Vulcan Announces First Quarter 2013 Results

                 Vulcan Announces First Quarter 2013 Results

2013 Outlook for Earnings Improvement on Track

Driven by Growth in Private Construction, Improved Pricing and Cost Management

PR Newswire

BIRMINGHAM, Ala., May 2, 2013

BIRMINGHAM, Ala., May 2, 2013 /PRNewswire/ --Vulcan Materials Company (NYSE:
VMC), the nation's largest producer of construction aggregates, today
announced results for the first quarter ending March 31, 2013.

(Logo: )

First Quarter Summary

  oShipment levels in all major product lines were in line with our first
    quarter expectations.

       oAggregates shipments were 5 percent lower than last year's first
         quarter, which benefited from unseasonably warm and dry weather while
         2013 experienced wetter winter weather. Aggregates shipments were 4
         percent higher than the first quarter of 2011, which experienced
         normal seasonal weather.
       oVolumes in ready-mixed concrete and cement increased 6 percent and 14
         percent, respectively, due to improving levels of private

  oAggregates pricing increased 5 percent versus the prior year.
  oGross profit was $18 million as compared to $22 million in the prior year
    and a loss of $7 million in the first quarter of 2011.
  oAdjusted EBITDA was $26 million as compared to $47 million in the prior
    year and $5 million in the first quarter of 2011.
  oNet earnings were a loss of $0.42 per diluted share versus a loss of $0.40
    per diluted share in the prior year.

Don James, Chairman and Chief Executive Officer, said, "Our business segments
performed as expected in the first quarter. We are reaffirming our outlook
and remain on track to achieve earnings improvement again in 2013. Aggregates
segment gross profit, while down versus the prior year, was in line with our
expectations and up sharply versus the first quarter of 2011. We expected
first quarter aggregates shipments to be lower than last year when shipments
increased 10 percent due to favorable weather and the timing of shipments to
several large projects. Demand for our products in many of our key markets
continues to benefit from recovery in private construction activity,
particularly residential. Most notably, we realized double-digit percentage
increases in first quarter aggregates shipments in Arizona, California and
Florida – driven by demand from housing. In other key markets, particularly
Texas, shipments also increased, reflecting broad-based recovery across all
end-markets. Housing starts, as measured on a seasonally adjusted annual
rate, are now more than 1 million, indicating the beginnings of a broad-based
recovery in residential construction. Growth in residential construction
activity, and its traditional follow-on impact to private nonresidential
construction, underpins our expectations for volume and earnings improvement
in 2013. We continue to expect aggregates shipments in 2013 to increase 1 to
5 percent versus 2012 with the variability due primarily to the timing of the
start of several large projects later this year."

Commentary on First Quarter 2013 Segment Results

Aggregates segment gross profit was $25 million compared to $34 million in the
prior year. Aggregates pricing increased 5 percent versus the prior year and
helped offset the earnings effect of lower volumes. Price improvement was
broad-based with virtually all of the Company's markets realizing higher
pricing versus the prior year. Aggregates shipments in Arizona, California,
Florida and North Carolina showed strength, each increasing by at least 10
percent versus the prior year. Sales volumes at the Company's remotely-served
sales yards along the central Gulf Coast also benefited from stronger demand,
increasing approximately 25 percent versus the prior year. Shipments in the
Midwest, Tennessee and Virginia were sharply lower versus the prior year. In
the first quarter of 2012, volumes in these markets were boosted significantly
by favorable weather and several large projects underway.

Unfavorable weather, lower production volumes and a geographic mix shift to
remotely-supplied coastal sales yards distorted year-over-year cash cost
comparisons. Additionally, planned cash costs for routine expenditures
necessary to prepare for the start of seasonal construction activity increased
versus the prior year. For example, repair and maintenance costs increased $4
million versus the prior year. These cost increases in the first quarter were
consistent with the Company's operating plan and do not alterits view
regarding achievement of full year cost targets. 

