Attached files
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| 8-K - FORM 8-K - Vulcan Materials CO | tm2124034d1_8k.htm |
Exhibit 99.1
August 4, 2021
FOR IMMEDIATE RELEASE
Investor Contact: Mark Warren (205) 298-3220
Media Contact: Janet Kavinoky (205) 298-3220
VULCAN REPORTS SECOND QUARTER 2021 RESULTS
Aggregates Margin Continues to Expand
Strong Execution and Positive Demand Environment Support Full Year Outlook
Birmingham, Alabama – August 4, 2021 – Vulcan Materials Company (NYSE: VMC), the nation’s largest producer of construction aggregates, today announced results for the quarter ended June 30, 2021.
Second Quarter Financial and Operating Highlights:
| · | Net earnings were $195 million, or $1.46 per diluted share |
| o | Net earnings include $0.10 per diluted share related to financing costs associated with the proposed acquisition of U.S. Concrete and other non-routine charges excluded from Adjusted EBITDA |
| · | Second quarter Adjusted EBITDA was $406 million |
| · | Aggregates gross profit increased $23 million, or 6 percent, to $374 million |
| · | Non-aggregates gross profit declined $21 million to $25 million |
| · | Announced U.S. Concrete acquisition, which is expected to close in the second half of 2021 |
| · | Reiterate full-year 2021 Adjusted EBITDA guidance between $1.380 to $1.460 billion (excluding the gain from a land sale completed in the first quarter and the U.S. Concrete acquisition announced June 7, 2021) |
Tom Hill, Chairman and Chief Executive Officer, said, “Our performance in the first half of 2021 has been supported by consistent execution on Vulcan’s four strategic disciplines. Our team’s efforts have allowed us to expand our aggregates gross profit margin by 150 basis points and increase our cash gross profit per ton by 5 percent. Despite energy inflation and disruptive weather in the second quarter, aggregates gross profit margin improved 40 basis points, and cash gross profit grew by 2 percent to $7.83 per ton. Across our business, energy inflation reduced earnings by $25 million in the quarter, $15 million due to diesel and $10 million due to liquid asphalt. Lower non-aggregates earnings dampened an otherwise strong performance.”
Mr. Hill continued, “We expect to carry forward the progress we have made through the first half of 2021 and will continue to diligently navigate the changing macro environment. Recent pricing actions across much of our footprint and a keen focus on improving operating efficiencies will continue to help offset spikes in certain input costs. The flexibility of our operating plans will enable us to maintain a high level of performance during the second half of the year and achieve our full-year 2021 targets. We remain excited and focused on closing the proposed acquisition of U.S. Concrete, which will expand Vulcan’s footprint in attractive geographies and accelerate our growth strategy.”
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August 4, 2021
FOR IMMEDIATE RELEASE
Highlights as of June 30, 2021 include:
| Second Quarter | Year-to-Date | Trailing-Twelve-Months | ||||||||||||||||||||||
| Amounts in millions, except per unit data | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||
| Total revenues | $ | 1,361.0 | $ | 1,322.6 | $ | 2,429.4 | $ | 2,371.8 | $ | 4,914.4 | $ | 4,976.7 | ||||||||||||
| Gross profit | $ | 398.4 | $ | 396.5 | $ | 627.6 | $ | 598.2 | $ | 1,310.9 | $ | 1,292.0 | ||||||||||||
| Aggregates segment | ||||||||||||||||||||||||
| Segment sales | $ | 1,125.4 | $ | 1,070.6 | $ | 2,020.3 | $ | 1,938.8 | $ | 4,025.7 | $ | 4,032.1 | ||||||||||||
| Freight-adjusted revenues | $ | 874.0 | $ | 814.7 | $ | 1,555.1 | $ | 1,462.7 | $ | 3,100.0 | $ | 3,041.9 | ||||||||||||
| Gross profit | $ | 373.8 | $ | 351.2 | $ | 597.5 | $ | 545.3 | $ | 1,211.4 | $ | 1,177.0 | ||||||||||||
| Shipments (tons) | 58.5 | 56.2 | 105.0 | 101.2 | 212.0 | 213.8 | ||||||||||||||||||
| Freight-adjusted sales price per ton | $ | 14.93 | $ | 14.50 | $ | 14.82 | $ | 14.45 | $ | 14.62 | $ | 14.23 | ||||||||||||
| Gross profit per ton | $ | 6.39 | $ | 6.25 | $ | 5.69 | $ | 5.39 | $ | 5.71 | $ | 5.51 | ||||||||||||
| Asphalt, Concrete & Calcium segment gross profit | $ | 24.5 | $ | 45.4 | $ | 30.2 | $ | 52.9 | $ | 99.5 | $ | 115.0 | ||||||||||||
| Selling, Administrative and General (SAG) | $ | 100.7 | $ | 91.2 | $ | 189.3 | $ | 177.6 | $ | 371.4 | $ | 362.2 | ||||||||||||
| SAG as % of Total revenues | 7.4 | % | 6.9 | % | 7.8 | % | 7.5 | % | 7.6 | % | 7.3 | % | ||||||||||||
| Earnings from continuing operations before income taxes | $ | 254.1 | $ | 272.3 | $ | 476.4 | $ | 344.5 | $ | 875.7 | $ | 782.1 | ||||||||||||
| Net earnings | $ | 195.3 | $ | 209.9 | $ | 356.0 | $ | 270.2 | $ | 670.3 | $ | 627.0 | ||||||||||||
| Adjusted EBIT | $ | 302.9 | $ | 308.3 | $ | 446.8 | $ | 413.9 | $ | 959.7 | $ | 927.3 | ||||||||||||
| Adjusted EBITDA | $ | 406.0 | $ | 407.8 | $ | 650.3 | $ | 608.8 | $ | 1,365.0 | $ | 1,314.2 | ||||||||||||
| Earnings from continuing operations per diluted share | $ | 1.47 | $ | 1.58 | $ | 2.69 | $ | 2.03 | $ | 5.07 | $ | 4.73 | ||||||||||||
| Adjusted earnings from continuing operations per diluted share | $ | 1.57 | $ | 1.60 | $ | 2.26 | $ | 2.06 | $ | 4.90 | $ | 4.82 | ||||||||||||
Segment Results
Aggregates
Second quarter segment sales increased 5 percent, and gross profit increased 6 percent to $374 million. Gross profit margin increased 40 basis points due to growth in both volume and price as well as effective cost control that helped to offset an estimated $14 million impact of rising diesel prices. Earnings improvement was widespread across the Company’s footprint.
