MLM - Earnings call transcript Q4 2021 | Martin Marietta Materials, Inc.

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Operator

Good morning, ladies and gentlemen. And welcome to Martin Marietta's Fourth Quarter and Full Year 2021 Earnings Conference Call. All participants are now in a listen-only 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. the to turn host, now will call your over Ms. I of Martin Marietta's Osberg, Investor Vice Suzanne President Relations. may you Suzanne, begin.

Suzanne Osberg

XXXX me to other with Good or Exchange morning. from and information that and Vice any which statements, release Fourth filings forward-looking to are Investor results. Year President Marietta's United you today's Chief subject to Call. supplemental our and It's States my in to Like publicly Jim connection XXXX available by portfolio Financial update materially. Securities and pleasure Quarter website financial and information, no new the in to webcast Executive is during Officer and section and statements Nickolas, public Nye, results, Chief on Securities differ operating are Ward defined future We Martin today as welcome We’ve include otherwise. own future of to undertake on or and Martin whether may uncertainties Earnings legal summarizes both the available forward-looking required obligation, Please resulting this made Chairman earnings With Senior developments, discussion efforts Full cause Today's other legally events, Commission’s Marietta financial except that or and businesses, performance. future actual Laws risks contained optimization our our refer disclaimers website. could Officer. revise as results

and for operations. continuing all purposes For are of clarity operating results today financial discussed the

Please with SEC today's and Nye website. the highlights as measures over our Ward. question-and-answer on results trends available and limit comparable supplemental XXXX and in of follow. will to quarter will expectations. session with full are reconciled and appendix earnings Ward non-GAAP XXXX A review to the which will defined Jim Nickolas also filings fourth after question. now the to participation performance. GAAP to market year one In well begin financial addition, information the our as will then will discussion I operating call call directly measures your the Ward are Q&A our a our most discuss turn

Ward Nye

foundation This And you, plan year no for exception diligent of with joining has from known results our been as strategic Marietta’s competitors. and our of disciplined to execution teleconference. combined excellence. you analysis today's planning our Martin Suzanne. operating Thank otherwise be as to of impressive and success all differentiating long-term the thank underscore functional our us continue importance review SOAR the XXXX strategic was continues

strategic XXth year priorities financial Our our consecutive industry team and and and safety, record earnings commitment steadfast history. Among shareholders. in growth of performance most our services product Martin in accomplishments, gross in delivering track per our Marietta's our extend year safest XXXX, to to This marked achieved we share. consolidated our the for leading year adjusted and adjusted EBITDA enabled Marietta of diluted adjusted Martin increases revenues, profitable profit, proven

delivering establishing we build with beyond. demand operational underlying financial to supported on in a geographic sustainable, continue and focus these in by them, attractive SOAR offerings value on transactions existing We completing also product XXXX markets, than acquisitions. made billion $X These initiatives, and enhancing progress more among and our our XXXX coast-to-coast formidable will a footprint achievements expanded significant and successfully on robust success new long-term

California part services years weather in increase by growth, as and our the EBITDA few period in a And a SOAR we briefly takeaways the and provides XX% quarter on XXXX through the notable mild discussing West fourth M&A of our performance. Martin continually the XX.X% and full we setting Consistent in operations. X, robust in aided new momentum to construction the largest California finish of regions Lehigh ahead. which and season received XX-month platform of West and in product revenues the and ways business results, adjusted asset closing based priorities, expressions continued Hanson record end, and and efforts. divestitures. portfolio finally, October that Hanson's look year. optimize optimization swaps mega achieved capping-off three year valuable the nation's highlight will provided concrete growth a in fourth increase acquisition, of financial Lehigh for in Before we We record products completed the in expansion for quarter, extending interest our growing shipments with acquisition portfolio serve To Marietta continued of a the the from activity cement Region with a our to XXXX platforms Arizona I'll following a and Pricing strong

anticipate for As plans alternatives currently evaluating as on these during our the providing regarding focus clarity of mix for first product XXXX. we're we for enhance and to value these We our half the business have our classified more assets shareholders, these of assets held-for-sale. operations

marking centers. tenured footprint, world first exceeding year levels and more levels. XXXX nearly double of who $X.XX product or I'm housing tones increased business our Marietta’s and the foundation growth, and end X% high time that embrace of safely safety rate achieving growth sets I'm our strong year-over-year with new our to financial noted infrastructure now and and year acquired earlier, solid longstanding Martin the financial Organic share metrics, I in above is X% XXX strong thoughtful business investment million the XXX. class gains. line of our to of the XX% S&P building history. Marietta’s company great rate proud to guardian guidance I'm established than gains year-over-year our incredibly shipments investors execution Martin continued XXXX following XXXX let's strengthen our aggregate Acquired provided materials in non-recurring Operating our world earnings rate XX% a for a -COVID that especially and with XXXX, XXXX year shareholder full volume success. excluding data and pre total for SOAR warehouses As for total the Martin original of last and each Marietta products for increased growth services performance. to material operations base entry billion. the of angel results half day. by an excluding price culture fuel increased with With Adjusted Organic diluted full grateful revenues and tons. every consecutive incidents XX% growth average excess profit safety the higher class $X.X rewarding lower reported $X.X a achieved increased The newly X.X to consecutive records additional both year-over-year realized some per XX% XXth incident we employees in fifth of a across we to gross for the single-family in year price that experienced contributed by adjusted to demand the and XX% selling X% Adjusted increased the new in also the wide pleased note Even geographic of operations. billion. time million XX% offset each driven second price overview, our return performance of aggregates report includes reportable of in reduction billion total more X% the non-recurring and XXXX. or turn increases of sales earnings X shipments X.XX that with grew $XX.XX EBITDA year-over-year operating partially

price otherwise prior attractive, commercially Importantly, announced to by in remain and fundamentals strong all increases than and anticipate this inflationary we respond positioned confidence to XXXX. very growth. to market demand underpinned being divisions more contributed offset support Aggregates and overall customer pricing headwinds well

million year a activity pricing record supported Our and grew by following large shipments recovering the Texas the energy pricing our downstream producer for cement incremental customers. tons, business projects, to X% grew modestly in largest multiple sector from increases cement as pull-through Texas. during Cement new interim establishing X

operations cement announced and benefit to XXXX demand positioned continue diversified well per customer ton. supported healthy of by Our and are increase backlogs tight from price our $XX April to supply

traditionally call over the disruptions fourth shipments businesses, overcome a supply review healthy results full downstream to activity months. and from hindered asphalt challenges asphalt that declines turn X%. Turning our increased year and with Jim. liquidity. Jim pricing conclude construction Colorado the the XX% to Colorado summer paving Organic solid productive concrete to and asphalt during shipment liquid was volume our to demand ready-mix reflecting Despite organic weather quarter business now pricing targeted environment, of financial grew I'll unable modestly. our and discussion XXXX Texas our improvement improved

