BIRMINGHAM, Ala., Aug. 4, 2020 /PRNewswire/ -- Vulcan Materials
Company (NYSE: VMC), the nation's largest producer of construction
aggregates, today announced results for the quarter ended
June 30, 2020.
Tom Hill, Chairman and Chief
Executive Officer, said, "Our second quarter results demonstrate
the resiliency of our best in class aggregates-led business and
reflect the proactive response by our employees to the COVID-19
pandemic. Our operational execution was integral to
widespread gains in unit profitability, despite some disruptions to
construction activity during the quarter. I am proud of our
employees' ability to quickly adapt to the necessary additional
safety protocols we have put in place in this environment, while
maintaining their focus on operating safely and positioning Vulcan
for continued success."
Earnings from continuing operations were $211 million, or $1.58 per diluted share, an increase of 7 percent
from the prior year's second quarter. Adjusted EBITDA was
$408 million, an increase of 10
percent. The year-over-year earnings improvement was driven
primarily by effective cost control and price growth in
aggregates. Second quarter segment earnings improved in each
major product line. Despite a 2 percent decline in aggregates
shipments, mix-adjusted pricing improved 3.3 percent, and
freight-adjusted unit cost of sales decreased 1 percent. As a
result, aggregates unit gross profit increased 9 percent to
$6.25 per ton.
Mr. Hill went on to say, "Certain leading indicators of demand
have shown signs of improvement, and our quote activity remains
robust. However, our visibility beyond the near-term remains
restricted due to the evolving effects of the pandemic. The
recent surge in new COVID-19 cases could impact the progress made
so far if new restrictions on economic activity are put in
place. We believe this uncertainty could continue to weigh on
construction activity in the second half of the year, making it
difficult to predict the level and timing of shipments. We
are continuously reviewing our operating plans to ensure an
effective response to demand shifts. Whatever the demand, we
remain confident in our ability to successfully navigate the
changing environment."
Highlights as of June 30, 2020
include:
|
Second
Quarter
|
|
Year-to-Date
|
|
Trailing-Twelve
Months
|
Amounts in millions,
except per unit data
|
2020
|
2019
|
|
2020
|
2019
|
|
2020
|
2019
|
Total
revenues
|
$ 1,322.6
|
$ 1,327.7
|
|
$ 2,371.8
|
$ 2,324.2
|
|
$ 4,976.7
|
$ 4,652.4
|
Gross
profit
|
$
396.5
|
$
370.5
|
|
$
598.2
|
$
562.2
|
|
$ 1,292.0
|
$ 1,180.6
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
Segment
sales
|
$ 1,070.6
|
$ 1,062.1
|
|
$ 1,938.8
|
$ 1,897.0
|
|
$ 4,032.1
|
$ 3,754.8
|
Freight-adjusted
revenues
|
$
814.7
|
$
806.4
|
|
$ 1,462.7
|
$ 1,435.1
|
|
$ 3,041.9
|
$ 2,842.4
|
Gross
profit
|
$
351.2
|
$
329.2
|
|
$
545.3
|
$
514.9
|
|
$ 1,177.0
|
$ 1,075.1
|
Shipments
(tons)
|
56.2
|
57.3
|
|
101.2
|
102.9
|
|
213.8
|
208.8
|
Freight-adjusted
sales price per ton
|
$
14.50
|
$
14.07
|
|
$
14.45
|
$
13.94
|
|
$
14.23
|
$
13.61
|
Gross profit per
ton
|
$
6.25
|
$
5.74
|
|
$
5.39
|
$
5.00
|
|
$
5.51
|
$
5.15
|
Asphalt, Concrete
& Calcium segment gross profit
|
$
45.4
|
$
41.3
|
|
$
52.9
|
$
47.2
|
|
$
115.0
|
$
105.5
|
Selling,
Administrative and General (SAG)
|
$
91.2
|
$
95.7
|
|
$
177.6
|
$
186.0
|
|
$
362.2
|
$
351.9
|
SAG as % of Total
revenues
|
6.9%
|
7.2%
|
|
7.5%
|
8.0%
|
|
7.3%
|
7.6%
|
Earnings from
continuing operations before income taxes
|
$
272.3
|
$
245.5
|
|
$
344.5
|
$
320.1
|
|
$
782.1
|
$
694.6
|
Net
earnings
|
$
209.9
|
$
197.6
|
|
$
270.2
|
$
260.9
|
|
$
627.0
|
$
564.0
|
Adjusted
EBIT
|
$
308.3
|
$
278.5
