Vulcan Materials (VMC) Q4 2025 Earnings Transcript

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Date

Tuesday, Feb. 17, 2026, at 10 a.m. ET

Call Participants

• Chief Executive Officer — Ronnie Pruitt
• Senior Vice President & Chief Financial Officer — Mary Andrews Carlisle
• Vice President, Investor Relations — Mark Warren

Takeaways

• Adjusted EBITDA -- $2.3 billion, reflecting 13% growth, with margin expansion of 160 basis points to 29.3%.
• Aggregate Cash Gross Profit Per Ton -- Achieved $11.33, a 7% increase, reaching management's long-term target range of $11–$12.
• Aggregate Shipments -- Approximately 227 million tons, up 3%; same-store shipments were slightly lower, while growth was acquisition-driven.
• Aggregates Mix-Adjusted Pricing -- Increased 6% for the full year, with a 5% uptick in the fourth quarter.
• Aggregates Units Cash Cost of Sales -- Rose less than 2% during the year, with continued discipline in cost management.
• Operating Cash Flow -- Generated over $1.8 billion, representing a 29% increase.
• Free Cash Flow -- Rose over 40% after $678 million in capital expenditures, benefiting from aggregates performance and recent acquisitions.
• Leverage -- Net debt to adjusted EBITDA ended at 1.8x after redeeming $400 million 2025 notes and repaying $550 million in commercial paper.
• Capital Returns -- Returned $698 million to shareholders through $260 million in dividends and $438 million in share repurchases.
• SG&A Expenses -- Totaled $564 million, representing 7.1% of revenue and improved by 10 basis points versus prior year.
• 2026 Aggregates Shipments Guidance -- Growth projected at 1%–3%.
• 2026 Aggregates Freight-Adjusted Average Selling Price Guidance -- Estimated 4%–6% growth.
• 2026 Aggregates Units Cash Cost of Sales Guidance -- Expected to increase by a low single-digit percentage.
• 2026 Adjusted EBITDA Guidance -- Range of $2.4 billion to $2.6 billion provided.
• 2026 Downstream Segment Cash Gross Profit Guidance -- About $290 million forecast, with roughly 85% from asphalt segment.
• 2026 SG&A Guidance -- $580 million–$590 million expected.
• 2026 Depreciation, Depletion, Amortization, & Accretion Expenses -- Projected at $700 million.
• 2026 Interest Expense and Tax Rate -- Interest at $225 million, effective tax rate of 22%–23%.
• 2026 Capital Expenditures Guidance -- $750 million–$800 million, including $50 million shifted from the prior year for plant rebuilds.
• M&A Outlook -- Management signaled a "very healthy" deal pipeline and expects higher M&A activity focused on aggregates and new geographies.
• IIJA Funding Flow -- Over 50% of IIJA program funds remain to be spent, supporting public-demand visibility into at least 2027.
• Backlog and Large Projects -- Large projects now represent about 45% of bookings, driven by data center and public sector work.
• Mix and Pricing Dynamics -- Management explained that base stone prices on data center projects average $8–$10 below clean stone; mix is a near-term pricing headwind, but margin impact is limited.
• Ready-Mix Asset Divestiture -- All 2026 guidance excludes the pending Bay Area ready-mixed divestiture, resulting in over 10% anticipated same-store growth at guidance midpoint.

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Risks

• Management noted "single-family residential activity was weaker than we initially anticipated," leading to full-year volume and price at the "lower end of our initial expectations."
• Weather disruptions, specifically "early in some of our seasonal markets," and "extremely wet" conditions in Southern California, were cited as drivers of higher costs and muted Q4 EBITDA versus expectations.
• Management warned that housing affordability and high interest rates could continue to limit residential volume recovery and constrain upside in 2026.
• Timing of plant repair and insurance costs led to expense lumpiness in Q4. Management acknowledged these are impacted by weather and cannot be fully normalized.

Summary

Vulcan Materials (NYSE:VMC) reported a year of notable EBITDA and free cash flow growth, fueled primarily by aggregates profitability gains, cost controls, and execution on recent acquisitions. Unlike volume, which was flat on a same-store basis, the company benefited from price increases — although mix from large data center projects tempered average selling price growth and is expected to continue shaping margin outcomes. Management provided strategic clarity by highlighting robust public infrastructure demand, a disciplined M&A outlook, and the exclusion of pending asset divestitures from 2026 guidance. The guidance for 2026 centers on modest overall shipment and EBITDA growth, cost containment, and an increasing share of asphalt profit as mix shifts, underpinned by both resilience to funding uncertainties and a focus on operating leverage.

• Company stated, "over 50% of the funding is yet to be spent and will continue to flow through over the next several years," underscoring multi-year demand tailwinds from public works.
• Public and large private projects, particularly data centers, "sit at about 45% of our bookings," materially influencing backlog mix and shipment timing.
• CFO Carlisle said, "the guide at the midpoint on a same-store basis is really over 10% growth in 2026" after excluding the ready-mix divestiture.
• Ronnie Pruitt communicated that volume improvements continue to be "conservative," given muted single-family demand and backlog composition, despite strong results and opportunities in select geographies.
• The company's discipline in cost control is rooted in the "Vulcan Way of Operating," covering process intelligence, labor management, and plant productivity. This is cited as central to future cost efficiency.

