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EXHIBIT 99.1
Press Release dated August 14, 2000
of Elcor Corporation.
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[ELCOR CORPORATION LETTERHEAD]
PRESS RELEASE TRADED: NYSE
FOR IMMEDIATE RELEASE SYMBOL: ELK
FOR FURTHER INFORMATION:
Richard J. Rosebery Harold R. Beattie
Vice Chairman, Chief Financial Vice President-Finance
and Administrative Officer and Treasurer
(972) 851-0510 (972) 851-0523
ELCOR REPORTS RECORD FISCAL 2000 OPERATING RESULTS;
CYBERSHIELD AWARDED 5 NEW PHONE PROJECTS; NEW MYERSTOWN
PLANT ON SCHEDULE; FOURTH QUARTER RESULTS IMPACTED BY SLOWER
DEMAND AND HIGHER ASPHALT RAW MATERIAL COSTS
DALLAS, TEXAS, August 14, 2000 . . . . Elcor Corporation today reported record
results for its fiscal year ending June 30, 2000, with income before a change in
accounting principle increasing 18% on a 10% increase in sales. For the fourth
quarter ending June 30, 2000, net income and sales were 22% and 9% lower than
the record year-ago quarter, primarily due to slower demand and escalating
asphalt raw material costs.
Harold K. Work, Chairman, President and Chief Executive Officer, said, "Fiscal
2000 results reflect growing demand and profits in our core roofing products
business and our rapidly growing electronics manufacturing services business. We
are significantly expanding manufacturing capacity for both of these businesses,
which should enable us to keep pace with strong growth in the years ahead. Our
fourth quarter sales were lower than the record year-ago quarter as demand
slackened following a 33% increase in third quarter roofing products sales.
Lower fourth quarter net income also reflected higher asphalt raw material
costs, as well as consolidation expenses for Chromium Corporation. In effect,
our roofing products customers significantly increased shingle purchases during
the March quarter before scheduled price increases, thereby improving our third
quarter results at the expense of the fourth quarter," he said.
OPERATING RESULTS
For the fiscal year ending June 30, 2000, income before a change in accounting
principle rose 18% to $29.9 million, or $1.49 per diluted share, from $25.3
million, or $1.27 per diluted share, last year. Net Income rose 43% to $29.9
million, or $1.49 per diluted share, from $20.9 million, or $1.05 per diluted
share, last year. Sales rose 10% to $350.3 million from $317.9 million in fiscal
1999.
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PRESS RELEASE
Elcor Corporation Quarterly Results
August 14, 2000
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For the fiscal year ending June 30, 2000, roofing products' operating profits
rose 17.7% to $53,024,000 on a 9.5% gain in sales to $305,396,000; electronics
manufacturing services' operating profits rose 44.9% to $4,904,000 on a 49.4%
gain in sales to $33,420,000; and industrial products incurred a $4,653,000
operating loss on 31.3% lower sales of $11,300,000.
For the fourth quarter ending June 30, 2000, net income of $6.2 million, or $.31
per diluted share, was 22% lower than $8.0 million, or $.40 per diluted share,
in the year-ago quarter. Sales of $82.3 million were 9% lower than $90.1 million
last year.
CYBERSHIELD AWARDED FIVE NEW WIRELESS DIGITAL CELLULAR PHONE PROJECTS
During the last four months, Cybershield has been awarded a total of five new
digital wireless cellular models by three of the nation's four largest
telecommunications handset manufacturers. Production ramp-ups on one new model
will begin in the September quarter for each of these three major manufacturers,
with the other two models ramping up into production as the year progresses. In
addition, other significant awards appear likely as the year progresses. New
model production, along with ongoing production of other phone models for each
of the nation's four largest digital handset manufacturers, is expected to
generate strong year-over-year gains in sales and operating profit by the first
half of calendar 2001.
NEW MYERSTOWN SHINGLE PLANT IS SCHEDULED TO COMMENCE PRODUCTION BY THE
DECEMBER QUARTER OF CALENDAR 2000
Mr. Work said, "Construction of Elk's new $75 million premium laminated asphalt
shingle plant in Myerstown, Pennsylvania is nearing completion. The 415,000
square foot plant is being constructed on a 125-acre greenfield plant site.
Myerstown is on schedule to commence limited production of laminated shingles by
the December quarter of calendar 2000. With Myerstown, Elk will be in a strong
position to supply the rapidly growing demand for laminated shingles in the
nation's eastern and north central markets in 2001.
