Martin Marietta Materials Q1 2025 Earnings Call Transcript

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Provided by Quartr
April 30, 2025

Key Takeaways

  • Record Q1 performance: Aggregate revenues, gross profit, gross margin, and per-ton profitability all set records, driven by 7% pricing growth and margin-accretive acquisitions.
  • Reaffirmed full-year 2025 adjusted EBITDA guidance of $2.25 billion, supported by double-digit organic shipment growth, strong April shipment trends, and recent price increases.
  • Cement and concrete segment underperformed with revenues down 12% and gross profit down 23%, impacted by February divestiture, winter weather disruptions, and softer residential demand.
  • Returned capital via repurchasing 911 K shares at a $494 average price and paying $49 million in dividends, bringing total shareholder returns since 2015 to $3.8 billion while maintaining a 2.5× net debt/EBITDA ratio.
  • Magnesia Specialties achieved record quarterly revenues ($87 million), gross profit ($30.8 million), and a 44% margin, prompting plans to pursue further organic and inorganic growth.
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Earnings Conference Call
Martin Marietta Materials Q1 2025
00:00 / 00:00

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Operator

Ladies and gentlemen, welcome to Martin Marietta's first quarter 2025 earnings conference call. All participants are now in a listen-only mode, and a question-and-answer session will follow the company's prepared remarks. As a reminder, today's call is being recorded and will be available for replay on the company's website. I will now turn the call over to your host, Ms. Jacklyn Rooker, Martin Marietta's Director of Investor Relations. Jacklyn, you may begin.

Jacklyn Rooker
Jacklyn Rooker
Director of Investor Relations at Martin Marietta

Good morning and welcome to Martin Marietta's first quarter 2025 earnings call. Joining me today are Ward Nye, Chair and Chief Executive Officer, and Bob Cardin, Senior Vice President, Interim Chief Financial Officer, and Chief Accounting Officer. Today's discussion may include forward-looking statements as defined by United States securities laws in connection with future events, future operating results, or financial performance. Like other businesses, Martin Marietta is subject to risks and uncertainties that could cause actual results to differ materially. We undertake no obligation, except as legally required, to publicly update or revise any forward-looking statements, whether resulting from new information, future developments, or otherwise. Please refer to the legal disclaimers contained in today's earnings release and other public filings, which are available on both our own and the Securities and Exchange Commission's websites.

Jacklyn Rooker
Jacklyn Rooker
Director of Investor Relations at Martin Marietta

We have made available, during this webcast and on the investor section of our website, supplemental information that summarizes our financial results and trends. Non-GAAP measures are defined and reconciled to the most directly comparable GAAP measure in the appendix to the supplemental information, as well as our filings with the SEC, and are also available on our website. Ward Nye will begin today's earnings call with a discussion of our operating performance, 2025 outlook, and related market trends. Bob Cardin will then review our financial results and capital allocation, after which Ward will provide closing comments. A question-and-answer session will follow. Please limit your Q&A participation to one question. I will now turn the call over to Ward.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thank you, Jacklyn. Good morning, and thank you all for joining today's teleconference. Before discussing our Q1 results, I'll take a moment to discuss our previously announced Chief Financial Officer transition. On April 10, we announced Jim Nickolas's departure as CFO to move his family back to their beloved hometown of Chicago. We're grateful to Jim for his nearly eight years of service to Martin Marietta, over which time he made meaningful contributions to our success. We wish him and his family the best in their next chapter. In partnership with a leading executive search firm, we've initiated a process to identify our company's next CFO and are considering both internal and external candidates. While the search is underway, we're pleased Bob Cardin will serve as our interim CFO. Since joining Martin Marietta in 2019, Bob has been an integral member of our executive and finance teams.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

We're grateful he's willing to assume this role in addition to his responsibilities as Senior Vice President, Controller, and Chief Accounting Officer, and are confident that under Bob's leadership, we'll not miss a beat during this transition period. Now, turning to our financial results, I'm pleased to report this year is off to a strong start, highlighted by record first quarter aggregate revenues, gross profit, gross margin, and gross profit per ton, despite some challenging winter weather in January and February across key Southeast, Southwest, and Midwest markets. This record-setting performance was driven by 7% pricing growth, disciplined cost control, and margin accretive acquisitions. Additionally, building upon his full year 2024 performance, Magnesia Specialties established new quarterly record revenues, gross profit, and gross margin, with gross margin increasing 806 basis points compared with the prior year quarter.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

These results demonstrate why we have consistently said this business has earned the right to grow and will continue to evaluate both organic and inorganic opportunities to do so. We also established several consolidated first quarter records, including consolidated gross profit of $335 million, a 23% increase, consolidated gross margin of 25%, an increase of 300 basis points, consolidated adjusted EBITDA of $351 million, a 21% increase, and consolidated adjusted EBITDA margin of 26%, an increase of 274 basis points. These results underscored the resiliency of our differentiated business model and benefits of our 2024 portfolio optimization actions. Given current macro uncertainty, we continue to focus on matters within our control, most notably realizing fair value for our vital materials while appropriately managing our costs with product demand.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Looking ahead, we're encouraged by the double-digit growth in organic March aggregate shipments, April daily shipment trends, and realization of April 1st aggregate price increases in select markets, all of which provide us confidence in reaffirming our full year 2025 adjusted EBITDA guidance of $2.25 billion at the midpoint. Consistent with our past practice, the company will revisit its guidance at midyear. Moving to end market trends, we'll start with observations regarding infrastructure, which continues to benefit from robust federal and state investments, including the Five-Year Infrastructure and Investments in Jobs Act, or IIJA. As a result, the American Road and Transportation Builders Association, or ARTBA, expects construction activity to grow in 2025 as work advances on projects supported by federal and state funding sources.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Importantly, with only about 1/3 of the IIJA funds reimbursed to states through the end of February 2025, we expect IIJA spending will peak next year in 2026, followed by an extended tail thereafter, as further described on page eight in today's supplemental information. While contract award growth rates have moderated, as reflected in the value of contract awards for the 12-month period ended February 28, 2025, the underlying baseline remains elevated. Funding certainty, reinforced at both federal and state levels, provides the impetus for steady product volume levels and underpins a strong pricing environment for years ahead in this countercyclical public end market. Importantly, too, congressional priorities now appear to be increasingly shifting toward the reauthorization of federal surface transportation programs, with key legislative discussions already underway. Early indications suggest the successor bill may emphasize projects with national or regional significance, favoring roads, bridges, and ports.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Shifting to non-residential construction, artificial intelligence, or AI, continues to drive strong demand for data centers across the United States as hyperscalers invest significant capital in new sites. Projects underway in our geographic footprint, including Stargate in Texas, Google in South Carolina, and Meta's 4 million sq ft facility in Louisiana, underscore this momentum. While not yet a meaningful contributor to product shipments, we expect data center energy consumption requirements will drive ancillary demand for new aggregate-intensive power generation facilities across many of our key markets. Warehouse construction appears to have reached cyclical bottom, with more green shoots emerging, including large Amazon warehouse projects in Cleburne, Texas, Fort Myers, Florida, and Wilmington, North Carolina, to name a few. With respect to residential activity, affordability challenges continue to act as a natural governor on single-family housing starts.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

