StockSelector.com
  Research, Select, & Monitor Monday, October 14, 2019 5:23:19 PM ET  
Trade Ideas The Market Industries Stocks Portfolio

 
Ticker Lookup
Martin Marietta Materials Inc.$265.72$.29.11%

  Quote | Ranking | Chart | Valuations | Sentiment | Industry | News | Earnings | Analysts | More...

Your Target?

 Martin Marietta Reports Second Quarter 2019 Results
   Tuesday, July 30, 2019 6:58:00 AM ET

Aggregates Shipments Increased 10 Percent

Pricing Momentum Continued with Gains Across All Building Materials Product Lines

Magnesia Specialties Business Posted Quarterly Records for Revenues and Profitability

Company Raises Full-Year Guidance

RALEIGH, N.C., July 30, 2019 (GLOBE NEWSWIRE) -- Martin Marietta Materials, Inc. (NYSE:MLM) today reported results for the second quarter ended June 30, 2019

Highlights include:

 Quarter Ended June 30, 
 ($ in thousands, except per share)2019  2018 
Total revenues 1$1,279,468  $1,202,403 
Products and services revenues 2$1,196,135  $1,128,777 
Building Materials business$1,125,756  $1,060,620 
Magnesia Specialties business$70,379  $68,157 
Gross profit$356,867  $315,917 
Adjusted gross profit 3$356,867  $326,084 
Earnings from operations$285,882  $263,953 
Adjusted earnings from operations 4$285,882  $286,246 
Net earnings attributable to Martin Marietta$189,475  $185,377 
Adjusted EBITDA 5$378,467  $376,096 
Earnings per diluted share 6$3.01  $2.92 



1 Total revenues include the sales of products and services to customers (net of any discounts or allowances) and freight revenues.
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.
3 2018 second-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).
4 2018 second-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 and acquisition-related expenses, net. See Appendix to this earnings release for a reconciliation to reported earnings from operations under GAAP.
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.
6 2019 second-quarter earnings per diluted shares includes a charge of $0.19 per diluted share for a prior-period error that overstated equity earnings from a nonconsolidated affiliate. 2018 second-quarter earnings per diluted share includes a charge of $0.12 per diluted share for the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and a charge of $0.21 per diluted share for acquisition-related expenses, net. Second-quarter 2018 also includes nonrecurring gains on the sale of surplus land and favorable litigation settlements which contributed $0.29 per diluted share.
   

Ward Nye, Chairman, President and CEO of Martin Marietta, stated, “We are proud to have established new quarterly records for revenues, gross profit and adjusted EBITDA, driven by increased aggregates shipments, continued pricing momentum across the Building Materials business and improved cost management. These record-setting second-quarter results demonstrate Martin Marietta’s strong execution as we capitalized on the robust underlying demand across our geographic footprint. Notably, aggregates shipments increased 10 percent, led by our Mid-America and Southeast Groups which achieved double-digit-growth as these markets benefited from improving strength in public- and private-sector spending and contributions from acquired operations. Based on these current trends and our strong first-half performance, we are raising our full-year outlook and believe 2019 will be another record year for Martin Marietta.

“Construction activity in our Top 10 states is outpacing the nation as a whole, as evidenced by recent trends in total construction starts. Importantly, aggregates shipments to our three primary end-use markets increased for a second consecutive quarter, demonstrating the breadth of overall demand in our key regions. Attractive underlying market fundamentals, including notable employment gains, population growth and superior state fiscal health, across our geographic footprint should continue to bolster private-sector construction demand. We expect infrastructure projects to accelerate during the second half of the year, supported by meaningful increases in public lettings and contract awards in our key states, notably Texas and Colorado.”

Mr. Nye concluded, “Throughout our 25-year history as a public company, Martin Marietta has established a proven record of responsibly managing and growing our business to create long-term shareholder value.  Going forward, we will continue to build upon our successful approach of price discipline, strategic geographic positioning and prudent capital allocation.  We remain committed to the disciplined execution of our strategic plan and the world-class attributes of our business – including safety, ethics, cost oversight and operational excellence – to drive continued profitability growth in 2019 and beyond.”

