<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - --- EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1995
------------------------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - --- EXCHANGE ACT OF 1934
For the transition period from to
--------------- ---------------
Commission file number 0-11936
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LAFARGE CORPORATION
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 58-1290226
- - -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11130 SUNRISE VALLEY DRIVE, SUITE 300, RESTON, VA 22091
- - -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
703-264-3600
- - -------------------------------------------------------------------------------
(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 the latest practicable date.
<TABLE>
<CAPTION>
Outstanding as of
Class October 31, 1995
--------------------------------- ----------------
<S> <C>
Common Stock of Lafarge Corporation
($1 par value) 60,512,820
Exchangeable Preference Shares of
Lafarge Canada Inc.
(no par value) 8,491,445
-----------
Total Common Equity Interests 69,004,265
===========
</TABLE>
Number of pages contained in this report 16
----
Total sequentially numbered pages 16
----
Exhibit index on page 14
--
1
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LAFARGE CORPORATION AND SUBSIDIARIES
FORM 10-Q - FOR THE QUARTER ENDED SEPTEMBER 30, 1995
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
a) Condensed Consolidated Statements
of Income - Three-Month and Nine-Month
Periods Ended September 30, 1995 and 1994 3
b) Condensed Consolidated Balance Sheets -
September 30, 1995, September 30, 1994,
and December 31, 1994 4
c) Condensed Consolidated Statements of
Cash Flows - Nine-Month Period
Ended September 30, 1995 and 1994 5
d) Condensed Consolidated Geographic Information -
Three-Month and Nine-Month Periods
Ended September 30, 1995 and 1994 6
e) Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 6(a). Exhibits 14
Item 6(b). Reports on Form 8-K 14
SIGNATURE 15
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LAFARGE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited and in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ------------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET SALES $ 510,459 $ 528,416 $1,103,268 $1,159,563
---------- ---------- ---------- ----------
COST AND EXPENSES
Cost of goods sold 364,227 384,296 870,262 940,882
Selling and administrative 35,770 42,399 107,666 121,685
Interest expense, net 4,899 9,297 13,327 26,114
Other expense (income), net (275) (3,509) (2,848) 3,607
---------- ---------- ---------- ----------
Total costs and expenses 404,621 432,483 988,407 1,092,288
---------- ---------- ---------- ----------
Pre-tax income 105,838 95,933 114,861 67,275
Income tax expense (19,963) (23,744) (21,321) (18,816)
---------- ---------- ---------- ----------
NET INCOME $ 85,875 $ 72,189 $ 93,540 $ 48,459
========== ========== ========== ==========
NET INCOME PER COMMON
EQUITY SHARE-PRIMARY $ 1.24 $ 1.06 $ 1.36 $ .71
========== ========== ========== ==========
NET INCOME PER COMMON
EQUITY SHARE-ASSUMING
FULL DILUTION $ 1.19 $ 1.01 $ 1.35 $ .71
========== ========== ========== ==========
DIVIDENDS PER COMMON EQUITY SHARE $ .10 $ .075 $ .275 $ .225
========== ========== ========== ==========
Average number of common equity
shares outstanding 69,254 68,322 68,864 68,244
========== ========== ========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE> 4
LAFARGE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited and in thousands)
<TABLE>
<CAPTION>
September 30 September 30 December 31
1995 1994 1994
------------ ------------ -----------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 123,360 $ 157,151 $ 193,057
Short-term investments 4,000 - 50,500
Receivables, net 368,737 364,751 257,093
Inventories 202,193 171,441 175,433
Other current assets 39,016 32,255 31,052
---------- ---------- ----------
Total current assets 737,306 725,598 707,135
Property, plant and equipment, net 800,914 779,659 751,880
Excess of cost over net assets
of businesses acquired, net 20,123 25,830 21,926
Other assets 172,140 161,822 170,490
---------- ---------- ----------
TOTAL ASSETS $1,730,483 $1,692,909 $1,651,431
