<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 MARCH 31, 1997
------------------------------------------------
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
----------------------------------------------------------
LAFARGE CORPORATION
- --------------------------------------------------------------------------------
(Exact name of company 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 20191-4393
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
703-264-3600
- --------------------------------------------------------------------------------
(Company's telephone number, including area code)
Indicate by check mark whether the company (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 company 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 April 30, 1997
------------------------------------- --------------
<S> <C>
Common Stock of Lafarge Corporation
($1 par value) 63,640,491
Exchangeable Preference Shares of
Lafarge Canada Inc.
(no par value) 7,164,978
------------
Total Common Equity Interests 70,805,469
============
</TABLE>
Number of pages contained in this report 17
--
Total sequentially numbered pages 17
--
Exhibit index on page 15
--
1
<PAGE> 2
LAFARGE CORPORATION AND SUBSIDIARIES
FORM 10-Q - FOR THE QUARTER ENDED MARCH 31, 1997
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
a) Condensed Consolidated Statements
of Income (Loss) - Three-Month and
Twelve-Month Periods Ended
March 31, 1997 and 1996 3
b) Condensed Consolidated Balance Sheets -
March 31, 1997, March 31, 1996, and
and December 31, 1996 4
c) Condensed Consolidated Statements of
Cash Flows - Three-Month and Twelve-Month
Periods Ended March 31, 1997 and 1996 5
d) Condensed Consolidated Geographic Information -
Three-Month and Twelve-Month Periods
Ended March 31, 1997 and 1996 6
e) Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6(a). Exhibits 15
Item 6(b). Reports on Form 8-K 15
SIGNATURE 16
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LAFARGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31 MARCH 31
-------------------------------------- ------------------------------------------
1997 1996 1997 1996
----------------- ----------------- ------------------- -------------------
<S> <C> <C> <C> <C>
NET SALES $ 244,034 $ 203,712 $1,689,602 $1,479,082
----------------- ----------------- ------------------- -------------------
COST AND EXPENSES
Cost of goods sold 255,323 223,493 1,283,716 1,159,958
Selling and administrative 37,456 35,795 153,103 141,427
Other expense (income), net 3,892 2,857 10,609 3,930
----------------- ----------------- ------------------- -------------------
Total income(loss) from operations (52,637) (58,433) 242,174 173,767
Interest expense 5,559 5,915 23,762 26,013
Interest income (2,917) (2,664) (10,321) (10,575)
----------------- ----------------- ------------------- -------------------
PRE-TAX INCOME (LOSS) (55,279) (61,684) 228,733 158,329
Income tax benefit (expense) 21,158 23,489 (83,793) (24,858)
----------------- ----------------- ------------------- -------------------
NET INCOME (LOSS) $ (34,121) $ (38,195) $ 144,940 $ 133,471
================= ================= =================== ===================
NET INCOME (LOSS) PER COMMON
EQUITY SHARE-PRIMARY $ (.48) $ (.55) $ 2.06 $ 1.93
================= ================= =================== ===================
NET INCOME (LOSS) PER COMMON
EQUITY SHARE-ASSUMING
FULL DILUTION $ (.48) $ (.55) $ 2.01 $ 1.87
================= ================= =================== ===================
DIVIDENDS PER COMMON EQUITY SHARE $ .100 $ .100 $ .400 $ .400
================= ================= =================== ===================
Weighted average number of common
equity shares and equivalents
outstanding 70,517 69,327 70,436 69,266
================= ================= =================== ===================
</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>
MARCH 31 MARCH 31 DECEMBER 31
1997 1996 1996
---------- ---------- -----------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 118,940 $ 88,976 $ 116,847
Short-term investments 84,032 97,514 92,496
Receivables, net 208,108 192,685 287,692
Inventories 218,840 221,622 205,804
Other current assets 29,568 32,814 29,391
---------- ---------- ----------
Total current assets 659,488 633,611 732,230
Property, plant and equipment,
(less accumulated depreciation and
depletion of $1,037,158, $1,021,467
and $1,025,533) 876,951 823,896 867,723
Excess of cost over net assets
of businesses acquired, net 30,682 22,478 31,657
Other assets 183,213 163,516 181,369
---------- ---------- ----------
TOTAL ASSETS $1,750,334 $1,643,501 $1,812,979
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 195,195 $ 213,934 $ 214,393
Income taxes payable 2,469 1,992 28,151
