<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, 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 October 11, 1995, there were outstanding 15,355,294 shares of common
stock, $.02 par value.
<PAGE>
MATERIAL SCIENCES CORPORATION
FORM 10-Q/A
FOR THE QUARTER ENDED AUGUST 31, 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 August 31, Six Months Ended August 31,
(In thousands, except per share data) 1995(restated) (1) 1994 1995(restated) (1) 1994
- -------------------------------------- ------------------ -------- ------------------ ---------
<S> <C> <C> <C> <C>
Net Sales (2) $ 58,650 $59,415 $119,056 $118,237
Cost of Sales 43,953 43,826 90,598 87,598
---------- -------- --------- ---------
Gross Profit $ 14,697 $15,589 $ 28,458 $ 30,639
Selling, General and Administrative
Expenses 9,112 8,640 18,046 17,464
---------- -------- --------- ---------
Income from Operations $ 5,585 $ 6,949 $ 10,412 $ 13,175
---------- -------- --------- ---------
Other (Income) and Expense:
Interest Income $ (100) $ (182) $ (193) $ (355)
Interest Expense 13 40 59 58
Equity in Results of Partnership 116 5 16 (72)
Other, Net (173) (113) (333) (238)
---------- -------- --------- ---------
Total Other Income, Net $ (144) $ (250) $ (451) $ (607)
---------- -------- --------- ---------
Income Before Income Taxes $ 5,729 $ 7,199 $ 10,863 $ 13,782
Income Taxes 2,210 2,736 4,192 5,238
---------- -------- --------- ---------
Net Income $ 3,519 $ 4,463 $ 6,671 $ 8,544
========== ======== ========= =========
Net Income Per Common and Common
Equivalent Share (3) $0.23 $ 0.29 $ 0.43 $ 0.56
========== ======= ========= =========
Weighted Average Number of Common and
Common Equivalent Shares Outstanding(3) 15,599 15,270 15,479 15,260
========== ======= ========= =========
</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, February 28,
1995 (restated) (1) 1995
(In thousands) Unaudited Audited
- ----------------------------------------------------------------- ------------------- ------------
<S> <C> <C>
Assets:
Current Assets:
Cash and Cash Equivalents $ 3,090 $ 5,816
Receivables:
Trade, Less Reserves of $3,508 and $3,628, Respectively (4) 28,592 24,518
Current Portion of Partnership Note 787 792
Income Taxes - 2,319
Prepaid Expenses 3,691 2,343
Inventories 21,809 23,765
Prepaid Taxes 2,246 2,246
-------------------- -----------
Total Current Assets $ 60,215 $ 61,799
-------------------- -----------
Gross Property, Plant and Equipment $ 168,861 $ 158,129
Accumulated Depreciation and Amortization (70,655) (65,216)
-------------------- -----------
Net Property, Plant and Equipment $ 98,206 $ 92,913
-------------------- -----------
Other Assets:
Investment in Partnership $ 11,367 $ 10,917
Partnership Note Receivable, Less Current Portion 1,497 1,871
Intangible Assets, Net 3,092 3,193
Other 1,406 1,664
-------------------- -----------
Total Other Assets $ 17,362 $ 17,645
-------------------- -----------
Total Assets $ 175,783 $ 172,357
==================== ===========
Liabilities:
Current Liabilities:
Current Portion of Long-Term Debt $ 1,968 $ 1,903
Accounts Payable 18,605 22,521
Accrued Expenses 12,483 14,669
-------------------- -----------
Total Current Liabilities $ 33,056 $ 39,093
-------------------- -----------
Long-Term Liabilities:
Deferred Income Taxes $ 10,204 $ 10,750
Long-Term Debt, Less Current Portion 7,337 6,933
Accrued Superfund Liability 4,122 4,198
Other 6,158 5,979
-------------------- -----------
Total Long-Term Liabilities $ 27,821 $ 27,860
-------------------- -----------
Shareholders' Equity:
Preferred Stock (5) $ - $ -
Common Stock (6) 320 317
Additional Paid-In Capital 45,604 42,776
Treasury Stock at Cost (7) (3,380) (3,380)
Retained Earnings 72,362 65,691