Mr. Nye’s CEO Commentary may be found on the Investor Relations section of the Company’s website.

Second-Quarter Operating Results
(All comparisons are versus the prior-year quarter unless noted otherwise)

 Quarter ended June 30, 2019 
($ in thousands)Revenues Gross profit (loss) Gross margin 
Building Materials business:         
Products and services:         
Aggregates$757,802 $251,422  33.2%
Cement 112,350  42,229  37.6%
Ready mixed concrete 241,178  19,014  7.9%
Asphalt and paving 82,198  15,742  19.2%
Less:  interproduct revenues (67,772) -  - 
Products and services 1,125,756  328,407  29.2%
Freight 77,473  227 NM 
Total Building Materials business 1,203,229  328,634  27.3%
Magnesia Specialties business:         
Products and services 70,379  29,212  41.5%
Freight 5,860  (1,174)NM 
Total Magnesia Specialties business 76,239  28,038  36.8%
Corporate -  195 NM 
Total$1,279,468 $356,867  27.9%


 Quarter ended June 30, 2018 
($ in thousands)Revenues Gross profit (loss) Gross margin 
Building Materials business:         
Products and services:         
Aggregates$666,966 $198,705  29.8%
Cement 113,148  41,305  36.5%
Ready mixed concrete 277,202  29,952  10.8%
Asphalt and paving 81,482  18,347  22.5%
Less:  interproduct revenues (78,178) -  - 
Products and services 1,060,620  288,309  27.2%
Freight 68,821  598 NM 
Total Building Materials business 1,129,441  288,907  25.6%
Magnesia Specialties business:         
Products and services 68,157  24,870  36.5%
Freight 4,805  (1,028)NM 
Total Magnesia Specialties business 72,962  23,842  32.7%
Corporate -  3,168 NM 
Total$1,202,403 $315,917  26.3%
          

Building Materials Business

Second-quarter operating results reflect strong underlying product demand, most notably in North Carolina, Georgia, Iowa and Maryland, as customers continued to address weather-deferred projects from 2018 and growing backlogs. Texas and Colorado, the Company’s two largest states by revenues, experienced near-record precipitation and unseasonable snow accumulation, respectively.  This extreme weather temporarily hindered construction activity and negatively impacted the aggregates, cement and downstream operations in these regions. 

Aggregates

Second-quarter aggregates volume and pricing improved 9.9 percent and 3.4 percent, respectively. Same-store aggregates volume and pricing improved 6.1 percent and 4.1 percent, respectively.

  • Shipments for the Mid-America Group operations increased 15.9 percent, or 10.2 percent on a same-store basis, supported by infrastructure and commercial projects. Additionally, the Midwest Division benefited from shipments related to emergency flood repairs. Pricing improved 1.6 percent, or 3.0 percent on a same-store basis.
     
  • Shipments for the Southeast Group operations increased 12.7 percent, or 5.4 percent on a same-store basis, reflecting the strength of the North Georgia and Florida markets. Pricing improved 7.3 percent, or 8.3 percent on a same-store basis, driven by solid gains in North Georgia and a higher percentage of long-haul shipments. 
     
  • West Group shipments increased 1.1 percent despite unfavorable weather that contributed to project delays. West Group pricing increased 3.4 percent.

Martin Marietta’s second-quarter aggregates shipments by end use are as follows (all comparisons are versus the prior-year quarter):

Infrastructure Market

  • Aggregates shipments to the infrastructure market increased 2 percent as contractors continued to advance transportation-related projects. Following more than a decade of underinvestment, management believes infrastructure demand is poised for meaningful growth. Funding provided by the Fixing America’s Surface Transportation Act (FAST Act), combined with numerous state and local transportation initiatives, has recently accelerated lettings and contract awards in key states, including Texas, Colorado, Iowa and Maryland. For the quarter, the infrastructure market represented 37 percent of aggregates shipments, which is below the Company’s most recent ten-year average of 46 percent.