Short-term borrowings and current portion
of long-term debt 33,079 20,633 44,821
Short-term borrowings from related party 100,000 - 50,000
---------- ---------- ----------
Total current liabilities 330,743 236,559 337,365
Long-term debt 149,260 263,612 161,934
Deferred income tax 46,424 48,157 48,709
Other postretirement benefits 125,161 124,368 124,867
Other long-term liabilities 29,450 28,018 29,565
---------- ---------- ----------
Total liabilities 681,038 700,714 702,440
---------- ---------- ----------
Common equity interests
Common shares 63,580 61,011 62,590
Exchangeable shares 49,911 58,339 53,817
Additional paid-in-capital 626,218 597,514 615,993
Retained earnings 400,284 283,473 441,481
Foreign currency translation adjustments (70,697) (57,550) (63,342)
---------- ---------- ----------
Total shareholders' equity 1,069,296 942,787 1,110,539
---------- ---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,750,334 $1,643,501 $1,812,979
========== ========== ==========
</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>
THREE MONTHS TWELVE MONTHS
ENDED MARCH 31 ENDED MARCH 31
----------------------------------- ------------------------------------
1997 1996 1997 1996
--------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATIONS
Net Income (loss) $ (34,121) $ (38,195) $ 144,940 $ 133,471
Adjustments to reconcile net income (loss)
to net cash provided by operations:
Depreciation, depletion and amortization 27,060 25,402 102,165 96,652
Provision for doubtful accounts 695 524 426 503
Gain on sale of assets (1,279) (861) (4,503) (5,921)
Other postretirement benefits 470 821 1,105 2,261
Other non-cash charges and credits, net (4,107) (1,445) 4,217 (29,718)
Changes in working capital 18,831 15,081 (34,097) (68,923)
--------------- -------------- -------------- ----------------
Net cash provided by operations 7,549 1,327 214,253 128,325
--------------- -------------- -------------- ----------------
CASH FLOWS FROM INVESTING
Capital expenditures (40,553) (29,122) (136,221) (123,385)
Acquisitions - (8,127) (75,357) (36,474)
Short-term investments 8,464 (12,998) 13,482 (43,266)
Proceeds from property, plant and
equipment dispositions 4,147 2,528 30,745 19,609
Other (1,574) 2,445 (4,222) 6,074
--------------- -------------- -------------- ----------------
Net cash used for investing (29,516) (45,274) (171,573) (177,442)
--------------- -------------- -------------- ----------------
CASH FLOWS FROM FINANCING
Net increase (decrease) in long-term
borrowings (includes current portion) 25,594 (1,492) (4,085) (19,443)
Issuance of equity securities 3,103 293 7,011 3,275
Dividends, net of reinvestments (2,870) (2,740) (12,295) (10,830)
--------------- -------------- -------------- ----------------
Net cash provided (consumed) by financing 25,827 (3,939) (9,369) (26,998)
--------------- -------------- -------------- ----------------
Effect of exchange rate changes (1,767) 427 (3,347) 4,325
--------------- -------------- -------------- ----------------
NET INCREASE(DECREASE)IN CASH AND
CASH EQUIVALENTS 2,093 (47,459) 29,964 (71,790)
CASH AND CASH EQUIVALENTS AT
THE BEGINNING OF THE PERIOD 116,847 136,435 88,976 160,766
--------------- -------------- -------------- ----------------
CASH AND CASH EQUIVALENTS AT
THE END OF THE PERIOD $ 118,940 $ 88,976 $ 118,940 $ 88,976
=============== ============== ============== ================
</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 TWELVE MONTHS ENDED
MARCH 31 MARCH 31
------------------------- ------------------------
1997 1996 1997 1996
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
NET SALES
Canada $ 91,340 $ 79,737 $ 718,035 $ 657,302
United States 152,694 123,975 971,567 821,780
---------- ---------- ---------- ----------
TOTAL NET SALES $ 244,034 $ 203,712 $1,689,602 $1,479,082
========== ========== ========== ==========
<CAPTION>
INCOME (LOSS) FROM OPERATIONS (See Note 6)
<S> <C> <C> <C> <C>
Canada $ (30,259) $ (31,773) $ 106,227 $ 69,600
United States (22,378) (26,660) 135,947 104,167
---------- ---------- ---------- ----------
TOTAL INCOME (LOSS) FROM
OPERATIONS (52,637) (58,433) 242,174 173,767
Interest expense, net (2,642) (3,251) (13,441) (15,438)
---------- ---------- ---------- ----------
PRE-TAX INCOME (LOSS) $ (55,279) $ (61,684) $ 228,733 $ 158,329
========== ========== ========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
6
<PAGE> 7
LAFARGE CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
1. The Company is engaged in the production and sale of cement, ready-mixed
concrete, other concrete products, asphalt, gypsum wallboard and related
products, and aggregates. The Company operates in the U.S. and, through
its major operating subsidiary, Lafarge Canada Inc. ("LCI"), in Canada.
