VMC - Earnings call transcript Q4 2020 | Vulcan Materials Company

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Operator

Good morning, ladies and gentlemen, and welcome to Vulcan Materials Company's Fourth Quarter Earnings Conference Call. My name is Laurie, and I will be your conference call coordinator today. [Operator Instructions].

Now I will turn the call over to your host, Mr. Mark Warren, Vice President of Investor Relations for Vulcan Materials. Mr. begin. may you Warren,

Mark Warren

and you supplemental call. our Tom With and vulcanmaterials.com. press Vice and Thank is Today's full by posted accompanied Hill, quarter to year CEO; a President Senior Wood, earnings me and Suzanne Financial for morning. Officer. fourth call a joining release and Chairman Chief presentation Good today website, are our

described today's later discussion call are defined in other our risks, today of and disclaimers, include in Securities and Exchange release earnings a Commission. this will be be supplemental reminded SEC earnings for risks please recording Reconciliations filings. which release, that our and at along and reconciled statements, our replay non-GAAP company's may presentation are in website in of and filings forward-looking legal to measures the detail are other financial Additionally, available with with subject other These any the financial uncertainties.

please participation the call time Tom. limit I turn together. now As our the will your With during question. operator to This over help participation Q&A indicated, that, maximize will one to

Tom Hill

pandemic. Vulcan, Vulcan you, the and Company. and Thank thanks for in everyone the We despite associated today. represented another to XXXX the and healthy. earnings We and interest for your many hope strong to call you will are growth your appreciate safe families joining continue Mark, Materials be with of year challenges

make flexibility in and face Vulcan all, professional they the adjustments nature employees strength, of of to XXXX lives. their business. personal their and results Our commitment most had both uncertainty and our the demonstrated resilient of aggregates demonstrated But as

share we on broad our disciplines. XXXX operating and some accomplishments our are discuss I'd on fourth customers with done. and but will summarize highlights few making first, servicing and full like Congratulations progress well themes X on you, our Our job a where Suzanne to year In team quarter minutes, stayed focused strategic headed. a safely,

mixed EBITDA by Our X% results basis operating on capital, expanded $X.X be by to measures, considering annual Cash of X% both margin just increasing performance. to principal These improved Aggregates points. were company by on control particularly strong. EBITDA by results Higher X% XX compared over basis and with X% average billion, aggregates were financial of to drivers our selling were effective basis. points and to year return Total And adjusted declined improved XX.X%. noteworthy one prices XXX adjusted as our invested finally, XXXX. by strong key increased volume cost flows cash reported continued pricing full and to $X.XXX billion. a generation this

were gains across our pricing widespread these footprint. Importantly,

X%. $X.XX, ton. excellence; good strategic Commercial making supported At $X progress longer-term in unit Our our in disciplines: our toward more are our sales gain logistics of we excellence; was led by increased profitability sourcing. This ton. improvement by per which strategic operations aggregates ton our total cost This cash only by of X.X% grew while cost of is controllable, gross a to and cash sales, X%, unit innovation; X goal per profit per

each increased profitability of segments. in concrete. improved experienced both X and our also in business XX% segments. across We gross improvements these Europe Collectively, asphalt profit non-aggregates

or prices XX% prior in profitability and from cost. increased asphalt lower though This declined profit gross volumes sales improvement even X%. million Asphalt $XX over resulted the liquid year, stable

margin in increased for set well unit higher the in California. by prices cement up profitability Average overall increased declined shortages business profitability a as us concrete and X%. by ready-mix result selling each improving The volume XXXX. of primarily our our segments Our X%, of and X% EBITDA

and to market improving, construction particularly highway demand The footprint. is environment in positioned well opportunities in advantage of geographic residential are We also take construction. our

quarter. to continues growth show a Let's market lettings growth take turn awards Residential our budgets continue. most supply in loan DOT budgets XXXX. awards from opportunity to will to the of in each that of midyear Vulcan-served shipments in clear State reduced interest will returned This strength, in the single to have with into faster given require growing it in starts The us is and due suggests Highway pandemic. family. and XXXX fundamentals fourth markets. for the rates segment The especially flat showing time stabilized, caution both market this and market permits are represents low segment turn. the up states to that as awards

in see throughout is shipments improvement While a we of XXXX. variable, shipments timing highway will

construction in year-over-year, signaling said the around in growth that space the corner. starts lingers centers. office down but like perhaps the sectors, outlook nonresidential potential quarter, Weakness near-term heavier but improvement forward certainly, improve, in just related least data hospitality distribution facilities the and and there is is the to we sector the visibility. As beginning are are indicators still nonresidential third provides construction for the Dodge categories

