-----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, HzVJ8LTK7Tc3DU35kSgZXeLVHTRWLjBq50c+veQuU7c06NUFyY+fbYNzjICQlNom LwACXqhlwLAU8/5a5j44Rg== 0000950133-96-001597.txt : 19960816 0000950133-96-001597.hdr.sgml : 19960816 ACCESSION NUMBER: 0000950133-96-001597 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 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: 96612812 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 (6/30/96). 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, 1996 ------------------------------------------------ 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 July 31, 1996 ----------------------------------------- --------------------- Common Stock of Lafarge Corporation ($1 par value) 61,806,082 Exchangeable Preference Shares of Lafarge Canada Inc. (no par value) 8,093,487 ----------------- Total Common Equity Interests 69,899,569 =================
Number of pages contained in this report 16 -------------- Total sequentially numbered pages 16 -------------- Exhibit index on page 13 ------------- -1- 2 LAFARGE CORPORATION AND SUBSIDIARIES FORM 10-Q - FOR THE QUARTER ENDED JUNE 30, 1996 INDEX
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements a) Condensed Consolidated Statements of Income - Three-Month, Six Month and Twelve-Month Periods Ended June 30, 1996 and 1995 3 b) Condensed Consolidated Balance Sheets - June 30, 1996, June 30, 1995, and December 31, 1995 4 c) Condensed Consolidated Statements of Cash Flows - Six - Month and Twelve-Month Periods Ended June 30, 1996 and 1995 5 d) Condensed Consolidated Geographic Information - Three-Month, Six-Month and Twelve-Month Periods Ended June 30, 1996 and 1995 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 13 Item 6 (a). Exhibits 13 Item 6 (b). Reports on Form 8-K 13 SIGNATURE 14
-2- 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS LAFARGE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS SIX MONTHS TWELVE MONTHS ENDED JUNE 30 ENDED JUNE 30 ENDED JUNE 30 ----------------------------- ---------------------------- -------------------------------- 1996 1995 1996 1995 1996 1995 ----------- ------------ ------------ ------------ ------------- --------------- NET SALES $ 420,948 $ 396,020 $ 624,660 $ 592,809 $ 1,504,010 $ 1,524,912 ----------- ------------ ------------ ------------ ------------- --------------- COSTS AND EXPENSES Cost of goods sold 307,395 293,332 530,888 506,035 1,174,021 1,204,095 Selling and administrative 38,654 36,416 74,449 71,896 143,665 155,981 Interest expense, net 3,555 5,396 6,806 8,428 13,597 20,391 Other expense (income), net 1,839 2,007 4,696 (2,573) 3,762 (6,323) ----------- ------------ ------------ ------------ ------------- --------------- Total costs and expenses 351,443 337,151 616,839 583,786 1,335,045 1,374,144 ----------- ------------ ------------ ------------ ------------- --------------- Pre-tax income 69,505 58,869 7,821 9,023 168,965 150,768 Income tax expense (26,240) (9,151) (2,751) (1,358) (41,947) (38,737) ----------- ------------ ------------ ------------ ------------- --------------- NET INCOME $ 43,265 $ 49,718 $ 5,070 $ 7,665 $ 127,018 $ 112,031 =========== ============ ============ ============ ============= =============== NET INCOME PER COMMON EQUITY SHARE-PRIMARY $ .62 $ .72 $ .07 $ .11 $ 1.83 $ 1.64 =========== ============ ============ ============ ============= =============== NET INCOME PER COMMON EQUITY SHARE - ASSUMING FULL DILUTION $ .59 $ .70 $ .07 $ .11 $ 1.77 $ 1.63 =========== ============ ============ ============ ============= =============== DIVIDENDS PER COMMON EQUITY SHARE $ .100 $ .100 $ .200 $ .175 $ .400 $ .325 =========== ============ ============ ============ ============= =============== Average number of common equity shares outstanding 70,090 68,878 69,848 68,667 69,576 68,483 =========== ============ ============ ============ ============= ===============
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 1996 1995 1995 --------------- --------------- --------------- ASSETS Cash and cash equivalents $ 67,501 $ 94,444 $ 136,435 Short-term investments 50,603 ---- 84,516 Receivables, net 321,672 297,196 256,262 Inventories 218,345 205,675 210,076 Other current assets 37,293 33,093 31,214 --------------- --------------- --------------- Total current assets 695,414 630,408 718,503 Property, plant and equipment, (less accumulated depreciation and depletion of $1,007,658, $950,944 and $983,518) 831,197 782,877 797,017 Excess of cost over net assets of businesses acquired, net 21,911 20,671 21,302 Other assets 170,262 183,705 177,031 --------------- --------------- --------------- TOTAL ASSETS $ 1,718,784 $ 1,617,661 $ 1,713,853 =============== =============== =============== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued liabilities $ 239,829 $ 231,150 $ 222,458 Income taxes payable 12,101 5,505 31,729 