<PAGE> 1
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) August 17, 1999
-----------------
ELCOR CORPORATION
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
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
- -------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (972)851-0500
-------------
</TABLE>
NOT APPLICABLE
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events
On August 17, 1999, 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/or 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 about $137 million in new
investments to expand capacity and improve productivity at existing
plants and to build new plants over a three year period beginning in
fiscal 2000. 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.
2
<PAGE> 3
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 Cybershield's conductive
coatings 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.
3
<PAGE> 4
10. Each of the company's businesses is actively involved in the
development of new products, processes and services which are
expected to contribute to the company's long-term growth and
earnings. If such development activities are not successful, or the
company cannot provide the requisite financial and other resources to
successfully commercialize such developments, the growth of future
sales and earnings may be adversely affected.
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, 1998, for further information about risks and uncertainties.
Item 7. Exhibits
27.1 Financial Data Schedule
99.1 Press release dated August 17, 1999 of Elcor Corporation.
4
<PAGE> 5
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 17, 1999 /s/ Richard J. Rosebery
----------------------------- ------------------------------------
Richard J. Rosebery
Vice Chairman, Chief Financial and
Administrative Officer, and Treasurer
/s/ Leonard R. Harral
------------------------------------
Leonard R. Harral
Vice President and Chief
Accounting Officer
5
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
27.1 Financial Data Schedule
99.1 Press Release dated August 17, 1999 of Elcor
Corporation
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> JUN-30-1999
<CASH> 4,186
<SECURITIES> 0
<RECEIVABLES> 73,833
<ALLOWANCES> 967
<INVENTORY> 25,770
<CURRENT-ASSETS> 113,285
<PP&E> 212,704
<DEPRECIATION> 76,984
<TOTAL-ASSETS> 252,182
<CURRENT-LIABILITIES> 33,884
<BONDS> 63,000
0
0
<COMMON> 19,988
<OTHER-SE> 117,263
<TOTAL-LIABILITY-AND-EQUITY> 252,182
<SALES> 317,874
<TOTAL-REVENUES> 317,874
<CGS> 236,670
<TOTAL-COSTS> 276,369
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,975
<INCOME-PRETAX> 39,530
<INCOME-TAX> 14,247
<INCOME-CONTINUING> 25,283
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (4,340)
<NET-INCOME> 20,943
<EPS-BASIC> 1.07
<EPS-DILUTED> 1.05
</TABLE>
<PAGE> 1
EXHIBIT 99.1
Press Release dated August 17, 1999
of Elcor Corporation.
8
<PAGE> 2
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 THAT SHARPLY HIGHER SALES AND EARNINGS
DRIVE RECORD FOURTH QUARTER AND FISCAL 1999 RESULTS;
EXPECTS CONTINUING STRONG GROWTH IN FISCAL 2000 AND BEYOND;
SELECTS SITE FOR ITS NEW $70 MILLION LAMINATED SHINGLE PLANT;
ANNOUNCES NEW CYBERSHIELD CORPORATE IDENTITY
DALLAS, TEXAS, August 17, 1999 . . . . Elcor Corporation today reported record
results for both the fourth quarter and fiscal year ending June 30, 1999, that
surpassed record levels in the year-ago periods. Fourth quarter sales rose 21%
and net income rose 21% over the year-ago quarter, while fiscal year income
before a change in accounting principle rose 38% on a 19% gain in sales.
Harold K. Work, Chairman, President and Chief Executive Officer, said, "Sharply
higher fourth quarter and fiscal year results were driven by record shipments
of Elk Prestique(R) premium laminated fiberglass asphalt shingles. Growing
demand for Elk Prestique products and nonwoven fiberglass mats, along with the
rapidly accelerating demand for our Cybershield(TM) products used in digital
wireless cellular phones, should contribute to strong sales and earnings growth
in fiscal 2000."
OPERATING RESULTS
For the fourth quarter ending June 30, 1999, sales rose 21% to $90.1 million
from $74.5 million last year. Net income rose 21% to $8.0 million, or $.40 per
split-adjusted diluted share, from $6.6 million, or $.33 per split-adjusted
diluted share, in the year-ago quarter.
For the fiscal year ending June 30, 1999, sales rose 19% to $317.9 million from
$268.2 million in fiscal 1998. Income before a change in accounting principle
rose 38% to $25.3 million, or $1.27 per split-adjusted diluted share, from
$18.3 million, or $.90 per split-adjusted diluted share, last year.
All per share amounts are adjusted for a three-for-two stock split, in the form
of a stock dividend, declared in June 1999, and paid August 11, 1999.
NEW LAMINATED SHINGLE PLANT SITE ANNOUNCED
Mr. Work said, "Myerstown, Pennsylvania is the site selected for Elk's new $70
million premium laminated asphalt shingle plant. The new Myerstown plant will
be housed in a 415,000 square foot building to be constructed on a 125-acre
greenfield plant site. Contracts for site preparation and construction will be
awarded shortly with foundation work scheduled to be completed late this fall.
