FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number: 0-20704
ACX TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-1208699
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
16000 Table Mountain Parkway, Golden, Colorado 80403
(Address of principal executive offices) (Zip Code)
(303) 271-7000
(Registrant's telephone number, including area code)
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 [ ]
There were 28,281,369 shares of common stock outstanding as of
November 4, 1997.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ACX TECHNOLOGIES, INC.
CONSOLIDATED INCOME STATEMENT
(In thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
1997 1996 1997 1996
-------------------- --------------------
Net sales $186,458 $175,154 $546,693 $536,279
Costs and expenses:
Cost of goods sold 140,571 137,218 412,801 418,281
Marketing, general and
administrative 21,713 18,459 68,461 57,554
Research and development 4,085 3,602 12,501 10,996
Asset impairment and
restructuring charges 17,500 --- 19,780 ---
------- ------- ------- -------
Total operating expenses 183,869 159,279 513,543 486,831
------- ------- ------- -------
Operating income 2,589 15,875 33,150 49,448
Other income (expense) - net (269) 21 17 62
Interest expense - net (614) (1,714) (2,379) (5,502)
------- ------- ------- -------
Income from continuing
operations before income
taxes 1,706 14,182 30,788 44,008
Income tax expense 750 5,600 12,600 17,500
------- ------- ------- -------
Income from continuing
operations 956 8,582 18,188 26,508
------- ------- ------- -------
Discontinued operations:
Loss from discontinued
operations of Golden
Aluminum Company --- --- --- (5,033)
Loss on disposal of Golden
Aluminum Company --- --- --- (70,000)
------- ------- ------- --------
Net income (loss) $956 $8,582 $18,188 ($48,525)
======= ======= ======= ========
Net income (loss) per share
of common stock:
Continuing operations $0.03 $0.30 $0.63 $0.93
Discontinued operations --- --- --- (2.62)
------- ------- ------- -------
Net income (loss) per share $0.03 $0.30 $0.63 ($1.69)
======= ======= ======= =======
Weighted average share
outstanding 29,397 28,633 29,021 28,641
======= ======= ======= =======
See Notes to Consolidated Financial Statements.
ACX TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEET
(In thousands, except share data)
September 30, December 31,
1997 1996
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 63,322 $ 15,671
Accounts receivable 87,663 71,886
Inventories:
Finished 51,884 46,312
In process 32,757 28,837
Raw materials 31,348 26,371
-------- --------
Total inventories 115,989 101,520
-------- --------
Deferred tax asset 12,101 18,218
Other assets 24,997 11,571
Net current assets of discontinued
operations 565 53,052
-------- --------
Total current assets 304,637 271,918
Properties at cost less accumulated
depreciation and amortization of $260,063
in 1997 and $234,248 in 1996 243,257 244,615
Note receivable 55,396 ---
Goodwill, net 58,528 46,799
Other assets 40,585 49,860
Noncurrent assets of discontinued operations --- 63,500
-------- --------
Total assets $702,403 $676,692
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Total current liabilities $123,340 $117,292
Long-term debt 100,000 100,000
Accrued postretirement benefits 28,626 27,890
Other long-term liabilities 16,784 19,002
-------- --------
Total liabilities 268,750 264,184
Minority interest 13,495 14,605
Shareholders' equity
Preferred stock, non-voting, $0.01 par
value, 20,000,000 shares authorized and
no shares issued or outstanding --- ---
Common stock, $0.01 par value 100,000,000
shares authorized and 28,259,000 and
27,934,000 issued and outstanding at
September 30, 1997, and December 31, 1996 283 279
Paid-in capital 449,111 443,302
Retained deficit (29,083) (47,271)
Cumulative translation adjustment and other (153) 1,593
-------- --------
Total shareholders' equity 420,158 397,903
-------- --------
Total liabilities and shareholders' equity $702,403 $676,692
======== ========
See Notes to Consolidated Financial Statements.