Current portion of long-term debt 20,711 8,709 15,741 --------------- --------------- --------------- Total current liabilities 272,641 245,364 269,928 Long-term debt 263,282 293,040 268,636 Deferred income tax 45,950 72,619 43,314 Other postretirement benefits 124,724 122,634 123,260 Other long-term liabilities 29,211 24,563 27,737 --------------- --------------- --------------- Total liabilities 735,808 758,220 732,875 --------------- --------------- --------------- Common equity interests Common shares 61,747 60,199 60,735 Exchangeable shares 55,737 58,100 58,311 Additional paid-in-capital 605,389 584,207 593,310 Retained earnings 319,744 220,553 328,623 Foreign currency translation adjustments (59,641) (63,618) (60,001) --------------- --------------- --------------- Total shareholders' equity 982,976 859,441 980,978 --------------- --------------- --------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,718,784 $ 1,617,661 $ 1,713,853 =============== =============== ===============
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 --------------------------------- -------------------------------- 1996 1995 1996 1995 ------------- -------------- ------------- -------------- CASH FLOWS FROM OPERATIONS Net income $ 5,070 $ 7,665 $ 127,018 $ 112,031 Adjustments to reconcile net income to net cash provided by operations: Depreciation, depletion and amortization 50,206 46,884 97,643 94,617 Provision for doubtful accounts 944 1,336 196 4,726 (Gain) loss on sale of assets 11 (9,876) (4,698) (23,836) Other postretirement benefits 1,229 1,721 1,770 2,632 Other non-cash charges and credits, net (3,018) (6,960) (26,339) (25,385) Changes in working capital (91,904) (119,821) (35,734) (25,356) -------------- ------------- ------------- ------------- Net cash provided (consumed) by operations (37,462) (79,051) 159,856 139,429 -------------- ------------- ------------- ------------- CASH FLOWS FROM INVESTING Capital expenditures (66,068) (61,104) (126,846) (111,108) Acquisitions (8,593) (23,449) (14,463) (26,057) Short-term investments 33,913 50,500 (50,603) -- Proceeds from property, plant and equipment dispositions 13,009 24,458 23,179 170,088 Other 1,345 (3,519) 7,784 6,109 -------------- ------------- ------------- ------------- Net cash provided by (used for) investing (26,394) (13,114) (160,949) 39,032 -------------- ------------- ------------- ------------- CASH FLOWS FROM FINANCING Net decrease in long-term borrowings (1,756) (6,760) (19,310) (131,889) Issuance of equity securities 2,689 1,617 4,091 6,097 Dividends, net of reinvestments (6,122) (4,684) (11,552) (8,542) -------------- ------------- ------------- ------------- Net cash consumed by financing (5,189) (9,827) (26,771) (134,334) -------------- ------------- ------------- ------------- Effect of exchange rate changes 111 3,379 921 369 -------------- ------------- ------------- ------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (68,934) (98,613) (26,943) 44,496 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 136,435 193,057 94,444 49,948 -------------- ------------- ------------- ------------- CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 67,501 $ 94,444 $ 67,501 $ 94,444 ============== ============= ============= =============
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 ENDED JUNE 30 ENDED JUNE 30 ------------------------------------------------------------------------------------- 1996 1995 1996 1995 ----------------- ---------------- ---------------- ------------------ NET SALES Canada $ 164,924 $ 170,190 $ 244,661 $ 253,359 United States 256,024 225,830 379,999 339,450 ----------------- ---------------- ---------------- ------------------ TOTAL NET SALES $ 420,948 $ 396,020 $ 624,660 $ 592,809 ================= ================ ================ ================== INCOME (LOSS) FROM OPERATIONS Canada $ 24,518 $ 25,327 $ (7,255) $ (568) United States 48,542 38,938 21,882 18,019 ----------------- ---------------- ---------------- ------------------ TOTAL INCOME FROM OPERATIONS 73,060 64,265 14,627 17,451 Interest expense, net (3,555) (5,396) (6,806) (8,428) ----------------- ---------------- ---------------- ------------------ PRE-TAX INCOME $ 69,505 $ 58,869 $ 7,821 $ 9,023 ================= ================ ================ ==================
TWELVE MONTHS ENDED JUNE 30 ------------------------------------------- 1996 1995 ------------------ ------------------- NET SALES Canada $ 652,036 $ 677,600 United States 851,974 847,312 ------------------ ------------------- TOTAL NET SALES $ 1,504,010 $ 1,524,912 ================== =================== INCOME (LOSS) FROM OPERATIONS Canada $ 68,791 $ 70,120 United States 113,771 101,039 ------------------ ------------------- TOTAL INCOME FROM OPERATIONS 182,562 171,159 Interest expense, net (13,597) (20,391) ------------------ ------------------- PRE-TAX INCOME $ 168,965 $ 150,768 ================== ===================
