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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED).
For the fiscal year ended May 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED).
For the transition period from ________________ to ________________
Commission File Number 1-4887
TEXAS INDUSTRIES, INC.
(Exact name of registrant as specified in the charter)
Delaware 75-0832210
(State or other jurisdiction of (I. R. S. Employer Identification No.)
incorporation or organization)
7610 Stemmons Freeway, #200, Dallas, Texas 75247
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214)647-6700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
----------------------- -----------------------------------------
Common stock, Par Value $1.00 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ].
The aggregate market value of the Registrant's Common Stock, $1.00 par
value, held by non-affiliates of the Registrant as of August 5, 1994 was
$422,504,906. As of August 5, 1994, 12,490,749 shares of the Registrant's
Common Stock, $1.00 par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE.
Portions of the Registrant's Annual Report to Shareholders for the year
ended May 31, 1994 included as Exhibit 13 to this Annual Report, are
incorporated by reference into Parts I and II.
Portions of the Registrant's definitive proxy statement for the annual
meeting of shareholders to be held October 18, 1994 (SEC File Number:
1.001-04887), are incorporated by reference into Part III.
TABLE OF CONTENTS
Page
PART I
Item 1. Business.......................................... 3
Item 2. Properties........................................ 7
Item 3. Legal Proceedings................................. 7
Item 4. Submission of Matters to a Vote of
Security Holders................................. 7
PART II
Item 5. Market for the Registrant's Common Stock and
Related Security Holder Matters.................. 8
Item 6. Selected Financial Data........................... 8
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations....................................... 8
Item 8. Financial Statements and Supplementary
Data............................................. 8
Item 9. Disagreements on Accounting and Financial
Disclosure....................................... 8
PART III
Item 10. Directors and Executive Officers of the
Registrant....................................... 9
Item 11. Executive Compensation............................ 9
Item 12. Security Ownership of Certain Beneficial
Owners and Management............................ 10
Item 13. Certain Relationships and Related
Transactions..................................... 12
PART IV
Item 14. Exhibits, Financial Statements, Schedules
and Reports on Form 8-K.......................... 13
-2-
PART I
ITEM 1. BUSINESS
--------
(a) General Development of Business
Texas Industries, Inc. (the "Registrant" or "Company"), incorporated April
19, 1951, directly and through subsidiaries, is a producer of steel and
cement/concrete products for the construction and manufacturing industries. In
November 1985, the Registrant purchased the remaining 50% interest in Chaparral
Steel Company ("Chaparral"). Chaparral sold 5,940,000 shares of its common
stock in a public offering for approximately $83 million in July 1988.
Brookhollow owns commercially zoned land for investment, resale and other real
estate activities.
(b) Financial Information about Industry Segments
For a description of Registrant's industry segments, refer to Notes to
Consolidated Financial Statements entitled "Business Segments" on page 14 of the
Registrant's Annual Report to Shareholders for the year ended May 31, 1994,
incorporated herein by reference.
(c) Narrative Description of Business
STEEL OPERATIONS
Chaparral, an 81 percent-owned subsidiary, has operated a steel mill at
Midlothian, Texas, since 1975. The steel operation follows a market mill
concept which entails the low cost production of a wide variety of products
ranging from reinforcing bar and specialty products to large-sized structural
beams. Chaparral operates two electric arc furnaces with continuous casters
which feed a bar mill, a structural mill and a large beam mill which together
produce a broader array of steel products than a traditional mini-mill.
Finished products produced include beams, merchant quality rounds, special bar
quality rounds, rebar and channels. In fiscal year 1992, commissioning was
completed on the new large beam mill, with a rolling capacity exceeding 400,000
tons per year, which produces structural steel beams up to twenty-four inches
wide. The current rated production capacity of the melting operation exceeds
1.5 million tons per year; the rolling capacity is 2.0 million tons per year.
Approximately 1.4 million tons of finished products were produced in 1994.
Chaparral's primary raw material is scrap steel, which includes shredded
steel. A major portion of the shredded steel requirements are produced by the
shredder operation at the steel mill. The shredded material is primarily
composed of crushed auto bodies purchased on the open market. The supply of
scrap steel is expected to be adequate to meet future requirements.
Chaparral's products are marketed in 44 states and to a limited extent in
Canada, Mexico, Western Europe, China and Japan. Sales are primarily to the
construction industry and to the railroad, defense, automotive, mobile home and
energy industries. Chaparral's principal customers are steel service centers,
steel fabricators, forgers and original equipment manufacturers. No single
customer purchases ten percent or more of the sales volume within any one year.
Sales to affiliates are minimal. Orders are generally filled within 45 days and
are cancelable.
Chaparral competes with steel producers, including foreign producers, on
the basis of price, quality and service. Certain of the foreign and domestic
competitors, including both large integrated steel producers and mini-mills,
have substantially greater assets and larger sales organizations than Chaparral.
Intense sales competition exists for substantially all of Chaparral's products.
-3-
Chaparral's steel mill consumes large amounts of electricity and natural
gas. Electricity is obtained from a local electric utility under an
interruptible supply contract with six-month price adjustments which reflect
increases or decreases in the utility's fuel costs. Natural gas is obtained
from a local gas utility under a supply contract. Chaparral believes that
adequate supplies of both electricity and natural gas are readily available.
Delivery of finished products is accomplished by common-carrier, customer-
owned trucks, rail and barge. Chaparral also operates two distribution
facilities. Currently, Chaparral does not place heavy reliance on franchises,
licenses or concessions.