-------------------- -----------
Total Shareholders' Equity $ 114,906 $ 105,404
-------------------- -----------
Total Liabilities and Shareholders' Equity $ 175,783 $ 172,357
==================== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
4
</PAGE>
<PAGE>
Consolidated Statements of Cash Flows (Unaudited)
Material Sciences Corporation and Subsidiaries
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
August 31, August 31,
(In thousands) 1995 (restated) (1) 1994 1995 (restated) (1) 1994
- ------------------------------------------------------- ------------------- ------- ------------------- --------
<S> <C> <C> <C> <C>
Cash Flows From:
Operating Activities:
Net Income $ 3,519 $ 4,463 $ 6,671 $ 8,544
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation and Amortization 2,659 2,168 5,663 4,548
Provision (Benefit) for Deferred Income Taxes (467) (248) (546) (244)
Compensatory Effect of Stock Plans 819 162 981 323
Other, Net 116 5 16 (72)
--------- -------- --------- --------
Operating Cash Flow Prior to Changes in Assets
and Liabilities $ 6,646 $ 6,550 $ 12,785 $13,099
--------- -------- --------- --------
Changes in Assets and Liabilities:
Receivables $ (1,482) $ 808 $ (4,069) $(3,447)
Income Taxes Receivable 587 (726) 2,319 (726)
Prepaid Expenses 87 (186) (1,348) (1,384)
Inventories 2,533 2,147 1,956 2,887
Accounts Payable (116) (1,000) (3,916) (5,076)
Accrued Expenses 971 (1,568) (2,186) (425)
Other, Net 32 6 103 34
--------- -------- --------- -------
Cash Flow from Changes in Assets and Liabilities $ 2,612 $ (519) $ (7,141) $(8,137)
--------- -------- --------- -------
Net Cash Provided by Operating Activities $ 9,258 $ 6,031 $ 5,644 $ 4,962
--------- -------- --------- -------
Investing Activities:
Capital Expenditures, Net $ (6,075) $(6,781) $(10,855) $(9,711)
Investment in Partnership (208) (194) (466) (589)
Distribution from Partnership 374 375 374 375
Other Long-Term Assets 243 (45) 258 22
--------- -------- --------- -------
Net Cash Used in Investing Activities $ (5,666) $(6,645) $(10,689) $(9,903)
--------- -------- --------- -------
Financing Activities:
Proceeds of Debt $ 9,842 $ 38 $ 30,083 $ 74
Payments to Settle Debt (15,203) (361) (29,614) (713)
Sale of Common Stock, Net of Repurchase 943 90 1,850 406
--------- -------- --------- -------
Net Cash Provided by (Used in) Financing Activities $ (4,418) $ (233) $ 2,319 $ (233)
--------- -------- --------- -------
Net Decrease in Cash $ (826) $ (847) $ (2,726) $(5,174)
Cash and Cash Equivalents at Beginning of Period 3,916 7,603 5,816 11,930
--------- -------- --------- -------
Cash and Cash Equivalents at End of Period $ 3,090 $ 6,756 $ 3,090 $ 6,756
========= ======== ========= =======
</TABLE>
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, 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 six months ended
August 31, 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, 1995 results of
operations is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
August 31, 1995 August 31, 1995
-------------------- --------------------
Previously Previously
Reported Restated Reported Restated
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Net Sales $58,650 $58,650 $119,056 $119,056
Gross Profit 15,583 14,697 32,120 28,458
Income from Operations 6,471 5,585 14,074 10,412
Net Income 4,066 3,519 8,932 6,671
Net Income per Common and
Common Equivalent Share 0.26 0.23 0.58 0.43
</TABLE>
The effect of the restatement on the August 31, 1995 Consolidated Balance
Sheet resulted in corresponding decreases of $1,920 in Inventories, $1,401
in Accrued Expenses, and $2,261 in Retained Earnings and an increase of
$1,742 in Accounts Payable as compared to the August 31, 1995 amounts
previously reported.
