Item 5. Other Events.
Attached is the Company's January 25, 1994 press release, which has been
labelled as Exhibit A and incorporated herein by this reference.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
VULCAN MATERIALS COMPANY
(registrant)
By: /s/ William F. Denson, III
Name: William F. Denson, III
Title: Vice President, Law and Secretary
January 25, 1994
EXHIBIT A
Birmingham, Alabama, January 25, 1994: Vulcan Materials Company (NYSE:VMC) today
announced that 1993 net earnings were $88,229,000, or $2.39 per share, as
compared with net earnings and earnings per share, before the cumulative effect
of an accounting change, of $90,980,000 and $2.41 in 1992. In the first quarter
of 1992 the Company adopted an accounting change referable to income taxes that
increased net earnings by $3,005,000, or 8 cents per share. With the accounting
change included, last year's net earnings and earnings per share totaled
$93,985,000 and $2.49, respectively.
Sales in 1993 were $1,133,489,000, up 5 percent from the 1992 total of
$1,078,035,000. Pretax earnings were $125,222,000 as compared to $130,726,000
in 1992.
The Company's 1993 effective tax rate was 29.5 percent, down from the 1992 rate
of 30.4 percent. The decrease reflects principally an increased favorable
effect of statutory depletion and an adjustment to prior year accruals for state
income taxes, partially offset by an increase in the federal statutory rate.
The increase in the federal rate, including an adjustment to deferred taxes for
the rate change, lowered 1993 earnings per share by 6 cents.
Fourth quarter sales were $281,959,000, up 4 percent from the $270,853,000
reported in 1992. Pretax earnings of $28,261,000 increased 2 percent from
1992's fourth quarter amount of $27,625,000. Net earnings and earnings per
share in the fourth quarter of 1993 totaled $20,550,000 and 57 cents,
respectively. These results compare favorably with net earnings and earnings
per share in the fourth quarter of 1992 of $20,356,000 and 55 cents.
All results are preliminary and, as yet, unaudited.
The Construction Materials segment reported fourth quarter sales of
$191,287,000, up 11 percent from 1992. The increase reflects principally
stronger demand in most crushed stone markets. Shipments of crushed stone in
the quarter increased 9 percent from last year's level. Unit selling prices
also improved slightly. Chemicals fourth quarter sales were $90,672,000, down
9 percent from corresponding 1992 sales of $99,177,000. The decrease reflects
a sharp decline in caustic soda prices, partially offset by improved prices for
chlorine and organic products.
Construction Materials segment earnings for the fourth quarter of 1993 totaled
$31,040,000, up 64 percent from the $18,961,000 reported for the same quarter of
1992. This increase was due principally to higher volume, as well as improved
prices. The Chemicals segment reported a fourth quarter loss of $907,000 in
1993 as compared with 1992 segment earnings of $10,488,000. The decline
reflects lower net prices and a less favorable product mix.
For the full year, Construction Materials sales totaled $756,659,000, up 10
percent from the 1992 result of $686,396,000. The increase reflects mainly
improved volumes, including a 7 percent increase in crushed stone shipments.
Improved unit selling prices also contributed to the increase. Full-year
segment earnings of $116,689,000 increased 32 percent from 1992's level of
$88,330,000, again reflecting principally higher volume.
Chemicals 1993 sales of $376,830,000 declined 4 percent from the 1992 level of
$391,639,000. Lower caustic soda prices and unfavorable product mix changes
were only partially offset by improved prices for chlorine and organic products.
Segment earnings for the year of $17,400,000 were down sharply from 1992's
result of $51,279,000. The decline reflects net lower prices, the less
favorable product mix and higher energy, raw material and manufacturing costs.
Selling, administrative and general expenses for the Company totaled
$111,085,000 in 1993, up 5 percent from the 1992 level. This increase reflects
principally higher bad-debt provisions, higher professional fees and normal
increases in personnel costs, partially offset by lower provisions for
stock-based incentive plans.
Other income, net of other charges, was $3,740,000 in 1993, up from the 1992
amount of $2,485,000. The favorable comparison reflects mainly improved results
referable to current as well as discontinued joint ventures.
Interest expense totaled $9,171,000 in 1993, down from the 1992 amount of
$9,768,000.
Working capital, exclusive of debt and cash items, totaled $150,899,000 at
December 31, 1993, down 4 percent from the 1992 year-end amount of $156,607,000.
The 1993 decline reflects lower inventories and higher current liabilities,
partially offset by an increase in the current portion of deferred taxes.
Net cash provided by continuing operations amounted to $194,097,000, down
3 percent from the $199,126,000 generated in 1992. The decline reflects
primarily lower earnings and other net adjustments, partially offset by an
increase in cash from lower working capital.
