BIRMINGHAM, Ala., May 4, 2015 /PRNewswire/ -- Vulcan Materials
Company (NYSE: VMC), the nation's largest producer of construction
aggregates, today announced results for the first quarter ending
March 31, 2015.
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The Company's first quarter results reflect strong earnings
growth and improvement in its industry-leading unit profitability
in aggregates. First quarter Adjusted EBITDA was $77 million, an increase of 97 percent from the
prior year, with gross profit improving in all segments.
Same-store aggregates shipments rose 9 percent despite challenging
weather in certain key markets. Same-store, freight-adjusted
aggregates pricing rose $0.44 per
ton, or 4 percent, in the quarter – with further pricing gains
expected throughout the year. Same-store gross profit per
aggregates ton increased $0.81 over
the prior year quarter, as the Company controlled costs and
captured the benefit of lower diesel prices. For the quarter,
and for the trailing twelve months, incremental aggregates segment
gross profit was 68 percent of incremental freight-adjusted
revenues – again on a same-store basis. The remainder of this
release provides additional detail regarding the Company's first
quarter results and full year outlook.
First Quarter Summary (compared with prior year's first
quarter)
- Total revenues increased $57
million, or 10 percent, to $631
million
- Total gross profit increased $44
million, or 128 percent, to $78
million
- Aggregates freight-adjusted revenues increased $56 million, or 17 percent, to $380 million
- Shipments increased 13 percent, or 3.9 million tons, to 33.5
million tons
- Same-store shipments increased 9 percent, or 2.7 million
tons
- Segment gross profit increased $29
million, or 76 percent, to $68
million
- Incremental gross profit as a percent of freight-adjusted
revenues was 52 percent
- On a same-store basis, this metric was 68 percent
- Average freight-adjusted sales price increased 4 percent
despite negative product mix
- Asphalt, Concrete and Calcium segment gross profit improved
$15 million, collectively
- SAG was flat over the prior year, at approximately $67 million
- Adjusted EBITDA was $77 million,
an increase of $38 million, or 97
percent
- Earnings from continuing operations were a loss of $0.28 per diluted share versus earnings of
$0.41 per share in the first quarter
of 2014. Included in these results are:
- $0.12 per diluted share in the
current year's quarter for net charges related to debt purchase
completed in March, gain on sale of assets, restructuring and
business development costs
- Included in the prior year's first quarter results were
$1.04 per diluted share of income
related to the sale of the Company's Florida-area cement and concrete assets, and
$0.35 per share in debt purchase
charges
- Adjusted for these items, earnings from continuing operations
were a loss of $0.16 per diluted
share in the first quarter of 2015 versus a loss of $0.28 per diluted share in the prior year
Tom Hill, President and Chief
Executive Officer, said, "Our local leadership teams continue to
excel at balancing our core profit drivers: price for service,
sales and production mix, and operating efficiency and
leverage. Although demand for our products remains well below
normal levels, the gradual recovery in construction activity
continues across most of our markets. As a result of
improving market conditions and our continued focus on internal
profit improvements, both pricing and margins continue to
expand. Looking ahead, we remain well positioned to serve our
customers and to achieve strong earnings growth in 2015 and
beyond."
Commentary on Quarterly Segment Results
Aggregates
Segment
Shipment momentum continued across most of the
Company's footprint in the first quarter, driven by strengthening
construction activity across all end-use markets. On a
same-store basis, Arizona,
Florida, Illinois, North
Carolina, Texas and
Virginia each saw shipment growth
greater than 10 percent. Same-store aggregates shipments in
California increased 8
percent. In contrast, Georgia aggregates shipments for the quarter
declined 4 percent due to adverse weather conditions; our full year
outlook for Georgia shipments
remains unchanged. These shipment increases, coming despite weather
limiting available construction days in several markets, reflect
the growing strength of the recovery in aggregates demand in
Vulcan-served markets. For the twelve months ended
March 31, same-store shipments rose
11 percent over the year-earlier period. This quarter was the
seventh consecutive quarter in which the rate of shipment growth,
on a consecutive trailing twelve month basis, has increased.
Overall demand for aggregates remains well below historic
levels despite these recent gains.
