TXI loses $23.7 million in first quarter

Income Taxes

Income taxes for the interim periods ended August 31, 2010 and August 31, 2009 have been included in the accompanying financial statements on the basis of an estimated annual rate. The estimated annualized rate does not include the tax impact of the loss on debt retirements which has been recognized as a discrete item in the three-month period ended August 31, 2010. The estimated annualized rate excluding this charge is 40.6% for fiscal year 2011 compared to 47.4% for fiscal year 2010. The primary reason that the tax rate differs from the 35% federal statutory corporate rate is due to percentage depletion that is tax deductible, state income taxes and deductions for income from qualified domestic production activities.

Certain statements contained in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 the 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 and 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.

The Texas Industries, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6602


(Unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

	Three months ended August 31,
In thousands except per share	2010	2009

NET SALES	$ 172,122	$ 183,957

Cost of products sold	156,014	149,852
GROSS PROFIT	16,108	34,105

Selling, general and administrative	16,141	20,254
Interest	14,411	13,244
Loss on debt retirements	29,006	–
Other income	(4,890)	(2,652)
	54,668	30,846
INCOME (LOSS) BEFORE INCOME TAXES	(38,560)	3,259

Income taxes (benefit)	(14,868)	1,544
NET INCOME (LOSS)	$ (23,692)	$ 1,715


Net income (loss) per share
Basic	$ (.85)	$ .06
Diluted	$ (.85)	$ .06

Average shares outstanding
Basic	27,787	27,720
Diluted	27,787	27,940

Cash dividends declared per share	$ .075	$ .075



CONSOLIDATED BALANCE SHEETS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

	(Unaudited) August 31,	May 31,
In thousands	2010	2010

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$ 162,427	$ 74,946
Receivables – net	107,217	112,184
Inventories	148,741	142,419
Deferred income taxes and prepaid expenses	22,673	23,426
TOTAL CURRENT ASSETS	441,058	352,975

PROPERTY, PLANT AND EQUIPMENT
Land and land improvements	158,094	158,367
Buildings	58,371	58,351
Machinery and equipment	1,217,852	1,220,021
Construction in progress	324,760	322,039
	1,759,077	1,758,778
Less depreciation and depletion	618,706	604,269
	1,140,371	1,154,509
OTHER ASSETS
Goodwill	1,715	1,715
Real estate and investments	6,223	6,774
Deferred charges and other	22,398	15,774
	30,336	24,263
	$ 1,611,765	$ 1,531,747

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$ 54,659	$ 56,214
Accrued interest, compensation and other	45,805	51,455
Current portion of long-term debt	13,341	234
TOTAL CURRENT LIABILITIES	113,805	107,903

LONG-TERM DEBT	652,459	538,620

DEFERRED INCOME TAXES AND OTHER CREDITS	108,400	123,976

SHAREHOLDERS’ EQUITY
Common stock, $1 par value; authorized 100,000 shares; issued and outstanding 27,807 and 27,796 shares, respectively	27,807	27,796
Additional paid-in capital	476,901	475,584
Retained earnings	246,240	272,018
Accumulated other comprehensive loss	(13,847)	(14,150)
	737,101	761,248
	$ 1,611,765	$ 1,531,747



(Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES

	Three months ended August 31,
In thousands	2010	2009

OPERATING ACTIVITIES
Net income (loss)	$ (23,692)	$ 1,715
Adjustments to reconcile net income (loss) to cash provided by operating activities
Depreciation, depletion and amortization	15,861	16,594
Gains on asset disposals	(1,613)	(1,030)
Deferred income taxes (benefit)	(14,973)	743
Stock-based compensation expense (credit)	(230)	2,643
Excess tax benefits from stock-based compensation	–	(211)
Loss on debt retirements	29,006	–
Other – net	2,192	(221)
Changes in operating assets and liabilities
Receivables – net	4,413	(888)
Inventories	(6,322)	757
Prepaid expenses	1,297	1,074
Accounts payable and accrued liabilities	(7,284)	(6,638)
Net cash provided (used) by operating activities	(1,345)	14,538

INVESTING ACTIVITIES
Capital expenditures – expansions	(1,374)	(4,569)
Capital expenditures – other	(1,782)	(804)
Proceeds from asset disposals	3,209	1,068
Investments in life insurance contracts	327	5,802
Other – net	292	(19)
Net cash provided by investing activities	672	1,478

FINANCING ACTIVITIES
Long-term borrowings	650,000	–
Debt retirements	(547,736)	(59)
Debt issuance costs	(12,250)	(2,032)
Stock option exercises	225	331
Excess tax benefits from stock-based compensation	–	211
Common dividends paid	(2,085)	(2,080)
Net cash provided (used) by financing activities	88,154	(3,629)
Increase in cash and cash equivalents	87,481	12,387

Cash and cash equivalents at beginning of period	74,946	19,796
Cash and cash equivalents at end of period	$ 162,427	$ 32,183