Industry Glossary

• Aggregates Cash Gross Profit Per Ton: A key internal profitability metric calculated as the cash gross profit attributable to the aggregates segment divided by total tons shipped, used to measure operational efficiency and pricing realization.
• Mix-Adjusted Price: Average selling price adjusted to neutralize the effects of changes in geographic, product, and customer mix, enabling direct year-over-year price comparison.
• IIJA: Infrastructure Investment and Jobs Act, a multi-year federal funding program for U.S. infrastructure, impacting aggregates demand in Vulcan’s markets.
• Base Stone: Lower-cost aggregate material primarily used as a foundational layer in construction, contrasted with higher-margin "clean stone" used in later stages or for specific applications.
• Clean Stone: Washed or screened aggregate product, typically higher quality and higher price than base stone, used in concrete or surface applications.
• Backlog: Orders or project commitments that have been booked but not yet shipped, serving as a leading indicator of near-term demand.

Full Conference Call Transcript

Mark Warren: Thank you, operator. With me today are Ronnie Pruitt, Chief Executive Officer, and Mary Andrews Carlisle, Senior Vice President and Chief Financial Officer. Today's call is accompanied by a press release and a supplemental presentation posted to our website vulcanmaterials.com. Please be reminded that today's discussion may include forward-looking statements which are subject to risks and uncertainties. These risks, along with other legal disclaimers, are described in the company's earnings release and in other filings with the Securities and Exchange Commission. Reconciliations of non-GAAP financial measures are defined and reconciled in our earnings release, supplemental presentation, and other SEC filings. During the Q&A, we ask that you limit your participation to one question.

This will allow us to accommodate as many as possible during the time we have available. And with that, I will turn the call over to Ronnie. Thanks, Mark, and thank you all for joining our call this morning. I am honored to be leading this great company.

Ronnie Pruitt: Representing the men and women of Vulcan Materials Company. What an outstanding safety year and delivered another year of robust growth in earnings and cash generation. I am proud of the way our teams executed 2025. Their accomplishments position us well to take advantage of the growth opportunities ahead of us. We are committed to continue to improve our underlying business and expand our industry-leading aggregates franchise both in our current footprint and new geographies. In 2025, we delivered $2,300,000,000 of adjusted EBITDA, a 13% increase over the prior year. Adjusted EBITDA margin expanded 160 basis points to 29.3%.

Importantly, our aggregate cash gross profit per ton grew to $11.33, achieving our previously established target of $11 to $12 and driving operating cash flow of over $1,800,000,000, a 29% increase over the prior year. As expected, aggregates unit profitability continued to expand and public demand continued to grow. However, single-family residential activity was weaker than we initially anticipated, yielding a full-year volume and price at the lower end of our initial expectations. I was pleased with how our operating and sales teams adjusted to a dynamic environment by carefully managing inventories and tightly controlling cost even with several fourth-quarter timing impacts outside of their control.

Our aggregates units cash cost of sales increased less than 2% for the full year. This performance is a great example of the Vulcan Way of Operating at work, allowing us to use our tools and disciplines to remain focused on what we can control. With implementation ongoing, incremental opportunities ahead of us, I am certain VWO will continue to enhance our results. Aggregate shipments of approximately 227 million tons increased 3% for the full year. With growth driven by prior-year acquisitions, same-store aggregate shipments for the full year were slightly lower than the prior year.

In the fourth quarter, aggregate shipments increased 2% compared to the prior year, despite nearly 30% lower shipments in East Tennessee and North Carolina that had outsized shipments in the prior year's fourth quarter as we supported the rebuilding efforts after Hurricane Helene. Aggregates mix-adjusted price improved 6% for the full year and 5% in the fourth quarter. Geographic mix from the acquisitions the prior year elevated shipments in two of our higher-priced markets and a shift in product mix all impacted year-over-year reported pricing in the quarter.

While an acceleration in bookings for large projects with a wide complement of products and a quick conversion to shipments impacted sequential pricing in the fourth quarter, these activity levels bode well for 2026 demand and highlight our position as a supplier of choice on large projects that need to move quickly. Through the combination of our commercial and operational execution throughout 2025, aggregates cash gross profit per ton improved 7% for the year. This performance gives me confidence in our operating and sales team's abilities to continue compounding our industry-leading unit profitability. Now I will turn the call over to Mary Andrews to provide some additional commentary on our 2025 performance.

Mary Andrews Carlisle: Thanks, Ronnie, and good morning.