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 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 1995 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 June 30, 1996 and 1995, and at December 31, 1995, inventories consisted of the following (in thousands):
JUNE 30 JUNE 30 DECEMBER 31 1996 1995 1995 --------------- --------------- --------------- Finished products $ 101,980 $ 96,182 $ 97,950 Work in process 27,137 22,032 16,959 Raw materials and fuel 47,891 49,097 50,030 Maintenance and operating supplies 41,337 38,364 45,137 --------------- --------------- --------------- Total inventories $ 218,345 $ 205,675 $ 210,076 =============== =============== ===============
-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 -------------------------- ------------------------------- 1996 1995 1996 1995 ----------- ------------ ------------- ------------- Interest, net $ 6,884 $ 6,859 $ 15,962 $ 19,774 Income taxes (net of refunds) 26,376 31,638 69,803 58,849
6. The 1995 amounts shown as income from operations for Canada and the United States in the condensed consolidated geographic information exclude $30.1 million of cumulative adjustments resulting from an agreement reached with Revenue Canada Taxation during the second quarter of 1995 related to the pricing of certain cement sales between the Company's operations in Canada and the U.S. for the years 1984 through 1994. If these adjustments were reflected, net sales and income from operations from Canada would be increased with corresponding adjustments in the U.S. 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 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. 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. Therefore, management believes it is more likely than not the related deferred tax assets will be realized. 9. On August 6, 1996, the Company announced it had reached an agreement to acquire G-P Gypsum Corporation's (a subsidiary of Georgia Pacific Corporation) gypsum wallboard manufacturing plants in Buchanan, New York and Wilmington, Delaware. The acquisition of the two facilities, which combined had gross sales of $75 million last year, is scheduled for completion in early September. 10. 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 Company'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 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. The impact of this agreement was immaterial to consolidated net income. Management's Discussion and Analysis that follows excludes the impact of this agreement (except for the discussion on income taxes). THREE MONTHS ENDED JUNE 30, 1996 The Company reported net income of $43.3 million in 1996 compared with net income of $49.7 million for the same period in 1995. Net income per common equity share was $0.62 compared with $0.72. The decline in earnings was due to an increase in income tax expense in the U.S. The 1996 second quarter earnings in the U.S. reflect a full tax provision against quarterly income whereas the U.S. earnings in the second quarter of 1995 include a reduced tax provision as a result of the utilization of net operating loss carryforwards and the fact that tax benefits arising from seasonal losses in the first quarter were not recognized prior to 1996. The higher income tax expense was partially offset by higher prices and volumes in the Company's cement, ready-mixed concrete and aggregate operations. The Company's net sales increased 6 percent to $420.9 million from $396.0 million in 1995. Canadian net sales declined 3 percent mainly due to the continuing weaknesses in the Ontario and Alberta construction markets. Net sales in the U.S. increased 13 percent primarily because of higher cement prices and the effect of acquisitions (in late 1995 and early 1996) in the construction materials operations. Cement shipments increased 2 percent while ready-mixed concrete and aggregate volumes rose 12 percent and 5 percent, respectively. Second quarter earnings from the Company's cement operations were $71.4 million, $9.6 million better than last year. Higher prices and a slight increase in sales volumes were partially offset by lower clinker production in Canada due to high inventories. Net sales increased 6 percent reflecting the rise in shipments and prices. Earnings from Canadian cement operations were $22.9 million, $0.2 million worse than 1995. A 2 percent increase in the average net sales price (before exchange rate fluctuation) was offset by a 4 percent decline in sales volumes (reflecting lower demand in Ontario and Alberta). Net sales declined 2 percent. The U.S. contribution was $48.5 million, $9.8 million better than 1995. Higher cement prices (3 percent) and increased shipments (4 percent) were the driving forces behind the improved U.S. results. Net sales rose 9 percent. -9- 