Achieved Record Quarterly Consolidated Revenues
Driven by Enterprise-Wide Pricing Gains
Capitalizing on Increasing Public and Private Construction Activity
Optimizing Aggregates-Led Portfolio to Streamline Business and Further Enhance Margin Profile
Forecasting 2022 Adjusted EBITDA of
Attractive Pricing Acceleration to Offset Impacts of Inflation and Divestitures
First-Quarter Highlights
(Highlights are for continuing operations)
Quarter Ended | |||||||||||
(In millions, except per share) | 2022 | 2021 | % Change | ||||||||
Products and services revenues 1 | $ | 1,147.8 | $ | 921.9 | 24.5 | % | |||||
Building Materials business | $ | 1,077.0 | $ | 856.6 | 25.7 | % | |||||
Magnesia Specialties | $ | 70.8 | $ | 65.3 | 8.5 | % | |||||
Total revenues 2 | $ | 1,230.8 | $ | 982.4 | 25.3 | % | |||||
Gross profit | $ | 156.1 | $ | 174.7 | (10.6 | )% | |||||
Earnings from operations | $ | 59.9 | $ | 99.3 | (39.7 | )% | |||||
Net earnings from continuing operations attributable to Martin Marietta | $ | 24.5 | $ | 65.3 | (62.5 | )% | |||||
Adjusted EBITDA 3 | $ | 197.2 | $ | 205.6 | (4.1 | )% | |||||
Earnings per diluted share from continuing operations | $ | 0.39 | $ | 1.04 | (62.5 | )% |
1 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.
2 Total revenues include the sales of products and services to customers (net of any discounts or allowances) and freight revenues.
3 Earnings from continuing operations before interest; income taxes; depreciation, depletion and amortization; the earnings/loss from nonconsolidated equity affiliates; and acquisition and integration expenses, or Adjusted EBITDA, is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings from continuing operations attributable to Martin Marietta.
“We continue to optimize and enhance our aggregates-led portfolio in line with our SOAR 2025 priorities. We divested our
First-Quarter Financial and Operating Results
(All financial and operating results are for continuing operations and comparisons are versus the prior-year first quarter, unless otherwise noted)
Building Materials Business
The
Aggregates
First-quarter organic aggregates shipments increased 2.5 percent, reflecting growing public and private product demand at the onset of the construction season. Organic pricing increased 6.5 percent, or 4.6 percent on a mix-adjusted basis.
Including acquired operations, total aggregates shipments grew 13.4 percent and pricing increased 5.6 percent. By segment:
- East Group total shipments increased 1.1 percent from infrastructure construction activity in the Southeast and Midwest. Pricing, inclusive of acquisitions, increased 5.1 percent.
West Group total shipments increased 32.7 percent, driven by strong underlying demand inTexas and shipments from acquired operations that more than offsetColorado weather-related shipment shortfalls. Pricing increased 9.0 percent, or 4.8 percent on a mix-adjusted basis, and benefitted from improving long-haul shipments from higher-priced distribution yards and higher selling prices at acquired operations followingJanuary 1 pricing actions.
First-quarter aggregates product gross margin decreased 640 basis points to 14.9 percent, driven primarily by higher costs for diesel, repairs, internal freight and depreciation costs.
Cement
Downstream businesses
Organic ready mixed concrete shipments fell slightly, despite healthy product demand, driven by timing of project completions. Organic pricing grew 8.2 percent, following the implementation of annual price increases early in the year. Inclusive of the acquired
Seasonal winter weather conditions in
Portfolio optimization efforts
On
On
Magnesia Specialties Business
Magnesia Specialties product revenues increased 8.5 percent to
Cash Generation, Capital Allocation and Liquidity
Cash provided by operating activities for the three months ended
Cash paid for property, plant and equipment additions for the three months ended
During the first quarter of 2022, the Company returned
The Company had
Full-Year Guidance
The Company has updated its full-year 2022 guidance to reflect expected pricing realization that it believes will offset additional inflation headwinds and replace earnings from the downstream businesses it recently divested. This guidance excludes businesses classified as discontinued operations.
