<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act
of 1934
(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, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from TO
---------------- ----------------
For Quarter Ended Commission file number 1-4753
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PUERTO RICAN CEMENT COMPANY, INC.
(Exact name of registrant as specified in its charter)
COMMONWEALTH OF PUERTO RICO 51-A-66-0189525
- --------------------------- ---------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
PO Box 364487 - San Juan, P.R. 00936-4487
- ------------------------------ ----------
(Address of principal executive offices) (Zip Code)
(809) 783-3000
--------------
(Registrant's telephone number, including area code)
NONE
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the Registrant (1) has filed 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
--- ---
COMMON STOCK -$1.00 PAR VALUE 5,494,200 SHARES
<PAGE> 2
PUERTO RICAN CEMENT COMPANY, INC.
INDEX
<TABLE>
<CAPTION>
PAGE NO.
<S> <C> <C> <C>
Part I - Financial Information
Consolidated Balance Sheet as of
March 31, 1995 and December 31, 1994 1 - 2
Consolidated Statement of Income
First quarter ended on
March 31, 1995 and 1994 3
Consolidated Statement of Cash Flows
Three months ended on
March 31, 1995 and 1994 4
Notes to Consolidated Financial Statements 5
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 6 - 7
Part II - Other Information 7
Signatures 8
</TABLE>
<PAGE> 3
PUERTO RICAN CEMENT COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH DECEMBER
ASSETS 31, 1995 31, 1994
------------- ------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 196,613 $ 114,702
Short-term investments 2,250,000
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Cash and Cash Equivalents 2,446,613 114,702
------------- ------------
Notes and accounts receivable-net of allowance for
doubtful accounts of $1,093,809 in 1995 and
$1,094,003 in 1994 16,714,535 14,358,827
------------ ------------
Inventories:
Finished products 1,591,012 1,964,131
Work in process 2,895,715 3,561,875
Raw materials 5,099,670 4,202,704
Maintenance & operating supplies 20,098,220 18,880,858
Land held for sale including development costs 307,382 307,382
------------ ------------
Total inventories 29,991,999 28,916,950
------------ ------------
Prepaid expenses 4,262,668 3,907,844
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TOTAL CURRENT ASSETS 53,415,815 47,298,323
------------ ------------
PROPERTY, PLANT & EQUIPMENT - Net of
accumulated depreciation, depletion and amortization
of $53,092,235 in 1995 and $51,388,740 in 1994 113,526,563 111,688,573
------------ ------------
OTHER ASSETS
Long-term investments 41,086,411 42,030,507
Investments in real estate 704,987 704,987
Other long-term assets 135,576 147,364
------------ ------------
41,926,974 42,882,858
------------ ------------
TOTAL $208,869,352 $201,869,754
============ ============
</TABLE>
See notes to consolidated financial statements.
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<PAGE> 4
PUERTO RICAN CEMENT COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH DECEMBER
LIABILITIES AND STOCKHOLDERS' EQUITY 31, 1995 31, 1994
------------- ------------
<S> <C> <C>
CURRENT LIABILITIES
Short-term borrowing $ - $ 2,420,000
Current portion of long-term debt 6,178,571 6,178,571
Accounts payable 7,269,594 4,739,970
Accrued liabilities 3,705,483 2,868,989
Income taxes payable 1,555,452 664,509
------------ ------------
TOTAL CURRENT LIABILITIES 18,709,100 16,872,039
LONG-TERM LIABILITIES
Long-term debt, less current portion 33,460,646 31,696,403
Deferred income taxes 28,506,048 27,722,814
Postretirement benefits liability 2,863,216 2,607,162
------------ ------------
64,829,910 62,026,379
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, authorized 2,000,000
shares of $5.00 par value each; none issued
Common stock authorized 20,000,000
shares of $1.00 par value each; issued
6,000,000 shares, outstanding 5,494,200 shares 6,000,000 6,000,000
Additional paid-in capital 14,367,927 14,367,927
Retained earnings 116,499,503 114,140,497
------------ ------------
136,867,430 134,508,424
Less: 505,800 shares of common
stock in treasury, at cost 11,537,088 11,537,088
------------ ------------
STOCKHOLDERS' EQUITY NET 125,330,342 122,971,336
------------ ------------
TOTAL $208,869,352 $201,869,754
============ ============
</TABLE>
See notes to consolidated financial statements.
