<PAGE> 1
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, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number : 1-4753
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PUERTO RICAN CEMENT COMPANY, INC.
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(Exact name of registrant as specified in its charter)
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<S> <C>
COMMONWEALTH OF PUERTO RICO 51-A-66-0189525
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(State or other jurisdiction of incorporation) (I.R.S. Employer ID No.)
PO Box 364487 - San Juan, P.R. 00936-4487
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code : (787) 783-3000
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NONE
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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
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Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
Common stock, $1 Par Value; 5,504,722 Shares Outstanding
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PUERTO RICAN CEMENT COMPANY, INC.
INDEX
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<CAPTION>
PAGE NO.
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<S> <C> <C>
Part I - Financial Information
Consolidated Balance Sheet as of
March 31, 1996 and December 31, 1995 1 - 2
Consolidated Statement of Income
First quarter ended on
March 31, 1996 and 1995 3
Consolidated Statement of Cash Flows
Three months ended on
March 31, 1996 and 1995 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
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PUERTO RICAN CEMENT COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH DECEMBER
ASSETS 31, 1996 31, 1995
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<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ 11,013,273 $ 11,599,636
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Investments available-for-sale 4,449,887 4,473,536
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Short-term investments 1,056,501 974,073
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Notes and accounts receivable-net of allowance for
doubtful accounts of $1,575,854 in 1996 and
$1,539,788 in 1995 27,203,946 24,526,385
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Inventories:
Finished products 1,996,652 2,207,360
Work in process 3,353,372 3,521,451
Raw materials 3,876,643 4,651,699
Maintenance & operating supplies 20,421,101 21,339,303
Land held for sale including development costs 502,602 502,602
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Total inventories 30,150,370 32,222,415
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Prepaid expenses 4,634,351 4,752,187
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TOTAL CURRENT ASSETS 78,508,328 78,548,232
PROPERTY, PLANT & EQUIPMENT - Net of
accumulated depreciation, depletion and amortization
of $58,540,290 in 1996 and $55,980,727 in 1995 142,961,141 142,567,213
LONG-TERM INVESTMENTS 31,518,667 31,228,541
OTHER ASSETS 2,831,572 2,670,882
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TOTAL $ 255,819,708 $ 255,014,868
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</TABLE>
See notes to consolidated financial statements.
1
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PUERTO RICAN CEMENT COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH DECEMBER
LIABILITIES AND STOCKHOLDERS' EQUITY 31, 1996 31, 1995
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<S> <C> <C>
CURRENT LIABILITIES
Notes payable $ - $ 4,100,000
Current portion of long-term debt 7,545,072 7,649,853
Accounts payable 9,101,689 8,440,255
Accrued liabilities 7,923,677 7,452,614
Income taxes payable 1,353,546 334,664
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TOTAL CURRENT LIABILITIES 25,923,984 27,977,386
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LONG-TERM LIABILITIES
Long-term debt, less current portion 57,454,256 57,549,475
Deferred income taxes 31,053,652 30,808,654
Postretirement benefits liability 2,889,875 2,873,430
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91,397,783 91,231,559
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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 5,504,722 shares 6,000,000 6,000,000
Additional paid-in capital 14,482,054 14,482,054
Unrealized gain on investments available-for-sale 8,920 74,313
Retained earnings 128,974,196 126,216,785
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149,465,170 146,773,152
Less: 495,278 shares of common stock
in treasury, at cost 10,967,229 10,967,229
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STOCKHOLDERS' EQUITY NET 138,497,941 135,805,923
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TOTAL $ 255,819,708 $ 255,014,868
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</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 5
PUERTO RICAN CEMENT COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
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<CAPTION>
Three Months Ended
March 31,
1996 1995
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<S> <C> <C>
Net sales $ 37,380,055 $ 22,718,018
Revenue from real estate operations 23,224 24,274
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37,403,279 22,742,292
Cost of sales 27,040,203 14,743,673
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Gross margin 10,363,076 7,998,619
Selling, general & administrative expenses 4,642,259 3,143,258
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Income from operations 5,720,817 4,855,361
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Other charges (credits):
Interest and financial charges 1,137,836 525,987
Interest income (604,751) (602,776)
