-----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, D7JlGJaMhd1OzfO0f7a2Rs+yNmaY4lBPb+AabMpFpNYE9+1tbzPWfVDZkIYmCRA5 JtI80IeWQcLA8681/9wPKQ== 0000950133-94-000168.txt : 19940822 0000950133-94-000168.hdr.sgml : 19940822 ACCESSION NUMBER: 0000950133-94-000168 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAFARGE CORP CENTRAL INDEX KEY: 0000716783 STANDARD INDUSTRIAL CLASSIFICATION: 3241 IRS NUMBER: 581290226 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08584 FILM NUMBER: 94543207 BUSINESS ADDRESS: STREET 1: 11130 SUNRISE VALLEY DR STE 300 CITY: RESTON STATE: VA ZIP: 22091-4329 BUSINESS PHONE: 7032643600 10-Q 1 LAFARGE CORPORATION 10-Q 1 UNITED STATES 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 June 30, 1994 ----------------------------------------------- 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 0-11936 ------------------------------------------------------- LAFARGE CORPORATION - - ----------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) MARYLAND 58-1290226 - - ----------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 11130 SUNRISE VALLEY DRIVE, SUITE 300, RESTON, VA 22091 - - ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) 703-264-3600 - - ----------------------------------------------------------------------------- (Registrant's telephone number, including area code) 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 --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Outstanding as of Class July 31, 1994 ------------------------------------ ------------------------- Common Stock of Lafarge Corporation ($1 par value) 59,291,753 Exchangeable Preference Shares of Lafarge Canada Inc. (no par value) 8,540,932 ------------ Total Common Equity Interests 67,832,685 ============
Number of pages contained in this report 19 -- Total sequentially numbered pages 19 -- Exhibit index on page 17. -- 1 2 LAFARGE CORPORATION AND SUBSIDIARIES FORM 10-Q - FOR THE QUARTER ENDED JUNE 30, 1994 INDEX
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements a) Condensed Consolidated Statements of Income (Loss) - Three-Month, Six-Month and Twelve-Month Periods Ended June 30, 1994 and 1993 3 b) Condensed Consolidated Balance Sheets - June 30, 1994, June 30, 1993, and December 31, 1993 4 c) Condensed Consolidated Statements of Cash Flows - Six-Month and Twelve-Month Periods Ended June 30, 1994 and 1993 5 d) Condensed Consolidated Geographic Information - Three-Month, Six-Month and Twelve-Month Periods Ended June 30, 1994 and 1993 6 e) Notes to Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. OTHER INFORMATION Item 1. Legal Proceedings 14 Item 6(a). Exhibits 15 Item 6(b). Reports on Form 8-K 15 SIGNATURE 16
2 3 PART I. FINANCIAL INFORMATION Item 1. Financial Statements LAFARGE CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Income (Loss) (Unaudited and in thousands, except per share amounts)
Three Months Six Months Twelve Months Ended June 30 Ended June 30 Ended June 30 ----------------------- ----------------------- ----------------------- 1994 1993 1994 1993 1994 1993 ---------- ---------- ---------- ---------- ---------- ---------- NET SALES $ 423,375 $ 394,425 $ 631,147 $ 586,248 $1,539,390 $1,471,850 ---------- ---------- ---------- ---------- ---------- ---------- COST AND EXPENSES Cost of goods sold 325,565 313,853 556,586 547,441 1,251,391 1,255,658 Selling and administrative 40,217 40,894 79,286 80,778 159,957 175,088 Interest expense, net 8,750 11,605 16,817 22,144 37,405 46,085 Other expense (income), net 3,660 (819) 7,116 (4,403) 10,512 1,160 Restructuring - - - - 21,600 - ---------- ---------- ---------- ---------- ---------- ---------- Total costs and expenses 378,192 365,533 659,805 645,960 1,480,865 1,477,991 ---------- ---------- ---------- ---------- ---------- ---------- Pre-tax income (loss) 45,183 28,892 (28,658) (59,712) 58,525 (6,141) Income tax benefit (expense) (7,054) (6,650) 4,928 9,105 (25,751) (18,515) ---------- ---------- ---------- ---------- ---------- ---------- NET INCOME (LOSS) $ 38,129 $ 22,242 $ (23,730) $ (50,607) $ 32,774 $ (24,656) ========== ========== ========== ========== ========== ========== NET INCOME (LOSS) PER COMMON EQUITY SHARE-PRIMARY $ .56 $ .37 $ (.35) $ (.85) $ .50 $ (.42) ========== ========== ========== ========== ========== ========== NET INCOME (LOSS) PER COMMON EQUITY SHARE-ASSUMING FULL DILUTION $ .55 $ .37 $ (.35) $ (.85) $ .50 $ (.42) ========== ========== ========== ========== ========== ========== DIVIDENDS PER COMMON EQUITY SHARE $ .075 $ .075 $ .150 $ .150 $ .300 $ .300 ========== ========== ========== ========== ========== ========== Average number of common equity shares outstanding 68,160 59,862 67,503 59,451 65,716 59,268 ========== ========== ========== ========== ========== ==========
