1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarter Ended
JUNE 30, 1996
Commission File Number 1-12984
[COMPANY LOGO]
CENTEX CONSTRUCTION PRODUCTS, INC.
A Delaware Corporation
IRS Employer Identification No. 75-2520779
3710 Rawlins, Suite 1600
Dallas, Texas 75219
(214) 559-6500
The registrant 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 and
has been subject to such filing requirements for the past 90 days.
- --------------------------------------------------------------------------------
As of the close of business on August 9, 1996, 22,135,464 shares of Centex
Construction Products, Inc. common stock were outstanding.
- --------------------------------------------------------------------------------
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CENTEX CONSTRUCTION PRODUCTS, INC. AND SUBSIDIARIES
FORM 10-Q TABLE OF CONTENTS
JUNE 30, 1996
PAGE
----
PART I. FINANCIAL INFORMATION (UNAUDITED)
ITEM 1. Condensed Consolidated Financial
Statements 1
Condensed Consolidated Statement of
Earnings for the Three Months Ended
June 30, 1996 2
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statement of
Cash Flows for the Three Months Ended
June 30, 1996 4
Notes to Condensed Consolidated Financial
Statements 5
ITEM 2. Management's Discussion and Analysis of
Results of Operations and Financial
Condition 6-8
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 10
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CENTEX CONSTRUCTION PRODUCTS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ITEM 1.
The condensed consolidated financial statements include the accounts of Centex
Construction Products, Inc. and subsidiaries ("CXP" or the "Company"), and have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed consolidated financial
statements be read in conjunction with the consolidated financial statements
and the notes thereto included in the Registrant's latest Annual Report on Form
10-K. In the opinion of the Company, all adjustments necessary to present
fairly the information in the following condensed consolidated financial
statements of the Company have been included. The results of operations for
such interim periods are not necessarily indicative of the results for the full
year.
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4
CENTEX CONSTRUCTION PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(dollars in thousands, except per share data)
(unaudited)
FOR THE THREE MONTHS ENDED June 30,
-----------------------
1996 1995
---------- ----------
REVENUES
Cement . . . . . . . . . . . . . . . . . $ 36,677 $ 31,115
Wallboard . . . . . . . . . . . . . . . 15,089 14,633
Concrete/Aggregates . . . . . . . . . . 10,139 9,456
Other, net . . . . . . . . . . . . . . . 501 853
Less Intersegment Sales . . . . . . . . (1,348) (953)
---------- ----------
61,058 55,104
---------- ----------
COSTS AND EXPENSES
Cement . . . . . . . . . . . . . . . . . 26,624 23,237
Wallboard . . . . . . . . . . . . . . . 11,660 10,892
Concrete/Aggregates . . . . . . . . . . 8,389 8,751
Less Intersegment Purchases . . . . . . (1,348) (953)
Corporate General & Administrative . . . 698 628
Interest (Income) Expense, net . . . . . (163) 485
---------- ----------
45,860 43,040
---------- ----------
EARNINGS BEFORE INCOME TAXES 15,198 12,064
Income Taxes . . . . . . . . . . . . . . 5,335 4,234
---------- ----------
NET EARNINGS $ 9,863 $ 7,830
========== ==========
EARNINGS PER SHARE $ 0.44 $ 0.34
========== ==========
AVERAGE SHARES OUTSTANDING 22,525,567 22,959,804
========== ==========
CASH DIVIDENDS PER SHARE $ 0.05 $ -0-
========== ==========
See notes to condensed consolidated financial statements.