Freight-adjusted average sales price for aggregates increased
approximately 4 percent on a same-store basis, or $0.44 per ton, versus the prior year's first
quarter, with most markets realizing accelerating price
improvement. Product mix muted the impact of real price
increases in some key markets, including Virginia, where large shipments of
lower-priced fines product combined with delays in shipments to
concrete and asphalt customers due to weather contributed to an
approximately 5 percent decline in quarterly average selling prices
over the prior year. In many markets, price increases
announced April 1 have been well
accepted. Given these and other indicators, we expect overall
aggregates pricing to continue to rise throughout the
year.
During the first quarter, the Company's same-store, per-ton
margins continued to expand faster than per-ton pricing.
Gross profit per ton increased $0.81,
or 62 percent, from the prior year. Cash gross profit per ton
increased $0.57, or 18 percent, from
the prior year. On a trailing twelve month basis, same-store
unit gross profit has increased 21 percent, while unit cash gross
profit has increased 10 percent to $4.85 per ton – a new twelve-month high despite
cyclically low volumes. These results, which were aided in
the first quarter by the year-on-year decline in diesel costs, also
reflect the Company's continued commitment to plant-level cost
controls and operating disciplines.
For the quarter, aggregates same-store freight-adjusted revenues
increased $44 million, while
same-store gross profit for the segment increased $30 million, a flow-through rate of 68
percent. 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-month basis, this flow-through rate has
consistently exceeded the Company's stated goal of 60 percent since
volumes began to recover in the second half of 2013.
Asphalt, Concrete and Calcium Segments
In the first
quarter, asphalt gross profit was $9
million versus $5 million in
the prior year. This year-over-year improvement was due to
improved margins and higher volumes. Same-store asphalt
volumes increased 6 percent due to growth in Arizona and California.
Concrete gross profit improved $10
million from a loss of $9
million in the prior year. Last year's first quarter
results included the Company's Florida concrete business that was sold in
March 2014 as well as the Company's
California concrete business that
was divested via an asset swap in January 2015. On a
same-store basis, sales volumes were flat versus the prior year due
to unusually cold weather in Virginia and Maryland. Pricing and unit
profitability improved, and same-store gross profit increased
$6 million.
The Company's cement business was also sold in March of last
year. The Company retained its calcium products business that
is now reported separately as a segment. In the first
quarter, the Calcium segment reported gross profit of $0.6 million, an improvement over the prior
year.
Diesel Fuel and Other Cost Items
Compared to last
year, first quarter cost of revenues for the Company benefitted by
approximately $14 million from lower
diesel fuel costs, with approximately $13
million of this benefit realized in the Aggregates
segment. Diesel related cost-savings helped offset certain
other production cost challenges inherent in meeting rising
customer demand in winter weather conditions (e.g., difficulty
maintaining consistent and efficient production schedules).
In total, the operations acquired by the Company since the third
quarter of 2014 recorded a $0.3
million gross profit loss in the first quarter. These
results, which were in line with management expectations, reflect
the higher costs of purchased inventory as well as the impact of
fixed charges during a period of seasonally low volumes. The
Company's full-year outlook for the performance of these operations
remains unchanged.
The Company expects that full-year pension and post
retirement-related costs, a portion of which flow through selling,
administrative and general (SAG), will be approximately
$10 million higher than the prior
year primarily due to changes in the assumptions used to value
future obligations. In addition, certain compensation-related
charges increased by approximately $2.5
million during the first quarter as a result of the rise in
the Company's stock price. Despite these items, first quarter SAG
expenses were approximately flat compared to the prior year.
The Company intends to further leverage SAG expenses to sales
throughout the remainder of the year.
Capital Allocation
During March and April, the Company
completed major components of the refinancing plan announced during
its February 25, 2015 Investor
Day. The Company issued $400
million of 4.50 percent unsecured notes due in 2025, and
repurchased or redeemed approximately $470
million of debt. Additionally, the Company has fully
syndicated a $250 million increase to
its revolving credit facility with an expected close of
mid-May. The expanded capacity will be used to refinance the
December 2015 note of $150 million. With the completed and
planned actions, the Company has refinanced, redeemed or
repurchased approximately $620
million of debt that would otherwise have matured over the
next five years. The results of these actions include: total
debt remaining at approximately $2
billion, enhanced financial flexibility, a better match of
the debt portfolio duration to the Company's long-term asset base,
and a lower weighted average interest rate.
