Aggregates Segment Earnings Increase
Despite Weather Disruptions
Pricing Momentum and Strong Execution
Underpin Earnings Growth Outlook in 2023
BIRMINGHAM, Ala., Feb. 16,
2023 /PRNewswire/ -- Vulcan Materials Company (NYSE:
VMC), the nation's largest producer of construction aggregates,
today announced results for the quarter and year ended December 31, 2022.
Financial Highlights Include:
|
|
|
|
|
|
|
Fourth
Quarter
|
|
Full
Year
|
Amounts in millions,
except per unit data
|
2022
|
2021
|
|
2022
|
2021
|
Total
revenues
|
$
1,732
|
$
1,606
|
|
$
7,315
|
$
5,552
|
Gross profit
|
$
350
|
$
352
|
|
$
1,558
|
$
1,373
|
Selling, Administrative
and General (SAG)
|
$
126
|
$
125
|
|
$
515
|
$
418
|
As % of Total
revenues
|
7.3 %
|
7.8 %
|
|
7.0 %
|
7.5 %
|
Net earnings
attributable to Vulcan
|
$
119
|
$
138
|
|
$
576
|
$
671
|
Adjusted
EBITDA
|
$
375
|
$
383
|
|
$
1,626
|
$
1,451
|
Earnings attributable
to Vulcan from
continuing operations per diluted
share
|
$
0.91
|
$
1.04
|
|
$
4.45
|
$
5.05
|
Adjusted earnings
attributable to Vulcan from
continuing operations per diluted
share
|
$
1.08
|
$
1.25
|
|
$
5.11
|
$
5.04
|
Aggregates
segment
|
|
|
|
|
|
Shipments
(tons)
|
54.2
|
57.7
|
|
236.3
|
222.9
|
Freight-adjusted sales
price per ton
|
$
16.96
|
$
14.91
|
|
$
16.40
|
$
14.87
|
Gross profit
|
$
327
|
$
326
|
|
$
1,408
|
$
1,296
|
Gross profit per
ton
|
$
6.04
|
$
5.64
|
|
$
5.96
|
$
5.81
|
Cash gross
profit
|
$
444
|
$
428
|
|
$
1,850
|
$
1,656
|
Cash gross profit per
ton
|
$
8.19
|
$
7.41
|
|
$
7.83
|
$
7.43
|
|
|
|
|
|
|
Tom Hill, Vulcan Materials'
Chairman and Chief Executive Officer, said, "Our aggregates-led
business delivered solid results in 2022 as our teams executed well
in a challenging macro-environment. We continued to improve
our aggregates unit profitability and demonstrate the resiliency of
our business. Our relentless focus on our operating disciplines,
coupled with nimble pricing actions to overcome inflationary
pressures, led to a 12 percent increase in our full-year Adjusted
EBITDA. Fourth quarter results were negatively impacted by
abnormally wet and cold weather that disrupted construction
activity and materials shipments, in addition to some softening in
single-family residential demand. Despite these disruptions,
our industry-leading aggregates cash gross profit per ton increased
11 percent in the fourth quarter. We carry solid pricing
momentum into 2023 and are focused on our operating disciplines to
manage costs and improve efficiencies. By controlling what we
can control, we expect to deliver another year of earnings
growth."
Segment Results
Aggregates
Segment gross profit increased in the fourth quarter despite
lower shipments due mostly to unfavorable weather. Fourth
quarter gross profit increased to $327
million, or $6.04 per ton;
shipments declined 6 percent. In early October, the lingering
effects of Hurricane Ian slowed shipments in certain southeastern
markets while significant rainfall and extreme winter temperatures
impacted November and December construction activity across many
markets. The prior year's fourth quarter weather was
unusually mild, amplifying this year's weather impact.
Quarterly shipments were also impacted by the absence of tons
available from the Company's Mexico operations, which were unexpectedly and
arbitrarily shut down by the Mexican government in May of
2022.
Fourth quarter freight-adjusted selling prices increased 14
percent, or $2.05 per ton, and
increases were widespread across the Company's footprint.
Freight-adjusted pricing for the full year was $16.40 per ton, an increase of $1.53 per ton, or 10 percent, over the prior
year. Adjusting for mix impacts, average selling prices
increased 15 percent in the fourth quarter and 11 percent for the
full year.
Notwithstanding the challenging weather conditions in the fourth
quarter, solid operational execution helped offset continued energy
cost headwinds and inflationary pressures for many parts and
supplies. Freight-adjusted unit cash cost of sales increased
17 percent, or $1.27 per ton, as
compared to the prior year's fourth quarter. The average unit
price of diesel fuel in the fourth quarter increased 61 percent
from the prior year. Excluding the impact of higher diesel
fuel costs, freight-adjusted cash cost of sales increased 11
percent.
Unit profitability expansion accelerated throughout the year
with fourth quarter gross profit per ton increasing 7 percent and
cash gross profit per ton increasing 11 percent. For the full
year, cash gross profit per ton improved 5 percent to $7.83 per ton.
Asphalt, Concrete and Calcium
Asphalt segment gross profit was $17
million, an increase of $13
million over the prior year's fourth quarter, as pricing
actions initiated throughout the year outpaced higher input
costs. Fourth quarter shipments were 2.8 million tons, a 2
percent decline versus the prior year. Asphalt pricing
increased 24 percent, or $14.56 per
ton, more than offsetting a 24 percent increase in the unit cost of
liquid asphalt and driving strong unit profitability improvement
versus the prior year. For the full year, asphalt gross
profit improved $36 million with
robust pricing gains overcoming a 36 percent increase in the unit
cost of liquid asphalt. Volume improved 7 percent for the
year, benefiting from solid growth in Arizona and California, the Company's two largest asphalt
markets, as well as acquisitions completed during 2022.
