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USG CORP. REPORTS HIGHER SALES VOLUME FOR FIRST QUARTER 1992; NET LOSS ATTRIBUTED TO LOW PRICES, HIGH INTEREST EXPENSE

 USG CORP. REPORTS HIGHER SALES VOLUME FOR FIRST QUARTER 1992;
 NET LOSS ATTRIBUTED TO LOW PRICES, HIGH INTEREST EXPENSE
 CHICAGO, April 23 /PRNewswire/ -- USG Corp. (NYSE: USG) today reported a first quarter 1992 operating profit of $20 million on net sales of $426 million. After applying interest expense, a net loss of $50 million, or $0.89 per share, was incurred.
 These results compare with first quarter 1991 operating profit of $32 million, net sales of $416 million and a net loss of $36 million, or $0.66 per share.
 Net sales for the first quarter of 1992 increased 2.4 percent over the prior-year quarter primarily due to improved volume for most gypsum and gypsum-related product lines of the corporation. This trend reflects the recent improvement in the level of housing starts. However, USG's overall net sales were tempered by an almost $10 per thousand-square-foot decline in domestic gypsum wallboard selling prices compared to the first quarter of 1991 and lower net sales for interior systems. Operating profit declined by $12 million primarily because of lower selling prices for gypsum wallboard.
 Commenting on the first quarter results, USG Chairman Eugene B. Connolly said, "We believe that we have reached the bottom of the housing construction cycle. If we're right, 1991 marked the end of the longest 'down' cycle the residential construction industry has endured in over half a century. While the results for the corporation are mixed," Connolly continued, "we are encouraged by signs of improved construction activity."
 Connolly said, however, that USG remains cautious. "First, some of the volume improvement in the first quarter was undoubtedly due to the mild winter and publicity about President Bush's proposed tax credit for first-time home buyers. Thus, a portion of the improvement may be temporary. Second, nonresidential construction activity, which primarily impacts our interiors segment, has continued to decline. Third, if a recovery has begun in the construction industry, we are beginning from an unusually low base in terms of industry wallboard prices and volume. Finally, we, along with many industry experts, do not anticipate that the recovery will be quick, but rather slow and sustained."
 USG's net loss for the first quarter of 1992 reflects the decline in operating profit and the continued high level of interest expense associated with the corporation's capital structure. USG continues its efforts to restructure its debt and during the first quarter met regularly with the subordinated bondholder committees and the bank steering committee.
 As previously announced, the subordinated bondholder committees have indicated that they are prepared to recommend a transaction in which all the subordinated debt would be exchanged entirely for common stock, provided that certain amendments are made to the existing bank credit agreement.
 Connolly said, "In late March, we met with the full bank syndicate and reviewed the proposed bank term sheets that had been prepared by the bank steering committee and the subordinated bondholder committees. In order to advance the discussions, USG then presented a company sponsored terms sheet that we believe bridges the gap between the two proposals.
 "We believe that we are within striking distance of a consensual resolution, and remain optimistic that a deal can be implemented in 1992," he continued. "We are pleased by the continued support exhibited by all key stakeholders including suppliers, employees and customers. We remain committed to the maintenance of liquidity to support our operations, and our cash position as of March 31, 1992 -- excluding the $85 million of net proceeds from the sale of DAP Inc. -- remained strong at $160 million."
 USG is a Fortune 250 building products manufacturer whose subsidiaries are market leaders in gypsum wallboard, joint compound and related gypsum products, ceiling tile and grid, and building products distribution.
 USG CORP.
 CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
 (In millions of dollars except per share figures)
 Three Months Ended
 March 31, 1992 1991
 Net sales $426 $416
 Gross profit 71 80
 Selling and administrative expenses 51 48
 Operating profit 20 32
 Interest expense, net 83 78
 Other expense, net (2) 2
 Taxes on income/(income tax benefit) (11) (13)
 Loss from continuing operations (50) (35)
 Loss from discontinued operations,
 net of taxes - (1)
 Net loss (50) (36)
 Loss Per Common Share:
 Continuing operations (0.89) (0.63)
 Discontinued operations - (0.03)
 Net loss (0.89) (0.66)
 Average no. of shares outstanding 55,784,995 55,260,520
 -0- 4/23/92
 /CONTACT: USG communications department, 312-606-4124; or USG investor relations, 312-606-5594/
 (USG) CO: USG Corp. ST: Illinois IN: CST SU: ERN


AH -- NY071 -- 1831 04/23/92 11:35 EDT
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Date:Apr 23, 1992
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