RALEIGH, N.C.--(BUSINESS WIRE)--Feb. 4, 2004 - Martin Marietta Materials, Inc. (NYSE:MLM), today reported financial results for the fourth quarter and year ended December 31, 2003. Fourth-quarter net earnings of $29.3 million, or $0.60 per diluted share, increased 83 percent versus 2002 fourth-quarter net earnings of $16.1 million, or $0.33 per diluted share. Earnings improvement resulted from a 13 percent increase in heritage aggregates shipments coupled with a 660-basis-point improvement in gross margin for heritage aggregates products. Operating cash flow was $34.5 million, or 48 percent, higher than the prior-year period, most notably as a result of a reduction of working capital. During the quarter, the Corporation purchased $13 million of its common stock through open-market purchases and ended the quarter with $125 million in cash.
For the quarter, net sales were $377.7 million and earnings from operations were $51.8 million, increases of 11 and 73 percent, respectively, compared with the fourth quarter of 2002. Earnings were positively affected by increases in shipments in most of the Corporation's markets.
Excluding discontinued operations, net sales for the year increased 5 percent to $1.498 billion compared with $1.428 billion in the prior year. Inclusive of discontinued operations, net sales for the year were $1.536 billion in 2003 versus $1.497 billion in 2002. Earnings before cumulative effect of accounting changes was $2.05 per diluted share in 2003 compared with $2.00 per diluted share in 2002. Inclusive of the effect of several accounting changes highlighted in the following sections, for the year ended December 31, 2003, net earnings were $93.6 million, or $1.91 per diluted share, compared with net earnings for the comparable prior-year period of $86.3 million, or $1.77 per diluted share.
MANAGEMENT COMMENTARY:
2003 RESULTS
"We are encouraged by the progress of our structural composites technology and products. The superior technical and performance characteristics of these products, when compared with conventional materials, including weight reduction, corrosion resistance and other positive attributes, provide a strong platform for product innovation in structural materials. We continue to introduce new products to end-user markets and focus on commercialization and customer acceptance. We are producing all-composite specialty trailers in our Sparta, North Carolina, plant and have scheduled delivery of our first trailers to the waste hauling market. The start-up costs related to our structural composites business were $1.8 million for the fourth quarter and $5.3 million for the year.
"For the Corporation, earnings in the second half of 2003 were the best since our peak year of the last economic cycle in 1999.
2004 OUTLOOK
"We expect 2004 to be our first full year of production of structural composites products as we work toward our strategic objective of creating a business with characteristics that include high organic growth rates, low capital intensity and noncyclicality, based on diverse products and opportunities for substitution for existing structural materials. Initial start-up costs will continue through the first half of 2004, as we ramp up production and introduce new product technology to potential customers. Although revenue has been insignificant to date and any start-up opportunity is subject to uncertainty and risks, we expect 2004 composites sales to range from $15 million to $30 million, based on the markets and opportunities identified to date. Sales will be skewed toward the latter part of the year. Earnings for the business are expected to be approximately breakeven in 2004 with continued start-up costs in the first half of the year expected to be offset by earnings as sales ramp up.
Martin Marietta is the nation's second largest producer of construction aggregates and a leading producer of magnesia-based chemical products used in a wide variety of industries. For more information about Martin Marietta, refer to our Web site at [link url=http://www.martinmarietta.com]www.martinmarietta.com[/link].
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