BIRMINGHAM, Ala., Aug. 1, 2016 /PRNewswire/ -- Vulcan Materials
Company (NYSE: VMC), the nation's largest producer of construction
aggregates, today announced results for the second quarter ended
June 30, 2016.
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The Company's second quarter results reflect continued strong
earnings growth and margin expansion despite below-trend shipment
growth due to extremely wet weather and slower than expected large
project starts. These factors impacted shipments in several key
markets, particularly during May. Compared with the
prior year's second quarter, aggregates shipments rose 1.3 million
tons, or 3 percent, and aggregates pricing increased $0.84 per ton, or 7 percent. For the first
half of 2016, aggregates shipments grew 9 percent over the same
period in 2015, while aggregates pricing increased 8 percent.
Second quarter aggregates gross profit grew 23 percent. Net
earnings for the second quarter increased 157 percent and Adjusted
EBITDA increased 21 percent versus the prior year as gross profit
margins improved significantly in the Aggregates, Asphalt and
Concrete segments.
For the trailing twelve months, net earnings were $355 million and Adjusted EBITDA was $963 million, which represent gains of 213
percent and 38 percent, respectively, over the comparable prior
year period. Aggregates shipments for this period grew 9
percent, and pricing increased 8 percent. Incremental
aggregates gross profit equaled 75 percent of incremental
freight-adjusted revenues. Aggregates gross profit as a
percentage of freight-adjusted revenues expanded to 39 percent from
32 percent.
Tom Hill, Chairman and Chief
Executive Officer, said, "The fundamentals of our
aggregates-focused business remain attractive, and we are
reaffirming our full year Adjusted EBITDA guidance. Weather
patterns and the timing of large project activity have led to
higher month-to-month and state-to-state variability in our
shipments, somewhat masking the continued recovery in construction
materials demand across our footprint. In several markets,
higher levels of public funding for transportation and other
infrastructure have yet to convert into construction activity,
creating a 'lull' in materials shipments to these end uses.
In addition, some markets may have seen a portion of second quarter
shipment activity pulled forward into the first quarter. Taken in
total, however, our first half aggregates shipment growth of 9
percent was roughly in line with recent trend. Longer-term
project pipelines appear healthy, and the foundations for
sustained, multi-year volume and pricing growth remain in
place.
"Importantly, our teams continued to manage costs, pricing and
product mix well in the quarter. They improved per-ton gross
profit in our Aggregates segment by almost 20 percent despite
relatively modest shipment growth and uneven production schedules.
These disciplines, and the resulting improvements to our customer
service and profitability, reinforce our confidence in both our
2016 and longer-term EBITDA outlooks."
Second Quarter Summary (compared with prior year's second
quarter)
- Total revenues increased $62
million, or 7 percent, to $957
million
- Gross profit increased $58
million, or 25 percent, to $292
million
- Aggregates segment sales increased $58
million, or 8 percent to $791
million, and Aggregates freight-adjusted revenues increased
$56 million, or 10 percent, to
$615 million
- Shipments increased 3 percent, or 1.3 million tons, to 49
million tons
- Sales price increased 7 percent
- Segment gross profit increased $47
million, or 23 percent, to $254
million
- Asphalt, Concrete and Calcium segment gross profit improved
$11 million, collectively
- SAG increased 90 basis points as a percentage of total revenues
due mainly to the amount and timing of incentive compensation in
2016 versus 2015
- Net earnings were $124 million,
an increase of $76 million, or 157
percent
- Adjusted EBIT was $208 million,
an increase of $45 million, or 28
percent
- Adjusted EBITDA was $280 million,
an increase of $49 million, or 21
percent
- Earnings from continuing operations were $0.93 per diluted share versus $0.37 per diluted share in the second quarter of
2015
- The current quarter's earnings include $0.05 per diluted share of income from business
interruption claims and $0.02 per
share in charges associated with legacy businesses previously
divested
- The prior year's results included $0.28 per diluted share for net charges related
to a debt purchase, gain on sale of assets, restructuring and
business development costs
- Excluding these items, earnings from continuing operations were
$0.90 per diluted share in the second
quarter of 2016 versus $0.65 per
diluted share in the prior year
Trailing Twelve Months Summary (compared with the prior
twelve month period)
- Total revenues increased $452
million, or 14 percent, to $3.6
billion
- Gross profit increased $311
million, or 45 percent, to $1.0
billion
- Aggregates segment sales increased $442
million, or 17 percent, to $3.0
billion, and Aggregates freight-adjusted revenues increased
$351 million, or 18 percent, to
$2.3 billion
- Total shipments increased 9 percent, or 15 million tons, to 185
million tons; same-store shipments increased 8 percent
- Sales price increased 9 percent
- Segment gross profit increased $264
million, or 43 percent, to $883
million
- Asphalt, Concrete and Calcium segment gross profit improved
$47 million collectively
- SAG declined as a percentage of total revenues to 8.6 percent,
down 10 basis points
- Net earnings were $355 million,
an increase of $242 million, or 213
