Martin Marietta Materials, Inc. Announces Second Quarter Results
Heritage Aggregates Pricing Up 2.6%; Specialty Products Posts Record Quarterly Net Sales and Earnings from Operations
NOTABLE ITEMS (ALL COMPARISONS, UNLESS NOTED, ARE WITH THE PRIOR-YEAR QUARTER)
-
Earnings per diluted share of
$0.78 compared with$1.18 -
Consolidated net sales of
$426.7 million compared with$442.8 million - Heritage aggregates product line pricing up 2.6%
- Heritage aggregates product line volume down 9.3%
- Heritage aggregates product line direct production costs down 2.5%, despite a 13% increase in energy costs
-
Specialty Products record quarterly net sales of
$49.6 million and earnings from operations of$19 .3 million with a 380-basis-point improvement in operating margin (excluding freight and delivery revenues) -
Consolidated selling, general and administrative expenses down
$1.9 million , or 20 basis points as a percentage of net sales -
Consolidated earnings from operations of
$63.0 million compared with$90.7 million -
Acquired an aggregates, asphalt and ready mixed concrete business in
San Antonio
MANAGEMENT COMMENTARY (ALL COMPARISONS, UNLESS NOTED, ARE WITH THE PRIOR-YEAR QUARTER)
Nye continued, "Our aggregates shipments were hindered by an overall
slowing of
"Shipments to the infrastructure end-use market, accounting for more
than half of our Aggregates business, were down 11% for the quarter. In
addition to weather disruptions, the lack of a long-term surface
transportation bill and the winding down of the American Recovery and
Reinvestment Act ("ARRA"), or Stimulus, projects in certain states
continue to negatively affect investment in transportation construction.
While the investment for the nation as a whole has declined,
year-to-date contract lettings in certain states, including
"Although we continue to expect strong volumes to the energy sector for the full year, shipments to this industry declined from the prior-year quarter, which led to an overall 9% reduction in nonresidential shipments. Our ChemRock/Rail end-use market declined 3% and our residential end-use market decreased 6%.
"Supported by the volume stability achieved in 2010, average selling
prices for the aggregates product line grew in each of our reportable
groups, led by a 6.8% increase for the
"Our Specialty Products business enjoyed strong demand in both the
chemicals and dolomitic lime product lines and established new quarterly
records for net sales and earnings from operations. Net sales of
"We continue to see the benefit of cost-savings initiatives and prudent
capital investment. Direct production costs in our heritage aggregates
product line were down 2.5%, despite a 13% increase in noncontrollable
energy costs. Diesel fuel remains the single largest component of our
energy costs. For the quarter, our diesel costs averaged
"We reduced our consolidated selling, general and administrative
expenses
LIQUIDITY AND CAPITAL RESOURCES
"Among our stated strategic aims is to identify geographic areas with
long-term, attractive demographics and to deploy our capital when we can
establish or maintain leading market positions in a business that we
understand and operate exceptionally well. In complete alignment with
that strategy, during the second quarter, we acquired a business
consisting of six aggregate facilities, as well as several asphalt and
ready mixed concrete operations in western
"In addition, during the six months ended
"Cash from operating activities for the six months ended
"On
2011 OUTLOOK
"A variety of factors outside of our direct control will continue to
affect our performance. One consideration will be the rate at which
states spend available Stimulus funds for infrastructure projects, which
is often dependent on federal funding. In addition,
"Another factor complicating our outlook is the pace of residential construction activity. Although national forecasts earlier in the year predicted stabilization and improvements in the overall housing market, the United States Census reported the seasonally adjusted value of residential construction put in place declined 6.9% during the first five months of 2011. Economists are now divided over the timing of recovery in residential construction; however, we continue to believe that when recovery in this sector begins, we can expect a notable volume impact.
