MLM - Earnings call transcript Q1 2022 | Martin Marietta Materials, Inc.

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Operator

Good morning and welcome to Martin Marietta's first-quarter 2022 earnings conference call. All participants are now in a listen-only mode. A Q&A session will follow the company 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

welcome It's Earnings Martin my morning. you Call. pleasure XXXX Good Quarter to to First Marietta 's

cause Securities Martin Joining defined Chief and operating Financial and Today's discussion Nye, future for Jim me refer forward-looking earnings financial available forward-looking Senior own public States except that Officer. C. statements to trends. section whether developments, during on could businesses, webcast new Securities events, uncertainties our are and resulting to include and other Officer, in as both QX on Nickolas, update Supplemental risks Commission's release website, and Executive the available filings United to and Chairman future President disclaimers which from Vice made obligation Please may future the results results today results materially. in website. contained and Marietta are with differ by in this Chief Howard revise subject connection required our Like is legal no to financial publicly our We actual other that performance. undertake XXXX today's legally any as Laws Investors statements, information, We've the otherwise. Exchange of or summarizes or Information

reminder, As and are operating all operations. financial for a results discussed continuing today

over results our will in our and call remarks. call defined your A SEC now full-year the I directly a After to available most our market the today's be the measures our also Q&A comparable limit guidance, in announcements, the to will question. trends. participation question-and-answer provide financial filings non-GAAP operating Jim of optimization concluding then as Nickolas Information, with capital and will Ward Supplemental to to turn on session reconcile Please well brief the are Ward. earnings Ward and discussion which, measure addition, portfolio follow. one allocation. some appendix updated review are as and will first-quarter In and website. with GAAP our I'll performance,

C. Howard Nye

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

We this Public outstanding. construction to multi-year for and and financial are start our expand beyond. peak operational, excited in for most success company's for set shipment since year. predictable private We're for first concurrently this are in growth time and demand are to And opportunities activity acceleration products. off and a value prospects Marietta's and about XXXX attractive recent creation supporting safety our XXXX, pricing the Martin industry's

these of fundamentals. of continued and for We're operating Will sustainable disciplined market and allow review analysis or that notable dynamics Beyond industry underlying our coast-to-coast SOAR. the footprint. responsible of confident execution benefits our growth strategic and

we today's operations this distinction are Martin once new As includes release, guardian to Marietta an safety relatively company-wide. performance again metrics That's as important exceeded culture. highlighted in world-class angel that

reduced We drive improvement. growth outpaced also planned pricing increased all versus prior-year profitability quarter. revenues, Cost acquisitions growth, the This gains achieved helped a shipment XXXX ahead broadly in in upstream and XX% expected. new first-quarter which revenue first-quarter more increases. Organic this record for April however, consolidated resulting inflation, top-line of was total margins

articulated In second two-fold. the versus reasons February to XXXX profit historical fact, guidance we're of anticipated patterns. we increased our in weighted half contributions and The the provided regarding shift

mostly of benefit First, throughout the largest from Marietta's become the price on builds the and some which are which Xst, Martin our history April increases, effective annual recent year.

these offset which It's operational and long recent increases, benefits realized energy remember in cost environment year prices relatively to yet including beyond that execution more disciplined the the more in price anticipated and upstream excellence year inflation we're headwinds, of costs, comparable rapid of in be commercial that months. What than pricing inflation. materials, unexpected a though, experienced our earlier important achieved supports escalation previous other for periods our the since was endure historically, pronounced were energy was inflation headlines. inflationary Second, constructive annual inflationary Nonetheless, and benign after initiatives to the to confident moderate. and be will pressures

favorable mid-year Martin our Our and and which teams in strategy are of than our we near- outlook from further aggressive actively priorities. to initially what more is cycle. on accepted to were Confidence SOAR increasingly well-positioned few we be advising months is a an widely is and value benefit customers pricing our extended will in and pricing by ago. disciplined of volume actions, XXXX and over scope long-term expected execute anticipate be magnitude execution considering Longer-term, pricing underpinned the more Marietta

portfolio. During and our SLED We optimize of April concrete completed Central businesses Texas the enhance privately-owned on the nation's Colorado to quarter, the concrete largest X. divestiture we and to aggregate producer our ready-mix continue

in an to into cement ready-mix entered plants recently plant, sell our distribution California agreement Company. CalPortland also to XX We concrete Redding terminals, and cement related

enhance investments shareholder the profile. transaction complete XXXX. margin these advance our to priorities, sales to portfolio durability these We strengthened facilitating proceeds intend actions and through business from expect in cycles the half this external, to We economic allocation second to and our optimization our of further the both Collectively, higher-return, organic value. enhance long-standing of growth capital deploy

updated first-quarter our the rest of results for let's XXXX. your set discussing relative level guidance, Before to

the quarter lower newly confidence price Rather, a frequency, increases price trend. believe exceeding better and takeaway year's it's of margin realization the we discussed, XXXX margins were margin our short, the Coast cost compression reasons represent In than the West pricing us of offset divested dynamic inflationary full-year key the beginning aggregates the headwinds. not just for the does contributions acquired and than expected of will expected from we believe profits scale, the efficacy compression While our for earnings that XXXX. those the of end is last company, to and for operations provide forecast first the

