UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 2, 2010
Martin Marietta Materials, Inc.
(Exact Name of Registrant as Specified in Its Charter)
North Carolina
(State or Other Jurisdiction of Incorporation)
| 1-12744 | 56-1848578 | |
| (Commission File Number) | (IRS Employer Identification No.) | |
| 2710 Wycliff Road, Raleigh, North Carolina | 27607 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
(919) 781-4550
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On November 2, 2010, the Corporation announced financial results for the third quarter and nine
months ended September 30, 2010. The press release, dated November 2, 2010, is furnished as
Exhibit 99.1 to this report and is incorporated by reference herein.
Item 7.01 Regulation FD Disclosure.
On November 2, 2010, the Corporation announced financial results for the third quarter and nine
months ended September 30, 2010. The press release, dated November 2, 2010, is furnished as
Exhibit 99.1 to this report and is incorporated by reference herein. Additional information about
the quarter, and the Corporation’s use of non-GAAP financial measures, which is available on the
Corporation’s Web site at www.martinmarietta.com by clicking the heading “Financials”, in
the “Investors” section and then clicking the quick link “Non-GAAP Financial Measures”.
The Corporation will host an online Web simulcast of its third-quarter 2010 earnings conference
call on Tuesday, November 2, 2010. The live broadcast of the Corporation’s conference call will
begin at 2:00 p.m., Eastern Time, on November 2, 2010. An online replay will be available
approximately two hours following the conclusion of the live broadcast. A link to these events
will be available at the Corporation’s Web site at www.martinmarietta.com. For those
investors without online web access, the conference call may also be accessed by calling
970-315-0423, confirmation number 19123787. Additional information about the Corporation’s use of
non-GAAP financial measures, as well as certain other financial or statistical information the
Corporation may present at the conference call, will be provided on the Corporation’s Web site.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
| 99.1 | Press Release dated November 2, 2010, announcing financial results for the third quarter and
nine months ended September 30, 2010. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MARTIN MARIETTA MATERIALS, INC. | ||||
| (Registrant) | ||||
| Date: November 2, 2010 | By: | /s/ Anne H. Lloyd | ||
| Anne H. Lloyd, Executive Vice President and Chief Financial Officer |
EXHIBIT INDEX
| Exhibit No. | Description | |
99.1
|
Press Release dated November 2, 2010, announcing financial results for the third quarter and nine months ended September 30, 2010. |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
|
Contact: | Anne H. Lloyd | ||
| Executive Vice President, Chief | ||||
| Financial Officer and Treasurer | ||||
| (919) 783-4660 | ||||
| www.martinmarietta.com |
MARTIN MARIETTA MATERIALS, INC. ANNOUNCES THIRD QUARTER RESULTS
Second Consecutive Quarter of Aggregates Volume Growth;
Specialty Products Posts Another Record Quarter
Specialty Products Posts Another Record Quarter
RALEIGH, North Carolina (November 2, 2010) — Martin Marietta Materials, Inc. (NYSE:MLM) today
announced results for the third quarter and nine months ended September 30, 2010.
Ward Nye, President and CEO of Martin Marietta Materials, stated, “We are pleased to report our
second consecutive quarter of aggregates volume growth. In fact, aggregates shipments improved in
each of our end-use markets during the quarter, resulting in an
overall 6.3% increase, led by a 14% increase in the nonresidential
end-use market, both compared
with the prior-year quarter. We are confident that we are well positioned to capitalize on an
economic recovery.”
Notable
Items (All Comparisons, Unless Noted, Are With The Prior-Year Quarter)
| • | Earnings per diluted share of $1.13 compared with $1.23 | ||
| • | Net sales increased to $443.7 million compared with $428.3 million | ||
| • | Heritage aggregates product line volume up 6.3% for the quarter | ||
| • | Heritage aggregates product line pricing down 3.1%, or $0.32 per ton; product and project mix account for 160 basis points of the decline | ||
| • | Specialty Products record third-quarter earnings from operations of $12.0 million | ||
| • | Selling, general and administrative expenses down $1.7 million and 70 basis points as a percentage of net sales | ||
| • | Consolidated operating margin (excluding freight and delivery revenues) of 18.9% compared with 20.8% |
Management
Commentary (All Comparisons, Unless Noted, Are With The Prior-Year Quarter)
Nye
continued, “The infrastructure end-use market, which had volume growth of 3%, was supported by an increase in state transportation spending that was somewhat
offset by a decline in shipments to projects funded by the American Recovery and Reinvestment Act
(“ARRA” or “Stimulus”). We continue to believe that this is a timing issue since Stimulus-related
projects contributed volume growth in some states during the quarter. In other states, principally
Iowa, where they aggressively completed their Stimulus-related work in 2009, our shipments actually
declined. Overall, however, aggregates shipments to the infrastructure end-use market, excluding
projects funded by ARRA, increased more than 6%. Activity in portions
of the energy sector, specifically the Haynesville and Barnett Shale Natural Gas Fields in
northwest Louisiana, east Texas and Arkansas, continues to be the most significant volume driver in
our nonresidential end-use market, as aggregates are essential to build both oilfield roads and
pads for drilling rigs. Our ChemRock/Rail end-use market experienced
a 9% volume increase, fueled by railroad expansion activity in certain markets. The residential
end-use market had a volume increase of 3%.
