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 September 30, 1999
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 October 29, 1999 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 September 30, December 31,
1999 1998
Current assets:
Cash $5,791 $ 5,289
Accounts receivable (less allowance
for doubtful accounts of $250 in
1999 and $250 in 1998) 6,166 7,325
Income Taxes Recoverable 441 1,124
Inventories 17,027 20,219
Prepaid expenses 244 96
Deferred income taxes 543 541
------ ------
Total Current Assets 30,212 34,594
Investment in Norwegian joint venture 5,583 5,594
Property, plant and equipment, at cost 76,275 75,267
Accumulated depreciation (50,753) (48,189)
-------- --------
Net property, plant and equipment 25,522 27,078
Bond sinking fund 3,181 2,422
Other assets 1,571 1,598
------- -------
Total Assets $66,069 $71,286
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable $ 44 $ 503
Current maturities of long-term debt 967 967
Accounts payable 3,011 3,113
Accrued expenses 2,338 2,145
----- -----
Total Current Liabilities 6,360 6,728
Deferred income taxes 1,975 1,979
Long-term debt excluding current portions 23,014 27,643
Other long-term liabilities 2,389 2,360
------ ------
Total Liabilities 33,738 38,710
------ ------
Stockholders' equity:
Preferred stock - Series A -
19,364 shares issued 276 276
Preferred stock - Series B -
19,364 shares issued 166 166
Common stock, $1 par value - Auth.
600,000 shares, 512,897 issued 513 513
Class A common stock, $1 par value -
Auth. 600,000, 512,897 issued 513 513
Additional paid-in capital 4,345 4,345
Retained earnings 27,943 28,188
Accumulated other comprehensive
income (1,057) (1,057)
Treasury stock, at cost (368) (368)
------- -------
Total Stockholders' Equity 32,331 32,576
------- -------
Total Liabilities and Stockholders'
Equity $66,069 $71,286
======= =======
The accompanying notes are an integral part of these statements.
Exolon-ESK Company
Consolidated Condensed Statements of Operations
Unaudited
(in thousands except per share amounts)
Three Months Nine Months
Ended Ended
September 30, September 30,
1999 1998 1999 1998
------- ------- ------- -------
Net sales $12,603 $14,598 $39,643 $52,667
Cost of goods sold 10,073 12,657 33,100 42,768
------- ------- ------- -------
Gross Profit 2,530 1,941 6,543 9,899
------- ------- ------- -------
Operating Expenses
Depreciation 915 903 2,745 2,369
Selling, general & administrative
expenses 1,082 1,449 3,629 4,306
Research and development 7 - 36 32
----- ----- ----- -----
Total Operating Expenses 2,004 2,352 6,410 6,707
----- ----- ----- -----
Operating Income (Loss) 526 (411) 133 3,192
----- ----- ----- -----
Other Income (Expense):
Equity in Earnings (Loss)
before income taxes of
Norwegian Jt. venture 187 201 (12) 525
Interest expense (358) (406) (1,168) (824)
Abandoned acquisition costs - (364) - (364)
Miscellaneous income (expense) (81) (161) 714 (325)
----- ----- ----- -----
Total Other Income (Expense) (252) (730) (466) (988)
----- ----- ----- -----
(Loss) Earnings before income taxes (274) (1,141) (333) 2,204
Income tax benefit (expense) 111 367 120 (950)
----- ------- ------ ------
Net (Loss) Earnings $163 ($774) ($213) $1,254
===== ====== ====== ======
Earnings Per Common Share:
Basic $0.16 ($0.81) ($0.26) $1.27
Diluted $0.16 ($0.81) ($0.26) $1.24
Earnings Per Class A Common Share:
Basic $0.15 ($0.77) ($0.24) $1.19
Diluted $0.15 ($0.77) ($0.24) $1.17
The accompanying notes are an integral part of these statements.
