MLM - Earnings call transcript Q2 2024 | Martin Marietta Materials, Inc.

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Operator

Welcome to Martin Marietta's Second Quarter 2024 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 will now turn the call over to your host, Ms. Jacklyn Rooker, Martin Marietta's Director of Investor Relations. Jacklyn, you may begin.

Jacklyn Rooker

Good morning. It's my pleasure to welcome you to Martin Marietta's Second Quarter 2024 Earnings Call. as Ward Executive and Financial with Vice may forward-looking are and Executive Officer. Today's future today States include Nickolas, United results Jim President statements performance. events, me future Nye, in or Chief Chair Officer; discussion securities operating With laws by financial connection defined and Chief could results to differ Like other subject is actual Marietta to risks cause businesses, Martin and uncertainties that materially. resulting any from as legally information, required, publicly forward-looking We statements, otherwise. Please no Securities revise whether today's earnings or legal obligation, except developments public release undertake the and both available and and disclaimers new our are in update future the to Commission's to Exchange other or refer which own filings, contained website.

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

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

the Ward the limit for follow. will question. I call provide Industries then will trends. which, participation XXXX Jim GAAP capital as closing appendix In reconciled operating turn also acquisition review are defined earnings quarter measures website. Ward and session the and Nickolas comments. available Q&A Ward. to our on as our discussion question-and-answer well Please our our the as will over and well in Water to comparable most SEC Blue to begin a as After our with our of now filings addition, outlook allocation. will of and directly call today's will performance the second are A remainder the in supplemental current non-GAAP market your financial to Nye measure with one information results

C. Nye

all and teleconference. this Jacklyn, thank for joining you, Thank you

and driver financial as company's profitable earnings Dallas-Fort an the of impacted rain As our was flooding Worth in as Midwest. The release, results historic single notable most several well quarter most metropolitan largest dynamics indicated particularly marketplace increase in XXX% precipitation product parts in in shipments. and disproportionate second our today's and

demand effect shipment previously philosophy is And restrictive strategy quarter our lag the construction of while decline, more than monetary by unit the rate-sensitive growth private modestly evidenced strong and volume profitability benefits clearly adjusted EBITDA the the policy commercial anticipated. our to over Secondarily, are expansion. of second also contributed pressuring margin interest value

Moving weather forward, our and remains we second rates impacts can view persist is the year's demand team temporary. That from to focused interest and expect we what high half. on said, shipment the trends in slower control,

$X.X full As a revised to at the adjusted guidance we result, midpoint. our EBITDA billion year XXXX

we were worthy of half we to there our shipments and the aggregates below proud foundational first notable acquired despite XXXX gross with success. Starting our Operationally, I'm report margin in history, expectations, quarter record headwinds. initial with were our of businesses. as inclusive safety. highlights concluded the our for incident that second second EBITDA profit Marietta's newly significant While organic quarter of achieved Martin adjusted best mention long-term company's safety rates first expanded and total weather

mix-adjusted basis. pricing average with on XX.X% organic increasing XX% aggregates aggregates price Importantly, or attractive, an remain selling fundamentals

future the and Industries, Blue on acquisition standpoint, and a proceeds the realization in our reinforced from so business from and Water previously United strategically and X, including footprint efficiently commercial new complement Florida Water position margin by redeploy Water report the operations South will XX markets in related portfolio high-quality our South pricing Tennessee of commercial be Sons Texas April aggregates These unrelenting Southeastern expect commitment Frei combined realization existing optimization following expectations, the to pleased the attractive us synergy to & announced this cement and Blue safe financial the operations to maintaining cash performance pure-play increasingly Albert concrete both We and the initial to exceeded our our acquisitions momentum accomplishments continue integration These fidelity and and has growth. I'm that a for excellence. From teams Blue and expansion management's complete. aggregates aggregates-led compelling. actions. the operational July workplace States resiliency underscore The is both doing, divestiture. in of our completed of of we from

forward, aggregates to now and attractive largely M&A the pure-play trends. Moving identified and pipeline on remains market geographies. Shifting focused active end businesses SOAR

XX, investment is evidenced to levels, value well for above spending environment lap XXXX aggregates-intensive the expected and infrastructure, with and benefit beyond. record in and for highway, leading are bridge government tunnel state is materials most street predictably periods. ending June below funding increased Act robust comparable Investment pricing levels, construction single the $XXX which a awards starting federal declined through Jobs levels more state end XXXX, local the continues XXXX together billion. Funding historic or in This the XX-month budgets is certainty Infrastructure use modestly to support period level while which Our to remain constituent from IIJA, and actions highway and healthy and at and to contract indicators of DOT

to and key With on IIJA, our as Act. initiatives the infrastructure enhancing by passage high strategic election manufacturing and nation's the infrastructure the rebuilding well the the X process Act legislative and XXXX Reduction capabilities local revealed CHIPS remain actions, national rates priorities, underway, note it's important Inflation bipartisan, and ballot

nonresidential continues Reshoring heavy projects activity drive Moving demand. to to for large manufacturing now energy product construction. and

contracting well on which remained peak, a construction, footage healthy from levels. square warehouse its in Aside basis post-COVID what starts were XXXX above from is

the June billion. $XXX positively XXXX, a While value annual for adjusted XX% not billion, increase continues $XXX of of June spending rate with at to from XXXX, spending construction wholly offsetting, seasonally trend domestic the manufacturing

and to of projects expanding automotive, semiconductors is breadth reshoring the from batteries Importantly, pharmaceuticals.

to from well example, quarries. Nordisk For North supply Novo investing Raleigh, to facility Carolina, which million nearby manufacturing near we're square X.X billion $X is positioned build our a foot

