0000950133-95-000437.txt : 19950824 0000950133-95-000437.hdr.sgml : 19950824 ACCESSION NUMBER: 0000950133-95-000437 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NONE 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: 95561713 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 FOR JUNE 30, 1995. 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, 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 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, 1995 --------------------------------- ----------------- Common Stock of Lafarge Corporation ($1 par value) 60,246,922 Exchangeable Preference Shares of Lafarge Canada Inc. (no par value) 8,503,150 ----------- Total Common Equity Interests 68,750,072 ===========
Number of pages contained in this report 17 ---- Total sequentially numbered pages 17 ---- Exhibit index on page 14. -- 1 2 LAFARGE CORPORATION AND SUBSIDIARIES FORM 10-Q - FOR THE QUARTER ENDED JUNE 30, 1995 INDEX
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements a) Condensed Consolidated Statements of Income 3 (Loss) - Three-Month, Six-Month and Twelve-Month Periods Ended June 30, 1995 and 1994 b) Condensed Consolidated Balance Sheets - 4 June 30, 1995, June 30, 1994, and December 31, 1994 c) Condensed Consolidated Statements of 5 Cash Flows - Six-Month and Twelve-Month Periods Ended June 30, 1995 and 1994 d) Condensed Consolidated Geographic 6 Information - Three-Month, Six-Month and Twelve-Month Periods Ended June 30, 1995 and 1994 e) Notes to Condensed Consolidated 7 Financial Statements Item 2. Management's Discussion and Analysis 9 of Financial Condition and Results of Operations PART II. OTHER INFORMATION Item 1. Legal Proceedings 13 Item 6(a). Exhibits 14 Item 6(b). Reports on Form 8-K 14 SIGNATURE 15
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 ----------------------- ----------------------- ----------------------- 1995 1994 1995 1994 1995 1994 ---------- ---------- ---------- ---------- ---------- ---------- NET SALES $ 396,020 $ 423,375 $ 592,809 $ 631,147 $1,524,912 $1,539,390 ---------- ---------- ---------- ---------- ---------- ---------- COST AND EXPENSES Cost of goods sold 293,332 325,565 506,035 556,586 1,204,095 1,251,391 Selling and administrative 36,416 40,217 71,896 79,286 155,981 159,957 Interest expense, net 5,396 8,750 8,428 16,817 20,391 37,405 Other expense (income), net 2,007 3,660 (2,573) 7,116 (6,323) 10,512 Restructuring - - - - - 21,600 ---------- ---------- ---------- ---------- ---------- ---------- Total costs and expenses 337,151 378,192 583,786 659,805 1,374,144 1,480,865 ---------- ---------- ---------- ---------- ---------- ---------- Pre-tax income (loss) 58,869 45,183 9,023 (28,658) 150,768 58,525 Income tax benefit (expense) (9,151) (7,054) (1,358) 4,928 (38,737) (25,751) ---------- ---------- ---------- --------- ---------- ---------- NET INCOME (LOSS) $ 49,718 $ 38,129 $ 7,665 $ (23,730) $ 112,031 $ 32,774 ========== ========== ========== ========= ========== ========== NET INCOME (LOSS) PER COMMON EQUITY SHARE-PRIMARY $ .72 $ .56 $ .11 $ (.35) $ 1.64 $ .50 ========== ========== ========== ========= ========== ========== NET INCOME (LOSS) PER COMMON EQUITY SHARE-ASSUMING FULL DILUTION $ .70 $ .55 $ .11 $ (.35) $ 1.63 $ .50 ========== ========== ========== ========= ========== ========== DIVIDENDS PER COMMON EQUITY SHARE $ .100 $ .075 $ .175 $ .150 $ .325 $ .300 ========== ========== ========== ========= ========== ========== Average number of common equity shares outstanding 68,878 68,160 68,667 67,503 68,483 65,716 ========== ========== ========== ========= ========== ==========
See Notes to Condensed Consolidated Financial Statements. 3 4 LAFARGE CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited and in thousands)
June 30 June 30 December 31 1995 1994 1994 ---------- ---------- ----------- ASSETS Cash and cash equivalents $ 94,444 $ 49,948 $ 193,057 Short-term investments - - 50,500 Receivables, net 297,196 310,634 257,093 Inventories 205,675 190,142 175,433 Other current assets 33,093 45,501 31,052 ---------- ---------- ---------- Total current assets 630,408 596,225 707,135 Property, plant and equipment, net 782,877 851,236 751,880 Excess of cost over net assets of businesses acquired, net 20,671 38,391 21,926 Other assets 183,705 163,940 170,490 ---------- ---------- ---------- TOTAL ASSETS $1,617,661 $1,649,792 $1,651,431 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued liabilities $ 231,150 $ 222,877 $ 247,378 Income taxes payable 5,505 14,536 39,614 Current portion of long-term debt 8,709 26,945 17,813 ---------- ---------- ---------- Total current liabilities 245,364 264,358 304,805 Long-term debt 293,040 406,700 290,668 Deferred income tax 72,619 94,344 68,326 Other postretirement benefits 122,634 122,654 120,591 Other long-term liabilities 24,563 16,523 25,587 ---------- ---------- ---------- Total liabilities 758,220 904,579 809,977 ---------- ---------- ---------- Common equity interests Common shares 60,199 59,154 59,694 Exchangeable shares 58,100 58,315 57,805 Additional paid-in-capital 584,207 565,486 576,054 Retained earnings 220,553 130,518 224,908 Foreign currency translation adjustments (63,618) (68,260) (77,007) ---------- ---------- ---------- Total shareholders' equity 859,441 745,213 841,454 ---------- ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,617,661 $1,649,792 $1,651,431 ========== ========== ==========