Refinancing expenses, including the acceleration of previously
deferred financing costs associated with the completed and planned
actions, are expected to be approximately $69 million, approximately $22 million of which was incurred in the first
quarter and was reported as part of interest expense. The
remainder will be reported as part of interest expense in the
second quarter. The timing of these actions resulted in a
temporary $272 million increase to
debt as of March 31, 2015.
Subsequent to the April redemptions, total debt returned to
approximately $2 billion.
As noted in the Company's fourth quarter earnings release dated
February 5, 2015, the Company
completed an asset exchange transaction in January in which it
exited the ready-mixed concrete business in California and added thirteen asphalt plant
locations, primarily in Arizona. The Company will continue to
supply aggregates to its former concrete plants in
California. This transaction resulted in a gain of
$6 million.
Outlook
Regarding the Company's outlook for 2015, Mr.
Hill stated, "Our teams throughout the Company are executing
well. We are pleased with our first quarter results, despite
challenging weather in several key markets. Our performance
in the quarter directly reflects the great efforts of our people at
all levels of the organization.
"Underlying demand remains strong, and we are seeing
accelerating momentum in aggregates volumes and pricing throughout
our markets. The growth rate in our trailing twelve month
aggregates shipments has increased for seven consecutive quarters
and, as expected, that momentum is beginning to benefit aggregates
pricing. This momentum underscores our confidence in the full
year expectations we provided in early February of this year.
"Those expectations for 2015 include Adjusted EBITDA of
$775 to $825 million, driven by
strong growth in aggregates gross profit, earnings improvement in
our non-aggregates businesses and continuing leverage of our
selling, administrative and general expenses. Supporting
these expectations for strong earnings growth is an 11 percent
increase in aggregates shipments (8 percent same-store) and a 6
percent increase in pricing. As noted, we realized cost
savings from lower costs for diesel fuel in the first
quarter. If diesel prices remain at current levels, our
Adjusted EBITDA expectations would move towards the high end of our
guidance.
"Momentum remains strong in Vulcan-served markets. We are
optimistic about the volume growth, pricing momentum and strong
margin expansion we see across our markets. We will remain
focused on executing our sales and operating plans to deliver
quality products and services to our customers safely and
efficiently and on achieving significant future earnings growth and
margin expansion."
Conference Call
Vulcan will host a conference call at
9:00 a.m. CDT on May 5, 2015. 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 855-877-0343 approximately 10
minutes before the scheduled start. International
participants can dial 678-509-8772. The conference ID is
34657903. 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.
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; the impact of Vulcan's below investment grade debt
