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SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported) October 16, 1996
ELCOR CORPORATION
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(Exact name of Registrant as specified in its charter)
DELAWARE 1-5341 75-1217920
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(State or other jurisdiction of Commission File number (I.R.S. Employer
incorporation or organization) Identification No.)
14643 DALLAS PARKWAY
SUITE 1000, WELLINGTON CENTRE, DALLAS, TEXAS 75240-8871
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (972)851-0500
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On October 16, 1996, the Company issued a press release containing
"forward-looking statements" about its prospects for the future. A copy of the
press release is attached hereto as Exhibit 99.1 and incorporated herein by
reference.
From time to time, the Company may make "forward-looking statements" about its
prospects for the future. Such statements are subject to certain risks and
uncertainties which could cause actual results to differ materially from those
projected. Such risks and uncertainties include, but are not limited to, the
following:
1. The Company's roofing products business is cyclical and is
affected by weather and some of the same economic factors that
affect the housing and home improvement industries generally,
including interest rates, the availability of financing and
general economic conditions. In addition, the asphalt roofing
products manufacturing business is highly competitive.
Actions of competitors, including changes in pricing, or
slowing demand for asphalt roofing products due to general or
industry economic conditions or the amount of inclement
weather could result in decreased demand for the Company's
products, lower prices received or reduced utilization of
plant facilities.
2. In the asphalt roofing products business, the significant raw
materials are ceramic coated granules, asphalt, glass fibers,
resins and mineral filler. Increased costs of raw materials
can result in reduced margins, as can higher trucking and rail
costs. Historically, the Company has been able to pass some
of the higher raw material and transportation costs through to
the customer. Should the Company be unable to recover higher
raw material and transportation costs from price increases of
its products, operating results could be lower than projected.
3. The Company has recently completed a $100 million expansion
program which included a new roofing plant in Shafter,
California and the construction of a new plant at the
Company's Ennis, Texas facility to manufacture nonwoven
fiberglass roofing mat and industrial facer products for the
construction industry. As new facilities, their progress in
achieving anticipated operating efficiencies and financial
results is difficult to predict. If such progress is slower
than anticipated, or if demand for products produced at either
of these new plants does not meet current expectations,
operating results could be adversely affected.
4. Certain facilities of the Company's industrial products
subsidiaries must utilize hazardous materials in their
production process. As a result, the Company could incur
costs for remediation activities at its facilities or
off-site, and other related exposures from time to time in
excess of established reserves for such activities.
2
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5. The Company's litigation, including its patent infringement
suits against GAF Building Materials Corporation, is subject
to inherent and case-specific uncertainty. The outcome of
such litigation depends on numerous interrelated factors, many
of which cannot be predicted.
Parties are cautioned not to rely on any such forward-looking beliefs or
judgments in making investment decisions.
Reference is made to the Company's Annual Report on Form 10-K for the year
ended June 30, 1996 for further information about risks and uncertainties.
3
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SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ELCOR CORPORATION
DATE: October 16, 1996 /s/ Richard J. Rosebery
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Richard J. Rosebery
Executive Vice President,
Chief Administrative & Financial Officer,
and Treasurer
/s/Leonard R. Harral
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Leonard R. Harral
Vice President and Chief
Accounting Officer
4
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<TABLE>
<CAPTION>
Item 7. Exhibits
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<S> <C>
99.1 Press release dated October 16, 1996 of Elcor Corporation.
</TABLE>
5
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FOR FURTHER INFORMATION: TRADED: NYSE
SYMBOL: ELK
Richard J. Rosebery, Executive Vice President,
Treasurer and Chief Administrative & Financial Officer
(214) 851-0500
PRESS RELEASE
FOR IMMEDIATE RELEASE
ELCOR REPORTS HIGHER FISCAL 1997 FIRST QUARTER SALES AND EARNINGS
DALLAS, TEXAS, October 16, 1996 . . . . Elcor Corporation announced today that
sales for the first quarter ending September 30, 1996, rose $16 million to
$64.5 million, up 33% from $48.5 million in the year-ago quarter. Net income
increased to $3,768,000, or $.43 per share, from $3,663,000, or $.41 per share
in the same quarter last year. The company's two business sectors, Roofing
Products and Industrial Products, both contributed to the improved operating
results.
