Texas Industries, Inc. (NYSE:TXI) today reported financial results
for the quarter ended November 30, 2010. Results for the quarter
were a net loss of $11.2 million or $.40 per share. Results for the
quarter ended November 30, 2009 were a net loss of $3.7 million or
$.13 per share and included after tax gains from the sale of
emission credits of $2.1 million ($.08 per share).
General Comments
"Conditions in our markets remain challenging," stated Mel
Brekhus, Chief Executive Officer. "Volumes were up compared to
the same period a year ago but it is difficult to determine how
much might be attributable to market conditions due to the fact
that we experienced abnormally inclement weather in Texas a year
ago and more typical weather this year."
"We continue to focus on meeting market demand as cost
effectively as possible. As planned, we resumed construction
of TXI's central Texas cement plant expansion during the quarter,"
added Brekhus.
A teleconference will be held tomorrow, January 7, 2011 at 10:00
Central Standard Time to further discuss quarter results. A
real-time webcast of the conference is available by logging on to
TXI's website at www.txi.com.
The following is a summary of operating results for our business
segments and certain other operating information related to our
principal products.
Cement Operations
|
Three months ended
November 30, |
Six months ended
November 30, |
In thousands except per unit |
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
Operating Results |
|
|
|
|
Total cement sales |
$ 61,599 |
$ 61,726 |
$ 129,289 |
$ 140,186 |
Total other sales and
delivery fees |
6,979 |
6,457 |
15,671 |
13,193 |
Total segment sales |
68,578 |
68,183 |
144,960 |
153,379 |
Cost of products
sold |
63,121 |
58,359 |
133,184 |
128,218 |
Gross profit |
5,457 |
9,824 |
11,776 |
25,161 |
Selling, general and
administrative |
(4,018) |
(4,359) |
(8,811) |
(9,033) |
Other income |
509 |
4,670 |
2,947 |
6,413 |
Operating Profit |
$ 1,948 |
$ 10,135 |
$ 5,912 |
$ 22,541 |
|
|
|
|
|
Cement |
|
|
|
|
Shipments (tons) |
784 |
738 |
1,657 |
1,653 |
Prices ($/ton) |
$78.49 |
$83.64 |
$78.02 |
$84.78 |
Cost of sales
($/ton) |
$73.39 |
$71.98 |
$72.25 |
$70.16 |
Three months ended November 30, 2010
Cement operating profit for the three-month period ended
November 30, 2010 was $1.9 million, a decrease of $8.2 million from
the prior year period. Lower sales prices offset in part by
higher shipments reduced operating profit approximately $3
million. In addition, other income decreased $4.2
million from the prior year period.
Total segment sales for the three-month period ended November
30, 2010 were $68.6 million compared to $68.2 million for the prior
year period. Cement sales were comparable to the prior year
period as construction activity has remained at low levels in both
our Texas and California market areas. Our Texas market area
accounted for approximately 73% of cement sales in the current
period compared to 69% of cement sales in the prior year
period. Average cement prices decreased 6% in our Texas market
area and 7% in our California market area. Shipments increased
12% in our Texas market area and decreased 6% in our California
market area.
Cost of products sold for the three-month period ended November
30, 2010 increased $4.8 million from the prior year
period. Cement unit costs increased 2% from the prior year
period primarily due to higher repair and maintenance costs offset
in part by the effect of higher shipments.
Selling, general and administrative expense for the three-month
period ended November 30, 2010 decreased $0.3 million from the
prior year period. The decrease was primarily due to
lower provisions for bad debts and defined benefit plan
expense.
Other income for the three-month period ended November 30, 2010
decreased $4.2 million from the prior year period. The
decrease was primarily due to $0.6 million lower royalty income and
$3.4 million lower gains from sales of emissions credits associated
with our Crestmore cement plant in Riverside,
California.
