Titan America Q4 2024 Earnings Report

Titan America EPS Results

• Actual EPS: $0.21
• Consensus EPS: $0.22
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: N/A

Titan America Revenue Results

• Actual Revenue: $389.82 million
• Expected Revenue: $393.17 million
• Beat/Miss: Missed by -$3.35 million
• YoY Revenue Growth: N/A

Titan America Announcement Details

• Quarter: Q4 2024
• Date: 3/26/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, March 26, 2025
• Conference Call Time: 8:00AM ET

Titan America (NYSE:TTAM) is a building materials company that produces and supplies cement, ready-mix concrete, aggregates and other products used in residential, commercial and infrastructure construction. Its portfolio also includes concrete blocks and related construction materials, as well as supplementary cementitious materials that can be used in concrete production.

The company serves customers across the eastern United States through a network of cement plants, terminals, quarries, ready-mix concrete facilities and other distribution assets. Its operations support construction markets in states including Florida, Virginia, North Carolina, South Carolina and New Jersey, among other locations.

Titan America is associated with Titan Cement International, a global building materials group with a history dating to the early 20th century. The business focuses on supplying essential materials to contractors, ready-mix producers, builders and infrastructure projects. Its products are used in roads, bridges, buildings and other construction applications.

Titan America Q4 2024 Earnings Call Transcript

Key Takeaways

• Titan America’s successful initial public offering in February 2024 marked a transformative milestone, providing additional resources to accelerate strategic growth initiatives.
• Full-year 2024 revenue reached $1.63 billion, up 2.7% year-over-year, while adjusted EBITDA rose 12.8% to $370 million and margins expanded 210 basis points to 22.7%.
• Severe weather in Q4 and Q1 temporarily suppressed volumes, with cement sales down 7.4% in Q4 and Y/Y cement volumes falling 3.3%, highlighting weather-related risks to near-term production.
• 2025 guidance projects mid-single-digit revenue growth and modest margin improvement, driven by sustained pricing momentum and increased demand from U.S. infrastructure projects.
• Strong balance sheet with net debt/EBITDA at 1.2x, return of $137 million to shareholders through dividends and capital, and disciplined capital allocation for continued expansion.

Presentation

[Operator]

Greetings and welcome to the Titan America Fourth Quarter and Full Year Earnings Call. At this time, all participants are in a listen-only mode. A Q&A session will follow the formal presentation. If anyone should require operator assistance during the conference, please press *0 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Daniel Scott, Investor Relations. Thank you. You may begin.

Thank you, Operator. Good morning to everyone on the line. Thank you for joining us for Titan America's Fourth Quarter and Full Year 2024 Conference Call. I am joined by Bill Zarkalis, Chief Executive Officer of Titan America, and Larry Wilt, Chief Financial Officer. Before we begin, I would like to remind you that we release Titan America's Fourth Quarter and Full Year results, which are available on our website at ir.titanamerica.com, along with today's accompanying slide presentation.

This call is being recorded, and a replay will be made available on our Investor Relations website. During the call, we will present both IFRS and non-IFRS financial measures. The most directly comparable IFRS measures and reconciliations for non-IFRS measures are available in today's press release and accompanying slides. Certain statements on today's call may be deemed to be forward-looking statements. Such statements can be identified by terms such as expect, believe, intend, anticipate, and may, or by the use of the future tense. You should not place undue reliance on forward-looking statements.

Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issue today, as well as the risks and uncertainties described in our SEC filings. I would now like to turn the call over to Bill. Please go ahead.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Thank you, Dan. Good morning, and thank you all for joining us today for Titan America's first earnings call as a public company. I'm particularly excited to be speaking with you following the successful completion of our initial public offering in February. This milestone represents a transformative moment in our company's journey, providing us with additional resources to pursue our strategic growth initiatives while continuing to create value for all our stakeholders. We are grateful for the confidence investors have shown in our business model and growth strategy, and we look forward to delivering on our commitments as we embark on this new chapter as a public company.

