Item 1. Business
Justin Industries, Inc. and its subsidiaries are herein collectively referred to as the "Company", unless the context indicates otherwise. The Company, where specifically indicated, has incorporated by reference certain information contained in its 1996 Annual Report to Shareholders. Other references made to that report are for information purposes only and the information in the Annual Report to Shareholders is not deemed incorporated in this Form 10-K.
General Development of Business
The Company was incorporated under the laws of the State of Texas on April 26, 1916, as Acme Brick Company. In 1972, after merger with Justin Boot Company ("Justin Boot") in 1968, the Company changed its name to Justin Industries, Inc. In 1981, Justin purchased Nocona Boot Company ("Nocona"). On October 15, 1990, the Company acquired Tony Lama Company, Inc. ("Tony Lama"). Effective August 1, 1994, the Company purchased American Tile Supply Company ("American Tile").
Justin's continuing operations are in two principal business areas: (i) manufacture and sale of building materials, which includes the operations of Acme, American Tile, Featherlite Building Products Corporation, and Tradewinds Technologies, Inc. ("Tradewinds"), and (ii) manufacture and sale of footwear products, which includes the operations of Justin Boot, Nocona and Tony Lama.
Financial Information about Industry Segments
A five year analysis of sales and operating profit contribution by industry segment is presented on page 17 of the company's 1996 Annual Report to Shareholders and additional financial information, including identifiable assets, by industry segment is included in Note 8 of Notes to Consolidated Financial Statements on page 26 of the Shareholders' Report. Such information is hereby incorporated by reference.
Narrative Description of Business
The following information is presented in addition to the information included in the Report on Operations contained on pages 5 through 11 of the company's 1996 Annual Report to Shareholders, which is incorporated herein by reference.
Manufacture and Sale of Building Materials
The building materials segment includes clay brick manufactured and sold under the name Acme Brick for use in residential and commercial construction. The primary market for Acme Brick is the Central and Southwest United States where distribution is mainly through company operated sales offices. Acme also distributes through independent dealerships in other parts of the United States. Acme is one of the largest manufacturers of face brick in the United States.
Other products in the company's building materials segment include concrete block manufactured and sold under the trade name Featherlite Building Products and cut limestone manufactured under the name Texas Quarries. The primary markets for these products are in Texas and its neighboring states.
Acme and Featherlite also represent other manufacturers as distributors of such items as clay brick, glass block, glazed and unglazed tile and masonry units, fireplace equipment, masonry cleaners, masonry saws, wall reinforcements, masonry tools, masonry cement, and purchased used brick for resale.
Since August, 1994, this segment also includes the sale of ceramic and marble floor and wall tile through American Tile distribution centers in Texas.
Tradewinds manufactures a unique line of premium quality evaporative coolers used primarily for central residential cooling and light commercial and spot cooling.
In the states of Texas, Louisiana, Arkansas, Oklahoma, New Mexico, Kansas, Tennessee, and Missouri, Acme, American Tile, and Featherlite market their building materials through approximately 480 full-time company sales employees serving architects, contractors, home builders, and others in the construction market. These direct sales comprise the majority of the company's building materials sales. In the other states, sales are made principally through independent distributors and dealers. The majority of the building materials manufactured by the company are utilized within a 250 mile radius of the plant where they are produced. Tradewinds' coolers are sold by direct sales personnel in selected major markets and by distribution elsewhere. ================================================================================
Manufacture and Sale of Footwear Products
Footwear operations include the design, manufacture and distribution of men's, women's, and children's western style, safety, work and sports boots and shoes, primarily for sale in the United States under the primary trade names of "Justin(R)", "Nocona(R)", "Tony Lama(R)", "Chippewa(R)", "Sport Lace-R(R)", and "Diamond J(R)".
Justin Boot Company, headquartered in Fort Worth, Texas, started business in 1879 as H. J. Justin & Sons, Inc. The company owns and operates footwear manufacturing plants in Fort Worth, Texas, Cassville, Sarcoxie (currently closed), and Carthage, Missouri. Nocona Boot Company, headquartered in Nocona, Texas, started business in 1925 and owns and operates its boot manufacturing plant in Nocona. Tony Lama Company, Inc., headquartered in El Paso, Texas, was established in 1911. The company owns and operates a western boot manufacturing plant in El Paso, Texas. Administrative functions of the three companies are centralized in Fort Worth, Texas.
