<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 February 28, 1995
[_] 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 April 7, 1995 12,219,062 shares of Registrant's Common Stock, $1.00
par value, were outstanding.
<PAGE>
INDEX
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
- -----------------------------
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets -- February 28, 1995
and May 31, 1994............................................... 3
Consolidated Statements of Income -- three months ended and
nine months ended February 28, 1995 and February 28, 1994...... 4
Consolidated Statements of Cash Flows -- nine months
ended February 28, 1995 and February 28, 1994.................. 5
Notes to Consolidated Financial Statements
February 28, 1995.............................................. 6
Independent Accountants' Review Report........................... 10
Item 2. Management's Discussion and Analysis of
Operating Results and Financial Condition..................... 11
<CAPTION>
PART II. OTHER INFORMATION
- ---------------------------
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>
February 28, May 31,
1995 1994
---- ----
In thousands
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary investments $ 5,411 $ 31,766
Notes and accounts receivable 97,046 76,815
Inventories 128,147 135,851
Prepaid expenses 29,585 32,646
------- -------
TOTAL CURRENT ASSETS 260,189 277,078
OTHER ASSETS
Real estate and other investments 29,878 30,523
Goodwill 71,178 72,916
Commissioning costs and other assets 25,477 23,710
------- -------
126,533 127,149
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements 98,104 90,685
Buildings 53,985 51,776
Machinery and equipment 729,238 727,818
------- -------
881,327 870,279
Less allowances for depreciation 541,603 525,386
------- -------
339,724 344,893
------- -------
$726,446 $749,120
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to banks $ -- $ 15,000
Trade accounts payable 52,852 44,022
Accrued interest, wages and other items 22,347 25,546
Current portion of long-term debt 17,733 31,127
------- -------
TOTAL CURRENT LIABILITIES 92,932 115,695
LONG-TERM DEBT 144,465 171,263
DEFERRED FEDERAL INCOME TAXES AND OTHER CREDITS 75,557 73,196
MINORITY INTEREST 38,000 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 102,512 75,511
Cost of common shares in treasury (5,942) (1,762)
------- -------
375,492 352,671
------- -------
$726,446 $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 Nine months ended
February 28, February 28,
1995 1994 1995 1994
---- ---- ---- ----
In thousands except per share
<S> <C> <C> <C> <C>
NET SALES $198,991 $170,101 $601,053 $511,972
COSTS AND EXPENSES (INCOME)
Cost of products sold 168,876 146,642 501,965 438,403
Selling, general and administrative 15,780 12,192 42,331 36,439
Interest 4,735 6,509 15,271 21,374
Other income (2,213) (463) (6,276) (3,684)
------- ------- ------- -------
187,178 164,880 553,291 492,532
------- ------- ------- -------
INCOME BEFORE THE FOLLOWING ITEMS 11,813 5,221 47,762 19,440
INCOME TAXES
Expense 3,856 1,511 15,553 6,091
Change in statutory federal tax rate -- -- -- 1,949
------- ------- ------- -------
3,856 1,511 15,553 8,040
------- ------- ------- -------
7,957 3,710 32,209 11,400
Minority interest in Chaparral (1,081) (844) (2,557) (1,523)
------- ------- ------- -------
NET INCOME $ 6,876 $ 2,866 $ 29,652 $ 9,877
======= ======= ======= =======
Average common shares 12,552 11,166 12,621 11,117
Net income per common share $ .55 $ .26 $ 2.36 $ .90
======= ======= ======= =======
Cash dividends $ .10 $ .05 $ .20 $ .15
======= ======= ======= ========
</TABLE>
See notes to consolidated financial statements.
-4-
<PAGE>
(Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Nine months ended
February 28,
1995 1994
---- ----
In thousands
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 29,652 $ 9,877
Gain on disposal of assets (1,819) (1,165)
Non-cash items
Depreciation, depletion and amortization 36,935 36,814
Deferred taxes 3,251 1,991
Undistributed minority interest 1,705 711
Other - net 3,165 2,374
Changes in operating assets and liabilities
Notes and accounts receivable (20,219) (5,775)
Inventories and prepaid expenses 9,036 (14,199)
Accounts payable and accrued liabilities 5,740 (7,600)
Real estate and investments 645 51
------- -------
Net cash provided by operations 68,091 23,079
INVESTING ACTIVITIES
Capital expenditures (29,958) (16,270)
Proceeds from disposition of assets 2,773 1,238
Purchase of temporary investments -- (2,017)
Proceeds from temporary investments -- 4,706
Cash surrender value - insurance (3,351) (709)
Other - net 717 (45)
------- --------
Net cash used by investing (29,819) (13,097)
FINANCING ACTIVITIES
Proceeds of short-term borrowing -- 20,000
Repayments of short-term borrowing (15,000) (10,000)
Proceeds of long-term borrowing 766 71,517
Debt retirements (40,961) (110,065)
Purchase of treasury shares (4,526) --
Dividends paid (2,510) (1,676)
Other - net (2,396) (2,530)
------- --------
Net cash used by financing (64,627) (32,754)
------- --------
Decrease in cash (26,355) (22,772)
Cash at beginning of period 31,766 26,756
------- --------
Cash at end of period 5,411 3,984
Temporary investments -- 3,652
------- --------
Cash and temporary investments at end of period $ 5,411 $ 7,636
======= ========
</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 nine-month period ended February 28,
1995, 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 $11.6 million at February 28, 1995
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 nine months ended February 28, 1995 and 1994, $2.3 million was expensed on a
five-year straight-line amortization. Total accumulated amortization is $9.3
million.
