Martin Marietta Materials, Inc. (NYSE:MLM), today announced results
for the second quarter and six months ended June 30, 2008. Notable
items for the quarter were: Earnings per diluted share of $1.52
compared with $1.92 in the prior-year quarter Cost of
petroleum-based products up $18 million, which reduced earnings by
$0.26 per diluted share Heritage aggregates product line pricing up
6% and volume down 9% Record Specialty Products� earnings from
operations up 20% from prior-year quarter Net sales of $527
million, down 1% compared with the prior-year quarter Selling,
general and administrative expenses down $2.3 million and down 40
basis points as a percentage of net sales compared with prior-year
quarter Acquisition and successful integration of six quarries from
Vulcan Materials Company Significant new transportation funding in
North Carolina Issuance of $300 million of Senior Notes MANAGEMENT
COMMENTARY Stephen P. Zelnak, Jr., Chairman and CEO of Martin
Marietta Materials, stated, �Second-quarter results highlighted our
ability to successfully operate in one of the most challenging
economic environments in our industry�s history. We faced diesel
fuel and natural gas costs that escalated nearly 60%, a ninth
consecutive quarter of declining aggregates volume and its
resulting impact on our operating leverage as production volumes
were aligned with sales expectations. Nonetheless, our management
team and employees did an excellent job of matching operating
levels with demand and aggressively addressed controllable costs.
�Despite the reduced demand, we continued to achieve sustainable
pricing growth within all groups of the aggregates business as
overall pricing for aggregates was up over 6% for the quarter. The
West Group again reported positive volume levels for its aggregates
product line, resulting from the comparative strength of the
infrastructure and commercial construction markets in Texas,
Oklahoma, and Iowa. Shipments in Iowa increased over 9% during the
quarter despite severe flooding in much of the state; however,
lower production levels and higher operating costs as a result of
the flooding had a negative impact on profitability compared with
expectations and the prior-year period. Infrastructure demand in
other key states, including North Carolina and Georgia, remains
challenging to forecast as rising costs for construction materials
have constrained state highway budgets, as well as municipal
spending. Demand dropped significantly in the Mideast Group, as the
usually resilient North Carolina and South Carolina markets
experience the effects of residential construction declines in
addition to weakening infrastructure expenditures. Several states
are taking active measures to address their infrastructure funding
needs; however, it is difficult to predict the impact of these
measures on volume levels for the remainder of 2008. �The rapid and
extreme increases in the cost of petroleum-based products affected
both our costs and sales. Liquid asphalt, used in the production of
asphalt paving products, increased approximately 135% over the
prior year with average prices approaching $700 per ton. Our
customers cannot react quickly enough to these escalating costs
and, when possible, have made the choice to defer work in
anticipation of future potential cost reductions. Cost control
initiatives in place throughout the Corporation served to limit the
increase in consolidated cost of sales despite the nearly 60%
increase in diesel fuel and natural gas costs compared with the
prior-year quarter. The rise in the cost of petroleum-based
products alone resulted in additional production costs of $18
million, or $0.26 per diluted share, for the quarter. Compounding
the sharply-escalating energy costs, the Corporation incurred
expenses of $24 million, or $0.35 per diluted share, to control
aggregates production and reduce inventory levels. �The focus and
execution on cost control also extended to our overhead costs.
Selling, general and administrative expenses decreased by $2.3
million in terms of absolute dollars and as a percentage of net
sales to 8.0% from 8.4% for the prior-year quarter. �We completed
the acquisition and highly-successful integration of the operations
acquired from Vulcan Materials Company in the previously announced
asset exchange transaction during the quarter. The Corporation
recorded a total gain on the exchange transaction of $16.4 million.
Of this total gain, $7.2 million has been reported in other
operating income of both the West and Mideast Groups. The remainder
of the gain has been reported as part of discontinued operations.
