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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
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 1-6117
SOUTHDOWN, INC.
(Exact name of registrant as specified in its charter)
Louisiana 72-0296500
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1200 Smith Street
Suite 2400
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(713)650-6200
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
periods 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
----- ------
At July 31, 1995 there were 17.3 million common shares outstanding.
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<PAGE>
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
INDEX
Page
No.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheet
June 30, 1995 and December 31, 1994 1
Statement of Consolidated Earnings
Three months and six months ended
June 30, 1995 and 1994 2
Statement of Consolidated Cash Flows
Six months ended June 30, 1995 and 1994 3
Statement of Consolidated Revenues and
Operating Earnings by Business Segment
Three months and six months ended
June 30, 1995 and 1994 4
Statement of Shareholders' Equity
Six months ended June 30, 1995 4
Notes to Consolidated Financial Statements 5
Independent Accountants' Review Report 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 5. Other Matters 18
Item 6. Exhibits and Reports on Form 8-K 18
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
<CAPTION>
(in millions)
--------------------------------------
June 30, December 31,
1995 1994
-------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8.6 $ 7.4
Accounts and notes receivable, less allowance for doubtful
accounts of $9.0 and $7.2 82.2 73.0
Inventories (Note 3) 78.6 54.0
Deferred income taxes 11.6 26.5
Assets held for sale - 13.2
Prepaid expenses and other 3.0 3.5
-------------- ---------------
Total current assets 184.0 177.6
Property, plant and equipment, less accumulated depreciation,
depletion and amortization of $320.7 and $306.0 568.8 560.2
Goodwill 81.2 78.6
Other long-term assets:
Long-term receivables 24.8 15.3
Other 49.0 49.3
-------------- ---------------
$ 907.8 $ 881.0
-------------- ---------------
-------------- ---------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 1.4 $ 0.3
Accounts payable and accrued liabilities 89.4 103.2
-------------- ---------------
Total current liabilities 90.8 103.5
Long-term debt 227.6 185.8
Deferred income taxes 106.8 122.7
Minority interest in consolidated joint venture 30.6 28.9
Long-term portion of postretirement benefit obligation 81.2 82.0
Other long-term liabilities and deferred credits 18.7 21.0
-------------- ---------------
555.7 543.9
-------------- ---------------
Shareholders' equity:
Preferred stock redeemable at issuer's option (Note 4) 151.9 152.0
Common stock, $1.25 par value 21.6 21.6
Capital in excess of par value 126.9 126.6
Reinvested earnings 51.7 36.9
-------------- ---------------
352.1 337.1
-------------- ---------------
$ 907.8 $ 881.0
-------------- ---------------
-------------- ---------------
</TABLE>
<PAGE>
<TABLE>
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED EARNINGS
(Unaudited)
<CAPTION>
(in millions, except per share data)
------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1995 1994 1995 1994
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenues $ 155.0 $ 149.4 $ 274.1 $ 260.7
------------ ------------ ----------- ------------
Costs and expenses:
Operating 105.5 103.4 186.7 184.1
Depreciation, depletion and amortization 9.8 9.9 19.7 19.8
Selling and marketing 3.9 3.7 7.5 6.8
General and administrative 9.1 10.5 18.5 20.4
Other income, net (1.8) (4.5) (2.7) (3.7)
------------ ------------ ----------- ------------
126.5 123.0 229.7 227.4
Minority interest in earnings of consolidated joint venture 1.3 1.1 1.7 1.1
------------ ------------ ----------- ------------
127.8 124.1 231.4 228.5
------------ ------------ ----------- ------------
Operating earnings 27.2 25.3 42.7 32.2
Interest, net of amounts capitalized (6.8) (7.5) (13.4) (16.2)
------------ ------------ ----------- ------------
Earnings from continuing operations 20.4 17.8 29.3 16.0
Federal and state income tax expense (6.8) (5.7) (9.6) (5.2)
------------ ------------ ----------- ------------
Earnings from continuing operations 13.6 12.1 19.7 10.8
Loss from discontinued operations, net of income
taxes (Note 2) - (1.1) - (2.0)
------------ ------------ ----------- ------------
Net earnings $ 13.6 $ 11.0 $ 19.7 $ 8.8
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
Dividends on preferred stock (Note 4) $ 2.5 $ 2.4 $ 4.9 $ 4.5
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
Earnings (loss) per common share (Note 4):
Primary
Earnings from continuing operations $ 0.63 $ 0.54 $ 0.85 $ 0.35
Loss from discontinued operations,
net of income taxes - (0.06) - (0.11)
------------ ------------ ----------- ------------
$ 0.63 $ 0.48 $ 0.85 $ 0.24
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
Fully diluted
Earnings from continuing operations $ 0.58 $ 0.51 $ 0.83 $ 0.35
Loss from discontinued operations,
net of income taxes - (0.05) - (0.11)
------------ ------------ ----------- ------------
$ 0.58 $ 0.46 $ 0.83 $ 0.24
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
Average shares outstanding (Exhibit 11)
Primary 17.6 17.9 17.5 17.9
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
Fully diluted 23.3 23.8 20.9 17.9
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
</TABLE>
<PAGE>
<TABLE>
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
<CAPTION>
(in millions)
----------------------------------
Six Months Ended
June 30,
----------------------------------
1995 1994
------------ ------------
<S> <C> <C>
Operating activities:
Earnings from continuing operations $ 19.7 $ 10.8
Adjustments to reconcile earnings from continuing
operations to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization 19.7 19.8
Deferred income tax expense 5.4 1.1
Amortization of debt issuance costs 1.3 2.1
Changes in operating assets and liabilities (56.2) (25.2)
Other adjustments 1.8 1.1
Net cash used in discontinued operations (1.5) (1.2)
------------ ------------
Net cash provided by (used in) operating activities (9.8) 8.5
------------ ------------
Investing activities:
Additions to property, plant and equipment (13.0) (10.6)
Acquisitions, net of cash acquired (12.6) -
Proceeds from asset sales 4.0 -
Other (0.5) (0.9)
Net cash used in discontinued operations (1.5) (3.2)
------------ ------------
Net cash used in investing activities (23.6) (14.7)
------------ ------------
Financing activities:
Additions to long-term debt 41.4 39.6
Reductions in long-term debt (0.2) (110.6)
Dividends (6.6) (3.3)
Proceeds from sale of preferred stock - 86.3
Securities issuance costs - (4.6)
------------ ------------
Net cash provided by financing activities 34.6 7.4
------------ ------------
Net increase in cash and cash equivalents 1.2 1.2
Cash and cash equivalents at beginning of period 7.4 7.4
------------ ------------
Cash and cash equivalents at end of period $ 8.6 $ 8.6
------------ ------------
------------ ------------
</TABLE>
Cash payments for income taxes totaled $7.9 million and $300,000 in 1995
and 1994, respectively. In order not to incur additional interest charges,
in early January 1995 the Company also paid a $7.6 million tax assessment,
including interest, proposed by the Internal Revenue Service in a
preliminary audit report issued in late 1994. Interest paid, net of
amounts capitalized, was $12.4 million and $16.7 million in 1995 and 1994,
respectively. <PAGE>
<TABLE>
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED REVENUES AND OPERATING EARNINGS
BY BUSINESS SEGMENT
(Unaudited)
<CAPTION>
(in millions)
--------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------------------------
1995 1994 1995 1994
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Contributions to revenues:
Cement $ 108.8 $ 107.5 $ 188.9 $ 180.9
Concrete products 56.5 53.6 106.2 103.2
Intersegment sales (10.3) (11.7) (21.0) (23.4)
----------- ------------ ----------- -----------
$ 155.0 $ 149.4 $ 274.1 $ 260.7
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
Contributions to operating earnings (loss) before
expense and income taxes:
Cement $ 30.2 $ 27.6 $ 51.8 $ 44.5
Concrete products 2.7 3.7 3.9 2.9
Corporate
General and administrative (5.9) (7.6) (12.3) (14.5)
Depreciation, depletion and amortization (1.1) (1.2) (2.1) (2.4)
Miscellaneous income 1.3 2.8 1.4 1.7
----------- ------------ ----------- -----------
$ 27.2 $ 25.3 $ 42.7 $ 32.2
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
</TABLE>
<TABLE>
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
STATEMENT OF SHAREHOLDERS' EQUITY
(Unaudited)
<CAPTION>
(in millions)
-----------------------------------------------------------------------------
Capital
Preferred Stock Common Stock in excess Reinvested
---------------------- --------------------
Shares Amount Shares Amount par value earnings
---------- ---------- --------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 4.6 $ 152.0 17.3 $ 21.6 $ 126.6 $ 36.9
Net earnings - - - - - 19.7
Dividends on preferred stock
(Note 4) - - - - - (4.9)
Other - (0.1) - - 0.3 -
---------- ---------- --------- -------- ----------- -------------
Balance at June 30, 1995 4.6 $ 151.9 17.3 $ 21.6 $ 126.9 $ 51.7
---------- ---------- --------- -------- ----------- -------------
---------- ---------- --------- -------- ----------- -------------
</TABLE> <PAGE>
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 - Unaudited Consolidated Financial Statements:
The Consolidated Balance Sheet of Southdown, Inc. and subsidiary companies
(the Company) at June 30, 1995 and the Statements of Consolidated Earnings,
Consolidated Cash Flows, Consolidated Revenues and Operating Earnings by
Business Segment and Shareholders' Equity for the periods indicated herein
have been prepared by the Company without audit. The Consolidated Balance
Sheet at December 31, 1994 is derived from the December 31, 1994 audited
financial statements, but does not include all disclosures required by
generally accepted accounting principles. It is assumed that these financial
statements will be read in conjunction with the audited financial statements
and notes thereto included in the Company's 1994 Annual Report on Form 10-K.
In the opinion of management, the statements reflect all adjustments
necessary for a fair presentation of the financial position, results of
operations and cash flows of the Company on a consolidated basis and all such
adjustments are of a normal recurring nature. The interim statements for the
period ended June 30, 1995 are not necessarily indicative of results to be
expected for the full year. Certain data from the prior year have been
reclassified for purposes of comparison.
Note 2 - Discontinued Environmental Services Segment:
During the fourth quarter of 1994, the Company adopted a formal plan to
exit the environmental services business and recorded a $21.6 million charge
to earnings to reflect (i) the difference between the book value of the
environmental services assets and the estimated proceeds from the disposal of
those assets and (ii) the estimated losses to be incurred prior to the sale
of the assets and other direct costs of exiting the business. During April
1995, the Company sold all the outstanding shares of stock of its remaining
hazardous waste processing facilities for a combination of $11.8 million in
cash and notes plus certain working capital items. The Company remains
contingently liable for certain environmental remediation issues, known and
unknown, under the indemnification provisions of the sales agreements.
As a result of the decision to exit the environmental services business,
prior periods have been restated to present the results from the
Environmental Services segment as discontinued operations. Summary operating
results of the discontinued Environmental Services segment are as follows:
(unaudited in millions)
--------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
1994 1994
--------- ---------
Revenue:
As previously reported $ 157.6 $ 277.0
Less amounts attributable to
discontinued operations 8.2 16.3
--------- ---------
Revenues from continuing operations $ 149.4 $ 260.7
--------- ---------
--------- ---------
Pre-tax operating loss from
discontinued operations $ (1.7) $ (3.1)
--------- ---------
--------- ---------
Note 3 - Inventories:
(unaudited in millions)
----------------------------
June 30, June 30,
1995 1994
---------- ---------
Finished goods $ 22.7 $ 15.1
Work in progress 20.9 6.5
Raw materials 5.9 4.6
Supplies 29.1 27.8
---------- ---------
$ 78.6 $ 54.0
---------- ---------
---------- ---------
Inventories stated on the LIFO method were $32.3 million of total
inventories at June 30, 1995 and $19.2 million of total inventories at
December 31, 1994 compared with current costs of $40.6 million and $27.5
million, respectively.
For interim reporting purposes, the Company charges cost of goods sold for
its cement manufacturing operations on the basis of predetermined standard
cost estimates established by management. The Company defers as a charge or
credit to inventory any difference between actual manufacturing costs and the
standard. At year-end, any variation remaining between the result at
standard cost and actual cost is charged or credited to cost of goods sold.
Note 4 - Capital Stock:
Common Stock
At June 30, 1995 17,283,000 shares of common stock were issued and
outstanding.
Preferred Stock Redeemable at Issuer's Option
Series A Preferred Stock - The Company had 1,994,000 shares of
Preferred Stock, $0.70 Cumulative Convertible Series A (Series A Preferred
Stock) outstanding at June 30, 1995, December 31, 1994 and June 30, 1994.