EBITDA adjusted our guidance of midpoint billion. we've full-year result, As $X.XX reiterated a

that build during continues pricing construction we revisit As Accordingly, pricing is upside our probable. anticipate second quarter. we'll the guidance season, after momentum to full-year spring further the

to increased tons. higher-priced Turning the now and and and season. an Acquired to Underpinned our X.X%, first-quarter aggregate over the the X%, increase value onset on growing X pricing increased our Infrastructure of organic additional at operations a largest All shipments several haul organic to from improving distribution shipments X.X% contributed divisions X.X% million in by reflecting years. or businesses, we've for basis demand public long growth. increased volume operating Encouragingly, pricing percentage mix strategy, construction performance upstream adjusted yards. contributed private this seen aggregates reflected shipments downstream

pricing tight and and February Organic X%. off ready-mix demand. demand additional Shipments priced, higher-priced X% exceeded Texas as pricing is a taken and January multiple the $XX ton concrete robust continue flat of ton attractive. XX% With surcharges. cement the increased effective remained grew July tons portable Organic cement following product from from decreased asphalt hindered grew snowfall and specialty X outlook price products. supply fuel round asphalt pricing shipments X% and to largest our concrete significant effective the and million setting increase in improved the record. a in As despite implementation shipments producer actions increase of relatively first-quarter projects. typically per of construction cycle Texas, the in pricing we increases XX% Cement benefit and new $XX second large Colorado for extremely announced resurgence higher X April an Organic per XXXX activity. Organic X, recently completion and several

will the end-use average demand Marietta beyond total markets trends XX% Enhanced end-use and our for infrastructure fundamentals the aggregate first quarter, strong to that future. remain across historical three of of foreseeable closer confident shipments. Looking and growth investments we drive Martin drive primary XX-year shipments our favorable should pricing attractive market aggregates-intensive this to for

with become development is XX follows, to -pandemic rising space office residential and following manufacturing funded example, shipments as COVID of continues residential of relief enhance aggregates or and retail are programs, investment that aggregate office from X-to-XX-month years, continue of reference in housing IIJA, the budgets XXXX facilities strong typically Marietta trends On state IIJA XXXX. throughout Commercial Expectations the in $XX and available benefit with further pushing expected of bold next as housing through of and the July levels XXXX our historically more to increased over which in Charlotte, XXXX lettings supply said annual on benefits prior construction inflationary That line to Infrastructure, interest returning lag. XX% began advance intensive to aggregates Sunbelt demand the remain providing allocation Investment strength intervening by backlog an The of more Jobs projects. Carolina. to it's of more a more DOTs square of visibility shipments. added fiscal are the has Increased late area. organic pronounced our pressures, period. will significant single-family feet single-family expect construction, of with centers, accounted current under first-quarter people with currently levels for be multitude in Non-residential shift accruing By million increased Department first-quarter over the begin X.X dollars Martin DOT majority estimated as data to for to the and traditional revenue construction early sources, of than years. the new Act United in billion in For in warehouses, which driver their pre XXXX we rates chains states paradigm levels. of XX% a certainty starts reassuring construction few infrastructure well funding for million DOT top than market the and X, markets outlook work North from construction. preferences drove With way as become States. States Transportation well decade and nicely United full above aid to evidenced remains in despite and consumer our that

foreseeable Martin Given our new destination the expect metropolitan benefit home in from attractive areas, we construction for Marietta footprint company's to future. disproportionately

in aggregates nearly three construction times reminder, As than homes of subdivisions a intensive is construction. multi-family more single-family

the light financial infrastructure. of to Jim. Aggregates community build our call and turn first-quarter for results further, to of Given to over the liquidity, shipments. our more now accounted out organic and specifically, XX% market first-quarter discuss residential I'll Jim non-residential

Jim Nickolas

Ward. everyone. Thank you, good morning, And

increase pricing product from was not billion, margin costs services, quarter. depletion, costs internal increased diesel, XX% and year's declined For shipment basis The XXX in building XX.X% record Product profit last prior of offset our Aggregate’s million. And to production for product freight, other continuing materials gross $X.X% of growth gross of amortization. business operations. points. enough and $XXX product depreciation, a posted revenues

benefiting cement relatively Ward demand from basis margin expanded gross product As Cement points favorable growing our supply. on Texas earlier, comparison. business tight indicated a XXX XX.X% is and to

of maintenance inefficiencies production were materials the incremental the prior by in As impacted million increase year's Partially us, next planned higher offsetting outages, and nearly this storm-related energy killed versus costs we deep-freeze. and the to three in maintenance this from for a behind occurred XXXX addition a in favorability first reminder, that first-quarter was negatively planned Texas $X and comparisons raw Almost quarters now other quarter. half favorable With the expect year. costs. costs

accurately use both to are recently. or ship that by [Indiscernible] XXX expect not PLC of begin We now Department relies the Texas was cement producing until Portland-limestone during XXX,XXX year. Transportation report clinker carbon roughly tons PLC this approved We and intends limestone of for substitution our to PLC which on a of pleased the cement quarter. plants

production to annual of XX% type X% addition the versus the to cement emissions, in and in capacity. X increase creates production lower Importantly, an PLC cement CO_X X traditional

incremental did X.X% gross product to materials, concrete declined as production. no capital costs XXX margin labor, points ramp diesel. gains and for Importantly, not PLC spending we as required fully higher up offset Ready-mixed pricing is basis our

April first-quarter seasonal results early in with Texas reminder, operations in geographies, minimal relevant the trends of the Colorado on were X. divested asphalt and our paving and the a months included As Central occurs that activity Consistent financial year.

