Exhibit 99.1
November 4, 2021
FOR IMMEDIATE RELEASE
Investor Contact: Mark Warren (205) 298-3220
Media Contact: Janet Kavinoky (205) 298-3220
VULCAN REPORTS THIRD QUARTER 2021 RESULTS
Strong Execution in Aggregates Unit Profitability
Pricing Gains Across All Product Lines Support Increased Full Year Earnings Outlook
Birmingham, Alabama – November 4, 2021 – Vulcan Materials Company (NYSE: VMC), the nation’s largest producer of construction aggregates, today announced results for the quarter ended September 30, 2021.
Third Quarter Financial and Operating Highlights:
| · | The Company successfully closed the U.S. Concrete (“USCR”) acquisition on August 26, 2021 |
| o | Unless noted otherwise, consolidated figures include USCR’s results since closing |
| · | Total Revenues were $1.52 billion, an increase of 16 percent compared to the prior year |
| · | Operating earnings were $262 million compared with $288 million in the prior year |
| o | Include $28 million in acquisition-related expenses and $6 million in other discrete charges |
| o | 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 percent, to $372 million |
| o | Same-store volumes increased 5 percent, and mix-adjusted price increased 3.5 percent |
| · | 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 percent to $418 million |
| · | Full year Adjusted EBITDA guidance increased to between $1.430 and $1.460 billion |
Tom Hill, Chairman and Chief Executive Officer, said, “Our aggregates-focused business is built for times like these. We expanded our industry-leading trailing-twelve month unit profitability for the thirteenth 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.”
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Mr. Hill continued, “Throughout a difficult eighteen months of pandemic disruptions and economic challenges, our people strengthened their operating disciplines and moved pricing higher. Now that trailing-twelve 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.”
Highlights as of September 30, 2021 include:
| Third Quarter | Year-to-Date | Trailing-Twelve Months | ||||||||||||||||||||||
| Amounts in millions, except per unit data | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||
| Total revenues | $ | 1,516.5 | $ | 1,309.9 | $ | 3,945.9 | $ | 3,681.7 | $ | 5,121.0 | $ | 4,867.9 | ||||||||||||
| Gross profit | $ | 394.1 | $ | 380.5 | $ | 1,021.7 | $ | 978.7 | $ | 1,324.4 | $ | 1,271.8 | ||||||||||||
| Aggregates segment | ||||||||||||||||||||||||
| Segment sales | $ | 1,172.4 | $ | 1,049.0 | $ | 3,192.7 | $ | 2,987.8 | $ | 4,149.2 | $ | 3,947.9 | ||||||||||||
| Freight-adjusted revenue | $ | 898.0 | $ | 807.6 | $ | 2,453.1 | $ | 2,270.3 | $ | 3,190.4 | $ | 2,990.9 | ||||||||||||
| Gross profit | $ | 372.3 | $ | 337.9 | $ | 969.8 | $ | 883.2 | $ | 1,245.8 | $ | 1,157.7 | ||||||||||||
| Shipments (tons) | 60.2 | 55.9 | 165.1 | 157.2 | 216.3 | 208.8 | ||||||||||||||||||
| Freight-adjusted sales price per ton | $ | 14.93 | $ | 14.44 | $ | 14.86 | $ | 14.45 | $ | 14.75 | $ | 14.33 | ||||||||||||
| Gross profit per ton | $ | 6.19 | $ | 6.04 | $ | 5.87 | $ | 5.62 | $ | 5.76 | $ | 5.54 | ||||||||||||
| Asphalt, Concrete & Calcium segment gross profit | $ | 21.7 | $ | 42.6 | $ | 51.9 | $ | 95.6 | $ | 78.6 | $ | 114.1 | ||||||||||||
| Selling, Administrative and General (SAG) | $ | 103.8 | $ | 83.5 | $ | 293.1 | $ | 261.1 | $ | 391.7 | $ | 356.9 | ||||||||||||
| SAG as % of Total revenues | 6.8 | % | 6.4 | % | 7.4 | % | 7.1 | % | 7.6 | % | 7.3 | % | ||||||||||||
| Earnings from continuing operations before income taxes | $ | 228.7 | $ | 258.1 | $ | 705.1 | $ | 602.6 | $ | 846.3 | $ | 768.6 | ||||||||||||
| Net earnings | $ | 176.9 | $ | 199.8 | $ | 532.9 | $ | 470.0 | $ | 647.4 | $ | 611.1 | ||||||||||||
| Adjusted EBIT | $ | 300.2 | $ | 302.5 | $ | 747.0 | $ | 716.4 | $ | 957.3 | $ | 919.2 | ||||||||||||
| Adjusted EBITDA | $ | 417.7 | $ | 403.5 | $ | 1,068.0 | $ | 1,012.3 | $ | 1,379.2 | $ | 1,310.8 | ||||||||||||
| Earnings attributable to Vulcan from continuing operations, per diluted share | $ | 1.33 | $ | 1.51 | $ | 4.01 | $ | 3.54 | $ | 4.88 | $ | 4.61 | ||||||||||||
| Adjusted earnings attributable to Vulcan from continuing operations, per diluted share | $ | 1.54 | $ | 1.56 | $ | 3.80 | $ | 3.62 | $ | 4.86 | $ | 4.70 | ||||||||||||
Segment Results
Aggregates
Third quarter segment sales were $1.17 billion, while gross profit increased 10 percent 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 percent. Same-store aggregates shipments increased 5 percent, 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 percent year-over-year (mix-adjusted pricing increased 3.5 percent) with the growth widespread across geographies.
