-----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, PWGzN4gE0WRKNfIdUsyg/X1d6wrB6teKX6DwniQ6f7O0fHQKIOKCivKzfyvFflLY CSwfNogAAt2rsgJ+ISEZ2Q== 0000075234-98-000006.txt : 19980417 0000075234-98-000006.hdr.sgml : 19980417 ACCESSION NUMBER: 0000075234-98-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980415 ITEM INFORMATION: FILED AS OF DATE: 19980416 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OWENS CORNING CENTRAL INDEX KEY: 0000075234 STANDARD INDUSTRIAL CLASSIFICATION: ABRASIVE ASBESTOS & MISC NONMETALLIC MINERAL PRODUCTS [3290] IRS NUMBER: 344323452 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-03660 FILM NUMBER: 98595121 BUSINESS ADDRESS: STREET 1: OWENS CORNING WORLD HEADQUARTERS STREET 2: ONE OWENS CORNING PKWY CITY: TOLEDO STATE: OH ZIP: 43659 BUSINESS PHONE: 4192488000 MAIL ADDRESS: STREET 1: OWENS CORNING WORLD HEADQUARTERS STREET 2: ONE OWENS CORNING PARKWAY CITY: TOLEDO STATE: OH ZIP: 43659 FORMER COMPANY: FORMER CONFORMED NAME: OWENS CORNING FIBERGLAS CORP DATE OF NAME CHANGE: 19920703 8-K 1 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): April 15, 1998. OWENS CORNING (Exact name of registrant as specified in its charter) Delaware 1-3660 34-4323452 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) One Owens Corning Parkway 43659 Toledo, Ohio (Zip Code) (Address of principal executive offices) (419) 248-8000 (Registrant's telephone number, including area code) SIGNATURES 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, hereunto duly authorized. OWENS CORNING Registrant Date: April 15, 1998 By: /s/ Domenico Cecere Domenico Cecere Senior Vice President and Chief Financial Officer Owens Corning ( the "company") announced first quarter sales and earnings for 1998 on April 15, 1998. Net sales were $1,137 million, a first-quarter record and an increase of 30 percent over $875 million recorded in the first quarter of 1997. Net income was $8 million, or $.16 per diluted share in the first quarter, compared to $42 million, or $.76 per diluted share reported for the first quarter of 1997. Results for the first quarter of 1998 include a pre-tax charge of $95 million for restructuring and other actions. Also included is a pre-tax credit of $84 million for the gain on the sale of the company's 50 percent interest in Alpha/Owens Corning, and a tax credit of $13 million associated with Asia Pacific operations. Building Materials Sales in Building Materials were $856 million for the first quarter of 1998, up 41 percent over the first quarter of 1997, primarily driven by the two major acquisitions (Fibreboard Corporation and AmeriMark Building Products, Inc.) made in 1997 in the Exterior Systems Business. Sales growth was also fueled by strong volumes in most U.S. Building Materials businesses, influenced by strong housing starts and accelerated customer purchases in advance of announced and implemented price increases. Building Materials income from operations was a loss of $16 million in the first quarter of 1998 compared to income of $44 million in the first quarter of 1997 due to price deterioration in fiber glass insulation during the second half of 1997 and the 1998 restructuring charge. Recent Pricing Actions In the first quarter of 1998, the company announced price increases effective in March 1998 applicable to its residential insulation products of approximately 8 percent and price increases applicable to its industrial insulation products of approximately 4 percent. The Company also announced price increases of 5 to 7 percent affecting certain residential roofing products, effective in April 1998. Composite Materials Sales in Composite Materials were $281 million in the first quarter of 1998, up 4 percent over the first quarter of 1997, driven by double-digit volume growth. Lower price levels in the United States and currency impacts offset a portion of the benefit from volume increases. Compared to the fourth quarter of 1997, however, aggregate price levels were up. Composites