Martin Marietta Reports First Quarter 2018 Results
First-Quarter Results and Business Trends Consistent with Management’s Expectations
Pricing Momentum Continues Across All Products and Segments;
Mid-America Group Posts 4.9% Price Increase
Magnesia Specialties Business Posts Record Revenues
Company Increases 2018 Guidance to Reflect Contribution from Bluegrass Materials Acquisition
Highlights Include the Following Results:
Quarter ended March 31, | ||||||
($ in millions, except per share) | 2018 | 2017 | ||||
Total revenues 1 | $ | 802.0 | $ | 843.9 | ||
Products and services revenues 2 | $ | 753.3 | $ | 792.3 | ||
Building Materials business products and services revenues | $ | 688.4 | $ | 728.0 | ||
Magnesia Specialties business products and services revenues | $ | 64.9 | $ | 64.3 | ||
Gross profit | $ | 110.4 | $ | 147.1 | ||
Earnings from operations | $ | 39.1 | $ | 77.2 | ||
Net earnings attributable to Martin Marietta | $ | 10.0 | $ | 42.3 | ||
EBITDA 3 | $ | 123.3 | $ | 147.7 | ||
Earnings per diluted share | $ | 0.16 | $ | 0.67 |
- Total revenues include the sales of products and services to customers (net of any discounts or allowances) and freight revenues.
- Products and services revenues include the sales of aggregates, cement, ready mixed concrete, asphalt and Magnesia Specialties products and paving services to customers and exclude related freight revenues.
- See appendix to this earnings release for a reconciliation to net earnings attributable to Martin Marietta.
“We remain confident that underlying market fundamentals, including positive employment and population trends across our geographic footprint, will stimulate continued growth in private construction activity and provide an impetus for additional infrastructure demand as the current broad-based recovery continues. Underlying demand trends, coupled with continued pricing growth for all products and segments, reinforce our full-year 2018 outlook as construction activity accelerates during the balance of the year. Importantly, throughout the quarter, we saw strong shipment volumes on days not impacted by typical winter weather.
“Our confidence is bolstered by the recent completion of our acquisition of Bluegrass and the addition of a talented group of new employees to the Martin Marietta team. The acquisition, the second largest in our history, strengthens our aggregates-led position in high-growth southeastern and Mid-Atlantic regions, particularly in
Mr. Nye concluded, “We believe
Operating Results
(All comparisons are versus the prior-year quarter unless noted otherwise)
Quarter ended March 31, 2018 | ||||||||
($ in millions) | Revenues | Gross profit (loss) | Gross margin | |||||
Building Materials business: | ||||||||
Products and services: | ||||||||
Aggregates | $ | 425.0 | $ | 53.0 | 12.5% | |||
Cement | 89.2 | 23.7 | 26.6% | |||||
Ready mixed concrete | 218.5 | 15.6 | 7.2% | |||||
Asphalt and paving | 16.4 | (7.6) | (46.7%) | |||||
Less: interproduct revenues | (60.7) | --- | --- | |||||
Products and services | 688.4 | 84.7 | 12.3% | |||||
Freight | 44.3 | (0.1) | NM | |||||
Total Building Materials business | 732.7 | 84.6 | 11.5% | |||||
Magnesia Specialties business: | ||||||||
Products and services | 64.9 | 25.1 | 38.6% | |||||
Freight | 4.4 | (1.2) | NM | |||||
Total Magnesia Specialties business | 69.3 | 23.9 | 34.5% | |||||
Corporate | --- | 1.9 | NM | |||||
Total | $ | 802.0 | $ | 110.4 | 13.8% | |||
Quarter ended March 31, 2017 | ||||||||
($ in millions) | Revenues | Gross profit (loss) | Gross margin | |||||
Building Materials business: | ||||||||
Products and services: | ||||||||
Aggregates | $ | 451.1 | $ | 78.9 | 17.5% | |||
Cement | 93.6 | 30.8 | 32.9% | |||||
Ready mixed concrete | 222.3 | 19.8 | 8.9% | |||||
Asphalt and paving | 21.7 | (4.7) | (21.8%) | |||||
Less: interproduct revenues | (60.7) | --- | --- | |||||
Products and services | 728.0 | 124.8 | 17.1% | |||||