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 248,385 $ 256,871 $ 247,378
Income taxes payable 43,431 36,670 39,614
Current portion of long-term debt 8,632 36,224 17,813
---------- ---------- ----------
Total current liabilities 300,448 329,765 304,805
Long-term debt 278,832 313,878 290,668
Deferred income tax 44,102 81,265 68,326
Other postretirement benefits 123,829 120,237 120,591
Other long-term liabilities 24,402 12,621 25,587
---------- ---------- ----------
Total liabilities 771,613 857,766 809,977
---------- ---------- ----------
Common equity interests
Common shares 60,509 59,512 59,694
Exchangeable shares 58,159 57,676 57,805
Additional paid-in-capital 589,435 570,670 576,054
Retained earnings 299,506 197,854 224,908
Foreign currency translation adjustments (48,739) (50,569) (77,007)
---------- ---------- ----------
Total shareholders' equity 958,870 835,143 841,454
---------- ---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,730,483 $1,692,909 $1,651,431
========== ========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE> 5
LAFARGE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited and in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
---------------------
1995 1994
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS
Net income $ 93,540 $ 48,459
Adjustments to reconcile net income
to net cash provided by operations:
Depreciation, depletion and amortization 71,678 80,753
Provision for doubtful accounts 2,099 3,945
Gain on sale of assets (12,753) (8,563)
Other postretirement benefits 2,569 2,218
Restructuring (4,161) (11,619)
Other non-cash charges and credits, net (35,205) (15,540)
Changes in working capital (128,757) (68,977)
-------- --------
Net cash provided (consumed) by operations: (10,990) 30,676
-------- --------
CASH FLOWS FROM INVESTING
Capital expenditures (94,363) (69,210)
Acquisitions (24,078) (4,371)
Short-term investments 46,500 -
Proceeds from property, plant and
equipment dispositions 27,025 121,733
Other 3,584 3,939
-------- --------
Net cash provided by (used for) investing (41,332) 52,091
-------- --------
CASH FLOWS FROM FINANCING
Net decrease in long-term borrowings (21,074) (37,473)
Issuance of equity securities 2,995 11,189
Dividends, net of reinvestments (7,387) (8,056)
-------- --------
Net cash consumed by financing (25,466) (34,340)
-------- --------
Effect of exchange rate changes 8,091 (570)
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (69,697) 47,857
CASH AND CASH EQUIVALENTS AT
THE BEGINNING OF THE PERIOD 193,057 109,294
-------- --------
CASH AND CASH EQUIVALENTS AT
THE END OF THE PERIOD $ 123,360 $ 157,151
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE> 6
LAFARGE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Geographic Information
(Unaudited and in thousands)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ------------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET SALES
Canada $ 244,574 $ 239,190 $ 497,933 $ 481,693
United States 265,885 289,226 605,335 677,870
---------- ---------- ---------- ----------
TOTAL NET SALES $ 510,459 $ 528,416 $1,103,268 $1,159,563
========== ========== ========== ==========
INCOME FROM OPERATIONS
Canada $ 54,837 $ 48,615 $ 54,269 $ 27,782
United States 55,900 56,615 73,919 65,607
---------- ---------- ---------- ----------
TOTAL INCOME FROM
OPERATIONS 110,737 105,230 128,188 93,389
Interest expense, net (4,899) (9,297) (13,327) (26,114)
---------- ---------- ---------- ----------
PRE-TAX INCOME $ 105,838 $ 95,933 $ 114,861 $ 67,275
========== ========== ========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
6
<PAGE> 7
LAFARGE CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
1. The Registrant is engaged in the production and sale of cement,
ready-mixed concrete, other concrete products, asphalt and aggregates.
The Registrant operates in the U.S. and, through its major operating
subsidiary Lafarge Canada Inc. ("LCI"), in Canada. The Registrant's
wholly-owned subsidiary, Systech Environmental Corporation, is engaged
in waste recovery and disposal utilizing industrial wastes as
supplemental fuels in cement kilns. Lafarge S.A., a French
corporation, and certain of its affiliates own a majority of the
Registrant's outstanding voting securities.
