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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) April 16, 1998
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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 April 16, 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 April 16, 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: April 16, 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
4
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C>
99.1 Press release dated April 16, 1998 of Elcor Corporation.
</TABLE>
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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 HIGHER FISCAL 1998 THIRD QUARTER
SALES AND EARNINGS; ALSO EXPECTS SUBSTANTIALLY HIGHER
FOURTH QUARTER AND FISCAL YEAR RESULTS
DALLAS, TEXAS, April 16, 1998 . . . . Elcor Corporation announced today that
net income for the third quarter ending March 31, 1998, rose 29% to $3,369,000,
or $.25 per diluted share, from $2,612,000, or $.20 per diluted share, in the
year-ago quarter. Sales increased 4% to $ 59.2 million from $57.1 million last
year. Both the roofing products and industrial products sectors achieved
higher sales and operating profits in the third quarter this year as compared
to the year-ago quarter.
Harold K. Work, Chairman and Chief Executive Officer, said, "Third quarter
sales were held back by El Nino's impact on the West Coast and in the
Southeastern United States as many contractors were not able to replace leaking
roofs during the extended periods of heavy rainfall. As a result, we expect
that demand for Elk Prestique(R) shingles should rise in the months ahead as
contractors tackle a backlog of roof replacement work. Presently, we expect to
report substantially higher sales and earnings for our fourth quarter and
fiscal year ending June 30, 1998."
For the nine months ending March 31, 1998, net income rose 35% to $11,711,000
or $.87 per diluted
\more
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PRESS RELEASE
Elcor Corporation Quarterly Results
April 16, 1998
Add One
share, from $8,689,000, or $.65 per diluted share, last year. Sales increased
12% to $193.7 million from $172.3 million in the first nine months last year.
Elcor's Roofing Products segment continues to see growing demand for its Elk
subsidiary's patented Enhanced High Definition(R) and Raised Profile(TM)
Prestique premium laminated fiberglass asphalt shingles. With shipments of Elk
Prestique shingles having reached a record level for any third quarter, Elk has
begun implementing a series of small price increases in each of its markets.
El Nino's punishing high winds and heavy rainfall across much of the nation
this winter is expected to significantly increase the level of demand for Elk
Prestique laminated shingles during the seasonally stronger June and September
quarters. In addition, Elk expects to see sharply higher demand from a broader
customer base for its nonwoven fiberglass roofing mats during this seasonally
stronger period.
Elk's new Shafter, California Prestique laminated shingle plant and Elk's new
Ennis, Texas nonwoven fiberglass roofing mat plant are both performing well and
are now positioned to supply high quality laminated shingles and roofing mats
to satisfy the growing demand for these products in the months ahead.
Elcor's Industrial Products segment again achieved sharply higher sales and
operating profits in this year's March quarter, continuing the strong
turnaround which began in the June quarter of fiscal
\more
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PRESS RELEASE
Elcor Corporation Quarterly Results
April 16, 1998
Add Two
1997. Third quarter sales rose 30% from the year-ago period, paced by
accelerating demand for Chromium Corporation's Compushield(R) conductive
coatings and conductive gaskets used in the wireless digital telecommunications
and other electronic equipment industries.
FINANCIAL POSITION
Elcor's financial position remains strong. For the first nine months of fiscal
1998, net cash flows from operating activities of $12.3 million fully covered
the $7.4 million spent in net investing activities and permitted a $3.9 million
reduction in long-term debt from $52.6 million at June 30, 1997 to $48.7
million at March 31, 1998.
At March 31, 1998, shareholders' equity was $122.6 million; total capital was
$171.3 million; long-term debt as a percent of total capital was 28%; and the
current ratio was 3.7:1.
