<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
Commission File Number 1-12744
MARTIN MARIETTA MATERIALS, INC.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1848578
- - --------------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
2710 Wycliff Road, Raleigh, NC 27607
- - --------------------------------------- --------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 919-781-4550
-----------------------------
Former name: None
-------------------------------------------------------------------
Former name, former address and former fiscal year,
if changes since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Class Outstanding as of April 30, 1996
------------------------------- --------------------------------
Common Stock, $.01 par value 46,079,300
Page 1 of 18
Exhibit Index is on Page 16
<PAGE> 2
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
INDEX
<TABLE>
Page
----
<S> <C> <C>
Part I.Financial Information:
Item 1. Financial Statements.
Condensed Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 3
Condensed Consolidated Statements of Earnings -
Three Months Ended March 31, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 9
Part II.Other Information:
Item 1. Legal Proceedings. 14
Item 4. Submission of Matters to a Vote of Security Holders. 14
Item 5. Other Information. 14
Item 6. Exhibits and Reports on Form 8-K. 15
Signatures 15
Exhibit Index 16
</TABLE>
Page 2 of 18
<PAGE> 3
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- ------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
Current assets:
Accounts receivable, net $ 97,785 $ 94,759
Affiliates receivable 6,262 89,712
Inventories, net 119,842 113,402
Deferred income tax benefit 12,604 12,622
Other current assets 3,228 3,860
----------- ------------
Total Current Assets 239,721 314,355
----------- ------------
Property, plant and equipment 924,754 919,862
Allowances for depreciation, depletion and
amortization (538,689) (527,639)
----------- ------------
Net property, plant and equipment 386,065 392,223
Other noncurrent assets 19,483 18,248
Noncurrent affiliates receivable -- 3,333
Cost in excess of net assets acquired 38,221 37,245
Other intangibles 23,269 23,967
----------- ------------
Total Assets $ 706,759 $ 789,371
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Book overdraft $ 3,902 $ 2,927
Accounts payable 25,508 26,211
Affiliates payable 24,090 6,822
Accrued salaries, benefits and payroll taxes 15,850 15,426
Accrued insurance and other taxes 7,193 5,551
Income taxes 1,962 2,192
Current maturities of long-term debt 2,808 103,740
Other current liabilities 8,749 10,467
----------- ------------
Total Current Liabilities 90,062 173,336
Long-term debt 124,871 124,986
Pension, postretirement, and postemployment benefits 49,020 47,483
Other noncurrent liabilities 8,732 9,415
Noncurrent deferred income taxes 11,261 10,606
----------- ------------
Total Liabilities 283,946 365,826
----------- ------------
Shareholders' equity:
Common stock, par value $.01 per share 461 461
Additional paid-in capital 331,303 331,303
Retained earnings 91,049 91,781
----------- ------------
Total Shareholders' Equity 422,813 423,545
----------- ------------
Total Liabilities and
Shareholders' Equity $ 706,759 $ 789,371
=========== ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 3 of 18
<PAGE> 4
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1996 1995
------------ ------------
(Thousands of Dollars, Except Per Share Data)
<S> <C> <C>
Net sales $ 136,547 $ 129,942
Cost of sales 112,742 100,869
------------ ------------
Gross Profit 23,805 29,073
Selling, general & administrative expense 14,736 14,104
Research and development 475 445
------------ ------------
Earnings from Operations 8,594 14,524
Interest expense (3,174) (2,112)
Other income and expenses, net 1,170 263
------------ ------------
Earnings before Taxes on Income 6,590 12,675
Taxes on income 2,253 4,446
------------ ------------
Net Earnings $ 4,337 $ 8,229
============ ============
Net earnings per share $ 0.09 $ 0.18
============ ============
Average number of common shares outstanding 46,079,300 46,079,300
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 4 of 18
<PAGE> 5
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
(Thousands of Dollars)
Operating activities:
Net earnings $ 4,337 $ 8,229
Adjustments to reconcile earnings to cash
provided by operating activities:
Depreciation, depletion and amortization 14,912 13,172
Other items, net 174 387
Changes in operating assets and liabilities:
Accounts receivable (3,026) (5,469)
Affiliates receivable (585) (1,068)
Inventories (6,515) (15,420)
Accounts payable (2,210) 4,514
Other assets and liabilities, net (823) 12,913
----------- -----------
Net cash provided by operating activities 6,264 17,258
----------- -----------
Investing activities:
Additions to property, plant and equipment (11,264) (15,466)
