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, 1996
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, 1996: 9,449,508 shares of $.10 par value
common stock.<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
March 31, September 30,
1996 1995
ASSETS
Current assets:
Cash and cash equivalents $ 1,207 $ 925
Accounts and notes receivable, less
allowance for doubtful accounts of
$2,108 ($1,726 at September 30, 1995) 45,344 47,923
Inventories 24,956 24,324
Prepaid expenses and other 7,419 5,616
Total current assets 78,926 78,788
Other assets 27,604 26,916
Property, plant and equipment, at cost:
Land 110,449 105,801
Plant and equipment 406,892 386,271
517,341 492,072
Less accumulated depreciation,
depletion and amortization (279,418) (271,747)
Net property, plant and equipment 237,923 220,325
$ 344,453 $ 326,029
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term notes payable to banks $ 22,300 $ 9,400
Accounts payable 26,971 27,499
Accrued income taxes - 3,052
Accrued liabilities 10,699 13,492
Long-term debt due within one year 2,465 4,171
Total current liabilities 62,435 57,614
Long-term debt 17,105 9,653
Deferred income taxes 30,437 31,005
Accrued employee benefits 10,314 9,565
Other accrued liabilities 7,302 6,937
Stockholders' equity:
Preferred stock, no par value;
10,000,000 shares authorized, - -
none issued
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 198,831 192,911
Less cost of treasury stock, 12,601
shares (181 shares at September
30, 1995) (320) (5)
Total stockholders' equity 216,860 211,255
$ 344,453 $ 326,029
See accompanying notes.<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
1996 1995 1996 1995
Net sales $85,801 $84,684 $178,066 $174,298
Cost of sales 72,336 70,681 147,702 142,526
Gross profit 13,465 14,003 30,364 31,772
Selling, general and
administrative expense 8,993 8,851 17,314 17,034
Operating profit 4,472 5,152 13,050 14,738
Interest expense (535) (527) (929) (976)
Interest income 157 127 297 282
Other income, net 174 214 240 292
Income before income taxes 4,268 4,966 12,658 14,336
Provision for income taxes 1,472 1,713 4,367 4,946
Net income $ 2,796 $ 3,253 $ 8,291 $ 9,390
Per common share:
Income $.29 $.34 $.87 $.99
Cash dividends $. - $ - $.25 $.25
Weighted average number
of shares 9,505,378 9,529,896 9,511,132 9,521,675
See accompanying notes.<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1996 AND 1995
(In thousands)
(Unaudited)
1996 1995
Cash flows from operating activities:
Net income $ 8,291 $ 9,390
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation, depletion and amortization 13,940 12,702
Net changes in operating assets and
liabilities:
Decrease in accounts receivable 2,582 5,109
Increase in inventories (632) (1,555)
Increase in prepaid expenses and other (1,477) (492)
Decrease in accounts payable and
accrued liabilities (5,260) (2,132)
Decrease in deferred income taxes (894) (1,117)
Gain on disposition of property, plant and
equipment (722) (288)
Other, net 142 (198)
Net cash provided by operating activities 15,970 21,419
Cash flows from investing activities:
Purchase of property, plant and equipment (30,836) (21,975)
Proceeds from the sale of property, plant and
equipment 804 526
Additions to other assets (1,275) (1,220)
Proceeds from the disposition of other assets 114 68
Collections of notes receivable 104 96
Net cash used in investing activities (31,089) (22,505)
Cash flows from financing activities:
Proceeds from long-term debt 6,000 -
Net increase in short-term debt 12,900 16,000
Repayment of long-term debt (812) (11,786)
Repurchase of Company stock (315) (2)
Payment of dividends (2,372) (2,372)
Net cash provided by financing activities 15,401 1,840
Net increase in cash and cash
equivalents 282 754
Cash and cash equivalents at beginning of year 925 804
Cash and cash equivalents at end of period $ 1,207 $ 1,558
See accompanying notes.<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1996
(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, 1996, are not necessarily
indicative of the results that may be expected for the year
ended September 30, 1996. 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, 1995.
(2) Inventories
Inventories consisted of the following (in thousands):
March 31, September 30,
1996 1995
Finished products $ 20,165 $ 19,658
Raw materials 3,698 3,580
Parts and supplies 1,093 1,086
$ 24,956 $ 24,324
(3) 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.
