<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 August 31, 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 October 9, 1996, there were outstanding 15,466,239 shares of common stock,
$.02 par value.
<PAGE>
MATERIAL SCIENCES CORPORATION
FORM 10-Q/A
FOR THE QUARTER ENDED AUGUST 31, 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 Six Months Ended
August 31, August 31,
(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) $ 70,420 $ 58,650 $ 139,304 $ 119,056
Cost of Sales 51,137 43,953 102,512 90,598
------------------ ------------------ ------------------ -------------------
Gross Profit $ 19,283 $ 14,697 $ 36,792 $ 28,458
Selling, General and Administrative
Expenses 11,934 9,112 23,398 18,046
------------------ ------------------ ------------------ -------------------
Income from Operations $ 7,349 $ 5,585 $ 13,394 $ 10,412
------------------ ------------------ ------------------ -------------------
Other (Income) and Expense:
Interest Income $ (69) $ (100) $ (135) $ (193)
Interest Expense 142 13 142 59
Equity in Results of Partnership 595 116 481 16
Other, Net (227) (173) (456) (333)
------------------ ------------------ ------------------ -------------------
Total Other (Income) and Expense, Net $ 441 $ (144) $ 32 $ (451)
------------------ ------------------ ------------------ -------------------
Income Before Income Taxes $ 6,908 $ 5,729 $ 13,362 $ 10,863
Income Taxes 2,660 2,210 5,145 4,192
------------------ ------------------ ------------------ -------------------
Net Income $ 4,248 $ 3,519 $ 8,217 $ 6,671
================== ================== ================== ===================
Net Income Per Common and Common
Equivalent Share $ 0.27 $ 0.23 $ 0.53 $ 0.43
================== ================== ================== ===================
Weighted Average Number of Common and
Common Equivalent Shares Outstanding 15,620 15,599 15,586 15,479
================== ================== ================== ===================
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
Consolidated Balance Sheets
Material Sciences Corporation and Subsidiaries
<TABLE>
<CAPTION>
August 31, 1996 February 29, 1996
(restated) (1) (restated) (1)
(In thousands) Unaudited Audited
- ----------------------------------------------------------------------- --------------- ------------------
<S> <C> <C>
Assets:
Current Assets:
Cash and Cash Equivalents $ 2,957 $ 3,379
Receivables:
Trade, Less Reserves of $4,792 and $4,407, Respectively (3) 33,189 25,836
Current Portion of Partnership Note 774 781
Income Taxes 1,431 2,156
Prepaid Expenses 3,163 3,069
Inventories 30,527 28,402
Prepaid Taxes 3,074 3,074
-------- --------
Total Current Assets $ 75,115 $ 66,697
-------- --------
Gross Property, Plant and Equipment $212,145 $185,453
Accumulated Depreciation and Amortization (81,617) (74,571)
-------- --------
Net Property, Plant and Equipment $130,528 $110,882
-------- --------
Other Assets:
Investment in Partnership $ 11,123 $ 10,727
Partnership Note Receivable, Less Current Portion 748 1,123
Intangible Assets, Net 12,296 9,556
Other 752 1,041
-------- --------
Total Other Assets $ 24,919 $ 22,447
-------- --------
Total Assets $230,562 $200,026
======== ========
Liabilities:
Current Liabilities:
Current Portion of Long-Term Debt $ 15,857 $ 3,014
Accounts Payable 24,028 25,343
Accrued Payroll Related Expenses 7,084 8,036
Accrued Expenses 5,898 6,588
-------- --------
Total Current Liabilities $ 52,867 $ 42,981
-------- --------
Long-Term Liabilities:
Deferred Income Taxes $ 11,303 $ 11,451
Long-Term Debt, Less Current Portion 28,328 16,815
Accrued Superfund Liability 4,177 4,177
Other 6,488 6,376
-------- --------
Total Long-Term Liabilities $ 50,296 $ 38,819
-------- --------
Shareowners' Equity:
Preferred Stock (4) $ - $ -
Common Stock (5) 323 321
Additional Paid-In Capital 48,051 47,097
Treasury Stock at Cost (6) (3,380) (3,380)
Retained Earnings 82,405 74,188
-------- --------
Total Shareowners' Equity $127,399 $118,226
-------- --------
Total Liabilities and Shareowners' Equity $230,562 $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 August 31, Six Months Ended August 31,
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 $ 4,248 $ 3,519 $ 8,217 $ 6,671
Adjustments to Reconcile Net Income to Net Cash Used in
Operating Activities:
Depreciation and Amortization 3,801 2,659 7,464 5,663
Benefit for Deferred Income Taxes (74) (467) (148) (546)
