ElkCorp (NYSE:ELK) announced today financial results for its first
fiscal quarter, ended September 30, 2006. Earnings from continuing
operations for the first quarter were $9.4 million, or $0.46 per
diluted share. First Quarter Overview ElkCorp Consolidated ElkCorp
recorded revenue of $218.1 million, an improvement from the $215.9
million reported for the first quarter of fiscal 2006. The Company
reported income of $9.4 million, or $0.46 per diluted share,
compared to $10.5 million, or $0.51 per diluted share reported for
the record first quarter of fiscal 2006. First quarter results
include $2.1 million, or $0.10 per diluted share for expensing of
stock-based compensation compared to $1.2 million, or $0.06 per
diluted share in the prior year quarter. On a non-GAAP basis,
income from continuing operations, which excludes stock-based
compensation, was $11.5 million, or $0.56 per diluted share,
compared to $11.7 million, or $0.57 per diluted share, for the
first quarter of fiscal 2006. A reconciliation of GAAP to non-GAAP
income from continuing operations is included with this press
release. Premium Roofing Products Revenue for Premium Roofing
Products was $198.2 million, compared to the $194.7 million
reported in the first quarter of fiscal 2006. Operating income was
$25.2 million, or 12.7% of sales, compared to $27.6 million, or
14.2% of sales, reported in the first quarter of fiscal 2006. The
decrease in operating income was primarily attributable to a
decline in shingle and accessory volume of 8%. The lower volumes
were a result of a softer than anticipated reroof market, an
unexpected rapid decline in new home starts and the lack of
significant storm activity. Asphalt costs continued to rise in the
quarter. Asphalt increased approximately 53% over the same quarter
in the prior year and increased 15% over the previous quarter.
Increases in raw material, transportation and other expenses were
substantially offset by a 10% improvement in pricing for the
quarter. Composite Building Products Sales in the first quarter
were $5.4 million, compared to $5.1 million recorded in the same
quarter of fiscal year 2006. The sales increase for the quarter was
due to an improvement in railing sales and deck board pricing,
which was largely offset by a decline in decking sales. Operating
loss for the first quarter was $2.2 million compared to a loss of
$4.1 million in the first quarter of fiscal 2006. The prior year
results included a $2.6 million write-off of returned material and
non-decking material adjustments. Excluding the write-off and
adjustments in the first quarter of 2006, operating results for the
current quarter decreased $0.7 million. This decline was primarily
due to lower decking sales and production volume and increased
SG&A expense associated with expanding distribution. These
factors were partially offset by increased railing volume and lower
raw material costs. Specialty Fabrics Revenue declined to $12.2
million in the first quarter from $13.7 million in the same quarter
last year. Operating income, however, improved to $1.7 million, or
13.9% of sales, in the first quarter from the $1.5 million, or
10.9% of sales, for the prior year period. Roofing mat volume
decreased but was partially offset by increased pricing and
improved volume in higher margin products for the quarter.
Financial Condition At September 30, 2006, the contractual
principal amount of ElkCorp�s long-term debt, including the $26
million current portion of long-term debt, was $201.5 million. Net
debt (contractual principal debt minus cash and short-term
investments) was $172.2 million, and the net debt to capital ratio
was 33.9%. Liquidity consisted of $29.3 million of cash, cash
equivalents and short-term investments and $121.1 million of
borrowing availability under a $125 million committed revolving
credit facility expiring November 30, 2008. Long-term debt included
$1.1 million for the net fair value of two interest rate swap
agreements. Inventories have grown to higher than normal levels in
the current quarter. The company has taken steps to curtail a more
significant inventory build by slowing production schedules in the
near-term. However, the company believes its inventories are still
at a manageable level because�historically when the market
returns�demand�is significant and ramps quickly. Business Outlook
�Our first fiscal quarter proved to be challenging. Consumer
confidence issues, an unanticipated rapid decline in new home
starts and the lack of significant storms this season has caused
distributors to adjust inventory to levels reflective of the
current market conditions,� said Thomas Karol, chairman and chief
executive officer of ElkCorp. �As a result of discussions with our
distributors we are anticipating a period of six months that will
be softer than the normal seasonal slow down.� Mr. Karol continued,
�Although we believe the slow down in the roofing market to be
short-term, we are monitoring our inventory and have slowed the
