Martin Marietta Materials, Inc. Announces Second-Quarter Results
Heritage Aggregates Business Operating Margin Expands 150 Basis Points Specialty Products Posts Record Second-Quarter Net Sales
NOTABLE ITEMS (ALL COMPARISONS, UNLESS NOTED, ARE WITH THE PRIOR-YEAR SECOND QUARTER)
-
Adjusted earnings per diluted share of
$0.92 , excluding a$0.12 per diluted share charge for business development expenses; including these charges, earnings per diluted share was$0.80 compared with$0.78 -
Consolidated net sales of
$491.2 million compared with$409.6 million - Heritage aggregates product line volume increased 2.8%
- Heritage aggregates product line pricing increased 2.4%
-
Specialty Products net sales of
$50.4 million and earnings from operations of$17 .5 million - Consolidated selling, general and administrative expenses ("SG&A") decreased 40 basis points as a percentage of net sales
-
Consolidated earnings from operations of
$68.5 million , excluding$9.2 million of business development costs, compared with$64.7 million
MANAGEMENT COMMENTARY (ALL COMPARISONS, UNLESS NOTED, ARE WITH THE PRIOR-YEAR SECOND QUARTER)
Nye continued, "For the quarter, heritage aggregates product line
shipments increased 2.8% over the prior-year period. This growth was led
by a 7.6% increase in our
"Notably, heritage aggregates product line shipments increased 8% in April and May over the prior-year two-month period. In that volume environment, we achieved an incremental gross margin (excluding freight and delivery revenues) consistent with our expectations. In June, however, shipments declined 5.5%, reflecting previously mentioned project delays, coupled with uncertainty in the current economic environment. As expected, this erratic volume pattern, together with planned inventory reduction, diluted the incremental gross margin gains from the first two months of the quarter. However, we are pleased with the 150-basis-point expansion of operating margin (excluding freight and delivery revenues) in our heritage aggregates business for the quarter.
"Heritage shipments in the infrastructure end-use market, which
represents more than half of our Aggregates business, increased 3% for
the quarter. We were gratified to see the Moving Ahead for Progress
in the 21st Century Act, or MAP-21, signed
into law earlier in the month. MAP-21 is a two-year federal surface
transportation bill intended to expedite project approvals and limit
spending for programs outside of core transportation needs. The bill
provides highway expenditures at current levels,
"Shipments to our heritage nonresidential end-use market increased 8%
over the prior-year quarter, with growth attributable to heavy
industrial activity, particularly in the energy sector. Our heritage
residential end-use market continues to recover from the depressed
levels experienced in recent years. For the quarter, heritage shipments
to this market rose 21%, reflecting the increase in national
year-to-date housing starts. Our heritage
"We continue to see positive construction trends in the
"Our heritage aggregates product line average selling price grew 2.4%
over the prior-year quarter. Our
"The Specialty Products business continues to experience strong demand
in both the chemicals and dolomitic lime product lines. For the quarter,
net sales of
"Planned inventory reductions in our heritage aggregates product line
drove a 1.3% increase in cost per ton during the quarter. Contrary to a
multi-quarter trend of increases, energy costs were essentially flat as
we paid an average of
"Consolidated SG&A as a percentage of net sales declined 40 basis
points. On an absolute basis, SG&A increased
LIQUIDITY AND CAPITAL RESOURCES
"Excluding the impact of business development expenses, cash provided by
operating activities for the six months ended
"At
2012 OUTLOOK
"With the challenges of 2011 and the first half of 2012 behind us, we
remain optimistic for our second half performance and our outlook for
2013. The passage of MAP-21, which is essentially a final three-month
continuing resolution through
"As such, we anticipate heritage aggregates product line shipments for the full year to increase 4% to 5% and pricing to increase 2% to 4%. A variety of factors beyond our direct control may exert pressure on our volumes and our forecasted pricing increase is not expected to be uniform across the company. Heritage aggregates product line direct production costs per ton are expected to be flat compared with 2011, in spite of our expectation to reduce production as part of controlling our inventory levels.
