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 SEPTEMBER 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________________________________________
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 [ ]
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 November 4, 1994. <PAGE>
CALMAT CO.
INDEX
-----
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
(a) Consolidated Balance Sheets as of September 30, 1994
and December 31, 1993 3
(b) Consolidated Statements of Operations for the three
and nine months ended September 30, 1994 and 1993 4
(c) Consolidated Statements of Cash Flow for the nine months
ended September 30, 1994 and 1993 5
(d) Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11<PAGE>
CALMAT CO.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
============= ============
ASSETS (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,524 $ 10,596
Trade accounts receivable, less allowance
for discounts and doubtful accounts
($3,353 in 1994 and $4,174 in 1993) 68,235 63,835
Income taxes receivable 210 1,564
Inventories 6,495 5,581
Prepaid expenses and other 4,585 4,152
Deferred income taxes 7,499 7,499
Installment notes receivable 2,016 2,902
-------- --------
Total current assets 90,564 96,129
Installment notes receivable and other assets 36,369 32,205
Costs in excess of net assets of subsidiaries 54,216 55,484
Property, plant and equipment, at cost:
Land and deposits 183,076 182,484
Buildings, machinery and equipment 470,935 469,185
Construction in progress 17,631 14,493
-------- --------
671,642 666,162
Less: Accumulated depreciation and depletion (259,679) (245,085)
-------- --------
Property, plant and equipment, net 411,963 421,077
-------- --------
Total assets $593,112 $604,895
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,458 $ 18,810
Accrued liabilities 27,389 29,293
Notes and bonds payable - current portion 559 5,852
Federal and state income taxes 3,521 -
Dividends payable 2,314 2,311
-------- --------
Total current liabilities 53,241 56,266
Notes and bonds payable - long term portion 97,104 109,635
Other liabilities and deferred credits 17,724 17,724
Deferred income taxes 67,442 70,224
-------- --------
Total liabilities 235,511 253,849
-------- --------
Stockholders' equity:
Common stock 23,139 23,109
Additional paid-in capital 39,897 39,202
Retained earnings 294,565 288,735
-------- --------
Total stockholders' equity 357,601 351,046
-------- --------
Total liabilities and stockholders'
equity $593,112 $604,895
======== ========
See accompanying notes to consolidated financial statements.
</TABLE>
CALMAT CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1994 1993 1994 1993
================== =================
<S> <C> <C> <C> <C>
Revenues:
Net sales and operating revenues $ 99,480 $ 99,661 $271,112 $254,725
Gains on sales of real estate 1,787 99 2,340 1,819
Other income 600 672 1,581 2,374
-------- -------- -------- --------
101,867 100,432 275,033 258,918
-------- -------- -------- --------
Costs and expenses:
Cost of products sold and
operating expenses 78,608 79,334 217,766 209,254
Selling, general and
administrative expenses 10,823 10,403 30,649 31,415
Interest expense 1,182 1,588 3,685 5,049
Other expense 1,298 397 2,468 827
-------- -------- -------- --------
91,911 91,722 254,568 246,545
-------- -------- -------- --------
Income before taxes and cumulative
effect of change in accounting
principle 9,956 8,710 20,465 12,373
Federal and state income taxes 3,659 4,189 7,521 5,654
-------- -------- -------- --------
Income before cumulative effect of
change in accounting principle 6,297 4,521 12,944 6,719
Cumulative effect of change in
accounting principle - - - 919
-------- -------- -------- --------
Net income $ 6,297 $ 4,521 $ 12,944 $ 7,638
======== ======== ======== ========
Per Share Data:
Income before cumulative effect of
change in accounting principle $ 0.27 $ 0.20 $ 0.56 $ 0.29
Cumulative effect of change in
accounting principle - - - 0.04
-------- -------- -------- --------
Net income per share $ 0.27 $ 0.20 $ 0.56 $ 0.33
======== ======== ======== ========
Weighted average shares outstanding 23,212 23,116 23,237 23,114
======== ======== ======== ========
Cash dividends per share $ 0.10 $ 0.10 $ 0.30 $ 0.30
======== ======== ======== ========
See accompanying notes to consolidated financial statements.
