Johns Manville Reports Record Second Quarter Results

DENVER (PROTEXT) - Johns Manville Corporation (NYSE: JM) todayreported underlying net income of $80.4 million, or 50 cents pershare, the highest for any quarter in the Company's history.Chairman and CEO Jerry Henry stated, "these results reflectcontributions from our acquisitions, strong demand and solid costperformance in most business segments, and a lower tax rateresulting from the share repurchase and debt prepayment program."Underlying net income was 92 percent above underlying net incomein the second quarter of 1998. Reported net income was $74.6million, or 46 cents per share, in the second quarter of 1999reflecting a net extraordinary loss of $5.8 million on theprepayment of debt. Reported net income in the second quarter of1998 was $33.2 million, or 20 cents per share. Net sales increased 26 percent in the second quarter of 1999to $559 million, compared with $445 million in the second quarterof 1998. Acquisitions contributed approximately $70 million tothe sales increase in the second quarter, and the remainder ofthe increase was driven by continued sold-out conditions andimproved pricing in building insulation and strong volumes incommercial roofing and mats and fibers. Income from operationsincreased 53 percent to $99.2 million in the second quarter of1999, compared with underlying income from operations of $65million in the same period last year. "We are very pleased with the positive momentum we'veestablished in the first half of 1999, and I am proud of ourteam's commitment to deliver top-line growth, increased marginsand strong cash flows," said Jerry Henry. "Building insulationproduced impressive results due to improved pricing, volumes andproductivity, and we continue to add increments of capacity tomeet increasing demand in this business. Roofing demand was alsostrong in the second quarter. Our Engineered Products segmentcontinues to produce very positive results from the spunbondacquisition, which were somewhat offset by continued weakness inEuropean markets and our filtration business. Looking forward,economic strength in North America supports good product demandand suggests that Johns Manville will have another record year." On July 7, 1999, Johns Manville completed its previouslyannounced repurchase of common stock from its majorityshareholder, the Manville Personal Injury Settlement Trust(Trust). JM purchased 12.2 million shares at a price of $13.675per share, reflecting the average of the New York Stock Exchangeclosing price for the 20 trading days from June 8 through July 6,1999. As a result of the repurchase, Johns Manville now has 147.2million common shares outstanding, of which the Trust ownsapproximately 77 percent. In addition, on June 30, 1999, JohnsManville prepaid bonds payable to the Trust in the amount of$33.2 million to settle its last remaining debt obligationresulting from the company's 1988 reorganization. "These transactions increase shareholder value and, at thesame time, create a tax deduction, which lowers JM's cash taxesand effective tax rate," said Mr. Henry. "We expect thetransactions will increase 1999 underlying earnings byapproximately 31 cents per share." As a result of the share buyback in July, the company'seffective tax rate for the first six months of 1999 wasapproximately 22 percent, compared with 29 percent in 1998. JohnsManville receives a tax deduction and a related reduction in itseffective tax rate when the Trust distributes proceeds derivedfrom its ownership of company stock to a settlement fund. JohnsManville benefited from stock sale proceeds during both years. Net sales for the first six months of 1999 were $1.1 billion,26 percent higher than $835 million in the same period last year.Income from operations was $164.2 million, up 49 percent fromunderlying income from operations of $110.1 million in 1998.First half reported net income was $112.3 million, or 69 centsper share, up 30 percent from net income of $86.7 million, or 53cents per share, in the first half of 1998. Underlying net incomefor the first half totaled $118.1 million, or 73 cents per share,compared with $68 million, or 42 cents per share, in the sameperiod of 1998. Segment Review Insulation The Insulation segment, which includes building andcommercial/industrial insulations, reported net sales of $203million in the second quarter, up 17 percent compared with $173million in the second quarter of 1998. This increase wasprimarily driven by improved pricing and strong volumes inbuilding insulation, with particular strength in retail,residential contractor and commercial construction markets. Tocontinue to satisfy demand, Johns Manville has increasedproduction at its McPherson, Kansas plant, adding a secondbuilding insulation module to an existing line. This expansionwas completed in the first quarter. The company plans to executea similar expansion at its Winder, Georgia facility in 2000 tomeet strong demand for its line of building insulation products.Income from operations in Insulation increased 92 percent in thesecond quarter to $44.5 million, from $23.2 million in thecomparable period last year, driven by improved buildinginsulation pricing, higher volumes and increased productivity. First half net sales in Insulation increased 17 percent to$396 million from $338 million in the first half of 1998. Incomefrom operations year-to-date in Insulation doubled to $83.6million, from $41.7 million in 1998, primarily reflecting theimproved pricing environment, strong volume growth andproductivity improvements in building insulation. Roofing Systems The Roofing Systems segment generated higher sales in thesecond quarter of 1999, up 10 percent to $162 million, from $147million in second quarter last year. Sales increases in thisbusiness segment continue to be driven by strong demand acrossthe industry and higher volumes due in part to recentacquisitions. Income from operations in Roofing increased ninepercent in the second quarter of 1999 to $16.8 million from $15.4million in the comparable period of 1998, but was somewhat offsetby lower net pricing principally in polyiso roofing insulationyear-to-year. First half net sales in Roofing Systems increased 12 percentto $284 million from $253 million in the comparable period of1998. Income from operations for the first six months of 1999 was$21.5 million, a nine percent increase compared with $19.7million in the same period last year. Increases were driven byimproved volumes and operating efficiencies, which were somewhatoffset by pricing pressures in the first six months of 1999. Engineered Products The Engineered Products segment, which includes mats andfibers, glass fabrics and air filtration products, reported netsales of $205 million in the second quarter of 1999, a 56 percentincrease compared with $131 million in the second quarter of1998. Improved sales were largely driven by contributions fromthe spunbond acquisition, completed on January 1, 1999. Inaddition, JM's North American fiber glass mats and fibersbusiness is experiencing strong demand, which added to the salesgrowth. Income from operations for the quarter in the EngineeredProducts Group was $37.9 million, up 43 percent from $26.4million in the same period last year. Despite better-than-expected earnings contribution from the spunbond acquisition andstrong domestic roofing mats and fibers sales, gains in incomefrom operations in Engineered Products were partially offset bycontinued weakness in JM's European and filtration businesses,due to soft economic markets in Europe and sluggish demand forclean room builds in Asia. First half net sales in Engineered Products increased 54percent to $395 million from $257 million in the comparableperiod of 1998, primarily as a result of sales contribution fromthe spunbond acquisition. Income from operations for the firstsix months of 1999 was $59.1 million, a 21 percent increasecompared with $48.7 million in the same period last year. Incomegains were not consistent with sales growth in this periodlargely due to soft European markets and continued weakness inthe filtration business. Engineered Products' results were alsoadversely affected in the first quarter from a scheduled furnacerebuild and one-time costs associated with the spunbondacquisition. The furnace rebuild has now been successfullycompleted and is fully operational, helping the company torespond to strong demand for its North American mats and fibersproduct lines. Johns Manville is a leading manufacturer and marketer ofpremium-quality building products. The 141-year-old Denver-basedcompany had sales of $1.8 billion in 1998. Johns Manville employsapproximately 9,200 people and operates 54 manufacturingfacilities in North America, Europe and China. Additionalinformation can be found at www.jm.com. This news release contains "forward looking statements" withinthe meaning of the federal securities laws with respect to thecompany's financial results and its future operations and, assuch, concern matters that are not historical facts. Thesestatements are subject to the risks and uncertainties that couldcause actual results to differ materially from those expressed insuch statements. Important factors that could cause suchdifferences include general U.S. and international economicconditions, particularly those affecting the commercial andresidential construction markets, such as the general rate ofinflation, interest rates, employment rates, and overall consumerconfidence; demand for JM products; overall capacity levels inthe industry; and the overall competitive environment in whichthe company operates; as well as other factors discussed in thecompany's periodic reports on Forms 10-Q and 10-K that are filedwith the Securities and Exchange Commission and are incorporatedherein by this reference.