rating on Vulcan's cost of capital; 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 successfully
implement our new divisional structure and changes in our
management team; 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
|
|
|
|
|
(Amounts and shares
in thousands, except per share data)
|
|
|
|
|
Three Months
Ended
|
Consolidated
Statements of Earnings
|
|
March
31
|
(Condensed and
unaudited)
|
|
2015
|
|
2014
|
Total
revenues
|
|
$631,293
|
|
$574,420
|
Cost of
revenues
|
|
553,428
|
|
540,328
|
Gross
profit
|
|
77,865
|
|
34,092
|
Selling,
administrative and general expenses
|
|
66,763
|
|
66,119
|
Gain on sale of
property, plant & equipment
|
|
|
|
|
and businesses,
net
|
|
6,375
|
|
236,364
|
Restructuring
charges
|
|
(2,818)
|
|
-
|
Other operating
expense, net
|
|
(3,900)
|
|
(9,668)
|
Operating
earnings
|
|
10,759
|
|
194,669
|
Other nonoperating
income, net
|
|
979
|
|
2,825
|
Interest expense,
net
|
|
62,480
|
|
120,089
|
Earnings (loss) from
continuing operations
|
|
|
|
|
before income
taxes
|
|
(50,742)
|
|
77,405
|
Provision for
(benefit from) income taxes
|
|
(14,075)
|
|
22,900
|
Earnings (loss) from
continuing operations
|
|
(36,667)
|
|
54,505
|
Loss on discontinued
operations, net of taxes
|
|
(3,011)
|
|
(510)
|
Net earnings
(loss)
|
|
($39,678)
|
|
$53,995
|
Basic earnings (loss)
per share
|
|
|
|
|
Continuing
operations
|
|
($0.28)
|
|
$0.42
|
Discontinued
operations
|
|
($0.02)
|
|
($0.01)
|
Net earnings
(loss)
|
|
($0.30)
|
|
$0.41
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
|
|
|
Continuing
operations
|
|
($0.28)
|
|
$0.41
|
Discontinued
operations
|
|
($0.02)
|
|
$0.00
|
Net earnings
(loss)
|
|
($0.30)
|
|
$0.41
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
Basic
|
|
132,659
|
|
130,810
|
Assuming
dilution
|
|
132,659
|
|
132,314
|
Dividends declared
per share
|
|
$0.10
|
|
$0.05
|
Depreciation,
depletion, accretion and amortization
|
|
$66,723
|
|
$69,378
|
Effective tax rate
from continuing operations
|
|
27.7%
|
|
29.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table B
|
Vulcan Materials
Company
|
|
|
|
|
|
|
and Subsidiary
Companies
|
|
|
|
|
|
|
|
|
(Amounts in
thousands, except per share data)
|
Consolidated
Balance Sheets
|
|
March
31
|
|
December
31
|
|
March
31
|
(Condensed and
unaudited)
|
|
2015
|
|
2014
|
|
2014
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$392,657
|
|
$141,273
|
|
$268,773
|
Restricted
cash
|
|
-
|
|
-
|
|
63,024
|
Accounts and notes
receivable
|
|
|
|
|
|
|
Accounts and notes
receivable, gross
|
|
375,196
|
|
378,947
|
|
353,601
|
Less: Allowance for
doubtful accounts
|
|
(5,244)
|
|
(5,105)
|
|
(5,264)
|
Accounts and notes
receivable, net
|
|
369,952
|
|
373,842
|
|
348,337
|
Inventories
|
|
|
|
|
|
|
Finished
products
|
|
285,313
|
|
275,172
|
|
258,007
|
Raw
materials
|
|
21,203
|
|
19,741
|
|
19,431
|
Products in
process
|
|
1,189
|
|
1,250
|
|
875
|
Operating supplies and
other
|
|
25,987
|
|
25,641
|
|
27,520
|
Inventories
|
|
333,692
|
|
321,804
|
|
305,833
|
Current deferred
income taxes
|
|
39,881
|
|
39,726
|
|
39,591
|
Prepaid
expenses
|
|
58,483
|
|
28,640
|
|
28,184
|
Assets held for
sale
|
|
-
|
|
15,184
|
|
-
|
Total current
assets
|
|
1,194,665
|
|
920,469
|
|
1,053,742
|
Investments and
long-term receivables
|
|
41,613
|
|
41,650
|
|
42,137
|
