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TXI Reports Lower Quarterly Results


Texas Industries Inc. reported financial results for the quarter ended Aug. 31, 2011. Results for the quarter indicated a net loss of $7.4 million or $.27 per share. Results for the quarter ended Aug. 31, 2010, were a 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.

“Conditions in our markets remain challenging in light of the pervasive uncertainty regarding the economy,” said Mel Brekhus, chief executive officer. “In recent months we made progress on pricing and we are committed to continuing our efforts, although economic headwinds may cause our successes to be uneven in the near term.

“We also made significant progress during the quarter on a number of strategic initiatives,” Brekhus said. “The swap of ready-mix assets in Houston for ready-mix and aggregate assets in Austin, Texas, and the continued construction on the expansion of our central Texas cement plant will strengthen and increase our market position in one of the better markets in the state. The extension of our credit facility to August 2016 also increases our liquidity and improves our ability to execute our strategy.”

Aggregate operating profit for the three-month periods ended Aug. 31, 2011, and Aug. 31, 2010, was $3.9 million and $5.1 million, respectively. Total segment sales for the three-month period were $45.1 million compared to $50 million for the prior year period. Stone, sand and gravel sales decreased $4.4 million from the prior year period. The effect of the disposition of aggregate operating assets through the asset exchange transaction completed in April 2011 decreased sales $2.3 million, shipments 7 percent and average prices 2 percent from the prior year period. Stone, sand and gravel sales from current operations decreased $2.1 million from the prior year period on 5 percent lower shipments and 3 percent lower average prices.

Cost of products sold for the three-month period decreased $4.9 million from the prior year period primarily due to lower stone, sand and gravel shipments. Stone, sand and gravel unit costs decreased 4 percent from the prior year period primarily due to the effect of the disposition of aggregate operating assets through the asset exchange transaction completed in April 2011. Selling, general and administrative expense for the three-month period decreased $0.1 million from the prior year period primarily due to lower provisions for bad debts.

Cement operating profit for the three-month periods ended Aug. 31, 2011, and Aug. 31, 2010, was $6.5 million and $4.0 million, respectively. Construction activity remained at low levels in both the Texas and California market areas during the periods.

Total segment sales for the three-month period ended Aug. 31, 2011 were $85.6 million compared to $76.4 million for the prior year period. Cement sales increased $8.3 million from the prior year period. The Texas market area accounted for approximately 67 percent of cement sales in the current period compared to 70 percent of cement sales in the prior year period. Average cement prices were comparable to the prior year period in the Texas market area and increased 3 percent in the California market area. Shipments increased 8 percent in the Texas market area and 17 percent in the California market area.

Cost of products sold for the three-month period increased $8.2 million from the prior year period primarily due to higher shipments and a 1 percent increase in cement unit costs. Selling, general and administrative expense for the three-month period decreased $0.7 million from the prior year period primarily due to lower provisions for bad debts and legal and other professional expenses.