income from operations declined to $19 million in the first quarter of 1998 from $51 million in the first quarter of 1997 due to the 1998 restructure charge. Cost Reduction At the end of the first quarter, job reductions as a result of restructuring or attrition totaled 1,900 employees, or 8 percent of the total workforce. Of the total planned pre-tax restructuring and other charge of $250 million announced January 9, 1998, approximately $10 million remains as of the close of the first quarter. In addition to the restructuring savings of $100 million, the company expects to achieve an additional $30 million in 1998 in synergies and cost savings from integrating the Fibreboard and AmeriMark acquisitions. Divestiture Update In the first quarter of 1998, the company completed the sale of the assets of Pabco, a producer of molded calcium silicate insulation, fireproofing board and metal jacketing, acquired as part of the Fibreboard acquisition in 1997, and its 50 percent interest in Alpha/Owens Corning L.L.C., a manufacturer and marketer of unsaturated polyester and vinylester resins, for approximately $140 million. The company continues to evaluate other divestiture opportunities. OWENS CORNING AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (unaudited) Quarter Ended March 31, 1998 1997 (In millions of dollars, except share data) NET SALES $1,137 $ 875 COST OF SALES 938 652 Gross margin 199 223 OPERATING EXPENSES Marketing and administrative expenses 129 122 Science and technology expenses 15 17 Restructure costs 87 - Other (1) (71) 4 Total operating expenses 160 143 INCOME FROM OPERATIONS 39 80 Cost of borrowed funds 37 19 INCOME BEFORE PROVISION FOR INCOME TAXES 2 61 Provision (credit) for income taxes (7) 20 INCOME BEFORE MINORITY INTEREST AND EQUITY IN NET INCOME OF AFFILIATES 9 41 Minority interest (5) (2) Equity in net income of affiliates 4 3 NET INCOME $ 8 $ 42 NET INCOME PER COMMON SHARE Basic net income per share $ .16 $ .80 Diluted net income per share $ .16 $ .76 Weighted average number of common shares outstanding and common equivalent shares during the period (in millions) Basic 53.4 52.4 Diluted 53.8 57.8
(1) Includes an $84 million pretax gain from the sale of the Company's 50% ownership interest in Alpha/Owens-Corning. OWENS CORNING AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (unaudited) March 31, December 31, March 31, 1998 1997 1997 ASSETS (In millions of dollars) CURRENT Cash and cash equivalents $ 115 $ 58 $ 13 Receivables 560 432 425 Inventories 533 503 430 Insurance for asbestos litigation claims - current portion (1) 100 100 75 Deferred income taxes 140 160 106 Assets held for sale - 41 - Income tax receivable 108 96 4 Other current assets 51 38 54 Total current 1,607 1,428 1,107 OTHER Insurance for asbestos litigation claims (1) 340 357 439 Asbestos costs to be reimbursed - Fibreboard 117 116 - Deferred income taxes 394 328 457 Goodwill 792 778 301 Investments in affiliates (2) 53 52 66 Other noncurrent assets 174 184 182 Total other 1,870 1,815 1,445 PLANT AND EQUIPMENT, at cost 3,603 3,585 3,322 Less--Accumulated depreciation (1,858) (1,832) (1,767) Net plant and equipment 1,745 1,753 1,555 TOTAL ASSETS $5,222 $4,996 $4,107
OWENS CORNING AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Continued) (unaudited) March 31, December 31, March 31, 1998 1997 1997 (In millions of dollars) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT Accounts payable and accrued liabilities $ 812 $ 814 $ 633 Reserve for asbestos litigation claims - current portion (1) 300 350 275 Short-term debt 59 23 114 Long-term debt - current portion 127 120 22 Total current 1,298 1,307 1,044 LONG-TERM DEBT 1,874 1,595 1,099 OTHER Reserve for asbestos litigation claims (1) 1,241 1,320 1,600 Asbestos - related liabilities - Fibreboard 124 123 - Other employee benefits liability 332 335 339 Pension plan liability 63 65 61 Other 186 165 158 Total other 1,946 2,008 2,158 COMPANY OBLIGATED SECURITIES OF ENTITIES HOLDING SOLELY PARENT DEBENTURES 503 503 194 MINORITY INTEREST 24 24 26 STOCKHOLDERS' EQUITY Common stock 662 657 647 Deficit (1,035) (1,041) (1,035) Foreign currency translation adjustments (30) (37) (7) Other (20) (20) (19) Total stockholders' equity (423) (441) (414) TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,222 $4,996 $4,107
