Earnings Per Diluted Share of $0.23

Gross Profit Margin Up 280 Basis Points Driven by Year-over-Year Earnings Improvement in Each Operating Segment

BIRMINGHAM, Ala., Aug. 1, 2013 /PRNewswire/ -- Vulcan Materials Company (NYSE: VMC), the nation's largest producer of construction aggregates, today announced results for the second quarter ending June 30, 2013.

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Second Quarter Summary

Net sales increased $47 million, or 7 percent, versus the prior year.
Gross profit increased $27 million, or 25 percent, from the prior year's second quarter.
Aggregates gross profit increased $15 million and gross profit margin increased 130 basis points.
- Aggregates shipments increased 2 percent from the prior year despite significantly more wet weather in the eastern half of the U.S.
- Aggregates pricing increased 4 percent versus the prior year.
Non-aggregates segment gross profit improved $12 million.
- Volumes in ready-mixed concrete and cement increased 15 percent and 20 percent, respectively, due to continued improvement in private construction.
Earnings from continuing operations were $30 million, or $0.23 per diluted share, versus a loss of $17 million, or $0.13 per diluted share, in the prior year.
The Company divested certain non-core operating assets for approximately $35 million in proceeds and a gain of $0.10 per diluted share.
EBITDA was $164 million, an increase of $61 million, or 59 percent, compared to the second quarter of last year. Excluding gains on the sale of assets, as well as restructuring and exchange offer costs, Adjusted EBITDA increased 11 percent.

Don James , Chairman and Chief Executive Officer, said, "Each of our operating segments reported solid growth in second quarter earnings, contributing to improved gross profit margin and earnings per share. We achieved these results despite challenging, wet weather conditions that sharply reduced June shipments in many markets. Demand for our products continues to benefit from recovery in private construction activity, particularly residential construction, in many of our key markets. We realized strong increases in second quarter aggregates shipments in key states – driven mostly by housing demand. Growth in residential construction activity, and its traditional following impact on private nonresidential construction, continues to underpin our expectations for volume and earnings improvement in 2013. Assuming more normal weather patterns, we expect that most of the delays in shipments due to weather in the first half of the year can be recovered in the second half of the year."

Commentary on Second Quarter 2013 Segment Results
Aggregates segment gross profit was $127 million, a $15 million increase from the prior year. This earnings improvement was due to higher prices in virtually all markets and higher volumes in many markets. Overall, freight-adjusted aggregates prices increased 4 percent versus the prior year. Aggregates shipments in a number of the Company's markets increased sharply versus the prior year. Shipments in Arizona and Florida increased more than 50 percent due mostly to strong private construction demand. Shipments in Texas and along the central Gulf Coast also benefited from stronger demand, particularly large industrial projects, increasing more than 20 percent versus the prior year. Aggregates shipments in North Carolina and California increased 10 to 20 percent compared to the prior year. Shipments in the Midwest and Virginia were sharply lower due to wet weather and the timing of certain large projects in the prior year.

Gross profit from non-aggregates businesses improved $12 million versus the prior year. Segment earnings for Concrete and Cement both benefited from sharply higher shipments. Asphalt Mix segment earnings improved due to lower liquid asphalt costs. Asphalt unit profitability, as measured by materials margin, increased 20 percent compared to the prior year.

2013 Outlook
Regarding the Company's outlook, Mr. James stated, "We are encouraged by the continued improvement in the economic and construction-related fundamentals that drive demand for our products. Housing starts in the U.S. are up sharply from a year ago and contract awards for private nonresidential buildings, measured in square feet, have increased double-digits as well. Importantly, we are seeing significant growth in housing starts in several key states, including Arizona, California, Florida, Georgia and Texas. Growth in residential construction leads to growth in demand for private non-residential investment as well as new sources of tax revenue, all of which drive increased construction activity. Consequently, aggregates demand in private construction is growing.

Mr. James continued, "As we look at the projects that could impact our 2013 aggregates volumes, we continue to see a disproportionately greater number of large highway and industrial projects. The timing and quantity of shipments to these projects remains difficult to predict. Our current expectation is for aggregates demand from public construction, including highways and other infrastructure, to approximate 2012. However, recent growth, albeit modest, in new highway contract awards has resulted from a more stable and predictable funding environment. New highway projects, as measured by trailing twelve month contract awards, increased 1 percent versus the prior year's level – the second consecutive quarter with an increase. The large increase in TIFIA funding contained in last year's highway bill will positively impact future demand.

"As we look to the remainder of 2013, we expect second half aggregates shipments to increase 2 to 4 percent versus the prior year. This volume outlook assumes more normal weather patterns throughout the remainder of the year. Additionally, the timing of aggregates shipments to several large projects remains outside our control and as a result can cause some variability in our year-over-year growth.

"Over each of the past four quarters, our year-over-year quarterly pricing gains of at least 4 percent and the geographic breadth of the pricing improvement help reinforce our expectations for price growth of 4 percent in 2013.

"Additionally, earnings in each of our non-aggregates segments should improve versus the prior year and contribute significantly to our overall earnings improvement in 2013. Asphalt materials margin increased throughout 2012 and we expect materials 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 and private construction continue to recover in key states. Concrete volumes in the first half of 2013 increased 11 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 to higher shipments and pricing as well as lower production costs.

"We continue to expect full year Selling, Administrative and General expenses to be flat to slightly down as compared to the prior year. Through the first half of 2013, controllable costs are down versus the prior year as we continue to tightly manage expenditures.

"We remain focused on our strategic initiative to enhance our leading aggregates reserve position in attractive markets. During the first half of 2013, we divested certain assets in lower margin, lower growth markets in the Midwest for approximately $40 million in proceeds. Additionally, we added aggregates reserves and operations in attractive markets in Texas and Georgia through acquisitions totaling approximately $90 million. Going forward, we will continue to look for opportunities to further enhance our strategic coast-to-coast footprint."

Conference Call
Vulcan will host a conference call at 9:00 a.m. CT on August 1, 2013. A live webcast will be available via the Company's website at www.vulcanmaterials.com. Investors and other interested parties in the U.S. may also access the teleconference live by calling 855-877-0343 approximately 10 minutes before the scheduled start. International participants can dial 678-509-8772. The access code is 19403413. 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.

FORWARD-LOOKING STATEMENT DISCLAIMER
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.

Vulcan Announces Second Quarter 2013 Results