|
|
$
413.9
|
$
382.0
|
|
$
927.3
|
$
841.9
|
Adjusted
EBITDA
|
$
407.8
|
$
372.0
|
|
$
608.8
|
$
564.7
|
|
$ 1,314.2
|
$ 1,203.8
|
Earnings from
continuing operations per diluted share
|
$
1.58
|
$
1.48
|
|
$
2.03
|
$
1.97
|
|
$
4.73
|
$
4.25
|
Adjusted earnings
from continuing operations per diluted share
|
$
1.60
|
$
1.48
|
|
$
2.06
|
$
1.94
|
|
$
4.82
|
$
4.33
|
Segment Results
Aggregates
Second quarter segment sales increased 1 percent, and gross profit
increased 7 percent to $351 million,
or $6.25 per ton. The
improvement resulted from widespread growth in pricing and
effective cost control.
Second quarter aggregates shipments were 2 percent lower than
the prior year's second quarter. Shipping patterns varied
widely across the Company's footprint as a result of economic
uncertainty and wet weather but were generally supported by healthy
backlogs and our essential business status in our markets.
Key markets in the Southeast and coastal Texas were negatively affected by wet weather
while shipments in California were
reduced by tighter restrictions on shelter-in-place.
Shipments were higher in Georgia,
Illinois, Tennessee and Texas. On a mix-adjusted
basis, all of the Company's key markets reported year-over-year
price growth. For the quarter, freight-adjusted average sales
price increased 3 percent versus the prior year's quarter,
inclusive of 30 basis points of unfavorable mix.
Freight-adjusted unit cost of sales decreased 1 percent versus
the prior year's second quarter. Effective operating
efficiencies helped mitigate the cost impact of lower sales volumes
and a reduction in inventory. Actions taken across the
Company's more than 360 locations reduced cash spending and
controlled inventories in areas most impacted by shelter-in-place
orders. The associated cost of reducing inventory offset the
majority of a $14 million earnings
benefit from lower diesel fuel costs.
Unit profitability improvements were widespread across the
Company's footprint. Cash gross profit per ton increased 9
percent from the prior year's second quarter to $7.69 per ton. For the trailing-twelve
months, cash gross profit was $6.98
per ton.
Asphalt, Concrete and Calcium
Asphalt segment gross profit was $30
million, an improvement of $3
million from the prior year. The year-over-year
improvement was driven by higher material margins (sales price less
cost of raw materials). Although asphalt volumes in the
second quarter declined 5 percent versus the prior year, we
captured the benefit of lower liquid asphalt costs.
Concrete segment gross profit was $14
million compared with $13
million in the prior year's second quarter. Shipments
decreased 4 percent versus the prior year, and average selling
prices increased 1 percent compared to the prior year.
Calcium segment gross profit was $0.7
million, down slightly from the prior year quarter.
Selling, Administrative and General (SAG)
SAG expense declined 5 percent to $91
million in the quarter due mostly to continued execution of
cost reduction initiatives, lower incentive compensation costs and
general cost control in response to COVID-19. This year-over-year
decline resulted in a 31 basis point improvement as a percentage of
total revenues. On a trailing-twelve month basis, SAG expense
as a percentage of total revenues stands at 7.3 percent. The
Company remains focused on further leveraging its overhead cost
structure.
Financial Position, Liquidity and Capital Allocation
Capital expenditures in the second quarter were $68 million ($177
million year-to-date). The Company continues to expect
to spend between $275 and
$325 million on capital this year,
most of which is for core operating and maintenance projects.