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MLM Announces Third Quarter 2010 Results
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“Weather had a disparate impact on our third-quarter results. Volume growth was led by our Mideast
Group, which experienced dry weather and generated a 10.3% increase in heritage aggregates
shipments. In particular, our Indiana markets experienced
significant highway work performed under the state’s 10-year, $12 billion transportation plan known
as “Major Moves.” Contractors benefitted from the favorable weather and accelerated construction
in efforts to achieve early completion bonuses on some state work. The West Group reported a 6.0%
increase in heritage aggregates shipments, which principally reflects the positive impact of the
increased shipments to the energy sector and railroad industries. These achievements were
partially offset by wet weather in our Midwest Division. Flooding at multiple Midwest Division
facilities restricted both operations and sales, and served to increase production costs at certain
locations. These conditions are a strong contrast to its prior-year record third-quarter operating
results which reflected aggressive spending of ARRA funds by the state of Iowa.
“Overall heritage aggregates product line pricing decreased 3.1%. Two previously reported pricing trends continued in the third quarter. First, a higher
percentage of shipments of base stone, which is used in both road construction and energy sector
activity and has a lower average selling price compared with clean stone, contributed to this
negative period-to-period comparison of selling price. Second, pricing on Stimulus-related
projects was 10% lower than our company average. We estimate that the impact of these factors
negatively affected aggregate pricing by 160 basis points and expect this pricing pressure to ease
as our end-markets continue to either recover or reach levels of sustained stability. However,
competitive pricing pressure exists and opportunities to increase pricing will return one product and one region at a time.
“Our Specialty Products business benefitted from strong demand in the chemicals product line and,
once again, achieved strong performance that contributed significantly to our quarterly results,
including record third-quarter gross profit and earnings from operations. Sales of dolomitic lime
decreased slightly, but reflect the strength in the steel industry experienced in the early part of
the quarter. The Specialty Products business’ net sales of $42.3 million in the quarter increased
6.8%. Earnings from operations of $12.0 million reflect management’s
continued focus on cost control programs.
“Our strong results continue to reflect our ability to control operating costs, including selling,
general and administrative expenses, while remaining focused on safety, productivity and customer
service. Direct production costs in our Aggregates business increased $20.7 million, or 8.7%.
Energy costs were a significant driver as higher prices of energy increased costs by $4.5 million,
thereby reducing earnings by $0.06 per diluted share. We were able to offset these increased
energy costs by higher productive efficiency, as measured by tons per working man hour, which
increased 3%. Selling, general and administrative expenses declined
$1.7 million, despite absorbing $0.9 million of expense
related to required payments under certain retirement plans. We expect SG&A expenses to be no
more than 8.8% of net sales for the year, a 50-basis-point reduction from 2009.
“The overall effective tax rate for the quarter was 20.8% compared with 21.2% in the prior-year
period. The quarterly rate was positively affected by the effective settlement of the IRS
examination of our 2007 federal income tax return and certain issues related to the 2005 and 2004
tax years. Additionally, the limitations period for federal examination of the 2006 tax year
expired. For full year 2010, we expect the overall effective tax rate to be approximately 26%.
Liquidity And Capital Resources
“We have remained highly attentive to our balance sheet, liquidity and cash flow generation. We
ended the quarter with $60 million in cash and cash equivalents, available borrowings of $323
million on our revolving credit agreement and available borrowings of $100 million on our secured
accounts receivable credit facility.
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MLM Announces Third Quarter 2010 Results
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November 2, 2010
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November 2, 2010
“Capital investment in organic growth prior to the current recession has positioned our operations
for strong performance in an economic recovery. Capital expenditures were $110.0 million for the
nine months ended September 30, 2010, compared with $100.5 million for the comparable prior-year
period. Capital expenditures are forecast at $135 million for full year 2010. We can continue to
safely and appropriately reduce maintenance capital investment and provide opportunities to
allocate capital in a manner that maximizes long-term shareholder value. In October, we acquired a
sand and gravel business in South Carolina. The acquired operation supplements our ability to
serve the Charlotte, North Carolina, market as well as certain South Carolina markets by providing
a broader array of products.
“Cash provided by operating activities for the nine months ended September 30, 2010, was $202.6
million compared with $234.6 million for the same period in 2009. Increased sales have led to an
$86.8 million build in accounts receivable during the current year. This was partially offset by
$8.9 million generated by our inventory management initiatives and $4.4 million lower cash taxes
paid through the first nine months of 2010.
“At September 30, 2010, we had total outstanding debt of $1.031 billion, of which $245.4 million
was classified as current, including $242 million of Notes that mature in April 2011.
