VMC - Earnings call transcript Q2 2021 | Vulcan Materials Company

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Operator

Good morning, ladies and gentlemen, and welcome to Vulcan Materials Company’s Second Quarter Earnings Conference Call. My name is Christie, 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

by Please call President A and and are that call the and everyone. are our legal are vulcanmaterials.com. today. a release CEO; Senior press in Chairman reminded operator, joining of along Today’s Tom filings you in later uncertainties. website. today’s this of be call our detail Commission. posted presentation forward-looking and other Officer. discussion Vice Wood, earnings Suzanne earnings available earnings other a With statements, our release, today for with our subject in presentation These our replay and to may other release Securities and which and defined Chief good accompanied SEC supplemental filings. disclaimers, with is and reconciled you, website, recording Financial financial Exchange Thank morning, in measures for supplemental Hill, and will company’s include are Thank and described to risks the Reconciliations be me at any today non-GAAP risks,

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

Tom Hill

the to families the thanks your and year. of solid execution today’s continued interest morning. call We to for in congratulate their joining safe to appreciate begin Mark, our you, and moment the to be Thank healthy. first your that by hope Vulcan for everyone call during want I you team this taking Materials a and half and

aggregates-led further first business. demonstrates Our the strength two the of quarters performance our through

$X.X we through half. in generated the billion half to of expect of billion. EBITDA year year And to full momentum the carry We our range adjusted XXXX first $X.XX guidance the the second reiterate we

result continues was volume growth, first to ton environment same cash through by our pricing and per offset in quarter, higher profit and of and increased increase pricing, X% realized by of versus by a EBITDA efficiencies. aggregate $XXX $XX ton asphalt headwind from quarter liquid by the than our the Adjusted X% expanded $XX this much million year, quarter, increased million rose quarter our EBITDA for asphalt weather, improved achieved last X% essentially operating the higher were adjusted year. cash and wet combination Even For in Diesel the impacted costs. the despite unchanged second last half our $XX gross pricing million Freight of and costs negatively with year. for volume improve. the the liquid consistent We and together diesel headwind, Adjusted period price costs control the same rate X% quarter. considering grew strategic And disciplines. quarter to profitability inflationary non-aggregate segments. higher rate with the quarter million the the the in the visibility in Along aggregates in due improved per growth and to our profit adjusted improved energy after pricing helped execution demand, the of mix, cost a improved adjusted efficiencies the twice aggregates the gross current With the throughout team’s X.X% quarter. operating volume aggregate growth X% first in of pressures. sequentially four market’s freight second our to a

year. X% by Our total the quarter cash cost in of prior the versus sales increased

by costs diesel grew the headwinds, sales X%. Excluding less of cash than

segment. control controlling in improvements the our the half remain driving During offset year, profitability. we The focus and in further profitability helped can on the and to solid aggregates what second diligent we non-aggregate will of performance on reduce

shipments, and the lower concrete year-over-year while concrete. due the in mentioned I earlier impacted in which volumes anticipated non-aggregates profit higher Our gross liquid asphalt and of in asphalt shipments. resulted projects, lower costs, particularly Virginia, declined in second shift primarily both than quarter to Wet timing asphalt weather

has demand improved major housing strength the also uptick in use single-family an picture. markets, with end to end starts. now shown across solid Turning housing. geographies. as our starts has We’ve continued It The in seen well residential multi-family as

with outlook, continues remained to non-residential healthy lighter of as back The demand normal be is leading we to first respect improvement in The half how we traditional of e-commerce but non-residential also technology XXXX, month begun states indicators, a in the Now levels. and continues infrastructure, number and to got recovering. level the and in funding non-residential the budget to starts. have month see work-related to strongest improvement over sector starts

