Vulcan Materials Company

Good morning and welcome everyone to the Vulcan Materials Company first quarter 2024 earnings call. My name is Jamie and I will be your conference call coordinator today. Please be reminded that today's call is being recorded and will be available for replay later today at the company's website. All lines have been placed in a listen-only mode. After the company's prepared remarks, there will be a question and answer session. Now I will turn the call over to your host, Mark Warren, Vice President of Investor Relations for Vulcan Materials. Mr. Warren, you may begin.

Thank you, Operator, and good morning, everyone. With me today are Tom Hill, Chairman and CEO, and Mary Andrews Carlyle, Senior Vice President and Chief Financial Officer. Today's call is accompanied by a press release and a supplemental presentation posted to our website, VulcanMaterials.com. Please be reminded that today's discussion 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. Reconciliations of non-GAAP financial measures are defined and reconciled in our earnings release, our supplemental presentation, and other SEC filings. During the Q&A, we ask that you limit your participation to one question. This will allow us to accommodate as many as possible during our time we have available. And with that, I'll turn the call over to Tom.

Thank you, Mark, and thank all of you for joining our Vulcan Materials earnings call this morning. Our first quarter results moved us towards delivering on a fourth consecutive year of double-digit adjusted EBITDA growths. Although the weather was unusually cold and wet across many geographies for much of the quarter, our teams executed well and improved our aggregate cash gross profit per ton by 10%. Their commitment to our Vulcan way of selling and Vulcan way of operating disciplines is driving solid results. In the quarter, we generated $323 million of adjusted EBITDA and expanded our adjusted EBITDA margins. Importantly, several key trends continue. Pricing momentum, cost deceleration, unit profitability expansion, robust cash generation, disciplined capital allocation, and return on invested capital improvement. In the aggregate segment, year-over-year shipments declined by 7%, but the durability of our aggregate business and the consistency of our execution stood out in a weather-impacted quarter. We again improved our trailing 12 months aggregate cash gross profit per ton, pushing it to $9.66 per ton and making further progress toward our current $11 to $12 target. The pricing environment remains positive, and year-over-year aggregate cash cost of sales continues to moderate. Aggregate's freight and adjusted price improved 10% in the quarter and increased $1.25 per ton sequentially from the fourth quarter, a clear illustration of the success of January increases and the continuous execution of our vocal way of selling disciplines. Our first quarter cash cost of sales performance resulted in a fourth consecutive quarter of trading 12 months cost deceleration, and improving sequentially by another 230 basis points. Our relentless focus on improving efficiencies in our plants through our Vulcan Way of Operating disciplines remains a key driver of managing costs, expanding unit profitability, and ultimately generating attractive free cash flow. There is a healthy pipeline of opportunities to deploy this free cash flow for both attractive acquisitions and complementary strategic greenfield development. These targeted opportunities are at varying stages, but as an example, earlier this week we closed on a bolt-on agris and asphalt acquisition in Alabama, a top 10 state. I'm proud of how our teams continue to execute our two-pronged growth strategy. They are focused on expanding our reach in addition to enhancing our core with consistent expansion of unit profitability by controlling what we can control, even in a dynamic macro environment and demand environment. On the demand side, I want to provide a few comments about each end use, starting with private demand and then moving to public. Momentum and single family continues to accelerate across our footprint and points to growth in 2024. we continue to expect weaker multifamily residential construction to largely offset the single-family improvement this year. Overall affordability and elevated interest rates remains a challenge, but the underlying fundamentals of population growth and low inventories in Vulcan markets support the recovery in residential construction. An improving residential backdrop is also a positive sign for future activity in certain categories of non-residential construction. And recent data has shown some signs of stabilization in overall STARS. However, the landscape continues to vary across categories. As expected, continued moderation in warehouse STARS will be the biggest headwind to private non-residential demand this year. Currently, light commercial activity remains weak, But over time, we expected to follow the positive trends in single-family housing. We continue to see and capitalize on opportunities in the manufacturing category. Our unmatched southeastern footprint and unique logistics capabilities positions us well to service these large, aggregate-intensive projects. Our footprint is also an advantage on the public side, with over two-thirds of federal highway spending allocated to Vulcan states. Additionally, other public infrastructure activity which benefits from IIJ funding is growing faster in Vulcan states than the country as a whole. A sustained elevated level of highway starts of over $100 billion, coupled with record 2024 state budgets, supports healthy growth in highway and infrastructure demand both in 2024 and for the next several years. Now, I'll turn the call over to Mary Andrews for some additional commentary on our first quarter. Mary Andrews?