MLM - Earnings call transcript Q1 2021 | Martin Marietta Materials, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to Martin Marietta's First Quarter 2021 Earnings Conference Call. All participants are now on a listen-mode. A question and answer session will follow the company’s prepared remarks.

As a reminder, today's call is being recorded and will be available for replay on the company's website. I will now turn the call over to your host, Ms. Vice Investor Marietta's Martin Osberg, President Relations. of Suzanne you may begin. Suzanne,

Suzanne Osberg

Chairman joining and me first Nye, Chief Officer; Financial thank President morning Senior Martin Jim today Chief Nickolas, and you Ward Officer. With Good and call. for Marietta's Vice Executive earnings quarter are and XXXX

As a statements. reminder, may discussion today's forward-looking include

uncertainties release which on filings results actual is States Like information, financial Exchange Relations other We've performance. and revise Securities trends. future our to developments United and or SEC available by connection resulting subject defined and this whether Except are required, financial our the risks Laws webcast in as other and and from cause the update forward-looking with information that any disclaimers we obligation Martin otherwise. or Please refer earnings the Marietta with Commission, that to future both available differ materially. summarizes during results As websites. undertake legal new statements, website, the supplemental Investor Securities our on or made QX own events, results to to XXXX and future could of operating today's legally businesses, contained section publicly no in

remarks. session Ward. Tillar follow. Jim our results will quarter the today's financial In trends begin turn the brief provide Ward earnings as our addition, review and Ward call release performance to A earnings then measures over a will market Nickolas GAAP operating are measure our after will acquisition and question-and-answer will reconciled today with most as now completed concluding of defined Corporation. any non-GAAP disclosed to well in comparable I'll filings. first our call recently which directly of and Nye discussion SEC some

Ward Nye

joining Thank today's And for all you, teleconference. thank you Suzanne.

and business Martin to is we continued our start company's remain what well by refer plan, SOAR, differentiated XXXX. for results it's and analysis to Thanks in quarter strategic initiatives, the Marietta operating positioned an proven off evidenced review clear growth model successful we first and as targeted that impressive success. to As

look strengthening performance. beyond, build the commitment safe we and our building discipline safety record on operational, and Supported to for price As and of expect efficient records XXXX steadfast product first of profits by established operational we Both revenues, strong a integrated demand. to and team's and excellence, materials operations, to remainder financial, benefited safety. magnesia from track quarter and specialties we

of $XXX to revenues and Adjusted EBITDA products times X% increased $XXX $X.XX. consolidated grew million and earnings over gross diluted million. services million, XX% Specifically, to XX% X.X consolidated increased $XXX share to to increased profit per

same also the safety injury enhance business. achieved our total geographic in At our best with at incident company-wide Martin world are time, SOAR time and priorities thoughtfully executing trending class footprint the we performance quarter on our levels. lost rates first and grow or history exceeding growth Marietta's We to

aligned than surrounding over XXX in provides team. volume and attracted acquisition division hot more Midwest the our philosophy to operations. and the with As complements in Martin materials the the areas product of Paul this largest fit, central talented completed and operations offerings existing successfully and Corporation we and an employees value metropolitan platform supplier leading margins our aggregates one Minneapolis morning's fastest-growing region expands and Marietta St. in in in of Tillers of the operating the markets. upstream directly mix Tiller cultural announced Tiller asphalt release, welcomed the

integration. successful and seamless a expect We

projects and our first performance. single-family notable company's to turn scale The saw business Building let's heavy in geographies. infrastructure Now quarter the of industrial growth, housing strengthening from product key Materials investment operating demand

temperatures. winter Our revenue-generating our state from historic temporary sub experienced largest ice February's Texas, business in disruptions freezing aggregates, ready and Cement storm mixed concrete and

favorable line downstream our factors quarter. largely the non-COVID-XX with in Midwest and in year, given faced quarter benefited in construction in impacted growth shipments activity the Florida and declined wind and to Georgia, our the second projects. increased from Notably, expectations, aggregates seasonality same period Overall, a as our lower reduced shipments X%, unseasonably Group the return nonresidential and Rocky activity. typical East year and aggregate Colorado, as last seasonal conditions This operations our first benefited results by largest more challenging from Additionally, weather prior state comparison offset revenues, the Maryland, strong in energy residential from Carolinas, shipments industrial aggregate heavy mountains.

in growth of highlight percentage pricing X% the Texas Group decline robust, divisions unfavorable activity locally softer East resulted basis. weather shipments X.X% adjusted geographic limited East group or a selling from gains we a mix in increased serve. X% driven to X%. pricing pricing both strategy, price a markets contractor and that pricing underlying solid our energy gain remains higher-priced Colorado winter sector and These West average both and Central construction market lower X.X% supported shipments. West demand confidence mix by in product and underlying an attractive with Group's on conditions long-haul While in contributing increased Aggregates to

effect Mix garnered March, the throughout and established operations and quickly in and extremely record both delivered demand activity cement monthly effect, X% in cement Annual construction support demonstrating growth their actions an winterize triangle. to production from grateful capacity proactively X cement and during to plants Texas Texas. offline, the high post went February's South first storm. robust and North operating our historic our business the to storm, us quarter. pricing widespread Our normal all-time grew the To strong have shipments shipment return quarter adjusted from to into our allowed despite performance April disruptions take I'm teams, that prices

