DALLAS, March 23, 2011 (GLOBE NEWSWIRE) -- Texas Industries, Inc. (NYSE:TXI) today reported financial results for the quarter ended February 28, 2011. Results for the quarter were a net loss of $20.9 million or $.75 per share. Results for the quarter ended February 28, 2010 were a net loss of $27.1 million or $.98 per share.
General Comments
"Shipments were up compared to the same period a year ago," stated Mel Brekhus, Chief Executive Officer. "However, since we had abnormally inclement weather in both periods, we will not know how much of the increase is attributable to improved market conditions until we see the extent of the weather related rebound in our fourth quarter."
"We continue to focus on meeting market demand as cost effectively as possible," added Brekhus. "We resumed construction of TXI's central Texas cement plant expansion last quarter and that project is proceeding as planned."
A teleconference will be held tomorrow, March 24, 2011 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 February 28, |
Nine months ended February 28, |
|||
| In thousands except per unit | 2011 | 2010 | 2011 | 2010 |
| Operating Results | ||||
| Total cement sales | $ 54,018 | $ 52,322 | $ 183,307 | $ 192,508 |
| Total other sales and delivery fees | 6,144 | 5,296 | 21,815 | 18,489 |
| Total segment sales | 60,162 | 57,618 | 205,122 | 210,997 |
| Cost of products sold | 70,010 | 70,616 | 203,194 | 198,834 |
| Gross profit (loss) | (9,848) | (12,998) | 1,928 | 12,163 |
| Selling, general and administrative | (3,286) | (3,715) | (12,097) | (12,748) |
| Other income | 696 | 411 | 3,643 | 6,824 |
| Operating Profit (Loss) | $ (12,438) | $ (16,302) | $ (6,526) | $ 6,239 |
| Cement | ||||
| Shipments (tons) | 704 | 639 | 2,361 | 2,292 |
| Prices ($/ton) | $76.75 | $81.82 | $77.64 | $83.96 |
| Cost of sales ($/ton) | $90.43 | $101.70 | $77.67 | $78.96 |
Three months ended February 28, 2011
Cement operating loss for the three-month periods ended February 28, 2011 and February 28, 2010 was $12.4 million and $16.3 million, respectively. Higher shipments offset in part by lower sales prices increased total sales $2.5 million from the prior year period.
Total segment sales for the three-month period ended February 28, 2011 were $60.2 million compared to $57.6 million for the prior year period. Cement sales increased $1.7 million from 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 72% of cement sales in the current period compared to 73% of cement sales in the prior year period. Average cement prices decreased 7% in our Texas market area and 5% in our California market area. Shipments increased 9% in our Texas market area and 13% in our California market area.
Cost of products sold for the three-month period ended February 28, 2011 decreased $0.6 million from the prior year period. The effect of higher shipments was offset by lower energy and raw material costs and the effect of higher clinker production. Cement unit costs decreased 11% from the prior year period.
Selling, general and administrative expense for the three-month period ended February 28, 2011 decreased $0.4 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 February 28, 2011 increased $0.3 million from the prior year period. The increase was primarily due to higher 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 | 2011 | 2010 | 2011 | 2010 |
| Operating Results | ||||
| Total stone, sand and gravel sales | $ 18,212 | $ 14,849 | $ 67,449 | $ 62,860 |
| Total other sales and delivery fees | 16,692 | 14,410 | 58,507 | 52,787 |
| Total segment sales | 34,904 | 29,259 | 125,956 | 115,647 |
| Cost of products sold | 32,323 | 28,882 | 110,735 | 100,038 |
| Gross profit | 2,581 | 377 | 15,221 | 15,609 |
| Selling, general and administrative | (2,679) | (1,937) | (8,552) | (7,131) |
| Other income | 16 | 409 | 1,706 | 1,239 |
| Operating Profit (Loss) | $ (82) | $ (1,151) | $ 8,375 | $ 9,717 |
| Stone, sand and gravel | ||||
| Shipments (tons) | 2,470 | 1,947 | 9,080 | 8,012 |
| Prices ($/ton) | $7.38 | $7.62 | $7.43 | $7.85 |
| Cost of sales ($/ton) | $7.23 | $8.41 | $6.69 | $7.04 |
Three months ended February 28, 2011
Aggregate operating loss for the three-month periods ended February 28, 2011 and February 28, 2010 was $0.1 million and $1.2 million, respectively.
Total segment sales for the three-month period ended February 28, 2011 were $34.9 million compared to $29.3 million for the prior year period. Stone, sand and gravel sales increased $3.4 million from the prior year period on 27% higher shipments and 3% lower average prices.
Cost of products sold for the three-month period ended February 28, 2011 increased $3.4 million from the prior year period primarily due to higher shipments. Stone, sand and gravel unit costs decreased 14% from the prior year period primarily due to the effect of higher shipments on unit costs.