CEMENT/CONCRETE
The cement/concrete business segment includes the manufacture and sale of
cement, aggregates, ready-mix concrete, concrete pipe, block and brick.
Production and distribution facilities are concentrated in Texas and Louisiana
with markets extending into contiguous states. The Registrant also has certain
patented and unpatented mining claims in Southern California which contain
deposits of limestone.
Cement production facilities are located at two sites in Texas: one at
Midlothian, approximately 25 miles south of Dallas/Fort Worth, which is the
largest cement plant in Texas, and the other at Hunter, approximately 40 miles
south of Austin. The limestone reserves used as the primary raw material are
located on fee-owned property which is adjacent to each of these plants. The
rated annual capacity and estimated minimum reserves of limestone for each of
these plants are as follows:
Annual Rated Productive Estimated Minimum
Plant Capacity - (Tons of Clinker) Reserves - Years
----- ---------------------------- -----------------
Midlothian, Texas 1,200,000 100
Hunter, Texas 750,000 100
The cement plants produced approximately 2.0 million tons of finished
cement in 1994, 1.7 million tons in 1993 and 1.4 million tons in 1992. Annual
shipments of finished cement to outside trade customers were approximately 1.6
million tons in 1994, 1.2 million tons in 1993 and 1.0 million tons in 1992.
Additional shipments of clinker were approximately .4 million tons in 1994, .6
million tons in 1993 and .5 million tons in 1992.
The Registrant's principal marketing area for cement includes Texas,
Louisiana, Colorado, Oklahoma, and New Mexico. Sales offices are maintained
throughout the marketing area and sales are made primarily for use in the
construction industry to numerous customers, no one of which would purchase ten
percent or more of the trade sales volume within any one year. The major volume
of unit trade sales is of standard portland cement, although the Registrant
produces and markets a variety of specialty cements.
The Registrant distributes cement from its plants by rail and truck to 8
distribution terminals located throughout the marketing area.
The Registrant's aggregate business, which includes sand, gravel, crushed
limestone and expanded shale and clay, is conducted from facilities primarily
serving Dallas/Fort Worth, Austin and Houston, Texas, and Alexandria, New
Orleans, Baton Rouge, and Monroe, Louisiana, areas. The following table
summarizes certain information about the Registrant's aggregate production
facilities:
-4-
Estimated Annual Estimated
Type of Number of Productive Minimum
General Location Facility Plants Capacity Reserves - Years
- - -------------------- ------------------ ---------- ------------------- ----------------
North Central Texas Sand & Gravel 3 3.0 million tons 7
North Central Texas Crushed
Limestone 1 4.5 million tons 30
North Central and Expanded Shale
South Texas & Clay 2 1.2 million cu. yds. 25
Louisiana Sand & Gravel 9 5.0 million tons 8
Central Texas Sand & Gravel 1 900,000 tons 18
South Central
Oklahoma Sand & Gravel 1 600,000 tons 13
The reserves shown above are contained on 26,728 acres of land, 12,090
acres of which are owned in fee by the Registrant and the remainder of which are
leased. The expanded shale and clay plants operated at 80 percent of capacity
for 1994 with sales of approximately 928,000 cubic yards. Production for the
remaining aggregate facilities was 79 percent of practical capacity and sales
for the year totaled 10.8 million tons, of which approximately 8.0 million tons
were shipped to outside trade customers.
Sales of these various aggregates are generally related to the level of
construction activity within close proximity of the plant location. The cost of
transportation limits the marketing of these products to the areas relatively
close to the plant sites. These products are marketed by the Registrant's sales
organization located in the areas served by the plants and are sold to numerous
customers, no one of which would be considered significant to the Registrant's
business. The distribution of these products is provided to trade customers
principally by contract and customer-owned haulers, and a limited amount of
these products is distributed by rail for affiliated usage.
The Registrant's ready-mix concrete operations are located in three areas
in Texas (Dallas/Fort Worth, East Texas and Houston) and four areas in Louisiana
(New Orleans, Alexandria, Shreveport and Monroe). The following table
summarizes various information concerning these facilities:
Location Number of Plants Number of Trucks
-------- ---------------- ----------------
Texas 18 176
Louisiana 11 89
The plants listed above are located on sites owned and leased by the
Registrant. The Registrant manufactures and supplies a substantial amount of
the cement and aggregates used by the ready-mix plants with the remainder being
purchased from outside suppliers. Ready-mix concrete is sold to various
contractors in the construction industry, no one of which would be considered
significant to the Registrant's business.
-5-
The remainder of the major products manufactured and marketed by the
Registrant within the concrete products segment are summarized by location
below:
Location Products Produced/Sold
-------- ----------------------
Dallas/Fort Worth, Texas Concrete block and brick
Sakrete and related products
Houston, Texas Sakrete and related products
Corpus Christi, Texas Concrete block and pipe
New Orleans, Louisiana Concrete pipe
Alexandria, Louisiana Concrete block and brick
Concrete pipe
Shreveport, Louisiana Concrete block and pipe
Sakrete and related products
Bridge Spans
Athens, Texas Clay Brick
The plant sites for the above products (except for one that is leased) are
owned by the Registrant. The products are marketed by the Registrant's sales
force in each of these locations, and are primarily delivered by trucks owned by
the Registrant. Because the cost of delivery is significant to the overall cost
of most of these products, the market area is generally restricted to within
approximately one hundred miles of the plant locations. These products are sold
to various contractors, owners and distributors, none of which would be
considered significant to the Registrant's business.
