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SEGMENT INFORMATION
6 Months Ended
Sep. 30, 2013
Segment Reporting [Abstract]  
SEGMENT INFORMATION

(M) SEGMENT INFORMATION

Operating segments are defined as components of an enterprise that engage in business activities that earn revenues, incur expenses and prepare separate financial information that is evaluated regularly by our chief operating decision maker in order to allocate resources and assess performance.

We operate in four business segments: Cement, Gypsum Wallboard, Recycled Paperboard, and Concrete and Aggregates, with Cement and Gypsum Wallboard being our principal lines of business. These operations are conducted in the U.S. and include the mining of limestone and the manufacture, production, distribution and sale of Portland cement (a basic construction material which is the essential binding ingredient in concrete), the mining of gypsum and the manufacture and sale of gypsum wallboard, the manufacture and sale of recycled paperboard to the gypsum wallboard industry and other paperboard converters, the sale of readymix concrete and the mining and sale of aggregates (crushed stone, sand, gravel and frac sand). These products are used primarily in commercial and residential construction, public construction projects and projects to build, expand and repair roads and highways and in oil and natural gas extraction.

We operate six cement plants, sixteen cement distribution terminals, five gypsum wallboard plants, including the plant temporarily idled in Bernalillo, N.M., a gypsum wallboard distribution center, a recycled paperboard mill, seventeen readymix concrete batch plant locations, four aggregates processing plant locations and a frac sand processing plant. The principal markets for our cement products are Texas, northern Illinois (including Chicago), the central plains, the Rocky Mountains, northern Nevada, and northern California. Gypsum wallboard and recycled paperboard are distributed throughout the continental U.S, with the exception of the northeast. Concrete and aggregates are sold to local readymix producers and paving contractors in the Austin, Texas area, north of Sacramento, California and the greater Kansas City, Missouri area, while frac sand is currently sold in Texas.

We conduct one of our six cement plant operations, Texas Lehigh Cement Company LP in Buda, Texas, through a Joint Venture. For segment reporting purposes only, we proportionately consolidate our 50% share of the Joint Venture’s revenues and operating earnings, which is consistent with the way management reports the segments within the Company for making operating decisions and assessing performance.

 

We account for intersegment sales at market prices. The following table sets forth certain financial information relating to our operations by segment:

 

     For the Three Months     For the Six Months  
     Ended September 30,     Ended September 30,  
     2013     2012     2013     2012  
     (dollars in thousands)     (dollars in thousands)  

Revenues -

        

Cement

   $ 133,204      $ 78,533      $ 250,904      $ 154,557   

Gypsum Wallboard

     98,960        77,327        194,941        147,547   

Paperboard

     34,642        31,730        66,805        62,059   

Concrete and Aggregates

     30,097        14,257        55,303        27,134   
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total

     296,903        201,847        567,953        391,297   

Less: Intersegment Revenues

     (16,879     (13,272     (32,481     (24,973
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Revenues, including Joint Venture

     280,024        188,575        535,472        366,324   

Less: Joint Venture

     (27,378     (23,916     (55,782     (47,623
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Revenues

   $ 252,646      $ 164,659      $ 479,690      $ 318,701   
  

 

 

   

 

 

   

 

 

   

 

 

 
     For the Three Months     For the Six Months  
     Ended September 30,     Ended September 30,  
     2013     2012     2013     2012  
     (dollars in thousands)     (dollars in thousands)  

Intersegment Revenues -

        

Cement

   $ 2,955      $ 512      $ 4,947      $ 1,079   

Paperboard

     13,650        12,515        26,862        23,437   

Concrete and Aggregates

     274        245        672        457   
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 16,879      $ 13,272      $ 32,481      $ 24,973   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cement Sales Volume (in thousands of tons) -

        

Wholly –owned Operations

     1,182        639        2,161        1,260   

Joint Venture

     252        225        514        452   
  

 

 

   

 

 

   

 

 

   

 

 

 
     1,434        864        2,675        1,712   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

     For the Three Months     For the Six Months  
     Ended September 30,     Ended September 30,  
     2013     2012     2013     2012  
     (dollars in thousands)     (dollars in thousands)  

Operating Earnings -

    

Cement

   $ 32,430      $ 17,442      $ 51,440      $ 27,308   

Gypsum Wallboard

     29,868        16,464        59,504        30,486   

Paperboard

     6,937        7,695        12,616        12,971   

Concrete and Aggregates

     (9     (362     148        (161

Other, net

     317        66        900        (204
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total

     69,543        41,305        124,608        70,400   

Corporate General and Administrative

     (6,060     (5,919     (11,654     (10,674

Acquisition and Litigation Expense

     —          (5,713     —          (6,374
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings Before Interest and Income Taxes

     63,483        29,673        112,954        53,352   

Interest Expense, net

     (4,795     (3,548     (9,750     (7,313
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings Before Income Taxes

   $ 58,688      $ 26,125      $ 103,204      $ 46,039   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cement Operating Earnings -

    