Given that the economic outlook is evolving quickly, we will
continue to review our plans and adjust as needed, being thoughtful
about preserving liquidity.
For the quarter, the Company returned $45
million to shareholders through dividends, a 10 percent
increase versus the prior year. The Company did not
repurchase any shares in the quarter.
At quarter-end, total debt to trailing-twelve month Adjusted
EBITDA was 2.5 times (1.9 times on a net debt basis reflecting
$817 million of cash on hand).
The Company's weighted-average debt maturity was 14 years, and the
effective weighted-average interest rate was 4.1 percent.
On a trailing twelve month basis, return on invested capital
increased 100 basis points as solid earnings growth was leveraged
with disciplined capital management.
Outlook
Regarding the Company's outlook, Mr. Hill stated, "Although the
economic environment is showing signs of improvement, the
pandemic's effect on demand and the broader economy remains
unclear. As a result, we are not reinstating earnings
guidance at this time.
"While demand is subject to market fluctuations outside of our
control, we remain focused on those things we can control such as
our cost and our pricing discipline, both of which help to compound
our unit margins. Our year-to-date results demonstrate those
capabilities. On a trailing-twelve month basis our cash gross
profit in aggregates is nearly $7 per
ton. Our operating plans are underpinned by our four
strategic initiatives (Commercial and Operational Excellence,
Logistics Innovation and Strategic Sourcing), a healthy balance
sheet, strong liquidity, and the engagement of our people."
Conference Call
Vulcan will host a conference call at 10:00
a.m. CDT on August 4,
2020. 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 8095639.
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 with
headquarters in Birmingham,
Alabama, is the nation's largest producer 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 recent outbreak of COVID-19; 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; 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; 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.
|
|
|
|
|
|
|
|
|
|
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)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$1,322,575
|
|
$1,327,682
|
|
$2,371,817
|
|
$2,324,193
|
Cost of
revenues
|
|
926,056
|
|
957,180
|
|
1,773,575
|
|
1,762,016
|
Gross
profit
|
|
396,519
|
|
370,502
|
|
598,242
|
|
562,177
|
Selling,
administrative and general expenses
|
|
91,205
|
|
95,689
|
|
177,635
|
|
185,957
|
Gain (loss) on sale
of property, plant & equipment
|
|
|
|
|
|
|
|
|
and
businesses
|
|
(258)
|
|
3,451
|
|
741
|
|
10,748
|
Other operating
expense, net
|
|
(6,160)
|
|
(2,190)
|
|
(10,151)
|
|
(6,461)
|
Operating
earnings
|
|
298,896
|
|
276,074
|
|
411,197
|
|
380,507
|
Other nonoperating
income (expense), net
|
|
7,367
|
|
2,466
|
|
(1,969)
|
|
5,595
|
Interest expense,
net
|
|
33,954
|
|
33,035
|
|
64,727
|
|
65,969
|
Earnings from
continuing operations
|
|
|
|
|
|
|
|
|
before income
taxes
|
|
272,309
|
|
245,505
|
|
344,501
|
|
320,133
|
Income tax
