Vulcan Materials Company

Good morning, ladies and gentlemen, and welcome to the Vulcan Material Company's first quarter earnings conference call. My name is Nicole, and I will be your conference call coordinator today. All participants are currently in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. If you wish to ask a question at that time, you may do so by pressing star and the number 1 on your telephone keypad. To remove yourself from the queue at any time, press the pound key. 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 would 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, everyone. With me today are Tom Hill, Chairman and CEO, and Suzanne Wood, Senior Vice President and Chief Financial Officer. Today's call is accompanied by a press release issued this morning and a supplemental presentation posted to our website, VulcanMaterials.com. Additionally, a recording of this call will be available for replay at our website later today. 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. You can find a reconciliation of non-GAAP financial measures and other information in both our earnings release and at the end of our supplemental presentation. I will now turn the call over to Tom to begin our prepared remarks. Tom?

Thank you, Mark, and thanks to everyone for joining the call today. We appreciate your interest in Volcker Materials Company. As you all know, we're living and operating in times that challenge us all both at work and at home. We hope you and your families are healthy and safe. It's been over two months since our company proactively began taking protective measures to keep our people healthy while continuing to crush rocks, service our customers, and run our business. I'd like to begin the call by saying thank you to all of our employees for their patience, their flexibility, and commitment to Vulcan, each other, and to our customers, as well as to our communities. You are doing a great job under difficult circumstances. I am very proud to be part of your team. We had a good first quarter. It was in line with our expectations, and we didn't experience much disruption other than some wet weather. Before Suzanne goes over the quarterly results, I'd like to talk about the underlying strength of Vulcan's business model, and then I'll speak to how we're proactively responding to the COVID-19 pandemic and to the economic uncertainties that this crisis has created across our economy. First, I want to emphasize that the underlying fundamentals driving our business remain unchanged. Our Agris-focused business is sound, is resilient, and more adaptable to demand shifts than any other products in our space. We have a strong and stable Agris franchise that was built over 60 years. As a result, we remain confident about our company with its inherent strengths that will provide long-term stability and growth. In the near term, however, these are extraordinarily complex and uncertain times that are and will continue to test our resolve and our resilience. Our approach is to identify, prioritize, and to focus on what we can control and to take appropriate, thoughtful, and decisive actions At times like these, the ability to make decisions quickly and accurately and to execute effectively is critical. I'd like to highlight a few of the priorities that are top of mind for our management team today. First and foremost, the health and safety of our people are of paramount importance to us. Early on, Vulcan implemented a robust set of COVID-19 protections, precautions, and procedures. We are following the guidance of the CDC and other health organizations to keep us working in the safest environment possible. I'm pleased to tell you it's working. Second, we are focused on our financial position. We entered this crisis with a strong balance sheet and liquidity. In addition, we have taken prudent steps to further enhance our financial position, including supplementing our existing revolving credit facility with a term loan and reducing our planned capital expenditures for the remainder of 2020. Next, continuous improvement remains vitally important to us. We are utilizing our four strategic initiatives, particularly commercial and operational excellence. to improve our execution capabilities and manage our business more efficiently. Fourth, we are concentrating on real-time communication. This ensures that the management team has immediate insight into what's happening on the ground, at our quarries, in our markets, and with our customers. Our top operating and functional team leaders are constantly participating in calls where we are discussing and monitoring the health of our employees, the business, and the impacts from the pandemic. This allows us to look around corners and quickly adjust our plans, particularly with respect to possible changes in demand or the timing of construction activity. It also helps us to cascade communication to line employees to accelerate the decision-making process and to promote the sharing of best practices, particularly around health and safety. And finally, we're looking ahead and focusing on contingency planning from both the financial and the operational perspective. Now, I already mentioned a couple of proactive steps we took to enhance our already strong financial position. Operationally, each division has developed detailed contingency plans and trigger points to allow us to execute well ahead of the curve depending on the pandemic's effect on construction activities. These plans include, among many other items, changing our production schedules, project timing, and reducing costs. Certain elements of these plans are already underway, particularly around cost reduction and project timing. As you can see, we are taking many steps to adapt to the changing environment We are vigilantly monitoring this evolving situation. Now, I'll describe what we're seeing from a demand and shipment perspective and how that translates to an outlook for the remainder of 2020. During the first quarter, we were designated an essential business. As a result, the shipment activity was good across our markets as customers executed on their backlogs. and we continue to book both private and public projects. These conditions generally continued in April. However, on the private side, we have begun to see some project schedules shift, including some postponements and cancellations. This adds to our uncertainty about near-term demand. We have sufficient backlogs to stay busy, but we cannot control future demand. So, given the lack of visibility as to the duration and impact of the pandemic and to the quickly evolving economic situation, there is just a level of unpredictability with respect to project timing and new construction starts. When we provided our previous guides, we tried to strike a reasonable and a thoughtful balance between being realistic and being cautious. We now find ourselves in a more dynamic world in which we believe the balance should shift toward a more cautious approach. Therefore, we decided to withdraw our previous earnings guidance for 2020. We will continue to monitor all aspects of our markets. As more data becomes available and our visibility improves, we'll resume our usual practice of providing guidance. Now, I'll hand the call over to Suzanne for additional comments. Suzanne?