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 March 31, 1995
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 May 1, 1995: 9,487,128 shares of $.10 par
value common stock.<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
March 31, September 30,
1995 1994
ASSETS
Current assets:
Cash and cash equivalents $ 1,558 $ 804
Accounts and notes receivable, less
allowance for doubtful accounts of
$1,843 ($1,627 at September 30, 1994) 43,949 49,109
Inventories:
Finished products 17,460 16,329
Raw materials 3,507 3,249
Parts and supplies 1,204 1,037
Total inventories 22,171 20,615
Prepaid expenses and other 6,263 5,192
Total current assets 73,941 75,720
Other assets 27,709 26,794
Property, plant and equipment, at cost:
Land 106,667 105,345
Plant and equipment 374,475 358,250
481,142 463,595
Less accumulated depreciation,
depletion and amortization (263,642) (255,519)
Net property, plant and equipment 217,500 208,076
$ 319,150 $ 310,590
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term notes payable to banks $ 22,700 $ 6,700
Accounts payable 24,687 25,176
Accrued income taxes - 2,218
Accrued liabilities 12,147 12,543
Long-term debt due within one year 2,511 2,661
Total current liabilities 62,045 49,298
Long-term debt 11,480 23,116
Deferred income taxes 29,905 30,441
Other accrued liabilities 16,615 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 949 949
Capital in excess of par value 17,400 17,400
Retained earnings 180,761 173,743
Less cost of treasury stock, 181
shares (87 shares at September 30,
1994) (5) (2)
Total stockholders' equity 199,105 192,090
$ 319,150 $ 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 Six Months ended
March 31 March 31
1995 1994 1995 1994
Net sales $84,684 $66,995 $174,298 $142,901
Cost of sales 70,681 58,324 142,526 122,228
Gross profit 14,003 8,671 31,772 20,673
Selling, general and
administrative expense 8,851 7,884 17,034 15,064
Operating profit 5,152 787 14,738 5,609
Interest expense (527) (517) (976) (1,147)
Interest income 127 94 282 218
Other income, net 214 (12) 292 77
Income before income taxes 4,966 352 14,336 4,757
Provision for income taxes 1,713 118 4,946 1,581
Net income $ 3,253 $ 234 $ 9,390 $ 3,176
Per common share:
Income $.34 $.02 $.99 $.34
Cash dividends $. - $. - $.25 $.25
Weighted average number
of shares 9,529,896 9,554,700 9,521,675 9,473,369
See accompanying notes.
2<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1995 AND 1994
(In thousands)
(Unaudited)
1995 1994
Cash flows from operating activities:
Net income $ 9,390 $ 3,176
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation, depletion and amortization 12,702 12,748
Net changes in operating assets and
liabilities:
Decrease in accounts receivable 5,109 4,645
Increase in inventories (1,555) (1,472)
Increase in prepaid expenses and other (492) (1,020)
Decrease in accounts payable and accrued
liabilities (2,132) (1,634)
Decrease in deferred income taxes (1,117) (1,847)
Gain on disposition of property, plant and
equipment (288) (48)
Other, net (198) 208
Net cash provided from operating activities 21,419 14,756
Cash flows from investing activities:
Purchase of property, plant and equipment (21,975) (7,309)
Proceeds from the sale of property, plant and
equipment 526 135
Proceeds from the disposition of other assets 68 710
Collections of notes receivable 96 2,759
Additions to other assets (1,220) (750)
Net cash used in investing activities (22,505) (4,455)
Cash flows from financing activities:
Net increase (decrease) in short-term debt 16,000 (1,000)
Repayment of debt (11,786) (10,816)
Exercise of employee stock options - 10
Repurchase of Company stock (2) (1)
Payment of dividends (2,372) (2,372)
Net cash provided (used) in
financing activities 1,840 (14,179)
Net increase (decrease) in cash and
cash equivalents 754 (3,878)
Cash and cash equivalents at beginning of year 804 4,069
Cash and cash equivalents at end of period $ 1,558 $ 191
See accompanying notes.
3<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1995
(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 six months ended March 31, 1995, 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 six months ended March 31, 1995 and 1994 for
certain expense items are (in thousands):
1995 1994
Interest expense, net of
amount capitalized $ 801 $1,629
Income taxes $8,654 $6,261
The following schedule summarizes noncash investing and financing
activities for the six months ended March 31, 1995 and 1994 (in
thousands):
1995 1994
Additions to property, plant
and equipment from exchanges $ 26 $ 12
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 the Company's Form 10-Q for the quarter ended December 31,
1994 and of this Form 10-Q and such information is incorporated
herein by reference.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Results
In the second quarter and first six months of fiscal 1995,
ended March 31, 1995, consolidated net sales increased 26%
and 22%, respectively, from the same periods last year. The
increases were primarily attributed to higher volumes in
most of the Company's markets. Also, Price improvement has
been achieved in some markets due in part to the pressure of
increasing cement prices. Last year's results were
depressed by an unusually severe winter which negatively
impacted the Company's Georgia, Virginia and Maryland
markets.
Gross profit and gross profit margin increased in both
current periods due principally to the sales increases and
favorable operating leverage inherent in the business when
volumes increase.
Selling, general and administrative expense increased in
both current periods due primarily to increased sales and
increased profit sharing and profit based incentive
programs.