Acquisitions, net -- (135,472)
Transactions with Lockheed Martin Corporation 87,369 31,747
Note receivable from Lockheed Martin Corporation -- 53,000
Other investing activities, net 3,995 390
----------- -----------
Net cash provided by (used for) investing activities 80,100 (65,801)
----------- -----------
Financing activities:
Repayments and extinguishments of long-term debt (101,046) (645)
Increases in long-term debt -- 400
Dividends (5,068) (5,068)
Loan payable to Lockheed Martin Corporation 18,775 47,762
----------- -----------
Net cash (used for) provided by financing activities (87,339) 42,449
----------- -----------
Net decrease in cash (975) (6,094)
Book overdraft, beginning of period (2,927) (2,218)
----------- -----------
Book overdraft, end of period $ (3,902) $ (8,312)
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 5 of 18
<PAGE> 6
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of
Martin Marietta Materials, Inc. (the "Corporation") have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to the Quarterly Report on
Form 10-Q and to Article 10 of Regulation S-X. The Corporation has
continued to follow the accounting policies set forth in the audited
consolidated financial statements and related notes thereto included in
the Corporation's Annual Report on Form 10-K for the year ended December
31, 1995, filed with the Securities and Exchange Commission on March 27,
1996. In the opinion of management, the interim financial information
provided herein reflects all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the results of operations
for the interim periods. The results of operations for the three months
ended March 31, 1996, are not necessarily indicative of the results to be
expected for the full year.
The Corporation is a subsidiary of Lockheed Martin Corporation ("Lockheed
Martin") which was formed as a result of a business combination in March
1995 between the Martin Marietta Corporation ("Martin Marietta") and the
Lockheed Corporation. Lockheed Martin, directly and indirectly through a
subsidiary, owns approximately 81% of the Corporation's outstanding common
stock. For purposes of these financial statements and the related notes
thereto, all references to Lockheed Martin are meant to include Martin
Marietta Corporation and its consolidated subsidiaries, except where
otherwise specified.
2. Inventories
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ -----------
<S> <C> <C>
(In Thousands)
Finished products $ 93,856 $ 86,086
Product in process and raw materials 14,555 15,427
Supplies and expendable parts 19,050 19,259
----------- ----------
127,461 120,772
Less allowances (7,619) (7,370)
----------- ----------
Total $ 119,842 $ 113,402
=========== ==========
</TABLE>
Page 6 of 18
<PAGE> 7
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
3. Long-Term Debt
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
--------------- ---------------
(In Thousands)
<S> <C> <C>
7% Debentures, due 2025 $ 124,179 $ 124,177
8-1/2% Notes, due 1996 -- 100,000
Acquisition notes, interest rates
ranging from 6% to 10% 2,711 3,675
Other notes 789 874
--------------- ---------------
127,679 228,726
Less current maturities (2,808) (103,740)
--------------- ---------------
Total $ 124,871 $ 124,986
=============== ===============
</TABLE>
The 8-1/2% Notes were redeemed by the holders upon their maturity on
March 1, 1996. During the period these Notes were outstanding, Lockheed
Martin reimbursed the Corporation for the portion of the interest in
excess of 5% per annum.
In addition to the above stated long-term debt, the Corporation borrowed,
from a subsidiary of Lockheed Martin, $17 million under the terms of a
credit agreement and $1.8 million under the terms of a cash management
agreement. For financial reporting purposes, these amounts are classified
with affiliates payable in the accompanying financial statements. The
proceeds of these borrowings were used primarily to help finance the
repayment of the 8-1/2% Notes and to assist funding the Corporation's
working capital requirements during the first quarter of 1996.
The Corporation's interest payments were approximately $2.6 million in
1996 and $2.7 million in 1995 for the three months ended March 31.
4. Income Taxes
The Corporation's effective income tax rate for the first three months was
34.2% in 1996 and 35.1% in 1995. The effective rate for the first quarter
of 1996 was lower than the current federal corporate income tax rate of
35% due to the effect of several offsetting factors. Consequently, the
Corporation's effective tax rate reflects the effect of state income taxes
which has been more than offset by the favorable impact of differences in
book and tax accounting arising from the permanent benefits associated
with the depletion allowances for mineral reserves, foreign subsidiaries'
operating earnings, and equity earnings in nonconsolidated investments.
