-----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, MSaWELaC05LV/Y2wVN3UXayPUIUXAy8lm8HAzsV9gvVUaauOqtiWU/W+GKsueHmP o76VEbnDf89mhRssHQ4ROQ== 0000950144-95-002970.txt : 19951106 0000950144-95-002970.hdr.sgml : 19951106 ACCESSION NUMBER: 0000950144-95-002970 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951103 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUERTO RICAN CEMENT CO INC CENTRAL INDEX KEY: 0000081076 STANDARD INDUSTRIAL CLASSIFICATION: CEMENT, HYDRAULIC [3241] IRS NUMBER: 516601895 STATE OF INCORPORATION: PR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04753 FILM NUMBER: 95587141 BUSINESS ADDRESS: STREET 1: P.O.BOX 364487 CITY: SAN JUAN STATE: PR ZIP: 00936-4487 BUSINESS PHONE: 8097833000 MAIL ADDRESS: STREET 2: POST OFFICE BOX 364887 CITY: SAN JUAN STATE: PR ZIP: 09336-4487 10-Q 1 PUERTO RICAN CEMENT COMPANY FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 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 --------- --------- For Quarter Ended Commission file number 1-4753 --------------- ------ PUERTO RICAN CEMENT COMPANY, INC. (Exact name of registrant as specified in its charter) COMMONWEALTH OF PUERTO RICO 51-A-66-0189525 - --------------------------- --------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) PO Box 364487 - San Juan, P.R. 00936-4487 - ------------------------------ ---------- (Address of principal executive offices) (Zip Code) (809) 783-3000 -------------- (Registrant's telephone number, including area code) NONE Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the Registrant (1) has filed 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 ------ ------- COMMON STOCK -$1.00 PAR VALUE 5,419,200 SHARES 2 PUERTO RICAN CEMENT COMPANY, INC. INDEX
PAGE NO. Part I - Financial Information Consolidated Balance Sheet as of September 30, 1995 and December 31, 1994 1 - 2 Consolidated Statement of Income Third quarter ended on September 30, 1995 and 1994 3 Consolidated Statement of Cash Flows Nine months ended on September 30, 1995 and 1994 4 Notes to Consolidated Financial Statements 5 Management's Discussion and Analysis of Financial Condition and Results of Operations 6 - 7 Part II - Other Information 8 Signatures 8
3 PUERTO RICAN CEMENT COMPANY, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED)
SEPTEMBER DECEMBER ASSETS 30, 1995 31, 1994 -------- -------- CURRENT ASSETS Cash $ 625,983 $ 114,702 Short-term investments 8,013,495 ------------ ------------ Cash and Cash Equivalents 8,639,478 114,702 ------------ ------------ Notes and accounts receivable-net of allowance for doubtful accounts of $1,035,117 in 1995 and $1,094,003 in 1994 14,035,440 14,358,827 ------------ ------------ Inventories: Finished products 1,659,435 1,964,131 Work in process 3,770,964 3,561,875 Raw materials 4,681,611 4,202,704 Maintenance & operating supplies 21,243,999 18,880,858 Land held for sale including development costs 307,382 307,382 ------------ ------------ Total inventories 31,663,391 28,916,950 ------------ ------------ Prepaid expenses 4,982,009 3,907,844 ------------ ------------ TOTAL CURRENT ASSETS 59,320,318 47,298,323 ------------ ------------ PROPERTY, PLANT & EQUIPMENT - Net of accumulated depreciation, depletion and amortization of $56,513,032 in 1995 and $51,388,740 in 1994 115,091,872 111,688,573 ------------ ------------ OTHER ASSETS Long-term investments 37,587,570 42,030,507 Investments in real estate 704,987 704,987 Other long-term assets 148,893 147,364 ------------ ------------ 38,441,450 42,882,858 ------------ ------------ TOTAL $212,853,640 $201,869,754 ============ ============
See notes to consolidated financial statements. 1 4 PUERTO RICAN CEMENT COMPANY, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED)
SEPTEMBER DECEMBER 30, 1995 31, 1994 -------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Short-term borrowing $ - $ 2,420,000 Current portion of long-term debt 4,653,571 6,178,571 Accounts payable 4,802,010 4,739,970 Accrued liabilities 4,153,307 2,868,989 Income taxes payable 16,296 664,509 ------------ ------------ TOTAL CURRENT LIABILITIES 13,625,184 16,872,039 ------------ ------------ LONG-TERM LIABILITIES Long-term debt, less current portion 36,795,910 31,696,403 Deferred income taxes 30,610,479 27,722,814 Postretirement benefit liability 2,899,293 2,607,162 ------------ ------------ 70,305,682 62,026,379 ------------ ------------ STOCKHOLDERS' EQUITY Preferred stock, authorized 2,000,000 shares of $5.00 par value each; none issued Common stock authorized 20,000,000 shares of $1.00 par value each; issued 6,000,000 shares, outstanding 5,419,200 shares 6,000,000 6,000,000 Additional paid-in capital 14,367,927 14,367,927 Retained earnings 122,272,935 114,140,497 ------------ ------------ 142,640,862 134,508,424 Less: 580,800 (1994 -505,800) shares of common stock in treasury, at cost 13,718,088 11,537,088 ------------ ------------ STOCKHOLDERS' EQUITY NET 128,922,774 122,971,336 ------------ ------------ TOTAL $212,853,640 $201,869,754 ============ ============