WORKING CAPITAL
Working capital totaled $167.3 million at February 28, 1995, compared to
$161.4 million at May 31, 1994.
Notes and accounts receivable of $97.0 million at February, compared with
$76.8 million at May, are presented net of allowances for doubtful receivables
of $4.4 million at February and $4.6 million at May.
-6-
<PAGE>
WORKING CAPITAL--Continued
Inventories are as follows:
<TABLE>
<CAPTION>
February May
-------- ---
In thousands
<S> <C> <C>
Finished products $ 60,636 $ 72,583
Work in process 16,574 21,708
Raw materials and supplies 50,937 41,560
------- -------
$128,147 $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 February and $12.0 million at May.
LONG-TERM DEBT
Long-term debt is comprised of the following:
<TABLE>
<CAPTION>
February May
-------- ---
In thousands
<S> <C> <C>
Bank obligations maturing through 1999,
interest rates from 6.88% to 7.38%
(1% over LIBOR) $ 44,000 $ 71,000
Senior notes of Chaparral, due through 2004,
interest rates to 10.85% 80,000 80,000
First mortgage notes of Chaparral due
through 2001, interest rate 14.2% 20,458 26,595
First mortgage notes of Chaparral, due through
1995, interest rate 9%(2% over LIBOR) 1,248 7,256
Pollution control bonds, due through 2007,
interest rates from 6.75% to 10% 10,690 11,366
Other, maturing through 2005, interest rates
from 7% to 11.5% 5,802 6,173
------- -------
162,198 202,390
Less current maturities 17,733 31,127
------- -------
$144,465 $171,263
======= =======
</TABLE>
Annual maturities of long-term debt for each of the five succeeding years
are $17.3, $13.8, $13.5, $13.2, and $56.9 million.
In October 1994, the Company replaced its bank-financed $71 million
Senior note and $25 million credit line with a $150 million long-term line of
credit provided by the same bank group. In addition to the $44.0 million
currently outstanding under this line, $5.6 million has been utilized to support
letters of credit. The available borrowings 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 1996, if not renewed. The interest rate charged on
borrowings is .45% over LIBOR. Commitment fees at an annual rate of 1/4 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 and 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 $34.5 million as of February 28, 1995. 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 $218.9 million at February 28, 1995 is mortgaged as
collateral for $25.4 million of secured debt.
The amount of interest paid for the nine months presented was $12.2 million
in 1995 and $25.8 million in 1994.
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY
Common stock consists of:
February May
-------- ---
In thousands
<S> <C> <C>
Shares authorized 15,000 15,000
Shares outstanding at end of period 12,356 12,489
Average shares outstanding for period,
including equivalents 12,621 11,327
Shares held in treasury 178 45
Shares reserved for stock options and other 1,316 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 February 1995 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 directors, 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 nine months ended February 28, 1995, follows:
<TABLE>
<CAPTION>
Shares Aggregate
Under Option Option Price
------------- -------------
In thousands
<S> <C> <C>
Outstanding at beginning of period 360 $ 7,783
Granted 219 7,002
Exercised (8) (182)
Cancelled (12) (425)
--- ------
Outstanding at end of period 559 $14,178
=== ======
Reserved for future options 697
===
</TABLE>
INCOME TAXES
Federal income taxes for the interim periods ended February 28, 1995 and
1994, 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 32.6% for 1995 compared with 31.3% for 1994. 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 $16,586,000 in 1995 and $7,820,000 in 1994.
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 February 28, 1994 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 February 28, 1995, and the related
condensed consolidated statements of income for the three-month and nine-month
periods ended February 28, 1995 and 1994, and the condensed consolidated
statements of cash flows for the nine-month periods ended February 28, 1995 and
1994. 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
------------------------------
March 16, 1995
-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
nine months ended February 28, 1995 to the three months and nine months ended
February 28, 1994.
