Q1 2026 Vulcan Materials Co Earnings Call

April 29, 2026

Speaker #3: Please be reminded that today's call is being recorded and will be available for replay later today on the company's website. All lines have been placed in a listen-only mode.

Speaker #3: After the company's prepared remarks, there will be a question-and-answer session. Now I will turn the call over to your host, Mr. Mark Warren, Vice President of Investor Relations for Vulcan Materials.

Speaker #3: Mr. Warren, you may begin.

Speaker #2: Thank you, Operator. I'm joined today by Ronnie Pruitt, Chief Executive Officer and Mary Andrews Carlisle, Senior Vice President and Chief Financial Officer. Before we begin our prepared remarks, please note that a press release and a supplemental presentation related to this call are available on our website, vulcanmaterials.com.

Mark Warren: Thank you, operator. I'm joined today by Ronnie Pruitt, Chief Executive Officer, and Mary Andrews Carlisle, Senior Vice President and Chief Financial Officer. Before we begin our prepared remarks, please note that a press release and a supplemental presentation related to this call are available on our website, vulcanmaterials.com. Today's discussion may include forward-looking statements which are subject to risks and uncertainties. Details on these risks, other legal disclaimers, and reconciliations of any non-GAAP financial measures are defined and described in our earnings release, supplemental presentation, and other filings with the Securities and Exchange Commission. For the question-and-answer session, we kindly ask that you limit your participation to one question. This will allow us to address as many questions as possible during the time we have available. With that, I'll turn the call over to Ronnie.

Speaker #2: Today's discussion may include forward-looking statements which are subject to risks and uncertainties. Details on these risks and other legal disclaimers and reconciliations of any non-GAAP financial measures are defined and described in our earnings release, supplemental presentation, and other filings with the Securities and Exchange Commission.

Speaker #2: For the question-and-answer session, we kindly ask that you limit your participation to one question. And this will allow us to address as many questions as possible during the time we have available.

Speaker #2: And with that, I'll turn the call over to Ronnie.

Speaker #3: Thanks, Mark. We appreciate you all joining us for our call this morning. At Vulcan Materials, safety is a fundamental expectation of our employees each and every day.

Ronnie Pruitt: Thanks, Mark. We appreciate you all joining us for our call this morning. At Vulcan Materials, safety is a fundamental expectation of our employees each and every day, and I am proud of our industry-leading safety performance that we carried on from last year into our Q1 of this year. Another key expectation is driving continuous improvement in our underlying business. Our teams delivered a solid start to 2026 by executing well on the commercial and operational plans that we laid out for the year. We generated $447 million of adjusted EBITDA, a 9% increase over the prior year. Gross profit margin expanded in each segment. SAG expenses were lower than the prior year and adjusted EBITDA margin grew.

Speaker #3: And I am proud of our industry-leading safety performance that we carried on from last year into our first quarter of this year. Another key expectation is driving continuous improvement in our underlying business.

Speaker #3: Our teams delivered a solid start to 2026 by executing well on the commercial and operational plans that we laid out for the year. We generated $447 million of adjusted EBITDA, a 9% increase over the prior year.

Speaker #3: Gross profit margin expanded in each segment. SAG expenses were lower than the prior year, and adjusted EBITDA margin grew. Treading 12-month aggregate cash gross profit per ton continues to move higher with strong realization of our January 1st price increases and our disciplined approach to operational execution.

Ronnie Pruitt: Trailing 12 months aggregate cash gross profit per ton continues to move higher with strong realization of our 1 January price increases and our disciplined approach to operational execution. Currently sitting at $11.38 per ton, we are aligned across the company to drive this highly important metric to $20 per ton and win the future in aggregates. Aggregate shipments in Q1 support the anticipated return to growth for 2026. Shipments increased 5% compared to the prior year due to both improving demand and fewer extreme weather days than in the prior year. On a mix adjusted basis, aggregates freight adjusted price improved 4% over the prior year's Q1, in line with our expectations. The sequential growth from the prior quarter demonstrates the success of our 1 January price increases, discussions are already underway for mid-year increases.

Speaker #3: Currently sitting at $11.38 per ton, we are aligned across the company to drive this highly important metric to $20 per ton and win the future in aggregates.

Speaker #3: Aggregate shipments in the first quarter support the anticipated return to growth for 2026. Shipments increased 5% compared to the prior year, due to both improving demand and fewer extreme weather days than in the prior year.

Speaker #3: On a mix-adjusted basis, aggregates freight adjusted price improved 4% over the prior year's first quarter in line with our expectations. The sequential growth from the prior quarter demonstrates the success of our January 1st price increases and discussions are already underway for mid-year increases.

Speaker #3: Pricing continues to compound across our footprint. Aggregates freight adjusted unit cash cost of sales increased 4% compared to the prior year, also in line with our expectation.

Ronnie Pruitt: Pricing continues to compound across our footprint. Aggregates freight adjusted unit cash cost of sales increased 4% compared to the prior year, also in line with our expectation. I am very pleased with our operators' ability to execute on the Vulcan Way of Operating to drive efficiency in our plants and help mitigate inflationary increases in our input costs. Better weather this year allowed us to make more progress on our annual plans for stripping and project work than we did last year's Q1, impacting the total unit cash cost of sales year-over-year comparison. I am confident our teams are focused on the right things to continue to enhance our core and drive compounding improvements in our durable aggregates business, even as the macro environment continues to be very dynamic.

Speaker #3: I am very pleased with our operators' ability to execute on the Vulcan Way of operating to drive efficiency in our plants and increases in our input cost.

Speaker #3: Better weather this year allowed us to make more progress on our annual plans for stripping and project work than we did in last year's first quarter, impacting the total unit cash cost of sales year-over-year comparison.

Speaker #3: I am confident our teams are focused on the right things to continue to enhance our core and drive compounding improvements in our durable aggregates business.

Speaker #3: Even as the macro environment continues to be very dynamic, we remain equally focused on opportunities to continue to expand our reach through acquisitions and greenfield projects, including several bolt-on acquisitions we expect to finalize in the coming months.

Ronnie Pruitt: We remain equally focused on opportunities to continue to expand our reach through acquisitions and greenfield projects, including several bolt-on acquisitions we expect to finalize in the coming months. From a demand perspective, we still expect strong public activity and improving private non-residential opportunities to drive year-over-year shipments growth in 2026, and mitigate the ongoing challenges facing residential construction. Trailing twelve-month highway awards in our markets are up 12% from a year ago, and public infrastructure awards are up 17% over the same timeframe. These levels far outpace the US as a whole. Our footprint is advantaged, and this public demand provides a solid foundation for shipments and supports a healthy pricing environment. Legislators in DC are actively working on a reauthorization bill for future highway funding upon the expiration of the Infrastructure Investment and Jobs Act later this year.

Speaker #3: From a demand perspective, we still expect strong public activity and improving private non-residential opportunities to drive year-over-year shipments growth in 2026 and mitigate the ongoing challenges facing residential construction.

Speaker #3: Trailing 12-month highway awards in our markets are up 12% from a year ago, and public infrastructure awards are up 17% over the same timeframe.

Speaker #3: These levels far outpace the US as a whole. Our footprint is advantaged. And this public demand provides a solid foundation for shipments and supports a healthy pricing environment.

Speaker #3: Legislators in DC are actively working on a reauthorization bill for future highway funding upon the expiration of the Infrastructure Investment and Jobs Act later this year.

Speaker #3: We expect the new bill to provide higher levels of funding for highways and bridges than the current bill. We also anticipate a smooth transition between funding programs given the significant amount of IIJ funds that are yet to be spent.

Ronnie Pruitt: We expect the new bill to provide higher levels of funding for highways and bridges than the current bill. We also anticipate a smooth transition between funding programs given the significant amount of IIJA funds that are yet to be spent. On the private side, non-res continues to benefit from accelerating data center activity. With approximately 650 million square feet under construction or announced, we anticipate data centers and other related investments to be a positive catalyst for future aggregates demand. We are especially encouraged to also now have active projects related to the energy build-out necessary to support rising data center power needs. Currently, 60% of all large projects, both public and private, are within 50 miles of a Vulcan facility, highlighting the advantage of our footprint. Our scale, quality, and customer service make us a supplier of choice on these large, complex projects.

Speaker #3: On the private side, non-risk continues to benefit from accelerating data center activity. With approximately 650 million square feet under construction or announced, we anticipate data centers and other related investments to be a positive catalyst for future aggregates demand.

Speaker #3: We are especially encouraged to also now have active projects related to the energy build-out necessary to support rising data center power needs. Currently, 60% of all large projects both public and private are within 50 miles of a Vulcan facility.

Speaker #3: Highlighting the advantage of our footprint. Our scale, quality, and customer service make us a supplier of choice on these large complex projects. Residential construction continues to be impacted by affordability.

Ronnie Pruitt: Residential construction continues to be impacted by affordability. Longer term, there remains a fundamental need for additional housing, and we are well-positioned to benefit from an eventual recovery. As I said earlier, we continue to expect overall growth in aggregate shipments in 2026. The pricing environment remains healthy. While we are currently facing geopolitical uncertainty and incremental near-term headwinds in terms of energy input cost, I am confident in our ability to remain focused on the things we can control and to drive durable growth in our aggregates-led business. We carry good momentum from our solid start to the year and continue to expect to deliver between $2.4 billion and $2.6 billion of adjusted EBITDA for the full year. Now I'll turn the call over to Mary Andrews to provide some additional commentary on our Q1 performance before we take your questions.

Speaker #3: Longer term, there remains a fundamental need for additional housing and we are well positioned to benefit from an eventual recovery. As I said earlier, we continue to expect overall growth in aggregate shipments in 2026.

Speaker #3: The pricing environment remains healthy. And while we are currently facing geopolitical uncertainty and incremental near-term headwinds in terms of energy input cost, I am confident in our ability to remain focused on the things we can control and to drive durable growth in our aggregates-led business.

Speaker #3: We carry good momentum from our solid start to the year and continue to expect to deliver between 2.4 and 2.6 billion dollars of adjusted EBITDA for the full year.

Speaker #3: Now I'll turn the call over to Mary Andrews to provide some additional commentary on our first quarter performance before we take your questions.

Speaker #1: Thanks, Ronnie, and good morning. The earnings from our aggregates-led business continue to compound and drive attractive cash generation. Over the last 12 months, we generated $1.8 billion of cash from operations, which we have deployed for capital expenditures to maintain and improve our existing asset base, for greenfield and other growth projects to enhance our franchise, for capital returns to shareholders, and for debt repayments to further strengthen our balance sheet.

Mary Andrews Carlisle: Thanks, Ronnie, good morning. The earnings from our aggregates-led business continue to compound and drive attractive cash generation. Over the last 12 months, we generated $1.8 billion of cash from operations, which we have deployed for capital expenditures to maintain and improve our existing asset base, for greenfield and other growth projects to enhance our franchise, for capital returns to shareholders, and for debt repayments to further strengthen our balance sheet. Approximately 70% of our trailing 12 months capital expenditures of $686 million were utilized for fixed plant, mobile equipment, and land projects at our existing facilities. The remaining 30% was invested in greenfield and other growth projects, including a new quarry site in South Texas, several rail distribution properties in key markets, and new production facilities in Arizona and South Carolina.