[Bill Zarkalis, President, Director, and CEO at Titan America]

For those who may be newer to our story, I'd like to highlight what makes Titan America a compelling investment opportunity. As shown on slide four, we have nine key investment highlights that differentiate us in the marketplace, but I would focus on four main takeaways. First, we have a uniquely vertically integrated business model that provides us with strategic flexibility and multiple channels to reach end users. Second, we have built a hard-to-replicate comprehensive logistics network with strategically placed facilities and terminals that provide us with significant competitive advantages in terms of reliability of supply and cost efficiency. Third, we have already installed or are investing in capacity to meet the high demand in the years ahead and capture market growth.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Finally, we are led by an experienced management team with a proven track record of outperforming the market. Looking at slide five, you can see our geographic footprint along the East Coast of our country. The areas we serve include three out of the 11 U.S. economic mega regions, which are powerhouses of growth, productivity, and innovation. The three mega regions in our served markets represent between 20% and 25% of the population, the GDP, and the consumption of construction materials in our country. We operate in two business segments, Florida and Mid-Atlantic.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Turning to slide six, we have demonstrated a consistent track record of outperforming the broader market. From 2013 to 2024, our cement sales volumes grew at a compounded average annual growth rate of 7%, significantly outpacing the U.S. market growth rate of approximately 2%. This outperformance reflects the effectiveness of our business model, our strategic positioning, and our ability to capture growing demand across our regions. Slide seven illustrates why we are bullish on the trends driving a powerful multi-year growth phase in our country.

[Bill Zarkalis, President, Director, and CEO at Titan America]

We see four key drivers. First, the IIJA Infrastructure Investment Program, which is expected to generate demand of approximately 50 million short tons of cement over the next five years. Second, the Manufacturing Reshoring Initiatives bringing significant investment to our regions. Third, the housing deficit, estimated at 3.4 million homes nationally, with nearly 900,000 units in our regions. Fourth, emerging themes such as resilient urbanization, new construction technologies, and digital transformation that are creating new opportunities in the construction materials sector.

[Bill Zarkalis, President, Director, and CEO at Titan America]

On slide eight, you can see how our vertically integrated business model provides strategic flexibility. Our upstream products like cement, cementitious materials, and aggregates feed into our downstream product lines like ready-mix concrete and concrete block, while we also place all our products directly to end markets. This integration allows us to optimize our product mix and channels to market based on local market conditions, maximizing both top-line growth and profitability.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Slide nine highlights our hard-to-replicate comprehensive logistics network. We have bookended each of our business units on one side with a mega production hub for our upstream products, and on the other side, with a mega sea terminal that can import all our upstream products. Those hubs are strategically placed on railway lines, which is the fastest and lowest-cost way to move our products. Over the years, we have invested in this network that connects our mega hubs, our product terminals, and warehouses, and our downstream production units, and reaches all the way down to our customers.

[Bill Zarkalis, President, Director, and CEO at Titan America]

As a result, we have the unique capability to offer our customers reliability of supply from multiple channels and sourcing options. This network also gives us the built-in optionality and strategic flexibility to choose to serve our customers from the sourcing point and the channel with the lowest total cost after considering both product and logistics. With that overview, I'll now turn the call over to Larry to provide more detail on our financial results and segment performance. Larry.

[Larry Wilt, CFO at Titan America]

Thank you, Bill, and good morning, everyone. I'm pleased to report that 2024 was a record year for Titan America. As shown on slide 11, we achieved full year revenue of $1.63 billion, representing growth of 2.7% compared to 2023. At the same time, our adjusted EBITDA grew by 12.8% to $370.4 million, significantly outpacing our revenue growth. This translated into net income of $166.1 million, up 7% year-over-year, and earnings per share of $0.95 per share compared to $0.89 in 2023. Our adjusted EBITDA margin expanded to 22.7%, an improvement of 210 basis points compared to 20.6% in 2023.

[Larry Wilt, CFO at Titan America]

This margin expansion is a result of the positive price momentum in our markets, combined with the effectiveness of our operational excellence and cost management initiatives. Our fourth quarter was more challenging, primarily due to adverse weather conditions across our regions. Revenue for the quarter was $389.8 million compared to $399.1 million in Q4 2023, and adjusted EBITDA was $83.5 million compared to $87.2 million in the prior year quarter. Despite these challenges, we maintained strong profitability with an adjusted EBITDA margin of 21.4% for the quarter.