Property, plant &
equipment
|
|
|
|
|
|
|
Property, plant &
equipment, cost
|
|
6,671,537
|
|
6,608,842
|
|
6,340,034
|
Reserve for
depreciation, depletion & amortization
|
|
(3,587,444)
|
|
(3,537,212)
|
|
(3,446,744)
|
Property, plant &
equipment, net
|
|
3,084,093
|
|
3,071,630
|
|
2,893,290
|
Goodwill
|
|
3,094,824
|
|
3,094,824
|
|
3,081,521
|
Other intangible
assets, net
|
|
764,072
|
|
758,243
|
|
633,870
|
Other noncurrent
assets
|
|
171,348
|
|
175,086
|
|
167,675
|
Total
assets
|
|
$8,350,615
|
|
$8,061,902
|
|
$7,872,235
|
Liabilities
|
|
|
|
|
|
|
Current maturities of
long-term debt
|
|
$365,441
|
|
$150,137
|
|
$171
|
Trade payables and
accruals
|
|
157,829
|
|
145,148
|
|
150,628
|
Other current
liabilities
|
|
180,066
|
|
156,073
|
|
190,069
|
Liabilities of assets
held for sale
|
|
-
|
|
520
|
|
-
|
Total current
liabilities
|
|
703,336
|
|
451,878
|
|
340,868
|
Long-term
debt
|
|
1,912,455
|
|
1,855,447
|
|
2,006,782
|
Noncurrent deferred
income taxes
|
|
682,849
|
|
691,137
|
|
693,234
|
Deferred
revenue
|
|
212,987
|
|
213,968
|
|
218,946
|
Other noncurrent
liabilities
|
|
678,821
|
|
672,773
|
|
581,286
|
Total
liabilities
|
|
4,190,448
|
|
3,885,203
|
|
3,841,116
|
Equity
|
|
|
|
|
|
|
Common stock, $1 par
value
|
|
132,660
|
|
131,907
|
|
130,802
|
Capital in excess of
par value
|
|
2,765,391
|
|
2,734,661
|
|
2,651,949
|
Retained
earnings
|
|
1,418,901
|
|
1,471,845
|
|
1,343,294
|
Accumulated other
comprehensive loss
|
|
(156,785)
|
|
(161,714)
|
|
(94,926)
|
Total
equity
|
|
4,160,167
|
|
4,176,699
|
|
4,031,119
|
Total liabilities and
equity
|
|
$8,350,615
|
|
$8,061,902
|
|
$7,872,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table C
|
Vulcan Materials
Company
|
|
|
|
|
and Subsidiary
Companies
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
Three Months
Ended
|
Consolidated
Statements of Cash Flows
|
|
|
|
March
31
|
(Condensed and
unaudited)
|
|
2015
|
|
2014
|
Operating
Activities
|
|
|
|
|
Net earnings
(loss)
|
|
($39,678)
|
|
$53,995
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
|
Depreciation,
depletion, accretion and amortization
|
|
66,723
|
|
69,378
|
Net gain on sale of
property, plant & equipment and businesses
|
|
(6,375)
|
|
(236,364)
|
Contributions to
pension plans
|
|
(1,447)
|
|
(1,355)
|
Share-based
compensation
|
|
4,700
|
|
4,319
|
Excess tax benefits
from share-based compensation
|
|
(7,575)
|
|
(2,997)
|
Deferred tax provision
(benefit)
|
|
(11,592)
|
|
(7,648)
|
Cost of debt
purchase
|
|
21,734
|
|
72,949
|
Changes in assets and
liabilities before initial
|
|
|
|
|
effects of business
acquisitions and dispositions
|
|
4,575
|
|
40,127
|
Other, net
|
|
(11,911)
|
|
2,624
|
Net cash provided by
(used for) operating activities
|
|
19,154
|
|
(4,972)
|
Investing
Activities
|
|
|
|
|
Purchases of
property, plant & equipment
|
|
(49,611)
|
|
(46,006)
|
Proceeds from sale of
property, plant & equipment
|
|
2,354
|
|
17,785
|
Proceeds from sale of
businesses, net of transaction costs
|
|
-
|
|
720,056
|
Increase in
restricted cash
|
|
-
|
|
(63,024)
|
Other, net
|
|
(334)
|
|
-
|
Net cash provided by
(used for) investing activities
|
|
(47,591)
|
|
628,811
|
Financing
Activities
|
|
|
|
|
Payment of current
maturities, long-term debt and line of credit
|
|