See Notes to Condensed Consolidated Financial Statements. 3 4 LAFARGE CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheet (Unaudited and in thousands)
June 30 June 30 December 31 1994 1993 1993 --------- --------- ----------- ASSETS Cash and cash equivalents $ 49,948 $ 35,700 $ 109,294 Receivables, net 310,634 295,290 253,207 Inventories 190,142 214,967 186,082 Other current assets 45,501 34,720 36,661 --------- --------- --------- Total current assets 596,225 580,677 585,244 Property, plant and equipment, net 851,236 929,816 880,724 Excess of cost over net assets of businesses acquired, net 38,391 41,723 39,636 Other assets 163,940 160,278 168,114 --------- --------- --------- TOTAL ASSETS $1,649,792 $1,712,494 $1,673,718 ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued liabilities $ 222,877 $ 205,529 $ 226,585 Income taxes payable 14,536 7,256 28,846 Current portion of long-term debt 26,945 64,287 14,373 --------- --------- --------- Total current liabilities 264,358 277,072 269,804 Long-term debt 406,700 562,905 373,230 Deferred income tax 94,344 99,219 101,395 Other postretirement benefits 122,654 119,088 120,676 Other long-term liabilities 16,523 16,835 16,948 --------- --------- --------- Total liabilities 904,579 1,075,119 882,053 --------- --------- --------- Common equity interests Common shares 59,154 46,802 55,290 Exchangeable shares 58,315 85,853 78,443 Additional paid-in-capital 565,486 409,831 535,685 Retained earnings 130,518 117,654 164,702 Foreign currency translation adjustments (68,260) (22,765) (42,455) --------- --------- --------- Total shareholders' equity 745,213 637,375 791,665 --------- --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,649,792 $1,712,494 $1,673,718 ========= ========= =========
See Notes to Condensed Consolidated Financial Statements. 4 5 LAFARGE CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited and in thousands)
Six Months Twelve Months Ended June 30 Ended June 30 --------------------- --------------------- 1994 1993 1994 1993 -------- -------- -------- -------- CASH FLOWS FROM OPERATIONS Net income (loss) $ (23,730) $ (50,607) $ 32,774 $ (24,656) Adjustments to reconcile net income (loss) to net cash provided by operations: Depreciation, depletion and amortization 55,853 58,326 112,497 121,334 Provision for doubtful accounts 2,551 2,762 5,524 7,143 Gain on sale of assets (3,837) (12,503) (8,329) (22,580) Other postretirement benefits 2,580 2,545 4,673 5,524 Restructuring (7,731) - 13,869 - Other non-cash charges and credits, net (8,976) (2,899) (15,634) (13,398) Changes in working capital items (87,217) (60,515) 1,882 12,781 -------- -------- -------- -------- Net cash provided (consumed) by operations (70,507) (62,891) 147,256 86,148 -------- -------- -------- -------- CASH FLOWS INVESTED Capital expenditures (45,411) (34,096) (69,742) (58,039) Acquisitions (2,131) (744) (16,590) (3,387) Proceeds from property, plant & equipment dispositions 12,315 49,842 31,413 67,047 Other 1,772 2,680 3,025 10,740 -------- -------- -------- -------- Net cash returned (invested) (33,455) 17,682 (51,894) 16,361 -------- -------- -------- -------- CASH FLOWS FROM FINANCING Net increase (decrease) in long-term borrowings 46,146 4,247 (192,935) (70,816) Issuance of equity securities 9,317 1,173 132,857 2,233 Dividends, net of reinvestments (6,234) (8,253) (12,298) (11,906) -------- -------- -------- -------- Net cash provided (consumed) by financing 49,229 (2,833) (72,376) (80,489) -------- -------- -------- -------- Effect of exchange rate changes (4,613) (916) (8,738) (10,506) -------- -------- -------- -------- NET INCREASE (DECREASE) IN CASH (59,346) (48,958) 14,248 11,514 CASH AT THE BEGINNING OF THE PERIOD 109,294 84,658 35,700 24,186 -------- -------- -------- -------- CASH AT THE END OF THE PERIOD $ 49,948 $ 35,700 $ 49,948 $ 35,700 ======== ======== ======== ========
See Notes to Condensed Consolidated Financial Statements. 5 6 LAFARGE CORPORATION AND SUBSIDIARIES Condensed Consolidated Geographic Information (Unaudited and in thousands)
Three Months Six Months Twelve Months Ended June 30 Ended June 30 Ended June 30 --------------------- --------------------- --------------------- 1994 1993 1994 1993 1994 1993 -------- -------- -------- -------- -------- -------- NET SALES Canada $ 164,820 $ 163,627 $ 242,503 $ 237,687 $ 645,346 $ 646,853 United States 258,555 230,798 388,644 348,561 894,044 824,997 --------- --------- --------- --------- --------- --------- TOTAL NET SALES $ 423,375 $ 394,425 $ 631,147 $ 586,248 $1,539,390 $1,471,850 ========= ========= ========= ========= ========= ========= INCOME (LOSS) FROM OPERATIONS Canada $ 12,498 $ 16,249 $ (20,833) $ (19,969) $ 35,803 $ 41,245 United States 41,435 24,248 8,992 (17,599) 60,127 (1,301) --------- --------- --------- --------- --------- --------- TOTAL INCOME (LOSS) FROM OPERATIONS 53,933 40,497 (11,841) (37,568) 95,930 39,944 Interest expense, net (8,750) (11,605) (16,817) (22,144) (37,405) (46,085) --------- --------- --------- --------- --------- --------- PRE-TAX INCOME (LOSS) $ 45,183 $ 28,892 $ (28,658) $ (59,712) $ 58,525 $ (6,141) ========= ========= ========= ========= ========= =========