by backlogs. Texas to our Cement customer as continued We diversified benefit market supported from market expect business type trends in will and continue favorable

businesses. Turning to downstream our targeted

Large last geographic contributed lower-priced mix higher cubic projects double-digit incremental operations which record more shipment operations late declines Texas, million shipments, Our than offset reflecting Colorado. X%, for in in volume concrete first and from to Concrete pricing growth yards. ready-mix a nonresidential Texas a XX% to nearly weather-related shipment year from shipments. increased of declined X percentage established quarter which acquired

paving Colorado asphalt return conditions production typical and days period, reduced lost year to Our resulting more from in the weather versus winter asphalt business shipments. a prior

pricing, however, and Colorado X%. well optimism. As by activity fundamentals market supported customer improved overall bidding remained strong, healthy

ahead, that end-use for intensive led, Looking attractive Marietta's fundamentals construction the accelerating market primary our growth we foreseeable sustainable three secular future. trends remain aggregates will confident across drive Martin long-term markets and

transportation, initial in the and its in or America's working success We With are optimistic mind, Fast our recent investment proposals, gold year the top encouraged infrastructure steps currently fiscal September disproportionately and important funding Estimated Georgia general remains by legislation meantime, five our Keep or consensus North prior for in XXXX and Act XX% materials advance lettings a Carolina, for the In business, above building needed months. fixing total surface increased of infrastructure state the resilient. in much meaningful to Colorado, chambers their shipment will reauthorization passed on or states, departments expiration replacement Fast and congressional revenues beyond. to and top business. coming representing of Texas, Act XXXX own our levels. our be for levels Florida, we're both that DOT’s, XXXX before are state or generating near are a five funding local benefits transportations to

the first from favorable of shipments and retail the that shipments, of and early single-family and The XX% company Aggregates COVID-XX to from market and employment growth availability, now shipments sectors. first some aggregate lower dynamics, living For XX-year positions accounted to residential regions. historical Light intensive Marietta's of housing warehouses southwestern below the should well our XX% weakness in increased quarter nonresidential continues impacted leading regions, single-family quarter market like underbuilt our given of XX%. strong infrastructure southeastern accounted shipments. to growth footprint of investment activity term, heavy offsetting in these for commercial climates along in construction conditions, the in recovery. aggregates signs population longer the for industrial benefit effects average benefit mild in land broadly more and benefit from data Martin of we're drag seeing centers, reference, cost nonresidential to nonresidential attractive

times construction aggregates shipments. Aggregates more to to out of nonresidential the first the is call given turn communities. to ancillary suburban for residential now market and quarter discuss financial needs single-family over where Jim? Importantly, build multifamily X times first Jim X quarter than I'll housing results. new the specifically XX% intensive infrastructure to accounted our to

Jim Nickolas

and XX% X% adjusted We quarter the $XXX set and achieved you, good quarter history. increased first Marietta's records while margin million. first profit and highest revenues previous The services morning profitability. $XXX established Building revenues record Surpassing Thank Materials in Products XXXX. million, EBITDA quarter business of the in Martin gross to increased the and first for everyone. to Ward, to

price continue excellence. and to of unit best-in-class aggregates sustainable discipline combination We drive and the growth operational profitability through

For profit points XX% the gross lower quarter, $X.XX XXX per XX.X% aggregates ton shipped volumes. basis gross and to shipment to expanded margin product despite improved

services In contributed to freight improvements. internal gains, contract lower and costs pricing addition to these

a X% operations improvement. line cement top Our benefited from

production nearly led to deep all energy directly gross degradation in and Texas costs extended February's However, kiln due other million levels downtime, to product X,XXX freeze, and a reduced margins. $X point basis incremental of

from on demand guidance. disruptions improving the gross first improved Higher in track and cement XX.X% from with product margin well generating first double-digit magnesia record products, year. $XX lower production and achieve quarter Ready established material mixed continued combined for costs. growth concrete by gross to X% margins steel shipment supply chemical delivery XXX positioned product levels, our global full a to weather and specialties to resulted year production and our revenues these business management, shipment of demand and is growing which While cost the and driven Magnesia quarter results, ongoing were in X.X%, benefit of remains prior points matched domestic its benefit raw increase. to headwinds million, to tight and basis product

our at cash Now allocation. capital generation a look and

million earnings The driven growth and a for first of increased record in generation. by quarter flows cash cash XX%, $XXX capital. Operating working reduction a was

grow priorities disciplined healthy responsibly continue to maintaining sheet balance capital We to financial our while and balance a business, our flexibility. allocation

while Our rating consistent to shareholders. profile. focused capital acquisitions, credit organic investment investment-grade value on enhancing prudent the our priorities maintaining of return remain All and capital

capital efficiency expenditures million. expansion. We year high-returning focused prioritize are range expected drive million continue from sales to increasing margin projects, $XXX Full to to to and $XXX on capital growing

nearly repurchase shareholders through our and share meaningful repurchases. XXXX, we to announcement since as as well authorization dividends billion of sustainable combination February have in Additionally, returned a $X.X

Our first quarter both earnings and cash records. generation were

a at March as X.X times X target XX, of slightly times. of result, X.X our to times below range ratio our As leverage debt-to-EBITDA stood

Last execution acquisition. Tiller the SOAR our completed we disciplined As Ward highlighted, of week, is XXXX underway.

