================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: MARCH 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
1934
For the transition period from _________________ to _________________
Commission File Number: 0-24094
LESLIE BUILDING PRODUCTS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3764357
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
200 Mamaroneck Avenue, White Plains, N.Y. 10601
(Address of principal executive offices)
(Zip Code)
(914) 421-2545
Registrant's Telephone Number including Area Code
(Former name, former address and former fiscal year,
if changed since last year)
Indicate by check marks 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 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 |XX| No |__|
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. 4,862,624 shares of common
stock as of April 27, 1998.
================================================================================
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
INDEX TO FINANCIAL STATEMENTS FILED WITH
QUARTERLY REPORT OF REGISTRANT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1998
(UNAUDITED)
===========================================
Page
----
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF OPERATIONS 3
CONSOLIDATED BALANCE SHEETS 4
CONSOLIDATED STATEMENTS OF CASH FLOWS 5
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7-9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10-13
PART II - OTHER INFORMATION
Not applicable
SIGNATURES 14
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
----------------------
1998 1997
===============================================================================
(In thousands, except per share amounts)
Net sales $ 17,957 $ 20,399
Cost of sales (Note 2) 14,766 17.742
-------- --------
Gross profit 3,191 2,657
Selling, general and administrative expenses 3,330 3,474
-------- --------
Operating loss (139) (817)
Interest expense, net 207 450
-------- --------
Net loss $ (346) $ (1,267)
======== ========
Net loss per common share:
Basic $ (.07) $ (.26)
======== ========
Diluted $ (.07) $ (.26)
======== ========
Weighted average common shares outstanding:
Basic 4,862 4,841
======== ========
Diluted 4,862 4,841
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31,
-------------------- December 31,
1998 1997 1997
=========================================================================================
<S> <C> <C> <C>
(In thousands, except shares and per share amounts)
ASSETS
Current assets
Cash $ 551 $ 9 $ 2,903
Accounts receivable, trade, less allowance for
doubtful accounts 6,873 11,138 5,527
Inventories (Note 2) 11,722 16,772 10,181
Prepaid expenses and other current assets 1,047 1,302 1,294
-------- -------- --------
Total current assets 20,193 29,221 19,905
Fixed assets, net 13,469 14,835 13,698
Other assets 484 393 526
-------- -------- --------
Total assets $ 34,146 $ 44,449 $ 34,129
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 533 $ 937 $ 651
Accounts payable, trade 5,800 9,465 5,957
Accrued expenses and other current liabilities 5,650 6,072 5,163
Discontinued operations, net (Note 3) 3,892 3,736 3,853
-------- -------- --------
Total current liabilities 15,875 20,210 15,624
Long-term debt (Note 4) 8,893 16,028 8,964
Other long-term liabilities 834 894 656
-------- -------- --------
Total liabilities 25,602 37,132 25,244
-------- -------- --------
Commitments and Contingencies (Note 3)
Stockholders' equity
Common stock par value $.01 per share:
authorized 20,000,000 shares; issued
4,862,624 shares in March 1998, 4,843,552
shares in March 1997, and 4,860,178 shares
in December 1997 48 48 48
Paid-in capital 20,360 20,333 20,355
Accumulated deficit (11,864) (13,064) (11,518)
-------- -------- --------
Total stockholders' equity 8,544 7,317 8,885
-------- -------- --------
Total liabilities and stockholders' equity $ 34,146 $ 44,449 $ 34,129
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
-------------------
1998 1997
===============================================================================
(In thousands)
Cash flows from operating activities:
Net loss $ (346) $(1,267)
Adjustments to reconcile net loss to cash flows
provided by (used for) operating activities:
Depreciation and amortization 404 504
Provision for accounts receivable 34 118
Gain on disposal of fixed assets (2)
Changes in assets and liabilities:
Accounts receivable (1,380) (3,441)
Inventories (1,541) 119
Prepaid expenses and other assets 257 162
Accounts payable, accrued expenses and
other current liabilities 369 5,252
------- -------
Net cash flows (used for) provided by
operating activities (2,203) 1,445
------- -------
Cash flows from investing activities:
Capital expenditures (143) (36)
Sale of fixed assets 59
------- -------
Net cash flows (used for) provided by
investing activities (143) 23
------- -------
Cash flows from financing activities:
Proceeds from secured line of credit 718 6,794
Repayments under secured line of credit and
other borrowings (718) (8,360)
Other (6) 73
------- -------
Net cash flows used for financing activities (6) (1,493)
------- -------
Net decrease in cash (2,352) (25)
Cash at beginning of period 2,903 34
------- -------
Cash at end of period $ 551 $ 9
======= =======
Supplemental disclosure of cash flows information:
Cash paid during the period for:
Interest on debt $ 100 $ 405
Income taxes $ 10
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Total
Common Paid-in Accumulated Stockholders'
Stock Capital Deficit Equity
(In thousands, except shares)
=================================================================================================
<S> <C> <C> <C> <C>
Balance - December 31, 1997 $ 48 $ 20,355 $(11,518) $ 8,885
Net loss for three months ended March 31, 1998 (346) (346)
Employee purchases of 2,446 shares of common stock 5 5
-------- -------- -------- --------
Balance - March 31, 1998 $ 48 $ 20,360 $(11,864) $ 8,544
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The Consolidated Financial Statements presented herein, which include the
accounts of Leslie Building Products, Inc. ("the Company") and its wholly-owned
subsidiaries, the only active one being Leslie-Locke, Inc. ("Leslie-Locke"),
have been prepared by the Company in accordance with the accounting policies
described in its December 31, 1997 Annual Report on Form 10-K and should be read
in conjunction with the Notes to Consolidated Financial Statements included
therein.
In the opinion of management, the information furnished in this Form 10-Q
reflects all adjustments necessary for a fair statement of the results of
operations as of and for the three month periods ended March 31, 1998 and 1997.
All such adjustments are of a normal recurring nature. The Consolidated
Financial Statements have been prepared in accordance with the instructions to
Form 10-Q and therefore do not include some information and notes necessary to
conform with annual reporting requirements.
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No.130, "Reporting Comprehensive Income."
Statement 130 establishes standards for reporting and display of comprehensive
income and its components in the financial statements. The Company has had no
"other" comprehensive income for the three months ended March 31, 1998 and 1997.
In June 1997, the Financial Accounting Standards Board issued SFAS 131,
"Disclosure about Segments of an Enterprise and Related Information," for fiscal
years beginning after December 15, 1997. This statement addresses presentation
and disclosure matters and will have no impact on the Company's financial
position or results of operations. The impact on disclosures in the Company's
financial statements of Statement 131, which will be adopted an December 31,
1998, has not yet been determined.
2. Inventories
Inventories are valued at the lower of cost (using the last-in, first-out
and first-in, first-out methods) or market. Cost includes material, labor and
overhead (for manufactured products); market is replacement cost or realizable
value after allowance for costs of distribution.
Quarterly inventories valued on the last-in, first-out method are based on
an annual determination of quantities and costs as of the previous year-end.
Therefore, such quarterly inventory valuations are based on estimates.
3. Discontinued Operations
In fiscal 1990, the Company discontinued the operations of White Metal
Rolling and Stamping Corp. ("White Metal"), the Company's ladder manufacturing
subsidiary, and sold certain assets of White Metal, (machinery, equipment and
supplies and customer lists) to a private company. The buyer did not assume any
liabilities of White Metal, nor acquire the White Metal name and will not
produce White Metal ladders. All manufacturing operations of White Metal ceased
as of January 31, 1991 and substantially all of its remaining assets have since
been liquidated.
7
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
At March 31, 1998, White Metal's estimated future product liability, which
is no longer covered by insurance, was approximately $3.9 million. Such
liability is reflected in discontinued operations, net, on the Consolidated
Balance Sheet. Although Leslie-Locke was named as a defendant in certain product
liability actions, Leslie-Locke has not been held responsible, and the Company
and Leslie-Locke disclaim any liability for the obligations of White Metal.
On September 30, 1994, White Metal filed a voluntary petition seeking
liquidation under the provisions of chapter 7 of the United States Bankruptcy
Code. In connection with the chapter 7 filing by White Metal, numerous proofs of
claim have been filed against White Metal. Included is a claim by Sears Roebuck
& Co., ("Sears") dated April 7, 1995, in the amount of $164 million, including
actual losses of $1.7 million and estimated future product liability losses for
the next 20 years, based upon indemnification obligations which Sears alleges
White Metal undertook in connection with White Metal's sale of ladders to Sears.
These proofs of claim have been evaluated in determining the Company's estimated
product liability accrual. The Company and Leslie-Locke have in the past
disclaimed, and continue to disclaim, any liability for the obligations of White
Metal.
