-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OjkUgnY83et9/mq28R50im9HK7fJhqI8y8KCGZbTSIE2suHnO//HFh1nmavkLJg5 DtAu8wrFri0AE+W+GGdLFA== 0000950133-97-001947.txt : 19970520 0000950133-97-001947.hdr.sgml : 19970520 ACCESSION NUMBER: 0000950133-97-001947 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAFARGE CORP CENTRAL INDEX KEY: 0000716783 STANDARD INDUSTRIAL CLASSIFICATION: CEMENT, HYDRAULIC [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: 97607673 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 FORM 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 MARCH 31, 1997 ------------------------------------------------ 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 company 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 20191-4393 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) 703-264-3600 - -------------------------------------------------------------------------------- (Company's telephone number, including area code) Indicate by check mark whether the company (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 company 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 April 30, 1997 ------------------------------------- -------------- Common Stock of Lafarge Corporation ($1 par value) 63,640,491 Exchangeable Preference Shares of Lafarge Canada Inc. (no par value) 7,164,978 ------------ Total Common Equity Interests 70,805,469 ============
Number of pages contained in this report 17 -- Total sequentially numbered pages 17 -- Exhibit index on page 15 -- 1 2 LAFARGE CORPORATION AND SUBSIDIARIES FORM 10-Q - FOR THE QUARTER ENDED MARCH 31, 1997 INDEX
PAGE ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements a) Condensed Consolidated Statements of Income (Loss) - Three-Month and Twelve-Month Periods Ended March 31, 1997 and 1996 3 b) Condensed Consolidated Balance Sheets - March 31, 1997, March 31, 1996, and and December 31, 1996 4 c) Condensed Consolidated Statements of Cash Flows - Three-Month and Twelve-Month Periods Ended March 31, 1997 and 1996 5 d) Condensed Consolidated Geographic Information - Three-Month and Twelve-Month Periods Ended March 31, 1997 and 1996 6 e) Notes to Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II. OTHER INFORMATION Item 1. Legal Proceedings 14 Item 4. Submission of Matters to a Vote of Security Holders 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 ENDED TWELVE MONTHS ENDED MARCH 31 MARCH 31 -------------------------------------- ------------------------------------------ 1997 1996 1997 1996 ----------------- ----------------- ------------------- ------------------- NET SALES $ 244,034 $ 203,712 $1,689,602 $1,479,082 ----------------- ----------------- ------------------- ------------------- COST AND EXPENSES Cost of goods sold 255,323 223,493 1,283,716 1,159,958 Selling and administrative 37,456 35,795 153,103 141,427 Other expense (income), net 3,892 2,857 10,609 3,930 ----------------- ----------------- ------------------- ------------------- Total income(loss) from operations (52,637) (58,433) 242,174 173,767 Interest expense 5,559 5,915 23,762 26,013 Interest income (2,917) (2,664) (10,321) (10,575) ----------------- ----------------- ------------------- ------------------- PRE-TAX INCOME (LOSS) (55,279) (61,684) 228,733 158,329 Income tax benefit (expense) 21,158 23,489 (83,793) (24,858) ----------------- ----------------- ------------------- ------------------- NET INCOME (LOSS) $ (34,121) $ (38,195) $ 144,940 $ 133,471 ================= ================= =================== =================== NET INCOME (LOSS) PER COMMON EQUITY SHARE-PRIMARY $ (.48) $ (.55) $ 2.06 $ 1.93 ================= ================= =================== =================== NET INCOME (LOSS) PER COMMON EQUITY SHARE-ASSUMING FULL DILUTION $ (.48) $ (.55) $ 2.01 $ 1.87 ================= ================= =================== =================== DIVIDENDS PER COMMON EQUITY SHARE $ .100 $ .100 $ .400 $ .400 ================= ================= =================== =================== Weighted average number of common equity shares and equivalents outstanding 70,517 69,327 70,436 69,266 ================= ================= =================== ===================
See Notes to Condensed Consolidated Financial Statements. 3 4 LAFARGE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED AND IN THOUSANDS)