percent
- Adjusted EBIT was $682 million,
an increase of $260 million, or 62
percent
- Adjusted EBITDA was $963 million,
an increase of $264 million, or 38
percent
- Earnings from continuing operations were $2.71 per diluted share versus $0.90 per share
- These results include gains on sale of assets and recovery from
business interruption claims, as well as charges related to debt
refinancing, impairment of leased property, certain charges
recorded in Other Operating Expense, business development
activities, restructuring and certain income tax items
- Excluding these items, earnings from continuing operations were
$2.82 per diluted share versus
$1.34 per diluted share
Segment Results
Aggregates
As noted, weather patterns and the timing of large projects led
to highly variable second quarter shipment results across
Vulcan-served markets. Many of the Company's key states
realized strong double-digit volume growth, including markets in
Georgia, Florida, North
Carolina and South
Carolina. In contrast, Texas shipments fell 13 percent – with
particular weakness in the coastal region, where year-over-year
shipments fell by more than 30 percent. Aggregates shipments
in California, Illinois and Virginia also declined by high single
digits. Weather and other factors most severely impacted
shipments in May, during which average daily shipment rates across
the Company were approximately 5 percent below the prior
year. By comparison, April and June daily shipping rates were
approximately 8 percent and 6 percent ahead of the prior year,
respectively.
For the twelve months ended June
30, shipments rose 9 percent over the prior year
period. This was the twelfth consecutive quarter in which the
rate of shipments increased, as measured on a trailing twelve
months basis. Despite these recent gains, demand for
aggregates remains well below demographic-driven historical levels
in the U.S. The Company believes conditions remain in place
for a sustained, multi-year recovery in demand for aggregates,
although quarter-to-quarter trends may vary significantly.
For the quarter, freight-adjusted average sales price for
aggregates increased 7 percent, or $0.84 per ton, versus the prior year.
Geographic and product mix factors had a slightly negative impact
on the total Company average sales price and the rate of price
growth in the quarter. On a trailing twelve months basis,
pricing in all of the Company's major markets has increased versus
the prior year's comparable period. The overall pricing
climate remains favorable as construction materials producers stay
focused on earning adequate returns on capital.
Unit cost of sales in the Aggregates segment was flat versus the
prior year's second quarter. Excluding the benefits of lower
unit costs for diesel fuel, unit costs were approximately 2 percent
higher in the quarter. For the trailing twelve months, unit
cost of sales, excluding the impact of lower diesel costs, was
essentially flat. These results reflect the Company's
continued commitment to plant-level cost controls and operating
disciplines.
Aggregates segment unit margins continued to increase.
Gross profit per ton increased $0.84,
or 19 percent, from the prior year's second quarter. Cash
gross profit per ton increased $0.86,
or 15 percent, from the prior year. On a trailing twelve
months basis, unit gross profit has increased 31 percent, to
$4.77 per ton, while unit cash gross
profit has increased 21 percent to $6.02 per ton.
For the quarter, the Company's aggregates gross profit
flow-through rate was strong. Freight-adjusted revenues
increased $56 million, while gross
profit for the segment increased $47
million. On a same-store basis, incremental gross
profit was 85 percent of incremental freight-adjusted
revenues. Because quarterly results can vary significantly
due to seasonality and other factors, the Company encourages
investors to also consider longer-term trends. On a trailing
twelve months same-store basis, this flow-through rate was 80
percent and has consistently exceeded the Company's stated goal of
60 percent in each of the quarters since volumes began to recover
in the second half of 2013.
Asphalt, Concrete and Calcium
In the second quarter, asphalt gross profit was $31 million versus $21
million in the prior year. This year-over-year
improvement was due to solid sales and operating disciplines as
well as effective materials margin management. Total volumes
increased 1 percent and pricing was flat versus the prior
year. Large-project delays negatively impacted volumes in the
quarter, including in California.
Concrete gross profit was $6
million in the quarter compared to approximately
$5 million in the prior year
period. Sales volumes increased 1 percent versus the prior
year, with weather negatively impacting our concrete operations in
Virginia and Maryland. Unit
margins, as measured by gross profit per cubic yard delivered, were
well ahead of the prior year period.
In the second quarter, the Company's Calcium segment reported
gross profit of $1.1 million, in line
with the prior year.
Selling, Administrative and General (SAG) and Other
Selling, administrative and general (SAG) expenses increased
$13 million versus the prior
year. The year-over-year increase results primarily from
certain compensation-related charges during the second quarter of
2016 as a result of the significant improvement in the Company's
business performance and stock price, and investments to enhance
sales initiatives. For the year, SAG expense should
approximate $310 million and continue
to decline as a percentage of total revenues.