2. The condensed consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. As a result, certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. The Registrant believes that the disclosures made are
adequate to make the information presented not misleading. These
condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and related
notes included in the Registrant's 1994 Annual Report on Form 10-K.
3. Because of seasonal, weather-related conditions in several of the
Registrant's marketing areas, earnings of any one quarter should not
be considered as indicative of results to be expected for a full
fiscal year or any other interim period.
4. Substantially all U.S. inventories other than maintenance and
operating supplies are costed using the last-in, first-out ("LIFO")
method and all other inventories are valued at average cost. At
September 30, 1995 and 1994, and at December 31, 1994, inventories
consisted of the following (in thousands):
<TABLE>
<CAPTION>
September 30 September 30 December 31
1995 1994 1994
------------ ------------ -----------
<S> <C> <C> <C>
Finished products $ 96,677 $ 77,084 $ 82,324
Work in process 14,397 8,416 8,427
Raw materials and fuel 49,351 44,851 45,291
Maintenance and operating
supplies 41,768 41,090 39,391
---------- ---------- -----------
Total inventories $ 202,193 $ 171,441 $ 175,433
========== ========== ===========
</TABLE>
7
<PAGE> 8
5. Cash paid during the period for interest and taxes is as follows (in
thousands):
<TABLE>
<CAPTION>
Nine Months
Ended September 30
----------------------
1995 1994
-------- --------
<S> <C> <C>
Interest $ 8,253 $ 20,349
Income taxes (net of refunds) 48,066 22,538
</TABLE>
6. The 1995 amounts shown as income from operations for the nine months
ended September 30, 1995 for Canada and the United States in the
condensed consolidated geographic information exclude the $30.1
million of cumulative adjustments resulting from an agreement reached
with Revenue Canada during the second quarter of 1995 related to the
pricing of certain cement sales between the Registrant's operations in
Canada and the U.S. If these adjustments were reflected, net sales
and income from operations from Canada would be increased and income
from operations for the U.S. would be decreased. There would be no
impact on consolidated income from operations.
7. See Part II Item 1 on page 13 for a discussion of the material
developments in legal proceedings. It is the opinion of management
that all legal and environmental matters will be resolved without
material effect on the Registrant's consolidated financial statements.
8. During the third quarter of 1995, management reduced the valuation
allowance previously provided against the Registrant's U.S. deferred
tax assets by $23.3 million. This change in the recorded valuation
allowance is reflected as a reduction in the third quarter income tax
provision. This reduction stems from the favorable long-term outlook
for the U.S. cement market, the Registrant's income forecasts which
indicate that 1995 will represent the third consecutive year of
taxable income in the U.S. and management's projections of future
taxable income in the U.S. which is expected to be in excess of
amounts needed to realize these deferred tax assets. Management
believes it is more likely than not that the related deferred tax
assets will be realized.
9. In the opinion of management, the accompanying condensed consolidated
financial statements reflect all adjustments (which included only
normal recurring adjustments except as discussed above) necessary to
present fairly the Registrant's financial position as of the
applicable dates and the results of its operations and the changes in
its cash flows for the interim periods presented.
8
<PAGE> 9
LAFARGE CORPORATION AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
THREE MONTHS ENDED SEPTEMBER 30, 1995
The Registrant reported net income of $85.9 million for the quarter ended
September 30, 1995, 19 percent higher than last year's third quarter earnings
of $72.2 million. Earnings per common equity share were $1.24 compared with
$1.06. The main factors contributing to the earnings improvement were an
increase in cement income from operations (due to a 6 percent increase in
cement prices), lower interest expense and a decrease in income tax expense.
The Registrant's Canadian operations reported net income of $33.7 million, a
$6.9 million increase over 1994. In the U.S., net income was $52.2 million,
$6.8 million better than last year.
