Exhibit 99.1
May 3, 2016
FOR IMMEDIATE RELEASE
Investor Contact: Mark Warren (205) 298-3220
Media Contact: David Donaldson (205) 298-3220
VULCAN ANNOUNCES FIRST QUARTER 2016 RESULTS
Earnings Improve and Margins Expand on Higher Revenues
Momentum Continues in Aggregates Shipments and Pricing
Birmingham, Alabama – May 3, 2016 – Vulcan Materials Company (NYSE:VMC), the nation’s largest producer of construction aggregates, today announced results for the first quarter ending March 31, 2016.
The Company’s first quarter results reflect continued strong revenue growth and margin expansion. Total revenues grew 20 percent. Total gross profit more than doubled, with growth in all segments. First quarter Adjusted EBITDA was $156 million. Compared with the prior year’s first quarter, aggregates shipments rose 5.7 million tons, or 17 percent, and freight-adjusted aggregates pricing increased $1.08 per ton, or 9.5 percent.
For the trailing twelve months, Adjusted EBITDA of $914 million represents a 42 percent gain over the prior year period. Same-store aggregates shipments for this period grew 9 percent, and freight-adjusted pricing grew 8 percent. Incremental aggregates gross profit equaled 71 percent of incremental freight-adjusted revenues. Aggregates gross profit as a percentage of freight-adjusted revenues expanded to 38 percent from 31 percent.
Tom Hill, Chairman and Chief Executive Officer, said, “The recovery in construction activity continues across most of our markets and our strong first quarter volume growth – along with the growth we’ve seen over the past several quarters – reflects that sustained strengthening in demand. Several factors contributed to the above-trend volume growth seen in the first quarter, including relatively favorable weather conditions in certain of our markets, our customers’ success in winning and executing new project work, incremental improvements in public construction spending, and an additional shipping day in the quarter due to Leap Year.
Our local leadership teams continue to capitalize on the recovery in demand for our products, serving our customers well and doing so efficiently and safely. As a result of their efforts and our improving business fundamentals, we currently project full year adjusted EBITDA at or near the high-end of our guidance range and supported by 8 to 9 percent growth in full year aggregates shipments over 2015.”
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May 3, 2016
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First Quarter Summary (compared with prior year’s first quarter)
| ● | Total revenues increased $123 million, or 20 percent, to $755 million |
| ● | Gross profit increased $87 million, or 112 percent, to $165 million |
| ● | Aggregates freight-adjusted revenues increased $107 million, or 28 percent, to $487 million |
| o | Shipments increased 17 percent, or 5.7 million tons, to 39 million tons |
| o | Freight-adjusted sales price increased 9.5 percent |
| o | Segment gross profit increased $81 million, or 119 percent, to $148 million |
| ● | Asphalt, Concrete and Calcium segment gross profit improved $6 million, or 60 percent, collectively |
| ● | SAG declined approximately 50 basis points as a percentage of total revenues |
| ● | Adjusted EBIT was $86 million, an increase of $75 million |
| ● | Adjusted EBITDA was $156 million, an increase of $78 million, or 100 percent |
| ● | Earnings from continuing operations were $0.15 per diluted share versus a loss of $0.28 per diluted share in the first quarter of 2015 |
| o | The current quarter’s earnings include $0.11 per diluted share for impairment of leased property and certain charges recorded in Other Operating Expense (detailed on page 4 of this release) |
| o | The prior year’s results include $0.12 per diluted share for net charges related to a debt purchase, gain on sale of assets, restructuring and business development costs |
| o | Adjusted for these items, earnings from continuing operations were $0.26 per diluted share in the first quarter of 2016 versus a loss of $0.16 per diluted share in the prior year |
Trailing Twelve Months Summary (compared with the prior twelve month period)
| ● | Total revenues increased $495 million, or 16 percent, to $3.5 billion |
| ● | Gross profit increased $313 million, or 50 percent, to $944 million |
| ● | Aggregates freight-adjusted revenues increased $370 million, or 20 percent, to $2.2 billion |
| o | Total shipments increased 11 percent, or 17.7 million tons, to 184 million tons; same-store shipments increased 9 percent |
| o | Freight-adjusted sales price increased 8 percent |
| o | Segment gross profit increased $263 million, or 46 percent, to $836 million |
| ● | Asphalt, Concrete and Calcium segment gross profit improved 86 percent, or $50 million, collectively |
| ● | SAG declined as a percentage of total revenues by 60 basis points |