Jim Nickolas

Ward good Thank and everyone. you, morning

have as profits been operations. the from the with Ward or forward income These relates as profits on our in earnings California and we shown held-for-sale discontinued continuing from these alternatives are earnings from not along earnings statement. assets strategic they As sheet. included are XXXX And reported assets, California terminals of cement assets mentioned, operations it guidance. the balance parcels land several and generate operations our revenues Accordingly, as ready-mix either are the to plants, related distribution on classified evaluating the

materials Specialties is on of notwithstanding million record operations, energy profitability, revenues basis. almost For continuing our headwinds and $XX XXXX contributed and both an nearly the with higher which compared Magnesia one-third building businesses our to organic

acquired $XX value margin records inventory. from diesel established billion was as part of accounting. pipeline included aggregates gross the a XX.X% fair profit. Product and revenues impact of gross and higher Our selling marked-up for There costs negative acquisition

adjusted profitability acquisition Texas. the of the related impact production XX XX.X% incremental from modestly point the Gross gross February cement overcome and costs was storm decline to the shift in deep when not inefficiencies basis per second product enough improved versus excluding freeze prior the accounting. half was year. Improve impact of Excluding aggregates in acquisition year ton margin a profit

Ready-mix gross As year cash at XX.X% Product by profit Marietta in and decline driven fourth history, higher liquid line Adjusted point and Product improvement since services quarter generation returning a and provide efficiency. despite product magnesia-based while our company's support responsibly and for raw products to was offset The $XXX in increased million and for though cost grow with paving throughout and gross XX% diesel. goal billion by costs to for and also flow framework expenditures, gains value resulted energy rating XX.X%. Martin driven for for a and the increased demand investment cash energy product points long-term priorities gross top shortage. X% asphalt disruptions Magnesia our margin basis points to extraction. profile. operational preserving strongest net doubled XX sustainably higher costs of continues consistently gross asphalt in XXXX demand chemicals Increased business pricing deploy prior product should capital from to of basis capital financial XXXX margin to expected our and even margin the which of XX.X% gross contract levels cobalt chemicals flat $X.XX pressured flexibility record for business with XX% shipment material, SOAR relatively summertime success. working cement balance $XXX decreased largely credit compared are grade a to increased remain proven prices, used XXXX. products high in materials acquisitions a concrete standing capital services ended XXX products costs allocation and to for long enhancing profitability. raw capital with declined and Colorado and revenues margins. shareholders our as to million Specialties growth. from Cobalt basis and result, X.X% maintenance higher margin of materials has achieved raw XXX revenues capital an operating

to November, at into we million XXXX, capacity capital our project aggregates quarry in invested our bolt-on Dallas/Fort reducing loading quarry This addition the in expansion those $XXX also flagship of attractive In project In we and $X.X customers for over market. deploy Worth to Bridgeport completed capacity production platform a the acquisitions business. throughput X.X cycle tons our billion and million adding our times. annual fast growing of increases at

prioritize drive large to high XXXX. continue return to in projects will expansion capital We

share August. responsibly. in $XXX We returned most million announced sustainable growing at meaningful nearly profitably we announcement have the dividend our to also while same authorization time shareholders, reflecting billion a XXXX, of business as recent in repurchase through and Since combination of February well shareholders returned to increase dividends our and repurchases, $X as

our over practice XXXX as increased ratio Our of quarter. of outlook. debt ratio X.X With West discuss in net to debt-to-EBITDA past fourth with an to the be XXXX. acquisition times that, financed of leverage Consistent back times Ward following Hanson expect by the we turn call acquisition, year-end Lehigh to XX I'll our debt December the reflecting reducing X.X

Ward Nye

Thanks, Jim. momentum We're excited underlying and capitalize sustainable as on fundamentals for our favorable demand on secular trends. success long-term and we and Marietta’s opportunities about market Martin build XXXX in beyond,

first to private shipment and the recent increased are multi-year and time activity most accelerate, public industry's For construction construction supporting shipments for in pricing since acceleration peak our XXXX attractive materials. both poised

age pricing As we our and supply ability strategy. as this embark products of has underpinned on what aggregates. these the Martin golden locally that we view needed by capacity Marietta to

continue runway in will long a introduction since enacted manner of Carolina, and This recently surface now We transportation awaited bridges, Martin billion System that our Law and the value infrastructure in provide strong volume. funding hard to roads, infrastructure Florida, a other State new multi-year key California, budgets in the over so with Jobs emphasizes Department legislation reauthorization, of Georgia, for Transportation growth five-year do Infrastructure in Highway Federal bipartisan North states investment in along plus in new The a contains Texas, Colorado, the for demand. with action most infrastructure Act XXXX. Interstate is nation's projects. infrastructure significant of $XXX Marietta The

once and growth creation economic job investment in transportation a this in While networks stimulates America's generation immediately.