"Given this uncertainty, our 2011 outlook assumes there will be additional continuing resolutions to maintain current federal funding levels, but the magnitude of the levels is uncertain. We also expect states spending on infrastructure should remain relatively constant and at least 25% of ARRA infrastructure funds will be spent this year. However, the uncertainty created by the lack of a long-term highway bill is affecting the nature and timing of projects with a shift towards maintenance projects that tend to be shorter in duration. This shift in project mix, coupled with the uncertainty in long-term funding, creates the possibility that we may not recover first-half shipments delayed due to weather during the remainder of the year. We expect our infrastructure end-use market to be down in the mid-single digit range. We anticipate a modest volume recovery in the commercial component of our nonresidential end-use market. Considering the notable aggregates shipments to the energy sector in 2010 and the impact weather has had on these projects through the first half of 2011, we expect the rate of growth in the heavy industrial component of our nonresidential end-use market to moderate in 2011. Natural gas prices, the timing of lease commitments for oil and natural gas companies and stable weather are significant factors for energy-sector activity in the second half of 2011. Overall, we expect nonresidential end-use shipments in 2011 to be flat to slightly up. We expect the rate of improvement in the residential end-use market to increase over 2010. Finally, our ChemRock/Rail shipments should be stable compared with 2010 shipments. Cumulatively, we expect aggregates volume for the full year to range from flat to a decrease of 3%.
"Rising energy costs have provided an impetus for certain mid-year price increases. For the full year, we expect an increase in aggregates pricing ranging from 2% to 4%. However, such increases may not be uniform throughout our enterprise.
"Aggregates production cost per ton in 2011 is expected to range from
flat to a slight decrease compared with 2010, despite rising energy
costs. The Specialty Products segment should contribute
"Offsetting those factors over which we have little control are those
items where we can and do control our own destiny: selling, general and
administrative expenses should be lower in 2011, primarily due to
reduced pension expense. Interest expense should be approximately
"Taken as a whole, we continue to feel good about our business and how we are managing it. We remain focused on creating shareholder value and on operating as a best-in-class company in terms of our assets, performance and people."
RISKS TO OUTLOOK
The 2011 estimated outlook includes management's assessment of the
likelihood of certain risk factors that will affect performance. The
most significant risk to 2011 performance will be, as previously noted,
Other risks related to the Corporation's future performance include, but
are not limited to: both price and volume and include a recurrence of
widespread decline in aggregates pricing; the discontinuance of the
federal gasoline tax or other revenue related to infrastructure
construction; a greater-than-expected decline in infrastructure
construction as a result of continued delays in traditional federal,
ARRA, state and/or local infrastructure projects and continued lack of
clarity regarding the timing and amount of the federal highway bill; a
decline in nonresidential construction; a slowdown in the residential
construction recovery; or some combination thereof. Further, increased
highway construction funding pressures resulting from either federal or
state issues can affect profitability. Currently, nearly all states have
general fund budget pressures driven by lower tax revenues. If these
pressures negatively affect transportation budgets more than in the
past, construction spending could be reduced.
The Corporation's principal business serves customers in construction aggregates-related 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 Corporation'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 prices, both directly and indirectly. Diesel and other fuels change production costs directly through consumption or indirectly in the increased cost of energy-related consumables, such as, steel, explosives, tires and conveyor belts. Fluctuating diesel pricing also affects transportation costs, primarily through fuel surcharges in the Corporation's long-haul distribution network.
Transportation in the Corporation's long-haul network, particularly
barge availability on the
Risks to the 2011 outlook include shipment declines as a result of economic events beyond the Corporation's control. In addition to the impact on nonresidential and residential construction, the Corporation is exposed to risk in its estimated outlook from credit markets and the availability of and interest cost related to its debt.
CONSOLIDATED FINANCIAL HIGHLIGHTS
Net sales for the quarter were
Net sales for the first six months of 2011 were
BUSINESS FINANCIAL HIGHLIGHTS
Net sales for the Aggregates business during the second quarter of 2011
were
Specialty Products' second-quarter net sales of
CONFERENCE CALL INFORMATION
The Company will host an online web simulcast of its second quarter 2011
earnings conference call later today (
For those investors without online web access, the conference call may also be accessed by calling (970) 315-0423, confirmation number 84273355.
