-----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, T+2wme24Yxq2Shykwdva49YZKbkct9I1scpREMXVo/FpOQtxWZovBl8CI5xpwSh6 wdOc1jlHGSxHVjj55P8XNg== 0000891092-04-003233.txt : 20040715 0000891092-04-003233.hdr.sgml : 20040715 20040715161820 ACCESSION NUMBER: 0000891092-04-003233 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040715 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040715 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENCORP INC CENTRAL INDEX KEY: 0000040888 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED RUBBER PRODUCTS, NEC [3060] IRS NUMBER: 340244000 STATE OF INCORPORATION: OH FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01520 FILM NUMBER: 04916014 BUSINESS ADDRESS: STREET 1: HIGHWAY 50 & AEROJET ROAD CITY: RANCHO CORDOVA STATE: CA ZIP: 95670 BUSINESS PHONE: 9163554000 MAIL ADDRESS: STREET 1: HIGHWAY 50 & AEROJET ROAD CITY: RANCHO CORDOVA STATE: CA ZIP: 95670 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL TIRE & RUBBER CO DATE OF NAME CHANGE: 19840330 8-K 1 e18419_8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 15, 2004 GenCorp Inc. -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Ohio 1-01520 34-0244000 ---- ------- ---------- (State or Other Jurisdiction (Commission File IRS Employer of Incorporation) Number) Identification No.) Highway 50 and Aerojet Road, Rancho Cordova, California 95670 - ------------------------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) P.O. Box 537012, Sacramento, California 95853-7012 - --------------------------------------- ---------- (Mailing Address) (Zip Code) Registrant's telephone number, including area code (916) 355-4000 Item 7. Exhibits 99.1 GenCorp Inc.'s press release dated July 15, 2004. Item 9. Regulation FD Disclosure See "Item 12. Results of Operations and Financial Condition" below. Item 12. Results of Operations and Financial Condition Attached hereto as Exhibit 99.1 and incorporated herein by reference is the text of the registrant's press release issued on July 15, 2004 in which GenCorp Inc. reported financial results for the second quarter ended May 31, 2004. As discussed in Exhibit 99.1, the press release contains forward-looking statements within the meaning of the federal securities laws. These statements are present expectations, and are subject to the limitations listed therein and in GenCorp's other SEC reports, including that actual events or results may differ materially from those in the forward-looking statements. The foregoing information (including Exhibit 99.1) is being furnished under "Item 9. Regulation FD Disclosure" and "Item 12. Results of Operations and Financial Condition." Such information (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. The filing of this Report and the furnishing of this information pursuant to Items 9 and 12 (including Exhibit 99.1) do not mean that such information is material or that disclosure of such information is required. 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. GENCORP INC. By: /s/ Mark A. Whitney ------------------------- Name: Mark A. Whitney Title: Vice President, Law; Deputy General Counsel and Assistant Secretary Dated: July 15, 2004 EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1 GenCorp Inc.'s press release dated July 15, 2004. EX-99.1 2 e18419ex99-1.txt PRESS RELEASE Exhibit 99.1 GenCorp Reports 2004 2nd Quarter Results 2nd Quarter Highlights - 35% increase in sales from continuing operations this quarter compared with last year's second quarter. Aerospace & Defense sales rise 52% with the contribution of the October 2003 ARC acquisition. - GDX Automotive becomes discontinued operation in anticipation of sale, and a one-time charge of $261 million recorded. $6.25 loss per diluted share from discontinued operations. SACRAMENTO, Calif., July 15 /PRNewswire-FirstCall/ -- GenCorp Inc. (NYSE: GY) today reported sales from continuing operations for the second quarter 2004 of $136 million, compared to $101 million for the second quarter 2003, an increase of 35%. Sales for the first six months of 2004 were $260 million compared to $181 million for the first six months of 2003, an increase of 44%. Sales increases in both periods primarily reflect contributions by the propulsion business of Atlantic Research Corporation (ARC) acquired in October 2003. Both periods reflect the GDX Automotive segment classified as a discontinued operation as a result of the Company's announced plans to sell the business. In connection with these plans, the Company recorded a one-time charge of $261 million at the end of the second quarter 2004. Including the charge, the Company reported a net loss of $312 million ($7.06 per share) for the second quarter 2004 compared to net income of $10 million ($0.22 per share) for the second quarter 2003. The loss from continuing operations for the second quarter 2004 was $36 million ($0.81 per share), compared to income of $1 million ($0.02 per share) for the second quarter 2003. The decrease in earnings from the 2003 period is the result primarily of a $13 million increase in non-cash pretax expense from employee retirement benefit plans, as well as higher interest expense associated with higher debt levels, including amounts incurred to finance the ARC acquisition, and a tax provision to reflect the uncertainty of realizing deferred tax benefits, given historical losses. The net loss for the first six months of 2004 was $331 million ($7.51 per share), including the loss from discontinued operations, compared to net income