UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM___________________TO___________________
Commission File Number 1-7035
CALMAT CO.
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 95-0645790
_______________________________ _________________
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
3200 San Fernando Road, Los Angeles, California 90065
_______________________________________________________________________________
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (213) 258-2777
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES [X] NO [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
23,138,769 shares of Common Stock were outstanding at May 11, 1994.
<PAGE> 2
CALMAT CO.
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
(a) Consolidated Balance Sheets:
March 31, 1994 and December 31, 1993 3
(b) Consolidated Statements of Operations:
For the Three Months Ended
March 31, 1994 and 1993 4
(c) Consolidated Statements of Cash Flow:
For the Three Months Ended
March 31, 1994 and 1993 5
(d) Notes to the Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security
Holders 10
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
<PAGE> 3
CALMAT CO.
<TABLE>
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
<CAPTION>
March 31, December 31,
1994 1993
============= ============
ASSETS (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,081 $ 10,596
Trade accounts receivable, less allowance
for discounts and doubtful accounts
($4,227 in 1994 and $4,174 in 1993) 58,090 63,835
Income taxes receivable 1,054 1,564
Inventories 6,093 5,581
Prepaid expenses and other 4,051 4,152
Deferred income taxes 7,499 7,499
Installment notes receivable 1,893 2,902
------------- ------------
Total current assets 82,761 96,129
Installment notes receivable and other assets 33,145 32,205
Costs in excess of net assets of subsidiaries 55,061 55,484
Property, plant and equipment, at cost:
Land and deposits 183,103 182,484
Buildings, machinery and equipment 471,930 469,185
Construction in progress 13,999 14,493
------------- ------------
669,032 666,162
Less: Accumulated depreciation and depletion (251,528) (245,085)
------------- ------------
Property, plant and equipment, net 417,504 421,077
Total assets $ 588,471 $ 604,895
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 14,686 $ 18,810
Accrued liabilities 25,310 29,293
Notes and bonds payable - current portion 3,943 5,852
Federal and state income taxes 832 -
Dividends payable 2,314 2,311
------------- ------------
Total current liabilities 47,085 56,266
Notes and bonds payable - long term portion 102,757 109,635
Other liabilities and deferred credits 17,724 17,724
Deferred income taxes 70,167 70,224
------------- ------------
Total liabilities 237,733 253,849
------------- ------------
Stockholders' Equity:
Common stock 23,139 23,109
Additional paid-in capital 39,897 39,202
Retained earnings 287,702 288,735
------------- ------------
Total stockholders' equity 350,738 351,046
------------- ------------
Total liabilities and stockholders' equity $ 588,471 $ 604,895
============= ============
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 4
CALMAT CO.
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, amounts in thousands, except per share data)
<CAPTION>
Three months ended
March 31,
1994 1993
============= ============
<S> <C> <C>
Revenues:
Net sales and operating revenues $ 78,423 $ 61,632
Gains on sales of real estate 553 -
Other income 539 410
------------- ------------
79,515 62,042
------------- ------------
Costs and expenses:
Cost of products sold and operating expenses 65,911 55,442
Selling, general and administrative expenses 9,594 10,459
Interest expense 1,311 1,628
Other expense 402 217
------------- ------------
77,218 67,746
------------- ------------
Income (loss) before taxes and cumulative effect
of change in accounting principle 2,297 (5,704)
Federal and state income taxes 844 (2,282)
------------- ------------
Income (loss) before cumulative effect of change
in accounting principle 1,453 (3,422)
Cumulative effect of change in
accounting principle - 919
------------- ------------
Net income (loss) $ 1,453 $ (2,503)
============= ============
Per Share Data:
Income (loss) before cumulative effect of change
in accounting principle $ 0.06 $ (0.15)
Cumulative effect of change
in accounting principle - 0.04
------------- ------------
Net income (loss) per share $ 0.06 $ (0.11)
============= ============
Weighted average shares outstanding 23,286 23,130
============= ============
Cash dividends per share $ 0.10 $ 0.10
============= ============
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 5
CALMAT CO.