| ● | Adjusted EBIT was $637 million, an increase of $271 million, or 74 percent |
| ● | Adjusted EBITDA was $914 million, an increase of $272 million, or 42 percent |
| ● | Earnings from continuing operations were $2.14 per diluted share versus $0.87 per share |
| o | These results include gains on sale of assets, as well as charges related to debt refinancing, impairment of leased property certain charges recorded in Other Operating Expense (noted above for first quarter 2016), business development activities, restructuring and certain income tax items |
| o | Excluding these items, earnings from continuing operations were $2.57 per diluted share versus $1.04 per diluted share |
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May 3, 2016
FOR IMMEDIATE RELEASE
Segment Results
Aggregates
The gradual recovery in construction activity and demand for aggregates continued across most of the Company’s footprint in the first quarter. On a same-store basis, most of the Company’s key states realized strong double-digit volume growth, aided by relatively favorable weather for construction as well as strong performance by our customers in winning and executing projects. In contrast, California shipments fell more than 10 percent from the prior year, and shipments in Texas grew only 2 percent. Wet weather negatively impacted shipments in both states. In addition, California experienced a slowdown in larger public construction activity, and Texas experienced softening demand in the Houston metro region.
For the twelve months ended March 31, same-store shipments rose 9 percent over the year-earlier period. This quarter was the eleventh consecutive quarter in which the rate of shipments, on a consecutive trailing twelve months basis, has increased. Despite these recent gains, demand for aggregates remains well below demographic-driven historical trend lines in the U.S. The passage of the FAST Act and key state-level transportation funding measures does not appear yet to have impacted construction activity significantly. The Company believes conditions remain in place for a sustained, multi-year recovery in demand for aggregates.
For the quarter, freight-adjusted average sales price for aggregates increased 9.5 percent, or $1.08 per ton, versus the prior year. On a trailing twelve months basis, pricing in all of the Company’s major markets has increased versus the prior year’s comparable period. The overall pricing climate remains favorable as construction materials producers remain focused on earning adequate returns on capital.
First quarter unit cost of sales in the Aggregates segment was lower than the prior year by approximately $0.68 per ton. Improved leverage of fixed costs with higher production, as well as lower average diesel costs, underpinned this improvement versus a weather-challenged comparison period. Repair and maintenance costs in the first quarter remained higher than the prior year period, consistent with the Company’s experience over the last few quarters. For the trailing twelve months, unit costs of sales, excluding the impact of lower diesel costs, was essentially flat. These results reflect the Company’s continued commitment to plant-level cost controls and operating disciplines.
Aggregates segment unit margins continued to expand faster than unit pricing. Gross profit per ton increased $1.76, or 87 percent, from the prior year. Cash gross profit per ton increased $1.57, or 43 percent, from the prior year. On a trailing twelve months basis, unit gross profit has increased 32 percent, while unit cash gross profit has increased 20 percent to $5.80 per ton. These results reflect the Company’s continued commitment to plant-level cost controls and operating disciplines.
For the quarter, aggregates gross profit flow-through rate was strong. Freight-adjusted revenues increased $107 million, while gross profit for the segment increased $81 million. On a same-store basis, incremental gross profit was 77 percent of incremental freight-adjusted revenues. Because quarterly results can be volatile due to seasonality and other factors, the Company encourages investors to also consider longer-term trends. On a trailing twelve months same-store basis, this flow-through rate was 71 percent and has consistently exceeded the Company’s stated goal of 60 percent in each of the quarters since volumes began to recover in the second half of 2013.
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May 3, 2016
FOR IMMEDIATE RELEASE
Asphalt, Concrete and Calcium
In the first quarter, asphalt gross profit was $12 million versus $9 million in the prior year. This year-over-year improvement was due to solid sales and operating disciplines as well as effective materials margin management. On a total and same-store basis, volumes declined 4 percent due primarily to extremely wet weather in California in January and March of this year compared to an unseasonably mild first quarter last year.
