<PAGE>
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, 1999
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 2, 1999: 18,895,340 shares of $.10 par value
common stock.
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FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
June 30, September 30,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents $ 4,554 4,457
Accounts and notes receivable, less
allowance for doubtful accounts of
$1,703 ($1,121 at September 30, 1998) 75,788 65,334
Inventories 24,778 25,535
Assets held for sale 18,134 -
Prepaid expenses and other 4,606 5,281
Total current assets 127,860 100,607
Other assets 16,214 20,754
Goodwill at cost less accumulated amortization 50,465 9,140
Property, plant and equipment, at cost:
Land 136,020 120,076
Plant and equipment 499,006 477,846
Construction in process 113,528 45,091
748,554 643,013
Less accumulated depreciation,
depletion and amortization 340,907 321,958
Net property, plant and equipment 407,647 321,055
$ 602,186 451,556
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term notes payable to banks $ 49,620 8,500
Accounts payable 38,977 38,783
Dividends payable 2,354 -
Accrued income taxes 2,221 3,715
Accrued payroll and benefits 12,581 11,913
Accrued insurance reserve 4,242 2,660
Accrued liabilities, other 9,290 6,891
Long-term debt due within one year 1,994 2,324
Total current liabilities 121,279 74,786
Long-term debt 97,713 23,935
Deferred income taxes 29,360 28,564
Accrued employee benefits 13,478 12,440
Long-term accrued insurance reserves 6,463 6,463
Other accrued liabilities 5,826 5,482
Stockholders' equity:
Preferred stock, no par value; 10,000,000
shares authorized, none issued - -
Common stock, $.10 par value; 50,000,000
shares authorized, 18,974,618 shares issued 1,897 1,897
Capital in excess of par value 18,288 18,796
Retained earnings 310,814 281,882
Less cost of treasury stock, 92,578
shares (108,662 shares at September
30, 1998) (2,932) (2,689)
Total stockholders' equity 328,067 299,886
$ 602,186 451,556
See accompanying notes.
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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,
1999 1998 1999 1998
Net sales $152,257 131,973 429,459 351,208
Cost of sales 115,851 100,883 331,559 276,018
Gross profit 36,406 31,090 97,900 75,190
Selling, general and administrative expense:
Selling, general and administrative 13,712 12,163 39,661 34,200
System upgrades/Year 2000 costs 1,143 206 4,538 206
Total selling, general and
administrative 14,855 12,369 44,199 34,406
Operating profit 21,551 18,721 53,701 40,784
Interest expense (300) (218) (308) (552)
Interest income 53 176 283 746
Settlement of interest rate hedge
agreements - - (4,214) -
Other income, net 93 860 2,453 1,231
Income before income taxes 21,397 19,539 51,915 42,209
Provision for income taxes 7,534 6,877 18,273 14,857
Net income $ 13,863 12,662 33,642 27,352
Earnings per share:
Basic $.74 .67 1.78 1.45
Diluted $.72 .66 1.75 1.43
Cash dividends per common share $.125 .125 .25 .25
Weighted average shares used
in computing earnings per share:
Basic 18,838 18,857 18,849 18,825
Diluted 19,290 19,256 19,263 19,191
See accompanying notes.
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FLORIDA ROCK INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 1999 AND 1998
(In thousands)
(Unaudited)
1999 1998
Cash flows from operating activities:
Net income $33,642 27,352
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation, depletion and amortization 27,546 24,142
Net changes in operating assets and
liabilities excluding working capital acquired:
Accounts receivable (3,555) (7,555)
Inventories 2,259 (2,168)
Prepaid expenses and other 655 339
Accounts payable and accrued liabilities (27) 515
Increase in deferred income taxes 832 1,791
Gain on disposition of property, plant and
equipment (2,061) (1,486)
Other, net 532 119
Net cash provided by operating activities 59,823 43,049
Cash flows from investing activities:
Purchase of property, plant and equipment (78,921) (68,748)
Proceeds from the sale of property, plant and
equipment 3,705 2,186
Additions to other assets (3,485) (1,593)
Business acquisitions, net of cash acquired (90,531) -
Proceeds from the disposition of other assets - 182
Collections of notes receivable 51 176
Net cash used in investing activities (169,181) (67,797)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 75,000 -
Net increase short-term debt 40,629 11,900
Repayment of long-term debt (3,066) (942)
Payment of dividends (2,357) (2,351)
Exercise of employee stock options 3,278 2,894
Repurchase of Company stock (4,029) (1,245)
Net cash provided by financing activities 109,455 10,256
Net increase(decrease) in cash and cash equivalents 97 (14,492)
Cash and cash equivalents at beginning of year 4,457 18,433
Cash and cash equivalents at end of period $ 4,554 $ 3,941
See accompanying notes.