$XX million acquisition flow immediately adjusted the and and We cash using an expect $XXX We and XXXX. the of on EBITDA be our and in this of of cash receivable months balance to financed credit of to facility. earnings revenues X accounts sheet contribute combination million remaining transaction drawing a accretive

remains guidance contribution XXXX I guidance XXXX year we and unchanged year from will when will full of back call That that, report half provided the expected our Our over acquisition. the results. Tiller we the the our to With Ward. in guidance revisit said, excludes turn February

Ward Nye

first near Thanks, record results is positioned our the growth Jim. trends capitalize on To both conclude, Martin well Marietta performance. sustainable industry-leading expected construction in we are long to are that to and safety support term. extremely emerging of proud and activity quarter

an value an the to the to and excellence beyond. in in If and Martin solid We're execution our safety platform, outlook delivering now aggregates of creation ability sustainable provide successful, continue build to As Marietta's commitment required continue and turn attention will balance on and confident XXXX proven growth sustainable to instructions, we your pricing, a future, questions. the so growth led will foundation we XXXX to will we our of disciplined strategy. proven operator operational and unwavering shareholder that has addressing superior our for the SOAR

Operator

of first Our Instructions] the question from comes Thompson of Group. line Kathryn [Operator Thompson Research

question please. Your

Kathryn Thompson

with marketing and last earlier thank you this anniversary Ward, support. over the global I also TRG's first before would the call as today, is said but Also, recall, XX your shutdown, in you correctly, and very if a the going years into for you guys moment an

Ward Nye

thank I at congratulations and on that TRG. you team you built

Kathryn Thompson

guidance. around is today question the So

could in into understand leading it help with the you and situation clarify your versus also the the and that us how understand also release given raised additive delineate outlined us better you plays heritage shortages the helping today's If guidance into guidance? heritage cement in why with current that, Tillar just wasn't and that Texas

Ward Nye

heritage we've things. guidance Kathryn, reaffirmed guidance. this that simply a again, I congratulations and the morning to is your you our team. couple guess, of One,

we've obviously, given to revenue would guidance the for heritage would again, effective add, get what today. be So need you go to and which Tiller the guidance you to numbers EBITDA and

we've math And is changed So QX. done there. on here the is It's other easy do. to that that the for not thing based very year guidance

we're So this was changing was has January, months the of view the again, came an us. our at of in premature out those outdoor remember, and we three beginning and year out been feels as a February have others bit sport, it March, and guidance think that where to I with ahead well. after modestly And come

guidance the balance we think today. been were where we of beginning in to think out it's I we some an I So have many change year. the But degrees more of seen came at when effort respects,

respect to to please with So are that's to that, given where what Tiller. we guidance, we've heritage you to relative add

come in said and guidance. year at revisit prepared Jim back will we half As remarks, his

think One is with will revisiting happening obviously, what be be cement. of the I we'll things,

As of year-over-year backlog in the you in We're cement to cement, looking cement attention. up And tons up actually draw XX%. second question. Number if We are the have Katherine, we're your that's seeing at our know, several considerably. pretty your in part backlogs cement Texas. one, I'll only things

Number So when that in directly million cold fact energy shut costs. business nice one, for about in two, quarter first with some semi results up expenses that, We other number tied business to days February and down effectively for takeaway. XX $X pure unseasonably that's the weather. was we despite of production were that turned the incurred Texas in a the

from We a that. giving effectively came ended also that simply some nearly That had us million driven by headwind, inefficiencies XX-day up $XX that period.

that I'll X is, price on point went do in at thing have other marketplace. a April we ton $X that's a out that into that obviously, The increase effect

recognizing on tight The that that this Texas we done, have in be it's other to thing going cement. year

we've We we're customers have a September. letter out ton put let that a our increase in marketplace, $X price in and another know the anticipating

So we give cement question as a the number your will back some again, variables answers that guidance of are you question. and as These tying the to and half account revisit take we we and back year. come that specific very then ticking to guidance at all on into

Operator

Grooms question next Stephens. Trey from Our comes with

Your line is open.

Trey Grooms

to morning. a see announce So major theme, Ward, it's during acquisition M&A your an Day, and recent accretive was Analyst you this encouraging

rationale Minneapolis market you outlook any St. can off, first So deal and the plays into growing market How your talk your the that of presence about strategically? in Paul the there? footprint And there? the color health about

Ward Nye

happy I'll to.

thing of You was have think XX% the XX% we're the in that X place in a mind, about start X led XX% thinking look, that in we we've SOAR is, markets. long leading Would earnings that X. said our markets. X to or year markets conclude If this in the not the cash accretive a were you we of position of to we the with keep lead of and when It's to nice off right about process, see That's to this. Tiller.

it's Number that. could in at wanted reasons States. So Paul had specifically process, XXth to in in if terms we Marietta. be again, the St. St. a aggregate Marketplace. there which wanted MSA identified we Tiller as United to And an Minneapolis, grow. are MSA we St. our that leader had Paul the one, that for the several marketplace. Minneapolis, We wanted in SOAR target Minneapolis, look Through we a we bring of into as see we Martin to largest if We identified consumption like Paul,

