STOCK OF THE WEEK: US Gypsum

Press Release February 2005: Innovative New SECUROCK Brand Roof Board From USG Offers Exceptional Bond Strength and Other Benefits; Experts Confirm New Product Can Enhance Roof Membrane's Performance.

United States Gypsum Company (NYSE: USG) http://www.usg.com/ a leader in building products announced in February the introduction of SECUROCK(TM) http://www.usg.com/securock Brand Roof Board, a distinctive new roof cover board option for low-slope commercial roofing applications. The product's advanced fiber-reinforced technology provides architects, designers, building owners and roofing contractors numerous products with superior performance benefits compared to traditional fiberglass roof boards, whose face layers can de-laminate over time and generate contractor callbacks. Easy to install and handle, the roof board provides outstanding wind uplift performance, fire performance, moisture and mold resistance and versatility.

SECUROCK Roof Board offers architects, designers, building owners, roofing contractors and other construction professionals numerous product and installation advantages - all of which can contribute to a roof's long-term performance.

"Our tests confirm that SECUROCK Roof Board actually enhances bond strength, while providing excellent durability, wind uplift resistance and versatility," said Colin Murphy, president of Exterior Research and Design, http://www.exdesign.com a prominent Seattle consulting firm that conducts forensic analysis, design and testing of building envelope components and systems. "We're also finding that the roof board's unique gypsum fiber technology and uniform composition make it much less likely to de-laminate, which can be an issue with competitive products."

The new product line is Eco-friendly and has earned the "Green Cross" certificate from Scientific Certification Systems (SCS), http://www.scscertified.com/ the nation's leading national testing company that evaluates manufacturers' environmental claims. In addition, the panels are an excellent option in LEED (Leadership in Energy and Environmental Design) hhtp:/www.usgbc.org/LEED/ Green Building Rating System(TM) applications.

For more than 100 years, Chicago-based United States Gypsum Company has been a leader in producing innovative products and systems to build the environments in which we live, work and play. As the inventor of wallboard and ceiling tile, USG created North America's building materials industry. Their products are used in everything from major commercial developments and residential housing to simple home improvement projects. Their flagship brands include SHEETROCK® Brand gypsum panels and DUROCK® Brand cement board, which are recognized around the world.

USG is the world's leading producer of gypsum wallboard, joint compound and a vast array of related products for the construction and remodeling industries. They are also the global leader in the manufacture of ceiling suspension systems and are recognized as the premier acoustical panel and specialty ceiling systems innovator. Their family of products provides creative building solutions that set new standards for productivity and efficiency, helping contractors and architects deliver high quality and innovative designs.

USG, through its subsidiary L&W Supply, is also the nation's largest distributor of drywall and related building products. L&W serves the professional contractor through a network of nearly 200 locations and strives to be their preferred source for all quality products and services they need to complete their projects on time and on budget.

Some 14,000 employees working in more than 30 countries are dedicated to helping their customers and partners achieve success. They strive to reach the highest levels of customer satisfaction and quality in everything they do. Their steadfast commitment to the company's core business beliefs-integrity, safety, performance, quality, diversity, innovation and service-have helped them become the $3 billion Fortune 500 company they are today.

How did they get started?
One hundred years ago, the gypsum business in North America was fragmented into regional markets. Then, in 1902, 30 independent gypsum rock and plaster manufacturing companies merged to form the United States Gypsum Company, consolidating their resources across the continent. The following year, United States Gypsum Company developed its first building product, Pyrobar, a gypsum-based, fireproof tile. The next step toward the wallboard we know today was the invention of Sackett Board, a panel made of multiple layers of plaster and paper. United States Gypsum Company purchased the Sackett Plaster Board Company in 1909, entering the gypsum board market.

The early 1980’s brought recession and devastated USG's bottom line which led to a restructuring of the company. In 1984, USG Corporation was formed as a holding company–a reverse merger in which United States Gypsum Company became one of just nine operating subsidiaries. Through a renewed commitment to research and development and acquisition, USG continued to expand into and lead new markets. DUROCK Cement Board offered new water construction solutions. And the acquisition of DONN Incorporated and its ceiling suspension systems positioned USG Interiors as the only company to offer complete pre-designed and fully integrated ceiling systems.

