<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
------------------
For Quarterly Period Ended June 30, 1997
Commission File Number 0-21856
ABT BUILDING PRODUCTS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3684348
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
One Neenah Center, Neenah, Wisconsin 54956
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (920) 751-8611
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 the close of business on August 14, 1997, the registrant had
outstanding 10,546,660 shares of Common Stock.
<PAGE>
ABT BUILDING PRODUCTS CORPORATION and Subsidiaries
INDEX
Part I: Financial Statements Page Number
- ---------------------------- -----------
Unaudited Balance Sheets as of December 31, 1996
and June 30, 1997 3
Unaudited Statements of Income for the three
months and six months ended June 30, 1996
and June 30, 1997 4
Unaudited Statements of Cash Flows for the six
months ended June 30, 1996 and June 30, 1997 5
Condensed Notes to Unaudited Financial
Statements 6 - 14
Management's Discussion and Analysis of
Financial Condition and Results of Operations 15 - 20
Part II: Other Information 21
- --------------------------
Signature Page 22
<PAGE>
ABT Building Products Corporation and Subsidiaries
Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
--------- ----------
(unaudited)
Assets
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 24 $ 1,486
Accounts receivable, less
allowances of $5,030 and
$5,406, respectively 31,278 47,304
Inventories 47,237 56,175
Prepaid expenses 4,468 7,200
Deferred tax assets 765 559
--------- ---------
Total Current Assets 83,772 112,724
--------- ---------
PROPERTY, PLANT AND EQUIPMENT
Land 2,968 2,968
Buildings and improvements 28,700 28,895
Machinery and equipment 108,975 109,378
Furniture and fixtures 3,947 4,075
Construction in progress 45,525 75,919
--------- ---------
190,115 221,235
Less-Accumulated depreciation (25,646) (37,549)
--------- ---------
Net property, plant and equipment 164,469 183,686
OTHER ASSETS, Net 2,537 5,361
GOODWILL, Net 9,486 7,990
--------- ---------
Total Assets $ 260,264 $ 309,761
========= =========
Liabilities & Stockholders' Equity
CURRENT LIABILITIES
Current Maturities of
Long-Term Debt $ 9,380 $ 12,504
Accounts Payable 15,432 18,230
Accrued Expenses 16,183 21,640
--------- ---------
Total Current Liabilities 40,995 52,374
LONG-TERM DEBT 90,691 124,922
OTHER LONG TERM LIABILITIES 6,957 7,188
DEFERRED INCOME TAXES 11,680 8,353
STOCKHOLDERS' EQUITY
Common Stock 122 122
Additional paid-in capital 60,511 60,362
Cumulative translation adjustment (364) (1,125)
Retained earnings 76,637 83,940
Less: Treasury Shares (26,965) (26,965)
--------- ---------
Total Stockholders' Equity 109,941 116,324
--------- ---------
Total Liability and
Stockholders' Equity $ 260,264 $ 309,761
========= =========
</TABLE>
See accompanying notes to the financial statements
3
<PAGE>
ABT Building Products Corporation and Subsidiaries
Statements of Income (unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1997 1996 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET SALES $ 82,549 $ 88,396 $ 156,911 $ 165,419
COST OF SALES 58,080 61,009 111,380 113,583
--------- --------- --------- ---------
Gross Profit 24,469 27,387 45,531 51,836
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 11,892 13,185 22,074 26,278
RESTRUCTURING CHARGE -- 10,397 -- 10,397
--------- --------- --------- ---------
Operating income 12,577 3,805 23,457 15,161
OTHER INCOME (EXPENSE) (1,850) (1,936) (3,724) (3,267)
--------- --------- --------- ---------
Income before income
taxes 10,727 1,869 19,733 11,894
PROVISION FOR INCOME TAXES 4,175 720 7,700 4,591
--------- --------- --------- ---------
Net income $ 6,552 $ 1,149 $ 12,033 $ 7,303
========= ========= ========= =========
INCOME PER COMMON SHARE $ 0.57 $ 0.10 $ 1.05 $ 0.62
========= ========= ========= =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 11,547 11,688 11,440 11,695
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statement
4
<PAGE>
ABT Building Products Corporation and Subsidiaries
Statement of Cash Flows (unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1997
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net Income $ 12,033 $ 7,303
Adjustments to reconcile net income to net
cash provided by (used in)operating
activities -
Writedown of assets due to restructuring 0 7,131
Depreciation and amortization 6,216 7,455
Deferred income taxes 1,586 (2,521)
Cumulative translation adjustment (261) (761)
Changes in certain assets and liabilities -
Accounts receivable (17,537) (16,026)
Inventories (571) (8,938)
Other assets (1,460) (3,187)
Accounts payable and accrued expenses 7,411 8,486
--------- ---------
Net cash provided by (used in)
operating activities 7,417 (1,058)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (13,086) (34,676)
--------- ---------
Net cash used in investing activities (13,086) (34,676)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt (19,076) (134,506)
Proceeds from line of credit 25,900 171,506
Exercise of stock options (52) (159)
Payments for the purchase of treasury shares (1,701) 0
--------- ---------
Net cash provided by financing activities 5,071 37,196
--------- ---------
Net increase (decrease) in cash (598) 1,462
Cash and Cash equivalents, beginning of period 2,317 24
--------- ---------
Cash and Cash equivalents, end of period $ 1,719 $ 1,486
========= =========
</TABLE>
5
<PAGE>
ABT BUILDING PRODUCTS CORPORATION AND SUBSIDIARIES
Condensed Notes to Unaudited Financial Statements
(1) GENERAL
The accompanying unaudited interim consolidated financial statements have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the disclosures are
adequate to make the information not misleading. These financial statements
should be read in conjunction with the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1996. In the opinion of management, these statements contain all
adjustments, consisting of only normal recurring adjustments, necessary to
present fairly the financial position of the Company (as defined below). Results
on the interim basis are not necessarily indicative of results which may be
expected for the full year.