<PAGE> 3
PRESS RELEASE
Elcor Corporation Quarterly Results
August 17, 1999
Page 2
We plan to complete construction and commence operations in the December
quarter of 2000. The new plant should be in position to supply the rapidly
growing demand for Elk laminated shingles in the nation's eastern and north
central markets in 2001.
"Industry shipments of premium laminated shingles rose 17% in 1998 and
shipments rose another 24% in the first six months of 1999. The new Myerstown
plant will increase our laminated shingle capacity by about 38% and will
provide Elk with the capacity needed to keep up with this rapid growth in
demand," he said.
NEW CYBERSHIELD CORPORATE IDENTITY
Richard J. Rosebery, Vice Chairman of Elcor, said, "Cybershield is our new
corporate identity for Elcor's high-growth/high-tech shielding business that
has become the Western Hemisphere's leading supplier of electroless shielding
for plastic components used in digital wireless cellular telephones. In fiscal
1999, Cybershield supplied shielding products for over 20 million digital
wireless cellular phones, and we expect that demand could more than double in
fiscal 2000. Our shielding products reduce the emission of electromagnetic and
radio frequency interference given off by microchips and electronic components
to levels equal to or less than those required by the FCC. Rapidly expanding
technology is driving strong demand for Cybershield electroless coatings
because they provide superior shielding effectiveness at the higher frequencies
used to achieve faster microchip speeds.
"Cybershield's important telecommunications customers include Nokia, Motorola,
Lucent Technologies, AT&T, NEC, and Denso. Cybershield has earned the
leadership position in the high-growth/high-tech digital wireless cellular
phone market by consistently supplying superior quality products, making
deliveries on time and quickly responding to customers' needs with innovative
technical solutions that frequently enhance performance of their products," he
concluded.
FINANCIAL POSITION STRONG
In fiscal 1999, Elcor's already strong financial position improved further.
Return on average invested capital was 15.5%, and return on average
shareholders' equity was 20.8%. Strong cash flows from operations and a $15
million increase in debt funded a $12.1 million expansion in working capital;
$29.8 million of net investments; and $9.6 million of dividends and net stock
repurchases. At June 30, 1999, the company had $63 million of long-term debt,
$137 million of shareholders' equity, and $200 million of total capital.
Long-term debt as a percent of total capital was 31%, and the current ratio was
3.3:1.
OUTLOOK
Mr. Work said, "In the fiscal years since 1995, Elcor has achieved compound
annual growth rates of 18.9% for sales, 23.3% for operating income, and 31% for
increases in shareholder value. We plan to invest about $137 million over the
next three years to further expand capacity, improve productivity of existing
plants, and to develop new facilities for both our roofing and industrial
products segments to keep pace with rapidly growing demand in markets where we
have leadership positions. These present and future investments will also
support the introduction of new products and services that provide superior
value for our customers and earn premium pricing versus the competition.
<PAGE> 4
PRESS RELEASE
Elcor Corporation Quarterly Results
August 17, 1999
Page 3
"Presently, we look for growing demand for our patented Enhanced High
Definition(R) and Raised Profile(TM) Elk Prestique premium laminated fiberglass
asphalt shingles, nonwoven fiberglass mat products, and for our Cybershield
digital wireless cellular phone products to substantially boost fiscal 2000
sales and earnings. We expect these gains to continue being characterized by
greater growth in our seasonally stronger first and fourth quarters. Longer
term, we believe the investments we have made and are continuing to make
provide Elcor with the potential to achieve high growth rates in both 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. The statements that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements usually are accompanied by
words such as "outlook," "believe," "estimate," "potential," "project,"
"expect," "anticipate," "plan," "predict," "could," "should," "may," or similar
words that convey the uncertainty of future events or outcomes. These
statements are based on judgments the company believes are reasonable; however,
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, 1998, Forms 10-Q for the fiscal 1999
quarters ending September 30, 1998, December 31, 1998, and March 31, 1999, and
its Form 8-K dated August 17, 1999.
- - - - - - - -
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 currently are located in Tuscaloosa,
Alabama; Shafter, California; Dallas and Ennis, Texas; and a new facility will
be located in Myerstown, Pennsylvania. Its industrial products facilities are
located in Canton, Georgia; Cleveland, Ohio; Dallas, Lufkin, and Midland,
Texas.