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 ----------------------- ------------------------ 1995 1994 1995 1994 ---------- ---------- ---------- ---------- CASH FLOWS FROM OPERATIONS Net income (loss) $ 7,665 $ (23,730) $ 112,031 $ 32,774 Adjustments to reconcile net income (loss) to net cash provided by operations: Depreciation, depletion and amortization 46,884 55,853 94,617 112,497 Provision for doubtful accounts 1,336 2,551 4,726 5,524 Gain on sale of assets (9,876) (3,837) (23,836) (8,329) Other postretirement benefits 1,721 2,580 2,632 4,673 Restructuring (3,030) (7,731) (8,895) 13,869 Other non-cash charges and credits, net (6,960) (8,976) (25,385) (15,634) Changes in working capital (116,791) (87,217) (16,461) 1,882 ---------- ---------- ---------- ---------- Net cash provided (consumed) by operations (79,051) (70,507) 139,429 147,256 ---------- ---------- ---------- ---------- CASH FLOWS INVESTED Capital expenditures (61,104) (45,411) (111,108) (69,742) Acquisitions (23,449) (2,131) (26,057) (16,590) Short-term investments 50,500 - - - Proceeds from property, plant & equipment dispositions 24,458 12,315 170,088 31,413 Other (3,519) 1,772 6,109 3,025 ---------- ---------- ---------- ---------- Net cash returned (invested) (13,114) (33,455) 39,032 (51,894) ---------- ---------- ---------- ---------- CASH FLOWS FROM FINANCING Net increase (decrease) in long-term borrowings (6,760) 46,146 (131,889) (192,935) Issuance of equity securities 1,617 9,317 6,097 132,857 Dividends, net of reinvestments (4,684) (6,234) (8,542) (12,298) ---------- ---------- ---------- ---------- Net cash provided (consumed) by financing (9,827) 49,229 (134,334) (72,376) ---------- ---------- ---------- ---------- Effect of exchange rate changes 3,379 (4,613) 369 (8,738) ---------- ---------- ---------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (98,613) (59,346) 44,496 14,248 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 193,057 109,294 49,948 35,700 ---------- ---------- ---------- ---------- CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 94,444 $ 49,948 $ 94,444 $ 49,948 ========== ========== ========== ==========
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 ----------------------- ----------------------- ----------------------- 1995 1994 1995 1994 1995 1994 ---------- ---------- ---------- ---------- ---------- ---------- NET SALES Canada $ 170,190 $ 164,820 $ 253,359 $ 242,503 $ 677,600 $ 645,346 United States 225,830 258,555 339,450 388,644 847,312 894,044 ---------- ---------- ---------- ---------- ---------- ---------- TOTAL NET SALES $ 396,020 $ 423,375 $ 592,809 $ 631,147 $1,524,912 $1,539,390 ========== ========== ========== ========== ========== ========== INCOME (LOSS) FROM OPERATIONS Canada $ 25,327 $ 12,498 $ (568) $ (20,833) $ 70,120 $ 35,803 United States 38,938 41,435 18,019 8,992 101,039 60,127 ---------- ---------- ---------- ---------- ---------- ---------- INCOME (LOSS) FROM OPERATIONS 64,265 53,933 17,451 (11,841) 171,159 95,930 Interest expense, net (5,396) (8,750) (8,428) (16,817) (20,391) (37,405) ---------- ---------- ---------- ---------- ---------- ---------- PRE-TAX INCOME (LOSS) $ 58,869 $ 45,183 $ 9,023 $ (28,658) $ 150,768 $ 58,525 ========== ========== ========== ========== ========== ==========
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, is engaged in waste recovery and disposal utilizing industrial wastes as supplemental fuels in cement kilns. Lafarge 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 1994 Annual Report on Form 10-K. 3. 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. 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 June 30, 1995 and 1994, and at December 31, 1994, inventories consisted of the following (in thousands):
June 30 June 30 December 31 1995 1994 1994 ------------ ------------ ----------- Finished products $ 96,182 $ 92,534 $ 82,324 Work in process 22,032 17,046 8,427 Raw materials and fuel 49,097 37,758 45,291 Maintenance and operating supplies 38,364 42,804 39,391 ---------- ---------- ----------- Total inventories $ 205,675 $ 190,142 $ 175,433 ========== ========== ===========
