01—Abstract
Summary
Summary of the 10-Q filed October 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Vulcan Materials Company (VMC) reported third-quarter 2024 total revenues of $2,003.9 milliona, down 8% from $2,185.8 million a year earlier, and net earnings attributable to Vulcan of $207.6 million, or $1.56 per diluted share, versus $276.5 million, or $2.07, in the prior-year quarter.
The decline was driven largely by an $86.6 millionb pretax goodwill impairment tied to a reporting unit that includes concrete operations acquired from U.S. Concrete in 2021, along with lower concrete gross profit following the November 2023 Texas divestiture. Aggregates, the core business, remained resilient on pricing: freight-adjusted selling prices rose 10.2% and aggregates gross profit per ton increased 9% to $8.63, even as aggregates shipments fell 10% to 57.7 million tons amid weather disruptions. Adjusted EBITDA was $580.6 million, down 4%, and management now expects full-year 2024 Adjusted EBITDA of approximately $2,000 million.
Balance sheet and capital returns remained solid. Total debt to trailing-twelve-month Adjusted EBITDA was 1.7 times, below the stated 2.0 to 2.5 times long-term target, and cash and cash equivalents and restricted cash totaled $434.3 millionc. Long-term debt fell to $3,329.2 million after the $550.0 million 5.80% notes were redeemed in March 2024.
Dividends were raised to $0.46d per share from $0.43, and year-to-date operating cash flow declined to $969.5 million from $1,055.2 million, mainly due to working capital changes. The company also agreed in September 2024 to acquire Wake Stone Corporation, expected to close in the fourth quarter of 2024. The filing also flags regulatory and legal developments.
In September 2024, the Mexican government ordered closure of Calica's remaining quarrying activities, and a presidential decree declared Calica's properties a Natural Protected Area, which prohibits extraction of construction materials there. Vulcan says it intends to vigorously pursue its NAFTA arbitration, with a tribunal decision expected by the end of the first quarter of 2025, though it cannot quantify any potential recovery. Legacy environmental and litigation matters, including Texas Brine and Lower Passaic River exposures, are described in Note 8 without accrual beyond amounts already recorded.
02—Key points
Key Highlights
- Third-quarter 2024 total revenues fell 8% to $2,003.9 million; net earnings attributable to Vulcan declined 25% to $207.6 million, or $1.56 per diluted share.
- An $86.6 million pretax goodwill impairment on a concrete reporting unit (acquired from U.S. Concrete in 2021) drove much of the earnings decline; Adjusted EBITDA was $580.6 million, down 4%.
- Aggregates freight-adjusted selling prices rose 10.2% and gross profit per ton increased 9% to $8.63, offsetting a 10% drop in aggregates shipments to 57.7 million tons.
- Full-year 2024 Adjusted EBITDA outlook was set at approximately $2,000 million, citing weather disruptions and reduced shipments year to date.
- Total debt to TTM Adjusted EBITDA was 1.7 times, below the 2.0 to 2.5 times long-term target; the $550.0 million 5.80% notes were redeemed in March 2024.
- Quarterly dividend increased to $0.46 per share from $0.43; the company agreed to acquire Wake Stone Corporation, expected to close in the fourth quarter of 2024.
- Mexico ordered closure of Calica's remaining quarrying and declared its properties a Natural Protected Area; a NAFTA arbitration decision is expected by the end of Q1 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Vulcan Materials kept $0.10.
- Revenue$2.00B100.0%
- Cost of revenue−$1.44B71.8%
- Gross profit$565.2M28.2%
- Operating costs−$228.1M11.4%
- Operating income$337.1M16.8%
- Interest, other & tax−$129.5M6.5%
- Net income$207.6M10.4%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 30, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $2.00B$2.19B | −8.3% |
| Cost of Revenue | $1.44B$1.59B | −9.8% |
| Gross Profit | $565.20M$591.00M | −4.4% |
| SG&A Expenses | $129.10M$143.90M | −10.3% |
| Operating Income | $337.10M$418.90M | −19.5% |
| Net Income | $207.60M$276.50M | −24.9% |
| EPS (Basic) | $1.57$2.08 | −24.5% |
| EPS (Diluted) | $1.56$2.07 | −24.6% |
| Shares Outstanding (Basic) | 132.20M133.00M | −0.6% |
| Shares Outstanding (Diluted) | 133.00M133.70M | −0.5% |
05—Questions
Frequently Asked Questions
Why did Vulcan's third-quarter 2024 earnings decline so sharply?
Net earnings attributable to Vulcan fell to $207.6 million from $276.5 million, mainly because of an $86.6 million pretax goodwill impairment on a concrete reporting unit and lower concrete gross profit, which fell $19.5 million partly due to the November 2023 Texas divestiture. Aggregates gross profit declined $10.6 million on lower shipments, though pricing and unit profitability improved.
How is Vulcan's balance sheet and leverage position?
As of September 30, 2024, total debt was $3,329.7 million and cash and restricted cash was $434.3 million. Total debt to trailing-twelve-month Adjusted EBITDA was 1.7 times, below the company's stated 2.0 to 2.5 times long-term target range, and net debt to TTM Adjusted EBITDA was 1.5 times.
What is the outlook for 2024 and 2025?
For 2024, the company now expects full-year Adjusted EBITDA of approximately $2,000 million, reflecting weather-related shipment declines. For 2025, it expects aggregates price to improve high-single digits, cash gross profit per ton to keep expanding at double-digit levels, and volume growth supported by public construction and an improving private demand environment.
What is the status of the Calica operations in Mexico?
In September 2024, Mexican authorities ordered the closure of Calica's already-suspended quarrying activities and certain port activities, and a presidential decree declared Calica's properties a Natural Protected Area that prohibits extraction of construction materials. Vulcan strongly believes these actions are arbitrary and illegal and is pursuing its NAFTA arbitration, with a decision expected by the end of Q1 2025; it cannot quantify any potential recovery.
What is the Wake Stone acquisition?
In September 2024, Vulcan entered into a definitive agreement to acquire Wake Stone Corporation, a pure-play aggregates producer in Raleigh, North Carolina, which the company says will provide more than 60 years of hard rock reserves. The closing is expected in the fourth quarter of 2024, subject to customary closing conditions.
06—Continue