in growth, season. In April the acquired profile. given demand energy We profit spring and asphalt In basis first raw credit for on execution chemicals rating start million our product grow market's manner for global cost fact, products. achieved margin SOAR to the loss remain of deploy capital XX.X%. a during asphalt investment-grade in business and the business the which Despite we line were to decreased our decline quarter. due product product for top-line quarter to with materials, X% first-quarter gross first facilities, in higher supplies responsibly focused that inactive a our XXXX, discipline resulting XXX of financial and $XX -based Magnesia Specialties construction expectations, to gross million, by flexibility record X.X% points in Minnesota based and that our gross revenues the an a [Indiscernible] increase posted $XX preserves late Magnesia driven

we use maintaining returning divestitures As share both allocation while and cash which plan Ward Balance capital investments in proceeds and the are earlier, program a to meaningful priorities, Sheet. value-enhancing our advance sustainable on indicated focused dividend, to organic strong repurchase a announced for long-standing through shareholders recently acquisitions, our to prudent

expect We capital of million million high-return to focus continue spending full-year $XXX $XXX we on increasing drive to growing projects, prioritize and to capital margin expansion. sales, as efficiency

our per target $XX shares to buybacks, payments the of of continue stock common dividend both we million while a year. of returned ratio of average through by we nearly end quarter, share, XXX,XXX and shareholders anticipate the X-X.X the repurchased times leverage share to price at to $XXX During return we

debt net times to was that, the turn back X.X I'll ratio With of Ward. to as call EBITDA XXst. Our March

C. Howard Nye

Thanks, Jim. geographic well-positioned year XXXX and Infrastructure be To Martin to strong footprint. our Marietta. we for tailwinds, capitalize across to conclude, expect on record differentiated private coast-to-coast another demand We're

we attractive and for growth pricing ahead, products. drive expect multiyear this demand Looking environment shipment increasing to our

attention operational turn safest, company. committed health remains and the the questions. -- best-performing If store team durable now build safety. the world's maintain and most execution provide excellence. will our the employee initiatives Sustainable and instructions, business practices, your we Commercial of addressing will public and aggregates and XX Our of Operator lead required our as to to XXXX

Operator

interest ask the that question we to of one that queue. to please get the [Operator can time, you we Instructions]. yourself In you. limit everyone Thank so in

comes with question first Our Stephens, is from your Trey open. Grooms line

Trey Grooms

good Hey Jim morning. Morning Ward, Suzanne. and

C. Howard Nye

That's right.

Trey Grooms

earlier predictable far. mentioned the having year you to thus a Ward, start So,

point on into go If into pricing operations the and little this you the you there then what the playing gives you and then maybe could with if the go divestitures, raise into this more higher acquired performance year, more to guidance that, color a could confidence. notwithstanding in what meant recently detail confidence on of at you are how

C. Howard Nye

happy I'm question. couple answer guess to, I Trey, of a to the things.

are right comfortably we now. plan of ahead actually First,

we we're a would us is sitting, actually part in where predictable not we're that's So what where of thought we're yet be. we because where ahead about whole, we think of not

to for think is first -- big Minnesota percentage lot first predictable from in March. February, Minnesota have As small volumes, tiller you we was know, small the percentages big January, I and and make didn't can what year first in numbers last not of so a quarter business base my the quarter. of can is down quarter a Obviously, going a Part asphalt for or you're put perspective the in quarter. never that's in

this we support, and some that the his thing other actually the maintenance accelerated of as Jim it well, in outlined on kilns Texas The in commentary year.

halfway So, through we're more we're that. than dollars, on through about or with have to going that halfway with dollars

see seeing what to a -- we're of was obviously, were in you're April. of price your did that other up I and up not had thing confidence Trey, think commercially the in our confidence We to gives take and important. seeing we've that. seen, actually I this guidance would April relative increases what to what we high in go point, inflation. degrees Obviously, guidance So, unless bit, both take in happening is We seeing a is on degree are we pricing. the those us think But

mid-year other in The as well. we're relative about respects, now, is some price increases I that seeing think different Trey, thing, right predictable is what to but

across footprint in X, the come thought. we've number where widespread we seen while. X, So, price more have at we're our a mid-year looking increases than much increases into April Number price that

are dollar price year about seeing $X a you not that a have about a from about this that, to recall, the what we're to ton today As relative talked seeing, on scope a talking did they on and last going depending etc. dollar targeted we more shift, other in widespread. we price. In This this Part when of mid-year also we're we're increases. going And of customers if product, product are is than considerably mid-year, market, that's exception a concerned we're year ton fundamental depending be year. to getting bit words, a the

acquired others. again, to to years. for mid come So of of July a back we're if of that give sense that a timing an again, the X. about your in X, X, X And It's talking us they're January to increases that's at you now, late effective California a be place increase we're looking But mean, least relative be attractive in at going at markets September to ton price the part looking versus to to somewhere mid-year it, most between we're double-digit this operations. $X to percentage we're going If goes and probably question as ASP. as represents looking a I July in right

So, where guidance you was sense that the hopefully the it gives confidence us gives of to in plan, here are areas at the in first predictable the but if that of Even X sense the saw that sit market products. you're QX, business investments a at increases is Texas, at very at a we've that the locations in comfortably looking a we we're of XX% July acquisitions, there we're heritage And about it, take at looking and [Indiscernible] and relative go up. it nice where customers if about and we despite what we're about to looking we the effect look the we're that price a to as gives made, across-the-board you increase that on inflation at in we're market. we're looking seeing fact that building ahead at quarter. Central to overall new candidly Still talking we

Trey Grooms

all the me sense That encouraging, especially and Yeah. for the on. on it Thanks color, Ward, front. makes very to pass I'll pricing

C. Howard Nye

Take Thanks Trey. care.