Nonresidential Market

  • Aggregates shipments to the nonresidential market increased 25 percent, driven by gains in commercial and heavy industrial construction activity. The Company continued to benefit from robust distribution center, warehouse, data center and wind energy projects in key geographies, including Texas, the Carolinas, Georgia and Iowa, as well as the early phases of several large energy-sector projects along the Gulf Coast. The nonresidential market represented 37 percent of second-quarter aggregates shipments.

Residential Market

  • Aggregates shipments to the residential market increased modestly, as ongoing homebuilding activity in the Carolinas, Georgia and Florida was offset by weather-related delays in Texas. 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 21 percent of second-quarter aggregates shipments.

ChemRock/Rail Market

  • The ChemRock/Rail market accounted for the remaining 5 percent of second-quarter aggregates shipments.  Volumes to this end use increased 11 percent, driven by improved ballast shipments to the western Class I railroads for emergency flood repairs.

Aggregates product gross margin increased 340 basis points to 33.2 percent, reflecting improved operating leverage from increased shipment and production levels and the absence of the $10.2 million impact of selling acquired inventory after its markup to fair value as part of acquisition accounting incurred in 2018. 

Cement

Second-quarter cement product revenues decreased slightly, as pricing growth of 4.6 percent was offset by a 4.9 percent volume decline resulting from extreme Texas precipitation, most significantly in Dallas/Fort Worth. Production efficiencies and lower maintenance costs contributed to the 110-basis-point expansion in product gross margin to 37.6 percent. 

Downstream businesses

Ready mixed concrete shipments decreased 15.5 percent, driven by unfavorable weather conditions in Texas and Colorado. Ready mixed concrete selling prices improved 2.5 percent.  Colorado asphalt shipments declined 8.2 percent while pricing improved 5.2 percent. 

Magnesia Specialties Business

Magnesia Specialties product revenues increased 3.3 percent to a record $70.4 million as the business continued to benefit from solid global demand for magnesia chemical products.  Product gross margin improved 500 basis points to 41.5 percent driven by favorable product mix, production efficiencies and lower energy costs.

Consolidated

During the second quarter ended June 30, 2019, the Company identified a prior-period error that overstated its equity earnings from a nonconsolidated affiliate. The overstatement was not deemed material to any previously-reported periods and was therefore corrected as an out-of-period expense of $15.7 million ($12.0 million net of tax) during second-quarter 2019. The pretax noncash adjustment is recorded in other nonoperating expenses, net, consistent with the recurring classification of equity earnings from the affiliate.

For the quarter ended June 30, 2018, other operating income, net, included $16.9 million of gains on the sale of surplus land and $7.7 million, net, of litigation and related settlements.

Liquidity and Capital Resources

Cash provided by operating activities for the six months ended June 30 was $333.7 million in 2019 compared with $238.0 million in 2018.

Cash paid for property, plant and equipment additions for the six months ended June 30, 2019 was $207.5 million.  Capital expenditures for the full year are expected to range from $350 million to $400 million as the Company continues to prudently deploy capital into the business.

At June 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 2.7 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 a meaningful and sustainable dividend 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 May 2019, the Company declared its 100th consecutive quarterly cash dividend. Additionally, during second-quarter 2019, the Company repurchased 232,400 shares of common stock pursuant to its share repurchase authorization.  As of June 30, 2019, 13.9 million shares remained under the current repurchase authorization and 62.4 million shares of Martin Marietta common stock were outstanding.

Full-Year Outlook

Martin Marietta’s geographic footprint has attractive underlying market fundamentals, including notable employment gains, population growth and superior state fiscal health – all attributes promoting steady and sustainable construction growth. Supported by robust underlying demand and third-party forecasts, Martin Marietta is raising its full-year guidance based on its belief that the current construction cycle will continue for the foreseeable future and expand further this year for each of the Company’s three primary construction end-use markets. Notably:

  • Infrastructure construction, particularly for aggregates-intensive highways and streets, should benefit from recent accelerations 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. 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 this year and beyond.