Freight | 47.3 | 0.4 | NM | |||||
Total Building Materials business | 775.3 | 125.2 | 16.1% | |||||
Magnesia Specialties business: | ||||||||
Products and services | 64.3 | 23.3 | 36.3% | |||||
Freight | 4.3 | (1.0) | NM | |||||
Total Magnesia Specialties business | 68.6 | 22.3 | 32.5% | |||||
Corporate | --- | (0.4) | NM | |||||
Total | $ | 843.9 | $ | 147.1 | 17.4% | |||
Building Materials Business
Aggregates
As contemplated in the Company’s guidance entering the year, first-quarter aggregates shipments returned to levels more in-line with historical trends and patterns. Winter weather traditionally limits the ability of outdoor contractors to perform work during the winter months. Accordingly, first-quarter operating results compare unfavorably to the first quarters of 2017 and 2016, when the Company benefitted from back-to-back unseasonably favorable weather conditions. For the quarter, aggregates product revenues decreased 5.8 percent, reflecting a 7.9 percent decline in shipments. Aggregates pricing improved 2.3 percent.
First-quarter aggregates shipments by end use are as follows:
Infrastructure Market
- Aggregates shipments to the infrastructure market decreased 11 percent as precipitation and cold temperatures delayed the start to the construction season compared with the past few years. As state Departments of Transportation (DOTs) and contractors continue to address labor constraints and the construction industry benefits from further regulatory reform, management remains confident that infrastructure demand will improve from the funding provided by the Fixing America’s Surface Transportation Act (FAST Act) and numerous state and local transportation initiatives. Overall, aggregates shipments to the infrastructure market comprised 36 percent of first-quarter aggregates volumes, well below the Company’s most recent five-year average of 43 percent.
Nonresidential Market
- Aggregates shipments to the nonresidential market decreased 10 percent overall, driven by weather-impacted challenges in office and retail construction activity. Notably, the Mideast Division, and more specifically, the
Ohio District , reported strong heavy industrial growth, as a large pipeline project commenced construction after obtaining long-awaited federal clearance. Continued project approvals, coupled with higher oil prices, underpin management’s expectation that the next wave of large energy-sector projects, particularly along theGulf Coast , should notably contribute to increased aggregates consumption. The nonresidential market represented 31 percent of first-quarter aggregates shipments.
Residential Market
- Aggregates shipments to the residential market, which tends to be the least weather-constrained end use, were flat for the first quarter. The outlook for residential construction remains robust across the Company’s geographic footprint, driven by favorable demographics, job growth, land availability and efficient permitting.
Texas ,Florida ,North Carolina ,Georgia ,Colorado andSouth Carolina , key geographies for theBuilding Materials business, comprised six of the top ten states for growth in single-family housing unit starts for the trailing twelve months ended March 2018. The residential market accounted for 24 percent of first-quarter aggregates shipments.
ChemRock/Rail Market
- Aggregates shipments to the ChemRock/Rail market declined 11 percent. Reduced ballast shipments reflect weather constraints and the timing of certain purchases by
East Coast railroads in the prior-year quarter. Additionally, in line with expectations, agricultural lime shipments declined 8 percent, driven by more typical winter precipitation. The ChemRock/Rail market accounted for the remaining 9 percent of first-quarter aggregates shipments.
Aggregates product gross margin was 12.5 percent, consistent with expectations, reflecting reduced operating leverage and increased diesel costs.
