Now I would like to turn the call over to your host, Mr. Mark Warren, Vice President of Investor Relations for Vulcan Materials. Mr. Warren, you may begin.
Good morning, everyone. With me today are Tom Hill, Chairman and CEO, and Suzanne Wood, Senior Vice President and Chief Financial Officer. Today's call is accompanied by a press release issued this morning and a supplemental presentation posted to our website, vulcanmaterials.com. Additionally, a recording of this call will be available for replay at our website later today. Please be reminded that comments regarding the company's results and projections may include forward-looking statements which are subject to risks and uncertainties. These risks, along with other legal disclaimers, are described in detail in the company's earnings release and in other filings with the Securities and Exchange Commission. You can find a reconciliation of non-GAAP financial measures and other information in both our earnings release and at the end of our supplemental presentation. I will now turn the call over to Tom to begin our prepared remarks. Tom?
Thank you, Mark, and thanks to everyone for joining the call today. We appreciate your interest in Vulcan Materials Company. As you all know, we're living and operating in times that challenge us all, both at work and at home. We hope you and your families are healthy and safe. It's been over two months since our company proactively began taking protective measures to keep our people healthy while continuing to crush rock, service our customers, and run our business. I'd like to begin the call by saying thank you to all of our employees for their patience, their flexibility, and commitment to Vulcan, each other, and to our customers, as well as to our communities. You are doing a great job under difficult circumstances. I am very proud to be part of your team. We had a good first quarter.
It was in line with our expectations, and we didn't experience much disruption other than some wet weather. Before Suzanne goes over the quarterly results, I'd like to talk about the underlying strength of Vulcan's business model, and then I'll speak to how we're proactively responding to the COVID-19 pandemic and to the economic uncertainties that this crisis has created across our economy. First, I want to emphasize that the underlying fundamentals driving our business remain unchanged. Our aggregates-focused business is sound. It's resilient and more adaptable to demand shifts than any other products in our space. We have a strong and stable aggregates franchise that was built over 60 years. As a result, we remain confident about our company with its inherent strengths that will provide long-term stability and growth.
In the near term, however, these are extraordinarily complex and uncertain times that are and will continue to test our resolve and our resilience. Our approach is to identify, prioritize, and to focus on what we can control, and to take appropriate, thoughtful, and decisive actions. At times like these, the ability to make decisions quickly and accurately and to execute effectively is critical. I'd like to highlight a few of the priorities that are top of mind for our management team today. First and foremost, the health and safety of our people are of paramount importance to us. Early on, Vulcan implemented a robust set of COVID-19 protections, precautions, and procedures. We are following the guidance of the CDC and other health organizations to keep us working in the safest environment possible. I'm pleased to tell you it's working. Second, we are focused on our financial position.
We entered this crisis with a strong balance sheet and liquidity. In addition, we have taken prudent steps to further enhance our financial position, including supplementing our existing revolving credit facility with a term loan and reducing our planned capital expenditures for the remainder of 2020. Next, continuous improvement remains vitally important to us. We are utilizing our four strategic initiatives, particularly commercial and operational excellence, to improve our execution capabilities and manage our business more efficiently. Fourth, we are concentrating on real-time communication. This ensures that the management team has immediate insight into what's happening on the ground at our quarries, in our markets, and with our customers. Our top operating and functional team leaders are constantly participating in calls where we are discussing and monitoring the health of our employees, the business, and the impacts from the pandemic.
This allows us to look around corners and quickly adjust our plans, particularly with respect to possible changes in demand or the timing of construction activity. It also helps us to cascade communication to line employees to accelerate the decision-making process and to promote the sharing of best practices, particularly around health and safety. Finally, we're looking ahead and focusing on contingency planning from both the financial and the operational perspective. Now, I already mentioned a couple of proactive steps we took to enhance our already strong financial position. Operationally, each division has developed detailed contingency plans and trigger points to allow us to execute well ahead of the curve, depending on the pandemic's effect on construction activities. These plans include, among many other items, changing our production schedules, project timing, and reducing costs. Certain elements of these plans are already underway, particularly around cost reduction and project timing.
As you can see, we are taking many steps to adapt to the changing environment. We are vigilantly monitoring this evolving situation. Now, I'll describe what we're seeing from a demand and shipment perspective and how that translates to an outlook for the remainder of 2020. During the first quarter, we were designated an essential business. As a result, the shipment activity was good across our markets as customers executed on their backlogs, and we continued to book both private and public projects. These conditions generally continued in April. However, on the private side, we have begun to see some project schedules shift, including some postponements and cancellations. This adds to our uncertainty about near-term demand. We have sufficient backlogs to stay busy, but we cannot control future demand.
Given the lack of visibility as to the duration and impact of the pandemic and to the quickly evolving economic situation, there is just a level of unpredictability with respect to project timing and new construction starts. When we provided our previous guidance, we tried to strike a reasonable and a thoughtful balance between being realistic and being cautious. We now find ourselves in a more dynamic world in which we believe the balance should shift toward a more cautious approach. Therefore, we've decided to withdraw our previous earnings guidance for 2020. We will continue to monitor all aspects of our markets. As more data becomes available and our visibility improves, we'll resume our usual practice of providing guidance. I'll hand the call over to Suzanne for additional comments. Suzanne?
Thanks, Tom, and good morning. I'll cover some highlights from the quarter and also comment on our balance sheet and liquidity position. Adjusted EBITDA for the first quarter grew by 4% to $201 million. This included a foreign currency balance sheet translation loss of $6 million, resulting from the rapid devaluation of the Mexican peso in March. In the aggregate segment, our gross profit improved by 5%. On a per ton basis, that translated to $4.31, or a 6% increase year-over-year. Cash gross profit per ton also increased by 6% in the quarter to $6.02. Given the seasonality of the first quarter, we typically look at cash gross profit on a trailing 12-month basis. That number was $6.82 per ton, an increase of 7%, representing another good step forward on our path to $9.