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<PAGE> 5
PUERTO RICAN CEMENT COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31
1995 1994
----------- -----------
<S> <C> <C>
Net sales $22,718,018 $22,512,334
Revenue from real estate operations 24,274 24,274
----------- -----------
22,742,292 22,536,608
Cost of sales 14,743,673 14,488,573
----------- -----------
Gross margin 7,998,619 8,048,035
Selling, general & administrative expenses 3,143,258 2,461,332
----------- -----------
Income from operations 4,855,361 5,586,703
----------- -----------
Other charges (credits):
Interest and financial charges 525,987 575,954
Interest income (602,776) (486,966)
Other income (35,047) (37,158)
----------- -----------
Total other charges (credits) (111,836) 51,830
----------- -----------
Income before income tax 4,967,197 5,534,873
Provision for income tax 1,674,177 1,963,028
----------- -----------
Net income $ 3,293,020 $ 3,571,845
=========== ===========
Income per share:
Net income $ 0.60 $ 0.62
=========== ===========
Common Shares Outstanding 5,494,200 5,807,700
=========== ===========
</TABLE>
See notes to consolidated financial statements.
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<PAGE> 6
PUERTO RICAN CEMENT COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED
<TABLE>
<CAPTION>
MARCH 31,
1995 1994
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,293,020 $ 3,571,845
----------- -----------
Adjustments to reconcile net income to
cash flows from operating activities:
Depreciation, depletion and amortization 1,708,919 1,731,408
Accretion of discounts on investments (2,001,807)
Provision for deferred income taxes 783,234 135,243
Postretirement benefits cost 196,055 (164,028)
Changes in assets and liabilities:
Increase in notes & accounts receivable (736,166) (3,244,739)
(Increase) decrease in inventories (1,075,049) 1,263,000
Increase in prepaid expenses (354,824) (640,243)
Increase in accounts payable 2,589,624 154,687
Increase in accrued liabilities 836,494 1,182,466
Increase in income taxes payable 890,943 1,821,799
Decrease in other long-term assets 11,788 8,299
----------- -----------
Total adjustments 2,849,211 2,247,892
----------- -----------
Cash provided by operations 6,142,231 5,819,737
----------- -----------
Cash flows from investing activities:
Capital expenditures (3,546,910) (2,461,594)
Increase in other short-term investments (2,250,000)
Decrease (increase) in long-term investments 1,326,361 (1,233,465)
----------- -----------
Cash used in investing activities (4,470,549) (3,695,059)
----------- -----------
Cash flows from financing activities:
Proceeds from loan 1,764,243 990,224
Decrease in short-term borrowing (2,420,000)
Dividends paid (934,014) (871,155)
----------- -----------
Cash (used in) provided by financing activities (1,589,771) 119,069
----------- -----------
Increase in cash and cash equivalents $ 81,911 $ 2,243,747
=========== ===========
Cash and cash equivalents - beginning of year $ 114,702 $ 431,293
Cash and cash equivalents - end of period 196,613 2,675,040
----------- -----------
Increase in cash and cash equivalents $ 81,911 $ 2,243,747
=========== ===========
</TABLE>
See notes to consolidated financial statements.
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<PAGE> 7
PUERTO RICAN CEMENT COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of the Registrant, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly its financial
position at March 31, 1995 and December 31, 1994, and the results of operations
and cash flows for the three months ended March 31, 1995 and 1994. The results
of operations are not necessarily indicative of the results to be expected for
the full year.
Cash and cash equivalents of approximately $2,447,000 as of March 31,
1995 consisted principally of short-term obligations of the U.S. Federal
Government or its agencies. Long-term investments were principally obligations
of the U.S. Federal Government or its agencies with maturities ranging from
more than one year to up to 7 years. These investments resulted from excess
funds generated from operations.
As of March 31, 1995, notes and accounts receivable of $16.7 million
were $2.3 million higher than the $14.4 million at December 31, 1994. This is
the result of increased balance on accounts receivable-trade during the first
quarter of 1995 when compared to the last quarter of 1994. Receivables'
turnover has been maintained within normal historical levels, with an average
collection period below 60 days.
Consolidated inventories increased $1.1 million from December 31, 1994
to approximately $30 million. Higher raw materials inventory, principally
paper on the St. Regis Paper & Bag Division, as well as increased coal
inventories due to a scheduled shipment received during this quarter, were the
principal reason for this increase. The increase of $355,000 in prepaid
expenses resulted chiefly from insurance and property tax prepayments scheduled
for this period.
Total current liabilities increased approximately $1.8 million on from
the $16.9 million balance on December 31, 1994, which was the net result of
increases in accounts payable and income taxes payable, net of the decrease of
$2.4 million in short-term borrowing repaid during this period. The $2.5
million increase in accounts payable was the result of balances payable to coal
and paper suppliers for material received during this quarter. The increase of
$890,000 in income taxes payable resulted from higher 1994 tax liabilities
payable in April 1995.
