<PAGE>
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 November 30, 1994
[ ] 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 1-4887
TEXAS INDUSTRIES, INC.
(Exact name of registrant as specified in the charter)
Delaware 75-0832210
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1341 West Mockingbird Lane, #700W, Dallas, Texas 75247-6913
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 647-6700
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
--- ---
As of January 6, 1995, 12,405,872 shares of Registrant's Common Stock,
$1.00 par value, were outstanding.
<PAGE>
INDEX
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION Page
- -----------------------------
<TABLE>
<CAPTION>
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets -- November
30, 1994 and May 31, 1994........................................ 3
Consolidated Statements of Income -- three months ended and six
months ended November 30, 1994 and November 30, 1993............. 4
Consolidated Statements of Cash Flows -- six months ended
November 30, 1994 and November 30, 1993.......................... 5
Notes to Consolidated Financial Statements
November 30, 1994 ............................................... 6
Independent Accountants' Review Report............................ 10
Item 2. Management's Discussion and Analysis of
Operating Results and Financial Condition........................ 11
PART II. OTHER INFORMATION
- ---------------------------
Item 4. Submission of Matters to a Vote of Security Holders............... 14
Item 6. Exhibits and Reports on Form 8-K.................................. 14
SIGNATURES
- ----------
</TABLE>
-2-
<PAGE>
(Unaudited)
CONSOLIDATED BALANCE SHEETS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
November 30, May 31,
1994 1994
------------- ---------
In thousands
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary investments $ 21,372 $ 31,766
Notes and accounts receivable 85,335 76,815
Inventories 121,982 135,851
Prepaid expenses 32,230 32,646
-------- --------
TOTAL CURRENT ASSETS 260,919 277,078
OTHER ASSETS
Real estate and other investments 29,845 30,523
Goodwill 71,757 72,916
Commissioning costs and other assets 25,672 23,710
-------- --------
127,274 127,149
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements 93,403 90,685
Buildings 53,472 51,776
Machinery and equipment 727,233 727,818
-------- --------
874,108 870,279
Less allowances for depreciation 533,047 525,386
-------- --------
341,061 344,893
-------- --------
$729,254 $749,120
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to banks $ -- $ 15,000
Trade accounts payable 46,284 44,022
Accrued interest, wages and other items 26,881 25,546
Current portion of long-term debt 20,914 31,127
-------- --------
TOTAL CURRENT LIABILITIES 94,079 115,695
LONG-TERM DEBT 150,448 171,263
DEFERRED FEDERAL INCOME TAXES AND OTHER CREDITS 75,198 73,196
MINORITY INTEREST 37,203 36,295
SHAREHOLDERS' EQUITY
Preferred stock 598 598
Common stock, $1 par value 12,534 12,534
Additional paid-in capital 265,790 265,790
Retained earnings 96,914 75,511
Cost of common shares in treasury (3,510) (1,762)
-------- --------
372,326 352,671
-------- --------
$729,254 $749,120
======== ========
</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE>
(Unaudited)
CONSOLIDATED STATEMENTS OF INCOME
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three months ended Six months ended
November 30, November 30,
1994 1993 1994 1993
--------- --------- --------- ---------
In thousands except per share
<S> <C> <C> <C> <C>
NET SALES $201,095 $173,123 $402,062 $341,871
COSTS AND EXPENSES (INCOME)
Cost of products sold 165,668 147,470 333,089 291,761
Selling, general and administrative 13,883 10,700 26,551 24,247
Interest 5,024 6,932 10,536 14,865
Other income (2,942) (1,507) (4,063) (3,221)
-------- -------- -------- --------
181,633 163,595 366,113 327,652
-------- -------- -------- --------
INCOME BEFORE THE FOLLOWING ITEMS 19,462 9,528 35,949 14,219
INCOME TAXES
Expense 6,390 3,097 11,697 4,580
Change in statutory federal tax rate -- -- -- 1,949
-------- -------- -------- --------
6,390 3,097 11,697 6,529
-------- -------- -------- --------
13,072 6,431 24,252 7,690
Minority interest in Chaparral (1,062) (846) (1,476) (679)
-------- -------- -------- --------
NET INCOME $ 12,010 $ 5,585 $ 22,776 $ 7,011
======== ======== ======== ========
Average common shares 12,648 11,098 12,655 11,092
Net income per common share $ .96 $ .51 $ 1.81 $ .64
======== ======== ======== ========
Cash dividends $ .05 $ .05 $ .10 $ .10
======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements.
