There were 167 press releases posted in the last 24 hours and 170,678 in the last 365 days.

Martin Marietta Reports Third Quarter 2019 Results

Company Establishes New Records for Revenues And Profits

/EIN News/ -- Shipments and Pricing Strength Widespread Across Majority of Building Materials Business;
Aggregates Shipments Up 12 Percent and Pricing Increased 5 Percent

Magnesia Specialties Product Gross Margin Improved 120 Basis Points

Consolidated Gross Margin Expanded 390 Basis Points

Company Raises Full-Year 2019 Guidance

RALEIGH, N.C., Oct. 29, 2019 (GLOBE NEWSWIRE) -- Martin Marietta Materials, Inc. (NYSE:MLM) today reported results for the third quarter ended September 30, 2019. 

Highlights include:

  Quarter Ended September 30,  
 ($ in thousands, except per share) 2019     2018  
Total revenues 1 $ 1,420,246     $ 1,219,640  
Products and services revenues 2 $ 1,323,160     $ 1,142,218  
Building Materials business $ 1,263,826     $ 1,073,853  
Magnesia Specialties business $ 59,334     $ 68,365  
Gross profit $ 420,645     $ 312,984  
Adjusted gross profit 3 $ 420,645     $ 321,333  
Earnings from operations $ 345,263     $ 240,662  
Adjusted earnings from operations 4 $ 345,263     $ 256,213  
Net earnings attributable to Martin Marietta $ 248,573     $ 180,221  
Adjusted EBITDA 5 $ 439,071     $ 344,636  
Earnings per diluted share 6 $ 3.96     $ 2.85  

 

1 Total revenues include the sales of products and services to customers (net of any discounts or allowances) and freight revenues.
2 Products and services revenues include the sales of aggregates, cement, ready mixed concrete, asphalt and Magnesia Specialties products, and paving services to customers, and exclude related freight revenues.
3 2018 third-quarter adjusted gross profit excludes an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting. See Appendix to this earnings release for a reconciliation to reported gross profit under generally accepted accounting principles (GAAP).
4 2018 third-quarter adjusted earnings from operations exclude an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting, acquisition-related expenses, net, and an asset and portfolio rationalization charge. See Appendix to this earnings release for a reconciliation to reported earnings from operations under GAAP.
5 Adjusted EBITDA is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings attributable to Martin Marietta.
6 2018 third-quarter earnings per diluted share includes a charge of $0.10 per diluted share for the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting, a charge of $0.01 per diluted share for acquisition-related expenses, net, and a charge of $0.09 per diluted share for an asset and portfolio rationalization charge.
   

Ward Nye, Chairman, President and CEO of Martin Marietta, stated, “Building on our strong momentum in the first half of the year, we once again delivered exceptional performance, establishing new quarterly records for revenues, gross profit, adjusted EBITDA and earnings per diluted share. These record-setting third-quarter results, driven by broad-based improvements in shipments, pricing and profitability across the majority of our Building Materials business, reflect the disciplined execution of our strategic plan and our team’s unrelenting commitment to operational excellence. Based on recent trends and our solid performance to date, we are raising our outlook for the remainder of 2019.

“We have carefully positioned our business, geographically and otherwise, to capitalize on attractive market fundamentals that support sustainable and long-term construction growth, including employment gains, positive demographic trends and superior state fiscal health. Our third-quarter performance, including double-digit-growth in both aggregates and cement shipments, as well as solid volume growth in our downstream products, demonstrates Martin Marietta’s ability to take advantage of robust underlying demand and the meaningful acceleration of infrastructure construction projects in our key states. These favorable dynamics, combined with the benefits of our locally-driven pricing strategy, underscore the comparative strength of our markets and bode well for continued construction gains. With increased infrastructure activity as a result of state and local transportation funding initiatives, and continued private-sector strength, we are confident that construction activity in our Top 10 states will continue growing and outpacing the nation as a whole.”

Mr. Nye concluded, “In 25 years as a public company, Martin Marietta has thoughtfully developed and consistently executed on its strategic plans, positioning our business as an aggregates leader in attractive high-growth geographies, aligning our product offerings to leverage strategic cement and targeted downstream opportunities and responsibly allocating capital while maintaining financial flexibility. This steadfast and proven strategy, together with our commitment to the world-class attributes of our business – including, safety, ethics, cost discipline and operational excellence – underpins our confidence in Martin Marietta’s outlook for continued profitable growth and enhanced shareholder value creation.”

Third-Quarter Operating Results
(All comparisons are versus the prior-year quarter unless noted otherwise)

  Quarter ended September 30, 2019  
($ in thousands) Revenues   Gross profit (loss)   Gross margin  
Building Materials business:                  
Products and services:                  
Aggregates $ 818,693   $ 287,024     35.1 %
Cement   119,609     48,519     40.6 %
Ready mixed concrete   271,844     28,948     10.6 %
Asphalt and paving   131,099     31,102     23.7 %
Less:  interproduct revenues   (77,419 )   -     -  
Products and services   1,263,826     395,593     31.3 %
Freight   91,543     317   NM  
Total Building Materials business   1,355,369     395,910     29.2 %
Magnesia Specialties business:                  
Products and services   59,334     23,997     40.4 %
Freight   5,543     (987 ) NM  
Total Magnesia Specialties business   64,877     23,010     35.5 %
Corporate   -     1,725   NM  
Total $ 1,420,246   $ 420,645     29.6 %