Compensatory Effect of Stock Plans 130 819 280 981
Other, Net 595 116 481 16
-------- -------- -------- --------
Operating Cash Flow Prior to Changes in Assets
and Liabilities $ 8,700 $ 6,646 $ 16,294 $ 12,785
-------- -------- -------- --------
Changes in Assets and Liabilities:
Receivables $ (2,312) $ (1,482) $ (6,046) $ (4,069)
Income Taxes Receivable (673) 587 725 2,319
Prepaid Expenses 245 87 (94) (1,348)
Inventories 47 2,533 (2,125) 1,956
Accounts Payable (250) (116) (1,315) (3,916)
Accrued Expenses 1,141 971 (2,135) (2,186)
Other, Net 180 32 (64) 103
-------- -------- -------- --------
Cash Flow from Changes in Assets and Liabilities $ (1,622) $ 2,612 $(11,054) $ (7,141)
-------- -------- -------- --------
Net Cash Provided by Operating Activities $ 7,078 $ 9,258 $ 5,240 $ 5,644
-------- -------- -------- --------
Investing Activities:
Capital Expenditures, Net $(14,051) $ (6,075) $(26,492) $(10,855)
Acquisitions, Net of Cash Acquired - - (2,489) -
Investment in Partnership (672) (208) (877) (466)
Distribution from Partnership 375 374 375 374
Other Long-Term Assets 119 243 289 258
-------- -------- -------- --------
Net Cash Used in Investing Activities $(14,229) $ (5,666) $(29,194) $(10,689)
-------- -------- -------- --------
Financing Activities:
Net Proceeds (Payments) Under Lines of Credit $ 6,500 $ (5,000) $ 23,700 $ 1,200
Payments to Settle Debt (404) (361) (844) (731)
Sale of Common Stock 100 943 676 1,850
-------- -------- -------- --------
Net Cash Provided by (Used in) Financing Activities $ 6,196 $ (4,418) $ 23,532 $ 2,319
-------- -------- -------- --------
Net Decrease in Cash $ (955) $ (826) $ (422) $ (2,726)
Cash and Cash Equivalents at Beginning of Period 3,912 3,916 3,379 5,816
-------- -------- -------- --------
Cash and Cash Equivalents at End of Period $ 2,957 $ 3,090 $ 2,957 $ 3,090
======== ======== ======== ========
Supplemental Cash Flow Disclosures:
Subordinated Convertible Notes Issued for Acquisition $ - $ - $ 1,500 $ -
Cash Portion of Acquisition and Related Costs - - 2,489 -
-------- -------- -------- --------
Total Consideration Paid for Acquisition $ - $ - $ 3,989 $ -
======== ======== ======== ========
</TABLE>
The Changes in Assets and Liabilities above for the three months and six months
ended August 31, 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 six months ended August 31, 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 six months ended
August 31, 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 six months ended August 31, 1996 and 1995
results of operations is as follows:
<TABLE>
<CAPTION>
Three Months Ended August 31, 1996 Three Months Ended August 31, 1995
---------------------------------- ----------------------------------
Previously Previously
Reported Restated Reported Restated
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Net Sales $70,420 $70,420 $58,650 $58,650
Gross Profit 19,744 19,283 15,583 14,697
Income from Operations 7,810 7,349 6,471 5,585
Net Income 4,532 4,248 4,066 3,519
Net Income per Common and
Common Equivalent Share 0.29 0.27 0.26 0.23
Six Months Ended August 31, 1996 Six Months Ended August 31, 1995
-------------------------------- --------------------------------
Previously Previously
Reported Restated Reported Restated
-------- -------- -------- ---------
Net Sales $139,304 $139,304 $119,056 $119,056
Gross Profit 38,313 36,792 32,120 28,458
Income from Operations 14,915 13,394 14,074 10,412
Net Income 9,153 8,217 8,932 6,671
Net Income per Common and
Common Equivalent Share 0.59 0.53 0.58 0.43
</TABLE>
6
<PAGE>
The effect of the restatement on the August 31, 1996 Consolidated Balance
Sheet resulted in corresponding decreases of $4,574 in Inventories, $1,310
in Accrued Expenses, and $4,418 in Retained Earnings and increases of
$1,431 in Income Taxes Receivable and $2,585 in Accounts Payable as
compared to the August 31, 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 six month periods ending August 31, 1996 and 1995, the Company
derived approximately 20.9% and 23.1%, respectively, of its sales from fees
billed to the Partnership by a subsidiary of the Company for operating the
Walbridge, Ohio facility.
(3) Includes trade receivables due from the Partnership of $1,016 at August 31,
1996 and $1,752 at February 29, 1996.
(4) Preferred Stock, $1.00 Par Value; 10,000,000 Shares Authorized; 1,000,000
Designated Series B Junior Participating Preferred; None Issued.