7 8 5. Cash paid during the period for interest and taxes is as follows (in thousands):
Six Months Twelve Months Ended June 30 Ended June 30 ---------------------- ---------------------- 1995 1994 1995 1994 -------- -------- -------- -------- Interest, net $ 6,859 $ 16,273 $ 19,774 $ 38,124 Income taxes (net of refunds) 31,638 15,206 58,849 28,518
6. The 1995 amounts shown as income (loss) from operations for Canada and the United States in the condensed consolidated geographic information exclude the $30.1 million of cumulative adjustments resulting from an agreement reached with Revenue Canada during the second quarter of 1995 related to the pricing of certain cement sales between the Registrant's operations in Canada and the U.S. If these adjustments were reflected, net sales and income from operations from Canada would be increased and income from operations for the U.S. would be decreased. There would be no impact on consolidated income from operations. 7. See Part II Item 1 on page 13 for a discussion of the material developments in legal proceedings. It is the opinion of management that all legal and environmental matters will be resolved without material effect on the Registrant's consolidated financial statements. 8. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments (which included only normal recurring adjustments) necessary to present fairly the Registrant's financial position as of the applicable dates and the results of its operations and 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 During the second quarter, the Registrant 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 by U.S. $30.1 million with corresponding adjustments in the U.S. The impact of this agreement was immaterial to consolidated net income. Management's Discussion and Analysis that follows, except for the discussion of income taxes, excludes the impact of this agreement. THREE MONTHS ENDED JUNE 30, 1995 The Registrant reported net income of $49.7 million in 1995 compared with net income of $38.1 million for the same period in 1994. Earnings per common equity share were $0.72 compared with $0.56. The main factors contributing to the earnings improvement were an increase in cement income from operations and a decrease in interest expense. The Registrant's net sales declined 6 percent to $396.0 from $423.4 million in 1994. However, after adjusting for the absence of sales from the Registrant's 1994 divestments in the U.S., net sales from continuing operations increased 5 percent. Canadian net sales were $170.2 million, a 3 percent increase. U.S. net sales decreased 13 percent to $225.8 million due to the 1994 divestments. After adjusting for the impact of divestments, cement sales volumes and ready-mixed concrete shipments declined 2 percent and 11 percent, respectively, while aggregate shipments rose slightly (1 percent). The second quarter contribution from the Registrant's cement operations was $61.8 million, $10.2 million higher than last year. A 6 percent increase in the average net selling price more than offset the 2 percent decline in cement shipments. Net sales increased 1 percent, whereas net sales from continuing operations were up 7 percent. In Canada, the contribution was $23.1 million, $9.6 million better than 1994. Due to a 5 percent increase in the average net selling price (before exchange rate fluctuation) net sales increased 8 percent. Cement shipments declined slightly (1 percent) reflecting lower demand in Quebec and British Columbia. The U.S. contribution was $38.7 million. This was $0.6 million better than 1994. An increase in the average net selling price of 6 percent was partially offset by lower sales volumes from continuing operations (2 percent) and higher cost of sales. Cement shipments were negatively impacted by rainy weather in the Midwest while cost of sales was higher due to increases in cement and clinker purchases to compensate for production shortfalls. Due to divestments, net sales declined 2 percent; however, after adjusting for 1994 divestments, net sales climbed 7 percent. 