Summit Materials (SUM)

Karli Anderson Investor Relations
Anne Noonan Chief Executive Officer
Brian Harris Chief Financial Officer
Stanley Elliott Stifel
Trey Grooms Stephens Inc.
Paul Roger Exane BNP Paribas
Kathryn Thompson Thompson Research
Garik Shmois Loop Capital
Collin Verron Jefferies
Brent Thielman D.A. Davidson
Adam Thalhimer Thompson Davis
Jerry Revich Goldman Sachs
Call transcript
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Good day and thank you for standing by. Welcome to the Summit Materials Second Quarter 2021 Earnings Conference Call. [Operator Instructions] I’d now like to hand the conference over to your speaker today, Karli Anderson. Please go ahead.

Karli Anderson

Welcome to Summit Materials second quarter 2021 results conference call. release our press results. and a issued yesterday financial detailing operating We all posted call investor our key workbook data, our accompanied website. financial which and operating This by supplemental presentation is section the on Investors an updated and of of are highlighting which of Management’s statements, Summit to Materials’ include responses are nature and on today’s control. their commentary may uncertain call questions forward-looking by and outside

way. differ current forward-looking expectations on and in statements a results actual these material Although management’s may are beliefs, based

of the of the on of could latest with actual discussion that a see For the report please results some filed Risk cause factors Form which annual to Summit is differ, SEC. XX-K, section Factors Materials’

release. find non-GAAP Brian with the historical begin review, reconciliations our in a concluding financial business can will update today’s provide Anne will of and CFO, call our our Today’s Anne Noonan, then provide from will discussed You financial press a CEO, Harris measures call in remarks.

the Please analysts With as the will the will can call I many queue, as line to Anne. the We we to have accommodate time for over so return turn asks open limit to possible question then questions. that, then we and one available. your in

Anne Noonan

quarter and for everyone thank Good morning, call. joining XXXX our you second earnings

We of presentation the our on will overview begin Slide with second an X of quarter performance.

employees. by driving with you Before X,XXX the start and update practices an of normal our all consistent important Summit, safety. our core at single I of would Safety results, daily most value on to providing brief financial is on I like operating Summit’s actions the

consecutive the lines delivered we we lower have commitment Safety on of culture. states report the strong and revenue, significantly transportation that EBITDA. record ago record incident communities To year on results. protocols volume Excellence X.X% third and operational on are that Summit’s employees quarter adjusted quarantines in serve. pricing that intent to XXXX our departments returned performance of cement net lines of This from operating delivered while and of year conditions. and earnings our will all of operating preventable half upgrading in markets, we fundamentals and further pleased of half enterprise. most Demand I committed demand Today, of have in to favorable excellence, market business. protocols than standardizing growth safety commercial price serve continued we am of reinforce slightly safeguards. the safety the to remain our exurban in and to from conditions zero fleet reflects are focused the higher across our most fully We entire aggregates, of first are business all I now commitment, which up in Center growth growth ready-mix first letting team’s ago, this and are and to reporting concrete on to revenue is lines relative quarter QX a a typical we incidents rural reemphasizing We business. a are the created up and Summit safety driving remain that our last COVID-XX-related so turn and financial XXXX. We call, employee

up Specifically, quarter, X.X%. XX.X%, throughout volume aggregates X.X% up volumes the with and growth was volumes volumes robust ready-mix cement up

fronts. QX down of line first only and XX.X%, strategy a due on the made several we the Elevate Summit was full quarter lower were business was with implementation, of strides divestiture. Asphalt to volumes, our largely which

Xx, below core most one the Elevate one investor our continue conducted year immediately and debt to for feedback. of Xx points year, ago. to EBITDA, from listening will of It’s prior an X.Xx improved be net When tour a last to joining versus frequently full improvement cited the a I was of Summit Summit turn it half team. of our priority leverage quarter be after a a leverage Our and to goals,

