NYSE:VMC Vulcan Materials Q2 2024 Earnings Report $266.13 -1.11 (-0.42%) Closing price 03:59 PM EasternExtended Trading$265.44 -0.69 (-0.26%) As of 07:59 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Vulcan Materials EPS ResultsActual EPS$2.35Consensus EPS $2.47Beat/MissMissed by -$0.12One Year Ago EPS$2.29Vulcan Materials Revenue ResultsActual Revenue$2.01 billionExpected Revenue$2.03 billionBeat/MissMissed by -$20.02 millionYoY Revenue Growth-4.70%Vulcan Materials Announcement DetailsQuarterQ2 2024Date8/6/2024TimeBefore Market OpensConference Call DateTuesday, August 6, 2024Conference Call Time11:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)SEC FilingEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Vulcan Materials Q2 2024 Earnings Call TranscriptProvided by QuartrAugust 6, 2024 ShareLink copied to clipboard.There are 13 speakers on the call. Operator00:00:00Good morning. Welcome everyone to the Vulcan Materials Company Second Quarter 2024 Earnings Call. My name is Todd, and I will be your conference call coordinator today. Please be reminded that today's call is being recorded and will be available for replay later today at the company's website. All lines have been placed in a listen only mode. Operator00:00:22After the company's prepared remarks, there will be a question and answer Now I will turn the call over to your host, Mr. Mark Warren, Vice President of Investor Relations for Vulcan Materials. Mr. Warren, you may begin. Speaker 100:00:49Thank you, operator, and good morning, everyone. With me today are Tom Hill, Chairman and CEO and Mary Andrews Carlisle, Senior Vice President and Chief Financial Officer. Today's call is accompanied by a press release and a supplemental presentation posted to our website, vulcanmaterials.com. Please be reminded that today's discussion may include forward looking statements, which are subject to risks and uncertainties. These risks, along with other legal disclaimers, are described in detail in the company's earnings release and in other filings with the Securities and Exchange Commission. Speaker 100:01:26Reconciliations of non GAAP financial measures are defined and reconciled in our earnings release, our supplemental presentation and other SEC filings. During the Q and A, we ask that you limit your participation to one question. This will allow us to accommodate as many as possible during our time we have available. And with that, I'll turn the call over to Tom. Speaker 200:01:49Thank you, Mark, and thank all of you for your interest in Vulcan Materials. Our results demonstrate how our teams have successfully navigated a challenging first half of the year. Unfavorable weather conditions in many key markets impacted our shipments and operating efficiencies. Our 2nd quarter performance reinforces our consistent execution, the durable characteristics of our Aggregus led business and the benefits of our continued focus on both enhancing our core and expanding our reach. Even in the face of lower aggregate shipments and weather driven inefficiencies, our teams delivered a 7th consecutive quarter of double digit year over year improvement in aggregates unit profitability. Speaker 200:02:36In our trailing 12 months, aggregates cash gross profit per ton has reached $9.96 per ton, marking consistent progress towards our $11 to $12 target. These achievements exhibit the benefits of our commitment to enhancing our core through our Vulcan Wave selling and Vulcan Wave operating disciplines. But our strategy is 2 pronged and we are also focused on expanding our reach. During the Q2, we closed 2 strategic bolt on acquisitions. These acquisitions enhance both our aggregates production and distribution capabilities and our downstream asphalt business in Alabama and Texas, 2 of our top 10 states. Speaker 200:03:24In the quarter, we generated $603,000,000 of adjusted EBITDA and expanded our adjusted EBITDA margin by 170 basis points despite 5% lower area shipments. Shipments in the quarter were negatively impacted by a significant number of rain days in many markets, particularly in May across nearly 70% of our geographies and in select key markets in April June. The pricing environment remained positive and freight adjusted average selling prices improved 12% or $2.29 per ton versus the prior year. Freight adjusted unit cash cost of sales increased 13% or $1.13 per ton. Most importantly, cash gross profit per ton improved over $1 per ton or 12%. Speaker 200:04:18We remain consistently focused on improving unit profitability on every ton we sell to maximize earnings and cash generation in any demand environment. Let me share with you my thoughts on the current demand backdrop by discussing each end use. Single family starts began recovering in the second half of last year and continue to point to growth in 2024, albeit at slightly lower level than we had initially anticipated. The timing of starts converting to shipments, continued affordability issues and persistent elevated interest rates are impacting both the pace of recovery and the likelihood of single family growth fully offsetting weaker multifamily activity. Looking ahead, the underlying fundamentals of population growth and low inventories in Vulcan markets continue to support long term growth in residential construction. Speaker 200:05:18In private non residential construction, the landscape continues to vary across categories, but is unfolding largely as we anticipated for 2024. Warehouse activity is the biggest headwind with some positive momentum in manufacturing activity in data centers. Light commercial activity is still relatively weak, but over time we expect it to follow the positive trends in single family housing and benefit from lower interest rates. On the public side, we continue to expect growth in 2024 as 2 consecutive years of record growth in contract awards flow into projects and aggregate shipments. The IIJ funding is benefiting both highways and other public infrastructure activity. Speaker 200:06:06Given the demand backdrop just discussed and the weather impacted first half shipments being down 6 percent. We now expect aggregate shipments to decline between 4% 7% for the full year. Combined with solid pricing environment and double digit profitability improvement, we still anticipate same store adjusted EBITDA growth, margin expansion and attractive free cash flow generation in 2024. Now I'll turn the call over to Mary Andrews for additional commentary on our results and revised outlook. Mary Andrews? Speaker 300:06:43Thanks, Tom, and good morning. The strong fundamentals of our aggregate led business and our consistent execution continue to deliver attractive cash generation, which coupled with disciplined capital allocation is driving our returns on invested capital higher over time. During the Q2, we deployed capital to reinvest in and expand our existing franchise to grow our business through acquisition and and $298,000,000 on a year to date basis. And $298,000,000 on a year to date basis. We continue to expect to spend between $625,000,000 $675,000,000 for the full year. Speaker 300:07:32During the quarter, we also allocated 181,000,000 dollars to the strategic bolt on acquisitions Tom mentioned earlier and returned $111,000,000 to shareholders through our quarterly dividend and common stock repurchases. At June 30, our return on invested capital had improved 100 and 60 basis points over the last 12 months with a 10% improvement in adjusted EBITDA generated on flat average invested capital. And with net debt to adjusted EBITDA leverage of 1.7 times at quarter end, we have considerable investment capacity within our target leverage range of 2 to 2.5 times to capitalize on attractive acquisition opportunities that will drive long term value creation for shareholders. SAG expenses in the quarter were 6.7% of revenue and year to date have increased less than 3% over the prior year. We are focused on both disciplined cost control and Speaker 400:08:56in the first 6 Speaker 300:08:56months and lower