See Notes to Condensed Consolidated Financial Statements. 6 7 LAFARGE CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements 1. The Registrant is engaged in the production and sale of cement, ready-mixed concrete, other concrete products, asphalt and aggregates. The Registrant operates in the U.S. and, through its major operating subsidiary Lafarge Canada Inc. ("LCI"), in Canada. The Registrant's wholly-owned subsidiary, Systech Environmental Corporation, and its Canadian affiliate, are engaged in waste recovery and disposal utilizing industrial wastes as supplemental fuels in cement kilns. Lafarge Copp#e S.A., a French corporation, and certain of its affiliates own a majority of the Registrant's outstanding voting securities. 2. The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The Registrant believes that the disclosures made are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Registrant's 1993 Annual Report on Form 10-K. 3. Effective January 1, 1994, the Registrant adopted Statement of Financial Accounting Standards No. 112, "Accounting for Other Postemployment Benefits". The cumulative effect of this change in accounting principle was charged to other expense and was not material to the Registrant's financial position and operating results. Also effective January 1, 1994, the Registrant adopted Statement of Financial Accounting Standards No. 115 "Accounting for Certain Investments in Debt and Equity Securities". This statement had no impact on the Registrant's financial position and operating results. 4. Because of seasonal, weather-related conditions in several of the Registrant's marketing areas, earnings of any one quarter should not be considered as indicative of results to be expected for a full fiscal year or any other interim period. 5. Substantially all U.S. inventories other than maintenance and operating supplies are costed using the last-in, first-out ("LIFO") method and all other inventories are valued at average cost. At June 30, 1994 and 1993, and at December 31, 1993, inventories consisted of the following (in thousands): 7 8
June 30 June 30 December 31 1994 1993 1993 ------------ ------------ ----------- Finished products $ 92,534 $ 104,049 $ 89,700 Work in process 17,046 26,487 10,681 Raw materials and fuel 37,758 41,256 39,668 Maintenance and operating supplies 42,804 43,175 46,033 ---------- ---------- ----------- Total inventories $ 190,142 $ 214,967 $ 186,082 ========== ========== ===========
6. Cash paid during the period for interest and taxes is as follows (in thousands):
Six Months Twelve Months Ended June 30 Ended June 30 ---------------------- ---------------------- 1994 1993 1994 1993 -------- -------- -------- --------- Interest, net $ 16,273 $ 22,697 $ 38,124 $ 46,512 Income taxes (net of refunds) 15,206 16,283 28,518 20,500
7. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments which are necessary to present fairly the Registrant's financial position as of the applicable dates and the results of its operations and the changes in its cash flows for the interim periods presented. 8 9 LAFARGE CORPORATION AND SUBSIDIARIES Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Registrant reported earnings of $38.1 million for the quarter ended June 30, 1994 compared with earnings of $22.2 million for the same period in 1993. Earnings per common equity share for the period were $.56 compared with $.37 for the same quarter last year. This was the tenth consecutive quarter in which results were better than the prior year. The Registrant's Canadian operations reported net income of $7.5 million, a $3.1 million decrease from last year. In the U.S., net income was $30.6 million, $19.0 million better than 1993. The Registrant's net sales rose seven percent in the second quarter to $423.4 million from $394.4 million in the same period last year. The improvement was primarily due to higher cement sales volumes and prices coupled with an increase in ready-mixed concrete sales, partially offset by a drop in the value of the Canadian dollar relative to the U.S. dollar. Canadian net sales were $164.8 million, a one percent increase from last year while U.S. net sales improved 12% to $258.6 million. Cement shipments in the second quarter were 10 percent higher than 1993. Ready-mixed concrete shipments were also up 10 percent and aggregate shipments from continuing operations rose seven