expense
|
|
61,352
|
|
47,598
|
|
73,546
|
|
58,291
|
Earnings from
continuing operations
|
|
210,957
|
|
197,907
|
|
270,955
|
|
261,842
|
Loss on discontinued
operations, net of tax
|
|
(1,041)
|
|
(349)
|
|
(781)
|
|
(985)
|
Net
earnings
|
|
$209,916
|
|
$197,558
|
|
$270,174
|
|
$260,857
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$1.59
|
|
$1.50
|
|
$2.04
|
|
$1.98
|
Discontinued
operations
|
|
($0.01)
|
|
($0.01)
|
|
$0.00
|
|
($0.01)
|
Net
earnings
|
|
$1.58
|
|
$1.49
|
|
$2.04
|
|
$1.97
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$1.58
|
|
$1.48
|
|
$2.03
|
|
$1.97
|
Discontinued
operations
|
|
$0.00
|
|
$0.00
|
|
$0.00
|
|
($0.01)
|
Net
earnings
|
|
$1.58
|
|
$1.48
|
|
$2.03
|
|
$1.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
132,552
|
|
132,269
|
|
132,560
|
|
132,157
|
Assuming
dilution
|
|
133,115
|
|
133,354
|
|
133,154
|
|
133,199
|
Depreciation,
depletion, accretion and amortization
|
|
$99,470
|
|
$93,497
|
|
$194,951
|
|
$182,677
|
Effective tax rate
from continuing operations
|
|
22.5%
|
|
19.4%
|
|
21.3%
|
|
18.2%
|
|
|
|
|
|
|
|
|
Table B
|
Vulcan Materials
Company
|
|
|
|
|
|
|
and Subsidiary
Companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
Consolidated
Balance Sheets
|
|
June
30
|
|
December
31
|
|
June
30
|
(Condensed and
unaudited)
|
|
2020
|
|
2019
|
|
2019
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$816,765
|
|
$271,589
|
|
$26,031
|
Restricted
cash
|
|
434
|
|
2,917
|
|
491
|
Accounts and notes
receivable
|
|
|
|
|
|
|
Accounts and notes
receivable, gross
|
|
699,320
|
|
573,241
|
|
700,175
|
Allowance for
doubtful accounts
|
|
(3,460)
|
|
(3,125)
|
|
(2,844)
|
Accounts and notes
receivable, net
|
|
695,860
|
|
570,116
|
|
697,331
|
Inventories
|
|
|
|
|
|
|
Finished
products
|
|
383,483
|
|
391,666
|
|
377,578
|
Raw
materials
|
|
33,178
|
|
31,318
|
|
31,137
|
Products in
process
|
|
5,116
|
|
5,604
|
|
6,332
|
Operating supplies
and other
|
|
29,703
|
|
29,720
|
|
26,376
|
Inventories
|
|
451,480
|
|
458,308
|
|
441,423
|
Other current
assets
|
|
65,571
|
|
76,396
|
|
89,739
|
Total current
assets
|
|
2,030,110
|
|
1,379,326
|
|
1,255,015
|
Investments and
long-term receivables
|
|
43,849
|
|
60,709
|
|
51,667
|
Property, plant &
equipment
|
|
|
|
|
|
|
Property, plant &
equipment, cost
|
|
8,921,990
|
|
8,749,217
|
|
8,613,500
|
Allowances for
depreciation, depletion & amortization
|
|
(4,538,980)
|
|
(4,433,179)
|
|
(4,322,818)
|
Property, plant &
equipment, net
|
|
4,383,010
|
|
4,316,038
|
|
4,290,682
|
Operating lease
right-of-use assets, net
|
|
426,618
|
|
408,189
|
|
418,896
|
Goodwill
|
|
3,172,112
|
|
3,167,061
|
|
3,167,061
|
Other intangible
assets, net
|
|
1,114,592
|
|
1,091,475
|
|
1,076,986
|
Other noncurrent
assets
|
|
228,433
|
|
225,995
|
|
220,457
|
Total
assets
|
|
$11,398,724
|
|
$10,648,793
|
|
$10,480,764
|
Liabilities
|
|
|
|
|
|
|
Current maturities of
long-term debt
|
|
500,026
|
|
25
|
|
24
|
Short-term
debt
|
|
0
|
|
0
|
|
137,000
|
Trade payables and
accruals
|
|
278,102
|
|
265,159
|
|
284,875
|
Other current
liabilities
|
|
260,621
|
|
270,379
|
|
241,689
|
Total current
liabilities