(2) During the six month periods ending August 31, 1995 and 1994, the Company
derived approximately 23.1% 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.
(3) 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.
6
<PAGE>
(4) Includes trade receivables due from the Partnership of $700 at August 31,
1995 and $799 at February 28, 1995.
(5) Preferred Stock, $1.00 Par Value; 10,000,000 Shares Authorized; 7,500,000
Designated Series A Junior Participating Preferred; None Issued.
(6) Common Stock, $.02 Par Value; 20,000,000 Shares Authorized; 16,006,764
Shares Issued and 15,318,116 Shares Outstanding at August 31, 1995 and
15,839,074 Shares Issued and 15,150,426 Shares Outstanding at February 28,
1995.
(7) Treasury Stock at Cost; 688,648 Shares at August 31, 1995 and February 28,
1995.
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) 1995 1994 1995 1994
- -------------------------------- -------- -------- -------- -------
<S> <C> <C> <C> <C>
Net Revenues $15,898 $15,271 $33,154 $30,714
Gross Profit $ 668 $ 1,068 $ 1,637 $ 2,298
Income from Operations $ 68 $ 472 $ 431 $ 1,117
Net Income (Loss) $ (377) $ (118) $ (504) $ (117)
</TABLE>
NOTE: The Net Income (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, 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 August 31,
- ----------------- --------------------------------------------
1995 1994
------------------- ------------------
Product Group: Dollars Percent Dollars Percent
------------------- ------------------
<S> <C> <C> <C> <C>
Laminates and Composites $13,421 22.9% $ 13,781 23.2%
Metallizing and Coating 7,911 13.5% 7,149 12.0%
Coil Coating 24,131 41.1% 26,186 44.1%
Electrogalvanizing 13,187 22.5% 12,299 20.7%
------- ------ -------- ------
$58,650 100.0% $ 59,415 100.0%
======= ====== ======== ======
Six Months Ended August 31,
--------------------------------------------
1995 1994
------------------- ------------------
Product Group: Dollars Percent Dollars Percent
------------------- ------------------
Laminates and Composites $ 27,351 23.0% $ 26,852 22.7%
Metallizing and Coating 13,671 11.5% 14,310 12.1%
Coil Coating 50,525 42.4% 52,437 44.4%
Electrogalvanizing 27,509 23.1% 24,638 20.8%
---------- ------ -------- ------
$119,056 100.0% $118,237 100.0%
========= ====== ======== ======
</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,
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 $886 and $3,662 for the three and six months ended August 31, 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 1996 were 1.3% lower than the second
quarter of fiscal 1995. Sales of laminates and composites were 2.6% lower and
coil coating 7.8% lower than last year's second quarter, while metallizing and
coating sales and electrogalvanizing sales were 10.7% and 7.2% higher than last
year, respectively. For the first six months of fiscal 1996, sales were 0.7%
higher than the same time period last year. Sales of laminates and composites
and electrogalvanizing grew 1.9% and 11.7%, while metallizing and coating sales
and coil coating sales were down 4.5% and 3.6%, respectively.
LAMINATES AND COMPOSITES
Laminates and composites sales during the second quarter of fiscal 1996 were
2.6% lower than during the same quarter of fiscal 1995. This decline in large
part resulted from lower Polycore Composites(R) shipments to Mexico due to a 67%
year-to-date sales decline in the Mexican market for Chrysler, the Company's
major customer in this country. This shortfall in sales was partially offset by
higher Polycore Composites(R) shipments into non-automotive markets in the U.S.
as well as higher sales for disc brake noise damper material and Specular+(R).
For the six month period ended August 31, 1995, laminates and composites sales
were 1.9% higher than the same period last fiscal year primarily due to
increases in non-automotive Polycore Composites(R) offset, in part, by
shortfalls in automotive Polycore Composites(R) and brake damper material.