The Registrant's net sales declined 3 percent to $510.5 million from $528.4
million in 1994. However, after adjusting for the absence of sales from the
Registrant's 1994 divestments in the U.S., net sales from continuing operations
increased 6 percent. Canadian net sales were $244.6 million, a 2 percent
increase. U.S. net sales decreased 8 percent to $265.9 million due to the 1994
divestments. After adjusting for the impact of divestments, cement sales
volumes and ready-mixed concrete shipments declined 4 percent and 9 percent,
respectively, while aggregate shipments were unchanged.
The third quarter contribution from the Registrant's cement operations was
$87.9 million, $10.9 million higher than last year. A 6 percent increase in
the average net selling price more than offset the cost of higher cement
purchases and slightly lower cement shipments. Higher U.S. cement purchases
were initiated in the second quarter in anticipation of higher cement demand in
the third quarter. Net sales increased 4 percent, whereas net sales from
continuing operations were up 8 percent. The Canadian contribution was $26.1
million, $1.3 million worse than 1994. Improved earnings in eastern Canada,
due to price increases, were more than offset by lower earnings in western
Canada from a decline in sales volumes (mainly in British Columbia and Alberta)
totalling 14 percent. Due to a 6 percent increase in the average net selling
price (before exchange rate fluctuation) Canadian net sales increased 3
percent. Cement shipments declined 8 percent, reflecting lower demand in
Quebec, Ontario, British Columbia and Alberta. The U.S. contribution was
$61.8 million, $12.2 million better than 1994. An increase in the average net
selling price of 7 percent was partially offset by lower sales volumes from
continuing operations (2 percent) and lower margins from higher cement and
clinker purchases. The decline in shipments reflects a construction slowdown
in various markets. Due to an increase in the average net selling price, net
sales escalated 5 percent; however, after adjusting for 1994 divestments, net
sales climbed 10 percent.
Earnings from the Registrant's construction materials and waste management
operations were $32.5 million, $0.4 million worse than 1994. Net sales
9
<PAGE> 10
declined 10 percent; however, after adjusting for divestments, net sales
increased 1 percent. Canadian earnings were $26.0 million, $1.4 million better
than last year. The improvement was mainly due to lower expenses related to
the development of a new financial system. Net sales were 3 percent higher.
Ready-mixed concrete volumes were 9 percent lower, reflecting sharp declines in
Quebec, Ontario and British Columbia. Aggregate volumes declined 2 percent.
In the U.S., earnings were $6.5 million, $1.8 million lower than 1994 mostly
due to the absence of earnings from divested operations. Due to divestments,
net sales declined 34 percent. After adjusting for 1994 divestments, net sales
declined 10 percent. Ready-mixed concrete shipments from continuing operations
declined 9 percent while aggregate shipments were 5 percent higher.
Selling and administrative expenses were $6.6 million lower than 1994. The
reduction resulted primarily from divestments and staff reductions related to
restructuring. Interest expense, net was $4.4 million lower due to lower
average net indebtedness and capitalized interest on construction in progress.
Capitalized interest was $1.5 million in 1995 while no interest was capitalized
in 1994. Other income, net was $0.3 million in 1995 compared to $3.5 million
in 1994. The decrease resulted mostly from lower divestment gains offset by
lower interest rate swap expenses.
Income tax expense was $20.0 million, $3.8 million lower than 1994. During the
quarter, management reduced the valuation allowance previously provided against
the Registrant's U.S. deferred tax assets by $23.3 million. This change in the
recorded valuation allowance is reflected as a reduction in the third quarter
income tax provision. This reduction stems from the favorable long-term
outlook for the U.S. cement market, the Registrant's income forecasts which
indicate that 1995 will represent the third consecutive year of taxable income
in the U.S. and management's projections of future taxable income in the U.S.
which is expected to be in excess of amounts needed to realize these deferred
tax assets. Management believes it is more likely than not that the related
deferred tax assets will be realized. No federal income tax provision was
recorded in the U.S. during the third quarter of 1994 due to the utilization of
carried-forward net operating losses.