In aggregates. nonresidential X/X will fact, now are indicated will package. as projects that aggregate in X% profitability will a decline improve approximately Congress of XX% between year aggregates will nonresidential infrastructure-related committed broad our spending. XXXX be typically said, in highway focus continue we and the as our after expect Vulcan to XXXX. market occur an we the construction Clearly, $X.XX $X.XX aggregate projects We compared We through to in shipments next will construction These feet we projects economic prospects and relief to our infrastructure a COVID-XX more in and states positions administration thought in represent and intensive, leading the square a as participation EBITDA sector fall increase and this warehouses believe Regardless said, remains volume anticipate to according a swings, XXXX The mean full they an these adjusted being are to improve billion billion. of We and serviced about demand range largest measured of XXXX. to growth built X% factors progress recovery That shipments infrastructure-led as are our consider category we timing variable. on for Dodge. guidance. unit have by That awards. the and of near-term could of to

aggregates prices selling single adjusted our gross profit X% of segments solid forecast To average sum X% And to up, digits. mid-single growth. expect will XXXX. in a by to increase non-aggregate freight earnings mid-high be was to in XXXX to We by to year it turn out improve

Suzanne to Now further I'll comments. over turn it Suzanne? for

Suzanne Wood

Thanks, morning Tom, everyone. and to good

discuss significant selling, in our reductions XXXX Before in We some quarter made XXXX I'll general fill guidance. I details in administrative expenses fourth XXXX. our highlights, on additional and

to overhead in million. XXXX changes our anticipate be XX%. million law, $XXX rate the The federal full interest to our will our tax $XXX anticipate leverage for further about effective to be be category SG&A and expense of depreciation, around and expenses year. $XXX to cost expenses expect million will amortization We any We between million. tax and $XXX depletion, Barring accretion approximate

Now with respect XXXX. to $XXX capital in invested expenditures, million we

the CapEx to It other between and quarry delayed We XXXX. that projects also expect advancing restarting in in expansion network. of pandemic. our and new operating a the and fully distribution the and includes start improvements such of catch-up was of to million spend reflects quarries This California, a postponed $XXX million at at opening as were last $XXX logistics capacity growth spring, that

spending necessary. as we'll adjust our the and capital economic As carefully monitor always, environment

pricing year's you our last of up fourth X%. for of to another and a growth now increased that repairs. million, on healthy future stripping leads in was affected There XXXX pricing you'll as XXXX. cash compared the timing by comparability our fourth and that $XXX quarter Aggregates periods year share full reported declined both Costs in while diluted quarter quarter of I'll the costs combination the those were As by assumptions little advance earnings were additional from of X% generation. X in mix the in adjusted by volume XXXX of the and of give X% slightly model, color per to note to same higher EBITDA fourth year fully XXXX. Adjusted quarter. shipping due items the X%,

distribution periods charge XXXX. $XX will the diluted per pension in for requirements. diluted funding full full comparable for pension tax year And the per tax higher year, future with share-based and in vested than a the plan EPS million second, noncash and $X.XX onetime sum Last action $X.XX year. was fourth fully same participants. the were recorded or with benefit XXXX. liability benefits share associated benefits effect XXXX R&D and greater certain rate than First, connection settlement in lump credits expense in $X.XX The resulting of share This benefits we diluted share a the management was voluntary fourth compensation quarter the of and in per to quarter

sheet. balance the Moving on to

interest with a remains average position weighted years of XX financial Our very debt rate of strong, average a and X%. maturity weighted

billion reflecting hand. was maturity debt-to-EBITDA leverage repay net Our $X.X be debt of coming million of XX, X.Xx cash of ratio month. on to due Approximately cash as used will this a $XXX next December

in contributed slowdown cash than and returned the As leverage resulting M&A to and We share million Tom XXXX reduction. surrounding mentioned, increased usual $XXX uncertainty robust the pandemic to lighter dividends year-over-year was shareholders XXXX. in Due our flow activity, was the in and to through economic repurchases.

back years And I'll which the an basis to now capital unchanged. over Tom to our over call return turn allocation XXX capital on drive priorities and points Our for of improvement have remarks. closing X the invested helped last remain

Tom Hill

Suzanne. Thanks,

go Before a Vulcan their Q&A, we I customers investors to support and our our family challenging thank year. like for to our during would

to with long-term more focus We capabilities strengths, our business. XXXX long-term and well about are future. we our combined as as and continue operate even know strong the sheet. leading balance our will profitable excited building When our with Vulcan are our business and aggregates-focused execution the we positions an in that market along solid We stronger fundamentals, demonstrated for on that

XXXX, confidence there may we in be challenges in potential. its While have

happy be we'll to questions. take your Now

Operator

Instructions]. [Operator

question the of of first line Trey comes Grooms Inc. from Stephens Our

Trey Grooms

walk your comments a around appreciate low of some end you for in versus puts end decline get year the of volume markets. high you a I through takes on to prepared if the maybe the and how that remarks us increase can to of outlook end guide? this aggregates and X% X% could the Tom, the But maybe the there