-4-
<PAGE>
(Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Six months ended
November 30,
1994 1993
--------- ---------
In thousands
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 22,776 $ 7,011
Gain on disposal of assets (483) (1,059)
Non-cash items
Depreciation, depletion and amortization 24,473 24,529
Deferred taxes 3,363 2,105
Undistributed minority interest 908 151
Other - net 1,789 1,385
Changes in operating assets and liabilities
Notes and accounts receivable (8,455) (3,972)
Inventories and prepaid expenses 12,390 (1,930)
Accounts payable and accrued liabilities 3,948 (2,441)
Real estate and investments 678 501
-------- --------
Net cash provided by operations 61,387 26,280
INVESTING ACTIVITIES
Capital expenditures (19,676) (10,913)
Proceeds from disposition of assets 909 1,127
Purchase of temporary investments -- (2,017)
Proceeds from temporary investments -- 4,706
Cash surrender value - insurance (2,288) (181)
Other - net 72 (423)
-------- --------
Net cash used by investing (20,983) (7,701)
FINANCING ACTIVITIES
Proceeds of short-term borrowing -- 5,000
Repayments of short-term borrowing (15,000) (5,000)
Proceeds of long-term borrowing 63 50,517
Debt retirements (31,106) (77,766)
Purchase of treasury shares (2,034) --
Dividends paid (1,264) (1,117)
Other - net (1,457) (1,416)
-------- --------
Net cash used by financing (50,798) (29,782)
-------- --------
Decrease in cash (10,394) (11,203)
Cash at beginning of period 31,766 26,756
-------- --------
Cash at end of period 21,372 15,553
Temporary investments -- 3,655
-------- --------
Cash and temporary investments at end of period $ 21,372 $ 19,208
======== ========
</TABLE>
See notes to consolidated financial statements.
-5-
<PAGE>
(Unaudited)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the six-month
period ended November 30, 1994, are not necessarily indicative of the results
that may be expected for the year ended May 31, 1995. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year
ended May 31, 1994.
The consolidated financial statements include the accounts of Texas
Industries, Inc. (the Company) and all subsidiaries. The minority interest
represents the 19.1% separate public ownership of Chaparral Steel Company
(Chaparral).
Property, plant and equipment is recorded at cost. Provisions for
depreciation are computed generally using the straight-line method.
Provisions for depletion of mineral deposits are computed on the basis of the
estimated quantity of recoverable raw materials.
For cash flow purposes, temporary investments, which have maturities of
less than 90 days when purchased, are considered cash equivalents.
Earnings per share are computed by deducting preferred dividends from net
income and adjusting for amortization of additional goodwill in connection
with the contingent payment for the acquisition of Chaparral, then dividing
this amount by the weighted average number of common shares outstanding during
the period, including common stock equivalents.
Goodwill, currently being amortized on a straight-line basis over a 40-
year period, is net of accumulated amortization of $11.1 million at November
30, 1994 and $9.9 million at May 31, 1994. Management regularly reviews
remaining goodwill with consideration toward recovery through future operating
results (undiscounted) at the current rate of amortization.
The Company's policy for new facilities is to capitalize certain costs
until the facility is substantially complete and ready for its intended use.
Chaparral began the commissioning of the large beam mill in February 1991.
The mill was substantially complete and ready for its intended use in the
third quarter of fiscal 1992 with a total of $15.1 million of costs deferred.
During the six months ended November 30, 1994 and 1993, $1.5 million was
expensed on a five-year straight-line amortization. Total accumulated
amortization is $8.6 million.
WORKING CAPITAL
Working capital totaled $166.8 million at November 30, 1994, compared to
$161.4 million at May 31, 1994.
Notes and accounts receivable of $85.3 million at November, compared with
$76.8 million at May, are presented net of allowances for doubtful receivables
of $4.0 million at November and $4.6 million at May.
-6-
<PAGE>
WORKING CAPITAL--Continued
<TABLE>
<CAPTION>
<S> <C> <C>
Inventories are as follows:
November May
-------- --------
In thousands
Finished products $ 62,477 $ 72,583
Work in process 15,660 21,708
Raw materials and supplies 43,845 41,560
-------- --------
$121,982 $135,851
======== ========
</TABLE>
Inventories are stated at cost (not in excess of market) generally using
the last-in, first-out method (LIFO). If the average cost method (which
approximates current replacement cost) had been used, inventory values would
have been higher by $11.5 million at November and $12.0 million at May.
LONG-TERM DEBT
Long-term debt is comprised of the following:
<TABLE>
<CAPTION>
November May
-------- --------
In thousands
<S> <C> <C>
Secured Debt
Senior note due through 1999, interest rate at
6.375% (1.5% over LIBOR) $ -- $ 71,000
First mortgage notes of Chaparral, due through
1995, interest rates from 6.59% to 7.09%
(up to 2% over LIBOR) 4,423 7,256
First mortgage notes of Chaparral due
through 2001, interest rate 14.2% 26,595 26,595
Purchase money obligations, maturing through 1999,
interest rates from 7% to 11.5% 3,561 3,727
Unsecured Debt
$150 million bank line of credit maturing through
1999, interest rate at 6.625% (1% over LIBOR) 43,500 --
Senior notes of Chaparral, due through 2004,
interest rates to 10.85% 80,000 80,000
Pollution control bonds, due through 2007,
interest rates from 6.38% to 10% 11,026 11,366
Other, maturing through 2005, interest rates
from 7.5% to 10% 2,257 2,446
-------- --------
171,362 202,390
Less current maturities 20,914 31,127
-------- --------
$150,448 $171,263
======== ========
</TABLE>
Annual maturities of long-term debt for each of the five succeeding years
are $20.9, $13.8, $13.6, $13.5, and $56.5 million.
The Company has available a long-term bank line of credit of $150 million
of which $43.5 million has been borrowed and $5.3 million has been utilized to
support letters of credit. The available borrowings under this line reduce
beginning in February 1995 at quarterly rates of $3.8 million through November
1996 and $5 million thereafter until expiration in November 1999. Commitment
fees at an annual rate of 1/4 of 1% are paid on the unused portion of this
line.
-7-
<PAGE>
LONG-TERM DEBT--Continued
Chaparral has available bank lines of credit of $20 million, which are due
to expire in January 1995, if not renewed. The interest rate charged on
borrowings is .5% over LIBOR. Commitment fees at an annual rate of 3/8 of 1%
are paid on the unused portions of these lines.
The loan agreements contain covenants which provide for minimum working
capital, restrictions on purchases of treasury stock, payment of dividends on
common stock, and limitations on incurring certain indebtedness and making
certain investments. Under the most restrictive of these agreements, the
aggregate amount of annual cash dividends on common stock is limited based on
the ratio, excluding Chaparral, of earnings before interest, taxes,
depreciation and amortization plus dividends from Chaparral to fixed charges.
Chaparral loan agreements also restrict dividends and advances to its
shareholders, including the parent company, to $33.5 million as of November
30, 1994. The Company and Chaparral are in compliance with all loan covenant
restrictions.
Property, plant and equipment, principally Chaparral's, carried at a net
amount of approximately $222.8 million at November 30, 1994 is mortgaged as
collateral for $34.6 million of secured debt.
The amount of interest paid for the six months presented was $9.4 million
in 1994 and $18.5 million in 1993.
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY
Common stock consists of:
<S> <C> <C>
November May
-------- ------
In thousands
Shares authorized 15,000 15,000
Shares outstanding at end of period 12,434 12,489
Average shares outstanding for period,
including equivalents 12,655 11,327
Shares held in treasury 100 45
Shares reserved for stock options and other 1,317 1,334
</TABLE>
There are authorized 100,000 shares of Cumulative Preferred Stock, no par
value, of which 20,000 shares are designated $5 Cumulative Preferred Stock
(Voting), redeemable at $105 per share and entitled to $100 per share upon
dissolution. There were 5,976 shares of $5 Cumulative Preferred Stock
outstanding at November 1994 and May 1994.
