Earnings call transcript Q3 2022

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Operator

Hello and welcome to Martin Marietta's Third Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded and will be available for replay on the company's website.

I would now turn the call over to your host, Ms. Jennifer Park, Martin Marietta's Vice President of Investor Relations. Jennifer, you may begin.

Jennifer Park

morning. Good to Martin pleasure XXXX third you call. earnings welcome my Marietta's to quarter It's

are Chairman Chief Ward Officer; today me Joining Nye, Nickolas, Vice and and Senior President Officer. and Financial Jim Executive Chief

laws performance. include risks may and subject future defined States future statements Today's businesses, in or Martin discussion with financial forward-looking connection results differ to other update by as United materially. legally securities uncertainties revise Like We operating is events, no results that could whether as publicly cause obligation, information, or statements, required forward-looking to to new future or actual any except from otherwise. undertake resulting developments Marietta

Please which and website. refer earnings filings, are today's available in on Exchange Commission's own legal to Securities disclaimers both contained the public release and other our the and

on available section that summarizes made during Investors website, XXXX trends. and and results webcast this supplemental the QX have our information our of We financial

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

defined the reconciled website. the well are supplemental In addition, appendix our in and the available on to also comparable and non-GAAP with most filings GAAP information as to as the measure SEC are our measures directly

begin with of third optimization after and will preliminary which a session follow operating with market to Ward earnings conclude our end our portfolio Nye one outlook will trends Q&A question-and-answer participation effort. our performance and discussion and then please question. Nickolas capital The allocation today’s quarter Jim for review will results call limit financial your Ward XXXX. will

over Ward. turn now call I to the will

Ward Nye

geopolitical I'm pressure cost pleased that current Marietta This that everyone. include And the is heightened challenges thank despite Thank tensions. categories, policies for delivered persistent third you, today's in Martin you morning, report and monetary multiple inflationary Jenny. teleconference. quarter. joining tighter across to macroeconomic record results Good

all growth of implementation strategic total EBITDA, is also double-digit revenues, acquisition gross earnings performance drove with adjusted consolidated pricing our adjusted to excellence, that share. lines, diluted plan. successful reflect testament materials commercial of our product profit, The building business quarterly combined per and to across team's contributions, a our quarterly commitment execution results and record Our

safety health operations remains class incident by injury acquired our both and at performance, and inclusive time lost total too, measured as rates. Importantly year-to-date levels world of

safety acknowledge and vital our health celebrate improvement, we While our dimension continuous in and never this work done. is

sell complemented business on with certain addition, California to cement by In and conditions. aligns durability markets, X, and terminals in a and to subject of approval regulatory transaction closing CalPortland agreement our million, sheet provides shareholder the related flexibility This value. our plant continue we strategic into Company to for definitive customary August aggregates-led entered to $XXX business, driving distribution cement to an improves assets our commitment through cycles balance Tehachapi

growth to Our attractive range. organic capital focused and initiatives remain shareholders acquisitions, within investment prudent net and reducing priorities returning capital company's leverage targeted to for on allocation the

operations our of adjusted share successfully the As underscore release, Consolidated we strategy increased value multiple million, EBITDA to operating to of records through $XXX adjusted over organic commercial aggregate were continuing diluted actions which million earnings year. this increased flat shipments implemented $X.XX. per and on results success to These volume from increased pricing achieved the XX% significant financial XX% quarter, today's adjusted highlighted third increased $X.XX consolidated X% to including in number total billion. profit revenues in gross X% a $XXX and

margin, and basis consolidated our our affected declined However, the for gross which to points adjusted also inflationary quarter. operating costs trends impacted XXX XX.X%

the as higher moderated compared this of is Notably, sequentially pace and with quarter XXXX. a second both

quarter fourth as the price number deliver Marietta Martin increase commercial We of X, these strong a we've inflation based margins of other of believe of the well initiatives containment broad position with As in actions, current another inflation, XXXX. profitability in markets and increases. quarter, to as a environment year together XXXX expand our demand advised customers and January result persistently well high in fourth

prologue, our pressures which environment long is the if For upstream company, abate. as benefits inflation believe a for inflationary supports endure and past materials after we that of is constructive pricing it

Let's quarter now starting turn third operating to performance our with aggregates.

to actions in a concrete. XXXX. actions ready-mixed for logistics to of multiple aggregate inclement manufacture continue XX.X% increased constraints a of as bode in The price from Organic largely million effect on cumulative with quarter. build XX.X% and flat, the and third organic Aggregates across offset fundamentals record These basis. demand the inclusive shipments attractive We mixed pricing company was experience pricing and in visibility overall shipments very of most quarterly and of disciplined disruptions, X.X% aggregates to strong for or aggregates XX.X the markets, shortages, immediate pricing supply with chain customer demand meaningful were latter key total curbing in acquisitions, increasing combined need the confidence healthy continued tons. aggregate in fourth weather acceleration well the and otherwise quarter, by a demand cement certain notably, aggregate adjusted

experience Against increase tons pricing combined growth market into ton our of effect cement team’s with shipments cement backdrop, per went resulting our and in execution focused July year, that record X. XX.X% delivered and as third quarter continues of operational $XX to X.X tight commercial we on effectively second and robust supply Texas excellence, on demand this The million sold-out and conditions.

favorable supportive per commercial recently foreseeable ton Texas future effective dynamics continue X, XXXX. of January the announced We will for $XX our cement increase price expect