9 10 Earnings from the Registrant's construction materials and waste management operations were $12.4 million, $0.5 million better than 1994. Net sales declined 15 percent; however, after adjusting for the divestments, revenues were unchanged. Canadian earnings were $5.8 million, $3.7 million better than last year. Improvements were mainly due to higher pressure pipe and concrete pipe sales in eastern Canada and higher ready-mixed concrete and aggregate margins in British Columbia. Net sales were 2 percent higher. Ready-mixed concrete volumes were 9 percent lower reflecting sharp declines in Quebec and British Columbia. Aggregate volumes were 2 percent lower. In the U.S., earnings were $6.6 million, $3.2 million lower than a year ago mainly due to the absence of earnings from divested operations and lower sales in the midwestern states due to rainy weather. Due to divestments, net sales declined 40 percent. After adjusting for 1994 divestments, net sales declined only 6 percent. Ready-mixed concrete shipments from continuing operations decreased 17 percent while aggregate shipments were 9 percent higher. Selling and administrative expenses were $3.8 million lower than 1994. The reduction resulted primarily from divestments and staff reductions related to restructuring. Interest expense, net was $3.4 million lower due to lower average net indebtedness and the impact of higher interest rates on short-term investments. SIX MONTHS ENDED JUNE 30, 1995 The Registrant reported earnings of $7.7 million or $0.11 per common equity share. This compares to a net loss of $23.7 million, or $0.35 for the first six months of 1994. Historically, the Registrant's first quarter sales volumes 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 improvement in earnings was mainly due to higher cement shipments from continuing operations, an increase in cement prices, higher divestment gains, lower selling and administrative expenses and lower interest expense. Net sales were $592.8 million as compared to $631.1 million last year, a decrease of 6 percent. Net sales from continuing operations increased 8 percent due to higher cement sales volumes coupled with a 5 percent rise in the cement selling price. Canadian net sales were $253.4 million, an increase of 4 percent. Due to divestments, U.S. net sales declined 13 percent. Sales volumes from continuing operations for cement and aggregate were 3 percent and 5 percent higher, respectively, while ready-mixed concrete sales were 8 percent lower. Earnings from the Registrant's cement operations were $39.8 million, $18.2 million better than last year. Results were better due to higher sales volumes and prices somewhat offset by higher plant costs. Net sales increased 3 percent, whereas net sales from continuing operations were up 12 percent. Earnings from Canadian operations were $17.6 million, an increase of $13.3 million over 1994. Net sales and cement shipments were 8 percent and 3 percent higher, respectively. Excluding the exchange rate 10 11 fluctuation, the average net selling price was 4 percent higher. Plant costs were higher due to accelerated repair costs, start-up of second kilns at the Woodstock and Brookfield plants and the production of specialty cement for the fixed link bridge project. These higher costs were partially offset by lower gas costs at the Exshaw plant. Earnings from U.S. cement operations were $22.2 million, $4.9 million higher than prior year. The higher earnings were primarily attributable to higher sales volumes from continuing operations and an increase in the average net selling price partially offset by higher clinker and cement purchases. Aided by a 6 percent increase in the average net selling price, net sales were 2 percent higher than 1994 whereas, after adjusting for the impact of divestments, net sales and cement shipments from continuing operations were 13 percent and 3 percent higher, respectively. The Registrant's construction materials and waste management operations lost $10.5 million. This was $4.1 million better than last year. Net sales declined 17 percent; however, revenues from continuing operations were 2 percent higher. Canadian operations lost $11.8 million, $7.3 million better than 1994. Ready-mixed concrete margins improved in British Columbia. Concrete products margins in eastern Canada were up due to higher pressure pipe and concrete pipe sales. Net sales were 3 percent higher than 1994. Ready-mixed concrete volumes were 7 percent lower (primarily in Quebec and British Columbia) but aggregate volumes were 1 percent higher. The U.S. operations earned $1.3 million compared to earnings of $4.5 million in 1994. Results were impacted by the absence of earnings from divested operations and wet weather in the midwestern states. Net sales and ready-mixed concrete shipments from continuing operations declined 3 percent and 10 percent, respectively. Aggregate shipments were 14 percent higher. Selling and administrative expenses were $71.9 million in 1995 compared to $79.3 million in 1994. The reduction resulted primarily from divestments and staff reductions related to restructuring. Interest expense, net decreased $8.4 million in 1995 due to lower average net indebtedness and the impact of higher interest rates on investments. Other