DALLAS, Oct. 2, 2013 (GLOBE NEWSWIRE) -- Texas Industries, Inc. (NYSE:TXI) today reported financial results for the quarter ended August 31, 2013. Results for the quarter were a net income of $.4 million or $.01 per share. Results for the quarter ended August 31, 2012 were a loss of $2.7 million or $.08 per share.
EBITDA from continuing operations for the August quarter equaled $37.8 million and EBITDA from continuing operations for the prior year's August quarter equaled $14.1 million. EBITDA for discontinued operations equaled $5.4 million in last year's August quarter. Continuing operations' EBITDA as a percentage of net sales for the August quarter this year and last year equaled 16.2% and 8.1%, respectively.
General Comments
"EBITDA increased $23.7 million on $58.6 million higher net sales," stated Mel Brekhus, Chief Executive Officer. "The improved results reflect the continuing improvement in construction activity in all of our markets."
"It is satisfying to start reaping the benefits from our recent strategic activities. So far, the start-up of our new kiln in central Texas has been the most successful of any I have been involved with in my career and we are realizing the benefits we expected from the expansion of our vertical integration footprint last spring. We continue to focus on doing everything we can to fully participate in the market recoveries under way, including accelerating the resumption of production from the first kiln in central Texas early next calendar year," added Brekhus.
A teleconference will be held October 3, 2013 at 10:00 Central Daylight 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 | ||
| August 31, | August 31, | |
| In thousands except per unit | 2013 | 2012 |
| Operating Results | ||
| Cement sales | $ 104,426 | $ 87,313 |
| Other sales and delivery fees | 10,322 | 9,892 |
| Total segment sales | 114,748 | 97,205 |
| Cost of products sold | 97,743 | 86,119 |
| Gross profit | 17,005 | 11,086 |
| Selling, general and administrative | (3,649) | (3,544) |
| Other income, net | 637 | 880 |
| Operating profit | $ 13,993 | $ 8,422 |
| Cement | ||
| Shipments (tons) | 1,314 | 1,119 |
| Prices ($/ton) | $ 79.43 | $ 78.06 |
| Cost of sales ($/ton) | $ 67.29 | $ 68.55 |
Three months ended August 31, 2013
Cement operating profit for the three-month periods ended August 31, 2013 and 2012 was $14.0 million and $8.4 million, respectively.
Total segment sales for the three-month period ended August 31, 2013 were $114.7 million compared to $97.2 million for the prior year period. Cement sales increased $17.1 million from the prior year period. Our Texas market area accounted for approximately 70% of cement sales in the current period compared to 67% of cement sales in the prior year period. Average cement prices increased 2% in our Texas market from the prior year period. Average cement prices increased 1% in our California market from the prior year period. Shipments increased 23% in our Texas market area and 8% in our California market area.
Cost of products sold for the three-month period ended August 31, 2013 increased $11.6 million from the prior year period primarily due to higher shipments, depreciation expense related to our new production line at our Hunter cement plant, repair and maintenance costs at our Texas plants, power and fuel costs, and emission allowance credits associated with our compliance with The California Global Warming Solutions Act of 2006, which took effect on January 1, 2013. Cement unit cost of sales decreased 2% from the prior year period as the impact of higher shipments were partially offset by the higher costs including depreciation, repair and maintenance, power and fuel, and emission allowance credits.
Selling, general and administrative expense for the three-month period ended August 31, 2013 increased $0.1 million from the prior year period.
Other income for the three-month period ended August 31, 2013 decreased $0.2 million from the prior year period.
Aggregates Operations
| Three months ended | ||
| August 31, | August 31, | |
| In thousands except per unit | 2013 | 2012 |
| Operating Results | ||
| Stone, sand and gravel sales | $ 35,670 | $ 28,151 |
| Delivery fees and other | 13,488 | 12,830 |
| Total segment sales | 49,158 | 40,981 |
| Cost of products sold | 41,416 | 36,237 |
| Gross profit | 7,742 | 4,744 |
| Selling, general and administrative | (1,490) | (1,008) |
| Other income, net | 335 | 263 |
| Operating profit | $ 6,587 | $ 3,999 |
| Stone, sand and gravel | ||
| Shipments (tons) | 4,447 | 3,914 |
| Prices ($/ton) | $ 8.02 | $ 7.19 |
| Cost of sales ($/ton) | $ 6.33 | $ 5.98 |
Previously, the aggregates segment included our expanded shale and clay lightweight aggregates operations which has been classified as discontinued operations in the prior period. Therefore, amounts for these operations are not included in the information presented.
