Higher aggregates and asphalt earnings drive Vulcan’s fourth quarter

Vulcan Materials Co. announced results for the quarter ended December 31, 2019, noting that higher segment earnings in Aggregates and Asphalt helped drive 15 percent year-over-year growth in the company’s fourth quarter earnings from continuing operations. 

Full year revenues were $4.9 billion, up 12 percent as compared to the prior year, and net earnings were $618 million, an increase of 20 percent.  Adjusted EBITDA increased 12 percent to $1.27 billion.  At year end, total debt was $2.8 billion, or 2.2 times trailing-twelve month Adjusted EBITDA.

“2019 marks another year of strong earnings growth and cash generation. We are particularly proud of our people who worked hard to achieve these results while ensuring another year of world-class safety performance,” said Tom Hill, Vulcan chairman and CEO, in a press release. “Widespread improvements in pricing helped drive 8 percent growth in our industry-leading unit profitability and double-digit growth in Adjusted EBITDA, a strong result despite some higher-than-expected costs in the fourth quarter. Industry leadership in safety and pace-setting unit margins are both evidence of our strong and healthy business. Going forward, our compounding unit margins and our disciplined capital allocation position us to increase our cash flows and improve our return on invested capital again in 2020.”

Aggregates results

Fourth quarter sales increased 10 percent, while gross profit grew 7 percent to $275 million or $5.32 per ton. Fourth quarter aggregates shipments increased 4 percent compared to the same quarter a year prior. The freight-adjusted average sales price increased 5.5 percent to $13.96. The fourth quarter was negatively impacted by higher repair and maintenance costs, geographic volume mix including higher sales volumes in rail-served remote markets, and lower tipping fees for clean fill.

For the full year, segment sales increased 14 percent, driven by volume growth of 7 percent and price growth of 5.6 percent. The freight-adjusted price per ton for the full year was $13.99. Gross profit increased 16 percent, and unit profitability grew by 8 percent to $5.32 per ton. Cash gross profit for the year was $6.74 per ton.

2020 outlook

“Looking ahead, demand in our markets will continue to benefit from higher levels of highway funding and continued growth in residential and nonresidential markets,” Hill said. “This visibility into demand growth has already set the stage for solid price improvement in 2020. Price improvement coupled with our four strategic initiatives (Commercial and Operational Excellence, Logistics Innovation and Strategic Sourcing) should continue to increase unit profitability.” 

Martin Marietta to move into new corporate headquarters

In 2021, Martin Marietta will move its corporate headquarters from 2710 Wycliff Road in Raleigh into a new office building, according to a Triangle Business Journal report. The company leased the new five-story, 125,000-square-foot GlenLake Seven office building and will be its sole tenant.

Construction began on GlenLake Seven in the first quarter of 2019 and is expected to be ready for use during the first quarter of 2021. Amenities will include a fitness facility, conference center, cafe, and activated outdoor spaces, according to the news report.

“This new building at GlenLake Seven, together with the surrounding Office Park, perfectly meets the needs of our growing business and complements our focus on enhanced efficiencies and sustainability,” Ward Nye, chairman, president, and CEO of Martin Marietta, told the Triangle Business Journal.

Michigan bill could streamline sand and gravel permits

Michigan sand and gravel producers could see streamlined permitting if S.B. 431 passes.

If passed, Michigan Senate Bill 431, sponsored by Adam Hollier (D-Detroit), would protect future development of the state’s natural resources by “prohibiting a local unit of government from preventing, prohibiting, or denying a permit, approval, or other authorization for the mining of natural resources if the natural resources were valuable and very serious consequences would not result from the extraction of the natural resources.”

Testifying before a Senate committee hearing, Kevin Cotter, general manager of Bay Aggregates, noted that some townships place unfair obstacles in the way of obtaining permits. The result is higher costs for road construction.

“We are left to spend hundreds of thousands of dollars and unnecessary time pursuing permits to remove aggregate from land that we own,” Cotter says in WUOMFM report.

Opponents, including State Rep. Gary Howell (R-North Branch), claim that bill was written by and for gravel companies. He noted that nearly 100 residents attended the hearings. “If SB 431 were to pass, these individuals would effectively have no voice at all regarding gravel mining operations in their own community,” he says. “The fight is far from over, but I intend to see it through.”

Louis Griesemer to receive Barry K. Wendt Commitment Award

The National Stone, Sand & Gravel Association (NSSGA) announced Louis Griesemer, former president and board member of Springfield Underground, will receive the 2020 Barry K. Wendt Commitment Award during NSSGA’s Annual Convention in Las Vegas, Nevada.