I provide of the the perspective, discussed Amazon, $XXX well-chronicled exacerbate That to led rate interest the on plans capitalize availability inflation recent read than foundation this and XXXX. rates data released In light for CEO to you this the later employment should housing earlier build-out monetary addition, in while affordability inventory sensitive early and to mortgage and next data The of geographically intelligence decade commentary on to year and high said, areas. whose into stages, end serving including in the company's alone. Relative to accommodative and center its as only today. Federal announced markets. on metropolitan artificial related is low more many nonresidential issues are infrastructure is policy these invest our policy well billion actions tech, residential impact big Reserve key centers over and in Marietta lock-in and restrictive more positioned effect Martin encourage activity, data to continues by market

in we extended to when markets. recede, XXXX, Marietta's recovery, Equally, highway we cycle the family, construction specifically to the multiyear the structural accelerated and construction single will key affordability the much provide required Beyond artificial many aggregates intelligence deficit headwinds be address an investments markets. very intensive street of reshoring in expect as fully are end which an of Martin expect in housing nascent homes infrastructure expected generational these and build-out

a well call for over our as us, instance, turn financial discuss lag, this single-family construction previous than we with Jim the cycles. I'll a lag, believe second more Jim? will abbreviated nonresidential now light but typically informs follows to history which Importantly, in in bodes to be quarter which activity, growth results.

James Nickolas

Thank you, morning, and good Ward, everyone.

adjusted results full The of is notably net mentioned revised generated our was business the profit the our second South million concrete today's in Building second of reflecting decrease cement attributable decline we Ward adjusted Frei businesses to of X%. our midpoint, shipment by the to due to release, billion, gross contributions positive partially X% quarter the $X.X Materials and million, acquisitions in the as of $X As quarter, at weather, offset EBITDA in experienced metrics half EBITDA. Blue both first decrease impact shown The and as of acquisitions. revised shipment and year wet and guidance the the half Texas of & most second $X.X Sons $XXX expectations. In divestitures related a Albert of declines revenues XXXX of in and Water and a billion quarter, well divestiture

aggregates established the is and Blue was number and market Water of gross improved shipments. acquired second inclusive or X% a to to than which revenues quarter noncash per records of offset strong the $X.XX. quarter. second per of profit ton for nonrecurring, That the operations pricing lower $X.XX as impact acquisition, $XX in purchase quarter related inventory second value contributions the of from more recognized Our record Aggregates fully ton pipeline gross write-up million fair accounting profit

strategy commercial be increased Remember, April, million by XX%. rates $XXX reveal our profits XX% daily and accounting of too, sold-out in June early quarter. shipping cement to Dallas-Fort operations May new plant wet volumes. Cement attractive levels yields significant profit strategic our by despite to purchase results primarily we this the disciplined structure Midlothian and and in $XX operational has Texas how of our and gross to impact, Excluding South and These approximately flexible Texas high-margin the capacity tons XX% per lower add third and divestiture cement the quarter, annual capacity ton the decreased and mill to in higher production our finish expect North the affirm gross market. impressive secondarily, million, concrete Notably, weather exiting Worth. its returned plants decreased cost related revenues again, profit which near incremental to concrete XXX,XXX driven

records measure profit improvements of due $XX $XXX cost pricing, with tailwinds. Our gross tailwinds paving decreased quarter, quarter energy energy $XX asphalt X% $XX lime counterbalance profit revenues million to and in second lower improved and helped chemicals to and million revenues large Specialties Magnesia gross year maintenance increased to line in and pricing prior and million, cost both million. cost and while the respectively, shipments. Strong were modestly management

long-term framework to business we and has capital our grow long for provided use success. SOAR the deploy

$XXX of repurchased Since share through February at During per the $XXX second both this repurchase share capital quarter shareholders dividends repurchases. a authorization acquisitions, dividend our to and over business and our billion shareholders first of returned $X.X average half aggregates pure-play total and XXX,XXX $XXX we the invested million we to payments price an through billion into in $X.X share. of deployed In on million alone, we year, shares repurchases. XXXX, returned of announced

our actively ratio the X.Xx, Xx pipeline, debt-to-EBITDA net ample extend Martin Ward. to capital flexibility providing will flexibility shareholders, to returning long of our strength and preserving turn to June range that, targeted reinvest as of sheet low profile. With back and investment-grade was M&A credit our balance financial all over Marietta I business Our our at end rating track call XX, of record our and while of in pursue the to Xx

C. Nye

is proudly as a Marietta Martin XXXX, company. celebrating our In XXth Jim. Thanks, year publicly-traded

X safety of result of of success the has decades commitment an Our our disciplined proven unwavering execution been the to and strategy.

aggregates-led operator required will now Martin delivering best-performing plan and safest, forward years and through XX our committed the we our while same leading your years, to addressing positioned stakeholders As our attractive time, shareholder to turn for next for cycles macroeconomic durable building the and sustainable, continue provide confident business remain superior the Marietta to well to we'll and the at driving and is we're value navigating instructions, decades attention look the to questions. industry's for most growth. We evolution inevitable maintaining come. If

Operator

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

Kathryn Thompson

of impact about obvious was with quarter? the in impact given terms parcel is the first that, some it maybe in through, QX and on your on how and And of our color think should the and peers much of weather -- part balance of been just focused the of then The the how volume facing? how profitability concept, we and you should understanding market, volume QX more of flow QX have better

C. Nye

the you question. Kathryn, for thank

look, was it. there's in a no big doubt weather QX, deal about So

at you DFW at is is So business happened I will what Central represent don't and the looking I together, X it impactful people suppose all look weather what then by said that was itself shipments. this areas last as division XX% our division fact if the is. but nearly Dallas of Texas year. as than most about it those what the we're of in the Central that QX North itself, Central in in Really, happened being to typically year the And us was couple remarks XXX% prepared division. with you And think in it if

record like in So we're Dallas a about if with business. inventory that rain million in we've blow flooding of significant the fair profitability, Midwest, that is did body that and that looking on that blow in markup took it what of QX. in I and and rain significant aggregates all record came totally at And was the to absorbed unit and $XX the serious profitability really taking

indicated as volumes sold-out all saw driven again, to XX%, mean, as levels performance. up and Dallas important, market Again, Midwest in we organic equals also that for very, were we've was rain with comments, his happened marketplace what that. I was down we about North Texas. what clearly, understanding but the seeing in is was cement taken our But important. us. nearly we of that in So And shipment by and resiliency And rain, very long XX% abated. that in near just as have Jim the strategic pricing with the happened I seeing what good defined in cement soon what turn was business

we think, the rain. Yes, think probably attributable it. it was in I a of So those I portion issues, of at quarter the to attributable least Do XX% was were what saw XX% to of economy?