St. they're to when Paul, So not in was lot I that aggregates consumed which saw people. in there attention than intuitive I Charlotte, more one is are my was something that actually think the things of that Minneapolis, got of a

largest The highways roads. billion, other highway is about they've noting maintains and of that's goes worth got purchasing about of Minnesota fifth $X.X to a thing nation's budget system, XX% and the that

that they way like in we place. that So the invest

here, other mix, to not a It's upstream being out would basically Trey. It aggregates really want a They're to is producing does leading sold contractors. is but hot thing business. business. Blacktop The that's led. It's this I I be clear laid that have say

subsidiaries, and operated called and Gravel, So a has historically, Sanda Asphalt. then Sandy of that's through Barton Gravel literally Tiller business business a Commercial their couple

XX-plus two EBITDA very, learns really there the pot we have. with those about what in cities their got So an they And central businesses nicely It's very They've division. area. average have locations. XX-year again, sites comprise they what twin life in the at have that a different

long markets attractive are Tiller organization. leading brings be to back to positions term, near-term that's to feel like we that and back and in what this going So SOAR,

that well Tiller Marietta we my I indicated bring is, say were philosophically, aligned. Martin The Friday, in thrilled several absolutely organization people into that and remarks, And prepared we hundred would extraordinarily thing are on I the other to organizations from closed the track. as

Operator

Phil of Our question next from Jefferies. comes Ng

Your question please.

Phil Ng

a of XQ on start that? basis. early. back Can strong margin on on don't would But are looks the some call some a year because it guidance aggregates full margins too would over guess color years the we're envelope basis be guys really year. if to really aggregate based any like you simply year-over-year challenging not it's expand and of just math, the on extrapolating your changing XXX you points to know quarter the basis of for in helpful. I rest degradation, terms year weather I XX some despite Congrats imply it points full

Ward Nye

excited we're VOT the latter back. we fact QX. don't And about simply We're now what's the excited places we're Look, it's like what North that say because -- about saw I there. very linear is at looking are right in Phil, I would really Carolina say just is that guidance it's out updating not the really Obviously, QX. be former. too more would than What

year The nicely. price very, in other continue I very to thing see we're fell that think that the we'll through through seeing QX as

You saw that.

The performance in I throughout the thing we QX that continue other we cost that year. know good to cost will we saw I performance. anticipate was very think good see

a I think It increasing have through diesel QX, headwind. a was year. it some become headwind producing in buckets in saw was is the Frankly, wasn't wasn't where much at that's we moving give but better as yard look to a location The material some of a freight, actually likely you take. a and the either, of nicely from to of we tailwind we outperformance go an if can which much year-over-year, cost of nice year-over-year. degrees fact

if number see freight year more we on, sales Now out sales the would yards goes going of move. that obviously, as

things and to we So down, think we contract spend. as we some the a down. services that there What and hold other as costs. you with are In of be things of were And have on of with were personnel types likely were stripping number think components that. that's I lower Equally, words, will Repairs to. those well other revenue, evidence moved tell I'll capital were able down. saw that good

last year, nicely. was worked did it very we out necessarily just recall, do of the you If COVID some timing related, restructuring that not very,

we're changed it. assume at you half continues come back address But again, we've the Again, linear do dynamics So not want to that would everything guidance in cement. seeing both I what just is, year again, and and fashion. like aggregates not that's the I take pricing a encourage in to in and we why then that

extraordinary up quarter, to to teams XX% were our almost per relative what ton per looking think have in like I looking that cash profit from best-in-class XX.X%. profit and can gross And mean, saw Again, at on ton if you're types that growth, I we looks going you metrics. that at you're the gross tell job I done if costs. an of

be we -- feel to the we're year. good feel sit where clear, the balance we good again, about So very now. right we of about And

Phil Ng

work that’s the taking on like, doing is It the helpful. encouraging. the sounds Super pricing all you’ll good cost and really front Okay.

Operator

Our Stanley Stifel. comes from Elliott go of next question Please ahead.

Stanley Elliott

relative want to those to strong commentary the commentary lines, how expectations? for then us Any pricing kind share QX. around mentioned And you'd with April You along overall? trended of

Ward Nye

And address bit April the others live that it we last people tightly and to the by the last a I'll quarters will, was we little view actually were quarters. large extraordinary encouraged part such to than were within time. more guidance talk pricing you as doing because know, Stan, typically that I because is our SEC about we do an period and did you very And in removing year, being year. recall, as of ahead, were

I momentum there nice per go I I say, to surprises. would clearly, but into se. won't will there coming is no So say April, QX. into are Relative was pricing,

the that of would On it, the way way the planned. piece exactly anticipated we aggregates it's working we that have and

that's hard reported saw mix to year. maybe markets think mix as in that, see within certain price the some on up certain certainly You I might If sizes. we could on It's in the tell think of talked we possible this possible. at year some given. some the that's a this later we discrete very that moment, changes the see aggregate think basis between that, again, much we've it's see quarter, about size but adjusted breakdown reported I X.X%, at tightness very Again, do and that adjusted, I X.X%. guide you

it's that's different to of aggregates. circumstance. of obviously cement, If speaking relative a All we're

very keep mind, the April So good on into cement a tight Cement business. Texas. Texas We in effect This about is we feel is nationwide this that $X in not a Cement is increase business. X. put

market the X a increase letters going is be and $X see price by sense you going I since believe think of before, published customers that intention to intention, first all -- stated that to market. well. most stick it, expect market give that, on to of example, the XXXX. going is think is another North as I We that of in midyear And our our to stick indicated as in intention ton to the a we for September that's again, the central We Texas

confidence gives we good of that sense the So that standing. in pricing at that you least I in degree of market have think a

Operator

question next of Tanners from Bank of Timna Our comes America.