Aggregates shipments increased 4 percent from the prior year’s second quarter, reflecting improving demand across all end-market segments. The pricing environment continues to be positive across the Company’s footprint as demand visibility improves. For the quarter, freight-adjusted pricing increased 3 percent (mix-adjusted pricing increased 2.6 percent). The rate of growth improved sequentially throughout the quarter, reflecting pricing actions taken in many areas. These efforts are expected to help offset cost inflation forecasted for the rest of the year.
Improved operating efficiencies helped offset both the sharp increase in the average unit cost of diesel fuel and the impact of any operational disruptions caused by the wet weather. Freight adjusted unit cost of sales were 3.5 percent higher than the prior year’s second quarter but increased less than 1 percent excluding the impact of higher diesel prices.
Asphalt, Concrete and Calcium
Overall, non-aggregates segments gross profit was $21 million lower than the prior year’s second quarter. Asphalt segment gross profit was $14 million in the quarter compared to $30 million in the prior year period. The decrease in earnings was primarily driven by the impact of higher liquid asphalt costs (approximately $10 million) and wet weather conditions that delayed project shipments. Asphalt volumes declined 8 percent as volume growth in California and Tennessee was more than offset by lower volumes in Alabama, Arizona and Texas. The average price for liquid asphalt increased 19 percent versus the prior year’s second quarter, outpacing the 1 percent increase in the average selling price.
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August 4, 2021
FOR IMMEDIATE RELEASE
Second quarter Concrete segment gross profit was $10 million compared to $14 million in the prior year. Shipments decreased 7 percent versus the prior year due to the timing of projects in Virginia, while average selling prices increased 3 percent compared to the prior year.
Calcium segment gross profit of $0.7 million was in line with the prior year quarter.
Selling, Administrative and General (SAG)
SAG expense was $101 million in the quarter compared with $91 million in the prior year. The increase was primarily due to higher incentive compensation tied to business performance and increased business development activities. On a trailing twelve-month basis, SAG expense was $371 million, or 7.6 percent as a percentage of total revenues.
Financial Position, Liquidity and Capital Allocation
Capital expenditures in the second quarter were $94 million, including $34 million for growth projects. During the fourth quarter of 2020, the Company restarted planned growth projects that were put on hold in the first quarter of 2020 as a result of the pandemic. For the full year 2021, the Company expects to spend between $450 and $475 million on capital expenditures, including growth projects. The Company will continue to review its plans and will adjust as needed.
As of June 30, 2021, total debt to trailing-twelve month Adjusted EBITDA was 2.0 times, or 1.3 times on a net debt basis reflecting $968 million of cash on hand. The Company’s weighted-average debt maturity was 15 years, and its effective weighted-average interest rate was 4.6 percent.
Interest expense, net of interest income, was $42 million in the second quarter, up from $34 million in the prior year. The increase includes $9 million of cost associated with financing the proposed acquisition of U.S. Concrete announced June 7, 2021.
On a trailing-twelve month basis, return on invested capital was 14.8 percent, 60 basis points higher than the comparable prior year period. The Company remains committed to driving further improvement through solid operating earnings growth coupled with disciplined capital management and a balanced approach to growth.
Outlook
Regarding the Company’s expectations for 2021, Mr. Hill said, “We reiterate our full-year Adjusted EBITDA range of $1.380 to $1.460 billion. Our operating performance in the first half of the year was strong, and we remain on track to achieve another year of earnings growth. Our aggregates business is executing well, and we are focused on factors within our control, including pricing and operating disciplines.”
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August 4, 2021
FOR IMMEDIATE RELEASE
Conference Call
Vulcan will host a conference call at 10:00 a.m. CT on August 4, 2021. A webcast will be available via the Company’s website at www.vulcanmaterials.com. Investors and other interested parties may access the teleconference live by calling 833-962-1439, or 832-900-4623 if outside the U.S., approximately 10 minutes before the scheduled start. The conference ID is 9979328. The conference call will be recorded and available for replay at the Company’s website approximately two hours after the call.
About Vulcan Materials Company
Vulcan Materials Company, a member of the S&P 500 Index with headquarters in Birmingham, Alabama, is the nation’s largest supplier of construction aggregates—primarily crushed stone, sand and gravel—and a major producer of aggregates-based construction materials, including asphalt and ready-mixed concrete. For additional information about Vulcan, go to www.vulcanmaterials.com.