(1) As of March 31, 1998, the current portion of the reserve for asbestos litigation claims, net of insurance, is $200 million. Excluding Fibreboard activity, the total reserve, net of insurance, is $1,101 million. (2) At the end of the first quarter of 1998, the Company sold its 50% ownership interest in Alpha/Owens-Corning for approximately $103 million and recorded a pretax gain of approximately $84 million. OWENS CORNING AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) Quarter Ended March 31, 1998 1997 (In millions of dollars) NET CASH FLOW FROM OPERATIONS Net income $ 8 $ 42 Reconciliation of net cash provided by operating activities: Noncash items: Provision for depreciation and amortization 52 37 Provision (credit) for deferred income taxes (45) 17 Other (91) (1) (Increase) decrease in receivables (129) (107) (Increase) decrease in inventories (36) (91) Increase (decrease) in accounts payable and accrued liabilities (12) (59) Increase (decrease) in accrued income taxes (2) (11) Proceeds from insurance for asbestos litigation claims, excluding Fibreboard 17 40 Payments for asbestos litigation claims, excluding Fibreboard (129) (95) Other 37 (19) Net cash flow from operations (330) (247) NET CASH FLOW FROM INVESTING Additions to plant and equipment (47) (74) Investment in subsidiaries, net of cash acquired - (20) Proceeds from the sale of affiliate or business 134 - Other (19) (5) Net cash flow from investing $ 68 $ (99)
OWENS CORNING AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) Quarter Ended March 31, 1998 1997 (In millions of dollars) NET CASH FLOW FROM FINANCING Net additions to long-term credit facilities $ 285 $ 257 Other additions to long-term debt 3 26 Net increase in short-term debt 36 17 Dividends paid (4) (3) Other - 19 Net cash flow from financing 320 316 Effect of exchange rate changes on cash (1) (2) Net increase (decrease) in cash and cash equivalents 57 (32) Cash and cash equivalents at beginning of period 58 45 Cash and cash equivalents at end of period $ 115 $ 13
OWENS CORNING AND SUBSIDIARIES QUARTERLY INFORMATION ON INDUSTRY AND GEOGRAPHIC SEGMENTS (unaudited) Quarter Ended March 31, 1998 1997 (In millions of dollars) NET SALES Industry Segments Building Materials United States $ 739 $ 500 Europe 65 74 Canada and other 52 31 Total Building Materials 856 605 Composite Materials United States 151 138 Europe 97 97 Canada and other 33 35 Total Composite Materials 281 270 Intersegment sales Building Materials - - Composite Materials 31 27 Eliminations (31) (27) Net sales $ 1,137 $ 875 Geographic Segments United States $ 890 $ 638 Europe 162 171 Canada and other 85 66 Total $ 1,137 $ 875 Intersegment sales United States 32 29 Europe 9 9 Canada and other 12 22 Eliminations (53) (60) Net sales $ 1,137 $ 875
OWENS CORNING AND SUBSIDIARIES QUARTERLY INFORMATION ON INDUSTRY AND GEOGRAPHIC SEGMENTS (Continued) (unaudited) Quarter Ended March 31, 1998 1997 (In millions of dollars) INCOME (LOSS) FROM OPERATIONS) Industry Segments Building Materials United States $ 2 $ 37 Europe (15) 5 Canada and other (3) 2 Total Building Materials (16) 44 Composite Materials United States 37 42 Europe (17) 7 Canada and other (1) 2 Total Composite Materials 19 51 General corporate expense 36 (15) Income from operations 39 80 Cost of borrowed funds (37) (19) Income before provision for income taxes $ 2 $ 61 Geographic Segments United States $ 39 $ 79 Europe (32) 12 Canada and other (4) 4 General corporate expense 36 (15) Income from operations 39 80 Cost of borrowed funds (37) (19) Income before provision for income taxes $ 2 $ 61
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