<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________________ TO ________________
COMMISSION FILE NUMBER:
0-25834
--------------------
EASCO, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 94-3157362
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) identification no.)
706 SOUTH STATE STREET, GIRARD, OHIO
(Address of principal executive office)
44420
(Zip Code)
(330) 545-4311
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT AUGUST 10, 1998
----- ------------------------------
Common Stock, $0.01 Par Value 10,475,339
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 1998 and December 31, 1997 ..................3
Condensed Consolidated Statements of Operations for the three and six months ended
June 30, 1998 and June 30,1997.................................................................4
Condensed Consolidated Statements of Cash Flows for the six months ended
June 30, 1998 and June 30, 1997................................................................5
Notes to Condensed Consolidated Financial Statements..............................................6
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of
Operations........................................................................................8
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.........................................13
Item 5. Other Information...........................................................................13
Item 6. Exhibits and Reports on Form 8-K............................................................13
Signature...........................................................................................14
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EASCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
----------------- ---------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 18,876 $ 8,470
Receivables, net 41,779 41,881
Inventories 28,024 40,059
Other current assets 3,627 4,061
--------- ---------
Total current assets 92,306 94,471
--------- ---------
Property, plant and equipment, net 80,370 81,875
Goodwill, net 52,482 53,238
Other assets 6,284 6,680
========= =========
Total assets $ 231,442 $ 236,264
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,254 $ 29,363
Accrued insurance obligations 3,232 3,290
Accrued payroll 5,338 5,596
Other current liabilities 15,501 15,087
--------- ---------
Total current liabilities 44,325 53,336
Long-term debt 85,000 85,000
Deferred income taxes 13,968 14,291
Accrued pension benefits 1,661 1,760
Accrued postretirement benefits 3,194 2,879
Other non-current liabilities 8,946 10,479
--------- ---------
Total liabilities 157,094 167,745
--------- ---------
Commitments and contingencies - -
Stockholders' equity:
Preferred Stock, $.01 par value, authorized
1,000,000 shares; none issued or outstanding - -
Common Stock, $.01 par value, authorized
40,000,000 shares; 12,479,561 and 12,440,276
issued and outstanding at June 30, 1998 and
December 31, 1997, respectively 125 124
Paid-in capital 82,371 81,875
Retained earnings 11,842 6,510
Less: treasury stock, 2,005,222 shares (19,990) (19,990)
--------- ---------
Total stockholders' equity 74,348 68,519
--------- ---------
Total liabilities and stockholders' equity $ 231,442 $ 236,264
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
EASCO, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------------- -------------------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1998 1997 1998 1997
------------------ ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net sales:
Product $ 65,228 $ 73,585 $ 130,679 $ 135,365
Tolling fees 15,710 16,401 31,113 31,906
------------------ ----------------- ----------------- -----------------
80,938 89,986 161,792 167,271
Cost of products sold 70,045 78,974 141,250 149,479
------------------ ----------------- ----------------- -----------------
Gross profit 10,893 11,012 20,542 17,792
Selling, general and administrative 4,545 5,413 8,669 9,395
Amortization of goodwill and other 414 414 828 828
Management fees 225 225 450 450
Non-recurring gain - - (3,041) -
------------------ ----------------- ----------------- -----------------
Operating profit 5,709 4,960 13,636 7,119
Interest expense (net) 2,038 2,067 4,090 4,231
------------------ ----------------- ----------------- -----------------
Income before income tax 3,671 2,893 9,546 2,888
Income tax provision 1,539 1,400 4,006 1,398
------------------ ----------------- ----------------- -----------------
Net income $ 2,132 $ 1,493 $ 5,540 $ 1,490
================== ================= ================= =================
Basic earnings per share $ 0.20 $ 0.14 $ 0.53 $ 0.14
================== ================= ================= =================
Diluted earnings per share $ 0.20 $ 0.14 $ 0.51 $ 0.14
================== ================= ================= =================
Weighted average number of
common shares 10,471,065 10,409,670 10,457,704 10,409,670
================== ================= ================= =================
Weighted average number of
common shares - assuming dilution 10,812,724 10,603,077 10,804,368 10,591,496
================== ================= ================= =================
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
EASCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------------------------
JUNE 30, JUNE 30,
1998 1997
-------------- -------------
<S> <C> <C>
Cash flows from operations:
Net income $ 5,540 $ 1,490
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation 3,431 3,577
Amortization of goodwill and other intangibles 828 828
Amortization of deferred debt issue costs 288 286
Stock compensation expense 105 110
Gain on sale of assets (3,041) -
Changes in operating assets and liabilities:
Increase in receivables (695) (10,980)
Decrease (increase) in inventories 8,460 (2,846)
(Increase) decrease in other current assets (486) 2,330
Increase in other assets (98) (975)
(Decrease) increase in other accounts payable,
accruals, and other current liabilities (7,913) 16,388
Increase (decrease) in deferred taxes (net) 76 (88)
Decrease in other noncurrent liabilities (1,317) (248)
-------- --------
Net cash provided by operating activities 5,178 9,872
-------- --------
Cash flows from investing activities:
Proceeds from sale of assets 13,225 -
Property additions (net) (8,181) (3,014)
-------- --------
Net cash provided by (used for) investing activities 5,044 (3,014)
-------- --------
Cash flows from financing activities:
Issuance of Common Stock 392 -
Cash dividends paid (208) (208)
-------- --------
Net cash provided by (used for) financing activities 184 (208)
-------- --------
Net increase for the period 10,406 6,650
Cash and cash equivalents, beginning of period 8,470 13,245
======== ========
Cash and cash equivalents, end of period $ 18,876 $ 19,895
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
EASCO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
include the accounts of Easco, Inc. (the "Company") and its wholly-owned
subsidiary Easco Corporation ("Easco") and Easco's wholly-owned subsidiary,
Dolton Aluminum Company, Inc. ("Dolton"). These condensed financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial statements and accordingly do not include all of the
information and disclosures generally required for complete financial
statements. In the opinion of management, all adjustments considered necessary
for a fair presentation have been made.
