Martin Marietta Delivers Record Third-Quarter Performance
Company Sets New Records for Consolidated
Consolidated Gross Margin (Excluding Freight and Delivery Revenues) Expands 210 Basis Points
Earnings per Diluted Share Increases 43% to
Aggregates Product Line Pricing Up Nearly 9%
Magnesia Specialties Record Gross Margin (Excluding Freight and Delivery Revenues) of 38%
"The businesses' underlying quarterly performance was outstanding. Every
business across the broad spectrum of our enterprise made meaningful
contributions, reflecting the soundness of our strategic planning
together with market-specific execution. For example, positive
underlying market conditions contributed to the
"As we look forward to 2017, we note that domestic job growth remains a
strong catalyst for construction activity and demand for our products.
In fact, during the last three years,
"We anticipate infrastructure activity should grow as the impact of the
NOTABLE ITEMS FOR THE THIRD QUARTER (All growth and margin comparisons are versus the prior-year period) |
|||||||||||||||||
Quarter-ended |
Nine-months ended |
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Consolidated net sales |
$ |
1.038B |
$ |
1.005B |
$ |
2.688B |
$ |
2.487B |
|||||||||
% growth | 3.3 | % | 8.1 | % | |||||||||||||
Consolidated gross profit | $ | 292.6M | $ | 262.5M | $ | 683.9M | $ | 536.9M | |||||||||
% growth | 11.5 | % | 27.4 | % | |||||||||||||
Consolidated gross profit margin (excluding freight and delivery revenues) |
28.2 | % | 26.1 | % | 25.4 | % | 21.6 | % | |||||||||
margin expansion |
|
210 bps |
|
380 bps |
|||||||||||||
Earnings from operations | $ | 240.4M | $ | 179.5M | $ | 511.9M | $ | 342.1M | |||||||||
% growth | 33.9 | % | 49.6 | % | |||||||||||||
EBITDA 1 | $ | 322.8M | $ | 248.2M | $ | 741.9M | $ | 546.3M | |||||||||
% growth | 30.1 | % | 35.8 | % | |||||||||||||
EBITDA margin as a % of net sales | 31.1 | % | 24.7 | % | 27.6 | % | 22.0 | % | |||||||||
margin expansion |
|
640 bps |
|
560 bps |
|||||||||||||
Earnings per diluted share | $ | 2.49 | $ | 1.74 | $ | 5.08 | $ | 3.03 | |||||||||
% growth | 43.1 | % | 67.7 | % | |||||||||||||
Aggregates Product Line: | |||||||||||||||||
Net sales | $ | 542.7M | $ | 530.0M |
$ |
1.466B |
$ |
1.344B |
|||||||||
% growth | 2.4 | % | 9.1 | % | |||||||||||||
Gross profit | $ | 173.0M | $ | 166.1M | $ | 418.5M | $ | 344.9M | |||||||||
% growth | 4.1 | % | 21.3 | % | |||||||||||||
Gross profit margin (excluding freight and delivery revenues) | 31.9 | % | 31.4 | % | 28.6 | % | 25.7 | % | |||||||||
margin expansion |
|
50 bps |
|
290 bps |
|||||||||||||
Aggregates-related downstream operations: |
|
||||||||||||||||
Net sales | $ | 375.3M | $ | 307.4M | $ | 853.9M | $ | 659.5M | |||||||||
% growth | 22.1 | % | 29.5 | % | |||||||||||||
Gross profit | $ | 70.3M | $ | 45.7M | $ | 120.3M | $ | 60.1M | |||||||||
% growth | 54.0 | % | 100.0 | % | |||||||||||||
Gross profit margin (excluding freight and delivery revenues) | 18.7 | % | 14.8 | % | 14.1 | % | 9.1 | % | |||||||||
margin expansion |
|
390 bps |
|
500 bps |
|||||||||||||
Cement 2: |
|
||||||||||||||||
Net sales | $ | 60.1M | $ | 79.7M | $ | 189.7M | $ | 209.4M | |||||||||
% growth | (24.6 | %) | (9.4 | %) | |||||||||||||
Gross profit | $ | 29.7M | $ | 34.9M | $ | 86.2M | $ | 85.0M | |||||||||
% growth | (14.9 | %) | 1.4 | % | |||||||||||||
Gross profit margin (excluding freight and delivery revenues) | 49.5 | % | 43.8 | % | 45.4 | % | 40.6 | % | |||||||||
margin expansion |
|
570 bps |
|
480 bps |
|||||||||||||
Magnesia Specialties: | |||||||||||||||||
Net sales | $ | 60.2M | $ | 57.3M | $ | 178.6M | $ | 176.5M | |||||||||
% growth | 5.2 | % | 1.2 | % | |||||||||||||
Gross profit | $ | 22.8M | $ | 19.4M | $ | 67.5M | $ | 60.8M | |||||||||
% growth | 17.6 | % | 11.0 | % | |||||||||||||
Gross profit margin (excluding freight and delivery revenues) | 37.9 | % | 33.9 | % | 37.8 | % | 34.4 | % | |||||||||
margin expansion |
|
400 bps |
|
340 bps |
|||||||||||||
1 See page 20 for a reconciliation to net earnings. |
|||||||||||||||||
2 Cement results reflect |
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QUARTERLY OPERATING RESULTS (All comparisons are versus the prior-year quarter unless noted otherwise)
Aggregates Business
Aggregates product line shipments to the infrastructure market comprised
42 percent of quarterly volumes and decreased 7.2 percent.
Infrastructure shipments in the third quarter were impacted by
significant rainfall and project start-up delays, primarily in
The nonresidential market represented 31 percent of quarterly aggregates
product line shipments and declined 4.3 percent. The
The residential market accounted for 18 percent of quarterly aggregates
product line shipments. Volumes to this segment increased 3.0 percent,
due to the continued housing recovery. While the pace of housing permit
growth has slowed,
Overall, aggregates product line shipments decreased 4.7 percent, reflecting various department of transportation delays, weather-driven impacts in addition to reduced energy-related shipments and lower ballast demand.