10 Earnings from the Company's construction materials and waste management operations were $14.1 million, $1.7 million better than 1995. The improvement was due to higher earnings in the U.S. and lower expenses related to the implementation of a new financial system. Net sales were 8 percent higher mainly due to acquisitions in the U.S. In Canada, earnings were $5.5 million, $0.3 million lower than 1995 due to lower earnings in the Ontario and Alberta markets. Ready-mixed concrete and aggregate volumes increased 6 percent and 15 percent, respectively; however, net sales were 2 percent lower reflecting an unfavorable product and geographical mix. The U.S. operations earned $8.6 million, $2.0 million higher than a year ago. Strong ready-mixed concrete volumes (up 25 percent) due to acquisitions and the absence of 1995 flooding conditions in the Midwest were the primary factors. Net sales increased 34 percent mostly due to acquisitions and higher ready-mixed concrete prices. Aggregate volumes declined 12 percent mainly due to the shutdown and 1996 divestment of a sand and gravel operation. Income tax expense was $26.2 million, $17.1 million higher than 1995. The 1996 second quarter earnings in the U.S. reflect a full tax provision against quarterly income whereas the U.S. earnings in the second quarter of 1995 include a reduced tax provision as a result of the utilization of net operating loss carryforwards and the fact that tax benefits arising from seasonal losses in the first quarter were not recognized prior to 1996. In Canada, taxes decreased $10.3 million due to lower earnings as the result of the agreement with Revenue Canada Taxation, concluded in the second quarter of 1995, that resulted in a cumulative adjustment to increase taxable income in Canada. This adjustment was offset by a corresponding tax benefit in the U.S. The Company's effective income tax rate was 37.8 percent in 1996 and 15.5 percent in 1995. SIX MONTHS ENDED JUNE 30, 1996 The Company reported net income of $5.1 million or $0.07 per common equity share. This compares with net income of $7.7 million, or $0.11 for the first six months of 1995. Historically, the Company's first quarter sales and operating results are negatively impacted by seasonal 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. The decrease in earnings resulted from lower cement volumes and lower divestment gains largely offset by higher prices. Net sales were $624.7 million compared with $592.8 million in 1995, a 5 percent increase. Cement shipments were 1 percent lower while ready-mixed concrete and aggregate volumes were 10 percent and 1 percent higher, respectively. Canadian net sales declined 3 percent to $244.7 million primarily due to 7 percent lower cement shipments. U.S. sales increased 12 percent to $380.0 million because of a 3 percent increase in cement prices and 1995 and 1996 acquisitions in the construction materials operations. Earnings from the Company's cement operations were $44.4 million, $4.6 million better than last year. Net sales rose 3 percent. Earnings from Canadian operations were $12.0 million, $5.6 million worse than 1995. Net sales and cement shipments were 4 percent and 7 percent lower, respectively, reflecting inclement weather and the slowdown of construction activity in Ontario, Quebec, Alberta and British Columbia. Canadian results were also affected by lower clinker -10- 11 production in both regions due to high inventory levels. The average net selling price (excluding exchange rate fluctuation) improved modestly (1.5 percent). In the U.S., earnings were $32.4 million, $10.2 million higher than 1995. The improvement was due to a slight increase in shipments and a 3 percent increase in prices. Net sales increased 6 percent. The Company's construction materials and waste management operations lost $7.1 million, $3.4 million better than last year. The improvement was due to an 8 percent increase in net sales primarily due to acquisitions in the U.S. and lower expenses related to the implementation of a new financial system. Canadian operations lost $11.7 million, $0.1 million better than 1995. Ready-mixed concrete and aggregate volumes were 4 percent and 9 percent higher, respectively; however, net sales were 3 percent lower reflecting an unfavorable product and geographical mix. U.S. operations earned $4.6 million compared to $1.3 million in 1995. Net sales increased 34 percent mostly due to ready-mixed concrete acquisitions and higher ready-mixed concrete prices. Earnings improved in the Company's midwestern markets which were hampered in 1995 by adverse weather conditions (flooding). Ready-mixed concrete shipments were 22 percent higher while aggregate shipments declined 11 percent, mainly due to the shutdown and 1996 divestment of a sand and gravel operation. Other expense, net was $4.7 million compared to income