Currently, Registrant does not place heavy reliance on patents, franchises,
licenses or concessions related to its cement/concrete segment. The
Registrant's cement plants and expanded shale and clay plants can burn either
coal, natural gas or other high BTU fossil fuels.
In most of the Registrant's principal markets for concrete products, the
Registrant competes vigorously with at least three other vertically integrated
concrete companies. The Registrant believes that it is a significant
participant in each of the Texas and Louisiana concrete products markets. The
principal methods of competition in concrete products markets are quality and
service at competitive prices.
The Registrant is involved in the development of its surplus real estate
and real estate acquired for development of high quality industrial, office and
multi-use parks in the metropolitan areas of Dallas/Fort Worth and Houston,
Texas and Richmond, Virginia.
ENVIRONMENTAL MATTERS
The operations of the Company and its subsidiaries are subject to various
federal and state environmental laws and regulations. Under these laws the U.
S. Environmental Protection Agency ("EPA") and agencies of state government have
the authority to promulgate regulations which could result in substantial
expenditures for pollution control and solid waste treatment. Three major areas
regulated by these authorities are air quality, water quality and hazardous
waste management. Pursuant to these laws and regulations emission sources at
the Company's facilities are regulated by a combination of permit limitations
and emission standards of statewide application, and the Company believes that
it is in substantial compliance with its permit limitations and applicable laws
and regulations.
-6-
Chaparral's steel mill generates, in the same manner as other steel mills
in the industry, electric arc furnace ("EAF") dust that contains lead, chromium
and cadmium. The EPA has listed this EAF dust, which Chaparral collects in
baghouses, as a hazardous waste. Chaparral has contracts with reclamation
facilities in the United States and Mexico pursuant to which such facilities
receive the EAF dust generated by the steel mill and recover the metals from the
dust for reuse, thus rendering the dust non-hazardous. In addition, Chaparral
is continually investigating alternative reclamation technologies and has
implemented processes for diminishing the amount of EAF dust generated.
Under a permit, the Company substitutes recycled high BTU liquid waste
materials for fossil fuel, principally coal, at its Midlothian cement plant.
Use of these recycled materials not only diminishes the amount of air emissions
as compared to coal but contributes to the reduction of waste and to the
conservation of depleting natural resources. The Company's part B permit
application to utilize these recycled materials is currently being processed by
the Texas Natural Resource Conservation Commission.
The Company intends to comply with all legal requirements regarding the
environment but since many of these requirements are not fixed, presently
determinable, or are likely to be affected by future legislation or rule making
by government agencies, it is not possible to accurately predict the aggregate
future costs or benefits of compliance and their effect on the Company's
operations, future net income or financial condition. Notwithstanding such
compliance, if damage to persons or property or contamination of the environment
has been or is caused by the conduct of the Company's business or by hazardous
substances or wastes used in, generated or disposed of by the Company, the
Company may be held liable for such damages and be required to pay the cost of
investigation and remediation of such contamination. The amount of such
liability could be material. Changes in federal or state laws, regulations or
requirements or discovery of unknown conditions could require additional
expenditures by or provide additional benefits to the Company.
OTHER ITEMS
The Registrant provides products for the construction industry. It is not
uncommon for the Registrant to report a loss from its cement/concrete operations
in the quarter ending February due to adverse weather conditions. The dollar
amount of Registrant's backlog of orders is not considered material to an
understanding of the business of the Registrant.
Registrant's enterprise employs approximately 2,700 persons.
ITEM 2. PROPERTIES
----------
The information required by this item is included in the answer to Item 1.
ITEM 3. LEGAL PROCEEDINGS
-----------------
There are no pending legal proceedings against the Registrant and
subsidiaries which in management's judgement (based upon the opinion of counsel)
would have a material adverse effect on the consolidated financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
None
-7-
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDERS
---------------------------------------------------------------------
MATTERS
-------
Common Stock market prices, dividends and certain other items as shown in
the "Quarterly Financial Information" located on page 14 of the Registrant's
Annual Report to Shareholders for the year ended May 31, 1994, are incorporated
herein by reference. The restriction on the payment of dividends described in
the Notes to Consolidated Financial Statements entitled "Long-Term Debt" on
pages 11 and 12 of the Registrant's Annual Report to Shareholders for the year
ended May 31, 1994, is incorporated herein by reference. At the July 1990 Board
of Directors' meeting, the Directors voted to reduce the quarterly cash dividend
from twenty cents per share to five cents per share.
ITEM 6. SELECTED FINANCIAL DATA
-----------------------
The "Selected Financial Data" on Page 3 of the Registrant's Annual Report
to Shareholders for the year ended May 31, 1994, is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
The "Discussion of Results of Operations & Financial Condition" on pages 4
through 6 of the Registrant's Annual Report to Shareholders for the year ended
May 31, 1994, is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------
The following Consolidated Financial Statements of the Registrant and its
subsidiaries, included in the Registrant's Annual Report to Shareholders for the
year ended May 31, 1994, are incorporated herein by reference:
Consolidated Balance Sheets - May 31, 1994 and 1993
Consolidated Statements of Income - Years ended May 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows - Years ended May 31, 1994, 1993 and
1992
Consolidated Statements of Shareholders' Equity - Years ended May 31, 1994,
1993 and 1992
Notes to Consolidated Financial Statements
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
-----------------------------------------------------
None
-8-
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------
Reference is made to "Election of Directors" on Page 3 of Registrant's
Proxy Statement for the Annual Meeting of Shareholders to be held October 18,
1994. Information on executive officers of the Registrant is presented below:
Positions with Registrant, Other
Name Age Employment During Last Five (5) Years
- - ---- --- -------------------------------------
Robert D. Rogers 58 President and Chief Executive Officer and Director
Melvin G. Brekhus 45 1989, Technical Manager, Missouri Portland Cement
Co. and Davenport Cement; 1989 to 1991, Divisional
Vice President - Cement Production; 1991 to present,
Vice President - Cement Production
Brooke E. Brewer 52 Vice President - Human Resources
Roman J. Figueroa 48 1989, Manager, Texas Aggregates Production; 1989
to 1991, Divisional Vice President - Texas
Aggregates; 1991 to present, Vice President -
Aggregates
Richard M. Fowler 51 Senior Vice President - Finance, Chaparral
Steel Company; 1989 to present,
Vice President - Finance and Chief Financial Officer
James R. McCraw 50 1989 to 1991, Controller; 1991 to present,
Vice President - Controller
Robert C. Moore 60 Vice President - General Counsel and Secretary
Burl W. Ruth 46 1989 to 1991, Divisional Vice President - South
Texas Concrete; 1991 to present, Vice President -
Concrete
Tommy A. Valenta 45 1989 to 1991, Divisional Vice President - North
Texas Ready Mix; 1991 to present, Vice President -
North Texas Concrete/Cement Marketing
Kenneth R. Allen 37 1989 to 1990, Corporate Financial Manager; 1990 to
1991, Director of Investor Relations; 1991 to present,
Treasurer
ITEM 11. EXECUTIVE COMPENSATION
----------------------
Reference is made to "Executive Compensation" and "Report of the
Compensation Committee on Executive Compensation" on pages 6 through 11 of the
Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held
October 18, 1994.
-9-
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners
The following table furnishes information concerning all persons known to
the Company to beneficially own 5% or more of any class of voting stock of the
Company as of August 5, 1994.
Beneficial Ownership Table
- - --------------------------
Amount and Nature
Name and Address of Title of of Percent
Beneficial Owner Security Beneficial Ownership of Class
----------------------- -------- -------------------- --------
Co-Steel, Inc. Common Stock 1,216,652 shares (1) 9.7%
Scotia Plaza
40 King Street West, Suite 5010
P. O. Box 130
Toronto, Ontario, Canada M5H3Y2
Dietche & Field Advisors, Inc. Common Stock 814,000 shares (2) 6.5%
437 Madison Avenue
New York, NY 10022
FMR Corp. Common Stock 1,245,900 shares (3) 10.0%
82 Devonshire Street
Boston, Massachusetts 02109
Trimark Investment Management, Inc. Common Stock 752,835 shares (4) 6.0%
Scotia Plaza
40 King Street West, Suite 5200
Toronto, Ontario, Canada M5H3Z3
Gerald R. Heffernan $5 Cumulative 2,500 shares 41.8%
22 St. Clair Avenue E., Suite 1700 Preferred Stock
Toronto, Ontario, Canada M4T2S3
Sally M. Eldredge (Mrs.) $5 Cumulative 315 shares 5.3%
P. O. Box 539 Preferred Stock
Newport, New Hampshire 03773
KINSAT $5 Cumulative 551 shares 9.2%
Bankers Trust Co. Preferred Stock
P. O. Box 704
Church Street Station
New York, New York 10015
John C. McCrillis $5 Cumulative 315 shares 5.3%
P. O. Box 458 Preferred Stock
Newport, New Hampshire 03773
Merrill Lynch, Pierce, $5 Cumulative 1,213 shares 20.2%
Fenner and Smith, Inc. Preferred Stock
P. O. Box 12006
Newark, New Jersey 07101
- - ----------------------------
-10-
Beneficial Ownership Table Footnotes
(1) Robert D. Rogers, Gordon E. Forward and Richard M. Fowler have sole
voting power as co-trustees under a Voting Trust which expires
August 29, 1995, and Co-Steel, Inc. has sole dispositive power.
(2) Based on Schedule 13G dated March 11, 1994 which indicates that
Dietche & Field Advisors, Inc. has sole voting and dispositive power
over 814,000 shares.
(3) Based on Schedule 13G dated June 6, 1994 which indicates that FMR
Corp. has sole voting power over 48,900 shares and sole dispositive
power over 1,245,900 shares.
(4) Based on Amendment 4 to Schedule 13G dated February 12, 1993 which
indicates that Trimark Investment Management, Inc. has sole voting
and dispositive power over 752,835 shares.
(b) Security Ownership of Management
The following table sets forth as of August 5, 1994, the approximate
number of shares of Common Stock and common stock of Chaparral Steel Company
("Chaparral") beneficially owned by each director, by each executive officer
named in the Summary Compensation Table on page 6 of the Registrant's Proxy
Statement for the Annual Meeting of Shareholders and by all directors and
executive officers of the Company as a group.
Management Ownership Table
- - --------------------------
COMPANY CHAPARRAL
COMMON SHARES COMMON SHARES
------------------------ ----------------------
Beneficially Beneficially
Owned ** %(1) Owned** %(2)
----------- ------- ------------ -------
Robert Alpert........................................ 3,555 (3) * 1,000 *
Melvin G. Brekhus.................................... 5,112 (3) * None *
Gordon E. Forward.................................... 52,974 (3) * 89,100 (4) *
Richard M. Fowler.................................... 41,332 (3) * 36,100 (4) *
Richard I. Galland................................... 8,807 (3) * 3,000 *
Gerald R. Heffernan(5)(6)............................ 111,000 (3) * None *
Robert C. Moore...................................... 13,167 (3) * 16,600 (4) *
Ralph B. Rogers(7)................................... 32,434 * 5,000 *
Robert D. Rogers(8).................................. 149,320 (3) 1.2% 106,800 (4) *
Tommy A. Valenta..................................... 4,950 (3) * None *
Ian Wachtmeister(9).................................. 3,371 (3) * None *
All Directors and Executive Officers as a Group (10
Persons)............................................. 451,503 (3) 3.6% 259,650 (4) *
- - -----------------------
-11-
Management Ownership Table Footnotes
* Represents less than one percent (1%) of the total number of shares
outstanding.