During the second quarter, we recognized $11 million of income from business interruption
claims related to the 2010 Gulf Coast oil spill (This amount is
excluded from Adjusted EBITDA).
Credit Position and Capital Allocation
At the end of the second quarter, total debt outstanding was
approximately $2 billion, including
$235 million of floating-rate
borrowings. The ratio of total debt to trailing twelve months
Adjusted EBITDA was 2.1 times. The quarter end cash balance
was $92 million.
As of June 30, cash capital
expenditures were $200 million,
including $50 million invested in the
purchase of two replacement ships to transport aggregates from the
Company's high-volume quarry in Mexico, as well as new site development and
investment in other growth opportunities. For the full year,
core capital expenditures are expected to be approximately
$275 million. Internal growth
capital investments, excluding acquisitions, are expected to be
approximately $125 million.
During the first half of 2016, the Company returned $122 million to shareholders through dividends
and share repurchases. The Company repurchased approximately
637,000 shares in the first half of the year at an average cost of
$108.62 per share.
Demand and Earnings Outlook
Regarding the Company's earnings outlook for the remainder of
2016, Mr. Hill stated, "The strong fundamentals of our
aggregates-focused business and the outstanding performance of our
teams led to strong earnings growth in 2015, and that momentum has
continued through the first half of 2016. Unit profitability
continues to improve and incremental margins remain strong across
our businesses, offsetting some risks to our full year volume
outlook. Although we still expect full year aggregates
shipments to exceed 190 million tons, two key factors will be
important to realizing full year shipment growth of 8 to 9 percent:
(1) the ability of our customers to recover weather-delayed volume
from the second quarter, which can be a challenge in a growing
market, and (2) the absence of further delays in several large
projects in key markets. And, as always, fourth quarter
weather and the ultimate length of the construction season can
impact our shipments in a given year.
"Importantly, the volatility in volume growth rates that we have
experienced recently relates primarily to the timing of shipments
(i.e., in which month or quarter they occur) and not to the
longer-term health of the recovery in demand. Our first half
2016 results and full year outlook are aligned with our longer
range market expectations and performance goals. Since the
beginning of this recovery in the second half of 2013, our teams'
efforts have resulted in trailing twelve months aggregates gross
profit increasing nearly $525 million
on a 45 million ton increase in annualized shipments. We
remain on track to deliver further gains in profitability and cash
flow as the recovery moves forward."
Conference Call
Vulcan will host a conference call at 10:00 a.m. CDT on August
1, 2016. A webcast will be available via the Company's
website at www.vulcanmaterials.com. Investors and other
interested parties in the U.S. may also access the teleconference
live by calling 888-539-3696 approximately 10 minutes before the
scheduled start. International participants can dial
719-325-2308. The conference ID is 3435711. 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; volatility in pension plan asset values and
liabilities which may require cash contributions to the pension
plans; the impact of environmental clean-up costs and other
liabilities relating to previously divested businesses; Vulcan's
ability to secure and permit aggregates reserves in strategically
located areas; Vulcan's ability to manage and successfully
integrate acquisitions; the potential of goodwill or long-lived
asset impairment; the potential impact of future legislation or
regulations relating to climate change or greenhouse gas emissions
or the definition of minerals; and other assumptions, risks and
uncertainties detailed from time to time in the reports filed by
Vulcan with the SEC. All forward-looking statements in this
communication are qualified in their entirety by this cautionary
statement. Vulcan disclaims and does not undertake any
obligation to update or revise any forward-looking statement in
this document except as required by law.
