-----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, G5pjg0I28JdHd+8kg6/2nzS+jo7N+msuGDZx/nDoCBncb7d3YbL27wFBi7TCrBXQ 5yiU480OLy4tYNyblqgSBQ== 0001157523-04-009281.txt : 20041015 0001157523-04-009281.hdr.sgml : 20041015 20041014184214 ACCESSION NUMBER: 0001157523-04-009281 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041014 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041015 DATE AS OF CHANGE: 20041014 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: 041079673 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 a4741980.txt ELKCORP 8-K UNITED STATES 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): October 14, 2004 ---------------- ElkCorp ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Delaware -------------------------------------------------------------- (State or other jurisdiction of incorporation or organization) 1-5341 75-1217920 ------------------------ ------------------------------------ (Commission File Number) (I.R.S. Employer Identification No.) 14911 Quorum Drive, Suite 600, Dallas, Texas 75254-1491 ------------------------------------------------------- (Address of principal executive offices) (972) 851-0500 ---------------------------------------------------- (Registrant's telephone number, including area code) NOT APPLICABLE ------------------------------------------------------------- (Former name or former address, if changed since last report) --------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (18 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (18 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition - -------------------------------------------------------- Press Release - ------------- On October 14, 2004, the company issued a press announcing its financial results for the fiscal quarter ended September 30, 2004. A copy of the press release is furnished as Exhibit 99.1 to this report. In accordance with the safe harbor provisions of the securities law regarding forward-looking statements, the press release 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," "forecast," "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 therein. 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 in the press release, 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 ended June 30, 2004. Item 9.01 Financial Statements and Exhibits - -------------------------------------------- 99.1 Press release dated October 14, 2004 of ElkCorp. 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: October 15, 2004 /s/ Gregory J. Fisher ------------------------ --------------------- Gregory J. Fisher Senior Vice President, Chief Financial Officer and Controller /s/ Leonard R. Harral --------------------- Leonard R. Harral Vice President, Chief Accounting Officer and Treasurer INDEX TO EXHIBITS Exhibit No. Description - ----------- ----------- 99.1 Press release dated October 14, 2004 issued by ElkCorp. EX-99.1 2 a4741980ex991.txt PRESS RELEASE EXHIBIT 99.1 ElkCorp Announces Financial Results for the First Fiscal Quarter Ended September 30, 2004 DALLAS--(BUSINESS WIRE)--Oct. 14, 2004--ElkCorp (NYSE:ELK) announced today financial results for the first fiscal quarter, ended September 30, 2004. Earnings from continuing operations for the first quarter were $7.3 million, or $0.37 per diluted share, which exceeds the company's revised guidance of $0.31 to $0.32 per diluted share. Consolidated net income for the first quarter was $6.8 million, or $0.34 per diluted share. The company anticipates earnings from continuing operations for the second fiscal quarter to be in the range of $0.44 to $0.46 per diluted share and in the range of $2.00 to $2.05 per diluted share for fiscal 2005. First Quarter Overview ElkCorp Consolidated -- Consolidated net income from continuing operations was $7.3 million, or $0.37 per diluted share, compared to $10.1 million, or $0.51 per diluted share for the first quarter of fiscal 2004. -- Consolidated net income, including discontinued operations, was $6.8 million, or $0.34 per diluted share, compared to $9.1 million or $0.46 per diluted share reported for the same period in the prior fiscal year. -- Consolidated revenue was $163.4 million, compared to the $159.7 million in the first quarter of fiscal 2004. -- Shingle unit volume declined due in part to weaker than anticipated sales in areas that were affected by storms in the same quarter of the previous fiscal year. -- Pricing was up 2.3% over the prior year; however, it did not increase as much as previously anticipated for