** Except as indicated in the notes below, each person has the sole voting
and investment authority with respect to the shares set forth in the
above table.
(1) Based on the sum of (i) 12,490,749 shares of Common Stock, which on
August 5, 1994, was the approximate number of shares outstanding, and
(ii) the number of shares subject to options exercisable by such
person(s) within 60 days of such date.
(2) Based on the sum of (i) 29,679,900 shares of common stock, which on
August 5, 1994, was the approximate number of shares outstanding, and
(ii) the number of shares subject to options exercisable by such
person(s) within 60 days of such date.
(3) Includes, with respect to such person(s), shares of Common Stock
subject to options exercisable within 60 days of August 5, 1994, as
follows: Robert D. Rogers, 20,000 shares; Robert Alpert, 1,000 shares;
Melvin G. Brekhus, 4,600 shares; Gordon E. Forward, 5,490 shares;
Richard M. Fowler, 9,300 shares; Richard I. Galland, 1,000 shares;
Gerald R. Heffernan, 1,000 shares; Robert C. Moore, 8,300 shares; Tommy
A. Valenta, 4,600 shares; Ian Wachtmeister, 1,000 shares; and all
Directors and Executive Officers as a group, 74,490 shares.
(4) Includes, with respect to such person(s), shares of common stock
subject to options exercisable within 60 days of August 5, 1994 as
follows: Gordon E. Forward, 74,000 shares; Richard M. Fowler, 35,000
shares; Robert C. Moore, 16,000 shares; Robert D. Rogers, 66,000
shares; and all Directors and Executive Officers as a group, 193,000
shares.
(5) Mr. Heffernan owns 2,500 shares of $5 Preferred Stock approximately
41.8% of the class outstanding. See Security Ownership of Certain
Beneficial Owners and Management.
(6) The wife of Mr. Heffernan owns 971 shares of Common Stock as to which
he disclaims beneficial ownership.
(7) The wife of Mr. Rogers owns 5,214 shares of Common Stock, as to which
he disclaims beneficial ownership.
(8) The wife of Mr. Rogers owns 4,000 shares of Chaparral common stock, as
to which he disclaims beneficial ownership.
(9) Includes 100 shares of Common Stock owned by the wife of Mr.
Wachtmeister.
(c) Changes in Control
Registrant knows of no contractual arrangements which may at a subsequent
date result in a change in control of the Registrant.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
None
-12-
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
-----------------------------------------------------------------
(a)(1) and (2) The response to this portion of Item 14 is submitted as a
separate section of this report.
(a)(3) Listing of Exhibits
3. Articles of Incorporation (previously filed and incorporated herein by
reference)
4. Instruments defining rights of security holders (previously filed and
incorporated herein by reference)
The Registrant agrees to furnish to the Commission, upon request, copies of
all instruments with respect to long-term debt not being registered where the
total amount of securities authorized thereunder does not exceed 10% of the
total assets of Registrant and its subsidiaries on a consolidated basis.
11. Statement re: computation of per share earnings
13. Annual report to security holders
Registrant's annual report to security holders for its last fiscal year,
except for those portions thereof which are expressly incorporated by reference
in this filing, is furnished for the information of the Commission and is not to
be deemed "filed" as part of this filing. Since the financial statements in the
report have been incorporated by reference in this filing, the accountant's
certificate is manually signed in the signed copy of this filing.
21. Subsidiaries of the Registrant
23. Consent of Independent Auditors
24. Power of attorney for certain members of the Board of Directors
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended May 31, 1994.
(c) Exhibits
The response to this portion of Item 14 is submitted as a separate section
of this report.
(d) Financial Statement Schedules
The response to this portion of Item 14 is submitted as a separate section
of this report.
-13-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the issuer has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on the 26th day of August,
1994.
TEXAS INDUSTRIES, INC.
By /s/ Robert D. Rogers
----------------------------------
Robert D. Rogers, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Robert D. Rogers President and Chief August 26, 1994
- - ------------------------- Executive Officer
Robert D. Rogers (Principal Executive Officer)
/s/ Richard M. Fowler Vice President - Finance and August 26, 1994
- - ------------------------- Chief Financial Officer
Richard M. Fowler (Principal Financial Officer)
/s/ James R. McCraw Vice President - Controller August 26, 1994
- - ------------------------- (Principal Accounting Officer)
James R. McCraw
Director August 26, 1994
- - -------------------------
Robert Alpert
/s/ Gordon E. Forward* Director August 26, 1994
- - -------------------------
Gordon E. Forward
/s/ Richard I. Galland* Director August 26, 1994
- - -------------------------
Richard I. Galland
/s/ Gerald R. Heffernan* Director August 26, 1994
- - -------------------------
Gerald R. Heffernan
/s/ Ralph B. Rogers* Director August 26, 1994
- - -------------------------
Ralph B. Rogers
/s/ Robert D. Rogers Director August 26, 1994
- - -------------------------
Robert D. Rogers
/s/ Ian Wachtmeister* Director August 26, 1994
- - -------------------------
Ian Wachtmeister
* BY /s/ James R. McCraw Vice President - Controller August 26, 1994
-----------------------
James R. McCraw
-14-
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(1) and (2), (c) and (d)
YEAR ENDED MAY 31, 1994
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
DALLAS, TEXAS
LIST OF FINANCIAL STATEMENTS AND SCHEDULES
FINANCIAL STATEMENT SCHEDULES
INDEX TO EXHIBITS
CERTAIN EXHIBITS
F - 1
FORM 10-K
ITEM 14(a)(1) and (2) and ITEM 14(d)
LIST OF FINANCIAL STATEMENTS AND SCHEDULES
The following consolidated financial statements of Texas Industries, Inc.,
and subsidiaries included in the annual report of the Company to its
shareholders for the year ended May 31, 1994, are incorporated herein by
reference:
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets - May 31, 1994 and 1993
Consolidated Statements of Income - Years ended May 31, 1994, 1993 and
1992.
