Martin Marietta Materials, Inc. (NYSE:MLM) today reported its results
for the first quarter ended March 31, 2015.
Ward Nye, Chairman, President and CEO of Martin Marietta, stated: “We
are pleased to report improved margins and increased profitability, both
considerably ahead of our internal plans, and a first-quarter profit for
the first time since 2008. These quarterly results serve as a further
validation of our success in executing on our strategic objectives, as
well as our relentless commitment to operational excellence and cost
discipline. Notably, we achieved volume growth and reported a
double-digit pricing increase in our heritage aggregates product line
despite severe late winter weather in many markets and significant
rainfall in Texas. We view this volume and pricing momentum as an
indication of a more construction-centric phase of economic recovery.
Our first-quarter results and outlook for the full year have led us to
increase our annual aggregates product line pricing guidance from an
increase of 4% to 6% to an increase of 7% to 9% over 2014.
“Texas ranks second in the nation in job growth, supported by increased
construction activity and a diverse industrial base. Our leading
position in Texas’ major northern, central and southern markets will
allow us to capitalize on this trend as our customers’ backlogs across
the construction end-use spectrum continue to improve. Construction
activity is led by the state Department of Transportation’s nearly $9
billion fiscal year 2015 letting budget, which includes multi-year
projects and adds to an existing infrastructure backlog. Texas also
ranks first in nonresidential starts, with $39 billion in the
trailing-12 months, and second in housing starts, which represented more
than 15% of the nation’s housing starts for the trailing-12 months
through March.
“We continue to see indicators of further recovery in the eastern half
of the United States, where Martin Marietta has leading market
positions. North Carolina, Georgia and Florida all rank in the top five
in job growth and, similar to Texas, construction activity is improving.
Further, both North Carolina and Georgia are among several states
considering legislation to expand infrastructure funding, supporting the
importance of transportation investment in spurring economic growth.
Additionally, Iowa enacted a $0.10 per gallon increase in the state gas
tax on March 1, 2015, to increase annual funding for infrastructure
projects by an estimated $215 million.
“The Cement and Magnesia Specialties businesses made significant
contributions to our quarterly earnings and cash generation. The Cement
business continues to benefit from a sold-out Texas market, which is
operating near current peak utilization from a domestic capacity
perspective. For the quarter, the business generated earnings before
interest, income taxes, depreciation, depletion and amortization, or
EBITDA, of $27.5 million. The Magnesia Specialties business is operating
at physical capacity and leveraged record net sales to expand its gross
margin (excluding freight and delivery revenues) 160 basis points over
the prior-year quarter.”
Mr. Nye continued, “In addition to operational excellence and cost
discipline, our performance reflects the execution of our other core
foundational pillars: world-class safety, ethical conduct,
sustainability, and customer satisfaction. Our employees remain focused
on these principles and delivered exceptional first-quarter performance.
We look forward to building on our progress to further increase
shareholder value.”
NOTABLE ITEMS FOR THE QUARTER (ALL COMPARISONS ARE VERSUS THE
PRIOR-YEAR FIRST QUARTER)
-
Earnings per diluted share of $0.07 compared with a loss of $0.47
(which includes a $0.12 per diluted share charge for business
development expenses related to the TXI acquisition)
-
Consolidated net sales of $631.9 million compared with $379.7 million,
an increase of 66%
-
Aggregates product line volume increase of 17.1%; aggregates product
line price increase of 11.4%
-
Heritage aggregates product line volume increase of 7.0%,
excluding shipments from 2014 divestitures from prior-year
quarter; reported heritage volume increase of 3.7%
-
Heritage aggregates product line price increase of 10.5%
-
Cement business net sales of $96.6 million, earnings from operations
of $12.2 million and EBITDA of $27.5 million
-
Magnesia Specialties net sales of $58.8 million and earnings from
operations of $17.8 million
-
Heritage consolidated gross margin (excluding freight and delivery
revenues) of 12.5%, up 570 basis points; consolidated gross margin
(excluding freight and delivery revenues) of 11.8%, up 500 basis points
-
Consolidated selling, general and administrative expenses (SG&A) of
$49.5 million, or 7.8% of net sales, a reduction of 120 basis points
-
Consolidated earnings from operations of $25.6 million compared with a
loss from operations of $15.9 million (which includes $9.5 million of
business development expenses related to the TXI acquisition)
QUARTERLY OPERATING RESULTS (ALL COMPARISONS ARE VERSUS THE
PRIOR-YEAR FIRST QUARTER UNLESS NOTED OTHERWISE)
Aggregates Business
Heritage aggregates product line shipments reflect growth in all end-use
markets. Shipments to the infrastructure market comprised 40% of
quarterly volumes and increased 8%. Growth was driven by large projects
in the Mid-America Group (notably in North Carolina and Iowa) and the
Southeast Group. Shipments in the West Group were hampered by rainfall.
The federal highway bill, Moving Ahead for Progress in the 21st
Century, or MAP-21, will expire on May 31, 2015. However, management
anticipates the U.S. Congress will pass another continuing resolution
through the fall, while working towards passage of a multi-year bill.
The nonresidential market represented 34% of quarterly heritage
aggregates product line shipments and increased slightly. Diversified
state economies have generated other nonresidential and infrastructure
projects to replace energy-related shipments currently displaced by
volatility in oil prices. Further, the Company expects energy-related
activity to remain strong, supported by more than $100 billion of
planned projects along the Gulf Coast, including a significant portion
in Texas. Nonresidential activity varies significantly by state, with
growth strongest in Texas and California. The Dodge Momentum Index for
March was 122.3. For the first three months of 2015, the index was 12%
higher than the comparable period in 2014, signaling continued growth in
nonresidential activity.
The residential end-use market accounted for 15% of quarterly heritage
aggregates product line shipments, and volumes to this market increased
4%. The overall rate of residential growth has slowed compared with the
last few years, in part due to a temporary reduction in available
building lot inventory in the Company’s markets. Importantly though,
subdivision development, which consumes the majority of stone used in
residential construction activity, has increased in a number of states.
Notably, Colorado, Georgia, Florida and South Carolina all reported
double-digit growth in housing starts for the trailing-12 months through
March. The ChemRock/Rail market accounted for the remaining 11% of
heritage aggregates product line volumes and increased slightly, led by
higher ballast shipments. This growth reflects the increasing investment
in capacity expansion and maintenance by major railroads.
Overall, heritage aggregates product line shipments increased 7.0%,
excluding shipments from the third-quarter 2014 divestiture of three
operations from the prior-year quarter. The divestiture included an
Oklahoma quarry and two Dallas, Texas rail yards and was required by the
Department of Justice in the TXI acquisition. Shipments from these
divestitures continue to be reported in heritage volumes in the
prior-year quarter. Aggregates product line shipments in the Mid-America
Group increased 18.1%, and the Southeast Group achieved an increase of
2.2%. The West Group shipments were up slightly, excluding shipments
from the divested operations from the prior-year quarter. The reported
variance for the West Group is a 6.1% decline.
Heritage aggregates product line pricing represents growth in all
reportable groups, led by the 17.6% increase in the West Group. The most
significant improvement was achieved in South Texas. The Southeast Group
and Mid-America Group reported increases of 6.0% and 3.2%, respectively.
The legacy TXI aggregates product line operations continue to benefit
from integration, which has resulted in expanded margins. Inclusive of
two small acquisitions completed during the first quarter, these
operations had net sales of $31.9 million and a gross margin (excluding
freight and delivery revenues) of 21.7%.