On federal and broader bill infrastructure made we’re subject over We’ve toward levels. of with substantially progress such starts an Act public the FAST funding and by airports, storm encouraged of higher seen highway spending, the highway in systems, the infrastructure water also flood acceleration sewer and control. treatment as a and

our on recently Before and U.S. call to the want to acquire I to agreement growth turning the over announced briefly Concrete. strategy touch Suzanne,

returns. risk We growth, three have to organic because it growth attractive to balance are the with in and always We between proposition and start drive important to paths order value organic it’s adjusted Those most higher three greenfields growth, strike these basis. right paths offers on compelling and a the M&A.

across U.S. irreplaceable most We asset-based geographies have the the attractive and a unique in spread

growth expand and strategic we our as organic to profitability. are unit the four our clear benefits disciplines Our accelerate are designed

successful the spending. of be growth locations, We acquisition in in also may of regards where developing opening to opportunities aggregate that particularly greenfields like and history have We quarters, a provide new timing limited. flexibility capital and long and pace

our It U.S. M&A, new it our geographic complements the as great Our business. diversifying naturally third footprint growth strong to also Northeast. Vulcan, a company. Expanding already exposure aggregates the and existing is Vulcan us Concrete brings strategic for value, combination. the team colleagues about excited Concrete is into sustainable fit further allow forward engine at with will Vulcan look potential to for family. the U.S. welcoming the and my drive this U.S. to long-term very both I’m It Concrete, to and Along shareholder I’ll

over the turn further for call will to Suzanne comments. I Now

Suzanne Wood

Tom. price return aggregates and Thanks, realization, this key begin to by invested strength. to profitability, capital I’d everyone. areas few like good quarter, balance highlighting unit And our morning to consider sheet a on

ability to improving of an visibility is pricing compounding unit The price to seen our first pricing our half important positive compounding margins. due are improvement impact operational the profitability. a consistently improvements expect inflationary through environment momentum on good carry pressures. we the these driver in having First, and half. with Clearly current unit to year demand sequential the improvements execution deliver is attractive positive of the second along and our over price to We’ve

profit our cash of gross quarter trailing This XX-month per quarter ton. marked the in XXth straight improvement

goal trailing profit and $X ton The was ton the gross it XX cash to of was months $X.XX closer per For area next $X.XX focus ton. our capital. quarter our current per for ever return is invested per of moving on the

At on a our comprised XX.X%, basis basis, We This returns capital prior improvement year unchanged capital to return invested and on X% increase improving trailing an a of base of an XX essentially was period. X.X XX-month invested with the are pleased was points compared the strength increase debt-to-EBITDA our month and to continue $XXX our hand. sheet necessary in million to EBITDA. reflecting times, prioritize balance adjusted trailing net finally, allocation we was and support June on flexibility optionality of strategy. create capital And to will our cash XX, XX

grade important no investment maturities significant remain has note XX after years sheet the in to of It’s maintaining standing rating. of that a with close acquisition, the committed average we weighted debt our to be in near-term. U.S. our Our the good maturity Concrete balance even anticipated will and

Before turning the call I back Tom, housekeeping do matters. over touch to want two to on briefly

are noted have the increase in deal. to expense will obtained the Subsequently, an our the $X.X acquisition borrowings we along announced you date. bridge we due cash facility will which executed a loan, First, the billion delayed U.S. Concrete a used support that fund pending quarter, to under concurrent three years interest from be hand, with term this in funding with on commitment draw acquisition of facility June,

used the appropriate at this measure accessing bond interim to as prior will be so And market an the time. facility

recognized of as end a the $X to commitment as reminder, the between financing and our with applicable. that quarter. we full XX% I’ll XX%, guidance still increased rate. the of expectation final costs call The And back a to remarks. the of turn expense to the for over quarter, first million year mention for that, rate As is in tax second closing was result, And effective our at bridge is matter Tom

Tom Hill

Thanks Suzanne.

in serving for are current Q&A, be the the our to work every I want would in the on go people customers, to day. we surge comment didn’t to CDC dedication hard by Before their the thank our Vulcan Vulcan COVID response recent entire if and and I Delta remiss I the better variants. to the environment makes what announcement again their team

ensuring safety to and families. spread We of our of the will the and continue closely virus, health employees monitor their the

means long-term, improving financial We will safe to local questions. expansion take unit continue this margin returns. and healthy, and keeping driving your strong the staying now focused to And execution, on be our happy our operate Vulcan we’ll for people

Operator

And floor Thank for first is The questions. you. from Stephens. Grooms question Trey now open your Instructions] [Operator comes of

Trey Grooms

Hey, good morning, everyone.

