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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 20, 1998
SOUTHDOWN, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
LOUISIANA 1-6117 72-0296500
(STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) FILE NUMBER) 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
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ITEM 5. OTHER EVENTS
On June 30, 1998, Southdown, Inc. (the "Company") concluded the
previously reported merger transaction with Medusa Corporation ("Medusa").
Medusa was merged with a wholly-owned subsidiary of the Company pursuant to
which each outstanding Medusa common share was converted into the right to
receive .88 shares of Company common stock and Medusa became a wholly-owned
subsidiary of the Company. A total of 14,689,484 shares of the Company's common
stock were issued for all of the outstanding common stock of Medusa. In
addition, outstanding Medusa employee stock options were converted at the same
exchange ratio into options to purchase approximately 522,000 shares of Company
common stock. The merger constituted a tax-free reorganization and has been
accounted for as a pooling of interests under Accounting Principles Board
Opinion No. 16.
Pooling of interests accounting rules require that no affiliate (as
defined within the meaning of Rule 145 of the Securities Act of 1993, as
amended) significantly reduce its risk relative to its common shareholder
position within the period beginning 30 days prior to the consummation of the
business combination and ending upon the publication of financial results that
include operating results covering at least 30 days of post-acquisition combined
operations. Pursuant to the Securities and Exchange Commission's Accounting
Series Release No. 135 and Staff Accounting Bulletin No. 65, the condensed
combined results of operations for the one-month period ended July 31, 1998 are
hereby published in this Current Report on Form 8-K in order to demonstrate that
the risk sharing requirements for pooling of interests accounting treatment have
been satisfied. The operating results for any one-month period are not
necessarily indicative of results for either the full quarter or the complete
fiscal year.
A copy of the Company's August 20, 1998 press release follows:
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NEWS RELEASE
Contact: Thomas E. Daman
Dennis M. Thies
Southdown, Inc.
(713) 650-6200
FOR IMMEDIATE RELEASE
SOUTHDOWN REPORTS STRONG JULY 1998 EARNINGS
HOUSTON, TEXAS - - August 20, 1998 - - Southdown, Inc. (NYSE:SDW)
reported net earnings of $20.3 million, or $0.52 per diluted share for the one
month period ended July 31, 1998, compared with $14.8 million, or $0.38 per
share in the prior year period. This interim period is being reported in
accordance with contractual obligations related to the merger transaction
between Southdown, Inc. and Medusa Corporation, which was completed on June 30,
1998.
Total revenues and operating earnings for the month of July 1998
increased 11.4% and 31.7%, respectively, compared to the July 1997 period. The
Company experienced favorable operating earnings improvement in all three
business segments. A 7% increase in cement sales volumes and an increase in
cement operating margins related to average cement prices which improved $3.21
per ton and lower per unit cost of sales were the primary factors behind the
improvement in operating results. In addition, increases in average sales prices
in the concrete products group as well as higher aggregates group sales volumes
helped push operating earnings higher for the period.
The Company continues to experience strong cement demand conditions in
all of its markets and remains positive concerning the industry outlook for the
remainder of the year.
Southdown is one of the largest producers of cement in the U.S. The
Company operates twelve manufacturing plants located in Alabama, southern
California, Colorado, Florida, Georgia, Kentucky, Michigan, Ohio, Pennsylvania,
Tennessee and Texas, plus an extensive network of cement distribution terminals.
The Company also mines, processes, and sells construction and specialty
aggregates in the eastern half of the U.S and in southern California. In
addition, the Company markets ready-mixed concrete products in its two largest
markets, southern California and Florida.
The information contained herein includes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Although the Company believes that the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that its expectations will be
achieved. Financial results for a one-month period are not necessarily
indicative of the results for the quarter or the year. Important factors that
could cause actual results to differ materially from the Company's expectations
are disclosed in the Company's Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q (Cautionary Disclosures).
The information contained herein is expressly qualified in its entirety
by these factors and by the Cautionary Disclosures.
# # #
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SOUTHDOWN, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS - UNAUDITED)
COMBINED POST-ACQUISITION RESULTS
ONE MONTH ENDED JULY 31,
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1998 1997
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Revenues:
Cement $ 84.3 $ 75.4
Concrete products 20.8 21.9
Aggregates 14.7 10.8
Intersegment sales (5.9) (5.9)
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$ 113.9 $ 102.2
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Earnings from operations:
Cement $ 32.9 $ 25.6
Concrete products 1.4 0.5
Aggregates 2.7 2.0
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37.0 28.1
Corporate overhead (4.0) (3.6)
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Earnings before interest, income taxes
and minority interest 33.0 24.5
Interest expense (1.4) (1.3)
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31.6 23.2
Income tax expense (10.8) (7.9)
Minority interest, net of income taxes (0.5) (0.5)
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Net earnings $ 20.3 $ 14.8
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Earnings per common share:
Basic $ 0.53 $ 0.40
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Diluted $ 0.52 $ 0.38
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Average shares outstanding:
Basic 38.3 37.1
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Diluted 39.0 39.1
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SOUTHDOWN, INC.
OPERATING HIGHLIGHTS
Sales volumes and average unit prices, costs and margins relating to
the Company's operating segments appear in the tables below:
CEMENT:
COMBINED POST-ACQUISITION RESULTS
ONE MONTH ENDED JULY 31,
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1998 1997
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Tons of cement sold (thousands) 1,105 1,032
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Weighted average per ton data:
Sales price (net of freight to customers) $ 72.60 $ 69.39
Manufacturing and other plant
operating costs 43.21 44.86
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Margin $ 29.39 $ 24.53
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CONCRETE:
COMBINED POST-ACQUISITION RESULTS
ONE MONTH ENDED JULY 31,
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1998 1997
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Cubic yards of ready-mixed concrete
sold (thousands) 307 338
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Weighted average per cubic yard data:
Sales price $ 58.21 $ 54.75
Operating costs 54.90 54.33
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Margin $ 3.31 $ 0.42
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AGGREGATES:
COMBINED POST-ACQUISITION RESULTS
ONE MONTH ENDED JULY 31,
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1998 1997
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Tons of aggregates sold (thousands) 1,244 1,028
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Weighted average per ton data:
Sales price $ 7.99 $ 7.03
Operating costs 6.09 5.06
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Margin $ 1.90 $ 1.97
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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.
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(Registrant)
Date: August 20, 1998 By: DENNIS M. THIES
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Dennis M. Thies
Executive Vice President - Finance and
Chief Financial Officer