Full-year cash gross profit was $92
million, a 62 percent increase versus the prior year.
Fourth quarter Concrete segment gross profit was $17 million lower than the prior year due to
lower volumes and higher costs for diesel fuel. Shipments of
2.3 million cubic yards were 15 percent lower than the prior
year. The year-over-year decline resulted from significant
rainfall in Texas and California and some slowdown in residential
construction activity. Additionally, the Company divested its
concrete operations in New York,
New Jersey and Pennsylvania in November. Average
selling prices increased 14 percent, partially offsetting higher
raw materials, diesel and labor costs. For the full year,
concrete gross profit improved $35
million, benefiting from the earnings contribution of
acquisitions. Cash gross profit for the full year was
$172 million.
Full year Calcium segment gross profit was $2.6 million compared to $2.2 million in the prior year.
Selling, Administrative and General (SAG) and Other
Items
SAG expense in the quarter was $126
million, or 7.3 percent of total revenues. Full year
SAG expense was $515 million, or 7.0
percent of total revenues, a 50-basis points improvement versus the
prior year.
In the fourth quarter, we completed the disposition of our
concrete operations in New York,
New Jersey and Pennsylvania, resulting in an incremental
pretax loss on sale of $17 million
($13 million after-tax) to the
estimate recorded in the third quarter.
Financial Position, Liquidity and Capital Allocation
Capital expenditures in the fourth quarter were $266 million, including growth projects.
For the full year, capital expenditures were $644 million. In 2023, the Company expects
to spend $600 to $650 million, including growth projects.
The Company will continue to review its plans and will adjust as
needed, while being thoughtful about preserving
liquidity.
On December 31, 2022, the ratio of
total debt to trailing-twelve-months Adjusted EBITDA was 2.4 times
(2.3 times on a net debt basis), down from 2.7 times (2.5 times on
a net debt basis) at the end of 2021. The Company remains
committed to its stated long-term target leverage range of 2.0 to
2.5 times total debt to trailing-twelve-months Adjusted
EBITDA.
On a trailing-twelve-months basis, return on average invested
capital was 13.5 percent. The Company is focused on driving
improvement through solid operating earnings growth coupled with
disciplined capital management.
Outlook
Regarding the Company's outlook, Mr. Hill said, "Most leading
indicators of demand remain healthy in the near term, and we carry
strong pricing momentum into 2023. Overall shipments will be
dependent upon the depth and duration of the decline in residential
construction activity, the timing of highway starts converting to
aggregates shipments, and the impact of rising interest rates on
private nonresidential construction activity as the year
progresses. We are encouraged by the strength in leading
indicators that support growth in public construction activity,
particularly highways, and we are well positioned to benefit in
geographic markets where the need is greatest. On the private
side, slowing single-family construction activity has outweighed
continued growth in multi-family, leading to overall declines in
residential demand. Nonresidential demand remains at healthy
levels and continues to benefit from manufacturing and other heavy
industrial projects. As always, we are focused on the things
we can control, and our execution on our operating and commercial
disciplines will lead to further improvement in our aggregates unit
profitability and earnings growth in 2023."
Management expectations for 2023 include:
- Continued acceleration in Aggregates segment cash gross profit
per ton improvement ($7.83 in
2022)
-
- Total shipments down 2 to 6 percent (236.3 million tons in
2022)
- Freight-adjusted price growth of 11 to 13 percent ($16.40 in 2022)
- High single-digit increase in freight-adjusted cash cost
(freight-adjusted price less segment cash gross profit per ton;
$8.57 in 2022)
- Total Asphalt, Concrete and Calcium segment cash gross profit
collectively in line with 2022 ($268
million in 2022)
-
- Asphalt improvement driven by low single-digit growth in volume
and price. The price and cost inflection achieved in the
second half of 2022 should lead to continued margin
improvement. Expected to contribute approximately 40 to 50
percent of non-aggregates cash gross profit.
- Concrete same-store volumes (divested approximately 2 million
cubic yards in 2022) expected to decline mid-single-digit due to
slowing residential construction activity. Price growth
should offset higher cost for raw materials. Expected to
contribute approximately 50 to 60 percent of non-aggregates cash
gross profit.
- Selling, Administrative and General expenses of $515 to $530
million
- Interest expense of approximately $195
million
- Depreciation, depletion, accretion, and amortization expense of
approximately $610 million
- An effective tax rate of approximately 22 percent
- Net earnings attributable to Vulcan of between $715 and $835
million
- Adjusted EBITDA of between $1.725
and $1.875 billion
Conference Call
Vulcan will host a conference call at 10:00 a.m. CT on February
16, 2023. A webcast will be available via the
Company's website at www.vulcanmaterials.com. Investors and
other interested parties may access the teleconference live by
calling 800-267-6316, or 203-518-9783 if outside the U.S. The
conference ID is 1023841. The conference call will be
recorded and available for replay at the Company's website
approximately two hours after the call.