demand. to State to transportation sustainable result impact approved in demand and above period $X accounting total, in in pronounced state, and of favorably XXXX, nation's of Department over of transportation these $X efforts time are expect more promote generating billion estimated in will XX% late healthy become initiatives our to we XXXX. This our and will improve Transportation state law aging to Texas Boarders generate repair measures extended also ballot product to benefits November These are state tangibly expect an transportation this estimated funding and one-time billion state We an of new of local ongoing results and initiatives and begin measures. legislation governments commitment over and XXXX revenue local budgets with naturally in growth infrastructure. prior this top and additional demonstrate measures approved for [Boarders] levels. of lettings local In the product both recurring with

our DLTs from in dollars increased perspective put well projects the equipped to for both number advance work and top backlogs. Importantly, resource their transportation and to states financial growing are of

company intensive We historical National follows XXXX higher this the XXXX infrastructure non-residential in Association total expect to our single-family our housing construction for Residential shipments. organic The aggregates enhanced average development. increased levels. reshoring of and e-commerce inflect markets infrastructure to pre-pandemic stability from to typically States. XX% construction [San centers, return work retail industrial of chain use XXXX volume demand XX% should construction evolving to and drive Non-residential and XX% normalize for remains and is aggregates to warehouses, shipments Notably, Homebuilders benefit our investment accounted we it growth XXXX XX-year accounted pricing and of X to garnered new supply the to for become as Aggregates housing shipments. end become XXXX summary, more Antonio] environment of provide than effective continue that population to to communities. ancillary to poised more of organic trends reference, infrastructure for robust, of a residential shipments Martin be levels closer of record accounted complexities the footprint drive two shortages from in robust heavy throughout investment de-urbanization. shipments. United commercial for to market Annual to single-family favorable to in manufacturing to market data starts and an driver material we of in increases underpinned accelerated for in is In the strategy, labor XXXX delivery expanding a be yet dynamics XX% despite to intensive a volume or single-family the longer needs XXXX housing, XXXX significant Aggregates support. residential to organic employment price expect which three are of XX% already expect aggregates than particularly forecast and market and contractor shortages, aggregates year shipments pricing in when X to value to Marietta. undergo aggregates positions conditions, to April increase challenges construction factoring organic market logistics anticipated of Single-Family leading another X% coast-to-coast multi-family Marietta’s given times non-residential Martin X%. continue otherwise suburban growth Organic Housing have single-family by from X% aggregate impact demand and times is to January labor is X% in benefit and

disciplined cement, gross with Specialties expect and While inflationary Combined our and remain, for in results control. supported XXXX, by we businesses, and margins contributions acceleration cost expand acquired upstream Magnesia full-year pressures a pricing to downstream operations. from

continuing guidance safety, adjusted of consolidated of we're for consistently held-for-sale. our our long-term $X.XXX growing to assets classified million. financial expect demand a executed as and Martin setting EBITDA We XXXX billion operational conclude environment $X.XXX strategic confident our Marietta’s reiterate, the performance businesses And proud excludes by operations supported record prospects. XXXX We're and our to priorities. To extremely in

XXXX attention instructions, we'll growth strong We and committed and safety, remains commercial Operator and as our our attractive now built delivering the employee SOAR to best beyond. durable health excellence, team execution safest, questions. our we of value operational forward momentum your addressing most the and aggregate and for and sustainable turn and business provide XXXX company. to public slug the continuing shareholders Our performing to will look superior our in practices initiatives required

Operator

roster. Q&A Thank yourself And additional you. necessary please compile while one One a the for queue [Operator if to get the in one. question. back reminder, Instructions]. And limit we as moment

comes Our first Stephens. from at question Trey Grooms

open. Your line is

Trey Grooms

morning, good everyone. Hey,

Ward Nye

Good morning Trey.

Trey Grooms

about here. first Ward efforts ask to optimization your wanted off I portfolio

you you thinking the at looking you businesses alternatives you're business and on these any are for and could maybe impact ready-mix. the around share that with that strategic can that that kind strategic about cement color out? reasoning behind evaluating us How any of California You're for color moving

Ward Nye

for try. to question. you Happy the Thank

If region, we'll what asphalt we're [indiscernible] we're we to ready-mix is Arizona California you and what think refer there, in will done what to we about XX now to in have going we're locations going our Pacific look like and have aggregate as have Arizona. the about, and with business talking

what and yardage tons as yards, be I marketplace, that's like, look importantly, be X.X that tonnage or around of asphalt. to million at to take from tons go XX.X we back going perspective, million cubic going X of stone in a think it's a look that's going million about cubic and run to

If you about business, think this say, cement And that we slug us that have heard in our back but to we've is aggregate Texas. business have spoken you've the a an we way long strategic Trey, company. do

I way we've cement the your Texas up the well. strategic think spoken fits extraordinarily

Hanson parties Lehigh in received this of from One for identify as bought we'd type dialogue an the anticipate on indicated, the year. to others slug for the more of what perspective, those we of we and people, you we here inquiries were our direction. we to we interested after owe we to half that the that the is indicated the But again, And aggregate engage on in prepared I to going part obviously we business different closed first in it having of perspective, cement a remarks, our in from the that that business From owner. in we like were businesses. things shareholders I've look when at if particular transaction, did best determine number of

California in well us ability to think I much more state so think thing we of do is now give long-term very aggregate other to The that think a is which the we important trend to is that the in a reiterate is grow. from side we There position platform And California. very on us attractive business. going that's in have M&A to obviously, ahead

So Trey I hope that's helpful.

