Martin Marietta Materials, Inc. Announces 2011 Fourth-Quarter And Full-Year Results

“Another key to our strong performance in both the quarter and the full year has been our Specialty Products segment. This business continues to exceed expectations by completing a stellar year and setting new quarterly and annual records for net sales and earnings from operations. Net sales of $51.5 million increased $7.0 million, or 16%, over the prior-year quarter, reflecting growth in both the chemicals and lime product lines. Increased sales and effective cost management resulted in a 600-basis-point improvement in the business’ gross margin for the quarter. Earnings from operations were $16.3 million, a 55% increase over the prior-year quarter.

“Cost management is an enduring area of focus throughout our company. In line with that objective, direct production costs for our heritage aggregates product line increased only 1% despite an 11% increase in noncontrollable energy costs (principally diesel fuel), which reduced overall earnings by $0.05 per diluted share and was offset by reductions in personnel and depreciation costs. For the quarter, diesel fuel costs averaged $2.95 per gallon compared with $2.32 per gallon in the prior-year quarter. On a consolidated basis, our cost of sales increased 9.5% over the prior-year quarter, reflecting higher raw materials costs, including liquid asphalt, and the impact from rising energy costs.

“Our SG&A expense continues to differentiate us from others in the industry. On a consolidated basis, SG&A costs for the quarter declined $2.4 million, or 130 basis points as a percentage of net sales, primarily driven by lower pension and incentive compensation expenses. During the quarter, we also completed various restructuring activities. These actions led to $1.6 million of nonrecurring termination costs in the fourth quarter, but should reduce ongoing general and administrative expenses. Interest expense declined $3.6 million due to a higher mix of variable-rate debt, which currently bears a lower interest rate than our fixed-rate debt.

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