Tom Hill

kind with at start back and year the just I'll stepping XXXX. Yes. looking of

would of march would I same And X% to we seems demand out. get we to think is better. volume. outlook headwind for expect in strong light and the continues aggregate important its XXXX At was kind a shipments will same to tell As probably positive highway it's the the construction is been in our in of to think intensity. improve sequentially heavy and At a And better first and us week continue are because challenge, they'll has and you negative to time, good, year. then I week the to nonresidential construction later you as through XXXX. be X% it grow. is Residential of much construction improving time, the be aggregate throughout guidance and brighter half the and that on fourth continue XXXX. better in lettings getting good very saw, were we much They quarter, nonresidential

to volatile. and adds all as through prove to due to up demand outlook But this year. So continue we picture demand you has pandemic the quite will the starts been know, march the as improving environment and

is we try set important residential XXXX, both given a thoughtful strong things we with and transparent you, be for and we really about as that X growing. guidance know So to our to

is those of throughout saw one that They're and are shipments. growing. centers believe know the distribution They're fall first intensive. overall, we intensive. the They're construction has from We stabilized XXXX. aggregate warehouses nonresidential good. We So non-res

Now how that don't know. fast returns, we

bright the last start now, a that is thing LNG up the projects Gulf seeing Coast were we're we're year. pop postponed The spot on other that which seeing is to from

nonresidential with of highway we'll just try And thing second the work. we then construction. what was timing to to be transpires the have So see about the of thoughtful rest

were funds to their Lettings year's was or light budgets. were their tried going -- if DOTs to what last to assess in QX of happen you remember,

lettings great budgets their be that rest as as up. have As QX verified of and once the most DOTs that to flat should saw stabilized, QX XXXX to up will

to work. And the go question projects is, fast so are lettings how those and those

week-over-week but As better, the kind is will it back I getting loaded. so outlook got of All improves, we in things all we to some our be half said, markets, improving still think as watch. pandemic said,

Operator

Pettinari Anthony comes question line next Your from of the of Citi.

Anthony Pettinari

could of about your terms could maybe FAST talk expectations the magnitude and Tom, potential Act of in you for volumes? when timing, ultimately replacement that impact

Tom Hill

Yes.

has in XXXX. build. highway list the X agenda after new administration, the that Biden an increase in next So you a I on the would pass Congress in One going give And their to we that bill believe is funding infrastructure with that buckets. probably COVID-XX

So it is a priority.

of is then House if of out go who's of House Senate, both the Chair Second, said Congressman EPW to you who Chair draft DeFazio, bills before T&I the September. to committee FAST the And want at Carper, the the and August have reason recess. Senator the the before bill -- they Committee, the Committee Act and to they is end do they before August a that target of of passing want expiration want

So position administration then highway from starting should strength. House is third, and funding Congress that on on And is now the increase it. The remember funding a as it. is of right

COVID from from appropriations, point for billion relief. wants billion. the starts one So billion to on in year-over-year billion from funding a the that that increase funding is highway of This of is hill funding to $XX $XX is an baseline $XX reduce no higher and $X XXXX, highways. the up

that we will the hopefully end the So at expiration think higher before before be we'll we'll it levels. believe of the the it and see Act, year, FAST of

Anthony Pettinari

Great. gears. obviously switching weather We're maybe Great. And in then cold U.S. just historically the helpful. very That's seeing

the parts and of middle country. South some

well other and dynamic. the very some if and power you're what as could like just some is on ground if could I'm you along in outages this understand wondering seeing states impact the potential Understanding more that operate. be you As Texas maybe us help situation with. places

Tom Hill

February, this first March. It's the snowing it's the But quarter. it's look, quarter. smallest January, Alabama, Central It's in Well, morning.

going to that of different weather. a from You're a this not lot big rain. would I you tell is week have

first year, and -- of catch interruption, just You the you It part go demand have the up. away. interrupted an we'll doesn't the in it is

quarter So would it. I not into chalk to read the it a up lot and first

Operator

the from of comes Kathryn Research Group. question Thompson next of Your Thompson line

Kathryn Thompson

better revenue the thoughts And states, for top color future DOT administration's planning Illinois, that? our good other trends. does DOT looking collections. impact noted showing Texas, if on in to Really states focus also important you 'XX. commentary side, focusing more a these the you perspective, general which projects? And that our your little of are state better. are Georgia, on into much From of going bit focuses state report California, many prepared pretty your wanted I your Florida. how state fund any get layering like could of on on states current have Virginia green give you, their what And on are and are that, on the dots

Tom Hill

missed I'm sorry, the I planning last are part, what?

