FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-7159
FLORIDA ROCK INDUSTRIES, INC.
(exact name of registrant as specified in its charter)
Florida 59-0573002
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
155 East 21st Street, Jacksonville, Florida 32206
(Address of principal executive offices)
(Zip Code)
904/355-1781
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of August 1, 1994: 9,486,726 shares of $.10
par value common stock.<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
June 30, September 30,
1994 1993
ASSETS
Current assets:
Cash and cash equivalents $ 1,492 $ 4,069
Accounts and notes receivable, less
allowance for doubtful accounts of
$2,041 ($1,428 at September 30, 1993) 49,460 41,931
Inventories:
Finished products 18,052 19,034
Raw materials 3,566 2,962
Parts and supplies 979 1,109
Total inventories 22,597 23,105
Prepaid expenses and other 4,562 3,912
Total current assets 78,111 73,017
Other assets 26,319 29,257
Property, plant and equipment, at cost:
Land 105,225 103,423
Plant and equipment 355,265 344,852
460,490 448,275
Less accumulated depreciation,
depletion and amortization 252,508 238,165
Net property, plant and equipment 207,982 210,110
$312,412 $312,384
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term notes payable to banks $ 13,300 $ 10,200
Accounts payable 25,984 21,906
Dividends payable 2,372 -
Accrued income taxes 3,589 2,403
Accrued liabilities 12,261 10,778
Long-term debt due within one year 6,048 6,746
Total current liabilities 63,554 52,033
Long-term debt 20,558 43,877
Deferred income taxes 27,916 30,734
Other accrued liabilities 15,289 14,146
Stockholders' equity:
Preferred stock, no par value;
10,000,000 shares authorized - -
Common stock, $.10 par value;
50,000,000 shares authorized,
9,486,809 shares issued (9,288,708 at
September 30, 1993) 949 929
Capital in excess of par value 17,387 11,430
Retained earnings 166,761 161,268
Less cost of treasury stock, 67
shares (93,208 shares atSeptember
30, 1993) (2) (2,033)
Total stockholders' equity 185,095 171,594
$312,412 $312,384
See accompanying notes.
1<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(In thousands except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
June 30 June 30
1994 1993 1994 1993
Net sales $95,598 $82,682 $238,499 $213,310
Cost of sales 75,492 68,420 197,720 184,902
Gross profit 20,106 14,262 40,779 28,408
Selling, general and
administrative expense 8,842 7,922 23,906 21,827
Operating profit 11,264 6,340 16,873 6,581
Interest expense (536) (739) (1,683) (2,101)
Interest income 116 121 334 370
Other income, net 20 63 97 263
Income before income taxes 10,864 5,785 15,621 5,113
Provision for
income taxes 3,806 1,574 5,387 1,397
Net income $ 7,058 $ 4,211 $ 10,234 $ 3,716
Per common share:
Income $.74 $.46 $1.08 $.41
Cash dividends $.25 $.25 $.50 $.50
Weighted average number of
shares 9,492,660 9,208,164 9,478,275 9,195,752
See accompanying notes
2<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 1994 AND 1993
(In thousands)
(Unaudited)
1994 1993
Cash flows from operating activities:
Net income $10,234 $ 3,716
Adjustments to reconcile net income
to net cash provided from operating
activities:
Depreciation, depletion and
amortization 19,165 19,604
Net changes in operating assets and
liabilities:
Increase in accounts receivable (7,686) (7,407)
Decrease (Increase) in inventories 508 (1,351)
Decrease (Increase) in prepaid
expenses and other (795) 741
Increase in accounts payable and
accrued liabilities 7,893 7,841
Decrease in deferred income taxes (2,673) (1,998)
Gain on disposition of property,
plant and equipment (385) (1,061)
Other, net 282 17
Net cash provided from operating
activities 26,543 20,102
Cash flows from investing activities:
Purchase of property, plant and
equipment (16,848) (26,444)
Proceeds from the sale of property,
plant and equipment 552 1,168
Proceeds from the disposition of other
assets 694 480
Additions to notes receivable (57) -
Collections of notes receivable 2,854 374
Additions to other assets and other (1,034) (1,787)
Net cash used in investing activities (13,839) (26,209)
Cash flows from financing activities:
Proceeds from long-term debt - 11,000
Net increase in short-term debt 3,100 600
Repayment of debt (16,018) (3,221)
Exercise of employee stock options 10 -
Repurchase of Company stock (1) (64)
Payment of dividends (2,372) (2,298)
Net cash provided from (used in)
financing activities (15,281) 6,017
Net decrease in cash and cash equivalents (2,577) (90)
Cash and cash equivalents at beginning
of year 4,069 1,201
Cash and cash equivalents at end of
period $ 1,492 $ 1,111
See accompanying notes.
