-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D5a8TCDfWTJfFqYaEoQBUcvCnBdDcQwFtYJLkml9WdIhUePIhiYiQHJT2lpvadP9 dEgyLkPHsoAO8+ztSa7Nkw== 0000950134-02-010620.txt : 20020826 0000950134-02-010620.hdr.sgml : 20020826 20020826121025 ACCESSION NUMBER: 0000950134-02-010620 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020826 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020826 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELCOR CORP CENTRAL INDEX KEY: 0000032017 STANDARD INDUSTRIAL CLASSIFICATION: ASPHALT PAVING & ROOFING MATERIALS [2950] IRS NUMBER: 751217920 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05341 FILM NUMBER: 02747850 BUSINESS ADDRESS: STREET 1: 14643 DALLAS PKWY STE 1000 STREET 2: WELLINGTON CTR CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 9728510500 MAIL ADDRESS: STREET 1: WELLINGTON CENTRE STE 1000 STREET 2: 14643 DALLAS PKWY CITY: DALLAS STATE: TX ZIP: 75240-8871 FORMER COMPANY: FORMER CONFORMED NAME: ELCOR CHEMICAL CORP DATE OF NAME CHANGE: 19761119 8-K 1 d99437e8vk.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 26, 2002 --------------- ELCOR CORPORATION ------------------------------------------------------ (Exact name of Registrant as specified in its charter)
DELAWARE 1-5341 75-1217920 - ------------------------------ ---------------------- ------------------- (State or other jurisdiction of Commission File Number (I.R.S. Employer incorporation or organization) Identification No.) 14643 DALLAS PARKWAY SUITE 1000, WELLINGTON CENTRE, DALLAS, TEXAS 75254-8890 - -------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (972) 851-0500 --------------
NOT APPLICABLE -------------- (Former name or former address, if changed since last report) Item 5. Other Events Press Release On August 23, 2002, the company issued a press release containing "forward-looking statements" that involve risks and uncertainties about its prospects for the future. The statements that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements usually are accompanied by words such as "outlook," "believe," "estimate," "plan," "project," "expect," "anticipate," "predict," "could," "should," "may," or similar words that convey the uncertainty of future events or outcomes. These statements are based on judgments the company believes are reasonable; however, Elcor's actual results could differ materially from those discussed here. Such risks and uncertainties include, but are not limited to, the following: 1. The company's building products business is substantially non-cyclical, but can be affected by weather, the availability of financing and general economic conditions. In addition, the asphalt roofing products manufacturing business is highly competitive. Actions of competitors, including changes in pricing, or slowing demand for asphalt roofing products due to general or industry economic conditions or the amount of inclement weather could result in decreased demand for the company's products, lower prices received or reduced utilization of plant facilities. Further, changes in building and insurance codes and other standards from time to time can cause changes in demand, or increases in costs that may not be passed through to customers. 2. In the building products business, the significant raw materials are ceramic-coated granules, asphalt, glass fibers, resins and mineral filler. Increased costs of raw materials can result in reduced margins, as can higher energy, trucking and rail costs. Historically, the company has been able to pass some of the higher raw material, energy and transportation costs through to the customer. Should the company be unable to recover higher raw material, energy and/or transportation costs from price increases of its products, operating results could be adversely affected and/or lower than projected. 3. The company has been involved in a significant expansion plan over the past several years, including the construction of new facilities and the expansion of existing facilities. Progress in achieving anticipated operating efficiencies and financial results is difficult to predict for new and expanded plant facilities. If such progress is slower than anticipated, or if demand for products produced at new or expanded plants does not meet current expectations, operating results could be adversely affected. 4. Certain facilities of the company's manufacturing subsidiaries must utilize hazardous materials in their production process. As a result, the company could 1 incur costs for remediation activities at its facilities or off-site, and other related exposures from time to time in excess of established reserves for such activities. 5. The company's litigation is subject to inherent and case-specific uncertainty. The outcome of such litigation depends on numerous interrelated factors, many of which cannot be predicted. 