The Company's wholly-owned subsidiary, Systech Environmental Corporation,
supplies cement plants with substitute fuels and raw materials. Lafarge
S.A., a French corporation, and certain of its affiliates own a majority
of the Company'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 Company 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 Company's 1996
Annual Report on Form 10-K.
3. Because of seasonal, weather-related conditions in most of the Company'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 March 31, 1997 and 1996,
and at December 31, 1996, inventories consisted of the following (in
thousands):
<TABLE>
<CAPTION>
March 31 March 31 December 31
1997 1996 1996
------------------- ------------------- -------------------
<S> <C> <C> <C>
Finished products $ 102,204 $ 99,086 $ 100,900
Work in process 28,466 36,340 13,711
Raw materials and fuel 44,582 43,161 45,550
Maintenance and operating
supplies 43,588 43,035 45,643
------------------- ------------------- -------------------
Total inventories $ 218,840 $ 221,622 $ 205,804
=================== =================== ===================
</TABLE>
7
<PAGE> 8
5. Cash paid during the period for interest and taxes is as follows (in
thousands):
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended March 31 Ended March 31
-------------------------------- ---------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Interest $ 1,476 $ 3,299 $ 25,890 $ 28,761
Income Taxes (net of refunds) 9,815 7,632 75,776 79,020
</TABLE>
6. During the second quarter of 1995, the Company 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
of U.S. $30.1 million with corresponding adjustments in the U.S. During the
third quarter of 1996, the Company recorded a U.S. $13.7 million adjustment
for the year 1995 based on the above aforementioned agreement with Revenue
Canada Taxation. The impact of these adjustments was immaterial to
consolidated net income. The 1996 and 1995 amounts shown as income from
operations for Canada and the United States in the condensed consolidated
geographic information exclude these adjustments.
7. As discussed in its 1996 Annual report on form 10-K, LCI is a defendant in
lawsuits in Canada arising from claims regarding alleged defective fly ash
and cement. The amount of LCI's liability, if any, is uncertain. LCI has
denied liability and is defending the lawsuits vigorously. LCI believes
that it has substantial insurance coverage that will respond to defense
expenses and liability, if any, in the lawsuits. Also, the Company, among
others, has been named in two lawsuits in Texas alleging exposure to toxic
substances. The amount of liability, if any, to the Company is uncertain.
The Company filed general denials to both suits and is vigorously defending
the lawsuits. Finally, the Company has been notified by the Environmental
Protection Agency that it is one of several potentially responsible parties
for clean-up costs at certain waste disposal sites. When the Company
determines that it is probable that a liability for environmental matters
or other legal actions has been incurred, an estimate of the required
remediation costs is recorded as a liability in the financial statements.
In addition, the Company is involved in certain other legal actions and
claims. It is the opinion of management that all legal and environmental
matters will be resolved without material effect on the Company's
consolidated financial statements.
8. In the third quarter of 1995, the U.S. tax provision was decreased by
$23.3 million due to the reduction of a valuation allowance on deferred tax
assets which had been recorded in 1992.
8
<PAGE> 9
The reduction resulted from the favorable long-term outlook of the U.S.
cement market, three consecutive years 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 continues to believe it is more likely than not that the
Company's net deferred tax assets will be realized.
9. On April 29, 1997, the Company signed a letter of intent with Laidlaw Inc.
to acquire JTM Industries Inc. of Kennesaw, Georgia. JTM is the largest
firm in the United States managing coal-combustion by-products produced by
electric utilities which last year posted sales of $60 million. The
transaction must be approved by the Company's Board of Directors and is
subject to government review and the completion of appropriate due
diligence.
10. During the first quarter of 1997, Statement of Financial Accounting
Standards No. 128, "Earnings per Share" ("SFAS No. 128") was issued. This
new standard, which the Company must adopt after December 15, 1997 for the
year ended December 31, 1997, replaces primary EPS with basic EPS and fully
diluted EPS will be called diluted EPS. Computed pursuant to SFAS No. 128,
basic EPS for the twelve months ended March 31, 1997 and 1996 would have
increased by $.01 to $2.07 and $1.94, respectively, over reported primary
EPS for these periods. There would be no changes to the other earnings per
share information presented on the income statement.
