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February 20, 2018

James Hardie Q1 profit slides 80 pct, warns of slower US recovery

* FX changes on asbestos compensation claims hit profit

* US housing market improving slower than expected

* Company’s FY 2015 outlook below analyst forecasts (Adds profit detail, shares, housing market outlook)

SYDNEY, Aug 15 (Reuters) – Australia’s James Hardie Industries PLC , the world’s biggest fibre cement products maker, said on Friday its first-quarter earnings tumbled and warned full-year profit will fall short of analyst expectations as the U.S. housing market recovers more slowly than it previously anticipated.

The firm, which generates two-thirds of its revenue in the United States and Europe, saw its Sydney-listed shares slump after it said net profit for the first quarter of its fiscal year skidded 80 percent. The earnings drop was mainly because of unfavourable changes in exchange rates as the company pays compensation for claims of health damage from historic use of asbestos in products.

Net profit for the three months to June 30 fell to $28.9 million compared to $142.2 million a year ago. Not including asbestos adjustments, gross profit grew 11 percent to $140 million, while revenue rose 12 percent to $416.8 million.

But the company, which supplies products like cladding for the outside walls of houses, presented a more muted outlook on the recovery in the U.S. housing construction market than it gave when it reported results for the previous fiscal year three months ago.

In Sydney James Hardie shares fell as much as 7.5 percent to touch four-month lows. By 0011 GMT the stock had recovered slightly, trading 6.8 percent lower at A$13.08.

In a statement to the Australian Securities Exchange, the company said while the U.S. market was improving, with housing starts in the first quarter up 4 percent from a year earlier, the improvement was at “a more moderate level than originally assumed for the year”.

“Recent flattening in housing activity has created some uncertainty about the pace of the recovery in the short-term,” the statement said. “Although U.S. housing activity has been improving for some time, market conditions remain somewhat uncertain and some input costs remain volatile.”

James Hardie noted analysts have forecast it will post operating profit excluding asbestos compensation costs of between $226 million and $261 million for the full financial year. But the company said it expects the result to be in the range of $205 million to $235 million, compared with $197.2 million for the previous year.

(1 US dollar = 1.0733 Australian dollar) (Reporting By Byron Kaye and Jane Wardell; Editing by Chris Reese and Kenneth Maxwell)

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James Hardie Q1 profit slides 80 pct, warns of slower US recovery

RPM reaches $797.5 million deal to resolve Bondex asbestos claims

By Tom Hals

July 28 (Reuters) – Rust-Oleum paint maker RPM International Inc on Monday announced a $797.5 million deal to resolve asbestos claims against its Bondex International Inc unit, which filed for protection from creditors in 2010 after mounting personal injury lawsuits.

If the agreement receives court approval, it would end a contentious Chapter 11 bankruptcy in which a judge ruled Bondex should pay about $1.2 billion to resolve asbestos claims. Bondex, which had said it should only pay $135 million, was appealing the ruling.

RPM shares were up 2.8 percent at $45.64 in afternoon New York Stock Exchange trading.

Under the agreement, RPM will provide an initial $450 million in cash to a trust once the U.S. Bankruptcy Court and the U.S. District Court in Delaware approve a reorganization plan for Bondex.

RPM, which also makes DAP caulk, would contribute the remaining $347.5 million in cash, stock or a combination of the two within four years after the trust has been established.

All current and future asbestos claims against Bondex and related entities would then be channeled to the trust, according to a Monday statement by Medina, Ohio-based RPM.

Bondex and another RPM unit, Specialty Products Holding Co, filed for bankruptcy in May 2010 in the wake of lawsuits over its asbestos-containing products such as joint compound, which is used in filling drywall gaps.

Bondex and personal injury lawyers clashed over how much money was needed to fund a trust to resolve the asbestos claims.

The lawyers said $1.255 billion was an appropriate amount based on what Bondex paid in past settlements.

Bondex said its liability could not be determined by looking to past settlements because those deals included payments to rid itself of nuisance lawsuits. Without those nuisance payments, the company said, its asbestos liability would have been about $135 million.

Former U.S. Bankruptcy Court Judge Judith Fitzgerald rejected that argument. She retired shortly after issuing the opinion in May 2013, and Judge Peter Walsh is now overseeing the case.

Monday’s agreement, if the courts approve it, would head off a federal appeals court’s potentially binding ruling on Bondex’s approach to estimating liability.

Asbestos is a naturally occurring mineral that can cause deadly cancers, including mesothelioma. Scores of companies have filed for bankruptcy and collectively paid tens of billions of dollars to set up trusts to resolve personal injury lawsuits involving asbestos.

RPM said it expected the contributions to the trust to be tax-deductible, and it estimated the after-tax net present value of its contributions at about $485 million.

The case is Special Products Holding Corp, U.S. Bankruptcy Court, District of Delaware, No. 10-11780.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Lisa Von Ahn)

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RPM reaches $797.5 million deal to resolve Bondex asbestos claims

U.S. judge strikes sealing order over Garlock asbestos liability

By Jessica Dye

July 24 (Reuters) – A North Carolina federal judge has struck down a bankruptcy court ruling that sealed evidence and testimony about gasket maker Garlock Sealing Technologies’ liability for asbestos injuries, saying no compelling reason was stated to close the proceedings.

The “public and press have a co-extensive right to view and consider documents tendered” in court, wrote U.S. District Judge Max Cogburn in the Western District of North Carolina in Wednesday’s ruling.

Cogburn reversed the sealing order and sent it back to the bankruptcy court for further consideration.

Garlock, a subsidiary of EnPro Industries Inc, filed for Chapter 11 bankruptcy in June 2010 as it faced personal injury claims related to its asbestos-lined gaskets used in pipes, valves and other industrial applications.

Last year, U.S. Judge George Hodges in the Western District of North Carolina bankruptcy court presided over a trial to determine how much Garlock should set aside to cover claims for mesothelioma, a cancer caused by asbestos exposure.

Lawyers for plaintiffs, who say they were exposed to asbestos from Garlock products, argued the figure should be over $1 billion. But Garlock said its liability was much lower and that that estimate was based on past settlements that were inflated by manipulated evidence and fraud, according to court filings.

Legal Newsline, an online publication owned by the U.S. Chamber Institute for Legal Reform, filed a motion to make all the bankruptcy proceedings public, but Hodges denied it, saying certain matters discussed were confidential.

In January, Hodges ruled that Garlock should only have to pay $125 million for asbestos claims. He also slammed plaintiffs’ lawyers for withholding evidence in previous cases, “infect(ing) fatally the settlement process and historic data.”

After the trial, several companies, including Ford Motor Co and Honeywell International Inc, joined an appeal by Legal Newsline to the North Carolina district court to get the evidence unsealed.

Ford and Honeywell have also been sued over asbestos exposure and were co-defendants in some cases against Garlock.

“We’re optimistic that the evidence will ultimately be disclosed and that people can form their own opinions,” said Steven Pflaum, a lawyer for Legal Newsline.

Harold Kim, executive vice president of the U.S. Chamber Institute for Legal Reform, called the decision an important step toward bringing greater transparency to asbestos litigation.

EnPro spokesman Dan Grgurich said the company was “pleased that the judge agrees that the public has a right to access evidence developed in our case.”

Lawyers for Garlock asbestos claimants did not immediately return requests for comment.

The case is Legal Newsline v. Garlock Sealing Technologies, U.S. District Court for the Western District of North Carolina, No. 13-464.

(Reporting by Jessica Dye; Editing by Ted Botha and Richard Chang)

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U.S. judge strikes sealing order over Garlock asbestos liability