The heritage ready mixed concrete product line reported an 11% increase
in average selling price, which led to an 8% increase in net sales and a
490-basis-point improvement in gross margin (excluding freight and
delivery revenues). Winter production reflects increased costs for
additives, which is passed along to customers. The legacy TXI ready
mixed concrete shipments and profitability reflect the impact of rain in
Texas. For the quarter, these operations contributed $86 million of net
sales. The hot mixed asphalt product line reported a 3% increase in
average selling price and $10 million of net sales.
Weather adversely affected the aggregates product line total production
cost per ton shipped, which remained relatively flat. Lower energy costs
continue to benefit the cost structure.
The heritage Aggregates business gross margin (excluding freight and
delivery revenues) was 9.7%, an increase of 730 basis points. The
Southeast Group, which benefitted from recovery in Georgia and improved
performance by offshore operations, led with an increase of 1,040 basis
points. Incremental margin for the heritage aggregates business was 76%
and was led by the Mideast and Southeast Divisions.
Magnesia Specialties Business
Magnesia Specialties continued to deliver strong performance and
generated first-quarter record net sales of $58.8 million. First-quarter
earnings from operations were $17.8 million compared with $16.3 million.
Cement Business
The Cement business is benefitting from continued strength in Texas
markets, where demand exceeds local supply. The Portland Cement
Association, or PCA, forecasts continued supply/demand imbalance in
Texas over the next several years. For the quarter, the business
generated $96.6 million of net sales and $19.0 of gross margin. The
business incurred $5.4 million in planned cement kiln maintenance costs,
which are expected to be heaviest in the third and fourth quarters.
First-quarter operating results were negatively affected by wet weather
in Texas, which delayed some shipments to the balance of the year.
During the first quarter, the Company announced price increases of $10
per ton in the Texas and California markets effective April 1.
CONSOLIDATED OPERATING RESULTS
Consolidated SG&A was 7.8% of net sales compared with 9.0% in the
prior-year quarter. The reduction of 120 basis points reflects the
growth of net sales outpacing the increase in SG&A, partially offset by
higher pension expense. The Company incurred acquisition-related
expenses of $1.6 million, which is the expected run rate for the next
few quarters. Earnings from operations for the quarter were $25.6
million compared with a loss from operations of $15.9 million in the
prior-year period.
The Company recorded an income tax benefit of $0.8 million for the
quarter, driven by discrete events, which include the exercise of
converted stock awards issued to former TXI personnel. Excluding
discrete items, the estimated effective income tax rate would have been
31%, in line with annual guidance. For the year, the Company expects to
fully utilize allowable net operating loss carryforwards of $363 million
acquired with TXI.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities for the first quarter was $35.1
million in 2015 compared with $6.6 million in 2014. The increase is
principally attributable to higher earnings before depreciation,
depletion and amortization expense, partially offset by cash payments in
2015 for 2014 taxes.
At March 31, 2015, the ratio of consolidated debt to consolidated
EBITDA, as defined, for the trailing-12 months was 2.4 times, in
compliance with the Company’s leverage covenant.
SHARE REPURCHASE PROGRAM
The Company is authorized to execute a share repurchase program under
which it may acquire up to 20 million shares of its outstanding common
stock. Future repurchases are expected to be carried out through a
variety of methods, which may include open market purchases, privately
negotiated transactions, block trades, accelerated share purchase
transactions, or any combination of such methods. The Company expects to
complete the repurchase program over the next several years, though the
actual timing of completion will be based on an ongoing assessment of
the capital needs of the business, the market price of the Company’s
common stock and general market conditions. Share repurchases will be
executed based on then-current business and market factors, so the
actual return of capital in any single quarter may vary. The repurchase
program may be modified, suspended or discontinued by the Board at any
time without prior notice.
FULL-YEAR OUTLOOK
The Company is encouraged by positive trends in its business and
markets, notably:
-
Nonresidential construction is expected to increase in both the heavy
industrial and commercial sectors. The Dodge Momentum Index remains
high and signals continued growth.
-
Energy-related economic activity, including follow-on public and
private construction activities in the Company’s primary markets, is
anticipated to remain strong.
-
Residential construction is expected to continue to grow, driven by
historically low levels of construction activity over the previous
several years, employment gains, low mortgage rates, significant lot
absorption, higher multi-family rental rates and rising housing prices.
-
For the public sector, authorized highway funding from MAP-21 should
remain stable compared with 2014. Additionally, state initiatives to
finance infrastructure projects, including support from TIFIA, are
expected to grow and continue to play an expanded role in
public-sector activity.
Based on these trends and expectations, the Company anticipates the
following for the full year:
-
Aggregates end-use markets compared to 2014 levels are as follows:
-
Infrastructure market to increase mid-single digits.
-
Nonresidential market to increase in the high-single digits.
-
Residential market to experience a double-digit increase.
-
ChemRock/Rail market to remain relatively flat.
-
Aggregates product line shipments to increase by 10% to 12% compared
with 2014 levels.
-
Heritage aggregates shipments to increase 4% to 7%.
-
Shipments from acquired TXI operations to more than double, reflecting
a full year of ownership.
-
Aggregates product line pricing to increase by 7% to 9% compared with
2014.
-
Aggregates product line production cost per ton shipped to decline
slightly.
-
Aggregates-related downstream product lines to generate between $875
million and $925 million of net sales and $65 million to $70 million
of gross profit.
-
Net sales for the Cement segment to be between $475 million and $500
million, generating $120 million to $130 million of gross profit.
-
Net sales for the Magnesia Specialties segment to be between $240
million and $250 million, generating $85 million to $90 million of
gross profit.
-
SG&A expenses as a percentage of net sales to be less than 6.0%,
despite an $18 million increase in heritage pension costs that
resulted from a lower discount rate.
-
Interest expense to approximate $75 million to $80 million.
-
Estimated effective income tax rate to approximate 31%, excluding
discrete events.
-
Consolidated EBITDA to range from $835 million to $875 million.
-
Capital expenditures to approximate $320 million, including $35
million of synergy-related capital and $80 million for the continued
development of the new Medina limestone quarry outside of San Antonio.
The Medina quarry is rail connected and will be able to ship
aggregates products to South Texas, including Houston.
Mr. Nye concluded, “We are excited about the solid foundation we have
created and the transformational power of Martin Marietta’s business
model, which positions us to deliver substantial value to shareholders
going forward. The integration of TXI continues on schedule and will, at
a minimum, yield synergies in line with our updated guidance. We will
continue to operate the business with rigorous discipline. The growing
demand for building materials should allow us to strengthen our balance
sheet, increase our financial flexibility and invest in our business,
all while returning significant value to our shareholders through our
repurchase program.”