�During the quarter, we received some very positive news in North
Carolina. The legislature passed a budget that provided funding for
the construction of four toll road projects for a total of $3.2
billion. The first of these projects is scheduled for letting in
the third quarter of this year with completion in 2011. It is
valued at approximately $1 billion and will consume about 2 million
tons of aggregates. Two additional projects will begin in 2009 and
the remaining one is scheduled for 2010. These three projects are
estimated to consume 4.5 million tons of aggregates. Of the total
6.5 million tons for the four projects, we should be fully
competitive on about 85%. �Finally, in another positive
development, we now expect that our new plant in Augusta, Georgia,
will begin operations in the fourth quarter of 2008 versus the
prior forecast of second quarter 2009. The earlier completion of
this project, which increases capacity from 2 million tons to 6
million tons annually, is enabling us to engage in marketing
discussions with major customers. We expect that this will increase
our market share in high-growth markets in Georgia and Florida.
�Our Specialty Products business continues to perform exceptionally
well. The United States� steel market has remained strong, leading
to increased demand for dolomitic lime. We've experienced increased
demand for magnesia-based chemicals products used in a number of
environmental applications as well as for our flame retardant
products. The business delivered record second-quarter net sales of
$45.2 million, an increase of 14% compared with the prior-year
quarter, and record earnings from operations of $9.7 million, an
increase of 20% compared with the prior-year quarter. The business�
operating margin excluding freight and delivery revenues increased
120 basis points to 21.6% for the quarter. 2008 OUTLOOK �Our 2008
outlook has turned decidedly more cautious in the past few months
as the shock of high oil prices has affected both demand for our
products and our costs. A challenging economic environment, energy
inflation, credit market uncertainty and lagging infrastructure
demand make forecasting increasingly difficult. Accordingly, we are
adjusting downward our range for 2008 net earnings per diluted
share to $5.00 to $5.65 from $6.25 to $7.00. Even in this difficult
environment, however, our outlook for 2008 pricing in our
Aggregates business remains positive. Accordingly, we reaffirm our
6.0% to 8.0% range for the rate of heritage aggregates price
increases in 2008. �Over the balance of the year, we expect
infrastructure volumes in certain of our key states to be affected
more by funding limitations than underlying demand. In addition,
the sharp increase in diesel fuel prices may continue to affect
infrastructure volume as customers do not have funding mechanisms
to react quickly to the increases currently being experienced in
liquid asphalt and other petroleum-based raw materials. However,
assuming that recent downward trends in oil and commodity pricing
continue, this could be a catalyst in turning demand in a positive
direction. Residential construction continues to be dismal, but we
still expect that large industrial commercial projects will be a
plus for second-half 2008 results. �As a result, we are lowering
our range for 2008 heritage aggregates volumes to be down 3% to
down 6%, both exclusive of acquisitions. We also expect to deliver
record levels of net sales and earnings from both our lime and
magnesia chemicals businesses and reaffirm our guidance of $36
million to $38 million in pretax earnings from Specialty Products.�
RISKS TO EARNINGS EXPECTATIONS The 2008 estimated earnings range
includes management�s assessment of the likelihood of certain risk
factors that will affect performance within the range. The most
significant risk to 2008 earnings, whether within or outside
current earnings expectations, continues to be the performance of
the United States economy and its effect on construction activity.
Risks to the earnings range are primarily volume-related and
include a greater-than-expected drop in demand as a result of the
continued decline in residential construction, a decline in
commercial construction, delays in infrastructure projects, or some
combination thereof. Further, increased highway construction
funding pressures as a result of either federal or state issues can
affect profitability. Currently, North Carolina, Georgia, Texas,
and South Carolina are experiencing state-level funding pressures,
and these states may disproportionately affect profitability. The
level of aggregates demand in the Corporation�s end-use markets,
production levels and the management of production costs will
affect the operating leverage of the Aggregates business and,
therefore, profitability. Production costs in the aggregates
business are also sensitive to energy prices, the costs of repair
and supply parts, and the start-up expenses for large-scale plant
projects. The continued rising cost of diesel and other fuels
increases production costs either directly through consumption or
indirectly through the increased cost of energy-related
consumables, namely steel, explosives, tires and conveyor belts.