shipments, we now expect unit freight adjusted cash cost of sales to increase high single digits compared to the prior year. We continue to expect aggregates prices to increase 10% to 12% for the year, driving another year of double digit improvement in cash gross profit per ton. We anticipate that the strong unit profitability improvement coupled with the lower volume expectations will generate adjusted EBITDA between $2,000,000,000 $2,150,000,000 for the full year. I'll now turn the call back over to Tom to provide a few closing remarks. Speaker 200:09:35Thank you, Mary Andrews. I want to conclude by thanking our talented Vulcan team for their commitments to each other and to excellence as they work each day, rain or shine, to operate safely and deliver value for our customers and our shareholders. I am confident that we have the right 2 pronged strategy of enhancing our core and expanding our reach. And I'm excited about the runway ahead of us on both fronts to drive attractive growth for Vulcan Materials. And now, Mary Andrews and I will be happy to take your questions. Operator00:10:24Our first question comes from Stanley Elliott with Stifel. Please go ahead. Speaker 500:10:30Hey, good morning, everyone. Thank you all for taking the question. Tom, could you talk a little bit more about the overall demand environment? I understand it's been pretty tough operating conditions on a year to date basis and probably even into July a little bit. Any sort of help in how we should think about the balance of the year, kind of where you see momentum and things like that? Speaker 200:10:54Yes. Good morning, Stanley. I think, Stanley, all of the data and the leading indicators would support demand as we originally expected back in February with the exception of single family demand growth. The growth in single family is a little slower than we would have expected, maybe 4 or 5 months ago and we'll talk about that a little bit later. But as we look at the current volume guidance, as you said, we had a very wet July that influenced those numbers and will definitely have a negative impact on Q3. Speaker 200:11:25Where we ultimately fall in that volume range of the negative 4 to negative 7 will really come down to the number of dry shipping days we have left in the last 5 months of the year. So I'd frame it underlying demand as expected, except a little bit slower growth in single family. Weather has not been our friend. We'll see how the second half goes. I think the good news is we continue to expand your margins by double digit and I think our folks have taken a difficult hand in the first half and turned it to a winner and I'm proud of their performance. Speaker 500:11:57Great, guys. Thanks so much. Best of luck in the back half. Thank you. Operator00:12:02Thank you. Our next question will come from Garik Shmois with Loop Capital. Please go ahead. Speaker 600:12:08Hi, thanks. Just wanted to follow-up on that point with respect to the second half volume outlook. I was wondering if you could go into maybe a little bit more detail on how to think about the pent up demand opportunity. I think you did speak to weather influencing if you can get all the projects done. But is this a case of projects being delayed and not canceled? Speaker 600:12:31And just maybe a little bit more color on how you expect the second half of the year to play out from the new standpoint? Speaker 200:12:38Sure. I think that if you kind of look at what's happened and take that into the second half, your point of demand doesn't go away is absolutely spot on. And you probably got some pent up there and it comes down to what the weather does to us. I think it's looking back to explain the future that we were really impacted by rain in the first half and I'll give you a couple of examples. In Q2 Nashville had 30 rain days, and it dramatically impacted shipments. Speaker 200:13:12Look, we lost half of our shipping days in that Middle Tennessee market. DFW had double the amount of rainfall, so we just never dried out and couldn't ship. The flip side of that is you saw Atlanta weather pretty much normal and shipments were as expected. LA had weather normal and shipments were right on where we had planned. So weather has played a role. Speaker 200:13:33It will impact Q3 as July was very wet and now we're experiencing a tropical storm on the East Coast. So kind of a tough start to the Q3, But as you said, the demand is still there. It's as we thought it was going to be. So these are temporary events and it doesn't go away. So as we get dry days, shipping just fine. Speaker 200:13:55Great. Thank you. Operator, is there another question? Speaker 700:14:32Yes, and apologize. We take our next question from Anthony Pettitari with Citi. Please go ahead. Your line is open. Speaker 600:14:41Good morning. Speaker 200:14:42Good morning. Speaker 600:14:43Hey, you raised the guide for cost inflation from mid single digit to high single digit. Should we think about that incremental cost inflation as just essentially all volume deleverage? And are there any other kind of puts or takes, either good or bad that we should think about for the second half on costs whether it's diesel or other items? Speaker 200:15:14Also tell I'd also tell you that it has been inflation was as we expected. Weather was a big difference in that and don't underestimate the efficiency impact of trying to run wet sticky material versus dry rock, which just flows a lot better. We think we can cost some of that cost back in the second half, so we can get back to the high single digit for the full year versus the 11 where we are. And I think all of that allows us to continue that double digit unit margin growth. Speaker 600:15:48Okay. That's helpful. I'll turn it over. Thank you. Speaker 700:15:53We'll take our next question from Jerry Revich with Goldman Sachs. Please go ahead. Your line is open. Speaker 400:15:59Hi, Jerry. Good morning. Hi, Tom, Mary, Andrew, Mark. Good morning. Pricing for aggregates was really strong in the quarter, up nicely sequentially. Speaker 400:16:10Can you just talk about the confidence around mid years that you folks have in place? Your guidance did not assume mid year pricing and it feels like you've got momentum just from contracts rolling. So I'm wondering if you could just give us an update on how you expect the tailwind just from natural contracts rolling to play out in the Q3 compared to last year and then the incremental opportunity from mid years? Speaker 200:16:35Yes, I'll give you some color on price and let Maryann just talk about sequential. The pricing momentum continues in all markets and all product lines. We had a successful mid year pricing campaign, I think both by customer and by market. I'd call it as we thought it was going to be as anticipated. But remember as we explained those midyear prices will have a small impact on 2024, but a much bigger impact on 2025. Speaker 200:17:02So we've already begun to set the solid foundation for pricing for 25. As always, we would ultimately guide you to your margin growth, which was 12% despite weather and volumes down 5%. So I'm proud of operators hard work. Look, that kind of margin growth is tough to begin with. It's particularly difficult to earn when it's raining, you got mud in the muck. Speaker 200:17:28So I'm really thanks to our team. Speaker 300:17:31And Jerry, in terms of sequential growth, candidly, I would have expected a bit less sequential improvement in Q2 than what we realized really due to mix and timing. We still expect some modest additional sequential improvement in the back half given the impact of the mid years that Tom just discussed paired with a higher jumping off point from a Q2 where we already captured some of the expected sequential improvement. I guess as Tom said to me, what's really important is the solid underlying price environment, our continued of course, the ultimately what you can take to the bottom line like Tom just highlighted. Speaker 600:18:23Thank you. Thank you. Speaker 700:18:28We'll take our next