"As previously communicated, the platform acquisition of our
"Earnings for the Specialty Products segment should be approximately
"SG&A expenses, excluding the incremental expense related to the
acquired operations in
RISKS TO OUTLOOK
The full-year estimated outlook includes management's assessment of the
likelihood of certain risk factors that will affect performance. The
most significant risk to 2012 performance will be
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 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 Corporation's long-haul distribution network. The Specialty Products business is sensitive to changes in domestic steel capacity utilization and the absolute price and fluctuations in the cost of natural gas. However, due to recent technology developments allowing the harvesting of abundant natural gas supplies in the U.S., natural gas prices have stabilized.
Transportation in the Corporation's long-haul network, particularly rail
cars and locomotive power to move trains, affects our ability to
efficiently transport material into certain markets, most notably
Risks to the full-year 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 second quarter were
Net sales for the first six months of 2012 were
BUSINESS FINANCIAL HIGHLIGHTS
Net sales for the Aggregates business during the second quarter of 2012
were
Specialty Products' second-quarter net sales of
CONFERENCE CALL INFORMATION
The Company will host an online web simulcast of its second quarter 2012
earnings conference call later today (
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," "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, the performance of
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| Unaudited Statements of Earnings | |||||||||||||||||||||
| (In millions, except per share amounts) | |||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
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June 30, | ||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
| Net sales | $ | 491.2 | $ | 409.6 | $ | 841.8 | $ | 700.2 | |||||||||||||
| Freight and delivery revenues | 54.5 | 52.8 | 97.9 | 90.1 | |||||||||||||||||
| Total revenues | 545.7 | 462.4 | 939.7 | 790.3 | |||||||||||||||||
| Cost of sales | 389.1 | 312.1 | 715.9 | 580.0 | |||||||||||||||||
| Freight and delivery costs | 54.5 | 52.8 | 97.9 | 90.1 | |||||||||||||||||
| Total cost of revenues | 443.6 | 364.9 | 813.8 | 670.1 | |||||||||||||||||
| Gross profit | 102.1 | 97.5 | 125.9 | 120.2 | |||||||||||||||||
| Selling, general and administrative expenses | 35.3 | 31.0 | 68.3 | 59.6 | |||||||||||||||||
| Business development costs | 9.2 | 1.7 | 35.1 | 2.7 | |||||||||||||||||
| Other operating (income) and expenses, net | (1.7 | ) | 0.1 | (1.4 | ) | (2.4 | ) | ||||||||||||||
| Earnings from operations | 59.3 | 64.7 | 23.9 | 60.3 | |||||||||||||||||
| Interest expense | 13.3 | 13.7 | 26.7 | 31.9 | |||||||||||||||||
| Other nonoperating (income) and expenses, net | (0.1 | ) | 0.4 | (1.9 | ) | 0.1 | |||||||||||||||
| Earnings from (loss on) continuing operations before taxes on income | 46.1 | 50.6 | (0.9 | ) | 28.3 | ||||||||||||||||
| Income tax expense (benefit) | 8.6 | 13.8 | (1.3 | ) | 7.7 | ||||||||||||||||
| Earnings from continuing operations | 37.5 | 36.8 | 0.4 | 20.6 | |||||||||||||||||
|
Gain (loss) on discontinued operations, net of related tax expense
(benefit) of |
0.3 | (0.9 | ) | (0.3 | ) | (2.4 | ) | ||||||||||||||
| Consolidated net earnings | 37.8 | 35.9 | 0.1 | 18.2 | |||||||||||||||||
| Less: Net earnings (loss) attributable to noncontrolling interests | 1.0 | 0.1 | 0.1 | (0.2 | ) | ||||||||||||||||
