Martin Marietta Reports Fourth-Quarter and Full-Year Results
Quarterly Earnings Per Diluted Share of
Fourth-Quarter Heritage Consolidated Gross Margin Expands 370 Basis Points
Accelerated TXI-Related Synergy Realization Delivers 2014 Accretion
New Share Repurchase Program Announced
Aggregates Product Line Volume Up 19% and Pricing Up 7%
Magnesia Specialties Generates Record Fourth-Quarter Net Sales
"Employment growth in
"The Aggregates business' gross profit increased
NOTABLE ITEMS FOR THE QUARTER (ALL COMPARISONS ARE VERSUS THE PRIOR-YEAR FOURTH QUARTER)
-
Earnings per diluted share of
$0.94 compared with$0.77 -
Consolidated net sales of $779.5 million compared with $491.4 million,
an increase of 59%
-
$541.5 million of net sales from heritage operations
-
-
Aggregates product line volume increase of 18.8%; aggregates product
line price increase of 6.7%
- Heritage aggregates product line volume increase of 7.6%; heritage aggregates product line price increase of 6.0%
-
Cement business net sales of
$100.0 million , earnings from operations of$22.5 million and EBITDA of$37.7 million - Magnesia Specialties net sales of $58.2 million and earnings from operations of $19.8 million
- Heritage consolidated gross margin (excluding freight and delivery revenues) of 24.2%, up 370 basis points; consolidated gross margin (excluding freight and delivery revenues) of 21.2%, up 60 basis points
-
Consolidated selling, general and administrative expenses (SG&A) of
$50.0 million , or 6.4% of net sales, a reduction of 120 basis points -
Consolidated earnings from operations of $118.6 million compared with
$62.8 million
NOTABLE ITEMS FOR THE FULL YEAR (ALL COMPARISONS ARE VERSUS FULL-YEAR 2013)
-
Adjusted earnings per diluted share of $3.74 compared with
$2 .61:
Reported earnings per diluted share | $ | 2.71 | |||
Add back: | |||||
Acquisition-related expenses, net | 0.91 | ||||
One-time increase in cost of sales for acquired inventory | 0.12 | ||||
Adjusted earnings per diluted share | $ | 3.74 | |||
-
Consolidated net sales of $2.68 billion compared with $1.94 billion,
an increase of 38%
-
$2.17 billion of net sales from heritage operations
-
-
Aggregates product line volume increase of 13.7%; aggregates product
line pricing increase of 4.5%
- Heritage aggregates product line volume increase of 7.5%; heritage aggregates product line pricing increase of 4.1%
- Magnesia Specialties net sales of $236.1 million and earnings from operations of $74.8 million, both annual records
-
Acquired operations contribute
$511.6 million of net sales and$78.9 million of adjusted gross profit - Heritage consolidated gross margin (excluding freight and delivery revenues) of 21.0%, up 230 basis points
-
Consolidated selling, general and administrative expenses (SG&A) of
$169.2 million , or 6.3% of net sales, a reduction of 140 basis points -
Adjusted consolidated earnings from operations of $368.7 million
compared with
$218.0 million , a 70% increase:
Reported consolidated earnings from operations | $ | 314.9 | |||
Add back: | |||||
TXI acquisition-related expenses, net | 42.7 | ||||
One-time increase in cost of sales for acquired inventory | 11.1 | ||||
Adjusted consolidated earnings from operations | $ | 368.7 | |||
QUARTERLY OPERATING RESULTS (ALL COMPARISONS ARE VERSUS THE PRIOR-YEAR FOURTH QUARTER UNLESS NOTED OTHERWISE)
Aggregates Business
Heritage aggregates product line shipments reflect growth in all end-use
markets. Shipments to the infrastructure market comprised 44% of
quarterly volumes and increased 12%, with each reportable group
achieving double-digit improvement. The growth reflects projects funded
by the Transportation Infrastructure Financing and Innovation Act,
or TIFIA, and public-private partnerships, which are having a positive
impact in
The nonresidential market represented 32% of quarterly heritage
aggregates product line shipments and increased 4%. Energy-related
shipments remain strong as momentum and the backlog of committed
projects, notably in south
Geographically, heritage aggregates product line shipments increased in
each reportable group, led by an adjusted 15.5% increase in the
Heritage aggregates product line pricing remains strong and increased in
each reportable group, led by a 9.3% improvement in the
The acquired aggregates product line operations continue to be
integrated into the heritage business as part of capturing the synergies
of the TXI acquisition. While not reflecting the full contribution of
these operations, acquired aggregates product line locations reported
The heritage ready mixed concrete product line reported pricing and
volume improvements of 11% and 2%, respectively, leading to an
840-basis-point improvement in the heritage product line's gross margin
(excluding freight and delivery revenues). The acquired ready mix
concrete operations contributed
Consistent with the Company's expectations, total production cost per ton for the heritage aggregates product line declined 2%, reflecting increased leverage and lower energy costs.
Incremental margin for the heritage aggregates business approached
targeted objectives, despite the southeastern
Magnesia Specialties Business
Magnesia Specialties continued to deliver strong performance and
generated fourth-quarter record net sales of
Cement Business
The Cement business is benefitting from continued strength in the
Synergistic Value of TXI Acquisition
The Company is working towards its target operating model and
integration is progressing. Notably, the Company now expects to achieve
CONSOLIDATED OPERATING RESULTS
For the quarter, acquired TXI operations for all product lines
contributed
Consolidated SG&A was 6.4% of net sales compared with 7.6% in the
prior-year quarter. The reduction of 120 basis points reflects the
growth of net sales outpacing the increase in SG&A as well as lower
pension expense. The Company incurred acquisition-related expenses of
The Company's effective income tax rate for full-year 2014 was 38%,
which is higher than the Company's historical rate. The estimated
effective income tax rate, excluding the TXI transaction effects, would
have been 30%. The rate increase reflects the tax impact of the TXI
transaction, including the limited deductibility of certain
acquisition-related expenses and the non-deductibility of goodwill
written off as part of the required divestiture. These factors were
partially offset by the income tax benefits, resulting from the exercise
of converted stock awards issued to former TXI personnel. Cash taxes for
the full year were
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities for 2014 was
At
SHARE REPURCHASE PROGRAM
The Board of Directors has authorized a new share repurchase program
under which the Company may acquire up to 20 million shares of its
outstanding common stock. The authorization to repurchase up to 20
million shares includes the five million shares authorized under the
Company's previous share repurchase program. As of
"The 20 million share repurchase program demonstrates the
transformational power of Martin Marietta's business model and our
commitment to delivering value to shareholders," said
FULL-YEAR 2015 OUTLOOK
The Company is encouraged by positive trends in its business and markets, notably:
- Nonresidential construction is expected to increase in both the heavy industrial and commercial sectors. The Dodge Momentum Index is at its highest level since 2009 and signals continued growth.