See notes to consolidated financial statements. 2 5 PUERTO RICAN CEMENT COMPANY, INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended September 30, September 30, 1995 1994 1995 1994 ---- ---- ---- ---- Net sales $22,375,156 $23,541,842 $70,262,920 $70,816,788 Revenue from real estate operations 23,574 24,273 78,773 72,821 ----------- ----------- ----------- ----------- 22,398,730 23,566,115 70,341,693 70,889,609 Cost of sales 14,907,359 16,570,557 44,940,955 46,551,693 ----------- ----------- ----------- ----------- Gross margin 7,491,371 6,995,558 25,400,738 24,337,916 Selling, general & administrative expenses 3,161,210 2,957,582 9,498,184 8,362,105 ----------- ----------- ----------- ----------- Income from operations 4,330,161 4,037,976 15,902,554 15,975,811 ----------- ----------- ----------- ----------- Other charges (credits): Interest and financial charges 491,751 592,808 1,540,531 1,748,300 Interest income (637,133) (620,512) (1,848,792) (1,660,513) Other income (3,379) (30,068) (507,418) (91,429) ----------- ----------- ------------ ---------- Total other charges (credits) (148,761) (57,772) (815,679) (3,642) ----------- ----------- ----------- ---------- Income before income tax 4,478,922 4,095,748 16,718,233 15,979,453 Provision for income tax 1,591,094 1,235,965 5,809,253 5,455,017 ----------- ----------- ----------- ---------- Net income $ 2,887,828 $ 2,859,783 $10,908,980 $10,524,436 =========== =========== =========== ========== Income per share: Net income $ 0.53 $ 0.50 $ 2.00 $ 1.82 =========== =========== =========== =========== Average Common Shares Outstanding 5,419,200 5,782,275 5,444,200 5,767,899 =========== =========== =========== ===========
See notes to consolidated financial statements. 3 6 PUERTO RICAN CEMENT COMPANY, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1995 1994 ---- ---- Cash flows from operating activities: Net income $10,908,980 $10,524,436 ----------- ----------- Adjustments to reconcile net income to cash flows from operating activities: Depreciation, depletion and amortization 5,171,504 5,209,702 Accretion of discounts on investments (2,776,972) Provision for deferred income taxes 2,887,665 2,701,501 Postretirement benefit cost 232,130 (98,979) Gain on sale of property & equipment (420,635) Changes in assets and liabilities: Decrease (increase) in notes & accounts receivable 1,942,929 (3,524,448) (Increase) decrease in inventories (2,746,441) 5,844,772 Increase in prepaid expenses (1,074,165) (1,603,743) Increase in accounts payable 125,228 836,111 Increase in accrued liabilities 1,284,318 2,181,148 Decrease in income taxes payable (648,213) (279,440) (Increase) decrease in other long-term assets (1,529) 31,478 ----------- ----------- Total adjustments 3,975,819 11,298,102 ----------- ----------- Cash provided by operations 14,884,799 21,822,538 ----------- ----------- Cash flows from investing activities: Capital expenditures (8,590,712) (8,399,600) Proceeds from sale of property & equipment 436,545 Increase in other short-term investments (8,013,495) (1,074,195) Decrease (increase) in long-term investments 5,600,367 (7,910,210) ----------- ----------- Cash used in investing activities (10,567,295) (17,384,005) ----------- ----------- Cash flows from financing activities: Proceeds from loan 11,199,507 15,438,747 Payment of principal on long-term debt (7,625,000) (10,892,859) Decrease in short-term borrowing (2,420,000) Purchase of treasury stock (2,181,000) (5,414,750) Dividends paid (2,779,730) (2,606,370) ----------- ----------- Cash used in financing activities (3,806,223) (3,475,232) ----------- ----------- Increase in cash and cash equivalents $ 511,281 $ 963,301 =========== =========== Cash and cash equivalents - beginning of year $ 114,702 $ 431,293 Cash and cash equivalents - end of period 625,983 1,394,594 ----------- ----------- Increase in cash and cash equivalents $ 511,281 $ 963,301 =========== ===========