“At September 30, 2010, our ratio of consolidated debt to consolidated earnings before interest
expense, tax expense, and depreciation, depletion and amortization expense (EBITDA), as defined,
for the trailing twelve-months was 2.88 times.
2010 Outlook
“Our outlook for the balance of the year is based on continued stability in overall aggregates
demand. Evidence of that stability is reflected in our year-to-date aggregates shipments. For the
full year, we expect: (i) infrastructure construction volume to be up 4% to 6%; (ii) nonresidential
construction volume to increase 6% to 7%; (iii) residential construction volume to be up 3% to 4%;
and (iv) growth of 2% to 3% for our ChemRock/Rail products.
“Considering all these factors, for full year 2010, we expect aggregates volume growth of 4% to 6%,
aggregates pricing to range from down 3% to down 4%, and aggregates production cost per ton to
increase slightly compared with the prior year. Energy costs — primarily diesel fuel consumed by
off-road mobile quarry equipment — are expected to increase compared with 2009. We expect the
Specialty Products segment to contribute $46 million to $48 million in pretax earnings for 2010.
Interest expense should be approximately $70 million in 2010. Consistent with results for the
first nine months of 2010, we expect a continued increased use of cash for working capital, most
notably accounts receivable, in the fourth quarter as revenues grow.
2011 Outlook
“It is too early to issue 2011 guidance, but we believe stability in federal infrastructure funding
will be a critical issue. At present, we continue to operate under a Congressional continuing
resolution that extended the Safe, Accountable, Flexible and Efficient Transportation Equity Act —
A Legacy for Users (SAFETEA-LU) through December 31, 2010. We view working under another
Congressional continuing resolution of SAFETEA-LU for 2011 as likely. However, it is possible for
some form of reauthorized infrastructure legislation to be passed during the year. The impetus for
any new legislation would be primarily twofold: (i) its effectiveness at creating new jobs, a major
focus of the Obama administration; and (ii) the current state of infrastructure disrepair from
years of underinvestment.
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MLM Announces Third Quarter 2010 Results
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November 2, 2010
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November 2, 2010
“We were pleased in September 2010 when President Obama proposed a six-year plan to rebuild
infrastructure with an initial $50 billion investment. However, further action related to any new
legislation will depend on the results of the mid-term elections. We continue to expect modest
improvement in state infrastructure spending and approximately 30% in ARRA infrastructure funds
spent in 2011. This continued Stimulus spend, coupled with funding from either an extended federal
highway bill or continuing resolutions, will maintain spending at constant funding levels. We also
expect to see improvement in the residential construction market and anticipate the commercial
component of our nonresidential end-use market to trough in 2010, with modest 2011 volume recovery.
The price of natural gas and timing of lease commitments for oil and natural gas companies will be
significant factors in the continuation of the energy sector activity into 2011. We will provide
further 2011 guidance in our fourth quarter earnings release.”
Risks To Outlook
The 2010 estimated outlook includes management’s assessment of the likelihood of certain risk
factors that will affect performance. The most significant risk to 2010 performance will be, as
previously noted, the strength of the United States economy and its impact on construction
activity. Our 2010 outlook is based on the expectation that the United States economy will broadly
trend toward stabilization in the remainder of the year.
Risks to the Corporation’s future performance are related to both price and volume and include a
more widespread decline in aggregates pricing, a decline in infrastructure construction as a result
of unexpected delays in federal ARRA and state infrastructure projects and continued lack of
clarity regarding the timing and amount of the federal highway bill, a decline in commercial
construction, a decline in residential construction, or some combination thereof. Further,
increased highway construction funding pressures as a result of either federal or state issues can
affect profitability. Currently, nearly all states are experiencing state-level funding pressures
driven by lower tax revenues and an inability to finance approved projects. North Carolina and
Texas are among the states experiencing these pressures, and these states disproportionately affect
revenue and profitability.
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 by the Corporation’s customers 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, among them, 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. The
Corporation’s estimated outlook does not include any further significant increases in diesel costs
during the remainder of 2010.
The availability of transportation in the Corporation’s long-haul network, particularly the
availability of barges on the Mississippi River system and the availability of rail cars and
locomotive power to move trains, affects the Corporation’s ability to efficiently transport
material into certain markets, most notably Texas, Florida and the Gulf Coast region. The
Aggregates business is also subject to weather-related risks that can significantly affect
production schedules and profitability. Hurricane activity in the Atlantic Ocean and Gulf Coast
generally is most active during the third and fourth quarters. Additionally, the early onset of
winter can shorten the construction season.
Risks to the 2010 outlook include volume decline as a result of economic events outside of 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.
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MLM Announces Third Quarter 2010 Results
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November 2, 2010
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November 2, 2010
Consolidated Financial Highlights
Net sales for the quarter were $443.7 million, a 3.6% increase versus the $428.3 million recorded
in the third quarter of 2009. Earnings from operations for the third quarter of 2010 were $83.8
million compared with $89.2 million in 2009. Net earnings attributable to Martin Marietta
Materials were $52.0 million, or $1.13 per diluted share, versus 2009 third-quarter net earnings
attributable to Martin Marietta Materials of $55.5 million, or $1.23 per diluted share.