11. In the opinion of management, the accompanying condensed consolidated
financial statements reflect all adjustments (which included only normal
recurring adjustments except as discussed in Note 8) necessary to present
fairly the Company's financial position as of the applicable dates and the
results of its operations and its cash flows for the interim periods
presented.
9
<PAGE> 10
LAFARGE CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Historically, the Company incurs a loss in the first quarter because sales and
operating results are negatively impacted by weather conditions which reduce
construction activity. In addition, a substantial portion of the year's major
maintenance projects are performed during this period of low plant utilization
with the associated costs being charged to expense as incurred.
THREE MONTHS ENDED MARCH 31, 1997
The seasonal pattern was evident during the three months ended March 31, 1997
when the Company incurred a net loss of $34.1 million, or $0.48 per common
equity share. This compares with a net loss of $38.2 million, or $0.55 per
common equity share, for the first quarter of 1996. Operating results improved
in the cement and construction materials product lines. The Company's two gypsum
wallboard plants that were acquired in September 1996 generated an operating
profit of $2.9 million. Sales volumes were higher in all main product lines
(cement, ready-mixed concrete and aggregates), while cement net realization
(delivered price per ton to customer less freight) increased 4 percent and
ready-mixed concrete prices were 7 percent higher. The Company's Canadian
operations reported a net loss of $17.3 million, $1.0 million better than 1996
whereas the U.S. net loss was $16.8 million, $3.1 million better.
The Company's net sales increased 20 percent to $244.0 million, up from $203.7
million in 1996. Canadian net sales were $91.3 million, up 15 percent, while
U.S. net sales increased 23 percent to $152.7 million. The improvement in both
Canada and the U.S. was primarily due to increased product shipments and higher
cement and ready-mixed concrete prices. In addition, the new gypsum wallboard
activity contributed $22.0 million of sales in the U.S. Cement shipments
increased 6 percent while ready-mixed concrete and aggregate volumes rose 11
percent and 17 percent, respectively.
The first quarter loss from the Company's cement operations was $23.6 million,
$3.4 million better than last year. The improvement was due to an increase in
shipments and prices partially offset by higher plant costs due to the timing of
major maintenance projects and lower clinker production at some U.S. plants. Net
sales increased 9 percent reflecting the rise in shipments and prices. The
Canadian loss was $6.9 million, $4.0 million better than 1996 due to an 18
percent increase in cement shipments and a 3 percent escalation in net
realization (excluding exchange rate fluctuation) in western
10
<PAGE> 11
Canada, and higher clinker production at two plants in eastern Canada. These
improvements were partially offset by the timing of major maintenance projects
at the Exshaw, Alberta plant. Net sales in Canada increased 14 percent. In
eastern Canada, cement shipments were slightly lower (1%) as stronger demand in
Ontario was offset by declines in Quebec due to inclement weather and because of
higher shipments in 1996 to the Confederation Bridge project in the Canadian
Maritimes which is nearing completion. The U.S. loss was $16.7 million, $0.6
million worse than a year ago. Increases in shipments of 5 percent and net
realization of 4 percent were more than offset by the timing of major
maintenance spending and lower clinker production at some plants. Net sales
increased 7 percent reflecting the increase in shipments and prices.
The Company's construction materials and waste management operations lost $20.6
million, $0.7 million better than 1996. In Canada, the loss was $17.7 million,
$0.5 million worse than last year. Net sales were 15 percent higher reflecting
an increase in ready-mixed concrete and aggregate shipments, and ready-mixed
concrete prices. Stronger demand in Ontario and the Western provinces resulted
in a 16 percent rise in Canadian ready-mixed concrete volumes which more than
compensated for the decline in shipments to the Confederation Bridge project in
the Canadian Maritimes. Aggregate volumes were also strong in Canada, increasing
by 25 percent; however, in eastern Canada increased aggregate volumes (which
were up 38 percent) resulted in no earnings improvement due to higher volumes of
lower margin products. Lower volumes from pressure pipe, due to a soft market,
also negatively impacted results in the east. In western Canada, higher volumes
and prices, both in ready-mixed concrete and aggregates, were more than offset
by higher material and operating costs due to the timing of annual maintenance.