This quarter's aggregate shipments were 1% lower than Q1 last year, which was a tough comp. You'll recall that the first quarter of 2019 experienced strong year-over-year growth of 13% as a result of delayed shipments from the fourth quarter of 2018. There was also some negative impact from wet weather this year in the Southeast and the Southwest, but California, Florida, Illinois, and Virginia realized solid growth. All of our key markets reported year-over-year price growth up 4.5% on a reported basis and 4.8% on a mix adjusted basis. Unit cost of sales increased by 4%. As expected, we continued to have some impact from higher repairs, maintenance, and stripping. Wet weather inefficiencies also had an impact on the cost profile in certain markets. On the positive side, lower diesel fuel costs benefited the quarter by approximately $3 million. Moving on to our non-aggregate segments, I'll start with asphalt.
Our gross profit this year was a $2 million loss compared to a loss of $3 million last year. Asphalt shipments increased by 2% and prices increased by 5%. In addition, the average unit cost for liquid asphalt was 6% lower than last year's quarter, and this also contributed to the expanding margins. This represented the fourth consecutive quarter of year-over-year profit improvement. The concrete segment also saw better results this year. Gross profit improved by 8% to $9 million, led by a 10% increase in shipments and a 3% increase in average selling prices. SAG expenses declined 4% year-over-year. As a percentage of revenue improved by 90 basis points. This resulted from adjustments to stock-based compensation and earlier implemented cost reductions. Our return on investment continued to improve, increasing by 110 basis points to 13.9% for the trailing 12 months ended March 31.
Consistent with past practice, this has been calculated on an adjusted EBITDA basis. Tom has already commented on our strong balance sheet and liquidity position, which we further enhanced in April with the $750 million term loan. Our available liquidity is now $1.6 billion. This is comprised of the term loan, the undrawn revolving credit facility, and cash on hand. Our debt structure is very good, with a weighted average debt maturity of 14 years and a weighted average interest rate of 4.2%. In terms of leverage, our debt-to-EBITDA ratio on a gross basis was 2.2x , and on a net basis, it was 2.1x . Tom mentioned our contingency planning efforts. A part of these plans relate to our capital expenditures. We have reduced our expected 2020 spend from a total of $475 million to between $275 million and $325 million.
The majority of this amount will be spent on operating and maintenance CapEx, and most of our growth projects will be placed on hold. Our capital allocation priorities remain the same, but in light of the uncertainty created by the pandemic, we are most committed to operating and maintenance CapEx to protect the value of our franchise, dividends, and the overall preservation of our liquidity. From an M&A perspective, our evaluation of opportunities will be even more stringent, and we will remain disciplined in this area. Now I'll turn the call back over to Tom for closing remarks.
Thank you, Suzanne. Before we go to Q&A, I want to take this opportunity to again thank the employees of Vulcan for their hard work and their dedication. They've taken good care of our customers and continue to improve our operating disciplines and efficiencies. Our MSHA/OSHA injury rate this quarter was 0.75 accidents per 200,000 employee hours worked, a 15% decrease from the same quarter last year. Simultaneously, our hardworking teams have followed strict COVID-19 protocols and stayed healthy. Our world-class safety record over the last three years underscores how committed our people are to superior performance in safety and health. Our culture of putting people and safety at the center of our decisions serves our shareholders and our employees well. We are committed to making decisions about our business that will protect the financial health of the business and will ensure strong growth for the long term.
We entered uncertain times in a position of strength. We will exit uncertain times in a position of strength. We'll be happy to take your questions.
At this time, if you would like to ask an audio question, you may do so by pressing star and the number one on your telephone keypad. To remove yourself from the queue at any time, press the pound key. We ask that you limit your participation to one question plus a follow-up. This will allow everyone who wishes this opportunity to participate. One moment for our first question. The first question will come from the line of Stanley Elliott with Stifel.
Hey everyone. Good morning. Thank you guys for taking the call, and good to hear your voices.
Good morning.
Good morning.
Could you all talk, I guess, kind of Tom, high level, obviously plenty of uncertainty in the marketplace? I'd love to get your take on what you're seeing more broadly across the portfolio. Maybe even a little more detail on what you're seeing in trends in April, if you could please.
Sure. I would describe April as a continuation of the first quarter. I think our volumes, we are seeing them shipping kind of as usual. The one exception I'd call out would be in the Bay Area where residential and non-residential construction were not deemed essential. We're seeing that lighten up, though. They've lifted that in Napa, and our customers in that area are telling us that when it lifts, they're ready to go, both in res and non-res. As far as April is concerned, so far so good from a demand perspective. Again, lots of unknowns out there. We've seen some postponements and some delays. We'll see how the rest of the quarter plays out. From a pricing perspective, I would tell you the cadence, again, is much like the first quarter. I don't see a big delta between April and the first three months.
In pricing, the pricing was obviously very good in the quarter. Should we think about the demand piece? Obviously, there's plenty of uncertainty out there. Is it fair to assume that the structures you all have in place, what's being done at the ground level, that maybe there's a little more visibility on the pricing side?
Yeah. I think that the visibility on the pricing side is, particularly with the disciplines that we put in on our commercial excellence piece, is very clear. For the short term, I don't see anything that would throw me off of our cadence in the first four months. Again, so far so good. In the quarter, you saw it, we were at 4.8, mix adjusted. The mix was in the Southeast, where we had a lot of rain. Most all of our January price increases stuck. We have some price increases to fixed plants and ready-mix that go in April. Most of those went through April 1st. There's a few that pushed into May, but they're going to stick. I think prices should hold throughout 2020. I would tell you they'll hold even if you see volume slide a little bit in the second half.
That's one of the unique characteristics about aggregates, and we've seen that prove out over past cycles.