On May 7, 1996, the Company and Leslie-Locke, and Drew Industries
Incorporated ("Drew"), the former parent of Leslie-Locke, and its subsidiary,
Kinro, Inc., were served with a summons and complaint in an adversary proceeding
commenced by the chapter 7 trustee of White Metal. The complaint, which appears
to allege several duplicate claims, seeks damages in the aggregate amount of
approximately $10.6 million plus attorneys' fees, of which approximately $7.5
million is sought, jointly, and severally, from the Company, Leslie-Locke, Drew
and Kinro. The proceeding is based principally upon the trustee's allegations
that the Company and its affiliated companies obtained tax benefits attributable
to the use of White Metal's net operating losses. The trustee seeks to recover
the reported value of the tax savings achieved. Management believes that the
trustee's allegations are without merit and have no basis in fact. In addition,
the trustee alleges that White Metal made certain payments to Leslie-Locke which
were preferential and are recoverable by White Metal, in the approximate amount
of $2.2 million. Leslie-Locke denies liability for any such amount and is
vigorously defending against the allegations. However, an estimate of potential
loss, if any, cannot be made at this time. The Company believes the defense of
this proceeding will not have a material adverse impact on its financial
condition or results of operations.
4. Long-Term Debt
The Company has a $12 million revolving line of credit, secured by
substantially all of the Company's assets, with Branch Banking and Trust Company
("BBT"), consisting of cash advances of a maximum of $10 million, seasonally
adjusted and depending upon collateral availability, and letters of credit of $2
million, with interest payable at 0.625% over the prime rate. In addition, the
Company is required to pay a commitment fee, accrued at the rate of 1% per
annum, on the daily unused amount of the revolving line of credit. At March 31,
1998, there were no borrowings under this line of credit and the interest rate
on this line of credit was 9.125%.
Pursuant to its bank agreements, the Company is prohibited from declaring
or paying dividends without the prior written consent of the lender.
Leslie-Locke is also required to maintain certain financial covenants typical to
secured borrowing arrangements. For the period ended March 31, 1998 the Company
was in violation of its working capital requirement and a waiver of such
violation was received from BBT.
8
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company also has a $7 million Industrial Revenue Bond. The proceeds
were used to pay the existing mortgage to BBT on the Company's second plant in
Burgaw, North Carolina and other debt. The loan is for thirteen years with
annual amortization beginning June 1999 and is secured by a letter of credit
from BBT which expires in June 2000. Interest is variable with the tax exempt
short-term market (3.95% per annum at March 31, 1998) and there is a letter of
credit fee of 1.9% per annum.
9
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Leslie Building Products, Inc. ("Leslie Building Products"), including its
wholly-owned subsidiary Leslie-Locke, Inc. ("Leslie-Locke") (together, the
"Company"), is a diversified manufacturer and marketer of a wide variety of
specialty building products for the professional and do-it-yourself home
remodeling and residential construction industry. Its products, which are
manufactured and marketed through three operating divisions, consist of (i)
ornamental iron security products (including doors, window guards, fencing and
railings), (ii) residential ventilation products, and (iii) specialty building
products consisting of metal and fiberglass air distribution products for the
HVAC industry, and a full line of door louvers and vision lite products for the
architectural door market. This broad range of products is marketed primarily to
leading home center chains and, to a lesser extent, to building material
distributors, hardware co-ops and mass merchandisers.
RESULTS OF OPERATIONS
Operations
The results of operations for the three months ended March 31, 1998 and
1997 should not be regarded as indicative of the results that may be expected
for the entire year, since operations are seasonal in nature. Operations are
historically stronger in the spring and summer months with 60% of sales
occurring during the six month period March to August.
Net sales declined 12% for the three months ended March 31, 1998 compared
to the same period last year, as a result of lower sales of security products
and ventilation products. This sales reduction is primarily volume related and
is attributable to high retail ventilation inventories as well as the effect of
bad weather on west coast sales.
Gross profit as a percentage of sales increased 4.8% for the three months
ended March 31, 1998 from the same period last year. The current quarter
reflects lower inventory levels and tighter control on production resulting in
substantially better manufacturing efficiencies. These efficiencies, combined
with lower material costs enhanced the current quarter's gross profit. The prior
period's gross profit was low as a result of additional trade discounts and
approximately $.5 million of one-time costs of acquiring new business. In
addition, selling prices had been reduced on certain other items in the prior
period.
Selling, general and administrative expenses decreased 4% from the 1997
quarter. Included in the current quarter's expenses are approximately $200,000
of costs associated with the Company's on-going efforts in evaluating strategic
alternatives for its long-range business plan. The prior year's quarter includes
additional market development costs in acquiring the new business described
above.