of $2.6 million in 1995. The change resulted mostly from lower divestment gains. TWELVE MONTHS ENDED JUNE 30, 1996 The Company reported net income of $127.0 million compared to $112.0 million for the same period ended June 30, 1995. Net sales declined 1 percent. Canadian net sales were 4 percent lower mostly due to a slowdown of construction activity in Ontario, Quebec and British Columbia. Net sales in the U.S. increased 1 percent. The average cement net selling price increased 5 percent in both the U.S. and Canada (excluding exchange rate fluctuations). Cement sales volumes were flat in the U.S. but declined 9 percent in Canada. Ready-mixed concrete and aggregate volumes declined 6 percent and 1 percent, respectively, in Canada. In the U.S., ready-mixed concrete volumes were unchanged but aggregate volumes dropped 26 percent due to divestments. Selling and administrative expenses were $12.3 million lower as the result of the Company's staff reductions related to restructuring and from divestments. Net interest expense declined $6.8 million due to lower average debt and higher average cash invested at higher interest rates. Other expense, net was $3.8 million as compared to income of $6.3 million in 1995. The change resulted primarily from lower gains on the sale of non-strategic assets. LIQUIDITY AND CAPITAL RESOURCES Net cash consumed from operating activities was lower during the first six months of 1996 compared with the same period in 1995 mainly due to a decrease in working capital requirements. The higher increase in accounts receivable coupled with lower increases in current liabilities were offset by smaller increases in inventories which compared to 1995. Net cash used for investing activities in the first six months of 1996 was $13.3 million higher than 1995. The decrease in acquisitions was more than offset by lower proceeds from divestments and short-term -11- 12 investment maturities. The 1995 divestment proceeds resulted mainly from the sale of the Company's interest in a Texas aggregate operation. Net cash consumed by financing activities in 1996 decreased by $4.6 million from 1995 due primarily to less debt reduction in 1996. The equity issuances during both periods were primarily attributable to the exercise of stock options. For the twelve month period ended June 30, 1996, net cash provided from operating activities increased over the same period in 1995 primarily as a result of higher net income partially offset by an increase in working capital requirements. Net cash of $160.9 million was used for investing activities during the twelve-month period ended June 30, 1996 compared to net cash of $39.0 million provided during the same period in 1995. The change resulted mainly from proceeds received upon the 1995 divestment of non-strategic assets and short-term investments in 1996. Net cash consumed by financing activities for the twelve-month period ended June 30, 1996 was $107.6 million lower than the same period in 1995 due to lower debt reduction. The debt reduction in 1995 resulted mostly from the proceeds of divested non-strategic assets. Capital investments are not expected to exceed $300 million in 1996. On August 6, 1996, the Company announced it had reached an agreement to acquire G-P Gypsum Corp.'s ( a subsidiary of Georgia Pacific Corporation) gypsum wallboard manufacturing plants in Buchanan, New York and Wilmington, Delaware. The acquisition of the two facilities is scheduled for completion in early September. At June 30, 1996, the Company had no material capital commitments and had $150.0 million of committed bank lines of credit of which none had been drawn. -12- 13 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company and LCI have settled all of their claims with all of the insurance companies in the Coverage Suit except for Hartford Casualty Insurance Company ("Hartford"). For a description of the Coverage Suit, see the Company's annual report on Form 10-K for the year ended December 31, 1995. On March 20, 1996, the Company and LCI filed an appeal of certain issues to the Court of Appeals for the Fourth Circuit. On April 15, 1996, Hartford also filed an appeal. Attorneys and principals of both Hartford and the Company met with conference attorneys for the Fourth Circuit Court of Appeals pursuant to a Pre-Argument Conference Notice in an attempt to settle this litigation. Settlement efforts were unsuccessful. It is expected that the Fourth Circuit will hear the appeal sometime during the fourth quarter of 1996 and render a decision in the first half of 1997. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Page Exhibit 11 - Statement regarding computation of net income per common equity share. 