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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 10, 1997
EASCO, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-25834 94-3157362
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(State of other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
c/o Easco, Inc.
706 South State Street
Girard, Ohio 44420
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(Address of principal executive offices)
Registrant's telephone number, including area code (330) 545-4311
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Former name or former address, if changed since last report: Not applicable
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Item 5. Other Events.
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On September 10, 1997, Easco, Inc. announced a series of strategic initiatives
designed to focus the Company on its core aluminum extrusion business and
improve long-term profitability.
Item 7. Financial Statements and Exhibits
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(c). Exhibits.
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28.1 Press release, dated September 10, 1997, of Easco, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
EASCO, INC.
September 12, 1996 /s/ Terry D. Smith
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Terry D. Smith
Executive Vice President and
Chief Financial Officer
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Exhibit 28.1
FOR IMMEDIATE RELEASE
Contact: Terry D. Smith
Executive Vice President and Chief Financial Officer
Easco, Inc.
(330) 545-4311
EASCO ANNOUNCES STRATEGIC INITIATIVES
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Girard, Ohio, September 10, 1997 -- Easco, Inc. (NASDAQ: ESCO) announced today
a series of moves designed to focus the Company on its core aluminum extrusion
business and improve long term profitability. First, the Company intends to
sell its vinyl operation, located in Austintown, Ohio. The vinyl operation,
which produces extrusions used in windows, patio doors, bath enclosures and
custom profiles, had annual sales in 1996 of $13.1 million. The company hopes
to complete the sale by the end of the year and does not expect it to result in
a material gain or loss.
Second, the company will restructure its Dolton, Illinois extrusion plant in
order to focus exclusively on large diameter extrusions for the distribution
and transportation markets. This restructuring is part of a downsizing effort
which will result in a complete idling of one extrusion press as well as
reduced staffing and production on the plant's two large presses. The
reorganization will affect approximately 100 employees and will be carried out
over the next 60 days. Pursuant to this action, the Company will incur a
one-time after-tax charge of approximately $850,000 or $.08 per share for costs
associated with employee severance and other non-recurring expenses. Apart from
these one-time charges, the Company does not anticipate that these actions will
have a material impact on earnings during the second half of 1997, despite an
estimated annualized revenue decrease in the range of $20 to $30 million. In
addition, management believes this restructuring will position the Dolton
facility for sustained profitability consistent with the Company's longer term
operational and financial objectives.
In other news, the Company announced that it will soon launch a $5.5 million
expansion of its billet casting facility located in Ahoskie, North Carolina.
The addition, scheduled to be completed during the first quarter of 1998, will
effectively double the plant's existing casting capacity to 220 million pounds
annually. The project is expected to result in lower billet costs by allowing
the Company to produce substantially all of its billet requirements internally.
(more)
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In commenting upon these moves, Norman E. Wells, Jr., Easco's President and
Chief Executive Officer, said, "While we regret taking actions that impact our
Dolton employees, the downsizing at Dolton is consistent with our plan to
improve Easco's cost structure and competitive position as we move forward. The
planned volume reduction will provide the opportunity to initiate a $1.6
million capital program to further upgrade Dolton's large press capability
which is ideally suited to serve the needs of the service center and
transportation markets. In addition, with our ongoing expansion of Dolton's
casting capability and the Ahoskie project, we will accomplish a strategic
initiative to substantially eliminate our use of purchased billet." With regard
to the Austintown plant, Wells stated, "Exiting the vinyl business is a
strategic decision based on the belief that our financial and organizational
resources can best be used to improve our core aluminum business."
Easco, Inc. is the largest independent extruder of soft alloy aluminum products
in the United States and is a leading producer of painted extrusions. The
company operates 21 aluminum extrusion presses and three casting facilities.
Its products include standard and custom profiles, conduit and drawn tubing.
Cautionary Statement
The statements in this release concerning future prospects are forward looking
statements as such term is used under the Private Securities Litigation Reform
Act of 1995. The Company's performance may be affected by many uncertainties
that exist in the Company's operations and business environment that may cause
actual performance to differ materially from performance suggested by any
forward looking statements.
Demand for the Company's products is cyclical in nature and subject to changes
in general market conditions that affect demand. The Company's customers
operate primarily in industries (e.g., building and construction and
transportation) that are affected by changes in economic conditions, which in
turn can affect orders for extrusions. The Company and the extrusion industry
generally operate without significant order backlogs. As a result, economic
slowdowns and recessions could adversely affect the extrusion industry and the
Company. The Company's performance may also be affected by other risks and
uncertainties that may cause actual performance to differ from any
forward-looking statements, including but not limited to the following: the
Company's level of utilization of its extrusion capacity and the impact of
capacity utilization on costs; the Company's ability to increase its market
share, which may be necessary to maximize capacity utilization, and the costs
associated with any such effects; the highly competitive nature of the
extrusion industry and the relatively greater capitalization and lower levels
of indebtedness of certain competitors, particularly integrated aluminum
producers; developments with respect to contingencies such as environmental
matters and litigation; the impact on variable costs of changes in labor
(more)
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market conditions and energy and raw materials costs (primarily aluminum);
seasonal variations in the extrusion business which is generally stronger in
the second and third quarters and weaker in the first and fourth quarters;
whether the Company's management team hired in late 1996 will be able to
improve operations and profitability as planned; whether and to what extent the
Company's capital expenditures can achieve reductions in variable costs; and
the Company's ability to integrate and operate acquired facilities on a
profitable basis. For further information see section titled "Cautionary
Statement" in Part 1, Item 1, of the Company's annual report on Form 10-K.
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