- Energy-related economic activity, including follow-on public and private construction activities in our primary markets, is anticipated to remain strong.
- Residential construction is expected to continue to grow, driven by historically low levels of construction activity over the previous several years, employment gains, low mortgage rates, significant lot absorption, higher multi-family rental rates and rising housing prices.
- For the public sector, authorized highway funding from MAP-21 should remain stable compared with 2014. Additionally, state initiatives to finance infrastructure projects, including support from TIFIA, are expected to grow and continue to play an expanded role in public-sector activity.
Based on these trends and expectations, the Company anticipates the following for full-year 2015:
-
Aggregates end-use markets compared to 2014 levels are as follows:
- Infrastructure market to increase mid-single digits.
- Nonresidential market to increase in the high-single digits.
- Residential market to experience a double-digit increase.
-
ChemRock /Rail market to remain relatively flat.
-
Aggregates product line shipments to increase by 10% to 12% compared
with 2014 levels.
- Heritage aggregates shipments to increase 4% to 7%
- Shipments from acquired TXI operations to more than double, reflecting a full year of ownership
- Aggregates product line pricing to increase by 4% to 6% compared with 2014.
- Aggregates product line production cost per ton shipped to decline slightly.
-
Aggregates-related downstream product lines to generate between
$875 million and$925 million of net sales and$65 million to$70 million of gross profit. -
Net sales for the Cement segment to be between
$475 million and$500 million , generating$120 million to$130 million of gross profit. -
Net sales for the Magnesia Specialties segment to be between
$240 million and$250 million , generating$85 million to$90 million of gross profit. -
SG&A expenses as a percentage of net sales to be less than 6.0%,
despite an
$18 million increase in heritage pension costs, primarily as a result of a lower discount rate. -
Interest expense to approximate
$75 million to$80 million . - Estimated effective income tax rate to approximate 32%, excluding discrete events.
-
Consolidated earnings before interest expense, income tax expense,
depreciation, depletion and amortization expense (EBITDA) to range
from
$825 million to$875 million . -
Capital expenditures to approximate
$320 million , including$35 million of synergy-related capital and$80 million for the continued development of the new Medina limestone quarry outside ofSan Antonio . The Medina quarry is rail connected and will be able to ship aggregates products toSouth Texas , includingHouston .
RISKS TO OUTLOOK
The 2015 outlook includes management's assessment of the likelihood of
certain risks and uncertainties that will affect performance. The most
significant risks to the Company's performance will be Congress' actions
and timing surrounding federal highway funding and uncertainty over the
funding mechanism for the
The Company's principal business serves customers in aggregates-related 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, help to mitigate the risk of uncollectible receivables. The level of aggregates demand in the Company's end-use markets, production levels and the management of production costs will affect the operating leverage of the Aggregates business and, therefore, profitability. Production costs in the Aggregates business are also sensitive to energy and raw material prices, both directly and indirectly. Diesel fuel and other consumables change production costs directly through consumption or indirectly by increased energy-related input costs, such as steel, explosives, tires and conveyor belts. Fluctuating diesel fuel pricing also affects transportation costs, primarily through fuel surcharges in the Company's long-haul distribution network. The Cement business is also energy intensive and fluctuations in the price of coal affects costs. The Magnesia Specialties business is sensitive to changes in domestic steel capacity utilization and the absolute price and fluctuations in the cost of natural gas.
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 ability to
efficiently transport aggregate into 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 as a result of 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 fourth quarter and full-year 2014 earnings
results on a conference call and online web simulcast today (
For those investors without online web access, the conference call may also be accessed by calling (970) 315-0423, confirmation number 68375566.
Martin Marietta, an American-based company and a member of the S&P 500
Index, is a leading supplier of aggregates and heavy building materials,
with operations spanning 32 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 our 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, but are not limited to, Congress' actions
and timing surrounding federal highway funding and uncertainty
over the funding mechanism for the
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Unaudited Statements of Earnings |
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(In millions, except per share amounts) |
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Three Months Ended | Year Ended | ||||||||||||||||||||
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2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Net sales | $ | 779.5 | $ | 491.4 | $ | 2,679.1 | $ | 1,943.2 | |||||||||||||
Freight and delivery revenues | 76.8 | 53.6 | 278.9 | 212.3 | |||||||||||||||||
Total revenues | 856.3 | 545.0 | 2,958.0 | 2,155.5 | |||||||||||||||||
Cost of sales | 614.2 | 390.4 | 2,156.7 | 1,579.2 | |||||||||||||||||
Freight and delivery costs | 76.8 | 53.6 | 278.9 | 212.3 | |||||||||||||||||
Total cost of revenues | 691.0 | 444.0 | 2,435.6 | 1,791.5 | |||||||||||||||||
Gross profit | 165.3 | 101.0 | 522.4 | 364.0 | |||||||||||||||||