|
Net earnings attributable to |
$ | 36.8 | $ | 35.8 | $ | - | $ | 18.4 | |||||||||||||
| Net earnings (loss) per common share: | |||||||||||||||||||||
| Basic from continuing operations attributable to common shareholders | $ | 0.79 | $ | 0.80 | $ | - | $ | 0.45 | |||||||||||||
| Discontinued operations attributable to common shareholders | 0.01 | (0.02 | ) | - | (0.05 | ) | |||||||||||||||
| $ | 0.80 | $ | 0.78 | $ | - | $ | 0.40 | ||||||||||||||
| Diluted from continuing operations attributable to common shareholders | $ | 0.79 | $ | 0.80 | $ | - | $ | 0.44 | |||||||||||||
| Discontinued operations attributable to common shareholders | 0.01 | (0.02 | ) | - | (0.05 | ) | |||||||||||||||
| $ | 0.80 | $ | 0.78 | $ | - | $ | 0.39 | ||||||||||||||
| Dividends per common share | $ | 0.40 | $ | 0.40 | $ | 0.80 | $ | 0.80 | |||||||||||||
| Average number of common shares outstanding: | |||||||||||||||||||||
| Basic | 45.8 | 45.6 | 45.8 | 45.6 | |||||||||||||||||
| Diluted | 45.9 | 45.8 | 45.8 | 45.8 | |||||||||||||||||
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| Unaudited Financial Highlights | |||||||||||||||||||||
| (In millions) | |||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
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June 30, | ||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
| Net sales: | |||||||||||||||||||||
| Aggregates Business: | |||||||||||||||||||||
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$ | 109.7 | $ | 107.3 | $ | 186.8 | $ | 178.7 | |||||||||||||
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73.8 | 78.0 | 141.3 | 140.7 | |||||||||||||||||
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257.3 | 174.7 | 411.5 | 282.1 | |||||||||||||||||
| Total Aggregates Business | 440.8 | 360.0 | 739.6 | 601.5 | |||||||||||||||||
| Specialty Products | 50.4 | 49.6 | 102.2 | 98.7 | |||||||||||||||||
| Total | $ | 491.2 | $ | 409.6 | $ | 841.8 | $ | 700.2 | |||||||||||||
| Gross profit: | |||||||||||||||||||||
| Aggregates Business: | |||||||||||||||||||||
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$ | 32.4 | $ | 32.0 | $ | 40.3 | $ | 40.3 | |||||||||||||
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3.7 | 7.4 | 7.1 | 9.1 | |||||||||||||||||
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45.8 | 35.9 | 41.1 | 33.3 | |||||||||||||||||
| Total Aggregates Business | 81.9 | 75.3 | 88.5 | 82.7 | |||||||||||||||||
| Specialty Products | 19.9 | 21.4 | 39.3 | 39.0 | |||||||||||||||||
| Corporate | 0.3 | 0.8 | (1.9 | ) | (1.5 | ) | |||||||||||||||
| Total | $ | 102.1 | $ | 97.5 | $ | 125.9 | $ | 120.2 | |||||||||||||
| Selling, general and administrative expenses: | |||||||||||||||||||||
| Aggregates Business: | |||||||||||||||||||||
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$ | 9.6 | $ | 9.4 | $ | 19.1 | $ | 18.5 | |||||||||||||
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5.7 | 6.8 | 11.7 | 13.6 | |||||||||||||||||
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14.0 | 10.7 | 27.8 | 21.3 | |||||||||||||||||
| Total Aggregates Business | 29.3 | 26.9 | 58.6 | 53.4 | |||||||||||||||||
| Specialty Products | 2.2 | 2.2 | 4.7 | 4.7 | |||||||||||||||||
| Corporate | 3.8 | 1.9 | 5.0 | 1.5 | |||||||||||||||||
| Total | $ | 35.3 | $ | 31.0 | $ | 68.3 | $ | 59.6 | |||||||||||||
| Earnings (Loss) from operations: | |||||||||||||||||||||
| Aggregates Business: | |||||||||||||||||||||
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$ | 23.8 | $ | 23.1 | $ | 22.9 | $ | 25.1 | |||||||||||||