As businesses to divestitures positions, believe Summit some foregone of X organic and proceeds an absorb use part now we of our or those aggregates Summit’s the conversion growth Elevate to strategic divested as asset-light of from model higher of strategy, profile strategic the pull-through. drive those market impact unlock non-leading asset-light non-core to for exit more total position we businesses. and model completed have the a convert five We company contribution

are Slide the full at segment time. year at On our adjusted this leaving EBITDA outlook level. discuss I we performance So X, our unchanged will

EBITDA net revenue, reported in segment Higher quarter. volume days offset adjusted working ready-mix Texas due May fewer and with Our the conditions wet up and partially line June. and and X%, record in in to west aggregates year ago price

revenue, record segment had farm ready-mix and records reported than which East higher was and asphalt volume lower fewer partially wind up projects Our price, which X%, year up by was adjusted net on X%. aggregates volume concrete and ago quarter. set offset for EBITDA, We the

Our had quarter, up is up a revenue The well back full and production that to from year Recycling adjusted expansion and a XX% currently XX% also Green EBITDA of with ramping the cement ago. business America facility strong underway. up facility is

strategy. full in on Turning mode X, implementation our Summit to Slide we are Elevate

on deliver long-term growth. continuous team better Our is and execution to focus returns creativity and discipline sustained as a

that priorities market leadership. strategic first key involves four enhancing our have We

grow Summit be markets not a where asset-intensive divestitures businesses one did contract. businesses Of the ideal approach, not have business. where some The supply five were long-term owner which situation, ideal to simply the in divestitures position in other and we the the rural or X that not of completed involved we the divestitures paving, of leading clear was and divestitures is invest an is an region were subject The to even pillar. were aggregates forward year-to-date, and a unfavorable asphalt have one the we and path or some to our Summit’s strategic that not where did goal improve region. was to number two second in Summit QX concrete was ready-mixed Our in East our West and can and positions. number converted There an included business our We owner. asset-light exurban

aggregates of However, competing retained customer number are supply downstream our our negotiate meet relationship being we is an our strong than player; a) the and have XX% an different Roughly supply isolated assets. We’ve reducing greater the that and those an able position. for EBITDA capital a with goals our recap, c) opportunity long-term business. were to the for In downstream potential and the a finally, greater how thus asset-light businesses the lacking upstream; while contracts, strategic or deployed XX% through existing path two half aggregate criteria versus clear we contract. experienced an have in efficiency are complexity pull long-term the market ROIC cases, deal still the aggregates to number a our not one to To financial asset-light evaluates business b) where divested team we that shift our competitors powerful strengthening be: with asset of the conversion. of our in of to

It’s effective businesses that its in future focus as each And as the that organic we Our proactively business. us. helping a efficiency region generators current Summit both to well opportunities allocating on business needle of line inorganic for in and intentionally resources in will are for value capital be leaders move more evaluating growth. is the identifying and are to

giving isn’t For what example, they their to to driving reallocating and equipment divesting what are deliberate relocating, Summit or value. driving at value plants asset Then invest looking want opportunity markets can of thrive. is be leaders grow the and where in the we are mobile We to on utilization intentional really determine and creation.

waste the is thing also because to all a has do, Our We’ve but results importance completed vital of only later our fall. publishing our water third those responsibility pillar right COX, not and baseline, social of be significant this is we’ll stakeholders. to differentiator it and it

Just goals. us as Summit and through drive can social creation are and help to human performance we how value that to land achieve using best our impact, emissions enhanced use Elevate Summit important, data determine

strategizing how our practices are development our Greenfield and of the And projects ensure operations business best with retain base align our a growth use at leaders are opportunities. options to diverse enhance attract interests example, For and to existing employee looking on that more land offers our to and they stakeholders.