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In the third quarter, solid execution helped to offset a more than 50 percent 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 percent over the prior year’s third quarter but decreased almost 1 percent excluding the impact of higher diesel prices. Total cash gross profit improved 3 percent 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.
Asphalt, Concrete and Calcium
Asphalt segment gross profit was $7 million in the quarter compared to $30 million in the prior year period. The decrease in earnings was driven primarily by the impact of sharply higher energy costs and weather-related impacts on volumes.
The average cost of liquid asphalt during the third quarter was over $100 per ton higher than in the same period last year (a $16 million impact in the quarter). A rise in the cost of natural gas, used in plant production, also negatively affected quarterly gross profit. Average selling prices for asphalt mix increased 2 percent, or $1.07 per ton, versus the prior year’s third quarter as pricing actions began to gain traction. Efforts to mitigate the earnings impact of energy inflation will continue with positive results expected in the first half of next year. Asphalt volumes declined 8 percent as volume growth in California was more than offset by lower volumes in Arizona. A record-setting number of rainy days disrupted asphalt shipments in Arizona, the Company’s second largest asphalt market. Additionally, construction activity in Tennessee was also negatively impacted by hurricane-related wet weather.
Third quarter Concrete segment gross profit increased 18 percent to $14 million. The current year’s third quarter includes results from USCR’s operations. Same-store shipments decreased 7 percent versus the prior year due to fewer large projects in the current year’s quarter, while same-store average selling prices increased 2 percent compared to the prior year. Segment results were negatively impacted by higher diesel prices and by the availability of drivers in certain markets.
Calcium segment gross profit was $0.3 million compared to $0.2 million the prior year quarter.
Selling, Administrative and General (SAG)
SAG expense was $104 million in the quarter, or 6.8 percent of total revenues. The current year’s third quarter includes overhead expenses associated with the USCR business that were not in the prior year’s quarter. Additionally, increased routine business development activities and more normalized travel expenses, due in part to integration activities, contributed to the year-over-year increase.
Financial Position, Liquidity and Capital Allocation
Capital expenditures in the third quarter were $127 million, including $69 million for growth projects. Year-to-date capital expenditures total approximately $292 million. For the full year 2021, the Company expects to spend between $450 and $475 million on capital expenditures, including growth projects. The Company will continue to review its plans and will adjust as needed, while being thoughtful about preserving liquidity.
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At September 30, 2021, the ratio of total debt to Adjusted EBITDA was 2.8 times (2.7 times on a net debt basis) reflecting financing actions taken to complete the USCR acquisition during the quarter. The Company remains committed to its stated target leverage range of 2.0 to 2.5 times.
Interest expense, net of interest income, was $37 million in the third quarter compared with $36 million in the prior year. Year-to-date, interest expense, net of interest income, was $112 million compared to $101 million in the prior year. This increase includes $9 million of cost in the second quarter associated with financing the pending acquisition of USCR. The Company expects full year interest expense to be approximately $145 million.
On a trailing-twelve month basis, return on invested capital was 14.2 percent, reflecting the investment in USCR and its earnings contribution since August 26, 2021. The Company remains committed to driving further improvement through solid operating earnings growth coupled with disciplined capital management and a balanced approach to growth.