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(2.3 | ) | (0.6 | ) | (6.0 | ) | (4.8 | ) | |||||||||||||
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34.1 | 26.3 | 15.2 | 13.7 | |||||||||||||||||
| Total Aggregates Business | 55.6 | 48.8 | 32.1 | 34.0 | |||||||||||||||||
| Specialty Products | 17.5 | 19.3 | 35.7 | 34.4 | |||||||||||||||||
| Corporate | (13.8 | ) | (3.4 | ) | (43.9 | ) | (8.1 | ) | |||||||||||||
| Total | $ | 59.3 | $ | 64.7 | $ | 23.9 | $ | 60.3 | |||||||||||||
| Net sales by product line: | |||||||||||||||||||||
| Aggregates Business: | |||||||||||||||||||||
| Aggregates | $ | 356.9 | $ | 331.3 | $ | 614.3 | $ | 554.3 | |||||||||||||
| Asphalt | 20.2 | 13.9 | 32.7 | 24.9 | |||||||||||||||||
| Ready Mixed Concrete | 29.3 | 7.6 | 49.5 | 12.9 | |||||||||||||||||
| Road Paving | 34.4 | 7.2 | 43.1 | 9.4 | |||||||||||||||||
| Total Aggregates Business | 440.8 | 360.0 | 739.6 | 601.5 | |||||||||||||||||
| Specialty Products Business: | |||||||||||||||||||||
| Magnesia-Based Chemicals | 35.5 | 34.1 | 71.9 | 69.3 | |||||||||||||||||
| Dolomitic Lime | 14.4 | 15.1 | 29.4 | 28.9 | |||||||||||||||||
| Other | 0.5 | 0.4 | 0.9 | 0.5 | |||||||||||||||||
| Total Specialty Products Business | 50.4 | 49.6 | 102.2 | 98.7 | |||||||||||||||||
| Total | $ | 491.2 | $ | 409.6 | $ | 841.8 | $ | 700.2 | |||||||||||||
| Depreciation | $ | 41.7 | $ | 41.5 | $ | 84.0 | $ | 83.5 | |||||||||||||
| Depletion | 1.3 | 0.9 | 1.9 | 1.4 | |||||||||||||||||
| Amortization | 1.3 | 0.8 | 2.8 | 1.6 | |||||||||||||||||
| $ | 44.3 | $ | 43.2 | $ | 88.7 | $ | 86.5 | ||||||||||||||
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| Balance Sheet Data | |||||||||||||
| (In millions) | |||||||||||||
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June 30, | |||||||||||
| 2012 | 2011 | 2011 | |||||||||||
| (Unaudited) | (Audited) | (Unaudited) | |||||||||||
| ASSETS | |||||||||||||
| Cash and cash equivalents | $ | 41.4 | $ | 26.0 | $ | 26.1 | |||||||
| Accounts receivable, net | 275.4 | 203.7 | 269.4 | ||||||||||
| Inventories, net | 332.0 | 322.6 | 336.4 | ||||||||||
| Other current assets | 111.5 | 105.5 | 113.7 | ||||||||||
| Property, plant and equipment, net | 1,753.8 | 1,774.3 | 1,697.8 | ||||||||||
| Intangible assets, net | 671.1 | 670.8 | 657.4 | ||||||||||
| Other noncurrent assets | 41.3 | 44.9 | 48.1 | ||||||||||
| Total assets | $ | 3,226.5 | $ | 3,147.8 | $ | 3,148.9 | |||||||
| LIABILITIES AND EQUITY | |||||||||||||
| Current maturities of long-term debt and short-term facilities | $ | 7.2 | $ | 7.2 | $ | 107.0 | |||||||
| Other current liabilities | 191.9 | 166.5 | 155.9 | ||||||||||
| Long-term debt (excluding current maturities) | 1,137.1 | 1,052.9 | 979.0 | ||||||||||
| Other noncurrent liabilities | 473.5 | 472.3 | 456.4 | ||||||||||
| Total equity | 1,416.8 | 1,448.9 | 1,450.6 | ||||||||||
| Total liabilities and equity | $ | 3,226.5 | $ | 3,147.8 | $ | 3,148.9 | |||||||
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| Unaudited Statements of Cash Flows | |||||||||||||
| (In millions) | |||||||||||||
| Six Months Ended | |||||||||||||
| June 30, | |||||||||||||
| 2012 | 2011 | ||||||||||||
| Operating activities: | |||||||||||||
| Consolidated net earnings | $ | 0.1 | $ | 18.2 | |||||||||
| Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: | |||||||||||||
| Depreciation, depletion and amortization | 88.7 | 86.5 | |||||||||||
| Stock-based compensation expense | 4.6 | 6.4 | |||||||||||
| Gains on divestitures and sales of assets | (0.8 | ) | (3.4 | ) | |||||||||
| Deferred income taxes | 6.8 | 9.2 | |||||||||||
|
Other items, net |
1.4 | 1.0 | |||||||||||