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited, amounts in thousands)
<CAPTION>
Three months ended
March 31,
1994 1993
============= ============
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 1,453 $ (2,503)
Depreciation, cost depletion and amortization 7,565 8,188
Cumulative effect of change
in accounting principle - (919)
Other (2,649) 1,072
------------- ------------
Cash provided by operating activities 6,369 5,838
------------- ------------
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (3,537) (3,471)
Other 1,091 1,573
------------- ------------
Cash used for investing activities (2,446) (1,898)
------------- ------------
FINANCING ACTIVITIES:
Notes payable to banks (6,000) 9,000
Principal payments on notes and bonds payable (2,787) (592)
Payment of cash dividends (2,311) (3,694)
Other 660 (228)
Cash provided by (used for) ------------- ------------
financing activities (10,438) 4,486
------------- ------------
Increase (decrease) in cash and cash equivalents (6,515) 8,426
Balance, beginning of period 10,596 -
------------- ------------
Balance, end of period $ 4,081 $ 8,426
============= ============
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 6
CALMAT CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. In the opinion of management, information furnished herein
reflects all adjustments necessary for a fair presentation
of the financial position and results of operations for the
interim periods. There have been no changes in the
significant accounting policies as discussed in Note 1 of
Notes to Financial Statements contained in the Company's
1993 Annual Report.
2. Earnings per common equivalent share (common shares
adjusted for dilutive effect of common stock options) have
been computed by dividing net income for each period by the
weighted-average equivalent shares of common stock
outstanding.
3. Included in cash at March 31, 1994 and December 31, 1993
was $1.1 million and $1.5 million, respectively, of
proceeds from the sale of real estate held in trust for
potential tax-deferred real estate exchanges.
4. Certain prior year amounts have been restated to conform to
the current year's presentation.
<PAGE> 7
CALMAT CO.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
================================================================================
Results of Operations
- - ---------------------
The Company reported net income of $1.5 million, or $0.06 per
share, for the first quarter of 1994 compared with a net loss of
$2.5 million, or $0.11 per share, for the prior year's first
quarter. First quarter 1993 results include an after-tax credit of
$0.9 million, or $0.04 per share, resulting from adoption of the
new accounting standard for accounting for income taxes (SFAS 109).
The earnings improvement is due, in part, to strengthening
construction activity particularly in the Company's Arizona and New
Mexico market areas, the Company's cost reduction efforts, less
inclement weather in California during the current quarter, and
emergency repair work resulting from the January 17, 1994 Los
Angeles earthquake.
Business segment information for the three months ended March 31, 1994
and 1993 is as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1994 1993
============= ============
(unaudited,
amounts in thousands)
<S> <C> <C>
Revenues:
Asphalt $ 28,902 $ 21,825
Concrete and Aggregate 49,303 38,842
Properties 6,399 5,400
Corporate and Other 539 410
Intersegment Sales (5,628) (4,435)
------------- ------------
$ 79,515 $ 62,042
============= ============
Three Months Ended
March 31,
1994 1993
============= ============
(unaudited,
amounts in thousands)
<S> <C> <C>
Income (loss) before income taxes and cumulative effect
of change in accounting principle:
Asphalt $ 692 $ (2,028)
Concrete and Aggregates 1,870 (2,451)
Properties 2,837 2,147
Corporate and unallocated expenses, net (3,359) (3,561)
Other income 257 189
------------- ------------
$ 2,297 $ (5,704)
============= ============
</TABLE>
Total revenues by segment include both sales to unaffiliated
customers, as reported in the Company's consolidated statement of
operations, and intersegment sales. Gains from ongoing real estate
sales are included in Properties Division revenue. Intersegment
sales represents sales of aggregates by the Concrete and Aggregates
Division to the Asphalt Division. Income from operations by
segment represents total revenues less direct operating expenses,
segment selling, general and administrative expenses and certain
allocated corporate general and administrative expenses. Corporate
and unallocated expenses include corporate administrative expenses,
interest expense and support expenses not allocated to business
segments. Other income includes interest income, gains/losses on
sale of fixed assets and other miscellaneous items.
