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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) August 20, 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 (214)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 August 20, 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 is nearing completion of 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 10K for the year
ended June 30, 1995 and its Quarterly Reports on Form 10Q for the quarters
ended September 30, 1995, December 31, 1995 and March 31, 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: August 20, 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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Item 7. Exhibits
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99.1 Press release dated August 20, 1996 of Elcor Corporation.
5
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EXHIBIT 99.1
FOR FURTHER INFORMATION: TRADED: NYSE
SYMBOL: ELK
Richard J. Rosebery, Executive Vice President
and Chief Financial Officer
(214) 851-0500
PRESS RELEASE
FOR IMMEDIATE RELEASE
ELCOR REPORTS HIGHER SALES AND EARNINGS IN FISCAL 1996
EXPECTS STRONG GROWTH IN FISCAL 1997
DALLAS, TEXAS, August 20,1996 . . . . Elcor Corporation today reported higher
fiscal 1996 sales and earnings for the year ending June 30, 1996. Results for
the fourth quarter and fiscal year were in line with the company's publicly
released comments on June 20. Fourth quarter sales rose while earnings were
lower because of start-up losses at a new plant and a nonrecurring provision
for the adoption of FAS No. 121.
Roy E. Campbell, Chairman and Chief Executive Officer, said, "Strong demand
and better prices for Elk Prestique(R) premium laminated fiberglass asphalt
shingles and accessory products, along with increasing production from the new
Shafter, California plant, contributed to the 24% increase in fiscal 1996
sales and an 8% increase in net income. Growing demand for Elk Prestique
products and improving production levels at our new Shafter, California plant
and our new Ennis, Texas nonwoven fiberglass roofing mat plant should
contribute to strong growth in fiscal 1997.
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OPERATING RESULTS
For the fiscal year ending June 30, 1996, sales rose 24% to $196,462,000,
compared to $159,061,000 in fiscal 1995. Net income of $10,284,000, or $1.16
per share, was up from $9,558,000, or $1.08 per share, last year, even though
operating losses at our new Shafter, California plant reduced net income by
about $2.6 million, or $.30 per share. In addition, nonrecurring provisions,
primarily as a result of adopting FAS No. 121, reduced net income by about
$1 million, or $.11 per share.
For the fourth quarter ending June 30, 1996, sales rose 12% to $52,524,000
from $46,795,000 last year. Net income of $2,176,000, or $.25 per share,
compared to $3,621,000, or $.41 per share, in the year-ago quarter. Fourth
quarter earnings would have surpassed last year's quarter, except for the
above factors which, together, reduced net income by about $1.8 million, or
$.20 per share.
FINANCIAL POSITION
During fiscal 1996, cash flows from operating activities more than covered a
$17 million expansion in working capital and funded a portion of the company's
$40.7 million of capital expenditures. At June 30, 1996, the company had $53
million of long-term debt, $102.2 million of shareholders' equity, and $155.2
million of total capital. Long-term debt as a percent of total capital was
about 34%. The current ratio is 2.7 to 1 at June 30, 1996.
OUTLOOK
Mr. Campbell said, "During the last three years, Elk has invested over $100
million to increase its capacity to manufacture its patented Enhanced High
Definition(R) and Raised Profile(TM) Prestique premium laminated fiberglass
asphalt shingles and to more than triple its nonwoven fiberglass mat capacity.
During fiscal 1997, the superior physical properties of the new nonwoven
fiberglass
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roofing mats will permit Elk to further differentiate its Elk Prestique
shingle lines by increasing the value of these products, while lowering their
production costs.
"At the present time, we expect strong demand for our patented Enhanced High
Definition and Raised Profile Prestique shingles will boost shipments and
sales to record levels for our fiscal 1997 first quarter, and we expect this
trend will result in substantially higher sales for fiscal 1997 as well. We
still expect earnings per share for fiscal year 1997 will increase to about
$1.30 to $1.50 per share from $1.16 per share in fiscal 1996.
"We currently expect that earnings per share during earlier quarters should be
in the general range of, or possibly lower than, the fiscal 1996 quarters
until the Shafter plant installs some new equipment this fall and gets the
benefit of having all of its higher value products in its manufacturing
schedule. The start-up of the major new nonwoven fiberglass mat production
facility at Ennis is going well, and we believe the new roofing mats are
superior to anything in the industry. However, this new facility will also be
a drag on earnings during the early part of the fiscal year until we get its
manufacturing output and sales above the break-even point. At this point, it
appears that the earlier quarters of fiscal 1997 will be most challenging
until we start to get the benefit of the earnings contribution from these two
major new facilities. 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," Campbell concluded.