ACX TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
Nine months ended
September 30,
1997 1996
----------------------
Cash flows from operating activities:
Net income (loss) $18,188 ($48,525)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Loss on disposal of discontinued
operations, net of tax --- 70,000
Asset impairment and
restructuring charges 17,103 ---
Depreciation and amortization 31,440 36,989
Change in deferred income taxes 12,960 3,116
Change in accrued postretirement
benefits 736 712
Change in current assets and
current liabilities 12,922 (44,762)
Change in deferred items and
other (1,993) 2
-------- --------
Net cash provided by operating 91,356 17,532
activities
Cash flows used in investing activities:
Additions to properties (38,842) (41,401)
Acquisitions, net of cash acquired (18,349) (12,536)
Proceeds from sales of properties 11,093 4,363
Other (3,282) (2,300)
-------- --------
Net cash used in investing activities (49,380) (51,874)
Cash flows provided by financing
activities:
Option exercises and other 5,675 655
Cash and cash equivalents:
Net increase (decrease) in cash and
cash equivalents 47,651 (33,687)
Balance at beginning of period 15,671 52,686
-------- --------
Balance at end of period $63,322 $18,999
======== ========
See Notes to Consolidated Financial Statements.
ACX TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Discontinued Aluminum Operations
On March 1, 1997, the sale of Golden Aluminum Company (Golden
Aluminum) was completed for $70 million, of which $10 million was
paid at closing and $60 million is due within two years. In
addition, ACX Technologies, Inc. (the Company) retained a 3.6
percent equity interest in either Golden Aluminum or the
equivalent in stock in the purchaser or cash which increases by
0.3 percent for each month the obligation remains unpaid after
the one year anniversary of the sale. In accordance with the
purchase agreement, the purchaser has the right to sell Golden
Aluminum back to the Company during the two year period in
discharge of the $60 million obligation. The initial payment of
$10 million is non-refundable. Nearly all of the working capital
of Golden Aluminum, which was not part of the sales agreement,
was liquidated during the first nine months of 1997.
Summarized results of discontinued operations are as follows:
Three months ended Nine months ended
September 30, September 30,
1997 1996 1997 1996
------------------ --------------------
Revenues $ --- $ 57,892 $ 38,526 $129,135
======= ======== ======== ========
Loss from operations
before income taxes $ --- $ --- $ --- ($ 8,033)
Income tax benefit --- --- --- 3,000
------- -------- ------- --------
Net loss from operations --- --- --- (5,033)
======= ======== ======== ========
Loss per common share $ --- $ --- $ --- ($ 0.18)
======= ======== ======== ========
Loss on disposal before
income taxes --- --- --- (92,000)
Loss on operations during
disposition period
before income taxes --- --- --- (18,000)
Income tax benefit --- --- --- 40,000
======= ======== ======== ========
Net loss on disposal of
discontinued operation $ --- $ --- $ --- ($70,000)
======= ======== ======== ========
Loss per common share $ --- $ --- $ --- ($ 2.44)
======= ======== ======== ========
The historical operating results and the loss on the sale of this
business have been segregated as discontinued operations for all
periods presented in the consolidated income statement. The
remaining assets and liabilities held for sale have been
separately identified as net current assets of discontinued
operations, which consist primarily of accounts receivable and
inventory, partially offset by accounts payable. The noncurrent
assets reported in the December 31, 1996 balance sheet are
composed primarily of the fixed assets of Golden Aluminum which
were subsequently sold on March 1, 1997. The noncurrent notes
receivable of $55.4 million reported in the September 30, 1997
balance sheet represents the discounted obligation for the
remaining sales price of Golden Aluminum. The consolidated
statement of cash flows has not been restated for the
discontinued operation and, therefore, includes sources and uses
of cash for Golden Aluminum's operations.