(145,918)
|
|
(579,676)
|
Proceeds from
issuance of long-term debt
|
|
400,000
|
|
-
|
Proceeds from
issuance of common stock
|
|
-
|
|
22,808
|
Dividends
paid
|
|
(13,253)
|
|
(6,531)
|
Proceeds from
exercise of stock options
|
|
31,416
|
|
11,599
|
Excess tax benefits
from share-based compensation
|
|
7,575
|
|
2,997
|
Other, net
|
|
1
|
|
(1)
|
Net cash provided by
(used for) financing activities
|
|
279,821
|
|
(548,804)
|
Proceeds from line of
credit
|
|
-
|
|
-
|
Net increase in cash
and cash equivalents
|
|
251,384
|
|
75,035
|
Cash and cash
equivalents at beginning of year
|
|
141,273
|
|
193,738
|
Cash and cash
equivalents at end of period
|
|
$392,657
|
|
$268,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table D
|
Segment Financial
Data and Unit Shipments
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands, except per unit data)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
March
31
|
|
|
|
|
|
|
2015
|
|
2014
|
Total
Revenues
|
|
|
|
|
|
Aggregates
1
|
|
|
$503,509
|
|
$428,721
|
Asphalt
Mix
|
|
|
103,071
|
|
84,214
|
Concrete
2
|
|
|
59,789
|
|
96,009
|
Calcium
3
|
|
|
1,855
|
|
18,133
|
Segment
sales
|
|
|
$668,224
|
|
$627,077
|
Aggregates
intersegment sales
|
|
|
(36,931)
|
|
(43,432)
|
Calcium intersegment
sales
|
|
|
-
|
|
(9,225)
|
Total
revenues
|
|
|
$631,293
|
|
$574,420
|
Gross
Profit
|
|
|
|
|
|
Aggregates
|
|
|
$67,665
|
|
$38,477
|
Asphalt
Mix
|
|
|
8,818
|
|
4,711
|
Concrete
2
|
|
|
810
|
|
(9,226)
|
Calcium
3
|
|
|
572
|
|
130
|
Total
|
|
|
|
$77,865
|
|
$34,092
|
Depreciation,
Depletion, Accretion and Amortization
|
|
|
|
|
|
Aggregates
|
|
|
$55,515
|
|
$54,622
|
Asphalt
Mix
|
|
|
3,909
|
|
2,400
|
Concrete
2
|
|
|
2,728
|
|
6,037
|
Calcium
3
|
|
|
162
|
|
1,058
|
Other
|
|
|
|
|
4,409
|
|
5,261
|
Total
|
|
|
|
$66,723
|
|
$69,378
|
Average Unit Sales
Price and Unit Shipments
|
|
|
|
|
|
Aggregates
|
|
|
|
|
|
Freight-adjusted
revenues 4
|
|
|
$379,880
|
|
$324,203
|
Aggregates - tons
5
|
|
|
33,504
|
|
29,628
|
Freight-adjusted
sales price 6
|
|
|
$11.34
|
|
$10.94
|
Other
Products
|
|
|
|
|
|
Asphalt Mix -
tons
|
|
|
1,768
|
|
1,441
|
Asphalt Mix - sales
price
|
|
|
$53.13
|
|
$53.07
|
|
|
|
|
|
|
|
|
|
Ready-mixed concrete
- cubic yards
|
|
|
573
|
|
958
|
Ready-mixed concrete
- sales price
|
|
|
$104.25
|
|
$95.41
|
|
|
|
|
|
|
|
|
|
Calcium -
tons
|
|
|
67
|
|
70
|
Calcium - sales
price
|
|
|
$26.61
|
|
$27.05
|
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 Includes
ready-mixed concrete. On March 7, 2014, we sold our concrete
business in the Florida area which in addition to ready-mixed
concrete, included
|
concrete block,
precast concrete, as well as building materials purchased for
resale. See Appendix 5 for adjusted segment data.
|
3 Includes
cement and calcium products. On March 7, 2014, we sold our
cement business. See Appendix 5 for adjusted segment
data.
|
4
Freight-adjusted revenues are Aggregates segment sales excluding
freight, delivery and transportation revenues, and other revenues
related to services,
|
such as land fill
tipping fees.
|
5 Includes
tons marketed and sold on behalf of a third-party pursuant to
volumetric production payment (VPP) agreements and tons shipped
to
|
our down-stream
operations (i.e., asphalt mix and ready-mixed concrete).