income, net was $2.6 million in 1995 compared to expense of $7.1 million in 1994. The improvement resulted mostly from gains on the sale of non strategic assets. The income tax expense for the six-months ended June 30, 1995 was $1.4 million which was $6.3 million higher than for the same period in 1994. The increase was caused by higher taxable income in Canada resulting from the agreement with Revenue Canada Taxation, partially offset by a tax benefit recorded in the U.S. No tax benefit was recorded in the U.S. during the six-months ended June 30, 1994 due to the existence of carried forward net operating losses which were substantially realized during the fourth quarter of 1994. The tax benefit recorded in the U.S. essentially corresponds to the income tax expense that was recorded in Canada as a result of the aforementioned agreement with Revenue Canada Taxation. In addition, the effective tax rate in Canada decreased. 11 12 TWELVE MONTHS ENDED JUNE 30, 1995 The Registrant's net income was $112.0 million compared to $32.8 million in 1994. Due to divestments, net sales declined slightly (1 percent). Canadian net sales increased 5 percent but U.S. net sales declined 5 percent. The average net selling price for cement increased 6 percent. Interest expense, net was $17.0 million lower due to lower average net indebtedness, higher interest rates on investments and currency exchange gains on U.S. dollar denominated investments in Canada. Other income, net was $6.3 million as compared to expense of $10.5 million. The improvement resulted primarily from gains on the sale of non strategic assets partly offset by interest rate swap expenses. Earnings also improved from the absence of a one-time restructuring charge of $21.6 million. LIQUIDITY AND CAPITAL RESOURCES Net cash consumed from operating activities was higher during the first six months of 1995 compared with the same period in 1994. The higher net income in 1995 was more than offset by higher working capital requirements and miscellaneous adjustments. Cash flows invested were lower due to higher capital spending partially offset by the liquidation of short-term investments and increased divestments. The 1995 divestment proceeds resulted mainly from the sale of the Registrant's interest in a Texas aggregate operation. Due to substantial cash levels during 1995, the Registrant did not incur higher seasonal short-term borrowings as in prior years. This accounted for the significant change in cash flows from financing in 1995 compared to 1994. The equity issuances during 1994 were primarily attributable to the exercise of stock options. For the twelve-month period ended June 30, 1995, net cash provided from operating activities decreased over the same period in 1994 primarily as a result of working capital requirements (including payment of restructuring expenses) and lower depreciation expense partially offset by higher net income. Cash flows returned and invested for the twelve-month period ended June 30, 1995 and 1994 were $39.0 million and $51.9 million, respectively. Capital spending in 1995 was higher than 1994 and proceeds from property, plant and equipment dispositions were higher due to the divestment of various non strategic assets. Net cash consumed in 1995 and 1994 consisted mainly of debt reduction. The debt reduction in 1995 resulted mostly from proceeds received upon the divestment of non strategic assets whereas the 1994 reduction was from net proceeds received upon the sale of common shares in October 1993. Capital investments are not expected to exceed $200.0 million in 1995. At June 30, 1995, the Registrant had no material capital commitments and had $150 million of committed bank lines of credit of which none had been drawn. The Registrant had $8.1 million of short-term loans outstanding as of June 30, 1995 which were drawn from uncommitted facilities made available to the Registrant. 12 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings On July 28, 1995, Lone Star Industries Inc. and the Registrant agreed to settle for the sum of $11.2 million the Lone Star case currently appealed to the U.S. Court of Appeals for the Fourth Circuit, the companion case pending in the U.S. District Court for the District of Maryland which basically parallels the claims in the Lone Star case, and any and all related claims concerning allegedly defective cement sold by the Registrant to Lone Star or its affiliates for use in concrete railroad ties. The parties are in the process of documenting the agreement of settlement and expect to have this matter concluded in the near future. The Registrant expects a significant contribution to the settlement amount from its insurers, which amount will be determined by