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, 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 February 1, 1996: 9,487,109 shares of $.10 par value
common stock.
<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
December 31, September 30,
1995 1995
ASSETS
Current assets:
Cash and cash equivalents $ 1,825 $ 925
Accounts and notes receivable, less
allowance for doubtful accounts of
$1,940 ($1,726 at September 30, 1995) 41,680 47,923
Inventories:
Finished products 19,465 19,658
Raw materials 3,437 3,580
Parts and supplies 1,103 1,086
Total inventories 24,005 24,324
Prepaid expenses and other 6,443 5,616
Total current assets 73,953 78,788
Other assets 27,381 26,916
Property, plant and equipment, at cost:
Land 106,226 105,801
Plant and equipment 396,763 386,271
502,989 492,072
Less accumulated depreciation,
depletion and amortization (277,396) (271,747)
Net property, plant and equipment 225,593 220,325
$ 326,927 $ 326,029
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term notes payable to banks $ 11,200 $ 9,400
Accounts payable 25,597 27,499
Dividends Payable 2,372 -
Accrued income taxes 3,033 3,052
Accrued liabilities 9,000 13,492
Long-term debt due within one year 2,396 4,171
Total current liabilities 53,598 57,614
Long-term debt 10,673 9,653
Deferred income taxes 31,005 31,005
Accrued employee benefits 9,912 9,565
Other accrued liabilities 7,360 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 196,035 192,911
Less cost of treasury stock, 200
shares (181 shares at September
30, 1995) (5) (5)
Total stockholders' equity 214,379 211,255
$ 326,927 $ 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
December 31
1995 1994
Net sales $92,265 $89,614
Cost of sales 75,366 71,845
Gross profit 16,899 17,769
Selling, general and
administrative expense 8,321 8,183
Operating profit 8,578 9,586
Interest expense (394) (449)
Interest income 140 155
Other income, net 66 78
Income before income taxes 8,390 9,370
Provision for income taxes 2,895 3,233
Net income $ 5,495 $ 6,137
Per common share:
Income $.58 $.65
Cash dividends $.25 $.25
Weighted average number
of shares 9,519,413 9,504,076
See accompanying notes.<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994
(In thousands)
(Unaudited)
1995 1994
Cash flows from operating activities:
Net income $ 5,495 $ 6,137
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation, depletion and amortization 6,887 6,169
Net changes in operating assets and
liabilities:
Decrease in accounts receivable 6,246 5,573
Decrease in inventories 318 436
Increase in prepaid expenses and other (827) (842)
Decrease in accounts payable
and accrued liabilities (5,641) (3,801)
Increase in deferred income taxes - 243
Gain on disposition of property, plant and
equipment (86) (38)
Other, net 34 (47)
Net cash provided by operating activities 12,426 13,830
Cash flows from investing activities:
Purchase of property, plant and equipment (11,913) (8,378)
Proceeds from the sale of property, plant and
equipment 143 100
Additions to other assets (921) (129)
Proceeds from the disposition of other assets 72 -
Collections of notes receivable 48 54
Net cash used in investing activities (12,571) ( 8,353)
Cash flows from financing activities:
Net increase in short-term debt 1,800 7,600
Repayment of long-term debt (754) (11,733)
Repurchase of Company stock (1) -
Net cash provided by (used in)
financing activities 1,045 ( 4,133)
Net increase in cash and cash
equivalents 900 1,344
Cash and cash equivalents at beginning of year 925 804
Cash and cash equivalents at end of period $ 1,825 $ 2,148
See accompanying notes.<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 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 three
months ended December 31, 1995, 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) 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, 1995 and 1994
for certain expense items are (in thousands):
1995 1994
Interest expense, net of
amount capitalized $ 343 $ 494
Income taxes $2,915 $2,913
The following schedule summarizes noncash investing and financing
activities for the three months ended December 31, 1995 and 1994
(in thousands):
1995 1994
Additions to property, plant
and equipment from exchanges $ 23 $ 14
<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 1995 Annual Report to stockholders, and
Item 3 "Legal Proceedings" of the Company's Form 10-K for fiscal
1995, 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
For the first quarter of fiscal 1996, ended December 31, 1995,
consolidated net sales increased 3% from the same quarter last
year. The increase was primarily attributed to modest price
improvement in most markets and increased volume in the Company's
Florida markets, which were offset by lower volumes in the
Company's Georgia, Maryland and Virginia markets due principally to
the severe winter weather in December 1995 as compared to last
year, which was unusually mild.
Gross profit decreased 5% and gross profit margin decreased
from 19.8% to 18.3%. The decreases resulted principally from a
depressed December and increased material costs that have not been
fully offset by increased selling prices.
