-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Q9deWD7xcO8udpsUpZu3RvZ0ac4576DyKRiDCUDLaibRfQw3kzBhIEW8zM4ejSrS RQlOV//fzRXD35Pw75Zx5A== 0000103973-95-000005.txt : 19950516 0000103973-95-000005.hdr.sgml : 19950516 ACCESSION NUMBER: 0000103973-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VULCAN MATERIALS CO CENTRAL INDEX KEY: 0000103973 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 630366371 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04033 FILM NUMBER: 95538809 BUSINESS ADDRESS: STREET 1: ONE METROPLEX DR CITY: BIRMINGHAM STATE: AL ZIP: 35209 BUSINESS PHONE: 2058773000 MAIL ADDRESS: STREET 1: PO BOX 530187 CITY: BIRMINGHAM STATE: AL ZIP: 35253-0187 10-Q 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, 1995 OR 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 1-4033 VULCAN MATERIALS COMPANY (Exact name of registrant as specified in its charter) New Jersey 63-0366371 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Metroplex Drive, Birmingham, Alabama 35209 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code (205) 877-3000 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 APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Shares outstanding Class at April 30, 1995 Common Stock, $1 Par Value 35,858,944 VULCAN MATERIALS COMPANY FORM 10-Q QUARTER ENDED MARCH 31, 1995 Contents Page No. PART I FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets ................ Condensed Consolidated Statements of Earnings......... Condensed Consolidated Statements of Cash Flows....... Notes to Condensed Consolidated Financial Statements.. Exhibit 11 - Computation of Earnings Per Share........ Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges .................................. Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition.............. PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K..................... SIGNATURES............................................................
PART I. FINANCIAL INFORMATION Item 1. Financial Statements VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE SHEETS* (Amounts in thousands) March 31, December 31, March 31, Assets 1995 1994 1994 Current assets Cash and cash equivalents.......................... $ 1,502 $ 7,717 $ 2 Accounts and notes receivable, less allowance for doubtful accounts: Mar. 31, 1995, $8,571; Dec. 31, 1994, $8,244; Mar. 31, 1994, $7,447.............. 186,724 182,128 149,028 Inventories: Finished products................................ 88,744 77,721 82,964 Raw materials.................................... 10,947 9,248 5,553 Products in process.............................. 1,110 623 1,271 Operating supplies and other..................... 26,434 24,889 24,706 Total inventories........................... 127,235 112,481 114,494 Deferred income taxes.............................. 28,034 29,074 26,053 Prepaid expenses................................... 6,528 5,398 10,367 Total current assets........................ 350,023 336,798 299,944 Investments and long-term receivables................ 58,859 58,138 56,689 Property, plant and equipment, at cost less accumulated depreciation, depletion and amortization: Mar. 31, 1995, $1,121,863; Dec. 31, 1994, $1,107,132; Mar. 31, 1994, $1,060,169.................................... 698,817 701,757 658,633 Deferred charges and other assets..................... 83,223 84,451 64,803 Total........................................ $1,190,922 $1,181,144 $1,080,069 Liabilities and Shareholders' Equity Current liabilities Current maturities of long-term obligation........... $ 4,703 $ 4,687 $ 1,745 Notes payable........................................ 33,689 42,779 7,457 Other current liabilities............................ 184,856 163,882 143,300 Total current liabilities..................... 223,248 211,348 152,502 Long-term obligations.................................. 97,193 97,380 101,956 Deferred income taxes.................................. 82,823 82,507 75,121 Other noncurrent liabilities........................... 55,516 58,280 57,323 Other commitments and contingent liabilities........... Shareholders' equity................................... 732,142 731,629 693,167 Total......................................... $1,190,922 $1,181,144 $1,080,069 *Balance sheets as of March 31 are unaudited. The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Amounts and shares in thousands, except per share data) Three Months Ended March 31* 1995 1994 Net sales...........................................$ 294,388 $ 216,893 Cost of goods sold.................................. 235,602 195,883 Gross profit on sales............................... 58,786 21,010 Selling, administrative and general expenses........ 37,394 27,841 Other operating costs............................... 1,243 1,338 Other income, net................................... 6,853 2,695 Earnings (loss) before interest expense and income taxes.................................. 