<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, 1995
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, 1996, there were outstanding 15,358,345 shares of common stock,
$.02 par value.
<PAGE>
MATERIAL SCIENCES CORPORATION
FORM 10-Q/A
For The Quarter Ended November 30, 1995
(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) 1995 (restated) (1) 1994 1995 (restated) (1) 1994
- ---------------------------------------------------- ------------------ ----------- ------------------ -----------
<S> <C> <C> <C> <C>
Net Sales (2) $ 58,020 $ 56,798 $ 177,076 $ 175,035
Cost of Sales 45,090 40,022 135,688 127,620
------------------ ----------- ------------------ -----------
Gross Profit $ 12,930 $ 16,776 $ 41,388 $ 47,415
Selling, General and Administrative Expenses 9,974 9,400 28,020 26,864
Restructuring Charge (3) 4,200 - 4,200 -
------------------ ----------- ------------------ -----------
Income from Operations $ (1,244) $ 7,376 $ 9,168 $ 20,551
------------------ ----------- ------------------ -----------
Other (Income) and Expense:
Interest Income $ (85) $ (169) $ (278) $ (524)
Interest Expense 104 5 163 63
Equity in Results of Partnership 7 119 23 47
Other, Net (188) (170) (521) (408)
------------------ ----------- ------------------ -----------
Total Other Income, Net $ (162) $ (215) $ (613) $ (822)
------------------ ----------- ------------------ -----------
Income Before Income Taxes
$ (1,082) $ 7,591 $ 9,781 $ 21,373
Income Taxes (412) 2,991 3,780 8,229
------------------ ----------- ------------------ -----------
Net Income $ (670) $ 4,600 $ 6,001 $ 13,144
================== =========== ================== ===========
Net Income Per Common and Common
Equivalent Share (4) $ (0.04) $ 0.30 $ 0.39 $ 0.86
================== =========== ================== ===========
Weighted Average Number of Common and
Common Equivalent Shares Outstanding 15,240 15,290 15,519 15,267
================== =========== ================== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets
Material Sciences Corporation and Subsidiaries
November 30, February 28,
1995 (restated) (1) 1995
(In thousands) Unaudited Audited
- ----------------------------------------------------------------- ------------------- --------------
<S> <C> <C>
Assets:
Current Assets:
Cash and Cash Equivalents $ 987 $ 5,816
Receivables:
Trade, Less Reserves of $3,471 and $3,628, Respectively (5) 25,924 24,518
Current Portion of Partnership Note 844 792
Income Taxes 1,247 2,319
Prepaid Expenses 3,121 2,343
Inventories 27,433 23,765
Prepaid Taxes 2,626 2,246
--------- --------
Total Current Assets $ 62,182 $ 61,799
-------- --------
Gross Property, Plant and Equipment $174,266 $158,129
Accumulated Depreciation and Amortization (72,297) (65,216)
-------- --------
Net Property, Plant and Equipment $101,969 $ 92,913
-------- --------
Other Assets:
Investment in Partnership $ 11,722 $ 10,917
Partnership Note Receivable, Less Current Portion 1,497 1,871
Intangible Assets, Net (9) 9,083 3,193
Other 1,465 1,664
-------- --------
Total Other Assets $ 23,767 $ 17,645
-------- --------
Total Assets $187,918 $172,357
======== ========
Liabilities:
Current Liabilities:
Current Portion of Long-Term Debt $ 2,095 $ 1,903
Accounts Payable 17,733 22,521
Accrued Payroll Related Expenses 8,587 9,274
Accrued Expenses 7,047 5,395
-------- --------
Total Current Liabilities $ 35,462 $ 39,093
-------- --------
Long-Term Liabilities:
Deferred Income Taxes $ 10,376 $ 10,750
Long-Term Debt, Less Current Portion 16,573 6,933
Accrued Superfund Liability 4,264 4,198
Other 6,310 5,979
-------- --------
Total Long-Term Liabilities $ 37,523 $ 27,860
-------- --------
Shareholders' Equity:
Preferred Stock (6) $ - $ -
Common Stock (7) 321 317
Additional Paid-In Capital 46,300 42,776
Treasury Stock at Cost (8) (3,380) (3,380)
Retained Earnings 71,692 65,691
--------- --------
Total Shareholders' Equity $ 114,933 $105,404
--------- --------
Total Liabilities and Shareholders' Equity $ 187,918 $172,357
========= ========
The accompanying notes are an integral part of these statements.
