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THIS DOCUMENT IS A COPY OF THE 10-K FILED ON APRIL 1, 1996 PURSUANT TO A
RULE 201 TEMPORARY HARDSHIP EXEMPTION
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ________ to ________
Commission File Number 0-7469
TJ INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 82-0250992
- ------------------------- ------------------------------------
(State of incorporation) (IRS employer identification number)
200 East Mallard Drive, Boise, Idaho 83706
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (208) 364-3300
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Common Stock ($1.00 par value)
------------------------------
(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant, computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of the close of business on
March 15, 1996, was $202,560,000.
The number of outstanding shares of the registrant's common stock ($1.00 par
value), as of March 15, 1996 was 17,151,250.
Documents incorporated by reference: Listed hereunder the following documents
if incorporated by reference, and the Parts of this Form 10-K into which the
document is incorporated:
The registrant's definitive proxy statement to be dated on or after April 8,
1996, for use in connection with the annual meeting of stockholders to be held
on May 22, 1996, portions of which are incorporated by reference into Part III
of this Form 10-K.
EXHIBIT INDEX ON PAGES 24 AND 25
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PART I
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ITEM 1. BUSINESS
ITEM 1(a). GENERAL DEVELOPMENT OF BUSINESS
RECENT DEVELOPMENTS
1995 FINANCIAL RESULTS
The Company faced a challenging market opportunity in 1995. The impact
of lower housing starts and declining market prices for traditional lumber
products had a negative impact on the profitability of the engineered lumber
business. However, despite these adverse market conditions, volume sales
increased 3 percent in 1995.
On December 9, 1995, the Company reached an agreement with its window
operation partners to exit the Outlook Window Partnership. The Company also
adopted a plan for the sale of its remaining window investment. In
conjunction with these decisions, the Company recorded a $36,191,000 loss
from the disposal of the window operations. Final divestiture of the
remaining window operations is anticipated to occur before the end of 1996.
On a continuing operations basis, the Company experienced a decline in
sales of $11 million in 1995, compared to 1994. This 2 percent decline in sales
came in a period when North American housing starts declined 9 percent from the
prior year. Additionally, market prices for traditional solid-sawn lumber
products, which represent the primary competitor of engineered lumber products,
declined 16 percent from prior year levels. In response to these market
conditions, the Company lowered the selling prices on its core engineered
lumber products by an average of 7 percent. Unit volume sales of residential
products increased 13 percent per North American housing start.
Income from continuing operations suffered from the impact of the
start-up of the Company's Kentucky Timberstrand-Registration Mark- LSL and
West Virginia combination Parallam-Registration Mark- PSL and
Microllam-Registration Mark- LVL plants. These plants incurred start-up
losses totaling $12.8 million in 1995.
Net income from continuing operations declined $6.5 million to $9.7
million in 1995. A net loss, including the loss on disposal of discontinued
operations, of $29.9 million was incurred in 1995, compared with 1994 net
income of $8.8 million. Income from continuing operations per fully diluted
share decreased from $0.83 in 1994 to $0.48 in 1995. Net loss per fully
diluted share was $1.80 in 1995 compared to income of $.44 in 1994.
Fourth quarter, sales were $113.3 million compared to $112.9 million in
the corresponding period in 1994. Income from continuing operations improved
to $766,000, or $.03 per fully diluted share in the fourth quarter of 1995,
compared to a loss of $992,000, or $0.07 per fully diluted share in the
fourth quarter of 1994.
MARKET DEVELOPMENTS
The Company believes that its engineered lumber products offer
advantages in both performance and cost effectiveness over natural lumber and
that such products are achieving increased market acceptance in residential
construction. The Company's engineered lumber sales, per North American
housing start, increased from $102 per start in 1990 to $263 per start in
1995, an increase of 158%. During 1995, residential engineered lumber sales
per start increased 5% despite a significant decline in prices for wide
dimension lumber. Prices for 2" x 10" green 14' Douglas fir lumber declined
16% during 1995 from $475 per thousand board feet in January 1995 to $400 per
thousand board feet at the end of the year. Wide dimension lumber remains the
primary competition to the Company's engineered lumber products. The Company
has had uninterrupted growth in residential sales per housing start since it
introduced its residential products in the late sevenities.
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COMPANY STRATEGY
The Company's primary objective remains increasing market penetration for
its engineered lumber products. The Company believes that the fundamentals
which have driven the Company's growth over the past several years remain in
place, including the declining availability of high-quality, large diameter
timber, the superior performance of engineered lumber products, and the
Company's continuing transition to proprietary, lower-cost technologies. In
addition, the Company continues to enjoy strong brand name recognition,
supported by an extensive North American distribution network. Most
importantly, the Company believes there continues to be growth in market
acceptance of engineered lumber products.
The Company's strategy, which is composed of two key elements, is
focused on continuing its historic dominance in the engineered lumber
industry -- a dominance which is reflected in an estimated market share in
excess of 60 percent for engineered lumber products sold in North America.
The Company's strategy includes the following:
1. LOW-COST PROPRIETARY TECHNOLOGIES AND DOMINANT PRODUCTION CAPACITY. The
Company intends to pursue the advantages of its technological leadership. The
Company believes its technologies in engineered lumber enable it to use smaller
logs and to make more efficient use of wood fiber than the current sawmill
production of sawn structural lumber. The Company also intends to capitalize on
its proprietary technologies -- Parallam-Registered Trademark- PSL and
TimberStrand-Registered Trademark- LSL which allow the Company to manufacture
engineered lumber from non-traditional tree species such as aspen and poplar.
These species are lower in cost, more abundant and less environmentally
sensitive than traditional fir and pine species. The Company believes it is
well positioned to benefit from the increasing scarcity and associated higher
prices of the high quality, large diameter logs utilized to make the sawn
structural lumber products with which its products compete.
The Company has completed its recent capital expansion program and is in
the ramp-up phase towards full production of its new capacity. This expansion
is intended to enhance the Company's leading position in engineered lumber
products. Through the expansion of existing plants and the addition of the two
new production facilities, as described below, the Company believes it will
maintain its dominant 60 percent share of engineered lumber industry capacity.
The Company's capital expansion program includes:
HAZARD, KENTUCKY, TIMBERSTRAND-REGISTERED TRADEMARK- (LSL) PLANT. The
Company has completed construction and is now in the process of reaching full
production at a TimberStrand-Registered Trademark- LSL engineered lumber
production facility near Hazard, Kentucky. The plant began initial production
in the summer of 1995 and is expected to ramp up to practical capacity in the
second half of 1996. The manufacturing ramp up and product introduction
related to the start-up of the plant are behind original schedule, and
additional start-up losses will be incurred in the early months of 1996. The
technology enhancements made to the plant have performed as anticipated and
the Company believes that the long-term performance of the plant will meet
original expectations.
BUCKHANNON, WEST VIRGINIA, COMBINATION PLANT. The Company has completed
construction of a combination facility in Buckhannon, West Virginia, which
manufactures both Microllam-Registered Trademark- LVL and Parallam-Registered
Trademark- PSL. Initial production of LVL began in the summer of 1995 and PSL
production began in December of 1995. The combination of the Company's LVL and
PSL technologies into one manufacturing plant
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will increase operating efficiencies and improve raw material utilization
over traditional stand-alone LVL facilities. The combination plant has also
experienced delays in its start-up and will incur losses in the early months
of 1996, as the Parallam-Registered Trademark- PSL production ramps-up to
practical capacity in the third quarter of 1996.
ADDITIONAL FACILITIES. The Company also is examining potential sites for a
third TimberStrand-Registered Trademark- LSL plant, or an additional
combination LVL and PSL plant. Commitment to this third plant is contingent
upon continued market demand and acceptance of engineered lumber products.
The Company believes that the new housing construction industry is
undergoing a transition toward increased use of engineered lumber for
structural building material, as wide-dimension commodity lumber generally
increases in price and decreases in quality. The Company believes its expansion
plan is appropriate because its proprietary technology plants are expected to
give the Company a significant cost, wood source, and product breadth and
flexibility advantage which the Company believes will further strengthen its
market leading position. The Company also believes that its recent capital
expansion is prudent given the demand for these new technology products and
competition in these markets that the Company expects will develop over time.
However, there can be no assurance that the market for engineered lumber
products will increase or that markets for new products will develop.
The Company has financed its capital expansion program through several
sources, including a portion of the proceeds from the sale of common stock of
the Company in 1993, equity contributions by TJM's limited partner, the
proceeds of bond offerings in 1994 and 1995, and internally generated funds.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
2. A SYSTEM OF INTEGRATED COMPONENTS AND SERVICES AND VALUE ADDED
MARKETING. The Company intends to focus future marketing efforts on a system of
integrated components, rather than individual products. The Company is in the
process of introducing a complete structural system, called the
FrameWorks-Registered Trademark- System, which represents a complete system in
engineered lumber to build the entire structural frame of a home. The
FrameWorks-Registered Trademark System will include roof, wall, stair,
foundation and frame systems, to be delivered house by house, which the Company
believes will be a benefit to architects, builders, dealers and home buyers.
The Company believes it has a competitive advantage over other
engineered lumber producers in that it offers a complete support and service
system for its FrameWorks-Registered Trademark- system of products, including
(i) a system performance guarantee for the lifetime of the home; (ii) the
largest technical service force in the industry; (iii) engineering assistance
and performance recommendations; and (iv) computer-generated framing plans
and materials specifications from its TJ-Xpert-TM- software, which gives the
Company the ability to optimize design on a house-by-house basis.
The Company will continue its emphasis on a broad and aggressive North
American distribution network, emphasizing product availability and
just-in-time delivery and services. The Company believes that its partnership
with MacMillan Bloedel Limited and strategic alliances with Weyerhaeuser
Company and other regional distributors and retailers offer it a significant
advantage in the distribution of its engineered lumber products.
The Company believes that its extensive product lines, highly-skilled
service oriented sales force, and its extensive distribution network provide an
unparalleled
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opportunity to meet the modern demands of the building community and the
discriminating homeowner.
DIVESTITURE OF WINDOW BUSINESS
In December 1995, the Company reached an agreement with its partners
to exit the Outlook Window Partnership. Additionally, the Company adopted a
plan for the sale of its remaining window investment. The decision to divest
of the Company's window operations came as a result of several years of
unprofitable results, and the intention of the Company to focus all of its
resources on its engineered lumber business.
OTHER DEVELOPMENTS
In December 1995, the Company announced it would close its wood I-joist
manufacturing facility in Quebec City, Quebec. The closure, which is expected
to occur during the first quarter of 1996, resulted in approximately $1.6
million of nonrecurring write-offs, severance and other costs. The Company
will continue to actively market its full line of engineered lumber products
in the Quebec province through its existing sales and distribution channels.
These products will be manufactured by existing, more efficient, capacity at
other plants.
In the summer of 1995, the Company ceased production on its
Microllam-Registered Trademark- LVL presses at its Stayton, Oregon production
facility. The shutdown occurred due to the availability of more efficient
capacity at nearby facilities. The I-line production at Stayton was not
impacted by the shutdown, and raw materials for the I-line production will be
provided through existing Microllam-Registered Trademark- LVL production
capacity in the immediate area.
ITEM 1(b). FINANCIAL INFORMATION ABOUT THE COMPANY'S INDUSTRY SEGMENTS.
The Company announced its plan to divest of its window operations segment
in 1995. Accordingly, these operations have been reflected as discontinued
operations in the Company's financial statements for all years presented.
ITEM 1(c). NARRATIVE DESCRIPTION OF BUSINESS.
BUSINESS
GENERAL
The Company is the leading manufacturer and marketer of engineered lumber
products in the world. Engineered lumber products are high quality substitutes
for solid sawn structural lumber historically obtained from the logging of
older, large diameter trees. The Company utilizes advanced technology to
manufacture engineered lumber at fifteen facilities located in the United
States and Canada and estimates that its market share is in excess of 60
percent for engineered lumber products sold in North America.
STRATEGY. The Company's strategy in engineered lumber is to be a leading
manufacturer and marketer of value-added specialty building products to the
residential and light commercial construction industry. The Company believes it
is well positioned to benefit from the increasing scarcity and associated
higher prices of the high quality, large diameter logs historically utilized to
make the sawn structural lumber products with which the Company's products
compete. The Company's
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strategy is to increase the product acceptance of its engineered lumber
products and to strengthen its market leadership in these products. To increase
product acceptance, the Company's selling efforts highlight product advantages
including consistent quality, superior strength, relatively light weight and
ease of installation targeted at end users such as architects and contractors.
The Company seeks to strengthen its leading market position through (i)
competitive pricing; (ii) value-added marketing of technical support and
services; (iii) maintenance of industry production capacity dominance through
the construction of new engineered lumber manufacturing facilities, the
expansion of existing plants and the construction of other facilities as market
conditions warrant; (iv) the ongoing development of proprietary technologies
including processes utilizing relatively low-cost wood fiber from tree species,
such as aspen and yellow poplar, (v) the promotion of a complete system of
structural frame components rather than individual products; and (vi) reliance
on an extensive North American distribution network, including its partnership
with MacMillan Bloedel Limited and strategic alliances with the Weyerhaeuser
Company and other regional distributors and retailers.
TIMBER SUPPLY. In general, the supply of large diameter logs suitable for
wide dimension lumber has declined over the past several years in the Pacific
Northwest. In addition, environmental pressures have greatly slowed the harvest
of the remaining timber supply. Non-federally-owned timber has provided
approximately one half of the volume harvested annually in Oregon and
Washington. The Company believes that the combined effect of reduced supply and
more restrictive environmental regulation on federally-owned timberlands will
continue to reduce the volume of high grade timber available from this source.
Most of the Company's technologies can use wood fiber from trees that were
previously not suitable for the manufacture of structural lumber, and this
allows the Company to access the current inventory of wood fiber in North
America. This wood fiber differs from that in the past, primarily in the
species and size of the trees available for harvest. Much of today's potential
wood fiber supply consists of smaller second growth logs or is found in the
interior forests of Appalachia, the upper Midwest and the Canadian interior
forests. These forests include fast-growing, abundant and competitively priced
species of trees such as aspen and yellow poplar. These trees are not regarded
as sufficiently large, straight, or strong enough to be sawn into structural
lumber. The Company's new technologies now allow the use of these species for
high grade structural products. The Company will continue to use substantial
volumes of Douglas fir in the West and southern yellow pine wood fiber in the
South at its existing LVL plants from the available supply of mature trees or
smaller second growth logs.
Unlike many of its principal competitors in engineered lumber, the Company
does not currently own any timberlands or significant amounts of standing
timber. The Company buys its raw materials on contract both from small
independent suppliers and larger integrated forest products companies. In
addition, a portion of its wood raw materials are purchased on the spot market.
The reduced supplies could result in more volatile wood markets. The Company
has experienced and believes it may continue to experience volatility in its
quarter-to-quarter results due to raw material price volatility.
However, the Company believes it will be able to satisfy its needs for raw
materials and it is not currently aware of any potential shortages for its
longer-term requirements. The Company believes that it has significant
competitive advantages over companies marketing traditional sawn lumber
products in an environment of reduced timber supply because its engineered
lumber technologies are
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able to utilize non-traditional sources of wood fiber, which are both more
abundant and less expensive.
ENGINEERED LUMBER PRODUCTS
OVERVIEW. The Company believes that the new housing construction industry
is undergoing a transition in its use of structural building materials as sawn
structural lumber increases in price and decreases in quality. Engineered
lumber is enjoying increased market acceptance and is displacing sawn
structural lumber.
This transition is driven by the changing composition of the North
American timberlands, both in terms of regional log supply restrictions and the
type and size of logs currently available for use as raw material. The
availability of timber from federally-owned forests in the Pacific Northwest
has been greatly restricted, and the size of an average sawlog has decreased to
the point where it is often too small to produce significant quantities of high
grade, wide-dimension structural lumber.