In the U.S., the loss was $2.9 million, $1.2 million better than last year
mainly due to a 7 percent increase in ready-mixed concrete prices. Ready-mixed
concrete volumes advanced 4 percent while aggregate volumes grew 3 percent.
For the quarters ended March 31, 1997 and 1996 the Company recorded an income
tax benefit as a result of the seasonal loss from its Canadian and U.S.
operations. The Company's effective income tax rate was 38.3 percent in 1997,
which was consistent with the prior year.
TWELVE MONTHS ENDED MARCH 31, 1997
In the second quarter of 1995, the Company 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 though 1994. The result was
an increase in net sales and pre-tax income in Canada of U.S. $30.1 million,
with corresponding adjustments in the U.S. During the third quarter of 1996, the
Company recorded a U.S. $13.7 million adjustment for the year 1995 based upon
the aforementioned agreement with Revenue Canada Taxation. The impact of these
adjustments on consolidated net income was immaterial. Management's Discussion
and Analysis that follows excludes the impact of this agreement.
11
<PAGE> 12
The Company reported net income of $144.9 million in 1997 compared to $133.5
million for the same period ended March 31, 1996. Net sales increased 14 percent
primarily due to increased product shipments and improved cement and ready-mixed
concrete selling prices, as well as the effect of the U.S. gypsum wallboard
acquisition. Canadian net sales increased 9 percent while U.S. sales rose 18
percent. In the U.S., cement net realization and shipments increased 4 percent
and 8 percent, respectively. Net realization in Canada increased 5 percent while
sales volumes rose 8 percent. Ready-mixed concrete and aggregate volumes in
Canada increased 21 percent and 10 percent, respectively, reflecting improved
economic activity, particularly in Ontario, coupled with the impact of
acquisitions in western Canada. In the U.S., ready-mixed concrete volumes
increased 5 percent and aggregate volumes were up 8 percent. Selling and
administrative expenses were $11.7 million higher mainly due to acquisitions,
coupled with higher legal and other professional fees. Selling and
administrative expenses as a percentage of net sales declined to 9.1 percent in
1997 from 9.6 percent in 1996. Other expense, net was $10.6 million in 1997
compared with $3.9 million in 1996. The change primarily reflects lower gains
from the sale of non-strategic assets and costs associated with the redemption
of $100 million 7% convertible debentures in December 1996. Income tax expense
increased from $24.9 million (which included the reduction of a valuation
allowance in the third quarter of 1995) in 1996 to $83.8 million in 1997.
Beginning in the second quarter of 1996, earnings in the U.S. became fully
taxable whereas prior earnings included a reduced tax provision as a result of
the utilization of net operating loss carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
Net cash of $7.5 million was provided by operating activities in the first
quarter of 1997 compared to $1.3 million in 1996. Net cash used for investing
activities in 1997 was $15.8 million lower than the same period last year mainly
due to proceeds from short-term investment maturities. In 1997, net cash
provided by financing activities was $25.8 million compared to net cash consumed
of $3.9 million in 1996. The change resulted from increased borrowings.
Net cash provided by operating activities for the twelve-month period ended
March 31, 1997 increased over the same period in 1996 primarily due to higher
net income and non-cash charges, and a lower increase in working capital.
Compared to 1996, net cash used for investing activities in 1997 increased due
to higher capital spending and acquisitions offset by proceeds from short-term
investment maturities. The increase in acquisitions resulted from the Company's
purchase of two gypsum wallboard plants in September 1996. Net cash consumed by
financing activities for the twelve-month period ended March 31, 1997 was $17.6
million lower than the same period in 1996 due to lower debt reductions.
12
<PAGE> 13
Capital expenditures are not expected to exceed $270 million in 1997. At March
31, 1997 the Company had no material capital commitments. Committed bank lines
of credit totaled $150 million under which no amounts were outstanding.
13
<PAGE> 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Part I, Notes to Condensed Consolidated Financial Statements, page 8 for a
discussion of developments in legal and environmental matters.