|
|
1,038,749
|
|
535,563
|
|
663,588
|
Long-term
debt
|
|
2,785,646
|
|
2,784,315
|
|
2,781,826
|
Deferred income
taxes, net
|
|
671,097
|
|
633,039
|
|
601,189
|
Deferred
revenue
|
|
177,534
|
|
179,880
|
|
182,666
|
Operating lease
liabilities
|
|
405,578
|
|
388,042
|
|
396,952
|
Other noncurrent
liabilities
|
|
555,969
|
|
506,097
|
|
483,096
|
Total
liabilities
|
|
$5,634,573
|
|
$5,026,936
|
|
$5,109,317
|
Equity
|
|
|
|
|
|
|
Common stock, $1 par
value
|
|
132,446
|
|
132,371
|
|
132,231
|
Capital in excess of
par value
|
|
2,789,801
|
|
2,791,353
|
|
2,787,002
|
Retained
earnings
|
|
3,049,943
|
|
2,895,871
|
|
2,623,747
|
Accumulated other
comprehensive loss
|
|
(208,039)
|
|
(197,738)
|
|
(171,533)
|
Total
equity
|
|
$5,764,151
|
|
$5,621,857
|
|
$5,371,447
|
Total liabilities and
equity
|
|
$11,398,724
|
|
$10,648,793
|
|
$10,480,764
|
|
|
|
|
|
|
|
Table C
|
Vulcan Materials
Company
|
|
|
|
|
and Subsidiary
Companies
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
Six Months
Ended
|
Consolidated
Statements of Cash Flows
|
|
|
|
June
30
|
(Condensed and
unaudited)
|
|
2020
|
|
2019
|
Operating
Activities
|
|
|
|
|
Net
earnings
|
|
|
|
|
$270,174
|
|
$260,857
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
|
Depreciation,
depletion, accretion and amortization
|
|
194,951
|
|
182,677
|
Noncash operating
lease expense
|
|
17,977
|
|
17,549
|
Net gain on sale of
property, plant & equipment and businesses
|
|
(741)
|
|
(10,748)
|
Contributions to
pension plans
|
|
(4,409)
|
|
(4,638)
|
Share-based
compensation expense
|
|
15,220
|
|
14,370
|
Deferred tax expense
(benefit)
|
|
36,644
|
|
34,816
|
Changes in assets and
liabilities before initial
|
|
|
|
|
effects of business
acquisitions and dispositions
|
|
(101,271)
|
|
(201,256)
|
Other, net
|
|
|
|
|
(2,954)
|
|
8,289
|
Net cash provided by
operating activities
|
|
$425,591
|
|
$301,916
|
Investing
Activities
|
|
|
|
|
Purchases of
property, plant & equipment
|
|
(223,147)
|
|
(225,837)
|
Proceeds from sale of
property, plant & equipment
|
|
3,063
|
|
11,200
|
Proceeds from sale of
businesses
|
|
651
|
|
1,744
|
Payment for
businesses acquired, net of acquired cash
|
|
(5,668)
|
|
1,122
|
Other, net
|
|
|
|
|
5,575
|
|
(4,577)
|
Net cash used for
investing activities
|
|
($219,526)
|
|
($216,348)
|
Financing
Activities
|
|
|
|
|
Proceeds from
short-term debt
|
|
0
|
|
360,100
|
Payment of short-term
debt
|
|
0
|
|
(356,100)
|
Payment of current
maturities and long-term debt
|
|
(250,012)
|
|
(11)
|
Proceeds from
issuance of long-term debt
|
|
750,000
|
|
0
|
Debt issuance and
exchange costs
|
|
(10,762)
|
|
0
|
Settlements of
interest rate derivatives
|
|
(19,863)
|
|
0
|
Purchases of common
stock
|
|
(26,132)
|
|
0
|
Dividends
paid
|
|
|
|
(90,128)
|
|
(81,927)
|
Share-based
compensation, shares withheld for taxes
|
|
(15,830)
|
|
(25,508)
|
Other, net
|
|
|
|
|
(645)
|
|
(4)
|
Net cash provided by
(used for) financing activities
|
|
$336,628
|
|
($103,450)
|
Net increase
(decrease) in cash and cash equivalents and restricted
cash
|
|
542,693
|
|
(17,882)
|
Cash and cash
equivalents and restricted cash at beginning of year
