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 December 31, 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 February 1, 1995: 9,487,222 shares of
$.10 par value common stock. <PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
December 31, September 30,
1994 1994
ASSETS
Current assets:
Cash and cash equivalents $ 2,148 $ 804
Accounts and notes receivable, less
allowance for doubtful accounts of
$1,819 ($1,627 at September 30, 1994) 43,516 49,109
Inventories:
Finished products 15,921 16,329
Raw materials 3,173 3,249
Parts and supplies 1,085 1,037
Total inventories 20,179 20,615
Prepaid expenses and other 6,034 5,192
Total current assets 71,877 75,720
Other assets 26,755 26,794
Property, plant and equipment, at cost:
Land 105,346 105,345
Plant and equipment 365,741 358,250
471,087 463,595
Less accumulated depreciation,
depletion and amortization (260,683) (255,519)
Net property, plant and equipment 210,404 208,076
$ 309,036 $ 310,590
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term notes payable to banks $ 14,300 $ 6,700
Accounts payable 23,908 25,176
Dividends payable 2,372 -
Accrued income taxes 2,297 2,218
Accrued liabilities 9,442 12,543
Long-term debt due within one year 2,261 2,661
Total current liabilities 54,580 49,298
Long-term debt 11,783 23,116
Deferred income taxes 30,684 30,441
Other accrued liabilities 16,134 15,645
Stockholders' equity:
Preferred stock, no par value;
10,000,000 shares authorized - -
Common stock, $.10 par value;
50,000,000 shares authorized,
9,487,309 shares issued (9,487,309 at
September 30, 1994) 949 949
Capital in excess of par value 17,400 17,400
Retained earnings 177,508 173,743
Less cost of treasury stock, 87
shares (87 shares at September 30,
1994) (2) (2)
Total stockholders' equity 195,855 192,090
$ 309,036 $ 310,590
See accompanying notes
1 <PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(Dollars in thousands except per share amounts)
(Unaudited)
Three Months ended
December 31
1994 1993
Net sales $89,614 $75,906
Cost of sales 71,845 63,904
Gross profit 17,769 12,002
Selling, general and
administrative expense 8,183 7,180
Operating profit 9,586 4,822
Interest expense (449) (630)
Interest income 155 124
Other income, net 78 89
Income before income taxes 9,370 4,405
Provision for income taxes 3,233 1,463
Net income $ 6,137 $ 2,942
Per common share:
Income $.65 $.31
Cash dividends $.25 $.25
Weighted average number
of shares 9,504,076 9,391,610
See accompanying notes.
2 <PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 1994 AND 1993
(In thousands)
(Unaudited)
1994 1993
Cash flows from operating activities:
Net income $ 6,137 $ 2,942
Adjustments to reconcile net income
to net cash provided from operating
activities:
Depreciation, depletion and
amortization 6,169 6,451
Net changes in operating assets and
liabilities:
Decrease in accounts receivable 5,573 6,121
Decrease in inventories 436 149
Increase in prepaid expenses and
other (842) (1,315)
Decrease in accounts payable and
accrued liabilities (3,801) (4,542)
Increase in deferred income taxes 243 -
Gain on disposition of property,
plant and equipment (38) (15)
Other, net (47) 5
Net cash provided from operating
activities 13,830 9,796
Cash flows from investing activities:
Purchase of property, plant and
equipment (8,378) (2,917)
Proceeds from the sale of property,
plant and equipment 100 118
Collections of notes receivable 54 67
Additions to other assets (129) (106)
Net cash used in investing activities (8,353) (2,838)
Cash flows from financing activities:
Net increase (decrease) in short-term
debt 7,600 (1,700)
Repayment of debt (11,733) (5,749)
Net cash used in financing activities (4,133) (7,449)
Net increase in cash and cash equivalents 1,344 (491)
Cash and cash equivalents at beginning
of year 804 4,069
Cash and cash equivalents at end of
period $ 2,148 $ 3,578
See accompanying notes.
