Prospectus Supplement Rule 424 (b3)
(To Prospectus dated March 1, 1996, as Registration Statement
supplemented by Prospectus Supplement File No. 333-1408
dated March 6, 1996)
1,458,000 Shares
The Carbide/Graphite Group, Inc.
Common Stock
---------------------------
This Prospectus Supplement relates to the offer and sale of 1,458,000
shares of $0.01 par value common stock (the "Common Stock") of The
Carbide/Graphite Group, Inc. (the "Company") which may be offered for sale
hereby, including shares of Common Stock which may be issuable upon exercise of
outstanding stock options and shares offered for resale following such exercise,
from time to time, by any or all of the selling stockholders named herein (the
"Selling Stockholders"). See "Security Ownership of Selling Stockholders"
contained in this Prospectus Supplement. The Company will not receive any of the
proceeds from the sale of such shares.
On March 1, 1996, 2,457,958 shares of Common Stock (the "Registered
Shares") were registered with the Securities and Exchange Commission on Form
S-1. On March 6, 1996, 999,958 shares of the Registered Shares were offered
pursuant to a Prospectus Supplement and sold by certain selling stockholders
named therein through an underwritten public offering. The 1,458,000 shares of
the remaining Registered Shares may be offered for sale hereby.
The Common Stock is quoted on the Nasdaq National Market under the symbol
"CGGI." On June 3, 1996, the last reported sale price of the Company's Common
Stock as reported by the Nasdaq National Market was $19.50 per share.
SEE "RISK FACTORS" COMMENCING ON PAGE 8 OF THE ACCOMPANYING PROSPECTUS FOR
A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN
INVESTMENT IN THE COMMON STOCK OFFERED HEREBY.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------------
The shares of Common Stock to which this Prospectus Supplement relates may
from time to time be offered and sold by the Selling Stockholders to or through
underwriters, through one or more agents or dealers or directly to purchasers.
The shares of Common Stock may be sold by the Selling Stockholders from time to
time, in ordinary brokers' transactions through the Nasdaq National Market at
the price prevailing at the time of such sale. The commission payable will be
the regular commission a broker receives for effecting such sales. The shares of
Common Stock may also be offered in block trades, private transactions, or
otherwise. The net proceeds to the Selling Stockholder will be the proceeds
received by him upon such sales, less brokerage commissions. All expenses of
registration in connection with this offering are being borne by the Company,
but the Selling Stockholders will pay any brokerage fees and other expenses of
sale incurred by them. See "Plan of Distribution" in the accompanying
Prospectus.
---------------------------
The date of this Prospectus Supplement is June 4, 1996
<PAGE>
<TABLE>
SECURITY OWNERSHIP OF SELLING STOCKHOLDERS
The following table sets forth certain information, as of the date of this
Prospectus Supplement, regarding the beneficial ownership of Common Stock by
each of the Selling Stockholders.
<CAPTION>
Beneficial Ownership Beneficial Ownership
Prior to sale under this After sale under this
Prospectus Supplement Prospectus Supplement
(1)(2) (1)(2)
-------------------------- ---------------------------
Beneficial Owner Number Percentage Number Percentage
- ------------------------------------------------------- ---------- ------------- ---------- --------------
<S> <C> <C> <C> <C>
Nicholas T. Kaiser (3)................................ 455,000 5.5% + -
One Gateway Center, 19th Floor
Pittsburgh, PA 15222
Ronald N. Clawson (3)................................. 180,000 2.2 + -
Walter B. Fowler (3).................................. 100,000 1.2 + -
Stephen D. Weaver (3)................................. 45,000 0.6 + -
James G. Baldwin (3).................................. 75,000 0.9 + -
James R. Ball (3)..................................... 15,000 0.2 + -
Ronald B. Kalich (3).................................. 10,000 0.1 + -
Roger Mulvihill (3)................................... 8,000 0.1 + -
Paul F. Balser (3).................................... - - - -
Mark E. Jennings (3).................................. - - - -
Robert M. Howe (4).................................... - - - -
All officers and directors as a group (11 persons).... 888,000 10.5 + -
Paul E. Stine.......................................... 90,000 1.1 + -
Vice President - Carbide Sales
Millard E. Walck....................................... 62,500 0.8 + -
Controller (Niagara Falls)
John P. Monago......................................... 55,000 0.7 + -
Vice President and Plant Manager (Niagara Falls)
David F. Higginbotham.................................. 42,500 0.5 + -
International Sales Manager
Walter E. Damian....................................... 35,000 0.4 + -
Vice President - Human Resources
Michael A. Kokoska..................................... 35,000 0.4 + -
District Sales Manager
Robert G. Pepler (5).................................. 30,000 0.4 + -
Vice President and Plant Manager (Calvert City)
Ara P. Hacetoglu (6).................................. 27,500 0.3 + -
Vice President and Plant Manager (Louisville)
Stanley L. Foster...................................... 25,000 0.3 + -
Director - Environment and Planning
Donald S. Masyada...................................... 25,000 0.3 + -
Vice President - Electrode Sales
Peter E. Younghans (7)................................ 22,500 0.3 + -
Vice President and Plant Manager (St. Marys)
Samuel L. Hoff......................................... 20,000 0.2 + -
Director - Raw Materials Technology
Jim J. Trigg (8)...................................... 20,000 0.2 + -
General Manager - Seadrift Coke, L.P.