Interest expense increased slightly in the second quarter as
compared to the same quarter last year due to an increase in
the average interest rate which was substantially offset by
a decrease in the average debt outstanding. The decrease in
interest expense in the first six months of fiscal 1995 as
compared to the same period last year was due to a decrease
in the average debt outstanding which was partially offset
by an increase in the average interest rate.
The growth expected for fiscal year 1995 is taking place.
Commercial and multifamily construction continues to respond
to increased demand as much of the excess capacity has been
absorbed in many of the Company's markets. Residential
construction remains at reasonable but lower levels as
increased interest rates weakened demand. Infrastructure
programs continue to grow modestly.
5<PAGE>
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 and other
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 the Company's Form
10-Q for the quarter ended December 31, 1994 and of this
Form 10-Q, 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 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.
6<PAGE>
The Subsidiary filed exemptions (the equivalent of an
appeal) with the NLRB in opposition to the ALJ's
recommendations. On February 8, 1995, the NLRB affirmed the
ALJ's decision in substantial part. The Company has
appealed the NLRB's decision to the Fourth Circuit Court of
Appeals where the matter is now pending. 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. This matter has been
previously reported in the Company's Form 10-Q for the
quarter ended June 30, 1994.
Note 12 to the consolidated financial statements included in
the Company's 1994 Annual Report to stockholders, Item 3
"Legal Proceedings" of the Company's Form 10-K for fiscal
1994 and Part II, Item 1 "Legal Proceedings" of the
Company's Form 10-Q for the quarter ended December 31, 1994
are incorporated herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders
On February 1, 1995, the Company held its annual shareholders
meeting. At the meeting the stockholders elected the following
directors by the vote shown:
Not Voted
Term Votes Votes Broker/
Ending For Withheld Nominees
John D. Baker II 1999 7,999,850 37,010 1,226,341
A. R. Carpenter 1999 8,000,011 36,849 1,226,341
Charles H. Denny III 1999 8,000,011 36,849 1,226,341
At the 1995 annual meeting the stockholders approved and adopted
an amendment to the Company's Articles of Incorporation by adding
a new ARTICLE XIV, which provides that the provisions of Section
607.0902, Florida Statutes, 1993, as they may be amended, shall
not apply to control-share acquisitions of shares of this
corporation. The amendment was approved and adopted by 7,027,370
votes for, 213,836 votes against, 24,537 votes abstained and
1,997,458 votes were not voted by broker/nominees.
At the 1995 annual meeting the stockholders approved and adopted
an amendment to the Company's Articles of Incorporation by adding
a new ARTICLE XV, in which Section 1 requires action by holders
of 50% of the shares entitled to vote to require the call of a
special meeting of shareholders; Section 2 requires a meeting for
any shareholder action; and Section 3 requires advance notice
provisions to the Company for shareholder nomination of
directors. The amendment was approved and adopted by 4,850,810
votes for, 2,311,954 votes against, 102,979 votes abstained and
1,997,458 votes were not voted by broker/nominees.
7<PAGE>
Also, at the 1995 annual meeting the stockholders approved an
amendment to the Company's 1991 Stock Option Plan. The amendment
was approved and adopted by 7,167,564 votes for, 100,786 votes
against, 768,510 votes abstained and 1,226,341 votes were not
voted by broker/nominees.
These matters are more fully described in the Company's Proxy
Statement dated December 15, 1994.
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
next page 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 March 31, 1995.
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.
May 5, 1995 FLORIDA ROCK INDUSTRIES, INC.
RUGGLES B. CARLSON
Ruggles B. Carlson
Vice President-Finance
and Treasurer
(Principal Financial and
Accounting Officer)
8<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1995
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.
9<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
10<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.
11<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
12<PAGE>
Exhibit (11)
FLORIDA ROCK INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS SIX MONTHS
ENDED MARCH 31 ENDED MARCH 31
1995 1994 1995 1994
Net income $3,253,000 $ 234,000 $9,390,000 $3,176,000
Common shares:
Weighted average shares
outstanding during the
period 9,487,155 9,486,720 9,487,188 9,413,035
Shares issuable under
stock options which are
potentially dillutive
and affect primary
earnings per share 42,741 67,980 34,487 60,334
Maximum potential shares
includable in computa-
tion of primary earnings
per share 9,529,896 9,554,700 9,521,675 9,473,369
Additional shares issu-
able under stock options
which are potentially
dillutive and affect
fully dilluted earnings
per share 15,112 - 23,116 -
Maximum potential shares
included in computation
of fully diluted
earnings per share 9,545,008 9,554,700 9,544,791 9,473,369
Primary earnings per
common share $.34 $.02 $.99 $.34
Fully diluted earnings
per common share (a) $.34 $.02 $.98 $.34
(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.
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<CASH> 1,558
<SECURITIES> 0
<RECEIVABLES> 45,792
<ALLOWANCES> 1,843
<INVENTORY> 22,171
<CURRENT-ASSETS> 73,941
<PP&E> 481,142
<DEPRECIATION> 263,642
<TOTAL-ASSETS> 319,150
<CURRENT-LIABILITIES> 62,045
<BONDS> 11,480
<COMMON> 949
0
0
<OTHER-SE> 199,105
<TOTAL-LIABILITY-AND-EQUITY> 319,150
<SALES> 174,298
<TOTAL-REVENUES> 174,298
<CGS> 142,526
<TOTAL-COSTS> 142,526
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<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 976
<INCOME-PRETAX> 14,336
<INCOME-TAX> 4,946
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<DISCONTINUED> 0
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