Martin Marietta Materials, Inc. has released its report for the third quarter of this year, which ended on 30 September 2014. During the period, consolidated net sales reached US$917.9 million, compared to US$600.5 million in 3Q13.
The company completed its acquisition of Texas Industries, Inc. (TXI) in July 2014, which includes cement, ready-mixed concrete and aggregates operations in the US. The purchased assets contributed US$274 million in net sales and US$44.5 million in adjusted gross profit in 3Q14, excluding a one-time US$11 million increase in the cost of sales of acquired inventory that was written up to fair value as part of accounting for the acquisition. The cement business, which comprises production plants in Midlothian – Texas, Hunter – Texas, and Oro Grande – California, contributed US$110 million in net sales and US$27.9 million in adjusted gross profit.
During the quarter, the company’s heritage aggregates product line saw volumes increase by 2.7% y/y. Around 47% of shipments were to the infrastructure market, with shipments in this area rising by 3% y/y. The non-residential market accounted for 30% of shipments during the quarter, up 3% y/y. Shipments to the residential end-use market improved by 9% y/y, representing 14% of shipments. The ChemRock/Rail market accounted for 9% of volumes, down 9% y/y. The heritage ready-mixed concrete product line experienced a 17% y/y increase in volumes and a 14% y/y rise in pricing. The specialty products business segment achieved record net sales of US$58.7 million, 5.2% higher than the corresponding period in 2013.
“Third quarter 2014 results reflect the acquisition of Texas Industries, Inc. (TXI), the benefits of our larger presence in the western United States, continued growth and enhanced profitability across our heritage business, and our disciplined approach to cost,” commented Ward Nye, Chairman, President and CEO of Martin Marietta.
“The acquisition of TXI added US$274 million of net sales and, even in advance of full integration and realisation of significant synergies, contributed US$44.5 million of gross profit, excluding the one-time increase in cost of sales for acquired inventory. Based on our evaluation to date, we expect to surpass our stated target of US$70 million in annual synergies prior to 2017. This transformational acquisition, when combined with our solid heritage business, creates a strong and broad foundation for dynamic revenue and profit growth in 2015 and beyond, positioning Martin Marietta to capitalize on increasing demand for building materials.”
“In addition to aggregates and ready-mixed operations, the TXI acquisition provided us with a leading position in the Texas cement markets as well as a state-of-the-art, rail-located cement plant in Southern California. Driven by a sold-out Texas market, cement made a solid contribution to our quarterly earnings, as volumes increased 16% in the third quarter compared with the three months ended 31 August 2013, when Martin Marietta did not yet own the business,” added Nye.
Adapted from press release by Louise Fordham
Read the article online at: https://www.worldcement.com/the-americas/30102014/martin-marietta-3q14-results-highlights-771/