During the fourth quarter of 1997, the Company changed the way it
classifies freight costs. As a result of the reclassification, gross profit and
selling, general and administrative expenses decreased $3.6 million and $4.6
million, respectively, for the quarter ended June 30, 1998 and 1997. For the six
months ended June 30, 1998 and 1997 gross profit and selling, general and
administrative expenses decreased $8.1 million and $8.7 million, respectively.
2. Inventories
At June 30, 1998 and December 31, 1997, inventories consist of:
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------------- -------------
<S> <C> <C>
Raw materials $ 4,701 $ 2,226
Work-in-process 11,232 20,028
Finished goods 12,091 20,308
-------------- -------------
Total at FIFO cost 28,024 42,562
Less excess of FIFO cost over
LIFO values - (2,503)
-------------- -------------
Total $ 28,024 $ 40,059
============== =============
</TABLE>
Inventories are valued at the lower of cost or market, with cost
determined using the last-in, first-out (LIFO) method.
3. Non-Recurring Gain
In the first quarter of 1998, the Company realized a pre-tax,
non-recurring gain of $3.0 million related to the sale of its vinyl extrusion
operations. The transaction was recorded as an asset sale and involved the
transfer of all assets and liabilities associated with the vinyl extrusion
operations.
4. Subsequent Event
On July 22, 1998 the Company announced that it will commence an offer
to purchase up to 1,000,000 shares of its common stock, or approximately 9.5% of
its shares outstanding, from existing stockholders. The Company will conduct the
tender offer through a procedure commonly referred to as a "Dutch Auction" in
which stockholders can tender their shares at prices not in excess of $12.00 nor
less than $9.00 per share.
6
<PAGE> 7
5. Contingencies
Litigation
Lawsuits and claims are filed from time to time against the Company in
the ordinary course of business. Management of the Company, after reviewing
developments to date with legal counsel, is of the opinion that the outcome of
such matters will not have a material adverse effect on the Company's financial
condition, results of operations or liquidity.
Environmental Matters
The Company is subject to a wide variety of environmental laws which
continue to be adopted and amended. While the ultimate extent of the Company's
liability for pending or potential fines, penalties, remedial costs, claims and
litigation relating to environmental laws and health and safety matters and
future capital expenditures that may be associated with environmental laws
cannot be determined at this time, management continually assesses the Company's
environmental contingencies. The Company has recorded a reserve of $5.5 million
for environmental contingencies at June 30, 1998.
6. New Accounting Pronouncements
During February 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits." SFAS No. 132
refines and standardizes the disclosure requirements for employer sponsored
pension and postretirement plans. The Company is currently evaluating this
statement and management does not believe that implementation of this standard
will be material to the Company's financial position, results of operations or
cash flows.
During June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS
No. 133 establishes accounting and reporting standards for derivative
instruments and for hedging activities and requires an entity to recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. The Company is currently
evaluating the impact, if any, this statements may have on its financial
position or the results of its operations.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
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. The
Company's products include standard and custom profiles, conduit, cable
sheathing and drawn tubing.
Demand was strong in most of the Company's markets during the second quarter of
1998 with the notable exception of the coaxial cable sheathing market where
shipments were off over 30%. The struggling Asian economy has negatively
impacted the demand for coaxial cable overseas and domestic order rates have not
offset this shortfall. As a result, the Company's shipments of aluminum products
declined slightly for the quarter ended June 30, 1998 when compared to the same
quarter in 1997. Total shipments declined by a larger percentage in the 1998
quarter due to the absence of vinyl product shipments. The Company completed the
sale of its vinyl extrusion operation in January, 1998, recording a pre-tax
nonrecurring gain, net of expenses, of $3.0 million.
Although metal margins widened in the second quarter of 1998 compared to the
same quarter last year, a narrowing of the price differential between aluminum
scrap, a major feedstock for the Company, and primary aluminum partially offset
the metal margin increase. Due to supply and demand conditions in the United
States, there was a significant contraction in the difference between the cost
of aluminum scrap and the price of primary aluminum in the second quarter. In
many instances, the Company is now competing with aluminum rolling mills for the
available supply of aluminum extrusion scrap. As a result, the profit
enhancement realized from the Company's predominantly scrap based casting
operations was reduced. While the Company does not anticipate these conditions
to continue for the long-term, there can be no assurance that they will not
persist for the foreseeable future and continue to reduce the Company's overall
metal margins.
The Company's casting expansion in Ahoskie, North Carolina began production in
the first week of July 1998 and is anticipated to steadily increase production
during the third quarter. As a result, the Company expects to be substantially
self-sufficient with respect to billet requirements in the near term. The
upgrade programs at the Company's Dolton, Illinois ("Dolton") facility are
essentially complete, and improvements have been realized in both the casting
and extruding operations. The Company anticipates additional operating
efficiencies as the upgrades and process improvements are more fully
implemented.
8
<PAGE> 9
BASIS OF PRESENTATION:
The following table sets forth, for the periods shown, certain of the
Company's unaudited performance statistics.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1998 1997 1998 1997
------------- -------------- ------------- -----------
(AMOUNTS IN MILLIONS, EXCEPT PER POUND DATA)
<S> <C> <C> <C> <C>
Net sales $ 80.9 $ 90.0 $ 161.8 $ 167.3
Gross profit 10.9 11.0 20.5 17.8
Non-recurring gain - - 3.0 -
Operating profit 5.7 5.0 13.6 7.1
Net income $ 2.1 $ 1.5 $ 5.5 $ 1.5
Pounds shipped:
Company-owned material 52.6 57.1 105.2 106.7
Customer Conversion Program 27.5 28.6 54.8 56.7
-------- -------- -------- --------
Total pounds shipped 80.1 85.7 160.0 163.4
======== ======== ======== ========
Other performance measures:
Operating profit $ 5.7 $ 5.0 $ 13.6 $ 7.1
Non-cash and non-recurring items:
Depreciation and amortization 2.1 2.2 4.2 4.4
Non-recurring gain - - (3.0) -
-------- -------- -------- --------
Adjusted EBITDA (1) $ 7.8 $ 7.2 $ 14.8 $ 11.5
======== ======== ======== ========
Cash flows provided by operations $ 14.1 $ 6.6 $ 5.2 $ 9.9
======== ======== ======== ========
Cash flows provided by (used for) investing $ (3.2) $ (1.4) $ 5.0 $ (3.0)
======== ======== ======== ========
Cash flows provided by (used for) financing $ - $ (0.1) $ 0.2 $ (0.2)
======== ======== ======== ========
Gross profit per pound $ 0.136 $ 0.128 $ 0.128 $ 0.109
Adjusted EBITDA per pound $ 0.097 $ 0.084 $ 0.093 $ 0.070
</TABLE>
(1) Adjusted EBITDA is not intended to represent cash flow from operations as
defined by generally accepted accounting principles and should not be
considered as an alternative to net income as an indicator of operating
performance or to cash flow as a measure of liquidity.