Sustained periods of diesel fuel cost at the current level will
continue to have a negative impact on profitability. The
availability of transportation in the Corporation's long-haul
network, particularly the availability of barges on the Mississippi
River system and the availability of rail cars and locomotive power
to move trains, affects the Corporation�s ability to efficiently
transport material into certain markets, most notably Texas and the
Gulf Coast region. The Aggregates business is also subject to
weather-related risks that can significantly affect production
schedules and profitability. Hurricane activity in the Atlantic
Ocean and Gulf Coast generally is most active during the third and
fourth quarters. Opportunities to reach the upper end of the
earnings range depend on the aggregates product line demand
exceeding expectations. Risks to earnings outside of the range
include a change in volume beyond current expectations as a result
of economic events outside of the Corporation�s control. In
addition to the impact of residential and commercial construction,
the Corporation is exposed to risk in its earnings expectations
from tightening credit markets and the availability of and interest
cost related to its commercial paper program, which is rated A-2 by
Standards & Poor�s and P-2 by Moody�s. Commercial paper of $75
million was outstanding at June 30, 2008. CONSOLIDATED FINANCIAL
HIGHLIGHTS Net sales for the quarter were $527.2 million, a 0.6%
decrease versus the $530.2 million recorded in the second quarter
of 2007. Earnings from operations for the second quarter of 2008
were $104.9 million compared with $136.3 million in 2007. Net
earnings were $63.8 million, or $1.52 per diluted share, versus
2007 second-quarter net earnings of $83.0 million, or $1.92 per
diluted share. Net sales for the first six months of 2008 were
$923.9 million compared with $940.9 million for the year-earlier
period. Year-to-date earnings from operations were $147.4 million
in 2008 versus $194.2�million in 2007. The Corporation posted an
after-tax gain on discontinued operations of $5.5�million in 2008
compared with $0.8 million in 2007. For the six-month period ended
June�30, net earnings were $84.7 million, or $2.02 per diluted
share, in 2008 compared with net earnings of $115.9 million, or
$2.62 per diluted share, in 2007. BUSINESS FINANCIAL HIGHLIGHTS Net
sales for the Aggregates business for the second quarter were
$482.0 million compared with 2007 second-quarter sales of $490.5
million. Aggregates pricing at heritage locations was up 6.3%,
while volume decreased 9.3%. Including acquisitions and
divestitures, aggregates pricing increased 6.4% and aggregates
volume declined 8.5%. Earnings from operations for the quarter were
$107.0 million in 2008 versus $138.6 million in the year-earlier
period. Year-to-date net sales for the Aggregates business were
$835.8 million versus $862.7 million in 2007. Earnings from
operations on a year-to-date basis were $150.0 million in 2008
compared with $199.1�million in 2007. For the six-month period
ended June 30, 2008, heritage aggregates pricing increased 5.1%,
while volume was down 8.9%. Including acquisitions and
divestitures, aggregates average selling price increased 5.2% while
volume declined 8.6%. Specialty Products� second-quarter net sales
of $45.2 million increased 14% over prior-year net sales of
$39.7�million. Earnings from operations for the second quarter were
$9.7 million compared with $8.1�million in the year-earlier period.
