Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - TEXAS INDUSTRIES INC | f8k_032513.htm |
| EX-99.1 - EXHIBIT 99.1 - TEXAS INDUSTRIES INC | exh_991.htm |
Exhibit 99.2
Texas Industries Inc. & Subsidiaries
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 1 – Basis of Pro Forma Presentation
The following unaudited pro forma condensed combined financial information adjusts the historical consolidated financial statements of Texas Industries Inc. & Subsidiaries (“Texas Industries”) for the disposal of its expanded shale and clay lightweight aggregates manufacturing business, and combines the historical unaudited financial statements of the ready-mix concrete and certain aggregate distribution businesses given as consideration by Trinity Industries, Inc. (“Trinity Industries”).
Texas Industries has a fiscal year end of May 31, and the statements of operations for the businesses received as consideration from Trinity Industries have been converted from a calendar year end to a fiscal year end of March 31. As permitted by the U.S. Securities and Exchange Commission (“SEC”) rules and regulations, Texas Industries has combined the Texas Industries consolidated statements of operations for the fiscal years ended May 31, 2012, 2011, and 2010 with the statements of operations for the businesses received as consideration from Trinity Industries for the respective years ended March 31, 2012, 2011, and 2010, for the purposes of the unaudited pro forma condensed combined financial statements.
The unaudited pro forma condensed combined balance sheets as of May 31, 2012 and 2011 are presented as if the disposition had occurred on May 31, 2012 and 2011 respectively.
The unaudited pro forma condensed combined statement of operations of Texas Industries and the businesses received as consideration from Trinity Industries for fiscal years ended May 31 2012, 2011, 2010 are presented as if the disposition had taken place on June1 for each respective year.
Texas Industries accounts for acquisitions under Accounting Standard Codification (“ASC”) 805 “Business Combinations”. In accordance with the acquisition method of accounting, Texas Industries allocates the purchase price of the acquired company to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the net tangible and identifiable intangible assets is assigned to goodwill.
The valuation of the consideration received and the related allocation of the purchase price among the certain assets and liabilities received in the consideration has not been completed. As a result the information shown below is preliminary and subject to adjustments upon completion the valuation analysis.
The unaudited pro forma condensed combined financial statements are not intended to represent or be indicative of the consolidated results of operations or financial position of Texas Industries that would have been reported had the disposition been completed as of the dates presented, and should not be taken as representative of future consolidated results of operations or financial position of Texas Industries. The unaudited pro forma condensed combined financial statements do not reflect any operation efficiencies and cost savings that Texas Industries may achieve with respect to the combined companies.
The unaudited pro forma condensed combined financial statements should be read in conjunction with historical consolidated financial statement and accompanying notes of Texas Industries’ Annual Report on Form 10-K for the fiscal years ending May 31, 2012, 2011, and 2010.
Exhibit 99.2
Texas Industries Inc. & Subsidiaries
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 2 – Preliminary Valuation
Ready Mix Concrete and Aggregate Distribution Businesses
On March 22, 2013 Texas Industries disposed of its expanded shale and clay manufacturing business and related assets and received as consideration 42 ready-mix concrete plants stretching from Texarkana to Beaumont in east Texas and in southwestern Arkansas, two aggregate distribution facilities in Beaumont and Port Arthur, Texas, $8.5 million in cash and related assets and consideration from Trinity Industries.
The total preliminary valuation of the consideration received by Texas Industries for its expanded shale and clay manufacturing business and related assets is estimated at $59.6 million and comprised of cash of $8.5 million plus cash received in the amount of $5.5 million in consideration for prepaid assets and certain expanded shale and clay manufacturing inventories, tangible personal and real property and other assets valued at $45.6 million. This estimate will be subject to a final valuation expected to be completed during our fourth quarter 2013.
Note 3 – Pro Forma Adjustments
In preparation of the proforma unaudited financial statements the following adjustments have been recorded:
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a)
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Represents cash consideration of $8.5 million plus cash received in the amount of $5.5 million in consideration for prepaid assets and certain expanded shale and clay manufacturing inventories.