Gross profit from non-aggregates businesses improved $5 million to a loss of
$7 million. Asphalt Mix segment gross profit was $2 million versus a loss of
$1 million in the prior year. Unit profitability, as measured by materials
margin, increased 19 percent due in part to a 7 percent decrease in the unit
cost of liquid asphalt. Concrete segment gross profit improved $2 million due
in part to a 6 percent increase in shipments. Cement segment gross profit in
the first quarter was $1 million, up slightly versus the prior year.

2013 Outlook

"Our outlook for another year of earnings improvement remains on track. This
view is supported by continued growth in private construction activity which
should drive volume growth, improved pricing and cost management," said Mr.

"We believe economic and construction-related fundamentals that drive demand
for our products are continuing to improve from the historically low levels
created by the economic downturn. Leading indicators of private construction
activity continue to improve. Residential housing starts in the U.S. are up
sharply from a year ago and contract awards for private nonresidential
buildings, measured in square feet, are up 16 percent. Consequently,
aggregates demand in private construction is growing. Importantly, we are
seeing significant housing start growth in several key states, including
Florida, Texas, California, Georgia and Arizona. Growth in residential
construction has historically been a leading indicator of other construction
end uses. 

"The passage of the federal highway bill, MAP-21, in July 2012 is providing
stability and predictability to future highway funding. New highway projects,
as measured by trailing twelve month contract awards, increased 1 percent
versus the prior year's level – the first year-over-year growth since January
2011. The large increase in TIFIA funding contained in the new highway bill
should also positively impact future demand.

Mr. James continued, "Aggregates demand in our markets from residential
construction is expected to increase approximately 20 percent while demand
from private nonresidential buildings is expected to increase approximately 8
percent compared to 2012. Our current expectation is for aggregates demand
from public construction, including highways and other infrastructure, to
approximate 2012. However, the recent upturn in trailing twelve month
contract awards for highways provides some optimism that aggregates demand
from public infrastructure could grow modestly in 2013. As we look at the
projects that could impact our 2013 aggregates volumes, we continue to see a
disproportionately greater number of large, discrete highway and industrial
projects. The timing and quantity of shipments to these projects remains
challenging to predict. As a result, our full year shipments in 2013 are
expected to increase 1 to 5 percent with most of the expected year-over-year
growth to occur in the second half of the year.

"We will continue our focus on effectively managing controllable costs and
achieving improved pricing. Although the relatively severe winter weather in
many of our central and eastern markets had an unfavorable effect on the first
quarter's cash costs, we remain on track to realize our cash costs objectives
for 2013. The geographic breadth of pricing gains achieved in 2012 and so far
this year reinforces our expectations for continued price growth in 2013. We
expect full year freight-adjusted price growth of approximately 4 percent in

"Additionally, earnings in each of our non-aggregates segments should improve
versus the prior year. Asphalt materials margin increased throughout 2012 and
we expect material margins to increase again in 2013 and contribute to
earnings growth in this segment. Full year concrete volumes and materials
margin are expected to improve in 2013 as housing starts continue recovering
in key states. Concrete volumes in the first quarter increased 6 percent
versus the prior year due in part to increased private construction activity
in Florida. We expect the increased private construction activity to continue
leading to improved unit profitability in the Concrete segment. Cement
earnings should improve in 2013 due mostly to lower production costs. As a
result, collectively, full year earnings from these segments are expected to
contribute significantly to earnings improvement in 2013."

Conference Call

Vulcan will host a conference call at 10:00 a.m. CDT on May 2, 2013. A live
webcast will be available via the Company's website at Investors and other interested parties in the U.S.
may also access the teleconference live by calling 800-540-4153 approximately
10 minutes before the scheduled start. International participants can dial
973-582-2825. The access code is 55427875. The conference call will be
recorded and available for replay at the Company's website approximately two
hours after the call.

Vulcan Materials Company, a member of the S&P 500 Index, is the nation's
largest producer of construction aggregates, a major producer of asphalt mix
and concrete and a leading producer of cement in Florida.