question from Kathryn Thompson with the Thompson Research Group. Speaker 400:18:32Please go ahead. Speaker 200:18:33Good morning, Kathryn. Speaker 800:18:36Good morning and thank you for taking my question today. Can you provide some good detail on project on your work. It's not necessarily lost, but it's delayed. And you've also given some good color just on pricing and continuing that double digit pace. Perhaps pulling the string a little bit more on the pricing question because it's a particular focus given lighter volumes even though those volumes are delayed. Speaker 800:19:08What type of impact are you seeing from product mix and geographic mix and really not as much looking backwards, but looking forward, in part because our channel checks are showing that you're starting to see a ramp up of some larger infrastructure projects that were taking a while to build up. So any color you can talk about in terms of product mix, geographic mix and how that may impact pricing on a go forward basis? Thank you. Speaker 200:19:40Yes. So I think you're correct. With the ramp up of infrastructure and public works, you'll see more base and fines, which is a little bit less lower prices. That being said, it's also lower cost, and you need that mix to balance your plants, otherwise you get out of whack. I think that being said, while it will have some impact on price, I don't expect it to have an impact on unit margins. Speaker 200:20:09So while it's maybe not base material may not be as high as price as say concrete or asphalt rock, it also comes with a cost benefit. So, I would expect us to continue our present pace of elevated unit margins regardless of mix. Speaker 800:20:29Okay, great. Thank you very much. Speaker 600:20:31Thank you. Speaker 800:20:39Okay. Speaker 700:20:42We'll take our next question from Angel Castillo with Morgan Stanley. Please go ahead. Your line is open. Speaker 900:20:48Good morning. Hi, thanks. Good morning. Thanks for taking my question. Just to be able to point, but just wanted to maybe touch base on the price discussion a little bit more. Speaker 900:20:58To the extent that these mid years that you've gotten give you any kind of insight into preliminary views on 2025. Could you just talk about what kind of the shape of that is in terms of of the magnitude? Are we still talking about price increases next year in the kind of high single digits, low double digits range? And kind of along with that, just any sense of kind of customer sensitivity and kind of competitive discipline around price increases would be helpful. Speaker 200:21:23I think we feel like the price momentum continues. We feel good about what we're bidding today. As I said those mid years while they have a little bit of impact on second half of this year, they're going to have a much bigger impact on the first half of next year. So that leads us to also helps you when you start having your price increase conversations in October for beginning year. I think it's too early to make a call on the level of pricing for 2025, but as I said think the conversations that happen for midyear price increases are encouraging for 2025. Speaker 900:22:01That's helpful. And if I may just kind of clarify on the pricing, just a quick one. The 10% to 12%, I thought that was kind of the guidance that you had laid out before mid years. So what kind of change so that it now includes mid years but it's still 10% to 12%. Can you just help us understand that? Speaker 200:22:16Well, I think as I said, the mid year help a little bit, but it doesn't get you out of that 10 to 12. What it does is it sets you up for 2025. Speaker 900:22:25Got it. Thank you. Speaker 200:22:26Thank you. Operator00:22:29Thank you. Our next question will come from Mike Dahl with RBC Capital Markets. Please go ahead. Speaker 600:22:34Hey, Mike. Hey, Tom. Aaron Andrews. Thanks for taking my question. Maybe just to help clarify the cadence because it sounds like even with July, understandably, some things are moved around with weather. Speaker 600:22:52It's not like August has probably been fantastic either. But when you're thinking about those puts and takes from the volume and also some of the price cost dynamics. Can you put a finer point on within your guide how you'd expect 3Q versus 4Q to play out? Speaker 200:23:12Yes, I think that first of all, the 3rd quarter has already been impacted. July was extremely wet in particular in our southeastern markets and now you've got a tropical storm blowing up the East Coast. So it's going to it's you're starting off to a little bit of a rough start in Q3. I think as we said, the fundamentals of the underlying demand are still there. You've got some pent up demand that all the sun comes out will ship well. Speaker 200:23:41You got asphalt producers that are telling us get ready because when it's dry out we got to go. And so we'll be ready for them. I would call it, and you know the 4th quarter is always tough to call just because it's also weather dependent and the season hopefully will stretch. I do think that when you have a year where you have so much moisture, it may push the season a little bit, so you may get a little extra bump out of Q4 that you wouldn't have in a normal weather year, which is because people want to get those projects done. And I think it comes down between the negative 4 to negative 7, how many shipping days do you have and when you have those shipping days. Speaker 200:24:23So a little bit of a rocky start with July and kind of this week with that tropical storm. But again, the demand is there and when sun comes out, we're shipping fine as I talked about with LA and Atlanta. Speaker 300:24:35Yes. And Mike, one other thing to keep in mind as you think about Q3 versus Q4 and the challenging start Tom just mentioned from a weather perspective is that strictly from a seasonal basis, we have easier relatively easier comps in the Q4 than we do in the Q3. So if we think about where those volumes fall that's something else to keep in mind as to how the back half might play Speaker 600:25:05Got it. Thank Speaker 200:25:06you. Thank you. Operator00:25:09Thank you. Our next question will come from Trey Grooms with Stephens. Please go ahead. Speaker 200:25:13Hey, Trey. Speaker 1000:25:15Hey, Tom. Good morning. So you Speaker 600:25:18guys have closed on a few bolt on acquisitions this year. But if you could maybe talk about the pipeline there, are you seeing any more or less opportunities out there and any potential for possible larger transactions out there? Speaker 200:25:36Yeah, as you said, you saw us close on 2 smaller, I call very strategic bolt on acquisitions, kind of 1 in North Alabama and 1 in Texas. I would tell you that we'll close on some more meaningful acquisitions in the near future and which we'll share with you when the time is right, but it's a busy season for acquisitions. Speaker 600:26:00Good to hear. Thank you. Thank you. Operator00:26:04Thank you. Our next question will come from David MacGregor with Longbow Research. Please go ahead. Speaker 100:26:10Hi, good morning. This is Joe Nolan on for David. I was just hoping you could provide some detail on what you're seeing for 2025 DOT budgets in key states for Vulcan And maybe just how that's playing into your pricing outlook for 2025 and the ability to sustain double digit pricing growth? Speaker 200:26:28Yes. So I think that as we look at public demand out there and just in general the highway market, we're seeing the IJA and state and local funds flow through to highway lettings right now. Overall, demand growth is similar to expectations, steady growth in public demand. We've got a lot more funding in critical states. You saw Tennessee, Georgia, Florida all raise funds. Speaker 200:27:01Georgia is up $1,500,000,000 Tennessee added $3,000,000 Florida added $4,000,000 All of which will see that fund flow into lettings in 2025, 2026 and 2027. So 6 of our largest states are at record level funding. Texas, California are also at record levels. And all of this supports, I'd