3 <PAGE>
FLORIDA ROCK INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 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 three months ended December 31, 1994,
are not necessarily indicative of the results that may be
expected for the year ended September 30, 1995. 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, 1994.
(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 three months ended December
31, 1994 and 1993 for certain expense items are (in
thousands):
1994 1993
Interest expense, net of
amount capitalized $ 494 $1,125
Income taxes $2,913 $ 464
The following schedule summarizes noncash investing and financing
activities for the three months ended December 31, 1994 and 1993
(in thousands):
1994 1993
Additions to property, plant
and equipment from exchanges $ 14 $ 11
Issuing of common stock in
payment of note payable - $8,000
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 12 to the consolidated financial
statements included in the Company's 1994 Annual Report to
stockholders, in Item 3 "Legal Proceedings" of the Company's Form
10-K for fiscal 1994, and in Part II, Item 1 "Legal Proceedings"
of this Form 10-Q and such information is incorporated herein by
reference.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Results
In the first quarter of fiscal 1995, ended December 31,
1994, consolidated net sales increased 18.1% from the same
period last year. The increase was primarily attributed to
higher volumes in most of the Company's markets. Modest
price improvement has been achieved in some markets due in
part to the pressure of increasing cement prices. Gross
profit increased 48.0% and gross profit margin increased to
19.8% from 15.8%. The increases resulted principally from
the sales increase and favorable operating leverage inherent
in the business when volumes increase.
Selling, general and administrative expense increased 14.0%,
due primarily to increased sales and increased profit
sharing and profit based incentive programs.
The decrease in interest expense in the current period is
due principally to a lower average debt outstanding.
Single family home building permits appear to have peaked in
most markets but remain at healthy levels. Multi-family
dwellings continued to recover. Commercial and industrial
construction markets began to recover during 1994 and remain
driven by capacity utilization more than mortgage rates.
Infrastructure requirements remain good and are expected to
continue to grow modestly in all markets.
The Company expects slower economic growth 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.
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 is
presented in Note 12 to the consolidated financial
statements included in the Company's 1994 Annual Report to
stockholders, in Part I, Item 3 "Legal Proceedings" of the
Company's Form 10-K for fiscal 1994 and in Part II, Item 1
"Legal Proceedings" of this Form 10-Q, and such information
is incorporated herein by reference.
5 <PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings
On May 8, 1992, oral arguments were held in the Government's
appeal of the U.S. Claims Court judgment entered in favor of
the Company in its inverse condemnation claim against the
U.S. Army Corps of Engineers. The case involves a 98 acre
parcel of a 1560 acre tract with limestone reserves in Dade
County, Florida. On March 10, 1994, the Court of Appeals
vacated the U.S. Claims Court judgment and remanded the case
for further proceedings. The Company's petition for
rehearing was denied on June 21, 1994. On September 20,
1994, the Company filed a petition for writ of certiorari in
the U.S. Supreme Court. By Court Order dated January 13,
1995, the U.S. Supreme Court denied the Company's petition.
As a result, the case is remanded to the U.S. Claims court
for further proceedings. This case has been previously
reported in the Company's Form 10-K for the years 1981
through 1991 and 1994 and Form 10-Q for the quarters ending
June 1986, December 1986, March 1987, June 1988, June 1989,
June 1990 and June 1992. (U.S. Claims Court, Case No. 266-
82L and U.S. Court of Appeals, Case No. 91-5156.)
By letter dated December 12, 1994, the United States
Environmental Protection Agency (EPA) requested information
from the Company in connection with a new Superfund Site in
Jacksonville, Florida, which is the former location of Rouse
Steel Drum Company ("Rouse"). Rouse operated a drum
reclamation business at that site between 1965 and 1989.
The Company response to the EPA information request was
submitted on February 3, 1995. The Company believes that
empty new oil product drums may have been delivered to Rouse
for a limited period of time at the request of the vendor,
but the residues in such drums were not CERCLA hazardous
substances.
Note 12 to the consolidated financial statements included in
the Company's 1994 Annual Report to stockholders and Item 3
"Legal Proceedings" of the Company's Form 10-K for fiscal
1994 are incorporated herein by reference.
