Midyear Pricing Outlook
Q: What's the outlook for midyear pricing increases?
A: Fundamentals in pricing remain very strong, with Q1 prices up a little over 10% across every market, supporting full-year guidance. Midyear price increases are not yet included in guidance; discussions are ongoing, and it's too early to call. Midyears will benefit 2024 and even more so 2025. We'll revisit pricing guidance in August. -

Cost Trends and Margin Outlook
Q: How are costs trending among major categories, and how does this affect margins?
A: First-quarter costs are always tricky due to volumes and weather, but we're comfortable with our cost guidance of up mid-single digits for the full year. Over the past year, cost increases have decelerated from mid-teens to single digits on a trailing 12-month basis. We expect this deceleration to continue, helping improve margins. Diesel was a slight tailwind in the quarter; parts and services remain elevated but are easing. We're improving operating efficiencies to offset costs. -

Cash Gross Profit per Ton
Q: How do you see cash gross profit per ton progressing this year and longer term?
A: We achieved a 10% improvement in cash gross profit per ton in Q1. As we progress through the year, decelerating cost increases and improved operating efficiencies will support further margin expansion, aiming for mid-teens improvement for the full year. Long term, our Vulcan Way of Selling and Operating disciplines secure consistent improvements in cash gross profit per ton, which we've achieved quarterly over the past five years. -

Demand Outlook
Q: What is the demand outlook for the rest of the year?
A: Q1 volumes were as expected despite weather issues. For the year, we maintain our guidance of flat to down volumes, with headwinds in nonresidential and challenges in multifamily housing. However, single-family construction is recovering, and public demand is growing. Our strong position in the Southeast, the healthiest market in the country, supports our confidence in the volume outlook. -

M&A Activity
Q: Can you provide more color on recent acquisitions and M&A outlook?
A: We completed a small but strategic bolt-on acquisition northeast of Birmingham, adding about 2 million tons of aggregates and nearly 0.5 million tons of asphalt. It fits us well. Looking ahead, the M&A outlook over the next 12 months is quite good; we're engaged in many conversations and expect it to be a busy year, focusing on aggregates-led deals conducted with discipline. -

Impact of Election Year
Q: Does the election year affect project acceleration or slowdowns, particularly in public sector spending?
A: We don't see any impact from the election year on our demand. Our guidance accounts for relevant factors, and the election doesn't move the needle. DOTs are working to get highway dollars into projects, and we expect mid-single-digit growth in public demand. Challenges remain in nonresidential and multifamily, but single-family housing is recovering well. -

Government Infrastructure Spending
Q: How are government infrastructure dollars flowing through, and are you seeing evidence of larger projects?
A: We're seeing IIJA funds and local dollars flow into project lettings, supporting mid-single-digit growth in the public sector this year and steady growth for years to come. Additional state funding—Tennessee added $3 billion, Florida $4 billion, and Georgia $1.5 billion—bolsters public demand. Data centers provide opportunities but are a small percentage of total nonresidential construction. Overall, nonresidential is playing out as expected. -

Plant Productivity Initiatives
Q: How is the implementation of plant productivity initiatives progressing?
A: We've implemented process intelligence tools in our top 100 plants, covering about 7% of production. About 25–30% of these plants are fully utilizing the tools. We're making progress and expect full implementation perhaps by early next year. As implementation progresses, we expect to see improvements reflected in our numbers in 2024, 2025, and into 2026. -

Private Construction Demand
Q: Are you seeing incremental weakness or strength in private construction demand?
A: In nonresidential, there's weakness in warehouses and traditional light nonresidential, but the decline in warehouse starts is decelerating. We see strength in large manufacturing projects—we're shipping on 11 major projects now, with more to come. In housing, multifamily remains weak but should recover by 2025. Single-family residential is recovering with momentum. -

Regional Pricing Dynamics
Q: Do you see pricing dynamics improving in the Southeast and California?
A: The Southeast has very strong pricing—some of the best we have. In the western U.S., including California, we're seeing marked improvement in pricing, and we expect that momentum to continue. -

Midyear Pricing Discussions Timing
Q: Have midyear pricing discussions been delayed due to weather or other factors?
A: Weather hasn't affected midyear pricing discussions. The process is on schedule: we send letters in April, have conversations in May, and finalize by late May or early June. We're encouraged by the conversations and expect to implement solid midyear price increases. No significant regional pricing differences from expectations. -

IIJA Funding Alignment with States
Q: How does IIJA funding match up with DOT budgets in your key states?
A: A significant portion of IIJA dollars is going to Vulcan states, including major DOTs like Caltrans in California, TxDOT in Texas, Georgia DOT, and Virginia. Texas is effective in getting funds out due to early state funding. Georgia is catching up; California is doing well; Illinois has faced some challenges. Overall, lettings are improving, and we expect funding levels to increase as we move into 2025 budgeting. Public infrastructure, including ports, airports, water, and sewage, will see substantial growth this year and beyond. -

Interest Rates and Pricing
Q: Are higher interest rates and weaknesses in nonresidential impacting your midyear pricing discussions?
A: We're seeing improvement in single-family residential, which helps. The key factor is strong public demand, providing a solid foundation for pricing. Interest rates have impacted demand and volumes but not significantly affected pricing. We feel good about midyear pricing at this point. -

Pricing Cadence
Q: How do you expect the pricing cadence to play out this year?
A: We expect some sequential growth in pricing in the second quarter, more in the third quarter, and typically less in the fourth quarter due to seasonality. The magnitude of midyear price increases is too early to call but will influence third-quarter improvement and overall results. -

Starting Point for 2025 Pricing
Q: Does current pricing suggest a high single-digit starting point for 2025?
A: It's early to predict 2025 pricing. We're focusing on midyear price increases and are encouraged by current discussions. Midyears will positively impact 2025 pricing, but we'll have a better view once midyears are implemented. -