We are undertaking and concrete in business understand our to optimal path efficiency aggregates cement measuring emissions projects most and energy address businesses. to impact of pilot the to the use improve forward ready-mix our

towards long us in have reliant been than of of We’ve innovation. developing a sell the already Finally, inventory on EBITDA and for one products projects and that opportunities geography or business be will line an strategic developed help priority or fourth XX% These university partnerships. Summit to through commitment our margins we drive industry invest less one is term. and greater

centers operational and created to excellence enterprise. Safety, of critical capabilities commercial areas across are enhance and of focus businesses. excellence across We Summit the lines entire performance of have our

ability excellence inflationary grow. materials, markets provides further are Value value a For pricing our example, and we as well maintenance to heighten stay which our of energy. essential focus labor pricing, function ahead to is leveraging on Summit impacts commercial greater on

committed results. the of agility our to overall while standardization have improve structure decision-making and business consistency drive best-in-class across practices productivity to and of Additionally, cost results we optimizing and

due that were decentralized to standardize purchasing the we out model. activities RFPs example, in For to have on company our past coordinated our operating less

the during utilization, plan asset scrutinizing Elevate very their Slide plans evaluate consistency Summit context required graphic execution us, along the our to three adjusting and you horizons. all important on On see will quarter update assets. to way. and summarizes also tools our we performance of over will a introduced and invested are market we leaders so business in you across and optimize capital this each Investor Our strategic deliverables our Day developing return that that Transparency our X, are

of depicted We bottom are X, which is at the Horizon page. in the

have review and drivers social are divesting underperforming the while key and in business cultivating innovation and our of businesses expertise. of non-core We the creation, responsibility and process completed value across standardizing on focusing portfolio

update Slide Elevate Our is quarterly X. on Summit

of goal Xx, investor last that improve within since Summit’s flexibility less of to distance pleased year, than striking believe are and improved an ratio confidence. has Xx this will X.Xx financial We We quarter. our we report enhance our is believe leverage to which improvement

of through asset-light sense. with X.X% believe greater it goal asset maximizing of We better full where divestitures, half utilization year-end makes line than an of than a is strategic ROIC and and pursuing our a XX% Our achievable quarter. turn model combination in last is

still Our well is margin our XX.X% adjusted actuals. XXXX EBITDA ahead of of

XX from a what it’s last reported However, quarter. basis we point decrease

that time, we you linear a it the As be each game. trajectory are playing upward told not quarter. I And may at long

from slightly yield wet higher EBITDA segment, future we we margin are of the The a Elevate through in adjusted impacts and margin adjusted our Texas, that implementation better feel gains. on Summit detracts the resolve Star as impact on conditions that North reflects XX% largest invest G&A Rather, which It news improvement QX in West segment. do our it Our performance strategy goal drive not our basis greater efficiency were an of good reflects of we also LTM the in drag margin. solidifies EBITDA it will our than sustainable is to these temporary, periods. expect

while on last Elevate can’t As a of execution. progress. goals, steady climb a our can focus and On quarter, relentless Summit snapshot a provided we X, I Slide we perfectly our we towards have optimization promise also transparency promise portfolio said

under analysis Our a the light right on conducting assets, owner to focused has review shedding asset circumstances. right and non-core converting businesses portfolio

towards halfway to to of our those roughly are divest We assets. goal XX XX

balance X, X to July completed of some in to X the divestitures process X, all of with As we’ve degree.

as pleased focus on continue portfolio maximizing we are we timeline stakeholders. a we not progress The Horizon strict for have in to date While optimization to date. generated value million $XXX.X to our proceeds for with X, provided have divestitures

million So towards from divestitures. in goal roughly halfway stated gross proceeds we our Horizon X $XXX are of also total

Jefferson are use priority maximizing achieve ultimately our underpinned long-term to up on will fall our we on that Greenfield priorities, Quarry with fundamentals a proceeds has an center our on funding migration profile leverage, a in reducing or and goal congratulate major growth strong XX, Wrapping DOT exurbs, state program. of markets, location foster the our a a July. serving allocation and growth strategic sustainable trends strategy East job focused region into objectives. Slide growth of Atlanta Our development priority the favorable which and organic strong aggregates our in successful pursuing began entering markets will on That We flexibility, in growth. team launch mobility operations capital within which expanding by

the in these generate presence of expand Our an markets $XX full XXXX. are EBITDA million projects our annualized turn once advancing the Greenfield existing they results. country. Summit another by $XX the is discussion development in basis avenue will $XX.X in in fastest-growing part our It of capital in XXXX investment the million is with also from is in that, as a one growth. approximately and on that adjusted Greenfields million Carolinas operation, generated sustainable of will Greenfields. These Expected spending cumulative on million projects complement call million of Brian $XXX in to for will business long-term $XX for of to and I financial provide organic over Greenfield XXXX estimated With