Currently, the results of operations of the Corporation are included in a
consolidated federal income tax return with Lockheed Martin. For years
ended prior to January 1, 1995, the Corporation's results of operations
were included in a consolidated federal income tax return with Martin
Marietta. Income taxes allocable to the operations of the Corporation are
calculated as if it had filed separate income tax returns for the periods
presented herein.
The Corporation's income tax payments were approximately $1.9 million in
1996 and $0.3 million in 1995, for the three months ended March 31.
Page 7 of 18
<PAGE> 8
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
5. Contingencies
In the opinion of management and counsel, it is unlikely that the outcome
of litigation and other proceedings, including those pertaining to
environmental matters, relating to the Corporation and its subsidiaries,
will have a material adverse effect on the results of the Corporation's
operations or its financial position.
6. Other Matters
The Corporation adopted the Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Assets to be Disposed Of" ("FAS 121") as of January 1, 1996. The
pronouncement requires that certain long-lived assets be reviewed for
potential impairment when circumstances indicate that the carrying amount
of such assets may not be recoverable. Additionally, FAS 121 requires
that certain long-lived assets held for disposition be reported at the
lower of the carrying amount or fair value less any selling costs. The
impact of the adoption of this pronouncement did not have a material
effect on the Corporation's consolidated financial position or on its
results of operations.
In February 1994, the Corporation was authorized by its shareholders and
the Board of Directors to repurchase up to 2,000,000 shares of the
Corporation's Common Stock for issuance under the Corporation's Omnibus
Securities Award Plan. On May 3, 1994, the Board of Directors authorized
the repurchase of an additional 500,000 shares for general corporate
purposes. As of the date of this Quarterly Report on Form 10-Q, there
have been 68,200 shares of Common Stock repurchased by the Corporation
under these authorizations.
Page 8 of 18
<PAGE> 9
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 1996 and 1995
OVERVIEW Martin Marietta Materials, Inc. (the "Corporation") reports
operations in two industry reporting segments, aggregates and magnesia-based
products. The Corporation is the United States' second largest producer of
aggregates used for the construction of highways and other infrastructure
projects and for commercial and residential construction. The Corporation's
Aggregates division processes or ships aggregates, primarily crushed stone,
from a network of approximately 200 quarries and distribution facilities in 19
states in the southeastern, midwestern and central regions of the United States
and in the Bahamas and Canada. The Corporation also manufactures and markets
magnesia-based products, including heat-resistant refractory products for the
steel industry and magnesia-based chemical products for industrial,
agricultural and environmental uses, including wastewater treatment and acid
neutralization.
The Corporation continued in excellent overall financial condition during the
first quarter of 1996 and maintains adequate capital resources to operate,
compete and grow in an increasingly challenging competitive environment. Net
earnings for the first quarter of 1996 were $4.3 million, or $0.09 per share, a
significant decrease from 1995 first quarter earnings of $8.2 million, or $0.18
per share, primarily as a result of severe adverse weather conditions during
the quarter. The Corporation repaid the $100 million principal amount of its
8-1/2% Notes which were redeemed by the holders on March 1, 1996. The
Corporation's ratio of debt to total capitalization at March 31, 1996, was 26%,
down from 35% reported at December 31, 1995.
The Corporation entered into an agreement, effective March 31, 1996, to sell
certain former Dravo operations in the Pittsburgh area. The costs and expenses
associated with the divestiture of these operations were provided for in the
first quarter of 1995 in connection with the Dravo Basic Materials acquisition
which was accounted for under the purchase method of accounting. Consequently,
the divestiture of these operations, which transaction closed on April 4, 1996,
had no impact on the Corporation's financial position or on its results of
operations.
Management is aware that, in the wake of Lockheed Martin's acquisition of the
Loral Corporation, Lockheed Martin has stated that it is reviewing certain
non-strategic businesses and other assets, including its 81% ownership of the
Corporation's common stock, with respect to possible divestiture. However, as
of the date of this filing, management is not aware of any final decision that
has been made by Lockheed Martin in connection with its continued ownership of
the Corporation's common stock.
RESULTS OF OPERATIONS Net sales for the quarter were $136.5 million, a 5%
increase over 1995 first quarter sales of $129.9 million. Earnings from
operations were $8.6 million in the first three months of 1996 compared with
$14.5 million in the first three months of 1995. Consolidated net earnings for
the quarter were $4.3 million, or $0.09 per share, a decrease of $3.9 million
from 1995 first quarter earnings of $8.2 million, or $0.18 per share.