Net sales for the first nine months of 2010 were $1.182 billion compared with $1.169 billion for
the year-earlier period. Year-to-date earnings from operations were $161.6 million versus $173.1
million in 2009. For the nine-month period ended September 30, 2010, net earnings attributable to
Martin Marietta Materials were $82.2 million, or $1.78 per diluted share, compared with net
earnings attributable to Martin Marietta Materials of $88.6 million, or $1.99 per diluted share, in
the first nine months of 2009.
Business Financial Highlights
Net sales for the Aggregates business during the third quarter of 2010 were $401.4 million compared
with 2009 third-quarter sales of $388.7 million. Aggregates pricing at heritage locations was down
3.1%, while volume increased 6.3%. Earnings from operations for the quarter were $74.1 million in
2010 versus $81.1 million in the year-earlier period. Year-to-date 2010 net sales for the
Aggregates business were $1.050 billion versus $1.063 billion in 2009. Earnings from operations on
a year-to-date basis were $134.8 million in 2010 compared with $168.1 million in 2009. For the
nine-month period ended September 30, 2010, heritage aggregates pricing decreased 3.4%, while
volume increased 2.8%.
Specialty Products’ third-quarter net sales of $42.3 million increased 6.8% from prior-year net
sales of $39.6 million. Earnings from operations for the third quarter were $12.0 million compared
with $11.9 million in the year-earlier period. For the first nine months of 2010, net sales were
$131.9 million and earnings from operations were $40.1 million compared with net sales of $106.0
million and earnings from operations of $26.1 million for the first nine months of 2009.
Conference Call Information
The Company will host an online web simulcast of its third quarter 2010 earnings conference call
later today (November 2, 2010). The live broadcast of the Martin Marietta Materials, Inc.
conference call will begin at 2 p.m. Eastern Time today. An online replay will be available
approximately two hours following the conclusion of the live broadcast. A link to these events
will be available at the Corporation’s website.
For those investors without online web access, the conference call may also be accessed by calling
(970) 315-0423, confirmation number 19123787.
Martin Marietta Materials, Inc. is the nation’s second largest producer of construction aggregates
and a producer of magnesia-based chemicals and dolomitic lime. For more information about Martin
Marietta Materials, Inc., refer to the Corporation’s website at www.martinmarietta.com.
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MLM Announces Third Quarter 2010 Results
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November 2, 2010
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November 2, 2010
If you are interested in Martin Marietta Materials, Inc. stock, management recommends that, at a
minimum, you read the Corporation’s current annual report and Forms 10-K, 10-Q and 8-K reports to
the SEC over the past year. The Corporation’s recent proxy statement for the annual meeting of
shareholders also contains important information. These and other materials that have been filed
with the SEC are accessible through the Corporation’s website at www.martinmarietta.com and are
also available at the SEC’s website at www.sec.gov. You may also write or call the Corporation’s
Corporate Secretary, who will provide copies of such reports.
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 the United States economy; widespread decline in aggregates pricing; the level and
timing of federal and state transportation funding, including federal stimulus projects and most
particularly in North Carolina, one of the Corporation’s largest and most profitable states, and
Georgia, Texas, Iowa and Louisiana, which when coupled with North Carolina, represented 56% of 2009
net sales of the Aggregates business; the ability of states and/or other entities to finance
approved projects either with tax revenues or alternative financing structures; levels of
construction spending in the markets the Corporation serves; the severity of a continued decline in
the commercial component of the nonresidential construction market, notably office and retail
space, and a decline in residential construction; unfavorable weather conditions, particularly
Atlantic Ocean hurricane activity, the late start to spring or the early onset of winter and the
impact of a drought in the markets served by the Corporation; the volatility of fuel costs,
particularly diesel fuel, and the impact on the cost of other consumables, namely steel,
explosives, tires and conveyor belts; continued increases in the cost of other repair and supply
parts; transportation availability, notably barge availability on the Mississippi River system and
the availability of railcars and locomotive power to move trains to supply the Corporation’s Texas,
Florida and Gulf Coast markets; increased transportation costs, including increases from higher
passed-through energy costs and higher volumes of rail and water shipments; weakening in the steel
industry markets served by the Corporation’s dolomitic lime products; inflation and its effect on
both production and interest costs; ability to successfully integrate acquisitions quickly and in a
cost-effective manner and achieve anticipated profitability to maintain compliance with the
Corporation’s leverage ratio debt covenant; changes in tax laws, the interpretation of such laws
and/or administrative practices that would increase the Corporation’s tax rate; violation of the
debt covenant if price and/or volumes decline worse than expected; downward pressure on the
Corporation’s common stock price and its impact on goodwill impairment evaluations; and other risk
factors listed from time to time found in the Corporation’s filings with the Securities and
Exchange Commission. Other factors besides those listed here may also adversely affect the
Corporation, and may be material to the Corporation. The Corporation assumes no obligation to
update any such forward-looking statements.
