UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
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Securities Exchange Act of 1934
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter). Emerging growth company
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Securities registered pursuant to Section 12(b) of the Act:
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Item 2.02 |
Results of Operations and Financial Condition. |
On October 29, 2019, the Company announced financial results for the third quarter ended September 30, 2019. The press release, dated October 29, 2019, is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.
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Item 7.01 |
Regulation FD Disclosure. |
On October 29, 2019, the Company announced financial results for the third quarter ended September 30, 2019. The press release, dated October 29, 2019, is furnished as Exhibit 99.1 to this report and is incorporated by reference herein. Additional information about the quarter, and the Company’s use of non-GAAP financial measures, which is available on the Company’s website at www.martinmarietta.com by clicking the heading “Financials”, in the “Investors” section and then clicking the quick link “Non-GAAP Financial Measures”.
The Company will host an online web simulcast of its third-quarter 2019 earnings conference call on Tuesday, October 29, 2019. The live broadcast of the Company’s conference call will begin at 11:00 a.m., Eastern Time, on October 29, 2019. An online replay will be available approximately two hours following the conclusion of the live broadcast and will continue for one year. A link to these events will be available at the Company’s website 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 4498534. Additional information about the Company’s use of non-GAAP financial measures, as well as certain other financial or statistical information the Company may present at the conference call, will be provided on the Company’s website.
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Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
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Press Release dated October 29, 2019, announcing financial results for the third quarter ended September 30, 2019. |
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
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.
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MARTIN MARIETTA MATERIALS, INC. |
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(Registrant) |
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Date: October 29, 2019 |
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By: |
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/s/ James A. J. Nickolas |
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James A. J. Nickolas, |
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Sr. Vice President and Chief Financial Officer |
Exhibit 99.1
MARTIN MARIETTA REPORTS THIRD QUARTER 2019 RESULTS
COMPANY ESTABLISHES NEW RECORDS FOR REVENUES AND PROFITS
Shipments and Pricing Strength Widespread Across Majority of Building Materials Business;
Aggregates Shipments Up 12 Percent and Pricing Increased 5 Percent
Magnesia Specialties Product Gross Margin Improved 120 Basis Points
Consolidated Gross Margin Expanded 390 Basis Points
Company Raises Full-Year 2019 Guidance
RALEIGH, N.C. (October 29, 2019) – Martin Marietta Materials, Inc. (NYSE:MLM) today reported results for the third quarter ended September 30, 2019.
Highlights include:
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Quarter Ended September 30, |
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2019 |
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2018 |
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Total revenues 1 |
$ |
1,420,246 |
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$ |
1,219,640 |
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Products and services revenues 2 |
$ |
1,323,160 |
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$ |
1,142,218 |
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Building Materials business |
$ |
1,263,826 |
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$ |
1,073,853 |
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Magnesia Specialties business |
$ |
59,334 |
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$ |
68,365 |
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Gross profit |
$ |
420,645 |
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$ |
312,984 |
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Adjusted gross profit 3 |
$ |
420,645 |
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$ |
321,333 |
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Earnings from operations |
$ |
345,263 |
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$ |
240,662 |
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Adjusted earnings from operations 4 |
$ |
345,263 |
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$ |
256,213 |
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Net earnings attributable to Martin Marietta |
$ |
248,573 |
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$ |
180,221 |
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Adjusted EBITDA 5 |
$ |
439,071 |
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$ |
344,636 |
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Earnings per diluted share 6 |
$ |
3.96 |
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$ |
2.85 |
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1 |
Total revenues include the sales of products and services to customers (net of any discounts or allowances) and freight revenues. |
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2 |
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. |
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3 |
2018 third-quarter adjusted gross profit excludes an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting. See Appendix to this earnings release for a reconciliation to reported gross profit under generally accepted accounting principles (GAAP). |
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4 |
2018 third-quarter adjusted earnings from operations exclude an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting, acquisition-related expenses, net, and an asset and portfolio rationalization charge. See Appendix to this earnings release for a reconciliation to reported earnings from operations under GAAP. |
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5 |
Adjusted EBITDA is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings attributable to Martin Marietta. |
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6 |
2018 third-quarter earnings per diluted share includes a charge of $0.10 per diluted share for the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting, a charge of $0.01 per diluted share for acquisition-related expenses, net, and a charge of $0.09 per diluted share for an asset and portfolio rationalization charge. |
- MORE -
Ward Nye, Chairman, President and CEO of Martin Marietta, stated, “Building on our strong momentum in the first half of the year, we once again delivered exceptional performance, establishing new quarterly records for revenues, gross profit, adjusted EBITDA and earnings per diluted share. These record-setting third-quarter results, driven by broad-based improvements in shipments, pricing and profitability across the majority of our Building Materials business, reflect the disciplined execution of our strategic plan and our team’s unrelenting commitment to operational excellence. Based on recent trends and our solid performance to date, we are raising our outlook for the remainder of 2019.
“We have carefully positioned our business, geographically and otherwise, to capitalize on attractive market fundamentals that support sustainable and long-term construction growth, including employment gains, positive demographic trends and superior state fiscal health. Our third-quarter performance, including double-digit-growth in both aggregates and cement shipments, as well as solid volume growth in our downstream products, demonstrates Martin Marietta’s ability to take advantage of robust underlying demand and the meaningful acceleration of infrastructure construction projects in our key states. These favorable dynamics, combined with the benefits of our locally-driven pricing strategy, underscore the comparative strength of our markets and bode well for continued construction gains. With increased infrastructure activity as a result of state and local transportation funding initiatives, and continued private-sector strength, we are confident that construction activity in our Top 10 states will continue growing and outpacing the nation as a whole.”
Mr. Nye concluded, “In 25 years as a public company, Martin Marietta has thoughtfully developed and consistently executed on its strategic plans, positioning our business as an aggregates leader in attractive high-growth geographies, aligning our product offerings to leverage strategic cement and targeted downstream opportunities and responsibly allocating capital while maintaining financial flexibility. This steadfast and proven strategy, together with our commitment to the world-class attributes of our business – including, safety, ethics, cost discipline and operational excellence – underpins our confidence in Martin Marietta’s outlook for continued profitable growth and enhanced shareholder value creation.”