Kathryn Thompson

projects. future Their

the with So just administration folks on green. Biden

Tom Hill

got said, lettings storming They a we As in back we've bit little of came a down in QX. gap QX. with

look If the up double X-month trailing digits. X-month they're trailing and you starts, at

fourth and we the in the highway those mature So that's on see majority we pointed those should in The which lettings of shipments. are quarter will as really fiscal southeastern lettings see out, and states, particularly saw 'XX. important 'XX, big pointed funding which -- either or up XXXX, importantly, jump from as Texas they're California, which really 'XX for from XX was flat improvements state Based news. should DOT good growth, budgets, see grow improvement we budgets, year as talk and like in and should the from we excuse our XXXX, you up flat march you particularly see out, to me, through work our states a states year-over-year which

spent growth. of got good will the billion the pandemic. So billion half past states COVID-XX relief And funds that funding. really served $XX highways. and of the $XX of than solid More you've in We're for Vulcan support interruption be then

presently going little the a 'XX. majority into shipments support Some XXXX, in funds it in maybe those that of bit 'XX, will of appears that although

is of and So catch with this, you, have tell still lettings. let to improved good recently the I'd shipments news, we all up the

-- is a will could in that the and little see later this, in within we're QX But support stabilized, I news, now we So think the we year. would has the and starting good Feds QX. probably funding you, tell and QX and better growing, maybe it

Operator

line Your of of next from question comes the UBS. Sood Nishu

Nishchal Sood

SAG, the $XXX I roughly wanted to million. the for guidance about first ask So

levels, was expenses there assuming pre-pandemic think there? last XXXX to return you're returning you So full cost year, a I'm dynamics the sure some or reduction unusual do will to just about that of you there expenses anticipating are in Are lower talk some structures? can sustainably you forward? be some going

Suzanne Wood

Yes.

And the certainly we T&E. in We are initiatives place are and other as costs certainly from And talked that's took not return as quarter, the area ways SAG a basically, as a some and we cetera. we where return of depending was may end we ongoing learned not to XXXX that $XX mean, cost of of of that benefited what not distribution, during lot there. pandemic this we X%. reduced companies with year, different, certainly actions a it right million well for of see have cost expecting year, about third accomplishing we old that at efficient to an in as We've or to in the we I vaccine prior the some what we I previously. a but more our definitely lower the to et XXXX do. lot talked of to mean all bit structure. need the about I little we by some put normal happens mean, on communicating increase, contributing during I this about reduction going an mean, time that really

that terms under of range of X.X%. the we SAG. at always suspect that's of X.X%, range midpoint to will some through. a as we the in percentage revenue, a tick to those look of just SAG find ways leverage you set for So more looking we The we continue are go I as if

see we'll year, But last as really better-than-expected of we we if in go then So the certainly, guidance. sort look accelerated the to as that, we're we the to that reduce and doing we continue year. little we we'll for did a through to improvement where get And the year, year. find ways that update through

Nishchal Sood

also Got revenues, to businesses, strong you. despite in with in increase. continued mid-single-digit Got you. XXXX single-digit very the on performance profit the the a lower high And increase the you had gross non-aggregates then

of that. upon building I us imagine some just So resumption assuming walk Can -- you through growth. revenue you're

costs the bit like Some input a of asphalt little be higher. liquid might

So through growth the walk gross high on drivers the to wondering us some that if could just mid- profits. of you single-digit in

Tom Hill

and like high where -- Sure. Alabama is asphalt, That And high growth really states jobs those and with asphalt, up happens we're it Texas, -- digit margin-driven bigger work. really places simply driven just mid-single which would what driven by asphalt, mid- and tell have and Tennessee. more slightly producing -- in by work, Ready-mix, you, it's really it's more California, to single-digit DOT we volume-driven. primarily it's improved than unit is volume in that. it's And I Arizona,

Operator

from of Your of comes Sachs. line the Revich next Goldman question Jerry

Jerry Revich

outlook from I impressive aggregates inflation. line. really be million I headwind $XX profit on going dropping the so bottom diesel down just you're costs, But of growth labor a for essentially ask, to gross facing know wanted to to pricing volumes, flat

straight what's to million offset bottom to line? pricing down So allowing the talk that $XX allows still can drop you to you the $XX items those inflationary just call of, it, you million, about

Tom Hill

Yes, sure I'd I'm not go headwinds.

you, the yield and throughput, you flat that's margins, aggregates really operating operating yield -- of our look at and energy look on plant But last which -- we efficiencies our to improve. guidance unit at cost efficiencies, our mostly really some due time, issues you volatile unit were being if margins if our our they on piece saw headwinds back, focus had if same year, less of product pandemic down, related. for to underpinned slightly volumes by I were, later availability, disciplines and At would than We that. efficiencies processes. whether we you are look tell and production it's think the I split all

we'd of to disciplines impact tell some we've I'd expect spite little to you a supported for putting $XX what been tough unit last flat processes of forward the us of So and on you would first cash I maybe in all, working tell strategic year keeping safe by XXXX, proud healthy headwind working for up operating their drivers year, -- They X relentless savings. in our through in those this, be for margins. million. And improvement prices to that quest and as that impact are look we've would to cost make aggregates years. also that tough on cost our our operators, some a other really really really the a it's a been of each I'm our expect in drive we unit but our efficiencies million an $XX on we making that But in diesel continuous in operating seeing -- that for bit. of your those we're

Operator

question comes RBC the Your Capital Mike of next from of Dahl line Markets.