|
|
274,506
|
|
44,404
|
Cash and cash
equivalents and restricted cash at end of period
|
|
$817,199
|
|
$26,522
|
|
|
|
|
|
|
|
|
|
|
|
Table D
|
Segment Financial
Data and Unit Shipments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
per unit data)
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
June
30
|
|
|
|
June
30
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Total
Revenues
|
|
|
|
|
|
|
|
|
Aggregates
1
|
|
$1,070,596
|
|
$1,062,061
|
|
$1,938,822
|
|
$1,897,026
|
Asphalt
2
|
|
222,950
|
|
247,163
|
|
362,739
|
|
379,253
|
Concrete
|
|
100,683
|
|
103,768
|
|
195,448
|
|
187,405
|
Calcium
|
|
|
1,889
|
|
2,003
|
|
3,915
|
|
3,954
|
Segment
sales
|
|
$1,396,118
|
|
$1,414,995
|
|
$2,500,924
|
|
$2,467,638
|
Aggregates
intersegment sales
|
|
(73,543)
|
|
(87,313)
|
|
(129,107)
|
|
(143,445)
|
Total
revenues
|
|
$1,322,575
|
|
$1,327,682
|
|
$2,371,817
|
|
$2,324,193
|
Gross
Profit
|
|
|
|
|
|
|
|
|
Aggregates
|
|
$351,162
|
|
$329,215
|
|
$545,293
|
|
$514,931
|
Asphalt
|
|
|
30,464
|
|
27,583
|
|
28,029
|
|
24,311
|
Concrete
|
|
14,227
|
|
12,887
|
|
23,440
|
|
21,450
|
Calcium
|
|
|
|
|
666
|
|
817
|
|
1,480
|
|
1,485
|
Total
|
|
|
|
$396,519
|
|
$370,502
|
|
$598,242
|
|
$562,177
|
Depreciation,
Depletion, Accretion and Amortization
|
|
|
|
|
Aggregates
|
|
$80,747
|
|
$75,760
|
|
$157,883
|
|
$148,281
|
Asphalt
|
|
|
8,668
|
|
8,884
|
|
17,402
|
|
17,434
|
Concrete
|
|
4,001
|
|
3,327
|
|
8,083
|
|
6,291
|
Calcium
|
|
|
48
|
|
58
|
|
97
|
|
118
|
Other
|
|
|
|
6,006
|
|
5,468
|
|
11,486
|
|
10,553
|
Total
|
|
|
|
$99,470
|
|
$93,497
|
|
$194,951
|
|
$182,677
|
Average Unit Sales
Price and Unit Shipments
|
|
|
|
|
Aggregates
|
|
|
|
|
|
|
|
|
Freight-adjusted
revenues 3
|
|
$814,713
|
|
$806,444
|
|
$1,462,746
|
|
$1,435,051
|
Aggregates -
tons
|
|
56,195
|
|
57,310
|
|
101,243
|
|
102,947
|
Freight-adjusted
sales price 4
|
|
$14.50
|
|
$14.07
|
|
$14.45
|
|
$13.94
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Products
|
|
|
|
|
|
|
|
|
Asphalt Mix -
tons
|
|
3,403
|
|
3,595
|
|
5,460
|
|
5,617
|
Asphalt Mix - sales
price
|
|
$57.46
|
|
$58.31
|
|
$57.86
|
|
$57.45
|
|
|
|
|
|
|
|
|
|
|
|
|
Ready-mixed concrete
- cubic yards
|
|
786
|
|
815
|
|
1,520
|
|
1,484
|
Ready-mixed concrete
- sales price
|
|
$127.35
|
|
$126.12
|
|
$127.62
|
|
$125.14
|
|
|
|
|
|
|
|
|
|
|
|
|
Calcium -
tons
|
|
71
|
|
73
|
|
144
|
|
141
|
Calcium - sales
price
|
|
$26.55
|
|
$27.50
|
|
$27.06
|
|
$27.89
|
|
|
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. 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
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
Segment
sales
|
|
$1,070,596
|
|
$1,062,061
|
|
$1,938,822
|
|
$1,897,026
|
Less:
|
|
Freight &
delivery revenues 1
|
|
240,880
|
|
241,354
|
|
446,588
|
|
436,508
|
|
|
|
Other
revenues
|
|
15,003
|
|
14,263
|
|
29,488
|
|
25,467
|
Freight-adjusted
revenues
|
|
$814,713
|
|
$806,444
|
|
$1,462,746
|
|
$1,435,051
|
Unit shipment -
tons
|
|
56,195
|
|
57,310
|
|
101,243
|
|
102,947
|
Freight-adjusted
sales price
|
|
$14.50
|
|
$14.07
|
|
$14.45
|
|
$13.94
|
|
|
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).