Table A
|
Vulcan Materials
Company
|
and Subsidiary
Companies
|
(in thousands, except
per share data)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
Consolidated
Statements of Earnings
|
June
30
|
|
June
30
|
(Condensed and
unaudited)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Total
revenues
|
$956,825
|
|
$895,143
|
|
$1,711,552
|
|
$1,526,436
|
Cost of
revenues
|
664,641
|
|
660,694
|
|
1,254,649
|
|
1,214,122
|
Gross profit
|
292,184
|
|
234,449
|
|
456,903
|
|
312,314
|
Selling,
administrative and general expenses
|
82,681
|
|
69,197
|
|
159,149
|
|
135,960
|
Gain on sale of
property, plant & equipment
|
|
|
|
|
|
|
|
and
businesses
|
356
|
|
249
|
|
911
|
|
6,624
|
Business interuption
claims recovery
|
10,962
|
|
0
|
|
10,962
|
|
0
|
Impairment of
long-lived assets
|
(860)
|
|
(5,190)
|
|
(10,506)
|
|
(5,190)
|
Restructuring
charges
|
0
|
|
(1,280)
|
|
(320)
|
|
(4,098)
|
Other operating
expense, net
|
(6,175)
|
|
(5,255)
|
|
(20,094)
|
|
(9,156)
|
Operating
earnings
|
213,786
|
|
153,776
|
|
278,707
|
|
164,534
|
Other nonoperating
income (expense), net
|
29
|
|
(439)
|
|
(666)
|
|
542
|
Interest expense,
net
|
33,333
|
|
83,651
|
|
67,065
|
|
146,132
|
Earnings from
continuing operations
|
|
|
|
|
|
|
|
before income
taxes
|
180,482
|
|
69,686
|
|
210,976
|
|
18,944
|
Provision for income
taxes
|
54,200
|
|
19,867
|
|
63,964
|
|
5,791
|
Earnings from
continuing operations
|
126,282
|
|
49,819
|
|
147,012
|
|
13,153
|
Loss on discontinued
operations, net of tax
|
(2,532)
|
|
(1,657)
|
|
(4,338)
|
|
(4,669)
|
Net
earnings
|
$123,750
|
|
$48,162
|
|
$142,674
|
|
$8,484
|
|
Basic earnings (loss)
per share
|
|
|
|
|
|
|
|
Continuing
operations
|
$0.95
|
|
$0.37
|
|
$1.10
|
|
$0.10
|
Discontinued
operations
|
($0.02)
|
|
($0.01)
|
|
($0.03)
|
|
($0.04)
|
Net
earnings
|
$0.93
|
|
$0.36
|
|
$1.07
|
|
$0.06
|
|
Diluted earnings
(loss) per share
|
|
|
|
|
|
|
|
Continuing
operations
|
$0.93
|
|
$0.37
|
|
$1.09
|
|
$0.10
|
Discontinued
operations
|
($0.02)
|
|
($0.01)
|
|
($0.04)
|
|
($0.04)
|
Net
earnings
|
$0.91
|
|
$0.36
|
|
$1.05
|
|
$0.06
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
133,419
|
|
133,103
|
|
133,619
|
|
132,882
|
Assuming
dilution
|
135,395
|
|
135,234
|
|
135,370
|
|
134,689
|
Cash dividends per
share of common stock
|
$0.20
|
|
$0.10
|
|
$0.40
|
|
$0.20
|
Depreciation,
depletion, accretion and amortization
|
$71,908
|
|
$68,384
|
|
$141,314
|
|
$135,108
|
Effective tax rate
from continuing operations
|
30.0%
|
|
28.5%
|
|
30.3%
|
|
30.6%
|
Table B
|
Vulcan Materials
Company
|
and Subsidiary
Companies
|
(in
thousands)
|
Consolidated
Balance Sheets
|
June
30
|
|
December
31
|
|
June
30
|
(Condensed and
unaudited)
|
2016
|
|
2015
|
|
2015
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$91,902
|
|
$284,060
|
|
$74,736
|
Restricted
cash
|
0
|
|
1,150
|
|
0
|
Accounts and notes
receivable
|
|
|
|
|
|
Accounts and notes
receivable, gross
|
537,127
|
|
423,600
|
|
495,781
|
Less: Allowance for
doubtful accounts
|
(4,332)
|
|
(5,576)
|
|
(5,370)
|
Accounts and notes
receivable, net
|
532,795
|
|
418,024
|
|
490,411
|
Inventories
|
|
|
|
|
|
Finished
products
|
295,405
|
|
297,925
|
|
292,932
|
Raw
materials
|
25,366
|
|
21,765
|
|
21,610
|
Products in
process
|
2,223
|
|
1,008
|
|
1,461
|
Operating supplies
and other
|
24,872
|
|
26,375
|
|
25,825
|
Inventories
|
347,866
|
|
347,073
|
|
341,828
|
Current deferred
income taxes
|
0
|
|
0
|
|
39,562
|
Prepaid
expenses
|
50,844
|
|
34,284
|
|
75,663
|
Total current
assets
|
1,023,407
|
|
1,084,591
|
|