Aggregate Operations
|
Three months ended
November 30, |
Six months ended
November 30, |
In thousands except per unit |
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
Operating Results |
|
|
|
|
Total stone, sand
and gravel sales |
$ 22,644 |
$ 20,217 |
$ 49,237 |
$ 48,011 |
Total other sales and
delivery fees |
18,438 |
16,070 |
41,815 |
38,377 |
Total segment sales |
41,082 |
36,287 |
91,052 |
86,388 |
Cost of products
sold |
35,002 |
32,001 |
78,412 |
71,156 |
Gross profit |
6,080 |
4,286 |
12,640 |
15,232 |
Selling, general and
administrative |
(2,814) |
(2,489) |
(5,873) |
(5,194) |
Other income |
57 |
432 |
1,690 |
830 |
Operating Profit |
$ 3,323 |
$ 2,229 |
$ 8,457 |
$ 10,868 |
|
|
|
|
|
Stone, sand and gravel |
|
|
|
|
Shipments (tons) |
3,026 |
2,642 |
6,610 |
6,065 |
Prices ($/ton) |
$7.48 |
$7.65 |
$7.45 |
$7.92 |
Cost of sales
($/ton) |
$6.53 |
$7.03 |
$6.48 |
$6.61 |
Three months ended November 30, 2010
Aggregate operating profit for the three-month period ended
November 30, 2010 was $3.3 million, an increase of $1.1 million
from the prior year period. Higher shipments offset in part by
lower sales prices increased operating profit approximately $1
million.
Total segment sales for the three-month period ended November
30, 2010 were $41.1 million compared to $36.3 million for the prior
year period. Stone, sand and gravel sales increased $2.4
million from the prior year period on 15% higher shipments and 2%
lower average prices.
Cost of products sold for the three-month period ended November
30, 2010 increased $3.0 million from the prior year period
primarily due to higher shipments. Stone, sand and gravel unit
costs decreased 7% from the prior year period primarily due to the
effect of higher shipments on unit costs offset in part by higher
repair and maintenance costs.
Selling, general and administrative expense for the three-month
period ended November 30, 2010 increased $0.3 million from the
prior year period primarily due to higher provisions for bad
debts.
Other income for the three-month period ended November 30, 2010
decreased $0.4 million from the prior year period primarily due to
lower gains from routine sales of surplus operating assets.
Consumer Products Operations
|
Three months ended
November 30, |
Six months ended
November 30, |
In thousands except per unit |
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
Operating Results |
|
|
|
|
Total ready-mix
concrete sales |
$ 43,377 |
$ 41,720 |
$ 95,483 |
$ 95,773 |
Total other sales and
delivery fees |
13,443 |
12,733 |
27,815 |
28,218 |
Total segment sales |
56,820 |
54,453 |
123,298 |
123,991 |
Cost of products
sold |
56,290 |
51,691 |
119,539 |
113,407 |
Gross profit |
530 |
2,762 |
3,759 |
10,584 |
Selling, general and
administrative |
(3,047) |
(2,749) |
(5,723) |
(5,953) |
Other income |
134 |
268 |
332 |
401 |
Operating Profit
(Loss) |
$ (2,383) |
$ 281 |
$ (1,632) |
$ 5,032 |
|
|
|
|
|
Ready-mix concrete |
|
|
|
|
Shipments (cubic
yards) |
575 |
501 |
1,244 |
1,113 |
Prices ($/cubic
yard) |
$75.45 |
$83.02 |
$76.73 |
$86.01 |
Cost of sales ($/cubic
yard) |
$77.79 |
$80.98 |
$76.94 |
$80.39 |
Three months ended November 30, 2010
Consumer products operating loss for the three-month period
ended November 30, 2010 was $2.4 million, a decrease in profit of
$2.7 million from the prior year period. Lower sales prices
offset in part by higher shipments reduced operating profit
approximately $2 million.
Total segment sales for the three-month period ended November
30, 2010 were $56.8 million compared to $54.5 million for the prior
year period. Ready-mix concrete sales for the three-month
period ended November 30, 2010 increased $1.7 million from the
prior year period on 9% lower average prices and 15% higher
shipments.
Cost of products sold for the three-month period ended November
30, 2010 increased $4.6 million from the prior year period
primarily due to higher shipments. Ready-mix concrete unit
costs decreased 4% from the prior year period primarily due to the
effect of higher shipments offset in part by higher fuel and repair
and maintenance costs.