RISKS TO OUTLOOK
The full-year outlook includes management’s assessment of the likelihood
of certain risks and uncertainties that will affect performance. The
most significant risks to the Company’s performance will be Congress’
actions and timing surrounding federal highway funding and uncertainty
over the funding mechanism for the Highway Trust Fund. Management
currently expects Congress to extend federal highway funding through
continuing resolution through the fall of 2015. Further, a decline in
consumer confidence may negatively impact investment in construction
projects. While both MAP-21 and TIFIA credit assistance are excluded
from the U.S. debt ceiling limit, this issue may have a significant
impact on the economy and, consequently, construction activity. Other
risks and uncertainties related to the Company’s future performance
include, but are not limited to: both price and volume, and a recurrence
of widespread decline in aggregates volume negatively affecting
aggregates price; the termination, capping and/or reduction of the
federal and/or state gasoline tax(es) or other revenue related to
infrastructure construction; a significant change in the funding
patterns for traditional federal, state and/or local infrastructure
projects; a reduction in defense spending, and the subsequent impact on
construction activity on or near military bases; a decline in
nonresidential construction; a decline in energy-related drilling
activity resulting from a sustained period of low global oil prices or
changes in oil production patterns in response to this decline and
certain regulatory or other economic factors; a slowdown in the
residential construction recovery, or some combination thereof; a
reduction in economic activity in the Company’s Midwest states resulting
from reduced funding levels provided by the Agricultural Act of 2014 and
a reduction in capital investment by the railroads; an increase in the
cost of compliance with governmental laws and regulations; unexpected
equipment failures, unscheduled maintenance, industrial accident or
other prolonged and/or significant disruption to our cement production
facilities; and the possibility that certain expected synergies and
operating efficiencies in connection with the TXI acquisition are not
realized within the expected time-frames or at all. Further, increased
highway construction funding pressures resulting from either federal or
state issues can affect profitability. If these negatively affect
transportation budgets more than in the past, construction spending
could be reduced. Cement is subject to cyclical supply and demand and
price fluctuations. The Magnesia Specialties business essentially runs
at capacity; therefore any unplanned changes in costs or realignment of
customers introduce volatility to the earnings of this segment.
The Company’s principal business serves customers in aggregates-related
construction markets. This concentration could increase the risk of
potential losses on customer receivables; however, payment bonds
normally posted on public projects, together with lien rights on private
projects, help to mitigate the risk of uncollectible receivables. The
level of aggregates demand in the Company’s end-use markets, production
levels and the management of production costs will affect the operating
leverage of the Aggregates business and, therefore, profitability.
Production costs in the Aggregates business are also sensitive to energy
and raw material prices, both directly and indirectly. Diesel fuel and
other consumables change production costs directly through consumption
or indirectly by increased energy-related input costs, such as steel,
explosives, tires and conveyor belts. Fluctuating diesel fuel pricing
also affects transportation costs, primarily through fuel surcharges in
the Company’s long-haul distribution network. The Cement business is
also energy intensive and fluctuations in the price of coal affects
costs. The Magnesia Specialties business is sensitive to changes in
domestic steel capacity utilization and the absolute price and
fluctuations in the cost of natural gas.
Transportation in the Company’s long-haul network, particularly the
supply of railcars and locomotive power and condition of rail
infrastructure to move trains, affects the Company’s ability to
efficiently transport aggregate into certain markets, most notably
Texas, Florida and the Gulf Coast. In addition, availability of railcars
and locomotives affects the Company’s ability to move dolomitic lime, a
key raw material for magnesia chemicals, to both the Company’s plant in
Manistee, Michigan, and customers. The availability of trucks, drivers
and railcars to transport the Company’s product, particularly in markets
experiencing high growth and increased demand, is also a risk and
pressures the associated costs.
All of the Company’s businesses are also subject to weather-related
risks that can significantly affect production schedules and
profitability. The first and fourth quarters are most adversely affected
by winter weather. Hurricane activity in the Atlantic Ocean and Gulf
Coast generally is most active during the third and fourth quarters.
Risks to the outlook also include shipment declines as a result of
economic events beyond the Company’s control. In addition to the impact
on nonresidential and residential construction, the Company is exposed
to risk in its estimated outlook from credit markets and the
availability of and interest cost related to its debt.
The Company’s future performance is also exposed to risks from tax
reform at the federal and state levels.
CONFERENCE CALL INFORMATION
The Company will discuss its first quarter earnings results on a
conference call and online web simulcast today (April 30, 2015). The
live broadcast of the Martin Marietta conference call will begin at 2:00
p.m. Eastern Time today. An online replay will be available
approximately two hours following the conclusion of the live broadcast.
A link to these events will be available at the Company’s website.
Additionally, the Company has posted supplemental financial information
related to its first-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 25543184.
Martin Marietta, an American-based company and a member of the S&P 500
Index, is a leading supplier of aggregates and heavy building materials,
with operations spanning 32 states, Canada and the Caribbean. Dedicated
teams at Martin Marietta supply the resources for the roads, sidewalks
and foundations on which we live. 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.
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. Forward-looking
statements give the investor our expectations or forecasts of future
events. You can identify these statements by the fact that they
do not relate only to historical or current facts. They may use
words such as "anticipate," "expect," "should be," "believe," “will”,
and other words of similar meaning in connection with future events or
future operating or financial performance. Any or all of our
forward-looking statements here and in other publications may turn out
to be wrong.
Factors that the Company currently believes could cause actual
results to differ materially from the forward-looking statements in this
press release include, but are not limited to, Congress’ actions
and timing surrounding federal highway funding and uncertainty
over the funding mechanism for the Highway Trust Fund; the
performance of the United States economy and the resolution and impact
of the debt ceiling and sequestration issues; widespread decline in
aggregates pricing; the history of both cement and ready mixed concrete,
to be subject to significant changes in supply, demand and price; the
termination, capping and/or reduction of the federal and/or state
gasoline tax(es) or other revenue related to infrastructure
construction; the level and timing of federal and state transportation
funding, most particularly in Texas, North Carolina, Iowa, Colorado and
Georgia; 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 slowdown in energy-related drilling activity,
particularly in Texas; a slowdown in residential construction recovery;
a reduction in construction activity and related shipments due to a
decline in funding under the domestic farm bill; unfavorable weather
conditions, particularly Atlantic Ocean hurricane activity, the late
start to spring or the early onset of winter and the impact of a drought
or excessive rainfall in the markets served by the Company; the
volatility of fuel costs, particularly diesel fuel, and the impact on
the cost of other consumables, namely steel, explosives, tires and
conveyor belts, and with respect to the Specialty Products business,
natural gas; continued increases in the cost of other repair and supply
parts; unexpected equipment failures, unscheduled maintenance,
industrial accident or other prolonged and/or significant disruption to
cement production facilities; increasing governmental regulation,
including environmental laws; transportation availability, notably the
availability of railcars and locomotive power to move trains to supply
the Company’s Texas, Florida and Gulf Coast markets; increased
transportation costs, including increases from higher passed-through
energy 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 our materials, particularly in areas
with significant energy-related activity, such as Texas and Colorado;
availability and cost of construction equipment in the United States;
weakening in the steel industry markets served by the Company’s
dolomitic lime products; proper functioning of information technology
and automated operating systems to manage or support operations;
inflation and its effect on both production and interest costs; ability
to successfully integrate acquisitions quickly and in a cost-effective
manner and achieve anticipated profitability to maintain compliance with
the 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; downward pressure on the Company’s common stock price and
its impact on goodwill impairment evaluations; reduction of the
Company’s credit rating to non-investment grade resulting from strategic
acquisitions; and other risk factors listed from time to time found in
the Company’s filings with the SEC. Other factors besides those
listed here may also adversely affect the Company, and may be material
to the Company. The Company assumes no obligation to update any
such forward-looking statements.
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MARTIN MARIETTA MATERIALS, INC.