(2) BASIS OF PRESENTATION
The consolidated balance sheets at December 31, 1996, and June 30, 1997,
and the consolidated statements of operations and cash flows for the six months
ended June 30, 1996 and 1997, include the accounts of ABT BUILDING PRODUCTS
CORPORATION, a Delaware corporation ("ABT"), and its wholly owned subsidiaries
ABTCO, Inc. ("ABTCO"), KenTech Plastics, Inc. ("KenTech") and ABT Canada,
Limited ("ABT Canada") (collectively referred to as the "Company").
(3) INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined
using the weighted average cost method. Inventory costs include material, labor,
and manufacturing overhead.
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
----------- --------
<S> <C> <C>
Finished products and work in
process $30,330 $38,689
Raw materials 8,954 9,071
Operating parts and supplies 7,953 8,415
------- -------
$47,237 $56,175
======= =======
</TABLE>
6
<PAGE>
ABT BUILDING PRODUCTS CORPORATION AND SUBSIDIARIES
Condensed Notes to Unaudited Financial Statements
(4) LONG-TERM DEBT
Long-term debt as of December 31, 1996, and June 30, 1997, consisted of the
following (in thousands):
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
--------- ---------
<S> <C> <C>
Total debt---
Revolving line of credit $ 50,065 $ 85,850
Term loan 50,000 46,875
Mississippi Business Finance Corp. Bonds:
Series 1997A -- 1,000
Series 1997B -- 3,697
Capital lease obligations 6 4
--------- ---------
100,071 137,426
Less---current maturities (9,380) (12,504)
--------- ---------
Total long-term debt $ 90,691 $ 124,922
========= =========
</TABLE>
On April 1, 1997 the Company entered into a loan agreement with the
Mississippi Business Finance Corporation for the issuance of $1 million Variable
Rate Demand Revenue Bonds (Series 1997A) and $16.5 million Taxable Variable Rate
Demand Revenue Bonds (Series 1997B) to finance the acquisition and construction
of a vinyl siding manufacturing facility in Holly Springs, Mississippi. The
bonds bear interest rates determined weekly by the remarketing agent. The
interest rates at June 30, 1997 were 4.35% and 5.65%, respectively. The bonds
are backed by Irrevocable Letters of Credit issued under the Company's Revolving
Credit Agreement. The Series 1997A and Series 1997B bonds have a maturity date
of April 1, 2022. The amounts included in total debt reflect drawings against
the proceeds of the issued amount of the bonds.
(5) STOCKHOLDERS' EQUITY
Stockholders' Equity as of December 31, 1996, and June 30, 1997, consisted
of the following (in thousands):
<TABLE>
<CAPTION>
Additional Cumulative
Common Paid-In Translation Retained Treasury
Stock Capital Adjustment Earnings Shares
----- ------- ---------- -------- ------
<S> <C> <C> <C> <C> <C>
December 31, 1996 $ 122 $ 60,511 $ (364) $ 76,637 $(26,965)
Cumulative translation adjustment (761)
Exercise of stock options (159)
Net income through June 30, 1997 7,303
-------- -------- -------- -------- --------
June 30, 1997 $ 122 $ 60,352 $ (1,125) $ 83,940 $(26,965)
======== ======== ======== ======== ========
</TABLE>
7
<PAGE>
ABT BUILDING PRODUCTS CORPORATION AND SUBSIDIARIES
Condensed Notes to Unaudited Financial Statements
(5) STOCKHOLDERS' EQUITY (CONTINUED)
Commencing in the third quarter of 1994, the Board of Directors authorized
the repurchase of up to 2,200,000 shares of the Company's Common Stock in open
market transactions. At June 30, 1997, the Company had repurchased 1,685,000
shares for a total cost of $26,964,670 (net of shares reissued). The cost to
repurchase the treasury shares has been recorded as a reduction of stockholders'
equity.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards ("SFAS") No. 128, Earnings per Share, and is effective for
financial statements for both interim and annual periods ended after December
15, 1997. SFAS No. 129, Disclosure of Information about Capital Structure, has
been issued and is effective for financial statements for annual periods ended
after December 15, 1997. The expected impact of the adoption of these standards
will not be material.
(6) COMMITMENTS AND CONTINGENCIES
Under the terms of the asset purchase agreements between the Company and
the predecessor owners of the operations conducted by ABTco and ABT Canada, such
entities agreed to indemnify the Company for certain liabilities or obligations
arising on or prior to the change in ownership, including liabilities related to
environmental, product liability and litigation matters. In connection with such
transactions, as well as the acquisition of KenTech, the Company assumed various
liabilities and obligations, including obligations under product warranties with
respect to products manufactured prior to the change in ownership.
Litigation
On August 30, 1995, the Company completed negotiations with Michigan
environmental authorities regarding a consent judgment providing for an odor
emissions abatement program at its Alpena, Michigan facility. The program
provides for phased installation of controls to effect a staged reduction of the
facility's emissions of odors into the air. It is estimated that capital
expenditures of approximately $6 million to $12 million will be required in
order to attain compliance with the program. It is the Company's position that
costs incurred in complying with the consent judgment will be borne in whole or
in part by Abitibi-Price Corporation ("APC"), as the prior owner of the Alpena
facility, and APC's corporate parent Abitibi-Price, Inc. ("API"). Accordingly,
on November 27, 1995, the Company and ABTco commenced an action against APC and
API in the Circuit Court for the County of Oakland, Michigan, (ABT
---
Building Products Corporation and ABTco, Inc. v. Abitibi-Price Corporation and
- ------------------------------------------------------------------------------
Abitibi-Price, Inc., Case No. 95-508819-CK), seeking to recover damages incurred
- -------------------
in connection with the remediation, correction and control of odor emissions at
the Alpena facility.
