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Martin Marietta Reports Third-Quarter 2022 Results
来源: Nasdaq GlobeNewswire / 02 11月 2022 05:55:01 America/Chicago
Achieved Record Quarterly Revenues and Gross Profit
Driven by Double-Digit Pricing Growth Across All Building Materials’ Product LinesPricing Momentum Expected to Drive Margin Expansion in Fourth Quarter
Updates Full-Year 2022 Guidance
RALEIGH, N.C., Nov. 02, 2022 (GLOBE NEWSWIRE) -- Martin Marietta Materials, Inc. (NYSE: MLM) (“Martin Marietta” or the “Company”), a leading national supplier of aggregates and heavy building materials, today reported results for the third quarter ended September 30, 2022.
Third-Quarter Highlights
(Highlights are for continuing operations)Quarter Ended September 30,
(In millions, except per share)2022 2021 % Change Products and services revenues 1 $ 1,680.5 $ 1,462.7 14.9%
Building Materials$ 1,611.5 $ 1,390.8 15.9%
Magnesia Specialties$ 69.0 $ 71.9 (4.0)% Total revenues 2 $ 1,811.7 $ 1,557.3 16.3% Gross profit $ 487.8 $ 441.9 10.4% Adjusted gross profit 3 $ 487.8 $ 450.0 8.4% Earnings from operations $ 405.9 $ 356.9 13.7% Adjusted earnings from operations 4 $ 407.5 $ 372.4 9.4% Net earnings from continuing operations
attributable to Martin Marietta$ 291.2 $ 254.6 14.4% Adjusted EBITDA 5 $ 533.1 $ 490.0 8.8% Earnings per diluted share from continuing
operations$ 4.67 $ 4.07 14.7% Adjusted earnings per diluted share from continuing
operations 6$ 4.69 $ 4.25 10.4% 1 Products and services revenues include the sales of aggregates, cement, ready mixed concrete, asphalt and Magnesia Specialties products, and paving services to customers, and exclude related freight revenues. 2 Total revenues include the sales of products and services to customers (net of any discounts or allowances) and freight revenues. 3 Adjusted gross profit excludes an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to reported gross profit under generally accepted accounting principles (GAAP). 4 Adjusted earnings from operations excludes an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting, acquisition and integration expenses and the nonrecurring gain on divestiture of the Company’s Colorado and Texas ready-mixed concrete operations on April 1, 2022, and is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to reported earnings from operations under GAAP. 5 Earnings from continuing operations before interest, income taxes, depreciation, depletion and amortization, or Adjusted EBITDA, excludes the earnings/loss from nonconsolidated equity affiliates, acquisition and integration expenses, an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting and the nonrecurring gain on divestiture of the Company’s Colorado and Texas ready-mixed concrete operations on April 1, 2022, and is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings from continuing operations attributable to Martin Marietta. 6 Adjusted earnings per diluted share from continuing operations excludes an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting, acquisition and integration expenses, and the nonrecurring gain on divestiture of the Company's Colorado and Texas ready-mixed concrete operations on April 1, 2022, and is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to reported earnings per diluted share under GAAP.
Ward Nye, Chairman and CEO of Martin Marietta, stated, “Our third-quarter results highlight our commitment to execution of our value-over-volume strategy as double-digit pricing growth drove record profitability despite relatively flat organic aggregates shipments. Importantly, we expect a return to expanding margins in the fourth quarter as the compounding effect of multiple pricing actions throughout the year offsets continued inflationary pressure and a slowdown in single-family residential construction.“Martin Marietta’s strategic coast-to-coast footprint is well-positioned for long-term growth, driven by favorable population migration trends, housing shortages in our markets and a long-term federal highway bill complemented by healthy Department of Transportation (DOT) budgets in the Company's key states. Near-term, we expect affordability driven headwinds in the single-family residential end market will be offset by a significant acceleration in public infrastructure investment and continued strength in large-scale energy, domestic manufacturing and multi-family residential projects.
Mr. Nye concluded, “While the Company’s 2022 year-to-date safety performance continues to be at world-class levels as measured by both Total Injury and Lost Time Incidence Rates, our work in this vital dimension is never done. Our commitment to continuous improvement in employee health and well-being, world-class safety, commercial and operational excellence, sustainable business practices and execution of our strategic plan reinforces our confidence in Martin Marietta’s ability to provide compelling results for the foreseeable future. Moreover, Martin Marietta’s track record of success throughout various business cycles proves the resiliency and durability of our aggregates-led business model, chosen geographies, and our ability to adapt to the challenges inherent in a dynamic macroeconomic environment. Importantly, we expect that the carryover effects of our 2022 pricing momentum, coupled with our broad-based January 1, 2023 announced price increases, will drive accelerated aggregates unit margin expansion next year.”
Third-Quarter Financial and Operating Results
(All financial and operating results are for continuing operations and comparisons are versus the prior-year third quarter, unless otherwise noted)
Building Materials Business
Building Materials generated record products and services revenues of $1.61 billion for the third quarter, a 15.9 percent increase, driven primarily by acquisitions and double-digit pricing growth across all product lines. Products and services gross profit increased 13.1 percent, or 10.9 percent on an adjusted basis, to a record $467.2 million. Elevated energy, internal freight, contract services as well as repairs and maintenance costs contributed to a products and services gross margin decline of 70 basis points, or 130 basis points on an adjusted basis, to 29.0 percent.
Aggregates
Third-quarter organic aggregates shipments were flat, largely due to logistical constraints, cement shortages and inclement weather in certain key markets. Importantly, organic pricing increased 11.9 percent, or 11.3 percent on a mix-adjusted basis, due to the cumulative effect of price increases throughout the year. Including acquired operations, total aggregates shipments and pricing increased 5.6 percent and 11.6 percent, respectively.
