<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1996
Commission File Number 1-8803
MATERIAL SCIENCES CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 95-2673173
(State or other jurisdiction (IRS employer identification
of incorporation or organization) number)
2200 East Pratt Boulevard
Elk Grove Village, Illinois 60007
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code: (847) 439-8270
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 January 9, 1997, there were outstanding 15,494,104 shares of common stock,
$.02 par value.
<PAGE>
MATERIAL SCIENCES CORPORATION
FORM 10-Q/A
For The Quarter Ended November 30, 1996
(As Restated In Its Entirety)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------
(a) Financial statements of Material Sciences Corporation and Subsidiaries
(b) Summarized income statement information for Walbridge Coatings, An Illinois
Partnership
2
<PAGE>
Consolidated Statements of Income (Unaudited)
Material Sciences Corporation and Subsidiaries
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
November 30, November 30,
(In thousands, except per share data) 1996 (restated) (1) 1995 (restated) (1) 1996 (restated) (1) 1995 (restated) (1)
- ------------------------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Net Sales (2) $ 69,658 $ 58,020 $ 208,962 $ 177,076
Cost of Sales 50,920 45,090 153,432 135,688
------------------ ------------------ ------------------ ------------------
Gross Profit $ 18,738 $ 12,930 $ 55,530 $ 41,388
Selling, General and Administrative
Expenses 11,629 9,974 35,027 28,020
Special Charge (3) - 4,200 - 4,200
------------------ ------------------ ------------------ ------------------
Income from Operations $ 7,109 $ (1,244) $ 20,503 $ 9,168
------------------ ------------------ ------------------ ------------------
Other (Income) and Expense:
Interest Income $ (54) $ (85) $ (189) $ (278)
Interest Expense 178 104 320 163
Equity in Results of Partnership 350 7 831 23
Other, Net (265) (188) (721) (521)
------------------ ------------------ ------------------ ------------------
Total Other (Income) and Expense, Net $ 209 $ (162) $ 241 $ (613)
------------------ ------------------ ------------------ ------------------
Income Before Income Taxes $ 6,900 $ (1,082) $ 20,262 $ 9,781
Income Taxes 2,657 (412) 7,802 3,780
------------------ ------------------ ------------------ ------------------
Net Income $ 4,243 $ (670) $ 12,460 $ 6,001
================== ================== ================== ==================
Net Income Per Common and Common
Equivalent Share $ 0.27 $ (0.04) $ 0.80 $ 0.39
================== ================== ================== ==================
Weighted Average Number of Common and
Common Equivalent Shares Outstanding 15,645 15,240 15,594 15,519
================== ================== ================== ==================
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
Consolidated Balance Sheets
Material Sciences Corporation and Subsidiaries
<TABLE>
<CAPTION>
November 30, February 29,
1996 (restated) (1) 1996 (restated) (1)
(In thousands) Unaudited Audited
- ---------------------------------------------------------------- ------------------- ------------------
<S> <C> <C>
Assets:
Current Assets:
Cash and Cash Equivalents $ 1,271 $ 3,379
Receivables:
Trade, Less Reserves of $4,785 and $4,407, Respectively (4) 31,269 25,836
Current Portion of Partnership Note 812 781
Income Taxes 396 2,156
Prepaid Expenses 3,009 3,069
Inventories 30,385 28,402
Prepaid Taxes 3,074 3,074
------------------- ------------------
Total Current Assets $ 70,216 $ 66,697
------------------- ------------------
Gross Property, Plant and Equipment $ 227,847 $ 185,453
Accumulated Depreciation and Amortization (84,997) (74,571)
------------------- ------------------
Net Property, Plant and Equipment $ 142,850 $ 110,882
------------------- ------------------
Other Assets:
Investment in Partnership $ 11,227 $ 10,727
Partnership Note Receivable, Less Current Portion 748 1,123
Intangible Assets, Net 12,260 9,556
Other 869 1,041
------------------- ------------------
Total Other Assets $ 25,104 $ 22,447
------------------- ------------------