Aggregates product line pricing improvement of 8.5 percent reflects
growth in all reportable groups, led by a 13.7 percent increase in the
The ready mixed concrete product line continued to benefit from strong demand and better pricing. Inclusive of operations acquired during the quarter, these factors drove a 17.8 percent increase in shipments and a 6.1 percent increase in average selling price. Increased sales led to a 380-basis-point improvement in gross margin (excluding freight and delivery revenues). Excluding the results of businesses acquired in 2016, ready mixed concrete volumes and average selling price increased 3.6 percent and 7.0 percent, respectively, driving gross margin expansion (excluding freight and delivery revenues) of 415 basis points.
The Aggregates business' gross margin (excluding freight and delivery revenues) was 26.5 percent, an increase of 120 basis points, driven by aggregates product line pricing improvement and improved margins in the aggregates-related downstream business.
Cement Business
The Cement business generated
Planned cement kiln maintenance costs of
Magnesia Specialties Business
Magnesia Specialties delivered record performance and generated
third-quarter net sales of
CONSOLIDATED OPERATING RESULTS
SG&A was 5.4 percent of net sales, down slightly compared with the
prior-year quarter. Earnings from operations for the quarter were
The estimated effective income tax rate for the quarter was 31 percent,
which is in line with annual guidance. For the year, the Company expects
to fully utilize the
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities for the first nine months of the
year was
At
SHARE REPURCHASE PROGRAM
The Company is authorized to execute a share repurchase program under which it 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.
The Company has repurchased 4.5 million shares and, including the
payment of dividends, returned
FULL-YEAR OUTLOOK
The Company is encouraged by positive trends in the markets it serves and its ability to execute its strategic business plans. Notably:
- For the public sector, continued modest growth is expected in 2016 as new monies begin to flow into the system, particularly in the second half of the year. Additionally, state initiatives to finance infrastructure projects, including support from the Transportation Infrastructure Finance and Innovation Act (TIFIA), are expected to grow and continue to play an expanded role in public-sector activity.
- Nonresidential construction is expected to increase in both the heavy industrial and commercial sectors. The Dodge Momentum Index is near its highest level since 2009 and signals continued growth. Additionally, energy-related economic activity, including follow-on public and private construction activities in the Company's primary markets, will be mixed with overall strength in large downstream construction projects, providing a counterbalance to energy-sector headwinds.
- Residential construction is expected to continue to experience good growth metrics, driven by positive employment gains, historically low levels of construction activity over the previous several years, low mortgage rates, significant lot absorption, and higher multi-family rental rates.
Based on these trends and expectations, including a return to normal weather patterns, the Company anticipates achieving the following for the full year:
-
Aggregates end-use markets compared with 2015 levels are as follows:
- Infrastructure market to increase low-single digits.
- Nonresidential market to increase in the mid-single digits.
- Residential market to experience a high-single digit increase.
-
ChemRock /Rail market to experience a decline.
2016 GUIDANCE |
|||||||||
Low |
High |
||||||||
Consolidated Results |
|||||||||
Consolidated net sales |
$ |
3.5B |
$ |
3.7B |
|||||
Consolidated gross profit | $ | 900M | $ | 925M | |||||
SG&A | $ | 225M | $ | 230M | |||||
Interest expense | $ | 80M | $ | 80M | |||||
Estimated tax rate (excluding discrete events) | 30.0 | % | 30.0 | % | |||||
Capital Expenditures | $ | 350M | $ | 350M | |||||
EBITDA | $ | 950M |
$ |
1.00B |
|||||
Aggregates Product Line |
|||||||||
Volume (total tons) 1 | 159.5M | 161.0M | |||||||
% growth 1 | 2 | % | 3 | % | |||||
Volume (external tons) | 150.0M | 151.5M | |||||||
Average selling price per ton | $ | 12.90 | $ | 13.00 | |||||
% growth | 7.5 | % | 8.5 | % | |||||
Net sales |
$ |
1.9B |
$ |
2.0B |
|||||
Gross profit | $ | 560M | $ | 570M | |||||
Direct production cost per ton shipped | $ | 7.50 | $ | 7.60 | |||||
Aggregates-related downstream operations |
|||||||||
Net sales |
$ |
1.10B |
$ |
1.15B |
|||||
Gross profit | $ | 150M | $ | 155M | |||||
Cement |
|||||||||
Volume (total tons) | 3.5M | 3.6M | |||||||
% growth 2 | 0 | % | 3 | % | |||||
Volume (external tons) | 2.4M | 2.5M | |||||||
Average selling price per ton | $ | 102.00 | $ | 103.00 | |||||
% growth 2 | 1 | % | 2 | % | |||||
Net sales | $ | 250M | $ | 260M | |||||
Gross profit | $ | 105M | $ | 110M | |||||
Magnesia Specialties |
|||||||||
Net sales | $ | 235M | $ | 240M | |||||
Gross profit | $ | 85M | $ | 90M | |||||
