How Summit Materials performed in third-quarter 2020

Summit Materials reported its third-quarter 2020 results, noting that sales volumes of aggregate were up while net revenues and average selling prices in aggregate were down.

According to Summit, its aggregate net revenues decreased by $1.1 million to $136.4 million in the third quarter when compared to the prior-year period. Aggregate adjusted cash gross profit margin decreased to 64.2 percent in the third quarter as compared to 68.6 percent in the third quarter of 2019, on differences in product mix.

Aggregate sales volumes increased 3.1 percent in the third quarter when compared to the prior-year period on higher volumes in Texas, partially offset by lower volumes in Missouri, Kentucky and British Columbia, Canada. Average selling prices for aggregate decreased 2.2 percent in the quarter, Summit says.

On a mix-adjusted basis, Summit estimates that aggregate prices increased by about 2.1 percent this year.

Business overall

On a mix-adjusted basis, Summit estimates that aggregate prices increased by about 2.1 percent in 2020.

Companywide, Summit reported a net income of $90.7 million in the third quarter. In the third quarter of 2019, Summit’s net income came in at $55.8 million.

Summit’s net revenue decreased 3.1 percent in the third quarter this year to $645.2 million, compared to $665.8 million in the third quarter of 2019. The company attributes the revenue decrease to lower East segment and cement revenue relative to a year ago.

Summit’s net revenue, however, increased $38.5 million to $1.5 billion in the nine months ending Sept. 26, primarily resulting from organic growth in aggregate and ready-mixed concrete.

Also in the third quarter, sales volumes decreased 1 percent in concrete, 6.4 percent in asphalt and 11.3 percent in cement relative to the same period last year. Average selling prices in the third quarter increased 0.5 percent in cement, 4.6 percent in concrete and were flat in asphalt relative to the prior-year period.

“Our West segment performance was the highlight of the quarter, delivering 16.5 percent growth in adjusted EBITDA (earnings before interest, tax, depreciation and amortization) in Q3, as migration trends favor certain U.S. Central and Western suburban and exurban markets that we serve,” says Anne Noonan, CEO of Summit Materials. “Companywide, our adjusted cash gross profit margin has held steady. We are focused on consistent organic growth with investment in greenfields and Summit end markets that are underpinned by strong growth fundamentals.

“Sustainable organic growth serves as a foundation to support strategic acquisitions, such as Multisources of Texas, and Valley Gravel of British Columbia, which we completed in the third quarter while keeping our leverage ratio steady at 3.5x,” Noonan adds. “Most importantly, we continue to vigilantly practice safety and distancing protocols in response to the COVID-19 outbreak.”