Total Assets $ 238,170 $ 200,026
=================== ==================
Liabilities:
Current Liabilities:
Current Portion of Long-Term Debt $ 14,400 $ 3,014
Accounts Payable 25,314 25,343
Accrued Payroll Related Expenses 8,172 8,036
Accrued Expenses 6,300 6,588
------------------- ------------------
Total Current Liabilities $ 54,186 $ 42,981
------------------- ------------------
Long-Term Liabilities:
Deferred Income Taxes $ 11,224 $ 11,451
Long-Term Debt, Less Current Portion 29,637 16,815
Accrued Superfund Liability 4,177 4,177
Other 6,568 6,376
------------------- ------------------
Total Long-Term Liabilities $ 51,606 $ 38,819
------------------- ------------------
Shareowners' Equity:
Preferred Stock (5) $ - $ -
Common Stock (6) (8) 323 321
Additional Paid-In Capital 48,787 47,097
Treasury Stock at Cost (7) (3,380) (3,380)
Retained Earnings 86,648 74,188
------------------- ------------------
Total Shareowners' Equity $ 132,378 $ 118,226
------------------- ------------------
Total Liabilities and Shareowners' Equity $ 238,170 $ 200,026
=================== ==================
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
Consolidated Statements of Cash Flows (Unaudited)
Material Sciences Corporation and Subsidiaries
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
November 30, November 30,
1996 1995 1996 1995
(In thousands) (restated) (1) (restated) (1) (restated) (1) (restated) (1)
- -------------------------------------------------------- ------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Cash Flows From:
Operating Activities:
Net Income $ 4,243 $ (670) $ 12,460 $ 6,001
Adjustments to Reconcile Net Income to Net Cash Used in
Operating Activities:
Depreciation and Amortization 3,642 2,904 11,106 8,567
Benefit for Deferred Income Taxes (79) (5) (227) (551)
Compensatory Effect of Stock Plans 57 159 337 1,140
Other, Net 338 (10) 819 6
-------- ------- -------- --------
Operating Cash Flow Prior to Changes in Assets $ 8,201 $ 2,378 $ 24,495 $ 15,163
and Liabilities -------- ------- -------- --------
Changes in Assets and Liabilities:
Receivables $ 1,882 $(2,201) $ (4,164) $ (6,270)
Income Taxes Receivable 1,035 (1,247) 1,760 1,072
Prepaid Expenses 154 636 60 (712)
Inventories 142 1,490 (1,983) 3,446
Accounts Payable 1,286 (1,113) (29) (5,029)
Accrued Expenses 1,490 1,926 (645) (260)
Other, Net (146) 295 (210) 398
-------- ------- -------- --------
Cash Flow from Changes in Assets and Liabilities $ 5,843 $ (214) $ (5,211) $ (7,355)
-------- ------- -------- --------
Net Cash Provided by Operating Activities $ 14,044 $ 2,164 $ 19,284 $ 7,808
-------- ------- -------- --------
Investing Activities:
Capital Expenditures, Net $(15,690) $(5,319) $(42,182) $(16,174)
Acquisitions, Net of Cash Acquired - (507) (2,489) (507)
Investment in Partnership (454) (362) (1,331) (828)
Distribution from Partnership - - 375 374
Other Long-Term Assets (117) 5 172 263
-------- ------- -------- --------
Net Cash Used in Investing Activities $(16,261) $(6,183) $(45,455) $(16,872)
-------- ------- -------- --------
Financing Activities:
Net Proceeds Under Lines of Credit $ 600 $ 1,400 $ 24,300 $ 2,600
Payments to Settle Debt (748) (22) (1,592) (753)
Sale of Common Stock 679 538 1,355 2,388
-------- ------- -------- --------
Net Cash Provided by Financing Activities $ 531 $ 1,916 $ 24,063 $ 4,235
-------- ------- -------- --------
Net Decrease in Cash $ (1,686) $(2,103) $ (2,108) $ (4,829)
Cash and Cash Equivalents at Beginning of Period 2,957 3,090 3,379 5,816
-------- ------- -------- --------
Cash and Cash Equivalents at End of Period $ 1,271 $ 987 $ 1,271 $ 987
======== ======= ======== ========
Supplemental Cash Flow Disclosures:
Subordinated Convertible Notes Issued for Acquisition $ - $ 8,189 $ 1,500 $ 8,189
Cash Portion of Acquisition and Related Costs - 507 2,489 507
-------- ------- -------- --------
Total Consideration Paid for Acquisition $ - $ 8,696 $ 3,989 $ 8,696
======== ======= ======== ========
</TABLE>
The Changes in Assets and Liabilities above for the three months and nine months
ended November 30, 1996, are net of assets and liabilities acquired.