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows (Unaudited)
Material Sciences Corporation and Subsidiaries
Three Months Ended Nine Months Ended
November 30, November 30,
(In thousands) 1995 (restated) (1) 1994 1995 (restated) (1) 1994
- ---------------------------------------------------------------- ----------------- ------- ------------------ --------
<S> <C> <C> <C> <C>
Cash Flows From:
Operating Activities:
Net Income $ (670) $ 4,600 $ 6,001 $ 13,144
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation and Amortization 2,904 2,303 8,567 6,851
Provision (Benefit) for Deferred Income Taxes (5) (367) (551) (611)
Compensatory Effect of Stock Plans 159 162 1,140 485
Other, Net (10) 99 6 27
-------- ------- -------- --------
Operating Cash Flow Prior to Changes in Assets and Liabilities $ 2,378 $ 6,797 $ 15,163 $ 19,896
-------- ------- -------- --------
Changes in Assets and Liabilities:
Receivables $ (2,201) $ 1,529 $ (6,270) $ (1,918)
Income Taxes Receivable (1,247) 726 1,072 -
Prepaid Expenses 636 83 (712) (1,301)
Inventories 1,490 (4,783) 3,446 (1,896)
Accounts Payable (1,113) 3,446 (5,029) (1,630)
Accrued Expenses 1,926 1,149 (260) 724
Other, Net 295 112 398 146
-------- ------- -------- --------
Cash Flow from Changes in Assets and Liabilities $ (214) $ 2,262 $ (7,355) $ (5,875)
-------- ------- -------- --------
Net Cash Provided by Operating Activities $ 2,164 $ 9,059 $ 7,808 $ 14,021
-------- ------- -------- --------
Investing Activities:
Capital Expenditures, Net $ (5,319) $(7,595) $(16,174) $(17,306)
Cash Portion of Acquisition and Related Costs (507) - (507) -
Investment in Partnership (362) (738) (828) (1,327)
Distribution from Partnership - - 374 375
Other Long-Term Assets 5 7 263 29
-------- ------- -------- --------
Net Cash Used in Investing Activities $ (6,183) $(8,326) $(16,872) $(18,229)
-------- ------- -------- --------
Financing Activities:
Proceeds of Debt $ 14,428 $ 38 $ 44,511 $ 112
Payments to Settle Debt (13,050) (407) (42,664) (1,120)
Sale of Common Stock, Net of Repurchase 538 399 2,388 805
-------- ------- -------- --------
Net Cash Provided by (Used in) Financing Activities $ 1,916 $ 30 $ 4,235 $ (203)
-------- ------- -------- --------
Net Increase (Decrease) in Cash $ (2,103) $ 763 $ (4,829) $ (4,411)
Cash and Cash Equivalents at Beginning of Period 3,090 6,756 5,816 11,930
-------- ------- -------- --------
Cash and Cash Equivalents at End of Period $ 987 $ 7,519 $ 987 $ 7,519
======== ======= ======== ========
Supplemental Cash Flow Disclosures:
Subordinated Convertible Notes Issued for Acquisition $ 8,189 $ - $ 8,189 $ -
Cash Portion of Acquisition and Related Costs 507 - 507 -
-------- ------- -------- --------
Total Consideration Paid for Acquisition (9) $ 8,696 $ - $ 8,696 $ -
======== ======= ======== ========
The accompanying notes are an integral part of these statements.
</TABLE>
5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MATERIAL SCIENCES CORPORATION
The data for the three and nine months ended November 30, 1995 and 1994 have not
been examined 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 1995 Annual Report to Shareholders and
Annual Report on Form 10-K. Certain prior year amounts have been reclassified to
conform with the fiscal 1996 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, 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, 1995 results
of operations is as follows:
<TABLE>
<CAPTION>
Three Months Ended November 30, 1995 Nine Months Ended November 30, 1995
------------------------------------ -----------------------------------
Previously Previously
Reported Restated Reported Restated
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Net Sales $58,020 $58,020 $177,076 $177,076
Gross Profit 14,554 12,930 46,674 41,388
Income (Loss) from Operations 380 (1,244) 14,454 9,168
Net Income (Loss) 333 (670) 9,265 6,001
Net Income (Loss) per Common
and Common Equivalent Share 0.02 (0.04) 0.60 0.39
</TABLE>
The effect of the restatement on the November 30, 1995 Consolidated Balance
Sheet resulted in corresponding decreases of $3,382 in Inventories, $775 in
Accrued Expenses, and $3,264 in Retained Earnings and increases of $1,247
in Income Taxes Receivable and $1,904 in Accounts Payable as compared to
the November 30, 1995 amounts previously reported.