Cement
Cement product revenues for the first quarter decreased 4.7 percent as pricing growth of 4.2 percent was offset by an 8.8 percent volume decline. First-quarter shipments reflect abnormal precipitation in February, particularly in
Downstream businesses
Ready mixed concrete shipments decreased 2.3 percent, driven primarily by more typical winter weather in Colorado. Overall, ready mixed concrete prices increased 0.5 percent for the quarter. Average selling prices in
Magnesia Specialties Business
Magnesia Specialties first-quarter products and services revenues increased slightly to a record
Consolidated
The estimated effective income tax rate of 19.7 percent for first quarter 2018 reflects the permanent reduction in the federal corporate tax rate provided for by the Tax Cuts and Jobs Act of 2017 (2017 Tax Act).
Liquidity and Capital Resources
Cash provided by operating activities was
Cash paid for property, plant and equipment additions during the first quarter was
At
In
Bluegrass Acquisition
As previously announced, the Company completed its acquisition of Bluegrass, the largest privately-held, pure-play aggregates business in
Martin Marietta expects to realize annual synergies of approximately
Commitment to Enhance Long-Term Shareholder Value
Martin Marietta is dedicated to disciplined capital allocation that preserves its financial flexibility and further enhances shareholder value. The Company’s capital allocation priorities remain unchanged and include the right acquisitions that promote the successful execution of the Company’s strategic growth plan, organic capital investment, and the return of cash to shareholders through a meaningful and sustainable dividend and share repurchases.
The Company has returned
Outlook for 2018
Martin Marietta remains optimistic about its near-term and long-term outlooks given its continued ability to successfully execute its strategic business plan and the largely positive trends in the markets it serves. The Company expects growth in all three primary construction end-use markets as the current broad-based recovery continues on a steady and extended basis. Notably:
- Infrastructure construction activity should benefit from the funding provided by the FAST Act as state DOTs and contractors address labor constraints and further regulatory reform emerges. Additionally, state and local initiatives that support infrastructure funding, including gas tax increases and other ballot initiatives, continue to gain overwhelming voter support and will play an expanded role in public-sector activity. Third-party forecasts support increased infrastructure spending in 2018, particularly for aggregates-intensive highways and streets.
- Nonresidential construction is expected to increase in both the heavy industrial and commercial sectors for the next several years as supported by third-party forecasts. Management expects new energy-related projects, particularly along the
Gulf Coast , will continue to bid in 2018 with broader construction activity beginning in earnest in 2019 and beyond as permitting and final investment decisions are either made and/or approved.
- Residential construction is expected to continue to grow, particularly in key Martin Marietta markets, driven by employment gains, historically low levels of construction activity over the previous years, low mortgage rates and higher lot development. Residential construction provides an impetus for future infrastructure and nonresidential activity.
2018 Guidance
Management has updated its full-year 2018 guidance to reflect the completion of the Bluegrass acquisition. Absent the impact of the acquired Bluegrass operations, the Company’s full-year 2018 guidance remains unchanged from the guidance provided in
Specifically:
- Heritage aggregates average selling price is expected to increase in a range of 3 percent to 5 percent and shipments by end-use market compared with 2017 levels are as follows:
- Infrastructure shipments to increase in the mid-single digits.
- Nonresidential shipments to increase in the low- to mid-single digits.
- Residential shipments to increase in the high-single digits.
- ChemRock/Rail shipments to remain stable.
