TXI Reports Second Quarter Results
Thursday January 4, 8:37 am ET
DALLAS, Jan. 4 /PRNewswire-FirstCall/ -- Texas Industries, Inc. (NYSE: TXI - News) today reported net income of $28.7 million ($1.09 per share) for the quarter ended November 30, 2006. The quarter included $12.9 million ($.47 per share) in after-tax income as a result of cash received from the settlement of the long-standing U.S. antidumping order on Mexican cement. For the same quarter last year, the Company reported net income of $6.2 million ($.26 per share).
"Construction activity in Texas, TXI's primary market, remains solid," stated Mel Brekhus, Chief Executive Officer. "While residential construction has declined considerably in the California market, highway and other public works construction sectors are improving."
"Operating margins continued to expand during the quarter. Our focus on operational improvements in combination with the trend of increasing product prices should result in significant margin expansion in the coming quarters as well. The Company has announced cement price increases of $12 per ton for the Texas and California markets, effective January 1 and March 1, 2007, respectively."
Net sales for the quarter improved 11% compared to a year ago. Realized prices for cement increased 12%, stone, sand and gravel increased 17% and ready-mix concrete increased 9%. Cement and ready-mix concrete shipments remained stable while stone, sand and gravel shipments declined 6% as a result of the expiration of a low margin supply contract and the insufficient availability of rail transportation in our North Texas market.
Overall energy costs declined compared to those of a year ago. Scheduled maintenance at the North Texas cement plant had approximately the same impact on results as in last year's second quarter. Selling, general and administrative expenses increased $15.3 million compared to last year's quarter as stock-based compensation increased $6.6 million and incentive compensation expense increased $6.2 million. Interest expense declined $3.2 million primarily as a result of the capitalization of interest relating to the California cement plant modernization and expansion. Other income for the current quarter included pre-tax income of $19.8 million relating to the settlement distributions mentioned earlier.
"The expansion and modernization of our California cement plant remains on schedule and on budget," continued Brekhus. "This project and two others in Texas will expand TXI's annual cement manufacturing capacity from today's 5 million tons to 7.5 million tons over the next four-to-five years."
A teleconference will be held today, January 4, 2007 at 1:00 p.m. Central Standard Time to further discuss second quarter results. A real-time webcast of the conference is available by logging on to TXI's website at http://www.txi.com
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