XX.X%, in comparative were asphalt contributions as price XX.X% inflationary and bitumen from bitumen, prior acquired targeted in actions, the shipments ready-mixed in large X.X%, fuel including driven Organic projects XX.X%, organic the by concrete asphalt asphalt pricing Colorado, to increased purposes our certain Organic California in and the for through wet Colorado, as materials demand and reflecting pass pricing multiple necessary asphalt Texas, liquid XX% cost businesses, organic respectively. surcharges of to completion improved operations downstream quarter. help including notably increased offset material raw volumes XX.X%, our primarily pressures. to increase pricing to while due decreased shortage principally shipments to well and largely August historically by raw in Shifting a North strong year, Arizona, in costs, or shipments constrained increased other

Before discussing to call over our to third outlook, the review turn XXXX I'll quarter Jim preliminary our financial with conclude Jim? results. our of discussion

Jim Nickolas

XX.X% business and impacts profit Ward. with everyone. last adjusted increase billion, you, prior record XXX And a aggregates not product XX.X% XX.X%. Thank over record of aggregate record profit and million, gross an this million. good pricing higher increase $X.XX and services product morning The internal $XXX of the product an materials had Adjusted continued building quarter, to an to gross posted costs. repairs a $XXX year, growth products gross declined year's of to margin all-time improved XX.X% Adjusted revenues offset freight, maintenance points energy, the to basis quarter robust of inflationary yet relative as

quarterly $XXX Our and million, $XX gross business all delivered bottom-line while million. top Texas XX.X% cement increased profit records to XX.X% time, for increased to results. Revenues

the demand costs Importantly, to a Central discipline commercial Texas contributes and related strategy a XX.X%. production energy in capacity markets. and tight strong gas of to basis constraints of natural Domestic despite execution drove notable and North to extremely electricity. supply points was expansion primarily gross That headwinds, margin XXX

cement a capacity production to As two notables, taking in we near Texas. reminder, are term increase steps

completed Midlothian Portland less of First, and Hunter we're XL. approved midst conversions intensive Type carbon manufacture by cement, we approximately providing as Texas have product stakeholder also our increase it view Department plant our at Transportation, in This to cement transition XL, will has our by a our XX%. the as we limestone eco-friendly of been the known benefits. significant production believe and Once Type customers to will capacity

expected installing the end marketplace. finish be completed which capacity the mill of mill finish new tons production provide much our Second, we Midlothian needed XXXX. This are by to plant, Texas will a XXX,XXX at incremental of to is new

operations. Colorado profit margin gross quarter. to million, to Our by weighed XX.X% on the declined operations as which ready-mixed the Central the Texas exclude offset driven year April X, On further acquired acquired prior $XX partially concrete raw quarter. costs third gross million, product ready-mixed primarily the concrete XX.X% quarter comparability was Arizona the contributions the impacting divested Increased from on revenues the by declined with $XXX for reported results divestiture and were the operations and include an material that basis, and

Our Coast, led million, record gross points XXX demand, the stable adjusted margin comparability operations West asphalt million, the the of liquid $XX to XX.X% continued increase profit year prior contributed revenues impacting acquired to basis, of contributions asphalt increase, a basis quarter. decline On of results inflation on the gross and adjusted and paving however, a product include with and to record acquisition as reported improved an pricing XX.X%. $XXX XX.X%

compression surplus sequential of the other in for net of in consolidated land $XX basis $XX We profit and points in the demand sale of operating X% domestic by revenues energy Product $XX XX.X%. lime dolomitic moderation for product costs gross gross XXX products. higher income a million, included industry as Magnesia steel in specialties generated basis, other gains driven to On XX.X% largely a nonrecurring to margin resulted third from assets. customers saw million costs decrease, lower diesel million, declined quarter.

have the prices back of up. During diesel trended October, month

diesel While we prices. in anticipate volatility additional

We that fourth current approximate levels. prices quarter are forecasting

the capital quarter expect responsibly disciplined to discipline pricing with margins expanding increasing a on return with reinvest plan no the execution also costs strategic our our the to focused and fourth shareholders. a gross result, acquisitions period. in year compared of returning grow as through prior We with longer As in diesel coupled while we sequentially, initiatives, to remain business, to

share approximately we XXX,XXX third price dividend repurchases. common quarter, and repurchased the returned through payments per to of shareholders at nearly of the average stock $XXX an share We During $XXX quarter. million shares in both

a tranche utilized senior July past due gross XX, to satisfy the million We reduced the notes company quarter. leverage balance and XXXX. on this $XXX cash September discharge On sheet also of

down continued Our at the to net ratio and quarter X.Xx. ended trend debt-to-EBITDA

a by anticipate target return continue leverage end net year X.Xx top to Xx to of to We end. of ratio the our

paid cash confidence of in underscoring flow approved in an and increase Additionally, generation. quarterly dividend our X% directors the in a September free company's performance future board cash its

annualized our and well shareholders Our is billion sustainable authorization announcement dividends, meaningful repurchases. repurchased through dividend as of Since returned XXXX, per $X.X cash combination to share share. $X.XX February as now we have in

reflect to we volumes aggregate as and guidance the year inflationary our release, updated impact full lower year-to-date today's in detailed XXXX expected pressure. of well As continued as results our have

result, $X, gain million full million second XXX $X,XXX quarter. EBITDA divestiture from adjusted year to the we to nonrecurring As range expect in which the the excludes a now on

turn to back Ward. I'll With the call that,

Ward Nye

Thanks Jim.