Concrete gross profit improved $2.7 million from the prior year. On a same-store basis, sales volumes increased sharply versus the prior year due to strong shipment growth in Georgia, Texas and Virginia. Pricing and unit profitability also continued to improve.
In the first quarter, the Company’s Calcium segment reported gross profit of $0.6 million, a 13 percent improvement over the prior year.
Selling, Administrative and General (SAG), Asset Impairment, and Other Operating Expense
Selling, administrative and general (SAG) expenses increased $9.7 million versus the prior year but decreased approximately 50 basis points as a percentage of total revenues. The year-over-year increase results primarily from certain compensation-related charges during the first quarter of 2016 as a result of the significant improvement in both business performance and the Company’s stock price.
During the first quarter, the Company recognized approximately $22 million in charges not reflected in Adjusted EBITDA. Included in this amount is $9.6 million impairment relating to a leased property we no longer intend to develop (reference impairment of long-lived assets on the Consolidated Statements of Earnings). Also included are charges associated with office space no longer needed and vacated ($5.2 million), the write-off of a prepaid royalty asset resulting from a change in long-term mining plans ($3.6 million), a property litigation settlement ($1.9 million), and environmental liability accruals associated with previously divested properties ($1.2 million). These items drove the $10 million increase in Other Operating Expense over the prior year’s first quarter ($13.9 million vs. $3.9 million). A reconciliation of Net Earnings to EBITDA and Adjusted EBITDA can be found on Appendix 4 to the attached first quarter financial statements.
Credit Position and Capital Allocation
At the end of the first quarter, total debt outstanding was approximately $2 billion, including $235 million of floating-rate borrowings, and the ratio of total debt to trailing twelve months Adjusted EBITDA was 2.2 times. The quarter end cash balance was $192 million.
In March, the Company’s financial strength and flexibility was recognized with investment-grade ratings by Standard & Poor’s Financial Services LLC and Fitch Ratings, Inc. The Company is committed to maintaining investment-grade ratings through the business cycle.
Cash capital expenditures in the first quarter were $108 million, including $28 million invested in the purchase of two replacement ships to transport aggregates from the Company’s high-volume quarry in Mexico, new site development and other growth opportunities. For the full year, core capital expenditures, excluding acquisitions and internal growth capital investments, are expected to be approximately $275 million.
In the first quarter, the Company returned $50 million to shareholders through dividends and share repurchases.
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May 3, 2016
FOR IMMEDIATE RELEASE
Demand and Earnings Outlook
Regarding the Company’s earnings outlook for 2016, Mr. Hill stated, “The strong fundamentals of our aggregates-focused business and the execution of our teams led to strong earnings growth in 2015 and to a fast start in 2016. Our fast start through the first quarter has put us ahead of our original plans and tracking towards the high end of our full year Adjusted EBITDA guidance of $1.0 to $1.1 billion. In addition, we now project full year 2016 aggregates shipments to be 8 to 9 percent higher than 2015 (vs. our prior 7 percent growth estimate). Other management expectations (e.g., aggregates price, gross profit growth and SAG expense) remain consistent with those outlined during our fourth quarter 2015 communications.
Mr. Hill concluded, “Our early 2016 results and full year outlook align well with our longer range market expectations and performance goals. Since the beginning of this recovery in the second half of 2013, our teams’ efforts have resulted in trailing twelve months aggregates gross profit increasing nearly $480 million on a 44 million tons increase in annualized shipments. We remain on track to deliver further gains in profitability and cash flow as the recovery moves forward. I’m very pleased with the way our people have executed, and I’m proud of their commitment to continuous improvement in safety, customer service, and operating efficiency.”
Conference Call
Vulcan will host a conference call at 10:00 a.m. CDT on May 3, 2016. A webcast will be available via the Company’s website at www.vulcanmaterials.com. Investors and other interested parties in the U.S. may also access the teleconference live by calling 888-427-9419 approximately 10 minutes before the scheduled start. International participants can dial 719-325-2393. The conference ID is 9719747. The conference call will be recorded and available for replay at the Company’s website approximately two hours after the call.
Vulcan Materials Company, a member of the S&P 500 Index, is the nation's largest producer of construction aggregates, and a major producer of other construction materials.
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.