Three months ended August 31, 2013
Aggregates operating profit for the three-month periods ended August 31, 2013 and 2012 was $6.6 million and $4.0 million, respectively.
Total segment sales for the three-month period ended August 31, 2013 were $49.2 million compared to $41.0 million for the prior year period. Stone, sand and gravel sales increased $7.6 million from the prior year period on 14% higher shipments and 12% higher average prices.
Cost of products sold for the three-month period ended August 31, 2013 increased $5.2 million from the prior year period primarily due to increased stone, sand and gravel shipments. Stone, sand and gravel unit costs increased 6% from the prior year period primarily due to the effect of geographic product mix partially offset by the effect of higher shipments.
Selling, general and administrative expense for the three-month period ended August 31, 2013 increased $0.5 million from the prior year period primarily due to higher bad debt expense.
Concrete Operations
| Three months ended | ||
| August 31, | August 31, | |
| In thousands except per unit | 2013 | 2012 |
| Operating Results | ||
| Ready-mix concrete sales | $ 98,234 | $ 51,918 |
| Delivery fees | 286 | 127 |
| Total segment sales | 98,520 | 52,045 |
| Cost of products sold | 92,589 | 52,673 |
| Gross profit (loss) | 5,931 | (628) |
| Selling, general and administrative | (3,164) | (2,690) |
| Other income, net | 3,351 | 1,410 |
| Operating profit (loss) | $ 6,118 | $ (1,908) |
| Ready-mix concrete | ||
| Shipments (cubic yards) | 1,134 | 649 |
| Prices ($/cubic yard) | $ 86.86 | $ 80.08 |
| Cost of sales ($/cubic yard) | $ 81.65 | $ 80.97 |
Three months ended August 31, 2013
Concrete operating profit (loss) for the three-month periods ended August 31, 2013 and 2012 was $6.1 million and $(1.9) million, respectively.
Total segment sales for the three-month period ended August 31, 2013 were $98.5 million compared to $52.0 million for the prior year period. Segment sales increased $46.5 million from the prior year period due to the addition of the 42 ready-mix concrete plants acquired through an asset exchange in the prior year period, which accounts for 65% of the increase in shipments compared to the prior year period. Pricing improved in virtually every market resulting in 8.5% higher average prices.
Cost of products sold for the three-month period ended August 31, 2013 increased $39.9 million from the prior year period as a result of the 42 additional ready-mix concrete plants acquired through an asset exchange in the prior year period, along with increased shipments from existing locations. Ready-mix concrete unit costs increased 1% from the prior year period primarily due to increased material and delivery costs partially offset by the effects of higher shipments.
Selling, general and administrative expense for the three-month period ended August 31, 2013 increased $0.5 million from the prior year period due to the addition of the 42 ready-mix concrete plants acquired through an asset exchange in the prior year period.
Other income for the three-month period ended August 31, 2013 increased $1.9 million from the prior year period primarily due to higher earnings from our joint venture of $0.5 million and increased gains from the disposal of assets of $1.2 million.
Corporate
| Three months ended | ||
| August 31, | August 31, | |
| In thousands | 2013 | 2012 |
| Other income, net | $ 1,534 | $ 46 |
| Selling, general and administrative | (10,262) | (10,317) |
| $ (8,728) | $ (10,271) | |
Three months ended August 31, 2013
Other income for the three-month period ended August 31, 2013 contains a gain of $1.3 million for a routine sale of real estate.
Selling, general and administrative expense for the three-month period ended August 31, 2013 remained relatively unchanged from the prior year period.
Interest
Interest expense incurred for the three-month period ended August 31, 2013 was $17.4 million. Interest expense incurred for the three-month period ended August 31, 2012 was $17.1 million, of which $9.3 million was capitalized in connection with our Hunter, Texas cement plant expansion project and $7.8 million was expensed.