Selling, general and administrative expense for the three-month period ended February 28, 2011 increased $0.7 million from the prior year period primarily due to higher provisions for casualty insurance claims.
Other income for the three-month period ended February 28, 2011 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 February 28, |
Nine months ended February 28, |
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| In thousands except per unit | 2011 | 2010 | 2011 | 2010 |
| Operating Results | ||||
| Total ready-mix concrete sales | $ 34,351 | $ 33,695 | $ 129,834 | $ 129,468 |
| Total other sales and delivery fees | 10,998 | 10,832 | 38,813 | 39,050 |
| Total segment sales | 45,349 | 44,527 | 168,647 | 168,518 |
| Cost of products sold | 47,443 | 45,203 | 166,982 | 158,610 |
| Gross profit (loss) | (2,094) | (676) | 1,665 | 9,908 |
| Selling, general and administrative | (2,607) | (1,421) | (8,330) | (7,374) |
| Other income | 66 | 115 | 398 | 516 |
| Operating Profit (Loss) | $ (4,635) | $ (1,982) | $ (6,267) | $ 3,050 |
| Ready-mix concrete | ||||
| Shipments (cubic yards) | 471 | 427 | 1,715 | 1,540 |
| Prices ($/cubic yard) | $72.83 | $79.17 | $75.66 | $84.12 |
| Cost of sales ($/cubic yard) | $80.71 | $84.35 | $77.97 | $81.48 |
Three months ended February 28, 2011
Consumer products operating loss for the three-month periods ended February 28, 2011 and February 28, 2010 was $4.6 million and $2.0 million, respectively. Reduced margins due to lower sales prices increased operating loss from the prior year period.
Total segment sales for the three-month period ended February 28, 2011 were $45.3 million compared to $44.5 million for the prior year period. Ready-mix concrete sales for the three-month period ended February 28, 2011 increased $0.7 million from the prior year period on 8% lower average prices and 10% higher shipments.
Cost of products sold for the three-month period ended February 28, 2011 increased $2.2 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 and lower raw material costs offset in part by higher repair and maintenance costs.
Selling, general and administrative expense for the three-month period ended February 28, 2011 increased $1.2 million from the prior year period primarily due to higher provisions for bad debts and casualty insurance claims.
Other income for the three-month period ended February 28, 2011 was comparable to the prior year period.
Corporate
|
Three months ended February 28, |
Nine months ended February 28, |
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| In thousands | 2011 | 2010 | 2011 | 2010 |
| Other income | $ 337 | $ 109 | $ 2,187 | $ 845 |
| Selling, general and administrative | (8,747) | (10,495) | (23,024) | (26,455) |
| $ (8,410) | $ (10,386) | $ (20,837) | $ (25,610) | |
Three months ended February 28, 2011
Other income for the three-month period ended February 28, 2011 increased $0.2 million from the prior year period primarily due to higher oil and gas royalty payments offset in part by lower interest income.
Selling, general and administrative expense for the three-month period ended February 28, 2011 decreased $1.7 million from the prior year period. The decrease was primarily the result of lower provisions for casualty insurance claims and property tax expense.
Interest
Interest expense incurred for the three-month period ended February 28, 2011 was $17.3 million, of which $7.6 million was capitalized in connection with our Hunter, Texas cement plant expansion project and $9.7 million was expensed. 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, 2011 increased from the prior year period primarily as a result of higher average outstanding debt at higher interest rates due to the August 2010 refinancing of our 7.25% senior notes.
Income Taxes
Income taxes for the interim periods ended February 28, 2011 and February 28, 2010 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 nine-month period ended February 28, 2011. The estimated annualized rate excluding this charge is 40.2% for fiscal year 2011 compared to 38.3% 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
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| TEXAS INDUSTRIES, INC. AND SUBSIDIARIES | ||||
|
Three months ended February 28, |
Nine months ended February 28, |
|||
| In thousands except per share | 2011 | 2010 | 2011 | 2010 |
| NET SALES | $ 125,818 | $ 117,829 | $ 446,051 | $ 444,721 |
| Cost of products sold | 135,179 | 131,126 | 427,237 | 407,041 |