By segment:
- East Group total shipments were flat, as solid underlying demand was negatively impacted by supply chain challenges as well as weather-related disruptions. Pricing increased 11.5 percent, or 10.3 percent on a mix-adjusted basis.
- West Group total shipments improved 15.6 percent, driven primarily by contributions from acquired operations as well as strong Texas demand, partially offset by a historically wet August in North Texas. Organic pricing increased 12.4 percent, or 13.2 percent on a mix-adjusted basis.
Third-quarter aggregates product gross profit improved 12.8 percent, or 10.5 percent on an adjusted basis, to a record $330.3 million, while product gross margin declined 170 basis points, or 240 basis points on an adjusted basis, to 32.5 percent, primarily due to increased energy, internal freight and repairs and maintenance costs.
Cement
Cement shipments increased 2.3 percent to 1.1 million tons, a third-quarter record. Additionally, pricing increased 21.4 percent, or 20.6 percent on a mix-adjusted basis, driven by continued strong demand and the impact of multiple price increases during the year. Cement product gross profit grew to a record $67.7 million, an increase of 35.7 percent, while product gross margins expanded 380 basis points to 41.5 percent, as pricing gains more than offset higher energy costs in the period.
Downstream businesses
On an organic basis, ready mixed concrete shipments were down 16.8 percent primarily due to record rainfall in portions of Texas during August as well as the completion of certain large projects. However, pricing increased 20.3 percent due to the positive impact of multiple price increases implemented during the year.
Ready mixed concrete product revenues and gross profit from continuing operations declined 29.1 percent and 40.3 percent, respectively, driven largely by the April 1 divestiture of our Colorado and Central Texas ready mixed concrete businesses, which was partially offset by contributions from acquired ready mixed concrete operations in Arizona. Increased raw materials costs weighed on gross margin.
On an organic basis, total asphalt shipments and pricing increased 4.3 percent and 22.0 percent, respectively. Notably, prior year volumes were constrained by the shortage in liquid asphalt, or bitumen.
Including contributions from the acquired West Coast operations, total asphalt shipments and pricing increased 31.3 percent and 26.1 percent, respectively. Total asphalt and paving product gross profit increased to a record $50.5 million. However, continued acceleration of liquid asphalt costs contributed to the gross margin compression of 360 basis points, or 470 basis points on an adjusted basis, in the third quarter.
Magnesia Specialties Business
Magnesia Specialties product revenues decreased 4.0 percent to $69.0 million, driven largely by lower demand from domestic steel industry customers for dolomitic lime products. Product gross profit declined 22.9 percent to $21.6 million as higher energy costs, particularly natural gas, depressed gross margin in the quarter.
Consolidated
Other operating income, net, of $14.8 million includes $14.5 million in nonrecurring gains from the sales of surplus land and other assets.
On August 9, 2022, the Company signed a definitive agreement to sell the Tehachapi, California cement plant and related distribution terminals to CalPortland Company for $350 million in cash. The transaction is subject to customary regulatory approvals and closing conditions.
Cash Generation, Capital Allocation and Liquidity
Cash provided by operating activities for the nine months ended September 30, 2022 was $560.7 million compared with $780.3 million for the prior-year period.
Cash paid for property, plant and equipment additions for the nine months ended September 30, 2022 was $309.1 million. For the full year, capital expenditures are expected to range from $450 million to $500 million.
During the nine months ended September 30, 2022, the Company returned $268.1 million to shareholders through dividend payments and share repurchases. As of September 30, 2022, 13.1 million shares remained under the current repurchase authorization.
The Company had $135.7 million of cash and cash equivalents on hand and nearly $1.20 billion of unused borrowing capacity on its existing credit facilities as of September 30, 2022.
On September 29, 2022, the Company utilized existing cash resources to satisfy and discharge its $700.0 million 0.650% Senior Notes due 2023. As a result of the satisfaction and discharge of the 2023 Notes, the obligations of the Company under the indenture in respect of the 2023 Notes have been terminated.
Updated 2022 Guidance
The Company’s updated 2022 guidance reflects actual results through nine months as well as the impact of lower expected aggregates volumes and continued inflationary pressure. This guidance excludes businesses classified as discontinued operations as well as the gain on divestiture from the second quarter of 2022.
2022 GUIDANCE (Dollars in Millions) Low * High * Consolidated Products and services revenues1 $ 5,740 $ 5,845 Gross profit $ 1,445 $ 1,510 Selling, general and administrative expenses (SG&A) $ 390 $ 400 Interest expense $ 165 $ 170 Estimated tax rate (excluding discrete events) 22 % 23 % Net earnings from continuing operations attributable to Martin Marietta $ 740 $ 800 Adjusted EBITDA2 $ 1,610 $ 1,675 Capital expenditures $ 450 $ 500 Building Materials Business Aggregates Organic volume % growth3 (1.0 )% 0.0 % Total volume % growth4 4.0 % 5.0 % Organic average selling price per ton (ASP) % growth5 10.0 % 12.0 % Total ASP growth6 10.0 % 12.0 % Products and services revenues $ 3,525 $ 3,575 Gross profit $ 995 $ 1,035 Cement Products and services revenues $ 610 $ 625 Gross profit $ 210 $ 220 Ready Mixed Concrete and Asphalt and Paving Products and services revenues $ 1,710 $ 1,745 Gross profit $ 150 $ 160 Magnesia Specialties Business Products and services revenues $ 285 $ 290 Gross profit $ 90 $ 95 * Guidance range represents the low end and high end of the respective line items provided above. 1 Consolidated products and services revenues exclude $390 million related to estimated interproduct sales and exclude freight revenues. 2 Adjusted EBITDA is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings from continuing operations attributable to Martin Marietta. 3 Organic volume % growth range is for organic aggregates shipments, inclusive of internal tons, and is in comparison with 2021 organic shipments of 192.9 million tons. 4 Total volume % growth range is for total aggregates shipments, inclusive of internal tons and acquired operations, and is in comparison with total 2021 shipments of 201.2 million tons. 5 Organic ASP % growth range is for organic aggregates average selling price and is in comparison with 2021 organic ASP of $15.21 per ton. 6 Total ASP growth is for total aggregates average selling price, inclusive of acquired operations, and is in comparison with 2021 total ASP of $15.08 per ton.