We don't expect this dynamic to resolve in the near term, absent either a modest home price contraction, lower mortgage rates, or both. That said, long-term housing market fundamentals remain resilient, underpinned by demographic shifts and structurally underbuilt conditions in many of Martin Marietta's key Sunbelt markets. In summary, we anticipate demand for infrastructure in our public end markets and data centers in the non-residential sector will remain robust, while portions of interest-rate-sensitive private construction demand is expected to remain subdued in the near term. I'll now turn the call over to Bob to discuss our first quarter financial results. Bob?

Robert Cardin
Robert Cardin
Interim CFO, Senior VP, and Chief Accounting Officer at Martin Marietta

Thank you, Ward, and good morning, everyone. The building materials business posted revenues of $1.3 billion and an 8% increase. Gross profit increased 20% to $298 million, and gross margin improved by 229 basis points to nearly 24%, both first quarter records. As Ward mentioned, our aggregate business achieved record first quarter revenues, gross profit, gross margin, and unit profitability of $1 billion, $297 million, 30%, and $7.60 per ton, respectively. Notably, aggregate gross profit per ton improved over 16%, and aggregate gross margin expanded 260 basis points as organic price-cost improvement and the benefit of margin accretive acquisitions more than offset headwinds from targeted inventory management efforts. As mentioned in our previous earnings call, we will continue to prudently manage our inventory levels.

Robert Cardin
Robert Cardin
Interim CFO, Senior VP, and Chief Accounting Officer at Martin Marietta

That said, we expect these inventory drawdown headwinds on gross margin will conclude by midyear as we began reducing inventory levels in the third quarter of last year. Cement and concrete revenues decreased 12% to $233 million due to the threefold impact of the February 2024 divestiture of the South Texas Cement Plant and related concrete operations, winter weather this past February, and slower residential demand. Gross profit decreased 23% to $24 million as the year-over-year gross profit improvement in cement was more than offset by a decline in ready-mix concrete gross profit due to higher raw material costs. Asphalt and paving revenues grew 37% to $80 million due to increased asphalt shipments in California. This business posted a $23 million gross loss due to customary winter shutdowns in Minnesota, consistent with typical first quarter seasonality trends, as well as higher raw material costs in Colorado.

Robert Cardin
Robert Cardin
Interim CFO, Senior VP, and Chief Accounting Officer at Martin Marietta

Magnesia Specialties achieved all-time quarterly records for revenues, gross profit, and gross margin of $87 million, $38 million, and 44%, respectively, driven by pricing improvement and continued cost discipline. Turning now to capital deployment, Martin Marietta's capital allocation priorities remain consistent and focused on prioritizing value-enhancing acquisitions, responsible reinvestment in the business, and returning capital to shareholders. Relative to the latter, during the quarter, we repurchased nearly 911,000 shares at an average share price of $494 and paid $49 million of dividends. Since Martin Marietta's repurchase authorization announcement in February of 2015, we have returned a total of $3.8 billion to shareholders through dividends and share repurchases. Our $1.3 billion of total liquidity, free cash flow generation, and net debt-to-EBITDA ratio of 2.5x as of March 31 provide ample balance sheet flexibility to capitalize on our active M&A pipeline. With that, I'll turn the call back over to Ward.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thank you, Bob. We're pleased with our strong first quarter financial results and remain optimistic about the opportunities ahead in 2025. The foundational strengths in our resilient aggregate-led business, strong balance sheet, disciplined execution of our strategic plan, and proven experience successfully navigating market cycles reinforce our confidence in delivering our full year adjusted EBITDA guidance. Longer term, in 2026 and beyond, we remain confident that Martin Marietta is exceptionally well-positioned for sustainable growth and compelling value creation. To conclude these prepared remarks, I'll briefly touch on tariffs. Tariffs present both opportunities and challenges. Some enhance profitability, while others may increase certain input costs or impact product demand. However, it's worth noting that our company's supply chain is largely domestic. That said, given the uncertainty surrounding potential exemptions and retaliatory measures, our 2025 guidance neither assumes any material tariff-related tailwinds nor headwinds at this time.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

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

Operator

Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, it is star one if you would like to join the queue. Our first question comes from the line of Kathryn Thompson with Thompson Research Group. Your line is open.

Kathryn Thompson
Research Analyst at Thompson Research Group

Hi. Good morning, and thank you for taking my question today. Thanks for the color that you gave in prepared commentary. Going to the earnings season broadly, we at TRG have been focused on talking to a wide range of construction value chain companies. There certainly seem to be some that are doing better versus others, and the heavy materials generally seem to be doing better, but it's still early days with the tariff debate that is ongoing. Against that backdrop, what gives you confidence with the volume guidance and maintaining it? Pulling the string a little bit further, we are seeing some green shoots, stabilization in certain end markets like distribution that previously had been weak. What are you seeing there, and are you seeing any projects canceled or delayed, or any other upside that you're seeing, as you said, in the infrastructure market?