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MLM Announces Third Quarter 2010 Results
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November 2, 2010
MARTIN MARIETTA MATERIALS, INC.
Unaudited Statements of Earnings
(In millions, except per share amounts)
Unaudited Statements of Earnings
(In millions, except per share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Net sales |
$ | 443.7 | $ | 428.3 | $ | 1,182.1 | $ | 1,168.8 | ||||||||
Freight and delivery revenues |
65.6 | 59.7 | 172.8 | 159.1 | ||||||||||||
Total revenues |
509.3 | 488.0 | 1,354.9 | 1,327.9 | ||||||||||||
Cost of sales |
329.9 | 310.6 | 931.0 | 890.8 | ||||||||||||
Freight and delivery costs |
65.6 | 59.7 | 172.8 | 159.1 | ||||||||||||
Total cost of revenues |
395.5 | 370.3 | 1,103.8 | 1,049.9 | ||||||||||||
Gross profit |
113.8 | 117.7 | 251.1 | 278.0 | ||||||||||||
Selling, general and administrative expenses |
31.2 | 32.9 | 98.4 | 106.9 | ||||||||||||
Research and development |
0.1 | 0.1 | 0.1 | 0.3 | ||||||||||||
Other operating (income) and expenses, net |
(1.3 | ) | (4.5 | ) | (9.0 | ) | (2.3 | ) | ||||||||
Earnings from operations |
83.8 | 89.2 | 161.6 | 173.1 | ||||||||||||
Interest expense |
17.1 | 18.2 | 51.5 | 55.4 | ||||||||||||
Other nonoperating (income) and expenses, net |
(0.6 | ) | (1.2 | ) | 0.2 | (1.6 | ) | |||||||||
Earnings from continuing operations before taxes on income |
67.3 | 72.2 | 109.9 | 119.3 | ||||||||||||
Income tax expense |
14.0 | 15.3 | 26.5 | 28.7 | ||||||||||||
Earnings from continuing operations |
53.3 | 56.9 | 83.4 | 90.6 | ||||||||||||
Gain on discontinued operations, net of related tax expense
of $0.0, $0.0, $0.1 and $0.3, respectively |
— | — | 0.1 | 0.5 | ||||||||||||
Consolidated net earnings |
53.3 | 56.9 | 83.5 | 91.1 | ||||||||||||
Less: Net earnings attributable to noncontrolling interests |
1.3 | 1.4 | 1.3 | 2.5 | ||||||||||||
Net earnings attributable to Martin Marietta Materials, Inc. |
$ | 52.0 | $ | 55.5 | $ | 82.2 | $ | 88.6 | ||||||||
Net earnings per common share: |
||||||||||||||||
Basic from continuing operations attributable to common shareholders |
$ | 1.13 | $ | 1.23 | $ | 1.79 | $ | 1.99 | ||||||||
Discontinued operations attributable to common shareholders |
— | — | — | 0.01 | ||||||||||||
| $ | 1.13 | $ | 1.23 | $ | 1.79 | $ | 2.00 | |||||||||
Diluted from continuing operations attributable to common shareholders |
$ | 1.13 | $ | 1.23 | $ | 1.78 | $ | 1.98 | ||||||||
Discontinued operations attributable to common shareholders |
— | — | — | 0.01 | ||||||||||||
| $ | 1.13 | $ | 1.23 | $ | 1.78 | $ | 1.99 | |||||||||
Dividends per common share |
$ | 0.40 | $ | 0.40 | $ | 1.20 | $ | 1.20 | ||||||||
Average number of common shares outstanding: |
||||||||||||||||
Basic |
45.5 | 44.6 | 45.5 | 43.7 | ||||||||||||
Diluted |
45.7 | 44.8 | 45.6 | 43.9 | ||||||||||||
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MARTIN MARIETTA MATERIALS, INC.