<PAGE> 8
CALMAT CO.
Some illustration of the environment in which CalMat is presently
operating is provided by the table that follows. Residential and
non-residential building is measured by dollar volume of building
permits issued, and heavy construction is measured by contract
awards.
<TABLE>
California Construction Trends and Forecasts*
(dollar amounts in billions)
<CAPTION>
Residential Non-Residential Heavy
Building Building Construction Total
<S> <C> <C> <C> <C>
1992 Actual $ 15.0 $ 8.4 $ 5.9 $ 29.3
1993 Preliminary 12.9 7.6 6.1 26.6
1994 Forecast 15.1 7.8 6.4 29.3
1992/1993 Change -14% -10% 3% -9%
1993/1994 Change 17% 3% 5% 10%
*Source: Construction Industry Research Board, April 1994.
</TABLE>
Business conditions continue to improve in Arizona and New Mexico.
According to F.W. Dodge Construction Potentials Bulletin, overall
construction spending increased 32% in these two states during the
first two months of 1994 compared with 1993. The increase was
primarily driven by a sizeable increase in the residential sector
partially offset by a decrease in the heavy construction sector.
Concrete and Aggregate Division
Revenues in the Concrete and Aggregates Division were $49.3 million
in the first quarter of 1994, up $10.5 million, or 27% compared
with the corresponding 1993 period. The increase was due to the
combination of higher unit sales volume and higher average selling
prices for both aggregates and ready mixed concrete. Aggregates
sales volume by category is shown below.
<TABLE>
<CAPTION>
Aggregates - Tons Sold
(amounts in thousands)
Three Months Ended
March 31,
1994 1993
============= ============
<S> <C> <C>
Sales to outside customers 3,849 3,322
Used in Ready Mixed Concrete 649 575
Sales to Asphalt Division 1,007 810
------------- ------------
5,505 4,707
============= ============
</TABLE>
Ready mixed concrete sales volume was 482,000 cubic yards in the
first quarter of 1994 compared with 404,000 cubic yards sold in the
corresponding 1993 period.
The Division's pre-tax income from operations increased to $1.9
million in the most recent quarter compared with a loss of $2.5
million in the year earlier quarter. Aggregates gross profit was
higher in the first quarter due to a 5% increase in average selling
prices and a 17% increase unit sales volume. Ready mixed concrete
gross profit was also higher in the first quarter due to an 11%
increase in average selling prices and a 19% increase in unit sales
volume. Average unit production costs for both aggregates and
ready mixed concrete were essentially unchanged from the prior
year.
<PAGE> 9
CALMAT CO.
Asphalt Division
- - ----------------
Revenues in the Asphalt Division were $28.9 million in the first
quarter of 1994, up $7.1 million, or 32% compared with the
corresponding 1993 period. The increase was mainly due to a 27%
increase in asphalt tonnage sold. Approximately 12% to 13% of the
Division's total revenues consists of sales of miscellaneous
products and services such as Guardtop, Oil Spread, Petromat,
equipment rentals, etc. The Division's pre-tax income from
operations increased to $0.7 million in the most recent quarter
compared with a loss of $2.0 million in the year earlier quarter.
The improvement is the result of a 27% increase in asphalt tonnage
sold and lower unit production costs.
Properties Division
- - -------------------
Revenues in the Properties Division, excluding gains on sales of
real estate, were $5.8 million in first quarter of 1994, up $0.4
million from revenues of $5.4 million in the corresponding 1993
period. The increase in revenue for the current quarter is
primarily due to increased revenues from landfill operations due in
part to increased activity related to the January 17, 1994 Los
Angeles earthquake. Pre-tax income from operations includes income
from: rental of properties, self-storage operations, commercial
inert landfills and gains from real estate sales. Pre-tax income
from operations was $2.8 million in the most recent quarter
compared with $2.1 million in the year earlier quarter. The
increase is due primarily to gains from real estate sales which
were $0.6 million in the current quarter compared with no gains in
the comparable 1993 period.