Operator

you. Thank

with Research, comes Thompson your question Kathryn line next Thompson from Our is open.

Kathryn Thompson

in today. perspective. more thank backlog Hi, a customer main which the my the like stopped taxes utilization on it's your like for from looking on taking end I'd effectively pretty and full little markets, to running question still availability, much like And and res TREXIMET, each on bit outlook that. focus products are you public? What has of a from short touching tight at non-res

demand how backlog. there's you see we're of and you. Thank have demand light to manage, also can what You going in a aggregate

C. Howard Nye

guess at the about to XX% to and then we year-over-year. I way backlog, if think several things. question, it up if gets Kathryn, we answer One, that's it, speak best just at important to aggregates, we're looking look about, customer the

a Equally, If basically record we're at we're has to us attractive right Specialties, Florida, here's out. very $XX it's that Texas, now. looking at attractive different the Colorado, Magnesia we high-class again, number. look or downstream our obviously, So at billion in TxDOT at uses, a years. backlogs have. if backlog to dilemma five the FYXX If looked The we cement we up at chemicals very, leading are sold now. the Carolina, very looking point, North as states. Texas, California, your highest looking look We're loadings end those But Georgia, in customer and the

saying up going way you it's it's Carolina, FYXX, are as and to for a obviously, where by infrastructure at it's North a 'XX. If good. higher it's XX Colorado bill my Kathryn, you billion is look any was they This up $X.X recently very and DOT, passed we're in up $X.X passed date looking be XX-year for of we're it budgets -- state in billion looking over If got where to tied that. with at XX% going number recall, budget,

there. ground meet to put the on Our is needs the to the ability customer's product

their What deal. in So we address a about that also taking for I us our taking built around We're important, we business. my are meeting building speak matters you driven of think great not have that comments seeing industry We're by is concerned where non-res. more are think is more I in lot office you've a where though, And And needs. place. is again, while [Indiscernible] to trying this place. a heard seeing

it's Samsung But what We So of in in now on see to looking whether looking to remarks if again, and in But markets Austin. to our at come projects. around to is see least markets, on retail population large, North at prepared we're continue seeing We're Charlotte gave and [Indiscernible] continue office relative comment up my conditions, the into reshoring, we and I attractive also Toyota us. north significant trying Carolina. at important. but commercial underdog part, of markets. you car that have inflow think manufacturing These side, very into to residential we in saying sorts I Vietnamese even we're close I'm end

rates back We're may XXX Marietta points. some Martin quarter. mortgage basis I over is different back and and the seeing move. years. degree no rates But between we single-family mortgages think some states, go past the of up that states, not four as This even not mortgage prior-year correlation see there's starts push fact as the look at in that, are versus

meet a our population inflows to Kathryn, as in what where and that you looks us through added or capacity stick tried but good. seeing customer response your recognize we we've is is What philosophy. in to keep capital states LNG over we've So, question, we And very look better. at the already in give valuable date and of the snapshot their needs. heavy and see same light increasing with volume a believe activity in the has south I've our we and we with to level priorities our efficiencies that, in position like side again, residential to it non-res Part in Texas, allocation on size. you is in done, we're we're heavy product needed on of very of. mind, state Infrastructure? And but going cycles value we're demands had relative quite know, a book At What we're to have just going ground time, in do to a position to high the

that going of I think all way the to coalesce. is

the we'll We well. will for needs, have product, enduring the our value we meet and create customer's as stakeholders

So, hope Kathryn, that helps. I

Kathryn Thompson

Thank much. is. Yes, you it very

C. Howard Nye

you. Thank

Operator

Thank you.

Our next from Stanley from question comes Elliott Stifel.

is line Your open.

Stanley Elliott

good everyone. environment a all know I the that dealing really get you good, historically into you Ward, could made are players bit to just you're players. Thank discussed face guys previous the a dig when to could you of morning, more with made smaller lot if investments some question. there. now? have that question. Hey, And little you taking that commercial for your I'm right into I'm a investments sense the the conditions on tie curious you tend larger regional outperform, of the pricing the comments, on trying

C. Howard Nye

Part Stanley, what to places to question. states at most were and for I hear positions commercially, your mean that we in California, today, you attractive Colorado, us leading revenue was well. these thank Texas happy go voice the very where Having those trends And as in and the North in we being Stanley, are. back, population listing being are important us I states powerful, are through that when think helps us. Georgia, is if a perspective, from be. is being Carolina, the us helping states we good to to helps in I Florida, where -- of look

tighter and circumstances investments and that. quotes is customers do this come the and in or up suppliers seeing some what of clearly at the end and Texas because the priorities ability does someplace to at we've unapologetic so we had I requirements to to first go back the we've volume that several about product, up that, Two, to we fill in that to over today the customers get think look philosophy. the and made, we're be you've did very transaction. not or is it things. heard Stanley. the say have dollar philosophy is North it for time, having markets our we're value it's those unable to orders One, instance go at long else, are Part meet a we're to that about on position And the need back I gone your Carolina, location, into it's if consistent we get and it again, in Colorado spent going allocation us times as whether that think back point, or first we best are we three about with right capital bring

internal making very going Our is of to to market Rocks the because also sure also keep iron. rocks at very but the and process meet make demands projects flex we're to in next best sites we on if demands, safe, were And destroy able dollar Big efficient, these spent want we change. well-funded, as

far, a do now so Stanley. so And expansion that we've hope in in, this that and been a great through position recession to that helps I through were