Unaudited Financial Highlights
(In millions)
Unaudited Financial Highlights
(In millions)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Net sales: |
||||||||||||||||
Aggregates Business: |
||||||||||||||||
Mideast Group |
$ | 133.6 | $ | 131.2 | $ | 348.5 | $ | 337.5 | ||||||||
Southeast Group |
91.2 | 87.9 | 251.5 | 275.4 | ||||||||||||
West Group |
176.6 | 169.6 | 450.2 | 449.9 | ||||||||||||
Total Aggregates Business |
401.4 | 388.7 | 1,050.2 | 1,062.8 | ||||||||||||
Specialty Products |
42.3 | 39.6 | 131.9 | 106.0 | ||||||||||||
Total |
$ | 443.7 | $ | 428.3 | $ | 1,182.1 | $ | 1,168.8 | ||||||||
Gross profit (loss): |
||||||||||||||||
Aggregates Business: |
||||||||||||||||
Mideast Group |
$ | 48.7 | $ | 50.8 | $ | 108.2 | $ | 111.7 | ||||||||
Southeast Group |
7.9 | 9.6 | 19.2 | 41.7 | ||||||||||||
West Group |
43.2 | 44.8 | 77.7 | 93.9 | ||||||||||||
Total Aggregates Business |
99.8 | 105.2 | 205.1 | 247.3 | ||||||||||||
Specialty Products |
14.6 | 14.4 | 48.3 | 33.4 | ||||||||||||
Corporate |
(0.6 | ) | (1.9 | ) | (2.3 | ) | (2.7 | ) | ||||||||
Total |
$ | 113.8 | $ | 117.7 | $ | 251.1 | $ | 278.0 | ||||||||
Selling, general and administrative expenses: |
||||||||||||||||
Aggregates Business: |
||||||||||||||||
Mideast Group |
$ | 10.3 | $ | 10.8 | $ | 31.1 | $ | 33.0 | ||||||||
Southeast Group |
6.3 | 7.1 | 19.1 | 20.3 | ||||||||||||
West Group |
10.7 | 10.3 | 31.8 | 31.5 | ||||||||||||
Total Aggregates Business |
27.3 | 28.2 | 82.0 | 84.8 | ||||||||||||
Specialty Products |
2.5 | 2.3 | 8.1 | 7.0 | ||||||||||||
Corporate |
1.4 | 2.4 | 8.3 | 15.1 | ||||||||||||
Total |
$ | 31.2 | $ | 32.9 | $ | 98.4 | $ | 106.9 | ||||||||
Earnings (Loss) from operations: |
||||||||||||||||
Aggregates Business: |
||||||||||||||||
Mideast Group |
$ | 38.7 | $ | 40.1 | $ | 80.3 | $ | 79.3 | ||||||||
Southeast Group |
1.4 | 4.8 | (0.2 | ) | 23.0 | |||||||||||
West Group |
34.0 | 36.2 | 54.7 | 65.8 | ||||||||||||
Total Aggregates Business |
74.1 | 81.1 | 134.8 | 168.1 | ||||||||||||
Specialty Products |
12.0 | 11.9 | 40.1 | 26.1 | ||||||||||||
Corporate |
(2.3 | ) | (3.8 | ) | (13.3 | ) | (21.1 | ) | ||||||||
Total |
$ | 83.8 | $ | 89.2 | $ | 161.6 | $ | 173.1 | ||||||||
Depreciation |
$ | 43.5 | $ | 43.8 | $ | 130.4 | $ | 127.9 | ||||||||
Depletion |
1.2 | 1.3 | 3.2 | 3.0 | ||||||||||||
Amortization |
0.7 | 0.8 | 2.3 | 2.4 | ||||||||||||
| $ | 45.4 | $ | 45.9 | $ | 135.9 | $ | 133.3 | |||||||||
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MLM Announces Third Quarter 2010 Results
Page 9
November 2, 2010
Page 9
November 2, 2010
MARTIN MARIETTA MATERIALS, INC.
Balance Sheet Data
(In millions)
| September 30, | December 31, | September 30, | ||||||||||
| 2010 | 2009 | 2009 | ||||||||||
| (Unaudited) | (Audited) | (Unaudited) | ||||||||||
ASSETS |
||||||||||||
Cash and cash equivalents |
$ | 60.5 | $ | 263.6 | $ | 193.8 | ||||||
Accounts receivable, net |
249.6 | 162.8 | 241.5 | |||||||||
Inventories, net |
323.8 | 332.6 | 329.8 | |||||||||
Other current assets |
98.2 | 97.9 | 79.9 | |||||||||
Property, plant and equipment, net |
1,693.2 | 1,692.9 | 1,698.1 | |||||||||
Intangible assets, net |
641.8 | 636.7 | 637.1 | |||||||||
Other noncurrent assets |
48.7 | 52.8 | 52.5 | |||||||||
Total assets |
$ | 3,115.8 | $ | 3,239.3 | $ | 3,232.7 | ||||||
LIABILITIES AND EQUITY |
||||||||||||
Current maturities of long-term debt and
short-term facilities |
$ | 245.4 | $ | 226.1 | $ | 226.0 | ||||||
Other current liabilities |
181.4 | 147.5 | 168.8 | |||||||||
Long-term debt (excluding current maturities) |
785.7 | 1,023.5 | 1,038.9 | |||||||||
Other noncurrent liabilities |
446.1 | 435.8 | 447.0 | |||||||||
Total equity |
1,457.2 | 1,406.4 | 1,352.0 | |||||||||
Total liabilities and equity |
$ | 3,115.8 | $ | 3,239.3 | $ | 3,232.7 | ||||||
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MLM Announces Third Quarter 2010 Results
Page 10
November 2, 2010
Page 10
November 2, 2010
MARTIN MARIETTA MATERIALS, INC.