</TABLE>
CALMAT CO.
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited, amounts in thousands)
<TABLE>
<CAPTION>
Nine months ended
September 30,
1994 1993
======== ========
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 12,944 $ 7,638
Depreciation, cost depletion and amortization 22,479 24,131
Cumulative effect of change in accounting principle - (919)
Other (8,683) (6,946)
-------- --------
Cash provided by operating activities 26,740 23,904
-------- --------
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (17,425) (8,890)
Other 5,624 6,748
-------- --------
Cash used for investing activities (11,801) (2,142)
-------- -------
FINANCING ACTIVITIES:
Notes payable to banks (5,000) (7,000)
Principal payments on notes and bonds payable (12,824) (1,692)
Payment of cash dividends (6,939) (8,313)
Other 752 (1,856)
-------- --------
Cash used for financing activities (24,011) (18,861)
-------- --------
Increase (decrease) in cash and cash equivalents (9,072) 2,901
Balance, beginning of period 10,596 -
-------- --------
Balance, end of period $ 1,524 $ 2,901
======== ========
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
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 on Form 10-K, filed with the Commission on March 24, 1994.
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 September 30, 1994 and December 31, 1993 was $0.0
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>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
---------------------------------------------------------------
Results of Operations
- - ---------------------
The Company reported net income of $6.3 million, or $0.27 per share, for the
third quarter of 1994 compared with $4.5 million, or $0.20 per share, for the
prior year's third quarter.
The Company reported net income of $12.9 million, or $0.56 per share, for the
nine months ended September 30, 1994 compared with net income of $7.6 million,
or $0.33 per share, for the comparable period in 1993. The 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).
Business segment information for the three and nine months ended September 30,
1994 and 1993 is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
================== =================
(unaudited, amounts in thousands)
<S> <C> <C> <C> <C>
Revenues:
Asphalt $ 45,599 $ 46,859 $114,581 $110,332
Concrete and Aggregates 55,390 55,253 159,181 148,209
Properties - Operations 6,691 5,693 18,556 16,666
Properties - Real Estate Sales 1,787 99 2,340 1,819
Corporate and other 600 672 1,581 2,374
Intersegment sales (8,200) (8,144) (21,206) (20,482)
-------- -------- -------- --------
$101,867 $100,432 $275,033 $258,918
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
================== =================
(unaudited, amounts in thousands)
<S> <C> <C> <C> <C>
Income before income taxes and
cumulative effect of change in
accounting principle:
Asphalt $ 5,178 $ 4,501 $ 9,903 $ 5,610
Concrete and Aggregates 3,461 5,439 10,786 8,246
Properties - Operations 2,905 2,060 7,682 6,727
Properties - Real Estate Sales 1,787 99 2,340 1,819
Corporate and unallocated expenses,
net (3,739) (3,629) (11,043) (11,061)
Other income 364 240 797 1,032
-------- -------- -------- --------
$ 9,956 $ 8,710 $ 20,465 $ 12,373
======== ======== ======== ========
</TABLE>
Total revenues by segment include both sales to unaffiliated customers, as
reported in the Company's consolidated statements of operations, and
intersegment sales. 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.
Concrete and Aggregate Division
- - -------------------------------
Revenues in the Concrete and Aggregates Division were $55.4 million in the
third quarter of 1994, essentially unchanged compared with the corresponding
1993 period. Revenues were $159.2 million in the first nine months of 1994,
up $11.0 million, or 7% compared with the same period in 1993. The revenue
increase for the current year's nine month period was due to the combination
of higher average selling prices for both aggregates and ready mixed concrete
and higher sales volume for ready mixed concrete. Aggregates sales volume by
category is shown below.
<TABLE>
<CAPTION>
Aggregates - Tons Sold
(amounts in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
================== =================
<S> <C> <C> <C> <C>
Sales to outside customers 4,570 5,020 12,788 13,320
Used in Ready Mixed Concrete 623 629 1,946 1,892
Sales to Asphalt Division 1,441 1,479 3,747 3,745
-------- -------- -------- --------
6,634 7,128 18,481 18,957
======== ======== ======== ========
</TABLE>
Ready mixed concrete sales volume was 467,000 cubic yards in the third quarter
of 1994 compared with 466,000 cubic yards sold in the corresponding 1993
period, and 1,434,000 cubic yards in the first nine months of 1994 compared
with 1,350,000 cubic yards sold in the first nine months of 1993.
The Division's pre-tax income from operations was $3.5 million in the most
recent quarter compared with $5.4 million in the year earlier quarter. The
decrease is largely due to costs and reduced volumes caused by an organized
labor strike affecting Ventura County operations in the current quarter. A
return to work agreement was implemented and the Ventura County plants resumed
normal operations shortly after the quarter's end. The affected workers have
accepted reduced wages and benefits pending further collective bargaining.
Until a definitive agreement is reached the possibility exists that further
work stoppages could occur. Gross profit from ready mixed concrete sales was
lower in the third quarter despite a 6% increase in average selling prices.
This decrease is due primarily to reduced sales volumes and increased unit
production costs at our Ventura County operations, as a result of the
aforementioned strike. Aggregates gross profit was lower in the third quarter
due primarily to a 7% volume decline. Despite volumes related to the
January 17, 1994 Los Angeles earthquake, 1994 volumes compared unfavorably with
1993 primarily because of a slowdown in infrastructure work in California.
Pre-tax income from operations for the first nine months of 1994 increased to
$10.8 million compared with $8.2 million in the similar 1993 period. Gross
profit from ready mixed concrete sales was higher in the first nine months of
1994 due to an 8% increase in average selling prices and a 6% increase in sales
volumes, offset partially by higher unit production costs. Gross profit for
aggregates was flat compared with the prior period as a 7% increase in average
selling prices for aggregates was offset by higher unit production costs and a
3% volume decline.
The Company is negotiating with its Los Angeles area employees represented by
the Operating Engineers Union, whose contract expired on September 15, 1994.
The Company is hopeful that the current negotiations will result in a new
contract with these employees. If, however, these negotiations reach impasse,
and if a strike results, the Company's operating results could be materially
adversely affected depending on the duration of the strike.
Asphalt Division
- - ----------------
Revenues in the Asphalt Division were $45.6 million in the third quarter of
1994, down $1.3 million or 3%, compared with $46.9 million in the corresponding
1993 period. Revenues were $114.6 million in the first nine months of 1994, up
$4.3 million, or 4%, from the first nine months of 1993. The revenue decrease
for the current quarter was due to lower asphalt sales volume, partially offset
by increased revenues from soil remediation operations. The revenue increase
for the current year's nine month period was due to higher average selling
prices and increased revenues from soil remediation operations. Approximately
12% to 15% of the Division's total revenues consists of sales of miscellaneous
products and services such as Guardtop, Oil Spread, Petromat, Soil Remediation
operations, equipment rentals, etc. The Division's pre-tax income from
operations increased to $5.2 million in the most recent quarter compared with
$4.5 million in the year earlier quarter. The increase is due primarily to
income from soil remediation operations which benefitted from a large job in
the current quarter. Asphalt gross profit was lower in the third quarter due
to a 7% decrease in sales volume. The decline in asphalt sales volumes relates
primarily to a slowdown in infrastructure work in California. Pre-tax income
from operations increased to $9.9 million in the first nine months of 1994
compared with $5.6 million in the prior period due to a 3% increase in average
selling prices offset partially by a 1% decline in asphalt volume. Increased
income from soil remediation operations also contributed to the improvement.