(2) During the nine month periods ending November 30, 1995 and 1994, the
Company derived approximately 23.2% and 20.8%, respectively, of its sales
from fees billed to the Partnership by a subsidiary of the Company for
operating the Walbridge, Ohio facility.
6
<PAGE>
(3) During the third quarter of fiscal 1996, the Company provided $4,200 for
the restructuring of its four product groups. The restructuring reserve
includes projected costs related to severance, legal fees and other related
costs. 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. The
Company expects to expend the entire reserve in the next six months.
(4) On June 16, 1994 the Board of Directors of the Company declared a stock
dividend of one-half share per share of the Company's Common Stock, which
was paid on July 28, 1994 to shareholders of record at the close of
business on June 30, 1994. All share and per share data has been restated
to retroactively reflect this stock dividend.
(5) Includes trade receivables due from the Partnership of $1,036 at November
30, 1995 and $799 at February 28, 1995.
(6) Preferred Stock, $1.00 Par Value; 10,000,000 Shares Authorized; 7,500,000
Designated Series A Junior Participating Preferred; None Issued.
(7) Common Stock, $.02 Par Value; 20,000,000 Shares Authorized; 16,046,393
Shares Issued and 15,357,745 Shares Outstanding at November 30, 1995 and
15,839,074 Shares Issued and 15,150,426 Shares Outstanding at February 28,
1995.
(8) Treasury Stock at Cost; 688,648 Shares at November 30, 1995 and February
28, 1995.
(9) On September 7, 1995, the Company purchased all of the outstanding capital
stock of Solar Gard International, Inc. ("SGI"). Consideration for the
purchase, including transaction costs and subject to additional purchase
price adjustments, was approximately $8.2 million in subordinated
convertible notes ("Notes") and $.5 million in cash. As a result of the SGI
acquisition, net tangible assets of $2.6 million, and goodwill and a non-
compete agreement totaling $6.1 million were recorded in the Consolidated
Balance Sheets. The acquisition has been accounted for under the purchase
method of accounting and is included in the Consolidated Financial
Statements of the Company since the date of acquisition. The Notes bear
interest at a rate of 7% per annum. The Notes are convertible into shares
of the Company's common stock at a conversion price of $24.27 per share.
The Notes mature in five equal installments with one series of notes
becoming due annually beginning on September 8, 1996.
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) 1995 1994 1995 1994
- --------------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Revenues $16,266 $14,494 $49,420 $45,208
Gross Profit $ 764 $ 910 $ 2,401 $ 3,208
Income from Operations $ 164 $ 305 $ 595 $ 1,422
Net Loss $ (246) $ (238) $ (750) $ (355)
</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, 1995
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, metallizing and coating, 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,
- -------------------------- --------------------------------------
1995 1994
----------------- -----------------
Product Group: Dollars Percent Dollars Percent
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Laminates and Composites $ 14,807 25.5% $ 14,625 25.7%
Metallizing and Coating 4,921 8.5% 3,431 6.0%
Coil Coating 24,807 42.8% 27,066 47.7%
Electrogalvanizing 13,485 23.2% 11,676 20.6%
-------- ------- -------- -------
$ 58,020 100.0% $ 56,798 100.0%
======== ======= ======== =======
<CAPTION>
Nine Months Ended November 30,
--------------------------------------
1995 1994
----------------- -----------------
Product Group: Dollars Percent Dollars Percent
-------- ------- -------- -------
Laminates and Composites $ 42,158 23.8% $ 41,477 23.7%
Metallizing and Coating 18,592 10.5% 17,741 10.1%
Coil Coating 75,332 42.5% 79,503 45.4%
Electrogalvanizing 40,994 23.2% 36,314 20.8%
-------- ------- -------- -------
$177,076 100.0% $175,035 100.0%
======== ======= ======== =======
</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 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, 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 $1,624 and $5,286 for the three and nine months ended November 30,
1995, respectively.
