April 29, 2014
Martin Marietta Materials announced Tuesday that its aggregates product line shipments were up 8 percent the first quarter of 2014.
The company’s Aggregates business saw growth in most markets. Volumes to the nonresidential market represented 34 percent of quarterly shipments and were up 13 percent year over year. Volumes to the residential end-use market accounted for 15 percent of shipments for the quarter and rose 16 percent since the first quarter of last year. The ChemRock/Rail market represented 12 percent of volumes shipped in the first quarter, and volumes to the market increased 14 percent since the same period last year. Shipments to the infrastructure market comprised 39 percent of volume and were flat compared to the first quarter of 2013.
Martin Marietta Materials notes that “uncertainty remains regarding a successor federal highway bill beyond the September 30 expiration of the Moving Ahead for Progress in the 21st Century Act, or MAP-21.” The Highway Trust Fund (HTF) is expected to run out of money this summer, and the company points out that “it is generally recognized that additional revenue sources are needed.” HTF insolvency would affect shipments to the infrastructure market.
The company reported that shipments from its West Group were up by 21.5 percent in the first quarter of 2014, while shipments from its Mid-America and Southeast Groups fell 5.3 percent and 2.5 percent, respectively.
Aggregates product line pricing was down 1.3 percent for the quarter. When accounting for geographic and product mix declines, aggregate product line pricing would have increased 1 percent.
The company reported that ready mix concrete product line net sales were up 45 percent in the first quarter of the year, reflecting volume and pricing improvements of 24 percent and 9 percent, respectively. An increase in asphalt shipments resulted in a 9-percent increase in asphalt product line net sales. Weather constraints caused aggregate product line production volumes to fall 2.4 percent.
The Specialty Products business experienced a 3.9-percent increase in net sales, rising to $57.4 million in the first quarter of the year. Martin Marietta Materials attributes this growth to the chemicals product line.
The business’ gross margin of 32.7 percent fell 280 basis points. Specialty Products earnings in the first quarter were $16.3 million compared to $17.1 million a year ago.
Selling, General and Administrative Expenses (SG&A) fell $3.4 million, or 190 basis points. The company incurred $9.5 million of business development expenses related to the pending combination with Texas Industries, Inc. Adjusting for those expenses, the consolidated loss from operations was $6.4 million in the first quarter of 2014, a more than 70-percent improvement compared to the $23.3 million in consolidated from operations in the same period of 2013.
Cash provided by operating activities for the quarter was $6.6 million compared with $18.6 million in 2013. The company’s ratio of consolidated debt to consolidated EBITDA was 2.74 times.