<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 MARCH 31, 1998
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.
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(Exact name of registrant as specified in its charter)
Delaware 95-0645790
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(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.
23,792,479 shares of Common Stock were outstanding at April 30, 1998.
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CALMAT CO.
INDEX
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<CAPTION>
PAGE
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Consolidated Balance Sheets:
March 31, 1998 and December 31, 1997 3
(b) Consolidated Statements of Operations:
For the Three Months Ended March 31, 1998 and 1997 4
(c) Consolidated Statements of Cash Flow:
For the Three Months Ended March 31, 1998 and 1997 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)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
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(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,301 $ 2,519
Cash held in trust for section 1031 exchanges 5,234 5,547
Trade accounts receivable, less allowance
for discounts and doubtful accounts
($5,696 in 1998 and $5,898 in 1997) 66,016 75,305
Income taxes receivable 4,826 6,252
Inventories 15,931 15,466
Prepaid expenses and other 3,568 4,187
Deferred income taxes 9,536 9,536
Installment notes receivable - current portion 2,733 2,740
-------- ---------
Total current assets 109,145 121,552
Installment notes receivable and other assets 36,271 34,059
Costs in excess of net assets of businesses acquired, net 48,447 48,719
Property, plant and equipment, at cost:
Land and deposits 194,487 193,332
Buildings, machinery and equipment 508,783 504,889
Construction in progress 48,500 38,447
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751,770 736,668
Less: Accumulated depreciation and depletion (311,606) (305,190)
-------- ---------
Property, plant and equipment, net 440,164 431,478
-------- ---------
Total assets $634,027 $ 635,808
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 29,496 $ 32,257
Accrued liabilities 38,103 38,872
Notes and bonds payable - current portion 191 337
Dividends payable 2,361 2,346
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Total current liabilities 70,151 73,812
Notes and bonds payable - long-term portion 121,356 118,401
Other liabilities and deferred credits 37,701 37,701
Deferred income taxes 59,351 59,349
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Total liabilities 288,559 289,263
Stockholders' equity:
Common stock 23,776 23,579
Additional paid-in capital 52,110 48,374
Retained earnings 269,582 274,592
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Total stockholders' equity 345,468 346,545
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Total liabilities and stockholders' equity $634,027 $ 635,808
======== =========
</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)
<TABLE>
<CAPTION>
Three months ended
March 31,
1998 1997
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Revenues:
Net sales and operating revenues $93,368 $88,782
Gains on sales of real estate 0 932
Other income 1,383 905
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94,751 90,619
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Costs and expenses:
Cost of products sold and operating expenses 85,041 79,714
Selling, general and administrative expenses 11,454 9,868
Interest expense 1,568 1,927
Other expense 200 148
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98,263 91,657
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Loss before taxes (3,512) (1,038)
Federal and state income taxes (1,021) (400)
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Net loss $(2,491) $ (638)
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Weighted-average shares outstanding - basic and diluted 23,679 23,242
======= =======
Per share data:
Loss per share - basic and diluted $ (0.11) $ (0.03)
======= =======
Cash dividends per share $ 0.10 $ 0.10
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</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>
Three months ended
March 31,
1998 1997
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OPERATING ACTIVITIES:
Net loss $ (2,491) $ (638)
Depreciation, depletion and amortization 9,176 8,480
Other 3,910 (11,080)
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Cash provided by (used for) operating activities 10,595 (3,238)
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INVESTING ACTIVITIES:
Purchase of property, plant and equipment (15,860) (8,689)
Proceeds from sale of real estate 0 4,215
Business acquired (1,045) --
Other 532 229
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Cash used for investing activities (16,373) (4,245)
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FINANCING ACTIVITIES:
Net borrowings - bank lines of credit 3,000 --
Principal payments on notes and bonds payable (192) (13)
Stock options exercised/repurchased 3,780 78
Payment of cash dividends (2,355) (2,324)
Other 14 56
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Cash provided by (used for) financing activities 4,247 (2,203)
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Decrease in cash (1,531) (9,686)
(Decrease) increase in cash held in trust for section 1031 exchanges (313) 3,296
-------- --------
Decrease in cash and cash equivalents (1,218) (12,982)
Balance, beginning of period 2,519 17,127
-------- --------
Balance, end of period $ 1,301 $ 4,145
======== ========
</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 1997 Annual Report on Form
10-K.