The complaint initially asserted claims for break of contract,
fraudulent non-disclosure and fraudulent misrepresentation. The Company and
ABTco determined not to pursue the claims for fraudulent non-disclosure and
fraudulent misrepresentation, and a stipulated order to that effect was filed
on May 9, 1996. The Company and ABTco proceeded with their claims for breach of
contract. Discovery was completed. The Company and ABTco moved for summary
judgment on liability only; APC and API moved for summary judgment dismissing
the remaining claims in the complaint. By opinion and order dated March 28, 1997
(the "Order"), the Circuit Court for the County of Oakland, Michigan, granted
defendants' motion for summary judgment, and denied plaintiffs' motion for
summary judgment,
8
<PAGE>
on plaintiffs' claim for breach of contract, thereby dismissing the case. On
April 15, 1997, the Company and ABTco filed a claim of appeal from the Order in
the Court of Appeals for the State of Michigan. On May 5, 1997, defendants
APC and API filed a cross-appeal from the Order in the Court of Appeals for the
State of Michigan. On August 4, 1997, the Company and ABTco filed their opening
brief in the appeal, and APC and API filed their opening brief in their
cross-appeal.
The Company and ABTco have been named as defendants in a class action
and three separate putative class actions arising from hardboard siding
manufactured, distributed, or sold by them or by APC or API:
(1) Fyola et al. v. ABT Building Products Corporation, ABTco. Inc. and
Abitibj-Price Corporation, Docket No. 95-12854, Court of Common Pleas of
Allegheny County, Pennsylvania (the "Fyola Action").
On August 8, 1995, plaintiffs Glenn Fyola, Patricia Fyola, Joyce
D'Antonio, and Kenneth Hyre filed this action in the Court of Common Pleas of
Allegheny County, Pennsylvania against the Company. Plaintiffs alleged that
they were suing on behalf of themselves and a putative class composed of
residential homeowners who reside in Pennsylvania and whose homes have or had
for their exterior siding a hardboard product which was allegedly manufactured,
distributed, or sold by the Company. The original complaint alleged that the
exterior siding on plaintiffs' homes had prematurely rotted, warped, buckled,
and deteriorated. Plaintiffs asserted purported claims for breach of implied
warranty of merchantability, breach of implied warranty of fitness, breach of
express warranty, violation of the Pennsylvania Unfair Trade Practice and
Consumer Protection Law, and deceit by concealment. Plaintiffs, on behalf of
themselves and the putative class, sought compensatory and punitive damages in
unspecified amounts, including economic damages, treble damages under the
Pennsylvania Unfair Trade Practice and Consumer Protection Law, and an award of
attorneys' fees.
9
<PAGE>
The Company filed an "Answer and New Matter" on October, 31, 1995, that
denied all material allegations of the complaint and asserted affirmative
defenses.
On February 5, 1996, plaintiffs filed an amended complaint adding ABTco
and APC as defendants. The amended complaint was otherwise substantially similar
to the original complaint.
The action was removed to the United States District Court for the
Western District of Pennsylvania. By order dated November 25, 1996, that Court
remanded the action to the Court of Common Pleas for Allegheny County.
In response to the amended complaint, defendants filed an "Answer and
New Matter" dated December 27, 1996, that denies all material allegations of the
amended complaint and asserts affirmative defenses. On March 25, 1997,
defendants filed a motion seeking a stay of the action or, in the alternative,
an order limiting discovery to certification-related issues until the court
rules upon plaintiffs' motion for class certification.
On May 30, 1997, the Court of Common Pleas of Allegheny County entered
an order staying this action pending a decision by the United States District
Court for the Southern District of Alabama as to whether the conditional order
of certification already entered in the Foster Action (which is discussed below)
------
should be upheld, or whether the classes and subclasses already conditionally
certified in that action should be decertified. The action has not been
certified as a class action.
The Company and ABTco intend to defend the action vigorously.
(2) Foster et al. v. ABTco, Inc., ABT Building Products Corporation,
----------------------------------------------------------------
Abitibi-Price, Inc. and Abitibi-Price Corporation, Docket No. 96-0069-AH-M,
- -------------------------------------------------
United States District Court for the Southern District of Alabama (the "Foster
------
Action").
On December 21, 1995, plaintiffs Thomas and Linda Foster brought this
action in the Circuit Court of Choctaw County, Alabama, on behalf of themselves
and a class generally composed of all individuals and entities (i) that own or
owned property in the United States on which hardboard siding manufactured,
distributed, or
10
<PAGE>
sold by the Company, ABTco, API, or APC has been installed and (ii) that have
already suffered (or will suffer within the warranty period) alleged damage
because, according to plaintiffs, such siding prematurely rots, buckles, swells,
cracks or otherwise deteriorates. Plaintiffs filed an amended complaint on July
10, 1996.
Plaintiffs and the putative class are seeking compensatory damages and
an award of attorneys' fees. The complaint alleges that the "amount in
controversy is in the millions of dollars classwide and is typically several
thousand dollars for each plaintiff and individual class member."
On December 22, 1995, this action was conditionally certified as a class
action by ex parte order.
On January 23, 1996, defendants removed the action to the United States
District Court for the Southern District of Alabama. By order dated September
10, 1996, that court denied plaintiffs' motion to remand the action to the
Circuit Court of Choctaw County Alabama. On October 31, 1996, defendants filed
an answer that denies all material allegations of the amended complaint and
asserts affirmative defenses.
On March 19, 1997, the court entered an order establishing a schedule
for discovery concerning issues that are relevant to class certification. After
certification-related discovery is completed, the conditional order of
certification already entered in the action may be challenged.
The Company and ABTco intend to defend the action vigorously.
On May 29, 1997, API and APC filed cross-claims against the Company and
ABTco for breach of contract and common-law indemnification. Those claims allege
in substance, among other things, that to the extent API and APC may be found
liable on certain claims arising from alleged defects in exterior hardboard
siding products manufactured by them or by the Company, or ABTco, API and APC
are entitled to reimbursement of some or all of their losses form the Company
and ABTco. The claims also seek attorneys' fees, costs and other expenses. The
Company intends to defend these claims vigorously.