RESULTS OF OPERATIONS
Current quarter consolidated sales of $199.0 million increased $28.9
million, 17%, as a result of improving demand. Steel shipments were up 10% to
373,000 tons on the strength of increased demand for special bar quality and
wide-flange beam products. With average steel prices up 5%, total steel sales of
$132.4 million increased 12%. Pricing continues to trend upward, supported by
increasing steel scrap cost and stronger demand. Cement/concrete sales of $66.6
million grew by $15.2 million or 30% as shipments and pricing continue to
advance. Cement shipments of 487,000 tons were flat compared to last year and
continue at near-capacity levels. Average cement prices improved 16% to just
above $52 per ton, but are still below national averages and historical peaks.
Expanded ready-mix operations experienced sales growth of 41%, 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; however, improving demand should favor strong shipments for the balance
of the year.
BUSINESS SEGMENTS
<TABLE>
<CAPTION>
Three months ended
February 28,
1995 1994
---- ----
In thousands
<S> <C> <C>
NET SALES
Bar mill $ 41,565 $ 33,802
Structural mills 89,792 83,972
Transportation 1,031 913
------- -------
TOTAL STEEL 132,388 118,687
Cement 25,597 21,417
Ready-mix 26,567 18,807
Stone, sand & gravel 15,042 11,538
Other products 12,100 8,910
Interplant (12,703) (9,258)
------- -------
TOTAL CEMENT/CONCRETE 66,603 51,414
------- -------
TOTAL NET SALES $198,991 $170,101
======= =======
UNITS SHIPPED
Bar mill(tons) 115 102
Structural mills (tons) 258 237
------- -------
TOTAL STEEL TONS 373 339
Cement (tons) 487 486
Ready-mix (cubic yards) 556 416
Stone, sand & gravel (tons) 2,809 2,396
</TABLE>
-11-
<PAGE>
BUSINESS SEGMENTS--Continued
<TABLE>
<CAPTION>
Three months ended
February 28,
1995 1994
---- ----
In thousands
<S> <C> <C>
STEEL OPERATIONS
Gross profit $ 23,383 $ 22,403
Less: Depreciation & amortization 8,579 8,557
Selling, general & administrative 5,194 3,995
Other income (1,533) (846)
------- -------
OPERATING PROFIT 11,143 10,697
CEMENT/CONCRETE OPERATIONS
Gross profit 19,458 12,961
Less: Depreciation, depletion & amortization 3,690 3,541
Selling, general & administrative 6,229 4,640
Other income (566) (808)
------- -------
OPERATING PROFIT 10,105 5,588
------- -------
TOTAL OPERATING PROFIT 21,248 16,285
CORPORATE RESOURCES
Other income 114 (1,191)
Less: Depreciation & amortization 194 187
Selling, general & administrative 4,620 3,177
------- -------
(4,700) (4,555)
INTEREST EXPENSE (4,735) (6,509)
------- -------
INCOME BEFORE TAXES & OTHER ITEMS $ 11,813 $ 5,221
======= =======
</TABLE>
Consolidated cost of products sold, including depreciation and
amortization, was $168.9 million, an increase of $12.7 million from steel and
$9.6 million from cement/concrete. Steel cost of sales was $117.6 million, 10%
higher due to greater shipments, and 2% higher due to product mix and more
costly maintenance. Cement/concrete costs were $51.3 million, 23% higher due to
increased volume and expanded ready-mix capacity. Cement unit costs were the
same as last year as higher maintenance costs were offset by lower fuel cost.
Operating profit of $21.2 million in the current quarter was $5.0 million
improved over the 1994 quarter due to higher sales and improved margins. Steel
profits of $11.1 million were 4% better than the 1994 quarter, and 1% higher
than the November quarter. Cement/concrete profits of $10.1 million were 81%
better than that of a year ago due to factors explained above.
Selling, general and administrative expense, at $15.8 million is $3.6
million higher due principally to provisions for larger profit sharing expense
in both businesses. Steel SG&A rose $1.2 million to $5.2 million.
Cement/concrete SG&A increased $1.6 million to $6.2 million due to $.5 million
more incentive expense. Corporate resources SG&A increased $1.4 million on $.7
million more incentive. Interest expense declined $1.8 million to $4.7 million
in 1995 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 1995 to be taxed at the 35% U. S.
corporate rate. In 1994 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%
federal tax increase enacted in August 1993.
-12-
<PAGE>
CASH FLOWS
Net cash provided by operations, $68.1 million through nine months of FY
1995 is $45.0 million greater than in 1994 due to higher net income and overall
improvement in working capital items. Receivables used cash of $20.2 million,
which is more than the $16.2 million growth in the month of February sales;
however, an increasing portion of consolidated sales is from cement/concrete
which remains in receivables longer. Inventories are down $7.7 million in total,
a $12.2 million decline in steel, as cement/concrete inventories increased $4.5
million.