2018 GUIDANCE | |||||||
($ and tons in millions, except per ton) | Low * | High * | |||||
Consolidated | |||||||
Total revenues 1 | $ | 4,300 | $ | 4,500 | |||
Products and services revenues | $ | 4,050 | $ | 4,200 | |||
Freight revenues | $ | 250 | $ | 300 | |||
Gross profit | $ | 1,100 | $ | 1,210 | |||
Selling, general and administrative expenses (SG&A) | $ | 275 | $ | 285 | |||
Interest expense | $ | 135 | $ | 140 | |||
Estimated tax rate (excluding discrete events) | 20% | 22% | |||||
Net earnings attributable to Martin Marietta | $ | 525 | $ | 640 | |||
Adjusted EBITDA 2 | $ | 1,150 | $ | 1,270 | |||
Capital expenditures | $ | 450 | $ | 500 | |||
Building Materials Business | |||||||
Aggregates | |||||||
Volume (total tons) 3 | 175 | 180 | |||||
% growth 3 | 11.0% | 14.0% | |||||
Average selling price per ton (ASP) | $ | 13.75 | $ | 14.00 | |||
% growth 4 | 2.0% | 4.0% | |||||
Total revenues | $ | 2,630 | $ | 2,740 | |||
Products and services revenues | $ | 2,415 | $ | 2,475 | |||
Freight revenues | $ | 215 | $ | 265 | |||
Gross profit | $ | 715 | $ | 785 | |||
Cement | |||||||
Total revenues | $ | 415 | $ | 445 | |||
Products and services revenues | $ | 400 | $ | 430 | |||
Freight revenues | $ | 15 | $ | 15 | |||
Gross profit | $ | 140 | $ | 160 | |||
Ready Mixed Concrete and Asphalt and Paving | |||||||
Products and services revenues | $ | 1,370 | $ | 1,445 | |||
Gross profit | $ | 160 | $ | 175 | |||
Magnesia Specialties Business | |||||||
Total revenues | $ | 265 | $ | 270 | |||
Products and services revenues | $ | 245 | $ | 250 | |||
Freight revenues | $ | 20 | $ | 20 | |||
Gross profit | $ | 85 | $ | 90 |
* Guidance range represents the low end and high end of the respective line items provided above.
- 2018 consolidated total revenues exclude
$380 million to $400 million related to estimated interproduct sales. - The 2018 guidance range for Adjusted EBITDA excludes Bluegrass acquisition-related costs. See appendix to this earnings release for a reconciliation of Adjusted EBITDA to net earnings attributable to Martin Marietta.
- Represents 2018 total aggregates volumes, which includes approximately 11.2 million internal tons. Volume growth ranges are in comparison with total volumes of 157.7 million tons reported for the full year 2017, which included 10.9 million internal tons.
- ASP growth range is in comparison with ASP of
$13.46 per ton reported for the full year 2017. The 2% to 4% ASP growth shown above reflects the inclusion of legacy Bluegrass Materials pricing which is below our heritage corporate average.
Non-GAAP Financial Information
This earnings release contains financial measures that have not been prepared in accordance with GAAP. Reconciliations of non-GAAP financial measures to the closest GAAP measure are included in the appendix to this earnings release.
Conference Call Information
The Company will discuss its first-quarter 2018 earnings results on a conference call and an online web simulcast today
About Martin Marietta
Martin Marietta, a member of the
Investor Contact:
Vice President, Investor Relations
(919) 783-4691
Suzanne.Osberg@martinmarietta.com
MLM-E.
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 Company believes in good faith are reasonable but which may be materially different from actual results. These statements, which are forward-looking statements under the Private Securities Litigation Reform Act of 1995, give the investor the Company’s expectations or forecasts of future events. You can identify these statements by the fact that they do not relate only to historical or current facts. They may use words such as “anticipate”, “expect”, “should”, “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.
