accounting
 principle (net of applicable income tax
 benefit of $32,988)(E) (52,284) --
 Net income (loss) $654,195 $(29,438)
 Net cash provided (used) by operating activities $25,618 $(9,890)
 Notes:
 (A) Other income (expense) in 1993 includes a net casualty gain of $19.2 million resulting from the receipt of insurance proceeds from the loss in March 1993 of one of "old" National Gypsum Company's chartered vessels.
 (B) Bankruptcy expenses include the writedown of assets, the provision for allowed claims, bankruptcy-related professional fees and other items. During the second quarter of 1993, "old" National Gypsum Company recorded adjustments to writedown assets by $83.0 million for fresh-start reporting. Such adjustments included a $72.8 million writedown of net property, plant and equipment and a $17.1 million reduction of prepaid pension cost. During the first quarter of 1992, "old" National Gypsum Company recorded a provision for allowed claims of approximately $10 million to increase its estimate of the net liability subject to compromise for all asbestos-related claims.
 (C) Due to the provisions of "old" National Gypsum Company's confirmed Plan of Reorganization, effective July 1, 1993, regarding the disposition of The Austin Company, a wholly-owned engineering and construction service company of the "old" National Gypsum Company, the results of operations and cash flows related to Austin have been classified as discontinued operations.
 (D) An aftertax extraordinary gain of $757.3 million was recorded for the extinguishment of "old" National Gypsum Company's liabilities subject to compromise.
 (E) S.F.A.S. No. 106 requires accrual accounting for retiree benefit costs. The "old" National Gypsum previously expensed these costs as paid. Accordingly, the "old" company adopted S.F.A.S. No. 106 as of January 1, 1993 and elected immediate recognition of the postretirement transition obligation for continuing operations of approximately $52.3 million, after tax, which charge is reported as a change in accounting principle in "old" National Gypsum Company's statement of operations for the first quarter of 1993.
 -0- 9/9/93
 /CONTACT: Allan V. Cecil, V.P.-Corporate Communications and Investor Relations, National Gypsum Company, 704-365-7227/
 (NGCO)


CO: National Gypsum Company ST: North Carolina IN: CST SU: ERN

SB-DF -- CH003 -- 0135 09/09/93 08:51 EDT
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Date:Sep 9, 1993
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