1 Represents 2016 total aggregates volumes, which includes approximately 9.5 million internal tons. Volume growth ranges are in comparison to total volumes of 156.4 million tons as reported for the full year 2015, which includes 9.2 million internal tons. |
|||||||||
2 2016 cement volume and price growth ranges
are for |
|||||||||
RISKS TO OUTLOOK
The 2016 outlook includes management's assessment of the likelihood of certain risks and uncertainties that will 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 on the federal budget and this impact on federal highway spending; 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, or some combination thereof; 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; and unexpected equipment failures, unscheduled maintenance, industrial accident or other prolonged and/or significant disruption to its cement 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 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, 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 fluctuation in the price of coal affects costs. The Magnesia Specialties business is sensitive to changes in domestic steel capacity utilization as well as the absolute price and fluctuation 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 efficient
transportation of 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 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 third quarter 2016 earnings results on a
conference call and an online web simulcast today (
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 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
MLM-E
|
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Unaudited Statements of Earnings | |||||||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
|
|
||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Net sales | $ | 1,038.3 | $ | 1,005.2 | $ | 2,687.7 | $ | 2,487.3 | |||||||||||||
|
65.6 | 77.0 | 182.2 | 207.7 | |||||||||||||||||
Total revenues | 1,103.9 | 1,082.2 | 2,869.9 | 2,695.0 | |||||||||||||||||
Cost of sales | 745.7 | 742.7 | 2,003.8 | 1,950.4 | |||||||||||||||||
|
65.6 | 77.0 | 182.2 | 207.7 | |||||||||||||||||
Total cost of revenues | 811.3 | 819.7 | 2,186.0 | 2,158.1 | |||||||||||||||||
Gross profit | 292.6 | 262.5 | 683.9 | 536.9 | |||||||||||||||||
Selling, general and administrative expenses | 56.3 | 54.9 | 177.7 | 161.1 | |||||||||||||||||
Acquisition-related expenses, net | 0.3 | 2.1 | 1.6 | 5.8 | |||||||||||||||||
Other operating (income) and expenses, net | (4.4 | ) | 26.0 | (7.3 | ) | 27.9 | |||||||||||||||
Earnings from operations | 240.4 | 179.5 | 511.9 | 342.1 | |||||||||||||||||
Interest expense | 20.6 | 18.9 | 60.9 | 57.4 | |||||||||||||||||
Other nonoperating income, net | (10.6 | ) | (4.5 | ) | (19.7 | ) | (6.6 | ) | |||||||||||||
Earnings before taxes on income | 230.4 | 165.1 | 470.7 | 291.3 | |||||||||||||||||
Income tax expense | 70.9 | 47.5 | 144.0 | 85.6 | |||||||||||||||||
Consolidated net earnings | 159.5 | 117.6 | 326.7 | 205.7 | |||||||||||||||||
Less: Net earnings attributable to noncontrolling interests | - | 0.1 | 0.2 | 0.1 | |||||||||||||||||
Net earnings attributable to |
$ | 159.5 | $ | 117.5 | $ | 326.5 | $ | 205.6 | |||||||||||||
Net earnings per common share attributable to common shareholders: | |||||||||||||||||||||
Basic | $ | 2.50 | $ | 1.75 | $ | 5.10 | $ | 3.05 | |||||||||||||
Diluted | $ | 2.49 | $ | 1.74 | $ | 5.08 | $ | 3.03 | |||||||||||||
Dividends per common share | $ | 0.42 | $ | 0.40 | $ | 1.22 | $ | 1.20 | |||||||||||||
Average number of common shares outstanding: | |||||||||||||||||||||
Basic | 63.5 | 66.8 | 63.7 | 67.2 | |||||||||||||||||
Diluted | 63.7 | 67.1 | 64.0 | 67.5 |
|
||||||||||||||||||
Unaudited Financial Highlights | ||||||||||||||||||
(In millions) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
|
|
|||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||
Net sales: | ||||||||||||||||||
Aggregates Business: | ||||||||||||||||||
|
$ | 275.8 | $ | 265.6 | $ | 708.2 | $ | 632.7 | ||||||||||
|
80.0 | 78.3 | 230.0 | 214.5 | ||||||||||||||
|
562.2 | 493.5 | 1,381.2 | 1,156.1 | ||||||||||||||
Total Aggregates Business | 918.0 | 837.4 | 2,319.4 | 2,003.3 | ||||||||||||||
Cement | 60.1 | 110.5 | 189.7 | 307.5 | ||||||||||||||
Magnesia Specialties | 60.2 | 57.3 | 178.6 | 176.5 | ||||||||||||||
Total | $ | 1,038.3 | $ | 1,005.2 | $ | 2,687.7 | $ | 2,487.3 | ||||||||||
Gross profit (loss): | ||||||||||||||||||
Aggregates Business: | ||||||||||||||||||
|
$ | 103.6 | $ | 97.4 | $ | 223.6 | $ | 184.7 | ||||||||||
|
15.9 | 11.5 | 41.8 | 24.1 | ||||||||||||||
|
123.8 | 102.9 | 273.4 | 196.2 | ||||||||||||||
Total Aggregates Business | 243.3 | 211.8 | 538.8 | 405.0 | ||||||||||||||
Cement | 29.7 | 38.2 | 86.2 | 87.6 | ||||||||||||||
Magnesia Specialties | 22.8 | 19.4 | 67.5 | 60.8 | ||||||||||||||
Corporate | (3.2 | ) | (6.9 | ) | (8.6 | ) | (16.5 | ) | ||||||||||
Total | $ | 292.6 | $ | 262.5 | $ | 683.9 | $ | 536.9 | ||||||||||
Selling, general and administrative expenses: | ||||||||||||||||||
Aggregates Business: | ||||||||||||||||||
|
$ | 12.9 | $ | 12.9 | $ | 39.5 | $ | 39.2 | ||||||||||
|
4.3 | 4.5 | 12.7 | 13.3 | ||||||||||||||
|
16.5 | 16.6 | 51.0 | 48.4 | ||||||||||||||