Our 2025 results are a clear depiction of the powerful combination of our two-pronged approach to growth. Through the continued expansion of our aggregates cash gross profit per ton across the franchise, and the contribution of prior-year strategic acquisitions, we increased our free cash flow by over 40% after reinvesting $678,000,000 of total capital expenditures for operating and maintenance needs and internal growth projects. The strong cash generation allowed us to quickly delever the balance sheet after issuing $2,000,000,000 of new long-term notes in the fourth quarter of last year, positioning us well to capitalize on future growth opportunities. We also returned $260,000,000 to shareholders through our steadily growing dividend and $438,000,000 through share repurchases. At year end, our net debt to adjusted EBITDA leverage was 1.8 times.

In March, we redeemed our 2025 notes at par for $400,000,000 and throughout the second half of the year, we paid down $550,000,000 of commercial paper balances to reduce interest expense while maintaining the flexibility to reissue at any time. SAG expenses for the full year were $564,000,000 and 10 basis points lower than the prior year as a percentage of revenue at 7.1%. We remain pleased with the results our investments in technology and talent are yielding in the business. Through compounding improvements in our business and strategic portfolio optimization, over the last three years, we have improved our adjusted EBITDA margin by over 700 basis points and our return on invested capital by over 200 basis points.

We anticipate further expansion in both metrics with the closing of the pending ready-mix divestiture and attractive profitability improvements in our underlying businesses in 2026 that I will now pass back to Ronnie to highlight.

Ronnie Pruitt: Thanks, Mary Andrews. In 2026, we plan to continue our track record of compounding growth in what we expect to be an improving demand environment. We expect continued growth in public demand will now be complemented by improving private demand, resulting in modest overall growth in 2026. Growing demand is a beneficial backdrop for both the pricing and operating environments. Trailing twelve-month highway starts continue to grow and at three times the rate in Vulcan markets compared to the U.S. overall. IIJA dollars continue to drive increased spending in addition to funding from state DOTs and local initiatives.

While the current highway funding programs authorized by IIJA continue through September, over 50% of the funding is yet to be spent and will continue to flow through over the next several years. Efforts are already underway in Washington for a reauthorization bill. Public non-highway infrastructure investments also continued to grow. Starts in Vulcan markets for water, sewer, and other infrastructure projects increased double digits in 2025, supporting shipments growth in 2026. On the private side, the affordability issue in single-family housing has yet to be resolved but appears to be a priority of the administration.

We expect that residential activity will be limited in 2026, but we will be monitoring closely for any improving opportunities in the second half of the year. While private non-residential activity continues to vary across categories, we are encouraged by the prospects of a return to modest growth in Vulcan served markets in 2026, led by industrial and non-residential categories. Data centers remain the biggest catalyst with over 150,000,000 square feet under construction and another nearly 450,000,000 square feet announced. Over 70% of this activity is occurring within 30 miles of a Vulcan aggregates facility. Our footprint, scale, reliability, and logistics capabilities make us particularly well suited to partner with our customers and serve these fast-moving projects.

Based on the demand expectations I just described, we expect aggregate shipments to grow between 1–3% in 2026. We expect aggregates freight-adjusted average selling prices to increase between 4–6% and aggregates units cash cost of sales to increase by low single-digit percentage. These expectations equate to another year of at least high single-digit expansion of our aggregates cash gross profit per ton, which will drive attractive earnings growth and cash generation. We expect to deliver between $2,400,000,000 and $2,600,000,000 of adjusted EBITDA in 2026. I will now pass to Mary Andrews again to provide a few more details around the 2026 guidance before we take your questions.

Mary Andrews Carlisle: Thanks, Ronnie. To complement the solid aggregates outlook Ronnie just shared with you, we expect our downstream businesses to contribute approximately $290,000,000 in cash gross profit. Roughly 85% of the earnings are expected to be derived from the asphalt segment given our pruned ready-mix footprint. Forecast SAG expenses of between $580,000,000–$590,000,000. We project depreciation, depletion, amortization, and accretion expenses of approximately $700,000,000, interest expense of approximately $225,000,000, and an effective tax rate between 22–23%. Consistent with our initial plans for 2025, we plan to reinvest in our franchise through operating and maintenance and internal growth capital expenditures of $750,000,000 to $800,000,000 in 2026.

This year's CapEx includes approximately $50,000,000 planned spending that shifted from the prior year into 2026 on the large plant rebuild projects underway.

Overall, we expect to deliver another year of expansion in adjusted EBITDA margin, growth in adjusted EBITDA, and attractive cash generation in 2026. Now, Ronnie and I will be happy to take your questions.

Operator: Thank you. Our first question comes from Trey Grooms with Stephens. Your line is open. Please go ahead.

Trey Grooms: Hey, good morning, everyone. So Ronnie, given the 4Q and where it landed and then looking into the guide for this year, it clearly suggests that 4Q 2025 is not the trend. So could you talk about your confidence levels there and the puts and takes around the end-market demand as well as your expectations around pricing and profitability and your outlook there for 2026, please?

Ronnie Pruitt: Yes. Good morning, Trey. Thanks for the question. Let me start with saying the business is executing well and we are in a position to leverage demand growth and, I think, a very healthy pricing environment for 2026. First, on the demand side, public starts remain solid. It is also reflected in the strength of our backlog. And then the other public infrastructure outside of highways is also a really good story for us as we continue to see that in our backlog as well. So overall, we expect really steady growth in the public side. On the private side, let us start with private non-res. We are seeing most of this activity in the industrial categories.

