“Pricing momentum in the Aggregates business continued with each of our product lines reporting growth. Importantly, for the third quarter in a row, each of our reportable segments achieved pricing improvement in the aggregates product line, enabling us to achieve an overall increase of 2.3%. Our vertically integrated businesses also achieved pricing growth, with the ready mixed concrete and asphalt product lines reporting increases of 7.0% and 1.6%, respectively.
“We were pleased to leverage our sales growth into a 70-basis-point expansion of consolidated gross margin (excluding freight and delivery revenues). In fact, we achieved gross margin improvement in each of our Aggregates business’ three reportable segments, with the Southeast and West Groups each reporting a 200-basis-point expansion. Growth in the Mid-America Group was led by the Mid-Atlantic Division, which once again leveraged an increase in aggregates shipments into an incremental gross margin (excluding freight and delivery revenues) exceeding our publicly stated expectations.
“SG&A expenses were 6.2% of net sales, a 20-basis-point increase compared with the prior-year quarter. On an absolute basis, SG&A expenses increased $5.0 million, in part due to higher pension and an information systems upgrade we successfully completed in October. Our implementation team did an outstanding job on this multi-year project while maintaining disciplined focus on their recurring responsibilities.
“In July, we completed an acquisition of three aggregates quarries in the greater Atlanta, Georgia, area. This transaction added over 800 million tons of permitted aggregates reserves, which enhances our long-term position in this market. The integration of these locations is complete, and we look forward to the contributions from these quarries.“Specialty Products continued its strong performance and generated record third-quarter net sales of $55.8 million, a 13% increase over the prior-year quarter. Sales growth was attributable to the dolomitic lime product line, reflecting the contribution from the Woodville kiln that became operational during the fourth quarter of 2012. While margins were negatively affected by a planned kiln outage for maintenance and higher coal costs, the business generated a third-quarter record $17.3 million in earnings from operations.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts