<PAGE>
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, 1996
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
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(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.
23,240,312 shares of Common Stock were outstanding at November 11, 1996.
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CALMAT CO.
INDEX
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PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
(a) Consolidated Balance Sheets:
September 30, 1996 and December 31, 1995 3
(b) Consolidated Statements of Operations:
For the Three and Nine Months Ended
September 30, 1996 and 1995 4
(c) Consolidated Statements of Cash Flow:
For the Nine Months Ended
September 30, 1996 and 1995 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 6. Exhibits and Reports on Form 8-K 10
Signatures 11
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CALMAT CO.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
[CAPTION]
<TABLE>
September 30, December 31,
1996 1995
------------ ------------
ASSETS (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 853 $ -
Trade accounts receivable, less allowance
for discounts and doubtful accounts
($5,700 in 1996 and $4,570 in 1995) 69,400 62,274
Inventories 13,798 11,705
Prepaid expenses and other 4,227 3,265
Deferred income taxes 9,361 9,361
Installment notes receivable-current portion 398 7,217
--------- ---------
Total current assets 98,037 93,822
Installment notes receivable and other assets 20,151 20,670
Investment in and advances to affiliates 1,293 1,236
Costs in excess of net assets of business
acquired, net 50,833 52,102
Property, plant and equipment, at cost:
Land and deposits 188,030 166,995
Buildings, machinery and equipment 493,947 465,631
Construction in progress 32,604 40,082
--------- ---------
714,581 672,708
Less: Accumulated depreciation and depletion (294,386) (281,008)
--------- ---------
Property, plant and equipment, net 420,195 391,700
--------- ---------
Total assets $ 590,509 $ 559,530
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 25,137 $ 23,753
Accrued liabilities 37,323 32,687
Notes and bonds payable - current portion 8,848 110
Income taxes payable 3,421 1,403
Dividends payable 2,325 2,318
--------- ---------
Total current liabilities 77,054 60,271
Notes and bonds payable - long term portion 94,773 84,321
Other liabilities and deferred credits 31,540 30,670
Deferred income taxes 52,980 53,119
-------- ---------
Total liabilities 256,347 228,381
--------- ---------
Stockholders' Equity:
Common stock 23,237 23,182
Additional paid-in capital 41,472 40,588
Retained earnings 269,453 267,379
--------- ---------
Total stockholders' equity 334,162 331,149
--------- ---------
Total liabilities and stockholders' equity $ 590,509 $ 559,530
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
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CALMAT CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, amounts in thousands, except per share data)
[CAPTION]
<TABLE>
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Net sales and operating
revenues $114,978 $100,254 $300,542 $267,108
Gains on sales of real estate 832 0 2,632 3,828
Other income 750 608 2,724 2,927
-------- -------- -------- --------
116,560 100,862 305,898 273,863
-------- -------- -------- --------
Costs and expenses:
Cost of products sold and
operating expenses 96,573 86,161 257,379 233,358
Selling, general and
administrative expenses 9,208 8,314 28,532 26,451
Interest expense 1,668 847 3,945 1,829
Other expense 516 437 1,346 1,752
Special charge 0 0 0 2,000
-------- -------- -------- --------
107,965 95,759 291,202 265,390
-------- -------- -------- --------
Income before taxes 8,595 5,103 14,696 8,473
Federal and state income
taxes 3,401 1,888 5,658 3,135
-------- -------- -------- --------
Net income $ 5,194 $ 3,215 $ 9,038 $ 5,338
======== ======== ======== ========
Per Share Data:
Net income $ 0.22 $ 0.14 $ 0.39 $ 0.23
======== ======== ======== ========
Weighted average shares
outstanding 23,252 23,184 23,236 23,179
======== ======== ======== ========
Cash dividends per share $ 0.10 $ 0.10 $ 0.30 $ 0.30
======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
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CALMAT CO.
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited, amounts in thousands)
<TABLE>
<CAPTION>
Nine months ended
September 30,
1996 1995
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 9,038 $ 5,338
Depreciation, cost depletion and amortization 23,309 23,008
Other (4,649) 2,202
-------- --------
Cash provided by operating activities 27,698 30,548
-------- --------
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (50,323) (42,895)
Proceeds from sale of real estate 2,827 18,114
Acquisition of business, net, of cash acquired 0 (11,682)
Other 7,162 (4,582)
-------- --------
Cash used for investing activities (40,334) (41,045)
-------- --------
FINANCING ACTIVITIES:
Notes payable to banks 19,250 15,750
Principal payments on notes and bonds payable (60) (30)
Payment of cash dividends (6,960) (6,947)
Other 1,259 800
-------- --------
Cash provided by financing activities 13,489 9,573
-------- --------
Increase/(decrease) in cash and cash equivalents 853 (924)
Balance, beginning of period 0 2,139
-------- --------
Balance, end of period $ 853 $ 1,215
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
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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 1995 Annual
Report on Form 10-K.