sector. and infrastructure are scale, of headwinds investment expected the Looking ahead residential in federal to driven year historically state the demand offset industrial remainder to coupled XXXX, and affordability projects from heavy into under of level expanded the with build near-term

both these and supply have so supported by pricing volume. manner led our ability we capacity will the products Importantly, locally value a that to emphasizes strategy and do needed in over

fourth are accounted for the of of As that chain we the to shipments. across supply backlogs broader third year volumes, our the infrastructure primary the prior uncertainty, product of with infrastructure. quarter, constant theme shipments of one ahead levels, serve customer current is enter period quarter, the governor, challenges in In as aggregates continuing XX% total economic growth footprint

the aid first highway Our receive poised July Federal through year end Department or incremental of the is accelerated up for IIJA Jobs states or fiscal the are budgets funding market XX% to DOT the top began Act period. as and XXXX construction most single company's prior the the of relative Notably, X. from the healthy of for Transportation, Infrastructure year, growth Investment eight which for for already year, on largest obligations months used allocation XX state

the Aggregate facility strong in demand in by sector by quarter chains usage in Wolfspeed As scale. a Austin, in shift volumes. our near plastic as for Kansas of XX% operation and adoption from manufacturing battery digital Texas expect public data driven data to campus Coast. energy, in energy pandemic and Moines. Durham, to cloud-based along our center The well semiconductor and Stellantis, global Illustrative projects include near both level base Des centers measure CPChem’s of large shipments and a total provide for end and in announcements venture Gulf side manufacturing manufacturing the projects remain Pass led these projects markets electric in Nonresidential Golden Raleigh, services. are XXXX critical construction years LNG, accelerating, market as Samsung's Indianapolis, markets third project a Phoenix, result, in supply of lithium-ion vehicle joint site post heavy Taiwan the Samsung of VinFast chip backlogs near product and we plant plan Semiconductor come. step and City metadata nonresidential investment stable change a accounted for of

sectors, like the these our retail to in by sector exceeding Sunbelt continue the the began construction. said, family XX% the Not housing to this continued of single decreased under residential third multifamily end offset and quarter in we total down X% market, remains footprint third as starts, we residential That see generally slow While for development. single across accounts organic family demand pandemic which decline amid as population significant shipments in hospitality partially which shipments expect with commercial, in our was housing strength follows recovery recovery categories moderate built far inflows will impacted surprisingly, of supply. following quarter

to varying housing per family below capita As key slides, areas XXXX and remains metro peak our in shown our levels. significantly degrees in starts supplemental single

the be borrowing expect single key home areas, prices equilibrium. our find rates current driven in metropolitan to continue slowdown we such, moderate housing affordability and to family as As

look to we anticipates view aggregate effectively As flat. XXXX, be our preliminary to shipments

realization be As XXXX pricing confident commercial investment, that to will as X, a from favorable with Together, pricing aggregates We rates, the residential low by by slowdown strategy as underpinned XXXX we robust expect January in XXXX. exit dynamics drive volume continue activity remain shipments this sector. single-family in in nonresidential product supported scale increased value largely increases. our expect we attractive our projects heavy from will insulate announced well growth double-digit price over coupled will infrastructure of of

backdrop. setting To proud challenging performance a record our we're of against conclude,

plan. accelerate expansion. our to margin fourth commercial current doing ability strategic practices, confident and health aggregates macro-economic in successfully demonstrating employee resiliency and the model. business are expect excellence, momentum a in the proven navigate sustainable and our remain we're XXXX, our in committed quarter, return led our We resulting in the to to the business operational of of In challenges so, execution and current We to safety,

the attention your now provide If required instructions, our questions. the we'll turn operator will to addressing

Operator

[Operator Instructions]

Our comes first Stifel. from Elliott Stan with question

Stan Elliott

good seeing Hey, been infrastructure now? state for a budgets? piece you how and question. taking their what mentioned lettings the Can Kind about little bit out critical the you. morning, year. more for of the get right Thank it everyone. And next all projects you you're you Ward, in the ability talk to the has door looks

Ward Nye

equal. guess to going right on Stanley. you not the focused for what one, in our states And we've several all of part Thank I is building been morning, things, states. Good business are question. be created the

around budgets So if we next look are at our top XX states, overall, can year lot. we're seeing up for a move basically that And XX%. around that

what So for seeing just not up South in up that XX%, state Part important Carolina of many Stanley, example, states up respects, North for are XX%, Carolina, way us funding, Florida, our here we're is increased XX%. funding. state at the but too looking home

than will its to find over X% X% in period. of to example, up in FYXX going to infrastructure, that's for work So North Carolina multi-year tax their way sales X% way a

Texas, FYXX they're resurfacing. for the basically $X.X At even at that by which looking from try unified XX% is billion we're is worth that's their largest of program revenue, our if XX-year ‘XX high. on a and $X.X billion construction reflecting looking passed then at recently their increase in And contextualize $XX And historic another Florida, projects, budget, transportation to time, the to plan. just a billion Florida for same state highway

importantly, important your today, think, attractive look XXXX. Stanley, pretty contract on Interstate looking states to a went we're thing we've XX%. have, at baseline up top obligations, up highway since from then backdrop. you same question, So healthy I at what sit into we're the construction largest to IIJA, we're which It's is when seen here the if be budgets. Those to nice very law aid, But looking top single see to Highway And feather federal also from that us, back around they're XX those It's in awards to of a to is Act you state going are year-to-date. at the in and XX%. going pop

next year, we for is it. public looks side, heard to volume as think our and on state piece that that's federal attractive, it which to ago, of you We as the on your going think to So on towards like question like plus us public starts the history, about look back was to us of volume, opposed moments high low in XX% me more just in the leading what the speak what XXs.