  Quarter ended September 30, 2018  
($ in thousands) Revenues   Gross profit (loss)   Gross margin  
Building Materials business:                  
Products and services:                  
Aggregates $ 691,822   $ 209,666     30.3 %
Cement   98,223     32,543     33.1 %
Ready mixed concrete   254,686     20,632     8.1 %
Asphalt and paving   95,961     25,022     26.1 %
Less:  interproduct revenues   (66,839 )   -     -  
Products and services   1,073,853     287,863     26.8 %
Freight   72,264     (47 ) NM  
Total Building Materials business   1,146,117     287,816     25.1 %
Magnesia Specialties business:                  
Products and services   68,365     26,823     39.2 %
Freight   5,158     (1,076 ) NM  
Total Magnesia Specialties business   73,523     25,747     35.0 %
Corporate   -     (579 ) NM  
Total $ 1,219,640   $ 312,984     25.7 %


Building Materials Business

Third-quarter operating results demonstrate the strength and breadth of overall demand across the Company’s geographic footprint and product lines, notwithstanding the favorable comparison from a weather-challenged prior-year quarter. Aggregates, cement and downstream operations in Texas and Colorado, the Company’s two largest states by revenues, also benefited from weather-deferred projects from earlier in the year.

Aggregates

Third-quarter aggregates shipments and pricing improved 12.4 percent and 5.3 percent, respectively.

  • Shipments for the Mid-America Group operations increased 14.0 percent, reflecting attractive market fundamentals that have bolstered continued infrastructure and commercial construction activity. Pricing improved 3.5 percent. 
     
  • Shipments for the Southeast Group operations increased 0.8 percent following double-digit-growth in the prior-year quarter. Volume growth was muted by the impact of Hurricane Dorian, as well as the delayed timing of projects in the region. Pricing improved 5.7 percent, reflecting the strength of the North Georgia and Florida markets.
     
  • West Group shipments increased 14.8 percent, driven by energy-related projects along the Gulf Coast, increasing commercial activity in Colorado, and improved weather that allowed customers to advance weather-deferred projects. Pricing growth of 9.2 percent reflected favorable geographic and product mix.

Martin Marietta’s third-quarter aggregates shipments by end use are as follows (all comparisons are versus the prior-year quarter)

Infrastructure Market

  • Aggregates shipments to the infrastructure market increased 7 percent. As expected, transportation-related projects accelerated during the quarter, supported by funding provided by the Fixing America’s Surface Transportation Act (FAST Act) and numerous state and local transportation initiatives and continued reconstruction efforts following flooding in the Midwest. For the quarter, the infrastructure market represented 38 percent of aggregates shipments, which is below the Company’s most recent ten-year average of 46 percent.

Nonresidential Market

  • Aggregates shipments to the nonresidential market increased 19 percent, driven by gains in commercial and heavy industrial construction activity. The Company continued to benefit from distribution center, warehouse, data center and wind energy projects in key geographies, including Texas, the Carolinas, Iowa and Maryland, as well as the early phases of several large energy-sector projects along the Gulf Coast. The nonresidential market represented 34 percent of third-quarter aggregates shipments.     

Residential Market

  • Aggregates shipments to the residential market increased 16 percent, driven by continued homebuilding activity in states such as Texas, Colorado, the Carolinas, Georgia and Florida. The residential construction outlook across the Company’s geographic footprint remains positive for both single- and multi-family housing, driven by favorable demographics, job growth, land availability, low interest rates and efficient permitting. On a national level, housing starts remain below the 50-year annual average of 1.5 million despite notable population gains. The residential market accounted for 22 percent of third-quarter aggregates shipments.

ChemRock/Rail Market

  • The ChemRock/Rail market accounted for the remaining 6 percent of third-quarter aggregates shipments. Volumes to this end use increased 4 percent, driven by improved ballast shipments as the western Class 1 railroads continued to address repairs from the Midwest flooding earlier in the year.

Aggregates product gross margin expanded 480 basis points to 35.1 percent, reflecting pricing gains, improved operating leverage from increased shipment and production levels and the absence of the $8.3 million negative impact of selling acquired inventory after its markup to fair value as part of acquisition accounting incurred in 2018 as part of the Company’s purchase of Bluegrass Materials. 

Cement

Third-quarter cement shipments increased 20.6 percent, driven by strong underlying Texas demand and weather-deferred projects from second-quarter 2019. Unfavorable product mix constrained pricing growth to 1.6 percent. Production efficiencies from increased shipment and production levels, coupled with lower maintenance costs, contributed to the 750-basis-point improvement in product gross margin to 40.6 percent. 

Downstream businesses

Ready mixed concrete shipments increased 9.0 percent and benefitted from healthy demand environments in Texas and Colorado and weather-impacted carryover projects. Ready mixed concrete selling prices declined 2.2 percent, reflecting unfavorable product mix.  Colorado asphalt shipments increased 34.1 percent while pricing improved 3.3 percent. 

Magnesia Specialties Business

Magnesia Specialties product revenues decreased 13.2 percent to $59.3 million as international chemicals and domestic lime customers rationalized inventory levels.  Despite lower revenues, product gross margin improved 120 basis points to 40.4 percent driven by lower costs for contract services and supplies and enhanced cost control measures.