Selling, general and administrative expenses | 50.0 | 37.5 | 169.2 | 150.1 | |||||||||||||||||
Acquisition-related expenses, net | 1.7 | - | 42.9 | 0.7 | |||||||||||||||||
Other operating (income) and expenses, net | (5.0 | ) | 0.7 | (4.6 | ) | (4.8 | ) | ||||||||||||||
Earnings from operations | 118.6 | 62.8 | 314.9 | 218.0 | |||||||||||||||||
Interest expense | 21.1 | 12.8 | 66.1 | 53.5 | |||||||||||||||||
Other nonoperating (income) and expenses, net | (1.7 | ) | 0.1 | (0.4 | ) | 0.3 | |||||||||||||||
Earnings from continuing operations before taxes on income | 99.2 | 49.9 | 249.2 | 164.2 | |||||||||||||||||
Income tax expense | 35.3 | 14.4 | 94.9 | 44.0 | |||||||||||||||||
Earnings from continuing operations | 63.9 | 35.5 | 154.3 | 120.2 | |||||||||||||||||
Gain (Loss) on discontinued operations, net of related tax expense
(benefit) of |
0.1 | (0.3 | ) | - | (0.8 | ) | |||||||||||||||
Consolidated net earnings | 64.0 | 35.2 | 154.3 | 119.4 | |||||||||||||||||
Less: Net earnings (loss) attributable to noncontrolling interests | - | (0.8 | ) | (1.3 | ) | (1.9 | ) | ||||||||||||||
Net earnings attributable to |
$ | 64.0 | $ | 36.0 | $ | 155.6 | $ | 121.3 | |||||||||||||
Net earnings (loss) per common share: | |||||||||||||||||||||
Basic from continuing operations attributable to common shareholders | $ | 0.95 | $ | 0.79 | $ | 2.73 | $ | 2.64 | |||||||||||||
Discontinued operations attributable to common shareholders | - | (0.01 | ) | - | (0.02 | ) | |||||||||||||||
$ | 0.95 | $ | 0.78 | $ | 2.73 | $ | 2.62 | ||||||||||||||
Diluted from continuing operations attributable to common shareholders |
$ | 0.94 | $ | 0.78 | $ | 2.71 | $ | 2.63 | |||||||||||||
Discontinued operations attributable to common shareholders | - | (0.01 | ) | - | (0.02 | ) | |||||||||||||||
$ | 0.94 | $ | 0.77 | $ | 2.71 | $ | 2.61 | ||||||||||||||
Dividends per common share | $ | 0.40 | $ | 0.40 | $ | 1.60 | $ | 1.60 | |||||||||||||
Average number of common shares outstanding: | |||||||||||||||||||||
Basic | 67.3 | 46.3 | 56.9 | 46.2 | |||||||||||||||||
Diluted | 67.6 | 46.4 | 57.1 | 46.3 | |||||||||||||||||
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Unaudited Financial Highlights | |||||||||||||||||||||
(In millions) |
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Three Months Ended | Year Ended | ||||||||||||||||||||
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2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Net sales: | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
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$ | 201.0 | $ | 179.8 | $ | 770.5 | $ | 720.0 | |||||||||||||
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60.8 | 55.0 | 255.0 | 226.5 | |||||||||||||||||
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359.5 | 198.5 | 1,207.9 | 771.1 | |||||||||||||||||
Total Aggregates Business | 621.3 | 433.3 | 2,233.4 | 1,717.6 | |||||||||||||||||
Cement | 100.0 | - | 209.6 | - | |||||||||||||||||
Magnesia Specialties | 58.2 | 58.1 | 236.1 | 225.6 | |||||||||||||||||
Total | $ | 779.5 | $ | 491.4 | $ | 2,679.1 | $ | 1,943.2 | |||||||||||||
Gross profit (loss): | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
|
$ | 66.9 | $ | 54.9 | $ | 216.9 | $ | 192.7 | |||||||||||||
|
5.8 | (0.6 | ) | 10.6 | (3.5 | ) | |||||||||||||||
|
39.0 | 23.9 | 155.7 | 92.5 | |||||||||||||||||
Total Aggregates Business | 111.7 | 78.2 | 383.2 | 281.7 | |||||||||||||||||
Cement | 28.3 | - | 52.5 | - | |||||||||||||||||
Magnesia Specialties | 22.4 | 22.9 | 84.6 | 83.7 | |||||||||||||||||
Corporate | 2.9 | (0.1 | ) | 2.1 | (1.4 | ) | |||||||||||||||
Total | $ | 165.3 | $ | 101.0 | $ | 522.4 | $ | 364.0 | |||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
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$ | 13.1 | $ | 13.4 | $ | 52.2 | $ | 53.7 | |||||||||||||
|
4.6 | 4.7 | 17.8 | 18.1 | |||||||||||||||||
|
14.3 | 11.3 | 50.2 | 42.9 | |||||||||||||||||
Total Aggregates Business | 32.0 | 29.4 | 120.2 | 114.7 | |||||||||||||||||
Cement | 6.4 | - | 12.7 | - | |||||||||||||||||
Magnesia Specialties | 2.5 | 2.6 | 9.8 | 10.2 | |||||||||||||||||
Corporate | 9.1 | 5.5 | 26.5 | 25.2 | |||||||||||||||||
Total | $ | 50.0 | $ | 37.5 | $ | 169.2 | $ | 150.1 | |||||||||||||
Earnings (Loss) from operations: | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
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$ | 55.5 | $ | 43.4 | $ | 172.2 | $ | 144.3 | |||||||||||||
|
1.8 | (4.9 | ) | (5.3 | ) | (19.8 | ) | ||||||||||||||
|
28.1 | 13.3 | 153.2 | 53.1 | |||||||||||||||||
Total Aggregates Business | 85.4 | 51.8 | 320.1 | 177.6 | |||||||||||||||||
Cement | 22.5 | - | 40.8 | - | |||||||||||||||||
Magnesia Specialties | 19.8 | 20.4 | 74.8 | 73.5 | |||||||||||||||||
Corporate | (9.1 | ) | (9.4 | ) | (120.8 | ) | (33.1 | ) | |||||||||||||
Total | $ | 118.6 | $ | 62.8 | $ | 314.9 | $ | 218.0 | |||||||||||||
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Unaudited Financial Highlights | |||||||||||||||||||||
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Three Months Ended | Year Ended | ||||||||||||||||||||
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2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Net sales by product line: | |||||||||||||||||||||
Heritage: | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
Aggregates | $ | 374.6 | $ | 331.2 | $ | 1,502.5 | $ | 1,347.5 | |||||||||||||
Asphalt | 16.3 | 14.0 | 76.3 | 66.2 | |||||||||||||||||
|
49.1 | 42.7 | 196.0 | 146.1 | |||||||||||||||||
Road Paving | 43.3 | 45.4 | 156.6 | 157.8 | |||||||||||||||||
Total Aggregates Business | 483.3 | 433.3 | 1,931.4 | 1,717.6 | |||||||||||||||||
Magnesia Specialties Business | 58.2 | 58.1 | 236.1 | 225.6 | |||||||||||||||||
Acquisition: | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
Aggregates | 30.8 | - | 67.5 | - | |||||||||||||||||
|
107.2 | - | 234.5 | - | |||||||||||||||||
Total Aggregates Business | 138.0 | - | 302.0 | - | |||||||||||||||||
Cement Business | 100.0 | - | 209.6 | - | |||||||||||||||||
Total | $ | 779.5 | $ | 491.4 | $ | 2,679.1 | $ | 1,943.2 | |||||||||||||
