Vulcan Materials Company

Good morning. Welcome everyone to the Vulcan Materials Company second quarter 2024 earnings call. My name is Todd 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. If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself by pressing star two. Now I will turn the call over to your host, Mr. 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 of 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, balkanmaterials.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 your interest in Vulcan materials. Our results demonstrate how our teams have successfully navigated a challenging first half of the year. Unfavorable weather conditions in many key markets impacted our shipments and operating efficiencies. Our second quarter performance reinforces our consistent execution, the durable characteristics of our agris-led business, and the benefits of our continued focus on both enhancing our core and expanding our reach. Even in the face of lower aggregate shipments and weather-driven inefficiencies, our teams delivered a seventh consecutive quarter of double-digit year-over-year improvement in aggregate unit profitability. In our trailing 12 months, aggregate cash gross profit per ton has reached $9.96 per ton, marking consistent progress towards our $11 to $12 targets. These achievements exhibit the benefits of our commitment to enhancing our core through our Vulcan way of selling and Vulcan way of operating disciplines. But our strategy is two-pronged, and we are also focused on expanding our reach. During the second quarter, we closed two strategic bulk loan acquisitions. These acquisitions enhance both our agri-production and distribution capabilities, and our downstream asphalt business in Alabama and Texas two of our top 10 states. In the quarter, we generated $603 million in adjusted EBITDA and expanded our adjusted EBITDA margin by 170 basis points despite 5% lower aggregate shipments. Shipments in the quarter were negatively impacted by a significant number of rain days in many markets, particularly in May across nearly 7% of our geographies and in select key markets in April and June. The pricing environment remained positive, and freight-adjusted average solid prices improved 12%, or $2.29 per ton, versus the prior year. Freight-adjusted unit cash cost of sales increased 13%, or $1.13 per ton. Most importantly, cash gross profit per ton improved over $1 per ton, or 12%. We remain consistently focused on improving unit profitability on every ton we sell to maximize earnings and cash generation in any demand environment. Let me share with you my thoughts on the current demand backdrop by discussing each end use. Single family starts began recovering in the second half of last year. and continue to point to growth in 2024, albeit at a slightly lower level than we initially anticipated. The timing of starts converting to shipments, continued affordability issues, and persistent elevated interest rates are impacting both the pace of recovery and the likelihood of single-family growth fully offsetting weaker multifamily activity. Looking ahead, the underlying fundamentals of population growth and low inventories in Vulcan markets continue to support long-term growth in residential construction. In private non-residential construction, the landscape continues to vary across categories, but is unfolding largely as we anticipated for 2024. Warehouse activity is the biggest headwind with some positive momentum in manufacturing activity and data centers. Light commercial activity is still relatively weak, but over time we expected to follow the positive trends in single-family housing and benefit from lower interest rates. On the public side, we continue to expect growth in 2024 as two consecutive years of record growth in contract awards flow into projects and aggregate shipments. The IIJ funding is benefiting both highways and other public infrastructure activities. Given the demand backdrop just discussed and the weather-impacted first-half shipments being down 6%, we now expect aggregate shipments to decline between 4% and 7% for the full year. Combined with solid pricing environment and double-digit profitability improvement, we still anticipate same-store adjusted EBITDA growth, margin expansion, and attractive free cash flow generation in 2024. Now, I'll turn the call over to Mary Andrews for some additional commentary on our results and revised outlook. Mary Andrews?