<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For Quarter Ended: July 4, 1998 Commission file number: 0-7469
TJ INTERNATIONAL, INC.
- ------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 82-0250992
- --------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 E. Mallard Drive
BOISE, IDAHO 83706
- --------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (208) 364-3300
------------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities and Exchange Act of 1934 during the preceding 12 months
(or for each shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
August 14, 1998: 16,053,797 shares of $1 par value common stock.
EXHIBIT INDEX ON PAGE 16
<PAGE>
TJ INTERNATIONAL, INC.
PART I. Financial Information
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission, under the Securities Exchange Act
of 1934, as amended. In the opinion of management, all adjustments necessary
to present fairly the results for the periods presented have been included
therein. The adjustments made were of a normal, recurring nature. Certain
information and footnote disclosure normally included in financial statements
have been condensed or omitted in accordance with such rules and regulations,
although the Company believes that the disclosures are adequate to make the
information presented not misleading. It is recommended that these condensed
financial statements be read in conjunction with the audited financial
statements and the notes thereto included in the Company's latest annual
report on Form 10-K.
The results of operations for the periods presented are not necessarily
indicative of the results that might be expected for the fiscal year ending
January 2, 1999.
<PAGE>
<TABLE>
<CAPTION>
TJ INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(amounts in thousands except per share figures)
<S> <C> <C> <C> <C>
For the fiscal For the two fiscal
quarter ended quarters ended
----------------------- ---------------------
July 4, June 28, July 4, June 28,
1998 1997 1998 1997
-------- -------- -------- --------
Sales $193,361 $185,730 $379,190 $346,993
-------- -------- -------- --------
Costs and expenses
Cost of sales 139,064 134,598 274,587 252,521
Selling expenses 19,315 19,216 38,890 36,299
Administrative expenses 9,403 8,762 19,013 17,324
--------- --------- --------- ---------
167,782 162,576 332,490 306,144
--------- --------- --------- ---------
Income from operations 25,579 23,154 46,700 40,849
Investment income, net 1,798 876 3,757 1,288
Interest expense (2,223) (1,564) (4,539) (3,113)
Minority interest in
Partnership (12,220) (10,480) (22,067) (18,275)
--------- --------- --------- ---------
Income before income taxes 12,934 11,986 23,851 20,749
Income taxes 4,850 4,495 8,944 7,781
--------- --------- --------- ---------
Net income $ 8,084 $ 7,491 $ 14,907 $ 12,968
--------- --------- --------- ---------
Net income per common share
Basic $ 0.46 $ 0.42 $ 0.85 $ 0.72
--------- --------- --------- ---------
Diluted $ 0.43 $ 0.39 $ 0.79 $ 0.67
--------- --------- --------- ---------
Dividends declared per
common share $ 0.0550 $ 0.0550 $ 0.11 $ 0.11
--------- --------- --------- ---------
Weighted average number of
common shares outstanding
during the periods
Basic 16,981 17,295
--------- ---------
Diluted 18,554 18,814
--------- ---------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
TJ INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C>
July 4, January 3, June 28,
ASSETS 1998 1998 1997
Current assets
Cash and cash equivalents $ 139,980 $ 119,087 $ 70,875
Marketable securities --- 40,751 ---
Receivables, less allowances of
$394, $397 and $403 88,495 55,369 81,623
Inventories 77,548 68,954 51,649
Other 14,468 10,923 11,540
---------- ---------- ----------
320,491 295,084 215,687
Property
Property and equipment 616,603 603,693 580,174
Less - Accumulated
depreciation (240,310) (223,207) (202,711)
---------- ----------- ----------
376,293 380,486 377,463
Goodwill 18,980 19,500 20,020
Other assets 17,620 17,034 23,676
---------- ----------- ----------
$ 733,384 $ 712,104 $ 636,846
========== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 33,926 $ 25,238 $ 33,551
Accrued liabilities 46,290 50,641 46,397
---------- ----------- ----------
80,216 75,879 79,948
Long-term debt 142,390 142,390 99,790
Other long-term liabilities 19,917 18,336 6,050
