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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 30, 1997
MATERIAL SCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8803 95-2673173
- ------------------------------- ------------------------ -------------------
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
2200 East Pratt Boulevard 60007
Elk Grove Village, Illinois -------------------
- --------------------------- (Zip Code)
(Address of principal executive
offices)
Registrant's telephone number, including area code: (847) 439-8270
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Item 5. Other Events.
On April 30, 1997, the Registrant issued the press releases attached as
Exhibits 99.1 and 99.2 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 exhibits 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
Dated: May 5, 1997 By: /s/ James J. Waclawik, Sr.
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James J. Waclawik, Sr.
Vice President, Chief Financial Officer
and Secretary
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Index to Exhibits
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Exhibit No. Description of Document
- ----------- -----------------------
99.1 Press release of the Registrant
issued on April 30, 1997.
99.2 Press release of the Registrant
issued on April 30, 1997.
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Exhibit 99.1
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MATERIAL SCIENCES CORPORATION
REPORTS HIGHER SALES AND EARNINGS FOR FISCAL 1997
Earnings Restated for Fiscal 1996
ELK GROVE VILLAGE, IL, April 30, 1997 -- Material Sciences Corporation
(NYSE:MSC), today announced higher sales and earnings for its fiscal year ended
February 28, 1997. MSC also restated earnings for fiscal 1996 due to previously
announced accounting irregularities.
Sales in fiscal 1997 were a record $278.0 million up 17.7 percent from $236.2
million in fiscal 1996. Net income for the year was $16.2 million, or $1.04 per
share, compared with last year's restated net income of $8.5 million, or 55
cents per share, which included a $2.6 million, or 16 cent per share, after-tax
restructuring charge.
Sales for the fourth quarter of fiscal 1997 were $69.1 million, a 16.9 percent
increase compared with sales of $59.1 million in the fourth quarter last year.
Net income for the quarter was $3.8 million, or 24 cents per share, compared
with $2.5 million, or 16 cents per share, for the same period last year as
restated.
Record Sales for All Product Groups
Coil Coating sales reached a record $115.9 million, up 15.1 percent from the
$100.7 million reported last year. Major contributors were shipments to the
building products, appliance, and transportation markets. In February, the
company started up its new coil coating line in Elk Grove Village, Illinois.
This line increases total coil coating capacity by approximately 30 percent.
Laminates and Composites sales were a record $66.5 million, up 17.1 percent over
the $56.8 million reported last year. This was largely due to strong demand for
disc brake noise dampers, especially by the replacement market, and higher
Polycore Composites/(R)/ sales to automobile and computer disk drive makers.
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News Release
April 30, 1997
Page 2
The Electrogalvanizing group set records for both sales and shipments. Sales
reached $58.7 million, 6.6 percent above the $55.0 million for last year.
Shipments climbed to 477,888 tons, 5.3 percent higher than the 453,710 tons
reported in fiscal 1996.
Specialty Films sales were a record $37.0 million, 56.4 percent above the $23.7
million achieved last year. The acquisition of two major window film
distributors, Solar-Gard and Sun-Pro, the introduction of several new products,
and continued market expansion in the U.S. and off-shore, were the major reasons
for the increase.
Strong Export Demand
International sales were a record $30.0 million, 37.3 percent higher than the
$21.8 million recorded last year, and they now represent 10.8 percent of total
revenue. Solar control and safety window film, Polycore Composites used to
reduce noise in motor vehicles, and disc brake noise dampers were the major
contributors.
Year-End Review
Commenting on the year and recent events, Gerald G. Nadig, president and chief
executive officer, said, "Fiscal 1997 was a year of many accomplishments for
Material Sciences. Unfortunately these accomplishments have been somewhat
overshadowed by the recent discovery of accounting irregularities in our
Laminates and Composites group. Since we first discovered this situation,
countless hours have been spent by our staff -- assisted by outside counsel,
public accountants, and forensic experts, to ensure a thorough investigation.
The financial and forensic portions of this investigation have been completed,
and we now can report on the findings.
"As we initially suspected, our investigation confirmed that the former plant
controller responsible for the accounting irregularities acted alone. Although
his actions did not affect the company's liquidity or cash flows, they did
affect gross profits and earnings," Nadig said.