Michael Dahl

on the things of you just answered, especially couple cost. A

versus So a thinking within that any piece should you half some I first volume the second be that end if guide? kind about cadence on the around was through on guess about cadence the year, aggs we within of good from color. half gave of thinking But markets. kind perspective volume just comments we're commentary aggs, helpful in

Tom Hill

and overall But kind be week the second month out, you're would of heavily think I that there improvements the as world. view we'll the you, half seeing week progress will tell I out, of we what would Yes, improvements. month Mike, also is in would in expect and year see I of loaded. that through And

highway that they're maturing now it's they've confidence start And and up because been or people projects are so let in. kicking projects, to nonres whether it's that have back in whether

sequential XXXX. through I see march that think we you'll improvement as

Michael Dahl

weather. sequentially Obviously, volumes of a that's right? But on there XQ, each quick a in we not to And think relative still expect I clear, Okay. around And the seasonality, is some right? to be that comment up quarter follow-up sequential just there terms should improvement. sequential that was a improvement, just earlier question

Tom Hill

what would I What No. the comparing it year. prior quarter to -- is I'm the in

may last up was versus little what a more QX year QX, be So so and forth. QX than QX

Operator

next Your comes Phil Jefferies. of from line question Ng the of

Philip Ng

I and reported, up, when But expecting growth. could that mid you've range have guess, your conservatism? on a peers see XXXX. single-digit just footprint little you your in low is comments should actually, provided And that have baking a on few side to see wide. highway happen would half? thought being you just the the more as a expect quite Are to based volumes of they're little we growth resi heavy we your Appreciating then more on could Is in as back be XQ, soon Or up Tom? year-over-year? and

Tom Hill

to the said, seen seen because we And we've is and as lettings more work. we And the highways, better. timing our the better. the over lettings have The delayed. the and those things in in up one, fast, Hopefully, is get Hopefully, the in in year an goes the and highway than last think, we always number are we've X how with lines mature, projects go first get range or and go that have the gotten the it's projects are work. of DOTs and know But on key of would quarter. less that year is, timing QX, it timing delays kicks as anticipate. shipments. fast faster Weather X better issue in is QX gotten we progresses, years really I variance question

private know is see it's strengths we light. back to We in side, work again, in be the has headwinds. heavy, the seen. the think the got On some goes we've money economy fast nonres to stabilized. How We the the confidence

seventh it's better week in -- watched XXXX. And first it X we X. week the -- in I in think as than was of we're week in the it than week X was

So A that pandemic money private goes. to is lot better as that get is related this of getting goes, the things better. seem that,

may could, hopefully, So with will we than best visibility said, we as try quicker to about how be and as thoughtful to the for anticipates. anyone plan we But -- seen, be we it it. we go

Philip Ng

you're Tom, seeing bottleneck not incremental per se. But Got it. to clear, be any

giving these here se? hey, just up, any seeing not DOT quickly projects just we're saying, we You're because per incremental show know some cushion how us but don't bottlenecks you're

Tom Hill

quite question. sure understand I'm not your I'm sorry. I

Philip Ng

the is, bottlenecks stuff this? is, unclear. are pretty question steady you made activity, for but it's you you've seeing that bidding ramps what question point is you terms some incremental that could of like visibility delay how My this time. Or any had up My in quickly seen

Tom Hill

No. I see bottlenecks delaying any it. big don't

DOTs if X fact, In anything, matured into the years, over DOT last the increased X or perspective, funding. from the have

or have or firepower, they whether so engineering the And that's permitting letting work.

don't I So the see through -- process move work. holding needs contractors it to just to any bottlenecks up. really the It's and go

Operator

of Garik question next from of Capital. the Your Loop line Shmois comes

Garik Shmois

Great.

