Rock Products

MAY 2019

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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26 • ROCK products • May 2019 www.rockproducts.com Commenting on Q4 results, Dave Powers, CEO, said in a press release, "Adjusting for the effects of unusual weather trends during calendar 2018 and a shift in the timing of wallboard price increases and related buying activity, we estimate that the overall market demand for our building materials, notably cement and wallboard, remained in positive territory in calendar 2018, with growth rates in the low single digits. The outlook for calendar 2019 continues to be positive as the basic under- lying fundamentals of low unemployment, low interest rates, and higher wages remain favorable." This positive momentum is expected to continue in Q1 2019, supported by the following underlying market trends: • Demand resiliency in operating markets. • High capacity utilization in cement and wallboard plants which, along with sustained demand and low import threats, creates a favorable environment for cement and wallboard products. • Relatively restrained overall cost pressures for inputs. US Concrete reported record quarterly revenues, increasing 8.4% year-over-year to $370.1 million in Q4 2018. 3 Strong quarterly performance was attributed to increases in ready-mix revenues (+6%) and volume (+3%) as well as increases in aggregates revenues (+60%) and volume (+41%). Quarterly adjusted EBITDA rose 6% to $46.2 million. The robust quarterly performance was rep- resentative of their full-year results, increasing total revenues and EBITDA by 12.8% and 0.7% year-over-year, respectively. William J. Sandbrook, chairman, president and CEO, said in a press release, "Our full-year results include record highs in aggregate products and ready-mixed concrete volumes and revenues. This growth was aided by contributions from our recent acquisitions, most notably Polaris Materials Corporation. As we have indicated, Polaris continues to provide the performance we expected, although on a much more accelerated pace than we originally expected, and is contributing meaningfully to the increases in our aggregates segment." Based on the positive momentum and strong Q4 performance, revenue guidance for 2019 has been revised upward and is expected to fall between $1.5 and $1.65 billion with adjusted EBITDA of approximately $205 to $225 million. NOTABLE TRANSACTIONS Brickworks Limited to acquire Glen-Gery Corp. (November 2018, $110 Million) Brickworks (ASX:BKW) entered into a binding agreement to acquire Glen-Gery from Ibstock (LSE:IBST) at an enterprise value of $110 million, equating to 8.5x EBITDA. 4 Ibstock, a UK-based leading manufacturer of clay bricks and concrete products, has decided to divest Glen-Gery to focus on its core markets in the UK. Founded in 1890 and headquartered in Pennsylvania, Glen-Gery is a leading brick and stone manufacturer offering the market's most diverse portfolio of brick colors, sizes, and textures to commercial and residential customers. The company operates 10 manufacturing plants and 10 masonry supply centers throughout the U.S. The acquisition provides Brickworks with an ideal U.S. market entry, capitalizing on Glen-Gery's established position in its core geographic area. StonePoint Materials, LLC to acquire VantaCore Partners LP (November 2018, $205 Million) StonePoint Materials, in partnership with private equity firm Sun Capital Partners, entered into a definitive agreement to acquire VantaCore Patners at a valuation of $205 million. VantaCore operates as a leading producer of crushed stone, sand and gravel for numerous end markets. Van- taCore has over 7.6 million tons of annual production as well as several operating companies it has acquired since its founding in 2006. "The aggregates sector is highly fragmented with numerous M&A targets, and VantaCore has proved its ability to integrate strategic acquisitions," Aaron Wolfe, managing director at Sun Capital, added in a press release.⁵ Aggregate Industry Market Report Acquires

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