- MORE -
Third-Quarter Operating Results
(All comparisons are versus the prior-year quarter unless noted otherwise)
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Quarter ended September 30, 2019 |
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($ in thousands) |
Revenues |
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Gross profit (loss) |
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Gross margin |
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Building Materials business: |
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Products and services: |
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Aggregates |
$ |
818,693 |
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$ |
287,024 |
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35.1 |
% |
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Cement |
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119,609 |
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48,519 |
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40.6 |
% |
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Ready mixed concrete |
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271,844 |
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28,948 |
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10.6 |
% |
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Asphalt and paving |
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131,099 |
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31,102 |
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23.7 |
% |
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Less: interproduct revenues |
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(77,419 |
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- |
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- |
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Products and services |
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1,263,826 |
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395,593 |
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31.3 |
% |
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Freight |
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91,543 |
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317 |
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NM |
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Total Building Materials business |
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1,355,369 |
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395,910 |
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29.2 |
% |
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Magnesia Specialties business: |
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Products and services |
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59,334 |
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23,997 |
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40.4 |
% |
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Freight |
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5,543 |
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(987 |
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NM |
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Total Magnesia Specialties business |
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64,877 |
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23,010 |
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35.5 |
% |
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Corporate |
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- |
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1,725 |
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NM |
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Total |
$ |
1,420,246 |
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$ |
420,645 |
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29.6 |
% |
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Quarter ended September 30, 2018 |
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($ in thousands) |
Revenues |
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Gross profit (loss) |
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Gross margin |
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Building Materials business: |
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Products and services: |
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Aggregates |
$ |
691,822 |
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$ |
209,666 |
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30.3 |
% |
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Cement |
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98,223 |
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32,543 |
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33.1 |
% |
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Ready mixed concrete |
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254,686 |
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20,632 |
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8.1 |
% |
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Asphalt and paving |
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95,961 |
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25,022 |
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26.1 |
% |
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Less: interproduct revenues |
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(66,839 |
) |
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- |
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- |
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Products and services |
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1,073,853 |
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287,863 |
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26.8 |
% |
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Freight |
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72,264 |
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(47 |
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NM |
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Total Building Materials business |
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1,146,117 |
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287,816 |
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25.1 |
% |
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Magnesia Specialties business: |
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Products and services |
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68,365 |
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26,823 |
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39.2 |
% |
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Freight |
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5,158 |
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(1,076 |
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NM |
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Total Magnesia Specialties business |
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73,523 |
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25,747 |
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35.0 |
% |
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Corporate |
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- |
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(579 |
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NM |
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Total |
$ |
1,219,640 |
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$ |
312,984 |
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25.7 |
% |
- MORE -
Third-quarter operating results demonstrate the strength and breadth of overall demand across the Company’s geographic footprint and product lines, notwithstanding the favorable comparison from a weather-challenged prior-year quarter. Aggregates, cement and downstream operations in Texas and Colorado, the Company’s two largest states by revenues, also benefited from weather-deferred projects from earlier in the year.
Aggregates
Third-quarter aggregates shipments and pricing improved 12.4 percent and 5.3 percent, respectively.
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♦ |
Shipments for the Mid-America Group operations increased 14.0 percent, reflecting attractive market fundamentals that have bolstered continued infrastructure and commercial construction activity. Pricing improved 3.5 percent. |
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♦ |
Shipments for the Southeast Group operations increased 0.8 percent following double-digit-growth in the prior-year quarter. Volume growth was muted by the impact of Hurricane Dorian, as well as the delayed timing of projects in the region. Pricing improved 5.7 percent, reflecting the strength of the North Georgia and Florida markets. |
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♦ |
West Group shipments increased 14.8 percent, driven by energy-related projects along the Gulf Coast, increasing commercial activity in Colorado, and improved weather that allowed customers to advance weather-deferred projects. Pricing growth of 9.2 percent reflected favorable geographic and product mix. |
Martin Marietta’s third-quarter aggregates shipments by end use are as follows (all comparisons are versus the prior-year quarter):
Infrastructure Market
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♦ |
Aggregates shipments to the infrastructure market increased 7 percent. As expected, transportation-related projects accelerated during the quarter, supported by funding provided by the Fixing America’s Surface Transportation Act (FAST Act) and numerous state and local transportation initiatives and continued reconstruction efforts following flooding in the Midwest. For the quarter, the infrastructure market represented 38 percent of aggregates shipments, which is below the Company’s most recent ten-year average of 46 percent. |
Nonresidential Market
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♦ |
Aggregates shipments to the nonresidential market increased 19 percent, driven by gains in commercial and heavy industrial construction activity. The Company continued to benefit from distribution center, warehouse, data center and wind energy projects in key geographies, including Texas, the Carolinas, Iowa and Maryland, as well as the early phases of several large energy-sector projects along the Gulf Coast. The nonresidential market represented 34 percent of third-quarter aggregates shipments. |
- MORE -
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♦ |
Aggregates shipments to the residential market increased 16 percent, driven by continued homebuilding activity in states such as Texas, Colorado, the Carolinas, Georgia and Florida. The residential construction outlook across the Company’s geographic footprint remains positive for both single- and multi-family housing, driven by favorable demographics, job growth, land availability, low interest rates and efficient permitting. On a national level, housing starts remain below the 50-year annual average of 1.5 million despite notable population gains. The residential market accounted for 22 percent of third-quarter aggregates shipments. |
ChemRock/Rail Market
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♦ |
The ChemRock/Rail market accounted for the remaining 6 percent of third-quarter aggregates shipments. Volumes to this end use increased 4 percent, driven by improved ballast shipments as the western Class 1 railroads continued to address repairs from the Midwest flooding earlier in the year. |
Aggregates product gross margin expanded 480 basis points to 35.1 percent, reflecting pricing gains, improved operating leverage from increased shipment and production levels and the absence of the $8.3 million negative impact of selling acquired inventory after its markup to fair value as part of acquisition accounting incurred in 2018 as part of the Company’s purchase of Bluegrass Materials.
Cement
Third-quarter cement shipments increased 20.6 percent, driven by strong underlying Texas demand and weather-deferred projects from second-quarter 2019. Unfavorable product mix constrained pricing growth to 1.6 percent. Production efficiencies from increased shipment and production levels, coupled with lower maintenance costs, contributed to the 750-basis-point improvement in product gross margin to 40.6 percent.
Downstream businesses
Ready mixed concrete shipments increased 9.0 percent and benefitted from healthy demand environments in Texas and Colorado and weather-impacted carryover projects. Ready mixed concrete selling prices declined 2.2 percent, reflecting unfavorable product mix. Colorado asphalt shipments increased 34.1 percent while pricing improved 3.3 percent.
Magnesia Specialties Business
Magnesia Specialties product revenues decreased 13.2 percent to $59.3 million as international chemicals and domestic lime customers rationalized inventory levels. Despite lower revenues, product gross margin improved 120 basis points to 40.4 percent driven by lower costs for contract services and supplies and enhanced cost control measures.
Consolidated
Other operating expenses, net, for the prior-year quarter included a $7.1 million asset and portfolio rationalization charge related to the Company’s Southwest ready mixed concrete business.
- MORE -
Liquidity and Capital Resources
Cash provided by operating activities for the nine months ended September 30 was $649.8 million in 2019 compared with $441.5 million in 2018, driven by growth in earnings before noncash expenses and lower contributions to the Company’s pension plan partially offset by higher working capital related to increased revenues.
Cash paid for property, plant and equipment additions for the nine months ended September 30, 2019 was $283.0 million. The Company expects capital expenditures to range from $375 million to $400 million for the full year.
At September 30, 2019, the Company’s ratio of consolidated net debt-to-consolidated EBITDA, as defined in the applicable credit agreement, for the trailing twelve months was 2.3 times.
