Summit Materials Inc. achieved net income attributable to Summit Inc. of $56.7 million, or $0.48 per basic share in the second quarter 2021 compared to net income attributable to Summit Inc. of $57.1 million, or $0.50 per basic share in the comparable prior year period.
Summit reported adjusted diluted net income of $58.0 million, or $0.49 per adjusted diluted share as compared to adjusted diluted net income of $58.9 million, or $0.50 per adjusted diluted share in the prior year period.
Summit’s net revenue increased $43.3 million, or 7.5% in the second quarter of 2021 to $618.5 million, compared to $575.2 million in the second quarter of 2020, on higher aggregates, ready-mix concrete and cement revenue relative to a year ago on continued favorable market demand conditions and price growth in all lines of business.
The company reported operating income of $95.9 million in the second quarter 2021, a decrease of 4.1%, compared to $100.1 million in the prior year period. Higher aggregates, cement and ready-mix volume and prices across the business were offset by increases in cost of revenue and general and administrative expenses associated with implementation of its Elevate Summit strategy, combined with fewer working days in Texas due to unusually wet conditions in May.
For the three months ended July 3, 2021, sales volumes increased 14.7% in aggregates, 8.3% in cement and 6.3% in ready-mix concrete relative to the same period last year on strong demand in most of its markets.
Average selling prices in the second quarter of 2021 increased 2.4% in aggregates, 2.9% in cement, 3.0% in ready-mix concrete and 0.7% in asphalt. Adjusted cash gross profit for aggregates expanded to $85.8 million in the second quarter 2021, an increase of 14.3% relative to $75.0 million in the year ago quarter.
Anne Noonan, CEO of Summit Materials, commented, “Today we are reporting Summit’s third consecutive quarter of record Adjusted EBITDA. These results reflect our team’s commitment to operational and commercial excellence, which delivered volume growth in most lines of business and pricing growth in all lines of business. Demand fundamentals remain strong in our rural and exurban markets, while most of the state Departments of Transportation that we serve have returned to typical letting and operating conditions.
“As part of our Elevate Summit strategy, we have now completed a total of five strategic divestitures, as we exit non-core or non-leading market positions, unlock proceeds for more strategic use, and convert some of those businesses to an asset light model to drive higher aggregates pull through. We believe Summit’s organic growth profile and asset light conversion model position the company to absorb the impact of the foregone contribution from those five divested businesses, so we are leaving our full year Adjusted EBITDA guidance unchanged at this time.”
Brian Harris, CFO of Summit Materials, added, “We are making meaningful progress on the leverage reduction element of our Elevate Summit strategy. Our Elevate Summit goal is less than 3.0x leverage, and we continue to believe that is within our sights in 2021.”
Aggregates net revenues increased by $23.5 million to $153.5 million in the second quarter 2021 when compared to the prior year period. Aggregates adjusted cash gross profit margin decreased to 55.9% in the second quarter 2021 as compared to 57.7% in the second quarter 2020.
Aggregates sales volumes increased 14.7% in the second quarter 2021 when compared to the prior year period on organic growth in both the West and East segments. Volume increased in the Intermountain West, Virginia, Carolinas, Georgia and British Columbia markets, partially offset by slight decreases in Kansas and Missouri as wind farm and flood repair volumes in the second quarter of 2020 did not repeat in 2021. Average selling prices for aggregates increased 2.4% in the second quarter 2021.
Cement segment net revenues increased 13.4% to $85.8 million in the second quarter 2021, when compared to the prior year period, on higher sales volume of cement. Cement adjusted cash gross profit margin decreased to 47.2% in the second quarter, compared to 50.8% in the prior year period.
The company’s Green America Recycling facility continues to ramp up production following an explosion that occurred in April 2020. Sales volume of cement increased 8.3% in the second quarter and average selling prices increased 2.9%when compared to the prior year period.
Products net revenues were $292.1 million in the second quarter 2021, compared to $285.0 million in the prior year period. Products adjusted cash gross profit margin decreased to 18.8% in the second quarter, versus 20.6% in the prior year period.
Its organic average sales price for ready-mix concrete increased 3.0% and organic sales volumes of ready-mix concrete increased 6.3%, as volume increased in its Intermountain West, Texas and British Columbia markets, and prices increased in most markets. Organic average sales price for asphalt increased 0.7%, with pricing gains across Texas geographies and British Columbia, while volume decreased 11.3%, due to a divestiture of a paving business.
Net revenue increased by 7.5% to $618.5 million in the second quarter 2021, versus $575.2 million in the prior year period on organic growth in its aggregates, cement, and ready-mix concrete operations. The company reported operating income of $95.9 million in the second quarter 2021, compared to $100.1 million in the prior year period as favorable volume and price trends in most lines of business were partially offset by fewer working days in Texas due to unusually wet conditions in May.
Net income decreased to $57.8 million in the second quarter of 2021, compared to income of $58.9 million in the prior year period. Adjusted EBITDA increased 2.4% to $163.8 million in the second quarter of 2021, compared to $159.9 million in the prior year period on higher revenue.