Cash used for investing activities totaled $103,811,000, down from the 1992
amount of $110,692,000. The decrease reflects higher spending for plant,
property and equipment, offset by lower payments for business acquisitions.
Property additions totaled $100,551,000, up $2,058,000 from the $98,493,000
spent in 1992. In 1993, the Company acquired a stone quarry in Tennessee and
one in Texas. Spending also continued for the construction of a sodium chlorite
plant at the Wichita, Kansas chemicals complex.
Cash used for financing activities decreased to $90,882,000 from the 1992 level
of $93,732,000. Lower retirements of debt were partially offset by increased
purchases of common stock in 1993.
Pursuant to the Company's common stock purchase program, 895,015 shares of
common stock were purchased in 1993 at a total cost of $39,986,000, equal to an
average price of $44.68 per share. Purchases of common stock in 1992 totaled
786,230 shares at a total cost of $32,424,000, equal to an average price of
$41.24 per share.
As of December 31, 1993, interest-bearing debt totaled $103,776,000, down 4
percent from total debt of $108,374,000 outstanding a year ago, and down 17
percent from the balance at year-end 1991.
Cash and cash equivalents amounted to $13,996,000 at December 31, 1993, down
slightly from the 1992 year-end amount of $15,669,000.
H. A. Sklenar, Chairman and Chief Executive Officer of Vulcan, stated, "After
a weak first quarter, shipments in our Construction Materials business improved
significantly in 1993. Lower interest rates stimulated higher residential
construction while improved funding supported greater highway construction.
The current outlook suggests a continuation of these trends in 1994. As a
result, we expect earnings of our Construction Materials segment to increase
again in 1994.
"The recent performance of our Chemicals business has been and continues to be
dominated by caustic soda pricing levels. Weak demand in several important
caustic consuming industries, as well as the addition of some new industry
chlor-alkali capacity, have pushed caustic prices to extremely low levels. The
timing and magnitude of a domestic recovery in caustic volume and prices are the
principal uncertainties facing our Chemicals business in 1994. Our present view
is that caustic prices will remain depressed. Consequently, our current
expectation is that earnings in our Chemicals segment will be down substantially
again in 1994."
Vulcan is a producer of industrial materials and commodities with significant
positions in two industries. It is the nation's foremost producer of
construction aggregates and a leading chemicals manufacturer, producing a
diversified line of chlorinated solvents and other industrial chemicals.
<PAGE>
<TABLE>
<CAPTION>
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF EARNINGS (Condensed and Unaudited)
(Amounts and shares in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31 December 31
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Net sales $281,959 $270,853 $1,133,489 $1,078,035
Cost of goods sold 224,093 212,646 886,764 828,951
Gross profit on sales 57,866 58,207 246,725 249,084
Selling, administrative and
general expenses 27,082 27,867 111,085 105,749
Other operating costs (Note 1) 1,461 1,807 4,987 5,326
Other income (charges), net 880 1,236 3,740 2,485
Earnings (loss) before interest
expense and income taxes 30,203 29,769 134,393 140,494
Interest expense 1,942 2,144 9,171 9,768
Earnings (loss) before
income taxes 28,261 27,625 125,222 130,726
Provision for income taxes 7,711 7,269 36,993 39,746
Net earnings (loss) before cumulative
effect of accounting change 20,550 20,356 88,229 90,980
Cumulative effect of accounting
change (Note 4) - - - 3,005
Net earnings (loss) $ 20,550 $ 20,356 $ 88,229 $ 93,985
Primary and fully diluted earnings
per share of common stock:
Net earnings (loss) before cumulative
effect of accounting change $0.57 $0.55 $2.39 $2.41
Cumulative effect of accounting
change (Note 4) - - - 0.08
Net earnings (loss) $0.57 $0.55 $2.39 $2.49
Average common and common
equivalent shares outstanding
(in thousands) 36,565 37,466 36,975 37,780
Depreciation, depletion and
amortization deducted above $27,226 $26,609 $102,780 $103,345
Effective tax rate 27.3% 26.3% 29.5% 30.4%
<FN>
See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCED SHEETS (Condensed*)
(Amounts in Thousands)
December 31
ASSETS 1993 1992
<S> <C> <C>
Cash and cash equivalents $ 13,996 $ 15,669
Accounts and notes receivable 150,404 151,395
Inventories 105,017 107,948
Current portion of deferred taxes 26,898 24,604
Prepaid expenses 6,298 5,213
Total current assets 302,613 304,829
Investments and long-term receivables 56,505 49,970
Property, plant and equipment, net 657,785 663,721
Other assets 61,648 65,395
Total $1,078,551 $1,083,915
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $ 741 $ 1,099
Short-term borrowings - -
Other current liabilities 139,074 133,937
Total current liabilities 139,815 135,036
Long-term obligations (Note 2) 103,035 107,275
Other noncurrent liabilities 132,738 141,492
Shareholders' equity 702,963 700,112
Total $1,078,551 $1,083,915
Current ratio 2.2 2.3
Property additions $ 100,551 $ 98,493
Capital employed** $ 939,477 $ 949,978
Common shareholders' equity per share $ 19.34 $ 18.81
Common shares outstanding (in thousands) 36,349 37,223
<FN>
* Balance sheet as of December 31, 1993 is unaudited
** The sum of interest-bearing debt, capitalized
lease obligations, other noncurrent liabilities
and shareholders' equity.
