UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
One) THE SECURITIES EXCHANGE ACT OF 1934
[X]
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-7276
EXOLON-ESK COMPANY
(Exact name of registrant as specified in its charter)
Delaware 16-0427000
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
1000 East Niagara Street, Tonawanda, New
York 14150
(Address of Principal Executive Offices)
(Zip Code)
(716) 693-4550
(Registrant's telephone number,
including area code)
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES..X.. NO.....
As of August 12, 1997, the registrant had outstanding 481,995
shares of $1 par value Common Stock and 512,897 shares of $1
par value Class A Common Stock.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Exolon-ESK Company
Consolidated Condensed Balance Sheet
(in thousands except share amounts)
(Unaudited)
ASSETS June 30, December 31,
1997 1996
Current assets:
Cash $14 $275
Accounts receivable (less allowance
for doubtful accounts of $490
in 1996 and $419 in 1995) 9,913 9,061
Inventories 21,020 18,439
Prepaid expenses 475 526
Total Current Assets 31,422 28,301
Investment in Norwegian joint venture 5,891 5,812
Property, plant and equipment, at cost 67,408 61,157
Accumulated depreciation (44,281) (42,772)
Net property, plant and equipment 23,127 18,385
Other assets 5,544 8,985
Total Assets $65,984 $61,483
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $181 $219
Current maturities of long-term debt 1,267 1,667
Accounts payable 2,296 4,636
Accrued expenses 2,102 1,780
Income taxes payable 668 466
Deferred income taxes 50
Total Current Liabilities 6,514 8,818
Deferred income taxes 1,436 1,436
Long-term debt excluding current
installments 24,400 20,433
Other long-term liabilities 2,547 2,538
Stockholder' equity:
Preferred stock
Series A - 19,364 shares issued 276 276
Series B - 19,364 shares issued 166 166
Common stock of $1 par value - Authorized
600,000 shares, 512,897 issued 513 513
Class A common stock of $1 par value
- Authorized 600,000 shares,
512,897 issued 513 513
Additional paid-in capital 4,345 4,345
Retained earnings 25,828 22,999
Cumulative translation adjustment (186) (186)
Treasury stock, at cost (368) (368)
Total Stockholders' Equity 31,087 28,258
Total Liabilities and Stockholders' $65,984 $61,483
Equity
The accompanying notes are an integral part of these statements.
Exolon-ESK Company
Consolidated Condensed Statements of Income
Unaudited
(in thousands except per share amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
1997 1996 1997 1996
Net sales $20,034 $19,739 $40,225 $39,585
Cost of goods sold 15,145 15,044 30,754 30,346
Gross Profit Before Depreciation 4,889 4,695 9,471 9,239
Depreciation 755 773 1,511 1,545
Selling, general & administrative 1,384 1,347 2,714 2,745
expenses
Research and development 9 5 23 5
2,148 2,125 4,248 4,295
Operating Income 2,741 2,570 5,223 4,944
Other Expenses (Income):
Equity in (Earnings) before
income taxes of Norwegian
Jt. venture (67) (224) (79) (382)
Interest expense 264 337 516 705
Miscellaneous expense (income) 155 (166) 241 (434)
352 (53) 678 (111)
Earnings before income taxes 2389 2,624 4,545 5,053
Income tax expense 897 1,020 1,705 2,040
Net Earnings $1,492 $1,604 $2,840 $3,013
EARNINGS PER COMMON SHARE:
Primary $1.54 $1.65 $2.92 $3.10
Fully diluted $1.51 $1.59 $2.84 $2.99
EARNINGS PER CLASS A COMMON SHARE:
Primary $1.44 $1.55 $2.75 $2.92
Fully diluted $1.42 $1.50 $2.68 $2.82
Weighted Average Shares Outstanding
(in thousands):
Common Stock 482 482 482 482
Class A Common Stock 513 513 513 513
The accompanying notes are an integral part of these statements.