Total Aggregates Business | 33.7 | 34.0 | 103.2 | 100.9 | ||||||||||||||
Cement | 6.1 | 6.8 | 18.5 | 20.1 | ||||||||||||||
Magnesia Specialties | 2.4 | 2.4 | 7.2 | 7.1 | ||||||||||||||
Corporate | 14.1 | 11.7 | 48.8 | 33.0 | ||||||||||||||
Total | $ | 56.3 | $ | 54.9 | $ | 177.7 | $ | 161.1 | ||||||||||
Earnings (Loss) from operations: | ||||||||||||||||||
Aggregates Business: | ||||||||||||||||||
|
$ | 91.9 | $ | 85.7 | $ | 186.8 | $ | 148.4 | ||||||||||
|
11.9 | 7.6 | 30.4 | 10.8 | ||||||||||||||
|
110.8 | 87.5 | 227.0 | 151.2 | ||||||||||||||
Total Aggregates Business | 214.6 | 180.8 | 444.2 | 310.4 | ||||||||||||||
Cement | 23.0 | 2.8 | 70.6 | 37.5 | ||||||||||||||
Magnesia Specialties | 20.4 | 17.0 | 60.2 | 53.5 | ||||||||||||||
Corporate | (17.6 | ) | (21.1 | ) | (63.1 | ) | (59.3 | ) | ||||||||||
Total | $ | 240.4 | $ | 179.5 | $ | 511.9 | $ | 342.1 |
|
||||||||||||||||||
Unaudited Financial Highlights | ||||||||||||||||||
(In millions) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
|
|
|||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||
Net sales by product line: | ||||||||||||||||||
Heritage: | ||||||||||||||||||
Aggregates Business: | ||||||||||||||||||
Aggregates | $ | 538.0 | $ | 530.0 | $ | 1,453.7 | $ | 1,343.8 | ||||||||||
|
234.4 | 209.6 | 627.0 | 486.9 | ||||||||||||||
Asphalt and Paving | 110.0 | 97.8 | 186.1 | 172.6 | ||||||||||||||
Total Aggregates Business | 882.4 | 837.4 | 2,266.8 | 2,003.3 | ||||||||||||||
Cement Business | 60.1 | 110.5 | 189.7 | 307.5 | ||||||||||||||
Magnesia Specialties Business | 60.2 | 57.3 | 178.6 | 176.5 | ||||||||||||||
Acquisition: | ||||||||||||||||||
Aggregates Business: | ||||||||||||||||||
Aggregates | 4.7 | - | 11.8 | - | ||||||||||||||
|
29.3 | - | 38.4 | - | ||||||||||||||
Asphalt and Paving | 1.6 | - | 2.4 | - | ||||||||||||||
Total Aggregates Business | 35.6 | - | 52.6 | - | ||||||||||||||
Total | $ | 1,038.3 | $ | 1,005.2 | $ | 2,687.7 | $ | 2,487.3 | ||||||||||
Gross profit (loss) by product line: | ||||||||||||||||||
Heritage: | ||||||||||||||||||
Aggregates Business: | ||||||||||||||||||
Aggregates | $ | 173.3 | $ | 166.1 | $ | 420.8 | $ | 344.9 | ||||||||||
|
36.1 | 23.6 | 78.9 | 34.9 | ||||||||||||||
Asphalt and Paving | 30.0 | 22.1 | 36.7 | 25.2 | ||||||||||||||
Total Aggregates Business | 239.4 | 211.8 | 536.4 | 405.0 | ||||||||||||||
Cement Business | 29.7 | 38.2 | 86.2 | 87.6 | ||||||||||||||
Magnesia Specialties Business | 22.8 | 19.4 | 67.5 | 60.8 | ||||||||||||||
Corporate | (3.2 | ) | (6.9 | ) | (8.6 | ) | (16.5 | ) | ||||||||||
Acquisition: | ||||||||||||||||||
Aggregates Business: | ||||||||||||||||||
Aggregates | (0.3 | ) | - | (2.3 | ) | - | ||||||||||||
|
3.8 | - | 4.3 | - | ||||||||||||||
Asphalt and Paving | 0.4 | - | 0.4 | - | ||||||||||||||
Total Aggregates Business | 3.9 | - | 2.4 | - | ||||||||||||||
Total | $ | 292.6 | $ | 262.5 | $ | 683.9 | $ | 536.9 | ||||||||||
The following presents 2015 cement product line metrics for the
|
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2015 - Three Months Ended | ||||||||||||||||||
|
|
|
||||||||||||||||
Shipment tons (000s) | 376 | 367 | 328 | |||||||||||||||
Net sales | $ | 32.5 | $ | 33.9 | $ | 30.0 | ||||||||||||
Gross (loss) profit | $ | (4.0 | ) | $ | 3.7 | $ | 3.4 |
|
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Balance Sheet Data | |||||||||||||
(In millions) | |||||||||||||
|
|
|
|||||||||||
2016 | 2015 | 2015 | |||||||||||
(Unaudited) | (Audited) | (Unaudited) | |||||||||||
ASSETS | |||||||||||||
Cash and cash equivalents | $ | 60.7 | $ | 168.4 | $ | 436.4 | |||||||
Accounts receivable, net | 566.4 | 410.9 | 577.4 | ||||||||||
Inventories, net | 508.2 | 469.1 | 464.5 | ||||||||||
Other current assets | 56.2 | 33.2 | 37.4 | ||||||||||
Property, plant and equipment, net | 3,379.6 | 3,156.0 | 3,073.5 | ||||||||||
Intangible assets, net | 2,675.7 | 2,578.8 | 2,577.2 | ||||||||||
Other noncurrent assets | 126.4 | 141.2 | 142.0 | ||||||||||
Total assets | $ | 7,373.2 | $ | 6,957.6 | $ | 7,308.4 | |||||||
LIABILITIES AND EQUITY | |||||||||||||
Current maturities of long-term debt and short-term facilities | $ | 228.0 | $ | 18.7 | $ | 147.0 | |||||||
Other current liabilities | 376.9 | 348.0 | 427.9 | ||||||||||
Long-term debt (excluding current maturities) | 1,536.8 | 1,550.1 | 1,553.8 | ||||||||||
Other noncurrent liabilities | 1,073.1 | 980.6 | 927.1 | ||||||||||
Total equity | 4,158.4 | 4,060.2 | 4,252.6 | ||||||||||
Total liabilities and equity | $ | 7,373.2 | $ | 6,957.6 | $ | 7,308.4 |
|
|||||||||||
Unaudited Statements of Cash Flows | |||||||||||
(In millions) | |||||||||||
Nine Months Ended | |||||||||||
|
|||||||||||
2016 | 2015 | ||||||||||
Operating activities: | |||||||||||
Consolidated net earnings | $ | 326.7 | $ | 205.7 | |||||||
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: | |||||||||||
Depreciation, depletion and amortization | 212.0 | 199.9 | |||||||||
Stock-based compensation expense | 17.2 | 10.7 | |||||||||
Gain on divestitures and sales of assets | 0.2 | 27.6 | |||||||||
Deferred income taxes | 59.8 | 43.3 | |||||||||
Excess tax benefits from stock-based compensation | (5.0 | ) | - | ||||||||