Page 9 of 18
<PAGE> 10
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
First Quarter Ended March 31, 1996 and 1995
RESULTS OF OPERATIONS (continued) Sales for the Aggregates division increased 6%
to $103.6 million for the first quarter, compared with the year-earlier period.
This increase in sales reflects an approximate 4% increase in shipments and a
slight increase in the division's average net selling price, when compared to
the same period in 1995. The division's operating profits of $5.6 million
dropped significantly in the first quarter of 1996 compared with the same period
in 1995. The Corporation's aggregates business is highly seasonal, due
primarily to the effect of weather conditions on construction activity levels,
most of which occurs typically in the spring, summer, and early fall.
Consequently, severe winter weather conditions within most of the markets served
by the division during the first quarter of 1996 contributed to lower production
levels and higher costs. Management believes that the Corporation's annual
production and shipments, excluding acquisitions, will see some improvement for
the full year 1996, compared to the prior year.
The Magnesia Specialties division had three-month 1996 sales of approximately
$32.9 million, an increase of approximately 3% in the first three months of
1996 over 1995. Even though shipments of refractory products were down
slightly from the year-earlier period, overall prices were up in the quarter.
While a softening in pricing pressure occurred in the first quarter because of
a more favorable customer and product mix, management expects that price
weaknesses will continue in this sector for the foreseeable future due to
market limitations. Chemical product sales for the quarter were above the
prior year's first quarter sales, primarily as a result of strong sales of
industrial products and magnesium hydroxide. Sales of lime, used in the steel
industry's basis oxygen furnaces, continued to strengthen into the first
quarter. Compared to the year-earlier period, the division's operating
earnings increased 8% to $3.0 million.
The labor union contract which covers the employees at the Magnesia Specialties
operation at Woodville, Ohio, expires in June 1996. There are pending
negotiations in connection with this union agreement. The Corporation's
management considers its relations with its employees to be good and believes
that it will be successful in negotiating a new labor contract; however, there
can be no assurance that a successor agreement will be reached or that a work
stoppage will not occur.
Page 10 of 18
<PAGE> 11
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(continued)
First Quarter Ended March 31, 1996 and 1995
RESULTS OF OPERATIONS (continued) The following table presents net sales,
gross profit, selling, general and administrative expense, and earnings from
operations data for the Corporation and each of its divisions. In each case
the data is stated as a percentage of net sales of the Corporation or the
relevant division, as the case may be:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------------------
(Dollars in Thousands)
1996 1995
--------------------- ----------------------
% of % of
Amount Net Sales Amount Net Sales
<S> <C> <C> <C> <C>
Net sales:
Aggregates $103,642 100.0 $ 97,849 100.0
Magnesia Specialties 32,905 100.0 32,093 100.0
-------- ----- -------- -----
Total 136,547 100.0 $129,942 100.0
Gross profit:
Aggregates 16,040 15.5 $ 21,051 21.5
Magnesia Specialties 7,765 23.6 8,022 25.0
-------- ----- -------- -----
Total 23,805 17.4 $ 29,073 22.4
Selling, general & administrative
expense:
Aggregates 10,456 10.1 $ 9,314 9.5
Magnesia Specialties 4,280 13.0 4,790 14.9
-------- ----- -------- -----
Total 14,736 10.8 $ 14,104 10.9
Earnings from operations:
Aggregates $ 5,584 5.4 $ 11,737 12.0
Magnesia Specialties 3,010 9.1 2,787 8.7
-------- ----- -------- -----
Total 8,594 6.3 $ 14,524 11.2
</TABLE>
Page 11 of 18
<PAGE> 12
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
First Quarter Ended March 31, 1996 and 1995
RESULTS OF OPERATIONS (continued) Other income and expenses, net, for the
quarter ended March 31, were $1.2 million in income in 1996 and $0.3 million in
income in 1995. In addition to several offsetting amounts, the 1996 amount
included $1.1 million of interest income principally from amounts on loan to
Lockheed Martin during the quarter and $0.4 million of equity losses from the
Corporation's investment in an Iowa-based operation. The 1995 amount included
only $0.6 million of interest income during the first quarter of 1995 and $0.9
million of equity losses from the Iowa-based investment.