Preliminary View of 2023The Company’s preliminary view of 2023 anticipates aggregates shipments to be effectively flat as the Company expects stronger demand from public infrastructure and heavy nonresidential projects of scale to be offset by single-family residential softening. We anticipate aggregates pricing to increase by a low-double-digit percentage in 2023 as the carryover effects from multiple actions taken in 2022 are compounded with additional price increases beginning in January of next year.
Non-GAAP Financial Information
This earnings release contains financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). Reconciliations of non-GAAP financial measures to the closest GAAP measures are included in the Appendix to this earnings release. Management believes these non-GAAP measures are commonly used financial measures for investors to evaluate the Company’s operating performance and, when read in conjunction with the Company’s consolidated financial statements, present a useful tool to evaluate the Company’s ongoing operations, performance from period to period and anticipated performance. In addition, these are some of the factors the Company uses in internal evaluations of the overall performance of its businesses. Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.
Conference Call Information
The Company will discuss its third-quarter 2022 earnings results on a conference call and an online webcast today (November 2, 2022). The live broadcast of the Martin Marietta conference call will begin at 11:00 a.m. Eastern Time and can be accessed here: https://register.vevent.com/register/BI38e873a0336948ef86b287a7fe390693. An online replay will be available approximately two hours following the conclusion of the live broadcast. A link to these events will be available at the Company’s website. Additionally, the Company has posted Q3 2022 Supplemental Information on the Investors section of its website.
About Martin Marietta
Martin Marietta, a member of the S&P 500 Index, is an American-based company and a leading supplier of building materials, including aggregates, cement, ready mixed concrete and asphalt. Through a network of operations spanning 28 states, Canada and The Bahamas, dedicated Martin Marietta teams supply the resources necessary for building the solid foundations on which our communities thrive. Martin Marietta’s Magnesia Specialties business provides a full range of magnesium oxide, magnesium hydroxide and dolomitic lime products. For more information, visit www.martinmarietta.com or www.magnesiaspecialties.com.
Investor Contact:
Jennifer Park
Vice President, Investor Relations
(919) 510-4736
Jennifer.Park@martinmarietta.comMLM-E.
If you are interested in Martin Marietta stock, management recommends that, at a minimum, reading the Company’s current annual report and Forms 10-K, 10-Q and 8-K reports to the Securities and Exchange Commission (SEC) over the past year. The Company’s recent proxy statement for the annual meeting of shareholders also contains important information. These and other materials that have been filed with the SEC are accessible through the Company’s website at www.martinmarietta.com and are also available at the SEC’s website at www.sec.gov. You may also write or call the Company’s Corporate Secretary, who will provide copies of such reports.
Investors are cautioned that all statements in this release that relate to the future involve risks and uncertainties, and are based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results. These statements, which are forward-looking statements under the Private Securities Litigation Reform Act of 1995, provide the investor with the Company’s expectations or forecasts of future events. You can identify these statements by the fact that they do not relate only to historical or current facts. They may use words such as “guidance”, “anticipate”, “may”, “expect”, “should”, “believe”, “will”, and other words of similar meaning in connection with future events or future operating or financial performance. Any or all of the Company’s forward-looking statements here and in other publications may turn out to be wrong.