production speeds of our plants. This is not an unusual practice in
a slower market and does have some beneficial impact to offset
reduced volume such as improving raw material utilization, allowing
scheduled maintenance and capital improvement projects and running
trials of new products. We believe this is a prudent measure during
this time. However we are still keeping our resources in place
because historically when the market turns around demand ramps up
quickly. Sales of new accessory products including TruSlate, RGM
and others are expected to lessen the impact of the slower shingle
market. The reduction in energy, asphalt and transportation costs
should also positively impact results in the near-term.� �We
believe the composites market is reacting in a similar fashion to
roofing. However, unlike the roofing market, decking is a more
discretionary expenditure for the consumer. One strategy to boost
sales in our composites business is the introduction of a new line
of CrossTimbers decking. This board may offer homeowners a more
compelling value proposition for installing a composite deck. The
new line is anticipated to offer all the beauty and benefits of a
composite deck at a price point closer to treated lumber. We
believe this product offers Elk a unique opportunity, especially in
the current environment, to further expand our presence in the
market.� �In our specialty fabric technologies business we saw a
decline in sales for external roofing mat in the quarter, which is
in line with what we have seen in the overall roofing market. Our
strategy for offsetting the decline in sales is to focus on further
penetrating higher growth, higher margin markets; primarily
flooring underlayment. We feel confident in our ability to
penetrate the flooring market and believe that the long-term
potential in this market will make a sizable impact on our
specialty fabrics business. Modest improvements in sales in these
markets could largely offset the decline in external roofing mat
net income.� Mr. Karol concluded, �We believe that over the next
six months the building products market is going to be challenging
for everyone unless a significant weather event occurs. We also
believe we have the strategies in place to navigate through this
near-term correction and will be poised to meet demand as the
market improves.� Earnings Outlook The Company expects earnings for
the second quarter of fiscal 2007 to be in the range of $0.24 to
$0.27 per diluted share. Factored into the guidance are improved
product pricing, freight costs, expenses and raw material
utilization from the year ago quarter. However, these improvements
are expected to be offset by reduced volume and a 20% to 25%
increase in asphalt costs over the second quarter of fiscal 2006.
In addition, the projection for the quarter recognizes pretax
period costs of approximately $2.9 million, or $0.09 per diluted
share, not capitalized into inventory due to reduced production
rates. This negative impact will improve in subsequent quarters
where production returns to more normalized levels. Elk expects the
market to improve by the fourth fiscal quarter. but anticipates it
may be difficult to meet its previous full year guidance for fiscal
year 2007. Elk now anticipates the total year results to be in the
range of $2.05 to $2.25 per diluted share for the fiscal year.
Conference Call The ElkCorp management team will host a conference
call and live audio webcast on October 27, 2007, at 11:00 a.m. ET
to further discuss its earnings and operations for the first
quarter fiscal 2007. Investors and other interested parties may
listen to the live webcast by visiting the investor relations
section of the ElkCorp website at www.elkcorp.com. A replay of the
conference call will be available for 24 hours beginning at 1:00
p.m. ET. and may be accessed by dialing 1-800-642-1687 and entering
passcode 9436690. The webcast replay also will be available on the
investor relations section of Company's website. Use of Non-GAAP
Financial Metrics Effective in fiscal 2006, the company adopted
Statement of Financial Accounting standards (SFAS) No. 123R, which
requires the company to begin recognizing compensation expense
relating to stock options and changes the accounting for certain
other elements of stock-based payments. The press release contains
income from continuing operations and earnings per share
information that exclude stock-based compensation and have not been
calculated in accordance with GAAP. The company has provided these
metrics in addition to GAAP financial results because it believes
they provide a meaningful comparison between the first quarters of
fiscal years 2006 and 2007. We believe comparing the results on a
non-GAAP basis is important to understanding the Company�s
underlying operational results. However, these metrics should not
be considered an alternative to GAAP and these non-GAAP measures
may not be comparable to information provided by other companies.