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Unaudited Statements of Earnings
|
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(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
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2015
|
|
|
2014
|
|
Net sales
|
|
|
|
$
|
631.9
|
|
|
|
$
|
379.7
|
|
|
Freight and delivery revenues
|
|
|
|
|
59.5
|
|
|
|
|
49.0
|
|
|
Total revenues
|
|
|
|
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691.4
|
|
|
|
|
428.7
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
557.6
|
|
|
|
|
353.9
|
|
|
Freight and delivery costs
|
|
|
|
|
59.5
|
|
|
|
|
49.0
|
|
|
Total cost of revenues
|
|
|
|
|
617.1
|
|
|
|
|
402.9
|
|
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Gross profit
|
|
|
|
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74.3
|
|
|
|
|
25.8
|
|
|
|
|
|
|
|
|
|
|
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Selling, general and administrative expenses
|
|
|
|
|
49.5
|
|
|
|
|
34.2
|
|
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Acquisition-related expenses, net
|
|
|
|
|
1.6
|
|
|
|
|
9.5
|
|
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Other operating (income), net
|
|
|
|
|
(2.4
|
)
|
|
|
|
(2.0
|
)
|
|
Earnings (Loss) from operations
|
|
|
|
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25.6
|
|
|
|
|
(15.9
|
)
|
|
|
|
|
|
|
|
|
|
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Interest expense
|
|
|
|
|
19.3
|
|
|
|
|
12.2
|
|
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Other nonoperating expenses, net
|
|
|
|
|
0.9
|
|
|
|
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3.5
|
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Earnings (Loss) from continuing operations before taxes on income
|
|
|
|
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5.4
|
|
|
|
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(31.6
|
)
|
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Income tax benefit
|
|
|
|
|
(0.8
|
)
|
|
|
|
(8.5
|
)
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Earnings (Loss) from continuing operations
|
|
|
|
|
6.2
|
|
|
|
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(23.1
|
)
|
|
|
|
|
|
|
|
|
|
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Discontinued operations, net of related income taxes
|
|
|
|
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-
|
|
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-
|
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|
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|
|
|
|
|
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Consolidated net earnings (loss)
|
|
|
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6.2
|
|
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(23.1
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)
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Less: Net earnings (loss) attributable to noncontrolling interests
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|
|
|
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0.1
|
|
|
|
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(1.5
|
)
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to Martin Marietta Materials, Inc.
|
|
|
|
$
|
6.1
|
|
|
|
$
|
(21.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
Basic from continuing operations attributable to common shareholders
|
|
|
|
$
|
0.07
|
|
|
|
$
|
(0.47
|
)
|
|
Discontinued operations attributable to common shareholders
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
$
|
0.07
|
|
|
|
$
|
(0.47
|
)
|
|
|
|
|
|
|
|
|
|
|
Diluted from continuing operations attributable to common
shareholders
|
|
|
|
$
|
0.07
|
|
|
|
$
|
(0.47
|
)
|
|
Discontinued operations attributable to common shareholders
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
$
|
0.07
|
|
|
|
$
|
(0.47
|
)
|
|
|
|
|
|
|
|
|
|
|
Dividends per common share
|
|
|
|
$
|
0.40
|
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
67.4
|
|
|
|
|
46.3
|
|
|
Diluted
|
|
|
|
|
67.7
|
|
|
|
|
46.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC.
|
|
Unaudited Financial Highlights
|
|
(In millions)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Aggregates Business:
|
|
|
|
|
|
|
|
|
Mid-America Group
|
|
|
|
$
|
129.7
|
|
|
|
$
|
106.5
|
|
|
Southeast Group
|
|
|
|
|
59.7
|
|
|
|
|
55.4
|
|
|
West Group
|
|
|
|
|
287.1
|
|
|
|
|
160.4
|
|
|
Total Aggregates Business
|
|
|
|
|
476.5
|
|
|
|
|
322.3
|
|
|
Cement
|
|
|
|
|
96.6
|
|
|
|
|
-
|
|
|
Magnesia Specialties
|
|
|
|
|
58.8
|
|
|
|
|
57.4
|
|
|
Total
|
|
|
|
$
|
631.9
|
|
|
|
$
|
379.7
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss):
|
|
|
|
|
|
|
|
|
Aggregates Business:
|
|
|
|
|
|
|
|
|
Mid-America Group
|
|
|
|
$
|
7.1
|
|
|
|
$
|
(1.5
|
)
|
|
Southeast Group
|
|
|
|
|
3.1
|
|
|
|
|
(2.9
|
)
|
|
West Group
|
|
|
|
|
28.5
|
|
|
|
|
12.0
|
|
|
Total Aggregates Business
|
|
|
|
|
38.7
|
|
|
|
|
7.6
|
|
|
Cement
|
|
|
|
|
19.0
|
|
|
|
|
-
|
|
|
Magnesia Specialties
|
|
|
|
|
20.2
|
|
|
|
|
18.8
|
|
|
Corporate
|
|
|
|
|
(3.6
|
)
|
|
|
|
(0.6
|
)
|
|
Total
|
|
|
|
$
|
74.3
|
|
|
|
$
|
25.8
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
Aggregates Business:
|
|
|
|
|
|
|
|
|
Mid-America Group
|
|
|
|
$
|
12.9
|
|
|
|
$
|
13.0
|
|
|
Southeast Group
|
|
|
|
|
4.3
|
|
|
|
|
4.2
|
|
|
West Group
|
|
|
|
|
15.7
|
|
|
|
|
10.9
|
|
|
Total Aggregates Business
|
|
|
|
|
32.9
|
|
|
|
|
28.1
|
|
|
Cement
|
|
|
|
|
6.7
|
|
|
|
|
-
|
|
|
Magnesia Specialties
|
|
|
|
|
2.4
|
|
|
|
|
2.4
|
|
|
Corporate
|
|
|
|
|
7.5
|
|
|
|
|
3.7
|
|
|
Total
|
|
|
|
$
|
49.5
|
|
|
|
$
|
34.2
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) from operations:
|
|
|
|
|
|
|
|
|
Aggregates Business:
|
|
|
|
|
|
|
|
|
Mid-America Group
|
|
|
|
$
|
(4.2
|
)
|
|
|
$
|
(11.8
|
)
|
|
Southeast Group
|
|
|
|
|
(1.5
|
)
|
|
|
|
(6.1
|
)
|
|
West Group
|
|
|
|
|
14.5
|
|
|
|
|
2.1
|
|
|
Total Aggregates Business
|
|
|
|
|
8.8
|
|
|
|
|
(15.8
|
)
|
|
Cement
|
|
|
|
|
12.2
|
|
|
|
|
-
|
|
|
Magnesia Specialties
|
|
|
|
|
17.8
|
|
|
|
|
16.3
|
|
|
Corporate
|
|
|
|
|
(13.2
|
)
|
|
|
|
(16.4
|
)
|
|
Total
|
|
|
|
$
|
25.6
|
|
|
|
$
|
(15.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC.