Reserve for discontinued operations 13,955 17,482 18,945
Minority interest in Partnership 228,268 216,605 205,394
Stockholders' equity
ESOP Convertible Preferred Stock,
$1.00 par value, authorized
10,000,000 shares, issued
1,136,219, 1,147,219, and
1,156,947 13,405 13,535 13,650
Guaranteed ESOP Benefit (8,188) (8,188) (9,204)
Common stock, $1.00 par value,
authorized 200,000,000
shares, issued 17,947,065,
17,807,142, and 17,707,180 17,947 17,807 17,707
Paid-in capital 157,570 153,936 150,602
Retained earnings 98,712 86,116 73,839
Other (1,865) (1,730) (1,687)
Accumulated other comprehensive
income (loss) (5,148) (3,805) (3,188)
Common stock in treasury,
1,034,355, 761,152, and
711,152 shares, at cost (23,795) (16,259) (15,000)
---------- ----------- ----------
248,638 241,412 226,719
---------- ----------- ----------
$ 733,384 $ 712,104 $ 636,846
========== =========== ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
TJ INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FISCAL QUARTERS ENDED JULY 4, 1998, AND JUNE 28, 1997
(Unaudited)
(amounts in thousands)
<TABLE>
<CAPTION>
July 4, June 28,
1998 1997
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 14,907 $ 12,968
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 22,214 20,608
Minority interest in partnership 22,067 18,275
Other, net 2,040 1,787
Change in working capital items:
Receivables (33,126) (7,730)
Inventories (8,594) (100)
Other current assets (3,545) (1,799)
Accounts payable and
accrued liabilities 4,022 18,940
Other, net (3,678) (1,064)
----------- ------------
Net cash provided by operating
activities $ 16,307 $ 61,885
=========== ============
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures $ (18,006) $ (15,957)
Sales of marketable securities 40,751 -----
Other, net (966) (731)
----------- ------------
Net cash provided by (used in)
investing activities $ 21,779 $ (16,688)
=========== ============
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid on common
stock $ (1,873) $ (1,914)
Cash dividends paid on
preferred stock ----- (1,245)
Minority partners tax
distributions (8,020) (4,996)
Net borrowings under
lines-of-credit ----- 96
Proceeds from the issuance
of long-term debt ----- 11,650
Purchase of treasury stock (7,536) (15,000)
Other, net 236 286
Net cash used in financing ------------ ------------
activities $ (17,193) $ (11,123)
============ ============
Net change in cash and cash equivalents
Net increase in cash and cash
equivalents $ 20,893 $ 34,074
Cash and cash equivalents
at beginning of year 119,087 36,801
------------ ------------
Cash and cash equivalents
at end of period $ 139,980 $ 70,875
============ ============
Supplemental disclosures of cash
flow information
Cash paid during the period for:
Interest, net of amounts
capitalized $ 5,198 $ 3,095
Income taxes $ 6,597 $ 534
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
TJ INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
INVENTORIES
Inventories consisted of the following:
(amounts in thousands)
<S> <C> <C> <C>
July 4, Jan. 3, June 28,
1998 1998 1997
------- ------- --------
Finished goods $57,769 $51,737 $39,412
Raw materials and 19,779 17,217 12,237
work-in-progress ------- ------- --------
77,548 68,954 51,649
Reduction in LIFO cost - - -
------- -------- --------
$77,548 $68,954 $51,649
======= ======== ========
</TABLE>
The determination of inventory under the LIFO method can be made only at the
end of each fiscal year based on the inventory levels and costs at that time.
Accordingly, interim LIFO calculations must necessarily be based on the
Company's estimates of expected year-end inventory levels and costs. Since
these estimates are subject to many forces beyond the Company's control,
interim results could possibly be affected by the final year-end LIFO
inventory valuation.
<PAGE>
NET INCOME PER COMMON SHARE:
Basic net income per common share is based on net income adjusted for
preferred stock dividends and related tax benefits divided by the weighted
average number of common shares outstanding. Diluted net income per common
share assumes conversion of the Employee Stock Ownership Plan (ESOP)
convertible preferred stock (ESOP preferred stock)into common stock at the
beginning of the fiscal year and weighted average number of common shares
outstanding after giving effect to stock options under the treasury stock
method.