Speaker #1: Approximately 70% of our trailing 12 months' capital expenditures of $686 million were utilized for fixed plant mobile equipment and land projects at our existing facility.

Speaker #1: The remaining 30% was invested in greenfield and other growth projects. Including a new quarry site in South Texas several rail distribution properties and key markets and new production facilities in Arizona and South Carolina.

Speaker #1: Capital returns to shareholders totaled over $800 million over the last 12 months. With $262 million of dividends accompanied by $550 million of share repurchases.

Mary Andrews Carlisle: Capital returns to shareholders totaled over $800 million over the last 12 months, with $262 million of dividends accompanied by $550 million of share repurchases. This includes $149 million of share repurchases during Q1. Total debt of $4.6 billion at quarter-end was approximately $350 million lower than a year ago and resulted in net debt to adjusted EBITDA leverage of 1.9x. The balance sheet is well positioned to support an active acquisition pipeline. Additionally, we expect that the announced divestiture of our California concrete assets will close during Q2, providing even more capacity for continuing to strategically grow our aggregates business. SAG expenses in Q1 were 2% lower than the prior year.

Speaker #1: This includes $149 million of share repurchases during the first quarter. Total debt of $4.6 billion at quarter-end was approximately $350 million lower than a year ago.

Speaker #1: And resulted in net debt to adjusted EBITDA leverage of $1.9 times. The balance sheet is well positioned to support an active acquisition pipeline. Additionally, we expect that the announced divestiture of our California concrete assets will close during the second quarter.

Speaker #1: Providing even more capacity for continuing to strategically grow our aggregates business. SAG expenses in the first quarter were 2% lower than the prior year.

Speaker #1: Trailing 12 months' expenses of $562 million were 7% of revenues. 20 basis points lower than the prior year period. We remain focused on investing in technology and talent to drive our business performance while also leveraging our overall expenses.

Mary Andrews Carlisle: Trailing twelve months expenses of $562 million were 7% of revenue, 20 basis points lower than the prior year period. We remain focused on investing in technology and talent to drive our business performance while also leveraging our overall expenses. We are also focused on continuing to improve our Return on Invested Capital through compounding improvements in our business and disciplined capital allocation. Our trailing twelve months Return on Invested Capital improved 30 basis points from year-end 2025 to 16% at quarter end. We are confident we have the right strategy to continue to deliver value for our shareholders. Now Ronnie and I would be happy to take your questions.

Speaker #1: We are also focused on continuing to improve our return on invested capital through compounding improvements in our business and disciplined capital allocation. Our trailing 12 months' return on invested capital improved 30 basis points from year-end 2025 to 16% at quarter end.

Speaker #1: We are confident we have the right strategy to continue to deliver value for our shareholders. And now, Ronnie and I would be happy to take your questions.

Speaker #2: Thank you. At this time, if you would like to ask a question, please press star one on your keypad. You may remove yourself from the queue at any time by pressing star two.

Operator: Thank you. At this time, if you would like to ask a question, please press star one on your keypad. You may remove yourself from the queue at any time by pressing star two. Once again, that is star one to signal for a question and star two to remove yourself. We will pause for just a moment to allow questions to queue. We will hear first from Trey Grooms with Stephens. Please go ahead.

Speaker #2: Once again, that is star one (*) to signal for a question, and star two (**) to remove yourself. We will pause for just a moment to allow questions to queue.

Speaker #2: We'll hear first from Trey Grooms with Stevens. Please go ahead.

Speaker #3: Good morning and thanks for taking my question. So clearly, you guys are off to a very strong start to the year. Ronnie, could you maybe walk us through some of the key puts and takes in the quarter?

Trey Grooms: Good morning, and thanks for taking my question. Clearly, you guys are off to a very strong start to the year. Ronnie, could you maybe walk us through, you know, some of the key puts and takes in the quarter, you know, across price, volume, and costs? Then, you know, also as we look ahead to the balance of the year, how are you thinking about these drivers, you know, in light of the recent moves we've seen in diesel and the broader, you know, macro backdrop?

Speaker #3: Across price, volume, and cost, and then also as we look ahead to the balance of the year, how are you thinking about these drivers in light of the recent moves we've seen in diesel and the broader macro backdrop?

Speaker #4: Yeah, thanks, Trey. Good morning. Look, I agree with you—it was a solid start. And I think it reinforces the trajectory for another year of earnings growth.

Ronnie Pruitt: Yeah. Thanks, Trey. Good morning. look, I agree with you. It was a solid start. I think it reinforces the trajectory for another year of earnings growth. Our performance in the Q1 was really a direct result of strong operational and commercial execution, and it definitely positions us well to deliver the earning expectations that we laid out in February. You know, on the volume and price side, we saw healthy acceleration of our backlog tons converting into shipments, particularly within the data center space, which was supported by more normalized weather within our footprint. With regards to pricing, we said coming into the Q1 the year-over-year comparisons were going to be difficult as we continue to lap, you know, the hurricane relief efforts from 2 of our higher priced markets in Tennessee and North Carolina.

Speaker #4: Our performance in the quarter was really a direct result of strong operational and commercial execution and it definitely positions us well to deliver the earning expectations that we laid out in February.

Speaker #4: On the volume and price side, we saw healthy acceleration of our backlog tons converting into shipments, particularly within the data center space, which was supported by more normalized weather within our footprint.

Speaker #4: With regards to pricing, we said coming into the quarter, the year-over-year comparisons were going to be difficult. As we continue to lap the hurricane relief efforts, from two of our higher priced markets, in Tennessee and North Carolina, but that alongside with some pricing mix which was a shift towards space products and our current backlog, driven primarily by data centers, as well as more public work.

Ronnie Pruitt: That alongside with some pricing mix, which was a shift towards base products and our current backload, driven primarily by data centers, as well as more public work. These things were known variables, and so they played out as anticipated with pricing at the lower end of our full year guidance, but we expect that continue to accelerate throughout the remainder of the year. On the cost side, I was very pleased with our team's execution, keeping total cash cost or cash cost growth only to 4%. You know, the run-up in diesel price really began in February, and the impact is really reflected in some of our March cost. We have a proven track record of offsetting these types of fluctuations through our Vulcan Way of Operating, also our Vulcan Way of Selling in our commercial disciplines.

Speaker #4: But these things were known variables and so they played out as anticipated with pricing at the lower end of our full-year guidance, but we expect that continued to accelerate throughout the remainder of the year.

Speaker #4: On the cost side, I was very pleased with our team's execution. Keeping total cash cost growth only to 4%. The run-up in diesel price really began in February and the impact is really reflected in some of our March cost, but we have a true proven track record of offsetting these types of fluctuations through our bulk way of operating also our bulk way of selling in our commercial disciplines.

Speaker #4: So the more normal weather also meant we were able to keep pace with planned plant projects like stripping and painting and some other efficiency investments that we did during the quarter and as you recall last year, those types of investments were delayed with more inclement weather in the first quarter of last year.

Ronnie Pruitt: The more normal weather also meant we were able to keep pace with plant projects like stripping and painting and some other efficiency investments that we did during the quarter. As you recall, last year, those types of investments were delayed with more inclement weather in Q1 of last year. Overall, I think the fundamentals of the business are performing as expected and really in a good position as we head into the heart of our shipping season. Let me turn it over to Mary Andrews to give you a couple more points of context.

Speaker #4: So, overall, I think the fundamentals of the business are performing as expected and really in a good position as we head into the heart of our shipping season.

Speaker #4: But let me turn it over to Mary Andrew to give you a couple more points of context.

Speaker #1: Trey, one thing I would add that I think further underscores the solid fundamentals that Ronnie talked about and really highlights the compounding results versus noisy year-over-year quarters and he referenced some of the hurricane relief work last year and obviously inclement weather.

Mary Andrews Carlisle: You know, Trey, one thing I would add that I think further underscores the solid fundamentals that Ronnie talked about and really highlights, you know, the compounding results versus noisy year-over-year quarters, and he referenced some of the, you know, hurricane relief work last year and obviously, you know, inclement weather. I think if you step back and look at 2024 and see that aggregates cash gross profit per ton is up 23% and our total cash cost of sales and aggregates has increased only 1%, to me, you know, these metrics clearly show the solid execution of our teams and, you know, the compounding margin growth that they're delivering. That gives us a lot of confidence in our ability to execute for the rest of the year.

Speaker #1: So I think if you step back and look at 2024, and see that aggregates cash gross profit per ton is up 23%, and our total cash cost of sales in aggregates has increased only 1%.

Speaker #1: To me, these metrics clearly show the solid execution of our teams and the compounding margin growth that they're delivering, and that gives us a lot of confidence in our ability to execute for the rest of the year.

Speaker #3: Thank you, Mary Andrews. Thank you, Ronnie. It's all very helpful. I'll pass it on.

Trey Grooms: Well, thank you, Mary Andrews. Thank you, Ronnie. It's all very helpful. I'll pass it on.

Speaker #2: We'll turn next to Garrick Schmoy with Loop Capital. Please go ahead.

Operator: We'll turn next to Garik Shmois with Loop Capital. Please go ahead.

Speaker #5: Oh, hi. Thank you. Just wanted to follow up on that a little bit. Just given a lot of the moving pieces here, as you look forward and some of the diesel cost impacts, that are starting to hit.

Garik Shmois: Hi. Thank you. Just wanted to follow up on that a little bit. Just given a lot of the moving pieces here as you look forward and, you know, some of the diesel cost impacts that are starting to hit. Just wondering if you can go into a little more detail just in the confidence that you have in reiterating the full year guidance today.

Speaker #5: Just wondering if you can go to a little more detail just in the confidence that you have in reiterating the full-year guidance today.

Speaker #4: Yeah. Good question and so let me start with I'm going to dig deep into kind of how diesel impacts our business. And so if you think about the two parts of diesel to us are the price of the diesel but the more important part is the usage of diesel.

Ronnie Pruitt: Yeah, good question. I'm gonna dig deep into kinda how diesel impacts our business. If you think about the two parts of diesel to us are the price of the diesel, but the more important part is the usage of diesel. As I look at our business, our downstream as well as our delivery cost are really covered through surcharges that kicked in immediately and have really had no impact on, you know, the cost of our doing business downstream and delivery. When I look at the operational side, you know, I start with what we do in the plants. From a stripping aspect is the first step of what we do. Stripping is just really equipment, labor, and fuel.

Speaker #4: And so as I look at our business, our downstream as well as our delivery cost are really covered through surcharges that kicked in immediately and so have really had no impact on the cost of our doing business downstream and delivery.

Speaker #4: But when I look at the operational side, I start with what we do in the plants. And so from a stripping aspect is the first step of what we do.

Speaker #4: Stripping is just really equipment, labor, and fuel. And stripping is also something that is necessary to uncover future reserves, but it's not something we're doing just in time.

Ronnie Pruitt: Stripping is also something that is necessary to uncover future reserves, but it's not something we're doing just in time. Stripping is something we can push forward or pull back, depending on what macro environment we're in. Those are things that we have the ability to fluctuate on. When I look at loading and hauling within the pit, you start with that haul to the primary. Again, this is something that uses diesel equipment and labor. But this is where our VWO processes kick in because when we talked about process intelligence and the investment we've made with VWO, a lot of that is focused on our critical product size production and impacting yield. When we're doing that, for every ton we get to the primary, we're more efficient in how we produce products.