Dividends paid on the Series A Preferred Stock were approximately $350,000
and $700,000, respectively, during each of the three and six month periods
ended June 30, 1995 and 1994.
Series B Preferred Stock - The Company had 914,360 shares of Preferred
Stock, $3.75 Convertible Exchangeable Series B (Series B Preferred Stock)
outstanding at June 30, 1995, and 917,160 shares outstanding at December 31,
1994 and June 30, 1994. Dividends accrued on the Series B Preferred Stock
were approximately $860,000 and $800,000, respectively, during the three
months ended June 30, 1995 and 1994. Dividends paid on the Series B
Preferred Stock were approximately $1.7 million during each of the six months
ended June 30, 1995 and 1994.
Series D Preferred Stock - On January 27, 1994, the Company issued
1,725,000 shares of Preferred Stock, $2.875 Cumulative Convertible Series D
(Series D Preferred Stock) all of which were outstanding at June 30, 1995,
December 31, 1994, and June 30, 1994. Dividends accrued on the Series D
Preferred Stock were approximately $1.3 million and $1.2 million,
respectively, during the three month periods ended June 30, 1995 and 1994.
Dividends accrued on the Series D Preferred Stock were approximately $2.5
million and $2.1 million, respectively, during the six month periods ended
June 30, 1995 and 1994.
Note 5 - Contingencies:
See Item 2. "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources - Known
Events, Trends and Uncertainties" for discussion of certain contingencies.
Note 6 - Review by Independent Accountants:
The unaudited financial information presented in this report has been
reviewed by the Company's independent public accountants. The review was
limited in scope and did not constitute an audit of the financial information
in accordance with generally accepted auditing standards such as is performed
in the year-end audit of financial statements. The report of Deloitte &
Touche LLP relating to its limited review of the financial information as of
June 30, 1995 and for the six-month periods ended June 30, 1995 and 1994
follows.<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Shareholders and
Board of Directors of
Southdown, Inc.
Houston, Texas
We have reviewed the accompanying consolidated balance sheet of
Southdown, Inc. and subsidiary companies as of June 30, 1995, and the related
consolidated statements of earnings and cash flows for the six months ended
June 30, 1995 and 1994 and the statement of shareholders' equity for the six
months ended June 30, 1995. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of the
interim financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to such financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Southdown, Inc. and
subsidiary companies as of December 31, 1994 and the related consolidated
statements of earnings, shareholders' equity and cash flows for the year then
ended (not presented herein); and in our report dated January 27, 1995, we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying consolidated
balance sheet as of December 31, 1994 is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has
been derived.
Deloitte & Touche LLP
Houston, Texas
July 25, 1995<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
Consolidated Second Quarter Earnings
Net earnings for the second quarter of 1995 were $13.6 million,
$0.58 per share fully diluted. Net earnings for the prior year quarter were
$11.0 million, $0.46 per share, including a loss from the discontinued
environmental services operation of $1.1 million, $0.05 per share.
Second quarter 1995 operating earnings improved 7.5% or $1.9
million over the same quarter of the prior year. The improvement reflects
record quarterly earnings achieved by the Cement segment attributable to an
11% improvement in cement sales prices over the prior year quarter that was
partly offset by lower sales volumes and higher unit cost of sales.
Operating earnings for the Concrete Products segment declined primarily
because the prior year quarter included a $1.1 million gain on the sale of
thirty-five surplus ready-mixed concrete mixer trucks in California.
Excluding this gain, operating results were approximately flat between the
two quarters. Miscellaneous income in the prior year quarter included $2.3
million from a gain contingency that was acquired in the Moore McCormack
Resources, Inc. (Moore McCormack) purchase. Interest expense declined
reflecting the significantly lower level of borrowing cost resulting from the
early retirement of $45 million of 12% notes in April 1994.
Consolidated Year-to-Date Earnings
Net earnings for the six months ended June 30, 1995 were $19.7
million, $0.83 per share, fully diluted, compared with $8.8 million, $0.24
per share, in the prior year period, including a loss from the discontinued
Environmental Services operation of $2.0 million, $0.11 per share. The year-
over-year improvement resulted from a 16% increase in cement earnings, a $1.0
million improvement in the results reported by Concrete Products, a 15%
reduction in corporate expenses and a 17% reduction in interest expense. The
Cement segment benefited from an 11% improvement in average sales prices,
partly offset by a 5% decrease in sales volume and higher unit cost of sales.
Excluding the prior year gain on the sale of the surplus ready-mix trucks,
operating earnings from the Concrete Products segment were significantly
improved, primarily as a result of higher California aggregate earnings.
Miscellaneous income for the prior year period reflects the
previously mentioned $2.3 million gain and a $1.7 million charge in
connection with the disposition of certain lawsuits. The reduction of
interest expense reflects the early retirement of $90 million of 12% notes
during the first six months of 1994.
Segment Operating Earnings
Cement
Second Quarter - Operating earnings of the Cement segment for the
three month period ended June 30, 1995 were $30.2 million which represented a
record quarter and a 9% improvement over the $27.6 million reported in the
prior year quarter. Cement sales prices improved an average of $6.10 per ton
for the quarter, reflecting price increases in all of the Company's markets,
while sales volumes were 7.5% lower than in the previous year's quarter. The
segment's unit cost of sales was higher primarily because of: (i) increased
purchases of higher cost finished cement to supplement the Company's
production capacity and (ii) higher maintenance costs at various cement
plants. The segment's operating results for the second quarter of 1995 were
also impacted by a $750,000 charge related to a litigation settlement. The
decline in sales volume primarily reflects inclement weather in several of
the Company's markets and, at theVictorville, California plant, low cement
inventory levels as a result of an outage of the plant's main finish mill
during the month of April.
Year-to-Date - Operating earnings for the six months ended June
30, 1995 were $51.8 million compared with $44.5 million in the prior year
period. Despite higher unit cost of sales and lower sales volumes, operating
earnings improved because of a $6.06 per ton increase in average cement sales
prices reflecting price increases implemented in all the Company's market
areas since mid-1994. The 5% reduction in sales volume primarily reflects
the impact of inclement weather in several market areas, most notably Ohio,
Colorado and southern California. Even though manufacturing costs per ton
produced during the first six months of 1995 were comparable with the prior
year period, unit cost of sales were higher. The increase in unit cost of
sales reflects: (i) an 84% increase in outside purchases of higher cost
finished cement to supply various cement plants and sales terminals and (ii)
higher terminal operating costs in the Company's Florida market area where an
additional terminal has been acquired since mid-1994. The segment's
operating results for the first half of 1995 were also impacted by charges of
$250,000 and $750,000, respectively, in the first and second quarters related
to a litigation settlement.
Sales volumes, average unit price and cost data and unit
operating profit margins relating to the Company's cement plant operations
appear in the following table:
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
1995 1994 1995 1994
--------- -------- -------- -------
Tons of cement sold (thousands) 1,552 1,678 2,768 2,918
--------- -------- -------- -------
--------- -------- -------- -------
Weighted average per ton data:
Sales price (net of freight) $61.71 $55.61 $60.13 $ 54.07
Cost of sales (1) 43.38(2) 40.19 43.80(2) 40.86
--------- -------- -------- -------
Margin $18.33 $15.42 $16.33 $ 13.21
--------- -------- -------- -------
--------- -------- -------- -------
______________
(1) Includes fixed and variable manufacturing costs, cost of
purchased cement, selling expenses, plant general and
administrative costs, other plant overhead and miscellaneous
costs.
(2) Excludes a $750,000 and $1 million charge for the three and six
months ended June 30,1995, respectively, related to a litigation
settlement.
Concrete Products
Second Quarter - The Concrete Products segment s operating earnings
for the quarter ended June 30, 1995 declined to $2.7 million compared with
$3.7 million in the prior year quarter primarily because the prior year
period included a $1.1 million gain from the sale of thirty-five surplus
ready-mixed concrete mixer trucks. Excluding this gain, operating results
were approximately flat between the two quarters as improved ready-mixed
concrete sales prices and improved results from the California aggregate
operation were offset by higher raw material and other operating costs of the
Florida operation. Although ready-mixed concrete sales volumes in California
improved slightly compared with the second quarter of 1994, ready-mixed
concrete volumes in Florida declined 9.5% from the prior year quarter as a
result of a decline in Florida residential construction and abnormally wet
weather during the 1995 period.
Year-to-Date - Excluding the prior year gain on the sale of surplus
trucks, the Concrete Products operating earnings increased $2.1 million to
$3.9 million for the six months ended June 30, 1995. Operating results from
ready-mixed concrete improved by approximately $700,000 over the prior year
period because higher prices in both markets more than offset a 7% decline in
ready-mixed concrete sales volumes and, primarily in Florida, higher
operating costs. The decrease in sales volumes reflects the abnormally wet
weather in California during the first part of 1995 and, in Florida, a
decline in residential construction compared with the prior year period, as
well as abnormally wet weather in the first six months of 1995.
The segment's operating results also reflect continuing improvement
primarily from the aggregate operations in southern California and to a
lesser extent from the block, resale and flyash operations in Florida which
combined totalled $4.0 million of operating earnings in the 1995 period
compared with $2.6 million in the 1994 period.
Sales volumes, unit price and cost data and unit operating margins
relating to the Company's sales of ready-mixed concrete appear in the
following table:
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------------
1995 1994 1995 1994
------- ------- ------- ------
Yards of ready-mixed concrete
sold (thousands) 889 919 1,680 1,812
------- ------- ------- ------
------- ------- ------- ------
Weighted average per cubic
yard data:
Sales price $ 51.10 $ 47.76 $ 50.60 $ 46.49
Operating costs (1) 50.65 46.81 50.62 46.91
------- ------- ------- ------
Margin (2) $ 0.45 $ 0.95 $ (0.02) $ (0.42)
------- ------- ------- ------
------- ------- ------- ------
______________
(1) Includes variable and fixed plant costs, delivery,
selling, general and administrative and miscellaneous
operating costs, but excluding the $1.1 million gain
realized on the 1994 sale of trucks.
(2) Does not include aggregate, concrete block and other related
products.
The increase in the weighted average sales price per cubic yard for
the three and six months ended June 30, 1995 compared with the 1994 period
reflects price increases implemented in both the Company's Florida and
southern California markets. The increase in weighted average operating
costs per cubic yard for the three and six months ended June 30, 1995
compared with 1994 is primarily attributable to higher raw material and other
operating costs of the Florida operations.
Corporate
Second Quarter - Corporate general and administrative expenses were
$5.9 million in the second quarter of 1995 compared with $7.6 million in the
prior year quarter. The decline in general and administrative expenses
resulted primarily from lower personnel related costs, legal fees and office
expense.
Miscellaneous income in the prior year quarter included $2.3
million from realization of a gain contingency stemming from the 1988
acquisition of Moore McCormack.
Year-to-Date - Corporate general and administrative expenses for
the first six months of 1995 were $2.2 million below the prior year period
primarily because of lower personnel related costs and legal fees.
Miscellaneous income for the prior year period reflects the above mentioned
$2.3 million gain and a $1.7 million charge in connection with the
disposition of certain lawsuits.
Liquidity and Capital Resources
The discussion of liquidity and capital resources included on pages 30
through 38 of the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 should be read in conjunction with the discussion of
liquidity and capital resources contained herein.
The Company's Revolving Credit Facility totals $200 million and
matures in November 1996. At June 30, 1995, the Revolving Credit Facility
included $18.5 million of borrowing capacity that is restricted solely for
potential funding of obligations under an agreement between the Company and
the U.S. Maritime Administration (MARAD) related to certain shipping
operations owned previously by Moore McCormack. The Company's contingent
obligation to MARAD and, thus, the restriction on the Company's borrowing
capacity under the Revolving Credit Facility, declines by approximately $2.5
million a year. The terms of the facility also permit the issuance of
standby letters of credit up to a maximum of $95 million in lieu of
borrowings. Substantially all of the Company's assets are pledged to secure
this facility. At June 30, 1995, $64.0 million of borrowings and $61.4
million of letters of credit were outstanding under the Revolving Credit
Facility, leaving $56.1 million of unused and unrestricted capacity.
In the first six months of 1995, borrowings under the Company's
Revolving Credit Facility were utilized to (i) fund working capital
requirements, including the build-up of inventories, (ii) invest
approximately $13.0 million in plant, property and equipment, (iii) acquire
additional ready-mix concrete operations in Florida and in southern
California for a total of $12.6 million, and (iv) pay dividends on preferred
stock. The Company's planned capital expenditures for 1995 have been revised
downward to approximately $40 million, approximately $30 million for the
Cement segment and $10 million for the Concrete Products segment, primarily
because of delays encountered in the permiting and engineering phases of the
announced finish grinding expansion project at the Company's Ohio plant now
expected to be completed in 1997.