Aluminum Price Fluctuation Management Programs. Under its Customer Conversion
Program, the Company's customers supply aluminum directly to the Company, and
the Company converts this aluminum into finished product for an agreed tolling
charge. Accordingly, neither net sales nor cost of products sold reflect the raw
material cost for these sales, and, depending upon the degree to which aluminum
is customer-supplied, net sales and cost of products sold will fluctuate without
regard to underlying business activity. Combined with the Company's turnover of
its aluminum inventory and the Company's metal hedging strategies, this program
serves to minimize the impact of aluminum price changes on the Company.
9
<PAGE> 10
RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTH PERIODS
ENDED JUNE 30, 1998 AND 1997
Net sales for the second quarter of 1998 decreased 10.1% to $80.9
million from $90.0 million in the second quarter of 1997. This decrease was
primarily due to lower volumes as a result of the sale of the Company's vinyl
extrusion operations in January 1998, a 30% decrease in shipments of cable
sheathing and a decline in the market price of aluminum which has resulted in
reduced selling prices for the Company's products. For the six months ended June
30, 1998, net sales were $161.8 million compared to $167.3 million for the same
period in 1997. This decrease is primarily a result of the sale of the vinyl
extrusion operation, lower cable sheathing shipments, reduced selling prices and
a lower percentage of Customer Conversion Program shipments.
For the quarter ended June 30, 1998, gross profit was $10.9 million,
essentially level with $11.0 million for the same period in 1997. Gross profit
was level despite the decrease in shipments primarily due to slightly wider
metal margins in the second quarter of 1998 and reduced scrap rates, higher
press productivity and increased casthouse production at Dolton. Gross profit
for the six months ended June 30, 1998 increased 15.2% to $20.5 million from
$17.8 million for the six months ended June 30, 1997. This increase is a result
of wider metal margins, the improved performance at Dolton and manufacturing
efficiencies gained as a result of the Company's process improvement initiatives
such as higher plant yields and increased press productivity.
Selling, general and administrative expenses decreased 16.7% from $5.4
million in the first quarter of 1997 to $4.5 million in the same period of 1998.
This decrease was primarily due to reduced selling expenses as a result of the
lower shipments discussed above. For the six months ended June 30, 1998 selling,
general and administrative expenses were $8.7 million, a decrease of 7.4% from
$9.4 million for the six months ended June 30, 1997. This decrease was due to a
reduction in selling expenses as a result of the lower volume in the six month
period ended June 30, 1998.
During the first quarter of 1998, the Company recorded a pre-tax
nonrecurring gain of $3.0 million related to the sale of the Company's vinyl
extrusion operations. The gain is net of any expenses related to the negotiation
and completion of the sales agreement.
Operating profit for the quarter ended June 30, 1998 increased 14% to
$5.7 million from $5.0 million for the same quarter in 1997. For the six months
ended June 30, 1998 operating profit was $13.6 million compared to $7.1 million
for the same period in 1997. Excluding the nonrecurring item, operating income
for the six months ended June 30, 1998 was $10.6 million. The increases were
primarily a result of the factors discussed above.
Net interest expense for the second quarter and first six months of
1998 was slightly lower than the same periods in 1997. The decrease was due to
capitalization of interest for the Ahoskie, North Carolina expansion project in
1998 and an increase in average cash available for investment in 1998.
For the quarter and six months ended June 30, 1998, net income was $2.1
million and $5.5 million, respectively, compared to $1.5 million for the quarter
and six month period ended June 30, 1997. Income taxes were provided for at the
Company's estimated effective annual rate. This rate differs from the federal
statutory rate primarily due to non-deductible goodwill and state taxes.
FINANCIAL CONDITION; LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of funds are cash on hand, cash flow
from operations and borrowings under a $40 million revolving credit facility
with a syndicate of banks. There were no borrowings and $3.4 million of letters
of credit outstanding under the revolving credit facility as of June 30, 1998.
As a result, availability under the revolving credit facility was $36.6 million
as of June 30, 1998.
10
<PAGE> 11
Working capital at June 30, 1998 was $48.0 million compared to $41.1
million at December 31, 1997. This increase was principally due to cash
generated from the sale of the vinyl extrusion operations in January 1998.
Cash flow from investing activities includes $13.2 million of proceeds
from the sale of the Company's vinyl extrusion operation. Capital expenditures
totaled $8.2 million for the first six months of 1998 compared to $3.0 million
in the same period of 1997. The Company intends to incur capital spending of
approximately $7.8 million for the remainder of 1998. The Company is making
these expenditures to purchase, modernize or upgrade production equipment and to
maintain facilities. The costs of these capital projects, which would normally
be funded out of the Company's operating cash flow and borrowings, if necessary,
under the revolving credit facility, are being funded in the near term with
proceeds from the sale of the vinyl extrusion operation. In addition, the
Company expects to receive proceeds of approximately $6.0 million during the
third quarter from an industrial revenue bond issue related to the Ahoskie,
North Carolina expansion, although no assurance can be given that the revenue
bond issue will be completed.