27,002 (5,474) Interest expense.................................... 2,521 2,210 Earnings (loss) before income taxes................. 24,481 (7,684) Provision for income taxes.......................... 8,519 (2,458) Net earnings (loss).................................$ 15,962 $ (5,226) Primary and fully diluted earnings (loss) per share of common stock............................. $0.44 ($0.14) Average common and common equivalent shares outstanding**.............................. 36,094 36,718 Cash dividends per share of common stock............ $0.365 $0.33 Depreciation, depletion and amortization deducted above.................................... $26,848 $26,834 Effective tax rate.................................. 34.8% 32.0% * Unaudited **Primary and fully diluted earnings (loss) per share of common stock is computed by dividing the net loss by the weighted average number of common shares and common share equivalents outstanding during the period. Common share equivalents represent the number of shares contingently issuable under a long-range performance share plan. Refer to Exhibit 11 for computation. The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) Three Months Ended March 31* 1995 1994 Operations Net earnings (loss).........................................$ 15,962 $ (5,226) Adjustments to reconcile net earnings (loss) to net cash provided by continuing operations: Depreciation, depletion and amortization................ 26,848 26,834 Increase in assets before effects of business acquisitions................................. (19,440) (8,630) Increase in liabilities before effects of business acquisitions................................. 16,917 2,168 Other, net.............................................. (2,910) 939 Net cash provided by continuing operations........... 37,377 16,085 Net cash used for discontinued operations................... (327) (139) Net cash provided by operations...................... 37,050 15,946 Investing Activities Purchases of property, plant and equipment.................. (24,204) (23,475) Proceeds from sale of property, plant and equipment......... 5,987 3,031 Investment in nonconsolidated companies..................... (577) (328) Withdrawal of earnings from nonconsolidated companies....... 250 - Net cash used for investing activities............... (18,544) (20,772) Financing Activities Net borrowings - commercial paper and bank lines of credit.. (9,090) 7,400 Payment of short-term debt.................................. (157) (164) Payment of long-term debt................................... (15) (4,357) Purchases of common stock................................... (2,372) - Dividends paid.............................................. (13,087) (12,047) Net cash used for financing activities............... (24,721) (9,168) Net decrease in cash and cash equivalents................... (6,215) (13,994) Cash and cash equivalents at beginning of year.............. 7,717 13,996 Cash and cash equivalents at end of period..................$ 1,502 $ 2 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest (net of amount capitalized)..................$ 846 $ 423 Income taxes.......................................... 1,385 815 SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: Liabilities assumed in business acquisition............. - 5,761 Fair value of stock issued in business acquisition...... - 7,476 *Unaudited The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The accompanying condensed financial statements have been prepared in compliance with Form 10-Q instructions and thus do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the statements reflect all adjustments, including those of a normal recurring nature, necessary to present fairly the results of the reported interim periods. The statements should be read in conjunction with the summary of accounting policies and notes to financial statements included in the Company's latest annual report on Form 10-K. The reporting of segment data required by Statement of Financial Accounting Standards No. 14, Financial Reporting for Segments of a Business Enterprise, is confined to complete financial statements as provided in the Company's Form 10-K and annual report to shareholders. 2. Effective Tax Rate In accordance with generally accepted accounting principles, it is the Company's practice at the end of each interim reporting period to make a best estimate of the effective tax rate expected to be applicable for the full fiscal year. The rate so determined is used in providing for income taxes on a current year-to-date basis. 3. Subsequent Events Albright & Wilson Americas Inc. signed a memorandum of understanding on April 5, 1995, with Vulcan Materials Company to sell its wholly owned subsidiary, Rio Linda Chemical Company, Inc. to Vulcan. Rio Linda, based in Sacramento, California, manufactures small-scale chlorine dioxide generators for the food and water industries. In the year ending December 31, 1994, Rio Linda achieved sales of $12.1 million. The sale to Vulcan is expected to close on May 31, 1995. EXHIBIT 11 COMPUTATION OF EARNINGS PER SHARE (Amounts and shares in thousands, except per share data) Three Months Ended March 31 1995 1994 Primary and fully diluted earnings (loss): Average common shares outstanding 35,867 36,491 Common share equivalents: Performance share plan 227 227 Total shares 36,094 36,718 Net earnings (loss) $15,962 $(5,226) Primary and fully diluted earnings (loss) per share of common stock: 0.44 ($0.14)