OUTLOOK
Mr. Work said, "At the present time, the outlook appears to be good for
substantially higher fiscal 1998 sales and earnings as a result of growing
demand for Elk's patented Prestique premium laminated fiberglass asphalt
shingles and nonwoven fiberglass roofing mats, as well as for our industrial
products and services. Elcor expects that sales and earnings for our fourth
quarter ending June 30, 1998 will be substantially higher than the year-ago
quarter as a result of improved demand for our products and higher operating
levels for our two new major roofing products manufacturing plants. Looking
ahead to the longer term, we have made and are continuing to make the
investments
\more
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PRESS RELEASE
Elcor Corporation Quarterly Results
April 16, 1998
Add Three
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," he 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 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 Forms 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 Quarterly Results
April 16, 1998
Add Four
CONDENSED RESULTS OF OPERATIONS
(Unaudited, $ in thousands)
<TABLE>
<CAPTION>
Third Quarter Trailing
Three Months Ended Nine Months Ended Twelve Months Ended
March 31, March 31, March 31,
1998 1997 1998 1997 1998 1997
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<S> <C> <C> <C> <C> <C> <C>
SALES $59,225 $57,120 $193,706 $172,292 $252,170 $224,816
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COSTS AND EXPENSES:
Cost of sales 45,225 45,347 147,927 135,113 191,043 175,497
Selling, general & administrative 8,257 7,609 25,446 23,186 33,014 30,890
Reduction in value of assets 0 0 0 0 0 1,037
Interest expense, net 514 34 1,887 247 2,776 325
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Total Costs and Expenses 53,996 52,990 175,260 158,546 226,833 207,749
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INCOME BEFORE INCOME TAXES 5,229 4,130 18,446 13,746 25,337 17,067
Provision for income taxes 1,860 1,518 6,735 5,057 9,313 6,202
------- ------- -------- -------- -------- --------
NET INCOME $ 3,369 $ 2,612 $ 11,711 $ 8,689 $ 16,024 $ 10,865
======= ======= ======== ======== ======== ========
NET INCOME PER SHARE
Basic $ 0.25 $ 0.20 $ 0.88 $ 0.66 $ 1.21 $ 0.83
======= ======= ======== ======== ======== ========
Diluted $ 0.25 $ 0.20 $ 0.87 $ 0.65 $ 1.19 $ 0.82
======= ======= ======== ======== ======== ========
AVERAGE COMMON SHARES OUTSTANDING
Basic 13,269 13,202 13,234 13,170 13,224 13,165
======= ======= ======== ======== ======== ========
Diluted 13,544 13,362 13,504 13,272 13,480 13,281
======= ======= ======== ======== ======== ========
</TABLE>
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PRESS RELEASE
Elcor Corporation Quarterly Results
April 16,1998
Add Five
CONDENSED BALANCE SHEET
(Unaudited, $ in thousands)
<TABLE>
<CAPTION>
March 31,
ASSETS 1998 1997
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<S> <C> <C>
Cash and cash equivalents $ 2,823 $ 2,802
Receivables, net 47,773 43,469
Inventories 35,006 24,026
Deferred income taxes 2,296 2,713
Prepaid expenses and other 2,816 3,730
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Total Current Assets 90,714 76,740
Property, plant and equipment, net 118,454 117,781
Other assets 1,749 3,380
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Total Assets $ 210,917 $ 197,901
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<CAPTION>
March 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1998 1997
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Accounts payable & accrued liabilities $ 24,669 $ 26,673
Current maturities on long-term debt 0 0
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Total Current Liabilities 24,669 26,673
Long-term debt 48,700 49,900
Deferred income taxes 14,920 12,076
Shareholders' equity 122,628 109,252
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Total Liabilities and
Shareholders' Equity $ 210,917 $ 197,901
========= =========
</TABLE>
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PRESS RELEASE
Elcor Corporation Quarterly Results
April 16,1998
Add Six
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited, $ in thousands)
<TABLE>
<CAPTION>
For the Nine Months Ended
March 31,
1998 1997
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<S> <C> <C>
CASH FLOWS FROM:
OPERATING ACTIVITIES
Net income $ 11,711 $ 8,689
Adjustments to net income
Depreciation and amortization 8,116 5,937
Deferred income taxes 1,554 3,761
Changes in assets and liabilities:
Trade receivables (4,595) (987)
Inventories (1,579) 2,722
Prepaid expenses and other 756 (1,774)
Accounts payable and accrued liabilities (3,616) (1,921)
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Net cash from operating activities 12,347 16,427
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INVESTING ACTIVITIES
Additions to property, plant & equipment (9,079) (13,490)
Other 1,718 856
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Net cash from investing activities (7,361) (12,634)
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FINANCING ACTIVITIES
Long-term borrowings (3,900) (3,100)
Dividends on common stock (2,385) (1,846)
Treasury stock transactions and other, net 521 211
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Net cash from financing activities (5,764) (4,735)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (778) (942)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 3,601 3,744
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,823 $ 2,802
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</TABLE>