Consolidated

Other operating expenses, net, for the prior-year quarter included a $7.1 million asset and portfolio rationalization charge related to the Company’s Southwest ready mixed concrete business.

Liquidity and Capital Resources

Cash provided by operating activities for the nine months ended September 30 was $649.8 million in 2019 compared with $441.5 million in 2018, driven by growth in earnings before noncash expenses and lower contributions to the Company’s pension plan partially offset by higher working capital related to increased revenues.

Cash paid for property, plant and equipment additions for the nine months ended September 30, 2019 was $283.0 million. The Company expects capital expenditures to range from $375 million to $400 million for the full year.

At September 30, 2019, the Company’s ratio of consolidated net debt-to-consolidated EBITDA, as defined in the applicable credit agreement, for the trailing twelve months was 2.3 times. 

Commitment to Enhance Long-Term Shareholder Value

Martin Marietta is dedicated to disciplined capital allocation that preserves the Company’s financial flexibility and further enhances shareholder value. The Company’s capital allocation priorities remain unchanged and include value-enhancing acquisitions that promote the successful execution of the Company’s strategic growth plan, organic capital investment, and the return of cash to shareholders through meaningful and sustainable dividends and share repurchases.

The Company has returned $1.5 billion to shareholders in the form of dividend payments and share repurchases since announcing a 20 million share repurchase authorization in February 2015. In August 2019, the Board of Directors approved a 15-percent-increase in the quarterly cash dividend, one of the largest increases in the Company’s history. Additionally, during third-quarter 2019, the Company repurchased 29,200 shares of common stock pursuant to its share repurchase authorization.  As of September 30, 2019, 13.9 million shares remained under the current repurchase authorization and 62.5 million shares of Martin Marietta common stock were outstanding.

Full-Year 2019 Outlook

Based on current trends and expectations, management has raised its full-year 2019 guidance. Specifically: 

  • Aggregates shipments by end-use market compared with 2018 levels are as follows:
    • Infrastructure shipments to increase in the high-single digits.
    • Nonresidential shipments to experience a double-digit increase.
    • Residential shipments to experience a double-digit increase.
    • ChemRock/Rail shipments to be up slightly.
2019 GUIDANCE  
($ and tons in thousands, except per ton) Low *     High *  
Consolidated              
Total revenues 1 $ 4,660,000     $ 4,770,000  
Products and services revenues $ 4,360,000     $ 4,460,000  
Freight revenues $ 300,000     $ 310,000  
Gross profit $ 1,175,000     $ 1,230,000  
               
Selling, general and administrative expenses (SG&A) $ 300,000     $ 305,000  
Interest expense $ 130,000     $ 135,000  
Estimated tax rate (excluding discrete events)   20 %     20 %
Net earnings attributable to Martin Marietta $ 585,000     $ 635,000  
Adjusted EBITDA 2 $ 1,245,000     $ 1,305,000  
Capital expenditures $ 375,000     $ 400,000  
               
Building Materials Business              
Aggregates              
Volume (total tons) 3   190,000       191,000  
% growth 3   11.0 %     12.0 %
Average selling price per ton (ASP) $ 14.27     $ 14.40  
% growth 4   4.0 %     5.0 %
Total revenues $ 2,980,000     $ 3,020,000  
Products and services revenues $ 2,720,000     $ 2,750,000  
Freight revenues $ 260,000     $ 270,000  
Gross profit $ 820,000     $ 840,000  
               
Cement              
Total revenues $ 435,000     $ 465,000  
Products and services revenues $ 415,000     $ 445,000  
Freight revenues $ 20,000     $ 20,000  
Gross profit $ 135,000     $ 155,000  
               
Ready Mixed Concrete and Asphalt and Paving              
Products and services revenues $ 1,245,000     $ 1,275,000  
Gross profit $ 130,000     $ 140,000  
               
Magnesia Specialties Business              
Total revenues $ 290,000     $ 300,000  
Products and services revenues $ 250,000     $ 260,000  
Freight revenues $ 20,000     $ 20,000  
Gross profit $ 90,000     $ 95,000  


 *  Guidance range represents the low end and high end of the respective line items provided above.
1 2019 consolidated total revenues exclude $270 million related to estimated interproduct sales.
2 Adjusted EBITDA is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings attributable to Martin Marietta.
3 Represents total aggregates volumes, which includes approximately 10.0 million internal tons. Volume growth ranges are in comparison with total volumes of 170.8 million tons for the full year 2018, which included 10.6 million internal tons.
4 ASP growth range is in comparison with ASP of $13.71 per ton for the full year 2018.