Perfect. I'll pass along. Thanks, guys. Appreciate it.
Thank you.
The next question will come from the line of Kathryn Thompson with Thompson Research.
Hi, thank you for taking my questions today. First for the team, just a bigger picture view, taking a step back. Could you help clarify the differences between Vulcan today versus the Great Recession a little over 10 years ago? In particular, how has end market exposure changed, geographic mix changed, structural cost adjustments, and other important fundamental differences today versus the last downturn? Thank you.
Yeah. Good morning, Kat. Thank you. First of all, from a market perspective, the markets are just fundamentally and structurally different. Actually, they're structurally better. You don't have the overbuilding that we had some 12 years ago. If you look at it from either a res or a non-res perspective, we're still below long-term averages. You've got much better highway funding. Our core states, Vulcan's core states, have made big investments in infrastructure, and we didn't have that 12 years ago. Then the fundamentals are just good. You don't have the overbuilding. You've got extremely low inventories of houses. You've got low interest rates. Just fundamentally, construction demand is in a better position today than it was 12 years ago. From Vulcan's perspective, we're just a very different company. Structurally, our product lines are different. We are uniquely advantaged in the aggregates business.
We don't have any cement. The little bit of ready-mix we have is in great markets. Our balance sheet and liquidity is much better. We started earlier in this to ensure that our unit margins either continues to improve or protect it. Those are those four initiatives that we talked about, the commercial piece, the operating disciplines, logistics, and procurement. As we said last year, those initiatives, which are very much maturing, in good times, will help us grow unit margins. If we get headwinds, it'll protect our unit margins. We're just in a lot better place, and as are the markets.
Yeah, I would just add to that too, Kathryn. From my perspective, when you go through uncertain times like these, having a management team that has a deep knowledge of operations, it's just so important because you have leaders who know how to exercise good judgment and how to make decisions that are right for the business, because it's really about striking an appropriate balance between short-term and long-term decisions. As I think about my colleagues around the table on the senior management team, certainly Tom, Stan Bass, and Tom Baker, these guys were division presidents out in the field in the last great recession running a business. They are absolutely battle tested, and I just think that's very important. They've got the first-hand knowledge from having put together actionable plans to stay ahead of the curve back then, and that experience has been brought forth now.
I think that is something that gives me confidence that we will be in a position to make the right decisions and execute them well. As Tom said, I think while this is a difficult time in many ways, from a structural perspective, we're much better off than we were in the last recession anyway.
That's helpful. The next question is really a comparison, a contrast between two end markets, one that has more visibility versus one that maybe is a little cloudier. Also you cited states that were outperforming overall were Illinois and California. To what extent did public really help to drive demand at those states because they do have more recent structural changes in funding? Then, I guess the contrast against that, help us understand how you're thinking about the non-res end markets. Our contacts aren't seeing a wholesale cancellation of projects, but projects being pushed out in terms of start date. How are you thinking about that non-res exposure? Thank you.
I'll take the non-res first. In the vast majority of our markets, shipments to non-res projects, it just continues to be strong. Our bookings and our backlogs continue to be healthy. Again, the exception we'd call out would be the Bay Area, which we think will hopefully start back up, and we'll get that back on track. I think Houston is a watch for us. We have seen, along the coast, the LNG projects, the ones that are started are going, the ones that had not started are being pushed back. We also see a few other non-res jobs pushed back. Very few cancellations. I can only think of one or two that come to mind. If you talk to our ready-mix customers, they feel good for now. I think they probably have some pause or concerns past getting through the backlog.
There's just a lot of unknowns from a non-res perspective with the impact of COVID-19 on non-res construction. Will work bid, will it continue? So far so good, but we're watching it closely. The highway piece is a strength for us. Currently, the state DOT work is shipping normal. We've got solid backlogs. We continue to have solid bookings. However, most states are projecting, as you guys know, a decline in revenues. AASHTO would tell you that's probably on average 30%. The vast majority of our states have continued construction and maintenance as expected. They expect the lettings for fiscal year 2020 to continue as planned. Exceptions to that would be Pennsylvania, which has halted construction. Kentucky, Mississippi, which have suspended lettings, and then North Carolina, we know came into this year with financial issues, although their legislators are trying to fix that.
The flip side of that is some of our key states, Florida, California, Alabama, Texas, are all accelerating work. That's both efficient and safer. Now, what we know on this is that shipments for now are strong and good. Lettings for the near term, three or four months, are solid. We don't know what the future holds for these DOTs past three or four months out. None of ours have released their budgets for fiscal year 2021. Again, so far so good. We'll watch what happens and hopefully funding will get backstop from the feds from AASHTO, and hopefully the world will start driving again, and we'll see gas taxes pick back up.
Just one quick clarification. Illinois, California, you cited them as seeing increasing demand overall. How much of that was private versus public?
In California, in the first four months, has been good shipments across all four end markets. Illinois is more on the public side, both infrastructure with O'Hare work, toll roads, and then as you know, we've got new funding coming on in Illinois for highways.
Great. Thank you so much.
Thank you.
The next question will come from the line of Anthony Pettinari with Citi.
Good morning.
Morning.
Good morning.
Tom, just a follow-up to that last question on state budgets. You indicated lettings were solid for the next three to four months. From a flow-through perspective, is there a timeframe or a timeline that we need to see federal aid to states to keep the outlook relatively positive in the second half of the year?
Except for maintenance work, which goes very fast, most of those jobs, we tell you that the backlog six to nine months on average before you start shipping them, when you book them and you ship them. Again, they're all over the place. Just as rule of thumb, we would tell you that that backlog ships six to nine months out. Big work, maybe a little longer, but that's kind of rule of thumb.