The Company’s outlook is subject to various risks and uncertainties, and is based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results. Factors that the Company currently believes could cause actual results to differ materially from the forward-looking statements in this press release (including the outlook) include, but are not limited to: the performance of
You should consider these forward-looking statements in light of risk factors discussed in our Annual Report on Form 10-K for the year ended
MARTIN MARIETTA MATERIALS, INC. | ||||||||
Unaudited Statements of Earnings | ||||||||
(In millions, except per share amounts) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2018 | 2017 | |||||||
Products and services revenues | $ | 753.3 | $ | 792.3 | ||||
Freight revenues | 48.7 | 51.6 | ||||||
Total revenues | 802.0 | 843.9 | ||||||
Cost of revenues - products and services | 641.6 | 644.6 | ||||||
Cost of revenues - freight | 50.0 | 52.2 | ||||||
Total cost of revenues | 691.6 | 696.8 | ||||||
Gross Profit | 110.4 | 147.1 | ||||||
Selling general & administrative expenses | 70.1 | 69.5 | ||||||
Acquisition-related expenses | 0.7 | - | ||||||
Other operating expense, net | 0.5 | 0.4 | ||||||
Earnings from operations | 39.1 | 77.2 | ||||||
Interest expense | 35.1 | 20.9 | ||||||
Other nonoperating income, net | (8.5 | ) | (0.5 | ) | ||||
Earnings before income tax expense | 12.5 | 56.8 | ||||||
Income tax expense | 2.5 | 14.5 | ||||||
Consolidated net earnings | 10.0 | 42.3 | ||||||
Less: Net earnings attributable to noncontrolling interests | - | - | ||||||
Net Earnings Attributable to Martin Marietta Materials, Inc. | $ | 10.0 | $ | 42.3 | ||||
Net earnings per common share attributable to common shareholders: | ||||||||
Basic | $ | 0.16 | $ | 0.67 | ||||
Diluted | $ | 0.16 | $ | 0.67 | ||||
Dividends per common share | $ | 0.44 | $ | 0.42 | ||||
Average number of common shares outstanding: | ||||||||
Basic | 63.0 | 63.0 | ||||||
Diluted | 63.2 | 63.3 | ||||||
MARTIN MARIETTA MATERIALS, INC. | ||||||||
Unaudited Financial Highlights | ||||||||
(In millions) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2018 | 2017 | |||||||
Total revenues: | ||||||||
Building Materials Business: | ||||||||
Mid-America Group | $ | 178.8 | $ | 189.0 | ||||
Southeast Group | 80.2 | 90.3 | ||||||
West Group | 473.7 | 496.0 | ||||||
Total Building Materials Business | 732.7 | 775.3 | ||||||
Magnesia Specialties | 69.3 | 68.6 | ||||||
Total | $ | 802.0 | $ | 843.9 | ||||
Gross profit (loss): | ||||||||
Building Materials Business: | ||||||||
Mid-America Group | $ | 18.2 | $ | 26.3 | ||||
Southeast Group | 6.2 | 14.4 | ||||||
West Group | 60.2 | 84.5 | ||||||
Total Building Materials Business | 84.6 | 125.2 | ||||||
Magnesia Specialties | 23.9 | 22.3 | ||||||
Corporate | 1.9 | (0.4 | ) | |||||
Total | $ | 110.4 | $ | 147.1 | ||||
Selling, general and administrative expenses: | ||||||||
Building Materials Business: | ||||||||
Mid-America Group | $ | 13.1 | $ | 13.5 | ||||
Southeast Group | 4.4 | 4.4 | ||||||
West Group | 26.2 | 25.1 | ||||||
Total Building Materials Business | 43.7 | 43.0 | ||||||
Magnesia Specialties | 2.6 | 2.4 | ||||||
Corporate | 23.8 | 24.1 | ||||||
Total | $ | 70.1 | $ | 69.5 | ||||
Earnings (Loss) from operations: | ||||||||
Building Materials Business: | ||||||||
Mid-America Group | $ | 6.2 | $ | 13.4 | ||||
Southeast Group | 2.0 | 10.1 | ||||||
West Group | 35.0 | 61.2 | ||||||