Exolon-ESK Company
Consolidated Condensed Statements of Cash Flows
Unaudited
(in thousands)
Six Months
Ended
June 30,
1997 1996
Net Cash Provided (Used) by Operating
Activities (1,062) 4,298
Cash Flow from Investing Activities:
Additions to property, plant and (6,252) (1,857)
equipment (6,252) (1,857)
Proceeds from restricted cash
equivalents 3,535 -
Net Cash (Used) for Investing Activities (2,717) (1,857)
Cash Flow from Financing Activities:
Borrowings (repayments) on long-term
construction financing loans and
revolving credit agreement 3,529 (2,850)
Dividends paid (11) (11)
Net Cash Provided (Used) by Financing
Activities 3,518 (2,861)
Net (decrease) in cash (261) (420)
Cash at beginning of period 275 440
Cash at end of period $ 14 $ 20
The accompanying notes are an integral part of these
statements.
EXOLON-ESK COMPANY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 The accompanying unaudited consolidated condensed
financial statements have been prepared in accordance
with generally accepted accounting principles for
interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting
principles for complete financial statements. In the
opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a
fair presentation have been included. Results for the
period ended June 30, 1997 are not necessarily
indicative of the results that may be expected for the
year ending December 31, 1997.
For further information, refer to the financial
statements and footnotes thereto for the year ended
December 31, 1996 included in the Company's Annual
Report on Form 10-K filed with the Securities and
Exchange Commission.
NOTE 2 The following are the major classes of inventories (in
thousands) as of June 30, 1997 and December 31, 1996 :
June 30, December 31,
1997 1996
(Unaudited)
Raw Materials $3,705 $3,581
Semi-Finished and 18,721 16,294
Finished Goods
Supplies and Other 1,055 925
23,481 20,800
Less: LIFO Reserve (2,461) (2,361)
$21,020 $18,439
NOTE 3 Contingencies
a. Environmental Issues
(i) Hennepin, Illinois Plant
On October 6, 1994, the Company entered into a Consent
Order (the Consent Order ) with the Illinois Attorney
General and the Illinois Environmental Protection
Agency ( IEPA ) in complete settlement of a complaint
brought by them which alleged that the Company had
violated certain air quality requirements in the
operating permit for its Hennepin, Illinois plant. The
Consent Order provides a schedule for the Company to
install a Continuous Emissions Monitoring System
( CEMS ) and to implement the required Best Available
Control Technology ( BACT ) for air emissions, pursuant
to an IEPA approved construction and operating permit.
The Company obtained final approval for a construction
permit to implement the BACT during 1996. The Company
purchased a 20 acre parcel of land adjacent to its
property in 1995 and construction has commenced.
In order to comply with the Consent Order and complete
facility improvements, the Company expects to incur
capital costs within the range from $13,000,000 to
$14,000,000. As of June 30, 1997, the Company has
incurred approximately $8,892,000 of capital costs
related to the facility improvements. The remaining
costs are expected to be incurred over the next 12
months. The Company has obtained a modification of its
Industrial Revenue Bond Agreement to allow for the
required capital expenditures under the Consent Order.
The cost of these required capital improvements is
being financed with the $13,000,000 of proceeds from
long-term bonds, a portion of which are tax-exempt,
issued by the Upper Illinois River Valley Development
Authority.
(ii) Norwegian Joint Venture
The Government of Norway held discussions with certain
Norwegian industries including the abrasive industry
concerning the implementation of reduced gaseous
emission standards. The Company's joint venture is
participating in these discussions to help achieve the
Norwegian Government's objectives as well as assuring
long term economic viability for the joint venture.
The Norwegian State Pollution Control Authority has
issued limits regarding dust emissions and Sulfur
Dioxide emissions that will apply to all Norwegian
silicon carbide producers. Specific target emission
limits have been set, and a timetable stretching from
the present until January 1, 2001 has been established.
The costs associated with achieving compliance with
these limits are uncertain as a result of various
alternatives presently being considered by the
Norwegian joint venture.
The Company's joint venture appointed a project group
to complete a study and define a project to minimize
sulfur and dust emissions which was presented to the
Norwegian State Pollution Control Authority on March 1,
1995. The Authority has prepared an internal study of
the report and the Authority's draft for new
concessions was presented to the joint venture in
February 1996. Based on a consensus for the
metallurgical industry, the joint venture has initiated
discussions with the Authority to obtain acceptable
emissions levels. The costs associated with the
implementation of environmental expenditures are
uncertain as a result of various alternatives presently
being considered by the Norwegian joint venture.
b. Legal Matters
(i) Federal Proceedings and Related Matters
On December 8, 1994, in an ex parte proceeding the U.S.