JOHNS MANVILLE CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(Thousands of dollars except per share amounts)

(Unaudited)

Three Months

Ended June 30,

1999

1998 Net Sales

$558,852 $445,224 Cost of Sales

396,953

325,376 Selling, General and Administrative

46,261

45,042 Research, Development and Engineering

10,373

8,282 Other Income (Expense), net (Note a)

(6,089)

34,464 Income from Operations

99,176

100,988 Interest Income

536

1,587 Interest Expense

7,271

9,919 Income before Income Taxes and Extraordinary Item

92,441

92,656 Income Tax Expense (Note b)

12,046

27,688 Income before Extraordinary Item

80,395

64,968 Extraordinary Loss on Early Extinguishment of Debt, net of tax (Note c)

(5,758) (31,754) Net Income

$ 74,637 $ 33,214

Three Months

Ended June 30, EARNINGS PER COMMON SHARE

1999

1998 Basic: Income before Extraordinary Item

$ .51

$ .41 Extraordinary Loss on Early Extinguishment of Debt, net of tax (Note c)

(.04)

(.20) Net Income

$ .47

$ .21 Diluted: Income before Extraordinary Item

$ .50

$ .40 Extraordinary Loss on Early Extinguishment of Debt, net of tax (Note c)

(.04)

(.20) Net Income

$ .46

$ .20

JOHNS MANVILLE CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(Thousands of dollars except per share amounts)

(Unaudited)

Six Months

Ended June 30,

1999

1998 Net Sales

$1,054,610 $834,560 Cost of Sales

756,882 618,964 Selling, General and Administrative

100,012 87,942 Research, Development and Engineering

20,087 15,897 Other Income (Expense), net (Note a)

(13,446) 34,361 Income from Operations

164,183 146,118 Interest Income

1,164 3,452 Interest Expense

14,915 21,977 Income before Income Taxes, Extraordinary Item and Cumulative Effect of Accounting Change

150,432 127,593 Income Tax Expense (Note b)

32,343 36,595 Income before Extraordinary Item and Cumulative Effect of Accounting Change