Trey Grooms

Yes, absolutely.

in us driver's you've the business aggregates four there California? particularly led, around months, in obviously. give commercial there or for aggregates But And the around three now you're efforts, keeping seat you the so the business aggregates being been any can maybe update that

Ward Nye

in I'm about to looking a be to. if pricing. ton at Trey, prices Martin that lower No, tended marketplace, overall we're Marietta’s they aggregate generally, happy than selling $X.XX

So prices if we business that look below Minnesota, those so in for Marietta bought were at pillar Martin California. prices for we the in when

getting we're that directly we customer important more very pricing with been about is that line. and market, commercially intentional enterprise a have very And by going done out increases I in in attractive. be ASP Trey. the received price actually January we're been we've on X% not So in from in we've indicated disappointed to California X. And outperform increases X% favorably very thus in would the far think didn't That's what of is across What that up does the California, seeing effective certainly focused make January We've increases trends feedback have from the fact, this January that. quite are if what seen year.

the months commercial just think state quite of undertakings a matter I So ownership that in in we've even that had well. actually as with gone

Trey Grooms

Great. Thanks questions. care. for Ward. my Thanks Take taking

Ward Nye

too Trey. You

Operator

with Thomson Kathryn from comes question next Thomson Research Our Group.

is line open. Your

Kathryn Thomson

in for thank XX’. question the to color end market my a some a projects others that impact And today. we Gave given is Hi, that in on end just on some I'd have those saw but you focus of started can the improvement one to more see on because have half the pricing great general, uncertainly bit one little longer you commercial in on back term was markets, scaling, like that taking too. and are

question up able pricing of but all seeing How you. as that in you're of with it's did [ups] get need market is, kind to the to also now that, a really So commercial what does and price impacts of that impact higher? how stronger and a the strong, are in your and for didn't commercial has Thank in too? you particular terms little standpoint just from on And trends? bit geographic in Texas a been that that place pricing future

Ward Nye

Thank bet, You Kathryn. you.

talking see when we that that Day Single-Family sustainable the had Investor year year is a we Part of would of in we go about particular, the If several state XXXX what we we grow. So SOAR of non-res million Housing our continued about believe ago, to back portion were light over future. Analyst to a things. start

forecast the second assess only looked history and and how So in volumes now volumes and ‘XX or into than what ‘XX let's were. year year ’XX. like back was, where our was step were ‘XX more infrastructure that non-res

housing has that looking as Austin was along $XX build more to rail. the you the North by Samsung plant I-XX where imagine you we're Texas, Austin, So happened that better that solid, Instruments intensive. light impressive, billion non-res we last in at strong. in What then end-use seeing as we say to what be single going we came point, we throughout led good. Texas it state mile tends fact, getting see continues Dallas/Fort to Central with be year, which seeing looking a meaning February, is noted, to come high It's Carter and indicate largest But we thought way, were to the behind hard in to very and in Texas To speed incredibly overall aggregates it too. what And a last I'm that centers we're and on is outlined is the semiconductor Texas to state like and heavy if have. non-res Worth in there continued your to said that the incredibly non-res that look there delivery

we pretty to So non-res that most there really will of projects be on notable that continue are think state. number a in

we're we're seeing that now at that The is obviously degree on going Phillips, Chevron [it’s some some other while into think it a Grande see sidelines jobs the Rio near] of the has looking at at right thing LNG year. we and been LNG at anticipated would might we this same that be time for go--

point, to Texas. So in that's just your

is been rigs, seeing rig other XXX notable happening But down. rig mean clearly up counts actually was I the count end counts, XXX even of what's rig at the with have at year-over-year. January, thing The that's

respect we're Colorado, well. Georgia, energy and as continue matter whether activity other to we that more too And and hospitality warehousing seeing sectors, Florida, come states, back remarks also which activity Apple then High a has to into of area, we're very obviously, Toyota the come and bit been and actually Google some what and seeing with a North recent Point called in and Carolina Carolina in see If Greensboro it been prepared on this Carolina, inflect. we absolutely on North to we're And of it's activity then center in so there Carolina, be at that So North to sign continues seeing market, and activity good us, look laggard. warehousing seeing quite refreshing. really domestic data slowing. five there's a But retail Atlanta here's that And type is we're to beginning top distribution. is and North and shows seeing no has of

have tend part particulars relatively the concrete envelopes. we're so discussed it those To almost concrete stone your many of become they priced selling of clean attractive, So really aggregates durable. into is we've heavy respects Kathryn operations. to what's before and non-res continues be intensive you're these in point, distributions at high think I looking changed like is And be non-res we feel to side

question pricing. just again, to it's higher could clean non-res what with that So the of not but to stone we your price. And clean part trending was a at continue take your believe happening be relative look stone, do projects what's this I will non-res if to more do going

outlook So very near-term, it to I up think Kathryn. a medium-term attractive of adds probably all

Kathryn Thomson

much. very you Thank

Ward Nye

you. Thank

Operator

with Our Stanley Stifel. Elliott from next question comes

open. is Your line

Stanley Elliott

But you the ago about question. Lots residential standpoint. where Thank for good piggyback talked being Hi, it you and taking affordability actually X-plus that? made for Or in Can around are underbuilt you million underbuilt a the what everyone. I morning second now call on from a just marketplace you a comment that your concerns X you years? how or et were investor balancing of rate starts given increases, are all we seeing cetera.

Ward Nye

in that's point the a our much that's not so reasons of up because where made we've And in that business, we're to our just that such good but be been business. building building think housing. in focused Stanley I one so there's still needs SOAR,

where what's you to going. think happening and So about with populations need they're

conditions attractive view us One, in of several a our So underbuilt spot. dynamics, outlined, nice together the really just with things. that population you puts

some million in here's around X will Housing 'XX, are think are thinking we in are rates single look here where around that X.X right, 'XX, But worth numbers that at X.X the we compelling. So that levels. million to for remembering: seasonally came it if are 'XX, in numbers things and I one, XXXX, was time we around think million; be to X.X million. about the starts. million in get worth Starts X.X Single-Family math adjusted find X.X in I 'XX, By back XXXX starts, these If

from the So we is XX will and people. that have going to been more away have U.S. million years, XX for

we them where are California. start Florida states people in are add if and those think for orders Martin Now about and think and Georgia, now we and impact in that people those states are or going where about Texas Carolina, North about thinking Marietta you the Colorado being

-- United in state. people we're we at about the States. the add to at or the XX% to If at by So we're the in Carolina people that's If X looking a Texas, like at Carolina, North we're people looking overall but but million now our North state XX% XX.X XX XXXX. million state, million looking look at of the of we look look if sales, population it's we that of population,

you're homes if rates, rising the people seeing that low with trends, States homes. who we're these seeing of you're at a United and parts population still and afford historically looking again, need rate, interest So into the people move simply can even

helps but is because, it So sustainable previous numbers going this not us the in we we think to don't go building more continues that back should. to we as than and times that non-res on X single-family is back the just X a it very you intensive aggregates sustainable the know, think we to we Stanley. going But was XXXX, think where what XXXX, the home do, up don't question, really think to is think to housing level, that's very attractive level multi-family, on

way going saying for our state our while. like durable of we be to a it's lot is housing leading a our feel So data, for of very business but in

Stanley Elliott

much. so Prefect. Thanks luck. best of And

Ward Nye

Thanks Stanley.