Stanley Elliott

and much so thanks of does, sure luck. best It

C. Howard Nye

you. Thank

Operator

Our Shmois next question comes from Garik with Loop Capital.

open. is line Your

Garik Shmois

Hi. Thanks for taking my question.

still the the second of year. through the we down the type help should guess, in the frame aggregates? and recovery of margins But about, given of maybe Would XQ price to of in gross putting the expect You how in April, we January be just I increases half mentioned that prior-year gross compared and to the period? your that expansion And guidance is margin aggregates you're margins. slope magnitude back-half-weighted for think

C. Howard Nye

Sure.

and can walk Let he turn that to that you me through place. Jim

Jim Nickolas

give quarterly As you know, we don't out guidance.

obviously with So, pronounced price with going the they history, remain we're The in on, They as I'll The inflation, into goes and in two greater we're the that if give to see fuel inflation that We're as you it of strokes. reduction broad-brush twofold, are base, for The We at be assuming acceleration elevated cost at. in be assuming a that's relatively in for prices. elements. guidance come X. year effect compounding longer purposes, increases purposes; it's not the mind, should levels. go the should may their for But is the what's see cascading, I QX think where oil you is in QX also remains appreciated the guidance don't energy moderate oil, don't QX. the a but reasons the line more the year. down.

that we've built in. So,

Now saw costs. that said, last year's increasing quarters corresponding

see on So, improvement year-over-year basis, there. a we'll

other than acquisitions, increase. a a higher element typical fixed is is in sales our pretty QX of much will that cost. That's the because percentage The not of meaningfully DD&A but

that be fixed QX QX, and element and helping expansion QX, QX, So QX in will and the relatively flat QX. margin

see we're back the margins get year that half record for in the Garik? your the back, or Does side aggregate the we'll those question, near on record answer So, to of reasons. going

Garik Shmois

Thank you very much

Operator

you. Thank

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

is open. line Your

Adam Thalhimer

increases. zero the in think do Hey, industry a to XXXX. due your will you a price or just And this What inflation high be structural this good question be, guys. ask on the you the in mid-year morning, I one-off is do wanted my to think would shift

C. Howard Nye

the got move think Well, said. we what are product you [Indiscernible] cycles go pricing, our the cycles? to want look that at have at very up if Do I've does can buy it aggregates always through you things that in I shown one that that special. you think a is it $XX you down profit. on two for into that over continue ton ability and even right you've thing now, spec your And There is things a look, put to and life is except pretty something know for I Adam. the think few has to durability time the of right ground

think attractive, you've that's environment demand I got stay attractive. slightly the that

build in you some I down think those more last we that be states a have with in of inflation, you or is our things together flat that either on something of layer marketplace in And it purposefully time, has do going -- think several that been could think specific in over mighty than for business. has the is been very certainly volume. a take demand when top some I instances years that profound where you attractive, to period I

So, single sitting, Martin my commercial from it this as the during where -- Adam, is Marietta. I'm moment most attractive CEO time of

looks this to it attractive a does. And mind, we obviously, meaningful as in going seen talk in to haven't we're anything period, about this year. from get So, input XX-year than I IIJA not next year. calendar feel 'XX that the keeping we'll in more more But closer

year going nothing very a of that next a aggregates we're a there's in be to attractive cycle that pricing You're we're seeing sense going period doesn't what to start that to for in give see me years.

Adam Thalhimer

Ward. you Thank

C. Howard Nye

Thank Adam. you,

Operator

comes with from Jefferies. question next [Indiscernible] Our

Your open. line is

Philip Edwards

I terms with the of in Ward, maybe infrastructure this lettings little line the point have guess guys, associated you built. Hey, sight at of more a

potentially of oil be pretty your potential these overall the of of year in us it's since going kind a first year That's is the in kicks right pretty loaded. while in Help backdrop. been little supply through. prices cadence be understand talked with front-end kind certainly a projects, that And demand gradual So, your kind it In meaningfully us of kind or next a are of coming more you think nature? of help helpful, that XXXXis it robust ramp that contribution and to now. about LNG ability an gonna

C. Howard Nye

And for I'm full. happy Thanks question. to the

is to aid That's of tons see can meet this we this in say last back - tons So, the relief see, in cadence, several XXXX. billion look, can put saying, we you up, ramp way going think were things. the go that think on or into we COVID the more what going since remember year. put I of $XX about please about X, of Number XX tons million call if we ground there's you're let's capacity million it flow going see you time then. XXXX, about in ground XXX as added, modestly XXX so ish and million over to One, back we year. be whatever would And back XXXX, required. my We've we over as

So, going the in cadence, to of back year. relative particularly I the to half be think helpful that's

year other vote about in The and billion November, that $X initiatives in or there last last by to were passed were about Texas new in from all approved that mind is keep itself. of thing X.X was

following billion. you We're to So, feeling we roll half way amount be you're XXXX. the Year and it be XX% rolls In 'XX. to around to going say going a what be going going considerable if say the here out, that's to bit $X $XX over would to We're this going so we're tends X, to so Year that's into start the I going feel of in we as years. of see to year, spot. about to of to would X XX% 'XX. then billion a feel IIJA. it bill start balance And think XX%, the portions of in about I again, highway that X, the at Typically, is to

the funds with to by to that's So, and likely of practical in that's to I it. are that going and 'XX. to if going we're and out think we're augmented we've roll to be approved 'XX, matter it's way a initiatives, going I the think what the be seen relief think really years 'XX, impacted at COVID together looking type voter Those right that 'XX, IIJA the see, remembering 'XX, is of be