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 historical or current facts. They may use words such as "anticipate," "expect," "should be," "believe," 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, the performance of
MARTIN MARIETTA MATERIALS, INC. | ||||||||||||||||||||
Unaudited Statements of Earnings | ||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||
Net sales | $ | 426.7 | $ | 442.8 | $ | 733.0 | $ | 738.3 | ||||||||||||
Freight and delivery revenues | 66.3 | 61.8 | 116.5 | 107.2 | ||||||||||||||||
Total revenues | 493.0 | 504.6 | 849.5 | 845.5 | ||||||||||||||||
Cost of sales | 330.2 | 325.1 | 615.4 | 601.0 | ||||||||||||||||
Freight and delivery costs | 66.3 | 61.8 | 116.5 | 107.2 | ||||||||||||||||
Total cost of revenues | 396.5 | 386.9 | 731.9 | 708.2 | ||||||||||||||||
Gross profit | 96.5 | 117.7 | 117.6 | 137.3 | ||||||||||||||||
Selling, general and administrative expenses | 31.7 | 33.6 | 60.9 | 67.1 | ||||||||||||||||
Other operating (income) and expenses, net | 1.8 | (6.6 | ) | (0.2 | ) | (7.6 | ) | |||||||||||||
Earnings from operations | 63.0 | 90.7 | 56.9 | 77.8 | ||||||||||||||||
Interest expense | 13.7 | 16.8 | 31.9 | 34.4 | ||||||||||||||||
Other nonoperating expenses, net | 0.3 | 1.4 | 0.1 | 0.8 | ||||||||||||||||
Earnings from continuing operations before taxes on income | 49.0 | 72.5 | 24.9 | 42.6 | ||||||||||||||||
Income tax expense | 13.1 | 17.5 | 6.7 | 12.5 | ||||||||||||||||
Earnings from continuing operations | 35.9 | 55.0 | 18.2 | 30.1 | ||||||||||||||||
Gain on discontinued operations, net of related tax expense of $0.0, $0.0, $0.0 and $0.1, respectively |
- | - | - | 0.1 | ||||||||||||||||
Consolidated net earnings | 35.9 | 55.0 | 18.2 | 30.2 | ||||||||||||||||
Less: Net earnings (loss) attributable to noncontrolling interests | 0.1 | 0.6 | (0.2 | ) | - | |||||||||||||||
Net earnings attributable to Martin Marietta Materials, Inc. | $ | 35.8 | $ | 54.4 | $ | 18.4 | $ | 30.2 | ||||||||||||
Net earnings per common share: | ||||||||||||||||||||
Basic from continuing operations attributable to common shareholders | $ | 0.78 | $ | 1.18 | $ | 0.40 | $ | 0.66 | ||||||||||||
Discontinued operations attributable to common shareholders | - | - | - | - | ||||||||||||||||
$ | 0.78 | $ | 1.18 | $ | 0.40 | $ | 0.66 | |||||||||||||
Diluted from continuing operations attributable to common shareholders | $ | 0.78 | $ | 1.18 | $ | 0.39 | $ | 0.65 | ||||||||||||
Discontinued operations attributable to common shareholders | - | - | - | - | ||||||||||||||||
$ | 0.78 | $ | 1.18 | $ | 0.39 | $ | 0.65 | |||||||||||||
Dividends per common share | $ | 0.40 | $ | 0.40 | $ | 0.80 | $ | 0.80 | ||||||||||||
Average number of common shares outstanding: | ||||||||||||||||||||
Basic | 45.6 | 45.5 | 45.6 | 45.4 | ||||||||||||||||
Diluted | 45.8 | 45.7 | 45.8 | 45.6 |
MARTIN MARIETTA MATERIALS, INC. | |||||||||||||||||||||
Unaudited Financial Highlights | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||||||||
Net sales: | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
Mideast Group | $ | 124.3 | $ | 131.6 | $ | 209.7 | $ | 214.9 | |||||||||||||
Southeast Group | 82.0 | 92.1 | 148.0 | 160.2 | |||||||||||||||||
