Johns Manville Reports Strong Third Quarter Results

DENVER (PROTEXT) - Johns Manville Corporation (NYSE: JM) todayreported a 44 percent increase in net income for the three monthsended September 30, 1999. Third quarter net income was $73.2million, or 49 cents per share, compared with net income of $50.7million, or 31 cents per share, in the third quarter of 1998.This increase reflects contributions from recent acquisitions,improved pricing in building insulation, strong volumes acrossmany of the Company's businesses, cost improvements, and a lowertax rate resulting from the Company's share repurchase earlier inthe year. Net sales increased 17 percent in the third quarter of 1999 to$569 million, compared with $488 million in the third quarter of1998. Acquisitions contributed approximately three-fourths of thesales increase in the third quarter, with the remainder driven bycontinued strength in the building insulation and North Americanmats and fibers businesses. Income from operations increased 36percent to $98.5 million in the third quarter of 1999 comparedwith $72.4 million in the same period last year. The increase inoperating income for the quarter is due mainly to contributionsfrom recent acquisitions, improved pricing in buildinginsulation, and a continued focus on cost improvements across thebusinesses. "We continue to have confidence in our ability to produceanother record year for Johns Manville," said Jerry Henry,chairman and CEO. "Building insulation is fueling growth withimproved pricing and productivity, and we have judiciously addedcapacity in this area to meet increasing demand. Roofinggenerated volume increases, but profitability in this area wasadversely affected by continued pricing pressure in membranes andpolyiso foam insulation and softer-than-expected demand. InEngineered Products, we continue to see better-than-expectedresults from our spunbond/monofilament acquisition and areexperiencing sold-out conditions in our North American mats andfibers business, which have more than offset some continuingsoftness in European markets. We are optimistic about thestrength in our business and our own operations as we prepare for2000." Sales for the first nine months of 1999 were $1.6 billion, a23 percent increase compared with $1.3 billion for the sameperiod in 1998. Underlying income from operations increased 44percent to $262.7 million, from $182.5 million last year,excluding a $36 million gain on the sale of a mining royalty in1998. Year-to-date underlying net income in 1999 was $191.3million, or $1.21 per share, a 61 percent increase compared with$118.6 million, or 73 cents per share in 1998. Strong volumesacross the businesses, improved pricing in building insulation,cost improvements, lower interest expense, and the lower tax ratecontributed to these gains. Reported net income for the firstnine months totaled $185.5 million, or $1.17 per share, comparedwith net income of $137.3 million, or 85 cents per share, in thesame period in 1998. Reported results reflect the mining royaltygain and a number of unusual items detailed in the financialstatements. On July 7, 1999, Johns Manville repurchased 12.2 millionshares, for approximately $167 million, from the ManvillePersonal Injury Settlement Trust. As a result, Johns Manville nowhas 147.3 million common shares outstanding, of which the Trustowns approximately 77 percent. In addition, on June 30, 1999,Johns Manville prepaid bonds payable to the Trust in the amountof $33.2 million to settle its last remaining debt obligationresulting from the Company's 1988 reorganization. Thesetransactions are expected to increase 1999 underlying earnings byapproximately 31 cents per share. As a result of the repurchase, the company's effective taxrate for the first nine months of 1999 was approximately 21percent, compared with 27 percent in 1998. Johns Manvillereceives a tax deduction and a related reduction in its effectivetax rate when the Trust distributes proceeds derived from itsownership of company stock to claimants or a settlement fund.Johns Manville benefited from stock repurchases and the paymentof dividends during both years. Segment Review Insulation The Insulation segment, which includes building andcommercial/industrial insulations, reported net sales of $214million in the third quarter, up 10 percent compared with $195million in the third quarter of 1998. Improved pricing inbuilding insulation and solid results from the Company'scommercial/industrial insulation product lines primarily drovethis increase. Income from operations in Insulation increased 43percent in the third quarter to $52.2 million, from $36.4 millionin the comparable period last year, fueled by improved buildinginsulation pricing and higher volumes across the segment. To satisfy demand in its insulation segment, Johns Manvillecontinues to increase production incrementally, and plans toexpand capacity at its Winder, Georgia facility in 2000. OnOctober 11, the Company announced it had started