“We are pleased to recognize Louis with our association’s most distinguished individual award for his dedication to family and service to the aggregates industry,” said NSSGA President and CEO Michael W. Johnson in a press release. “He has shown incredible commitment to improving both the lives of those around him and the industry broadly, and we are truly grateful for his service.”

As a lasting memorial to Wendt, who exemplified extraordinary commitment to family, career and the aggregates industry, NSSGA’s Manufacturers and Services Division established the annual award in 1998 to recognize an individual in the industry who exhibits the dedication exemplified by Barry Wendt, both in commitment to the industry and the community in which they live.

Griesemer has been a leader in the aggregates industry at within NSSGA for years, including service as NSSGA’s Board Chairman in 2007.  He has been a leader on safety, which culminated in NSSGA honoring him by renaming the top safety award to be the Louis Griesemer Sterling Safety Award.

“I’m very honored to receive this award,” said Griesemer. “Barry Wendt encouraged me, as he did so many others, to actively engage in the Association.  I can only hope that I was able to encourage others in the way Barry inspired me.”

The Barry K. Wendt Commitment Award will be presented to Louis Griesemer during NSSGA’s 2020 Annual Convention on Tuesday, March 10.

Bill Sandbrook to retire as CEO of U.S. Concrete

U.S. Concrete, Inc.  announced that William J. Sandbrook notified the company’s board of directors of his decision to retire as CEO effective April 3, 2020. Sandbrook will serve as the company’s chairman of the board until the company’s annual meeting of stockholders in May 2020, when he will stand for re-election as a director at the annual meeting.

To ensure an orderly transition of his duties, Sandbrook will provide consulting services to the company pursuant to a one-year consulting agreement, which may be extended by mutual agreement.

U.S. Concrete also announced that Ronnie Pruitt, the company’s president and chief operating officer, has been named chief executive officer and president effective as of April 3, 2020.

“After 17 years in the military and 28 years in the heavy construction materials industry and in conjunction with a robust succession plan, I believe it is an opportune time for me to turn over the CEO duties to Ronnie,” said U.S. Concrete Chairman and CEO, William J. Sandbrook, in a press release. “Ronnie is well prepared to lead the company into our next phase of growth through his many years of industry experience. I am committed to working with him and the company as a strategic advisor and board member to ensure a smooth transition and continuation of our enhanced vertical integration strategy. I want to thank the board of directors for their tremendous support, insight, and encouragement over the past nine years. Together with a fantastic group of leaders and employees, we have dramatically transformed the company in the eyes of our customers, industry peers, and the investor community at large. I am humbled to have been part of this journey.” 

Sandbrook joined U.S. Concrete in August 2011 as president and chief executive officer.  He has served as a member of the board of directors since he joined the company and served as the company’s chairman since May 2018. 

“On behalf of the Board of Directors, I want to thank Bill for his significant contributions to and leadership of U.S. Concrete for the last nine years.  Under his leadership, the company evolved from a predominantly ready-mixed focused company with limited geographic footprint to a much larger company with a focus on aggregates and vertically integrated ready-mixed operations with meaningful footprints in major metropolitan areas in the United States and a large aggregates quarry in Canada servicing our West Coast operations,” said Michael D. Lundin, U.S. Concrete’s lead director. “The company’s culture is strong and reflects Bill’s pursuit of excellence and passion for the business. Bill has developed an outstanding senior leadership team to support the company and Ronnie in his new role as chief executive officer, and we are excited about the future of the company going forward.”

“I want to express my gratitude to Bill who is responsible for bringing me to U.S. Concrete as well as preparing me to lead this company during our next phase of growth and improvement,” Pruitt said. “I also want to thank the hard-working men and women of U.S. Concrete for believing in the company and working hard to deliver, manufacture, and provide quality construction materials.  I am passionate about this company, the strength of our existing assets and our ability to serve the markets we are currently in, as well as those we plan to grow in the future.  I truly look forward to this opportunity and will always appreciate the foundation that Bill built.”

Three fire departments team to rescue dog at Vulcan’s Greenwood Quarry

Greenwood City Fire and Rescue, Greenwood County Fire Rescue, and Ware Shoals Fire Rescue teamed up to rescue a puppy that had fallen to a rock ledge in Vulcan’s Greenwood quarry. Photo courtesy of Greenwood City Fire Rescue.

Earlier this month, the Greenwood City Fire Rescue executed a high angle rescue to save a young dog that had fallen into Vulcan Materials Co.’s Greenwood, S.C., quarry. The puppy was wearing a GPS collar and was located in the quarry after being missing for nearly a day. It had fallen approximately 60 feet and was trapped on a rock ledge.