Outlook
Regarding the Company’s current expectations for 2021, Mr. Hill said, “We are increasing our full-year Adjusted EBITDA range to reflect the earnings contribution of U.S. Concrete as well as the recent trends in demand, price and cost inflation. As a result, we expect full-year Adjusted EBITDA to be between $1.430 to $1.460 billion in 2021 (excluding the $115 million gain from a land sale completed in the first quarter and including the U.S. Concrete acquisition).”
Mr. Hill concluded, “As we look ahead, we believe our aggregates-focused business is uniquely positioned for broad participation in improving demand and is capable of navigating any changes in the macro environment. The USCR acquisition extends our growth platform, and we are excited about the opportunities in front of us. The prospects continue to be positive for the most significant federal investment in infrastructure since the creation of the Interstate Highway System in 1956, and we are well situated with leading positions in attractive growth areas where the need is greatest. Finally, we expect favorable pricing dynamics to continue, leading to attractive price growth.”
Conference Call
Vulcan will host a conference call at 9:00 a.m. CT on November 4, 2021. 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 866-831-8713, or 203-518-9797 if outside the U.S., approximately 10 minutes before the scheduled start. The conference ID is 8413025. 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.
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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; the highly competitive nature of the construction industry; the impact of future regulatory or legislative actions, including those relating to climate change, wetlands, greenhouse gas emissions, the definition of minerals, tax policy or 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; the amount of long-term debt and interest expense incurred by Vulcan; changes in interest rates; the impact of a discontinuation of the London Interbank Offered Rate (LIBOR); 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; 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.
Source: Vulcan Materials Company
Table A
Vulcan Materials Company
and Subsidiary Companies
| (in thousands, except per share data) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| Consolidated Statements of Earnings | September 30 | September 30 | ||||||||||||||
| (Condensed and unaudited) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Total revenues | $ | 1,516,506 | $ | 1,309,890 | $ | 3,945,897 | $ | 3,681,707 | ||||||||
| Cost of revenues | 1,122,445 | 929,392 | 2,924,206 | 2,702,967 | ||||||||||||
| Gross profit | 394,061 | 380,498 | 1,021,691 | 978,740 | ||||||||||||
| Selling, administrative and general expenses | 103,792 | 83,511 | 293,052 | 261,146 | ||||||||||||
| Gain on sale of property, plant & equipment | ||||||||||||||||
| and businesses | 2,940 | 1,576 | 120,316 | 2,317 | ||||||||||||
| Other operating expense, net | (30,843 | ) | (10,459 | ) | (49,541 | ) | (20,610 | ) | ||||||||
| Operating earnings | 262,366 | 288,104 | 799,414 | 699,301 | ||||||||||||
| Other nonoperating income, net | 3,152 | 5,787 | 17,288 | 3,817 | ||||||||||||
| Interest expense, net | 36,776 | 35,782 | 111,589 | 100,508 | ||||||||||||
| Earnings from continuing operations | ||||||||||||||||
| before income taxes | 228,742 | 258,109 | 705,113 | 602,610 | ||||||||||||
| Income tax expense | 51,770 | 56,984 | 169,692 | 130,530 | ||||||||||||
| Earnings from continuing operations | 176,972 | 201,125 | 535,421 | 472,080 | ||||||||||||
| Loss on discontinued operations, net of tax | (212 | ) | (1,337 | ) | (2,702 | ) | (2,118 | ) | ||||||||