FORWARD-LOOKING STATEMENT DISCLAIMER
This document contains forward-looking statements. Statements that are not historical fact, including statements about Vulcan’s beliefs and expectations, are forward-looking statements. Generally, these statements relate to future financial performance, results of operations, business plans or strategies, projected or anticipated revenues, expenses, earnings (including EBITDA and other measures), dividend policy, shipment volumes, pricing, levels of capital expenditures, intended cost reductions and cost savings, anticipated profit improvements and/or planned divestitures and asset sales. These forward-looking statements are sometimes identified by the use of terms and phrases such as “believe,” “should,” “would,” “expect,” “project,” “estimate,” “anticipate,” “intend,” “plan,” “will,” “can,” “may” or similar expressions elsewhere in this document. These statements are subject to numerous risks, uncertainties, and assumptions, including but not limited to general business conditions, competitive factors, pricing, energy costs, and other risks and uncertainties discussed in the reports Vulcan periodically files with the SEC.
Forward-looking statements are not guarantees of future performance and actual results, developments, and business decisions may vary significantly from those expressed in or implied by the forward-looking statements. The following risks related to Vulcan’s business, among others, could cause actual results to differ materially from those described in the forward-looking statements: general economic and business conditions; a pandemic, epidemic or other public health emergency, such as the COVID-19 outbreak; Vulcan’s dependence on the construction industry, which is subject to economic cycles; the timing and amount of federal, state and local funding for infrastructure; changes in the level of spending for private residential and private nonresidential construction; changes in Vulcan’s effective tax rate; the increasing reliance on information technology infrastructure, including the risks that the infrastructure does not work as intended, experiences technical difficulties or is subjected to cyber-attacks; the impact of the state of the global economy on Vulcan’s businesses and financial condition and access to capital markets; the highly competitive nature of the construction industry; the impact of future regulatory or legislative actions, including those relating to climate change, wetlands, greenhouse gas emissions, the definition of minerals, tax policy or international trade; the outcome of pending legal proceedings; pricing of Vulcan’s products; weather and other natural phenomena, including the impact of climate change and availability of water; availability and cost of trucks, railcars, barges and ships as well as their licensed operators for transport of Vulcan’s materials; energy costs; costs of hydrocarbon-based raw materials; healthcare costs; the amount of long-term debt and interest expense incurred by Vulcan; changes in interest rates; the impact of a discontinuation of the London Interbank Offered Rate (LIBOR); volatility in pension plan asset values and liabilities, which may require cash contributions to the pension plans; the impact of environmental cleanup costs and other liabilities relating to existing and/or divested businesses; Vulcan’s ability to secure and permit aggregates reserves in strategically located areas; Vulcan’s ability to manage and successfully integrate acquisitions; Vulcan’s proposed acquisition of U.S. Concrete, including (1) the risk that U.S. Concrete’s business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected, (2) the acquisition may not be completed in a timely manner, on the terms proposed, or at all, (3) the effect of the announcement or pendency of the proposed acquisition on Vulcan’s business relationships, operating results and business generally, (4) risks related to diverting management’s attention from ongoing business operations, and (5) the outcome of any legal proceedings related to the merger agreement or the proposed acquisition; the effect of changes in tax laws, guidance and interpretations; significant downturn in the construction industry may result in the impairment of goodwill or long-lived assets; changes in technologies, which could disrupt the way Vulcan does business and how Vulcan’s products are distributed; and other assumptions, risks and uncertainties detailed from time to time in the reports filed by Vulcan with the SEC. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement. Vulcan disclaims and does not undertake any obligation to update or revise any forward-looking statement in this document except as required by law.
Source: Vulcan Materials Company
Table A
Vulcan Materials Company
and Subsidiary Companies