Okay. That's helpful. You referenced Houston as a watch market. I'm just wondering if you could talk broadly about the impact of maybe lower oil prices to your business, both as maybe a potential modest tailwind from a derivatives raw material perspective, also maybe as a headwind from a demand perspective.
Yeah. Directly, we ship very little to the oil field. It's just not a big play for us. It's not really in our geography, we won't see the direct impact from that. Indirectly, obviously, lower fuel prices will help our aggregates costs. It could help costs from a long-haul freight perspective, whether that's rail, ship, or barge. As I said, we'll continue to watch the impact on Texas volumes, particularly coastal Texas. We're not seeing a lot of that yet, but it's a watch for us.
Okay. That's helpful. I'll turn it over.
Thank you.
Our next question is from the line of Mike Dahl with RBC Capital.
Morning.
Morning.
Thanks for taking my questions.
Sure.
I wanted to follow up on the Q&A or exchange around some of the past cycle comparisons, and I guess specifically thinking about on the private side, you're talking about seeing some non-res projects kind of delayed versus canceled. I'm curious if you go back to last cycle, did the early stages kind of start out like this, and you kind of push out the projects as long as you can before push comes to shove and gets canceled? Or did you see kind of quicker outright cancellations? Trying to draw some comparisons around what to take from initially just seeing a postponement versus cancellation.
I think that it was quicker, you saw more cancellations than postponements. It was more dire. Again, it goes back to the overbuilding. You're not overbuilt right now. If you look at home builders, these markets don't have any inventories. So people want to buy a house, they've got to build them. People are trying to take advantage of the interest rates. On the non-res side, the strengths we're seeing there are data centers, distribution centers, warehouses, online commerce, education, and healthcare. Again, those projects, I'll give you some examples of what's pushed out. We've seen a dorm in a major university push out, a Google project get delayed, some office buildings get delayed, a couple of Carvana facilities we saw get delayed. The only cancellation that I can think of was a Dave & Buster's in Lexington.
Everything else is a postponement, and we'll see. Now, on the res side, we saw people push out new phases of subdivision three or four weeks ago. Now we're seeing them in a number of our markets saying we're going forward with them. It's kind of a mixed bag where people are pausing, and then moving forward, and then pausing, and moving forward.
Okay. That's interesting and helpful. Second question, just on diesel. You noted the $3 million year-on-year improvement in the first quarter, and presumably it would get larger, especially as we work into higher volume or typically higher volume months. I'm curious, I understand that there's no guidance anymore for this year, but can you help us frame up your diesel consumption for last year in ags and all else equal, if you were to assume current diesel pricing on last year's shipments, what type of full-year tailwind would that represent?
Well, last year or trailing 12 months, I think we used about 55, 56 million gallons of diesel fuel. Yes, there is a drop in that, but I think that we can't control the price of diesel, so what we'll always focus on is, and every operator involved would know it, is your tons per gallon of fuel in every plant that we operate, and that's their training, and that's how they look at it. You guys can do the math. We dropped from 226 to 204, and since then it's gone down dramatically. If it was $1, assuming usage is the same, it's $50 million, but again, that's one of those that's not our controllables, and our operators every day look at how they use it.
Okay. Thank you.
Thank you.
Next question is from the line of Trey Grooms with Stephens.
Hi, Trey.
Morning.
Hi, Trey.
Good morning, Suzanne. How are you?
Great. I hope you are.
Doing well. My first question is around the FAST Act. It's expiring in September. I think the prior thought was that we would likely get some sort of a continuing resolution to kind of see us through the election and into next year and maybe revisit. Do you guys think that the current situation changes that at all, and the potential that we may could get something maybe more meaningful than just a CR? How are you thinking about that given a lot of the current health crisis that we're in?
Trey, I'd divide that into three buckets. The first one, and probably the most pressing, is AASHTO's request for $50 billion to backstop the fall in state funding. This really needs to be included in the COVID-19 phase four bill, and hopefully that's going to happen because it's a real need that was the impact of the pandemic. The second bucket of this is, to your point, the FAST Act reauthorization. Prior to COVID-19, there was serious work underway in D.C. on reauthorization. Earlier this year, the Senate EPW committee passed the highway portion of the FAST Act. It was an increase of, I think it was about 25%-26%. Unfortunately, the pandemic interrupted that work. The good news is the pre-work has been done there, so I think I had a good start to it. Again, it's been interrupted.
Remember that if the reauthorization isn't done by September, we will get extensions. We're not going to lose that funding. It won't go down. It'll just be pushed out. It's either flat or, if we were to get it would go up dramatically. The third bucket would be the continuous discussion of a big infrastructure bill. There's been a lot of talk for several quarters about a significant act to address infrastructure. COVID-19 complicates this politically, but this is an opportunity for that, and everybody recognizes the need, both from an infrastructure perspective, but also as a stimulus package. We'll just have to see what happens.
Understood. Okay. I guess the next question may be for Suzanne. It sounds like things are holding in now, but clearly with all the uncertainty, seeing some level of volume declines in aggregates over the next few quarters is not entirely out of the question. In that kind of scenario, I know the long-term goal for incremental margins is 60%. How should we be thinking about the, in the case of lower volume, just kind of the mechanics around decremental margins, in that type of scenario? Assuming that this is somewhat short-lived in duration, if we do come into some type of a downturn.
I'll start off, if you don't mind. I think that's part of the beauty of the aggregates business. A big key to that is, from a margin perspective, is staying ahead of the curve and making sure you know what's going to happen and head it off. We set trigger points in these markets that aren't just volume falling. It's our quoting price, our job bookings, backlog levels, the shipping pace, and that's to all end markets. A big benefit to us is that Commercial Excellence Strategic Agenda, which allows in individual markets for clear metrics that are automated, they're consistent, they're accurate, and they really give us a view to the future before volumes actually fall. At the same time, you look at timing and delays and critical inventory sizes.