Unaudited Statements of Cash Flows
(In millions)
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2010 | 2009 | |||||||
Operating activities: |
||||||||
Consolidated net earnings |
$ | 83.5 | $ | 91.1 | ||||
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: |
||||||||
Depreciation, depletion and amortization |
135.9 | 133.3 | ||||||
Stock-based compensation expense |
11.7 | 17.1 | ||||||
Excess tax benefits from stock-based compensation transactions |
(1.6 | ) | (2.0 | ) | ||||
(Gains) Losses on divestitures and sales of assets |
(4.3 | ) | 2.0 | |||||
Deferred income taxes |
17.1 | (1.9 | ) | |||||
Other items, net |
0.7 | (2.1 | ) | |||||
Changes in operating assets and liabilities, net of effects
of acquisitions and divestitures: |
||||||||
Accounts receivable, net |
(86.8 | ) | (30.3 | ) | ||||
Inventories, net |
8.9 | (9.7 | ) | |||||
Accounts payable |
24.9 | (1.0 | ) | |||||
Other assets and liabilities, net |
12.6 | 38.1 | ||||||
Net cash provided by operating activities |
202.6 | 234.6 | ||||||
Investing activities: |
||||||||
Additions to property, plant and equipment |
(110.0 | ) | (100.5 | ) | ||||
Acquisitions, net |
(28.1 | ) | (49.6 | ) | ||||
Proceeds from divestitures and sales of assets |
4.5 | 7.4 | ||||||
Railcar construction advances |
(9.0 | ) | — | |||||
Repayment of railcar construction advances |
9.0 | — | ||||||
Loan to affiliate |
— | (4.0 | ) | |||||
Net cash used for investing activities |
(133.6 | ) | (146.7 | ) | ||||
Financing activities: |
||||||||
Borrowings of long-term debt |
150.0 | 280.0 | ||||||
Repayments of long-term debt and payments on capital lease obligations |
(369.5 | ) | (167.7 | ) | ||||
Net repayments on short-term facilities |
— | (200.0 | ) | |||||
Change in bank overdraft |
(1.7 | ) | (4.5 | ) | ||||
Dividends paid |
(55.2 | ) | (52.9 | ) | ||||
Debt issue costs |
(0.1 | ) | (2.3 | ) | ||||
Issuances of common stock |
2.8 | 233.2 | ||||||
Excess tax benefits from stock-based compensation transactions |
1.6 | 2.0 | ||||||
Purchase of subsidiary shares from noncontrolling interest |
— | (17.1 | ) | |||||
Distributions to owners of noncontrolling interests |
— | (2.6 | ) | |||||
Net cash (used for) provided by financing activities |
(272.1 | ) | 68.1 | |||||
Net (decrease) increase in cash and cash equivalents |
(203.1 | ) | 156.0 | |||||
Cash and cash equivalents, beginning of period |
263.6 | 37.8 | ||||||
Cash and cash equivalents, end of period |
$ | 60.5 | $ | 193.8 | ||||
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MLM Announces Third Quarter 2010 Results
Page 11
November 2, 2010
Page 11
November 2, 2010
MARTIN MARIETTA MATERIALS, INC.
Unaudited Operational Highlights
Unaudited Operational Highlights
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, 2010 | September 30, 2010 | |||||||||||||||
| Volume | Pricing | Volume | Pricing | |||||||||||||
Volume/Pricing Variance (1) |
||||||||||||||||
Heritage Aggregates Product Line: (2) |
||||||||||||||||
Mideast Group |
10.3 | % | (7.9 | %) | 8.8 | % | (5.2 | %) | ||||||||
Southeast Group |
1.4 | % | 3.0 | % | (6.4 | %) | (2.0 | %) | ||||||||
West Group |
6.0 | % | (2.4 | %) | 3.9 | % | (2.7 | %) | ||||||||
Heritage Aggregates Operations |
6.3 | % | (3.1 | %) | 2.8 | % | (3.4 | %) | ||||||||
Aggregates Product Line (3) |
6.3 | % | (3.1 | %) | 2.8 | % | (3.4 | %) | ||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| Shipments (tons in thousands) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Heritage Aggregates Product Line: (2) |
||||||||||||||||
Mideast Group |
12,436 | 11,270 | 30,977 | 28,463 | ||||||||||||
Southeast Group |
8,012 | 7,901 | 22,352 | 23,869 | ||||||||||||
West Group |
17,807 | 16,804 | 45,836 | 44,130 | ||||||||||||
Heritage Aggregates Operations |
38,255 | 35,975 | 99,165 | 96,462 | ||||||||||||
Acquisitions |
— | — | — | — | ||||||||||||
Divestitures (4) |
7 | 10 | 18 | 35 | ||||||||||||
Aggregates Product Line (3) |
38,262 | 35,985 | 99,183 | 96,497 | ||||||||||||
| (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. |
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MLM Announces Third Quarter 2010 Results
Page 12
November 2, 2010
Page 12
November 2, 2010
MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures
(Dollars in millions)
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 nine months ended September