Total Building Materials Business | 43.2 | 84.7 | ||||||
Magnesia Specialties | 21.2 | 19.9 | ||||||
Corporate | (25.3 | ) | (27.4 | ) | ||||
Total | $ | 39.1 | $ | 77.2 | ||||
MARTIN MARIETTA MATERIALS, INC. | ||||||||
Unaudited Financial Highlights (Continued) | ||||||||
(In millions) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2018 | 2017 | |||||||
Total revenues: | ||||||||
Building Materials business products and services: | ||||||||
Aggregates | $ | 425.0 | $ | 451.1 | ||||
Cement | 89.2 | 93.6 | ||||||
Ready Mixed Concrete | 218.5 | 222.3 | ||||||
Asphalt and paving | 16.4 | 21.7 | ||||||
Less: Interproduct sales | (60.7 | ) | (60.7 | ) | ||||
Subtotal | 688.4 | 728.0 | ||||||
Freight | 44.3 | 47.3 | ||||||
Total Building Materials Business | 732.7 | 775.3 | ||||||
Magnesia Specialties business: | ||||||||
Products and services | 64.9 | 64.3 | ||||||
Freight | 4.4 | 4.3 | ||||||
Total Magnesia Specialties Business | 69.3 | 68.6 | ||||||
Consolidated total revenues | $ | 802.0 | $ | 843.9 | ||||
Gross profit (loss): | ||||||||
Building Materials business products and services: | ||||||||
Aggregates | $ | 53.0 | $ | 78.9 | ||||
Cement | 23.7 | 30.8 | ||||||
Ready Mixed Concrete | 15.6 | 19.8 | ||||||
Asphalt and paving | (7.6 | ) | (4.7 | ) | ||||
Subtotal | 84.7 | 124.8 | ||||||
Freight | (0.1 | ) | 0.4 | |||||
Total Building Materials Business | 84.6 | 125.2 | ||||||
Magnesia Specialties business: | ||||||||
Products and services | 25.1 | 23.3 | ||||||
Freight | (1.2 | ) | (1.0 | ) | ||||
Total Magnesia Specialties Business | 23.9 | 22.3 | ||||||
Corporate | 1.9 | (0.4 | ) | |||||
Consolidated gross profit | $ | 110.4 | $ | 147.1 | ||||
MARTIN MARIETTA MATERIALS, INC. | ||||||||||
Balance Sheet Data | ||||||||||
(In millions) | ||||||||||
March 31, | December 31, | March 31, | ||||||||
2018 | 2017 | 2017 | ||||||||
(Unaudited) | (Audited) | (Unaudited) | ||||||||
ASSETS | ||||||||||
Cash and cash equivalents | $ | 1,422.4 | $ | 1,446.4 | $ | 55.4 | ||||
Accounts receivable, net | 466.5 | 487.2 | 479.2 | |||||||
Inventories, net | 606.8 | 600.6 | 537.0 | |||||||
Other current assets | 106.2 | 97.0 | 51.6 | |||||||
Property, plant and equipment, net | 3,582.5 | 3,592.8 | 3,467.6 | |||||||
Intangible assets, net | 2,659.1 | 2,666.6 | 2,667.1 | |||||||
Other noncurrent assets | 104.6 | 101.9 | 135.9 | |||||||
Total assets | $ | 8,948.1 | $ | 8,992.5 | $ | 7,393.8 | ||||
LIABILITIES AND EQUITY | ||||||||||
Current maturities of long-term debt and short-term facilities | $ | 300.0 | $ | 299.9 | $ | 290.0 | ||||
Other current liabilities | 351.0 | 394.3 | 341.6 | |||||||
Long-term debt (excluding current maturities) | 2,728.1 | 2,727.3 | 1,556.2 | |||||||
Other noncurrent liabilities | 889.2 | 888.5 | 1,130.0 | |||||||
Total equity | 4,679.8 | 4,682.5 | 4,076.0 | |||||||
Total liabilities and equity | $ | 8,948.1 | $ | 8,992.5 | $ | 7,393.8 | ||||
MARTIN MARIETTA MATERIALS, INC. | |||||||
Unaudited Statements of Cash Flows | |||||||
(In millions) | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Operating activities: | |||||||
Consolidated net earnings | $ | 10.0 | $ | 42.3 | |||
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 76.8 | 70.4 | |||||
Stock-based compensation expense | 9.8 | 10.3 | |||||
(Gain) Loss on divestitures and sales of assets | (0.9 | ) | 0.1 | ||||
Deferred income taxes | 2.0 | 2.8 | |||||
Other items, net | (2.3 | ) | (0.1 | ) | |||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | |||||||
