Vulcan Materials Co. announced results for the quarter ended March 31. Total revenues were $996.5 million, compared to $854.5 million in the first quarter of 2018. Net earnings were $63 million and Adjusted EBITDA was $193 million in the first quarter. The 15% growth in Adjusted EBITDA was driven by strong aggregates shipments, up 13% year-over-year, and a 5.4% increase in aggregates pricing.
First quarter aggregates segment gross profit increased 25% to $186 million, or $4.07 per ton. As a percentage of segment sales, gross profit margin expanded 100 basis points due to strong growth in shipments and price improvements.
Trailing 12-month same-store incremental gross profit flow-through rate was 57%, which is in line with longer-term expectations of 60%. As a reminder, quarterly gross profit flow-through rates can vary widely from quarter to quarter; therefore, the company evaluates this metric on a trailing 12-month basis.
First quarter aggregates shipments increased 13% (11% on a same-store basis) versus the prior-year quarter. Solid underlying fundamentals and pent-up demand carried over from last year helped drive shipment growth across most of the company’s footprint.
In California, shipments decreased by double-digits due to record rainfall throughout most of the quarter. A strong demand environment, driven by transportation-related construction as well as growth in the company’s project-related bookings, support its expectations for shipment growth in California in 2019.
Price growth was positive across all markets served by the company. For the quarter, freight-adjusted average sales price for aggregates increased 5.4% versus the prior-year’s quarter. Excluding mix impact, aggregates price increased 5.8% compared to the prior-year first quarter.
Pricing was particularly strong in Arizona, California, Georgia, Tennessee and Texas. Positive trends in backlogged project work along with demand visibility and customer confidence support continued upward pricing movements throughout 2019.
First quarter same-store unit cost of sales (freight-adjusted) increased 3% compared to the prior-year quarter due in part to planned higher repair and maintenance costs in advance of the construction season. Unit cost of sales in California was negatively impacted by record rainfall. The company remains focused on compounding improvements in unit margins throughout the cycle through fixed cost leverage, price growth and operating efficiencies.
Tom Hill, chairman and chief executive officer, said, “Our first quarter results represent a good start to the year and are consistent with our full-year expectations. Broad-based shipment growth, compounding price improvements and solid operating efficiencies in our aggregates business contributed to 17% growth in total revenues and 29% growth in operating earnings. These results demonstrate the strength of our unique aggregates-centric business model.
“Aggregates segment gross profit increased from $3.66 per ton to $4.07 per ton. This double-digit improvement in first quarter unit profitability builds on last year’s results, and we are well positioned for further gains in our industry-leading unit profitability.
“Our key markets are benefitting from both robust growth in public construction demand and continued growth in private demand. Leading indicators, such as construction award activity, signal broad-based shipment growth across our footprint. Aggregates pricing momentum continues to improve – consistent with our full-year expectations. As a result, we reiterate our full-year expectations for 2019 earnings from continuing operations of between $4.55 and $5.05 per diluted share and Adjusted EBITDA of between $1.250 and $1.330 billion.”