The accompanying notes are an integral part of these statements.
5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MATERIAL SCIENCES CORPORATION
The data for the three and nine months ended November 30, 1996 and 1995 have not
been audited by independent public accountants but, in the opinion of the
Company, reflect all adjustments (consisting of only normal, recurring
adjustments) necessary for a fair presentation of the information at those dates
and for those periods. The financial information contained in this report
should be read in conjunction with the Company's 1996 Annual Report to
Shareowners and Annual Report on Form 10-K/A. Certain prior year amounts have
been reclassified to conform with the fiscal 1997 presentation.
(1) On April 7, 1997, the Company announced that it had discovered accounting
irregularities at one of its operating units. An independent investigation
has confirmed that the controller of such operating unit acted alone and
altered and falsified that unit's financial reports beginning in fiscal
1995. The Company has taken actions since learning of the accounting
irregularities intended to prevent a recurrence of this situation.
The Company's financial statements for the three and nine months ended
November 30, 1996 and 1995 have been restated to reflect the correction of
the accounting irregularities. The effect of this incident on results of
operations for fiscal 1995 was not material and the amount related to this
period is reflected in the first quarter of fiscal 1996. The effect of
restatement for the three and nine months ended November 30, 1996 and 1995
results of operations is as follows:
<TABLE>
<CAPTION>
Three Months Ended November 30, 1996 Three Months Ended November 30, 1995
------------------------------------ ------------------------------------
Previously Previously
Reported Restated Reported Restated
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $ 69,658 $ 69,658 $ 58,020 $ 58,020
Gross Profit 19,774 18,738 14,554 12,930
Income (Loss) from Operations 8,145 7,109 380 (1,244)
Net Income (Loss) 4,880 4,243 333 (670)
Net Income (Loss) per Common
and Common Equivalent Share 0.31 0.27 0.02 (0.04)
Nine Months Ended November 30, 1996 Nine Months Ended November 30, 1995
----------------------------------- -----------------------------------
Previously Previously
Reported Restated Reported Restated
-------- -------- -------- --------
Net Sales $208,962 $208,962 $177,076 $177,076
Gross Profit 58,087 55,530 46,674 41,388
Income from Operations 23,060 20,503 14,454 9,168
Net Income 14,033 12,460 9,265 6,001
Net Income per Common and
Common Equivalent Share 0.90 0.80 0.60 0.39
</TABLE>
6
<PAGE>
The effect of the restatement on the November 30, 1996 Consolidated Balance
Sheet resulted in corresponding decreases of $4,413 in Inventories, $2,744
in Accrued Expenses, and $5,055 in Retained Earnings and increases of $396
in Income Taxes Receivable and $3,782 in Accounts Payable as compared to
the November 30, 1996 amounts previously reported.
The effect of the restatement on the February 29, 1996 Consolidated Balance
Sheet resulted in corresponding decreases of $4,245 in Inventories and
$3,482 in Retained Earnings and increases of $2,156 in Income Taxes
Receivable and $1,393 in Accounts Payable as compared to the February 29,
1996 amounts previously reported.