NINE MONTHS ENDED SEPTEMBER 30, 1995
During the second quarter, the Registrant reached an agreement with Revenue
Canada Taxation related to the pricing of certain cement sales between its
operations in Canada and the U.S. for the years 1984 through 1994. The result
was an increase in net sales and pre-tax income in Canada by U.S. $30.1 million
with corresponding adjustments in the U.S. The impact of this agreement was
immaterial to consolidated net income. Management's Discussion and Analysis
that follows excludes the impact of this agreement, which is subject to review
by the Internal Revenue Service.
The Registrant reported earnings of $93.5 million or $1.36 per common equity
share. This compares with net income of $48.5 million, or $0.71 for the first
nine months of 1994. The earnings improvement was mainly due to an
10
<PAGE> 11
increase in cement prices, lower selling and administrative expenses and lower
interest expense.
Net sales were $1,103.3 million, down 5 percent from 1994. Net sales from
continuing operations increased 8 percent due to a 6 percent rise in the cement
selling price. Canadian net sales were $497.9 million, an increase of 3
percent. Due to divestments, U.S. net sales declined 11 percent. Sales
volumes from continuing operations for cement and ready-mixed concrete were 1
percent and 8 percent lower, respectively, while aggregate sales were 2 percent
higher.
Earnings from the Registrant's cement operations were $127.7 million, $29.1
million better than last year. Results were better due to higher sales prices
partially offset by higher plant costs and higher clinker and cement purchases.
Net sales increased 4 percent, whereas net sales from continuing operations
were up 10 percent. Earnings from Canadian operations were $43.7 million, an
increase of $12.0 million over 1994. Due to an 8 percent drop in western
Canada, cement shipments declined 2 percent; however, aided by a 5 percent
increase in the average net selling price (excluding exchange rate
fluctuation), net sales increased 6 percent. Plant costs were higher mostly
due to start-ups of second kilns at the Woodstock and Brookfield plants offset
by lower gas costs at the Exshaw plant. Earnings from U.S. cement operations
were $84.0 million, $17.1 million higher than prior year. The higher earnings
were primarily attributable to a 6 percent increase in the average net selling
price partially offset by lower shipments (and lower margins from higher
clinker and cement purchases) and an increase in plant costs. Plant costs
increased due to higher maintenance expenses, increased raw mix costs and
higher depreciation expense. Net sales were 3 percent higher than 1994,
whereas, after adjusting for the impact of divestments, net sales were 12
percent higher. Cement shipments from continuing operations were 1 percent
lower.
The Registrant's construction materials and waste management operations
contributed $22.0 million. This was $3.7 million better than last year. Net
sales declined 14 percent; however, revenues from continuing operations were 2
percent higher. Canadian operations earned $14.2 million, $8.7 million better
than 1994. Ready-mixed concrete margins improved in British Columbia.
Concrete product margins in eastern Canada were up due to higher pressure pipe
and concrete pipe sales. Selling and administrative expenses were lower due to
staff reductions related to restructuring. Net sales were 3 percent more than
1994. Ready-mixed concrete volumes were 8 percent lower (primarily in Quebec
and British Columbia) and aggregate volumes were 1 percent lower. The U.S.
operations earned $7.8 million, $5.0 million lower than 1994. Results were
impacted by the absence of earnings from divested operations, lower ready-mixed
concrete sales in the St. Louis market due to a slowdown in construction
activity and competitive pressures, and high operating costs in the northern
aggregate operations. Aggregate shipments from continuing operations increased
9 percent while net sales and ready-mixed concrete shipments were 3 percent and
9 percent lower, respectively.
Selling and administrative expenses were $107.7 million in 1995 compared to
$121.7 million in 1994. The reduction resulted primarily from divestments and
staff reductions related to restructuring. Interest expense, net
11
<PAGE> 12
decreased $12.8 million in 1995 due to lower average net indebtedness and
capitalized interest on construction in progress. Capitalized interest was
$1.5 million in 1995 (no interest was capitalized in 1994). Other income, net
was $2.8 million in 1995 compared to expense of $3.6 million in 1994. The
improvement resulted mostly from gains on the sale of non-strategic assets.