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, 1996 was $0.9 million 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.
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CALMAT CO.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
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of Operations
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Results of Operations
- ---------------------
The Company reported net income of $5.2 million, or $0.22 per share, for the
third quarter of 1996, compared with $3.2 million, or $0.14 per share, for the
prior year's third quarter. Net income was $9.0 million, or $0.39 per share,
for the nine months ended September 30, 1996, compared with net income of $5.3
million, or $0.23 per share, for the comparable period in 1995. The nine-month
period in 1995 includes a special charge of $1.2 million, after-tax, or $0.05
per share, related to a consolidation of certain Construction Materials
operations.
Business segment information for the three and nine months ended September 30,
1996 and 1995 is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
-------- -------- -------- --------
(unaudited, amounts in thousands)
<S> <C> <C> <C> <C>
Revenues:
Construction Materials $109,448 $ 95,099 $284,077 $252,468
Properties - Operations 5,530 5,155 16,465 14,640
Properties - Real Estate Sales 832 0 2,632 3,828
Corporate and other 750 608 2,724 2,927
-------- -------- -------- --------
$116,560 $100,862 $305,898 $273,863
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
-------- -------- --------- --------
(unaudited, amounts in thousands)
<S> <C> <C> <C> <C>
Income before income taxes:
Construction Materials $ 9,743 $ 5,713 $ 16,990 $ 9,020
Properties - Operations 2,658 2,274 7,486 5,817
Properties - Real Estate Sale 832 0 2,632 3,828
Corporate and other (2,927) (2,503) (8,962) (8,170)
Interest expense (1,668) (847) (3,945) (1,829)
Other income (expense) (43) 466 495 1,807
Special charge (a) 0 0 0 (2,000)
------- ------- -------- -------
$ 8,595 $ 5,103 $ 14,696 $ 8,473
======= ======= ======== =======
</TABLE>
(a) Charge related to a consolidation of certain Construction Materials
operations.
Income before income taxes 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
other includes corporate administrative expenses and support expenses not
allocated to business segments. Other income (expense) includes interest
income, gains/losses on sale of fixed assets and other miscellaneous items.
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CALMAT CO.
Construction Materials Division
- -------------------------------
Sales volumes are shown below.
<TABLE>
<CAPTION>
Amounts in Thousands (unaudited) Three Months Ended Nine Months Ended
- -------------------- September 30, September 30,
1996 1995 1996 1995
------ ------ ------- -------
<S> <C> <C> <C> <C>
Aggregates:
Tons sold to outside customers 4,589 3,889 12,164 9,493
Tons used in ready mixed concrete 767 800 2,331 2,158
Tons used in asphalt 1,573 1,272 3,801 3,483
----- ----- ------ ------
6,929 5,961 18,296 15,134
===== ===== ====== ======
Tons of hot-mix asphalt sold 2,297 1,968 5,448 5,338
===== ===== ====== ======
Yards of ready mixed concrete sold 630 597 1,800 1,626
===== ===== ====== ======
</TABLE>
Revenues in the Construction Materials Division were $109.4 million in the
third quarter of 1996, up $14.3 million, or 15% compared with the corresponding
1995 period, and $284.1 million in the first nine months of 1996, up $31.6
million, or 13% compared with the same period in 1995. The revenue increase
for the current quarter and nine-month period was due to higher unit sales
volumes for aggregates, ready mixed concrete and asphalt and higher average
selling prices for aggregates and ready mixed concrete.
The Division's pre-tax income from operations was $9.7 million in the most
recent quarter compared with $5.7 million in the year earlier period. The year
earlier quarter included $2.1 million of incremental out-of-pocket costs
incurred in connection with an organized labor strike which affected the
Company's Los Angeles area operations. The improved results reflected higher
earnings from aggregates and ready mixed concrete operations. Sales volumes
increased 16% for aggregates and 6% for ready mixed concrete, and average
selling prices increased 5% for aggregates and 3% for ready mixed concrete.
Unit production costs increased 3% for aggregates operations. Asphalt results
declined during the current quarter, despite a 17% increase in sales volumes as
weak prices and increasing costs caused a significant decline in gross profit
margins. Asphalt unit production costs increased 5% of which approximately 30%
was the result of higher liquid asphalt costs. Aggregates and asphalt sales
volumes in the third quarter of 1995 were negatively impacted by the Los Angeles
area organized labor strike.