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b)
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Represents estimated fair value of the inventories comprising the ready mix concrete and aggregated businesses received as consideration
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c)
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Represents estimated fair value of the tangible personal and real properties comprising the ready mix concrete and aggregated businesses received as consideration
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d)
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Represents the estimated fair value of the note receivable for the annual payments resulting from the sale of certain expanded shale and clay manufacturing inventories over a ten year period
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EXHIBIT 99.2
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TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
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UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET
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AS OF MAY 31, 2012
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As Originally
Reported
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Disposal
Group
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Adjustments
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Pro Forma
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||||||||||||||
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May 31,
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May 31,
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May 31,
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May 31,
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||||||||||||||
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In thousands
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2012
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2012
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2012
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2012
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ASSETS
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|||||||||||||||||
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CURRENT ASSETS
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|||||||||||||||||
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Cash and cash equivalents
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$ | 88,027 | - | $ | 14,033 | a | $ | 102,060 | |||||||||
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Receivables - net
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98,836 | 98,836 | |||||||||||||||
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Inventories
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129,514 | 30,073 | 6,000 | b | 105,441 | ||||||||||||
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Deferred income taxes and prepaid expenses
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19,007 | 19,007 | |||||||||||||||
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TOTAL CURRENT ASSETS
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335,384 | 30,073 | 20,033 | 325,344 | |||||||||||||
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PROPERTY, PLANT AND EQUIPMENT
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Land and land improvements
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172,247 | 4,074 | 7,000 | c | 175,173 | ||||||||||||
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Buildings
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51,982 | 2,415 | 49,567 | ||||||||||||||
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Machinery and equipment
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1,184,651 | 42,212 | 27,000 | c | 1,169,439 | ||||||||||||
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Construction in progress
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437,166 | 614 | 436,552 | ||||||||||||||
| 1,846,046 | 49,314 | 34,000 | 1,830,732 | ||||||||||||||
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Less depreciation and depletion
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650,450 | 39,044 | 611,406 | ||||||||||||||
| 1,195,596 | 10,271 | 34,000 | 1,219,325 | ||||||||||||||
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OTHER ASSETS
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Goodwill
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1,715 | - | - | 1,715 | |||||||||||||
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Real estate and investments
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20,865 | - | - | 20,865 | |||||||||||||
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Deferred income taxes and other charges
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23,368 | - | 6,200 | d | 29,568 | ||||||||||||
| 45,948 | - | 6,200 | 52,148 | ||||||||||||||
| $ | 1,576,928 | $ | 40,344 | $ | 60,233 | $ | 1,596,817 | ||||||||||
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES
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Accounts Payable
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$ | 64,825 | - | - | $ | 64,825 | |||||||||||
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Accrued interest, compensation and other
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61,317 | - | - | 61,317 | |||||||||||||
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Current portion of long-term debt
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1,214 | - | - | 1,214 | |||||||||||||
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TOTAL CURRENT LIABILITIES
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127,356 | - | - | 127,356 | |||||||||||||
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LONG-TERM DEBT
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656,949 | - | - | 656,949 | |||||||||||||
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OTHER CREDITS
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96,352 | - | - | 96,352 | |||||||||||||
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SHAREHOLDERS' EQUITY
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Common stock, $1 par value; authorized 100,000 shares; issued and outstanding 27,996 shares
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27,996 | - | - | 27,996 | |||||||||||||
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Additional paid-in capital
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488,637 | - | - | 488,637 | |||||||||||||
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Retained earnings
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204,136 | 40,344 | 60,233 | 224,025 | |||||||||||||
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Accumulated other comprehensive loss
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(24,498 | ) | - | - | (24,498 | ) | |||||||||||
| 696,271 | 40,344 | 60,233 | 716,160 | ||||||||||||||
| $ | 1,576,928 | $ | 40,344 | $ | 60,233 | $ | 1,596,817 | ||||||||||
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EXHIBIT 99.2
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TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
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UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET
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AS OF MAY 31, 2011
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As Originally
Reported
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Disposal
Group
|
Adjustments
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Pro Forma
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||||||||||||||
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May 31,
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May 31,
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May 31,
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May 31,
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In thousands