2022 GUIDANCE | ||||||||
(Dollars in Millions) | Low * | High * | ||||||
Consolidated | ||||||||
Products and services revenues 1 | $ | 5,640 | $ | 5,820 | ||||
Gross profit | $ | 1,560 | $ | 1,665 | ||||
Selling, general and administrative expenses (SG&A) | $ | 395 | $ | 405 | ||||
Interest expense | $ | 165 | $ | 170 | ||||
Estimated tax rate (excluding discrete events) | 21 | % | 22 | % | ||||
Net earnings from continuing operations attributable to Martin Marietta | $ | 800 | $ | 900 | ||||
Adjusted EBITDA 2 | $ | 1,700 | $ | 1,800 | ||||
Capital expenditures | $ | 525 | $ | 550 | ||||
Building Materials Business | ||||||||
Aggregates | ||||||||
Organic volume % growth 3 | 1.0 | % | 4.0 | % | ||||
Total volume % growth 4 | 7.0 | % | 10.0 | % | ||||
Organic average selling price per ton (ASP) % growth 5 | 9.0 | % | 11.0 | % | ||||
Total ASP growth 6 | 9.0 | % | 11.0 | % | ||||
Products and services revenues | $ | 3,550 | $ | 3,645 | ||||
Gross profit | $ | 1,090 | $ | 1,155 | ||||
Cement | ||||||||
Products and services revenues | $ | 580 | $ | 600 | ||||
Gross profit | $ | 210 | $ | 225 | ||||
Products and services revenues | $ | 1,630 | $ | 1,700 | ||||
Gross profit | $ | 155 | $ | 170 | ||||
Magnesia Specialties Business | ||||||||
Products and services revenues | $ | 270 | $ | 280 | ||||
Gross profit | $ | 105 | $ | 115 |
* Guidance range represents the low end and high end of the respective line items provided above.
1 Consolidated products and services revenues exclude
2 Adjusted EBITDA is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings from continuing operations attributable to Martin Marietta.
3 Organic volume % growth range is for organic aggregates shipments, inclusive of internal tons, and is in comparison with 2021 organic shipments of 192.9 million tons.
4 Total volume % growth range is for total aggregates shipments, inclusive of internal tons and acquired operations, and is in comparison with total 2021 shipments of 201.2 million tons.
5 Organic ASP % growth range is for organic aggregates average selling price and is in comparison with 2021 organic ASP of
6 Total ASP growth is for total aggregates average selling price, inclusive of acquired operations, and is in comparison with 2021 total ASP of
Non-GAAP Financial Information
This earnings release contains financial measures that have not been prepared in accordance with generally accepted accounting principles in
Conference Call Information
The Company will discuss its first-quarter 2022 earnings results on a conference call and an online webcast today (
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 28 states,
Investor Contact:
Vice President, Investor Relations
(919) 783-4691
Suzanne.Osberg@martinmarietta.com
MLM-E.
If you are interested in Martin Marietta 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
Investors are cautioned that all statements in this 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, provide the investor with 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 “guidance”, “anticipate”, “may”, “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 the Company’s forward-looking statements here and in other publications may turn out to be wrong.