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,� �feel confident,�
�potential,� �forecast,� �goal,� �project,� �expect,� �anticipate,�
�plan,� �predict,� �could,� �should,� �may,� �likely,� or similar
words that convey the uncertainty of future events or outcomes and
include the earnings outlook for the second quarter and fiscal year
2007. 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, failure to achieve expected efficiencies in new
operations, 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, 2006. ElkCorp
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. ElkCorp, through its subsidiaries,
manufactures Elk brand premium roofing and building products (90%
of consolidated revenue) and provides technologically advanced
products and services to other industries. 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, 2006� 2005� 2006� 2005� � Sales $
218,108� $ 215,857� $ 932,043� $ 814,564� � Costs and Expenses:
Cost of sales 177,209� 176,129� 760,331� 656,632� Selling, general
& administrative � 22,817� � 20,106� � 90,528� � 74,871� �
Operating Income from Continuing Operations 18,082� 19,622� 81,184�
83,061� � Interest expense and other, net � 3,312� � 2,857� �
12,279� � 11,128� Income from Continuing Operations Before Income
Taxes 14,770� 16,765� 68,905� 71,933� � Provision for income taxes
� 5,370� � 6,238� � 24,527� � 26,370� � Income from Continuing
Operations 9,400� 10,527� 44,378� 45,563� Income (Loss) from
Discontinued Operations, Net � 0� � 0� � (92) � 5,022� � Net Income
$ 9,400� $ 10,527� $ 44,286� $ 50,585� � Income (Loss) Per Common
Share-Basic Continuing Operations $ 0.46� $ 0.52� $ 2.17� $ 2.29�
Discontinued Operations � 0.00� � 0.00� � (0.00) � 0.25� $ 0.46� $
0.52� $ 2.18� $ 2.54� � Income (Loss) Per Common Share-Diluted
Continuing Operations $ 0.46� $ 0.51� $ 2.16� $ 2.23� Discontinued
Operations � 0.00� � 0.00� � (0.00) � 0.25� $ 0.46� $ 0.51� $ 2.15�
$ 2.48� � Average Common Shares Outstanding Basic � 20,402� �
20,185� � 20,329� � 19,917� � Diluted � 20,495� � 20,576� � 20,587�
� 20,420� Financial Information by Company Segments ($ in
thousands) � � Three Months Ended Twelve Months Ended September 30,
September 30, 2006� 2005� 2006� 2005� � Sales Premium Roofing
Products $ 198,240� $ 194,717� $ 839,731� $ 740,758� � Composite
Building Products 5,408� 5,080� 31,751� 21,522� � Specialty Fabric
Technologies 12,185� 13,744� 51,757� 43,192� � Surface Finishes �
2,275� � 2,316� � 8,804� � 9,092� $ 218,108� $ 215,857� $ 932,043�
$ 814,564� � Operating Profit (Loss) Premium Roofing Products $
25,174� $ 27,559� $ 104,619� $ 114,012� � Composite Building
Products (2,234) (4,120) (5,930) (15,225) � Specialty Fabric
Technologies 1,688� 1,510� 6,498� 2,895� � Surface Finishes 505�
273� 1,265� 90� � Corporate & Other � (7,051) � (5,600) �
(25,268) � (18,711) $ 18,082� $ 19,622� $ 81,184� $ 83,061�
Condensed Balance Sheet ($ in thousands) � � September 30, Assets
2006� 2005� � Cash and cash equivalents $ 9,343� $ 9,934�
Short-term investments 19,930� 54,887� Receivables, net 156,322�
150,241� Inventories 145,228� 75,515� Deferred income taxes 9,421�
8,281� Prepaid expenses and other 9,964� 8,838� Discontinued
operations � 2,844� � 2,434� � Total Current Assets 353,052�
310,130� � Property, plant and equipment, net 301,774� 296,483�
Other assets 36,084� 28,297� Discontinued operations - noncurrent �
1,770� � 2,423� � Total Assets $ 692,680� $ 637,333� � � � � �
September 30, Liabilities and Shareholders' Equity 2006� 2005� �
Accounts payable and accrued liabilities $ 102,065� $ 93,685�
Discontinued operations 560� 937� Current maturities on long-term
debt � 25,967� � 963� � Total Current Liabilities 128,592� 95,585�
� Long-term debt, net 176,664� 204,853� Deferred income taxes
51,647� 53,598� Shareholders' equity � 335,777� � 283,297� � Total
Liabilities and Shareholders' Equity $ 692,680� $ 637,333�
Condensed Statement of Cash Flows ($ in thousands) � Three Months
Ended September 30, 2006� 2005� Cash Flows From Operating
Activities: � Net income $ 9,400� $ 10,527� Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 6,779� 5,900� Deferred income taxes
(739) (388) Stock-based compensation 3,302� 1,936� Changes in
assets and liabilities, net of acquisition � (14,954) � 1,122� �
Net cash from operating activities � 3,788� � 19,097� � Cash Flows