[Larry Wilt, CFO at Titan America]

Moving to slide 12, let me dive into our volume performance across product lines. For the full year 2024, despite operating in a U.S. market where consumption of cement declined by nearly 6%, our cement volumes decreased by 3.3%. Our performance was primarily affected by inclement weather in our markets and continued softness in the residential sector, which was partially mitigated by stronger demand from infrastructure and commercial construction. We saw stronger performance in our other product lines, with aggregate volumes increasing by 7.4% and fly ash volumes growing by 4.9%.

[Larry Wilt, CFO at Titan America]

Ready-mix concrete volumes grew by 1.7%, and block volumes showed growth of 7.3%, supported by contractor remodeling activity and increased volume through the retail channels. The fourth quarter saw more pronounced volume challenges in some areas, with cement volumes down 7.4% compared to Q4 2023, reflecting the impact of hurricane activity and significant rainfall in our markets. Aggregate volumes, however, showed strong growth of 28.6% in the quarter, while ready-mix volumes remained relatively stable with 0.8% growth. Concrete block volumes decreased 6.6% in the quarter.

[Larry Wilt, CFO at Titan America]

As shown on slide 13, we maintained pricing momentum across all product lines for the full year 2024. Cement pricing increased by 2.2% for the full year despite volume challenges. Aggregates and fly ash pricing showed the strongest growth at 8.5% and 10.5%, respectively, while ready-mix concrete pricing improved by 5.1% and concrete block pricing increased by 1.7%. This pricing strength reflects our market positions and focus on value-added products, services, and solutions. Turning to our segment performance on slide 14 and 15, our Florida segment generated $997.6 million in revenue for the full year, an increase of 2.8% compared to 2023. More importantly, segment adjusted EBITDA in Florida grew by 12.9% to $249.7 million.

[Larry Wilt, CFO at Titan America]

For the fourth quarter, we saw a 2.3% revenue decline compared to Q4 2023 and segment adjusted EBITDA of $52.7 million as compared to $61.5 million in the prior year quarter. Our Florida segment continues to benefit from attractive market fundamentals, including ongoing population growth, business migration, and infrastructure investment, all of which continue to drive construction demand. These factors have enabled us to maintain pricing momentum while capturing select volume growth opportunities, including, for example, participation in Moving Florida Forward infrastructure projects scheduled for 2025, such as the Golden Glades Interchange in Miami, the Southwest 10th Street Connector in Broward County, the Orlando and Jacksonville Airport expansions, and the A-2 Reservoir project in Palm Beach County.

[Larry Wilt, CFO at Titan America]

Our Mid-Atlantic segment, as shown on slide 15, delivered $634.9 million in revenue for the full year, up 2.5% from 2023, with segment adjusted EBITDA growth of 14% to $134.8 million. For the fourth quarter, while revenue declined by 2.6%, segment adjusted EBITDA increased 17.2% compared to Q4 2023, reflecting our operational efficiencies and adjustments related to restoration liabilities. Our Mid-Atlantic segment, primarily serving Virginia, the Carolinas, and the Metro New York market, continues to benefit from above-average population growth and a resilient construction market.

[Larry Wilt, CFO at Titan America]

This includes infrastructure development, coastal resiliency projects, the Virginia Data Center Alley, the largest data center market in the world, as well as investments across North Carolina from the Charlotte Metro area to the Research Triangle. We're participating in major projects, including the Winston-Salem I-74 Beltway, Raleigh I-40 expansion, the Newark International Airport expansion, and an offshore wind farm project in Virginia Beach. Moving to slide 16, we continue to execute our capital expenditure program in 2024, investing approximately $137.3 million across our business. Key initiatives included the execution of a D.M. Conner aggregate acquisition, securing critical mineral reserves for kiln feed and novel cementitious materials.

[Larry Wilt, CFO at Titan America]

We also increased our mining capacity with the commissioning of a third dragline at Pennsuco near Miami and commenced the strategic expansion of the Roanoke Quarry. In addition, we enhanced our ready-mix concrete and concrete block positions ahead of expected market growth. Our capital expenditures were well-balanced across our regions, with approximately $78 million invested in Florida and $60.9 million in the Mid-Atlantic. This investment profile aligns with our strategic priorities and positions us for continued growth. Slide 17 provides a bridge of free cash flow and net debt movement during 2024.

