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SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
--------------------------
Date of Report (Date of earliest event reported) January 16, 1997
ELCOR CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 1-5341 75-1217920
- ------------------------------ ---------------------- -------------------
(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 January 16, 1997, 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 completed a $100 million expansion program
which included a roofing plant in Shafter, California and the
construction of a 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: January 16, 1997 /s/ Richard J. Rosebery
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Richard J. Rosebery
Executive Vice President,
Chief Administrative & Financial Officer,
and Treasurer
/s/Leonard R. Harral
-----------------------------------------
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 January 16, 1997 of Elcor Corporation.
5
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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 FISCAL 1997 SECOND QUARTER SALES AND EARNINGS;
NEW CALIFORNIA PLANT ACHIEVES BREAK-EVEN LEVEL OF OPERATIONS
DALLAS, TEXAS, January 16 , 1997. . . . Elcor Corporation announced today that
sales for the fiscal 1997 second quarter ending December 31, 1996 rose 11.5% to
$50.6 million from $45.4 million for the year-ago quarter. Net income
increased to $2,309,000, or $.26 per share, from $2,124,000, or $.24 per share,
in the same quarter last year.
For the six months ending December 31, 1996, sales rose $21.3 million to $115.2
million, up 22.7% from $93.9 million last year. Net income increased to
$6,077,000, or $.69 per share, from $5,787,000, or $.65 per share, in the first
half last year.
Roy E. Campbell, Chairman and Chief Executive Officer, said, "In the Roofing
Products sector, continued growth in demand for our Elk subsidiary's patented
Enhanced High Definition(R) and Raised Profile(TM) Prestique(R) premium
laminated fiberglass asphalt shingles accounted for most of the increase in
second quarter and first half sales.
/more
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PRESS RELEASE
Elcor Corporation Quarterly Results
January 16, 1997
Add One
"Our new major asphalt roofing plant at Shafter, California achieved a break-
even level of operations for the first time during this year's second quarter.
Operating profits at this plant in October and November were largely offset
during the seasonally slow month of December. We expect the new plant should
substantially increase its contribution to earnings with the seasonal pickup in
demand this spring.
"Start-up operations at Elk's new nonwoven fiberglass mat plant at Ennis, Texas
continued during the second quarter. This new plant is now supplying all three
of Elk's asphalt roofing plants with nonwoven fiberglass roofing mats, and it
will begin supplying other manufacturers' plants with nonwoven fiberglass
roofing mats this spring. During this year's second quarter, only $88,000 of
deferred preoperating costs at the new Ennis facility were capitalized.
"The company's Industrial Products segment achieved improved operating results
primarily because of increased fees for use of Elcor's cryogenic technology
generated by Ortloff Engineers, LTD.," he said.
FINANCIAL POSITION
Elcor's financial position remains strong. First half cash flows from
operating activities of $25.8 million fully covered the $11.9 million spent in
investing activities and permitted us to reduce long-
/more
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PRESS RELEASE
Elcor Corporation Quarterly Results
January 16, 1997
Add Two
term debt by $14 million from $53 million at June 30, 1996 to $39 million at
December 31, 1996, the low point in our working capital cycle. In the second
quarter, the company increased its unsecured long-term revolving credit
facilities to $80 million through October 31, 1999. The increased credit
facilities will be used to finance both the seasonal pickup in working capital
needs and the strong growth in demand expected in the year ahead. At December
31, 1996, shareholders' equity was $107.5 million; total capital was $146.5
million; long-term debt as a percent of total capital was 26.6% and the current
ratio was 2.4:1.
OUTLOOK
Campbell said, "We continue to expect that strong demand for Elk's patented
Enhanced High Definition and Raised Profile Prestique shingles will boost
shipments and sales to record levels for fiscal 1997. For the third quarter,
we continue to believe that earnings per share should be in the general range
of, or possibly lower than, the fiscal 1996 comparable quarter because the
manufacturing output and sales at the new plants may be below the break-even
point during this seasonally slow quarter. However, fourth quarter sales and
earnings should benefit from the seasonal increase in demand for products
produced by these two major new facilities. Our forecast for earnings per
share for the 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.
/more
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PRESS RELEASE
Elcor Corporation Quarterly Results
January 16, 1997
Add Three
"Longer term, our significant investments to expand capacity should enable
Elcor to achieve strong growth in sales and earnings over the next several
years," he 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 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 consistently 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 Forms 8-K dated October 16,
1996 and January 16, 1997.