Gross profit (loss) by product line: | |||||||||||||||||||||
Heritage: | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
Aggregates | $ | 91.8 | $ | 69.9 | $ | 321.0 | $ | 259.1 | |||||||||||||
Asphalt | 2.8 | 3.2 | 13.6 | 12.9 | |||||||||||||||||
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6.7 | 3.4 | 25.6 | 8.3 | |||||||||||||||||
Road Paving | 3.8 | 1.7 | 6.4 | 1.4 | |||||||||||||||||
Total Aggregates Business | 105.1 | 78.2 | 366.6 | 281.7 | |||||||||||||||||
Magnesia Specialties Business | 22.4 | 22.9 | 84.6 | 83.7 | |||||||||||||||||
Corporate | 3.7 | (0.1 | ) | 3.4 | (1.4 | ) | |||||||||||||||
Acquisition: | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
Aggregates | 2.8 | - | 3.1 | - | |||||||||||||||||
|
3.8 | - | 13.5 | - | |||||||||||||||||
Total Aggregates Business | 6.6 | - | 16.6 | - | |||||||||||||||||
Cement Business | 28.3 | - | 52.5 | - | |||||||||||||||||
Corporate | (0.8 | ) | - | (1.3 | ) | - | |||||||||||||||
Total | $ | 165.3 | $ | 101.0 | $ | 522.4 | $ | 364.0 | |||||||||||||
Depreciation | $ | 59.0 | $ | 40.5 | $ | 199.8 | $ | 162.7 | |||||||||||||
Depletion | 4.7 | 1.8 | 11.0 | 5.7 | |||||||||||||||||
Amortization | 4.5 | 1.4 | 11.5 | 5.4 | |||||||||||||||||
$ | 68.2 | $ | 43.7 | $ | 222.3 | $ | 173.8 | ||||||||||||||
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Unaudited Financial Highlights | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
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Heritage |
Acquired |
Nonrecurring |
Consolidated |
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2014 | 2014 | 2014 | 2014 | ||||||||||||||||||
Net sales | $ | 541.5 | $ | 238.0 | $ | - | $ | 779.5 | |||||||||||||
Freight and delivery revenues | 63.3 | 13.5 | - | 76.8 | |||||||||||||||||
Total revenues | 604.8 | 251.5 | - | 856.3 | |||||||||||||||||
Cost of sales | 410.3 | 203.9 | - | 614.2 | |||||||||||||||||
Freight and delivery costs | 63.3 | 13.5 | - | 76.8 | |||||||||||||||||
Total cost of revenues | 473.6 | 217.4 | - | 691.0 | |||||||||||||||||
Gross profit | 131.2 | 34.1 | - | 165.3 | |||||||||||||||||
Selling, general and administrative expenses(4) |
38.4 | 11.6 | - | 50.0 | |||||||||||||||||
Acquisition-related expenses, net | 0.1 | - | 1.6 | 1.7 | |||||||||||||||||
Other operating income, net | (4.0 | ) | (1.0 | ) | - | (5.0 | ) | ||||||||||||||
Earnings from operations | $ | 96.7 | $ | 23.5 | $ | (1.6 | ) | $ | 118.6 | ||||||||||||
(1) Heritage Martin Marietta is consolidated 2014 results excluding the operating results of acquired TXI locations and nonrecurring items directly attributable to the TXI acquisition. |
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(2) Acquired operations reflect the operating results of all acquired TXI locations. |
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(3) Nonrecurring TXI transaction items are attributable to the TXI acquisition and reflect acquisition related expenses, net |
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(4) Selling, general and administrative expenses for acquired
operations include the allocation of |
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Three Months Ended | |||||||||||||||
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Heritage |
Heritage |
Variance(5) - |
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2014 | 2013 | ||||||||||||||
Net sales | $ | 541.5 | $ | 491.4 | $ | 50.1 | |||||||||
Freight and delivery revenues | 63.3 | 53.6 | 9.7 | ||||||||||||
Total revenues | 604.8 | 545.0 | 59.8 | ||||||||||||
Cost of sales | 410.3 | 390.4 | (19.9 | ) | |||||||||||
Freight and delivery costs | 63.3 | 53.6 | (9.7 | ) | |||||||||||
Total cost of revenues | 473.6 | 444.0 | (29.6 | ) | |||||||||||
Gross profit | 131.2 | 101.0 | 30.2 | ||||||||||||
Selling, general and administrative expenses | 38.4 | 37.5 | (0.9 | ) | |||||||||||
Acquisition-related expenses, net | 0.1 | - | (0.1 | ) | |||||||||||
Other operating (income) & expenses, net | (4.0 | ) | 0.7 | 4.7 | |||||||||||
Earnings from operations | $ | 96.7 | $ | 62.8 | $ | 33.9 | |||||||||
(5) The variance reflects the change between Heritage Martin Marietta 2014 and Heritage Martin Marietta 2013. |
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Unaudited Financial Highlights | |||||||||||||||||||||
(Dollars in millions) |
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Year Ended | |||||||||||||||||||||
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Heritage |
Acquired |
Nonrecurring |
Consolidated | ||||||||||||||||||
2014 | 2014 | 2014 | 2014 | ||||||||||||||||||
Net sales | $ | 2,167.5 | $ | 511.6 | $ | - | $ | 2,679.1 | |||||||||||||
Freight and delivery revenues | 251.4 | 27.5 | - | 278.9 | |||||||||||||||||
Total revenues | 2,418.9 | 539.1 | - | 2,958.0 | |||||||||||||||||
Cost of sales | 1,712.9 | 443.8 | - | 2,156.7 | |||||||||||||||||
Freight and delivery costs | 251.4 | 27.5 | - | 278.9 | |||||||||||||||||
Total cost of revenues | 1,964.3 | 471.3 | - | 2,435.6 | |||||||||||||||||
Gross profit | 454.6 | 67.8 | - | 522.4 | |||||||||||||||||
Selling, general and administrative expenses(4) | 141.8 | 27.4 | - | 169.2 | |||||||||||||||||
Acquisition-related expenses, net | 0.2 | - | 42.7 | 42.9 | |||||||||||||||||
Other operating income, net | (2.7 | ) | (1.9 | ) | - | (4.6 | ) | ||||||||||||||
Earnings from operations | $ | 315.3 | $ | 42.3 | $ | (42.7 | ) | $ | 314.9 | ||||||||||||
(1) Heritage Martin Marietta is consolidated 2014 results excluding the operating results of acquired TXI locations and nonrecurring items directly attributable to the TXI acquisition. |
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(2) Acquired operations reflect the operating results of all acquired TXI locations. |
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(3) Nonrecurring TXI transaction items are attributable to the TXI acquisition and reflect acquisition related expenses, net. |
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(4) Selling, general and administrative expenses for acquired
