Martin Marietta Reports First Quarter 2017 Earnings Per Diluted Share of $0.67
Achieves Record First-Quarter
Improves Aggregates Product Line Pricing by 5.3 Percent
Southeast Group Generates Double-Digit Pricing and Volume Growth
Reaches Record
Reaffirms Guidance with Continued Momentum of Durable Economic Recovery
First Quarter 2017 Operational and Financial Highlights:
(All comparisons are versus prior-year first quarter)
- Record consolidated net sales of
$791.7 million increased 7.9% compared with$734.0 million - Record
Building Materials net sales of$728.4 million compared with$674.5 million , an increase of 8.0%, and record Magnesia Specialties net sales of$63.3 million compared with$59.5 million , an increase of 6.4% - Record consolidated gross profit of
$147.1 million compared with$145.3 million - EBITDA of
$147.7 million - Aggregates product line pricing increase of 5.3%; volume relatively flat
- Returned
$126.6 million to shareholders through the repurchase of 458,000 shares and dividends
"Our results for the quarter are particularly impressive when considering the comparison against a record first quarter in 2016, which, as we have previously noted in our public commentary, was largely aided by the unseasonably cold and wet conditions in late 2015 which created meaningful project and shipment delays. By contrast, this year's first quarter was measured against a more normalized period. Importantly, our 2017 performance was driven by each product line in our
"Strategic acquisitions in our targeted, downstream markets, predominantly
"In anticipation of a busy 2017, we accelerated several operational initiatives in the first quarter. Where possible, we increased production, invested in our labor force, and performed grading and equipment maintenance early to ensure our operations are poised to satisfy anticipated customer needs, particularly for high-demand products that meet
"We remain highly confident that we are in a multi-year construction recovery and that Martin Marietta is particularly well positioned to benefit from the expected increased demand. We are strategically aligned with the right people and the right assets in premier market positions to enhance long-term shareholder value."
Mr. Nye's full CEO Earnings Commentary and Market Perspective can be found on the investor relations portion of the Company's website.
NOTABLE ITEMS FOR THE FIRST-QUARTER ENDED
(All growth and margin comparisons are versus the prior-year first quarter)
Quarter-ended |
||||||||||||||
2017 | 2016 | |||||||||||||
Consolidated net sales | $ | 791.7M | $ | 734.0M | ||||||||||
% variance | 7.9% | |||||||||||||
Consolidated gross profit | $ | 147.1M | $ | 145.3M | ||||||||||
% variance | 1.3% | |||||||||||||
Consolidated gross profit margin (excluding freight and delivery revenues) |
18.6% | 19.8% | ||||||||||||
margin variance | (120) bps | |||||||||||||
Earnings from operations | $ | 77.2M | $ | 86.0M | ||||||||||
% variance | (10.3)% | |||||||||||||
EBITDA 1 | $ | 147.7M | $ | 152.6M | ||||||||||
% variance | (3.2)% | |||||||||||||
EBITDA margin as a % of net sales | 18.7% | 20.8% | ||||||||||||
margin variance | (210) bps | |||||||||||||
Earnings per diluted share | $ | 0.67 | $ | 0.69 | ||||||||||
% variance | (2.9)% | |||||||||||||
1 See appendix for a reconciliation to net earnings.
OPERATING RESULTS
(All comparisons are versus the prior-year period unless noted otherwise)
Building Materials Business
In the first quarter of 2017, net sales for the
Aggregates product line shipments were relatively flat compared with a record-breaking first quarter of 2016; however, the Southeast Group's volume increased 16.4 percent. The Mid-America and West Group's modest shipment decreases of 1.5 percent and 3.8 percent, respectively, are against a very strong early 2016. Including shipments from acquired businesses, ready mixed concrete shipments increased 15.1 percent. Total cement shipments decreased 5.4 percent, again, versus a challenging prior year comparison.
Gross margin (excluding freight and delivery revenues) for the
Infrastructure Market Highlights
- For the quarter, shipments to the infrastructure market comprised 37 percent of aggregates product line volumes. The percentage of shipments going into the infrastructure market remains below the Company's five-year average, attributable to continued under-investment in the nation's infrastructure and greater private sector nonresidential and residential investments. Also, infrastructure construction activity predictably saw little first-quarter benefit from the Fixing America's Surface Transportation, or FAST, Act. Management expects increased federal, state and local infrastructure activity as the year progresses and the construction season begins in earnest.
