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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 7, 1997
MATERIAL SCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 1-8803 95-2673173
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(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
2300 East Pratt Boulevard 60007
Elk Grove Village, Illinois --------------------------------
- ------------------------------- (Zip Code)
(Address of principal executive
offices)
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Registrant's telephone number, including area code: (847) 439-8270
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Item 5. Other Events.
On April 7, 1997, the Registrant issued the press release attached as
Exhibit 99.1 hereto, the text of which is incorporated by reference under this
Item 5.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
See the exhibit listed in the Index to Exhibits.
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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 hereunto duly authorized.
MATERIAL SCIENCES CORPORATION
/s/ James J. Waclawik, Sr.
Dated: April 7, 1997 By: ________________________________
Vice President & CFO
Title: ________________________
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Index to Exhibits
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Exhibit No. Description of Document
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99.1 Press release of the Registrant
issued on April 7, 1997.
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Exhibit 99.1
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MATERIAL SCIENCES CORPORATION ANNOUNCES
DISCOVERY OF ACCOUNTING IRREGULARITIES
Former Employee Overstated Operating Results in Fiscal 1995-1996-1997
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ELK GROVE VILLAGE, IL, April 7, 1997 -- Material Sciences Corporation
(NYSE:MSC), today announced it discovered accounting irregularities at one of
its subsidiaries, which caused an overstatement of earnings. The investigation
of this matter will delay the release of its results for the year ended February
28, 1997, until the end of April. MSC expects to file all of its fiscal 1997
Securities and Exchange Commission reports on a timely basis.
Gerald G. Nadig, president and chief executive officer, explained, "Last week we
discovered that the plant controller for our Laminates and Composites Group had
been altering and falsifying that operation's financial reports, beginning in
late fiscal 1995, resulting in an overstatement of operating results. Concerned
that MSC and its auditors would uncover the irregularities in the fiscal 1997
year-end audit currently underway, the controller resigned. We believe this
individual acted alone and that the irregularities occurred only at our Elk
Grove Village, Illinois facility. The company operations in Ohio, Pennsylvania,
Florida and California, along with its distribution centers, are not affected."
MSC's management and board of directors, with the assistance of its auditors and
attorneys, are conducting an active investigation.
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News Release
April 7, 1997
Page 2
Preliminary analysis performed to date indicates the following changes in MSC
earnings for fiscal 1995, 1996 and 1997 (February 28 and 29):
($Millions Except Earnings Per Share)
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Fiscal 1997 Fiscal 1996 Fiscal 1995
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(Preliminary) As (Preliminary) As (Preliminary)
Unaudited Adjusted Reported Adjusted Reported Adjusted
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Net Sales $278.0 $278.0 $236.2 $236.2 $227.7 $227.7
Gross Profit % 27.8% 26.6% 25.9% 24.4% 27.3% 27.0%
Net Income $ 18.2 $ 16.1 $ 12.0 $ 9.8 $ 16.7 $ 16.4
Earnings per
Share $ 1.17 $ 1.03 $ 0.78 $ 0.63 $ 1.10 $ 1.07
Shareowners'
Equity $138.8 $134.2 $121.7 $119.1 $105.4 $105.1
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As a result of the accounting irregularities, MSC may be in violation of
certain non-financial covenants and representations under certain of its
borrowing arrangements. The company is in discussion with these lenders. The
result of the accounting irregularities was to increase the company's gross
profit and earnings, however the liquidity and cash flows were not negatively
effected.
G. Robert Evans, chairman of the board, said, "When an individual in a
responsible position within the finance area perpetrates a deceit of this kind,
the impact is nothing short of devastating to the organization. However, the
board of directors and management believe the future of MSC is very sound. New
products and technology, new manufacturing capacity and expanding international
sales all auger well for the future.
"We will provide additional information on this situation as it becomes
available," Evans concluded.
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News Release
April 7, 1997
Page 3
Material Sciences Corporation is a technology-based manufacturer of
continuously processed specialty coated materials and services. The company's
four principal product groups are Laminates and Composites, Specialty Films,
Coil Coating, and Electrogalvanizing. Its materials are sold to a variety of
manufacturers and distributors and used across a broad spectrum of industries
and products. Founded in 1971 and headquartered near Chicago, Material
Sciences operates seven manufacturing plants in the U.S. and sells its products
around the world. The company's stock is traded on the New York Stock Exchange
under the symbol MSC.
For further information on Material Sciences by Fax, dial 1-800-PRO-INFO, ext.
MSC. Information about Material Sciences through the Internet is available at:
http://www.matsci.com/
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