| Net earnings | 176,760 | 199,788 | 532,719 | 469,962 | ||||||||||||
| Loss attributable to noncontrolling interest | 146 | 0 | 146 | 0 | ||||||||||||
| Net earnings attributable to Vulcan | $ | 176,906 | $ | 199,788 | $ | 532,865 | $ | 469,962 | ||||||||
| Basic earnings (loss) per share attributable to Vulcan | ||||||||||||||||
| Continuing operations | $ | 1.33 | $ | 1.52 | $ | 4.03 | $ | 3.56 | ||||||||
| Discontinued operations | $ | 0.00 | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.01 | ) | |||||
| Net earnings attributable to Vulcan | $ | 1.33 | $ | 1.51 | $ | 4.01 | $ | 3.55 | ||||||||
| Diluted earnings (loss) per share attributable to Vulcan | ||||||||||||||||
| Continuing operations | $ | 1.33 | $ | 1.51 | $ | 4.01 | $ | 3.54 | ||||||||
| Discontinued operations | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.01 | ) | ||||
| Net earnings attributable to Vulcan | $ | 1.32 | $ | 1.50 | $ | 3.99 | $ | 3.53 | ||||||||
| Weighted-average common shares outstanding | ||||||||||||||||
| Basic | 132,810 | 132,573 | 132,780 | 132,564 | ||||||||||||
| Assuming dilution | 133,544 | 133,268 | 133,480 | 133,192 | ||||||||||||
| Effective tax rate from continuing operations | 22.6 | % | 22.1 | % | 24.1 | % | 21.7 | % | ||||||||
Table B
Vulcan Materials Company
and Subsidiary Companies
| (in thousands) | ||||||||||||
| Consolidated Balance Sheets | September 30 | December 31 | September 30 | |||||||||
| (Condensed and unaudited) | 2021 | 2020 | 2020 | |||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 135,683 | $ | 1,197,068 | $ | 1,084,100 | ||||||
| Restricted cash | 747 | 945 | 630 | |||||||||
| Accounts and notes receivable | ||||||||||||
| Accounts and notes receivable, gross | 948,347 | 558,848 | 647,362 | |||||||||
| Allowance for doubtful accounts | (10,158 | ) | (2,551 | ) | (3,155 | ) | ||||||
| Accounts and notes receivable, net | 938,189 | 556,297 | 644,207 | |||||||||
| Inventories | ||||||||||||
| Finished products | 411,872 | 378,389 | 384,575 | |||||||||
| Raw materials | 58,223 | 33,780 | 34,562 | |||||||||
| Products in process | 3,815 | 4,555 | 5,098 | |||||||||
| Operating supplies and other | 38,320 | 31,861 | 31,226 | |||||||||
| Inventories | 512,230 | 448,585 | 455,461 | |||||||||
| Other current assets | 131,567 | 74,270 | 80,935 | |||||||||
| Total current assets | 1,718,416 | 2,277,165 | 2,265,333 | |||||||||
| Investments and long-term receivables | 34,108 | 34,301 | 41,778 | |||||||||
| Property, plant & equipment | ||||||||||||
| Property, plant & equipment, cost | 10,362,862 | 9,102,086 | 8,958,342 | |||||||||
| Allowances for depreciation, depletion & amortization | (4,815,913 | ) | (4,676,087 | ) | (4,614,543 | ) | ||||||
| Property, plant & equipment, net | 5,546,949 | 4,425,999 | 4,343,799 | |||||||||
| Operating lease right-of-use assets, net | 656,881 | 423,128 | 431,227 | |||||||||
| Goodwill | 3,674,763 | 3,172,112 | 3,172,112 | |||||||||
| Other intangible assets, net | 1,819,778 | 1,123,544 | 1,107,091 | |||||||||
| Other noncurrent assets | 237,107 | 230,656 | 229,193 | |||||||||
| Total assets | $ | 13,688,002 | $ | 11,686,905 | $ | 11,590,533 | ||||||
| Liabilities | ||||||||||||
| Current maturities of long-term debt | 12,228 | 515,435 | 509,435 | |||||||||
| Trade payables and accruals | 410,340 | 273,080 | 263,296 | |||||||||
| Other current liabilities | 454,125 | 259,368 | 297,162 | |||||||||
| Total current liabilities | 876,693 | 1,047,883 | 1,069,893 | |||||||||
| Long-term debt | 3,874,116 | 2,772,240 | 2,777,072 | |||||||||
| Deferred income taxes, net | 1,053,415 | 706,050 | 685,520 | |||||||||
| Deferred revenue | 168,138 | 174,045 | 174,488 | |||||||||
| Noncurrent operating lease liabilities | 622,275 | 399,582 | 407,336 | |||||||||