|
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: |
|||||||||||||
| Accounts receivable, net | (71.7 | ) | (87.6 | ) | |||||||||
| Inventories, net | (9.4 | ) | (3.1 | ) | |||||||||
| Accounts payable | 21.0 | 25.1 | |||||||||||
| Other assets and liabilities, net | (13.0 | ) | 4.4 | ||||||||||
| Net cash provided by operating activities | 27.7 | 56.7 | |||||||||||
| Investing activities: | |||||||||||||
| Additions to property, plant and equipment | (66.3 | ) | (58.7 | ) | |||||||||
| Acquisitions, net | (0.1 | ) | (49.9 | ) | |||||||||
| Proceeds from divestitures and sales of assets | 4.0 | 5.2 | |||||||||||
| Net cash used for investing activities | (62.4 | ) | (103.4 | ) | |||||||||
| Financing activities: | |||||||||||||
| Borrowings of long-term debt | 171.0 | 460.0 | |||||||||||
| Repayments of long-term debt | (87.1 | ) | (405.0 | ) | |||||||||
| Change in bank overdraft | 3.4 | (2.1 | ) | ||||||||||
| Dividends paid | (36.9 | ) | (36.8 | ) | |||||||||
| Debt issue costs | (0.3 | ) | (3.3 | ) | |||||||||
| Issuances of common stock | 0.8 | 1.1 | |||||||||||
| Purchase of remaining interest in existing subsidiary | - | (10.4 | ) | ||||||||||
| Distributions to owners of noncontrolling interests | (0.8 | ) | (1.0 | ) | |||||||||
| Net cash provided by financing activities | 50.1 | 2.5 | |||||||||||
| Net increase (decrease) in cash and cash equivalents | 15.4 | (44.2 | ) | ||||||||||
| Cash and cash equivalents, beginning of period | 26.0 | 70.3 | |||||||||||
| Cash and cash equivalents, end of period | $ | 41.4 | $ | 26.1 | |||||||||
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| Unaudited Operational Highlights | |||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||
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| Volume | Pricing | Volume | Pricing | ||||||||||
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Volume/Pricing Variance (1) |
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| Heritage Aggregates Product Line: (2) | |||||||||||||
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2.9% | (0.9%) | 5.4% | (1.2%) | |||||||||
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(10.1%) | 4.7% | (3.4%) | 3.5% | |||||||||
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7.6% | 5.4% | 9.3% | 6.2% | |||||||||
| Heritage Aggregates Operations | 2.8% | 2.4% | 5.5% | 2.6% | |||||||||
| Aggregates Product Line (3) | 3.0% | 0.5% | 4.7% | 0.8% | |||||||||
| Three Months Ended | Six Months Ended | ||||||||||||
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| Shipments (tons in thousands) | 2012 | 2011 | 2012 | 2011 | |||||||||
| Heritage Aggregates Product Line: (2) | |||||||||||||
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9,814 | 9,540 | 16,267 | 15,439 | |||||||||
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5,666 | 6,300 | 10,918 | 11,301 | |||||||||
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17,904 | 16,633 | 30,055 | 27,494 | |||||||||
| Heritage Aggregates Operations | 33,384 | 32,473 | 57,240 | 54,234 | |||||||||
| Acquisitions | 1,745 | - | 2,831 | - | |||||||||
| Divestitures (4) | 1 | 1,638 | 24 | 3,144 | |||||||||
| Aggregates Product Line (3) | 35,130 | 34,111 | 60,095 | 57,378 | |||||||||
| (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 excludes volume and pricing data for acquisitions that have not been included in prior-year operations for the comparable period and divestitures. |
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| (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. | |||||||||||||