(2) During the nine month periods ending November 30, 1996 and 1995, the
Company derived approximately 20.5% and 23.2%, respectively, of its sales
from fees billed to the Partnership by a subsidiary of the Company for
operating the Walbridge, Ohio facility.
(3) During the third quarter of fiscal 1996, the Company provided $4,200
primarily for the restructuring of its four product groups. The special
charge includes projected costs related to severance and other related
costs, and litigation expenses. Cash related components represent
approximately $3,900 with the remainder related to a writedown to net
realizable value for purchased computer software as a result of the four
product group structure.
(4) Includes trade receivables due from the Partnership of $1,292 at November
30, 1996 and $1,752 at February 29, 1996.
(5) Preferred Stock, $1.00 Par Value; 10,000,000 Shares Authorized; 1,000,000
Designated Series B Junior Participating Preferred; None Issued.
(6) Common Stock, $.02 Par Value; 20,000,000 Shares Authorized; 16,159,265
Shares Issued and 15,470,617 Shares Outstanding at November 30, 1996 and
16,046,398 Shares Issued and 15,357,750 Shares Outstanding at February 29,
1996.
(7) Treasury Stock at Cost; 688,648 Shares at November 30, 1996 and February
29, 1996.
(8) On December 20, 1996, the Board of Directors of the Company authorized the
repurchase of up to one million shares of the Company's common stock.
Repurchases will be made from time to time in the open market or through
privately negotiated purchases, as the Company may determine. As of
January 9, 1997, the Company has repurchased 3,300 shares.
7
<PAGE>
Summarized Income Statement Information (Unaudited)
Walbridge Coatings, An Illinois Partnership
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
November 30, November 30,
(In thousands) 1996 1995 1996 1995
- ----------------------------------- ------- ------ ------ ------
<S> <C> <C> <C> <C>
Net Revenues $16,609 $16,266 $50,992 $49,420
Gross Profit $ 376 $ 764 $ 1,535 $ 2,401
Income (Loss) from Operations $ (249) $ 164 $ (341) $ 595
Net Loss $ (484) $ (246) $(1,205) $ (750)
</TABLE>
NOTE: The Net Loss shown above does not directly correlate to the Equity in
Results of Partnership shown in the Company's Statement of Income due to
certain contractual allocation requirements of the Partnership. The
Company's primary financial benefit from participation in the
Partnership is in the form of revenues from operating the Walbridge,
Ohio facility. These revenues are included in the Company's net sales.
8
<PAGE>
MATERIAL SCIENCES CORPORATION
FORM 10-Q/A
For the Quarter Ended November 30, 1996
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Material Sciences Corporation ("MSC" or "Company") operates in one business
segment comprised of the following four product groups: laminates and
composites, specialty films, coil coating and electrogalvanizing. The following
table provides a summary of net sales and the percent of net sales of MSC's
product groups.
<TABLE>
<CAPTION>
Net Sales Summary Quarter Ended November 30,
- --------------------- ---------------------------------------------
1996 1995
------------------- -------------------
Product Group: Dollars Percent Dollars Percent
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Laminates and Composites $ 17,178 24.7% $ 14,807 25.5%
Specialty Films 8,047 11.5% 4,921 8.5%
Coil Coating 30,158 43.3% 24,807 42.8%
Electrogalvanizing 14,275 20.5% 13,485 23.2%
--------- --------- --------- ---------
$ 69,658 100.0% $ 58,020 100.0%
========= ========= ========= =========
Nine Months Ended November 30,
---------------------------------------------
1996 1995
------------------- -------------------
Product Group: Dollars Percent Dollars Percent
--------- --------- --------- ---------
Laminates and Composites $ 49,657 23.8% $ 42,158 23.8%
Specialty Films 29,374 14.1% 18,592 10.5%
Coil Coating 86,604 41.4% 75,332 42.5%
Electrogalvanizing 43,327 20.7% 40,994 23.2%
--------- --------- --------- ---------
$208,962 100.0% $177,076 100.0%
========= ========= ========= =========
</TABLE>
9
<PAGE>
Accounting Irregularities and Restatement of Financial Statements
As described in Note 1 of the Notes to Consolidated Financial Statements, on
April 7, 1997, the Company announced that it had discovered accounting
irregularities at one its operating units. An independent investigation has
confirmed that the controller of such operating unit acted alone and altered and
falsified that unit's financial reports beginning in fiscal 1995. The Company
has taken actions since learning of the accounting irregularities intended to
prevent a recurrence of this situation.