West Group | 170.8 | 171.2 | 276.5 | 273.6 | |||||||||||||||||
Total Aggregates Business | 377.1 | 394.9 | 634.2 | 648.7 | |||||||||||||||||
Specialty Products | 49.6 | 47.9 | 98.8 | 89.6 | |||||||||||||||||
Total | $ | 426.7 | $ | 442.8 | $ | 733.0 | $ | 738.3 | |||||||||||||
Gross profit (loss): | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
Mideast Group | $ | 37.9 | $ | 47.6 | $ | 51.1 | $ | 59.5 | |||||||||||||
Southeast Group | 0.2 | 14.2 | (4.8 | ) | 11.3 | ||||||||||||||||
West Group | 36.1 | 37.5 | 33.7 | 34.5 | |||||||||||||||||
Total Aggregates Business | 74.2 | 99.3 | 80.0 | 105.3 | |||||||||||||||||
Specialty Products | 21.4 | 19.6 | 39.0 | 33.6 | |||||||||||||||||
Corporate | 0.9 | (1.2 | ) | (1.4 | ) | (1.6 | ) | ||||||||||||||
Total | $ | 96.5 | $ | 117.7 | $ | 117.6 | $ | 137.3 | |||||||||||||
Selling, general and administrative expenses: | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
Mideast Group | $ | 10.6 | $ | 10.4 | $ | 21.0 | $ | 20.8 | |||||||||||||
Southeast Group | 6.2 | 6.3 | 12.4 | 12.7 | |||||||||||||||||
West Group | 10.7 | 10.5 | 21.3 | 21.2 | |||||||||||||||||
Total Aggregates Business | 27.5 | 27.2 | 54.7 | 54.7 | |||||||||||||||||
Specialty Products | 2.2 | 2.7 | 4.7 | 5.6 | |||||||||||||||||
Corporate | 2.0 | 3.7 | 1.5 | 6.8 | |||||||||||||||||
Total | $ | 31.7 | $ | 33.6 | $ | 60.9 | $ | 67.1 | |||||||||||||
Earnings (Loss) from operations: | |||||||||||||||||||||
Aggregates Business: | |||||||||||||||||||||
Mideast Group | $ | 27.9 | $ | 39.5 | $ | 33.6 | $ | 41.6 | |||||||||||||
Southeast Group | (7.3 | ) | 7.5 | (17.1 | ) | (1.6 | ) | ||||||||||||||
West Group | 26.5 | 33.0 | 14.1 | 20.7 | |||||||||||||||||
Total Aggregates Business | 47.1 | 80.0 | 30.6 | 60.7 | |||||||||||||||||
Specialty Products | 19.3 | 16.8 | 34.4 | 28.0 | |||||||||||||||||
Corporate | (3.4 | ) | (6.1 | ) | (8.1 | ) | (10.9 | ) | |||||||||||||
Total | $ | 63.0 | $ | 90.7 | $ | 56.9 | $ | 77.8 | |||||||||||||
Depreciation | $ | 41.5 | $ | 43.4 | $ | 83.5 | $ | 86.9 | |||||||||||||
Depletion | 0.9 | 1.4 | 1.4 | 2.0 | |||||||||||||||||
Amortization | 0.8 | 0.7 | 1.6 | 1.6 | |||||||||||||||||
$ | 43.2 | $ | 45.5 | $ | 86.5 | $ | 90.5 |
MARTIN MARIETTA MATERIALS, INC. | ||||||||||||
Balance Sheet Data | ||||||||||||
(In millions) | ||||||||||||
June 30, | December 31, | June 30, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
(Unaudited) | (Audited) | (Unaudited) | ||||||||||
ASSETS | ||||||||||||
Cash and cash equivalents | $ | 26.1 | $ | 70.3 | $ | 32.1 | ||||||
Accounts receivable, net | 269.4 | 183.4 | 257.8 | |||||||||
Inventories, net | 336.4 | 331.9 | 319.8 | |||||||||
Other current assets | 113.7 | 110.6 | 98.8 | |||||||||
Property, plant and equipment, net | 1,697.8 | 1,687.8 | 1,694.4 | |||||||||
Intangible assets, net | 657.4 | 644.1 | 642.5 | |||||||||
Other noncurrent assets | 48.1 | 46.6 | 51.0 | |||||||||
Total assets | $ | 3,148.9 | $ | 3,074.7 | $ | 3,096.4 | ||||||
LIABILITIES AND EQUITY | ||||||||||||
Current maturities of long-term debt and short-term facilities | $ | 107.0 | $ | 248.7 | $ | 244.1 | ||||||
Other current liabilities | 155.9 | 136.8 | 170.5 | |||||||||
Long-term debt (excluding current maturities) | 979.0 | 782.0 | 811.9 | |||||||||