Preliminary View of 2020

Based on a preliminary view of 2020, management currently anticipates low-to-mid-single-digit growth in aggregates shipments and mid-single-digit growth in aggregates pricing. Martin Marietta’s geographic footprint has attractive underlying market fundamentals, including notable employment gains, population growth and superior state fiscal health, that should promote steady and sustainable construction growth over the near- and medium-terms. Supported by region-specific third-party forecasts and underlying demand trends, Martin Marietta believes the current construction cycle will continue for the foreseeable future and expand at a steady pace in 2020 for each of its three primary construction end-use markets. Notably:

  • Infrastructure construction, particularly for aggregates-intensive highways and streets, should continue to benefit from the acceleration in state lettings and contract awards in key Martin Marietta states, continued FAST Act funding, and regulatory reform that allows for reduced permitting time for large projects. Management believes that federal transportation funding will continue, at a minimum, at status quo levels absent the prospective passage of a successor infrastructure bill prior to the FAST Act’s September 2020 expiration. This should provide the necessary confidence and visibility for states to continue to advance planned and future construction projects. Importantly, states will continue to play an expanded role in infrastructure investment. Incremental funding at the state and local levels, through bond issuances, toll roads and tax initiatives, should grow at faster near-term rates than federal funding. Martin Marietta’s top ten states – Texas, Colorado, North Carolina, Georgia, Iowa, Florida, South Carolina, Indiana, Maryland and Nebraska – accounted for 85 percent of total Building Materials’ revenues in 2018 and have all introduced incremental transportation funding measures within the last five years. Third-party forecasts also predict increased infrastructure investment in 2020 and beyond.

  • Nonresidential construction should increase in both the commercial and heavy industrial sectors for the next several years across many of the Company’s key markets. While the national Architectural Billings and Dodge Momentum Indices have moved modestly in 2019, management believes continued employment growth will provide the impetus for sustainable commercial construction activity. Continued federal regulatory approvals should contribute to increased heavy building materials consumption from the next wave of large energy-sector projects, particularly along the Gulf Coast. Construction activity for these projects is expected to continue for several years. 

  • Residential construction should continue to grow within Martin Marietta’s geographic footprint, particularly as mortgage rates remain attractive and homebuilders address the need for more affordable homes. The Company’s leading positions in southeastern and southwestern states offer superior opportunities, such as available land, an overall business-friendly environment and fewer regulatory barriers, for gains in both multi- and single-family housing. The Company believes that permits represent the best indicator of future housing construction. Martin Marietta’s top ten states significantly outpaced the nation in housing unit permit growth for the trailing twelve months ended September 2019 for both multi-family and single-family. Continued strength in residential construction supports future infrastructure and nonresidential activity.

Non-GAAP Financial Information

This earnings release contains financial measures that have not been prepared in accordance with GAAP.  Reconciliations of non-GAAP financial measures to the closest GAAP measure are included in the accompanying Appendix to this earnings release. Management believes these non-GAAP measures are commonly used financial measures for investors to evaluate the Company’s operating performance, and when read in conjunction with the Company’s consolidated financial statements, present a useful tool to evaluate the Company’s ongoing operations, performance from period to period and anticipated performance. In addition, these are some of the factors the Company uses in internal evaluations of the overall performance of its businesses. Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.

Conference Call Information

The Company will discuss its third-quarter 2019 earnings results on a conference call and an online web simulcast today (October 29, 2019). The live broadcast of the Martin Marietta conference call will begin at 11:00 a.m. Eastern Time today. An online replay will be available approximately two hours following the conclusion of the live broadcast. A link to these events will be available at the Company’s website. Additionally, the Company has posted supplemental information related to its third-quarter performance on its website. For those investors without online web access, the conference call may also be accessed by calling (970) 315-0423, confirmation number 4498534.

About Martin Marietta

Martin Marietta, a member of the S&P 500 Index, is an American-based company and a leading supplier of building materials, including aggregates, cement, ready mixed concrete and asphalt. Through a network of operations spanning 27 states, Canada and The Bahamas, dedicated Martin Marietta teams supply the resources necessary for building the solid foundations on which our communities thrive. Martin Marietta’s Magnesia Specialties business provides a full range of magnesium oxide, magnesium hydroxide and dolomitic lime products. For more information, visit www.martinmarietta.com or www.magnesiaspecialties.com

Investor Contact:  

Suzanne Osberg
Vice President, Investor Relations
(919) 783-4691
Suzanne.Osberg@martinmarietta.com

MLM-E.

If you are interested in Martin Marietta Materials, Inc. stock, management recommends that, at a minimum, you read the Company’s current annual report and Forms 10-K, 10-Q and 8-K reports to the Securities and Exchange Commission (SEC) over the past year.  The Company’s recent proxy statement for the annual meeting of shareholders also contains important information.  These and other materials that have been filed with the SEC are accessible through the Company’s website at www.martinmarietta.com and are also available at the SEC’s website at www.sec.gov.  You may also write or call the Company’s Corporate Secretary, who will provide copies of such reports.

Investors are cautioned that all statements in this press release that relate to the future involve risks and uncertainties, and are based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results.  These statements, which are forward-looking statements under the Private Securities Litigation Reform Act of 1995, give the investor the Company’s expectations or forecasts of future events.  You can identify these statements by the fact that they do not relate only to historical or current facts.  They may use words such as “anticipate”, “expect”, “should”, “believe”, “will”, and other words of similar meaning in connection with future events or future operating or financial performance.  Any or all of our forward-looking statements here and in other publications may turn out to be wrong.