Properties Division
- - -------------------
Revenues in the Properties Division, excluding gains on sales of real estate,
were $6.7 million in the third quarter of 1994, up $1.0 million from revenues
of $5.7 million in the corresponding 1993 period, and $18.6 million in the
first nine months of 1994, up $1.9 million from $16.7 million in the first
nine months of 1993. The increase in revenue for the quarter and nine-month
period is primarily due to increased revenues from landfill operations due in
part to increased activity related to the Los Angeles earthquake and a large
job in Arizona in the current quarter, which is now essentially complete.
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 $4.7 million for 1994's third
quarter compared with $2.2 million in the prior year's third quarter, and $10.0
million for the first nine months of 1994 compared with $8.5 million in the
first nine months of 1993. There were $1.8 million in gains from real estate
sales in the current quarter compared with $0.1 million in gains from real
estate sales in the third quarter of 1993. Gains from real estate sales were
$2.3 million for the first nine months of 1994 compared with $1.8 million in
the similar 1993 period.
Liquidity and Capital Resources
- - -------------------------------
Cash and cash equivalents amounted to $1.5 million at September 30, 1994
compared with $10.6 million at December 31, 1993.
Cash provided by operating activities was $26.7 million for the nine months
ended September 30, 1994. Cash used for investing activities was $11.8
million, including $17.4 million for the purchase of property, plant, and
equipment, offset mainly by receipts on notes receivable of $1.8 million and
proceeds from sales of real estate of $3.6 million. Cash used for financing
activities was $24.0 million, including $6.9 million for cash dividends to
stockholders and a $17.8 million net decrease in debt. Overall, cash and cash
equivalents decreased $9.1 million during the first nine months of 1994.
Working capital totaled $37.3 million at September 30, 1994, down from $39.9
million at December 31, 1993.
Total consolidated long-term and short-term borrowings at September 30, 1994
and December 31, 1993 were $97.7 million and $115.5 million, respectively.
Debt as a percent of total capitalization was 21.5% and 24.8%, at September 30,
1994 and December 31, 1993, respectively.
Management believes that cash provided by operations and existing borrowing
arrangements will provide adequate funds for current commitments and expected
working capital requirements for the remainder of 1994. <PAGE>
CALMAT CO.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- - ----------------------------------------
(a) The following exhibit is included as part of the
Company's Report on Form 10-Q for the quarterly period
ended September 30, 1994, as required by Item 601 of
Regulation S-K.
Exhibit 27: Financial Data Schedule.
(b) No reports on Form 8-K were filed during the quarter
ended September 30, 1994.<PAGE>
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: November 14, 1994 By: /s/ PAUL STANFORD
-------------------------------------
Paul Stanford
Senior Vice President - Administration,
General Counsel and Secretary
Date: November 14, 1994 By: /s/ EDWARD J. KELLY
--------------------------------------
Edward J. Kelly
Senior Vice President, Treasurer
and Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from CalMat
Co. Consolidated Financial Statements as of September 30, 1994 and for the
nine months then ended and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000023533
<NAME> CALMAT CO.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> QTR-3
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 1,524
<SECURITIES> 0
<RECEIVABLES> 73,604
<ALLOWANCES> (3,353)
<INVENTORY> 6,495
<CURRENT-ASSETS> 90,564
<PP&E> 671,642
<DEPRECIATION> (259,679)
<TOTAL-ASSETS> 593,112
<CURRENT-LIABILITIES> 53,241
<BONDS> 97,104
<COMMON> 23,139
0
0
<OTHER-SE> 334,462
<TOTAL-LIABILITY-AND-EQUITY> 593,112
<SALES> 271,112
<TOTAL-REVENUES> 275,033
<CGS> 217,766
<TOTAL-COSTS> 217,766
<OTHER-EXPENSES> 2,468
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,685
<INCOME-PRETAX> 20,465
<INCOME-TAX> 7,521
<INCOME-CONTINUING> 12,944
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,944
<EPS-PRIMARY> 0.56
<EPS-DILUTED> 0
</TABLE>