Consolidated Statements of Cash Flows - Years ended May 31, 1994, 1993 and
1992.
Consolidated Statements of Shareholders' Equity - Years ended May 31, 1994,
1993 and 1992.
Notes to Consolidated Financial Statements
Report of Independent Auditors
The following consolidated financial statement schedules for the years
ended May 31, 1994, 1993 and 1992 are submitted herewith:
Schedule III - Financial information of Registrant
Schedule V - Property, plant and equipment
Schedule VI - Accumulated depreciation, depletion and amortization
of property, plant and equipment.
Schedule IX - Short-term borrowings
Schedule X - Supplementary income statement information
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions, or are inapplicable, and therefore,
have been omitted.
F - 2
SCHEDULE III - FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEETS
TEXAS INDUSTRIES, INC.*
May 31,
1994 1993
---- ----
In thousands
ASSETS
CURRENT ASSETS
Cash and temporary investments $ 28,197 $ 17,777
Notes and accounts receivable 33,369 40,518
Inventories 17,949 19,668
Prepaid expenses 18,766 17,022
-------- --------
TOTAL CURRENT ASSETS 98,281 94,985
OTHER ASSETS
Investment in and net advances to
subsidiaries 265,456 280,405
Other assets 18,138 11,906
-------- --------
283,594 292,311
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements 58,576 46,153
Buildings 24,097 14,495
Machinery and equipment 279,670 210,974
-------- --------
362,343 271,622
Less allowances for depreciation and depletion 260,545 203,038
-------- --------
101,798 68,584
-------- --------
$483,673 $455,880
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 13,902 $ 18,875
Accrued interest, wages and other items 10,100 9,259
Current portion of long-term debt 12,820 6,448
-------- --------
TOTAL CURRENT LIABILITIES 36,822 34,582
LONG-TERM DEBT 72,834 126,255
DEFERRED FEDERAL INCOME TAXES AND OTHER CREDITS 21,346 12,532
SHAREHOLDERS' EQUITY
Preferred stock 598 598
Common stock, $1 par value 12,534 11,100
Additional paid-in capital 265,790 220,776
Retained earnings 75,511 52,933
Cost of common shares in treasury (1,762) (2,896)
-------- --------
352,671 282,511
-------- --------
$483,673 $455,880
======== ========
* Registrant only (solely parent company) with subsidiaries carried on the
equity method. These statements are furnished to satisfy disclosure
requirements due to the percentage of consolidated net assets which reside in
subsidiary companies and which are subject to third party restrictions.
F - 3
SCHEDULE III - FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF INCOME
TEXAS INDUSTRIES, INC.*
Year Ended May 31,
1994 1993 1992
---- ---- ----
In thousands
NET SALES $248,325 $197,829 $178,988
COSTS AND EXPENSES (INCOME)
Cost of products sold 198,163 162,022 160,642
Selling, administrative and general 26,569 24,052 23,934
Interest 12,980 16,621 16,821
Other income (8,613) (7,081) (19,731)
-------- -------- --------
229,099 195,614 181,666
-------- -------- --------
INCOME (LOSS) BEFORE THE FOLLOWING ITEMS 19,226 2,215 (2,678)
INCOME TAXES
Expense (benefit) 3,872 657 (1,792)
Change in statutory federal tax rate 268 -- --
-------- -------- --------
4,140 657 (1,792)
-------- -------- --------
INCOME (LOSS) FROM OPERATIONS 15,086 1,558 (886)
EQUITY IN EARNINGS OF SUBSIDIARIES
Income (loss) from continuing operations
of subsidiaries 10,665 (500) 2,806
-------- -------- --------
NET INCOME $ 25,751 $ 1,058 $ 1,920
======== ======== ========
* Registrant only (solely parent company) with subsidiaries carried on the
equity method. These statements are furnished to satisfy disclosure
requirements due to the percentage of consolidated net assets which reside in
subsidiary companies and which are subject to third party restriction.