say, growth and public demand for the next 3 or 4 years. So we should slow and steady wins the race here. Speaker 100:27:32Great. Thanks. Operator00:27:36Thank you. Our next question comes from Adam Thalhimer with Thompson Davis. Please go ahead. Speaker 600:27:41Hey, good morning, guys. Speaker 900:27:43Thought it was a nice quarter. Thank you. Operator00:27:46Are you like Trey, I was also curious on M and A and it feels like every international materials company is trying to grow U. S. Materials exposure. Are you seeing increased competition for deals? Speaker 200:28:01I don't think much changed. Same bidders are out there. There's a lot going on. You also got to remember, you got pent up demand from nothing going on last year, because everybody's worried about a recession. We'll get a look at all those opportunities we pass on a lot of them. Speaker 200:28:19I think it comes down to M and A, it's about discipline, what markets you want to be in, what synergies are unique to you, what are you willing to pay for it and make sure you get a return on what you're paying and then once you buy it integrated accurately and rapidly. Speaker 900:28:36Sounds good. Thanks, Tom. Speaker 200:28:37Thank you. Operator00:28:39Thank you. Our next question comes from Phil Ng with Jefferies. Please go ahead. Speaker 500:28:44Hey, guys. I guess, Tom, just a little more perspective on this midyear increase. How did it kind of shake out relative to perhaps last year, appreciating a lot of this is really 4.25. So help us kind of conceptualize perhaps how much of a carryover price lift you could see next year? Speaker 400:29:01I think so. Speaker 200:29:03Go ahead. From a macro perspective, I'd say similar. That's always going to be different. When I say different, you get different customers, different product lines, different geographies where you got it last year, maybe you didn't get it this year or vice versa. So I would call it out very similar. Speaker 900:29:20Okay. Any way to kind of Speaker 500:29:22help us think about what that could transpire to from a Caribou pricing next year? And then from a demand standpoint, heard you loud and clear, underlying demand is still quite good when you don't have weather. So some of this demand seems to be pushed out to 2025, right? So if that does kind of materialize in terms of how you're thinking about end markets, are you in a position to see volumes grow next year just because it's been pretty muted to the last few years? Speaker 200:29:46I think it's early to call. I think you continue to see growth in the public side. I think that we do know just because the funds are there and they start to flow into lettings. On the private side, I feel good that single family will continue to grow. It's a little slower than what we anticipated and it has some catch up to do with the indicators. Speaker 200:30:12And obviously interest rates will help that, but we just don't have the inventory of houses in these markets to keep up with population growth. So I would expect the res to kind of slow steady growth also. I think the big question will be non res. We've taken the hit on warehouses and distribution centers. Manufacturing is good, but interest rates will help that sector also. Speaker 200:30:36It's a matter of timing, I believe. Speaker 500:30:39Okay. Thank you. Appreciate the color. Speaker 200:30:41Sure. Operator00:30:43Thank you. Our next question will come from Michael Dudas with Vertical Research. Please go ahead. Speaker 600:30:50Good morning, gentlemen. Mary Andrews. Speaker 900:30:52Good morning. Good morning. Speaker 1100:30:53Tom, let me follow-up your final remark there to Phil. On the large private heavy non res opportunities, can you talk about what your backlog looks like, how it looks on bidding relative to what it's been the last 6 to 12 months? Are we seeing an acceleration in some of the larger type projects that are in your areas that you can certainly serve into over the next couple of years? Is that potentially a tailwind as Speaker 200:31:21we look through the second half Speaker 1100:31:22of this year, weather permitting in 2025? Speaker 200:31:25Yeah, it is definitely a tailwind. It is helping us with backlog a number of those big projects and big manufacturing projects. We're shipping on them now when the rain quits. And I think they'll help us in 2025 And I think there's more behind that. You've got the CHIPS Act with 12 projects in our footprint. Speaker 200:31:49You've got a number of data centers and then you continue to see growth in the reshoring of manufacturing facilities. So it is a tailwind for us. I don't think it's a big enough tailwind yet to take on what happened with warehouses and distribution centers, but definitely helpful. Speaker 600:32:10Thank you. Speaker 200:32:23Operator, do you have another question? Speaker 700:32:24We'll take our last question from Michael Feniger with Bank of America. Please go ahead. Your line is open. Speaker 1200:32:30Good morning. Good morning. Hey, guys. Thanks for taking my questions. Just Tom, on the manufacturing side, it's been a tail on the private non res. Speaker 1200:32:40Based on your backlog pipeline, is that is your feel that that means stable in 2025? Because is there a risk that some of these manufacturing projects have been a tailwind kind of roll off and there's not enough to be backfilled? Just curious if you could kind of address that how we can head into 'twenty five? And just secondly, I know there's talks on the public infrastructure side. You highlighted the record growth in highway contract awards has really helped infrastructure this year. Speaker 1200:33:08There's been some mixed data points the last few months around that. Just curious if you feel like that's just more of a pause and we see more of the funding sort of flow through to continue that trend into 2025, 2026? Speaker 200:33:20Yes, I'll take the highway one first. I think that's just a matter of timing. The fundings are too big there. You got a lot more coming as I talked about the additional state funding in 6 of our top 10 states plus IIJ. On the public side I think that I wouldn't get too worked up about a moment in time. Speaker 200:33:40As I said I think slow and steady wins the race there and I think it will be slow and steady for the next 3 or 4 years. So, I think that's solid. There'll be some hotter moments and cooler moments, but overall I think it will continue steady growth. On the manufacturing, we've got a healthy backlog I think and we're shipping on some of that backlog, but I don't see a big dip in the pipeline there. I think we continue to have other projects come up, and I think that's probably a strong point particularly for Vulcan with the footprint we have. Speaker 200:34:23In closing, I'd like to thank you for your time and your interest in Vulcan Materials Company. Our thoughts go out to our employees and our neighbors who have been or will be in the path of tropical storm. We hope they stay safe. We look forward to speaking with you through the quarter and thank you again for your time this morning. Speaker 700:34:46This does conclude today's program. Thank you for your participation and you may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallVulcan Materials Q2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Vulcan Materials Earnings HeadlinesVulcan Materials Executive Makes Major Stock SaleMay 6 at 10:13 PM | tipranks.comJPMorgan Chase & Co. Expands Stake in Vulcan Materials Co.May 6 at 12:03 PM | gurufocus.comWatch This Robotics Demo Before July 23rdJeff Brown, the tech legend who picked shares of Nvidia in 2016 before they jumped by more than 22,000%... Just did a demo of what Nvidia’s CEO said will be "the first multitrillion-dollar robotics industry."May 7, 2025 | Brownstone Research (Ad)Demystifying Vulcan Materials: Insights From 9 Analyst ReviewsMay 4 at 2:17 PM | benzinga.comVulcan Materials (NYSE:VMC) Given New $309.00 Price Target at Stifel NicolausMay 4 at 3:25 AM | americanbankingnews.comVMC: Stifel Raises Price Target on Vulcan Materials | VMC Stock NewsMay 2, 2025 | gurufocus.comSee More Vulcan Materials Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Vulcan Materials? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Vulcan Materials and other key companies, straight to your email. Email Address About Vulcan MaterialsVulcan Materials (NYSE:VMC) Company, together with its subsidiaries, produces and supplies construction aggregates primarily in the United States. It operates through four segments: Aggregates, Asphalt, Concrete, and Calcium. The company provides crushed stones, sand and gravel, sand, and other aggregates; and related products and services that are applied in construction and maintenance of highways, streets, and other public works, as well as in the construction of housing and commercial, industrial, and other nonresidential facilities. It also offers asphalt mix and asphalt construction paving services; ready-mixed concrete; and calcium products for the animal feed, plastics, and water treatment industries. The company was formerly known as Virginia Holdco, Inc. and changed its name to Vulcan Materials Company. Vulcan Materials Company was founded in 1909 and is headquartered in Birmingham, Alabama.View Vulcan Materials ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Disney Stock Jumps on Earnings—Is the Magic Sustainable?Archer Stock Eyes Q1 Earnings After UAE UpdatesFord Motor Stock Rises After Earnings, But Momentum May Not Last Broadcom Stock Gets a Lift on Hyperscaler Earnings & CapEx BoostPalantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release? 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There are 13 speakers on the call. Operator00:00:00Good morning. Welcome everyone to the Vulcan Materials Company Second Quarter 2024 Earnings Call. My name is Todd, and I will be your conference call coordinator today. Please be reminded that today's call is being recorded and will be available for replay later today at the company's website. All lines have been placed in a listen only mode. Operator00:00:22After the company's prepared remarks, there will be a question and answer Now I will turn the call over to your host, Mr. Mark Warren, Vice President of Investor Relations for Vulcan Materials. Mr. Warren, you may begin. Speaker 100:00:49Thank you, operator, and good morning, everyone. With me today are Tom Hill, Chairman and CEO and Mary Andrews Carlisle, Senior Vice President and Chief Financial Officer. Today's call is accompanied by a press release and a supplemental presentation posted to our website, vulcanmaterials.com. Please be reminded that today's discussion may include forward looking statements, which are subject to risks and uncertainties. These risks, along with other legal disclaimers, are described in detail in the company's earnings release and in other filings with the Securities and Exchange Commission. Speaker 100:01:26Reconciliations of non GAAP financial measures are defined and reconciled in our earnings release, our supplemental presentation and other SEC filings. During the Q and A, we ask that you limit your participation to one question. This will allow us to accommodate as many as possible during our time we have available. And with that, I'll turn the call over to Tom. Speaker 200:01:49Thank you, Mark, and thank all of you for your interest in Vulcan Materials. Our results demonstrate how our teams have successfully navigated a challenging first half of the year. Unfavorable weather conditions in many key markets impacted our shipments and operating efficiencies. Our 2nd quarter performance reinforces our consistent execution, the durable characteristics of our Aggregus led business and the benefits of our continued focus on both enhancing our core and expanding our reach. Even in the face of lower aggregate shipments and weather driven inefficiencies, our teams delivered a 7th consecutive quarter of double digit year over year improvement in aggregates unit profitability. Speaker 200:02:36In our trailing 12 months, aggregates cash gross profit per ton has reached $9.96 per ton, marking consistent progress towards our $11 to $12 target. These achievements exhibit the benefits of our commitment to enhancing our core through our Vulcan Wave selling and Vulcan Wave operating disciplines. But our strategy is 2 pronged and we are also focused on expanding our reach. During the Q2, we closed 2 strategic bolt on acquisitions. These acquisitions enhance both our aggregates production and distribution capabilities and our downstream asphalt business in Alabama and Texas, 2 of our top 10 states. Speaker 200:03:24In the quarter, we generated $603,000,000 of adjusted EBITDA and expanded our adjusted EBITDA margin by 170 basis points despite 5% lower area shipments. Shipments in the quarter were negatively impacted by a significant number of rain days in many markets, particularly in May across nearly 70% of our geographies and in select key markets in April June. The pricing environment remained positive and freight adjusted average selling prices improved 12% or $2.29 per ton versus the prior year. Freight adjusted unit cash cost of sales increased 13% or $1.13 per ton. Most importantly, cash gross profit per ton improved over $1 per ton or 12%. Speaker 200:04:18We remain consistently focused on improving unit profitability on every ton we sell to maximize earnings and cash generation in any demand environment. Let me share with you my thoughts on the current demand backdrop by discussing each end use. Single family starts began recovering in the second half of last year and continue to point to growth in 2024, albeit at slightly lower level than we had initially anticipated. The timing of starts converting to shipments, continued affordability issues and persistent elevated interest rates are impacting both the pace of recovery and the likelihood of single family growth fully offsetting weaker multifamily activity. Looking ahead, the underlying fundamentals of population growth and low inventories in Vulcan markets continue to support long term growth in residential construction. Speaker 200:05:18In private non residential construction, the landscape continues to vary across categories, but is unfolding largely as we anticipated for 2024. Warehouse activity is the biggest headwind with some positive momentum in manufacturing activity in data centers. Light commercial activity is still relatively weak, but over time we expect it to follow the positive trends in single family housing and benefit from lower interest rates. On the public side, we continue to expect growth in 2024 as 2 consecutive years of record growth in contract awards flow into projects and aggregate shipments. The IIJ funding is benefiting both highways and other public infrastructure activity. Speaker 200:06:06Given the demand backdrop just discussed and the weather impacted first half shipments being down 6 percent. We now expect aggregate shipments to decline between 4% 7% for the full year. Combined with solid pricing environment and double digit profitability improvement, we still anticipate same store adjusted EBITDA growth, margin expansion and attractive free cash flow generation in 2024. Now I'll turn the call over to Mary Andrews for additional commentary on our results and revised outlook. Mary Andrews? Speaker 300:06:43Thanks, Tom, and good morning. The strong fundamentals of our aggregate led business and our consistent execution continue to deliver attractive cash generation, which coupled with disciplined capital allocation is driving our returns on invested capital higher over time. During the Q2, we deployed capital to reinvest in and expand our existing franchise to grow our business through acquisition and and $298,000,000 on a year to date basis. And $298,000,000 on a year to date basis. We continue to expect to spend between $625,000,000 $675,000,000 for the full year. Speaker 300:07:32During the quarter, we also allocated 181,000,000 dollars to the strategic bolt on acquisitions Tom mentioned