Commitment to Enhance Long-Term Shareholder Value
Martin Marietta is dedicated to disciplined capital allocation that preserves the Company’s financial flexibility and further enhances shareholder value. The Company’s capital allocation priorities remain unchanged and include value-enhancing acquisitions that promote the successful execution of the Company’s strategic growth plan, organic capital investment, and the return of cash to shareholders through meaningful and sustainable dividends and share repurchases.
The Company has returned $1.5 billion to shareholders in the form of dividend payments and share repurchases since announcing a 20 million share repurchase authorization in February 2015. In August 2019, the Board of Directors approved a 15-percent-increase in the quarterly cash dividend, one of the largest increases in the Company’s history. Additionally, during third-quarter 2019, the Company repurchased 29,200 shares of common stock pursuant to its share repurchase authorization. As of September 30, 2019, 13.9 million shares remained under the current repurchase authorization and 62.5 million shares of Martin Marietta common stock were outstanding.
Full-Year 2019 Outlook
Based on current trends and expectations, management has raised its full-year 2019 guidance. Specifically:
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♦ |
Aggregates shipments by end-use market compared with 2018 levels are as follows: |
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Infrastructure shipments to increase in the high-single digits. |
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• |
Nonresidential shipments to experience a double-digit increase. |
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• |
Residential shipments to experience a double-digit increase. |
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• |
ChemRock/Rail shipments to be up slightly. |
- MORE -
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2019 GUIDANCE |
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($ and tons in thousands, except per ton) |
Low * |
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High * |
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Consolidated |
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Total revenues 1 |
$ |
4,660,000 |
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$ |
4,770,000 |
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Products and services revenues |
$ |
4,360,000 |
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$ |
4,460,000 |
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Freight revenues |
$ |
300,000 |
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$ |
310,000 |
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Gross profit |
$ |
1,175,000 |
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$ |
1,230,000 |
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Selling, general and administrative expenses (SG&A) |
$ |
300,000 |
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$ |
305,000 |
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Interest expense |
$ |
130,000 |
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$ |
135,000 |
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Estimated tax rate (excluding discrete events) |
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20 |
% |
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20 |
% |
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Net earnings attributable to Martin Marietta |
$ |
585,000 |
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$ |
635,000 |
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Adjusted EBITDA 2 |
$ |
1,245,000 |
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$ |
1,305,000 |
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Capital expenditures |
$ |
375,000 |
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$ |
400,000 |
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Building Materials Business |
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Aggregates |
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Volume (total tons) 3 |
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190,000 |
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191,000 |
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% growth 3 |
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11.0 |
% |
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12.0 |
% |
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Average selling price per ton (ASP) |
$ |
14.27 |
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$ |
14.40 |
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% growth 4 |
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4.0 |
% |
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5.0 |
% |
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Total revenues |
$ |
2,980,000 |
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$ |
3,020,000 |
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Products and services revenues |
$ |
2,720,000 |
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$ |
2,750,000 |
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Freight revenues |
$ |
260,000 |
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$ |
270,000 |
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Gross profit |
$ |
820,000 |
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$ |
840,000 |
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Cement |
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Total revenues |
$ |
435,000 |
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$ |
465,000 |
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Products and services revenues |
$ |
415,000 |
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$ |
445,000 |
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Freight revenues |
$ |
20,000 |
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$ |
20,000 |
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Gross profit |
$ |
135,000 |
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$ |
155,000 |
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Ready Mixed Concrete and Asphalt and Paving |
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Products and services revenues |
$ |
1,245,000 |
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$ |
1,275,000 |
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Gross profit |
$ |
130,000 |
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$ |
140,000 |
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Magnesia Specialties Business |
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Total revenues |
$ |
290,000 |
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$ |
300,000 |
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Products and services revenues |
$ |
250,000 |
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$ |
260,000 |
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Freight revenues |
$ |
20,000 |
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$ |
20,000 |
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Gross profit |
$ |
90,000 |
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$ |
95,000 |
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* Guidance range represents the low end and high end of the respective line items provided above.
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1 |
2019 consolidated total revenues exclude $270 million related to estimated interproduct sales. |
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2 |
Adjusted EBITDA is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings attributable to Martin Marietta. |
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3 |
Represents total aggregates volumes, which includes approximately 10.0 million internal tons. Volume growth ranges are in comparison with total volumes of 170.8 million tons for the full year 2018, which included 10.6 million internal tons. |
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4 |
ASP growth range is in comparison with ASP of $13.71 per ton for the full year 2018. |
- MORE -
Based on a preliminary view of 2020, management currently anticipates low-to-mid-single-digit growth in aggregates shipments and mid-single-digit growth in aggregates pricing. Martin Marietta’s geographic footprint has attractive underlying market fundamentals, including notable employment gains, population growth and superior state fiscal health, that should promote steady and sustainable construction growth over the near- and medium-terms. Supported by region-specific third-party forecasts and underlying demand trends, Martin Marietta believes the current construction cycle will continue for the foreseeable future and expand at a steady pace in 2020 for each of its three primary construction end-use markets. Notably:
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♦ |
Infrastructure construction, particularly for aggregates-intensive highways and streets, should continue to benefit from the acceleration in state lettings and contract awards in key Martin Marietta states, continued FAST Act funding, and regulatory reform that allows for reduced permitting time for large projects. Management believes that federal transportation funding will continue, at a minimum, at status quo levels absent the prospective passage of a successor infrastructure bill prior to the FAST Act’s September 2020 expiration. This should provide the necessary confidence and visibility for states to continue to advance planned and future construction projects. Importantly, states will continue to play an expanded role in infrastructure investment. Incremental funding at the state and local levels, through bond issuances, toll roads and tax initiatives, should grow at faster near-term rates than federal funding. Martin Marietta’s top ten states – Texas, Colorado, North Carolina, Georgia, Iowa, Florida, South Carolina, Indiana, Maryland and Nebraska – accounted for 85 percent of total Building Materials’ revenues in 2018 and have all introduced incremental transportation funding measures within the last five years. Third-party forecasts also predict increased infrastructure investment in 2020 and beyond. |
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|
♦ |
Residential construction should continue to grow within Martin Marietta’s geographic footprint, particularly as mortgage rates remain attractive and homebuilders address the need for more affordable homes. The Company’s leading positions in southeastern and southwestern states offer superior opportunities, such as available land, an overall business-friendly environment and fewer regulatory barriers, for gains in both multi- and single-family housing. The Company believes that permits represent the best indicator of future housing construction. Martin Marietta’s top ten states significantly outpaced the nation in housing unit permit growth for the trailing twelve months ended September 2019 for both multi-family and single-family. Continued strength in residential construction supports future infrastructure and nonresidential activity. |
- MORE -
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 accompanying Appendix to this earnings release. Management believes these non-GAAP measures are commonly used financial measures for investors to evaluate the Company’s operating performance, and when read in conjunction with the Company’s consolidated financial statements, present a useful tool to evaluate the Company’s ongoing operations, performance from period to period and anticipated performance. In addition, these are some of the factors the Company uses in internal evaluations of the overall performance of its businesses. Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.