First-quarter results and trends described in this release may not necessarily be indicative of the Company’s future performance. 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 release (including the outlook) include, but are not limited to: the ability of the Company to face challenges, including those posed by the COVID-19 pandemic and implementation of any such related response plans; the fluctuations in COVID-19 cases in
You should consider these forward-looking statements in light of risk factors discussed in Martin Marietta’s Annual Report on Form 10-K for the year ended
Unaudited Statements of Earnings | |||||||
Three Months Ended | |||||||
2022 | 2021 | ||||||
(In Millions, Except Per Share Data) | |||||||
Products and services revenues | $ | 1,147.8 | $ | 921.9 | |||
Freight revenues | 83.0 | 60.5 | |||||
Total Revenues | 1,230.8 | 982.4 | |||||
Cost of revenues - products and services | 991.9 | 746.0 | |||||
Cost of revenues - freight | 82.8 | 61.7 | |||||
Total Cost of Revenues | 1,074.7 | 807.7 | |||||
Gross Profit | 156.1 | 174.7 | |||||
Selling, general & administrative expenses | 97.1 | 79.8 | |||||
Acquisition and integration expenses | 1.4 | 1.2 | |||||
Other operating income, net | (2.3 | ) | (5.6 | ) | |||
Earnings from Operations | 59.9 | 99.3 | |||||
Interest expense | 40.5 | 27.4 | |||||
Other nonoperating income, net | (10.8 | ) | (9.5 | ) | |||
Earnings from continuing operations before income tax expense | 30.2 | 81.4 | |||||
Income tax expense | 5.8 | 15.9 | |||||
Earnings from continuing operations | 24.4 | 65.5 | |||||
Loss from discontinued operations, net of income tax benefit | (3.1 | ) | — | ||||
Consolidated net earnings | 21.3 | 65.5 | |||||
Less: Net (loss) earnings attributable to noncontrolling interests | (0.1 | ) | 0.2 | ||||
Net Earnings Attributable to | $ | 21.4 | $ | 65.3 | |||
Net Earnings (Loss) Attributable to | |||||||
Per Common Share: | |||||||
Basic from continuing operations | $ | 0.39 | $ | 1.05 | |||
Basic from discontinued operations | (0.05 | ) | — | ||||
$ | 0.34 | $ | 1.05 | ||||
Diluted from continuing operations | $ | 0.39 | $ | 1.04 | |||
Diluted from discontinued operations | (0.05 | ) | — | ||||
$ | 0.34 | $ | 1.04 | ||||
Weighted-Average Common Shares Outstanding: | |||||||
Basic | 62.4 | 62.3 | |||||
Diluted | 62.6 | 62.5 | |||||
Dividends Per Common Share | $ | 0.61 | $ | 0.57 |
Unaudited Financial Highlights | |||||||
Three Months Ended | |||||||
2022 | 2021 | ||||||
(Dollars in Millions) | |||||||
Total revenues: | |||||||
Building Materials business: | |||||||
East Group | $ | 418.8 | $ | 394.9 | |||
735.0 | 516.6 | ||||||
Total | 1,153.8 | 911.5 | |||||
Magnesia Specialties | 77.0 | 70.9 | |||||
Total | $ | 1,230.8 | $ | 982.4 | |||
Gross profit: | |||||||
Building Materials business: | |||||||
East Group | $ | 55.9 | $ | 86.2 | |||
82.5 | 61.8 | ||||||
Total | 138.4 | 148.0 | |||||
Magnesia Specialties | 25.6 | 27.5 | |||||
Corporate | (7.9 | ) | (0.8 | ) | |||
Total | $ | 156.1 | $ | 174.7 | |||
Selling, general and administrative expenses: | |||||||