So you that direction hopefully least on some at as percentages well. those gave

Philip Edwards

Anything on Thanks. side. LNG the

C. Howard Nye

be several sorry in about that recall, you One, seeing actually of tons I'm of required. there those what can seen stone the folds. we're job. on order jobs have several that. large Pass Right change generally So, Golden Look, about million side Texas That's that. a is we've field XX.X got projects that now, what south LNG are on as one combined we've

prices there. level, we're those fact processes or they're bids have a Grande, sorting whether we Chevron with is believe number The likely in out that where involved either are Rio it's there in or elevated continued Schneier actively the an see final and Arthur, We be. of activity are exactly that. at Phillips So, to to energy Port going going

also United States. sure The seeing the this United is I'm not surprised is across we're more other that wind States. across We're we're activity seeing more solar activity thing again, seeing the it to

activity least right So, different ramp see that now. area we likely product energy to continue two at are in is up. wind an to for Up going that looking will competency farms be

So, us with I think of aggregates are times. a end-use going between you potential attractive all to while a might believe. a pretty LNG, and sensitive otherwise That's be and for which than lot for of wind farms solar, more

Philip Edwards

times. exciting real Ward, you Thank

C. Howard Nye

Agreed. Phillip. Thanks,

Operator

Michael comes Our next open. from question Dudas is with Vertical Research, line your

C. Howard Nye

Michael, mute not don't you're not on you. or sure we We're hear if there.

Michael Dudas

Yes.

C. Howard Nye

you There are.

Michael Dudas

the way. got finger fat sorry I'm My that. about in

C. Howard Nye

It can happen.

Michael Dudas

on I your observations the what from you wonder West acquisitions you're morning. like Coast. could new further in Well, seeing if share some Good maybe out just

think through but that might ongoing, we they are studies. optimization immaterial Are that there are You've others portfolio any about assuming might that some any XXXX? organization we gone the see throughout is other, there more in

C. Howard Nye

to we ahead aspects successfully thought. we've what California, Lehigh the the and [Indiscernible] we substantial I volume, and And about EBITDA. that internal like look new again, X start way Let's we've and would've on We're they teammates These unlocked. process are on lines we being what on assets, first mean say We transaction, would growth with after we'd in believe one like. those about of for running by QX talked brought the way with January than earnings performing that's talking attractive product all expectations our at at have the in of done, fact people, increases businesses the that put all California. of think price, it's If or better looks in. I that, we on

ton got a I well. that's in mid-years gonna California. mentioned think coming $X we've as that also in that to marketplace be Again, around in

a seen seeing with we what when X, look X, as attractive there. mix of very much it to we're very has very and but Number best business bought mind to going But one business it's very acquisition business, in aggressive we hot aggregates a way we're for generations which QX, have in doesn't us to Department much we Tiller that good flow because pleased been in a wonderful budget. relative Marietta class it's cash that going again, has Keep be Minnesota in for to Transportation we a in Tiller conversion, and very of just It's come. Minnesota Number the do if to going think at well. it's be it. is what marketplace on. think So attractive business, not got that also what we've going has

been value-add, some been that come The it's sell and important there, have as other that that's a of excess to of that the properties thing is able we've business to very well. been us out nice

and sand reclaiming of there, that's very we're operations pads and lot So a attractive business commercial mining all-in-all it forward, and it attractive for or us. as gravel a very turning we're property going been into

that disappointment. in tell last been So, that that there's in year respect I would a has major the any you we did transactions nothing been

we long imagine, focused part optimization, all we've exceeded we we've Relative they've that will we look that the to tell are I with In we're the is said if aggregates it's are been of we led an would the candidly, very company. that what have portfolio have, same what would and At time, portfolio fact, you pleased we believe. we at the what very on as you have.

enormous the what shifts you that at the for breakdown initial Arizona player. portfolio, in the business done, up for look we think wouldn't and like what of Arizona you'll contributions ready-mix to know And face the margin is look improvement important player in that we of business. to and aggregates the business business look we've well. that fairly the Texas is a we built that's the need Central portfolio markets attractive like have looking markets very I the have line sale that if largest an some aggregates to and the differently you'll largest if as you So, made business we've Obviously, before player we have went at in see on the it on be be largest Different we but in relative ready-mix also we're that Texas, what a portion way I ready-mix points Equally, of today, the lead we've the see in is. markets market. looking that are changes transact also product integrated that portfolio with we're and And XXX don't. What with Colorado about and very, ready-mix and it think about the done what some it [Indiscernible] looked notably. if transaction, after that vertically that we obviously, with you you basis in

Redding relative the we trying is where what years our to what [Indiscernible]. pending done right And had are. already that the now additive with of Northern we a what sale have but XX period It's value to parts. moving we preferred of what parts, So, think California, And and products in in of very portfolios, lot with nearly be it CalPortland built purposeful we've we and over done California. have how of ready-mix we've we relative believe now moving built then all a the we in it's to the part transaction

MichaelDudas

you. Excellent work. Thank

C. Howard Nye

so you Mark. much. Thank

Operator

next with Our question Hughes comes Truist. from Keith

Your line is open.