Selling, general and administrative expense was 9.0% of sales
in the current quarter as compared to 9.1% in the same quarter last
year.
The decrease in interest expense in the current quarter was
attributed to a lower average debt outstanding which was partially
offset by an increase in the average interest rate.
In 1996 management expects continued slow economic growth.
Construction markets remain steady.
The severe winter weather has continued on into the Company's
second quarter. Therefore, the Company expects lower results for
the second quarter of fiscal 1996 than last year, which experienced
unusually mild winter weather.
At the start of the year we expected to achieve modest growth
in sales and earning. This outlook has been clouded by the severe
winter weather. Improved results are now contingent upon when the
winter weather ends and upon the levels of demand at that time. We
<PAGE>
remain cautiously optimistic that the results of the last six
months of fiscal 1996 will be strong enough to overcome the lower
results now anticipated for the first half of the 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 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 this Form 10-Q, and such
information is incorporated herein by reference.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
A wrongful death action was brought in the Superior Court of
New Hanover County, North Carolina (Case No. 91 CV 0023) against
two of the Company's subsidiaries, S&G Concrete, Inc. and The
Arundel Corporation and others, arising from the death of an
employee of an affiliated company in an on-the-job industrial
accident. The complaint seeks compensatory and punitive damages in
unspecified amounts. The case was originally styled Dora
Richardson Powell, individually, and as personal representative of
the Estate of Timothy G. Powell, deceased vs. S&G Concrete Company,
et al.; however, the Estate amended its complaint to show Company
subsidiaries, The Arundel Corporation and S&G Prestress Company, as
the new defendants. Company motions for summary judgment were
granted as to each defendant. The Estate filed Notice of Appeal as
to each of the aforesaid orders for summary judgment. On November
3, 1995, the Supreme Court of North Carolina affirmed the Court of
Appeals decision in favor of the Company. This matter has been
previously reported in the Form 10-Q for the quarters ending
December 31, 1990, March 31, 1993 and Form 10-K for the years
ending September 30, 1991, September 30, 1993, September 30, 1994
and September 30, 1995.
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
<PAGE>
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. On January 3, 1995, the U.S.
Supreme Court denied the petition for writ of certiorari. On June
28, 1995, a hearing was held concerning issues to be decided on
remand of the case to the U.S. Court of Federal Claims. A new
trial date has been set for April 15, 1996. This case has been
previously reported in the Form 10-K for the years 1981 through
1991 and the years 1994 and 1995 and in the Form 10-Q for the
quarters ending June 1986, December 1986, March 1987, June 1988,
June 1989, June 1990, June 1992, and December 30, 1994. (U.S.
Claims Court, Case No. 266-82L and U.S. Court of Appeals, Case No.
91-5156.)
Note 12 to the consolidated financial statements included in the
Company's 1995 Annual Report to stockholders and Item 3 "Legal
Proceedings" of the Company's Form 10-K for fiscal 1995 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 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, 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.
February 7, 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 DECEMBER 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)(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>
Numbering
Page No. in
Sequential
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.
(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-K for the fiscal year ended
September 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>
Numbering
Page No. in
Sequential
(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>
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. 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<PAGE>
Exhibit (11)
FLORIDA ROCK INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS ENDED DECEMBER 31
1995 1994
Net income $ 5,495,000 $ 6,137,000
Common shares:
Weighted average shares
outstanding during the
period 9,487,109 9,487,222
Shares issuable under
stock options which are
potentially dillutive
and affect primary
earnings per share 32,304 16,854
Maximum potential shares
includable in computa-
tion of primary earnings
per share 9,519,413 9,504,076
Additional shares issu-
able under stock options
which are potentially
dillutive and affect
fully diluted earnings
per share 22,154 15,025
Maximum potential shares
included in computation
of fully diluted
earnings per share 9,541,567 9,519,101
Primary earnings per
common share $.58 $.65
Fully diluted earnings
per common share (a) $.58 $.65
(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-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,825
<SECURITIES> 0
<RECEIVABLES> 43,620
<ALLOWANCES> 1,940
<INVENTORY> 24,005
<CURRENT-ASSETS> 73,953
<PP&E> 502,989
<DEPRECIATION> 277,396
<TOTAL-ASSETS> 326,927
<CURRENT-LIABILITIES> 53,598
<BONDS> 10,673
<COMMON> 949
0
0
<OTHER-SE> 213,430
<TOTAL-LIABILITY-AND-EQUITY> 326,927
<SALES> 92,265
<TOTAL-REVENUES> 92,265
<CGS> 75,366
<TOTAL-COSTS> 75,366
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 394
<INCOME-PRETAX> 8,390
<INCOME-TAX> 2,895
<INCOME-CONTINUING> 5,495
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,495
<EPS-PRIMARY> .58
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