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May 3, 2016
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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: those associated with general economic and business conditions; the timing and amount of federal, state and local funding for infrastructure; changes in Vulcan’s effective tax rate that can adversely impact results; the increasing reliance on information technology infrastructure for Vulcan’s ticketing, procurement, financial statements and other processes could adversely affect operations in the event such infrastructure does not work as intended or 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; changes in the level of spending for private residential and private nonresidential construction; the highly competitive nature of the construction materials industry; the impact of future regulatory or legislative actions; the outcome of pending legal proceedings; pricing of Vulcan's products; weather and other natural phenomena; 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; volatility in pension plan asset values and liabilities which may require cash contributions to the pension plans; the impact of environmental clean-up costs and other liabilities relating to previously divested businesses; Vulcan's ability to secure and permit aggregates reserves in strategically located areas; Vulcan's ability to manage and successfully integrate acquisitions; the potential of goodwill or long-lived asset impairment; the potential impact of future legislation or regulations relating to climate change or greenhouse gas emissions or the definition of minerals; 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.
Table A
Vulcan Materials Company
and Subsidiary Companies
(in thousands, except per share data)
| Three Months Ended | ||||||||
| Consolidated Statements of Earnings | March 31 | |||||||
| (Condensed and unaudited) | 2016 | 2015 | ||||||
| Total revenues | $ | 754,728 | $ | 631,293 | ||||
| Cost of revenues | 590,010 | 553,428 | ||||||
| Gross profit | 164,718 | 77,865 | ||||||
| Selling, administrative and general expenses | 76,468 | 66,763 | ||||||
| Gain on sale of property, plant & equipment | ||||||||
| and businesses | 555 | 6,375 | ||||||
| Impairment of long-lived assets | (9,646 | ) | 0 | |||||
| Restructuring charges | (320 | ) | (2,818 | ) | ||||
| Other operating expense, net | (13,918 | ) | (3,900 | ) | ||||
| Operating earnings | 64,921 | 10,759 | ||||||
| Other nonoperating income (expense), net | (694 | ) | 979 | |||||
| Interest expense, net | 33,732 | 62,480 | ||||||
| Earnings (loss) from continuing operations | ||||||||
| before income taxes | 30,495 | (50,742 | ) | |||||
| Provision for (benefit from) income taxes | 9,764 | (14,075 | ) | |||||
| Earnings (loss) from continuing operations | 20,731 | (36,667 | ) | |||||
| Loss on discontinued operations, net of tax | (1,807 | ) | (3,011 | ) | ||||
| Net earnings (loss) | $ | 18,924 | $ | (39,678 | ) | |||
| Basic earnings (loss) per share | ||||||||
| Continuing operations | $ | 0.15 | $ | (0.28 | ) | |||
| Discontinued operations | $ | (0.01 | ) | $ | (0.02 | ) | ||
| Net earnings (loss) | $ | 0.14 | $ | (0.30 | ) | |||
| Diluted earnings (loss) per share | ||||||||
| Continuing operations | $ | 0.15 | $ | (0.28 | ) | |||
| Discontinued operations | $ | (0.01 | ) | $ | (0.02 | ) | ||
| Net earnings (loss) | $ | 0.14 | $ | (0.30 | ) | |||
| Weighted-average common shares outstanding | ||||||||
| Basic | 133,821 | 132,659 | ||||||
| Assuming dilution | 135,452 | 132,659 | ||||||
| Cash dividends per share of common stock | $ | 0.20 | $ | 0.10 | ||||
| Depreciation, depletion, accretion and amortization | $ | 69,406 | $ | 66,723 | ||||