11
<PAGE>
On May 29, 1997, the Company and ABTco filed cross-claims against API
and APC for indemnification and contribution. On June 18, 1997, the Company and
ABTco filed amended cross-claims against API and APC for indemnification and
contribution. Those claims allege in substance, among other things, that to the
extent the Company and ABTco may be found liable on certain claims arising from
alleged defects in exterior hardboard siding products manufactured by API or
APC, the Company and ABTco are entitled to reimbursement of some or all of their
losses from API and APC. The claims also seek attorneys' fees, costs and other
expenses.
(3) Dunn et al. v. ABTco, Inc., ABT Building Products Corporation,
-------------------------------------------------------------
Abitibi-Price, Inc. and Abitibi-Price Corporation. Docket No. 96-CVS7690,
- -------------------------------------------------
Superior Court Forsyth County, North Carolina (the "Dunn Action").
----
On December 27, 1996, plaintiffs William Dunn and Paul and Teresa
Sullivan brought this action on behalf of themselves and a putative class
generally composed of all individuals and entities (i) that own or owned
property in the United States on which hardboard siding manufactured,
distributed, or sold by the Company, ABTco, API or APC has been installed and
(ii) that have already suffered (or will suffer within the warranty period)
alleged damage because, according to plaintiffs, such siding prematurely rots,
buckles, swells, cracks or otherwise deteriorates. Plaintiffs and the putative
class are seeking compensatory damages and an award of attorneys' fees. The
complaint alleges that the "aggregate amount in controversy is in the millions
of dollars classwide." This action has not been certified as a class action. On
January 28, 1997, all defendants moved to abate or stay the action. That motion
was argued on February 14, 1997. By order signed on February 18, 1997, the court
denied the motion to abate but granted the motion to stay.
The Company and ABTco intend to defend the action vigorously.
(4) Ezzell et al. v. ABTco, Inc., ABT Building Products Corporation.
---------------------------------------------------------------
Abitibi-Price, Inc. and Abitibi-Price Corporation, No. 97-CVS-167. Superior
- -------------------------------------------------
Court of Onslow County, North Carolina (the "Ezzell Action").
------
12
<PAGE>
On January 21, 1997, plaintiffs John and Rosemary Ezzell filed this
action on behalf of themselves and a putative class generally composed of all
individuals and entities (i) that own or owned property in the United States on
which hardboard siding manufactured, distributed, or sold by the Company,
ABTco, API, or APC has been installed and (ii) that have already suffered (or
will suffer within the warranty period) alleged damage because, according to
plaintiffs, such siding prematurely rots, buckles, discolors, deteriorates, and
otherwise does not perform as expressly represented or warranted, and/or would
not perform in accordance with the reasonable expectations of class members and
other consumers that such siding is durable, suitable and proper to be used on
personal residences or other properties. The complaint alleges that "the
aggregate amount in controversy is typically several thousand dollars for each
plaintiff and individual class member." On March 27, 1997, the Company and ABTco
served an answer that denies all material allegations of the complaint and
asserts affirmative defenses. The action has not been certified as a class
action.
On May 23, 1997, all defendants moved to abate or stay the action. That
motion was argued on July 7, 1997. At the conclusion of argument, the court
denied defendants' motion to abate, and granted defendants' motion to stay.
The Company and ABTco intend to defend the action vigorously.
Abitibj-Price Corporation and Abitibj-Price Sales Corporation v. ABT
--------------------------------------------------------------------
Building Products Corporation and ABTco, Inc, Index No. 97-09771,
---------------------------------------------
Supreme Court of the State of New York, Westchester County (the
"Abitibj Action").
On June 16, 1997, APC and Abitibj-Price Sales Corporation ("APS")
brought an action against the Company and ABTco in the Supreme Court of the
State of New York for the County of Westchester.
The complaint states that the agreement dated September 25, 1992 (the
"Agreement"), the Company and APC provided for the sales, assignment, and
transfer
13
<PAGE>
by APC to the Company of the assets of a business engaged in the manufacture,
sale, and distribution of various building products, including exterior
hardboard siding (the "Business"). In their complaint, APC and APS allege, among
other things, that "ABTco executed an Assumption Agreement, dated as of October
20, 1992, whereby, among other things, ABTco assumed and agreed to pay certain
liabilities and obligations of APC, including, without limitation, certain
warranty liabilities and obligations on products manufactured or sold by APC."
The complaint also alleges that under the Agreement, the Company is responsible
for the following "Assumed Liability":
"liabilities and obligations under warranties with respect to products
of the Business manufactured or sold prior to the Closing Date to the
extent such liabilities and obligations do not constitute an Excluded
Liability."
The complaint alleges that "Excluded Liabilities" under the Agreement
include:
"one-half of the dollar amount paid pursuant to documented claims for
warranty service under warranties for the repair or replacement of
products of the Business (exclusive of credits or price adjustments
granted without the Seller's consent) sold prior to the Closing Date
or held as finished goods inventory on the Closing Date in excess of
$100,000 during any calendar year (or in excess of $25,000 for the
period from the Closing Date through December 31, 1992); provided that
(x) Seller shall retain full liability for claims with respect to
products produced by Seller's former facility in Sturgeon Falls,
Canada regardless of dollar amount, any (y) Seller shall retain all
liability in excess of $2,500 with respect to each individual claim in
excess of $5,000."
The complaint further alleges that in the Agreement, the Company
indemnified APC against losses arising from "Assumed Liabilities," including
allegedly assumed "warranty liabilities," as well as attorneys' fees, costs and
other expenses associated with defending or compromising "warranty claims."