The fire department reports that its Rescue 1 and Battalion 2 units responded to the rescue call, and worked with the Department of Natural Resources and Greenwood County Fire Rescue to retrieve the puppy.

Using specialized ropes and equipment rescue worker, Lt. Chris James, was lowered to the rock ledge where the dog had fallen. Once the dog was secured, Lt. James and the logs were lowered another 150 feet to a larger rock ledge.

A third fire department, Ware Shoals Fire Rescue, joined the effort with its new ladder truck. The ladder truck was set up at the quarry floor and the 107-foot ladder was then used to bring Lt. James and the dog down from the highwall.

The rescue crews nicknamed the pup “Rocky” in honor of his adventure.

Summit Materials releases fourth quarter, full year results

In 2019, Summit Materials, Inc. benefitted from increased volumes and pricing, combined with strategic acquisitions and reduced capital expenditures. For the fourth quarter, Summit reported net income of $35.7 million, compared to a net loss of $19.2 in the fourth quarter of 2018. For the year end, its net income was $59.1 million, compared to $33.9 million in 2018.

While volumes and prices grew across all lines of business in 2019, aggregates contributed the largest proportion of incremental net revenue. Summit reported operating income of $213.6 million in 2019, compared to $162.5 million in 2018, a 31.4-percent increase.

“Sustained public sector demand coupled with improved pricing contributed to margin expansion in our aggregates and product lines of business late in the quarter, resulting in the highest fourth quarter EBITDA in the company’s history,” said CEO Tom Hill in a press release. “For the full year 2019, our aggregates business delivered strong results due in part to strong performance from our East Segment.”

For the year, aggregates net revenues increased 25.6 percent to $469.7 million when compared to the prior year. The increase is attributed to higher organic volume (up 9.5 percent) and selling price (up 6.5 percent), as well as the company’s acquisition program.

“Our focus on variable cost management intensified as 2019 progressed, and we looked to offset the impact of some operational changes with better efficiency,” Hill said. “This included our ongoing efforts to implement lean processes, labor cost management practices, and purchasing improvements.”

“We were disciplined and selective on acquisitions while generating increased cash flow from operations, which combined with lower capital expenditures enabled us to lower our leverage ratio,” added CFO Brian Harris.

Looking forward, Hill noted that Summit expects continued growth in public markets, fueled by new state gas taxes, strong demand for residential housing among entry-level buyers, and non-residential market demand for low-rise commercial development and windfarm work.

Summit Materials provided 2020 capital expenditure guidance of approximately $185 million to $205 million, which includes $65 million to $80 million estimated for greenfield projects.

Martin Marietta reports strong 4th quarter, full-year 2019 results

Martin Marietta President and CEO Ward Nye noted that 2019 was another record-breaking year for revenues and profits. He attributed it to the company’s strategic priorities: safety, ethics, cost discipline, and operational excellence.

In its 25th year as a publicly held business, Martin Marietta reported strong results for 2019. “Throughout our history, we’ve positioned our business to outperform through the disciplined execution of a proven strategy and a keen, shared commitment to the world-class attributes of our business, including safety, ethics, cost discipline, and operational excellence,” said Ward Nye, president and CEO of Martin Marietta during an earnings conference call.

2019 annual results “clearly validate the importance of these strategic priorities,” he added. “We reported a much improved year-over-year fourth quarter that capped off a 12-month period of record-setting financial performance. In 2019, we once again established new records for revenues, profits, and adjusted EBITDA from improved shipments, pricing, and cost management across most of our building materials business.”

For the year, consolidated total revenues increased 12 percent to $4.7 billion. Consolidated gross profit increased 22 percent to $1.2 billion. Adjusted EBITDA increased 15 percent to nearly $1.3 billion. Diluted earnings per share were $9.74 per share, a 31-percent improvement.

“Our 2019 results mark the eighth consecutive year of growth in these financial metrics,” Nye said. “Martin Marietta’s repeated ability to translate revenue growth into increased profitability has been, and continues to be, a differentiator, as strong earnings growth drove a total shareholder return of 64 percent in 2019, more than double the S&P 500.”

Safety first

Nye underscored the numerous benefits of the company’s commitment to safety. “Safety is a core principal and the foundation of our strong financial performance,” he said. “We are proud to have achieved world-class lost-time incident rates company wide for the third consecutive year. Additionally, we’ve meaningfully improved safety performance at our legacy Bluegrass Materials operations acquired in 2018 – our company’s second-largest acquisition.