| Other noncurrent liabilities | 644,226 | 559,775 | 547,872 | |||||||||
| Total liabilities | $ | 7,238,863 | $ | 5,659,575 | $ | 5,662,181 | ||||||
| Equity | ||||||||||||
| Common stock, $1 par value | 132,704 | 132,516 | 132,454 | |||||||||
| Capital in excess of par value | 2,810,257 | 2,802,012 | 2,797,222 | |||||||||
| Retained earnings | 3,659,657 | 3,274,107 | 3,204,671 | |||||||||
| Accumulated other comprehensive loss | (176,520 | ) | (181,305 | ) | (205,995 | ) | ||||||
| Total shareholder's equity | 6,426,098 | 6,027,330 | 5,928,352 | |||||||||
| Noncontrolling interest | 23,041 | 0 | 0 | |||||||||
| Total equity | $ | 6,449,139 | $ | 6,027,330 | $ | 5,928,352 | ||||||
| Total liabilities and equity | $ | 13,688,002 | $ | 11,686,905 | $ | 11,590,533 | ||||||
Table C
Vulcan Materials Company
and Subsidiary Companies
| (in thousands) | ||||||||
| Nine Months Ended | ||||||||
| Consolidated Statements of Cash Flows | September 30 | |||||||
| (Condensed and unaudited) | 2021 | 2020 | ||||||
| Operating Activities | ||||||||
| Net earnings | $ | 532,719 | $ | 469,962 | ||||
| Adjustments to reconcile net earnings to net cash provided by operating activities | ||||||||
| Depreciation, depletion, accretion and amortization | 320,992 | 295,912 | ||||||
| Noncash operating lease expense | 32,697 | 27,820 | ||||||
| Net gain on sale of property, plant & equipment and businesses | (120,316 | ) | (2,317 | ) | ||||
| Contributions to pension plans | (6,032 | ) | (6,540 | ) | ||||
| Share-based compensation expense | 25,200 | 23,239 | ||||||
| Deferred tax expense | 71,449 | 50,346 | ||||||
| Changes in assets and liabilities before initial | ||||||||
| effects of business acquisitions and dispositions | (144,635 | ) | (76,545 | ) | ||||
| Other, net | 12,742 | (3,951 | ) | |||||
| Net cash provided by operating activities | $ | 724,816 | $ | 777,926 | ||||
| Investing Activities | ||||||||
| Purchases of property, plant & equipment | (318,620 | ) | (268,989 | ) | ||||
| Proceeds from sale of property, plant & equipment | 192,367 | 9,440 | ||||||
| Proceeds from sale of businesses | 0 | 651 | ||||||
| Payment for businesses acquired, net of acquired cash | (1,634,492 | ) | (5,668 | ) | ||||
| Other, net | 161 | 10,819 | ||||||
| Net cash used for investing activities | $ | (1,760,584 | ) | $ | (253,747 | ) | ||
| Financing Activities | ||||||||
| Payment of current maturities and long-term debt | (1,444,024 | ) | (250,018 | ) | ||||
| Proceeds from issuance of long-term debt | 1,600,000 | 750,000 | ||||||
| Debt issuance and exchange costs | (13,286 | ) | (15,394 | ) | ||||
| Settlements of interest rate derivatives | 0 | (19,863 | ) | |||||
| Purchases of common stock | 0 | (26,132 | ) | |||||
| Dividends paid | (147,267 | ) | (135,161 | ) | ||||
| Share-based compensation, shares withheld for taxes | (15,776 | ) | (16,303 | ) | ||||
| Other, net | (5,462 | ) | (1,084 | ) | ||||
| Net cash provided by (used for) financing activities | $ | (25,815 | ) | $ | 286,045 | |||
| Net increase (decrease) in cash and cash equivalents and restricted cash | (1,061,583 | ) | 810,224 | |||||
| Cash and cash equivalents and restricted cash at beginning of year | 1,198,013 | 274,506 | ||||||
| Cash and cash equivalents and restricted cash at end of period | $ | 136,430 | $ | 1,084,730 | ||||
Table D
Segment Financial Data and Unit Shipments
| (in thousands, except per unit data) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Total Revenues | ||||||||||||||||
| Aggregates 1 | $ | 1,172,409 | $ | 1,048,962 | $ | 3,192,685 | $ | 2,987,784 | ||||||||
| Asphalt 2 | 220,652 | 235,201 | 580,396 | 597,940 | ||||||||||||
| Concrete | 219,225 | 102,807 | 396,785 | 298,255 | ||||||||||||