Other noncurrent liabilities | 456.4 | 438.9 | 453.1 | |||||||||
Total equity | 1,450.6 | 1,468.3 | 1,416.8 | |||||||||
Total liabilities and equity | $ | 3,148.9 | $ | 3,074.7 | $ | 3,096.4 |
MARTIN MARIETTA MATERIALS, INC. | ||||||||||||
Unaudited Statements of Cash Flows | ||||||||||||
(In millions) | ||||||||||||
Six Months Ended | ||||||||||||
June 30, | ||||||||||||
2011 | 2010 | |||||||||||
Operating activities: | ||||||||||||
Consolidated net earnings | $ | 18.2 | $ | 30.2 | ||||||||
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: | ||||||||||||
Depreciation, depletion and amortization | 86.5 | 90.5 | ||||||||||
Stock-based compensation expense | 6.4 | 8.4 | ||||||||||
Excess tax benefits from stock-based compensation transactions | - | (1.5 | ) | |||||||||
Gains on divestitures and sales of assets | (3.4 | ) | (4.0 | ) | ||||||||
Deferred income taxes | 9.2 | 4.8 | ||||||||||
|
Other items, net | 1.0 | 1.0 | |||||||||
|
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | |||||||||||
Accounts receivable, net | (87.6 | ) | (94.9 | ) | ||||||||
Inventories, net | (3.1 | ) | 12.9 | |||||||||
Accounts payable | 25.1 | 25.8 | ||||||||||
Other assets and liabilities, net | 4.4 | 13.1 | ||||||||||
Net cash provided by operating activities | 56.7 | 86.3 | ||||||||||
Investing activities: | ||||||||||||
Additions to property, plant and equipment | (58.7 | ) | (68.6 | ) | ||||||||
Acquisitions, net | (49.9 | ) | (28.1 | ) | ||||||||
Proceeds from divestitures and sales of assets | 5.2 | 3.9 | ||||||||||
Net cash used for investing activities | (103.4 | ) | (92.8 | ) | ||||||||
Financing activities: | ||||||||||||
Borrowings of long-term debt | 460.0 | 125.0 | ||||||||||
Repayments of long-term debt and payments on capital lease obligations | (405.0 | ) | (318.9 | ) | ||||||||
Change in bank overdraft | (2.1 | ) | 1.7 | |||||||||
Dividends paid | (36.8 | ) | (36.8 | ) | ||||||||
Debt issue costs | (3.3 | ) | (0.1 | ) | ||||||||
Issuances of common stock | 1.1 | 2.6 | ||||||||||
Excess tax benefits from stock-based compensation transactions | - | 1.5 | ||||||||||
Purchase of subsidiary shares from noncontrolling interest | (10.4 | ) | - | |||||||||
Distributions to owners of noncontrolling interests | (1.0 | ) | - | |||||||||
Net cash provided by (used for) financing activities | 2.5 | (225.0 | ) | |||||||||
Net decrease in cash and cash equivalents | (44.2 | ) | (231.5 | ) | ||||||||
Cash and cash equivalents, beginning of period | 70.3 | 263.6 | ||||||||||
Cash and cash equivalents, end of period | $ | 26.1 | $ | 32.1 |
MARTIN MARIETTA MATERIALS, INC. | |||||||||||||||||
Unaudited Operational Highlights | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, 2011 | June 30, 2011 | ||||||||||||||||
Volume | Pricing | Volume | Pricing | ||||||||||||||
Volume/Pricing Variance (1) | |||||||||||||||||
Heritage Aggregates Product Line: (2) | |||||||||||||||||
Mideast Group | (8.1 | %) | 1.2 | % | (5.0 | %) | 1.2 | % | |||||||||
Southeast Group | (16.6 | %) | 6.8 | % | (13.7 | %) | 6.3 | % | |||||||||
West Group | (6.7 | %) | 2.3 | % | (3.1 | %) | 0.5 | % | |||||||||
Heritage Aggregates Operations | (9.3 | %) | 2.6 | % | (6.2 | %) | 1.8 | % | |||||||||