“From the boardroom to site operations, our teams have embraced our Guardian Angel and Wingman-branded safety culture. This continued commitment has elevated safety awareness across the company, reducing downtime from workplace incidents and leading to higher revenues and profitability,” he said. “Most importantly, working safely protects our employees and the more than 400 communities in which we live and work.”

Build materials results

For the full year, aggregates shipments increased 12 percent to 191 million tons and aggregates pricing rose by 4 percent. “Notably, for the first time in four years, aggregates shipments to all three primary end-use markets increased, reflecting improved strength in public and private sector spending in our markets,” Nye said.

Cement operations established new full-year records for volumes and gross profits. Shipments increased 10 percent to nearly 3.9 million tons. Pricing increased by 3 percent.

Ready-mixed concrete shipments decreased 2 percent due to weather challenges in the Southwest and Rocky Mountain regions. Prices increased “modestly.”

Asphalt shipments improved 7.5 percent, while pricing increased nearly 4 percent.

2020 expectations

“We are excited to build our momentum,” Nye said, noting the company plans to capitalize on attractive fundamentals that support sustainable and long-term construction growth in its markets. “This underscores the importance of a notion we have long articulated: Where you are matters.”

The company has positioned its business through aggregates-led expansion in high-growth mega regions.”These mega regions exhibit attractive market fundamentals, including population growth, business and employment diversity, and superior state fiscal position,” he explained. “Notably, Texas, North Carolina, Georgia and Florida will account for nearly half of our nation’s population growth between now and 2040. That is a staggering statistic in four of our top 10 states by revenue. These states are experiencing, and will likely continue to experience, a significant influx of people requiring homes, schools, offices, restaurants, and roads. In short, population growth will drive increased consumption of heavy-side building materials in key Martin Marietta-served markets for the next two decades.

“With that in mind, we are confident that construction activity in our top 10 states will continue to outpace growth nationwide,” Nye said. “The combination of strong infrastructure funding levels and healthy private sector activity is expected to drive both increased shipments and better pricing, resulting in record-level profitability for our company in 2020.

“We’re proud of our 2019 record financial results and industry-leading safety performance. We’re equally optimistic about the future of Martin Marietta. As we move forward, Martin Marietta remains committed to positioning our business to be aggregates led in high-growth geographies and aligning our product offerings to leverage strategic cement and targeted downstream opportunities,” he said. “We will continue to be disciplined in our solid strategic plan, in our team’s commitment to the world-class attributes of our business: safety, ethics, cost discipline, and operational excellence. We look forward to continuing our strong momentum in 2020 and further strengthening our foundation for long-term success.”

See the full results here.

Larkin tapped as EVP, COO at Granite Construction

Kyle T. Larkin joined Granite Construction in 1996 as an estimator and has worked his way through the company’s ranks.

Granite Construction Inc. announced the appointment of Kyle T. Larkin as executive vice president and chief operating officer. Larkin will oversee day-to-day operations and continue to be a member of its executive committee, reporting directly to James H. Roberts, president and CEO.

“Kyle is an outstanding leader with a proven track record who embodies the best at Granite. He is strategically focused, has a deep understanding of our business, and equally important, Kyle is a team builder who develops and empowers his teams and fosters a collaborative work environment,” Roberts said in a press release. “I am confident that Kyle will provide the leadership, vision, and management to optimize operations at Granite.”

Larkin joined the company in 1996 as an estimator and held positions of increasing responsibility. Most recently, he served as senior vice president and manager of the Construction Materials Operations. He holds a bachelor’s degree in construction management from California Polytechnic State University and an MBA from the University of Massachusetts, Amherst.

Wetland to be considered in Martin Marietta quarry expansion

Martin Marietta is seeking expansion of its quarry in Granite Falls, Minn., with plans to expand the operation to the west side of its property. Preliminary evaluations show the need to consider a wetland that was not designated during its earlier 1992 permit review, the Independent reports.

Jolene Johnson, from the Yellow Medicine County planning and zoning office told county commissioners she anticipates a much more extensive permitting process than a typical zoning decision, the news outlet says. She explained that her office will work with Martin Marietta officials and the DNR to complete an environmental assessment worksheet (EAW) which will, in turn, determine if an environmental impact study (EIS) is needed.

According to the Independent, Johnson told commissioners that the wetland at the quarry has already been impacted by man-made activities in the past. “It’s already been altered, she said. “That’s part of what has to be considered. There will be information and public comments as part of the EAW, and that will help to determine whether or not there’s a need for an EIS.”

If an EIS is needed, Johnson said it could delay plan for expansion.