An additional 50,000 shares are designated Series A Junior Participating
Preferred Stock, redeemable under certain conditions at a redemption price,
subject to adjustment, equal to 200 times the aggregate amount to be
distributed per share to holders of Common Stock but not less than $100.
There are outstanding rights, issued to common shareholders under the
Company's Shareholders Protection Plan, to purchase 48,484 shares of Series A
Junior Participating Preferred Shares, none of which were outstanding. Under
certain conditions, each right may be exercised to purchase one two-hundredth
of a share for $100. The rights, which are non-voting, expire in 1996 and may
be redeemed by the Company at a price of five cents per right at any time.
-8-
<PAGE>
STOCK OPTION PLANS
The Company's stock option plans provide that non-qualified and incentive
stock options to purchase Common Stock may be granted to officers and key
employees at market prices at date of grant. Generally, options become
exercisable in installments beginning one or two years after date of grant,
and expire six or ten years later depending on the initial date of grant. A
summary of option transactions for the six months ended November 30, 1994,
follows:
<TABLE>
<CAPTION>
Shares Aggregate
Under Option Option Price
------------- -------------
In thousands
<S> <C> <C>
Outstanding at beginning of period 360 $ 7,783
Granted 96 3,220
Exercised (6) (143)
Cancelled (10) (366)
--- -------
Outstanding at end of period 440 $10,494
=== =======
Reserved for future options 819
===
</TABLE>
INCOME TAXES
Federal income taxes for the interim periods ended November 30, 1994 and
1993, have been included in the accompanying financial statements on the basis
of an estimated annual rate. Without consideration of the additional tax
provision caused by the change in the statutory federal tax rate, the
estimated annualized tax rate is 32.5% for 1994 compared with 32.2% for 1993.
The primary reason that these respective tax rates differ from the 35%
statutory corporate rate is due to goodwill expense which is not tax
deductible, percentage depletion which is tax deductible and the benefit of
utilization of general business tax credit carryforward amounts. The Company
made income tax payments of $11,181,000 in 1994 and $5,317,000 in 1993.
Effective June 1, 1992, the Company adopted Statement of Financial
Accounting Standards 109, "Accounting for Income Taxes" (SFAS 109). An
additional income tax provision of $1,949,000 was recognized in the interim
period ended November 30, 1993 due to federal tax legislation enacted on
August 10, 1993 which raised the corporate tax rate to 35%.
LEGAL PROCEEDINGS AND CONTINGENT LIABILITIES
The Company is subject to federal, state and local environmental laws and
regulations concerning, among other matters, air emissions, furnace dust
disposal and wastewater discharge. The Company believes it is in substantial
compliance with applicable environmental laws and regulations.
Notwithstanding such compliance, if damage to persons or property or
contamination of the environment has been or is caused by the conduct of the
Company's business or by hazardous substances or wastes used in, generated or
disposed of by the Company, the Company may be held liable for such damages
and be required to pay the cost of investigation and remediation of such
contamination. The amount of such liability could be material. Changes in
federal or state laws, regulations or requirements or discovery of unknown
conditions could require additional expenditures by the Company.
The Company and subsidiaries are defendants in lawsuits which arose in the
normal course of business. In management's judgment (based on the opinion of
counsel) the ultimate liability, if any, from such legal proceedings will not
have a material effect on the consolidated financial position.
-9-
<PAGE>
EXHIBIT A
---------
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Board of Directors
Texas Industries, Inc.
We have reviewed the accompanying condensed consolidated balance sheet of
Texas Industries, Inc. and subsidiaries as of November 30, 1994, and the
related condensed consolidated statements of income for the three-month and
six-month periods ended November 30, 1994 and 1993, and the condensed
consolidated statements of cash flows for the six-month periods ended November
30, 1994 and 1993. These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which will
be performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial statements
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Texas Industries, Inc. and
subsidiaries as of May 31, 1994, and the related consolidated statements of
income, shareholders' equity, and cash flows for the year then ended [not
present herein] and in our report dated July 15, 1994, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of May 31, 1994, is fairly stated, in all material respects,
in relation to the consolidated balance sheet from which it has been derived.