118,089 90,998 Extraordinary Loss on Early Extinguishment of Debt, net of tax (Note c)

(5,758) (31,754) Cumulative Effect of a Change in Accounting for Furnace Rebuilds, net of tax (Note d)

27,409 Net Income

$ 112,331 $86,653

Six Months

Ended June30, EARNINGS PER COMMON SHARE

1999 1998 Basic: Income before Extraordinary Item and Cumulative Effect of Accounting Change

$ .74

$.57 Extraordinary Loss on Early Extinguishment of Debt, net of tax (Note c)

(.04) (.20) Cumulative Effect of a Change in Accounting for Furnace Rebuilds, net of tax (Note d) .17 Net Income

$ .70

$.54 Diluted: Income before Extraordinary Item and Cumulative Effect of Accounting Change

$ .73

$.56 Extraordinary Loss on Early Extinguishment of Debt, net of tax (Note c)

(.04) (.20) Cumulative Effect of a Change in Accounting for Furnace Rebuilds, net of tax (Note d) .17 Net Income

$ .69

$.53

JOHNS MANVILLE CORPORATION

CONDENSED CONSOLIDATED BUSINESS SEGMENTS

(Thousands of dollars)

(Unaudited)

Three Months

Ended June 30, NET SALES

1999

1998 Insulation

$ 203,020 $173,226 Roofing Systems

162,122 147,346 Engineered Products

204,579 131,348 Eliminations

(10,869) (6,696)

$ 558,852 $ 445,224 INCOME FROM OPERATIONS Insulation

$ 44,538 $ 23,181 Roofing Systems

16,766 15,381 Engineered Products

37,872 26,438 Corporate and Eliminations (Note a) 35,988

$ 99,176 $ 100,988

Six Months

Ended June 30, NET SALES

1999 1998 Insulation

$ 396,002 $337,605 Roofing Systems

283,960 252,769 Engineered Products

395,127 257,200 Eliminations

(20,479) (13,014)

$1,054,610 $ 834,560 INCOME FROM OPERATIONS Insulation

$ 83,643 $ 41,690 Roofing Systems

21,472 19,748 Engineered Products

59,068 48,692 Corporate and Eliminations (Note a) 35,988

$ 164,183 $ 146,118

(Millions ofdollars)

June 30, December31, Other Information:

1999 1998 Cash and Marketable Securities

$ 35.1

$16.5 Total Debt

499.7 591.9

Six Months

Ended June 30,

1999 1998 Depreciation and Amortization

$57.4 $46.4 Capital Expenditures (excluding acquisitions)

65.0 52.4

JOHNS MANVILLE CORPORATION

Notes to Condensed Consolidated Statement of Income

(Unaudited) (a) The Company sold its five percent net smelter royalty oncertain metals produced by the Stillwater Mining Company for cashresulting in other income of $36 million in the second quarter of1998. The after tax gain on this transaction was approximately$23.1 million. (b) The Company's year-to-date effective tax rates wereapproximately 22 percent in 1999 and 29 percent in 1998. TheCompany receives a tax deduction and a related reduction in itseffective tax rate for all payments the Company makes to theManville Personal Injury Settlement Trust (the "Trust") and forall proceeds the Trust

receives from sales of the Company's common stock at thetime such

payments or proceeds are transferred to aspecial designated

settlement fund of the Trust or paid toclaimants. The Company

benefited from such stock saleproceeds and dividends during both

years. The Company's income tax expense of $32.3 million for thefirst six months of 1999 at an annual effective tax rate ofapproximately 22 percent reflects benefits from July 1999 Truststock sale proceeds. The Company's first quarter 1999 income taxexpense of $20.3 million at an effective rate of 35 percent didnot include such benefits as stock sale proceeds were notanticipated at that time. Consequently, income tax expense forthe second quarter of 1999 was $12 million (13 percent effectiverate). (c) On June 30, 1999, the Company prepaid bonds payable to theTrust in the principal amount of $23.9 million, resulting in aloss on the early extinguishment of debt of $5.8 million, net oftaxes of $3.5 million. During the second quarter of 1998, theCompany repurchased substantially all of its $400 million of 107/8 percent Senior Notes due 2004. The repurchase resulted in anextraordinary loss on the early extinguishment of debt of $31.8million, net of taxes of $18.1 million. (d) Effective January 1, 1998, the Company changed its methodof accounting for glass furnace rebuild costs to thecapitalization method from the allowance method. The cumulativeeffect of this change in accounting principle increased 1998earnings by $27.4 million, net of taxes of $17.9 million. Referto the Company's 1998 Annual Report for additional informationrelative to its accounting policies, operations and financialposition. ots Original Text Service: Johns Manville CorporationInternet: http://www.newsaktuell.de Contact: Investors: JohnCummings, 303-978-4914, Media: Tom Rafferty, 303-978-2038, bothfor Johns Manville Corporation Company News On-Call:http://www.prnewswire.com/comp/527775.html or fax, 800-758-5804,ext. 527775 Web site: http://www.jm.com

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