Note 2. Asset Impairment and Restructuring Charges
During the third quarter of 1997, the Company recorded $17.5
million in asset impairment and restructuring charges at Golden
Technologies Company, Inc. (Golden Technologies). The charges
relate to the biodegradable polymer project, the assets of which
became impaired when the future cash flows to support
capitalization were significantly reduced when the Company made
the decision to limit future financial resources and seek a
strategic financial partner to successfully commercialize the
project. Of the $17.5 million in charges, approximately $0.4
million was paid during the third quarter of 1997 for severance
related to the elimination of approximately 40 research and
administrative positions. The remaining cash costs of
approximately $0.5 million are expected to be paid by mid-1998.
During the first quarter of 1997, the Company adopted a plan to
exit the high-fructose corn syrup business and recorded severance
and exit costs of $2.3 million in conjunction with this plan.
Through the first nine months of 1997, $1.2 million was paid for
severance and outplacement costs related to the elimination of
approximately 70 manufacturing and administrative positions and
other exit costs related to the shut down of the high-fructose
corn syrup manufacturing process. The remaining charge of $1.1
million relates to various exit costs which the Company expects
to pay during the remainder of 1997.
During the fourth quarter of 1996, the Company recorded
restructuring charges of $2.4 million related to operations at
Golden Technologies. During the first nine months of 1997,
approximately $1.9 million was paid in cash with respect to this
charge. The remaining expected cash outlay of $0.1 million is
expected to be paid during the fourth quarter of 1997.
Note 3. Adoption of New Accounting Standards
Statement of Financial Accounting Standards No. 131, "Disclosures
about Segments of an Enterprise and Related Information", was
issued in June 1997. This statement establishes standards for
the way public business enterprises report information about
operating segments. It also establishes standards for related
disclosure about products and services, geographical areas, and
major customers. This statement is effective for the Company's
financial statements for the year ended December 31, 1998 and the
adoption of this standard is not expected to have a material
effect on the Company's financial statements.
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income", was issued in June 1997. The statement
establishes standards for reporting and display of comprehensive
income in financial statements. This statement is effective for
the Company's financial statements for the year ended December
31, 1998 and the adoption of this standard is not expected to
have a material effect on the Company's financial statements.
Statement of Financial Accounting Standards No. 128, "Earnings
per Share", was issued in February 1997. The adoption of this
new accounting standard, which is required on December 31, 1997,
will result in the restatement of earnings per share for all
periods presented. Based on management's estimates, the adoption
of this standard is not expected to have a material effect on the
Company's financial statements.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
General Business Overview
The operations of ACX Technologies, Inc. (the Company) consist of
two primary business segments conducted by Coors Ceramics Company
(Coors Ceramics) and Graphic Packaging Corporation (Graphic
Packaging). Coors Ceramics manufactures advanced technical
ceramic products while Graphic Packaging produces high-value
consumer and industrial flexible packaging and folding cartons.
In addition to its primary business units, the Company operates
Golden Technologies, which includes operations that assemble and
distribute solar electric systems primarily through its majority
owned subsidiary Photocomm, Inc., operations that produce corn
starch and other food ingredients, as well as operations which
develop biodegradable polymers, for which the Company is seeking
a strategic financial partner. Prior to 1997, Golden
Technologies' operations included the manufacture of high-
fructose corn syrup but in early 1997, the Company adopted a plan
to exit this business. Effective March 31, 1997, operations at
the corn-wet milling facility were converted to producing corn
starch only.
Until early 1996, the Company operated Golden Aluminum Company
(Golden Aluminum) which produced aluminum flat rolled products
primarily for the aluminum can industry. In 1996, the Company's
Board of Directors adopted a plan to dispose of this business.