earlier and returned $111,000,000 to shareholders through our quarterly dividend and common stock repurchases. At June 30, our return on invested capital had improved 100 and 60 basis points over the last 12 months with a 10% improvement in adjusted EBITDA generated on flat average invested capital. And with net debt to adjusted EBITDA leverage of 1.7 times at quarter end, we have considerable investment capacity within our target leverage range of 2 to 2.5 times to capitalize on attractive acquisition opportunities that will drive long term value creation for shareholders. SAG expenses in the quarter were 6.7% of revenue and year to date have increased less than 3% over the prior year. We are focused on both disciplined cost control and Speaker 400:08:56in the first 6 Speaker 300:08:56months and lower shipments, we now expect unit freight adjusted cash cost of sales to increase high single digits compared to the prior year. We continue to expect aggregates prices to increase 10% to 12% for the year, driving another year of double digit improvement in cash gross profit per ton. We anticipate that the strong unit profitability improvement coupled with the lower volume expectations will generate adjusted EBITDA between $2,000,000,000 $2,150,000,000 for the full year. I'll now turn the call back over to Tom to provide a few closing remarks. Speaker 200:09:35Thank you, Mary Andrews. I want to conclude by thanking our talented Vulcan team for their commitments to each other and to excellence as they work each day, rain or shine, to operate safely and deliver value for our customers and our shareholders. I am confident that we have the right 2 pronged strategy of enhancing our core and expanding our reach. And I'm excited about the runway ahead of us on both fronts to drive attractive growth for Vulcan Materials. And now, Mary Andrews and I will be happy to take your questions. Operator00:10:24Our first question comes from Stanley Elliott with Stifel. Please go ahead. Speaker 500:10:30Hey, good morning, everyone. Thank you all for taking the question. Tom, could you talk a little bit more about the overall demand environment? I understand it's been pretty tough operating conditions on a year to date basis and probably even into July a little bit. Any sort of help in how we should think about the balance of the year, kind of where you see momentum and things like that? Speaker 200:10:54Yes. Good morning, Stanley. I think, Stanley, all of the data and the leading indicators would support demand as we originally expected back in February with the exception of single family demand growth. The growth in single family is a little slower than we would have expected, maybe 4 or 5 months ago and we'll talk about that a little bit later. But as we look at the current volume guidance, as you said, we had a very wet July that influenced those numbers and will definitely have a negative impact on Q3. Speaker 200:11:25Where we ultimately fall in that volume range of the negative 4 to negative 7 will really come down to the number of dry shipping days we have left in the last 5 months of the year. So I'd frame it underlying demand as expected, except a little bit slower growth in single family. Weather has not been our friend. We'll see how the second half goes. I think the good news is we continue to expand your margins by double digit and I think our folks have taken a difficult hand in the first half and turned it to a winner and I'm proud of their performance. Speaker 500:11:57Great, guys. Thanks so much. Best of luck in the back half. Thank you. Operator00:12:02Thank you. Our next question will come from Garik Shmois with Loop Capital. Please go ahead. Speaker 600:12:08Hi, thanks. Just wanted to follow-up on that point with respect to the second half volume outlook. I was wondering if you could go into maybe a little bit more detail on how to think about the pent up demand opportunity. I think you did speak to weather influencing if you can get all the projects done. But is this a case of projects being delayed and not canceled? Speaker 600:12:31And just maybe a little bit more color on how you expect the second half of the year to play out from the new standpoint? Speaker 200:12:38Sure. I think that if you kind of look at what's happened and take that into the second half, your point of demand doesn't go away is absolutely spot on. And you probably got some pent up there and it comes down to what the weather does to us. I think it's looking back to explain the future that we were really impacted by rain in the first half and I'll give you a couple of examples. In Q2 Nashville had 30 rain days, and it dramatically impacted shipments. Speaker 200:13:12Look, we lost half of our shipping days in that Middle Tennessee market. DFW had double the amount of rainfall, so we just never dried out and couldn't ship. The flip side of that is you saw Atlanta weather pretty much normal and shipments were as expected. LA had weather normal and shipments were right on where we had planned. So weather has played a role. Speaker 200:13:33It will impact Q3 as July was very wet and now we're experiencing a tropical storm on the East Coast. So kind of a tough start to the Q3, But as you said, the demand is still there. It's as we thought it was going to be. So these are temporary events and it doesn't go away. So as we get dry days, shipping just fine. Speaker 200:13:55Great. Thank you. Operator, is there another question? Speaker 700:14:32Yes, and apologize. We take our next question from Anthony Pettitari with Citi. Please go ahead. Your line is open. Speaker 600:14:41Good morning. Speaker 200:14:42Good morning. Speaker 600:14:43Hey, you raised the guide for cost inflation from mid single digit to high single digit. Should we think about that incremental cost inflation as just essentially all volume deleverage? And are there any other kind of puts or takes, either good or bad that we should think about for the second half on costs whether it's diesel or other items? Speaker 200:15:14Also tell I'd also tell you that it has been inflation was as we expected. Weather was a big difference in that and don't underestimate the efficiency impact of trying to run wet sticky material versus dry rock, which just flows a lot better. We think we can cost some of that cost back in the second half, so we can get back to the high single digit for the full year versus the 11 where we are. And I think all of that allows us to continue that double digit unit margin growth. Speaker 600:15:48Okay. That's helpful. I'll turn it over. Thank you. Speaker 700:15:53We'll take our next question from Jerry Revich with Goldman Sachs. Please go ahead. Your line is open. Speaker 400:15:59Hi, Jerry. Good morning. Hi, Tom, Mary, Andrew, Mark. Good morning. Pricing for aggregates was really strong in the quarter, up nicely sequentially. Speaker 400:16:10Can you just talk about the confidence around mid years that you folks have in place? Your guidance did not assume mid year pricing and it feels like you've got momentum just from contracts rolling. So I'm wondering if you could just give us an update on how you expect the tailwind just from natural contracts rolling to play out in the Q3 compared to last year and then the incremental opportunity from mid years? Speaker 200:16:35Yes, I'll give you some color on price and let Maryann just talk about sequential. The pricing momentum continues in all markets and all product lines. We had a successful mid year pricing campaign, I think both by customer and by market. I'd call it as we thought it was going to be as anticipated. But remember as we explained those midyear prices will have a small impact on 2024, but a much bigger impact on 2025. Speaker 200:17:02So we've already begun to set the solid foundation for pricing for 25. As always, we would ultimately guide you to your margin growth, which was 12% despite weather and volumes down 5%. So I'm proud of operators hard work. Look, that kind of margin growth is tough to begin with. It's particularly difficult