TECHNOLOGY. The Company is the industry leader in developing and
commercializing proprietary technologies that enable the manufacture of
engineered lumber products from wood that has been regarded as not sufficiently
large, strong, straight, or free of defects to be sawn into structural lumber.
The following table outlines the principal features of the Company's
technologies:
<TABLE>
<CAPTION>
TECHNOLOGY RAW MATERIAL MAXIMUM SIZE PRODUCTION FACILITIES
- ---------- ------------ ------------ ---------------------
<S> <C> <C> <C>
Microllam-Registered Trademark- LVL Rectangular high-grade 80 feet long by Buckhannon, West Virginia
veneer 4 feet wide by Eugene, Oregon
3 1/2 inches thick Junction City, Oregon
Natchitoches, Louisiana
Valdosta, Georgia
Parallam-Registered Trademark- PSL Irregular veneer from 66 feet long by Buckhannon, West Virginia
first and last peels of 20 inches wide by Colbert, Georgia
the log 11 inches thick Vancouver, British Columbia
TimberStrand-Registered Trademark- LSL 12-inch long strands 48 feet long by Deerwood, Minnesota
8 feet wide by Hazard, Kentucky
5 1/2 inches thick
</TABLE>
The Company's three engineered lumber technologies are: laminated veneer
lumber, or LVL, the oldest and most commercialized of the technologies;
parallel strand lumber, or PSL, first introduced in the mid-1980's in Canada;
and laminated strand lumber, or LSL, a new technology introduced in the fall of
1991. Both PSL and LSL are proprietary to the Company, while equipment to
produce LVL is now available from several machinery manufacturers and is
utilized by an increasing number of forest products manufacturers. The Company
believes its LVL manufacturing process, however, enjoys several advantages
which make this process cost-competitive compared to the commercially available
alternatives.
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Although the Company has been issued and has applied for a number of
patents on its current processes, the Company believes that its technological
competitiveness also comes from its continued innovation and technical
expertise in this industry. The Company will, however, continue to assert its
legal rights wherever appropriate.
LAMINATED VENEER LUMBER (LVL): LVL uses thin sheets of veneer peeled from
a log. Each sheet is carefully dried and individually graded using ultrasonic
measurements to determine its strength characteristics. Sheets are then placed
in specific sequence and location within the product to maximize the stronger
veneer grades and randomize wood defects, such as knots. This engineered
configuration of veneers is then laminated with adhesives under heat and
pressure to form a piece of wood in widths of 24 inches or 48 inches,
thicknesses from 3/4 inches to 3-1/2 inches, and up to 80 feet in length.
PARALLEL STRAND LUMBER (PSL): This technology, which is proprietary to the
Company, starts with sheets of thin veneer peeled from a log. These are then
clipped into strands, which are up to eight feet long and 5/8 inches wide. The
ability to use this very narrow strand allows a significantly higher percentage
of the log to be manufactured into a value-added product. The strand is then
coated with adhesive. The next step in the process employs a pressing system in
which microwaves are used to cure the adhesives and form a large block, or
billet, of engineered lumber measuring up to 11 inches by 20 inches and 80 feet
long. The Company's PSL process is protected in the U.S. and in 15 other
countries. These patents provide protection through 2008.
The Company believes that the combination of the PSL and LVL technologies
in a single manufacturing facility, such as its Buckhannon, West Virginia
plant, will allow it to be among the most efficient converters of wood fiber to
a high value product. See "Recent Developments -- Company Strategy" above.
LAMINATED STRAND LUMBER (LSL): The Company's other proprietary engineered
lumber technology, LSL, begins with small-diameter, 8-foot-long logs such as
aspen and yellow poplar. These are species traditionally used in lower value
applications such as pulp logs, and are therefore substantially less expensive
than traditional sources of sawn lumber. These logs are flaked into strands
about 12 inches long, which are then treated with an adhesive. The strands are
put into a steam-injection press that significantly densifies the wood and
creates boards up to 48 feet long, up to 5-1/2 inches thick, and 8 feet wide.
The Company's LSL process is protected in the U.S. and in 24 other countries.
In addition, one patent is pending approval. These patents provide protection
through 2010.
The Company's future success will depend in large part on its ability to
achieve market acceptance of its LSL technology and to obtain cost reductions
in the implementation of this technology sufficient to provide the Company with
an adequate return. The Company's second TimberStrand-Registered Trademark-
plant near Hazard, Kentucky is still in the ramp-up phase. While there are no
technological problems with the start-up, the plant is approximately 4 months
behind the planned start-up schedule, and will incur additional start-up losses
in the early months of 1996. The Deerwood TimberStrand-Registered
Trademark- plant, the initial TimberStrand-Registered Trademark- plant, was a
positive contributor to profits during 1995. The Company is in the process of
developing and establishing market acceptance for a broad range of end products
that will utilize TimberStrand-Registered Trademark- engineered lumber. There
can be no assurance, however, that the Company will be able to achieve such
market acceptance or to lower manufacturing costs to a level sufficient to earn
an adequate return.
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PRODUCTS. The Company produces the broadest line of structural engineered
lumber building products in the industry, possesses certain exclusive product
technologies, and believes it enjoys a reputation for superior quality and
service. The table on the following page lists the Company's products, the
technology utilized, product size, and end use of such products.
TJ INTERNATIONAL ENGINEERED LUMBER PRODUCTS
<TABLE>
<CAPTION>
RESIDENTIAL PRODUCTS ENGINEERED LUMBER TECHNOLOGY PRODUCT SIZE END USE
- -------------------- ---------------------------- ------------ -------
<S> <C> <C> <C>
TJI-Registered Trademark- I-joists Microllam-Registered Trademark LVL on 9 1/2" to 16" deep Residential construction
the top and bottom with enhanced Width from 1 1/2" to 3 1/2" floor joists and roof
composite panel webs in the middle Up to 80' long trusses. Substitutes for
traditional 2x10 and
2x12 sawn lumber systems.
Rim joists TimberStrand-Registered Trademark- LSL 1 1/4" thick Residential construction
9 1/2" to 16" deep frames in perimeter of
17' to 48' long floor. Substitutes for
laterally ripped plywood
and/or 2x10 and 2x12 sawn
lumber.
Headers, beams, and columns Microllam-Registered Trademark- LVL 1 3/4" to 7 1/4" thick Residential construction.
Parallam-Registered Trademark- PSL 9 1/2" to 18" deep Ranges from main carrying
TimberStrand-Registered Trademark- LSL Up to 80' long beam in home to support
structures above a window
or door (header).
Substitutes for
traditional 2x10 and 2x12
sawn lumber.
<CAPTION>
COMMERCIAL PRODUCTS
- -------------------
<S> <C> <C> <C>
Open-web truss Microllam-Registered Trademark- or 14" to 114" deep Roof support structure
strength-rated lumber on the top and Spans lengths up in light commercial
bottom with tubular steel webs in the to 120' long buildings.
middle
TJI-Registered Trademark- roof Microllam-Registered Trademark- LVL 2.3" to 4.65" thick Roof structure for
truss series 4 1/2" to 37.1" deep smaller commercial
Up to 80' long buildings.
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<CAPTION>
INDUSTRIAL PRODUCTS
- -------------------
<S> <C> <C> <C>
Window and door core material TimberStrand-Registered Trademark- LSL Various Substitutes for finger
jointed Ponderosa pine
lumber in the manufacture
of wood windows
and doors.
Concrete forming and Microllam-Registered Trademark- LVL 1 1/2" to 5 1/4" thick Support members in the
shoring support members Parallam-Registered Trademark- PSL 6 1/2" to 20" deep structure into which
Up to 80' long wet concrete is poured
in both residential and
commercial buildings.
Substitutes for 2x10,
2x12, 4x4 and larger
sawn lumber and for
aluminum form support
systems.
Scaffold plank Microllam-Registered Trademark- LVL 1 1/2" to 2 1/2" thick Decking material in
9" to 11 3/4" wide scaffold frames.
Up to 80' long Substitutes for high
strength rated 2x6 and
2x8 sawn lumber.
</TABLE>
The Company continues to explore the development of new and improved
engineered lumber products which have superior performance and quality
characteristics relative to traditional sawn lumber. The Company currently has
a focused effort to develop further TimberStrand-Registered Trademark- LSL
products including a truss system that will allow the easy transformation of
wasted attic space into a bonus room, a product which substitutes for premium
length lumber (lengths over 20 feet), a fascia board which substitutes for 2x8,
rough sawn, clear spruce, and a solid floor joist targeted at the multi-family
construction market and other structural and industrial products, including rim
joists and long-length garage door headers. The Company is also in the process
of developing a series of I-joists utilizing TimberStrand-Registered Trademark-
LSL as the flange material.
The Company owns a number of registered and non-registered trademarks for
its promotional literature and engineered lumber products. The Company
believes that its engineered lumber trademarks, and in particular, its Silent
Floor-Registered Trademark- brand of residential structural products, have
achieved significant name recognition in the engineered lumber industry.
MARKETS. The Company's engineered lumber is sold primarily to three
markets. The largest market is the new construction residential housing market,
which includes single-family detached homes, apartments, condominiums,
townhouses, and manufactured housing. Industrial uses are another market and
include core components for the millwork and furniture industry, scaffold
plank, and concrete forming and shoring products. The third market is
light-commercial construction, which includes structures such as warehouses,
schools, gymnasiums, shopping centers, and low-rise office buildings.
SALES, MARKETING, AND DISTRIBUTION. The Company's engineered lumber
products are sold through its network of wholesale lumber distributors,
including MacMillan Bloedel Building Materials Distribution Centers, the
Weyerhaeuser Building Materials Customer Service Centers, and a number of other
distributors. In addition, the Company sells directly to stocking retail
lumber dealers in the United States and Canada. This distribution network
broadens the Company's market to include an extensive range of smaller lumber
dealers and outlets. The Company believes this
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distribution network gives it the broadest and deepest reach into the market of
any engineered lumber producer.
Since July 1993, the Company has operated under an arrangement with the
Weyerhaeuser Building Material Distribution Division, pursuant to which the
Weyerhaeuser customer service centers in the United States and Canada
distribute the Company's engineered lumber products. In addition, Weyerhaeuser
has assumed an expanded role as a supplier of veneer and oriented strand board
to certain of the Company's manufacturing facilities. The Company believes
this arrangement has enhanced the visibility and sales of its products.
The Company employs the engineered lumber industry's largest sales force
consisting of approximately 200 technical sales representatives who market the
Company's products directly to architects, project engineers, contractors,
developers, independent lumber dealers, national wholesale building material
suppliers, and industrial users. This enables the Company to better educate
and assist customers in the use of engineered lumber and simultaneously helps
create demand, further enabling the Company to differentiate its products from
those of its competitors.
The Company's products are supported by numerous advanced
computer-assisted software packages. For residential construction, the
Company's proprietary TJ-Xpert-TM- software, which is receiving increasing
acceptance by builders, translates a builder's blueprints into a complete
framing plan for a structural system using engineered lumber products.
The Company also has sales offices and representatives in Japan,
Australia, France, the United Kingdom, Germany, Belgium, and the Middle East.
While not currently comprising a significant portion of the Company's
business, the Company believes these markets present future growth
opportunities for its products.
COMPETITION. Sawn lumber products produced in traditional sawmills remain
the primary competition for the Company's engineered lumber products.
The Company's competition in the growing engineered lumber industry
includes five large competitors producing LVL in several plants across North
America, and eight that are manufacturing wood I-joists. Competition is
expected to continue to increase as a number of the Company's competitors,
including Louisiana-Pacific Corporation, Boise Cascade Corporation, and Georgia
Pacific Corporation have announced capacity expansion plans in the LVL and
I-joist business. In particular, competition may emerge or increase from
established wood products companies that now sell primarily traditional wood
products. A number of existing competitors such as Louisiana-Pacific
Corporation, Boise Cascade Corporation, Willamette Industries, Inc., and
Georgia-Pacific Corporation, own a significant portion of their own raw
materials and generally have greater financial resources than the Company.
The Company believes that the principal competitive factors in the market
for engineered lumber are price, performance, market acceptance, distribution
capabilities, and customer support. The Company has adopted a policy of
protecting market share by aggressively managing any price differentials
between its products and those of its engineered lumber competitors.
The Company believes its broader product line, based in part on its
proprietary technologies PSL and LSL lumber, provide an important competitive
advantage over its competition. In addition, the Company believes it enjoys a
leadership position in terms of brand name recognition, value-added services to
builders, an aggressive and
11
<PAGE>
broad distribution network and a wide selection of products which have received
building code approval in substantially all markets.
Other building materials, including steel, plastic, brick, and cement, are
alternative basic materials for construction. However, these materials may not
readily lend themselves to traditional residential framing methods or tools and
have certain inherent manufacturing and performance deficiencies.
BACKLOG
The Company's order backlog at December 30, 1995 was approximately $28
million compared to approximately $29.7 million at December 31, 1994. Some
portion of the current order backlog will probably not be filled due to
extended deliveries or cancellations. In addition, lead times of orders can
vary significantly from quarter to quarter and year to year. Accordingly, the
Company's backlog on a particular date may not be representative of the level
of future sales.
EMPLOYEES
As of December 30, 1995, the Company employed a total of approximately
2,700 employees in its engineered lumber operations. Additionally, another 800
employees were employed in the Company's remaining window operations.
ENVIRONMENTAL MATTERS
The Company is subject to various federal, state, provincial, and local
environmental laws and regulations, particularly relating to air and water
quality and the storage, handling, and disposal of various materials and
substances used in the Company's plants and processes. Permits are required
for certain of the Company's operations, and these permits are subject to
revocation, modification, and renewal by issuing authorities. Governmental
authorities have the power to enforce compliance with their regulations, and
violations may result in the payment of fines or the entry of injunctions, or
both.
The Company believes that it is in material compliance with existing
environmental laws and regulations, and that its expenditures in future years
for environmental compliance will not have a material adverse effect on its
operations.
12
<PAGE>
ITEM 1(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND
EXPORT SALES.
The Company operates manufacturing facilities in two countries, the United
States and Canada; and the majority of all sales are made domestically in those
countries. Financial information relating to foreign and domestic operations is
presented in Note 10 to the consolidated financial statements, page 46 of this
Report.
ITEM 2. PROPERTIES
Set forth below are the locations of the Company's manufacturing
facilities and the technology and/or products produced at such facilities.
<TABLE>
<CAPTION>
Engineered
Lumber
Technology Products
------------------ ----------------
Structural Products Manufacturing LVL PSL LSL I-Joists Open Web Trusses
- --------------------------------- --- --- --- -------- ----------------
<S> <C> <C> <C> <C> <C>
Buckhannon, West Virginia X X
Chino, California X
Claresholm, Alberta X X
Colbert, Georgia X
Deerwood, Minnesota X
Delaware, Ohio X
Eugene, Oregon X X
Hazard, Kentucky X
Hillsboro, Oregon X
Junction City, Oregon X
Natchitoches, Louisiana X X
Stayton, Oregon X
Valdosta, Georgia X X
Vancouver, British Columbia X
Elma, Washington * *
</TABLE>
* Produces veneer for LVL and PSL Lumber productions
The Company owns a Boise, Idaho, property of approximately 32 acres of
unimproved land. The Company's headquarters staff are located in a location in
Boise, Idaho.
The properties at Stayton, Oregon and Natchitoches, Louisiana are subject
to mortgages aggregating $16.4 million. Because the costs of these latter
properties are financed partially or wholly by Industrial Development Revenue
Bonds, record title to a significant portion of the land, buildings, and
equipment is being held by the bond-issuing authorities until the bonds are
retired.
13
<PAGE>
All properties in use or held for future use are considered suitable for
the Company's present and future needs and should have adequate capacity for
those needs.
ITEM 3. LEGAL PROCEEDINGS.
