Rock Products

AUG 2017

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

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Page 124 of 131 ROCK products • August 2017 • 123 Aggregates Industry Almanac Publicly Traded Companies optimistic about the remainder of 2017 and beyond due to increased momentum across almost our entire geographic footprint and the positive near- and medium-term outlooks expressed by our customers." Nye added, "To ensure we are prepared for the expected strong demand throughout the remainder of 2017 and 2018, we are continuing key operational initiatives, includ- ing increasing production capabilities, investing in personnel, and undertaking grading and equipment maintenance. Our focus on increased production is particularly relevant for high-demand products meeting Department of Transporta- tion specifications; this production ramp-up and increased operating leverage should favorably impact our cost struc- ture for the balance of 2017. "Consistent with the long-term nature of our business and in alignment with our strategic plan, we recently announced an agreement to acquire Bluegrass Materials Co. (Bluegrass), the largest privately-held, pure-play aggregates business in the United States, for $1.625 billion in cash," Nye concluded. "Bluegrass has a portfolio of 23 active sites with more than 125 years of strategically located, high-quality reserves in Georgia, South Carolina, Tennessee, Maryland and Ken- tucky. Bluegrass' strategic assets and impressive cost profile, combined with the depth and strength of its personnel, are a natural fit with Martin Marietta. We expect the transaction to be accretive to earnings per diluted share and cash flow in the first full year after closing, which is expected to occur in the fourth quarter of 2017, following regulatory approvals and other customary closing conditions." Summit Materials Aggregates Revenues See Healthy Increase Summit Materials Inc. announced results for the second quarter 2017. For the three months ended July 1, 2017, the company reported basic earnings per share of $0.47 on net income of $50.0 million, compared to basic earnings per share of $0.21 on net income of $13.4 million in the prior year period. Operating income increased by 75. percent to $82.4 million in the second quarter 2017, versus $46.9 million in the prior year period. "We delivered exceptional growth in net revenue, operating income and net income during the second quarter, driven by a combination of strong seasonal demand across all lines of business, together with contributions from recently completed acquisitions," said Tom Hill, CEO of Summit Materials. "Adjusted EBITDA increased 17.9 percent year- over-year to $135.2 million, supported by favorable market conditions in our West Region and in our Cement Segment. Organic growth contributed one-third of the year-over-year improvement in Adjusted EBITDA, as supported by ongoing price, volume and cost optimization initiatives at each of our operating companies. "Organic sales volumes within our materials lines of busi- ness have exceeded our expectations coming into the year," continued Hill. "Organic cement and aggregates sales vol- umes increased 7.1 percent and 6.1 percent, respectively, in the second quarter 2017, when compared to the prior year period. Cement sales volumes in our northern Mississippi River markets increased nearly 25 percent year-over-year, while aggregates demand in Texas and Utah benefited from a combination of favorable demographic trends and recent state-level funding initiatives that support multi-year invest- ments in transportation infrastructure." "Organic cement pricing increased 3.0 percent year-over- year, in-line with expectations, while organic aggregates pricing declined on a year-over-year basis due to a less favorable sales mix in our Vancouver and Austin markets, given increased sales of lower priced products. Outside of Austin and Vancouver, organic aggregates pricing increased on a year-over-year basis in nearly all of our other platform markets," stated Hill. Aggregates net revenues increased by 15.3 percent to $84.2 million in the second quarter 2017, when compared to the prior year period. Aggregates adjusted cash gross profit margin increased to 68.3 percent in the second quarter 2017, versus 63.3 percent in the prior year period. Organic aggregates sales volumes increased 6.1 percent in the second quarter 2017, due mainly to increased demand in Texas, Utah, Virginia and Vancouver. Organic aggregates aver- age selling prices declined 1.7 percent in the second quarter, due in part to an unfavorable sales mix in the Vancouver and Austin markets. Excluding the Vancouver and Austin markets, organic aggregates average selling prices increased 3.5 per- cent on a year-over-year basis. Eagle Materials Reports Strong First Quarter Eagle Materials Inc. reported financial results for the first quarter of fiscal 2018 ended June 30, 2017. The company is reporting record revenues of $366.1 million, up 23 percent. Concrete and Aggregates reported revenues for the first quar- ter of $43.5 million, an increase of 26 percent. First quarter operating earnings were $6.0 million for the first quarter, a 63 percent improvement from the same quarter a year ago, reflecting improved concrete and aggregates pricing and con- crete sales volumes. Oil and Gas Proppants reported first quarter revenues of $18.9 million, a 271 percent increase from the prior year, reflecting improved frac sand sales volumes and net sales prices. The first quarter's operating loss of $2.0 million includes depreci- ation, depletion and amortization of $7.6 million. Cement revenues for the first quarter, including joint venture

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