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5
CENTEX CONSTRUCTION PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30, March 31,
ASSETS 1996 1996
- ------ ------------- ------------
(Unaudited) (*)
Current Assets
Cash and Cash Equivalents . . . . . . . $ 22,563 $ 20,799
Accounts and Notes Receivable, net . . 39,756 33,532
Inventories . . . . . . . . . . . . . . 26,898 29,691
-------- --------
Total Current Assets . . . . . . . . 89,217 84,022
-------- --------
Property, Plant and Equipment . . . . . . 309,674 308,600
Less Accumulated Depreciation . . . . . (131,594) (128,419)
-------- --------
Property, Plant & Equipment, net . . 178,080 180,181
Notes Receivable, net . . . . . . . . . . 1,492 1,395
Other Assets . . . . . . . . . . . . . . . 3,922 3,977
-------- --------
$272,711 $269,575
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Accounts Payable . . . . . . . . . . . $ 17,601 $ 15,020
Accrued Liabilities . . . . . . . . . . 21,130 23,029
Current Portion of Long-Term Debt . . . 80 80
Income Taxes Payable . . . . . . . . . 5,189 -
-------- --------
Total Current Liabilities . . . . . 44,000 38,129
-------- --------
Long-term Debt . . . . . . . . . . . . . . 640 640
Deferred Income Taxes . . . . . . . . . . 13,903 14,344
Stockholders' Equity
Common Stock, Par Value $0.01;
Authorized 50,000,000 Shares;
Issued and Outstanding 22,217,864 and
22,978,504 Shares, respectively . 222 230
Capital in Excess of Par Value . . . . 150,579 161,617
Retained Earnings . . . . . . . . . . . 63,367 54,615
-------- --------
Total Stockholders' Equity . . . . . . . . 214,168 216,462
-------- --------
$272,711 $269,575
======== ========
* Condensed from audited financial statements.
See notes to condensed consolidated financial statements.
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CENTEX CONSTRUCTION PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
(unaudited)
FOR THE THREE MONTHS ENDED June 30,
------------------
1996 1995
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Earnings . . . . . . . . . . . . . . $ 9,863 $ 7,830
Adjustments to Reconcile Net Earnings
to Net Cash Provided by Operating
Activities -
Depreciation, Depletion and
Amortization . . . . . . . . . 3,344 3,691
Deferred Income Tax
Provision . . . . . . . . . . (441) (268)
Increase in Accounts and Notes
Receivable . . . . . . . . . . . . . (6,320) (3,862)
Decrease in Inventories . . . . . . . . 2,793 544
Increase in Accounts Payable and
Accrued Liabilities . . . . . . . . 721 582
Decrease (Increase) in
Other, net . . . . . . . . . . . . . 51 (378)
Increase in Income Taxes Payable . . . . 5,189 4,502
-------- -------
15,200 12,641
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Property, Plant and Equipment
Additions, net . . . . . . . . . . . (1,241) (5,867)
-------- --------
(1,241) (5,867)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends Paid . . . . . . . . . . . . . (1,149) -
Retirement of Common Stock . . . . . . . (11,258) -
Proceeds from Stock Option Exercises . . 212 -
Increase in Long-term Debt . . . . . . . - 500
-------- --------
(12,195) 500
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS . . . . . . . . . . . . 1,764 7,274
CASH AT BEGINNING OF PERIOD . . . . . . . 20,799 2,475
---------- --------
CASH AT END OF PERIOD . . . . . . . . . . $ 22,563 $ 9,749
======== ========
See notes to condensed consolidated financial statements.
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CENTEX CONSTRUCTION PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
(unaudited)
(A) A summary of changes in stockholders' equity is presented below.
Capital in
Common Excess of Retained
Stock Par Value Earnings Total
--------- --------- -------- ----------
(dollars in thousands)
Balance, March 31, 1995 $ 230 $161,355 $ 21,820 $183,405
Net Earnings - - 33,944 33,944
Stock Option Exercises - 262 - 262
Dividends Paid - - (1,149) (1,149)
------ --------- --------- ---------
Balance March 31, 1996 230 161,617 54,615 216,462
Net Earnings - - 9,863 9,863
Stock Option Exercises - 212 - 212
Dividends Paid - - (1,111) (1,111)
Retirement of Common Stock (8) (11,250) - (11,258)
------ --------- --------- ---------
BALANCE JUNE 30, 1996 $ 222 $ 150,579 $ 63,367 $ 214,168
====== ========= ========= =========
(B) Impact of New Accounting Pronouncements.
During the quarter, the Company adopted Financial Accounting Standards
Board (FASB) Statement No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" (SFAS No. 121). SFAS No.
121 requires that certain long-lived assets and intangibles be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. There was no material
effect on the Company's financial statements from the Company's adoption of
SFAS No. 121.