Interest Expense, Net
The reduction in the quarter's interest expense from $450,000 in 1997 to
$207,000 in 1998 results primarily from lower borrowings under the Company's
revolving credit line. The lower borrowings are attributable to lower inventory
and improved cash management including faster turnover of receivables. In
addition, interest expense was reduced by the June 1, 1997 refinancing of bank
debt by a $7 million Industrial Revenue Bond which has a lower interest rate.
10
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Income Taxes
The Company's income tax provision is recorded pursuant to the
requirements of Financial Accounting Standards No. 109 "Accounting for Income
Taxes" ("Statement 109"). At December 31, 1997, the Company had a net operating
loss carryforward for Federal income tax purposes of approximately $4.1 million,
of which $3.7 million expires in the year 2010 and $.4 million expires in the
year 2011. The Company has net deferred tax assets at December 31, 1997 of $4.5
million, however, due to the uncertainty of future realization no income tax
benefit has been recorded.
Other
Pursuant to a Shared Services Agreement with Drew Industries Incorporated
("Drew"), the Company's former parent, Drew and Leslie Building Products have
shared certain administrative functions and employee services, such as
management overview and planning, tax preparation, financial reporting,
coordination of independent audit, stockholder relations, and regulatory
matters. Drew has been reimbursed by Leslie Building Products for the fair
market value of such services. This Agreement expires on December 31, 1998 but
may be extended. The Company was charged management fees by Drew of $150,000 and
$146,000 for the quarters ended March 31, 1998 and 1997, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a $12 million revolving line of credit with Branch Banking
and Trust Company ("BBT"), consisting of cash advances of a maximum of $10
million, seasonally adjusted and depending upon collateral availability, and
letters of credit of $2 million, with interest payable at 0.625% over the prime
rate. The line of credit, of which $10 million is available at the close of
business on March 31, 1998, is adequate for the Company's anticipated needs. The
loan agreement expires in July 1999.
Pursuant to its bank agreements the Company is prohibited from declaring
or paying dividends without the prior written consent of the lender.
Leslie-Locke is also required to maintain certain financial covenants typical to
secured borrowing arrangements. For the period ended March 31, 1998, the Company
was in violation of its working capital requirement and a waiver of such
violation was received from BBT.
The Statements of Cash Flows reflect the following (in thousands):
<TABLE>
<CAPTION>
Quarter Ended March 31,
1998 1997
===================================================================================
<S> <C> <C>
Net cash flows(used for) provided by operating activities $(2,203) $ 1,445
Net cash flows (used for) provided by investing activities $ (143) $ 23
Net cash flows used for financing activities $ (6) $(1,493)
</TABLE>
Net cash used for operating activities is substantially attributable to
seasonal increases in accounts receivable and inventories. The increase in
accounts receivable was $2 million less than the March 1997 increase as a result
of lower sales and shorter average customer payment terms. The $1.5 million
increase
11
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
in inventories compared to substantially no increase in March 1997 because
inventory levels at December 1996 were inordinately high and the Company
instituted more efficient controls resulting in lower inventory levels since
that time. The high December 1996 inventory levels are the primary reason that
payables were reduced $5.3 million in the 1997 quarter compared to $.4 million
the 1998 quarter.
Cash flows used for investing activities, primarily capital expenditures,
have been minimal since the construction of the new plant in Burgaw, North
Carolina in 1996.
Financing activities were not significant for the quarter as the Company
was able to utilize the cash and short-term investments that were available
since December 31, 1997.
At March 31, 1998, the estimated future product liability of White Metal,
Leslie-Locke discontinued ladder manufacturing subsidiary, which is no longer
covered by insurance, was approximately $3.9 million. Such liability is
reflected in discontinued operations, net, on the Consolidated Balance Sheet.
Although Leslie-Locke was named as a defendant in certain product liability
actions, Leslie-Locke has not been held responsible, and the Company and
Leslie-Locke disclaim any liability for the obligations of White Metal.
On September 30, 1994, White Metal filed a voluntary petition seeking
liquidation under the provisions of chapter 7 of the United States Bankruptcy
Code. In connection with the chapter 7 filing by White Metal, numerous proofs of
claim have been filed against White Metal. Included is a claim by Sears Roebuck
& Co., ("Sears") dated April 7, 1995, in the amount of $164 million, including
actual losses of $1.7 million and estimated future product liability losses for
the next 20 years, based upon indemnification obligations which Sears alleges
White Metal undertook in connection with White Metal's sale of ladders to Sears.
These proofs of claim have been evaluated in determining the Company's estimated
product liability accrual. The Company and Leslie-Locke have in the past
disclaimed, and continue to disclaim, any liability for the obligations of White
Metal.