| Effective tax rate from continuing operations | 32.0 | % | 27.7 | % | ||||
Table B
Vulcan Materials Company
and Subsidiary Companies
(in thousands)
| Consolidated Balance Sheets | March 31 | December 31 | March 31 | |||||||||
| (Condensed and unaudited) | 2016 | 2015 | 2015 | |||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 191,886 | $ | 284,060 | $ | 392,657 | ||||||
| Restricted cash | 0 | 1,150 | 0 | |||||||||
| Accounts and notes receivable | ||||||||||||
| Accounts and notes receivable, gross | 449,538 | 423,600 | 375,196 | |||||||||
| Less: Allowance for doubtful accounts | (5,775 | ) | (5,576 | ) | (5,244 | ) | ||||||
| Accounts and notes receivable, net | 443,763 | 418,024 | 369,952 | |||||||||
| Inventories | ||||||||||||
| Finished products | 288,891 | 297,925 | 285,313 | |||||||||
| Raw materials | 22,160 | 21,765 | 21,203 | |||||||||
| Products in process | 1,221 | 1,008 | 1,189 | |||||||||
| Operating supplies and other | 25,486 | 26,375 | 25,987 | |||||||||
| Inventories | 337,758 | 347,073 | 333,692 | |||||||||
| Current deferred income taxes | 0 | 0 | 39,881 | |||||||||
| Prepaid expenses | 34,096 | 34,284 | 58,483 | |||||||||
| Total current assets | 1,007,503 | 1,084,591 | 1,194,665 | |||||||||
| Investments and long-term receivables | 38,895 | 40,558 | 41,613 | |||||||||
| Property, plant & equipment | ||||||||||||
| Property, plant & equipment, cost | 6,984,417 | 6,891,287 | 6,671,537 | |||||||||
| Reserve for depreciation, depletion & amortization | (3,786,590 | ) | (3,734,997 | ) | (3,587,444 | ) | ||||||
| Property, plant & equipment, net | 3,197,827 | 3,156,290 | 3,084,093 | |||||||||
| Goodwill | 3,094,824 | 3,094,824 | 3,094,824 | |||||||||
| Other intangible assets, net | 753,372 | 766,579 | 764,072 | |||||||||
| Other noncurrent assets | 154,604 | 158,790 | 147,258 | |||||||||
| Total assets | $ | 8,247,025 | $ | 8,301,632 | $ | 8,326,525 | ||||||
| Liabilities | ||||||||||||
| Current maturities of long-term debt | 131 | 130 | 365,441 | |||||||||
| Trade payables and accruals | 185,653 | 175,729 | 157,829 | |||||||||
| Other current liabilities | 170,701 | 177,620 | 180,066 | |||||||||
| Total current liabilities | 356,485 | 353,479 | 703,336 | |||||||||
| Long-term debt | 1,981,425 | 1,980,334 | 1,888,365 | |||||||||
| Noncurrent deferred income taxes | 663,364 | 681,096 | 682,849 | |||||||||
| Deferred revenue | 205,892 | 207,660 | 212,987 | |||||||||
| Other noncurrent liabilities | 618,806 | 624,875 | 678,821 | |||||||||
| Total liabilities | $ | 3,825,972 | $ | 3,847,444 | $ | 4,166,358 | ||||||
| Equity | ||||||||||||
| Common stock, $1 par value | 133,348 | 133,172 | 132,660 | |||||||||
| Capital in excess of par value | 2,823,116 | 2,822,578 | 2,765,391 | |||||||||
| Retained earnings | 1,584,344 | 1,618,507 | 1,418,901 | |||||||||
| Accumulated other comprehensive loss | (119,755 | ) | (120,069 | ) | (156,785 | ) | ||||||
| Total equity | $ | 4,421,053 | $ | 4,454,188 | $ | 4,160,167 | ||||||
| Total liabilities and equity | $ | 8,247,025 | $ | 8,301,632 | $ | 8,326,525 | ||||||
Table C
Vulcan Materials Company
and Subsidiary Companies
(in thousands)
| Three Months Ended | ||||||||
| Consolidated Statements of Cash Flows | March 31 | |||||||
| (Condensed and unaudited) | 2016 | 2015 | ||||||
| Operating Activities | ||||||||
| Net earnings (loss) | $ | 18,924 | ($ | 39,678 | ) | |||
| Adjustments to reconcile net earnings to net cash provided by operating activities | ||||||||
| Depreciation, depletion, accretion and amortization | 69,406 | 66,723 | ||||||
| Net gain on sale of property, plant & equipment and businesses | (555 | ) | (6,375 | ) | ||||
| Contributions to pension plans | (2,343 | ) | (1,447 | ) | ||||
| Share-based compensation | 4,321 | 4,700 | ||||||