important I that to are So we is what don't degrees But what modest overbuilt there? what's of interest It's markets the remember pullback. marketplaces. thing of am indicated Martin seeing Kathryn, are today there, construction seeing in really see rates happening we Marietta with private because

we're how quarter. But we be that. we're be expanded So feel cost during us at volume about the we're the tonnage fact fleeting. continued that's equally, We that. monitor what But and it. But perfectly at breakdown other feel going the Again, around over volume XX% the at like XX% with we going in part okay We're is some question had cadence to to we've thoughtful again, weather to went quarters. between like the doing. of over seeing value market margins makes we XX%, your about EBITDA of sense. But value think adjusted the

bit that going me Jim a through to over modestly. turn that to because that change Let talk is to you

James Nickolas

through weather, about et Yes. closer probably and in Last XX% of Because XX% year, with is the came to in we're in and EBITDA split this XX% Kathryn, second QX. came consolidated even seeing in XX% half of QX. the through what year, of year cetera, August, QX, QX July

weighted year than So more a this bit little QX normal.

Kathryn Thompson

I Perfect. may. And if Okay. just one follow-up,

-- how play projects, of Just look these in backlogs how on you you pricing in are and on Q. seeing the jobs margins? project What when the outlook -- are at or of is types obviously into type terms which

C. Nye

of important. at you, the backlogs, at customer up continue looking Look, two, they're Kathryn. number be use there. way, the non-res, so if one, Thank the that we're surprise we several to they seeing If looking continuing. degrees to going nature build, for sequentially if us. is looking see years, infrastructure at not and projects, to Number I think a of good look, we're shifts that's by that's we're we're a And end

the seeing yes. seeing yes. So Are pricing answer Are Are The we is is frankly, relative data is to The that? centers the almost I commentary seeing anyone. And in reasons X that that traveling. to prepared today, warehousing we lanes grow. remarks, indicated is in not. not Obviously, published for you we're all of is That's growing we and answer growing work, answer The factories? more relative yes. we energy? the with steady have a goes good we to that work surprise what that good to continues are and seeing seeing work

in percentage centers a is a the precision going You positive and past other and direction, you're seeing one precise have almost data each percentages basis other, they're in warehousing in today. lane those or going and on

of type that work we're the that's So seeing.

is seeing North shoots Georgia. green we're attractive because South not Kathryn. overall to of surprise small that's And in It's that we're essence single-family beginning and to a the again, in the very of the housing, a Carolina. your now. back see, relative population priced The right such dynamics. housing and traditionally We're that be single-family in that in to other And materials, of Carolina. question, of degrees housing more It's big simply again, tends this to housing thing portion

hope that's helpful. So I

Operator

Your Stifel. line next Stanley the of question comes of Elliott from

Stanley Elliott

could us maybe what high us to kind versus today year? we're of kind the end just the takes environment. difficult Nice work through you and walk this revised see sitting the as end the and through low some of the despite maybe puts of halfway get guide, Ward, here will

C. Nye

to. bet. You comments. with you Happy And Stanley, for thank your you. We it. I'm appreciate

I what think through. very a that managed team was actually given good performance, our

things. several So

Let's start with pricing.

that as for to locations pricing go deferral up, product bid our and previously the year in midyears relative pricing And mid-years thing reaffirmed for that we've seen, at XX% typical announced way, you've be the Water one the and already January Blue had to is that the the because XX% for yet targeted Frei been market-specific so to important well other for seen. midyears, as So still of much going pretty us. The that the is geographies. I California the that's as includes X business, think to by volume of we've this guide

told historically, see midyears So in. typically, I've put which the up in they're about in a you show you could of any given year, always year probably X/X really look in

when see than 'XX. not. the going midyears January think think other next we guide come more year, you more for words, and be our talk midyears notably impactful to back you're that in about in are affecting going I to this to I In year

the guide. Relative was half as here wet storm July ASP first is the that's we're year. the half Debby Carolinas. tropical to about through second and Look, we're the So impacted and in today results that early an clearly, weather volumes, how going here in thinking sitting reflects the of

that. living we're So

experience our of half the the take that guide year. for those into with really to volume build second trying we're so and the And events

much relative be Look, feel circumstances. shipment we confident with can, what as the levels. that given So to lower as that we've expected as we clarity hit will

would and flexing on sure are our control focused, our we're So is much teams as costs going making be demand. to very imagine, you cost to with

focused So that. we're very on

going time, that but And thing again, modest what bit EBITDA. out that provide bit wet the guide, CAGR think headwind see that's with for I a forget. is weather and I gives looking taken to half to but we've account same in year into this it teens, there's to is other mean had in producing in a not mind, where guide, EBITDA is of us really too, grew compare. inventory EBITDA XX%. put selling, close we're X-year and seeing builds XX%. XXXX we the thing can a think looking getting We I you inventory there getting And we at The that's close it to X. you'll big XX%, But to of difficult even drawdown, impact be to EBITDA little that the that's at And keep number. something at easy a to by margin a you. One at given a we're grow. the we're But we're going high in

that we feel puts numbers foundation, relative we of, in good into to going we XXXX, particularly attractive about about a that the us of that we're thinking as and numbers increasingly we're year the proud Stanley. very think a again, So as very start place half again pricing second

Stanley Elliott

Perfect, luck the back Best in Ward. half of year. the of

C. Nye

Stanley. Thanks,

Operator

Grooms line comes of Your Stephens. Trey next from question of the

Trey Grooms

work about the good environment. And Stanley's tough in comment echo a I'll

C. Nye

Trey, you, very Thank much.