  • Nonresidential construction should increase in both the commercial and heavy industrial sectors for the next several years across many of the Company’s key markets. Both the Architectural Billings Index and Dodge Momentum Index indicate healthy commercial construction activity throughout the year. Continued federal regulatory approvals should notably contribute to increased heavy building materials consumption from the next wave of large energy-sector projects, particularly along the Gulf Coast. Construction activity for these projects has begun in earnest and is expected to continue for several years.

  • Residential construction should continue to grow within Martin Marietta’s geographic footprint, particularly as mortgage rates remain attractive and homebuilders are beginning to address the need for more affordable homes. The Company’s leading positions in southeastern and southwestern states offer superior opportunities for gains in both multi- and single-family housing, driven by a multitude of factors, such as available land, an overall business-friendly environment and fewer regulatory barriers. The Company believes that permits represent the best indicator of future housing construction. Martin Marietta’s top ten states outpaced the nation in housing unit permit growth for the trailing twelve months ended May 2019 for all three residential categories: total, multi-family and single-family. Continued strength in residential construction supports future infrastructure and nonresidential activity.

Based on current trends and expectations, management has raised its full-year guidance as follows: 

  • Aggregates shipments by end-use market compared with 2018 levels are as follows:
    -  Infrastructure shipments to increase in the high-single digits.
    -  Nonresidential shipments to experience a double-digit increase.
    -  Residential shipments to increase in the mid-single digits.
    ChemRock/Rail shipments to be up slightly.
2019 GUIDANCE 
($ and tons in thousands, except per ton)Low *  High * 
Consolidated       
Total revenues 1$4,535,000  $4,730,000 
Products and services revenues$4,255,000  $4,430,000 
Freight revenues$280,000  $300,000 
Gross profit$1,130,000  $1,235,000 
        
Selling, general and administrative expenses (SG&A)$290,000  $300,000 
Interest expense$130,000  $140,000 
Estimated tax rate (excluding discrete events) 20%  22%
Net earnings attributable to Martin Marietta$530,000  $640,000 
Adjusted EBITDA 2$1,200,000  $1,315,000 
Capital expenditures$350,000  $400,000 
        
Building Materials Business       
Aggregates       
Volume (total tons) 3 185,000   188,000 
% growth 3 8.0%  10.0%
Average selling price per ton (ASP)$14.15  $14.40 
% growth 4 3.0%  5.0%
Total revenues$2,865,000  $2,960,000 
Products and services revenues$2,625,000  $2,700,000 
Freight revenues$240,000  $260,000 
Gross profit$780,000  $840,000 
        
Cement       
Total revenues$435,000  $465,000 
Products and services revenues$415,000  $445,000 
Freight revenues$20,000  $20,000 
Gross profit$135,000  $155,000 
        
Ready Mixed Concrete and Asphalt and Paving       
Products and services revenues$1,205,000  $1,275,000 
Gross profit$120,000  $140,000 
        
Magnesia Specialties Business       
Total revenues$290,000  $300,000 
Products and services revenues$270,000  $280,000 
Freight revenues$20,000  $20,000 
Gross profit$100,000  $105,000 


* Guidance range represents the low end and high end of the respective line items provided above.
1 2019 consolidated total revenues exclude $260 million to $270 million related to estimated interproduct sales.
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.
3 Represents total aggregates volumes, which includes approximately 9.6 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.
4 ASP growth range is in comparison with ASP of $13.71 per ton for the full year 2018.
   

Same-Store Information

This earnings release contains certain information on a same-store basis. When providing certain results in comparison with prior periods, the Company may exclude the operating results of recently acquired businesses that do not have comparable results in the periods being discussed. This approach allows management and investors to evaluate the performance of the Company’s operations on a comparable basis without the effects of acquisition activity. The Company’s same-store information may not be comparable with similar measures used by other companies.

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. 

Conference Call Information

The Company will discuss its second-quarter 2019 earnings results on a conference call and an online web simulcast today (July 30, 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 second-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 4274137.

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.

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; 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.