Accounts receivable, net | 21.0 | (21.3 | ) | ||||
Inventories, net | (8.9 | ) | (15.4 | ) | |||
Accounts payable | 7.9 | 8.5 | |||||
Other assets and liabilities, net | (10.4 | ) | (23.7 | ) | |||
Net cash provided by operating activities | 105.0 | 73.9 | |||||
Investing activities: | |||||||
Additions to property, plant and equipment | (96.3 | ) | (102.1 | ) | |||
Proceeds from divestitures and sales of assets | 2.6 | 0.5 | |||||
Investments in life insurance contracts, net | 0.1 | 0.2 | |||||
Payment of railcar construction advances | (8.4 | ) | (37.0 | ) | |||
Reimbursement of railcar construction advances | 8.4 | 37.0 | |||||
Net cash used for investing activities | (93.6 | ) | (101.4 | ) | |||
Financing activities: | |||||||
Borrowings of long-term debt | - | 205.0 | |||||
Repayments of long-term debt | - | (45.0 | ) | ||||
Payments on capital leases | (0.8 | ) | (0.8 | ) | |||
Debt issue costs | (3.2 | ) | - | ||||
Contributions by noncontrolling interest to joint venture | 0.1 | - | |||||
Repurchases of common stock | - | (100.0 | ) | ||||
Dividends paid | (27.9 | ) | (26.6 | ) | |||
Proceeds from exercise of stock options | 2.8 | 4.0 | |||||
Shares withheld for employees' income tax obligations | (6.4 | ) | (3.7 | ) | |||
Net cash (used for) provided by financing activities | (35.4 | ) | 32.9 | ||||
Net (decrease) increase in cash and cash equivalents | (24.0 | ) | 5.4 | ||||
Cash and cash equivalents, beginning of period | 1,446.4 | 50.0 | |||||
Cash and cash equivalents, end of period | $ | 1,422.4 | $ | 55.4 | |||
MARTIN MARIETTA MATERIALS, INC. | ||||||||
Unaudited Operational Highlights | ||||||||
Three Months Ended | ||||||||
March 31, 2018 | ||||||||
Volume | Pricing | |||||||
Volume/Pricing Variance (1) | ||||||||
Mid-America Group | (9.9%) | 4.9% | ||||||
Southeast Group | (12.4%) | 2.2% | ||||||
West Group | (4.7%) | 0.8% | ||||||
Total Aggregates Product Line (2) | (7.9%) | 2.3% | ||||||
Three Months Ended | ||||||||
March 31, | ||||||||
Shipments (tons in thousands) | 2018 | 2017 | ||||||
Mid-America Group | 11,473 | 12,738 | ||||||
Southeast Group | 4,405 | 5,028 | ||||||
West Group | 14,142 | 14,845 | ||||||
Total Aggregates Product Line (2) | 30,020 | 32,611 | ||||||
(1) Volume/pricing variances reflect the percentage increase (decrease) from the comparable period in the prior year. | ||||||||
(2) Aggregates Product Line includes acquisitions from the date of acquisition and divestitures through the date of disposal. | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2018 | 2017 | |||||||
Shipments (in thousands) | ||||||||
Aggregates tons - external customers | 27,877 | 30,418 | ||||||
Internal aggregates tons used in other product lines | 2,143 | 2,193 | ||||||
Total aggregates tons | 30,020 | 32,611 | ||||||
Cement tons - external customers | 527 | 606 | ||||||
Internal cement tons used in other product lines | 298 | 299 | ||||||
Total Cement tons | 825 | 905 | ||||||
Ready Mixed Concrete - cubic yards | 2,009 | 2,056 | ||||||
Asphalt tons - external customers | 116 | 153 | ||||||
Internal asphalt tons used in road paving business | 76 | 124 | ||||||
Total asphalt tons | 192 | 277 | ||||||
Average unit sales price by product line (including internal sales): | ||||||||
Aggregates (per ton) | $ | 14.04 | $ | 13.73 | ||||
Cement (per ton) | $ | 106.86 | $ | 102.54 | ||||
Ready Mixed Concrete (per cubic yard) | $ | 106.34 | $ | 105.84 | ||||