Other items, net | (17.9 | ) | (6.5 | ) | |||||||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | |||||||||||
Accounts receivable, net | (133.8 | ) | (155.1 | ) | |||||||
Inventories, net | (34.0 | ) | (17.6 | ) | |||||||
Accounts payable | 12.4 | 22.2 | |||||||||
Other assets and liabilities, net | (23.5 | ) | (10.6 | ) | |||||||
Net cash provided by operating activities | 414.1 | 319.6 | |||||||||
Investing activities: | |||||||||||
Additions to property, plant and equipment | (285.5 | ) | (212.4 | ) | |||||||
Acquisitions, net | (178.7 | ) | (10.8 | ) | |||||||
Cash received in acquisition | 4.3 | - | |||||||||
Proceeds from divestitures and sales of assets | 5.2 | 422.0 | |||||||||
Repayments from affiliate | - | 1.8 | |||||||||
Payment of railcar construction advances | (37.4 | ) | (25.3 | ) | |||||||
Reimbursement of railcar construction advances | 37.4 | 25.2 | |||||||||
Net cash (used for) provided by investing activities | (454.7 | ) | 200.5 | ||||||||
Financing activities: | |||||||||||
Borrowings of long-term debt | 360.0 | 230.0 | |||||||||
Repayments of long-term debt | (168.3 | ) | (111.4 | ) | |||||||
Debt issue costs | (0.2 | ) | - | ||||||||
Payments on capital leases | (2.5 | ) | (5.8 | ) | |||||||
Change in bank overdraft | (10.2 | ) | (0.2 | ) | |||||||
Repurchases of common stock | (190.0 | ) | (257.7 | ) | |||||||
Dividends paid | (78.3 | ) | (81.2 | ) | |||||||
Excess tax benefits from stock-based compensation | 5.0 | - | |||||||||
Issuances of common stock | 17.4 | 33.9 | |||||||||
Net cash used for financing activities | (67.1 | ) | (192.4 | ) | |||||||
Net (decrease) increase in cash and cash equivalents | (107.7 | ) | 327.7 | ||||||||
Cash and cash equivalents, beginning of period | 168.4 | 108.7 | |||||||||
Cash and cash equivalents, end of period | $ | 60.7 | $ | 436.4 |
|
||||||||||||||||||
Unaudited Operational Highlights | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
|
|
|||||||||||||||||
Volume | Pricing | Volume | Pricing | |||||||||||||||
Volume/Pricing Variance (1) | ||||||||||||||||||
Heritage Aggregates Product Line: (2) | ||||||||||||||||||
|
(0.7 | %) | 4.7 | % | 7.0 | % | 4.6 | % | ||||||||||
|
(5.5 | %) | 7.4 | % | 0.2 | % | 7.0 | % | ||||||||||
|
(10.9 | %) | 13.7 | % | (4.7 | %) | 11.9 | % | ||||||||||
Heritage Aggregates Operations | (5.6 | %) | 8.6 | % | 1.0 | % | 8.0 | % | ||||||||||
Aggregates Product Line (3) | (4.7 | %) | 8.5 | % | 1.8 | % | 7.9 | % | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
|
|
|||||||||||||||||
Shipments (tons in thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||||||||
Heritage Aggregates Product Line: (2) | ||||||||||||||||||
|
21,799 | 21,958 | 54,809 | 51,212 | ||||||||||||||
|
5,109 | 5,405 | 14,802 | 14,769 | ||||||||||||||
|
17,901 | 20,096 | 49,878 | 52,316 | ||||||||||||||
Heritage Aggregates Operations | 44,809 | 47,459 | 119,489 | 118,297 | ||||||||||||||
Acquisitions | 430 | - | 967 | - | ||||||||||||||
Aggregates Product Line (3) | 45,239 | 47,459 | 120,456 | 118,297 | ||||||||||||||
(1) Volume/pricing variances reflect the percentage increase (decrease) from the comparable period in the prior year. | ||||||||||||||||||
(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. | ||||||||||||||||||
(3) Aggregates Product Line includes acquisitions from the date of acquisition and divestitures through the date of disposal. | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
|
|
|||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||
Heritage (in thousands) | ||||||||||||||||||
Aggregates tons - external customers | 41,588 | 44,422 | 111,748 | 111,204 | ||||||||||||||
Internal aggregates tons used in other product lines | 3,221 | 3,037 | 7,741 | 7,093 | ||||||||||||||
Total aggregates tons | 44,809 | 47,459 | 119,489 | 118,297 | ||||||||||||||
Asphalt tons - external customers | 378 | 473 | 697 | 1,042 | ||||||||||||||
Internal asphalt tons used in road paving business | 755 | 783 | 1,289 | 1,296 | ||||||||||||||
Total asphalt tons | 1,133 | 1,256 | 1,986 | 2,338 | ||||||||||||||
|
2,188 | 2,111 | 5,893 | 5,088 | ||||||||||||||
Cement tons - external customers | 574 | 1,081 | 1,837 | 3,100 | ||||||||||||||
Internal cement tons used in other product lines | 331 | 256 | 879 | 657 | ||||||||||||||
|
905 | 1,337 | 2,716 | 3,757 | ||||||||||||||
Acquisitions (in thousands) | ||||||||||||||||||
Aggregates tons - external customers | 340 | - | 791 | - | ||||||||||||||
Internal aggregates tons used in other product lines | 90 | - | 176 | - | ||||||||||||||
Total aggregates tons | 430 | - | 967 | - | ||||||||||||||
Asphalt tons - external customers | 34 | - | 58 | - | ||||||||||||||
Internal asphalt tons used in road paving business | 193 | - | 308 | - | ||||||||||||||
Total asphalt tons | 227 | - | 366 | - | ||||||||||||||
|
298 | - | 376 | - | ||||||||||||||
Average unit sales price by product line (including internal sales): | ||||||||||||||||||
Heritage: | ||||||||||||||||||
Aggregates (per ton) | $ | 12.77 | $ | 11.76 | $ | 12.85 | $ | 11.90 | ||||||||||
Asphalt (per ton) | $ | 39.18 | $ | 43.00 | $ | 38.71 | $ | 42.80 | ||||||||||
|
$ | 105.04 | $ | 98.15 | $ | 104.25 | $ | 94.27 | ||||||||||