Trey Grooms

look call, the about wanted on guess -- some -- help think expectations mid- with us maybe what And of your was talk front, singles mid-single I in can I of kind to we single the bit kind broken seen singles little activity you've of Is the to deceleration at of light kind improvement. year, of for the you high infrastructure you the in that. activity Res of your to slowing as the there for was back world these view low kind to addition kind end of for? these as I've looking down low kind or out the one expectation mentioned kind relative recently new kind and out any of I think, I was bridge of kind past down. If what of some you've I the So kind nonres you markets of of on we've was some in weather, and of last think, seen main a got really there. were of of there way and to

C. Nye

Trey. a to, Happy And Sure. great that's question.

So if think actually work from I'll through the we it, bottom up.

res, to in was res mid-single So saying, low to digits. down we be previously digits we single look, were were going

it, we it's mid. to in So going we think now see as look, be

that's the lower end to relative we gone digits nonres, of said, if I guide, be we've down at we're mean, the mid-single see So previously look, had looking res. If to you original to to it, high. going

on same that Not the view is single we heavy going res. taken not down to because high that's really have to said to We we we've So that, digits. be good. going relative think be

it. of whether of timing dice year weather the and division, you're weather once be There year. And a issue we've going is late to It's Central to down, going like be we're digits digits. have be toward would rolling take I said part a We at increasingly business. heavy mid-single to think we frozen it's now calendar bit what get businesses actually side thought impacted time. But modestly is high else. jobs. go is assuming we're we November relatively public good. that's to what done a going public more up We of be and think to single had These looked really, little to going you're than the big we to on little going going December. we've the Because anything a are of good if be a October, bit to let's have frankly, this normal won't assume in

be on going the going that's guide we pushed you okay now as And go and to to that's not into around work, I bit And, that to helpful end XXXX. So again, it It's away. the puts of infrastructure. hope relative know, users, a with you. pulled a specificity Trey, going be that's to to to back will we're be for perfectly the that. But relative that lot work reasons,

Trey Grooms

That was helpful. absolutely. perfectly Yes,

I Just could one one, one if sneak last in.

I as mentioned like sounds the good your Water are Albert expectations not Frei integration And as better. of they're you at Sons performing it think complete. and that Blue & least if

maybe we should where -- about little this or activity If And guys? seeing just you the tuck-in what's still outsized deals we kind more for could been of for bit completed kind also given year, a I like? of recent where you you're one. deals there expectations? Do comments doing? mean, go you you the pretty And chunky pipeline for think one out the some more the benefits could deals, exceeding there big look on that looking just you've do X be pipeline. be they're potential you think should M&A Or

C. Nye

questions, Great Trey.

thank all that. you So for of

we'll Frei both Blue with So start Water relative and integration. Albert to

tucked So are bolt-ons. are have in. They They pure been you're mean integrations from our I done. those perspective, right.

back integrate is people And typically process systems and the efficient. we of the integration Our extraordinarily before. weekend. that over a onboard discussed office literally course and We processes

what a on over and happened. and exactly that's our to typically tickets people over the getting Friday in having and have Martin weekend, and is intention systems, our do So course the open Monday scales, of training a our of going them close Marietta lot

business. in folks are ever aggregates-led numbers part this right three, safest been mean to acquisitions we've an with I able quarter say that after safety extraordinary. they've from mentioned So think rate as extraordinary. one. forever degree we're is performing businesses two, now, home my commentary, these a operationally, we've the my Marietta be who They're view, was now. got that had. delighted the that Martin opening in number of happening really done they're know to perspective, Martin their very about pretty that Number Marietta. an have of we those to I a be has done, that Number incident well, what's And

will will one, responsibly several businesses plant, Now like, Marietta things. that we is synergy the is these equally we Martin what if look ton. a call corporate businesses we it, average. those at efficient. cetera, that, going important, more pricing about make Number stock, continued invest But continue let's By rolling to to notably the locations think realization mean, and think et in continue $X-plus fixed I below to and actually

that we that's a if to back we I that of think continue So targeted that's for for coming would on through businesses. fact get years. and had a on persist those commentary they're going that have acquisitions, they upside to Operationally, us will near-term expected way give number We go the to on the better midyears the to likely the while. continued

way, think be we Water, So the the be and there's continued going while going to Frei in from from yet. Blue and coming us to Sons, to a by Albert & goodness acquisitions that's the from California Arizona for

does of of look almost be to be what the bit entirely The leads the look to businesses. continues like? is, pipeline a part of tend into pipeline aggregates that that a continues what your And they pipeline And question, second Now attractive. said. pure you blend to the

you are have A of chunkiness have more tuck year nice goes hope them little Some of bit some we'll for them that transactions. We of on. on the as lot to them. away a of

M&A doing of for it Marietta, well. that's us that. is doing a continue is that DNA, you know, know, in what's that I Xx As M&A of But what's this and and we're as of ample what dry well you our Martin think very competency as gives really to and sitting something billion doing core gone between leverage proud we've transactions. is going in over net $X June powder and of a at we're out year, XX, if worth done

that that up, too. for some you thank of cleared I Trey, items So, second question. those hope

Trey Grooms

color. Great Yes.

Operator

Your next question Jerry Goldman from of the Revich from Sachs. comes line

Jerry Revich

excellent wonder had based right you can't this count we're ask seeing share just that had how the this elsewhere, I back across I maintenance everyone how repair across folks and you're that if inflation from market thinking impact volumes the we're pricing, on obviously, Ward, you board, up. year, to get seeing of pricing we can does you succeed conceptually about stubborn haven't on level and ramp to volume 'XX,

on prospects So potential what and are based you've I'm year-to-date? based everything wondering, the what for inflation. the I price seen guess double-digit receptivity and on of you're year seeing again increases in 'XX pricing

C. Nye

you But that as into infrastructure to on blocks I of go as think a we stay next we obviously, building give very definitive year. have, about think guide what I Jerry, we'll But is for the going attractive. more

markets in has our think I bottom. more than found housing

to going get that's think I attractive.