I Stanley, that hope helps. So,

Operator

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

Kathryn Thompson

at question some today. great for low into But per for early Hi, increase confidence now. return you. X% cement taking look for a aggregates. my you're expect public Thank given teens gives XXXX backlogs pricing for market. backlogs particularly also we That was color focusing color thank more to color ton right you the end about that you've actions seeing private on And It good gives side, when next you and particular between on what the customer what and on for view year.

Ward Nye

work the look thank In nicely where last compared for out. pick actually X%. we cement broadly at Kathryn, in and is Look, also we we customer look were some in in backlogs the QX. you Texas in in about as If expecting look If up question. market nice cement, And with we're this aggregates we're actually keep they're And uniquely ready-mixed, mind time. dealing up. to it's largely we they're year, sold flat. that to up

looking we were pretty we're today year for at if actually attractive. where it's versus backlogs a So ago, customers

side in of the we Kathryn, going about healthier, your is at is projects the about nonres, think we being of look view heavy be led. and to ‘XX, other process we piece important, that that of question clearly are as our public through I the that's think ‘XX, so as think

we're side we're I energy, in look square I heavy nice going some think the that to resilient, Do there in footage which is nonres nonres? projects probably Do and the housing, to Probably see out single operating. degree particular, think persists. that's the we're attractive at look being very see I have, a of moderation cooling light multi see be pop, to really to housing, degree in and think of think US so. that's family of we we're already going residential at a seeing cetera et also We going likely we manufacturing, markets we that. But in the if

as users, be quite about at quite backlogs, on degrees and we is of nonres residential, to healthy, we heavy res end side public look think Multifamily likely of back and family to see varying healthy, we're non is single the light appears healthy. weakness. So think and step the side where is and

them of careful our with spell what's happened of in one certain slides, to we've happened you them supplemental key housing. we've key what's in the specificity been tried four And Now and the East, four in indicative MSAs. population the to do, to of to are think we our things West, out that that see it MSAs, of in

of ours that housing, of degree an will not will feels headwinds analysis on think the the pronounced. some to I US that reveal extent be as

do both on we So side volumes Kathryn, into give to deal data of with tried around we why points going degree the have the I've good some public and to private relatively XXXX. flat resilience the you

Operator

question from with next Trey Our Stephens. comes Grooms

Trey Grooms

into timeframe. into you're we've year How very today's the summit that, around if some could in pricing But impressive year. magnitude much there. performance the increases will from widespread Hey, on summit Texas of looking there you next this and good the comment then in expecting some heard January. in announced and market January the of you And being the mentioned Ward, in over be maybe for And XXXX. quarter morning, pricing carried everyone. having your

Ward Nye

going next the you it's gross basis, point XX.X% if your done have are things Look, this XX%. the a mean, can question, per cement the gross here's above market, been mix And Trey. on margins why We gives that's build for about all-time a basically remember, to to ton increase year that's around it that quarter, for thank a you we to think to market ASP of Texas cement consume new up year. summit effective good we It's annum. it was capacity million some has cement led a we recur on on you at the been, $XX But resilience, around XX this per a to good it's adjusted for record If And What anticipate tons. market a a look million That's I Texas a I think is January XX.X% product. XX year. pricing. Trey, at about of for for for basis. state in ton X. in reported a to see that the produce that's Texas going

remarks the the goes In that prepared other my sold words, back to in commentary markets out. that effectively

Texas, keep we're two So water meaningful imports Hunter, mind one we're Central Midlothian, in what to got we've where at doing. in one plants, so frankly particularly North in and not are

say that why I wouldn't underscores all of the pricing. we resilience So have around

reflecting and other But I I think you'd slow. is imagine ordinarily. going remarks. are And believe important, well of that to back to that piece I enormous I of higher material there on recurs is likely amounts I'm we lead is not to those hard that our going The Texas, is tensions to oil see a you basically have cement. piece going It's that think going mentioned it geopolitical ASPs much business West that the some prepared it think the actually to of than to in

comments we're things keep are in his important the mind, that in conversion, XL cement. other Type One, also The Jim a to I seeing think to as said Trey.

tons it needs then to mill more actually that's that see XXX,XXX Midlothian year, another desperately In be capacity as going we'll at that will That's actually about but next go underway now. more year. you finish capacity come process, it. into get next online won't right immediate we that as add And XX% to we marketplace

is again, So ton we're $XX what looking for. a

in give you give some we to wanted number. why specifically. a question a your answers that sense that you of degree other But to high again, think confidence have data of I I

Operator

next Goldman comes Our from question Revich Jerry Sachs. with

Jerry Revich

given everyone. Yes, talk you hi. folks feels hundred it I'm were this year, that points, puts the we over going to a you the to with quicker would be to be a diesel if if comment just base like and you 'XX? still timing down of inflation and morning, scenario. recession case gains to catch-up basis and the over of of result, that that takes year versus in wondering assume see if wondering given in of flat, and pricing the next expand mild the a willing could positioned year-over-year the conceptually, on Good the we in volumes the margins increase year I'm are the might the saw aggregates versus of course of couple Ward, we're this course permanent about, as Ward, other by beginning year price

Ward Nye

Sure, Jerry. Thank the you for question.

couple things. a So of

happens margin on a which what focuses we really question, one, think good volumes. really I think is and with Your

returning if So things would One, we're you the we're year, saying QX. anticipating at look what of point expansion several margin the that balance actually out. in I for

So big passing what price means catching cost actually up industry that been the in inputs. multiple have is what a and heavy finally increases are