Aggregates Product Line (3) | (8.9 | %) | 2.4 | % | (5.8 | %) | 1.6 | % | |||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
Shipments (tons in thousands) | 2011 | 2010 | 2011 | 2010 | |||||||||||||
Heritage Aggregates Product Line: (2) | |||||||||||||||||
Mideast Group | 10,699 | 11,637 | 17,612 | 18,542 | |||||||||||||
Southeast Group | 6,853 | 8,219 | 12,381 | 14,341 | |||||||||||||
West Group | 16,398 | 17,582 | 27,149 | 28,028 | |||||||||||||
Heritage Aggregates Operations | 33,950 | 37,438 | 57,142 | 60,911 | |||||||||||||
Acquisitions | 155 | - | 229 | - | |||||||||||||
Divestitures (4) | 6 | 7 | 7 | 11 | |||||||||||||
Aggregates Product Line (3) |
34,111 | 37,445 | 57,378 | 60,922 | |||||||||||||
(1) Volume/pricing variances reflect the percentage increase (decrease) from the comparable period in the prior year. |
|||||||||||||||||
(2) Heritage Aggregates product line excludes volume and pricing data for acquisitions that have not been included in prior-year operations for the comparable period and divestitures. |
|||||||||||||||||
(3) Aggregates product line includes all acquisitions from the date of acquisition and divestitures through the date of disposal. |
|||||||||||||||||
(4) Divestitures include the tons related to divested aggregates product line operations up to the date of divestiture. |
MARTIN MARIETTA MATERIALS, INC. | ||||||||||||||||
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 and six months ended June 30, 2011, and 2010, 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 | Three Months Ended | Six Months Ended | ||||||||||||||
Accounting Principles | June 30, | June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Gross profit | $ | 96.5 | $ | 117.7 | $ | 117.6 | $ | 137.3 | ||||||||
Total revenues | $ | 493.0 | $ | 504.6 | $ | 849.5 | $ | 845.5 | ||||||||
Gross margin | 19.6 | % | 23.3 | % | 13.8 | % | 16.2 | % | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
Gross Margin Excluding Freight and Delivery Revenues | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Gross profit | $ | 96.5 | $ | 117.7 | $ | 117.6 | $ | 137.3 | ||||||||
Total revenues | $ | 493.0 | $ | 504.6 | $ | 849.5 | $ | 845.5 | ||||||||
Less: Freight and delivery revenues | (66.3 | ) | (61.8 | ) | (116.5 | ) | (107.2 | ) | ||||||||
Net sales | $ | 426.7 | $ | 442.8 | $ | 733.0 | $ | 738.3 | ||||||||
Gross margin excluding freight and delivery revenues | 22.6 | % | 26.6 | % | 16.0 | % | 18.6 | % | ||||||||
Operating Margin in Accordance with Generally Accepted | Three Months Ended | Six Months Ended | ||||||||||||||
Accounting Principles | June 30, | June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Earnings from operations | $ | 63.0 | $ | 90.7 | $ | 56.9 | $ | 77.8 | ||||||||
Total revenues | $ | 493.0 | $ | 504.6 | $ | 849.5 | $ | 845.5 | ||||||||
Operating margin | 12.8 | % | 18.0 | % | 6.7 | % | 9.2 | % | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
Operating Margin Excluding Freight and Delivery Revenues | June 30, | June 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Earnings from operations | $ | 63.0 | $ | 90.7 | $ | 56.9 | $ | 77.8 | ||||||||
Total revenues | $ | 493.0 | $ | 504.6 | $ | 849.5 | $ | 845.5 | ||||||||