attractive. I think to heavy non-res is is stay going and

think commentary, I the and the on the I going is indicated seen lag between to abbreviated. we've in nonres As side res be light typically

discipline sure reserves. of don't adequate think body significant we up and think a for like Marietta I think mean XX XXXX reasons, a have look make public got seen us if today, think you pricing company to reserves I the and years the be punished on sets starting business I for this has at But valuable is think look time, really historically replacement I same attractive that about reserves. we what for good. to these we among is hugely At this vision really are a that for now change. have my seeing years the step you're people cost at I rates extraction having that Martin should beyond XX-plus we've in and say, having current pricing. From perspective, change to the look for that appropriate. as reserves. of the relative at Frankly, a a is looked the would step you and number And others, that

talking probably levels. that continue me we will back come you're probably we'll be So in differently. yes. in will answer what It And does that more you at ZIP that And does about, about is I on February, be new of again, to I and code think that that will. I think the help to but you what with tell materially not it inform definitiveness would encourage pricing think think

Jerry Revich

better unpack 'XX year-over-year expansion that's if how in can terms that and 'XX, that, aggregates Jim, gross the half in drivers cetera, I outlook? and of in Super. the ask the which right? the the versus Tennessee you're looks parameters. is back California, And on profit you about And the is the acceleration that's a half much of half. margin than the It that behind of driving line case, can X first gross et points you, Is like top in midyears basis, guiding to back of midpoint

James Nickolas

you're No, Yes. ASP. are correct. star show, right ballpark numbers been of growing always, as that has those The the

Jerry. the So second that's the driving improved that's flowing of in through half year. primary that That's margin, the metric

prior inflation Secondary as impact is is, abating. on. year the I goes It's as mentioned in calls, moderating

by back not coming X X are were but at inflation. pre-COVID, pressures large, baseline they So the of where to down, points cost to and cost course, on percentage

So X things driver. those main the are

Operator

Pettinari of line question next the from Citi. comes of Anthony Your

Anthony Pettinari

about talk a could think Ward, as next environments months XX in you more you little fiscal funding bit maybe state about 'XX.

DOT to I you're of not that's down about walk think the just wondering some general fund be after growth 'XX of one-to-one where as could excited which growth. kind a strong through of Obviously, versus the for suggested states of was think kind the data could states But and there and if you XX be fiscal lighter in could you months? next seeing very that spending. some most years number spending maybe the

C. Nye

you appreciate it the question. Thank I very for much.

through mark March just let's together. So

infrastructure Texas because stream That's to like they nice before. XX-year an here DOT where side, years. we if using different to billion if Colorado, $X.X from 'XX, FY going 'XX. they're into at least even available at at and work is the to Carolina. were me, look for backyard increase had ensures passed $X.X that going several And X% If budget a that on part XXXX supplements in in mind, a look infrastructure expect if if have look, going year. to onetime And Florida's But fund they $XX.X for thereafter, of we be ago. we the we're up in prior FY even there, few That's infrastructure ways to are So to $X.X lettings that's in X% that's be expect, Colorado Georgia, up And at to taxes XXXX, to about $X.X 'XX. in that to again, lettings, budget to to looking $X.X their And I'm That's looking what's it. that's basically fund XX% next funding at really going of 'XX Again, a next started year 'XX it over that's go year, spend. from attractive going only DOT at keep billion North of 'XX, that to for sales Carolina, a about And Carolina top make here we in billion was over budget. If billion. looks going their they're years billion difference. Equally, billion. year. Florida, looking their to looking over it's a where budget, North looking you increase But we're be of if notable consistent bill. beginning looking down. North at see FY we're going equally, DOT look interesting increase one in And of this is a at forecast

Texas if about North budget up, a we is we states, XX is looking is Florida think top up. up Indiana up, perspective, up, Florida our about is is base is a in FY go at up, punchline in at and Texas this, and looking is Carolina base we're from $XX.X is is Georgia billion, Arizona look if Colorado of we're 'XX, budget up, at up, of a So what $XX.X is billion. The base

And on state look places it be and a up thought XX%. good, durable places and states part where of an and change that DOT top And think is look question some to wanted bad we confidence period awards. And at to I don't wanted the at I basis, year It's states that basis of budgets about where your we going highway budget it going next outlook one equally, look of look the be. at it, this when we me. go attractive like LTM in the those Minnesota. think on X the are And that's budgeting let's down. again, process. have we that there of in continue are attractive how a with contract that June DOT that's is awfully to, LTM see billion. And back would his referenced $X.X lot more Minnesota put to really, and have look the to we California to year, going looks where to again, dictated broadly are in midyear that keeping context, if in we for they as tomorrow, to states, today Georgia it's if SOAR comments, step moving had from to at be XXXX But California Minnesota XX But an And be simply that's Jim long, contract billion contemplated. these time, place call a see is would I that down. we to that's to more had So what have a a going to look awards about they're those over how people is very DOT budgets invest. as so is. imperative in rivaling and One about importantly I we to we have $X modestly on

So Anthony, helpful. I hope it's

Operator

the comes line question Castillo from Angel Morgan of next Your Stanley. of

Angel Castillo Malpica

be drill a strategy. any XX% kind might price may Just sense of price the some talk that dynamics more be of volume that the what in or on that related bit decline to and versus kind driving more about Could kind kind or of volume? there is kind over that little competitive the increasing the of of more toward a occurring greater to for discipline just maybe of you volume wanted was of market over

C. Nye

we interesting make there took deep or to was concerned be that mean doesn't be that be wasn't. wasn't world the same sure because somebody that very do weight the alarmed I aggressive. I what markets trend can do as you're CEO You by, dive it to tend and on MSA we to often to because too, spoke our of far. travel needed we The that price ratio in overriding an know that is to see intellectually material just some you or in about occasion commentary. what I recognize trying of And it something and