10
<PAGE>
METALLIZING AND COATING
Sales of metallizing and coating products increased 10.7% in the second quarter
of fiscal 1996 as compared to the same period in fiscal 1995. This increase was
due primarily to solar control window film sales, which rebounded from a
weather-related, depressed first quarter. On a year-to-date basis, sales in this
product group were 4.5% lower than in the year earlier period. Although this
product group regained some of its momentum in the second quarter, it continued
to be affected by the replacement late last fiscal year of MSC's west coast
solar control window film distributor, and the slow start of the selling season
due to poor weather.
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.
COIL COATING
Coil coating sales during the quarter ended August 31, 1995 were 7.8% lower than
the previous year's second quarter. The sales decline reflected the lingering
effect of customer inventory adjustments affecting the Company's Middletown,
Ohio operation due to customers hedging inventories in anticipation of last
year's fourth quarter 52-day shutdown, along with a general softness in most of
MSC's other products in this group such as building products, fuel tanks,
swimming pools, and lighting. Partially offsetting this general softness was a
significant increase in the sales of clutch plate materials which were sold as a
"package". Package sales include both coating and metal components. For the
six month period ended August 31, 1995 sales were down 3.6% from the same period
last fiscal year due to the previously mentioned customer inventory hedging and
sales declines in automotive trim offset, in part, by increased sales of clutch
plate and truck trailer material.
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 consist 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 23.1% and 20.8% of the Company's net sales in the first six months of
fiscal 1996 and 1995, respectively. The profitability for operating the facility
is comparable to the Company's overall operating results. Under the equity
method of accounting, the Company includes its portion of the Partnership net
income (loss) in Equity in Results of 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 increased 7.2%, while electrogalvanizing volume
decreased 3.6% to 105,459 tons in the second quarter of fiscal 1996 from 109,372
tons in the prior fiscal year period. Lower volume was the result of taking the
electrogalvanizing facility's annual maintenance shutdown in the second quarter
versus the third quarter in the previous fiscal year. Additionally, the normal
five day shutdown was extended to eleven days as our automotive customers
lengthened their model changeover schedules. Although volume was down in the
second quarter, sales were up due to a higher value-added product mix and
improved pricing. For the first six months of fiscal 1996 sales were up 11.7%
and volume was up 1.1% to 226,082 tons from 223,560 tons for the same period in
fiscal 1995. The increase in sales over the previous fiscal year resulted from
a strong demand for new autos and trucks, a continuing shift to higher value-
added electrogalvanized and coil coated materials, and price increases. MSC
increased the capacity of the facility by approximately 5% in the third quarter
of fiscal 1995 which allowed the Company to take advantage of increased demand
during the first half of this fiscal year.
The sales and marketing responsibilities of the Partnership are split between
Bethlehem and Inland at 75% and 25%, respectively. During the first six months
of fiscal 1996, Inland utilized only 13% 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 25.1% in the second quarter of fiscal 1996
versus 26.2% in the previous year. For the first six months of fiscal 1996,
MSC's gross profit margin was 23.9% compared to 25.9% last year. The decline in
gross profit margin for the quarter compared to the prior year was due to higher
labor and overhead spending in relation to production volumes, offset, in part,
by higher value-added product mix and continuing productivity gains resulting
from capital expenditures. During the second quarter 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 for this matter.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses increased to 15.5% of
sales in the second quarter of fiscal 1996 from 14.5% of sales in the same
period last fiscal year. For the first six months of fiscal 1996, SG&A expenses
increased to 15.2% of sales from 14.8% of sales for the same period in the prior
fiscal year. The year-to-date increase in SG&A over the prior fiscal year six
month period is due to increased expenditures for strategic purposes such as
high-growth product marketing, research and development, and international
marketing efforts. These same strategic expenditures along with a lower sales
volume explain the increase in second quarter SG&A expenses as a percentage of
sales over the prior year's second quarter.
