DALLAS, Jan. 7, 2010 (GLOBE NEWSWIRE) -- Texas Industries, Inc. (NYSE:TXI) today reported financial results for the quarter ended November 30, 2009. Net income was a loss of $3.7 million (<$.13> per share) and included after tax gains from sales of emission credits of $2.1 million ($.08 per share). Net income for the quarter ended November 30, 2008 was $3.1 million ($.11 per share).
General Comments
"We were able to maintain our gross profit margin compared to last year despite sales being down 36%," stated Mel Brekhus, President and Chief Executive Officer. "Abnormally inclement weather in our Texas market and the continuing impact of the recession led to cement, aggregate and ready-mix concrete volumes being down 32%, 43% and 35%, respectively."
"The ability to maintain our gross profit margin reflects our continued successful focus on cost management. I believe our operational focus of managing costs and generating cash along with our strong liquidity position have us well positioned to take advantage of the recovery that is expected to begin sometime during 2010," added Brekhus.
A teleconference will be held today, January 7, 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 Six months ended
November 30, November 30,
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In thousands except per
unit 2009 2008 2009 2008
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Operating Results
Total cement sales $ 61,726 $ 98,407 $ 140,186 $ 209,811
Total other sales and
delivery fees 6,457 9,641 13,193 19,600
--------- --------- --------- ---------
Total segment sales 68,183 108,048 153,379 229,411
Cost of products sold 58,359 94,206 128,218 198,763
--------- --------- --------- ---------
Gross profit 9,824 13,842 25,161 30,648
Selling, general and
administrative (4,359) (6,082) (9,033) (11,487)
Other income 4,670 1,008 6,413 6,272
--------- --------- --------- ---------
Operating Profit $ 10,135 $ 8,768 $ 22,541 $ 25,433
========= ========= ========= =========
Cement
Shipments (tons) 738 1,083 1,653 2,301
Prices ($/ton) $83.64 $90.87 $84.78 $91.17
Cost of sales ($/ton) $71.98 $79.04 $70.16 $79.15
Three months ended November 30, 2009
Cement operating profit for the three-month period ended November 30, 2009 was $10.1 million, an increase of $1.4 million from the prior year period.
Total segment sales for the three-month period ended November 30, 2009 were $68.2 million compared to $108.0 million for the prior year period. Cement sales decreased $36.7 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 69% of cement sales in the current period compared to 70% of cement sales in the prior year period. Shipments decreased 34% in our Texas market area and 26% in our California market area. Average cement prices decreased 6% in our Texas market area and 12% in our California market area.
Cost of products sold for the three-month period ended November 30, 2009 decreased $35.8 million from the prior year period primarily due to lower shipments and our efforts to manage costs. Cement unit costs decreased 9% from the prior year period on lower raw materials and supplies and maintenance costs. Supplies and maintenance costs in the prior year period included approximately $8 million related to scheduled maintenance at our north Texas cement plant.
Selling, general and administrative expense for the three-month period ended November 30, 2009 decreased $1.7 million from the prior year period. Lower overall expenses, including wages and benefits, marketing, travel, and legal, professional and other outside service expenses, as a result of our focus on reducing costs were offset in part by $0.5 million higher defined benefit plan expense.
Other income for the three-month period ended November 30, 2009 increased $3.7 million from the prior year period. In addition to increased royalty income of $0.3 million, other income in the current period includes gains of $3.4 million from sales of emission credits associated with our Crestmore cement plant in Riverside, California.
Aggregate Operations
Three months ended Six months ended
November 30, November 30,
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In thousands except per unit 2009 2008 2009 2008
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Operating Results
Total stone, sand and gravel
sales $ 20,217 $ 35,667 $ 48,011 $ 76,346
Total other sales and
delivery fees 16,070 24,838 38,377 55,956
-------- -------- -------- --------
Total segment sales 36,287 60,505 86,388 132,302
Cost of products sold 32,001 51,908 71,156 111,364
-------- -------- -------- --------
Gross profit 4,286 8,597 15,232 20,938
Selling, general and
administrative (2,489) (3,506) (5,194) (7,329)
Other income 432 463 830 870
-------- -------- -------- --------
Operating Profit $ 2,229 $ 5,554 $ 10,868 $ 14,479
======== ======== ======== ========
Stone, sand and gravel
Shipments (tons) 2,642 4,605 6,065 9,806
Prices ($/ton) $7.65 $7.74 $7.92 $7.79
Cost of sales ($/ton) $7.03 $6.62 $6.61 $6.44
Three months ended November 30, 2009
Aggregate operating profit for the three-month period ended November 30, 2009 was $2.2 million, a decrease of $3.3 million from the prior year period.