Long-term debt consisted of $85.0 million of 10% Senior Notes due 2001
at June 30, 1998 and December 31, 1997. The Senior Notes became callable on
March 15, 1998. The Company is considering alternatives with respect to the
Senior Notes including a potential refinancing of the Senior Notes. There can be
no assurance, however, when or under what terms the Company will pursue such a
refinancing. The Company has no scheduled principal amortization requirements
with respect to any of its debt until 2000.
On July 22, 1998, the Company commenced the Offer to purchase up to
1,000,000 shares of its Common Stock at a price not in excess of $12.00 nor less
than $9.00 per share. If the Company purchases 1,000,000 shares of its Common
Stock pursuant to the Offer at a price of $12.00 per share, the Company expects
that it will incur aggregate costs, including fees and expenses attributable to
the Offer, of approximately $12.5 million. At the time of the purchase of shares
pursuant to the Offer, the Company expects that available cash will be reduced
by several million dollars below the cash available at June 30, 1998 due to
seasonal working capital needs. Consequently, the Company may finance payment of
a portion of the costs of the Offer through borrowings under its revolving
credit facility. The balance of the costs will be paid from available cash.
The Company believes that its cash flow from operations and available
sources of borrowings will be sufficient to finance its anticipated cash
requirements, including the Offer, at least until the expiration date of the
Company's revolving credit facility in 2000, at which time the Company would
expect to renew or replace that facility.
RISK MANAGEMENT
In the normal course of business, the Company enters into forward fixed
price arrangements with certain of its customers. The aluminum cost component of
the forward sales contracts is typically fixed for the duration of the
contracts. In order to hedge its exposure to aluminum price volatility under
these forward sales contracts, the Company may enter into aluminum futures
contracts based on the scheduled deliveries of product. The Company is exposed
to losses in the event of non-performance by the counterparties to these
agreements. However, the Company only uses recognized brokerage firms for the
purchase of aluminum futures contracts and does not anticipate non-performance
by these counterparties. Gains and losses on aluminum futures contracts are
deferred and recognized as product is shipped in satisfaction of the hedged
sales contracts.
At June 30, 1998, the Company was a party to aluminum futures contracts
with a nominal value of $11.0 million. These aluminum futures contracts cover
approximately 16.6 million pounds of aluminum at prices expected to be settled
financially in cash as they reach their respective settlement dates. As of June
30, 1998, the nominal value of the aluminum futures contracts was approximately
$716,000 greater than market value.
11
<PAGE> 12
CAUTIONARY STATEMENT
Statements contained in this Management's Discussion and Analysis of
Financial Condition and Results of Operations that are not historical facts,
including, but not limited to, the third and fourth paragraphs of the section
titled "Overview", the third, fifth and sixth paragraphs of the section entitled
"Financial Condition; Liquidity and Capital Resources" and the first paragraph
of the section entitled "Risk Management", concerning anticipated events are
forward-looking statements as such term is used under the Private Securities
Litigation Reform Act of 1995. Future events, including the Company's
performance, may be affected by many factors, including those discussed below,
that may cause actual events to differ materially from events 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 materially 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
(including, among others, Alcoa, which recently acquired Alumax one of the
Company's principal competitors); developments with respect to contingencies
such as environmental matters and litigation; the impact on variable costs of
changes in labor 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; changes in financial markets and interest rates and the availability
of capital at an acceptable cost; 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; whether the Company's computer systems will be
successfully updated to eliminate the "year 2000" issue, and at what cost, and
whether and to what extent the Company's customer and supplier relationships are
affected by this issue; whether the restructuring of the Company's Dolton,
Illinois facility in 1997 will produce the cost savings and profitability
improvements planned by management; and the Company's ability to integrate and
operate acquired facilities on a profitable basis. For further information see
the section titled "Cautionary Statement" in Part I, Item 1 of the Company's
annual report on Form 10-K for the year ended December 31, 1997.
12
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders of Easco, Inc. was held on May 8,
1998. At the Annual Meeting, stockholders voted on and approved two proposals.
Those proposals are stated below, together with information concerning the votes
cast.
1. Election of three directors to hold office for a term of three years.
Directors elected were Samuel H. Smith, Jr., Gene E. Little and Kim A.
Marvin.
<TABLE>
<CAPTION>
Samuel H. Smith, Jr. Gene E. Little Kim A. Marvin
-------------------- -------------- -------------
<S> <C> <C> <C>
Shares For 8,183,856 8,184,856 8,156,484
Shares Withheld 8,238 7,238 35,610
Total 8,192,094 8,192,094 8,192,094
</TABLE>
Other directors continuing their terms for 1998 are: Norman E. Wells, Jr.,
Theodore C. Rogers, Lawrence W. Ward, Jr., Raymond E. Ross and Robert J. Klein.
2. Ratification of the appointment of Deloitte & Touche, LLP as independent
auditors of the Company for the fiscal year ending December 31, 1998.
<TABLE>
<S> <C>
Shares For 8,183,024
Shares Against 5,170
Shares Abstain 3,900
---------
Total 8,192,094
</TABLE>
ITEM 5. OTHER INFORMATION
On May 8, 1998, the Board of Directors of the Company amended and
restated the Company's By-laws. The Amended and Restated By-laws include, among
other things, a provision requiring advance notice to the Company of nominations
of persons for election to the Board of Directors or other proposals by the
Company's stockholders to be presented at any annual or special meeting. A copy
of the Amended and Restated By-laws of the Company is attached hereto as Exhibit
3.2 and incorporated herein by reference.
Proposals of stockholders not intended for inclusion in the Company's
1999 Proxy Statement must be received in writing by the Secretary of the Company
prior to March 9, 1999 in order to preclude the Company's use of its
discretionary proxy voting authority when the proposal is raised at the 1999
Annual Meeting of Stockholders.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits
3.2 Amended and Restated By-laws of Easco, Inc.
11.1 Computation of earnings per share for the three months ended
June 30, 1998 and June 30, 1997.
27 Financial Data Schedule
(b) Reports on Form 8-K
None
13
<PAGE> 14
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 thereunto duly authorized.
EASCO, INC.