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
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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 8-K
dated August 20, 1996.
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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.
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PRESS RELEASE
Elcor Corporation Quarterly Results
August 20, 1996
Add Four
CONDENSED RESULTS OF OPERATIONS
($ in thousands)
<TABLE>
<CAPTION>
Unaudited Audited
Three Months Ended Fiscal Year Ended
June 30, June 30,
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
SALES $ 52,524 $ 46,795 $ 196,462 $ 159,061
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COSTS AND EXPENSES:
Cost of sales 40,384 34,534 149,080 116,799
Selling, general & administrative 7,704 6,670 29,121 27,103
Reduction in value of assets 1,037 0 1,595 0
Interest expense (income), net 78 (7) 183 (122)
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Total Costs and Expenses 49,203 41,197 179,979 143,780
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INCOME BEFORE INCOME TAXES 3,321 5,598 16,483 15,281
Provision for income taxes 1,145 1,977 6,199 5,723
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NET INCOME $ 2,176 $ 3,621 $ 10,284 $ 9,558
======== ======== ========= =========
NET INCOME PER SHARE $ 0.25 $ 0.41 $ 1.16 $ 1.08
======== ======== ========= =========
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 8,871 8,822 8,857 8,844
======== ======== ========= =========
</TABLE>
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PRESS RELEASE
Elcor Corporation Quarterly Results
August 20, 1996
Add Five
CONDENSED BALANCE SHEET
(Audited, $ in thousands)
<TABLE>
<CAPTION>
June 30,
1996 1995
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<S> <C> <C>
ASSETS
Cash and cash equivalents $ 3,744 $ 3,731
Receivables, net 42,482 32,910
Inventories 26,748 11,701
Deferred income taxes 2,734 2,136
Prepaid expenses and other 1,956 2,931
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Total Current Assets 77,664 53,409
Property, plant and equipment, net 110,207 75,186
Net assets of discontinued operations 2,942 7,175
Other assets 1,315 1,363
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Total Assets $ 192,128 $ 137,133
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</TABLE>
<TABLE>
<CAPTION>
June 30,
1996 1995
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<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable & accrued liabilities $ 28,594 $ 21,397
Current maturities on long-term debt 0 0
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Total Current Liabilities 28,594 21,397
Long-term debt, net 53,000 18,400
Deferred income taxes 8,336 3,720
Shareholders' equity 102,198 93,616
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Total Liabilities and Shareholders' Equity $ 192,128 $ 137,133
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</TABLE>
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PRESS RELEASE
Elcor Corporation Quarterly Results
August 20, 1996
Add Six
CONDENSED STATEMENT OF CASH FLOWS
(Audited, $ in thousands)
<TABLE>
<CAPTION>
For the Year Ended
June 30,
1996 1995
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<S> <C> <C>
CASH FLOWS FROM:
OPERATING ACTIVITIES
Net income $ 10,284 $ 9,558
Adjustments to net income
Depreciation and amortization 4,689 3,603
Reduction in value of assets 1,595 0
Deferred income taxes 4,018 2,845
Changes in assets and liabilities:
Trade receivables (9,572) 627
Inventories (15,047) 5,192
Prepaid expenses and other 975 (1,328)
Accounts payable and accrued liabilities 6,697 (272)
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Net cash from continuing operations 3,639 20,225
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Net cash from discontinued operations 4,233 684
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INVESTING ACTIVITIES
Additions to property, plant & equipment (40,669) (46,252)
Proceeds from sale of investments 0 5,378
Other (88) 548
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Net cash from investing activities (40,757) (40,326)
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FINANCING ACTIVITIES
Long-term borrowings 34,600 18,400
Dividends on common stock (2,101) 0
Treasury stock transactions and other, net 399 (1,171)
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Net cash from financing activities 32,898 17,229
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 13 (2,188)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 3,731 5,919
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CASH AND CASH EQUIVALENTS AT END OF YEAR $ 3,744 $ 3,731
========= ========
</TABLE>