Other income (117,662) (35,047)
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Total other charges (credits) 415,423 (114,836)
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Income before income tax 5,305,394 4,967,197
Provision for income tax 1,612,180 1,674,177
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Net income $ 3,693,214 $ 3,293,020
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Income per share:
Net income $ 0.67 $ 0.60
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Common Shares Outstanding 5,504,722 5,494,200
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</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 6
PUERTO RICAN CEMENT COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED
<TABLE>
<CAPTION>
MARCH 31,
1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,693,214 $ 3,293,020
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Adjustments to reconcile net income to
cash flows from operating activities:
Depreciation, depletion and amortization 2,597,942 1,708,919
Accretion of discounts on investments (386,468) (382,265)
Provision for deferred income taxes 244,998 783,234
Postretirement benefits cost 20,220 196,055
Gain on sale of fixed assets (11,338) -
Changes in assets and liabilities:
Increase in notes & accounts receivable (2,677,561) (736,166)
Decrease (increase) in inventories 2,072,045 (1,075,049)
Decrease (increase) in prepaid expenses 117,836 (354,824)
(Decrease) increase in accounts payable (278,169) 2,589,624
Increase in accrued liabilities 1,410,666 836,494
Increase in income taxes payable 1,018,882 890,943
(Increase) decrease in other long-term assets (175,720) 11,788
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Total adjustments 3,953,333 4,468,753
Cash provided by operations 7,646,547 7,761,773
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Cash flows from investing activities:
Capital expenditures (2,984,277) (3,546,910)
Decrease (increase) in long-term investments 96,342 (293,181)
Increase in other short-term investments (82,428) (2,250,000)
Increase in investments available-for-sale (41,744) -
Proceeds from sale of fixed assets 15,000 -
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Cash used in investing activities (2,997,107) (6,090,091)
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Cash flows from financing activities:
Repayment of long-term debt and notes payable (4,300,000) -
Dividends paid (935,803) (934,014)
Proceeds from loans - 1,764,243
Decrease in short-term borrowing - (2,420,000)
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Cash used in financing activities (5,235,803) (1,589,771)
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(Decrease) increase in cash and cash equivalents $ (586,363) $ 81,911
============== ==============
Cash and cash equivalents - beginning of year $ 11,599,636 $ 114,702
Cash and cash equivalents - end of period 11,013,273 196,613
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(Decrease) increase in cash and cash equivalents $ (586,363) $ 81,911
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</TABLE>
4
See notes to consolidated financial statements.
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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, 1996 and December 31, 1995, and the results of operations
and cash flows for the three months ended March 31, 1996 and 1995. The results
of operations are not necessarily indicative of the results to be expected for
the full year.
The total balances of cash and cash equivalents plus all investments,
including short-term, available-for-sale and long-term investments, were $44.0
million at March 31, 1996 compared with $48.2 million at December 31, 1995.
The decrease of $4.2 million resulted principally from the payment of a $4.1
million note due in January 1996 related to the acquisition of one of the
ready-mixed concrete companies purchased in November of 1995. The investments
consisted principally of short-term obligations and obligations with maturities
ranging from more than one year to up to seven years of the U.S. Federal
Government or its agencies.
Notes and accounts receivables were $27.2 million as of March 31, 1996,
$2.7 million higher than the amount of receivables at December 31, 1995. This
increase resulted principally from higher balances in accounts
receivable-trade at the end of the first quarter of 1996 when compared to the
end of the last quarter of 1995. Historically, sales for the first quarter of
the year have been on the average higher than those from the last quarter of
the year. Receivables turnover was maintained at normal levels during the
first quarter of 1996, with an average collection period below 60 days.
Consolidated inventories decreased $2.1 million from December 31, 1995 to
approximately $30.2 million at March 31, 1996. Higher sales of cement
contributed to increased production levels, decreasing the raw materials,
work-in-process and supplies inventories.
Total current liabilities decreased approximately $2.0 million to $25.9
million on March 31, 1996 from $27.9 million on December 31, 1994. The
decrease was principally the net result of the payment of the $4.1 million note
previously mentioned, offset by the increased balance in income taxes payable
from 1995 tax liabilities and the estimated tax installment due in April 1996.
At its March 27, 1996 meeting, the Board of Directors of the Registrant
declared a 17 cents per share dividend on its common stock, payable on May 17,
1996 to stockholders of record on April 19, 1996. As of March 31, 1996, the
Registrant had 5,504,722 shares of common stock issued and outstanding as
compared with 5,494,200 as of March 31, 1995.