Conference Call Information
The Company will discuss its third-quarter 2019 earnings results on a conference call and an online web simulcast today (October 29, 2019). The live broadcast of the Martin Marietta conference call will begin at 11:00 a.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 Company’s website. Additionally, the Company has posted supplemental information related to its third-quarter performance on its website. For those investors without online web access, the conference call may also be accessed by calling (970) 315-0423, confirmation number 4498534.
About Martin Marietta
Martin Marietta, a member of the S&P 500 Index, is an American-based company and a leading supplier of building materials, including aggregates, cement, ready mixed concrete and asphalt. Through a network of operations spanning 27 states, Canada and The Bahamas, dedicated Martin Marietta teams supply the resources necessary for building the solid foundations on which our communities thrive. Martin Marietta’s Magnesia Specialties business provides a full range of magnesium oxide, magnesium hydroxide and dolomitic lime products. For more information, visit www.martinmarietta.com or www.magnesiaspecialties.com
Investor Contact:
Suzanne Osberg
Vice President, Investor Relations
(919) 783-4691
Suzanne.Osberg@martinmarietta.com
MLM-E.
- MORE -
If you are interested in Martin Marietta Materials, Inc. stock, management recommends that, at a minimum, you read the Company’s current annual report and Forms 10-K, 10-Q and 8-K reports to the Securities and Exchange Commission (SEC) over the past year. The Company’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 Company’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 Company’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 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 the United States economy; shipment declines resulting from economic events beyond the Company’s control; a widespread decline in aggregates pricing, including a decline in aggregates volume negatively affecting aggregates price; the history of both cement and ready mixed concrete being subject to significant changes in supply, demand and price fluctuations; the termination, capping and/or reduction or suspension of the federal and/or state gasoline tax(es) or other revenue related to infrastructure construction; the level and timing of federal, state or local transportation or infrastructure projects funding, most particularly in Texas, Colorado, North Carolina, Georgia, Iowa and Maryland; the United States Congress’ inability to reach agreement among themselves or with the current Administration on policy issues that impact the federal budget; 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 Company serves; a reduction in defense spending and the subsequent impact on construction activity on or near military bases; a decline in the commercial component of the nonresidential construction market, notably office and retail space; a decline in energy-related construction activity resulting from a sustained period of low global oil prices or changes in oil production patterns in response to this decline, particularly in Texas; a slowdown in residential construction recovery; unfavorable weather conditions, particularly Atlantic Ocean and Gulf Coast hurricane activity, the late start to spring or the early onset of winter and the impact of a drought or excessive rainfall in the markets served by the Company, any of which can significantly affect production schedules, volumes, product and/or geographic mix and profitability; the volatility of fuel costs, particularly diesel fuel, and the impact on the cost, or the availability generally, of other consumables, namely steel, explosives, tires and conveyor belts, and with respect to the Company’s Magnesia Specialties business, natural gas; continued increases in the cost of other repair and supply parts; construction labor shortages and/or supply‐chain challenges; unexpected equipment failures, unscheduled maintenance, industrial accident or other prolonged and/or significant disruption to production facilities; increasing governmental regulation, including environmental laws; transportation availability or a sustained reduction in capital investment by the railroads, notably the availability of railcars, locomotive power and the condition of rail infrastructure to move trains to supply the Company’s Texas, Colorado, Florida, North Carolina and the Gulf Coast markets, including the movement of essential dolomitic lime for magnesia chemicals to the Company’s plant in Manistee, Michigan and its customers; increased transportation costs, including increases from higher or fluctuating passed-through energy costs or fuel surcharges, and other costs to comply with tightening regulations, as well as higher volumes of rail and water shipments; availability of trucks and licensed drivers for transport of the Company’s materials; availability and cost of construction equipment in the United States; weakening in the steel industry markets served by the Company’s dolomitic lime products; a trade dispute with one or more nations impacting the U.S. economy, including the impact of tariffs on the steel industry; unplanned changes in costs or realignment of customers that introduce volatility to earnings, including that of the Magnesia Specialties business that is running at capacity; proper functioning of information technology and automated operating systems to manage or support operations; inflation and its effect on both production and interest costs; the concentration of customers in construction markets and the increased risk of potential losses on customer receivables; the impact of the level of demand in the Company’s end-use markets, production levels and management of production costs on the operating leverage and therefore profitability of the Company; the possibility that the expected synergies from acquisitions will not be realized or will not be realized within the expected time period, including achieving anticipated profitability to maintain compliance with the Company’s leverage ratio debt covenant; changes in tax laws, the interpretation of such laws and/or administrative practices that would increase the Company’s tax rate; violation of the Company’s debt covenant if price and/or volumes return to previous levels of instability; continued downward pressure on the Company’s common stock price and its impact on goodwill impairment evaluations; the possibility of a reduction of the Company’s credit rating to non-investment grade; and other risk factors listed from time to time found in the Company’s filings with the SEC.
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 December 31, 2018 and other periodic filings made with the SEC. All of our forward-looking statements should be considered in light of these factors. In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of our forward-looking statements, or adversely affect or be material to the Company. The Company assumes no obligation to update any such forward-looking statements.