About Vulcan Materials Company
Vulcan Materials Company, a member of the S&P 500 Index with
headquarters in Birmingham,
Alabama, is the nation's largest supplier of construction
aggregates – primarily crushed stone, sand and gravel – and a major
producer of aggregates-based construction materials, including
asphalt and ready-mixed concrete. For additional information
about Vulcan, go to www.vulcanmaterials.com.
Non-GAAP Financial Measures
Because GAAP financial measures on a forward-looking basis are
not accessible, and reconciling information is not available
without unreasonable effort, we have not provided reconciliations
for forward-looking non-GAAP measures, other than the
reconciliation of Projected EBITDA as included in Appendix 2
hereto. For the same reasons, we are unable to address the probable
significance of the unavailable information, which could be
material to future results.
FORWARD-LOOKING STATEMENT DISCLAIMER
This document contains forward-looking statements.
Statements that are not historical fact, including statements
about Vulcan's beliefs and expectations, are forward-looking
statements. Generally, these statements relate to future
financial performance, results of operations, business plans or
strategies, projected or anticipated revenues, expenses, earnings
(including EBITDA and other measures), dividend policy, shipment
volumes, pricing, levels of capital expenditures, intended cost
reductions and cost savings, anticipated profit improvements and/or
planned divestitures and asset sales. These forward-looking
statements are sometimes identified by the use of terms and phrases
such as "believe," "should," "would," "expect," "project,"
"estimate," "anticipate," "intend," "plan," "will," "can," "may" or
similar expressions elsewhere in this document. These
statements are subject to numerous risks, uncertainties, and
assumptions, including but not limited to general business
conditions, competitive factors, pricing, energy costs, and other
risks and uncertainties discussed in the reports Vulcan
periodically files with the SEC.
Forward-looking statements are not guarantees of future
performance and actual results, developments, and business
decisions may vary significantly from those expressed in or implied
by the forward-looking statements. The following risks
related to Vulcan's business, among others, could cause actual
results to differ materially from those described in the
forward-looking statements: general economic and business
conditions; a pandemic, epidemic or other public health emergency,
such as the COVID-19 outbreak; Vulcan's dependence on the
construction industry, which is subject to economic cycles; the
timing and amount of federal, state and local funding for
infrastructure; changes in the level of spending for private
residential and private nonresidential construction; changes in
Vulcan's effective tax rate; the increasing reliance on information
technology infrastructure, including the risks that the
infrastructure does not work as intended, experiences technical
difficulties or is subjected to cyber-attacks; the impact of the
state of the global economy on Vulcan's businesses and financial
condition and access to capital markets; international business
operations and relationships, including recent actions taken by the
Mexican government with respect to Vulcan's property and operations
in that country; the highly competitive nature of the construction
industry; the impact of future regulatory or legislative actions,
including those relating to climate change, biodiversity, land use,
wetlands, greenhouse gas emissions, the definition of minerals, tax
policy and domestic and international trade; the outcome of pending
legal proceedings; pricing of Vulcan's products; weather and other
natural phenomena, including the impact of climate change and
availability of water; availability and cost of trucks, railcars,
barges and ships as well as their licensed operators for transport
of Vulcan's materials; energy costs; costs of hydrocarbon-based raw
materials; healthcare costs; labor relations, shortages and
constraints; the amount of long-term debt and interest expense
incurred by Vulcan; changes in interest rates; volatility in
pension plan asset values and liabilities, which may require cash
contributions to the pension plans; the impact of environmental
cleanup costs and other liabilities relating to existing and/or
divested businesses; Vulcan's ability to secure and permit
aggregates reserves in strategically located areas; Vulcan's
ability to manage and successfully integrate acquisitions; the
effect of changes in tax laws, guidance and interpretations;
significant downturn in the construction industry may result in the
impairment of goodwill or long-lived assets; changes in
technologies, which could disrupt the way Vulcan does business and
how Vulcan's products are distributed; the risks of open pit and
underground mining; expectations relating to environmental, social
and governance considerations; claims that our products do not meet
regulatory requirements or contractual specifications; and other
assumptions, risks and uncertainties detailed from time to time in
the reports filed by Vulcan with the SEC. All forward-looking
statements in this communication are qualified in their entirety by
this cautionary statement. Vulcan disclaims and does not
undertake any obligation to update or revise any forward-looking
statement in this document except as required by law.
