-----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, KQ1pSI11fKfpTnGgkHtcX3a10dYWlmA+tfFV4Sdsp7SlOvyq8xjoTED4+0OOOjqT VLb/lGhPPBPXT+Wb6oN/pA== 0000950134-03-010250.txt : 20030718 0000950134-03-010250.hdr.sgml : 20030718 20030718130133 ACCESSION NUMBER: 0000950134-03-010250 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030717 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030718 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELKCORP 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: 03792682 BUSINESS ADDRESS: STREET 1: 14643 DALLAS PKWY STE 1000 STREET 2: WELLINGTON CTR CITY: DALLAS STATE: TX ZIP: 75254-8890 BUSINESS PHONE: 9728510500 MAIL ADDRESS: STREET 1: WELLINGTON CENTRE STE 1000 STREET 2: 14643 DALLAS PKWY CITY: DALLAS STATE: TX ZIP: 75254-8890 FORMER COMPANY: FORMER CONFORMED NAME: ELCOR CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ELCOR CHEMICAL CORP DATE OF NAME CHANGE: 19761119 8-K 1 d07523e8vk.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) July 17, 2003 ------------- ELKCORP -------------------------------------------- (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 7. Exhibits 99.1 Press release dated July 17, 2003 of ElkCorp. Item 9. Regulation FD Disclosure Press Release On July 17, 2003, 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 "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, actual results could differ materially from those discussed here as a result of a number of factors, including the following: 1. The company's building products business is substantially non-cyclical, but can be affected by weather, the availability of financing, insurance claims paying practices, 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. Temporary shortages or disruption in supply of raw materials or transportation do result from time to time from a variety of causes. If the company experiences -1- temporary shortages or disruption of supply of raw materials, operating results could be adversely affected and/or lower than projected. 4. 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. 5. Certain facilities of the company's subsidiaries must utilize hazardous materials in their production process. As a result, the company could 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. 6. 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. 7. 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 or its cost of alternative sources of capital. 8. Each of the company's businesses, especially Cybershield's business, is subject to the risks of technological changes and competition that is based on technology improvement or labor savings. These factors 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. Cybershield has lost substantial business as a result of most cellular handset production moving to Asia where Cybershield has no significant presence. Low labor costs in Asia make other coating processes competitive with those Cybershield would use. Cybershield's future viability may depend on the successful commercialization of the EXACT(TM) process, or other value added services, which are unproven as yet on a large commercial scale. -2- 9. 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 these or other events, including but not limited to acts of God, war or terrorism. 10. 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. Products using VersaShield fire retardant coatings have not yet produced significant commercial sales. Its market potential may be dependent on the stringency of federal and state regulatory requirements, which are difficult to predict. If such development activities are not successful, regulatory requirements are less stringent than currently predicted, 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. 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.elkcorp.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 12. Results of Operations and Financial Condition On July 17, 2003, ElkCorp issued a press release, a copy of which is furnished with this Form 8-K as Exhibit 99.1, announcing preliminary financial results for the fiscal quarter ended June 30, 2003, certain information about its prospects for the future, and related information. Presented in the press release (Exhibit 99.1) is a preliminary earnings comparison between the fourth quarter of fiscal 2003 and fiscal 2002 that excludes the negative effect of variable stock option accounting in the year-ago quarter. This comparison includes a non-GAAP financial measure presented for informational purposes only. Non-GAAP financial measures are not, and should not be considered as a substitute for financial information presented in accordance with generally accepted accounting principles, and may differ from non-GAAP financial measures used by other companies. Management believes that the non-GAAP financial measure included -3- in the press release is useful to investors because such information provides investors increased comparability between reporting periods. Had the comparison not excluded the negative effect of variable stock option accounting, preliminary fourth quarter fiscal 2003 earnings are 111% higher than earnings in the same quarter last year. After-tax noncash stock option expense is the result of a change in accounting made in fiscal 2002 from fixed awards with no compensation expense to variable awards, which can result in periodic expense or income. The Board of Directors terminated the feature that caused certain stock options to be accounted for as variable awards on August 13, 2002. Subsequent to that date, the company again began utilizing the fixed method of stock option accounting. Refer to the Noncash Stock Option Compensation footnote on page 44 in the company's Form 10-K for its fiscal year ended June 30, 2002 for a more detailed explanation of the accounting change. -4- 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. ElkCorp DATE: July 18, 2003 /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 -5- Index to Exhibits
Exhibit No. Description - ------- ----------- 99.1 Press Release dated July 17, 2003 of ElkCorp