Suzanne Wood

Good morning.

Tom Hill

Trey. morning, Good

Trey Grooms

of around different the some guidance, your year, and Thank asphalt into you performed is the the we So, But front. some the challenges given some business of Obviously, these back well unpack the segments? can help now headwinds. as cost around you. half facing Tom, aggregates puts takes of right clearly look specifically on us the

Tom Hill

Sure.

As – in takes. the in we’re to or X.XX up $X.XX is you confident little probably probably really raised you which us which the different ago, make We puts asphalt. full XX won’t a aggregates, billion and as guidance remember, of to be make we bit up, billion, with heard shortfall other days won’t say, able year that said,

on up As you liquid playing we’re know, costs. catch

not offset demand Now the aggregate and margins increased to half, end second volumes we’ll be with to That headwinds. being to appear said, uses. would probably see liquid going improving are and say I but in asphalt up enough prices market in probably improving improved prices all the that all

shipping asphalt our So midpoint. on volume being side by call it I’d higher of the offset

billion X% improving we range, optimistic we X% Unit to From sequentially. we’re still range. Non-aggregates a in on which that that a little would seeing months aggregates, good so in $X.XX the reiterate volume. billion confidence Prices cost say disciplines. mid-single-digit to we’re So in although say prices $X.XX I’d but operating the lower, be the to, me side guidance. brings perspective, we’ll margin XX of aggregates, over digits, the improving, low-single

Trey Grooms

for great Great. Thanks the color. take thoughts, Thank care. and Perfect. Tom, you. That’s

Tom Hill

Trey. Thanks,

Operator

you. Thank

is question Your of next Stifel. Stanley from Elliott

Stanley Elliott

half back very Thank the Hey, a You commentary, Tom, the taking a mentioned and into the everyone. and nice equation? good demand price work the seeing in environment. you’re sequentially tough can bit which morning, improving, you question, more next the of year. encouraging you’ve on the year of about what looks into you little all talk for side got

what’s of Just in on curious dynamics. ground to happening Thank see the you. terms the pricing

Tom Hill

than demand have accelerating morning, and Yes. inflationary XX it faster our have maybe will fuel probably growing right – probably you XXXX When XXXX. accelerate. this in Sure, and that and little we’d adjust good visibility point, we like to other a for little I couple anticipated think that now I know have They’re with well we premature pressures a pricing we Stanley. At and brighter. we you ago prices bodes pressures, days from very be to pricing it’s think but outlook,

you doubles quarter. as the if the you if to time, the first second We price And increased quarter, price mix to quarter second then quarter. escalate said, I first about, prices of over increases we month. in we the within in sequentially mean, month the look it adjust call, quarter, rate over sequentially the we talked called that saw out, continues in As

talking – and to our in pattern started I think amplitude that maybe – second about in to see which see here’s little of X% would is to although about about expect growth increases And customers higher XXXX. half a bid why. price work, improvement May. On continue sequential XXXX, work. We sequential our to that throughout it we’ll rate I – that continue

have days increased definitely last new over increases price on XX the We jobs.

ship growing When to But markets. very and plants, between bid with lag few that and it work. visibility discussions they’ve pressures. a customers, to second by again, months. there’s demand nine supported remember, price clear comes for our They all been increases, half we’ve inflationary in about roughly Now, had discussions, conversations six won’t to realized that having those we’ve a positive, fixed in

in to to prices and XXXX, bid Again, to XXXX, benefit benefit that definitely because to be that – sequentially So we’ll rate this see while to fixed XXXX on some going months we continue bid is continue jobs that pattern expect into to we and I impact XXXX. a over last climb bigger definitely think impact plant those going couple now this the of a see to year, price would see of are I increases XXXX. or

So this is pricing. for really a environment just good

Stanley Elliott

guys. much. very Great, you luck. Best Thank of

Tom Hill

Thanks.

