EX-99.1 3 d06138exv99w1.txt PRESS RELEASE EXHIBIT 99.1 Press Release dated May 15, 2003 of ElkCorp 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 ELKCORP TO DEFER RECOGNITION OF CERTAIN TECHNOLOGY LICENSE FEES DALLAS, TEXAS, May 15, 2003 . . . . ElkCorp said today that its earnings for the three and nine month periods ending March 31, 2003, as reported on Form 10-Q, will reflect the deferral of approximately $1.7 million of technology license fee revenue and $0.9 million of related after-tax earnings ($0.05 per diluted share) that were previously reported as current revenue and earnings in the preliminary financial results included in its third quarter earnings press release of April 16, 2003. Subsequent to ElkCorp's third quarter earnings press release of April 16, 2003, and prior to the filing of ElkCorp's financial statements on Form 10-Q for the three and nine month periods ending March 31, 2003, ElkCorp management discovered that two technology license agreements executed during the March 2003 fiscal quarter, related to a project located in Qatar, (the "Subject Licenses") contained a provision entitling the technology licensee to a refund of previously paid technology fees in the event that the construction of the gas processing project for which Ortloff's proprietary gas processing technology was conveyed was cancelled or abandoned prior to completion. None of ElkCorp's other executed license agreements contain refund provisions similar to the Subject Licenses. As a result of this refund provision, the company has determined that the license revenues from the Subject Licenses should be deferred until the aforementioned refund contingency is eliminated through the completed construction of the related gas processing plants. Deferred revenues and earnings from the Subject Licenses are therefore expected to be recognized in future periods. Condensed financial statements for the three and nine month periods ending March 31, 2003, as reported on Form 10-Q, are attached. 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 within the meaning of the Private Securities Litigation Reform Act of 1995. These statements usually are accompanied by words /more PRESS RELEASE ElkCorp May 15, 2003 Page 2 such as "optimistic," "outlook," "believe," "estimate," "potential," "project," "expect," "anticipate," "plan," "predict," "could," "should," "may," "likely," or similar words that convey the uncertainty of future events or outcomes. These statements are based on judgments the company believes are reasonable; however, ElkCorp'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, acts of God, war or terrorism, 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, 2002, and subsequent Forms 8-K and 10-Q. ------- ElkCorp, 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 ElkCorp'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). /more PRESS RELEASE ElkCorp May 15, 2003 Page 3 CONDENSED RESULTS OF OPERATIONS (Unaudited, $ in thousands)
Trailing Three Months Ended Nine Months Ended Twelve Months Ended March 31, March 31, March 31, 2003 2002 2003 2002 2003 2002 ---------- ---------- ---------- ---------- ---------- ---------- SALES $ 129,772 $ 119,175 $ 358,917 $ 375,522 $ 491,603 $ 483,932 ---------- ---------- ---------- ---------- ---------- ---------- COSTS AND EXPENSES: Cost of sales 105,550 104,696 290,109 311,307 389,079 402,813 Selling, general & administrative 15,548 8,912 43,620 39,373 63,824 51,918 Noncash stock option compensation 0 (3,381) (5,378) 2,096 (1,440) 2,732 Interest expense, net 1,469 856 4,522 4,473 6,136 5,833 ---------- ---------- ---------- ---------- ---------- ---------- Total Costs and Expenses 122,567 111,083 332,873 357,249 457,599 463,296 ---------- ---------- ---------- ---------- ---------- ---------- INCOME BEFORE INCOME TAXES 7,205 8,092 26,044 18,273 34,004 20,636 Provision for income taxes 2,743 2,965 9,770 6,983 12,999 7,884 ---------- ---------- ---------- ---------- ---------- ---------- NET INCOME $ 4,462 $ 5,127 $ 16,274 $ 11,290 $ 21,005 $ 12,752 ========== ========== ========== ========== ========== ========== INCOME PER COMMON SHARE-BASIC $ 0.23 $ 0.26 $ 0.84 $ 0.59 $ 1.08 $ 0.66 ========== ========== ========== ========== ========== ========== INCOME PER COMMON SHARE-DILUTED $ 0.23 $ 0.26 $ 0.83 $ 0.58 $ 1.07 $ 0.65 ========== ========== ========== ========== ========== ========== PRO FORMA INFORMATION: NET INCOME $ 4,462 $ 5,127 $ 16,274 $ 11,290 $ 21,005 $ 12,752 AFTERTAX