DALLAS, March 25, 2010 (GLOBE NEWSWIRE) -- Texas Industries, Inc. (NYSE:TXI) today reported financial results for the quarter ended February 28, 2010. The net loss for the quarter was $27.1 million (<$.98> per share). Net income for the quarter ended February 28, 2009 was $10.9 million ($.39 per share).
General Comments
"Net cash provided by operating activities was a positive $6.9 million during the quarter despite sales being down $60.8 million or 34% and all three cement plants incurring scheduled maintenance expenses," stated Mel Brekhus, Chief Executive Officer. "Abnormally inclement weather in all of our markets and the continuing impact of the recession led to cement, aggregate and ready-mix concrete volumes being down 24%, 40% and 31%, respectively."
"I think our operational focus of managing costs and generating cash along with our strong liquidity position have us well positioned for these uncertain times," added Brekhus.
A teleconference will be held today, March 25, 2010 at 1:00 P.M. 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 information related to our principal products and non-operating income and expenses.
Cement Operations
|
Three months ended February 28, |
Nine months ended February 28, |
|||
| In thousands except per unit | 2010 | 2009 | 2010 | 2009 |
| Operating Results | ||||
| Total cement sales | $ 52,322 | $ 75,557 | $ 192,508 | $ 285,368 |
| Total other sales and delivery fees | 5,296 | 5,882 | 18,489 | 25,482 |
| Total segment sales | 57,618 | 81,439 | 210,997 | 310,850 |
| Cost of products sold | 70,616 | 67,919 | 198,834 | 266,682 |
| Gross profit (loss) | (12,998) | 13,520 | 12,163 | 44,168 |
| Selling, general and administrative | (3,715) | (3,577) | (12,748) | (15,064) |
| Other income | 411 | 1,423 | 6,824 | 7,695 |
| Operating Profit (Loss) | $ (16,302) | $11,366 | $6,239 | $ 36,799 |
| Cement | ||||
| Shipments (tons) | 639 | 837 | 2,292 | 3,138 |
| Prices ($/ton) | $81.82 | $90.17 | $83.96 | $90.90 |
| Cost of sales ($/ton) | $101.70 | $73.92 | $78.96 | $77.76 |
Three months ended February 28, 2010
Cement operating loss for the three-month period ended February 28, 2010 was $16.3 million, a decrease in operating profit of $27.7 million from the prior year period. Lower shipments and sales prices reduced operating profit approximately $11 million.
Total segment sales for the three-month period ended February 28, 2010 were $57.6 million compared to $81.4 million for the prior year period. Cement sales decreased $23.2 million as construction activity continued to decline in both our Texas and California market areas. Abnormally inclement weather in our Texas market area also contributed to the decline in construction activity during the current period. Our Texas market area accounted for approximately 73% of cement sales in the current period compared to 74% of cement sales in the prior year period. Shipments decreased 25% in our Texas market area and 20% in our California market area. Average cement prices decreased 8% in our Texas market area and 13% in our California market area.
Cost of products sold for the three-month period ended February 28, 2010 increased $2.7 million from the prior year period. The effect of lower shipments was offset by the effect of lower clinker production which reduced inventories and increased costs recognized. Cement unit costs increased 38% from the prior year period. Extended plant shutdowns for maintenance and inventory reductions at each of our three cement plants during the current period further lowered production levels and increased supplies and maintenance costs by approximately $5 million.
Selling, general and administrative expense for the three-month period ended February 28, 2010 increased $0.1 million from the prior year period. The increase was due primarily to $0.4 million higher provisions for bad debts, $0.5 million higher defined benefit plan expense and $0.4 million higher insurance expense which offset $1.1 million lower legal and professional expense.
Other income for the three-month period ended February 28, 2010 decreased $1.0 million from the prior year period due in part to lower gains from routine sales of surplus operating assets.