Building Materials business: | |||||||
East Group | $ | 28.8 | $ | 24.2 | |||
41.3 | 33.3 | ||||||
Total | 70.1 | 57.5 | |||||
Magnesia Specialties | 4.0 | 3.7 | |||||
Corporate | 23.0 | 18.6 | |||||
Total | $ | 97.1 | $ | 79.8 | |||
Earnings (Loss) from operations: | |||||||
Building Materials business: | |||||||
East Group | $ | 28.0 | $ | 61.7 | |||
43.0 | 31.9 | ||||||
Total | 71.0 | 93.6 | |||||
Magnesia Specialties | 21.5 | 23.5 | |||||
Corporate | (32.6 | ) | (17.8 | ) | |||
Total | $ | 59.9 | $ | 99.3 |
Unaudited Financial Highlights (Continued) | |||||||||||
Three Months Ended | |||||||||||
2022 | 2021 | ||||||||||
Amount | % of Revenues | Amount | % of Revenues | ||||||||
(Dollars in Millions) | |||||||||||
Total revenues: | |||||||||||
Building Materials business: | |||||||||||
Products and services: | |||||||||||
Aggregates | $ | 685.9 | $ | 572.6 | |||||||
Cement | 134.3 | 109.6 | |||||||||
Ready mixed concrete | 290.1 | 235.3 | |||||||||
Asphalt and paving | 54.8 | 12.2 | |||||||||
Less: Interproduct sales | (88.1 | ) | (73.1 | ) | |||||||
Products and services | 1,077.0 | 856.6 | |||||||||
Freight | 76.8 | 54.9 | |||||||||
Total | 1,153.8 | 911.5 | |||||||||
Magnesia Specialties: | |||||||||||
Products and services | 70.8 | 65.3 | |||||||||
Freight | 6.2 | 5.6 | |||||||||
Total Magnesia Specialties | 77.0 | 70.9 | |||||||||
Consolidated total revenues | $ | 1,230.8 | $ | 982.4 | |||||||
Gross profit (loss): | |||||||||||
Building Materials business: | |||||||||||
Products and services: | |||||||||||
Aggregates | $ | 101.9 | 14.9% | $ | 121.8 | 21.3% | |||||
Cement | 27.3 | 20.3% | 15.3 | 14.0% | |||||||
Ready mixed concrete | 21.1 | 7.3% | 19.4 | 8.3% | |||||||
Asphalt and paving | (13.3 | ) | (24.3)% | (8.2 | ) | (67.4)% | |||||
Subtotal | 137.0 | 12.7% | 148.3 | 17.3% | |||||||
Freight | 1.4 | NM | (0.3 | ) | NM | ||||||
Total | 138.4 | 12.0% | 148.0 | 16.2% | |||||||
Magnesia Specialties: | |||||||||||
Products and services | 26.8 | 37.8% | 28.4 | 43.5% | |||||||
Freight | (1.2 | ) | NM | (0.9 | ) | NM | |||||
Total Magnesia Specialties | 25.6 | 33.3% | 27.5 | 38.8% | |||||||
Corporate | (7.9 | ) | NM | (0.8 | ) | NM | |||||
Consolidated gross profit | $ | 156.1 | 12.7% | $ | 174.7 | 17.8% |
Balance Sheet Data | |||||
2022 | 2021 | ||||
Unaudited | Audited | ||||
(In millions) | |||||
ASSETS | |||||
Cash and cash equivalents | $ | 189.6 | $ | 258.4 | |
Restricted cash | — | 0.5 | |||
Accounts receivable, net | 759.2 | 774.0 | |||
Inventories, net | 782.4 | 752.6 | |||
Current assets held for sale | 121.2 | 102.2 | |||
Other current assets | 135.1 | 137.9 | |||
Property, plant and equipment, net | 6,208.9 | 6,338.0 | |||
Intangible assets, net | 4,442.7 | 4,559.4 | |||
Operating lease right-of-use assets, net | 410.7 | 426.7 | |||
Noncurrent assets held for sale | 812.9 | 616.9 | |||
Other noncurrent assets | 378.8 | 426.4 | |||
Total assets | $ | 14,241.5 | $ | 14,393.0 | |
LIABILITIES AND EQUITY | |||||
Current liabilities held for sale | $ | 9.3 | $ | 7.5 | |