Your line is open.

Timna Tanners

about to hearing Obviously, steel as tightness little costs, I a in is I and transportation you that lot increases I more ask in wanted bit if such but and huge you've transparent, use know the labor a we're could. other. most materials diesel of seen

if you think challenges some of we So be could could would going address any and those offsets forward, that about that great.

Ward Nye

significant Timna, the we we as I appreciate No, from not seeing we're If our hits question. business, through inflation go look at it again.

we will mean think biggest buckets look single about for teams like have if the to the in that going we there flex is markets largely because us, personnel. we So the the place be bucket that material ground. able in need to biggest be thing going on what our is cost put we're overtime to hours some the be I to that

The what in to less first that in seeing that we as be challenge actually thing rail. probably some other on by was a later we're indicated freight be down some a would the year, relatively high-class circumstances I up going to in goes be suggest can moved is I quarter, of occasions, the you if problem. freight, a that's because mean, bit

not set about a vendors. certainly we've got of that. concerned Again, we're So good

We chain think chain We have Most our very a is supply cuts favor. in of good in our domestic. that much supply place.

report moment. to to Jim to that. as going see feel that is to it at be we the anything has profile very anything Timna like to turn looking I'll anything we're I'm to again, We cost like don't if our you. he So in cost overall on a happy profile, he'd see add particular to so

Jim Nickolas

it. very of prebuy prices mobile the did year. obviously, commodity in the matter, No, a earlier from steel We market Yes. are equipment caterpillar We're actually not elevated. seeing a as

that So way. inflating, not see we steel equipment, think are prices increases it we cetera, to the price that got coming And next year, extent ahead et year. seeing we're that we'll this plant, our yet but of any are probably

Operator

of Anthony comes Our next question Citi. from Pettinari

open. is line Your

Anthony Pettinari

detail a XQ services drove the in the expect quarter margin. should year? trend lower come as any just maybe and to or to you or gross how improved contract that in You the I'm driver pointed what can contract we more wondering services provide And if of remainder back of on

Ward Nye

think by repairs, overall was, I What contract cost particular. it by lower services really contract rating lower in was primary the the thing, aided services

do it's So have costs, stripping stripping much to we as did year-over-year. not largely needed that and we

M&R it things, would that gets it would repairs, largely the those grading highlight and I you. be but So two for two

Operator

Our next question Goldman Sachs. from comes Jerry Revich of

please. question Your

Jerry Revich

Ward, can targets Day. you -- pipeline you additional outlined here? range opportunities of you Analyst the on are talk capital you from optimistic about How how M&A potential the Obviously, a are at geographic broad deployment about over the can seeing next concerns higher you're result if capital people if a just taxes potentially couple close year. of as quarters? on you comment of And you to gains could, wanting quicker next

Ward Nye

would would details have we actually because I guess were XX of lot today. ago. on beginning it Tiller material to material this ago, we company Tiller, been a several about not years years It's if One, look, things. talking XX Tiller

to but rest Tiller of doesn't for having very done year. number a important acquisition, Tiller, draw the our do to anything state So nice that, it's firepower that down the one,

notion. with So start let's that

are So the SOAR, two, pipeline consistent with done very deals It's of with looking I them we tiller. you and one. we've larger completely much. of And will pretty like at Number that right it some robust than now. is pipeline we're share a

Some of to to them know how will go. exactly of than impossible are any it's those so smaller

consistent did completely way and markets we if not With seeing to find what timing, closed get we we to position necessarily to to we our markets and will that team do think went wanted us grow Analyst that's respect clear what's Investor continue And position in Tiller. not faster. you seeing important. I were approach consistently leading again, M&A. a where during sure That's has I'm what leading with have Day did we disciplined think in see in those to very making do. to a in had we which could very and a to I a things wanting those necessarily outlining areas people

a may that I focused would either think strategy you with be week on or most they're value. that's generational imagine, within Everybody them a of as changes different focused on looking toward. they more are our company focused, is

conversations the so out we around we important. are Equally of And transaction. synergies that pull feel are like can the that

carefully. time or we're that go the measuring what it the did Rockies and I for able back over or otherwise. on at think whether Bluegrass or been And we've very to we TXI obviously, value we with was if So look River deliver, those

busy M&A of there's is there that I you think in would track on But the good, hope I front to year. the is to record for suggest it's our come. and certainly the to more respect be our rest what

Operator

next Our Longbow Research. from David McGregor comes question of

Your question please.