Asphalt (per ton) | $ | 42.81 | $ | 37.97 | ||||
MARTIN MARIETTA MATERIALS, INC. | |||
Non-GAAP Financial Measures | |||
(Dollars in millions) | |||
The ratio of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing-12 months is a covenant under the Company's revolving credit facility and accounts receivable securitization facility. Under the terms of these agreements, as amended, the Company's ratio of Consolidated Debt-to-Consolidated EBITDA as defined, for the trailing-12 months cannot exceed 3.50 times as of March 31, 2018, with certain exceptions related to qualifying acquisitions, as defined. | |||
The following presents the calculation of Consolidated Debt-to-Consolidated EBITDA, as defined by the Company's Credit Agreement, at March 31, 2018, for the trailing-12 months EBITDA. For supporting calculations, refer to Company's website at www.martinmarietta.com. | |||
Twelve Month Period | |||
April 1, 2017 to | |||
March 31, 2018 | |||
Earnings from continuing operations attributable to Martin Marietta Materials, Inc. | $ | 681.0 | |
Add back: | |||
Interest expense | 105.7 | ||
Depreciation, depletion and amortization expense | 299.8 | ||
Stock-based compensation expense | 29.9 | ||
Acquisition-related expenses | 9.3 | ||
Deduct: | |||
Income tax benefit | (106.5 | ) | |
Interest income | (5.8 | ) | |
Consolidated EBITDA, as defined by the Company's Credit Agreement | $ | 1,013.4 | |
Consolidated Net Debt, as defined and including debt for which the Company is a co-borrower, at March 31, 2018 | $ | 1,643.4 | |
Consolidated Debt-to-Consolidated EBITDA, as defined by the Company's Credit Agreement, | |||
at March 31, 2018, for the trailing-12 months EBITDA | 1.62 times | ||
MARTIN MARIETTA MATERIALS, INC. | |||||
Non-GAAP Financial Measures (Continued) | |||||
(Dollars in millions) | |||||
EBITDA is a widely accepted financial indicator of a company's ability to service and/or incur indebtedness. EBITDA is not defined by generally accepted accounting principles and, as such, should not be construed as an alternative to net earnings or operating cash flow. For further information on EBITDA, refer to the Company's website at www.martinmarietta.com. EBITDA is as follows: | |||||
Three Months Ended | |||||
March 31, | |||||
2018 | 2017 | ||||
Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) | $ | 123.3 | $ | 147.7 | |
A Reconciliation of Net Earnings Attributable to Martin Marietta to EBITDA is as follows: | |||||
Three Months Ended | |||||
March 31, | |||||
2018 | 2017 | ||||
Net Earnings Attributable to Martin Marietta | $ | 10.0 | $ | 42.3 | |
Add back: | |||||
Interest Expense | 35.1 | 20.9 | |||
Income Tax Expense for Controlling Interests | 2.5 | 14.5 | |||
Depreciation, Depletion and Amortization Expense | 75.7 | 70.0 | |||
EBITDA | $ | 123.3 | $ | 147.7 | |
A reconciliation of Net Earnings Attributable to Martin Marietta to the midpoint of the range for Adjusted EBITDA included in the | |||||
full-year 2018 outlook is as follows: | |||||
Net Earnings Attributable to Martin Marietta | $ | 567.5 | |||
Add back: | |||||
Interest Expense | 137.5 | ||||
Income Tax Expense for Controlling Interests | 155.0 | ||||
Depreciation, Depletion and Amortization Expense | 335.0 | ||||
EBITDA | $ | 1,195.0 | |||
Add back: | |||||
Bluegrass acquisition-related expenses, net | 15.0 | ||||
Adjusted EBTIDA | $ | 1,210.0 | |||
Source: Martin Marietta Materials, Inc.