The early 1990's saw a return to a solid bottom line and continued innovation. A new headquarters building and the USG Interiors Solutions Center, both in downtown Chicago, showcased USG products and innovations. In the late 1990s, USG developed a new gypsum/cellulose product family called FIBEROCK Brand Panels.

What’s Ahead?
By the year 2010, according to some industry experts, significantly more new residential construction will be factory-built. The steadily increasing use of manufactured, modular, and panelized homes means both new challenges and new opportunities for builders. Pinnacle Building Systems of Bristol, Indiana, uses UPG products. Vice President of Manufacturing Pat O’Brien is enthusiastic about both the quality of SHEETROCK Brand Paper Faced Metal Bead and Trim and the service provided by United States Gypsum Company. “We sent one home all the way to Wyoming,” he notes, “and there was only one crack.” He also says that follow-up and monitoring are as important as the quality of the bead. “USG didn’t just sell us the product and walk away,” says O’Brien. “They’ve been there whenever we’ve needed them.”

As USG enters the 21st Century, new markets and opportunities present themselves for expansion and innovation. With the future being shaped by the Internet and e-commerce, new partnerships, and emerging markets, USG goal is to continue to grow and lead the building materials industry. USG maintains one of the largest research and development efforts in the building industry today. The firms laboratory facility (located in the Chicago suburb of Libertyville, IL) is staffed by over 140 employees who bring a wide variety of skills to the task of developing and improving building materials and processes.

It was very interesting touring USG's web site. The renovations and/or new construction USG has been involved in were fascinating. The 105 year old Texas State Capital buildings renovation, the Navy’s new boot camp in Illinois, the 20,000 multifunctional Kiel Center, home of the St. Louis Blues hockey team and my favorite- new schools in South Haven, MS saving money by using abuse-resistant wall panels from USG instead of expensive masonry.

How do you Advertise USG products? NASCAR of course
The 2005 season proves to be an exciting year for USG Racing. USG has joined the #17 DEWALT and Roush Racing team with 2003 NASCAR NEXTEL Cup Series Champion Matt Kenseth behind the wheel. "USG's new NASCAR team program is an alliance of champions," said Julian Francis, Vice President, Marketing, USG Building Systems. "We're affiliated with a championship driver in Matt Kenseth, a championship team in DEWALT Racing, a championship organization in Roush Racing and a championship motor sports sanctioning body in NASCAR. It is only fitting that USG SHEETROCK®, a championship brand in the building industry, has positioned itself with a strategic alliance to target our customers. This is an exciting time for USG Racing and we're looking forward to a thrilling 2005 season."

Financial Outlook
The only loose “board” I could fine in the USG Corporation is when they filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code on June 25, 2001. This action was taken to resolve asbestos claims in a fair and equitable manner, protect the long-term value of the businesses and maintain their market leadership positions.

USG had a 52 week low on 5/10/04 @ $12.30 and a 52 week high on 12/30/04 @ $41.67. Today it trades at $32.11 On February 1, 2005 USG Corporation reported fourth quarter 2004 net sales of $1.2 billion and net earnings of $85 million. Net sales and net earnings increased $242 million and $39 million, respectively, compared with the fourth quarter last year.

As usual the best stock market buys are hard to buy; good buys often have serious flaws. Although the asbestos problem has been around for a long time it is still a present danger. Johns Manville, Owens Corning, Halliburton and many other companies have been damaged by the potential of virtually unlimited law suits.

Bill Frist, Senate Majority Leader, has openly stated that he will get a bill through to "solve" the asbestos problem. Companies such as USG will pay dearly under the planned bill but the good result will be a cap on total liability. It is time for America to get past the drag on our economy created by excessive liability awards. The system has gradually moved to one in which the lawyers get the most benefit, the companies pay dearly and the few who were harmed the worst are lucky to win multi-million dollar awards. All the while, thousands of others who were injured settle for small sums or die before any global solution is found.

Many folks are afraid of the asbestos issue and the possibility that the housing boom is about to bust. The good news for USG is that baby boomers and echo boomers are still buying homes at the same time that industrial building is picking up. The roof panels mentioned in the press release are used in industrial applications. Buy USG as one of a portfolio of 15 stocks or more and sleep well. We will add this stock to our STOCK OF THE WEEK portfolio at tomorrow's opening price.