EX-99.1 3 d07523exv99w1.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 ELKCORP EXPECTS SHARPLY HIGHER FOURTH QUARTER FISCAL 2003 EARNINGS; PERSISTENT SPRING RAINS DAMPENED OPERATING RESULTS; STRONG ROOFING DEMAND EXPECTED TO BENEFIT FIRST HALF OF FISCAL 2004; ORTLOFF MANAGEMENT SUCCESSION ANNOUNCED DALLAS, TEXAS, July 17, 2003. . . . ElkCorp said today that it preliminarily expects earnings of $0.40 per diluted share for its fourth fiscal quarter ending June 30, 2003. ElkCorp's audited financial statements for the quarter and full fiscal year ending June 30, 2003 will be issued after the completion of its financial audit, which is currently scheduled for mid-August. ElkCorp cautioned that its preliminary earnings estimate is subject to potential audit related adjustments. During the same quarter last year, ElkCorp earned $0.19 per diluted share, net of approximately $0.13 per diluted share of after-tax expenses resulting from variable stock option accounting that would not have existed under the fixed method of stock option accounting now utilized by the company. Excluding the negative effect of variable stock option accounting on the year-ago quarter, which management believes is appropriate for comparative purposes, preliminary fourth quarter fiscal 2003 earnings are 25% higher than earnings in the same quarter last year. HIGHLIGHTS OF THE QUARTER ENDING JUNE 30, 2003 o Unit shingle shipments increased 10.5% over the same quarter last year as a result of strong roof replacement demand in the Texas market driven by widespread spring hail damage. Roofing activity in Northeast and Midwest areas was below expectations as a result of persistent record spring rainfall from April through mid-June. o Shingle inventories were repositioned into the Texas market from other geographic areas to meet the strong demand being experienced in that market and to protect Texas market share. Unusually high shipping costs related to inventory repositioning impacted quarterly earnings by approximately $0.05 per share. o Average shingle pricing increased 5.9% from the year-ago quarter. Compared to the pricing in effect immediately following the early spring price increases, some weakness was experienced in the Northeast and Midwest, and the Texas market experienced notable strength. Overall, lower asphalt costs more than offset a moderate erosion of the early spring price increases. PRESS RELEASE ElkCorp July 17, 2002 Page 2 Compared to the preceding nine month period, ElkCorp experienced an improved relationship between shingle pricing and asphalt costs, and this improved relationship is expected to continue into fiscal 2004. o June 2003 unit shingle shipments set a new monthly ElkCorp record. Strong demand is expected to continue during the September 2003 quarter as more normal summer weather patterns permit increased roofing activity in areas previously affected by persistent spring rains. o Continued start-up losses at Elk Composite Building Products reduced quarterly income by about $0.04 per diluted share. o An expected loss at Cybershield reduced quarterly income by about $0.02 per share. o Estimated earnings for the quarter include approximately $0.05 per share of income from two Ortloff technology license agreements that were previously deferred as a result of a contingent refund provision contained in these license agreements. During the June 2003 quarter, these contingencies were eliminated and the previously deferred income was recognized. Approximately $0.05 per share of unrelated license fee income from new license agreements, previously expected to close during the June quarter, was delayed into the September quarter. OUTLOOK Thomas D. Karol, ElkCorp's Chairman of the Board and Chief Executive Officer, said, "We believe that Texas markets will continue to exhibit strength throughout the remainder of fiscal 2004, and we have begun to see accelerating shingle shipments in those markets previously affected by persistent spring rains. "As a result, we are optimistic for a strong start to our fiscal 2004 and we are comfortable with the current analyst consensus earnings forecast of $0.46 per diluted share for the three months ending September 30, 2003 and $1.60 per diluted share for the fiscal year ending June 30, 2004. "A large portion of our anticipated fiscal 2004 earnings improvement is expected to come from our Building Products subsidiaries. Approximately $0.25 per diluted share of earnings growth is expected to result from improved shingle pricing and asphalt cost dynamics. During the first nine months of fiscal 2003, significant asphalt cost escalation in an environment of stagnant shingle pricing reduced fiscal 2003 earnings by over $0.24 per diluted share. If current shingle pricing and asphalt cost relationships hold, we should recover this asphalt related margin compression in fiscal 2004. Remaining profit growth is expected to result from a planned 10% increase in unit volumes at our roofing and nonwoven operations, and from the maturation of our new composite wood business from start-up losses to positive income generation. Manufacturing yields at our composite wood operation have not yet improved to the level required for profitable operations, and it is possible that this business will experience another operating loss during the September quarter. "At other subsidiaries, expected earnings improvement at Cybershield and Chromium will likely be offset by lower profits at Ortloff, which had near record earnings during fiscal 2003. It is not yet possible to accurately predict the earnings potential of our new fire-barrier mattress fabrics, and our earnings outlook does not yet include a significant contribution from this source," Karol concluded. PRESS RELEASE ElkCorp July 17, 2002 Page 3 ELKCORP ANNOUNCES MANAGEMENT SUCCESSION AT ORTLOFF SUBSIDIARY John D. Wilkinson will succeed Arthur R. Laengrich as President and Chief Executive Officer of Ortloff Engineers, Ltd. Mr. Laengrich is retiring after 39 years of distinguished service to Ortloff and its predecessors. Mr. Wilkinson is a 29-year veteran of Ortloff and holds a Bachelor of Arts Degree in Chemical Engineering and Chemistry, and a Masters Degree in Chemical Engineering, both from Rice University. CONFERENCE CALL ElkCorp will host a conference call tomorrow, Friday, July 18, 2003, at 11:00 a.m. Eastern time (10:00 a.m. Central time). Interested parties can access the conference call by dialing (719) 457-2617 and providing confirmation code 482602. The conference call will also be broadcast live over the internet and can be accessed through the ElkCorp website at www.elkcorp.com (Investor Relations / Calls & Presentations) or by visiting www.firstcallevents.com. 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 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). Ortloff Engineers, Ltd., a subsidiary of ElkCorp, is a specialized consulting engineering firm located in Midland, Texas that provides technology licensing and engineering services to gas processing and sulfur recovery companies worldwide. -----END PRIVACY-ENHANCED MESSAGE-----