10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-12744

 

MARTIN MARIETTA MATERIALS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

North Carolina

56-1848578

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

4123 Parklake Avenue, Raleigh, NC

27612

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (919) 781-4550

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock (Par Value $0.01)

 

MLM

 

NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

 

Class

Outstanding as of April 28, 2023

Common Stock, $0.01 par value

61,968,757

 

 


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

FORM 10-Q

For the Quarter Ended March 31, 2023

 

Page

Part I. Financial Information:

 

 

 

 

 

Item 1. Financial Statements

 

 

 

 

 

Consolidated Balance Sheets – March 31, 2023 and December 31, 2022

 

3

 

 

 

Consolidated Statements of Earnings and Comprehensive Earnings – Three Months Ended March 31, 2023 and 2022

 

4

 

 

 

Consolidated Statements of Cash Flows – Three Months Ended March 31, 2023 and 2022

 

5

 

 

 

Consolidated Statements of Total Equity – Three Months Ended March 31, 2023 and 2022

 

6

 

 

 

Notes to Consolidated Financial Statements

 

7

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

21

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

32

 

 

 

Item 4. Controls and Procedures

 

33

 

 

 

Part II. Other Information:

 

 

 

 

 

Item 1. Legal Proceedings

 

34

 

 

 

Item 1A. Risk Factors

 

34

 

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

34

 

 

 

Item 4. Mine Safety Disclosures

 

34

 

 

 

Item 6. Exhibits

 

35

 

 

 

Signatures

 

36

 

 

 

 

 

Page 2 of 36


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

 

 

December 31,

 

 

 

 

2023

 

 

2022

 

 

 

 

(In Millions, Except Par Value Data)

 

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

229.4

 

 

$

358.0

 

 

Restricted cash

 

 

0.1

 

 

 

0.8

 

 

Restricted investments (to satisfy discharged debt and related interest)

 

 

702.3

 

 

 

704.6

 

 

Accounts receivable, net

 

 

796.7

 

 

 

785.9

 

 

Inventories, net

 

 

948.7

 

 

 

873.7

 

 

Current assets held for sale

 

 

60.1

 

 

 

73.2

 

 

Other current assets

 

 

75.4

 

 

 

80.7

 

 

Total Current Assets

 

 

2,812.7

 

 

 

2,876.9

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

10,721.0

 

 

 

10,661.0

 

 

Allowances for depreciation, depletion and amortization

 

 

(4,441.5

)

 

 

(4,344.3

)

 

Net property, plant and equipment

 

 

6,279.5

 

 

 

6,316.7

 

 

Goodwill

 

 

3,649.5

 

 

 

3,649.5

 

 

Other intangibles, net

 

 

840.8

 

 

 

847.8

 

 

Operating lease right-of-use assets, net

 

 

382.9

 

 

 

383.5

 

 

Noncurrent assets held for sale

 

 

374.6

 

 

 

372.5

 

 

Other noncurrent assets

 

 

550.9

 

 

 

546.7

 

 

Total Assets

 

$

14,890.9

 

 

$

14,993.6

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

302.6

 

 

$

385.0

 

 

Accrued salaries, benefits and payroll taxes

 

 

37.9

 

 

 

71.6

 

 

Accrued other taxes

 

 

51.9

 

 

 

55.4

 

 

Accrued interest

 

 

41.2

 

 

 

42.8

 

 

Current maturities of discharged long-term debt

 

 

699.6

 

 

 

699.1

 

 

Operating lease liabilities

 

 

53.3

 

 

 

52.1

 

 

Current liabilities held for sale

 

 

4.2

 

 

 

4.5

 

 

Other current liabilities

 

 

137.3

 

 

 

135.1

 

 

Total Current Liabilities

 

 

1,328.0

 

 

 

1,445.6

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

4,342.0

 

 

 

4,340.9

 

 

Deferred income taxes, net

 

 

921.0

 

 

 

914.3

 

 

Noncurrent operating lease liabilities

 

 

337.3

 

 

 

335.9

 

 

Noncurrent liabilities held for sale

 

 

21.2

 

 

 

21.8

 

 

Other noncurrent liabilities

 

 

763.9

 

 

 

762.3

 

 

Total Liabilities

 

 

7,713.4

 

 

 

7,820.8

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

Common stock, par value $0.01 per share (62.0 shares and 62.1 shares
   outstanding at March 31, 2023 and December 31, 2022, respectively)

 

 

0.6

 

 

 

0.6

 

 

Preferred stock, par value $0.01 per share

 

 

 

 

 

 

 

Additional paid-in capital

 

 

3,487.2

 