The Information in the Discussion Which Follows is Presented After Restatement
of the Financial Statements
RESULTS OF OPERATIONS
Net Sales
Net sales for the third quarter of fiscal 1996 increased 2.2% over the same
period last year. Sales of laminates and composites grew 1.2%; metallizing and
coating 43.4%; and electrogalvanizing 15.5%, while coil coating sales were 8.3%
lower than the third quarter of fiscal 1995. For the nine-month period ended
November 30, 1995, sales were 1.2% higher than the same period in fiscal 1995.
Sales of laminates and composites grew 1.6%; metallizing and coating 4.8%; and
electrogalvanizing 12.9%, while coil coating sales were 5.2% lower than the same
period last year.
Laminates and Composites
Sales of laminates and composites during the third quarter of fiscal 1996 grew
1.2% over the same quarter last year. The increase is mainly due to higher sales
of disc brake noise damper material and higher sales of Polycore Composites(R)
into non-automotive markets, offset by lower sales of Specular+(R). On a
year-to-date basis, sales in this product group increased 1.6% over the same
period in fiscal 1995 primarily due to increases in sales of disc brake noise
damper material and non-automotive Polycore Composites(R), offset by shortfalls
in Specular+(R) and automotive Polycore Composites(R).
10
<PAGE>
Metallizing and Coating
On September 7, 1995, MSC acquired all of the outstanding capital stock of Solar
Gard International, Inc. ("SGI"). Headquartered in Largo, Florida, SGI was the
largest independent distributor of professional grade solar control and safety
film products in the world. It was also MSC's largest distributor, with a
relationship going back to 1980. SGI has eight wholly-owned distribution centers
across the United States, one center each in Canada and England, and a joint
venture operation in Singapore. It currently distributes products in over fifty
countries. The acquisition should help MSC better execute its international
window film marketing program and improve overall efficiency.
Metallizing and coating sales for the three months ended November 30, 1995, were
43.4% higher than the same period in fiscal 1995. The primary reason for the
increase was the inclusion of the sales of SGI since the date of acquisition. In
addition, higher solar control and safety window film sales were recorded both
domestically due to a late season and internationally due to new product
introductions. For the nine-month period ended November 30, 1995, metallizing
and coating sales increased 4.8% mainly due to the SGI acquisition, offset in
part by the slow start of the selling season due to poor weather.
Coil Coating
Coil coating sales during the third quarter of fiscal 1996 decreased 8.3% from
the same quarter last year. The sales decline was due to a general decrease in
sales in most of the Company's product categories including truck trailer,
lighting, heating and air conditioning and fuel tanks. Partially offsetting the
decrease, was a significant increase in clutch plates sold as a "package".
Package sales include both coating and metal components. During the first nine
months of fiscal 1996, sales were down 5.2% from the same time period last year.
The decrease is attributable to customer inventory hedging due to a 52-day
shutdown during the fourth quarter last year at the Company's Middletown, Ohio
operation, and a general decrease in sales in most of the Company's product
categories, offset, in part, by increased clutch plate sales.
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 23.2% and 20.8% of the Company's net sales in the first nine months of
fiscal 1996 and 1995, 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.
11
<PAGE>
MSC's electrogalvanizing sales in the third quarter of fiscal 1996 increased
15.5% over the third quarter last year. Electrogalvanizing volume grew 17.3% to
113,980 tons in the three months ended November 30, 1995, from the 97,165 tons
in the same period last year. Higher volume was the result of taking the
electrogalvanizing's annual maintenance shutdown in the second quarter versus
the third quarter in the previous year. On a year-to-date basis, sales increased
12.9% and volume increased 6.0% to 340,062 tons from 320,725 tons over the same
period in the prior fiscal year. The increase in sales resulted primarily from
the continuing shift to higher value-added electrogalvanized and coil coated
materials, as well as improved pricing.