Aggregate Operations
|
Three months ended February 28, |
Nine months ended February 28, |
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| In thousands except per unit | 2010 | 2009 | 2010 | 2009 |
| Operating Results | ||||
| Total stone, sand and gravel sales | $ 14,849 | $ 26,889 | $ 62,860 | $ 103,235 |
| Total other sales and delivery fees | 14,410 | 25,882 | 52,787 | 81,838 |
| Total segment sales | 29,259 | 52,771 | 115,647 | 185,073 |
| Cost of products sold | 28,882 | 42,678 | 100,038 | 154,042 |
| Gross profit | 377 | 10,093 | 15,609 | 31,031 |
| Selling, general and administrative | (1,937) | (2,379) | (7,131) | (9,708) |
| Other income | 409 | 5,466 | 1,239 | 6,336 |
| Operating Profit (Loss) | $ (1,151) | $ 13,180 | $ 9,717 | $ 27,659 |
| Stone, sand and gravel | ||||
| Shipments (tons) | 1,947 | 3,267 | 8,012 | 13,073 |
| Prices ($/ton) | $7.62 | $8.23 | $7.85 | $7.90 |
| Cost of sales ($/ton) | $8.41 | $6.92 | $7.04 | $6.56 |
Three months ended February 28, 2010
Aggregate operating loss for the three-month period ended February 28, 2010 was $1.2 million, a decrease in operating profit of $14.3 million from the prior year period. Lower shipments and sales prices reduced operating profit approximately $10 million.
Total segment sales for the three-month period ended February 28, 2010 were $29.3 million compared to $52.8 million for the prior year period. Stone, sand and gravel sales decreased $12.0 million on 7% lower average prices and 40% lower shipments as construction activity continued to decline in our Texas market area. Abnormally inclement weather also contributed to the decline in construction activity during the current period.
Cost of products sold for the three-month period ended February 28, 2010 decreased $13.8 million from the prior year period. Overall stone, sand and gravel unit costs increased 22% from the prior year period primarily due to the effect of lower shipments.
Selling, general and administrative expense for the three-month period ended February 28, 2010 decreased $0.4 million from the prior year period primarily due to lower overall expenses, including wages and benefits, marketing, travel and outside service expenses, as a result of our focus on reducing costs.
Other income for the three-month period ended February 28, 2010 decreased $5.1 million from the prior year period. Other income in the prior year period included a gain of $5.0 million from the sale of real estate associated with our north Texas aggregate operations.
Consumer Products Operations
|
Three months ended February 28, |
Nine months ended February 28, |
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| In thousands except per unit | 2010 | 2009 | 2010 | 2009 |
| Operating Results | ||||
| Total ready-mix concrete sales | $ 33,695 | $ 53,306 | $ 129,468 | $ 197,032 |
| Total other sales and delivery fees | 10,832 | 13,294 | 39,050 | 45,436 |
| Total segment sales | 44,527 | 66,600 | 168,518 | 242,468 |
| Cost of products sold | 45,203 | 60,569 | 158,610 | 228,742 |
| Gross profit (loss) | (676) | 6,031 | 9,908 | 13,726 |
| Selling, general and administrative | (1,421) | (2,142) | (7,374) | (10,173) |
| Other income | 115 | 651 | 516 | 1,216 |
| Operating Profit (Loss) | $ (1,982) | $ 4,540 | $ 3,050 | $ 4,769 |
| Ready-mix concrete | ||||
| Shipments (cubic yards) | 427 | 614 | 1,540 | 2,330 |
| Prices ($/cubic yard) | $79.17 | $86.87 | $84.12 | $84.59 |
| Cost of sales ($/cubic yard) | $84.35 | $80.45 | $81.48 | $81.24 |
Three months ended February 28, 2010
Consumer products operating loss for the three-month period ended February 28, 2010 was $2.0 million, a decrease in operating profit of $6.5 million from the prior year period. Lower shipments and sales prices reduced operating profit approximately $6 million.
Total segment sales for the three-month period ended February 28, 2010 were $44.5 million compared to $66.6 million for the prior year period. Ready-mix concrete sales for the three-month period ended February 28, 2010 decreased $19.6 million on 9% lower average prices and 30% lower shipments as construction activity continued to decline in our Texas market area. Abnormally inclement weather also contributed to the decline in construction activity during the current period.
Cost of products sold for the three-month period ended February 28, 2010 decreased $15.4 million from the prior year period. Overall ready-mix concrete unit costs increased 5% from the prior year period primarily due to the effect of lower shipments.
Selling, general and administrative expense for the three-month period ended February 28, 2010 decreased $0.7 million from the prior year period primarily due to lower overall expenses, including wages and benefits, marketing, travel and outside service expenses, as a result of our focus on reducing costs.
