updated 1/6/2011 4:47:17 PM ET 2011-01-06T21:47:17

DALLAS, Jan. 6, 2011 (GLOBE NEWSWIRE) -- Texas Industries, Inc. (NYSE:TXI) today reported financial results for the quarter ended November 30, 2010. Results for the quarter were a net loss of $11.2 million or $.40 per share. Results for the quarter ended November 30, 2009 were a net loss of $3.7 million or $.13 per share and included after tax gains from the sale of emission credits of $2.1 million ($.08 per share).

General Comments

"Conditions in our markets remain challenging," stated Mel Brekhus, Chief Executive Officer. "Volumes were up compared to the same period a year ago but it is difficult to determine how much might be attributable to market conditions due to the fact that we experienced abnormally inclement weather in Texas a year ago and more typical weather this year."

"We continue to focus on meeting market demand as cost effectively as possible. As planned, we resumed construction of TXI's central Texas cement plant expansion during the quarter," added Brekhus.

A teleconference will be held tomorrow, January 7, 2011 at 10:00 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 operating information related to our principal products.

Cement Operations

   Three months ended

 November 30,
 Six months ended

 November 30,
In thousands except per unit  2010  2009  2010  2009
         
 Operating Results        
 Total cement sales  $ 61,599  $ 61,726  $ 129,289  $ 140,186
 Total other sales and delivery fees    6,979    6,457    15,671    13,193
 Total segment sales 68,578 68,183 144,960 153,379
 Cost of products sold    63,121   58,359   133,184   128,218
 Gross profit 5,457 9,824 11,776 25,161
 Selling, general and administrative (4,018) (4,359) (8,811) (9,033)
 Other income    509    4,670     2,947     6,413
 Operating Profit  $ 1,948  $ 10,135  $ 5,912  $ 22,541
         
 Cement        
 Shipments (tons) 784 738 1,657 1,653
 Prices ($/ton)  $78.49 $83.64  $78.02  $84.78
 Cost of sales ($/ton)  $73.39 $71.98  $72.25  $70.16

Three months ended November 30, 2010

Cement operating profit for the three-month period ended November 30, 2010 was $1.9 million, a decrease of $8.2 million from the prior year period. Lower sales prices offset in part by higher shipments reduced operating profit approximately $3 million.   In addition, other income decreased $4.2 million from the prior year period.

Total segment sales for the three-month period ended November 30, 2010 were $68.6 million compared to $68.2 million for the prior year period. Cement sales were comparable to 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 73% of cement sales in the current period compared to 69% of cement sales in the prior year period. Average cement prices decreased 6% in our Texas market area and 7% in our California market area. Shipments increased 12% in our Texas market area and decreased 6% in our California market area.

Cost of products sold for the three-month period ended November 30, 2010 increased $4.8 million from the prior year period. Cement unit costs increased 2% from the prior year period primarily due to higher repair and maintenance costs offset in part by the effect of higher shipments. 

Selling, general and administrative expense for the three-month period ended November 30, 2010 decreased $0.3 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 November 30, 2010 decreased $4.2 million from the prior year period. The decrease was primarily due to $0.6 million lower royalty income and $3.4 million lower gains from sales of emissions credits associated with our Crestmore cement plant in Riverside, California.      

Aggregate Operations

   Three months ended

 November 30,
 Six months ended

 November 30,
In thousands except per unit  2010  2009  2010  2009
         
 Operating Results        
 Total stone, sand and gravel sales  $ 22,644  $ 20,217  $ 49,237  $ 48,011
 Total other sales and delivery fees    18,438   16,070    41,815    38,377
 Total segment sales  41,082  36,287  91,052  86,388
 Cost of products sold    35,002   32,001   78,412   71,156
 Gross profit 6,080 4,286 12,640 15,232
 Selling, general and administrative (2,814) (2,489) (5,873) (5,194)
 Other income    57    432     1,690     830
 Operating Profit  $ 3,323  $ 2,229  $ 8,457  $ 10,868
         
 Stone, sand and gravel        
 Shipments (tons) 3,026 2,642 6,610 6,065
 Prices ($/ton)  $7.48  $7.65  $7.45  $7.92
 Cost of sales ($/ton)  $6.53  $7.03  $6.48  $6.61


Three months ended November 30, 2010

Aggregate operating profit for the three-month period ended November 30, 2010 was $3.3 million, an increase of $1.1 million from the prior year period. Higher shipments offset in part by lower sales prices increased operating profit approximately $1 million.

Total segment sales for the three-month period ended November 30, 2010 were $41.1 million compared to $36.3 million for the prior year period. Stone, sand and gravel sales increased $2.4 million from the prior year period on 15% higher shipments and 2% lower average prices.

Cost of products sold for the three-month period ended November 30, 2010 increased $3.0 million from the prior year period primarily due to higher shipments. Stone, sand and gravel unit costs decreased 7% from the prior year period primarily due to the effect of higher shipments on unit costs offset in part by higher repair and maintenance costs.

Selling, general and administrative expense for the three-month period ended November 30, 2010 increased $0.3 million from the prior year period primarily due to higher provisions for bad debts.