percent. The second quarter's contribution from the Registrant's cement operations was $51.6 million, $12.9 million higher than the second quarter of last year. Cement results were better due to higher sales volumes and prices. Net sales from cement operations climbed 13 percent. The average net sales price was six percent higher than the second quarter of 1993. In Canada, the contribution from cement operations was $13.5 million, $1.3 million worse than the prior year's second quarter. The decline was due to lower earnings in Western Canada where costs relative to the timing of winter maintenance in 1994 (primarily at the Richmond plant) and higher gas prices at the Exshaw plant more than offset higher prices in the West and higher prices and volumes in Eastern Canada. Cement shipments in Canada were one percent higher. Excluding the impact of the drop in the value of the Canadian dollar, the average net sales price increased five percent. Net sales in Canada were about equal to last year as higher volumes and net selling prices were offset by the drop in the value of the Canadian dollar. The U.S. contribution from cement operations in the second quarter was $38.1 million. This was $14.2 million better than 1993. Rising cement prices and strong shipments were the driving forces behind the improved U.S. results. Earnings were also aided by lower maintenance spending as a result of the absence of infrequently occurring maintenance projects. U.S. shipments and prices exceeded last year by 13 percent and six percent resulting in a 19 percent increase in net sales. Earnings from the Registrant's construction materials and waste management operations were $11.9 million, $4.0 million better than the second quarter of 1993. Net sales declined one percent from 1993. Canadian earnings in 9 10 the quarter were $2.1 million, $0.3 million worse than last year. Net sales improved slightly (1%). Improved earnings in Eastern Canada due to cost reductions and higher ready-mixed concrete and aggregate shipments were offset by lower earnings in Western Canada, particularly in the northern and southern Alberta markets where competitive pressures have resulted in the deterioration of ready-mixed concrete prices. Compared to the second quarter of 1993, ready-mixed concrete and aggregate volumes in Canada were five percent and six percent higher. In the U.S., second quarter earnings were $9.8 million, $4.3 million higher than the same period a year ago reflecting improved results in the Midwestern and Southern U.S. markets. Ready-mixed concrete shipments were up approximately 20 percent and aggregate shipments from continuing operations rose seven percent. Net sales were four percent less than last year primarily due to divested operations. Net interest expense was $2.9 million lower than the second quarter of 1993 primarily due to lower average net debt levels in the U.S. Other expense, net for the quarter was $3.7 million as compared with net income of $0.8 million last year. The change resulted mostly from lower divestment gains and higher pension costs. The Registrant's net loss through the six months ended June 30, 1994 was $23.7 million or $0.35 per common equity share. This compares to a net loss of $50.6 million, or $0.85 per share, for the first half of 1993. Historically, the Registrant's first quarter sales volume and operating results are negatively impacted by seasonal weather conditions that restrict construction activity, particularly in the northern markets. In addition, a substantial portion of the year's major maintenance projects are performed during this period of low plant utilization, with the associated costs being charged to expense as incurred. The Registrant's Canadian operations incurred a net loss of $9.6 million, $1.9 million worse than 1993. Improved results in Eastern Canada were offset by the absence of divestment gains, an adjustment of deferred income taxes in 1993 due to a change in enacted rates, higher costs in the Western Cement Region and expenses for development of a new financial system for construction materials. In the U.S., the net loss was $14.1 million, $28.8 million better than 1993. The U.S. improvement was due primarily to a seven percent increase in cement prices, an 11 percent increase in cement shipments and, in the Registrant's southern and midwestern construction materials markets, a 26 percent increase in ready-mixed concrete shipments. These improvements were partially offset by lower divestment gains. For the six months ended June 30, 1994, the Registrant's net sales were $631.1 million as compared to $586.2 million last year, an increase of eight percent. Higher sales were primarily due to a nine percent and 12 percent increases in cement and ready-mixed concrete shipments, respectively, and