Nonresidential Market Highlights
- The nonresidential market represented 32 percent of first-quarter aggregates product line shipments. The light nonresidential market, which consists primarily of office and retail construction, increased for the quarter; however, heavy nonresidential activity, which includes industrial building as well as energy and energy-related construction, was lower, resulting in a 5.0 percent decrease in overall nonresidential shipments.
- In-line with management's expectations, the decline in heavy nonresidential was primarily due to the completion in 2016 of several large energy-related projects in the
West Group that were not immediately replaced in the first quarter 2017 and also a more typical start to the Mid-America Group's construction season.
Residential Market Highlights
- The residential market accounted for 22 percent of aggregates product line shipments for the first quarter.
- Volumes to this segment increased 27 percent, driven by continued strength in housing across the Company's geographic footprint.
Florida ,Texas ,North Carolina andGeorgia , key geographies for theBuilding Materials business, comprised the top 4 states for single family housing starts as ofFebruary 2017 . Additionally, on the metro-level,Austin ,Atlanta ,Charlotte ,Dallas ,Orlando ,Tampa andRaleigh comprised the top 7 for single family unit starts, with all butDallas experiencing double-digit growth.
The
Magnesia Specialties Business
In the first quarter of 2017, net sales for the Magnesia Specialties business were
Steel capacity utilization has increased to approximately 74 percent in 2017, compared with the prior-year utilization rate of approximately 72 percent.
CONSOLIDATED OPERATING RESULTS
SG&A expenses were 8.8 percent of net sales, reflective of a higher first-quarter accrual rate in performance-based incentive compensation compared with the prior-year quarter. Earnings from operations for the first quarter were
The estimated effective income tax rate was 26 percent for the first quarter 2017, driven primarily by excess tax benefits associated with option exercises and vesting of stock-based compensation awards. During the first quarter of 2017, the Company adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which requires excess income tax benefits and tax deficiencies be recorded in tax expense, as a discrete event, in the period shares are issued or options are exercised.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities for the first quarter was
Property, plant and equipment additions for the first quarter 2017 were
At
COMMITMENT TO INCREASING SHAREHOLDER VALUE
The Board of Directors of Martin Marietta previously authorized a share repurchase program under which the Company may acquire up to 20 million shares of its outstanding common stock. Repurchases are expected to be carried out through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated share purchase transactions, or any combination of such methods. The Company expects to complete the repurchase program over the next several years, though the actual timing of completion will be based on an ongoing assessment of the capital needs of the business, the market price of the Company's common stock and general market conditions. Share repurchases will be undertaken based on then-current business and market factors; therefore, the actual return of capital in any single quarter may vary. The repurchase program may be modified, suspended or discontinued by the Company at any time without prior notice.
In the first quarter 2017, the Company repurchased 458,000 shares and paid a cash dividend of
FULL-YEAR 2017 OUTLOOK
The Company is encouraged by positive trends in the markets it serves and its ability to execute its strategic business plans. Notably:
- Public sector growth is expected to continue in 2017 as new monies flow into the system. FAST Act projects should accelerate through the year, supported by ongoing activity funded through the Transportation Infrastructure Finance and Innovation Act (TIFIA). Additionally, state and local initiatives increasing infrastructure funding, including ballot initiatives passed over the past 24 months, are expected to grow and continue to play an expanded role in public-sector activity.
- Nonresidential construction is expected to modestly increase in both the heavy industrial and commercial sectors. The Dodge Momentum Index is at its highest level since 2009, signaling continued growth. Additional energy-related economic activity, including follow-on public and private construction, will be mixed. While
$47 billion of new energy-related projects are scheduled to start in 2017 and 2018, the certainty and timing of commencement will affect nonresidential growth. - Residential construction is expected to continue growing, particularly in key Martin Marietta markets, driven by employment gains, historically low levels of construction activity over the previous years, low mortgage rates, higher lot development, and higher multi-family rental rates.
Based on these trends and expectations, including a return to more normal weather patterns, the Company anticipates achieving the following for the full year:
- Aggregates product line end-use markets compared with 2016 levels are as follows:
- Infrastructure market to increase mid-single digits.
- Nonresidential market to increase in the low- to mid-single digits.
- Residential market to increase in the mid- to high-single digits.
ChemRock /Rail market to remain stable.