Investing activities used $29.8 million cash in 1995 as compared to $13.1
million in 1994. Capital expenditures, $19.5 million in cement/concrete and $9.9
million in steel, are planned at a higher level this fiscal year compared to
last year.
Financing activities used $31.8 million more cash in 1995, or $64.6 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 and $12.3 million long-term. Treasury
shares of $4.5 million were purchased during the last two quarters pursuant to a
decision made in October, authorizing the repurchase of shares for general
corporate purposes when prices are attractive.
Cash balances have declined by $26.4 million primarily due to the planned
reduction of debt with excess cash.
FINANCIAL CONDITION
TXI has a $150 million long-term bank line of credit available, $44.0
million of which has been borrowed and $5.6 million has been utilized to support
letters of credit. Chaparral has short-term credit facilities of $20 million,
none of which was utilized at February 28, 1995. Chaparral's bank lines are
eligible to renew on January 31, 1996. 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 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 February 28, 1995 Consolidated Financial Statements and
is qualified in its entirety by reference to such financial statements.
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.
April 12, 1995 /s/ Richard M. Fowler
-------------- ----------------------------------------
Richard M. Fowler
Vice President & Chief Financial Officer
April 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 February 28, 1995 Consolidated Financial Statements and
is qualified in its entirety by reference to such financial statements.
-15-
<PAGE>
EXHIBIT 11
(Unaudited)
COMPUTATION OF EARNINGS PER SHARE
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three months ended Nine months ended
February 28, February 28,
1995 1994 1995 1994
---- ---- ---- ----
In thousands except per share
<S> <C> <C> <C> <C>
AVERAGE SHARES OUTSTANDING
Primary:
Average shares outstanding 12,395 11,026 12,455 11,020
Stock options and other equivalents -
treasury stock method using
average market prices 157 140 166 97
------ ------ ------ ------
TOTAL 12,552 11,166 12,621 11,117
====== ====== ====== ======
Fully diluted:
Average common shares outstanding 12,395 11,026 12,455 11,020
Stock options and other equivalents -
treasury stock method using end of
quarter market price if higher than
average 157 140 166 97
------ ------ ------ ------
TOTAL 12,552 11,166 12,621 11,117
====== ====== ====== ======
NET INCOME APPLICABLE TO COMMON STOCK
Primary:
Net income $ 6,876 $ 2,866 $29,652 $ 9,877
Adjustments:
Dividend on preferred stock (7) (7) (22) (22)
Contingent price amortization 58 58 174 174
------ ------ ------ ------
TOTAL $ 6,927 $ 2,917 $29,804 $10,029
====== ====== ====== ======
Fully diluted:
Net income $ 6,876 $ 2,866 $29,652 $ 9,877
Adjustments:
Dividend on preferred stock (7) (7) (22) (22)
Contingent price amortization 58 58 174 174
------ ------ ------ ------
TOTAL $ 6,927 $ 2,917 $29,804 $10,029
====== ====== ====== ======
PER SHARE
Primary:
Net income per common share
and common equivalent share $ .55 $ .26 $ 2.36 $ .90
====== ====== ====== ======
Fully diluted:
Net income per common share and
dilutive common equivalent share $ .55 $ .26 $ 2.36 $ .90
====== ====== ====== ======
</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 March 16, 1995, 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 February 28, 1995.
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
------------------------------------
April 11, 1995
Dallas, Texas
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Registrant's Unaudited February 28, 1995 Consolidated Financial Statements and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> FEB-28-1995
<CASH> 5,411
<SECURITIES> 0
<RECEIVABLES> 101,468
<ALLOWANCES> 4,422
<INVENTORY> 128,147
<CURRENT-ASSETS> 260,189
<PP&E> 881,327
<DEPRECIATION> 541,603
<TOTAL-ASSETS> 726,446
<CURRENT-LIABILITIES> 92,932
<BONDS> 162,198
<COMMON> 12,534
0
598
<OTHER-SE> 362,360
<TOTAL-LIABILITY-AND-EQUITY> 726,446
<SALES> 601,053
<TOTAL-REVENUES> 601,053
<CGS> 501,965
<TOTAL-COSTS> 501,965
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,207
<INTEREST-EXPENSE> 15,271
<INCOME-PRETAX> 47,762
<INCOME-TAX> 15,553
<INCOME-CONTINUING> 29,652
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,652
<EPS-PRIMARY> 2.36
<EPS-DILUTED> 2.36
</TABLE>