[Larry Wilt, CFO at Titan America]

Our adjusted EBITDA of $370.4 million was partially offset by changes in operating assets and liabilities of $44 million and income tax payments of $68 million. Capital expenditures of $137 million represented our continued investment in growth initiatives, while we also returned a total of $137 million to shareholders through dividends and returns of capital. These activities resulted in a net increase in our debt positions of $61 million for the year. Slide 18 illustrates our debt and liquidity profile. We ended 2024 with total debt of $460.2 million and net debt of $448.1 million.

[Larry Wilt, CFO at Titan America]

Our net debt to adjusted EBITDA ratio stood at 1.2 times, providing us with significant financial flexibility. After returning $137 million to shareholders during 2024, we maintained a strong balance sheet. Our debt maturity profile is well-structured, with minimal payments due over the next two years and the bulk of our maturities in 2027 and beyond. Looking at slide 19, I'd like to emphasize our balanced approach to capital allocation. We're focused on three priorities.

[Larry Wilt, CFO at Titan America]

First, investing in organic growth and greenfield opportunities to enhance market-leading positions. Second, pursuing strategic M&A opportunities that build upon our existing positions and expand into synergistic adjacencies. Third, providing returns to shareholders through regular dividends and potentially other avenues as our business continues to grow. Our robust balance sheet enables us to pursue these priorities while maintaining financial flexibility.

[Larry Wilt, CFO at Titan America]

We're committed to disciplined capital allocation that maximizes returns on investment and enhances shareholder value. Our board of directors has recommended for approval at the annual general shareholders meeting a quarterly shareholder return of $0.04 per share per quarter through the first quarter of 2026. With that, let me turn it back to Bill for some thoughts on market conditions, our initial 2025 guidance, and some closing thoughts ahead of your questions. Bill?

[Bill Zarkalis, President, Director, and CEO at Titan America]

Thank you, Larry. Let's now please turn to slide 20. We are operating in a dynamic market environment where several important trends are shaping construction activity across our regions. We're seeing accelerating momentum from the Infrastructure Investment and Jobs Act. Projects that were in the planning and design phases are now moving into construction, creating increased demand for our products. In Florida and the Mid-Atlantic, numerous transportation projects, water management initiatives, investments in energy, and coastal resilience projects are underway or scheduled to begin in 2025. In the residential sector, we are experiencing a mixed environment. While single-family construction has shown some signs of stabilization and there are some pockets of growth, the housing market continues to face challenges from elevated mortgage rates and affordability concerns.

[Bill Zarkalis, President, Director, and CEO at Titan America]

The residential construction sector is currently in its third year of relative softness. Previously, many industry participants expected a turnaround in the second half of 2025, driven by interest rate reductions, but the uncertainty around mortgage rates continues to extend the waiting period for home buyers, and the higher-for-longer interest rate environment has affected buyer sentiment. Despite these near-term challenges, the significant housing deficit in our markets, estimated at nearly 900,000 home units and the strong household formation trends, represent substantial pent-up demand that we expect will drive strong growth. The non-residential sector has remained strong, particularly in data centers, manufacturing facilities, the energy sector, and logistics centers.

[Bill Zarkalis, President, Director, and CEO at Titan America]

The reshoring of manufacturing and the continued expansion of e-commerce are driving demand for industrial construction across our markets. The first quarter of 2025 has experienced unusually severe winter conditions across our operating regions, including heavy rainfall in Florida and the coldest temperatures recorded in the Mid-Atlantic in over a decade that have temporarily affected construction activity. While this may impact our near-term results, we don't expect it to affect the underlying demand fundamentals in our markets in 2025. However, we may see our results weighted towards the second half of the year.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Our guidance for 2025, as outlined on slide 21, anticipates mid-single-digit revenue growth compared to 2024, with modest improvement in our adjusted EBITDA margins. This outlook reflects our confidence in our pricing momentum, operational efficiencies, and the ongoing benefits of our strategic investments. We remain focused on executing our growth blueprint in 2025 and beyond. In conclusion, 2024 was a record year for Titan America. We're proud of our strong financial performance, which reflects the effectiveness of our unique business model and the dedication of our team.