six percent higher cement prices. However, partially offsetting these increases were the exchange rate impact resulting from a drop in the value of the Canadian dollar relative to the U.S. dollar and sales lost from divested operations. Canadian net sales were $242.5 million, an increase of two percent from last year. U.S. net sales 10 11 escalated 11 percent to $388.6 million. Aggregate volumes from continuing operations increased eight percent. Earnings from the Registrant's cement operations for the first six months were $21.6 million, $28.3 million better than last year. Net sales through June were $368.3 million, an increase of 12 percent. Earnings from Canadian operations were $4.3 million, $1.5 million better than last year. Higher prices in Eastern and Western Canada and increased volumes in Western Canada were partially offset by higher gas prices at the Exshaw plant. Canadian net sales and shipments rose two percent. Average net sales prices increased approximately six percent prior to the exchange rate fluctuation. Prices increased 10 percent in Eastern Canada. Earnings from U.S. cement operations were $17.3 million, $26.8 million higher than the prior year. The higher earnings were primarily attributable to a seven percent increase in net sales prices, an 11 percent increase in shipments and lower maintenance spending as a result of the absence of infrequently occurring maintenance projects. Aided by the increases in price and volume, net sales from U.S. operations increased 16 percent. The year-to-date loss from the Registrant's construction materials and waste management operations was $14.6 million. This was $6.9 million better than the same period last year. Net sales were two percent higher than 1993. Canadian operations lost $19.1 million, $0.2 million better than 1993. Better results in Eastern Canada due to higher volumes and cost reductions were offset by lower ready-mixed concrete prices in the West and expenses for development of a new financial system. Through June, ready-mixed concrete and aggregate volumes in Canada were approximately five percent higher than 1993. The U.S. operations earned $4.5 million compared to a loss of $2.1 million in 1993. The better results were primarily attributable to the Registrant's Southern and Midwestern U.S. markets where ready-mixed concrete shipments were up 26 percent. Aggregate shipments from continuing operations increased nine percent. Net sales in the U.S. were three percent higher than 1993 despite the negative impact of divestments. Net interest expense was $5.3 million lower than the six months ended June 30, 1993 due primarily to a decrease in average net debt levels in the U.S. and currency gains on the U.S. dollar denominated investments in Canada. Other expense, net for the first six months of the year was $7.1 million as compared with net income of $4.4 million last year. The change resulted mainly from lower divestment gains. The income tax benefit for the six months ended June 30, 1994 was $4.9 million which was $4.2 million lower than for the same period in 1993. The Registrant recorded an income tax benefit as a result of the loss from its Canadian operations. No tax benefit was recorded in the U.S. due to net operating losses carried forward. In Canada, the income tax benefit for the six months ended June 30 was $7.3 million, down $3.8 million from 1993. The decrease in the income tax benefit was due primarily to a decrease in the effective rate and a $2.1 million one-time reduction to deferred taxes in 1993 to reflect the enacted increase in the manufacturing and processing tax credit in Canada. Certain elements of 11 12 the Canadian income tax provision are fixed in amount. The decrease in the Canadian effective income tax rate was caused by the relatively low percentage of these fixed amounts to the decreased pre-tax loss and by a tax rate reduction of one percent in 1994. The Registrant's net income for the twelve-month period ended June 30, 1994 was $32.8 million compared to a net loss of $24.7 million for the period ended June 30, 1993. Results were better primarily due to improved cement sales volumes and prices. Net sales increased five percent to $1,539.4 million for the twelve-month period ended June 30, 1994. Reflecting the negative exchange rate impact, Canadian net sales were unchanged while U.S. sales were eight percent higher than 1993. Selling and administrative expenses were $15.1 million lower. This reduction resulted primarily from actions taken to streamline operations and reduce costs in the Registrant's cement and construction materials operations and from divestments. Interest expense was $8.7 million lower than the twelve-month period ended June 30, 1993 due to lower interest rates and lower average net