Vulcan Materials Co. announced results for the quarter ended Sept. 30, reporting total revenues of $1.52 billion versus $1.31 billion in 2020.
- The company successfully closed the U.S. Concrete (USCR) acquisition on Aug. 26. Unless noted otherwise, consolidated figures include USCR’s results since closing.
- Total revenues of $1.52 billion were an increase of 16% compared to the prior year.
- Operating earnings were $262 million compared with $288 million in the prior year.
- Expenses include $30 million of higher same-store diesel fuel and liquid asphalt costs as compared to the prior year.
- Aggregates gross profit increased $34 million, or 10%, to $372 million.
- Same-store volumes increased 5%, and mix-adjusted price increased 3.5%.
- Non-aggregates gross profit was $22 million compared with $43 million in the prior year.
- Earnings attributable to Vulcan from continuing operations were $177 million, or $1.33 per diluted share. Excluding discrete charges adjusted out of EBITDA, earnings attributable to Vulcan from continuing operations were $1.54 per diluted share.
- Third quarter Adjusted EBITDA increased 4% to $418 million.
- Full year Adjusted EBITDA guidance increased to between $1.430 and $1.460 billion.
Third quarter aggregates sales were $1.17 billion, while gross profit increased 10% to $372 million. The year-over-year earnings improvement was widespread across the company’s footprint and resulted from both volume and price growth, as well as effective cost control. This year’s third quarter results include a $3 million unfavorable impact from selling acquired inventory after its markup to fair value as part of acquisition accounting. The quarter’s results also include significantly higher diesel fuel costs, lowering segment gross profit by $13 million.
Total aggregates shipments were 60.2 million tons versus 55.9 million in last year’s third quarter, an increase of 8%. Same-store aggregates shipments increased 5%, reflecting improving demand across all end-market segments and despite severe wet weather in certain key markets.
The pricing environment continues to be positive across the company’s footprint as demand visibility improves. The rate of pricing growth has improved sequentially each quarter this year. In the third quarter, same-store freight-adjusted pricing increased 3.1% year-over-year (mix-adjusted pricing increased 3.5%) with the growth widespread across geographies.
In the third quarter, solid execution helped to offset a more than 50% increase in the average unit cost of diesel fuel, inflation for certain parts and supplies, and operational disruptions caused by wet weather in the Southeast and along the Gulf Coast due in part to Hurricane Ida.
Same-store freight-adjusted unit cost of sales increased 1.7% over the prior year’s third quarter but decreased almost 1% excluding the impact of higher diesel prices. Total cash gross profit improved 3% from the prior year’s third quarter to $7.74 per ton. Positive pricing opportunities and improved operating efficiencies are expected to continue to help offset some of the cost inflation going forward.
Tom Hill, chairman and chief executive officer, said, “Our aggregates-focused business is built for times like these. We expanded our industry-leading trailing-12 month unit profitability for the 13th consecutive quarter despite a challenging operating environment caused by inflationary pressures and labor constraints. This consistent growth in the underlying business is driven by our execution on Vulcan’s four strategic disciplines and is further enhanced by strategic growth through acquisitions and greenfield investments. Since completing the USCR acquisition in late August, our teams are making good progress integrating the businesses across the expanded footprint and are identifying additional opportunities to accelerate our growth and create value for shareholders.”
Hill continued, “Throughout a difficult 18 months of pandemic disruptions and economic challenges, our people strengthened their operating disciplines and moved pricing higher. Now that trailing-12-month aggregates volumes are back to pre-pandemic levels, these solid fundamentals, coupled with our leading positions in attractive geographies, position us well to capitalize on positive demand trends going forward and will allow us to deliver both revenue and earnings growth.”