2017 GUIDANCE |
||||||||||||||
Low |
High |
|||||||||||||
Consolidated Results |
||||||||||||||
Consolidated net sales 1 |
|
|
||||||||||||
Consolidated gross profit |
|
|
||||||||||||
SG&A | $ | 255M | $ | 265M | ||||||||||
Interest expense | $ | 85M | $ | 90M | ||||||||||
Estimated tax rate (excluding discrete events) | 30% | 30% | ||||||||||||
Capital Expenditures | $ | 400M | $ | 500M | ||||||||||
EBITDA |
|
|
||||||||||||
Building Materials Business |
||||||||||||||
Aggregates Product Line |
||||||||||||||
Volume (total tons) 2 |
165M |
167M |
||||||||||||
% growth 2 |
4.0% | 5.5% | ||||||||||||
Average selling price per ton | $ | 13.50 | $ | 13.75 | ||||||||||
% growth | 5.0% | 7.0% | ||||||||||||
Net sales | ||||||||||||||
Gross profit | $ |
660M |
$ |
725M |
||||||||||
Cement Product Line |
||||||||||||||
Net sales | $ |
380M |
$ |
400M |
||||||||||
Gross profit | $ |
130M |
$ |
155M |
||||||||||
|
|
|
|
|||||||||||
Net sales |
|
|
||||||||||||
Gross profit | $ |
145M |
$ |
155M |
||||||||||
Magnesia Specialties Business |
||||||||||||||
Net sales | $ |
235M |
$ |
240M |
||||||||||
Gross profit | $ |
85M |
$ |
90M |
||||||||||
1 2017 consolidated net sales exclude
2 Represents 2017 total aggregates volumes, which includes approximately 11.6 million internal tons. Volume growth ranges are in comparison to total volumes of 158.6 million tons as reported for the full year 2016, which includes 10.4 million internal tons.
RISKS TO OUTLOOK
The 2017 outlook includes management's assessment of the likelihood of certain risks and uncertainties that may affect performance, including but not limited to: both price and volume, and a recurrence of widespread decline in aggregates volume negatively affecting aggregates price; the termination, capping and/or reduction of the federal and/or state gasoline tax(es) or other revenue related to infrastructure construction; a significant change in the funding patterns for traditional federal, state and/or local infrastructure projects; the United States Congress' inability to reach agreement among themselves or with the current Administration on policy issues that impact the federal budget; the volatility in the commencement of infrastructure projects; a reduction in defense spending, and the subsequent impact on construction activity on or near military bases; a decline in nonresidential construction; a further 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 and certain regulatory or other economic factors; a slowdown in the residential construction recovery; a reduction in economic activity in the Company's Midwest states resulting from reduced funding levels provided by the Agricultural Act of 2014 and a sustained reduction in capital investment by the railroads; an increase in the cost of compliance with governmental laws, rules and regulations; construction labor shortages; and unexpected equipment failures, unscheduled maintenance, industrial accident or other prolonged and/or significant disruption to its cement and/or its Magnesia Specialties production facilities. Further, increased highway construction funding pressures resulting from either federal or state issues can affect profitability. If these negatively affect transportation budgets more than in the past, construction spending could be reduced. Cement is subject to cyclical supply and demand and price fluctuations. The Magnesia Specialties business essentially runs at capacity; therefore any unplanned changes in costs or realignment of customers introduce volatility to the earnings of this segment.
The Company's principal business serves customers in construction markets. This concentration could increase the risk of potential losses on customer receivables; however, payment bonds normally posted on public projects, together with lien rights on private projects, mitigate the risk of uncollectible receivables. The level of demand in the Company's end-use markets, production levels and the management of production costs will affect the operating leverage of the
Transportation in the Company's long-haul network, particularly the supply of rail cars and locomotive power and condition of rail infrastructure to move trains, affects the Company's efficient transportation of aggregate products in certain markets, most notably
All of the Company's businesses are also subject to weather-related risks that can significantly affect production schedules and profitability. The first and fourth quarters are most adversely affected by winter weather. Hurricane activity in the
Risks to the outlook also include shipment declines resulting from economic events beyond the Company's control. In addition to the impact on nonresidential and residential construction, the Company is exposed to risk in its estimated outlook from credit markets and the availability of and interest cost related to its debt.
The Company's future performance is also exposed to risks from tax reform at the federal and state levels.