Basic net income and diluted net income were calculated as follows:
<TABLE>
<CAPTION>
(amounts in thousands)
<S> <C> <C> <C>
For the fiscal For the two fiscal
quarter ended quarters ended
------------------- -----------------
July 4, June 28, July 4, June 28,
1998 1997 1998 1997
------------------- -----------------
<S> <C> <C> <C> <C>
BASIC NET INCOME
Net income as reported $ 8,084 $ 7,491 $14,907 $12,968
Preferred stock dividends, net
of related tax benefits (250) (246) (503) (494)
------- ------- ------- ---------
Basic net income $ 7,834 $ 7,245 $ 14,404 $12,474
======= ======= ======== ========
DILUTED NET INCOME
Net income as reported $ 8,084 $ 7,491 $ 14,907 $12,968
Additional ESOP contribution
payable upon assumed
conversion of ESOP
preferred stock, net of
related tax benefits (165) (174) (331) (348)
------- ------- -------- ---------
Diluted net income $ 7,919 $ 7,317 $14,576 $12,620
======= ======= ======== ========
</TABLE>
<PAGE>
COMPREHENSIVE INCOME (LOSS)
Comprehensive income for the periods include the following:
<TABLE>
<CAPTION>
(amounts in thousands)
<S> <C> <C> <C>
For the fiscal For the two fiscal
quarter ended quarters ended
------------------- -----------------
July 4, June 28, July 4, June 28,
1998 1997 1998 1997
------------------- -----------------
<S> <C> <C> <C> <C>
Net income $ 8,084 $ 7,491 $14,907 $12,968
Other Comprehensive Loss (1,290) (9) (1,343) (408)
------- ------- ------- -------
Comprehensive Income $ 6,794 $ 7,482 $13,564 $12,560
======= ======= ======= =======
</TABLE>
Accumulated other comprehensive income (loss) for each period ended was as
follows:
<TABLE>
<CAPTION>
(amounts in thousands)
July 4, Jan. 3, June 28,
1998 1998 1997
------- ------- --------
<S> <C> <C> <C>
Balances at beginning of period-
cumulative translation adjustment $(3,805) $(2,780) $ (2,780)
Changes within periods-
cumulative translation adjustment (1,343) (1,025) (408)
------- ------- --------
Balance at end of period-
cumulative translation adjustment $(5,148) $(3,805) $ (3,188)
======= ======= ========
</TABLE>
RECENTLY-ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement No.
131 Disclosures about Segments of an Enterprise and Related Information ("SFAS
No. 131"). SFAS No. 131 requires publicly-held companies to report segment
and other information which is utilized by the Chief Executive Officer and to
reconcile the segment information to financial statement amounts. SFAS No.
131 is effective for the Company for the year ending January 2, 1999. The
Company is evaluating the impact of this new standard on its reporting and
disclosure.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The
Statement requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met.
Special accounting for qualifying hedges allows a derivatives gains or losses
to offset related results on the hedged item in the income statement, and
requires that a company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting. Statement 133 is
effective for fiscal years beginning after June 15, 1999. The Company has not
yet quantified the impact of adopting Statement 133 on our financial
statements and have not determined the timing of or method of our adoption of
Statement 133. However, the Statement could increase volatility in earnings
and other comprehensive income.
<PAGE>
TJ INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL QUARTER ENDED JULY 4, 1998
OPERATING RESULTS
TJ International, Inc., (the Company) is the 51 percent owner and managing
partner of Trus Joist MacMillan a Limited Partnership (TJM), the world's
leading manufacturer and marketer of engineered lumber products.
Substantially all of the Company's operating assets are held and revenue
generated by TJM. MacMillan Bloedel Limited (MB) owns a 49 percent interest
in TJM.
The following comments discuss material variations in the results of
operations for the comparative periods presented in the condensed consolidated
statements of income.