from Investing Activities Additions to property, plant and
equipment (6,155) (3,941) Acquisitions, net of cash acquired
(6,000) (24,285) Other investing activities, net � 13,342� �
13,378� � Net cash from investing activities � 1,187� � (14,848) �
Cash Flows from Financing Activities � 312� � (3,576) � Net
Increase in Cash and Cash Equivalents 5,287� 673� � Cash and Cash
Equivalents at Beginning of Year � 4,056� � 9,261� � Cash and Cash
Equivalents at End of Period $ 9,343� $ 9,934� Reconciliation of
GAAP to Non-GAAP Income from Continuing Operations ($ in thousands,
except per share data) � � Three Months Ended September 30, 2006�
2005� � � GAAP Income from Continuing Operations $ 9,400� $ 10,527�
Stock-Based Compensation 2,093� 1,216� Non-GAAP Income From
Continuing Operations $ 11,493� $ 11,743� � GAAP Income per Diluted
Share From Continuing Operations $ $0.46� $ $0.51� Stock-Based
Compensation $0.10� $0.06� Non-GAAP Income per Diluted Share $
$0.56� $ $0.57� From Continuing Operations ElkCorp (NYSE:ELK)
announced today financial results for its first fiscal quarter,
ended September 30, 2006. Earnings from continuing operations for
the first quarter were $9.4 million, or $0.46 per diluted share.
First Quarter Overview ElkCorp Consolidated -- ElkCorp recorded
revenue of $218.1 million, an improvement from the $215.9 million
reported for the first quarter of fiscal 2006. -- The Company
reported income of $9.4 million, or $0.46 per diluted share,
compared to $10.5 million, or $0.51 per diluted share reported for
the record first quarter of fiscal 2006. -- First quarter results
include $2.1 million, or $0.10 per diluted share for expensing of
stock-based compensation compared to $1.2 million, or $0.06 per
diluted share in the prior year quarter. -- On a non-GAAP basis,
income from continuing operations, which excludes stock-based
compensation, was $11.5 million, or $0.56 per diluted share,
compared to $11.7 million, or $0.57 per diluted share, for the
first quarter of fiscal 2006. A reconciliation of GAAP to non-GAAP
income from continuing operations is included with this press
release. Premium Roofing Products -- Revenue for Premium Roofing
Products was $198.2 million, compared to the $194.7 million
reported in the first quarter of fiscal 2006. -- Operating income
was $25.2 million, or 12.7% of sales, compared to $27.6 million, or
14.2% of sales, reported in the first quarter of fiscal 2006. The
decrease in operating income was primarily attributable to a
decline in shingle and accessory volume of 8%. The lower volumes
were a result of a softer than anticipated reroof market, an
unexpected rapid decline in new home starts and the lack of
significant storm activity. -- Asphalt costs continued to rise in
the quarter. Asphalt increased approximately 53% over the same
quarter in the prior year and increased 15% over the previous
quarter. Increases in raw material, transportation and other
expenses were substantially offset by a 10% improvement in pricing
for the quarter. Composite Building Products -- Sales in the first
quarter were $5.4 million, compared to $5.1 million recorded in the
same quarter of fiscal year 2006. The sales increase for the
quarter was due to an improvement in railing sales and deck board
pricing, which was largely offset by a decline in decking sales. --
Operating loss for the first quarter was $2.2 million compared to a
loss of $4.1 million in the first quarter of fiscal 2006. The prior
year results included a $2.6 million write-off of returned material
and non-decking material adjustments. Excluding the write-off and
adjustments in the first quarter of 2006, operating results for the
current quarter decreased $0.7 million. This decline was primarily
due to lower decking sales and production volume and increased
SG&A expense associated with expanding distribution. These
factors were partially offset by increased railing volume and lower
raw material costs. Specialty Fabrics -- Revenue declined to $12.2
million in the first quarter from $13.7 million in the same quarter
last year. -- Operating income, however, improved to $1.7 million,
or 13.9% of sales, in the first quarter from the $1.5 million, or
10.9% of sales, for the prior year period. -- Roofing mat volume
decreased but was partially offset by increased pricing and
improved volume in higher margin products for the quarter.