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
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
$351,162
|
|
$329,215
|
|
$545,293
|
|
$514,931
|
Segment
sales
|
|
$1,070,596
|
|
$1,062,061
|
|
$1,938,822
|
|
$1,897,026
|
Gross profit
margin
|
|
32.8%
|
|
31.0%
|
|
28.1%
|
|
27.1%
|
Incremental gross
profit margin
|
|
257.1%
|
|
|
|
72.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates Segment
Incremental Gross Profit Flow-through Rate
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
June
30
|
|
|
|
June
30
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
$351,162
|
|
$329,215
|
|
$545,293
|
|
$514,931
|
Segment
sales
|
|
$1,070,596
|
|
$1,062,061
|
|
$1,938,822
|
|
$1,897,026
|
Less:
|
|
Freight &
delivery revenues 1
|
|
240,880
|
|
241,354
|
|
446,588
|
|
436,508
|
|
Segment sales
excluding freight & delivery
|
|
$829,716
|
|
$820,707
|
|
$1,492,234
|
|
$1,460,518
|
Gross profit margin
excluding freight & delivery
|
|
42.3%
|
|
40.1%
|
|
36.5%
|
|
35.3%
|
Incremental gross
profit flow-through rate
|
|
243.6%
|
|
|
|
95.7%
|
|
|
|
|
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
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
$351,162
|
|
$329,215
|
|
$545,293
|
|
$514,931
|
Depreciation,
depletion, accretion and amortization
|
|
80,747
|
|
75,760
|
|
157,883
|
|
148,281
|
|
Aggregates segment
cash gross profit
|
|
$431,909
|
|
$404,975
|
|
$703,176
|
|
$663,212
|
Unit shipments -
tons
|
|
56,195
|
|
57,310
|
|
101,243
|
|
102,947
|
Aggregates segment
cash gross profit per ton
|
|
$7.69
|
|
$7.07
|
|
$6.95
|
|
$6.44
|
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
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
earnings
|
|
$209,916
|
|
$197,558
|
|
$270,174
|
|
$260,857
|
|
$626,979
|
|
$564,031
|
Income tax
expense
|
|
61,352
|
|
47,598
|
|
73,546
|
|
58,291
|
|
150,453
|
|
128,597
|
Interest expense,
net
|
|
33,954
|
|
33,035
|
|
64,727
|
|
65,969
|
|
127,758
|
|
132,374
|
Loss on discontinued
operations, net of tax
|
|
1,041
|
|
349
|
|
781
|
|
985
|
|
4,637
|
|
1,955
|
EBIT
|
|
$306,263
|
|
$278,540
|
|
$409,228
|
|
$386,102
|
|
$909,827
|
|
$826,957
|
Depreciation,
depletion, accretion and amortization
|
|
99,470
|
|
93,497
|
|
194,951
|
|
182,677
|
|
386,870
|
|
361,851
|
EBITDA
|
|
$405,733
|
|
$372,037
|
|
$604,179
|
|
$568,779
|
|
$1,296,697
|
|
$1,188,808
|
Gain on sale of businesses
|
|
0
|
|
0
|
|
0
|
|
(4,064)
|
|
(9,289)
|
|
(4,064)
|
Property donation
|
|
0
|
|
0
|
|
0
|
|
0
|
|
10,847
|
|
0
|
Business interruption claims recovery
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
(559)
|
Charges associated with divested operations
|
|
774
|
|
0
|
|
774
|
|
0
|
|
3,807
|
|
18,545
|
Business development 1
|
|
(3,519)
|
|
0
|
|
(2,459)
|
|
0
|
|
(711)
|
|
220
|
COVID-19 direct incremental costs
|
|
4,361
|
|
0
|
|
5,009
|
|
0
|
|
5,009
|
|
0
|
Restructuring charges 2
|
|
465
|
|
0
|
|
1,333
|
|
0
|
|
7,790
|
|
829
|
Adjusted
EBITDA
|
|
$407,814
|
|
$372,037
|
|
$608,836
|
|
$564,715
|
|
$1,314,150
|
|
$1,203,779
|
Depreciation, depletion, accretion and amortization
|
|
(99,470)
|
|
(93,497)
|
|
(194,951)
|
|
(182,677)
|
|
(386,870)
|
|
(361,851)
|
Adjusted
EBIT
|
|
$308,344
|
|
$278,540
|
|
$413,885
|
|
$382,038
|
|
$927,280
|
|
$841,928
|
|
|
1
|
Represents
non-routine charges or gains associated with acquisitions including
the cost impact of purchase accounting inventory
valuations.