F - 4
SCHEDULE III - FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOWS
TEXAS INDUSTRIES, INC.*
Year ended May 31,
1994 1993 1992
---- ---- ----
In thousands
NET CASH PROVIDED BY OPERATIONS $39,178 $21,609 $ 3,597
INVESTING ACTIVITIES:
Capital expenditures (14,814) (7,591) (6,627)
Proceeds from disposition of assets 2,454 377 18,040
Purchase of investments (2,017) (4,660) (3,796)
Proceeds from investments 8,374 2,084 --
Cash surrender value-insurance (820) 5,555 (1,839)
Other - net (7,417) (2,151) (3,365)
------- ------- -------
Net cash (used) provided by investing (14,240) (6,386) 2,413
FINANCING ACTIVITIES:
Proceeds of long-term borrowing 71,257 600 100
Debt retirements (73,505) (6,146) (5,674)
Dividends paid (2,308) (2,228) (2,214)
Other - net (3,629) (1,439) (1,445)
------- ------- -------
Net cash used by financing (8,185) (9,213) (9,233)
------- ------- -------
Increase (decrease) in cash 16,753 6,010 (3,223)
Cash at beginning of year 11,444 5,434 8,657
------- ------- -------
Cash at end of year 28,197 11,444 5,434
Temporary investments -- 6,333 3,796
------- ------- -------
Cash and temporary investments at end of year $28,197 $17,777 $ 9,230
======= ======= =======
* Registrant only (solely parent company) with subsidiaries carried on the
equity method. These statements are furnished to satisfy disclosure
requirements due to the percentage of consolidated net assets which reside in
subsidiary companies and which are subject to third party restriction.
F - 5
SCHEDULE III - FINANCIAL INFORMATION OF REGISTRANT
NOTES TO FINANCIAL INFORMATION OF REGISTRANT
LONG-TERM DEBT
Long-term debt is comprised of the following:
1994 1993
---- ----
In thousands
Secured Debt:
Senior note due through 1999,
interest rate at 6.69% (2% over LIBOR) $ 71,000 $ --
Purchase money obligations
interest rates from 7% to 10% 842 268
Unsecured Debt:
Pollution control bonds, due through
2007, interest rate 4.5% to 10% 11,366 10,655
12-7/8% subordinated debentures due
1995, effective rate 13%, less
unamortized discount -- 49,924
9% convertible subordinated
debentures due 2008 -- 49,965
Senior notes, due through 1994,
interest rate at 5/8% over CD rate -- 18,750
Other, interest rates from 7.5% to 10% 2,446 3,141
-------- --------
85,654 132,703
Less current maturities 12,820 6,448
-------- --------
$ 72,834 $126,255
======== ========
Annual maturities of long-term debt for each of the five succeeding years
are $12.8, $16.6, $16.5, $16.4, and $15.9 million.
The Company has available a bank line of credit of $25 million of which $4.4
million has been utilized to support letters of credit. This line is due to
expire in November 1996. The interest rate charged on borrowings is 1.75% over
LIBOR. Commitment fees at an annual rate of 1/2 of 1% are paid on the unused
portion of this line.
As a result of a sinking fund payment and a notice of redemption issued by
the Company, holders of $46.9 million of the Company's outstanding 9%
convertible subordinated debentures due in 2008 converted such debentures into
1,432,296 shares of the Company's common stock at $32.74 per share.
DIVIDENDS FROM SUBSIDIARIES
The Company received cash dividends from subsidiaries of $6.4 million in
1994, and $4.8 million in 1993 and 1992.
RESTRICTED TRANSFER OF ASSETS FROM SUBSIDIARIES
A subsidiary has loan covenants that restrict the transfer of assets by
loans, advances or dividends to the parent. These covenants require that the
subsidiary maintain minimum levels of working capital, restrict loans and the
percentage of net income that can be distributed as dividends. The restricted
net assets were $188.1 million and the restricted retained earnings were $35.7
million at May 31, 1994. The retained earnings of subsidiaries included in the
consolidated retained earnings at May 31, 1994, were $24.5 million.
F - 6
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
In thousands
Balance at Other Balance at
Beginning Additions Changes End of
Classification of Period at Cost Retirements Add (Deduct) Period
- - --------------------------- ---------- --------- ----------- ----------- ----------
Year ended May 31, 1994:
Land and land improvements $ 86,697 $ 4,051 $ 63 $ $ 90,685-A
Buildings 51,533 324 81 51,776
Machinery and equipment 617,411 10,341 3,990 9 -D 623,771
Capital leases 15,156 90 462 14,784
Mobile equipment 65,276 2,578 6,683 (9)-D 61,162
Office furniture & fixtures 7,650 1,602 447 8,805
Leasehold improvements 288 21 (56)-B 253
Construction in progress 14,745 4,298-C 19,043
-------- ------- ------- ------- --------
$858,756 $23,305 $11,726 $ (56) $870,279
======== ======= ======= ======= ========
Year ended May 31, 1993:
Land and land improvements $ 86,483 $ 589 $ 372 $ (3)-D $ 86,697-A
Buildings 51,435 224 126 51,533
Machinery and equipment 609,981 8,567 1,140 3 -D 617,411
Capital leases 15,196 57 97 15,156
Mobile equipment 64,611 3,558 1,525 (1,368)-D 65,276
Office furniture & fixtures 7,165 712 227 7,650
Leasehold improvements 269 77 (58)-B 288
Construction in progress 10,595 4,150-C 14,745
-------- ------- ------- ------- --------
$845,735 $17,934 $ 3,487 $(1,426) $858,756
======== ======= ======= ======= ========
Year ended May 31, 1992:
Land and land improvements $ 90,101 $ 1,124 $ 4,742 $ $ 86,483-A
Buildings 52,376 937 1,878 51,435
Machinery and equipment 602,051 15,196 7,266 609,981
Capital leases 16,665 241 1,710 15,196
Mobile equipment 70,546 2,626 8,561 64,611
Office furniture & fixtures 7,663 648 1,146 7,165
Leasehold improvements 303 127 25 (136)-B 269
Construction in progress 9,504 1,094-C 3 10,595
-------- ------- ------- ------- --------
$849,209 $21,993 $25,331 $ (136) $845,735
======== ======= ======= ======= ========
() - Indicates negative amount or deduction.