/s/Ernst & Young LLP
----------------------------------
December 14, 1994
-10-
<PAGE>
(Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATING RESULTS AND FINANCIAL CONDITION
Comparison of operations and financial condition for the three months and
six months ended November 30, 1994 to the three months and six months ended
November 30, 1993.
RESULTS OF OPERATIONS
Current quarter consolidated sales of $201.1 million increased $28.0
million, 16%, as a result of improving demand. Steel shipments were up 4% to
365,000 tons on the strength of increased demand for special bar quality and
wide-flange beam products. With average steel prices up 4%, total steel sales
of $126.3 million increased 8%. Pricing continues to trend upward, supported
by increasing steel scrap cost and stronger demand. Cement/concrete sales of
$74.8 million grew by $18.9 million or 34% as shipments and pricing continue
to advance. Cement shipments of 513,000 tons were 7% better than last year.
Average cement prices improved 17% to just above $50 per ton, but still below
national averages and historical peaks. Expanded ready-mix capacity bolstered
sales by 33%, as average prices were 6% greater. Pricing trends should
continue to move upward through the remainder of the fiscal year. Volumes
during the quarter were hampered by heavy rains.
BUSINESS SEGMENTS
<TABLE>
<CAPTION>
Three months ended
November 30,
1994 1993
-------- --------
In thousands
<S> <C> <C>
NET SALES
Bar mill $ 41,373 $ 34,124
Structural mills 83,973 82,147
Transportation 927 954
-------- --------
TOTAL STEEL 126,273 117,225
Cement 25,744 20,615
Ready-mix 26,889 20,250
Stone, sand & gravel 15,371 14,146
Other products 14,146 11,029
Interplant (7,328) (10,142)
-------- --------
TOTAL CEMENT/CONCRETE 74,822 55,898
-------- --------
TOTAL NET SALES $201,095 $173,123
======== ========
UNITS SHIPPED
Bar mill (tons) 119 106
Structural mills (tons) 246 243
-------- --------
TOTAL STEEL TONS 365 349
Cement (tons) 513 479
Ready-mix (cubic yards) 569 453
Stone, sand & gravel (tons) 2,970 2,900
</TABLE>
-11-
<PAGE>
BUSINESS SEGMENTS--Continued
<TABLE>
<CAPTION>
Three months ended
November 30,
1994 1993
-------- --------
In thousands
<S> <C> <C>
STEEL OPERATIONS
Gross profit $23,200 $22,371
Less: Depreciation & amortization 8,410 8,410
Selling, general & administrative 4,673 3,795
Other income (888) (575)
------- -------
OPERATING PROFIT 11,005 10,741
CEMENT/CONCRETE OPERATIONS
Gross profit 24,081 15,196
Less: Depreciation, depletion & amortization 3,633 3,688
Selling, general & administrative 4,924 3,547
Other income (978) (348)
------- -------
OPERATING PROFIT 16,502 8,309
------- -------
TOTAL OPERATING PROFIT 27,507 19,050
CORPORATE RESOURCES
Other income 1,076 584
Less: Depreciation & amortization 196 175
Selling, general & administrative 3,901 2,999
------- -------
(3,021) (2,590)
INTEREST EXPENSE (5,024) (6,932)
------- -------
INCOME BEFORE TAXES & OTHER ITEMS $19,462 $ 9,528
======= =======
</TABLE>
Consolidated cost of products sold, including depreciation and
amortization, was $165.7 million, an increase of $18.2 million from steel and
$9.9 million from cement/concrete. Steel cost of sales were $111.5 million,
4% higher due to greater shipments, and 4% higher due to product mix and more
costly scrap. Cement/concrete costs were $54.2 million, 22% higher due to
increased volume and expanded ready-mix capacity. Cement unit costs were 15%
better due to lower repair and fuel cost.
Operating profit of $27.5 million in the current quarter was $8.4 million
improved over the 1993 quarter due to higher sales and improved margins.
Steel profits of $11.0 million were slightly more than the 1993 quarter, but
$4.8 million higher than the August quarter which was reduced by the normal
summer refurbishment program. Cement/concrete profits of $16.5 million were
almost double that of a year ago due to factors explained above.