We year. into also expect recur to that going next

this why XXXX industry this volume underscores year. XXXX, volumes is we to to you to have might actually last business. anticipate strategy is than at see back Martin being back, peak and you back but your you profitability in volume were 'XX, what see how generally, that us, before look respects Marietta XXXX, history, happens that would in because volume finding next cycle specifically, but point, we're Now go take recognize if to bearish in volume this I we while, -- I'd do our over Jerry, in actually peak is you was what you'll if and the speak actually following more which it's XXXX, many been What a value we valuable seeing we if

it, durable it's your a well. echoed in pricing. set that outline, probably because as seen be and thing to think in other you've of of I aggregates Jerry, some I'll tends The The very writings pricing

of is right not because it So in will year of going as to strength and inevitably a cycles we now through time, be not, if think we the I'm the go down or next be cycle fullness in don't public. sure

a of around confidence resiliency lot of pricing. the have aggregate We the

as in QX, in at is we likely what is Again, to in likely to margins what they likely we they we If to we expand. look we think expand. So think about think happen think happen margins 'XX.

that your answers hopefully, So XX% maybe question more, and Jerry.

Operator

from comes question with Jefferies. Ng next Our Phil

Phil Ng

the Hey, XXXX. Appreciate forward color guys. for

question maybe So for a Jim.

lot on flat that big uncertainty kind through understand for the like the cadence percentage maybe infrastructure side, when side the kind really of on nonres volume And unpack inflection Can help could and we and us a help appreciating comes kind guidance, Thanks lot. of on and lightings of growth infrastructure? appreciate assuming Your housing us the the bidding has light of a commercial. next activity housing, for dialed you more year? up. But of you're

Ward Nye

QX get out really of try or judge rhythm in And Keep weeks to divine is closer me, our January, through QX. or March, oftentimes cadence what to way the broken said And always to of in remember, particular. two of at in want QX is year. February I've year, the going last long is which the by look start next world, rest March. no you're made is and mind, interesting to toward to degree and QX we think the half I year Look, it's in inflection people some as

the seen think we've rhythm we're is I what think more cadence percentages going balance the that Phil, to back part while infrastructure, and to spoke the can ago is important, than you capacity to year, the a good look of projects to think past. in sense that going little I of and a type I through like of led infrastructure we're be going in this and recent seeing be more I what seeing, gives

you're important period over volumes and years. of array more wider of out send because That's a to a much going volumes

that. I reflect So on would

important large energy estimated just and or start as we're seeing and think If and a before, in a particular, energy but And start part are dates lot and that, mentioned almost what driven projects by the it The all nonres we're we those on beyond the then cubic projects square and look considerable that footage. well because are central say looking other warehousing. dates tons look about of is in the the we thing even million Texas, again, plants of and These is and South to are yards. tend seeing we that number themselves million now XXXX that Texas different of the with on not in concrete we we've Texas, manufacturing. in of South have I LNG United at some side, of I by other plants, States, cumulative all the talking been seeing thing square X.X Carolinas from footage I'm on about seeing, yardage XX.X would in we and be these this opportunities in the all the that's at six when tons those on new the that

aggregate or degrees, on those, as we be be cement it So won't for well. a a varying like concrete play again, play it us an feel can and just

to see would certainly start in begin looking QX volumes ramp up. I So to those

I public. think it be in particularly will

others quite I hospitality It think like think actually heavy nonres likely see of to in slow. do manufacturing and in energy single-family are goes how do will curious you're the I side going be markets. and housing going to well. to areas our on see

for we're off I right said, to I think I starts seasonally at are adjusted a there's cliff. don't don't As room a go them think because off go those to looking cliff going And an -- markets, it's a issue. many keep using good, still million these of in is $XXX,XXX. start. we below And steady now It's issue. an a are availability mind, not affordability

think margins. that's will think I So would to perspective, timing way Phil, be to willing via and many it what respects, in are I curious users. relative do to But handicap end the a that's about how homebuilders from I it see would their it,

Phil Ng

least at more a when heavy Is than the you side think to lot enough light XXXX? the about offset Ward, momentum And side, pushing there. that like of

Ward Nye

I so heavy think of projects scope the are large. of some those

particularly answer some short projects. yes, is the large energy it think these of can, really I

So you up I that's with potentially think wash. end nonres where that

probably word a to that's think use. good I

Operator

from with comes next question Wolfe Our Tanners Research. Timna

Timna Tanners

improving ones. Yes, constraints assumes others. And And given talk and in is then on some should of your the cement was how Specialty existing thanks. we One side, the from yours from really, squeeze about the a just talked hopefully, that same I you market, expansions but you've smaller a guidance idea, capacity, availability. wondering Magnesia about two rebound. about I wanted to quick think

it that just in is year? short-term is side? could this Or a you something see Thanks. demand perpetuate So the blip next into

Ward Nye

Sure. Timna, thanks for the question.

a things of couple on So Mag.

