BIRMINGHAM, Ala., Feb. 8 /PRNewswire-FirstCall/ -- Vulcan Materials Company (NYSE: VMC), the nation's largest producer of construction aggregates, announced results today for the fourth quarter and full year ended December 31, 2009.
Fourth Quarter Summary and Comparisons with the Prior Year
-- Net earnings from continuing operations were a loss of $13 million, or $0.10 per diluted share.
-- Cash earnings from continuing operations were $67 million.
-- Aggregates shipments declined 23 percent, reducing earnings $0.57 per diluted share.
-- Aggregates pricing increased 5 percent.
-- Aggregates cash fixed costs decreased 8 percent.
-- Selling, administrative and general expenses decreased 7 percent.
-- Total contract awards for highways increased 13 percent in Vulcan-served states.
Commenting for the Company, Don James, Vulcan's Chairman and Chief Executive Officer, stated, "Our employees continue to run the business in a cost-efficient manner, maximizing our cash generation during the economic downturn. Their efforts in the fourth quarter contributed to further reductions in cash fixed costs in our operations as well as reductions in overhead expenses. Continued weakness in private construction activity, uncertainty surrounding the timing and amount of either a formal extension or reauthorization of the multi-year federal highway program, and extremely wet weather suppressed momentum gained from stimulus-related construction. Nonetheless, we finished the year with strong cash generation. For the full year 2009, free cash flow was $343 million, an increase of $261 million from the prior year, and cash earnings per ton of aggregates remained in-line with the prior year.
"We continue to believe that 2010 will be the biggest year for stimulus-related highway construction. Economic stimulus funds of $27.5 billion designated for highway projects under the American Recovery and Reinvestment Act of 2009 buoyed contract awards for highways in the second half of 2009. Despite the failure of Congress to pass a fully-funded extension of SAFETEA-LU, the previous highway authorization that expired on September 30, 2009, contract awards for highways in the fourth quarter increased 9 percent from the prior year. Vulcan-served states, which were apportioned 55 percent more funds than other states, generally have lagged the rest of the country in awarding contracts and starting stimulus-related construction. In the fourth quarter, however, contract awards for highway projects in our states increased 13 percent from the prior year versus a 2 percent increase in other states. We are encouraged by the increased award activity and are optimistic that stimulus-related highway projects in Vulcan-served states, after a slow start, are now moving forward and will benefit demand for our products in 2010."
Fourth Quarter Operating Results Commentary
Fourth quarter earnings for aggregates were lower versus the prior year as the impact of reduced shipments more than offset the earnings benefit from improved prices and cost control measures. Aggregates shipments declined 23 percent from the prior year due to weak demand and extremely wet weather in most key markets. Lower aggregates volumes reduced fourth quarter EBITDA by approximately $69 million versus the prior year. Most markets realized price improvement from the prior year. The overall price increase benefited somewhat from a product mix shift to more aggregates for highway construction.