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FLORIDA ROCK INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30,1999
(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 and nine months ended June
30, 1999, are not necessarily indicative of the results that may be
expected for the fiscal year ended September 30, 1999. 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, 1998. Certain amounts for prior periods
have been reclassified to conform with presentation adopted in 1999.
(2) Acquisitions
On June 1, 1999, the Company completed the acquisition of all of the
common stock of Harper Brothers, Inc. and Commercial Testing, Inc.
("Harper") located in Ft. Myers, Florida for $87 million in cash.
The purchase price is subject to certain post-closing adjustments
related to working capital. On July 2, 1999, the Company sold the
fixed assets of Harper's highway and heavy construction operations
for $13.1 million in cash. The Company is under a six month consent
order with the Department of Justice to divest of Harper's sand mine
and the Company's quarry operation in Ft. Myers. At June 30, 1999,
the Company has classified the assets of Harper's highway and heavy
construction operations and sand mine as Assets Held for Sale in the
accompanying Consolidated Balance Sheet.
On June 11, 1999, the Company acquired all of the common stock of
Custom, LTD for $5.8 million in cash.
These acquisitions were accounted for under purchase accounting with
the purchase price allocated to the acquired assets and assumed
liabilities based on estimated fair market values. The allocation
of purchase price is subject to change based on final determination
of the purchase price and fair market value of the net assets. The
estimated fair market value of the assets acquired and liabilities
assumed were considered to be the best estimates as of the
acquisition dates and may be adjusted as more information is
obtained. The excess of the purchase price over the fair market
value of the assets acquired and liabilities assumed amount to
$41,257,000 at June 30, 1999 and is being amortized over 20 to 30
years. The results of operations of these acquisitions since the
date of acquisition are included in the consolidated results of
operations of the Company. The effect on the Company's results of
operations for three months and nine months ended June 30, 1999 was
not material and as a result no proforma information is provided.
The acquisition was funded by borrowings under the Company's existing
revolving credit agreements and a new $50 million line of credit.
(3) Inventories
Inventories consisted of the following (in thousands):
June 30, September 30,
1999 1998
Finished products $ 20,139 20,683
Raw materials 3,912 4,096
Parts and supplies 727 756
$ 24,778 25,535
(4) Interest Rate Hedge Agreements
In anticipation of obtaining a financing commitment to provide
capital for various projects and equipment, the Company entered into
interest rate hedge agreements for a notional amount of $70,000,000
with a settlement date of December 31, 1998 in an attempt to manage
the interest rate risk associated with securing a long-term fixed
rate at a future date. A number of factors were taken into account
with respect to the specific timing associated with securing a firm
financing commitment. Among those was the timing associated with
management's expectations of when the cash is required for the
capital outlays. The Company originally anticipated a firm financing
commitment would be arranged with a private placement offering during
the first or second quarter of fiscal 1999.
On December 31, 1998, the Company settled the agreements pursuant to
the contracts and on January 4, 1999 made a payment of $4,214,000.
As a result of changed capital requirements, improved cash flow and
adequate existing credit availability, management decided not to
pursue a commitment for long-term financing. Accordingly, the
settlement cost was expensed in the first quarter of fiscal 1999.
(5) Supplemental Disclosures of Cash Flow Information
Cash paid during the nine months ended June 30, 1999 and 1998 for
certain expense items are (in thousands):
1999 1998
Interest expense, net of
amount capitalized $ 332 540
Income taxes $17,741 11,282
The following summarizes noncash investing and financing
activities for the nine months ended June 30, 1999 and 1998
(in thousands):
1999 1998
Additions to property, plant
and equipment from:
Exchanges $ 515 332
Issuing debt - 2,963
Using escrow cash included
in other assets $ 7,073 8,792
(6) Preferred Shareholder Rights Plan
On May 5, 1999, the Board of Directors of the Company declared a
dividend of one preferred share purchase right (a "Right") for each
outstanding share of common stock. The dividend was payable on June
11, 1999. Each right entitles the registered holder to purchase from
the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock of the Company, par value $.01 per
share (The "Preferred Shares"), at a price of $145 per one
one-hundredth of a Preferred Share, subject to adjustment.