Data centers continue to be a bright spot and we are seeing increasing levels of activities reflected in our bookings as well. Importantly, these data centers projects are quickly converting to shipments, which we also anticipate growth in the power generation side as these data centers continue to get built out. Warehouses, we think they are finding the bottom. We are seeing some potential green shoots in a number of our markets. Now on the residential side, we are expecting the currently soft demand environment to improve somewhat in 2026, but this assumes that we get some help from interest rates and affordability, so we will see how that plays out through the remainder of the year.

So after really three years of muted growth, we expect 2026 to really return to a year of some modest growth, so an improving demand backdrop could provide both help on our cost side as well as even more upside on our pricing. With our Vulcan line of selling disciplines, they are helping us really efficiently manage project leads and maximize pricing as we expect those efforts to continue to be catalysts for pricing and profitability realization. On the fixed plant, price increases have largely been accepted and improved visibility in the private side will help that and also be helpful as we think about mid-years throughout the year.

On the cost side, we are seeing really good traction on the Vulcan Way of Operating disciplines focused on plant production. And these efforts will, along with some volume growth, also be a tailwind to our cost in 2026. So as we look at 2026 as a year of potential growth, we think we are in a really strong position to capture more profitability and really drive that to our cash gross profit.

Mary Andrews Carlisle: Yeah. And Trey, maybe I can just give you a little extra context on the fourth quarter that may be helpful. We obviously had a very solid performance for 2025 overall and knew the fourth quarter would have some unusual year-over-year comparisons. But where we ultimately landed, which I would think about as essentially flat year-over-year on EBITDA, absent the geographic headwind that we had from the prior-year hurricane relief activity. And so, where we landed was really impacted by three main factors that affected both revenue and cost and accounted for really most of the difference between that flat EBITDA and the growth that we anticipated. So primarily, first and foremost, residential activity, which was a challenge for the year, continued to weaken. We also, secondly, had weather.

Winter came early in some of our seasonal markets, and Southern California was just extremely, extremely wet, which is unusual. And then, we also had some incremental costs related to timing on both repairs and insurance costs. So, I think you will see in our 2026 guidance that, as you mentioned, clearly reflects a continuation of the compounding improvements that we expect for our business moving forward.

Trey Grooms: All right. Well, thank you for all the color there. Super helpful. I will pass it on. Thanks, Mary Andrews. Thanks, Ronnie. Have a good day, and take care.

Ronnie Pruitt: You too.

Operator: Thank you. Our next question comes from Tyler Brown with Raymond James. Your line is now open.

Tyler Brown: Hey, good morning.

Ronnie Pruitt: Good morning.

Tyler Brown: Hey, I want to come back to the pricing maybe a little bit different angle. So I appreciate you guys gave the 5% mix-adjusted number. But could you kind of help bridge the three-point difference between what you reported and mix, because it seems like conceptually, you guys really benefited from storm work in high ASP markets last year that did not reoccur. So geography was definitely working against you. It sounds like at the same time, you did a lot of quick, call it, book and burn, base and fill work that comes in at a lot lower ASP. So product was a headwind, and then M&A was also a drag.

So it felt like kind of maybe a triple whammy, if you will. But first, is all that right? And how much did each of those buckets have on the three-point difference? And then secondly, Mary Andrews, just from a shaping perspective, I appreciate the 4–6% pricing, but should we expect to be on the low end early in the year and maybe higher later? Just I assume some of these mix headwinds will persist. Sorry for the long question there.

Mary Andrews Carlisle: Yeah. No worries. First, you do have the triple whammy as you called it right as it relates to the mix impacts on pricing in the fourth quarter. The 300 basis points was about two-thirds the geographic mix from the strong shipments last year in those profitable markets. And then, I would say the other third was about fifty-fifty continued impact from the acquisitions, which was actually lower in the fourth quarter than the full-year 100 basis points that we called out and did happen in 2025. And then the other half of that third was the product mix that was really based on those projects.

And, I think you are right to be thinking about pricing in 2026 as probably toward the lower end the first half of the year, moving toward the higher end as the year moves on. And I think that is reflective of the improving demand that we expect to see and just comps from last year. Ronnie may want to comment more on the types of projects that we are shipping on.

Ronnie Pruitt: Yeah, Tyler. I think as we look at going into 2026, one, our backlog and bookings are at a much better spot than they were year-over-year. And so remember, our backlog does not account for 100% of our shipments, but it is typically around 40% to 45% of our forward-looking backlog is what our shipments are going to look like. And so that is a good healthy spot for us to be as we think about demand. And also remember the trends on a lot of these large projects, which we categorize as 25,000 tons and above. Historically, that makes up about 30% of our bookings. Today, it sits at about 45% of our bookings in large projects.

It is really reflective of that data center work. Remember, we talked about these data centers. The first part of them is going to be base and fill, so that is where we are seeing the mix impact. But as those projects continue to mature, then we will see the clean stone and the clean size stones be shipped through the remainder of the project.