Interest expense was approximately $1.1 million, or 50%, higher in the first
three months of 1996 over 1995. The increase in 1996 resulted from the net
effect of the additional long-term borrowings by the Corporation in December
1995, when the Corporation publicly offered and sold its $125-million 7%
Debentures, offset by the reductions of long-term debt during the quarter
caused by the repayment of the 8-1/2% Notes on March 1, 1996, and the reduced
amounts outstanding during the quarter that were due to Lockheed Martin under
the credit agreement.
The Corporation's estimated effective tax rate for the first three months was
34.2% in 1996 and 35.1% in 1995. See Note 4 of the Notes to Condensed
Consolidated Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES Net cash flow provided by operating
activities during the first quarter of 1996 was $6.3 million compared with net
cash provided by operations of $17.3 million in the comparable period of 1995.
The cash flow for both 1995 and 1996 was principally from earnings, before
deducting depreciation, depletion and amortization, offset by working capital
increases. Working capital increases during the first quarter of 1996 were
primarily the result of increases in inventory and accounts receivable
balances, as well as decreases in trade accounts payable. Working capital
demand increased in the first quarter of 1995 principally because of increases
in inventory and accounts receivable balances as a result of growth in
aggregates demand and a build-up of magnesia-based product quantities, both of
which were offset by increased balances in trade accounts payable, accrued
income taxes and accrued expenses in connection with the Dravo transaction.
The seasonal nature of the construction aggregates business impacts quarterly
net cash provided by operating activities when compared with the year. Full
year 1995 net cash provided by operating activities was $128.6 million,
compared with $17.3 million provided by operations in the first quarter of
1995.
Page 12 of 18
<PAGE> 13
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
First Quarter Ended March 31, 1996 and 1995
LIQUIDITY AND CAPITAL RESOURCES (continued) First quarter capital expenditures
exclusive of acquisitions were $11.3 million in 1996 and $15.5 million in 1995.
Capital expenditures are expected to be approximately $82 million for 1996,
exclusive of acquisitions. Comparable capital expenditures were $72 million in
1995.
The Corporation relies, for its liquidity requirements, on internally generated
funds, access to capital markets, and funds provided under a cash management
agreement and credit agreement, each with a subsidiary of Lockheed Martin.
Prospectively, the Corporation may borrow from third-party lenders or through
its access to capital markets. With respect to the Corporation's ability to
access the public market, it has an effective shelf registration on file with
the Securities and Exchange Commission for the offering of up to $175 million
of debt securities, which may be issued from time to time. Its ability to
borrow or issue debt securities is dependent, among other things, upon market
conditions. As of March 31, 1996, $1.8 million was outstanding under the cash
management agreement and approximately $17.0 million was outstanding under the
terms of the credit agreement. The proceeds from these borrowings were used
primarily to help finance the repayment of the 8-1/2% Notes and to assist
funding the Corporation's working capital requirements. The approximately $87
million of the Corporation's funds, that were invested with Lockheed Martin
under the terms of the cash management agreement at year-end 1995, were also
used for the repayment of the 8-1/2% Notes.
The Corporation may repurchase up to 2.5 million shares of its common stock
under authorizations of the Board of Directors for use in connection with the
Corporation's Omnibus Securities Award Plan and general corporate purposes. As
of the date of this Quarterly Report on Form 10-Q, there have been 68,200
shares repurchased by the Corporation under these authorizations.
Based on prior performance and current expectations, the Corporation's
management believes cash flows from internally generated funds and access to
capital markets will permit the Corporation to continue to fund the operations
of existing businesses, cover debt service requirements, and allow for the
payment of dividends in 1996. The Corporation may be required to obtain
additional financing in order to fund strategic acquisitions if any such
opportunities arise. The Corporation's 8-1/2% Notes matured on March 1, 1996,
and were paid in full upon redemption by their holders. During the period
these Notes were outstanding, Lockheed Martin reimbursed the Corporation for
the portion of interest paid by the Corporation in excess of 5%.
Page 13 of 18
<PAGE> 14
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Reference is made to Part I. Item 3. Legal Proceedings of the Martin Marietta
Materials, Inc. Annual Report on Form 10-K for the year ended December 31,
1995.
Item 4. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting of Shareholders held on May 2, 1996, the shareholders of
Martin Marietta Materials, Inc.:
(a) Elected Richard G. Adamson, Marcus C. Bennett, Bobby F. Leonard, Frank H.