No material legal proceedings or claims are pending or known to the
Company other than several claims and suits for damages arising in the
ordinary conduct of business, resulting primarily from construction accidents
and often involving contractors and others as joint defendants.
Based on current facts and knowledge, all material liabilities under
any of the pending claims and suits would be covered under the Company's
liability insurance policies or are otherwise provided for in the Company's
financial statments.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
ITEM A. EXECUTIVE OFFICERS OF THE REGISTRANT.
Following is a schedule of names and certain information regarding all of
the executive officers of the Company, as of December 30, 1995, each of whose
term of office is one year.
Name and Age Office
------------ ------
Harold E. Thomas, age 69 Chairman of the Board,
TJ International, Inc.
Thomas H. Denig, age 49 President and Chief Executive Officer
TJ International, Inc.
Robert J. Dingman, age 54 Senior Vice President, Custom
Operations Group, Trus Joist
MacMillan
Randy W. Goruk, age 43 Senior Vice President, North American
Residential Operations Group, Trus
Joist MacMillan
Patrick D. Smith, age 49 Senior Vice President, Manufacturing
Operations Group, Trus Joist MacMillan
Valerie A. Heusinkveld, age 37 Vice President, Finance and Chief
Financial Officer,
TJ International, Inc.
Richard B. Drury, age 46 Secretary and Treasurer,
TJ International, Inc.
Jody B. Olson, age 48 Vice President, Corporate Development,
TJ International, Inc.
14
<PAGE>
Floyd J. Juday, age 52 Vice President, Marketing Services
James H. Ware, age 52 Vice President, Technology and
Engineering
Kevin R. Case, age 41 Senior Vice President, Industrial
Operations, Trus Joist MacMillan
(resigned effective January 31, 1996)
Harold E. Thomas holds a Bachelor of Science Degree in Forestry from the
University of Idaho, and worked in sales for lumber mills prior to 1960, when
Mr. Thomas and Arthur L. Troutner founded the Company. Mr. Thomas was first
elected to the Board of Directors in 1960 and was President of the Company from
1960 to 1971. Mr. Thomas has been Chairman since 1960 and served as Chief
Executive Officer from 1971 to 1975 and from 1979 to 1986.
Thomas H. Denig was elected President and Chief Executive Officer of TJ
International, Inc. on January 4, 1995. Mr. Denig was elected Senior Vice
President, Structural Operations in 1990. Mr. Denig was also elected President
and Chief Executive Officer of Trus Joist MacMillan in 1991, after having
served as President of Trus Joist Corporation since 1990. Mr. Denig joined the
Company in 1974 as a salesperson and has subsequently served as California
South Sales Manager, Microllam-Registered Trademark- Lumber Industrial Sales
Manager, National Sales Manager, Western Division Manager, Eastern Division
Manager and had been elected Vice President, Eastern Operations in 1985. Mr.
Denig is a graduate of Valparaiso University and served as a lieutenant in the
U.S. Marine Corp. before joining the Company.
Robert J. Dingman was appointed Sr. Vice President, Custom Operations
Group for Trus Joist MacMillan in October, 1995. Mr. Dingman joined the
Company in 1984 as the Southwest Division Manager and has subsequently served
as Division Manager, Microllam-Registration Mark- Lumber Operations and Sr.
Vice President, Western Operations. Before joining the Company, Mr. Dingman,
a graduate of St. Lawrence College, was Vice President and General Manager of
the Architectural Building Products Division of Koppers Company, Inc.
Randy W. Goruk was appointed Sr. Vice President, North American
Residential Operations Group for Trus Joist MacMillan, in October, 1995. Mr.
Goruk joined the Company in 1974 as a draftsperson and has subsequently
served as a salesperson, British Columbia Regional Sales Manager, Canadian
Division Sales Manager and Canadian Division Manager, Vice President,
Canadian Operations, Vice Presdient, Eastern Operations, and Sr. Vice
President, Canadian and Industrial Operations. Mr. Goruk is a graduate of the
Northern Alberta Institute of Technology and the University of British
Columbia.
Patrick D. Smith was appointed Senior Vice President, manufacturing
Operations Group for Trus Joist MacMillan in 1994. Mr. Smith joined the
Company in 1984 as the Plant Manager at the Natchitoches, Louisiana, plant
and has subsequently served as Plant Manager at the Colbert, Georgia, Plant,
General Manager of the Atlantic Coastal Division, and Vice President of
Construction. Before joining the Company, Mr. Smith, a graduate at Edinboro
University, began a 15 year career with the Koppers Company in their Forest
Products Division. He managed three different manufacturing plants and worked
in the industrial relations department.
Valerie A. Heusinkveld was elected Vice President of Finance and Chief
Financial Officer of TJ International, Inc., in 1992. Ms. Heusinkveld is an
honors graduate of the University of Idaho and a Certified Public Accountant.
Before being named CFO, Ms. Heusinkveld served as Vice President of Finance and
Treasurer for Trus Joist MacMillan. Ms. Heusinkveld has also served as
controller of Norco Windows Western Operations group and as a corporate
accountant and assistant to the Vice President of Finance. Ms. Heusinkveld
joined TJ International in 1989 after working for Arthur Andersen & Co.
Richard B. Drury was elected Secretary in 1985 and was elected to the
additional position of Treasurer in 1991. Mr. Drury is a graduate of Boise
State University and a Certified Public Accountant. Prior to joining the
Company in 1979, Mr. Drury gained audit and tax experience with Arthur Andersen
& Co.
Jody B. Olson was elected Vice President, Corporate Development in 1987.
In 1991, Mr. Olson was also elected Secretary of the Board of Trus Joist
MacMillan. Previous positions held by Mr. Olson were Microllam-Registered
Trademark- Lumber Division Controller; Microllam-Registered Trademark- Lumber
Industrial Salesperson and Sales Manager; General Manager of the Company's
former trucking subsidiary; Manager, Energy Systems; Assistant to the
President, Mergers and Acquisitions; and Manager, Corporate Development. Mr.
Olson, who joined the Company in 1979, is a graduate of the University of Idaho
and the Lewis and Clark Law School.
15
<PAGE>
Floyd J. Juday was appointed Vice President, Marketing for Trus Joist
MacMillan in February of 1996, upon joining the Company. Mr. Juday received
his undergraduate degree from Western Michigan University, and graduate degree
from Indiana University. Before joining the company, Mr. Juday spent 25 years
in the forest products industry with Georgia Pacific and MacMillan Bloedel in
various management positions.
James H. Ware was appointed Vice President, Engineering and Technology on
October 18, 1995. Dr. Ware joined the company as Vice President, Research and
Development, on February 27, 1995, after 17 years at Scott Paper Company where
his most recent positions were Worldwide Business Applications Leader and
Technology Manager for Worldwide Operations. Prior to his career with Scott,
Dr. Ware was a Research Scientist at Union Camp Corporation's Princeton
Research Center and a faculty member in the School of Engineering at North
Carolina State University. Dr. Ware holds BS, MS and Ph.D. degrees in
Engineering Mechanics from North Carolina State University.
Kevin R. Case resigned effective January 31, 1996.
16
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The approximate number of record holders of the Company's $1.00 par value
common stock at March 15, 1996, is set forth below:
(1) (2)
Title of Class Number of Record Holders
-------------- ------------------------
Common Stock, $1 par value 2,126
The remainder of this Item 5 is contained in the following sections of the
Report at the pages indicated below:
"Market and Dividend Information," on page 31 of this Report, to the
extent that said section discusses the principal market or markets on
which the Company's common stock is being traded; the range of high and
low quoted sales prices (closing) for each quarterly period during the
past two years; the source of such quotations; and the frequency and
amount of any dividends paid during the past two years with respect to
such common stock.
"Note 3 to the consolidated financial statements," page 41 of this Report,
to the extent that said Note describes any restriction on the Company's
present or future ability to pay such dividends.
ITEMS 6, 7, AND 8.
The information called by Items 6, 7 and 8, inclusive of Part II of this form,
is contained in the following sections of this Report at the pages indicated
below:
CAPTIONS AND PAGES OF THIS REPORT
ITEM 6 Selected Financial Data "Selected Financial Data" ......26
ITEM 7 Management's Discussion "Management's Discussion
and Analysis of Financial and Analysis" ..................27
Conditions and Results of
Operations
ITEM 8 Financial Statements and "Consolidated Financial
Supplementary Data Statements".....................33
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
17
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Identification of the Company's executive officers is included in Item A
(following Item 4) in Part I of this Form 10-K.
The balance of this Item 10 is included in the Company's definitive proxy
statement, under the caption "Election of Directors;" and is incorporated
herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
Item 11 is included in the Company's definitive proxy statement, under
the caption "Compensation of Executive Officers," including the sub-caption
"Executive Compensation Tables," and is incorporated herein by reference.
The subcaptions "Report of the Executive Compensation Committee on Executive
Compensation," and "Performance Graph," under the caption "Compensation of
Executive Officers" in the Company's definitive proxy statement are not
incorporated herein.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Item 12 is included in the Company's definitive proxy statement under the
caption "Security Ownership of Certain Beneficial Owners and Management;" and
is incorporated herein by reference.
For purposes of calculating the aggregate market value of the voting stock
held by non-affiliates as set forth on the cover page of this Form 10-K, the
Company has assumed that affiliates are those persons identified in the portion
of the definitive proxy statement identified above.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Item 13 is included in Note 9 to the consolidated financial statements,
pages 45 and 46 of this Report.
-Registered Trademark- - Microllam, Parallam, TimberStrand, TJI, The Silent
Floor, FrameWorks are registered trademarks of the
Company.
-TM- - TJ-Xpert is a trademark of the Company
18
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) Financial Statements
A list of the financial statements included herein is set forth in
the Index to Financial Statements, Schedules and Exhibits submitted
as a separate section of this Report.
(b) Reports on Form 8-K.
The Company filed a report dated December 21, 1995 on Form 8-K. In
that report, the Company disclosed, under "Item 2. Acquisition or
Disposition of Assets," that the Company has exited the Outlook
Window partnership and intends to divest of its remaining window
operations. See Item 1a of this Form 10-K.
(c) Exhibits. The following documents are filed as Exhibits to this Form
10-K:
(3) Limited Partnership Agreement between TJ International,
Inc. and MacMillan Bloedel of America, Inc. whereby the
Partnership was formed. This document was filed as an
exhibit to the Company's Form 8-K dated September 30, 1991
and is incorporated herein by reference.
Bylaws of Trus Joist Corporation (a Delaware corporation). This
document was filed as an exhibit to the Company's Form 10-K
for the fiscal year ended December 28, 1991 and is
incorporated herein by reference.
Amendment to Limited Partnership Agreement effective the
beginning of the Company's fiscal year 1993. This document
was filed as an exhibit to the Company's Form 10-Q for the
quarter ended September 26, 1992 and is incorporated herein
by reference.
Certificate of Ownership and Merger of TJ Merger Corporation
with and into Trus Joist Corporation, whereby the Company
changed its name from Trus Joist Corporation to TJ
International, Inc. effective September 16, 1988. This
document was filed as an exhibit to the Company's Form 10-K
for the fiscal year ended January 2, 1993 and is incorporated
herein by reference.
Amended Certificate of Incorporation of TJ International Inc.
This document was filed as an exhibit to the Company's Form
10-Q for the quarter ended July 2, 1994 and is incorporated
herein by reference.
19
<PAGE>
Partnership Formation and Contribution, Partnership Agreement,
and Liquidity Transaction Agreement among TJ International
Inc., SealRite Windows, Inc., and Oldach Window Corp. These
documents were filed as an exhibit to the Company's Form 8-K
dated October 11, 1994 and are incorporated herein by
reference.
Stock Purchase Agreement between TJ International, Inc. and
Andersen Corporation. These documents were filed as an
exhibit to the Company's Form 10-K for the fiscal year ended
December 31, 1994.
(4) Amended and Restated Credit Agreement, dated as of May 31,
1995. This document was filed as an exhibit to the Company's
Form 10-Q for the quarter ended July 1, 1995 and is
incorporate herein by reference.
1992 Stock Option Plan. This document was filed as an exhibit
to the Company's Form 10-K for the fiscal year ended January
2, 1993 and is incorporated herein by reference.
1993 Stock Option Plan. This document was filed as an exhibit
to the Company's Form 10-Q for the quarter ended July 3, 1993
and is incorporated herein by reference.
Amended and Restated Restricted Stock Plan for Non-Employee
Directors. This document was filed as an exhibit to the
Company's Form 10-Q for the quarter ended July 3, 1993 and is
incorporated herein by reference.
Rights Agreement, dated as of August 24, 1989, between TJ
International, Inc. and West One Bank. These documents were
filed as an exhibit to the Company's Form 10-K for the fiscal
year ended December 31, 1994.
1982 Incentive Stock Option Plan, as amended. These documents
were filed as an exhibit to the Company's Form 10-K for the
fiscal year ended December 31, 1994.
1985 Incentive Stock Option Plan, as amended. These documents
were filed as an exhibit to the Company's Form 10-K for the
fiscal year ended December 31, 1994.
1988 Stock Option Plan, as amended. These documents were filed
as an exhibit to the Company's Form 10-K for the fiscal year
ended December 31, 1994.
(10) Certificate of Designation, Preferences and Rights of ESOP
Convertible Preferred Stock; Stock Purchase Agreement; and
ESOP Term Note. These documents were filed as an exhibit to
the Company's Form 10-Q for the quarter ended September 29,
1990 and are incorporated herein by reference.
20
<PAGE>
Mortgage, Security Interest and Indenture of Trust; Lease
Agreement; Guaranty Agreement; Reimbursement Agreement;
Remarketing and Interest Services Agreement; pertaining to
Stayton, Oregon, plant. These documents were filed as
Exhibits to the Company's Form 10-K for the fiscal year ended
December 28, 1991 and are incorporated herein by reference.
Trust Indenture; Refunding Agreement; Remarketing Agreement;
Reimbursement Agreement; Pledge and Security Agreement;
pertaining to the Natchitoches, Louisiana, plant. These
documents were filed as Exhibits to the Company's Form 10-K
for the fiscal year ended January 2, 1993 and are
incorporated by reference.
Amendment to Reimbursement Agreement; Pledge and Security
Agreement; pertaining to the Natchitoches, Louisiana plant.
These documents were filed as exhibit to the Company's Form
10-K for the fiscal year ended January 1, 1994 and are
incorporated herein by reference.
Stock Purchase and Resale Agreement. These documents were filed
as an exhibit to the Company's Form 10-K for the fiscal year
ended January 1, 1994 and are incorporated herein by
reference.
Loan Agreement, Trust Indenture and Guaranty pertaining to
Hazard, Kentucky, plant. These documents were filed as an
exhibit to the Company's Form 10-Q for the quarter ended July
2, 1994 and are incorporated herein by reference.
Loan Agreement, Trust Indenture and Deed of Trust pertaining to
Twin Falls, Idaho, plant. This document was filed as an
exhibit to the Company's Form 10-K for the year ended
December 31, 1994.
Loan Agreement, Trust Indenture and Guaranty pertaining to the
Solid Waste Disposal Revenue bonds, Series 1995 is available
to the Commission upon request.
(11) Statement regarding computation of per share earnings.
The information required by Exhibit (11) is included under
the caption "Net Income Per Share" in Note 1 to the
consolidated financial statements, page 43 of this Report.
(22) Subsidiaries of the registrant.
21
<PAGE>
(24) Consent of independent public accountants to the
incorporation of their report dated February 2, 1995,
included in this Form 10-K for the year ended December 31,
1994 into TJ International, Inc.'s previously filed Form S-8
Registration Statement for the Trus Joist Corporation
Nonstatutory Stock Option Plan with 1982 Incentive Amendment,
as amended (Registration No. 2-79209), Form S-8 Registration
Statement for the Trus Joist Corporation Employee Stock
Ownership Plan (Registration No. 2-96065), Form S-8
Registration Statement for the Trus Joist Corporation
Associates' Stock Purchase Plan, as amended (Registration No.