Speaker #4: Stripping is something we can push forward or pull back depending on what macro environment we're in. And so those are things that we have the ability to fluctuate on.

Speaker #4: And then when I look at loading and hauling within the pit, and so you start with that, haul to the primary, again, this is something that uses diesel equipment and labor.

Speaker #4: But this is where our VWO processes kick in because when we talked about process intelligence and investment we've made with VWO, a lot of that is focused on our critical product size production and impacting yield.

Speaker #4: And so when we're doing that for every ton we get to the primary, we're more efficient in how we produce products. And so that definitely impacts the usage of fuel.

Ronnie Pruitt: That, that definitely impacts the usage of fuel. When you get into the plant itself, there's not much fuel used within the production process, so from the primary all the way through the secondary. Again, the process intelligence in VWO is very impactful on the front end and the back end. Again, it's an opportunity for us to really focus on the efficiencies and how we're burning fuel. The actual load-out process, when you're loading trucks or rail, a lot of our larger plants, we have bin systems, there's not much mechanical process there from a diesel consumption side. We do, at a lot of plants, we load with loaders.

Speaker #4: And then, when you get into the plant itself, there's not much fuel used within the production process, so from the primary all the way through the secondary section. But again, the process intelligence and VWO is very impactful on the front end and the back end.

Speaker #4: And so again, it's an opportunity for us to really focus on the efficiencies and how we're burning fuel. And then the actual loadout process.

Speaker #4: And so when you're loading trucks or rail, a lot of our larger plants, we have bin systems, and so there's not much mechanical process there from a diesel consumption side.

Speaker #4: But we do at a lot of plants, we load with loaders and some of the things we're doing, our operators are doing there, instead of idling loaders, you're turning off engines and so we've got a lot of things we're doing to make sure that we're focused on the usage of fuel in this time of uncertainty with the volatility that we've seen.

Ronnie Pruitt: Some of the things we're doing, our operators are doing there, instead of idling loaders, you're turning off engines. We've got a lot of things we're doing to make sure that we're focused on the usage of fuel in this time of uncertainty with the volatility that we've seen. All of that being part of the variability of our production process which is the beauty of aggregates. On the selling side, remember, half of our sales is really to fixed plants, and half of our sales is to more of the real-time quoted stuff. We're moving those things fast. We've already announced midyear price increases.

Speaker #4: So all of that being part of the variability of our production process, which is the beauty of aggregates. On the selling side, remember, half of our sales is really to fixed plants and half of our sales is to more of the real-time quoted stuff.

Speaker #4: And so we're moving those things fast. We've already announced mid-year price increases. And so again, I think as you look at what we've been able to accomplish through the history of aggregates is our ability to take headwinds and turn them into a positive story on the back end.

Ronnie Pruitt: Again, I think as you look at what we've been able to accomplish, through the history of aggregates is our ability to take headwinds and turn them into, you know, a positive story on the back end. Is this a short-term headwind? Yes. Is it something that we're gonna be able to control on the back end? Absolutely. I'll let Mary Andrews give you a little more insight into the numbers behind, you know, the fuel headwind.

Speaker #4: And so is this a short-term headwind? Yes. Is it something that we're going to be able to control on the back end? Absolutely. And I'll let Mary Andrews give you a little more insight into the numbers behind the fuel headwind.

Speaker #1: Yeah. The only thing, Garrick, I would probably add is I think Ronnie gave some great examples of levers that we're using to as we navigate this current fuel situation.

Mary Andrews Carlisle: Yeah. The only thing, Garik, I would probably add is, you know, I think Ronnie gave some great examples of levers that we're using to, you know, as we navigate this current fuel situation. The Q2 is, you know, where we expect to feel the squeeze of the higher diesel most acutely before, you know, some of these pricing actions, you know, that we've already taken begin to flow through. The way I would probably think about it is we would've initially expected aggregates cash cost of sales on a year-over-year basis to look very similar in the Q2 as the Q1. That's still the case, exclusive, excluding diesel.

Speaker #1: The second quarter is where we expect to feel the squeeze of the higher diesel most acutely before some of these pricing actions that we've already taken begin to flow through.

Speaker #1: So the way I would probably think about it is we would have initially expected aggregates cash cost of sales on a year-over-year basis to look very similar in the second quarter.

Speaker #1: As the first quarter, and that's still the case, exclusive excluding diesel. So I think with diesel now, your cash cost of sales on a year-over-year basis, could approach maybe double of what it was in the first quarter.

Mary Andrews Carlisle: I think, you know, with diesel now, you know, your cash cost of sales on a year-over-year basis, you know, could approach maybe double of what it was in Q1, so closer in that high single-digit range. Again, with a full expectation that the margin impact, you know, will moderate as we move into H2 of the year.

Speaker #1: So closer in that high single digits range. And again, with a full expectation that the margin impact will moderate as we move into the second half of the year.

Speaker #5: Okay. That's all very helpful. Thank you very much.

Garik Shmois: Okay. That's all very helpful. Thank you very much.

Speaker #2: We'll turn now to Anthony Pettinari with Citi. Please go ahead. Your line is open.

Operator: We'll turn now to Anthony Pettinari with Citi. Please go ahead. Your line is open.

Speaker #3: Good morning. Ronnie, Mary Andrews, you mentioned the mid-year increases and I'm just wondering if you can give us any more detail in terms of magnitude, percentage of your markets that might cover timing?

Anthony Pettinari: Good morning. Ronnie, Mary Andrews, you mentioned the midyear increases, and I'm just wondering if you can give us any more detail in terms of, you know, magnitude, percentage of your markets that might cover, timing. Then I'm just curious, you're obviously seeing a lot of inflation in diesel. Are there any other costs outside of fuel, you know, metal, parts, equipment, where you're seeing knock-on impacts from the Middle East conflict in terms of costs that maybe a little less obvious to us?

Speaker #3: And then I'm just curious, you're obviously seeing a lot of inflation in diesel. Are there any other costs outside of fuel metal, parts, equipment, where you're seeing maybe knock-on impacts from the Middle East conflict in terms of costs that maybe a little less obvious to us?

Speaker #4: Yeah. Good question. We have not seen any other impacts as of yet. We are monitoring that. And again, as the if we go back to 2022 with the inflationary things that happened back then, and our discipline around being able to move pricing quickly when those inflationary environments hit us.

Ronnie Pruitt: Yeah, good question. We have not seen any other impacts as of yet. We are monitoring that. Again, you know, if we go back to 2022 with the inflationary things that happened back then and our discipline around being able to move pricing quickly when those inflationary environments hit us. I would tell you from a process side, we went out with midyears several weeks ago, a little earlier than we did last year. We went out with all of our markets. We're very disciplined in that. We will always be very opportunistic when it comes to using inflationary pressures or any other headwinds. I mean, we're going to, we're gonna capture that. You know, we sent that out in all markets.

Speaker #4: So I would tell you, from a process side, we went out with mid-years several weeks ago, a little earlier than we did last year.

Speaker #4: We went out with all of our markets. We're very disciplined in that. We will always be very opportunistic when it comes to using inflationary pressures or any other headwinds.

Speaker #4: I mean, we're going to we're going to capture that. And so we sent that out in all markets. And remember, like I said earlier, about half of our shipments really are represented by that fixed plant.

Ronnie Pruitt: Remember, like I said earlier, about half of our shipments really are represented by that fixed plant. Within that fixed plant side, if I break that down to the concrete side and the asphalt side, I would tell you the asphalt side of our business is really more heavily tied to public and the larger, you know, private non-res piece of where that's at. They have a very active market. There's situations within each of the DOTs that they have indexes on longer term projects, the asphalt producers are covered on that. I don't think we see a lot of resistance on the asphalt side. Within the concrete side, look, the concrete guys are still facing the headwinds of residential.

Speaker #4: And then within that fixed plant side, if I break that down to the concrete side and the asphalt side, I would tell you the asphalt side of our business is really more heavily tied to public.

Speaker #4: And the larger private non-res piece of where that's at. So, they have a very active market. There are situations within each of the DOTs that they have indexes on longer-term projects.

Speaker #4: And so the asphalt producers are covered on that. And so I don't think we see a lot of resistance on the asphalt side. Within the concrete side, look, the concrete guys are still facing the headwinds of residential.

Speaker #4: And so those conversations will be probably a little more healthy and spirited. But again, it's not something that is unexpected. I mean, we have a long track record of recovering cost.

Ronnie Pruitt: Those conversations will be probably a little more healthy and spirited. Again, it's not something that is unexpected. I mean, we have a long track record of recovering cost. My hope is that our concrete customers use that as, you know, a reason why they're gonna have to go out because they're already. They feel diesel cost immediately. You know, it hits them on their delivery cost immediately, and hopefully they have the same surcharges in place. Over time, I think we've proven that these headwinds, we will be able to overcome, and we will be able to pass that along. The beauty of aggregates is we also, we keep that in our pocket. We don't give that back.

Speaker #4: And my hope is that our concrete customers use that as a reason why they're going to have to go out because they're already they feel diesel cost immediately.

Speaker #4: And it hits them on their delivery cost immediately. And hopefully, they have the same surcharges in place. But over time, I think we've proven that these headwinds we will be able to overcome and we will be able to pass that along.

Speaker #4: And the beauty of aggregates is we also—we keep that in our pocket. We don't give that back.

Speaker #3: Okay, that's very helpful. I'll turn it over.

Anthony Pettinari: Okay. That's very helpful. I'll turn it over.

Speaker #4: Thank you.

Ronnie Pruitt: Thank you.

Speaker #2: We'll hear next from Stephen Fisher with UBS. Please go ahead.

Operator: We'll hear next from Steven Fisher with UBS. Please go ahead.

Speaker #3: Thanks. Good morning, and congratulations on the good execution. Just to follow up again on clarifying some of these points here, particularly on the near-term expectations.

Steven Fisher: Thanks. Good morning. Congratulations on the good execution. Just to follow up again on clarifying some of these points here, particularly on the near-term expectations. I guess, what's the expectation we should have for pricing in the near term, say Q2? I guess that would be inclusive of the diesel. Do those surcharges get recorded in the pricing you're gonna report? Then on the cost side, it sounds like you're expecting Mary Andrews upper single digit growth in cost. How do we think about that in light of, let's say, the low single digit guidance you still have for the full year with Q1 sounding like it's kinda being a at least mid single digits? Thank you.

Speaker #3: I guess, what's the expectation we should have for pricing in the near term, say Q2? And I guess that would be inclusive of the diesel.

Speaker #3: Do those surcharges get recorded in the pricing you're going to report? And then on the cost side, it sounds like you're expecting Mary Andrews upper single-digit growth in cost.

Speaker #3: So how do we think about that in light of, let's say, the low single-digit guidance with the first quarter? Sounded like it's kind of being at least mid-single digits.

Speaker #3: Thank you.

Speaker #4: Yeah, I'll take the first part, and I'll let Mary Andrews talk again about the second part. Our delivery is not—so we report freight adjusted.