See notes to consolidated financial statements. 4 7 PUERTO RICAN CEMENT COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In the opinion of the Registrant, the accompanying unaudited financial statements contain all adjustments necessary to present fairly its financial position at September 30, 1995 and December 31, 1994, and the results of operations and cash flows for the nine months ended September 30, 1995 and 1994. The results of operations are not necessarily indicative of the results to be expected for the full year. Cash and cash equivalents increased to $8.6 million at September 30, 1995 from $115,000 at December 31, 1994 when the Company decided to shift part of its long-term investments to shorter maturities as part of its strategic plan to purchase two ready-mixed concrete companies. These investments consisted principally of short-term obligations of the U.S. Federal Government or its agencies. Long-term investments were principally obligations of the U.S. Federal Government or its agencies with maturities ranging from more than one year to up to 7 years. All these investments resulted from excess funds generated from operations. Consolidated inventories of $31.7 million at September 30, 1995 were 9% higher than the $28.9 million balance at December 31, 1994. Increases in coal inventories of $877,000, as the result of the timing of shipments received, and in spare parts' inventories of $1.6 million, mostly from equipment related to the mills' conversion project, contributed significantly to this fluctuation. Prepaid expenses increased 27% to approximately $5.0 million as of September 30, 1995 compared with $3.9 million as of December 31, 1994. The increase mainly resulted from prepayments of property tax, municipal license and other taxes scheduled during the second quarter of the year. The balances of these prepayments will be fully amortized at year-end. The decrease of $1.5 million in the current portion of long-term debt reflected the refinancing of the 9.9% dry process conversion loan. Accrued liabilities increased $1.3 million due mainly to accruals related to the Christmas Bonus payable in December to the Company's employees. In September 1995, the Board of Directors of the Company declared a 17 cents per share dividend on its common stock, payable on November 13, 1995 to stockholders of record on October 13, 1995. As of September 30, 1995, the Company had 5,419,200 shares of common stock issued and outstanding. 5 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources Working capital increased from $30.4 million at December 31, 1994 to $45.7 million at September 30, 1995 as the result of the previously mentioned increase in short-term investments. The current ratio increased from 2.8 to 1 at December 31, 1994 to 4.4 to 1 at September 30, 1995. Net cash provided by operations totaled $14.9 million for this period. This cash was principally used to: a) pay $2.8 million in dividends, b) repay $2.4 million in short-term borrowing, c) increase total investments by $2.4 million and d) repurchase, in April 1995, 75,000 shares of the Company's common stock for $2.2 million. During the nine-month period ended on September 30, 1995, the Company invested $8.6 million in new capital additions, including $6.3 million on the mills' conversion project. These capital additions were offset by $5.2 million in depreciation for the period. The net increase in long-term debt (including the current portion) of $3.6 million was due principally to proceeds from loans related to the mills' conversion project. Approximate aggregate maturities of long-term debt for the remainder of 1995 and thereafter are as follows: 1995 $ 2,428,571 1996 4,653,571 1997 4,296,429 1998 8,475,000 1999 and thereafter 21,595,910 ------------ Total $ 41,449,481 ============