15 (b) Reports on Form 8-K The Company filed a form 8-K dated August 6, 1996 to report the appointment of a new President and Chief Executive Officer effective October 1, 1996 and an agreement to acquire G-P Gypsum Corp.'s (a subsidiary of Georgia Pacific Corporation) wallboard manufacturing plants in Buchanan, New York and Wilmington, Delaware. -13- 14 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: August 14, 1996 By: ------------------------- ---------------------------------- LARRY J. WAISANEN Senior Vice President and Chief Financial Officer -14- EX-11 2 COMPUTATION. 1 Exhibit 11 Page 1 of 2 LAFARGE CORPORATION AND SUBSIDIARIES COMPUTATION OF NET INCOME PER COMMON EQUITY SHARE (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS SIX MONTHS ENDED JUNE 30 ENDED JUNE 30 ----------------------------------------------------------------------------------- 1996 1995 1996 1995 --------------- --------------- --------------- --------------- PRIMARY CALCULATION ------------------- Net income $ 43,265 $ 49,718 $ 5,070 $ 7,665 =============== =============== =============== =============== Weighted average number of common equity shares outstanding 69,650 68,498 69,488 68,375 Net effect of dilutive stock options based on the treasury method 440 380 360 292 --------------- --------------- --------------- --------------- Weighted average number of common equity shares and share equivalents outstanding 70,090 68,878 69,848 68,667 =============== =============== =============== =============== Primary net income per common equity share $ .62 $ .72 $ .07 $ .11 =============== =============== =============== ===============
TWELVE MONTHS ENDED JUNE 30 ------------------------------------------ 1996 1995 ------------------ ------------------- PRIMARY CALCULATION ------------------- Net income $ 127,018 $ 112,031 ================== =================== Weighted average number of common equity shares outstanding 69,221 68,169 Net effect of dilutive stock options based on the treasury method 355 314 ------------------ ------------------- Weighted average number of common equity shares and share equivalents outstanding 69,576 68,483 ================== =================== Primary net income per common equity share $ 1.83 $ 1.64 ================== ===================
-15- 2 Exhibit 11 Page 2 of 2 LAFARGE CORPORATION AND SUBSIDIARIES COMPUTATION OF NET INCOME PER COMMON EQUITY SHARE (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS SIX MONTHS ENDED JUNE 30 ENDED JUNE 30 ---------------------------------------------------------------------- 1996 1995 1996 1995 ------------- ------------- ------------- ------------- FULLY DILUTED CALCULATION ------------------------- Net income $ 43,265 $ 49,718 $ 5,070 $ 7,665 Add after tax interest expense applicable to 7% Convertible Subordinated Debentures 1,110 1,750 2,219 3,500 ------------- ------------- ------------- ------------- Net income assuming full dilution $ 44,375 $ 51,468 $ 7,289 $ 11,165 ============= ============= ============= ============= Weighted average number of common equity shares outstanding 69,650 68,498 69,488 68,375 Add additional shares assuming conversion of 7% Convertible Subordinated Debentures 4,520 4,520 4,520 4,520 Net effect of dilutive stock options based on the treasury stock method 440 380 401 316 Weighted average number of common equity shares assuming full conversion of all potentially dilutive securities 74,610 73,398 74,409 73,211 ============= ============= ============= ============= Fully diluted net income per common equity share $ .59 $ .70 $ .10 (a) $ .15 (a) ============= ============= ============= =============
TWELVE MONTHS ENDED JUNE 30 ------------------------------------------- 1996 1995 ----------------- ------------------- FULLY DILUTED CALCULATION ------------------------- Net income $ 127,018 $ 112,031 Add after tax interest expense applicable to 7% Convertible Subordinated Debentures 4,439 7,000 ----------------- ------------------- Net income assuming full dilution $ 131,457 $ 119,031 ================= =================== Weighted average number of common equity shares outstanding 69,221 68,169 Add additional shares assuming conversion of 7% Convertible Subordinated Debentures 4,520 4,520 Net effect of dilutive stock options based on the treasury stock method 409 314 ----------------- ------------------- Weighted average number of common equity shares assuming full conversion of all potentially dilutive securities 74,150 73,003 ================= =================== Fully diluted net income per common equity share $ 1.77 $ 1.63 ================= ===================
(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. -16- EX-27 3 FINANCIAL DATA SCHEDULE.
5 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 67,501 50,603 321,672 0 218,345 695,414 1,838,855 (1,007,658) 1,718,784 272,641 263,282 0 0 722,873 260,103 1,718,784 624,660 624,660 530,888 530,888 4,696 0 6,806 7,821 (2,751) 5,070 0 0 0 5,070 .07 .07
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