12
<PAGE>
Total Other (Income) Expense, Net and Income Taxes
Total other (income) expense, net was income of $.1 million and $.5 million
during the second quarter and first six months of fiscal 1996, versus income of
$.3 million and $.6 million, respectively in fiscal 1995. MSC's effective
income tax rate was approximately 38.5% during the first six months of fiscal
1996 versus 38.0% in the first six months of the prior fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the second quarter of fiscal 1996, MSC's operating activities generated
$9.3 million of cash versus $6.0 million of cash during the second quarter last
year. For the first six months of fiscal 1996, operating activities generated
$5.6 million of cash versus $5.0 million last year. The increase in cash
generation is due mainly to improvements in certain working capital accounts.
MSC's capital expenditures during the second quarter and first six months of
fiscal 1996 were $6.1 million and $10.9 million, versus $6.8 million and $9.7
million, respectively, last fiscal year. The cash flow from investment in
partnership, net of distributions, was comparable in the second quarter and
first six months of fiscal 1996 to the same periods of the prior fiscal year.
During the first six months of fiscal 1996 MSC's long-term debt, less current
portion increased by $.4 million to $7.3 million due to 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 $1.2 million outstanding under this
line of credit at August 31, 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 $18.9 million at August 31,
1995. 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. On September 7, 1995, MSC issued
subordinated convertible notes along with a small amount of cash to purchase all
of the outstanding capital stock of Solar Gard International for approximately
$8.6 million in total. The notes mature ratably over a five year period and are
convertible into MSC stock at a premium from current market price. The issuance
of these notes does not affect availability of funds under MSC's unsecured line
of credit.
The Company has a capital lease obligation, which was $7.7 million as of August
31, 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 August 31, 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 AUGUST 31, 1995
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -----------------------------------------------------------
On June 22, 1995, the Company held its Annual Meeting of Shareholders.
Jerome B. Cohen, Roxanne J. Decyk, Eugene W. Emmerich, G. Robert Evans, E. F.
Heizer, Jr., J. Frank Leach, and Irwin P. Pochter, being seven nominees named in
the Company's Proxy Statement, dated May 17, 1995, were elected at the Annual
Meeting to serve as the Board of Directors by a majority vote of shareholders.
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 13,702,823 253,215
Roxanne J. Decyk 13,702,407 253,631
Eugene W. Emmerich 13,708,670 247,368
G. Robert Evans 13,708,174 247,864
E. F. Heizer, Jr. 13,711,176 244,862
J. Frank Leach 13,707,396 248,642
Irwin P. Pochter 13,709,524 246,514
</TABLE>
Approved by a majority vote of shareholders were the proposed amendments to
the Material Sciences Corporation 1992 Omnibus Stock Awards Plan for Key
Employees regarding an increase in the aggregate number of shares of common
stock that may be awarded, and requiring that all stock option awards be made at
not less than 100% of fair market value. The details of the vote were as
follows:
For Against Abstain
--- --------- -------
11,099,271 2,819,372 37,395
14
<PAGE>
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.
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 Sheet 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-29-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> AUG-31-1995
<CASH> 3,090
<SECURITIES> 0
<RECEIVABLES> 32,100
<ALLOWANCES> 3,508
<INVENTORY> 21,809
<CURRENT-ASSETS> 60,215
<PP&E> 168,861
<DEPRECIATION> 70,655
<TOTAL-ASSETS> 175,783
<CURRENT-LIABILITIES> 33,056
<BONDS> 7,337
<COMMON> 320
0
0
<OTHER-SE> 114,586
<TOTAL-LIABILITY-AND-EQUITY> 175,783
<SALES> 119,056
<TOTAL-REVENUES> 119,056
<CGS> 90,598
<TOTAL-COSTS> 90,598
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 59
<INCOME-PRETAX> 10,863
<INCOME-TAX> 4,192
<INCOME-CONTINUING> 6,671
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,671
<EPS-PRIMARY> 0.43
<EPS-DILUTED> 0.43
</TABLE>
