Martin Marietta Materials Inc. reported that net sales increased to $443.7 million in the third quarter, compared with $428.3 million in previous quarter. Heritage aggregates product line volume increased 6.3 percent, although pricing was down 3.1 percent, or 32 cents-per-ton.
Capital investment in organic growth prior to the current recession has positioned Martin Marietta Materials for strong performance in an economic recovery, the company said. Capital expenditures were $110.0 million for the nine months ended September 30, 2010, compared with $100.5 million for the comparable prior-year period. Capital expenditures are forecast at $135 million for full year 2010. The company said it can continue to safely and appropriately reduce maintenance capital investment and provide opportunities to allocate capital in a manner that maximizes long-term shareholder value.
In October, the company acquired a sand and gravel business in South Carolina. The acquired operation supplements its ability to serve the Charlotte, NC, market as well as certain South Carolina markets by providing a broader array of products.
Cash provided by operating activities for the nine months ended September 30, 2010, was $202.6 million compared with $234.6 million for the same period in 2009. Increased sales have led to an $86.8 million build in accounts receivable during the current year. This was partially offset by $8.9 million generated by inventory management initiatives and $4.4 million lower cash taxes paid through the first nine months of 2010.
Ward Nye, president and CEO of Martin Marietta Materials, stated, "We are pleased to report our second consecutive quarter of aggregates volume growth. In fact, aggregates shipments improved in each of our end-use markets during the quarter, resulting in an overall 6.3 percent increase, led by a 14 percent increase in the nonresidential end-use market, both compared with the prior-year quarter. We are confident that we are well positioned to capitalize on an economic recovery."
"The infrastructure end-use market, which had volume growth of 3 percent, was supported by an increase in state transportation spending that was somewhat offset by a decline in shipments to projects funded by the American Recovery and Reinvestment Act,” Nye said. “We continue to believe that this is a timing issue since Stimulus-related projects contributed volume growth in some states during the quarter. In other states, principally Iowa, where they aggressively completed their Stimulus-related work in 2009, our shipments actually declined. Overall, however, aggregates shipments to the infrastructure end-use market, excluding projects funded by ARRA, increased more than 6 percent. Activity in portions of the energy sector, specifically the Haynesville and Barnett Shale Natural Gas Fields in northwest Louisiana, east Texas and Arkansas, continues to be the most significant volume driver in our nonresidential end-use market, as aggregates are essential to build both oilfield roads and pads for drilling rigs. Our ChemRock/Rail end-use market experienced a 9 percent volume increase, fueled by railroad expansion activity in certain markets. The residential end-use market had a volume increase of 3 percent.”
Source: Martin Marietta Materials