The sales and marketing responsibilities of the Partnership are split between
Bethlehem and Inland at 75% and 25%, respectively. During the first nine months
of fiscal 1996, Inland utilized only 11% of available production line time
rather than its full 25%. 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 25% 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 22.3% in the third quarter of fiscal 1996
as compared to 29.5% in the same period last year. For the nine months ended
November 30, 1995, the Company's gross profit margin was 23.4% versus 27.1% last
year. The decrease was due to higher labor and overhead spending in relation to
production volumes, product mix and competitive pricing pressure, offset, in
part, by continuing productivity gains resulting from capital expenditures.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses including the
restructuring charge, increased to 24.4% of sales in the third quarter of fiscal
1996 from 16.5% of sales in the same period last fiscal year. SG&A expenses in
the third quarter of fiscal 1996 include a $4.2 million charge for the
restructuring of the Company's four product groups. During the first nine months
of fiscal 1996, SG&A expenses increased to 18.2% of sales from 15.3% of sales
for the same period in fiscal 1995. The increase in SG&A expenses is due to the
restructuring charge during the third quarter along with increased SG&A expenses
as a result of the SGI acquisition. As a result of the restructuring, the
Company expects to generate annual savings of approximately $4.0 million. These
savings will positively impact both the Company's gross margin and SG&A
expenses.
12
<PAGE>
Total Other (Income) Expense, Net and Income Taxes
Total other (income) expense, net was income of $.2 million and $.6 million
during the third quarter and first nine months of fiscal 1996 versus income of
$.2 million and $.8 million, respectively in fiscal 1995. MSC's effective income
tax rate was approximately 38.5% during the first nine months of fiscal 1996 and
fiscal 1995.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the third quarter of fiscal 1996, MSC generated $2.2 million of cash from
operating activities compared to $9.1 million in the third quarter last year. On
a year-to-date basis, operating activities generated $7.8 million of cash versus
$14.0 million in the same period of fiscal 1995. The decrease in cash generation
was due mainly to the decrease in net income, the timing of vendor payments of
accounts payable and higher accounts receivable, offset, in part, by lower
inventories.
MSC's capital expenditures during the third quarter and first nine months of
fiscal 1996 were $2.3 million and $1.1 million lower than those of the same
periods last year, respectively. The cash flow from investment in partnership,
net of distributions, was a negative $.4 million for the third quarter of fiscal
1996 and negative $.5 million for the first nine months of fiscal 1996, as
compared to a negative $.7 million and negative $1.0 million in the same periods
last year, respectively.
MSC's long-term debt, less current portion increased $9.6 million mainly due to
the SGI acquisition and borrowings on MSC's unsecured line of credit, offset, in
part, by normally scheduled debt amortization. The Company maintains a $25
million unsecured line of credit which expires August 31, 1998. There was $2.6
million outstanding under this line of credit at November 30, 1995 versus no
balance outstanding at February 28, 1995. The Company has executed letters of
credit totaling $4.9 million against this line leaving an available line of
credit of $17.5 million at November 30, 1995. In addition, on December 19, 1995,
the Company entered into a separate financing arrangement with a second banking
source for an additional $25 million unsecured line of credit and will be used
if necessary for acquisitions or general corporate purposes as needed. The
Company believes that its cash flow from operations, together with available
financing (including an increase in the 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 $7.3 million as of
November 30, 1995, 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 $4.3 million) of $8.5 million in
Partnership financing loans from third parties at November 30, 1995.
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 for the fiscal year ended February 28,
1995.
13
<PAGE>
MATERIAL SCIENCES CORPORATION
FORM 10-Q/A
For the Quarter Ended November 30, 1995
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 statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> NOV-30-1995
<CASH> 987
<SECURITIES> 0
<RECEIVABLES> 29,395
<ALLOWANCES> 3,471
<INVENTORY> 27,433
<CURRENT-ASSETS> 62,182
<PP&E> 174,266
<DEPRECIATION> 72,297
<TOTAL-ASSETS> 187,918
<CURRENT-LIABILITIES> 35,462
<BONDS> 16,573
<COMMON> 321
0
0
<OTHER-SE> 114,612
<TOTAL-LIABILITY-AND-EQUITY> 187,918
<SALES> 177,076
<TOTAL-REVENUES> 177,076
<CGS> 135,688
<TOTAL-COSTS> 135,688
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 163
<INCOME-PRETAX> 9,781
<INCOME-TAX> 3,780
<INCOME-CONTINUING> 6,001
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,001
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.39
</TABLE>