For the first six months of 2008, net sales were $88.1 million and
earnings from operations were $18.8 million compared with net sales
of $78.2 million and earnings from operations of $15.5 million for
the first six months of 2007. CONFERENCE CALL INFORMATION The
Corporation will host an online Web simulcast of its second-quarter
2008 earnings conference call later today (August 7, 2008). The
live broadcast of Martin Marietta Materials' conference call will
begin at 2:00�p.m. Eastern Time. An online replay will be available
approximately two hours following the conclusion of the live
broadcast. A link to these events will be available at the
Corporation�s Web site: www.martinmarietta.com. For those investors
without online web access, the conference call may also be accessed
by calling 719-325-4884, confirmation number 9485638. Martin
Marietta Materials is a leading producer of construction aggregates
and a producer of magnesia-based chemicals and dolomitic lime. For
more information about Martin Marietta Materials, refer to the
Corporation's Web site at www.martinmarietta.com. If you are
interested in Martin Marietta Materials, Inc. stock, management
recommends that, at a minimum, you read the Corporation's current
annual report and Forms 10-K, 10-Q and 8-K reports to the SEC over
the past year. The Corporation's recent proxy statement for the
annual meeting of shareholders also contains important information.
These and other materials that have been filed with the SEC are
accessible through the Corporation's Web site at
www.martinmarietta.com and are also available at the SEC's Web site
at www.sec.gov. You may also write or call the Corporation's
Corporate Secretary, who will provide copies of such reports.
Investors are cautioned that all statements in this press release
that relate to the future involve risks and uncertainties, and are
based on assumptions that the Corporation believes in good faith
are reasonable but which may be materially different from actual
results. Forward-looking statements give the investor our
expectations or forecasts of future events. You can identify these
statements by the fact that they do not relate only historical or
current facts. They may use words such as "anticipate," "expect,"
"should be," "believe," and other words of similar meaning in
connection with future events or future operating or financial
performance. Any or all of our forward-looking statements here and
in other publications may turn out to be wrong. Factors that the
Corporation currently believes could cause actual results to differ
materially from the forward-looking statements in this press
release include, but are not limited to the level and timing of
federal and state transportation funding, particularly in North
Carolina and Georgia, two of the Corporation�s largest and most
profitable states, and in South Carolina, the Corporation�s fifth
largest state as measured by 2007 Aggregates business� net sales;
levels of construction spending in the markets the Corporation
serves; the severity and duration of a continued decline in the
residential construction market and the impact on commercial
construction; unfavorable weather conditions, including hurricane
activity; the ability to recognize quantifiable savings from
internal expansion projects; the ability to successfully integrate
acquisitions quickly and in a cost-effective manner; the volatility
of fuel costs, most notably diesel fuel, liquid asphalt and natural
gas; continued increases in the cost of repair and supply parts;
logistical issues and costs, notably barge availability on the
Mississippi River system and the availability of railcars and
locomotive power to move trains to supply the Corporation�s Texas
and Gulf Coast markets; continued strength in the steel industry
markets served by the Corporation�s dolomitic lime products; and
other risk factors listed from time to time found in the
Corporation�s filings with the Securities and Exchange Commission.
Other factors besides those listed here may also adversely affect
the Corporation, and may be material to the Corporation. The
Corporation assumes no obligation to update any such
forward-looking statements. MARTIN MARIETTA MATERIALS, INC.