Kathryn Thompson
Research Analyst at Thompson Research Group

Thanks so much.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Kathryn, good morning. Thank you for the question. Several things. One, I do believe heavy-side materials in these types of circumstances fare better than most, and I think that's exactly what we're seeing. I think we've long been a safe haven for investors. I think we'll continue to be. If we're looking at the trends that I think are worth noting, infrastructure, as we noted, is going to be good for the rest of this year. Infrastructure ought to be good going into next year as well. We talked about the fact that only 30-some % of the state reimbursements have even occurred so far with IIJA, so there's lots of money to come in that. The state DOTs in which we're doing business, if we look at our top 10 states, eight of the top 10 have budgets up year-over-year. Infrastructure is strong.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

It's going to remain strong. Equally, and you called it out, data centers and what's going to be coming behind data centers will be of moment. We're seeing that in a host of markets. As you know, they are terribly power generative, and as a consequence, we think we're going to see good energy activity in those markets as well. The other thing that I called out in the prepared remarks, and you noted, is warehousing, we believe, has found a bottom. The fact is we have the largest Amazon project in North America underway right now, just outside the Dallas-Fort Worth Metroplex. We're seeing good activity on the West Coast of Florida. We're seeing good activity in that respect on the coastal areas of North Carolina as well.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Separate and distinct from that, if we're looking at customer backlogs right now, they're nicely up year-over-year and sequentially. That's looking at work. It's also looking at prospective work. Here's what's important, too, because I think this is something that's really important. We're not seeing project cancellations. I mean, the backlogs are building. Projects are not being canceled. Those three building blocks, I think, Kathryn, really give us a nice outlook for the year. The other thing that I think is important for us to remember is we really got washed out last year in Q2, particularly in the Southwest and in Dallas-Fort Worth, which is our largest single MSA market.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

As we're looking at volume and we look at the trends in Q1, and I mentioned in my prepared remarks the daily trends that we're seeing in April right now, all of that points to me to a very steady and attractive and appealing volume environment for heavy-side building materials, particularly in the aggregate space. So, Kathryn, thank you. I hope that helps.

Kathryn Thompson
Research Analyst at Thompson Research Group

It does. Thank you very much.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

It's good.

Operator

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

Trey Grooms
Trey Grooms
Managing Director at Stephens

Hey, good morning, Ward. Morning, Bob.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Hey, Trey. Good morning.

Trey Grooms
Trey Grooms
Managing Director at Stephens

Good morning. I did want to touch on the cement business. I mean, it's a fairly small part of the overall business now, but if you look at the margins there in the segment, it looks like ready-mix, the headwinds there more than offset the improvement you may have seen in the cement margins. How are you thinking about margins in that segment as we progress through the year, especially with any additional increases in cement pricing that we could see going forward? To that point, the Texas market is clearly an importer of cement. How do you think the tariff backdrop could play into that and potentially into the pricing outlook for your cement business? Thank you.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Craig, thank you for the question. I'd say several things. One, if we're looking just at cement, I mean, pricing was up 6%, and profits and gross margin actually grew despite the fact that we had lower production volume in cement. When we're looking at that business, it performed really well despite what was a pretty tough February simply because of the weather. The other thing that's worth noting is FM7 is obviously finished. It's operating well. Obviously, pricing growth in cement is moderating. That's totally as expected from the rates that we've seen the past couple of years, but we expect good mid-single-digit growth this year. Again, to that end, pricing was up 6% in Q1. If we're looking at ready-mix, I mean, ready-mix, several things were driving that portion of the business in Q1. Some of it was simply seasonality.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

The other is if we're looking at organic shipments, they were down 2% to prior year, and that's really due to continued softness, largely driven by residential demand and degrees of weather headwind as well. The other thing that's happening there is in our downstream businesses, we're taking the increased aggregates and cement cost impacts as well. Keep in mind that really ends up being a distribution chain for us more than anything else. Now, relative to your question on Texas cement and tariffs, it's interesting because I think that actually could provide some upside for us because that's going to further insulate Midlothian cement from the waterborne imports. Frankly, as I just think about tariffs generally for our business, I know I said in the prepared remarks that we're neither putting in a headwind nor a tailwind.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

If I really think about them, it's really in two different buckets, Trey, what happens from a revenue perspective and what happens from a cost perspective. If I'm thinking about it from a revenue perspective, frankly, it's pretty helpful to aggregates because you end up passing the cost through. We talked about cement. The fact is, in Magnesia Specialties, depending on what happens with steel production, the more steel production we see, the more dolomitic lime that's going to go out the gates as well. Of course, much of this is driven to drive more reshoring and manufacturing demand across the United States generally, which will help us specifically. Again, as I noted, our supply chain is largely domestic, so we really don't see a notable threat there.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

I do think relative to tariffs and the essence of your question that was around cement, I don't see that there's any downside for us in that respect whatsoever, Trey. Again, I hope that's responsible.

Trey Grooms
Trey Grooms
Managing Director at Stephens

Yep. Super helpful, Ward. Thank you, and best of luck.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thanks, Trey.

Operator

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

Jerry Revich
Jerry Revich
Managing Director and Senior Equity Research Analyst at Goldman Sachs

Yes, hi. Good morning, everyone.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Hi, Jerry.

Jerry Revich
Jerry Revich
Managing Director and Senior Equity Research Analyst at Goldman Sachs

Good morning. Ward, in your prepared remarks, you spoke about Magnesia Specialties has earned the right to grow organically and via M&A. Correct me if I'm wrong, but I believe this is the first time I recall you saying that. Can you just expand on what value-added M&A would look like in this line of business where you focus that value in ags is very clear? What's that recipe for value-add if we see you move down the M&A trail for Magnesia Specialties?

