01—Abstract
Summary
Summary of the 10-Q filed August 8, 2024. Cited figures are marked; the original filing is the authoritative source.
Martin Marietta Materials, Inc. reported second-quarter 2024 revenues of $1,764 milliona, down from $1,821 million a year earlier, and gross profit of $517 million versus $560 million.
Earnings from operations were $398 millionb, compared with $463 million, and net earnings attributable to Martin Marietta were $294 million. Results were affected by the February 2024 divestiture of the South Texas cement business and related ready mixed concrete operations to CRH Americas Materials, Inc., and by the April 5, 2024 acquisition of 20 active aggregates operations from affiliates of Blue Water Industries LLC for $2.05 billion in cash. Revenue and gross profit declines in the quarter were attributed primarily to the divestiture and extremely wet weather in Texas, while aggregates average selling price rose 11.6% year over year.
For the six months ended June 30, 2024, revenues were $3,015 millionc and earnings from operations were $1,819 million, including a $1.3 billion pretax gain on the divestiture offset by a $50 million noncash asset and portfolio rationalization charge. Net earnings attributable to Martin Marietta were $1,339 million, or $21.66 per diluted share from continuing operations. Operating cash flow fell to $173 million from $519 million, driven largely by significantly higher income tax payments resulting from the divestiture.
Cash and cash equivalents were $109 milliond at June 30, 2024, and the company repaid $400 million of 4.250% Senior Notes on July 2, 2024. The company had $1.20 billion of unused borrowing capacity under its Revolving Facility and Trade Receivable Facility at June 30, 2024.
02—Key points
Key Highlights
- Q2 2024 revenues were $1,764 million versus $1,821 million in Q2 2023; earnings from operations were $398 million versus $463 million.
- Six-month 2024 earnings from operations were $1,819 million, including a $1.3 billion pretax gain on the South Texas cement divestiture, versus $659 million in the prior-year period.
- Six-month 2024 net earnings from continuing operations attributable to Martin Marietta were $1.3 billion, or $21.66 per diluted share, versus $7.76 per diluted share in 2023.
- The company acquired 20 aggregates operations from Blue Water Industries affiliates on April 5, 2024 for $2.05 billion in cash, with goodwill of $345 million recorded.
- Operating cash flow for the six months was $173 million, down from $519 million, mainly due to higher income tax payments tied to the divestiture.
- Aggregates average selling price was $21.61 in the quarter, up 11.6% year over year, while aggregates shipments decreased 2.8%.
- At June 30, 2024, the company had $1.20 billion of unused borrowing capacity and was in compliance with its leverage ratio covenant; $400 million of senior notes were repaid on July 2, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Martin Marietta Materials kept $0.19.
- Revenue$1.55B100.0%
- Cost of revenue−$1.10B71.1%
- Gross profit$449.0M28.9%
- Operating costs−$51.0M3.3%
- Operating income$398.0M25.6%
- Interest, other & tax−$105.0M6.8%
- Net income$293.0M18.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 8, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $1.55B$1.82B | −14.8% |
| Cost of Revenue | $1.25B$1.26B | −1.1% |
| Gross Profit | $449.00M$560.00M | −19.8% |
| SG&A Expenses | $117.00M$112.00M | +4.5% |
| Operating Income | $398.00M$463.00M | −14.0% |
| Interest Expense | $40.00M$42.00M | −4.8% |
| Net Income | $293.00M$348.00M | −15.8% |
| EPS (Basic) | $4.77$5.62 | −15.1% |
| EPS (Diluted) | $4.76$5.61 | −15.2% |
| Shares Outstanding (Basic) | 61.50M61.90M | −0.6% |
| Shares Outstanding (Diluted) | 61.60M62.10M | −0.8% |
05—Questions
Frequently Asked Questions
What drove the decline in second-quarter 2024 revenue and gross profit?
The filing attributes the decline in cement and ready mixed concrete revenues, down 37% to $261 million, primarily to the divestiture of the South Texas cement business, as well as extremely wet weather in Texas. Aggregates shipments decreased 2.8%, offset in part by pricing growth and contributions from acquired operations.
How did the South Texas divestiture and Blue Water acquisition affect results?
The February 9, 2024 sale of the South Texas cement business to CRH Americas Materials, Inc. for $2.1 billion in cash produced a pretax gain of $1.3 billion in the six months ended June 30, 2024. The April 5, 2024 Blue Water Industries LLC (BWI Southeast) acquisition for $2.05 billion added 20 aggregates operations in the East Group, and the quarter included a $20 million charge for selling acquired inventory after its markup to fair value.
What is the company's liquidity position?
At June 30, 2024, cash and cash equivalents were $109 million, down from $1,272 million at December 31, 2023. The company had $1.20 billion of unused borrowing capacity under its $800 million Revolving Facility and $400 million Trade Receivable Facility, and there were no borrowings outstanding under either. Net cash used for financing activities was $580 million in the six months, including $450 million of share repurchases.
What is the company's debt maturity profile?
Total debt was $4,347 million at June 30, 2024, including $400 million of 4.250% Senior Notes due 2024, which were repaid on July 2, 2024 using available liquidity. The filing also lists a 7% Debentures due 2025 of $125 million and several senior notes maturing from 2027 through 2051.
What did management say about the 2024 effective tax rate and shareholder returns?
The effective income tax rate for continuing operations was 25.0% for the six months ended June 30, 2024, compared with 20.9% in 2023, driven by the divestiture, which was treated as a discrete tax event. During the first six months, the company repurchased 785,758 shares for $450 million, and 11.9 million shares remained under its repurchase authorization at June 30, 2024.
06—Continue