Gerald N. Casillo...................................... 18,000 0.2 + -
Manager - Production and Process Engineering
Robert G. Keys......................................... 15,000 0.2 + -
Maintenance Manager - Seadrift Coke, L.P.
Stewart W. Robinson.................................... 15,000 0.2 + -
Vice President - Technical (Carbide)
</TABLE>
(table continued on next page)
SS-2
<PAGE>
<TABLE>
(table continued from previous page)
<CAPTION>
Beneficial Ownership Beneficial Ownership
Prior to sale under this After sale under this
Prospectus Supplement Prospectus Supplement
(1)(2) (1)(2)
-------------------------- ---------------------------
Beneficial Owner Number Percentage Number Percentage
- ------------------------------------------------------- ---------- ------------- ---------- --------------
<S> <C> <C> <C> <C>
Frank L. Sizemore...................................... 15,000 0.2% + -
Maintenance Manager (Louisville)
Joseph A. Garvelli..................................... 12,500 0.2 + -
Controller - Seadrift Coke, L.P.
Roger C. Fritz......................................... 2,500 * + -
Manager - Information Systems
Leo E. Ehrensberger.................................... 2,000 * + -
Controller (St. Marys)
</TABLE>
- ------------------
+ This Prospectus Supplement and the accompanying Prospectus relate to all
shares and shares issuable upon the exercise of options held by the
individual. In the event such individual sold all such shares, the amount
of beneficial ownership of shares reflected in this table would be zero.
* Less than 0.1%.
(1) Unless otherwise noted, each stockholder has sole voting and investment
power with respect to the shares shown.
(2) Unless otherwise noted, includes shares of Common Stock issuable upon the
exercise of vested stock options exercisable within 60 days.
(3) For a discussion of the position, office or other material relationship
between the Company and the Selling Stockholder, see "Management" and
"Certain Transactions" in the accompanying Prospectus.
(4) Mr. Howe was elected to the Company's Board of Directors in April 1996.
(5) Includes 30,000 shares issuable upon the exercise of options, 22,500 of
which are vested and exercisable.
(6) Includes 27,500 shares issuable upon the exercise of options, 20,000 of
which are vested and exercisable.
(7) Includes 22,500 shares issuable upon the exercise of options, none of which
are vested and exercisable.
(8) Includes 15,000 shares issuable upon the exercise of options, 7,500 of
which are vested and exercisable.
---------------------------
Fiscal 1996 Third Quarter Financial Data
For the third quarter ended April 30, 1996, the Company reported earnings
from continuing operations of $4.0 million, or $0.46 per share, compared with
$3.1 million, or $0.40 per share in the fiscal 1995 third quarter. During the
current quarter, weighted average common and common equivalent shares increased
11.1% over the prior year. A $0.1 million extraordinary charge associated with
the repurchase of $1.0 million in Senior Notes reduced the third quarter's net
income to $3.9 million, or $0.45 per share.
Net sales for the quarter ended April 30, 1996 were $65.2 million, compared
with $66.7 million in the fiscal 1995 third quarter. Graphite electrode product
sales were relatively unchanged at $45.1 million, while calcium carbide product
sales decreased 5.7% to $20.0 million. Within the graphite electrode products
segment, graphite electrode net sales for the quarter ended April 30, 1996 were
down 3.9% to $32.3 million due to a 12.0% decrease in shipments during the
current quarter, principally due to lower demand from several European electrode
customers. Also, a domestic customer "buy ahead" in the quarter ended January
31, 1996 resulted in lower domestic shipments in the current quarter. A 9.2%
increase in the net sales price of graphite electrodes partially offset the
effect of the lower shipments. Needle coke sales for the current quarter were
$4.5 million, versus $4.4 million in the prior year comparable quarter. A 15.6%
increase in the net sales price of needle coke was partially offset by a 11.1%
decrease in needle coke shipments, such decline being due primarily to increased
internal usage of needle coke. Net sales in the quarter ended April 30, 1996
included approximately $4.2 million of sales at cost to SGL Carbon Corporation
related to a supply agreement which was entered into in January 1995 in
connection with the sale of the Company's graphite specialty products business.