Early in 1994, the Company realized approximately $82 million in net
proceeds from the sale of 1,725,000 shares of a new issue of preferred stock.
The net proceeds were used to prepay an $18 million promissory note and to
reduce borrowings under the Company's Revolving Credit Facility, some of
which had been utilized to redeem the $90 million outstanding principal
amount of the Company's 12% Senior Subordinated Notes Due 1997. Other
borrowings in 1994 under the Company's Revolving Credit Facility were
utilized to finance the seasonal build-up of inventories and make investments
of approximately $10.6 million in property, plant and equipment and pay
dividends on preferred stock.
Changes in Financial Condition
The change in the financial condition of the Company between December
31, 1994 and June 30, 1995 reflects borrowings under the Company's Revolving
Credit Facility to fund working capital requirements, capital expenditures
and preferred stock dividends. Accounts and notes receivables increased
because of the additional sales activity occurring in the summer construction
season relative to the winter months and also reflect notes received as
partial consideration in connection with the sale of the Company's remaining
hazardous waste processing facilities. The increase in inventories reflects
both the seasonal build-up in cement inventories in preparation for the peak
selling months in the second and third quarters and the less than anticipated
cement sales volumes because of inclement weather in several market areas.
The decrease in deferred income taxes reflects the realization of temporary
differences related to the disposition of the Environmental Services segment
and the reduction of net operating loss carry forwards. The decline in
assets held for sale reflects the sale of the remaining hazardous waste
processing facilities. Accounts payable and accrued liabilities decreased
because of the timing of payments on normal trade and other obligations.
Known Events, Trends and Uncertainties
Environmental Matters
The Company is subject to extensive Federal, state and local air,
water and other environmental laws and regulations. These constantly
changing laws regulate the discharge of materials into the environment and
may require the Company to remove or mitigate the environmental effects of
the disposal or release of certain substances at the Company's various
operating facilities. Owners and operators of industrial facilities may be
subject to fines or other actions imposed by the U.S. Environmental
Protection Agency (U.S. EPA) and corresponding state regulatory agencies for
violations of laws or regulations relating to hazardous substances. The
Company has incurred fines imposed by various environmental regulatory
agencies in the past.
Although several of the Company's previously and currently owned
facilities at several locations are presently the subject of various local,
state and federal environmental proceedings and inquiries, including being
named a potentially responsible party with regard to Superfund sites,
primarily at several locations to which they are alleged to have shipped
materials for disposal, most of these matters are in their preliminary stages
and final results may not be determined for years. Based on information
developed to date, the Company has no reason to believe it will be required
to spend significant sums with regard to these locations either individually
or in the aggregate. However, until it is determined what, if any,
contribution the Company made to these locations and until all environmental
studies, investigations, remediation work and negotiations with potential
sources of recovery have been completed, it is impossible to determine the
ultimate cost of resolving these environmental matters.
The Clean Air Act Amendments of 1990 provide comprehensive
federal regulation of various sources of air pollution, and establish a new
federal operating permit program for virtually all manufacturing operations,
including the cement industry. The Clean Air Act Amendments will likely
result in increased capital and operational expenses for the Company in the
future, the amounts of which are not presently determinable. The Company, on
a pre-determined phase-in schedule, has recently begun the process of
submitting the required permit applications and payment of annual permit
fees. In addition, the U.S. EPA is developing air toxics regulations for a
broad spectrum of industrial sectors, including portland cement
manufacturing. U.S. EPA has indicated that the new maximum achievable
control technology standards could require significant reduction of air
pollutants below existing levels prevalent in the industry. Management has
no reason to believe, however, that these new standards would place the
Company at a disadvantage with respect to its competitors. To the contrary,
given the age, condition, design and other features of the Company's cement
manufacturing facilities, these more stringent standards may enhance the
Company's competitive position.
Industrial operations have been conducted at some of the
Company's cement manufacturing facilities for almost 100 years. Management
believes that the Company's current procedures and practices for handling and
management of materials are generally consistent with industry standards and
legal requirements and that appropriate precautions are taken to protect
employees and others from harmful exposure to hazardous materials. However,
because of the complexity of operations and legal requirements, there can be
no assurance that past or future operations will not result in operational
errors, violations, remediation liabilities or claims by employees or others
alleging exposure to toxic or hazardous materials.
Cement kiln dust - Many of the raw materials, products and by-
products associated with the operation of any industrial facility, including
those for the production of cement or concrete products, may contain chemical
elements or compounds that are designated as hazardous substances. One by-
product of the cement manufacturing process at many of the Company's cement
plants is cement kiln dust (CKD). Under the Bevill amendment to the Resource
Conservation and Recovery Act, CKD is currently exempt from management as a
hazardous waste, except CKD which is produced by kilns burning hazardous
waste derived fuel and which fails to meet certain criteria. However, CKD
that is infused with water may produce a leachate with an alkalinity high
enough to be classified as hazardous and may also leach certain hazardous
trace metals present therein. The Company has recorded charges totaling
$11.7 million as the estimated remediation cost for one CKD disposal site in
Ohio where such leaching has occurred. Approximately $11.2 million of the
reserved amount had been expended through June 30, 1995 and the construction
phase of the interim action is essentially complete. Most of the balance of
the reserved amount will be utilized to cover a pump and treatment and
monitoring phase, together with a feasibility study to be conducted in late
1996 to evaluate the effectiveness of the remediation project.
On a voluntary basis, the Company is also investigating two other
inactive Ohio CKD disposal sites. The two additional sites in question were
part of a cement manufacturing facility that was owned and operated by a now
dissolved cement company from 1924 to 1945 and by a division of USX
Corporation (USX) from 1945 to 1975. The Company believes that USX is a
responsible party because it owned and operated the larger of the two sites
(USX Site) at the time of disposal of the hazardous substances, arranged for
the disposal of the hazardous substances and transported the hazardous
substances to the USX Site. Therefore, based on the advice of counsel, the
Company believes there is a reasonable basis for the apportionment of cleanup
costs relating to the USX Site between the Company and USX with USX
shouldering substantially all of the cleanup costs because, based on the
facts known at this time, the Company itself disposed of no CKD at the USX
Site and is potentially liable under CERCLA only because of its current
ownership of the USX Site.
On September 24, 1993, the Company filed a complaint against USX,
alleging that USX is a potentially responsible party under CERCLA and under
applicable Ohio law, and therefore jointly and severally liable for costs
associated with cleanup of the USX Site. Based on the limited information
available, the Company has received two preliminary estimates of the
potential magnitude of the remediation costs of the USX Site, $8 million and
$32 million, depending on the assumptions used. The Company and USX have
held settlement discussions with respect to this matter. In this regard, in
April 1995, the Company and USX executed an agreement whereby USX would
reimburse the Company for half of certain costs already incurred by the
Company at the USX Site and the Company and USX would jointly fund the
initial project of a phased approach to investigating and remediating the
problems at the USX Site. The court has granted a jointly requested stay of
litigation until October 6, 1995.
Under CERCLA and applicable Ohio law, a court generally applies
equitable principles in determining the amount of contribution which a
potentially responsible party must provide with respect to a cleanup of
hazardous substances and such determination is within the sole discretion of
the court. In addition, no regulatory agency has directly asserted a claim
against the Company as the owner of the USX Site requiring it to remediate
the property, and no cleanup of the USX Site has yet been initiated.
No substantial investigative work has been undertaken at other
CKD sites in Ohio or elsewhere. Although data necessary to enable the
Company to estimate total remediation costs is not available, the Company
acknowledges that it is at least reasonably possible the ultimate cost to
remediate the CKD disposal problem could be significantly more than the
amounts reserved.
Other Contingencies
Discontinued Moore McCormack Operations - In conjunction with the
acquisition of Moore McCormack in 1988, the Company assumed certain
liabilities for operations that Moore McCormack had previously discontinued.
These liabilities, some of which are contingent, represent guarantees and
undertakings related primarily to Moore McCormack's divestiture of certain
businesses in 1986 and 1987. Payments relating to liabilities from these
discontinued operations were $1.2 million in the first six months of 1995,
$1.1 million in the first six months of 1994 and $2.5 million in fiscal 1994.
The Company is either a guarantor or directly liable under certain charter
hire debt agreements totaling approximately $5 million at June 30, 1995,
declining through February 1997. Although the estimated liability under
these guaranties has been included in the liability for discontinued Moore
McCormack operations, enforcement of the guaranty, while not resulting in a
charge to earnings, would result in a substantial cash outlay by the Company.
However, the Company believes it currently has sufficient borrowing capacity
under its Revolving Credit Facility to fund these guaranties, if required, as
well as meet its other borrowing needs for the foreseeable future.
Restructured Accounts Receivable - For many years, the Company
has from time-to-time offered extended credit terms to certain of its
customers, including converting trade receivables into longer term notes
receivable. This practice became more prevalent during recent years,
particularly in the southern California market area where many of the
Company's customers have been adversely affected by the prolonged recession
in the construction industry in that region. Four such customers were
indebted to the Company at June 30, 1995 in the amount of $16.7 million.
In February 1995, one of the four customers filed for protection
under Chapter 11 of the United States Bankruptcy Code and the Company is
presently evaluating its options for collection of outstanding balances.
Also in February 1995, a second of these four customers restructured its debt
as a result of which the Company became a secured creditor of this customer.
Negotiations are currently in progress with the third customer in this group,
of which the Company is also a secured creditor, to restructure its debt.
The fourth member of the group is in compliance with the terms of its
agreement with the Company.
In the opinion of management, the Company is adequately reserved
for credit risks related to its potentially uncollectible receivables.
However, the Company continues to assess its allowance for doubtful accounts
and may increase or decrease its periodic provision for doubtful accounts as
additional information regarding the collectibility of these and other
accounts become available.
Claims for Indemnification - Prior to the sale of the Company's
then oil and gas subsidiary, Pelto Oil Company (Pelto) in 1989 to Energy
Development Corporation (EDC), Pelto entered into certain gas settlement
agreements, including one with Transcontinental Gas Pipe Line Corporation
(Transco). The Minerals Management Service (MMS) of the Department of the
Interior has reviewed the 1988 agreement Pelto entered into with Transco to
determine whether a payment to Pelto thereunder is associated with Federal or
Indian leases and whether, in its view, any additional royalties may be due
as a result of that payment. In late December 1993, the Company was notified
by EDC that EDC was exercising its indemnification rights under the 1989
stock purchase agreement for Pelto with respect to this matter. By letter
dated September 30, 1994, the MMS's Houston Compliance Division advised the
Company that it had determined that a $5.9 million payment made by Transco to
Pelto was for a Contract Buy-Down and was royalty bearing. The letter
directed the Company to compute and pay royalties on the $5.9 million sum.
It also indicated that upon receipt of the Company's payment, late payment
charges would be computed and assessed from May 1, 1987. On October 30,
1994, the Company timely filed its notice of appeal of the MMS directive,
thereby staying compliance with the letter. On December 30, 1994, the
Company filed with the MMS its statement of reasons supporting its appeal.
The Company disagrees with the MMS' determination; however, if
the MMS' determination as to the $5.9 million dollar payment to Pelto is
ultimately upheld, the Company could have liability for royalty on that sum,
plus late payment charges.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
(a) The information appearing under "Management's Discussion and
Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources - Known Events, Trends and
Uncertainties - Environmental Matters" is incorporated hereunder
by reference, pursuant to Rule 12b-23.
(b) The Company owns two inactive CKD disposal sites in Ohio that
were formerly owned by a division of USX Corporation (USX). In
September 1993, the Company filed a complaint against USX
alleging that with respect to the larger of these two sites (USX
Site), USX is a potentially responsible party and therefore
jointly and severally liable for costs associated with cleanup of
the USX Site. (Southdown, Inc. v. USX Corporation, Case No. C-3-
93-354, U.S. District Court, Southern District of Ohio Western
Division). On July 13, 1994, the Magistrate Judge issued a
Supplemental Report and Recommendation recommending that a USX
motion to dismiss be denied in its entirety, reconfirming his
previous recommendation. On February 27, 1995, the District
Judge affirmed the Magistrate Judge's recommendation that the USX
motion to dismiss be denied. USX and the Company are continuing
their settlement discussions. In this regard, in April 1995, the
Company and USX executed an agreement whereby USX would reimburse
the Company for half of certain costs already incurred by the
Company at the USX Site and the Company and USX would jointly
fund the initial project of a phased approach to investigating
and remediating the problems at the USX Site. The court has
granted a jointly requested stay of litigation until October 6,
1995.