Unaudited Statements of Earnings (In millions, except per share
amounts) � � � � Three Months Ended Six Months Ended June 30, June
30, � 2008 � � 2007 � � 2008 � � 2007 � Net sales $ 527.2 $ 530.2 $
923.9 $ 940.9 Freight and delivery revenues � 71.5 � � 60.1 � �
126.9 � � 107.5 � Total revenues � 598.7 � � 590.3 � � 1,050.8 � �
1,048.4 � � Cost of sales 387.8 352.3 709.7 669.0 Freight and
delivery costs � 71.5 � � 60.1 � � 126.9 � � 107.5 � Cost of
revenues � 459.3 � � 412.4 � � 836.6 � � 776.5 � Gross profit 139.4
177.9 214.2 271.9 � Selling, general and administrative expenses
42.0 44.3 79.7 82.6 Research and development 0.1 0.2 0.3 0.4 Other
operating (income) and expenses, net � (7.6 ) � (2.9 ) � (13.2 ) �
(5.3 ) Earnings from operations 104.9 136.3 147.4 194.2 � Interest
expense 19.3 16.7 35.1 27.9 Other nonoperating (income) and
expenses, net � 1.0 � � (1.1 ) � 0.1 � � (3.8 ) Earnings before
taxes on income 84.6 120.7 112.2 170.1 Income tax expense � 26.3 �
� 38.3 � � 33.0 � � 55.0 � Earnings from continuing operations 58.3
82.4 79.2 115.1 � Discontinued operations: Gain on discontinued
operations, net of related tax expense of $3.7, $0.5, $3.7 and
$0.6, respectively � 5.5 � � 0.6 � � 5.5 � � 0.8 � � Net Earnings $
63.8 � $ 83.0 � $ 84.7 � $ 115.9 � � Net earnings per share: Basic
from continuing operations $ 1.41 $ 1.94 $ 1.92 $ 2.65 Discontinued
operations � 0.13 � � 0.01 � � 0.13 � � 0.02 � $ 1.54 � $ 1.95 � $
2.05 � $ 2.67 � � Diluted from continuing operations $ 1.39 $ 1.91
$ 1.89 $ 2.60 Discontinued operations � 0.13 � � 0.01 � � 0.13 � �
0.02 � $ 1.52 � $ 1.92 � $ 2.02 � $ 2.62 � � Dividends per share $
0.345 � $ 0.275 � $ 0.69 � $ 0.55 � � Average number of shares
outstanding: Basic � 41.3 � � 42.5 � � 41.3 � � 43.5 � Diluted �
41.9 � � 43.1 � � 41.9 � � 44.2 � MARTIN MARIETTA MATERIALS, INC.
Unaudited Financial Highlights (In millions) � � � � � Three Months
Ended Six Months Ended June 30, June 30, � 2008 � � 2007 � � 2008 �
� 2007 � Net sales: Aggregates Business: Mideast Group $ 168.9 $
194.1 $ 287.6 $ 331.4 Southeast Group 122.0 118.3 225.1 230.0 West
Group � 191.1 � � 178.1 � � 323.1 � � 301.3 � Total Aggregates
Business 482.0 490.5 835.8 862.7 Specialty Products � 45.2 � � 39.7
� � 88.1 � � 78.2 � Total $ 527.2 � $ 530.2 � $ 923.9 � $ 940.9 � �
Gross profit: Aggregates Business: Mideast Group $ 66.5 $ 90.4 $
104.0 $ 141.8 Southeast Group 19.5 33.5 35.3 60.7 West Group � 40.8
� � 41.5 � � 52.6 � � 49.9 � Total Aggregates Business 126.8 165.4
191.9 252.4 Specialty Products 12.4 10.9 24.1 21.1 Corporate � 0.2
� � 1.6 � � (1.8 ) � (1.6 ) Total $ 139.4 � $ 177.9 � $ 214.2 � $
271.9 � � Selling, general, and administrative expenses: Aggregates
Business: Mideast Group $ 11.8 $ 11.8 $ 23.1 $ 23.3 Southeast Group
6.6 6.6 13.2 12.8 West Group � 11.2 � � 11.5 � � 22.5 � � 23.0 �
Total Aggregates Business 29.6 29.9 58.8 59.1 Specialty Products
2.5 2.7 5.1 5.3 Corporate � 9.9 � � 11.7 � � 15.8 � � 18.2 � Total
$ 42.0 � $ 44.3 � $ 79.7 � $ 82.6 � � Earnings (Loss) from
operations: Aggregates Business: Mideast Group $ 61.4 $ 79.5 $ 93.5
$ 120.3 Southeast Group 13.5 27.6 22.9 48.8 West Group � 32.1 � �
31.5 � � 33.6 � � 30.0 � Total Aggregates Business 107.0 138.6