debt levels in the U.S. coupled with currency gains on the U.S. dollar denominated investments in Canada. Other expense, net for the twelve-month period was $10.5 million compared to $1.2 million in 1993. The change resulted mainly from lower divestment gains. In the fourth quarter of 1993, the Registrant recorded a one-time pre-tax restructuring charge of $21.6 million ($16.4 million net of tax benefits) to cover the direct expenses of restructuring the Registrant's North American business units to increase organizational efficiency. The value reported for Canadian dollar denominated net assets decreased from June 30, 1993 as a result of a drop in the value of the Canadian dollar relative to the U.S. dollar. At June 30, 1994 the U.S. dollar equivalent to a Canadian dollar was $.72 versus $.78 at June 30, 1993. Working capital, excluding cash and current portion of long-term debt, decreased approximately $23.3 million mainly as a result of the drop in the value of the Canadian dollar relative to the U.S. dollar. The impact of these exchange rate changes reduced accounts receivable, inventories and accounts payable by $12.5 million, $7.6 million and $6.8 million, respectively. Working capital (excluding cash, current portion of long-term debt and the impact of exchange rate changes) decreased $9.1 million from June 30, 1993 to June 30, 1994. Accounts receivable increased $27.8 million while inventories declined $17.3 million reflecting the eight percent increase in net sales. Other current assets increased $12.0 million due primarily to higher deferred income tax assets. Accounts payable and accrued liabilities increased $24.1 million as a result of the restructuring accrual in the fourth quarter of 1993 and the timing of purchases and payments. Through June, net cash used by operations was $7.6 million more than 1993 due primarily to an increase in working capital requirements and higher other non-cash adjustments partially offset by a lower net loss in 1994. Cash flows invested were $33.5 million for the first half of 1994 compared 12 13 with net cash returned of $17.7 million in 1993. The Registrant's capital spending and acquisitions in 1994 were $12.7 million more than 1993. Proceeds from property, plant and equipment dispositions totalled $49.8 million in 1993 compared to $12.3 million in 1994. The 1993 proceeds resulted mainly from the sale of the Demopolis plant and terminals, the expropriation of rail access to property at one of the Registrant's construction materials operations and the sale of surplus land in Canada. Cash provided by financing activities in the first six months of 1994 resulted from seasonal borrowings of $46.1 million. In 1993, seasonal working capital requirements were funded mainly by proceeds of divestments. For the twelve-month period ended June 30, 1994, net cash flows from operating activities improved over the same period in 1993 primarily as a result of achieving net income in 1994 compared to a net loss in 1993 and other non-cash adjustments to net income. These adjustments were partially offset by a smaller decrease in working capital. Cash flows invested and returned for the twelve-month periods ended June 30, 1994 and 1993 were $51.9 million and $16.4 million, respectively. The Registrant's capital spending and acquisitions in 1994 were $24.9 million more than 1993. Proceeds from property, plant and equipment dispositions were $35.6 million less than last year due to the divestment of the Demopolis plant and terminals, the expropriation in construction materials and the divestment of the Registrant's chemical admixtures business. Net cash consumed by financing activities was $72.4 million for the twelve-month period ended June 30, 1994 compared to $80.5 million for the same period last year. In October 1993 the Registrant completed an offering of 6.75 million common shares priced at $18.25 per share. The net proceeds from the offering, which were used initially to reduce long-term debt, totalled $117.6 million. Cash flows consumed by financing activities for the period ended June 30, 1993 consisted of debt reduction ($70.8 million) from proceeds received upon the divestment of significant non-strategic assets. Capital investments related to existing operations are not expected to exceed $130 million in 1994. At June 30, 1994, the Registrant had no material capital commitments and had $200 million of committed bank lines of credit. Although none of the credit facility had been drawn down, approximately $81 million was utilized to back outstanding commercial paper and short-term bank loans. 