Income Taxes
Income taxes for the interim periods ended August 31, 2013 and 2012 have been included in the accompanying financial statements on the basis of an estimated annual rate. The tax rate differs from the 35% federal statutory corporate rate primarily due to percentage depletion that is tax deductible, state income taxes and valuation allowances against deferred tax assets. The estimated annualized rate for continuing operations is 29.1% for fiscal year 2014 compared to (1.9)% for fiscal year 2013. We made no income tax payments and received no refunds in the three-month period ended August 31, 2013 and 2012.
Certain statements contained in this quarterly report are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements may include the words "may," "will," "estimate," "intend," "continue," "believe," "expect," "plan," "anticipate," and other similar words. 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 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, 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.
| Earnings before Interest, Taxes, Depreciation and Amortization* | Three months ended | |
| August 31, | August 31, | |
| in thousands | 2013 | 2012 |
| Income before income taxes from continuing operations | $ 599 | $ (7,533) |
| Depreciation | 19,862 | 13,875 |
| Interest Expense | 17,371 | 7,777 |
| EBITDA from continuing operations | $ 37,832 | $ 14,119 |
| EBITDA from discontinued operations** | -- | 5,362 |
| Total EBITDA | $ 37,832 | $ 19,481 |
| EBITDA Margin | ||
| EBITDA from continuing operations | $ 37,832 | $ 14,119 |
| Net Sales from continuing operations | $ 233,082 | $ 174,523 |
| EBITDA Margin | 16.2% | 8.1% |
| *A full reconciliation of EBITDA is continued on our website at www.txi.com. | ||
| ** Expanded shale and clay operation's profit of $5.0 million plus depreciation expense of $0.4 million. | ||
EBITDA represents income before interest, income taxes, depreciation and amortization and is presented because we believe it is a useful indicator of our performance and our ability to meet debt service and capital expenditure requirements. It is not, however, intended as an alternative measure of operating results or cash flow from operations as determined in accordance with generally accepted accounting principles. EBITDA is not necessarily comparable to similarly titled measures used by other companies.
| (Unaudited) | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| TEXAS INDUSTRIES, INC. AND SUBSIDIARIES | ||
| Three months ended | ||
| August 31, | August 31, | |
| In thousands except per share | 2013 | 2012 |
| NET SALES | $ 233,082 | $ 174,523 |
| Cost of products sold | 202,416 | 159,323 |
| GROSS PROFIT | 30,666 | 15,200 |
| Selling, general and administrative | 18,553 | 17,557 |
| Interest expense | 17,371 | 7,777 |
| Other income, net | (5,857) | (2,599) |
| INCOME (LOSS) BEFORE INCOME TAXES FROM CONTINUING OPERATIONS | 599 | (7,535) |
| Income taxes (benefit) | 170 | (139) |
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS | $ 429 | $ (7,396) |
| NET INCOME FROM DISCONTINUED OPERATIONS | — | 4,738 |
| NET INCOME (LOSS) | $ 429 | $ (2,658) |
| NET INCOME (LOSS) PER SHARE FROM CONTINUING OPERATIONS: | ||
| Basic | $ 0.02 | $ (0.26) |
| Diluted | $ 0.01 | $ (0.26) |
| NET INCOME PER SHARE FROM DISCONTINUED OPERATIONS: | ||
| Basic | $ — | $ 0.18 |
| Diluted | $ — | $ 0.18 |
| NET INCOME (LOSS) PER SHARE: | ||
| Basic | $ 0.02 | $ (0.08) |
| Diluted | $ 0.01 | $ (0.08) |
| AVERAGE SHARES OUTSTANDING | ||
| Basic | 28,578 | 27,998 |
| Diluted | 29,054 | 27,998 |
See notes to consolidated financial statements.
| (Unaudited) | ||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
| TEXAS INDUSTRIES, INC. AND SUBSIDIARIES | ||
| Three months ended | ||
| August 31, | August 31, | |
| In thousands | 2013 | 2012 |
| Net Income (loss) | $ 429 | $ (2,658) |
| Other comprehensive income: | ||
| Unrealized actuarial gain (loss) of defined benefit plans, net of tax expense (benefit) of $0 and $(32) | — | (55) |
| Reclassification of actuarial loss of defined benefit plans, net of tax benefit of $6 and $244, respectively. | 9 | 423 |
| Total other comprehensive income | 9 | 368 |
| Comprehensive income (loss) | $ 438 | $ (2,290) |
See notes to consolidated financial statements.