The Company’s outlook is subject to various risks and uncertainties, and is based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results. Factors that the Company currently believes could cause actual results to differ materially from the forward-looking statements in this press release (including the outlook) include, but are not limited to: the performance of the United States economy; shipment declines resulting from economic events beyond the Company’s control; a widespread decline in aggregates pricing, including a decline in aggregates volume negatively affecting aggregates price; the history of both cement and ready mixed concrete being subject to significant changes in supply, demand and price fluctuations; the termination, capping and/or reduction or suspension of the federal and/or state gasoline tax(es) or other revenue related to infrastructure construction; the level and timing of federal, state or local transportation or infrastructure projects funding, most particularly in Texas, Colorado, North Carolina, Georgia, Iowa and Maryland; the United States Congress’ inability to reach agreement among themselves or with the current Administration on policy issues that impact the federal budget; the ability of states and/or other entities to finance approved projects either with tax revenues or alternative financing structures; levels of construction spending in the markets the Company serves; a reduction in defense spending and the subsequent impact on construction activity on or near military bases; a decline in the commercial component of the nonresidential construction market, notably office and retail space; a decline in energy-related construction activity resulting from a sustained period of low global oil prices or changes in oil production patterns in response to this decline, particularly in Texas; a slowdown in residential construction recovery; unfavorable weather conditions, particularly Atlantic Ocean and Gulf Coast hurricane activity, the late start to spring or the early onset of winter and the impact of a drought or excessive rainfall in the markets served by the Company, any of which can significantly affect production schedules, volumes, product and/or geographic mix and profitability; the volatility of fuel costs, particularly diesel fuel, and the impact on the cost, or the availability generally, of other consumables, namely steel, explosives, tires and conveyor belts, and with respect to the Company’s Magnesia Specialties business, natural gas; continued increases in the cost of other repair and supply parts; construction labor shortages and/or supply‐chain challenges; unexpected equipment failures, unscheduled maintenance, industrial accident or other prolonged and/or significant disruption to production facilities; increasing governmental regulation, including environmental laws; transportation availability or a sustained reduction in capital investment by the railroads, notably the availability of railcars, locomotive power and the condition of rail infrastructure to move trains to supply the Company’s Texas, Colorado, Florida, North Carolina and the Gulf Coast markets, including the movement of essential dolomitic lime for magnesia chemicals to the Company’s plant in Manistee, Michigan and its customers; increased transportation costs, including increases from higher or fluctuating passed-through energy costs or fuel surcharges, and other costs to comply with tightening regulations, as well as higher volumes of rail and water shipments; availability of trucks and licensed drivers for transport of the Company’s materials; availability and cost of construction equipment in the United States; weakening in the steel industry markets served by the Company’s dolomitic lime products;  a trade dispute with one or more nations impacting the U.S. economy, including the impact of tariffs on the steel industry; unplanned changes in costs or realignment of customers that introduce volatility to earnings, including that of the Magnesia Specialties business that is running at capacity; proper functioning of information technology and automated operating systems to manage or support operations; inflation and its effect on both production and interest costs; the concentration of customers in construction markets and the increased risk of potential losses on customer receivables; the impact of the level of demand in the Company’s end-use markets, production levels and management of production costs on the operating leverage and therefore profitability of the Company;  the possibility that the expected synergies from acquisitions will not be realized or will not be realized within the expected time period, including achieving anticipated profitability to maintain compliance with the Company’s leverage ratio debt covenant; changes in tax laws, the interpretation of such laws and/or administrative practices that would increase the Company’s tax rate;  violation of the Company’s debt covenant if price and/or volumes return to previous levels of instability; continued downward pressure on the Company’s common stock price and its impact on goodwill impairment evaluations; the possibility of a reduction of the Company’s credit rating to non-investment grade; and other risk factors listed from time to time found in the Company’s filings with the SEC. 

You should consider these forward-looking statements in light of risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2018 and other periodic filings made with the SEC.  All of our forward-looking statements should be considered in light of these factors.  In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of our forward-looking statements, or adversely affect or be material to the Company.  The Company assumes no obligation to update any such forward-looking statements. 

MARTIN MARIETTA MATERIALS, INC.
Unaudited Statements of Earnings
(In thousands, except per share amounts)
               
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
   2019    2018    2019    2018
Products and services revenues $ 1,323,160     $ 1,142,218     $ 3,397,599     $ 3,024,300  
Freight revenues   97,086       77,422       241,069       199,747  
Total revenues   1,420,246       1,219,640       3,638,668       3,224,047  
               
Cost of revenues - products and services   901,844       828,110       2,474,333       2,282,159  
Cost of revenues - freight   97,757       78,546       243,917       202,595  
Total cost of revenues   999,601       906,656       2,718,250       2,484,754  
Gross Profit   420,645       312,984       920,418       739,293  
               
Selling general & administrative expenses   78,281       68,441       228,955       209,632  
Acquisition-related expenses, net   -       89       190       12,925  
Other operating (income) and expense, net   (2,899 )     3,792       (9,092 )     (26,960 )
Earnings from operations   345,263       240,662       700,365       543,696  
               
Interest expense   32,436       35,468       98,680       103,526  
Other nonoperating (income) and expense, net   (1,973 )     (4,248 )     9,690       (19,873 )
Earnings before income tax expense   314,800       209,442       591,995       460,043  
Income tax expense   66,178       29,089       111,077       84,147  
Consolidated net earnings   248,622       180,353       480,918       375,896  
Less: Net earnings attributable to noncontrolling interests   49       132       17       275  
Net Earnings Attributable to Martin Marietta Materials, Inc. $ 248,573     $ 180,221     $ 480,901     $ 375,621  
               
