TXI loses $23.7 million in first quarter

Texas Industries, Inc. (TXI) on Sept. 23 reported financial results for the quarter ended Aug. 31, 2010. Results for the quarter were a net loss of $23.7 million or $.85 per share and included an after-tax charge of $18.0 million or $.65 per share with respect to the company’s refinancing. Net income for the quarter ended August 31, 2009 was $1.7 million or $.06 per share.

The TXI first-quarter earnings report follows:

(For a downloadble PDF of TXI’s first-quarter results, unedited, click here.)

General Comments

“Conditions in our markets remain challenging,” stated Mel Brekhus, CEO. “We continue to focus on meeting market demand as cost effectively as possible. More strategically, we look forward to resuming construction of TXI’s central Texas cement plant expansion later this fall.”

“The company’s recent refinancing enhances our financial flexibility by improving our liquidity and extending the maturity of our long-term debt. We ended the quarter with $162.4 million cash and the ability to borrow $90 million on our credit facility without incurring any maintenance covenants,” added Brekhus.

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,
In thousands except per unit	2010	2009

Operating Results
Total cement sales	$ 67,690	$ 78,460
Total other sales and delivery fees	8,692	6,736
Total segment sales	76,382	85,196
Cost of products sold	70,063	69,859
Gross profit	6,319	15,337
Selling, general and administrative	(4,793)	(4,674)
Other income	2,438	1,743
Operating Profit	$ 3,964	$ 12,406

Cement
Shipments (tons)	873	915
Prices ($/ton)	$77.59	$85.70
Cost of sales ($/ton)	$71.23	$68.70

Cement operating profit for the three-month period ended August 31, 2010 was $4.0 million, a decrease of $8.4 million from the prior year period. Lower shipments and sales prices reduced operating profit approximately $8 million.

Total segment sales for the three-month period ended August 31, 2010 were $76.4 million compared to $85.2 million for the prior year period. Cement sales decreased $10.8 million from the prior year period as construction activity has remained at low levels in both our Texas and California market areas. Our Texas market area accounted for approximately 70% of cement sales in the current period compared to 71% of cement sales in the prior year period. Shipments decreased 8% in our Texas market area and increased 4% in our California market area. Average cement prices decreased 8% in our Texas market area and 13% in our California market area.

Cost of products sold for the three-month period ended August 31, 2010 increased $0.2 million from the prior year period. Cement unit costs increased 4% from the prior year period primarily due to the effect of lower shipments and higher energy costs.