construction onthe new two-module fiber glass insulation line at this plant,which Johns Manville anticipates will help significantly inmeeting the forecasted demand for fiber glass insulation infuture periods. The Winder line will produce high-quality fiberglass insulation products for building and commercial/industrialinsulation markets. The new line will employ cost-effectivetechnology that is expected to drive low-cost, flexibleproduction for greater efficiency and profitability. Year-to-date net sales in Insulation increased 15 percent to$610 million from $533 million in the same period last year.Income from operations for the first nine months in Insulationincreased 74 percent to $135.8 million, from $78.1 million in1998, primarily reflecting the improved pricing environment,strong volume growth and productivity improvements in buildinginsulation. Roofing Systems The Roofing Systems segment generated a slight salesimprovement in the third quarter of 1999 to $168 million from$166 million in third quarter last year. Sales increases in thisbusiness segment were primarily the result of volume increasesfrom recent acquisitions offset by weaker-than-expected demandand continuing pricing pressures. Income from operations forRoofing in the third quarter of 1999 was $14.8 million, a 22percent decline compared with $19 million in the comparableperiod of 1998. Continued pricing pressures in membranes andpolyiso foam insulation and softer-than-expected demand, whichadversely affected operating income in the Roofing Systemsbusiness, offset a slight increase in volume in the quarter. To grow its Roofing Systems business, Johns Manville continuesto participate in the consolidation trend in the commercialroofing industry. Consistent with this strategy, the Companyfinalized a strategic alliance on September 2, 1999 with ApacheProducts Company. As part of the strategic alliance, JohnsManville has acquired or will operate manufacturing facilities inAnderson, South Carolina; Belvidere, Illinois; Montreal, Canada;Linden, New Jersey and Riverside, California. Apache is a leadingNorth American manufacturer of polyiso roofing insulation andsheathing products. This acquisition complements Johns Manville'sexisting polyiso product lines and plant locations, betterenabling the Company to serve its Roofing Systems customers. Year-to-date net sales in Roofing Systems increased eightpercent to $452 million from $419 million in the comparableperiod of 1998. Income from operations for the first nine monthsof 1999 was $36.3 million, a six percent decline compared with$38.7 million in the same period last year. Continued pricingpressures offset sales increases from recent acquisitions. Engineered Products The Engineered Products segment, whichincludes mats and fibers, glass fabrics and air filtrationproducts, reported net sales of $200 million in the third quarterof 1999, a 47 percent increase compared with $135 million in thethird quarter of 1998. Improved sales were largely driven bycontributions from the spunbond/monofilament acquisition,completed on January 1, 1999, and from sold-out conditions in theCompany's North American mats and fibers businesses. Income fromoperations for the quarter in the Engineered Products Group was$31.5 million, up 86 percent from $17 million in the same periodlast year. This increase was fueled by the spunbond/monofilamentacquisition, productivity improvements across the EngineeredProducts business, and gradually improving filtration markets. Year-to-date net sales in Engineered Products increased 51percent to $595 million from $393 million in the comparableperiod of 1998, primarily as a result of sales contributions fromthe spunbond/monofilament acquisition, and strong North Americandemand for mats and fibers, partially offset by continuedweakness in Europe. Income from operations for the first ninemonths of 1999 was $90.6 million, a 38 percent increase comparedwith $65.7 million in the same period last year. "The foundation of JM's strategy is to create shareholdervalue through higher earnings per share and strong cash flow,"said Mr. Henry. "Over the past several years, we have done this,in part, through acquisitions that are accretive to earnings intheir first full year, fit within our existing businesses andhave attractive long-term financial return; through healthy corebusiness growth; and through a focus on productivity improvementsthroughout our businesses. These actions have resulted in stronggains in JM's earnings per share and free cash flow that weexpect will continue to create value for our shareholders overthe long term." Johns Manville (NYSE: JM) is a leading manufacturer andmarketer of premium-quality building products. The 141-year-oldDenver-based company had sales of $1.8 billion in 1998. JohnsManville employs approximately 9,700 people and operates 58manufacturing facilities in North America, Europe and China.Additional information 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 September 30,