STOCK OF THE WEEK: US Gypsum

Press Release February 2005: Innovative New SECUROCK Brand Roof Board From USG Offers Exceptional Bond Strength and Other Benefits; Experts Confirm New Product Can Enhance Roof Membrane's Performance.

United States Gypsum Company (NYSE: USG) http://www.usg.com/ a leader in building products announced in February the introduction of SECUROCK(TM) http://www.usg.com/securock Brand Roof Board, a distinctive new roof cover board option for low-slope commercial roofing applications. The product's advanced fiber-reinforced technology provides architects, designers, building owners and roofing contractors numerous products with superior performance benefits compared to traditional fiberglass roof boards, whose face layers can de-laminate over time and generate contractor callbacks. Easy to install and handle, the roof board provides outstanding wind uplift performance, fire performance, moisture and mold resistance and versatility.

SECUROCK Roof Board offers architects, designers, building owners, roofing contractors and other construction professionals numerous product and installation advantages - all of which can contribute to a roof's long-term performance.

"Our tests confirm that SECUROCK Roof Board actually enhances bond strength, while providing excellent durability, wind uplift resistance and versatility," said Colin Murphy, president of Exterior Research and Design, http://www.exdesign.com a prominent Seattle consulting firm that conducts forensic analysis, design and testing of building envelope components and systems. "We're also finding that the roof board's unique gypsum fiber technology and uniform composition make it much less likely to de-laminate, which can be an issue with competitive products."

The new product line is Eco-friendly and has earned the "Green Cross" certificate from Scientific Certification Systems (SCS), http://www.scscertified.com/ the nation's leading national testing company that evaluates manufacturers' environmental claims. In addition, the panels are an excellent option in LEED (Leadership in Energy and Environmental Design) hhtp:/www.usgbc.org/LEED/ Green Building Rating System(TM) applications.

For more than 100 years, Chicago-based United States Gypsum Company has been a leader in producing innovative products and systems to build the environments in which we live, work and play. As the inventor of wallboard and ceiling tile, USG created North America's building materials industry. Their products are used in everything from major commercial developments and residential housing to simple home improvement projects. Their flagship brands include SHEETROCK® Brand gypsum panels and DUROCK® Brand cement board, which are recognized around the world.

USG is the world's leading producer of gypsum wallboard, joint compound and a vast array of related products for the construction and remodeling industries. They are also the global leader in the manufacture of ceiling suspension systems and are recognized as the premier acoustical panel and specialty ceiling systems innovator. Their family of products provides creative building solutions that set new standards for productivity and efficiency, helping contractors and architects deliver high quality and innovative designs.

USG, through its subsidiary L&W Supply, is also the nation's largest distributor of drywall and related building products. L&W serves the professional contractor through a network of nearly 200 locations and strives to be their preferred source for all quality products and services they need to complete their projects on time and on budget.

Some 14,000 employees working in more than 30 countries are dedicated to helping their customers and partners achieve success. They strive to reach the highest levels of customer satisfaction and quality in everything they do. Their steadfast commitment to the company's core business beliefs-integrity, safety, performance, quality, diversity, innovation and service-have helped them become the $3 billion Fortune 500 company they are today.

How did they get started?
One hundred years ago, the gypsum business in North America was fragmented into regional markets. Then, in 1902, 30 independent gypsum rock and plaster manufacturing companies merged to form the United States Gypsum Company, consolidating their resources across the continent. The following year, United States Gypsum Company developed its first building product, Pyrobar, a gypsum-based, fireproof tile. The next step toward the wallboard we know today was the invention of Sackett Board, a panel made of multiple layers of plaster and paper. United States Gypsum Company purchased the Sackett Plaster Board Company in 1909, entering the gypsum board market.

The early 1980’s brought recession and devastated USG's bottom line which led to a restructuring of the company. In 1984, USG Corporation was formed as a holding company–a reverse merger in which United States Gypsum Company became one of just nine operating subsidiaries. Through a renewed commitment to research and development and acquisition, USG continued to expand into and lead new markets. DUROCK Cement Board offered new water construction solutions. And the acquisition of DONN Incorporated and its ceiling suspension systems positioned USG Interiors as the only company to offer complete pre-designed and fully integrated ceiling systems.