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" starting on the
page 8 of this Form 10-Q.
(b) Reports on Form 8-K. There were no reports on Form 8-K
filed during the three months ended December 31, 1994.
6 <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.
February 7, 1995 FLORIDA ROCK INDUSTRIES, INC.
/S/ 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 DECEMBER 31, 1994
EXHIBIT INDEX
Page No. in
Sequential
Numbering
(2)(a) Agreement and Plan of Reorganization entered
into as of March 5, 1986 between the Company
and Florida Rock & Tank Lines, Inc. ("FRTL")
pursuant to the distribution pro rata to the
Company's stockholders of 100% of the
outstanding stock of FRTL has previously
been filed as Appendix I to the Company's
Proxy Statement dated June 11, 1986. File
No. 1-7159.
(3)(i)(a) Restated Articles of Incorporation of
Florida Rock Industries, Inc., filed with
the Secretary of State of Florida on May 9,
1986. Previously filed with Form 10-Q for
the quarter ended December 31, 1986. File
No. 1-7159.
(3)(i)(b) Amendment to the Articles of Incorporation
of Florida Rock Industries, Inc. filed with
the Secretary of State of Florida on
February 19, 1992. Previously filed with
Form 10-K for the fiscal year ended
September 30, 1993. File No. 1-7159.
(3)(ii)(a)Restated Bylaws of Florida Rock
Industries, Inc., adopted December 1, 1993.
Previously filed with Form 10-K for the
fiscal year ended September 30, 1993. File
No. 1-7159.
(3)(ii)(b)Amendment to the Bylaws of Florida Rock
Industries, Inc. adopted October 5, 1994.
Previously filed with Form 10-K for the
fiscal year ended September 30, 1994. File
No. 1-7159.
(4)(a) Articles III, VII, and XIII of the Articles
of Incorporation of Florida Rock Industries,
Inc. Previously filed with Form 10-Q for
the quarter ended December 31, 1986 and Form
10-K for the fiscal year ended September 30,
1993. File No. 1-7159.
8 <PAGE>
Page No. in
Sequential
Numbering
(4)(b) 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 the fiscal year ended
September 30, 1990. File No. 1-7159.
(4)(c) 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 the fiscal year ended
September 30, 1992. File No. 1-7159.
(4)(d) 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. Previously filed with Form 10-K
for the fiscal year ended September 30,
1994. File No. 1-7159.
(4)(e) 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.
(10)(a) Retirement Benefits Agreement between
Florida Rock Products Corporation and
Thompson S. Baker dated September 30, 1964.
Previously filed with Form S-1 dated June
29, 1972. File No. 2-44839.
(10)(b) Retirement Benefits Agreement between Shands
& Baker, Inc., and Thompson S. Baker dated
September 30, 1964 and amendment thereto
dated September 22, 1970. Previously filed
with Form S-1 dated June 29, 1972. File No.
2-44839.
(10)(c) Employment Agreement dated June 12, 1972
between Florida Rock Industries, Inc. and
Charles J. Shepherdson, Sr. and form of
Addendum thereto. Previously filed with
Form S-1 dated June 29, 1972. File No. 2-
44839
9 <PAGE>
Page No. in
Sequential
Numbering
(10)(d) Addendums dated April 3, 1974 and November
18, 1975 to Employment Agreement dated June
12, 1972 between Florida Rock Industries,
Inc., and Charles J. Shepherdson, Sr.
Previously filed with Form 10-K for the
fiscal year ended September 30, 1975. File
No. 1-7159.
(10)(e) Florida Rock Industries, Inc. 1981 Stock
Option Plan. Previously filed with Form S-8
dated March 3, 1982. File No. 2-76407.
(10)(f) Amended Medical Reimbursement Plan of
Florida Rock Industries, Inc., effective May
24, 1976. Previously filed with Form 10-K
for the fiscal year ended September 30,
1980. File No. 1-7159.
(10)(g) Amendment No. 1 to Amended Medical
Reimbursement Plan of Florida Rock
Industries, Inc. effective July 16, 1976.