Effective March 1, 1997, the Company sold Golden Aluminum for $70
million, of which $10 million was paid at closing and $60 million
is due within two years. In accordance with the purchase
agreement, the purchaser has the right to sell Golden Aluminum
back to the Company during the two year period in discharge of
the $60 million obligation. The initial payment of $10 million
is non-refundable. Nearly all of the working capital of Golden
Aluminum on March 1, 1997 of $55 million, which was not part of
the sales agreement, has been liquidated as of September 30,
1997. The operating results of Golden Aluminum have been
classified as discontinued operations for all periods presented
and, consequently, the following discussion excludes any analysis
of the discontinued operations.
Results from Continuing Operations
Consolidated net sales for the three months ended September 30,
1997 increased $11.3 million, or 6.5 percent, to $186.5 million
when compared to net sales of $175.2 million reported in the
third quarter of 1996. A 23.1 percent increase in net sales at
Coors Ceramics and a 5.2 percent increase in net sales at Graphic
Packaging gave rise to the consolidated increase. This growth
resulted in net sales records for the third quarter for both
companies. Offsetting these increases were reduced net sales at
Golden Technologies which is no longer producing or selling high-
fructose corn syrup. Consolidated net sales for the nine months
ended September 30, 1997 were $546.7 million, an increase of
$10.4 million, or 1.9 percent, when compared to the prior year
similar period consolidated net sales of $536.3 million. A 7.6
percent increase in net sales at Coors Ceramics and a 5.2 percent
increase in net sales at Graphic Packaging again more than offset
the reduced net sales at Golden Technologies.
Consolidated gross margin (gross profit as a percent of net
sales) for the three month period increased from 21.7 percent in
1996 to 24.6 percent in 1997, while the nine month period
experienced a similar increase from 22.0 percent in 1996 to 24.5
percent in 1997. The elimination of the low margin corn syrup
business at Golden Technologies was the largest contributor to
the improvement in gross margin.
As a percent of net sales, marketing, general and administrative
costs increased from 10.5 percent for the three month period of
1996 to 11.6 percent for the 1997 similar period. For the nine
month period, marketing, general and administrative costs as a
percent of sales increased from 10.7 percent to 12.5 percent for
the 1997 similar period. The increase in these costs for both
periods was primarily attributable to increased sales activities
at Coors Ceramics and Graphic Packaging. Also, the addition of
Photocomm, Inc., which is included in the Company's consolidated
financial statements since the November 1996 acquisition of its
controlling interest, and the inclusion in the Company's
consolidated financial statements of the Tetrafluor, Inc.
acquisition in August 1997, have contributed to these increases.
For the three months ended September 30, 1997, consolidated
operating income was $2.6 million compared to $15.9 million in
the year ago third quarter. Included in consolidated operating
income for the 1997 quarter is a $17.5 million asset impairment
and restructuring charge related to Golden Technologies'
biodegradable polymer project. Excluding the asset impairment
and restructuring charge, operating income for the quarter was
$20.1 million, a 26.5 percent improvement as compared to the 1996
similar period consolidated operating income of $15.9 million.
This increase is primarily a result of increased operating income
at Coors Ceramics related to improved capacity utilization and
increased operating income at Graphic Packaging as a result of a
favorable product mix, improved gross margins and controlled
administrative expenses. For the nine month period ended
September 30, 1997, consolidated operating income was $33.2
million compared to $49.4 million in the year ago nine month
period. In addition to the third quarter charge of $17.5 million
mentioned above, the nine month 1997 period also includes a first
quarter $2.3 million restructuring charge related to exiting the
high-fructose corn syrup business. Excluding these charges,
consolidated operating income for the nine month period was $53.0
million, a 7.1 percent increase as compared to the 1996 similar
period consolidated operating income of $49.4 million. This
increase is primarily a result of increased operating income at
Coors Ceramics and Graphic Packaging.
Interest expense - net for the third quarter and the first nine
months of 1997 was $0.6 million and $2.4 million, respectively,
compared to $1.7 million and $5.5 million in the 1996 similar
periods. Interest expense - net has been favorably impacted by
additional interest income in 1997 from investments and from
imputed interest on the note receivable from the purchaser of
Golden Aluminum. Cash generated from the sale of Golden Aluminum
and the ensuing working capital liquidation have contributed to
the Company's increase in short-term, interest bearing
investments.