<PAGE> 5
PRESS RELEASE
Elcor Corporation Quarterly Results
August 17, 1999
Page 4
CONDENSED RESULTS OF OPERATIONS
($ in thousands)
<TABLE>
<CAPTION>
Unaudited Audited
Three Months Ended Fiscal Year Ended
June 30, June 30,
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
SALES $ 90,072 $ 74,472 $ 317,874 $ 268,178
---------- ---------- ---------- ----------
COSTS AND EXPENSES:
Cost of sales 67,164 54,700 236,670 202,627
Selling, general & administrative 10,717 9,516 39,699 34,962
Interest expense, net 507 244 1,975 2,131
---------- ---------- ---------- ----------
Total Costs and Expenses 78,388 64,460 278,344 239,720
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 11,684 10,012 39,530 28,458
Provision for income taxes 3,720 3,399 14,247 10,134
---------- ---------- ---------- ----------
INCOME BEFORE CHANGE IN
ACCOUNTING PRINCIPLE 7,964 6,613 25,283 18,324
Cumulative effect of change in
accounting principle (a) 0 0 (4,340) 0
---------- ---------- ---------- ----------
NET INCOME $ 7,964 $ 6,613 $ 20,943 $ 18,324
========== ========== ========== ==========
INCOME PER COMMON SHARE-BASIC (b):
Before change in accounting principle $ 0.41 $ 0.33 $ 1.29 $ 0.92
Cumulative effect of change in
accounting principle 0.00 0.00 (0.22) 0.00
---------- ---------- ---------- ----------
Net Income Per Share-Basic $ 0.41 $ 0.33 $ 1.07 $ 0.92
========== ========== ========== ==========
INCOME PER COMMON SHARE-DILUTED (b):
Before change in accounting principle $ 0.40 $ 0.33 $ 1.27 $ 0.90
Cumulative effect of change in
accounting principle 0.00 0.00 (0.22) 0.00
---------- ---------- ---------- ----------
Net Income Per Share-Diluted $ 0.40 $ 0.33 $ 1.05 $ 0.90
========== ========== ========== ==========
AVERAGE COMMON SHARES OUTSTANDING (b)
Basic 19,514 19,922 19,546 19,868
========== ========== ========== ==========
Diluted 20,035 20,329 19,964 20,270
========== ========== ========== ==========
</TABLE>
(a) Represents cumulative effect of applying AICPA AcSec Statement of Position
98-5, "Reporting on the Costs of Start-Up Activities."
(b) References to number of shares and per share information have been
adjusted for a three-for-two stock split declared in June 1999.
<PAGE> 6
PRESS RELEASE
Elcor Corporation Quarterly Results
August 17, 1999
Page 5
CONDENSED BALANCE SHEET
(Audited, $ in thousands)
<TABLE>
<CAPTION>
June 30,
ASSETS 1999 1998
- ------ -------- --------
<S> <C> <C>
Cash and cash equivalents $ 4,186 $ 5,240
Receivables, net 72,866 56,450
Inventories 25,770 28,822
Deferred income taxes 2,111 1,789
Prepaid expenses and other 8,352 2,228
-------- --------
Total Current Assets 113,285 94,529
Property, plant and equipment, net 135,720 120,732
Other assets 3,177 1,783
-------- --------
Total Assets $252,182 $217,044
======== ========
</TABLE>
<TABLE>
<CAPTION>
June 30,
LIABILITIES AND SHAREHOLDERS' EQUITY 1999 1998
- ------------------------------------ -------- --------
<S> <C> <C>
Accounts payable and accrued liabilities $ 33,884 $ 27,207
Current maturities on long-term debt 0 0
-------- --------
Total Current Liabilities 33,884 27,207
Long-term debt, net 63,000 48,000
Deferred income taxes 18,047 15,881
Shareholders' equity 137,251 125,956
-------- --------
Total Liabilities and Shareholders' Equity $252,182 $217,044
======== ========
</TABLE>
<PAGE> 7
PRESS RELEASE
Elcor Corporation Quarterly Results
August 17, 1999
Page 6
CONDENSED STATEMENT OF CASH FLOWS
(Audited, $ in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended
June 30,
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM:
OPERATING ACTIVITIES
Net income $ 20,943 $ 18,324
Adjustments to net income
Depreciation and amortization 9,285 11,056
Deferred income taxes 2,283 3,010
Cumulative effect of accounting change 4,340 0
Changes in assets and liabilities:
Trade receivables (15,420) (13,272)
Inventories 3,375 3,384
Prepaid expenses and other (6,552) 1,783
Accounts payable and accrued liabilities 5,137 (1,078)
-------- --------
Net cash from operations 23,391 23,207
-------- --------
INVESTING ACTIVITIES
Additions to property, plant & equipment (30,048) (14,288)
Insurance proceeds from involuntary conversion 5,687 0
Acquisition of business, net of cash (5,588) 0
Other, net 152 1,674
-------- --------
Net cash from investing activities (29,797) (12,614)
-------- --------
FINANCING ACTIVITIES
Long-term borrowings, net 15,000 (4,600)
Dividends on common stock (3,705) (3,175)
Treasury stock transactions and other, net (5,943) (1,179)
-------- --------
Net cash from financing activities 5,352 (8,954)
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,054) 1,639
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 5,240 3,601
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,186 $ 5,240
======== ========
</TABLE>
