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» Martin Marietta Materials, Inc. Q4 2009 Earnings Call Transcript
Except to the extent required by applicable law, Martin Marietta undertakes no obligation publicly to update or revise any forward-looking statements, whether as a result of new information, future developments, or otherwise. Martin Marietta refers you to the legal disclaimers contained in our press release relating to our first quarter 2012 results and to Martin Marietta’s other filings with the Securities and Exchange Commission, which can be found on the SEC’s website.Our first quarter results reflect positive trends in both our aggregates and magnesia specialties businesses, leading us to increase our full-year guidance. Our aggregates business achieved volume and pricing improvements that resulted in expansion of heritage aggregates business gross margin by 250 basis points excluding freight and delivery revenues. Volume growth in each of our end-use markets led to a 9.6% increase in heritage aggregates product line shipments over the prior-year quarter. As expected, our pricing momentum continued and it exceeded our forecast, achieving a 2.8% improvement in average selling price for our heritage aggregates product line over the prior-year quarter. We’re also pleased with first quarter results in our recently acquired operations in the Denver, Colorado area, which benefited from heightened construction activity in the Denver market. Additionally, our Specialty Products business continues to perform well and has again established new records for both quarterly net sales and first quarter earnings from operations. Consolidated first quarter results were predictably hampered by the seasonality of our new Rocky Mountain division. This division’s better than expected performance was achieved despite almost 55 inches of Denver area snowfall this past winter. Whereas the operations along the Mississippi River that we exchanged last December are less susceptible to winter weather, the acquired Denver operations will tend to have weaker first quarter results and realize stronger earnings and cash flows later in the year. For the full year 2012, we expect this River for Rocky Mountain asset exchange to be neutral to our earnings before interest, taxes, depreciation, and amortization, or EBITDA. Importantly, we expect this acquisition to be accretive in 2013.
Our quarterly earnings also reflect expenses related to our proposed business combination with Vulcan Materials Company. Excluding the $0.34 per diluted share effect of these expenses and the $0.17 loss per diluted share of the newly acquired operations, our adjusted loss per diluted share improved 23% to $0.30 versus the first quarter of 2011’s loss per diluted share of $0.39.Our heritage aggregates product line volume growth reflects improvement in each of our reportable groups, led by a nearly 12% increase in our West Group. While our aggregates business benefited from mild winter weather in most heritage operating regions, we also saw indications of economic growth bolstering demand. As an example, our Midwest division, which primarily serves Iowa and Nebraska, reported a 34% increase in heritage aggregates product line volumes. Mild weather contributed to a nearly 100% increase in this market’s agricultural lime shipments over the prior-year quarter. Similarly, as counties and municipalities accumulated unspent snow removal funds, this money sometimes is used for roads resurfacing projects, reflecting construction activity that should be incremental for the full year. This division also experienced heightened non-residential shipments, a usually reliable sign of economic growth. As I mentioned, earlier each of our heritage end-use markets grew. The heritage non-residential end-use market led with a 17% increase in aggregates product line shipments over the prior-year quarter. This growth reflected increased shipments for repair and maintenance projects as well as energy sector activity. Heritage aggregate shipments for our residential end-use market increased 8% over the prior-year quarter, led by single-family housing activity. Growth was noteworthy in the San Antonio, Texas area, partially attributable to military base realignment and closure activity. San Antonio data also reveals that multi-family housing is currently at a 93% occupancy rate. There are also encouraging signs in markets such as Charlotte, North Carolina, where a customer who has not bid on any subdivision work in three years now has the opportunity to bid on at least five new projects.
Our heritage infrastructure end-use market increased 7% over the prior-year quarter. We are very encouraged by this growth, as this market remains constrained by uncertainties surrounding long-term federal highway funding. Recently, Congress again extended federal funding through June 30. This is the ninth short-term continuing resolution since the long-term federal transportation bill expired in September 2009. During this interim period, states have been pressed to further supplement the funding of infrastructure investment. To that end, we were gratified when the State of Texas announced plans to leverage an additional $2 billion to fund high-priority projects for the next two years.Additionally, in North Carolina, the Garden Park toll road near Charlotte is expected to be bid later this year. Also, the State of North Carolina recently received permission to collect tolls on Interstate 95 as a funding mechanism for plans to overhaul the state’s entire 182 miles of this highway. Our significant presence throughout Texas and North Carolina makes us well positioned to serve these aggregates intensive projects in both the near and longer term. Read the rest of this transcript for free on seekingalpha.com