Exolon-ESK Company
Consolidated Condensed Statements of Cash Flows
Unaudited
(in thousands)
Nine Months
Ended
September 30,
1999 1998
---- ----
Net cash provided by operating
activities $7,608 $3,618
------ ------
Cash Flow from Investing Activities:
Capital expenditures (1,227) (4,342)
------- -------
Cash Flow from Financing Activities:
(Repayments on) proceeds from debt (5,088) 4,350
Payments to bond sinking fund (758) -
Dividends paid (33) (33)
------ -----
Net Cash (Used for) Provided by
Financing Activities (5,879) 4,317
------- -----
Net increase in cash 502 3,593
Cash at beginning of period 5,289 2,503
------- ------
Cash at end of period $5,791 $6,096
======= ======
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 of Exolon-ESK Company (the
Company ) 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 September 30, 1999 are not necessarily
indicative of the results that may be expected for the
year ending December 31, 1999.
For further information, refer to the financial
statements and footnotes thereto for the year ended
December 31, 1998 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 September 30, 1999 and December 31,
1998 :
September 30, December 31,
1999 1998
(Unaudited)
---------------------------
Raw Materials $1,048 $1,669
Semi-Finished and 18,051 20,822
Finished Goods
Supplies and Other 1,165 965
------ ------
20,264 23,456
Less: LIFO Reserve (3,237) (3,237)
------- -------
$17,027 $20,219
======= =======
NOTE 3 Contingencies
a. Environmental issues
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 compliance timetable
ranging 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. Management believes the
joint venture can meet the sulfur requirements with
changes in production techniques and raw material
substitutions including low sulfur coke. Based upon
currently known information the Company estimates the
future capital projects costs associated with achieving
compliance with these limits would approximate $2
million.
b. Legal Matters
(i) Federal Proceedings and Related Matters
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. 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. In October 1997, the
Norton Company was named an additional defendant in
both cases. The ultimate liability, if any, that could
result from these lawsuits cannot presently be
determined, although the Company believes that it has
meritorious defenses to the allegations, and it intends
to vigorously defend against the charges.
A Special Notice of Liability was received from US EPA
by Exolon for the Remedial Deign/Remedial Action Phase
of the Lenz Oil Services, Inc. Superfund Site. Exolon
is one of over seventy potentially responsible parties.
The Notice alleges joint and several liability based
upon the premise that the soil and ground water were
contaminated with oil and solvent waste containing
hazardous constituents. The ultimate liability that
could result from this Site and Notice cannot be
presently determined. A good faith period of
negotiations is scheduled through February 21, 2000, at
which time the Company will be able to better determine
their apportioned share of the clean up costs.
(ii) The Exolon-ESK Company of Canada, Ltd.
On June 7, 1999, The Exolon-ESK Company of Canada,
Ltd.( Exolon-Canada ) and certain employees were
charged by the Ministry of Labor for violations of the
Occupational Health and Safety Act resulting from a
June 18, 1998 furnace accident. A settlement is
currently being negotiated which would include a
$100,000 (Canadian) fine against Exolon-Canada and all
charges against the individual employees being
dismissed.
NOTE 4 Comprehensive Income
During the three months and nine months ended September
30, 1999 and 1998, total comprehensive income, which
was comprised of net income and foreign currency
translation adjustments, equaled net income.
NOTE 5 Earnings Per Share
The following table sets forth the computation of basic and
diluted earnings per share (in thousands except share
information):
Three Months Nine Months
Ended Ended
Sept. 30, Sept. 30,
1999 1998 1999 1998
------------------------------
Numerator: Net income (loss)
attributable to common
stockholders after preferred
stock dividends $152 ($796) ($213) $ 1,221
==============================
Numerator for basic earnings
per share:
Common stockholders (50%) 76 (398) (106) 610
Class A common
stockholders (50%) 76 (398) (107) 611
-----------------------------
152 (796) (213) 1,221
Effect of Dilutive
Securities-Preferred
Stock Dividends - - - 33
-----------------------------
Net income (loss)attributable
to common stockholders
after assumed conversion of
preferred stock $152 ($796) ($213) $1,254
==============================
Numerator for diluted
earnings per share:
Common stockholders (50%) 76 (398) (106) 627
Class A common
stockholders (50%) 76 (398) (107) 627
------------------------------
$152 ($796) ($213) $1,254
==============================
Denominator for basic
earnings per share -
weighted average shares 481,995 481,995 481,995 481,995
Effect of dilutive
securities - convertible
preferred stock - - - 21,785
----------------------------------
Denominator for diluted
earnings per share -
adjusted weighted
average shares and
assumed conversions 481,995 481,995 481,995 503,780
==================================
Class A common stock:
Denominator for basic
earnings per share -
weighted average shares 512,897 512,897 512,897 512,897
Effect of dilutive
securities - convertible
preferred stock - - - 21,785
---------------------------------
Denominator for diluted
earnings per share -
adjusted weighted
average shares and
assumed conversions 512,897 512,897 512,897 534,682
=================================
The effect of the convertible preferred stock was not considered
for 1999 and the three month period ended September 30, 1998
because the effect would have been anti-dilutive.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Comparison of the Nine Months Ended September 30, 1999 with the
Nine Months Ended September 30, 1998.