At its March 22, 1995 meeting, the Board of Directors of the
Registrant declared a 17 cents per share dividend on its common stock, payable
on May 18, 1995 to stockholders of record on April 20, 1995. As of March 31,
1995, the Registrant has 5,494,200 shares of common stock issued and
outstanding. This compares with 5,807,700 outstanding shares as of March 31,
1994.
-5-
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Working capital for the period grew from $30.4 million at December 31,
1994 to $34.7 million at March 31, 1995. Higher balances in short-term
investments, accounts receivable and inventories, offset by an increase in
accounts payable, were the principal reason for this increase. Current ratios
remained healthy at 2.86 to 1 in March 1995 as compared to 2.8 to 1 in December
1994.
During the first quarter of 1995, capital expenditures amounting to
$3.5 million were incurred, of which $3.3 million were related to the mill
conversion project. This increase in property, plant and equipment was offset
by $1.7 million in depreciation for the period.
As of March 31, 1995, the balance on long-term debt includes 1995
proceeds related to the mills conversion loans amounting $1.8 million.
Approximate aggregate maturities of long-term debt for the remaining of 1995
and thereafter are as follows:
<TABLE>
<S> <C>
1995 $ 6,178,571
1996 6,178,571
1997 2,821,429
1998 7,000,000
1999 17,460,646
-----------
Totals $39,639,217
===========
</TABLE>
Loan agreements with term lenders impose certain restrictions on the
Company pertaining to working capital, indebtedness, dividends, investments and
certain advances, among others.
The Registrant has available credit facilities with commercial banks
for short-term financing and discount of trade paper from customers in the
aggregate amount of $20,600,000. Maximum aggregate short-term borrowing
outstanding at any month-end during the three-month period ended on March 31,
1995 was $1,800,000, with no balance outstanding as of this date.
Results of Operations
Consolidated net sales of $22.7 million for the quarter ended on March
31, 1995 stayed virtually unaltered from the $22.5 million reached during the
same period of 1994. Cement sales remained relatively flat with 4.9 million
bags sold during this quarter, approximately the same level of sales attained
in the first quarter of 1994.
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<PAGE> 9
Consolidated cost of sales as a percentage of total sales were 64.8%
in 1995, nearly unchanged from 64.3% in 1994. Selling, general and
administrative expenses increased $682,000 to $3.1 million in 1995 as compared
to $2.5 million in 1994, and, as a percentage of total sales, from 10.9% to
13.8%, respectively. This increase relates principally to higher pension and
postretirement benefit expenses.
Interest and financial charges of $526,000 were 8.7% lower than in
1994. This decline resulted principally from the combination of reduced
interest rates on the loans outstanding balance and the capitalization of all
the interest related to the mills' conversion loans.
Consolidated interest income increased $116,000 from the 1994 figure.
Higher average investments volume outstanding during this period in addition to
improved interest rates on these investments, were the principal reason for
this increase.
Part II. OTHER INFORMATION.
In April 1995 the Registrant repurchased 75,000 shares of its
outstanding common stock for $2,181,000. This did not constitute the
establishment of a share repurchase program but a spot transaction approved by
the Board of Directors.
Item 2. NONE
Item 5. NONE
Item 6. Exhibits and Reports on Form 8-K
NONE
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<PAGE> 10
SIGNATURES
Pursuant to the requirement 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.
PUERTO RICAN CEMENT COMPANY, INC.
---------------------------------
(Registrant)
Date: 5/11/95 By: /s/ Angel Amaral
------- ---------------------------
Angel Amaral
Vice President & Controller
Date: 5/11/95 By: /s/ Jose O. Torres
------- ---------------------------
Jose O. Torres
Vice President of Finance
& Treasurer
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF PUERTO RICAN CEMENT FOR THE THREE MONTHS ENDED MARCH 31,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 196,613
<SECURITIES> 2,250,000
<RECEIVABLES> 17,808,344
<ALLOWANCES> 1,093,809
<INVENTORY> 29,991,999
<CURRENT-ASSETS> 53,415,815
<PP&E> 166,618,798
<DEPRECIATION> 53,092,235
<TOTAL-ASSETS> 208,869,352
<CURRENT-LIABILITIES> 18,709,100
<BONDS> 33,460,646
<COMMON> 6,000,000
0
0
<OTHER-SE> 119,330,342
<TOTAL-LIABILITY-AND-EQUITY> 208,869,352
<SALES> 0
<TOTAL-REVENUES> 22,742,292
<CGS> 14,743,673
<TOTAL-COSTS> 17,886,931
<OTHER-EXPENSES> (111,836)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,967,197
<INCOME-TAX> 1,674,177
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,293,020
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