August 10, 1998 /s/ Terry D. Smith
----------------------------------------
Terry D. Smith
Executive Vice President and Chief Financial Officer
Secretary and Treasurer
(Principal Accounting Officer duly authorized
to sign on behalf of the Registrant)
14
<PAGE> 1
Exhibit 3.2 Amended and Restated Bylaws of Easco, Inc.
<PAGE> 2
AMENDED AND RESTATED BY-LAWS
EASCO, INC.
ARTICLE I.
STOCKHOLDERS
------------
Section 1. Annual Meeting.
---------------
An annual meeting of the stockholders, for the election of
directors to succeed those whose terms expire and for the transaction of such
other business as may properly come before the meeting, shall be held at such
place, on such date, and at such time as the Board of Directors shall each year
fix, which date shall be within thirteen months subsequent to the later of the
date of incorporation or the last annual meeting of stockholders.
Section 2. Special Meetings.
-----------------
Special meetings of the stockholders, for any purpose or
purposes prescribed in the notice of the meeting, may be called by the Board of
Directors or the Chairman of the Board of Directors and shall be held at such
place, on such date, and at such time as they or he or she shall fix.
Section 3. Notice of Meetings.
-------------------
Written notice of the place, date, and time of all meetings of
the stockholders shall be given, not less than ten nor more than sixty days
before the date on which the meeting is to be held, to each stockholder entitled
to vote at such meeting, except as otherwise provided herein or required by law
(meaning, here and hereinafter, as required from time to time by the General
Corporation Law of the State of Delaware or the Certificate of Incorporation of
the Corporation).
When a meeting is adjourned to another place, date or time,
written notice need not be given of the adjourned meeting if the place, date and
time thereof are announced at the meeting at which the adjournment is taken;
provided, however, that if the date of any adjourned meeting is more than thirty
days after the date for which the meeting was originally noticed, or if a new
record date is fixed for the adjourned meeting, written notice of the place,
date, and time of the adjourned meeting shall be given in conformity herewith.
At any adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
Section 4. Quorum.
-------
At any meeting of the stockholders, the holders of a majority
of all of the shares of the stock entitled to vote at the meeting, present in
person or by proxy, shall constitute a quorum for all purposes, unless or except
to the extent that the presence of a larger number may be required by law.
If a quorum shall fail to attend any meeting, the chairman of
the meeting or the holders of a majority of the shares of stock entitled to vote
who are present, in person or by proxy, may adjourn the meeting to another
place, date, or time.
If a notice of any adjourned special meeting of stockholders
is sent to all stockholders entitled to vote thereat, stating that it will be
held with those present constituting a quorum, then except as otherwise required
by law, those present at such adjourned meeting shall constitute a quorum, and
all matters shall be determined by a majority of the votes cast at such meeting.
Section 5. Organization.
-------------
The Chairman of the Board of Directors or, in his or her
absence, such person as the Board of Directors may have designated or, in the
absence of such a person, the President of the Corporation or, in his or her
absence, such person as may be chosen by the holders of a majority of the shares
entitled to vote who are present, in person or by proxy, shall call to order any
meeting of the stockholders and act as chairperson of the meeting. In the
<PAGE> 3
absence of the Secretary of the Corporation, the secretary of the meeting shall
be such person as the chairperson appoints.
Section 6. Conduct of Business.
--------------------
The chairperson of any meeting of stockholders shall determine
the order of business and the procedure at the meeting, including such
regulation of the manner of voting and the conduct of discussion as seem to him
or her in order.
Section 7. Proxies and Voting.
-------------------
At any meeting of the stockholders, every stockholder entitled
to vote may vote in person or by proxy authorized by an instrument in writing
filed in accordance with the procedure established for the meeting.
Each stockholder shall have one vote for every share of stock
entitled to vote which is registered in his or her name on the record date for
the meeting, except as otherwise provided herein or required by law.
All voting, including on the election of directors but
excepting where otherwise required by law, may be by a voice vote; provided,
however, that upon demand therefore by a stockholder entitled to vote or his or
her proxy, a stock vote shall be taken. Every stock vote shall be taken by
ballots, each of which shall state the name of the stockholder or proxy voting
and such other information as may be required under the procedure established
for the meeting. Every vote taken by ballots shall be counted by an inspector or
inspectors appointed by the chairperson of the meeting.
All elections shall be determined by a plurality of the votes
cast, and except as otherwise required by law, all other matters shall be
determined by a majority of the votes cast.
Section 8. Stock List.
-----------
A complete list of stockholders entitled to vote at any
meeting of stockholders, arranged in alphabetical order for each class of stock
and showing the address of each such stockholder and the number of shares
registered in his or her name, shall be open to the examination of any such
stockholder, for any person germane to the meeting, during ordinary business
hours for a period of at least ten (10) days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or if not so specified, at the place
where the meeting is to be held.
The stock list shall also be kept at the place of the meeting
during the whole time thereof and shall be open to the examination of any such
stockholder who is present. This list shall presumptively determine the identity
of the stockholders entitled to vote at the meeting and the number of shares
held by each of them.
Section 9. Notice of Stockholder Business and Nominations.
-----------------------------------------------
(A) Annual Meetings of Stockholders. (1) Nominations of
persons for election to the Board of Directors of the Corporation and the
proposal of business to be considered by the stockholders may be made at an
annual meeting of stockholders (a) pursuant to the Corporation's notice of
meeting, (b) by or at the direction of the Board of Directors or (c) by any
stockholder of the Corporation who was a stockholder of record at the time of
giving of notice provided for in this By-law, who is entitled to vote at the
meeting and who complies with the notice procedures set forth in this By-law.