The table below indicates the change in MSC earnings from originally reported
numbers for fiscal 1996 as well as the results for fiscal 1997. The effect on
results of operations for fiscal 1995 was not material and has been reflected in
1996. Additional information can be found in the financial schedules attached.
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News Release
April 30, 1997
Page 3
<TABLE>
<CAPTION>
($Millions, Except Earnings Per Share)
Fiscal 1997 Fiscal 1996
----------------- -----------
Actual Restated As Reported
------- -------- -----------
<S> <C> <C> <C>
Net Sales $278.0 $236.2 $236.2
Gross Profit % 26.7% 23.5% 25.9%
Net Income $ 16.2 $ 8.5 $ 12.0
Earnings per Share $ 1.04 $ 0.55 $ 0.78
Shareowners' Equity $133.4 $118.2 $121.7
</TABLE>
"In addition to the financial and forensic audits, we also are undertaking a
complete review of our internal accounting controls to ensure the integrity of
our systems going forward," Nadig added.
"As difficult as the events of the past several weeks have been, the company is
sound and the future continues to look very promising. Most importantly, the
fundamental drivers of our business remain intact. The organizational changes
we made over a year ago; our investments in research and development, capital
equipment additions and upgrades; along with the growing interest in our
products and services should continue to provide the basis for expanded sales
and earnings in the years ahead," explained Nadig.
Current Outlook
In discussing fiscal 1998, Nadig said, "One-time expenses associated with our
investigation will negatively affect first quarter earnings. In addition,
financing and start-up costs related to our $55.6 million capital spending
initiatives in fiscal 1997 -- the largest in the company history, will result in
first quarter earnings for fiscal 1998 that are below the restated 26 cents in
the year-ago quarter. More favorable comparisons are expected in subsequent
quarters.
"To our shareowners, whose support and confidence is essential to our growth and
success, I want to emphasize that MSC is committed to achieving optimum
investment returns and value. I am confident we are participating in the right
markets with the right products and technology, and have very capable people in
charge of executing our growth strategy.
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News Release
April 30, 1997
Page 4
"In support of this commitment, we recently redesigned our managers'
compensation program by tying it to a financial performance measure intended to
better reflect economic value through focus on expanding our value-adding
businesses, improving net operating profit, and optimizing return on invested
capital," Nadig explained.
"On December 20, 1996, we announced a program to repurchase up to 1 million
shares of MSC stock. To date, 29 percent of the authorized amount has been
purchased. We are continuing this program because our stock is a good value and
reflects management's and the board of directors' confidence in the fundamental
strengths that underlie MSC and its prospects for the future," concluded Nadig.
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, MSC operates seven manufacturing
plants in the U.S. and sells its products around the world.
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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Exhibit 99.2
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MATERIAL SCIENCES CORPORATION NAMES
MOORE to Chief Operating Officer,
Williams as Subsidiary group Vice President
ELK GROVE VILLAGE, IL, April 30, 1997 -- Material Sciences Corporation
(NYSE:MSC) today announced that Thomas E. Moore, 51, will become the company's
executive vice president and chief operating officer effective May 1, 1997. The
COO position became available after Gerald G. Nadig was elected chief executive
officer effective January 1, 1997. Edward A. Williams was named group vice
president and general manager of MSC Walbridge Coatings Inc., to succeed Moore.
Commenting on Moore's promotions, Nadig said, "Tom has done an excellent job at
our Walbridge Coatings operation and this recognition is well deserved."
Moore began his career at MSC as general manager of its MSC Walbridge Coatings
Inc., subsidiary in 1984 and was appointed vice president and general manager in
1987. In 1993, Moore was promoted to his current position as executive vice
president and general manager. His previous business experience included
various engineering and management positions with Sharon Steel Corporation.
Moore received his B.S.E.E. from Drexel University. Moore, his wife Nancy, and
their three children will be relocating to the Chicago area later this year.
Williams, 38, joined MSC Walbridge Coatings Inc. as plant manager in 1993. His
previous business experience included engineering and management positions with
Armco Steel Company and National Steel Midwest Division. Williams received his
B.S. in metallurgical engineering in 1982 from the University of Cincinnati. He
lives in Perrysburg, Ohio, with his wife Patty and their two daughters.
Material Sciences Corporation is a technology-based manufacturer of continuously
processed specialty coated materials and services. The
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News Release
April 30, 1997
Page 2
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, MSC
operates seven manufacturing plants in the U.S. and sells its products around
the world.
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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