2010 NRMCA - National Ready Mixed Concrete Association

featureHighlightsof the 2010NRMCA IndustryData Survey(Analysis of 2009 Data)By Michael J. Olivarri, CPA, Senior Vice President of Finance and Administration, NRMCAIntroductionThe Business Administration Committeeof the National Ready Mixed ConcreteAssociation annually administers theIndustry Data Survey. The survey is a benchmarkingtool against which companies inthe ready mixed concrete industry can measuretheir performance. The survey is confidentialin that all information submitted byeach company is submitted directly to andcompiled by an independent certified publicaccounting fi rm. Individual company detailsare restricted to the company submitting thesurvey and the accounting fi rm.The survey provides performance andratio analyses by which to analyze a company’sfi nancial performance in relation toother companies of similar size, scope orgeographic region. The survey is presentedin four sections: Company Size analysis (bycubic yards), Regional Analysis, CompanyArea Type Analysis and Trend Analysis.Content includes presentation of incomestatement items as a percentage of sales anddollars per cubic yard, fi nancial ratios, balancesheet data, company demographics,employee productivity data and five-yeartrend analysis of various fi nancial data.Although participation levels and companymix vary from year to year, bothnationally and regionally, the survey resultsare deemed statistically valid based on thenumber of responses and grow more statisticallyvalid as increased numbers of producersparticipate. The National Ready MixedConcrete Association continues to stress theconfidentiality of individual data submittedby participants and encourages increasedparticipation, which is vital for the continuedsuccess of the survey as a benchmarkingtool for the industry.Summary of ResultsThere were 189 respondents to the2010 survey, a slight increase over 2009participation levels. Average sales of onlythe ready mix component of a cubic yardof concrete for the 189 respondents was$38,832,739, or 442,607 cubic yards, down30% and 25%, respectively, from 2008levels of $55,759,785 and 592,244 cubicyards. Average sales for all components ofa cubic yard of concrete were $42,512,402,which is 31% lower than the $61,859,845for 2009.The average net sales price per cubic yardof concrete for a “Typical NRMCA Member”increased just over 2% from $94.15/cyd in2008 to $96.05/cyd in 2009, a net gain of$1.90/cyd. For 2009, “Industry Leaders” orthe “Upper Quartile” that fell into the top25% of overall performance had an averagenet sales price of $99.74/cyd, consistent withthe 2008 number of $99.66.For the “Lowest Quartile”, the averagenet sales price per cubic yard of concretedecreased from $94.47 to $94.36, whiletotal costs for this group increased over 6%from $98.84 to $105.07/cyd. The increasein those costs reflects the inability to trimfi xed costs in line with the decrease incubic yards sold as fi xed costs represented30% of a cubic yard of concrete for 2009versus just 21% in 2008. That translatedinto an additional $9/cyd in fi xed costsfor the lowest quartile over the 2008 levelof $20.03/cyd or an almost 45% increasefrom 2008. In contrast, fi xed costs percyd for the highest quartile representedonly 20% of a cubic yard of concrete andan increase of only 22% from 2008 levels.For both the lowest and highest quartilesas well as the typical member, variablecosts were in line with 2008 levels with thedecrease in fuel and cement costs offsettingother increases.Pre-tax profit for the typical NRMCAmember decreased from $0.20 to $-3.07(-1,635%), while pre-tax profit for industryleaders fell 26% in 2009 to $4.26/cyd.For the “Lowest Quartile”, pre-tax lossesof $4.37 in 2008 increased further to$-10.37/cyd.The following pages show the majorchanges in costs for a typical member percubic yard of concrete from 2008 to 2009.CONCRETE in focus ı 19