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Martin Marietta Materials Annual Report, Year Ended Dec 31, 2003

Filing Date
Filed March 15, 2004
Period End
December 31, 2003
Security
MLM
In the record · 2016–202610-K1210-Q328-K141

MLM filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 141 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Jun ’17Jun ’17
  2. Leadership change8-K · Jul ’19Jul ’19
  3. Material agreement8-K · Dec ’21Dec ’21
  4. Material agreement8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed March 15, 2004. Cited figures are marked; the original filing is the authoritative source.

Martin Marietta Materials, Inc. (the "Company") describes itself as the second largest producer of aggregates for the construction industry in the United States, with a smaller Specialty Products segment that makes magnesia-based chemicals, dolomitic lime, and developing structural composite products.

In 2003, Aggregates accounted for 94% of total net sales and Specialty Products for 6%. The Company shipped approximately 192 million tons of aggregates in 2003 across 31 states, Canada and the Bahamas, generating aggregates net sales and earnings from operations of $1.4 billiona and $185 million, respectively. Consolidated net sales were $1.50 billion in 2003, up from $1.43 billion in 2002, and net earnings were $93.6 million, or $1.91 per diluted share, after a $6.9 million cumulative effect charge from adopting FAS 143.

Earnings before that cumulative effect were $100.5 millionb, or $2.05 per diluted share. The filing highlights a business tied closely to public infrastructure. About 46% of Aggregates shipments went to highway and public infrastructure projects, and the Company notes that the federal highway bill (TEA-21) expired on September 30, 2003, with the program running under a continuing resolution at $33.6 billion for fiscal 2004.

The Company also flags exposure to weather, fuel and freight costs, and a shift toward rail and water distribution that embeds freight costs and lowers gross margin. Gross margin was 20.5% in 2003 versus 20.6% in 2002. Management's Outlook 2004 expects aggregates shipments to rise 1% to 3% and pricing to rise 1.5% to 2%, with diluted earnings per share between $2.30c and $2.60.

Balance sheet and cash flow improved during 2003. Operating cash flow rose to $277.2 milliond from $203.6 million, cash ended at $125.1 million, and total debt declined to $718.1 million from $744.9 million.

The debt-to-capitalization ratio, net of cash and swaps, fell to 34% from 40%. The Company repurchased 331,100 shares for $15.0 million and paid dividends of $0.69 per share, and it made a $32.0 million voluntary pension contribution in January 2004.

02—Key points

Key Highlights

  1. Net sales of $1.50 billion in 2003, up from $1.43 billion in 2002; total revenues were $1.71 billion.
  2. Net earnings of $93.6 million, or $1.91 per diluted share, including a $6.9 million ($0.14 per share) cumulative effect charge from adopting FAS 143; earnings before that charge were $2.05 per diluted share.
  3. Aggregates segment made up 94% of 2003 net sales; approximately 192 million tons shipped to 31 states, Canada and the Bahamas.
  4. Operating cash flow increased to $277.2 million from $203.6 million; cash and equivalents rose to $125.1 million from $14.5 million.
  5. Total debt fell to $718.1 million from $744.9 million; debt-to-capitalization, net of available cash and swaps, improved to 34% from 40%.
  6. About 46% of Aggregates shipments were to highway and public infrastructure projects; TEA-21 expired September 30, 2003, and the federal program is operating under a continuing resolution at $33.6 billion for fiscal 2004.
  7. Outlook 2004 projects aggregates shipments up 1% to 3%, pricing up 1.5% to 2%, and diluted EPS of $2.30 to $2.60, with structural composites sales of $15 million to $30 million.

03—Questions

Frequently Asked Questions

  1. What does Martin Marietta Materials do and how is the business split?

    The Company is the second largest U.S. producer of construction aggregates. Its Aggregates segment represented 94% of 2003 net sales. The Specialty Products segment, at 6% of sales, makes magnesia-based chemicals and dolomitic lime and is developing structural composite products.

  2. How did the Company perform financially in 2003?

    Net sales rose to $1.50 billion from $1.43 billion. Earnings from operations were $185.1 million, and net earnings were $93.6 million, or $1.91 per diluted share. Earnings before the FAS 143 cumulative effect were $2.05 per diluted share, compared with $2.00 in 2002 before its cumulative effect.

  3. What are the main risks to aggregates demand?

    Demand depends on construction spending, which is cyclical and tied to interest rates and public funding. Public infrastructure is a large share of shipments (46%), so the lapse of TEA-21 and the pace of a successor federal highway bill matter. Weather, hurricanes on the Gulf and Atlantic coasts, fuel costs and the rising use of rail and water distribution, which embeds freight costs and lowers margins, are also cited.

  4. What does management expect for 2004?

    Management is cautiously optimistic. It expects aggregates shipments to rise 1% to 3% and pricing to rise 1.5% to 2%, with diluted EPS of $2.30 to $2.60. Structural composites sales are projected at $15 million to $30 million, with breakeven earnings. Capital expenditures are expected to be about $140.0 million, and the Company plans to keep focusing on the balance sheet.

  5. How strong is the balance sheet and how is cash being used?

    Shareholders' equity grew to $1.13 billion, and total debt fell to $718.1 million. Cash rose to $125.1 million. The Company paid $33.7 million in dividends ($0.69 per share), repurchased $15.0 million of stock, and made a $32.0 million voluntary pension contribution in January 2004. Its senior unsecured debt is rated A- by S&P and A3 by Moody's.

04—Continue

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