Net earnings per common share attributable to common shareholders:              
Basic $ 3.97     $ 2.86     $ 7.67     $ 5.95  
Diluted $ 3.96     $ 2.85     $ 7.65     $ 5.93  
               
Dividends per common share $ 0.55     $ 0.48     $ 1.51     $ 1.36  
               
Average number of common shares outstanding:              
Basic   62,510       62,932       62,552       62,970  
Diluted   62,679       63,167       62,725       63,224  
               


MARTIN MARIETTA MATERIALS, INC.
Unaudited Financial Highlights
(In thousands)
               
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
   2019    2018    2019    2018
Total revenues:              
Building Materials Business:              
Mid-America Group $ 448,758     $ 377,005     $ 1,112,897     $ 906,377  
Southeast Group   134,138       125,547       390,399       318,749  
West Group   772,473       643,565       1,920,182       1,783,174  
Total Building Materials Business   1,355,369       1,146,117       3,423,478       3,008,300  
Magnesia Specialties   64,877       73,523       215,190       215,747  
Total $ 1,420,246     $ 1,219,640     $ 3,638,668     $ 3,224,047  
               
Gross profit (loss):              
Building Materials Business:              
Mid-America Group $ 174,370     $ 131,331     $ 375,376     $ 270,461  
Southeast Group   36,768       30,783       100,773       56,933  
West Group   184,772       125,702       366,233       333,949  
Total Building Materials Business   395,910       287,816       842,382       661,343  
Magnesia Specialties   23,010       25,747       76,590       73,476  
Corporate   1,725       (579 )     1,446       4,474  
Total $ 420,645     $ 312,984     $ 920,418     $ 739,293  
               
Selling, general and administrative expenses:              
Building Materials Business:              
Mid-America Group $ 16,023     $ 14,113     $ 47,158     $ 41,260  
Southeast Group   5,287       4,440       16,040       13,689  
West Group   29,285       26,600       86,280       79,892  
Total Building Materials Business   50,595       45,153       149,478       134,841  
Magnesia Specialties   2,856       2,404       8,518       7,512  
Corporate   24,830       20,884       70,959       67,279  
Total $ 78,281     $ 68,441     $ 228,955     $ 209,632  
               
Earnings (Loss) from operations:              
Building Materials Business:              
Mid-America Group $ 159,711     $ 120,344     $ 332,344     $ 235,221  
Southeast Group   31,463       26,372       85,285       60,464  
West Group   156,382       92,090       286,540       249,885  
Total Building Materials Business   347,556       238,806       704,169       545,570  
Magnesia Specialties   20,097       23,301       67,959       65,867  
Corporate   (22,390 )     (21,445 )     (71,763 )     (67,741 )
Total $ 345,263     $ 240,662     $ 700,365     $ 543,696  
               


MARTIN MARIETTA MATERIALS, INC.
Unaudited Financial Highlights (Continued)
(In thousands)
               
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
   2019    2018    2019    2018
Total revenues:              
Building Materials business products and services:              
Aggregates $ 818,693     $ 691,822     $ 2,121,443     $ 1,785,961  
Cement   119,609       98,223       330,976       300,554  
Ready Mixed Concrete   271,844       254,686       724,179       750,424  
Asphalt and paving   131,099       95,961       225,669       191,652  
Less: Interproduct sales   (77,419 )     (66,839 )     (203,554 )     (205,681 )
Subtotal   1,263,826       1,073,853       3,198,713       2,822,910  
Freight   91,543       72,264       224,765       185,390  
Total Building Materials Business   1,355,369       1,146,117       3,423,478       3,008,300  
Magnesia Specialties business:              
Products and services   59,334       68,365       198,886       201,390  
Freight   5,543       5,158       16,304       14,357  
Total Magnesia Specialties Business   64,877       73,523       215,190       215,747  
Consolidated total revenues $ 1,420,246     $ 1,219,640     $ 3,638,668     $ 3,224,047  
               
Gross profit (loss):              
Building Materials business products and services:              
Aggregates $ 287,024     $ 209,666     $ 636,505     $ 461,912  
Cement   48,519       32,543       104,526       97,582  
Ready Mixed Concrete   28,948       20,632       62,454       66,226  
Asphalt and paving   31,102       25,022       38,519       35,191  
Subtotal   395,593       287,863       842,004       660,911  
Freight   317       (47 )     378       432  
Total Building Materials Business   395,910       287,816       842,382       661,343  
Magnesia Specialties business:              
Products and services   23,997       26,823       79,816       76,756  
Freight   (987 )     (1,076 )     (3,226 )     (3,280 )
Total Magnesia Specialties Business   23,010       25,747       76,590       73,476  
Corporate   1,725       (579 )     1,446       4,474  
Consolidated gross profit $ 420,645     $ 312,984     $ 920,418     $ 739,293  
               


MARTIN MARIETTA MATERIALS, INC.
Balance Sheet Data
(In thousands)
       
  September 30,   December 31,
   2019    2018
  (Unaudited)   (Audited)
ASSETS      
Cash and cash equivalents $ 49,087   $ 44,892
Accounts receivable, net   763,878     523,276
Inventories, net   649,716     663,035
Other current assets   115,717     134,613
Property, plant and equipment, net   5,132,147     5,157,229
Intangible assets, net   2,888,578     2,900,400
Operating lease right-of-use assets   484,853     -
Other noncurrent assets   139,509     127,974
Total assets $ 10,223,485   $ 9,551,419
       