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: risks that Vulcan's intentions, plans and results with respect to
cost reductions, profit enhancements and asset sales, as well as streamlining
and other strategic actions adopted by Vulcan, will not be able to be realized
to the desired degree or within the desired time period and that the results
thereof will differ from those anticipated or desired; uncertainties as to the
timing and valuations that may be realized or attainable with respect to
planned asset sales; those associated with general economic and business
conditions; the timing and amount of federal, state and local funding for
infrastructure; the effects of the sequestration on demand for our products in
markets that may be subject to decreases in federal spending; changes in
Vulcan's effective tax rate; the increasing reliance on technology
infrastructure for Vulcan's ticketing, procurement, financial statements and
other processes could adversely affect operations in the event such
infrastructure does not work as intended or experiences technical
difficulties; the impact of the state of the global economy on Vulcan's
businesses and financial condition and access to capital markets; changes in
the level of spending for private residential and private nonresidential
construction; the highly competitive nature of the construction materials
industry; the impact of future regulatory or legislative actions; the outcome
of pending legal proceedings; pricing of Vulcan's products; weather and other
natural phenomena; 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 Vulcan's below investment
grade debt rating on Vulcan's cost of capital; volatility in pension plan
asset values and liabilities which may require cash contributions to the
pension plans; the impact of environmental clean-up costs and other
liabilities relating to previously 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 potential of
goodwill or long-lived asset impairment; the potential impact of future
legislation or regulations relating to climate change or greenhouse gas
emissions or the definition of minerals; 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.

                                                                Table A
Vulcan Materials Company
and Subsidiary Companies
                                             (Amounts and shares in thousands,
                                             except per share data)
                                             Three Months Ended
Consolidated Statements of Earnings          March 31
(Condensed and unaudited)                    2013               2012
Net sales                                    $ 504,554         $ 499,851
Delivery revenues                            33,608             36,031
Total revenues                               538,162            535,882
Cost of goods sold                           486,899            477,893
Delivery costs                               33,608             36,031
Cost of revenues                             520,507            513,924
Gross profit                                 17,655             21,958
Selling, administrative and general          64,655             64,912
Gain on sale of property, plant & equipment
and businesses, net                          4,110              6,526
Restructuring charges                        (1,509)            (1,411)
Exchange offer costs                         -                  (10,065)
Other operating income (expense), net        (5,659)            1,625
Operating loss                               (50,058)           (46,279)
Other nonoperating income, net               2,373              3,098
Interest expense, net                        52,752             52,266
Loss from continuing operations
before income taxes                          (100,437)          (95,447)
Benefit from income taxes                    (38,818)           (38,397)
Loss from continuing operations              (61,619)           (57,050)
Earnings on discontinued operations, net of  6,783              4,997
Net loss                                     $ (54,836)        $ (52,053)
Basic earnings (loss) per share:
Continuing operations                        $   (0.47)      $   (0.44)
Discontinued operations                      0.05               0.04
Net earnings (loss) per share                $   (0.42)      $   (0.40)
Diluted earnings (loss) per share:
Continuing operations                        $   (0.47)      $   (0.44)
Discontinued operations                      0.05               0.04
Net earnings (loss) per share                $   (0.42)      $   (0.40)
Weighted-average common shares
Basic                                        130,186            129,593
Assuming dilution                            130,186            129,593
Cash dividends declared per share
of common stock                              $    0.01       $    0.01
Depreciation, depletion, accretion and
amortization                                 $  75,597         $  85,167
Effective tax rate from continuing           38.6%              40.2%