|
6
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
March
31
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
Cash
Payments
|
|
|
|
Interest (exclusive
of amount capitalized)
|
$21,869
|
|
$83,801
|
Income
taxes
|
|
|
|
2,062
|
|
3,209
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncash Investing
and Financing Activities
|
|
|
|
Accrued liabilities
for purchases of property, plant & equipment
|
13,340
|
|
16,035
|
Fair value of noncash
assets and liabilities exchanged
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
March
31
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
$77,865
|
|
$34,092
|
Total
revenues
|
|
|
|
|
|
$631,293
|
|
$574,420
|
Gross profit
margin
|
12.3%
|
|
5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
Margin Excluding Freight and Delivery Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
March
31
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
$77,865
|
|
$34,092
|
Total
revenues
|
|
|
|
|
|
$631,293
|
|
$574,420
|
Freight and delivery
revenues
|
|
|
106,372
|
|
88,940
|
Total revenues
excluding freight and delivery revenues
|
$524,921
|
|
$485,480
|
Gross profit margin
excluding freight and delivery revenues
|
14.8%
|
|
7.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix 2
|
Reconciliation of
Non-GAAP Measures (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates segment
gross profit 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 more 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. Reconciliation
of these metrics to their nearest GAAP measures are presented
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates Segment
Gross Profit Margin in Accordance with GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
March
31
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
$67,665
|
|
$38,477
|
Segment
sales
|
|
|
|
|
|
$503,509
|
|
$428,721
|
Gross profit
margin
|
|
|
|
|
13.4%
|
|
9.0%
|
Incremental gross
profit margin
|
|
|
|
|
39.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates Segment
Gross Profit as a Percentage of Freight-Adjusted
Revenues
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
March
31
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
$67,665
|
|
$38,477
|
Segment
sales
|
|
|
|
|
|
$503,509
|
|
$428,721
|
Excluding:
|
|
|
|
|
|
|
|
|
Freight, delivery and
transportation revenues 1
|
|
|
|
117,398
|
|
100,222
|
Other
revenues
|
|
|
|
|
6,231
|
|
4,296
|
Freight-adjusted
revenues
|
|
|
|
|
$379,880
|
|
$324,203
|
Gross profit as a
percentage of
|
|
|
|
|
|
|
|
freight-adjusted
revenues
|
|
|
|
|
17.8%
|
|
11.9%
|
Incremental gross
profit as a percentage of
|
|
|
|
|
|
|
freight-adjusted
revenues
|
|
|
|
|
52.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 At the
segment level, freight, delivery and transportation revenues
include intersegment freight & delivery revenues,
|
which are
eliminated at the consolidated level.
|
|
|
|
|
|
|
|
|
|
|
|
Appendix 3
|
Reconciliation of
Non-GAAP Measures (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP does not define
"free cash flow," "Aggregates segment cash gross profit" and
"Earnings Before Interest, Taxes, Depreciation and Amortization"
(EBITDA). Thus, free cash flow should not be considered as an
alternative to net cash provided by operating activities or any
other liquidity measure defined by GAAP. Likewise, 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 and to monitor our cash and
liquidity positions. The investment community often uses
these metrics as indicators of a company's ability to incur and
service debt and to assess the operating performance of a company's
businesses. We use free cash flow, Aggregates segment cash
gross profit, EBITDA and other such measures to assess liquidity
and 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow
|
|
|
|
|
|
|
|
|
Free cash flow
deducts purchases of property, plant & equipment from net cash
provided by operating activities.
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
March
31
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
Net cash provided by
(used for) operating activities
|
|
|
|
$19,154
|
|
($4,972)
|
Purchases of
property, plant & equipment
|
|
|
|
(49,611)
|
|
(46,006)
|
Free cash
flow
|
|
|
($30,457)
|
|
($50,978)
|
|
|
|
|
|
|
|
|
|
|
|
|
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. Aggregates sement cash gross profit per
ton is computed by dividing cash gross profit by tons
shipped.