CONFERENCE CALL INFORMATION
The Company will discuss its first-quarter 2017 earnings results on a conference call and an online web simulcast today (
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 26 states,
If you are interested in
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 Corporation believes in good faith are reasonable but which may be materially different from actual results. Forward-looking statements give the investor the Corporation'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 be," "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.
Factors that the Corporation currently believes could cause actual results to differ materially from the forward-looking statements in this press release include, the performance of
Unaudited Statements of Earnings | |||||||||
(In millions, except per share amounts) | |||||||||
Three Months Ended | |||||||||
2017 | 2016 | ||||||||
Net sales | $ | 791.7 | $ | 734.0 | |||||
52.2 | 54.8 | ||||||||
Total revenues | 843.9 | 788.8 | |||||||
Cost of sales | 644.6 | 588.7 | |||||||
52.2 | 54.8 | ||||||||
Total cost of revenues | 696.8 | 643.5 | |||||||
Gross profit | 147.1 | 145.3 | |||||||
Selling, general and administrative expenses | 69.5 | 58.3 | |||||||
Acquisition-related expenses, net | - | 0.3 | |||||||
Other operating expenses, net | 0.4 | 0.7 | |||||||
Earnings from operations | 77.2 | 86.0 | |||||||
Interest expense | 20.9 | 20.0 | |||||||
Other nonoperating (income) and expenses, net | (0.5 | ) | 1.2 | ||||||
Earnings before taxes on income | 56.8 | 64.8 | |||||||
Taxes on income | 14.5 | 19.7 | |||||||
Consolidated net earnings | 42.3 | 45.1 | |||||||
Less: Net earnings attributable to noncontrolling interests | - | 0.1 | |||||||
Net earnings attributable to |
$ | 42.3 | $ | 45.0 | |||||
Net earnings per common share attributable to common shareholders: | |||||||||
Basic | $ | 0.67 | $ | 0.70 | |||||
Diluted | $ | 0.67 | $ | 0.69 | |||||
Dividends per common share | $ | 0.42 | $ | 0.40 | |||||
Average number of common shares outstanding: | |||||||||
Basic | 63.0 | 64.2 | |||||||
Diluted | 63.3 | 64.4 | |||||||
Unaudited Financial Highlights | ||||||||||
(In millions) | ||||||||||
Three Months Ended | ||||||||||
2017 | 2016 | |||||||||
Net sales: | ||||||||||
Building Materials Business: | ||||||||||
$ | 177.3 | $ | 173.4 | |||||||
86.7 | 67.3 | |||||||||
464.4 | 433.8 | |||||||||
Total |
728.4 | 674.5 | ||||||||
Magnesia Specialties | 63.3 | 59.5 | ||||||||
Total | $ | 791.7 | $ | 734.0 | ||||||
Gross profit (loss): | ||||||||||
Building Materials Business: | ||||||||||
$ | 26.3 | $ | 27.6 | |||||||
14.4 | 10.4 | |||||||||
84.5 | 88.3 | |||||||||
Total |
125.2 | 126.3 | ||||||||
Magnesia Specialties | 22.3 | 23.0 | ||||||||
Corporate | (0.4 | ) | (4.0 | ) | ||||||
Total | $ | 147.1 | $ | 145.3 | ||||||
Selling, general and administrative expenses: | ||||||||||
Building Materials Business: | ||||||||||
$ | 13.5 | $ | 13.1 | |||||||
4.4 | 3.8 | |||||||||
25.1 | 23.0 | |||||||||
Total |
43.0 | 39.9 | ||||||||
Magnesia Specialties | 2.4 | 2.3 | ||||||||
Corporate | 24.1 | 16.1 | ||||||||
Total | $ | 69.5 | $ | 58.3 | ||||||
Earnings (Loss) from operations: | ||||||||||
Building Materials Business: | ||||||||||
$ | 13.4 | $ | 14.7 | |||||||
10.1 | 7.0 | |||||||||
61.2 | 65.8 | |||||||||
Total |
84.7 | 87.5 | ||||||||
Magnesia Specialties | 19.9 | 20.6 | ||||||||
Corporate | (27.4 | ) | (22.1 | ) | ||||||
Total | $ | 77.2 | $ | 86.0 | ||||||
Unaudited Financial Highlights | ||||||||||
(In millions) | ||||||||||
Three Months Ended | ||||||||||
2017 | 2016 | |||||||||
Net sales by product line: | ||||||||||