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Jerry, I appreciate the question. First, let's begin with the baseline. If we look at that business, number one, it's always been a very good, steady performer for us. If we look at the recent years, the work that they've done in pricing actions, operational reliability, and efficiency efforts are really coming together, and you just saw a very attractive story for the quarter. We actually think that business has more upside than downside right now. The reason that we think that business has earned the right to grow is it's got many of the same attributes that aggregates does. It's got very high barriers to entry. It's got pricing power through cycles.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

This is a business that has been through what we feel like is probably the single most challenging chemical marketplace that we've seen in my career, and it's a business that continues to put in record quarters. If you think back to the financial crisis, and by the way, I don't think we're anywhere near that, but if you think about the financial crisis, Martin Marietta always remained profitable. We never cut or suspended a dividend. One of the big reasons why was we had that differentiated portion of our business that was Magnesia Specialties. To the extent that we can take that portion of our business and grow it responsibly, it's something that we will certainly look at. Obviously, we're going to continue to be an aggregates-led business.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

When we look at our business and we recognize that is truly a differentiator for us, it's something that, number one, I think they've earned the right to be called out on because they're really good at it. Number two, to the extent that we can continue to invest organically and invest inorganically, we should, and I believe our shareholders would richly benefit from that.

Jerry Revich
Jerry Revich
Managing Director and Senior Equity Research Analyst at Goldman Sachs

Thank you.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Jerry, thank you. Good to hear your voice.

Operator

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

Philip Ng
Philip Ng
Managing Director at Jefferies

Hey, guys. Congrats on a strong quarter. Ward, I mean, you sounded uber bullish on infrastructure, which is great. With the new administration, certainly a lot of head fakes in terms of projects being paused and what's formula-based and whatnot. One, help educate us what you're seeing out there. Two, you kind of hinted at, as we kind of look at the 2026, maybe we get a new Service Transportation Act. There was some news the other day with Transportation and Infrastructure Chairman Sam Graves potentially pushing for a new source of funding for the Highway Trust Fund, which is the first on EV and hybrids. Wanted to get your thoughts on that opportunity and what that could mean for you guys.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Phil, thank you for the question. I would say several things. One, in true heavy-side construction that we're looking at, that's traditional Highway Funding, we haven't seen any projects pulled. We've seen some of the grant projects pulled. Again, that's an entirely different animal and a very small portion of overall infrastructure. That has been nothing that has caused us any concern. Again, if we're looking at really what we're tracking right now, several things. You've seen the data that I've seen as well, and that is if we're looking at highway contract awards and we're looking at LTM from March of 2023 to March of 2025, they're up 19%. Number one, that's a great number.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Number two, if we're looking at the cumulative state reimbursements, I mentioned this before, $118 billion has gone out of the $350 billion that's really been set aside for highways and bridge funds. As a practical matter, only 34% of the total funds have found their way out into commerce at this point in time. If we also go back in time and say, how does this usually play out, that ticks and ties back into my commentary both on 2025 and 2026. We're going to see a nice continued build over the next couple of years. Again, if you look at the slide, I guess the slide, forget which slide it is, particularly in the supplemental material, but it takes you through the ARTBA snapshot of what these 2025, 2026, and 2027 will look like.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

It shows the out years, but importantly, the out years are not showing what we anticipate will be an attractive successor bill. To your point, the successor bill is already gaining some degree of dialogue in both the House Transportation and Infrastructure Committee as well as EPW. I'm seeing a couple of things. One, they are talking increasingly about projects of regional and national scope. I think there's going to be less about bicycle trails and a lot more about highways, bridges, roads, and streets. I think that's code for what that means. Importantly, too, and this goes to the gravity of your question, Sam Graves, as you mentioned, Republican from Missouri who heads House T&I, opened a dialogue here this week that needed to be opened. That is, he's looking at what are we going to do with EVs?

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

What are we going to do with hybrid vehicles? And how are they going to be in a position that they're helping pay for infrastructure when they're wearing out infrastructure just as much as a gasoline car is? In some respects, more because these vehicles tend to be really heavy. Actually, what we're seeing is the revenue package put forward would begin, from my perspective, a much overdue conversation and bring some fresh ideas to a problem that's long been avoided. The issue is simply this: the gas tax and the diesel tax were never indexed for inflation. If we go back and look at what's happened, or more to the point, not happened there since Bill Clinton's first term in office, it has remained utterly static. As a consequence, we've been having to go to the general fund for years.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

If you look over the last 17 years, it's been to the tune of about $275 billion. Now, do I think we're going to have to look to the general fund going forward? Yeah, probably so. Do we need to have multiple drivers, no pun intended, that are putting funds into that Highway Trust Fund? The answer is that we do. That's what the states have been doing very effectively. I think the fact that now we're having that conversation at a national level is important, and it's a really good start.

Philip Ng
Philip Ng
Managing Director at Jefferies

Okay. Appreciate the caller.

Operator

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

Tyler Brown
Tyler Brown
Associate VP at Raymond James

Hey, good morning.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Hi, Tyler.

Tyler Brown
Tyler Brown
Associate VP at Raymond James

Hey. Hey, Bob. Actually, cost performance was very solid in aggregates. I know that there was some discussion with the peer that maybe some maintenance or stripping costs got pushed out on the weather. One, I guess I'm just curious if you saw the same thing. Two, can you just help us shape how we should think about cost inflation for the rest of the year? I know you lapped the inventory pressures mid-year. Are you kind of looking at double-digit gross profit per ton each quarter? Appreciate it.

Robert Cardin
Robert Cardin
Interim CFO, Senior VP, and Chief Accounting Officer at Martin Marietta

Yeah. Thanks for the question. In the first quarter, I would say that we saw just excellent cost management by our operations teams in light of the inventory reduction. The team was very proactive. If you look at energy and contract services on a per-unit basis, they were down low double digits. Supplies and repairs kind of down in the mid-single-digit range, again, on a per-unit basis. Overall, I think just effective management. We do have a diesel fuel tailwind that's helping us as well. The other thing I'll mention is if you back out the impact of the $0.72 per ton impact from the inventory drawdown, we were actually down 2.3% on a unit cost basis. As we look forward, we expect in future quarters that we will see continued healthy expansion in gross margin.