Third-quarter results and trends described in this release may not necessarily be indicative of the Company’s future performance. The Company’s outlook is subject to various risks and uncertainties and is based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results. Factors that the Company currently believes could cause actual results to differ materially from the forward-looking statements in this release (including the outlook) include, but are not limited to: the ability of the Company to face challenges, including shipment declines resulting from economic events beyond the Company’s control; a widespread decline in aggregates pricing, including a decline in aggregates shipment volume negatively affecting aggregates price; the history of both cement and ready mixed concrete being subject to significant changes in supply, demand and price fluctuations; the termination, capping and/or reduction or suspension of the federal and/or state fuel tax(es) or other revenue related to public construction; the level and timing of federal, state or local transportation or infrastructure or public projects funding, most particularly in Texas, Colorado, California, North Carolina, Georgia, Minnesota, Iowa, Florida, Indiana and Maryland; the United States Congress’ inability to reach agreement among themselves or with the Administration on policy issues that impact the federal budget; the ability of states and/or other entities to finance approved projects either with tax revenues or alternative financing structures; levels of construction spending in the markets the Company serves; a reduction in defense spending and the subsequent impact on construction activity on or near military bases; a decline in energy-related construction activity resulting from suspension of the fuel tax or a sustained period of low global oil prices or changes in oil production patterns or capital spending, particularly in Texas and West Virginia; increasing residential mortgage interest rates and other factors that could result in a slowdown in residential construction; unfavorable weather conditions, particularly Atlantic Ocean and Gulf of Mexico hurricane activity, wildfires, the late start to spring or the early onset of winter and the impact of a drought or excessive rainfall in the markets served by the Company, any of which can significantly affect production schedules, volumes, product and/or geographic mix and profitability; the volatility of fuel costs, particularly diesel fuel, notably related to the current conflict between Russia and Ukraine, and the impact on the cost, or the availability generally, of other consumables, namely steel, explosives, tires and conveyor belts, and with respect to the Company’s Magnesia Specialties business, natural gas; continued increases in the cost of other repair and supply parts; construction labor shortages and/or supply‐chain challenges; unexpected equipment failures, unscheduled maintenance, industrial accident or other prolonged and/or significant disruption to production facilities; the resiliency and potential declines of the Company’s various construction end-use markets; the potential negative duration, severity and impact of a resurgence of the COVID-19 pandemic on the Company’s ability to continue supplying heavy-side building materials and related services at normal levels or at all in the Company’s key regions, including the markets in which it does business, its suppliers, customers or other business partners as well as on its employees; the economic impact of government responses to a resurgence of COVID-19; the performance of the United States economy; the impact of governmental orders restricting activities imposed to prevent further outbreak of COVID-19 on travel, potentially reducing state fuel tax revenues used to fund highway projects; a decline in the commercial component of the nonresidential construction market, notably office and retail space, including a decline resulting from economic distress related to the COVID-19 pandemic; increasing governmental regulation, including environmental laws; the failure of relevant government agencies to implement expected regulatory reductions; transportation availability or a sustained reduction in capital investment by the railroads, notably the availability of railcars, locomotive power and the condition of rail infrastructure to move trains to supply the Company’s Texas, Colorado, Florida, Carolinas and Gulf Coast markets, including the movement of essential dolomitic lime for magnesia chemicals to the Company’s plant in Manistee, Michigan and its customers; increased transportation costs, including increases from higher or fluctuating passed-through energy costs or fuel surcharges, and other costs to comply with tightening regulations, as well as higher volumes of rail and water shipments; availability of trucks and licensed drivers for transport of the Company’s materials; availability and cost of construction equipment in the United States; weakening in the steel industry markets served by the Company’s dolomitic lime products; trade disputes with one or more nations impacting the U.S. economy, including the impact of tariffs on the steel industry; unplanned changes in costs or realignment of customers that introduce volatility to earnings, including that of the Magnesia Specialties business that is running at capacity; proper functioning of information technology and automated operating systems to manage or support operations; inflation and its effect on both production and interest costs; the concentration of customers in construction markets and the increased risk of potential losses on customer receivables; the impact of the level of demand in the Company’s end-use markets, production levels and management of production costs on the operating leverage and therefore profitability of the Company; the possibility that the expected synergies from acquisitions will not be realized or will not be realized within the expected time period, including achieving anticipated profitability to maintain compliance with the Company’s leverage ratio debt covenant; changes in tax laws, the interpretation of such laws and/or administrative practices, including acquisitions or divestitures, that would increase the Company’s tax rate; violation of the Company’s debt covenant if price and/or volumes return to previous levels of instability; downward pressure on the Company’s common stock price and its impact on goodwill impairment evaluations; the possibility of a reduction of the Company’s credit rating to non-investment grade; and other risk factors listed from time to time found in the Company’s filings with the SEC.