The company's footwear products are marketed by company salesmen and independent sales representatives who are compensated on a commission basis. Sales are made throughout the United States to a network of approximately 6,500 authorized retail outlets and dealers such as western goods stores, department stores, chain stores, and mail order houses. Footwear products are sold in the general price range of other medium to high quality lines and are manufactured using a wide range of leathers.
Other
The company, through Northland Publishing Company ("Northland"), is also in the publishing business. Northland's primary activity is publishing books about the history and art of the West. Many of these books have won awards for fine design, printing, and binding in major book competitions including the Western Heritage Awards at the National Cowboy Hall of Fame. Northland's books are marketed by company personnel throughout the United States.
Raw Materials
The principal raw materials for the company's brick are clay and shale mined from company-owned or leased properties. The company has developed adequate clay reserves located at or near plant sites to supply its needs for the foreseeable future. Other raw materials used in the building materials operations, such as cement, aggregate, and additives, are purchased by the company in the open market and appear to be readily available for the foreseeable future from numerous domestic suppliers. Materials for evaporative coolers are purchased in the open market or manufactured to the company's specifications and all appear to be readily available for the foreseeable future from numerous suppliers.
The company consumes large quantities of natural gas and other combustible fuels in the drying and firing of its clay products. In periods of severe cold weather and occasionally at other times, the company's natural gas supplies have been limited by its suppliers at certain locations. In addition, during winter months, index pricing of natural gas can be somewhat volatile. The company believes it will be able to obtain an adequate supply of energy in the future to meet its requirements.
The primary raw material used in the footwear product line is finished leather. Finished leather, which is readily available, is purchased from various tanneries in the United States and from tanneries in foreign countries and their representatives in the United States. Inventories are maintained to meet production requirements. Other raw materials incidental to the production of these products such as thread, tacks, staples, buckles, and clasps appear to be readily available for the foreseeable future from numerous domestic suppliers.
Patents and Trademarks
Many of the company's products and processes are patented. In addition, most of the company's products are marketed under registered trademarks. ================================================================================
Seasonal Nature of Business
Demand for building materials and evaporative coolers is seasonal, with sales during periods of warm weather representing a higher than average proportion of total yearly sales while sales of footwear products are generally highest in the fourth quarter.
Working Capital Requirements
It is the company's policy to increase inventory levels during periods when production capabilities exceed sales. The company may also from time to time increase its inventory of raw materials in its footwear business segment to assure itself of an adequate supply of such raw materials.
Historically, funds required for working capital have been generated from operations and from borrowings from commercial banks.
Significant Customers
No material part of the company's business is dependent upon a single customer or upon a few customers, the loss of any one or more of whom would have a material adverse effect on the company's business.
Backlog of Orders at End of Fiscal Year
An analysis of backlog orders is presented on page 16 of the company's 1996 Annual Report to Shareholders, which is incorporated herein by reference. In accordance with industry practice, unfilled orders for clay brick and footwear products are generally cancelable by customers at any time and for this reason may not be considered firm backlog in the traditional sense, despite the fact that in the past, orders have been canceled only infrequently. Substantially all unfilled orders are expected to be filled within one year.
Competition
The business environment in which the company operates is highly competitive in the areas of price, service, and product quality. Unless otherwise indicated below, the company's relative competitive position within its product lines and market areas is not readily available due to constant changes in the number and identity of competitors and types of competitive products.
In the building materials segment, competition includes other suppliers of brick and concrete products, as well as suppliers of diverse alternative building materials such as stucco, steel, aluminum, glass, plastic, and wood products. There are numerous manufacturers of various types of brick and concrete products in the United States, virtually all of which operate on a regional or local basis. In every geographical area served by the company, there are numerous competitors in all significant building product lines. The company is one of the largest face brick manufacturers in the United States and the largest in the Southwest. There are numerous plants manufacturing concrete products in the area in which the company owns and operates plants. Tradewinds' evaporative coolers compete with approximately five other major manufacturers, two of which currently have approximately 70 percent of the market. None of the competition, however, manufactures coolers constructed of injection molded polypropylene material.
The company's western style boots and other footwear products compete with approximately 20 other major manufacturers of high quality merchandise, and many more manufacturers of lesser quality footwear.