3<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1994
(Unaudited)
(1) Basis of Presentation
The accompanying consolidated condensed financial statements
include the accounts of the Company and its subsidiaries. These
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and the instructions to Form 10-Q and do not include all the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
of the results for the interim period have been included.
Operating results for the nine months ended June 30, 1994, are
not necessarily indicative of the results that may be expected
for the year ended September 30, 1994. The accompanying
consolidated financial statements and the information included
under the heading "Management's Discussion and Analysis" should
be read in conjunction with the consolidated financial statements
and related notes of Florida Rock Industries, Inc. for the year
ended September 30, 1993.
(2) Earnings Per Share
Earnings per share are based on the weighted average number of
common shares outstanding and common stock equivalents, where
applicable, during the periods. Fully diluted earnings per share
are not reported because their effect would have been less than
3% dilutive.
(3) Supplemental Disclosures of Cash Flow Information
Cash paid during the nine months ended June 30, 1994 and 1993 for
certain expense items are (in thousands):
1994 1993
Interest expense, net of
amount capitalized $2,284 $2,205
Income taxes $8,077 $1,112
The following schedule summarizes noncash investing and financing
activities for the nine months ended June 30, 1994 and 1993 (in
thousands):
1994 1993
Additions to property, plant
and equipment from:
Exchanges $ 269 $ 61
Issuing debt $ - $686
Issuing of common stock in
payment of note payable $8,000 -
Additions to notes receivable from
the sale of property, plant,
and equipment $ 440 -
4<PAGE>
(4) The Company and its subsidiaries are subject to legal proceedings
and claims arising out of their businesses that cover a wide
range of matters. Additional information concerning these
matters is presented in Note 13 to the consolidated financial
statements included in the Company's 1993 Annual Report to
stockholders, in Item 3 "Legal Proceedings" of the Company's Form
10-K for fiscal 1993, and in Part II, Item 1 "Legal Proceedings"
of the Company's Forms 10-Q for the quarters ended March 31, 1994
and June 30, 1994; and such information is incorporated herein by
reference.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Results
In the third quarter and first nine months of fiscal 1994, ended June
30, 1994, consolidated net sales increased 16% and 12%, respectively,
from the same periods last year. The increases in sales were
attributable to higher volumes coupled with modest price improvement
in most markets due to strengthening demand.
The current nine month period was adversely affected by the unusually
severe winter which slowed construction activity in the Company's
Georgia, Virginia, and Maryland markets during the second quarter.
Gross profit and gross profit margin improved in both current periods
as a result of the increased sales and the many actions taken by
management during the past several quarters to reduce costs.
Selling, general and administrative expense was up in both current
periods due to increased sales and the impact of profit sharing and
incentive compensation which are linked to profitability.
The decrease in interest expense in the current periods is due
principally to a lower average debt outstanding.
The decrease in interest income in the current periods is due
principally to a reduction in notes receivable.
The sales recovery expected for fiscal 1994 is taking place.
Commercial construction markets remain overbuilt. Construction of
single-family homes has recovered to reasonable levels.
Infrastructure programs are expected to grow modestly.
The Company expects a continued recovery through the balance of this
year.
Financial Condition
The Company continues to maintain its sound financial condition with
sufficient resources to meet anticipated capital expenditures and
other operating requirements.