Building Materials Business: | ||||||||||
Aggregates | $ | 451.4 | $ | 430.9 | ||||||
222.4 | 186.9 | |||||||||
Cement | 93.7 | 96.9 | ||||||||
Asphalt and Paving | 26.6 | 13.8 | ||||||||
Less: Interproduct sales | (65.7 | ) | (54.0 | ) | ||||||
Total |
728.4 | 674.5 | ||||||||
Magnesia Specialties Business | 63.3 | 59.5 | ||||||||
Total | $ | 791.7 | $ | 734.0 | ||||||
Gross profit (loss) by product line: | ||||||||||
Building Materials Business: | ||||||||||
Aggregates | $ | 79.3 | $ | 82.1 | ||||||
19.8 | 17.9 | |||||||||
Cement | 30.9 | 32.6 | ||||||||
Asphalt and Paving | (4.8 | ) | (6.3 | ) | ||||||
Total |
125.2 | 126.3 | ||||||||
Magnesia Specialties Business | 22.3 | 23.0 | ||||||||
Corporate | (0.4 | ) | (4.0 | ) | ||||||
Total | $ | 147.1 | $ | 145.3 | ||||||
Balance Sheet Data | ||||||||||||
(In millions) | ||||||||||||
2017 | 2016 | 2016 | ||||||||||
(Unaudited) | (Audited) | (Unaudited) | ||||||||||
ASSETS | ||||||||||||
Cash and cash equivalents | $ | 55.4 | $ | 50.0 | $ | 27.2 | ||||||
Accounts receivable, net | 479.2 | 457.9 | 448.0 | |||||||||
Inventories, net | 537.0 | 521.6 | 485.4 | |||||||||
Other current assets | 51.6 | 56.9 | 37.7 | |||||||||
Property, plant and equipment, net | 3,467.6 | 3,423.4 | 3,263.0 | |||||||||
Intangible assets, net | 2,667.1 | 2,670.7 | 2,654.7 | |||||||||
Other noncurrent assets | 135.9 | 120.4 | 142.3 | |||||||||
Total assets | $ | 7,393.8 | $ | 7,300.9 | $ | 7,058.3 | ||||||
LIABILITIES AND EQUITY | ||||||||||||
Current maturities of long-term debt and short-term facilities | $ | 290.0 | $ | 180.0 | $ | 177.4 | ||||||
Other current liabilities | 341.6 | 366.6 | 314.7 | |||||||||
Long-term debt (excluding current maturities) | 1,556.2 | 1,506.2 | 1,575.3 | |||||||||
Other noncurrent liabilities | 1,130.0 | 1,105.5 | 1,045.3 | |||||||||
Total equity | 4,076.0 | 4,142.6 | 3,945.6 | |||||||||
Total liabilities and equity | $ | 7,393.8 | $ | 7,300.9 | $ | 7,058.3 | ||||||
Unaudited Statements of Cash Flows | ||||||||||
(In millions) | ||||||||||
Three Months Ended | ||||||||||
2017 | 2016 | |||||||||
Operating activities: | ||||||||||
Consolidated net earnings | $ | 42.3 | $ | 45.1 | ||||||
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: | ||||||||||
Depreciation, depletion and amortization | 70.4 | 68.4 | ||||||||
Stock-based compensation expense | 10.3 | 7.2 | ||||||||
Loss (Gain) on divestitures and sales of assets | 0.1 | (0.1 | ) | |||||||
Deferred income taxes | 2.8 | 18.0 | ||||||||
Other items, net | - | (2.0 | ) | |||||||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | ||||||||||
Accounts receivable, net | (21.3 | ) | (29.7 | ) | ||||||
Inventories, net | (15.4 | ) | (13.5 | ) | ||||||
Accounts payable | 8.5 | 9.2 | ||||||||
Other assets and liabilities, net | (23.7 | ) | (34.3 | ) | ||||||
Net cash provided by operating activities | 74.0 | 68.3 | ||||||||
Investing activities: | ||||||||||
Additions to property, plant and equipment | (102.1 | ) | (94.2 | ) | ||||||
Acquisitions, net | - | (123.0 | ) | |||||||
Cash received in acquisition | - | 3.4 | ||||||||
Proceeds from divestitures and sales of assets | 0.6 | 3.4 | ||||||||
Payment of railcar construction advances | (37.0 | ) | - | |||||||
Reimbursement of railcar construction advances | 37.0 | - | ||||||||
Net cash used for investing activities | (101.5 | ) | (210.4 | ) | ||||||
Financing activities: | ||||||||||
Borrowings of long-term debt | 205.0 | 210.0 | ||||||||
Repayments of long-term debt | (45.0 | ) | (26.4 | ) | ||||||
Payments on capital leases | (0.8 | ) | (0.8 | ) | ||||||
Change in bank overdraft | - | (10.2 | ) | |||||||