Financial Condition At September 30, 2006, the contractual
principal amount of ElkCorp's long-term debt, including the $26
million current portion of long-term debt, was $201.5 million. Net
debt (contractual principal debt minus cash and short-term
investments) was $172.2 million, and the net debt to capital ratio
was 33.9%. Liquidity consisted of $29.3 million of cash, cash
equivalents and short-term investments and $121.1 million of
borrowing availability under a $125 million committed revolving
credit facility expiring November 30, 2008. Long-term debt included
$1.1 million for the net fair value of two interest rate swap
agreements. Inventories have grown to higher than normal levels in
the current quarter. The company has taken steps to curtail a more
significant inventory build by slowing production schedules in the
near-term. However, the company believes its inventories are still
at a manageable level because historically when the market returns
demand is significant and ramps quickly. Business Outlook "Our
first fiscal quarter proved to be challenging. Consumer confidence
issues, an unanticipated rapid decline in new home starts and the
lack of significant storms this season has caused distributors to
adjust inventory to levels reflective of the current market
conditions," said Thomas Karol, chairman and chief executive
officer of ElkCorp. "As a result of discussions with our
distributors we are anticipating a period of six months that will
be softer than the normal seasonal slow down." Mr. Karol continued,
"Although we believe the slow down in the roofing market to be
short-term, we are monitoring our inventory and have slowed the
production speeds of our plants. This is not an unusual practice in
a slower market and does have some beneficial impact to offset
reduced volume such as improving raw material utilization, allowing
scheduled maintenance and capital improvement projects and running
trials of new products. We believe this is a prudent measure during
this time. However we are still keeping our resources in place
because historically when the market turns around demand ramps up
quickly. Sales of new accessory products including TruSlate, RGM
and others are expected to lessen the impact of the slower shingle
market. The reduction in energy, asphalt and transportation costs
should also positively impact results in the near-term." "We
believe the composites market is reacting in a similar fashion to
roofing. However, unlike the roofing market, decking is a more
discretionary expenditure for the consumer. One strategy to boost
sales in our composites business is the introduction of a new line
of CrossTimbers decking. This board may offer homeowners a more
compelling value proposition for installing a composite deck. The
new line is anticipated to offer all the beauty and benefits of a
composite deck at a price point closer to treated lumber. We
believe this product offers Elk a unique opportunity, especially in
the current environment, to further expand our presence in the
market." "In our specialty fabric technologies business we saw a
decline in sales for external roofing mat in the quarter, which is
in line with what we have seen in the overall roofing market. Our
strategy for offsetting the decline in sales is to focus on further
penetrating higher growth, higher margin markets; primarily
flooring underlayment. We feel confident in our ability to
penetrate the flooring market and believe that the long-term
potential in this market will make a sizable impact on our
specialty fabrics business. Modest improvements in sales in these
markets could largely offset the decline in external roofing mat
net income." Mr. Karol concluded, "We believe that over the next
six months the building products market is going to be challenging
for everyone unless a significant weather event occurs. We also
believe we have the strategies in place to navigate through this
near-term correction and will be poised to meet demand as the
market improves." Earnings Outlook The Company expects earnings for
the second quarter of fiscal 2007 to be in the range of $0.24 to
$0.27 per diluted share. Factored into the guidance are improved
product pricing, freight costs, expenses and raw material
utilization from the year ago quarter. However, these improvements
are expected to be offset by reduced volume and a 20% to 25%
increase in asphalt costs over the second quarter of fiscal 2006.