1,022,200
|
Investments and
long-term receivables
|
38,924
|
|
40,558
|
|
41,603
|
Property, plant &
equipment
|
|
|
|
|
|
Property, plant &
equipment, cost
|
7,052,051
|
|
6,891,287
|
|
6,752,916
|
Reserve for
depreciation, depletion & amortization
|
(3,834,680)
|
|
(3,734,997)
|
|
(3,637,392)
|
Property, plant &
equipment, net
|
3,217,371
|
|
3,156,290
|
|
3,115,524
|
Goodwill
|
3,094,824
|
|
3,094,824
|
|
3,094,824
|
Other intangible
assets, net
|
754,341
|
|
766,579
|
|
767,995
|
Other noncurrent
assets
|
161,246
|
|
158,790
|
|
153,737
|
Total
assets
|
$8,290,113
|
|
$8,301,632
|
|
$8,195,883
|
Liabilities
|
|
|
|
|
|
Current maturities of
long-term debt
|
131
|
|
130
|
|
14,124
|
Short-term
debt
|
0
|
|
0
|
|
138,500
|
Trade payables and
accruals
|
176,476
|
|
175,729
|
|
190,904
|
Other current
liabilities
|
156,071
|
|
177,620
|
|
163,112
|
Total current
liabilities
|
332,678
|
|
353,479
|
|
506,640
|
Long-term
debt
|
1,982,527
|
|
1,980,334
|
|
1,893,737
|
Noncurrent deferred
income taxes
|
683,999
|
|
681,096
|
|
686,171
|
Deferred
revenue
|
203,800
|
|
207,660
|
|
211,429
|
Other noncurrent
liabilities
|
607,778
|
|
624,875
|
|
670,949
|
Total
liabilities
|
$3,810,782
|
|
$3,847,444
|
|
$3,968,926
|
Equity
|
|
|
|
|
|
Common stock, $1 par
value
|
133,027
|
|
133,172
|
|
132,984
|
Capital in excess of
par value
|
2,826,471
|
|
2,822,578
|
|
2,791,232
|
Retained
earnings
|
1,639,267
|
|
1,618,507
|
|
1,453,752
|
Accumulated other
comprehensive loss
|
(119,434)
|
|
(120,069)
|
|
(151,011)
|
Total
equity
|
$4,479,331
|
|
$4,454,188
|
|
$4,226,957
|
Total liabilities and
equity
|
$8,290,113
|
|
$8,301,632
|
|
$8,195,883
|
Table C
|
Vulcan Materials
Company
|
and Subsidiary
Companies
|
(in
thousands)
|
Six Months
Ended
|
Consolidated
Statements of Cash Flows
|
|
|
June
30
|
(Condensed and
unaudited)
|
2016
|
|
2015
|
Operating
Activities
|
|
|
|
Net
earnings
|
$142,674
|
|
$8,484
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
Depreciation,
depletion, accretion and amortization
|
141,314
|
|
135,108
|
Net gain on sale of
property, plant & equipment and businesses
|
(911)
|
|
(6,624)
|
Contributions to
pension plans
|
(4,737)
|
|
(2,822)
|
Share-based
compensation
|
10,832
|
|
9,679
|
Excess tax benefits
from share-based compensation
|
(23,749)
|
|
(11,457)
|
Deferred tax
provision (benefit)
|
2,592
|
|
(11,656)
|
Cost of debt
purchase
|
0
|
|
67,075
|
Changes in assets and
liabilities before initial
|
|
|
|
effects of business
acquisitions and dispositions
|
(135,024)
|
|
(109,790)
|
Other, net
|
(30,458)
|
|
(13,360)
|
Net cash provided by
operating activities
|
$102,533
|
|
$64,637
|
Investing
Activities
|
|
|
|
Purchases of
property, plant & equipment
|
(199,764)
|
|
(148,721)
|
Proceeds from sale of
property, plant & equipment
|
2,427
|
|
3,419
|
Payment for
businesses acquired, net of acquired cash
|
(1,611)
|
|
(21,387)
|
Decrease in
restricted cash
|
1,150
|
|
0
|
Other, net
|
1,862
|
|
(334)
|
Net cash used for
investing activities
|
($195,936)
|
|
($167,023)
|
Financing
Activities
|
|
|
|
Proceeds from line of
credit
|
3,000
|
|
284,000
|
Payments of line of
credit
|
(3,000)
|
|
(145,500)
|
Payments of current
maturities and long-term debt
|
(9)
|
|
(530,945)
|
Proceeds from
issuance of long-term debt
|
0
|
|
400,000
|
Debt and line of
credit issuance costs
|
0
|
|
(7,382)
|
Purchases of common
stock
|
(69,156)
|
|
0
|
Dividends
paid
|
(53,338)
|
|
(26,549)
|
Proceeds from
exercise of stock options
|
0
|
|
50,769
|
Excess tax benefits
from share-based compensation
|
23,749