14
<PAGE>
ABT BUILDING PRODUCTS CORPORATION AND SUBSIDIARIES
Condensed Notes to Unaudited Financial Statements
(6) COMMITMENTS AND CONTINGENCIES (CONTINUED)
According to the complaint, during the period from October 20,
1992, to 1996, the Company, ABTco, APC, APS allocated "warranty
liabilities" under the Assumption Agreement in the following manner:
(a) All warranty claims pertaining to products of the
Business sold or manufactured prior to the Closing Date were
analyzed, evaluated, administered and resolved by [the Company and
ABTco], and an accounting to [APC and APS] was made on a quarterly
basis;
(b) The total amount of settled warranty claims
pertaining to product sold or manufactured prior to the Closing
Date was offset by a $100,000 per calendar year "deductible," for
which [the Company and ABTco] [were] solely responsible;
(c) The remaining liability for each settled warranty
claim up to $5,000 was allocated 50% to [APC and APS] and 50% to [the
Company and ABTco];
(d) With respect to each settled warranty claim over
$5,000, for the first $2,500 was allocated to [the Company and
ABTco], and the remainder was allocated to [APC and APS]; and
(e) [The Company and ABTco] paid all attorneys fees, costs
and expenses related to the claims.
According to the complaint, during this period the Company and ABTco
"assumed responsibility for administering the foregoing warranty claims
program" with respect to, among other products, products of the Business sold
before October 20, 1992.
The complaint alleges that in 1996, the Company and ABTco improperly
departed from the alleged course of dealing that had previously been operative.
According to the complaint, as a result the Company and ABTco refused, upon
specific request, to pay the share that they were allegedly required by
contract to pay of settlements in at least three litigations "for breach of
warranty" involving hardboard siding products manufactured by the Business
before October 20, 1992. According to the complaint, the Company and ABTco also
improperly refused to defend two of those actions.
Based on these allegations, APC and APS assert claims against the
Company and ABTco for breach of the Agreement and unjust enrichment. APC and
APS seek to recover damages in an amount to be determined by the Court, which
amount is stated to be not less than $150,000. The damages sought include, among
other things, settlement amounts and attorneys' fees, costs and expenses arising
from the three litigations referred to in the preceding paragraph, together
with interest and attorneys' fees, costs and expenses in the action brought by
APC and APS.
On July 28, 1997, the Company and ABTco moved to dismiss or stay this
action based on their contentions that the cross-claims in the Foster action
------
constitute another action pending between the same parties for the same cause of
action; that, in any event, this action and the Foster Action involve
------
overlapping issues; and that Westchester County is not a convenient forum. That
motion has not yet been fully briefed or decided.
In addition, the Company is a party to various other legal proceedings
arising in the ordinary course of business, none of which, in management's
opinion, are expected to have a material adverse effect on the Company's
operating results or financial condition.
(7) SUPPLEMENTAL CASH FLOW DISCLOSURE
In addition to the information provided in the statements of cash flows,
the following is a supplemental disclosure of cash flow information (in
thousands):
<TABLE>
<CAPTION>
For Six For Six
Months Ended Months Ended
June 30, June 30,
1996 1997
---- ----
<S> <C> <C>
Cash paid during period for --
Interest ................................. $2,279 $4,027
Income taxes ............................. 5,387 6,782
</TABLE>
15
<PAGE>
ABT BUILDING PRODUCTS CORPORATION AND SUBSIDIARIES
Condensed Notes to Unaudited Financial Statements
(8) RESTRUCTURING CHARGE
On July 7, 1997 the Company announced that it was restructuring its Plastic
Products Group. The restructuring program was implemented to phase out the
Company's Plastics industrial business and to allow the Company to focus on
specialty building products. Accordingly, the Company recognized a $10.4 million
charge during the period ended June 30, 1997. $8.0 million of the restructuring
charge consisted of a write-down of certain machinery and equipment, inventory
and goodwill to net realizable values, the remaining $2.4 million consisted of
severance payments and outstanding lease obligations related to the closing of
certain leased facilities. The impact on earnings per share for the six month
period ended June 30, 1997 amounted to $0.55.
16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND
---
RESULTS OF OPERATIONS
---------------------
Quarter Ended June 30, 1997 compared to Quarter Ended June 30, 1996
- -------------------------------------------------------------------
NET SALES
- ---------
Net sales increased by $5.9 million (7.1%) from $82.5 million for the
quarter ended June 30, 1996 to $88.4 million in the 1997 quarter. This increase
is attributable to increased sales in Interior Hardboard and Plastic Products,
as well as, the introduction of a new product line, Fiber Cement Siding.
Exterior Hardboard Siding sales were relatively flat when compared to the same
period last year.
The increase in Plastic products sales of $4.4 million was primarily due to
increased Vinyl siding sales offset by lower Plastic moulding and industrial
sales. Sales of $33.2 million for the three months ended June 30 ,1997 were 15%
greater than the same period last year. The average selling prices for all
product lines were lower than the same period last year primarily due to sales
mix and increasing competition in the Vinyl siding market. Unit volume shipments
for plastic shutters and vinyl siding were up 26% and 73% respectively, when
compared to the same period last year; however, shipments were below
expectations. Plastic moulding shipments were off 8% over the same period last
year.
The increase in Interior Hardboard sales of $1.0 million was primarily the
result of new product introductions and strong demand for the Company's doorskin
products. Sales of $24.8 million for the three months ended June 30 ,1997 were
4% greater than the same period last year. Unit volume shipments were 3% ahead
of the same period last year and the average selling price decreased 3% when
compared with the same period last year. The lower selling price was primarily
due to product mix.
Exterior Hardboard Siding sales of $30.0 million for the three months ended
June 30 ,1997 was primarily flat when compared to the same period last year. The
average selling price increased 9% over the same period last year. The increase
in selling price was primarily due to price increases implemented during the
1996 year. Shipments of Exterior Hardboard Siding decreased 8% for the three
months ended June 30, 1997 when compared to the same period last year. The sales
volume decline was principally due to stronger demand for hardboard siding
during the second quarter of 1996.
The Company introduced a new product line, Fiber Cement Siding late in the
second quarter. $0.4 million of Fiber Cement Siding was sold during the later
part of the three months ended June 30, 1997.
