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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) September 28, 1998
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 September 28, 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.
The above press release contains "forward-looking statements" about its
prospects for the future, and from time to time the company may make others.
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. Further,
changes in building codes and other standards from time to time
can cause changes in demand, or increases in costs that may not
be passed through to customers.
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. The company also expects to make up to $100
million in new investments to expand capacity and improve
productivity at existing plants and to build new plants over the
next three years. Progress in achieving anticipated operating
efficiencies and financial results is difficult to predict for
new plant facilities. If such progress is slower than
anticipated, if substantial cost overruns occur in building new
plants, or if demand for products produced at new plants does not
meet current expectations, operating results could be adversely
affected.
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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.
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.
6. Even with fully developed action and contingency plans for Year
2000 readiness, it is possible that the company will not achieve
full internal readiness. Further, the company's business may be
adversely affected by external Year 2000 disruption that the
company is not in position to control, including but not limited
to potential disruptions in power and other energy supplies,
telecommunications or other infrastructure, potential disruptions
in transportation and the supply of raw materials, and potential
disruptions in financial and banking systems. Year 2000 problems
therefore could result in unanticipated expenses or liabilities,
production or disruption delays or other adverse effects on the
company.
7. Although the company currently anticipates that most of its needs
for new capital in the near future will be met with internally
generated funds, significant increases in interest rates could
substantially affect its borrowing costs under its existing loan
facility, or its cost of alternative sources of capital.
8. Each of the company's businesses, especially its Conductive
Coatings Division's business, is subject to the risks of
technological changes that could affect the demand for or the
relative cost of the company's products and services, or the
method and profitability of the method of distribution or
delivery of such products and services. In addition, the
company's businesses each could suffer significant setbacks in
revenues and operating income if it lost one or more of its
largest customers.
9. Although the company insures itself against physical loss to its
manufacturing facilities, including business interruption losses,
natural or other disasters and accidents, including but not
limited to fire, earthquake, damaging winds and explosions,
operating results could be adversely affected if any of its
manufacturing facilities became inoperable for an extended period
of time due to such events.
Parties are cautioned not to rely on any such forward-looking beliefs or
judgments in making investment decisions.
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Reference is made to the company's Annual Report on Form 10-K for the year ended
June 30, 1998, for further information about risks and uncertainties.
Item 7. Exhibits
99.1 Press release dated September 28, 1998 of Elcor Corporation.
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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: September 28, 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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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
99.1 Press release dated September 28, 1998 of Elcor Corporation.
</TABLE>
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EXHIBIT 99.1
FOR FURTHER INFORMATION: TRADED: NYSE
SYMBOL: ELK
Richard J. Rosebery, Vice Chairman
and Chief Financial Officer
(972) 851-0510
PRESS RELEASE
FOR IMMEDIATE RELEASE
ELCOR BOOSTS CASH DIVIDEND 16.7%;
ANNOUNCES NEW STOCK REPURCHASE PROGRAM
DALLAS, TEXAS, September 28, 1998 . . . . Elcor Corporation (NYSE: ELK)
announced that its Board of Directors today boosted the regular quarterly cash
dividend rate by 16.7% to $.07 per share from $.06 per share. The new $.07 per
share regular quarterly cash dividend will be payable November 10, 1998, to
shareholders of record October 15, 1998.
Elcor also announced that its Board of Directors today authorized the repurchase
of up to $10 million of its common stock from time to time in the open market in
accordance with SEC Rule 10b-18. Based on Elcor's current price on the New York
Stock Exchange, the repurchase could involve about 460,000 shares, or about 3.5%
of its 13,114,000 shares of common stock outstanding at the September 8, 1998
record date for its annual shareholders meeting.
Commenting on the Board's action, Harold K. Work, Elcor's Chairman, President
and Chief Executive Officer, said, "As we are moving forward to successfully
improve our strategic leadership positions in both the Roofing Products and
Industrial Products business segments, we are pleased to reward our shareholders
for their support. Our fiscal year ending June 30, 1998 performance reflects the
success of our efforts as net income rose 49% to $18.3 million, or $1.36 per
diluted share, from $12.3 million, or $.92 per diluted share, last year.
Further, we believe the investments we have made and are continuing to make
provide Elcor with the potential to more than double earnings over the next
three years and to continue strong growth in the new millennium," he concluded.
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Richard J. Rosebery, Elcor's Vice Chairman and Chief Financial Officer, said,
"In view of Elcor's strong financial position, favorable outlook, and current
stock price, we believe that repurchase of our shares represents an attractive
investment opportunity for the company. Repurchased shares will be used for
general corporate purposes, including employee stock compensation and benefit
plans.
"The increase in the cash dividend and the new authorization to repurchase stock
reflect the Board's confidence in the outlook for strong growth in sales and
earnings in the years ahead. Further, the repurchase of shares over a period of
time should improve earnings per share and return on shareholders' equity," he
concluded.
The current declaration represents the company's 75th quarterly cash dividend
paid on its common stock.
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 8-K dated September 28, 1998, and its Form 10-K for the year ended June
30, 1998.
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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.