LIABILITIES AND EQUITY      
Current maturities of long-term debt and short-term facilities $ 190,044   $ 390,042
Other current liabilities   498,938     396,708
Long-term debt (excluding current maturities)   2,732,815     2,730,439
Other noncurrent liabilities   1,497,250     1,084,818
Total equity   5,304,438     4,949,412
Total liabilities and equity $ 10,223,485   $ 9,551,419
       


MARTIN MARIETTA MATERIALS, INC.
Unaudited Statements of Cash Flows
(In thousands)
  Nine Months Ended
  September 30,
   2019    2018
Operating activities:      
Consolidated net earnings $ 480,918     $ 375,896  
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities:      
Depreciation, depletion and amortization   276,974       253,200  
Stock-based compensation expense   28,414       23,084  
Gains on divestitures and sales of assets   (4,950 )     (35,167 )
Deferred income taxes   18,352       68,833  
Other items, net   11,422       (2,107 )
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:      
Accounts receivable, net   (240,602 )     (132,176 )
Inventories, net   13,573       (8,015 )
Accounts payable   65,897       42,995  
Other assets and liabilities, net   (200 )     (145,005 )
Net cash provided by operating activities   649,798       441,538  
       
Investing activities:      
Additions to property, plant and equipment   (282,998 )     (262,155 )
Acquisitions, net   -       (1,640,698 )
Proceeds from divestitures and sales of assets   6,981       63,460  
Investments in life insurance contracts, net   559       771  
Payment of railcar construction advances   -       (56,033 )
Reimbursement of railcar construction advances   -       56,033  
Other investing activities, net   (1,214 )     -  
Net cash used for investing activities   (276,672 )     (1,838,622 )
       
Financing activities:      
Borrowings of long-term debt   245,000       875,000  
Repayments of long-term debt   (445,042 )     (695,039 )
Payments on financing leases   (2,651 )     -  
Payments on capital leases   -       (2,589 )
Debt issue costs   -       (3,194 )
Payments of deferred acquisition consideration   -       (6,707 )
Purchase of remaining interest in existing joint venture   -       (12,800 )
Dividends paid   (95,227 )     (86,190 )
Repurchases of common stock   (57,288 )     (60,377 )
Proceeds from exercise of stock options   12,295       6,993  
Shares withheld for employees' income tax obligations   (25,418 )     (10,416 )
Distributions to owners of noncontrolling interest   (600 )     -  
Net cash (used for) provided by financing activities   (368,931 )     4,681  
       
Net increase (decrease) in cash and cash equivalents   4,195       (1,392,403 )
Cash and cash equivalents, beginning of period   44,892       1,446,364  
Cash and cash equivalents, end of period $ 49,087     $ 53,961  
       


MARTIN MARIETTA MATERIALS, INC.
Unaudited Operational Highlights
               
  Three Months Ended   Nine Months Ended
  September 30, 2019   September 30, 2019
  Volume   Pricing   Volume   Pricing
Volume/Pricing Variance (1)              
Mid-America Group   14.0 %     3.5 %     19.2 %     1.9 %
Southeast Group   0.8 %     5.7 %     15.9 %     5.4 %
West Group   14.8 %     9.2 %     7.4 %     5.5 %
Total Aggregates Product Line  (2)   12.4 %     5.3 %     14.2 %     3.9 %
               
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
Shipments (tons in thousands)  2019    2018    2019    2018
Mid-America Group   29,851       26,194       73,342       61,510  
Southeast Group   7,209       7,151       20,819       17,967  
West Group   19,609       17,086       53,042       49,389  
Total Aggregates Product Line  (2)   56,669       50,431       147,203       128,866  
               
(1) Volume/pricing variances reflect the percentage increase from the comparable period in the prior year.
(2) Aggregates Product Line includes acquisitions from the date of acquisition and divestitures through the date of disposal.
               
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
   2019    2018    2019    2018
Shipments (in thousands)              
Aggregates tons - external customers   53,580       47,549       139,423       120,713  
Internal aggregates tons used in other product lines   3,089       2,882       7,780       8,153  
Total aggregates tons   56,669       50,431       147,203       128,866  
               
Cement tons - external customers   733       587       2,011       1,767  
Internal cement tons used in other product lines   327       292       912       966  
Total cement tons   1,060       879       2,923       2,733  
               
Ready Mixed Concrete - cubic yards   2,433       2,232       6,530       6,799  
               
Asphalt tons - external customers   400       287       666       601  
Internal asphalt tons used in road paving business   936       709       1,582       1,420  
Total asphalt tons   1,336       996       2,248       2,021  
               
Average unit sales price by product line (including internal sales):
Aggregates (per ton) $ 14.37     $ 13.65     $ 14.31     $ 13.78  
Cement (per ton) $ 112.36     $ 110.63     $ 112.53     $ 108.92  
Ready Mixed Concrete (per cubic yard) $ 109.72     $ 112.14     $ 108.75     $ 108.36  
Asphalt (per ton) $ 46.67     $ 45.17     $ 46.83     $ 44.98  
               


MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures
(Dollars in thousands)
               
The ratio of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing twelve months is a covenant under the Company's revolving credit facility and accounts receivable securitization facility. Under the terms of these agreements, as amended, the Company's ratio of Consolidated Debt-to-Consolidated EBITDA as defined, for the trailing twelve months cannot exceed 3.50 times as of September 30, 2019, with certain exceptions related to qualifying acquisitions, as defined.
               