to earn when it's raining, you got mud in the muck. Speaker 200:17:28So I'm really thanks to our team. Speaker 300:17:31And Jerry, in terms of sequential growth, candidly, I would have expected a bit less sequential improvement in Q2 than what we realized really due to mix and timing. We still expect some modest additional sequential improvement in the back half given the impact of the mid years that Tom just discussed paired with a higher jumping off point from a Q2 where we already captured some of the expected sequential improvement. I guess as Tom said to me, what's really important is the solid underlying price environment, our continued of course, the ultimately what you can take to the bottom line like Tom just highlighted. Speaker 600:18:23Thank you. Thank you. Speaker 700:18:28We'll take our next question from Kathryn Thompson with the Thompson Research Group. Speaker 400:18:32Please go ahead. Speaker 200:18:33Good morning, Kathryn. Speaker 800:18:36Good morning and thank you for taking my question today. Can you provide some good detail on project on your work. It's not necessarily lost, but it's delayed. And you've also given some good color just on pricing and continuing that double digit pace. Perhaps pulling the string a little bit more on the pricing question because it's a particular focus given lighter volumes even though those volumes are delayed. Speaker 800:19:08What type of impact are you seeing from product mix and geographic mix and really not as much looking backwards, but looking forward, in part because our channel checks are showing that you're starting to see a ramp up of some larger infrastructure projects that were taking a while to build up. So any color you can talk about in terms of product mix, geographic mix and how that may impact pricing on a go forward basis? Thank you. Speaker 200:19:40Yes. So I think you're correct. With the ramp up of infrastructure and public works, you'll see more base and fines, which is a little bit less lower prices. That being said, it's also lower cost, and you need that mix to balance your plants, otherwise you get out of whack. I think that being said, while it will have some impact on price, I don't expect it to have an impact on unit margins. Speaker 200:20:09So while it's maybe not base material may not be as high as price as say concrete or asphalt rock, it also comes with a cost benefit. So, I would expect us to continue our present pace of elevated unit margins regardless of mix. Speaker 800:20:29Okay, great. Thank you very much. Speaker 600:20:31Thank you. Speaker 800:20:39Okay. Speaker 700:20:42We'll take our next question from Angel Castillo with Morgan Stanley. Please go ahead. Your line is open. Speaker 900:20:48Good morning. Hi, thanks. Good morning. Thanks for taking my question. Just to be able to point, but just wanted to maybe touch base on the price discussion a little bit more. Speaker 900:20:58To the extent that these mid years that you've gotten give you any kind of insight into preliminary views on 2025. Could you just talk about what kind of the shape of that is in terms of of the magnitude? Are we still talking about price increases next year in the kind of high single digits, low double digits range? And kind of along with that, just any sense of kind of customer sensitivity and kind of competitive discipline around price increases would be helpful. Speaker 200:21:23I think we feel like the price momentum continues. We feel good about what we're bidding today. As I said those mid years while they have a little bit of impact on second half of this year, they're going to have a much bigger impact on the first half of next year. So that leads us to also helps you when you start having your price increase conversations in October for beginning year. I think it's too early to make a call on the level of pricing for 2025, but as I said think the conversations that happen for midyear price increases are encouraging for 2025. Speaker 900:22:01That's helpful. And if I may just kind of clarify on the pricing, just a quick one. The 10% to 12%, I thought that was kind of the guidance that you had laid out before mid years. So what kind of change so that it now includes mid years but it's still 10% to 12%. Can you just help us understand that? Speaker 200:22:16Well, I think as I said, the mid year help a little bit, but it doesn't get you out of that 10 to 12. What it does is it sets you up for 2025. Speaker 900:22:25Got it. Thank you. Speaker 200:22:26Thank you. Operator00:22:29Thank you. Our next question will come from Mike Dahl with RBC Capital Markets. Please go ahead. Speaker 600:22:34Hey, Mike. Hey, Tom. Aaron Andrews. Thanks for taking my question. Maybe just to help clarify the cadence because it sounds like even with July, understandably, some things are moved around with weather. Speaker 600:22:52It's not like August has probably been fantastic either. But when you're thinking about those puts and takes from the volume and also some of the price cost dynamics. Can you put a finer point on within your guide how you'd expect 3Q versus 4Q to play out? Speaker 200:23:12Yes, I think that first of all, the 3rd quarter has already been impacted. July was extremely wet in particular in our southeastern markets and now you've got a tropical storm blowing up the East Coast. So it's going to it's you're starting off to a little bit of a rough start in Q3. I think as we said, the fundamentals of the underlying demand are still there. You've got some pent up demand that all the sun comes out will ship well. Speaker 200:23:41You got asphalt producers that are telling us get ready because when it's dry out we got to go. And so we'll be ready for them. I would call it, and you know the 4th quarter is always tough to call just because it's also weather dependent and the season hopefully will stretch. I do think that when you have a year where you have so much moisture, it may push the season a little bit, so you may get a little extra bump out of Q4 that you wouldn't have in a normal weather year, which is because people want to get those projects done. And I think it comes down between the negative 4 to negative 7, how many shipping days do you have and when you have those shipping days. Speaker 200:24:23So a little bit of a rocky start with July and kind of this week with that tropical storm. But again, the demand is there and when sun comes out, we're shipping fine as I talked about with LA and Atlanta. Speaker 300:24:35Yes. And Mike, one other thing to keep in mind as you think about Q3 versus Q4 and the challenging start Tom just mentioned from a weather perspective is that strictly from a seasonal basis, we have easier relatively easier comps in the Q4 than we do in the Q3. So if we think about where those volumes fall that's something else to keep in mind as to how the back half might play Speaker 600:25:05Got it. Thank Speaker 200:25:06you. Thank you. Operator00:25:09Thank you. Our next question will come from Trey Grooms with Stephens. Please go ahead. Speaker 200:25:13Hey, Trey. Speaker 1000:25:15Hey, Tom. Good morning. So you Speaker 600:25:18guys have closed on a few bolt on acquisitions this year. But if you could maybe talk about the pipeline there, are you seeing any more or less opportunities out there and any potential for possible larger transactions out there? Speaker 200:25:36Yeah, as you said, you saw us close on 2 smaller, I call very strategic bolt on acquisitions, kind of 1 in North Alabama and 1 in Texas. I would tell you that we'll close on some more meaningful acquisitions in the near future and which we'll share with you when the time is right, but it's a busy season for acquisitions. Speaker 600:26:00Good to hear. Thank you. Thank you. Operator00:26:04Thank you. Our next question will come from David MacGregor with Longbow Research. Please go ahead. Speaker 100:26:10Hi, good morning. This is Joe Nolan on for David. I was just hoping you could provide some detail on what you're seeing for 2025 DOT budgets in key states for Vulcan And