Investor Contact: Mark Warren (205) 298-3220
Media Contact: Janet Kavinoky (205) 298-3220
|
|
|
|
|
|
|
|
|
|
Table A
|
Vulcan Materials
Company
|
|
|
|
|
|
|
|
and Subsidiary
Companies
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except
per share data)
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
Consolidated
Statements of Earnings
|
|
December
31
|
|
December
31
|
(Condensed and
unaudited)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$1,731.9
|
|
$1,606.3
|
|
$7,315.2
|
|
$5,552.2
|
Cost of
revenues
|
|
1,382.0
|
|
1,254.6
|
|
5,757.5
|
|
4,178.8
|
Gross profit
|
|
349.9
|
|
351.7
|
|
1,557.7
|
|
1,373.4
|
Selling, administrative
and general expenses
|
|
126.4
|
|
124.6
|
|
515.1
|
|
417.6
|
Gain (loss) on sale of
property, plant & equipment
|
|
|
|
|
|
|
|
|
and
businesses
|
|
(17.7)
|
|
(0.2)
|
|
10.7
|
|
120.1
|
Loss on
impairments
|
|
(0.1)
|
|
0.0
|
|
(67.9)
|
|
(4.6)
|
Other operating
expense, net
|
|
(14.2)
|
|
(15.6)
|
|
(34.0)
|
|
(60.5)
|
Operating
earnings
|
|
191.5
|
|
211.3
|
|
951.4
|
|
1,010.8
|
Other nonoperating
income (expense), net
|
|
6.9
|
|
(6.5)
|
|
5.1
|
|
10.7
|
Interest expense,
net
|
|
47.6
|
|
36.1
|
|
168.4
|
|
147.7
|
Earnings from
continuing operations
|
|
|
|
|
|
|
|
|
before income
taxes
|
|
150.8
|
|
168.7
|
|
788.1
|
|
873.8
|
Income tax
expense
|
|
28.5
|
|
30.4
|
|
193.0
|
|
200.1
|
Earnings from
continuing operations
|
|
122.3
|
|
138.3
|
|
595.1
|
|
673.7
|
Loss on discontinued
operations, net of tax
|
|
(2.5)
|
|
(0.7)
|
|
(18.6)
|
|
(3.3)
|
Net earnings
|
|
|
|
119.8
|
|
137.6
|
|
576.5
|
|
670.4
|
(Earnings) loss
attributable to noncontrolling interest
|
(0.4)
|
|
0.4
|
|
(0.9)
|
|
0.4
|
Net earnings
attributable to Vulcan
|
|
$119.4
|
|
$138.0
|
|
$575.6
|
|
$670.8
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share attributable to Vulcan
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$0.92
|
|
$1.04
|
|
$4.47
|
|
$5.08
|
Discontinued
operations
|
|
($0.02)
|
|
$0.00
|
|
($0.14)
|
|
($0.03)
|
Net earnings
|
|
$0.90
|
|
$1.04
|
|
$4.33
|
|
$5.05
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss)
per share attributable to Vulcan
|
|
|
|
|
|
|
Continuing
operations
|
|
$0.91
|
|
$1.04
|
|
$4.45
|
|
$5.05
|
Discontinued
operations
|
|
($0.02)
|
|
($0.01)
|
|
($0.14)
|
|
($0.03)
|
Net earnings
|
|
$0.89
|
|
$1.03
|
|
$4.31
|
|
$5.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
133.0
|
|
132.8
|
|
133.0
|
|
132.8
|
Assuming
dilution
|
|
133.7
|
|
133.6
|
|
133.6
|
|
133.5
|
Effective tax rate from
continuing operations
|
|
18.9 %
|
|
18.0 %
|
|
24.5 %
|
|
22.9 %
|
|
|
|
|
|
Table B
|
Vulcan Materials
Company
|
|
|
|
and Subsidiary
Companies
|
|
|
|
|
|
|
|
|
(in
millions)
|
Consolidated Balance
Sheets
|
|
December
31
|
December
31
|
(Condensed and
unaudited)
|
|
2022
|
2021
|
Assets
|
|
|
|
Cash and cash
equivalents
|
|
$161.4
|
$235.0
|
Restricted
cash
|
|
0.1
|
6.5
|
Accounts and notes
receivable
|
|
|
|
Accounts and notes
receivable, gross
|
|
1,056.1
|
849.0
|
Allowance for credit
losses
|
|
(10.8)
|
(10.3)
|
Accounts and notes
receivable, net
|
|
1,045.3
|
838.7
|
Inventories
|
|
|
|
Finished
products
|
|
439.3
|
418.0
|
Raw
materials
|
|
63.4
|
59.9
|
Products in
process
|
|
6.0
|
4.2
|
Operating supplies and
other
|
|
70.6
|
39.2
|
Inventories
|
|
579.3
|
521.3
|
Other current
assets
|
|
115.9
|
95.1
|
Total current
assets
|
|
1,902.0
|
1,696.6
|
Investments and
long-term receivables
|
|
31.8
|
34.1
|
Property, plant &
equipment
|
|
|
|
Property, plant &
equipment, cost
|
|
11,306.4
|
10,444.4
|
Allowances for
depreciation, depletion & amortization
|
|
(5,255.1)
|
(4,897.6)
|
Property, plant &
equipment, net
|
|
6,051.3
|
5,546.8
|
Operating lease
right-of-use assets, net
|
|
572.6
|
691.4
|
Goodwill
|
|
3,689.6
|
3,696.7
|
Other intangible
assets, net
|
|
1,702.1
|
1,749.0
|
Other noncurrent
assets
|
|
285.2
|
268.0
|
Total assets
|
|
$14,234.6
|
$13,682.6
|
Liabilities
|
|
|
|
Current maturities of
long-term debt
|
|
0.5
|
5.2
|
Short-term
debt
|
|
100.0
|
0.0
|
Trade payables and
accruals
|
|
454.5
|
365.5
|
Other current
liabilities
|
|
401.6
|
398.6
|
Total current
liabilities
|
|
956.6
|
769.3
|
Long-term