negotiations and/or court resolution. In the Bertrand & Frere Construction Company Limited ("Bertrand") litigation in Ontario, Canada, there are presently approximately 168 plaintiffs whose claims involve 103 building foundations (mostly residential), which are embodied in nine lawsuits. In two of these suits the plaintiffs have added LCI as a party defendant; in the others, LCI is either a third or fourth party defendant. The damages claimed total more than Cdn. $62 million. LCI has also been served with cross-claims or third or fourth party claims by Bertrand, seeking indemnity for its liability to the owners as a result of LCI supplying allegedly defective fly ash and cement. LCI has made third and fourth party claims against some of its insurers to enforce its insurance contractual rights. In July 1995, the Ontario New Home Warranty Program instituted a lawsuit against Bertrand, LCI and certain other defendants to recover approximately Cdn. $3.0 million in costs for replacing or repairing the foundations of 29 houses which were covered under the warranty program. LCI denies liability in this suit as well. Following the publication in late July 1995 of articles in a Quebec City (Canada) newspaper alleging price fixing and bid rigging agreements among suppliers in the ready mixed concrete industry, the Canadian Bureau of Competition Policy has started an investigation and executed search warrants against several ready mixed concrete producers operating in the Quebec City area, including LCI. LCI is presently conducting an internal investigation. In settlement of the matter of alleged excess opacity emissions at its Joppa, Illinois cement plant, the Registrant paid $100,000. 13 14 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Page ---- Exhibit 11 - Statement regarding computation of net income (loss) per common equity share. 16 Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed by the Registrant during the three-months ended June 30, 1995. 14 15 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 11, 1995 By: JEAN-PIERRE CLOISEAU ----------------------- ----------------------------- Jean-Pierre Cloiseau Executive Vice President and Chief Financial Officer 15 EX-11 2 COMPUTATION OF SHARE VALUE. 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 --------------------- --------------------- --------------------- 1995 1994 1995 1994 1995 1994 -------- -------- -------- -------- -------- -------- PRIMARY CALCULATION - ------------------- Net income (loss) $ 49,718 $ 38,129 $ 7,665 $ (23,730) $ 112,031 $ 32,774 ======== ======== ======== ======== ======== ======== Weighted average number of common equity shares outstanding 68,498 67,655 68,375 67,503 68,169 65,090 Net effect of dilutive stock options based on the treasury method 380 505 292 - 314 626 -------- -------- -------- -------- -------- -------- Weighted average number of common equity shares and share equivalents outstanding 68,878 68,160 68,667 67,503 68,483 65,716 ======== ======== ======== ======== ======== ======== Primary net income (loss) per common equity share $ .72 $ .56 $ .11 $ (.35) $ 1.64 $ .50 ======== ======== ======== ======== ======== ========
16 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 --------------------- --------------------- --------------------- 1995 1994 1995 1994 1995 1994 -------- -------- -------- -------- -------- -------- FULLY DILUTED CALCULATION - ------------------------- Net income (loss) $ 49,718 $ 38,129 $ 7,665 $ (23,730) $ 112,031 $ 32,774 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 $ 51,468 $ 39,879 $ 11,165 $ (20,230) $ 119,031 $ 39,774 ======== ======== ======== ======== ======== ======== Weighted average number of common equity shares outstanding 68,498 67,655 68,375 67,503 68,169 65,090 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 380 505 316 635 314 626 -------- -------- -------- -------- -------- -------- Weighted average number of common equity shares assuming full conversion of all potentially dilutive securities 73,398 72,680 73,211 72,658 73,003 70,236 ======== ======== ======== ======== ======== ======== Fully diluted net income (loss) per common equity share $ .70 $ .55 $ .15(a) $ (.28)(a) $ 1.63 $ .57(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. 17 EX-27 3 FINANCIAL DATA SCHEDULE.
5 Lafarge Corporation and Subsidiaries Article 5 of Regulation S-X 1,000 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 94,444 0 297,196 0 205,675 630,408 782,877 0 1,617,661 245,364 293,040 702,506 0 0 156,935 1,617,661 592,809 592,809 506,035 506,035 (2,573) 0 8,428 9,023 1,358 7,665 0 0 0 7,665 .11 .11 PP&E, net shown only. Interim financial statements do not require PP&E at cost and accumulated depreciation and depletion.