| Excess tax benefits from share-based compensation | (21,235 | ) | (7,575 | ) | ||||
| Deferred tax provision (benefit) | (17,879 | ) | (11,592 | ) | ||||
| Cost of debt purchase | 0 | 21,734 | ||||||
| Changes in assets and liabilities before initial | ||||||||
| effects of business acquisitions and dispositions | 19,668 | 4,575 | ||||||
| Other, net | (27,450 | ) | (11,911 | ) | ||||
| Net cash provided by operating activities | $ | 42,857 | $ | 19,154 | ||||
| Investing Activities | ||||||||
| Purchases of property, plant & equipment | (108,284 | ) | (49,611 | ) | ||||
| Proceeds from sale of property, plant & equipment | 1,086 | 2,354 | ||||||
| Payment for businesses acquired, net of acquired cash | (1,611 | ) | 0 | |||||
| Decrease in restricted cash | 1,150 | 0 | ||||||
| Other, net | 1,549 | (334 | ) | |||||
| Net cash used for investing activities | $ | (106,110 | ) | ($ | (47,591 | ) | ||
| Financing Activities | ||||||||
| Payments of current maturities and long-term debt | (5 | ) | (145,918 | ) | ||||
| Proceeds from issuance of long-term debt | 0 | 400,000 | ||||||
| Purchases of common stock | (23,433 | ) | 0 | |||||
| Dividends paid | (26,718 | ) | (13,253 | ) | ||||
| Proceeds from exercise of stock options | 0 | 31,416 | ||||||
| Excess tax benefits from share-based compensation | 21,235 | 7,575 | ||||||
| Other, net | 0 | 1 | ||||||
| Net cash provided by (used for) financing activities | $ | (28,921 | ) | $ | 279,821 | |||
| Net increase (decrease) in cash and cash equivalents | (92,174 | ) | 251,384 | |||||
| Cash and cash equivalents at beginning of year | 284,060 | 141,273 | ||||||
| Cash and cash equivalents at end of period | $ | 191,886 | $ | 392,657 | ||||
Table D
Segment Financial Data and Unit Shipments
(in thousands, except per unit data)
| Three Months Ended | ||||||||
| March 31 | ||||||||
| 2016 | 2015 | |||||||
| Total Revenues | ||||||||
| Aggregates 1 | $ | 634,868 | $ | 503,509 | ||||
| Asphalt Mix 2 | 89,099 | 103,071 | ||||||
| Concrete 2 | 70,397 | 59,789 | ||||||
| Calcium 3 | 1,910 | 1,855 | ||||||
| Segment sales | $ | 796,274 | $ | 668,224 | ||||
| Aggregates intersegment sales | (41,546 | ) | (36,931 | ) | ||||
| Total revenues | $ | 754,728 | $ | 631,293 | ||||
| Gross Profit | ||||||||
| Aggregates | $ | 148,383 | $ | 67,665 | ||||
| Asphalt Mix 2 | 12,214 | 8,818 | ||||||
| Concrete 2 | 3,477 | 810 | ||||||
| Calcium 3 | 644 | 572 | ||||||
| Total | $ | 164,718 | $ | 77,865 | ||||
| Depreciation, Depletion, Accretion and Amortization | ||||||||
| Aggregates | $ | 57,511 | $ | 55,515 | ||||
| Asphalt Mix 2 | 4,232 | 3,909 | ||||||
| Concrete 2 | 2,981 | 2,728 | ||||||
| Calcium 3 | 183 | 162 | ||||||
| Other | 4,499 | 4,409 | ||||||
| Total | $ | 69,406 | $ | 66,723 | ||||
| Average Unit Sales Price and Unit Shipments | ||||||||
| Aggregates | ||||||||
| Freight-adjusted revenues 4 | $ | 486,917 | $ | 379,880 | ||||
| Aggregates - tons | 39,206 | 33,504 | ||||||
| Freight-adjusted sales price 5 | $ | 12.42 | $ | 11.34 | ||||
| Other Products | ||||||||
| Asphalt Mix - tons | 1,699 | 1,768 | ||||||
| Asphalt Mix - sales price | $ | 52.04 | $ | 53.13 | ||||
| Ready-mixed concrete - cubic yards | 648 | 573 | ||||||
| Ready-mixed concrete - sales price | $ | 108.58 | $ | 104.25 | ||||
| Calcium - tons | 72 | 67 | ||||||
| Calcium - sales price | $ | 26.47 | $ | 26.61 | ||||
| 1 | Includes crushed stone, sand and gravel, sand, other aggregates, as well as freight, delivery and transportation revenues, and other revenues related to services. |
| 2 | In January 2015, we exchanged our California ready-mixed concrete operations for 13 asphalt mix plants, primarily in Arizona. |
| 3 | Includes cement and calcium products. |