Operator

Pettinari Our Anthony comes from next question Citigroup. with

is line open. Your

Anthony Pettinari

morning. Good

Ward Nye

Anthony. morning, Good

Anthony Pettinari

growth 'XX. 'XX You're And call there we guiding should any is -- Lehigh part And kind that of Tiller? long year-over-year rough term. $XXX view any of I'm how roughly major that up CapEx about projects as just on in are kind out of CapEx guide? the you'd and think million primarily CapEx

Jim Nickolas

before next It's the Good Jim. It's large assets as on project is is in Lehigh The morning. that We yes. the not got is mostly outlined main -- -- what capacity predominantly. to organic it melon. it’s projects expansion this year a answer we've to XXXX Yes, going in refer we've is XXXX. business. Hanson large that The

So that's the main one.

outlook high especially that for expect a very on in one, cement given return that have that We the to seeing pricing we're market.

sales of business purposes, high think XXXX. I roughly that's in total, project think, Otherwise, a us. and we're So far for I not about time, modeling I going as how too this think think, very off it think X% I generally for over to be that, I about is in returning

Anthony Pettinari

turn over. helpful. That’s it I’ll very Okay.

Ward Nye

Anthony. Thanks,

Operator

Our next question Capital. from Loop comes with Garik Shmois

line Your open. is

Garik Shmois

for that with thought forward given XXXX that as a that the as move speak of of the of lack with expected? be funding maybe having demand guide? year Thanks moving confidence infrastructure are full confidence I passage was the speak reports specifically associated to to the with level just to Are in anticipating to just continue the bill, forward to this for of more infrastructure of any Great. just with you some out the you that of budget. your in headwinds federal year and could delays they're you going wondering if me broadly level on. federal And projects the going D.C.

Ward Nye

Thanks about so the We Garik. pretty much good feel for question, that.

the couple things the a new law build of think now. to One, about. So is

So deal. go the process to appropriations its has normal through

it year Number found As look right at we comfortably early is of go now. in next the I two, if they're common number negotiating the you at if that's that, latest which for appropriations think and government. fiscal go the ahead the ever ground puts back history, back May, and look one, it process,

was into is so to the I $XXX Trust important Highway billion other is The lockbox. that it's remember thing Fund, deposited and think

to going money that there. is So we be know

you So if think through good pretty gives a foundation. it, a you lens, I from of that think it federal perspective

would account: that's where take then DOTs simply when I of think And thirdly, got things a way the leg themselves funding significant last and couple into different COVID other still then that you is into the find its this pivot say you of store, one, are. going to year. I the system

fairly North Texas, North we're that's we ensuring that Martin if billion FY that state FY backyard at Similarly, most it's budget going in highest annual returned we're billion. for looking an it our biennium $X.X in almost of X about on billion recently DOTs In of of increase of going We matter in or a with I've think up those think believe a been through think And story Carolina, that's and with in budget. Georgia, in infrastructure what heavily look in that $XX on If money if $XX the about we XX%. state box, $X seeing Carolina, total at what are outlined we again, that's XX-year $XXX that's billion, 'XX North lettings providing lettings Colorado, to $X.X DOTs the combination And again, we're we to expected minings navigable to spending have with of passed XXXX, and California what consistent a X, investing in through In Florida we levels. relative an we're at were with money to to it's just be X for to Marietta, we're Garik. be are to going million going billion a be Carolina, where Georgia, like top looking [California’s] expected If basis. X.X% black 'XX. directly $XX here the the stream SBX passed looking and Colorado, Texas, COVID again, with years. states exceed infrastructure Carolina, to billion and Florida, 'XX. there the here in we in FY highways look bill, around is transportation with that appropriations and funding the North process that California. So going streets looking historic the well, to in recently about FY 'XX is be, they And

Garik Shmois

appreciate. I enough. Great. help That’s

Ward Nye

Garik. Thank you,

Operator

comes Stanley. next Courtney Our question with Yakavonis from Morgan

Your line is open.

Courtney Yakavonis

guys. guidance EBITDA that the maybe And Can about your also, -- performing. just believe between sales sorry, help growth remaining would that have good growing are And assets talk or to in I are if Hi, the being back I than Lehigh bit and again? go that us those pricing now are held-for-sale? guidance. I aggregates assets question. expected the those business. -- with then Thanks are how into what can be guess you just for to versus are little business the is incorporated the if volume faster growth we you Lehigh a associated the overall split morning, sales just understand can But the

overall? how if that's the performing could us you So think just business Thanks. to help about relative

Ward Nye

Courtney, for Happy you the thank question. too.

price if we've wholeheartedly indicated to they that selling at your you. part I we're there, And Pacific the So looking I'm way, business as aggregate think first. And is we're the at and question going heritage than what California I'm seeing Martin to by indicated that. prices looking overall I on, X%. of tend with would last frankly, early agree to be the take the be in I board, to is what indicating outperform expect lower ASP if increases you Marietta. ton California expect disappointed should across we should And double-digit of is And not a that. low $X.XX We've increases, X% about said

look again, think the to we've your with business make, the we there's not that is about tons it. totally seen consistent numbers thinking. that's XX like we're If to a So an going there of And certainly would going I like million way what here's contribution be we in you EBITDA that January. group, year We've I to aggregates-led January in again, encourage while with think stone. think of indicated around

is if EBITDA California We asphalt. Arizona, we EBITDA be around ready-mix from business you in will will be think hot XX% aggregates and to contribution, will have Arizona. and XX% going business in about And from of be will in that a mix ready-mix from XX% around about and have the contribution

the take put business announced we you when in in And go out. we transaction, and historically cement back with been those pies look So if ready-mix California, at for together together you have what simply at we mix showing a and some would business meant because about and that California how that Courtney, seeing And by talking hot much cement was way, that cement. it. aggregates upstream and upstream and the ready-mix time, you're point, aggregates and of at both what portion in were now