The income tax expense for the nine months ended September 30, 1995 was $21.3
million which was $2.5 million higher than for the same period in 1994. In
the U.S., income tax expense was impacted by the same factors as discussed
under "Three Months Ended September 30, 1995." In Canada, the effective tax
rate decreased. Certain elements of the Canadian income tax provision are
fixed in amount. The decrease in the effective tax rate was caused by a lower
percentage of these fixed amounts relative to the higher earnings expected for
the current year.
LIQUIDITY AND CAPITAL RESOURCES
Net cash consumed from operating activities was $11.0 million in 1995 compared
to net cash provided of $30.7 million in 1994. The higher net income in 1995
was more than offset by higher working capital requirements and the income tax
valuation allowance adjustment. The working capital increase was a result of
higher inventories, lower accounts payable and accrued liabilities partially
offset by lower accounts receivable. The increase in inventories was mainly
due to higher U.S. cement purchases in anticipation of higher market demand.
The decrease in accounts receivable resulted mostly from lower sales in the
third quarter and the 1994 divestments. The lower accounts payable and accrued
liabilities was mostly due to divestments. Cash flows invested and returned
for the nine month periods ended September 30, 1995 and 1994 were $41.3 million
and $52.1 million, respectively. Compared to 1994, the liquidation of
short-term investments was more than offset by higher capital spending and
lower proceeds from divestments. The divestment proceeds in 1995 resulted
mainly from the sale of the Registrant's interest in a Texas aggregate
operation. The 1994 proceeds resulted mostly from the sale of the Balcones
cement plant and three terminals and an equity interest in one of the
Registrant's construction materials operations. Net cash consumed by financing
activities in 1995 and 1994 consisted mainly of debt reduction from proceeds
received upon the divestment of non-strategic assets. The equity issuances
during both periods were primarily attributable to the exercise of stock
options.
Capital investments are not expected to exceed $180.0 million in 1995. At
September 30, 1995, the Registrant had no material capital commitments and had
$150 million of committed bank lines of credit of which none had been drawn.
In October 1995, the Registrant announced plans to build cement plants to
replace existing facilities in Richmond, British Columbia and Sugar Creek,
Missouri. The Registrant projects a capital investment of approximately $95
million for the Richmond plant which is expected to be completed in 1998. The
Sugar Creek plant and a deep underground limestone quarry are expected to cost
approximately $135 million and to go on line by the year 2000.
12
<PAGE> 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On August 30, 1995 Lone Star Industries Inc. and the Registrant executed and
consummated a final settlement, for the sum of $11.2 million, of the Lone Star
Case, a companion case pending in the U.S. District Court for the District of
Maryland which contained claims parallel to those in the Lone Star Case and any
and all related claims concerning allegedly defective cement sold by the
Registrant to Lone Star or its affiliates for use in the manufacture of
concrete railroad ties. (For a description of the Lone Star Case, see the
Registrant's annual report on Form 10-K for the year ended December 31, 1994).
This settlement was partially funded by the Registrant's general liability
insurers and partially by the Registrant. The Registrant is pursuing a
non-settling insurer for recovery of its allocated portion of the settlement
amount in a bifurcated action in the Coverage Suit (for a description of the
Coverage Suit, see the above-referenced 10-K annual report). On October 16,
1995 the Registrant commenced the trial of the Coverage Suit in the U.S.
District Court for the District of Maryland against three non-settling primary
liability insurers for recovery of their allocated portions of the necessary
and reasonable defense expenses incurred by the Registrant in defending the
Lone Star Case. On November 1, 1995 the jury in this case returned a verdict in
favor of the Registrant for a substantial portion of the amount sought. The
District Court will mold the verdict and issue a final judgment in the very
near future. The Registrant awaits the entry of a final judgment in order to
make a determination of what action, if any, it should take in this matter.