SALES
The Company's sales by quarter during the current year and for the preceding
four years are as follows:
<TABLE>
<CAPTION>
Sales by Quarter
----------------
(amounts in thousands)
<S> <C> <C> <C> <C> <C>
QUARTER 1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
First $185,829 $161,263 $111,157 $109,941 $118,163
Second 193,361 185,730 155,050 123,882 128,773
Third 185,576 179,571 137,759 136,266
Fourth 173,747 131,388 113,263 112,858
-------- -------- -------- -------- --------
$379,190 $706,316 $577,166 $484,845 $496,060
======== ======== ======== ======== ========
</TABLE>
SECOND QUARTER OF 1998 COMPARED WITH THE SECOND QUARTER OF 1997
Second quarter sales increased $7.6 million or 4% from the prior year second
quarter despite the challenging market conditions of declining prices for
competing commodity solid sawn lumber. Prices for 2x10 Douglas fir green
lumber were down on average 35% from the prior year second quarter. Prices
for 2x10 southern yellow pine were down on average 12%. Although the price of
competing lumber products was significantly lower during the quarter, the
Company continued to grow and convert builders to engineered lumber from
traditional solid-sawn lumber. The factors driving this continued growth are
the better performance, superior quality and value of engineered lumber as
compared to the lower-priced commodity lumber alternative.
Other factors affecting sales in the second quarter included a reduction in
inventory levels by several of the Company's key distribution customers.
These customers satisfied builder demand for products during the quarter by
drawing on their inventory rather than ordering from the Company. In
addition, wet weather conditions, particularly on the West Coast, delayed
delivery of engineered lumber framing materials to many building sites. Sales
to customers in the Pacific Rim also slowed significantly from the levels sold
in the second quarter of last year.
<PAGE>
Unit volume growth accounted for virtually all the sales increase for the
second quarter of 1998. Prices in the second quarter were down approximately
1% from the second quarter of 1997. Volume gains were strongest in the
Company's TJI-Registered Trademark- Joist products.
Gross margins for the second quarter of fiscal 1998 were 28.1% compared with
27.5% in the second quarter of 1997. Margin gains were the result of lower
raw material costs for veneer and improved operating efficiencies at many of
the Company's manufacturing plants. In addition, margin gains were the result
of higher throughputs and reduced production costs at the Company's new
technology TimberStrand-Registered Trademark- LSL plants in the second quarter
compared to second quarter last year. Higher prices for the Company's new
technology products were also realized during the quarter as the Company
continued to execute its plan to transition to higher value products. These
products include TimberStrand-Registered Trademark- LSL headers and door
components, as well as the Company's TJI-Registered Trademark- Pro 120 TS,
which uses TimberStrand-Registered Trademark- LSL as a flange material in the
joist.
Offsetting some of these improvements was an increase in the cost for
Performance Plus OSB, which is used as the web material in the Company's TJI-
Registered Trademark-joist products. Commodity OSB prices increased on
average 53% from the second quarter of 1998 as compared to the prior year's
second quarter. At quarter end, the price trend for OSB continued upward.
Selling expenses increased $0.1 million, from $19.2 million in the second
quarter 1997 to $19.3 million in the second quarter 1998, but declined as a
percent of sales to 10% from 10.3% in 1997. General and administrative
expenses increased to $9.4 million in the second quarter 1998 from $8.8
million in the prior year's quarter. This increase in spending is primarily
driven by the Company's investment in business support software which is
intended to provide the infrastructure for future growth.
Minority interest expense increased $1.7 million from 1997 due to the increase
in earnings at the Trus Joist MacMillan (TJM) Partnership.
FIRST TWO QUARTERS OF 1998 COMPARED WITH THE FIRST TWO QUARTERS OF 1997
Sales for the first half of 1998 increased by $32.2 million or 9.3% from the
comparable period last year. Unit volume sales growth accounted for the
majority of the increase due to increased acceptance of the Company's
engineered lumber products.
Gross margins increased from 27.2% to 27.6% between the two periods. Improved
performance at the Company's two new plants represented the majority of the
improvement.
Selling expenses increased $2.6 million or 7.1%, but declined as a percentage
of sales from 10.5% to 10.3%. General and administrative expenses increased
$1.7 million; but a percentage of sales remained flat at 5.0%.