| (in thousands, except per share data) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| Consolidated Statements of Earnings | June 30 | June 30 | ||||||||||||||
| (Condensed and unaudited) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Total revenues | $ | 1,361,047 | $ | 1,322,575 | $ | 2,429,391 | $ | 2,371,817 | ||||||||
| Cost of revenues | 962,683 | 926,056 | 1,801,760 | 1,773,575 | ||||||||||||
| Gross profit | 398,364 | 396,519 | 627,631 | 598,242 | ||||||||||||
| Selling, administrative and general expenses | 100,667 | 91,205 | 189,260 | 177,635 | ||||||||||||
| Gain (loss) on sale of property, plant & equipment | ||||||||||||||||
| and businesses | 211 | (258 | ) | 117,376 | 741 | |||||||||||
| Other operating expense, net | (10,372 | ) | (6,160 | ) | (18,698 | ) | (10,151 | ) | ||||||||
| Operating earnings | 287,536 | 298,896 | 537,049 | 411,197 | ||||||||||||
| Other nonoperating income (expense), net | 8,223 | 7,367 | 14,136 | (1,969 | ) | |||||||||||
| Interest expense, net | 41,696 | 33,954 | 74,814 | 64,727 | ||||||||||||
| Earnings from continuing operations | ||||||||||||||||
| before income taxes | 254,063 | 272,309 | 476,371 | 344,501 | ||||||||||||
| Income tax expense | 57,283 | 61,352 | 117,922 | 73,546 | ||||||||||||
| Earnings from continuing operations | 196,780 | 210,957 | 358,449 | 270,955 | ||||||||||||
| Loss on discontinued operations, net of tax | (1,436 | ) | (1,041 | ) | (2,491 | ) | (781 | ) | ||||||||
| Net earnings | $ | 195,344 | $ | 209,916 | $ | 355,958 | $ | 270,174 | ||||||||
| Basic earnings (loss) per share | ||||||||||||||||
| Continuing operations | $ | 1.48 | $ | 1.59 | $ | 2.70 | $ | 2.04 | ||||||||
| Discontinued operations | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | 0.00 | |||||
| Net earnings | $ | 1.47 | $ | 1.58 | $ | 2.68 | $ | 2.04 | ||||||||
| Diluted earnings (loss) per share | ||||||||||||||||
| Continuing operations | $ | 1.47 | $ | 1.58 | $ | 2.69 | $ | 2.03 | ||||||||
| Discontinued operations | $ | (0.01 | ) | $ | 0.00 | $ | (0.02 | ) | $ | 0.00 | ||||||
| Net earnings | $ | 1.46 | $ | 1.58 | $ | 2.67 | $ | 2.03 | ||||||||
| Weighted-average common shares outstanding | ||||||||||||||||
| Basic | 132,781 | 132,552 | 132,765 | 132,560 | ||||||||||||
| Assuming dilution | 133,507 | 133,115 | 133,455 | 133,154 | ||||||||||||
| Effective tax rate from continuing operations | 22.5 | % | 22.5 | % | 24.8 | % | 21.3 | % | ||||||||
Table B
Vulcan Materials Company
and Subsidiary Companies
| (in thousands) | ||||||||||||
| Consolidated Balance Sheets | June 30 | December 31 | June 30 | |||||||||
| (Condensed and unaudited) | 2021 | 2020 | 2020 | |||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 857,555 | $ | 1,197,068 | $ | 816,765 | ||||||
| Restricted cash | 110,851 | 945 | 434 | |||||||||
| Accounts and notes receivable | ||||||||||||
| Accounts and notes receivable, gross | 689,591 | 558,848 | 699,320 | |||||||||
| Allowance for doubtful accounts | (2,739 | ) | (2,551 | ) | (3,460 | ) | ||||||
| Accounts and notes receivable, net | 686,852 | 556,297 | 695,860 | |||||||||
| Inventories | ||||||||||||
| Finished products | 373,677 | 378,389 | 383,483 | |||||||||
| Raw materials | 37,967 | 33,780 | 33,178 | |||||||||
| Products in process | 5,099 | 4,555 | 5,116 | |||||||||
| Operating supplies and other | 33,900 | 31,861 | 29,703 | |||||||||
| Inventories | 450,643 | 448,585 | 451,480 | |||||||||
| Other current assets | 94,524 | 74,270 | 65,571 | |||||||||
| Total current assets | 2,200,425 | 2,277,165 | 2,030,110 | |||||||||
| Investments and long-term receivables | 34,264 | 34,301 | 43,849 | |||||||||
| Property, plant & equipment | ||||||||||||
| Property, plant & equipment, cost | 9,094,689 | 9,102,086 | 8,921,990 | |||||||||
| Allowances for depreciation, depletion & amortization | (4,729,456 | ) | (4,676,087 | ) | (4,538,980 | ) | ||||||
| Property, plant & equipment, net | 4,365,233 | 4,425,999 | 4,383,010 | |||||||||
| Operating lease right-of-use assets, net | 464,765 | 423,128 | 426,618 | |||||||||
| Goodwill | 3,172,112 | 3,172,112 | 3,172,112 | |||||||||
| Other intangible assets, net | 1,103,079 | 1,123,544 | 1,114,592 | |||||||||
| Other noncurrent assets | 231,149 | 230,656 | 228,433 | |||||||||
| Total assets | $ | 11,571,027 | $ | 11,686,905 | $ | 11,398,724 | ||||||
| Liabilities | ||||||||||||
| Current maturities of long-term debt | 15,436 | 515,435 | 500,026 | |||||||||
| Trade payables and accruals | 300,109 | 273,080 | 278,102 | |||||||||
| Other current liabilities | 283,700 | 259,368 | 260,621 | |||||||||
| Total current liabilities | 599,245 | 1,047,883 | 1,038,749 | |||||||||
| Long-term debt | 2,769,892 | 2,772,240 | 2,785,646 | |||||||||
| Deferred income taxes, net | 748,279 | 706,050 | 671,097 | |||||||||
| Deferred revenue | 170,160 | 174,045 | 177,534 | |||||||||
| Noncurrent operating lease liabilities | 443,128 | 399,582 | 405,578 | |||||||||