The Company's financial statements for the three and nine months ended November
30, 1996 and 1995 have been restated to reflect the correction of the accounting
irregularities. The effect of this incident on results of operations for fiscal
1995 was not material and the amount related to this period is reflected in the
first quarter of fiscal 1996. After restatement, the pretax effect of the total
understatement of cost of sales related to the accounting irregularities
amounted to $1,036 and $1,624 for the three months ended November 30, 1996 and
1995, respectively, and $2,557 and $5,286 for the nine months ended November 30,
1996 and 1995, respectively.
The Information in the Discussion Which Follows is Presented After Restatement
of the Financial Statements
RESULTS OF OPERATIONS
- ---------------------
Net Sales
Net sales in the third quarter of fiscal 1997 increased 20.1% over the same
period last year. Sales of laminates and composites increased by 16.0%;
specialty films 63.5%; coil coating 21.6%; and electrogalvanizing 5.9%. For the
nine-month period ended November 30, 1996, sales were 18.0% higher than the same
period in fiscal 1996. Sales of laminates and composites increased by 17.8%;
specialty films 58.0%; coil coating 15.0%; and electrogalvanizing 5.7%.
Laminates and Composites
Sales of laminates and composites during the third quarter of fiscal 1997
increased 16.0% over the same quarter last year. The increase was mainly due to
higher sales of disc brake noise damper material for the replacement market and
a higher demand for Polycore Composites(R) in both the computer and automotive
markets. On a nine-month basis, sales in this product group increased 17.8%
over the same period in fiscal 1996. Again, the major contributor to this
increase was higher sales of disc brake noise damper materials and Polycore
Composites.
10
<PAGE>
Specialty Films
During the three month period ended November 30, 1996, sales of specialty films
increased 63.5% over the same period last year. Strong gains in solar control
and safety window film, in both domestic and international markets, were the
major reasons for the increase. For the nine month period, specialty films
sales increased 58.0% as compared to the first nine months of last year. Along
with growth in all major product areas, the year to date increase was
attributable to the acquisition of Solar Gard International, Inc. ("SGI") during
the third quarter last year, the acquisition of a West Coast distributor during
the first quarter this year, and gains in all major product areas.
Coil Coating
Coil coating sales during the third quarter of fiscal 1997 grew 21.6% over the
same quarter last year. The major contributor to the growth was the increase in
shipments to the building, appliance and transportation markets. For the nine
months ended November 30, 1996, sales were 15.0% higher than the same period
last year. Again, the increase in sales for the nine-month period was due to an
increase in the same product mix.
Electrogalvanizing
MSC participates in the electrogalvanizing market through Walbridge Coatings
(the "Partnership"), a partnership among subsidiaries of MSC, Bethlehem Steel
Corporation ("Bethlehem") and Inland Steel Industries, Inc. ("Inland"). MSC's
net sales for electrogalvanizing consists of various fees charged to the
Partnership for operating the facility. Bethlehem and Inland are primarily
responsible for the sales and marketing activities of the Partnership. The
Company's primary financial benefits from the Partnership are the revenues
billed to Walbridge Coatings for operating the facility. These revenues
represent 20.7% and 23.2% of the Company's net sales in the first nine months of
fiscal 1997 and 1996, respectively. The profitability for operating the facility
was comparable to the Company's overall operating results. Under the equity
method of accounting, the Company includes its portion of the Partnership shown
in the Consolidated Statements of Income. The amounts do not directly correlate
to the Company's 50% ownership interest due to contractual allocation
requirements of the Partnership agreement.