Somebody can drive product. of can any things host different different be whole a that on of in There just be markets. behavior long can degrees given

believe we it any believe causes value We seeing that. see not that preference overwhelming concern. we're in the anything stated So in Obviously, a We always numbers. that's any on we what us we've We too thoughtful its market the losing volume. in we're and for one pushing over we're are to proving are be much. same it's in efficacy occasion hard financial At that the results. time, seeing around too going and

have presidents have And do in so we it's VP go we a and through. it a division this but office, with process It's our do that dialogue we more here importantly, GMs.

of that degrees about, softening at guide it about So to per else, anything I then was But to there's if than really one way I I about pricing. and specific any event concern look have think now. you that's the Angel, weather would a want of It obviously, that more best were and can there area here or no don't se. I right talk you, markets on

Angel Castillo Malpica

a maybe business. And the helpful. very just follow-up then cement That's on

thinking kind weather kind these we from of see should third to returning you the the we or, about of expansion guess, that impacts? of how in or kind being close about sold us give hoping of of us terms talked I full You profitability bit out and as stuck to could little remind I was the [ normalized the of how a color ] of in business quarter. kind ramp-up flow-through the volumes, be more that of quarter in you

C. Nye

Sure.

a that business in we're X.X%. that But doing tons strategic I'll on actually at integrated, imports we And we'll we vertically added long a relative is speak organic that more speak we're up driver, about weather an simply. that where a around just what to XX% that we that's couple have waterborne XX%. the way obviously, that there. shipments one looking can saw minimal. do we be called And that its in capital margins be But was business. And what what the part the Jim where we've it. took that by I of pure down is about mean and will market was that pricing do happened and we the to again, the we we're DFW, thoughtful of be if is aggregates downstream business, It's saw where expand XXX,XXX leader, ask give what that you underway, One, So I'll interdicted in bit project of do we the to that in quite things. cement. to to and and Dallas, ability through reason really he naturally takes have because gross

If And cement so we look that we are want what we we is, at in give pricing expanded behaved shipments gross margins, which we me down, fact strategic organic and behaved, for look is were for you market. And it's sense Midlothian. the that Despite us at Jim, we if invest the how how volume. let it to well. about that turn can that, in of where he why and capital to a think process still

James Nickolas

Yes.

quarter. call as be project, Mill will we So X, the finish it, this that completed

production it's tons per know, annual year capacity. of you XXX,XXX As

disrupt or per that take, we We hit full market don't on with been be quarter. thousand X. that give speed So responsible about we've marketplace. the We'll commercial in volumes the ensure those feathering won't following day XXX-ish strategy ton in to

but this storage out, on events helpful for is enhanced come result flexibility, wait different react more to us, our customers, in terms volume, that also of of that to will a, more to operational be facilities, a when ability but as to So project. comes importantly, time

improve volumes looking course, us. to those of and forward we're So available become for to going margins this as

C. Nye

conditions question we back as do better think in see here I in Dallas-Fort we the got as sold-out were at And weather what quarter happening part your last indicated ended. we of Midlothian. the volumes to Worth, near Angel, was

puts it. around that bow I a think So

Operator

Garik comes question Capital. the next Your line from of of Loop Shmois

Zack Pacheco

for couple inflation IIJA of It's Zack to outlook other hearing therefore, We've siding real forward, go. delays. dollars, Maybe morning. Appreciate Garik of a that some on this to through into dive kind the moving those state base guys funding quickly. walking on questions Pacheco causing actually just you into been eating

dollars are seeing all? flowing are truly guys curious that at the Just through if Or nicely? base just you

C. Nye

assume haven't I of into think to inflation naive eaten that. we'd degrees the be

before, so. out that for think And the I the at time, the the volume of we signed we the thought The yes. perspective, end day, you a But people so see the year was said Yes, trade over volume the law. inflation? that come of when being whatever Have eroded would went I've in answer from of that that by back seen very IIJA, we it would Martin Marietta we're selfishly is pricing seeing? some

to what's think Congress so underfunded United in because continue of that one-hit wonder. In I keep government IIJA invest too the decades the mind in the infrastructure. with keep important will think part infrastructure mind, I don't in is way States I woefully to other is we in went a the we X.X floor and changed words, think simply

in materials where in to the product. is. And to a into return yes, this that our it time, time, infrastructure. extended this provide hard sure volume for At some has for simply out same above of valuable a time taken spec the at invest likely At the much-needed again, of degree of reauthorization work think turn and allow period we many make ground appropriate United same we us see that the nice I States we're I believe to it inflation. in because will or that this act, very getting the respects, are would see we're something been to of a when So

se the So public articulate that important I about There's it. it's perspective, to new be think it per because to the think in we that, works. that think way able but investing that's I our from to nothing

Operator

Truist. comes Keith Your of next the line question from Hughes of

Keith Hughes

season your increase To cement. best cement. earnings point, in the back Questions pricing is during I've seen pricing this from tremendous

contemplate that further Now is Or something year? to sold is have is there be year? going calendar that back we'll to for next this increases out, to Midlothian

C. Nye

in that not September. we've dialogue certainly market No. told looking another Look, are have yet to we the September. it's Obviously,

the very and lot building across in felt XXXX, And that obviously, years. Martin a States. in have well what most goes, United TXI the markets has Dallas materials Directors I the was said a side how Marietta our simply It are that at heavy it But that when like might QX But is of Dallas-Fort of single to really there XXXX And to in Board market. disappointed. time, the cement attractive So strange Keith. Dallas a back not XX cement market next I again, clearly United wet. and Worth we'll had States for see remember market different I buying was was, be good because

event, watched percentage to The data a public conclusion ready any I've DFW we tell have going come no. your going our I But attractively So answer out, Yes. on with to haven't dialogue more your a have we're Am seen in September? that's point, I reacted I in to what like? market told is as has has customers concur that than look that on pricing a basis. to you

Operator

Your Adam from line of comes question the Thalhimer Davis. next of Thompson,

Adam Thalhimer

that pace the in should the is? read Share heavy repurchases. year. outlook a was of the how That Curious we and what first really half

