Martin Marietta Materials, Inc.

Ladies and gentlemen, welcome to Martin Marietta's first quarter 2025 earnings conference call. All participants are now in a listen-only mode, and 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.

Good morning, and welcome to Martin Marietta's first quarter 2025 earnings call. Joining me today are Ward Nye, Chair and Chief Executive Officer, and Bob Carden, Senior Vice President, Interim Chief Financial Officer, and Chief Accounting 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. Non-GAAP measures are defined and reconciled to the most directly comparable GAAP measure in the appendix of 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, 2025 outlook, and related market trends. Bob Cardin will then review our financial results and capital allocation, after which Ward will provide closing comments. 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. Good morning, and thank you all for joining today's teleconference. Before discussing our Q1 results, I'll take a moment to discuss our previously announced Chief Financial Officer transition. On April 10th, we announced Jim Nicholas's departure as CFO to move his family back to their beloved hometown of Chicago. We're grateful to Jim for his nearly eight years of service to Martin Marietta, over which time he made meaningful contributions to our success. We wish him and his family the best in their next chapter. In partnership with the leading executive search firm, we've initiated a process to identify our company's next CFO and are considering both internal and external candidates. While the search is underway, we're pleased Bob Carden will serve as our interim CFO. Since joining Martin Marietta in 2019, Bob has been an integral member of our executive and finance teams. We're grateful he's willing to assume this role in addition to his responsibilities as Senior Vice President, Controller, and Chief Accounting Officer, and are confident that under Bob's leadership, we'll not miss a beat during this transition period. Now, turning to our financial results. I'm pleased to report this year is off to a strong start, highlighted by record first quarter aggregate revenues, gross profit, gross margin, and gross profit per ton despite some challenging winter weather in January and February across key southeast, southwest, and midwest markets. This record-setting performance was driven by 7% price and growth, disciplined cost control, and margin accretive acquisitions. Additionally, building upon its full year 2024 performance, Magnesia Specialties established new quarterly record revenues gross profit and gross margin, with gross margin increasing 806 basis points compared with the prior year quarter. These results demonstrate why we have consistently said this business has earned the right to grow and will continue to evaluate both organic and inorganic opportunities to do so. We also established several consolidated first quarter records, including consolidated gross profit of $335 million, a 23% increase. Consolidated gross margin of 25%, an increase of 300 basis points. Consolidated adjusted EBITDA of $351 million, a 21% increase. And consolidated adjusted EBITDA margin of 26%, an increase of 274 basis points. These results underscore the resiliency of our differentiated business model and benefits of our 2024 portfolio optimization actions. given current macro uncertainty, we continue to focus on matters within our control, most notably realizing fair value for our vital materials while appropriately managing our costs with product demand. Looking ahead, we're encouraged by the double-digit growth in organic March aggregate shipments, April daily shipment trends, and realization of April 1st aggregate price increases in select markets. all of which provide us confidence in reaffirming our full-year 2025 adjusted EBITDA guidance of $2.25 billion at the midpoint. Consistent with our past practice, the company will revisit its guidance at midyear. Moving to end market trends, we'll start with observations regarding infrastructure, which continues to benefit from robust federal and state investments, including the Five-Year Infrastructure and Investments in Jobs Act, or IIJA. As a result, the American Road and Transportation Builders Association, or ARPA, expects construction activity to grow in 2025 as work advances on projects supported by federal and state funding sources. Importantly, with only about one-third of the IIJA funds reimbursed to states through the end of February 2025, we expect IIJA spending will peak next year in 2026, followed by an extended tail thereafter. as further described on page 8 in today's supplemental information. While contract award growth rates have moderated as reflected in the value of contract awards for the 12-month period ended February 28, 2025, the underlying baseline remains elevated. Funding certainty, reinforced at both federal and state levels, provides the impetus for steady product volume levels and underpins a strong pricing environment for years ahead, in this counter-cyclical public and market. Importantly too, congressional priorities now appear to be increasingly shifting toward the reauthorization of federal surface transportation programs with key legislative discussions already underway. Early indications suggest the successor bill may emphasize projects with national or regional significance favoring roads, bridges, and ports. Shifting to non-residential construction, Artificial intelligence, or AI, continues to drive strong demand for data centers across the United States as hyperscalers invest significant capital in new sites. Projects underway in our geographic footprint, including Stargate in Texas, Google in South Carolina, and Meta's 4 million square foot facility in Louisiana, underscore this momentum. While not yet a meaningful contributor to product shipments, we expect data center energy consumption requirements will drive ancillary demand for new aggregates-intensive power generation facilities across many of our key markets. Warehouse construction appears to have reached a cyclical bottom, with more green shoots emerging including large Amazon warehouse projects in Claiborne, Texas, Fort Myers, Florida, and Wilmington, North Carolina, to name a few. With respect to residential activity, affordability challenges continue to act as a natural governor on single-family housing starts. We don't expect this dynamic to resolve in the near term, absent either a modest home price contraction, lower mortgage rates, or both. That said, long-term housing market fundamentals remain resilient, underpinned by demographic shifts and structurally underbuilt conditions in many of Martin Marietta's key Sunbelt markets. In summary, we anticipate demand for infrastructure in our public and markets and data centers in the non-residential sector will remain robust, while portions of interest rate-sensitive private construction demand is expected to remain subdued in the near term. I'll now turn the call over to Bob to discuss our first quarter financial results.