 
MARTIN MARIETTA MATERIALS, INC.
Unaudited Statements of Earnings
(In thousands, except per share amounts)
        
 Three Months Ended  Six Months Ended 
 June 30, June 30,
  2019   2018   2019   2018 
Products and services revenues$  1,196,135  $  1,128,777  $  2,074,440  $  1,882,082 
Freight revenues   83,333     73,626     143,983     122,325 
Total revenues   1,279,468     1,202,403     2,218,423     2,004,407 
        
Cost of revenues - products and services   838,322     812,430     1,572,490     1,454,049 
Cost of revenues - freight   84,279     74,056     146,159     124,049 
Total cost of revenues   922,601     886,486     1,718,649     1,578,098 
Gross Profit   356,867     315,917     499,774     426,309 
        
Selling general & administrative expenses   72,382     71,070     150,674     141,191 
Acquisition-related expenses, net   47     12,126     191     12,836 
Other operating income, net   (1,444)    (31,232)    (6,194)    (30,752)
Earnings from operations   285,882     263,953     355,103     303,034 
        
Interest expense   33,297     32,971     66,245     68,059 
Other nonoperating expense and (income), net   13,226     (7,122)    11,663     (15,626)
Earnings before income tax expense   239,359     238,104     277,195     250,601 
Income tax expense   49,890     52,601     44,899     55,058 
Consolidated net earnings   189,469     185,503     232,296     195,543 
Less: Net (loss) earnings attributable to noncontrolling
  interests
   (6)    126     (32)    143 
Net Earnings Attributable to Martin Marietta Materials, Inc.$  189,475  $  185,377  $  232,328  $  195,400 
        
Net earnings per common share attributable to common
  shareholders:
       
Basic $  3.02  $  2.94  $  3.71  $  3.10 
Diluted$  3.01  $  2.92  $  3.69  $  3.08 
        
Dividends per common share$  0.48  $  0.44  $  0.96  $  0.88 
        
Average number of common shares outstanding:       
  Basic   62,563     63,021     62,574     62,989 
  Diluted   62,720     63,285     62,749     63,253 
        


 
MARTIN MARIETTA MATERIALS, INC.
Unaudited Financial Highlights
(In thousands)
        
 Three Months Ended  Six Months Ended 
 June 30, June 30,
  2019   2018   2019   2018 
Total revenues:       
Building Materials Business:       
Mid-America Group$  415,327  $  350,592  $  664,140  $  529,373 
Southeast Group   137,024     112,963     256,262     193,202 
West Group   650,878     665,886     1,147,708     1,139,608 
Total Building Materials Business   1,203,229     1,129,441     2,068,110     1,862,183 
Magnesia Specialties   76,239     72,962     150,313     142,224 
Total$  1,279,468  $  1,202,403  $  2,218,423  $  2,004,407 
        
Gross profit (loss):       
Building Materials Business:       
Mid-America Group$  155,775  $  120,874  $  201,006  $  139,129 
Southeast Group   37,761     19,980     64,005     26,147 
West Group   135,098     148,053     181,462     208,250 
Total Building Materials Business   328,634     288,907     446,473     373,526 
Magnesia Specialties   28,038     23,842     53,580     47,730 
Corporate   195     3,168     (279)    5,053 
Total$  356,867  $  315,917  $  499,774  $  426,309 
        
Selling, general and administrative expenses:       
Building Materials Business:       
Mid-America Group$  15,542  $  14,016  $  31,135  $  27,146 
Southeast Group   5,376     4,833     10,753     9,249 
West Group   27,717     27,161     56,995     53,293 
Total Building Materials Business   48,635     46,010     98,883     89,688 
Magnesia Specialties   2,796     2,505     5,662     5,107 
Corporate   20,951     22,555     46,129     46,396 
Total$  72,382  $  71,070  $  150,674  $  141,191 
        
Earnings (Loss) from operations:       
Building Materials Business:       
Mid-America Group$  141,678  $  108,709  $  172,633  $  114,876 
Southeast Group   32,688     32,052     53,822     34,093 
West Group    110,223     122,844     130,158     157,796 
Total Building Materials Business   284,589     263,605     356,613     306,765 
Magnesia Specialties   25,219     21,329     47,862     42,565 
Corporate   (23,926)    (20,981)    (49,372)    (46,296)
Total$  285,882  $  263,953  $  355,103  $  303,034 
        