| Calcium | 1,474 | 1,354 | 5,494 | 5,269 | ||||||||||||
| Segment sales | $ | 1,613,760 | $ | 1,388,324 | $ | 4,175,360 | $ | 3,889,248 | ||||||||
| Aggregates intersegment sales | (97,254 | ) | (78,434 | ) | (229,463 | ) | (207,541 | ) | ||||||||
| Total revenues | $ | 1,516,506 | $ | 1,309,890 | $ | 3,945,897 | $ | 3,681,707 | ||||||||
| Gross Profit | ||||||||||||||||
| Aggregates | $ | 372,346 | $ | 337,891 | $ | 969,817 | $ | 883,184 | ||||||||
| Asphalt | 7,075 | 30,217 | 17,616 | 58,246 | ||||||||||||
| Concrete | 14,301 | 12,157 | 32,362 | 35,597 | ||||||||||||
| Calcium | 339 | 233 | 1,896 | 1,713 | ||||||||||||
| Total | $ | 394,061 | $ | 380,498 | $ | 1,021,691 | $ | 978,740 | ||||||||
| Depreciation, Depletion, Accretion and Amortization | ||||||||||||||||
| Aggregates | $ | 93,344 | $ | 82,487 | $ | 258,480 | $ | 240,370 | ||||||||
| Asphalt | 8,956 | 8,644 | 27,111 | 26,046 | ||||||||||||
| Concrete | 8,655 | 3,987 | 16,633 | 12,070 | ||||||||||||
| Calcium | 38 | 49 | 116 | 146 | ||||||||||||
| Other | 6,524 | 5,795 | 18,652 | 17,280 | ||||||||||||
| Total | $ | 117,517 | $ | 100,962 | $ | 320,992 | $ | 295,912 | ||||||||
| Average Unit Sales Price and Unit Shipments | ||||||||||||||||
| Aggregates | ||||||||||||||||
| Freight-adjusted revenues 3 | $ | 897,963 | $ | 807,575 | $ | 2,453,089 | $ | 2,270,321 | ||||||||
| Aggregates - tons | 60,163 | 55,920 | 165,128 | 157,163 | ||||||||||||
| Freight-adjusted sales price 4 | $ | 14.93 | $ | 14.44 | $ | 14.86 | $ | 14.45 | ||||||||
| Other Products | ||||||||||||||||
| Asphalt Mix - tons | 3,202 | 3,493 | 8,553 | 8,953 | ||||||||||||
| Asphalt Mix - sales price | $ | 59.43 | $ | 58.36 | $ | 58.27 | $ | 58.05 | ||||||||
| Ready-mixed concrete - cubic yards | 1,596 | 775 | 2,940 | 2,295 | ||||||||||||
| Ready-mixed concrete - sales price | $ | 136.29 | $ | 131.51 | $ | 133.88 | $ | 128.93 | ||||||||
| Calcium - tons | 52 | 49 | 197 | 193 | ||||||||||||
| Calcium - sales price | $ | 28.29 | $ | 27.51 | $ | 27.81 | $ | 27.18 | ||||||||
| 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 immaterial 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 immaterial 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 thousands, except per ton data) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Aggregates segment | ||||||||||||||||
| Segment sales | $ | 1,172,409 | $ | 1,048,962 | $ | 3,192,685 | $ | 2,987,784 | ||||||||
| Less: Freight & delivery revenues 1 | 253,084 | 225,382 | 685,156 | 671,969 | ||||||||||||
| Other revenues | 21,362 | 16,005 | 54,440 | 45,494 | ||||||||||||
| Freight-adjusted revenues | $ | 897,963 | $ | 807,575 | $ | 2,453,089 | $ | 2,270,321 | ||||||||
| Unit shipment - tons | 60,163 | 55,920 | 165,128 | 157,163 | ||||||||||||
| Freight-adjusted sales price | $ | 14.93 | $ | 14.44 | $ | 14.86 | $ | 14.45 | ||||||||
| 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. |
Aggregates segment incremental gross profit flow-through rate is not a GAAP measure and represents the year-over-year change in gross profit divided by the year-over-year change in segment sales excluding freight & delivery (revenues and costs). This metric 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. Reconciliation of this metric to its nearest GAAP measure is presented below:
| Aggregates Segment Incremental Gross Profit Margin in Accordance with GAAP | ||||||||||||||||
| (dollars in thousands) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Aggregates segment | ||||||||||||||||
| Gross profit | $ | 372,346 | $ | 337,891 | $ | 969,817 | $ | 883,184 | ||||||||
| Segment sales | $ | 1,172,409 | $ | 1,048,962 | $ | 3,192,685 | $ | 2,987,784 | ||||||||
| Gross profit margin | 31.8 | % | 32.2 | % | 30.4 | % | 29.6 | % | ||||||||