Defense Logistics Agency (the "DLA") issued a
Memorandum of Decision that temporarily suspended
certain parties including the Company (defendants) from
contracting with the U.S. Government under procurement
or non-procurement programs pending the completion of
the Antitrust Proceedings. On January 31, 1995, the
DLA amended the Memorandum of Decision (as amended, the
"DLA Suspension") to include under the DLA Suspension
sixteen alleged affiliates of the defendants including
the Company's subsidiary, Exolon-ESK Company of Canada
Ltd., and Orkla Exolon KS, the Norwegian partnership
in which the Company's subsidiary, Norsk Exolon AS, has
a 50% partnership interest. The DLA Suspension alleged
as causes for the suspension (i) the indictments of the
parties in the Antitrust Proceedings, (which have now
been settled and no criminal charges were imposed) and
(ii) on separate occasions in October and November of
1994 the Company's former President and former
Executive Vice President individually made alleged
false certifications in DLA sales contracts denying the
existence within the past three years of any
indictments of the kind involved in the Antitrust
Proceedings. A jury trial on a separate criminal
complaint against the Company and the former Executive
Vice President based on the alleged false
certifications in DLA sales contracts found the Company
and the former Executive Vice President not guilty of
all charges.
The Company and the DLA have entered into an
Administrative Agreement effective August 1, 1997 which
lifts the current suspension and permits the Company to
bid on material immediately, provided the Company
complies with the final terms of the Agreement through
July 1, 1999. The Company paid a $10,000
Administrative Fee in connection with this Agreement.
On October 18, 1994, a lawsuit was commenced in the
U.S. District Court for the Eastern District of
Pennsylvania (No. 94-CV-6332) under the title "General
Refractories Company v. Washington Mills Electro
Minerals Corporation and Exolon-ESK Company." The suit
purports to be a class action seeking treble damages
from the defendants for allegedly conspiring with
unnamed co-conspirators during the period from January
1, 1985 through the date of the complaint to fix,
raise, maintain and stabilize the price of artificial
abrasive grains and to allocate among themselves their
major customers or accounts for purchases of artificial
grains, in violation of Section 1 of the Sherman Act,
15 U.S.C. S 1. The plaintiffs allegedly paid more for
abrasive grain products than they would have paid in
the absence of such anti-trust violations and were
allegedly damaged in an amount that they are presently
unable to determine. On or about July 17, 1995, a
lawsuit captioned Arden Architectural Specialties,
Inc. v. Washington Mills Electro Minerals Corporation
and Exolon-ESK Company, (95-CV-05745(m)), was
commenced in the United States District Court for the
Western District of New York. The Arden Architectural
Specialties complaint purports to be a class action
that is based on the same matters alleged in the
General Refractories complaint. The Company believes
that it has meritorious defenses to the allegations,
and it intends to vigorously defend against the
charges.
In addition to the potential liabilities that the
Company may experience in the legal proceedings brought
by these third parties, the Company may incur material
expenses in defending against the actions, and it may
incur such expenses even if it is found to have no
liability for any of the charges asserted against it.
(ii) Exolon-ESK Company of Canada, Ltd.
An action for damages was brought against Exolon-ESK
Company and Exolon-ESK Company of Canada, Ltd. by
International Oxide Fusion Inc. of Niagara Falls,
Ontario in December, 1996. This action has been
brought on the basis that the Thorold, Ontario facility
is in the possession of technology that was provided in
1990 to Exolon-ESK Company to produce MagChrome and
Fused MgO and has refused to pay further royalty
payments. International Oxide Fusion Inc. claims
damages for loss of royalty payments from the furnaces
in Thorold, Ontario which they allege use this
technology. Exolon-ESK Company and Exolon-ESK Company
of Canada, Ltd. have filed a Statement of Defense and
Counterclaim against International Oxide Fusion Inc.,
Edward J. Bielawski, Robert Thiel (the principals of
International Oxide Fusion Inc.), Thomas Farr and
Fusion Unlimited (Niagara) Inc. which was issued in
January, 1997 in Toronto, Ontario. At this time, the
Company is not in a position to reasonably estimate
the range of any loss or gain. The Plaintiffs seek
approximately $182 million as damages, which management
considers to be beyond any reasonable understanding.