operations include the allocation of |
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Year Ended | ||||||||||||||||
|
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Heritage |
Heritage |
Variance(5) - |
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2014 | 2013 | |||||||||||||||
Net sales | $ | 2,167.5 | $ | 1,943.2 | $ | 224.3 | ||||||||||
Freight and delivery revenues | 251.4 | 212.3 | 39.1 | |||||||||||||
Total revenues | 2,418.9 | 2,155.5 | 263.4 | |||||||||||||
Cost of sales | 1,712.9 | 1,579.2 | (133.7 | ) | ||||||||||||
Freight and delivery costs | 251.4 | 212.3 | (39.1 | ) | ||||||||||||
Total cost of revenues | 1,964.3 | 1,791.5 | (172.8 | ) | ||||||||||||
Gross profit | 454.6 | 364.0 | 90.6 | |||||||||||||
Selling, general and administrative expenses | 141.8 | 150.1 | 8.3 | |||||||||||||
Acquisition-related expenses, net | 0.2 | 0.7 | 0.5 | |||||||||||||
Other operating income, net | (2.7 | ) | (4.8 | ) | (2.1 | ) | ||||||||||
Earnings from operations | $ | 315.3 | $ | 218.0 | $ | 97.3 | ||||||||||
(5) The variance reflects the change between Heritage Martin Marietta 2014 and Heritage Martin Marietta 2013. |
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|
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Unaudited Financial Highlights - |
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(Dollars in millions) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
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Heritage West |
Acquired |
West | ||||||||||||||
2014 (1) |
2014 (2) |
2014 | ||||||||||||||
Net sales | $ | 221.5 | $ | 138.0 | $ | 359.5 | ||||||||||
Freight and delivery revenues | 32.4 | 7.5 | 39.9 | |||||||||||||
Total revenues | 253.9 | 145.5 | 399.4 | |||||||||||||
Cost of sales | 189.1 | 131.4 | 320.5 | |||||||||||||
Freight and delivery costs | 32.4 | 7.5 | 39.9 | |||||||||||||
Total cost of revenues | 221.5 | 138.9 | 360.4 | |||||||||||||
Gross profit | $ | 32.4 | $ | 6.6 | $ | 39.0 | ||||||||||
(1) Heritage West 2014 results reflect the 2014 West results less the operating results of acquired TXI locations. |
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(2) Acquired operations reflect the operating results for all
acquired TXI aggregates and ready mixed concrete operations
reported in the |
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Three Months Ended | ||||||||||||||||
|
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Heritage West | West |
Variance(3) - |
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2014 | 2013 | |||||||||||||||
Net sales | $ | 221.5 | $ | 198.5 | $ | 23.0 | ||||||||||
Freight and delivery revenues | 32.4 | 27.2 | 5.2 | |||||||||||||
Total revenues | 253.9 | 225.7 | 28.2 | |||||||||||||
Cost of sales | 189.1 | 174.6 | (14.5 | ) | ||||||||||||
Freight and delivery costs | 32.4 | 27.2 | (5.2 | ) | ||||||||||||
Total cost of revenues | 221.5 | 201.8 | (19.7 | ) | ||||||||||||
Gross profit | $ | 32.4 | $ | 23.9 | $ | 8.5 | ||||||||||
(3) The variance reflects the change between Heritage West 2014 and West 2013. |
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|
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Unaudited Financial Highlights - |
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(Dollars in millions) | ||||||||||||||||
Year Ended |
||||||||||||||||
Heritage West |
Acquired |
West | ||||||||||||||
2014 (1) |
2014 (2) |
2014 | ||||||||||||||
Net sales | $ | 905.9 | $ | 302.0 | $ | 1,207.9 | ||||||||||
Freight and delivery revenues | 133.1 | 15.3 | 148.4 | |||||||||||||
Total revenues | 1,039.0 | 317.3 | 1,356.3 | |||||||||||||
Cost of sales | 766.8 | 285.4 | 1,052.2 | |||||||||||||
Freight and delivery costs | 133.1 | 15.3 | 148.4 | |||||||||||||
Total cost of revenues | 899.9 | 300.7 | 1,200.6 | |||||||||||||
Gross profit | $ | 139.1 | 16.6 | $ | 155.7 | |||||||||||
Add back: Impact of selling acquired inventory due to the markup to fair value (3) |
6.8 | |||||||||||||||
Adjusted gross profit (4) | $ | 23.4 | ||||||||||||||
(1) Heritage West 2014 results reflect the 2014 West results less the operating results of acquired TXI locations. |
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(2) Acquired operations reflect the operating results for all
acquired TXI aggregates and ready mixed concrete operations
reported in the |
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(3) Reflects the nonrecurring impact of writing up acquired aggregates and ready mixed concrete acquired inventories to fair value at the acquisition date. |
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(4) Represents non-GAAP measure and is presented so investors and analysts can evaluate and forecast future results of operations that will not include the one-time cost resulting from selling acquired inventory. |
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Year Ended |
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Heritage West | West |
Variance(5) - |
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2014 | 2013 | |||||||||||||||
Net sales | $ | 905.9 | $ | 771.1 | $ | 134.8 | ||||||||||
Freight and delivery revenues | 133.1 | 104.5 | 28.6 | |||||||||||||
1,039.0 | 875.6 | 163.4 | ||||||||||||||
Cost of sales | 766.8 | 678.6 | (88.2 | ) | ||||||||||||
Freight and delivery costs | 133.1 | 104.5 | (28.6 | ) | ||||||||||||
Total cost of revenues | 899.9 | 783.1 | (116.8 | ) | ||||||||||||
Gross profit | $ | 139.1 | $ | 92.5 | $ | 46.6 | ||||||||||
(5) The variance reflects the change between Heritage West 2014 and West 2013. |
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Balance Sheet Data | |||||||||
(In millions) | |||||||||
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|
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2014 | 2013 | ||||||||
(Unaudited) | (Audited) | ||||||||
ASSETS | |||||||||
Cash and cash equivalents | $ | 108.7 | $ | 42.4 | |||||
Accounts receivable, net | 421.0 | 245.4 | |||||||
Inventories, net | 484.9 | 347.3 | |||||||
Other current assets | 274.2 | 120.2 | |||||||
