The speaker, Mark Warren, thanks the operator and introduces the participants for the earnings call. He reminds listeners that the discussion may include forward-looking statements and encourages them to refer to the press release and other filings for legal disclaimers and reconciliations. Tom Hill, Chairman and CEO, takes over and highlights the company's achievements in 2023, including surpassing $2 billion in adjusted EBITDA and $9 of aggregate cash gross profit per ton. He emphasizes the company's focus on growth, execution, and value creation for shareholders, and discusses the fourth quarter results, which saw a 27% year-over-year improvement in adjusted EBITDA and margin expansion in all three primary product lines. He also mentions a 90 basis points increase in the trailing 12 months return on invested capital.

In the Aggregates segment, Vulcan's pricing strategy and operating disciplines have resulted in a 21% improvement in cash gross profit per ton over the previous year. This marks the 19th out of 20 quarters of sequential improvement in unit profitability. Aggregate shipments increased by 2% in the fourth quarter, and the average selling price per ton increased by $2.60. While inflationary costs have increased, Vulcan expects to maintain control and see a mid-teens improvement in cash gross profit per ton in 2024. Demand for aggregates is expected to decline moderately, with varying dynamics across different end uses.

The residential sector is in recovery mode, with single-family housing permits and starts increasing. However, there may be a decline in multifamily starts. The demand for housing remains strong due to low inventory levels and favorable demographics. Non-residential construction is expected to decline due to lower warehouse and light commercial activity, but manufacturing projects in Vulcan States continue to drive shipments. On the public side, there is expected to be modest growth in highway and infrastructure projects, with record state budgets and strong upcoming projects in Vulcan States. Overall, the company projects a fourth consecutive year of double-digit growth in adjusted EBITDA.

The company's strong operational and strategic execution in 2023 has set them up for continued growth through disciplined capital allocation and consistent execution. Over the last 10 years, the company has shown significant growth in revenues, EBITDA, free cash flow, and return on invested capital. They have also maintained a strong balance sheet with a low net debt to adjusted EBITDA leverage. The company will continue to optimize their portfolio of assets and focus on improving their return on invested capital. They also plan to invest in organic growth initiatives and technology while maintaining SAG expenses at 7% of revenue.

The company has seen an increase in adjusted EBITDA margin and expects further expansion in 2024. They anticipate contributions from downstream businesses and plan to reinvest in their franchise. The CEO acknowledges the hard work of employees and the company's recognition as one of the top 200 best companies to work for.

In 2024, Vulcan Materials was recognized as one of America's most responsible companies and included in the American Opportunity Index. The company remains focused on safety, business growth, and delivering value to shareholders. The CEO, Tom Hills, and President, Mary Andrews, are confident in continued double-digit growth in pricing due to fundamental changes in the market, increased discipline in price increases, and effective selling strategies.

The speaker, Stanley Elliott, asks about the cost side of the business and how the mid-single digit cost inflation expected in the coming year will affect the company. Tom Hill responds by saying that they are seeing the impact of inflation starting to dampen and expect costs to be highest in the first quarter but then taper off throughout the year due to inflationary pressures and improved operating efficiencies. Kathryn Thompson also asks for more color on the volume guidance and the company's end markets.

In the paragraph, the speaker, Tom Hill, discusses the company's growth rates by end market and clarifies the pricing guidance. He mentions that there will be mid-year price increases, but they will have minimal impact on the overall plan. He also talks about the company's predictions for demand in 2024, with steady growth in highways and non-highway infrastructure, but challenges in the traditional non-residential sector. Single-family projects will be a strength, while multifamily projects will be challenged. Overall, the company expects flat to negative growth in the coming year.

The company is seeing a slow start in January and February, but is still confident in meeting full year guidance. Q1 volumes will be impacted by fewer shipping days in March, but pricing will be strong. The company expects mid-to-high-single-digit growth in cash gross profit per ton in the first quarter and mid-teens improvement for the full year. The company's balance sheet is well positioned to fund capital allocation priorities, including potential M&A growth, with over $900 million in cash and net leverage of one and a half times.