(c) In late August 1993, the Company was notified by Energy
Development Corporation (EDC), the 1989 purchaser of the common
stock of the Company's then oil and gas subsidiary, Pelto Oil
Company (Pelto), that EDC was exercising its indemnification
rights under the 1989 stock purchase agreement with respect to a
Department of Energy (DOE) Remedial Order regarding the audit of
crude oil produced and sold during the period September 1973
through January 1981 from an offshore, federal waters field in
which the Company's oil and gas subsidiary owned an interest.
The DOE alleged certain price overcharges and sought to recover a
total of $68 million in principal and interest from Murphy Oil
Corporation (Murphy), as operator of the property. Murphy
estimated the Company's share of this total to be approximately
$4 million. On January 24, 1994, the presiding Administrative
Law Judge at the Federal Energy Regulatory Commission (FERC)
rendered a favorable decision for Murphy, materially reducing the
amount it potentially owed to the DOE. This decision also had
the effect of precluding the DOE from recovering from Murphy for
any alleged overcharges attributable to Pelto's in-kind
production. In late July 1994, Murphy notified the Company that
it had settled with the DOE by agreeing to pay $10.7 million and
that it would contact the Company later concerning the Company's
alleged share of this amount. The Company advised Murphy that it
does not accept liability for any portion of the settlement
amount paid to the DOE other than its pro rata share of
attorney's fees, which the Company has paid. On April 12, 1995,
Murphy filed a complaint against the Company in the U.S. District
Court for the Southern District of Texas, Houston Division
(Murphy Exploration & Production Company v. Southdown, Inc. -
Case No. H-95-1049) alleging that the Company is liable for the
Company's pro rata share of the $10.7 million payment made to the
DOE by Murphy in its capacity as operator of the property.
Murphy alleges this amount is at least $634,487 and also seeks
attorney s fees.
(d) In late 1988, Southern Prestressed, Inc. (SPI), a wholly owned
subsidiary of Lohja, Inc., was designated the Buyer in an
Agreement for Sale of Properties (Agreement) whereby certain
prestressed concrete product plants owned and operated by the
Company were acquired. On June 30, 1995, SPI filed suit against
the Company (Southern Prestressed, Inc. v. Florida Mining &
Materials Concrete Corp. and Southdown, Inc., Case No. C95-2217,
Thirteenth Judicial Circuit Court, Hillsborough County, Florida)
alleging environmental contamination at certain of the facilities
SPI acquired from the Company and seeking compensation under the
indemnification provisions of the Agreement.
(e) In Jack Blair, et al. vs. Ideal Basic Industries, Inc., United
Cement, Lime, Gypsum and Allied Workers International Union, and
Dixie Cement Company (Chancery Court of Knox County, Tennessee,
No. 03A1-CH-00029), the plaintiffs are fifteen former employees
of Ideal Basic Industries, Inc. (Ideal), and the defendants are
Ideal, Dixie Cement Company (Dixie) (a former subsidiary of Moore
McCormack Resources Inc. which was acquired by the Company in
1988), and the United Cement, Lime, Gypsum and Allied Workers
International Union (Union). The plaintiffs' claims arise out of
a December 1983 transaction in which Dixie purchased a cement
plant from Ideal. Among other things, the plaintiffs allege that
they were not hired by Dixie because of their ages, that their
retirements were not voluntary because they were induced to
retire through factual misrepresentations made by Ideal
employees, allegedly acting as agents of Dixie, as to their
retirement benefits and Dixie's plans to rehire former Ideal
employees, and that Dixie induced Ideal to breach its collective
bargaining agreement with the Union. Dixie has assumed the
defense of Ideal with respect to the claim under Section 301 of
the National Labor Relations Act based on the indemnification
provision of the agreement pursuant to which the Knoxville plant
was acquired. The plaintiffs are seeking compensatory damages
(including back pay and benefits), liquidated damages (under the
federal age discrimination statute), punitive damages, treble
damages (under the same statute prohibiting interference with
contracts), interest and attorney's fees.
In December 1992, the trial court granted summary judgment in
favor of Dixie on all claims against Dixie. However, in November
1994, the Tennessee Court of Appeals reversed the summary
judgment order, and remanded the case to the trial court. In
January 1995, Dixie filed an application for an appeal by
permission to the Supreme Court of Tennessee. In early May 1995,
the Supreme Court of Tennessee denied Dixie's application and the
case will be returned to the Chancery Court of Knox County,
Tennessee for trial. No trial date has been set.
Item 5. Other Information
Mr. G. Walter Loewenbaum II, after having served as a member of
the Company's Board of Directors for 20 years and as Chairman of the Board of
Directors from 1987 to 1994, has advised the Company of his resignation from
the Board.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
11 Statement of Computation of Per Share Earnings
27 Financial Data Schedule
99.1 Agreement dated March 1, 1995 by and between the Company and
Cement, Lime and Gypsum Worker's Division Boilermaker's
Union, Local Lodge No. D140
(b) Reports on Form 8-K
On June 2, 1995, the Company filed a Current Report on Form 8-K
reporting the results of matters submitted to a vote of the
Shareholders of the Company at its Annual Meeting on May 18,
1995, namely the re-election of three existing directors to the
Company's Board of Directors and the ratification of the
appointment of Deloitte & Touche LLP as the independent auditors
for the fiscal year ending December 31, 1995. The Company also
reported on the resignation of a Director to re-enter the private
practice of law.
No other reports on Form 8-K were filed during the quarter ended
June 30, 1995.
<PAGE>
SIGNATURES
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 thereunto duly authorized.
SOUTHDOWN, INC.
-------------------------------
(Registrant)
Date: August 9, 1995 By: JAMES L. PERSKY
--------------------------
James L. Persky
Executive Vice President-
Finance & Administration
(Principal Financial Officer)
Date: August 9, 1995 By: ALLAN KORSAKOV
-------------------------
Allan Korsakov
Corporate Controller
(Principal Accounting Officer)
Exhibit 11
<TABLE>
SOUTHDOWN, INC. AND SUBSIDIARIES
STATEMENT OF COMPUTATION OF PER SHARE EARNINGS
(In millions, except per share amounts - Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ------------------
1995 1994 1995 1994
------- ------- ------- ------
<S> <C> <C> <C> <C>
Earnings (loss) for primary earnings
per share:
Earnings from continuing
operations before
preferred stock dividends $ 13.60 $ 12.10 $ 19.70 $ 10.80
Preferred stock dividends (2.50) (2.40) (4.90) (4.50)
Earnings from continuing
operations 11.10 9.70 14.80 6.30
Loss from discontinued
operations, net of
income taxes - (1.10) - (2.00)
--------- ---------- --------- ---------
Net earnings for primary earnings
per share $ 11.10 $ 8.60 $ 14.80 $ 4.30
--------- ---------- --------- ---------
--------- ---------- --------- ---------
Earnings (loss) for fully diluted
earnings per share:
Earnings from continuing
operations before
preferred stock dividends $ 13.60 $ 12.10 $ 19.70 $ 10.80
Antidilutive preferred stock
dividends - - (2.50) (4.50)
--------- ---------- --------- ---------
Earnings from continuing operations 13.60 12.10 17.20 6.30
Loss from discontinued
operations, net of income
taxes - (1.10) - (2.00)
--------- ---------- --------- ---------
Net earnings for fully diluted
earnings per share $ 13.60 $ 11.00 $ 17.20 $ 4.30
--------- ---------- --------- ---------
--------- ---------- --------- ---------
Average shares outstanding:
Common stock 17.30 17.20 17.30 17.20
Common stock equivalents from
assumed exercise of stock
options and warrants
(treasury stock method) 0.30 0.70 0.20 0.70
--------- ---------- --------- ---------
Total for primary earnings per
share 17.60 17.90 17.50 17.90
Other potentially dilutive
securities:
- additional common stock
equivalent from assumed
exercise of stock options
and warrants at ending
market price - - 0.10 -
- assumed conversion of Series
A convertible preferred
stock at one-half share of
common stock 1.00 1.00 1.00 1.00
- assumed conversion of Series
B convertible preferred
stock at 2.5 shares of
common stock 2.30 2.30 2.30 2.40
- assumed conversion of the Series D
convertible preferred
stock at 1.51 shares of common
stock 2.60 2.60 2.60 2.20
--------- ---------- --------- ---------
Total for fully diluted earnings per
share 23.50 23.80 23.50 23.50
Less: Antidilutive securities
Series A preferred stock - - - (1.00)
Series B preferred stock - - - (2.40)
Series D preferred stock - - (2.60) (2.20)
--------- ---------- --------- ---------
23.50 23.80 20.90 17.90
--------- ---------- --------- ---------
--------- ---------- --------- ---------
Earnings (loss) per share:
Primary
Earnings from continuing operations $0.63 $0.54 $0.85 $0.35
Loss from discontinued operations,
net of income taxes - (0.06) - (0.11)
--------- ---------- --------- ---------
$0.63 $0.48 $0.85 $0.24
--------- ---------- --------- ---------
--------- ---------- --------- ---------
Fully diluted
Earnings from continuing operations $0.58 $0.51 $0.83 $0.35
Loss from discontinued operations,
net of income taxes - (0.05) - (0.11)
--------- ---------- --------- ---------
$0.58 $0.46 $0.83 $0.24
--------- ---------- --------- ---------
--------- ---------- --------- ---------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's consolidated balance sheet as of June 30, 1995 and the
related statement of consolidated earnings and is qualified in its
entirety by reference to such statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 9
<SECURITIES> 0
<RECEIVABLES> 91
<ALLOWANCES> 9
<INVENTORY> 79
<CURRENT-ASSETS> 184
<PP&E> 890
<DEPRECIATION> 321
<TOTAL-ASSETS> 908
<CURRENT-LIABILITIES> 91
<BONDS> 228
<COMMON> 22
0
152
<OTHER-SE> 179
<TOTAL-LIABILITY-AND-EQUITY> 908
<SALES> 274
<TOTAL-REVENUES> 274
<CGS> 204
<TOTAL-COSTS> 231
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13
<INCOME-PRETAX> 29
<INCOME-TAX> 10
<INCOME-CONTINUING> 20
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20
<EPS-PRIMARY> 0.85
<EPS-DILUTED> 0.83
</TABLE>
Exhibit 99.1
AGREEMENT
between
DIXIE CEMENT COMPANY
A Southdown Company
and the
CEMENT, LIME AND GYPSUM WORKER'S DIVISION
BOILERMAKER'S UNION, LOCAL LODGE NO. D140
AFL-CIO
1995 - 2000
Knoxville, Tennessee<PAGE>
INDEX
Article Page
Access to Plant XXV
Agreement I
Benefits XXVIII
Bulletin Boards VI
Check-Off XXIII
Copies XXIX
Core Concept III
Extent of Agreement V
First Aid and Medical Service XIX
Funeral Leave XXVI
Grievance Procedures-Arbitration XVIII
Groups and Pay Rates
Holidays XII
Hour of Work and Shift Differential XIV
Incapacitated Employee VIII
Job Bidding XXII
Jury & Witness Duty X
Layoffs and Recall XXIV
Leave of Absence XVII
Management Rights IV
Meetings VIII
Military Leave XXVII
Non-Bargaining Unit Employees XIII
Non-Discrimination IX
Overtime Equalization XVI
Pay Procedures - Schedule A
Safety and Welfare XX
Savings Clause XXX
Seniority VII
Strikes and Lockouts XXI
Term of Agreement XXXI
Union and Company Cooperation II
Vacations XI
Wage Rates and Job Groups XV
2<PAGE>
ARTICLE I - AGREEMENT
Section 1. This Agreement is entered into this 23rd day
of March, 1995, for the purposes of maintaining harmonious
relations and close cooperation between Dixie Cement Company
concerning its plant and quarry at Knoxville, Tennessee, only,
hereafter called the "Company" and Cement, Lime and Gypsum
Worker's Division, Boilermaker's Union, Local Lodge No. D140,
affiliated with the AFL-CIO, hereinafter called the "Union".
Section 2. The term "Employee" as used in this Agreement
shall include all production and maintenance employees including
leadmen, packing and loading, quarry, and laboratory, but
excluding all clerical employees, guards and supervisors as
defined in the Act.
Section 3. The Company recognizes the Union as the sole
bargaining agent for its employees as defined in Section 2 above,
who works at its plant and quarry at Knoxville, Tennessee only.
Section 4. The Company and the Union agree that there
shall be no discrimination, interference, restraint or coercion
by the Company, the Union or any of their agents against any
employee because of membership or non-membership in the Union.
Section 5. The union members shall refrain from union
solicitation on company time.