In the event that any Person or group of affiliated or associated
Persons (an "Acquiring Person") acquires beneficial ownership of 15%
or more of the Company's outstanding common stock each holder of a
Right, other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right to
receive upon exercise that number of Common Shares having a market
value of two times the exercise price of the Right. An Acquiring
Person excludes any Person or group of affiliated or associated
Persons who were beneficial owners, individually or collectively, of
15% or more of the Company's Common Shares on May 4, 1999.
The rights will initially trade together with the Company's common
stock and will not be exercisable. However, if an Acquiring Person
acquires 15% or more of the Company's common stock the rights may
become exercisable and trade separately in the absence of future
board action. The Board of Directors may, at its option, redeem all
rights for $.01 per right, at any time prior to the rights becoming
exercisable. The rights will expire September 30, 2009 unless
earlier redeemed, exchanged or amended by the Board.
(7) Legal Proceedings
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 1998 Annual Report to stockholders, Item 3
"Legal Proceedings" of the Company's Form 10-K for fiscal 1998 and
Item 3 "Legal Proceedings" of the Company's Form 10-Q for the quarter
ended March 31, 1999. Such information is incorporated herein by
reference.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Operating Results
For the third quarter of fiscal 1999, ended June 30, 1999, consolidated net
sales increased 15.4% to $152,257,000 from $131,973,000 in the same quarter
last year. For the nine months of fiscal 1999, consolidated net sales
increased 22.3% to $429,459,000 from $351,208,000 last year. The increase in
sales was primarily attributable to strong demand for construction products in
the Company's markets. Sales also increased as a result of modest price
increases in core products.
Gross profit for the third quarter increased 17.1% to $36,406,000 from
$31,090,000 last year. For the first nine months of 1999, gross profit
increased 30.2% to $97,900,000 from $75,190,000 last year. The increase in
gross profit was primarily attributed to higher sales levels and modest price
increases.
Gross profit margin for the third quarter increased to 23.9% from 23.6% and for
the nine months increased to 22.8% from 21.4% last year primarily as a result
of the improved sales and lower maintenance and other quarry costs compared to
costs incurred during last year.
Selling, general and administrative expense excluding system upgrades increased
12.7% for the third quarter and 16.0% for the nine months. The increase was
primarily attributable to the increase in sales, increased profit sharing and
incentive compensation which is linked to profitability. Selling, general and
administrative expense excluding system upgrades for the third quarter
decreased to 9.0% of sales from 9.2% last year and for the nine months
decreased to 9.2% from 9.7% last year. System upgrades/Year 2000 costs totaled
$1,143,000 and $4,538,000 for the third quarter and for the nine months of
1999, respectively. These costs were $206,000 for the third quarter and nine
months of 1998.
Interest expense for the third quarter increased to $300,000 from $218,000 due
to increased borrowing partially offset by an increase in the amount of
interest capitalized. For the nine months interest expense decreased to
$308,000 from $552,000 last year due to an increase in the amount of interest
capitalized this year partially offset by increase borrowings. For the third
quarter of fiscal 1999, interest capitalized was $864,000 versus $337,000 last
year. For the nine months of 1999, interest capitalized was $2,093,000 versus
$737,000 last year.
As discussed in Note 4, the Company expensed during the first quarter of fiscal
1999 $4,214,000 in conjunction with interest rate hedge agreements. Included
in other income for first nine months of 1999 is $805,000 of income from a
settlement of a class action lawsuit and $1,177,000 from the gain on the sale
of real estate.
Year 2000 Conversion. The Company, like most entities relying on automated
data processing, is faced with the task of modifying systems to become Year
2000 compliant. During 1996, the Company began an analysis to determine which
of its business systems were not Year 2000 compliant. During the second quarter
of calendar 1998, the Company completed the development of plans for addressing
its Year 2000 exposure as well as reengineering selective systems to enhance
their functionality. A steering committee has been formed to monitor the
progress of becoming Year 2000 compliant. This committee is comprised of key
personnel from the major functional areas of the Company and meets monthly.