Other income for the three-month period ended November 30, 2010 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

 November 30,
 Six months ended

 November 30,
In thousands except per unit  2010  2009  2010  2009
         
 Operating Results        
 Total ready-mix concrete sales  $ 43,377  $ 41,720  $ 95,483  $ 95,773
 Total other sales and delivery fees    13,443   12,733    27,815    28,218
 Total segment sales  56,820  54,453  123,298  123,991
 Cost of products sold    56,290   51,691    119,539    113,407
 Gross profit 530 2,762 3,759 10,584
 Selling, general and administrative (3,047) (2,749) (5,723) (5,953)
 Other income    134    268     332     401
 Operating Profit (Loss)  $ (2,383)  $ 281  $ (1,632)  $ 5,032
         
 Ready-mix concrete        
 Shipments (cubic yards) 575 501 1,244 1,113
 Prices ($/cubic yard)  $75.45  $83.02  $76.73  $86.01
 Cost of sales ($/cubic yard)  $77.79  $80.98  $76.94  $80.39

Three months ended November 30, 2010

Consumer products operating loss for the three-month period ended November 30, 2010 was $2.4 million, a decrease in profit of $2.7 million from the prior year period. Lower sales prices offset in part by higher shipments reduced operating profit approximately $2 million.

Total segment sales for the three-month period ended November 30, 2010 were $56.8 million compared to $54.5 million for the prior year period. Ready-mix concrete sales for the three-month period ended November 30, 2010 increased $1.7 million from the prior year period on 9% lower average prices and 15% higher shipments. 

Cost of products sold for the three-month period ended November 30, 2010 increased $4.6 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 offset in part by higher fuel and repair and maintenance costs.

Selling, general and administrative expense for the three-month period ended November 30, 2010 increased $0.3 million from the prior year period primarily due to higher provisions for bad debts.

Other income for the three-month period ended November 30, 2010 decreased $0.1 million from the prior year period primarily due to lower gains from routine sales of surplus operating assets.

Corporate

   Three months ended

 November 30,
 Six months ended

 November 30,
In thousands  2010  2009  2010  2009
         
         
 Other income  $ 1,229  $ 358  $ 1,850  $ 736
 Selling, general and administrative    (8,664)    (6,289)    (14,277)    (15,960)
   $ (7,435)  $ (5,931)  $ (12,427)  $ (15,224)

Three months ended November 30, 2010

Other income for the three-month period ended November 30, 2010 increased $0.9 million from the prior year period primarily due to higher oil and gas lease bonus and royalty payments offset in part by lower interest income.

Selling, general and administrative expense for the three-month period ended November 30, 2010 increased $2.4 million from the prior year period. The increase was primarily the result of $3.0 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 $1.5 million in the three-month period ended November 30, 2010 and decreased stock-based compensation $1.5 million in the three-month period ended November 30, 2009. We hold life insurance policies in connection with certain of our benefit plans. Proceeds received from the policies in the three-month period ended November 30, 2010 decreased expense $0.2 million from the prior year period. Our focus on reducing controllable costs lowered other expenses $0.4 million in the three-month period ended November 30, 2010 from the prior year period.

Interest

Interest expense incurred for the three-month period ended November 30, 2010 was $17.3 million, of which $3.4 million was capitalized in connection with our Hunter, Texas cement plant expansion project and $13.9 million was expensed. 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, 2010 increased from the prior year period primarily as a result of higher average outstanding debt at higher interest rates due to the refinancing of our 7.25% senior notes. An additional $15 million of interest expense is estimated to be capitalized in connection with our Hunter, Texas cement plant expansion project during the remainder of our current fiscal year.

Loss on Debt Retirements

On July 27, 2010, we commenced a cash tender offer for all of the outstanding $550 million aggregate principal amount of our 7.25% senior notes due 2013 and a solicitation of consents to amend the indenture governing the 7.25% notes. Pursuant to the tender offer and consent solicitation, we purchased $536.6 million aggregate principal amount of the 7.25% notes, and paid an aggregate of $547.7 million in purchase price and consent fees. On September 9, 2010, we redeemed the remaining $13.4 million aggregate principal amount of the 7.25% notes at a price of 101.813% of the principal amount thereof, plus accrued and unpaid interest on the 7.25% notes to the redemption date. We used the net proceeds from the issuance and sale of $650 million aggregate principal amount of our 9.25% senior notes to pay the purchase or redemption price of the 7.25% notes and the consent fees. As of November 30, 2010, we recognized a loss on debt retirement of $29.6 million representing $11.4 million in consent fees, redemption price premium and transaction costs and a write-off of $18.2 million of unamortized debt discount and original issuance costs associated with the 7.25% notes. 