The consolidated annualized effective tax rate for the nine
months ended September 30, 1997 was 40.9 percent. The effective
tax rate of the Company is higher than the statutory tax rate of
35.0 percent because of state and foreign taxes, deductions that
are not deductible for tax purposes such as the amortization of
goodwill, and the lack of tax benefits from operating losses at
the Company's subsidiaries that are not consolidated for tax
purposes.
Liquidity and Capital Resources
The Company's liquidity is generated from both internal and
external sources and is used to fund short-term working capital
needs, capital expenditures and acquisitions. Internally
generated liquidity is measured by net cash from operations as
discussed below and working capital. At September 30, 1997, the
Company's working capital (excluding the net current assets of
the discontinued operation) was $180.7 million with a current
ratio of 2.5 to 1. The Company considers its working capital
sufficient to meet its anticipated short-term requirements. For
long-term requirements, the Company has access to a $125 million
unsecured, committed revolving credit facility which was unused
during the nine month period ended September 30, 1997. In
addition, the Company continues to search for appropriate
acquisition candidates and may obtain all or a portion of the
financing for future acquisitions through the incurrence of
additional debt, which the Company believes it can obtain at
reasonable terms and pricing.
Net cash generated by operations for the nine month period ended
September of 1997 was $91.4 million compared to $17.5 million for
the 1996 similar period. Contributing to the improved cash
position was the liquidation of Golden Aluminum's working
capital. Net cash used in investing activities for 1997
decreased $2.5 million as compared to 1996, primarily the result
of slightly lower capital expenditures, the $10.0 million
proceeds realized to date on the sale of Golden Aluminum, offset
by the additional cash used for acquisitions in 1997.
Segment Information
Net sales and operating income for the third quarter and first
nine months of 1997 and 1996 are summarized by segment below:
Third Quarter Only
(In thousands)
Operating
Net Sales Income(Loss)
1997 1996 1997 1996
-------------------- ---------------------
Coors Ceramics $ 79,329 $ 64,434 $ 12,454 $ 9,467
Graphic Packaging 92,513 87,939 12,992 11,121
Golden Technologies 14,616 22,781 (20,296) (2,717)
Corporate --- --- (2,561) (1,996)
-------- -------- -------- --------
$186,458 $175,154 $ 2,589 $ 15,875
======== ======== ======== ========
Year-To-Date
(In thousands)
Operating
Net Sales Income(Loss)
1997 1996 1997 1996
-------------------- ---------------------
Coors Ceramics $225,756 $209,849 $ 36,691 $ 34,066
Graphic Packaging 275,597 262,056 32,151 29,885
Golden Technologies 45,340 64,374 (29,290) (8,826)
Corporate --- --- (6,402) (5,677)
-------- -------- -------- --------
$546,693 $536,279 $ 33,150 $ 49,448
======== ======== ======== ========
COORS CERAMICS
Coors Ceramics reported record net sales of $79.3 million for the
third quarter of 1997, up $14.9 million, or 23.1 percent, from
1996 third quarter net sales of $64.4 million. Increased volume
from the petrochemical, semiconductor, automotive and
telecommunications industries were primarily responsible for the
improvement, offset somewhat by softness in the pulp and paper
industry. The acquisition of Tetrafluor, Inc. in August of 1997
also contributed to the increased sales. Operating income for
the 1997 third quarter increased $3.0 million to $12.5 million as
compared to the similar period of 1996. The improvement in
operating income was again primarily attributable to increased
volume from the petrochemical, semiconductor, automotive and
telecommunications industries, offset somewhat by softness in the
pulp and paper industry. Operating margins for the third quarter
grew from 14.7 percent in 1996 to 15.7 percent in 1997 as
operating efficiencies were realized.