The Committee reports the progress of the Company's Year 2000 conversion to the
Board of Directors.
The Company is in various stages of modifying or replacing both internally
developed and purchased software. The Company has purchased new state of the
art financial and administrative systems software and hardware that is
represented to be Year 2000 compliant. An implementation consultant has been
engaged to assist in replacing the existing major systems. During the first
quarter of calendar 1999, the Company began to phase-in modules of the
purchased software. The Company has implemented general ledger, fixed assets,
purchasing and accounts payable modules. During August and September of 1999,
accounts receivable, billing and payroll modules will be implemented.
Substantially all of the internally generated software is now Year 2000
compliant. The balance will be Year 2000 compliant in the near future.
The Company has completely surveyed all its locations to identify operating
equipment which may be affected by Year 2000. The Company is in process of
testing such equipment to determine if such equipment is Year 2000 compliant.
When equipment has been identified as not Year 2000 compliant, the Company is
determining remediation steps to be taken including replacing the equipment.
Vendors, suppliers and customers that are critical to the Company's operations
have been identified. Questionnaires were sent to these entities to determine
their state of readiness for Year 2000. The Company is evaluating responses
from these questionnaires and contacting vendors and suppliers where necessary.
The Company will identify alternative vendors and suppliers as a contingency
if any of the current suppliers do not appear to be taking corrective actions
and are not Year 2000 compliant.
The Company, under an agreement with its affiliate, FRP Properties, Inc.
("FRPP"), provides certain administrative services, including automated data
processing to FRPP ("FRPP Services"). The FRPP Services are included within
the scope of the Company's Year 2000 project.
The costs associated with the purchase and installation of the software and
hardware will be capitalized and amortized over the estimated useful life of
the software or hardware. At June 30, 1999, approximately $4,179,000 had been
capitalized. Other costs associated with the project such as selection,
training and reengineering of the existing processes are being expensed as
incurred. The Company has expensed $2,209,000 during fiscal 1998 and
$4,538,000 during the first nine months of 1999 of which $1,143,000 was
recorded in the third quarter related to this project. Based on current
information, the Company estimates that it will incur an additional $3,400,000
over the next six months as a result of the Year 2000 project of which
approximately 65% will be capitalized.
The Company feels it is addressing in a timely manner the major issues related
to the Year 2000 and any significant disruptive problems in its ability to
conduct its business as a result are unlikely. The Company's contingency
plans are substantially completed and will be finalized during the third
quarter of calendar 1999. This plan will assess the risks and possible
countermeasures. However, despite efforts and initiatives undertaken by the
Company, total assurance can not be given that absolute compliance can be
achieved. There can be no guarantees that the computer systems of other
entities on which the Company relies will be converted in a timely manner or
that their failure to convert, or a conversion that is incompatible with the
Company's system, will not have an adverse effect on the Company's business,
financial condition and results of operations.
Summary and Outlook. General economic conditions are expected to remain
favorable for the remainder of the year and should continue to be positive for
the industry and Company notwithstanding indications that the economy is likely
to slow in the last half of the year. Despite the recent rate hike by the
Federal Reserve, the impact on the industry's fundamentals should be minor.
Strong demand for construction aggregates and concrete products should continue
and remain unabated through the end of the year. Residential construction in
the Company's markets continues to be healthy with the level of activity
continuing to vary by region. Non-residential construction remains strong
although there are indications of slowing activity in some areas. Public
spending on federal highways and infrastructure should increase in the later
half of the calendar year as a result of the Transportation Equity Act for the
21st Century (TEA21). The Company anticipates a strong fourth quarter and
record year.
Financial Condition
The Company continues to maintain its financial condition. During January
1999, the Company increased its available short-term lines of credit by
$10,000,000. In May 1999, the Company arranged a $50,000,000 364 day credit
facility that expires in May 2000. Management believes that internal sources
of cash flow and current availability under existing credit agreements provide
adequate sources of liquidity to finance its operations and planned capital
expenditures.
In February 1999, the Board of Directors authorized management to repurchase
$20,000,000 of the Company's common stock from time to time as opportunities
may arise. The Company has purchased approximately $2,000,000 under this
authorization. In August 1999, the Board of Directors changed the dividend
payment dates from semi-annually to quarterly and declared an increase in the
dividend from $.25 per share to $.40 per share on an annual basis. The first
quarterly cash dividend of $.10 per share will be payable October 1, 1999, to
shareholders of record at the close of business on September 15, 1999.
