01—Abstract
Summary
Summary of the 10-Q filed May 2, 2024. Cited figures are marked; the original filing is the authoritative source.
Vulcan Materials Company's first quarter 2024 Form 10-Q shows lower revenue but slightly higher gross profit and improved unit profitability.
Total revenues were $1,545.7 milliona, down from $1,649.0 million, while gross profit rose to $304.9 million from $302.0 million. Operating earnings fell to $172.9 million from $187.2 million, and net earnings attributable to Vulcan were $102.7 million, or $0.77 per diluted share, versus $120.7 million, or $0.90 per diluted share, a year earlier. Management attributed the lower volumes to weather: aggregates shipments fell 7% to 48.1 million tons, while freight-adjusted aggregates prices rose 10.2% to $20.59 per ton and aggregates gross profit per ton rose to $6.30 from $5.86.
Balance sheet and cash flow changes were driven mainly by the redemption of $550.0 millionb of 5.80% senior notes due 2026 in March 2024. Long-term debt fell to $3,330.7 million from $3,877.3 million at December 31, 2023, and cash and cash equivalents fell to $292.4 million from $931.1 million. Net cash provided by operating activities was $173.4 million, down from $221.3 million, and dividends paid were $62.0 million.
Total debt to trailing-twelve-month Adjusted EBITDA was 1.7 times, and the company repurchased $18.8 millionc of common stock. Management reiterated its 2024 outlook of $2,150 to $2,300 million of Adjusted EBITDA and expects to spend $625 million to $675 million on maintenance and growth projects. The filing also details ongoing legal and environmental matters, including the Lower Passaic River Superfund matter, the Texas Brine matter, New York and New Jersey 1,4-dioxane cases, the Hewitt Landfill matter, and the NAFTA arbitration against Mexico following the May 2022 shutdown of Calica operations, for which the company cannot quantify any potential recovery.
02—Key points
Key Highlights
- Total revenues were $1,545.7 million, down from $1,649.0 million in Q1 2023, while gross profit increased to $304.9 million from $302.0 million.
- Net earnings attributable to Vulcan were $102.7 million, or $0.77 per diluted share, compared with $120.7 million, or $0.90 per diluted share, in the prior-year quarter.
- Aggregates shipments decreased 7% to 48.1 million tons, while freight-adjusted sales price rose 10.2% to $20.59 per ton and gross profit per ton rose to $6.30 from $5.86.
- The company redeemed $550.0 million of 5.80% senior notes due 2026 in March 2024 using cash on hand, reducing long-term debt to $3,330.7 million from $3,877.3 at year-end 2023.
- Total debt to trailing-twelve-month Adjusted EBITDA was 1.7 times (1.5 times on a net debt basis), and the company's stated long-term target range is 2.0 to 2.5 times.
- Cash and cash equivalents declined to $292.4 million from $931.1 million at December 31, 2023, and operating cash flow was $173.4 million versus $221.3 million a year earlier.
- Management reaffirmed 2024 Projected Adjusted EBITDA of $2,150 to $2,300 million and expects 2024 maintenance and growth capital expenditures of $625 to $675 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, Vulcan Materials kept $0.07.
- Revenue$1.55B100.0%
- Cost of revenue−$1.24B80.3%
- Gross profit$304.9M19.7%
- Operating costs−$132.0M8.5%
- Operating income$172.9M11.2%
- Interest, other & tax−$70.2M4.5%
- Net income$102.7M6.6%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 2, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $1.55B$1.65B | −6.3% |
| Cost of Revenue | $1.24B$1.35B | −7.9% |
| Gross Profit | $304.90M$302.00M | +1.0% |
| SG&A Expenses | $129.70M$117.30M | +10.6% |
| Operating Income | $172.90M$187.20M | −7.6% |
| Net Income | $102.70M$120.70M | −14.9% |
| EPS (Basic) | $0.78$0.91 | −14.3% |
| EPS (Diluted) | $0.77$0.90 | −14.4% |
| Shares Outstanding (Basic) | 132.40M133.20M | −0.6% |
| Shares Outstanding (Diluted) | 133.10M133.70M | −0.4% |
05—Questions
Frequently Asked Questions
How did Vulcan perform in the first quarter of 2024?
Total revenues fell 6% to $1,545.7 million, mainly due to weather-related lower aggregates shipments and the November 2023 sale of Texas concrete operations. Gross profit rose slightly to $304.9 million, and diluted EPS from net earnings was $0.77 versus $0.90, with Adjusted diluted EPS of $0.80 versus $0.95.
What drove the change in Vulcan's debt and cash position?
The company used $550.0 million of cash on hand to redeem its 5.80% senior notes due 2026 in March 2024. Total long-term debt at face value declined to $3,391.1 million from $3,941.5 million at December 31, 2023, and cash and cash equivalents decreased to $292.4 million. Interest expense, net, fell to $39.1 million from $49.0 million.
What is Vulcan's outlook for 2024?
Management said it remains on track to deliver $2,150 to $2,300 million of Adjusted EBITDA, which it described as the fourth consecutive year of double-digit growth. It expects to spend $625 million to $675 million on maintenance and growth projects in 2024 and cited a positive pricing environment.
Are there significant legal or environmental risks disclosed?
Yes. The filing describes several matters, including the Lower Passaic River Superfund matter, Texas Brine sinkhole litigation, New York water district and New Jersey 1,4-dioxane cases, the Hewitt Landfill matter, and a NAFTA arbitration against Mexico over the May 2022 shutdown of Calica. For several of these, the company says it cannot reasonably estimate a range of loss, and for the NAFTA claim it cannot quantify any potential recovery.
How much capital did Vulcan return to shareholders?
During the quarter, Vulcan returned $80.8 million to shareholders, consisting of $62.0 million in dividends ($0.46 per share) and $18.8 million in share repurchases of 70,932 shares at an average price of $265.44. As of March 31, 2024, 7,016,328 shares remained under the Board's February 2017 authorization.
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