"Industry shipments of premium laminated shingles rose 17.7% in 1999, following
growth of 17.0% in 1998. The new Myerstown plant will increase Elk's 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.
FINANCIAL POSITION STRONG
Elcor continues to maintain a strong financial position. For fiscal 2000, return
on average invested capital was 14.4% and return on average shareholder's equity
was 20.3%. Strong cash flows from operations of $45.0 million and a $28.3
million increase in debt funded $67.5 million of net capital investments and
$5.3 million of dividends and net treasury stock repurchases. At June 30, 2000,
the company had $91.3 million of total debt, $161.9 million of shareholders'
equity and $253.2 million of total capital. Total debt
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PRESS RELEASE
Elcor Corporation Quarterly Results
August 14, 2000
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represented 1.6x EBITDA (earnings before interest, taxes, depreciation and
amortization) and 36.1% of total capital.
OUTLOOK
Mr. Work said, "Over the past five years, Elcor has achieved compound annual
growth rates in sales and diluted earnings per share of 17% and 24%,
respectively. While we expect a continuation of strong sales growth in fiscal
2001, growth in earnings per share will be more difficult to achieve as a result
of the current year challenges being faced by our Roofing Products segment. By
June 30, 2000, asphalt prices had increased 50% year-over-year with most of the
increase occurring during the second half of the fiscal year. We currently
expect that our asphalt costs in fiscal 2001 could be as much as $13 million
higher than in fiscal 2000. In addition, initial operating losses during
commissioning of the new Myerstown shingle plant of $3 million to $5 million and
the absence of fiscal 2000's nonrecurring business interruption insurance claim
operating income of $3.5 million, will also contribute to probable lower
year-over-year operating profits in fiscal 2001 for our roofing products
segment. As a result, roofing products' level of operating profits in fiscal
2001 will, in large part, be determined by our success in realizing product
price increases during the year, which is presently difficult to predict.
Currently, there is considerable pressure on pricing in the market, which is
restricting our ability to realize previous price increases. Looking beyond the
current industry challenges, which we view as temporary, we expect that the 38%
capacity increase provided by our new Myerstown shingle plant should
significantly increase earnings in fiscal 2002 and beyond.
"Cybershield is well positioned to significantly exceed the prior year's
operating results in fiscal 2001, with its sales being distributed over a much
more diversified customer base. One of Cybershield's top priorities in fiscal
2001 is the establishment of a European presence - a market significantly larger
than Cybershield's current market (the Americas). Over the next five years,
industry sources predict a 25% - 30% compound annual growth rate in the
worldwide production of cellular handsets and other wireless devices that
require shielding solutions and other value-added services. Through
international expansion and a trend toward increased Cybershield content per
unit, opportunities exist for Cybershield's growth to significantly exceed that
of the underlying worldwide wireless handset market.
"Fiscal 2001 results should also benefit from our Industrial Products segment's
return to profitable operations as Chromium resolves difficulties relating to
the consolidation of its manufacturing facilities and Ortloff Engineers sees
increased activity in the market for its proprietary technology and consulting
services.
"While it presently appears that fiscal 2001 will be a challenging year, looking
ahead to the longer term, we believe the investments we have made and are
continuing to make provide
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PRESS RELEASE
Elcor Corporation Quarterly Results
August 14, 2000
Page 4
Elcor with the potential to achieve high growth rates in sales and earnings in
the years beyond," 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, 1999, Forms 10-Q for the fiscal 2000 quarters ending September 30,
1999, December 31, 1999, and March 31, 2000, and its Form 8-K dated August 15,
2000.
- - - - - - - -
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; Myerstown, Pennsylvania; Dallas and Ennis, Texas. Its electronic
manufacturing services facilities are located in Canton, Georgia; Dallas and
Lufkin, Texas; and its industrial products facilities are located in Cleveland,
Ohio and Midland, Texas.