maybe just how that's playing into your pricing outlook for 2025 and the ability to sustain double digit pricing growth? Speaker 200:26:28Yes. So I think that as we look at public demand out there and just in general the highway market, we're seeing the IJA and state and local funds flow through to highway lettings right now. Overall, demand growth is similar to expectations, steady growth in public demand. We've got a lot more funding in critical states. You saw Tennessee, Georgia, Florida all raise funds. Speaker 200:27:01Georgia is up $1,500,000,000 Tennessee added $3,000,000 Florida added $4,000,000 All of which will see that fund flow into lettings in 2025, 2026 and 2027. So 6 of our largest states are at record level funding. Texas, California are also at record levels. And all of this supports, I'd say, growth and public demand for the next 3 or 4 years. So we should slow and steady wins the race here. Speaker 100:27:32Great. Thanks. Operator00:27:36Thank you. Our next question comes from Adam Thalhimer with Thompson Davis. Please go ahead. Speaker 600:27:41Hey, good morning, guys. Speaker 900:27:43Thought it was a nice quarter. Thank you. Operator00:27:46Are you like Trey, I was also curious on M and A and it feels like every international materials company is trying to grow U. S. Materials exposure. Are you seeing increased competition for deals? Speaker 200:28:01I don't think much changed. Same bidders are out there. There's a lot going on. You also got to remember, you got pent up demand from nothing going on last year, because everybody's worried about a recession. We'll get a look at all those opportunities we pass on a lot of them. Speaker 200:28:19I think it comes down to M and A, it's about discipline, what markets you want to be in, what synergies are unique to you, what are you willing to pay for it and make sure you get a return on what you're paying and then once you buy it integrated accurately and rapidly. Speaker 900:28:36Sounds good. Thanks, Tom. Speaker 200:28:37Thank you. Operator00:28:39Thank you. Our next question comes from Phil Ng with Jefferies. Please go ahead. Speaker 500:28:44Hey, guys. I guess, Tom, just a little more perspective on this midyear increase. How did it kind of shake out relative to perhaps last year, appreciating a lot of this is really 4.25. So help us kind of conceptualize perhaps how much of a carryover price lift you could see next year? Speaker 400:29:01I think so. Speaker 200:29:03Go ahead. From a macro perspective, I'd say similar. That's always going to be different. When I say different, you get different customers, different product lines, different geographies where you got it last year, maybe you didn't get it this year or vice versa. So I would call it out very similar. Speaker 900:29:20Okay. Any way to kind of Speaker 500:29:22help us think about what that could transpire to from a Caribou pricing next year? And then from a demand standpoint, heard you loud and clear, underlying demand is still quite good when you don't have weather. So some of this demand seems to be pushed out to 2025, right? So if that does kind of materialize in terms of how you're thinking about end markets, are you in a position to see volumes grow next year just because it's been pretty muted to the last few years? Speaker 200:29:46I think it's early to call. I think you continue to see growth in the public side. I think that we do know just because the funds are there and they start to flow into lettings. On the private side, I feel good that single family will continue to grow. It's a little slower than what we anticipated and it has some catch up to do with the indicators. Speaker 200:30:12And obviously interest rates will help that, but we just don't have the inventory of houses in these markets to keep up with population growth. So I would expect the res to kind of slow steady growth also. I think the big question will be non res. We've taken the hit on warehouses and distribution centers. Manufacturing is good, but interest rates will help that sector also. Speaker 200:30:36It's a matter of timing, I believe. Speaker 500:30:39Okay. Thank you. Appreciate the color. Speaker 200:30:41Sure. Operator00:30:43Thank you. Our next question will come from Michael Dudas with Vertical Research. Please go ahead. Speaker 600:30:50Good morning, gentlemen. Mary Andrews. Speaker 900:30:52Good morning. Good morning. Speaker 1100:30:53Tom, let me follow-up your final remark there to Phil. On the large private heavy non res opportunities, can you talk about what your backlog looks like, how it looks on bidding relative to what it's been the last 6 to 12 months? Are we seeing an acceleration in some of the larger type projects that are in your areas that you can certainly serve into over the next couple of years? Is that potentially a tailwind as Speaker 200:31:21we look through the second half Speaker 1100:31:22of this year, weather permitting in 2025? Speaker 200:31:25Yeah, it is definitely a tailwind. It is helping us with backlog a number of those big projects and big manufacturing projects. We're shipping on them now when the rain quits. And I think they'll help us in 2025 And I think there's more behind that. You've got the CHIPS Act with 12 projects in our footprint. Speaker 200:31:49You've got a number of data centers and then you continue to see growth in the reshoring of manufacturing facilities. So it is a tailwind for us. I don't think it's a big enough tailwind yet to take on what happened with warehouses and distribution centers, but definitely helpful. Speaker 600:32:10Thank you. Speaker 200:32:23Operator, do you have another question? Speaker 700:32:24We'll take our last question from Michael Feniger with Bank of America. Please go ahead. Your line is open. Speaker 1200:32:30Good morning. Good morning. Hey, guys. Thanks for taking my questions. Just Tom, on the manufacturing side, it's been a tail on the private non res. Speaker 1200:32:40Based on your backlog pipeline, is that is your feel that that means stable in 2025? Because is there a risk that some of these manufacturing projects have been a tailwind kind of roll off and there's not enough to be backfilled? Just curious if you could kind of address that how we can head into 'twenty five? And just secondly, I know there's talks on the public infrastructure side. You highlighted the record growth in highway contract awards has really helped infrastructure this year. Speaker 1200:33:08There's been some mixed data points the last few months around that. Just curious if you feel like that's just more of a pause and we see more of the funding sort of flow through to continue that trend into 2025, 2026? Speaker 200:33:20Yes, I'll take the highway one first. I think that's just a matter of timing. The fundings are too big there. You got a lot more coming as I talked about the additional state funding in 6 of our top 10 states plus IIJ. On the public side I think that I wouldn't get too worked up about a moment in time. Speaker 200:33:40As I said I think slow and steady wins the race there and I think it will be slow and steady for the next 3 or 4 years. So, I think that's solid. There'll be some hotter moments and cooler moments, but overall I think it will continue steady growth. On the manufacturing, we've got a healthy backlog I think and we're shipping on some of that backlog, but I don't see a big dip in the pipeline there. I think we continue to have other projects come up, and I think that's probably a strong point particularly for Vulcan with the footprint we have. Speaker 200:34:23In closing, I'd like to thank you for your time and your interest in Vulcan Materials Company. Our thoughts go out to our employees and our neighbors who have been or will be in the path of tropical storm. We hope they stay safe. We look forward to speaking with you through the quarter and thank you again for your time this morning. Speaker 700:34:46This does conclude today's program. Thank you for your participation and you may now disconnect.Read morePowered by