Other income for the three-month period ended February 28, 2010 decreased $0.5 million from the prior year period. Other income in the prior year period included $0.5 million higher gains from routine sales of surplus operating assets.
Corporate
|
Three months ended February 28, |
Nine months ended February 28, |
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| In thousands | 2010 | 2009 | 2010 | 2009 |
| Other income | $ 109 | $ 404 | $ 845 | $ 3,149 |
| Selling, general and administrative | (10,495) | (7,884) | (26,455) | (14,239) |
| $ (10,386) | $ (7,480) | $ (25,610) | $ (11,090) | |
Three months ended February 28, 2010
Other income for the three-month period ended February 28, 2010 decreased $0.3 million from the prior year period on lower interest income.
Selling, general and administrative expense for the three-month period ended February 28, 2010 increased $2.6 million from the prior year period. The increase was primarily the result of $2.8 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 $0.4 million in the three-month period ended February 28, 2010 and reduced stock-based compensation $2.4 million in the three-month period ended February 28, 2009.
Interest
Interest expense incurred for the three-month period ended February 28, 2010 was $13.6 million, all of which was expensed. Interest expense incurred for the three-month period ended February 28, 2009 was $13.0 million, of which $4.7 million was capitalized in connection with our Hunter, Texas cement plant expansion project and $8.3 million was expensed.
Interest expense incurred for the three-month period ended February 28, 2010 increased $0.6 million primarily as a result of higher credit facility commitment fees and debt amortization expense. We have delayed completion of the Hunter, Texas cement plant expansion and do not expect to capitalize any interest in connection with the project during the remainder of fiscal year 2010.
Income Taxes
Income taxes for the interim periods ended February 28, 2010 and February 28, 2009 have been included in the accompanying financial statements on the basis of an estimated annual rate. The primary reason that the tax rate differs from the 35% federal statutory corporate rate is due to percentage depletion that is tax deductible, state income taxes and deductions for income from qualified domestic production activities. Our estimated effective tax rate for fiscal year 2010 is 38.3% compared to 25.5% for fiscal year 2009.
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 February 28, |
Nine months ended February 28, |
|||||||
| In thousands except per share | 2010 | 2009 | 2010 | 2009 | ||||
| NET SALES | $ 117,829 | $ 178,659 | $ 444,721 | $ 656,850 | ||||
| Cost of products sold | 131,126 | 149,015 | 407,041 | 567,925 | ||||
| GROSS PROFIT (LOSS) | (13,297) | 29,644 | 37,680 | 88,925 | ||||
| Selling, general and administrative | 17,568 | 15,982 | 53,708 | 49,184 | ||||
| Interest | 13,642 | 8,344 | 40,250 | 24,885 | ||||
| Loss on debt retirements | -- | -- | -- | 907 | ||||
| Other income | (1,044) | (7,944) | (9,424) | (18,396) | ||||
| 30,166 | 16,382 | 84,534 | 56,580 | |||||
| INCOME (LOSS) BEFORE INCOME TAXES | (43,463) | 13,262 | (46,854) | 32,345 | ||||
| Income taxes (benefit) | (16,358) | 2,341 | (17,762) | 7,638 | ||||
| NET INCOME (LOSS) | $ (27,105) | $ 10,921 | $ (29,092) | $ 24,707 | ||||
| Net income (loss) per share | ||||||||
| Basic | $ (.98) | $ .39 | $ (1.05) | $ .90 | ||||
| Diluted | $ (.98) | $ .39 | $ (1.05) | $ .89 | ||||
| Average shares outstanding | ||||||||
| Basic | 27,749 | 27,680 | 27,735 | 27,584 | ||||
| Diluted | 27,749 | 27,757 | 27,735 | 27,790 | ||||
| Cash dividends declared per share | $ .075 | $ .075 | $ .225 | $ .225 | ||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| TEXAS INDUSTRIES, INC. AND SUBSIDIARIES | ||||||