debt
|
|
3,875.2
|
3,874.8
|
Deferred income taxes,
net
|
|
1,072.8
|
1,005.9
|
Deferred
revenue
|
|
159.8
|
167.1
|
Noncurrent operating
lease liabilities
|
|
548.4
|
642.5
|
Other noncurrent
liabilities
|
|
669.6
|
655.3
|
Total
liabilities
|
|
$7,282.4
|
$7,114.9
|
Equity
|
|
|
|
Common stock, $1 par
value
|
|
132.9
|
132.7
|
Capital in excess of
par value
|
|
2,839.0
|
2,816.5
|
Retained
earnings
|
|
4,111.4
|
3,748.5
|
Accumulated other
comprehensive loss
|
|
(154.7)
|
(152.7)
|
Total shareholder's
equity
|
|
6,928.6
|
6,545.0
|
Noncontrolling
interest
|
|
23.6
|
22.7
|
Total equity
|
|
$6,952.2
|
$6,567.7
|
Total liabilities and
equity
|
|
$14,234.6
|
$13,682.6
|
|
|
|
|
|
|
|
Table C
|
Vulcan Materials
Company
|
|
|
|
|
and Subsidiary
Companies
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
Twelve Months
Ended
|
Consolidated
Statements of Cash Flows
|
|
December
31
|
(Condensed and
unaudited)
|
|
2022
|
|
2021
|
Operating
Activities
|
|
|
|
|
Net earnings
|
|
|
|
$576.5
|
|
$670.4
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
Depreciation,
depletion, accretion and amortization
|
|
587.5
|
|
463.0
|
Noncash operating lease
expense
|
|
60.3
|
|
49.0
|
Net gain on sale of
property, plant & equipment and businesses
|
|
(10.7)
|
|
(120.1)
|
Loss on
impairments
|
|
67.9
|
|
4.6
|
Contributions to
pension plans
|
|
(7.8)
|
|
(8.0)
|
Share-based
compensation expense
|
|
41.1
|
|
34.7
|
Deferred tax
expense
|
|
57.7
|
|
66.8
|
Changes in assets and
liabilities before initial
|
|
|
|
|
effects of business
acquisitions and dispositions
|
|
(248.5)
|
|
(180.3)
|
Other, net
|
|
|
|
|
24.2
|
|
31.8
|
Net cash provided by
operating activities
|
|
$1,148.2
|
|
$1,011.9
|
Investing
Activities
|
|
|
|
|
Purchases of property,
plant & equipment
|
|
(612.6)
|
|
(451.3)
|
Proceeds from sale of
property, plant & equipment
|
|
38.7
|
|
216.5
|
Proceeds from sale of
businesses
|
|
50.0
|
|
0.0
|
Payment for businesses
acquired, net of acquired cash
|
|
(529.2)
|
|
(1,639.4)
|
Other, net
|
|
|
|
|
0.1
|
|
0.1
|
Net cash used for
investing activities
|
|
($1,053.0)
|
|
($1,874.1)
|
Financing
Activities
|
|
|
|
|
Proceeds from
short-term debt
|
|
1,361.0
|
|
0.0
|
Payment of short-term
debt
|
|
(1,261.0)
|
|
0.0
|
Payment of current
maturities and long-term debt
|
|
(557.7)
|
|
(1,451.7)
|
Proceeds from issuance
of long-term debt
|
|
550.0
|
|
1,600.0
|
Debt issuance and
exchange costs
|
|
(2.8)
|
|
(13.3)
|
Payment of finance
leases
|
|
(33.8)
|
|
(13.5)
|
Dividends
paid
|
|
|
|
(212.6)
|
|
(196.4)
|
Share-based
compensation, shares withheld for taxes
|
|
(18.5)
|
|
(19.1)
|
Other, net
|
|
|
|
|
0.2
|
|
(0.3)
|
Net cash used for
financing activities
|
|
($175.2)
|
|
($94.3)
|
Net decrease in cash
and cash equivalents and restricted cash
|
|
(80.0)
|
|
(956.5)
|
Cash and cash
equivalents and restricted cash at beginning of year
|
|
241.5
|
|
1,198.0
|
Cash and cash
equivalents and restricted cash at end of year
|
|
$161.5
|
|
$241.5
|
|
|
|
|
|
|
|
|
|
|
|
Table D
|
Segment Financial
Data and Unit Shipments
|
|
|
|
|
|
|
|
|
|
(in millions, except
unit and per unit data)
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
December
31
|
|
December
31
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Total
Revenues
|
|
|
|
|
|
|
|
|
Aggregates
1
|
|
$1,259.3
|
|
$1,152.3
|
|
$5,272.8
|
|
$4,345.0
|
Asphalt
2
|
|
238.1
|
|
197.4
|
|
990.2
|
|
777.8
|
Concrete
|
|
360.5
|
|
370.0
|
|
1,593.9
|
|
766.8
|
Calcium
|
|
2.4
|
|
1.4
|
|
7.8
|
|
6.9
|
Segment
sales
|
|
$1,860.3
|
|
$1,721.1
|
|
$7,864.7
|
|
$5,896.5
|
Aggregates intersegment
sales
|
|
(128.4)
|
|
(114.8)
|
|
(549.5)
|
|
(344.3)
|
Total
revenues
|
|
$1,731.9
|
|
$1,606.3
|
|
$7,315.2
|
|
$5,552.2
|
Gross
Profit
|
|
|
|
|
|
|
|
|
Aggregates
|
|
$327.1
|
|
$325.9
|
|
$1,408.5
|
|
$1,295.7
|
Asphalt
|
|
|
17.1
|
|
3.6
|
|
57.3
|
|
21.2
|
Concrete
|
|
4.6
|
|
21.9
|
|
89.3
|
|
54.3
|
Calcium
|
|
|
|
|
1.1
|
|
0.3
|
|
2.6
|
|
2.2
|
Total
|
|
|
|
$349.9
|
|
$351.7
|
|
$1,557.7
|
|
$1,373.4
|
Depreciation,
Depletion, Accretion and Amortization
|
|
|
|
|
Aggregates
|
|
$116.7
|
|
$101.9
|
|
$441.1
|
|
$360.4
|
Asphalt
|
|
|
9.1
|
|
8.9
|
|
35.1
|
|
36.0
|
