The Flintkote Company
List of Deals
- 1941 sale of $4.50 cumulative preferred stock
- 1971 public offering of $40,000,000 8 1/4% sinking fund debentures due July 15, 1996
The Flintkote Company was founded in 1901 and incorporated in Massachusetts in 1917. The company was based in New England and manufactured roofing materials such as asphalt shingles. In the 1920s Flintkote expanded its sales to Europe. It also began manufacturing asphalt emulsions to be used in road building and maintenance. In the 1930s Flintkote introduced asbestos shingles, sidings, and cement to supplement its construction materials. By then Flintkote operated plants in New York, New Jersey, Louisiana, Illinois, and California. The company offered stock in a public offering in 1936. In the 1940s Flintkote began manufacturing folding boxes as packaging for consumer goods. An expansion and diversification program began in 1956, spurring a series of acquisitions that allowed Flintkote to produce gypsum, pipes, paper products, and additional types of asbestos and cement. By 1963 the company ran 147 plants, 21 of them international. Construction and building materials, especially roofing and asphalt, were the mainstays of the company through the 1970s.
At the time of the deal, Flintkote focused on manufacturing construction materials through its Building Products Group, Stone Products Group, and Pipe Products Group. It also produced packaging materials like corrugated containers through its Packaging Products Group. The Canadian Group produced much of the same material but largely from Canadian sources.
The deal arranged for the sale of $40 million in 8.25 percent sinking fund fifteen-year debentures. The money was to be used to pay off $40 million in short-term debt accrued in facility spending and in amassing seasonal working capital. Flintkote had $29.9 million in sales in 1970 with a net income of $1.08 million. Sales showed a slight decline over the preceding five years, with 1966 sales at $30.6 million with net income of $1.51 million. Flintkote attributed this decline to a larger economic slowdown and lowered prices for materials such as gypsum wallboard and corrugated containers. Higher labor costs, strikes, and work stoppages at Flintkote plants also hurt the bottom line. In June 1971, 11,300 people worked for the company, 6,600 of them union members.
Flintkote is now known primarily as a defendant in asbestos-related lawsuits. Flintkote sold its construction, stone, and cement products units in 1987 to focus on its huge asbestos liabilities. Flintkote, then based in San Francisco, filed Chapter 11 bankruptcy in Delaware in 2004. It listed $160 million in assets and $70 million in non-asbestos liabilities at the time of bankruptcy. At time of bankruptcy, Flintkote had paid $630 million for over 350,000 asbestos claims. Over 155,000 cases remained to be tried at the time of the bankruptcy.