Vulcan Materials Company

Good morning, ladies and gentlemen, and welcome to the Vulcan Materials Company's first quarter earnings conference call. My name is Justin, and I will be your conference call coordinator today. As a reminder, today's call is being recorded. During the Q&A portion of this call, we ask that you limit your participation to one question plus a follow-up. This will allow everyone who wishes the opportunity to participate. Now, I'd like to turn the call over to your host, Mr. Mark Warren. Vice President of Investor Relations for Vulcan Materials. Mr. Warren, you may begin.

Good morning, and thank you for joining our first quarter earnings call. With me today are Tom Hill, Chairman and CEO, and Suzanne Wood, Senior Vice President and Chief Financial Officer. A question and answer session will follow their prepared remarks. Before we begin, I would like to call your attention to our quarterly supplemental materials posted at our website, vulcanmaterials.com. You can access this presentation from the Investor Relations homepage of the website. A recording of this call will be available for replay at our website later today. Additionally, you can sign up to receive future news releases under email alerts found in the quick links on the Investor Relations homepage. Please be reminded that comments regarding the company's results and projections may include forward-looking statements which are subject to risks and uncertainties. These risks, along with other legal disclaimers, are described in detail in the company's earnings release and in other filings with the Securities and Exchange Commission. Additionally, management will refer to certain non-GAAP financial measures. You can find a reconciliation of these measures and other related information in both our earnings release and at the end of the supplemental presentation. Now I will turn the call over to Tom.

Thank you, Mark, and thanks to everyone for joining the call today. We appreciate your interest in Vulcan. We had a solid start to the year, a 15% improvement in adjusted EBITDA, and 11% improvement in aggregate gross profit per ton. These results highlight the combined strength of our aggregate-focused business, our geographic footprint, and our sharp focus on improving unit margins. As you know, the principal drivers of our aggregate profitability are volume, price, and operational efficiencies. So I'll address each one of these in turn. First, aggregate shipments in the quarter increased by 13% or 11% on the same store basis. Importantly, the improvement was broad-based across our footprint. Of course, with record rainfall, California was the obvious exception. But with that said, reduced shipments in the West were more than offset by double-digit volume growth and our core markets in the east and southeast and in Texas. As we expected, some of the year-over-year improvement in these markets was due to pent-up demand from last year. This was evidenced by significantly higher shipments in January. Shipments in February and March were more in line with our full-year guidance. Overall, the pace of shipments in the first quarter clearly shows that demand is healthy. The second profitability driver is price. And as predicted, our pricing continued to compound from the fourth quarter. On a freight-adjusted basis, pricing improved by 5.4% from last year. On a mix-adjusted basis, pricing increased by 5.8%. As with volume improvements, our pricing gains were widespread. The third driver, and one that is sometimes overlooked, relates to operational efficiencies and cost control. Much of our time and attention is focused here because it represents an area where we can strongly influence the outcome. One of our key financial metrics is same-store flow-through. On a trailing 12-month basis, it was 57% at the end of March in line with our 60% long-term guidance. As we look forward to the rest of this year, our view of our markets remains on track with earlier expectations. We're still seeing growth in private demand in vol conserved markets. In the public sector, demand continues to grow, and the increases in state and local highway funding, which we've seen across our footprint, are turning into shipments. As we pointed out previously, we're in the very early stages of big growth in highway demand. Ten Vulcan states that generate approximately 80% of our revenue have passed infrastructure legislation over the last four years. These laws have raised funding by almost 60% over 2015 levels. The most recent state to join this trend was Alabama, which passed a gas tax in March. The pace of conversion of public funding and lettings into shipments continues to accelerate. We see this strengthen our backlog and booking pace. And this also supports a healthy pricing environment, which we experienced in the quarter and can also see going forward. Now I'll turn the call over to Suzanne for some additional color on the results. Suzanne?