Ronnie Pruitt: I'll take, I'll take the first part, and I'll let Mary Andrews talk again about the second part. Our, you know, our delivery is not, so we report freight adjusted, and so when we talk about price, that's freight adjusted. All the stuff that we're talking about with surcharges does not get reported on our pricing because we don't think it's the right way to look at that. When it comes to kind of cadence of pricing, we said going into the year, because of the comps of last year first, was that our pricing would have start out at the lower end and accelerate through the year.

Speaker #4: And so when we talk about price, that's freight adjusted. So all the stuff that we're talking about with surcharges, does not get reported on our pricing because we don't think it's the right way to look at that.

Speaker #4: But when it comes to kind of cadence of pricing, we said going into the year, because of the comps of last year first, was that our pricing would have started out at the lower end and accelerate through the year.

Speaker #4: And I think this opportunity that we have with mid-years just confirms that our pricing trajectory will be backward half more accelerated than the first half of the year.

Ronnie Pruitt: I think this, you know, this opportunity that we have with mid-years just confirms that our pricing trajectory will be H2 more accelerated than the H1 of the year. We anticipated that. We also said, you know, that in the first part of the year, as these data centers continue to grow, the mix impact, which we called out, we continue to see a lot of shipments from our backlog converting to shipments faster because of the size of these projects, but also the speed of these data centers. I mean, once they're announced, they're going really quick, which is a good thing.

Speaker #4: But we anticipated that. We also said that in the first part of the year as these data centers continue to grow, the mixed impact, which we called out, would continue to see a lot of shipments from our backlog converting to shipments faster because of the size of these projects, but also the speed of these data centers.

Speaker #4: I mean, once they're announced, they're going really quick, which is a good thing. And we'll play out in the cost side of our business as well.

Ronnie Pruitt: It will play out in the cost side of our business as well because when we're continuing to improve the yield of our plants with the amount of base shipments, that's a really good thing on our cost. I'll let Mary Andrews Carlisle walk you through kind of the puts and takes on the on the model.

Speaker #4: Because when we're continuing to improve the yield of our plants with the amount of base shipments, that's a really good thing on our cost.

Speaker #4: But I'll let Mary Andrews walk you through kind of the puts and takes on the model.

Speaker #5: Yeah. So Steve, from a cost standpoint, at this point, we do still believe that we can deliver that low single-digit cost for the full year.

Mary Andrews Carlisle: You know, Steven, from a cost standpoint, you know, at this point, we do still believe that we can deliver that low single digit cost for the full year. Where we fall within that range, you know, the diesel situation and how it continues to develop, I think will, you know, will play a big role in that. You know, Ronnie highlighted some opportunities that we have to, you know, even on the cost side, you know, focus on efficiencies, pull some levers to make sure that, you know, we're making good decisions given the macro environment. Feel good about the full year guidance and just wanted to give you know, insight into what that could look like for Q2 from a cost standpoint.

Speaker #5: Where we fall within that range, the diesel situation and how it continues to develop, I think we'll play a big role in that. But Ronnie highlighted some opportunities that we have to even on the cost side.

Speaker #5: Focus on efficiencies, pull some levers to make sure that we're making good decisions given the macro environment. So, feel good about the full-year guidance and just wanted to give you insight into what that could look like for second quarter from a cost standpoint.

Speaker #5: And that was always our expectation: that cost would be higher in the first half of the year, moving lower in the second half of the year.

Mary Andrews Carlisle: That was always our expectation, that cost would be, you know, higher in H1, moving lower in H2. As we sit today, 2026 is playing out like we expected.

Speaker #5: So as we sit today, 2026 is playing out like we expected.

Speaker #3: Great. Thank you very much.

Steven Fisher: Great. Thank you very much.

Operator: We'll hear next from Michael Dudas with Vertical Research. Please go ahead.

Speaker #2: We'll hear next from Michael Dennis with Vertical Research. Please go ahead.

Speaker #6: Good morning, Mary Andrews, Mark, and Ronnie.

Michael Dudas: Good morning, Mary Andrews, Mark, and Ronnie.

Speaker #5: Good morning.

Mary Andrews Carlisle: Morning.

Speaker #6: Ronnie, following up on an interesting comment on the data centers and the time to market and speed. Is that could that be contributory on volumes, given the acceleration of some of these projects?

Michael Dudas: Ronnie, you know, following up on the interesting comments on the data centers and the time to market and speed, could that be contributory on volumes given the acceleration of some of these projects? Are other heavy markets or even public markets that are trying to move quicker to try to get the funding or try to get the projects through, given some of the funding uncertainties? Can that be helpful to have maybe a quicker conversion on your total backlog and get some efficiencies and volumes through the system? Thank you.

Speaker #6: And there are other heavy markets or even public markets that are trying to move quicker to try to get the funding or try to get the projects through, given some of the funding uncertainties.

Speaker #6: And can that be helpful to have maybe a quicker conversion on your total backlog and get some efficiencies and volumes through the system? Thank you.

Speaker #4: Yeah. I mean, I'll go back to my prepared remarks and I'll look at our advantage footprint. And as I stated in my prepared remarks, in our specific markets on a trailing 12-month public contract awards, are up 12%.

Ronnie Pruitt: Yeah, I mean, I go back to my prepared remarks, I look at our advantage footprint. As I stated in my prepared remarks, in our specific markets on a trailing 12 months, you know, public contract awards are up 12%. We're seeing, in the rest of the country, double-digit declines in places. It amplifies that we're in the right markets, and the public side continues to be strong. You know, when I look at starts and kinda the flow of before the expiration of the bill, I think the states are doing a really good job. I think all the money will be, you know, targeted towards the jobs they want, which is really, you know, where they have to get is the money has to be allocated, that allocation is going well.

Speaker #4: And we're seeing in the rest of the country double-digit declines in places. And so it amplifies that we're in the right markets. And the public side continues to be strong.

Speaker #4: When I look at starts and kind of the flow of before the expiration of the bill, I think the states are doing a really good job.

Speaker #4: I think all the money will be targeted towards the jobs they want, which is really where they have to get is the money has to be allocated.

Speaker #4: And that allocation is going well. Across our footprint, I'm seeing highway starts up in Arizona, New Mexico, North Carolina, South Carolina, all really good spots for us.

Ronnie Pruitt: You know, across our footprint, I'm seeing highway starts up in Arizona, New Mexico, North Carolina, South Carolina, all really good, really good spots for us. Coastal Texas, North Texas, Georgia on the infrastructure side, we're seeing good momentum there. You know, on the private side, again, as I stated, 60% of all large projects that started last year are within 50 miles of a Vulcan facility. That just shows you again, we're in the right markets, and where we're seeing momentum and construction growth is really because of our advantage footprint. I mean, that's not the same stats you're gonna see across the rest of the country. Again, our business model is proven.

Speaker #4: Coastal Texas, North Texas, Georgia on the infrastructure side. So we're seeing good momentum there. On the private side, and again, as I stated, 60% of all large projects that started last year are within 50 miles of a Vulcan facility.

Speaker #4: And so that just shows you, again, we're in the right markets and where we're seeing momentum in construction growth is really because of our advantage footprint.

Speaker #4: I mean, that's not the same stats you're going to see across the rest of the country. And so again, our business model is proven.

Speaker #4: And over a long period of time, we've been able to say that any headwind that faces us, we're going to be able to capture that over the long term.

Ronnie Pruitt: You know, over a long period of time, we've been able to say that any headwind that faces us, we're gonna be able to capture that over the long term. I think as we look forward in saying that our confidence in 2026 returning to growth, it's because of these things I'm talking about on the public and private side. We're not, you know, we're not seeing it on residential. We are seeing some green shoots on multifamily, but it's really being driven by that's the necessity of jobs that have been created in some of those markets, and people are moving there, and there's nowhere to move. The multifamily side, we're seeing a little bit of green shoots in. The majority of our confidence right now is really gonna be based on the public and private side.

Speaker #4: But I think as we look forward and saying that our confidence in 2026 returning to about on the public and private side. We're not seeing it on residential.

Speaker #4: We are seeing some green shoots on multifamily, but it's really being driven by the necessity of jobs that have been created in some of those markets. People are moving there, and there's nowhere to move.

Speaker #4: And so the multifamily side, we're seeing a little bit of green shoots in. But the majority of our confidence right now is really going to be based on the public and private side.

Speaker #4: And remember, only 45% of the IG dollars are actually spent. And so even with the expiration in the middle of reauthorization now, we have confidence that the transition between those funding bills will be very smooth.

Ronnie Pruitt: Remember, only 45% of the IIJA dollars are actually spent. Even with the expiration and in the middle of reauthorization now, we have confidence that the transition between those funding bills will be very smooth.

Speaker #6: Excellent. Thank you, Ronnie.

Michael Dudas: Excellent. Thank you, Ronnie.

Speaker #4: Thank you.

Ronnie Pruitt: Thank you.

Speaker #2: We'll turn now to Catherine Thompson with Thompson Research Group. Please go ahead.

Operator: We'll turn now to Kathryn Thompson with Thompson Research Group. Please go ahead.

Speaker #7: Hi. Thank you for taking my questions today. I just want to focus a little bit on the Federal Highway Bill reauthorization coming up in September.

Kathryn Thompson: Hi. Thank you for taking my questions today. I just wanna focus a little bit on the federal highway bill reauthorization coming up in September. As is typical each year, there this happens, there's a lot of noise leading into the debate. What we are hearing from a wide variety of contacts is that early discussions are funding sizes of $600 to 700 billion. The House bill now is closer to $500 to 550, both of which are still increases from where we are currently. Could you give your perspective in terms of what you're hearing and what you're seeing and how you think about the cadence? As one contact said, you know, We, we don't see the bill going backwards in funding.

Speaker #7: And, as is typical each year this happens, there's a lot of noise leading into the debate. What we are hearing from a wide variety of contacts is that early discussions are for funding sizes of $600 to $700 billion.

Speaker #7: But the House bill now is closer to 500 to 550, both of which are still increases from where we are currently. Could you give your perspective in terms of what you're hearing and what you're seeing and how you think about the cadence?

Speaker #7: And as one contact said, we don't see the bill going backwards in funding. It should be going forward. And how much credence does that statement have?

Kathryn Thompson: it should be going forward. How much credence does that statement have? Thank you.

Speaker #7: Thank you.

Speaker #4: Yeah. Thank you, Catherine. And I think your sources are pretty good. And consistent with what we're hearing. I mean, if you think about the kind of the process, I mean, I think where we're at today, the transportation committee is in the middle of markups.

Ronnie Pruitt: Yeah. Thank you, Kathryn. I think your sources are pretty good and consistent with what we're hearing. I mean, if you think about the kind of the process, I mean, I think where we're at today, the Transportation Committee is in the middle of markups. We think we'll get a first reading sometime mid-May. As it comes out, as you know, I mean, this is a negotiated process between the Rs and the Ds. You know, the Ds are, we're hearing, being a little more aggressive towards wanting to spend more. I think there'll be a lot of negotiations. As you know, there's bits and pieces of that throughout the country that people are gonna wanna get their pieces in. I think overall, directionally, your numbers are very consistent with what we're hearing.