Property, plant and equipment, net | 3,402.8 | 1,799.3 | |||||||
Intangible assets, net | 2,664.0 | 665.2 | |||||||
Other noncurrent assets | 108.8 | 40.0 | |||||||
Total assets | $ | 7,464.4 | $ | 3,259.8 | |||||
LIABILITIES AND EQUITY | |||||||||
Current maturities of long-term debt and short-term facilities | $ | 14.3 | $ | 12.4 | |||||
Other current liabilities | 382.3 | 198.1 | |||||||
Long-term debt (excluding current maturities) | 1,571.1 | 1,018.5 | |||||||
Other noncurrent liabilities | 1,144.0 | 455.9 | |||||||
Total equity | 4,352.7 | 1,574.9 | |||||||
Total liabilities and equity | $ | 7,464.4 | $ | 3,259.8 | |||||
|
|||||||||||
Unaudited Statements of Cash Flows | |||||||||||
(In millions) |
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Year Ended | |||||||||||
|
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2014 | 2013 | ||||||||||
Operating activities: | |||||||||||
Consolidated net earnings | $ | 154.3 | $ | 119.4 | |||||||
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: | |||||||||||
Depreciation, depletion and amortization | 222.7 | 173.8 | |||||||||
Stock-based compensation expense | 9.0 | 7.0 | |||||||||
Gains on divestitures and sales of assets | (52.3 | ) | (2.3 | ) | |||||||
Deferred income taxes | 50.3 | 24.1 | |||||||||
Excess tax benefits from stock-based compensation | (2.5 | ) | (2.4 | ) | |||||||
Other items, net | 4.9 | (0.4 | ) | ||||||||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | |||||||||||
Accounts receivable, net | (16.7 | ) | (22.5 | ) | |||||||
Inventories, net | (12.0 | ) | (11.6 | ) | |||||||
Accounts payable | 5.3 | 20.1 | |||||||||
Other assets and liabilities, net | 18.7 | 3.8 | |||||||||
Net cash provided by operating activities | 381.7 | 309.0 | |||||||||
Investing activities: | |||||||||||
Additions to property, plant and equipment | (232.2 | ) | (155.2 | ) | |||||||
Acquisitions, net | (0.2 | ) | (64.5 | ) | |||||||
Cash received in acquisition | 59.9 | - | |||||||||
Proceeds from divestitures and sales of assets | 122.0 | 8.5 | |||||||||
Repayments from affiliate | 1.2 | - | |||||||||
Payment of railcar construction advances | (14.5 | ) | - | ||||||||
Reimbursement of railcar construction advances | 14.5 | - | |||||||||
Loan to affiliate | - | (3.4 | ) | ||||||||
Net cash used for investing activities | (49.3 | ) | (214.6 | ) | |||||||
Borrowings of long-term debt | 868.8 | 604.4 | |||||||||
Repayments of long-term debt | (1,057.3 | ) | (621.1 | ) | |||||||
Payments on capital leases | (3.1 | ) | (0.1 | ) | |||||||
Change in bank overdraft | (2.3 | ) | 2.5 | ||||||||
Dividends paid | (91.3 | ) | (74.2 | ) | |||||||
Debt issue costs | (2.8 | ) | (2.1 | ) | |||||||
Distributions to owners of noncontrolling interests | (0.8 | ) | (0.9 | ) | |||||||
Purchase of remaining interest in existing subsidiaries | (19.5 | ) | - | ||||||||
Excess tax benefits from stock-based compensation | 2.5 | 2.4 | |||||||||
Issuances of common stock | 39.7 | 11.7 | |||||||||
Net cash used for financing activities | (266.1 | ) | (77.4 | ) | |||||||
Net increase in cash and cash equivalents | 66.3 | 17.0 | |||||||||
Cash and cash equivalents, beginning of period | 42.4 | 25.4 | |||||||||
Cash and cash equivalents, end of period | $ | 108.7 | $ | 42.4 | |||||||
|
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Unaudited Operational Highlights | |||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
|
|
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Volume | Pricing | Volume | Pricing | ||||||||||||||||||
Volume/Pricing Variance (1) | |||||||||||||||||||||
Heritage Aggregates Product Line: (2) | |||||||||||||||||||||
|
7.7 | % | 3.9 | % | 3.1 | % | 3.8 | % | |||||||||||||
|
4.1 | % | 7.2 | % | 6.0 | % | 6.4 | % | |||||||||||||
|
8.6 | % | 9.3 | % | 13.8 | % | 5.1 | % | |||||||||||||
Heritage Aggregates Operations | 7.6 | % | 6.0 | % | 7.5 | % | 4.1 | % | |||||||||||||
Aggregates Product Line (3) | 18.8 | % | 6.7 | % | 13.7 | % | 4.5 | % | |||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
|
|
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Shipments (tons in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Heritage Aggregates Product Line: (2) | |||||||||||||||||||||
|
16,800 | 15,597 | 64,959 | 62,982 | |||||||||||||||||
|
4,358 | 4,186 | 18,289 | 17,250 | |||||||||||||||||
|
12,665 | 11,665 | 54,873 | 48,201 | |||||||||||||||||
Heritage Aggregates Operations | 33,823 | 31,448 | 138,121 | 128,433 | |||||||||||||||||
Acquisitions | 3,527 | - | 7,929 | - | |||||||||||||||||
Aggregates Product Line (3) | 37,350 | 31,448 | 146,050 | 128,433 | |||||||||||||||||
(1) Volume/pricing variances reflect the percentage increase (decrease) from the comparable period in the prior year. |
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(2) Heritage Aggregates Product Line and Heritage Aggregates Operations exclude volume and pricing data for acquisitions that have not been included in prior-year operations for the comparable period. |
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(3) Aggregates Product Line includes all acquisitions from the date of acquisition and divestitures through the date of disposal. |
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Three Months Ended | Year Ended | ||||||||||||||||||||
|
|
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2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Heritage: | |||||||||||||||||||||
Aggregates tons - external customers | 32,389 | 30,274 | 132,523 | 123,792 | |||||||||||||||||
Internal aggregates tons used in other product lines |
1,434 | 1,174 | 5,598 | 4,641 | |||||||||||||||||
Total aggregates tons | 33,823 | 31,448 | 138,121 | 128,433 | |||||||||||||||||
Asphalt tons - external customers | 326 | 288 | 1,508 | 1,361 | |||||||||||||||||
Internal asphalt tons used in road paving business | 460 | 471 | 1,807 | 1,728 | |||||||||||||||||
Total asphalt tons | 786 | 759 | 3,315 | 3,089 | |||||||||||||||||
|
493 | 481 | 2,033 | 1,742 | |||||||||||||||||
Acquisitions: | |||||||||||||||||||||