| 4 | Freight-adjusted revenues are Aggregates segment sales excluding freight, delivery and transportation revenues, and other revenues related to services, such as landfill tipping fees that are derived from our aggregates business. |
| 5 | Freight-adjusted sales price is calculated as freight-adjusted revenues divided by aggregates unit shipments. |
Appendix 1
| 1. | Supplemental Cash Flow Information |
Supplemental information referable to the Condensed Consolidated Statements of Cash Flows is summarized below:
(in thousands)
| Three Months Ended | ||||||||
| March 31 | ||||||||
| 2016 | 2015 | |||||||
| Cash Payments | ||||||||
| Interest (exclusive of amount capitalized) | $ | 2,715 | $ | 21,869 | ||||
| Income taxes | 6,486 | 2,062 | ||||||
| Noncash Investing and Financing Activities | ||||||||
| Accrued liabilities for purchases of property, plant & equipment | 25,880 | 13,340 | ||||||
| Accrued liabilities for common stock purchases | 3,164 | 0 | ||||||
| Amounts referable to business acquisitions | ||||||||
| Fair value of noncash assets and liabilities exchanged | 0 | 20,000 | ||||||
| 2. | Reconciliation of Non-GAAP Measures |
Gross profit margin excluding freight and delivery revenues is not a Generally Accepted Accounting Principle (GAAP) measure. We present this metric as it is consistent with the basis by which we review our operating results. Likewise, we believe that this presentation is consistent with the basis by which investors analyze our operating results considering that freight and delivery services represent pass-through activities. Reconciliation of this metric to its nearest GAAP measure is presented below:
Gross Profit Margin in Accordance with GAAP
(dollars in thousands)
| Three Months Ended | ||||||||
| March 31 | ||||||||
| 2016 | 2015 | |||||||
| Gross profit | $ | 164,718 | $ | 77,865 | ||||
| Total revenues | $ | 754,728 | $ | 631,293 | ||||
| Gross profit margin | 21.8 | % | 12.3 | % | ||||
Gross Profit Margin Excluding Freight and Delivery Revenues
(dollars in thousands)
| Three Months Ended | ||||||||
| March 31 | ||||||||
| 2016 | 2015 | |||||||
| Gross profit | $ | 164,718 | $ | 77,865 | ||||
| Total revenues | $ | 754,728 | $ | 631,293 | ||||
| Freight and delivery revenues 1 | 121,211 | 106,372 | ||||||
| Total revenues excluding freight and delivery revenues | $ | 633,517 | $ | 524,921 | ||||
| Gross profit margin excluding freight and delivery revenues | 26.0 | % | 14.8 | % | ||||
| 1 | Includes freight to remote distributions sites. |
Appendix 2
Reconciliation of Non-GAAP Measures (Continued)
Aggregates segment gross profit margin as a percentage of freight-adjusted revenues is not a GAAP measure. We present this metric as it is consistent with the basis by which we review our operating results. We believe that this presentation is meaningful to our investors as it excludes freight, delivery and transportation revenues 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. Incremental gross profit as a percentage of freight-adjusted revenues represents the year-over-year change in gross profit divided by the year-over-year change in freight-adjusted revenues. Reconciliations of these metrics to their nearest GAAP measures are presented below:
Aggregates Segment Gross Profit Margin in Accordance with GAAP
(dollars in thousands)
| Three Months Ended | ||||||||
| March 31 | ||||||||
| 2016 | 2015 | |||||||
| Aggregates segment | ||||||||
| Gross profit | $ | 148,383 | $ | 67,665 | ||||
| Segment sales | $ | 634,868 | $ | 503,509 | ||||
| Gross profit margin | 23.4 | % | 13.4 | % | ||||
| Incremental gross profit margin | 61.4 | % | ||||||
Aggregates Segment Gross Profit as a Percentage of Freight-Adjusted Revenues
(dollars in thousands)
| Three Months Ended | ||||||||
| March 31 | ||||||||
| 2016 | 2015 | |||||||