Research Activities
In the normal course of business, the company conducts research and development activities to improve existing products and to develop new products within its current product lines. These activities include developing new styles, effective use of new materials, and developing new manufacturing techniques. The amount spent during each of the last three fiscal years on these activities did not exceed one percent of the company's total operating revenues. ================================================================================
Environment
There are numerous federal, state, and local statutes, regulations and ordinances regulating discharge of materials into the environment or otherwise relating to the protection of the environment, including those concerning clean air, water, and waste disposal. In management's opinion, none of these will materially affect the company's earnings or competitive position and should not require any material increase in capital expenditures.
Employees
The company had 3,943 employees in its operations as of December 31, 1996.
The number of employees by job position at December 31, 1996, was as follows:
Building Materials Footwear Parent Total --------- --------- --------- ------- Production 1,463 1,134 2,597 Sales 544 231 775 Administrative, Engineering, Clerical, and Other 358 187 26 571 ------- ------- ------- ------- 2,365 1,552 26 3,943 ======= ======= ======= =======
Foreign Operations
Footwear products are marketed in foreign countries, primarily Canada, Western Europe, and Japan. Foreign operations are not material to consolidated operations.
Item 2.
Item 2. Properties
Information concerning the company's principal production facilities is as follows:
The company's current annual brick manufacturing capacity is approximately 840 million brick. The company's 17 operating brick plants are located on approximately 8,000 acres of land, which includes associated clay mining operations. The plants have individual production capacities ranging from 14.5 million to 128 million brick each year.
The company's tile distribution centers operate out of 12 leased facilities, consisting of approximately 278,000 square feet of showroom, office and warehouse space, and two owned showroom/warehouse facilities containing 48,000 square feet.
The company's concrete operations include 7 concrete block plants operated by Featherlite and one plant operated by Acme on tracts of land ranging from 5 acres to 24 acres. In addition, Featherlite operates a limestone mill on a 36 acre tract of land and owns 62 acres of volcanic cinder mines and leases mining rights on 2,100 acres of land for quarrying architectural limestone.
Tradewinds manufactures its evaporative coolers in Phoenix, Arizona, in a leased facility containing approximately 90,000 square feet.
The footwear manufacturing facilities consist of 7 plants, two of which are currently not operating, and related warehouses containing approximately 777,000 square feet, located on land owned by the company. These plants have a designed capacity to produce in excess of 3 million pair of footwear annually.
The company's corporate administrative headquarters in Fort Worth, Texas, is contained in 26,000 square feet of modern office facilities.
The company owns various interests in oil and gas mineral leases in Texas, Oklahoma, Louisiana, and Arkansas. Revenues received to date from these interests have not and are not anticipated to have a material effect on consolidated revenues. ================================================================================
Item 3.
Item 3. Legal Proceedings
The company is involved in various claims and lawsuits incidental to its business. In the opinion of management, these claims and lawsuits in the aggregate will not have a material adverse effect on the company's consolidated financial statements.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the company's security holders during the last quarter of its fiscal year ended December 31, 1996.
Executive Officers of Registrant
Certain information regarding the executive officers is as follows:
Employed Date First by Company Appointed an Name Age In Officer Title - --------------------- --- ---------- --------------- -------------------- John Justin 80 1936 December 1969 Chairman of the Board and Chief Executive Officer
J. T. Dickenson 67 1974 September 1983 President and Chief Operating Officer
Richard J. Savitz 50 1979 March 1982 Vice President- Finance, Treasurer and Secretary
Edward L. Stout, Jr. 71 1949 March 1974 Vice President-Brick Operations
Judy B. Hunter 38 1990 October 1990 Controller, Assistant Treasurer
There are no family relationships among any of the above officers and there are no known arrangements or understandings between any executive officer and any other person pursuant to which any of the above named persons was selected as an officer. ================================================================================
PART II
Item 5.
Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters
Incorporated by reference from the 1996 Annual Report to Shareholders, pages 28, 29, and 30.
As of February 28, 1997, there were 1,712 common shareholders of record. In addition, approximately 2,355 shareholders are participants in the Justin Industries, Inc. Employee Stock Ownership Plan.
Dividends declared for the most recent two fiscal years are as follows:
Quarter Ended Cash Dividend Declared ------------- ---------------------- 3/31/95 $.04 6/30/95 $.04 9/30/95 $.04 12/31/95 $.04 3/31/96 $.04 6/30/96 $.04 9/30/96 $.04 12/31/96 $.04
Item 6.
Item 6. Selected Financial Data
Incorporated by reference from the 1996 Annual Report to Shareholders, pages 28 and 29.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Incorporated by reference from the 1996 Annual Report to Shareholders, pages 13 through 17.
