Summit Materials Inc. announced results for the first quarter ended April 2, reporting Net Revenue decreased $6.0 million, or 1.5% in the first quarter to $392.5 million, primarily resulting from divestitures completed in 2021, partially offset by increases in average sales prices.
Operating loss increased $9.2 million, or 36.9% in the first quarter to $34.3 million, as timing of price increases temporarily lagged increased costs from inflation, timing of repair and maintenance expenditures and certain stripping activities, unplanned downtime at a few of its locations, mitigated by a $5.1 million decrease in depreciation, depletion, amortization and accretion expenses. Summit’s operating margin percentage for the three months ended April 2, decreased to (8.7)% from (6.3)%, from the comparable period a year ago.
Net loss attributable to Summit Inc. increased to $34.3 million, or $(0.29) per basic share, compared to $22.5 million, or $(0.19) per basic share in the comparable prior year period. Summit reported adjusted diluted net loss of $49.0 million, or $(0.41) per adjusted diluted share as compared to $38.9 million, or $(0.33) per adjusted diluted share in the prior year period.
“Our first quarter 2022 results demonstrate that we have sustained the momentum we built in 2021 and are on solid footing as we head into the prime construction season,” said Summit Materials CEO Anne Noonan. “Our unwavering focus is squarely on our strategic execution and controlling what we can control to make further progress towards our Horizon One financial objectives of driving margin expansion, controlling leverage, and increasing ROIC. Price increases were communicated across all markets and lines of business with effective dates varying from Jan. 1 to April 1, depending upon seasonality. We expect those increases will be fully reflected in the second quarter of 2022. We would characterize current market conditions as favorable towards the potential for additional price increases this year in all lines of business. We are diligently moving forward with portfolio optimization moves, implementing our Value Pricing principles, and pulling all available self-help margin levers to improve performance, offset inflation, and upgrade our quality of earnings. We are updating our 2022 Adjusted EBITDA guidance to reflect the impact of a divestiture and we remain confident that Summit Materials is on track for another year of solid growth.”
Brian Harris, CFO of Summit Materials, added, “Sound strategic execution has put Summit in a position to pursue a broader range of high return capital allocation priorities. As part of our Elevate Summit strategy, we have closed nine strategic divestitures with line of sight to completing the ten to twelve as part of our Horizon One goal. We believe these divestitures advance our market leadership and asset light priorities and together with continued organic growth, provides Summit the financial flexibility to invest in greenfields, pursue attractive M&A opportunities, and opportunistically buy back our shares when they present compelling value.”
In the three months ended April 2, Summit Materials sold one business in the East segment, resulting in cash proceeds of $47.8 million and a total gain on disposition of $14.2 million. To date, as part of its Elevate Summit Strategy, the company has received $176.1 million in proceeds from a total of nine divestitures. As of April 2, Summit reclassified an operating unit in its East segment as held for sale, and expects to close the transaction in the second quarter of 2022.
Aggregates net revenues increased by $6.0 million to $123.4 million in the first quarter. Aggregates adjusted cash gross profit margin decreased to 36.3% in the first quarter as compared to 41.8% in the first quarter 2021.
Aggregates sales volume decreased 0.8% in the first quarter as solid organic volume growth in several markets was more than offset by volume decreases in certain markets due to divestitures. Average selling prices for aggregates increased 4.8% in the first quarter with growth across both reporting segments.
Cement segment net revenues increased 13.7% to $46.2 million in the first quarter. Cement segment adjusted cash gross profit margin decreased to (2.0)% in the first quarter, compared to 1.9% in the prior year period, reflecting the impact of an annual maintenance shutdown and slightly slower than expected resumption of operations. Sales volume of cement increased 0.3% and average selling prices increased 10.1% in the first quarter.
Products net revenues were $189.7 million in the first quarter, compared to $198.7 million in the prior year period. Products adjusted cash gross profit margin decreased to 11.6% in the first quarter, versus 13.6% in the prior year period. Average sales price for ready-mix concrete increased 7.3% driven by pricing growth in all markets, with strong, double-digit growth in the Intermountain West.
Sales volumes of ready-mix concrete decreased 7.2% due to lower volumes in Kansas and north Texas due to weather. Average selling prices for asphalt increased 10.2%, driven by strong pricing gains in Virginia and the Intermountain West market. Asphalt volume decreased 45.1% due primarily to the impact of divestitures.
The West Segment operating income decreased 46.9% to $8.0 million and Adjusted EBITDA decreased 19.6% to $32.7 million in the first quarter primarily due to higher sub contractor costs, as well as increased repair and maintenance and fuel costs that were realized ahead of price increases broadly going into effect.
Aggregates revenue in the first quarter increased 7.8% on 3.7% pricing growth and 3.9% volume growth, which was driven by strong demand in Texas and the Intermountain West geography, as well as increased projects in British Columbia. Ready-mix concrete revenue in the first quarter increased 6.0% as 7.0% pricing growth was partially offset by lower volumes. Asphalt revenue decreased 50.9% in the first quarter as volumes decreased 50.7%, due to a divestiture made in the second quarter of 2021. Asphalt sales prices increased 10.3% in the period.
The East Segment operating loss increased 3.4% to $10.7 million and Adjusted EBITDA decreased 30.7% to $8.1 million in the first quarter. Lower operating income and Adjusted EBITDA reflects increased cost of revenue that exceeded pricing growth.
Aggregates revenue was flat to prior year. Aggregates volumes decreased 6.5% primarily due to divestitures and partially offset by growth in Georgia. Average selling prices for aggregates increased 7.0%. Ready-mix concrete revenue decreased 26.6% as volumes decreased by 32.5%, partially offset by average selling price growth of 8.9%. Asphalt revenue increased 10.3% as lower volumes were more than offset by pricing growth. Asphalt average selling prices increased 14.5% due to product mix and asphalt mix design.
The Cement Segment operating loss increased 34.4% to $13.5 million in the first quarter. Adjusted EBITDA decreased $8.3 million as our repair and maintenance costs associated our annual shutdown were elevated relative to the comparable prior period. In first quarter, the Cement Segment reported volume growth of 0.3% and average selling price growth of 10.1%.