| Other noncurrent liabilities | 547,210 | 559,775 | 555,969 | |||||||||
| Total liabilities | $ | 5,277,914 | $ | 5,659,575 | $ | 5,634,573 | ||||||
| Equity | ||||||||||||
| Common stock, $1 par value | 132,678 | 132,516 | 132,446 | |||||||||
| Capital in excess of par value | 2,806,693 | 2,802,012 | 2,789,801 | |||||||||
| Retained earnings | 3,531,861 | 3,274,107 | 3,049,943 | |||||||||
| Accumulated other comprehensive loss | (178,119 | ) | (181,305 | ) | (208,039 | ) | ||||||
| Total equity | $ | 6,293,113 | $ | 6,027,330 | $ | 5,764,151 | ||||||
| Total liabilities and equity | $ | 11,571,027 | $ | 11,686,905 | $ | 11,398,724 | ||||||
Table C
Vulcan Materials Company
and Subsidiary Companies
| (in thousands) | ||||||||
| Six Months Ended | ||||||||
| Consolidated Statements of Cash Flows | June 30 | |||||||
| (Condensed and unaudited) | 2021 | 2020 | ||||||
| Operating Activities | ||||||||
| Net earnings | $ | 355,958 | $ | 270,174 | ||||
| Adjustments to reconcile net earnings to net cash provided by operating activities | ||||||||
| Depreciation, depletion, accretion and amortization | 203,475 | 194,951 | ||||||
| Noncash operating lease expense | 20,867 | 17,977 | ||||||
| Net gain on sale of property, plant & equipment and businesses | (117,376 | ) | (741 | ) | ||||
| Contributions to pension plans | (4,097 | ) | (4,409 | ) | ||||
| Share-based compensation expense | 17,688 | 15,220 | ||||||
| Deferred tax expense | 41,103 | 36,644 | ||||||
| Changes in assets and liabilities before initial effects of business acquisitions and dispositions | (135,007 | ) | (101,271 | ) | ||||
| Other, net | 15,262 | (2,954 | ) | |||||
| Net cash provided by operating activities | $ | 397,873 | $ | 425,591 | ||||
| Investing Activities | ||||||||
| Purchases of property, plant & equipment | (192,234 | ) | (223,147 | ) | ||||
| Proceeds from sale of property, plant & equipment | 190,747 | 3,063 | ||||||
| Proceeds from sale of businesses | 0 | 651 | ||||||
| Payment for businesses acquired, net of acquired cash | 0 | (5,668 | ) | |||||
| Other, net | 15 | 5,575 | ||||||
| Net cash used for investing activities | $ | (1,472 | ) | $ | (219,526 | ) | ||
| Financing Activities | ||||||||
| Payment of current maturities and long-term debt | (500,013 | ) | (250,012 | ) | ||||
| Proceeds from issuance of long-term debt | 0 | 750,000 | ||||||
| Debt issuance and exchange costs | (13,286 | ) | (10,762 | ) | ||||
| Settlements of interest rate derivatives | 0 | (19,863 | ) | |||||
| Purchases of common stock | 0 | (26,132 | ) | |||||
| Dividends paid | (98,173 | ) | (90,128 | ) | ||||
| Share-based compensation, shares withheld for taxes | (12,782 | ) | (15,830 | ) | ||||
| Other, net | (1,754 | ) | (645 | ) | ||||
| Net cash provided by (used for) financing activities | $ | (626,008 | ) | $ | 336,628 | |||
| Net increase (decrease) in cash and cash equivalents and restricted cash | (229,607 | ) | 542,693 | |||||
| Cash and cash equivalents and restricted cash at beginning of year | 1,198,013 | 274,506 | ||||||
| Cash and cash equivalents and restricted cash at end of period | $ | 968,406 | $ | 817,199 | ||||
Table D
Segment Financial Data and Unit Shipments
| (in thousands, except per unit data) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Total Revenues | ||||||||||||||||
| Aggregates 1 | $ | 1,125,367 | $ | 1,070,596 | $ | 2,020,276 | $ | 1,938,822 | ||||||||
| Asphalt 2 | 212,577 | 222,950 | 359,744 | 362,739 | ||||||||||||
| Concrete | 96,201 | 100,683 | 177,560 | 195,448 | ||||||||||||
| Calcium | 1,960 | 1,889 | 4,020 | 3,915 | ||||||||||||
| Segment sales | $ | 1,436,105 | $ | 1,396,118 | $ | 2,561,600 | $ | 2,500,924 | ||||||||
| Aggregates intersegment sales | (75,058 | ) | (73,543 | ) | (132,209 | ) | (129,107 | ) | ||||||||
| Total revenues | $ | 1,361,047 | $ | 1,322,575 | $ | 2,429,391 | $ | 2,371,817 | ||||||||
| Gross Profit | ||||||||||||||||
| Aggregates | $ | 373,833 | $ | 351,162 | $ | 597,471 | $ | 545,293 | ||||||||
| Asphalt | 13,532 | 30,464 | 10,541 | 28,029 | ||||||||||||
| Concrete | 10,293 | 14,227 | 18,061 | 23,440 | ||||||||||||
| Calcium | 706 | 666 | 1,558 | 1,480 | ||||||||||||
| Total | $ | 398,364 | $ | 396,519 | $ | 627,631 | $ | 598,242 | ||||||||
| Depreciation, Depletion, Accretion and Amortization | ||||||||||||||||
| Aggregates | $ | 84,328 | $ | 80,747 | $ | 165,136 | $ | 157,883 | ||||||||
| Asphalt | 9,060 | 8,668 | 18,155 | 17,402 | ||||||||||||
| Concrete | 4,026 | 4,001 | 7,978 | 8,083 | ||||||||||||
| Calcium | 39 | 48 | 78 | 97 | ||||||||||||
| Other | 5,654 | 6,006 | 12,128 | 11,486 | ||||||||||||
| Total | $ | 103,107 | $ | 99,470 | $ | 203,475 | $ | 194,951 | ||||||||
| Average Unit Sales Price and Unit Shipments | ||||||||||||||||
| Aggregates | ||||||||||||||||
| Freight-adjusted revenues 3 | $ | 873,971 | $ | 814,713 | $ | 1,555,126 | $ | 1,462,746 | ||||||||