So in our 4–6% guide, we anticipate these shipments of these projects being more weighted heavily on the front end for base, but as those projects mature out, and to Mary Andrews’ point, that is why I think the pricing will play out through the year at the lower end of the first of the year and then it will play up at the higher end. Second, when we talk about our fixed plant, we sent out our fixed plant price increases at 2025 for January. And the implementation of those and acceptance of those have gone as expected.

And so I think we are in a healthy position as far as what those increases were accepted and announced first part of the year. And then third, as I continue to think about the steady growth in public, the continued positive improvements on the private non-res side, and then the potential recovery on single-family. And I have talked about this in the past, these improving demand, the backdrop of that is going to be a tailwind for us as we move forward. And so, again, we do not have mid-years baked into these increases or our guidance. We would anticipate definitely going forward with mid-years. And I think that momentum in demand will help us

Tyler Brown: Perfect. Excellent color. Thank you for indulging me. Thank you so much. Thanks. Thank you.

Operator: Thank you. Our next question comes from Anthony Pettinari with Citigroup. Please go ahead.

Foden: Hi, this is Foden on for Anthony. Thanks for taking my question.

Foden: I just wanted to ask, what kind of gives you the confidence that you can kind of keep costs down to low single-digit inflation? Is that sort of what you are seeing in underlying inflation or maybe Vulcan Way of Operating and cost takeout? And then just dovetailing off some earlier mix questions. Is there a mix impact baked into that low single digit from the kind of base stone?

Ronnie Pruitt: Yes. So on the cost side, what gives us confidence on cost is definitely Vulcan Way of Operating. So as I look at where we finished the year up less than 2% for 2025 overall, I think 2025 was a really good year on cost. And we anticipate that to continue. When I look at the maturity of Vulcan Way of Operating, we said we are focused on our 120-plus plants that represent about 75% of our production. So we are very mature on the process intelligence, on our labor scheduling tools, and really on the focus on our critical size production. And where we are going to continue to focus is the development of our people.

So our plant operators are really adapting to using these screens and really driving more efficient production in our plants. But when I look overall, I am very pleased where we are at. I think labor is going to continue to be one that, as labor increases will happen in markets, our ability to control that and our ability to outperform the market with our labor control is going to be critical, and that is a big part of Vulcan Way of Operating. So I am very pleased with that.

And to your point, what we talk about on the mix side with our drag on pricing, the mix is a benefit to us in the way we operate our plants. And so our plants are in a really good shape on yield, the amount of fines that we have, and the way we mine in our pits, we are in a really good position. We have gone through three years of muted demand, and we really have not built any inventory.

And so we have really managed through three years of this muted demand in a way that puts us in a very good position when demand starts to recover, that our costs are going to be just as much of a tailwind as it will be on price.

Foden: Great. Thanks, guys.

Operator: Our next question comes from Kathryn Thompson with Thompson Research Group. Please go ahead.

Kathryn Thompson: Hi, thank you for taking my question today. Focusing on the policy side, with IIJA expiring in September, but states also taking greater control of their own financing destiny, how is the dynamic of the messiness that inevitably happens with the reauthorization bill, how is that baked into your guidance?

And then also perhaps clarify a little bit more how states are taking control for the ones that matter for you. And how are you thinking about that with your public end market? And then one cleanup question, just as we are assuming that the divested assets in the Bay Area are not included in the guide. Thanks so much.

Ronnie Pruitt: Yeah. I will let Mary Andrews talk about the guide on the divested assets. She can give you some color on that. On the public side, I mean, I think we are going into the year with a couple of assumptions. One, that a bill will get done. Will it be on time or will it be in the form of a continuing resolution? Who knows? But historically, we are going to get a bill done. And two, based on historic measures, the bill will always be higher than the previous bill. So we are expecting that. But the good thing for us, Kathryn, is that 50% of the money has yet to be spent.

And so we will see the tail of IIJA continue through 2026 and well into 2027. When I look at our markets and I look at Vulcan served markets, our trailing 12 starts dollars in Vulcan served markets were up 24% year-over-year 2025 versus 2024. And so those dollars are going to be put into work in 2026 as far as the demand for our products. If you go back to the start of IIJA, our markets are up 80% in starts dollars. And so it is a really good tailwind, but we have said the entire time that IIJA would be slow and steady and we continue to see that.

In California, one of our standout markets, highway starts are up 47% in 2025 versus 2024. And so that is another market that we will see 2026 continue to see strong demand from highway dollars being put in place. In the Southeast, we have seen significant jumps in bookings in Alabama and Georgia and South Carolina and Tennessee. And so again, right in the heart of our Southeast group. And I think those dollars are going to continue to be put to work. We have also seen other public works like beach restorations, port renovations, airport projects, those kinds of starts in Vulcan served markets.

Two-thirds of our GM areas, which we have 19 GM areas, so 14 of our 19 GM areas, we are seeing double-digit increases in starts in those other public works. And so I would say public, all things considered, public is probably the most clarity we have, and I think we are very confident in that. And I will let Mary Andrews talk about the modeling on the divested assets.