2-96821), Form S-8 Registration Statement for the Trus Joist
Corporation Key Employees' 1982 Inventive Stock Option Plan
with Nonstatutory feature (Registration No. 2-96964), Form
S-8 Registration Statement for the Trus Joist Corporation
Employee Stock Ownership Plan (Registration No. 33-4704),
Form S-8 Registration Statement for the Trus Joist
Corporation Profit Sharing Plan, as amended (Registration No.
33-21870), Form S-8 Registration Statement for the Trus Joist
Corporation Key Employees' 1985 Incentive Stock Option Plan
with Nonstatutory Feature, as amended (Registration No.
33-22186) and Form S-8 Registration Statement for TJ
International, Inc. Key Employees' 1988 and 1992 Stock Option
Plans (Registration No. 33-54582).
(25) Powers of Attorney.
(27) Financial Data Schedule.
All other Exhibits are omitted since they are not applicable or
not required.
22
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) 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.
TJ INTERNATIONAL, INC., Registrant
By /s/ Thomas H. Denig
-------------------------------------------------------------------
Thomas H. Denig - President, Chief Executive Officer,
Director and Attorney-in-Fact for Directors listed below.
By /s/ Valerie A. Heusinkveld
-------------------------------------------------------------------
Valerie A. Heusinkveld - Vice President, Finance and Chief Financial
Officer
Each of the above signatures is affixed as of March 25, 1995. Those
Directors of TJ International, Inc. listed below executed powers of attorney
appointing Thomas H. Denig their attorney-in-fact, empowering him to sign this
report on their behalf.
Robert B. Findlay
Robert V. Hansberger
J. L. Scott
Harold E. Thomas
Arthur L. Troutner
J. Robert Tullis
Steven C. Wheelwright
William J. White
23
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS TO FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 30, 1995 Commission File Number 0-7469
TJ INTERNATIONAL, INC.
INDEX TO FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS
The following documents are filed as part of this Report: Pages in this Report
--------------------
(1) FINANCIAL STATEMENTS:
Selected Financial Data...........................................26
Management's Discussion and Analysis..............................27
Market and Dividend Information...................................31
Quarterly Financial Data (Unaudited)..............................32
Consolidated Balance Sheets at December 30, 1995,
December 31, 1994 and January 1, 1994..........................33
Consolidated Statements of Income for the three
years ended December 30, 1995..................................34
Consolidated Statements of Stockholders' Equity for the
three years ended December 30, 1995............................35
Consolidated Statements of Cash Flow for the three years
ended December 30, 1995........................................36
Notes to Consolidated Financial Statements........................37
Report of Independent Public Accountants..........................47
24
<PAGE>
The following documents are filed as part of this Report: Pages in this Report
--------------------
(3) EXHIBITS
(10) Certificate of Designation, Preferences and
Rights of ESOP Convertible Preferred Stock;
Stock Purchase Agreement; and ESOP Term Note.... *
(21) Subsidiaries of the Registrant..................Document 2
(24) Consent of Independent Public Accountants.......Document 3
(25) Powers of Attorney..............................Document 4
(27) Financial Data Schedules for the years ended
January 1, 1994, December 31, 1994, and
December 30, 1995...............................Document 5
All other schedules are omitted because they are not applicable or the required
information is shown in the Consolidated Financial Statements or Notes thereto.
* Previously filed, hard copy.
25
<PAGE>
SELECTED FINANCIAL DATA
The following table summarizes selected financial data for the five fiscal years
ended December 30, 1995, and should be read in conjunction with the more
detailed Consolidated Financial Statements included herein.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
EXPRESSED IN THOUSANDS EXCEPT PER SHARE FIGURES AND PERCENTAGES
1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales $484,845 $496,060 $436,602 $288,092 $201,880
Income from continuing operations 9,741 16,250 20,668 7,167 1,856
Net income (loss) (29,911) 8,848 12,528 7,311 (3,227)
Income from continuing operations per share
Primary 0.51 0.88 1.39 0.44 0.08
Fully diluted 0.48 0.83 1.29 0.44 0.06
Weighted average number of shares outstanding
Primary 17,132 17,354 14,267 13,418 12,942
Fully diluted 17,132 18,635 15,603 14,700 14,616
Cash dividends declared per common share $ 0.220 $ 0.220 $ 0.215 $ 0.210 $ 0.210
Working capital, excluding discontinued operations 53,355 98,042 109,503 21,821 5,791
Total assets 546,310 584,909 421,150 303,890 315,578
Long-term debt, excluding current portion 89,440 102,280 23,709 25,122 26,392
Stockholders' equity 210,144 240,558 234,741 129,333 126,894
Net book value per share 12.27 14.22 14.02 9.89 9.80
- ------------------------------------------------------------------------------------------------------------
</TABLE>
In 1995, net income includes ($36,191) for the loss on disposal of
discontinued operations. All prior periods have been restated for
discontinued operations; see footnotes for further discussion. In 1992, net
income and net income per share include income of $900 and $.07,
respectively, for the cumulative effect of adopting Statement No. 109,
"Accounting for Income Taxes."
26
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's operations are strongly influenced by the cyclicality and
seasonality of residential housing construction. This industry experiences
fluctuations resulting from a number of factors, including the state of the
economy, consumer confidence, credit availability, interest rates, and
weather patterns. Within the construction markets, engineered lumber sales
are influenced by the market for traditional solid-sawn lumber products, for
which the Company's products serve as a value-added alternative. The Company
is also affected by the seasonality of this industry, which is particularly
pronounced in the colder climates of the Northern, Mid-Western, and Rocky
Mountain regions of the United States and Canada. Consistent with the
construction industry as a whole, the Company's sales have historically
tended to be lowest in the first and fourth quarters and highest in the
second and third quarters of each year.
No other Company possesses the range of engineered lumber products, the
levels of service and technical support, or the second generation
technologies of TimberStrand-Registered Trademark- LSL laminated strand
lumber (LSL) or Parallam-Registered Trademark- PSL parallel strand lumber
(PSL). There are, however, a number of companies, including several large
forest products companies, that now produce look-alike wood I-joist and
laminated veneer lumber (LVL) products. Several of these companies have
announced capacity expansions. These look-alike products are manufactured
using processes similar to the Company's oldest generation technologies.
The Company believes its network of manufacturing plants and multiple
technologies position it as the low-cost producer of engineered lumber.
While competition helps expand the market for engineered wood products
including those manufactured by the Company, it may also make the existing
markets more price competitive. Traditional wide-dimension lumber, however,
remains the predominant structural framing material in residential
construction and is the primary competition of the Company's products.
Commodity lumber prices historically have been subject to high volatility,
and during periods of significant lumber price movements the Company's prices
have trended in the same direction.
The Company's engineered lumber products continue to gain market
acceptance as high-quality alternatives to traditional solid-sawn lumber
products. Through the Company's intensive marketing efforts, builders and
other wood users are increasingly recognizing the consistent quality,
superior strength, lighter weight, and ease of installation of engineered
lumber products. The Company believes that this trend will continue well
into the future.
At the end of 1994, the Company sold its wholly-owned Canadian window
businesses which were unprofitable in 1994 and 1993. In the fourth quarter
of 1994, the Company entered into the Outlook Window Partnership, by
combining the assets of Norco Windows, Inc. with those of SealRite Windows
and Oldach Windows. On December 9, 1995, due to continued operating losses in
the window segment of its business, the Company reached an agreement with its
partners to exit the Outlook Window Partnership. The Company has also
adopted a plan for the sale of its remaining window investment. This action
will allow the Company to focus its resources on its engineered lumber
business. All of the Company's window operations have been reflected in the
financial statements as Discontinued Operations for all years presented.
PARTNERSHIP
The Company and MacMillan Bloedel, through MBA, established TJM in
October of 1991. The Company has a 51 percent interest in TJM and serves as
general partner, with authority to manage and control the daily operations.
TJM's income and losses are allocated on a formula basis as agreed to by the
partners and in accordance with the TJM Partnership Agreement. These
formulas allocated 66 2/3 percent of TJM's income to the Company in 1993 and
51 percent in the years thereafter. Also, $7.0 million of the losses
associated with the start-up of the partnership's initial
TimberStrand-Registered Trademark- LSL plant in 1993 were allocated to
MacMillan Bloedel. As a result of these provisions, MacMillan Bloedel was
allocated a total of $10.1 million of income in 1993, $26.9 million of income
in 1994, and $16.4 million of income in 1995. These allocations are
reflected in the consolidated statements of income under "Minority interest
in Partnership" and also affect the partners' capital accounts in TJM.
27
<PAGE>
1995 COMPARED TO 1994
Sales for the year ended December 30, 1995, decreased by $11 million
from the prior year. The sales decrease of 2 percent came in a period when
North American housing starts declined 9 percent compared to 1994 levels.
Growing acceptance of the Company's engineered lumber products as a
substitute for commodity solid-sawn lumber helped increase sales volumes in a
market of declining housing starts. Price pressures due to depressed markets
for dimension lumber products had a downward impact on per unit sales prices.
Lumber prices for commodity lumber were down approximately 16 percent from
year-end 1994 levels. Despite the market pressures on sales price, sales of
residential products per North American housing start increased to $263 for
1995 from $250 for 1994.
The most significant volume increases came from the Company's two new
technology product lines, Parallam-Registered Trademark- PSL and
TimberStrand-Registered Trademark- LSL. These increases came from increased
sales penetration of existing engineered lumber products as well as new
products being introduced by the Company.
Sales for the fourth quarter of 1995 were $113.3 million, compared to
$112.9 million in the same period for 1994. The relatively flat sales
growth came from increases in volumes offset by declining selling prices.
The largest volume increases came from the Company's Parallam-Registered
Trademark- PSL product lines, however, all other product lines showed
increased volumes, as well. While lumber prices declined through 1995, the
fourth quarter showed the greatest decline of the year, with prices dropping
in excess of 10 percent from prices at the end of the third quarter. On
average, lumber prices were 14 percent below fourth quarter 1994 levels.
Gross margins for the year ended December 30, 1995, were 22.4 percent
compared with 26.1 percent in 1994. The decline was primarily due to the
start-up losses of $12.8 million at the Company's Kentucky
TimberStrand-Registered Trademark- LSL and West Virginia combination
Parallam-Registered Trademark- PSL and Microllam-Registered Trademark- LVL
plants. Both plants have experienced start-up delays that will carry over
into 1996 and will negatively impact financial results in the early months of
the year. Difficulties have come from mechanical areas; there have been no
fundamental problems with the technology or the production processes. In
addition, prices for the Company's products were reduced in response to
continuing softness in the lumber market.
Profitability at the Company's initial TimberStrand-Registered
Trademark- LSL plant in Deerwood, Minnesota, continued to improve through
1995. This resulted from a combination of improved production efficiencies
and improved sales volumes and prices for the products made at the
TimberStrand-Registered Trademark- LSL plant.
Selling expenses increased $1.3 million in 1995 compared to the prior
year. This increase reflects the Company's continuing investment in new
product development, as well as the cost of developing the European
marketplace. Administrative costs declined $2.3 million in 1995 from the
prior year. This decline is primarily the result of severance and other
accruals recorded in 1994 that were not repeated in 1995.
The Company incurred interest expense in 1995 due to the end of the
construction phase of the two new plants in the third and fourth quarters.
In 1995, interest payments of $6.5 million were capitalized in connection
with this construction. This compares to $4.8 million of capitalized interest
in 1994. Minority interest expense declined $10.4 million from 1994 due to
the decline in earnings at TJM.
The Company recorded a $36.2 million charge in connection with the
disposal of its window operations, which was partially completed in 1995.
The disposal of the remaining assets will likely occur within the first half
of 1996. The loss on disposal is net of a $23.7 million tax benefit related
to the loss.
Additionally, a net loss of $3.5 million was incurred on the operations
of the window segment during 1995. This is down from a $7.4 million
discontinued operating loss in 1994. The decrease is primarily due to the
disposal of the Company's Canadian window operations at the end of 1994,
which had contributed a $4.9 million loss in 1994. Additionally, a large
inventory adjustment associated with the closure of certain distribution
facilities in the eastern United States increased the loss in 1995.
28
<PAGE>
1994 COMPARED TO 1993
Sales for the year ended December 31, 1994, increased by $59 million or
13.6 percent from the corresponding period in 1993. The Company's sales
continued to outpace new housing construction, which posted an 11.2 percent
increase in North American housing starts. Growing acceptance of the
Company's engineered lumber products as a substitute for commodity sawn
lumber was the primary factor behind the increased sales. The Company's
three major product groups (industrial, light commercial, and residential)
all participated in the sales growth, with residential products contributing
the largest increase. Sales of residential products per North American
housing start increased to $250 for 1994 from $246 in 1993. This increase
was achieved despite declining lumber prices through most of 1994.
Sales for the fourth quarter of 1994 decreased 3.6 percent from the
comparative quarter of 1993. The sales decrease was due in part to reduced
product pricing in response to lower lumber prices. Also, sales in 1993's
fourth quarter surged in response to rapidly rising lumber prices. Operating
income in the fourth quarter of 1994 was significantly reduced compared to
the comparable period in 1993 due to a $3.2 million charge for a plant
closure, severance, and other items.
Gross margins for the year ended December 31, 1994, were 26.1 percent
compared to 26.6 percent for 1993. In the early part of 1994, strong pricing
in response to a historically high lumber market improved the Company's
margins. In the second half of the year, gross margins were pressured by
increases in raw material prices, particularly for oriented strand board used
in webs of the Company's I-joist products. A strong plywood market in the
South also led to increased prices for the veneer used in making
Microllam-Registered Trademark- LVL. Further pressuring margins was a market
environment where prices for the Company's products were reduced in response
to continuing softness in the lumber market.
During the first and second quarters, the Company's
TimberStrand-Registered Trademark- LSL plant was profitable at the gross
margin line. However, due to numerous complications following a dryer fire
in late June 1994, the plant was not profitable at the gross margin line for
the remainder of the year. Steady improvement was made toward regaining
operating efficiencies as the second half of the year progressed.
Selling expenses increased in absolute dollar terms but decreased from
10.7 percent to 10.1 percent as a percent of sales. The decrease was
primarily a result of the leverage in the existing sales and distribution
network, which has the capacity to handle significant volume increases with
the current infrastructure.
Operating income for 1994 was $50.4 million, up 16 percent over 1993,
even after a fourth quarter charge of $3.2 million related to plant closures,
severance, and other items. Despite positive gains in operating income,
operating income per share declined from $1.29 to $.83 on a fully diluted
basis. This drop can be attributed primarily to two dilutive factors. First,
in 1994, the Company received 51 percent of the earnings from TJM as compared
to 66 2/3 percent in 1993. Second, 3.5 million additional shares of common
stock were outstanding during 1994 as compared to most of 1993. The cash
proceeds from the stock sales were primarily invested in construction in
progress. The related assets are expected to begin contributing to the
Company's results in 1996.
The change in Minority interest in the Partnership from $10.1 million
during 1993 to $26.8 million in 1994 is reflective of the contractual
agreement to allocate 49 percent of TJM's income to MacMillan Bloedel (MB) in
1994 compared to the 33 1/3 percent in 1993 combined with the improved
operating results of TJM. In addition, $7 million of operating losses
incurred at the Company's TimberStrand-Registered Trademark- LSL facility in
Deerwood, Minnesota, were allocated to MB in 1993.
29
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Working capital decreased $45 million during 1995, to $53 million at
December 30, 1995. Cash provided from operating activities was $64.2 million
in 1995 compared to $72.9 million in 1994 and $38.9 million in 1993. Capital
expenditures were $105.7 million in 1995 compared to $152.4 million in 1994
and $35.4 million in 1993. Cash flows from financing activities were an
outflow of $26 million in 1995 compared to an inflow of $90 million in 1994
and $69 million in 1993. The financing sources in prior years resulted from
industrial revenue bond issuance, capital investment from MacMillan Bloedel,
and the 1993 stock issuance.