EXHIBIT 12 VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Amounts in thousands) For the Years Ended December 31 1994 1993 1992 1991 1990 Fixed charges: Interest expense before capitalization credits .........$ 10,699 $ 10,187 $ 10,441 $ 11,336 $ 9,349 Amortization of financing costs .......... 114 115 116 75 44 One-third of rental expense .......... 10,393 7,375 8,711 4,815 5,678 Total fixed charges .........$ 21,206 $ 17,677 $ 19,268 $ 16,226 $ 15,071 Net earnings from continuing operations .........$ 97,976 $ 88,229 $ 90,980 $ 52,580 $120,278 Provision for income taxes .......... 47,930 36,993 39,746 20,867 58,951 Fixed charges .......... 21,206 17,677 19,268 16,226 15,071 Capitalized interest credits .......... (878) (1,016) (673) (131) (1,591) Amortization of capitalized interest .......... 997 882 792 840 705 Earnings from continuing operations before income taxes as adjusted .........$167,231 $142,765 $150,113 $ 90,382 $193,414 Ratio of earnings to fixed charges .......... 7.9 8.1 7.8 5.6 12.8 For the Three Months Ended March 31, 1995 Fixed charges: Interest expense before capitalization credits .........$ 2,681 Amortization of financing costs .......... 28 One-third of rental expense .......... 1,964 Total fixed charges .........$ 4,673 Net earnings .........$ 15,962 Provision for income taxes .......... 8,519 Fixed charges .......... 4,673 Capitalized interest credits .......... (160) Amortization of capitalized interest .......... 266 Earnings before income taxes as adjusted .........$ 29,260 Ratio of earnings to fixed charges .......... 6.3 NOTE: Since 1987, the Company has guaranteed a portion of certain debts of two of the entities through which it participates in the Crescent Market Project. In addition, since February 1994, the Company has guaranteed a portion of certain debt of a third entity. The fixed charges associated with such guaranties (under which the Company has not been required to make any payments) for the three months ended March 31, 1995, were $710,000 and for the one-year periods ended December 31, 1994, 1993, 1992, 1991, and 1990 were $2,666,000, $2,731,000, $3,583,000, $3,525,000 and $2,535,000, respectively. Because the Company's ownership interest in the Crescent Market Project are accounted for by the equity method, these amounts have not been included in the computation of the ratios of earnings to fixed charges presented above.
Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition GENERAL COMMENTS Seasonality of the Company's Business Results of any individual quarter are not necessarily indicative of results to be expected for the year due principally to the effect that weather can have on the sales and production volume of the Construction Materials segment. Normally, the highest sales and earnings of the Construction Materials segment are attained in the third quarter and the lowest are realized in the first quarter when sales and earnings are substantially below the levels realized in all subsequent quarters of the year. Basis of Determining Sales Volume and Price Variances Sales volume variances are calculated by multiplying the period-to-period change in sales units by the prior period's unit sales prices. Sales price variances are calculated by multiplying the period-to-period change in unit sales prices by the current period's sales units. To the extent that products and market areas are combined for these computations, the resultant "volume" and "price" variances may each be affected by period-to-period changes in the "mix" of product and market area sales. Segment Sales and Earnings Segment sales and earnings have been determined on the same basis as used in prior Form 10-Q reports. Segment earnings are earnings before interest expense and income taxes and after allocation of corporate expenses and income, other than "interest income, etc.," (principally interest income earned on cash items and gains or losses on corporate financing transactions), and after assignment of equity income to the segments with which it is related in terms of products and services. Allocations are based primarily on one or a combination of the following factors: average gross investment, average equity and sales. RESULTS OF OPERATIONS CONDENSED STATEMENTS OF CONSOLIDATED EARNINGS