EBITDA are Now Courtney, that underway intend California. an state. lexicon that a building independent activity M&A in have that already one, that's that's we're importantly, business, that what the with keep use in more think But about what in of I They talking state. even we potential is looking a business in from players nearly to there. lot There's we're is which the XX% number to aggregates of typically being we aggregates-led

it right snapshot And a what trying from what so I'm now. will an And now right it is to even was, give side of become we believe, is heavier. perspective, aggregate you it what

Courtney Yakavonis

Thanks. how SG&A could Okay. of deal result should -- thinking quantify about now how is EBITDA And acquisition? much the from be discontinued And could is that items? just just much either other And the comment contribution of any maybe also there's synergies that in or you on we maybe if you line a as just that then if operations?

Ward Nye

to think efforts that commercial we've we are transaction will the we're really broken process EBITDA, in that it out that. synergies Relative Since I and from carve-out, come of bring which will we're what doing And was operationally, not evident. commercially. to actually the it be a doing already the given what

we look transaction go some the each if at Tiller information the with you that about Lehigh Hanson back the think time to those and gave of at relative in spoke and because connection we other. I

about with talk would arrangements not of but and sellers we into some specificity. those that buyers I that, some we think certainly you can greater probably had with back of some numbers

public think So likely cetera, clever be But excellence offices, more where being and you because I'm synergies that. into not at moving overall, time. back a carve-out, operational commercial apologize you're company, up those you, the end to on intending I et I all. buying a not with over and can again, not it's But are.

Courtney Yakavonis

just Great. lastly, helpful. on then And Okay. That's volume the guidance.

expectations think any X% environment. made demand just for us think some of And growth, issues constraints we're half back is And comments I about you're shortages chain the still you're the to market? in how much the in year? whether seeing your of supply can some baking seeing of volume due labor you and being the you in that that improvement some to the help X% by that constrained

Ward Nye

of There's year. going back to be the half improvement. It in the be will

basis right Worth a Courtney, I seeing than we've market. example for mid-single example, past, is see use on in trucks. we a think good to could higher, almost the digits in that Dallas/Fort because the perspective, the now in simply probably the volume of a able been we're lack daily from of

can I of trucks how in chain be right people So particular right moving now, It's their for or one is can rail now. a primarily, supply supply at bringing on logistics. Overall, efficient it's not look how product. if us labor think chains quickly issue we

oriented. is Our domestically supply so chain itself

And equally, adequate putting the with on that. with struggled haven't not ground. product we're We struggling

and we're meet can demand. to not we factored But And they for our second for way. that degree of is a to half some in. we've that do we probably that will this position challenge we logistics. us. assure say, have believe to in for largest same be from guidance not the you. have very in time, relative likely any our our year. we value continue we you, the customers have getting At to We do I that of can built tell in the we're I we be Courtney, going a that of year, fair we do So that single low pricing indicated transportation there on the ease We products. think would the thing other But in that can think prepare in have the should given do the increases believe to this price cost midyear done, it we that believe we be letters will And

easing not upside to, And would told in do. tell think logistic respects, do we've you that customers many in in relative So potentially midyears, grown. I X, and when half numbers, that's candidly, I our there's to for some you I very prepare be

Courtney Yakavonis

Great. Thank you.

Ward Nye

Thank you, Courtney.

Operator

[Operator Research. Michael Vertical with is Dudas question Instructions] Our next from

is line Your open.

Michael Dudas

morning Good gentlemen.

Ward Nye

Good morning.

Michael Dudas

certainly you out the expecting what or materials? And any XXXX? guidance energy put And we year? topic generally, inflation. morning getting on you're customers is how Ward, levers it worried? throughout a do you is move is -- thoughts for see your when other were hot your what the from of the aggressive And as There How relative for XXXX, to is pretty angle this CPI. there print internally? easing Are that

Ward Nye

that thank for said, The push to to upstream M&R. in What Mike, we materials perspective, to we short respect remarks from though over better what we're my to did to we're you this prepared and seeing And him much what in going very to walk I the see the at the to back expect do labor with business our last particular, want you turn Jim. than through diesel. is year. goes answer, least year margins seeing question. relative I'm

let me areas some the you seeing at give let least business. to through we're the Jim going what discrete that's walk of you So in punchline. But

Jim Nickolas

Sure. Yes.

services is X%. probably So the labor component around

XX%; repairs of other -- -- probably we we from The ground. that. own no obviously, maintenance, to as But and well. sell of to component main the we our X% stone, which is pie XX% There's what X% elements, that slice supplies, the the source and cost that is are smaller,

well. with inflationary going help that's the So to environment as

up, total going are of areas. but costs portion those So our smaller than cogs pie a other it's

in of piece, the again, Ward ways the thinking was for to going margins, aggregate it. said the are one, XXXX. those on be this so growing about Diesel particular But is year headwind overall. a it rough And as we're

around We're hoping right to. it We but like million built if in XXXX. It expect costs not it that diesel of now, is we modify XXXX. to looks in need be a We've enough. headwind additional in $XX we'll that's

Operator

you. Thank

Revich Our Sachs. with next is question Jerry from Goldman

line Your is open.

Jerry Revich

Yes, hi. Good morning everyone.

Ward Nye

Jerry. morning Good

Jerry Revich

talking some I were XXXX based infrastructure terms they wonder what's increases were pricing recovering -- specifically customers. to when able if that we're your inflation you in backlog longer-term were the past of you get folks through awarded them of over we're above And months? of significant work that looks the to been in out like about XXXX? backlogs X terms awarded longer-term front the with your in translated tracking, you the we of in lettings associated could levels to to work, about that's terms length where putting Has on talk in your price on the been XXXX in of in to

Ward Nye

Fair enough, Jerry.