in from anticipate the think QX. same Mag really more I we of

that driving a Steel a I it's A end lower of actually we expect for are been are than couple number while. of is of That side think commercial better year at a year. things of off of that rolling next business quite contracts year. has The which the right chemical for about is XX% Mag performing this business now. well. run is at that actually capacity,

much rhythm we attractive to pricing year cadence think from as that's actually what and next of going a for look more that business. about is the going like be So to perspective,

cement particular, I as If has relative in if market, to don't So what they're we've I I just while. think get fair, how stay of significant your bit perspective, of a a tight a a And is headwind. they they could about from I That's done that have week, of not could towards a for buying a stone of part markets, the certainly bit in the Timna. to it's fact some little in that put a think shortages, that's players is end some markets to logistics what a year. think seen that. the ready-mixed back cement ready-mixed think position headwind be comment powder either. have that massive Look, of in not this

think better. cement is issue. been while some transportation and Trucking logistics has I tightness getting issue. has been industry part confronting of year I the the think an broadly, happening what's And has been Rail an are modestly an issue. of issues still this

have mind, see more I we've place to the actually design, in position plays and that Texas, keep out. those next where we'll we have the So going cement have cement, we of than very and world, would again, it's into then strategic in year, year how logistics we're year, by next as and cement in only is concrete. Timna, our aggregates this anticipate much the we largest tailwinds producer ready-mixed about seen cement issues think And

thoughts year. for the that issue So around powder I your Mag next and hope addresses

Operator

comes next Truist. Hughes with from Our question Keith

Keith Hughes

Thank you.

number going that volumes, negative. within fourth to anything Looking aggregate than indicate in quarter in is quarter weather the it's Is other yearly at there seems be And to correct? the aggregates? going the on

Ward Nye

QX we question. we're severalfold. Yes. like, until a had year-to-date two year. that last the primary Keith, as late remembering actually in what's year, looking look that The for at roll we it's the is worth the in you thing very didn't One, look winner thank at that

was unusually So we long. that had a QX

in cement if measure doing winter shows winter varying shows and items a those just concur some continues what to What about and back So degree with up it go happens what happens up. with normal talking if and that large if And a tight. of or normal we're that augment is winter. saying then what to recur constraints normal we assuming Timna, happens we be logistics were

really asphalt market those for seeing could your Indianapolis up year. winter. what a it, market. And pretty end And actually looking in factor markets that volumes the today. last them, an good can are weather swing say Paul, last hate higher that good thought things going Among just fourth is we that to FOB way, they to St. we much that very than year. really, is were for markets We're be being example, quite sort we're was I where year provider Minneapolis of attractive quarter. we're affected the are a think at as and a as to There number out mean trying by

up chilling of some what high but performing, for intended, colder we in with look the does volumes the relatively rest effect the it weather can end no like have So on Keith. if year, of these markets pun that are

up. it racking we're how that's So

Operator

Our Research Dudas comes Partners. Michael Vertical with question from next

Michael Dudas

remind constraints, higher high what was XXXX, the in or energy of labor, your what could Good tailwinds and it [Inaudible] could maybe want overall materials can And for the XXXX, cost sort you inflation parts look certainly it? morning, and stays you the that a get kind help we of gentlemen. see place looking some it's however for of we to headwind agreement this guidance to the us what stay, Ward, certainly, we level, what at if are towards maybe moderation may into you're as but the pricing

Ward Nye

Sure.

that bifurcate little a me Let bit.

give Let what you saw. come of me will what we you expecting. and tell back we're sense Jim a

try down I'll just And so to it bit. a break

we So diesel cost gallon business at energy if at looking the that's is. and per aggregates again, it look if what input, the single and we're largest

per what So up gallon was that was it $X.XX XXXX to diesel of $X.XX is gallon up 'XX. XX%. cost a a in QX in And means of from gallon QX

that and from in QX. show to this what did his gallon prepared remarks, that did a in Jim been some sequential commented moderation fairness, in $X.XX Now had show

XX.X big numbers But are mind particular And will fuel are that in business. to But so if you we're there that in in gas, in anticipating going fairness, and course, million full look of Mag we of pretty Similarly, there when in and gallons these cement about will year, be a for electricity and in those aggregates we use. keep big natural having issues at numbers. Specialties. the bigger be involved diesel are

again, we if XX%, was up at gas looking those, costs the we're at QX. Nat So up as look XXX% electricity were

navigated. significant So we very have those quarter headwinds actually think I successfully pretty are the we during that that

for that you, year. of what rest Now year if we over next May? a speaking little and Jim, turn I'll the on to bit the into I look at least

Jim Nickolas

Sure.

cost headwind, or or So improve, year. is XXXX we're they expecting get in assuming next get they point, full give we're so, million At view. the about elevated, year for worse. a or better $XXX but those don't stay energy that's year not don't They the full this take, worse

at ASP next that should bit volatile and growth I a probably stays and into in most those quarter year, surpass bit next big Labor too percent. repairs into biggest they as single behaved. average, little all That's So continue above about expect relatively cost cost well that faster late, that's component expense our not of think supplies, XX-ish But I our cost will contract grow be growing a the going little That's our is What a maybe XXXX. of year. biggest, but services, this to have bad. to inflation components. said,

Michael Dudas

done. Well Those are Ward. stunning numbers, some

Operator

Our MacGregor question Longbow next with Research. from comes David

David MacGregor

out answer just low question, -- a year increase in Yes, everything XX% a good I in you tight response and the It's morning, a constraints, of very an inflection question, the happened import cement. like to want cement. increase maintenance I you're to I that's earlier Ward. river, water highlighted be that everyone. solar on the Congratulations been progress, seems guess, for to to unplanned outages to It on on midyear, there's indicated wanted and phenomenal ask about year -- you this another the mid-year. different coming with the there's you'd you everywhere. a infrastructure absent side capacity And in is suggests, kind all extraordinary ordinary, down in very, XXXX which of Texas capacity we're response just to off an to pricing price something environment. kicking But just changing expected setup your

cement just public the are in how you're about to private growth be of disruptive in risks, is thinking nonres? be and wondering, Or what interested could I'm issue potentially all to the what enough now. So downside the it resi right to And just -- resi? an

Ward Nye

look, David. very question the No, much, appreciate I

such I are Texas part the market which think overall rule all I highest And and way the of things. general in through in it’s our think we've us the what two confidence probably the a been cement place different historically rule that infrastructure percentage cycles, a cement in as Texas single gives as market business. specific seen of is

think when that bridges. So component about when concrete think I remember really important going you're you're in you riding what's that's on to happening you're Texas, marketplace. roads in a concrete and And across

that David, production plants is and of, what where other the state, requirements what in in-state is that The we've state our in located. thing are spoken that are the really

is the would. some powder, open a housing to probably So slowed if would it answer degree, that up

mean that might Does week take I towards of think end the going aggregates able it to that probably be to with tightness more be the and people aren't faced does.