|
2
|
Restructuring charges
are included within other operating expenses. The charges relate to
managerial restructuring.
|
Similar to our
presentation of Adjusted EBITDA, we present Adjusted Diluted EPS
from continuing operations to provide a more consistent
comparison
of earnings performance from period to period.
|
|
Adjusted Diluted
EPS from Continuing Operations (Adjusted Diluted
EPS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
TTM
|
|
|
|
|
|
|
|
June
30
|
|
|
|
June
30
|
|
|
|
June
30
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Diluted EPS from
continuing operations
|
|
$1.58
|
|
$1.48
|
|
$2.03
|
|
$1.97
|
|
$4.73
|
|
$4.25
|
Items included in Adjusted EBITDA above
|
|
0.02
|
|
0.00
|
|
0.03
|
|
(0.03)
|
|
0.09
|
|
0.08
|
Adjusted Diluted
EPS
|
|
$1.60
|
|
$1.48
|
|
$2.06
|
|
$1.94
|
|
$4.82
|
|
$4.33
|
Appendix 3
|
|
Reconciliation of
Non-GAAP Measures (Continued)
|
|
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.
|
|
Return on Invested
Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
TTM
|
|
|
|
|
|
|
|
|
|
|
|
June
30
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
Adjusted
EBITDA
|
|
|
|
|
|
$1,314,150
|
|
$1,203,779
|
Average invested
capital 1
|
|
|
|
|
|
|
|
|
Property, plant & equipment
|
|
|
|
|
|
4,335,633
|
|
4,219,693
|
Goodwill
|
|
|
|
|
|
3,168,072
|
|
3,165,574
|
Other intangible assets
|
|
|
|
|
|
1,087,580
|
|
1,102,803
|
Fixed and intangible assets
|
|
|
|
|
|
$8,591,285
|
|
$8,488,070
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
1,453,094
|
|
1,155,425
|
Less: Cash and cash equivalents
|
|
|
|
|
|
265,920
|
|
41,243
|
Less: Deferred tax
|
|
|
|
|
|
19,289
|
|
5,973
|
Adjusted current assets
|
|
|
|
|
|
1,167,885
|
|
1,108,209
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
649,772
|
|
685,591
|
Less: Current maturities of long-term debt
|
|
|
|
|
|
100,025
|
|
23
|
Less: Short-term debt
|
|
|
|
|
|
27,400
|
|
201,700
|
Adjusted current liabilities
|
|
|
|
|
|
522,347
|
|
483,868
|
Adjusted net working capital
|
|
|
|
|
|
$645,538
|
|
$624,341
|
|
|
|
|
|
|
|
|
|
|
|
|
Average invested
capital
|
|
|
|
|
|
$9,236,823
|
|
$9,112,411
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Invested
Capital
|
|
|
|
|
|
14.2%
|
|
13.2%
|
|
|
1
|
Average Invested
Capital is based on a trailing 5-quarters.
|
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SOURCE Vulcan Materials Company