| Incremental gross profit margin | 27.9 | % | 42.3 | % | ||||||||||||
| Aggregates Segment Incremental Gross Profit Flow-through Rate (Non-GAAP) | ||||||||||||||||
| (dollars in thousands) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Aggregates segment | ||||||||||||||||
| Gross profit | $ | 372,346 | $ | 337,891 | $ | 969,817 | $ | 883,184 | ||||||||
| Segment sales | $ | 1,172,409 | $ | 1,048,962 | $ | 3,192,685 | $ | 2,987,784 | ||||||||
| Less: Freight & delivery revenues 1 | 253,084 | 225,382 | 685,156 | 671,969 | ||||||||||||
| Segment sales excluding freight & delivery | $ | 919,325 | $ | 823,580 | $ | 2,507,529 | $ | 2,315,815 | ||||||||
| Gross profit margin excluding freight & delivery | 40.5 | % | 41.0 | % | 38.7 | % | 38.1 | % | ||||||||
| Incremental gross profit flow-through rate | 36.0 | % | 45.2 | % | ||||||||||||
| 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 "Aggregates segment 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:
| Aggregates Segment Cash Gross Profit | ||||||||||||||||
| (in thousands, except per ton data) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Aggregates segment | ||||||||||||||||
| Gross profit | $ | 372,346 | $ | 337,891 | $ | 969,817 | $ | 883,184 | ||||||||
| Depreciation, depletion, accretion and amortization | 93,344 | 82,487 | 258,480 | 240,370 | ||||||||||||
| Aggregates segment cash gross profit | $ | 465,690 | $ | 420,378 | $ | 1,228,297 | $ | 1,123,554 | ||||||||
| Unit shipments - tons | 60,163 | 55,920 | 165,128 | 157,163 | ||||||||||||
| Aggregates segment cash gross profit per ton | $ | 7.74 | $ | 7.52 | $ | 7.44 | $ | 7.15 | ||||||||
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:
| EBITDA and Adjusted EBITDA | ||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | TTM | ||||||||||||||||||||||
| September 30 | September 30 | September 30 | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Net earnings attributable to Vulcan | $ | 176,906 | $ | 199,788 | $ | 532,865 | $ | 469,962 | $ | 647,383 | $ | 611,055 | ||||||||||||
| Income tax expense | 51,770 | 56,984 | 169,692 | 130,530 | 194,965 | 153,964 | ||||||||||||||||||
| Interest expense, net | 36,776 | 35,782 | 111,589 | 100,508 | 145,473 | 131,343 | ||||||||||||||||||
| Loss on discontinued operations, net of tax | 212 | 1,337 | 2,702 | 2,118 | 4,099 | 3,621 | ||||||||||||||||||
| EBIT | $ | 265,664 | $ | 293,891 | $ | 816,848 | $ | 703,118 | $ | 991,920 | $ | 899,983 | ||||||||||||
| Depreciation, depletion, accretion and amortization | 117,517 | 100,962 | 320,992 | 295,912 | 421,886 | 391,583 | ||||||||||||||||||
| EBITDA | $ | 383,181 | $ | 394,853 | $ | 1,137,840 | $ | 999,030 | $ | 1,413,806 | $ | 1,291,566 | ||||||||||||
| Gain on sale of real estate and businesses, net | 0 | 0 | (114,695 | ) | 0 | (114,695 | ) | (9,289 | ) | |||||||||||||||
| Property donation | 0 | 0 | 0 | 0 | 0 | 10,847 | ||||||||||||||||||
| Charges associated with divested operations | 404 | 5,892 | 1,090 | 6,666 | 1,359 | 9,699 | ||||||||||||||||||
| Business development 1 | 24,683 | 346 | 30,558 | (2,113 | ) | 40,005 | (768 | ) | ||||||||||||||||
| COVID-19 direct incremental costs 2 | 5,902 | 2,380 | 9,688 | 7,389 | 12,469 | 7,389 | ||||||||||||||||||
| Pension settlement charge | 0 | 0 | 0 | 0 | 22,740 | 0 | ||||||||||||||||||
| Restructuring charges | 3,516 | 0 | 3,516 | 1,333 | 3,516 | 1,333 | ||||||||||||||||||
| Adjusted EBITDA | $ | 417,686 | $ | 403,471 | $ | 1,067,997 | $ | 1,012,305 | $ | 1,379,200 | $ | 1,310,777 | ||||||||||||
| Depreciation, depletion, accretion and amortization | (117,517 | ) | (100,962 | ) | (320,992 | ) | (295,912 | ) | (421,886 | ) | (391,583 | ) | ||||||||||||
| Adjusted EBIT | $ | 300,169 | $ | 302,509 | $ | 747,005 | $ | 716,393 | $ | 957,314 | $ | 919,194 | ||||||||||||