Concrete
|
|
19.6
|
|
24.9
|
|
83.1
|
|
41.5
|
Calcium
|
|
0.1
|
|
0.1
|
|
0.2
|
|
0.2
|
Other
|
|
|
|
7.0
|
|
6.2
|
|
28.0
|
|
24.9
|
Total
|
|
|
|
$152.5
|
|
$142.0
|
|
$587.5
|
|
$463.0
|
Average Unit Sales
Price and Unit Shipments
|
|
|
|
|
|
|
Aggregates
|
|
|
|
|
|
|
|
|
Freight-adjusted
revenues 3
|
|
$918.7
|
|
$860.9
|
|
$3,875.2
|
|
$3,313.9
|
Aggregates - tons
(thousands)
|
|
54,165
|
|
57,735
|
|
236,345
|
|
222,863
|
Freight-adjusted sales
price 4
|
|
$16.96
|
|
$14.91
|
|
$16.40
|
|
$14.87
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Products
|
|
|
|
|
|
|
|
|
Asphalt Mix - tons
(thousands)
|
|
2,782
|
|
2,839
|
|
12,156
|
|
11,392
|
Asphalt Mix - sales
price
|
|
$75.06
|
|
$60.50
|
|
$71.29
|
|
$58.83
|
|
|
|
|
|
|
|
|
|
|
|
|
Ready-mixed concrete -
cubic yards (thousands)
|
2,280
|
|
2,676
|
|
10,534
|
|
5,616
|
Ready-mixed concrete -
sales price
|
|
$157.58
|
|
$137.88
|
|
$150.82
|
|
$135.79
|
|
|
|
|
|
|
|
|
|
|
|
|
Calcium - tons
(thousands)
|
|
68
|
|
49
|
|
228
|
|
246
|
Calcium - sales
price
|
|
$36.23
|
|
$29.56
|
|
$34.27
|
|
$28.16
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Includes product sales (crushed stone,
sand and gravel, sand, and other aggregates), as well as freight
& delivery
|
costs that we pass along to our customers, and service
revenues related to aggregates.
|
|
|
|
|
2 Includes
product sales, as well as service revenues from our asphalt
construction paving business.
|
|
|
3
Freight-adjusted revenues are Aggregates
segment sales excluding freight & delivery revenues
and
|
|
|
other revenues related to services, such as landfill tipping
fees, that are derived from our aggregates business.
|
4
Freight-adjusted sales price is
calculated as freight-adjusted revenues divided by aggregates unit
shipments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix 1
|
1.
Reconciliation of Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates segment
freight-adjusted revenues is not a Generally Accepted Accounting
Principle (GAAP) measure and should not be considered as an
alternative to metrics defined by GAAP. We present this metric as
it is consistent with the basis by which we review our operating
results. We believe that this presentation is consistent with our
competitors and meaningful to our investors as it excludes revenues
associated with freight & delivery, which are pass-through
activities. It also excludes other revenues related to services,
such as landfill tipping fees, that are derived from our aggregates
business. Additionally, we use this metric as the basis for
calculating the average sales price of our aggregates products.
Reconciliation of this metric to its nearest GAAP measure is
presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates Segment
Freight-Adjusted Revenues
|
|
|
|
|
|
(in millions, except
per ton data)
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
December
31
|
|
December
31
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
Segment
sales
|
|
$1,259.3
|
|
$1,152.3
|
|
$5,272.8
|
|
$4,345.0
|
Less:
|
Freight & delivery
revenues 1
|
|
318.4
|
|
266.8
|
|
1,291.3
|
|
952.1
|
|
|
Other
revenues
|
|
22.2
|
|
24.6
|
|
106.3
|
|
79.0
|
Freight-adjusted
revenues
|
|
$918.7
|
|
$860.9
|
|
$3,875.2
|
|
$3,313.9
|
Unit shipments -
tons
|
|
54.2
|
|
57.7
|
|
236.3
|
|
222.9
|
Freight-adjusted sales
price
|
|
$16.96
|
|
$14.91
|
|
$16.40
|
|
$14.87
|
|
|
|
|
|
|
|
|
|
|
|
|
1 At the
segment level, freight & delivery revenues include intersegment
freight & delivery (which are eliminated at the consolidated
level) and freight to remote distribution sites.
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP does not define
"Cash gross profit," and it should not be considered as an
alternative to earnings measures defined by GAAP. We and the
investment community use this metric to assess the operating
performance of our business. Additionally, we present this metric
as we believe that it closely correlates to long-term shareholder
value. We do not use this metric as a measure to allocate
resources. Aggregates segment cash gross profit per ton is computed
by dividing Aggregates segment cash gross profit by tons shipped.