Note A - Includes land subject to depletion in the amount of $21,055,000 in
1994, $20,255,000 in 1993 and $19,687,000 in 1992.
Note B - Amortization charged against income.
Note C - Net change (additions less completions).
Note D - Miscellaneous reclassifications.
Note E - The rates generally used in computing provision for depreciation
and depletion are as follows:
Land improvements 2.5% to 33.3%
Buildings 2.5% to 33.3%
Machinery and equipment 3.33% to 33.3%
Capital leases 6.66% to 33.3%
Mobile equipment 6.66% to 33.3%
Office furniture and fixtures 5% to 33.3%
Depletable assets $0.00112 to $1.599 per ton of sand, gravel, etc.
extracted
F - 7
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
In thousands
Balance at Other Balance at
Beginning Additions Changes End of
Classification of Period at Cost Retirements Add (Deduct) Period
- - ---------------------------- --------- ---------- ----------- ------------ ----------
Year ended May 31, 1994:
Land and land improvements $ 35,391 $ 3,337 $ 19 $ $ 38,709-A
Buildings 23,893 1,761 81 25,573
Machinery and equipment 356,699 34,582 3,854 9 -B 387,436
Capital leases 14,743 186 462 14,467
Mobile equipment 56,263 2,942 6,518 (9)-B 52,678
Office furniture & fixtures 6,209 761 447 6,523
-------- ------- ------- ------- --------
$493,198 $43,569 $11,381 $ -- $525,386
======== ======= ======= ======= ========
Year ended May 31, 1993:
Land and land improvements $ 32,731 $ 2,953 $ 293 $ $ 35,391-A
Buildings 22,223 1,790 120 23,893
Machinery and equipment 322,532 35,248 1,081 356,699
Capital leases 14,635 206 98 14,743
Mobile equipment 54,935 3,469 1,494 (647)-B 56,263
Office furniture & fixtures 5,639 740 170 6,209
-------- ------- ------- ------- --------
$452,695 $44,406 $ 3,256 $ (647) $493,198
======== ======= ======= ======= ========
Year ended May 31, 1992:
Land and land improvements $ 29,804 $ 3,379 $ 452 $ $ 32,731-A
Buildings 21,665 1,868 1,310 22,223
Machinery and equipment 293,131 35,229 5,828 322,532
Capital leases 16,172 173 1,710 14,635
Mobile equipment 57,088 4,806 6,959 54,935
Office furniture & fixtures 5,993 733 1,087 5,639
-------- ------- ------- ------- --------
$423,853 $46,188 $17,346 $ $452,695
======== ======= ======= ======= ========
Note A - Includes depletion on land of $8,404,000 in 1994, $7,704,000 in 1993
and $7,168,000 in 1992.
Note B - Miscellaneous reclassifications.
F - 8
SCHEDULE IX - SHORT-TERM BORROWINGS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
In thousands
Maximum Average Weighted
Weighted Amount Amount Average
Balance Average Outstanding Outstanding Interest
Category of Aggregate at End Interest During the During the Rate During
Short-Term Borrowings of Period Rate Period Period the Period
- - -------------------------- --------- ------------ ----------- -------------- ---------------
Year ended May 31, 1994:
CHAPARRAL STEEL COMPANY
Borrowings from banks $15,000 4.34% $20,000 $7,250(1) 4.36%(2)
Year ended May 31, 1993:
CHAPARRAL STEEL COMPANY
Borrowings from banks -0- 6.21% 4,000 -0-(1)(3) N/A(2)(3)
Year ended May 31, 1992:
CHAPARRAL STEEL COMPANY
Borrowings from banks -0- 6.51% 13,000 4,500(1) 7.12%(2)
(1) Computed on total of each month's ending balance divided by 12.
(2) Computed by dividing interest expense for the period by the average amount
outstanding during the period.
(3) No borrowings were outstanding at the month-ends during the period.
F - 9
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
In thousands
Year ended May 31,
1994 1993 1992
------- ------- -------
Maintenance and repairs $81,403 $85,246 * $84,886 *
Depreciation and amortization of
intangible assets and commissioning costs 5,336 5,336 3,324
Taxes, other than payroll and income taxes:
Property & miscellaneous taxes 11,630 10,179 9,540
Franchise taxes 1,163 1,092 1,149
------- ------- -------
12,793 11,271 10,689
Royalties 3,053 2,294 1,846
Amounts for advertising costs are not presented as such amounts are less than 1%
of total sales and revenues.
* Certain items in prior year amounts were reclassified to conform to current
year presentation.
INDEX TO EXHIBITS
EXHIBITS DESCRIPTION
- - -------- -----------
3. Articles of Incorporation (previously filed and incorporated herein by
reference)
4. Instruments defining rights of security holders (previously filed and
incorporated herein by reference)
The Registrant agrees to furnish to the Commission, upon request, copies of
all instruments with respect to long-term debt not being registered where the
total amount of securities authorized thereunder does not exceed 10% of the
total assets of Registrant and its subsidiaries on a consolidated basis.
11. Statement re: computation of per share earnings
13. Annual report to security holders
Registrant's annual report to security holders for its last fiscal year,
except for those portions thereof which are expressly incorporated by reference
in this filing, is furnished for the information of the Commission and is not to
be deemed "filed" as part of this filing. Since the financial statements in the
report have been incorporated by reference in this filing, the accountant's
certificate is manually signed in the signed copy of this filing.
21. Subsidiaries of the Registrant
23. Consent of Independent Auditors
24. Power of attorney for certain members of the Board of Directors