6. Although the company currently anticipates that most of its needs for new capital in the near future will be met with internally generated funds or borrowings under its available credit facilities, significant increases in interest rates could substantially affect its borrowing costs under its existing loan facility, or its cost of alternative sources of capital. 7. Each of the company's businesses, especially Cybershield's business, is subject to the risks of technological changes that could affect the demand for or the relative cost of the company's technology, products and services, or the method and profitability of the method of distribution or delivery of such technology, products and services. In addition, the company's businesses each could suffer significant setbacks in revenues and operating income if it lost one or more of its largest customers, or if its customers' plans and/or markets should change significantly. 8. Although the company insures itself against physical loss to its manufacturing facilities, including business interruption losses, natural or other disasters and accidents, including but not limited to fire, earthquake, damaging winds, and explosions, operating results could be adversely affected if any of its manufacturing facilities became inoperable for an extended period of time due to such events. 9. Each of the company's businesses is actively involved in the development of new products, processes and services which are expected to contribute to the company's ongoing long-term growth and earnings. If such development activities are not successful, market demand is less than expected, or the company cannot provide the requisite financial and other resources to successfully commercialize such developments, the growth of future sales and earnings may be adversely affected. Parties are cautioned not to rely on any such forward-looking beliefs or judgments in making investment decisions. Reference is made to the company's Annual Report on Form 10-K for the year ended June 30, 2001, and its Quarterly Report on Form 10-Q for the quarters ended September 30, 2001, December 31, 2001 and March 31, 2002 for further information about risks and uncertainties. 2 Other Matters The company may, from time to time, find that it has commented on non-public information, including forward-looking information, to analysts. If that should occur, the company may post disclosures at www.elcor.com that it deems appropriate under Regulation F-D. No such disclosure, or similar information filed or furnished by Form 8-K, should be deemed an admission that such information is material to investors. Item 7. Exhibits 99.1 Press release dated August 23, 2002 of Elcor Corporation. 3 SIGNATURES Pursuant to the requirement of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ELCOR CORPORATION DATE: August 26, 2002 /s/ Harold R. Beattie, Jr. --------------------- ------------------------------ Harold R. Beattie, Jr. Senior Vice President, Chief Financial Officer and Treasurer /s/ Leonard R. Harral ------------------------------ Leonard R. Harral Vice President and Chief Accounting Officer 4 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------ ----------- 99.1 Press Release dated August 23, 2002 of Elcor Corporation.
EX-99.1 3 d99437exv99w1.txt PRESS RELEASE EXHIBIT 99.1 PRESS RELEASE TRADED: NYSE FOR IMMEDIATE RELEASE SYMBOL: ELK FOR FURTHER INFORMATION: Harold R. Beattie, Jr. Sr. Vice President, Chief Financial Officer and Treasurer (972) 851-0523 ELCOR CORPORATION CHANGES ITS ACCOUNTING FOR EMPLOYEE STOCK OPTIONS DALLAS, TEXAS, August 23, 2002 . . . . Elcor Corporation said today that it has changed its accounting for certain previously issued employee stock options under APB No. 25, and related interpretations, from the "fixed" to "variable" method of accounting for certain periods prior to August 13, 2002. As previously reported, prior to August 13, 2002, Elcor's 1998 Incentive Stock Option Plan contained a cashless exercise provision that permitted an optionee to relinquish vested options to Elcor in exchange for Elcor common shares having a current market value equal to the difference between the market value and aggregate exercise price of the relinquished options. Under APB No. 25, the aforementioned cashless relinquishment feature can potentially cause options issued under the 1998 Plan to be considered stock appreciation rights ("SAR's") in substance, if not in form, unless past experience and economic incentives indicate that optionees are more likely to exercise, rather than relinquish, the options. Under APB No. 25, SAR's are accounted for using the "variable" method of accounting whereby income is charged (or credited) during each accounting period to reflect any excess of the market value of shares underlying vested SAR's, over the exercise price of vested