Selling, general and administrative, at $13.9 million is $3.2 million
higher due principally to provisions for larger profit sharing expense in both
businesses. Cement/concrete SG&A increased $1.4 million to $4.9 million due
to $.8 million more incentive expense. Corporate resources SG&A increased $.9
million on $1.1 million more incentive. Interest expense declined $1.9
million to $5.0 million in 1994 due to last year's debt reduction and
restructuring with lower interest rates.
Income tax expense was provided at a slightly higher effective tax rate
which anticipates more pre-tax income in 1994 to be taxed at the 35% U. S.
corporate rate. In 1993 a $1.9 million non-cash adjustment was made to the
balance sheet liability for deferred federal income taxes as a result of the
1% tax increase enacted in August 1993.
-12-
<PAGE>
CASH FLOWS
Net cash provided by operations, $61.4 million in 1994 is $35.1 million
greater than in 1993 due to higher net income and overall improvement in
working capital items. Receivables used cash of $8.5 million, which is less
than the growth in sales for an average month. Inventories are down $12.4
million in total, almost all from steel, as cement inventory changes are
negligible.
Investing activities used $21.0 million cash in 1994 as compared to $7.7
million in 1993. Capital expenditures, $13.3 million in cement/concrete and
$6.3 million in steel, are planned at a higher level this fiscal year compared
to last year.
Financing activities used $21.0 million more cash in 1994, or $50.8 million
due primarily to repayment of debt. TXI replaced its senior secured note and
credit line in October with a larger, $150 million unsecured line of credit,
with generally the same banks. The Company elected to reduce borrowed
principal by $27.5 million as a part of this refinancing. Additionally,
Chaparral repaid $15.0 million of short-term bank debt. Treasury shares of
$2.0 million were purchased during the quarter pursuant to a decision made in
October, authorizing the repurchase of shares for general corporate purposes
when prices are attractive.
FINANCIAL CONDITION
TXI has a $150 million long-term bank line of credit available, $43.5
million of which has been borrowed and $5.3 million has been utilized to
support letters of credit. Chaparral has short-term credit facilities of $20
million, none of which was utilized at November 30, 1994. Chaparral's bank
lines are eligible to renew on January 31, 1995. Management believes that it
will be able to renew these or obtain similar credit facilities.
The Company anticipates that with these or similar credit facilities and
anticipated cash from operations, funds will be adequate to provide for
capital expenditures, scheduled debt repayments and other known working
capital needs.
-13-
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of the Shareholders held October 18, 1994,
shareholders elected as Directors of the Company, Gordon E. Forward and Ralph
B. Rogers, to terms expiring in 1997. Votes cast to elect Gordon E. Forward
were 11,523,957 affirmative, 39,031 opposed and 934,078 abstained or non-
voted. Votes cast to elect Ralph B. Rogers were 11,521,655 affirmative,
41,333 opposed and 934,078 abstained or non-voted. Terms of office expire for
the continuing directors, Robert D. Rogers, Ian Wachmeister and Gerald R.
Heffernan in 1995 and for the continuing directors, Robert Alpert and Richard
I. Galland in 1996.
Item 6. Exhibits and Reports on Form 8-K
The following exhibits are included herein:
(11) Statement re: Computation of earnings per share
(15) Letter re: Unaudited Interim Financial Information
(27) Financial Data Schedule
This schedule contains summary financial information extracted
from the Registrant's Unaudited November 30, 1994 Consolidated Financial
Statements and is qualified in its entirety by reference to such financial
statements.
The Registrant filed a current report on Form 8-K dated October
18, 1994 disclosing that its Board of Directors approved the repurchase,
from time to time, of the Registrant's common stock for general corporate
purposes.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TEXAS INDUSTRIES, INC.
January 12, 1995 /s/ Richard M. Fowler
- ---------------- ----------------------------------------
Richard M. Fowler
Vice President & Chief Financial Officer
January 12, 1995 /s/ James R. McCraw
- ---------------- ----------------------------------------
James R. McCraw
Vice President - Controller
-14-
<PAGE>
INDEX TO EXHIBITS
EXHIBITS DESCRIPTION
-------- -----------
11. Statement re: computation of per share earnings
15. Letter re: Unaudited Interim Financial Information
27. Financial Data Schedule
This schedule contains summary financial information extracted from
the Registrant's Unaudited November 30, 1994 Consolidated Financial
Statements and is qualified in its entirety by reference to such financial
statements.