The Company's Board of Directors approved a capacity expansion program
in 1993 that included construction of the TimberStrand-Registered Trademark-
LSL plant near Hazard, Kentucky. Construction commenced in the fall of 1993
and was completed in the late summer of 1995. Total expenditures for the
facility were $103 million. In addition, the Company's Board of Directors
approved the construction of a combination plant that will manufacture
Microllam-Registered Trademark- LVL and Parallam-Registered Trademark- PSL
near Buckhannon, West Virginia. Construction of the combination plant
commenced in the second quarter of 1994 and was substantially completed in
the fall of 1995. The total construction cost expected for this facility is
$86 million. The Company is evaluating potential sites for a third
TimberStrand-Registered Trademark- LSL plant, or an additional combination
Microllam-Registered Trademark- LVL and Parallam-Registered Trademark- PSL
plant, but has not determined whether or when to proceed with construction.
During the second quarter of 1994, the Company issued $43.5 million of
industrial revenue bonds to finance construction of the Hazard, Kentucky,
TimberStrand-Registered Trademark- LSL plant. The bonds are due in a single
maturity in 2024, with interest payable at 7 percent.
MacMillan Bloedel's Board of Directors authorized a $49 million capital
contribution to the TJM Partnership in light of the capacity expansion
program. The entire amount was contributed by December 1994.
In the third quarter of 1995, the Company issued $22.5 million of
industrial revenue bonds to finance the construction of the Buckhannon, West
Virginia, combination Microllam-Registered Trademark- LVL and
Parallam-Registered Trademark- PSL plant. The bonds are due in a single
maturity in 2025, with interest payable semi-annually at 7 percent. Remaining
proceeds from these bonds are recorded as unexpended bond funds.
The Company believes that current cash balances, cash generated from
operations, remaining industrial revenue bond proceeds, and borrowing under a
$100 million Revolving Credit Facility will be sufficient to meet the
Company's capital expansion program approved by the Board of Directors and to
fund any remaining start-up losses at its Hazard and Buckhannon plants. The
Company also believes that additional or expanded lines of credit or
appropriate long-term capital can be obtained to fund other capital
requirements as they arise, or to fund an acquisition.
Substantially all of the Company's operating assets are held, and
revenue generated, by its partnership. The partnership regularly distributes
cash to the partners to fund the tax liabilities generated by the partnership
at the corporate level. All other distributions of cash by the partnership
are dependent on the affirmative votes of the representatives of the
minority partner on the partnership management board. Accordingly, there can
be no assurance that such distributions will be approved, and thereby be
available, for the payment of dividends or to fund other operations of the
Company.
30
<PAGE>
MARKET AND DIVIDEND INFORMATION
The Company's stock is traded on the over-the-counter market and is listed
with the National Association of Security Dealers Automated Quotations (NASDAQ)
under the symbol TJCO.
The high and low quoted sales prices (closing) and dividends paid per
common share for each quarterly period during 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Sales Price
---------------------------
High Low Dividends Paid
----------------------------------------------
<C> <S> <C> <C> <C>
1995 First $19 $16 $.05 1/2
Second 19 16 1/4 .05 1/2
Third 21 1/4 18 1/4 .05 1/2
Fourth 19 3/8 15 1/4 .05 1/2
- ----------------------------------------------------------------------------------------------
<CAPTION>
Sales Price
---------------------------
High Low Dividends Paid
----------------------------------------------
<C> <S> <C> <C> <C>
1994 First $32 1/8 $23 1/2 $.05 1/2
Second 25 1/2 18 3/4 .05 1/2
Third 21 17 1/2 .05 1/2
Fourth 18 1/2 14 3/4 .05 1/2
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
RESULTS OF QUARTERLY OPERATIONS
Unaudited results of operations by quarter for 1995, 1994, and 1993 are as
follows:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE FIGURES -------------------------------------------------
Quarter
-------------------------------------------------
First Second Third Fourth
-------------------------------------------------
<S> <C> <C> <C> <C>
1995
Sales $109,941 $123,882 $137,759 $113,263
Gross profit 22,884 29,939 30,688 25,147
Income from continuing operations 1,815 3,047 4,113 766
Loss from discontinued operations (1,301) (461) (1,699) --
Loss on disposal of discontinued operations -- -- -- (36,191)
Net income (loss) 514 2,586 2,414 (35,425)
Net income (loss) per share
Income from continuing operations
Primary 0.09 0.16 0.23 0.03
Fully diluted 0.09 0.15 0.21 0.03
Loss from discontinued operations
Primary (0.07) (0.02) (0.10) --
Fully diluted (0.07) (0.02) (0.09) --
Loss on disposal of discontinued operations
Primary -- -- -- (2.11)
Fully diluted -- -- -- (2.11)
Net income (loss)
Primary 0.02 0.14 0.13 (2.08)
Fully diluted 0.02 0.13 0.12 (2.08)
-------------------------------------------------
-------------------------------------------------
1994
Sales $118,163 $128,773 $136,266 $112,858
Gross profit 34,999 35,297 35,112 24,308
Income (loss) from continuing operations 6,335 5,418 5,489 (992)
Income (loss) from discontinued operations (3,776) 304 (1,284) (2,646)
Net income (loss) 2,559 5,722 4,205 (3,638)
Net income (loss) per share
Income (loss) from continuing operations
Primary 0.35 0.30 0.30 (0.07)
Fully diluted 0.33 0.28 0.29 (0.07)
Income (loss) from discontinued operations
Primary (0.22) 0.02 (0.07) (0.16)
Fully diluted (0.20) 0.02 (0.07) (0.16)
Net income (loss)
Primary 0.13 0.32 0.23 (0.23)
Fully diluted 0.13 0.30 0.22 (0.23)
-------------------------------------------------
-------------------------------------------------
1993
Sales $ 93,799 $106,529 $118,698 $117,576
Gross profit 16,419 28,562 35,865 35,293
Income from continuing operations 1,900 5,351 7,679 5,738
Loss from discontinued operations (2,473) (1,089) (1,847) (2,731)
Net income (loss) (573) 4,262 5,832 3,007
Net income (loss) per share
Income from continuing operations
Primary 0.12 0.38 0.55 0.34
Fully diluted 0.12 0.35 0.50 0.32
Loss from discontinued operations
Primary (0.18) (0.08) (0.14) (0.17)
Fully diluted (0.18) (0.08) (0.12) (0.16)
Net income (loss)
Primary (0.06) 0.30 0.41 0.17
Fully diluted (0.06) 0.27 0.38 0.16
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
Per share calculations are based on the average common shares outstanding for
each period presented. Accordingly, the total of the per share figures for the
quarters may not equal the per share figures reported for the year.
32
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
EXPRESSED IN THOUSANDS
DECEMBER 30, 1995 December 31, 1994 January 1, 1994
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 19,715 $ 57,764 $ 66,945
Marketable securities -- 16,084 7,004
Receivables, less allowances of $384, $585, and $317, respectively 28,754 38,462 38,376
Inventories 38,560 30,968 28,426
Deferred income taxes 11,607 5,803 7,281
Other 6,036 2,798 2,790
Net assets from discontinued operations -- 54,419 32,373
-----------------------------------------------
104,672 206,298 183,195
Property
Land and improvements 12,417 11,569 5,551
Buildings and leasehold improvements 98,497 79,740 62,512
Machinery, equipment, and other 442,965 364,033 243,326
Accumulated depreciation (149,069) (124,328) (103,476)
-----------------------------------------------
404,810 331,014 207,913
Goodwill 21,580 21,926 23,660
Unexpended bond funds 117 11,550 --
Deferred income taxes 5,088 -- --
Other assets 10,043 14,121 6,382
-----------------------------------------------
$ 546,310 $ 584,909 $ 421,150
-----------------------------------------------
-----------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $ 2,994 $ 6,358 $ 4,007
Current portion of long-term debt 340 570 1,891
Accounts payable 23,746 24,195 13,343
Accrued liabilities 24,237 22,714 22,078
Reserve for discontinued operations, net 5,755 -- --
-----------------------------------------------
57,072 53,837 41,319
Long-term debt, excluding current portion 89,440 102,280 23,709
Deferred income taxes -- 8,092 8,429
Other long-term liabilities 8,597 9,116 4,793
Minority interest in Partnership 181,057 171,026 108,159
Stockholders' equity
ESOP Convertible Preferred Stock, issued 1,185,933,
1,249,582, and 1,259,308 shares, respectively 13,992 14,744 14,859
Guaranteed ESOP benefit (10,382) (12,100) (12,390)
Common stock, issued 17,131,758,
16,915,536, and 16,738,069 shares, respectively 17,132 16,916 16,738
Paid-in capital 140,384 138,003 135,727
Retained earnings 51,808 86,355 82,139
Cumulative translation adjustment (2,790) (3,360) (2,332)
-----------------------------------------------
210,144 240,558 234,741
-----------------------------------------------
$ 546,310 $ 584,909 $ 421,150
-----------------------------------------------
-----------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
33
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
FOR THE THREE YEARS ENDED DECEMBER 30, 1995, DECEMBER 31, 1994, AND JANUARY 1, 1994
EXPRESSED IN THOUSANDS EXCEPT PER SHARE FIGURES
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sales $484,845 $496,060 $436,602
-----------------------------------
Costs and expenses
Cost of sales 376,187 366,344 320,463
Selling expenses 51,591 50,246 46,594
Administrative expenses 26,725 29,071 26,078
-----------------------------------
454,503 445,661 393,135
-----------------------------------
Income from operations 30,342 50,399 43,467
Investment income, net 2,209 2,282 449
Interest expense (631) -- (1,539)
Minority interest in Partnership (16,376) (26,848) (10,149)
-----------------------------------
Income from continuing operations before income taxes 15,544 25,833 32,228
Income taxes 5,803 9,583 11,560
-----------------------------------
Income from continuing operations 9,741 16,250 20,668
-----------------------------------
Discontinued operations
Loss from discontinued operations
(net of tax benefit of $2,171, $1,855, and $4,088
in 1995, 1994, and 1993, respectively) (3,461) (7,402) (8,140)
Loss on disposal of discontinued operations
(net of tax benefit of $23,718) (36,191) -- --
-----------------------------------
Net income (loss) $(29,911) $ 8,848 $ 12,528
-----------------------------------
-----------------------------------
Net income (loss) per share
Income from continuing operations
Primary $ 0.51 $ 0.88 $ 1.39
Fully diluted $ 0.48 $ 0.83 $ 1.29
Loss from discontinued operations
Primary (0.20) (0.42) (0.57)
Fully diluted (0.17) (0.39) (0.53)
Loss on disposal of discontinued operations
Primary (2.11) -- --
Fully diluted (2.11) -- --
-----------------------------------
Net income (loss)
Primary $ (1.80) $ 0.46 $ 0.82
Fully diluted $ (1.80) $ 0.44 $ 0.76
-----------------------------------
-----------------------------------
Weighted average number of common shares
outstanding during the periods, used in
earnings per share calculations
Primary 17,132 17,354 14,267
Fully diluted 17,132 18,635 15,603
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
34
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
- ---------------------------------------------------------------------------------------------------------------------------------
FOR THE THREE YEARS ENDED DECEMBER 30, 1995, DECEMBER 31, 1994, AND JANUARY 1, 1994
EXPRESSED IN THOUSANDS
Guaranteed Cumulative Common
Preferred ESOP Common Paid-in Retained Translation Stock in
Stock Benefit Stock Capital Earnings Adjustment Treasury
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 2, 1993 $14,932 $(13,462) $7,901 $44,181 $97,492 $(1,586) $
(20,125)
Net income -- -- -- -- 12,528 -- --
Cash dividends declared:
Common stock -- -- -- -- (3,029) -- --
Preferred stock, net of tax -- -- -- -- (896) -- --
Stock offering -- -- 3,500 90,950 -- -- --
Treasury stock cancellation -- -- (1,273) -- (17,344) -- 18,617
Stock split -- -- 6,612 -- (6,612) -- --
Stock options exercised, net of tax -- -- -- 297 -- -- 1,481
Other (73) 1,072 (2) 299 -- (746) 27
------------------------------------------------------------------------------------------
Balance, January 1, 1994 14,859 (12,390) 16,738 135,727 82,139 (2,332) 0
Net income -- -- -- -- 8,848 -- --
Cash dividends declared:
Common stock -- -- -- -- (3,712) -- --
Preferred stock, net of tax -- -- -- -- (920) -- --
Stock options exercised, net of tax -- -- -- 2,227 -- -- --
Other (115) 290 178 49 -- (1,028) --
------------------------------------------------------------------------------------------
Balance, December 31, 1994 14,744 (12,100) 16,916 138,003 86,355 (3,360) 0
Net loss -- -- -- -- (29,911) -- --
Cash dividends declared:
Common stock -- -- -- -- (3,754) -- --
Preferred stock, net of tax -- -- -- -- (882) -- --
Stock options exercised, net of tax -- -- -- 1,549 -- -- --
Other (752) 1,718 216 832 -- 570 --
------------------------------------------------------------------------------------------
Balance, December 30, 1995 $13,992 $ (10,382) $ 17,132 $140,384 $51,808 $(2,790) $ 0
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
35
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
- ---------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 30, 1995, DECEMBER 31, 1994, AND JANUARY 1, 1994
EXPRESSED IN THOUSANDS
This statement has not been restated for discounted operations 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income (loss) $ (29,911) $ 8,848 $ 12,528
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Discontinued operations charge 36,191 -- --
Depreciation and amortization 33,236 28,343 24,059
Deferred income taxes 4,433 813 1,744
Minority interest in Partnerships 16,376 27,003 10,149
Other, net 1,082 (89) 911
Change in working capital items:
Receivables 9,039 13,574 (17,567)
Inventories (1,401) (5,086) (8,844)
Other current assets 118 1,542 (864)
Accounts payable and accrued liabilities (766) 2,674 15,149
Other, net (4,205) (4,716) 1,626
-----------------------------------------------
Net cash provided from operating activities $ 64,192 $ 72,906 $ 38,891
- ----------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures $(105,672) $(152,363) $ (35,418)
Sales (purchases) of marketable securities 16,084 (9,080) (7,004)
Decrease (increase) in unexpended bond funds 11,433 (11,550) 632
Other, net 2,316 670 9
-----------------------------------------------
Net cash used in investing activities $ (75,839) $(172,323) $ (41,781)
- ----------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid on common stock $ (3,742) $ (3,702) $ (2,796)
Cash dividends paid on ESOP preferred stock (1,263) (1,331) (1,341)
Minority partners capital contributions -- 49,000 2,327
Minority partners tax distributions (7,522) (12,042) (4,455)
Net repayments under lines of credit (759) (254) (17,459)
Proceeds from issuance of long-term debt 22,500 78,500 --
Proceeds from stock offering -- -- 94,450
Principal payments of long-term debt (35,650) (18,919) (1,209)
Other, net 171 (1,176) (311)
-----------------------------------------------
Net cash provided (used) by financing activities $ (26,265) $ 90,076 $ 69,206
- ----------------------------------------------------------------------------------------------------------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS
Net increase (decrease) in cash and cash equivalents $ (37,912) $ (9,341) $ 66,316
Cash and cash equivalents at beginning of year 57,627 66,968 652
-----------------------------------------------
Cash and cash equivalents at end of year $ 19,715 $ 57,627 $ 66,968
- ----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest, net of amounts capitalized $ 634 $ -- $ 3,135
Income taxes (refunds), net $ 1,392 $ 6,463 $ (1,878)
- ----------------------------------------------------------------------------------------------------------------------
Cash balances of $(137) in 1994 and $23 in 1993 have been reflected in net assets from discontinued operations on the
balance sheet
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
36
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The consolidated financial statements include the accounts of the Company
and subsidiaries, including the Company's 51 percent interest in Trus Joist
MacMillan a Limited Partnership (TJM). All significant intercompany balances
and transactions have been eliminated. Certain components of the
accompanying balance sheets and statements of income require estimates made
by management. Actual results could differ from those estimates. In 1995,
the Company adopted Financial Accounting Standards Board (FASB) Statement
121, which establishes accounting rules for the impairment of long-lived
assets. In 1995, the FASB also issued Statement 123, "Accounting for Stock
Based Compensation." The Company does not intend to adopt the Statement, but
additional disclosures will be included in its 1996 financial statements, as
required by the Statement.