David McGregor

the on good quarter. Congrats

just got be and that the You XXXX? each how would you with just migrating your out infrastructure, from see if vary you how earlier, talking your year that and nonres percentages that helpful. of for laid wondering balance may just correspond built that you've And market what talk could would the about mix mix guidance about the over res into

Ward Nye

think several clear. Look, pretty are things No. Yes. I

of Texas again, I our we're When NCDOT, and levels look are number. top looking And of five $X.X we like. we infrastructure Equally, from is think what FY and say letting increase looks are billion, would million. I our top schedules a tech from going very be think where up mean better. their states, that $XXX at which XXXX about a increasingly that's projected $X.X it was is to attractive over going XX% I to that's become XX% that at at from XXXX if a if revenue. in FY blending billion XXXX, because perspective

very emphasizing those had which feel they learnings to they're you budget know even again, and indicating big like infrastructure has long So attractive is projects a And are David, that higher go. this movements. year are , ready

couple a year-over-year. as is So COVID-XX come if to we're also mind we about back states, that find something the the the lot to a to keeping of worth to well. relief economic way think are those relatively is went into dots Georgia and seeing system But important Colorado, their that's in us, I states are that flat of

process. Georgia that million And got got Colorado mind, in in $XXX process. keep in million that So $XXX

in And to So increasingly we get think year. infrastructure continue increasingly could become really depending attractive on happens next it attractive. is to D.C., what going

non-res and beginning there, see, important Austin, Atlanta, others. we're San like we what the if green recall, that thing guidance today's be is David, shoots the And is logistics our we to moved operations, industrial, the What's the to the year, and Des non-res it and we're was that that's thought flourish. talked continue how data we in markets to to would thought though, view supporting Indianapolis role our Moines, is, Omaha, we're the think we serve solid facilities percentages is. And you continues in center in about see we would modestly critical but business start the clearly, I And seeing by market for that these that benefiting well at have gave market in it see release, light DFW, will play positioned facilities some of you incredibly to. from we can Antonio, seeing earlier. we when think and

I have what's would in inflect we even think to thought. we of used start some than is would see then still But we encouraging we do. thought words earlier the that markets we're that we where some seeing

it's an for So and good and what's a come Equally, which to Marietta Southwestern light uptick Colorado Martin area Atlanta the And we're it. Atlanta Is piece in the seeing of and we in that's to footprint. be in the we're if longer. today, Southeast, that's well corporate clearly, knew then into up with think we is example, might commercial starting from residential retail, seeing lag, now. importantly, pick a with today, lag significant as office to expansions, is that relocations light just positioned particularly housing bit looking And well looking benefit at we housing. happening because thought going little would a follow with plays

context, again, we if the average single-family is for put starts housing So in $X XX-year million.

that, years. we intensity family that we like the times. back by at And in what at you normalized think adjusted XXXX. both Analyst at if Investor X was XXXX it X at starts and rate way States talked aggregates consider in year at and is aggregates single like that's a is we were threshold numbers of saw because look we And correlation time the XXXX in dimension there's to about $X.X a was last about United between exciting back And we demand, the several way, a starts, we're where XX%. the Day that focused lag, market those March if looking next So for annual the And seasonally is with housing again, going million. of the pretty for single-family be we a for the that the think key

David, I So better housing better. availability is single-family markets we're when back held today. but probably And getting infrastructure high-class right we housing, Marietta we clearly a being by think problems, really Martin sign to in heavy problem. think that's is we think rank is again, the think and getting non-res in but particular, light trying And attractive only now, is

Operator

go of Loop Next ahead. question Capital. Shmois comes Please from Garik

Garik Shmois

that year? of a some Given in or should know cited, we're the not we the inflationary rest aggregates we particularly cadence given but the environment growth think you opportunities that, the XXXX price should the yet, pricing midyear how into potentially I and and you're just of about year increase anticipate next breakout in, curious in of yes, price

Ward Nye

long on volume Yes, Texas. very degree different what size follow was said to see to of speaking markets. thought some discrete in with that a tight might percentage commentary clear, some we've a I was large But in than lag. I be I cement was tends market size wins I in a a it, percentage is a Garik, are specific a your I back on aggregates to clearly, the to just pricing to on the tightness basis, And seeing piece offered bit think commentary, that what by we when of said already a because we

you're looking an Garik, T&I on going bill. infrastructure a the and on you're got know you've So I if saying, markup in-house look, at marketplace,

It going in likely seen like like is we've be a is to in It years. got It like on to something that You've happen bill. markup looks XX is biggest the Senate happen. looks something EPW going something is, looks going whatever on this that an to something year. infrastructure

to think that that commentary probably non-res and bodes relative to I was that's If res, think back well. David, pretty in go we the offering to just healthy his we question I too.

So several there, gives we've over ahead I think for that's been coming because be environment. the seen there going that of back think volume is to offering, I what in mind, pricing the proposition do keep the opportunity much to years if volume a last you're the be in very to it muted

with the conversation that actually the So that. is anticipated pricing the X% way, offered aggregate you just of is we in And by volume course through quarter. the this we down

that you've right. the think I So is proposition offered

think there's you but and more watch what we time still to hard think Garik. more thinking I that it, have come, about to would posed isn't, I a where

Operator

comes Davis. Our Adam next from Thalhimer of question Thompson,

line is Your open.