(4) Supplemental Disclosures of Cash Flow Information
Cash paid during the six months ended March 31, 1996 and 1995
for certain expense items are (in thousands):
1996 1995
Interest expense, net of
amount capitalized $ 832 $ 801
Income taxes $9,133 $8,654
The following schedule summarizes noncash investing and
financing
activities for the six months ended March 31, 1996 and 1995
(in thousands):
1996 1995
Additions to property, plant
and equipment from:
Exchanges $ 69 $ 26
Issuing debt $ 260 -
Additions to other assets
from issuing debt $ 300 -
Additions to notes receivable
from sale of property, plant
and equipment $ 6 -
(5) 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
1995 Annual Report to stockholders, Item 3 "Legal Proceedings"
of the Company's Form 10-K for fiscal 1995, and in Part II,
Item 1 "Legal Proceedings" of the Company's Form 10-Q for the
quarters ended December 31, 1995 and March 31, 1996. Such
information is incorporated herein by reference.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Results
For the second quarter and first six months of fiscal 1996, ended
March 31, 1996, consolidated net sales increased 1% and 2%,
respectively, from the same periods last year. The increases were
primarily attributed to modest price improvement in most markets.
Gross profit for both the second quarter and the first six months
decreased approximately 4% from the same periods last year. Gross
profit margin for the second quarter decreased from 16.5% to 15.7%
and for the first six months decreased from 18.2% to 17.1% from
last year. Costs were adversely impacted by the difficult
operating conditions during the winter as well as higher material
and maintenance expenses.
Selling, general and administrative expense amounted to 10.5% of
sales in the current quarter which was level with the second
quarter of last year and decreased slightly from 9.8% to 9.7% in
the current six months compared to last year.
Interest expense for the second quarter remained about level with
the second quarter last year. The decrease in interest expense in
the current six months was attributed to a lower average debt
outstanding which was partially offset by an increase in the
average interest rate.
As usual at this time of year winter weather masks the condition of
many of our markets. However, it appears that conditions remain
reasonably stable. Rising interest rates are expected to result in
some decline in residential construction, but activity is expected
to remain at fairly high lievels. Commercial, state and federal
construction projects should offset the decline in residential
activity. Our operations should make up the short falls from the
first half in the second half of the year.
Managment continues to expect the results for fisal 1996 to be more
or less in line with last year's results.
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 1995 Annual Report to stockholders, in Part I, Item 3
"Legal Proceedings" of the Company's Form 10-K for fiscal 1995 and
in Part II, Item 1 "Legal Proceedings" of the Company's Form 10-Q
for the quarter ended December 31, 1995, and such information is
incorporated herein by reference.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
In May of 1993 the National Labor Relations Board ("NLRB") issued
a Complaint against a subsidiary of the Company ("Subsidiary")
based on unfair labor practice charges previously filed by
Teamsters Local 639. The Complaint sought an order from the NLRB
requiring the Subsidiary to recognize the Teamsters as its
employees' exclusive collective bargaining representative, to
restore certain previous terms and conditions of employment and to
make whole the affected employees and certain employee benefit
plans for losses as a result of changes in terms and conditions of
employment made by the Subsidiary. The Subsidiary denied such
charges. In April of 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 filed an appeal
with the NLRB. In February 1995, the NLRB affirmed the ALJ's
decision in substantial part. The Subsidiary appealed the NLRB
decision to the United States Fourth Circuit Court of Appeals. In
February 1996, a three judge panel of the Court of Appeals
unanimously affirmed the NLRB decision. The Subsidiary petitioned
for rehearing before this panel with a suggestion for rehearing en
banc by the entire Fourth Circuit Court of Appeals. On April 15,
1996 the Court issued an order denying such petition. On April 16,
1996 the Court vacated its April 15 order and issued an order
directing the Teamsters and NLRB to file an answer to the petition
for rehearing and suggestion for rehearing en banc on or before May
6, 1996. The 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
consolidated financial statements. This matter has been previously
reported in the Company's Form 10-K for fiscal years ended
September 30, 1994 and 1995 and Form 10-Q for the quarters ended
June 30, 1994 and March 31, 1995.
Note 12 to the consolidated financial statements included in the
Company's 1995 Annual Report to stockholders, Item 3 "Legal
Proceedings" of the Company's Form 10-K for fiscal 1995 and Part
II, Item 1 "Legal Proceedings" of the Company's Form 10-Q for the
quarter ended December 31, 1995 are incorporated herein by
reference.