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CENTEX CONSTRUCTION PRODUCTS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
Centex Construction Product's revenues for the first quarter of fiscal
1997 totaled $61,058,000, an 11% increase over revenues of $55,104,000 for the
same quarter last year. CXP's net earnings for the quarter ended June 30, 1996
were $9,863,000 versus $7,830,000 for the same quarter last year. Earnings per
share for this year's quarter were $0.44 compared to $0.34 for the same quarter
in fiscal 1996. The quarter's earnings gain resulted from all time high
financial results in the Company's Cement, Gypsum Wallboard and Concrete
operations. A strong national cement market and continued high national gypsum
wallboard demand generated strong pricing during the current quarter. Also,
construction activity in the Austin, Texas market continued strong, as
reflected by a 35% increase in Concrete sales volume.
The following table compares sales volume, average unit sales prices
and unit operating margins for the Company's operations:
Cement Wallboard Concrete Aggregates
(Ton) (MSF) (Cubic Yard) (Ton)
------------- -------------- -------------- ---------------
Quarter Ended June 30, 1996 1995 1996 1995 1996 1995 1996 1995
---------------------- ------- ------ ------- ------ ------ ------- ------ ------
Sales Volume (M) 583 520 173 158 177 140 467 792
Average Net Sales Price $62.94 $59.81 $87.36 $92.60 $46.01 $45.07 $ 4.26 $ 3.97
Operating Margin $17.25 $15.14 $19.86 $21.36 $ 7.67 $ 6.44 $ 0.84 $ 0.21
Cement revenues for the quarter totaled $36,677,000, up 18% above the
same quarter in the prior year. Operating earnings were $10,053,000, a 28%
increase over $7,878,000 for the same quarter last year. A combination of an
additional 63,000 tons in sales volume and higher operating margins from a 5%
increase in sales prices partially offset by a 2% increase in cost of sales
accounted for the net quarterly gain in operating earnings. Price increases of
$2 per ton and $5 per ton were implemented during the quarter in northern
California and northern Texas, respectively. Last year's sales volume was
negatively impacted by unfavorable weather conditions in CXP's western markets.
Current quarter's production cost was up due mainly to the timing of a brick
job at the Illinois plant and an increased percentage for the current quarter
of higher costing western produced product.
Gypsum Wallboard revenues of $15,089,000 for the quarter increased 3%
over revenues of $14,633,000 for the same quarter in the prior fiscal year.
Operating earnings for the quarter were $3,429,000, up slightly over $3,375,000
for the same period last year. Increased sales volume and reduced production
cost, partially offset by a 6% decline in average net sales prices resulted in
the net gain for the quarter. Sales volume of 173 million square feet ("MMSF")
for this year's quarter was 10% higher than 158 MMSF sold during the prior
year's quarter. Increased production volume
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and additional inventory sales accounted for the sales volume gain. National
wallboard consumption for the first six months of calendar 1996 was at a record
pace as single-family home construction remained strong. CXP's average net
sales price for the quarter was $87.36 per thousand board feet ("MSF"), 6%
lower than $92.60 per MSF for the same quarter last year but higher than $86.42
per MSF for the March 31, 1996 quarter. Although the Company's average net
sales price for Gypsum Wallboard was lower in fiscal 1996 than in fiscal 1995,
it rebounded during the current quarter. Supported by strong housing activity,
a nationwide price increase midway through the quarter raised CXP's sales price
to approximately $89.00 per MSF by quarter end. Cost of sales decreased 6% due
primarily to lower paper cost.
Revenues from Concrete and Aggregates were $10,139,000 for the quarter
this year, a 7% increase over $9,456,000 for the same quarter a year ago.
Concrete and Aggregates reported an operating profit for the quarter of
$1,750,000, up 63% over $1,071,000 for the same quarter last year. Concrete
earnings increased 51% over last year's comparable quarter due to improved
margins and a 35% gain in sales volume at the Austin concrete operation. Total
Concrete sales volume for the quarter this year was 177,000 cubic yards, a 26%
increase over 140,000 cubic yards for the same quarter last year. CXP's
average Concrete net sales price of $46.01 per cubic yard for the current
quarter was 2% higher than $45.07 for the same quarter a year ago. Aggregates
earnings increased 118% over prior year's quarter due to higher operating
margins. CXP's Aggregates operation reported sales volume of 467,000 tons for
the quarter this year, 41% below sales volume of 792,000 tons for the same
quarter last year. Sales volume decreased primarily due to the disposition of
CXP's north Texas sand and gravel operation in last year's third quarter.