GROSS PROFIT
- ------------
Gross profit increased by $2.9 million (11.9%) from $24.5 million for the
three months ended June 30, 1996 to $27.4 million in the 1997 quarter. Selling
price increases implemented on Exterior Hardboard Siding during 1996, strong
demand for the Interior Hardboard doorskin product line and volume increases in
the vinyl siding product line were the principal contributors to the increase in
gross profit. These increases were partially offset by higher thermoplastic
resin costs and start up costs related to the introduction of Fiber Cement
Siding. Gross profit as a percentage of net sales increased from 29.6% for the
three months ended June 30, 1996 to 31.0% for the 1997 quarter primarily due to
price increases implemented during 1996, strong demand for the doorskin product
line and volume increases in the vinyl siding product line partially offset by
start up costs related to the introduction of Fiber Cement Siding.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
- --------------------------------------------
Selling, general and administrative expenses increased by $1.3 million
(10.9%) from $11.9 million for the three months ended June 30, 1996 to $13.2
million in the 1997 quarter. Selling, general and administrative expenses
increased $0.2 million due to increased legal fees incurred as a result of
certain litigation (see Certain Litigation below ), with the balance of the
increase primarily due to increases in salaries and facility expense related to
the development of the Company's distribution centers in Holly Springs, MS. and
Acton, Ontario. Selling, general and administrative costs as a percentage of net
sales increased from 14.4% for the three months ended June 30, 1996 to 14.9% for
the 1997 quarter. The higher cost as a percentage of net sales is due to lower
than expected sales in the Plastics product lines, the increase in legal fees
and expenses related to the distribution centers as discussed above.
17
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND
---
RESULTS OF OPERATIONS
---------------------
Quarter Ended June 30, 1997 Compared to Quarter Ended June 30, 1996 (Continued)
- -------------------------------------------------------------------------------
RESTRUCTURING CHARGE
- --------------------
On July 7, 1997 the Company announced that it was restructuring its Plastic
Products Group. The restructuring program was implemented to phase out the
Company's Plastics industrial business and to allow the Company to focus on
specialty building products. Accordingly, the Company recognized a $10.4 million
charge during the period ended June 30, 1997. $8.0 million of the restructuring
charge consisted of a write-down of certain machinery and equipment, inventory
and goodwill to net realizable values, the remaining $2.4 million consisted of
severance payments and outstanding lease obligations related to the closing of
certain leased facilities. The impact on earnings per share for the six month
period ended June 30, 1997 amounted to $0.55.
OPERATING INCOME
- ----------------
Operating Income decreased by $8.8 million (69.8%) from $12.6 million for
the three months ended June 30, 1996 to $3.8 million for the 1997 quarter.
Excluding the restructuring charge (discussed above) operating income increased
$1.6 million (12.9%). The increase is primarily due to stronger doorskin sales
and the impact of Exterior Hardboard Siding price increases implemented during
1996.
OTHER INCOME (EXPENSE)
- ----------------------
Interest expense increased $0.1 million from $1.9 million for the three
months ended June 30,1996 to $2.0 million (net of $0.8 million of capitalized
interest) for the 1997 quarter. Higher outstanding indebtedness was partially
offset by a slight decline in the Company's weighted average interest rate on
outstanding borrowings during the three months ended June 30, 1997 as compared
to the 1996 quarter.
NET INCOME
- ----------
Net Income decreased by $5.4 million (82.5%) from $6.5 million for the
three months ended June 30, 1996 to $1.1 million for the 1997 quarter. Excluding
the restructuring charge (discussed above) net income increased $1.0 million
(15.1%). The increase is attributable to the factors discussed above.
Six Months Ended June 30,1997 compared to Six Months Ended June 30, 1996
- ------------------------------------------------------------------------
NET SALES
- ---------
Net sales increased by $8.5 million (5.4%) from $156.9 million for the six
months ended June 30, 1996 to $165.4 million for the same period in 1997. This
increase is attributable to increased sales in all of the Company's product
lines, as well as the introduction of a new product line, Fiber Cement Siding.
The increase in Exterior Hardboard Siding sales of $2.9 million was
primarily the result of price increases implemented during 1996. Sales of $60.9
million for the six months ended June 30, 1997 were 5% greater than the same
period last year. The average selling price increased 12% over the same period
last year. Shipments of Exterior Hardboard Siding decreased 7% for the six
months ended June 30, 1997 when compared to the same period last year. The sales
volume decline was principally due to a strong customer demand for hardboard
siding resulting in a large inventory reduction during the first half of 1996.
The increase in Interior Hardboard sales of $3.3 million was primarily the
result of new product introductions and strong demand for the Company's doorskin
products. Sales of $49.1 million for the six months ended June 30, 1997 were 7%
greater than the same period last year. Unit volume shipments were 7% ahead of
the same period last year and the average selling price increased 3% when
compared with the same period last year.
The increase in Plastic sales of $1.9 million was primarily due to
increased vinyl siding sales offset by lower plastic moulding and industrial
sales. Sales of $55.0 million for the six months ended June 30, 1997 were 4%
greater than the same period last year. The average selling prices for all
product lines were lower than the same period last year primarily due to sales
mix and increasing competition in the vinyl siding market. Unit volume shipments
for plastic shutters and vinyl siding were up 2% and 51%, respectively, when
compared to the same period last year; however, shipments were below
expectations. Plastic moulding shipments were off 6% when compared to
the same period last year.
18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND
---
RESULTS OF OPERATIONS
---------------------
Six Months Ended June 30,1997 compared to Six Months Ended June 30, 1996
- ------------------------------------------------------------------------
(Continued)
- -----------
GROSS PROFIT
- ------------
Gross profit increased by $6.3 million (13.8%) from $45.5 million for the
six months ended June 30, 1996 to $51.8 million for the same period in 1997.