 

 

3,489.0

 

 

Accumulated other comprehensive loss

 

 

(37.4

)

 

 

(38.5

)

 

Retained earnings

 

 

3,724.6

 

 

 

3,719.4

 

 

Total Shareholders' Equity

 

 

7,175.0

 

 

 

7,170.5

 

 

Noncontrolling interests

 

 

2.5

 

 

 

2.3

 

 

Total Equity

 

 

7,177.5

 

 

 

7,172.8

 

 

Total Liabilities and Equity

 

$

14,890.9

 

 

$

14,993.6

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 3 of 36


 

 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

 

(In Millions, Except Per Share Data)

 

Total Revenues

 

$

1,354.1

 

 

$

1,230.8

 

Total Cost of Revenues

 

 

1,051.3

 

 

 

1,074.7

 

 

 

 

 

 

 

 

Gross Profit

 

 

302.8

 

 

 

156.1

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

104.3

 

 

 

97.1

 

Acquisition and integration expenses

 

 

0.8

 

 

 

1.4

 

Other operating expenses (income), net

 

 

1.6

 

 

 

(2.3

)

Earnings from Operations

 

 

196.1

 

 

 

59.9

 

 

 

 

 

 

 

 

Interest expense

 

 

42.2

 

 

 

40.5

 

Other nonoperating income, net

 

 

(16.1

)

 

 

(10.8

)

Earnings from continuing operations before income tax expense

 

 

170.0

 

 

 

30.2

 

Income tax expense

 

 

35.5

 

 

 

5.8

 

Earnings from continuing operations

 

 

134.5

 

 

 

24.4

 

Loss from discontinued operations, net of income tax benefit

 

 

(12.9

)

 

 

(3.1

)

Consolidated net earnings

 

 

121.6

 

 

 

21.3

 

Less: Net earnings (loss) attributable to noncontrolling interests

 

 

0.2

 

 

 

(0.1

)

Net Earnings Attributable to Martin Marietta

 

$

121.4

 

 

$

21.4

 

 

 

 

 

 

 

 

Consolidated Comprehensive Earnings (Loss):

 

 

 

 

 

 

Earnings (Loss) attributable to Martin Marietta

 

$

122.5

 

 

$

(10.2

)

Earnings (Loss) attributable to noncontrolling interests

 

 

0.2

 

 

 

(0.1

)

 

$

122.7

 

 

$

(10.3

)

Net Earnings (Loss) Attributable to Martin Marietta

 

 

 

 

 

 

Per Common Share:

 

 

 

 

 

 

Basic from continuing operations attributable to common
   shareholders

 

$

2.17

 

 

$

0.39

 

Basic from discontinued operations attributable to
   common shareholders

 

 

(0.21

)

 

 

(0.05

)

 

 

$

1.96

 

 

$

0.34

 

 

 

 

 

 

 

 

Diluted from continuing operations attributable to common
   shareholders

 

$

2.16

 

 

$

0.39

 

Diluted from discontinued operations attributable to
   common shareholders

 

 

(0.21

)

 

 

(0.05

)

 

 

$

1.95

 

 

$

0.34

 

 

 

 

 

 

 

 

Weighted-Average Common Shares Outstanding:

 

 

 

 

 

 

Basic

 

 

62.1

 

 

 

62.4

 

Diluted

 

 

62.2

 

 

 

62.6

 

 

See accompanying notes to the consolidated financial statements.

 

Page 4 of 36


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

 

(Dollars in Millions)

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Consolidated net earnings

 

$

121.6

 

 

$

21.3

 

Adjustments to reconcile consolidated net earnings to net cash
   provided by operating activities:

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

123.6

 

 

 

128.2

 

Stock-based compensation expense

 

 

13.7

 

 

 

12.0

 

Gains on sales of assets

 

 

(1.0

)

 

 

(2.9

)

Deferred income taxes, net

 

 

6.3

 

 

 

5.2

 

Other items, net

 

 

(1.7

)

 

 

(0.9

)

Changes in operating assets and liabilities, net of effects of
   acquisitions and divestitures:

 

 

 

 

 

 

Accounts receivable, net

 

 

(13.7

)

 

 

14.8

 

Inventories, net

 

 

(82.4

)

 

 

(28.9

)

Accounts payable

 

 

17.8

 

 

 

95.5

 

Other assets and liabilities, net

 

 

(23.7

)

 

 

(74.4

)

Net Cash Provided by Operating Activities

 

 

160.5

 

 

 

169.9

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(173.9

)

 

 

(139.8

)

Acquisitions, net of cash acquired

 

 

 

 

