How Summit Materials performed in the third quarter

By |  November 2, 2022

Logo: Summit Materials

Summit Materials offered details about its third-quarter performance, noting that the average selling price for aggregates increased 10.2 percent.

According to Summit, its net revenue in aggregates increased by $3.2 million to $163.5 million in the third quarter. The company’s adjusted cash gross profit margin in aggregates, however, decreased to 53.3 percent in the quarter – down from 60.3 percent in the third quarter of 2021.

Summit’s aggregate sales volume decreased 9 percent, with the company largely attributing the decline to divestitures in its East segment. Organic sales volumes in aggregates dipped 3.5 percent in the quarter due to the combination of unfavorable weather conditions and supply chain-related disruptions, the company adds.

Companywide, Summit’s net revenue increased $23.8 million, or 3.6 percent, in the third quarter. Summit says the gain was partially due to increases in average sales prices across the company’s product lines – more than offsetting the impact of divestitures.

Summit’s companywide adjusted earnings before interest, tax, depreciation and amortization, meanwhile, decreased $5.4 million, or 2.8 percent. The company says the decline is a reflection of the impacts made by divestitures and inflationary cost-of-revenue conditions that more than offset net revenue growth and lower general and administrative expenses relative to the prior year.

Reflections

Anne Noonan, president and CEO of Summit, offered a commentary on her company’s third quarter.

“We are pleased to report that Summit Materials delivered record organic pricing growth across aggregates, cement and ready-mix while achieving the lowest net leverage in company history and the highest ROIC (return on invested capital) since we launched Elevate Summit,” Noonan says. “These solid financial results in the face of market crosscurrents [are] thanks to continued execution of our Elevate strategy and the commitment of our team to meet the opportunities of a dynamic marketplace.

“We are positioned to achieve strong pricing growth in 2022, driven in large part by double-digit growth across all lines of business in the third quarter and catalyzed by accelerating aggregates and cement pricing,” she adds. “We continue to view the pricing environment as favorable, and we expect to see substantial exit velocity heading into 2023.”

Brian Harris, CFO of Summit Materials, also reflected on the company’s third-quarter performance.

“Our strong balance sheet and liquidity position afford us the unique opportunity to concurrently pursue multiple capital allocation priorities,” he says. “We continue to make capital investments to sustain and drive organic growth while, at the same time, opportunistically buying back our own common stock when shares represent compelling value. And, more recently, we have taken steps to strengthen the portfolio via value creative M&A.”

One deal Summit Materials completed in the third quarter was the acquisition of Florida-based SCI Materials.

Featured photo: P&Q Staff

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About the Author:

Kevin Yanik is editor-in-chief of Pit & Quarry. He can be reached at 216-706-3724 or kyanik@northcoastmedia.net.

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