_ _ _ _ _ _ _ _
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
January 16, 1997
Add Four
<TABLE>
<CAPTION>
CONDENSED RESULTS OF OPERATIONS
(Unaudited, $ in thousands)
Second Quarter Trailing
Three Months Ended Six Months Ended Twelve Months Ended
December 31, December 31, December 31,
1996 1995 1996 1995 1996 1995
-------- -------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
SALES $ 50,636 $ 45,362 $ 115,172 $ 93,890 $ 217,744 $ 178,501
-------- -------- --------- -------- --------- ---------
COSTS AND EXPENSES:
Cost of sales 39,242 33,965 89,766 69,821 168,467 132,649
Selling, general & administrative 7,680 7,353 15,577 14,105 30,593 28,163
Reduction in value of assets 0 558 0 558 1,595 0
Interest expense, net 52 19 213 44 352 76
-------- -------- --------- -------- --------- ---------
Total Costs and Expenses 46,974 41,895 105,556 84,528 201,007 160,888
-------- -------- --------- -------- --------- ---------
INCOME BEFORE INCOME TAXES 3,662 3,467 9,616 9,362 16,737 17,613
Provision for income taxes 1,353 1,343 3,539 3,575 6,163 6,591
-------- -------- --------- -------- --------- ---------
NET INCOME $ 2,309 $ 2,124 $ 6,077 $ 5,787 $ 10,574 $ 11,022
======== ======== ========= ======== ========= =========
NET INCOME PER SHARE $ 0.26 0.24 $ 0.69 $ 0.65 $ 1.20 $ 1.25
======== ======== ========= ======== ========= =========
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 8,843 8,838 8,818 8,840 8,845 8,821
======== ======== ========= ======== ========= =========
</TABLE>
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PRESS RELEASE
Elcor Corporation Quarterly Results
January 16, 1997
Add Five
<TABLE>
<CAPTION>
CONDENSED BALANCE SHEET
(Unaudited, $ in thousands)
December 31,
ASSETS 1996 1995
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<S> <C> <C>
Cash and cash equivalents $ 2,917 $ 5,168
Receivables, net 29,207 26,192
Inventories 21,445 17,097
Deferred income taxes 2,647 1,996
Prepaid expenses and other 2,483 1,433
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Total Current Assets 58,699 51,886
Property, plant and equipment, net 118,147 92,912
Net assets of discontinued operations 3,012 7,175
Other assets 1,285 1,753
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Total Assets $ 181,143 $ 153,726
========= =========
<CAPTION>
December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995
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<S> <C> <C>
Accounts payable & accrued liabilities $ 24,681 $ 24,706
Current maturities on long-term debt 0 0
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Total Current Liabilities 24,681 24,706
Long-term debt, net 39,000 25,000
Deferred income taxes 10,009 5,295
Shareholders' equity 107,453 98,725
--------- ---------
Total Liabilities and Shareholders' Equity $ 181,143 $ 153,726
========= =========
</TABLE>
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PRESS RELEASE
Elcor Corporation Quarterly Results
January 16, 1997
Add Six
<TABLE>
<CAPTION>
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited, $ in thousands)
For the Six Months Ended
December 31,
1996 1995
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<S> <C> <C>
CASH FLOWS FROM:
OPERATING ACTIVITIES
Net income $ 6,077 $ 5,787
Adjustments to net income
Depreciation and amortization 3,872 1,509
Reduction in value of assets 0 558
Deferred income taxes 1,760 1,715
Changes in assets and liabilities:
Trade receivables 13,275 6,718
Inventories 5,303 (5,396)
Prepaid expenses and other (527) 1,498
Accounts payable and accrued liabilities (3,913) 3,309
--------- ---------
Net cash from operating activities 25,847 15,698
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INVESTING ACTIVITIES
Additions to property, plant & equipment (11,794) (19,782)
Other (57) (401)
--------- ---------
Net cash from investing activities (11,851) (20,183)
--------- ---------
FINANCING ACTIVITIES
Long-term borrowings (repayments) (14,000) 6,600
Dividends on common stock (1,230) (1,048)
Treasury stock transactions and other, net 407 370
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Net cash from financing activities (14,823) 5,922
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (827) 1,437
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 3,744 3,731
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,917 $ 5,168
========= =========
</TABLE>
