Martin Marietta Materials, Inc.

Good day, and welcome to Martin Marietta's third quarter 2023 earnings conference call. All participants are now in 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. Jacqueline Rooker, Martin Marietta's Director of Investor Relations. Jacqueline, you may begin.

Thank you. It's my pleasure to welcome you to our third quarter 2023 earnings call. Joining me today are Ward Nye, Chairman and Chief Executive Officer, and Jim Nicholas, Executive 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 investor 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 the discussion of our operating performance and the outlook for the remainder of 2023. Jim Nicholas will then review our financial results and capital allocation, after which Ward will conclude with end market trends and our preliminary view for 2024. 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, Jacqueline. Welcome, everyone, and thank you for joining today's teleconference. Martin Marietta once again delivered record results across nearly every financial and operational measure, extending our long track record of industry-leading performance and responsible, profitable growth. Thanks to the dedication of our colleagues across the enterprise, we achieved accompanying milestones, by exceeding $2 billion in trailing 12 months adjusted EBITDA for the first time. Our exceptional third quarter is highlighted by a 42% improvement in aggregate gross profit per ton despite lower shipments, further validating the benefits of our value over volume commercial strategy and our commitment to operating with excellence while meeting and exceeding our customers' needs. Importantly, While our work in continuous safety improvement is never done, I'm proud to report the company concluded our safest third quarter on record, with total and lost time incident rates surpassing world-class levels. While not a third quarter event, it's notable that just yesterday, on October 31st, we finalized the sale of our Tehachapi California cement plant, substantially completing the planned asset sales from the 2021 Lehigh Hanson West acquisition. Consistent with our SOAR 2025 initiatives, this divestiture of a non-strategic asset provides us with additional balance sheet flexibility to advance our well-articulated path of quality aggregates-led growth. As detailed in today's earnings release, we raised our full year 2023 adjusted EBITDA guidance to a range of $2.05 to $2.15 billion as pricing momentum will more than offset lower shipments and recently increased energy and related costs. Turning now to Martin Marietta's third quarter financial performance, we established all-time quarterly records across a number of areas, including consolidated total revenues of $2 billion, a 10.1% increase, consolidated gross profit of $676 million, a 38.6% increase, Earnings per diluted share from continuing operations of $6.94, a 48.6% increase. Adjusted EBITDA of $705.2 million, a 32.3% increase. And aggregates gross profit per ton of $7.89, a 42.4% increase. These results reinforce the durability of our aggregates-led business which is strategically situated in well-curated geographies. These record results also reflect our team's focus on what we can control despite heightened geopolitical tensions and persistent macroeconomic headwinds, including growth-restrictive monetary policy and continued inflation. Shifting now to our third quarter shipment and pricing results, aggregate shipments declined 7.3%, Our value over volume strategy is clearly an unapologetic component of that result, as is softening demand in certain Midwest and Southwest markets, which was partially offset by continued strength in key Southeast markets. Aggregate's pricing fundamentals remain very attractive, with pricing increasing 20% or 17.2% on a mix-adjusted basis, as we continue to expect fair value for our depleting resources. Near sold-out Texas cement conditions, particularly in the Dallas-Fort Worth Metroplex, continue to drive strong product demand in a favorable commercial environment. Third-quarter cement shipments of 1.1 million tons were flat to last year's comparable period, and pricing grew 18.9% as we continue to largely sell as much as we can produce. We expect favorable Texas cement pricing dynamics will continue and, accordingly, announced a $15 per ton price increase effective January 1st. Turning to our targeted downstream businesses, ready-mix concrete shipments increased 3.6%, while pricing improved a solid 20.9%. Asphalt shipments increased 5.7%, and pricing increased 6.7%. Before providing our outlook for the remainder of 2023 and a preliminary view of 2024, I'll turn the call over to Jim to conclude our third quarter discussion with a review of the company's financial results. Jim?