So in very cement I unique. Texas Texas overused it's a I do an think is is different but word, and relatively do think David,

for plants time big The other fact is as utilization, the our has we out at Texas. been our help that look overall at is better. continue think a basis I point at in and as to on as of They a the us our thing that look over reliability we looked I'll business we've year-over-year get

add very So add that at XL we're adding in finding capacity. ourselves finish to tight new going going to making that's in market a capacity, is the to shift the mill Type Midlothian a position is

to we than next fact were year. we last the And cement be than we're are year going better now is, this year, company a better and we're

attractive got will So lot we've around resilience XXXX a I it right think what commercial there now to a to the be for of of are and in aspects anticipating cement. But of think do very we're it. continue components I number

Operator

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

Brent Thielman

year-end. overall appetite Hi, great. speak 'XX, of focus of lot if XXXX lot in back margins going economic Maybe Thanks. here a next business internal the Hey, get development certainty leverage by range there. Ward, pipeline, within you your a for to M&A you obviously guys could year, target on if out and your into

of the just you're thinking a get sense to side. So kind of development about I wanted business how

Ward Nye

for Brent, the you question. thank

we compelling one are of of what find that Martin be company we ability by changing. And outlays way cash this is such in this about to its as because done anticipated through end most the the after significant in would the important think having really last part year year. exactly that's capital I priorities be cycles an we M&A Marietta I of the de-levered our go history

we're today. the lot to we A through would And months. And what you what about here's more come what our be have M&A broadly, funnel of deals disciplined expect. think We're not are is looking number to in if to say. last trying those that And we're I'll different They potential Now XX at. very is of what at a potential in. aggregates-based types be, in almost that they're be transactions we're exclusively tended It's the exclusively. most of almost deals. transactions tend interested looking

downstream. hear aggregates-led, cement, way we the You that speak strategic business, targeted our of

though, So our do. part to continue extent of to grow to footprint can is is that's we it, to as the that aggregates-led business, we're now, what's going different Brent, different. think want what we about our

that markets operating you've you've low in about people ability them commercial could to if market. got bolt-on, the market, reason that have we in in actually very look to from are that do is not I bolt-on. because the And looked that we that So called have got in people you a allocation think out before risk perspective

occur low. of and course over risk broadly quite execution Integration really a can is the weekend, the

do at year? Do do yes. is I next you to early that look we aggregates year and late look continue or The we'll should talk so. certainly to to some it be that So have answer that, that, I the to continue M&A? you hope on things about for to hope will guarantees to There aim continue is are but no led. this we

responsive. hope So that's I

Operator

with question comes next from Garik Our Shmois Loop Capital.

Garik Shmois

side. nonresidential Wanted follow Hi, the question. thanks for my to on taking up

much as current clear, of end outlook off healthy nonres indicative the nonres? your how have cancellations? of to lag? seeing of to to be delays cycle this is heavy shipments you is nonres, If how the opposed more the an towards on is that light hold there or follow going just to side tends And estimate just the expected market of Or any you are nonres, your of

Ward Nye

with to the part take Jim to for thanks Good voice, hear going and your to one. Yes. and and question. back I'm deal come ask two part

career was or nonres that that two, only projects the being I robust and of can that part was ways that surprise canceled. basically not coming frankly, my nonres The significant XXXX, on precipitous saw And happen out saw projects. cancellations stopping we not in notable was XXXX me. fall so we're so we where that's in seeing actually building to that a time big So remember

a to rule, tend go they general through. don't As they

the So short answer not we're that. is seeing

cetera. The the is non what's of of et heavy your other really breakdown part and question

turn So that Jim. to I'll over

Jim Nickolas

Yes.

is is the heavy of XX%, Garik, So the light portion XX%. portion nonres

Operator

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

Michael Feniger

me thanks in. Yes, for squeezing

On half mentioned second side, in next the an the of year. public you inflection

for say you be observed XXXX? in public follow-up XXXX is years on higher the that. in pricing. that industry to where of growth consecutive a double-digit fair it get three cycles just can rate rate than to has likely is The And the past So growth

in it XXXX. doing You're

Next year will be number two.

for public okay, XXXX, we if nonres you. side get XXXX? -- do have is just in So accelerating heavy the underpinnings year Thank to that of third is

