Vulcan(US:VMC)2025-04-30 16:23PART I FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Vulcan Materials Company for Q1 2025, including Balance Sheets, Statements of Comprehensive Income, and Statements of Cash Flows, with detailed notes Condensed Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $16.71 billion, total liabilities decreased to $8.55 billion due to debt repayment, and total equity slightly increased to $8.16 billion Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $1,925.9 | $2,265.7 | | Cash and cash equivalents | $181.3 | $559.7 | | Total Assets | $16,712.1 | $17,104.8 | | Total Current Liabilities | $796.9 | $1,239.1 | | Current maturities of long-term debt | $0.5 | $400.5 | | Total Liabilities | $8,553.6 | $8,962.3 | | Total Equity | $8,158.5 | $8,142.5 | Condensed Consolidated Statements of Comprehensive Income For the three months ended March 31, Q1 2025, total revenues increased 5.7% year-over-year to $1.63 billion, with net earnings attributable to Vulcan rising 25.5% to $128.9 million, resulting in a diluted EPS of $0.97 Q1 2025 vs Q1 2024 Income Statement (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenues | $1,634.6 | $1,545.7 | | Gross profit | $365.3 | $304.9 | | Operating earnings | $226.4 | $172.9 | | Net earnings attributable to Vulcan | $128.9 | $102.7 | | Diluted EPS | $0.97 | $0.77 | Condensed Consolidated Statements of Cash Flows For the first three months of Q1 2025, net cash provided by operating activities increased to $251.5 million, while net cash used for financing activities was $532.9 million, primarily for $400.4 million debt repayment and $66.0 million in dividends, resulting in a net decrease in cash of $407.9 million Q1 2025 vs Q1 2024 Cash Flow Summary (in millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $251.5 | $173.4 | | Net cash used for investing activities | $(126.5) | $(163.8) | | Net cash used for financing activities | $(532.9) | $(658.7) | | Net decrease in cash | $(407.9) | $(649.1) | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations of the accounting policies and financial data presented in the unaudited condensed consolidated financial statements, covering revenue recognition, debt structure, leases, segment performance, legal contingencies, acquisitions, and goodwill Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's Q1 2025 operating earnings and margin expansion, driven by the aggregates business, reaffirms the full-year outlook, analyzes liquidity and capital resources, reconciles non-GAAP measures, and addresses inflationary pressures and challenges in Mexico Executive Summary The company reported strong Q1 2025 results with a 27% increase in Adjusted EBITDA and a 420 basis point margin expansion, driven by a 19% improvement in Aggregates gross profit per ton, returned $104.1 million to shareholders, redeemed $400 million in notes, and reiterated its full-year Adjusted EBITDA outlook of $2,350 million to $2,550 million Q1 2025 Financial Highlights vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1,634.6M | $1,545.7M | +6% | | Gross Profit | $365.3M | $304.9M | +20% | | Operating Earnings | $226.4M | $172.9M | +31% | | Adjusted EBITDA | $410.9M | $323.5M | +27% | | Diluted EPS (Continuing Ops) | $0.98 | $0.78 | +25.6% | - The company reaffirmed its full-year 2025 outlook for Adjusted EBITDA to be between $2,350 million and $2,550 million119 - Returned $104.1 million to shareholders in Q1 2025, consisting of $66.0 million in dividends and $38.1 million in share repurchases115120 Results of Operations Q1 2025 total revenues increased 6% year-over-year to $1.63 billion, primarily driven by the Aggregates segment, which saw gross profit up 18% to $357.3 million and gross profit per ton up 19% to $7.48, benefiting from a 7.0% increase in freight-adjusted selling prices - Aggregates segment gross profit increased by 18% to $357.3 million, with gross profit per ton rising 19% to $7.48126 - Aggregates freight-adjusted selling prices increased 7.0% year-over-year, while shipments saw a slight decrease of 1%127128 - Concrete segment gross profit improved by $6.3 million to $3.2 million, while Asphalt segment gross profit was flat at $4.8 million124129130 Known Trends or Uncertainties The company identifies ongoing inflationary pressures, labor constraints, and the impact of global trade policies as key uncertainties, with a significant risk from adverse actions by the Mexican government which shut down the Calica operations and declared the property a "Natural Protected Area" - The company is facing adverse actions from the Mexican government, which has shut down its Calica operations and declared the property a "Natural Protected Area," prohibiting material extraction139 - The company is pursuing a claim against Mexico under NAFTA, with a decision from the arbitration tribunal expected during 202577139 - Ongoing risks include inflationary pressures, labor