See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed and Unaudited)
(Amounts in thousands)
Twelve Months Ended
December 31
1993 1992
<S> <C> <C>
Operations
Net earnings before cumulative effect of accounting change $88,229 $90,980
Adjustments to reconcile net earnings to net cash
provided by continuing operations:
Depreciation, depletion and amortization 102,780 103,345
(Increase) decrease in assets before effects of
business acquisitions 811 (18,553)
Increase (decrease) in liabilities before effects of
business acquisitions (2,875) 10,326
Other, net 5,152 13,028
Net cash provided by continuing operations 194,097 199,126
Net cash used for discontinued operations (1,077) (1,031)
Cumulative effect of accounting change (Note 2) - 3,005
Net cash provided by operations 193,020 201,100
Investing Activities
Purchases of property, plant and equipment (95,977) (75,191)
Payment for business acquisitions (net of acquired cash) (4,507) (33,216)
Proceeds from sale of property, plant and equipment 6,009 8,924
Investment in nonconsolidated companies (9,637) (11,609)
Withdrawal of earnings from nonconsolidated companies 301 400
Net cash used for investing activities (103,811) (110,692)
Financing Activities
Net borrowings (payment) - commercial paper and bank lines of credit - (9,803)
Payment of short-term debt (1,184) (3,759)
Payment of long-term debt (3,414) (2,651)
Purchases of common stock (39,986) (32,424)
Dividends paid (46,298) (45,095)
Net cash used for financing activities (90,882) (93,732)
Net decrease in cash and cash equivalents (1,673) (3,324)
Cash and cash equivalents at beginning of year 15,669 18,993
Cash and cash equivalents at end of period $13,996 $15,669
<FN>
See accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
OPERATING RESULTS BY SEGMENT (Condensed and Unaudited)
(Amounts in Thousands)
Three Months Ended Twelve Months Ended
December 31 December 31
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Net Sales
Construction Materials $191,287 $171,676 $756,659 $686,396
Chemicals 90,672 99,177 376,830 391,639
Total $281,959 $270,853 $1,133,489 $1,078,035
Earnings (Loss) Before Interest Expense
and Income Taxes
Construction Materials $31,040 $18,961 $116,689 $88,330
Chemicals (907) 10,488 17,400 51,279
Segment earnings (loss)* 30,133 29,449 134,089 139,609
Interest income, etc. 70 320 304 885
Total $30,203 $29,769 $134,393 $140,494
<FN>
* After allocation of corporate expenses and income, other than "interest
income, etc." (principally interest income earned on short-term
investment of funds and gains or losses on corporate financing
transactions), and after assignment of equity income to the segments
with which it is related in terms of products and services.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to Financial Statements
1. Supplemental Cash Flow Information
Supplemental information referable to the Consolidated Statements of Cash Flows
as of December 31 is summarized below (amounts in thousands):
1993 1992
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
<S> <C> <C>
Cash paid during the period for:
Interest (net of amount capitalized) $ 9,198 $10,073
Income taxes 41,393 45,413
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Liabilities assumed in business acquisition - 213
Debt issued in purchase of property, plant
and equipment - 191
</TABLE>
2. Income Taxes
Effective January 1, 1992, the company adopted Statement of Financial Accounting
Standards (SFAS) No. 109, Accounting for Income Taxes, which supersedes and
amends SFAS No. 96. The principal change made by SFAS No. 109 is to revise the
criteria for recognition and measurement of deferred tax assets. The cumulative
effect of applying the new accounting method to years prior to 1992 increased
net earnings by $3,005,000 ($.08 per share), which is reflected in the
Consolidated Statement of Earnings for the first quarter of 1992.
Implementation of the new method had no material impact on earnings before
recognition of the cumulative effect of accounting change for 1993 and 1992.
The impact of the Omnibus Budget Reconciliation Act of 1993 for the nine months
ended September 30, 1993 was reflected in the third quarter, including a charge
to adjust cumulative deferred tax. The total effect in 1993 of the increased
federal rate amounted to $.06 per share.