(2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (c) of paragraph
(A)(1) of this by-law, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation and such other business must
otherwise be a proper matter for stockholder action. To be timely, a
stockholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on the
60th day nor earlier than the close of business on the 90th day prior to the
first anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is more than 30 days
before or more than 60 days after such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the close of
business on the 90th
<PAGE> 4
day prior to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made by
the Corporation. In no event shall the public announcement of an adjournment of
an annual meeting commence a new time period for the giving of a stockholder's
notice as described above. Such stockholder's notice shall set forth (a) as to
each person whom the stockholder proposes to nominate for election or
re-election as a director all information relating to such person that is
required to be disclosed in solicitations of proxies for election of directors
in an election contest, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Rule 14a-11 thereunder (including such person's written
consent to being named in the proxy statement as a nominee and to serving as a
director if elected); (b) as to any other business that the stockholder proposes
to bring before the meeting, a brief description of the business desired to be
brought before the meeting, the reasons for conducting such business at the
meeting and any material interest in such business of such stockholder and the
beneficial owner, if any, on whose behalf the proposal is made; and (c) as to
the stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the Corporation's books, and of such beneficial
owner and (ii) the class and number of shares of the Corporation which are owned
beneficially and of record by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of
paragraph (A)(2) of this by-law to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement by the Corporation naming all of
the nominees for director or specifying the size of the increased Board of
Directors at least 70 days prior to the first anniversary of the preceding
year's annual meeting, a stockholder's notice required by this by-law shall also
be considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Corporation.
(B) Special Meetings of Stockholders. Only such business shall
be conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting. Nominations
of persons for election to the Board of Directors may be made at a special
meeting of stockholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this by-law, who shall be entitled to vote at the meeting and
who complies with the notice procedures set forth in this by-law. In the event
the Corporation calls a special meeting of stockholders for the purpose of
electing one or more directors to the Board of Directors, any such stockholder
may nominate a person or persons (as the case may be), for election to such
position(s) as specified in the Corporation's notice of meeting, if the
stockholder's notice required by paragraph (A)(2) of this by-law shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the close of business on the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement of an adjournment of a special meeting
commence a new time period for the giving of a stockholder's notice as described
above.
(C) General. (1) Only such persons who are nominated in
accordance with the procedures set forth in this by-law shall be eligible to
serve as directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this by-law. Except as otherwise provided by law,
the Chairman of the meeting shall have the power and duty to determine whether a
nomination or any business proposed to be brought before the meeting was made or
proposed, as the case may be, in accordance with the procedures set forth in
this by-law and, if any proposed nomination or business is not in compliance
with this by-law, to declare that such defective proposal or nomination shall be
disregarded.
(2) For purposes of this by-law, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
<PAGE> 5
(3) Notwithstanding the foregoing provisions of this by-law, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this by-law. Nothing in this by-law shall be deemed to affect any
rights (i) of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under
specified circumstances.
ARTICLE II.
BOARD OF DIRECTORS
------------------
Section 1. Number and Term of Office.
--------------------------
The number of directors who shall constitute the whole board
shall be such number as the Board of Directors shall at the time have
designated, except that in the absence of any such designation, such number
shall be one (1). Each director shall be elected for a term of one year and
until his or her successor is elected and qualified, except as otherwise
provided in the Certificate of Incorporation or required by law.
Whenever the authorized number of directors is increased
between annual meetings of the stockholders, a majority of the directors then in
office shall have the power to elect such new directors for the balance of a
term and until their successors are elected and qualified. Any decrease in the
authorized number of directors shall not become effective until the expiration
of the term of the directors then in office unless, at the time of such
decrease, there shall be vacancies on the board which are being eliminated by
the decrease.
Section 2. Vacancies.
----------
If the office of any director becomes vacant by reason of
death, registration, disqualification, removal or other cause, a majority of the
directors remaining in office, although less than a quorum, may elect a
successor for the unexpired term and until his or her successor is elected and
qualified.
Section 3. Regular Meetings.
-----------------
Regular meetings of the Board of Directors shall be held at
such place or places, on such date or dates, and at such time or times as shall
have been established by the Board of Directors and publicized among all
directors. A notice of each regular meeting shall not be required.
Section 4. Special Meetings.
-----------------
Special meetings of the Board of Directors may be called by
the Chairman, by one-third of the directors then in office (rounded up to the
nearest whole number) or by the President and shall be held at such place, on
such date, and at such time as he, she or they shall fix. Notice of any special
meeting of directors shall be given to each director at his business or
residence in writing by hand delivery, first-class or overnight mail or courier
service, telegram or facsimile transmission, or orally by telephone. If mailed
by first-class mail, such notice shall be deemed adequately delivered when
deposited in the United States mails so addressed, with postage thereon prepaid,
at least five (5) days before such meeting. If by telegram, overnight mail or
courier service, such notice shall be deemed adequately delivered when the
telegram is delivered to the telegraph company or the notice is delivered to the
overnight mail or courier service company at least twenty-four (24) hours before
such meeting. If by facsimile transmission, such notice shall be deemed
adequately delivered when the notice is transmitted at least twelve (12) hours
before such meeting. If by telephone or by hand delivery, the notice shall be
given at least twelve (12) hours prior to the time set for the meeting. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the Board of Directors need be specified in the notice of such
meeting, except for amendments to these by-laws, as provided under Article VIII.
A meeting may be held at any time without notice if all the directors are
present or if those not present waive notice of the meeting in accordance with
Section 2 of Article VI of these by-laws.
Section 5. Quorum.
-------
<PAGE> 6
At any meeting of the Board of Directors, a majority of the
total number of the whole Board shall constitute a quorum for all purposes. If a
quorum shall fail to attend any meeting, a majority of those present may adjourn
the meeting to another place, date, or time, without further notice or waiver
thereof.
Section 6. Participation in Meetings by Conference Telephone.
--------------------------------------------------
Members of the Board of Directors, or of any committee
thereof, may participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other and such participation
shall constitute presence in person at such meeting.
Section 7. Conduct of Business.
--------------------
At any meeting of the Board of Directors, business shall be
transacted in such order and manner as the Board may from time to time
determine, and all matters shall be determined by the vote of a majority of the
directors present, except as otherwise provided herein or required by law.
Action may be taken by the Board of Directors without a meeting if all members
thereof consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board of Directors.
Section 8. Powers.