Total segment sales for the three-month period ended November 30, 2009 were $36.3 million compared to $60.5 million for the prior year period. Stone, sand and gravel sales decreased $15.5 million on 1% lower average prices and 43% 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 November 30, 2009 decreased $19.9 million from the prior year period primarily due to lower shipments. Overall stone, sand and gravel unit costs increased 6% from the prior year period.
Selling, general and administrative expense for the three-month period ended November 30, 2009 decreased $1.0 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 November 30, 2009 was comparable to the prior year period.
Consumer Products Operations
Three months ended Six months ended
November 30, November 30,
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In thousands except per unit 2009 2008 2009 2008
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Operating Results
Total ready-mix concrete
sales $ 41,720 $ 64,832 $ 95,773 $143,726
Total other sales and
delivery fees 12,733 15,812 28,218 32,142
-------- -------- -------- --------
Total segment sales 54,453 80,644 123,991 175,868
Cost of products sold 51,691 76,429 113,407 168,173
-------- -------- -------- --------
Gross profit 2,762 4,215 10,584 7,695
Selling, general and
administrative (2,749) (3,716) (5,953) (8,031)
Other income 268 180 401 565
-------- -------- -------- --------
Operating Profit (Loss) $ 281 $ 679 $ 5,032 $ 229
======== ======== ======== ========
Ready-mix concrete
Shipments (cubic yards) 501 769 1,113 1,716
Prices ($/cubic yard) $83.02 $84.37 $86.01 $83.78
Cost of sales ($/cubic yard) $80.98 $81.96 $80.39 $81.52
Three months ended November 30, 2009
Consumer products operating profit for the three-month period ended November 30, 2009 was $0.3 million, a decrease of $0.4 million from the prior year period.
Total segment sales for the three-month period ended November 30, 2009 were $54.5 million compared to $80.6 million for the prior year period. Ready-mix concrete sales for the three-month period ended November 30, 2009 decreased $23.1 million on 2% lower average prices and 35% 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 November 30, 2009 decreased $24.7 million from the prior year period. Overall ready-mix concrete unit costs decreased 1% from the prior year period primarily due to lower raw material costs offset in part by the effect of lower shipments. Our raw material unit costs including the cost of transportation decreased approximately 11% from the prior year period.
Selling, general and administrative expense for the three-month period ended November 30, 2009 decreased $1.0 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 November 30, 2009 increased $0.1 million from the prior year period. Other income in the current period includes gains of $0.2 million from routine sales of surplus operating assets.
Corporate
Three months ended Six months ended
November 30, November 30,
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In thousands 2009 2008 2009 2008
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Other income $ 358 $ 560 $ 736 $ 2,745
Selling, general and
administrative (6,289) (2,560) (15,960) (6,355)
-------- -------- -------- --------
$ (5,931) $ (2,000) $(15,224) $ (3,610)
======== ======== ======== ========
Three months ended November 30, 2009
Other income for the three-month period ended November 30, 2009 decreased $0.2 million from the prior year period on lower interest income.
Selling, general and administrative expense for the three-month period ended November 30, 2009 increased $3.7 million from the prior year period. The increase was primarily the result of $3.2 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 reduced stock-based compensation $1.5 million in the three-month period ended November 30, 2009 and reduced stock-based compensation $4.6 million in the three-month period ended November 30, 2008.
Interest
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, 2008 was $12.5 million, of which $3.2 million was capitalized in connection with our Hunter, Texas cement plant expansion project and $9.3 million was expensed.