Other current liabilities | 703.6 | 745.1 | |||
Long-term debt (excluding current maturities) | 5,102.3 | 5,100.8 | |||
Noncurrent liabilities held for sale | 63.9 | 53.5 | |||
Other noncurrent liabilities | 1,931.3 | 1,948.5 | |||
Total equity | 6,431.1 | 6,537.6 | |||
Total liabilities and equity | $ | 14,241.5 | $ | 14,393.0 |
Unaudited Statements of Cash Flows | |||||||
Three Months Ended | |||||||
2022 | 2021 | ||||||
(Dollars in Millions) | |||||||
Cash Flows from Operating Activities: | |||||||
Consolidated net earnings | $ | 21.3 | $ | 65.5 | |||
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 128.2 | 98.6 | |||||
Stock-based compensation expense | 12.0 | 10.9 | |||||
Gain on divestitures and sales of assets | (2.9 | ) | (3.8 | ) | |||
Deferred income taxes, net | 5.2 | (4.7 | ) | ||||
Other items, net | (0.9 | ) | (4.7 | ) | |||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | |||||||
Accounts receivable, net | 14.8 | 11.5 | |||||
Inventories, net | (28.9 | ) | 19.0 | ||||
Accounts payable | 95.5 | 25.0 | |||||
Other assets and liabilities, net | (74.4 | ) | (25.4 | ) | |||
Net Cash Provided by Operating Activities | 169.9 | 191.9 | |||||
Cash Flows from Investing Activities: | |||||||
Additions to property, plant and equipment | (139.8 | ) | (110.3 | ) | |||
Acquisitions, net of cash acquired | 18.8 | — | |||||
Proceeds from divestitures and sales of assets | 1.0 | 12.2 | |||||
Investments in life insurance contracts, net | — | 9.8 | |||||
Other investing activities, net | (3.0 | ) | — | ||||
(123.0 | ) | (88.3 | ) | ||||
Cash Flows from Financing Activities: | |||||||
Payments on finance lease obligations | (3.7 | ) | (2.2 | ) | |||
Repurchases of common stock | (50.0 | ) | — | ||||
Dividends paid | (38.9 | ) | (36.1 | ) | |||
Proceeds from exercise of stock options | 0.6 | 0.6 | |||||
Shares withheld for employees' income tax obligations | (24.2 | ) | (15.5 | ) | |||
(116.2 | ) | (53.2 | ) | ||||
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | (69.3 | ) | 50.4 | ||||
Cash, Cash Equivalents and Restricted Cash, beginning of period | 258.9 | 304.4 | |||||
Cash, Cash Equivalents and Restricted Cash, end of period | $ | 189.6 | $ | 354.8 |
Unaudited Operational Highlights | |||||
Three Months Ended | |||||
Volume | Pricing | ||||
Volume/Pricing Variance(1) | |||||
East Group | 1.1 | % | 5.1 | % | |
32.7 | % | 9.0 | % | ||
Total aggregates operations(2) | 13.4 | % | 5.6 | % | |
Organic aggregates operations(3) | 2.5 | % | 6.5 | % |
Three Months Ended | |||
2022 | 2021 | ||
(Tons in Millions) | |||
Shipments | |||
East Group | 23.0 | 22.7 | |
19.1 | 14.4 | ||
Total aggregates operations(2) | 42.1 | 37.1 |
(1) Volume/pricing variances reflect the percentage increase from the comparable period in the prior year.
(2) Total aggregates operations include acquisitions from the date of acquisition and divestitures through the date of disposal.
(3) Organic aggregates operations exclude volume and pricing data for acquisitions that have not been included in prior-year operations for the comparable period and divestitures.