Roy E. Campbell, Chairman and Chief Executive Officer, said, "In the Roofing
Products sector, growing demand and better net prices for our Elk subsidiary's
patented Enhanced High Definition(R) and Raised Profile(TM) Prestique(R)
premium laminated fiberglass asphalt shingles, along with increasing production
and sales from all our roofing plants, accounted for much of the 33% increase
in first quarter sales.
"Operating losses at Elk's new Shafter, California plant did reduce first
quarter earnings by about $.09 per share. Certain planned changes were being
made to the new plant's production line towards
/more
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PRESS RELEASE
Elcor Corporation Quarterly Results
October 16, 1996
Add One
the end of the first quarter which are expected to enhance the plant's overall
performance in subsequent periods.
"Start-up operations at Elk's new nonwoven fiberglass mat plant at Ennis, Texas
were underway during the first quarter. This plant's new nonwoven fiberglass
roofing mats have substantially superior physical properties which are expected
to contribute to lower production costs in our roofing plants in the years
ahead. The new plant's production rates are now sufficient to handle all of
Elk's internal fiberglass roofing mat requirements. During the second quarter,
the new plant plans to sell limited quantities of fiberglass roofing mat to
certain other manufacturers to provide them an opportunity to sample the
performance of the new mat in their shingle manufacturing plants. During this
year's first quarter, about $1.7 million of deferred preoperating costs at the
new Ennis facility were capitalized.
"The company's Industrial Products segment also reported improved operating
results primarily because of increased fees generated by Ortloff Engineers,
LTD. from licensing Elcor's technology," he said.
FINANCIAL POSITION
Elcor continues to maintain a strong financial position. During the first
quarter, net cash flows from operating activities of $10.6 million fully
covered the $9.6 million spent in investing activities.
/more
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PRESS RELEASE
Elcor Corporation Quarterly Results
October 16, 1996
Add Two
Long-term debt of $51.9 million was down slightly from $53 million at June 30,
1996. However, the increase in long-term debt from $17.2 million in the
year-ago quarter was primarily a result of the completion of about $100 million
in investments for the two new major plants. At September 30, 1996,
shareholders' equity was $105.2 million; total capital was $157.1 million; and
long-term debt as a percent of total capital was 33%. The current ratio was
2.5:1 at September 30, 1996.
OUTLOOK
"At the present time, we expect that strong demand for our patented Enhanced
High Definition and Raised Profile Prestique shingles will boost shipments and
sales to record levels for fiscal 1997. We continue to believe that earnings
per share during the second and third quarters should be in the general range
of, or possibly lower than, the fiscal 1996 comparable quarters until the
manufacturing output and sales at both new plants rise above the break-even
point. We expect that fourth quarter earnings will benefit from the seasonal
increase in demand for products produced by these two major new facilities.
Our current forecast for earnings per share for fiscal year ending June 30,
1997 remains in the range of $1.30 to $1.50 per share, up from $1.16 per share
in fiscal 1996.
"Looking ahead to the longer term, we have made the investments to expand
capacity that should enable us to achieve strong growth in sales and earnings
over the next several years. In recognition of these growth prospects, the
Board of Directors recently increased our regular quarterly cash dividend by
17% to $.07 per share," Campbell concluded.
/more
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PRESS RELEASE
Elcor Corporation Quarterly Results
October 16, 1996
Add Three
SAFE HARBOR PROVISIONS
In accordance with the recently enacted safe harbor provisions of the
securities law regarding forward-looking statements, except for the historical
information contained herein, the above discussion contains forward looking
statements that involve risks and uncertainties. Elcor's actual results could
differ materially from those discussed here. Factors that could cause or
contribute to such differences could include, but are not limited to, changes
in demand, prices, raw material costs and the time that it takes to bring the
new Shafter, California and Ennis, Texas plants to profitable operations,
changes in economic conditions of the various markets the company serves,
changes in the amount and severity of inclement weather, as well as the other
risks detailed herein and in the company's reports filed with the Securities
and Exchange Commission, including, but not limited to its Form 10-K for the
fiscal year ended June 30, 1996 and its Form 8-K dated October 16, 1996.