| CONSOLIDATED BALANCE SHEETS | ||
| TEXAS INDUSTRIES, INC. AND SUBSIDIARIES | ||
| (Unaudited) | ||
| August 31, | May 31, | |
| In thousands except per share | 2013 | 2013 |
| ASSETS | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | $ 48,472 | $ 61,296 |
| Receivables – net | 142,032 | 126,922 |
| Inventories | 107,678 | 105,054 |
| Deferred income taxes and prepaid expenses | 26,564 | 27,294 |
| TOTAL CURRENT ASSETS | 324,746 | 320,566 |
| PROPERTY, PLANT AND EQUIPMENT | ||
| Land and land improvements | 172,488 | 172,780 |
| Buildings | 51,461 | 50,968 |
| Machinery and equipment | 1,648,894 | 1,647,460 |
| Construction in progress | 19,017 | 16,642 |
| 1,891,860 | 1,887,850 | |
| Less depreciation and depletion | 680,804 | 661,454 |
| 1,211,056 | 1,226,396 | |
| OTHER ASSETS | ||
| Goodwill | 40,575 | 40,575 |
| Real estate and investments | 30,062 | 29,471 |
| Deferred other charges | 19,359 | 18,817 |
| 89,996 | 88,863 | |
| $ 1,625,798 | $ 1,635,825 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| CURRENT LIABILITIES | ||
| Accounts payable | $ 69,617 | $ 69,061 |
| Accrued interest, compensation and other | 49,541 | 62,336 |
| Current portion of long-term debt | 1,911 | 1,872 |
| TOTAL CURRENT LIABILITIES | 121,069 | 133,269 |
| LONG-TERM DEBT | 657,449 | 657,935 |
| DEFERRED INCOME TAXES AND OTHER CREDITS | 89,954 | 91,157 |
| SHAREHOLDERS' EQUITY | ||
| Common stock, $1 par value; authorized 100,000 shares; issued and outstanding 28,609 and 28,572 shares, respectively | 28,609 | 28,572 |
| Additional paid-in capital | 517,947 | 514,560 |
| Retained earnings | 229,115 | 228,686 |
| Accumulated other comprehensive loss | (18,345) | (18,354) |
| 757,326 | 753,464 | |
| $ 1,625,798 | $ 1,635,825 | |
See notes to consolidated financial statements.
| (Unaudited) | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| TEXAS INDUSTRIES, INC. AND SUBSIDIARIES | ||
| Three months ended | ||
| August 31, | August 31, | |
| In thousands | 2013 | 2012 |
| OPERATING ACTIVITIES | ||
| Net income (loss) | $ 429 | $ (2,658) |
| Adjustments to reconcile net income (loss) to cash provided (used) by operating activities | ||
| Depreciation, depletion and amortization | 19,862 | 14,216 |
| Gain on asset disposals | (3,069) | (2,503) |
| Deferred income tax expense (benefit) | 51 | (3) |
| Stock-based compensation expense | 2,298 | 2,766 |
| Other – net | (1,848) | (3,026) |
| Changes in operating assets and liabilities | ||
| Receivables – net | (16,136) | (14,013) |
| Inventories | (2,824) | 10,846 |
| Prepaid expenses | 278 | 1,099 |
| Accounts payable and accrued liabilities | (5,113) | (4,632) |
| Net cash provided (used) by operating activities | (6,072) | 2,092 |
| INVESTING ACTIVITIES | ||
| Capital expenditures – expansions | (7,125) | (28,114) |
| Capital expenditures – other | (5,373) | (4,496) |
| Proceeds from asset disposals | 4,319 | 3,578 |
| Investments in life insurance contracts | 934 | 146 |
| Other – net | — | (59) |
| Net cash used by investing activities | (7,245) | (28,945) |
| FINANCING ACTIVITIES | ||
| Debt payments | (447) | (1,028) |
| Stock option exercises | 940 | 725 |
| Net cash provided (used) by financing activities | 493 | (303) |
| Decrease in cash and cash equivalents | (12,824) | (27,156) |
| Cash and cash equivalents at beginning of period | 61,296 | 88,027 |
| Cash and cash equivalents at end of period | $ 48,472 | $ 60,871 |
See notes to consolidated financial statements.