|
|
Unaudited Financial Highlights
|
|
(In millions)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Net sales by product line:
|
|
|
|
|
|
|
|
|
Heritage:
|
|
|
|
|
|
|
|
|
Aggregates Business:
|
|
|
|
|
|
|
|
|
Aggregates
|
|
|
|
$
|
300.3
|
|
|
|
$
|
263.9
|
|
|
Asphalt
|
|
|
|
|
9.6
|
|
|
|
|
10.5
|
|
|
Ready Mixed Concrete
|
|
|
|
|
41.2
|
|
|
|
|
38.0
|
|
|
Road Paving
|
|
|
|
|
7.1
|
|
|
|
|
9.9
|
|
|
Total Aggregates Business
|
|
|
|
|
358.2
|
|
|
|
|
322.3
|
|
|
Magnesia Specialties Business
|
|
|
|
|
58.8
|
|
|
|
|
57.4
|
|
|
Acquisition:
|
|
|
|
|
|
|
|
|
Aggregates Business:
|
|
|
|
|
|
|
|
|
Aggregates
|
|
|
|
|
31.9
|
|
|
|
|
-
|
|
|
Ready Mixed Concrete
|
|
|
|
|
86.4
|
|
|
|
|
-
|
|
|
Total Aggregates Business
|
|
|
|
|
118.3
|
|
|
|
|
-
|
|
|
Cement Business
|
|
|
|
|
96.6
|
|
|
|
|
-
|
|
|
Total
|
|
|
|
$
|
631.9
|
|
|
|
$
|
379.7
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss) by product line:
|
|
|
|
|
|
|
|
|
Heritage:
|
|
|
|
|
|
|
|
|
Aggregates Business:
|
|
|
|
|
|
|
|
|
Aggregates
|
|
|
|
$
|
34.5
|
|
|
|
$
|
10.1
|
|
|
Asphalt
|
|
|
|
|
(1.5
|
)
|
|
|
|
(1.4
|
)
|
|
Ready Mixed Concrete
|
|
|
|
|
5.2
|
|
|
|
|
2.9
|
|
|
Road Paving
|
|
|
|
|
(3.3
|
)
|
|
|
|
(4.0
|
)
|
|
Total Aggregates Business
|
|
|
|
|
34.9
|
|
|
|
|
7.6
|
|
|
Magnesia Specialties Business
|
|
|
|
|
20.2
|
|
|
|
|
18.8
|
|
|
Corporate
|
|
|
|
|
(2.8
|
)
|
|
|
|
(0.6
|
)
|
|
Acquisition:
|
|
|
|
|
|
|
|
|
Aggregates Business:
|
|
|
|
|
|
|
|
|
Aggregates
|
|
|
|
|
6.9
|
|
|
|
|
-
|
|
|
Ready Mixed Concrete
|
|
|
|
|
(3.1
|
)
|
|
|
|
-
|
|
|
Total Aggregates Business
|
|
|
|
|
3.8
|
|
|
|
|
-
|
|
|
Cement Business
|
|
|
|
|
19.0
|
|
|
|
|
-
|
|
|
Corporate
|
|
|
|
|
(0.8
|
)
|
|
|
|
-
|
|
|
Total
|
|
|
|
$
|
74.3
|
|
|
|
$
|
25.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
$
|
59.8
|
|
|
|
$
|
40.1
|
|
|
Depletion
|
|
|
|
|
3.1
|
|
|
|
|
1.1
|
|
|
Amortization
|
|
|
|
|
4.4
|
|
|
|
|
1.3
|
|
|
|
|
|
|
$
|
67.3
|
|
|
|
$
|
42.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC.
|
|
Unaudited Financial Highlights
|
|
(Dollars in millions)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31
|
|
|
|
|
|
Heritage
Martin
Marietta(1)
|
|
|
Acquired
Operations(2)
|
|
|
Nonrecurring
TXI
Transaction
Items(3)
|
|
|
Consolidated
|
|
|
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
Net sales
|
|
|
|
$
|
417.0
|
|
|
|
$
|
214.9
|
|
|
$
|
-
|
|
|
|
$
|
631.9
|
|
|
Freight and delivery revenues
|
|
|
|
|
48.6
|
|
|
|
|
10.9
|
|
|
|
-
|
|
|
|
|
59.5
|
|
|
Total revenues
|
|
|
|
|
465.6
|
|
|
|
|
225.8
|
|
|
|
-
|
|
|
|
|
691.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
364.7
|
|
|
|
|
192.9
|
|
|
|
-
|
|
|
|
|
557.6
|
|
|
Freight and delivery costs
|
|
|
|
|
48.6
|
|
|
|
|
10.9
|
|
|
|
-
|
|
|
|
|
59.5
|
|
|
Total cost of revenues
|
|
|
|
|
413.3
|
|
|
|
|
203.8
|
|
|
|
-
|
|
|
|
|
617.1
|
|
|
Gross profit
|
|
|
|
|
52.3
|
|
|
|
|
22.0
|
|
|
|
-
|
|
|
|
|
74.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses(4)
|
|
|
|
|
36.7
|
|
|
|
|
12.8
|
|
|
|
-
|
|
|
|
|
49.5
|
|
|
Acquisition-related expenses, net
|
|
|
|
|
0.2
|
|
|
|
|
-
|
|
|
|
1.4
|
|
|
|
|
1.6
|
|
|
Other operating (income) expense, net
|
|
|
|
|
(2.5
|
)
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
|
(2.4
|
)
|
|
Earnings (Loss) from operations
|
|
|
|
$
|
17.9
|
|
|
|
$
|
9.1
|
|
|
$
|
(1.4
|
)
|
|
|
$
|
25.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Heritage Martin Marietta is consolidated 2015 results
excluding the operating results of acquired TXI locations and two
small acquisitions closed in the first quarter of 2015 and
nonrecurring items directly attributable to the TXI acquisition.
|
|
(2) Acquired operations reflect the operating results of all
acquired TXI locations and two small acquisitions closed in the
first quarter.
|
|
(3) Nonrecurring TXI transaction items are attributable to the TXI
acquisition and reflect integration expenses.
|
|
(4) Selling, general and administrative expenses for acquired
operations include the allocation of $1.4 million of Corporate
overhead.
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31
|
|
|
|
|
|
Heritage
Martin
Marietta
|
|
|
Heritage
Martin
Marietta
|
|
|
Variance(5)-
Favorable
(Unfavorable)
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
Net sales
|
|
|
|
$
|
417.0
|
|
|
|
$
|
379.7
|
|
|
|
$
|
37.3
|
|
|
Freight and delivery revenues
|
|
|
|
|
48.6
|
|
|
|
|
49.0
|
|
|
|
|
(0.4
|
)
|
|
Total revenues
|
|
|
|
|
465.6
|
|
|
|
|
428.7
|
|
|
|
|
36.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
364.7
|
|
|
|
|
353.9
|
|
|
|
|
(10.8
|
)
|
|
Freight and delivery costs
|
|
|
|
|
48.6
|
|
|
|
|
49.0
|
|
|
|
|
0.4
|
|
|
Total cost of revenues
|
|
|
|
|
413.3
|
|
|
|
|
402.9
|
|
|
|
|
(10.4
|
)
|
|
Gross profit
|
|
|
|
|
52.3
|
|
|
|
|
25.8
|
|
|
|
|
26.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
36.7
|
|
|
|
|
34.2
|
|
|
|
|
(2.5
|
)
|
|
Acquisition-related expenses, net
|
|
|
|
|
0.2
|
|
|
|
|
9.5
|
|
|
|
|
9.3
|
|
|
Other operating (income) & expenses, net
|
|
|
|
|
(2.5
|
)
|
|
|
|
(2.0
|
)
|
|
|
|
0.5
|
|
|
Earnings (Loss) from operations
|
|
|
|
$
|
17.9
|
|
|
|
$
|
(15.9
|
)
|
|
|
$
|
33.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) The variance reflects the change between Heritage Martin
Marietta 2015 and Heritage Martin Marietta 2014.