of $13 million ($0.30 per share) for the first six months of 2003. The loss in the first half of 2004 from continuing operations was $45 million ($1.03 per share) compared to income of $2 million ($0.06 per share) in 2003. The decrease in earnings for the first half of 2004 includes a $26 million increase in non-cash pretax expense from employee retirement benefit plans, higher interest expense, and the tax provision impact as described above. "We are beginning an important new phase in GenCorp's history, with our plans to sell our GDX Automotive business. We are transforming ourselves into a strategically focused corporation that aims to deliver better returns on our capital than we have been able to do in the recent past," said Terry L. Hall, chairman of the Board, president and chief executive officer. "Our Aerospace & Defense business continues to experience steady performance improvement and increasing business opportunities. To date, we have successfully integrated the ARC business. In addition, we were able to further strengthen our capabilities and market position with the acquisition last month of the THAAD and MK-72 programs and related assets from Pratt & Whitney Space Propulsion." Hall continued, "Taken together, these acquisitions expand our participation in bedrock aerospace and defense programs that are expected to be in production for many years to come. At the same time, we continue our efforts to unlock the value of our considerable real estate holdings in the suburban Sacramento community." Operations Review Aerospace and Defense Segment Second quarter 2004 sales increased to $125 million compared to $82 million in the second quarter 2003. Sales for the first six months of 2004 were $238 million compared to $144 million last year. The increases include sales generated by the acquired ARC business of $42 million in the second quarter and $81 million for the first six months. Second quarter segment performance in 2004 was $8 million compared to $10 million in 2003. Excluding the effect of employee retirement benefit plan income or expense, second quarter segment performance was $15 million in 2004 compared to $9 million in 2003. For the first six months of 2004, segment performance was $12 million compared to $18 million in 2003. Excluding the effect of employee retirement plan income or expense, segment performance for the first six months was $26 million in 2004 compared to $16 million in 2003. For both the second quarter and the first six months, the increase reflects the impact of higher sales, favorable contract performance and net positive changes in program mix. During the second quarter of 2004, an Aerojet/Roxel U.K. team was selected by Lockheed Martin to supply the rocket motor for the Joint Common Missile (JCM) program. The U.S. Army, Navy and Marine Corps are expected to procure up to 54,000 JCM rounds, which are forecasted to be in use by 2010. The Company expects a contract award for the system design and development phase during the third quarter of 2004. As of May 31, 2004, Aerojet's contract backlog was $876 million compared to $830 million as of November 30, 2003. Funded backlog, which includes only the amount of those contracts for which money has been directly authorized by the U.S. Congress, or for which a firm purchase order has been received by a commercial customer, was approximately $504 million as of May 31, 2004, compared to $425 million as of November 30, 2003. Real Estate Segment The Company did not sell any real estate assets in the first six months of either 2004 or 2003. Segment performance, consisting of income from leasing activities, was $1 million in both second-quarter periods, and $2 million in both six-month periods. Fine Chemicals Segment Second quarter 2004 sales were $13 million compared to $17 million for the second quarter 2003. For the first six months, sales were $26 million compared to $34 million last year. The decrease reflects the timing of sales of large production orders with extended manufacturing schedules. Currently, Fine Chemicals is expected to run at full capacity for the remainder of the fiscal year, and is expected to have improved segment performance for the last two quarters of 2004. Second quarter segment performance in 2004 was break-even compared to $4 million in the prior year period. Segment performance was also break-even for the first six months, compared to $6 million in the first six months of 2003. As of May 31, 2004, Fine Chemicals' backlog was $48 million compared to $57 million as of November 30, 2003. Additional Information Interest expense increased to $8 million in the second quarter 2004 from $5 million in 2003. Interest expense increased to $16 million in the first six months of 2004 from $9 million in the first six months of 2003. The increase in both periods is due to higher debt levels and higher average interest rates. Additional debt includes amounts incurred to finance the ARC acquisition. Total debt increased from $538 million as of November 30, 2003 to $595 million as of May 31, 2004 and cash decreased from $64 million as of November 30, 2003 to $51 million as of May 31, 2004. The increase in net debt reflects increased working capital needs in the first six months of 2004 for Aerojet, Fine Chemicals and discontinued operations, partially offset by the full payment of an outstanding receivable in the amount of $20 million for a land sale in 2001. As of May 31, 2004, the Company had availability under its credit facilities of $89 million, including $8 million related to discontinued operations, compared to $63 million, including $11 million related to discontinued operations, as of November 30, 2003. Corporate and other expenses were $8 million in the second quarter of 2004 compared to $10 million in the second quarter of 2003, and $15 million for the first six months of both 2004 and 2003. An income tax provision relating to continuing operations of $24 million for the second quarter of 2004 and $18 million for the first six months of 2004 was recorded to reflect the uncertainty of realizing the deferred tax benefits, given historical losses. Similarly, no tax benefit has been included in the charge related to the classification of the GDX Automotive business as a discontinued operation, as realization is also uncertain. Forward-Looking Statements This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this release and in subsequent discussions with the Company's management, other than historical information, may be deemed to be forward- looking statements. These statements present (without limitation) the expectations, beliefs, plans and objectives of management and future financial performance and assumptions underlying, or judgments concerning, the matters discussed in such statements. The words "believe," "estimate," "anticipate," "project" and "expect," and similar expressions, are intended to identify forward-looking statements. Forward-looking statements involve certain risks, estimates, assumptions and uncertainties, including with respect to future sales and activity levels, cash flows, contract performance, the outcome of litigation and contingencies, environmental remediation and anticipated costs of capital. A variety of factors could cause actual results or outcomes to differ materially from those expected and expressed in the Company's forward-looking statements. Some important risk factors that could cause actual results or outcomes to differ from those expressed in the forward-looking statements include, but are not limited to, the following: -- legal and regulatory developments that may have an adverse impact on the Company or its segments. For example: 1) the Company's operations and financial condition could be adversely impacted if the judgment order in the amount of approximately $29 million entered November 21, 2002 against GenCorp in GenCorp Inc. v. Olin Corporation (U.S. District Court for the Northern District of Ohio, Eastern Division), is upheld on appeal and the offsets to which the Company believes it is entitled are not realized; 2) restrictions on real estate development that could delay the Company's proposed real estate development activities; 3) a change in toxic tort or asbestos litigation trends that is adverse to the Company; or 4) changes in international tax laws or currency controls; -- changes in Company-wide or business segment strategies, which may result in changes in the types or mix of business in which the Company is involved or chooses to invest; -- changes in U.S., global or regional economic conditions, which may affect, among other things, 1) customer funding for the purchase of aerospace and defense products, which may impact the Aerospace and Defense segment's business base and, as a result, impact its ability to recover environmental costs; 2) healthcare spending and demand for the pharmaceutical ingredients produced by the Fine Chemicals segment; 3) the Company's ability to successfully complete its real estate activities; and 4) the funded status and costs related to the Company's employee retirement benefit plans; -- risks associated with the Company's Aerospace and Defense segment's role as a defense contractor including: 1) the right of the U.S. government to terminate any contract for convenience; 2) modification or termination of U.S. government contracts due to lack of congressional funding; and 3) the lack of assurance that bids for new programs will be successful, or that customers will exercise contract options or seek or follow-on contracts with the Company due to the competitive marketplace in which the Company competes; -- changes in U.S. and global financial and equity markets, including market disruptions and significant currency or interest rate fluctuations, that may impede the Company's access to, or increase the cost of, external financing for its operations and investments or materially affect the Company's results of operations and cash flows; -- increased competitive pressures, which may, among other things, affect the performance of the Company's Aerospace and Defense and Fine Chemicals segments, as well as the GDX Automotive discontinued operations; -- labor disputes, which may lead to increased costs or disruption of operations in the Company's Aerospace and Defense, and Fine Chemicals segments, as well as the GDX Automotive discontinued operations; -- technological developments or patent infringement claims; which may impact the use of critical technologies in the Company's Aerospace and Defense, and Fine Chemicals segments, as well as its GDX Automotive discontinued operations, leading to reduced sales or increased costs; -- an unexpected adverse result or required cash outlay in the toxic tort cases, environmental proceedings or other litigation, or change in proceedings or investigations pending against the Company; -- other risks associated with the GDX Automotive discontinued operations, such as, 1) changes in U.S., global or regional economic conditions, which may affect, among other things, consumer