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Construction materials company $VMC reported a jump in 2Q16 earnings driven by continued strong earnings growth and margin expansion despite below-trend shipment growth. Net income rose to $123.75MM or $0.91 per share from $48.16MM or $0.36 per share last year. Total revenues grew to $956.83MM from $895.14MM. Adjusted EPS rose to $0.90 from $0.65.
$VMC, a leading producer of construction materials, has closed the acquisition of Aggregates USA. Pursuant to the transaction, Vulcan will integrate the workforce and operations of Aggregates into it. The acquired assets comprise three granite quarries in Georgia and 16 rail distribution yards in Georgia, South Carolina, and Florida.
$VMC reached an agreement with the DoJ that will allow it to complete its acquisition of Aggregates USA, LLC. $VMC will divest Aggregates USA's Tennessee assets and an aggregates quarry in Abingdon, Virginia to Blue Water Industries LLC for $290MM. The Blue Water transaction and the Aggregates USA acquisition are expected to close on Dec. 29, 2017.
$VMC, a manufacturer of construction materials, has signed a definitive agreement to acquire logistics company $PLS. The transaction is expected to complete in the fourth quarter of 2017. The acquisition will be subject to customary closing conditions, including approval by Polaris shareholders and the Supreme Court of British Columbia.
$VMC agreed with SPO Partners to buy its aggregates business, Aggregates USA LLC for $900MM in cash. Aggregates USA operates 31 facilities serving high growth markets in Georgia, Florida, Tennessee, South Carolina and Virginia. $VMC expects the transaction to be accretive to its EPS in the first year following the close.
With regards to asphalt acquisitions as part of $VMC's longer term strategy, the company said it's not about vertical integration but it's about looking at the strategic position in individual markets. $VMC has the leading position in aggregates in Tennessee and is looking forward to pave more roads in the city.
For 2017, $VMC expects strong year-over-year growth in earnings. The company estimates adjusted EBITDA to be $1.125-1.225Bil, driven by a continuing recovery in shipments as well as the higher levels of publicly funded construction activities.
During 1Q17, $VMC's revenue grew 4% to $787MM compared to the same period last year. Revenue from Aggregates, the largest segment of the company, inched up 2.4% to $650.4MM from a year ago. Revenue from Asphalt Mix and Concrete segments increased 7.5% and 26% to $95.8MM and $88.8MM, respectively.
Construction materials supplier $VMC reported a 12% increase in 1Q17 profit. The growth was driven by price increase in Aggregates segment and continuing recovery in construction materials demand, and strong profitability in its Concrete and Asphalt segments. Net earnings were $44.9MM or $0.34 per share versus $40.1MM or $0.30 per share in 1Q16.
$VMC announced that it has elected David P. Steiner to its BoD, effective immediately. Steiner will serve on $VMC's Safety, Health & Environmental Affairs Committee and the Governance Committee. $VMC also announced that Elaine Chao has stepped down from the Board after being confirmed by the U.S. Senate to serve as U.S. Secretary of Transportation.
$VMC stated that for its asphalt, concrete and calcium segments, the company expects gross profit growth fo approx. 15% in total in 2017, driven mainly by volume recovery and improving material margins in concrete. Additionally, operating and maintenance CapEx for 2017 is expected to be about $300MM.
For 2017, $VMC expects adjusted EBITDA of $1.125-1.225Bil. $VMC expects aggregates shipments growth of 5-8% from 2016. Freight-adjusted aggregates price increase is expected to be 5-7%. Asphalt, Concrete and Calcium gross profit growth is expected to be approx. 15%. $VMC expects SAG expenses of about $320MM, 2% higher than the prior year.
$VMC expects core capital spending of approx. $300MM in 2017. Interest expense is expected to be approx. $140MM. Depreciation, depletion, accretion and amortization expense is expected to be approx. $300MM. Effective tax rate is expected to be 28%.