 

18.8

 

Proceeds from sales of assets

 

 

22.3

 

 

 

1.0

 

Investments in life insurance contracts, net

 

 

3.1

 

 

 

 

Other investing activities, net

 

 

(3.9

)

 

 

(3.0

)

Net Cash Used for Investing Activities

 

 

(152.4

)

 

 

(123.0

)

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

Payments on finance lease obligations

 

 

(4.3

)

 

 

(3.7

)

Dividends paid

 

 

(41.6

)

 

 

(38.9

)

Repurchases of common stock

 

 

(75.0

)

 

 

(50.0

)

Proceeds from exercise of stock options

 

 

0.2

 

 

 

0.6

 

Shares withheld for employees’ income tax obligations

 

 

(16.7

)

 

 

(24.2

)

Net Cash Used for Financing Activities

 

 

(137.4

)

 

 

(116.2

)

Net Decrease in Cash, Cash Equivalents and Restricted Cash

 

 

(129.3

)

 

 

(69.3

)

Cash, Cash Equivalents and Restricted Cash, beginning of period

 

 

358.8

 

 

 

258.9

 

Cash, Cash Equivalents and Restricted Cash, end of period

 

$

229.5

 

 

$

189.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

Page 5 of 36


 

MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES

(UNAUDITED) CONSOLIDATED STATEMENTS OF TOTAL EQUITY

 

 

(In Millions, Except Per Share Data)

 

Shares of Common Stock

 

 

Common Stock

 

 

Additional Paid-in Capital

 

 

Accumulated
Other Comprehensive
Loss

 

 

Retained Earnings

 

 

Total Shareholders' Equity

 

 

Noncontrolling Interests

 

 

Total Equity

 

Balance at December 31, 2021

 

 

62.4

 

 

$

0.6

 

 

$

3,470.4

 

 

$

(97.6

)

 

$

3,161.9

 

 

$

6,535.3

 

 

$

2.3

 

 

$

6,537.6

 

Consolidated net earnings (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21.4

 

 

 

21.4

 

 

 

(0.1

)

 

 

21.3

 

Other comprehensive loss,
   net of tax

 

 

 

 

 

 

 

 

 

 

 

(31.6

)

 

 

 

 

 

(31.6

)

 

 

 

 

 

(31.6

)

Dividends declared ($0.61 per common share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(38.4

)

 

 

(38.4

)

 

 

 

 

 

(38.4

)

Issuances of common stock for stock
   award plans

 

 

0.1

 

 

 

 

 

 

4.6

 

 

 

 

 

 

 

 

 

4.6

 

 

 

 

 

 

4.6

 

Shares withheld for employees'
   income tax obligations

 

 

 

 

 

 

 

 

(24.4

)

 

 

 

 

 

 

 

 

(24.4

)

 

 

 

 

 

(24.4

)

Repurchases of common stock

 

 

(0.1

)

 

 

 

 

 

 

 

 

 

 

 

(50.0

)

 

 

(50.0

)

 

 

 

 

 

(50.0

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

12.0

 

 

 

 

 

 

 

 

 

12.0

 

 

 

 

 

 

12.0

 

Balance at March 31, 2022

 

 

62.4

 

 

$

0.6

 

 

$

3,462.6

 

 

$

(129.2

)

 

$

3,094.9

 

 

$

6,428.9

 

 

$

2.2

 

 

$

6,431.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2022

 

 

62.1

 

 

$

0.6

 

 

$

3,489.0

 

 

$

(38.5

)

 

$

3,719.4

 

 

$

7,170.5

 

 

$

2.3

 

 

$

7,172.8

 

Consolidated net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

121.4

 

 

 

121.4

 

 

 

0.2

 

 

 

121.6

 

Other comprehensive earnings,
   net of tax

 

 

 

 

 

 

 

 

 

 

 

1.1

 

 

 

 

 

 

1.1

 

 

 

 

 

 

1.1

 

Dividends declared ($0.66 per common share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(41.2

)

 

 

(41.2

)

 

 

 

 

 

(41.2

)

Issuances of common stock for stock
   award plans

 

 

0.1

 

 

 

 

 

 

1.3

 

 

 

 

 

 

 

 

 

1.3

 

 

 

 

 

 

1.3

 

Shares withheld for employees'
   income tax obligations

 

 

 

 

 

 

 

 

(16.8

)

 

 

 

 

 

 

 

 

(16.8

)

 

 

 

 

 

(16.8

)

Repurchases of common stock

 

 

(0.2

)

 

 

 

 

 

 

 

 

 

 

 

(75.0

)

 

 

(75.0

)