Net Sales. Total net sales decreased by 25% to $39,643,000
during the nine months ended September 30, 1999 from $52,667,000
in the first nine months of 1998 primarily due to decreased
demand and increased foreign competition.
Gross Profit. Gross profit before depreciation expense was
$6,543,000 in the first nine months of 1999 compared to
$9,899,000 in the first nine months of 1998. As a percent of net
sales, gross margins were 16.5% in the first nine months of 1999
compared to 18.8% in the same period of 1998. The decrease in
gross profit as a percent of net sales from the first nine months
of 1999 can be attributed to the decrease in overall sales
volume.
Operating Expenses. Total operating expenses decreased to
$6,410,000 in the nine months ended September 30, 1999 from
$6,707,000 in the same period of 1998. Operating expenses as a
percent of sales increased to 16.2% in the first nine months of
1999 versus 12.7% for the same period in 1998. The primary
reason for the increase as a percent of sales is the decreased
sales volume in the first nine months of 1999 as compared to the
same period in 1998. Selling, general and administrative expense
decreased to $3,629,000 in the first nine months of 1999 compared
to $4,306,000 for the same period in 1998. The primary reasons
for the decrease include lower selling expenses related to travel
costs and lower outside commission expense.
Operating Income. Operating income decreased by 96% to
$133,000 in the nine months ended September 30, 1999 from
$3,192,000 in the nine months ended September 30, 1998 primarily
due to the decrease in net sales.
Norwegian Joint Venture. The Company's 50% share of the
pre-tax earnings (loss) of its Norwegian joint venture, Orkla
Exolon A/S, was a loss of ($12,000) for the nine months ended
September 30, 1999 versus a profit of $525,000 in the nine months
ended September 30, 1998.
Interest and Miscellaneous Expense. Interest expense
increased in the first nine months of 1999 to $1,168,000 from
$824,000 in the first nine months of 1998. The primary reason
for this increase is the interest costs related to the Company's
construction of a desulpherization plant mandated by the State of
Illinois Environmental Protection Agency. Through June 30, 1998,
these interest costs were capitalized. As of July 1, 1998, these
costs are being expensed as the facility has been placed into
service.
Miscellaneous income (expense) was $714,000 in the first
nine months of 1999 compared to ($325,000) in the nine months
ended September 30, 1998. The increase in miscellaneous income
in 1999 over 1998 is due to the Company receiving $494,000 from
suppliers as settlement in two antitrust litigation claims and
$298,000 for a business interruption insurance claim resulting
from a furnace accident at The Exolon-ESK Company of Canada, Ltd.
in the first nine months of 1999.
Abandoned Acquisition Costs. On March 24, 1998, Exolon-ESK
Company filed a Form 8-K with the SEC with respect to a Letter of
Intent with Elektroschmelzwerk Kempten GmbH ("ESK") to purchase
all of the European silicon carbide assets of ESK. During the
period of March 24, 1998 through September 30, 1998, the Company
conducted its due diligence of the Acquisition through several
outside vendors and internal personnel at a cost of $364,381.
Effective September 30, 1998, the acquisition has was abandoned
and the Company wrote off all costs related to the acquisition
that it had accumulated. No costs related to this abandoned
acquisition were incurred in 1999.
Income Tax. The Company's effective tax rate was 36% for
the nine months ended September 30, 1999 as compared to 43% for
the nine months ended September 30, 1998.
Comparison of the three months ended September 30, 1999 with the
three months ended September 30, 1998.