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC.
|
|
Unaudited Financial Highlights - West Group
|
|
(Dollars in millions)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31
|
|
|
|
|
|
Heritage West
|
|
|
Acquired
Operations
|
|
|
West
|
|
|
|
|
|
2015(1)
|
|
|
2015(2)
|
|
|
2015
|
|
Net sales
|
|
|
|
$
|
168.9
|
|
|
|
$
|
118.2
|
|
|
|
$
|
287.1
|
|
Freight and delivery revenues
|
|
|
|
|
28.1
|
|
|
|
|
5.3
|
|
|
|
|
33.4
|
|
Total revenues
|
|
|
|
|
197.0
|
|
|
|
|
123.5
|
|
|
|
|
320.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
144.4
|
|
|
|
|
114.2
|
|
|
|
|
258.6
|
|
Freight and delivery costs
|
|
|
|
|
28.1
|
|
|
|
|
5.3
|
|
|
|
|
33.4
|
|
Total cost of revenues
|
|
|
|
|
172.5
|
|
|
|
|
119.5
|
|
|
|
|
292.0
|
|
Gross profit
|
|
|
|
$
|
24.5
|
|
|
|
$
|
4.0
|
|
|
|
$
|
28.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Heritage West 2015 results reflect the 2015 West results less
the operating results of acquired TXI locations.
|
|
(2) Acquired operations reflect the operating results for all
acquired TXI aggregates and ready mixed concrete operations
reported in the West Group and one small acquisition closed in the
first quarter of 2015.
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31
|
|
|
|
|
|
Heritage West
|
|
|
West
|
|
|
Variance(3)-
Favorable
(Unfavorable)
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
Net sales
|
|
|
|
$
|
168.9
|
|
|
$
|
160.4
|
|
|
$
|
8.5
|
|
|
Freight and delivery revenues
|
|
|
|
|
28.1
|
|
|
|
30.3
|
|
|
|
(2.2
|
)
|
|
Total revenues
|
|
|
|
|
197.0
|
|
|
|
190.7
|
|
|
|
6.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
144.4
|
|
|
|
148.4
|
|
|
|
4.0
|
|
|
Freight and delivery costs
|
|
|
|
|
28.1
|
|
|
|
30.3
|
|
|
|
2.2
|
|
|
Total cost of revenues
|
|
|
|
|
172.5
|
|
|
|
178.7
|
|
|
|
6.2
|
|
|
Gross profit
|
|
|
|
$
|
24.5
|
|
|
$
|
12.0
|
|
|
$
|
12.5
|
|
|
|
|
|
|
(3) The variance reflects the change between Heritage West 2015
and West 2014.
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC.
|
|
Balance Sheet Data
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
(Unaudited)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
56.4
|
|
|
$
|
108.7
|
|
|
$
|
35.8
|
|
Accounts receivable, net
|
|
|
|
|
381.4
|
|
|
|
421.0
|
|
|
|
242.6
|
|
Inventories, net
|
|
|
|
|
505.0
|
|
|
|
484.9
|
|
|
|
354.7
|
|
Other current assets
|
|
|
|
|
338.9
|
|
|
|
274.2
|
|
|
|
125.1
|
|
Property, plant and equipment, net
|
|
|
|
|
3,365.1
|
|
|
|
3,402.8
|
|
|
|
1,793.5
|
|
Intangible assets, net
|
|
|
|
|
2,663.4
|
|
|
|
2,664.0
|
|
|
|
664.4
|
|
Other noncurrent assets
|
|
|
|
|
107.4
|
|
|
|
108.8
|
|
|
|
39.2
|
|
Total assets
|
|
|
|
$
|
7,417.6
|
|
|
$
|
7,464.4
|
|
|
$
|
3,255.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current maturities of long-term debt and short-term facilities
|
|
|
|
$
|
14.4
|
|
|
$
|
14.3
|
|
|
$
|
12.4
|
|
Other current liabilities
|
|
|
|
|
329.2
|
|
|
|
382.3
|
|
|
|
181.4
|
|
Long-term debt (excluding current maturities)
|
|
|
|
|
1,566.6
|
|
|
|
1,571.1
|
|
|
|
1,055.5
|
|
Other noncurrent liabilities
|
|
|
|
|
1,165.2
|
|
|
|
1,144.0
|
|
|
|
461.7
|
|
Total equity
|
|
|
|
|
4,342.2
|
|
|
|
4,352.7
|
|
|
|
1,544.3
|
|
Total liabilities and equity
|
|
|
|
$
|
7,417.6
|
|
|
$
|
7,464.4
|
|
|
$
|
3,255.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC.
|
|
Unaudited Statements of Cash Flows
|
|
(In millions)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
Consolidated net earnings (loss)
|
|
|
|
$
|
6.2
|
|
|
|
$
|
(23.1
|
)
|
|
Adjustments to reconcile consolidated net earnings (loss) to net
cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
|
67.3
|
|
|
|
|
42.5
|
|
|
Stock-based compensation expense
|
|
|
|
|
2.9
|
|
|
|
|
1.4
|
|
|
Gains on divestitures and sales of assets
|
|
|
|
|
(1.6
|
)
|
|
|
|
(1.1
|
)
|
|
Deferred income taxes
|
|
|
|
|
27.8
|
|
|
|
|
(5.1
|
)
|
|
Excess tax benefits from stock-based compensation
|
|
|
|
|
(0.1
|
)
|
|
|
|
(0.6
|
)
|
|
Other items, net
|
|
|
|
|
1.1
|
|
|
|
|
1.2
|
|
|
Changes in operating assets and liabilities, net of effects of
acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
|
40.0
|
|
|
|
|
2.8
|
|
|
Inventories, net
|
|
|
|
|
(19.1
|
)
|
|
|
|
(7.4
|
)
|
|
Accounts payable
|
|
|
|
|
(20.3
|
)
|
|
|
|
(4.8
|
)
|
|
Other assets and liabilities, net
|
|
|
|
|
(69.1
|
)
|
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
35.1
|
|
|
|
|
6.6
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
|
|
|
|
(56.1
|
)
|
|
|
|
(36.9
|
)
|
|
Acquisitions, net
|
|
|
|
|
(10.6
|
)
|
|
|
|
-
|
|
|
Proceeds from divestitures and sales of assets
|
|
|
|
|
1.5
|
|
|
|
|
1.4
|
|
|
Repayments from affiliate
|
|
|
|
|
1.8
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for investing activities
|
|
|
|
|
(63.4
|
)
|
|
|
|
(35.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings of long-term debt
|
|
|
|
|
-
|
|
|
|
|
60.0
|
|
|
Repayments of long-term debt
|
|
|
|
|
(4.7
|
)
|
|
|
|
(23.1
|
)
|
|
Payments on capital leases
|
|
|
|
|
(0.8
|
)
|
|
|
|
(0.5
|
)
|
|
Change in bank overdraft
|
|
|
|
|
(0.2
|
)
|
|
|
|
(2.6
|
)
|
|
Dividends paid
|
|
|
|
|
(28.4
|
)
|
|
|
|
(18.6
|
)
|
|
Excess tax benefits from stock-based compensation
|
|
|
|
|
0.1
|
|
|
|
|
0.6
|
|
|
Issuances of common stock
|
|
|
|
|
10.0
|
|
|
|
|
6.5
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used for) provided by financing activities
|
|
|
|
|
(24.0
|
)
|
|
|
|
22.3
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
|
|
(52.3
|
)
|
|
|
|
(6.6
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
|
|
|
108.7
|
|
|
|
|
42.4
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
|
|
$
|
56.4
|
|
|
|
$
|
35.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC.