Item 8.
Item 8. Financial Statements and Supplementary Data
The consolidated balance sheets of the company at December 31, 1996 and 1995 and the consolidated statements of income, shareholders' equity, and cash flows for the years 1996, 1995, and 1994 and the report of independent auditors thereon, and the company's unaudited quarterly financial data for the two-year period ended December 31, 1996 are incorporated by reference from the 1996 Annual Report to Shareholders, pages 18 through 27 and page 30.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None. ================================================================================
PART III
Item 10.
Item 10. Directors and Executive Officers of Registrant
Incorporated herein by reference from the company's definitive proxy statement for the Annual Meeting of Shareholders held March 28, 1997 ("Proxy Statement"), pages 2 through 5.
Information regarding the executive officers is included in Part I.
Item 11.
Item 11. Executive Compensation
Incorporated herein by reference from the Proxy Statement, pages 6 through 12.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required as to security ownership is incorporated herein by reference from the Proxy Statement, pages 2 and 3.
Item 13.
Item 13. Certain Relationships and Related Transactions
Incorporated herein by reference from the Proxy Statement, page 13. ================================================================================
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements
Reference ------------------------------ Annual Report to Shareholders Form 10-K (page) --------- ---------------
Data incorporated by reference from attached Annual Report to Shareholders of Justin Industries, Inc.:
Report of independent auditors 27
Consolidated balance sheet at December 31, 1996 and 1995 18
For the years ended December 31, 1996, 1995, and 1994: Consolidated statement of income 19 Consolidated statement of shareholders' equity 19 Consolidated statement of cash flows 20
Notes to consolidated financial statements 21-26
2. Financial Statement Schedules
Report of Independent Auditors and Consent of Independent Auditors S-1
Schedules for years ended December 31, 1996, 1995, and 1994:
II - Valuation and qualifying accounts S-2
All other schedules and compliance information have been omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements and the notes thereto. ================================================================================
3. Exhibits
Exhibit No. Description - ------- -----------
3.1 Articles of Incorporation of Registrant, as amended (incorporated by reference to the Registrant's Registration Statement on Form S-8 dated April 27, 1993)
3.2 By-Laws of Registrant, as amended (incorporated by reference to the Registrant's Current Report on Form 8-K dated September 7, 1990)
4.1 Rights Agreement dated as of October 6, 1989 between Registrant and Team Bank, as Rights Agent (incorporated by reference to Registrant's Registration Statement on Form 8-A dated October 10, 1989)
4.2 First Amendment to Rights Agreement dated as of October 4, 1990 between Registrant and Ameritrust Texas, N.A., as successor Rights Agent (incorporated by reference to Registrant's Amendment No. 1 on Form 8 to Registration Statement on Form 8-A dated October 4, 1990)
10.1 Registrant's 1981 Stock Option Plan*
10.2 Registrant's 1984 Incentive Stock Option Plan*
10.3 Registrant's Justin Industries, Inc. 1996 Non-Employee Director Stock Option Plan (incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Shareholders held on April 11, 1996)
10.4 Registrant's 1992 Stock Option Plan (incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Shareholders held on April 3, 1992)
10.5 Registrant's Deferred Compensation Plan*
10.6 Form of Registrant's Special Executive Benefit Program*
10.7 Registrant's Supplemental Executive Retirement Plan of 1992 (incorporated by reference to Registrant's 1992 Annual Report on Form 10-K)
10.8 Registrant's Employee Stock Ownership Plan, as restated January 1, 1989 (incorporated by reference to Registrant's 1994 Annual Report on Form 10-K)
10.9 First Amendment to the Registrant's Restated Employee Stock Ownership Plan, effective July 1, 1995 (incorporated by reference to Registrant's 1994 Annual Report on Form 10-K)
10.10 Second Amendment to the Registrant's Restated Employee Stock Ownership Plan, effective August 1, 1995 (incorporated by reference to Registrant's 1994 Annual Report on Form 10-K)
10.11 Employment Agreement dated as of December 14, 1995 between Registrant and John S. Justin, Jr. (incorporated by reference to Registrant's 1994 Annual Report on Form 10-K)
10.12 Form of Severance Agreement dated March 23, 1990 between Registrant and certain of its executive officers*