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2011
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2011
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2011
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2011
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 116,432 | $ | - | $ | 14,033 | a | $ | 130,465 | ||||||||
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Receivables - net
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85,817 | 85,817 | |||||||||||||||
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Inventories
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140,646 | 29,567 | 6,000 | b | 117,079 | ||||||||||||
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Deferred income taxes and prepaid expenses
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22,040 | 22,040 | |||||||||||||||
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TOTAL CURRENT ASSETS
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364,935 | 29,567 | 20,033 | 355,401 | |||||||||||||
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PROPERTY, PLANT AND EQUIPMENT
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Land and land improvements
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158,232 | 4,531 | 7,000 | c | 160,701 | ||||||||||||
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Buildings
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59,320 | 2,415 | 56,905 | ||||||||||||||
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Machinery and equipment
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1,222,560 | 42,333 | 27,000 | c | 1,207,227 | ||||||||||||
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Construction in progress
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357,638 | 430 | 357,208 | ||||||||||||||
| 1,797,750 | 49,709 | 34,000 | 1,782,041 | ||||||||||||||
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Less depreciation and depletion
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642,329 | 38,114 | 604,215 | ||||||||||||||
| 1,155,421 | 11,595 | 34,000 | 1,177,826 | ||||||||||||||
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OTHER ASSETS
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Goodwill
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1,715 | - | - | 1,715 | |||||||||||||
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Real estate and investments
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6,749 | - | - | 6,749 | |||||||||||||
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Deferred income taxes and other charges
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22,191 | - | 6,200 | d | 28,391 | ||||||||||||
| 30,655 | - | 6,200 | 36,855 | ||||||||||||||
| $ | 1,551,011 | $ | 41,162 | $ | 60,233 | $ | 1,570,082 | ||||||||||
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES
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Accounts Payable
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$ | 56,787 | $ | - | $ | - | $ | 56,787 | |||||||||
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Accrued interest, compensation and other
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58,848 | - | - | 58,848 | |||||||||||||
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Current portion of long-term debt
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73 | - | - | 73 | |||||||||||||
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TOTAL CURRENT LIABILITIES
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115,708 | - | - | 115,708 | |||||||||||||
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LONG-TERM DEBT
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652,403 | - | - | 652,403 | |||||||||||||
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OTHER CREDITS
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87,318 | - | - | 87,318 | |||||||||||||
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SHAREHOLDERS' EQUITY
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Common stock, $1 par value; authorized 100,000 shares; issued and outstanding 27,887 shares
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27,887 | - | - | 27,887 | |||||||||||||
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Additional paid-in capital
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481,706 | - | - | 481,706 | |||||||||||||
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Retained earnings
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198,751 | 41,162 | 60,233 | 217,822 | |||||||||||||
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Accumulated other comprehensive loss
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(12,762 | ) | - | - | (12,762 | ) | |||||||||||
| 695,582 | 41,162 | 60,233 | 714,653 | ||||||||||||||
| $ | 1,551,011 | $ | 41,162 | $ | 60,233 | $ | 1,570,082 | ||||||||||
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EXHIBIT 99.2
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TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
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UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
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YEAR ENDED MAY 31, 2012
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As Originally
Reported
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Disposal
Group
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Adjustments
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Pro Forma
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|||||||||||||
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Year Ended
May 31
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Year Ended
May 31
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Year Ended
May 31
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Year Ended
May 31
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In thousands except per share
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2012
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2012
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2012
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2012
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NET SALES
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$ | 647,003 | $ | 52,898 | $ | 123,112 | $ | 717,217 | ||||||||
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Cost of products sold
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601,256 | 40,682 | 110,584 | 671,158 | ||||||||||||
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Gross Profit
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45,747 | 12,216 | 12,528 | 46,059 | ||||||||||||
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Selling, general and administrative
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73,057 | 4,708 | 7,167 | 75,516 | ||||||||||||
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Restructuring charges
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3,216 | 48 | - | 3,168 | ||||||||||||
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Interest
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34,835 | - | - | 34,835 | ||||||||||||
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Loss on debt retirements
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- | - | - | - | ||||||||||||
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Other income
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(73,833 | ) | (727 | ) | (73,106 | ) | ||||||||||
| 37,275 | 4,029 | 7,167 | 40,413 | |||||||||||||
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INCOME (LOSS) BEFORE INCOME TAXES
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8,472 | 8,187 | 5,361 | 5,646 | ||||||||||||
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Income taxes (benefit)
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996 | 2,638 | 1,938 | 296 | ||||||||||||
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NET INCOME (LOSS)
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$ | 7,476 | $ | 5,549 | $ | 3,423 | $ | 5,350 | ||||||||