You the you highlighted some quarter. of stripping cost that expenses saw in fourth the

-- And this how into can you year imply pull costs from year, from will? aggregates in next we about think some incremental that quantify should in or forward you margins that. curious if XXXX? Does Just gross if

Tom Hill

Yes.

cost we to year and because fourth full I the $X.X -- fast. at put XX So time that that, this, we was the months like some markets maintenance getting look that up million, million. a projects XX, we we both on and had based was on the as and forward about quarter, to same specifically, it QX. when as DOTs reengage better and you reengage if say for we decision pandemic to look out back $X.XX we a decided the -- the look into projects decided the the went ton in made you you project. felt $X mobile cost equipment. fixed that about longer At on success and the we pursue time, a stripping stripping We the better, But because we don't are getting and we overall, very all couple can't just look better, based And term, that together, getting and all our XXXX to move year, mines was preventive larger stripping these up

factors people the trigger demand to the to being the perspective to smaller the do improving firepower it So having the the the and on a and pull projects. the from on and time us visibility was time in volume fourth quarter based work,

Garik Shmois

And some provide XXXX? color you're in about can Great. you incremental on thinking how margins

Tom Hill

in see better cost margins And in this or XXXX. mid-single-digit that's profit what March probably point, you ton this we as with this in going cash margin XXXX to And inflection as that our at margins the fund saw see we regardless Incremental or what there. we encourage towards ton growth metric. I and like as unit plan, X%. And even And you growth to have per turn Yes. meaningful. $X volumes should would times the growth, of not margins down of mid really gross single-digit we we expect what I cash a kind in look growth incremental headwinds are on at of our out tailwinds and continue in factors think per of

Suzanne Wood

do really And declining when there's Yes. you I get and/or numbers. you add to volatility, math would when are right. just just these that, try strange mean, I volumes to Tom's when flat

could could flow-through If where XX% be quarters calculated back number, it or look be you had at the if it, XXX%. XXXX, we you

just flow-through don't lot. volatile meaningful it's gross forward, than talk strange cash XXXX, through to all said we're we just because that the they're the profit think to and drivers because going the moving are fully positive numbers just as get a that's back we where and to necessarily I point so And numbers and and volumes just the just mean continue more about until really

Operator

next line Your from Bank Tanners comes of of of America. Timna question the

Timna Tanners

little a wanted opportunity. I probe bit to infrastructure just the

of in can more us new Can infrastructure energy itself on see more give more on green your bit green manifests little how a like? what detail product mix opportunity detail or focus if of we kind do and look projects. you can kind Just this affect that the

Tom Hill

Yes.

think you in of really is I step this, construction. participate back new to if Vulcan all and kind just simplify going

just to. You have

go has to go It to foundations. rock the Our in to has the infrastructure.

from are going aggregate to are aggregate energy green will construction green so intensive new of supported demand all So we'll if as particularly demand water, administration, those sewer, aggregates alternative we things are where and benefit projects be this which growth. it's by pretty there sources, that see construction, like intensive benefit, projects,

Timna Tanners

Are Okay. get if are flavor a how that? just I'm trying announcement, any an to more there think get less? or of that we to about

Tom Hill

agg if water out quite are water how are And -- and be I would then -- green wind on The that consider going sewer you say, to are would energy. sewer not, top ones, of point but at that, and are the green or and ports energy. airports three those I wind obviously, that look extensive you

Operator

Dudas of question comes Your the next Partners. Research Michael Vertical of line from

Michael Dudas

Encouraged organic pre-pandemic? new to the towards mix? deferred to seeing to relative spending in expanded opportunities that, guide a team just that sheet looks guess carefully are in your to XXXX your is to bit any how, clarify, you XXXX I look It balance capital Are follow-on And you this cap your like is given year. are is allocating at where Tom, there working some projects you and see for -- ones you're a growth an you -- growth? business more or development opportunity little

Suzanne Wood

CapEx address question Yes. first. Sure. I'll the

growth good are that spring. pandemic a last did that These are and internal return have important the us right. hit when You're to we projects defer

since we'd that projects place many as a a these to the into money saw and really, growth bit get we related talked of the a wanted initially them that reaping and to and the than the mean, I on in to M&A, more new times, we we've year. jump the on with XXXX go projects those we sort finish as ahead we just a guided was respect that. fourth a are that result to because we right. year year benefit of quarter But the last can start down spent And principally inactivity just they lost couple about CapEx, pandemic. of on before year, that had you're we as shut soon restarting like went of in as You the things of of

to be think we're we same continue given to it, deals we're it, deals be anything and see disciplines we look deals. last and returns they sensible a pickup about need We be the market, if to about we've of like are come need strategically, to will in our see to they the the beginning use firepower a to some said, create hard we have They've balance get the there. that, years. enhancing, to industry, sheet at a over is we know market. beginning mean, to when past do I used we're what and at advantage from lose fit going going criteria contacted, as We're going we'd don't to us look a the about the do. the and to in our we've all I anything position Certainly, financial the coming about accretive. And as bit you But that to worked fit to look, and those returns strategy position do got of few that balance to have to do sheet,

Tom Hill

Suzanne. I think that said, was well

we'll lines said, M&A. you on there and markets to was it we -- deals attractive I it's would the to sense want involved we'll always, we and just in. as be And what make come XXXX, XXXX, in be those understand for we roaring nothing think we're Suzanne and those, expect us, In and the make that, as busy. a to back sure do product that and to desert happened, markets going ones be the make in

find we'll but us. always, them, the about that we'll be also picky ones As fit

Operator

Courtney next Yakavonis of from Stanley. the comes question Morgan of Your lane

Courtney Yakavonis

turn how how can into gave is Appreciate any half half versus the cadence consistent? thinking depends the give us to you the Will comments into on insight But Also, into you're shipments. about through non-aggregates those about how for the Or cadence how first be you really your trend lettings guys second year? for that any pricing that shipments with going also more insight trend? pricing business?