Selling, general and administrative expense for the three-month
period ended November 30, 2010 increased $0.3 million from the
prior year period primarily due to higher provisions for bad
debts.
Other income for the three-month period ended November 30, 2010
decreased $0.1 million from the prior year period primarily due to
lower gains from routine sales of surplus operating assets.
Corporate
|
Three months ended
November 30, |
Six months ended
November 30, |
In thousands |
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
|
|
|
|
|
Other income |
$ 1,229 |
$ 358 |
$ 1,850 |
$ 736 |
Selling, general and
administrative |
(8,664) |
(6,289) |
(14,277) |
(15,960) |
|
$ (7,435) |
$ (5,931) |
$ (12,427) |
$ (15,224) |
Three months ended November 30, 2010
Other income for the three-month period ended November 30, 2010
increased $0.9 million from the prior year period primarily due to
higher oil and gas lease bonus and royalty payments offset in part
by lower interest income.
Selling, general and administrative expense for the three-month
period ended November 30, 2010 increased $2.4 million from the
prior year period. The increase was primarily the result of
$3.0 million higher stock-based compensation. Our stock-based
compensation includes awards expected to be settled in cash, the
expense for which is based on their fair value at the end of each
period until the awards are paid. The impact of changes in our
stock price on their fair value increased stock-based compensation
$1.5 million in the three-month period ended November 30, 2010 and
decreased stock-based compensation $1.5 million in the three-month
period ended November 30, 2009. We hold life insurance policies in
connection with certain of our benefit plans. Proceeds
received from the policies in the three-month period ended November
30, 2010 decreased expense $0.2 million from the prior year period.
Our focus on reducing controllable costs lowered other expenses
$0.4 million in the three-month period ended November 30, 2010 from
the prior year period.
Interest
Interest expense incurred for the three-month period ended
November 30, 2010 was $17.3 million, of which $3.4 million was
capitalized in connection with our Hunter, Texas cement plant
expansion project and $13.9 million was expensed. Interest
expense incurred for the three-month period ended November 30, 2009
was $13.4 million, all of which was expensed.
Interest expense incurred for the three-month period ended
November 30, 2010 increased from the prior year period primarily as
a result of higher average outstanding debt at higher interest
rates due to the refinancing of our 7.25% senior notes. An
additional $15 million of interest expense is estimated to be
capitalized in connection with our Hunter, Texas cement plant
expansion project during the remainder of our current fiscal
year.
Loss on Debt Retirements
On July 27, 2010, we commenced a cash tender offer for all of
the outstanding $550 million aggregate principal amount of our
7.25% senior notes due 2013 and a solicitation of consents to amend
the indenture governing the 7.25% notes. Pursuant to the tender
offer and consent solicitation, we purchased $536.6 million
aggregate principal amount of the 7.25% notes, and paid an
aggregate of $547.7 million in purchase price and consent
fees. On September 9, 2010, we redeemed the remaining $13.4
million aggregate principal amount of the 7.25% notes at a price of
101.813% of the principal amount thereof, plus accrued and unpaid
interest on the 7.25% notes to the redemption date. We used the net
proceeds from the issuance and sale of $650 million aggregate
principal amount of our 9.25% senior notes to pay the purchase or
redemption price of the 7.25% notes and the consent fees. As
of November 30, 2010, we recognized a loss on debt retirement of
$29.6 million representing $11.4 million in consent fees,
redemption price premium and transaction costs and a write-off of
$18.2 million of unamortized debt discount and original issuance
costs associated with the 7.25% notes.
Income Taxes
Income taxes for the interim periods ended November 30, 2010 and
November 30, 2009 have been included in the accompanying financial
statements on the basis of an estimated annual rate. The estimated
annualized rate does not include the tax impact of the loss on debt
retirements which has been recognized as a discrete item in the
six-month period ended November 30, 2010. The estimated
annualized rate excluding this charge is 41.0% for fiscal year 2011
compared to 41.4% for fiscal year 2010.
