J. Thomas Hill
Chairman of the Board, President, and Chief Executive Officer at Vulcan Materials
Thank you, Mark, and thanks, all of you, for joining our call this morning. Vulcan Materials is well-positioned to deliver attractive growth in 2023. We got off to a solid start in the first quarter and now expect to deliver between $1.85 billion and $1.95 billion in adjusted EBITDA this year, a 14% to 20% improvement versus the prior year. In the quarter, we generated $338 million of adjusted EBITDA, a 15% percent improvement over the prior year. Despite lower volumes in each of our major product lines, total gross profit improved 12%, and gross margin expanded by 90 basis points. I'm pleased with our team's execution as they remain focused on our Vulcan way of selling and Vulcan way of operating disciplines. The pricing environment is healthy. Year-over-year, adjusted average price improved 19% in the quarter. Prices also improved in our downstream products by 15% in asphalt and 12% in concrete. As always, we are focused on capitalizing on pricing momentum and controlling costs to expand our margins.
In the aggregates segment, gross margin improved by 170 basis points. Shipments declined 2% versus the prior year with wide variations across markets. Some areas benefited from favorable weather and carryover shipments from the wet fourth quarter. Others like California and Texas were challenged by excessive rainfall. All geographies delivered double-digit price improvement. And importantly, our cash gross profit per ton improved by 23% in the quarter, surpassing $8 per ton on a trailing 12-month basis. In asphalt, gross margins improved by 220 basis points despite higher natural gas and liquid asphalt costs, and 11% lower volumes. Significant rainfall negatively impacted shipments in California and Arizona, our largest asphalt markets. Prices improved by 15% and more than offset higher raw materials costs. Cash unit profitability in asphalt improved by 9% in the quarter.
The concrete segment's cash gross profit was negatively impacted by the 2022 divestiture of our New York, New Jersey, and Pennsylvania operations, as well as weather-impacted volume in Texas and California, and the resulting cost challenges.
Now shifting to the dynamic demand environment, which remains mixed both in terms of end uses and timing. We continue to expect modest growth in overall public demand but contraction in private demand. While single-family housing starts continue to fall, some markets have begun to show early signs of decelerating declines. Multi-family housing starts have recently turned negative, however, they remain at high levels, particularly in Vulcan markets, and continued to dampen some of the impact of single-family weakness.
Affordability is the fundamental driver of declines in single-family activity. Low inventories, favorable demographic trends, and employment growth in our markets continue to support demand for new residential construction. While the pipeline of private nonresidential projects remain supportive of near-term demand, starts have eased in recent months. A positive trend nonresidential construction activity is the increasingly broad-based composition of starts. Industrial and manufacturing projects now account for more than 60% of stores. Recent trends in supply chain management, onshoring, and clean energy investments are among the catalysts for this shift in the drivers of nonresidential construction. Our geography and service capabilities enable us to capitalize on these large projects. We have booked and are currently shipping to a number of these projects in many of our key markets, such as battery plants, electric vehicle manufacturing facilities, LNG facilities, and large warehouse parks.
On the public side, momentum is building with trailing 12-month highway starts now exceeding $100 billion. The infrastructure investment in jobs ex-dollars are flowing. The impact of these historic levels of public construction awards on 2023 aggregate shipments will depend upon how quickly starts can turn to shipments. Other infrastructure starts are also growing with trailing 12-month starts up 23%. In addition to significant IIJ funding for water, energy, ports, and airports, strong state and municipal revenue support non-highway infrastructure investment. Overall, 2023 demand for aggregates continues to be [Indecipherable] upon the depth of the decline in residential construction activity and the timing of highway starts converting into aggregate shipments. Our durable aggregates business and best-in-class execution position us well to successfully navigate any shifts in demand.
Now I'll turn the call over to Mary Andrews for some additional commentary on our first quarter performance and update 2023 outlook. Mary Andrews?