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PRESS RELEASE
Elcor Corporation Quarterly Results
August 14, 2000
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<TABLE>
<CAPTION>
CONDENSED RESULTS OF OPERATIONS
($ in thousands)
Unaudited Audited
Three Months Ended Fiscal Year Ended
June 30, June 30,
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
SALES $ 82,302 $ 90,072 $ 350,275 $ 317,874
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COSTS AND EXPENSES:
Cost of sales 61,494 67,164 262,517 236,670
Selling, general & administrative 10,347 10,717 39,699 39,699
Interest expense and other, net 402 507 1,162 1,975
Gain from involuntary conversion 0 0 (1,292) 0
--------- --------- --------- ---------
Total Costs and Expenses 72,243 78,388 302,086 278,344
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 10,059 11,684 48,189 39,530
Provision for income taxes 3,818 3,720 18,257 14,247
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INCOME BEFORE CHANGE IN
ACCOUNTING PRINCIPLE 6,241 7,964 29,932 25,283
Cumulative effect of change in
accounting principle(a) 0 0 0 (4,340)
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NET INCOME $ 6,241 $ 7,964 $ 29,932 $ 20,943
========= ========= ========= =========
INCOME PER COMMON SHARE-BASIC:
Before change in accounting principle $ 0.32 $ 0.41 $ 1.53 $ 1.29
Cumulative effect of change in
accounting principle(a) 0.00 0.00 0.00 (0.22)
--------- --------- --------- ---------
Net Income Per Share-Basic $ 0.32 $ 0.41 $ 1.53 $ 1.07
========= ========= ========= =========
INCOME PER COMMON SHARE-DILUTED:
Before change in accounting principle $ 0.31 $ 0.40 $ 1.49 $ 1.27
Cumulative effect of change in
accounting principle 0.00 0.00 0.00 (0.22)
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Net Income Per Share-Diluted $ 0.31 $ 0.40 $ 1.49 $ 1.05
========= ========= ========= =========
AVERAGE COMMON SHARES OUTSTANDING
Basic 19,615 19,514 19,577 19,546
========= ========= ========= =========
Diluted 20,087 20,035 20,086 19,964
========= ========= ========= =========
</TABLE>
(a) Represents cumulative effect of applying AICPA AcSec Statement of Position
98-5, "Reporting on the Costs of Start-Up Activities."
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PRESS RELEASE
Elcor Corporation Quarterly Results
August 14, 2000
Page 6
<TABLE>
<CAPTION>
CONDENSED BALANCE SHEET
(Audited, $ in thousands)
June 30,
ASSETS 2000 1999
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<S> <C> <C>
Cash and cash equivalents $ 4,702 $ 4,186
Receivables, net 71,712 72,866
Inventories 40,965 25,770
Deferred income taxes 2,822 2,111
Prepaid expenses and other 4,312 8,352
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Total Current Assets 124,513 113,285
Property, plant and equipment, net 195,104 135,720
Other assets 2,957 3,177
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Total Assets $322,574 $252,182
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</TABLE>
<TABLE>
<CAPTION>
June 30,
LIABILITIES AND SHAREHOLDERS' EQUITY 2000 1999
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<S> <C> <C>
Accounts payable and accrued liabilities $ 48,287 $ 33,884
Current maturities on long-term debt 0 0
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Total Current Liabilities 48,287 33,884
Long-term debt, net 91,300 63,000
Deferred income taxes 21,083 18,047
Shareholders' equity 161,904 137,251
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Total Liabilities and Shareholders' Equity $322,574 $252,182
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</TABLE>
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PRESS RELEASE
Elcor Corporation Quarterly Results
August 14, 2000
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<TABLE>
<CAPTION>
CONDENSED STATEMENT OF CASH FLOWS
(Audited, $ in thousands)
For the Year Ended
June 30,
2000 1999
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<S> <C> <C>
CASH FLOWS FROM:
OPERATING ACTIVITIES
Net income $ 29,932 $ 20,943
Adjustments to net income
Depreciation and amortization 10,671 9,285
Deferred income taxes 2,325 2,283
Gain from involuntary conversion (1,292) 0
Cumulative effect of accounting change 0 4,340
Changes in assets and liabilities:
Trade receivables 1,154 (15,420)
Inventories (15,195) 3,375
Prepaid expenses and other 3,022 (6,552)
Accounts payable and accrued liabilities 14,403 5,137
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Net cash from operations 45,020 23,391
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INVESTING ACTIVITIES
Additions to property, plant & equipment (70,091) (30,048)
Acquisition of business, net of cash 0 (5,588)
Insurance proceeds from involuntary conversion 2,310 5,687
Other 256 152
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Net cash from investing activities (67,525) (29,797)
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FINANCING ACTIVITIES
Long-term borrowings, net 28,300 15,000
Dividends on common stock (3,923) (3,705)
Treasury stock transactions and other, net (1,356) (5,943)
-------- --------
Net cash from financing activities 23,021 5,352
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 516 (1,054)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 4,186 5,240
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,702 $ 4,186
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</TABLE>