|
|
Unaudited Operational Highlights
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31, 2015
|
|
|
|
|
|
Volume
|
|
|
Pricing
|
|
Volume/Pricing Variance (1)
|
|
|
|
|
|
|
|
|
Heritage Aggregates Product Line: (2)
|
|
|
|
|
|
|
|
|
Mid-America Group
|
|
|
|
18.1
|
%
|
|
|
3.2
|
%
|
|
Southeast Group
|
|
|
|
2.2
|
%
|
|
|
6.0
|
%
|
|
West Group
|
|
|
|
(6.1
|
%)
|
|
|
17.6
|
%
|
|
Heritage Aggregates Operations
|
|
|
|
3.7
|
%
|
|
|
10.5
|
%
|
|
Aggregates Product Line (3)
|
|
|
|
17.1
|
%
|
|
|
11.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
Shipments (tons in thousands)
|
|
|
|
2015
|
|
|
2014
|
|
Heritage Aggregates Product Line: (2)
|
|
|
|
|
|
|
|
|
Mid-America Group
|
|
|
|
10,101
|
|
|
|
8,550
|
|
|
Southeast Group
|
|
|
|
4,090
|
|
|
|
4,001
|
|
|
West Group
|
|
|
|
11,332
|
|
|
|
12,068
|
|
|
Heritage Aggregates Operations
|
|
|
|
25,523
|
|
|
|
24,619
|
|
|
Acquisitions
|
|
|
|
3,313
|
|
|
|
-
|
|
|
Aggregates Product Line (3)
|
|
|
|
28,836
|
|
|
|
24,619
|
|
|
|
|
|
|
|
|
|
|
|
(1) Volume/pricing variances reflect the percentage increase
(decrease) from the comparable period in the prior year.
|
|
|
|
(2) Heritage Aggregates Product Line and Heritage Aggregates
Operations exclude volume and pricing data for acquisitions
that have not been included in prior-year operations for the
comparable period.
|
|
|
|
(3) Aggregates Product Line includes acquisitions from the date
of acquisition and divestitures through the date of disposal.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
Heritage:
|
|
|
|
|
|
|
|
|
Aggregates tons - external customers
|
|
|
|
|
24,632
|
|
|
|
23,719
|
|
Internal aggregates tons used in other product lines
|
|
|
|
|
891
|
|
|
|
900
|
|
Total aggregates tons
|
|
|
|
|
25,523
|
|
|
|
24,619
|
|
|
|
|
|
|
|
|
|
|
Asphalt tons - external customers
|
|
|
|
|
213
|
|
|
|
248
|
|
Internal asphalt tons used in road paving business
|
|
|
|
|
57
|
|
|
|
78
|
|
Total asphalt tons
|
|
|
|
|
270
|
|
|
|
326
|
|
|
|
|
|
|
|
|
|
|
Ready Mixed Concrete - cubic yards
|
|
|
|
|
399
|
|
|
|
407
|
|
|
|
|
|
|
|
|
|
|
Acquisitions:
|
|
|
|
|
|
|
|
|
Aggregates tons - external customers
|
|
|
|
|
2,500
|
|
|
|
-
|
|
Internal aggregates tons used in other product lines
|
|
|
|
|
813
|
|
|
|
-
|
|
Total aggregates tons
|
|
|
|
|
3,313
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Ready Mixed Concrete - cubic yards(4)
|
|
|
|
|
964
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cement tons-external customers
|
|
|
|
|
1,025
|
|
|
|
-
|
|
Internal cement tons used in other product lines
|
|
|
|
|
192
|
|
|
|
-
|
|
Total Cement tons(5)
|
|
|
|
|
1,217
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average unit sales price by product line (including internal
sales):
|
|
|
|
|
|
|
|
|
Heritage:
|
|
|
|
|
|
|
|
|
Aggregates (per ton)
|
|
|
|
$
|
11.96
|
|
|
$
|
10.82
|
|
Asphalt (per ton)
|
|
|
|
$
|
43.65
|
|
|
$
|
42.26
|
|
Ready Mixed Concrete (per cubic yard)
|
|
|
|
$
|
98.88
|
|
|
$
|
89.27
|
|
|
|
|
|
|
|
|
|
|
Acquisitions:
|
|
|
|
|
|
|
|
|
Aggregates (per ton)
|
|
|
|
$
|
12.83
|
|
|
$
|
-
|
|
Ready Mixed Concrete (per cubic yard)(4)
|
|
|
|
$
|
88.75
|
|
|
$
|
-
|
|
Cement (per ton)(5)
|
|
|
|
$
|
93.41
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
(4) Ready mix operations acquired by Martin Marietta on July 1,
2014. For comparative purposes, for the three months ended
February 28, 2014, TXI shipped 1,085 cubic yards of ready mixed
concrete from these operations. Assuming consistent classification
of products included in ready mixed concrete sales, average
selling price for the quarter ended March 31, 2015 was 3.2% higher
compared with the three months ended February 28, 2014.
|
|
|
|
(5) Cement operations acquired by Martin Marietta on July 1,
2014. For comparative purposes, for the quarter ended March 31,
2015, cement tons shipped or used in other product lines increased
6.7% compared with the three months ended February 28, 2014.
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC.
|
|
Non-GAAP Financial Measures
|
|
(Dollars in millions)
|
|
|
|
Gross margin as a percentage of net sales and operating margin as
a percentage of net sales represent non-GAAP measures. The Company
presents these ratios calculated based on net sales, as it is
consistent with the basis by which management reviews the
Company's operating results. Further, management believes it is
consistent with the basis by which investors analyze the Company's
operating results, given that freight and delivery revenues and
costs represent pass-throughs and have no profit markup. Gross
margin and operating margin calculated as percentages of total
revenues represent the most directly comparable financial measures
calculated in accordance with generally accepted accounting
principles ("GAAP"). The following tables present the calculations
of gross margin and operating margin for the three months ended
March 31, 2015 and 2014, in accordance with GAAP and
reconciliations of the ratios as percentages of total revenues to
percentages of net sales:
|
|
|
|
Gross Margin in Accordance with Generally Accepted Accounting
Principles
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
Gross profit
|
|
|
|
$
|
74.3
|
|
|
|
$
|
25.8
|
|
|
Total revenues
|
|
|
|
$
|
691.4
|
|
|
|
$
|
428.7
|
|
|
Gross margin
|
|
|
|
|
10.7
|
%
|
|
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Gross Margin Excluding Freight and Delivery Revenues
|
|
|
|
March 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
Gross profit
|
|
|
|
$
|
74.3
|
|
|
|
$
|
25.8
|
|
|
Total revenues
|
|
|
|
$
|
691.4
|
|
|
|
$
|
428.7
|
|
|
Less: Freight and delivery revenues
|
|
|
|
|
(59.5
|
)
|
|
|
|
(49.0
|
)
|
|
Net sales
|
|
|
|
$
|
631.9
|
|
|
|
$
|
379.7
|
|
|
Gross margin excluding freight and delivery revenues
|
|
|
|
|
11.8
|
%
|
|
|
|
6.8
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating Margin in Accordance with Generally Accepted
Accounting Principles
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
Earnings (Loss) from operations
|
|
|
|
$
|
25.6
|
|
|
|
$
|
(15.9
|
)
|
|
Total revenues
|
|
|
|
$
|
691.4
|
|
|
|
$
|
428.7
|
|
|
Operating margin
|
|
|
|
|
3.7
|
%
|
|
|
|
(3.7
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Operating Margin Excluding Freight and Delivery Revenues
|
|
|
|
March 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
Earnings (Loss) from operations
|
|
|
|
$
|
25.6
|
|
|
|
$
|
(15.9
|
)
|
|
Total revenues
|
|
|
|
$
|
691.4
|
|
|
|
$
|
428.7
|
|
|
Less: Freight and delivery revenues
|
|
|
|
|
(59.5
|
)
|
|
|
|
(49.0
|
)
|
|
Net sales
|
|
|
|
$
|
631.9
|
|
|
|
$
|
379.7
|
|
|
Operating margin excluding freight and delivery revenues
|
|
|
|
|
4.0
|
%
|
|
|
|
(4.2
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company presents the earnings per diluted share impact of
acquisition-related expenses, net, related to the TXI acquisition,
which represents a non-GAAP measure.