Section 6. As used in this Agreement, words denoting
gender such as "he" or "his" shall also be applicable to female
employees.
ARTICLE II - UNION AND COMPANY COOPERATION
Section 1. The Union agrees that it will cooperate with
the Company in all matters of industrial relations including
carrying out Equal Employment Opportunity obligations and will
support the Company's efforts to assure a fair day's work on the
part of its members and that it will actively strive to eliminate
absenteeism and other practices which restrict production. It
further agrees that its member will abide by the rules of the
Company in its effort to prevent accidents, to eliminate waste in
production, conserve materials and supplies, improve the quality
of workmanship, and strengthen goodwill between the Company and
its employees.
Section 2. The Union agrees that it will use its best
efforts to assist the Company in enhancing the competitiveness of
the Company, and augmenting or increasing revenue generation.
For example, the Union will support, through community
involvement and pro-active measures, the efforts of the Company
to obtain permits and/or other necessary certifications to
utilize alternative fuels.
Section 3. The parties hereto intend by this Agreement
to provide a stabilized and mutually beneficial relationship
between them and to insure the production of quality products on
schedule and at competitive costs during the life of this
Agreement. The Company and the Union will also establish an
3<PAGE>
active Employee Participation Program to facilitate ideas and
develop and implement programs to improve the overall operations
and enhance employee involvement.
ARTICLE III - THE CORE CONCEPT
The parties agree that the basic structure of the Company's
operation and the organization of its workforce is based on the
"Core Concept". Under the Core Concept, employees will generally
perform the "core" of the work to be done at the plant with the
remainder to be performed by substantial but various numbers and
types of outside contractors. The Company will advise the Union
of its intent to use contractors when practical. The parties
recognize that the Company is in the primary business of
manufacturing cement and other products requiring similar process
(utilizing hazardous waste as fuel). The parties further
recognize that the business is limited in scope and that the
Company should avoid, to the extent possible, getting into other
businesses such as special projects, maintenance other than
routine preventative maintenance, day to day labor pool work,
janitorial work, over the road trucking and the like, where other
business concerns may have more expertise, competence, economies
of scale or other advantages. Therefore, the Union specifically
agrees that the Company has the right to subcontract these and
other types of work where in the Company's sole judgment such
subcontracting is in the economic best interest of the Company
and its employees. It is understood and agreed that the Core
Concept does not require any specific number of employees, nor
does it cover any specific work or job classifications. Rather,
the Core Concept is a way of doing business which is designed to
increase productivity of the plant and the job security of the
employees.
It is recognized and agreed that the Company's contracting
out of bargaining unit work shall not directly result in the
layoff or termination of bargaining unit employees performing the
work to be performed by the contractor. If an employee is on
lay-off, and the employee has notified the Company in writing
that he/she is available for call in work, the Company will, when
practical, call in such laid-off employees who, in the judgment
of the Company, are qualified to perform the work needed at the
plant by telephone contact or attempted telephone contact before
bringing in a contractor to perform the needed work. The parties
also agree that there shall be no other limitations upon the
Company's use of contractors.
ARTICLE IV - MANAGEMENT RIGHTS
The Union recognizes that the management of the plant, the
direction of the working forces, including the right to hire,
discipline or discharge for just cause, the right to make, change
and enforce rules and policies (after posting) for the
maintenance of discipline, safety and productivity; the exclusive
4<PAGE>
rights to determine partial or permanent discontinuance or
shutdown of operations (the Company's only obligation when
exercising this right is to bargain with the Union over the
effects of that decision); the right to determine production
requirements and job content; the right to promote or to transfer
employees; the right to transfer and relieve employees from duty
because of lack of work or other legitimate reasons, and the
right to establish and change work schedules and duties of
employees are vested in the Company, except as otherwise provided
in the Agreement. The listing of specific rights in this
Agreement is not intended to be nor shall be considered
restrictive of or a waiver of any of the rights of management not
listed and not specifically surrendered herein, whether or not
such rights have been exercised by the Company in the past.
ARTICLE V - EXTENT OF AGREEMENT
Section 1. The parties acknowledge that during the
negotiation which resulted in this Agreement, each had the
unlimited right and opportunity to make demands and proposals
with respect to any subject or matter not removed by law from the
area of collective bargaining, and that the understandings and
agreements arrived at by the parties after the exercise of that
right and opportunity are set forth in this Agreement.
Therefore, the Company and the Union, for the life of this
Agreement, each voluntarily and unqualifiedly waives the right,
and each agrees that the other shall not be obligated to
bargaining collectively, with respect to any subject or matter
referred to or covered in this Agreement or with respect to any
subject or matter not specifically referred to or covered in this
Agreement, even though such subject or matter may not have been
within the knowledge or contemplation of either or both of the
parties at the time that they negotiated or signed this
Agreement.
Section 2. This Agreement supersedes and cancels all
prior practices and agreements, whether written or oral, unless
expressly stated to the contrary herein, and together with any
letters of understanding executed concurrently with (or after)
this Agreement constitutes the complete and entire Agreement
between the parties and concludes collective bargaining (except
as provided in the grievance and arbitration procedure) for its
term. It is further understood that in interpreting this
Agreement, the parties and/or the arbitrator in the event an
arbitrator is called upon to interpret this Agreement, shall not
refer to, utilize or rely on any past practices prior to the
execution of this Agreement and that in no event shall the
practices or procedures followed in any other plant in the
industry be referred to, utilized, or relied upon by the parties
and/or arbitrator in the event an arbitrator is called upon to
interpret this Agreement.
ARTICLE VI - BULLETIN BOARDS
5<PAGE>
Section 1. The Union agrees to post only notices
concerning elections, meetings, reports and other official union
business and notices of social and recreational activities on the
bulletin boards. A copy of each such notice will be supplied to
the plant manager at the time of its posting. The Union agrees
further that it will post no matters which are to the disinterest
of the Company. However, notwithstanding the above, it is
understood that the Company's decision concerning the use of the
bulletin boards shall be final.
ARTICLE VII - SENIORITY
Section 1. Seniority shall consist of an employee's
length of continuous service with the Company since his last date
of hire at its facility located at Knoxville, Tennessee.
Notwithstanding the above, continuous service time accumulated
with Ideal will count toward computing employee's eligibility for
vacation and for such other purpose as the parties specifically
agree to in some other portion of this Agreement. Seniority
rights are created by this Agreement and exist only to the extent
expressed herein. Seniority shall not establish any right to the
continuation of any work at the Company's facility, at any given
location, nor to the continuation of any job classification or
group, but only serves as a qualification for benefits or such
other purposes as is expressly provided for in this Agreement and
for no other purpose, and is specifically limited to this
facility and cannot be exercised elsewhere under any
circumstances.
Section 2. Each new employee shall be considered as a
probationary employee for the first three (3) months of
employment, after which his seniority shall date back to his date
of hire. There shall be no seniority among probationary
employees, and they may be laid off, discharged or otherwise
terminated at the sole discretion of the Company and without
explanation by it.
Section 3. Seniority and the employment relationship
shall be automatically terminated when an employee:
1. Is discharged.
2. Is terminated upon the permanent shutdown of the
Company's facilities. However, if the plant should be reopened
within three (3) years from the permanent shutdown of the
Company's facilities, employees on the payroll at the time of
shutdown shall be given first refusal on jobs available in order
of seniority if they are qualified.
3. Is laid off for a period of two (2) year or the length
of his seniority as of his last day of work, whichever period is
shorter. Notwithstanding the above, employees on the payroll as
of January 1, 1984 shall retain their seniority and recall rights
until recalled.
4. Voluntary quits which shall be deemed to include (i)
failure to notify the Company of the employee's intention to
return to work after lay off, within three (3) working days, and
6<PAGE>
to report to work within seven (7) working days (unless this
latter period is extended in writing by the Company) after he has
been notified by certified mail (either by delivery or attempted
delivery) at his last address appearing on the Company's records
to report to work; (ii) An absence from work for two (2)
consecutive schedule work days without reporting to the Company
unless excused by management.
Section 4. In the event that an employee is transferred to
a job within the Company, but is excluded from the bargaining
unit, said employee's seniority shall continue to accumulate for
ninety (90) days. After ninety (90) days the employee's
seniority within the bargaining unit shall cease, except for
eligibility for benefits.
Section 5. The Company will provide the Union with an
updated seniority list every six (6) months.
Section 6. Incapacitated Employee - An employee who
becomes permanently incapacitated and on the basis of competent
medical opinion, cannot perform the essential functions of his
regular job, may be placed in a vacant or other job by mutual
agreement between the Union and the Company, provided the
employee can perform the job. In placing such employee under
this provision, the parties will take into consideration the fair
p l acement of any employee who may be displaced by such
assignment.
7<PAGE>
ARTICLE VIII - MEETINGS
Section 1. The Union Committee shall consist of three
(3) employees selected by the Union members. The Union shall
inform the Company of the names of the employees on the committee
and any replacements thereafter.
Section 2. It is understood that from time to time,
representatives of the Company will meet with three (3) members
of the committee in connection with step two and three of the
grievance procedure and for such other purposes contemplated by
the Agreement. It is further agreed that two (2) committee
members will be compensated at their regular hourly rate for time
lost from their regular schedule for attendance at step two and
three of the grievance procedure and up to three (3) committee
members will be paid for other such meetings which occur during
their regular schedule. It is also agreed that members of the
committee will not be compensated for attendance at negotiations
for a new contract.
ARTICLE IX - NON-DISCRIMINATION
The parties agree to apply the provisions of this Agreement
to all employees without regard to race, color, national origin,
sex, age, religion, veteran status or handicap. The Company and
the Union agree to comply with the provisions of The Americans
with Disabilities Act (ADA).
ARTICLE X - JURY & WITNESS DUTY
The Company will grant employees time off for jury and
witness duty. When an employee is called for jury or witness
duty, he will be paid the difference between the fee he receives
for such service and his hourly rate for actual time lost from
working his regularly scheduled shift(s) not to exceed eight (8)
hours per day (10 hours if working 4 day per week 10 hour shift)
or forty (40) hours per week.
The employee is responsible for providing documentation from
the court showing jury or witness duty. Witness duty is defined
as being subpoenaed as a witness in an action when the employee
or the Union or the Company are neither the plaintiff nor the
defendant.
ARTICLE XI - VACATIONS
Section 1. Each employee meeting all the requirements of
Section 2 of this Article shall be eligible for vacation in
accordance with the following schedule:
After completion of one (1) year of service with the
Company since the employee's last date of hire -- two
(2) weeks vacation during the calendar year.
After completion of six (6) years of service with the
Company since the employee's last date of hire -- three
8<PAGE>
(3) weeks of vacation during the current calendar year.
After the completion of fifteen (15) years of service
with the Company since the employee's last date of hire
-- four (4) weeks of vacation during the current
calendar year.
Continuous service with the Company shall include continuous
service accumulated with Ideal Basic Industries.
Section 2. An employee shall receive a vacation
according to Section 1 of this Article provided that such
employee works at least 1500 hours during the current calendar
year. Vacation pay will be based on forty (40) hours per week at
the employee's regular hourly rate at the time he takes his/her
vacation.
In the event an employee has not worked at least 1500 hours
during the calendar year, he shall receive vacation on a pro rata
basis of one twelfth (1/12) vacation credit for each 125 hours
worked. During the first year of service with the Company, an
employee shall receive vacation on a pro rata basis on one-
twelfth (1/12) vacation credit for each calendar month or part of
a calendar month worked during the calendar year.
Section 3 In the event an employee is laid-off, discharged,
dies or retires without taking the vacation for which he is
eligible, he or his estate shall receive remaining accrued
vacation pay or a pro rata part of the vacation pay to which he
would have been entitled in accordance with Section 2 of this
Article. (125 hour formula)
Section 4. Vacations will not be cumulative, but so far
as practical will be granted at times most desired by employees,
with the final right to allotment of vacation period exclusively
reserved to the Company in order to ensure the orderly operation
of the plant. When requested vacation periods conflict,
preference shall be given to the employee having the most
continuous service (including continuous service accumulated with
the Ideal Basic Industries). In the event a paid holiday falls
during an employee's vacation period, the employee shall receive
holiday pay in addition to vacation pay or upon two (2) weeks
notice to the Company, the Company may, in its exclusive
judgment, allow the employee to take an additional day's vacation
in lieu of holiday pay.
ARTICLE XII - HOLIDAYS
Section 1. The Company recognizes the following nine (9)
paid holidays per year: New Year's Day, Good Friday, Memorial
Day, 4th of July, Labor Day, Thanksgiving, Friday after
Thanksgiving, Christmas Eve, and Christmas Day. (Veterans Day,
will be added as a tenth paid holiday effective March 1, 1999.)