You should consider these forward-looking statements in light of risk factors discussed in Martin Marietta’s Annual Report on Form 10-K for the year ended December 31, 2021 and other periodic filings made with the SEC. All of the Company’s forward-looking statements should be considered in light of these factors. In addition, other risks and uncertainties not presently known to the Company or that it considers immaterial could affect the accuracy of its forward-looking statements, or adversely affect or be material to the Company. The Company assumes no obligation to update any such forward-looking statements.
MARTIN MARIETTA MATERIALS, INC. Unaudited Statements of Earnings Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (In Millions, Except Per Share Data) Products and services revenues $ 1,680.5 $ 1,462.7 $ 4,352.1 $ 3,679.9 Freight revenues 131.2 94.6 332.1 237.7 Total Revenues 1,811.7 1,557.3 4,684.2 3,917.6 Cost of revenues - products and services 1,193.8 1,021.0 3,281.3 2,676.9 Cost of revenues - freight 130.1 94.4 333.8 239.0 Total Cost of Revenues 1,323.9 1,115.4 3,615.1 2,915.9 Gross Profit 487.8 441.9 1,069.1 1,001.7 Selling, general & administrative expenses 94.9 86.0 296.0 248.2 Acquisition and integration expenses 1.8 7.4 6.1 18.0 Other operating income, net (14.8 ) (8.4 ) (177.4 ) (28.2 ) Earnings from Operations 405.9 356.9 944.4 763.7 Interest expense 42.8 44.3 126.4 99.9 Other nonoperating income, net (7.3 ) (5.6 ) (40.1 ) (23.8 ) Earnings from continuing operations before income tax
expense370.4 318.2 858.1 687.6 Income tax expense 79.2 63.6 189.4 141.7 Earnings from continuing operations 291.2 254.6 668.7 545.9 Earnings from discontinued operations, net of income tax
expense4.1 — 14.3 — Consolidated net earnings 295.3 254.6 683.0 545.9 Less: Net (loss) earnings attributable to noncontrolling interests — — (0.2 ) 0.2 Net Earnings Attributable to Martin Marietta Materials, Inc. $ 295.3 $ 254.6 $ 683.2 $ 545.7 Net Earnings Attributable to Martin Marietta Per Common Share: Basic from continuing operations $ 4.67 $ 4.08 $ 10.73 $ 8.74 Basic from discontinued operations 0.07 — 0.23 — $ 4.74 $ 4.08 $ 10.96 $ 8.74 Diluted from continuing operations $ 4.67 $ 4.07 $ 10.69 $ 8.72 Diluted from discontinued operations 0.06 — 0.23 — $ 4.73 $ 4.07 $ 10.92 $ 8.72 Weighted-Average Common Shares Outstanding: Basic 62.3 62.4 62.4 62.4 Diluted 62.5 62.6 62.5 62.6 Dividends Per Common Share $ 0.66 $ 0.61 $ 1.88 $ 1.75 MARTIN MARIETTA MATERIALS, INC. Unaudited Financial Highlights Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Dollars in Millions) Total revenues: Building Materials: East Group $ 773.6 $ 684.1 $ 1,866.9 $ 1,714.4 West Group 962.4 794.8 2,582.9 1,978.2 Total Building Materials 1,736.0 1,478.9 4,449.8 3,692.6 Magnesia Specialties 75.7 78.4 234.4 225.0 Total $ 1,811.7 $ 1,557.3 $ 4,684.2 $ 3,917.6 Gross profit: Building Materials: East Group $ 269.9 $ 231.6 $ 565.4 $ 542.1 West Group 199.4 182.8 441.3 377.9 Total Building Materials 469.3 414.4 1,006.7 920.0 Magnesia Specialties 20.6 27.0 70.9 81.4 Corporate (2.1 ) 0.5 (8.5 ) 0.3 Total $ 487.8 $ 441.9 $ 1,069.1 $ 1,001.7 Selling, general and administrative expenses: Building Materials: East Group $ 29.0 $ 26.5 $ 86.5 $ 77.0 West Group 41.0 34.2 124.0 101.1 Total Building Materials 70.0 60.7 210.5 178.1 Magnesia Specialties 4.0 3.8 12.0 11.1 Corporate 20.9 21.5 73.5 59.0 Total $ 94.9 $ 86.0 $ 296.0 $ 248.2 Earnings (Loss) from operations: Building Materials: East Group $ 239.4 $ 205.8 $ 478.0 $ 465.3 West Group (1) 159.7 150.6 477.2 284.2 Total Building Materials 399.1 356.4 955.2 749.5 Magnesia Specialties 16.5 23.1 58.4 69.8 Corporate (9.7 ) (22.6 ) (69.2 ) (55.6 ) Total $ 405.9 $ 356.9 $ 944.4 $ 763.7 (1) Includes $151.9 million of nonrecurring gain on a divestiture in the nine months ended September 30, 2022. MARTIN MARIETTA MATERIALS, INC. Unaudited Financial Highlights (Continued) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Amount % of
RevenuesAmount % of
RevenuesAmount % of
RevenuesAmount % of
Revenues(Dollars in Millions) Total revenues: Building Materials: Products and services: Aggregates $ 1,015.7 $ 857.1 $ 2,656.8 $ 2,231.5 Cement 163.2 132.3 455.4 358.4 Ready mixed concrete 227.4 320.8 743.6 824.5 Asphalt and paving 309.8 195.9 576.9 343.5 Less: Interproduct sales (104.6 ) (115.3 ) (295.0 ) (285.1 ) Products and services 1,611.5 1,390.8 4,137.7 3,472.8 Freight 124.5 88.1 312.1 219.8 Total Building Materials 1,736.0 1,478.9 4,449.8 3,692.6 Magnesia Specialties: Products and services 69.0 71.9 214.4 207.1 Freight 6.7 6.5 20.0 17.9 Total Magnesia Specialties 75.7 78.4 234.4 225.0 Consolidated total revenues $ 1,811.7 $ 1,557.3 $ 4,684.2 $ 3,917.6 Gross profit (loss): Building Materials: Products and services: Aggregates $ 330.3 32.5% $ 292.9 34.2% $ 741.2 27.9% $ 687.7 30.8% Cement 67.7 41.5% 49.9 37.7% 146.1 32.1% 101.3 28.3% Ready mixed concrete 18.7 8.2% 31.4 9.8% 54.1 7.3% 69.9 8.5% Asphalt and paving 50.5 16.3% 38.9 19.9% 63.6 11.0% 59.4 17.3% Subtotal 467.2 29.0% 413.1 29.7% 1,005.0 24.3% 918.3 26.4% Freight 2.1 NM 1.3 NM 1.7 NM 1.7 NM Total Building Materials 469.3 27.0% 414.4 28.0% 1,006.7 22.6% 920.0 24.9% Magnesia Specialties: Products and services 21.6 31.3% 28.1 39.0% 74.3 34.6% 84.4 40.7% Freight (1.0 ) NM (1.1 ) NM (3.4 ) NM (3.0 ) NM Total Magnesia Specialties 20.6 27.2% 27.0 34.4% 70.9 30.2% 81.4 36.2% Corporate (2.1 ) NM 0.5 NM (8.5 ) NM 0.3 NM Consolidated gross profit $ 487.8 26.9% $ 441.9 28.4% $ 1,069.1 22.8% $ 1,001.7 