Gypsum industry news

US: Continental Building Products (CBP) has announced its results for the third quarter that ended 30 September 2014. CBP's net sales grew by 8.6% year-on-year to US$114m, adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 32% year-on-year to US$33.7m and operating income was up from US$0.3m in the same period of 2013 to US$20.2m. Its wallboard sales volumes grew by 3.8% year-on-year to 590Mft² and sales prices rose by 6.3% year-on-year.

"Our focus on operational excellence and maximising our returns from our low cost base was evident in our third quarter results," said Ike Preston, CBP's CEO. "As we finish 2014 and look to the new year, we remain focused on realising the full potential of our business. We are confident that the long-term fundamentals for construction growth remain strong and we remain focused on delivering value to our customers while actively managing our costs and continuing to deploy our capital in a disciplined manner to drive shareholder value."

US: Continental Building Products (CBP) has announced that its secondary public offering of 7,000,000 shares of common stock, which was announced earlier this week, will be priced at US$14.75/share. All of the shares are being sold by its largest stockholder, an affiliate of Lone Star Funds. The underwriters have a 30-day option to purchase up to an additional 1,050,000 shares of common stock from the selling stockholder. The offering is expected to close on 25 November 2014.

US: Continental Building Products (CBP) has announced the launch of a secondary public offering of 7,000,000 shares of common stock to be offered by the company's largest stockholder, an affiliate of Lone Star Funds. The underwriters will have a 30-day option from the date of the offering to purchase up to an additional 1,050,000 shares of common stock from the selling stockholder. CBP will not receive any proceeds from the sale of the shares.

US: The Fifth Federal Reserve District member banks have elected CEO Tom Nelson to serve as a director of the Federal Reserve Bank of Richmond. His three-year term begins on 1 January 2015.

The Federal Reserve Bank of Richmond is one of 12 district banks that work with the Federal Reserve's Board of Governors to strengthen the economy and communities served by the banks. The Richmond bank includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia.

Nelson will be one of nine board directors of the Richmond institution. He has been chairman, president and CEO of National Gypsum since 1999. He also serves as a director of Belk Inc, Carolinas HealthCare System and Yum! Brands Inc.

US: Eagle Materials has reported its financial results for the second quarter of its 2015 fiscal year, which ended 30 September 2014. Second quarter earnings before interest and income taxes (EBIT) increased by 24% year-on-year to US$78.5m, as both second quarter sales volumes and sales prices improved in nearly all businesses.

As previously announced on 17 October 2014, Eagle entered into a definitive agreement to acquire CRS Proppants and its subsidiaries, including Great Northern Sand, an established supplier of high-quality northern white frac-sand to the energy industry. The cash purchase price of US$225m is subject to customary post-closing adjustments. The acquisition is expected to close during Eagle's third fiscal quarter, subject to receipt of required regulatory approvals.

Gypsum wallboard and paperboard reported second quarter operating earnings of US$45m, up by 22% from the same quarter of 2013. Improved wallboard net sales prices and increased wallboard and paperboard sales volumes were the primary drivers of the quarterly earnings increase. Wallboard and paperboard revenues for the second quarter totalled US$133m, an 11% increase from the same quarter of 2013. The revenue increase reflects higher average wallboard net sales prices and higher wallboard and paperboard sales volumes. Wallboard sales volumes for the quarter of 567Mft² are 2% higher than the same quarter of 2013.

US: USG has reported US$972m of sales for the third quarter of 2014, up by 5% from the same period in 2013. The company recorded a net loss of US$11m for the period, compared to a profit of US$23m in 2013. For the first nine months of 2014, sales were US$2.8m, a year-on-year increase of 4%. Profit grew by 82% to US$91m.