Section 2. Holiday pay will be equal to eight (8) hours
pay at the employees straight time hourly rate. Such holiday pay
will not be paid if the employee is absent from work on the
holiday if scheduled to work on the holiday or if the employee is
absent on the scheduled day preceding or following the holiday
9<PAGE>
unless such absences are excused by Management. In no event
shall an employee receive holiday pay for a holiday unless an
employee has also actually worked during the fifteen (15) day
period immediately preceding or immediately following the
holiday. If an employee is required to work on a holiday, he
will receive (8) hours pay for the holiday plus the appropriate
regular hourly rate for hours actually worked. If the employee
is regularly scheduled to work on the holiday, then said holiday
pay shall be counted toward the calculation of overtime pay paid
for working in excess of forty (40) hours per week. However,
employees whose off-day happens to fall on a holiday will receive
an additional eight (8) hours pay for the holiday but the holiday
pay will not be counted toward the calculation overtime pay paid
for working in excess of forty (40) hours per week.
Section 3. If an employee is working a regular four (4)
day per week ten (10) hour per day schedule during the holiday
week, then hourly pay will be ten (10) hours pay at the
employee's straight time hourly rate.
ARTICLE XIII - NON BARGAINING UNIT EMPLOYEES
It is understood and agreed between the parties that the
primary function of the foremen is to supervise. However, the
parties also agree that, from time to time, foremen and other
non-bargaining unit employees of the Company may perform
production and maintenance work covered by this Agreement as long
as such work does not permanently displace a bargaining unit
employee.
ARTICLE XIV - HOURS OF WORK AND SHIFT DIFFERENTIAL
Section 1. During the life of this Agreement, it is
understood that the work day shall be the twenty-four (24) hours
commencing with the beginning of the first shift and the work
week shall be the seven (7) days beginning with the first shift
on Monday.
Section 2. Forty (40) hours shall be considered the
normal work week. One and one-half (1-1/2) times the employee's
regular hourly rate shall be paid for all hours worked in excess
of forty (40) hours per week. One and one-half (1-1/2) times the
employee's regular hourly rate shall be paid for all hours worked
in excess of eight (8) per day [ten (10) hours if the employee is
working a regular four (4) day per week ten (10) hour per day
schedule].
If an employee is required to work the actual holiday, he
will receive his holiday pay plus one and one-half (1 1/2) times
his regular hourly rate for hours worked on the actual holiday.
Hours for which an employee is paid at one and one-half (1 1/2)
times his hourly rate for working on a holiday will not be
counted toward the calculation of overtime received for working
in excess of forty (40) hours per week.
Effective March 1, 1998, two (2) times the employee's
10<PAGE>
regular hourly rate shall be paid for all hours worked in excess
of twelve (12) per day [fourteen (14) hours per day if the
employee is working a regular four (4) day per week ten (10) hour
per day schedule].
Daily overtime shall not be counted toward the calculation
of overtime pay received for working in excess of forty (40)
hours per week.
Section 3. When an employee has left the plant and is
called back to work at times other than his scheduled work hours
or hours consecutive with his scheduled work hours, he shall
receive a minimum of four (4) hours pay at one and one-half (1-
1/2) his regular hourly rate in addition to any pay for regular
scheduled hours. However, such hours shall not be counted toward
the calculation of overtime pay paid for working in excess of
forty (40) hours per week. It is understood that if an employee
is called back to work, he may be required to perform any duties
in connection with breakdowns or emergency situations in addition
to the duties for which he was called out.
11<PAGE>
Section 4. Overtime Meals - The following procedures
apply to the overtime meal policy:
1. Employees required to work unscheduled overtime at the
end of their regular work day in excess of two and one-half
(2 1/2) hours will be provided a meal if they so desire.
2. Any time an employee is called to work without 12 hours
notice and works in excess of 4 hours the Company will
provide a meal if the employee so desires. The Company will
also supply a meal for every 4 consecutive hours worked
thereafter.
3. If overtime is scheduled in advance on an employees day
off, or on other scheduled periods, the employee is expected
to provide meals to cover the entire work period.
4. The price of the meals (including tax) will be limited
to $11.00 for lunch and dinner and $5.00 for breakfast.
Section 5. Scheduled shift employees on the second and
third shifts shall receive a shift differential of fifty cents
(50 cents) per hour in addition to their regular hourly rate of pay
for all hours worked on the second and third shifts.
(1) All regularly scheduled work beginning at 5:00 a.m. to
11:00 a.m. inclusive, shall be considered first shift
work.
(2) All regularly scheduled work beginning at 11:00 a.m. to
7:00 p.m. inclusive, shall be considered second shift
work.
(3) All regularly scheduled work beginning at 7:00 p.m. to
5:00 a.m. inclusive, shall be considered third shift
work.
Employees will receive a shift differential whenever they
are scheduled to work on the second or third shift for a period
in excess of one week.
Section 6. The Company will continue to make an effort
to avoid requiring employees to work in excess of four (4) hours
beyond their regularly scheduled shift. However, the parties
recognize that in the case of emergency or breakdown, such work
in excess of four (4) hours beyond their regularly scheduled
shift may be necessary.
Section 7. Employees presently being paid "grandfather
rates" (in excess of the maximum rate for their group) will
continue to receive at least the "grandfather rate" for the term
of this Agreement unless said employees are awarded a job in
another group in accordance with the job bidding procedure.
Section 8. Reporting Pay - If an employee reports for
work at his/her scheduled time and is sent home because no work
is available, the employee will be paid fours (4) hours at the
straight time rate. Any such employee who works but is sent home
before the end of the shift will receive either four (4) hours
pay or pay for the actual time worked whichever is greater. This
provision shall not apply if failure to provide work is the
result of major equipment or utility failure, or other
circumstances beyond the control of the Company.
Section 9. Schedule Changes - The Company will make
12<PAGE>
every reasonable effort to notify employees of schedules change
as soon as practical after such decision is made.
13<PAGE>
ARTICLE XV - WAGE RATES AND JOB GROUP
Section 1. It is understood and agreed that each unit
employee shall fall into one of the job groups as is set forth in
Schedule"A".
ARTICLE XVI - OVERTIME EQUALIZATION
Section 1. Overtime will be equalized as nearly as
practical over time among those employees who are qualified to
perform the work. The Company will also take into consideration
those employees who desire overtime and those employees who do
not desire overtime for equalization. However, under no
circumstances will any employee be paid for work not performed in
connection with the overtime equalization policy. It is agreed
and understood that overtime work is necessary and essential in
the Company's operations; therefore, working overtime at the
request of the Company may be required.
Section 2. The following guidelines apply to overtime
distribution:
A. Overtime hours will be maintained as equally as
practical on a calendar year basis within the various
groups.
B. Employees who prefer not to work overtime may indicate
this preference by sending a letter to the Plant Manager.
Employees who send such letter will be considered to be on
the "no list" on the January 1 or July 1 next following
receipt of the letter. Employees on the "no list" who wish
to be considered for overtime again, must send a letter to
the Plant Manager requesting this change. Employees will
then be removed from the "no list" on the January 1 or July
1 next following receipt of the letter.
C. Available overtime will be offered, whenever practical
to employees within the group with the least amount of
overtime hours who have indicated a desire to work overtime.
Should all employees within the group be asked to work
overtime and for some reason they cannot work, the least
senior available employee in the group, regardless of their
status on the "no list" will be required to work. Employees
on the "no list" will not be permitted to volunteer for
overtime work.
D. Work being performed on straight time which extends
into overtime will be offered to the employees working on
the job, regardless of their standing on the overtime list.
E. Overtime hours will be charged to an employee if an
attempt is made by management to contact the employee to
offer the overtime hours. Hours charged will be equal to
the hours charged to the employee performing the work.
F. Employees who have elected not to work available
overtime may be asked to work overtime under certain
circumstances, such as, all available employees in a group
are working and additional help is needed or efforts to
14<PAGE>
contact all other employees in the group have been exhausted
and the only person available for the overtime work are
employees on the "no list". There may be other instances in
which an employee who is on the "no list" will be asked to
work overtime. If this occurs it will be addressed on a
case by case basis.
G. Employees on the "no list" who elect at a later time to
make themselves available for overtime work, will accept the
hours of the individual with the highest number of hours on
the overtime list.
ARTICLE XVII - LEAVE OF ABSENCE
Section 1. A leave of absence for any reason other than
illness or injury may be granted at the discretion of the
Company.
Section 2. If any employee is elected to act as a
delegate to a union convention and a request in writing is given
by the union at least two (2) weeks prior to the date requested,
said employee shall be granted a leave of absence, not to exceed
thirty (30) days, to attend such convention. Such leave will be
limited to two (2) unit employees at any one time or three (3)
unit employees if the unit ever exceeds 101 employees.
Section 3. Any leave of absence granted under the
foregoing sections shall not affect the employees seniority. The
Company and the Union agree to comply with the provisions of The
Family and Medical Leave Act (FMLA).
ARTICLE XVIII - GRIEVANCE PROCEDURE-ARBITRATION
Section 1. Should differences arise between the Company
and the Union, or an individual employed by the Company, as to
the meaning and application of the provisions of this Agreement,
an earnest effort shall be made by the parties to settle such
differences promptly and in the following manner:
(1) STEP I. The Complaint, within ten (10) days of its
occurrence, or the occurrence of the matter out of which the
complaint arises, may be taken up by the employee involved, with
or without Union representation, with his foreman. The employee
shall state the specific article(s) and paragraph(s) of the
contract that is alleged to have been violated in order for the
grievance to be considered and processed.
(2) STEP II. If no satisfactory settlement is reached in
Step I, the matter shall be reduced to writing and presented to
the Plant Manager within five (5) days from the date of the
meeting with the foreman. The Union shall state the specific
article(s) and paragraph(s) of the contract that is alleged to
have been violated in order for the grievance to be considered
and processed. At the time or presentation, or within five (5)
days, the Plant Manager will meet with the Grievance Committee to
hear and discuss the grievance. The Company shall answer the
grievance in writing within five (5) days after said meeting.
15<PAGE>
(3) STEP III. If no agreement is reached in Step II, the
committee may, within five (5) days of the receipt of the above
answer, refer the matter to higher officials of the Company and
the Union, who may attend a meeting to be held within thirty (30)
days upon request.
(4) STEP IV.
a. Any grievance not settled in Step III above may be
referred to arbitration. Notice to refer a grievance to
arbitration shall be given in writing within fifteen (15) days
after being notified of the decision rendered in Step III or the
matter will be considered closed. Only one (1) grievance may be
submitted to or under review by any one (1) Arbitrator at any one
(1) time unless by the prior mutual written consent of the
parties.
b. In the event the parties are unable to agree upon an
Arbitrator within seven (7) days after arbitration is invoked,
then they shall jointly petition the Federal Mediation and
Conciliation Service, which shall submit a panel of seven (7)
qualified arbitrators, and the parties shall select a single
arbitrator from such panel. Within ten (10) days after the
receipt of such panel, the parties shall meet or confer by
telephone to select an arbitrator. From the panel, the parties
shall strike names, alternating, with the Union striking the
first name, and the remaining person will be selected. The
Arbitrator shall be appointed by mutual consent of the parties
hereto. If the arbitrators included in this panel are
unacceptable to either party, a second panel shall be requested
from the Federal Mediation and Conciliation Service and a single
arbitrator selected from this panel.
c. Any grievance referred to arbitration shall be heard as
soon as possible and a decision rendered within thirty (30) days
of the hearing or the date of postmark of the post hearing
briefs. The Arbitrator shall have no power to add or to subtract
from or change, modify or amend any of the provisions of this
Agreement. The decision rendered by the Arbitrator will be final
and binding upon the Union, the Company, the grievant, and all
the employees covered by this Agreement. The Arbitrator selected
pursuant to this Article shall interpret and apply the terms of
this Agreement; he/she shall not substitute his/her discretion
and judgment for that of the Company. If the Arbitrator finds
that a dischargeable offense was committed by the employee,
he/she shall not substitute his/her judgment for that of the
Company as to whether discharge or a more lenient penalty was
appropriate in a particular case.
d. It is expressly agreed that no Arbitrator shall have
the authority to decide any matter involving the exercise of a
right reserved to management under this Agreement.
e. Each party hereto shall pay the expense incurred in the
presentation of its own case, and the expenses incident to the
services of the Arbitrator, including the cost of the transcript,
if requested by either party or the Arbitrator, shall be shared
equally by the Company and the Union.
16<PAGE>
Section 2. Any grievance growing out of a discharge must
be submitted in writing by the aggrieved employee directly to the
Union and from the Union to the Plant Manager within seventy-two
(72) hours of the discharge (for a step three meeting to be held
within ten (10) days of the discharge) or the grievance will not
be recognized and the discharge shall be final.