25.6% MARTIN MARIETTA MATERIALS, INC. Balance Sheet Data September 30, December 31, 2022 2021 Unaudited Audited (In millions) ASSETS Cash and cash equivalents $ 135.7 $ 258.4 Restricted cash — 0.5 Restricted investments (to satisfy discharged debt and related interest) 704.6 — Accounts receivable, net 1,011.7 774.0 Inventories, net 823.4 752.6 Current assets held for sale 79.5 102.2 Other current assets 92.4 137.9 Property, plant and equipment, net 6,153.8 6,338.0 Intangible assets, net 4,496.1 4,559.4 Operating lease right-of-use assets, net 397.3 426.7 Noncurrent assets held for sale 375.1 616.9 Other noncurrent assets 460.1 426.4 Total assets $ 14,729.7 $ 14,393.0 LIABILITIES AND EQUITY Current maturities of discharged long-term debt $ 698.7 $ — Current liabilities held for sale 4.6 7.5 Other current liabilities 716.4 745.1 Long-term debt (excluding current maturities) 4,339.9 5,100.8 Noncurrent liabilities held for sale 23.8 53.5 Other noncurrent liabilities 2,008.5 1,948.5 Total equity 6,937.8 6,537.6 Total liabilities and equity $ 14,729.7 $ 14,393.0 MARTIN MARIETTA MATERIALS, INC. Unaudited Statements of Cash Flows Nine Months Ended September 30, 2022 2021 (Dollars in Millions) Cash Flows from Operating Activities: Consolidated net earnings $ 683.0 $ 545.9 Adjustments to reconcile consolidated net earnings to net cash
provided by operating activities:Depreciation, depletion and amortization 380.3 320.0 Stock-based compensation expense 34.3 33.0 Gain on divestitures, sales of assets and extinguishment of debt (190.7 ) (26.6 ) Deferred income taxes, net (1.0 ) 25.7 Other items, net (1.0 ) (8.3 ) Changes in operating assets and liabilities, net of effects of
acquisitions and divestitures:Accounts receivable, net (237.9 ) (218.0 ) Inventories, net (87.0 ) 65.1 Accounts payable 18.1 66.9 Other assets and liabilities, net (37.4 ) (23.4 ) Net Cash Provided by Operating Activities 560.7 780.3 Cash Flows from Investing Activities: Additions to property, plant and equipment (309.1 ) (321.3 ) Acquisitions, net of cash acquired 11.0 (792.9 ) Proceeds from divestitures and sales of assets 679.1 41.4 Purchase of restricted investments to discharge long-term debt (704.6 ) — Investments in life insurance contracts, net 2.2 13.9 Other investing activities, net (3.0 ) — Net Cash Used for Investing Activities (324.4 ) (1,058.9 ) Cash Flows from Financing Activities: Borrowings of debt — 2,896.6 Repayments of debt (54.5 ) (400.0 ) Payments on finance lease obligations (11.1 ) (7.6 ) Debt issuance and extinguishment costs (0.3 ) (6.1 ) Distributions to owners of noncontrolling interest — (0.5 ) Repurchases of common stock (150.0 ) — Dividends paid (118.1 ) (109.7 ) Proceeds from exercise of stock options 0.6 1.1 Shares withheld for employees' income tax obligations (26.1 ) (16.5 ) Net Cash (Used for) Provided by Financing Activities (359.5 ) 2,357.3 Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash (123.2 ) 2,078.7 Cash, Cash Equivalents and Restricted Cash, beginning of period 258.9 304.4 Cash, Cash Equivalents and Restricted Cash, end of period $ 135.7 $ 2,383.1 MARTIN MARIETTA MATERIALS, INC. Unaudited Operational Highlights Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 Volume Pricing Volume Pricing Volume/Pricing Variance(1) East Group 0.2 % 11.5 % — % 8.5 % West Group 15.6 % 12.2 % 25.2 % 11.0 % Total aggregates operations(2) 5.6 % 11.6 % 8.9 % 8.9 % Organic aggregates operations(3) (0.1 )% 11.9 % 2.0 % 9.4 % Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Tons in Millions) (Tons in Millions) Shipments East Group 37.2 37.1 95.2 95.2 West Group 23.0 19.9 64.9 51.8 Total aggregates operations(2) 60.2 57.0 160.1 147.0 (1) Volume/pricing variances reflect the percentage increase from the comparable period in the prior year. (2) Total aggregates operations include acquisitions from the date of acquisition and divestitures through the date of disposal. (3) Organic aggregates operations exclude volume and pricing data for acquisitions that have not been included in prior-year operations for the comparable period and divestitures. Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 % Change 2022 2021 % Change Shipments (in millions) Aggregates tons - external customers 55.9 52.0 148.0 135.2 Internal aggregates tons used in other product lines 4.3 5.0 12.1 11.8 Total aggregates tons 60.2 57.0 5.6 % 160.1 147.0 8.9 % Cement tons - external customers 0.8 0.7 2.2 1.8 Internal cement tons used in other product lines 0.3 0.4 1.0 1.1 Total cement tons 1.1 1.1 2.3 % 3.2 2.9 10.3 % Ready mixed concrete - cubic yards 1.7 2.7 (37.6 )% 5.9 7.2 (17.4 )% Asphalt tons - external customers 2.8 2.0 5.3 3.3 Internal asphalt tons used in road paving business 0.9 0.8 1.6 1.5 Total asphalt tons 3.7 2.8 31.3 % 6.9 4.8 46.1 % Average unit sales price by product line (including internal sales): Aggregates (per ton) $ 16.65 $ 14.93 11.6 % $ 16.41 $ 15.08 8.9 % Cement (per ton) $ 149.24 $ 122.91 21.4 % $ 139.64 $ 120.29 16.1 % Ready mixed concrete (per cubic yard) $ 132.64 $ 116.75 13.6 % $ 125.32 $ 114.59 9.4 % Asphalt (per ton) $ 61.45 $ 48.72 26.1 % $ 61.21 $ 48.77 25.5 % MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial MeasuresEarnings from continuing operations before interest; income taxes; depreciation, depletion and amortization expense; the earnings/loss from nonconsolidated equity affiliates; acquisition and integration expenses; an increase in cost of revenues from the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting; and the nonrecurring gain on divestiture of the Company’s Colorado and Texas ready-mixed concrete operations on April 1, 2022 (Adjusted EBITDA) is an indicator used by the Company and investors to evaluate the Company’s operating performance from period to period. Adjusted EBITDA is not defined by generally accepted accounting principles and, as such, should not be construed as an alternative to earnings from operations, net earnings attributable to Martin Marietta or operating cash flow. For further information on Adjusted EBITDA, refer to the Company’s website at www.martinmarietta.com.