MSC's electrogalvanizing sales in the third quarter of fiscal 1997 increased
5.9% over the third quarter last year. Electrogalvanizing volume grew 1.3% to
115,426 tons for the three months ended November 30, 1996, from the 113,980
tons reported in the prior fiscal year period. The higher volume was the result
of record level efficiencies attained at the facility. On a year-to-date basis,
sales increased 5.7% and volume increased 3.2% to 350,842 tons from 340,062 tons
over the same period in the prior fiscal year. The increase in sales and volume
over the first nine months last year resulted from the shortened annual
maintenance shutdown, improved yields and efficiencies and higher line
utilization.
11
<PAGE>
The sales and marketing responsibilities of the Partnership are split between
Bethlehem and Inland at 77% and 23%, respectively. During the first nine months
of fiscal 1997, Inland utilized only 8.3% of available production line time
rather than its full 23% share. Bethlehem and other customers utilized this
additional available line time. Inland is reviewing its future involvement in
the Partnership, and therefore, there is no assurance that Inland will utilize
its full 23% of available line time on a long-term basis. The Company believes
that any short-term disruption in volume that might be caused by a reduction in
Inland's line time requirements could eventually be replaced by additional
volume from Bethlehem and other customers.
Gross Profit
The Company's gross profit margin was 26.9% in the third quarter of fiscal 1997
as compared to 22.3% in the same period last year. For the first nine months of
the year, MSC's gross profit margin was 26.6% versus 23.4% last year. The
increase in gross profit margin was primarily due to incremental gross profit
margin related to the SGI acquisition, higher line utilization and improved
labor and overhead spending for volumes produced. This increase was offset, in
part, by changes in the product mix, a more competitive pricing environment and
lower productivity at our Middletown, Ohio operation, due to scheduled shutdowns
and a large number of new business qualification trials.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses were 16.7% of sales in the
third quarter of fiscal 1997 as compared to 24.4% of sales for the same period
last fiscal year. SG&A expenses in the third quarter of fiscal 1996 included a
$4.2 million charge for the restructuring of the Company's four product groups.
For the nine months ended November 30, 1996, SG&A expenses were 16.8% of sales
as compared to 18.2% of sales for the same period in fiscal 1996. The decrease
in SG&A was due to the special charge recorded last year, offset, in part, by
additional ongoing expenses related to the SGI and West Coast distributor
acquisitions. During this fiscal year, SG&A was also affected by the Company's
continued strategic plan for growth utilizing effective product marketing,
research and development and international marketing efforts.
Total Other (Income) and Expense, Net and Income Taxes
Total other (income) and expense, net was expense of $209 and $241 during the
third quarter and first nine months of fiscal 1997, respectively, versus income
of $162 and $613 for the third quarter and first nine months of fiscal 1996,
respectively. The increase in expense was attributable to equity in results of
partnership. MSC's effective income tax rate was approximately 38.5% during the
third quarter and first nine months of fiscal 1997 and fiscal 1996.
12
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the third quarter of fiscal 1997, MSC generated $14.0 million of cash
from operating activities compared to $2.2 million in the third quarter last
year. On a year-to-date basis, operating activities generated $19.3 million of
cash versus $7.8 million for the same period last year. The increase in cash
generation was due mainly to the increase in net income, higher depreciation and
amortization and lower receivables.
For the three and nine months ended November 30, 1996, MSC invested $15.7
million and $42.2 million, respectively, in capital improvement projects versus
$5.3 million and $16.2 million, respectively, during last fiscal year. The
increase in capital expenditures is primarily due to the construction in process
of a new coil coating facility in Elk Grove Village, Illinois. In addition, the
Company purchased certain assets of a West Coast distributor of solar control
and safety window film for approximately $4.0 million payable in cash and
convertible notes in the first quarter of this year. The Company's capital
expenditures for fiscal 1997 are estimated to be approximately $50.0 million.