I think that the team has done a really good job of putting those contingency plans in place for potential volume swings, and they're detailed by plant and by market, and setting those trigger points. Again, you can take production and aggregates, as you know, up and down very quickly as a mechanical process. Cost is a piece of this, price is a piece of this, but at the end of the day, it's that management of unit margins, and our goal is to maximize those unit margins and live up to our potential. Again, those four strategic initiatives are really going to serve us well in this. As we said, they'll help us grow margins in good times and protect them in bad times. We'll leverage that, and I think we're in a really strong position to protect those unit margins.
Yeah, I agree with Tom. I would just add to that. Look, that's why we got started on these contingency plans very early. We would know exactly what we plan to do well in advance of any volumes beginning to fall. Certainly, as Tom said, we understand how to reduce costs. We want to make sure that we do that sensibly. A large part of our costs are variable. We do have the ability to do that. We want to make sure we do the right things for the business. We do want to protect our unit margin. Certainly, as you've heard us talk about many times, we are well ahead of the industry on those. Our folks in the field understand that well.
You can't always say that history will repeat itself, but just as an indicator of the company's resolve and ability to reduce cost, if you look back to the last recession, when certainly there was a significant decline in volume, our unit margins only went down by about 10%, while volumes declined much more than that. That indicates that there is certainly room for us to manage those margins.
Okay. Understood. Thank you very much, and good luck with the rest of the quarter, and stay safe.
Thank you. You, too.
Thank you. Stay safe.
The next question is from the line of Mike Wood with Nomura Instinet.
Hi, good morning.
Good morning, Mike.
Morning.
Could you give us some color in terms of maybe your top three markets, in terms of how that revenue shortfall in transportation revenues looks compared to that 30% national shortfall per AASHTO?
I don't know that I have those specific numbers. If you look at our top 10 markets, our top 10 states, the top three would be Texas, California, Virginia. All of them have kept their lettings the same through fiscal year 2020. The only one that has not, the one out of the 10 that did not is North Carolina, and we all know what's happening there, and hopefully. They'll get that problem solved. I would tell you that Texas is very healthy based on their current revenues. California continues to be pretty healthy, as does Virginia. The specifics of those top three, I'll have to get back with you.
Okay. I'm curious to get your thoughts in terms of your shipments lag the funding that the states are putting in on the public infrastructure side. Have you looked at in terms of if funding levels drop 10%, 20% from 2019 levels, what that would actually lead to in terms of the drop off in your shipments?
Too early. The short answer is really too early to tell. A lot of moving parts. I think that if you look at those states and where we are and our backlogs, again, those things lag six to nine months. I think this is one of the real unknowns and uncertainties that we'll have to put together of what's it going to mean. I would tell you that our states and the top 10 that we talked about, nine out of those 10 have much better funding. They increased their funding over the last three or four years. The only one that hasn't has been Arizona. We sit in a better place than most, but too early to tell.
Okay, thank you.
Thank you.
The next question is from the line of Seldon Clarke with Deutsche Bank.
Hey, thanks for the question.
Sure.
Hi.
If you just take a step back and think about the business mix from a higher level. You mentioned backlogs or some of the maintenance type work and state lettings, and obviously, you've got some ongoing projects in both the commercial and residential space. When you try to contextualize this internally or when you do your stress tests, what percentage of your revenue mix do you really think is at risk from a macro perspective over the next, let's say, three, six and 12 months?
Again, I'm sorry not to give you a clear answer to that, because I just don't think there is a clear answer right now on it. It's a very dynamic situation. Even today as people start to lift it, we don't know what that means. We don't know on the private side. Again, we continue to see res home builders come back and build subdivisions. We see a few projects here and there postponed in the non-res sector. On the private side, it's really going to depend on, do these postponements get to be meaningful? So far they have not. What we have booked, does it postpone again? Which we have not seen much of that at this point.
Again, so far so good, but I just don't think we have clear information either on the public side or the private side to predict that either short-term or long-term.
Okay. Any color on the states that have looser restrictions in place just to give us a sense of what the continuing business looks like over the next couple of weeks or months?
In general, as we said, both on the public side and the private side, through April, we're shipping as usual. The one exception has been Northern California, actually, just the Bay Area and the seven counties up there. We think that's going to lift, which will give us a boost, hopefully over the next 30, 45 days. It's already started, again, as we said with Napa. At this point, with the shelter-in-place over the last seven or eight weeks, we've not seen a fall off. We would think that as those lift, it would only support the shipments we're seeing today.
Okay. Is there any way to just contextualize what you mean by as normal in April? Whether it relates to comps last year, what type of delayed demand from late 2018 impacted April, or you're talking normal seasonality, or is there anything to help contextualize what April looked like?
What I would tell you is it's fairly normal compared to prior April.
The spillover from fourth quarter of 2018, that was really a first quarter impact last year. That really has no bearing on what we're talking about for April.
Okay. That's helpful. Thank you.
Thank you.
Next question is from the line of Garik Shmois with Loop Capital Markets.
Oh, hey, thanks. Just wondering, just on SAG, how much of the decline in the quarter was a lower share-based comp versus the cost actions you took? How to think about SAG moving forward both in maybe a shorter or longer downturn?
Thank you for the question. Probably three quarters or so, maybe 60%-75% of the amount was share-based comp. That's basically tied to the share price. We'll continue to report on fluctuations there. The other reductions that you saw in the SAG cost, we really teased those a bit in the fourth quarter when we talked about having looked across our corporate and field operational overhead base, and we made some adjustments there really around technology and looking for ways to be more efficient as well as ways from the corporate standpoint to better manage professional services. Therefore, we said back in February that we expected SAG to be lower for the full year, both in absolute dollars and as a percentage of revenue. Certainly, that guidance was lifted as we lifted all the other guidance in the release this morning.