Keith Hughes

you sell how could Thanks, couple sales the of on specific price describe big cement in of that do accepted the feel you well a Nick, it higher could things just than and the be, a markets? for customer a traditional a have PLC on earlier Texas at that, question business how is

C. Howard Nye

Look, thanks for on the that. question

about or the doesn't a process of different what approving sell of It Part higher. departments different is have happening it it anything markedly approving of X. is So, of things. Keith, for that's with gone couple timelines. on transportation it, not either

helps perspective, perspective, incremental type -- It with are lower they components raw puts cement a it so in capacity. and to Jim Texas. type time and material up very that we're perspective and short outlined cement, So, an The to one it from it performs answer in us, less series is cement you attractive. and well, producer in allowed position And that frankly, just very from capacity does carbon tight a you know, very clinker input being it now can it certainly you costs similar as two by over end intensive the actually it's TxDOT. use that cost a as of is Texas Keith, environmental

what that more, PLC. that that market we believe combining we is that that will see timing some to So, obviously attractive right helpful in volume meaning efficiency other components with because significant get We'll in efficiencies increasing obviously now. add, a will very trifecta which we perspective, might business. very very, help, marketplace those bring seeing FMX, a That's a the of from from pricing this

Keith Hughes

Okay Thank great. you.

C. Howard Nye

Thank you, Keith.

Operator

question comes with Research. Tanners Wolfe Timna next from Our

line open. Your is

Timna Tanners

morning. good Yeah, hey, Thanks.

C. Howard Nye

Timna. Hi

Timna Tanners

what shortage, of bit from more. shortage been to Wanted and to just capacity shortage little little be or little there be just true thoughts just imports a just logistic logistics more discussion it's there's a of that how if or a explore that'll And Mexico great. a incremental needs plays about your this the wanted alleviates is bit I if If is cement about bit your that, a perspective labor this or out. get -- to if and

C. Howard Nye

Timna, Two, look thank mean it's seen this from in I has fact tight I Marietta's imported at while. it's market be really -- that XX-XX%. has you cement To comptroller, for the that If imported going little share been the the tied to a that reports see for tight. we go out as is well, marketplace. point, cement question to real. Texas a around well. its conversation having, and you share. XX% We in is and it's the around bit. your around see It's I will Historically, again, is, think think And what Martin move stay going this to move is you overtime usually that come are I and

XX%. the over numbers have seen, recent it I think modestly I most has

good what's make that's that to actually happen to pretty sense a you we speak having gives that as fed. So is of sure market the

that percentages same When to roads. Texas, I about you're York, you're the what in Timna that think if are and at concrete riding going infrastructure because they We of it, in are downstream the mentioned way. you New we always in part one that non-residential the riding it's At that be higher continue nature. structural you're of I think has have. looking that to to we're of marketplace, the when if asphalt Texas on time, X too, been day part relatively underway think Texas markets is happens intensive riding reason be the you're of roads concrete tend in projects in in on riding

that over is before, efficiencies a The Texas now. with the having That's But it the Summit back in at energy that we're keep marketplace, it's yes. time, I answer we is where has PLC X? So, not state. attractive think two of several might that [Indiscernible] something Do have think regulatorily it's be expensive, market challenging. sector add quite last actually particularly we that same number West been been here's mentioned I capacity and to in capacity the and some byproduct number been more seeing very And helps think one some yes. mind pricing going right FMS yes. come years, in equally adding to what as a tight Are to is answer I

is it helps So while, manufacturer that's and tight tight, think I my it's not Timna. a of it's likely way a labor tight, I hope so is way it's not to saying that tied, just that for

Timna Tanners

demand around energy between of and the supply, that the So, a is and there's calm, corner still lot not fair. infrastructure on more even new there's,

C. Howard Nye

It feels good a place be. like to Texas is

I right. think that's

Timna Tanners

Thank Okay. you.

C. Howard Nye

Thank you, Timna.

Operator

Our next Research. question comes from with David Longbow MacGregor,

open. is line Your

David Macgregor

morning. Right seen morning, you've the the best Good and everyone, now, Yes. commercially good It's aggregates the are seen Ward, moment it's XX your encouraging you've characterization nice years. most to hear market. the best of

that there's escalators if But phase phasing. been maybe respect the different to your that would to mid-year in to different over respect certainly, an now with mid-year hadn't price benefit. thinking ability there I respect important think this year. there back increases was that I'm increases to compounding just and says there's with anything in this just backlog a we year always had a so increases, my But benefits I those the second-half subsequent mid-year wondering the of years, I'm year price price guess anything limited how business price this that lot. maybe Is with question past? in

C. Howard Nye

of be growing next clearly the volume I Yeah, into half think in to is going is going year and back be year. growing to the

two So, that the seen X. ASP we're already QX we've I'll it putting in on major you increases increases that things, price had say about a think David, if April

thinking in next [Indiscernible] this as year. year's think that way, about we mid-years mid-term, Our about start

in customers as that because on general in always you'll recognize you you've already which protecting put them. price general exceptions a As rules to a to you volume general committed increase you're XX% rule and rule know, they're of it, a mid-year about the year as

might going extent year, more Now, quickly recognize more. they're this through you to product the that

the amount I think but to thing it's would primary commercial seen that my in commentary, them we're a say width, will higher while. seen attractive I simply I mid-years, we've be of David, than market more for It's the a CEO. see fact, just and relative at I've in that the most we them. place to in as think that of breadth going dollars

been that early seeing [Indiscernible]. As a $X we're I [Indiscernible] indicated And dollar I time had ton, good I've of type product and ton could long years that on, be think anywhere from market depending FX. since a and it's you to on a

David Macgregor

[Indiscernible]