Cement (per ton) | $ | 103.08 | $ | 99.95 | $ | 101.37 | $ | 97.48 | ||||||||||
Acquisitions: | ||||||||||||||||||
Aggregates (per ton) | $ | 10.86 | $ | - | $ | 10.85 | $ | - | ||||||||||
Asphalt (per ton) | $ | 44.18 | $ | - | $ | 44.03 | $ | - | ||||||||||
|
$ | 97.67 | $ | - | $ | 101.01 | $ | - |
|
|||||||||||||||||
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 and operating margin for the three and nine months ended
|
|||||||||||||||||
Consolidated Gross Margin in Accordance with Generally Accepted Accounting Principles | Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Gross profit | $ | 292.6 | $ | 262.5 | $ | 683.9 | $ | 536.9 | |||||||||
Total revenues | $ | 1,103.9 | $ | 1,082.2 | $ | 2,869.9 | $ | 2,695.0 | |||||||||
Gross margin | 26.5 | % | 24.3 | % | 23.8 | % | 19.9 | % | |||||||||
Consolidated Gross Margin Excluding Freight and Delivery Revenues | Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Gross profit | $ | 292.6 | $ | 262.5 | $ | 683.9 | $ | 536.9 | |||||||||
Total revenues | $ | 1,103.9 | $ | 1,082.2 | $ | 2,869.9 | $ | 2,695.0 | |||||||||
Less: |
(65.6 | ) | (77.0 | ) | (182.2 | ) | (207.7 | ) | |||||||||
Net sales | $ | 1,038.3 | $ | 1,005.2 | $ | 2,687.7 | $ | 2,487.3 | |||||||||
Gross margin excluding freight and delivery revenues | 28.2 | % | 26.1 | % | 25.4 | % | 21.6 | % | |||||||||
Consolidated Operating Margin in Accordance with Generally Accepted Accounting Principles | Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Earnings from operations | $ | 240.4 | $ | 179.5 | $ | 511.9 | $ | 342.1 | |||||||||
Total revenues | $ | 1,103.9 | $ | 1,082.2 | $ | 2,869.9 | $ | 2,695.0 | |||||||||
Operating margin | 21.8 | % | 16.6 | % | 17.8 | % | 12.7 | % | |||||||||
Consolidated Operating Margin Excluding Freight and Delivery Revenues | Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Earnings from operations | $ | 240.4 | $ | 179.5 | $ | 511.9 | $ | 342.1 | |||||||||
Total revenues | $ | 1,103.9 | $ | 1,082.2 | $ | 2,869.9 | $ | 2,695.0 | |||||||||
Less: |
(65.6 | ) | (77.0 | ) | (182.2 | ) | (207.7 | ) | |||||||||
Net sales | $ | 1,038.3 | $ | 1,005.2 | $ | 2,687.7 | $ | 2,487.3 | |||||||||
Operating margin excluding freight and delivery revenues | 23.2 | % | 17.9 | % | 19.0 | % | 13.8 | % | |||||||||
Aggregates Business Gross Margin in Accordance with Generally Accepted Accounting Principles | Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Gross profit | $ | 243.3 | $ | 211.8 | $ | 538.8 | $ | 405.0 | |||||||||
Total revenues | $ | 976.2 | $ | 903.9 | $ | 2,478.3 | $ | 2,180.4 | |||||||||
Gross margin | 24.9 | % | 23.4 | % | 21.7 | % | 18.6 | % | |||||||||
Aggregates Business Gross Margin Excluding Freight and Delivery Revenues | Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Gross profit | $ | 243.3 | $ | 211.8 | $ | 538.8 | $ | 405.0 | |||||||||
Total revenues | $ | 976.2 | $ | 903.9 | $ | 2,478.3 | $ | 2,180.4 | |||||||||
Less: |
(58.2 | ) | (66.5 | ) | (158.9 | ) | (177.1 | ) | |||||||||
Net sales | $ | 918.0 | $ | 837.4 | $ | 2,319.4 | $ | 2,003.3 | |||||||||
Gross margin excluding freight and delivery revenues | 26.5 | % | 25.3 | % | 23.2 | % | 20.2 | % | |||||||||
Aggregates Product Line Gross Margin in Accordance with Generally Accepted Accounting Principles | Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Gross profit | $ | 173.0 | $ | 166.1 | $ | 418.5 | $ | 344.9 | |||||||||
Total revenues | $ | 599.2 | $ | 593.5 | $ | 1,621.2 | $ | 1,513.5 | |||||||||
Gross margin | 28.9 | % | 28.0 | % | 25.8 | % | 22.8 | % | |||||||||
Aggregates Product Line Gross Margin Excluding Freight and Delivery Revenues | Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Gross profit | $ | 173.0 | $ | 166.1 | $ | 418.5 | $ | 344.9 | |||||||||
Total revenues | $ | 599.2 | $ | 593.5 | $ | 1,621.2 | $ | 1,513.5 | |||||||||
Less: |
(56.5 | ) | (63.5 | ) | (155.7 | ) | (169.7 | ) | |||||||||
Net sales | $ | 542.7 | $ | 530.0 | $ | 1,465.5 | $ | 1,343.8 | |||||||||
Gross margin excluding freight and delivery revenues | 31.9 | % | 31.4 | % | 28.6 | % | 25.7 | % |
|
|||||||||||||||||||||
Non-GAAP Financial Measures (continued) | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Ready Mixed Concrete Product Line Gross Margin in Accordance with Generally Accepted Accounting Principles |
Three Months Ended | Nine Months Ended | |||||||||||||||||||
|
|
|
|||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 39.9 | $ | 23.6 | $ | 83.2 | $ | 34.9 | |||||||||||||
Total revenues | $ | 264.0 | $ | 210.1 | $ | 666.4 | $ | 487.9 | |||||||||||||
Gross margin | 15.1 | % | 11.2 | % | 12.5 | % | 7.2 | % | |||||||||||||
Ready Mixed Concrete Product Line Gross Margin Excluding Freight and Delivery Revenues | Three Months Ended | Nine Months Ended | |||||||||||||||||||
|
|
||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 39.9 | $ | 23.6 | $ | 83.2 | $ | 34.9 | |||||||||||||
Total revenues | $ | 264.0 | $ | 210.1 | $ | 666.4 | $ | 487.9 | |||||||||||||
Less: |
(0.3 | ) | (0.5 | ) | (1.0 | ) | (1.0 | ) | |||||||||||||
Net sales | $ | 263.7 | $ | 209.6 | $ | 665.4 | $ | 486.9 | |||||||||||||
Gross margin excluding freight and delivery revenues | 15.1 | % | 11.3 | % | 12.5 | % | 7.2 | % | |||||||||||||