Previously filed with Form 10-K for the
fiscal year ended September 30, 1980. File
No. 1-7159
(10)(h) Tax Service Reimbursement Plan of Florida
Rock Industries, Inc. effective October 1,
1976. Previously filed with Form 10-K for
the fiscal year ended September 30, 1980.
File No. 1-7159.
(10)(i) Amendment No. 1 to Tax Service Reimbursement
Plan of Florida Rock Industries, Inc.
Previously filed with Form 10-K for the
fiscal year ended September 30, 1981. File
No. 1-7159.
(10)(j) Amendment No. 2 to Tax Service Reimbursement
Plan of Florida Rock Industries, Inc.
Previously filed with Form 10-K for the
fiscal year ended September 30, 1985. File
No. 1-7159.
(10)(k) Summary of Management Incentive Compensation
Plan as amended effective October 1, 1992.
Previously filed with Form 10-K for the
fiscal year ended September 30, 1993. File
No. 1-7159.
(10)(l) Florida Rock Industries, Inc. Management
Security Plan. Previously filed with Form
10-K for the fiscal year ended September 30,
1985. File No. 1-7159.
10 <PAGE>
Page No. in
Sequential
Numbering
(10)(m) Various mining royalty agreements with FRTL
or its subsidiary, none of which are
presently believed to be material
individually, but all of which may be
material in the aggregate. Previously filed
with Form 10-K for the fiscal year ended
September 30, 1986. File No. 1-7159.
(10)(n) Florida Rock Industries, Inc. 1991 Stock
Option Plan. Previously filed with Form 10-
K for the fiscal year ended September 30,
1992. File No. 107159.
(10)(o) Split Dollar Insurance Agreement dated
January 24, 1994 between Edward L. Baker and
Florida Rock Industries, Inc. Previously
filed with Form 10-K for the fiscal year
ended September 30, 1994. File No. 1-7159.
(10)(p) Split Dollar Insurance Agreement dated
January 24, 1994 between John D. Baker II
and Florida Rock Industries, Inc.
Previously filed with Form 10-K for the
fiscal year ended September 30, 1994. File
No. 1-7159.
(11) Computation of Earnings Per Common Share.
(27) Financial Data Schedule
11 <PAGE>
Exhibit (11)
FLORIDA ROCK INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS ENDED DECEMBER 31
1994 1993
Net income $6,137,000 $2,942,000
Common shares:
Weighted average shares out-
standing during the period 9,487,222 9,340,952
Shares issuable under stock
options which are potentially
dilutive and affect primary
earnings per share 16,854 50,658
Maximum potential shares in-
cludable in computation of
primary earnings per share 9,504,076 9,391,610
Additional shares issuable
under stock options which
are potentially dilutive
and affect fully diluted
earnings per share 15,025 7,072
Maximum potential shares
included in computation of
fully diluted earnings per
share 9,519,101 9,398,682
Primary earnings per
common share $.65 $.31
Fully diluted earnings
per common share (a) $.65 $.31
(a) Fully diluted earnings per common share are not presented on
the income statement since the potential effect would have
been less than 3% dilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 2,148
<SECURITIES> 0
<RECEIVABLES> 45,335
<ALLOWANCES> 1,819
<INVENTORY> 20,179
<CURRENT-ASSETS> 71,877
<PP&E> 471,087
<DEPRECIATION> 260,683
<TOTAL-ASSETS> 309,036
<CURRENT-LIABILITIES> 54,580
<BONDS> 11,783
<COMMON> 949
0
0
<OTHER-SE> 194,906
<TOTAL-LIABILITY-AND-EQUITY> 309,036
<SALES> 89,614
<TOTAL-REVENUES> 89,614
<CGS> 71,845
<TOTAL-COSTS> 71,845
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 449
<INCOME-PRETAX> 9,370
<INCOME-TAX> 3,233
<INCOME-CONTINUING> 6,137
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,137
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