FIRST QUARTER 1995 AS COMPARED WITH FIRST QUARTER 1994 Vulcan's first quarter sales were at a record level and net earnings improved substantially from the 1994 result. Net earnings were $16.0 million, or 44 cents per share, as compared with a net loss of $5.2 million, or 14 cents per share in 1994's first quarter. Sales for the first quarter were $294.4 million, up 36% from last year's total of $216.9 million. The segment detail of that increase is as follows: First Quarter Sales 1995 1994 Increase Construction Materials $155.5 $133.5 $22.0 Chemicals 138.9 83.4 55.5 Total $294.4 $216.9 $77.5 Construction Materials reported record first quarter sales, reflecting a 16% increase from the 1994 first quarter. The increase reflects continued improvement in the demand for crushed stone as well as higher unit selling prices. Favorable weather conditions in the first quarter also contributed to the improved result. Shipments and average prices of crushed stone in the quarter increased 15% and 4%, respectively, from last year's levels. Chemicals sales were also at a record first quarter level and increased 67% from last year's first quarter. The increase partially reflects the acquisition of Callaway Chemical Company as of August 1, 1994. Excluding the effect of that acquisition, first quarter Chemicals sales increased 37% due principally to sharply higher caustic soda prices and higher prices for chlorinated organic products. Cost of goods sold in the first quarter of 1995 increased 20% from the 1994 level. The increase reflects the acquisition of Callaway Chemical Company, higher raw material prices in the Chemicals segment and higher Construction Materials volume. Earnings before interest expense and income taxes were $27.0 million as compared to a loss of $5.5 million in the same period last year. The segment detail of this result is shown in the following summary (amount in millions): First Quarter Earnings Before Interest Expense and Income Taxes 1995 1994 Increase Construction Materials $10.5 $(1.4) $11.9 Chemicals 16.5 (4.2) 20.7 Segment earnings * 27.0 (5.6) 32.6 Interest income, etc. - .1 (.1) Total $27.0 $(5.5) $32.5 * After allocation of corporate expense and income, other than "interest income, etc." (principally interest income earned on short-term investment of funds and gains or losses on corporate financing transactions), and after assignment of equity income to the segments with which it is related in terms of products and services. The Construction Materials segment increase reflects higher volume and prices, the effects of which were partially offset by increased operating costs. In the first quarter of 1995, the Company sold its Iowa crushed stone operations and four sand and gravel operations in northeast Indiana for a pretax gain of $3.8 million. The first quarter of 1994 included nonrecurring gains on sales of assets of $1.5 million. The Chemicals segment improvement reflects the effects of higher selling prices for caustic soda and for chlorinated organic products, which were partially offset by higher raw materials costs. Average caustic soda prices were over three times the first quarter 1994 level and were up 31% from the fourth quarter of 1994. In addition, Chemicals benefited from the earnings of Callaway Chemical Company in the first quarter. Selling, administrative and general expenses of $37.4 million for the first quarter of 1995 increased 34% from the 1994 level. This increase reflects principally the effect of the Callaway Chemical Company acquisition and higher provisions for management incentive plans. Other income, net of other charges, was $6.9 million in the first quarter as compared with the 1994 total of $2.7 million. The favorable comparison reflects an increase in gains on sales of assets, including the aforementioned gain from the sale of the Iowa and Indiana operations. In addition, results from the Crescent Market Project (the Company's joint venture to supply limestone from Mexico to the U.S. Gulf Coast) improved again in 1995. The provision for income taxes for the current quarter was $8.5 million, as compared with last year's first quarter credit of $2.5 million. The increase primarily reflects the higher pretax earnings. The effective tax rate for the quarter was 34.8%, up from last year's first quarter rate of 32.0%. On April 24, 1995, H.A. Sklenar, Chairman and Chief Executive Officer, made certain statements concerning the Company's earnings outlook. Excerpts of the relevant press release quoting Mr. Sklenar are as follows: "Both of Vulcan's businesses reported much stronger first quarter results in 1995. For Construction Materials, the 15% increase in stone shipments reflected stronger demand as well as relatively favorable weather conditions. All major sectors of demand for aggregates, with the exception of residential construction, were stronger in 1995 as compared with a year earlier. We