The Company's counterclaim is in the amount of
approximately $22 million.
A separate, unrelated lawsuit was commenced by The
Exolon-ESK Company of Canada, Ltd. against Theeb, Ltd.
and Edward J. Bielawski in August, 1997. The action
arises out of a 1985 contract whereby the Defendants
acted negligently in connection with a crane and its
runway system. The Company is seeking $2 million in
damages for negligence and punitive damages.
In June 1993, the Company commenced a civil legal
action in Ontario, Canada Court (General Division)
against one of its former officers and certain former
employees of Exolon-ESK Company of Canada, Ltd.
(Exolon-Canada) ( the "Defendants") on various charges
related to allegations that they defrauded the Company
and Exolon-Canada of money, property and services over
many years (the Perrotto Case ). Summary Judgment was
granted on the issue of liability against Paul Perrotto
and Michael Perrotto on July 16, 1997 with a Reference
(hearing) directed to a Master in Toronto on the issue
of damages. The hearing is expected to be held in
Fall, 1997. The action remains ongoing against various
other Defendants.
Note 4 In February 1997, the Financial Accounting
Standards Board issued Statement No. 128,
"Earnings per Share," which is required to be
adopted by the Company on December 31, 1997.
Statement No. 128 revises the calculation of
primary earnings per share, which has been renamed
basic earnings per share, and renames fully
diluted earnings per share as diluted earnings per
share. Management does not expect that Statement
No. 128 will have any impact on the Company's
reported earnings per share.
In June 1997, the Financial Accounting Standards Board
issued Statement No. 130, "Reporting Comprehensive
Income", which is effective for fiscal years beginning
after December 15, 1997. The Company has not yet
determined the impact Statement No. 130 will have on
its financial statements.
In June 1997, the Financial Accounting Standards Board
issued Statement No. 131, "Disclosure about Segments of
an Enterprise and Related Information," which is
effective for fiscal years beginnings after December
15, 1997. The Company does not expect that Statement
No. 131 will have any material effect on its financial
statements.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Comparison of the Six Months Ended June 30, 1997 with the Six
Months Ended June 30, 1996
Net Sales. Total net sales increased by 2% to $40,225,000
during the six months ended June 30, 1997 from $39,585,000 in the
first six months of 1996.
Gross Profit. Gross profit prior to depreciation expense
was $9,471,000 in the first six months of 1997 when compared to
$9,239,000 in the first six months of 1996. As a percent of net
sales, gross margins were 24% in the first six months of 1997
compared to 23% in the same period of 1996.
Operating Expenses. Total operating expenses decreased to
$4,248,000 in the six months ended June 30, 1997 from $4,295,000
in the same period of 1996. Operating expenses as a percent of
sales remained at 11% in the first six months of 1997 the same as
the first six months of 1996. The Company's largest portion of
operating expense, selling, general and administrative expense,
decreased to $2,714,000 in the first six months of 1997 when
compared to $2,745,000 during the first six months of 1996. As a
percent of net sales, selling and general and administrative
expense was 7% in the first six months of both 1997 and 1996.
Operating Income. Operating income increased by 6% to
$5,223,000 in the six months ended June 30, 1997 from $4,944,000
in the six months ended June 30, 1996, due to the increase in net
sales and reduced operating costs.
Norwegian Joint Venture. The Company's 50% share of the
pre-tax earnings of its Norwegian joint venture, Orkla Exolon
A/S, was $79,000 for the six months ended June 30, 1997 versus
$382,000 in the six months ended June 30, 1996. The Company's
share in the venture's net sales was $3,938,000 in the six months
ended June 30, 1997 as compared to $3,758,000 in the six months
ended June 30, 1996. The joint venture's gross margins, prior to
depreciation, decreased to 19% for the six months ended June 30,
1997 versus 23% for the six months ended June 30, 1996 primarily
due to a change in the mix of products sold in the first six
months of 1997 when compared to the same period in 1996.