Other
- - -----
Selling, general and administrative expenses decreased $0.9
million, or 8%, in the first quarter of 1994 compared with the same
quarter of 1993. This reflects management's continuing efforts to
reduce these expenses.
Liquidity and Capital Resources
- - -------------------------------
Cash and cash equivalents amounted to $4.1 million at March 31,
1994 compared with $10.6 million at December 31, 1993.
Cash provided by operating activities was $6.4 million for the
three months ended March 31, 1994. Cash used for investing
activities was $2.4 million, including $3.5 million for the
purchase of property, plant, and equipment offset by proceeds from
the sale of other properties and fixed assets of $0.7 million.
Cash used for financing activities was $10.4 million, including
$2.3 million for cash dividends to stockholders and an $8.8 million
net decrease in debt. Overall, cash and cash equivalents decreased
$6.5 million during the first three months of 1994.
Working capital totaled $35.7 million at March 31, 1994, down from
$39.9 million at December 31, 1993.
Total consolidated long-term and short-term borrowings at March 31,
1994 and December 31, 1993 were $106.7 million and $115.5 million,
respectively. Debt as a percent of total capitalization was 23.3%
and 24.8%, at March 31, 1994 and December 31, 1993, respectively.
During 1993, the Company restricted capital expenditures in order
to conserve cash. Capital expenditures in 1994 are expected to
return to, or exceed, prior year spending levels. Management
believes that cash provided by operations and existing borrowing
arrangements will provide adequate funds for current commitments
and expected working capital requirements during 1994.
<PAGE> 10
CALMAT CO.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- - --------------------------
During 1990, the lawsuits which had been pending against the
Company and its directors in connection with actions taken by the
Company which involved Brierley Investments Limited and Onoda
U.S.A., Inc. ("Onoda USA") were settled and dismissed, with the
court permitting stockholders not wishing to participate in the
settlement to "opt out." An appeal challenging the settlement was
also dismissed and the time for filing further appeals has lapsed.
In November 1990, a lawsuit was filed against the Company and its
directors in Delaware Chancery Court by a stockholder who had opted
out of the settlement, purporting to represent a class of similarly
situated stockholders and alleging misrepresentations and breach of
fiduciary duty in connection with the matters which were the
subject of the original lawsuits. As a result of rulings of the
Court made in October 1993, the action was limited to an individual
action against the Company only, and only on the claim of
misrepresentation. Subsequent to the end of the quarter, on May 2,
1994, agreement in principle was reached between the Company and
the plaintiffs to settle and dismiss this action in consideration
of a payment by the Company of $200,000. Final settlement
documents are being prepared and are expected to be executed in the
near future.
Item 4. Submission of Matters to a Vote of Security Holders
- - ------------------------------------------------------------
The annual meeting of stockholders of the Company was held in Los
Angeles, California, on April 27, 1994, to:
1. Elect eleven directors, comprising the entire Board of
Directors, to serve during the ensuing year and until their
successors are elected or appointed. The nominees were John
C. Argue, Harry M. Conger, Rayburn S. Dezember, A. Frederick
Gerstell, Richard A. Grant, Jr., Grover R. Heyler, William T.
Huston, William Jenkins, Thomas L. Lee, Thomas M. Linden and
Stuart T. Peeler.
2. Ratify the selection by the Company's Board of Directors of
auditors for 1994.
3. Consider and act upon a proposal that the Company's
stockholders approve the Amended and Restated 1993 Stock
Option Plan for Officers, Directors and Key Employees,
adopted on January 25, 1994 and recommended by the Company's
Board of Directors.