Loan agreements with term lenders impose certain restrictions on the Company, including restrictions concerning working capital, indebtedness, dividends, investments and certain advances. The Registrant has available credit facilities with commercial banks for short-term financing and discount of trade paper from customers in the aggregate amount of $20,600,000. The maximum aggregate amount of short-term borrowing outstanding at any month-end during the nine-month period ended on September 30, 1995 was $2,175,000. There was no outstanding balance as of September 30, 1995. -6- 9 Results of Operations Consolidated net sales of $22.4 million for the third quarter of 1995 were 5% lower than net sales of $23.5 million for the same period of 1994. Cement sales in bags declined 8% from 5,230,000 bags during the third quarter of 1994 to 4,790,000 bags for this quarter. This decline was the result of interruptions of construction projects during the latter part of the quarter caused by unfavorable weather conditions, including various hurricane warnings, in the Caribbean region. For the nine-month period ended in September, consolidated net sales decreased less than 1% to $70.3 million in 1995 from $70.8 million for the same period in 1994. Net sales in the paper and bag division for the nine-month period ended September 30, 1995 grew 12% to $7.3 million from $6.5 million for the same period in 1994 due to higher sales in the small bags (pockets) department. However, a major increases in paper costs affected results for the period. Gross margins as a percentage of total sales improved from 29.7% for the third quarter of 1994 to 33.4% for the third quarter of 1995 due to a reduction in the average cost of sales per bag of cement. For the nine-month period, gross margins improved from 34.3 % in 1994 to 36.1% in 1995. The decrease in cost of sales per bag resulted mostly from a significant decline in repairs and maintenance expenses for the period. In 1994 the Company completed major overall maintenance and replacement work on its dry process equipment. Selling, general and administrative expenses for the quarter totaled $3.2 million, an increase of 7% over the third quarter of 1994, resulting primarily from increases in salaries, wages and related fringe benefits. For the nine-month period ended on September 30, 1995, selling, general and administrative expenses increased $1.1 million from the amount in the same period in 1994 because of increased salaries and related fringe benefits expenses, higher pension and other postretirement benefits resulting from changes in the interest rate assumptions used in the actuarial calculations, and higher consulting fees. Interest and financial charges for the nine-month period ended September 30, 1995 decreased 12% to $1.5 million from $1.7 million in the same period in 1994. For the quarter the decrease of $101,000 in interest and financial charges represented a reduction of 17% when compared with the same period of 1994. This reduction resulted principally from lower interest rates on the Company's outstanding loans. Interest capitalized as part of the mills' conversion project totaled $804,000 and $385,000 for the first nine months of 1995 and 1994, respectively. Consolidated interest income increased from $1.6 million for the first nine months of 1994 to $1.8 million for the first nine months of 1995. This increase of 11% resulted from the combination of a higher average amount of investments for the nine-months period and improved interest rates on these investments. The increase of $416,000 in other income for the nine months period consisted principally of a gain on the sale of equipment. -7- 10 Part II. OTHER INFORMATION. Item 6. Exhibits and Reports on Form 8-K b. As previously reported in a Form 8-K to the Securities and Exchange Commission dated October 4, 1995, incorporated herein by reference, the Company entered into agreements to purchase two ready-mixed concrete companies, Concreto Mixto, Inc. and Ready Mix Concrete Inc. The Company is currently conducting the due diligence review procedures and expects to complete them in the last quarter of 1995. -8- 11 SIGNATURES Pursuant to the requirement 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. PUERTO RICAN CEMENT COMPANY, INC. - --------------------------------- (Registrant) Date: 11/01/95 By: /S/ Angel Amaral -------------------- ------------------------------ Angel Amaral Vice President & Controller Date: 11/01/95 By: /S/ Jose O. Torres --------------------- ------------------------------- Jose O. Torres Vice President of Finance & Treasurer -9- EX-27 2 FINANCIAL DATA SCHEDULE FOR NINE MONTHS
5 U.S. DOLLARS 9-MOS DEC-31-1995 SEP-30-1995 1 625,983 8,013,495 15,070,557 1,035,117 31,663,391 59,320,318 171,604,904 56,513,032 212,853,640 13,625,184 36,795,910 6,000,000 0 0 122,922,774 212,853,640 70,262,920 70,341,693 44,940,955 54,439,139 (815,679) 0 0 16,718,233 5,809,253 10,908,980 0 0 0 10,908,980 2.00 0
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