13 14 PART II. OTHER INFORMATION Item 1 Legal Proceedings At a hearing held on May 13, 1994 the U.S. District Court for the District of Maryland, established a schedule for the retrial of the Lone Star case (see the Registrant's annual report on Form 10-K for the year ended December 31, 1993 for a description of the Lone Star case). A trial date of October 24, 1994 has been set for this litigation. Limited discovery by both parties is proceeding. The Registrant has recently been served with a new complaint by Lone Star which expands Lone Star's claim for damages by an additional $1.247 million and reiterates a previously pled business destruction claim with interest and double or triple damages, as appropriate, resulting from injuries suffered by other purchasers of allegedly defective concrete railroad ties not named in other Lone Star complaints. The Registrant is reviewing this complaint and will file its answer in due course. It is expected that this case may be consolidated with the current Lone Star case. On July 20, 1994 in the Nationwide insurance coverage case (see the Registrant's annual report on Form 10-K for the year ended December 31, 1993 for a description of the Nationwide case), the U.S. District Court for the District of Maryland issued its opinion on motions for partial summary judgment filed by the Registrant requesting determination of the insurers' defense obligations and the reasonableness of fees and expenses paid by the Registrant in its defense of the Lone Star case and a motion by the Registrant to strike designation of several expert witnesses of the insurers. The court held that all of the excess and umbrella insurers of the Registrant and Lafarge Canada Inc. ("LCI") have no duty to defend the Registrant and LCI, however, each of the primary insurers during the period of coverage for both these defendants have a duty to defend. The court furthermore developed a formula for the allocation of defense expenses designating shares for each of the primary insurers but with the caveat that a number of outstanding issues still need to be addressed but were not ripe for decision by summary judgment. The court denied the Registrant's motion on the reasonableness of defense expenses and left that issue to be decided by the trier of fact. Furthermore, the court also denied the Registrant's motion to strike the insurers' experts. Discovery continues in this matter. The Registrant believes that it has substantial insurance coverage that will respond to a majority of the defense expenses and liability, if any, in the Lone Star case. On June 6, 1994 the Registrant and the driver of its ready mix concrete truck involved in the June 8, 1992 Mineola traffic accident were sued by approximately 24 plaintiffs in two separate actions. Plaintiffs have filed 12 individual lawsuits in the U.S. District Court for the Northern District, Dallas Division. Plaintiffs also filed a single state court action in the 114th State District Court in Quitman, Wood County, Texas. These actions are the result of the collision involving a church van occupied by 15 students and a Lafarge ready mix concrete truck. As a 14 15 result of the collision 5 of the occupants of the van were killed and 10 were injured. The plaintiffs contend that the negligent acts and omissions of the driver and the Registrant constitute the proximate cause of the accident and all of the plaintiffs' injuries and damages arising therefrom. The claim for damages is approximately $106 million. The Registrant has denied liability and is defending the suit vigorously. The Registrant believes that it has insurance coverage to cover substantially all of the defense expenses and liability, if any, in this litigation. On or about March 2, 1994 the Registrant was served with a Civil Investigative Demand by the U.S. Department of Justice, Antitrust Division, requesting the production of documents and responses to interrogatories in connection with an investigation of potential price fixing and market allocation by cement producers. The Registrant has prepared and submitted all of the agreed upon information. The Registrant believes that it has no liability with respect to any of the suspected antitrust violations referenced in the Justice Department's demand. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits -------- Exhibit 11 - Statement regarding computation of net income (loss) per common equity share. (b) Reports on Form 8-K ------------------- No reports on Form 8-K were filed by the Registrant during the three-months ended June 30, 1994. 15 16 SIGNATURE 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. LAFARGE CORPORATION Date: August 12, 1994 By: JEAN-PIERRE CLOISEAU ------------------------ ---------------------------- Jean-Pierre Cloiseau Executive Vice President and Chief Financial Officer 16 17 INDEX TO EXHIBITS
Exhibit No. Exhibit - - ----------- ------- 11 Statement regarding computation of net income (loss) per common equity share.