| Aggregates - tons | 58,528 | 56,195 | 104,965 | 101,243 | ||||||||||||
| Freight-adjusted sales price 4 | $ | 14.93 | $ | 14.50 | $ | 14.82 | $ | 14.45 | ||||||||
| Other Products | ||||||||||||||||
| Asphalt Mix - tons | 3,134 | 3,403 | 5,351 | 5,460 | ||||||||||||
| Asphalt Mix - sales price | $ | 58.14 | $ | 57.46 | $ | 57.58 | $ | 57.86 | ||||||||
| Ready-mixed concrete - cubic yards | 731 | 786 | 1,344 | 1,520 | ||||||||||||
| Ready-mixed concrete - sales price | $ | 130.61 | $ | 127.35 | $ | 131.03 | $ | 127.62 | ||||||||
| Calcium - tons | 71 | 71 | 145 | 144 | ||||||||||||
| Calcium - sales price | $ | 27.64 | $ | 26.55 | $ | 27.64 | $ | 27.06 | ||||||||
| 1 | Includes product sales (crushed stone, sand and gravel, sand, and other aggregates), as well as freight & delivery costs that we pass along to our customers, and service revenues related to aggregates. |
| 2 | Includes product sales, as well as service revenues from our asphalt construction paving business. |
| 3 | Freight-adjusted revenues are Aggregates segment sales excluding freight & delivery revenues and immaterial other revenues related to services, such as landfill tipping fees, that are derived from our aggregates business. |
| 4 | Freight-adjusted sales price is calculated as freight-adjusted revenues divided by aggregates unit shipments. |
Appendix 1
1. Reconciliation of Non-GAAP Measures
Aggregates segment freight-adjusted revenues is not a Generally Accepted Accounting Principle (GAAP) measure and should not be considered as an alternative to metrics defined by GAAP. We present this metric as it is consistent with the basis by which we review our operating results. We believe that this presentation is consistent with our competitors and meaningful to our investors as it excludes revenues associated with freight & delivery, which are pass-through activities. It also excludes immaterial other revenues related to services, such as landfill tipping fees, that are derived from our aggregates business. Additionally, we use this metric as the basis for calculating the average sales price of our aggregates products. Reconciliation of this metric to its nearest GAAP measure is presented below:
Aggregates Segment Freight-Adjusted Revenues
| (in thousands, except per ton data) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Aggregates segment | ||||||||||||||||
| Segment sales | $ | 1,125,367 | $ | 1,070,596 | $ | 2,020,276 | $ | 1,938,822 | ||||||||
| Less: Freight & delivery revenues 1 | 234,845 | 240,880 | 432,071 | 446,588 | ||||||||||||
| Other revenues | 16,551 | 15,003 | 33,079 | 29,488 | ||||||||||||
| Freight-adjusted revenues | $ | 873,971 | $ | 814,713 | $ | 1,555,126 | $ | 1,462,746 | ||||||||
| Unit shipment - tons | 58,528 | 56,195 | 104,965 | 101,243 | ||||||||||||
| Freight-adjusted sales price | $ | 14.93 | $ | 14.50 | $ | 14.82 | $ | 14.45 | ||||||||
| 1 | At the segment level, freight & delivery revenues include intersegment freight & delivery (which are eliminated at the consolidated level) and freight to remote distribution sites. |
Aggregates segment incremental gross profit flow-through rate is not a GAAP measure and represents the year-over-year change in gross profit divided by the year-over-year change in segment sales excluding freight & delivery (revenues and costs). This metric should not be considered as an alternative to metrics defined by GAAP. We present this metric as it is consistent with the basis by which we review our operating results. We believe that this presentation is consistent with our competitors and meaningful to our investors as it excludes revenues associated with freight & delivery, which are pass-through activities. Reconciliation of this metric to its nearest GAAP measure is presented below:
Aggregates Segment Incremental Gross Profit Margin in Accordance with GAAP
| (dollars in thousands) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Aggregates segment | ||||||||||||||||
| Gross profit | $ | 373,833 | $ | 351,162 | $ | 597,471 | $ | 545,293 | ||||||||
| Segment sales | $ | 1,125,367 | $ | 1,070,596 | $ | 2,020,276 | $ | 1,938,822 | ||||||||
| Gross profit margin | 33.2 | % | 32.8 | % | 29.6 | % | 28.1 | % | ||||||||
| Incremental gross profit margin | 41.4 | % | 64.1 | % | ||||||||||||
Aggregates Segment Incremental Gross Profit Flow-through Rate (Non-GAAP)
| (dollars in thousands) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Aggregates segment | ||||||||||||||||
| Gross profit | $ | 373,833 | $ | 351,162 | $ | 597,471 | $ | 545,293 | ||||||||
| Segment sales | $ | 1,125,367 | $ | 1,070,596 | $ | 2,020,276 | $ | 1,938,822 | ||||||||
| Less: Freight & delivery revenues 1 | 234,845 | 240,880 | 432,071 | 446,588 | ||||||||||||
| Segment sales excluding freight & delivery | $ | 890,522 | $ | 829,716 | $ | 1,588,205 | $ | 1,492,234 | ||||||||