Selling price increases implemented on Exterior Hardboard Siding during 1996,
strong demand for the Interior Hardboard doorskin product line and volume
increases in the vinyl siding product line were the principal contributors to
the increase in gross profit. These increases were partially offset by higher
thermoplastic resin costs. Gross profit as a percentage of net sales increased
from 29.0% for the period ended June 30, 1996 to 31.3% for the 1997 period
primarily due to price increases implemented during 1997, strong demand for the
doorskin product line and volume increases in the vinyl siding product line
partially offset by start up costs related to the introduction of Fiber Cement
Siding.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
- --------------------------------------------
Selling, general and administrative expenses increased by $4.2 million (19.0%)
from $22.1 million for the six months ended June 30, 1996 to $26.3 million for
the 1997 period. Selling, general and administrative expenses increased $0.9
million as a result of an increase in advertising and promotional expenditures,
$0.4 million of the increase represents legal fees incurred as a result of
certain litigation (see Certain Litigation below ), with the balance of the
increase primarily due to increases in salaries and facility expense related to
the development of the Company's distribution centers in Holly Springs, MS. and
Acton, Ontario. Selling, general and administrative costs as a percentage of net
sales increased from 14.1% for the six months ended June 30, 1996 to 15.9% for
the 1997 period. The higher cost as a percentage of net sales is due to lower
than expected sales in the Plastics product lines that were impacted by severe
weather in the mid-western states and the increase in legal fees as discussed
above.
RESTRUCTURING CHARGE
- --------------------
On July 7, 1997 the Company announced that it was restructuring its Plastic
Products Group. The restructuring program was implemented to phase out the
Company's Plastics industrial business and to allow the Company to focus on
specialty building products. Accordingly, the Company recognized a $10.4 million
charge during the period ended June 30, 1997. $8.0 million of the restructuring
charge consisted of a write-down of certain machinery and equipment, inventory
and goodwill to net realizable values, the remaining $2.4 million consisted of
severance payments and outstanding lease obligations related to the closing of
certain leased facilities. The impact on earnings per share for the six month
period ended June 30, 1997 amounted to $0.55.
OPERATING INCOME
- ----------------
Operating Income decreased by $8.3 million (35.4%) from $23.5 million for
the six months ended June 30, 1996 to $15.2 million for the 1997 period.
Excluding the restructuring charge (discussed previously) operating income
increased by $2.1 million (9.0%) over the same period last year. The improvement
is primarily due to stronger doorskin sales and the impact of Exterior Hardboard
Siding price increases implemented during 1996.
OTHER INCOME (EXPENSE)
- ----------------------
Interest expense decreased $0.5 million from $3.7 million for the six
months ended June 30,1996 to $3.2 million (net of $1.6 million of capitalized
interest) for the 1997 period. Higher outstanding indebtedness was partially
offset by a slight decline in the Company's weighted average interest rate on
outstanding borrowings during the six months ended June 30, 1997 as compared to
the 1996 period.
NET INCOME
- ----------
Net Income decreased by $4.7million (64.8%) from $12.0 million for the six
months ended June 30, 1996 to $7.3 million for the 1997 period. Excluding the
restructuring charge (discussed above) net income increased $1.7 million
(13.4%). The increase is attributable to the factors discussed above.
19
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND
---
RESULTS OF OPERATIONS
---------------------
SIGNIFICANT BUSINESS TRENDS
- ---------------------------
Management believes that the level of housing starts and expenditures for
home improvements have a significant influence on the Company's ability to
generate sales, particularly in relation to demand for its siding products. The
level of housing starts in the United States increased from 1.01 million in 1991
to 1.45 million as of June, 1997. The level of housing starts in Canada
decreased from 0.156 million in 1991 to 0.14 million in June, 1997. Although
management is unable to predict future levels of housing starts, management
believes that introduction of new products and acquisitions of product lines
will allow the Company to maintain levels of production and sales should housing
starts decline.
The cost of thermoplastic resins (polystyrene, polypropylene, polyethylene
and polyvinyl chloride) used in the Company's Plastics operations increased
substantially during 1995 before declining somewhat during the fourth quarter of
1995 and remaining at that level during 1996. Thermoplastic resin costs have
increased during the first half of 1997. Management believes that product price
increases, continuing cost reduction programs and increased production
efficiencies will counteract, to some extent, the impact of raw material price
increases.
In late 1995, two of the Company's largest exterior hardboard siding
product competitors announced the discontinuation the production of certain
"oriented strand board" ("OSB") siding products (see Certain Litigation). The
discontinuation of these siding products has created an increase in demand for
the Company's exterior hardboard siding products manufactured at the Roaring
River, NC, facility.
Management also believes that continued penetration into the mass
merchandiser market will have a significant influence on the Company's level of
business activity. Management believes that this market will continue to grow in
importance to the Company.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At June 30, 1997, the Company had working capital of $60.4 million with a
current ratio of 2.2 to 1.0 as compared with working capital of $42.8 million
and a current ratio of 2.0 to 1.0 at December 31, 1996. The increase in working
capital and the change in the current ratio were primarily due to the increase
in accounts receivable and inventories, partially offset by an increase in
accounts payable at June 30, 1997. The increases in accounts receivable and
accounts payable were a result of the increase in business activity in the
second quarter of 1997 versus the last quarter of 1996.
Long-term debt increased from $90.7 million at December 31, 1996 to $124.9
million as of June 30, 1997. This increase of $34.2 million is net of $3.1
million of short-term maturities reclassified from long-term debt at June 30,
1997. The increase in debt was primarily due to the increases in working capital
and capital expenditures, offset, in part, by cash generated by operations.
In March 1997, the Company and its bank group executed a Third Amended and
Restated Credit Agreement ("Credit Agreement") which replaced all prior credit
agreements. The Credit Agreement provides a line of credit to the Company
totaling $250 million consisting of a $175 million continuing revolving credit
facility, a $25 million 364-day line of credit and a term loan facility under
which the Company borrowed $50 million on April 3, 1995. The Credit Agreement
matures on March 10, 2002, subject to extension for additional one-year periods.
