RALEIGH, N.C., Feb. 09, 2021 (GLOBE NEWSWIRE) -- Martin Marietta Materials, Inc. (NYSE: MLM), a leading national supplier of aggregates and heavy building materials, today reported results for the fourth quarter and year ended December 31, 2020.

Highlights include:

1. Products and services revenues include the sales of aggregates, cement, ready mixed concrete, asphalt and Magnesia Specialties products, and paving services to customers, and exclude related freight revenues.
2. Total revenues include the sales of products and services to customers (net of any discounts or allowances) and freight revenues.
3. Full-year 2020 earnings from operations and Adjusted EBITDA included $69.9 million of gains on surplus land sales and divested assets. These gains are nonrecurring in nature.
4. Full-year 2020 net earnings attributable to Martin Marietta and earnings per diluted share included $54.1 million, or $0.87 per diluted share, of gains on surplus land sales and divested assets. These gains are nonrecurring in nature.
5. Earnings before interest; income taxes; depreciation, depletion and amortization; and the earnings/loss from nonconsolidated equity affiliates, or Adjusted EBITDA, is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings attributable to Martin Marietta.

Ward Nye, Chairman and CEO of Martin Marietta, stated, “In every respect, 2020 was extraordinary for Martin Marietta as we addressed and overcame challenges that were inconceivable a year earlier. Our resilient business model and team’s commitment to Martin Marietta’s vision and strategic priorities enabled us to achieve record fourth-quarter results and deliver record full-year profitability and the best safety performance in our Company’s history.

“We are proud to extend our track record of financial and operational excellence despite the COVID-19 pandemic. Notably, 2020 marked our ninth consecutive year of growth for products and services revenues, gross profit, Adjusted EBITDA and earnings per diluted share. For the fourth quarter, we established new records for revenues and Adjusted EBITDA and expanded consolidated gross margin 410 basis points to 27.6 percent, driven by shipment growth, pricing gains and disciplined cost management across the business. These record-setting results underscore the thoughtful development and successful execution of our Strategic Operating Analysis and Review (SOAR) plan.

“As we move forward, we believe underlying demand fundamentals will reset, establishing 2021 as the year during which the nation regains its economic footing. While degrees of macroeconomic uncertainty will persist, our 2021 outlook is supported by the widespread shipment and pricing strength seen during the fourth quarter. We anticipate single-family housing growth, expanded infrastructure investment and notable heavy industrial projects of scale will support the Company’s near-term shipment levels. We expect these demand drivers, combined with the ancillary construction necessary for housing community buildouts and the potential increased infrastructure investment from a comprehensive federal surface transportation package, should provide for multi-year growth in product demand.”

Mr. Nye concluded, “With a collective commitment to our strategies, disciplined pricing and operational excellence, Martin Marietta has built a strong foundation for continued success. Today, Martin Marietta is uniquely well-positioned, geographically, financially and otherwise, to capitalize on the emerging growth trends that are expected to support steady and sustainable construction activity over the long term. We remain confident in our Company’s prospects for continued sustainable growth and superior shareholder value creation in 2021 and beyond.”

Fourth-Quarter Operating and Financial Results

(All comparisons are versus the prior-year fourth quarter unless noted otherwise)

Building Materials Business

The Building Materials business achieved record fourth-quarter revenues and gross profit. Products and services revenues of $1.05 billion increased 8.3 percent and product gross profit of $298.7 million increased 25.1 percent.

During the quarter, the Building Materials business experienced notable improvements in product demand, which benefitted from strong residential construction activity and milder weather conditions that extended the construction season. Consistent with management’s expectations, pricing remained resilient with growth in all product lines.

Aggregates

Fourth-quarter aggregates shipments grew 3.0 percent compared with the prior-year quarter. Aggregates pricing increased 3.5 percent on both a reported and mix-adjusted basis.

By segment:

• East Group shipments increased 3.1 percent, reflecting strengthening demand in North Carolina, Georgia, Florida and Indiana that more than offset reduced midwestern wind energy construction activity. Pricing increased 6.0 percent, or 3.6 percent on a mix-adjusted basis, with solid improvements in both the East and Central divisions and aided by favorable geographic mix.
• West Group shipments increased 2.8 percent, driven by housing activity and large heavy industrial projects that more than offset reduced energy-sector demand. Pricing decreased 1.3 percent, reflecting a lower percentage of higher-priced commercial rail-shipped volumes in Texas that offset robust underlying pricing gains. On a mix-adjusted basis, West Group pricing increased 3.2 percent.