MARCH 31 MARCH 31 DECEMBER 31 1997 1996 1996 ---------- ---------- ----------- ASSETS Cash and cash equivalents $ 118,940 $ 88,976 $ 116,847 Short-term investments 84,032 97,514 92,496 Receivables, net 208,108 192,685 287,692 Inventories 218,840 221,622 205,804 Other current assets 29,568 32,814 29,391 ---------- ---------- ---------- Total current assets 659,488 633,611 732,230 Property, plant and equipment, (less accumulated depreciation and depletion of $1,037,158, $1,021,467 and $1,025,533) 876,951 823,896 867,723 Excess of cost over net assets of businesses acquired, net 30,682 22,478 31,657 Other assets 183,213 163,516 181,369 ---------- ---------- ---------- TOTAL ASSETS $1,750,334 $1,643,501 $1,812,979 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued liabilities $ 195,195 $ 213,934 $ 214,393 Income taxes payable 2,469 1,992 28,151 Short-term borrowings and current portion of long-term debt 33,079 20,633 44,821 Short-term borrowings from related party 100,000 - 50,000 ---------- ---------- ---------- Total current liabilities 330,743 236,559 337,365 Long-term debt 149,260 263,612 161,934 Deferred income tax 46,424 48,157 48,709 Other postretirement benefits 125,161 124,368 124,867 Other long-term liabilities 29,450 28,018 29,565 ---------- ---------- ---------- Total liabilities 681,038 700,714 702,440 ---------- ---------- ---------- Common equity interests Common shares 63,580 61,011 62,590 Exchangeable shares 49,911 58,339 53,817 Additional paid-in-capital 626,218 597,514 615,993 Retained earnings 400,284 283,473 441,481 Foreign currency translation adjustments (70,697) (57,550) (63,342) ---------- ---------- ---------- Total shareholders' equity 1,069,296 942,787 1,110,539 ---------- ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,750,334 $1,643,501 $1,812,979 ========== ========== ==========
See Notes to Condensed Consolidated Financial Statements. 4 5 LAFARGE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED AND IN THOUSANDS)
THREE MONTHS TWELVE MONTHS ENDED MARCH 31 ENDED MARCH 31 ----------------------------------- ------------------------------------ 1997 1996 1997 1996 --------------- -------------- -------------- ---------------- CASH FLOWS FROM OPERATIONS Net Income (loss) $ (34,121) $ (38,195) $ 144,940 $ 133,471 Adjustments to reconcile net income (loss) to net cash provided by operations: Depreciation, depletion and amortization 27,060 25,402 102,165 96,652 Provision for doubtful accounts 695 524 426 503 Gain on sale of assets (1,279) (861) (4,503) (5,921) Other postretirement benefits 470 821 1,105 2,261 Other non-cash charges and credits, net (4,107) (1,445) 4,217 (29,718) Changes in working capital 18,831 15,081 (34,097) (68,923) --------------- -------------- -------------- ---------------- Net cash provided by operations 7,549 1,327 214,253 128,325 --------------- -------------- -------------- ---------------- CASH FLOWS FROM INVESTING Capital expenditures (40,553) (29,122) (136,221) (123,385) Acquisitions - (8,127) (75,357) (36,474) Short-term investments 8,464 (12,998) 13,482 (43,266) Proceeds from property, plant and equipment dispositions 4,147 2,528 30,745 19,609 Other (1,574) 2,445 (4,222) 6,074 --------------- -------------- -------------- ---------------- Net cash used for investing (29,516) (45,274) (171,573) (177,442) --------------- -------------- -------------- ---------------- CASH FLOWS FROM FINANCING Net increase (decrease) in long-term borrowings (includes current portion) 25,594 (1,492) (4,085) (19,443) Issuance of equity securities 3,103 293 7,011 3,275 Dividends, net of reinvestments (2,870) (2,740) (12,295) (10,830) --------------- -------------- -------------- ---------------- Net cash provided (consumed) by financing 25,827 (3,939) (9,369) (26,998) --------------- -------------- -------------- ---------------- Effect of exchange rate changes (1,767) 427 (3,347) 4,325 --------------- -------------- -------------- ---------------- NET INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS 2,093 (47,459) 29,964 (71,790) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 116,847 136,435 88,976 160,766 --------------- -------------- -------------- ---------------- CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 118,940 $ 88,976 $ 118,940 $ 88,976 =============== ============== ============== ================
See Notes to Condensed Consolidated Financial Statements. 5 6 LAFARGE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED GEOGRAPHIC INFORMATION (UNAUDITED AND IN THOUSANDS)
THREE MONTHS ENDED TWELVE MONTHS ENDED MARCH 31 MARCH 31 ------------------------- ------------------------ 1997 1996 1997 1996 ----------- ----------- ---------- ---------- NET SALES Canada $ 91,340 $ 79,737 $ 718,035 $ 657,302 United States 152,694 123,975 971,567 821,780 ---------- ---------- ---------- ---------- TOTAL NET SALES $ 244,034 $ 203,712 $1,689,602 $1,479,082 ========== ========== ========== ========== INCOME (LOSS) FROM OPERATIONS (See Note 6) Canada $ (30,259) $ (31,773) $ 106,227 $ 69,600 United States (22,378) (26,660) 135,947 104,167 ---------- ---------- ---------- ---------- TOTAL INCOME (LOSS) FROM OPERATIONS (52,637) (58,433) 242,174 173,767 Interest expense, net (2,642) (3,251) (13,441) (15,438) ---------- ---------- ---------- ---------- PRE-TAX INCOME (LOSS) $ (55,279) $ (61,684) $ 228,733 $ 158,329 ========== ========== ========== ==========