Operator

you. Thank

Your is Anthony Pettinari next of from question Citigroup.

Anthony Pettinari

Hi, good morning.

Suzanne Wood

morning. Good

Anthony Pettinari

Concrete Tom, is assets. consistent from more the function on view are give now of of market time volumes there. next you Just on five just U.S. end-market to Or you’ve acquire any years, mean right a I’m on the to we’re decision acquisition. talked three optimistic you I infrastructure? of hearing can the more structure what with is the more wondering wondering pursue why demand? sort if over attractiveness a gotten Has color maybe to about the optimistic the D.C. better?

Tom Hill

long it’s a view, to one make and a of usually you those happens, takes as long-term Well, when it happen. those of term one know,

So we’ve about and thinking for a a as been Concrete. it with talking U.S. while know, and while for you working

you for shareholders, if both is demand companies’ good But long-term. it’s short-term it the think it, of think again, I one And with and both obviously, deal. looks back I a good was these, short-term. do – step market you for

step and markets good really us New back the – introduces look, and some and new geography in both Virginia, assets very and their aggregates attractive it are Texas in and and ready-mixed works, and you New If attractive. California York The aggregates Jersey. to positions in

very progressing company. the that and think And talented their We very I is complementary. markets and we family. think team very into forward Their it’s nicely, ours. another I look is are fact think like know short-term deal getting well-run the Vulcan the just look benefit. to them. cultures a good They’re much And it’s the we

Anthony Pettinari

it will That’s Okay. I over. helpful. turn

Operator

you. Thank

of is Sachs. Your next from question Goldman Jerry Revich

Benjamin Burud

you to on in set and the opportunity Burud balance shape Benjamin of great them? from is be the acquisition. would This characterize Revich. everyone. projected U.S. M&A Jerry Concrete pipeline sheet post The Hey, behalf is How the

Tom Hill

Yes.

that active. more pipeline smaller more think a good, it’s bolt-ons. M&A the lot I to continues and be say, I’d targets,

when us, We make you or to get able what be to accurately. do think integrate to them, and you what about have don’t always, to be do there. want be and But fast you And to we what I the do balance to markets overpay. need do as in to and synergies unique have want sheet disciplined you sure those are them

be there’s lot at the disciplined in how firepower, them. out we a So be – but have we’ll but there, disciplined we’ll look how we

Operator

you. Thank

next Hughes question Truist. Your is Keith of from

Keith Hughes

you. Thank

in earlier inflation. of call referred You to $XX million diesel the

quarter I think the that was second number.

If figure given I then And you up the affect third, it’s in probably go what diesel fourth, it’s to the how that will rest could where some to even the like talk going moved. has maybe year? look the going in about of assume

Tom Hill

Yes.

the quarter, saw on we – for think I $XX million XX $XX.X diesel impact million.

really it So was QX a impact.

diesel. I last year’s under the was in if quarter, second the And maybe, the second be think for you $X. think it hardest diesel by year the quarter hit I will remember,

right you but knows look to with to have range operating of what’s second efficiencies at only the toughest the half. full will you diesel now, best in I comfortable $XX tell X%. outlook happen going year, to Who to being which, climb under the our So the able comparables, we’re impact would if the be just cost be single-digit for prices, That $XX our this with low hit. think said, we’re

Suzanne Wood

Yes.

that to second million in million was I think half. the $XX $XX

Keith Hughes

U.S. sneak Thank Concrete. when will the one think deal Any timeframe narrow I more of close? could you. Okay. if kind on you And

Tom Hill

I well, hard are it’s to mean at but those this going predict. half, point. along Second

you tell just second half. So I’d

Keith Hughes

you. Thank Okay.