Section 3. Any grievance not presented or appealed
within the time limits provided, unless the parties mutually
agree to extend the time, shall be considered settled on the
basis of the decision which was not appealed and shall be final
and binding on the parties involved.
Section 4. Grievances presented in any of the regular
steps set forth and not answered within the time specified or as
the same may be extended by mutual agreement shall be considered
appealed to the next step of the grievance procedure.
Section 5. The time limits referred to in the foregoing
paragraphs exclude Saturdays, Sundays and holidays.
ARTICLE XIX - FIRST AID AND MEDICAL SERVICE
Section 1. The Company will furnish first aid and
medical service to all of its workers for all injuries
originating in the course of their work.
Section 2. It is agreed that the Company may require a
complete medical examination by its physician before an applicant
is employed, and periodically after employment. The Company will
bear the cost of such medical examination by the Company
physician. Copies of reports of such examinations and
recommendations for treatment shall be at all times available for
reference to the employee's physician through the Company
physician.
ARTICLE XX - SAFETY AND WELFARE
Section 1. The Company will, according to its
established practice, continue to install such safety devices for
the protection of the lives and health of its employees as shall
be mutually agreed upon by its representatives and the Plant
Safety Committee. The Company will maintain lockers and
washrooms with heat, light and adequate hot water and keep the
toilets and other fixtures and floors in a sanitary condition and
supply good drinking water in the necessary plant locations.
Section 2 - SAFETY COMMITTEE PROCEDURES: The plant safety
committee is composed of up to four hourly employees, up to four
salaried employees, and the plant manager. The Plant Manager will
designate the chairman of the committee. There is one hourly
employee alternate.
The safety committee investigates all accidents of a serious
nature, or those that lead to a lost time accident. A report of
their investigations, and recommendations is submitted to the
Plant Manager, and a copy posted on the bulletin boards.
An hourly safety committee member and another Company
17<PAGE>
designee will accompany the federal MSHA inspector during the
inspections of the quarry and plant.
The safety committee is available to assist with the weekly
departmental safety meetings and various other duties as
required. Accident prevention is the goal and these employees
lead in that area.
Section 3. Safety Shoes: The Company will reimburse
employees who are required to use safety shoes for the purchase
of up to two (2) pairs safety shoes for use at the plant. The
maximum annual reimbursement for safety shoes will be $150 per
employee.
Safety Glasses: One (1) pair of prescription
safety glasses will be provided each year if needed. Lenses and
frames will be chosen from a standard selection identified by the
Company. Safety glasses damaged at work will be repaired or
replaced as deemed appropriate by the Company. The cost of the
eye exam is the responsibility of the employee.
Section 4. The Company will replace tools which are
broken or worn out prematurely while being used at the direction
of the Company.
Broken or worn out tools must be turned in or the
replacement process will not apply.
ARTICLE XXI - STRIKES AND LOCKOUTS
The Union agrees that during the term of this Agreement,
there shall be no picketing or strikes by the Union or by its
members, of any kind or degree whatsoever, or walkout, suspension
of work, slowdowns, limiting of production, or any other
interference or stoppage, total or partial, of the Company's
operations for any reason whatsoever, such reasons including, but
not limited to, unfair labor practices by the Company or any
other Employer. It is further agreed that neither the Union or
its members shall engage in the above prohibited conduct in
support of picketing, strikes or any labor dispute actions
engaged in by any other organization or person. In addition to
any other recourse or remedy available to the Company for
violation of the terms of this Article by the Union and/or any
Union member, the Company may discharge or otherwise discipline
any employee who authorizes, causes, engages in, sanctions,
recognizes, or assists in any violation of this Article. The
Company will not engage in any lockouts during the term of this
Agreement.
ARTICLE XXII - JOB BIDDING
Section 1. When the Company determines a vacancy exists,
other than a minimum pay job, the Company will post a notice of
such fact, such notice to remain posted for a period of at least
five (5) days, not including Saturdays, Sundays, or holidays.
This notice will describe the open position and will include the
job group, primary job, rate of pay, shift, hours of work, and
18<PAGE>
scheduled days off.
Section 2. Employees submitting a job bid shall be
considered in the manner provided herein in Section 22.4 and the
successful applicant's name will be posted within seven (7) days
after the bids are opened, except where testing is required for
Job Groups V and above. Said delay will not exceed ten (10)
days, unless additional time is agreed to between the Union and
Company. The successful bidder will be placed on the job within
as reasonable a time as possible from the date of posting the
award. In the event of the successful applicant' failure to
qualify in the opinion of the Company, then it is understood that
said employee is to be restored to his former position and
standing. Employees will submit their bid to their supervisor
and will be given a receipt for the bid.
Section 3. If within twenty-four (24) months following
his assignment to a new job under this procedure, an employee
applies for another new job of equal or lower classification, the
Company may, at its discretion, disregard such application. This
provision does not apply to employees successfully bidding into
the Entry Level Training Program.
Section 4. The following factors shall apply in the
awarding of all jobs:
(1) Qualification of the Applicant (which shall include:
ability to perform the work, aptitude, skills, experience,
training for the job, and attendance);
(2) Seniority;
Where qualifications are equal, seniority shall apply.
If the employee selected shall fail to qualify after a fair
trial period, in the exclusive judgment of the Company, he shall
be returned to his former position and the next bidder shall be
given consideration. If, the Company determines that none of the
employees who bid for the job meet the qualifications for the
job, the Company may hire a new employee for the job or fill the
vacancy with an employee from Group One.
Section 5. Temporary Reassignment - An employee who is
temporarily assigned by his supervisor to perform work of a
higher paid job classification on a daily basis will be paid the
rate of such higher job classification for time actually worked.
Any such employee assigned by his supervisor to perform work in
an equal or lower paid classification will be paid his regular
hourly wage rate.
Section 6. In no event shall the Company be requested or
required to post any job temporarily vacated by reason of
vacations, illness, or injury. The Company, at its discretion,
may create temporary jobs not to exceed ninety (90) calendar
days. Successful bidders bidding down or laterally on such
temporary jobs will be placed in the labor classification upon
completion of the job. Should the Company determine that any
temporary job becomes permanent, the Company shall post the job
as provided in this Article.
Section 7. Temporary Shift Assignments
A. Maintenance Work -
19<PAGE>
Due to the nature of our business and the need to ensure our
equipment is fully operational at all times, there are periods
when it becomes necessary to temporarily assign employees to
shift work. When the need arises for temporary shift
assignments, qualified employees within the classification will
be assigned by seniority to the shift of their choice as long as
openings are available. If time permits, a notice will be posted
to give employees an opportunity to express their shift
preference. Employees who do not state their shift preference
will be assigned the remaining vacant slots or shifts as needed.
B. Other Temporary Shift Assignments
Other temporary shift assignments will be made by asking for
volunteers from the classification and shift with available
employees. If there are no volunteers, the least senior,
qualified, employee from that classification and shift will be
selected.
Section 8. Knowledge, training, skill and ability gained
by temporary assignments and/or while holding jobs under the bid
system, will be given consideration in making promotions,
layoffs, or reductions in work force.
ARTICLE XXIII - CHECK-OFF
Section 1. The Company agrees to withhold Union dues
upon proper written notice from the employee. The Company shall
make such deductions from the employee's pay once a month and
remit same to the designated Union office along with a list of
employees from whom such deductions were made.
(a) Upon proper written notifications from the employee,
the Company will cease to withhold Union dues deductions. Prior
to the expiration of the resignation period as defined on the
Union Check-Off Card, the Plant Manager or his designee and the
designated Union representative shall meet in order to determine
that both parties have been duly notified of a member's intention
to resign. Both parties shall initial the letters of
resignation.
(b) The Union agrees to save the Company harmless from all
forms of liability that may arise out of or by reason of action
taken by the Company in complying with any provision of this
Article.
(c) The Union Check-Off Card shall be attached to and be
made part of this Agreement.
AUTHORIZATION FOR CHECK-OFF FROM WAGES
To:
____________________________________________________________
(Employer)
I, ________________________, an employee of
_________________________, hereby
authorize and direct my employer to deduct from my wages and
pay to the International Brotherhood of Boilermakers, Iron
20<PAGE>
Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO-
CFL, Local Lodge No. ______, (herein "Union"), an amount
equal to dues, initiation fees, and reinstatement fees fixed
by the Union. This authorization is voluntarily made in
order to pay my fair share of the Union's costs of
representing me for purposes of collective bargaining and
this authorization is not conditioned upon my present or
future membership in the Union. In addition, this
authorization is made with specific understanding that it is
not a condition of employment with my employer.
This assignment, authorization and direction shall be
irrevocable for a period of one (1) year from the date
thereof or until the termination of the collective
bargaining agreement between the employer and the Union,
whichever occurs sooner, without regard to whether or not I
am a Union member. I agree and direct that this agreement,
authorization and direction shall be automatically renewed
and shall be irrevocable for successive periods of one (1)
year or for the period of each succeeding applicable
collective bargaining agreement between the employer and the
Union, whichever shall be shorter, without regard to whether
or not I am a member of the union, unless written notice is
given by me to the employer and the local Union Secretary-
Treasurer by registered mail not more than twenty (20) days
and not less than ten (10) days prior to the expiration of
each period of one (1) year or of each applicable collective
bargaining agreement between the employer and the
Union, whichever occurs sooner.
"Union dues, contributions or gifts to Lodge ____, International
Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths,
Forgers and Helpers, AFL-CIO-CFL are not tax deductible as
charitable contributions for Federal Income Tax purposes.
However, they may be deductible as ordinary and necessary
business expenses."
21<PAGE>
_________________________________
Name (Signature)
_______________ _______________
S.S.N. Date
ARTICLE XXIV - LAYOFFS AND RECALL
Section 1. If the Company declares that the number of
employees in the Group will be reduced or eliminated, the
decision as to which employee or employees in the Group will be
removed from that Group shall be made in accordance with the
following procedure. The following factors shall be considered
by management in determining which employee in the Group will be
removed:
(a) Seniority.
(b) Qualifications (which shall include: ability to
perform the work, aptitude, skills, experience,
training for the job, and attendance of the employee).
(c) Requirements of the job.
Where qualifications (b) and (c) are relatively equal,
seniority will prevail. In the event employees are tentatively
chosen for removal from a Group out of their order of seniority,
the Company will consult with the Union Committee concerning said
decision prior to its announcement and implementation. The
Company will consider all factors put forward by the Union
Committee before arriving at a final decision. However, it is
understood that the final decision concerning qualifications for
purposes of this article shall be made exclusively by the
Company.
Any employee so removed from a Group may exercise his move
into any other Group for which he is qualified. If this
procedure results in the Company declaring that the number of
employees in the Group to which the employee has transferred must
be reduced, the same procedure shall be utilized until Group II
is reached. If the Company declares that the number of employees
in Group II will be reduced, the employee with the least
seniority in Group II will be placed in Group I.
If the Company declares that the number of employees in
Group I will be reduced, the employee with the least seniority in
Group I may then be laid-off.
Employees will be recalled in reverse order.
Section 2. In the event the Company must have a plant
shutdown due to business conditions, employees retained to
perform necessary work shall be selected on the following basis:
(a) Senior employees, whose regular jobs are not required,
shall have the option of accepting available work for which they
are qualified, or accepting lay-off, except that,
(b) The Company has the right to require that senior
employees work during the shutdown if there are no junior
employees with the necessary qualifications to perform the
22<PAGE>
required work.
"Qualified" for purposes of this Section shall mean that the
employee must be able to perform all duties connected with the
job within two (2) work weeks. It is further understood that the
Company may allow the employee to demonstrate his abilities to
perform as required. The Company's decision concerning
qualification as used in this Section is subject to the grievance
procedure.
ARTICLE XXV - ACCESS TO PLANT
The Company agrees that during all reasonable times when the
plant is operating, a duly accredited representative of the Union
shall be entitled to access to the plant during the regular
working hours for the purpose of assisting in the adjustment of
pending grievances, provided that the designated representative
of the Company is properly notified in advance and the Union
representative establishes proper identification. If it is
necessary to go into the work area of the plant (for example, to
view a particular operation relative to a pending grievance),
then the appropriate Company official shall accompany the Union
representative so that both parties see the same thing so as to
aid in resolving the grievance.