150.0 199.1 Specialty Products 9.7 8.1 18.8 15.5 Corporate � (11.8
) � (10.4 ) � (21.4 ) � (20.4 ) Total $ 104.9 � $ 136.3 � $ 147.4 �
$ 194.2 � � Depreciation $ 40.8 $ 35.4 $ 78.3 $ 69.8 Depletion 1.1
1.2 1.8 2.1 Amortization � 0.9 � � 0.8 � � 1.6 � � 1.5 � $ 42.8 � $
37.4 � $ 81.7 � $ 73.4 � MARTIN MARIETTA MATERIALS, INC. Balance
Sheet Data (In millions) � � � � � � June 30, December 31, June 30,
� 2008 � 2007 � 2007 (Unaudited) (Audited) (Unaudited) ASSETS Cash
and cash equivalents $ 13.2 $ 20.0 $ 30.9 Accounts receivable, net
322.0 245.8 296.6 Inventories, net 297.4 286.9 297.8 Other current
assets 58.2 73.3 66.0 Property, plant and equipment, net 1,704.7
1,433.6 1,347.4 Other noncurrent assets 46.9 40.1 44.0 Intangible
assets, net 629.2 584.1 585.0 Total assets $ 3,071.6 $ 2,683.8 $
2,667.7 � � LIABILITIES AND SHAREHOLDERS' EQUITY Current maturities
of long-term debt and commercial paper $ 279.7 $ 276.1 $ 127.1
Other current liabilities 212.8 230.5 226.3 Long-term debt
(excluding current maturities) 1,153.0 848.2 1,051.5 Other
noncurrent liabilities 409.3 383.0 358.5 Shareholders' equity �
1,016.8 � 946.0 � 904.3 Total liabilities and shareholders' equity
$ 3,071.6 $ 2,683.8 $ 2,667.7 MARTIN MARIETTA MATERIALS, INC.
Unaudited Statements of Cash Flows (In millions) � � � � � Six
Months Ended June 30, � 2008 � � � 2007 � Net earnings $ 84.7 $
115.9 Adjustments to reconcile net earnings to cash provided by
operating activities: Depreciation, depletion and amortization 81.7
73.4 Share-based compensation expense 13.2 13.0 Excess tax benefits
from share-based compensation (1.1 ) (17.7 ) Gains on divestitures
and sales of assets (22.6 ) (3.2 ) Deferred income taxes 14.4 2.6 �
Other items, net (1.0 ) (1.5 ) � Changes in operating assets and
liabilities: Accounts receivable, net (76.1 ) (54.7 ) Inventories,
net (4.4 ) (42.3 ) Accounts payable 14.1 7.1 Other assets and
liabilities, net � 22.2 � � 47.4 � � Net cash provided by operating
activities � 125.1 � � 140.0 � � Investing activities: Additions to
property, plant and equipment (159.4 ) (115.0 ) Acquisitions, net
(218.4 ) (12.1 ) Proceeds from divestitures and sales of assets 5.5
7.1 Railcar construction advances (7.3 ) - Repayment of railcar
construction advances � 7.3 � � - � � Net cash used for investing
activities � (372.3 ) � (120.0 ) � Financing activities: Borrowings
of long-term debt 297.8 472.0 Repayments of long-term debt and
payments on capital lease obligations (3.0 ) (0.5 ) Net borrowings
(repayments) of commercial paper and overnight loan 3.0 (0.5 )
Termination of interest rate swaps (11.1 ) - Debt issue costs (1.1
) (0.8 ) Change in bank overdraft 5.8 (4.3 ) Dividends paid (28.9 )
(24.3 ) Repurchases of common stock (24.0 ) (493.6 ) Issuances of
common stock 0.8 12.9 Excess tax benefits from share-based
compensation � 1.1 � � 17.7 � � Net cash provided by (used for)
financing activities � 240.4 � � (21.4 ) � Net decrease in cash and
cash equivalents (6.8 ) (1.4 ) Cash and cash equivalents, beginning
of period � 20.0 � � 32.3 � � Cash and cash equivalents, end of
period $ 13.2 � $ 30.9 � MARTIN MARIETTA MATERIALS, INC. Unaudited
Operational Highlights � � � � � � Three Months Ended Six Months
Ended June 30, 2008 June 30, 2008 Volume Pricing Volume Pricing
