Martin Marietta Materials, Inc.

Ladies and gentlemen, please stand by. The conference call will begin momentarily. Please do not disconnect your lines. Your patience is appreciated. Once again, the conference call will begin momentarily. Please do not disconnect your lines. Your patience is appreciated. Thank you. Good day and welcome to Martin Marietta's second quarter 2023 earnings conference call. All participants are now in the 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. Jennifer Park, Martin Marietta's Vice President of Investor Relations. Jennifer, you may begin.

Thank you. It's my pleasure to welcome you to our second quarter 2023 earnings call. Joining me today are Ward Nye, Chairman and Chief Executive Officer, and Jim Nicholas, Senior Vice President and Chief Financial Officer. 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. We undertake no obligation except as legally required 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 public filings which are available on both our own and the Securities and Exchange Commission's websites. We have made available during this webcast and on the Investors section of our website supplemental information that summarizes our financial results and trends. As a reminder, all financial and operating results discussed today are for continuing operations. In addition, non-GAAP measures are defined and reconciled to the most directly comparable GAAP measure in the appendix to the supplemental information as well as our filings with the SEC and are also available on our website. Ward and I will begin today's earnings call with a discussion of our operating performance. Jim Nicholas will then review our financial results and capital allocation, after which Ward will conclude with market trends and our outlook for the remainder of 2023. A question and answer session will follow. Please limit your Q&A participation to one question. I will now turn the call over to Ward.

Thank you, Jenny. Welcome, everyone, and thanks for joining this quarterly teleconference. I'm pleased to report Martin Marietta's exceptional performance across nearly every safety, financial, and operational measure in the second quarter, which built upon our record first quarter performance. Given the overall challenging macroeconomic environment, including continued monetary policy tightening and the related residential housing slowdown, our strong quarterly performance is a testament to our team's focus and resiliency of our differentiated business model. In addition to our results and consistent with our aggregates-led product strategy, we also finalized the divestiture of our Stockton, California cement import terminal in the second quarter, further enhancing our company's margin profile and improving the durability of our business through cycles. As indicated in today's earnings release, we revised our 2023 guidance to reflect the company's results from the first half of the year and our current expectations for the second half. Notably, we raised our 2023 adjusted EBITDA guidance to range from $2 to $2.1 billion, or a 28% increase in the midpoint, as compared with the prior year. The core assumption underpinning the adjusted EBITDA guidance is that accelerated commercial momentum will more than offset lower shipments and higher costs as we endeavor to continue managing the last two years of historic inflation. Given the typical lag effect between single-family housing starts and aggregates demand, we expect recent aggregate shipments declines will find a bottom in the third quarter of 2023. Against that backdrop, Martin Marietta achieved strong second quarter results across a number of areas, including consolidated total revenues of $1.82 billion, an 11% increase. Consolidated gross profit of $560 million, a 32% increase. Adjusted EBITDA of $596 million, a 25% increase. And aggregates gross profit per ton of $6.80, a 28% increase. These stellar results reflect the continued disciplined execution of our strategic plan through economic cycles. Shifting now to our second quarter shipment and pricing results, starting with aggregates. Aggregate shipments declined 5.7% as we experienced the expected lag between last year's decline in single-family housing starts in our shipments to the residential market. Predictably, though, aggregates pricing fundamentals remain attractive, with pricing increasing 18.6% or 17% on a mix-adjusted basis. The Texas cement market continues to experience robust demand and tight supply amid near sold-out conditions, particularly in the Dallas-Fort Worth Metroplex. Second quarter shipments were a record, 1.1 million tons, and pricing grew 21.8%. We fully expect that favorable Texas cement commercial dynamics will continue for the foreseeable future and expect solid realization of the $10 per ton price increase effective July 1. Shifting to our targeted downstream businesses, ready-mix concrete shipments decreased 1.7%, while pricing increased a robust 21.9%. Asphalt shipments increased 1.7%, and pricing improved 7.9%. Before discussing our outlook for the remainder of 2023, I'll turn the call over to Jim to conclude our second quarter discussion with a review of the company's financial results. Jim?