Speaker #4: We think we'll get a first reading sometime mid-May. And so as it comes out, as you know, I mean, this is a negotiated process between the ours and the Ds.

Speaker #4: The Ds are we're hearing being a little more aggressive towards wanting to spend more. But I think there'll be a lot of negotiations. And as you know, there's bits and pieces of that throughout the country that people are going to want to get their pieces in.

Speaker #4: But I think overall, directionally, your numbers are very consistent with what we're hearing. Obviously, as it gets to the Senate, it's a little more complicated with the number of committees.

Ronnie Pruitt: Obviously, as it gets to the Senate, it's a little more complicated with the number of committees it has to go through. Look, I think we're in a good position of, could it get done by midterms? It could, historically, we've seen, you know, continuing resolutions are probably gonna be the path. Again, with the dollars that are left to be spent, the momentum we see in starts, the backlog, visibility that we have within the public jobs that we've booked gives us a lot of confidence that there's just not gonna be a disruption. Even under a continuing resolution, you know, the dollars keep spent, you know, at the same level. I think we're in a really good position. I think it's good momentum.

Speaker #4: It has to go through. But look, I think we're in a good position of could it get done by midterms? It could. But historically, we've seen continuing resolutions are probably going to be the path.

Speaker #4: But again, with the dollars that are left to be spent, the momentum we see in starts, the backlog visibility that we have within the public jobs that we've booked, gives us a lot of confidence that there's just not going to be a disruption.

Speaker #4: And even under a continuing resolution, the dollars keep being spent at the same level. And so I think we're in a really good position. I think it's good momentum.

Speaker #4: I think the bipartisan part of this is it's good for the economy. It's good for job creation. And I think both sides of the aisle like to take that as a win.

Ronnie Pruitt: I think the bipartisan part of this is it's good for the economy, it's good for job creation, and I think both sides of the aisle like to take that as a win. You know, the funding side, I think they're making progress. You know, what they're gonna do with electric vehicles, with registrations, all that's being considered. I think your sources are correct, and I think we walk away today thinking we're in a really good position and confident the bill will get done, and pretty confident it'll be at a higher level than in the previous bill.

Speaker #4: And so the funding side, I think they're making progress. What they're going to do with electric vehicles, with registrations, all that's being considered. But I think your sources are correct.

Speaker #4: And I think we walk away today thinking we're in a really good position and confident the bill will get done. And pretty confident it'll be at a higher level than the previous bill.

Speaker #2: Great. Thanks very much.

Kathryn Thompson: Great. Thanks very much.

Speaker #4: Thank you.

Ronnie Pruitt: Thank you.

Speaker #2: Now we'll hear from Keith Hughes with Truist. Please go ahead.

Operator: Now we'll hear from Keith Hughes with Truist. Please go ahead.

Speaker #6: Thank you. So we get a lot of questions on specifically the second quarter. The drag. From what we know today on diesel prices, can you give any kind of dollar figure of what that's going to do in the quarter, understanding you're going to be going for I'm just going to selling prices to offset that?

Keith Hughes: Thank you. We're getting a lot of questions on specifically the Q2, the drag. From what we know today on diesel prices, can you give any kind of dollar figure of what that's going to do in the quarter, understanding you're gonna be going for physical selling prices to offset that?

Speaker #4: Yeah. I'll let Mary Andrews get into the numbers. But I think, Keith, if you look at it, kind of as we step back overall and say, on a typical year, and I would say over the last two years, we burned about 57 million gallons of diesel a year.

Ronnie Pruitt: Yeah. I'll let Mary Andrews get into the numbers. I think, Keith, if you look at it kind of as we step back overall and say on a typical year, and I would tell you know, over the last two years, we burn about 57 million gallons of diesel a year. Trajectory, if you look at that, is really variable with, you know, the tons we're shipping as the tons we're producing, and you got to play, you know, where's your inventories at.

Speaker #4: And so trajectory, I mean, if you look at that, it's really variable with the tons we're shipping is the tons we're producing. And you got to play where's your inventory?

Speaker #4: But all that, if you just step back and said, that's kind of the range of the diesel we're going to burn and obviously, that's going to fluctuate if we pull stripping and delay some of that with diesel costs because we think this is a temporary situation.

Ronnie Pruitt: All that, if you just step back and said, that's kind of the range of the diesel we're going to burn, and obviously, that's going to fluctuate if we pull stripping and delay some of that with diesel costs, 'cause we think this is a, you know, a temporary situation, and we're not, you know, we're not planning long term for diesel to be that. If it is, we're more than prepared to fight that headwind through our commercial efforts. I think that's kind of the context of it. Mary Andrews, why don't you give him a little more data on what you're thinking?

Speaker #4: And we're not planning long-term for diesel to be that. But if it is, we're more than prepared to fight that headwind through our commercial efforts.

Speaker #4: And so I think that's kind of the context of it. But Mary Andrews, why don't you give him a little more data on what you're thinking?

Speaker #3: Yeah, I mean, I think given those pieces Ronnie described, you're looking at probably $25 million in the second quarter. If you think about the amount of diesel we would burn in retail diesel today, it's a couple of dollars higher than it was coming into the year.

Mary Andrews Carlisle: Yeah. I mean, I think given, you know, those pieces Ronnie described, you're looking at probably $25 million in Q2. If you think about, you know, the amount of diesel we would burn. You know, retail diesel today is $2 higher than it, than it was, you know, coming into the year. That's probably a good, a good round number to think about on the diesel side. The other place that we'll feel the energy impacts is on, you know, liquid asphalt. About a third of our work is indexed. You know, the impact will be a little bit less there.

Speaker #3: So that's probably a good round number to think about on the diesel side. The other place that we'll feel the energy impacts is on liquid asphalt.

Speaker #3: But some of our about a third of our work is index. So the impact will be a little bit less there. And that's one that same thing.

Mary Andrews Carlisle: That's one that, you know, same thing, you know, over time, we'll, you know, use pricing to catch up and maintain our margins at the healthy levels that we've seen over the last couple of years. One other thing to keep in mind, just as it relates to the downstream is, you know, in our original guidance, we did not have the California ready-mix business that contributed about $10 million of cash gross profit in Q1. We still own it today. We do expect that to close, you know, soon in Q2. I would think about the downstream at this point with, you know, the contribution from the ready-mix, being, you know, a helpful offset to the near-term energy headwinds that we could see.

Speaker #3: Over time, we'll use pricing to catch up and maintain our margins at the healthy levels that we've seen over the last couple of years.

Speaker #3: And one other thing to keep in mind just as it relates to the downstream is in our original guidance, we did not have the California ready-mix business.

Speaker #3: That contributed about $10 million of cash gross profit in the first quarter. We still own it today. We do expect that to close soon.

Speaker #3: In the second quarter, but I would think about the downstream at this point with the contribution from the ready-mix being a helpful offset to the near-term energy headwinds that we could see.

Speaker #6: Okay. Okay. Great. Let me ask one other real quick on back on Catherine's question. There was a political article a couple of weeks ago talking about this 500 to 550 billion from the Republican head of the transportation committee.

Keith Hughes: Okay. Okay, great. Let me ask one other real quick back on Kathryn's question. There was a political article a couple of weeks ago talking about this $500 to $550 billion from the Republican head of the Transportation Committee. Some of the Democrat comments are actually for a higher bill than the, you know, call it $550 billion. I guess my question is based on from your lobbying groups, is there actually close to bipartisan support around these numbers we're talking about? What is your sense on that?

Speaker #6: Some of the Democrat comments are actually for a higher bill than the call it 550 billion. I guess my question is based on from your lobbying groups.

Speaker #6: Is there actually close to bipartisan support around these numbers we're talking about? What is your sense on that?

Speaker #4: I think they—I mean, I think they both see the need for it. And I think the dollar amount is really both of them doing their work on a lot of different information that comes to them on what are the real needs from both a growth of the infrastructure system, as well as the maintenance of the infrastructure system.

Ronnie Pruitt: I mean, I think they both see the need for it, and I think the dollar amount is really both of them doing their work on a lot of different information that comes to them on what are the real needs from both growth of the infrastructure system as well as the maintenance of the infrastructure system. So I think when you talk to, you know, and Sam has announced his retirement, and so, you know, he's still leading it as of today, but he's also been involved in 7 reauthorization bills. He, it may be something that he wants to get done before his retirement. They wanna know where we're gonna get the funding from.

Speaker #4: So I think when you talk to and Sam has announced his retirement. And so he's still leading it as of today. But he's also been involved in seven reauthorization bills.

Speaker #4: And so he it may be something that he wants to get done before his retirement. But there are also they want to know where we're going to get the funding from.

Speaker #4: And so a lot of it is how is it going to be funded? And where are all those mechanisms going to hit? But I think the beauty of the 550 to 700, wherever that lays out, is when you think about this bill versus the last bill, it's going to be a more pure highway and infrastructure bill with a lot less other stuff that was in the last bill.

Ronnie Pruitt: A lot of it is, you know, how is it going to be funded and, you know, where are all those mechanisms going to hit. I think the, you know, the beauty of the $550 to 700, wherever that lays out, is when you think about this bill versus the last bill, it's going to be a more pure highway and infrastructure bill, with a lot less other stuff that was in the last bill. We look at it as all signs of positive, what degrees that is. You know, the politicians will have to figure that out. Again, I mean, you know, this gives us long-term visibility into a very meaningful portion of the supply side and the demand side of our markets. We think we're in a good place.

Speaker #4: And so we look at it as all signs of positive what degrees that is. The politicians will have to figure that out. But again, I mean, you know this gives us long-term visibility into a very meaningful portion of the supply side and the demand side of our markets.

Speaker #4: And so we think we're in a good place.

Speaker #6: Okay. Great. Thank you very much.

Keith Hughes: Okay, great. Thank you very much.

Speaker #4: Thank you.

Ronnie Pruitt: Thank you.

Speaker #2: We'll go next to Phil Ng with Jefferies. Please go ahead.

Operator: We'll go next to Philip Ng with Jefferies. Please go ahead.

Speaker #7: Hey, guys. Congrats on a solid quarter. Ronnie, Mary Andrews, I think you guys both kind of highlighted M&A as an avenue to deploy capital balance sheets in a great spot.

Philip Ng: Hey, guys. Congrats on a solid quarter. Ronnie, Mary Andries, I think you guys both kinda highlighted M&A as an avenue to deploy capital, balance sheet's in a great spot. Are you seeing any choppiness in terms of sellers in this current backdrop, or it's pretty much a full go? Ronnie, any color in terms of markets that you're targeting, size of these deals? You know, is it pure play aggregates, vertically integrated? Just give us a little more perspective what you're seeing out there and what's compelling to you.

Speaker #7: Are you seeing any choppiness in terms of sellers in this current backdrop, or is it pretty much a full go? And then, Ronnie, any color in terms of markets that you're targeting, size of these deals—is it pure play aggregates, vertically integrated?

Speaker #7: Just give us a little more perspective what you're seeing out there and what's compelling to you.

Speaker #4: Yeah. Good question. When we talk about one of our cores is expanding our reach. And we set an investor day that we were willing to look outside of our footprint as we continue to focus on aggregate-led.