The Division's pre-tax income from operations for the first nine months was
$17.0 million compared with $9.0 million in the 1995 period, which included
$2.1 million of incremental out-of-pocket costs incurred as a result of the Los
Angeles area organized labor strike. The improved earnings largely stem from
the Company's aggregates operations which had 21% higher sales volumes, 2%
higher average selling prices and 2% lower unit production costs. Aggregates
sales volumes increased because of higher demand in most of the Company's
markets and the adverse effect of the Los Angeles area organized labor strike
on 1995 volumes. Also contributing to the improved earnings were the Company's
ready mixed concrete operations where sales volumes increased 11% and average
selling prices increased 2%. Partially offsetting the improved results were
lower earnings from asphalt operations, caused by weak prices and 6% higher
unit production costs, of which 40% was the result of increased costs of
liquid asphalt.
Although the California economy has begun to show signs of improvement, the
southern California economy, where the Company has significant operations, has
clearly lagged the rest of the state. Construction activity generally remains
sluggish in most of the Company's California markets. The Company's asphalt
operations in particular have been hurt by a lack of highway and street work.
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<PAGE>
CALMAT CO.
Properties Division
- -------------------
Revenues in the Properties Division, excluding gains on sales of real estate,
were $5.5 million in the third quarter of 1996, up $0.3 million from revenues
of $5.2 million in the corresponding 1995 period, and $16.5 million in the
first nine months of 1996, up $1.9 million from $14.6 million in the first nine
months of 1995. The increase in the nine-month period is primarily due to
increased revenues from landfill operations.
The Division's pre-tax income from operations increased to $3.5 million for the
third quarter of 1996 compared with $2.3 million in the prior year's third
quarter. The current quarter includes $0.8 million of gains from real estate
sales compared with no gains in the prior year's quarter. Excluding real estate
gains, pre-tax income from operations increased $0.4 million as improved
results in developed and undeveloped properties more than offset a slight
decline in landfill operations.
The Division's pre-tax income from operations increased to $10.1 million in the
first nine months of 1996 compared with $9.6 million in the prior period. Gains
from real estate sales of $2.6 million are included in 1996 versus gains of $3.8
million in 1995. Excluding real estate gains, pre-tax income from operations
increased $1.7 million. All segments of the division delivered improved
results, with landfill operations accounting for the largest share.
Liquidity and Capital Resources
- -------------------------------
Cash and cash equivalents amounted to $0.9 million at September 30, 1996
compared with $0.0 million at December 31, 1995. Cash provided by operating
activities was $27.7 million for the nine months ended September 30, 1996. Cash
used for investing activities was $40.3 million, including $50.3 million for the
purchase of property, plant, and equipment, offset by a decrease of installments
receivable of $6.4 million, and proceeds from the sales of real estate of $2.8
million. Cash provided by financing activities was $13.5 million, including a
$19.2 million net increase in debt, partially offset by cash dividends. Working
capital totaled $21.0 million at September 30, 1996, down from $33.6 million
at December 31, 1995. The primary reason for the decrease in working capital
was the classification of $8.7 million of debt to "Current liabilities" based on
scheduled maturities. Current ratios were 1.3 and 1.6 at September 30, 1996 and
December 31, 1995, respectively.
Total consolidated long-term and short-term borrowings at September 30, 1996
and December 31, 1995 were $103.6 million and $84.4 million, respectively.
Debt as a percent of total capitalization was 23.7% and 20.3%, at September 30,
1996 and December 31, 1995, respectively.
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<PAGE>
CALMAT CO.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibit 27. Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended
September 30, 1996.
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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 12, 1996 By: /s/ R. Bruce Rieser
----------------------------
R. Bruce Rieser
President
and Chief Operating Officer
Date: November 12, 1996 By: /s/ Edward J. Kelly
----------------------------
Edward J. Kelly
Senior Vice President,
Treasurer
and Chief Accounting Officer
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 853
<SECURITIES> 0
<RECEIVABLES> 75,100
<ALLOWANCES> 5,700
<INVENTORY> 13,798
<CURRENT-ASSETS> 98,037
<PP&E> 714,581
<DEPRECIATION> (294,386)
<TOTAL-ASSETS> 590,509
<CURRENT-LIABILITIES> 77,054
<BONDS> 94,773
0
0
<COMMON> 23,237
<OTHER-SE> 310,925
<TOTAL-LIABILITY-AND-EQUITY> 590,509
<SALES> 300,542
<TOTAL-REVENUES> 305,898
<CGS> 257,379
<TOTAL-COSTS> 257,379
<OTHER-EXPENSES> 1,346
<LOSS-PROVISION> 1,455
<INTEREST-EXPENSE> 3,945
<INCOME-PRETAX> 14,696
<INCOME-TAX> 5,658
<INCOME-CONTINUING> 9,038
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,038
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0
</TABLE>