See Notes to Condensed Consolidated Financial Statements. 6 7 LAFARGE CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements 1. The Company is engaged in the production and sale of cement, ready-mixed concrete, other concrete products, asphalt, gypsum wallboard and related products, and aggregates. The Company operates in the U.S. and, through its major operating subsidiary, Lafarge Canada Inc. ("LCI"), in Canada. The Company's wholly-owned subsidiary, Systech Environmental Corporation, supplies cement plants with substitute fuels and raw materials. Lafarge S.A., a French corporation, and certain of its affiliates own a majority of the Company'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 Company 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 Company's 1996 Annual Report on Form 10-K. 3. Because of seasonal, weather-related conditions in most of the Company'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. 4. 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 March 31, 1997 and 1996, and at December 31, 1996, inventories consisted of the following (in thousands):
March 31 March 31 December 31 1997 1996 1996 ------------------- ------------------- ------------------- Finished products $ 102,204 $ 99,086 $ 100,900 Work in process 28,466 36,340 13,711 Raw materials and fuel 44,582 43,161 45,550 Maintenance and operating supplies 43,588 43,035 45,643 ------------------- ------------------- ------------------- Total inventories $ 218,840 $ 221,622 $ 205,804 =================== =================== ===================
7 8 5. Cash paid during the period for interest and taxes is as follows (in thousands):
Three Months Twelve Months Ended March 31 Ended March 31 -------------------------------- --------------------------------- 1997 1996 1997 1996 -------------- -------------- -------------- --------------- Interest $ 1,476 $ 3,299 $ 25,890 $ 28,761 Income Taxes (net of refunds) 9,815 7,632 75,776 79,020
6. During the second quarter of 1995, the Company reached an agreement with Revenue Canada Taxation related to the pricing of certain cement sales between its operations in Canada and the U.S. for the years 1984 through 1994. The result was an increase in net sales and pre-tax income in Canada of U.S. $30.1 million with corresponding adjustments in the U.S. During the third quarter of 1996, the Company recorded a U.S. $13.7 million adjustment for the year 1995 based on the above aforementioned agreement with Revenue Canada Taxation. The impact of these adjustments was immaterial to consolidated net income. The 1996 and 1995 amounts shown as income from operations for Canada and the United States in the condensed consolidated geographic information exclude these adjustments. 7. As discussed in its 1996 Annual report on form 10-K, LCI is a defendant in lawsuits in Canada arising from claims regarding alleged defective fly ash and cement. The amount of LCI's liability, if any, is uncertain. LCI has denied liability and is defending the lawsuits vigorously. LCI believes that it has substantial insurance coverage that will respond to defense expenses and liability, if any, in the lawsuits. Also, the Company, among others, has been named in two lawsuits in Texas alleging exposure to toxic substances. The amount of liability, if any, to the Company is uncertain. The Company filed general denials to both suits and is vigorously defending the lawsuits. Finally, the Company has been notified by the Environmental Protection Agency that it is one of several potentially responsible parties for clean-up costs at certain waste disposal sites. When the Company determines that it is probable that a liability for environmental matters or other legal actions has been incurred, an estimate of the required remediation costs is recorded as a liability in the financial statements. In addition, the Company is involved in certain other legal actions and claims. It is the opinion of management that all legal and environmental matters will be resolved without material effect on the Company's consolidated financial statements. 8. In the third quarter of 1995, the U.S. tax provision was decreased by $23.3 million due to the reduction of a valuation allowance on deferred tax assets which had been recorded in 1992. 8 9 The reduction resulted from the favorable long-term outlook of the U.S. cement market, three consecutive years of taxable income in the U.S. and management's projections of future taxable income in the U.S. which is expected to be in excess of amounts needed to realize these deferred tax assets. Management continues to believe it is more likely than not that the Company's net deferred tax assets will be realized. 9. On April 29, 1997, the Company signed a letter of intent with Laidlaw Inc. to acquire JTM Industries Inc. of Kennesaw, Georgia. JTM is the largest firm in the United States managing coal-combustion by-products produced by electric utilities which last year posted sales of $60 million. The transaction must be approved by the Company's Board of Directors and is subject to government review and the completion of appropriate due diligence. 