| GROSS PROFIT (LOSS) | (9,361) | (13,297) | 18,814 | 37,680 |
| Selling, general and administrative | 17,319 | 17,568 | 52,003 | 53,708 |
| Interest | 9,670 | 13,642 | 37,967 | 40,250 |
| Loss on debt retirements | -- | -- | 29,619 | -- |
| Other income | (1,115) | (1,044) | (7,934) | (9,424) |
| 25,874 | 30,166 | 111,655 | 84,534 | |
| LOSS BEFORE INCOME TAXES | (35,235) | (43,463) | (92,841) | (46,854) |
| Income tax benefit | (14,301) | (16,358) | (37,014) | (17,762) |
| NET LOSS | $ (20,934) | $ (27,105) | $ (55,827) | $ (29,092) |
| Net loss per share | ||||
| Basic | $ (.75) | $ (.98) | $ (2.01) | $ (1.05) |
| Diluted | $ (.75) | $ (.98) | $ (2.01) | $ (1.05) |
| Average shares outstanding | ||||
| Basic | 27,839 | 27,749 | 27,811 | 27,735 |
| Diluted | 27,839 | 27,749 | 27,811 | 27,735 |
| Cash dividends declared per share | $ .075 | $ .075 | $ .225 | $ .225 |
| CONSOLIDATED BALANCE SHEETS | ||
| TEXAS INDUSTRIES, INC. AND SUBSIDIARIES | ||
|
(Unaudited) February 28, |
May 31, |
|
| In thousands | 2011 | 2010 |
| ASSETS | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | $ 123,362 | $ 74,946 |
| Receivables – net | 69,999 | 112,184 |
| Inventories | 143,341 | 142,419 |
| Deferred income taxes and prepaid expenses | 22,774 | 23,426 |
| TOTAL CURRENT ASSETS | 359,476 | 352,975 |
| PROPERTY, PLANT AND EQUIPMENT | ||
| Land and land improvements | 158,941 | 158,367 |
| Buildings | 58,951 | 58,351 |
| Machinery and equipment | 1,226,451 | 1,220,021 |
| Construction in progress | 343,680 | 322,039 |
| 1,788,023 | 1,758,778 | |
| Less depreciation and depletion | 646,841 | 604,269 |
| 1,141,182 | 1,154,509 | |
| OTHER ASSETS | ||
| Goodwill | 1,715 | 1,715 |
| Real estate and investments | 7,007 | 6,774 |
| Deferred charges and other | 20,314 | 15,774 |
| 29,036 | 24,263 | |
| $ 1,529,694 | $ 1,531,747 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| CURRENT LIABILITIES | ||
| Accounts payable | $ 43,265 | $ 56,214 |
| Accrued interest, compensation and other | 40,087 | 51,455 |
| Current portion of long-term debt | 72 | 234 |
| TOTAL CURRENT LIABILITIES | 83,424 | 107,903 |
| LONG-TERM DEBT | 652,422 | 538,620 |
| DEFERRED INCOME TAXES AND OTHER CREDITS | 89,177 | 123,976 |
| SHAREHOLDERS' EQUITY | ||
|
Common stock, $1 par value; authorized 100,000 shares; issued and outstanding 27,875 and 27,796 shares, respectively |
27,875 |
27,796 |
| Additional paid-in capital | 480,109 | 475,584 |
| Retained earnings | 209,929 | 272,018 |
| Accumulated other comprehensive loss | (13,242) | (14,150) |
| 704,671 | 761,248 | |
| $ 1,529,694 | $ 1,531,747 | |
| (Unaudited) | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| TEXAS INDUSTRIES, INC. AND SUBSIDIARIES | ||
|
Nine months ended February 28, |
||
| In thousands | 2011 | 2010 |
| OPERATING ACTIVITIES | ||
| Net loss | $ (55,827) | $ (29,092) |
|
Adjustments to reconcile net loss to cash provided by operating activities |
||
| Depreciation, depletion and amortization | 48,109 | 49,263 |
| Gains on asset disposals | (1,456) | (1,324) |
| Deferred income taxes | (37,665) | (10,988) |
| Stock-based compensation expense | 4,271 | 3,732 |
| Excess tax benefits from stock-based compensation | -- | (234) |
| Loss on debt retirements | 29,619 | -- |
| Other – net | (2,258) | 3,099 |
| Changes in operating assets and liabilities | ||
| Receivables – net | 29,814 | 25,864 |
| Inventories | (922) | 14,102 |
| Prepaid expenses | 2,501 | 1,753 |
| Accounts payable and accrued liabilities | (7,980) | (9,315) |
| Net cash provided by operating activities | 8,206 | 46,860 |
| INVESTING ACTIVITIES | ||
| Capital expenditures – expansions | (23,507) | (5,304) |
| Capital expenditures – other | (15,437) | (6,424) |
| Proceeds from asset disposals | 3,243 | 21,568 |
| Investments in life insurance contracts | 3,894 | 6,931 |
| Other – net | 1,230 | 14 |
| Net cash provided (used) by investing activities | (30,577) | 16,785 |
| FINANCING ACTIVITIES | ||
| Long-term borrowings | 650,000 | -- |
| Debt retirements | (561,610) | (276) |
| Debt issuance costs | (12,480) | (2,039) |
| Stock option exercises | 1,139 | 499 |
| Excess tax benefits from stock-based compensation | -- | 234 |
| Common dividends paid | (6,262) | (6,244) |
| Net cash provided (used) by financing activities | 70,787 | (7,826) |
| Increase in cash and cash equivalents | 48,416 | 55,819 |
| Cash and cash equivalents at beginning of period | 74,946 | 19,796 |
| Cash and cash equivalents at end of period | $ 123,362 | $ 75,615 |