| Aggregates segment | ||||||||
| Gross profit | $ | 148,383 | $ | 67,665 | ||||
| Segment sales | $ | 634,868 | $ | 503,509 | ||||
| Less | ||||||||
| Freight, delivery and transportation revenues 1 | $ | 143,750 | $ | 117,398 | ||||
| Other revenues | 4,201 | 6,231 | ||||||
| Freight-adjusted revenues | $ | 486,917 | $ | 379,880 | ||||
| Gross profit as a percentage of freight-adjusted revenues | 30.5 | % | 17.8 | % | ||||
| Incremental gross profit as a percentage of freight-adjusted revenues | 75.4 | % | ||||||
| 1 | At the segment level, freight, delivery and transportation revenues include intersegment freight & delivery revenues, which are eliminated at the |
Appendix 3
Reconciliation of Non-GAAP Measures (Continued)
GAAP does not define "Aggregates segment cash gross profit" and "Earnings Before Interest, Taxes, Depreciation and Amortization" (EBITDA). Thus, Aggregates segment cash gross profit and EBITDA should not be considered as alternatives to earnings measures defined by GAAP. We present these metrics for the convenience of investment professionals who use such metrics in their analyses and for shareholders who need to understand the metrics we use to assess performance. The investment community often uses these metrics as indicators to assess the operating performance of a company's businesses. We use Aggregates segment cash gross profit and EBITDA to assess the operating performance of our various business units and the consolidated company. Additionally, we adjust EBITDA for certain items to provide a more consistent comparison of performance from period to period. We do not use these metrics as a measure to allocate resources. Reconciliations of these metrics to their nearest GAAP measures are presented below:
Aggregates Segment Cash Gross Profit
Aggregates segment cash gross profit adds back noncash charges for depreciation, depletion, accretion and amortization (DDA&A) to Aggregates segment gross profit.
(in thousands)
| Three Months Ended | ||||||||
| March 31 | ||||||||
| 2016 | 2015 | |||||||
| Aggregates segment | ||||||||
| Gross profit | $ | 148,383 | $ | 67,665 | ||||
| DDA&A | 57,511 | 55,515 | ||||||
| Aggregates segment cash gross profit | $ | 205,894 | $ | 123,180 | ||||
| Unit shipments - tons | 39,206 | 33,504 | ||||||
| Aggregates segment cash gross profit per ton | $ | 5.25 | $ | 3.68 | ||||
Appendix 4
Reconciliation of Non-GAAP Measures (Continued)
EBITDA and Adjusted EBITDA
EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation and Amortization and excludes discontinued operations. We adjust EBITDA for certain items to provide a more consistent comparison of performance from period to period.
(in thousands)
| Three Months Ended | ||||||||
| March 31 | ||||||||
| 2016 | 2015 | |||||||
| Reconciliation of Net Earnings to EBITDA | ||||||||
| Net earnings (loss) | $ | 18,924 | ($ | 39,678 | ) | |||
| Provision for (benefit from) income taxes | 9,764 | (14,075 | ) | |||||
| Interest expense, net | 33,732 | 62,480 | ||||||
| Loss on discontinued operations, net of tax | 1,807 | 3,011 | ||||||
| EBIT | $ | 64,227 | $ | 11,738 | ||||
| Depreciation, depletion, accretion and amortization | 69,406 | 66,723 | ||||||
| EBITDA | $ | 133,633 | $ | 78,461 | ||||
| Adjusted EBITDA and Adjusted EBIT | ||||||||
| EBITDA | $ | 133,633 | $ | 78,461 | ||||
| Gain on sale of real estate and businesses | 0 | (5,886 | ) | |||||
| Charges associated with acquisitions and divestitures | 12,282 | 2,429 | ||||||
| Asset impairment | 9,646 | 0 | ||||||
| Restructuring charges | 320 | 2,818 | ||||||
| Adjusted EBITDA | $ | 155,881 | $ | 77,822 | ||||
| Depreciation, depletion, accretion and amortization | (69,406 | ) | (66,723 | ) | ||||
| Adjusted EBIT | $ | 86,475 | $ | 11,099 | ||||