2. Reclassification: During the fourth quarter of 1997, the Company adopted
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share (EPS)", which establishes standards for computing and presenting EPS.
This statement simplifies the previous standard for computing EPS and makes
them comparable to international EPS standards. This statement requires
restatement of all prior period EPS data presented.
3. Basic and diluted earnings per share were computed using the method
prescribed by SFAS No. 128. Basic EPS was computed by dividing income
available to common shares outstanding during the period by the weighted
average common shares outstanding during the period. Diluted EPS is similar
to basic EPS except that the denominator is increased to include the number
of additional common shares that would have been outstanding if dilutive
additional common shares had been issued. Basic and diluted loss per share
are the same for the three months ended March 31, 1998 and 1997 because the
computation of diluted loss per share is antidilutive.
4. Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income". This statement establishes standards for reporting
and display of comprehensive income and its components in a full set of
general purpose financial statements. This statement had no impact on
reporting by the Company. At the same time, the Company adopted SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information".
This statement establishes standards for the way that public enterprises
report information about operating segments in annual financial statements
and requires that those enterprises report selected information about
operating segments in interim financial reports issued to shareholders.
Operating segments are components of an enterprise that are evaluated
regularly by the chief operating decision maker in deciding how to allocate
resources and in assessing performance. This statement does not change the
business segment information previously or currently reported by the Company.
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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
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The Company reported a net loss of $2.5 million, or $0.11 per share, for the
first quarter of 1998 compared with a net loss of $0.6 million, or $0.03 per
share, for the prior year's first quarter. Operating results were depressed due
to record rainfall in the Company's California markets, resulting in more lost
work days in the most recent quarter than in the year earlier quarter and
reduced plant efficiencies.
Business segment information for the three months ended March 31, 1998 and 1997
is as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
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(unaudited, amounts in thousands)
<S> <C> <C>
Revenues:
Construction Materials $88,609 $83,891
Properties - Operations 4,759 4,891
Properties - Real Estate Gains 0 932
Corporate and Other 1,383 905
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$94,751 $90,619
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Income (Loss) Before Income Taxes:
Construction Materials $ (872) $ 317
Properties - Operations 1,731 2,333
Properties - Real Estate Gains 0 932
Corporate and Unallocated Expenses, Net (3,504) (3,071)
Interest Expense (1,568) (1,927)
Other Income 701 378
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$(3,512) $(1,038)
======= =======
</TABLE>
Income (loss) 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 Unallocated Expenses, Net include corporate administrative expenses and
support expenses not allocated to business segments. Other Income includes
interest income and other miscellaneous items.
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CALMAT CO.
Construction Materials Division
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Sales volumes are shown below:
<TABLE>
<CAPTION>
(Volumes in Thousands)
Three Months Ended
March 31,
1998 1997
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<S> <C> <C>
Aggregates:
Tons sold to outside customers 3,993 4,144
Tons used in ready mixed concrete 735 684
Tons used in asphalt 963 1,024
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5,691 5,852
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Tons of hot-mix asphalt sold 1,400 1,456
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Yards of ready mixed concrete sold 598 534
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</TABLE>
Revenues in the Construction Materials Division were $88.6 million in the first
quarter of 1998, up $4.7 million, or 6% compared with the corresponding 1997
period. The increase was primarily due to 4% higher average selling prices for
aggregates and ready mixed concrete operations and 12% higher sales volumes for
the ready mixed concrete operations. The Division had a pre-tax loss from
operations of $0.9 million in the most recent quarter compared with pre-tax
income of $0.3 million in the year earlier quarter. The decline in earnings is
largely due to lower profits from aggregates operations as a result of 3% lower
sales volumes and 10% higher unit production costs, partly offset by 4% higher
average selling prices. The increase in aggregates unit production costs was
largely due to inefficiencies caused by handling unusually wet material
throughout the current quarter as a result of the record rainfall in the
Company's California markets. Despite 4% lower sales volumes and flat average
selling prices, earnings from asphalt operations were higher in the current
quarter as a result of 3% lower unit production costs. The decrease in asphalt
unit production costs is due to lower costs of liquid asphalt. Earnings from
ready mixed concrete operations also advanced due to 12% higher sales volumes
and 4% higher average selling prices, partly offset by a 3% increase in unit
production costs, in turn the result of higher cement costs. Ready mixed
concrete volumes were helped by the fact that a much larger percentage of the
Company's ready mixed concrete business is in Arizona and New Mexico where
weather conditions were less adverse.
