Document VpY1gp4oYkeXpX44kmqJRqbw

\ \ \ \ ASBESTOS BUSINESS(JLH 10/24/79) Definition. The Asbestos Business.includes the mining, milling and marketing of short fiber, high quality asbestos. Sales activities are worldwide and export sales dollars are a significant 44S of the total for 1980. External Environment Of major importance is the negative impact of potential Government regulations. Although not currently expected to happen, TLV's proposed by NIOSH of 0.1 fiber/cc are probably not attainable by our plant or customers, and withdrawal from this business would be necessary. If regulatory compliance can continue to be achieved, the plant should operate at'90-100J of capacity for the next two years. Component Objectives and Strategies This business should be operated to maximize earnings and maintain a positive cash flow. Capital investment should be limited to dust control and packaging improvements and minor modifications to produce "low-dust" products, such as "UNIVIS". Plant expansion should not be considered under the-current asbestos regulatory and "publicity" climate. This business should earn one-half to one million dollars per year for the foreseeable future unless precluded by Government action. Alternate strategic plans for the asbestos business are presently being evaluated and recommendations regarding the preferred strategic direc tion will be presented to management. New Business Programs None Budget Year Action Plans 1. Continue the vigorous program directed toward minimizing needlessly burdensome regulations. 2. Continue market development of special products, especially those with low-dust characteristics. 3. Evaluate the future course of the Asbestos Business in light ofGovernment regulations and the high profitability of the business. UC-5064 -2- 4. Continue agressive sales activities outside the United States. Regulatory pressures are less severe and a higher percentage of high-priced products is sold through foreign affiliates and distributors. Financial Performance . Net Sales Net Income Cash Flow ROA 1978 Actual $7.2fW 1.2 1.0 25.42 Budget $6.6MM 0.6 0.6 12.12 1979 Est. Act. (8/1/79) $6.8MM 1.0 1.0 18.62 2 Budget 103 167 167 154 1980 Budqet 7,o *-.t\ $6<9ttM 0.3 O.H te.S 1981 . Forecast $7.9MM Current Year (1979) Higher than budgeted earnings'and cash generation were due primarily to price increases and favorable plant costs. Plant operation was reduced from 20 to 15 shifts per week in September to reduce product inventories. Budget Year (1980) Sales volume and NIFS are budgeted to increase about 32 and 20shift plant operation should be resumed by the end of the second quarter. If anticipated price increases are successfully implemented at the beginning of the year, NIFS will be 8.52 higher than budget. Following Year (1981) Increased sales volume of about 72 is expected in 1981, primarily due to an increased share of the drilling mud market with "UMIVIS" and modest increases in floor tile and export sales. The major uncertainty in the Asbestos Business will continue to be the effect of government regulations and adverse publicity. 1980 C O N TIN G E N C Y P LA N S Y 272 - ISMILLIONS TO .X| M n c lu d ti A c c o u n lt Rk *I* b K CMtcuunlad r&iuo eo tn i CM te wOOcn* hn to pi O' CM p* * n <0 9(hH POIOIftN4* X II) o< 3 uCL W o o Z -- H* z o au.i Q X Oom zO< z 2 S O LU E a. 5 o UUcCILcCII CUXi C/5 M Ui Ui a2 soc 1 s u_ oui <s si zz UJ UJ zUJ 22 *sS2Sr1p,fcSUaUCaCJI SUsuUoJi ss UJ UJ * Si* VS < Cfl < UJ UJ O g u, occ cu _ ui X vszUJ 5o as3 <s Ui Ui EZ < H* H* o ul Z S o <" tz O ui zo Ui t-- 2+ >O ct-o r1 Z On ui <| I EScuj z oO. Q QUi UJ UJ h- ZO 85z 5z 5 >0 >a >o >o>o cc ffl cb co a 1iiii z qui 5 m O ui <> g4 > ls 5LuU UJ S CO Ui Ui $ < Ui W t Q Ui 1 Q a x Cl) IL co <3 2 I " ui E 2*z r' 1-1 N <0 *u O P O' ~t m c o n< <n <0 n o' m p* A44 NN lA CD A4P **>*-* uma n n cm wt r* h n ^ o f> *u i 4*4 CJ A M N I0< O O* 4N* cm Nno A IA N I ooooo *4<n ia