Aggregates tons - external customers | 2,541 | - | 5,699 | - | |||||||||||||||||
Internal aggregates tons used in other product lines | 986 | - | 2,230 | - | |||||||||||||||||
Total aggregates tons | 3,527 | - | 7,929 | - | |||||||||||||||||
|
1,280 | - | 2,746 | - | |||||||||||||||||
Cement tons-external customers | 1,048 | - | 2,318 | - | |||||||||||||||||
Internal cement tons used in other product lines | 252 | - | 506 | - | |||||||||||||||||
|
1,300 | - | 2,824 | - | |||||||||||||||||
Average unit sales price by product line (including internal sales): |
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Heritage: | |||||||||||||||||||||
Aggregates (per ton) | $ | 11.30 | $ | 10.67 | $ | 11.07 | $ | 10.63 | |||||||||||||
Asphalt (per ton) | $ | 39.90 | $ | 42.03 | $ | 41.26 | $ | 42.09 | |||||||||||||
|
$ | 96.02 | $ | 86.73 | $ | 93.27 | $ | 83.73 | |||||||||||||
Acquisitions: | |||||||||||||||||||||
Aggregates (per ton) | $ | 12.13 | $ | - | $ | 11.96 | $ | - | |||||||||||||
|
$ | 82.74 | $ | - | $ | 84.53 | $ | - | |||||||||||||
Cement (per ton)(5) | $ | 93.02 | $ | - | $ | 89.21 | $ | - | |||||||||||||
(4) Ready mix operations acquired by Martin Marietta on July 1, 2014. For comparative purposes, for the three months ended September 30, 2014, the Corporation shipped 1,466 cubic yards of ready mixed concrete from these operations at an average price of $86.10 per cubic yard. The volume decline in the quarter ended December 31, 2014 compared with the quarter ended September 30, 2014 reflects the seasonality of the business. The decline in average selling price reflects the ceasing of temperature control methods that are used in warmer months. When used, temperature control methods result in additional cost that is reflected in the price charged to customers. |
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(5) Cement operations acquired by Martin Marietta on July 1, 2014. For comparative purposes, for the three months ended September 30, 2014, the Corporation shipped 1,525 tons of cement from these operations at an average price of $85.95 per ton. The volume decline in the quarter ended December 31, 2014 compared with the quarter ended September 30, 2014 reflects the seasonality of the business. The higher average selling price reflects the $10 per ton increase implemented during the quarter ended December 31, 2014. |
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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 Corporation presents these ratios calculated based on net sales, as it is consistent with the basis by which management reviews the Corporation's operating results. Further, management believes it is consistent with the basis by which investors analyze the Corporation'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 and operating margin for the three months and year ended December 31, 2014 and 2013, in accordance with GAAP and reconciliations of the ratios as percentages of total revenues to percentages of net sales:
Gross Margin in Accordance with Generally Accepted Accounting Principles |
Three Months Ended | Year Ended | |||||||||||||||||||
|
December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Gross profit | $ | 165.3 | $ | 101.0 | $ | 522.4 | $ | 364.0 | |||||||||||||
Total revenues | $ | 856.3 | $ | 545.0 | $ | 2,958.0 | $ | 2,155.5 | |||||||||||||
Gross margin | 19.3 | % | 18.5 | % | 17.7 | % | 16.9 | % | |||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
Gross Margin Excluding Freight and Delivery Revenues | December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Gross profit | $ | 165.3 | $ | 101.0 | $ | 522.4 | $ | 364.0 | |||||||||||||
Total revenues | $ | 856.3 | $ | 545.0 | $ | 2,958.0 | $ | 2,155.5 | |||||||||||||
Less: Freight and delivery revenues | (76.8 | ) | (53.6 | ) | (278.9 | ) | (212.3 | ) | |||||||||||||
Net sales | $ | 779.5 | $ | 491.4 | $ | 2,679.1 | $ | 1,943.2 | |||||||||||||
Gross margin excluding freight and delivery revenues | 21.2 | % | 20.6 | % | 19.5 | % | 18.7 | % | |||||||||||||
Operating Margin in Accordance with Generally Accepted Accounting Principles |
Three Months Ended | Year Ended | |||||||||||||||||||
|
December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Earnings from operations | $ | 118.6 | $ | 62.8 | $ | 314.9 | $ | 218.0 | |||||||||||||
Total revenues | $ | 856.3 | $ | 545.0 | $ | 2,958.0 | $ | 2,155.5 | |||||||||||||
Operating margin | 13.9 | % | 11.5 | % | 10.6 | % | 10.1 | % | |||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
Operating Margin Excluding Freight and Delivery Revenues | December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Earnings from operations | $ | 118.6 | $ | 62.8 | $ | 314.9 | $ | 218.0 | |||||||||||||
Total revenues | $ | 856.3 | $ | 545.0 | $ | 2,958.0 | $ | 2,155.5 | |||||||||||||
Less: Freight and delivery revenues | (76.8 | ) | (53.6 | ) | (278.9 | ) | (212.3 | ) | |||||||||||||
Net sales | $ | 779.5 | $ | 491.4 | $ | 2,679.1 | $ | 1,943.2 | |||||||||||||
Operating margin excluding freight and delivery revenues | 15.2 | % | 12.8 | % | 11.8 | % | 11.2 | % | |||||||||||||
Non-GAAP Financial
Measures (continued)
(Dollars, other than earnings per share
amounts, and number of shares in millions)
Adjusted consolidated earnings from operations and adjusted earnings per diluted share for the three months and year ended December 31, 2014, exclude the impact of acquisition-related expenses, net, related to the TXI acquisition and the impact of selling acquired inventory due to the markup to fair value as part of accounting for the TXI acquisition. Acquisition-related expenses, net, consist of acquisition and integration expenses and the nonrecurring gain on a divestiture. Adjusted consolidated earnings from operations and adjusted earnings per diluted share represent non-GAAP financial measures. Management presents these measures for investors and analysts to evaluate and forecast the Corporation's financial results, as acquisition-related expenses, net, and the impact of selling acquired inventory due to the markup to fair value are nonrecurring.