Volume/Pricing Variance (1) Heritage Aggregates Product Line: (2)
Mideast Group (22.3%) 12.0% (22.8%) 12.3% Southeast Group (9.9%)
6.5% (10.6%) 5.6% West Group 4.4% 3.9% 6.2% 2.1% Heritage
Aggregates Operations (9.3%) 6.3% (8.9%) 5.1% Aggregates Product
Line (3) (8.5%) 6.4% (8.6%) 5.2% � Three Months Ended Six Months
Ended June 30, June 30, Shipments (tons in thousands) 2008 2007
2008 2007 Heritage Aggregates Product Line: (2) Mideast Group
14,994 19,302 24,734 32,025 Southeast Group 10,144 11,260 19,212
21,481 West Group 19,716 18,892 33,731 31,746 Heritage Aggregates
Operations 44,854 49,454 77,677 85,252 Acquisitions 930 - 930 -
Divestitures (4) 15 588 259 1,070 Aggregates Product Line (3)
45,799 50,042 78,866 86,322 � � (1) Volume/pricing variances
reflect the percentage increase (decrease) from the comparable
period in the prior year. � (2) Heritage Aggregates product line
excludes volume and pricing data for acquisitions that have not
been included in prior-year operations for the comparable period
and divestitures. � (3) Aggregates product line includes all
acquisitions from the date of acquisition and divestitures through
the date of disposal. � (4) Divestitures include the tons related
to divested aggregates product line operations up to the date of
divestiture. MARTIN MARIETTA MATERIALS, INC. Non-GAAP Financial
Measures (In millions) � � � � Gross margin as a percentage of net
sales and operating margin as a percentage of net sales represent
non-GAAP measures. The Corporation presents these ratios calculated
based on net sales, as it is consistent with the basis by which
management reviews the Corporation's operating results. Further,
management believes it is consistent with the basis by which
investors analyze the Corporation's operating results given that
freight and delivery revenues and costs represent pass-throughs and
have no profit mark-up. Gross margin and operating margin
calculated as percentages of total revenues represent the most
directly comparable financial measures calculated in accordance
with generally accepted accounting principles ("GAAP"). The
following tables present the calculations of gross margin and
operating margin for the three and six months ended June 30, 2008
and 2007, in accordance with GAAP and reconciliations of the ratios
as percentages of total revenues to percentages of net sales: � � �
� � Gross Margin in Accordance with Generally Accepted Accounting
Principles Three Months Ended Six Months Ended June 30, June 30, �
2008 � � 2007 � � 2008 � � 2007 � Gross profit $ 139.4 � $ 177.9 �
$ 214.2 � $ 271.9 � Total revenues $ 598.7 � $ 590.3 � $ 1,050.8 �
$ 1,048.4 � Gross margin � 23.3 % � 30.1 % � 20.4 % � 25.9 % � �
Gross Margin Excluding Freight and Delivery Revenues Three Months
Ended Six Months Ended June 30, June 30, � 2008 � � 2007 � � 2008 �
� 2007 � � Gross profit $ 139.4 � $ 177.9 � $ 214.2 � $ 271.9 �
Total revenues $ 598.7 $ 590.3 $ 1,050.8 $ 1,048.4 Less: Freight
and delivery revenues � (71.5 ) � (60.1 ) � (126.9 ) � (107.5 ) Net
sales $ 527.2 � $ 530.2 � $ 923.9 � $ 940.9 � Gross margin
excluding freight and delivery revenues � 26.4 % � 33.6 % � 23.2 %
� 28.9 % � � Operating Margin in Accordance with Generally Accepted
Three Months Ended Six Months Ended Accounting Principles June 30,