ARTICLE XXVI - FUNERAL LEAVE
An employee, upon notification to the Company of the death
of his/her spouse, daughter, son, step-daughter, or stepson,
grandchildren, father, mother, father-in-law, mother-in-law,
stepfather, stepmother, grandparent, spouse grandparent, brother,
half-brother, sister, half-sister, brother-in-law, sister-in-law,
daughter-in-law, son-in-law shall be granted the next three (3)
scheduled working days off with pay (up to four (4) days if the
employee is required to travel beyond a radius of 500 miles to
attend the funeral) beginning within 4 days of the death.
Payment for such time will be on the basis of eight (8) hours per
day (10 hours if working a 4 day per week 10 hour shift schedule)
at the employees regular straight time hourly rate. To be
eligible for benefits under this Article the employee must supply
reasonable documentary evidence of the covered death and family
relationship when requested and attend the funeral or service.
ARTICLE XXVII - MILITARY LEAVE
Active employees with one (1) year seniority and who are in
the reserve or any branch of military service, including the
National Guard, who are required to attend a summer camp as part
of their reserve obligation, shall receive from the employer the
difference between the amount of pay received for such camp and
their regular straight time hourly rate of pay for up to a
maximum of two (2) weeks pay per calendar year at a maximum of
forty (40) hours per week. Employees required to attend such
23<PAGE>
summer encampment shall give the Company notice of the encampment
as soon as possible but in no case later than two (2) weeks prior
to the date the employee is required to report to summer
encampment.
ARTICLE XXVIII - BENEFITS
During the term of this Agreement the Company will provide
employees with participation in the Southdown, Inc.
Medical/Dental Benefit Plan, the Southdown, Inc. Life Insurance
and Accidental Death and Dismemberment Plan, the Southdown, Inc.
Long Term Disability Plan, the Southdown, Inc. Pension Plan, the
Southdown, Inc. Retirement Savings Plan, the Southdown, Inc.
Retiree Medical Plan and the Southdown, Inc. Voluntary Life
Insurance Plan, and continue said plans for the life of this
Agreement unless the parties agree mutually to modify the
provisions of these plans.
The Company will continue its short term disability program
for Dixie hourly employees for the term of the Agreement.
Employees eligible for short term disability will receive thirty
dollars ($30.00) per work day for the second through the fifth
work day of absence and fifty dollars ($50.00) per work day
($250.00 - 5 day per week limit) for up to five (5) months from
the beginning of the disability.
ARTICLE XXIX - COPIES
Section 1. The Labor Agreement, and Summary Plan
Descriptions for the Pension Plan, 401K, and Insurance Plan will
be printed at Company expense. The Company will provide each
member with a copy of the booklet.
ARTICLE XXX - SAVINGS CLAUSE
If any of the provisions of this Agreement conflict with any
applicable federal, state, or other law or administrative action
now or hereafter in force, such provisions shall be null and void
and inoperative as to that conflict of law and all other
provisions of this Agreement shall remain in full force and
effect.
24<PAGE>
ARTICLE XXXI - TERM OF AGREEMENT
After ratification by the members of the Local Union, this
Agreement shall become effective and remain in force and effect
and be binding upon the parties hereto from March 1, 1995, to and
including February 28, 2000, and it shall continue to be in full
force and effect thereafter from year to year until either party
on or before December 28, of any year, beginning 1999, gives
written notice to the other party of its desire or intention
either to alter and modify or terminate the contract. If such
notice is given, the parties hereto shall begin negotiations not
later than January 15 in such year.
IN WITNESS WHEREOF, the Union has caused this Agreement to
be executed in its name, after due authorization and the Company
has caused it to be executed in its name, by its duly authorized
representatives.
INTERNATIONAL BROTHERHOOD OF DIXIE CEMENT COMPANY
BOILERMAKERS, CEMENT, LIME,
GYPSUM AND ALLIED WORKERS,
DIVISION LOCAL LODGE NO. D140
By: ------------------- By: --------------------
J. C. Todd Bernard M. Reuland
By: ------------------ By: -------------------
Gerald E. Breeden Lawrence L. Hoffis
By: ----------------- By: ------------------
Gary L. Bell Herman J. Wurth
By: ------------------ By: ---------------------
David A. Womack Thomas H. Shields, Jr.
Signed this 23rd day of Signed this 23rd day of
March, 1995. March, 1995.
25<PAGE>
SCHEDULE A - PAY PROCEDURES
A1 - GAINSHARING: Over the term of the Agreement, employees will
participate in a Gainsharing Program developed by the Company.
A2 - JOB TRANSFERS: If an employee is temporarily transferred to work in
another group, his pay and training credits will be established as follows.
He will be evaluated by the foreman he has been working for, the foreman he
will be working for, and the Plant Manager. They will review his skill,
ability, education, and plant experience in relationship to the job and place
him within the wage range for that group accordingly. If he has no skill,
ability, education, or experience to offer, he will begin at the starting
rate.
A3 - Leadpersons will be paid $1.50 per hour in addition to their normal rate
of pay while they are designated as leadpersons to perform certain quasi-
supervisory tasks incidental to their normal hands-on-work. Leadpersons will
be selected based on qualifications required for a specific area and
seniority.
GROUPS & PAY RATES FOR REGULAR HOURLY EMPLOYEES
Pay 1-MAR-95 1-MAR-96 1-MAR-97 1-MAR-98 1-MAR-99
Groups Pay Rates Pay Rates Pay Rates Pay Rates Pay Rates
I $ 10.70 $ 11.00 $ 11.20 $ 11.55 $ 11.80
II $ 13.90 $ 14.25 $ 14.50 $ 14.90 $ 15.20
III $ 14.90 $ 15.25 $ 15.55 $ 15.95 $ 16.30
IV $ 13.75 $ 14.40 $ 15.05 $ 15.70 $ 16.35
V $ 14.90 $ 15.25 $ 15.60 $ 16.00 $ 16.40
VI $ 15.75 $ 16.10 $ 16.45 $ 16.85 $ 17.25
VII $ 15.85 $ 16.20 $ 16.55 $ 16.95 $ 17.35
VIII $ 15.90 $ 16.25 $ 16.60 $ 17.00 $ 17.40
26<PAGE>
PAY GROUPS & PRIMARY JOBS
Group Primary Jobs
I. Yard A. Laborer
II. Packing/Shipping & Stores A. Packer / Loader
Bulk Loader
Bin Puller
Scale Operator
B. Issue Clerk
III. Quarry A. Truck Driver
Front End Loader
Grader / Water Truck
Crusher Operator
Dozer Operator
Excavator
B. Mechanic Helper
IV. Production A. Production Utility
B. HWF Utility
V. Laboratory Control Chemist
Physical Tester
VI. Mechanical Maintenance A. Repair Mechanic
Repair / Lubricator
B. Diesel Mechanic
VII. Electrical Maintenance A. Electrician
VIII. CRA A. CRA
Relief CRA / Utility
Note: Overtime will be equalized within each subgroup as referenced
in Article XVI - Overtime Equalization.
27<PAGE>
<TABLE>
DIXIE CEMENT
PROGRESSION
PLAN
MARCH 1 1995
<CAPTION>
START-
PAY GROUP & ING
12 18 24 30 36
POSITIONS RATE 6 MOS. MOS. MOS. MOS. MOS. MOS.
<S> <C> <C> <C> <C> <C> <C> <C>
PAY GROUP I
YARD $7.70 $9.20 $10.70
PAY GROUP II
PACKING / SHIPPING $9.65 $11.05 $12.45 $13.90
& STOREROOM
PAY GROUP III
QUARRY $10.65 $12.05 $13.45 $14.90
PAY GROUP IV
PRODUCTION $10.65 $11.45 $12.25 $13.05 $13.75
PAY GROUP V
LABORATORY $10.65 $11.70 $12.75 $13.80 $14.90
PAY GROUP VI
MECHANICAL
MAINTENANCE $13.15 $13.55 $14.00 $14.40 $14.80 $15.25 $15.75
PAY GROUP VII
ELECTRICAL MAINTENANCE $13.25 $13.65 $14.10 $14.50 $14.90 $15.35 $15.85
PAY GROUP VIII
CONTROL ROOM ATTENDANT $14.90 $15.05 $15.20 $15.35 $15.50 $15.70 $15.90
DIXIE CEMENT
PROGRESSION
PLAN
MARCH 1 1996
STARTI
PAY GROUP & NG
12 18 24 30 36
POSITIONS RATE 6 MOS. MOS. MOS. MOS. MOS. MOS.
PAY GROUP I
YARD $8.00 $9.50 $11.00
PAY GROUP II
PACKING / SHIPPING $10.00 $11.40 $12.80 $14.25
& STOREROOM
PAY GROUP III
QUARRY $11.00 $12.40 $13.80 $15.25
PAY GROUP IV
PRODUCTION $11.00 $11.85 $12.70 $13.55 $14.40
PAY GROUP V
LABORATORY $11.00 $12.05 $13.10 $14.15 $15.25<PAGE>
PAY GROUP VI
MECHANICAL
MAINTENANCE $13.50 $13.90 $14.35 $14.75 $15.15 $15.60 $16.10
PAY GROUP VII
ELECTRICAL MAINTENANCE $13.60 $14.00 $14.45 $14.85 $15.25 $15.70 $16.20
PAY GROUP VIII
CONTROL ROOM ATTENDANT $15.25 $15.40 $15.55 $15.70 $15.85 $16.05 $16.25
DIXIE CEMENT
PROGRESSION
PLAN
MARCH 1 1997
STARTI
PAY GROUP & NG
12 18 24 30 36
POSITIONS RATE 6 MOS. MOS. MOS. MOS. MOS. MOS.
PAY GROUP I
YARD $8.20 $9.70 $11.20
PAY GROUP II
PACKING / SHIPPING $10.25 $11.65 $13.05 $14.50
& STOREROOM
PAY GROUP III
QUARRY $11.30 $12.70 $14.10 $15.55
PAY GROUP IV
PRODUCTION $11.30 $12.20 $13.15 $14.10 $15.05
PAY GROUP V
LABORATORY $11.35 $12.40 $13.45 $14.50 $15.60
PAY GROUP VI
MECHANICAL
MAINTENANCE $13.85 $14.30 $14.70 $15.10 $15.55 $16.00 $16.45
PAY GROUP VII
ELECTRICAL MAINTENANCE $13.95 $14.40 $14.80 $15.20 $15.65 $16.10 $16.55
PAY GROUP VIII
CONTROL ROOM ATTENDANT $15.60 $15.75 $15.90 $16.05 $16.20 $16.40 $16.60
DIXIE CEMENT
PROGRESSION
PLAN
MARCH 1 1998
STARTI
PAY GROUP & NG
12 18 24 30 36
POSITIONS RATE 6 MOS. MOS. MOS. MOS. MOS. MOS.
PAY GROUP I
YARD $8.55 $10.05 $11.55
PAY GROUP II
PACKING / SHIPPING $10.65 $12.05 $13.45 $14.90
& STOREROOM
PAY GROUP III
QUARRY $11.70 $13.10 $14.50 $15.95
PAY GROUP IV
PRODUCTION $11.95 $12.85 $13.80 $14.75 $15.70
PAY GROUP V
LABORATORY $11.75 $12.80 $13.85 $14.90 $16.00
PAY GROUP VI
MECHANICAL
MAINTENANCE $14.25 $14.70 $15.10 $15.50 $15.95 $16.40 $16.85
PAY GROUP VII
ELECTRICAL MAINTENANCE $14.35 $14.80 $15.20 $15.60 $16.05 $16.50 $16.95
PAY GROUP VIII
CONTROL ROOM ATTENDANT $16.00 $16.15 $16.30 $16.45 $16.60 $16.80 $17.00
DIXIE CEMENT
PROGRESSION
PLAN
MARCH 1 1999
STARTI
PAY GROUP & NG
12 18 24 30 36
POSITIONS RATE 6 MOS. MOS. MOS. MOS. MOS. MOS.
PAY GROUP I
YARD $8.80 $10.30 $11.80
PAY GROUP II
PACKING / SHIPPING $10.95 $12.35 $13.75 $15.20
& STOREROOM
PAY GROUP III
QUARRY $12.05 $13.45 $14.85 $16.30
PAY GROUP IV
PRODUCTION $12.10 $13.15 $14.20 $15.25 $16.35
PAY GROUP V
LABORATORY $12.15 $13.20 $14.25 $15.30 $16.40
PAY GROUP VI
MECHANICAL
MAINTENANCE $14.65 $15.10 $15.50 $15.90 $16.35 $16.80 $17.25
PAY GROUP VII
ELECTRICAL MAINTENANCE $14.75 $15.20 $15.60 $16.00 $16.45 $16.90 $17.35
PAY GROUP VIII
CONTROL ROOM ATTENDANT $16.40 $16.55 $16.70 $16.85 $17.00 $17.20 $17.40
</TABLE>