Menaker, Jr., James M. Reed, William B. Sansom and Stephen P. Zelnak, Jr.
to the Board of Directors of the Corporation to terms expiring at the 1997
Annual Meeting of Shareholders. The following table sets forth the votes
for each director.
<TABLE>
<CAPTION>
Votes Cast For Abstained
-------------- ---------
<S> <C> <C>
Richard G. Adamson 43,396,258 40,758
Marcus C. Bennett 43,396,368 40,648
Bobby F. Leonard 43,396,268 40,748
Frank H. Menaker, Jr. 43,396,368 40,648
James M. Reed 43,396,358 40,658
William B. Sansom 43,396,227 40,789
Stephen P. Zelnak, Jr. 43,396,368 40,648
</TABLE>
(b) Ratified the selection of Ernst & Young LLP, as independent auditors for
the year ending December 31, 1996. The voting results for this
ratification were 43,432,721 -- For; 620 -- Against; and 3,675 --
Abstained.
Item 5. Other Information.
On May 3, 1996, the Corporation's announced that the Board of Directors of
Martin Marietta Materials, Inc., declared a regular quarterly cash dividend on
the Corporation's Common Stock of $0.11 a share, payable to shareholders of
record at the close of business on May 31, 1996.
Page 14 of 18
<PAGE> 15
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
PART II - OTHER INFORMATION
(Continued)
Item 6. Exhibits and Reports on Form 8-K.
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARTIN MARIETTA MATERIALS, INC.
(Registrant)
Date: May 14, 1996 By: /s/ Janice K. Henry
-------------------------------
Janice K. Henry
Vice President, Chief Financial
Officer and Treasurer
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<PAGE> 16
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1996
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Document Page
----------- ------------------------------------------------ ----
<S> <C> <C>
11.01 Martin Marietta Materials, Inc. and Consolidated 17
Subsidiaries Computation of Earnings Per Share
for the Three Months Ended March 31, 1995 and
1996
12.01 Martin Marietta Materials, Inc. and Consolidated 18
Subsidiaries Computation of Ratio of Earnings
to Fixed Charges for the Three Months Ended
March 31, 1996
27 Financial Data Schedule (for SEC use only)
</TABLE>
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<PAGE> 1
Exhibit 11.01
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
For the Three Months Ended March 31
(Amounts in Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Net earnings............................................................ $ 4,337 $ 8,229
========== ==========
Weighted average number of common shares outstanding.................... 46,079,300 46,079,300
========== ==========
Net earnings per common share........................................... $ 0.09 $ 0.18
========== ==========
</TABLE>
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<PAGE> 1
Exhibit 12.01
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
For the Three Months Ended March 31, 1996
(Amounts in Thousands)
EARNINGS:
<TABLE>
<S> <C>
Earnings before income taxes $6,590
(Earnings) losses of less than 50% owned associated companies, net (85)
Interest expense 3,174
Portion of rents representative of an interest factor 281
------
Adjusted Earnings and Fixed Charges $9,960
======
FIXED CHARGES:
Interest Expense $3,174
Capitalized interest 40
Portion of rents representative of an interest factor 281
------
Total Fixed Charges $3,495
======
Ratio of Earnings to Fixed Charges 2.85
======
</TABLE>
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1996, AND THE RELATED
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS FOR THE QUARTER THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 102,275
<ALLOWANCES> 4,490
<INVENTORY> 119,842
<CURRENT-ASSETS> 239,721
<PP&E> 924,754
<DEPRECIATION> 538,689
<TOTAL-ASSETS> 706,759
<CURRENT-LIABILITIES> 90,062
<BONDS> 124,871
0
0
<COMMON> 461
<OTHER-SE> 422,352
<TOTAL-LIABILITY-AND-EQUITY> 706,759
<SALES> 136,547
<TOTAL-REVENUES> 136,547
<CGS> 112,742
<TOTAL-COSTS> 127,953
<OTHER-EXPENSES> (1,210)
<LOSS-PROVISION> 40
<INTEREST-EXPENSE> 3,174
<INCOME-PRETAX> 6,590
<INCOME-TAX> 2,253
<INCOME-CONTINUING> 4,337
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,337
<EPS-PRIMARY> 0.09
<EPS-DILUTED> 0.09
</TABLE>
