Vulcan Materials Reports 38% Increase in Total Revenues

Vulcan Materials Co. announced results for the quarter ended Sept. 30, reporting total revenues of $2.088 billion versus $1.517 billion in the third quarter of 2021. Year-to-date, the company is reporting total revenues of $5.583 billion versus $3.946 billion over the same period in 2021. Total revenues increased 38%, driven by double-digit growth in the company’s legacy operations as well as the addition of acquired operations.

The company is also reporting:

  • Average selling prices increased sharply in each product line. Aggregates pricing increased 12% on a reported and mix-adjusted basis. Average price for asphalt and concrete increased 26% and 13%, respectively.
  • Shipments increased year-over-year in each product line, driven by acquisitions and healthy underlying demand in our markets. Aggregates volumes increased 9% or 3% on a same-store basis.
  • Gross profit increased $99 million, or 25%, to $493 million. Aggregates gross profit increased $64 million, or 17%. Non-aggregates gross profit increased $35 million, including a $22 million year-over-year improvement in the Asphalt segment. Includes $67 million of higher energy-related costs compared to the prior year’s quarter
  • Earnings attributable to Vulcan from continuing operations were $178 million, or $1.33 per diluted share.
  • Included in these results was a net after-tax loss of $59 million of non-routine items, comprised principally of charges related to assets classified as held for sale during the quarter ($63 million or $0.48 per diluted share) and a gain on the sale of excess real estate ($18 million or $0.13 per diluted share) Excluding the non-routine items, earnings attributable to Vulcan from continuing operations were $1.78 per diluted share
RR050620 Hill.Vulcan
Tom Hill

Tom Hill, Vulcan Materials’ chairman and chief executive officer stated, “Consistent with our expectations for the second half of the year, strong pricing momentum and solid operational execution led to earnings growth in each of our operating segments.  Aggregates cash gross profit per ton improved by 9%, a considerable acceleration from the first half of the year.  This momentum, along with the ongoing favorable pricing environment and current visibility into private nonresidential and infrastructure demand, reinforces our confidence in our ability to deliver strong earnings growth in 2022.”

Aggregates
Segment gross profit was $436 million, an increase of 17% from the prior year. Cash gross profit per ton increased 9% to $8.41 per ton. Double-digit price growth and solid operational execution helped offset cost headwinds, including significantly higher diesel fuel costs ($27 million) and continued inflationary pressures for many other parts and supplies.

Price growth in the third quarter was consistently strong across the company’s markets. Freight-adjusted pricing was $16.79 per ton, an increase of $1.86 per ton, or 12%, over the prior year.  Adjusting for mix impacts, average selling price also increased 12%.

Total aggregates shipments increased 9%, reflecting shipment contribution from acquisitions and healthy construction activity levels. On a same-store basis, shipments increased 3%. Shipment growth was geographically widespread and particularly strong in many southeastern markets and California.

Freight-adjusted unit cash cost of sales increased 17%, or $1.19 per ton, as compared to the prior year’s third quarter.  Excluding the impact of higher diesel fuel costs, freight-adjusted cash cost of sales increased 11%, or $0.77 per ton.

Asphalt, Concrete and Calcium
Asphalt segment gross profit was $30 million, an increase of $22 million over the prior year’s third quarter. The year-over-year increase was driven by widespread volume improvement and continued pricing momentum. Asphalt volumes increased 13%, driven by growth in Arizona and California, the company’s two largest asphalt markets. Asphalt pricing increased 26%, or $15.37 per ton, more than offsetting a 42% ($33 million) increase in the average price paid for liquid asphalt as well as a $3 million year-over-year increase in the cost of natural gas.

Third quarter Concrete segment gross profit was $26 million, an increase of $12 million over the prior year. Concrete results benefited from the contribution of acquired operations as well as strong volume and price growth in the company’s legacy operations. Unit material margins improved as higher selling prices helped offset higher raw materials costs, including aggregates supplied by the company.

Calcium segment gross profit was $0.8 million compared to $0.3 million in the prior year quarter.

Selling, Administrative and General (SAG) and Other Items
SAG expense was $135 million in the quarter, or 6.5% of total revenues. Higher expenses versus the prior year were driven by elevated legal and professional fees, related mostly to Mexico and business development activities, and increased incentives driven by favorable current-year performance.  Trailing-12-months SAG expense was 7.1% of total revenues, 50 basis points less than the prior year.  The company remains focused on further leveraging its overhead cost structure.

This year’s third quarter included the sale of real estate in California. This transaction resulted in a pretax gain of $24 million ($18 million after-tax).  The company continues to maximize the value of its portfolio of quarry operations as they move through the life cycle of land management.

“We are currently finalizing an agreement for the disposition of our concrete assets in New York, New Jersey and Pennsylvania and expect to close the transaction in the fourth quarter, subject to obtaining regulatory approvals and the satisfaction of other customary closing conditions.  As a result, these assets were classified as held for sale during the quarter and were written down to their fair value, resulting in a pretax loss of $68 million ($63 million after-tax), including the write-off of the associated goodwill,” the company stated.

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