 
MARTIN MARIETTA MATERIALS, INC.
Unaudited Financial Highlights (Continued)
(In thousands)
        
 Three Months Ended  Six Months Ended 
 June 30, June 30,
  2019   2018   2019   2018 
Total revenues:       
Building Materials business products and services:       
Aggregates$  757,802  $  666,966  $  1,302,750  $  1,094,139 
Cement    112,350     113,148     211,367     202,331 
Ready Mixed Concrete   241,178     277,202     452,335     495,738 
Asphalt and paving   82,198     81,482     94,570     95,692 
Less:  Interproduct sales   (67,772)    (78,178)    (126,135)    (138,843)
Subtotal   1,125,756     1,060,620     1,934,887     1,749,057 
Freight   77,473     68,821     133,223     113,126 
Total Building Materials Business   1,203,229     1,129,441     2,068,110     1,862,183 
Magnesia Specialties business:       
Products and services   70,379     68,157     139,553     133,025 
Freight   5,860     4,805     10,760     9,199 
Total Magnesia Specialties Business   76,239     72,962     150,313     142,224 
Consolidated total revenues$  1,279,468  $  1,202,403  $  2,218,423  $  2,004,407 
        
Gross profit (loss):       
Building Materials business products and services:       
Aggregates$  251,422  $  198,705  $  349,482  $  252,246 
Cement    42,229     41,305     56,007     65,038 
Ready Mixed Concrete   19,014     29,952     33,506     45,593 
Asphalt and paving   15,742     18,347     7,415     10,169 
Subtotal   328,407     288,309     446,410     373,046 
Freight   227     598     63     480 
Total Building Materials Business   328,634     288,907     446,473     373,526 
Magnesia Specialties business:       
Products and services   29,212     24,870     55,819     49,933 
Freight   (1,174)    (1,028)    (2,239)    (2,203)
Total Magnesia Specialties Business   28,038     23,842     53,580     47,730 
Corporate   195     3,168     (279)    5,053 
Consolidated gross profit $  356,867  $  315,917  $  499,774  $  426,309 
        


  
MARTIN MARIETTA MATERIALS, INC.
Balance Sheet Data
(In thousands)
     
  June 30,  December 31, 
  2019  2018 
 (Unaudited) (Audited) 
ASSETS    
Cash and cash equivalents$  53,595 $  44,892 
Accounts receivable, net   710,605    523,276 
Inventories, net   646,342    663,035 
Other current assets   122,579    134,613 
Property, plant and equipment, net   5,132,682    5,157,229 
Intangible assets, net   2,888,144    2,900,400 
Operating lease right-of-use assets   487,360    -  
Other noncurrent assets   122,350    127,974 
Total assets$  10,163,657 $  9,551,419 
     
LIABILITIES AND EQUITY    
Current maturities of long-term debt and short-term facilities$  385,043 $  390,042 
Other current liabilities   437,173    396,708 
Long-term debt (excluding current maturities)   2,732,018    2,730,439 
Other noncurrent liabilities   1,512,153    1,084,818 
Total equity   5,097,270    4,949,412 
Total liabilities and equity$  10,163,657 $  9,551,419 
     


    
MARTIN MARIETTA MATERIALS, INC.
Unaudited Statements of Cash Flows
(In thousands)
 Six Months Ended
 June 30,
  2019   2018 
Operating activities:   
Consolidated net earnings $  232,296  $  195,543 
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities:   
Depreciation, depletion and amortization   181,986     163,545 
Stock-based compensation expense   22,250     17,098 
Gains on divestitures and sales of assets   (3,927)    (33,527)
Deferred income taxes   (6,393)    14,986 
Other items, net   14,892     (4,757)
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:   
Accounts receivable, net   (187,076)    (157,603)
Inventories, net   15,744     (7,133)
Accounts payable   36,614     44,266 
Other assets and liabilities, net   27,345     5,615 
Net cash provided by operating activities   333,731     238,033 
    