During the first nine months of 1997, Coors Ceramics' net sales
increased $15.9 million, or 7.6 percent, to $225.8 million as
compared to 1996 similar period. Increased volume for the nine
month period from the automotive and telecommunications
industries, increased volume in the first half of the year from
the pulp and paper industry, the rebound of the semiconductor
industry in the third quarter of 1997, and the acquisition of
Tetrafluor, Inc. in August of 1997, all contributed to the
increase in sales. Operating income for the 1997 year-to-date
period increased $2.6 million, or 7.7 percent, to $36.7 million
compared to $34.1 million of the year-to-date period of 1996.
Operating margins remained consistent between the periods.
Coors Ceramics' management continues to focus on manufacturing
efficiencies, strategic acquisitions and broadening its materials
base to continue its upward momentum. Looking ahead to the end
of 1997, Coors Ceramics' level of success continues to depend
upon the strength of the U.S. and European economies, the rebound
of semiconductor processing and telecommunications markets and
effective capacity utilization.
GRAPHIC PACKAGING
Graphic Packaging reported record net sales of $92.5 million for
the third quarter of 1997, up $4.6 million, or 5.2 percent, from
1996 third quarter net sales of $87.9 million. Nearly all of
Graphic Packaging's flexible operations posted increased sales,
primarily related to improved volumes of confectionery and snack
food packaging. In Graphic Packaging's folding carton
operations, increases to the quick food service market were
mostly offset by a decline in tobacco industry sales. Third
quarter 1997 operating income was $13.0 million, an increase of
$1.9 million, or 16.8 percent, as compared to operating income
for the third quarter of 1996. Operating margins for the third
quarter of 1997 increased to 14.0 percent from operating margins
of 12.6 percent for the third quarter of 1996. The improved
operating performance was a result of increased plant utilization
at several of the flexible operations, controlled administrative
costs, and an improved product mix. Graphic Packaging reported
net sales of $275.6 million for the nine month period ended
September 30, 1997, an increase of $13.5 million, or 5.2 percent,
over the 1996 similar period. Operating income for the nine
month period ended September 30, 1997 improved $2.3 million to
$32.2 million. Year-to-date 1997 net sales and operating income
improvements came from additional volume in several markets
including tobacco, confectionery, bakery, snack food and
detergent. Offsetting the increase in operating income was a
second quarter charge of approximately $2.0 million related to
the sale of the Linearpak system and to severance for several
organizational changes.
In October of 1997, the Company announced its intention to
relocate the corporate offices of Graphic Packaging from Wayne,
Pennsylvania to Golden, Colorado. The Company expects the move
will reduce ongoing costs and improve the coordination of
management. The Company believes the move will be completed
during the first quarter of 1998; however, the company expects to
incur severance and relocation costs between $1.0 million and
$2.0 million in the fourth quarter of 1997.
Management expects Graphic Packaging's results for the remainder
of the year to remain solid, although the favorable product mix
and capacity utilization experienced in the third quarter of 1997
is not expected to continue at the same level on a regular basis.
In addition, Graphic Packaging results could be impacted
favorably or unfavorably as it continues to face the challenge of
obtaining significant sales volumes to fully utilize new
capabilities and capacity, increased competitive pressures, and
from changes in its ability to pass through to customers
increased material costs as quickly as in the past.
GOLDEN TECHNOLOGIES
Golden Technologies reported net sales for the third quarter of
1997 of $14.6 million compared to the $22.8 million reported in
the year earlier period. The operating loss for the third
quarter of 1997 was $20.3 million compared to the third quarter
of 1996 operating loss of $2.7 million. Reduced sales are the
result of exiting the high-fructose corn syrup business during
the first quarter of 1997, offset in part by the net sales of
Photocomm, Inc. The additional operating loss during the third
quarter of 1997 relates primarily to the asset impairment and
restructuring charge of $17.5 million related to the
biodegradable polymer project.