                                                                  Table B
Vulcan Materials Company
and Subsidiary Companies
                                 (Amounts in thousands, except per share data)
Consolidated Balance Sheets      March 31        December 31      March 31
(Condensed and unaudited)        2013            2012             2012
Cash and cash equivalents        $  188,081    $   275,478   $  191,172
Accounts and notes receivable:
 Accounts and notes receivable,  328,202         303,178          325,383
 Less: Allowance for doubtful    (6,030)         (6,198)          (7,207)
    Accounts and notes           322,172         296,980          318,176
    receivable, net
 Finished products               267,783         262,886          271,634
 Raw materials                   27,148          27,758           23,819
 Products in process             6,168           5,963            5,077
 Operating supplies and other    39,475          38,415           40,803
    Inventories                  340,574         335,022          341,333
Current deferred income taxes    38,844          40,696           43,394
Prepaid expenses                 24,762          21,713           24,574
Assets held for sale             12,929          15,083           -
    Total current assets         927,362         984,972          918,649
Investments and long-term        41,707          42,081           29,172
Property, plant & equipment:
 Property, plant & equipment,    6,668,630       6,666,617        6,698,952
 Less: Reserve for depr., depl.  (3,507,394)     (3,507,432)      (3,349,258)
 & amort.
    Property, plant &            3,161,236       3,159,185        3,349,694
    equipment, net
Goodwill                         3,095,801       3,086,716        3,086,716
Other intangible assets, net     691,840         692,532          695,852
Other noncurrent assets          160,529         161,113          135,956
    Total assets                 $ 8,078,475    $  8,126,599   $ 8,216,039
Liabilities and Equity
Current maturities of long-term  $  140,604    $   150,602   $  144,706
Trade payables and accruals      116,677         113,337          125,101
Other current liabilities       212,572         171,671          211,286
Liabilities of assets held for   -               801              -
    Total current liabilities   469,853         436,411          481,093
Long-term debt                  2,525,420       2,526,401        2,669,752
Noncurrent deferred income       614,405         657,367          704,166
Deferred revenue                 73,392          73,583           -
Other noncurrent liabilities     680,476         671,775          615,421
    Total liabilities           4,363,546       4,365,537        4,470,432
 Common stock, $1 par value      129,952         129,721          129,389
 Capital in excess of par value  2,585,696       2,580,209        2,547,959
 Retained earnings               1,220,512       1,276,649        1,281,080
 Accumulated other               (221,231)       (225,517)        (212,821)
 comprehensive loss
    Total equity                 3,714,929       3,761,062        3,745,607
    Total liabilities and        $ 8,078,475    $  8,126,599   $ 8,216,039

                                                                   Table C
Vulcan Materials Company
and Subsidiary Companies
                                                      (Amounts in thousands)
                                                      Three Months Ended
Consolidated Statements of Cash Flows                 March 31
(Condensed and unaudited)                             2013         2012
Operating Activities
Net loss                                              $ (54,836)  $ (52,053)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation, depletion, accretion and amortization   75,597       85,167
Net gain on sale of property, plant & equipment and   (17,141)     (17,862)
Contributions to pension plans                        (1,132)      (1,124)
Share-based compensation                              4,933        1,877
Deferred tax provision                                (39,918)     (30,966)
Changes in assets and liabilities before initial
effects of business acquisitions and dispositions     22,349       45,828
Other, net                                            (2,719)      (1,723)
Net cash provided by (used for) operating activities  (12,867)     29,144
Investing Activities
Purchases of property, plant & equipment              (26,851)     (18,848)
Proceeds from sale of property, plant & equipment     1,623        10,750
Proceeds from sale of businesses, net of transaction  18,164       11,827
Payment for businesses acquired, net of acquired      (60,212)     -
Other, net                                           2            31
Net cash provided by (used for) investing activities  (67,274)     3,760
Financing Activities
Payment of current maturities and long-term debt      (10,016)     (90)
Dividends paid                                        (1,299)      (1,295)
Proceeds from exercise of stock options               3,203        3,483
Other, net                                            856          331
Net cash provided by (used for) financing activities  (7,256)      2,429
Net increase (decrease) in cash and cash equivalents  (87,397)     35,333
Cash and cash equivalents at beginning of year        275,478      155,839
Cash and cash equivalents at end of period            $ 188,081   $ 191,172