Mary Andrews Carlisle: Yeah. Kathryn, you are right. The ready-mixed assets we have excluded from the guidance. So I think the best way to think about that is the guide at the midpoint on a same-store basis is really over 10% growth in 2026.

Kathryn Thompson: Okay, great. Thanks so much.

Ronnie Pruitt: Thank you.

Operator: Thank you. We will go next to Angel Castillo with Morgan Stanley. Please go ahead.

Angel Castillo: Thanks and good morning everyone. So you outlined big opportunity from data centers on the slide, and I just wanted to unpack a little bit more, particularly the comments around the base versus clean stone timing. I think the timing of mix drag versus maybe the uplift, as you start to ship more clean stone in the latter stages, makes a lot of sense. But could you maybe talk about this more holistically as to whether a data center project, all-in, is higher or lower margin than a traditional manufacturing project, if you kind of ignore the timing of some of these things?

And then just as we think about data centers being such a big growth factor in the next few years, is the right way to think about the DC opportunity here as perhaps a bit of a drag for price/margins until the number of projects being completed starts to really exceed those starting up? And if so, can you just quantify that? I do not know if I missed this, but how much of a drag that is in your 2026 guide? I am just trying to think about how to model this and how to understand this just given so much growth in this vertical.

Ronnie Pruitt: Yeah. I think you summed it up right. I mean, we look at the continued demand for data centers. You are going to continue to see the mix issues. And so if I would look at base pricing across multiple geographies, and geographies can have a big impact on that as well, but on average, base can sell for $8 to $10 below what our clean stone products are. On a margin basis, it is not that big of an impact. And so I think we will continue to see tailwinds on the cost side as we continue to ship that.

And so a lot of the base shipments that we have had will start to turn into clean stone as we ship those projects as far as what we are shipping in 2025. But I would tell you the opportunities in 2026 will continue to be a lot of base opportunities, which we want to take advantage of. I mean, those are great projects.

They, again, play really well into the shape of our pits, our plants, the productivity of our plants, so I think it is going to continue to play out, but I do think it will be more of a uniform mix as we start to see clean products shipped to those same projects because they are going vertical. And once they start going vertical, that is where the concrete shipments kick in.

Operator: Thank you. Our next question comes from Michael Dudas with Vertical Research. Please go ahead.

Michael Stephan Dudas: Good morning, Mary Andrews, Mark, and Ronnie. Hey. Good morning.

Michael Stephan Dudas: Ronnie, you guys and Mary Andrews have done a great job on the balance sheet. It is below your targets. Maybe you could share your thoughts on, as you come out of the box here, the pipeline for M&A, what your early indications of opportunities are, and you did mention in your, I think, first couple of statements of current and new geographies. Just maybe a little bit more thought on that. I am sure you will be discussing more of that with your Investor Day next month. Thanks.

Ronnie Pruitt: Yes, thank you. If you look back over what we experienced in 2025, I mean, if you remember, we closed two really big deals in 2024. And so 2025 for us was a year of integrating those deals and executing on that. And we also said during times of uncertainty, we saw at the end of 2025 with tariffs and interest rates and those headwinds that both sides, the seller side as well as the buyer side, there was just a pause in a lot of the markets and we did not see a lot of activity in 2025.

As I look at 2026, I do think it is going to be a very active year on the strategy side and the M&A front. And I would tell you for us, what you will see out of Vulcan will be, one, it is going to continue to be aggregates-led. We are going to be very disciplined around that. We are going to continue to look at things within our geography.

But when I say new geographies, we have to be able to expand that footprint because, at the end, if we are going to be that particular on what we want, we have to be able to expand that look and open that market up for some new looks and geographies. And so I would say our pipeline is very healthy. We are in some really good conversations with some potential sellers. Again, it is something we have to be very disciplined in. We do not want to force that. We do not want to end up overpaying for things that we do not have to. So it takes two sides.

But I would anticipate 2026 being a very active year.

Mary Andrews Carlisle: And you are right, Mike, we absolutely have the balance sheet well positioned and the cash generation of this business just positions us very well for the long term to be able to continue to pursue the M&A opportunities that make sense for us.

Michael Stephan Dudas: Excellent. Thank you.

Operator: Thank you. Our next question comes from Timna Tanners with Wells Fargo. Please go ahead.

Timna Tanners: Yes. Hey, good morning. I wanted to dive in a little bit more on your positive private demand view and ask how much of your mix is data centers and what is embedded in your volume forecast for the housing recovery that you mentioned in the second half?

Ronnie Pruitt: So we are anticipating recovery on the single-family side to be really flat. So it will be very slow, and even with some help from interest rates, we will be lagging that. And so as we start to see starts increase on the residential side, I would say we will be several months behind that. And so that will be, if we get some help on affordability through interest rate cuts, that will be definitely second-half cuts. Opportunity for us. And I think that opportunity would come in the form of very geographically driven by where jobs are being created. So markets matter.