Operator

you. Thank

Your Group. from next Thompson Kathryn of question Research Thompson is

Kathryn Thompson

you Hi. you. both you there price cost areas controls pricing much greater for over are question relative are of expectations? how greater my Could your and you And into today. Thank price Thank light of clarify taking certain in – you’re there, seeing where controls? versus play strength opportunities geographic seeing

Tom Hill

I’m hear that first question. of sorry, Kathryn, part I couldn’t the

Kathryn Thompson

expectations, seeing markets price geographic there, earlier clarify the what for maybe have degree pricing you for versus upside? played also but opportunities are to XXXX? you much And there but are that efficiencies pricing Could XXXX how And into of operational not into year? present same greater Yes. relative controls this didn’t greater themselves just other your

Tom Hill

Yes.

of I think pricing in look you all the is as that and if at good as it seen this, step back environment a while. we’ve

From because to have you’ve prices, geographic it mid-single-digit diesel, with allows the I what months. We a that good good two got with a pricing last that is by Now really to is. unit think for temporary improvement. pricing prices control, ability over with inflationary raised raise with particularly across widespread. being we’re think it footprint margin the bid our confident cost And advantage it’s the I perspective, pressures from you but

increases, maybe I Southeast. the that with But half the think the really be second earlier amplitude in XXXX and pricing play that price higher hopefully in on of a it’s fixed year. a will more plant – few places

up temporary So and I setup moving offset from you forward. we’ve think that inflation, control – pressures, a cost on inflationary really to prices from on good record cost for diesel proven catch pressures control. good with got even we’ll And a got but pretty

Suzanne Wood

than of cost also back rose if X% rise good in performance X% and out that, But and of the as from a sales we look as to Yes, diesel the also despite less the look, add cost you expected. half, when would our in very diesel was significantly which you the performance cash I headwinds, that, which expenses said, Cash very in at well. quarter. pricing certainly, just had second up Tom a were first Kathryn, the perspective, quarter rapidly, year-over-year. good was But

input But X%. sufficient business diesel. parts cost besides other cash inflation So we within to to we control other in certainly again, and and those experienced than products costs operating efficiencies the of some less had hold

ton And and combination have have good so you profit results the those of thing should called pricing ton rises good get the cash and discipline X%. be is about. control, in we fully profit Tom’s that out then up we good control over he if In one gross you talked cash per which talked cost, about, to that gross able comments, per we we’ve that was

If you up diesel from X%. exclude that, it’s

just accomplished. shows performance, control, the can again, it you a and be on focus So very when you things what can good that

progression cash it’s look ended profit on and gross the the XX-month you it kind ton fact, XXXX, quarter look the XX-month trailing period that’s in months up quarter second and at XX trailing of there, In the ended XXXX, per a second that X%. if in to you compare you at of with so basis

So continue like We to that’s always about that that’s we’re that on. talk will we we’ll of to about driver something the focused always that. profitability, because and talk our clearly –

Kathryn Thompson

Okay. Great. Thank you.

Operator

Thank you.

next Capital Dahl Your from RBC Markets. of question Mike is

Mike Dahl

Good questions. morning. Thanks taking for my

some So seem my and it the first question, it kind as kind stand-alone legislative but more of a reconciliation, does are agenda potential clearly, like there’s to of relates things infrastructure pieces shape bill moving around form. the in still tangible taking

support bill? and thinking terms magnitude wanted how just you’ve I thoughts your in infrastructure view? on, and ask we And how amendments, potential manifest the from you’re of in timing read text your through tailwinds for about the both the these might to see the So as