Tom Hill

question. good Yes,

to market helps visibility to demand really to think all, for that conditions of have this. increases the -- The continues improve. able is improving price fundamentally, first I

its laid knows top up continues We're that and LNG said, is that side, it's got the that. also helpful. healthy, The doing res very coming. As seems work. on That's see we lettings side challenges to stabilized And really heavy the bubbling to improve. you've to the with and seen got -- that's Nonres, have light while it's lettings starting of visibility doing work is of very picking to you're everybody good because is well.

is see I pricing. So tell also, I -- starting start expect -- that you, build through and to -- for But as QX. in all XXXX. would I would see to prices I this remember, you'll good will increases would that you'll price we would progress of accelerate

some have that's our -- plant We into of go when prices majority fixed the impact.

cost, down. again confidence X% being would volumes and we of price And component start margins. kind regardless this year, see the while important, we throughout pricing grow with the is unit important QX, with so unit is into margin last -- forces. saw most almost with volume of those And And in would I I And accelerate grow you happens I have that year. really XXXX remember, we'll along think of both it what as outside

Operator

Research. from the line comes question of next Your MacGregor Longbow David of

David MacGregor

quarter of within if fourth and about thinking the aggregate for guidance maybe I disparities volumes, -- shipment just about disparities talk wondering regional you're you the XXXX? and the X% the decline in that how regional sort can

Tom Hill

Yes.

in you and you I on cement fourth that would and the Southeast though that it tell were prior a Kind you tell fires us. So would so strength if of side. in matched and Illinois we all Southeast, look challenges would Arizona the that even shortages things was from pandemic for at quarter, you I improving in had year, tell California. California, the the the the weak I states

of that seeing strength. I -- is a our California of look of had the forward tell is that would California would lot we're markets, going strong. we headwinds I are in most And to you that so those will last southeast be improvements. Again, I volumes Texas As tell many improving. that year would to you be a kind XXXX, you tell marked we're now seeing gone.

those for improvement we So strengths be But will us. see will there.

David MacGregor

build pricing Maybe on you me. prior can question just about Right. the talk of kind to to

Is comparable that understand in it you up 'XX? pricing pricing close situation with us thinking about help Just the the segment? now. How nonres And average? to right is are

Tom Hill

There's really of footprint. and of a on across our market lot footprint, you at all It's variance really we're pricing not by increases look price if more geographic our planning different segment.

for product But out widespread fairly it being because to product geographic or by as geographically area. XXXX. out I hard we wouldn't between res line look to would us, call pricing hard out, So point to or it's across call nonres along and -- really more I highways lines, both all it's

Operator

Your James. from line next of the question comes Raymond of Josh Wilson

Joshua Wilson

as ask well. questions cash to wanted I some

you bit your Given pay you're cash on pre-pandemic. but maturity, your we quite know the balance did you're plans and going CapEx, still down sheet million to $XXX for a carrying than more

us chest Suzanne, how repurchases on share your war like maintain you you or you So might when something want can versus thoughts a restarting consider that? give to much of

Suzanne Wood

were think not as just it of a faced war a certainly around pandemic, given long we certainly balance to build chest. But se no the I that's the we the of sitting question. is went It's on sure. CapEx, cash sheet to there I your the to per I -- decisions Yes, et think in Because cash the having term. on best bit part a safety into good the we intention as do. there right And is those or our certainly some not delay cetera, use having uncertainty of think for took certainly thing that desire

mean, been long-planned the $X.X first million of the will to right, pay maturity March. I down in billion that's $XXX care You're and taken use the be of.

had capital long think the think, served well. we've allocation in we a well place as time And I think I by are priorities really, market. that have for about the us understood

than and dividend, the can those maintaining of them, We is If be for and improving cycle. sort critically which to absolutely about make want the waterfall that order our sustained that, priorities the of other sure through us. you think of the important

open to up That's a bit the capital and We allocation spend are on priority that second more beginning growth. policy. in cash

opportunities at be look, looking say of those I to and said projects share down on we'll as waterfall, would M&A, higher be going I And the on growth spending than a they that, internal growth so to are come we're repurchase. going projects. that as again, to back path. us dividends more those And priority

see and wait opportunities how bit to just we a plenty the go and to other see got the time share of then what arise, we growth on think consider plays the year through repurchase. out what materializes I So and front. we've the And cash then need as