currently expect further growth in total aggregate demand during the remainder of the year - albeit at a rate of increase less than the increase in our first quarter stone shipments. The result should be another year of record Construction Materials earnings. "The recovery in caustic soda prices was the major factor contributing to the improved sales and earnings in the Chemicals segment. In addition, stronger market conditions for chlorinated organic product permitted price increases in excess of raw material cost increases for the first time since raw material costs began to increase sharply in the second quarter of 1994. Favorable market conditions for caustic and for chlorinated organics, and inclusion of the full year's results of Callaway Chemical Company will continue to benefit 1995 earnings comparisons for the segment. The result should be a substantial earnings recovery for our Chemicals business in 1995. "Vulcan's first quarter performance enhances our expectation that 1995 will be a year of record net earnings and earnings per share for the Company. " LIQUIDITY AND CAPITAL RESOURCES CONDENSED CONSOLIDATED BALANCE SHEETS - MARCH 31, 1995 AS COMPARED WITH DECEMBER 31, 1994 AND MARCH 31, 1994 AND CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS COMPARISONS FOR THE YEAR TO DATE AS OF MARCH 31, 1995 AND MARCH 31, 1994 Working Capital Working capital, exclusive of debt and cash items, totaled $166.8 at March 31, 1995, and approximated the 1994 year-end amount of $166.6 million. Inventories increased due primarily to seasonal build-ups in the Construction Materials segment, offset by higher current liabilities. Working capital at March 31, 1995 increased 4% from the same date last year. Higher receivables and inventories due to increased sales and the acquisition of Callaway Chemical Company were offset by higher current liabilities. The Company's current ratio, which is based on all components of working capital, including cash and debt items, was 1.6 as of March 31, 1995. This was equal to the year-end 1994 ratio but down from a 2.0 ratio at March 31, 1994. Cash Flows Net cash provided by continuing operations totaled $37.4 million in the first quarter of 1995, up sharply from the $16.1 million generated in the same period last year. The increase reflects primarily higher earnings. Cash used for investing activities was $18.5 million as compared with the 1994 total of $20.8 million. Net cash used for financing activities totaled $24.7 million, up from the 1994 amount of $9.2 million. The change reflects principally a decrease in net borrowings. Cash and cash equivalents, which totaled $1.5 million at March 31, 1995, decreased $6.2 million in the first quarter of 1995 as compared with a decrease of $14.0 million in the same period last year. On February 16, 1995, the Board of Directors authorized a quarterly dividend of 36 1/2 cents per common share. The new dividend represents a 10.6% (3 1/2 cents per share) increase over quarterly dividends paid in 1994. Property Additions Property additions totaled $26.1 million in 1995 as compared with $29.4 million in the first quarter of 1994. In the first quarter of 1994, the Company acquired Peroxidation Systems Inc. Short-Term Borrowings Short-term borrowings as of March 31, 1995 and 1994 consisted of notes payable to banks totaling $33.7 million and $7.5 million, respectively. Long-Term Obligations As of March 31, 1995, long-term obligations were 10% of long-term capital and 13.3% of shareholders' equity; the corresponding 1994 percentages were 11.0% and 14.7%. Common Stock Transactions Pursuant to the Company's common stock purchase program, 47,700 shares of common stock were purchased in the first quarter of 1995 at a total cost of $2.4 million, equal to an average price of $49.72 per share. There were no purchases of common stock in the first quarter of 1994. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits furnished in accordance with Item 601 of Regulation S-K and included in Part I: Exhibit 11 - Computation of Earnings per Share Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges (b) Reports on Form 8-K There were no reports on Form 8-K filed for the three months ended March 31, 1995. 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. VULCAN MATERIALS COMPANY Date /s/ D. F. Sansone D. F. Sansone Vice President, Finance EX-27 2
5 This schedule contains summary financial information extracted from the Consolidated Statement of Earnings for the three months ended March 31, 1995, and the Consolidated Balance Sheet as of March 31, 1995, and is qualified in its entirety by reference to such financial statements. 1000 3-MOS DEC-31-1995 MAR-31-1995 1502 0 195295 8571 127235 350023 1820680 1121863 1190922 223248 97193 46573 0 0 685569 1190922 294388 294388 235602 235602 1243 428 2521 24481 8519 15962 0 0 0 15962 0.44 0.44
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