30, 2010 and 2009, in accordance with GAAP and reconciliations of the ratios as percentages of
total revenues to percentages of net sales:
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Gross Margin in Accordance with Generally Accepted Accounting Principles |
||||||||||||||||
Gross profit |
$ | 113.8 | $ | 117.7 | $ | 251.1 | $ | 278.0 | ||||||||
Total revenues |
$ | 509.3 | $ | 488.0 | $ | 1,354.9 | $ | 1,327.9 | ||||||||
Gross margin |
22.3 | % | 24.1 | % | 18.5 | % | 20.9 | % | ||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Gross Margin Excluding Freight and Delivery Revenues |
||||||||||||||||
Gross profit |
$ | 113.8 | $ | 117.7 | $ | 251.1 | $ | 278.0 | ||||||||
Total revenues |
$ | 509.3 | $ | 488.0 | $ | 1,354.9 | $ | 1,327.9 | ||||||||
Less: Freight and delivery revenues |
(65.6 | ) | (59.7 | ) | (172.8 | ) | (159.1 | ) | ||||||||
Net sales |
$ | 443.7 | $ | 428.3 | $ | 1,182.1 | $ | 1,168.8 | ||||||||
Gross margin excluding freight and delivery revenues |
25.6 | % | 27.5 | % | 21.2 | % | 23.8 | % | ||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating Margin in Accordance with Generally Accepted Accounting Principles |
||||||||||||||||
Earnings from operations |
$ | 83.8 | $ | 89.2 | $ | 161.6 | $ | 173.1 | ||||||||
Total revenues |
$ | 509.3 | $ | 488.0 | $ | 1,354.9 | $ | 1,327.9 | ||||||||
Operating margin |
16.5 | % | 18.3 | % | 11.9 | % | 13.0 | % | ||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating Margin Excluding Freight and Delivery Revenues |
||||||||||||||||
Earnings from operations |
$ | 83.8 | $ | 89.2 | $ | 161.6 | $ | 173.1 | ||||||||
Total revenues |
$ | 509.3 | $ | 488.0 | $ | 1,354.9 | $ | 1,327.9 | ||||||||
Less: Freight and delivery revenues |
(65.6 | ) | (59.7 | ) | (172.8 | ) | (159.1 | ) | ||||||||
Net sales |
$ | 443.7 | $ | 428.3 | $ | 1,182.1 | $ | 1,168.8 | ||||||||
Operating margin excluding freight and delivery revenues |
18.9 | % | 20.8 | % | 13.7 | % | 14.8 | % | ||||||||
-MORE-
MLM Announces Third Quarter 2010 Results
Page 13
November 2, 2010
Page 13
November 2, 2010
MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures (continued)
(Dollars in millions)
Non-GAAP Financial Measures (continued)
(Dollars in millions)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Earnings Before Interest, Income Taxes, Depreciation,
Depletion and Amortization (EBITDA) (1) |
$ | 128.2 | $ | 134.5 | $ | 295.0 | $ | 305.0 | ||||||||
| (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. |
A reconciliation of Net Earnings Attributable to Martin Marietta Materials, Inc. to EBITDA is as
follows:
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Net Earnings Attributable to Martin Marietta Materials, Inc. |
$ | 52.0 | $ | 55.5 | $ | 82.2 | $ | 88.6 | ||||||||
Add back: |
||||||||||||||||
Interest Expense |
17.1 | 18.2 | 51.5 | 55.4 | ||||||||||||
Income Tax Expense for Controlling Interests |
14.0 | 15.3 | 26.6 | 28.8 | ||||||||||||
Depreciation, Depletion and Amortization Expense |
45.1 | 45.5 | 134.7 | 132.2 | ||||||||||||
EBITDA |
$ | 128.2 | $ | 134.5 | $ | 295.0 | $ | 305.0 | ||||||||
The ratio of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing twelve months
is a covenant under the Corporation’s $325 million five-year revolving credit agreement. Under the
agreement, the Corporation’s ratio of consolidated debt-to-consolidated EBITDA, as defined, for the
trailing twelve months can not exceed 3.50 to 1.00 as of September 30, 2010, 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 September 30, 2010. For supporting calculations, refer to
Corporation’s website at www.martinmarietta.com.
| Twelve-Month Period | ||||
| October 1, 2009 to | ||||
| September 30, 2010 | ||||
Earnings from continuing operations attributable to Martin Marietta Materials, Inc. |
$ | 79.2 | ||
Add back: |
||||
Interest expense |
69.6 | |||
Income tax expense |
25.2 | |||
Depreciation, depletion and amortization expense |
176.9 | |||
Stock-based compensation expense |
15.1 | |||
Deduct: |
||||
Interest income |
(1.3 | ) | ||
Consolidated EBITDA, as defined |
$ | 364.7 | ||
Consolidated Debt, including debt guaranteed by the Corporation, at September 30, 2010 |
$ | 1,049.3 | ||
Consolidated Debt-to-Consolidated EBITDA, as defined,
at September 30, 2010 for the trailing twelve-month EBITDA |
2.88 times | |||
-END-