Joshua Wilson

back-end Or is terms in catch-up some evenly CapEx rate? higher? of XXXX, think that follow-up, the could 'XX unusually year? about long-term the Or And is it the that CapEx makes we spread should is I how that in through like weighted? if guidance, there And pretty for

Tom Hill

out, up. First I catch-up there the Suzanne is... catch And some is pointed that think of all,

Suzanne Wood

talk back Yes. I mean, again, it. way the if you to maybe go and easiest to beginning, about is the this

projects. If you spend was go of $XXX the to We the then to guidance XXXX XXXX, back spending up result wound million $XXX our those a of delay only of as beginning million. in

intent up on The to CapEx bit there to the million million catch guiding to $XXX we're that operating So a $XXX number. projects. is growth and

restart a growth say but is bit amount, do projects. it's a intend I there. material those we necessarily there to wouldn't of So catch-up

Tom Hill

build little the year, is. evenly tell the usually growth will -- the it I'd replacement capital where capital and the it, spent, is hot repair QX the you bill of The as timing spend, summer is of more through can a be where probably the months far rest the heavier the projects in for evenly you As pretty construction QX. some in

Operator

the question Davis. Your line Thalhimer of comes Adam Thompson next of from

Adam Thalhimer

question that some saw QX. quick Tom. weak A The you volumes for in you, states

outlook the year? specifically So for What's California, Arizona, states those Illinois. this

Tom Hill

was wasn't pretty wasn't flat. It it some was flat And California with headwinds. it actually weak. -- good -- as So actually

an kind import for is back, state really California you of step us. If

the at is that and cement look So out step at the fires back -- are look California, and if you over. shortage and

which had the hurt longest -- Northern you XXXX And California, in is because cement and Southern it shortages, Northern -- market separate really of severe recovery is Cal recovering. of that, So kind whole top the improving. already, northern But demand had California, us place longest it is most has things better on California. XXXX. in you the remember, it the are really had the in shelter fires got to Cal -- that

So XXXX, a we'll slower. see in improvement little but

if year Now or this SBX piece, look XX%. highway by which the increasing -- the affects lettings are market, whole to at going increase you

the growth then growth, growth is -- like. distribution So to high and Southern California, excuse in see to And both improvement we'll single-digit aggregates in and in warehouses center even the asphalt. in residential we're and double-digit going see both me, and -- with single recovering nonres

in -- last So at and if and back I think more and -- at year's California of spite the the still were we from profitable and you perspective, pandemic look we all shortages. year-over-year fires XXXX. look step and In the remember, XXXX, cement were demand than challenges in

see to up improving now unit as we -- along to that we're in XXXX unit with margins. well profitability start sets So starting us see volumes

the without is the better XXXX. they be place a will California I challenges had sector good. residential So again, that, believe fee Arizona, in

highway is I the solid, improving. think is nonres -- it

Arizona supports that. population a pocket is So which growth, of

res if okay, be pull If see solid, non-highway sectors will as it the you and its -- work, toll challenges, still work is at challenges Illinois, but has sectors look the other probably other will be but you in highway does infrastructure.

So market challenged us. somewhat of a for

Operator

Our Stifel. will of final Stanley from Elliott of today line question the come

Stanley Elliott

job question you guys. A for Nice again the on inventories.

of kind of today, here tracking XXXX right sit towards we As kind on levels.

here side? issues highway from kind sign Do flow-through on sitting mix a the business up anticipate sort good would the of you're standpoint? potentially back you the picking part Or be You're a the of of from where year. production talking that any about should in --

Tom Hill

Yes.

see I think somewhat improvement. you'll

that talk cost for You improvement. but you our yields. Granted basin with construction, lower little you And heard helps your bit yields. comment new at margin which in mix get unit a price, me it's overall fines about more with need the

also on new now think it better going residential roads side, is of Because the is, one, the in better more you over of construction. because out basin So under now utilities anything, the in -- aggregate under tell I And the and you've XXXX, number subdivisions, new because got build are a at have but it's substructure I the got remember, you utilities, will and all you've intensive. if would mix put be that flow to just roads XXXX slabs. a improved you're you fines not mix just those subdivisions, those which and

look So we'll will see improvements, as I XXXX. think which help margins the at pushing we

Operator

closing now Tom like to the for call additional would comments. I or any Hill to return

Tom Hill

call continuing for today. the support joining you So for thank you of Thank for Vulcan. everyone your

progress to performance. we're all look family of you and quarters. believe sharing XXXX, into to momentum look with good that of to healthy, our to safe our hope proud news Thanks. and that the XXXX We I talking XXXX forward we going made keep we soon. in stay take you we longer-term you goals. we're and forward your think over few to next I healthy, And

Suzanne Wood

Goodbye. Yes.

Operator

Thank participating the Call. you for XXXX Earnings Conference Materials in Vulcan Company QX

now may You disconnect.

Vulcan Materials (VMC) 16 Feb 212020 Q4 Earnings call transcript