Brian Harris

aggregates, higher year market due of XX, cement increased compared provided to $XXX.X comparing $XX.X ready-mix or conditions. million quarter in bridge to revenue we’ve revenue QX second Slide favorable in net continued second On net Anne. and XXXX a to revenue QX our concrete on XXXX, million, to you, Summit’s XXXX $XXX.X million the ago to X.X% quarter relative the Thank XXXX. of

Our West in Intermountain quarter flat offset Columbia the organic working growth days. versus by fewer Texas in was as was and in West revenue essentially British year that wet resulted prior conditions the

We with of associated and revenue acquisitions year. benefited from quarter third closed of million British in the last incremental Texas that in Columbia in also $XX.X an operations

higher revenue Georgia was Kansas, conditions on Our organic as relative ago, revenue to letting and higher improved year Kentucky. East asphalt net volumes well paving the aggregates, market $XX reflecting in segment’s and up of Carolinas a parts as in million and

million volume revenue price. year the relative in Our was and to prior higher cement segment’s on $XX.X quarter net up QX

net cement. Slide ago adjusted we proportion EBITDA $XXX.X East our a have relative year growth bridge. ago in provided contribution. similar was at the to a to adjusted QX in quarter million, performance year organic its up We EBITDA X.X% West Turning XX, a from ended flat to on segment segment in revenue and

metrics. ‘XX, a as offset $XX.X will G&A XXXX cement increase We XX, versus $X.X the business $X.X price million $X.X and income a across decrease aggregates higher and a Slide were million operating the of key increase X.X% to reported you financial see in and Turning GAAP million expenses of quarter million of second volume ready-mix in QX increases million of and XX% DD&A offset of the trends of half in in XXXX G&A strong a nearly by DD&A. a basis, wet in year-to-date XXXX, income however, half well first and On in price impact reflecting as volume Texas. first business, operating over is as of lines up in $XX.X increase the conditions most by an increase

intensely included impact the the income the is our implementation our key we to exclude of the operating over you quarter, related increased If This are Elevate XXXX driving revenue. cost and Summit is XX% quarter first of year of have prior our that in approximately on in takeaway second would G&A, our in focused price because ahead X% half.

costs we impact Our first of of those remove more QX assumed our expected, the more roughly outlook, once set it where labor XXXX are X%. Labor out areas we’ve half is cost and XXXX, you we higher we X% up as When pressure with efforts. or reflects less first results, G&A, tighter. revenue. play markets XX% the slightly seen in of Summit’s In half of labor to

X% pricing organic kept aggregates up pace has those as and is many However, pricing markets respectively. ready-mix X%, in QX our and same of

cost our and of of of passing of the other one-third standard materials, are input of a cost costs, along driver revenue cost In our of Summit’s as practice. revenue is terms biggest we which single

unit and by period business rather not To asphalt as cost substantially, fiscal provide things point we cost quality in our selling individual year-to-date such partly an be value were events our the time the context, where only the more like or is weather temporary of impacted an On in total that reporting spread selling gas, dollars XXXX business, income includes of to days spent to Summit, basis, an X% It liquid revenue. actually at X% million a higher Inc. experiencing quarter of an share or energy evaluate function attributable business is a we individual XXXX, by Reported diesel. per for dollars XXXX has We total a can also that do lower the year share. natural are and relative an of $X.XX energy slightly million over where prices created QX. $XX.X year-to-date that’s over net reduced second entire decreased the behind costs ago than reflect million so when year. a are lower entire quarter per asphalt $XX.X or $X but of volume. across $X.XX are per year reported to Finally, down of coal,