Net sales for the nine months ended September 30, 1997, were
$45.3 million compared to $64.4 million for 1996 similar period.
The additional sales due to the acquisition of Photocomm, Inc. in
November 1996 were more than offset by the exit of the high-
fructose corn syrup business during the 1997 first quarter.
Operating loss for the first nine months of 1997 was $29.3
million, compared to an operating loss of $8.8 million during the
1996 similar period. Asset impairment and restructuring charges
of $19.8 million taken in the first and third quarters of 1997
account for the majority of the additional loss, with additional
research and development costs in the biodegradable polymer
project accounting for the remaining increase in losses.
CORPORATE
Corporate expenses for the three months ended September 30, 1997
were $2.6 million, compared to $2.0 million for the 1996 similar
period. Corporate expenses for the nine months ended September
30, 1997 were $6.4 million, as compared to $5.7 million for the
1996 similar period. The increases in corporate expenses are a
result of increased staffing costs and increased costs related to
potential acquisitions which have not been capitalized.
Forward-Looking Statements
Some of the statements in this Form 10-Q Quarterly Report, as
well as statements by the Company in periodic press releases,
oral statements made by the Company's officials to analysts and
shareholders in the course of presentations about the Company and
conference calls following quarterly earnings releases,
constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Words or
phrases denoting the anticipated results of future events such as
"anticipate," "believe," "expects," "estimate," "will likely,"
"are expected to," "will continue," "focus on," "intend to,"
"project," and similar expressions that denote uncertainty are
intended to identify such forward-looking statements. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual
results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such factors include, among other things: (i)
general economic and business conditions; (ii) changes in
industries in which the Company does business, such as beverage,
telecommunications, automotive, semiconductor, pulp and paper,
and tobacco; (iii) the loss of major customers; (iv) the loss of
market share and increased competition in certain markets; (v)
industry shifts to alternative materials, such as replacement of
ceramics by plastics and competitors offering products with
characteristics similar to the Company's products; (vi) changes
in consumer buying habits; (vii) governmental regulation
including environmental laws; (viii) the ability to negotiate
favorable lease agreements; (ix) the ability to hire and retain
qualified personnel; and (x) other factors over which the Company
has little or no control.
These statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-K
for the year ended December 31, 1996. The accompanying financial
statements have not been examined by independent accountants in
accordance with generally accepted auditing standards, but in the
opinion of management of ACX Technologies, such financial
statements include all adjustments necessary to summarize fairly
the Company's financial position and results of operations. All
adjustments made to the interim financial statements presented
are of a normal recurring nature. The results of operations for
the third quarter and nine months ended September 30, 1997, may
not be indicative of results that may be expected for the year
ending December 31, 1997.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit
Number Document Description
3.1 Articles of Incorporation of Registrant.
(Incorporated by reference to Exhibit 3.1 to
Form 10 filed on October 6, 1992, file
No. 0-20704)
3.1A Articles of Amendment to Articles of
Incorporation of Registrant. (Incorporated by
reference to Exhibit 3.1A to Form 8 filed on
December 3, 1992, file No. 0-20704)
3.2 Bylaws of Registrant, as amended.
(Incorporated by reference to Exhibit 3.2 to
Form 10-Q filed on November 7, 1996, file
No. 0-20704)
4 Form of Stock Certificate of Common Stock.
(Incorporated by reference to Exhibit 4 to Form
10-K filed on March 7, 1996, file No. 0-20704)
27 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the quarter
ended September 30, 1997.
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.
Date: November 7, 1997 By /s/ Jed J. Burnham
-------------------------------
Jed J. Burnham
(Chief Financial Officer and
Treasurer)
Date: November 7, 1997 By /s/ Gail A. Constancio
-------------------------------
Gail A. Constancio
(Controller and Principal
Accounting Officer)
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