|
|
11,457
|
Other, net
|
(1)
|
|
(1)
|
Net cash provided by
(used for) financing activities
|
($98,755)
|
|
$35,849
|
Net decrease in cash
and cash equivalents
|
(192,158)
|
|
(66,537)
|
Cash and cash
equivalents at beginning of year
|
284,060
|
|
141,273
|
Cash and cash
equivalents at end of period
|
$91,902
|
|
$74,736
|
Table D
|
Segment Financial
Data and Unit Shipments
|
(in thousands, except
per unit data)
|
|
|
Three
Months Ended
|
|
Six Months
Ended
|
|
June
30
|
|
June
30
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Total
Revenues
|
Aggregates
1
|
$791,497
|
|
$733,379
|
|
$1,426,365
|
|
$1,236,888
|
Asphalt
Mix
|
142,055
|
|
128,998
|
|
231,154
|
|
232,069
|
Concrete
|
81,246
|
|
78,598
|
|
151,643
|
|
138,387
|
Calcium
|
2,448
|
|
2,396
|
|
4,358
|
|
4,251
|
Segment
sales
|
$1,017,246
|
|
$943,371
|
|
$1,813,520
|
|
$1,611,595
|
Aggregates
intersegment sales
|
(60,421)
|
|
(48,228)
|
|
(101,968)
|
|
(85,159)
|
Total
revenues
|
$956,825
|
|
$895,143
|
|
$1,711,552
|
|
$1,526,436
|
|
Gross
Profit
|
Aggregates
|
$254,008
|
|
$207,285
|
|
$402,392
|
|
$274,950
|
Asphalt
Mix
|
30,925
|
|
21,135
|
|
43,139
|
|
29,953
|
Concrete
|
6,146
|
|
4,892
|
|
9,623
|
|
5,702
|
Calcium
|
1,105
|
|
1,137
|
|
1,749
|
|
1,709
|
Total
|
$292,184
|
|
$234,449
|
|
$456,903
|
|
$312,314
|
|
Depreciation,
Depletion, Accretion and Amortization
|
Aggregates
|
$59,414
|
|
$57,003
|
|
$116,925
|
|
$112,519
|
Asphalt
Mix
|
4,136
|
|
4,098
|
|
8,368
|
|
8,007
|
Concrete
|
3,088
|
|
2,774
|
|
6,069
|
|
5,502
|
Calcium
|
196
|
|
164
|
|
379
|
|
326
|
Other
|
5,074
|
|
4,345
|
|
9,573
|
|
8,754
|
Total
|
$71,908
|
|
$68,384
|
|
$141,314
|
|
$135,108
|
|
Average Unit Sales
Price and Unit Shipments
|
Aggregates
|
|
|
|
|
|
|
|
Freight-adjusted
revenues 2
|
$614,778
|
|
$558,382
|
|
$1,101,695
|
|
$938,262
|
Aggregates -
tons
|
48,766
|
|
47,452
|
|
87,973
|
|
80,955
|
Freight-adjusted
sales price 3
|
$12.61
|
|
$11.77
|
|
$12.52
|
|
$11.59
|
|
Other
Products
|
|
|
|
|
|
|
|
Asphalt Mix -
tons
|
2,515
|
|
2,480
|
|
4,214
|
|
4,248
|
Asphalt Mix - sales
price
|
$54.10
|
|
$54.20
|
|
$53.27
|
|
$53.76
|
|
Ready-mixed concrete
- cubic yards
|
752
|
|
743
|
|
1,400
|
|
1,316
|
Ready-mixed concrete
- sales price
|
$108.06
|
|
$105.79
|
|
$108.30
|
|
$105.12
|
|
Calcium -
tons
|
91
|
|
90
|
|
163
|
|
158
|
Calcium - sales
price
|
$26.91
|
|
$27.07
|
|
$26.72
|
|
$26.87
|
|
1Includes
crushed stone, sand and gravel, sand, other aggregates, as well as
freight, delivery and transportation
|
revenues, and other
revenues related to services.
|
2Freight-adjusted revenues are Aggregates
segment sales excluding freight, delivery and transportation
revenues,
|
and other revenues
related to services, such as landfill tipping fees that are derived
from our aggregates business.
|
3Freight-adjusted sales price is
calculated as freight-adjusted revenues divided by aggregates unit
shipments.
|
Appendix 1
|
1.
Supplemental Cash Flow Information
|
Supplemental
information referable to the Condensed Consolidated Statements of
Cash Flows is summarized below:
|
|
(in
thousands)
|
Six Months
Ended
|
|
June
30
|
|
2016
|
|
2015
|
|
Cash
Payments
|
Interest (exclusive
of amount capitalized)
|
$67,679
|
|
$134,215
|
Income
taxes
|
64,556
|
|
31,755
|
|
Noncash Investing
and Financing Activities
|
Accrued liabilities
for purchases of property, plant & equipment
|
20,850
|
|
13,651
|
Amounts referable to
business acquisitions
|
Liabilities
assumed
|
0
|
|
2,426
|
Fair value of noncash
assets and liabilities exchanged
|
0
|
|
20,000
|
|
2.
