01—Abstract
Summary
Summary of the 10-Q filed April 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Martin Marietta Materials, Inc. reported first-quarter 2024 total revenues of $1,251 milliona, down from $1,354 million in the prior-year quarter, while earnings from operations rose to $1,421 million from $196 million, driven largely by a $1.3 billion pretax gain on the February 9, 2024 divestiture of its South Texas cement business and certain ready mixed concrete operations to CRH Americas Materials, Inc. Net earnings from continuing operations attributable to Martin Marietta were $1,045 million, or $16.87 per diluted share, compared with $134 million, or $2.16 per diluted share, a year earlier.
The filing states that 2024 results included an after-tax gain of $976 millionb ($15.75 per diluted share) on the divestiture and an after-tax loss of $37 million ($0.59 per diluted share) on a $49 million noncash asset and portfolio rationalization charge. Operationally, aggregates shipments fell 12.3% to 36.6 million tons, reflecting weather and softer warehouse, office and retail construction, while aggregates average selling price rose 12.2% to $22.26. Adjusted EBITDA was $291 million versus $324 million a year earlier.
Magnesia Specialties revenues declined 3% to $81 millionc, but gross profit increased 15% to $29 million. Cement and ready mixed concrete revenues fell 22% to $265 million, with gross profit down 47% to $31 million, largely due to the divestiture. On the balance sheet, cash and cash equivalents rose to $2,648 million from $1,272 million at year-end 2023, and long-term debt was $3,947 million plus $400 million of current maturities.
After quarter-end, the company closed the acquisition of 20 aggregates operations from affiliates of Blue Water Industries LLC on April 5, 2024, for $2.05 billiond of cash on hand. The filing states that $1.20 billion of unused borrowing capacity remained under its revolving and trade receivable facilities at March 31, 2024.
02—Key points
Key Highlights
- Total revenues of $1,251 million, down from $1,354 million in Q1 2023; gross profit of $272 million versus $303 million.
- Earnings from operations of $1,421 million versus $196 million, including a $1.3 billion pretax gain on the South Texas cement divestiture and a $49 million noncash rationalization charge.
- Diluted EPS from continuing operations of $16.87 versus $2.16; the filing attributes $15.75 per diluted share to the after-tax divestiture gain.
- Aggregates shipments decreased 12.3% to 36.6 million tons; aggregates average selling price increased 12.2% to $22.26.
- Adjusted EBITDA of $291 million compared with $324 million in the prior-year quarter.
- Cash and cash equivalents of $2,648 million at March 31, 2024, up from $1,272 million at December 31, 2023.
- Acquired 20 aggregates operations from Blue Water Industries affiliates for $2.05 billion in cash, closing April 5, 2024; $1.20 billion of unused borrowing capacity remained at March 31, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, Martin Marietta Materials kept $0.99.
- Revenue$1.06B100.0%
- Cost of revenue−$806.0M76.3%
- Gross profit$250.0M23.7%
- Operating costs$1.17B110.9%
- Operating income$1.42B134.6%
- Interest, other & tax−$376.0M35.6%
- Net income$1.04B99.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 30, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $1.06B$1.35B | −22.0% |
| Cost of Revenue | $979.00M$1.05B | −6.9% |
| Gross Profit | $250.00M$303.00M | −17.5% |
| SG&A Expenses | $118.00M$104.00M | +13.5% |
| Operating Income | $1.42B$196.00M | +625.0% |
| Interest Expense | $40.00M$42.00M | −4.8% |
| Net Income | $1.04B$121.00M | +763.6% |
| EPS (Basic) | $16.92$1.96 | +763.3% |
| EPS (Diluted) | $16.87$1.95 | +765.1% |
| Shares Outstanding (Basic) | 61.80M62.10M | −0.5% |
| Shares Outstanding (Diluted) | 62.00M62.20M | −0.3% |
05—Questions
Frequently Asked Questions
What drove the large increase in earnings from operations this quarter?
The filing states that other operating income of $1.3 billion, mainly a $1.3 billion pretax gain on the February 2024 divestiture of the South Texas cement business and certain related ready mixed concrete operations to CRH Americas Materials, Inc., drove the increase, partly offset by a $49 million noncash asset and portfolio rationalization charge. Earnings from operations were $1,421 million compared with $196 million in the prior-year quarter.
How did underlying operating performance look excluding the divestiture?
Revenues fell to $1,251 million from $1,354 million, and gross profit declined to $272 million from $303 million. The filing attributes aggregates shipment declines to weather and softening warehouse, office, retail and residential construction, partly offset by pricing. Adjusted EBITDA, which excludes the divestiture gain and the rationalization charge, was $291 million versus $324 million. Consolidated SG&A rose to 9.5% of total revenues from 7.7%.
What did the company do with its cash and how much debt does it carry?
Cash and cash equivalents rose to $2,648 million at March 31, 2024, reflecting $2,107 million of divestiture proceeds. Subsequently, the company used $2.05 billion of cash on hand to acquire 20 aggregates operations on April 5, 2024. Total debt was $4,347 million, including $400 million of current maturities. The company repurchased 255,601 shares for $150 million during the quarter and paid $46 million in dividends.
Is the company in compliance with its debt covenants?
Yes. The filing states the company was in compliance with its credit agreement requirement that the ratio of consolidated net debt to trailing-twelve-month EBITDA not exceed 3.50 times at March 31, 2024. No borrowings were outstanding under the $800 million Revolving Facility or the $400 million Trade Receivable Facility at quarter end.
What is the outlook for aggregates demand by end market?
The filing reports aggregates shipments fell 6% to infrastructure, 16% to nonresidential and 17% to residential. The company noted that the value of state and local government highway, bridge and tunnel contract awards is meaningfully higher year over year. Infrastructure accounted for 34% of first-quarter aggregates shipments, nonresidential 36%, residential 24% and ChemRock/Rail 6%.
06—Continue