Reconciliation of Net Earnings from Continuing Operations Attributable to Martin Marietta to Adjusted EBITDA
Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Dollars in Millions) Net earnings from continuing operations
attributable to Martin Marietta$ 291.2 $ 254.6 $ 668.9 $ 545.7 Add back (Deduct): Interest expense, net of interest income 38.8 44.2 121.5 99.6 Income tax expense for controlling interests 79.1 63.6 189.4 141.7 Depreciation, depletion and amortization and
earnings/loss from nonconsolidated equity
affiliates122.4 112.1 374.6 314.2 Acquisition and integration expenses 1.8 7.4 6.1 18.0 Impact of selling acquired inventory after markup
to fair value as a part of acquisition accounting— 8.1 — 15.7 Nonrecurring gain on divestiture (0.2 ) — (151.9 ) — Adjusted EBITDA $ 533.1 $ 490.0 $ 1,208.6 $ 1,134.9 Reconciliation of the GAAP Measure to 2022 Adjusted EBITDA Guidance Range
Low Point of Range High Point of Range (Dollars in Millions) Net earnings from continuing operations attributable to
Martin Marietta (1)$ 740.0 $ 800.0 Add back: Interest expense, net of interest income 165.0 170.0 Income tax expense for controlling interests 205.0 200.0 Depreciation, depletion and amortization expense and
earnings/loss from nonconsolidated equity affiliates500.0 505.0 Adjusted EBITDA $ 1,610.0 $ 1,675.0 (1) Excludes the nonrecurring gain on divestiture of the Company’s Colorado and Texas ready-mixed concrete operations on April 1, 2022. MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures (Continued)Adjusted gross profit and adjusted gross margin represent non-GAAP financial measures and exclude the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting. Management presents these measures for investors and analysts to evaluate and forecast the Company's results, as the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting is nonrecurring.
A Reconciliation of Consolidated Gross Profit in Accordance with GAAP to Adjusted Consolidated Gross Profit and Adjusted Consolidated Gross Margin is as follows:
Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Dollars in Millions) Consolidated gross profit in accordance with GAAP $ 487.8 $ 441.9 $ 1,069.1 $ 1,001.7 Add back: Impact of selling acquired inventory after its markup to
fair value as part of acquisition accounting— 8.1 — 15.7 Adjusted consolidated gross profit $ 487.8 $ 450.0 $ 1,069.1 $ 1,017.4 Consolidated total revenues $ 1,811.7 $ 1,557.3 $ 4,684.2 $ 3,917.6 Adjusted consolidated gross margin 26.9 % 28.9 % 22.8 % 26.0 % A Reconciliation of Building Materials Business Product and Services Gross Profit in Accordance with GAAP to Adjusted Building Materials Business Product and Services Gross Profit and Adjusted Building Materials Business Product and Services Gross Margin is as follows:
Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Dollars in Millions) Building materials business product and services gross profit
in accordance with GAAP$ 467.2 $ 413.1 $ 1,005.0 $ 918.3 Add back: Impact of selling acquired inventory after its markup to
fair value as part of acquisition accounting— 8.1 — 15.7 Adjusted building materials business product and services
gross profit$ 467.2 $ 421.2 $ 1,005.0 $ 934.0 Building materials business products and services revenues $ 1,611.5 $ 1,390.8 $ 4,137.7 $ 3,472.8 Adjusted building materials business products and services
gross margin29.0 % 30.3 % 24.3 % 26.9 % MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures (Continued)A Reconciliation of Aggregates Product Gross Profit in Accordance with GAAP to Adjusted Aggregates Product Gross Profit and Adjusted Aggregates Product Gross Margin is as follows:
Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Dollars in Millions) Aggregates product gross profit in accordance with GAAP $ 330.3 $ 292.9 $ 741.2 $ 687.7 Add back: Impact of selling acquired inventory after its markup to
fair value as part of acquisition accounting— 5.9 — 12.0 Adjusted aggregates product gross profit $ 330.3 $ 298.8 $ 741.2 $ 699.7 Aggregates products and services revenues $ 1,015.7 $ 857.1 $ 2,656.8 $ 2,231.5 Adjusted aggregates product gross margin 32.5 % 34.9 % 27.9 % 31.4 % A Reconciliation of Asphalt and Paving Product and Services Gross Profit in Accordance with GAAP to Adjusted Asphalt and Paving Product and Services Gross Profit and Adjusted Asphalt and Paving Product and Services Gross Margin is as follows:
Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Dollars in Millions) Asphalt and paving products and services gross profit
in accordance with GAAP$ 50.5 $ 38.9 $ 63.6 $ 59.4 Add back: Impact of selling acquired inventory after its markup to
fair value as part of acquisition accounting— 2.2 — 3.7 Adjusted asphalt and paving products and services gross
profit$ 50.5 $ 41.1 $ 63.6 $ 63.1 Asphalt and paving products and services revenues $ 309.8 $ 195.9 $ 576.9 $ 343.5 Adjusted asphalt and paving products and services gross
margin16.3 % 21.0 % 11.0 % 18.4 % MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures (Continued)Adjusted earnings from operations represents a non-GAAP financial measure and excludes acquisition and integration expenses; the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting; and the nonrecurring gain on divestiture of the Company’s Colorado and Texas ready-mixed concrete operations on April 1, 2022. Management presents this measure for investors and analysts to evaluate and forecast the Company’s results, as the impacts of acquisition and integration expenses, selling acquired inventory after its markup to fair value as part of acquisition accounting and the gain on divestiture of the Company’s Colorado and Texas ready-mixed concrete operations on April 1, 2022 are nonrecurring.
Reconciliation of Consolidated Earnings from Operations in Accordance with GAAP to Adjusted Earnings from Operations
Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Dollars in Millions) Consolidated earnings from operations in
accordance with GAAP$ 405.9 $ 356.9 $ 944.4 $ 763.7 Add back (Deduct): Acquisition and integration expenses 1.8 7.4 6.1 18.0 Impact of selling acquired inventory after its
markup to fair value as part of acquisition
accounting— 8.1 — 15.7 Nonrecurring gain on divestiture (0.2 ) — (151.9 ) — Adjusted earnings from operations $ 407.5 $ 372.4 $ 798.6 $ 797.4 MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures (Continued)Adjusted earnings per diluted share represents a non-GAAP financial measure and excludes acquisition and integration expenses; the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting; and the nonrecurring gain on divestiture of the Company’s Colorado and Texas ready-mixed concrete operations on April 1, 2022. Management presents this measure for investors and analysts to evaluate and forecast the Company’s results, as the impacts of acquisition and integration expenses, selling acquired inventory after its markup to fair value as part of acquisition accounting and the gain on divestiture of the Company’s Colorado and Texas ready-mixed concrete operations on April 1, 2022 are nonrecurring.
Reconciliation of Earnings Per Diluted Share in Accordance with GAAP to Adjusted Earnings Per Diluted Share
Three Months Ended September 30, 2022 Pretax Income Tax After-Tax Per Share (In Millions, Except per Share) Earnings per diluted share from continuing
operations in accordance with GAAP$ 4.67 Impact of acquisition and integration expenses $ 1.8 $ (0.5 ) $ 1.3 0.02 Adjusted earnings per diluted share from
continuing operations$ 4.69 Three Months Ended September 30, 2021 Pretax Income Tax After-Tax Per Share (In Millions, Except per Share) Earnings per diluted share from continuing
operations in accordance with GAAP$ 4.07 Impact of acquisition and integration expenses $ 7.4 $ (1.8 ) $ 5.6 0.09 Impact of selling acquired inventory after its
markup to fair value as part of acquisition
accounting$ 8.1 $ (2.3 ) $ 5.8 0.09 Adjusted earnings per diluted share from
continuing operations$ 4.25 Nine Months Ended September 30, 2022 Pretax Income Tax After-Tax Per Share (In Millions, Except per Share) Earnings per diluted share from continuing
operations in accordance with GAAP$ 10.69 Impact of acquisition and integration expenses $ 6.1 $ (1.4 ) $ 4.7 0.07 Impact of nonrecurring gain on divestiture $ (151.9 ) $ 43.6 $ (108.3 ) (1.73 ) Adjusted earnings per diluted share from
continuing operations$ 9.03 Nine Months Ended September 30, 2021 Pretax Income Tax After-Tax Per Share (In Millions, Except per Share) Earnings per diluted share from continuing
operations in accordance with GAAP$ 8.72 Impact of acquisition and integration expenses $ 18.0 $ (4.2 ) $ 13.8 0.22 Impact of selling acquired inventory after its
markup to fair value as part of acquisition
accounting$ 15.7 $ (4.2 ) $ 11.5 0.18 Adjusted earnings per diluted share from
continuing operations$ 9.12 MARTIN MARIETTA MATERIALS, INC.
Non-GAAP Financial Measures (Continued)Mix-adjusted average selling price (mix-adjusted ASP) is a non-GAAP measure that excludes the impact of period-over-period product, geographic and other mix on the average selling price. Mix-adjusted ASP is calculated by comparing current-period shipments to like-for-like shipments in the comparable prior period. Management uses this metric to evaluate the realization of pricing increases and believes this information is useful to investors. The following reconciles reported average selling price to mix-adjusted ASP and corresponding variances.
Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Organic East Group - Aggregates: Reported average selling price $ 17.01 $ 15.25 $ 16.95 $ 15.62 Adjustment for impact of product, geographic
and other mix(0.19 ) (0.08 ) Mix-adjusted ASP $ 16.82 $ 16.87 Reported average selling price variance 11.5 % 8.5 % Mix-adjusted ASP variance 10.3 % 8.0 % Organic West Group - Aggregates: Reported average selling price $ 16.11 $ 14.33 $ 15.71 $ 14.09 Adjustment for impact of product, geographic
and other mix0.11 (0.25 ) Mix-adjusted ASP $ 16.22 $ 15.46 Reported average selling price variance 12.4 % 11.5 % Mix-adjusted ASP variance 13.2 % 9.7 % Total Organic Aggregates: Reported average selling price $ 16.70 $ 14.93 $ 16.50 $ 15.08 Adjustment for impact of product, geographic
and other mix(0.09 ) (0.13 ) Mix-adjusted ASP $ 16.61 $ 16.37 Reported average selling price variance 11.9 % 9.4 % Mix-adjusted ASP variance 11.3 % 8.6 % Cement: Reported average selling price $ 149.24 $ 122.91 $ 139.64 $ 120.29 Adjustment for impact of product, geographic
and other mix(0.97 ) (0.72 ) Mix-adjusted ASP $ 148.27 $ 138.92 Reported average selling price variance 21.4 % 16.1 % Mix-adjusted ASP variance 20.6 % 15.5 %