Three Months Ended | ||||||||
2022 | 2021 | % Change | ||||||
Shipments (in millions) | ||||||||
Aggregates tons - external customers | 38.6 | 34.5 | ||||||
Internal aggregates tons used in other product lines | 3.5 | 2.6 | ||||||
Total aggregates tons | 42.1 | 37.1 | 13.4 | % | ||||
Cement tons - external customers | 0.7 | 0.6 | ||||||
Internal cement tons used in other product lines | 0.3 | 0.3 | ||||||
Total cement tons | 1.0 | 0.9 | 10.0 | % | ||||
Ready mixed concrete - cubic yards | 2.4 | 2.1 | 14.8 | % | ||||
Asphalt tons - external customers | 0.7 | 0.1 | ||||||
Internal asphalt tons used in road paving business | — | — | ||||||
Total asphalt tons | 0.7 | 0.1 | 509.1 | % | ||||
Average unit sales price by product line (including internal sales): | ||||||||
Aggregates (per ton) | $ | 16.17 | $ | 15.31 | 5.6 | % | ||
Cement (per ton) | $ | 129.11 | $ | 115.49 | 11.8 | % | ||
Ready mixed concrete (per cubic yard) | $ | 120.71 | $ | 112.12 | 7.7 | % | ||
Asphalt (per ton) | $ | 62.39 | $ | 49.04 | 27.2 | % | ||
Non-GAAP Financial Measures
Earnings from continuing operations before interest; income taxes; depreciation, depletion and amortization expense; the earnings/loss from nonconsolidated equity affiliates; and acquisition and integration expenses (Adjusted EBITDA) is an indicator used by the Company and investors to evaluate the Company’s operating performance from period to period. Adjusted EBITDA is not defined by generally accepted accounting principles and, as such, should not be construed as an alternative to earnings from operations, net earnings attributable to Martin Marietta or operating cash flow. For further information on Adjusted EBITDA, refer to the Company’s website at www.martinmarietta.com.
Reconciliation of Net Earnings from Continuing Operations Attributable to Martin Marietta to Adjusted EBITDA
Three Months Ended | |||||
2022 | 2021 | ||||
(Dollars in Millions) | |||||
Net Earnings from continuing operations attributable to Martin Marietta | $ | 24.5 | $ | 65.3 | |
Add back: | |||||
Interest expense, net of interest income | 40.5 | 27.3 | |||
Income tax expense for controlling interests | 5.9 | 15.8 | |||
Depreciation, depletion and amortization and earnings/loss from nonconsolidated equity affiliates | 124.9 | 96.0 | |||
Acquisition and integration expenses | 1.4 | 1.2 | |||
Adjusted EBITDA | $ | 197.2 | $ | 205.6 |
Reconciliation of the GAAP Measure to 2022
(Dollars in Millions) | |||||
Net earnings from continuing operations attributable to Martin Marietta | $ | 800.0 | $ | 900.0 | |
Add back: | |||||
Interest expense, net of interest income | 170.0 | 165.0 | |||
Income tax expense for controlling interests | 230.0 | 235.0 | |||
Depreciation, depletion and amortization expense and earnings/loss from nonconsolidated equity affiliates | 500.0 | 500.0 | |||
Adjusted EBITDA | $ | 1,700.0 | $ | 1,800.0 | |
Non-GAAP Financial Measures (Continued)
Mix-adjusted average selling price (mix-adjusted ASP) is a non-GAAP measure that excludes the impact of period-over-period product, geographic and other mix on the average selling price. Mix-adjusted ASP is calculated by comparing current-period shipments to like-for-like shipments in the comparable prior period. Management uses this metric to evaluate the realization of pricing increases and believes this information is useful to investors. The following reconciles reported average selling price to mix-adjusted ASP and corresponding variances.
Three Months Ended | ||||||
2022 | 2021 | |||||
Aggregates: | ||||||
Reported average selling price | $ | 16.17 | $ | 15.31 | ||
Adjustment for favorable impact of product, geographic and other mix | (0.17 | ) | ||||
Mix-adjusted ASP | $ | 16.00 | ||||
Reported average selling price variance | 5.6 | % | ||||
Mix-adjusted ASP variance | 4.6 | % | ||||
Reported average selling price | $ | 15.05 | $ | 13.81 | ||
Adjustment for favorable impact of product, geographic and other mix | (0.58 | ) | ||||
Mix-adjusted ASP | $ | 14.47 | ||||
Reported average selling price variance | 9.0 | % | ||||
Mix-adjusted ASP variance | 4.8 | % | ||||
Source:
2022 GlobeNewswire, Inc., source