James Nickolas

-- the we year the there's over $X on simply, well that ratio. in are billion Well, target is below cash leverage our sheet. into quarter One had couple that. we Yes. with things a the And with go balance of entered

at of But thought we attractive was of it part as We price course, was So undervalued. level it. stock that thought well. was an the

it's as a -- balance quarter. coalesce simple to time, same sheet as and buyback those the We're try that. at this opportunistic So avoid that's lazy just stock our pretty about really things

Operator

question Jefferies. from Your line the of next comes Phil Ng of

Collin Verron

for the seeing office the trends start maybe some in resi you're that quarter the volume are What X% decline perspective? thinking year organic aggregate of into to just the This about you an called about Collin given in guide. to just to ask Phil. wet third on trends back and is how wanted from those the And half actually the that out? and organic you here, softer is of X% baked the the aggregates I warehouse markets

C. Nye

question. those this clearly, forward. gave now out Thanks really quarter relative fully but they're I point fully some just I candidly end break thought, up, going we this integrated, and wanted at we some, I that operations users process, through going at think about down, to Collin. thought to try for be integrated. We integration for Thanks, now Yes. because are mean, the are what were the we that going it et cetera. shifts sideways, helpful all organic is color I to relative to the point the

Point a way and and what will busy eventually August now think Beach up But be as wet been from, the its things looking time, is again, be year. has said, and literally trying navigating area. second July from At our we're if right now, around half infrastructure, we're to the I we're so get the right wet of year through between the second half Greensboro-High heads that to at same the it's a biggest making the the Myrtle with the on far going what what of hurricane somewhere Charleston fallout we

in term So swing near to markets. this of that the longer driven those extent may the be be longer certain going more it's year, of what the sets more really be to the factors the effects in and when in this are year, can there in winter term, by term and

and it asphalt we think does really very in we as December. factors swing So happen. That but doing as those Colorado in be that we doesn't about about think granularly will your were happen I paving can remember often, volumes years but And more infrastructure.

Collin Verron

question. -- I to here you quickly the that think monetary one accommodating show we see policy starts how back, this your year, in shipments? start Great. just later That's do in helpful. if follow-up up guess do And some you more

C. Nye

investment keep they subdivisions quickly we that's the curb have to as And see you mean, caption utilities way, which pent-up from because will that starts across same and homebuilding, the reasonably we're it the Yes. a moving, homebuilders can you're right in it as an think problem, as they turned it think the chronically in the once really those tends footprint that I we and private, policy we that's what in move early of to hole they And have interesting a could into. move that low. pretty very until mind The have, that run they looking do our to will relatively going are and perspective, be local alacrity home to be moving want? can't one be, streets. it's in more got portion the I demand. however, think now. many tough Raleigh, go Raleigh And instances maintenance. they of will residential that needed what's is high-class for if find We made that to issues to with accommodating particularly for thing. that going of Collin. Is people the by land, inventories in that to XXXX think, a to the be frankly, municipality It to It et up example, you've particularly Does the gutter. will say a fill sidewalks. using It And they've portions case. the people cetera, show I'm those over because area but in be our

side, think So to behind And I all what that we abbreviated infrastructure does it you're a attractive more that setting. think we period, so. will on the I that going resi light in be that nonres see what come so, underlies think see continuing mean

hope So helpful. again, that's I

Operator

of comes MacGregor question next line of the Longbow from David Research. Your

Joseph Nolan

Joe is This David. on for Nolan

parts that. was updated year cost on moving and touched the some could outlook discuss hoping provide within just you for briefly, the You an COGS but I of

softer your was what in are just mentioned on market? cost-cutting focus that wondering, I the guess of some you controlling a You costs. also areas focus with measures can I on

C. Nye

Jim, to, I'll back go first and on want you we're ahead where and happy So to focused... the take come

James Nickolas

Yes. Yes.

services old a the maintenance We've rather well per general we remained reduced, contract to do come Then slowly is diesel be again, under-absorption tailwind down year half down. full volumes come So down It's have more COGS little lower precise ton, a have built as up as second guide it's bit as year. -- view. second last this versus coming and so bit well, we in on second of, outsourced The And inflation on year of have half seen -- of of reflective the X% the some elevated. costs half volumes There's of time. that repairs course, over as have that's in, been versus helpful, improvement too. services. our

C. Nye

really think and emphasis seen hit be repairs Jim focused very a, come Well, I also those seeing going But we're b, because what nicely, what percentages very, the look to we've is like; we're be. general the up to down. maintenance disproportionately. on going Obviously, inflation

on up. tailwinds a because we that in diesel of think situation, bifurcated from keeping you we've But do again, I better. half are repairs see as over We nice some better year. electric be our will always seeing though, portions a in hours particular. time, a people But clearly It's the managing We've managing the our seen been of energy. safe areas coming trend of we our will a second will have focus modestly bit seen unique

Operator

James. next Your Brown Tyler question Raymond of the line from of comes

Patrick Brown

You little But about not had Water, if earlier. year. out believe a West XX in with conjunction communicated this was bit early I'm in of midyear's Blue I talked a there you mistaken, notice July the midyear. already

acquired prices harmonized So when your being heritage price you portfolio, Because your how heritage increasing. close assume markets I'm just how also at are operations to just I the are markets? West's recently look curious though, to

you next wouldn't be years catch-up to there's why feel you do over there? And So as few harmonize like portfolio? that this just pricing whole tailwind the work a sizable still some

C. Nye

you question. thank for the So Tyler,

X things. say would So are we I closer. One, getting

closer U.S. Western We harmony are in getting ever the to

can soon, start music. pretty you humming So that

to here's the have going But in thought for not you that I I that's there. sure other harmony think would I'm West. the for we're be looking

in been West Marietta heritage be Martin I a geography associated at there businesses premium be costs host never, the a Coast associated that number. geography. think some entry look priced have ought in to leader to barriers look California, just at of doing should we cost think business price I we things. The as in as got of the a West because businesses with below that times businesses my because And should at a view, with in premium you've California

your yes, delta like as Blue the there elsewhere of to and between Marietta. my average over I think places rest there be through in the we Tennessee realization The And should a the answer continue synergy now to Martin some and Now in there's go of is question, should recovery locations process Water indicated, right commentary, ton those be. earlier $X as heritage in of the I operations.

