Martin Marietta reports quarterly sales records

By |  February 9, 2016

martin marietta logoMartin Marietta Materials Inc., which released its fourth-quarter and 2015 year-end performance report, established quarterly company records for net sales and profitability.

According to Ward Nye, chairman, president and CEO of Martin Marietta, strong pricing, disciplined execution of the company’s strategic plan and steady growth in general construction activity drove the company’s sales.

“Notably, all segments in the aggregates business delivered increased net sales and gross profit, while expanding gross profit margin,” Nye says. “We exceeded our incremental gross margin target for heritage Martin Marietta businesses, as well as on a consolidated basis.”

Martin Marietta’s West Group led the company’s gross profit margin expansion with a 630-basis-point improvement. This was largely the result of strong pricing and realized synergies from the Texas Industries acquisition, Nye says.

The marks were achieved despite heighted and sustained adverse weather trends that constrained shipments and efficient production, he adds.

“The National Oceanic and Atmospheric Administration has tracked precipitation levels for 121 years, and the fourth quarter was the wettest, at both the national level and in our key states of Texas, North Carolina and South Carolina, in their history,” Nye says. “Similarly, Iowa and Georgia experienced their second- and third-wettest-recorded periods, respectively. These conditions significantly constrained construction and related activity, which led to lower-than-expected shipment and production volumes during the quarter.

“However, our unrelenting focus on operational excellence and cost discipline, coupled with strong pricing in the aggregates business, led to attractive margin expansion and earnings growth,” Nye adds.

For the year, Martin Marietta achieved record net sales and profitability, as well as an expanded consolidated gross profit margin by 260 basis points.

“We invested strategic capital in our business, completed several bolt-on acquisitions and returned nearly $630 million to shareholders through dividends and share repurchases,” Nye says.

“We continue to execute against our strategic objective of securing and solidifying leading market positions in economically diverse, high-growth areas,” he adds. “To that end, in November 2015, and last week, we closed two acquisitions near Colorado Springs, Colo., that complement our position in metro-Denver and northern Colorado, collectively the Front Range.”

According to Nye, the two acquisitions add nearly 1 billion tons of aggregate reserves to the company’s portfolio.

“These will serve as a high-quality source of construction aggregates to a market transitioning from rapidly depleting alluvial reserves,” he says. “Coupled with our existing operations, these transactions secured an estimated 100 years of aggregates reserves in the Front Range.”

For 2015, Martin Marietta’s shipments to the infrastructure market increased 5 percent. The growth reflects state-level funding initiatives positively impacting Texas, Iowa, Georgia and Florida, the company says. Major infrastructure activity is accelerating at the state level, it adds.

According to Martin Marietta, the nonresidential market represented 32 percent of fourth-quarter and full-year aggregate product line shipments and increased 3 percent for 2015. Light nonresidential construction increased about 27 percent for the year, following growth in residential demand that was driven by construction activity across the market areas in which Martin Marietta resides. This offset a reduction in direct energy shipments into the shale fields, the company says.

For the year, Martin Marietta shipped 3.6 million tons to shale fields compared with 7.5 million tons in 2014.

In the residential market, Martin Marietta’s end-use market aggregates product line shipments increased 20 percent in 2015. The increase reflects the continued steady recovery of residential investment.

Aggregate product line shipments to the ChemRock/Rail market increased 9 percent in 2015. Heritage aggregates product line shipments increased 2 percent for both the fourth quarter and 2015.

“I am very pleased with our 2015 performance and achievements, notwithstanding the extraordinary weather challenges that temporarily suppressed our growth trajectory,” Nye says.

Learn more about Martin Marietta’s outlook for 2016 here.

Photo: Martin Marietta

Kevin Yanik

About the Author:

Kevin Yanik is the editor-in-chief of Pit & Quarry magazine. Yanik can be reached at 216-706-3724 or kyanik@northcoastmedia.net.

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