17 EX-11 2 COMP. OF NET INCOME (LOSS) PER COMMON EQUITY SHARE 1 LAFARGE CORPORATION AND SUBSIDIARIES EXHIBIT 11 Computation of Net Income (Loss) per Common Equity Share Page 1 of 2 (Unaudited and in thousands, except per share amounts)
Three Months Six Months Twelve Months Ended June 30 Ended June 30 Ended June 30 --------------------- --------------------- --------------------- 1994 1993 1994 1993 1994 1993 -------- -------- -------- -------- -------- -------- PRIMARY CALCULATION - - ------------------- Net income (loss) $ 38,129 $ 22,242 $ (23,730) $ (50,607) $ 32,774 $ (24,656) ======== ======== ======== ======== ======== ======== Weighted average number of common equity shares outstanding 67,655 59,495 67,503 59,451 65,090 59,268 Net effect of dilutive stock options based on the treasury method 505 367 - - 626 - -------- -------- -------- -------- -------- -------- Weighted average number of common equity shares and share equivalents outstanding 68,160 59,862 67,503 59,451 65,716 59,268 ======== ======== ======== ======== ======== ======== Primary net income (loss) per common equity share $ .56 $ .37 $ (.35) $ (.85) $ .50 $ (.42) ======== ======== ======== ======== ======== ========
2 LAFARGE CORPORATION AND SUBSIDIARIES EXHIBIT 11 Computation of Net Income (Loss) per Common Equity Share Page 2 of 2 (Unaudited and in thousands, except per share amounts)
Three Months Six Months Twelve Months Ended June 30 Ended June 30 Ended June 30 --------------------- --------------------- --------------------- 1994 1993 1994 1993 1994 1993 -------- -------- -------- -------- -------- -------- FULLY DILUTED CALCULATION - - ------------------------- Net income (loss) $ 38,129 $ 22,242 $ (23,730) $ (50,607) $ 32,774 $ (24,656) Add interest expenses applicable to 7% Convertible Subordinated Debentures 1,750 1,750 3,500 3,500 7,000 7,000 -------- -------- -------- -------- -------- -------- Net income (loss) assuming full dilution $ 39,879 $ 23,992 $ (20,230) $ (47,107) $ 39,774 $ (17,656) ======== ======== ======== ======== ======== ======== Weighted average number of common equity shares outstanding 67,655 59,495 67,503 59,451 65,090 59,268 Add additional shares assuming conversion of 7% Convertible Subordinated Debentures 4,520 4,520 4,520 4,520 4,520 4,520 Net effect of dilutive stock options based on the treasury stock method 505 367 635 333 626 316 -------- -------- -------- -------- -------- -------- Weighted average number of common equity shares assuming full conversion of all potentially dilutive securities 72,680 64,382 72,658 64,304 70,236 64,104 ======== ======== ======== ======== ======== ======== Fully diluted net income (loss) per common equity share $ .55 $ .37 $ (.28)a $ (.73)a $ .57a $ (.28)a ======== ======== ======== ======== ======== ========
(a) This calculation is submitted in accordance with Regulation S-K item 601(b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15 because it produces an anti-dilutive result. -----END PRIVACY-ENHANCED MESSAGE-----