EIFSFACTS.ORG

The Real Facts About EIFS  

- The Rust Problem -

In the early 90s the aggregate used in the outer coatings of EIFS apparently became contaminated with iron pyrite. This results in rust specs forming in the top coats of EIFS when the iron pyrite is exposed to moisture for prolonged periods. A number of manufacturers were apparently affected, but the bulk of the problems are reportedly owned by Dryvit.

In documents filed with the SEC in 1995 for RPM's aquisition of Dryvit Systems, Inc. can be found this reference to the rust problem:

POSSIBLE RUST LIABILITIES OF NDSI

NDSI [Dryvit's holding company] periodically receives warranty claims relating to rust spotting and staining that appears on a customer's exterior finished wall. These rust claims arise from the precense of impurities in the sand component of product manufactured by NDSI's operating subsidiary, Dryvit, prior to April 1991. The impurities consisted of ferrous and pyrite particles which developed into rust spots when exposed to seasonal weathering conditions. The rust spots affect only the aesthetic appearance of the building and have no impact on its structural integrity.

NDSI has implemented comprehensive quality control procedures specifically aimed at assuring the elimination of impurities from the manufacturing process. The quality control procedures include independent inspection and analysis of sand sources prior to selecting suppliers, analysis of sand shipments before shipping and again upon arrival at the production facilities, and the inclusion of high-powered magnets in the sand handling process at all facilities. The quality control steps were completed and in place by April 1991. NDsI has not received any rust warranty claims relating to product produced after April 1991. Rust warranty expense amounted to $2,416,983 in 1994 and $1,904,302 in 1993.

However, based on their experience with reported claims, management believes that an estimate of future claims cannot be reasonably determined, since not all product produced prior to April 1991 contained impurities and not all projects having rust spots will result in a claim. Significant increases in future rust warranty claims could have an adverse affect on the Company's results of operations.