LIQUIDITY AND CAPITAL RESOURCES
JULY 4, 1998 COMPARED TO JANUARY 3, 1998
Working capital increased $21 million during the first half of 1998 to $240
million. The increase was primarily driven by the Company's increase in
accounts receivable as a result of increased sales volume, as well as the
Company's seasonal investment in inventory as the traditional building season
gains full momentum. Cash flows from operations were $16.3 million.
<PAGE>
JULY 4, 1998 COMPARED TO JUNE 28, 1997
Working capital increased $105 million from the prior year, to $240 million at
July 4, 1998. The increase was due to additional debt issued in the fourth
quarter of 1997 (described below), strong cash flow from operations combined
with a modest capital program and an increase in inventory levels aimed at
improving service levels and reducing lead times to customers.
The Company completed construction in late 1997 of a TimberStrand-Registered
Trademark- LSL - flange I-line at its East Kentucky location. The new
production facility will allow the Company to produce traditional I-joist
products, using TimberStrand-Registered Trademark- LSL as the top and bottom
flange material. The plant ramp up is on schedule, with market introduction
of this product in the first quarter 1998. The additional I-line required a
capital investment of approximately $16.5 million in 1997.
Also in 1997, the Company began construction of a Microllam-Registered
Trademark- LVL, TJI-Registered Trademark- Joist plant located in Evergreen,
Alabama, with production scheduled to begin late in the fourth quarter of
1998. The new production facility will allow the Company to produce
traditional Microllam-Registered Trademark- LVL and TJI-Registered Trademark
Joist products. The plant will require a capital investment of approximately
$45 million.
The Company is evaluating potential sites for a third TimberStrand-Registered
Trademark- LSL plant but has not determined whether or when to proceed with
construction. The Company believes that current cash balances, cash generated
from operations, and borrowing under a $150 million Revolving Credit Facility
will be sufficient to meet the on-going operating and capital expansion needs
of the Company. The Company also believes that additional or expanded lines
of credit or appropriate long-term capital can be obtained to fund other major
capital requirements as they arise, or to fund an acquisition.
In the first quarter 1998, the Board of Directors authorized the Company to
purchase $3.1 million of treasury stock. In addition, at the Company's Board
of Directors meeting held on May 27, 1998 the Board authorized the Company to
purchase $35 million of treasury stock, of which the Company purchased $4.4
million in the second quarter of 1998.
For 1997, the Company's Board of Directors authorized the purchase of up to
$15 million of the Company's common stock at market prices. The Company
purchased $8.3 million of treasury stock during the first quarter of 1997 and
$6.7 million of stock during the second quarter of 1997 completing the stock
purchase plan. In addition, the Board of Directors authorized and the Company
purchased an additional $1.3 million of stock during the third quarter of
1997.
In the fourth quarter of 1997, the Company issued $42.6 million of taxable
notes to preserve the Company's ability in the future to issue additional
industrial revenue bonds to help finance the East Kentucky
TimberStrand-Registered Trademark- LSL plant. The taxable notes are due in a
single maturity on November 15, 2001, subject to prepayment at the option of
the Company, and are unsecured. In addition, during the second quarter of
1997, the Company issued $11.65 million of industrial revenue bonds associated
with the construction of the East Kentucky plant. The bonds are due in a
single maturity in 2027, with interest payable semi-annually at 6.55%.
The Company sold its windows operations in 1996, however, it retained certain
liabilities related to these operations. Management believes that existing
<PAGE>
reserves are adequate to meet all subsequent liabilities that may arise
related to the discontinued operations.
Substantially all of the Company's operating assets are held, and revenue
generated, by its TJM 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. 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.
INDUSTRY, COMPETITION, AND CYCLICALITY
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.
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 or Parallam-Registered Trademark- 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 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 used in residential construction and
is the primary competitor 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 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. Consistent with the seasonal pattern of 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.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement No.
131 Disclosures about Segments of an Enterprise and Related Information ("SFAS
No. 131"). SFAS No. 131 requires publicly-held companies to report segment
and other information which is utilized by the Chief Executive Officer and to
reconcile the segment information to financial statement amounts. SFAS No.
131 is effective for the Company for the year ending January 2, 1999. The
Company is evaluating the impact of this new standard on its reporting and
disclosure.
<PAGE>
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The
Statement requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met.
