The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from GlobeNewswire (a Nasdaq OMX company)

TXI Reports First Quarter Results

Wednesday, October 02, 2013

TXI Reports First Quarter Results

16:44 EDT Wednesday, October 02, 2013

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.

CONTACT: T. Lesley Vines, Jr.
Corporate Controller & Treasurer
Direct 972.647.6722 E-mail lvines@txi.com

Texas Industries, Inc. Logo

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections