Texas Industries, Inc today reported financial results for the quarter ended November 30, 2008. Net income was $3.9m ($.14 per share). Net income for the quarter ended November 30, 2007 was $29.3 million ($1.07 per share). TXI also announced the delay of its Central Texas cement plant expansion project, beginning in the May 2009 quarter.
"The general economy caught up with the state of Texas this fall," stated Mel Brekhus, Chief Executive Officer. "In Texas, which accounts for approximately 80% of TXI’s sales, cement consumption declined about 20% this Fall compared to last year. Cement prices in Texas improved 3% from a year ago and about 1% compared to the summer quarter. Cement consumption in California continued to decline and cement prices in that market were down 14% from a year ago and 5% compared to the summer quarter."
"We are in the midst of very challenging times," added Brekhus. "TXI is pursuing every opportunity to meet market demand as cost effectively as possible. The idling of the small kilns at our North Texas plant and the cement grinding operations at our Crestmore facility in California will reduce cash costs while still allowing us to meet the current demand. Similarly, we are striving to match production to sales throughout all operations. We have eliminated shifts and reduced overtime at our aggregate facilities and our ready-mix operations did an outstanding job of keeping labor efficiencies high on 27% lower shipments. All-in-all, the total number of employees has been reduced by 15% since December 2007."
"It just doesn’t make sense to bring capacity on line at a time when the market clearly does not need it," Brekhus said about the delay of the Central Texas cement plant expansion. "We will resume the project once market conditions improve. The delay is expected to defer $40-60 million in cash payments that would have primarily been made during fiscal year 2010 to complete the project on schedule."
Total cement sales for the three-month period ended November 30, 2008 decreased $24.2 million from the prior year period as construction activity declined in both our Texas and California market areas. The company’s Texas market area accounted for approximately 70% of total cement sales in the current period compared to 68% of total cement sales in the prior year period. In its Texas market area cement shipments decreased 19% from the prior year period and average prices increased 3%. In the California market area, TXI cement shipments decreased 14% from the prior year period and average prices decreased 14%.