Certain statements contained in this press release are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are
subject to risks, uncertainties and other factors, which could
cause actual results to differ materially from future results
expressed or implied by such forward-looking
statements. Potential risks and uncertainties include, but are
not limited to, the impact of competitive pressures and changing
economic and financial conditions on our business, the
cyclical and seasonal nature of our business, the level of
construction activity in our markets, abnormal periods of inclement
weather, unexpected periods of equipment downtime, unexpected
operational difficulties, changes in the cost of raw materials,
fuel and energy, changes in the cost or availability of
transportation, changes in interest rates, the timing and amount of
federal, state and local funding for infrastructure, delays in
announced capacity expansions, ongoing volatility and uncertainty
in the capital or credit markets, the impact of environmental laws,
regulations and claims and changes in governmental and public
policy, and the risks and uncertainties described in our reports on
Forms 10-K, 10-Q and 8-K. Forward-looking statements speak
only as of the date hereof, and we assume no obligation to publicly
update such statements.
TXI is the largest producer of cement in Texas and a major
cement producer in California. TXI is also a major supplier of
construction aggregate, ready-mix concrete and concrete
products.
The Texas Industries, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6602
(Unaudited) |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
TEXAS INDUSTRIES, INC. AND
SUBSIDIARIES |
|
|
|
|
|
|
Three months
ended |
Six months ended |
|
November 30, |
November 30, |
In thousands except per share |
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
NET SALES |
$148,111 |
$142,935 |
$320,233 |
$326,892 |
|
|
|
|
|
Cost of products sold |
136,044 |
126,063 |
292,058 |
275,915 |
GROSS PROFIT |
12,067 |
16,872 |
28,175 |
50,977 |
|
|
|
|
|
Selling, general and administrative |
18,543 |
15,886 |
34,684 |
36,140 |
Interest |
13,886 |
13,364 |
28,297 |
26,608 |
Loss on debt retirements |
613 |
-- |
29,619 |
-- |
Other income |
(1,929) |
(5,728) |
(6,819) |
(8,380) |
|
31,113 |
23,522 |
85,781 |
54,368 |
LOSS BEFORE INCOME
TAXES |
(19,046) |
(6,650) |
(57,606) |
(3,391) |
|
|
|
|
|
Income tax benefit |
(7,845) |
(2,948) |
(22,713) |
(1,404) |
NET LOSS |
$ (11,201) |
$ (3,702) |
$ (34,893) |
$ (1,987) |
|
|
|
|
|
|
|
|
|
|
Net loss per share |
|
|
|
|
Basic |
$ (.40) |
$ (.13) |
$ (1.25) |
$ (.07) |
Diluted |
$ (.40) |
$ (.13) |
$ (1.25) |
$ (.07) |
|
|
|
|
|
Average shares outstanding |
|
|
|
|
Basic |
27,807 |
27,736 |
27,797 |
27,728 |
Diluted |
27,807 |
27,736 |
27,797 |
27,728 |
|
|
|
|
|
Cash dividends declared per share |
$.075 |
$.075 |
$.15 |
$.15 |
|
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEETS |
TEXAS INDUSTRIES, INC. AND
SUBSIDIARIES |
|
|
|
|
|
|
|
(Unaudited) |
|
|
November 30, |
May 31, |
In thousands |
2010 |
2010 |
|
|
|
ASSETS |
|
|
CURRENT ASSETS |
|
|
Cash and cash
equivalents |
$139,753 |
$74,946 |
Receivables – net |
96,671 |
112,184 |
Inventories |
152,681 |
142,419 |
Deferred income taxes and
prepaid expenses |
23,351 |
23,426 |
TOTAL CURRENT ASSETS |
412,456 |
352,975 |
|
|
|
PROPERTY, PLANT AND EQUIPMENT |
|
|