Tom Hill

excited funding, highway tell a it. one you we’re country would sorely this about and for our mean multi-generational that needs. I opportunity I Yes. that is

company So for for us, country. the for exciting also just this the is not but

bill a from that week, pass highway funding. passes it point, increase package passes confident think to an and We a Senate point think next the this FAST that should core Congress the Act, reauthorization year. those in confident XX% At we’re significant is the be Congress Act. bill include which in increases exciting then I the incredibly FAST the their we’re think this infrastructure I would all long-term signs to of on roughly

funding DoTs would Now, into really have but takes think passed dramatically state see increased over faster and caveat matured much years what normally their greater much two state always years – Usually increased are two to the their funding states that the – I their work say when more it it we I ability increased funding. one step have up into always we saw last – than shipments. substantially to to years, three

Suzanne Wood

that, perspective it’s of exciting. the period the opportunity. add passage continue We into of I’d to to to think Tom earlier a to it more, the cycle, from Yeah. said, bill, to flows price, of compounding compound longer just our kind an one a I course as mean, of point. very also provides of unit my extend back time margins giving then which us prospect

Mike Dahl

Right.

you management comment ask to more, to anything’s with just bit I team Okay. field conversations with team specific the good close about or question, a say in update made of wanted mean, can That’s seal review second comment terms elaborate U.S. the well things on going expected is going second to going just give conversations, to your half the could you a that is DoJ Concrete, your hear. my you if process? And and well, any well I a that and integration wise, or when

Tom Hill

limited management have integration, until got of think ours that’s conversations, answer the what is we the we’ve obviously We’ve to had short the to of business and independently They’ve run team, versa. close. vice at looked I do team, we management above. all their

process, each getting to going think confident know DoJ you close to and accurately. we getting that you point And how do is but know overlay I better, we’ll better, do at year. well then the capabilities and that this it We’re how quite quickly, other this move feel

Mike Dahl

you. Thank Sounds good.

Tom Hill

Thank you.

Operator

you. Thank

Shmois Your from is Garik next Loop of Capital. question

Garik Shmois

the on in delays the other might and do business, Great. segment, potential that Thanks headwinds year. half labor due that if constraints the specific your there’s pike here parts inflation to for if or concrete of me wondering in I’m impacted more second provide perhaps of wondering I’m be the coming color the any down XQ, you think having some on. saw it’s timing you could you just just to

Tom Hill

million short-term the we of jobs. Good was jobs they’ll volume us, Virginia, Northern about this return. should had in in big and That half was Garik. really morning, It $X second of of timing the quarter. The year think impacts some second Yeah. impact ship

think business, momentum again, have ready-mix seeing ready-mix I we’ll to time of the to see good challenges while well moving price while prices many it’s increases a the great in markets around year be you’re with you the candidly – alone short-term this in three diesel, country, as ours. two

while maybe fuel, from you’ve those is quarter, So – the got moving sign short-term same headwinds in the good from is really end improving and rapidly next with pricing for this business, I think along a that’s ready-mix users as demand the aggregates. as

Garik Shmois

Okay. to be And just clear.

or seeing You’re of areas, really just chain might be constraints material up? because inflation delays inflation other any that not labor backing supply or in

Tom Hill

the wasn’t saw on inflation, constraint. just No, supply second we the quarter jobs that were jobs. the or It labor timing in

Garik Shmois

for Thanks that. Great.

Tom Hill

Thank you.

Operator

Thank you.

Your next Thompson question is from Adam Davis. Thalhimer of

Adam Thalhimer

on Hey, U.S. Concrete good deal. U.S., the curious one morning on just another guys. Tom, the I’m

that this worried framing who are downstream you’re exposure? investors are you increasing how to curious Just

Tom Hill

this look history, EBITDA at Well, XX% you we’ve I of aggregates, that XX% think – from one, to of our when number aggregates. coming from EBITDA our come if our will XX% closes from gone