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Net income (loss) per share
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Basic
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$ | 0.27 | $ | 0.20 | $ | 0.12 | $ | 0.19 | ||||||||
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Diluted
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$ | 0.27 | $ | 0.20 | $ | 0.12 | $ | 0.19 | ||||||||
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Average shares outstanding
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||||||||||||||||
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Basic
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27,914 | 27,914 | 27,914 | 27,914 | ||||||||||||
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Diluted
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28,016 | 28,016 | 28,016 | 28,016 | ||||||||||||
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EXHIBIT 99.2
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TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
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UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
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YEAR ENDED MAY 31, 2011
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As Originally
Reported
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Disposal
Group
|
Adjustments
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Pro Forma
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|||||||||||||
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Year Ended
May 31
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Year Ended
May 31
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Year Ended
May 31
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Year Ended
May 31
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In thousands except per share
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2011
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2011
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2011
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2011
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NET SALES
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$ | 621,813 | $ | 49,908 | $ | 143,904 | $ | 715,809 | ||||||||
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Cost of products sold
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596,510 | 39,586 | 121,273 | 678,197 | ||||||||||||
| 25,303 | 10,322 | 22,631 | 37,612 | |||||||||||||
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Selling, general and administrative
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76,420 | 4,370 | 6,603 | 78,653 | ||||||||||||
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Interest
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47,583 | - | - | 47,583 | ||||||||||||
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Loss on debt retirements
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29,619 | - | - | 29,619 | ||||||||||||
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Other income
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(21,512 | ) | (589 | ) | (20,923 | ) | ||||||||||
| 132,110 | 3,781 | 6,603 | 134,932 | |||||||||||||
| (106,807 | ) | 6,541 | 16,028 | (97,320 | ) | |||||||||||
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Income taxes (benefit)
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(41,894 | ) | 1,982 | 5,720 | (38,156 | ) | ||||||||||
| $ | (64,913 | ) | $ | 4,559 | $ | 10,308 | $ | (59,164 | ) | |||||||
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Net income (loss) per share
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Basic
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$ | (2.33 | ) | $ | 0.16 | $ | 0.37 | $ | (2.13 | ) | ||||||
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Diluted
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$ | (2.33 | ) | $ | 0.16 | $ | 0.37 | $ | (2.13 | ) | ||||||
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Average shares outstanding
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||||||||||||||||
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Basic
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27,825 | 27,825 | 27,825 | 27,825 | ||||||||||||
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Diluted
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27,825 | 27,825 | 27,825 | 27,825 | ||||||||||||
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EXHIBIT 99.2
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TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
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UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
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YEAR ENDED MAY 31, 2010
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As Originally
Reported
|
Disposal
Group
|
Adjustments
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Pro Forma
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|||||||||||||
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Year Ended
May 31
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Year Ended
May 31
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Year Ended
May 31
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Year Ended
May 31
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In thousands except per share
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2010
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2010
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2010
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2010
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NET SALES
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$ | 621,064 | $ | 49,380 | $ | 166,538 | $ | 738,222 | ||||||||
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Cost of products sold
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562,066 | 36,981 | 144,615 | 669,700 | ||||||||||||
| 58,998 | 12,399 | 21,923 | 68,522 | |||||||||||||
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Selling, general and administrative
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79,415 | 3,883 | 8,217 | 83,749 | ||||||||||||
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Interest
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52,240 | - | - | 52,240 | ||||||||||||
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Loss on debt retirements
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- | - | - | - | ||||||||||||
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Other income
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(10,666 | ) | (623 | ) | (10,043 | ) | ||||||||||
| 120,989 | 3,260 | 8,217 | 125,946 | |||||||||||||
| (61,991 | ) | 9,139 | 13,706 | (57,424 | ) | |||||||||||
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Income taxes (benefit)
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(23,138 | ) | 2,948 | 4,903 | (21,183 | ) | ||||||||||
| $ | (38,853 | ) | $ | 6,191 | $ | 8,803 | $ | (36,241 | ) | |||||||
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Net income (loss) per share
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||||||||||||||||
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Basic
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$ | (1.40 | ) | $ | 0.22 | $ | 0.32 | $ | (1.31 | ) | ||||||
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Diluted
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$ | (1.40 | ) | $ | 0.22 | $ | 0.32 | $ | (1.31 | ) | ||||||
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Average shares outstanding
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||||||||||||||||
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Basic
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27,744 | 27,744 | 27,744 | 27,744 | ||||||||||||
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Diluted
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27,744 | 27,744 | 27,744 | 27,744 | ||||||||||||