<PAGE>
EXHIBIT 11
(Unaudited)
COMPUTATION OF EARNINGS PER SHARE
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three months ended Six months ended
November 30, November 30,
1994 1993 1994 1993
-------- -------- -------- --------
In thousands except per share
<S> <C> <C> <C> <C>
AVERAGE SHARES OUTSTANDING
Primary:
Average shares outstanding 12,479 11,017 12,484 11,017
Stock options and other equivalents -
treasury stock method using
average market prices 169 81 171 75
------- ------- ------- -------
TOTAL 12,648 11,098 12,655 11,092
======= ======= ======= =======
Fully diluted:
Average common shares outstanding 12,479 11,017 12,484 11,017
Stock options and other equivalents -
treasury stock method using end of
quarter market price if higher than
average 169 81 171 75
------- ------- ------- -------
TOTAL 12,648 11,098 12,655 11,092
======= ======= ======= =======
NET INCOME APPLICABLE TO COMMON STOCK
Primary:
Net income $12,010 $ 5,585 $22,776 $ 7,011
Adjustments:
Dividend on preferred stock (7) (7) (15) (15)
Contingent price amortization 58 58 116 116
------- ------- ------- -------
TOTAL $12,061 $ 5,636 $22,877 $ 7,112
======= ======= ======= =======
Fully diluted:
Net income $12,010 $ 5,585 $22,776 $ 7,011
Adjustments:
Dividend on preferred stock (7) (7) (15) (15)
Contingent price amortization 58 58 116 116
------- ------- ------- -------
TOTAL $12,061 $ 5,636 $22,877 $ 7,112
======= ======= ======= =======
PER SHARE
Primary:
Net income per common share
and common equivalent share $.96 $.51 $1.81 $.64
======= ======= ======= =======
Fully diluted:
Net income per common share and
dilutive common equivalent share $.96 $.51 $1.81 $.64
======= ======= ======= =======
</TABLE>
<PAGE>
EXHIBIT 15
Board of Directors
Texas Industries, Inc.
We are aware of the incorporation by reference in the Registration Statement
Number 2-95879 on Form S-8, Post-Effective Amendment Number 9 to Registration
Statement Number 2-48986 on Form S-8, and Registration Statement Number 33-
53715 on Form S-8 of Texas Industries, Inc. and in the related Prospectuses of
our report dated December 14, 1994, relating to the unaudited condensed
consolidated interim financial statements of Texas Industries, Inc. which are
included in its Form 10-Q for the quarter ended November 30, 1994.
Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not a part
of the Registration Statement prepared or certified by accountants within the
meaning of the Section 7 or 11 of the Securities Act of 1933.
/s/ Ernst & Young LLP
-----------------------------------
January 11, 1995
Dallas, Texas
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S UNAUDITED NOVEMBER 30, 1994 CONSOLIDATED FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> NOV-30-1994
<CASH> 21,372
<SECURITIES> 0
<RECEIVABLES> 89,331
<ALLOWANCES> 3,996
<INVENTORY> 121,982
<CURRENT-ASSETS> 260,919
<PP&E> 874,108
<DEPRECIATION> 533,047
<TOTAL-ASSETS> 729,254
<CURRENT-LIABILITIES> 94,079
<BONDS> 171,362
<COMMON> 12,534
0
598
<OTHER-SE> 359,194
<TOTAL-LIABILITY-AND-EQUITY> 729,254
<SALES> 402,062
<TOTAL-REVENUES> 402,062
<CGS> 333,089
<TOTAL-COSTS> 333,089
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 627
<INTEREST-EXPENSE> 10,536
<INCOME-PRETAX> 35,949
<INCOME-TAX> 11,697
<INCOME-CONTINUING> 22,776
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,776
<EPS-PRIMARY> 1.81
<EPS-DILUTED> 1.81
</TABLE>