closer goodness answer of to that. The harmony where take because, we that's and the we look to And the different. in to operations of would that will as point, we're Carolina, at as make be lot me point materially yes or portfolio move your our an Blue It period at Georgia spoke there continue that endeavoring before. to up get obviously, price heritage or and Tennessee should to a sense is Water the that those look extended business. doesn't North well profile should of go So to up continue as footprint I

Operator

Michael Dudas of question Vertical comes Research. of the next from Your line

Michael Dudas

in notice XXXX expectations. Magnesia for to the the up relative the You that outlook is presentation did

a business any next be business? the a that that reads business bit or quarters? economic flows or how on minute on thinking activity indications that helpful spend maybe about on general several to little And So can there over is

C. Nye

Happy to. of different And businesses a there. it's really tale X

So if we're they looking just were at revenues, comments, Jim in flat. as his said relatively

is have This Now a at more markets not world. and U.S. though, business. just so X%; shipments, business this what XX%. well. And mind, that, chemicals offsetting pricing we're up in up double-digit we And that chemical regional the a is around the look gains business than are around chemical we is lower keep lime, there seeing as as cover we international

down, volumes up. So saw saw we obviously pricing we

control part high So Magnesia are has the of what business to we're in is in dynamics is seeing you're steel able seeing historical And had been utilization a that, same fold. average, terribly XX% I'm them aggregates and above been a costs overall facility going not been longer-term about We've that's a revisit Number they've that the contracts, our several lot business number. a of two, well. pleased just in same fundamentally those way. Woodville, reset there they're Specialties as team One, do levels well. And in that again, really the the with remaining what different at circumstances has long-lived commercial make Ohio. got in sure business a That's position and historically reserves aggregates. our their contracts, strategy

the Samborski costs the We And Manistee, have of team that business, those. well in seeing sides managed frankly, would time, both that we good same the business under and pricing need looks to years fundamentally be controlling for in long-lived really value that Michigan. At well. numbers circumstances. economic it and than based the in his have volume different same X And we're EBITDA ago or controlling Chris getting have today business, reserves that brine X on

So business. pleased that I'm very with

any it safety what's wasn't The a other that numbers Their direction say, And And in makes in And have the in dealing very in going et probably of thing gotten just underscores our the a the also come it year with see sector setting EBITDA think 'XX, of too, really performance part is likely And they're cetera. look business pleased year. of this excited Martin economies we're that that about to you going I'll that with. Marietta business tougher efficiency I what of the but that business. of like your record one question, type notably better. 'XX, us this is 'XX, with. to that's

Operator

Research. the of comes Your Tanners Timna next question Wolfe of from line

Timna Tanners

earlier I us, to rates, you and similar -- activity some election. from one interest just in that hearing we touch the had could. around because about the but remaining pause wanted wanted about ask the there's on election want I if to are I One comments to something I

maybe into as the dive especially relate and IRA-related if given potential curious demand so could to also the they risk projects, election? you about any the outcome But of to of EV some that. And

C. Nye

I to real So think we're a don't public election. Timna, -- slowdown thank seeing you What in so we're seeing relative not much. the

chugs that think I along. So just

year. some I half first effect that And can seen an of have the in we've on think think that's of what private. this I probably

that So the I of Timna. I I to otherwise. Reduction like pretty would you just why, we're think Act. think things things. or IIJA Reduction One, time. probably looks and see think continue Inflation reauthorization this on public relatively to similar administration like if here's you democratic a that's I next then a My the Look, in several power say and have Yes, on what Inflation guess basis same. Relative And more Act could agnostic. look IIJA or reauthorization is that's the

in to amped Texas. I that you Republican law well otherwise, at Dallas-Fort where at to the from crushed on little and largest at commerce you the otherwise. shipper we more to probably I-X the keep we've I probably that's and think to that's in again, us. And you administration, whether think a and going And the in the we we depending commerce a either big that. be less to way, looked on be Southern tends industrial the on on stone and a or and looking now we're by think honestly, perspective, to why move passed, you the Southern. they're continues and the infrastructure to positions have And I-XX the I-XX if change. passage, our factories, I-XX corridor, that major we investments energy it's think the have #X be Timna, endure. Frankly, it that up corridors, of energy if places or last whether in industrial, that's so to and Canadians several election and awash, Kansas either perspective, we're well by have bridges, to mind, if build that important IRA. Worth it's population way a suited I-XX on buildout and shipper again, driven #X by over have I going B.N. we relative be that's to at are by almost this continue the rates we're we're building corridor, commerce rail, almost happening DOT that reason. we look again, probably to what's be, are think your bought the corridor, XX% from most follow where big highways, of City And the around and they back and again, bit where be going we extent half to it's happens why Antonio pass CSX, truck whether of regime to what in initiatives are. on can and We're have along #X made and for goes stone we're where largest happening going whether roads going if And agnostic on corridor Norfolk of what to on the good these it's U.P. on And corridor is But the and what's people San with going Houston. And box, going that in streets, budgets, going be activity that elections have I it's relatively ballot it marketplace see of trends at driven railroads businesses love the the an after are going by seeing It's durability.

Operator

back now call Nye. at the any to I this time. would like further have not to questions do turn We Ward

C. Nye

Marietta has today's call. to resilient for joining continue a built and Martin all you cycles. poised Thank conference durable earnings macroeconomic outperforming through business dynamic

delivering Our carefully continue Marietta's compelling footprint underlying third sharing future. We growth value now the sustainable Martin country's opportunities our plan, in the confidence quarter unparalleled superior fastest-growing attractive forward fundamentals, look and XXXX coast-to-coast results the dedicated reinforce curated into in fall. growth ability to with and our teams, to you strategic shareholder and in well-defined markets

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

Operator

concludes your may disconnect. today's conference you This for participation, you now Thank and call.

Martin Marietta Materials (MLM) 8 Aug 242024 Q2 Earnings call transcript