Rock Products

AUG 2019

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56 • ROCK products • August 2019 www.rockproducts.com Aggregates Industry Almanac Publicly Traded Companies Vulcan's Aggregates Shipments Up 13% for Quarter Vulcan Materials Co. announced results for the quarter ended March 31. Total revenues were $996.5 million, com- pared to $854.5 million in the first quarter of 2018. Net earnings were $63 million and Adjusted EBITDA was $193 million in the first quarter. The 15% growth in Adjusted EBITDA was driven by strong aggregates shipments, up 13% year-over-year, and a 5.4% increase in aggregates pricing. First-quarter aggregates segment gross profit increased 25% to $186 million, or $4.07 per ton. As a percentage of segment sales, gross profit margin expanded 100 basis points due to strong growth in shipments and price improvements. Trailing 12-month same-store incremental gross profit flow- through rate was 57%, which is in line with longer-term expectations of 60%. As a reminder, quarterly gross profit flow-through rates can vary widely from quarter to quar- ter; therefore, the company evaluates this metric on a trailing 12-month basis. First-quarter aggregates shipments increased 13% (11% on a same-store basis) versus the prior-year quarter. Solid underlying fundamentals and pent-up demand carried over from last year helped drive shipment growth across most of the company's footprint. In California, shipments decreased by double-digits due to record rainfall throughout most of the quarter. A strong demand environment, driven by transportation-related con- struction as well as growth in the company's project-related bookings, support its expectations for shipment growth in California in 2019. Price growth was positive across all markets served by the company. For the quarter, freight-adjusted average sales price for aggregates increased 5.4% versus the prior-year's quarter. Excluding mix impact, aggregates price increased 5.8% com- pared to the prior-year first quarter. Pricing was particularly strong in Arizona, California, Georgia, Tennessee and Texas. Positive trends in backlogged project work along with demand visibility and customer confidence support continued upward pricing movements. First quarter same-store unit cost of sales (freight-adjusted) increased 3% compared to the prior-year quarter due in part to planned higher repair and maintenance costs in advance of the construction season. Unit cost of sales in California was negatively impacted by record rainfall. The company remains focused on compounding improvements in unit margins throughout the cycle through fixed cost leverage, price growth and operating efficiencies. Tom Hill, chairman and chief executive officer, said, "Our first quarter results represent a good start to the year and are consistent with our full-year expectations. Broad-based ship- ment growth, compounding price improvements and solid operating efficiencies in our aggregates business contributed to 17% growth in total revenues and 29% growth in operat- ing earnings. These results demonstrate the strength of our unique aggregates-centric business model. "Aggregates segment gross profit increased from $3.66 per ton to $4.07 per ton. This double-digit improvement in first quarter unit profitability builds on last year's results, and we are well positioned for further gains in our industry-leading unit profitability. "Our key markets are benefitting from both robust growth in public construction demand and continued growth in private demand. Leading indicators, such as construction award activity, signal broad-based shipment growth across our footprint. Aggregates pricing momentum continues to improve – consistent with our full-year expectations. As a result, we reiterate our full-year expectations for 2019 earn- ings from continuing operations of between $4.55 and $5.05 per diluted share and Adjusted EBITDA of between $1.250 and $1.330 billion." Martin Marietta Achieves Record First-Quarter Results Martin Marietta Materials Inc. reported record results for the first quarter ended March 31, 2019. Total revenues were $939 million versus $802 million in the first quarter of 2018. First-quarter heritage aggregates volume and pricing improved 12.5% and 4.0%, respectively. Shipments for the Mid-America Group heritage operations increased 18.4%, primarily driven by infrastructure, com- mercial and residential projects in the Carolinas. Heritage pricing improved 3.1% despite unfavorable product mix from increased shipments of lower-priced base stone in 2019. Publicly Traded Companies The Aggregates Industry's Publicly Traded Companies Reported First-Quarter Results.

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