Heritage Ready Mixed Concrete Product Line Gross Margin in Accordance with Generally Accepted Accounting Principles |
Three Months Ended | Nine Months Ended | |||||||||||||||||||
|
September 30, | September 30, | |||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 36.1 | $ | 23.6 | $ | 78.9 | $ | 34.9 | |||||||||||||
Total revenues | $ | 234.7 | $ | 210.1 | $ | 628.0 | $ | 487.9 | |||||||||||||
Gross margin | 15.4 | % | 11.2 | % | 12.6 | % | 7.2 | % | |||||||||||||
Heritage Ready Mixed Concrete Product Line Gross Margin Excluding
|
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 36.1 | $ | 23.6 | $ | 78.9 | $ | 34.9 | |||||||||||||
Total revenues | $ | 234.7 | $ | 210.1 | $ | 628.0 | $ | 487.9 | |||||||||||||
Less: |
(0.3 | ) | (0.5 | ) | (1.0 | ) | (1.0 | ) | |||||||||||||
Net sales | $ | 234.4 | $ | 209.6 | $ | 627.0 | $ | 486.9 | |||||||||||||
Gross margin excluding freight and delivery revenues | 15.4 | % | 11.3 | % | 12.6 | % | 7.2 | % | |||||||||||||
Aggregates-Related Downstream Operations Gross Margin in Accordance with Generally Accepted Accounting Principles |
Three Months Ended | Nine Months Ended | |||||||||||||||||||
|
September 30, | September 30, | |||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 70.3 | $ | 45.7 | $ | 120.3 | $ | 60.1 | |||||||||||||
Total revenues | $ | 377.0 | $ | 310.4 | $ | 857.1 | $ | 666.9 | |||||||||||||
Gross margin | 18.6 | % | 14.7 | % | 14.0 | % | 9.0 | % | |||||||||||||
Aggregates-Related Downstream Operations Gross Margin Excluding
|
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 70.3 | $ | 45.7 | $ | 120.3 | $ | 60.1 | |||||||||||||
Total revenues | $ | 377.0 | $ | 310.4 | $ | 857.1 | $ | 666.9 | |||||||||||||
Less: |
(1.7 | ) | (3.0 | ) | (3.2 | ) | (7.4 | ) | |||||||||||||
Net sales | $ | 375.3 | $ | 307.4 | $ | 853.9 | $ | 659.5 | |||||||||||||
Gross margin excluding freight and delivery revenues | 18.7 | % | 14.8 | % | 14.1 | % | 9.1 | % | |||||||||||||
Mid-America Group Gross Margin in Accordance with Generally Accepted Accounting Principles | Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 103.6 | $ | 97.4 | $ | 223.6 | $ | 184.7 | |||||||||||||
Total revenues | $ | 297.3 | $ | 289.7 | $ | 762.3 | $ | 688.1 | |||||||||||||
Gross margin | 34.8 | % | 33.6 | % | 29.3 | % | 26.8 | % | |||||||||||||
Mid-America Gross Margin Excluding Freight and Delivery Revenues | Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 103.6 | $ | 97.4 | $ | 223.6 | $ | 184.7 | |||||||||||||
Total revenues | $ | 297.3 | $ | 289.7 | $ | 762.3 | $ | 688.1 | |||||||||||||
Less: |
(21.5 | ) | (24.1 | ) | (54.1 | ) | (55.4 | ) | |||||||||||||
Net sales | $ | 275.8 | $ | 265.6 | $ | 708.2 | $ | 632.7 | |||||||||||||
Gross margin excluding freight and delivery revenues | 37.6 | % | 36.7 | % | 31.6 | % | 29.2 | % |
|
|||||||||||||||||||||
Non-GAAP Financial Measures (continued) | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Southeast Group Gross Margin in Accordance with Generally Accepted Accounting Principles | Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 15.9 | $ | 11.5 | $ | 41.8 | $ | 24.1 | |||||||||||||
Total revenues | $ | 83.8 | $ | 83.0 | $ | 243.1 | $ | 229.1 | |||||||||||||
Gross margin | 19.0 | % | 13.9 | % | 17.2 | % | 10.5 | % | |||||||||||||
Southeast Gross Margin Excluding Freight and Delivery Revenues | Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 15.9 | $ | 11.5 | $ | 41.8 | $ | 24.1 | |||||||||||||
Total revenues | $ | 83.8 | $ | 83.0 | $ | 243.1 | $ | 229.1 | |||||||||||||
Less: |
(3.8 | ) | (4.7 | ) | (13.1 | ) | (14.6 | ) | |||||||||||||
Net sales | $ | 80.0 | $ | 78.3 | $ | 230.0 | $ | 214.5 | |||||||||||||
Gross margin excluding freight and delivery revenues | 19.9 | % | 14.6 | % | 18.2 | % | 11.2 | % | |||||||||||||
Magnesia Specialties Business Gross Margin in Accordance with Generally Accepted Accounting Principles | Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 22.8 | $ | 19.4 | $ | 67.5 | $ | 60.8 | |||||||||||||
Total revenues | $ | 65.1 | $ | 62.2 | $ | 192.9 | $ | 190.5 | |||||||||||||
Gross margin | 35.0 | % | 31.2 | % | 35.0 | % | 31.9 | % | |||||||||||||
Magnesia Specialties Business Gross Margin Excluding Freight and Delivery Revenues | Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 22.8 | $ | 19.4 | $ | 67.5 | $ | 60.8 | |||||||||||||
Total revenues | $ | 65.1 | $ | 62.2 | $ | 192.9 | $ | 190.5 | |||||||||||||
Less: |
(4.9 | ) | (4.9 | ) | (14.3 | ) | (14.0 | ) | |||||||||||||
Net sales | $ | 60.2 | $ | 57.3 | $ | 178.6 | $ | 176.5 | |||||||||||||
Gross margin excluding freight and delivery revenues | 37.9 | % | 33.9 | % | 37.8 | % | 34.4 | % | |||||||||||||
Cement Business Gross Margin in Accordance with Generally Accepted Accounting Principles | Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 29.7 | $ | 38.2 | $ | 86.2 | $ | 87.6 | |||||||||||||
Total revenues | $ | 62.6 | $ | 116.1 | $ | 198.7 | $ | 324.1 | |||||||||||||
Gross margin | 47.4 | % | 32.9 | % | 43.4 | % | 27.0 | % | |||||||||||||
Cement Business Gross Margin Excluding Freight and Delivery Revenues | Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 29.7 | $ | 38.2 | $ | 86.2 | $ | 87.6 | |||||||||||||