The term loan requires 16 equal quarterly principal payments of $3.125 million
commencing on June 30, 1997, and continuing through March 31, 2001. As of June
30, 1997, the interest rate on the $46.9 million term loan was 7.99% and the
weighted average interest rate on the outstanding revolving loans of $85.9
million was 6.2%.
In November 1995 , the Board of Directors approved plans for the
construction of a facility which will manufacture a fiber-reinforced cement
plank or panel. This product will be fire rated, will be both moisture and
insect resistant, and will initially be produced as exterior siding in a wide
variety of simulated woodgrain surfaces, including fir and cedar. The Company
has executed various agreements to provide for the primary production equipment
and for the construction of the facility. The plant was completed in June of
1997. The estimated cost of construction is $55 million.
On April 1, 1997 the Company entered into a loan agreement with the
Mississippi Business Finance Corporation for the issuance of $1 million Variable
Rate Demand Revenue Bonds (Series 1997A)
20
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND
---
RESULTS OF OPERATIONS
---------------------
LIQUIDITY AND CAPITAL RESOURCES(Continued)
- ------------------------------------------
and $16.5 million Taxable Variable Rate Demand Revenue Bonds (Series 1997B) to
finance the acquisition and construction of a vinyl siding manufacturing
facility in Holly Springs, Mississippi. The bonds bear interest rates determined
weekly by the remarketing agent. The bonds mature on April 1, 2022 and are
backed by Irrevocable Letters of Credit issued under the Company's Credit
Agreement. The amounts included in total debt reflect drawings against proceeds
of the issued amount of the bonds.
Capital expenditures during the six months ended June 30, 1997 amounted to
approximately $34.7 million, and were incurred primarily for improvements of the
Company's manufacturing facilities, including $18.4 million related to the
construction of the fiber cement facility and $6.2 million related to the
construction of the vinyl siding manufacturing facility in Holly Springs.
Management believes that the Company's cash on hand, anticipated funds from
operations and available borrowings under the revolving credit facility will be
sufficient to cover both its short-term and long-term working capital, capital
expenditure and debt service requirements.
ENVIRONMENTAL COMPLIANCE
- ------------------------
The Company's operations are subject to federal and state government
regulations pertaining to air emissions, waste water discharge and solid waste
disposal. While environmental compliance costs in the future will depend on
regulatory developments that cannot be predicted, the Company believes that
compliance will be achieved with a combination of capital expenditures and
modifications to its production processes. As discussed more fully in Note 6 of
the Notes to the Financial Statements, the Company entered into a consent decree
with respect to odor emissions at its Alpena, Michigan, facility requiring
estimated expenditures of $6 million to $12 million. The Company instituted
litigation to recover such costs from the former owner of the facility, but the
trial court dismissed the litigation. The Company has filed a claim of appeal
from the trial court's decision to dismiss the litigation. The Company does not
anticipate that costs relating to environmental activities will have a material
adverse impact on its financial condition or operating results.
CERTAIN LITIGATION
- ------------------
In recent years, a number of lawsuits have been brought against
manufacturers of OSB and exterior hardboard siding products alleging various
design and production defects and breach of express or implied warranties. Such
litigation has resulted in substantial settlements by certain competitors of the
Company. The Company has recently been named as a defendant in similar
litigation (see Note 6 of the Notes to the Financial Statements). The Company
believes that its exterior hardboard siding products are free of defects and,
when properly installed and maintained, are suitable for their intended purposes
and meet all applicable quality standards. Nevertheless, no assurance can be
given that the Company will not be required to expend significant resources to
defend against claims of this nature.
SEASONALITY
- -----------
The Company's quarterly results of operations are moderately seasonal due
to increases in construction activity that typically occur in the second and
third quarters and, to a lesser extent, the first quarter, thereby increasing
sales and gross profits in such periods as compared to the fourth quarter.
INFLATION
- ---------
The Company does not believe that inflation had a significant impact on the
Company's results of operations for the periods presented.
21
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND
---
RESULTS OF OPERATIONS
---------------------
PRIVATE SECURITIES LITIGATION REFORM ACT DISCLOSURE
- ---------------------------------------------------
This report contains various forward looking statements, including
financial, operating and other projections. There are many factors that could
cause actual results to differ materially, including adoption of new
environmental laws and regulations and changes in how they are interpreted and
enforced; general business conditions, such as level of competition, changes in
demand for the Company's products and strength of the economy in general. These
and other factors are discussed in this report, the Company's Annual Report on
Form 10-K and other documents the Company has filed with the Securities and
Exchange Commission.
22
<PAGE>
Part II: Other Information
- --------------------------
Item 1. Legal proceedings
See Note 6 to the Company's Consolidated Financial
Statements.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Filed on July 7, 1997.
23
<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.
Date: August 14, 1997
ABT BUILDING PRODUCTS CORPORATION
/s/ Joseph P. O'Neill
----------------------------------------
Joseph P. O'Neill
(Vice President Finance- Controller)
24
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from 10-Q
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,486
<SECURITIES> 0
<RECEIVABLES> 47,304
<ALLOWANCES> 5,406
<INVENTORY> 56,175
<CURRENT-ASSETS> 112,724
<PP&E> 221,235
<DEPRECIATION> 37,549
<TOTAL-ASSETS> 309,761
<CURRENT-LIABILITIES> 52,374
<BONDS> 0
0
0
<COMMON> 122
<OTHER-SE> 116,202
<TOTAL-LIABILITY-AND-EQUITY> 309,761
<SALES> 165,419
<TOTAL-REVENUES> 165,419
<CGS> 113,583
<TOTAL-COSTS> 26,278
<OTHER-EXPENSES> 10,397
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,267
<INCOME-PRETAX> 11,894
<INCOME-TAX> 4,591
<INCOME-CONTINUING> 7,303
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,303
<EPS-PRIMARY> 0.62
<EPS-DILUTED> 0.62
</TABLE>
