Martin Marietta Materials, Inc.

Good morning, ladies and gentlemen, and welcome to Martin Marietta's first quarter 2021 earnings conference call. All participants are now in a listen-only mode. A question and answer session will follow the company's prepared remarks. As a reminder, today's call is being recorded and will be available for replay on the company's website. I will now turn the call over to your host, Ms. Suzanne Osborne, Martin Marietta's Vice President of Investor Relations. Suzanne, you may begin.

Good morning, and thank you for joining Martin Marietta's first quarter 2021 earnings call. With me today are Ward Nye, Chairman and Chief Executive Officer, and Jim Nicholas, Senior Vice President and Chief Financial Officer. As a reminder, today's discussion may include forward-looking statements, as defined by United States securities laws in connection with future events, future operating results, or financial performance. Like other businesses, Martin Marietta is subject to risks and uncertainties that could cause actual results to differ materially. Except as legally required, we undertake no obligation to publicly update or revise any forward-looking statements, whether resulting from new information, future developments, or otherwise. Please refer to the legal disclaimers contained in today's earnings release and other filings with the Securities and Exchange Commission which are available on both our own and the SEC websites. We've made available during this webcast and on the investor relations section of our website, Q1 2021 supplemental information that summarizes our financial results and trends. In addition, any non-GAAP measures disclosed today are defined and reconciled to the most directly comparable GAAP measure in our earnings release and SEC filings. Ward and I will begin today's earnings call with a discussion of our first quarter operating performance and market trends, as well as our recently completed acquisition of Tiller Corporation. Jim Nicholas will then review our financial results, after which Ward will provide some brief concluding remarks. A question and answer session will follow. I'll now turn the call over to Ward.