Repurchases of common stock | (100.0 | ) | (150.0 | ) | ||||||
Dividends paid | (26.6 | ) | (25.8 | ) | ||||||
Issuances of common stock | 4.0 | 4.7 | ||||||||
Shares withheld for employees' income tax obligations |
(3.7 | ) | (0.6 | ) | ||||||
Net cash provided by financing activities | 32.9 | 0.9 | ||||||||
Net increase (decrease) in cash and cash equivalents | 5.4 | (141.2 | ) | |||||||
Cash and cash equivalents, beginning of period | 50.0 | 168.4 | ||||||||
Cash and cash equivalents, end of period | $ | 55.4 | $ | 27.2 | ||||||
Unaudited Operational Highlights | ||||||||||
Three Months Ended | ||||||||||
Volume | Pricing | |||||||||
Volume/Pricing Variance (1) | ||||||||||
(1.5 | %) | 4.4 | % | |||||||
16.4 | % | 10.3 | % | |||||||
(3.8 | %) | 2.6 | % | |||||||
Total Aggregates Product Line (2) | (0.2 | %) | 5.3 | % | ||||||
Three Months Ended | ||||||||||
Shipments (tons in thousands) | 2017 | 2016 | ||||||||
12,738 | 12,938 | |||||||||
5,028 | 4,318 | |||||||||
14,845 | 15,425 | |||||||||
Total Aggregates Product Line (2) | 32,611 | 32,681 | ||||||||
(1) Volume/pricing variances reflect the percentage increase (decrease) 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 | ||||||||||
2017 | 2016 | |||||||||
Shipments (in thousands) | ||||||||||
Aggregates tons - external customers | 30,418 | 30,760 | ||||||||
Internal aggregates tons used in other product lines | 2,193 | 1,921 | ||||||||
Total aggregates tons | 32,611 | 32,681 | ||||||||
2,056 | 1,786 | |||||||||
Cement tons - external customers | 606 | 685 | ||||||||
Internal cement tons used in other product lines | 299 | 272 | ||||||||
905 | 957 | |||||||||
Asphalt tons - external customers | 153 | 80 | ||||||||
Internal asphalt tons used in road paving business | 124 | 65 | ||||||||
Total asphalt tons | 277 | 145 | ||||||||
Average unit sales price by product line (including internal sales): | ||||||||||
Aggregates (per ton) | $ | 13.73 | $ | 13.04 | ||||||
$ | 105.84 | $ | 102.45 | |||||||
Cement (per ton) | $ | 102.54 | $ | 100.04 | ||||||
Asphalt (per ton) | $ | 37.97 | $ | 42.62 | ||||||
Non-GAAP Financial Measures |
(Dollars in millions) |
Gross margin as a percentage of net sales and operating margin as a percentage of net sales represent non-GAAP measures. The Company presents these ratios calculated based on net sales, as it is consistent with the basis by which management reviews the Company's operating results. Further, management believes it is consistent with the basis by which investors analyze the Company's operating results, given that freight and delivery revenues and costs represent pass-throughs and have no profit markup. Gross margin and operating margin calculated as percentages of total revenues represent the most directly comparable financial measures calculated in accordance with generally accepted accounting principles ("GAAP"). The following tables present the calculations of gross margin for the three months ended |
Consolidated Gross Margin in Accordance with Generally Accepted Accounting Principles | Three Months Ended | |||||||||
2017 | 2016 | |||||||||
Gross profit | $ | 147.1 | $ | 145.3 | ||||||
Total revenues | $ | 843.9 | $ | 788.8 | ||||||
Gross margin | 17.4 | % | 18.4 | % | ||||||
Consolidated Gross Margin Excluding Freight and Delivery Revenues | Three Months Ended | |||||||||
2017 | 2016 | |||||||||
Gross profit | $ | 147.1 | $ | 145.3 | ||||||
Total revenues | $ | 843.9 | $ | 788.8 | ||||||
Less: |
(52.2 | ) | (54.8 | ) | ||||||
Net sales | $ | 791.7 | $ | 734.0 | ||||||
Gross margin excluding freight and delivery revenues | 18.6 | % | 19.8 | % | ||||||