spending on new vehicles thereby reducing demand for products made by the GDX Automotive business; 2) increased outsourcing of production of key vehicle sub-assemblies requiring industry suppliers, such as the GDX Automotive business, to demonstrate the ability to be reliable supplier of integrated components to maintain and increase market share; and 3) changes in product mix, which may affect automotive vehicle preferences and demand for GDX Automotive's products; and -- risks attendant to the sale of the GDX Automotive business, including the ability of the Company to identify a buyer for the business as well as the timing and terms of any proposed sale and its ultimate consummation. This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. These and other factors are described in more detail in the Company's Annual Report on Form 10-K for the year ended November 30, 2003 and its subsequent filings with the U.S. Securities and Exchange Commission. Additional risks may be described from time-to-time in future filings with the U.S. Securities and Exchange Commission. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All such risk factors are difficult to predict, contain material uncertainties that may affect actual results and may be beyond the Company's control. GenCorp is a technology-based manufacturer with positions in the aerospace and defense, pharmaceutical fine chemicals, real estate and automotive industries. Additional information about GenCorp can be obtained by visiting the Company's web site at www.GenCorp.com. Consolidated Statement of Income GenCorp Inc. Three Months Ended Six Months Ended (Dollars in millions, except May 31, May 31, May 31, May 31, per share amounts) 2004 2003 2004 2003 (Unaudited) (Unaudited) Net Sales $136 $101 $260 $181 Costs and Expenses: Cost of products sold 115 78 224 137 Selling, general and administrative 15 10 28 19 Depreciation and amortization 10 8 20 17 Interest expense 8 5 16 9 Other income, net -- -- (1) (3) Income (loss) from continuing operations before income taxes (12) -- (27) 2 Income tax benefit (provision) (24) 1 (18) -- Income (loss) from continuing operations (36) 1 (45) 2 Income (loss) from discontinued operations, net of tax (276) 9 (286) 11 Net (Loss) Income $(312) $10 $(331) $13 Income (Loss) Per Share of Common Stock Basic and Diluted: Income (loss) per share from continuing operations $(0.81) $0.02 $(1.03) $0.06 Income (loss) per share from discontinued operations (6.25) 0.20 (6.48) 0.24 Income (loss) per share $(7.06) $0.22 $(7.51) $0.30 Basic and Diluted: Weighted average shares of common stock outstanding 44.2 43.2 44.0 43.1 Capital expenditures from continuing operations $5 $2 $9 $4 Business Segment Information GenCorp Inc. Three Months Ended Six Months Ended (Dollars in millions, except May 31, May 31, May 31, May 31, per-share data) 2004 2003 2004 2003 (Unaudited) (Unaudited) Net Sales: Aerospace and Defense $125 $82 $238 $144 Real Estate 2 2 3 3 Fine Chemicals 13 17 26 34 Intersegment sales elimination (4) -- (7) -- Total $136 $101 $260 $181 Segment Performance: Aerospace and Defense $15 $9 $26 $16 Retirement benefit plan income (expense) (7) 1 (14) 2 Aerospace and Defense Segment Performance 8 10 12 18 Real Estate Segment Performance 1 1 2 2 Fine Chemicals Segment Performance -- 4 -- 6 Total Segment Performance 9 15 14 26 Interest expense (8) (5) (16) (9) Corporate retirement benefit plan expense (5) -- (10) -- Corporate and other expenses (8) (10) (15) (15) Income (Loss) from continuing operations before income taxes $(12) $-- $(27) $2 Segment performance excludes corporate retirement benefit plan income (expense), corporate income and expenses, interest expense, income taxes, and discontinued operations. Condensed Consolidated Balance Sheet GenCorp Inc. May 31, November 30, (Dollars in millions) 2004 2003 (Unaudited) Assets Cash and equivalents $51 $64 Accounts receivable 91 92 Inventories, net 197 170 Recoverable form U.S. government and other third parties for environmental remediation 32 37 Current deferred tax asset -- 2 Prepaid expenses and other 8 14 Assets of discontinued operations 319 571 Total Current Assets 698 950 Property, plant and equipment, net 211 217 Recoverable from U.S. government and other third parties for environmental remediation 176 183 Prepaid pension asset 302 320 Goodwill, net 103 100 Deferred income taxes -- 17 Other noncurrent assets, net 107 120 $1,597 $1,907 Liabilities and Shareholders' Equity Short-term borrowings and current portion of long-term debt $28 $52 Accounts payable 29 41 Reserves for environmental remediation 47 53 Income taxes payable 41 23 Other current liabilities 158 181 Liabilities of discontinued operations 154 160 Total Current Liabilities 457 510 Long-term debt, net of current portion 567 486 Postretirement benefits other than pensions 148 148 Reserves for environmental remediation 250 262 Other noncurrent liabilities 76 73 Total shareholders' equity 99 428 $1,597 $1,907 SOURCE GenCorp Inc. -0- 07/15/2004 /CONTACT: investors, Yasmin Seyal, senior vice president & chief financial officer, +1-916-351-8585, or media, Linda Beech Cutler, vice president, corporate communications, +1-916-351-8650, both of GenCorp Inc./ /Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20010108/SFM125LOGO AP Archive: http://photoarchive.ap.org PRN Photo Desk, 1-888-776-6555 or +1-212-782-2840/ /Web site: http://www.gencorp.com / (GY) CO: GenCorp Inc. ST: California IN: ARO CPR CHM AIR SU: ERN CCA -----END PRIVACY-ENHANCED MESSAGE-----