The Registrant has been informed that the U.S. Justice Department's antitrust
investigation regarding potential price fixing and market allocation by cement
producers has been terminated. In March 1994, the Registrant had been served
with a Civil Investigative Demand from the Justice Department pursuant to which
the Registrant submitted documents and responded to interrogatories.
13
<PAGE> 14
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits Page
-------- ----
Exhibit 11 - Statement regarding computation
of net income per common equity share. 16
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed by
the Registrant during the three-months
ended September 30, 1995.
14
<PAGE> 15
SIGNATURE
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.
LAFARGE CORPORATION
Date: November 13, 1995 By: JEAN-PIERRE CLOISEAU
----------------- --------------------
Jean-Pierre Cloiseau
Executive Vice President
and Chief Financial Officer
15
<PAGE> 1
LAFARGE CORPORATION AND SUBSIDIARIES EXHIBIT 11
Computation of Net Income per Common Equity Share
(Unaudited and in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ -----------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
PRIMARY CALCULATION
- - -------------------
Net income $ 85,875 $ 72,189 $ 93,540 $ 48,459
======== ======== ======== ========
Weighted average number
of common equity
shares outstanding 68,828 67,868 68,527 67,626
Net effect of dilutive
stock options based on
the treasury method 426 454 337 618
-------- -------- -------- --------
Weighted average number
of common equity shares
and share equivalents
outstanding 69,254 68,322 68,864 68,244
======== ======== ======== ========
Primary net income
per common equity share $ 1.24 $ 1.06 $ 1.36 $ .71
======== ======== ======== ========
FULLY DILUTED CALCULATION
- - -------------------------
Net income $ 85,875 $ 72,189 $ 93,540 $ 48,459
Add interest expenses
applicable to 7% Convertible
Subordinated Debentures 1,750 1,750 5,250 5,250
-------- -------- -------- --------
Net income assuming
full dilution $ 87,625 $ 73,939 $ 98,790 $ 53,709
======== ======== ======== ========
Weighted average number
of common equity
shares outstanding 68,828 67,868 68,527 67,626
Add additional shares
assuming conversion
of 7% Convertible
Subordinated Debentures 4,520 4,520 4,520 4,520
Net effect of dilutive
stock options based on
the treasury stock method 426 462 337 618
-------- -------- -------- --------
Weighted average number of
common equity shares
assuming full conversion
of all potentially
dilutive securities 73,774 72,850 73,384 72,764
======== ======== ======== ========
Fully diluted net income
per common
equity share $ 1.19 $ 1.01 $ 1.35 $ .74(a)
======== ======== ======== ========
</TABLE>
(a) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15
because it produces an anti-dilutive result.
16
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 123,360
<SECURITIES> 4,000
<RECEIVABLES> 368,737
<ALLOWANCES> 0
<INVENTORY> 202,193
<CURRENT-ASSETS> 737,306
<PP&E> 800,914<F1>
<DEPRECIATION> 0<F1>
<TOTAL-ASSETS> 1,730,483
<CURRENT-LIABILITIES> 300,448
<BONDS> 278,832
<COMMON> 708,103
0
0
<OTHER-SE> 250,767
<TOTAL-LIABILITY-AND-EQUITY> 1,730,483
<SALES> 1,103,268
<TOTAL-REVENUES> 1,103,268
<CGS> 870,262
<TOTAL-COSTS> 870,262
<OTHER-EXPENSES> (2,848)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,327
<INCOME-PRETAX> 114,861
<INCOME-TAX> 21,321
<INCOME-CONTINUING> 93,540
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 93,540
<EPS-PRIMARY> 1.36
<EPS-DILUTED> 1.35
<FN>
<F1>PP&E, net shown only. Interim financial statements do not require PP&E at
cost and accumulated depreciation and depletion.
</FN>
</TABLE>