- - - - - - - -
Elcor, through its subsidiaries, manufactures roofing products and industrial
products. Each of Elcor's principal operating subsidiaries is the leader or
one of the leaders within its particular market. Its common stock is listed on
the New York Stock Exchange (ticker symbol: ELK).
Elcor's roofing products facilities are located in Tuscaloosa, Alabama;
Shafter, California; Dallas and Ennis, Texas. Its industrial products
facilities are located in Cleveland, Ohio; Dallas, Lufkin, and Midland, Texas.
/more
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PRESS RELEASE
Elcor Corporation Quarterly Results
October 16, 1996
Add Four
CONDENSED RESULTS OF OPERATIONS
(Unaudited, $ in thousands)
<TABLE>
<CAPTION>
First Quarter Trailing
Three Months Ended Twelve Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
SALES $ 64,536 $ 48,528 $ 212,470 $ 169,112
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COSTS AND EXPENSES:
Cost of sales 50,524 35,856 163,748 125,086
Selling, general & administrative 7,897 6,752 30,266 27,926
Reduction in value of assets 0 0 1,595 0
Interest expense, net 161 25 319 6
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Total Costs and Expenses 58,582 42,633 195,928 153,018
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INCOME BEFORE INCOME TAXES 5,954 5,895 16,542 16,094
Provision for income taxes 2,186 2,232 6,153 6,029
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NET INCOME $ 3,768 $ 3,663 $ 10,389 $ 10,065
======== ======== ========= =========
NET INCOME PER SHARE $ 0.43 $ 0.41 $ 1.17 $ 1.14
======== ======== ========= =========
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 8,793 8,843 8,844 8,830
======== ======== ========= =========
</TABLE>
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PRESS RELEASE
Elcor Corporation Quarterly Results
October 16, 1996
Add Five
CONDENSED BALANCE SHEET
(Unaudited, $ in thousands)
<TABLE>
<CAPTION>
September 30,
ASSETS 1996 1995
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<S> <C> <C>
Cash and cash equivalents $ 2,775 $ 2,014
Receivables, net 47,301 31,673
Inventories 19,479 11,827
Deferred income taxes 2,691 2,066
Prepaid expenses and other 946 1,818
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Total Current Assets 73,192 49,398
Property, plant equipment, net 117,898 75,056
Net assets of discontinued operations 2,988 7,175
Other assets 1,301 8,797
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Total Assets $ 195,379 $ 140,426
========== ==========
September 30,
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995
- ------------------------------------- ---- ----
Accounts payable and accrued liabilities $ 29,144 $ 22,020
Current maturities on long-term debt 0 0
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Total Current Liabilities 29,144 22,020
Long-term debt, net 51,900 17,200
Deferred income taxes 9,172 4,507
Shareholders' equity 105,163 96,699
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Total Liabilities and Shareholders'
Equity $ 195,379 $ 140,426
========== ==========
</TABLE>
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PRESS RELEASE
Elcor Corporation Quarterly results
October 16, 1996
Add Six
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited, $ in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
September 30,
1996 1995
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<S> <C> <C>
CASH FLOWS FROM:
OPERATING ACTIVITIES
Net income $ 3,768 $ 3,663
Adjustments to net income
Depreciation and amortization 1,915 775
Deferred income taxes 879 857
Changes in assets and liabilities
Trade receivables (4,819) 1,237
Inventories 7,269 (126)
Prepaid expenses and other 1,010 1,164
Accounts payable and accrued liabilities 550 573
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Net cash from operations 10,572 8,143
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INVESTING ACTIVITIES
Additions to property, plant & equipment (9,599) (8,066)
Other (39) (14)
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Net cash from investing activities (9,638) (8,080)
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FINANCING ACTIVITIES
Long term borrowings, net (1,100) (1,200)
Dividends on common stock (614) (524)
Treasury stock transactions and other, net (189) (56)
-------- ---------
Net cash from financing activities (1,903) (1,780)
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NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (969) (1,717)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 3,744 3,731
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,775 $ 2,014
======== =========
</TABLE>