Reconciliation of Non-GAAP Measures
|
|
Gross profit margin
excluding freight and delivery revenues is not a Generally Accepted
Accounting Principle (GAAP)
measure. We present this metric as it is consistent with the basis
by which we review our operating results. Likewise, we
believe that this presentation is consistent with the basis by
which investors analyze our operating results considering
that freight and delivery services represent pass-through
activities. Reconciliation of this metric to its nearest GAAP
measure is presented below:
|
|
Gross Profit
Margin in Accordance with GAAP
|
(dollars in
thousands)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30
|
|
June
30
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Gross
profit
|
$292,184
|
|
$234,449
|
|
$456,903
|
|
$312,314
|
Total
revenues
|
$956,825
|
|
$895,143
|
|
$1,711,552
|
|
$1,526,436
|
Gross profit
margin
|
30.5%
|
|
26.2%
|
|
26.7%
|
|
20.5%
|
|
Gross Profit
Margin Excluding Freight and Delivery Revenues
|
(dollars in
thousands)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30
|
|
June
30
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Gross
profit
|
$292,184
|
|
$234,449
|
|
$456,903
|
|
$312,314
|
Total
revenues
|
$956,825
|
|
$895,143
|
|
$1,711,552
|
|
$1,526,436
|
Freight and delivery
revenues 1
|
142,300
|
|
136,527
|
|
263,511
|
|
242,899
|
Total revenues
excluding freight and delivery revenues
|
$814,525
|
|
$758,616
|
|
$1,448,041
|
|
$1,283,537
|
Gross profit margin
excluding freight and delivery revenues
|
35.9%
|
|
30.9%
|
|
31.6%
|
|
24.3%
|
|
1Includes
freight to remote distributions sites.
|
Appendix 2
|
Reconciliation of
Non-GAAP Measures (Continued)
|
|
Aggregates segment
gross profit margin as a percentage of freight-adjusted revenues is
not a GAAP measure. We present this metric as it is consistent with
the basis by which we review our operating results. We believe that
this presentation is meaningful to our investors as it excludes
freight, delivery and transportation revenues which are
pass-through activities. It also excludes immaterial other revenues
related to services, such as landfill tipping fees, that are
derived from our aggregates business. Incremental gross profit as a
percentage of freight-adjusted revenues represents the
year-over-year change in gross profit divided by the year-over-year
change in freight-adjusted revenues. Reconciliations of these
metrics to their nearest GAAP measures are presented
below:
|
|
|
Aggregates Segment
Gross Profit Margin in Accordance with GAAP
|
(dollars in
thousands)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30
|
|
June
30
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Aggregates
segment
|
|
|
|
|
|
|
|
Gross
profit
|
$254,008
|
|
$207,285
|
|
$402,392
|
|
$274,950
|
Segment
sales
|
$791,497
|
|
$733,379
|
|
$1,426,365
|
|
$1,236,888
|
Gross profit
margin
|
32.1%
|
|
28.3%
|
|
28.2%
|
|
22.2%
|
Incremental gross
profit margin
|
80.4%
|
|
|
|
67.3%
|
|
|
|
|
Aggregates Segment
Gross Profit as a Percentage of Freight-Adjusted
Revenues
|
(dollars in
thousands)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30
|
|
June
30
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Aggregates
segment
|
|
|
|
|
|
|
|
Gross
profit
|
$254,008
|
|
$207,285
|
|
$402,392
|
|
$274,950
|
Segment
sales
|
$791,497
|
|
$733,379
|
|
$1,426,365
|
|
$1,236,888
|
Less
|
|
|
|
|
|
|
|
Freight, delivery and
transportation revenues 1
|
$173,397
|
|
$170,516
|
|
$317,147
|
|
$287,914
|
Other
revenues
|
3,322
|
|
4,481
|
|
7,523
|
|
10,712
|
Freight-adjusted
revenues
|
$614,778
|
|
$558,382
|
|
$1,101,695
|
|
$938,262
|
|
Gross profit as a
percentage of freight-adjusted revenues
|
41.3%
|
|
37.1%
|
|
36.5%
|
|
29.3%
|
Incremental gross
profit as a
percentage
of freight-adjusted revenues
|
|
|
|
|
|
|
|
82.8%
|
|
|
|
78.0%
|
|
|
|
1At 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
"Aggregates segment cash gross profit" and "Earnings Before
Interest, Taxes, Depreciation and
Amortization" (EBITDA). Thus, Aggregates segment cash gross profit
and EBITDA should not be considered as
alternatives to earnings measures defined by GAAP. We present these
metrics for the convenience of investment
professionals who use such metrics in their analyses and for
shareholders who need to understand the metrics we use to
assess performance. The investment community often uses these
metrics to assess the operating performance of a
company's businesses. We use Aggregates segment cash gross profit
and EBITDA to assess the operating
performance of our various business units and the consolidated
company. Additionally, we adjust EBITDA for certain
items to provide a more consistent comparison of performance from
period to period. We do not use these metrics as a
measure to allocate resources. Reconciliations of these metrics to
their nearest GAAP measures are
presented below:
|
|
Aggregates Segment
Cash Gross Profit
|
Aggregates segment
cash gross profit adds back noncash charges for depreciation,
depletion, accretion and
amortization (DDA&A) to Aggregates segment gross profit.