MSC's total debt increased at November 30, 1996, to $44.0 million from $19.8
million at fiscal year end due mainly to increased capital expenditures and the
acquisition of the West Coast distributor of solar control and safety window
film. As of November 30, 1996, the Company maintains three unsecured lines of
credit totaling $75.0 million. There was $29.1 million outstanding under these
lines of credit as of November 30, 1996, versus $4.8 million as of February 29,
1996. At November 30, 1996, $9.7 million of the amount outstanding under these
lines of credit was borrowed under an uncommitted line of credit, and is
properly classified as a Current Liability. The Company has executed letters of
credit totaling $5.1 million against these lines leaving available lines of
credit of $40.8 million at November 30, 1996. The Company believes that its cash
flow from operations, together with available financing and cash on hand will be
sufficient to fund its working capital needs, capital expenditure program and
debt amortization.
The Company has a capital lease obligation, which was $5.7 million as of
November 30, 1996, relating to a facility which the Company subleases to the
Partnership. In addition, throughout the term of the Partnership, the Company
is contingently responsible for 50% of the Partnership's financing requirements,
including the Company's share (approximately $2.5 million) of $5.0 million in
Partnership financing loans from third parties at November 30, 1996.
MSC continues to participate in the implementation of settlements with the
government for the clean-up of various Superfund sites. For additional
information, refer to MSC's Form 10-K/A for the fiscal year ended February 29,
1996.
On December 20, 1996, the Board of Directors of the Company authorized the
repurchase of up to one million shares of the Company's common stock.
Repurchases will be made from time to time in the open market or through
privately negotiated purchases, as the Company may determine. As of January 9,
1997, the Company has repurchased 3,300 shares.
13
<PAGE>
MATERIAL SCIENCES CORPORATION
FORM 10-Q/A
For the Quarter Ended November 30, 1996
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a)(27) Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter for which
this report is filed.
14
<PAGE>
SIGNATURES
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, in Elk Grove Village, State of Illinois,
on the 23rd day of May, 1997.
MATERIAL SCIENCES CORPORATION
By: /s/ Gerald G. Nadig
-------------------------------
Gerald G. Nadig
President and Chief Executive Officer
By: /s/ James J. Waclawik, Sr.
-------------------------------
James J. Waclawik, Sr.
Vice President, Chief Financial
Officer, and Secretary
15
<PAGE>
MATERIAL SCIENCES CORPORATION
Quarterly Report on Form 10-Q/A
Index to Exhibits
Sequentially
Exhibit Number Description of Exhibit Numbered Page
- -------------- ---------------------- -------------
(27) Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the Consolidated Statements of Income and Consolidated Balance Sheets and is
qualified in its entirety by reference to such financial statement.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-START> MAR-01-1996
<PERIOD-END> NOV-30-1996
<CASH> 1,271
<SECURITIES> 0
<RECEIVABLES> 36,054
<ALLOWANCES> 4,785
<INVENTORY> 30,385
<CURRENT-ASSETS> 70,216
<PP&E> 227,847
<DEPRECIATION> 84,997
<TOTAL-ASSETS> 238,170
<CURRENT-LIABILITIES> 54,186
<BONDS> 29,637
0
0
<COMMON> 323
<OTHER-SE> 132,055
<TOTAL-LIABILITY-AND-EQUITY> 238,170
<SALES> 208,962
<TOTAL-REVENUES> 208,962
<CGS> 153,432
<TOTAL-COSTS> 153,432
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 320
<INCOME-PRETAX> 20,262
<INCOME-TAX> 7,802
<INCOME-CONTINUING> 12,460
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,460
<EPS-PRIMARY> .80
<EPS-DILUTED> .80
</TABLE>