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 Item 3 "Legal Proceedings" of the Company's Form 10-K for
fiscal 1998 and such information is incorporated herein by reference.
Cement Plant. The Company commenced the construction of the cement plant near
Newberry, Alachua County, Florida in March 1997 with an estimated cost of $100
million. Construction has entered the final stages and nears completion. The
Company anticipates that construction will be completed by the end of the
fiscal year at which time the Company will commission the plant into service
and begin the steps necessary to place the plant in production which should be
completed by the end of the first quarter of fiscal 2000. The Company received
necessary zoning and permit approvals from Alachua County and the Florida
Department of Environmental Protection. Lawsuits pertaining to the appeal of
the zoning and air permits issued for the plant were resolved in favor of the
Company. A local Alachua County citizens' Clean Air referendum on the ballot
for the November 3, 1998 general election which would have been adverse to the
Company was rejected. On January 22, 1999, the County Comissioners of Alachua
County, Florida voted 3-2 to make the Company's cement plant comply with
emissions standards submitted to the county in November 1994 on the Company's
initial special-use permit application. The Company had revised its
submission before approval and issuance by Alachua County of the special-use
permit to incorporate standards approximating those contained in the air permit
issued by the Florida Department of Environmental Protection. The new Alachua
County action on its face requires the Company to comply with much stricter
emission levels than approved by the Florida Department of Environmental
Protection. If this Alachua County action is enforced and upheld the Company
does not believe it could comply. On January 25, 1999 the City Commissioners
of Newberry, Florida voted 4-0 to annex the Company's cement plant site into
the city. The Company anticipates that future land use and zoning matters
relating to the cement plant will be under the jurisdiction of the City of
Newberry, initially subject to Alachua County existing special-use permit
zoning with such other conditions, if any, as may be held to be valid and
enforceable. The Company has filed suit against Alachua County to enforce its
permit as originally issued.
The Company will continue to defend vigorously its legal and constitutional
rights.
Forward-Looking Statements. Certain matters discussed in this report contain
forward-looking statements that are subject to risks and uncertainties that
could cause actual results to differ materially from these indicated by such
forward-looking statements. These forward-looking statements relate to, among
other things, capital expenditures, liquidity, capital resources, competition
and the Year 2000 and may be indicated by words or phrases such as
"anticipate," "estimate," "plans," "project," "continuing," "ongoing,"
"expects," "management believes," "the Company believes," "the Company intends"
and similar words or phrases. The following factors are among the principal
factors that could cause actual results to differ materially from the
forward-looking statements: Year 2000 technology issues; availability and terms
of financing; the weather; competition; levels of construction activity in the
Company's markets; fuel costs; transportation costs; inflation; quality and
quantities of the Company's aggregates reserves; and management's ability to
determine appropriate sales mix, plant location and capacity utilization.
QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Except for the settlement of the Interest Rate Hedge Agreements as disclosed
in Note 4, there have been no material changes to the disclosure made in the
Form 10-K for the fiscal year ended September 30, 1998 on this matter.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Note 12 to the consolidated financial statements included in the Company's 1998
Annual Report to stockholders, and Item 3 "Legal Proceedings" of the Company's
Form 10-K for fiscal 1998 and Item 3 "Legal Proceedings" of the Company's Form
10-Q for the quarter ended March 31, 1999 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 11 of this Form 10-Q.
(b) Reports on Form 8-K. During the three months ended June 30, 1999, the
Company filed the following:
1) Form 8-K dated May 5, 1999 reporting a dividend of one
preferred share purchase right for each share of common
stock under Item 5, "Other Events."
2) Form 8-K dated June 1, 1999 reporting the acquisition of
all of the common stock of Harper Brothers, Inc. under
Item 2, "Acquisition or Disposition of Assets" and "Item
7, "Financial Statements, Pro Forma Financial
Information and Exhibits" and obtaining an unsecured $50
million revolving line of credit and amendment of the
Company's Revolving Credit and Term Loan Agreement under
Item 5, "Other Events."
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 there unduly authorized.
August 11, 1999 FLORIDA ROCK INDUSTRIES, INC.
