TXI Reports First Quarter Results

DALLAS, Oct. 2, 2013 (GLOBE NEWSWIRE) -- Texas Industries, Inc. (NYSE:TXI) today reported financial results for the quarter ended August 31, 2013. Results for the quarter were a net income of $.4 million or $.01 per share. Results for the quarter ended August 31, 2012 were a loss of $2.7 million or $.08 per share.

EBITDA from continuing operations for the August quarter equaled $37.8 million and EBITDA from continuing operations for the prior year's August quarter equaled $14.1 million. EBITDA for discontinued operations equaled $5.4 million in last year's August quarter. Continuing operations' EBITDA as a percentage of net sales for the August quarter this year and last year equaled 16.2% and 8.1%, respectively.

General Comments

"EBITDA increased $23.7 million on $58.6 million higher net sales," stated Mel Brekhus, Chief Executive Officer. "The improved results reflect the continuing improvement in construction activity in all of our markets."

"It is satisfying to start reaping the benefits from our recent strategic activities. So far, the start-up of our new kiln in central Texas has been the most successful of any I have been involved with in my career and we are realizing the benefits we expected from the expansion of our vertical integration footprint last spring. We continue to focus on doing everything we can to fully participate in the market recoveries under way, including accelerating the resumption of production from the first kiln in central Texas early next calendar year," added Brekhus.

A teleconference will be held October 3, 2013 at 10:00 Central Daylight Time to further discuss quarter results. A real-time webcast of the conference is available by logging on to TXI's website at www.txi.com.

The following is a summary of operating results for our business segments and certain other operating information related to our principal products.

Cement Operations

Three months ended August 31, 2013

Cement operating profit for the three-month periods ended August 31, 2013 and 2012 was $14.0 million and $8.4 million, respectively.

Total segment sales for the three-month period ended August 31, 2013 were $114.7 million compared to $97.2 million for the prior year period. Cement sales increased $17.1 million from the prior year period. Our Texas market area accounted for approximately 70% of cement sales in the current period compared to 67% of cement sales in the prior year period. Average cement prices increased 2% in our Texas market from the prior year period. Average cement prices increased 1% in our California market from the prior year period. Shipments increased 23% in our Texas market area and 8% in our California market area.

Cost of products sold for the three-month period ended August 31, 2013 increased $11.6 million from the prior year period primarily due to higher shipments, depreciation expense related to our new production line at our Hunter cement plant, repair and maintenance costs at our Texas plants, power and fuel costs, and emission allowance credits associated with our compliance with The California Global Warming Solutions Act of 2006, which took effect on January 1, 2013. Cement unit cost of sales decreased 2% from the prior year period as the impact of higher shipments were partially offset by the higher costs including depreciation, repair and maintenance, power and fuel, and emission allowance credits.

Selling, general and administrative expense for the three-month period ended August 31, 2013 increased $0.1 million from the prior year period.

Other income for the three-month period ended August 31, 2013 decreased $0.2 million from the prior year period.

Aggregates Operations

Previously, the aggregates segment included our expanded shale and clay lightweight aggregates operations which has been classified as discontinued operations in the prior period. Therefore, amounts for these operations are not included in the information presented.

Three months ended August 31, 2013

Aggregates operating profit for the three-month periods ended August 31, 2013 and 2012 was $6.6 million and $4.0 million, respectively.

Total segment sales for the three-month period ended August 31, 2013 were $49.2 million compared to $41.0 million for the prior year period. Stone, sand and gravel sales increased $7.6 million from the prior year period on 14% higher shipments and 12% higher average prices.

Cost of products sold for the three-month period ended August 31, 2013 increased $5.2 million from the prior year period primarily due to increased stone, sand and gravel shipments. Stone, sand and gravel unit costs increased 6% from the prior year period primarily due to the effect of geographic product mix partially offset by the effect of higher shipments.

Selling, general and administrative expense for the three-month period ended August 31, 2013 increased $0.5 million from the prior year period primarily due to higher bad debt expense.

