Rock Products

JUN 2019

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16 • ROCKproducts • June 2019 www.rockproducts.com IN THE KNOW FAST FACT Granite's Materials group revenue was $41.6 million, compared with $45.7 million last year. bodes well for our key construction markets in calendar 2019. We are confident that we will continue to produce industry-leading margins and generate significant cash flow, and our ongoing strategic portfolio review will ensure that Eagle's inher- ent value is appropriately reflected in the marketplace." Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, and joint venture and intersegment cement revenue, declined 1% to $795.5 million in fiscal year 2019. Heavy Materials operating earnings for the fiscal year were $177.6 million, a decline of 10%. The decline in its Heavy Materials reve- nue and operating earnings was driven primarily by unusually wet weather throughout the year, which hampered sales volume, and by increased mainte- nance costs partially offset by improved cement and concrete average net sales prices. Revenue from Cement, including joint venture and intersegment revenue, increased 1% to $656.8 million for the full fiscal year. Fiscal 2019 operating earnings from cement were $164.8 million, a decline of 8%, reflecting increased maintenance costs partially offset by improved pricing. Cement revenue for the quarter, including joint venture and intersegment revenue, was down 2% to $113.1 million. Operat- ing earnings from cement for the fourth quarter were $22.7 million, 8% below the same quarter a year ago. The revenue and earnings decline was caused primarily by reduced sales volume due to persistently wet weather in many of its markets and was partially offset by improved average net cement sales prices. Cement sales volume for the quarter was down 2% to 928,000 tons. The average net sales price for the quar- ter improved slightly to $109.15 per ton. Fiscal 2019 revenue from Concrete and Aggregates declined 11% to $138.8 mil- lion. Concrete and Aggregates reported fiscal 2019 operating earnings of $12.9 million, down 28%. Persistently wet weather in its Austin market was the primary driver of the revenue and earnings decline. Concrete and Aggregates revenue for the fourth quarter of 2019 was $28.5 million, a decrease of 7%. Fourth quarter operating earnings were $2.2 million, a 20% decline, reflecting lower sales volume partially offset by improved concrete pricing. Its primary concrete and aggregates markets expe- rienced heavier rainfall than typical during the quarter, which hampered its ability to move product. Eagle's Oil and Gas Proppants segment reported fiscal 2019 revenue of $83.0 million, a decrease of 16%, primar- ily reflecting lower average net sales prices partially offset by a 6% increase in Frac Sand sales volume. The fiscal 2019 operating loss was $28.7 million compared with an operating loss of $6.1 million in the prior year. Eagle's Oil and Gas Proppants segment reported fourth quarter revenue of $17.7 million, a decline of 43%, pri- marily reflecting a 41% decrease in average Frac Sand sales prices. The fourth quarter's operating loss of $9.1 million includes depreciation, depletion and amortization of $6.9 million. During the second half of the fiscal year, demand for its frac sand product was increasingly affected by indus- try-wide reduced completion budgets. In addition, pricing pressure resulted from a combination of low demand and increased use of local in-basin sand with lower logistics cost. Faced with these dynamics, which are not expected to recover in the near term, the company recorded long-lived asset and goodwill impairments during the quarter of $213.4 million and $6.9 mil- lion, respectively. Granite Construction Inc. reported a net loss of $34.6 million for the quar- ter ended March 31, compared to a net loss of $11.4 million in the first quarter of 2018. Revenue increased to $619.8 million, compared with $563.4 million last year. Granite's Materials group revenue was $41.6 million, compared with $45.7 million last year. Gross loss increased to $3.8 million, compared to $2.5 mil- lion last year, due to inclement weather that kept most plants idle during the first quarter. "Unusually cold and wet weather across the United States in 2019 negatively impacted Granite's first quarter opera- tions, but it has not dampened demand," said James H. Roberts, president and chief executive officer of Granite Con- struction. "Public- and private-market demand remains strong across Gran- ite's end markets. The company's continued focus on bidding discipline and end-market diversification resulted in improved positioning for 2019. "These projects comprise an increas- ingly strategic portfolio of 'stored energy' for the company," Roberts con- tinued. "Across the enterprise, project demand points to significant opportuni- ties for both near- and mid-term growth opportunities for all segments of our business. We continue our focus on bid- ding strategies, balancing pricing and project win rates, and positioning our teams to expand Granite's platforms for growth in the Transportation, Water, Specialty and Materials segments." Weather Hampers Granite Construction's First Quarter

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