Ward Nye

great are Michael. Those questions,

yes, you don't for a we I that. to thank get think and we're build is the far. want I public side? we're probably likely on out is, So a The ranked position answer of again, this look, see I I that too Do so type think to really think in Do short speculation are. there

to to be not the look going be the and that will it volume that up challenged you very is environment. at to housing constructive U.S. is forward, particular overbuilt, think year in next a circumstance, a not tried obviously to a finding degrees that right, long, say right we're on pricing, sense relative if we be in highway a what course, multiyear got up base guidance. I good a that that seen pricing believe could And a we to and are, aggregate end think multi-year What I it, in pricing that see year bill. time. right relative in U.S. have even deep, ourselves you a far from I we're right, want broader If we've could of we're If that and environment. our to particularly you pricing to to you XXXX. have flat we be in however that attractive of take in in number fashion be relatively volumes if preliminary If should is extended capture after tends of will vein higher have aggregates will an we've put anything could we continue do economic for period think or in attractive we manufacturing we're I out going indicators what of that that

That's Now you of is far look been obviously, would would we've around more preliminary than if that's at. a what on just I've industry typically looking consistent not given has But I'm out what this outlined taking guidance. farther admit, I'd so XXXX. years history. for you view broader think with just I like what Obviously, than we to be occasion,

Operator

question next Adam Thompson from with Davis. Thalhimer Our comes

Adam Thalhimer

quarter. Hey, guys. Nice

Just QX? today? quick on in residential was anything the seeing wondering if a I a volumes with Are the to do down weakness actually side. bit you And little just word has that

Ward Nye

I'm sorry, what -- what is that? Adam, are we today --

Adam Thalhimer

something expect weakness actually Oh, residential that you in seeing see? is today? just Or to still

Ward Nye

know slowdown. the don't would things in what? that's difference a they're seeing I such And I And I overall, markets, is acute still weakness it that some call fundamental know see today. In parsing weakness, You need. the that's I the little But reason I markets say think wouldn't we're a that our bit. an

mean, rates people would United relatively opposed practical to it, otherwise? a slowdown Adam. constraints Yes. we've view, to that ago. today markets, in large the a because affordability? have face up a more I plus So are to circumstances. of States bigger got in not a by availability we in seeing let's some in is that interest I measure I'm the more my going of dismiss totally looked decade logistics Are have matter, trending as as our think affected most affordability of lack we lot and issue, and normal things

where we So that that to are seeing going the some is have we a think we're of yes, dramatic. Nothing see But goes. is to short answer degree slowdown.

very In a it's actually particular more But differently, this think will and circumstance is single-family in to we're broadly. think where going specific fact, expected be geographies on quite respond we very I housing. seeing what do

Operator

Anthony Pettinari next question with from Citi. Our comes

Anthony Pettinari

you CapEx of I that morning. CapEx $XX CapEx, looks that? given bit, next may the like at early was got of implications flattish just volumes driving then or be 'XX guidance little for right. midpoint, year million a thoughts kind on trimmed Can maybe kind the year? under talk if on in And Good It about any what's maybe for you 'XX

Jim Nickolas

the Happy in in to we get take taking Jim. The expected year. past, It's the earlier year the There that just simply was deployed other longer question. in reasons had are reduction Yes. CapEx frankly. no to money than this

think we can So we this it's a just done reflection of get year. what

As focused year, typically next of I about guide for X% revenues.

I for holds that true year. think next

So sort of that steady expect the and as would answer of for sales. I thing us, X% goes Does at year same next about your she question?

Anthony Pettinari

turn No, it Yes. very that's I'll helpful. over.

Operator

next Our Dillon Stanley. Morgan from comes question with Cumming

Dillon Cumming

I been wanted volumes year. Thanks kind the bring elements this clear aggregates guys. second. the chain me have rail that a Ward, you I squeezing constraining to for logistics Hey, trucking were and of just to for in. back pretty think supply of discussion like

improving nonres you the heavy of that fact of we and be think assumption you side to about year. kind alluded and public I for volume If that have the should the infrastructure. modestly those think next

conservative? flattish kind volumes, embedding the progresses? like you maybe that see that pockets 'XX more end And how and up constrained to spectrum or frame [Inaudible] if of by of the areas we potential the in those Maybe the trucking relief rail of those outlook pronounced year So are should start as still of issues? to are kind upside still market you those

Ward Nye

We're be the that of on not we how are constraints to next been in answer to going purposes that things The benefit have but assuming year relieved. going mind, all have question. to And is constrained. yes, relative burden wholly rail. at for work, of keep for and degrees continue we're to particularly assuming depending a you relieved short thank Dillon, we're they

shipper rail by United stone gets of we're rail better, the largest in States. As the

feel several going a where inevitably when and beneficiary it that same will been time, over be last quarters. circumstance that's to So as the bit a we're we've At struggling, is it's we acutely, disproportionate righted. more the

we to next year? be likely No. completely be Do So do we think better? Yes. to it's think remedied going it's

getting it Do was better this we the than see in half second it Yes. year earlier? of

certain to frame a But we're still view least degree of us more our that and that that on So resilience that's we're around next year. how at trying gives broadly.

Operator

not for further I'm And you. Thank Ward turn Nye further call over now time. remarks. showing any to at any the like back to would questions this I

Ward Nye

all today's joining you thank call. for earnings Again, conference

safety, strive and strategic plan. adapt to excellence, challenges continue and the track to cycles operational various Marietta's our success for on proves macroeconomic remain We various and current record to environment in commercial inherent business the Martin ability focused throughout our executing of the sharing aggregates-led and now value the fourth our results resiliency enhance model. Marietta's and quarter and in We and shareholder look Martin driving attractive durability our growth in future. We're with into prospects continue February. full of confident year to forward business XXXX you to

Marietta. of Thank time As you always, questions. follow-up support continued Bye-bye. again for your we're available for and any Martin your

Operator

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

You may now disconnect.

Martin Marietta Materials (MLM) 2 Nov 222022 Q3 Earnings call transcript