[Bill Zarkalis, President, Director, and CEO at Titan America]

As we look to 2025 and beyond, we are excited about the growth opportunities ahead. The markets where we operate are the beneficiaries of significant tailwinds, including infrastructure investments, manufacturing reshoring, housing demand, and emerging trends in resilient urbanization and construction technology. We continue to innovate and expand our product offerings, particularly focusing on meeting the evolving needs of our customers for sustainable, high-performance products, services, and solutions.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Our investments in new technologies and digital transformation are yielding tangible results in terms of operational efficiency, cost reduction, and enhanced customer service. The successful completion of our IPO marked an important milestone in our journey, providing us with additional resources to execute our growth strategy while maintaining our commitment to unlocking significant value for all our stakeholders in the quarters and years ahead.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Before we open the call for questions, I want to express my gratitude to our employees for their hard work and dedication, which have been instrumental in our success. I also want to thank our customers and partners for their continued trust and collaboration. I want to thank our shareholders for their support as we embark on this new chapter as a public company. We look forward to an enduring partnership with you. With that, I'll turn the call over to the operator to begin the Q&A session. Thank you.

[Operator]

Thank you. If you'd like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press *2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the * keys. To allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Anthony Pettinari with Citi. Please proceed with your question.

[Anthony Pettinari, Research Analyst at Citi]

Good morning. Bill, Larry.

[Larry Wilt, CFO at Titan America]

Hey, Tony.

[Anthony Pettinari, Research Analyst at Citi]

Hey. You know, looking at your full-year outlook, can you give any finer point on price versus volume assumptions baked into the revenue guidance? And then, is it possible to say how the revenue guide and margin expansion guide might break out directionally between Florida and Mid-Atlantic? You know, do you expect one to grow faster than the other? If so, what would drive that? You know, just any kind of additional color you can give.

[Larry Wilt, CFO at Titan America]

Yeah. Anthony, I think we feel positive—let me start with the second one. We feel positive about the second part of your question, for sure. The impact on the Mid-Atlantic versus Florida, we see growth in both regions, supported by the things that we were describing during our prepared remarks. When you talk about price and volume, we have a balanced view on that as we come through 2024 into 2025. Q1 weather impacts aside, we feel good about where we are in terms of price and volume on a balanced basis.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Overall, Tony, we see a positive price momentum continuing in 2025, and our revenue, our top line is going to be impacted positively by the continued investment in infrastructure. We see the projects materializing. We have many projects starting in 2025, both in infrastructure and also commercial, with residential being a bit softer. Price momentum plus growth coming mainly from infrastructure and commercial are the key components.

[Anthony Pettinari, Research Analyst at Citi]

Got it. Got it. That's very helpful. Second question, big picture, can you remind us, you know, how tariffs might impact your business or not impact your business? In terms of cement tariffs that may be planned, you know, maybe it changes every day, but what's kind of the latest view on timing of tariffs and magnitude on cement coming in from Europe?

[Bill Zarkalis, President, Director, and CEO at Titan America]

That's a good question at the top of mind of everybody. You know better than anybody else, Tony, that exports is an important—imports is an important part of the market, as cement and aggregates, all the upstream construction materials are structurally short, right? Imports is an important part. So far, to the best of our knowledge, the tariffs are affecting specific countries, and therefore it's very specific on impacts on certain states and also on certain imports that are related to these countries.

[Bill Zarkalis, President, Director, and CEO at Titan America]

So far, Titan America sources are not affected, and we expect that they will not be affected. Even if there is a scenario where some of our sources are affected, we have multiple sources, so we feel confident that we're not going to have a direct impact. Now, looking at the knock-on effects of the tariffs, one would expect that this will be positive because the market being structurally short, tariffs will affect availability and cost of imports, and therefore one will see knock-on effects, especially on the pricing power of the industry. Overall, as far as we know so far, we see a rather positive effect.

[Anthony Pettinari, Research Analyst at Citi]

Okay. That's helpful. I'll turn it over.

[Operator]

Thank you. Our next question comes from the line of Jerry Revich with Goldman Sachs. Please proceed with your question.

[Jerry Revich, Senior Investment Leader at Goldman Sachs]

Yes, hi. Good morning, everyone.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Hi, Jerry.