| Gross profit margin excluding freight & delivery | 42.0 | % | 42.3 | % | 37.6 | % | 36.5 | % | ||||||||
| Incremental gross profit flow-through rate | 37.3 | % | 54.4 | % | ||||||||||||
| 1 | At the segment level, freight & delivery revenues include intersegment freight & delivery (which are eliminated at the consolidated level) and freight to remote distribution sites. |
GAAP does not define "Aggregates segment cash gross profit" and it should not be considered as an alternative to earnings measures defined by GAAP. We and the investment community use this metric to assess the operating performance of our business. Additionally, we present this metric as we believe that it closely correlates to long-term shareholder value. We do not use this metric as a measure to allocate resources. Aggregates segment cash gross profit per ton is computed by dividing Aggregates segment cash gross profit by tons shipped. Reconciliation of this metric to its nearest GAAP measure is presented below:
Aggregates Segment Cash Gross Profit
| (in thousands, except per ton data) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Aggregates segment | ||||||||||||||||
| Gross profit | $ | 373,833 | $ | 351,162 | $ | 597,471 | $ | 545,293 | ||||||||
| Depreciation, depletion, accretion and amortization | 84,328 | 80,747 | 165,136 | 157,883 | ||||||||||||
| Aggregates segment cash gross profit | $ | 458,161 | $ | 431,909 | $ | 762,607 | $ | 703,176 | ||||||||
| Unit shipments - tons | 58,528 | 56,195 | 104,965 | 101,243 | ||||||||||||
| Aggregates segment cash gross profit per ton | $ | 7.83 | $ | 7.69 | $ | 7.27 | $ | 6.95 | ||||||||
Appendix 2
Reconciliation of Non-GAAP Measures (Continued)
GAAP does not define "Earnings Before Interest, Taxes, Depreciation and Amortization" (EBITDA) and it should not be considered as an alternative to earnings measures defined by GAAP. We use this metric to assess the operating performance of our business and as a basis for strategic planning and forecasting as we believe that it closely correlates to long-term shareholder value. We do not use this metric as a measure to allocate resources. We adjust EBITDA for certain items to provide a more consistent comparison of earnings performance from period to period. Reconciliation of this metric to its nearest GAAP measure is presented below:
EBITDA and Adjusted EBITDA
| (in thousands) | ||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | TTM | ||||||||||||||||||||||
| June 30 | June 30 | June 30 | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Net earnings | $ | 195,344 | $ | 209,916 | $ | 355,958 | $ | 270,174 | $ | 670,264 | $ | 626,979 | ||||||||||||
| Income tax expense | 57,283 | 61,352 | 117,922 | 73,546 | 200,179 | 150,453 | ||||||||||||||||||
| Interest expense, net | 41,696 | 33,954 | 74,814 | 64,727 | 144,480 | 127,758 | ||||||||||||||||||
| Loss on discontinued operations, net of tax | 1,436 | 1,041 | 2,491 | 781 | 5,225 | 4,637 | ||||||||||||||||||
| EBIT | $ | 295,759 | $ | 306,263 | $ | 551,185 | $ | 409,228 | $ | 1,020,148 | $ | 909,827 | ||||||||||||
| Depreciation, depletion, accretion and amortization | 103,107 | 99,470 | 203,475 | 194,951 | 405,330 | 386,870 | ||||||||||||||||||
| EBITDA | $ | 398,866 | $ | 405,733 | $ | 754,660 | $ | 604,179 | $ | 1,425,478 | $ | 1,296,697 | ||||||||||||
| Gain on sale of real estate and businesses, net | 0 | 0 | (114,695 | ) | 0 | (114,695 | ) | (9,289 | ) | |||||||||||||||
| Property donation | 0 | 0 | 0 | 0 | 0 | 10,847 | ||||||||||||||||||
| Charges associated with divested operations | 350 | 774 | 686 | 774 | 6,847 | 3,807 | ||||||||||||||||||
| Business development 1 | 5,489 | (3,519 | ) | 5,875 | (2,459 | ) | 15,668 | (711 | ) | |||||||||||||||
| COVID-19 direct incremental costs | 1,318 | 4,361 | 3,786 | 5,009 | 8,947 | 5,009 | ||||||||||||||||||
| Pension settlement charge | 0 | 0 | 0 | 0 | 22,740 | 0 | ||||||||||||||||||
| Restructuring charges | 0 | 465 | 0 | 1,333 | 0 | 7,790 | ||||||||||||||||||
| Adjusted EBITDA | $ | 406,023 | $ | 407,814 | $ | 650,312 | $ | 608,836 | $ | 1,364,985 | $ | 1,314,150 | ||||||||||||
| Depreciation, depletion, accretion and amortization | (103,107 | ) | (99,470 | ) | (203,475 | ) | (194,951 | ) | (405,330 | ) | (386,870 | ) | ||||||||||||
| Adjusted EBIT | $ | 302,916 | $ | 308,344 | $ | 446,837 | $ | 413,885 | $ | 959,655 | $ | 927,280 | ||||||||||||
| Adjusted EBITDA margin | 29.8 | % | 30.8 | % | 26.8 | % | 25.7 | % | 27.8 | % | 26.4 | % | ||||||||||||
| 1 | Represents non-routine charges or gains associated with acquisitions and dispositions including the cost impact of purchase accounting inventory valuations. |
Similar to our presentation of Adjusted EBITDA, we present Adjusted diluted earnings per share (EPS) from continuing operations to provide a more consistent comparison of earnings performance from period to period. This metric is not defined by GAAP and should not be considered as an alternative to earnings measures defined by GAAP. Reconciliation of this metric to its nearest GAAP measure is presented below:
Adjusted Diluted EPS from Continuing Operations (Adjusted Diluted EPS)
| Three Months Ended | Six Months Ended | TTM | ||||||||||||||||||||||
| June 30 | June 30 | June 30 | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Diluted EPS from continuing operations | $ | 1.47 | $ | 1.58 | $ | 2.69 | $ | 2.03 | $ | 5.07 | $ | 4.73 | ||||||||||||
| Items included in Adjusted EBITDA above | 0.05 | 0.02 | (0.58 | ) | 0.03 | (0.32 | ) | 0.09 | ||||||||||||||||
| Alabama NOL carryforward valuation allowance | 0.00 | 0.00 | 0.10 | 0.00 | 0.10 | 0.00 | ||||||||||||||||||
| Acquisition financing interest costs | 0.05 | 0.00 | 0.05 | 0.00 | 0.05 | 0.00 | ||||||||||||||||||
| Adjusted diluted EPS | $ | 1.57 | $ | 1.60 | $ | 2.26 | $ | 2.06 | $ | 4.90 | $ | 4.82 | ||||||||||||
Net debt to Adjusted EBITDA is not a GAAP measure and should not be considered as an alternative to metrics defined by GAAP. We, the investment community and credit rating agencies use this metric to assess our leverage. Net debt subtracts cash and cash equivalents and restricted cash from total debt. Reconciliation of this metric to its nearest GAAP measure is presented below:
Net Debt to Adjusted EBITDA
| (in thousands) | ||||||||
| June 30 | ||||||||
| 2021 | 2020 | |||||||
| Debt | ||||||||
| Current maturities of long-term debt | $ | 15,436 | $ | 500,026 | ||||
| Long-term debt | 2,769,892 | 2,785,646 | ||||||
| Total debt | $ | 2,785,328 | $ | 3,285,672 | ||||
| Less: Cash and cash equivalents and restricted cash | 968,406 | 817,199 | ||||||
| Net debt | $ | 1,816,922 | $ | 2,468,473 | ||||
| Trailing-Twelve Months (TTM) Adjusted EBITDA | $ | 1,364,985 | $ | 1,314,150 | ||||
| Total debt to TTM Adjusted EBITDA | 2.0 | x | 2.5 | x | ||||
| Net debt to TTM Adjusted EBITDA | 1.3 | x | 1.9 | x | ||||
Appendix 3
Reconciliation of Non-GAAP Measures (Continued)
The following reconciliation to the mid-point of the range of 2021 Projected EBITDA excludes adjustments (as noted in Adjusted EBITDA above) as they are difficult to forecast (timing or amount). Due to the difficulty in forecasting such adjustments, we are unable to estimate their significance. This metric is not defined by GAAP and should not be considered as an alternative to earnings measures defined by GAAP. Reconciliation of this metric to its nearest GAAP measure is presented below:
2021 Projected EBITDA
| (in millions) | ||||
| Mid-point | ||||
| Net earnings | $ | 670 | ||
| Income tax expense | 205 | |||
| Interest expense, net of interest income | 145 | |||
| Discontinued operations, net of tax | 0 | |||
| Depreciation, depletion, accretion and amortization | 400 | |||
| Projected EBITDA | $ | 1,420 | ||
We define “Return on Invested Capital” (ROIC) as Adjusted EBITDA for the trailing-twelve months divided by average invested capital (as illustrated below) during the trailing 5-quarters. Our calculation of ROIC is considered a non-GAAP financial measure because we calculate ROIC using the non-GAAP metric EBITDA. We believe that our ROIC metric is meaningful because it helps investors assess how effectively we are deploying our assets. Although ROIC is a standard financial metric, numerous methods exist for calculating a company’s ROIC. As a result, the method we use to calculate our ROIC may differ from the methods used by other companies. This metric is not defined by GAAP and should not be considered as an alternative to earnings measures defined by GAAP. Reconciliation of this metric to its nearest GAAP measure is presented below:
Return on Invested Capital
| (dollars in thousands) | ||||||||
| TTM | ||||||||
| June 30 | ||||||||
| 2021 | 2020 | |||||||
| Adjusted EBITDA | $ | 1,364,985 | $ | 1,314,150 | ||||
| Average invested capital 1 | ||||||||
| Property, plant & equipment, net | $ | 4,376,276 | $ | 4,335,633 | ||||
| Goodwill | 3,172,113 | 3,168,072 | ||||||
| Other intangible assets | 1,112,585 | 1,087,580 | ||||||
| Fixed and intangible assets | $ | 8,660,974 | $ | 8,591,285 | ||||
| Current assets | $ | 2,153,208 | $ | 1,453,094 | ||||
| Less: Cash and cash equivalents | 991,857 | 265,920 | ||||||
| Less: Current tax | 19,167 | 19,289 | ||||||
| Adjusted current assets | 1,142,184 | 1,167,885 | ||||||
| Current liabilities | 864,325 | 649,772 | ||||||
| Less: Current maturities of long-term debt | 311,154 | 100,025 | ||||||
| Less: Short-term debt | 0 | 27,400 | ||||||
| Adjusted current liabilities | 553,171 | 522,347 | ||||||
| Adjusted net working capital | $ | 589,013 | $ | 645,538 | ||||
| Average invested capital | $ | 9,249,987 | $ | 9,236,823 | ||||
| Return on invested capital | 14.8 | % | 14.2 | % | ||||
1 Average invested capital is based on a trailing 5-quarters.