NONCASH STOCK OPTION COMPENSATION 0 (2,198) (3,496) 1,362 (936) 1,776 ---------- ---------- ---------- ---------- ---------- ---------- PROFORMA EARNINGS $ 4,462 $ 2,929 $ 12,778 $ 12,652 $ 20,069 $ 14,528 ========== ========== ========== ========== ========== ========== INCOME PER COMMON SHARE-BASIC $ 0.23 $ 0.15 $ 0.66 $ 0.66 $ 1.03 $ 0.75 ========== ========== ========== ========== ========== ========== INCOME PER COMMON SHARE-DILUTED $ 0.23 $ 0.15 $ 0.65 $ 0.65 $ 1.02 $ 0.74 ========== ========== ========== ========== ========== ========== AVERAGE COMMON SHARES OUTSTANDING Basic 19,477 19,358 19,474 19,278 19,459 19,266 ========== ========== ========== ========== ========== ========== Diluted 19,570 19,705 19,581 19,606 19,641 19,552 ========== ========== ========== ========== ========== ==========
PRESS RELEASE ElkCorp May 15, 2003 Page 4 FINANCIAL INFORMATION BY COMPANY SEGMENTS (Unaudited, $ in thousands)
Trailing Three Months Ended Nine Months Ended Twelve Months Ended March 31, March 31, March 31, 2003 2002 2003 2002 2003 2002 ---------- ---------- ---------- ---------- ---------- ---------- SALES Building Products $ 116,981 $ 111,544 $ 328,919 $ 339,533 $ 449,059 $ 438,108 Other, Technologies 12,791 7,631 29,998 35,989 42,544 45,817 Corporate & Eliminations 0 0 0 0 0 7 ---------- ---------- ---------- ---------- ---------- ---------- $ 129,772 $ 119,175 $ 358,917 $ 375,522 $ 491,603 $ 483,932 ========== ========== ========== ========== ========== ========== OPERATING PROFIT (LOSS) Building Products $ 8,081 $ 14,434 $ 30,070 $ 38,731 $ 44,664 $ 46,000 Other, Technologies 3,088 (5,878) 3,188 (4,712) 5,145 (5,108) Corporate & Eliminations Before noncash stock option compensation (2,495) (2,989) (8,070) (9,177) (11,109) (11,691) Noncash stock option compensation 0 3,381 5,378 (2,096) 1,440 (2,732) ---------- ---------- ---------- ---------- ---------- ---------- Total Corporate & Eliminations (2,495) 392 (2,692) (11,273) (9,669) (14,423) ---------- ---------- ---------- ---------- ---------- ---------- $ 8,674 $ 8,948 $ 30,566 $ 22,746 $ 40,140 $ 26,469 ========== ========== ========== ========== ========== ==========
PRESS RELEASE ElkCorp May 15, 2003 Page 5 CONDENSED BALANCE SHEET (Unaudited, $ in thousands)
March 31, ASSETS 2003 2002 ------ ---------- ---------- Cash and cash equivalents $ 12,033 $ 35 Receivables, net 102,654 93,065 Inventories 59,443 42,101 Deferred income taxes 3,841 5,017 Prepaid expenses and other 8,451 9,423 ---------- ---------- Total Current Assets 186,422 149,641 Property, plant and equipment, net 226,764 207,935 Other assets 12,887 5,660 ---------- ---------- Total Assets $ 426,073 $ 363,236 ========== ==========
March 31, LIABILITIES AND SHAREHOLDERS' EQUITY 2003 2002 ------------------------------------ ---------- ---------- Accounts payable and accrued liabilities $ 49,711 $ 52,896 Current maturities on long-term debt 0 0 ---------- ---------- Total Current Liabilities 49,711 52,896 Long-term debt, net 151,131 106,000 Deferred income taxes 35,643 32,002 Shareholders' equity 189,588 172,338 ---------- ---------- Total Liabilities and Shareholders' Equity $ 426,073 $ 363,236 ========== ==========
PRESS RELEASE ElkCorp May 15, 2003 Page 6 CONDENSED STATEMENT OF CASH FLOWS (Unaudited, $ in thousands)
Nine Months Ended March 31, 2003 2002 ---------- ---------- CASH FLOWS FROM: OPERATING ACTIVITIES Net income $ 16,274 $ 11,290 Adjustments to net income Depreciation and amortization 13,627 17,007 Deferred income taxes 3,984 4,350 Changes in assets and liabilities: Trade receivables (7,710) (19,405) Inventories (12,305) 8,915 Prepaid expenses and other 1,102 (936) Accounts payable and accrued liabilities (2,362) 4,862 ---------- ---------- Net cash from operations 12,610 26,083 ---------- ---------- INVESTING ACTIVITIES Additions to property, plant and equipment (32,802) (8,250) Acquisition of business (2,224) 0 Other, net (222) 530 ---------- ---------- Net cash from investing activities (35,248) (7,720) ---------- ---------- FINANCING ACTIVITIES Long-term borrowings (repayments), net 25,000 (17,300) Dividends on common stock (2,923) (2,900) Treasury stock transactions and other, net 158 1,744 ---------- ---------- Net cash from financing activities 22,235 (18,456) ---------- ---------- NET INCREASE IN CASH AND CASH EQUIVALENTS (403) (93) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 12,436 128 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 12,033 $ 35 ========== ==========