Net Sales. Net sales decreased $1,995,000 to
$12,603,000 in the three months ended September 30, 1999, a
decrease of 14% compared to net sales of $14,598,000 in the three
months ended September 30, 1998. The decline in sales was due to
a decrease in volume resulting from foreign competition. The
Company continues to experience pressure on prices resulting from
a decrease in demand and foreign imports.
Gross Profit. Gross profit before depreciation expense
was $2,530,000 in the three months ended September 30, 1999
compared to $1,941,000 in the three months ended September 30,
1998. As a percent of sales, gross margins were 20.1% in the
three months ended September 30, 1999 compared to 13.3% in the
three months ended September 30, 1998. The increase in gross
profit as a percent of net sales was attributed to cost
reductions at all plant locations. The Company was able to
furnace raw materials using off peak low cost power and has made
efforts to reduce operating costs through head count reductions
at all plant locations.
Operating Expenses. Operating expenses including
depreciation, were $2,004,000 during the three months ended
September 30, 1999 versus $2,352,000 during the three months
ended September 30, 1998. The decrease in operating expenses of
$348,000 is a result of spending reductions of $367,000 in
selling and general and administrative expenses, offset by a
small increase in depreciation expense of $12,000 for the three
month period ended September 30, 1999. Depreciation as a percent
of sales was 7.3% in the three months ended September 30, 1999
compared to 6.2% for the three months ended September 30, 1998.
Operating Income. Operating income (loss) was an
income of $525,000 in the three months ended September 30, 1999
compared to a loss of ($411,000) in the three months ended
September 30, 1998. The increase in operating income from 1999 to
1998 is primarily due to the cost reduction efforts noted above.
Norwegian Joint Venture. The company's 50% share of
the pre-tax earnings of its Norwegian joint venture, Orkla Exolon
A/S was a profit of $187,000 for the three months ended September
30, 1999 versus a profit of $201,000 in the three months ended
September 30, 1998.
Interest and Miscellaneous Income. Interest expense
decreased to $358,000 in the three months ended September 30,
1999 versus $406,000 in the three months ended September 30,
1998. The decrease in interest expense is primarily due to lower
interest costs charged on the Company's line of credit which had
a balance of $2,981,000 as of September 30, 1999 as compared to a
balance of $7,610,000 as of December 31, 1998. Miscellaneous
expense of $81,000 was incurred in the three months ended
September 30, 1999 versus miscellaneous expense of $161,000
incurred in the three months ended September 30, 1998.
Abandoned Acquisition Costs. On March 24, Exolon-Esk
Company filed a Form 8-K with the SEC with respect to a Letter of
Intent with Elektroschmelzwerk Kempten GmbH ( ESK ) to purchase
all of the European silicon carbide assets of ESK. During the
period March 24, 1998 through September 30, 1998, the Company
conducted its due diligence of the Acquistion through several
outside vendors and internal personnel at a cost of $364,381.
Effective September 30, 1998, the acquisition was abandoned and
the Company wrote off all costs related to the acquisition it had
accumulated. No costs related to this abandoned acquisition were
incurred in 1999.
Income Tax. The Company's effective tax rate for the
three months ended September 30, 1999 was 41% versus an effective
tax rate of 32% for the three months ended September 30, 1998.
Liquidity and Capital Resources
As of September 30, 1999, working capital (current
assets less current liabilities) has decreased by $4,014,000 to
$23,852,000 when compared to $27,866,000 as of December 31, 1998.
Inventories have decreased by $3,192,000 from $20,219,000 as of
December 31, 1998 to $17,027,000 as of September 30, 1999.
For the nine months ended September 30, 1999, net
cash provided by operating activities was $7,608,000. Cash
reserves increased by $502,000 as of September 30, 1999 compared
to December 31, 1998. Net cash provided by operating activities
was used to reduce net outstanding debt by $5,846,000 and to fund
capital expenditures of $1,227,000.
The Company's current ratio decreased to 4.8 to
1.0 at September 30, 1999 from 5.1 to 1.0 as of December 31,
1998. The ratio of total liabilities to shareholders' equity
decreased to 1.04 to 1.0 as of September 30, 1999 as compared to
1.19 to 1.0 as of December 31, 1998. Management believes that
the cash provided by operations and long-term borrowing
arrangements will provide adequate funds for current commitments
and other requirements in the near future.