Concrete Operations

Three months ended August 31, 2013

Concrete operating profit (loss) for the three-month periods ended August 31, 2013 and 2012 was $6.1 million and $(1.9) million, respectively.

Total segment sales for the three-month period ended August 31, 2013 were $98.5 million compared to $52.0 million for the prior year period. Segment sales increased $46.5 million from the prior year period due to the addition of the 42 ready-mix concrete plants acquired through an asset exchange in the prior year period, which accounts for 65% of the increase in shipments compared to the prior year period.   Pricing improved in virtually every market resulting in 8.5% higher average prices.

Cost of products sold for the three-month period ended August 31, 2013 increased $39.9 million from the prior year period as a result of the 42 additional ready-mix concrete plants acquired through an asset exchange in the prior year period, along with increased shipments from existing locations. Ready-mix concrete unit costs increased 1% from the prior year period primarily due to increased material and delivery costs partially offset by the effects of higher shipments.

Selling, general and administrative expense for the three-month period ended August 31, 2013 increased $0.5 million from the prior year period due to the addition of the 42 ready-mix concrete plants acquired through an asset exchange in the prior year period.

Other income for the three-month period ended August 31, 2013 increased $1.9 million from the prior year period primarily due to higher earnings from our joint venture of $0.5 million and increased gains from the disposal of assets of $1.2 million.

Corporate

Three months ended August 31, 2013

Other income for the three-month period ended August 31, 2013 contains a gain of $1.3 million for a routine sale of real estate.

Selling, general and administrative expense for the three-month period ended August 31, 2013 remained relatively unchanged from the prior year period.

Interest

Interest expense incurred for the three-month period ended August 31, 2013 was $17.4 million. Interest expense incurred for the three-month period ended August 31, 2012 was $17.1 million, of which $9.3 million was capitalized in connection with our Hunter, Texas cement plant expansion project and $7.8 million was expensed.

Income Taxes

Income taxes for the interim periods ended August 31, 2013 and 2012 have been included in the accompanying financial statements on the basis of an estimated annual rate. The tax rate differs from the 35% federal statutory corporate rate primarily due to percentage depletion that is tax deductible, state income taxes and valuation allowances against deferred tax assets. The estimated annualized rate for continuing operations is 29.1% for fiscal year 2014 compared to (1.9)% for fiscal year 2013. We made no income tax payments and received no refunds in the three-month period ended August 31, 2013 and 2012. 

Certain statements contained in this quarterly report are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements may include the words "may," "will," "estimate," "intend," "continue," "believe," "expect," "plan," "anticipate," and other similar words. Such statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, the impact of competitive pressures and changing economic and financial conditions on our business, the cyclical and seasonal nature of our business, the level of construction activity in our markets, abnormal periods of inclement weather, unexpected periods of equipment downtime, unexpected operational difficulties, changes in the cost of raw materials, fuel and energy, changes in cost or availability of transportation, changes in interest rates, the timing and amount of federal, state and local funding for infrastructure, delays in announced capacity expansions, ongoing volatility and uncertainty in the capital or credit markets, the impact of environmental laws, regulations and claims, changes in governmental and public policy, and the risks and uncertainties described in our reports on Forms 10-K, 10-Q and 8-K. Forward-looking statements speak only as of the date hereof, and we assume no obligation to publicly update such statements.

TXI is the largest producer of cement in Texas and a major cement producer in California. TXI is also a major supplier of construction aggregate, ready-mix concrete and concrete products.

EBITDA represents income before interest, income taxes, depreciation and amortization and is presented because we believe it is a useful indicator of our performance and our ability to meet debt service and capital expenditure requirements. It is not, however, intended as an alternative measure of operating results or cash flow from operations as determined in accordance with generally accepted accounting principles. EBITDA is not necessarily comparable to similarly titled measures used by other companies.

See notes to consolidated financial statements. 

See notes to consolidated financial statements.

See notes to consolidated financial statements.

See notes to consolidated financial statements.

CONTACT: T. Lesley Vines, Jr.
         Corporate Controller & Treasurer
         Direct 972.647.6722 E-mail lvines@txi.com