Interest and Miscellaneous Expense. Interest expense
decreased significantly in the first six months of 1997 to
$516,000 from $705,000 in the first six months of 1996. Average
borrowing levels of the Company's bank debt were reduced by
approximately $4,053,000 in the first six months of 1997 when
compared to the first six months of 1996. Interest costs related
to the Company's facility improvements in Illinois are being
capitalized. Incurred interest of $159,000 were capitalized
during the six months ended June 30, 1997.
Miscellaneous expense of $241,000 was reported in the first
six months of 1997 compared to miscellaneous income of $434,000
in the quarter ended June 30, 1996. The Company recorded
$320,000 in miscellaneous income during the first quarter of 1996
due to a payment for the settlement with its insurance carrier of
a claim related to a legal action in Ontario, Canada Court.
Income Tax. The Company's effective tax rate was 38% for
the six months ended June 30, 1997 as compared to 40% for the six
months ended June 30, 1996.
Comparison of the Three Months Ended June 30, 1997 with the Three
Months Ended June 30, 1996.
Net Sales. Total net sales increased by 1% to $20,034,000
in the three months ended June 30, 1997 from $19,739,000 in the
three months ended June 30, 1996.
Gross Profit. Gross profit prior to depreciation expense
was $4,889,000 in the three months ended June 30, 1997 when
compared to $4,695,000 in the three months ended June 30, 1996.
As a percent of net sales, gross margins were 24% in both the
second quarter of 1997 and the second quarter of 1996.
Operating Expenses. Total operating expenses increased
marginally in the three month period ended June 30, 1997 to
$2,148,000 from $2,125,000 from the same period of 1996.
Selling, general and administrative expense increased $37,000 in
the quarter ended June 30, 1997 when compared to the quarter
ended June 30, 1996. As a percent of net sales, selling, general
and administrative expenses were 11% for the quarters ended June
30, 1997 and June 30, 1996.
Operating Income. Operating income increased by $171,000 or
7% to $2,741,000 in the second quarter of 1997 from $2,570,000 in
the second quarter of 1996, primarily as a result of the increase
in net sales.
Norwegian Joint Venture. The Company's 50% share of the
pre-tax earnings in its Norwegian joint venture Orkla Exolon-A/S,
was $67,000 for the three months ended June 30, 1997 versus a
pre-tax profit of $224,000 during the three months ended June 30,
1996. The Company's share in the venture's net sales was
$2,025,000 in the three months ended June 30, 1997 when compared
to $1,847,000 in the three months ended June 30, 1996.
Interest and Miscellaneous Expense. Interest expense
decreased by $73,000 to $264,000 in the second quarter of 1997
from $337,000 during the second quarter of 1996. Average
borrowing levels of the Company's bank debt were reduced by
approximately $2,190,000 for the quarter ended June 30, 1997 when
compared to the same period in 1996.
Liquidity and Capital Resources
As of June 30, 1997, working capital (current assets less
current liabilities) has increased to $24,908,000, when compared
to $19,483,000 as of December 31, 1996. Accounts receivable
increased by $852,000 as of June 30, 1997 versus 1996 year end
primarily as a result of the increase in sales levels during the
first six months of 1997 versus the 1996 year. Inventory
increased by $2,581,000 at June 30, 1997 when compared to
December 31, 1996. Accounts payable decreased by $2,340,000 as
of June 30,1997 versus December 31, 1996.
For the six months ended June 30, 1997, net cash used by
operating activities was $1,062,000. Cash reserves decreased by
$261,000 at June 30, 1997 compared to December 31, 1996.
Proceeds from restricted cash equivalents and additional
borrowings were used to fund $6,252,000 of capital expenditures
in the six months ended June 30, 1997.
The Company's current ratio increased to 4.8 to 1.0 at June
30, 1997, from 3.2 to 1.0 as of December 31, 1996. The ratio of
total liabilities to shareholder's equity improved to 1.1 to 1.0
as of June 30, 1997, from 1.2 to 1.0 as of December 31, 1996.
Management believes that the cash provided by operations and
long-term borrowing arrangements will provide adequate funds for
current commitments and other requirements for the following 12
months.