That is why I love our footprint, because I think our markets will outperform the rest of the country when it comes to recovery in residential. And then with data centers on the private side, they are a very, very large piece of the private side and what we are seeing on the private non-res recovery, and I would expect that to continue. I think, Timna, what we will start to see as we play this out though is the energy demand that these data centers are creating. So I think we will start to see some energy projects. We are in some talks on those now.

Some of those are included in the data centers as we look at those. So there are some energy pieces of that these data centers are being required to build out, some of their own energy infrastructure. But there are also some other things as far as some LNG projects that are going back. When those things kick in, they are very heavily aggregate intensive. But we also have some $6,000,000,000 Eli Lilly project here in Alabama that is kicking off. And so we have got some other things on the private non-res side that are going to be kicking in. But I would say at the start of the year, they are still very heavily weighted towards data centers.

And I think other types of manufacturing will kick in as we go throughout the year. But that is what gives us confidence in really returning to growth: our bookings pace is really strong. Those forward-looking indicators will start to improve.

Timna Tanners: Okay. Did you have the percentage of your mix that is data centers for us, please?

Ronnie Pruitt: Yes. I mean, we do not break that out in our backlog just because it gets too wonky when it comes to the differences in those mixes. But it is, I would just tell you, heavily influenced by data centers as of today.

Timna Tanners: Okay. Thank you again.

Operator: Thank you. Our next question comes from Garik Shmois with Loop Capital.

Garik Shmois: Hi, thanks. Ronnie, you mentioned a couple of times about midyear price increases, recognizing it is not in your guidance, but what kind of demand do you need to see, whether it is big picture or in a local market, to start thinking about implementing midyear price increases?

Ronnie Pruitt: Yes. I think it is twofold there. I think it is some visibility into demand improving, but when we talk about mid-years, I mean, it is really talking about mid-years, two sides of our business. On the fixed plant side, it is talking about the concrete side of our business as well as the asphalt side of our business. I would single out that on the concrete side of our business, we need to see some recovery on single-family. Our concrete customers have had a lot of pressure on them around the muted demand on single-family.

And so that side of it, that visibility into some help on affordability, some help with relief on the interest rates, gives us some tailwinds on midyear with the concrete side of our business. On the asphalt side, it really is more of the public and private non-res continuing. So we have seen great momentum there. And so I would say as we go into the year, I think we are in a good position. I would say we are in a better position in 2026 for the success of those mid-years than we were as we looked at how 2025 developed. So I think it is a combination of both single-family and public.

But single-family will be weighted more towards the concrete side of our business and the public will be weighted more towards the asphalt side of our business. Sounds good. Thank you. Thank you.

Operator: Thank you. Our next question comes from Adam Thalhimer with Thompson Davis.

Adam Thalhimer: Hey, good morning, guys. Hey, I was hoping you could comment on the cadence of EBITDA this year, and I am curious if we should bake in another EBITDA decline in Q1 followed by strengthening as the year goes on? Or if you actually see the year starting off faster than that.

Mary Andrews Carlisle: Yeah, Adam. I will start on that one. I think the best way to think about 2026 EBITDA would be to think about seasonality and not year-over-year comparisons. And so if you think about normal seasonality to spread EBITDA in 2026, the year-over-year comp, as you referenced, will look different in the first half versus the second half, but I think that is the best way to go about it. Okay. Thanks.

Operator: Our next question comes from David MacGregor with Longbow Research. Please go ahead.

David Sutherland MacGregor: Yes. Good morning, everyone. I guess my question is on price/cost. And in the guide, you were very specific about your price assumptions, characterized cost as up low single digits. So it seems like maybe there is still some uncertainty there with respect to your perspective on cost. And so I guess I was just going to get you to walk through what are the biggest sources of uncertainty for you within your cost structure as you look forward into 2026?

Ronnie Pruitt: Yes. I think we are confident in that low single digit, which is kind of how 2025 played out. And so I think the things we can control when we talk about our labor, our energy, our fuel, I think we have got a lot of visibility into that. I think we have a lot of confidence in that. And I think the rest of the pieces are really tied to continued performance on the demand side of our business.

And so, again, when you think about three years of downward or muted demand in our markets, our ability to control, even with the variability of our cost structure, falling volumes is a tough headwind to continue to drive lower cost in an inflationary environment. So I look at it overall, and I think we are in a really good position as far as Vulcan Way of Operating and the things we are focused on, and our men and women out there every day show up dedicated to continue to drive efficiencies and continuous improvement in all of our operations. And so I am excited about that.

And I think we have a good runway ahead of us as markets continue to improve, and demand again will give us as much tailwind on cost as it will on price. And so I think we are in a good position and I am confident in our ability to deliver that.

Mary Andrews Carlisle: Yeah. And importantly, that price/cost spread that we expect to deliver another year of cash gross profit per ton growth at the high single-digit percentage level. So another demonstration of the way the business continues to compound.

David Sutherland MacGregor: Great. Thank you.

Operator: Thank you. We will go next to Steven Fisher with UBS. Please go ahead.

