Elkcorp (NYSE:ELK)
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ElkCorp, (NYSE:ELK), announced a revised earnings
outlook for its third fiscal quarter of 2006. The company now expects
earnings per diluted share to be in the range of $0.40 to $0.43
compared to the $0.50 to $0.53 per diluted share guidance given in
ElkCorp's second quarter earnings release dated January 19, 2006. The
company is maintaining its guidance for fiscal 2006 but anticipates
results will now be at the lower end of its previously announced range
of $2.25 to $2.40 per diluted share. Elk plans to further discuss its
outlook for the fourth fiscal quarter as well as fiscal year 2006 when
it reports its third quarter results following the close of the market
on April 25.
The reduced earnings per diluted share estimate for the third
quarter is primarily attributed to slower than anticipated ramp-up of
sales into the Florida storm areas, higher asphalt and transportation
costs and lower than expected decking shipments in the composites
business. These factors were partially offset by record shingle
shipments. Product expected to go into Florida was shipped to the
lower margin Gulf Coast storm areas which were impacted by Hurricanes
Rita and Katrina. Transportation and asphalt costs have also continued
to increase beyond the company's previous expectation of leveling off
in the quarter.
"We continue to see strong shingle demand in the majority of the
country, however, due to the slower than anticipated ramp in the
demand from Hurricane Wilma we did not ship as much product as
anticipated into the Florida market," said Thomas Karol, chairman and
chief executive officer of ElkCorp. "We believe that there is still
substantial demand in these areas, but due to the longer lead times
for insurance claims settlement, this demand is at a much slower pace
than after previous storms. Additionally, asphalt prices and
transportation costs are higher than we had originally anticipated for
the quarter. We have announced a 7% to 9% price increase effective
April 3rd that should help us to offset these costs."
Mr. Karol continued, "In our composites business, we did not see
the volumes in January and February that we had anticipated, which was
largely due to slower than anticipated inventory build at the dealer
level. We believe that dealers are somewhat reluctant to place large
initial seasonal orders due to the general industry overstocking
experienced in the last season. We feel confident that as the season
progresses, dealers will begin to carry heavier inventory loads. We
are also launching programs that will help educate and promote
contractors to use our product, which we believe will assist us in
building confidence and brand recognition in the market going
forward."
"We are obviously never pleased when we do not meet our quarterly
earnings outlook but the long-term outlook for the company remains
positive. Demand for our roofing products remains strong. We have
composite decking and railing products that we believe are among the
best in the market and we expect that as decking volumes begin to pick
up we will be able to attain more positive results on a consistent
basis. Our specialty fabric technologies business also continues to
grow and develop innovative high-margin products that will assist with
continued growth going forward."
The company will release its fiscal third quarter results on
Tuesday, April 25, following the close of the market. ElkCorp will
also host a conference call on April 26, 2006, at 11:00 a.m. EDT to
further discuss its earnings and operations for the third quarter as
well as expectations for its fourth quarter and fiscal year end.
Investors and other interested parties may participate in the live
audio webcast by visiting the investor relations section of the
ElkCorp Web site at www.elkcorp.com.
About ElkCorp
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.
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," "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 third quarter and fiscal year
2006. 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, 2005. ElkCorp undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.