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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) January 20, 1998
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ELCOR CORPORATION
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(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
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)
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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 20, 1998, 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. During fiscal 1997, the company completed the construction of
a plant at the company's Ennis, Texas facility to manufacture
nonwoven fiberglass roofing mats and other mats for a variety
of industrial uses. As a new facility, its 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 this
new plant 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 and certain
affiliates, 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, 1997 for further information about risks and uncertainties.
Item 7. Exhibits
99.1 Press release dated January 20, 1998 of Elcor Corporation.
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 20, 1998 /s/ Richard J. Rosebery
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Richard J. Rosebery
Vice Chairman, Chief Financial and
Administrative Officer and Treasurer
/s/ Leonard R. Harral
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Leonard R. Harral
Vice President and Chief
Accounting Officer
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Exhibit Index
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Exhibit
Number Description
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<S> <C>
99.1 -- Press Release dated January 20, 1998
of Elcor Corporation.
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FOR FURTHER INFORMATION: TRADED: NYSE
SYMBOL: ELK
Richard J. Rosebery, Vice Chairman,
Chief Financial and Administrative Officer,
and Treasurer
(972) 851-0510
PRESS RELEASE
FOR IMMEDIATE RELEASE
ELCOR REPORTS SHARPLY HIGHER FISCAL 1998
SECOND QUARTER SALES AND EARNINGS
DALLAS, TEXAS, January 20, 1998 . . . . Elcor Corporation announced today that
net income for the second quarter ending December 31, 1997, rose 28% to
$2,948,000, or $.22 per diluted share, from $2,309,000, or $.17 per diluted
share, in the year-ago quarter. Sales increased 20% to $61.0 million from $50.6
million last year. Record second quarter sales were aided by El Nino's effect
on increased demand for our Elk premium laminated shingles supplied by its new
Shafter, California plant and by a strong increase in industrial products
sales.
For the six months ending December 31, 1997, net income rose 37% to $8,342,000,
or $.62 per diluted share, from $6,077,000, or $.46 per diluted share, last
year. Sales increased 17% to $134.5 million from $115.2 million in the first
half last year.
Harold K. Work, Chairman and Chief Executive Officer, said, "The Roofing
Products sector continued to see growing demand for our Elk subsidiary's
patented Enhanced High Definition(R) and Raised Profile(TM) Prestique(R)
premium laminated fiberglass asphalt shingles. Elk's new Shafter,
\more
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PRESS RELEASE
Elcor Corporation
January 20, 1998
Add One
California plant responded well as the El Nino weather phenomenon sparked a
surge in West-Coast demand for our Elk Prestique premium laminated fiberglass
asphalt shingles during the last two quarters. Elk's new Ennis, Texas nonwoven
fiberglass roofing mat plant is also performing well and is now positioned to
supply high quality roofing mats to satisfy the growing need for these
products."
Work said, "Elcor's Industrial Products segment again achieved sharply higher
sales and operating profits in this year's December quarter, continuing the
strong turnaround which began in the June quarter of fiscal 1997. Sales rose
about 87% above the year-ago period, paced by accelerating demand for Chromium
Corporation's Compushield(R) Conductive Coatings used in telecommunications and
other electronic equipment industries. In addition, increasing use of Ortloff
Engineers' technology licensing and consulting services for the natural gas
processing industry also contributed to significantly improved results, as did
higher demand for Chromium's remanufactured diesel engine components for the
transportation industry," he said.
FINANCIAL POSITION
Elcor's financial position remains strong. First-half net cash flows from
operating activities of $22.8 million fully covered the $5.5 million spent in
investing activities and permitted a $14.9 million reduction in long-term debt
from $52.6 million at June 30, 1997 to $37.7 million at December 31, 1997, the
low point in our working capital cycle. In the second quarter, the company
\more
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PRESS RELEASE
Elcor Corporation
January 20, 1998
Add Two
increased its unsecured long-term revolving credit facilities to $100 million
through October 31, 2002. The increased credit facilities will be available to
finance both the seasonal pickup in working capital needs and the strong growth
in demand expected in the years ahead. At December 31, 1997, shareholders'
equity was $119.6 million; total capital was $157.3 million; long-term debt as
a percent of total capital was 24%; and the current ratio was 3.2:1.