Interest expense incurred for the three-month period ended November 30, 2009 increased $0.9 million primarily as a result of higher interest on life insurance policies 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 November 30, 2009 and November 30, 2008 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 41.4% compared to 28.3% 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 Six months ended
November 30, November 30,
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In thousands except per
share 2009 2008 2009 2008
---------------------------------------------------------------------
NET SALES $ 142,935 $ 221,799 $ 326,892 $ 478,191
Cost of products sold 126,063 195,145 275,915 418,910
--------- --------- --------- ---------
GROSS PROFIT 16,872 26,654 50,977 59,281
Selling, general and
administrative 15,886 15,864 36,140 33,202
Interest 13,364 9,296 26,608 16,541
Loss on debt retirements -- -- -- 907
Other income (5,728) (2,211) (8,380) (10,452)
--------- --------- --------- ---------
23,522 22,949 54,368 40,198
--------- --------- --------- ---------
INCOME (LOSS) BEFORE
INCOME TAXES (6,650) 3,705 (3,391) 19,083
Income taxes (benefit) (2,948) 571 (1,404) 5,297
--------- --------- --------- ---------
NET INCOME (LOSS) $ (3,702) $ 3,134 $ (1,987) $ 13,786
========= ========= ========= =========
Net income (loss) per
share
Basic $ (.13) $ .11 $ (.07) $ .50
Diluted $ (.13) $ .11 $ (.07) $ .50
========= ========= ========= =========
Average shares outstanding
Basic 27,736 27,566 27,728 27,536
Diluted 27,736 27,782 27,728 27,806
========= ========= ========= =========
Cash dividends declared
per share $ .075 $ .075 $ .15 $ .15
========= ========= ========= =========
CONSOLIDATED BALANCE SHEETS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
(Unaudited)
November 30, May 31,
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In thousands 2009 2009
---------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 56,794 $ 19,796
Receivables - net 115,469 129,432
Inventories 161,431 155,724
Deferred income taxes and prepaid expenses 21,320 22,039
----------- -----------
TOTAL CURRENT ASSETS 355,014 326,991
OTHER ASSETS
Goodwill 1,715 1,715
Real estate and investments 7,827 10,001
Deferred charges and other 15,787 14,486
----------- -----------
25,329 26,202
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements 158,193 156,917
Buildings 58,232 58,442
Machinery and equipment 1,249,864 1,247,931
Construction in progress 322,374 328,256
----------- -----------
1,788,663 1,791,546
Less depreciation and depletion 601,982 572,195
----------- -----------
1,186,681 1,219,351
----------- -----------
$ 1,567,024 $ 1,572,544
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 41,144 $ 55,749
Accrued interest, compensation and other 60,224 51,856
Current portion of long-term debt 541 243
----------- -----------
TOTAL CURRENT LIABILITIES 101,909 107,848
LONG-TERM DEBT 543,244 541,540
DEFERRED INCOME TAXES AND OTHER CREDITS 121,591 120,011
SHAREHOLDERS' EQUITY
Common stock, $1 par value 27,746 27,718
Additional paid-in capital 472,583 469,908
Retained earnings 313,051 319,199
Accumulated other comprehensive loss (13,100) (13,680)
----------- -----------
800,280 803,145
----------- -----------
$ 1,567,024 $ 1,572,544
=========== ===========
(Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
Six months ended
November 30,
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In thousands 2009 2008
---------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) $ (1,987) $ 13,786
Adjustments to reconcile net income (loss)
to cash provided by operating activities
Depreciation, depletion and amortization 32,971 34,016
Gains on asset disposals (1,433) (427)
Deferred income taxes 756 3,627
Stock-based compensation expense (credit) 2,143 (7,829)
Excess tax benefits from stock-based
compensation (248) (1,766)
Loss on debt retirements -- 907
Other - net 609 (1,067)
Changes in operating assets and liabilities
Receivables - net 14,020 30,074
Inventories (3,843) (10,443)
Prepaid expenses 1,767 914
Accounts payable and accrued liabilities (4,823) (23,454)
--------- ---------
Net cash provided by operating activities 39,932 38,338
INVESTING ACTIVITIES
Capital expenditures - expansions (4,543) (123,420)
Capital expenditures - other (2,899) (51,911)
Cash designated for property acquisitions -- 28,733
Proceeds from asset disposals 1,443 865
Investments in life insurance contracts 6,726 2,263
Other - net (2) 175
--------- ---------
Net cash provided (used) by investing
activities 725 (143,295)
FINANCING ACTIVITIES
Long-term borrowings -- 327,250
Debt retirements (144) (197,610)
Debt issuance costs (2,039) (3,476)
Stock option exercises 356 3,885
Excess tax benefits from stock-based
compensation 248 1,766
Common dividends paid (2,080) (4,131)
--------- ---------
Net cash provided (used) by financing
activities (3,659) 127,684
--------- ---------
Increase in cash and cash equivalents 36,998 22,727
Cash and cash equivalents at beginning of
period 19,796 39,527
--------- ---------
Cash and cash equivalents at end of period $ 56,794 $ 62,254
========= =========