|
|
It is presented for investors and analysts to evaluate and
forecast the Company's ongoing financial results, as
acquisition-related expenses related to TXI are nonrecurring.
|
|
|
|
The following shows the calculation of the impact of
acquisition-related expenses, net, related to the combination with
TXI on the loss per diluted share for the quarter ended March 31,
2014:
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related expenses, net, related to the business
combination with TXI
|
|
|
|
$
|
9.5
|
|
|
|
|
|
Income tax benefit
|
|
|
|
|
(3.8
|
)
|
|
|
|
|
After-tax impact of acquisition-related expenses, net, related to
the business combination with TXI
|
|
|
|
$
|
5.7
|
|
|
|
|
|
Diluted average number of common shares outstanding
|
|
|
|
|
46.3
|
|
|
|
|
|
Per diluted share impact of acquisition-related expenses, net,
related to the business combination with TXI
|
|
|
|
$
|
(0.12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company presents the increase in heritage aggregates product
line shipments for the West Group and the Aggregates business
excluding volumes from the three operations that were divested in
the third quarter of 2014 from the quarter ended March 31, 2014.
These non-GAAP measures are presented for investors and analysts
to have a more comparable analysis of shipment trends based on the
operations owned by the Company for the quarter ended March 31,
2015. The following shows the calculation of the heritage
aggregates product line shipments for the West Group and the
Aggregates business for the quarter ended March 31, 2014,
excluding shipments from the operations divested in the third
quarter of 2014 (tons in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West Group
|
|
|
Aggregates Business
|
|
Reported heritage aggregates product line shipments for quarter
ended March 31, 2014
|
|
|
|
|
12,068
|
|
|
|
|
24,619
|
|
|
Less: aggregates product line shipments for three operations
divested in third quarter of 2014
|
|
|
|
|
(759
|
)
|
|
|
|
(759
|
)
|
|
Adjusted heritage aggregates product line shipments for quarter
ended March 31, 2014
|
|
|
|
|
11,309
|
|
|
|
|
23,860
|
|
|
Reported heritage aggregates product line shipments for quarter
ended March 31, 2015
|
|
|
|
|
11,332
|
|
|
|
|
25,523
|
|
|
Increase in 2015 heritage aggregates product line shipments over
adjusted shipments for quarter ended March 31, 2014
|
|
|
|
|
0.2
|
%
|
|
|
|
7.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC.
|
|
Non-GAAP Financial Measures (continued)
|
|
(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, term loan 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
can not exceed 3.50 times as of March 31, 2015, with certain
exceptions related to qualifying acquisitions, as defined.
|
|
|
|
The following presents the calculation of Consolidated
Debt-to-Consolidated EBITDA, as defined, for the trailing-12
months at March 31, 2015. For supporting calculations, refer to
Company's website at www.martinmarietta.com.
|
|
|
|
|
|
Twelve-Month Period
|
|
|
|
|
|
April 1, 2014 to
|
|
|
|
|
|
March 31, 2015
|
|
Earnings from continuing operations attributable to Martin Marietta
Materials, Inc.
|
|
|
|
$
|
183.4
|
|
|
Add back:
|
|
|
|
|
|
Interest expense
|
|
|
|
|
73.2
|
|
|
Income tax expense
|
|
|
|
|
102.4
|
|
|
Depreciation, depletion and amortization expense
|
|
|
|
|
244.2
|
|
|
Stock-based compensation expense
|
|
|
|
|
10.5
|
|
|
TXI acquisition-related expenses, net,
|
|
|
|
|
34.4
|
|
|
Deduct:
|
|
|
|
|
|
Interest income
|
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
TXI EBITDA pre-acquisition (April 1, 2014 - June 30, 2014)
|
|
|
|
|
12.9
|
|
|
Consolidated EBITDA, as defined
|
|
|
|
$
|
661.0
|
|
|
|
|
|
|
|
|
Consolidated Debt, including debt for which the Company is a
co-borrower, at March 31, 2015
|
|
|
|
$
|
1,606.7
|
|
|
|
|
|
|
|
|
Consolidated Debt-to-Consolidated EBITDA, as defined, at March 31,
2015 for the trailing twelve-month EBITDA
|
|
|
|
|
2.43 times
|
|
|
|
|
|
|
|
|
|
|
|
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 for the three months ended March 31, 2015 and
2014.
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
Consolidated Earnings Before Interest, Income Taxes, Depreciation,
Depletion and Amortization (EBITDA)
|
|
|
|
$ 91.2
|
|
|
$ 24.2
|
|
|
|
|
|
|
|
|
|
|
A Reconciliation of Net Earnings (Loss) Attributable to Martin
Marietta Materials, Inc. to Consolidated EBITDA is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
Net Earnings (Loss) Attributable to Martin Marietta Materials, Inc.
|
|
|
|
$ 6.2
|
|
|
$ (21.6)
|
|
Add back:
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
|
19.3
|
|
|
12.2
|
|
Income Tax Benefit for Controlling Interests
|
|
|
|
(0.8)
|
|
|
(8.4)
|
|
Depreciation, Depletion and Amortization Expense
|
|
|
|
66.5
|
|
|
42.0
|
|
Consolidated EBITDA
|
|
|
|
$ 91.2
|
|
|
$ 24.2
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of earnings before taxes on income to EBITDA for
the Cement business for the quarter ended March 31, 2015 is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cement
|
|
|
|
|
|
|
|
|
Business
|
|
|
|
|
Earnings Before Taxes On Income
|
|
|
|
$ 12.2
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
|
0.1
|
|
|
|
|
Depreciation, Depletion and Amortization Expense
|
|
|
|
15.2
|
|
|
|
|
EBITDA
|
|
|
|
$ 27.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARTIN MARIETTA MATERIALS, INC.
|
|
Non-GAAP Financial Measures (continued)
|
|
(Dollars in millions)
|
|
|
|
Incremental gross margin (excluding freight and delivery revenues)
is a non-GAAP measure. The Corporation presents this metric to
enhance analysts' and investors' understanding of the impact of
increased shipments on profitability. Due to the significant
amount of fixed costs, gross margin (excluding freight and
delivery revenues) typically increases at a disproportionate rate
in periods of increased shipments. The following shows the
calculation of incremental gross margin (excluding freight and
delivery revenues) for the heritage Aggregates business for the
quarter ended March 31, 2015:
|
|
|
|
|
|
|
|
Heritage Aggregates business net sales for the quarter ended March
31, 2015
|
$
|
358.2
|
|
|
Heritage Aggregates business net sales for the quarter ended March
31, 2014
|
|
322.3
|
|
|
Incremental net sales
|
$
|
35.9
|
|
|
|
|
|
Heritage Aggregates business gross profit for the quarter ended
March 31, 2015
|
$
|
34.9
|
|
|
Heritage Aggregates business gross profit for the quarter ended
March 31, 2014
|
|
7.6
|
|
|
Incremental gross profit
|
$
|
27.3
|
|
|
|
|
|
Incremental gross margin (excluding freight and delivery revenues)
for the quarter ended March 31, 2015
|
|
76
|
%
|
|
|
|
|
|
MLM-E
Copyright Business Wire 2015