Tyler Brown
Tyler Brown
Associate VP at Raymond James

Perfect. Yes. Thank you very much.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thank you, Tyler.

Operator

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

Angel Castillo
Angel Castillo
Research Analyst at Morgan Stanley

Hi. Thanks for taking my question. Again, congrats on a strong quarter here. Just maybe wanted to unpack a little bit more along the lines of that kind of 2Q and 3Q, but maybe more from the price perspective. You had had some of your pricing maybe get pushed out to April. Just curious, how should we think about the progression of price growth as we get into 2Q? As part of that, could you talk about mid-years, what you're seeing in terms of any pushback from perhaps those customers that shipped it out to April or anybody else perhaps pushing back on mid-years?

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Andrew, good morning. Thank you for the question. Several things. One, if we look at the pricing as reported, up 6.8%. That was nice, steady growth. Keep in mind, we do have some April increases that are going in as well. That is primarily to certain select concrete customers. I think this is important, Angel. If we are looking at our organic business, the pricing was up about 7.4%. Actually, you saw a pretty healthy delta between, as reported, cumulatively and the organic business. That tells me several things. One, we continue to have some room ahead of us relative to the assets that we have bought to get them up to Martin Marietta pricing. I think that also tells us that there are going to be mid-years in a number of markets.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Keep in mind, the guide that we have given you does not assume any mid-year price increases. We are going to see degrees of mid-year price increases. I think the other thing to keep in mind, just from an optical perspective, during the first quarter in particular, the central division operations, because they tend to be more northern climate, are not operating and not selling as much. Those will now start coming on and into play more meaningfully, obviously, in Q2 and Q3. Their average selling prices tend to be modestly lower. Now, all that said, really, as I am looking at the ranges that we have given for pricing, at this point, I am thinking we are probably going to be on the higher end of ASPs relative to the guide that we have given. Obviously, we will come back and review the overall guide at half-year, as is our custom.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

I think if you think about pricing in Q1, strong. If you think about pricing relative to the organic business, particularly strong. If you think about the price increases that we believe can be coming relative to the acquisitions, they look actually quite good. I think I have given you a sense of how I think that is going to play out for the four-year, Angel. I hope that was responsive to your question.

Angel Castillo
Angel Castillo
Research Analyst at Morgan Stanley

Absolutely. Very helpful. Thank you.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

You bet. Take care, Angel.

Operator

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

Anthony Pettinari
Anthony Pettinari
Managing Director and Senior Equity Analyst at Citi

Hi, good morning.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Hi, Anthony.

Anthony Pettinari
Anthony Pettinari
Managing Director and Senior Equity Analyst at Citi

Hey, Ward, you referenced, I think, historically bad weather that you saw in North Texas in 2Q last year. Is there a way to think about, or can you remind us sort of what the impact of that was, or if there's sort of an add-back we can think about? I'm just trying to kind of circle back on this. You saw such strong gross profit per ton growth in 1Q. Just wondering what that could look like in 2Q, given some of the puts and takes.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

I think it will look attractive in Q2. Again, I'd have to go back and pull out exactly what the hit was last year in Q2 because of the weather in North Texas. It was notable, Anthony. I know I spoke to it last year very specifically. We can go back and maybe take offline what that was. I think we should see a nice sequential build throughout this year. Keep in mind, the other thing that'll happen by the time we're done with Q2 is the inventory headwinds that we're working our way through will have been totally dealt with. As Bob mentioned in his comments a few minutes ago, if we're simply looking at this quarter, the inventory headwind was $28 million.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

We had indicated coming into the year that we thought it would be somewhere between $20 million and $30 million a quarter in both quarter one and quarter two. Do I think quarter two ought to be more attractive simply because we do not anticipate something that is epic in North Texas in the quarter? Yeah, I think we probably do. Do I think you have a nice build also into quarter three because suddenly you do not have that real headwind from what we are going through right now relative to the inventories? Anthony, I hope that helps.

Anthony Pettinari
Anthony Pettinari
Managing Director and Senior Equity Analyst at Citi

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

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thanks, Anthony.

Operator

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

Timna Tanners
Timna Tanners
Managing Director at Wolfe Research

Yeah. Hey, good morning, guys.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Hi, Timna. Morning.

Timna Tanners
Timna Tanners
Managing Director at Wolfe Research

Hello. Could not help but notice the really strong share buyback in the quarter, bigger than all of last year. It might just be a question of just authorizing, but I did not see a reauthorization to keep that level going forward. I just wanted any thoughts on the amount. Was it opportunistic because of where the share price is? Is it a commentary on a lull in M&A? Any more color would be great. Thank you.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Timna, thank you for the question. It was not a commentary on M&A because I continue to think that's going to be attractive for us this year. It was really more of a commentary that, look, we liked where that share price was, and we thought that was a great place to go in and buy. We bought 911,000 shares, and that was $450 million because we thought it was opportunistic and a good buy. If you recall, actually, when we bought TXI in 2014, 2015, we had an authorization at that point to buy back 20 million shares. If we look at where we are in that, we bought back about half of that over that period of time. We still have plenty of runway ahead of us.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Importantly, if you look at where we finished the quarter relative to a debt-to-EBITDA ratio, we're still very much in the range that we like to be. Obviously, we're about to hit the time of year where we really start making considerable money as well. No, it's not a commentary on a lack of M&A pipeline because, in fact, that actually looks quite good. It is a commentary on the fact that we thought that was an attractive entry place for the stock. We proverbially put our money where our mouth is. Thank you for the question, though, Timna.

Timna Tanners
Timna Tanners
Managing Director at Wolfe Research

Thanks, Ward.

Operator

Your next question comes from the line of Stephen Fisher with UBS. Your line is open.

Steven Fisher
Steven Fisher
Managing Director and Senior Equity Research Analyst at UBS

Thanks. Good morning.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Good morning.

