UPS executive joins Vulcan’s board of directors

Vulcan Materials Co. announced the election of George Willis to its board of directors, effective immediately.  Willis will serve on the audit and safety, health and environmental affairs committees of the board. Willis is the president, U.S. Operations of UPS, a global leader in logistics, offering a broad range of solutions including transporting packages and freight, facilitating international trade, and deploying advanced technology to more efficiently manage the world of business.

“We are delighted to welcome George Willis to Vulcan’s Board of Directors,” said Vulcan Materials Company Chairman and CEO Tom Hill in a press release. “George has demonstrated exceptional leadership in his over 35-year career with UPS. His extensive experience with operations and logistics in a complex global business environment will provide us with invaluable insight on matters critical to our business.”

With the addition of Willis, Vulcan’s 11-member board consists of 10 independent directors.

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.” 

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.