Sales price gains, coupled with an increased percentage of sales of higher
priced products, resulted in an average net sales price of $4.26 per ton for
the current quarter, up 7% from $3.97 per ton last year.
Other Income of $501,000 for the quarter decreased $352,000 from prior
year's quarter due to a $220,000 land sales gain and $104,000 of clinker sales
income last year. Other income included clinker sales, non-inventoried
aggregate sales, trucking income, asset sales and other miscellaneous items.
Net interest income for this year's quarter was $163,000 compared to
last year's quarter interest expense of $485,000. Debt outstanding for the
quarter and at June 30,1996 was $720,000 compared to $25 million outstanding at
June 30, 1995. Cash balance at June 30,1996 was $22.6 million, up $1.8 million
from $20.8 million at March 31, 1996.
STOCK REPURCHASE PROGRAM
On December 5, 1994, the Company's Board of Directors approved the
repurchase of up to 1,000,000 shares of the Company's common stock. The
Company repurchased on the open market and from Centex Corporation a total of
40,196 shares in fiscal year 1995, but none in fiscal year 1996. During the
quarter ending June 30, 1996, CXP repurchased 778,400 shares of its common
shares from the public. The share repurchases increased Centex Corporation's
ownership interest from 49% to 50.6% at June 30, 1996. Since June 30, 1996 CXP
has repurchased an additional 100,600 shares, increasing Centex Corporation's
ownership to approximately 50.8%. As of August 12, 1996 CXP has repurchased a
cumulative total of 919,196 shares. Also, during the current quarter, CXP's
Board of Directors increased its share repurchase authorization to 2,000,000
shares from 1,000,000 shares.
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FINANCIAL CONDITION
The Company has a five year $35 million unsecured revolving credit
facility to finance its working capital and capital expenditures requirements.
Based on its financial condition and a relatively debt free balance sheet at
June 30, 1996, CXP believes that its internally generated cash flow coupled
with funds available under the credit facility will enable CXP to provide
adequately for its current operations and future growth.
Working capital at June 30, 1996 was $45.2 million, down slightly from
$45.9 million at March 31, 1996. Stock repurchases during the quarter amounted
to $11.3 million. Capital spending of $1.3 million for this quarter was down
from prior year's quarter due to last year's recommissioning of the second
kiln at the Laramie plant.
OUTLOOK
The Company's positive financial results during the first three months
of fiscal 1997 reflect continued strength in demand and pricing for its Cement
and Gypsum Wallboard products. Assuming no significant change in overall
economic climate, Cement and Gypsum Wallboard demand should remain robust
during the remainder of fiscal 1997. As a result, the Company should post its
third consecutive record financial performance. At June 30, 1996 the Company
was relatively debt free and well positioned to take advantage of potential
expansion opportunities.
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CENTEX CONSTRUCTION PRODUCTS, INC.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 - Financial Data Schedule
(b) Reports on Form 8-K
The Registrant filed no reports on Form 8-K during
the quarter ended June 30, 1996.
All other items required under Part II are omitted because they are not
applicable.
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SIGNATURES
Pursuant to the requirements 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.
CENTEX CONSTRUCTION PRODUCTS, INC.
-----------------------------------------
Registrant
August 12, 1996 /s/ O. G. Dagnan
---------------------------------------
O. G. Dagnan
President and Chief Executive Officer
August 12, 1996 /s/ Arthur R. Zunker, Jr.
----------------------------------------------
Arthur R. Zunker, Jr.
Senior Vice President-Finance and Treasurer
(principal financial and
chief accounting officer)
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
27 Financial Data Schedule
5
0000918646
CENTEX CONSTRUCTION PRODUCTS, INC.
1,000
3-MOS
MAR-31-1997
APR-01-1996
JUN-30-1996
22,563
0
39,756
0
26,898
89,217
309,674
131,594
272,711
44,000
640
222
0
0
213,946
272,711
60,557
61,221
0
45,325
698
0
0
15,198
5,335
0
0
0
0
9,863
0.44
0