Total revenues | $ | 62.6 | $ | 116.1 | $ | 198.7 | $ | 324.1 | |||||||||||||
Less: |
(2.5 | ) | (5.6 | ) | (9.0 | ) | (16.6 | ) | |||||||||||||
Net sales | $ | 60.1 | $ | 110.5 | $ | 189.7 | $ | 307.5 | |||||||||||||
Gross margin excluding freight and delivery revenues | 49.5 | % | 34.6 | % | 45.4 | % | 28.5 | % | |||||||||||||
Cement Business, Excluding California Business, Gross Margin in Accordance with Generally Accepted Accounting Principles |
Three Months Ended | Nine Months Ended | |||||||||||||||||||
|
September 30, | September 30, | |||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 29.7 | $ | 34.9 | $ | 86.2 | $ | 85.0 | |||||||||||||
Total revenues | $ | 62.6 | $ | 84.3 | $ | 198.7 | $ | 222.5 | |||||||||||||
Gross margin | 47.4 | % | 41.4 | % | 43.4 | % | 38.2 | % | |||||||||||||
Cement Business, Excluding California Business, Gross Margin Excluding Freight and Delivery Revenues | Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Gross profit | $ | 29.7 | $ | 34.9 | $ | 86.2 | $ | 85.0 | |||||||||||||
Total revenues | $ | 62.6 | $ | 84.3 | $ | 198.7 | $ | 222.5 | |||||||||||||
Less: |
(2.5 | ) | (4.6 | ) | (9.0 | ) | (13.1 | ) | |||||||||||||
Net sales | $ | 60.1 | $ | 79.7 | $ | 189.7 | $ | 209.4 | |||||||||||||
Gross margin excluding freight and delivery revenues | 49.5 | % | 43.8 | % | 45.4 | % | 40.6 | % |
|
||||||||||||||||
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, term loan 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 September 30, 2016, 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-12 months at September 30, 2016. For supporting calculations, refer to Company's website at www.martinmarietta.com. |
||||||||||||||||
Twelve Month Period | ||||||||||||||||
October 1, 2015 to | ||||||||||||||||
September 30, 2016 | ||||||||||||||||
Earnings from continuing operations attributable to |
$ 409.7 | |||||||||||||||
Add back: | ||||||||||||||||
Interest expense | 79.8 | |||||||||||||||
Income tax expense | 183.2 | |||||||||||||||
Depreciation, depletion and amortization expense | 274.7 | |||||||||||||||
Stock-based compensation expense | 20.0 | |||||||||||||||
Deduct: | ||||||||||||||||
Interest income | (0.5 | ) | ||||||||||||||
Nonrecurring gains on divestitures and acquisition-related expenses, net | (18.3 | ) | ||||||||||||||
Consolidated EBITDA, as defined | $ 948.6 | |||||||||||||||
Consolidated Debt, including debt for which the Company is a co-borrower, at September 30, 2016 | $ 1,788.7 | |||||||||||||||
Consolidated Debt-to-Consolidated EBITDA, as defined, at September 30, 2016, for the trailing-twelve month EBITDA |
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 and nine months ended September 30, 2016 and 2015. |
||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Consolidated Earnings Before Interest, Income Taxes, Depreciation, Depletion and Amortization (EBITDA) | $ | 322.8 | $ | 248.2 | $ | 741.9 | $ | 546.3 | ||||||||
A Reconciliation of Net Earnings (Loss) Attributable to |
||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net Earnings Attributable to |
$ | 159.5 | $ | 117.5 | $ | 326.5 | $ | 205.6 | ||||||||
Add back: | ||||||||||||||||
Interest Expense | 20.6 | 18.9 | 60.9 | 57.4 | ||||||||||||
Taxes on Income | 70.9 | 47.5 | 144.0 | 85.6 | ||||||||||||
Depreciation, Depletion and Amortization Expense | 71.8 | 64.3 | 210.5 | 197.7 | ||||||||||||
Consolidated EBITDA | $ | 322.8 | $ | 248.2 | $ | 741.9 | $ | 546.3 | ||||||||
|
$ | 1,038.3 | $ | 1,005.2 | $ | 2,687.7 | $ | 2,487.3 | ||||||||
EBITDA margin as percentage of net sales | 31.1 | % | 24.7 | % | 27.6 | % | 22.0 | % | ||||||||
Incremental consolidated gross margin (excluding freight and delivery revenues) is a non-GAAP measure. The Company presents this metric to enhance analysts' and investors' understanding of the impact of increased net sales on profitability. Due to the significant amount of fixed costs, gross margin (excluding freight and delivery revenues) typically increases at a disproportionate rate in periods of increased shipments. The following shows the calculation of incremental consolidated gross margin (excluding freight and delivery revenues) for the quarter ended September 30, 2016: | ||||||||||||||||
Consolidated net sales for the quarter ended September 30, 2016 | $ | 1,038.3 | ||||||||||||||
Consolidated net sales for the quarter ended September 30, 2015 | 1,005.2 | |||||||||||||||
Incremental net sales | $ | 33.1 | ||||||||||||||
Consolidated gross profit for the quarter ended September 30, 2016 | $ | 292.6 | ||||||||||||||
Consolidated gross profit for the quarter ended September 30, 2015 | 262.5 | |||||||||||||||
Incremental gross profit | $ | 30.1 | ||||||||||||||
Incremental consolidated gross margin (excluding freight and delivery revenues) for the quarter ended September 30, 2016 | 91 | % | ||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20161101005888/en/
Executive Vice President and Chief Financial
Officer
www.martinmarietta.com
or
Investor
Contact:
Director,
Investor Relations
Elisabeth.eisleben@martinmarietta.com
Source:
News Provided by Acquire Media