During the third quarter of 2014, USG reached an agreement in principle to settle all claims made in the direct and indirect purchaser class actions consolidated in the lawsuit, In re: Domestic Wallboard Antitrust Litigation, MDL No. 2437, pending in the United States District Court for the Eastern District of Pennsylvania. Pursuant to the agreement in principle to settle, which is subject to finalisation of a settlement agreement and court approval, USG will make a payment of US$48m. USG strongly denies any wrong-doing for the claims made in the lawsuits, but settled to avoid the expense, distraction and risk of further litigation. USG expects to make this cash payment within the next 12 months, while recording the US$48m charge in the third quarter of 2014.

"It is very disappointing to settle this lawsuit when we strongly believe we have done nothing wrong," said James Metcalf, president and CEO of USG. "However, we have to be realistic about the cost and risk a lawsuit like this creates for USG."

US: Harrison Gypsum LLC, a producer of gypsum and plaster products, has acquired the Gravel Company LLC, a producer of aggregate materials for the construction industry. Both companies are based in the US. The acquisition will allow Harrison Gypsum to expand its operations in the Eagle Ford region in South Texas.

US: Louisville's Charah Inc uses by-product gypsum from a local coal plant to make a fertiliser, SUL4R-PLUS, which is used by domestic and international farmers. Charah has now announced plans to expand its operations as demand grows.

In April 2013, Charah opened a US$14m plant at Mill Creek Generating Station in Louisville to produce SUL4R-PLUS after recognising a market for it in the agricultural industry. The sulphur content in local soil has fallen significantly in recent years as high-yield farming has pulled more of it out of the ground.

Charah gets gypsum powder from the Mill Creek facility and makes it into fertiliser pellets using several additives. It then sells the pellets to distributors. SUL4R-PLUS is now used in several states, including Texas, Wisconsin, Florida and other countries, including Canada and the Dominican Republic.

Due to its popularity, company officials have stated that they plan to expand operations with the introduction of a second production line at the Mill Creek production facility. In the future, it could also build production lines at other power plants it works with around the country.

US: USG Sheetrock® Brand UltraLight Gypsum Base Imperial is now being manufactured at six USG plants. The panel is the sixth product in USG's lightweight wallboard portfolio and will be available at retail, specialty dealer and pro-dealer distributors nationwide in September 2014. The launch extends USG's position as the industry's leader in lightweight innovation. The gypsum base panel is used when a project calls for a plaster veneer finish, and is up to 30% lighter than the current ½inch USG Imperial® Gypsum Base panel. The traditional panel will be discontinued upon the launch of the new panel.

US: Continental Building Products (CBP) has announced its results for the second quarter of 2014, which ended on 30 June 2014. Net sales increased by 3.2% to US$103m and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to US$26.7m from US$27.4m for the same period of 2013.

"During the second quarter we continued to grow our net sales, generate significant cash flow and strengthen our balance sheet," said Ike Preston, CBP's CEO. "Excluding the impact of higher freight costs, our average mill net pricing remained firm compared to the first quarter 2014, as expected. Our overall modest wallboard demand was supported by higher shipments in our US operations that grew by 3.1% compared to 2013. As we look to the remainder of 2014, we remain confident in our ability to maintain disciplined cost control and generate additional cash flow as demand improves."

Average gypsum wallboard prices rose by 4.1% during the quarter. Wallboard volumes rose slightly to 525Mft² compared to 523Mft² in the same quarter of 2013, with a 3.1% increase in US volumes mostly offset by lower volumes in Canada. The second quarter gross profit was significantly impacted by purchase accounting from the acquisition by Lone Star. Gross profit was US$20.9m, down compared to US$25.7m in the same quarter of 2013, primarily as a result of US$7.8m in higher depreciation and amortisation costs from the acquisition.

Operating income was US$12.8m in the second quarter of 2014, down from US$17.2m in the prior year quarter, largely attributable to the impact of higher depreciation and amortisation resulting from the Lone Star acquisition. Net income was US$4.7m for the second quarter of 2014, compared to US$16.7m in the prior year quarter.