Steven Fisher
Steven Fisher
Managing Director and Senior Equity Research Analyst at UBS

Good morning. Back in February, you had characterized the guidance as being sort of conservative guidance. I'm curious how you feel about that today. Was there any conservatism you think you needed to draw on in Q1 or the first four months of the year or that you see in Q2? I know you just said a couple of questions ago that the guidance does not include the mid-year. I'm just curious how you'd kind of characterize the outlook today, also in light of things that have kind of changed a little bit in the macro backdrop.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thank you for the question. They have changed a little bit in the macro backdrop. What I'll say is that you're right. I forget whether we use the word measured or conservative coming into the year. I think it's one or the other, and they're probably synonymous. Where I'm sitting today, I actually feel better today than I felt in February. To the extent that we felt like it was a measured guide at the time, I probably feel that same way, maybe a little bit more strongly today than I did then. Obviously, as we indicated in the prepared remarks, we come back and we'll revisit our guide at half-year, which we typically do. I've already indicated I think our pricing is going to be at the higher end of that. More to come.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

There has been nothing that I'm seeing in the way this year is playing out and the way that our teams are responding, whether it's relative to cost, whether it's relative to pricing, whether it's relative to what we're looking at from M&A, that has been a disappointment to me. I think our teams are performing well. I think the business is revealing the type of durability that I would expect it to, particularly given the significant portfolio shaping that we brought to the business last year. Seeing these nice margin enhancements are not a surprise to us. It is a nice affirmation on where the business is. I think it gives you a good sense of where the business is going.

Steven Fisher
Steven Fisher
Managing Director and Senior Equity Research Analyst at UBS

Terrific. Thank you.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

You're most welcome.

Operator

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

Michael Dudas
Michael Dudas
Partner and Senior Equity Research Analyst at Vertical Research

Morning, Jacklyn, Bob, Ward.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Hey, good morning, Mike. We're having a hard time hearing you. If you can speak up just a little bit, please.

Michael Dudas
Michael Dudas
Partner and Senior Equity Research Analyst at Vertical Research

Can you hear me now?

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Much better. Thank you so much.

Michael Dudas
Michael Dudas
Partner and Senior Equity Research Analyst at Vertical Research

Great. Terrific. Following up on Timna's question, me turning to acquisitions, has the macro environment, looking at the sentiment amongst your acquisition pipeline, changed materially? Have things been maybe pushed off a little bit because of the uncertainty? We'll take your temperature on where you feel like you've transformed portfolio quite a bit in the last 18 months. Are we at similar types of levels given where the cash flows are going to be in your balance sheet and the opportunities ahead of you, given there's going to be some pretty reasonably sized assets maybe coming on the market?

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Great questions. I would say several things. One, I don't see material changes in the sentiment on businesses that are looking to do M&A today. I think it feels broadly the same. As we've discussed before, typically, people aren't selling businesses because they're trying to time it in our space. They're typically doing it relative to family succession and other issues that drive M&A. We haven't seen that as a significant issue for us. As I've also indicated before, I think we're in a place that, give and take, a normal year is going to be around $1 billion worth of M&A. Don't expect that to be linear. There are going to be years that it's likely going to be notably more than that. I think in some respects, M&A can be a little bit like the buybacks that we did this year.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

It can have a head of opportunism that comes with it because if some businesses come along that are particularly compelling businesses, you'll see us lean in and be smart and sensible about a business because you're frankly not going to see it come through again. Am I seeing anything that I would view as a material change? No. Do I think it'll continue to be an attractive year for us on aggregates-led M&A? Yes. Do I think that's likely to be the case, not for a matter of quarters, but really for a matter of years and likely through this next SOAR 2030 period?

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

I think the answer is undeniably yes because when I'm looking at simply closely held aggregate businesses in markets in which we want to grow, we've identified businesses that produce and sell, let's call it, 250 million tons of stone per annum right now, which tells us there's effectively a business out there that's modestly larger than Martin Marietta is today that would be in something that we would think of as our sweet spot. I think there's a lot that's been done on shaping. There's a lot that's going to be done over the next several years and decades in growing this business and continuing to shape it and doing it in ways that hopefully you'll continue to see more profitability, but you'll see continued margin expansion and the quality of the business continue to grow.

Tyler Brown
Tyler Brown
Associate VP at Raymond James

That's a lot of rock out there, Ward. Good luck.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thanks so much.

Operator

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

David Macgregor
David Macgregor
President and Senior Analyst at Longbow Research

Hi, everyone. Congrats on a good quarter, Ward.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thank you, David.

David Macgregor
David Macgregor
President and Senior Analyst at Longbow Research

I wanted to, yeah, I wanted to just take your temperature. I guess this is an M&A question of sorts, but it would relate to just any changes you're seeing in the permitting prospects out there and the permitting process that would improve your ability to increase reserves-oriented acquisitions.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Yeah. It's interesting, David. I don't see that changing notably, and I would say several reasons why. Obviously, there is a certain degree of aggressiveness relative to the regulatory state that's underway with the current administration. Frankly, I welcome that. The fact is the regulatory state that drives what's happening relative to permitting, greenfields, adding reserves, etc., tends not to be a national issue. It tends to be a local issue. Is it a national issue relative to an air quality permit? Yeah, it sort of kind of is. Is it a national issue relative to water quality and discharge? Yeah, it sort of kind of is. The bigger issues aren't those. The bigger issues are zoning, and the bigger issues are land use relative to either conditional use permitting or special use permitting. Those tend to be decidedly local.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

When I say local, I do not mean at the state level. I mean at the city level or the county level. The fact that those barriers to entry are notable, I think, is important. It also plays to the strength that we have relative to land use. Part of what you will see us do, and you can see in some of the CapEx numbers, is we will buy properties adjacent to our existing operations and recognize that we can go through a special use and a zoning process on those parcels that at times can take years. That is okay because we typically have long-lived reserves. When we get those adjacent reserves zoned and permitted, two things happen. One, the setbacks that we have on our existing quarries basically go away. We also have opened up to us the new reserves that we have just bought.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

The fact is we end up winning twice under those circumstances. Do I think it's changing relative to greenfielding? No, I don't. I think it's going to continue to be a challenge in many instances. Do I think it's changing relative to next door? No, I don't. Do I think there's opportunity at the national level to change that? Actually, I really don't because this ends up being a highly local issue. It's an area in which Martin Marietta has long had, I think, a very capable resource, and we've done that well. I hope that helps, David.