The following presents the calculation of Consolidated Debt-to-Consolidated EBITDA, as defined by the Company's Credit Agreement, at September 30, 2019, for the trailing-twelve-month EBITDA. For supporting calculations, refer to the Company's website at www.martinmarietta.com.
               
                Twelve Month Period
                October 1, 2018 to
                September 30, 2019
Earnings from continuing operations attributable to Martin Marietta Materials, Inc.                 $ 575,278
Add back:                
Interest expense                   132,223
Income tax expense                   132,586
Depreciation, depletion and amortization expense and noncash nonconsolidated equity affiliate adjustment                   378,205
Stock-based compensation expense                   34,583
Acquisition-related expenses, net                   664
Noncash portion of asset and portfolio rationalization charge                   11,725
Deduct:                
Interest income                   (511)
Consolidated EBITDA, as defined by the Company's Credit Agreement                 $ 1,264,753
                 
Consolidated Debt, as defined and including debt for which the Company is a co-borrower, at September 30, 2019                 $ 2,935,066
                     
Consolidated Debt-to-Consolidated EBITDA, as defined by the Company's Credit Agreement, at September 30, 2019, for the trailing-twelve-month EBITDA                   2.32 times
               
                 
Earnings before interest, income taxes, depreciation, depletion and amortization, the noncash earnings/loss from nonconsolidated equity affiliates, the impact of Bluegrass acquisition-related expenses, net, the impact of selling acquired inventory after the markup to fair value as part of acquisition accounting, and the asset and portfolio rationalization charge (Adjusted EBITDA) is an indicator used by the Company and investors to evaluate the Company's operating performance from period to period. Adjusted EBITDA is not defined by generally accepted accounting principles and, as such, should not be construed as an alternative to net earnings or operating cash flow. For further information on Adjusted EBITDA, refer to the Company's website at www.martinmarietta.com. Consolidated Adjusted EBITDA is as follows:
               
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2019   2018(1)   2019   2018(1)
Consolidated Adjusted EBITDA $ 439,071     $ 344,636   $ 975,769   $ 841,999
               
A Reconciliation of Net Earnings Attributable to Martin Marietta to Consolidated Adjusted EBITDA is as follows:
       
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2019   2018(1)   2019   2018(1)
Net earnings attributable to Martin Marietta $ 248,573     $ 180,221   $ 480,901   $ 375,621
Add back:              
Interest expense   32,321       35,468     98,366     103,526
Income tax expense for controlling interests   66,143       29,051     111,019     84,070
Depreciation, depletion and amortization and earnings/loss from nonconsolidated equity affiliates   92,034       84,345     285,483     240,228
Bluegrass acquisition-related expenses, net   -       89     -     12,925
Impact of selling acquired inventory after markup to fair value as part of acquisition accounting   -       8,349     -     18,516
Asset and portfolio rationalization charge   -       7,113     -     7,113
Consolidated adjusted EBITDA $ 439,071     $ 344,636   $ 975,769   $ 841,999
               
(1) Calculation of Adjusted EBITDA was modified in 2019. 2018 amounts have been calculated consistently with the 2019 presentation.
                 
The following is a reconciliation of the GAAP measure to the 2019 Adjusted EBITDA guidance:          
          Low Point of Range     High Point of Range
Net earnings attributable to Martin Marietta               $ 585,000   $ 635,000
Add back:                  
Interest expense                 135,000     130,000
Taxes on income                 145,000     160,000
Depreciation, depletion and amortization and earnings/loss from nonconsolidated equity affiliates                 380,000     380,000
Adjusted EBITDA               $ 1,245,000   $ 1,305,000
                   
Adjusted gross profit and adjusted earnings from operations for the three months ended September 30, 2018, exclude the impact of selling acquired inventory after the markup to fair value as part of acquisition accounting. Adjusted earnings from operations also exclude acquisition-related expenses, net, and the asset and portfolio rationalization charge. Adjusted gross profit and adjusted earnings from operations are non-GAAP financial measures. Management presents these measures for investors and analysts to evaluate and forecast the Company's financial results, as the impact of selling acquired inventory after the markup to fair value as part of acquisition accounting, Bluegrass acquisition-related expenses, net, and the asset and portfolio rationalization charge are nonrecurring.
               
The following is a reconciliation of the GAAP measure to adjusted gross profit and adjusted earnings from operations for the quarter ended September 30, 2018:
                 
Gross profit as reported                 $ 312,984
Impact of selling acquired inventory after the markup to fair value as part of acquisition accounting                   8,349
Adjusted gross profit                 $ 321,333
                 
Earnings from operations as reported                 $ 240,662
Impact of selling acquired inventory after the markup to fair value as part of acquisition accounting                   8,349
Bluegrass acquisition-related expenses, net                   89
Asset and portfolio rationalization charge                   7,113
Adjusted earnings from operations                 $ 256,213
                 

Primary Logo


EIN Presswire does not exercise editorial control over third-party content provided, uploaded, published, or distributed by users of EIN Presswire. We are a distributor, not a publisher, of 3rd party content. Such content may contain the views, opinions, statements, offers, and other material of the respective users, suppliers, participants, or authors.