10.13 Form of Severance Agreement dated March 23, 1990 between Registrant and certain of its officers and employees*
10.14 Revolving Loan Agreement between Registrant, NationsBank of Texas, N.A. (formerly NCNB Texas National Bank) as Administrative Lender and the several banks listed on the signature pages thereof, as amended in the First and Second Amendments through June 9, 1990*
10.15 Third Amendment to the Revolving Loan Agreement dated as of December 3, 1990 among Registrant, NationsBank of Texas, N.A. (formerly NCNB Texas National Bank), Bank One, Texas, N.A. (formerly Team Bank), Citibank, N.A., The Bank of New York and Texas Commerce Bank--Fort Worth, N.A. (incorporated by reference to Registrant's Current Report on Form 8-K dated December 3, 1990)
10.16 Fourth Amendment to the Revolving Loan Agreement dated as of December 31, 1991 among Registrant, certain subsidiaries of the Registrant, NationsBank of Texas, N.A., as Administrative Lender, NationsBank of Texas, N.A., Bank One, Texas, N.A. (formerly Team Bank), Citibank, N.A., The Bank of New York and Texas Commerce Bank, National Association (successor by merger to Texas Commerce Bank--Fort Worth, N.A.) (incorporated by reference to Registrant's 1991 Annual Report on Form 10-K)
10.17 Fifth Amendment to the Revolving Loan Agreement dated as of May 1, 1992 among Registrant, certain subsidiaries of the Registrant, NationsBank of Texas, N.A., as Administrative Lender, NationsBank of Texas, N.A., Bank One, Texas, N.A. (formerly Team Bank), Citibank, N.A., The Bank of New York and Texas Commerce Bank, National Association (successor by merger to Texas Commerce Bank--Fort Worth, N.A.) (incorporated by reference to Registrant's 1992 Annual Report on Form 10-K)
10.18 Sixth Amendment to the Revolving Loan Agreement dated as of December 31, 1993 among Registrant, certain subsidiaries of the Registrant, NationsBank of Texas, N.A., as Administrative Lender, NationsBank of Texas, N.A., Bank One, Texas, N.A., Citibank, N.A., The Bank of New York and Texas Commerce Bank, National Association (incorporated by reference to Registrant's 1993 Annual Report on Form 10-K)
10.19 Seventh Amendment to the Revolving Loan Agreement dated as of July 24, 1995 among Registrant, certain subsidiaries of the Registrant, NationsBank of Texas, N.A., as Administrative Lender, NationsBank of Texas, N.A., Bank One, Texas, N.A., The Bank of New York, and Texas Commerce Bank, National Association (incorporated by reference to Registrant's 1995 Annual Report on Form 10-K)
10.20 Term Loan Agreement dated as of December 3, 1990 among the Registrant, NationsBank of Texas, N.A. (formerly NCNB Texas National Bank), Bank One, Texas, N.A. (formerly Team Bank), Citibank, N.A. and Texas Commerce Bank--Fort Worth, N.A. (incorporated by reference to Amendment No. 4 to Registrant's Schedule 14D-9 dated December 6, 1990)
10.21 First Amendment to the Term Loan Agreement dated as of December 31, 1991 among Registrant, certain subsidiaries of the Registrant, NationsBank of Texas, N.A., as Administrative Lender, NationsBank of Texas, N.A., Bank One, Texas, N.A. (formerly Team Bank), Citibank, N.A. and Texas Commerce Bank, National Association (successor by merger to Texas Commerce Bank--Fort Worth, N.A.) (incorporated by reference to Registrant's 1991 Annual Report on Form 10-K)
10.22 Second Amendment to the Term Loan Agreement dated as of May 1, 1992 among Registrant, certain subsidiaries of the Registrant, NationsBank of Texas, N.A., as Administrative Lender, NationsBank of Texas, N.A., Bank One, Texas, N.A. (formerly Team Bank), Citibank, N.A. and Texas Commerce Bank, National Association (successor by merger to Texas Commerce Bank--Fort Worth, N.A.) (incorporated by reference to Registrant's 1992 Annual Report on Form 10-K)
10.23 Third Amendment to the Term Loan Agreement dated as of December 31, 1993 among Registrant, certain subsidiaries of the Registrant, NationsBank of Texas, N.A., as Administrative Lender, NationsBank of Texas, N.A., Bank One, Texas, N.A., Citibank, N.A. and Texas Commerce Bank, National Association (incorporated by reference to Registrant's 1993 Annual Report on Form 10-K)
10.24 Fourth Amendment to the Term Loan Agreement dated as of July 24, 1995 among Registrant, certain subsidiaries of the Registrant, NationsBank of Texas, N.A., as Administrative Lender, NationsBank of Texas, N.A., Bank One, Texas, N.A., and Texas Commerce Bank, National Association (incorporated by reference to Registrant's 1995 Annual Report on Form 10-K)
13 Annual report to shareholders for the year ended December 31, 1996
21 Subsidiaries of the Registrant
23 Report of Independent Auditors and Consent of Independent Auditors (included herein at page S-1)
27 Financial Data Schedules
* Incorporated by reference to Registrant's Amendment No. 1 on Form 8 to Annual Report on Form 10-K dated August 23, 1990.