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders of the Company was held May 6, 1997. A total
of 70,734,719 shares were entitled to be voted. At the meeting, shareholders
elected the 17 nominees for the Board of Directors identified below:
<TABLE>
<CAPTION>
Director Elected Votes For Votes Withheld
- ---------------- --------- --------------
<S> <C> <C>
Thomas A. Buell 54,769,373 35,835
Marshall A. Cohen 54,768,963 36,245
Bertrand P. Collomb 54,769,189 36,019
Philippe Dauman 54,765,599 39,609
Bernard L. Kasriel 54,769,073 36,135
Jacques Lefevre 54,768,973 36,235
Paul W. MacAvoy 54,769,183 36,025
Claudine B. Malone 54,768,808 36,400
Alonzo L. McDonald 54,769,473 35,735
Robert W. Murdoch 54,768,097 37,111
Bertin F. Nadeau 54,766,903 38,305
John M. Piecuch 54,768,213 36,995
John D. Redfern 54,768,518 36,690
Joe M. Rodgers 54,769,463 35,745
Michel Rose 54,769,148 36,060
Ronald Southern 54,769,073 36,135
Edward H. Tuck 54,769,109 36,099
</TABLE>
The shareholders ratified the appointment of Arthur Andersen LLP as auditors to
audit the financial statements of the Company for the year ending December 31,
1997, with voting as follows:
<TABLE>
Votes For Votes Against Abstentions Broker Non-Votes
- --------- ------------- ----------- ----------------
<C> <C> <C> <C>
54,787,388 6,049 11,771 -0-
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
<S> <C>
(a) Exhibits Page
-------- ----
Exhibit 11 - Statement regarding computation of net income (loss) 17
per common equity share.
(b) Reports on Form 8-K
--------------------
No reports on Form 8-K were filed by the Company during the
three-months ended March 31, 1997.
</TABLE>
15
<PAGE> 16
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
LAFARGE CORPORATION
Date: May 14, 1997 By: /s/ LARRY J. WAISANEN
---------------------- -------------------------------
LARRY J. WAISANEN
Senior Vice President
and Chief Financial Officer
16
<PAGE> 1
EXHIBIT 11
LAFARGE CORPORATION AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON EQUITY SHARE
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31 MARCH 31
---------------------------------------- ----------------------------------------
1997 1996 1997 1996
----------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
PRIMARY CALCULATION
- -------------------
Net income (loss) $ (34,121) $ (38,195) $ 144,940 $ 133,471
================= ================ ================= =================
Weighted average number of common
equity shares outstanding 70,517 69,327 70,078 68,934
Net effect of dilutive stock options
based on the treasury method - - 358 332
----------------- ---------------- ----------------- -----------------
Weighted average number of
common equity shares and
equivalents outstanding 70,517 69,327 70,436 69,266
================= ================ ================= =================
Primary net income (loss)
per common equity share $ (.48) $ (.55) $ 2.06 $ 1.93
================= ================ ================= =================
FULLY DILUTED CALCULATION
- -------------------------
Net income (loss) $ (34,121) $ (38,195) $ 144,940 $ 133,471
Add after tax interest expense
applicable to 7% Convertible
Subordinated Debentures - 1,102 3,073 4,409
----------------- ---------------- ----------------- -----------------
Net income (loss) assuming full dilution $ (34,121) $ (37,093) $ 148,013 $ 137,880
================= ================ ================= =================
Weighted average number of common
equity shares outstanding 70,517 69,327 70,078 68,934
Add additional shares assuming
conversion of 7% Convertible
Subordinated Debentures - 4,520 3,170 4,520
Net effect of dilutive stock option
based on the treasury stock method 534 352 560 332
----------------- ---------------- ----------------- -----------------
Weighted average number of common
equity shares assuming full conversion
of all potentially dilutive securities 71,051 74,199 73,808 73,786
================= ================ ================= =================
Fully diluted net income (loss) per
common equity share $ (.48) $ (.50) (a) $ 2.01 $ 1.87
================= ================ ================= =================
</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.
17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 118,940
<SECURITIES> 84,032
<RECEIVABLES> 208,108
<ALLOWANCES> 0
<INVENTORY> 218,840
<CURRENT-ASSETS> 659,488
<PP&E> 1,914,109
<DEPRECIATION> (1,037,158)
<TOTAL-ASSETS> 1,750,334
<CURRENT-LIABILITIES> 330,743
<BONDS> 149,260
0
0
<COMMON> 739,709
<OTHER-SE> 329,587
<TOTAL-LIABILITY-AND-EQUITY> 1,750,334
<SALES> 244,034
<TOTAL-REVENUES> 244,034
<CGS> 255,323
<TOTAL-COSTS> 255,323
<OTHER-EXPENSES> 3,892
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,642
<INCOME-PRETAX> (55,279)
<INCOME-TAX> 21,158
<INCOME-CONTINUING> (34,121)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (34,121)
<EPS-PRIMARY> (.48)
<EPS-DILUTED> (.48)
</TABLE>