5<PAGE>
While the Company is affected by environmental regulations, such
regulations are not expected to have a major effect on the Company's
capital expenditures or operating results. Additional information
concerning environmental matters and other contingent liabilities is
presented in Note 13 to the consolidated financial statements included
in the Company's 1993 Annual Report to stockholders, in Item 3 "Legal
Proceedings" of the Company's Form 10-K for fiscal 1993, and in Part
II, Item 1 "Legal Proceedings" of the Company's Forms 10-Q for the
quarters ended March 31, 1994 and June 30, 1994; and such information
is incorporated herein by reference.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
On May 26, 1993, Region 5 of the National Labor Relations Board
("NLRB") issued a Complaint against a subsidiary of the Company
(herein the "Subsidiary") based on unfair labor practice charges filed
earlier by Teamsters Local 639. The Complaint alleged that the
Subsidiary had unlawfully withdrawn recognition from the Teamsters
based upon an employee petition which, it is also alleged, failed to
represent the sentiments of a majority of the employees in the
bargaining unit eligible to vote on the question concerning
representation. The Complaint further alleged that the Subsidiary
followed the withdrawal of recognition with unilateral changes in
terms and conditions of employment which also constituted violations
of the National Labor Relations Act. The Complaint seeks an order
from the NLRB requiring the Subsidiary to recognize the Teamsters as
its employees' exclusive collective bargaining representative, to
restore to the status quo the terms and conditions of employment which
were unilaterally changed, and to make whole the affected employees
and certain employee benefit plans for whatever they lost as a result
of the changes. The Subsidiary has denied any violations as charged
and is defending vigorously its position. On April 21, 1994, an
Administrative Law Judge ("ALJ") of the NLRB issued a Recommended
Decision and Order recommending a ruling against the Subsidiary's
position and recommending the relief sought in the Complaint. The
Subsidiary has filed with the NLRB exceptions (the equivalent of an
appeal) against the ALJ's recommendations. The amount of ultimate
liability, if any, with respect to this matter cannot reasonably be
estimated. However, it is the opinion of the Company's management
that the ultimate disposition of this matter will not have a material
adverse effect on the Company's financial position.
Part II, Item 1 "Legal Proceedings" of the Company's Form 10-Q for the
quarter ended March 31, 1994 is hereby incorporated by reference in
this Form 10-Q.
6<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The response to this item is submitted as a separate
section entitled "Exhibit Index" on page 7 of this Form 10-Q.
(b) Reports on Form 8-K. During the quarter ended June 30, 1994, the
Company filed a Form 8-K dated May 4, 1994 reporting a change in the
Company's certifying accountants under Item 4.
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.
August 5, 1994 FLORIDA ROCK INDUSTRIES, INC.
RUGGLES B. CARLSON
Ruggles B. Carlson
Vice President-Finance
and Treasurer
(Principal Financial and
Accounting Officer)
7<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1994
EXHIBIT INDEX
Page No. in
Sequential
Numbering
(4)(a) Amended and Restated Revolving Credit and Term Loan
Agreement dated as of December 5, 1990, among Florida
Rock Industries, Inc.; Continental Bank, N. A.; Barnett
Bank of Jacksonville, N. A.; Sun Bank, National
Association; Crestar Bank; First Union National Bank of
Florida; The First National Bank of Maryland; Southeast
Bank,. N. A.; and Maryland National Bank. Previously
filed with Form 10-K for September 30, 1990. File No.
1-7159.
(4)(b) First Amendment dated as of September 30, 1992 to the
Amended and Restated Revolving Credit and Term Loan
Agreement dated as of December 5, 1990. Previously
filed with Form 10-K for September 30, 1992. File No.
1-7159.
(4)(c) Second Amendment dated as of June 30, 1994 to the
Amended and Restated Revolving Credit and Term Loan
Agreement dated as of December 5, 1990. 10 - 16
(4)(d) The Company and its consolidated subsidiaries have
other long-term debt agreements which do not exceed 10%
of the total consolidated assets of the Company and its
subsidiaries, and the Company agrees to furnish copies
of such agreements and constituent documents to the
Commission upon request.
(11) Computation of earnings per share. 17
8<PAGE>
Exhibit (11)
FLORIDA ROCK INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS NINE MONTHS
ENDED JUNE 30 ENDED JUNE 30
1994 1993 1994 1993
Net income $7,058,000 $4,211,000 $10,234,000 $3,716,000
Common shares:
Weighted average shares
outstanding during the
period 9,486,767 9,195,532 9,437,613 9,195,752
Shares issuable under
stock options which are
potentially dilutive and
affect primary earnings
per share 5,893 12,632 40,662 -
Maximum potential shares
includable in computation
of primary earnings per
share 9,492,660 9,208,164 9,478,275 9,195,752
Additional shares
issuable under stock
options which are
potentially dilutive and
affect fully diluted
earnings per share - 3,836 - 16,661
Maximum potential shares
included in computation of
fully diluted earnings
per share 9,492,660 9,212,000 9,478,275 9,212,413
Primary earnings per
commom share $.74 $.46 $1.08 $.41
Fully diluted earnings
per common share (a) $.74 $.46 $1.08 $.41
(a) Fully diluted earnings per common share are not presented on the income
statement since the potential affect would have been less than 3%
dilutive.
9<PAGE>