On May 7, 1996, the Company and Leslie-Locke, and Drew, the former parent
of Leslie-Locke, and its subsidiary, Kinro, Inc., were served with a summons and
complaint in an adversary proceeding commenced by the chapter 7 trustee of White
Metal. The complaint, which appears to allege several duplicate claims, seeks
damages in the aggregate amount of approximately $10.6 million plus attorneys'
fees, of which approximately $7.5 million is sought, jointly, and severally,
from the Company, Leslie-Locke, Drew and Kinro. The proceeding is based
principally upon the trustee's allegations, previously disclosed by the Company,
that the Company and its affiliated companies obtained tax benefits attributable
to the use of White Metal's net operating losses. The trustee seeks to recover
the reported value of the tax savings achieved. Management believes that the
trustee's allegations are without merit and have no basis in fact. In addition,
the trustee alleges that White Metal made certain payments to Leslie-Locke and
Drew which were preferential and are recoverable by White Metal, in the
approximate amount of $2.2 million. Leslie-Locke denies liability for any such
amount and is vigorously defending against the allegations. However, an estimate
of potential loss, if any, cannot be made at this time. The Company believes the
defense of this proceeding will not have a material adverse impact on its
financial condition or results of operations.
12
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
INFLATION
The prices of raw materials, consisting primarily of steel, aluminum,
paint, electric motors and packaging materials are influenced by demand and
other factors specific to these commodities rather than being directly affected
by inflationary pressures.
STRATEGIC ALTERNATIVES
On November 12, 1997, the Company announced that its Board of Directors
was considering strategic alternatives for the Company's long-range business
plans. In this connection, the Company retained Harris Williams & Co. to assist
in evaluating, and possibly disposing of, all or certain of the three major
operating divisions of the Company's wholly-owned operating subsidiary,
Leslie-Locke, Inc.
The Board's decision is motivated by the Company's desire to achieve
greater per share value for its stockholders. The home improvements products
business is in the midst of fundamental changes, including the rapid
consolidation of manufacturers and retailers, resulting in intense competitive
pressure. As a result, the Company's goal of increased per share return to its
stockholders is unlikely to be realized in the near future. Although operating
management is optimistic about the growth opportunities available to Leslie-
Locke, the Board of Directors believes that these opportunities could best be
realized by a significantly larger company which is in a better position than
the Company to compete in the changing industry. The specific restructuring
plans for the Company are dependent upon the ultimate outcome of these efforts.
YEAR 2000
The company recognizes the need to ensure its operations will not be
adversely impacted by year 2000 software failures. Software failures due to
processing errors potentially arising from calculations using the Year 2000 date
are a known risk. The Company is addressing this risk to the availability and
integrity of financial systems and the reliability of operational systems. The
Company has established processes for evaluating and managing the risks and
costs associated with this problem. The computing portfolio was identified and a
computer upgrade plan has been developed. The cost of achieving Year 2000
compliance is estimated to be approximately $.8 million to $1.5 million and will
be incurred through 1999.
FORWARD LOOKING STATEMENTS AND RISK FACTORS
This report contains certain statements, including the Company's plans
regarding its operating performance which could be construed to be forward
looking statements within the meaning of the Securities and Exchange Act of
1934. These statements reflect the Company's current views with respect to
future plans, events and financial performance.
The Company has identified certain risk factors which could cause actual
plans and results to differ substantially from those included in the forward
looking statements. These factors include pricing pressures due to competition,
raw material costs, housing starts, interest rates, and the Year 2000 problem
discussed above. In addition, general economic conditions may affect the retail
sale of the Company's products.
13
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
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.
LESLIE BUILDING PRODUCTS, INC.
Registrant
By /s/ Fredric M. Zinn
------------------------
Fredric M. Zinn
Principal Financial Officer
May 12, 1998
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 551
<SECURITIES> 0
<RECEIVABLES> 7,250
<ALLOWANCES> 377
<INVENTORY> 11,722
<CURRENT-ASSETS> 20,193
<PP&E> 22,163
<DEPRECIATION> 8,694
<TOTAL-ASSETS> 34,146
<CURRENT-LIABILITIES> 15,875
<BONDS> 0
0
0
<COMMON> 48
<OTHER-SE> 8,496
<TOTAL-LIABILITY-AND-EQUITY> 34,146
<SALES> 17,957
<TOTAL-REVENUES> 17,957
<CGS> 14,766
<TOTAL-COSTS> 18,096
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 207
<INCOME-PRETAX> (346)
<INCOME-TAX> 0
<INCOME-CONTINUING> (346)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (346)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