1999

1998 Net Sales

$569,331 $488,232 Cost of Sales

403,708 358,068 Selling, General and Administrative

49,053 45,526 Research, Development and Engineering

9,858

8,080 Other Income (Expense), net

(8,176) (4,197) Income from Operations

98,536 72,361 Interest Income

707

869 Interest Expense

9,071

6,893 Income before Income Taxes

90,172 66,337 Income Tax Expense (Note b)

16,981 15,666 Net Income

$73,191 $50,671

Three Months

Ended September 30, EARNINGS PER COMMON SHARE (Note e) 1999

1998 Basic: Net Income

$.49

$.32 Diluted: Net Income

$.49

$.31

JOHNS MANVILLE CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(Thousands of dollars except per share amounts)

(Unaudited)

NineMonths

Ended September30,

1999 1998 Net Sales

$1,623,941$1,322,792 Cost of Sales

1,160,590 977,032 Selling, General and Administrative

149,065 133,468 Research, Development and Engineering

29,945 23,977 Other Income (Expense), net (Note a)

(21,622) 30,164 Income from Operations

262,719 218,479 Interest Income

1,871 4,321 Interest Expense

23,986 28,870 Income before Income Taxes, Extraordinary Item and Cumulative Effect of Accounting Change

240,604 193,930 Income Tax Expense (Note b)

49,324 52,261 Income before Extraordinary Item and Cumulative Effect of Accounting Change

191,280 141,669 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

$185,522 $137,324

Nine Months

Ended September30, EARNINGS PER COMMON SHARE (Note e)

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

$1.22 $.88 Extraordinary Loss on Early Extinguishment of Debt, net of tax (Note c)

(.04) (.19) Cumulative Effect of a Change in Accounting for Furnace Rebuilds, net of tax (Note d)

.17 Net Income

$1.18 $.86 Diluted: Income before Extraordinary Item and Cumulative Effect of Accounting Change

$1.21

$.87 Extraordinary Loss on Early Extinguishment of Debt, net of tax (Note c)

(.04) (.19) Cumulative Effect of a Change in Accounting for Furnace Rebuilds, net of tax (Note d)

.17 Net Income

$1.17 $.85

JOHNS MANVILLE CORPORATION

CONDENSED CONSOLIDATED BUSINESS SEGMENTS

(Thousands of dollars)

(Unaudited)

Three Months

Ended September 30, NET SALES

1999

1998 Insulation

$214,078 $194,967 Roofing Systems

167,881

166,123 Engineered Products

199,537

135,458 Eliminations

(12,165)

(8,316)

$569,331 $488,232 INCOME FROM OPERATIONS Insulation

$52,172

$36,405 Roofing Systems

14,823

18,974 Engineered Products

31,541

16,982

$98,536

$72,361

Nine Months

Ended September 30, NET SALES

1999

1998 Insulation

$610,080

$532,572 Roofing Systems

451,841

418,892 Engineered Products

594,664

392,658 Eliminations

(32,644)

(21,330)

$1,623,941 $1,322,792 INCOME FROM OPERATIONS Insulation

$135,815 $78,095 Roofing Systems

36,295 38,722 Engineered Products

90,609 65,674 Corporate and Eliminations(Note a)

35,988

$262,719 $218,479

(Millions of dollars)

September 30, December 31, Other Information:

1999

1998 Cash and Marketable Securities $29.1 $16.5 Total Debt

561.4 591.9

Nine Months

Ended September 30,

1999 1998 Depreciation and Amortization $85.7 $69.7 Capital Expenditures (excluding acquisitions)

92.8 73.6

JOHNS MANVILLE CORPORATION

Notes to Condensed Consolidated Statement of Income

(Unaudited) (a) During the second quarter of 1998, the Company sold itsfive percent net smelter royalty on certain metals produced bythe Stillwater Mining Company for cash resulting in other incomeof $36 million. The after tax gain on this transaction wasapproximately

$23.1 million. (b) The Company's year-to-date effective tax rates wereapproximately 21 percent in 1999 and 27 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 the timesuch

payments or proceeds are transferred to a specialdesignated settlement fund of the Trust or paid to claimants. The Company benefited from such stock sale proceeds and dividends duringboth

years. (c) On June 30, 1999, the Company prepaid bonds payable to theTrust in the principal amount of $23.9 million, resulting in anextraordinary loss on the early extinguishment of debt of $5.8million, net of taxes of $3.5 million. During the second quarterof 1998, the Company repurchased substantially all of its $400million of 10 7/8 percent Senior Notes due 2004. The repurchaseresulted in an extraordinary loss on the early extinguishment ofdebt of $31.8 million, 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 cumulative effect of this change in accounting principle increased 1998 earnings by $27.4million, net of taxes of $17.9 million. (e) In July 1999, the Company purchased 12.2 million shares ofcommon stock from the Trust, resulting in a decrease in theweighted average number of common shares outstanding during thethird quarter and first nine months of 1999. Basic and dilutedearnings per common

share amounts were determined using the following commonequivalent

shares:

Third Quarter

First Nine Months

1999

1998

1999

1998

Basic

149,014,000 159,158,000 156,361,000 160,267,000

Diluted 150,219,000 161,346,000 157,959,000 162,201,000 Refer to the Company's 1998 Annual Report for additionalinformation relative to its accounting policies, operations andfinancial position. ots Original Text Service: Johns ManvilleCorporation Internet: http://www.newsaktuell.de Contact: JohnCummings of Johns Manville Corporation, (USA) 303-978-4914Company News On-Call: http://www.prnewswire.com/comp/527775.htmlor fax, (USA) 800-758-5804, ext. 527775 Web site:http://www.jm.com

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