The Company has been directed by the Illinois Environmental
Protection Agency ("IEPA") to control its sulfur emissions at its
Hennepin, Illinois silicon carbide furnace plant. For further
information see Note 3(a)(i) to the Notes to Consolidated
Condensed Financial Statements on page 5, which is incorporated
herein by reference.
Reference is made to the descriptions of the following legal
matters, within Note 3(b) of the Notes to Consolidated Condensed
Financial Statements included in this Form 10-Q Report, which
descriptions are incorporated herein by reference: (1) a legal
action commenced in June 1993 by the Company in Ontario, Canada
seeking compensation for damages against certain former officers
and employees; (2) a temporary suspension imposed upon the
Company and others in December 1994 by the U.S. Defense Logistics
Agency; (3) civil law suits brought against the Company and
others commenced by General Refractories Company in October 1994
and by Arden Architectural Specialties, Inc. in July 1995; (4) a
civil lawsuit brought against the Company in December 1996 by
International Oxide Fusion, Inc.; and (5) a civil lawsuit against
Theeb, Ltd. and Edward J. Bielawski commenced in August 1997.
Effects of New Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board
issued Statement No. 128, "Earnings per Share," which is required
to be adopted by the Company on December 31, 1997. Statement No.
128 revises the calculation of primary earnings per share, which
has been renamed basic earnings per share, and renames fully
diluted earnings per share as diluted earnings per share.
Management does not expect that Statement No. 128 will have any
impact on the Company's reported earnings per share.
In June 1997, the Financial Accounting Standards Board
issued Statement No. 130, "Reporting Comprehensive Income", which
is effective for fiscal years beginning after December 15, 1997.
The Company has not yet determined the impact Statement No. 130
will have on its financial statements.
In June 1997, the Financial Accounting Standards Board
issued Statement No. 131, "Disclosure about Segments of an
Enterprise and Related Information," which is effective for
fiscal years beginnings after December 15, 1997. The Company
does not expect that Statement No. 131 will have any material
effect on its financial statements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
a. Exolon-ESK Company and Exolon-ESK Company of Canada,
Ltd. v. Michael Perrotto, et al.
Reference is made to the information concerning the
Perrotto case contained in Note 3(b)(ii) of the Notes
to Consolidated Condensed Financial Statements included
in this Form 10-Q, which is hereby incorporated herein
by reference.
b. Federal Proceedings
Reference is made to the information concerning the DLA
Suspension contained in Note 3(b)(i) of the Notes to
Consolidated Condensed Financial Statements included in
this Form 10-Q.
c. The Exolon-ESK Company of Canada, Ltd. v. Theeb, Ltd.
and Edward J. Bielawski
Reference is made to the information concerning a
lawsuit filed against Theeb, Ltd. and Edward J.
Bielawski contained in Note 3(b)(ii) of the Notes to
Consolidated Condensed Financial Statements included in
this Form 10-Q.
Item 2. Change in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
Reference is made to Proposal 1 and Proposal 2 on pages 5
and 6 of the Company's Annual Proxy Statement dated April 1,
1997, which is incorporated herein by reference.
Item 5. Other Information
Effective August 15, 1997, the contract of the Company's
Chief Executive Officer/President, J. Fred Silver, will
expire. The Board of Directors will not be renewing this
contract. A new candidate will assume this role effective
September 1, 1997.
Item 6. Exhibits and Reports on Form 8-K
The following exhibits are included herein:
11 Computation of Earnings Per Share
27 Financial Data Schedule<PAGE>
The Company did not file any reports on Form 8-K during the
three months ended June 30, 1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
EXOLON-ESK COMPANY
/S/ J. Fred Silver
J. Fred Silver
President and Chief Executive Officer
/S/ Michael Bieger
Michael Bieger
Vice President Finance and
Chief Financial Officer
Date: August 12, 1997
EXHIBIT INDEX
Exhibit Description Reference
No.