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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 and six months ended |
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|
Gross Margin in Accordance with Generally Accepted Accounting Principles |
Three Months Ended |
Six Months Ended June 30, |
|||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||
| Gross profit | $ | 102.1 | $ | 97.5 | $ | 125.9 | $ | 120.2 | |||||||||
| Total revenues | $ | 545.7 | $ | 462.4 | $ | 939.7 | $ | 790.3 | |||||||||
| Gross margin | 18.7 | % | 21.1 | % | 13.4 | % | 15.2 | % | |||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
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| Gross Margin Excluding Freight and Delivery Revenues | 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Gross profit | $ | 102.1 | $ | 97.5 | $ | 125.9 | $ | 120.2 | |||||||||
| Total revenues | $ | 545.7 | $ | 462.4 | $ | 939.7 | $ | 790.3 | |||||||||
| Less: Freight and delivery revenues | (54.5 | ) | (52.8 | ) | (97.9 | ) | (90.1 | ) | |||||||||
| Net sales | $ | 491.2 | $ | 409.6 | $ | 841.8 | $ | 700.2 | |||||||||
| Gross margin excluding freight and delivery revenues | 20.8 | % | 23.8 | % | 15.0 | % | 17.2 | % | |||||||||
|
Operating Margin in Accordance with Generally Accepted Accounting Principles |
Three Months Ended |
Six Months Ended June 30, |
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| 2012 | 2011 | 2012 | 2011 | ||||||||||||||
| Earnings from operations | $ | 59.3 | $ | 64.7 | $ | 23.9 | $ | 60.3 | |||||||||
| Total revenues | $ | 545.7 | $ | 462.4 | $ | 939.7 | $ | 790.3 | |||||||||
| Operating margin | 10.9 | % | 14.0 | % | 2.5 | % | 7.6 | % | |||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| Operating Margin Excluding Freight and Delivery Revenues |
|
June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||
| Earnings from operations | $ | 59.3 | $ | 64.7 | $ | 23.9 | $ | 60.3 | |||||||||
| Total revenues | $ | 545.7 | $ | 462.4 | $ | 939.7 | $ | 790.3 | |||||||||
| Less: Freight and delivery revenues | (54.5 | ) | (52.8 | ) | (97.9 | ) | (90.1 | ) | |||||||||
| Net sales | $ | 491.2 | $ | 409.6 | $ | 841.8 | $ | 700.2 | |||||||||
| Operating margin excluding freight and delivery revenues | 12.1 | % | 15.8 | % | 2.8 | % | 8.6 | % | |||||||||
|
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 and six months ended |
|||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
|
|
June 30, | ||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||
| Earnings Before Interest, Income Taxes, Depreciation, Depletion and Amortization (EBITDA) | $ | 102.5 | $ | 105.4 | $ | 113.1 | $ | 142.6 | |||||||||
|
A reconciliation of Net Earnings Attributable to |
|||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
|
|
June 30, | ||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||
|
Net Earnings Attributable to |
$ | 36.8 | $ | 35.8 | $ | - | $ | 18.4 | |||||||||
| Add back: | |||||||||||||||||
| Interest Expense | 13.3 | 13.7 | 26.7 | 31.9 | |||||||||||||
| Income Tax Expense for Controlling Interests | 8.6 | 13.1 | (1.4 | ) | 6.7 | ||||||||||||
| Depreciation, Depletion and Amortization Expense | 43.8 | 42.8 | 87.8 | 85.6 | |||||||||||||
| EBITDA | $ | 102.5 | $ | 105.4 | $ | 113.1 | $ | 142.6 | |||||||||
|
|
|||||
| Non-GAAP Financial Measures (continued) | |||||
| (Dollars, other than earnings per share amounts, and number of shares in millions) | |||||
|
The impact of business development expenses on earnings per
diluted share, consolidated earnings from operations excluding
business development expenses, adjusted earnings per diluted share