(5) Common Stock, $.02 Par Value; 20,000,000 Shares Authorized; 16,110,931
Shares Issued and 15,422,283 Shares Outstanding at August 31, 1996 and
16,046,398 Shares Issued and 15,357,750 Shares Outstanding at February 29,
1996.
(6) Treasury Stock at Cost; 688,648 Shares at August 31, 1996 and February 29,
1996.
7
<PAGE>
Summarized Income Statement Information (Unaudited)
Walbridge Coatings, An Illinois Partnership
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
August 31, August 31,
(In thousands) 1996 1995 1996 1995
- ---------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Revenues $ 16,317 $ 15,898 $ 34,383 $ 33,154
Gross Profit $ 342 $ 668 $ 1,159 $ 1,637
Income (Loss) from Operations $ (279) $ 68 $ (92) $ 431
Net Loss $ (552) $ (377) $ (721) $ (504)
</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 August 31, 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 August 31,
- --------------------- ------------------------------------------------
1996 1995
---------------------- ---------------------
Product Group: Dollars Percent Dollars Percent
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Laminates and Composites $ 17,021 24.2% $ 13,421 22.9%
Specialty Films 11,178 15.9% 7,911 13.5%
Coil Coating 28,332 40.2% 24,131 41.1%
Electrogalvanizing 13,889 19.7% 13,187 22.5%
-------- ------- -------- -------
$ 70,420 100.0% $ 58,650 100.0%
======== ======= ======== =======
Six Months Ended August 31,
------------------------------------------------
1996 1995
---------------------- ---------------------
Product Group: Dollars Percent Dollars Percent
--------- --------- --------- ---------
Laminates and Composites $ 32,479 23.3% $ 27,351 23.0%
Specialty Films 21,327 15.3% 13,671 11.5%
Coil Coating 56,446 40.5% 50,525 42.4%
Electrogalvanizing 29,052 20.9% 27,509 23.1%
-------- ------- -------- -------
$139,304 100.0% $119,056 100.0%
======== ======= ======== =======
</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 six months ended August 31,
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 $461 and $886 for the three months ended August 31, 1996 and 1995,
respectively, and $1,521 and $3,662 for the six months ended August 31, 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 second quarter of fiscal 1997 increased 20.1% over the same
period last year. Sales of laminates and composites increased by 26.8%;
specialty films 41.3%; coil coating 17.4%; and electrogalvanizing 5.3%. For the
six-month period ended August 31, 1996, sales were 17.0% higher than the first
six months of last year. Sales of laminates and composites increased by 18.7%;
specialty films 56.0%; coil coating 11.7%; and electrogalvanizing 5.6%.
Laminates And Composites
Sales of laminates and composites during the second quarter of fiscal 1997 grew
26.8% over the same quarter last year. The increase was mainly due to an
increase in 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 six-month basis, sales in this product group increased
18.7% 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
Specialty films sales for the three month period ended August 31, 1996,
increased 41.3% over the same period last year. On a year-to-date basis, sales
of specialty films products increased 56.0% as compared to the first half of
last year. For both periods, the 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 for the second quarter of fiscal 1997 grew 17.4% over the
same quarter last year. Significant increases in products for the building,
appliance and transportation markets contributed to the higher sales. For the
six months ended August 31, 1996, sales were 11.7% higher than the same period
last year. Similarly, the increase in sales for the six-month period was due to
an increase in the same markets.
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 20.9% and 23.1% of the Company's net sales in the first six 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 second quarter of fiscal 1997 increased
5.3% over the second quarter last year. Electrogalvanizing volume grew 3.6% to
109,230 tons in the three months ended August 31, 1996, from the 105,459 tons
reported in the prior fiscal year period. Affecting the second quarter
performance was the annual maintenance shutdown taking a total of seven days,
compared with 11 days in the second quarter last year. For the first six months
of fiscal 1997, sales increased 5.6% and volume increased 4.1% to 235,416 tons
from 226,082 tons over the same period in the prior fiscal year. The increase
in sales and volume over the first six months last year resulted from the
shortened annual maintenance shutdown, improved yields 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 six months
of fiscal 1997, Inland utilized only 8.5% 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 27.4% in the second quarter of fiscal 1997
as compared to 25.1% in the same period last year. For the first six months of
the year, MSC's gross profit margin was 26.4% versus 23.9% last year. The
increase in gross profit margin for the quarter was primarily due to incremental
gross profit margin related to the SGI acquisition and improved labor and
overhead spending in relation to volume 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. During the second
quarter of fiscal 1996, the Company reached agreement with its insurers
regarding a casualty and business interruption loss incurred in the fourth
quarter of fiscal 1995. MSC recognized approximately $.7 million in operating
income during the second quarter of fiscal 1996 for this matter.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses increased to 16.9% of
sales in the second quarter of fiscal 1997 from 15.5% of sales for the same
period last fiscal year. For the six months ended August 31 ,1996, SG&A
expenses increased to 16.8% of sales from 15.2% of sales for the same period in
fiscal 1996. The increase in SG&A was largely due to additional ongoing
expenses related to the SGI and West Coast distributor acquisitions. 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 $441 and $32 during the
second quarter and first six months of fiscal 1997, respectively, versus income
of $144 and $451 for the second quarter and first six 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
second quarter and first six months of fiscal 1997 and fiscal 1996.