the quarter due to continued competitive pricing pressure, particularly in these storm affected areas. -- Expenses increased for the quarter, primarily due to the start-up of the new Tuscaloosa and composite lumber facilities. -- Interest expense also increased from the prior year due to an increase in net debt as well as the fact the company is no longer capitalizing interest associated with the new Tuscaloosa facility. Building Products Segment -- Revenue for the quarter in the building products segment was $160.6 million, compared to the $157.4 million reported in the first quarter of fiscal 2004, primarily due to higher nonwoven fabric and composite lumber volumes. Lower roofing sales volumes were offset by the increase in pricing. -- Operating profits were $18.0 million for the first quarter compared to the $21.9 million reported in the first quarter of fiscal 2004. Higher freight and raw material costs, higher expenses and lower sales volume were partially offset by increased pricing. -- The new Tuscaloosa facility is performing significantly better than original expectations and achieved break-even levels in the September quarter. -- Production in our nonwoven mat line is running at its normal levels following a production interruption in the quarter due to substandard third-party raw materials which resulted in an equipment malfunction. -- The composite lumber business recorded improved results over the first quarter of fiscal 2004; however, it experienced a loss for the quarter due to recycling of old inventory that was not consistent with the current formula. Other, Technologies Segment -- Combined revenue for the quarter was $2.8 million, compared to the $2.4 million reported in the first quarter of fiscal 2004. -- Operating loss for the first quarter was $0.5 million compared to a loss of $0.6 million in the same quarter in the prior year. These results were lower than anticipated for the quarter due to a delayed license fee in the Ortloff subsidiary. -- The delayed license agreement for Ortloff was signed following the close of the quarter and the revenue is expected to be recognized in the December quarter. -- Plans to sell both Chromium and Ortloff are proceeding well. While the company is actively seeking potential buyers, both businesses are expected to have strong earnings for the fiscal year, enabling ElkCorp to be selective in the buyers for each of these businesses. -- Storehouse Furniture, a furniture chain with stores in 15 states, now offers VersaShield(R) at their stores and features VersaShield fire barrier on all of the mattresses and bed spring sets in their current nationally distributed catalog. Discontinued Operations -- The company has preliminarily accepted an offer for the sale of Cybershield's former Canton, Ga. facility, which resulted in an additional impairment of $0.4 million, net of tax, in the September quarter. Financial Condition At September 30, 2004, long-term debt of $155.0 million included $5.0 million in valuation adjustments required by hedge accounting to match the combined $5.0 million fair market value of two interest rate hedges recorded in other assets. The contractual principal amount of ElkCorp's long-term debt was $150.0 million. Liquidity consisted of $0.3 million of cash and $116.6 million of borrowing availability under a $125 million committed revolving credit facility due November 30, 2008. Net debt (contractual principal debt minus cash) was $ 149.7 million, and the net debt to capital ratio was 40.3%. The company has executed an agreement to issue an additional $50.0 million in senior notes scheduled to be closed, subject to the company's satisfaction of certain conditions, on November 15, 2004. These new notes mature in November 2014 and carry a coupon rate of 6.28%. The proceeds will be used to provide funds for growth and expansion initiatives, including possible acquisitions to extend our premium building products line of business. Business Outlook "We anticipated the first quarter would be challenging due to starting-up our new facilities in the composite lumber and roofing businesses and lower sales in regions affected by storms in the first fiscal quarter of 2004. However, sales in these areas declined more than we had originally forecast in addition to continued competitive pricing pressure that made the quarter more difficult than we had anticipated, " said Thomas Karol, chairman and chief executive officer of ElkCorp. "Additionally, the four hurricanes that affected the Southeast and much of