                                                                       Table D
Segment Financial Data and Unit Shipments
                                   (Amounts in thousands, except per
                                   unit data)
                                   Three Months Ended
                                   March 31
                                   2013                2012
Total Revenues
Aggregates segment (a)             $ 358,999          $ 355,618
Intersegment sales                 (33,604)            (31,120)
Net sales                          325,395             324,498
Concrete segment (b)               99,889              92,471
Intersegment sales                 -                   (451)
Net sales                          99,889              92,020
Asphalt Mix segment                67,287              71,356
Intersegment sales                 -                   -
Net sales                          67,287              71,356
Cement segment (c)                 22,693              20,516
Intersegment sales                 (10,710)            (8,539)
Net sales                          11,983              11,977
Net sales                          504,554             499,851
Delivery revenues                  33,608              36,031
Total revenues                     $ 538,162          $ 535,882
Gross Profit
Aggregates                         $  24,786          $  34,049
Concrete                           (10,079)            (12,305)
Asphalt Mix                        1,937               (660)
Cement                             1,011               874
Total gross profit                 $  17,655          $  21,958
Depreciation, depletion, accretion and amortization
Aggregates                         $  55,889          $  62,361
Concrete                           7,976               11,172
Asphalt Mix                        2,037               2,251
Cement                             3,906               4,021
Other                              5,789               5,362
Total DDA&A                        $  75,597          $  85,167
Unit Shipments
Aggregates customer tons (d)       25,601              27,186
Internal tons (e)                  2,258               2,266
Aggregates - tons                  27,859              29,452
Ready-mixed concrete - cubic       1,023               964
Asphalt Mix - tons                 1,229               1,284
Cement customer tons               122                 108
Internal tons (e)                  126                 109
Cement - tons                      248                 217
Average Unit Sales Price (including internal
Aggregates (freight-adjusted) (f)  $   10.72         $   10.25
Ready-mixed concrete               $   92.02         $   91.78
Asphalt Mix                        $   53.76         $   54.21
Cement                             $   82.92         $   78.28

(a) Includes crushed stone, sand and gravel, sand, other aggregates, as well
as transportation and service revenues associated with the aggregates
(b) Includes ready-mixed concrete, concrete block, precast concrete, as well
as building materials purchased for resale.
(c) Includes cement and calcium products.
(d) Includes tons marketed and sold on behalf of a third-party pursuant to a
volumetric production payment (VPP) agreement.
(e) Represents tons shipped primarily to our downstream operations (i.e.,
asphalt mix and ready-mixed concrete). Sales from internal shipments
 are eliminated in net sales presented above and in the accompanying
Condensed Consolidated Statements of Earnings.
(f) Freight-adjusted sales price is calculated as total sales dollars less
freight to remote distribution sites divided by total sales units excluding
 VPP tons.