\s\JAMES J. GILSTRAP
James J. Gilstrap
Vice President, Treasurer
and Chief Financial Officer
\s\WALLACE A. PATZKE, JR.
Wallace A. Patzke, Jr.
Vice President and Chief
Accounting Officer
<PAGE>
FLORIDA ROCK INDUSTRIES, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1999
EXHIBIT INDEX
(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.
(2)(b) Stock Purchase Agreement, dated as of May 21, 1999 by
and between Daniel K. Harper, Quinton B. McNew, the
Company and Harper Bros., Inc. Previously, filed as
Exhibit 2.1 to the Company's Form 8-K dated June
1,1999. 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 the State of Florida on February 7,
1995. Previously filed as appendix to the Company's
Proxy Statement dated December 15, 1994.
(3)(a)(4) Amendment to the Articles of Incorporation of
Florida Rock Industries, Inc. filed with the
Secretary of State of Florida on February 4, 1998.
Previously filed with Form 10-Q for the quarter
ended March 31, 1998. File No. 1-7159.
(3)(a)(5) Amendment to Articles of Incorporation of Florida
Rock Industries, Inc. filed with the Florida
Secretary of State on May 6, 1999. A form of such
amendment was previously filed as Exhibit 4 to the
Company's Form 8-K dated May 5, 1999. File No. 1-7159.
(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.
(3)(b)(3) Amendment to the Bylaws of Florida Rock Industries,
Inc. adopted February 4, 1998. Previously filed
with Form 10-Q for the quarter ended March 31, 1998.
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. 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 1-7159.
(4)(b)(4) Third amendment dated as of June 30, 1997, 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,
1997. File No. 1-7159.
(4)(b)(5) Fourth Amendment dated as of July 5, 1998, 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 year ended September 30,
1998. File No. 1-7159.
(4)(b)(6) Fifth Amendment dated as of May 14, 1999, to the
Amended and Restated Revolving Credit and Term Loan
Agreement dated as of December 5,1990. Previously,
filed with Form 8-K dated June 1, 1999. File No. 1-7159.
(4)(c) Promissory Note dated May 28,1999, from the Company to
First Union National Bank. Previously, filed as
Exhibit 4.2 to the Company's Form 8-K dated June 1,
1999. File No. 1-7159.
(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.
(4)(e) Rights Agreement, dated as of May 5, 1999 between the
Company and First Union National Bank. Previously,
filed as Exhibit 4 to the Company's Form 8-K dated May
5, 1999. File No. 1-7159.
(10)(a) 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)(b) 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)(c) Florida Rock Industries, Inc. 1981 Stock Option Plan.
Previously filed with Form S-8 dated March 3, 1982.
File No. 2-76407.
(10)(d) 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)(e) 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)(f) 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)(g) 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)(h) 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)(I) 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)(j) 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)(k) 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)(l) 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)(m) Form of Split Dollar Insurance Agreement and
Assignment of Life Insurance Policy as collateral
between Florida Rock Industries, Inc. and each of
Edward L. Baker and John D. Baker, II with aggregate
face amounts of $5.4 million and $8.0 million,
respectively. Previously filed with Form 10-Q for
the quarter ended June 30, 1997. File 1-7159.
(10)(n) 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
(99)(a) Information Concerning Environmental Matters and Legal
Proceedings. Previously filed as Item 3 "Legal
Proceedings" of Florida Rock Industries, Inc.'s, Form
10-K for fiscal year ended September 30,1998. File
No. 1-7159.
(99)(b) Information Concerning Legal Proceedings. Previously
filed as Note 12 to the Consolidated Financial
Statements in the Company's 1998 Annual Report to
Stockholders. File No. 1-7159.
<PAGE>
<PAGE>
Exhibit (11)
FLORIDA ROCK INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998 1999 1998
Net income $13,863,000 12,662,000 33,642,000 27,352,000
Common shares:
Weighted average shares
outstanding during the
period - used for basic
earnings per share 18,837,859 18,857,151 18,848,557 18,825,234
Shares issuable under
stock options which are
potentially dilutive 451,697 399,181 414,328 365,770
Shares used for diluted
earnings per share 19,289,556 19,256,332 19,262,885 19,191,004
Basic earnings per
common share $.74 .67 1.78 1.45
Diluted earnings
per common share $.72 .66 1.75 1.43
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