Item 4. Submission of Matters to a Vote of Security Holders
On February 7, 1996, 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
Robert D. Davis 1997 7,788,919 6,952 1,416,311
Edward L. Baker 2000 7,788,750 7,121 1,416,311
Francis X. Knott 2000 7,779,626 16,245 1,416,311
Radford D. Lovett 2000 7,788,763 7,108 1,416,311
W. Thomas Rice 2000 7,788,266 7,605 1,416,311
At the 1996 annual meeting the stockholders adopted the Company's
1996 Stock Option Plan. The new Plan was approved and adopted by
6,645,320 votes for, 338,954 against, 7,856 votes abstained and
2,220,052 votes were not voted by broker/nominees.
These matters are more fully described in the Company's Proxy
Statement dated December 18, 1995.
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 page 9
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, 1996.
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 1, 1996 FLORIDA ROCK INDUSTRIES, INC.
RUGGLES B. CARLSON
Ruggles B. Carlson
Vice President-Finance
and Treasurer
(Principal Financial and
Accounting Officer)<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1996
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)(a)(1) 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)(a)(2) 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)(a)(3) Amendments to the Articles of Incorporation of
Florida Rock Industries, Inc. filed with the
Secretary of State of Florida on February 7, 1995.
Previously filed as appendix to the Company's Proxy
Statement dated December 15, 1994.
(3)(b)(1) 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)(b)(2) 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
Page No. in
Sequential
Numbering
ended December 31, 1986 and Form 10-K for the
fiscal year ended September 30, 1993. And Articles
XIV and XV previously filed as appendix to the
Company's Proxy Statement dated December 15, 1994.
File No. 1-7159.
(4)(b)(1) 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)(b)(2) 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)(b)(3) 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-Q for the quarter ended June
30, 1994. File No. 1-7159.
(4)(c) 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.
Page No. in
Sequential
Numbering
(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)(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.
Page No. in
Sequential
Numbering
(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)(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. And February
1, 1995 Amendment to Florida Rock Industries, Inc.
1991 Stock Option Plan. Previously filed as
appendix to the Company's Proxy Statement dated
December 15, 1994. File No. 1-7159.
(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.
(10)(q) Florida Rock Industries, Inc. 1996 Stock Option
Plan. Previously filed as appendix to the
Company's Proxy Statement dated December 18, 1995.
File No. 1-7159.
(11) Computation of Earnings Per Common Share.
(27) Financial Data Schedule<PAGE>
Exhibit (11)
FLORIDA ROCK INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS SIX MONTHS
ENDED MARCH 31 ENDED MARCH 31
1996 1995 1996 1995
Net income $ 2,796,000 $ 3,253,000 $ 8,291,000 $9,390,000
Common shares:
Weighted average shares
outstanding during the
period 9,485,302 9,487,155 9,486,210 9,487,188
Shares issuable under
stock options which are
potentially dillutive
and affect primary
earnings per share 20,076 42,741 24,922 34,487
Maximum potential shares
includable in computa-
tion of primary earnings
per share 9,505,378 9,529,896 9,511,132 9,521,675
Additional shares issu-
able under stock options
which are potentially
dillutive and affect
fully diluted earnings
per share - 15,112 - 23,116
Maximum potential shares
included in computation
of fully diluted
earnings per share 9,505,378 9,545,008 9,511,132 9,544,791
Primary earnings per
common share $.29 $.34 $.87 $.99
Fully diluted earnings
per common share (a) $.29 $.34 $.87 $.98
(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. <PAGE>
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<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 1,207
<SECURITIES> 0
<RECEIVABLES> 47,452
<ALLOWANCES> 2,108
<INVENTORY> 24,956
<CURRENT-ASSETS> 78,926
<PP&E> 517,341
<DEPRECIATION> 279,418
<TOTAL-ASSETS> 344,453
<CURRENT-LIABILITIES> 62,435
<BONDS> 17,105
<COMMON> 949
0
0
<OTHER-SE> 215,911
<TOTAL-LIABILITY-AND-EQUITY> 344,453
<SALES> 178,066
<TOTAL-REVENUES> 178,066
<CGS> 147,702
<TOTAL-COSTS> 147,702
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<INTEREST-EXPENSE> 929
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<INCOME-TAX> 4,367
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
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