Reconciliation of this metric to its nearest GAAP measure is
presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Gross
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except
per ton data)
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
December
31
|
|
December
31
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Aggregates
segment
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$327.1
|
|
$325.9
|
|
$1,408.5
|
|
$1,295.7
|
Depreciation,
depletion, accretion and amortization
|
|
116.7
|
|
101.9
|
|
441.1
|
|
360.4
|
|
Aggregates segment cash
gross profit
|
|
$443.8
|
|
$427.8
|
|
$1,849.6
|
|
$1,656.1
|
Unit shipments -
tons
|
|
54.2
|
|
57.7
|
|
236.3
|
|
222.9
|
Aggregates segment
gross profit per ton
|
|
$6.04
|
|
$5.64
|
|
$5.96
|
|
$5.81
|
Aggregates segment cash
gross profit per ton
|
|
$8.19
|
|
$7.41
|
|
$7.83
|
|
$7.43
|
Asphalt
segment
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$17.1
|
|
$3.6
|
|
$57.3
|
|
$21.2
|
Depreciation,
depletion, accretion and amortization
|
|
9.1
|
|
8.9
|
|
35.1
|
|
36.0
|
|
Asphalt segment cash
gross profit
|
|
$26.2
|
|
$12.5
|
|
$92.4
|
|
$57.2
|
Concrete
segment
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$4.6
|
|
$21.9
|
|
$89.3
|
|
$54.3
|
Depreciation,
depletion, accretion and amortization
|
|
19.6
|
|
24.9
|
|
83.1
|
|
41.5
|
|
Concrete segment cash
gross profit
|
|
$24.2
|
|
$46.8
|
|
$172.4
|
|
$95.8
|
|
|
|
|
|
|
|
|
|
|
|
Appendix 2
|
Reconciliation of
Non-GAAP Measures (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP does not define
"Earnings Before Interest, Taxes, Depreciation and Amortization"
(EBITDA), and it should not be considered as an alternative to
earnings measures defined by GAAP. We use this metric to assess the
operating performance of our business and as a basis for strategic
planning and forecasting as we believe that it closely correlates
to long-term shareholder value. We do not use this metric as a
measure to allocate resources. We adjust EBITDA for certain items
to provide a more consistent comparison of earnings performance
from period to period. Reconciliation of this metric to its nearest
GAAP measure is presented below (numbers may not foot due to
rounding):
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA and Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
December
31
|
|
December
31
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net earnings
attributable to Vulcan
|
|
$119.4
|
|
$138.0
|
|
$575.6
|
|
$670.8
|
Income tax
expense
|
|
28.5
|
|
30.4
|
|
193.0
|
|
200.1
|
Interest expense,
net
|
|
47.6
|
|
36.1
|
|
168.4
|
|
147.7
|
Loss on discontinued
operations, net of tax
|
|
2.5
|
|
0.7
|
|
18.6
|
|
3.3
|
Depreciation,
depletion, accretion and amortization
|
|
152.5
|
|
142.0
|
|
587.5
|
|
463.0
|
EBITDA
|
|
|
$350.4
|
|
$347.2
|
|
$1,543.1
|
|
$1,484.9
|
|
(Gain) loss on sale of
real estate and businesses, net
|
|
$17.4
|
|
$0.0
|
|
($6.1)
|
|
($114.7)
|
|
Charges associated with
divested operations
|
|
2.1
|
|
0.5
|
|
3.1
|
|
1.5
|
|
Business development
1
|
|
2.4
|
|
8.4
|
|
10.6
|
|
34.4
|
|
COVID-19 direct
incremental costs
|
|
0.0
|
|
3.7
|
|
0.0
|
|
13.4
|
|
Pension settlement
charge
|
|
0.0
|
|
12.1
|
|
0.0
|
|
12.1
|
|
Loss on
impairments
|
|
0.0
|
|
0.0
|
|
67.8
|
|
4.6
|
|
Restructuring
charges
|
|
2.3
|
|
11.5
|
|
7.2
|
|
15.0
|
Adjusted
EBITDA
|
|
$374.7
|
|
$383.4
|
|
$1,625.6
|
|
$1,451.3
|
1
Represents non-routine charges or gains
associated with acquisitions and dispositions including the cost
impact of purchase accounting inventory
valuations.
|
|
|
|
|
|
|
|
|
|
|
|
|
Similar to our
presentation of Adjusted EBITDA, we present Adjusted diluted
earnings per share (EPS) attributable to Vulcan from continuing
operations to provide a more consistent comparison of earnings
performance from period to period. This metric is not defined by
GAAP and should not be considered as an alternative to earnings
measures defined by GAAP. Reconciliation of this metric to its
nearest GAAP measure is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted EPS
attributable to Vulcan from Continuing Operations (Adjusted Diluted
EPS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
December
31
|
|
December
31
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net earnings
attributable to Vulcan
|
|
$0.89
|
|
$1.03
|
|
$4.31
|
|
$5.02
|
Less:
Discontinued operations
|
|
(0.02)
|
|
(0.01)
|
|
(0.14)
|
|
(0.03)
|
Diluted EPS
attributable to Vulcan from continuing operations
|
$0.91
|
|
$1.04
|
|
$4.45
|
|
$5.05
|
Items included in
Adjusted EBITDA above, net of tax
|
|
0.13
|
|
0.21
|
|
0.55
|
|
(0.16)
|
NOL carryforward
valuation allowance
|
|
0.04
|
|
0.00
|
|
0.11
|
|
0.10
|
Acquisition financing
interest costs
|
|
0.00
|
|
0.00
|
|
0.00
|
|
0.05
|
Adjusted diluted EPS
attributable to Vulcan from
|
|
|
|
|
|
|
|
|
|
continuing
operations
|
|
$1.08
|
|
$1.25
|
|
$5.11
|
|
$5.04
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
reconciliation to the mid-point of the range of 2023 Projected
EBITDA excludes adjustments (as noted in Adjusted EBITDA above) as
they are difficult to forecast (timing or amount). Due to the
difficulty in forecasting such adjustments, we are unable to
estimate their significance. This metric is not defined by GAAP and
should not be considered as an alternative to earnings measures
defined by GAAP. Reconciliation of this metric to its nearest GAAP
measure is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Projected
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Mid-point
|
Net earnings
attributable to Vulcan
|
|
|
|
|
|
|
|
$775
|
Income tax
expense
|
|
|
|
|
|
|
|
220
|
Interest expense, net
of interest income
|
|
|
|
|
|
|
|
195
|
Discontinued
operations, net of tax
|
|
|
|
|
|
|
|
0
|
Depreciation,
depletion, accretion and amortization
|
|
|
|
|
|
|
|
610
|
Projected
EBITDA
|
|
|
|
|
|
|
|
$1,800
|
|
|
|
|
|
|
|
|
|
|
|
|
Because GAAP financial
measures on a forward-looking basis are not accessible, and
reconciling information is not available without unreasonable
effort, we have not provided reconciliations for forward-looking
non-GAAP measures, other than the reconciliation of Projected
EBITDA as noted above. For the same reasons, we are unable to
address the probable significance of the unavailable information,
which could be material to future results.
