Print page |
E-mail page
| 
Download PDF
| Close window
« Previous Release | Next Release »
January 5, 2006 - Dallas, Texas - Texas Industries, Inc. (NYSE-TXI) today reported earnings from continuing operations for the quarter ended November 30, 2005 of $6.2 million ($.26 per share). Earnings from continuing operations for the same period last year equaled $9.7 million ($.43 per share).
"Construction activity in Texas and California continues to remain solid," stated Mel Brekhus, Chief Executive Officer. "Realized cement prices have increased 25% over the last two years. Announced cement price increases effective January 1, 2006 should add another 10% to realized prices over the near term. While cement margins declined over the last four months due to dramatically increased energy costs, we believe market conditions and cement pricing trends will support the recovery and expansion of margins in the coming quarters."
The Company's net sales for the quarter of $221 million were 13% higher than last year. Realized cement and ready-mix concrete prices both increased 15% while stone, sand and gravel prices were up 5%. Cement shipments declined 5% due to scheduled down-time for maintenance at both of the Company's Texas plants. Stone, sand and gravel and ready-mix concrete shipments increased 9% and 5%, respectively.
The improvement in net sales was offset by the impact of the scheduled downtime at the Texas plants and by dramatically higher energy costs. The cost of the maintenance performed on the Texas plants and the resulting loss in shipment volume due to production downtime combined to reduce pre-tax earnings by approximately $10 million. Increased energy costs, primarily for electricity in the manufacture of cement, added approximately $14 million to total expenses in the quarter compared to a year ago.
"The Texas cement plants have run extremely well after the maintenance work performed during the quarter," continued Brekhus. "In fact, the North Texas plant set records for production and availability during the month of November. Contracts have been signed and construction has commenced on the modernization and expansion of TXI's California cement plant. The two-year project will nearly double our California cement capacity and result in significant improvements in production efficiency."
Selling, general and administrative expenses fell $5.5 million from a year ago due to reduced incentive and stock based compensation expenses. Interest expenses were higher by $2.8 million due solely to the method required to allocate interest expense in last year's quarter to the steel operations. Other income for the current quarter included a $3.7 million pre-tax gain on the sale of an investment while other income in last year's second quarter included a $6.2 million pre-tax gain from the sale of emissions credits.
A teleconference will be held today, January 5, 2006 at 1:00 p.m. Central Time to further discuss Second Quarter results. A real-time webcast of the conference is available by logging on to TXI's website at www.txi.com.
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 level of construction activity in our markets, abnormal periods of inclement weather, unexpected periods of equipment downtime, changes in the cost of raw materials, fuel and energy, and the impact of environmental laws and other regulations. For further information refer to our Annual Report on Form 10-K.
TXI is the largest producer of cement in Texas and a major cement producer in California. TXI is also a major supplier of construction aggregates, ready-mix concrete and concrete products.
CONTACT INFORMATION:
D. Randall Jones
Vice President Corporate Communications and Government Affairs of Texas Industries, Inc., +1-972-647-6701