Special accounting for qualifying hedges allows a derivatives gains or losses
to offset related results on the hedged item in the income statement, and
requires that a company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting. Statement 133 is
effective for fiscal years beginning after June 15, 1999. The Company has not
yet quantified the impact of adopting Statement 133 on our financial
statements and have not determined the timing of or method of our adoption of
Statement 133. However, the Statement could increase volatility in earnings
and other comprehensive income.
FORWARD-LOOKING STATEMENTS
This Form 10-Q includes a number of "forward-looking statements" as defined by
the Private Securities Litigation Act of 1995. Forward-looking statements
include, without limitation, statements regarding the adequacy of the
Company's reserves for discontinued operations and other statements regarding
the Company's beliefs. Investors are cautioned that forward-looking
statements are subject to an inherent risk that actual results may vary
materially from those described, projected or implied herein. Factors that
may result in such variance include, among others: changes in interest rates,
commodity prices, and other economic conditions; actions by competitors;
changing weather conditions and other natural phenomena; actions by government
authorities; technological developments; future decisions by management in
response to changing conditions; and misjudgments in the course of preparing
forward-looking statements. Other factors are discussed in the Company's
filings with the Securities and Exchange Commission.
Microllam-Registered Trademark-, Parallam-Registered Trademark-,
TJI-Registered Trademark- Joist and TimberStrand-Registered Trademark- are
registered trademarks of Trus Joist MacMillan a Limited Partnership, Boise,
Idaho
<PAGE>
TJ INTERNATIONAL, INC.
PART II
Other Information
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Company's May 27, 1998 annual meeting of stockholders, the
following matters were voted upon and approved by the stockholders
as indicated:
Votes Cast
------------------------------------
Against or
Description For Withheld Abstentions
- ----------------------------- ---------- ---------- ------------
1. To elect as directors the
following individuals
FOR TERMS EXPIRING AT THE 2001
ANNUAL MEETING
Thomas H. Denig 15,118,787 236,788 -
Steven C. Wheelwright 15,123,305 227,752 -
2. Ratification of Appointment
of Arthur Andersen LLP as
Independent Accountants for
the Company 15,116,276 139,177 93,147
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Filed as an exhibit to this report is the following:
(27) Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter.
<PAGE>
TJ INTERNATIONAL INC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TJ INTERNATIONAL, INC.
/s/ Valerie A. Heusinkveld
--------------------------------
Valerie A. Heusinkveld
Vice President, Finance & Chief
Financial Officer
Date: August 18, 1998
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS TO FORM 10-Q
Quarterly Report Under section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the fiscal quarter ended July 4, 1998 Commission File Number 0-7469
TJ INTERNATIONAL, INC.
EXHIBIT INDEX
Exhibits Page
- --------------------- ------------
(27) Financial Data Schedule Document 2
<PAGE>
<TABLE> <S> <C>
<S><C><C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS DATA SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM
THE TJ INTERNATIONAL, INC. BALANCE SHEET AT JULY 4, 1998, AND FROM
ITS STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JULY 4, 1998.
THE INFORMATION PRESENTED IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-02-1998
<PERIOD-START> JAN-04-1998
<PERIOD-END> JUL-04-1998
<CASH> 139,980
<SECURITIES> 0
<RECEIVABLES> 88,889
<ALLOWANCES> 394
<INVENTORY> 77,548
<CURRENT-ASSETS> 320,491
<PP&E> 616,603
<DEPRECIATION> 240,310
<TOTAL-ASSETS> 733,384
<CURRENT-LIABILITIES> 80,216
<BONDS> 142,390
0
13,405
<COMMON> 17,947
<OTHER-SE> 217,286
<TOTAL-LIABILITY-AND-EQUITY> 733,384
<SALES> 379,190
<TOTAL-REVENUES> 379,190
<CGS> 274,587
<TOTAL-COSTS> 274,587
<OTHER-EXPENSES> 57,903
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,539
<INCOME-PRETAX> 23,851
<INCOME-TAX> 8,944
<INCOME-CONTINUING> 14,907
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,907
<EPS-PRIMARY> .85
<EPS-DILUTED> .79
</TABLE>