Investing activities:   
Additions to property, plant and equipment   (207,452)    (188,270)
Acquisitions, net   -      (1,645,698)
Proceeds from divestitures and sales of assets   5,997     58,213 
Investments in life insurance contracts, net   527     424 
Payment of railcar construction advances   -      (28,306)
Reimbursement of railcar construction advances   -      28,306 
Other investing activities, net   (957)    -  
Net cash used for investing activities   (201,885)    (1,775,331)
    
Financing activities:   
Borrowings of long-term debt   165,000     665,000 
Repayments of long-term debt   (170,028)    (475,025)
Payments on financing leases   (1,820)    -  
Payments on capital leases   -      (1,725)
Debt issue costs   -      (3,194)
Payments of deferred acquisition consideration   -      (1,426)
Dividends paid   (60,615)    (55,795)
Repurchase of common stock   (50,000)    -  
Proceeds from exercise of stock options   7,094     6,943 
Shares withheld for employees' income tax obligations   (12,174)    (10,065)
Distributions to owners of noncontrolling interest   (600)    -  
Net cash (used for) provided by financing activities   (123,143)    124,713 
    
Net increase (decrease) in cash and cash equivalents   8,703     (1,412,585)
Cash and cash equivalents, beginning of period   44,892     1,446,364 
Cash and cash equivalents, end of period$  53,595  $  33,779 
    


 
MARTIN MARIETTA MATERIALS, INC.
Unaudited Operational Highlights
        
 Three Months Ended  Six Months Ended 
 June 30, 2019 June 30, 2019
 Volume Pricing Volume Pricing
Volume/Pricing Variance (1)       
Mid-America Group 15.9%  1.6%  23.2%  0.6%
Southeast Group 12.7%  7.3%  25.8%  5.2%
West Group 1.1%  3.4%  3.5%  3.2%
Total Aggregates Product Line  (2) 9.9%  3.4%  15.4%  3.0%
        
 Three Months Ended  Six Months Ended 
 June 30, June 30,
Shipments (tons in thousands) 2019   2018   2019   2018 
Mid-America Group   27,624     23,843     43,491     35,315 
Southeast Group   7,228     6,411     13,610     10,816 
West Group   18,301     18,106     33,432     32,303 
Total Aggregates Product Line  (2)   53,153     48,360     90,533     78,434 
(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  Six Months Ended 
 June 30, June 30,
  2019   2018   2019   2018 
Shipments (in thousands)       
Aggregates tons - external customers   50,491     45,231     85,841     73,162 
Internal aggregates tons used in other product lines   2,662     3,129     4,692     5,272 
Total aggregates tons   53,153     48,360     90,533     78,434 
        
Cement tons - external customers   689     653     1,278     1,180 
Internal cement tons used in other product lines   289     375     585     673 
Total cement tons   978     1,028     1,863     1,853 
        
Ready Mixed Concrete - cubic yards   2,162     2,559     4,094     4,567 
        
Asphalt tons - external customers   218     252     265     313 
Internal asphalt tons used in road paving business   596     635     647     711 
Total asphalt tons   814     887     912     1,024 
        
Average unit sales price by product line
  (including internal sales):
Aggregates (per ton)$  14.18  $  13.72  $  14.28  $  13.86 
Cement (per ton)$  114.17  $  109.11  $  112.63  $  108.10 
Ready Mixed Concrete (per cubic yard)$  109.36  $  106.65  $  108.17  $  106.51 
Asphalt (per ton)$  47.22  $  44.89  $  47.08  $  44.80 
        


MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures 
(Dollars in thousands) 
 
The ratio of Consolidated Debt-to-Consolidated EBITDA, as defined, for the trailing-12 months is a covenant under the Company's revolving credit facility and accounts receivable securitization facility.  Under the terms of these agreements, as amended, the Company's ratio of Consolidated Debt-to-Consolidated EBITDA as defined, for the trailing-12 months cannot exceed 3.50 times as of June 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 June 30, 2019, for the trailing-12 months EBITDA. For supporting calculations, refer to the Company's website at www.martinmarietta.com
       