Fourth-quarter aggregates gross profit per ton shipped improved 17.9 percent and product gross margin expanded 370 basis points to 30.7 percent, driven by higher shipment levels, strong pricing gains and lower production costs, including diesel fuel and contract services.

Cement

Cement shipments increased 11.7 percent to 1.1 million tons, a fourth-quarter record. This growth reflected robust underlying demand in North and South Texas that more than offset reduced energy-sector activity. Pricing improved 0.5 percent, as lower sales of higher-priced oil-well specialty cement products into West Texas disproportionately impacted overall pricing growth. On a mix-adjusted basis, cement pricing increased 3.0 percent. The cement business achieved record product gross margin of 44.5 percent, an 850-basis-point expansion, driven by improved kiln reliability from prior-period investments, lower fuel costs and the timing of planned kiln outages.

Downstream businesses

Ready mixed concrete shipments increased 17.0 percent, or 18.5 percent excluding the impact of acquired operations and fourth-quarter 2019 shipments from the Arkansas, Louisiana and Eastern Texas concrete business, generally known as ArkLaTex, that was divested in January 2020. Shipment improvements were widespread in both Texas and Colorado. Geographic and product mix limited pricing growth to 0.3 percent. Product gross margin improved 140 basis points to 8.7 percent, driven primarily by higher shipments and reduced fuel costs that more than offset higher raw material costs.

Colorado asphalt shipments increased 18.8 percent versus a weather-challenged prior-year quarter and pricing increased 3.5 percent. Asphalt and paving products and services gross margin improved 30 basis points.

Magnesia Specialties Business

Magnesia Specialties fourth-quarter product revenues increased 11.5 percent to $56.8 million, reflecting improved demand for chemicals and lime products. Higher revenues, combined with disciplined cost control, resulted in a 430-basis-point expansion in product gross margin to 42.8 percent.

Consolidated

During the fourth quarter of 2020, the Company incurred $1.1 million in COVID-19-related expenses for enhanced personal protective equipment, as well as cleaning and sanitizing protocols across its operations, which were recorded in selling, general and administrative expenses.

Other nonoperating expenses, net, for fourth-quarter 2020 included $5.9 million to finance third-party railroad maintenance in exchange for a federal income tax benefit of $7.3 million.

Cash Generation, Capital Allocation and Liquidity

Cash provided by operating activities was $1.05 billion, an all-time record, in 2020 compared with $966.1 million in 2019.

Cash paid for property, plant and equipment additions was $359.7 million.

Through dividend payments and share repurchases, the Company returned $190.3 million to shareholders in 2020 and more than $1.8 billion since announcing a 20 million share repurchase authorization in February 2015. The Company temporarily paused share repurchases in March 2020 in light of the COVID-19 pandemic. The potential resumption of repurchase activity remains subject to management’s discretion.

The Company had $304.4 million of cash, cash equivalents and restricted cash on hand and nearly $1.1 billion of unused borrowing capacity on its existing credit facilities as of December 31, 2020.

Full-Year 2021 Outlook

Martin Marietta remains confident that favorable pricing dynamics will continue, supported by the Company’s locally-driven pricing strategy, and attractive underlying fundamentals and long-term secular growth trends in its key geographies remain intact, particularly as the U.S. economy stabilizes and recovers.

Martin Marietta’s 2021 guidance excludes any benefit from additional fiscal stimulus or relief funds beyond those already enacted as well as any benefit from a potential successor federal surface transportation bill.

    * Guidance range represents the low end and high end of the respective line items provided above.

1. Consolidated products and services revenues exclude $320 million to $340 million related to estimated interproduct sales and exclude freight revenues.
2. Adjusted EBITDA is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings attributable to Martin Marietta.
3. Volume % growth range is for total aggregates shipments, inclusive of internal tons, and is in comparison with total 2020 shipments of 186.5 million tons.
4. ASP % growth range is in comparison with 2020 ASP of $14.77 per ton.

About Martin Marietta

Martin Marietta, a member of the S&P 500 Index, is an American-based company and a leading supplier of building materials, including aggregates, cement, ready mixed concrete and asphalt. Through a network of operations spanning 27 states, Canada and The Bahamas, dedicated Martin Marietta teams supply the resources necessary for building the solid foundations on which our communities thrive. Martin Marietta’s Magnesia Specialties business provides a full range of magnesium oxide, magnesium hydroxide and dolomitic lime products. For more information, visit www.martinmarietta.com or www.magnesiaspecialties.com.