Aggregates segment cash gross profit per ton is computed
by dividing Aggregates segment cash gross profit by tons
shipped.
|
|
|
|
(in
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30
|
|
June
30
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Aggregates
segment
|
|
|
|
|
|
|
|
Gross
profit
|
$254,008
|
|
$207,285
|
|
$402,392
|
|
$274,950
|
DDA&A
|
59,414
|
|
57,003
|
|
116,925
|
|
112,519
|
Aggregates segment cash
gross profit
|
$313,422
|
|
$264,288
|
|
$519,317
|
|
$387,469
|
Unit shipments -
tons
|
48,766
|
|
47,452
|
|
87,973
|
|
80,955
|
Aggregates segment
cash gross profit per ton
|
$6.43
|
|
$5.57
|
|
$5.90
|
|
$4.79
|
Appendix 4
|
Reconciliation of
Non-GAAP Measures (Continued)
|
|
EBITDA and
Adjusted EBITDA
|
|
EBITDA is an acronym
for Earnings Before Interest, Taxes, Depreciation and Amortization
and excludes discontinued operations.
We adjust EBITDA for certain items to provide a more consistent
comparison of performance from period to period.
|
(in
thousands)
|
Trailing
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Twelve Months
Ended
|
|
June
30
|
|
June
30
|
|
June
30
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Reconciliation of
Net Earnings to EBITDA
|
|
Net
earnings
|
$123,750
|
|
$48,162
|
|
$142,674
|
|
$8,484
|
|
$355,367
|
|
$113,444
|
Provision for income
taxes
|
54,200
|
|
19,867
|
|
63,964
|
|
5,791
|
|
153,115
|
|
56,601
|
Interest expense,
net
|
33,333
|
|
83,651
|
|
67,065
|
|
146,132
|
|
141,177
|
|
227,899
|
Loss on discontinued
operations, net of tax
|
2,532
|
|
1,657
|
|
4,338
|
|
4,669
|
|
11,407
|
|
5,838
|
EBIT
|
$213,815
|
|
$153,337
|
|
$278,041
|
|
$165,076
|
|
$661,066
|
|
$403,782
|
Depreciation,
depletion, accretion and amortization
|
71,908
|
|
68,384
|
|
141,314
|
|
135,108
|
|
281,029
|
|
276,903
|
EBITDA
|
$285,723
|
|
$221,721
|
|
$419,355
|
|
$300,184
|
|
$942,095
|
|
$680,685
|
|
Adjusted EBITDA
and Adjusted EBIT
|
|
EBITDA
|
$285,723
|
|
$221,721
|
|
$419,355
|
|
$300,184
|
|
$942,095
|
|
$680,685
|
Gain on sale of real
estate and businesses
|
0
|
|
0
|
|
0
|
|
(5,886)
|
|
(443)
|
|
(7,307)
|
Recovery from legal
settlement
|
(10,962)
|
|
0
|
|
(10,962)
|
|
0
|
|
(10,962)
|
|
0
|
Charges associated with
acquisitions and divestitures
|
4,193
|
|
2,608
|
|
16,476
|
|
5,037
|
|
20,938
|
|
15,233
|
Asset
impairment
|
860
|
|
5,190
|
|
10,506
|
|
5,190
|
|
10,506
|
|
5,190
|
Restructuring
charges
|
0
|
|
1,280
|
|
320
|
|
4,098
|
|
1,209
|
|
5,406
|
Adjusted
EBITDA
|
$279,814
|
|
$230,799
|
|
$435,695
|
|
$308,623
|
|
$963,343
|
|
$699,207
|
Depreciation,
depletion, accretion and amortization
|
(71,908)
|
|
(68,384)
|
|
(141,314)
|
|
(135,108)
|
|
(281,029)
|
|
(276,903)
|
Adjusted
EBIT
|
$207,906
|
|
$162,415
|
|
$294,381
|
|
$173,515
|
|
$682,314
|
|
$422,304
|
|
A reconciliation of
Non-GAAP financial measures to the equivalent GAAP financial
measures for projected results is not available without
unreasonable effort. We are unable to predict with reasonable
certainty the outcome of legal proceedings, charges associated
with
acquisitions and divestitures, impairment of long-lived assets and
other unusual gains and losses.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/vulcan-announces-second-quarter-2016-results-300306531.html
SOURCE Vulcan Materials Company