Income Taxes

Income taxes for the interim periods ended November 30, 2010 and November 30, 2009 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 six-month period ended November 30, 2010. The estimated annualized rate excluding this charge is 41.0% for fiscal year 2011 compared to 41.4% 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

 

(Unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
         
  Three months ended Six months ended
  November 30, November 30,
In thousands except per share 2010 2009 2010 2009
         
NET SALES $148,111 $142,935 $320,233 $326,892
         
Cost of products sold 136,044 126,063 292,058 275,915
GROSS PROFIT 12,067 16,872 28,175 50,977
         
Selling, general and administrative 18,543 15,886 34,684 36,140
Interest 13,886 13,364 28,297 26,608
Loss on debt retirements 613 --  29,619 -- 
Other income (1,929) (5,728) (6,819) (8,380)
  31,113 23,522 85,781 54,368
LOSS BEFORE INCOME TAXES  (19,046) (6,650) (57,606) (3,391)
         
Income tax benefit (7,845) (2,948) (22,713) (1,404)
NET LOSS  $ (11,201)  $ (3,702)  $ (34,893)  $ (1,987)
         
         
Net loss per share        
Basic  $ (.40)  $ (.13)  $ (1.25)  $ (.07)
Diluted  $ (.40)  $ (.13)  $ (1.25)  $ (.07)
         
Average shares outstanding        
Basic 27,807 27,736 27,797 27,728
Diluted 27,807 27,736 27,797 27,728
         
Cash dividends declared per share $.075 $.075 $.15 $.15
         
 
 
CONSOLIDATED BALANCE SHEETS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
     
     
  (Unaudited)  
  November 30, May 31,
In thousands 2010 2010
     
ASSETS    
CURRENT ASSETS    
Cash and cash equivalents  $139,753 $74,946
Receivables – net 96,671 112,184
Inventories 152,681 142,419
Deferred income taxes and prepaid expenses 23,351 23,426
TOTAL CURRENT ASSETS 412,456 352,975
     
PROPERTY, PLANT AND EQUIPMENT    
Land and land improvements 158,941 158,367
Buildings 58,817 58,351
Machinery and equipment 1,226,794 1,220,021
Construction in progress 330,574 322,039
  1,775,126 1,758,778
Less depreciation and depletion  634,404 604,269
  1,140,722 1,154,509
OTHER ASSETS    
Goodwill 1,715 1,715
Real estate and investments 7,426 6,774
Deferred charges and other 23,219 15,774
  32,360 24,263
  $1,585,538 $1,531,747
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
CURRENT LIABILITIES    
Accounts payable $41,800 $56,214
Accrued interest, compensation and other 63,307 51,455
Current portion of long-term debt  95 234
TOTAL CURRENT LIABILITIES  105,202 107,903
     
LONG-TERM DEBT 652,441 538,620
     
DEFERRED INCOME TAXES AND OTHER CREDITS 102,495 123,976
     
SHAREHOLDERS' EQUITY    
     
Common stock, $1 par value; authorized 100,000 shares; issued

and outstanding 27,820 and 27,796 shares, respectively
27,820 27,796
Additional paid-in capital 478,172 475,584
Retained earnings 232,953 272,018
Accumulated other comprehensive loss (13,545) (14,150)
  725,400 761,248
  $1,585,538 $1,531,747
     
(Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
     
     
  Six months ended
  November 30,
In thousands 2010 2009
     
OPERATING ACTIVITIES    
Net loss   $ (34,893)  $ (1,987)
Adjustments to reconcile net loss to cash provided by operating activities    
Depreciation, depletion and amortization 31,991 32,971
Gains on asset disposals (1,555) (1,433)
Deferred income taxes (benefit) (22,964) 756
Stock-based compensation expense 2,288 2,143
Excess tax benefits from stock-based compensation --  (248)
Loss on debt retirements 29,619 -- 
Other – net (2,855) 609
Changes in operating assets and liabilities    
Receivables – net 16,112 14,020
Inventories (10,262) (3,843)
Prepaid expenses 1,232 1,767
Accounts payable and accrued liabilities 1,313 (4,823)
Net cash provided by operating activities 10,026 39,932
     
INVESTING ACTIVITIES    
Capital expenditures – expansions (11,198) (4,543)
Capital expenditures – other (12,201) (2,899)
Proceeds from asset disposals 3,037 1,443
Investments in life insurance contracts 3,704 6,726
Other – net (859) (2)
Net cash provided (used) by investing activities (17,517) 725
     
FINANCING ACTIVITIES    
Long-term borrowings 650,000 -- 
Debt retirements (561,568) (144)
Debt issuance costs (12,426) (2,039)
Stock option exercises 464 356
 Excess tax benefits from stock-based compensation --  248
Common dividends paid (4,172) (2,080)
Net cash provided (used) by financing activities 72,298 (3,659)
Increase in cash and cash equivalents 64,807 36,998
     
Cash and cash equivalents at beginning of period 74,946 19,796
Cash and cash equivalents at end of period $139,753 $56,794
CONTACT: Kenneth R. Allen
         Vice President-Finance and  Chief Financial Officer
         972.647.6730
         Email:  kallen@txi.com

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.91%
$30K home equity loan FICO 5.20%
$75K home equity loan FICO 4.57%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.40%
Cash Back Cards 17.92%
17.92%
Rewards Cards 17.13%
17.12%
Source: Bankrate.com