(b) Reports on Form 8-K
None.
Pages 10, 11, and 12 ================================================================================
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
JUSTIN INDUSTRIES, INC. (Registrant)
By: /S/ JOHN JUSTIN John Justin Chairman of the Board and Chief Executive Officer March 28, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
/S/ JOHN JUSTIN /S/ BAYARD H. FRIEDMAN John Justin Bayard H. Friedman Chairman of the Board and Director, March 28, 1997 Chief Executive Officer March 28, 1997
/S/ J. T. DICKENSON /S/ DEE J. KELLY J. T. Dickenson Dee J. Kelly Director, President and Chief Director, March 28, 1997 Operating Officer March 28, 1997
/S/ RICHARD J. SAVITZ /S/ JOSEPH R. MUSOLINO Richard J. Savitz Joseph R. Musolino Vice President-Finance, Principal Director, March 28, 1997 Finance and Accounting Officer March 28, 1997
/S/ MARVIN GEARHART /S/ JOHN V. ROACH Marvin Gearhart John V. Roach Director, March 28, 1997 Director, March 28, 1997
/S/ ROBERT E. GLAZE /S/ WILLIAM E. TUCKER Robert E. Glaze William E. Tucker Director, March 28, 1997 Director, March 28, 1997 ================================================================================
REPORT OF INDEPENDENT AUDITORS
We have audited the consolidated financial statements of Justin Industries, Inc. as of December 31, 1996 and 1995, and for each of the three years in the period ended December 31, 1996, and have issued our report thereon dated January 29, 1997, incorporated by reference in this Annual Report (Form 10-K). Our audits also included the financial statement schedule listed in Item 14(a) of the Annual Report (Form 10-K). This schedule is the responsibility of the company's management. Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
/S/ ERNST & YOUNG LLP
Fort Worth, Texas January 29, 1997
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form 10-K) of Justin Industries, Inc. of our report dated January 29, 1997, included in the 1996 Annual Report to Shareholders of Justin Industries, Inc.
We also consent to the incorporation by reference in the a) Registration Statement (Form S-8 No. 33-11915) pertaining to the Justin Industries, Inc. 1981 Stock Option Plan and the Justin Industries, Inc. 1984 Incentive Stock Option Plan and in the related Prospectus; b) Registration Statement (Form S-8 No. 33- 52783) pertaining to the Justin Industries, Inc. Employee Stock Ownership Plan and in the related Prospectus; and c) Registration Statement (Form S-8 No. 33- 61776) pertaining to the Justin Industries, Inc. 1992 Stock Option Plan and in the related Prospectus of our reports dated January 29, 1997, with respect to the consolidated financial statements and schedule of Justin Industries, Inc. included or incorporated by reference in this Annual Report (Form 10-K) for the year ended December 31, 1996.
/S/ ERNST & YOUNG LLP
Fort Worth, Texas March 24, 1997
Page S-1 ================================================================================
JUSTIN INDUSTRIES, INC. CONSOLIDATED
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, (in thousands of dollars)
Balance at Additions Balance at Beginning Charged to Deductions End of of Year Income (1) Year (2) ---------- ---------- --------- ----------
Reserve Deducted from Related Assets:
- ---- Doubtful Accounts $ 3,014 $ 866 $ 661 $ 3,219
- ---- Doubtful Accounts $ 3,219 $ 1,347 $ 1,226 $ 3,340
- ---- Doubtful Accounts $ 3,340 $ 2,707 $ 2,978 $ 3,069
(1) Accounts written off, less recoveries.
(2) The reserve for doubtful accounts is deducted from accounts receivable in the financial statements.
Page S-2 ================================================================================