I two work extremely geographies companies look match think Texas, got Virginia, how match we well. up the more you California, up. The at, to well. importantly very

expand ready-mix very margins unit can we expand operator think them concrete, capabilities, you margins they’re collectively If good in we and We help ability to with technical – their us. they look to aggregate. can unit our think a at help

we or well. other. XX we you each Concrete complimentary tonnes remember, that – aren’t fits very their think it million is in help in lines is so ours tonnes And also culture places which got there’s and also aggregate million product very U.S. XX.X We of we So aren’t. to

as well, companies complimentary put And we started how very out start talked So to talking management and We to in to but because and we very pre-closing, each each together, we to conversations extremely – figure other, fits I always us. us the them going well. said, know our it’s the know know We well. very they well. it’s team well, other

and excited if So think we’re on talk about opportunities. I you anybody see teams, of all the this to lots collective

Adam Thalhimer

Thanks, Tom.

Tom Hill

Sure.

Operator

Thank you.

Ng next Your Phil Jefferies. from is question of

Collin Verron

Can in the is that parse shipments? X% Thank little bit year-over-year trends for And question. that more versus contribute actually maybe how non-res is out on Phil. different aggregate Collin how end performed markets tracking Hi, end you business then levels? taking into XXXX to market my this to increase for dive in you and a your

Tom Hill

Sure.

I Non-res you think is turned positive. pretty six-month footprint, look have a our now if Non-res or three-month starts basis consistent. it’s on across improving. trailing trailing

We in things buildings, the you see now subdivisions. that private continue But to distribution follow growth starting we’re see like And just green buildings, and on seeing would strength, to imagine, and the heavy institutional warehouse centers. we’re government non-res, healthcare, new schools shoots churches. stores as

Inventory is basis almost low. our Residential, across XX% our were out more Single-family extremely in non-res pretty as XX-month trailing call This subdivision and more which is aggregate-intensive. I’d much markets. footprint So improving. work, it’s all great. is going a new up starts on

will So and demand to growth in continue still this grow not sector overbuilt.

growth. both single seeing multifamily and family Permits you’re continued improvement. multifamily for Now support would

side. So good. it’s just on strong Highways, the res

later. We’re talk more that normal. We’ve back to returned I about can confident.

we’re growth non-highway this exciting, or and is sector XXXX, little And the also very now, a that got is – of it’s of driving to shutdown what’s in the a and which think with bit that infrastructure. the six-month you beginning end is And shift in XXXX, we’re started of seeing we this growth the then I a kind non-highway to seeing of trailing in water housing sewage. good. got on a three-month, infrastructure. it’s of But remember it XX-month more And pandemic. see

turn. has got all made non-res the returning So and all, in you’ve

are growing. three other now The

Collin Verron

Great. color. for Thank you the

Tom Hill

Sure.

Operator

Thank you.

Wilson Raymond James. Your of next from question is Josh

Josh Wilson

my taking for Thanks morning. Good question.

Suzanne Wood

Good morning.

Josh Wilson

second all Can Just to make update moving profit parts the you gross sure out guidance. half. we the the in tie

there? are had would Where that out shakes profit think gross thinking be non-aggregates I single. you before the you up mid-to-high said collectively that

Suzanne Wood

speak that. to Yes. I’ll

reason of to In of being that per for that sort mid-single talked change this our terms that’s digits. year, had point. guidance that we gross We ton, usually at full had we the don’t a roughly profit we out about cash see the measure call

Tom Hill

Yes.

of be X%. look of I view year-to-date, a But a and think can longer-term as cost you if quarter. – within always, is more this this, variable because at so we’re

we think you the cash inflationary we’ll as from at tell and we’d the a mid-single-digit pressures, profit year march year, that per gross through the you – end I probably, ton. we’ll if absorb

Josh Wilson

geographies Got that’s activity? the been it. long, even any moderation the so driver non-resi at all? if like it’s any for And in with heavy Or quoting there are seeing

Tom Hill

it’s go big interesting No, what’s seeing. at segment about than it’s any is and ability they’re I mean and but well. And rock from shipping their to still quick that faster bid is probably we’re and to it. flat, dirt because really aggregate-intensive, very turn going it’s

I don’t starting to in follow we kind stores, even growth which said, good The any green see is shoots. slowdown. the see here, of subdivision the fall So the some is with to in one is, last to side light as is news starting

Josh Wilson

Great. Good next quarter. luck with the

Tom Hill

Thank you.