So keep been mind, historically, on have least last work, even work over price an building at longer-term in increases would we the basis. in decade, on longer-term on annual

even we than try way prior find you'll XX% Group year. around in it's is more the it those backlog, that's versus anticipate XX% aggregates, about being to if answer XX% prior price The what is do of the them it, So was now where and the ahead that's And the at in year is past. been short up in we're it breaking West remember the Group, looking to the backlog greater year. yes. down we're granularly, in future important is of up of versus in have East prior I'm at around what some and overall looking right backlog, customer increases If

that heartened Stone is also a pure highest by particularly have the as because that aggregates margins I'm company. the have and which group. to Group, the East in the they backlogs So recall, in tends largest you'll business

as business it exceedingly QX. business chemicals to gas relative clearly a for portion was on portion a some thing Obviously, think to of that is of cost had looking going It natural adding doing well. business is is as degree of the they've few what record I well. headwinds the steel The and worth their as in across backlogs what's got we're well, going other at Specialties, to that Jerry, MAG

again, of a aggregates XX% business, when And taking customer XX.X%. margin that to business so That bit backlogs attention, in in little are it's are margins down tends solid to interesting And records. business a are they give in it's and to me that always year. midyear people's but had ahead And expect in well. pricing do up do and prior we we We expect the to to on about past, but get as midyears the they've again, on that talking nicely the those year, customers we're this attracted. midyear protect be

Jerry Revich

all Yes. bottomed If only business was XX.X% Thanks. at margins.

Ward Nye

bet, You Jerry.

Operator

comes Our of Bank from Michael next with question Feniger America.

open. is line Your

Michael Feniger

my taking for Thanks guys. questions. Hi, Yes.

you the business Just elevated still aggregate, there? basis. energy expansion year-over-year prices margin of are mean, mentioned kind the you us in cadence now just understand on I upstream help can right the diesel, a in

the the up get cadence a we thinking how how down should Is about through about the little in kind be year? are reflecting bit XXXX? think So year? Just should -- half, half just in we first the it we of second to full it

Ward Nye

Michael, answer. address short that happy to

So of I as delighted stuff. build are think that you this all, you part throughout the see to going But first the have welcome to We're of call. year. to a

pieces it's you Jim you to thank be of And loaded. go through back-end being it some to So we me for and least let ask at and more here. think talk why going

Jim? So

Jim Nickolas

Sure.

don't So Michael, quarterly give out guidance. we

it. those of effective larger to this are increases going that last year, price more than is for two stick loaded, One, were profit-wise, Back-end than are sort with I'm about year largely true, we've historically really. seen ways of they thinking So our and somatic reasons, ever one.

really from hasn't the year the ticker this increases. quarter price first still So got accelerating

half slightly diesel in than the year. that more the they will year the So you that is half first be of are of delayed. mentioned, in pronounced effect the Two, those the headwinds second

So gross those main two the versus be patterns. seeing reasons historical will we're profits are back-end weighted

Operator

mispronounced Adam I question , next if Adam. from I’m comes Davis. from Our Thalhimer Thompson sorry,

Adam Thalhimer

good. morning, guys. you. are You Good Thank

Ward Nye

Good morning.

Adam Thalhimer

volume I've gotten end this this -- low outlook downside upside, to you if maybe for any comment morning, particularly Ward, the maybe guidance, of could risk year? on the the volume it's on pushback around

Ward Nye

talking exactly last overall to February, the of And overall, on we we're If X% keep XX%. obviously, mind, end organic. finished think the X% high if on is it, we in X% total. out that's the we came we're If What at And too, year right? to we're looking X% you said back where that. X%. to the to Adam, And looking

we a we the spec demand? So few almost would States? is, say Yes. short dialogue need is meet was The answer I Can yes. to in we Can we the back what I that think ago, moments United having the Yes. do I anywhere can the meet requirements?

snapshot you and what's what's can of can If with probably volume. a good going give happen transportation tell logistics, relative to to I going me to you happen

that the what to So have But easing of think going may we're parties we issues some of that certainly happening that to third is think to to be higher to going end I the see relative issue make be and if It's we're right if be to not an to degree that trending you slower, demand. towards and this down. ability not of logistically Frankly, about an are it's that. issue move and our it's demand ability meet their going the what's of going to

Adam Thalhimer

Okay. Thank you.

Ward Nye

You bet.

Operator

Tanners Timna with from is Wolfe question next Research. Our

open. line is Your

Timna Tanners

Yes, doing? hello How everyone. are

Ward Nye

voice. Great. [indiscernible] your hear

Timna Tanners

particular, Hey, really little more a bit comments, Likewise. the buybacks, just capital in much yet. you but we wanted haven't of seen mentioned to allocation explore

about -- opportunity a grow further those that? of you terms are well Thanks timing wanted opportunities? you think of goal, more. acquisitions, about assume leverage think of that's looking you ask So before a just I'm of question at a wondering to deploying little flagging what debt more leverage And just a you obviously, the about particular you to in just bit the And availability. how any I I you lot. But deploy keep

Ward Nye

Well, kick again, going to over to Jim. that I'm

his comments, ratio by be in prepared our at right now, as looking the the going basically at you told to Jim it what of back of we're part times year. looking X.X As debt-to-EBITDA end to we're the business,

you is tell, business quickly. So that a as this can very de-levers

haven't is, capital about time. be Timna, the But If to to short us. through but they you overall been over our coming Jim answer to you those, continues think Jim? walk changed that's one ask priorities, I'd M&A

Jim Nickolas

Yes.

So if pass on through an our we on today wouldn't came leverage. it based acquisition

We have deleverage. still after opportunity that ability the to and go

point. we this back shares, our M&A year, is expect us contemplated to That net forecasted do -- capital increasing it's we with this at. in even buyback, times. And that's mentioned, even that So that's a share X.X will table not mind, the we've year-end end with a on with And our the cards, buy our in in X.X to leverage and take either those et approach net roadblock dividend, of where to off stated cetera, whether on so hopefully year by a all times get things, of at even all for That's as leverage balanced August. basis. with we

hopefully answers So that your question.