I would say that, as we think about SAG, as we go forward in these times, we're always looking for ways to better leverage the overhead. Just like our operations group have detailed contingency plans by plant, we also have our contingency plans with respect to SAG. As we go forward, we will see which of those contingency plans are executed on the basis of what we see happening in the business.
Okay. Thank you. Follow-up question is, I was curious if you're seeing any impact to your Calica quarry in Cancun, just given some of the shutdowns in various industries in Mexico, and how you're thinking about the long-haul network, just given some of the wash points across the oil markets in the Gulf Coast.
First of all, our people have done a great job keeping each other safe and healthy, both in the quarry and in the shipping lines. We continue to operate in Mexico. We've been deemed an essential business. Just like the U.S., we've implemented solid procedures and protocols to protect our employees. Again, we're still operating, and we're still shipping, and at this point, we don't see any interruptions.
Great. Thank you.
Next question is from the line of Adam Thalhimer with Thompson Davis .
Thanks. Good morning, guys.
Morning.
Hey, good morning.
Tom, what percentage of your shipments come from backlog? If backlog is stable, kind of says to me that shipments could be flattish as we move through the year. I don't know if there's a lot of book and burn work that would come in over the summer to where if that doesn't come in this year, then all of a sudden, you're -10% on volume, something like that.
About 60% of our business is what we call bid work, which is in the backlog, and about 40% of that is large to medium projects. The other 20% is small projects. The smaller projects go faster. The large to medium projects, again, is kind of in that six to nine month timeframe. The other 40% of our work is shipments to fixed asphalt and ready-mix plants. The asphalt will be more driven by the public side. The ready-mix is usually more driven towards the private side. We've got pretty good insight into how we're going to look there.
I would tell you that, as I said earlier, the systems and the procedures and the disciplines that were put in with the Commercial Excellence Initiative some three years ago, and that they've been perfected, actually, that's really gotten pretty accurate, both from a volume perspective and a price perspective. The things we can't control in both of these are projects being delayed or projects being canceled and the unknowns around those.
Okay. What are your thoughts on cash flow this year? With the pull-down in CapEx, you should generate a lot of cash this year. Just curious how you're thinking about deploying that.
To the capital allocation question. Look, our priorities are basically the same as when we've talked to you before. The order of the capital allocation priorities are unchanged. In light of the pandemic uncertainty, I would tell you that we are most committed to operating and maintenance CapEx to protect the value of our franchise and keep all of that in good running order. We're very committed to our dividends and certainly to the overall preservation of liquidity, and you saw us take steps in the quarter to ensure that we not only preserved our liquidity but enhanced it. As we think about growth and M&A, you're right. We did reduce some of the CapEx that we planned to spend on internal growth projects. Those projects are pretty easily turned on and off without a lot of impact on the business.
M&A, we didn't do any in the first quarter. We would continue to evaluate opportunities as they arise, but applying an even more stringent lens to that, just given the current economic environment. We've always been very disciplined there, and certainly, we will remain even more disciplined. At the bottom of the capital allocation priority waterfall are share repurchases. Look, we think share repurchase is an important part of the capital allocation structure. It's part of that for the long term. We did do a little buying very early in the quarter, about $26 million pre-COVID. We're committed in the long term, but I can tell you, in the short term, yeah, probably not. We will focus more on preserving liquidity and the other items I mentioned.
Okay. Great. Thank you, Suzanne.
Sure.
Our next question is from the line of Paul Roger with Exane BNP Paribas.
Morning, Paul.
Yeah, morning, Tom.
Morning.
How is that all? Well, good afternoon from London.
Just a follow-up maybe. I mean, you've talked a bit there about the cash flow. Maybe I'll just have a follow-up on that. I mean, obviously you're cutting back on CapEx. I'm assuming therefore, you're basically delaying your greenfields. Is the plan essentially post-COVID-19 to start them again? Should we therefore, when we think about the sort of medium term, should we be expecting CapEx to sort of ramp back up again? Just joined to that also, can you say a bit about working capital and whether there's much more to do on that front as well?
I'll take the CapEx first. It's market specific as always. Those are greenfields in California and Virginia and South Carolina, and so we'll ramp up or down depending on those individual markets and the needs and the opportunities. We'll have to play that just by ear, but if the need is there and the demand is there, obviously we're going to invest because they're good investments, and if not, we will hold off until it's time to invest.
With respect to the working capital question, we're obviously looking at that and have taken some steps to improve that. As I said, our cash flows and the preservation of liquidity have always been important to the company. It's one of the core tenets of how we run our business. In times like these, obviously we're going to ramp up those efforts. We are making sure that our accounts receivable is collected timely, making sure that we don't let any agings or anything like that slip there. We're also looking at carefully managing our inventory levels. That's all part of the contingency planning. Certainly, if there's some steps to be taken on the payable side, we'll look at that as well. Hopefully that's responsive to your question.
Yeah. That's great. Just as a quick follow-up, can you maybe talk a little bit about the outlook for asphalt margins? I mean, obviously Q1 you had prices up, bitumen down. I guess bitumen comes down by even more given what oil's doing. Do you think you can hold that price-cost spread, and actually could it even get wider as we go through the year?
Well, I think I would describe it this way. Our prices will continue to climb. You've seen a number of quarters, actually all of last year, prices climb as we chased rising liquid costs. We caught it in the fourth quarter, and we said we would catch it and go past it, which is what you've seen. I do have confidence that our pricing will continue to go up in the hot mix portion of it. I think that the liquid piece for us is an unknown. On the surface, so it went down some 6%, as Suzanne said, in the quarter, but the future for us is unknown in liquid, and there's opposing forces there. The dramatic fall in crude prices would have a lowering effect. Flip side of that is right now you've got less refinery activity because this demand for diesel and gasoline is down.
The question is: Does that put pressure on supply of liquids? What I'm confident is our prices will go up. The unknown here is what's going to happen to liquid prices as we go forward.