        Twelve Month Period
        July 1, 2018 to 
       June 30, 2019 
Earnings from continuing operations attributable to Martin Marietta Materials, Inc.  $  506,926 
Add back:  
Interest expense    95,494 
Income tax expense    135,255 
Depreciation, depletion and amortization expense and noncash nonconsolidated equity affiliate adjustment    371,191 
Stock-based compensation expense    34,405 
Acquisition-related expenses, net   9,082 
Noncash portion of asset and portfolio rationalization charge  16,970 
Deduct:  
Interest income   (480)
Consolidated EBITDA, as defined by the Company's Credit Agreement  $1,168,843 
   
Consolidated Debt, as defined and including debt for which the Company is a co-borrower, at June 30, 2019   3,129,756 
   
Consolidated Debt-to-Consolidated EBITDA, as defined by the Company's Credit Agreement, at June 30, 2019, for the trailing-12 months EBITDA  2.68 times 
   
        
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, and the impact of selling acquired inventory after the markup to fair value as part of acquisition accounting (Adjusted EBITDA) is a financial indicator of a company's ability to service and/or incur indebtedness.  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:
        
 Three Months Ended  Six Months Ended
 June 30, June 30,
  2019  2018(1)  2019 2018(1)
Consolidated Adjusted EBITDA$  378,467  $  376,096 $  536,698 $  497,363 
        
A Reconciliation of Net Earnings Attributable to Martin Marietta to Consolidated Adjusted EBITDA is as follows:
    
 Three Months Ended  Six Months Ended
 June 30, June 30,
  2019  2018(1)  2019 2018(1)
Net Earnings Attributable to Martin Marietta$  189,475  $  185,377 $  232,328 $  195,400 
Add back:       
Interest Expense   33,199     32,971    66,045    68,059 
Income Tax Expense for Controlling Interests   49,878     52,581    44,876    55,018 
Depreciation, Depletion and Amortization and
  Earnings/Loss from Nonconsolidated Equity Affiliates
   105,915     82,874    193,449    155,883 
Bluegrass Acquisition-Related Expenses, Net   -      12,126    -     12,836 
Impact of selling acquired inventory after markup to fair
  value as part of acquisition accounting
   -      10,167    -     10,167 
Consolidated Adjusted EBITDA$  378,467  $  376,096 $  536,698 $  497,363 
        
(1) The Company modified the calculation of Adjusted EBITDA 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 $  530,000  $  640,000    
Add back:       
Interest Expense   140,000     130,000    
Taxes on Income   150,000     165,000    
Depreciation, Depletion and Amortization Expense and Earnings/Loss from Nonconsolidated Equity Affiliates   380,000     380,000    
Adjusted EBITDA$  1,200,000  $  1,315,000    
        
Adjusted consolidated gross profit and adjusted consolidated earnings from operations for the three months ended June 30, 2018, exclude the impact of selling acquired inventory after the markup to fair value as part of acquisition accounting and exclude the impact of acquisition-related expenses, net.  Adjusted consolidated gross profit and adjusted consolidated 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 and acquisition related expenses, net, are nonrecurring. 
        
The following is a reconciliation of the GAAP measure to adjusted gross profit and adjusted earnings from operations for the quarter ended June 30, 2018:
        
Gross profit as reported  $  315,917 
Impact of selling acquired inventory after the markup to fair value as part of acquisition accounting   10,167 
Adjusted gross profit  $326,084 
     
Earnings from operations as reported  $263,953 
Impact of selling acquired inventory after the markup to fair value as part of acquisition accounting   10,167 
Acquisition-related expenses, net  12,126 
Adjusted earnings from operations  $ 286,246 
   

smaller.jpg

Source: Martin Marietta Materials, Inc.


Register |  Password |  Feedback |  Copyright |  Usage Agreement |  Privacy Policy |  Advertising |  About Us |  Contact Us |  FAQ 

Past performance is not indicative of future results

StockSelector.com, the StockSelector.com logo, and News Selects are trademarks of StockSelector.com.
Copyright © 1998 - 2019 StockSelector.com. All rights reserved.