The early 1990's saw a return to a solid bottom line and continued innovation. A new headquarters building and the USG Interiors Solutions Center, both in downtown Chicago, showcased USG products and innovations. In the late 1990s, USG developed a new gypsum/cellulose product family called FIBEROCK Brand Panels.

What’s Ahead?
By the year 2010, according to some industry experts, significantly more new residential construction will be factory-built. The steadily increasing use of manufactured, modular, and panelized homes means both new challenges and new opportunities for builders. Pinnacle Building Systems of Bristol, Indiana, uses UPG products. Vice President of Manufacturing Pat O’Brien is enthusiastic about both the quality of SHEETROCK Brand Paper Faced Metal Bead and Trim and the service provided by United States Gypsum Company. “We sent one home all the way to Wyoming,” he notes, “and there was only one crack.” He also says that follow-up and monitoring are as important as the quality of the bead. “USG didn’t just sell us the product and walk away,” says O’Brien. “They’ve been there whenever we’ve needed them.”

As USG enters the 21st Century, new markets and opportunities present themselves for expansion and innovation. With the future being shaped by the Internet and e-commerce, new partnerships, and emerging markets, USG goal is to continue to grow and lead the building materials industry. USG maintains one of the largest research and development efforts in the building industry today. The firms laboratory facility (located in the Chicago suburb of Libertyville, IL) is staffed by over 140 employees who bring a wide variety of skills to the task of developing and improving building materials and processes.

It was very interesting touring USG's web site. The renovations and/or new construction USG has been involved in were fascinating. The 105 year old Texas State Capital buildings renovation, the Navy’s new boot camp in Illinois, the 20,000 multifunctional Kiel Center, home of the St. Louis Blues hockey team and my favorite- new schools in South Haven, MS saving money by using abuse-resistant wall panels from USG instead of expensive masonry.

How do you Advertise USG products? NASCAR of course
The 2005 season proves to be an exciting year for USG Racing. USG has joined the #17 DEWALT and Roush Racing team with 2003 NASCAR NEXTEL Cup Series Champion Matt Kenseth behind the wheel. "USG's new NASCAR team program is an alliance of champions," said Julian Francis, Vice President, Marketing, USG Building Systems. "We're affiliated with a championship driver in Matt Kenseth, a championship team in DEWALT Racing, a championship organization in Roush Racing and a championship motor sports sanctioning body in NASCAR. It is only fitting that USG SHEETROCK®, a championship brand in the building industry, has positioned itself with a strategic alliance to target our customers. This is an exciting time for USG Racing and we're looking forward to a thrilling 2005 season."

Financial Outlook
The only loose “board” I could fine in the USG Corporation is when they filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code on June 25, 2001. This action was taken to resolve asbestos claims in a fair and equitable manner, protect the long-term value of the businesses and maintain their market leadership positions.

USG had a 52 week low on 5/10/04 @ $12.30 and a 52 week high on 12/30/04 @ $41.67. Today it trades at $32.11 On February 1, 2005 USG Corporation reported fourth quarter 2004 net sales of $1.2 billion and net earnings of $85 million. Net sales and net earnings increased $242 million and $39 million, respectively, compared with the fourth quarter last year.

As usual the best stock market buys are hard to buy; good buys often have serious flaws. Although the asbestos problem has been around for a long time it is still a present danger. Johns Manville, Owens Corning, Halliburton and many other companies have been damaged by the potential of virtually unlimited law suits.

Bill Frist, Senate Majority Leader, has openly stated that he will get a bill through to "solve" the asbestos problem. Companies such as USG will pay dearly under the planned bill but the good result will be a cap on total liability. It is time for America to get past the drag on our economy created by excessive liability awards. The system has gradually moved to one in which the lawyers get the most benefit, the companies pay dearly and the few who were harmed the worst are lucky to win multi-million dollar awards. All the while, thousands of others who were injured settle for small sums or die before any global solution is found.

Many folks are afraid of the asbestos issue and the possibility that the housing boom is about to bust. The good news for USG is that baby boomers and echo boomers are still buying homes at the same time that industrial building is picking up. The roof panels mentioned in the press release are used in industrial applications. Buy USG as one of a portfolio of 15 stocks or more and sleep well. We will add this stock to our STOCK OF THE WEEK portfolio at tomorrow's opening price.

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