June 30, � 2008 � � 2007 � � 2008 � � 2007 � Earnings from
operations $ 104.9 � $ 136.3 � $ 147.4 � $ 194.2 � Total revenues $
598.7 � $ 590.3 � $ 1,050.8 � $ 1,048.4 � Operating margin � 17.5 %
� 23.1 % � 14.0 % � 18.5 % � � Operating Margin Excluding Freight
and Delivery Revenues Three Months Ended Six Months Ended June 30,
June 30, � 2008 � � 2007 � � 2008 � � 2007 � Earnings from
operations $ 104.9 � $ 136.3 � $ 147.4 � $ 194.2 � Total revenues $
598.7 $ 590.3 $ 1,050.8 $ 1,048.4 Less: Freight and delivery
revenues � (71.5 ) � (60.1 ) � (126.9 ) � (107.5 ) Net sales $
527.2 � $ 530.2 � $ 923.9 � $ 940.9 � Operating margin excluding
freight and delivery revenues � 19.9 % � 25.7 % � 16.0 % � 20.6 %
MARTIN MARIETTA MATERIALS, INC. Non-GAAP Financial Measures
(continued) (Dollars in millions) � � � � � � � Three Months Ended
Six Months Ended June 30, June 30, 2008 2007 2008 2007 � Earnings
Before Interest, Income Taxes, Depreciation, Depletion and
Amortization (EBITDA) (1) $ 155.6 $ 175.9 $ 237.6 $ 272.8 � (1)
EBITDA is a widely accepted financial indicator of a company's
ability to service and/or incur indebtedness. EBITDA is not defined
by generally accepted accounting principles and, as such, should
not be construed as an alternative to net income or operating cash
flow. For further information on EBITDA, refer to the Corporation's
Web site at www.martinmarietta.com. � � A reconciliation of Net
Cash Provided by Operating Activities to EBITDA is as follows: �
Three Months Ended Six Months Ended June 30, June 30, 2008 2007
2008 2007 Net Cash Provided by Operating Activities $ 49.9 $ 90.9 $
125.1 $ 140.0 � � Changes in operating assets and liabilities, net
of effects of acquisitions and divestitures 56.8 31.7 44.2 42.5
Other items, net (0.4) (2.2) (3.5) 6.8 Income tax expense 30.0 38.8
36.7 55.6 Interest expense 19.3 16.7 35.1 27.9 EBITDA $ 155.6 $
175.9 $ 237.6 $ 272.8 � The ratio of Consolidated
Debt-to-Consolidated EBITDA, as defined, for the trailing twelve
months is a covenant under the Corporation's $325,000,000 five-year
revolving credit agreement. Under the agreement, the Corporation's
ratio of Consolidated Debt-to-Consolidated EBITDA, as defined, for
the trailing twelve months can not exceed 2.75 to 1.00 as of the
end of any fiscal quarter, with certain exceptions related to
qualifying acquisitions, as defined. � � The following presents the
calculation of Consolidated Debt-to-Consolidated EBITDA, as
defined, for the trailing twelve months at June 30, 2008. For
supporting calculations, refer to Corporation's Web site at
www.martinmarietta.com. � � Twelve-Month Period July 1, 2007 to
June 30, 2008 Net earnings $ 224.7 Add back: Interest expense 68.1
Income tax expense 94.0 Depreciation, depletion and amortization
expense 156.6 Stock-based compensation expense 19.8 Deduct:
Interest income (1.2) Consolidated EBITDA, as defined $ 562.0
Consolidated Debt at June 30, 2008 $ 1,432.7 Consolidated
Debt-to-Consolidated EBITDA, as defined, at June 30, 2008 for the
trailing twelve-month EBITDA 2.55 MLM-E
Martin Marietta Materials (NYSE:MLM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Martin Marietta Materials (NYSE:MLM)
Historical Stock Chart
From Jul 2023 to Jul 2024