FISCAL YEAR
The Company's 52/53 week fiscal year ends on the Saturday closest to
December 31 of each year. The additional week, which occurs approximately
every fifth year, does not materially affect the comparability of operations
between years.
FOREIGN TRANSLATION
The accounts of the Company's Canadian subsidiaries are measured using the
Canadian dollar as functional currency. These financial statements are
translated into U.S. dollars using exchange rates in effect at year-end for
assets and liabilities and the average exchange rate during the period for
results of operations. The resulting translation adjustment is made directly
to the cumulative translation adjustment component of Stockholders' Equity.
CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES
The Company considers cash on hand, cash in banks, and all highly liquid
investments with maturities of three months or less when purchased to be cash
equivalents. These assets are recorded at cost, which approximates fair
value, and totaled $19,715,000 at December 30, 1995, $57,764,000 at December
31, 1994, and $66,945,000 at January 1, 1994.
Marketable securities include primarily tax-exempt preferred stocks and
municipal bonds. These securities are recorded at cost, which approximates
fair value based on quoted market prices.
INVENTORIES
Inventories are valued at the lower of cost or market and include
material, labor, and production overhead costs. Inventories consisted of the
following:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
EXPRESSED IN THOUSANDS
December 30, December 31, January 1,
1995 1994 1994
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Finished goods $25,882 $21,099 $17,816
Raw materials 14,657 15,131 14,224
----------------------------------------------------
40,539 36,230 32,040
Reduction to LIFO cost (1,979) (5,262) (3,614)
----------------------------------------------------
$38,560 $30,968 $28,426
- -----------------------------------------------------------------------------
</TABLE>
The last-in, first-out (LIFO) method is used in determining the cost of
lumber, veneer, Microllam-Registered Trademark- LVL, TJI-Registered
Trademark- joists, and open-web joists. Approximately 49 percent of total
inventories at the end of 1995, 53 percent at the end of 1994, and 65 percent
at the end of 1993 were valued using the LIFO method. The first-in,
first-out (FIFO) method is used to determine the cost of all other
inventories.
37
<PAGE>
PROPERTY
Property and equipment are recorded at cost. Additions, betterments, and
replacements of major units of property are capitalized. Maintenance,
repairs, and minor replacements are expensed as incurred and approximated
$20,377,000 in 1995, $17,931,000 in 1994, and $14,264,000 in 1993. The net
book value of property sold or retired is removed from the asset and related
depreciation accounts, and any resulting gain or loss is included in income.
The provision for depreciation on most Microllam-Registered Trademark-
LVL, Parallam-Registered Trademark- PSL, and TimberStrand-Registered
Trademark- LSL manufacturing equipment is computed on the units-of-production
method. Virtually all other property and equipment is depreciated on the
straight-line method. Estimated useful lives of the principal items of
property and equipment range from three to 30 years.
CAPITALIZED INTEREST
The Company capitalizes interest on qualifying assets. Interest expense
and income capitalized into property and equipment were as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
EXPRESSED IN THOUSANDS
1995 1994 1993
---------------------------------------------------
<S> <C> <C> <C>
Interest expense $6,838 $5,259 $255
Interest income 336 464 5
- -----------------------------------------------------------------------------
</TABLE>
RESEARCH AND DEVELOPMENT
Research and development costs are expensed as incurred. Research and
development costs charged to expense were approximately $2,262,000 in 1995,
$3,309,000 in 1994, and $2,758,000 in 1993.
RECLASSIFICATIONS
Certain reclassifications have been made, none of which affected net
income, to conform prior years' information to the current year's
presentation.
38
<PAGE>
NET INCOME PER SHARE
Primary net income (loss) per common share is based on net income (loss)
adjusted for preferred stock dividends and related tax benefits divided by
the weighted average number of common shares outstanding after giving effect
to stock options as common stock equivalents, if dilutive. Fully diluted net
income (loss) per common share assumes conversion of the ESOP convertible
preferred stock (ESOP preferred stock) into common stock at the beginning of
the year. Fully diluted net loss per share for 1995 is the same as primary
net loss per share since the effect of the assumed conversion of the ESOP
preferred stock is anti-dilutive. Primary and fully diluted net income
(loss) were calculated as follows:
PRIMARY AND FULLY DILUTED NET INCOME
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
EXPRESSED IN THOUSANDS
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net income from continuing operations $ 9,741 $16,250 $20,668
Preferred stock dividends, net of related tax benefits (899) (920) (896)
------------------------------------------
Primary net income from continuing operations 8,842 15,330 19,772
------------------------------------------
Loss from discontinued operations (3,461) (7,402) (8,140)
Loss from disposal of discontinued operations (36,191) -- --
------------------------------------------
Primary net income (loss) $(30,810) $ 7,928 $11,632
------------------------------------------
Net income from continuing operations $ 9,741 $16,250 $20,668
Additional ESOP contribution payable upon assumed
conversion of ESOP preferred stock, net of related tax benefits (677) (720) (721)
------------------------------------------
Fully diluted income from continuing operations 9,064 15,530 19,947
------------------------------------------
Loss from discontinued operations (3,461) (7,402) (8,140)
Loss from disposal of discontinued operations (36,191) -- --
------------------------------------------
Fully diluted net income (loss) $(30,588) $ 8,128 $11,807
------------------------------------------
Weighted average shares outstanding 17,132 -- --
Primary shares outstanding 17,473 17,354 14,267
Fully diluted shares outstanding 18,694 18,635 15,603
- -----------------------------------------------------------------------------------------------------------
</TABLE>
PARTNERSHIP
On September 29, 1991, the Company and MacMillan Bloedel of America, Inc.
(MBA), a wholly-owned subsidiary of MacMillan Bloedel Limited (MB), formed
TJM.
The Company contributed all of its North American engineered lumber
technology, manufacturing facilities, and its sales and marketing
organization for a 51 percent interest in TJM. MBA and MB contributed all of
their North American engineered lumber technology and manufacturing
facilities for a 49 percent interest in TJM. The Company, MBA, and MB also
contributed all patents and trademarks relating to their combined engineered
lumber business.
Goodwill recognized in the transaction is being amortized using the
straight-line method over 25 years, the period of expected benefit. As of
December 30, 1995, a total of $4,420,000 of this goodwill has been amortized.
Goodwill expense was $1,040,000 per year in 1995, 1994, and 1993.
39
<PAGE>
MINORITY INTEREST IN PARTNERSHIP
The Company has a 51 percent interest in TJM. Income and losses for 1993
are allocated on a formula basis as agreed to by the partners and in
accordance with the partnership agreements. In 1994 and 1995, income or
losses, including interest and taxes of the Partnership's Canadian
subsidiary, are allocated 51 percent to the Company and 49 percent to MBA.
As a result, the minority owner of the Partnership was allocated income of
$16,376,000 in 1995, $26,848,000 in 1994, and $10,149,000 in 1993. These
allocations are reflected as Minority interest in Partnership in the
consolidated statements of income. The minority partner's interest in the
Partnership's accumulated equity is included in the consolidated balance
sheet as Minority interest in Partnership. In addition, the partnership
agreement called for a favorable allocation to the Company of the benefits
arising from accelerated tax depreciation through the end of 1993.
2 DISCONTINUED OPERATIONS
On December 9, 1995, the Company reached an agreement with its window
operation partners to exit the Outlook Window Partnership. The Company also
adopted a plan for the sale of its remaining window investment. In
conjunction with these decisions, the Company recorded a $36,191,000 loss
from the disposal of the window operations. Final divestiture of the
remaining window operations is anticipated to occur before the end of 1996.
Effective December 31, 1994, the Company sold its eastern Canadian window
subsidiaries, Dashwood Industries, Ltd., and Laflamme and Frere, Ltd. These
operations were sold at approximately book value.
All of the Company's window operations have been reflected in the
financial statements as discontinued operations for all years presented, and
all footnote disclosures have been restated to exclude discontinued
operations, where practicable. All of the assets and liabilities of the
windows segment have been reclassified as either net assets from discontinued
operations or reserve for discontinued operations.
Sales from these discontinued operations were $95,569,000 in 1995,
$122,617,000 in 1994, and $114,330,000 in 1993. There have been no
allocations of corporate overhead or corporate interest expense to
discontinued operations in the accompanying financial statements.
The components of net assets (liabilities) from discontinued operations
included in the Consolidated Balance Sheets are as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
EXPRESSED IN THOUSANDS
END OF YEAR 1995 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Accounts receivable $ 6,921 $10,695 $ 7,333
Inventories 11,488 25,644 24,655
Property, plant,
and equipment 14,108 20,443 33,277
Costs in excess of fair
value of net
assets acquired -- 26,963 --
Accounts payable and
accrued liabilities (35,513) (8,853) (17,110)
Minority interest, debts,
and other liabilities (2,759) (20,473) (15,782)
-------------------------------------------------
Net assets (liabilities) $(5,755) $54,419 $32,373
- -----------------------------------------------------------------------------
</TABLE>
40
<PAGE>
3 DEBT
At year end, the Company has available unsecured, committed lines of
credit totaling $13,665,000 with foreign and domestic banks. The interest
rate on any loan, determined at the time of the borrowing, would not exceed
the lending bank's prevailing prime rate. At December 30, 1995, there was
$2,994,000 at 6.33 percent borrowed under these agreements. At December 31,
1994, and January 1, 1994, there was $6,358,000 at 6.54 percent and
$4,007,000 at 3.58 percent, respectively, borrowed under similar arrangements.
The Company has a $100 million Revolving Credit Facility (the "Credit
Facility") provided by a syndicate of banks. The Credit Facility provides
several interest rate options, none of which exceeds prime, and matures on
October 11, 1998. At December 30, 1995, there were no borrowings under this
facility.
During 1995, $22,500,000 of industrial revenue bonds were issued to
finance the construction of a combination Microllam-Registered Trademark-
LVL/Parallam-Registered Trademark- PSL manufacturing plant near Buckhannon,
West Virginia. These bonds have a fixed interest rate of 7.0 percent, provide
for semi-annual interest payments beginning January 15, 1996, with the
principal due in 2025 and are unsecured. During 1994, $43,500,000 of
industrial revenue bonds were issued to finance the construction of a
TimberStrand-Registered Trademark- LSL plant in Eastern Kentucky. These
bonds also have a fixed interest rate of 7.0 percent, provide for semi-annual
interest payments, with the principal due in 2024, and are unsecured.
All other industrial revenue bonds are secured by the property and
equipment acquired with the bond proceeds and any unexpended bond funds. At
December 30, 1995, the cost of such property and equipment was approximately
$24,400,000.
The scheduled payments of long-term debt are $340,000 in 1996, $365,000 in
1997, $395,000 in 1998, $420,000 in 1999, $10,450,000 in 2000, and
$77,810,000 thereafter. The Company's variable rate demand bonds are
supported by irrevocable Letters of Credit. These Letters of Credit,
together with the Company's revolving line of credit, allow the Company to
borrow for periods in excess of one year, if drawn upon to repay bondholders.
The debt agreements contain various customary financial covenants, all of
which the Company is in compliance with at December 30, 1995. Under the most
restrictive of these agreements, retained earnings available for cash
dividends at December 30, 1995, was $45,481,000. Debt is recorded at cost,
net of any discount or premium, which approximates fair value based on
borrowing rates currently available to the Company for debt with similar
terms and maturities.
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
LONG-TERM DEBT
- ----------------------------------------------------------------------------------------------------------------
EXPRESSED IN THOUSANDS
DECEMBER 30, 1995 December 31, 1994 January 1, 1994
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Borrowings under the Credit Facility $ -- $ 35,000 $ --
Industrial revenue bonds, 7.06% weighted average
interest rate during 1995, payable in varying
amounts through 2025 73,380 51,450 9,200
Industrial revenue variable rate demand bonds,
interest rates established weekly, 3.81% weighted
average during 1995, payable in varying amounts
through 2009 16,400 16,400 16,400
--------------------------------------------------
89,780 102,850 25,600
Less current portion (340) (570) (1,891)
--------------------------------------------------
$89,440 $102,280 $23,709
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
41
<PAGE>
4 ACCRUED LIABILITIES
Accrued liabilities consisted of the following:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
EXPRESSED IN THOUSANDS
DECEMBER 30, 1995 December 31, 1994 January 1, 1994
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Salaries, wages, and commissions $ 3,092 $ 2,310 $ 4,331
Retirement plans and other associate benefits 10,525 11,064 11,430
Other 10,620 9,340 6,317
--------------------------------------------
$24,237 $22,714 $22,078
--------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
5 INCOME TAXES
Income tax information for 1994 and 1993 has not been restated to exclude
discontinued operations. Income (loss) before income taxes and income taxes
(benefits)include the following:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
EXPRESSED IN THOUSANDS
1995 1994 1993
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Income (loss) before income taxes
U.S. $20,947 $23,249 $25,587
Canada (5,403) (6,673) (5,587)
---------------------------------
$15,544 $16,576 $20,000
---------------------------------
---------------------------------
Income taxes (benefits)
Current income taxes
U.S. federal $1,370 $5,957 $5,638
U.S. state -- 1,780 (78)
Canada -- (822) 168
---------------------------------
1,370 6,915 5,728
---------------------------------
Deferred income taxes
U.S. federal 5,452 659 1,453
U.S. state 993 (329) 1,565
Canada (2,012) 483 (1,274)
---------------------------------
4,433 813 1,744
---------------------------------
$5,803 $7,728 $7,472
---------------------------------
---------------------------------
- --------------------------------------------------------------------------
</TABLE>
The Company's effective income tax rate varied from the U.S. federal
statutory income tax rate for the following reasons:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
EXPRESSED IN THOUSANDS
1995 1994 1993
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. federal statutory income tax rate $5,440 35.0% 35.0% 35.0%
TJM tax depreciation allocation -- -- -- (6.6)
Reversal of excess tax reserves provided
in prior years (280) (1.8) (4.2) (2.0)
Foreign income (losses) at different rates (701) (4.5) 12.0 4.3
State income taxes, net of federal effect 1,024 6.6 5.7 4.8
Other items 320 2.0 (1.9) 1.9
---------------------------------------
Effective income tax rate $5,803 37.3% 46.6% 37.4%
---------------------------------------
---------------------------------------
</TABLE>
42
<PAGE>
Deferred income tax assets and liabilities have not been restated in the
accompanying financial statements for the discontinued operations. Deferred
income tax assets include $23,718,000 related to the loss on disposal of
discontinued operations. The deferred tax liabilities and assets included in
the consolidated balance sheets, computed under Statement No. 109, are
comprised of the following:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
EXPRESSED IN THOUSANDS
December 30, 1995 December 31, 1994 January 1, 1994
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tax in excess of book depreciation $(18,090) $(13,881) $(15,632)
Other (7,851) (2,655) (1,154)
--------------------------------------------------
Total deferred tax liabilities (25,941) (16,536) (16,786)
Reserves not yet deductible for tax purposes 1,352 6,686 6,538
Net operating loss carryforwards 5,652 2,408 5,220
Alternative minimum tax credit carryforward 5,436 4,106 3,997
Reserves and operating losses related to
discontinued operations (1995 only) 25,889 -- --
Other 4,307 2,249 1,928
--------------------------------------------------
Total deferred tax assets 42,636 15,449 17,683
Less valuation allowances --- (1,202) (2,045)
--------------------------------------------------
$16,695 $(2,289) $(1,148)
--------------------------------------------------
--------------------------------------------------
Deferred taxes, classified as:
Current assets $11,607 $5,803 $7,281
Long-term assets (liabilities) 5,088 (8,092) (8,429)
--------------------------------------------------
$16,695 $(2,289) $(1,148)
--------------------------------------------------
--------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
The Company's alternative minimum tax credits of $5,436,000 at December
30, 1995, are available indefinitely. Net operating loss carryforwards are
expected to be fully utilized based on forecasted conditions and various tax
planning strategies. The Company's federal income tax returns for 1990 and
1991 are currently under review by the Internal Revenue Service. The Company
believes that any income tax adjustments resulting from this review will not
have a material impact on the Company's financial condition.