Timna Tanners

Okay. Thank you.

Ward Nye

Thank you, Timna.

Operator

David from MacGregor Research. Our with next Longbow question comes

Your line open. is

David MacGregor

about the more this Hi, you're in the good do you just to growth backlog, guidance maybe the on morning about to everyone. I just about reflects East volume and the just -- West? for guess profitability X%? to wanted would question talk ask expect how build east of pretty -- X% but a in answering X% to limited. previous to versus to then is question And XXXX. with about the west my It the Can X% that you volume just seems just on respect thinking be cement I like versus you're upside

close would those running full I You're X to guess. capacity plants now, pretty

is profitability cement. cost it think in terms on this should and of at of all in the is there Or takes stage? about we profitability, for just puts terms So else price something XXXX

Ward Nye

morning to question. Good you. thanks for David, the

the downturn harder on years, has took of several West. in couple really way some recovered the over fall in last about a respects One, the the the the country think we a and the So Southwest East than things. if

as more So now Virginia. now recovery vodantly recovering as we're we've and seen a well as up well. markets Atlanta into attractive Carolinas right in Maryland the like And very seeing

heritage we I'm looking are in snap respects east I versus likely in at many in the we're more thinking So East if West. am the broadly, see than to a west back

to comforted activity good With respect I'm in that the at cement fact East. an mean us. adding to before. we're we're by we're be I seeing for by we're year Obviously, internally now. you're that about I in Jim attractive our to many is again, several occurred think in California the necessarily right what look, guess out respects doing going project capital that tons I But market to capacity question, efficiencies right, your million X Texas last One, February. things. FM the X not last were spoke with helped that decrease tapped

recall, may of slowed oversized weather to sales, slowdown really period of San you as extended David, in caused that That only for time you're Dallas in was year. not not think Cleveland, that going an accustomed So don't had actually last accustomed to an know down that's and they We degree M&R. Antonio, but there to I and the recur. it type production of they're

So in pricing, relative is multiple increases in we looking we're cement. that year to ton to a do now, from price saw what a to we're we come we $XX simply going Right last believe increase there Again, going efficiencies that. at think April. at be are If happen looking overall

more be of other Obviously, of is I Texas. But that the heading is part saw a is so was is that a quarter West Central market, factor as DFW swing we to David, very in well. some healthy the to thing material can going think of where a be bit Texas. what there,

are in sounds percentages huge. granted, really big tonnages this Now concept

changes, XXX% we So more percentages material saw if to West we're head looking at Texas. quarter

of a to that's of Now versus as mean? an does quarter what matter? cement But quarter. at price XX,XXX look on at $XXX. average West practical the average went in ton that Is around number there XX,XXX previous those, selling the Texas selling total tons all-in price $XXX versus a tons in a we

going more into The yes state? So deep seeing in anticipate Do amounts, anticipate pricing last material, answer as And we I Texas yes. yes. The across than environment but say that we operation not answer better Texas we the David. a is year? things. do several more well, year-over-year? massive is would we to Do West had answer is anticipate freeze, better year Absent the another a

So that I helps. hope

Operator

right. All

Karimi Davidson. our with Moving D.A. question last to Zane from

is open. line Your

Zane Karimi

guys. morning good Hey,

Ward Nye

Zane. Hi,

Zane Karimi

then Lehigh earlier, Courtney's extension labor And you're Thanks the or the on sort the regions Any or are for in the into in on so challenges to you constraints now California region? the sort of supply was better far. challenges new from and I that experiencing you're the an just experienced color but in transaction. dive new get And any question new deficiencies in that wanted Arizona these that particular, picture of with spots? a

Ward Nye

is, of That's be good the we've to great there a Martin had enthusiastic delighted highly And a that's news Marietta. look, part team question, Zane.

we that both that safety I the lost good reason a that's so of company's despite we The I history. total the is of on us, One fact M&A outlined early in on that us, that point. is years cultural our achieved and importance that, so important. out really with to the appreciate is had start really of things the time one who world-class of starting And and metrics have we that when colleagues case largest to

brought something have though, clearly think think it efforts. to we optimization and I that portfolio the back I that to goes

in We are, foremost, business. first and aggregates

that, would who in many this and is that assuring new mega we're that our respects. what important and the in So us going vital the California tell And being of to superb operationally alpha absolutely understand is business is and you so colleagues we be what is I for are.

a you imagine, improvements. from would getting saying, timing can as get isn't improvements as Now immediate commercial perspective, times operational as at you

really very and actually, in So to see happy We in ahead relative operational done And because but that long. things bringing have what that near, over place up it us levels? are nice near-term, Martin of and of this be to there's business, otherwise well. commercial the medium these put has we news we not that do. that activity Marietta with we to work can Do the happy part timing we to I we see training is with? worked relative We're sites think good the place, that's what the put

grow to relationships we that the but piece, to that need are know in so realistic is people important, other who business that not our and and The it's state line that in it. a we who make business want in much in we sure And are aggregates we challenge, the it's business, foremost, are in grow our state. because first want and to of state

again, big there. surprises no So

much I happening importantly, refinements far. areas what that make so difference and thought thought we that we a been we can could the think make some very have

for I've question, been thank hope and helpful. that response So is that I saying you

Zane Karimi

Yes. you. Thank much, sir. Very

Ward Nye

bet. You

Ward Nye

like end the for looks today. of it the that's questions Well,

priorities, and forward So earnings it XXXX quarter value long-standing to Underpinned thank future. We capital Martin call. in driving growth confident just a saw to our strategy few our first today's you allocation shareholder results continue sustainable superior all sharing disciplined Marietta's our look months. to and execution we're proven prospects for in joining sustainable by as our of we a

for time available Thank safe Martin well. stay your stay are and for follow-up any we always, of Please Marietta. questions. continued As you and support

Operator

for in thank and program. ladies gentlemen, that, with today's participating And you we

Have a day. disconnect. now wonderful may You

Martin Marietta Materials (MLM) 10 Feb 222021 Q4 Earnings call transcript