Thank you, Suzanne, and thank you all for joining today's teleconference. As evidenced by our first quarter results and successful targeted growth initiatives, it's clear that Mark Marietta has off to an impressive start in 2021. Thanks to the company's differentiated business model and proven strategic operating analysis and review plan, what we refer to as SOAR, we remain well positioned for continued success. As we look to the remainder of 2021 and beyond, we expect to build on a track record of strong financial, operational, integrative, and safety performance. Supported by our team's steadfast commitment to safe and efficient operations, price discipline, and operational excellence, we established first-quarter records for revenues, profits, and safety. Both building materials and magnesia specialties benefited from strengthening product demand. Specifically, consolidated products and services revenues increased 3 percent to $922 million, Consolidated gross profit increased 23% to $175 million. Adjusted EBITDA increased 37% to $204 million, and diluted earnings per share grew over two and a half times to $1.04. We also achieved the best first quarter safety performance in Mark Marietta's history, with company-wide lost time and total injury incident rates exceeding or trending at world-class levels. At the same time, we're thoughtfully executing on our SOAR growth priorities to enhance our geographic footprint and grow our business. As announced in this morning's release, we successfully completed the acquisition of Tiller Corporation, the leading aggregates and hot mix asphalt supplier in the Minneapolis-St. Paul region, and welcomed more than 200 talented employees to the Martin Marietta team. Tiller provides an upstream materials platform in one of the largest and fastest-growing metropolitan areas in the Midwest and expands and complements the product offerings of our existing operations in surrounding markets. Tiller's cultural fit, attractive margins, and value-over-volume operating philosophy directly align with our central division operations. We expect a seamless and successful integration. Now let's turn to the company's first quarter operating performance. The building materials business saw strengthening product demand from single-family housing growth, infrastructure investment, and notable heavy industrial projects of scale in our key geographies. Our aggregates, cement, and ready-mix concrete business in Texas, our largest revenue-generating state, experienced temporary disruptions from February's historic winterized storm and sub-freezing temperatures. Additionally, Our aggregates and downstream operations in Colorado, our second largest state by revenues, faced a challenging comparison as our results in the same period last year benefited from unseasonably favorable weather conditions in the Rocky Mountains. Overall, aggregate shipments declined 3% in line with our expectations, given a return to typical first quarter seasonality factors and the largely non-COVID-19 impacted prior year quarter. Notably, East Group aggregate shipments increased as the Carolinas, Georgia, Florida, and Maryland benefited from strong residential and heavy industrial non-residential activity. This growth offset lower shipments in the Midwest from more seasonal construction activity and reduced wind energy projects. While underlying product demand remains robust, unfavorable winter weather conditions in both Texas and Colorado and a softer energy sector market resulted in an 8% decline in West Group shipments. Aggregate's average selling price increased 3.4% or 2.5% on a mix-adjusted basis. These pricing gains, supported by our locally-driven pricing strategy, highlight contractor confidence and underlying construction activity in the attractive markets that we serve. East Group pricing increased 4%, with both East and Central Divisions contributing solid growth, Geographic mix from a lower percentage of higher-priced long-haul shipments limited the West Group's pricing gain to 2%. Our cement business delivered strong first-quarter operating performance and shipment growth despite the disruptions from February's historic ice storm. I'm extremely grateful to our teams. Their actions to proactively winterize and take our plants offline allowed us to quickly return to normal production capacity post-storm. To that effect, our cement operations established an all-time record for monthly shipments in March, demonstrating the robust demand and construction activity throughout the Texas Triangle. Mix-adjusted pricing grew 2% during the quarter. Annual cement prices went into effect April 1st and have garnered widespread support in both North and South Texas. We expect our cement business will continue to benefit from favorable market trends and supported by continued market tightness in Texas and diversified customer backlogs. Turning to our targeted downstream businesses, our ready-mix concrete operations established a first-quarter record for shipments, which increased nearly 27 percent to 2 million cubic yards. Large non-residential projects and incremental volume from operations acquired late last year contributed to double-digit shipment growth in Texas which more than offset weather-related shipment declines in Colorado. Concrete pricing declined 2%, reflecting geographic mix from a higher percentage of lower-priced Texas shipments. Our Colorado asphalt and paving business lost production days from a return to more typical winter weather conditions versus the prior year period, resulting in reduced asphalt shipments. Asphalt pricing, however, improved 8%. Colorado market fundamentals remain strong, supported by healthy bidding activity and overall customer optimism. Looking ahead, we remain confident that Martin Marietta's attractive market fundamentals and accelerating long-term secular trends across our three primary end-use markets will drive sustainable, construction-led, aggregates-intensive growth for the foreseeable future. We're encouraged by the recent initial bold steps to advance much needed infrastructure investment and a general consensus for successor legislation to the Fixing America's Surface Transportation, or FAST Act, in the coming months. With both congressional chambers working on their own reauthorization proposals, we're optimistic that a FAST Act replacement and increased funding levels will be passed before its expiration in September, generating meaningful shipment benefits in 2022 and beyond. In the meantime, state and local infrastructure funding remains resilient. Estimated fiscal 2021 lettings for our top five state departments of transportation, or DOTs, are currently above or near prior year levels. Keep in mind, our top five states, Texas, Colorado, North Carolina, Georgia, and Florida, are disproportionately important to our business. representing 71% of total revenues for our 2020 building materials business. For reference, aggregate shipments to the infrastructure market accounted for 30% of first quarter shipments, well below our 10-year historical average of 43%. Non-residential construction continues to benefit from increased investment in aggregates-intensive heavy industrial warehouses and data centers. broadly offsetting weakness in the more COVID-19-impacted light commercial and retail sectors. Light nonresidential activity should benefit from the attractive drag-along effects of strong single-family residential growth in the longer term. In some regions, we're now seeing early signs of that recovery. Aggregate shipments to the nonresidential market accounted for 37% of first-quarter shipments. Martin Marietta's leading southeastern and southwestern footprint positions our company to benefit from single-family housing growth given underbuilt conditions, favorable population and employment dynamics, land availability, mild climates, and lower costs of living in these regions. Importantly, single-family housing is two to three times more aggregates intensive than multifamily construction given the ancillary non-residential and infrastructure needs to build out new suburban communities. Aggregates to the residential market accounted for 27% of first quarter shipments. I'll now turn the call over to Jim to discuss more specifically our first quarter financial results. Jim?