The results of the meeting are as follows:
Shares outstanding and entitled to vote: 23,136,077
Total shares voted: 21,411,890
% of shares outstanding: 92.548
<TABLE>
<CAPTION>
Broker
Proposal 1, Directors For Withheld Non-Votes
===================== ========== ======== =========
<S> <C> <C> <C>
Argue, J. C. 20,914,946 496,944 -0-
% of votes cast 97.679 2.321
% of shares outstanding 90.400 2.148
Conger, H. M. 20,946,960 464,930 -0-
% of votes cast 97.829 2.171
% of shares outstanding 90.538 2.010
Dezember, R. S. 20,946,420 465,470 -0-
% of votes cast 97.826 2.174
% of shares outstanding 90.536 2.012
</TABLE>
<PAGE> 11
CALMAT CO.
<TABLE>
<CAPTION>
Broker
Proposal 1, Directors (continued) For Withheld Non-Votes
================================= ========== ======== =========
<S> <C> <C> <C>
Gerstell, A. F. 20,868,960 542,930 -0-
% of votes cast 97.464 2.536
% of shares outstanding 90.201 2.347
Grant, R. A. 20,946,960 464,930 -0-
% of votes cast 97.829 2.171
% of shares outstanding 90.538 2.010
Heyler, G. R. 20,944,660 467,230 -0-
% of votes cast 97.818 2.182
% of shares outstanding 90.528 2.019
Huston, W. T. 20,946,028 465,862 -0-
% of votes cast 97.824 2.176
% of shares outstanding 90.534 2.014
Jenkins, W. 20,921,550 490,340 -0-
% of votes cast 97.710 2.290
% of shares outstanding 90.428 2.119
Lee, T. L. 20,915,846 496,044 -0-
% of votes cast 97.683 2.317
% of shares outstanding 90.404 2.144
Linden, T. M. 20,947,060 464,830 -0-
% of votes cast 97.829 2.171
% of shares outstanding 90.539 2.009
Peeler, S. T. 20,892,360 519,530 -0-
% of votes cast 97.574 2.426
% of shares outstanding 90.302 2.246
</TABLE>
<TABLE>
<CAPTION>
Broker
Proposal 2, Auditors For Against Abstentions Non-Votes
==================== ========== ======= =========== =========
<S> <C> <C> <C> <C>
Shares: 21,343,643 23,506 44,741 -0-
% of shares outstanding: 92.253 .102 .193
% of shares voted: 99.681 .110 .209
</TABLE>
<TABLE>
<CAPTION>
Broker
Proposal 3, Stock Option Plan For Against Abstentions Non-Votes
============================= ========== ========= =========== =========
<S> <C> <C> <C> <C>
Shares: 18,652,285 1,889,787 869,818 -0-
% of shares outstanding: 80.620 8.168 3.760
% of shares voted: 87.112 8.826 4.062
</TABLE>
All directors listed above were elected at the meeting. There
was no other director whose term of office as a director continued
after the meeting.
<PAGE> 12
CALMAT CO.
Item 5. Other Information
- - --------------------------
On March 24, 1994, the Company filed a registration statement
on Form S-3 under the Securities Act of 1933 for an offering of up
to 3,162,500 shares, which includes an overallotment option of
412,500 shares, of common stock. On April 26, 1994, prior to the
registration statement becoming effective, the Company announced
that it had postponed the offering pending more favorable market
conditions.
Item 6. Exhibits and Reports on Form 8-K
- - ----------------------------------------
(a) None.
(b) No reports on Form 8-K were filed during the quarter
ended March 31, 1994.
<PAGE> 13
CALMAT CO.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
CALMAT CO.
---------------------------------------
(Registrant)
Date: May 12, 1994 By:___________________________________
Paul Stanford
Senior Vice President -
Administration General Counsel, and
Secretary
Date: May 12, 1994 By:__________________________________
H. James Gallagher
Executive Vice President - Finance
and Chief Financial Officer