Ronnie Pruitt: Yeah, good question. You know, when we talk about, you know, one of our cores is expanding our reach, and we said on Investor Day that we were willing to look outside of our footprint as we continue to focus on aggregate lead. Number one, I would tell you know, the things we're going to focus on are gonna be aggregate lead business. If they happen to come with downstream, as we've proven in the past, we'll address that and decide whether we wanna be in that business or not. We've proven in the businesses that we didn't wanna be in, that we would exit those businesses.

Speaker #4: So number one, I would tell you the things we're going to focus on are going to be aggregate-led business. If they happen to come with downstream as we've proven in the past, we'll address that.

Speaker #4: And decide whether we want to be in that business or not. And we've proven in the businesses that we didn't want to be in that we would exit those businesses.

Speaker #4: But I would tell you the footprint of where we're looking is really the high-growth areas. And how things have changed both with demographics as well as public funding as well as some of the private non-red side and the data centers driving a lot of that.

Ronnie Pruitt: I would tell you it's, you know, the footprint of where we're looking is really the high growth areas and, you know, how things have changed, both with demographics, as well as public funding, as well as some of the private non-res side, and the data centers driving a lot of that. As we look forward, we also see, you know, the energy that is needed to support these data centers is going to be another tailwind to us as we have begun, you know, really booking some energy projects. We're quoting a lot, and we've actually started booking some. I think the energy backdrop in a lot of these states is gonna be critical as they try to fulfill the needs of this data center construction.

Speaker #4: But as we look forward, we also see the energy that is needed to support these data centers is going to be another tailwind to us as we have begun really booking some energy projects.

Speaker #4: We're quoting a lot. And we've actually started booking some. And so I think the energy backdrop in a lot of these states is going to be critical as they try to fulfill the needs of this data center construction.

Speaker #4: But so I would tell you very active. From the seller side, I think headwinds with energy or anything obviously, they have to look at that.

Ronnie Pruitt: I would tell you very active. You know, from the seller side, you know, I think, you know, headwinds with energy or anything, obviously, they have to look at that. Does that accelerate them? In some cases, it could because they weren't expecting this cost to be like this, and it may accelerate their desire. I would tell you over time, these are generational changes. These are families that have to make that decision. There's a lot of complexity to that. I think a lot of the macro stuff, obviously plays into their family conversations. I don't know that it moves the needle on faster or slower. I think it's just another something we deal with.

Speaker #4: Does that accelerate them? In some cases, it could because they weren't expecting this cost to be like this. And it may accelerate their desire.

Speaker #4: But I would tell you over time, these are generational changes. These are families that have to make that decision. And so there's a lot of complexity to that.

Speaker #4: And I think a lot of the macro stuff obviously plays into their family conversations. But I don't know that it moves the needle on faster or slower.

Speaker #4: I think it's just another something we deal with. But I would remind you also, part of our growth efforts is our greenfield. And the investments we continue to make in our downstream.

Ronnie Pruitt: I would remind you also, you know, part of our growth efforts is our greenfield and the investments we continue to make in our downstream. You know, as I look forward to this year, I mean, we've got 3 new plants coming online, one in Arizona, one in Texas, and one in South Carolina that we've talked about is our greenfield strategy. From a distribution side, we have 7 yards that we will be bringing online this year. Several of them, couple in Texas, one in Florida, one in California, one in South Carolina. We continue to invest in the business to protect our franchise, to enhance where the growth of our core market is.

Speaker #4: And as I look forward to this year, I mean, we've got three new plants coming online and one in Arizona, one in Texas, and one in South Carolina that we've talked about is our greenfield strategy.

Speaker #4: From a distribution side, we have seven yards that we'll be bringing online this year. Several of them a couple in Texas, one in Florida, one in California.

Speaker #4: One in South Carolina. And so we continue to invest in the business to protect our franchise, to enhance where the growth of our core market is, and that's why we said as we continue to expand our reach, we can control things we do internally to protect the franchise that we have.

Ronnie Pruitt: That's why we said, you know, as we continue to expand our reach, we can control things we do internally to protect the franchise that we have. Externally, as we look at growth opportunities, we wanted to expand that. Some of those newer markets is where we'll be looking. Again, as I said in my prepared remarks, we got several of them that we think will be coming to close before the end of the year. I think we're in a good position.

Speaker #4: Externally, as we look at growth opportunities, we wanted to expand that. And so some of those newer markets is where we'll be looking. And again, as I said in my prepared remarks, we got several of them that we think will be coming to close before the end of the year.

Speaker #4: So I think we're in a good position.

Speaker #7: Great color. Really appreciate it. Thank you.

Philip Ng: Great color. Really appreciate it. Thank you.

Speaker #4: Thank you.

Ronnie Pruitt: Thank you.

Speaker #2: We'll hear next from Angel Castillo with Morgan Stanley. Please go ahead.

Operator: We'll hear next from Angel Castillo with Morgan Stanley. Please go ahead.

Speaker #7: Hi. Good morning. And thanks for taking my question. Just two part. One on the four-year and then one on 2Q. I guess on the four-year, Ronnie, I think you mentioned that you don't expect the diesel prices to be kind of longer lasting.

Angel Castillo: Hi, good morning, and thanks for taking my question. Just two part, one on the full year and then one on Q2. I guess on the full year, Ronnie, I think you mentioned that you don't expect the diesel prices to be kind of longer lasting, and you kind of view that as a little bit more temporary. Just wanted to clarify, I guess, the full year guide at this point, just wanna, I guess, clarify, it does assume diesel prices remain at current levels, or are you anticipating that to come off in the second half? Then kind of related to that, I guess, depending on what your assumptions are, mid-years you typically talk about as being beneficial to kind of the following fiscal year.

Speaker #7: And you kind of view that as a little bit more temporary. So I just wanted to clarify. I guess the full-year guide at this point, just want to I guess clarify, it does assume diesel prices remain at current levels, or are you anticipating that to come off in the second half and then kind of related to that, I guess, depending on what your assumptions are, mid-years you typically talk about as being beneficial to kind of the following fiscal year.

Speaker #7: So should we think about it as being any offsets in the second half of this year being more vulcan way of operations, driven? And then on the second quarter, apologies if I missed it, but I just wanted to clarify.

Angel Castillo: Should we think about it as being any offsets in H2 of this year being more Vulcan Way of Operating driven? On Q2, apologies if I missed it, but I just wanted to clarify, I guess, what's kind of your expectation on price, volume, and gross profit per ton when you kind of put all the pieces together?

Speaker #7: I guess, what’s kind of your expectation on price, volume, and gross profit per ton when you kind of put all the pieces together?

Speaker #4: Let me unpack all that. So first, I would start with kind of where our assumptions are. And I would tell you, I mean, the assumptions that we're making in reinforcing our earnings for the full year is really a combination of the history of our business.

Ronnie Pruitt: Let me unpack all that. First I would start with kind of where our assumptions are. I would tell you, the assumptions that we're making in reinforcing our earnings for the full year is really a combination of the history of our business. If fuel stays up for the remainder of the year, our pricing will reflect that. If fuel comes back down, our margins will reflect that. We're very flexible in our ability to go out and capture whatever those headwinds are. I think our business model has proven that time over time over time. I'm confident in that as we build out and look at what we anticipate for the remainder of the year.

Speaker #4: And so, if fuel stays up for the remainder of the year, then our pricing will reflect that. If fuel comes back down, then our margins will reflect that.

Speaker #4: And so we're very flexible in our ability to go out and capture whatever those headwinds are. And I think our business model has proven that time over time, over time.

Speaker #4: And so I'm confident in that as we build out and look at what we anticipate for the remainder of the year. I mean, we would love to say that this thing is temporary, but we're planning for it to be longer.

Ronnie Pruitt: I mean, we would love to say that this thing is temporary, but we're planning for it to be longer, and we have that accounted for in our guidance. I'm not worried about that headwind. As far as growth in Q2, again, as we looked at the cadence of our quarters, we said, you know, our pricing was gonna start out at the lower end because of the comps over year-over-year on some of the hurricane recovery work, and it was gonna accelerate through the year. I think that's gonna play out exactly like we've laid it out. On the demand side and our shipment side, I mean, I think we experienced more normal weather in Q1, and I think that contributed to, you know, the growth in our shipments that we saw.

Speaker #4: And we have that accounted for in our guidance. And so I'm not worried about that headwind. As far as growth in the second quarter, again, as we looked at the cadence of our quarters, we said our pricing was going to start out at the lower end because of the comps over year over year on some of the hurricane recovery work.

Speaker #4: And it was going to accelerate through the year. And I think that's going to play out exactly like we've laid it out on the demand side and our shipment side.

Speaker #4: I mean, I think we experienced more normal weather in the first quarter. And I think that contributed to the growth in our shipments that we saw.

Speaker #4: I think also the size of these projects and the speed of which these projects are shipping is also something that is weather impacts those.

Ronnie Pruitt: I think also the size of these projects and the speed at which these projects are shipping is also something that as weather impacts those. As we see more normal weather, I mean, our contractors aren't out there going, Okay, we're gonna, we're gonna ship this much during Q1, and then we'll stop, and then we'll start Q2. I mean, they're building these projects. They don't care about a calendar. They care about what's happening today, what's happening with the weather they're experiencing. If they can go forward faster, they're gonna do that. Especially with this data center work, I mean, you know, these companies are looking for return on these large investments, and they don't get a return for that thing being under construction. They get a return when it's finished.

Speaker #4: And so as we see more normal weather, I mean, our contractors aren't out there going, "Okay, we're going to ship this much during the first quarter, and then we'll stop, and then we'll start a second quarter." I mean, they're building these projects.

Speaker #4: They don't care about a calendar. They care about what's happening today, what's happening with the weather they're experiencing, and if they can go forward faster, they're going to do that.

Speaker #4: And especially with this data center work, I mean, these companies are looking for return on these large investments. And they don't get a return with that thing being under construction.

Speaker #4: They get a return when it's finished. And so the speed of those things are obviously critical to the process of the job. And so I think we see second quarter continue to play out that we would expect again based on normal weather that our shipping levels would continue to be as expected as we planned out in the year.

Ronnie Pruitt: The speed of those things are obviously critical to the process of the job. I think we see, you know, Q2 continue to play out that we would expect, again, based on normal weather, that our shipping levels would continue to be as expected, as we planned out in the year. As we laid that out, they're going as expected. I don't see a lot of noise right now within the shipping side or the demand side. I think those are the some visibility that we have through our backlog and our bookings.

Speaker #4: And as we laid that out, they're going as expected. And so I don't see a lot of noise right now within the shipping side or the demand side.

Speaker #4: I think those are some visibility that we have through our backlog. And our bookings.

Speaker #3: Yeah. And Angel, one thing we highlighted coming into the year in terms of how to think about earnings overall was to think about more normal seasonal spreads than to think purely about year over year comps.

Mary Andrews Carlisle: Yeah, Angel, one thing, you know, we highlighted coming into the year in terms of how to think about earnings overall was to think about more normal seasonal spreads than to think purely about year-over-year comps. As we sit here today, you know, I think one way to think is look at historically what, you know, our business kind of looks like H1, H2. Given the strong start that we got and the contribution that we got in Q1, and what our expectations are for Q2, I think, you know, we'll still, you know, land in that probably 45, 55 type split. You know, as I highlighted earlier, you know, the diesel headwind in Q2, you know, will squeeze us a bit there.