|
|
|
|
|
|
|
|
|
|
|
|
Appendix 3
|
Reconciliation of
Non-GAAP Measures (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt to Adjusted
EBITDA is not a GAAP measure and should not be considered as an
alternative to metrics defined by GAAP. We, the investment
community and credit rating agencies use this metric to assess our
leverage. Net debt subtracts cash and cash equivalents and
restricted cash from total debt. Reconciliation of this metric to
its nearest GAAP measure is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
December
31
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
Debt
|
|
|
|
|
|
|
|
|
|
|
Current maturities of
long-term debt
|
|
|
|
|
|
$0.5
|
|
$5.2
|
Short-term
debt
|
|
|
|
|
|
100.0
|
|
0.0
|
Long-term
debt
|
|
|
|
|
|
3,875.2
|
|
3,874.8
|
Total debt
|
|
|
|
|
|
$3,975.7
|
|
$3,880.0
|
Less: Cash and cash
equivalents and restricted cash
|
|
|
|
|
|
161.5
|
|
241.5
|
Net debt
|
|
|
|
|
|
$3,814.2
|
|
$3,638.5
|
Trailing-Twelve Months
(TTM) Adjusted EBITDA
|
|
|
|
|
|
$1,625.6
|
|
$1,451.3
|
Total debt to TTM
Adjusted EBITDA
|
|
|
|
|
|
2.4x
|
|
2.7x
|
Net debt to TTM
Adjusted EBITDA
|
|
|
|
|
|
2.3x
|
|
2.5x
|
|
|
|
|
|
|
|
|
|
|
|
|
We define "Return on
Invested Capital" (ROIC) as Adjusted EBITDA for the trailing-twelve
months divided by average invested capital (as illustrated below)
during the trailing 5-quarters. Our calculation of ROIC is
considered a non-GAAP financial measure because we calculate ROIC
using the non-GAAP metric EBITDA. We believe that our ROIC metric
is meaningful because it helps investors assess how effectively we
are deploying our assets. Although ROIC is a standard financial
metric, numerous methods exist for calculating a company's ROIC. As
a result, the method we use to calculate our ROIC may differ from
the methods used by other companies. This metric is not defined by
GAAP and should not be considered as an alternative to earnings
measures defined by GAAP. Reconciliation of this metric to its
nearest GAAP measure is presented below (numbers may not foot due
to rounding):
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Invested
Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
|
|
|
December
31
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
Adjusted
EBITDA
|
|
|
|
|
|
$1,625.6
|
|
$1,451.3
|
Average invested
capital
|
|
|
|
|
|
|
|
|
|
Property, plant &
equipment, net
|
|
|
|
|
|
$5,810.4
|
|
$4,849.7
|
|
Goodwill
|
|
|
|
|
|
3,708.5
|
|
3,377.6
|
|
Other intangible
assets
|
|
|
|
|
|
1,737.5
|
|
1,382.0
|
|
Fixed and intangible
assets
|
|
|
|
|
|
$11,256.4
|
|
$9,609.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
$1,898.8
|
|
$1,977.1
|
|
Less: Cash and cash
equivalents
|
|
|
|
|
|
161.3
|
|
687.1
|
|
Less: Current
tax
|
|
|
|
|
|
47.2
|
|
32.9
|
|
Adjusted current
assets
|
|
|
|
|
|
1,690.3
|
|
1,257.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
1,002.1
|
|
771.8
|
|
Less: Current
maturities of long-term debt
|
|
|
|
|
|
2.1
|
|
112.8
|
|
Less: Short-term
debt
|
|
|
|
|
|
137.6
|
|
0.0
|
|
Adjusted current
liabilities
|
|
|
|
|
|
862.4
|
|
659.0
|
|
Adjusted net working
capital
|
|
|
|
|
|
$827.9
|
|
$598.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Average invested
capital
|
|
|
|
|
|
$12,084.3
|
|
$10,207.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on invested
capital
|
|
|
|
|
|
13.5 %
|
|
14.2 %
|
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SOURCE Vulcan Materials Company