-------
The Board of Directors may, except as otherwise required by
law, exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation, including, without limiting the generality
of the foregoing, the unqualified power:
(1) To declare dividends from time to time in
accordance with law;
(2) To purchase or otherwise acquire any property,
rights or privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance,
in such form as it may determine, of written obligations of every kind,
negotiable or non-negotiable, secured or unsecured, and to do all things
necessary in connection therewith;
(4) To remove any officer of the Corporation with or
without cause, and from time to time to devolve the powers and duties of any
officer upon any other person for the time being;
(5) To confer upon any officer of the Corporation the
power to appoint, remove and suspend subordinate officers, employees and agents;
(6) To adopt from time to time such stock, option,
stock purchase, bonus or other compensation plans for directors, officers,
employees and agents of the Corporation and its subsidiaries as it may
determine;
(7) To adopt from time to time such insurance,
retirement, and other benefit plans for directors, officers, employees and
agents of the Corporation and its subsidiaries as it may determine; and
(8) To adopt from time to time regulations, not
inconsistent with these by-laws, for the management of the Corporation's
business and affairs.
Section 9. Compensation of Directors.
--------------------------
Directors, as such, may receive, pursuant to resolution of the
Board of Directors, fixed fees and other compensation for their services as
directors, including, without limitation, their services as members of
committees of the Board of Directors.
Section 10. Chairman.
---------
<PAGE> 7
The Board of Directors may appoint from among its members a
Chairman, who, unless otherwise determined by the Board, shall if present act as
chairman of each meeting of the stockholders and the Board of Directors.
ARTICLE III.
COMMITTEES
----------
Section 1. Committees of the Board of Directors.
-------------------------------------
The Board of Directors, by a vote of a majority of the whole
Board, may from time to time designate committees of the Board, with such
lawfully delegable powers and duties as it thereby confers, to serve at the
pleasure of the Board and shall, for those committees and any others provided
for herein, elect a director or directors to serve as the member or members,
designating, if it desires, other directors as alternate members who may replace
any absent or disqualified member at any meeting of the committee. Any committee
so designated may exercise the power and authority of the Board of Directors to
declare a dividend or to authorize the issuance of stock if the resolution which
designates the committee or a supplemental resolution of the Board of Directors
shall so provide. In the absence or disqualification of any member of any
committee and any alternate member in his place, the member or members of the
committee present at the meeting and not disqualified from voting, whether or
not he or she or they constitute a quorum, may by unanimous vote appoint another
member of the Board of Directors to act at the meeting in the place of the
absent or disqualified member.
Section 2. Conduct of Business.
--------------------
Each committee may determine the procedural rules for meeting
and conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third of the members shall constitute
a quorum unless the committee shall consist of one or two members, in which
event one member shall constitute a quorum; and all matters shall be determined
by a majority vote of the members present. Action may be taken by any committee
without a meeting if all members thereof consent thereto in writing, and the
writing or writings are filed with the minutes of the proceedings of such
committee.
ARTICLE IV.
OFFICERS
--------
Section 1. Generally.
----------
The officers of the Corporation shall consist of a President,
one or more Vice Presidents, a Secretary, a Treasurer and such other officers as
may from time to time be appointed by the Board of Directors. Officers shall be
elected by the Board of Directors, which shall consider that subject at its
first meeting after every annual meeting of stockholders. Each officer shall
hold office until his or her successor is elected and qualified or until his or
her earlier resignation or removal. The President shall be a member of the Board
of Directors. Any number of offices may be held by the same person.
Section 2. President.
----------
The President shall be the chief executive officer of the
Corporation. Subject to the provisions of these by-laws and to the direction of
the Board of Directors, he or she shall have the responsibility for the general
management and control of the business and affairs of the Corporation and shall
perform all duties and have all powers which are commonly incident to the office
of chief executive or which are delegated to him or her by the Board of
Directors. He or she shall have the power to sign all stock certificates,
contracts and other instruments of the Corporation which are authorized and
shall have general supervision and direction of all of the other officers,
employees and agents of the Corporation.
Section 3. Vice President.
---------------
<PAGE> 8
Each Vice President shall have such powers and duties as may
be delegated to him or her by the Board of Directors. One Vice President may be
designated by the Board to perform the duties and exercise the powers of the
President in the event of the President's absence or disability.
Section 4. Treasurer.
----------
The Treasurer shall have the responsibility for maintaining
the financial records of the Corporation shall have custody of all monies and
securities of the Corporation. He or she shall make such disbursements of the
funds of the Corporation as are authorized and shall render from time to time an
account of all such transactions and of the financial condition of the
Corporation. The Treasurer shall also perform such other duties as the Board of
Directors may from time to time prescribe.
Section 5. Secretary.
----------
The Secretary shall issue all authorized notices for, and
shall keep minutes of, all meetings of the stockholders and the Board of
Directors. He or she shall have charge of the corporate books and shall perform
such other duties as the Board of Directors may from time to time prescribe.
Section 6. Delegation of Authority.
------------------------
The Board of Directors may from time to time delegate the
powers or duties of any officer to any other officers or agents, notwithstanding
any provision hereof.
Section 7. Removal.
--------
Any officer of the Corporation may be removed at any time,
with or without cause, by the Board of Directors.
Section 8. Action with Respect to Securities
of Other Corporations.
---------------------------------
Unless otherwise directed by the Board of Directors, the
President or any officer of the Corporation authorized by the President shall
have power to vote and otherwise act on behalf of the Corporation, in person or
by proxy, at any meeting of stockholders of or with respect to any action of
stockholders of any other corporation in which this Corporation may hold
securities and otherwise to exercise any and all rights and powers which this
Corporation may posses by reason of its ownership of securities in such other
corporation.
ARTICLE V.
STOCK
-----
Section 1. Certificates of Stock.
----------------------
Each stockholder shall be entitled to a certificate signed by,
or in the name of the Corporation by, the President or a Vice President, and by
the Secretary or an Assistant Secretary, or the Treasurer or an Assistant
Treasurer, certifying the number of shares owned by him or her. Any of or all
the signatures on the certificate may be facsimile.