Adam Thalhimer

deal? Ward, Tiller can multiple the you any comment net on for or debt the you of a your sense closing for us paid kind after give

Ward Nye

because, very we nondisclosure spot. decade because I obligations transaction that been turn it. remain the would as than And in this despite is of it XX been I is attractive will still about -- we've Jim? What have what the a to and hear latter very the with have done would if what talk Jim more material, Tiller over notable I'll Obviously, a ago. we've have family, had and want to do you'll around done mean, been that ago, would confident. former. I We're fact a we it we years secure transaction a the said,

Jim Nickolas

south times zone. our We're still this Yes, X debt-to-EBITDA doesn't leverage, of our times change to Adam. really just meaningfully X.X target

executing pipeline M&A forward. much going of that an really be So will not on this impact for and our

mentioned, and is as flow to great. year Our Cash And and is is we accretive this X. earnings good liquidity deal cash improving. flow in

Operator

Our comes Raymond Josh ahead. next Wilson from James. Please question of go

Josh Wilson

And quantify the I could guys some X an if I more time, is dollars, of and bad we come sustainable wanted and maybe you get you at the good which well. and could were of there to aren't. appreciate so basis But ag up can ones since just are just from unusual XXX of basically flat the fuel just quarter. size quantify guys us as sense you if points forward going markets XQ for diesel a which

we that, can helpful. a would that have for be So flavor

Ward Nye

Yes.

Let this. me do

that, and Jim some address the Let of and on come you broad afterwards. and takes to some I'll very me commentary ask back give specific puts

Jim Nickolas

Okay. Yes.

quarter, That's for front. price. our benefit you own guys, that's it, something this $XX of good So million Josh, as the the call most sustainable the quarter. was That's

impact. $X down volume guys. of The was X%. are good about bad One profit was of the That guys million rest

but freight to grow that works where across $X.X $X million. for million, expense under lower markets, million expense improved basically makes just that internal higher on Again, stay may if million. So repairs by end expense again $X expense board improved contract by improved we improved $X the at. depends quarter. depends the by $X neutral, Diesel services personal it by million, improved expenses almost yards, sales so improved It have by

Ward Nye

I likely the So things. that, -- going of we're if several what say to with forward, would background Josh, think we see about

headwind. If will a be you're looking that for things

will I the fuel. industry think the headwind single diesel face biggest be will likely

is Colorado seeing, very, We The a cement if had be record in likely Texas not to year. North is And very pricing low. think our think all attractive we're well energy remember the was going about year Carolina attractive believe really this attractive we wrong and We business keep our at Texas be in on year to to bench that Colorado that for very aggregates business last we with only is But we in to We this Carolina thing sitting had have think 'XX 'XX. for in is continue sitting think So going last going to very North a us. Colorado quite is what in a equally year, the superb year. geographic perform year anymore. us is because mind, that's on mix bench.

think guys with Jim a had I winter course, late they 'XX you had and a in setting very giving that good into of is literally then weather a from perfect are. so And mind, guys in in wet 'XX keep of good deferred storm sense, 'XX. 'XX bad they So beautiful the some and work the

I bad think than good guys. guys lot there are more a

they one the Magnesia don't they we is to sure with deserve really make guy, to as credit again, get what think respect call And because happening I out I well. Specialties So more want this good that we is research what steel QX real a the Marietta, Martin and revenues for is it's million by year almost differentiator Jim prior year. was industry. referring to of a over a earlier, led so nice increase represents X% that's think And $XX

about So last if year, a XX% was mind, that now rebounded keep were we we're to looking in utilization. XX% capacity year that's steel, when half domestic at

seeing percentages profit we're So business, that with seeing of nice and again, that that our ago year we're what in a even very a was in QX. that it in recovery record line seeing seeing margin business But record we're business. in QX correspond gross importantly,

goes of place So that materials where we're then going this we be feel get business, Magnesia business a like and the there's both on the at more attractive going Specialties very forward, back. we're goodness to to

Operator

comes Our Michael from next Dudas of Research. Vertical question

is open. line Your

Michael Dudas

back tight layering a 'XX the also think that could to good be out release portion the factored going the 'XX, some be and little renewal bill year portion starting this probably you you anticipating because more thinking that 'XX let's capital you be beyond, state seems is think release in at like of about or of Or that's to going open be you in, a COVID pretty that markets governments coming fast the opportunity somehow. later what And into that a and The from -- flowing then about on discretion infrastructure eventual a influence when big falling successful there's into for -- how about the because lot money Are that? get anticipating -- then? budgets? year. or are fiscal and to to portion Is

Ward Nye

we million the COVID agree. of Indiana, the it, we about dollars $XXX I million. to that mean, if state We Georgia, $XXX look of we North million more at release Carolina some even answer to like Florida out And in short $XXX gone specifically Colorado. in billion is, look, not to Look, some places $XX million, the was that million, context already No. there. and talked And economic a in $XXX if that $XXX had look like put that's Texas,

other yes, one, that can number Answer of move late the we into is a we are So Do to needles. see dollars a going see or time that's numbers, impactful we but more at higher notably the likely by we probably process that do think think that we processes, either build piece 'XX, get we 'XX or impact 'XX, think going it highway new We the to reauthorization answer believe we through likely decent will do. these that think to I we're will. be even to 'XX.

periods places. hiring One, during Now several the they with be, respect time hire to tighter other been had to of in would is the have to labor I need going ability when ability to contractors that say, was things: what meet because

to meet we to position this and up going believe contractors in need responsible an So in a be appropriate ways. amped are

million a say of we material a if and XXX-some we what ground. from was look ability on XXX is supply perspective, that business And year, have tons would you should materials. need tell what about to materials last it put the the -- can Importantly, material produced sold of have I I'd you at we tons

go Mike, back And what's essence to your hours is to there. goes to But to, capital having it. could ramp of have do well to to ability and without do think might that our longer question, state, We important some needed would have to So on we we CapEx. to up, not if to It's certainly we notable put the run the to in deep this I it. do present.