12
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the second quarter of fiscal 1997, MSC generated $7.1 million of cash
from operating activities compared to $9.3 million in the second quarter last
year. For the six months of fiscal 1997, operating activities generated $5.2
million of cash versus $5.6 million last year. The decrease in cash generation
was due mainly to higher receivables and higher inventory levels required due to
the increase in sales.
MSC's capital expenditures during the second quarter and first six months of
fiscal 1997 were $14.1 million and $26.5 million, respectively, versus $6.1
million and $10.9 million, respectively, 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 August 31, 1996, to $44.2 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. On August 30, 1996, MSC entered into an additional financing arrangement
with a current banking source for an additional $25.0 million unsecured line of
credit. As of August 31, 1996, the Company maintains three unsecured lines of
credit totaling $75.0 million. There was $28.5 million outstanding under these
lines of credit as of August 31, 1996, versus $4.8 million as of February 29,
1996. At August 31, 1996, $12.5 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 $41.4 million at August 31, 1996. The Company believes that its cash
flow from operations, together with available financing (including an increase
in a line of credit if required), 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 $6.1 million as of August
31, 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 August 31, 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.
13
<PAGE>
MATERIAL SCIENCES CORPORATION
FORM 10-Q/A
FOR THE QUARTER ENDED AUGUST 31, 1996
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -----------------------------------------------------------
On June 20, 1996, the Company held its Annual Meeting of Shareowners.
Jerome B. Cohen, Roxanne J. Decyk, Eugene W. Emmerich, G. Robert Evans, E.
F. Heizer, Jr., J. Frank Leach, Gerald G. Nadig, and Irwin P. Pochter, being
eight nominees named in the Company's Proxy Statement, dated May 15, 1996, were
elected at the Annual Meeting to serve as the Board of Directors by a majority
vote of shareowners. No votes were cast for any other person. The details of the
vote were as follows:
<TABLE>
<CAPTION>
Name For Against
---- ---------- -------
<S> <C> <C>
Jerome B. Cohen 12,997,928 629,229
Roxanne J. Decyk 12,995,456 631,701
Eugene W. Emmerich 12,998,007 629,150
G. Robert Evans 13,554,020 73,137
E. F. Heizer, Jr. 12,994,842 632,315
J. Frank Leach 13,550,859 76,298
Gerald G. Nadig 13,554,889 72,268
Irwin P. Pochter 12,995,637 631,520
</TABLE>
Approved by a majority vote of shareowners was the proposed 1996 Stock
Option Plan for Non-Employee Directors which provides incentives to board
members who are not officers or employees of the Company through compensation
and rewards paid in or based upon the ownership and performance of the Company's
common stock. The details of the vote were as follows:
For Against Abstain No Vote
--- --------- ------- -------
10,895,704 2,642,234 63,909 25,310
14
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a)(27) Financial Data Schedule
(b) Reports on Form 8-K
-------------------
On June 25, 1996, the Company filed a Form 8-K regarding the
adoption of a new rights agreement.
15
<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
16
<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 statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-START> MAR-01-1996
<PERIOD-END> AUG-31-1996
<CASH> 2,957
<SECURITIES> 0
<RECEIVABLES> 37,981
<ALLOWANCES> 4,792
<INVENTORY> 30,527
<CURRENT-ASSETS> 75,115
<PP&E> 212,145
<DEPRECIATION> 81,617
<TOTAL-ASSETS> 230,562
<CURRENT-LIABILITIES> 52,867
<BONDS> 28,328
0
0
<COMMON> 323
<OTHER-SE> 127,076
<TOTAL-LIABILITY-AND-EQUITY> 230,562
<SALES> 139,304
<TOTAL-REVENUES> 139,304
<CGS> 102,512
<TOTAL-COSTS> 102,512
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 142
<INCOME-PRETAX> 13,362
<INCOME-TAX> 5,145
<INCOME-CONTINUING> 8,217
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,217
<EPS-PRIMARY> 0.53
<EPS-DILUTED> 0.53
</TABLE>