Understood. Thanks. Stay safe, guys. Thank you.
Thank you.
Yeah. Thank you.
The next question is from the line of Michael Dudas with Vertical Research.
Good morning.
Good morning, or maybe afternoon for some, for Mark, Tom, and Suzanne. I appreciate you taking my question. Tom, the implementation of COVID-19 mitigation throughout your organization, through the plants, the facilities, how quickly did everybody adapt? Was there any productivity issues, or could there be some enhancements to operations as you think about going forward if we're going to keep these types of mitigations for a fairly long period of time? Are you seeing that with your customers that you're talking to as well?
The short answer is I don't really see a big impact on our operations or on our customers. I tell you, I'm very proud of our people and the job they have done with this, and they're doing a great job. They've done a great job both protecting themselves, but also you got to remember, there's a dynamic of this that what happens out of work. They've been very vigilant, protect themselves and their families. We started this really early, and we continue to adjust as we get new information and new procedures. Out of our 9,000 employees, we've had minimal cases, and the strict protocols and staying to that, it has paid off. From an operating perspective, you saw in my opening remarks about our safety record for the first quarter was excellent. It continued to be excellent through April.
I got to tell you, that's a real feat from our operators and that they're under a lot of pressure and with the COVID-19 protocols, which were new, they still protected themselves. Our operating efficiencies in the first four months have been very good. They've done a great job, and we've not seen any hiccups, and I don't expect to see any from our perspective. I think the same can be said for our customers. We're deemed an essential business, all of us are, and we have to earn that and protect ourselves and follow the rules. I think the industry as a whole has done a really good job with that.
Those are excellent thoughts. Just my follow-up would be, the mitigation and the aftermath of COVID-19, do you think that there'll be some trends and opportunities that will impact where your plants and your business is located to see migration? Being here in the New York City area, you do talk to people thinking about their continuing to look south, especially after what's going on here. Do you think that could give some medium, long and term support to your business flows?
I think that from where we're located, both in the markets we're in and where we're located in those markets, Vulcan is advantaged, and that's been built over six decades, as we said. I really like Vulcan's position moving forward. There's always the recent question of, do people want to move out of the metropolitan areas and go buy a house? Gosh, we hope so. We'll be glad to supply the stone to build those houses and those subdivisions.
I'm sure you will. Thanks for your thoughts. Appreciate it.
Thank you.
Our next question is from the line of Phil Ng with Jefferies.
Hey, good afternoon, everyone.
Good afternoon.
Hey.
The LNG projects around the Gulf region that you guys have talked about, can you help us size how big of an opportunity that is? Then if you had to break down what percent of those projects have started versus not yet, and then with oil prices where it's at, do you have a view if that kind of moves forward?
This was always a 2021 play. The LNG projects, as we said, that had started are continuing. We're shipping a number of those projects today, both in Louisiana and in Texas. The big work was the work that was coming. It is tens of millions of tons. That has been postponed. Again, that was more to be 2021. It was kind of icing on the cake of everything else that was going on. I'm sure at some point in time, those projects will go. I think there is demand throughout the world that will want that. I think the world has to settle down some, so the timing is unknown, but I think ultimately they'll go.
Okay. That's helpful. On the commercial side of things, can you help us break out your major end markets by percentage? Some of the end markets like warehouse and data centers seem to be more solid footing going forward post-COVID-19, but maybe hospitality and office might be more at risk. Can you help break down the major buckets from a percentage standpoint?
I think that if you looked at the heavy non-res, which is some of what has slowed the lighter non-res, which we talked about, data centers, distribution centers, warehouses, healthcare, education, online commerce, has very much picked up. I would describe that as probably in normal times, maybe half and half, but that's just over a long period of time. Any moment in time, one of those is going to be heavier than the other one. Right now, it just tends to be the lighter one that's heavier.
Okay. Thanks a lot. Appreciate the call.
The next question is from the line of Adrian Huerta with JP Morgan.
Hi, Tom and Suzanne . Thank you for taking my question.
Hi, Adrian.
Hi, Suzanne. My question has to do with maintenance costs. If you can just give us more details on the incremental amount that you had this quarter that flew through the income statement. What was the total amount of maintenance costs that you had last year, and what is your expectation for the full year for this year?
We had called out in the last couple of quarters that we would see higher maintenance and higher stripping costs. We talked about that in the third quarter. We talked about that in the fourth quarter. We said we would see it again in the first quarter, and then it would start to level off. If you just look at the cash cost for aggregates, it was up some 3% or $0.26. Most of that increase was in parts and supplies and stripping. Again, you got to remember, this is the worst time of the year, the first quarter to operate just because it's cold, it's wet. You have big inefficiencies, so we go in and try to go and finish a lot of those repairs and maintenance, so when the season comes, we're ready to go. That is what you saw in Q1.
That's what we talked about that was going to happen. I think ex volume swings, we feel good about the balance of the year. We feel like our operating disciplines and our strategic initiative on those operating disciplines are in place, and they're maturing and doing well. I feel really good about our operations and our operating efficiencies. Again, the fundamentals of that is maximizing group. You're looking at the R&M piece. The fundamentals of that are how do you maximize input, minimize downtime, how do you efficiently use manpower? You proactively inspect that equipment and maintain it. The last is employee ownership and engagement, and effective leadership is key to all of that.
Thank you, Tom. That was clear. If I may ask a follow-up question. Can you just talk a bit more on what happened? I heard what you said, that you're taking steps to improve our working capital. Can you tell us a bit what happened in the first quarter with working capital?