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
March
31
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
Aggregates
segment
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
$67,665
|
|
$38,477
|
DDA&A
|
|
|
|
|
|
55,515
|
|
54,622
|
Cash gross
profit
|
|
|
|
$123,180
|
|
$93,099
|
Unit shipments -
tons
|
|
|
|
33,504
|
|
29,628
|
Cash gross profit per
ton
|
|
|
|
$3.68
|
|
$3.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
March
31
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Earnings to EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
|
|
|
|
|
($39,678)
|
|
$53,995
|
Provision for
(benefit from) income taxes
|
|
|
(14,075)
|
|
22,900
|
Interest expense,
net
|
|
|
|
|
62,480
|
|
120,089
|
Loss on discontinued
operations, net of taxes
|
|
3,011
|
|
510
|
EBIT
|
|
|
|
|
|
11,738
|
|
197,494
|
Depreciation,
depletion, accretion and amortization
|
|
66,723
|
|
69,378
|
EBITDA
|
|
|
|
|
|
$78,461
|
|
$266,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
and Adjusted EBIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
|
$78,461
|
|
$266,872
|
Gain on sale of real
estate and businesses
|
|
(5,886)
|
|
(236,020)
|
Charges associated
with acquisitions and divestitures
|
2,429
|
|
9,107
|
Amortization of
deferred revenue
|
|
(981)
|
|
(984)
|
Restructuring
charges
|
|
|
2,818
|
|
-
|
Adjusted
EBITDA
|
|
|
|
$76,841
|
|
$38,975
|
Depreciation,
depletion, accretion and amortization
|
|
(66,723)
|
|
(69,378)
|
Amortization of
deferred revenue
|
|
|
981
|
|
984
|
Adjusted
EBIT
|
|
$11,099
|
|
($29,419)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix 5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Concrete
and Calcium Segment Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparative financial
data adjusted for both the January 2015 exchange of our California
concrete business and the March 2014 sale of our concrete and
cement businesses in the Florida area is presented
below:
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
Q1
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
Concrete
Segment
|
|
|
|
|
|
|
|
|
|
Segment
sales
|
|
|
|
|
|
|
|
|
|
As reported
|
$59,789
|
|
$96,009
|
|
$93,834
|
|
$98,949
|
|
$87,014
|
Adjusted
|
54,675
|
|
48,186
|
|
74,360
|
|
79,697
|
|
70,316
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
|
|
|
|
|
|
|
|
As reported
|
$59,789
|
|
$96,009
|
|
$93,834
|
|
$98,949
|
|
$87,014
|
Adjusted
|
54,675
|
|
48,186
|
|
74,360
|
|
79,697
|
|
70,316
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
|
|
|
|
As reported
|
$810
|
|
($9,226)
|
|
$3,221
|
|
$5,486
|
|
$2,753
|
Adjusted
|
1,602
|
|
(4,370)
|
|
4,921
|
|
7,161
|
|
4,245
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion, accretion and amortization
|
|
|
|
|
|
|
|
|
|
As reported
|
$2,728
|
|
$6,037
|
|
$4,686
|
|
$4,955
|
|
$4,214
|
Adjusted
|
2,628
|
|
3,930
|
|
3,905
|
|
4,239
|
|
3,577
|
|
|
|
|
|
|
|
|
|
|
Shipments - cubic
yards
|
|
|
|
|
|
|
|
|
|
As reported
|
573
|
|
958
|
|
949
|
|
978
|
|
847
|
Adjusted
|
517
|
|
483
|
|
733
|
|
765
|
|
668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calcium
Segment
|
|
|
|
|
|
|
|
|
|
Segment
sales
|
|
|
|
|
|
|
|
|
|
As reported
|
$1,855
|
|
$18,133
|
|
$2,174
|
|
$2,273
|
|
$2,451
|
Adjusted
|
1,855
|
|
2,137
|
|
2,174
|
|
2,273
|
|
2,451
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
|
|
|
|
|
|
|
|
As reported
|
$1,855
|
|
$8,908
|
|
$2,174
|
|
$2,273
|
|
$2,451
|
Adjusted
|
1,855
|
|
2,165
|
|
2,174
|
|
2,273
|
|
2,451
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
|
|
|
|
As reported
|
$572
|
|
$130
|
|
$949
|
|
$989
|
|
$1,131
|
Adjusted
|
572
|
|
424
|
|
949
|
|
989
|
|
1,131
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion, accretion and amortization
|
|
|
|
|
|
|
|
|
|
As reported
|
$162
|
|
$1,058
|
|
$191
|
|
$157
|
|
$148
|
Adjusted
|
162
|
|
97
|
|
191
|
|
157
|
|
148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/vulcan-announces-first-quarter-2015-results-300077219.html
SOURCE Vulcan Materials Company