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Martin Marietta Materials Reports Record Results


Martin Marietta Materials Inc. reported record results for the fourth quarter and full year 2016. For the fourth quarter of 2016, Martin Marietta achieved net sales of $889.0 million compared with $780.8 million in the 2015 fourth quarter; EBITDA was $229.7 million compared with $204.4 million; and earnings per diluted share were $1.55 compared with $1.26.

For the full year, net sales were $3.58 billion compared with $3.27 billion in 2015; EBITDA was $971.6 million compared with $750.7 million; and earnings per diluted share were $6.63 compared with $4.29, up nearly 55 percent.

Ward Nye, chairman, president and CEO of Martin Marietta, stated, “As demonstrated by our fourth-quarter and full-year results, we continue to capitalize on the economic recovery occurring in virtually all of our segments and geographies. We delivered record net sales, gross profit, net earnings and earnings per diluted share for both the fourth quarter and full year – building on the record results delivered in 2015 and the first three quarters of 2016. Looking ahead, we expect continued and accelerating growth in all three of the company's primary construction end-uses, and our leading market positions will allow us to continue benefitting from these opportunities in 2017 and beyond. We are highly confident that a durable, multi-year construction recovery is now underway, consistent with third-party forecasts.

"We are encouraged by the emerging bipartisan dialogue in Washington regarding the need for substantial investment in our nation's infrastructure,” Nye continued. “We believe the new administration and Congress should ensure increased, sustainable infrastructure funding commensurate with the nation's clear, underlying needs. While the specific terms and timing of any proposed legislation is unclear, we believe momentum is building toward executive and congressional action in the near-term.

“We expect infrastructure demand to be meaningfully and positively impacted by the $305 billion Fixing America's Surface Transportation Act (FAST Act) as well as multiple state initiatives. Longer term, infrastructure spending is expected to benefit from strong state and local support for increased funding, as evidenced by the significant number of state and local transportation funding-related ballot initiatives that have passed over the previous 24 months. Private-sector construction indicators also signal continued growth for both nonresidential and residential activity,” Nye concluded.

For the full year, shipments to the infrastructure market comprised 39 percent of aggregates product line volumes. As expected, infrastructure construction activity saw little benefit in 2016 from passage of the FAST Act. This, coupled with project delays, primarily in Texas, and continued significant rainfall during the year, led to a year-over-year decline in infrastructure volume.

The nonresidential market represented 32 percent of full-year aggregates product line shipments and increased 3.0 percent as compared with 2015. The Mid-America Group led this growth with a 21.2 percent increase, and the Southeast Group achieved a 3.1 percent increase. Steady economic improvement across the southeastern United States is driving gains in office, retail and industrial development in North Carolina, South Carolina and Georgia. The West Group was negatively impacted by weather deferrals and lower energy-sector demand.

The residential market accounted for 21 percent of aggregates product line shipments for the year. Volumes to this segment increased 21.6 percent, driven by continued strength in housing. The Mid-America Group and West Group achieved growth of 23.8 percent and 23.3 percent, respectively.

With 2016 national housing starts of 1.17 million, still well below historical averages, the positive trends in housing construction in the company's top states indicate continued growth in 2017. Florida, Georgia and Colorado are ranked in the top 10 states for gains in housing starts. Additionally, on the metro-level, Dallas, Atlanta, Kansas City, Austin, Texas, and Colorado Springs, Colo., all experienced double-digit growth in housing starts and rank in the top 10 for 2016.

The ChemRock/Rail market accounted for the remaining 8 percent of aggregates product line volumes. The volume decline in this segment for the year principally reflects lower capital and maintenance activity by railroads.

Overall, aggregates product line shipments increased 0.4 percent and 1.4 percent for the fourth-quarter and full-year 2016, respectively. The full-year increase reflects a 6.5 percent improvement in the Mid-America Group, partially offset by project and weather delays in the Southeast Group and West Group.

Full-year aggregates product line pricing increased in all reportable groups. The overall price improvement of 7.3 percent was in line with management's expectations and led by a 10.6 percent increase in the West Group. The Southeast Group and Mid-America Group reported increases of 7.1 percent and 4.3 percent, respectively.