constraints, and uncertainty from global trade policies which may impact shipment volumes137138 Reconciliation of Non-GAAP Financial Measures This section provides detailed reconciliations for key non-GAAP metrics used by management, including Aggregates Segment Freight-Adjusted Revenues, Cash Gross Profit, EBITDA and Adjusted EBITDA, Adjusted Diluted EPS, Net Debt to Adjusted EBITDA, and Return on Invested Capital, to offer a clearer view of operating performance by excluding certain non-cash or non-recurring items Adjusted EBITDA Reconciliation (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net earnings attributable to Vulcan | $128.9 | $102.7 | | Income tax expense | $33.4 | $28.3 | | Interest expense, net | $59.7 | $39.1 | | DDA&A | $186.4 | $150.9 | | EBITDA | $408.4 | $321.0 | | Adjustments (Discontinued ops, etc.) | $2.5 | $2.5 | | Adjusted EBITDA | $410.9 | $323.5 | Aggregates Cash Gross Profit per Ton | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross profit per ton | $7.48 | $6.30 | | Cash gross profit per ton | $10.63 | $8.86 | Liquidity and Financial Resources The company maintains a strong liquidity position with primary sources from operating cash flow, a $1.6 billion line of credit, and a commercial paper program, having redeemed $400 million in senior notes in Q1 2025, bringing its total debt to $4.9 billion, with a total debt to trailing-twelve months Adjusted EBITDA ratio of 2.3 times - Primary liquidity sources are operating cash flow, a $1.6 billion commercial paper program, and a $1.6 billion unsecured line of credit maturing in November 2029148156157 - In March 2025, the company redeemed $400.0 million of senior notes due April 2025 using cash on hand159 Key Debt Metrics (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Total Debt | $4,908.4 million | | Total Debt as a % of Total Capital | 37.6% | | Total Debt to TTM Adjusted EBITDA | 2.3x | | Net Debt to TTM Adjusted EBITDA | 2.2x | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks, primarily interest rate risk on its debt and economic risks related to its pension and postretirement benefit plans, with 89% of its debt being fixed-rate as of March 31, 2025 - The company's primary market risks are interest rate fluctuations and economic factors affecting pension plan assets and liabilities180183 - A 1% decline in interest rates would increase the fair value of its debt by an estimated $395.7 million as of March 31, 2025182 Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, following the replacement of its financial consolidation system in Q1 2025 and ongoing implementation of a new enterprise performance management system and integration of internal controls for recently acquired businesses - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025183 - In Q1 2025, the company replaced its legacy financial consolidation system and is implementing a new enterprise performance management system, expected to be complete in Q4 2025184 PART II OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 8 of the unaudited condensed consolidated financial statements for a detailed discussion of recent developments in the company's legal proceedings - For updates on legal proceedings, the report directs readers to Note 8 of the financial statements187 Item 1A. Risk Factors The company states that there were no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the company's risk factors since the last Annual Report on Form 10-K188 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the first quarter of Q1 2025, the company repurchased 170,000 shares of its common stock for a total of $38.1 million, at an average price of $224.36 per share, with 6,647,118 shares remaining available for purchase under the current board authorization, and no unregistered sales of equity securities Q1 2025 Share Repurchases | Metric | Value | | :--- | :--- | | Total Shares Purchased | 170,000 | | Average Price Paid Per Share | $224.36 | | Total Purchase Price | $38.1 million | - As of March 31, 2025, 6,647,118 shares may still be purchased under the existing board authorization190 Item 4. Mine Safety Disclosures Information regarding mine safety violations and other regulatory matters as required by the Dodd-Frank Act is included in Exhibit 95 of this report - Mine safety disclosures are provided in Exhibit 95 of the Form 10-Q191 Item 5. Other Information The company reports that none of its Section 16 officers or directors adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the first quarter of Q1 2025 - No Section 16 officers or directors adopted or terminated a Rule 10b5-1 trading plan in Q1 2025192 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications (Exhibits 31, 32), mine safety disclosures (Exhibit 95), and financial statements formatted in iXBRL (Exhibit 101) - Lists required exhibits, including Sarbanes-Oxley certifications, MSHA citations, and iXBRL data files194