In addition, the projection for the quarter recognizes pretax
period costs of approximately $2.9 million, or $0.09 per diluted
share, not capitalized into inventory due to reduced production
rates. This negative impact will improve in subsequent quarters
where production returns to more normalized levels. Elk expects the
market to improve by the fourth fiscal quarter. but anticipates it
may be difficult to meet its previous full year guidance for fiscal
year 2007. Elk now anticipates the total year results to be in the
range of $2.05 to $2.25 per diluted share for the fiscal year.
Conference Call The ElkCorp management team will host a conference
call and live audio webcast on October 27, 2007, at 11:00 a.m. ET
to further discuss its earnings and operations for the first
quarter fiscal 2007. Investors and other interested parties may
listen to the live webcast by visiting the investor relations
section of the ElkCorp website at www.elkcorp.com. A replay of the
conference call will be available for 24 hours beginning at 1:00
p.m. ET. and may be accessed by dialing 1-800-642-1687 and entering
passcode 9436690. The webcast replay also will be available on the
investor relations section of Company's website. Use of Non-GAAP
Financial Metrics Effective in fiscal 2006, the company adopted
Statement of Financial Accounting standards (SFAS) No. 123R, which
requires the company to begin recognizing compensation expense
relating to stock options and changes the accounting for certain
other elements of stock-based payments. The press release contains
income from continuing operations and earnings per share
information that exclude stock-based compensation and have not been
calculated in accordance with GAAP. The company has provided these
metrics in addition to GAAP financial results because it believes
they provide a meaningful comparison between the first quarters of
fiscal years 2006 and 2007. We believe comparing the results on a
non-GAAP basis is important to understanding the Company's
underlying operational results. However, these metrics should not
be considered an alternative to GAAP and these non-GAAP measures
may not be comparable to information provided by other companies.
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," "feel confident,"
"potential," "forecast," "goal," "project," "expect," "anticipate,"
"plan," "predict," "could," "should," "may," "likely," or similar
words that convey the uncertainty of future events or outcomes and
include the earnings outlook for the second quarter and fiscal year
2007. 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, failure to achieve expected efficiencies in new
operations, 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, 2006. ElkCorp
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. ElkCorp, through its subsidiaries,
manufactures Elk brand premium roofing and building products (90%
of consolidated revenue) and provides technologically advanced
products and services to other industries. Its common stock is
listed on the New York Stock Exchange (NYSE:ELK). See
www.elkcorp.com for more information. -0- *T Condensed Results of
Operations ($ in thousands) Three Months Ended Twelve Months Ended
September 30, September 30, 2006 2005 2006 2005 -------- --------
--------- -------- Sales $218,108 $215,857 $ 932,043 $814,564
--------- --------- ---------- --------- Costs and Expenses: Cost
of sales 177,209 176,129 760,331 656,632 Selling, general &
administrative 22,817 20,106 90,528 74,871 --------- ---------
---------- --------- Operating Income from Continuing Operations
18,082 19,622 81,184 83,061 Interest expense and other, net 3,312
2,857 12,279 11,128 --------- --------- ---------- --------- Income
from Continuing Operations Before Income Taxes 14,770 16,765 68,905
71,933 Provision for income taxes 5,370 6,238 24,527 26,370
--------- --------- ---------- --------- Income from Continuing
Operations 9,400 10,527 44,378 45,563 Income (Loss) from
Discontinued Operations, Net 0 0 (92) 5,022 --------- ---------
---------- --------- Net Income $ 9,400 $ 10,527 $ 44,286 $ 50,585
========= ========= ========== ========= Income (Loss) Per Common
Share-Basic Continuing Operations $ 0.46 $ 0.52 $ 2.17 $ 2.29
Discontinued Operations 0.00 0.00 (0.00) 0.25 --------- ---------