[Jerry Revich, Senior Investment Leader at Goldman Sachs]

Bill, hi. Bill, Larry, can you just touch on your M&A pipeline at this point? What's the range of capital deployment that's feasible to deploy over the course of this year for you folks, and any color on what type of acquisitions we're looking at at this point?

[Larry Wilt, CFO at Titan America]

Yes. Tony, sorry, Jerry, it's Larry. You know, obviously, when we look at our growth strategy, we focus on a couple of things. One, obviously, is building out the strong business that we have already, so doubling down on the capacity and the other investments we've described to you. We had a couple of examples, I think, in the slides there that we showed on the prepared remarks. On the M&A side, I think we look at that portfolio of opportunities, the adjacencies that we described, and that's our focus for today, but we do not have anything to announce in terms of capital deployment today in that specific space.

[Jerry Revich, Senior Investment Leader at Goldman Sachs]

Bill, can I just ask a follow-up on the tariff conversation and potential for that to be a positive for you folks on your cement production and depending on which countries are impacted? What is your inventory position for cement entering this year relative to the silo capacity? You know, can you just spend a minute to talk about where you folks have the ability to import cement from in terms of number of countries where you folks have relationships, just so we can get an appreciation for the flexibility that you folks have if we do get an adverse tariff ruling on a country that is supplying the bulk of your cement today?

[Bill Zarkalis, President, Director, and CEO at Titan America]

Thank you, Jerry. Yes, we have multiple sources that are related to group operations. Greece is obviously one of the sources, but also we have import sources from Turkey and also Egypt. We have three different countries within the European Union, but also outside the European Union, and this gives us the flexibility, and we do not believe that all these areas are going to be affected from any future tariffs. Now, in relation to our inventory policy, we follow the policy as we have been operating all these years because we feel confident about our ability to import and serve our markets. We are continuing on the policy steady as it goes. We are not taking any specific measures in relation to that.

[Jerry Revich, Senior Investment Leader at Goldman Sachs]

Thank you.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Thank you, Jerry.

[Operator]

Thank you. Our next question comes from the line of Philip Ng with Jefferies. Please proceed with your question.

[Jesse Barone, Vice President of Equity Research at Jefferies]

Hey, good morning, guys. It's Jesse Barone on for Phil. Just to start on 2025 EBITDA on the margin guidance, just wanted to kind of get your view on kind of the puts and takes. I know you kind of talked about pricing, but anything kind of internally that you guys are doing that you want to call out, and then anything on the cost side that kind of really sticks out to you?

[Larry Wilt, CFO at Titan America]

Okay. I think on the cost side, just some obvious things. We have some puts and takes when you talk about energy costs, natural gas. I mean, it's obvious that natural gas is up, but on the other hand, diesel costs are down, right? These can balance each other out. We have some things that we do internally on alternative fuels that we have the capability of using within our facilities to mitigate some of that impact as well. Labor, of course, is always an input cost to the business that has some inflationary pressure, but we also then take some initiatives internally to make sure that we balance that out with some variable costs that we have the ability to flex through third-party sources.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Essentially, Jesse, we continue applying our strategic flexibility because there are many pockets of growth in the economy with the infrastructure and also commercial activities, but also we see, for example, activities in renovation and remodeling. We apply a flexible model in order to improve our top line, while at the same time we manage with our investments in logistics efficiency, digitalization. We manage the cost element of the equation so that we expect to expand our margins.

[Jesse Barone, Vice President of Equity Research at Jefferies]

Just quick follow-up in cement. Anything kind of import versus kind of your domestic margins that you want to call out for this year? Kind of any large variances that you kind of expect, or do you kind of expect them to be pretty similar in 2025? Thanks.

[Larry Wilt, CFO at Titan America]

I don't think we would relay anything that's different than what we've said in the past. We look at the cost of cement and delivery of cement as an integrated approach. The cost of the materials and the cost of logistics to get it to where the customer is to best serve the customer and drive the highest margin, there's nothing different in that for us, so nothing special to call out there.

[Jesse Barone, Vice President of Equity Research at Jefferies]

Thanks. I'll turn it over.

[Operator]

Thank you. Our next question comes from the line of Brian Brophy with Stifel. Please proceed with your question.