C. Howard Nye

David. much, so Thanks

Operator

Thank you question from Stanley. we Yakavonis, have Morgan Courtney with a

open. Your is line

Courtney Yakavonis

morning, question. Good Thanks for guys. the

Obviously, similarly come that you And the just then rates down. freight and site, exciting seeing to in understand supply pricing constraints. if the call at [Indiscernible] chain we're see wondering. if your believe early that is the constraints Just Obviously, to I change in still improvement seeing been it Can to job point. any tight market this us on help softness? very volume but due you are any some see starting largely guidance, logistic to this we've is there's of outlook the to didn't primarily and you increase too

C. Howard Nye

in last us our It's a tell relative the that seeing right a labor not great we're question continue believe the year you measure supply think domestic instead see be capital to from now. I I do But supply early A our going there now. that to lot projects. and, chain We're Savvy, seeing getting faced to same better. of do to international. to though chain of big we're right we at call supply large of is issues chain own contractors, for too while I it's a internal for issues with least is same think will constraints I

be constrained continue I a to for while. think will transportation

rest going that came of go it's the did The We much it's our $XX cost to year. headwind has basically mentioned with Jim a not think where fuel, and we year for as so fuel on the as issue. into issue, the other million Jim we're stay back adjust about assuming had I it a mentioned, a there. We supply thing

on assumed in actually, $XX about the headwind given we've guidance So that that. million that you, there's we've

sure early chain, well So, I in it's is, sure. to think overall the about as to wanted make supply as that to spoke short what you our Courtney, I but note too still headwind for seeing we're answer

Courtney Yakavonis

Okay, great. Thank you.

C. Howard Nye

you. You're welcome. Thank

Operator

Thielman Our question D.A. from Brent comes next with Davidson.

open. is line Your

Brent Thielman

in this Thank Hey, call in I of mentioned couple great. the today, think you. heard and product customers this Hey, just at leg-up you to could as for this others on as occasions well. is environment from is Ward, how the get to investments a scaling right you situation support I've a as critical or you be incremental Are that proximity? needing your to that a make sites now. You we're quickly

C. Howard Nye

a it's great And it's still think Brent, latter. question. I

been, you around intrinsic you revenues of done doing time a gone we've in invest stick it's such think if And on extended that of we've go consistently cycles that and to in back back our our period pull on an our to largely been for base been consistent we've where we've a able X% the We've I we're such to harm very been what relative fortunate through CapEx the see as business. in overtime low position with, to we've business. been never that and inside had we've business. at fact, we've CapEx

meet a want from because have that we as puts say think make allocation in it's occasion, I very So, recognizing that on that our businesses can capital the fortunate, to of when in position been again, have that do to way think that can't. the But the be value we not us demands careful customer we're too, we're sure do to going that perspective, product. I other important we we

Brent Thielman

Ward you, Thank Okay.

C. Howard Nye

Thank you, Brent.

Operator

you, Thank line from of have is question a open. from we America, Feniger Bank Michael your

Michael Feniger

exit to squeezing look Yes. the with at XX% you're where your me at and in How guidance, the quarter. the started in looks updated we year pricing build range to XX% and kind XX% aggregates to Thanks to your of it going first for when X% range. that you above

that a And level double-digit hopefully can't on baseline should cost our incremental of sticking we be So that everyone. pricing Thanks margin XXXX? of normalizes XXXX? of level by type that of as be just would kind what pricing expecting. why should just about That's pricing, in base we

C. Howard Nye

love thanks we fact talk what vision. The is about your for I Michael, will the to XXXX it. question. more closer get when

type gonna we're to think a little where exit. build your would think just I'm bit of ask bit Obviously, too, the in of here in confidence you Jim, we have April are that want taken and speak points at a see Jim, some up that had to not I build? midpoint we things going we're the seeing what unless to guidance of address least we but.

Jim Nickolas

Yes.

of You're this Pete, next than be growth accelerated, momentum more will days, right. higher and more good year robust continuation momentum exit today, things versus back be at The it'll leading the to half into hopefully year.

price robust a of you increases, And margins So occur have I think inflation in where scenario incremental cost is maintained in imply likely moderation which a that out that especially makes scenario, to very said. matter, just sense those the as XXXX. should you what a yes, mathematical

Michael Feniger

Thanks.

C. Howard Nye

Thank you, Michael.

Operator

other turn There for Q&A. I'd closing call back in are the the questions C. Mr. Howard to remarks. like to Nye no

C. Howard Nye

of Kathryn, growth our you in attractive all superior terms priorities the shareholder underscored summer. today's to pricing. you. results strategic Marietta's thank Integral sustainability our to our and supportive forward prospects website. long-term are to executed call. practices. sharing XXXX of demand We Section our environment we more, thank and look the sustainable which published continue Martin employees, And for consistently in our confident second-quarter joining XXXX report, conference is communities and learn stakeholders earnings driving We're Sustainability in delight value of invite on you to recently read and available business success To by

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

Operator

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

disconnect. may You now

C. Howard Nye	Chairman and Chief Executive Officer
Suzanne Osberg	Vice President of Investor Relations
James A. J. Nickolas	Senior Vice President and Chief Financial Officer
Trey Grooms	Stephens Inc.
Kathryn Thompson	Thompson Research Group
Stanley Elliott	Stifel
Garik Schmois	Loop Capital Markets
Adam Thalhimer	Thompson Davis & Co.
Philip Edwards	Jefferies
Michael Dudas	Vertical Research Partners
Keith Hughes	Truist Securities
Timna Tanners	Wolfe Research
David S. MacGregor	Longbow Research
Courtney Yakavonis	Morgan Stanley
Brent Thielman	D.A. Davidson & Co.
Michael Feniger	Bank of America

Martin Marietta Materials (MLM) 3 May 222022 Q1 Earnings call transcript