10. During the first quarter of 1997, Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No. 128") was issued. This new standard, which the Company must adopt after December 15, 1997 for the year ended December 31, 1997, replaces primary EPS with basic EPS and fully diluted EPS will be called diluted EPS. Computed pursuant to SFAS No. 128, basic EPS for the twelve months ended March 31, 1997 and 1996 would have increased by $.01 to $2.07 and $1.94, respectively, over reported primary EPS for these periods. There would be no changes to the other earnings per share information presented on the income statement. 11. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments (which included only normal recurring adjustments except as discussed in Note 8) necessary to present fairly the Company's financial position as of the applicable dates and the results of its operations and its cash flows for the interim periods presented. 9 10 LAFARGE CORPORATION AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Historically, the Company incurs a loss in the first quarter because sales and operating results are negatively impacted by weather conditions which reduce construction activity. 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. THREE MONTHS ENDED MARCH 31, 1997 The seasonal pattern was evident during the three months ended March 31, 1997 when the Company incurred a net loss of $34.1 million, or $0.48 per common equity share. This compares with a net loss of $38.2 million, or $0.55 per common equity share, for the first quarter of 1996. Operating results improved in the cement and construction materials product lines. The Company's two gypsum wallboard plants that were acquired in September 1996 generated an operating profit of $2.9 million. Sales volumes were higher in all main product lines (cement, ready-mixed concrete and aggregates), while cement net realization (delivered price per ton to customer less freight) increased 4 percent and ready-mixed concrete prices were 7 percent higher. The Company's Canadian operations reported a net loss of $17.3 million, $1.0 million better than 1996 whereas the U.S. net loss was $16.8 million, $3.1 million better. The Company's net sales increased 20 percent to $244.0 million, up from $203.7 million in 1996. Canadian net sales were $91.3 million, up 15 percent, while U.S. net sales increased 23 percent to $152.7 million. The improvement in both Canada and the U.S. was primarily due to increased product shipments and higher cement and ready-mixed concrete prices. In addition, the new gypsum wallboard activity contributed $22.0 million of sales in the U.S. Cement shipments increased 6 percent while ready-mixed concrete and aggregate volumes rose 11 percent and 17 percent, respectively. The first quarter loss from the Company's cement operations was $23.6 million, $3.4 million better than last year. The improvement was due to an increase in shipments and prices partially offset by higher plant costs due to the timing of major maintenance projects and lower clinker production at some U.S. plants. Net sales increased 9 percent reflecting the rise in shipments and prices. The Canadian loss was $6.9 million, $4.0 million better than 1996 due to an 18 percent increase in cement shipments and a 3 percent escalation in net realization (excluding exchange rate fluctuation) in western 10 11 Canada, and higher clinker production at two plants in eastern Canada. These improvements were partially offset by the timing of major maintenance projects at the Exshaw, Alberta plant. Net sales in Canada increased 14 percent. In eastern Canada, cement shipments were slightly lower (1%) as stronger demand in Ontario was offset by declines in Quebec due to inclement weather and because of higher shipments in 1996 to the Confederation Bridge project in the Canadian Maritimes which is nearing completion. The U.S. loss was $16.7 million, $0.6 million worse than a year ago. Increases in shipments of 5 percent and net realization of 4 percent were more than offset by the timing of major maintenance spending and lower clinker production at some plants. Net sales increased 7 percent reflecting the increase in shipments and prices. The Company's construction materials and waste management operations lost $20.6 million, $0.7 million better than 1996. In Canada, the loss was $17.7 million, $0.5 million worse than last year. Net sales were 15 percent higher reflecting an increase in ready-mixed concrete and aggregate shipments, and ready-mixed concrete prices. Stronger demand in Ontario and the Western provinces resulted in a 16 percent rise in Canadian ready-mixed concrete volumes which more than compensated for the decline in shipments