|
(Unaudited) February 28, |
May 31, |
|||||
| In thousands | 2010 | 2009 | ||||
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash and cash equivalents | $ 75,615 | $ 19,796 | ||||
| Receivables – net | 74,642 | 129,432 | ||||
| Inventories | 141,304 | 155,724 | ||||
| Deferred income taxes and prepaid expenses | 21,887 | 22,039 | ||||
| TOTAL CURRENT ASSETS | 313,448 | 326,991 | ||||
| OTHER ASSETS | ||||||
| Goodwill | 1,715 | 1,715 | ||||
| Real estate and investments | 7,334 | 10,001 | ||||
| Deferred charges and other | 14,050 | 14,486 | ||||
| 23,099 | 26,202 | |||||
| PROPERTY, PLANT AND EQUIPMENT | ||||||
| Land and land improvements | 157,613 | 156,917 | ||||
| Buildings | 58,109 | 58,442 | ||||
| Machinery and equipment | 1,246,767 | 1,247,931 | ||||
| Construction in progress | 328,476 | 328,256 | ||||
| 1,790,965 | 1,791,546 | |||||
| Less depreciation and depletion | 613,930 | 572,195 | ||||
| 1,177,035 | 1,219,351 | |||||
| $ 1,513,582 | $ 1,572,544 | |||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| CURRENT LIABILITIES | ||||||
| Accounts payable | $ 43,537 | $ 55,749 | ||||
| Accrued interest, compensation and other | 41,515 | 51,856 | ||||
| Current portion of long-term debt | 500 | 243 | ||||
| TOTAL CURRENT LIABILITIES | 85,552 | 107,848 | ||||
| LONG-TERM DEBT | 544,087 | 541,540 | ||||
| DEFERRED INCOME TAXES AND OTHER CREDITS | 111,171 | 120,011 | ||||
| SHAREHOLDERS' EQUITY | ||||||
| Common stock, $1 par value | 27,770 | 27,718 | ||||
| Additional paid-in capital | 473,949 | 469,908 | ||||
| Retained earnings | 283,863 | 319,199 | ||||
| Accumulated other comprehensive loss | (12,810) | (13,680) | ||||
| 772,772 | 803,145 | |||||
| $ 1,513,582 | $ 1,572,544 | |||||
| (Unaudited) | ||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
| TEXAS INDUSTRIES, INC. AND SUBSIDIARIES | ||||
|
Nine months ended February 28, |
||||
| In thousands | 2010 | 2009 | ||
| OPERATING ACTIVITIES | ||||
| Net income (loss) | $ (29,092) | $ 24,707 | ||
|
Adjustments to reconcile net income (loss) to cash provided by operating activities |
||||
| Depreciation, depletion and amortization | 49,263 | 51,199 | ||
| Gains on asset disposals | (1,324) | (6,238) | ||
| Deferred income taxes | (10,988) | 1,152 | ||
| Stock-based compensation expense (credit) | 3,732 | (9,168) | ||
| Excess tax benefits from stock-based compensation | (234) | (1,771) | ||
| Loss on debt retirements | -- | 907 | ||
| Other – net | 3,099 | 1,384 | ||
| Changes in operating assets and liabilities | ||||
| Receivables – net | 25,864 | 46,940 | ||
| Inventories | 14,102 | (20,004) | ||
| Prepaid expenses | 1,753 | 518 | ||
| Accounts payable and accrued liabilities | (9,315) | (17,089) | ||
| Net cash provided by operating activities | 46,860 | 72,537 | ||
| INVESTING ACTIVITIES | ||||
| Capital expenditures – expansions | (5,304) | (181,657) | ||
| Capital expenditures – other | (6,424) | (59,214) | ||
| Cash designated for property acquisitions | -- | 28,733 | ||
| Proceeds from asset disposals | 21,568 | 7,442 | ||
| Investments in life insurance contracts | 6,931 | 2,479 | ||
| Other – net | 14 | 11 | ||
| Net cash provided (used) by investing activities | 16,785 | (202,206) | ||
| FINANCING ACTIVITIES | ||||
| Long-term borrowings | -- | 327,250 | ||
| Debt retirements | (276) | (197,676) | ||
| Debt issuance costs | (2,039) | (5,470) | ||
| Stock option exercises | 499 | 4,341 | ||
| Excess tax benefits from stock-based compensation | 234 | 1,771 | ||
| Common dividends paid | (6,244) | (6,209) | ||
| Net cash provided (used) by financing activities | (7,826) | 124,007 | ||
| Increase (decrease) in cash and cash equivalents | 55,819 | (5,662) | ||
| Cash and cash equivalents at beginning of period | 19,796 | 39,527 | ||
| Cash and cash equivalents at end of period | $ 75,615 | $ 33,865 | ||