Building Materials Business Gross Margin in Accordance with Generally Accepted Accounting Principles | Three Months Ended | |||||||||
2017 | 2016 | |||||||||
Gross profit | $ | 125.2 | $ | 126.3 | ||||||
Total revenues | $ | 775.3 | $ | 724.6 | ||||||
Gross margin | 16.1 | % | 17.4 | % | ||||||
Building Materials Business Gross Margin Excluding Freight and Delivery Revenues | Three Months Ended | |||||||||
2017 | 2016 | |||||||||
Gross profit | $ | 125.2 | $ | 126.3 | ||||||
Total revenues | $ | 775.3 | $ | 724.6 | ||||||
Less: |
(46.9 | ) | (50.1 | ) | ||||||
Net sales | $ | 728.4 | $ | 674.5 | ||||||
Gross margin excluding freight and delivery revenues | 17.2 | % | 18.7 | % | ||||||
Magnesia Specialties Business Gross Margin in Accordance with Generally Accepted Accounting Principles | Three Months Ended | |||||||||
2017 | 2016 | |||||||||
Gross profit | $ | 22.3 | $ | 23.0 | ||||||
Total revenues | $ | 68.6 | $ | 64.2 | ||||||
Gross margin | 32.5 | % | 35.8 | % | ||||||
Magnesia Specialties Business Product Line Gross Margin Excluding |
Three Months Ended | |||||||||
2017 | 2016 | |||||||||
Gross profit | $ | 22.3 | $ | 23.0 | ||||||
Total revenues | $ | 68.6 | $ | 64.2 | ||||||
Less: |
(5.3 | ) | (4.7 | ) | ||||||
Net sales | $ | 63.3 | $ | 59.5 | ||||||
Gross margin excluding freight and delivery revenues | 35.3 | % | 38.6 | % | ||||||
Non-GAAP Financial Measures (continued) |
(Dollars in millions) |
The ratio of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing-12 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-12 months cannot exceed 3.50 times as of |
The following presents the calculation of Consolidated Debt-to-Consolidated EBITDA, as defined by the Company's Credit Agreement, at |
Twelve-Month Period | |||||
Earnings from continuing operations attributable to |
$ | 422.7 | |||
Add back: | |||||
Interest expense | 82.5 | ||||
Income tax expense | 176.4 | ||||
Depreciation, depletion and amortization expense |
284.9 |
||||
Stock-based compensation expense | 23.5 | ||||
Deduct: | |||||
Interest income | (0.2 | ) | |||
Nonrecurring gains on divestitures, net |
(5.2 |
) | |||
Consolidated EBITDA, as defined by the Company's Credit Agreement |
$ |
984.6 |
|||
Consolidated Net Debt, as defined and including debt for which the Company is a co-borrower, at |
$ | 1,862.9 | |||
|
|||||
Consolidated Debt-to-Consolidated EBITDA, as defined by the Company's Credit Agreement, at |
1.89 times | ||||
EBITDA is a widely accepted financial indicator of a company's ability to service and/or incur indebtedness. 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 EBITDA, refer to the Company's website at www.martinmarietta.com. EBITDA is as follows for the three months ended |
Three Months Ended | ||||||||||
2017 | 2016 | |||||||||
Consolidated Earnings Before Interest, Income Taxes, Depreciation, Depletion and Amortization (EBITDA) | $ | 147.7 | $ | 152.6 | ||||||
A Reconciliation of Net Earnings Attributable to |
||||||||||
Three Months Ended | ||||||||||
2017 | 2016 | |||||||||
Net Earnings Attributable to |
$ | 42.3 | $ | 45.0 | ||||||
Add back: | ||||||||||
Interest Expense | 20.9 | 20.0 | ||||||||
Taxes on Income | 14.5 | 19.7 | ||||||||
Depreciation, Depletion and Amortization Expense | 70.0 | 67.9 | ||||||||
Consolidated EBITDA | $ | 147.7 | $ | 152.6 | ||||||
$ | 791.7 | $ | 734.0 | |||||||
EBITDA margin as percentage of net sales | 18.7 | % | 20.8 | % | ||||||
MLM-E
View source version on businesswire.com: http://www.businesswire.com/news/home/20170502005591/en/
Director, Investor Relations
Elisabeth.Eisleben@martinmarietta.com
Source:
News Provided by Acquire Media