In the fourth quarter, the company saw a significant increase in margins, which exceeded normal seasonality by one point. This was due to improved cost management, and the company expects to continue this trend in the future. Their growth strategy includes organic growth, M&A, and Greenfield projects, with M&A being a bigger focus in 2024.

Tom Hill, CEO of Vulcan Materials, discusses the company's growth outlook and potential for improved costs in the coming quarters. He also addresses their pricing strategy for the year, noting that they may take a more measured approach compared to last year's aggressive start. However, he believes that they are in a good position for pricing due to strong fundamentals and their effective selling methods.

Tom Hill, the speaker, believes that the company's decision to announce mid-year price increases in a few markets and have conversations about it in April, May, and June will help with their pricing strategy. He expects pricing to remain consistent at a low-double-digit range throughout the year, with potential changes after July 1.

Tom Hill, CEO of US Concrete, discusses the company's shipment growth in different segments and its plans for the future. He mentions that he sees all demand growth as positive, regardless of where it comes from. He also notes that there is not a significant difference in pricing between public and private demand, but the visibility and reliability of public demand make it more favorable for pricing. The company recently sold its assets in California, raising a significant amount of funds, and Hill is asked to elaborate on the reasoning behind this move.

The speaker discusses the company's allocation plans for M&A and organic investments, and mentions that the company has a healthy capital position. They expect to see catch up in 2024 after a quiet 2023 due to uncertainty. The rationale for exiting the ready mix assets is to focus on the aggregates business. A question is asked about the company's guidance for aggregates, asphalt, and concrete, which is slightly lower than the previous year.

Tom Hill and Mary Andrews Carlisle discuss the expected performance of the asphalt and ready mix businesses in 2024. They mention that the asphalt business is performing well with a 13% gross margin and that they see flat prices for hot mix offsetting increasing costs for liquid and aggregate. They also mention that the ready mix business is facing challenges in certain markets, but is still expected to advance. They expect a modest decline in same-store volumes and consistent gross margin performance for ready mix in 2024, but also anticipate expansion in cash gross profit margins and per unit profitability in the markets where they have retained their concrete businesses.

During the conference call, Garik Shmois from Loop Capital asked about the company's cost side and the improvements seen since the last call. Tom Hill, the operator, mentioned the Vulcan Way of Operating and its emphasis on technology, training, and throughput improvements. He also stated that the company's goal is to beat inflation, not just live with it. Angel Castillo from Morgan Stanley asked about the company's capital allocation strategy, to which Hill responded that they have the ability to pursue organic and inorganic growth, as well as return capital to shareholders. He also mentioned that they are currently focusing on smaller acquisitions.

Mary Andrews Carlisle discusses the company's financial position and plans for capital allocation in 2024, including potential share buybacks and leveraging opportunities for M&A. The company plans to be disciplined in its decision-making and prioritize reinvesting in the business, growth through M&A and Greenfields, and returning cash to shareholders through sustainable dividends. The company has previously leveraged up outside of its target range but aims to quickly get back within the range of two to two-and-a-half times.

Tom Hill discusses the growth of public infrastructure projects in important states, particularly in the transportation sector. He expects solid growth in highways in 2024 and mid-single-digit growth in 2025, with a slow and steady improvement in demand. He also mentions that the passing of IJ in November 2021 will lead to a ramp up in resources for DOTs. He is confident that CALTRANS will be fine despite some rumblings about funding.

Tom Hill and Mary Andrews from the company addressed the last question from Brent Stillman with D.A. Davidson. Brent asked for clarification on the size of the company's ready mix business and its impact on the company's financials. Tom mentioned that the business has been weak due to interest rates and expects it to remain so in 2023 and 2024. Mary added that the company completed the divestiture of Texas Concrete in November, resulting in a decrease of 4 million cubic yards annually. This puts the company's same-store ready mix business at 4 million cubic yards for 2023.

In the paragraph, the speaker discusses their expectations for the decline in volumes and cash gross profit dollars in 2024, and their focus on improving margin performance for their retained assets. They thank the listeners for their time and remind them to stay safe.

This summary was generated with AI and may contain some inaccuracies.