- MORE -
Appendix
|
MARTIN MARIETTA MATERIALS, INC. |
|
|||||||||||||||
|
Unaudited Statements of Earnings |
|
|||||||||||||||
|
(In thousands, except per share amounts) |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
Products and services revenues |
|
$ |
1,323,160 |
|
|
$ |
1,142,218 |
|
|
$ |
3,397,599 |
|
|
$ |
3,024,300 |
|
|
Freight revenues |
|
|
97,086 |
|
|
|
77,422 |
|
|
|
241,069 |
|
|
|
199,747 |
|
|
Total revenues |
|
|
1,420,246 |
|
|
|
1,219,640 |
|
|
|
3,638,668 |
|
|
|
3,224,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues - products and services |
|
|
901,844 |
|
|
|
828,110 |
|
|
|
2,474,333 |
|
|
|
2,282,159 |
|
|
Cost of revenues - freight |
|
|
97,757 |
|
|
|
78,546 |
|
|
|
243,917 |
|
|
|
202,595 |
|
|
Total cost of revenues |
|
|
999,601 |
|
|
|
906,656 |
|
|
|
2,718,250 |
|
|
|
2,484,754 |
|
|
Gross Profit |
|
|
420,645 |
|
|
|
312,984 |
|
|
|
920,418 |
|
|
|
739,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling general & administrative expenses |
|
|
78,281 |
|
|
|
68,441 |
|
|
|
228,955 |
|
|
|
209,632 |
|
|
Acquisition-related expenses, net |
|
|
- |
|
|
|
89 |
|
|
|
190 |
|
|
|
12,925 |
|
|
Other operating (income) and expense, net |
|
|
(2,899 |
) |
|
|
3,792 |
|
|
|
(9,092 |
) |
|
|
(26,960 |
) |
|
Earnings from operations |
|
|
345,263 |
|
|
|
240,662 |
|
|
|
700,365 |
|
|
|
543,696 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
32,436 |
|
|
|
35,468 |
|
|
|
98,680 |
|
|
|
103,526 |
|
|
Other nonoperating (income) and expense, net |
|
|
(1,973 |
) |
|
|
(4,248 |
) |
|
|
9,690 |
|
|
|
(19,873 |
) |
|
Earnings before income tax expense |
|
|
314,800 |
|
|
|
209,442 |
|
|
|
591,995 |
|
|
|
460,043 |
|
|
Income tax expense |
|
|
66,178 |
|
|
|
29,089 |
|
|
|
111,077 |
|
|
|
84,147 |
|
|
Consolidated net earnings |
|
|
248,622 |
|
|
|
180,353 |
|
|
|
480,918 |
|
|
|
375,896 |
|
|
Less: Net earnings attributable to noncontrolling interests |
|
|
49 |
|
|
|
132 |
|
|
|
17 |
|
|
|
275 |
|
|
Net Earnings Attributable to Martin Marietta Materials, Inc. |
|
$ |
248,573 |
|
|
$ |
180,221 |
|
|
$ |
480,901 |
|
|
$ |
375,621 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share attributable to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
3.97 |
|
|
$ |
2.86 |
|
|
$ |
7.67 |
|
|
$ |
5.95 |
|
|
Diluted |
|
$ |
3.96 |
|
|
$ |
2.85 |
|
|
$ |
7.65 |
|
|
$ |
5.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common share |
|
$ |
0.55 |
|
|
$ |
0.48 |
|
|
$ |
1.51 |
|
|
$ |
1.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
62,510 |
|
|
|
62,932 |
|
|
|
62,552 |
|
|
|
62,970 |
|
|
Diluted |
|
|
62,679 |
|
|
|
63,167 |
|
|
|
62,725 |
|
|
|
63,224 |
|
- MORE -
Appendix
|
MARTIN MARIETTA MATERIALS, INC. |
|
||||||||||||||||||||||||||||||
|
Unaudited Financial Highlights |
|
||||||||||||||||||||||||||||||
|
(In thousands) |
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|||||||||||||||||||||||||
|
|
|
September 30, |
|
|
September 30, |
|
|||||||||||||||||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||||||||||||||
|
Total revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Building Materials Business: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Mid-America Group |
|
$ |
448,758 |
|
|
$ |
377,005 |
|
|
$ |
1,112,897 |
|
|
$ |
906,377 |
|
|||||||||||||||
|
Southeast Group |
|
|
134,138 |
|
|
|
125,547 |
|
|
|
390,399 |
|
|
|
318,749 |
|
|||||||||||||||
|
West Group |
|
|
772,473 |
|
|
|
643,565 |
|
|
|
1,920,182 |
|
|
|
1,783,174 |
|
|||||||||||||||
|
Total Building Materials Business |
|
|
1,355,369 |
|
|
|
1,146,117 |
|
|
|
3,423,478 |
|
|
|
3,008,300 |
|
|||||||||||||||
|
Magnesia Specialties |
|
|
64,877 |
|
|
|
73,523 |
|
|
|
215,190 |
|
|
|
215,747 |
|
|||||||||||||||
|
Total |
|
$ |
1,420,246 |
|
|
$ |
1,219,640 |
|
|
$ |
3,638,668 |
|
|
$ |
3,224,047 |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Gross profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Building Materials Business: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Mid-America Group |
|
$ |
174,370 |
|
|
$ |
131,331 |
|
|
$ |
375,376 |
|
|
$ |
270,461 |
|
|||||||||||||||
|
Southeast Group |
|
|
36,768 |
|
|
|
30,783 |
|
|
|
100,773 |
|
|
|
56,933 |
|
|||||||||||||||
|
West Group |
|
|
184,772 |
|
|
|
125,702 |
|
|
|
366,233 |
|
|
|
333,949 |
|
|||||||||||||||
|
Total Building Materials Business |
|
|
395,910 |
|
|
|
287,816 |
|
|
|
842,382 |
|
|
|
661,343 |
|
|||||||||||||||
|
Magnesia Specialties |
|
|
23,010 |
|
|
|
25,747 |
|
|
|
76,590 |
|
|
|
73,476 |
|
|||||||||||||||
|
Corporate |
|
|
1,725 |
|
|
|
(579 |
) |
|
|
1,446 |
|
|
|
4,474 |
|
|||||||||||||||
|
Total |
|
$ |
420,645 |
|
|
$ |
312,984 |
|
|
$ |
920,418 |
|
|
$ |
739,293 |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Selling, general and administrative expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Building Materials Business: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Mid-America Group |
|
$ |
16,023 |
|
|
$ |
14,113 |
|
|
$ |
47,158 |
|
|
$ |
41,260 |
|
|||||||||||||||
|
Southeast Group |
|
|
5,287 |
|
|
|
4,440 |
|
|
|
16,040 |
|
|
|
13,689 |
|
|||||||||||||||
|
West Group |
|
|
29,285 |
|
|
|
26,600 |
|
|
|
86,280 |
|
|
|
79,892 |
|
|||||||||||||||
|
Total Building Materials Business |
|
|
50,595 |
|
|
|
45,153 |
|
|
|
149,478 |
|
|
|
134,841 |
|
|||||||||||||||
|
Magnesia Specialties |
|
|
2,856 |
|
|
|
2,404 |
|
|
|
8,518 |
|
|
|
7,512 |
|
|||||||||||||||
|
Corporate |
|
|
24,830 |
|
|
|
20,884 |
|
|
|
70,959 |
|
|
|
67,279 |
|
|||||||||||||||
|
Total |
|
$ |
78,281 |
|
|
$ |
68,441 |
|
|
$ |
228,955 |
|
|
$ |
209,632 |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Earnings (Loss) from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Building Materials Business: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Mid-America Group |
|
$ |
159,711 |
|
|
$ |
120,344 |
|
|
$ |
332,344 |
|
|
$ |
235,221 |
|
|||||||||||||||
|
Southeast Group |
|
|
31,463 |
|
|