Sales of other graphite specialty material of $4.2 million increased $1.2
million, or 40.5% as compared to the quarter a year ago, principally due to
increased shipments. Calcium carbide product sales were lower versus a year ago
due to lower desulfurization products shipments and a 3.0% decrease in the
average net sales price. The decrease in shipments was primarily due to timing,
while the decrease in price was due to increased competition in the
desulfurization market as a result of a new entrant.
SS-3
<PAGE>
During the quarter ended April 30, 1996, the Company generated $8.0 million
in operating income, versus $7.8 million in the comparable prior year quarter.
Benefits derived from higher selling prices for graphite electrodes and needle
coke and lower selling, general and administrative expenses were partially
offset by higher decant oil costs, which were 15.7% higher as compared to a year
ago, coupled with the effect of lower electrode and needle coke shipments. See
"Risk Factors - Limited Availability and Pricing of Needle Coke Feedstocks" in
the accompanying Prospectus. Also, other income associated with a consulting
agreement was approximately $0.8 million lower in the quarter ended April 30,
1996.
During the quarter ended April 30, 1996, the Company realized a $0.4
million tax benefit associated with fiscal 1995 taxes from its foreign sales
corporation.
The following table reflects certain financial data of the Company as of
and for the quarter and nine months ended April 30, 1996 and 1995:
<TABLE>
<CAPTION>
Quarter ended April 30, Nine Months Ended April 30,
------------------------------ ------------------------------
1995 1996 1995 1996
-------------- -------------- -------------- --------------
(Amounts in thousands, except share & per share information)
(Unaudited)
<S> <C> <C> <C> <C>
Net sales ................................ $ 66,684 $ 65,174 $ 177,494 $ 193,486
Cost of goods sold ....................... 55,510 53,478 145,385 159,930
Selling, general and administrative ...... 3,507 3,119 10,467 9,268
Other compensation ...................... 599 588 1,896 1,474
Other expense (income) ................... (777) 24 (2,131) (253)
-------------- -------------- -------------- --------------
Operating income .................... 7,845 7,965 21,877 23,067
Special financing expenses (A) ........... 203 286 203 889
Interest expense ......................... 2,675 2,148 7,857 6,989
-------------- -------------- -------------- --------------
Income before income taxes .......... 4,967 5,531 13,817 15,189
Provision for income taxes ............... 1,838 1,551 5,115 4,857
-------------- -------------- -------------- --------------
Income from continuing operations ... 3,129 3,980 8,702 10,332
Discontinued operations, net of tax
provision (B) ....................... -- -- 16,382 --
Extraordinary loss, net of tax benefit (C) -- (67) -- (2,000)
-------------- -------------- -------------- --------------
Net income ..................... $ 3,129 $ 3,913 $ 25,084 $ 8,332
============== ============== ============== ==============
Earnings Per Share Information:
Weighted average common and common
equivalent shares ................... 7,827,681 8,699,653 7,739,876 8,496,116
Income from continuing operations ........ $ 0.40 $ 0.46 $ 1.12 $ 1.22
Net income (B) (C)....................... $ 0.40 $ 0.45 $ 3.24 $ 0.98
</TABLE>
<TABLE>
<CAPTION>
Balance Sheet Summary: April 30, 1995 July 31, 1995 April 30, 1996
-------------------- --------------------- ---------------------
<S> <C> <C> <C>
Cash & cash equivalents (D) ............. $ 32,801 $ 42,656 $ 28,682
Total assets ............................ 206,692 214,409 205,820
Long-term debt .......................... 110,000 110,000 84,284
Stockholders' equity .................... 39,954 43,012 69,430
</TABLE>
A Represents accounting, legal, printing and other fees incurred in
connection with stock offerings.
B The nine months ended April 30, 1995 include the net gain and net operating
results of the graphite specialty products business sold in January 1995.
C The quarter and nine months ended April 30, 1996 include the net charges
for the premiums paid and the write-off of deferred financing costs
associated with the repurchases of Senior Notes.
D Includes short-term investments.
SS-4
<PAGE>