SAR's. With the concurrence of its prior auditor, Elcor had concluded that its use of "fixed" accounting for employee stock options was appropriate, based upon the very limited number of historical cashless relinquishments and the existence of certain economic incentives for employees to prefer a cash exercise. Prior to March 2002, no optionee ever utilized the cashless relinquishment alternative, and a total of only three optionees, none being executive officers of Elcor, have ever utilized this exercise alternative. However, after consultation with its new auditor, PricewaterhouseCoopers, Elcor agreed to change to "variable" accounting for employee stock options issued under the 1998 PRESS RELEASE Elcor Corporation August 23, 2002 Page 2 Plan, for the period commencing with Elcor's adoption of the 1998 Plan through August 13, 2002. On August 13, 2002, the Compensation Committee of Elcor's Board of Directors terminated the availability of the cashless relinquishment alternative under the 1998 Plan, thereby removing any question regarding the appropriateness of "fixed" accounting for these employee stock options after August 13, 2002. Had the company accounted for all options granted under the 1998 Plan as "variable" awards in prior fiscal years, cumulative after-tax net income for all fiscal years, prior to fiscal 2002, would have been reduced by about $0.4 million. That amount was recorded in fiscal 2002. The cumulative effect of the change in accounting method on fiscal 2001 and all prior fiscal years, and the effect on each such fiscal year, was not considered to be material; however, share price volatility did cause a more significant difference (some positive, some negative) in individual fiscal quarters. As a result of Elcor's changing share price, the application of "variable" option accounting had the following non-cash effect on after-tax net income during each of the periods presented below:
$ Amount Per Share -------- --------- Q1 Fiscal 2002(1) - $0.9 million - $0.05 Q2 Fiscal 2002 - $2.6 million - $0.13 Q3 Fiscal 2002 + $2.2 million + $0.11 Q4 Fiscal 2002 - $2.6 million - $0.13 -------------- ------- Full Fiscal 2002 - $3.9 million - $0.20 Q1 Fiscal 2003 to + $3.5 million + $0.18 August 13, 2002(2)
(1) Includes the cumulative effect on all prior fiscal years (2) On August 13, 2002, the cashless relinquishment feature of the 1998 Plan was terminated. Thereafter, "fixed" option accounting is applicable. Condensed financial statements for the quarter and full fiscal year ending June 30, 2002 are attached reflecting Elcor's change to "variable" option accounting. SAFE HARBOR PROVISIONS In accordance with the safe harbor provisions of the securities law regarding forward-looking statements, in addition to the historical information contained herein, the above discussion contains forward-looking statements that involve risks and uncertainties. The statements that are not historical facts are forward-looking statements PRESS RELEASE Elcor Corporation August 23, 2002 Page 3 within the meaning of the Private Securities Litigation Reform Act of 1995. These statements usually are accompanied by words such as "optimistic," "outlook," "believe," "estimate," "potential," "project," "expect," "anticipate," "plan," "predict," "could," "should," "may," or similar words that convey the uncertainty of future events or outcomes. These statements are based on judgments the company believes are reasonable; however, Elcor's actual results could differ materially from those discussed here. Factors that could cause or contribute to such differences could include, but are not limited to, changes in demand, prices, raw material costs, transportation costs, changes in economic conditions of the various markets the company serves, changes in the amount and severity of inclement weather, as well as the other risks detailed herein and in the company's reports filed with the Securities and Exchange Commission, including but not limited to its Form 10-K for the fiscal year ending June 30, 2001, and subsequent Forms 8-K and 10-Q. ---------- Elcor, through its subsidiaries, manufactures Elk brand premium roofing and building products (over 90% of consolidated sales) and provides technologically advanced products and services to other industries. Each of Elcor's principal operating subsidiaries is the leader or one of the leaders within its particular market. Its common stock is listed on the New York Stock Exchange (ticker symbol: ELK). PRESS RELEASE Elcor Corporation August 23, 2002 Page 4 CONDENSED RESULTS OF OPERATIONS ($ in thousands)