|
26,372 |
|
|
|
85,285 |
|
|
|
60,464 |
|
|||||||||||||||
|
West Group |
|
|
156,382 |
|
|
|
92,090 |
|
|
|
286,540 |
|
|
|
249,885 |
|
|||||||||||||||
|
Total Building Materials Business |
|
|
347,556 |
|
|
|
238,806 |
|
|
|
704,169 |
|
|
|
545,570 |
|
|||||||||||||||
|
Magnesia Specialties |
|
|
20,097 |
|
|
|
23,301 |
|
|
|
67,959 |
|
|
|
65,867 |
|
|||||||||||||||
|
Corporate |
|
|
(22,390 |
) |
|
|
(21,445 |
) |
|
|
(71,763 |
) |
|
|
(67,741 |
) |
|||||||||||||||
|
Total |
|
$ |
345,263 |
|
|
$ |
240,662 |
|
|
$ |
700,365 |
|
|
$ |
543,696 |
|
|||||||||||||||
- MORE -
Appendix
|
|
|||||||||||||||||||||||||||||||
|
Unaudited Financial Highlights (Continued) |
|
||||||||||||||||||||||||||||||
|
(In thousands) |
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|||||||||||||||||||||||||
|
|
|
September 30, |
|
|
September 30, |
|
|||||||||||||||||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||||||||||||||
|
Total revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Building Materials business products and services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Aggregates |
|
$ |
818,693 |
|
|
$ |
691,822 |
|
|
$ |
2,121,443 |
|
|
$ |
1,785,961 |
|
|||||||||||||||
|
Cement |
|
|
119,609 |
|
|
|
98,223 |
|
|
|
330,976 |
|
|
|
300,554 |
|
|||||||||||||||
|
Ready Mixed Concrete |
|
|
271,844 |
|
|
|
254,686 |
|
|
|
724,179 |
|
|
|
750,424 |
|
|||||||||||||||
|
Asphalt and paving |
|
|
131,099 |
|
|
|
95,961 |
|
|
|
225,669 |
|
|
|
191,652 |
|
|||||||||||||||
|
Less: Interproduct sales |
|
|
(77,419 |
) |
|
|
(66,839 |
) |
|
|
(203,554 |
) |
|
|
(205,681 |
) |
|||||||||||||||
|
Subtotal |
|
|
1,263,826 |
|
|
|
1,073,853 |
|
|
|
3,198,713 |
|
|
|
2,822,910 |
|
|||||||||||||||
|
Freight |
|
|
91,543 |
|
|
|
72,264 |
|
|
|
224,765 |
|
|
|
185,390 |
|
|||||||||||||||
|
Total Building Materials Business |
|
|
1,355,369 |
|
|
|
1,146,117 |
|
|
|
3,423,478 |
|
|
|
3,008,300 |
|
|||||||||||||||
|
Magnesia Specialties business: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Products and services |
|
|
59,334 |
|
|
|
68,365 |
|
|
|
198,886 |
|
|
|
201,390 |
|
|||||||||||||||
|
Freight |
|
|
5,543 |
|
|
|
5,158 |
|
|
|
16,304 |
|
|
|
14,357 |
|
|||||||||||||||
|
Total Magnesia Specialties Business |
|
|
64,877 |
|
|
|
73,523 |
|
|
|
215,190 |
|
|
|
215,747 |
|
|||||||||||||||
|
Consolidated total revenues |
|
$ |
1,420,246 |
|
|
$ |
1,219,640 |
|
|
$ |
3,638,668 |
|
|
$ |
3,224,047 |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Gross profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Building Materials business products and services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Aggregates |
|
$ |
287,024 |
|
|
$ |
209,666 |
|
|
$ |
636,505 |
|
|
$ |
461,912 |
|
|||||||||||||||
|
Cement |
|
|
48,519 |
|
|
|
32,543 |
|
|
|
104,526 |
|
|
|
97,582 |
|
|||||||||||||||
|
Ready Mixed Concrete |
|
|
28,948 |
|
|
|
20,632 |
|
|
|
62,454 |
|
|
|
66,226 |
|
|||||||||||||||
|
Asphalt and paving |
|
|
31,102 |
|
|
|
25,022 |
|
|
|
38,519 |
|
|
|
35,191 |
|
|||||||||||||||
|
Subtotal |
|
|
395,593 |
|
|
|
287,863 |
|
|
|
842,004 |
|
|
|
660,911 |
|
|||||||||||||||
|
Freight |
|
|
317 |
|
|
|
(47 |
) |
|
|
378 |
|
|
|
432 |
|
|||||||||||||||
|
Total Building Materials Business |
|
|
395,910 |
|
|
|
287,816 |
|
|
|
842,382 |
|
|
|
661,343 |
|
|||||||||||||||
|
Magnesia Specialties business: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Products and services |
|
|
23,997 |
|
|
|
26,823 |
|
|
|
79,816 |
|
|
|
76,756 |
|
|||||||||||||||
|
Freight |
|
|
(987 |
) |
|
|
(1,076 |
) |
|
|
(3,226 |
) |
|
|
(3,280 |
) |
|||||||||||||||
|
Total Magnesia Specialties Business |
|
|
23,010 |
|
|
|
25,747 |
|
|
|
76,590 |
|
|
|
73,476 |
|
|||||||||||||||
|
Corporate |
|
|
1,725 |
|
|
|
(579 |
) |
|
|
1,446 |
|
|
|
4,474 |
|
|||||||||||||||
|
Consolidated gross profit |
|
$ |
420,645 |
|
|
$ |
312,984 |
|
|
$ |
920,418 |
|
|
$ |
739,293 |
|
|||||||||||||||
- MORE -
Appendix
|
MARTIN MARIETTA MATERIALS, INC. |
|
|||||||
|
Balance Sheet Data |
|
|||||||
|
(In thousands) |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
||
|
|
|
2019 |
|
|
2018 |
|
||
|
|
|
(Unaudited) |
|
|
(Audited) |
|
||
|
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
49,087 |
|
|
$ |
44,892 |
|
|
Accounts receivable, net |
|
|
763,878 |
|
|
|
523,276 |
|
|
Inventories, net |
|
|
649,716 |
|
|
|
663,035 |
|
|
Other current assets |
|
|
115,717 |
|
|
|
134,613 |
|
|
Property, plant and equipment, net |
|
|
5,132,147 |
|
|
|
5,157,229 |
|
|
Intangible assets, net |
|
|
2,888,578 |
|
|
|
2,900,400 |
|
|
Operating lease right-of-use assets |
|
|
484,853 |
|
|
|
- |
|
|
Other noncurrent assets |
|
|
139,509 |
|
|
|
127,974 |
|
|
Total assets |
|
$ |
10,223,485 |
|
|
$ |
9,551,419 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Current maturities of long-term debt and short-term facilities |
|
$ |
190,044 |
|
|
$ |
390,042 |
|
|
Other current liabilities |
|
|
498,938 |
|
|
|
396,708 |
|
|
Long-term debt (excluding current maturities) |
|
|
2,732,815 |
|
|
|
2,730,439 |
|
|
Other noncurrent liabilities |
|
|
1,497,250 |
|
|
|
1,084,818 |
|
|
Total equity |
|
|
5,304,438 |
|
|
|
4,949,412 |
|
|
Total liabilities and equity |
|
$ |
10,223,485 |
|
|
$ |
9,551,419 |
|
- MORE -
Appendix
|
MARTIN MARIETTA MATERIALS, INC. |
|
|||||||
|
Unaudited Statements of Cash Flows |
|
|||||||
|
(In thousands) |
|
|||||||
|
|
|
Nine Months Ended |
|
|||||
|
|
|
September 30, |
|
|||||
|
|
|
2019 |
|
|
2018 |
|
||
|
Operating activities: |
|
|
|
|
|
|
|
|
|
Consolidated net earnings |
|
$ |
480,918 |
|
|
$ |
375,896 |
|
|
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
276,974 |
|
|
|
253,200 |
|
|
Stock-based compensation expense |
|
|
28,414 |
|
|
|
23,084 |
|
|
Gains on divestitures and sales of assets |
|
|
(4,950 |
) |
|
|
(35,167 |
) |
|
Deferred income taxes |
|
|
18,352 |
|
|
|
68,833 |
|
|
Other items, net |
|
|
11,422 |
|
|
|
(2,107 |
) |
|