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<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
Working capital at March 31, 1996 was $52.6 million compared with $50.6
million at December 31, 1995. The current ratio increased to 3.03 to 1 for the
period ended March 31, 1996 from 2.81 to 1 for the period ended December 31,
1995. The change resulted from the decrease in current liabilities
attributable to the payment of the $4.1 million note.
Capital expenditures during the first quarter of 1996 were approximately
$3.0 million, while there was $2.6 million in depreciation for the same period.
During this quarter, one of the Company's ready-mixed concrete subsidiaries
purchased new trucks at a cost of more than $1.0 million as part of such
capital expenditures.
During the quarter ended on March 31, 1996, the Company repaid $200,000
in long-term debt. The approximate aggregate maturities of long-term debt for
the remainder of 1996 and thereafter are as follows:
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<S> <C>
1996 $ 7,449,853
1997 13,600,423
1998 10,205,357
1999 7,819,907
2000 and thereafter 25,923,788
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Total $64,999,328
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Loan agreements with term lenders impose certain restrictions on the
Company concerning working capital, indebtedness, dividends, investments and
certain advances, among others.
The Company has available credit facilities in the aggregate amount of
$20,600,000 with commercial banks for short-term financing and discount of
trade paper from customers. No balance was outstanding under these credit
facilities at any month-end during the first quarter of 1996.
Results of Operations
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Consolidated net sales increased $14.7 million, or 65%, to $37.4 million
for the quarter ended March 31, 1996 from $22.7 million for the quarter ended
March 31, 1995. Of this increase, $11.6 million, or 79%, was directly
attributable to additional sales provided by the ready-mixed concrete
subsidiaries purchased in November 1995. Additional increases were:
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<PAGE> 9
- Cement sales: Net sales increased $1.9 million due primarily to an
increase in the number of bags of cement sold from 4.9 million for the
quarter ended March 31, 1995 to 5.6 million for the quarter ended March
31, 1996.
- Lime sales: Net sales increased $823,000 primarily due to an increase in
export sales. There were no export sales in the first quarter of 1995.
Consolidated cost of sales increased from $14.7 million in the first
quarter of 1995 to $27.0 million in the first quarter of 1996. This increase
included $9.7 million of additional costs attributable to the ready-mixed
concrete operations. Excluding the $9.7 million effect resulting from the
ready-mixed concrete operations, cost of sales as a percentage of total sales
(with total sales adjusted by the effect of additional sales contributed by the
ready-mixed concrete operations) increased slightly from 65% in the first
quarter of 1995 to 67% in the first quarter of 1996.
Selling, general and administrative expenses increased $1.5 million to
$4.6 million in the first quarter of 1996 compared with $2.5 million in the
first quarter of 1995. This increase was principally attributable to $1.3
million of additional expenses related to the ready-mixed concrete operations.
Interest and financial charges increased $612,000 for the quarter ended
March 31, 1996 from $526,000 for the quarter ended March 31, 1995. This
increase was primarily due to the additional interest expenses arising from the
$16.0 million loans obtained in November of 1995 used to refinance the
long-term debt of the ready-mixed concrete subsidiaries plus the interest
expense on the loans related to the mills conversion project the capitalization
of which ended in the third quarter of 1995.
Part II. OTHER INFORMATION.
Item 2. NONE
Item 5. NONE
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 Financial Data Schedule (for SEC use only)
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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: 5/14/96 By: /S/ Angel Amaral
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Angel Amaral
Vice President & Controller
Date: 5/14/96 By: /S/ Jose O. Torres
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Jose O. Torres
Vice President of Finance & Treasurer
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 214,295
<SECURITIES> 16,305,366
<RECEIVABLES> 28,779,800
<ALLOWANCES> 1,575,854
<INVENTORY> 30,150,370
<CURRENT-ASSETS> 78,508,328
<PP&E> 701,501,431
<DEPRECIATION> 58,540,290
<TOTAL-ASSETS> 255,819,708
<CURRENT-LIABILITIES> 25,917,142
<BONDS> 57,461,098
0
0
<COMMON> 6,000,000
<OTHER-SE> 132,497,941
<TOTAL-LIABILITY-AND-EQUITY> 255,819,708
<SALES> 37,380,055
<TOTAL-REVENUES> 37,403,279
<CGS> 27,040,202
<TOTAL-COSTS> 31,682,462
<OTHER-EXPENSES> 415,423
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,305,394
<INCOME-TAX> 1,612,180
<INCOME-CONTINUING> 3,693,214
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,693,214
<EPS-PRIMARY> .67
<EPS-DILUTED> 0
</TABLE>