to the Confederation Bridge project in the Canadian Maritimes. Aggregate volumes were also strong in Canada, increasing by 25 percent; however, in eastern Canada increased aggregate volumes (which were up 38 percent) resulted in no earnings improvement due to higher volumes of lower margin products. Lower volumes from pressure pipe, due to a soft market, also negatively impacted results in the east. In western Canada, higher volumes and prices, both in ready-mixed concrete and aggregates, were more than offset by higher material and operating costs due to the timing of annual maintenance. In the U.S., the loss was $2.9 million, $1.2 million better than last year mainly due to a 7 percent increase in ready-mixed concrete prices. Ready-mixed concrete volumes advanced 4 percent while aggregate volumes grew 3 percent. For the quarters ended March 31, 1997 and 1996 the Company recorded an income tax benefit as a result of the seasonal loss from its Canadian and U.S. operations. The Company's effective income tax rate was 38.3 percent in 1997, which was consistent with the prior year. TWELVE MONTHS ENDED MARCH 31, 1997 In the second quarter of 1995, the Company reached an agreement with Revenue Canada Taxation related to the pricing of certain cement sales between its operations in Canada and the U.S. for the years 1984 though 1994. The result was an increase in net sales and pre-tax income in Canada of U.S. $30.1 million, with corresponding adjustments in the U.S. During the third quarter of 1996, the Company recorded a U.S. $13.7 million adjustment for the year 1995 based upon the aforementioned agreement with Revenue Canada Taxation. The impact of these adjustments on consolidated net income was immaterial. Management's Discussion and Analysis that follows excludes the impact of this agreement. 11 12 The Company reported net income of $144.9 million in 1997 compared to $133.5 million for the same period ended March 31, 1996. Net sales increased 14 percent primarily due to increased product shipments and improved cement and ready-mixed concrete selling prices, as well as the effect of the U.S. gypsum wallboard acquisition. Canadian net sales increased 9 percent while U.S. sales rose 18 percent. In the U.S., cement net realization and shipments increased 4 percent and 8 percent, respectively. Net realization in Canada increased 5 percent while sales volumes rose 8 percent. Ready-mixed concrete and aggregate volumes in Canada increased 21 percent and 10 percent, respectively, reflecting improved economic activity, particularly in Ontario, coupled with the impact of acquisitions in western Canada. In the U.S., ready-mixed concrete volumes increased 5 percent and aggregate volumes were up 8 percent. Selling and administrative expenses were $11.7 million higher mainly due to acquisitions, coupled with higher legal and other professional fees. Selling and administrative expenses as a percentage of net sales declined to 9.1 percent in 1997 from 9.6 percent in 1996. Other expense, net was $10.6 million in 1997 compared with $3.9 million in 1996. The change primarily reflects lower gains from the sale of non-strategic assets and costs associated with the redemption of $100 million 7% convertible debentures in December 1996. Income tax expense increased from $24.9 million (which included the reduction of a valuation allowance in the third quarter of 1995) in 1996 to $83.8 million in 1997. Beginning in the second quarter of 1996, earnings in the U.S. became fully taxable whereas prior earnings included a reduced tax provision as a result of the utilization of net operating loss carryforwards. LIQUIDITY AND CAPITAL RESOURCES Net cash of $7.5 million was provided by operating activities in the first quarter of 1997 compared to $1.3 million in 1996. Net cash used for investing activities in 1997 was $15.8 million lower than the same period last year mainly due to proceeds from short-term investment maturities. In 1997, net cash provided by financing activities was $25.8 million compared to net cash consumed of $3.9 million in 1996. The change resulted from increased borrowings. Net cash provided by operating activities for the twelve-month period ended March 31, 1997 increased over the same period in 1996 primarily due to higher net income and non-cash charges, and a lower increase in working capital. Compared to 1996, net cash used for investing activities in 1997 increased due to higher capital spending and acquisitions offset by proceeds from short-term investment maturities. The increase in acquisitions resulted from the Company's purchase of two gypsum wallboard plants in September 1996. Net cash consumed by financing activities for the twelve-month period ended March 31, 1997 was $17.6 million lower than the same period in 1996 due to lower debt reductions. 12 13 Capital expenditures are not expected to exceed $270 million in 1997. At March 31, 1997 the Company had no material capital commitments. Committed bank lines of credit totaled $150 million under which no amounts were outstanding. 13 14 PART II. OTHER INFORMATION Item 1. Legal Proceedings See Part I, Notes to Condensed Consolidated Financial Statements, page 8 for a discussion of developments in legal and environmental matters. Item 4. Submission of Matters to a Vote of Security Holders The annual meeting of shareholders of the Company was held May 6, 1997. A total of 70,734,719 shares were entitled to be voted. At the meeting, shareholders elected the 17 nominees for the Board of Directors identified below:
Director Elected Votes For Votes Withheld - ---------------- --------- -------------- Thomas A. Buell 54,769,373 35,835 Marshall A. Cohen 54,768,963 36,245 Bertrand P. Collomb 54,769,189 36,019 Philippe Dauman 54,765,599 39,609 Bernard L. Kasriel 54,769,073 36,135 Jacques Lefevre 54,768,973 36,235 Paul W. MacAvoy 54,769,183 36,025 Claudine B. Malone 54,768,808 36,400 Alonzo L. McDonald 54,769,473 35,735 Robert W. Murdoch 54,768,097 37,111 Bertin F. Nadeau 54,766,903 38,305 John M. Piecuch 54,768,213 36,995 John D. Redfern 54,768,518 36,690 Joe M. Rodgers 54,769,463 35,745 Michel Rose 54,769,148 36,060 Ronald Southern 54,769,073 36,135 Edward H. Tuck 54,769,109 36,099
The shareholders ratified the appointment of Arthur Andersen LLP as auditors to audit the financial statements of the Company for the year ending December 31, 1997, with voting as follows: Votes For Votes Against Abstentions Broker Non-Votes - --------- ------------- ----------- ---------------- 54,787,388 6,049 11,771 -0-
14 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits Page -------- ---- Exhibit 11 - Statement regarding computation of net income (loss) 17 per common equity share. (b) Reports on Form 8-K -------------------- No reports on Form 8-K were filed by the Company during the three-months ended March 31, 1997.
15 16 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LAFARGE CORPORATION Date: May 14, 1997 By: /s/ LARRY J. WAISANEN ---------------------- ------------------------------- LARRY J. WAISANEN Senior Vice President and Chief Financial Officer 16 EX-11 2 COMPUTATION OF NET INCOME (LOSS) PER SHARE 1 EXHIBIT 11 LAFARGE CORPORATION AND SUBSIDIARIES COMPUTATION OF NET INCOME PER COMMON EQUITY SHARE (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED TWELVE MONTHS ENDED MARCH 31 MARCH 31 ---------------------------------------- ---------------------------------------- 1997 1996 1997 1996 ----------------- ---------------- ----------------- ----------------- PRIMARY CALCULATION - ------------------- Net income (loss) $ (34,121) $ (38,195) $ 144,940 $ 133,471 ================= ================ ================= ================= Weighted average number of common equity shares outstanding 70,517 69,327 70,078 68,934 Net effect of dilutive stock options based on the treasury method - - 358 332 ----------------- ---------------- ----------------- ----------------- Weighted average number of common equity shares and equivalents outstanding 70,517 69,327 70,436 69,266 ================= ================ ================= ================= Primary net income (loss) per common equity share $ (.48) $ (.55) $ 2.06 $ 1.93 ================= ================ ================= ================= FULLY DILUTED CALCULATION - ------------------------- Net income (loss) $ (34,121) $ (38,195) $ 144,940 $ 133,471 Add after tax interest expense applicable to 7% Convertible Subordinated Debentures - 1,102 3,073 4,409 ----------------- ---------------- ----------------- ----------------- Net income (loss) assuming full dilution $ (34,121) $ (37,093) $ 148,013 $ 137,880 ================= ================ ================= ================= Weighted average number of common equity shares outstanding 70,517 69,327 70,078 68,934 Add additional shares assuming conversion of 7% Convertible Subordinated Debentures - 4,520 3,170 4,520 Net effect of dilutive stock option based on the treasury stock method 534 352 560 332 ----------------- ---------------- ----------------- ----------------- Weighted average number of common equity shares assuming full conversion of all potentially dilutive securities 71,051 74,199 73,808 73,786 ================= ================ ================= ================= Fully diluted net income (loss) per common equity share $ (.48) $ (.50) (a) $ 2.01 $ 1.87 ================= ================ ================= =================
(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. 17 EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 118,940 84,032 208,108 0 218,840 659,488 1,914,109 (1,037,158) 1,750,334 330,743 149,260 0 0 739,709 329,587 1,750,334 244,034 244,034 255,323 255,323 3,892 0 2,642 (55,279) 21,158 (34,121) 0 0 0 (34,121) (.48) (.48)
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