Less: Freight and delivery revenues | (66.3 | ) | (61.8 | ) | (116.5 | ) | (107.2 | ) | ||||||||
Net sales | $ | 426.7 | $ | 442.8 | $ | 733.0 | $ | 738.3 | ||||||||
Operating margin excluding freight and delivery revenues | 14.8 | % | 20.5 | % | 7.8 | % | 10.5 | % |
MARTIN MARIETTA MATERIALS, INC. | ||||||||||||||||||||
Non-GAAP Financial Measures (continued) | ||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||
Earnings Before Interest, Income Taxes, Depreciation, Depletion and Amortization (EBITDA) (1) |
$ | 105.4 | $ | 133.8 | $ | 142.6 | $ | 166.8 | ||||||||||||
(1)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. |
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A reconciliation of Net Earnings Attributable to Martin Marietta Materials, Inc. to EBITDA is as follows: | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2011 |
2010 |
2011 |
2010 |
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Net Earnings Attributable to Martin Marietta Materials, Inc. | $ | 35.8 | $ | 54.4 | $ | 18.4 | $ | 30.2 | ||||||||||||
Add back: | ||||||||||||||||||||
Interest Expense | 13.7 | 16.8 | 31.9 | 34.4 | ||||||||||||||||
Income Tax Expense for Controlling Interests | 13.1 | 17.5 | 6.7 | 12.6 | ||||||||||||||||
Depreciation, Depletion and Amortization Expense | 42.8 | 45.1 | 85.6 | 89.6 | ||||||||||||||||
EBITDA | $ | 105.4 | $ | 133.8 | $ | 142.6 | $ | 166.8 | ||||||||||||
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, the Corporation's ratio of Consolidated Debt-to-Consolidated EBITDA as defined, for the trailing twelve months can not exceed 3.5 times as of the end of any fiscal quarter, 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 June 30, 2011. For supporting calculations, refer to Corporation's website at www.martinmarietta.com. |
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|
Twelve-Month Period |
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July 1, 2010 to |
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June 30, 2011 |
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Earnings from continuing operations attributable to Martin Marietta Materials, Inc. | $ | 85.2 | ||||||||||||||||||
Add back: | ||||||||||||||||||||
Interest expense | 65.9 | |||||||||||||||||||
Income tax expense | 23.3 | |||||||||||||||||||
Depreciation, depletion and amortization expense | 172.9 | |||||||||||||||||||
Stock-based compensation expense | 12.6 | |||||||||||||||||||
Deduct: | ||||||||||||||||||||
Interest income | (0.9 | ) | ||||||||||||||||||
Consolidated EBITDA, as defined | $ | 359.0 | ||||||||||||||||||
Consolidated Debt, including debt guaranteed by the Corporation, at June 30, 2011 | $ | 1,110.0 | ||||||||||||||||||
Less: Unrestricted cash and cash equivalents in excess of $50 at June 30, 2011 | - | |||||||||||||||||||
Consolidated Net Debt, as defined, at June 30, 2011 | $ | 1,110.0 | ||||||||||||||||||
Consolidated Debt-to-Consolidated EBITDA, as defined, at June 30, 2011 for the trailing twelve-month EBITDA |
3.09 x | |||||||||||||||||||
MLM-E
Executive
Vice President, Chief Financial Officer and Treasurer
919-783-4660
www.martinmarietta.com
Source:
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