Land and land improvements |
158,941 |
158,367 |
Buildings |
58,817 |
58,351 |
Machinery and equipment |
1,226,794 |
1,220,021 |
Construction in progress |
330,574 |
322,039 |
|
1,775,126 |
1,758,778 |
Less depreciation and
depletion |
634,404 |
604,269 |
|
1,140,722 |
1,154,509 |
OTHER ASSETS |
|
|
Goodwill |
1,715 |
1,715 |
Real estate and
investments |
7,426 |
6,774 |
Deferred charges and other |
23,219 |
15,774 |
|
32,360 |
24,263 |
|
$1,585,538 |
$1,531,747 |
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
CURRENT LIABILITIES |
|
|
Accounts payable |
$41,800 |
$56,214 |
Accrued interest, compensation
and other |
63,307 |
51,455 |
Current portion of long-term
debt |
95 |
234 |
TOTAL CURRENT
LIABILITIES |
105,202 |
107,903 |
|
|
|
LONG-TERM DEBT |
652,441 |
538,620 |
|
|
|
DEFERRED INCOME TAXES AND OTHER CREDITS |
102,495 |
123,976 |
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
|
Common stock, $1 par value;
authorized 100,000 shares; issued and outstanding 27,820 and 27,796
shares, respectively |
27,820 |
27,796 |
Additional paid-in capital |
478,172 |
475,584 |
Retained earnings |
232,953 |
272,018 |
Accumulated other comprehensive
loss |
(13,545) |
(14,150) |
|
725,400 |
761,248 |
|
$1,585,538 |
$1,531,747 |
|
|
|
(Unaudited) |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
TEXAS INDUSTRIES, INC. AND
SUBSIDIARIES |
|
|
|
|
|
|
|
Six months ended |
|
November 30, |
In thousands |
2010 |
2009 |
|
|
|
OPERATING ACTIVITIES |
|
|
Net loss |
$ (34,893) |
$ (1,987) |
Adjustments to reconcile net
loss to cash provided by operating activities |
|
|
Depreciation, depletion and
amortization |
31,991 |
32,971 |
Gains on asset disposals |
(1,555) |
(1,433) |
Deferred income taxes
(benefit) |
(22,964) |
756 |
Stock-based compensation
expense |
2,288 |
2,143 |
Excess tax benefits from
stock-based compensation |
-- |
(248) |
Loss on debt retirements |
29,619 |
-- |
Other – net |
(2,855) |
609 |
Changes in operating assets and
liabilities |
|
|
Receivables – net |
16,112 |
14,020 |
Inventories |
(10,262) |
(3,843) |
Prepaid expenses |
1,232 |
1,767 |
Accounts payable and accrued
liabilities |
1,313 |
(4,823) |
Net cash provided by operating
activities |
10,026 |
39,932 |
|
|
|
INVESTING ACTIVITIES |
|
|
Capital expenditures –
expansions |
(11,198) |
(4,543) |
Capital expenditures –
other |
(12,201) |
(2,899) |
Proceeds from asset
disposals |
3,037 |
1,443 |
Investments in life insurance
contracts |
3,704 |
6,726 |
Other – net |
(859) |
(2) |
Net cash provided (used) by
investing activities |
(17,517) |
725 |
|
|
|
FINANCING ACTIVITIES |
|
|
Long-term borrowings |
650,000 |
-- |
Debt retirements |
(561,568) |
(144) |
Debt issuance costs |
(12,426) |
(2,039) |
Stock option exercises |
464 |
356 |
Excess tax benefits from
stock-based compensation |
-- |
248 |
Common dividends paid |
(4,172) |
(2,080) |
Net cash provided (used) by
financing activities |
72,298 |
(3,659) |
Increase in cash and cash equivalents |
64,807 |
36,998 |
|
|
|
Cash and cash equivalents at beginning of
period |
74,946 |
19,796 |
Cash and cash equivalents at end of
period |
$139,753 |
$56,794 |
CONTACT: Kenneth R. Allen
Vice President-Finance and Chief Financial Officer
972.647.6730
Email: kallen@txi.com
Texas Industries (NYSE:TXI)
Historical Stock Chart
From May 2024 to Jun 2024
Texas Industries (NYSE:TXI)
Historical Stock Chart
From Jun 2023 to Jun 2024