                                                                    Table E
1. Supplemental Cash Flow Information
Supplemental information referable to the Condensed
Consolidated Statements of Cash Flows for the three
months ended March 31 is summarized below:
                                                       (Amounts in thousands)
                                                       2013         2012
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Interest                                               $  1,426   $   175
Income taxes                                           584          1,816
Supplemental Schedule of Noncash Investing and
Financing Activities
Accrued liabilities for purchases of property, plant & 5,404        3,895
2. Reconciliation of Non-GAAP Measures
Generally Accepted Accounting Principles (GAAP) does not define "free cash
flow," "Aggregates segment cash gross profit," "Earnings Before Interest,
Taxes, Depreciation and Amortization" (EBITDA) and "cash earnings." Thus,
free cash flow should not be considered as an alternative to net cash provided
by operating activities or any other liquidity measure defined by GAAP.
Likewise, aggregates segment cash gross profit, EBITDA and cash earnings
should not be considered as alternatives to earnings measures defined by GAAP.
We present these metrics for the convenience of investment professionals who
use such metrics in their analyses, and for shareholders who need to
understand the metrics we use to assess performance and to monitor our cash
and liquidity positions. The investment community often uses these metrics as
indicators of a company's ability to incur and service debt. We use free cash
flow, Aggregates segment cash gross profit, EBITDA, cash earnings and other
such measures to assess liquidity and the operating performance of our various
business units and the consolidated company. We do not use these metrics as a
measure to allocate resources. Additionally, we adjust EBITDA for certain
items to provide a more consistent comparison of performance from period to
period. Reconciliations of these metrics to their nearest GAAP measures are
presented below:
Free Cash Flow
Free cash flow deducts purchases of property, plant & equipment from net cash
provided by operating activities.
                                                       (Amounts in thousands)
                                                       Three Months Ended
                                                       March 31
                                                       2013         2012
Net cash provided by (used for) operating activities   $ (12,867)  $ 29,144
Purchases of property, plant & equipment               (26,851)     (18,848)
Free cash flow                                        $ (39,718)  $ 10,296
Aggregates segment Cash Gross Profit
Aggregates segment cash gross profit adds back noncash charges for
depreciation, depletion, accretion and amortization (DDA&A) to Aggregates
segment gross profit.
                                                       (Amounts in thousands)
                                                       Three Months Ended
                                                       March 31
                                                       2013         2012
Aggregates segment
Gross profit                                           $  24,786   $ 34,049
DDA&A                                                  55,889       62,361
Aggregates segment cash gross profit                   $  80,675   $ 96,410

                                                                  Table F
Reconciliation of Non-GAAP Measures (Continued)
EBITDA and Cash Earnings
EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation and
Amortization. Cash earnings adjusts EBITDA for net interest expense and
current taxes.
                                     (Amounts in thousands)
                                     Three Months Ended
                                     March 31
                                     2013              2012       2011
Reconciliation of Net Loss to EBITDA
and Cash Earnings
Net loss                             $          $      $    
                                       (54,836)      (52,053)   (54,733)
Benefit from income taxes            (38,818)          (38,397)   (37,430)
Interest expense, net                52,752            52,266     42,250
Earnings on discontinued operations, (6,783)           (4,997)    (9,889)
net of tax
EBIT                                 (47,685)          (43,181)   (59,802)
Plus: Depreciation, depletion,       75,597            85,167     90,586
accretion and amortization
EBITDA                              $          $      $    
                                       27,912       41,986    30,784
Less: Interest expense, net         (52,752)          (52,266)   (42,250)
Current taxes                       4,407             8,626      (11,600)
Cash earnings                        $          $      $    
                                       (20,433)      (1,654)   (23,066)
Adjusted EBITDA and Adjusted EBIT
EBITDA                               $          $      $    
                                       27,912       41,986    30,784
Recovery from legal settlement       -                 -          (25,546)
Gain on sale of real estate and      (3,259)           (5,979)    -
Restructuring charges                1,509             1,411      -
Exchange offer costs                 -                 10,065     -
Adjusted EBITDA                      $          $      $     
                                       26,162       47,483    5,238
Less: Depreciation, depletion,       75,597            85,167     90,586
accretion and amortization
Adjusted EBIT                        $          $      $   
                                      (49,435)       (37,684)   (85,348)
EBITDA Bridge                       Three Months
(Amounts in millions)                March 31
2012 Actual                         $       
Plus: Gain on sale of real estate   (6)
and businesses
Restructuring charges                1
Exchange offer costs                 10
2012 Adjusted EBITDA                 47
Increase / (Decrease) due to:
Aggregates: Volumes                 (9)
Selling Prices                       13
Higher costs and other items         (19)
Concrete                            (1)
Asphalt Mix                          3
Other                                (7)
2013 Adjusted EBITDA                27
Plus:Gain on sale of real  3
estate and businesses
Restructuring charges                (2)
2013 Actual                          $       

SOURCE Vulcan Materials Company

Contact: Investor Contact: Mark Warren (205) 298-3220; Media Contact: David
Donaldson (205) 298-3220
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