6 RETIREMENT PLANS AND INCENTIVE BONUS PROGRAMS
Most of the Company's employees are covered under defined contribution
retirement plans and are also participants in the Company's Employee Stock
Ownership Plan (ESOP). Benefits under these plans are limited to each
individual's fund balances.
In September 1990, the ESOP borrowed $15 million at a 9 percent interest
rate from the Company. This term loan matures on March 31, 2011, and has no
prepayment penalties. Proceeds from the loan were used by the ESOP to
purchase 1,269,842 shares of newly issued ESOP preferred stock from the
Company. The ESOP preferred stock is described in Note 7.
In connection with the above transactions, the Company has guaranteed that
over the term of the loan, it will make sufficient contributions to the ESOP
to allow the ESOP to repay the loan to the Company. This guarantee has been
recorded as a Guaranteed ESOP benefit in Stockholders' Equity. The Company's
annual contributions to the ESOP are based on a formula. The contributions,
together with all dividends on the ESOP preferred shares, will be used by
the ESOP to make the necessary interest payments and any principal
prepayments. With each loan payment, a portion of the ESOP preferred stock is
released and allocated to the employees' accounts in the ESOP. The
Guaranteed ESOP benefit is amortized based on the shares allocated method of
calculating expense. The annual expense associated with the ESOP was
approximately $1,153,000 in 1995, $676,000 in 1994, and $995,000 in 1993.
43
<PAGE>
The Company matches certain contributions of participating associates to
its retirement plans. Contributions to these plans were approximately
$11,130,465 in 1995, $11,361,000 in 1994, and $7,560,381 in 1993, of which
approximately 57 percent, 57 percent, and 55 percent, respectively, resulted
from contributions made under the compensation reduction agreement provision
of the plans.
Substantially all of the Company's officers and key employees participate
in incentive bonus programs that are based on formulas or were discretionary.
Amounts charged to income under these programs were approximately $1,259,000
in 1995, $2,129,000 in 1994, and $2,824,000 in 1993.
7 STOCKHOLDERS' EQUITY
At December 30, 1995, there were 200,000,000 shares of common stock ($1.00
par value) and 10,000,000 shares of preferred stock ($1.00 par value)
authorized. In September 1990, the Company issued 1,269,842 shares of $1.00
par value ESOP preferred stock at $11.8125 per share (liquidation preference)
to the ESOP. Each share of the ESOP preferred stock is convertible into the
Company's common stock at the higher of the liquidation preference or the
fair market value of the underlying common stock. The Company has the option
to satisfy any conversion in cash, common stock, or any combination thereof.
The ESOP preferred stock has voting rights equal to one vote per share and is
entitled to preferential dividends of $1.065 per share each year. The ESOP
preferred stock is redeemable at the Company's option under certain
circumstances.
On August 26, 1993, the Company's Board of Directors declared a
two-for-one stock split in the form of a 100 percent stock dividend. On
October 1, 1993, one share of common stock was issued for each share
outstanding as of September 7, 1993. The stock split was recorded in
accordance with the declaration whereby retained earnings was charged and
common stock was credited with $6,612,094, representing the aggregate of the
par value of the shares issued. All per share information included in these
financial statements and notes is based on the increased number of shares of
common stock after giving retroactive effect to the stock split.
The Company's Board of Directors on August 26, 1993, also authorized the
retirement of 1,272,675 shares of treasury stock. The retirement of treasury
stock was recorded in accordance with the authorization whereby retained
earnings and common stock were charged $17,343,947 and $1,272,675,
respectively, and treasury stock was credited with $18,616,622, representing
the aggregate cost of the treasury stock.
In September 1990, the Company's Board of Directors authorized a program
to repurchase up to $15,000,000 of its own stock at market price. At
December 30, 1995, $2,935,000 of additional stock could be acquired under
this program.
In November 1993, the Company completed a public offering of 3,500,000
shares of common stock at $28.50 per share. The net proceeds of the stock
offering after deducting applicable issuance costs and expenses were
$94,450,000. The proceeds were used to repay $18,848,000 of short-term debt
under line of credit arrangements. The balance of the proceeds were to be
used for other general corporate purposes, including the Company's announced
capacity expansion in its engineered lumber business, working capital, and
acquisitions the Company reviews from time to time in the regular course of
business.
In 1989, the Company issued common stock purchase rights to each
stockholder. These rights generally become exercisable 10 days following the
public announcement of the acquisition by a person or group of 20 percent or
more of the Company's common stock or a tender offer being made for 30
percent or more of the common stock. With certain exceptions, if the Company
is thereafter involved in a merger or other business combination, or more
than 50 percent of the Company's assets or earning power is sold, the rights
permit each holder to purchase common stock of the acquiring company at 50
percent of its market value. If the rights are triggered and the Company is
the surviving corporation in a merger, the rights permit holders, other than
the person or group that triggered exercisability of the rights, to purchase
shares of the Company's common stock at a 50 percent discount from the then
current market value. The rights, which expire in September 1999, are
non-voting and may be redeemed by the Company at $.005 per right at any time
until 10 days following the date the rights are triggered. Under certain
circumstances, the Board of Directors may extend the redemption period beyond
the 10 days and may amend certain provisions of the rights plan. In
connection with these rights, the Board of Directors has reserved for
issuance the same number of shares as are outstanding at any point in time.
44
<PAGE>
The Company has five stock option plans in effect for officers and key
associates. At December 30, 1995, 1,101,144 shares were reserved for
issuance under these plans. Under the terms of these plans, which have been
approved by the Company's stockholders, incentive stock options may be issued
at an exercise price of not less than the fair market value of the stock on
date of grant and nonstatutory options may be issued at a $1.00 exercise
price. The outstanding options and exercise prices are adjusted to reflect
any stock splits and stock dividends. The incentive stock options become
exercisable three years after date of grant, and, depending upon Board of
Director determination at the time of grant, the nonstatutory options either
become exercisable three years after date of grant or in 20 percent annual
installments commencing five years after date of grant. All unexercised
options expire 10 years after date of grant.
At December 30, 1995, a total of 72,911 incentive stock options and
682,651 nonstatutory options were outstanding under the plans. The ability
to grant options under the existing plans expires at various dates to
February 2003.
For nonstatutory stock options, the excess of the fair market value over
the exercise price on date of grant is accrued ratably as compensation
expense from the date of grant to the exercisable date. No accounting
entries are made for incentive stock options until they are exercised. Stock
option transactions are summarized as follows (after giving retroactive
effect to the stock split):
STOCK OPTION TRANSACTIONS
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
1995 1994 1993
- -----------------------------------------------------------------------------
Number of Option Shares
Granted 98,400 107,900 136,250
Became exercisable 146,475 255,732 79,981
Exercised 178,418 177,406 110,046
Canceled 21,025 124,635 15,412
Outstanding at end of year 755,562 856,605 1,050,746
Exercisable at end of year 195,130 227,073 149,547
Option Price Range (per share)
Granted $ 1.00 $ 1.00 $ .50
Exercised .25-9.38 .25-9.38 .25-9.38
Outstanding at end of year .25-9.38 .25-9.38 .25-9.38
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
8 LEASES
Basic or minimum rental expenses for operating and month-to-month leases
amounted to $2,990,000 in 1995, $3,211,000 in 1994, and $3,134,000 in 1993.
The Company has various operating leases with initial or remaining terms
of more than one year. These leases have minimum lease payment requirements
of $2,559,000 in 1996, $1,972,000 in 1997, $1,667,000 in 1998, $1,230,000 in
1999, and $578,000 in 2000. In addition to minimum rentals, certain lease
agreements provide for usage charges and cost-of-living increases. Lease
agreements related to real property have fixed payment terms based upon the
lapse of time.
Certain lease agreements provide the Company with the option to purchase
the leased property at the end of the lease term at approximately fair market
value. Additionally, certain lease agreements contain renewal options of up
to three years with substantially the same terms.
9 RELATED PARTY TRANSACTIONS
TJM sells to MacMillan Bloedel Building Materials (MBBM), a division of
MB, on terms comparable to other Company distributors. Sales to MBBM were
$116,912,000, $116,452,000, and $104,376,000 in 1995, 1994, and 1993,
respectively. Accounts receivable from MBBM were: $7,163,000, at December
30, 1995; $2,188,000, at December 31, 1994; and $8,098,000 at January 1,
1994. Amounts due from MBBM are included in receivables in the accompanying
consolidated balance sheets.
45
<PAGE>
MB provides certain technological and research assistance and computer
services support to TJM. Amounts incurred under this arrangement with MB
were $1,658,000, $1,959,000, and $1,314,000, for 1995, 1994, and 1993,
respectively.
Quarterly, the Partnership makes cash distributions to the Partners in
lieu of state and federal income taxes. Payments of $6,387,000, $10,471,000,
and $4,455,000 were made to MBA in 1995, 1994, and 1993, respectively.
Certain employees who perform services for TJM at the former MB facilities
remain on the payroll of MB. The Partnership Agreement provides that MB will
be reimbursed for its actual payroll and related benefit costs relating to
these employees. Payroll reimbursements to MB for 1995, 1994, and 1993 were
$4,925,000, $4,290,000, and $5,164,000, respectively. Total payables to MB
and MBA for such services and tax distributions at December 30, 1995,
December 31, 1994, and January 1, 1994, were $844,000, $1,649,000, and
$3,120,000, respectively, and are included in accounts payable in the
accompanying consolidated balance sheets.
10 GEOGRAPHIC SEGMENTS AND SIGNIFICANT CUSTOMERS
The primary business of the Company is the manufacture and marketing of
specialty building products for buildings in the residential and
light-commercial construction industry. More than 90 percent of the
Company's sales are derived from this activity.
The Company operates primarily in two countries, the United States and
Canada; the majority of all sales are made domestically in those countries.
Geographic information about the Company's operations for the three years
ended December 30, 1995, is as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
EXPRESSED IN THOUSANDS
United States Canada Consolidated
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1995 Sales to unaffiliated customers $444,267 $ 40,578 $484,845
Income (loss) from operations 34,636 (4,294) 30,342
Identifiable assets 515,153 31,157 546,310
- ----------------------------------------------------------------------------------------------------
1994 Sales to unaffiliated customers $446,651 $ 49,409 $496,060
Income (loss) from operations 50,799 (400) 50,399
Identifiable assets, excluding discontinued operations 495,193 35,297 530,490
- ----------------------------------------------------------------------------------------------------
1993 Sales to unaffiliated customers $382,279 $ 54,323 $436,602
Income from operations 41,500 1,967 43,467
Identifiable assets, excluding discontinued operations 372,825 15,952 388,777
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>
Certain products are transferred between the United States and Canada for
further manufacture and marketing; these transfers between geographic areas
totaled approximately $26,840,000 in 1995, $25,115,000 in 1994, and
$23,072,000 in 1993. The transfer price is approximately the same price
charged to similar customers.
The Partnership has a strategic alliance with Weyerhaeuser Company's
Building Materials Distribution Division. The arrangement allows the
Partnership to expand its distribution network through Weyerhaeuser's
customer service centers. Additionally, there are certain supply agreements,
whereby the Partnership procures raw materials, such as veneer and oriented
strand board, from Weyerhaeuser. Total sales to Weyerhaeuser for the years
ended December 30, 1995, and December 31, 1994, were $146,173,000 and
$100,926,000, respectively.
46
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE STOCKHOLDERS OF TJ INTERNATIONAL, INC.:
We have audited the accompanying consolidated balance sheets of TJ
International, Inc. (a Delaware corporation) and subsidiaries as of December
30, 1995, December 31, 1994, and January 1, 1994, and the related
consolidated statements of income, stockholders' equity, and cash flows for
the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of TJ International, Inc.
and subsidiaries as of December 30, 1995, December 31, 1994, and January 1,
1994, and the results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting principles.
/S/Arthur Andersen LLP
Boise, Idaho
February 1, 1996
47
<PAGE>
EXHIBIT 21
----------
TJ INTERNATIONAL, INC.
----------------------
SUBSIDIARIES OF THE REGISTRANT
------------------------------
The significant subsidiaries of the Company are as follows:
State or Other Percentage
Jurisdiction of Voting
of Incorporation Securities
or Organization Owned
------------------- ------------
Trus Joist MacMillan, A Limited
Partnership Delaware 51% (1)
Trus-Joist (Western), Ltd. New Brunswick 100%
Norco Windows, Inc. Wisconsin 100%
(1) The Company has a 51% interest in this partnership.
48
<PAGE>
EXHIBIT 24
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 10-K into TJ International, Inc.'s
previously filed Form S-8 Registration Statement for the Trus Joist
Corporation Nonstatutory Stock Option Plan with 1982 Incentive Amendment, as
amended (Registration No. 2-79209), Form S-8 Registration Statement for the
Trus Joist Corporation Employee Stock Ownership Plan (Registration No.
2-96065), Form S-8 Registration Statement for the Trus Joist Corporation
Associates' Stock Purchase Plan, as amended (Registration No. 2-96821), Form
S-8 Registration Statement for the Trus Joist Corporation Key Employees' 1982
Incentive Stock Option Plan with Nonstatutory Feature (Registration No.
2-96964), Form S-8 Registration Statement for the Trus Joist Corporation
Employee Stock Ownership Plan (Registration No. 33-4704), Form S-8
Registration Statement for the Trus Joist Corporation Profit Sharing Plan, as
amended (Registration No. 33-21870), Form S-8 Registration Statement for the
Trus Joist Corporation Key Employees' 1985 Incentive Stock Option Plan with
Nonstatutory Feature, as amended (Registration No. 33-22186) and Form S-8
Registration Statement for TJ International, Inc. Key Employees 1988 and 1992
Stock Option Plans (Registration No. 33-54582).
/s/ ARTHUR ANDERSEN LLP
-----------------------
Boise, Idaho
March 26, 1996
49
<PAGE>
SPECIAL POWER OF ATTORNEY
-------------------------
KNOW ALL MEN BY THESE PRESENTS: That I, Robert A. Findlay,
------------------------------
have made, constituted and appointed, and by these presents do make, constitute
and appoint either the Chairman of the Board or the President of TJ
International, Inc., a Delaware corporation, my true and lawful attorney in
my name, place and stead, and for my use and benefit as follows:
* For the special purpose of signing the Company's Form 10-K for the
fiscal year ended December 30, 1995 to be filed with the Securities
and Exchange Commission on or before March 29, 1996, and
* For the special purpose of signing all such Forms S-8 as the Company
may be required to file pursuant to SEC regulations.
and to sign, seal, execute, deliver and acknowledge such instruments in writing
of whatever kind and nature as may be necessary or proper in the premises.
I HEREBY give and grant unto said attorney full power and authority to do
and perform all and every act and thing whatsoever requisite and necessary to be
done, as fully to all intents and purposes as I might or could do if personally
present, and hereby ratify and confirm all that said attorney shall lawfully do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 14 day of
--
February, 1996.