Operator

you. Thank

from Brent of Your Davidson. next Thielman D.A. question is

Brent Thielman

higher-priced of Hey. Thank getting that’s USCR given a can you your revenue one environment, you, private you’re just – the good of morning. public from bid good markets, California Tom, chunk and about you talk there.

Tom Hill

upped little the California, week XXXX hit but California, this The little is great a California, a Caltrans outlook The very a in non-res – which both tell story. faster improve news. is better again the bit Northern their came was by XX%. mend. Caltrans you, than continues Southern hardest on Yes. with me, the is and shutdown. I over for healthy. residential to would Non-res, the improving, the excuse market probably lettings in Northern out Southern good again, res in

to a from to funding put that news lot of Caltrans. really work. got matured fast. money they’re They their great So into have and needs They’ve going

our asphalt business, future and omens aggregates aggregates Concrete, business, from good our good and and our good U.S. for concrete signs, business business both news. concrete So

Brent Thielman

their is that’s Tom, right? fiscal that XXXX,

Tom Hill

Yes.

So that fiscal – starts Caltrans, July that’s correct, year XXXX.

starts, – that So started believe, July I July X. X

Brent Thielman

Very luck. helpful. Thank you. Best of

Tom Hill

you. Thank

Operator

you. Thank

Your from Research. Vertical is Dudas next of question Michael

Michael Dudas

Suzanne. Hi, good morning Tom and

Suzanne Wood

Good morning.

Michael Dudas

expectations other the several one expectations go-forward you that over to opportunities? can related your will next tie type maybe be profile the And restructured, the on on So years, gets think business? any concrete investment allocation you levels, bring Concrete, what can way frame well allocation? priorities closes more just debt your back targets to the or into certain there return how back to on on U.S. whether capital the deal And or other cash of how balance given your the sheet once the investment the were your and they

Tom Hill

you priorities I a shift again, capital when I together. think, big the I shift wouldn’t in – down, or in two either in see a putting together, see I obviously. two put wouldn’t don’t the up

happens and matching. can I gives and and around that’s allocate markets think when it that’s improved. look would at teams short we close. optimistic let how – started to to But two before put and lot and returns together us how together give closed and of to really tell I flexibility – think capital us what on the put but lot more each I you them feel give we moving how look it Again, we about point, mixing the you, I term, to how I a when we better talking more good going get other, got and we and And us this help also am be we very the it. it and the of at a view was than –

Michael Dudas

capitalized base? from Do fairly its that early Concrete U.S. indications you think current was just well in asset

Tom Hill

they’re fine. think I

business. well-run a it’s think I

I done good team think job. a has that

I as same this. again, of think with don’t like but managing would servicing see a business, where good their all that shift and as I And I the with got big they customers think well efficiencies. operating places feel any has ours, job their We capital done running better allocating team they’ve about others. I thing – don’t tell you than us, the think

Michael Dudas

Tom. you, Thank

Tom Hill

Thank you.

Operator

you. Thank

to further We I will at questions back time. the call over turn or for no remarks. this additional Tom have any closing

Tom Hill

Thank your in Materials. talking you weeks for to and few We months. quarter days next look throughout next the interest and to forward or Vulcan you

I to is look and that always, forward talking to As safe you. world families the we of and changing, hope healthy. all and keep stay you healthy your Bye-bye.

Suzanne Wood

Thanks.

Operator

you. call. today’s Thank does conclude This conference

disconnect. may You now

Vulcan Materials (VMC) 4 Aug 212021 Q2 Earnings call transcript