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: |
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(240,602 |
) |
|
|
(132,176 |
) |
|
Inventories, net |
|
|
13,573 |
|
|
|
(8,015 |
) |
|
Accounts payable |
|
|
65,897 |
|
|
|
42,995 |
|
|
Other assets and liabilities, net |
|
|
(200 |
) |
|
|
(145,005 |
) |
|
Net cash provided by operating activities |
|
|
649,798 |
|
|
|
441,538 |
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
(282,998 |
) |
|
|
(262,155 |
) |
|
Acquisitions, net |
|
|
- |
|
|
|
(1,640,698 |
) |
|
Proceeds from divestitures and sales of assets |
|
|
6,981 |
|
|
|
63,460 |
|
|
Investments in life insurance contracts, net |
|
|
559 |
|
|
|
771 |
|
|
Payment of railcar construction advances |
|
|
- |
|
|
|
(56,033 |
) |
|
Reimbursement of railcar construction advances |
|
|
- |
|
|
|
56,033 |
|
|
Other investing activities, net |
|
|
(1,214 |
) |
|
|
- |
|
|
Net cash used for investing activities |
|
|
(276,672 |
) |
|
|
(1,838,622 |
) |
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
Borrowings of long-term debt |
|
|
245,000 |
|
|
|
875,000 |
|
|
Repayments of long-term debt |
|
|
(445,042 |
) |
|
|
(695,039 |
) |
|
Payments on financing leases |
|
|
(2,651 |
) |
|
|
- |
|
|
Payments on capital leases |
|
|
- |
|
|
|
(2,589 |
) |
|
Debt issue costs |
|
|
- |
|
|
|
(3,194 |
) |
|
Payments of deferred acquisition consideration |
|
|
- |
|
|
|
(6,707 |
) |
|
Purchase of remaining interest in existing joint venture |
|
|
- |
|
|
|
(12,800 |
) |
|
Dividends paid |
|
|
(95,227 |
) |
|
|
(86,190 |
) |
|
Repurchases of common stock |
|
|
(57,288 |
) |
|
|
(60,377 |
) |
|
Proceeds from exercise of stock options |
|
|
12,295 |
|
|
|
6,993 |
|
|
Shares withheld for employees' income tax obligations |
|
|
(25,418 |
) |
|
|
(10,416 |
) |
|
Distributions to owners of noncontrolling interest |
|
|
(600 |
) |
|
|
- |
|
|
Net cash (used for) provided by financing activities |
|
|
(368,931 |
) |
|
|
4,681 |
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
4,195 |
|
|
|
(1,392,403 |
) |
|
Cash and cash equivalents, beginning of period |
|
|
44,892 |
|
|
|
1,446,364 |
|
|
Cash and cash equivalents, end of period |
|
$ |
49,087 |
|
|
$ |
53,961 |
|
- MORE -
Appendix
MARTIN MARIETTA MATERIALS, INC.
Unaudited Operational Highlights
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
September 30, 2019 |
|
|
September 30, 2019 |
|
||||||||||
|
|
|
Volume |
|
|
Pricing |
|
|
Volume |
|
|
Pricing |
|
||||
|
Volume/Pricing Variance (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid-America Group |
|
14.0% |
|
|
3.5% |
|
|
19.2% |
|
|
1.9% |
|
||||
|
Southeast Group |
|
0.8% |
|
|
5.7% |
|
|
15.9% |
|
|
5.4% |
|
||||
|
West Group |
|
14.8% |
|
|
9.2% |
|
|
7.4% |
|
|
5.5% |
|
||||
|
Total Aggregates Product Line (2) |
|
12.4% |
|
|
5.3% |
|
|
14.2% |
|
|
3.9% |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
Shipments (tons in thousands) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
Mid-America Group |
|
|
29,851 |
|
|
|
26,194 |
|
|
|
73,342 |
|
|
|
61,510 |
|
|
Southeast Group |
|
|
7,209 |
|
|
|
7,151 |
|
|
|
20,819 |
|
|
|
17,967 |
|
|
West Group |
|
|
19,609 |
|
|
|
17,086 |
|
|
|
53,042 |
|
|
|
49,389 |
|
|
Total Aggregates Product Line (2) |
|
|
56,669 |
|
|
|
50,431 |
|
|
|
147,203 |
|
|
|
128,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Volume/pricing variances reflect the percentage increase 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 |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
Shipments (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates tons - external customers |
|
|
53,580 |
|
|
|
47,549 |
|
|
|
139,423 |
|
|
|
120,713 |
|
|
Internal aggregates tons used in other product lines |
|
|
3,089 |
|
|
|
2,882 |
|
|
|
7,780 |
|
|
|
8,153 |
|
|
Total aggregates tons |
|
|
56,669 |
|
|
|
50,431 |
|
|
|
147,203 |
|
|
|
128,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cement tons - external customers |
|
|
733 |
|
|
|
587 |
|
|
|
2,011 |
|
|
|
1,767 |
|
|
Internal cement tons used in other product lines |
|
|
327 |
|
|
|
292 |
|
|
|
912 |
|
|
|
966 |
|
|
Total cement tons |
|
|
1,060 |
|
|
|
879 |
|
|
|
2,923 |
|
|
|
2,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ready Mixed Concrete - cubic yards |
|
|
2,433 |
|
|
|
2,232 |
|
|
|
6,530 |
|
|
|
6,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asphalt tons - external customers |
|
|
400 |
|
|
|
287 |
|
|
|
666 |
|
|
|
601 |
|
|
Internal asphalt tons used in road paving business |
|
|
936 |
|
|
|
709 |
|
|
|
1,582 |
|
|
|
1,420 |
|
|
Total asphalt tons |
|
|
1,336 |
|
|
|
996 |
|
|
|
2,248 |
|
|
|
2,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average unit sales price by product line (including internal sales): |
|
|||||||||||||||
|
Aggregates (per ton) |
|
$ |
14.37 |
|
|
$ |
13.65 |
|
|
$ |
14.31 |
|
|
$ |
13.78 |
|
|
Cement (per ton) |
|
$ |
112.36 |
|
|
$ |
110.63 |
|
|
$ |
112.53 |
|
|
$ |
108.92 |
|
|
Ready Mixed Concrete (per cubic yard) |
|
$ |
109.72 |
|
|
$ |
112.14 |
|
|
$ |
108.75 |
|
|
$ |
108.36 |
|
|
Asphalt (per ton) |
|
$ |
46.67 |
|
|
$ |
45.17 |
|
|
$ |
46.83 |
|
|
$ |
44.98 |
|
- MORE -
Appendix
|
MARTIN MARIETTA MATERIALS, INC. |
|
|||
|
Non-GAAP Financial Measures |
|
|||
|
(Dollars in thousands) |
|
|||
|
|
|
|
|
|
|
The ratio of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing twelve 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 twelve months cannot exceed 3.50 times as of September 30, 2019, 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 September 30, 2019, for the trailing-twelve-month EBITDA. For supporting calculations, refer to the Company's website at www.martinmarietta.com. |
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|
|
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|||
|
|
|
Twelve Month Period |
|
|
|
|
|
October 1, 2018 to |
|
|
|
|
|
September 30, 2019 |
|
|
|
Earnings from continuing operations attributable to Martin Marietta Materials, Inc. |