Speaker #3: And so as we sit here today, I think one way to think is look at historically what our business kind of looks like first half, second half, and given the strong start that we got and the contribution that we got in the first quarter, and what our expectations are for the second quarter, I think we'll still land in that probably 45, 55 type split.

Speaker #3: And as I highlighted earlier, the diesel headwind in the second quarter will squeeze us a bit there.

Speaker #7: Very helpful. Thank you.

Angel Castillo: Very helpful. Thank you.

Speaker #4: Thank you.

Ronnie Pruitt: Thank you.

Speaker #2: We'll hear next from David McGregor with Longbow Research. Please go ahead.

Operator: We'll hear next from David MacGregor with Longbow Research. Please go ahead.

Speaker #8: Hi. Good morning. This is Joe Nolan. I'm for David. I just wanted to good morning. I just wanted to touch on the non-res business.

Joe Nolan: Hi, good morning. This is Joe Nolan on for David.

Ronnie Pruitt: Morning.

Joe Nolan: Morning. I just wanted to touch on the non-res business. You've obviously talked about the strengths in data centers. Just in some of the other verticals like warehouses, manufacturing, commercial, if you could just talk about backlogs and demand within those businesses.

Speaker #8: You've obviously talked about the strength in data centers, but just in some of the other verticals like warehouses, manufacturing, commercial. If you could just talk about backlogs and demand.

Speaker #8: Within those businesses.

Speaker #4: Yeah. As we went into the year, we said data centers were the leading private non-res. We said we thought we would see some of the green shoots in warehousing.

Ronnie Pruitt: Yeah, as we went into the year, we said, you know, data centers were leading private non-res. We said we thought we would see some of the green shoots in warehousing, and we've seen some of our markets turn positive, but from a very low start, very low rate. You know, I think those are opportunities for the future as those markets play out. When I look at Kind of buildings and non-res side. I mean, we've got good momentum going in Texas with some fuel energy related projects, some LNG projects that started back. We're shipping on some manufacturing type projects that we started back shipping on. In Illinois, we've seen both data centers as well as some warehouse stuff that has really kicked in.

Speaker #4: And we've seen some of our markets turn positive. But from a very low start, very low rate. So I think those are opportunities for the future as those markets play out.

Speaker #4: But when I look at kind of buildings and non-res side, I mean, we've got good momentum going in Texas with some fuel energy-related projects.

Speaker #4: Some LNG projects that started back were shipping on, some manufacturing-type projects that we started back shipping on. In Illinois, we've seen both data centers as well as some warehouse stuff that has really kicked in.

Speaker #4: And so I think it's a combination. I mean, data centers is obviously growing at the fastest pace within our private non-res category. But I mean, the energy side is very encouraging.

Ronnie Pruitt: I think it's a combination. I mean, data centers is obviously growing at the fastest pace within our private non-res category. I mean, the energy side is very encouraging, and we're in a lot of active conversations around energy projects. I think the energy companies are in the middle of planning a lot of those projects. I think that those type of projects obviously will have more permitting, and things that they have to do from a timing perspective. I'm not sure they'll move as fast as what some of the data centers have, but in the end, it's all really forms of good forward-looking demand on the private non-res side. It's a mix of different types of projects.

Speaker #4: And we're in a lot of active conversations around energy projects. And I think the energy companies are in the middle of planning a lot of those projects.

Speaker #4: I think that those type of projects obviously will have more permitting and things that they have to do from a timing perspective. I'm not sure they'll move as fast as what some of the data centers have.

Speaker #4: But in the end, it's all really forms of good forward-looking demand on the private non-res side. And so it's a mix. Different types of projects.

Speaker #4: But again, data centers has been kind of the lead of that.

Ronnie Pruitt: Again, you know, data centers has been kind of the lead of that.

Speaker #8: Got it. Thanks. I'll pass it on.

Joe Nolan: Got it. Thanks. I'll pass it on.

Speaker #4: Thank you.

Ronnie Pruitt: Thank you.

Speaker #2: We'll turn now to Michael Finiger with Bank of America. Please go ahead.

Operator: We'll turn now to Michael Feniger with Bank of America. Please go ahead.

Speaker #9: Hey, guys. Thanks for squeezing me in here. Ronnie, just if we do get a CR, does that change your view at all on 2027 and how that looks up?

Michael Feniger: Hey, guys. Thanks for squeezing me in here. Ronnie, just if we do get a CR, does that change your view at all on 2027 and how that looks up? Does that shift us from a growth market to maybe flattish, or we're still maybe in growth mode because of the dollars left spent?

Speaker #9: Does that shift us from a growth market to maybe flattish, or we're still maybe in growth mode because of the dollar's left spent?

Speaker #4: Yeah. I don't think it changes it. And I'll give you a couple of reasons why. One, the point you make is we still have dollars that are going to carry over.

Ronnie Pruitt: Yeah, I don't think it changes it. I'll give you a couple of reasons why. One, you know, the point you make is we still have dollars that are going to carry over. I mean, when we look at our bookings and backlogs, a lot of those projects from a federal side are multi-year projects. Not only are they booked and we're shipping on them, but also the dollars that are carrying forward will project well into 2027. I'll also remind you that only a third of highway and funding is really the federal side. When we look at the state side, and then we look at other measures that the states have put in, we look at these public-private partnerships, we look at toll authorities.

Speaker #4: I mean, when we look at our bookings and backlogs, a lot of those projects from a federal side are multi-year projects. And so not only are they booked and we're shipping on them, but also the dollars that are carrying forward will project well into '27.

Speaker #4: But I'll also remind you that only a third of highway funding is really the federal side. And so, when we look at the state side, and then we look at other measures that the states have put in, we look at these public-private partnerships, we look at toll authorities—there are a lot of growth projects out there right now that are very small in federal dollars and larger in other funding. That gives us a lot of confidence that, again, I've said it in the past, and I'll continue to say, public is probably the least of my worries.

Ronnie Pruitt: There are a lot of growth projects out there right now that are very small in federal dollars and larger in other funding. That gives us a lot of confidence that, again, I've said it in the past, and I'll continue to say public is probably the least of my worries. I mean, I just think we're in a really good position to get the funding in place, and there's other ways the states have gotten creative around funding their own programs. I think, as I look forward, I don't, I don't see 2027 being a problem when it comes to public.

Speaker #4: I mean, I just think we're in a really good position to get the funding in place. And there's other ways that the states have gotten creative.

Speaker #4: Around funding their own programs. And so I think as I look forward, I don't see '27 being a problem when it comes to public.

Speaker #9: Great. And Ronnie, just on the pricing side, I know we started Q1 at the low end. That was something you guys always talked about with that plus 4.

Michael Feniger: Great. Ron, just on the pricing side, I know we started Q1, you know, at the low end. That was something you guys always talked about with that plus four. Just with the mid-years, are we exiting above that 4% to 6% range on the full year growth? You referenced 2022, how you guys respond to the inflationary pressure. You guys are very quick to get that price increases in there, and we saw that in the numbers. Is there anything different that we should think about 2026 versus 2022? Just, you know, in terms of the demand environment coming out of COVID versus maybe where we are now.

Speaker #9: Just with the mid-years, are we exiting above that 4 to 6 percent range on the full-year growth? And you referenced 2022, how you guys respond to the inflationary pressure.

Speaker #9: You guys are very quick to get that price increases in there. And we saw that in the numbers. Is there anything different that we should think about 2026 versus 2022?

Speaker #9: Just in terms of the demand environment coming out of COVID versus maybe where we are now? Are there differences or similarities on how we should kind of look at that 2022 period where you guys were quick to respond to inflation versus where we are now today?

Michael Feniger: Are there differences or similarities in how we should kind of look at that 2022 period where you guys were quick to respond to inflation versus where we are now today?

Speaker #4: Yeah. I think there are. I mean, there's lots of differences. And there's always differences on the demand side. And so as I look at the difference between 2022 and 2026, 2022 coming out of COVID, residential really took off.

Ronnie Pruitt: Yeah. I think there are. I mean, there's lots of differences, there's always differences on the demand side. As I look at the difference between 2022 and 2026, 2022 coming out of COVID, residential really took off. A lot of that mid-year and first of the year pricing that again, we referenced that back to the customer base was a lot of our fixed plant stuff, which the concrete guys back then were experiencing some really good tailwinds when it came to the majority of their market being tied to single family. I mean, that's not happening today.

Speaker #4: And so a lot of that mid-year and first of the year pricing that, again, we referenced that back to the customer base was a lot of our fixed plant stuff, which the concrete guys back then were experiencing some really good tailwinds when it came to the majority of their market being tied to single-family.

Speaker #4: That's a different I mean, that's not happening today. If that accelerates, and we've said if the third leg of our stool, public-private non-res and single-family or resi, if that third leg of the stool kicks in, obviously, it's going to give us a lot of tailwinds when it comes to both the demand side of our products as well as the pricing side and that momentum.

Ronnie Pruitt: If that accelerates and we've said if the, you know, the third leg of our stool, public, private, non-res, and single family or resi, if that third leg of the stool kicks in, obviously it's going to give us a lot of tailwinds when it comes to both the demand side of our products as well as the pricing side and that momentum. I think, you know, originally what you know, said, I mean, I think is absolutely right that, you know, our confidence is that our pricing throughout the year will continue to build momentum. Exiting that obviously will need to be at the higher end of our range because that's just the math. We have confidence in our ability to do that.

Speaker #4: But I think originally what you said, I mean, I think is absolutely right that our confidence is that our pricing throughout the year will continue to build momentum.

Speaker #4: So, exiting that, obviously, will need to be at the higher end of our range because that's just the math. And so we have confidence in our ability to do that.

Speaker #4: And I think it's too early to call what the success of mid-years is going to be, because it's choppy. I mean, it's every individual market.

Ronnie Pruitt: I think, you know, it's too early to call, you know, what's the success of mid-year is going to be because it's choppy. I mean, it's every individual market. I mean, these are local markets that we have, you know, active conversations going on with our customers and we wanna be their supplier of choice. In the end, you know, we're gonna be disciplined around that. I would tell you, we have good momentum. The quarter played out exactly what we expected. I think the rest of the year, we have all the mechanisms in place to continue to reinforce, you know, the earnings of the business.

Speaker #4: I mean, these are local markets that we have active conversations going on with our customers and we want to be their supplier of choice.

Speaker #4: And so in the end, we're going to be disciplined around that. But I would tell you we have good momentum the quarter played out exactly what we expected.

Speaker #4: And I think the rest of the year, we have all the mechanisms in place to continue to reinforce the earnings of the business.

Operator: We'll turn next to Ivan Yi with Wolfe Research. Please go ahead.

Speaker #2: We'll turn next to Ivan Yee with Wolfe Research. Please go ahead.

Speaker #10: Good morning. Thank you. Can you comment on transportation costs? Truck rates are currently up about 20 to 30 percent year over year. Are you able to fully pass through these higher costs to your end customers?