OUTLOOK
"At the present time, we continue to expect that growing demand for Elk's
patented Prestique premium laminated fiberglass asphalt shingles and for our
industrial products and services should substantially boost fiscal 1998 sales
and earnings. We also expect that fiscal year earnings gains will continue to
reflect greater growth in our seasonally stronger first and fourth fiscal
quarters. Looking ahead to the longer term, we have made and are continuing to
make the investments to expand capacity and to develop new value added products
and services in high growth niche markets that should drive strong growth in
sales and earnings in the years ahead," Work concluded.
SAFE HARBOR PROVISIONS
In accordance with the 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
\more
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PRESS RELEASE
Elcor Corporation
January 20, 1998
Add Three
could include, but are not limited to, changes in demand, prices, raw material
costs, transportation costs, 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, 1997 and its
subsequent Form 10-Q and Forms 8-K.
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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.
/more
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PRESS RELEASE
Elcor Corporation
January 20, 1998
Add Four
CONDENSED RESULTS OF OPERATIONS
(Unaudited, $ in thousands)
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Second Quarter Trailing
Three Months Ended Six Months Ended Twelve Months Ended
December 31, December 31, December 31,
1997 1996 1997 1996 1997 1996
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SALES $ 60,965 $ 50,636 $134,481 $115,172 $250,065 $217,744
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COSTS AND EXPENSES:
Cost of Sales 47,301 39,242 102,702 89,766 191,165 169,025
Selling, general and administrative 8,384 7,680 17,189 15,577 32,366 30,593
Reduction in value of assets 0 0 0 0 0 1,037
Interest expense, net 614 52 1,373 213 2,296 352
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Total Costs and Expenses 56,299 46,974 121,264 105,556 225,827 201,007
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INCOME BEFORE INCOME TAXES 4,666 3,662 13,217 9,616 24,238 16,737
Provision for income taxes 1,718 1,353 4,875 3,539 8,971 6,163
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NET INCOME $ 2,948 $ 2,309 $ 8,342 $ 6,077 $ 15,267 $ 10,574
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NET INCOME PER SHARE
Basic $ 0.22 $ 0.18 $ 0.63 $ 0.46 $ 1.16 $ 0.80
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Diluted $ 0.22 $ 0.17 $ 0.62 $ 0.46 $ 1.14 $ 0.80
======== ======== ======== ======== ======== ========
AVERAGE COMMON SHARES OUTSTANDING
Basic 13,231 13,170 13,217 13,154 13,207 13,151
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Diluted 13,523 13,265 13,484 13,227 13,434 13,268
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PRESS RELEASE
Elcor Corporation Quarterly Results
January 20, 1998
Add Five
CONDENSED BALANCE SHEET
(Unaudited, $ in thousands)
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December 31,
ASSETS 1997 1996
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Cash and cash equivalents $ 4,450 $ 2,917
Receivables, net 34,757 29,207
Inventories 29,419 21,445
Deferred income taxes 2,342 2,647
Prepaid expenses and other 3,173 2,483
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Total Current Assets 74,141 58,699
Property, plant and equipment, net 117,860 118,147
Other assets 3,221 4,297
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Total Assets $195,222 $181,143
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December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996
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Accounts payable & accrued liabilities $ 23,461 $ 24,681
Current maturities on long-term debt 0 0
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Total Current Liabilities 23,461 24,681
Long-term debt 37,700 39,000
Deferred income taxes 14,508 10,009
Shareholders' equity 119,553 107,453
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Total Liabilities and Shareholders' Equity $195,222 $181,143
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PRESS RELEASE
Elcor Corporation
January 20, 1998
Add Six
Condensed Statement of Cash Flows
(Unaudited, $ in thousands)
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For the Six Months Ended
December 31,
1997 1996
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CASH FLOWS FROM:
OPERATING ACTIVITIES
Net income $ 8,342 $ 6,077
Adjustments to net income
Depreciation and amortization 5,370 3,872
Deferred income taxes 1,096 1,760
Changes in assets and liabilities:
Trade receivables 8,421 13,275
Inventories 4,008 5,303
Prepaid expenses and other 399 (527)
Accounts payable and accrued liabilities (4,825) (3,913)
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Net cash from operations 22,811 25,847
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INVESTING ACTIVITIES
Additions to property, plant & equipment (5,748) (11,794)
Other 254 (57)
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Net cash from investing activities (5,494) (11,851)
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FINANCING ACTIVITIES
Long-term borrowings (14,900) (14,000)
Dividends on common stock (1,587) (1,230)
Treasury stock transactions and other, net 19 407
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Net cash from financing activities (16,468) (14,823)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 849 (827)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 3,601 3,744
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,450 $ 2,917
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