SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 22, 1996
Lone Star Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-2333 13-0982660
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
300 First Stamford Place, P. O. Box 120014, Stamford, CT 06912-0014
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 969-8600
ITEM 5. OTHER EVENTS.
On July 22, 1996 Lone Star Industries, Inc. made public disclosure
of the following by a press release for immediate release:
Stamford, Connecticut, July 22, 1996--Lone Star Industries, Inc.
(NYSE/LCE) announced today net income of $17.3 million, or $1.26
per share, on sales of $102.3 million for the quarter ended June
30, 1996. The financial results for the second quarter of 1996
represent a 42% improvement in earnings per share as compared to
the results reported for the comparable period of 1995. For the
six months ended June 30, 1996, the Company reported net income of
$14.0 million, or $1.05 per share, on sales of $155.3 million.
For the same period of 1995, net income was $7.1 million, or $0.58
per share, on sales of $140.3 million. Per share earnings are
calculated as if Lone Star was fully taxable despite a continuing
net operating loss carryforward.
The Company stated that it had received numerous unsolicited
expressions of interest in an affiliation or merger with the
Company since the beginning of the year, but has decided that an
affiliation or sale of the Company is not in the best interests of
all of its shareholders. Thus, Lone Star has terminated
conversations with all parties who had expressed an interest.
The Company stated that it expects to resume open market purchases
of its common stock under an existing and continuing stock
repurchase program. Further, the Company also stated that it
intends at the August meeting of its Board of Directors to propose
a plan of refinancing that would provide fewer restrictions on the
repurchase of its stock by paying off its presently outstanding
10% Notes and borrowing at least $125 million. The Board is
expected to approve this program. If this is accomplished, the
Company intends to repurchase additional shares.
The proposed program will not in any way inhibit ongoing capital
spending programs. Outlook for the present year continues to be
bright.
For the three months ended June 30, 1996, cement operations
reported sales of $75.4 million and gross profits of $24.8 million
versus sales and gross profits of $61.9 million and $21.6 million,
respectively, for the comparable period of 1995. For the six
months ended June 30, 1996, cement operations reported sales of
$118.4 million and gross profits of $30.7 million compared with
1995 six month sales and gross profits of $102.8 million and $26.3
million, respectively. Sales volumes for the second quarter and
first six months of 1996 were 17% and 9%, respectively, higher
than the comparable periods of 1995 due to strong demand for
cement, better weather conditions in 1996 compared to the
abnormally wet second quarter of 1995 and higher sales of slag
cement. Net realized selling prices in the second quarter and
first six months of 1996 were higher than the comparable periods
in 1995 by 4% and 6%, respectively.
In the second quarter of 1996, construction aggregates operations
had sales of $13.5 million and gross profits of $4.2 million
versus sales and gross profits of $15.6 million and $3.3 million,
respectively, for the second quarter of 1995. For the six months,
construction aggregates operations had sales of $16.6 million and
gross profits of $0.1 million versus sales and a loss at the gross
profit level of $21.2 million and $0.9 million, respectively, in
1995. The decline in construction aggregate sales reflects the
sale of the Nova Scotia quarry operations in the fourth quarter of
1995.
For the second quarter of 1996, ready-mixed concrete and other
operations had sales of $13.4 million and gross profits of $3.0
million versus sales and gross profits of $10.1 million and $1.6
million, respectively, in 1995. For the six months, the 1996 sales
and gross profits were $20.3 million and $3.4 million versus sales
and gross profits of $16.2 million and $1.5 million respectively, in 1995.
Construction activity has been particularly strong in the Memphis,
Tennessee area which has benefited our operations.
Rosebud Holdings, Inc., the subsidiary formed by Lone Star in its
reorganization to liquidate certain non-core assets, redeemed the
remaining $4.4 million in principal amount of Asset Proceeds Notes
on June 20, 1996. The Notes were paid off in full one year ahead
of the maturity date.
Upon emergence from bankruptcy, the Company provided a full
valuation allowance against its various deferred tax assets which
consisted primarily of the expected future tax benefit of
operating loss carryforwards, various credit carryforwards and
reserves not yet deductible for tax purposes. The Company reduced
the valuation allowance by $50,000,000 in the second quarter of
1996 based on the expectation that it is more likely than not to
generate at least enough future taxable income to utilize this
amount of net deferred tax assets. The benefit from this
reduction is recorded as an addition to paid-in capital in
accordance with the provisions of AICPA Statement of Position 90-
7, "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code", and does not affect earnings. A June 30, 1996
condensed balance sheet reflecting this action and indicating a
43% increase in shareholders' equity is attached.
Lone Star Industries, Inc. is a producer of cement, ready-mixed
concrete, sand and gravel, crushed stone and other construction
materials.
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LONE STAR INDUSTRIES, INC.
CONSOLIDATED SUMMARY OF EARNINGS (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
For the Three Months For the Six Months
Ended June 30 Ended June 30
1996 1995 1996 1995
Consolidated Income
Revenues:
Net Sales $102,307 $ 87.553 $155,294 $140,264
Joint Venture Income 1,947 1,551 2,477 2,224
Other Income, Net 660 643 2,223 1,810
104,914 89,747 159,994 144,298
Deductions from Revenues:
Cost of Sales 64,637 55,208 109,578 101,783
Selling, General &
Administrative Expenses 7,049 7,629 14,260 15,253
Depreciation & Depletion 5,790 5,907 11,734 11,737
Interest Expense 1,672 2,336 3,546 4,677
79,148 71,080 139,118 133,450
Income Before
Income Taxes 25,766 18,667 20,876 10,848
Provision for
Income Taxes (8,503) (6,534) (6,889) (3,797)
Income Applicable
to Common Stock $ 17,263 $12,133 $13,987 $ 7,051
Weighted Average
Common Shares Outstanding 11,427 12,071 11,451 12,069
Primary Income
Per Common Share $1.26 $0.89 $1.05 $0.58
Fully Diluted Income
Per Common Share $1.26 $0.89 $1.03 $0.57
(1) Primary and fully diluted earnings per share are calculated using
the modified treasury stock method due to the large number of
outstanding common stock equivalents, unless the result is anti-
dilutive.
LONE STAR INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)
June 30, 1996 December 31, 1995
(Unaudited)
ASSETS
Cash and Marketable Securities $35,171 $50,049
Accounts and Notes Receivable, Net 44,511 31,403
Inventories 60,151 55,476
Deferred Tax Asset 10,000 -
Other Current Assets 4,985 5,289
Total Current Assets 154,818 142,217
Joint Ventures 22,129 21,152
Property, Plant & Equipment, Net 319,939 311,397
Deferred Tax Asset 40,000 -
Other Non-Current Assets 5,477 1,761
Total Assets Other than
Liquidating Subsidiary 542,363 476,527
Net Assets of Liquidating Subsidiary - 4,399
TOTAL ASSETS $542.363 $480,926
LIABILITIES AND SHAREHOLDERS' EQUITY
Total Current Liabilities $60,045 $60,567
Senior Notes Payable 78,000 78,000
Pension and Postretirement Benefits 135,422 138,073
Other Non-Current Liabilities 40,931 40,147
Total Liabilities Other than
Liquidating Subsidiary 314,398 316,787
Asset Proceeds Notes of
Liquidating Subsidiary - 4,399
Total Liabilities 314,398 321,186
Shareholders' Equity 227,965 159,740
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $542,363 $480,926
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Lone Star Industries, Inc. has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
LONE STAR INDUSTRIES, INC.
By: /s/ James W. Langham
James W. Langham
Vice President
Date: July 24, 1996