Ivan Yi: Morning. Thank you. Can you comment on transportation costs? Truck rates ex fuel are currently up about 20% to 30% year over year. Are you able to fully pass through these higher costs to your customers? On that, do higher truckload rates incentivize moving more volumes to rail where you can? Thank you.

Speaker #10: And on that, do higher truckload rates incentivize moving more volumes to rail where you can? Thank you.

Speaker #4: Yeah. So if you I guess I'll answer the back half of it. When it comes to rail, I mean, you can move more to rail, but you also have to have the rail yard to be able to do that.

Ronnie Pruitt: Yeah. If you know, I guess I'll answer the back half of it. When it comes to rail, you can move more to rail, but you also have to have the rail yard to be able to do that. You know, our rail yards are really an extension of the operating plants that those markets support. And really, you know, the significance of that is our ability to capture the value of those products at the yards because of any increase in distribution costs, which would include rail distribution, we're able to capture that. And a lot of those yards are really in high growth markets. That's why we put yards there, because that's where the growth is, and it helps us supply that market, and it limits the amount of distribution costs to get there.

Speaker #4: And so, our rail yards are really an extension of the operating plants that those markets support. And really, the significance of that is our ability to capture the value of those products at the yards because, with any increase in distribution cost—which would include rail distribution—we're able to capture that. And a lot of those yards are really in high-growth markets.

Speaker #4: That's why we put yards there because that's where the growth is. And it helps us supply that market. And it limits the amount of distribution cost to get there on the overall delivery side.

Ronnie Pruitt: On the overall delivery side, as I said, you know, early on, you know, we have surcharges in place to capture that. You know, delivery to us is really a pass-through. We don't try to make money on delivery. That's a third party. We have owner-operators that do that. We do provide that service to our customers, but it's not something that we see as a headwind or a tailwind. It's just the cost of doing business. You got to get the rock to the job. Delivery to us is a pass-through, and we have surcharges in place to make sure we're not, you know, we're not paying the penalty on any fuel cost increases.

Speaker #4: As I said early on, we have surcharges in place to capture that. Delivery to us is really a pass-through. We don't try to make money on delivery.

Speaker #4: That's a third party. We have owner-operators that do that. And so we do provide that service to our customers. But it's not something that we see as a headwind or tailwind.

Speaker #4: It's just a cost of doing business. You’ve got to get the rock to the job. And so, delivery to us is a pass-through. And we have surcharges in place to make sure we're not paying the penalty in any fuel cost increases.

Speaker #11: Yeah. And one other thing, Ronnie talked a lot earlier about the our advantaged footprint in terms of where we are. An advantage we also have is not just geographically where we are, but what our positions are in those markets.

Mary Andrews Carlisle: Yeah. One, you know, one other thing, Ronnie talked a lot earlier about the, you know, our advantaged footprint in terms of where we are. An advantage we also have is not just geographically where we are, but what our positions are in those markets. You know, I think over the longer term, if you think about, you know, those positions in an environment of rising transportation costs, you know, it can serve to widen our logistical mode advantages.

Speaker #11: And so I think over the longer term, if you think about those positions in an environment of rising transportation costs, it can serve to widen our logistical mode advantages.

Speaker #10: Thank you.

Ivan Yi: Thank you.

Speaker #2: And we'll hear next from Rohit Seth with B. Reilly Securities. Please go ahead.

Operator: We'll hear next from Rohit Seth with B. Riley Securities. Please go ahead.

Speaker #12: Hey, thanks for taking my question. Just back on the volumes—volumes up 5. So, you built a little bit of cushion here going into the rest of the year.

Rohit Seth: Hey, thanks for taking my question. Just back on the volumes. Volumes up 5, so you built a little bit of cushion here going into the rest of the year. I mean, can you provide a sense of how the quarter played out, the cadence from January to March? If you have any comments on April.

Speaker #12: Can you provide a sense of how the quarter played out? The cadence from January to March and then if you have any comments on April.

Speaker #4: Yeah. I would say when we talked about more normal weather, really the more normal weather we experienced was really more in the smile of the US.

Ronnie Pruitt: Yeah, I would tell you when we talked about more normal weather, really the more normal weather we experienced was really more in the smile of the US. It was really more California based, and then in the South in Texas and then across the Southeast. I mean, we saw a lot of very cold start to the year in Illinois and in our Northeast markets. I would tell you, our shipments reflected that. I would tell you, we started off slower in January, and we built momentum through February and into March. You know, really weather for us, it's two parts. I mean, you know, precipitation, rain is one thing, and rain obviously affects the day that we're shipping.

Speaker #4: It was really more California-based. And then in the south in Texas and then across the southeast. I mean, we saw a lot of very cold start to the year in Illinois and in our northeast markets.

Speaker #4: And I would tell you our shipments reflected that. I would tell you we started off slower in January, and we built momentum through February.

Speaker #4: And into March. And so really, weather for us, it's two parts. I mean, precipitation, rain is one thing, and rain obviously affects the day that we're shipping.

Speaker #4: But the cold start to the year in the Northeast, and the cold start to the year in the middle of the country, it definitely had an impact on, one, you're not laying mix, and one, you're not pouring concrete.

Ronnie Pruitt: The cold start to the year in the Northeast and the cold start to the year in the, in the middle of the country, it definitely had an impact on, one, you're not laying mix, and one, you're not pouring concrete, but two, you're not operating. I mean, we really got off to a slower start in January in some of our northern markets. That's, that's typical. I mean, that's not something that caught us off guard. I mean, we knew that was that's what we planned for is it to be cold in Chicago in January. I would tell you the quarter from a cadence side, I think it played out exactly like we said.

Speaker #4: But two, you're not operating. I mean, so we really got off to a slower start in January in some of our northern markets. But that's typical.

Speaker #4: I mean, that's not something that caught us off guard. I mean, we knew that was going to— that's what we planned for, is to be cold in Chicago in January.

Speaker #4: So, I would tell you the quarter—from a cadence side—I think it played out exactly like we said. And I would tell you, as we got into March, I mean, with drier weather and with warmer temperatures—again, the size of these projects matter.

Ronnie Pruitt: I would tell you, as we got into March, I mean, with drier weather and with warmer temperatures, again, the size of these projects matter, and where our footprint is matters. When I say literally 60% of these large projects are within 50 miles of a Vulcan facility, that matters. Their ability. We highlighted this in our investor day when we talked about, you know, the complexity of these jobs and how much they want a supplier that can have redundancy. They want suppliers that can meet their production schedule. Some of these schedules literally can drift up, you know, 30% or 40% in their schedule as far as the demand perspective. That matters.

Speaker #4: And where our footprint is matters. And when I say literally 60% of these large projects are within 50 miles of a Vulcan facility, that matters.

Speaker #4: And their ability—and we highlighted this in our Investor Day when we talked about the complexity of these jobs and how much they want a supplier that can have redundancy.

Speaker #4: They want suppliers that can meet their production schedule. And some of these schedules literally can drift up 30 or 40 percent in their schedule as far as the demand perspective.

Speaker #4: And so that matters. I mean, I think our size and location is very critical when it comes to where these projects are going. And so I would anticipate, again, I mean, as we get into the second quarter, I think that cadence will be.

Ronnie Pruitt: I mean, I think our size and location is very critical when it comes to where these projects are going. I would anticipate, again, I mean, as we get into Q2, I think that cadence will be. We also said, you know, we started off 5% up. We said we still believe we're gonna be in growth, we didn't say we're gonna raise our, you know, our expectations on the overall demand of our products. We think it's still gonna play out through the remainder of the year, in that low single digit area.

Speaker #4: But we also said we started off 5% up. We said we still believe we're going to be in growth, but we didn't say we're going to raise our expectations on the overall demand of our products.

Speaker #4: We think it's still going to play out through the remainder of the year, in that low single-digit area.

Speaker #11: Yeah. And that's really based on in a seasonally adjusted basis, we feel like we're right on track for our full-year guidance. I think as you think about the rest of the year, one thing to keep in mind is that seasonally adjusted last year's second quarter was weaker than where we finished the year.

Mary Andrews Carlisle: Yeah. That's really based on, you know, on a seasonally adjusted basis, we feel like we're right on track for our full year guidance. I think as you think about the rest of the year, you know, one thing to keep in mind is that seasonally adjusted last year's Q2, you know, was weaker than where we finished the year. We'll have easier year over year comps, you know, in the Q2 than we will in the H2. But in terms of the again, a lot of noise in the quarters, but for the full year guidance, we think we're, you know, on track to deliver that modest growth for the year.

Speaker #11: So we'll have easier year-over-year comps in the second quarter than we will in the back half. But in terms of, again, a lot of noise in the quarters, but for the full-year guidance, we think we're on track to deliver that modest growth for the year.

Speaker #12: Okay. Thanks. Any thoughts on April?

Rohit Seth: Okay, thanks. Any thoughts on April? Can you?

Speaker #10: I think April is going as expected.

Ronnie Pruitt: I think April is going as expected.

Speaker #12: Okay. And then just the last follow-up. Are you seeing any project cancellations or anything getting pushed out due to the Iran war? And maybe just delaying waiting for things to normalize?

Rohit Seth: Okay. Just a last follow-up. Are you seeing any project cancellations or anything getting pushed out due to the Iran war? Anything just delaying, waiting for things to normalize?

Speaker #10: We have not. We're paying very close attention to that because I mean, that's a possibility, obviously. But we have not seen anything as of today with either public or private side that we've seen any projects that have been canceled or delayed.

Ronnie Pruitt: We have not. We're paying very close attention to that because, you know, I mean, that's a possibility obviously. We have not seen anything as of the date with either public or private side that we've seen any projects that have been canceled or delayed.

Speaker #12: All right. Thank you.

Rohit Seth: All right. Thank you.

Speaker #10: Thank you.

Ronnie Pruitt: Thank you.

Rohit Seth: Good luck.

Speaker #2: Thank you, everyone. With no further questions in queue, I would like to turn the floor over to CEO Ronnie Pruitt for closing comments.

Operator: Thank you, everyone. With no further questions in queue, I would like to turn the floor over to CEO Ronnie Pruitt for closing comments.

Speaker #10: Thank you. And thank you all for your interest in Vulcan Materials. I'm proud of what our teams have accomplished in the first quarter, but we're never satisfied, and we're always looking ahead.

Ronnie Pruitt: Thank you. Thank you all for your interest in Vulcan Materials. I'm proud of what our teams have accomplished in Q1, but we're never satisfied and we're always looking ahead. We're committed to continuous improvement and long-term value creation for all of our stakeholders, and we look forward to speaking with you at our next quarter. Thank you.

Speaker #10: We're committed to continuous improvement and long-term value creation for all of our stakeholders. And we look forward to speaking with you at our next quarter.

Speaker #10: Thank you.

Speaker #2: Ladies and gentlemen, that will conclude today's event. Thank you for your participation. You may disconnect at this time, and have a wonderful rest of your day.

Operator 2: Ladies and gentlemen, that will conclude today's event. Thank you for your participation. You may disconnect at this time and have a wonderful rest of your day.

Operator: Ladies and gentlemen, that will conclude today's event. Thank you for your participation. You may disconnect at this time and have a wonderful rest of your day.

Q1 2026 Vulcan Materials Co Earnings Call

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