Vulcan Materials Co. announced significantly improved results for the fourth quarter ended Dec. 31, 2011, and provided details on initiatives to generate higher levels of earnings and cash flow – including asset sales – that it says will strengthen its credit profile and provide Vulcan's Board of Directors with flexibility to restore a competitive dividend.

Highlights of its report include:

• Fourth quarter EBITDA, excluding restructuring charges and expenses related to the unsolicited Martin Marietta exchange offer, increased 50 percent from the prior year due primarily to higher aggregates earnings and a 10 percent reduction in overhead costs.
• Gross profit in the fourth quarter increased $24 million (47 percent) and gross profit margins improved 360 basis points due primarily to higher aggregates earnings.
• Gross profit from aggregates sales increased $22 million (37 percent), on a net sales increase of $16 million (4 percent), reflecting higher pricing and shipments, as well as improved productivity.
• Gross profit from non-aggregates segments improved by $2 million.
• All key labor and energy efficiency metrics for aggregates improved for the quarter and the full year from the prior year, and helped offset increases in the unit cost of diesel fuel (a 25 percent increase for the quarter and 35 percent increase for the full year).
• The company substantially completed its restructuring and cost-savings actions announced in 2011, reducing annual run-rate overhead expenses by $55 million.
• Vulcan announced a two-part initiative to accelerate earnings growth and improve the company's credit profile: A Profit Enhancement Plan that includes cost reductions and other earnings enhancements of $100 million. The run-rate earnings effect is expected to be achieved within the next 18 months as the company fully leverages its streamlined management structure and substantially completed ERP and Shared Services platforms. These profit enhancements are in addition to the actions announced in 2011, which produced $55 million in run-rate overhead savings as cited above.
• Planned asset sales with net proceeds of approximately $500 million from the sale of non-core assets over the next 12 to 18 months. The net proceeds of these sales, together with the increased earnings resulting from the Profit Enhancement Plan, will be used to reduce debt and strengthen Vulcan's balance sheet and credit profile. The intended asset sales are consistent with Vulcan's strategic focus on building leading aggregates reserve positions in markets with above-average long-term demand growth.
• Vulcan expects full year EBITDA in 2012 of approximately $500 million, including $25 million from the Profit Enhancement Plan and excluding impacts from the Planned Asset Sales and costs associated with the unsolicited exchange offer.

Don James, chairman and chief executive officer, stated, “EBITDA increased strongly in the fourth quarter of 2011. In particular, our aggregates segment performed very well, with increased volumes and pricing, as well as lower unit cost of sales, even with substantial increases in energy costs. We achieved higher productivity and improved our industry-leading safety performance. Overall, we benefited from our ongoing cost reduction initiatives, as reflected in the 10 percent decrease in total Selling, Administrative and General (SAG) expense in the fourth quarter. Our focus on improving product line earnings through price and cost leadership, and the execution of the Profit Enhancement Plan we are announcing today, position us for stronger performance in 2012.”

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