Section 2. Transfer of Stock.
------------------
Transfers of stock shall be made only upon the transfer books
of the Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 1 of Article V of these
by-laws, an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefor.
<PAGE> 9
Section 3. Record Date.
------------
The Board of Directors may fix a record date, which shall not
be more than sixty nor less than ten days before the date of any meeting of
stockholders, nor more than sixty days prior to the time for the other action
hereinafter described, as of which there shall be determined the stockholders
who are entitled: to notice of or to vote at any meeting of stockholders or any
adjournment thereof; to express consent to corporate action in writing without a
meeting; to receive payment of any dividend or other distribution or allotment
of any rights; or to exercise any rights with respect to any change, conversion
or exchange of stock or with respect to any other lawful action.
Section 4. Lost, Stolen or Destroyed Certificates.
---------------------------------------
In the event of the loss, theft or destruction of any
certificate of stock, another may be issued in its place pursuant to such
regulations as the Board of Directors may establish concerning proof of such
loss, theft or destruction and concerning the giving of a satisfactory bond or
bonds of indemnity.
Section 5. Regulations.
------------
The issue, transfer, conversion and registration of
certificates of stock shall be governed by such other regulations as the Board
of Directors may establish.
ARTICLE VI.
NOTICES
-------
Section 1. Notices.
--------
Except as otherwise specifically provided herein or required
by law, all notices required to be given to any stockholder, director, officer,
employee or agent shall be in writing and may in every instance be effectively
given by hand delivery to the recipient thereof, by depositing such notice in
the mails, postage paid, or by sending such notice by overnight mail or courier
guaranteeing delivery, by prepaid telegram or by facsimile. Any such notice
shall be addressed to such stockholder, director, officer, employee or agent at
his or her last known address as the same appears on the books of the
Corporation. Except as otherwise provided in these by-laws, the time when such
notice is received, if hand delivered, or dispatched, if delivered through the
mails or by courier, telegram or facsimile, shall be the time of the giving of
the notice.
Section 2. Waivers.
--------
A written waiver of any notice, signed by a stockholder,
director, officer, employee or agent, whether before or after the time of the
event for which notice is to be given, shall be deemed equivalent to the notice
required to be given to such stockholder, director, officer, employee or agent.
Neither the business nor the purpose of any meeting need be specified in such a
waiver. Attendance of a person at a meeting in person or by telephone shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened.
ARTICLE VII.
MISCELLANEOUS
-------------
Section 1. Facsimile Signatures.
---------------------
In addition to the provisions for use of facsimile signatures
elsewhere specifically authorized in these by-laws, facsimile signatures of any
officer or officers of the Corporation may be used whenever and as authorized by
the Board of Directors or a committee thereof.
Section 2. Corporate Seal.
---------------
The Board of Directors may provide a suitable seal, containing
the name of the Corporation, which seal shall be in the charge of the Secretary.
If and when so directed by the Board of Directors or a committee
<PAGE> 10
thereof, duplicates of the seal may be kept and used by the Treasurer or by an
Assistant Secretary or Assistant Treasurer.
Section 3. Reliance upon Books, Reports and Records.
-----------------------------------------
Each director, each member of any committee designated by the
Board of Directors, and each officer of the Corporation shall, in the
performance of his duties, be fully protected in relying in good faith upon the
books of account or other records of the Corporation, including reports made to
the Corporation by any of its officers, by an independent certified public
accountant, or by an appraiser selected with reasonable care.
Section 4. Fiscal Years.
-------------
The fiscal year of the Corporation shall be as fixed by the
Board of Directors.
ARTICLE VIII.
AMENDMENTS
----------
These by-laws may be amended or repealed by the Board of
Directors at any meeting or by the stockholders at any meeting.
This is to certify that the foregoing is a true and correct
copy of the By-laws of the corporation named in the title of these by-laws and
that such By-laws, as amended and restated, were duly adopted by the Board of
Directors of such corporation on May 8, 1998.
/s/ Terry Smith
------------------------------------------
Terry Smith, Secretary
<PAGE> 1
EXHIBIT 11.1
EASCO, INC.
CALCULATION OF NET INCOME PER COMMON SHARE
(NUMBERS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------------- ---------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1998 1997 1998 1997
----------- ----------- ---------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Weighted average shares of Common Stock
issued 12,476 12,415 12,463 12,415
Less: Treasury Stock outstanding 2,005 2,005 2,005 2,005
------- ------- ------- -------
Weighted average shares of Common Stock
issued and outstanding 10,471 10,410 10,458 10,410
Add: Weighted average shares of Common
Stock equivalents (stock options) 342 193 346 181
------- ------- ------- -------
Weighted average shares of Common
Stock and Common Stock equivalents
outstanding 10,813 10,603 10,804 10,591
======= ======= ======= =======
Net income $ 2,132 $ 1,493 $ 5,540 $ 1,490
======= ======= ======= =======
Basic earnings per share $ 0.20 $ 0.14 $ 0.53 $ 0.14
======= ======= ======= =======
Diluted earnings per share $ 0.20 $ 0.14 $ 0.51 $ 0.14
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 18,876
<SECURITIES> 0
<RECEIVABLES> 43,477
<ALLOWANCES> 1,698
<INVENTORY> 28,024
<CURRENT-ASSETS> 92,306
<PP&E> 112,948
<DEPRECIATION> 32,578
<TOTAL-ASSETS> 231,442
<CURRENT-LIABILITIES> 44,325
<BONDS> 85,000
0
0
<COMMON> 125
<OTHER-SE> 74,223
<TOTAL-LIABILITY-AND-EQUITY> 231,442
<SALES> 130,679
<TOTAL-REVENUES> 161,792
<CGS> 141,250
<TOTAL-COSTS> 151,197
<OTHER-EXPENSES> (3,041)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,090
<INCOME-PRETAX> 9,546
<INCOME-TAX> 4,006
<INCOME-CONTINUING> 5,540
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,540
<EPS-PRIMARY> 0.53
<EPS-DILUTED> 0.51
</TABLE>