and net cash provided by operating activities excluding the impact
of business development expenses each represent non-GAAP financial
measures. Management presents these measures to provide more
consistent information for investors and analysts to use when
comparing operating results for the quarter ended |
|||||
| The following shows the calculation of the impact of business development expenses on earnings per diluted share: | |||||
| Three Months Ended | |||||
|
|
|||||
| Business development expenses | $ | 9.2 | |||
| Income tax benefit | 3.6 | ||||
| After-tax impact of business development expenses | $ | 5.6 | |||
| Diluted average number of common shares outstanding | 45.9 | ||||
| Earnings per diluted share impact of business development expenses | $ | (0.12 | ) | ||
|
The following reconciles consolidated earnings from operations in accordance with generally accepted accounting principles to consolidated earnings from operations exclusive of business development expenses: |
|||||
| Three Months Ended | |||||
|
|
|||||
| Consolidated earnings from operations in accordance with generally accepted accounting principles | $ | 59.3 | |||
| Add back: Business development expenses | 9.2 | ||||
| Consolidated earnings from operations exclusive of business development expenses | $ | 68.5 | |||
|
The following reconciles earnings per diluted share in accordance with generally accepted accounting principles to adjusted earnings per diluted share, which excludes the impact of business development expenses: |
|||||
| Three Months Ended | |||||
|
|
|||||
| Earnings per diluted share in accordance with generally accepted accounting principles | $ | 0.80 | |||
| Add back: Earnings per diluted share impact of business development expenses | 0.12 | ||||
| Adjusted earnings per diluted share, which excludes the impact of business development expenses | $ | 0.92 | |||
|
The following reconciles net cash provided by operating activities in accordance with generally accepted accounting principles to net cash provided by operating activities excluding the impact of business development expenses: |
|||||
| Six Months Ended | |||||
|
|
|||||
| Net cash provided by operating activities in accordance with generally accepted accounting principles | $ | 27.7 | |||
| Add back: Impact of business development expenses on operating cash flow | 24.9 | ||||
| Net cash provided by operating activities excluding the impact of business development expenses | $ | 52.6 | |||
|
|
|||||
| 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 3.95 times as of |
|||||
|
The following presents the calculation of Consolidated
Debt-to-Consolidated EBITDA, as defined, for the trailing-twelve
months at |
|||||
| Twelve-Month Period | |||||
|
|
|||||
|
|
|||||
|
Earnings from continuing operations attributable to |
$ | 68.1 | |||
| Add back: | |||||
|
Interest expense |
53.4 | ||||
| Income tax expense | 12.0 | ||||
| Depreciation, depletion and amortization expense | 166.7 | ||||
| Stock-based compensation expense | 9.7 | ||||
| Deduct: | |||||
| Interest income | (0.6 | ) | |||
| Consolidated EBITDA, as defined | $ | 309.3 | |||
|
Consolidated Debt, including debt guaranteed by the Corporation
and excluding specified acquisition debt, at |
$ | 1,124.4 | |||
|
Less: Unrestricted cash and cash equivalents in excess of |
- | ||||
|
Consolidated Net Debt, as defined, at |
$ | 1,124.4 | |||
|
Consolidated Debt-to-Consolidated EBITDA, as defined, at |
3.63 times | ||||
MLM-E
Executive
Vice President,
Chief Financial Officer and Treasurer
www.martinmarietta.com
Source:
News Provided by Acquire Media