[Brian Brophy, Associate Vice President at Stifel]

Thanks. Good morning, everybody. Just wondering if you could give us a little—good morning. Give us a little bit more color on how you're thinking about the outlook for this year by material, any notable differences between how we should be thinking about cement price versus volume relative to ready mix. Thanks.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Overall, we see positive price and momentum, as we mentioned also in the remarks. We see it across the product lines. As you noticed on the 2024 results as well, the pricing momentum has gravitated from the upstream products also now to the downstream products, as you saw it in our results in relation to concrete and block. Overall, we expect positive price momentum.

[Brian Brophy, Associate Vice President at Stifel]

Okay. Thanks. Can you touch on the D.M. Conner acquisition? What attracted you guys to that asset, and how should we be thinking about contribution there in 2025?

[Bill Zarkalis, President, Director, and CEO at Titan America]

Other than acquiring another position in the aggregates business, the key strategic reason for this investment for us was that it secured mineral reserves that we can use twofold. One, it can become and it will be a strategic input into our kiln in Roanoke as raw material. Equally important, if not more important, is a key raw material for novel cementitious materials like calcined clay, which is the future of cementitious materials, but also a key component of 1T cement. With this acquisition, we have strategically secured decades of reserves for the future needs of our company. It is a very important acquisition strategically for us.

[Brian Brophy, Associate Vice President at Stifel]

Really appreciate it. I'll pass it on.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Thank you, Brian.

[Operator]

Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press *1 on your telephone keypad. Our next question comes from the line of Chad Dillard with Bernstein. Please proceed with your question.

[Chad Dillard, Senior Analyst of US Machinery at Bernstein]

Good morning, guys.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Hi, Chad.

[Chad Dillard, Senior Analyst of US Machinery at Bernstein]

My first question is on 4Q and just how much of a shortfall was weather on volumes. I guess trying to think through just how that volume cadence evolves. Just trying to figure out whether in the first quarter, should we expect volumes to be positive, and then how does that layer in as we go into the second half?

[Bill Zarkalis, President, Director, and CEO at Titan America]

The bad weather in the fourth quarter, as you saw from the results, affected consumption of construction materials because many job sites shut down. Of course, this created high pent-up demand and backlogs. We ended 2024 with increased backlogs, and we went into 2025 with increased backlogs. As I mentioned in my comments, however, we had unusually adverse weather in the first quarter of 2025. It was very severe, heavy rainfall in Florida in the first two months of this quarter in a season which is usually the dry season for Florida.

[Bill Zarkalis, President, Director, and CEO at Titan America]

As far as the Mid-Atlantic, we had the lowest temperatures in more than a decade. This has affected overall the demand. The good element here is that whenever the weather improved, and as we have built now even bigger backlogs, we see increased demand. That's why we mentioned in our commentary that first quarter results will be affected by the weather, but we are confident about the demand overall and our performance in 2025, albeit it's going to be weighted towards the second half of the year.

[Chad Dillard, Senior Analyst of US Machinery at Bernstein]

Got it. Thanks. Secondly, the positive pricing momentum comment, just any way to kind of layer in how to think about pricing first half versus second half, and then just to round it out, just 2025 views on cash conversion and CapEx outlook.

[Larry Wilt, CFO at Titan America]

Look, I think on—let me start with the second one on cash conversion. We obviously go into 2025 with a growth agenda, with investments we're going to make largely consistent with what we described as we went forward. Obviously, being prudent, people will manage that effectively as we go forward into 2025 and make sure that the cash conversion remains at a good solid level consistent with what we have delivered before.

[Operator]

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Zarkalis for any final comments.

[Bill Zarkalis, President, Director, and CEO at Titan America]

Thank you, Operator, and thank you all for your time today. We appreciate your interest in Titan America. We look forward to updating you on our progress on our next earnings call. Have a great day, and thank you.

[Operator]

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Participants

Executives

• Bill Zarkalis, President, Director, and CEO
• Larry Wilt, CFO

Analysts

• Anthony Pettinari, Research Analyst at Citi
• Brian Brophy, Associate Vice President at Stifel
• Chad Dillard, Senior Analyst of US Machinery at Bernstein
• Jerry Revich, Senior Investment Leader at Goldman Sachs
• Jesse Barone, Vice President of Equity Research at Jefferies