Steven Michael Fisher: Thanks. Good morning. It sounds like you have a bigger mix of larger projects in backlog this year. Just curious what you are seeing in terms of project delays. Has anything been delayed in, say, the fourth quarter relative to the start timing that you were expecting? And have you baked those further or any further delays into your guidance in 2026? I know we are hearing that labor is a real issue. And I just want to make sure we are not going to be surprised by any sort of further delays on projects.

Ronnie Pruitt: No. I think it is a mix. I would tell you, as we look at our bookings in those large projects, one, there is a mix between private side as far as the data center work and then the public side with highways. And I would really tell you it is the tale of kind of two different stories. On the private side, the data center stuff is actually moving faster. And so our times from bookings to actual shipments has accelerated on that side. On the public side, it has been a mix.

I mean, it really is very geographic depending on weather impact and other things as far as playing with the DOTs and, throughout the evolution of IIJA, we saw a very slow kickoff. I do think as it has become more mature, those dollars are being put to work. Time from booking to actually shipping has become more of a normal pace back to about a six-month time frame from the time we book to the time we ship. Public sometimes can drag out a little longer than that. But as we go into 2026, I do not anticipate the timing of those to be impacted by anything. We think they will be back to kind of a normal flow.

Steven Michael Fisher: Thank you very much. Thank you.

Operator: Thank you. Our next question comes from Ivan Yi with Wolfe Research.

Ivan Yi: Hey, good morning. Thanks for the time. You guided to 2% aggregate volume growth this year, and that is the same as Martin. But looking at the contract award data, you seem to have a more favorable geography with greater exposure to California, Georgia, Tennessee, and some other states. So I guess I am just wondering why your volume guidance is not a little bit higher than that 2%? Thank you.

Ronnie Pruitt: Yes. I think coming off of three years of down volume and what we have seen as far as conversion of the bookings to shipments. I mean, like I said, our backlog is in a really good spot, but that backlog, again, only represents about 40% to 45% of our shipments. And if you look at the balance of it, it is kind of fifty-fifty between public and private. And so we really just need single-family to recover. And until we continue to see some relief on affordability and interest rates, I do not think we want to get out ahead of ourselves in thinking that demand can get back to anything really good. Single-family just has to kick in.

And so we are going to continue to be very conservative as we look at that.

Operator: Thank you. And we will go next to Brent Thielman with Stifel. Your line is open. Please go ahead.

Brent Thielman: Yes, thanks. Good morning, everybody. Appreciate you taking the question. You mentioned in some of your comments some repairs and insurance costs that impacted the quarter. I think you also mentioned some plant rebuilds. Can you size the impact from some of these costs that you had mentioned that impacted the quarter? Should we be thinking about these as more one-time or ongoing? And then is there any reason to think that some of these costs linger into the first quarter? Thanks.

Ronnie Pruitt: Yes. Let me start. I will turn it over to Mary Andrews, and she will give you a little more color on some of the numbers. But as you think about how the year played out in 2025, I mean, we went into 2025 saying we would anticipate low single-digit increases in cost. We finished the year at less than 2%. Now as we started 2025, we had a lot of weather impact at the first part of the year. Seasonality as far as really the first two quarters were tremendously impacted. And so a lot of the work, when we talk about project work, those are expenses that we are doing within our plants.

It just got pushed throughout the year. And even in the third quarter of last year, we said do not measure cost with one quarter because it can be so lumpy. That is how the year played out. And so I think as we go into 2026, we plan these things out based on we would love for everything to be very uniform and like we spend the same amount every month. That is the way we would love to plan it out, but, unfortunately, it is an outdoor sport. And weather does impact that and weather does impact the timing of those.

As far as the plant rebuilds, we call those out because we have several rebuilds going on, large projects. But they are all accounted for in both our cost as well as our CapEx plan for 2026. So I think we have really good visibility there that gives us a lot of confidence. Anything, Mary Andrews, you want to add on the lumpiness of that?

Mary Andrews Carlisle: No. I would say, as we called out, really timing. Our 2026 guidance includes what we anticipate for this year. If you do think about the fourth quarter, I would think about it being kind of fifty-fifty revenue and cost in terms of where we landed versus expectations. And the majority of that cost was related to those timing issues that Ronnie described.

Brent Thielman: Very helpful color. Thank you.

Ronnie Pruitt: Thank you, Brent.

Operator: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to CEO, Ronnie Pruitt.

Ronnie Pruitt: Thank you, operator. As I said at the start, I am honored to be leading the men and women of Vulcan Materials Company to continue a track record of creating value for all of our stakeholders. When I reflect back on just four and a half years ago when I had the opportunity to join this organization, our trailing twelve months aggregate cash gross profit per ton was $7.33. In 2025, it was $4 or 55% higher and within the range of our long-term range that we set of $11 to $12 that we provided at our last Investor Day in 2022.

We look forward to sharing with you our plans, continuous improvements, and future growth at our upcoming 2026 Investor Day next month. Again, thank you all for your interest in Vulcan Materials Company.

Operator: Thank you.

Operator: This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

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