Robert B. Findlay /s/
-----------------------------
STATE OF Idaho
County of Ada
On this 16th day of February, 1996, before me, the undersigned, a Notary
----
Public in and for said State, personally appeared Robert B. Findlay,
---------------------------
known to me to be the person whose name is subscribed to the foregoing and
acknowledged to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Patricia K. Stiburek /s/
------------------------------------
Notary Public for the State of Idaho
Residing at Boise, Idaho
-----
<PAGE>
SPECIAL POWER OF ATTORNEY
-------------------------
KNOW ALL MEN BY THESE PRESENTS: That I, Thomas H. Denig, have made,
---------------
constituted and appointed, and by these presents do make, constitute and
appoint either the Chairman of the Board or the President of TJ International,
Inc., a Delaware corporation, my true and lawful attorney in my name, place
and stead, and for my use and benefit as follows:
* For the special purpose of signing the Company's Form 10-K for the
fiscal year ended December 30, 1995 to be filed with the Securities
and Exchange Commission on or before March 29, 1996, and
* For the special purpose of signing all such Forms S-8 as the Company
may be required to file pursuant to SEC regulations.
and to sign, seal, execute, deliver and acknowledge such instruments in writing
of whatever kind and nature as may be necessary or proper in the premises.
I HEREBY give and grant unto said attorney full power and authority to do
and perform all and every act and thing whatsoever requisite and necessary to be
done, as fully to all intents and purposes as I might or could do if personally
present, and hereby ratify and confirm all that said attorney shall lawfully do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16th day of
----
February, 1996.
Thomas H. Denig /s/
------------------------------------
STATE OF IDAHO
County of Ada
On this 16th day of February, 1996, before me, the undersigned, a Notary
----
Public in and for said State, personally appeared Thomas H. Denig, known to me
---------------
to be the person whose name is subscribed to the foregoing and acknowledged
to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Patricia K. Stiburek /s/
------------------------------------
Notary Public for the State of Idaho
Residing at Boise, Idaho
-----
<PAGE>
SPECIAL POWER OF ATTORNEY
-------------------------
KNOW ALL MEN BY THESE PRESENTS: That I, Robert Hansberger, have made,
-----------------
constituted and appointed, and by these presents do make,constitute and appoint
either the Chairman of the Board or the President of TJ International, Inc., a
Delaware corporation, my true and lawful attorney in my name, place and stead,
and for my use and benefit as follows:
* For the special purpose of signing the Company's Form 10-K for the
fiscal year ended December 30, 1995 to be filed with the Securities
and Exchange Commission on or before March 29, 1996, and
* For the special purpose of signing all such Forms S-8 as the Company
may be required to file pursuant to SEC regulations.
and to sign, seal, execute, deliver and acknowledge such instruments in writing
of whatever kind and nature as may be necessary or proper in the premises.
I HEREBY give and grant unto said attorney full power and authority to do
and perform all and every act and thing whatsoever requisite and necessary to be
done, as fully to all intents and purposes as I might or could do if personally
present, and hereby ratify and confirm all that said attorney shall lawfully do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 7th day of
---
February, 1996.
Robert Hansberger /s/
-----------------------------------
STATE OF IDAHO
County of Ada
On this 16th day of February, 1996, before me, the undersigned, a Notary
----
Public in and for said State, personally appeared Robert V. Hansverger, known
--------------------
to me to be the person whose name is subscribed to the foregoing and
acknowledged to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Patricia K. Stiburek /s/
-----------------------------------
Notary Public for the State of Idaho
Residing at Boise, Idaho
<PAGE>
SPECIAL POWER OF ATTORNEY
-------------------------
KNOW ALL MEN BY THESE PRESENTS: That I, J.L. Scott, have made, constituted
----------
and appointed, and by these presents do make, constitute and appoint either the
Chairman of the Board or the President of TJ International, Inc., a Delaware
corporation, my true and lawful attorney in my name, place and stead, and for
my use and benefit as follows:
* For the special purpose of signing the Company's Form 10-K for the
fiscal year ended December 30, 1995 to be filed with the Securities
and Exchange Commission on or before March 29, 1996, and
* For the special purpose of signing all such Forms S-8 as the Company
may be required to file pursuant to SEC regulations.
and to sign, seal, execute, deliver and acknowledge such instruments in writing
of whatever kind and nature as may be necessary or proper in the premises.
I HEREBY give and grant unto said attorney full power and authority to do
and perform all and every act and thing whatsoever requisite and necessary to be
done, as fully to all intents and purposes as I might or could do if personally
present, and hereby ratify and confirm all that said attorney shall lawfully do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 17 day of
--
February, 1996.
J. L. Scott /s/
----------------------------------
STATE OF
County of
On this 16th day of February, 1996, before me, the undersigned, a Notary
----
Public in and for said State, personally appeared J. L. Scott, known to me to
-----------
be the person whose name is subscribed to the foregoing and acknowledged to me
that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Patricia K. Stiburek /s/
------------------------------------
Notary Public for the State of Idaho
Residing at Boise, Idaho
-----
<PAGE>
SPECIAL POWER OF ATTORNEY
-------------------------
KNOW ALL MEN BY THESE PRESENTS: That I, Harold E. Thomas, have made,
----------------
constituted and appointed, and by these presents do make, constitute and
appoint either the Chairman of the Board or the President of TJ International,
Inc., a Delaware corporation, my true and lawful attorney in my name, place
and stead, and for my use and benefit as follows:
* For the special purpose of signing the Company's Form 10-K for the
fiscal year ended December 30, 1995 to be filed with the Securities
and Exchange Commission on or before March 29, 1996, and
* For the special purpose of signing all such Forms S-8 as the Company
may be required to file pursuant to SEC regulations.
and to sign, seal, execute, deliver and acknowledge such instruments in writing
of whatever kind and nature as may be necessary or proper in the premises.
I HEREBY give and grant unto said attorney full power and authority to do
and perform all and every act and thing whatsoever requisite and necessary to be
done, as fully to all intents and purposes as I might or could do if personally
present, and hereby ratify and confirm all that said attorney shall lawfully do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16th day of
----
February, 1996.
Harold E. Thomas /s/
-------------------------------------
STATE OF IDAHO
County of Ada
On this 16th day of February, 1996, before me, the undersigned, a Notary
----
Public in and for said State, personally appeared Harold E. Thomas, known to
----------------
me to be the person whose name is subscribed to the foregoing and acknowledged
to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Patricia K. Stiburek /s/
-------------------------------------
Notary Public for the State of Idaho
Residing at Boise, Idaho
<PAGE>
SPECIAL POWER OF ATTORNEY
-------------------------
KNOW ALL MEN BY THESE PRESENTS: That I, Arthur L. Troutner, have made,
------------------
constituted and appointed, and by these presents do make, constitute and appoint
either the Chairman of the Board or the President of TJ International, Inc., a
Delaware corporation, my true and lawful attorney in my name, place and stead,
and for my use and benefit as follows:
* For the special purpose of signing the Company's Form 10-K for the
fiscal year ended December 30, 1995 to be filed with the Securities
and Exchange Commission on or before March 29, 1996, and
* For the special purpose of signing all such Forms S-8 as the Company
may be required to file pursuant to SEC regulations.
and to sign, seal, execute, deliver and acknowledge such instruments in writing
of whatever kind and nature as may be necessary or proper in the premises.
I HEREBY give and grant unto said attorney full power and authority to do
and perform all and every act and thing whatsoever requisite and necessary to
be done, as fully to all intents and purposes as I might or could do if
personally present, and hereby ratify and confirm all that said attorney shall
lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16th day of
----
February, 1996.
Arthur L. Troutner /s/
-------------------------------------
STATE OF IDAHO
County of Ada
On this 16th day of February, 1996, before me, the undersigned, a Notary
----
Public in and for said State, personally appeared Arthur L. Troutner, known
------------------
to me to be the person whose name is subscribed to the foregoing and
acknowledged to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Patricia K. Stiburek /s/
------------------------------------
Notary Public for the State of Idaho
Residing at Boise, Idaho
-----
<PAGE>
SPECIAL POWER OF ATTORNEY
-------------------------
KNOW ALL MEN BY THESE PRESENTS: That I, J. Robert Tullis, have made,
-------------
constituted and appointed, and by these presents do make, constitute and
appoint either the Chairman of the Board or the President of TJ International,
Inc., a Delaware corporation, my true and lawful attorney in my name, place and
stead, and for my use and benefit as follows:
* For the special purpose of signing the Company's Form 10-K for the
fiscal year ended December 30, 1995 to be filed with the Securities
and Exchange Commission on or before March 29, 1996, and
* For the special purpose of signing all such Forms S-8 as the Company
may be required to file pursuant to SEC regulations.
and to sign, seal, execute, deliver and acknowledge such instruments in writing
of whatever kind and nature as may be necessary or proper in the premises.
I HEREBY give and grant unto said attorney full power and authority to do
and perform all and every act and thing whatsoever requisite and necessary to be
done, as fully to all intents and purposes as I might or could do if personally
present, and hereby ratify and confirm all that said attorney shall lawfully do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16th day of
----
February, 1996.
J. Robert Tullis /s/
-------------------------------------
STATE OF IDAHO
County of Ada
On this 16th day of February, 1996, before me, the undersigned, a Notary
----
Public in and for said State, personally appeared J. Robert Tullis, known to
----------------
me to be the person whose name is subscribed to the foregoing and acknowledged
to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Patricia K. Stiburek /s/
-------------------------------------
Notary Public for the State of Idaho
Residing at Boise, Idaho
-----
<PAGE>
SPECIAL POWER OF ATTORNEY
-------------------------
KNOW ALL MEN BY THESE PRESENTS: That I, Steven C. Wheelwright, have made,
---------------------
constituted and appointed, and by these presents do make, constitute and
appoint either the Chairman of the Board or the President of TJ International,
Inc., a Delaware corporation, my true and lawful attorney in my name, place
and stead, and for my use and benefit as follows:
* For the special purpose of signing the Company's Form 10-K for the
fiscal year ended December 30, 1995 to be filed with the Securities
and Exchange Commission on or before March 29, 1996, and
* For the special purpose of signing all such Forms S-8 as the Company
may be required to file pursuant to SEC regulations.
and to sign, seal, execute, deliver and acknowledge such instruments in writing
of whatever kind and nature as may be necessary or proper in the premises.
I HEREBY give and grant unto said attorney full power and authority to do
and perform all and every act and thing whatsoever requisite and necessary to be
done, as fully to all intents and purposes as I might or could do if personally
present, and hereby ratify and confirm all that said attorney shall lawfully do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16 day of
--
February, 1996.
Steve C. Wheelwright /s/
-------------------------------------
STATE OF IDAHO
County of Ada
On this 16th day of February, 1996, before me, the undersigned, a Notary
----
Public in and for said State, personally appeared Steven C. Wheelwright, known
---------------------
to me to be the person whose name is subscribed to the foregoing and
acknowledged to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Patricia K. Stiburek /s/
------------------------------------
Notary Public for the State of Idaho
Residing at Boise, Idaho
-----
<PAGE>
SPECIAL POWER OF ATTORNEY
-------------------------
KNOW ALL MEN BY THESE PRESENTS: That I, William J. White, have made,
----------------
constituted and appointed, and by these presents do make, constitute and
appoint either the Chairman of the Board or the President of TJ International,
Inc., a Delaware corporation, my true and lawful attorney in my name, place
and stead, and for my use and benefit as follows:
* For the special purpose of signing the Company's Form 10-K for the
fiscal year ended December 30, 1995 to be filed with the Securities
and Exchange Commission on or before March 29, 1996, and
* For the special purpose of signing all such Forms S-8 as the Company
may be required to file pursuant to SEC regulations.
and to sign, seal, execute, deliver and acknowledge such instruments in writing
of whatever kind and nature as may be necessary or proper in the premises.
I HEREBY give and grant unto said attorney full power and authority to do
and perform all and every act and thing whatsoever requisite and necessary to
be done, as fully to all intents and purposes as I might or could do if
personally present, and hereby ratify and confirm all that said attorney shall
lawfully do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16th day of
----
February, 1996.
William J. White /s/
-------------------------------------
STATE OF IDAHO
County of Ada
On this 16th day of February, 1996, before me, the undersigned, a Notary
----
Public in and for said State, personally appeared William J. White, known to
----------------
me to be the person whose name is subscribed to the foregoing and acknowledged
to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Patricia K. Stiburek /s/
-------------------------------------
Notary Public for the State of Idaho
Residing at Boise, Idaho
-----
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This data schedule contains financial information extracted from TJ
International Inc. Balance Sheet at December 30, 1995 and from its Statement of
Income for the twelve months ended December 30, 1995. The information presented
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-30-1995
<CASH> 19,715
<SECURITIES> 0
<RECEIVABLES> 29,138
<ALLOWANCES> 384
<INVENTORY> 38,560
<CURRENT-ASSETS> 104,672
<PP&E> 553,879
<DEPRECIATION> 149,069
<TOTAL-ASSETS> 546,310
<CURRENT-LIABILITIES> 57,072
<BONDS> 89,440
0
13,992
<COMMON> 17,132
<OTHER-SE> 179,020
<TOTAL-LIABILITY-AND-EQUITY> 546,310
<SALES> 484,845
<TOTAL-REVENUES> 484,845
<CGS> 376,187
<TOTAL-COSTS> 376,187
<OTHER-EXPENSES> 78,316
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 631
<INCOME-PRETAX> 15,544
<INCOME-TAX> 5,803
<INCOME-CONTINUING> 9,741
<DISCONTINUED> (39,652)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (29,911)
<EPS-PRIMARY> (1.80)
<EPS-DILUTED> (1.80)
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This data schedule contains restated financial information extracted from TJ
International Inc. Balance Sheet at December 31, 1994 and from its Statement of
Income for the twelve months ended December 31, 1994. The information presented
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-02-1994
<PERIOD-END> DEC-31-1994
<CASH> 57,764
<SECURITIES> 16,084
<RECEIVABLES> 39,047
<ALLOWANCES> 585
<INVENTORY> 30,968
<CURRENT-ASSETS> 206,298
<PP&E> 455,342
<DEPRECIATION> 124,328
<TOTAL-ASSETS> 584,909
<CURRENT-LIABILITIES> 53,837
<BONDS> 102,280
0
14,744
<COMMON> 16,916
<OTHER-SE> 208,898
<TOTAL-LIABILITY-AND-EQUITY> 584,909
<SALES> 496,060
<TOTAL-REVENUES> 496,060
<CGS> 366,344
<TOTAL-COSTS> 366,344
<OTHER-EXPENSES> 79,317
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 25,833
<INCOME-TAX> 9,583
<INCOME-CONTINUING> 16,250
<DISCONTINUED> (7,402)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,848
<EPS-PRIMARY> .46
<EPS-DILUTED> .44
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This data schedule contains restated financial information extracted from TJ
International Inc. Balance Shett at January 1, 1994 and from its Statement of
Income for the twelve months ended January 1, 1994. The information presented
is qualified in its entirety by referenece to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-01-1994
<PERIOD-START> JAN-03-1993
<PERIOD-END> JAN-01-1994
<CASH> 66,945
<SECURITIES> 7,004
<RECEIVABLES> 38,693
<ALLOWANCES> 317
<INVENTORY> 28,426
<CURRENT-ASSETS> 183,195
<PP&E> 311,389
<DEPRECIATION> 103,476
<TOTAL-ASSETS> 421,150
<CURRENT-LIABILITIES> 41,319
<BONDS> 23,709
0
14,859
<COMMON> 16,738
<OTHER-SE> 203,144
<TOTAL-LIABILITY-AND-EQUITY> 421,150
<SALES> 436,602
<TOTAL-REVENUES> 436,602
<CGS> 320,463
<TOTAL-COSTS> 320,463
<OTHER-EXPENSES> 72,672
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,539
<INCOME-PRETAX> 32,228
<INCOME-TAX> 11,560
<INCOME-CONTINUING> 20,668
<DISCONTINUED> (8,140)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,528
<EPS-PRIMARY> .82
<EPS-DILUTED> .76
</TABLE>