Wholly –owned Operations

   $ 22,683      $ 8,692      $ 33,815      $ 12,090   

Joint Venture

     9,747        8,750        17,625        15,218   
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 32,430      $ 17,442      $ 51,440      $ 27,308   
  

 

 

   

 

 

   

 

 

   

 

 

 

Capital Expenditures -

    

Cement

   $ 2,069      $ 951      $ 5,836      $ 4,947   

Gypsum Wallboard

     602        1,268        1,699        1,464   

Paperboard

     1,364        145        1,901        366   

Aggregates

     5,468        1,556        21,016        1,791   

Concrete

     843        16        1,131        53   

Other

     —          7        —          7   
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 10,346      $ 3,943      $ 31,583      $ 8,628   
  

 

 

   

 

 

   

 

 

   

 

 

 

Depreciation, Depletion and Amortization -

    

Cement

   $ 7,811      $ 3,924      $ 15,648      $ 7,733   

Gypsum Wallboard

     5,261        5,269        10,544        10,546   

Paperboard

     2,171        2,209        4,353        4,419   

Aggregates

     1,277        896        2,556        1,783   

Concrete

     433        268        830        536   

Other, net

     450        217        693        427   
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 17,403      $ 12,783      $ 34,624      $ 25,444   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

     As of  
     September 30,
2013
     March 31,
2013
 
     (dollars in thousands)  

Identifiable Assets -

     

Cement

   $ 759,434       $ 756,158   

Gypsum Wallboard

     415,799         425,866   

Paperboard

     127,391         129,226   

Aggregates

     146,700         108,796   

Concrete

     30,426         27,187   

Corporate and Other

     30,425         29,000   
  

 

 

    

 

 

 
   $ 1,510,175       $ 1,476,233   
  

 

 

    

 

 

 

Segment operating earnings, including the proportionately consolidated 50% interest in the revenues and expenses of the Joint Venture, represent revenues, less direct operating expenses, segment depreciation, and segment selling, general and administrative expenses. Corporate assets consist primarily of cash and cash equivalents, general office assets, miscellaneous other assets and unrecognized tax benefits. The segment breakdown of goodwill is as follows:

 

     As of  
     September 30,      March 31,  
     2013      2013  
     (dollars in thousands)  

Cement

   $ 8,359       $ 8,359   

Gypsum Wallboard

     116,618         116,618   

Paperboard

     7,538         7,538   
  

 

 

    

 

 

 
   $ 132,515       $ 132,515   
  

 

 

    

 

 

 

We perform our annual test of impairment on goodwill during the fourth quarter of our fiscal year. If business conditions in the operating units containing goodwill change substantially during the fiscal year, and we are unable to conclude that an impairment loss is not likely to occur, we will perform impairment tests for those business units during our quarterly periods. At September 30, 2013, we determined that impairment losses are not likely to occur; therefore, no impairment tests were performed during the quarter.

We temporarily idled our gypsum manufacturing facility in Bernalillo, N.M. beginning in December 2009, due to cyclical low gypsum wallboard demand. The carrying value of the Bernalillo plant was $3.0 million, and the carrying value of the equipment was $2.2 million at September 30, 2013, and we continue to depreciate the assets over their estimated useful life. We currently have a strong market position in New Mexico, and our Albuquerque gypsum wallboard facility is operating at close to capacity. We plan on resuming manufacturing at the Bernalillo facility in the future when demand for our products improves. Costs of maintaining the facility during the idling are not significant, and the facility was generating positive cash flow prior to being idled; therefore, we have determined that the value of the plant and equipment is not impaired. We are not currently considering the permanent closure of the Bernalillo facility. Any decision to permanently close Bernalillo would be the result of future changes in the building materials industry in the southwest United States and Rocky Mountain region, including changes in the production capacity or operations of our competitors, demand for gypsum wallboard or general macro-economic conditions, which we do not foresee at the present time. If we were to permanently close the Bernalillo facility, or if our expectations as to its use changed such that we project the future undiscounted cash flows from its operations would be insufficient to recover its carrying value due to the factors described above, or for any other reason, we would recognize impairment at that time. All of our other wallboard facilities are currently generating positive cash flow from operations.

 

Summarized financial information for the Joint Venture that is not consolidated is set out below (this summarized financial information includes the total amount for the Joint Venture and not our 50% interest in those amounts):

 

     For the Three Months
Ended September 30,
     For the Six Months
Ended September 30,
 
     2013      2012      2013      2012  
     (dollars in thousands)      (dollars in thousands)  

Revenues

   $ 54,756       $ 48,057       $ 111,564       $ 95,944   

Gross Margin

   $ 20,641       $ 18,580       $ 37,335       $ 32,489   

Earnings Before Income Taxes

   $ 19,649       $ 17,501       $ 35,568       $ 30,437   

 

     As of  
     September 30,
2013
     March 31,
2013
 
     (dollars in thousands)  

Current Assets

   $ 52,548       $ 53,059   

Non-Current Assets

   $ 42,691       $ 44,120   

Current Liabilities

   $ 18,631       $ 12,913