The following shows the calculation of the impact of acquisition-related expenses, net, related to the combination with TXI on the earnings per diluted share for the three months and year ended December 31, 2014:
Three Months |
|||||||||||
Ended | Year Ended | ||||||||||
Acquisition-related expenses, net, related to the business combination with TXI | $ | 1.6 | $ | 42.7 | |||||||
Income tax expense | 1.6 | 9.1 | |||||||||
After-tax impact of acquisition-related expenses, net, related to the business combination with TXI |
$ | 3.2 | $ | 51.8 | |||||||
Diluted average number of common shares outstanding | 67.6 | 57.1 | |||||||||
Per diluted share impact of acquisition-related expenses, net, related to the business combination with TXI |
$ | (0.05 | ) | $ | (0.91 | ) | |||||
The following shows the calculation of the earnings per diluted share impact of selling acquired inventory due to the markup to fair value as part of accounting for the TXI acquisition for the three months and year ended December 31, 2014: |
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Three Months | |||||||||||
Ended | Year Ended | ||||||||||
Earnings impact of selling acquired inventory due to markup to fair value as part of accounting for the TXI acquisition |
$ | (0.2 | ) | $ | (11.1 | ) | |||||
Income tax benefit | 0.1 | 4.1 | |||||||||
After-tax impact of selling acquired inventory due to markup to fair value as part of accounting for the TXI acquisition | $ | (0.1 | ) | $ | (7.0 | ) | |||||
Diluted average number of common shares outstanding | 67.6 | 57.1 | |||||||||
Per diluted share impact of selling acquired inventory due to markup to fair value as part of accounting for the TXI acquisition | $ | - | $ | (0.12 | ) | ||||||
The following reconciles consolidated earnings from operations in accordance with generally accepted accounting principles for the three months and year ended December 31, 2014, to adjusted consolidated earnings from operations, which excludes the impact of acquisition-related expenses, net, and the impact of selling acquired inventory due to the markup to fair value as part of the business combination with TXI |
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Three Months |
|||||||||||
Ended | Year Ended | ||||||||||
Consolidated earnings from operations in accordance with generally accepted accounting principles | $ | 118.6 | $ | 314.9 | |||||||
Add back: Acquisition-related expenses, net, related to the business combination with TXI | 1.6 | 42.7 | |||||||||
Impact of selling acquired inventory due to the markup to fair value as part of the business combination with TXI | 0.2 | 11.1 | |||||||||
Adjusted consolidated earnings from operations | $ | 120.4 | $ | 368.7 | |||||||
The following reconciles the earnings per diluted share in accordance with generally accepted accounting principles for the three months and year ended December 31, 2014, to adjusted earnings per diluted share, which excludes the impact of acquisition-related expenses, net, and the impact of selling acquired inventory due to the markup to fair value as part of the business combination with TXI |
|||||||||||
Three Months |
|||||||||||
Ended | Year Ended | ||||||||||
Earnings per diluted share in accordance with generally accepted accounting principles | $ | 0.94 | $ | 2.71 | |||||||
Add back: Per diluted share impact of acquisition-related expenses, net, related to the business combination with TXI | 0.05 | 0.91 | |||||||||
Per diluted share impact of selling acquired inventory due to the markup to fair value as part of the business combination with TXI | - | 0.12 | |||||||||
Adjusted earnings per diluted share | $ | 0.99 | $ | 3.74 | |||||||
Adjusted gross profit for the year ended December 31, 2014, excludes the impact of selling acquired inventory due to the markup to fair value as part of accounting for the TXI acquisition and is a non-GAAP measure. Management presents this measure for investors and analysts to evaluate and forecast the Corporation's financial results, as the impact of selling acquired inventory due to the markup to fair value is nonrecurring. |
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The following reconciles gross profit to adjusted gross profit for the year ended December 31, 2014 for the Cement business and the acquired TXI operations | |||||||||||
Cement |
Acquired TXI |
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Business | Operations | ||||||||||
Gross profit in accordance with generally accepted accounting principles | $ | 52.5 | $ | 67.8 | |||||||
Add back: Impact of selling acquired inventory due to the markup to fair value as part of the business combination with TXI | 4.3 | 11.1 | |||||||||
Adjusted gross profit | $ | 56.8 | $ | 78.9 | |||||||
Adjusted cash provided by operating activities for the year ended December 31, 2014, excludes the impact of TXI transaction and integration expenses and is a non-GAAP measure. Management presents this measure for investors and analysts to evaluate and forecast the Corporation's ability to generate operating cash flow, as the amounts paid in 2014 for TXI transaction and integration expenses are nonrecurring. |
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The following reconciles net cash provided by operating activities in accordance with GAAP to adjusted cash provided by operating activities for the year ended December 31, 2014. | |||||||||||
Net cash provided by operating activities |
$ | 381.7 | |||||||||
Add back: cash payments during 2014 for TXI transaction and integration expenses | 70.3 | ||||||||||
Adjusted cash provided by operating activities | $ | 452.0 | |||||||||
Non-GAAP Financial
Measures (continued)
(Dollars in millions)
The ratio of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing twelve months is a covenant under the Corporation's revolving credit facility, term loan facility and accounts receivable securitization facility. Under the terms of these agreements, as amended, the Corporation's ratio of Consolidated Debt-to-Consolidated EBITDA as defined, for the trailing twelve months can not exceed 3.50 times as of December 31, 2014, with certain exceptions related to qualifying acquisitions, as defined.
The following presents the calculation of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing-twelve months at December 31, 2014.
For supporting calculations, refer to Corporation's website at www.martinmarietta.com.
Twelve-Month Period | ||||||
January 1, 2014 to | ||||||
December 31, 2014 | ||||||
Earnings from continuing operations attributable to |
$ | 155.6 | ||||
Add back: | ||||||
Interest expense | 66.1 | |||||
Income tax expense | 94.8 | |||||
Depreciation, depletion and amortization expense | 220.0 | |||||
Stock-based compensation expense | 9.0 | |||||
TXI acquisition-related expenses, net, | 42.7 | |||||
Deduct: | ||||||
Interest income | (0.5 | ) | ||||
TXI EBITDA pre-acquisition (January 1, 2014 - June 30, 2014) | 43.5 | |||||
Consolidated EBITDA, as defined | $ | 631.2 | ||||
Consolidated Debt, including debt for which the Corporation is a co-borrower, at December 31, 2014 | $ | 1,550.6 | ||||
Consolidated Debt-to-Consolidated EBITDA, as defined, at December 31, 2014 for the trailing twelve-month EBITDA |
2.46 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 Corporation's website at www.martinmarietta.com. EBITDA is as follows for the three months and year ended December 31, 2014 and 2013. |
Three Months Ended | Year Ended | ||||||||||
December 31, | December 31, | ||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||
Consolidated Earnings Before Interest, Income Taxes, Depreciation, Depletion and Amortization (EBITDA) | $ | 188.3 | $ | 106.3 | $ | 537.0 | $ | 390.2 | |||
A Reconciliation of Net Earnings Attributable to |
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Three Months Ended | Year Ended | ||||||||||
December 31, | December 31, | ||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||
Net Earnings Attributable to |
$ | 64.0 | $ | 36.0 | $ | 155.6 | $ | 121.3 | |||
Add back: | |||||||||||
Interest Expense | 21.1 | 12.8 | 66.1 | 53.5 | |||||||
Income Tax Expense for Controlling Interests | 35.3 | 14.3 | 94.8 | 43.5 | |||||||
Depreciation, Depletion and Amortization Expense | 67.9 | 43.2 | 220.5 | 171.9 | |||||||
Consolidated EBITDA | $ | 188.3 | $ | 106.3 | $ | 537.0 | $ | 390.2 | |||
A Reconciliation of earnings before taxes on income to EBITDA for the Cement business and the acquired TXI operations for the quarter ended December 31, 2014 is as follows: | |||||||||||
Cement | Acquired TXI | ||||||||||
Business | Operations | ||||||||||
Earnings Before Taxes On Income | $ | 22.4 | $ | 23.4 | |||||||
Add back: | |||||||||||
Interest Expense | 0.1 | 1.8 | |||||||||
Depreciation, Depletion and Amortization Expense | 15.2 | 25.8 | |||||||||
EBITDA | $ | 37.7 | $ | 51.0 | |||||||
MLM-E
Executive
Vice President and Chief Financial Officer
www.martinmarietta.com
Source:
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