3A Certificate of Amendment of Exhibit 3A to the report
Restated Certificate of on Form 10-K for the
Incorporation dated April year ended December 31,
30, 1997 1996*
3A(1) Certificate of Merger Exhibit 3A(1) to the
report on Form 10-K for
the year ended December
31, 1995*
3F Certificate of Amendment of Exhibit 3F to the report
Restated Certificate of on Form 10-K for the
Incorporation dated April year ended December 31,
23, 1986 1994*
3G Certificate of Amendment of Exhibit 3G to the report
Restated Certificate of on Form 10-K for the
Incorporation dated May 4, year ended December 31,
1987 1994*
3H Amendment of Certificate of Exhibit 3H to the Report
Incorporation dated October on Form 10-Q for the
28, 1992 quarter ended September
30, 1992*
3I Restated Bylaws containing Exhibit 3I to the report
all previous amendments on Form 10-K for the
adopted year ended December 31,
1996*
4 Instruments Defining Rights Articles of
of Security Holders Incorporation, Exhibits
3A, and Exhibits 3F and
3G to the Report on Form
10-K for the year ended
December 31, 1994*
10D(23) Revolving Credit Agreement Exhibit 10D(23) to the
dated December 22, 1992 Report on Form 10-K for
the year ended December
31, 1992*
10D(23) Amendment Credit Agreement Exhibit 10D(23)A to the
A dated December 1, 1996 report on Form 10-K for
the year ended December
31, 1996*
10D(24) Industrial Revenue Bond Exhibit 10D(24) to the
Agreement dated January 1, Report on Form 10-K for
1993. the year ended December
31, 1992*
10D(25) Industrial Revenue Bond Loan Exhibit 10D(25) to the
Agreement dated December 1, report on Form 10-K for
1996 the year ended December
31, 1996*
10D(26) Building Loan Agreement Exhibit 10D(26) to the
dated December 1, 1996 report on Form 10-K for
the year ended December
31, 1996*
10F Stockholder's Agreement Exhibit 10F to the
dated as of April 26, 1984 report on Form 10-K for
between the Registrant and the year ended December
Wacker Chemical Corporation 31, 1995*
10G Restated License Agreement Exhibit 10G to the
dated as of April 26, 1984 report on Form 10-K for
among Elektroschmelzwerk the year ended December
Kempten GmbH, ESK 31, 1995*
Corporation and the
Registrant
10H Distributorship Agreement Exhibit 10H to the
dated April 27, 1984 between report on Form 10-K for
Elektroschmelzwerk Kempten the year ended December
GmbH and the Registrant 31, 1995*
10I Indemnification Agreement Exhibit 10I to the
dated as of December 15, report on Form 10-K for
1984 between Wacker Chemical the year ended December
Corporation and the 31, 1995*
Registrant
10M Federal Indictments dated Exhibit 10M to the
February 11, 1994 Report on Form 10-K for
the year ended December
31, 1993*
11 Statement of computation of Exhibit 11
per share earnings
27 Financial Data Schedule Submitted electronically
* Incorporated herein by reference.
Exhibit 11
Exolon-ESK Company and Subsidiaries
Computation of Earnings Per Share
(In Thousands, Except Per Share Data)
Three Months Six Months
Ended March Ended
31, June 30,
1997 1996 1997 1996
Net earnings $1,493 $1,604 $2,840 $3,013
Less Preferred Stock
Dividends:
Series A (5) (5) (11) (11)
Series B (5) (5) (11) (11)
Undistributed earnings $1,482 $1,594 $2,818 $2,991
Net earnings attributable
to:
Common Stock (50.0%) 669 796 1,409 1,495
Class A Common Stock 669 796 1,409 1,496
(50.0%)
$1,338 $1,594 $2,818 $2,991
Net earnings per share of
Common Stock:
Primary $1.54 $1.65 $2.92 $3.10
Fully Diluted $1.51 $1.59 $2.84 $2.99
Net earnings per share of
Class A Common Stock:
Primary $1.44 $1.55 $2.75 $2.92
Fully Diluted $1.42 $1.50 $2.68 $2.82
Weighted Average Shares
Outstanding:
Primary:
Common Stock 482,000 482,000 482,000 482,000
Class A Common Stock 513,000 513,000 513,000 513,000
Fully Diluted:
Common Stock 504,000 504,000 504,000 504,000
Class A Common Stock 535,000 535,000 535,000 535,000
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
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442
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