Unaudited Audited Three Months Ended Fiscal Year Ended June 30, June 30, 2002 2001 2002 2001 ------------ ------------ ------------ ------------ SALES $ 131,004 $ 108,410 $ 506,526 $ 379,156 ------------ ------------ ------------ ------------ COSTS AND EXPENSES: Cost of sales 103,821 91,506 410,277 313,605 Selling, general & administrative 15,167 12,545 59,391 48,197 Noncash stock option compensation 3,939 636 6,034 0 Interest expense and other, net 1,614 1,360 6,087 3,391 ------------ ------------ ------------ ------------ Total Costs and Expenses 124,541 106,047 481,789 365,193 ------------ ------------ ------------ ------------ INCOME BEFORE INCOME TAXES 6,463 2,363 24,737 13,963 Provision for income taxes 2,660 905 9,644 5,201 ------------ ------------ ------------ ------------ NET INCOME $ 3,803 $ 1,458 $ 15,093 $ 8,762 ============ ============ ============ ============ INCOME PER COMMON SHARE-BASIC $ 0.20 $ 0.08 $ 0.78 $ 0.45 ============ ============ ============ ============ INCOME PER COMMON SHARE-DILUTED $ 0.19 $ 0.08 $ 0.77 $ 0.45 ============ ============ ============ ============ PROFORMA INFORMATION: EXCLUDING NONCASH STOCK OPTION COMPENSATION -- NET INCOME $ 6,363 $ 1,876 $ 19,015 $ 8,762 ============ ============ ============ ============ INCOME PER COMMON SHARE-BASIC $ 0.33 $ 0.10 $ 0.98 $ 0.45 ============ ============ ============ ============ INCOME PER COMMON SHARE-DILUTED $ 0.32 $ 0.10 $ 0.97 $ 0.45 ============ ============ ============ ============ AVERAGE COMMON SHARES OUTSTANDING Basic 19,412 19,229 19,311 19,322 ============ ============ ============ ============ Diluted 19,808 19,390 19,657 19,493 ============ ============ ============ ============
PRESS RELEASE Elcor Corporation August 23, 2002 Page 5 FINANCIAL INFORMATION BY COMPANY SEGMENTS ($ in thousands)
Unaudited Audited Three Months Ended Twelve Months Ended June 30, June 30, 2002 2001 2002 2001 --------- --------- --------- --------- SALES Building Products $ 120,140 $ 98,575 $ 459,673 $ 335,971 Electronics Manufacturing Services 5,972 29,528 Industrial Products 3,856 13,561 --------- --------- --------- --------- Other, Technologies 10,864 9,828 46,853 43,089 Corporate & Eliminations 0 7 0 96 --------- --------- --------- --------- $ 131,004 $ 108,410 $ 506,526 $ 379,156 ========= ========= ========= ========= OPERATING PROFIT (LOSS) Building Products $ 14,594 $ 7,269 $ 53,325 $ 25,539 Electronics Manufacturing Services (780) 1,392 Industrial Products 384 (735) --------- --------- --------- --------- Other, Technologies 358 (396) (4,354) 657 Corporate & Eliminations (6,875) (3,150) (18,147) (8,842) --------- --------- --------- --------- $ 8,077 $ 3,723 $ 30,824 $ 17,354 ========= ========= ========= =========
PRESS RELEASE Elcor Corporation August 23, 2002 Page 6 CONDENSED BALANCE SHEET (Audited, $ in thousands)
June 30, ASSETS 2002 2001 ----------- ----------- Cash and cash equivalents $ 12,436 $ 128 Receivables, net 94,764 73,660 Inventories 46,910 51,016 Deferred income taxes 5,727 3,977 Prepaid expenses and other 9,474 8,487 ----------- ----------- Total Current Assets 169,311 137,268 Property, plant and equipment, net 206,479 220,036 Other assets 5,638 2,744 ----------- ----------- Total Assets $ 381,428 $ 360,048 =========== ===========
June 30, LIABILITIES AND SHAREHOLDERS' EQUITY 2002 2001 ----------- ----------- Accounts payable and accrued liabilities $ 52,073 $ 48,034 Current maturities on long-term debt 0 0 ----------- ----------- Total Current Liabilities 52,073 48,034 Long-term debt, net 119,718 123,300 Deferred income taxes 33,545 26,612 Shareholders' equity 176,092 162,102 ----------- ----------- Total Liabilities and Shareholders' Equity $ 381,428 $ 360,048 =========== ===========
PRESS RELEASE Elcor Corporation August 23, 2002 Page 7 CONDENSED STATEMENT OF CASH FLOWS (Audited, $ in thousands)
Fiscal Year Ended June 30, 2002 2001 ----------- ----------- CASH FLOWS FROM: OPERATING ACTIVITIES Net income $ 15,093 $ 8,762 Adjustments to net income Depreciation and amortization, including $3,360 of 21,331 13,697 impairment in 2002 Deferred income taxes 5,183 4,374 Changes in assets and liabilities: Trade receivables (21,104) (1,948) Inventories 4,106 (10,051) Prepaid expenses and other (987) (4,175) Accounts payable and accrued liabilities 4,039 (253) ----------- ----------- Net cash from operations 27,661 10,406 ----------- ----------- INVESTING ACTIVITIES Additions to property, plant and equipment (11,378) (38,543) Other, net 741 127 ----------- ----------- Net cash from investing activities (10,637) (38,416) ----------- ----------- FINANCING ACTIVITIES Long-term borrowings (repayments), net (3,582) 32,000 Dividends on common stock (3,873) (3,851) Treasury stock transactions and other, net 2,739 (4,713) ----------- ----------- Net cash from financing activities (4,716) 23,436 ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 12,308 (4,574) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 128 4,702 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 12,436 $ 128 =========== ===========
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