|
$ |
575,278 |
|
|
Add back: |
|
|
|
|
|
Interest expense |
|
|
132,223 |
|
|
Income tax expense |
|
|
132,586 |
|
|
Depreciation, depletion and amortization expense and noncash nonconsolidated equity affiliate adjustment |
|
|
378,205 |
|
|
Stock-based compensation expense |
|
|
34,583 |
|
|
Acquisition-related expenses, net |
|
|
664 |
|
|
Noncash portion of asset and portfolio rationalization charge |
|
|
11,725 |
|
|
Deduct: |
|
|
|
|
|
Interest income |
|
|
(511 |
) |
|
Consolidated EBITDA, as defined by the Company's Credit Agreement |
|
$ |
1,264,753 |
|
|
|
|
|
|
|
|
Consolidated Debt, as defined and including debt for which the Company is a co-borrower, at September 30, 2019 |
|
$ |
2,935,066 |
|
|
|
|
|
|
|
|
Consolidated Debt-to-Consolidated EBITDA, as defined by the Company's Credit Agreement, at September 30, 2019, for the trailing-twelve-month EBITDA |
|
2.32 times |
|
|
- MORE -
Appendix
MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures (continued)
(Dollars in thousands)
|
Earnings before interest, income taxes, depreciation, depletion and amortization, the noncash earnings/loss from nonconsolidated equity affiliates, the impact of Bluegrass acquisition-related expenses, net, the impact of selling acquired inventory after the markup to fair value as part of acquisition accounting, and the asset and portfolio rationalization charge (Adjusted EBITDA) is an indicator used by the Company and investors to evaluate the Company's operating performance from period to period. Adjusted 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 Adjusted EBITDA, refer to the Company's website at www.martinmarietta.com. Consolidated Adjusted EBITDA is as follows: |
|
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
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|
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
|
2019 |
|
|
2018(1) |
|
|
2019 |
|
|
2018(1) |
|
||||
|
Consolidated Adjusted EBITDA |
|
$ |
439,071 |
|
|
$ |
344,636 |
|
|
$ |
975,769 |
|
|
$ |
841,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A Reconciliation of Net Earnings Attributable to Martin Marietta to Consolidated Adjusted EBITDA is as follows: |
|
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|
|
|
|
|
|
|
|
|||||||||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
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|
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
|
2019 |
|
|
2018(1) |
|
|
2019 |
|
|
2018(1) |
|
||||
|
Net earnings attributable to Martin Marietta |
|
$ |
248,573 |
|
|
$ |
180,221 |
|
|
$ |
480,901 |
|
|
$ |
375,621 |
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
32,321 |
|
|
|
35,468 |
|
|
|
98,366 |
|
|
|
103,526 |
|
|
Income tax expense for controlling interests |
|
|
66,143 |
|
|
|
29,051 |
|
|
|
111,019 |
|
|
|
84,070 |
|
|
Depreciation, depletion and amortization and earnings/loss from nonconsolidated equity affiliates |
|
|
92,034 |
|
|
|
84,345 |
|
|
|
285,483 |
|
|
|
240,228 |
|
|
Bluegrass acquisition-related expenses, net |
|
|
- |
|
|
|
89 |
|
|
|
- |
|
|
|
12,925 |
|
|
Impact of selling acquired inventory after markup to fair value as part of acquisition accounting |
|
|
- |
|
|
|
8,349 |
|
|
|
- |
|
|
|
18,516 |
|
|
Asset and portfolio rationalization charge |
|
|
- |
|
|
|
7,113 |
|
|
|
- |
|
|
|
7,113 |
|
|
Consolidated adjusted EBITDA |
|
$ |
439,071 |
|
|
$ |
344,636 |
|
|
$ |
975,769 |
|
|
$ |
841,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculation of Adjusted EBITDA was modified in 2019. 2018 amounts have been calculated consistently with the 2019 presentation. |
|
|||||||||||||||
|
The following is a reconciliation of the GAAP measure to the 2019 Adjusted EBITDA guidance: |
|
|||||||
|
|
|
Low Point of Range |
|
|
High Point of Range |
|
||
|
Net earnings attributable to Martin Marietta |
|
$ |
585,000 |
|
|
$ |
635,000 |
|
|
Add back: |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
135,000 |
|
|
|
130,000 |
|
|
Taxes on income |
|
|
145,000 |
|
|
|
160,000 |
|
|
Depreciation, depletion and amortization and earnings/loss from nonconsolidated equity affiliates |
|
|
380,000 |
|
|
|
380,000 |
|
|
Adjusted EBITDA |
|
$ |
1,245,000 |
|
|
$ |
1,305,000 |
|
- MORE -
Appendix
MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures (continued)
(Dollars in thousands)
|
Adjusted gross profit and adjusted earnings from operations for the three months ended September 30, 2018, exclude the impact of selling acquired inventory after the markup to fair value as part of acquisition accounting. Adjusted earnings from operations also exclude acquisition-related expenses, net, and the asset and portfolio rationalization charge. Adjusted gross profit and adjusted earnings from operations are non-GAAP financial measures. Management presents these measures for investors and analysts to evaluate and forecast the Company's financial results, as the impact of selling acquired inventory after the markup to fair value as part of acquisition accounting, Bluegrass acquisition-related expenses, net, and the asset and portfolio rationalization charge are nonrecurring. |
|
|||
|
|
|
|
|
|
|
The following is a reconciliation of the GAAP measure to adjusted gross profit and adjusted earnings from operations for the quarter ended September 30, 2018: |
|
|||
|
|
|
|
|
|
|
Gross profit as reported |
|
$ |
312,984 |
|
|
Impact of selling acquired inventory after the markup to fair value as part of acquisition accounting |
|
|
8,349 |
|
|
Adjusted gross profit |
|
$ |
321,333 |
|
|
|
|
|
|
|
|
Earnings from operations as reported |
|
$ |
240,662 |
|
|
Impact of selling acquired inventory after the markup to fair value as part of acquisition accounting |
|
|
8,349 |
|
|
Bluegrass acquisition-related expenses, net |
|
|
89 |
|
|
Asset and portfolio rationalization charge |
|
|
7,113 |
|
|
Adjusted earnings from operations |
|
$ |
256,213 |
|
- END -