David Macgregor
David Macgregor
President and Senior Analyst at Longbow Research

Yeah, it does. Thanks, Ward. Good luck.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Take care. Thank you.

Operator

Your next question comes from the line of Brent Thielman with D.A. Davidson. Your line is open.

Brent Thielman
Brent Thielman
Equity Research Analyst at D.A. Davidson

Hey, great. Thanks. Good morning.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Good morning.

Brent Thielman
Brent Thielman
Equity Research Analyst at D.A. Davidson

I appreciate the detail. Appreciate all the color around the federal funding visibility here. That's really great. I think the other side of the question that we seem to get is on the state side. I mean, as you sort of scrutinize some of your largest states on the public infrastructure side and the mechanisms for funding infrastructure projects, I'd just be curious what's your assessment, your experience as to whether there's risk of reallocation within those state budgets away from transportation funding, especially if the economy begins to see a shortfall in tax revenue.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Brent, thank you so much for the question. I would say several things. One, if we're looking at Texas, Florida, North Carolina, Indiana, Georgia, Colorado, Arizona, Iowa, as I indicated before my comments, our top 10 states, eight of them are seeing budgets year-over-year that are up. That's particularly true if we're looking at their baseline budgets. I think more importantly, if we go and look at some of the information on those individual states themselves and really think about that. I mean, if we're looking at the 2025 approved increasing for Texas long-term 10-year program, it's already up 4% to $104 billion. If we look at how that translated, if we're looking at our March 25 aggregates backlog for customers in that state, they're up about 18%. These state budgets matter.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

If we're looking at Colorado, they expect to have about $3.7 billion available to spend in FY 2025. That's a nice increase of what we've seen in recent years. Equally, in North Carolina, their budget has increased year-over-year. Importantly, and this goes back to the question I had before relative to federal budgets, North Carolina did something that was important, and they started taking sales tax revenue and shifting that to the Highway Fund. Beginning in 2025, that goes up to 6% here in this state. If we're even stepping back and looking at what has to be done, you recall, obviously, Hurricane Helene came through, created a lot of mayhem in the western part of the state. We're seeing nearly $5 billion worth of work that has to be done there.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

$3 billion of it will come from the federal government, $2 billion from the state, and North Carolina has a $6 billion rainy day fund. Part of the reason I call all of this out, when we began our SOAR process in 2009 and 2010, we were looking to do business in states that had a very, very strong fiscal condition because we believed that was going to be important as state populations continued to grow, and we wanted to be in states that had the capacity to continue to grow what they're seeing from a DOT perspective. Again, that's what we're seeing in Georgia as well. They've got a 7% increase this year from their original FY 2024 budget.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

I think if we look at the federal side that you mentioned and then go to the state side that you specifically asked about, eight of the top 10 are up. And then if you take even within a subset of those 10 and start looking at precisely what we're seeing, it's a very healthy story.

Brent Thielman
Brent Thielman
Equity Research Analyst at D.A. Davidson

Very good. Thank you.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thank you.

Operator

Your next question comes from the line of Adam Thalhimer with Thompson Davis. Your line is open.

Adam Thalhimer
Director of Research at Thompson Davis

Hey, good morning, guys. Nice quarter.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thanks, Adam.

Adam Thalhimer
Director of Research at Thompson Davis

When you talk about data centers and the associated power demand, Ward, are those projects, are you thinking about those as a driver in 2025, or is that more 2026 plus?

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

I think that's more 2026 plus. I think in the near term, you're going to see more activity on data centers, and I think that's going to be pretty significant. I think in the near term, you'll see growing activity on warehousing. I think in the medium to longer term, you're going to see more energy activity. I mean, for example, we've got local power companies talking about small nuclear facilities for the first time in years. The fact is we're going to have to see a number of those types of things. It's been interesting to watch what's happened in Europe this week relative to Spain, Portugal, and other countries. I do think the United States is going to have to be really thoughtful about the way that we're going to continue to grow in light non-res.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

We are going to continue to see population shifts and dynamics to the Southeast and Southwest. These states, in particular, are going to have to be ready for that type of power transition.

Adam Thalhimer
Director of Research at Thompson Davis

Got it. Thank you.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thank you, Adam.

Operator

Your next question comes from the line of Keith Hughes with Truist Securities. Your line is open.

Keith Hughes
Keith Hughes
Managing Director and Senior Equity Analyst at Truist Securities

Thank you. Ward, I want to go back to your comment on potential new legislation. Is there any kind of timeline emerging when that would formally be introduced in Congress and potentially push down the law?

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Yeah, there hasn't been anything formal, Keith, that's come out, but I'll tell you anecdotally what I'm hearing. That is I think there's going to be a push to get that done before the midterms next year. I think there are practical reasons that people are going to want to see that done. I think the other thing that it does is it makes the takeoff for the next bill much smoother. I would not be surprised to see a headline bill that's less than $1.2 trillion, but I'd be really surprised to see within that bill the same geography that we saw this last time. $1.2 trillion bill that had $350 billion dedicated to highways, bridges, roads, and streets. That's not the way I think this is going to come out. I think we're going to see several things.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

One, I think what you've seen in House T&I this week relative to funding is a good part of an overall conversation. We'll probably see House T&I take the lead on putting this out. That's the way that historically has worked. They have taken the lead. EPW has followed. I still think it's going to be something that we will see done before midterms, Keith.