---------- --------- $ 0.46 $ 0.52 $ 2.18 $ 2.54 =========
========= ========== ========= Income (Loss) Per Common
Share-Diluted Continuing Operations $ 0.46 $ 0.51 $ 2.16 $ 2.23
Discontinued Operations 0.00 0.00 (0.00) 0.25 --------- ---------
---------- --------- $ 0.46 $ 0.51 $ 2.15 $ 2.48 =========
========= ========== ========= Average Common Shares Outstanding
Basic 20,402 20,185 20,329 19,917 ========= ========= ==========
========= Diluted 20,495 20,576 20,587 20,420 ========= =========
========== ========= *T -0- *T Financial Information by Company
Segments ($ in thousands) Three Months Ended Twelve Months Ended
September 30, September 30, 2006 2005 2006 2005 -------- --------
--------- -------- Sales Premium Roofing Products $198,240 $194,717
$ 839,731 $740,758 Composite Building Products 5,408 5,080 31,751
21,522 Specialty Fabric Technologies 12,185 13,744 51,757 43,192
Surface Finishes 2,275 2,316 8,804 9,092 --------- ---------
---------- --------- $218,108 $215,857 $ 932,043 $814,564 =========
========= ========== ========= Operating Profit (Loss) Premium
Roofing Products $ 25,174 $ 27,559 $ 104,619 $114,012 Composite
Building Products (2,234) (4,120) (5,930) (15,225) Specialty Fabric
Technologies 1,688 1,510 6,498 2,895 Surface Finishes 505 273 1,265
90 Corporate & Other (7,051) (5,600) (25,268) (18,711)
--------- --------- ---------- --------- $ 18,082 $ 19,622 $ 81,184
$ 83,061 ========= ========= ========== ========= *T -0- *T
Condensed Balance Sheet ($ in thousands) September 30, Assets 2006
2005 ------------------------------------------------- --------
-------- Cash and cash equivalents $ 9,343 $ 9,934 Short-term
investments 19,930 54,887 Receivables, net 156,322 150,241
Inventories 145,228 75,515 Deferred income taxes 9,421 8,281
Prepaid expenses and other 9,964 8,838 Discontinued operations
2,844 2,434 --------- --------- Total Current Assets 353,052
310,130 Property, plant and equipment, net 301,774 296,483 Other
assets 36,084 28,297 Discontinued operations - noncurrent 1,770
2,423 --------- --------- Total Assets $692,680 $637,333 =========
========= September 30, Liabilities and Shareholders' Equity 2006
2005 ------------------------------------------------- --------
-------- Accounts payable and accrued liabilities $102,065 $ 93,685
Discontinued operations 560 937 Current maturities on long-term
debt 25,967 963 --------- --------- Total Current Liabilities
128,592 95,585 Long-term debt, net 176,664 204,853 Deferred income
taxes 51,647 53,598 Shareholders' equity 335,777 283,297 ---------
--------- Total Liabilities and Shareholders' Equity $692,680
$637,333 ========= ========= *T -0- *T Condensed Statement of Cash
Flows ($ in thousands) Three Months Ended September 30, 2006 2005
---------- ---------- Cash Flows From Operating Activities: Net
income $ 9,400 $ 10,527 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 6,779 5,900 Deferred income taxes (739) (388)
Stock-based compensation 3,302 1,936 Changes in assets and
liabilities, net of acquisition (14,954) 1,122 ----------
---------- Net cash from operating activities 3,788 19,097
---------- ---------- Cash Flows from Investing Activities
Additions to property, plant and equipment (6,155) (3,941)
Acquisitions, net of cash acquired (6,000) (24,285) Other investing
activities, net 13,342 13,378 ---------- ---------- Net cash from
investing activities 1,187 (14,848) ---------- ---------- Cash
Flows from Financing Activities 312 (3,576) ---------- ----------
Net Increase in Cash and Cash Equivalents 5,287 673 Cash and Cash
Equivalents at Beginning of Year 4,056 9,261 ---------- ----------
Cash and Cash Equivalents at End of Period $ 9,343 $ 9,934
========== ========== *T -0- *T Reconciliation of GAAP to Non-GAAP
Income from Continuing Operations ($ in thousands, except per share
data) Three Months Ended September 30, 2006 2005 -------- --------
GAAP Income from Continuing Operations $ 9,400 $ 10,527 Stock-Based
Compensation 2,093 1,216 -------- -------- Non-GAAP Income From
Continuing Operations $ 11,493 $ 11,743 GAAP Income per Diluted
Share From Continuing Operations $ $0.46 $ $0.51 Stock-Based
Compensation $0.10 $0.06 -------- -------- Non-GAAP Income per
Diluted Share $ $0.56 $ $0.57 From Continuing Operations *T
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