the East Coast negatively impacted our earnings for the quarter through delays in the shipments of product to these areas and the slowdown in production in both our Tuscaloosa and Myerstown facilities. We have already begun to see increased orders in the hurricane affected areas and believe that the demand generated from the hurricanes will positively impact our earnings beginning in the December quarter and should compensate for the lower than anticipated earnings for the quarter throughout the coming fiscal year. We also announced a price increase that went into effect on September 27 and an additional increase for November. These increases should assist us in offsetting the escalating raw material and transportation costs due to the rising price of oil and are consistent with industry trends. We believe that we will be able to realize a larger portion of these increases due to the demand generated in the hurricane affected areas." "During the quarter we achieved some key milestones in our core businesses that we believe will support our growth in these areas going forward. We continue to make progress in penetrating the fencing, decking and railing market for our composite lumber products and have also made significant advancements in the transportation industry. Our solution has created substantial interest in this market and continues to perform well in transportation applications. We believe the interest we are receiving in these markets; our increasing penetration into the fencing, decking and railing market; the added capacity supplied by the expansion of our facility along with other initiatives we have planned for this platform throughout the year will properly position us for substantial growth in second half of fiscal 2005. We also achieved a key milestone in our VersaShield product line. StoreHouse Furniture is offering VersaShield at their stores nationwide and featured VersaShield fire barrier on all of the mattresses and bed spring sets in their current nationally distributed catalog. We are pleased with the advancements we are making in our core product platforms and we look forward to other significant achievements in the coming quarters." Mr. Karol concluded, "We continue to execute on our growth strategy and believe we have the tools in place to grow our business in the coming fiscal year. The growth initiatives for fiscal 2005 include the added capacity from our new Tuscaloosa and composite lumber facilities, expanding into other high-growth markets in our existing product platforms and the positive impact of the increased shingle demand in the areas affected by the hurricanes. We believe we are well positioned to achieve our goals for fiscal 2005 and beyond." Earnings Outlook The Company expects earnings from continuing operations for the second quarter of fiscal 2005 to be in the range of $0.44 to $0.46 per diluted share, and to be in the range of $2.00 to $2.05 per diluted share for fiscal 2005. Conference Call The ElkCorp management team will host a conference call and live audio webcast to discuss the first fiscal quarter financial results beginning at 11:00 a.m. (EDT) on Friday, October 15, 2004. Investors and other interested parties are invited to listen to the live webcast by visiting the investor relations section of the ElkCorp Web site at www.elkcorp.com. A replay of the conference call will be available for 24 hours beginning at 1 p.m. EDT and may be accessed by dialing 1-888-286-8010 and entering passcode 27751878. The webcast replay will be available on the investor relations section of company's Web site. 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," "vision," "outlook," "believe," "estimate," "potential," "forecast," "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, 2004. ElkCorp, through its subsidiaries, manufactures Elk brand premium roofing and building products (over 90% of consolidated revenue) and provides technologically advanced products and services to other industries. Each of ElkCorp's principal operating subsidiaries is a leader within its particular market. Its common stock is listed on the New York Stock Exchange (NYSE:ELK). See www.elkcorp.com for more information. Condensed Results of Operations ($ in thousands) Three Months Ended Twelve Months Ended September 30, September 30, 2004 2003 2004 2003 --------- --------- --------- --------- Sales $163,385 $159,739 $576,622 $529,388 --------- --------- --------- --------- Costs and Expenses: Cost of sales 133,478 126,555 460,739 422,834 Selling, general & administrative: 16,077 15,566 63,763 59,731 Interest expense, net 2,094 1,383 6,022 5,680 --------- --------- --------- --------- Total Costs and Expenses 151,649 143,504 530,524 488,245 --------- --------- --------- --------- Income from Continuing Operations Before Income Taxes 11,736 16,235 46,098 41,143 Provision for income taxes 4,436 6,155 17,208 15,671 --------- --------- --------- --------- Income from Continuing Operations 7,300 10,080 28,890 25,472 Loss from Discontinued Operations, Net (491) (943) (10,712) (1,231) --------- --------- --------- --------- Net Income $6,809 $9,137 $18,178 $24,241 ========= ========= ========= ========= Income (Loss) Per Common Share -- Basic Continuing Operations $0.37 $0.52 $1.47 $1.30 Discontinued Operations (0.02) (0.05) (0.54) (0.06) --------- --------- --------- --------- $0.35 $0.47 $0.93 $1.24 ========= ========= ========= ========= Income (Loss) Per Common Share -- Diluted Continuing Operations $0.37 $0.51 $1.45 $1.29 Discontinued Operations (0.03) (0.05) (0.54) (0.06) --------- --------- --------- --------- $0.34 $0.46 $0.91 $1.23 ========= ========= ========= ========= Average Common Shares Outstanding Basic 19,671 19,545 19,641 19,502 ========= ========= ========= ========= Diluted 19,915 19,823 19,948 19,657 ========= ========= ========= ========= Financial Information by Company Segments ($ in thousands) Three Months Ended Twelve Months Ended September 30, September 30, 2004 2003 2004 2003 --------- --------- --------- --------- Sales Building Products $160,564 $157,367 $560,773 $511,053 Other, Technologies 2,821 2,372 15,849 18,335 --------- --------- --------- --------- $163,385 $159,739 $576,622 $529,388 ========= ========= ========= ========= Operating Profit (Loss) Building Products $18,017 $21,904 $63,143 $53,307 Other, Technologies (509) (648) 2,601 5,176 Corporate & Eliminations (3,678) (3,638) (13,624) (11,660) --------- --------- --------- --------- $13,830 $17,618 $52,120 $46,823 ========= ========= ========= ========= Condensed Balance Sheet ($ in thousands) September 30, Assets 2004 2003 - ------ --------- --------- Cash and cash equivalents $294 $22,759 Receivables, net 117,643 116,529 Inventories 64,122 39,256 Deferred income taxes 4,169 2,872 Prepaid expenses and other 8,583 4,439 Discontinued operations 2,944 18,511 --------- --------- Total Current Assets 197,755 204,366 Property, plant and equipment, net 275,334 239,023 Other assets 9,314 8,308 --------- --------- Total Assets $482,403 $451,697 ========= ========= September 30, Liabilities and Shareholders' Equity 2004 2003 - ------------------------------------ --------- --------- Accounts payable and accrued liabilities $58,081 $54,907 Discontinued operations 278 1,668 Current maturities on long-term debt 0 0 --------- --------- Total Current Liabilities 58,359 56,575 Long-term debt, net 154,987 150,492 Deferred income taxes 47,360 39,392 Shareholders' equity 221,697 205,238 --------- --------- Total Liabilities and Shareholders' Equity $482,403 $451,697 ========= ========= Condensed Statement of Cash Flows ($ in thousands) Three Months Ended September 30, 2004 2003 --------- --------- Cash Flows From: Continuing Operating Activities Income from continuing operations $7,300 $10,080 Adjustments to income from continuing operations Depreciation and amortization 5,628 4,266 Deferred income taxes 4,939 1,630 Changes in assets and liabilities: Trade receivables 3,448 1,723 Inventories (1,993) 14,265 Prepaid expenses and other 4 2,250 Accounts payable and accrued liabilities (4,585) 580 --------- --------- Net cash from continuing operating activities 14,741 34,794 Net cash from discontinued operations 1,408 371 --------- --------- Net cash from operating activities 16,149 35,165 --------- --------- Investing Activities Additions to property, plant and equipment (9,846) (17,110) Other, net (829) 87 --------- --------- Net cash from investing activities (10,675) (17,023) --------- --------- Financing Activities Long-term payments on Revolving Credit Facility, net (5,300) 0 Dividends on common stock (999) (980) Treasury stock transactions and other, net 846 541 --------- --------- Net cash from financing activities (5,453) (439) --------- --------- Net Increase in Cash and Cash Equivalents 21 17,703 Cash and Cash Equivalents at Beginning of Year 273 5,056 --------- --------- Cash and Cash Equivalents at End of Period $294 $22,759 ========= ========= CONTACT: ElkCorp, Dallas Stephanie Elwood, 972-851-0472 -----END PRIVACY-ENHANCED MESSAGE-----