So I hope that helps.

Michael Dudas

have renewal a brand-new I was Certainly, bipartisan leading to what the whether it's That's gut Do there. back going quite leverage opportunity? Yes. is or operating to. or reconciliation be fast you feel

Ward Nye

wrong That's in we'll And that the be can a tell thing can some and respect. question. all I all only we probably us great

And roads of that going focused to way there. the find be think this think to administration do. bipartisan I do proposals lot and are a likely to some more I one a is out bridges highways, they're that it's than if they

make I and would think to a bipartisan more the in if I find towards a it you way they infrastructure can There's way agreement. way infrastructure. a define

then that I'm if focused Day. in the there's we'll there's this can't have into I they more to a the that other significant it and I bipartisan in think in that. looking Mark on come, to at house right they're way. I'm Senate the I think both more Memorial be that I And by I want think But Ups and reason play reconciliation marking find EPW now, there'll comes are methodology out markups think reason that, underway agreement more up, and betting if and T&I think that be as but on again, a

Operator

comes Our Roger question of Paribas. from next Exane Paul BNP

Your line is open.

Ward Nye

are there? you Paul,

Operator

please your handset. line make with phone Roger, isn't not, sure the speak muted, if Mr. and your you are

Paul Roger

Yes. start. Congratulations That was a scoop for that, again. Apologies Apologies the guys. on

Ward Nye

Paul. to you, voice. Thank Good your hear

Paul Roger

likewise. Yes,

So call. end conscious the into obviously come of will the

margin see creates up ask increase different Now the agenda. you some I'll we an in broadly agendas in recycled maybe then you all opportunities speak risks mean, clearly, environmental higher about could bit and of And that maybe track specifically, about take a of a I the going concerned the use green the Can and U.S. slightly at the for that aggregate you? product? at are expense

Ward Nye

say year, in up taking for clearly that Number is I part one of farms United of number Marietta which if is both we it were And we the last and ESG generation called at specifically can wind aware, Number to that relative are we to constructions meet QX in tonnage a things ESG. to and demonstrate two, we one. opportunities of things. in to you're construction think we through debate, internationally. I of tend participate criteria, resilient I historically new wind seeing that looking I power, having wind we're out Martin was one, -- States go do several over energy much right, division in been think place any had X of because there just will we dialogue expired. types that out had you're be well go going had our as that. million think as Look, an projects that important would as tax I not think seen in the form some because tons Midwest credits was the down tonnage Division

more are will. We So tax believe the energy, there credits think going we're we for we seeing that toward that. and opportunities wind

year into think underground. to degrees in, water vitally focus to think be are simply I and area I in our And be going of losing we people basis, a another that's likely are on relative sensitive year well. communities infrastructure that is products of that as to important think are particularly out to water

mind, not different federal more government so be to which respect that's cross markets mix rather stone recycled in by, is the the that, the element see. least liquid we essential I that's and hub up that. recycle valuable become the how recycle asphalt Keep to it's degree the essential concrete. the contractors that's or manufacturer ready green could that with The in At state It's things. to concrete asphalt going One, obviously, DOT’s. in to an asphalt. specifications stone component work of otherwise bitumen offer and Now and still and going mix to ASTM, but in in of in several recycle friends primary the much paving different or ubiquitous. in drawn at are our would

XX% that. to saving, wrap state it's that or XX%. see used most even on or we'll be with are can continue think we aggressive So DOT’s what But recycled asphalt

concrete replacement it we of will think while can most stone airport a certain base. in don't specification so In significant to heavy not And And still for meet that's aggregates. be clean degrees commercial have serve as crushed other a going highway a you use can equally, instances, or that for work.

Paul, aggregates, on call and respect process increase and is And to a let's even rebar thing have be a that green that there's increase for, that difficult complicated. cost-effective because that's utilizing for seen is It's this so in the to $XX be concrete, remember, even a oftentimes, crushing means when over product aggregates in $XX, a company substitute selling that it, average We're to the fact pricing very has still people product to recycled that steady ton. which a time. going important. other despite our can nice tends in quite are concrete, The

this you thought it and we question, it's time industry It's what a was. given is I for of to, me a have probably that we've a long great asked of you So a is here told something complicated. around lot view lot clock, time. but resilience build a an how to that it's the but

Paul Roger

mean, That's great. there's U.S. that sometimes I I perception companies like. think a

you've nice a story itself. got it's So good

Ward Nye

Well, much Paul, for thank you so that.

thing would that of how ESG our issues. approaching good other that put out The a gives we exactly you, I week Martin Marietta is last literally sustainability remind report overview

for much So on that. thank you so comment your

Ward Nye

that's understand end questions of our the I As today. it,

forward company all shareholder point strategic So to thank second and you is results our XXXX substantial proven today's substantial believe growth operating in and our just analysis for model long-term positioned few drive a our we sharing call. by short, is Supported review, is quarter We differentiated to joining in value. beyond. XXXX Marietta what and business do earnings to Martin create I'll at look In months. this superbly poised

please As for your Take any care. Marietta stay you Martin safe Thank available and questions. continued always, time your follow-up Goodbye. for support and healthy. of stay we're

Operator

call. conference for today's concludes Thank This you participating.

You may now disconnect.

Martin Marietta Materials (MLM) 4 May 212021 Q1 Earnings call transcript