Yeah. With respect to working capital in the first quarter, we had a bit higher use of working capital because we had a little bit of inventory build. Not a whole lot, but a little bit in a couple of areas we called out that were fairly wet in the Southeast and the Southwest. We also had a fair bit of mobile equipment, which falls into our operating and maintenance CapEx that we had ordered in the fourth quarter. That came in and was paid for in cash in the first quarter. That was another fair bit of working capital that just was timing between the fourth quarter and the first quarter. In addition to that, we also expended $26 million of cash with respect to share repurchases. Those were really the biggest components in the first quarter.
Thank you, Suzanne.
Sure.
The next question is from the line of Rohit Seth with SunTrust.
Hey, thanks for taking my question.
Sure.
Just on the state DOTs, the AASHTO number down 30% and requiring about $50 billion. Let's say that number doesn't come in quite at the $50 billion. I was just thinking about, it doesn't come at $50 billion. States could look at the highway funds as funds that they could use to pay for other areas of the budget that are in shortfall. I think the lock boxes might be a little bit important right now. Do you know offhand which states in your markets have put in lock boxes? I believe California, I think Illinois has one. Do you know offhand about some of the other top 10 states of yours?
All of them have lock boxes. All of that funding is protected and can't be diverted for other uses. The funding is safe. Hopefully, that funding will come back strong as we reopen up. For now, any funding that's there is to be used only for highways.
Okay. Today, there was an employment report came out. It showed construction employment was down about 2.5 million jobs in April. Meanwhile, most of the companies reporting on construction this earnings season said April was not too bad. The 2.5 million is an alarming number. Just curious, are you seeing that? Are you hearing that? It took me by surprise.
I think that is a national number, and we did not see that kind of drop in our markets. I don't think we've seen that kind of drop in our markets in April. I think it's more where that is. All these shelter in places have been different. For example, as we talked about the seven counties around the Bay Area were restrictive on private. Pennsylvania did not keep going with highway construction. As we know, New York got hit harder. Some of the Northeast probably got hit harder than most of our markets got hit with this. We didn't see those kind of drops in our markets.
Okay. Just on liquid asphalt again. If liquid asphalt does fall, though, do you expect to realize the benefit? I know there's been about mixed responses on that in the past.
Yeah. If history repeats itself, which we believe it will, as we saw the last couple of years as mix went up, we chased it. We've caught that now. If you see a drop, you should see that benefit unit margins in asphalt.
All right. Your asphalt business, given the highway, is probably going to be the most resilient part of your business. That should probably be a pretty good business for you guys this year. Is that fair to say?
Most of this, from a demand perspective, I would tell you, so far so good. We think we're protected with highway demand for the next three or four months. After that, hopefully the AASHTO will get what they need, and it'll continue to grow as we move forward.
Yeah. Clearly it's something we need to monitor.
Sure.
Right. All right, great. Thank you. That's all I have.
Thank you.
Thank you.
The final question will come from the line of Jerry Revich with Goldman Sachs.
Yes, hi. Good morning. Good afternoon.
Hi, Jerry.
Hi, Jerry.
Battling connectivity issues this morning, I apologize in advance if this has been asked. Can you talk about the pricing tools that you now have available heading into this downturn? Is there a way to quantify or better understand what they're going to allow you to do in this cycle compared to the last one? Obviously, not having cement helps in this downturn, but from pure aggregate standpoint, can you just talk about what the tools could potentially allow you to do here?
Yeah. The tools that we use give us visibility into that 60% of the business that we're bidding, that we talked about, and it's real time that keeps up with our backlogs, our booking pace, what the prices in both of those look like, what sector the work is coming from, what size the work is coming from. You really have a real-time visibility and down deep into markets of not only the effectiveness of our sales force and how they're doing on their disciplines, but also how the world should look going forward. It just gives those management teams a lot better tools to predict so that we can adjust our operations and our efforts accordingly.
Yeah. Tom, in terms of what that'll drive from a market share standpoint, does that mean we should look for lower market share at the trough as you folks focus on the more profitable jobs? Can you just flesh that out for me a bit relative to the competitive landscape as well?
No, I wouldn't look at it that way. I think what it allows us to do is maximize our price and maximize our customer service to earn that price. I wouldn't see a big market share swing in this. You got to remember, that is the beauty of the aggregates business, is the pricing characteristics, that they are resilient. We've seen this through multiple cycles. In fact, we've seen it for 40 years. I wouldn't think that this one would be any different. I think probably the industry as a whole is better off today than it was some 12 years ago. I think the pricing disciplines, both within Vulcan and within the industry, are better today than they probably were 12 years ago, much less 20 years ago.
In terms of the metrics that you're managing, the individual 350 plant operators, can you talk about any changes in terms of the framework for evaluating their performance, in a downturn compared to what it would've looked like a year ago? How do we keep folks who haven't seen this movie before, as the senior management team has, from getting up over their skis from a cost structure standpoint?
Yeah. Well, I think that we have a lot of experienced managers. We have a lot of new managers. I think that, again, the operating piece of those four strategic initiatives of how do we run those operations the most efficiently and keep our people engaged and make sure we have appropriate training so that you get that experience faster and further into the organization are very important, and it will serve us very well through this. At the same time, we will look at all those leading indicators from our sales group to affect our operations as we look at critical sizes within those operations and adjust those accordingly. There's a lot of levers to pull in the operating side of the business, whether that's inventory or discretionary spending, maximizing, as we talked about, those fundamentals of efficiencies in it.
I know that our people are in a very good place here, and they'll be able to handle swings in volume as they would if it just marched up steadily.
Appreciate the time. Thanks.
Thank you.
With that, I'll hand the call back to Tom Hill for closing remarks.
Thank you. Thank all of you for taking the time to listen to our call today. Clearly, these are very challenging times, they're challenging for all people throughout the world and for every business. We greatly appreciate your interest and your support in Vulcan. Please stay healthy, we look forward to talking to you in the coming weeks and months. Have a great day.
This does conclude today's conference call. We thank you for your participation and ask that you please disconnect your line.