| Adjusted EBITDA margin | 27.5 | % | 30.8 | % | 27.1 | % | 27.5 | % | 26.9 | % | 26.9 | % | ||||||||||||
| 1 | Represents non-routine charges or gains associated with acquisitions and dispositions. Costs in the third quarter of 2021 include USCR acquisition related expenses of $21,092,000 and the cost impact of purchase accounting inventory valuations of $3,000,000. |
| 2 | These costs include $3,049,000 related to our COVID-19 vaccination incentive program initiated in the third quarter of 2021. |
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 | Nine Months Ended | TTM | ||||||||||||||||||||||
| September 30 | September 30 | September 30 | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Diluted EPS attributable to Vulcan from continuing operations | $ | 1.33 | $ | 1.51 | $ | 4.01 | $ | 3.54 | $ | 4.88 | $ | 4.61 | ||||||||||||
| Items included in Adjusted EBITDA above | 0.21 | 0.05 | (0.36 | ) | 0.08 | (0.17 | ) | 0.09 | ||||||||||||||||
| Alabama NOL carryforward valuation allowance | 0.00 | 0.00 | 0.10 | 0.00 | 0.10 | 0.00 | ||||||||||||||||||
| Acquisition financing interest costs | 0.00 | 0.00 | 0.05 | �� | 0.00 | 0.05 | 0.00 | |||||||||||||||||
| Adjusted diluted EPS | $ | 1.54 | $ | 1.56 | $ | 3.80 | $ | 3.62 | $ | 4.86 | $ | 4.70 | ||||||||||||
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 thousands) | ||||||||
| September 30 | ||||||||
| 2021 | 2020 | |||||||
| Debt | ||||||||
| Current maturities of long-term debt | $ | 12,228 | $ | 509,435 | ||||
| Long-term debt | 3,874,116 | 2,777,072 | ||||||
| Total debt | $ | 3,886,344 | $ | 3,286,507 | ||||
| Less: Cash and cash equivalents and restricted cash | 136,430 | 1,084,730 | ||||||
| Net debt | $ | 3,749,914 | $ | 2,201,777 | ||||
| Trailing-Twelve Months (TTM) Adjusted EBITDA | $ | 1,379,200 | $ | 1,310,777 | ||||
| Total debt to TTM Adjusted EBITDA | 2.8 | x | 2.5 | x | ||||
| Net debt to TTM Adjusted EBITDA | 2.7 | x | 1.7 | x | ||||
Appendix 3
Reconciliation of Non-GAAP Measures (Continued)
The following reconciliation to the mid-point of the range of 2021 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:
| 2021 Projected EBITDA | ||||
| (in millions) | ||||
| Mid-point | ||||
| Net earnings attributable to Vulcan | $ | 640 | ||
| Income tax expense | 195 | |||
| Interest expense, net of interest income | 145 | |||
| Discontinued operations, net of tax | 0 | |||
| Depreciation, depletion, accretion and amortization | 465 | |||
| Projected EBITDA | $ | 1,445 | ||
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:
| Return on Invested Capital | ||||||||
| (dollars in thousands) | ||||||||
| TTM | ||||||||
| September 30 | ||||||||
| 2021 | 2020 | |||||||
| Adjusted EBITDA | $ | 1,379,200 | $ | 1,310,777 | ||||
| Average invested capital 1 | ||||||||
| Property, plant & equipment, net | $ | 4,609,064 | $ | 4,346,256 | ||||
| Goodwill | 3,272,643 | 3,169,082 | ||||||
| Other intangible assets | 1,253,622 | 1,093,601 | ||||||
| Fixed and intangible assets | $ | 9,135,329 | $ | 8,608,939 | ||||
| Current assets | $ | 2,090,869 | $ | 1,655,158 | ||||
| Less: Cash and cash equivalents | 855,704 | 477,562 | ||||||
| Less: Current tax | 29,606 | 16,002 | ||||||
| Adjusted current assets | 1,205,559 | 1,161,594 | ||||||
| Current liabilities | 831,914 | 731,033 | ||||||
| Less: Current maturities of long-term debt | 213,594 | 201,907 | ||||||
| Less: Short-term debt | 0 | 0 | ||||||
| Adjusted current liabilities | 618,320 | 529,126 | ||||||
| Adjusted net working capital | $ | 587,239 | $ | 632,468 | ||||
| Average invested capital | $ | 9,722,568 | $ | 9,241,407 | ||||
| Return on invested capital | 14.2 | % | 14.2 | % | ||||
| 1 | Average invested capital is based on a trailing 5-quarters. |