Reference is made to the information included in Notes to
the Consolidated Condensed Financial Statements of the Company,
which is hereby incorporated herein by reference.
Impact of the Year 2000
The Year 2000 (Y2K) Issue is the result of computer programs
being written using two digits rather than four to define the
applicable year. Any of the Company's computer programs or
hardware that have date-sensitive software or embedded chips may
recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations
causing disruptions of operations, including, among other things,
a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
The Company's plan to resolve the Year 2000 Issue involves
the following four phases: assessment, remediation,
testing/reassessment, and implementation. To date, the Company
has fully completed its assessment of all systems that could be
significantly affected by the Year 2000. The completed
assessment indicated that most of the Company's significant
information technology systems could be affected. That
assessment also indicated that there were two manufacturing
systems also affected. It was determined that there is little,
if any, risk associated with the remaining production and
manufacturing systems. Further, the Company has determined that
there is no risk with respect to the products it has sold and
continues to sell. In addition, the Company has gathered
information about the Year 2000 compliance status of its
significant suppliers and continues to monitor their compliance.
For its information technology exposures, the Company has
decided to completely replace the existing software and
associated hardware. To date, the Company has installed the new
information systems at its Tonawanda, New York facility, which
includes the corporate headquarters. This process is completed
to the extent that both critical and daily processing is active
and is Y2K compliant.
Of the two manufacturing systems affected, only one (a
control room) represents a significant concern. Upgrade of the
affected technology has been assessed, a specific solution
specified, and the project approved. Completion of this project
is to occur by the end of 1999. The other system is a mix
station and is non-critical with respect to compliance. This
equipment is not required until March 2000. An assessment and
action plan has been developed but will not be implemented until
first Quarter, 2000.
Secondary systems have been evaluated and are either
currently in compliance or expected to be in compliance by
December 31, 1999.
The Company has queried its significant suppliers that do
not share information systems with the Company (external agents).
To date, the Company is not aware of any external agent with a
Year 2000 issue that would materially impact the Company's
results of operations, liquidity, or capital resources. However,
the Company has no means of ensuring that external agents will be
Year 2000 ready. The inability of external agents to complete
their Year 2000 resolution process in a timely fashion could
materially impact the Company. The effect of non-compliance by
external agents is not determinable.
The Company has, and will continue to utilize both internal
and external resources to replace, test, and implement the
software and certain hardware for Year 2000 modifications. The
total cost of the Year 2000 project is estimated at $1,935,000,
which includes $723,000 for the purchase of new software and
hardware that will be capitalized, $985,000 for the control room,
and $227,000 that will be expensed and incurred. To date, the
Company has incurred approximately $1,394,000 related to all
phases of the Year 2000 project.
Management of the Company believes it has an effective
program in place to resolve the Year 2000 issue in a timely
manner. As noted above, the Company has not yet completed all
necessary phases of the Year 2000 program. In the event that the
Company does not complete any additional phases, the Company
would be unable to take customer orders, manufacture and ship
products, invoice customers or collect payments. In addition,
disruptions in the economy generally resulting from Year 2000
issues could also materially adversely affect the Company. The
amount of potential liability and lost revenue cannot be
reasonably estimated at this time.
The Company currently is developing contingency plans to be
put in place in the event it, its customers, or vendors, do not
complete all phases of the Year 2000 program. Currently the plan
has addressed staffing, to ensure technical, support, and
managerial staff into January 2000.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to the information included in Note 3 to
the Consolidated Condensed Financial Statements of the Company
included under Part I, Item 1 of this Form 10-Q, which is hereby
incorporated herein by reference.
Item 2. Change in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
Wacker Chemicals (USA), Inc., which is the owner of all of
the Company's outstanding Class A Common Stock and Series B
Preferred Stock, has changed its name to Wacker Engineered
Ceramics, Inc.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are included herein:
27 Financial Data Schedule
(b) Reports on Form 8-K
None
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
President and Chief Executive Officer
/s/
Michael G. Pagano
Acting Vice President Finance and
Chief Financial Officer
Date: November 10, 1999
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