Keith Hughes
Keith Hughes
Managing Director and Senior Equity Analyst at Truist Securities

Okay. Is the talk in the, I'm not sure, lobbyists and trade groups something greater than the full roads, bridges, streets? Something greater than the $348 billion that we saw in IIJA?

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

I think that's certainly where people are trending. Yes, Keith.

Keith Hughes
Keith Hughes
Managing Director and Senior Equity Analyst at Truist Securities

Okay. All right. Thank you.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thank you so much.

Operator

Your final question comes from the line of Garik Shmois with Loop Capital. Your line is open.

Garik Shmois
Garik Shmois
Managing Director at Loop Capital

Oh, hi, thanks. Congrats on the quarter. I wanted to just follow up on a comment you made, Ward, that you feel better now on the outlook than you did after 4Q. I wanted to kind of specifically drill down on the volume piece. Given the concern on private construction with affordability and consumer confidence issues, is it fair to assume the outlook—we had a lot of discussion on infrastructure—is it fair to assume that your outlook for infrastructure this year may be directionally stronger than it was coming out of the fourth quarter?

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Yes, Garik. I think that's entirely fair. I mean, if we think about it, Q1, if I look at the breakdown that we had, 33% was infrastructure, 36% was non-res, 24% was res. Look, I think going forward, we're clearly going to see that 33 get bigger. I think we should. Given the quantum of projects that are out there, given their relative aggregates intensity, that number should move. That, to me, is a seasonally driven number. At the same time, I think people would be surprised that the 36% was non-res. The fact is we go to the point that the heavy side of that's actually doing pretty well. The light side of it, frankly, in some areas, are doing better than people would have thought. At this point, look, we're not putting a lot of stock in what happens on residential all by itself.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

The thing that I think is worth noting, though, is residential, at least in our markets, is so far from being overbuilt, it's really almost ridiculous. If we're looking at what builders are focused on right now, they are focused on—and this goes back to part of the question that David MacGregor asked—builders are finding that it's taking more time to get zoning and special use permitting for subdivisions. Their notion of buying land and then getting entitlements in place is important. We think they're focused on that. I continue to believe, look, don't put a lot of money on housing on the second half or this year, but we will see that come. It's not going to take a lot of movement relative to interest rates or home prices to have it move pretty notably in our markets.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

The fact is we're well positioned to meet that whenever it does show up.

Garik Shmois
Garik Shmois
Managing Director at Loop Capital

Understood. Thank you.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thank you, Garik.

Operator

My apologies. Now our final question is from Brian Brophy with Stifel. Your line is open.

Andrew Mazur
Andrew Mazur
Analyst at Stifel

Hello. This is Andrew Mazur on for Brian. Thank you for taking my question. I just had a quick one on pricing opportunities for prior M&A. I believe some of the M&A you completed in the past year generally had ASPs below corporate averages. I was wondering where you stand on closing that gap. Then separately, how are you thinking about the potential for mid-year price increases in markets where last year's M&A won't be a tailwind? Thank you.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Thank you so much, Andrew. I would say several things. As I indicated, organic pricing was up 7.4%, reported was up 6.8%. That gives you a pretty good snapshot right there on what's the difference between the M&A sites that we've had and the organic that we've had. There are some places, for example, California, where we have now closed that gap. The fact is, from my perspective, California shouldn't be at a corporate average. Barriers to entering California are higher. The difficulty in doing business in California is higher. The fact that we've closed that gap is nice, but it doesn't indicate to me that we've finished the journey that we started on there. I do think we will see a number of mid-year price increases, as I indicated before. I think the quantum will probably look a bit like it did last year.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

More to come on that. We'll talk more about that when we're together at half year. Directionally, I hope that gives you a sense of where we are and where I think we're going.

Andrew Mazur
Andrew Mazur
Analyst at Stifel

Yep. Great. Thank you.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

You're welcome.

Operator

That concludes our question and answer session. I will now turn the conference back over to Mr. Ward Nye for closing remarks.

Howard Nye
Howard Nye
Chairman, President, and CEO at Martin Marietta

Abby, thank you. Thank you all for joining today's earnings call. While the unpredictability of policy shifts heightens broader economic uncertainty, we remain confident about Martin Marietta's ability to appropriately navigate these conditions. Since 2010, we've transformed the durability of our portfolio and positioned our business in attractive markets through disciplined execution of our SOAR plans. We built a strong foundation to continue extending Martin Marietta's long track record of delivering sustainable growth and superior value creation for investors for years to come. We look forward to sharing our second quarter 2025 results in the summer. As always, we're available for any follow-up questions. Again, thank you for your time and continued support of Martin Marietta.

Operator

Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.

Analysts
    • Garik Shmois
      Managing Director at Loop Capital
    • Anthony Pettinari
      Managing Director and Senior Equity Analyst at Citi
    • Tyler Brown
      Associate VP at Raymond James
    • Keith Hughes
      Managing Director and Senior Equity Analyst at Truist Securities
    • Jerry Revich
      Managing Director and Senior Equity Research Analyst at Goldman Sachs
    • Timna Tanners
      Managing Director at Wolfe Research
    • Michael Dudas
      Partner and Senior Equity Research Analyst at Vertical Research
    • Howard Nye
      Chairman, President, and CEO at Martin Marietta
    • Adam Thalhimer
      Director of Research at Thompson Davis
    • David Macgregor
      President and Senior Analyst at Longbow Research
    • Jacklyn Rooker
      Director of Investor Relations at Martin Marietta
    • Kathryn Thompson
      Research Analyst at Thompson Research Group
    • Brent Thielman
      Equity Research Analyst at D.A. Davidson
    • Philip Ng
      Managing Director at Jefferies
    • Angel Castillo
      Research Analyst at Morgan Stanley
    • Steven Fisher
      Managing Director and Senior Equity Research Analyst at UBS
    • Robert Cardin
      Interim CFO, Senior VP, and Chief Accounting Officer at Martin Marietta
    • Trey Grooms
      Managing Director at Stephens
    • Andrew Mazur
      Analyst at Stifel
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