Properties Division
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Revenues in the Properties Division, excluding gains on sales of real estate,
were $4.8 million in the first quarter of 1998, down $0.1 million from revenues
of $4.9 million in the corresponding 1997 period. Pre-tax income from
operations was $1.7 million in the most recent quarter compared with $3.3
million in the year earlier quarter. The current quarter includes no gains from
real estate sales versus gains of $0.9 million in the prior year's period. The
prior year's quarter also included $0.2 million of non-recurring income related
to the closure of an environmental clean-up project. Excluding real estate
gains and non-recurring income, the Properties Division pre-tax income from
operations decreased $0.4 million, due in part to recent sales of income
producing properties. Also contributing to the decline in earnings were lower
profits from the landfill operations, as a result of the record rainfall in the
Company's California markets.
Other
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Selling, General and Administrative expenses were higher in the current quarter
compared with the prior year's quarter, due mainly to non-recurring consulting
costs. However, for the full year management expects S.G.&A. expenses to be
slightly lower than the 1997 level.
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CALMAT CO.
Liquidity and Capital Resources
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Cash and cash equivalents were $1.3 million at March 31, 1998 compared with $2.5
million at December 31, 1997. Cash provided by operating activities was $10.6
million for the three months ended March 31, 1998. Cash used for investing
activities was $16.4 million, including $15.9 million used for the purchase of
property, plant, and equipment. Cash provided by financing activities was $4.2
million.
Working capital totaled $39.0 million at March 31, 1998, down from $47.7 million
at December 31, 1997. Current ratios were 1.6 at both March 31, 1998 and
December 31, 1997.
Total consolidated long-term and short-term borrowings at March 31, 1998 and
December 31, 1997 were $121.5 million and $118.7 million, respectively. Debt as
a percent of total capitalization was 26.0% and 25.5% at March 31, 1998 and
December 31, 1997, respectively.
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CALMAT CO.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(a) No reports on Form 8-K were filed during the quarter ended March 31, 1998.
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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: May 13, 1998 By: /s/ H. James Gallagher
----------------------------
H. James Gallagher
Executive Vice President,
Finance, Chief Financial Officer
and Treasurer
Date: May 13, 1998 By: /s/ Brent L. Stumme
----------------------------
Brent L. Stumme
Vice President,
Corporate Controller
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 6,535
<SECURITIES> 0
<RECEIVABLES> 71,712
<ALLOWANCES> (5,696)
<INVENTORY> 15,931
<CURRENT-ASSETS> 109,145
<PP&E> 751,770
<DEPRECIATION> (311,606)
<TOTAL-ASSETS> 634,027
<CURRENT-LIABILITIES> 70,151
<BONDS> 121,356
0
0
<COMMON> 23,776
<OTHER-SE> 321,692
<TOTAL-LIABILITY-AND-EQUITY> 634,027
<SALES> 93,368
<TOTAL-REVENUES> 94,751
<CGS> 85,041
<TOTAL-COSTS> 96,161
<OTHER-EXPENSES> 200
<LOSS-PROVISION> 334
<INTEREST-EXPENSE> 1,568
<INCOME-PRETAX> (3,512)
<INCOME-TAX> (1,021)
<INCOME-CONTINUING> (2,491)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,491)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