However, have as of trend over net generated $XX.X of half increase the we income, is year-to-date very an XXXX. first in strong, the million XXX%

have Slide margin we second presented When contraction there quarter basis several gross XXX you respectively. XX, our of been the profit XX of metrics. compare to non-GAAP adjusted slight and XXXX Turning financial the has quarter points, cash and points second EBITDA in a adjusted of XXXX, basis to

a $X.X on the cash similar $XX.X income XXXX. On respectively. million has significantly, adjusted points our profit on margins EBITDA million points, expanded of first adjusted by gross adjusted basis to XXX have first in half note, year-to-date diluted in and a year-to-date half expanded However, net our XXX the a basis basis, and versus of XXXX basis

the in Organic mix XXXX. a in increases volumes contracted while increased higher of Organic and prices the X.X% early and in in due divestiture. volumes half of also in Turning asphalt, progresses X.X% ready-mix material in Texas prices that the cement, total. half quarter-on-quarter due a ready-mix for seasonality a of price first base the basis. year-to-date in aggregates geographies timing range the selling and X% average X% average to comparison sales XX, markets in of of asphalt in selling reported X.X% and for to it concrete, Higher on in to is cement, and price Furthermore, North aggregates, to product to Summit’s first X.X% concrete the X.X% the most of our of business. X.X% price year in as XXXX the volume we Slide trends X.X% increased provided XXXX aggregates, reflected of the have in in Kansas year-to-date increases first typical are the half improve in in X.X% mostly year in

Slide comparisons. gross provided XX, have margin to adjusted we cash Turning

lines versus a in more first experienced aggregates we meaningful second The including While comparison resulted XXXX, the impacted factors, half of business of in we business not number attributed all in contraction in in productivity. a be believe rain which of all year QX revenue, quarter the comparison. lines presents can XXXX of QX but days, margin declines negatively to only the lost

We also costs input and experienced labor hydrocarbons. higher on

cement our have XX margins aggregates XXXX. half basis expanded by the and to basis Our of XXXX half first expanded have XXX margins of by relative points points first in the

points, Our basis year services products by expanded XXX first margins while margins on versus contracted basis the of in XXXX. XX points XXXX a our half basis by

structure expenses last some that recap for to G&A to continue to there We transaction experience are To along the price increases, increases production to like downstream our input fixed pricing I’d Utah. costs, get our quarter. which we resulted for businesses, announced passed sustained our in extent and guidance customers. volume On for XX, those Slide in and to growth changes modifications overhead cement particularly reporting

included moved income our on revenue. which measure changes administrative were expenses performance. as we to peers reporting expenses call, been fixed our beginning greater believe have fixed and to of Previously, general We production transparency you we earnings overhead told we XXXX, reported in our in loss, comparability we reporting into costs. related G&A. cost in last As and will production as overhead foster Transaction operating costs, previously these or are

unchanged and first should G&A the estimates quarterly of range million, from purposes million million million, provided will be to For guidance are quarter for the call. in $XX that expense $XX to DD&A million. of range XXXX, the that be $XX modeling we interest to These estimate should $XX earnings $XX our million $XX be on in

purpose share use LP X.X calculating per A million million, million Class units. shares XXX.X of diluted of adjusted the please share, includes For and earnings a count which XXX.X

Slide Turning XX, to summary capital structure. Summit’s of see you will a

Xx QX with ratio net lowest down XXXX strategic Summit Summit’s from leverage was X.Xx to a ratio Proceeds in our XXXX, Elevate significantly are and to at Our combined EBITDA. QX performance allowed divestitures history. by our now the from us we strong leverage financial debt improve at

$XXX.X had over QX position end over Our Summit undrawn second million, $XXX an with the our from Combined the available of closing which revolver, million liquidity quarter. XXXX. in increase $XXX was cash million was at of

is turn less with remarks. sights back for Our I the than closing and believe Elevate within call that Summit is And in Xx we her goal leverage our to will Anne XXXX. that,

Anne Noonan

guidance an Thanks, asset-light as Slide for despite we impacted We moment, year, provided XX, businesses of unchanged is organic which Brian. conditions of our outlook businesses this to call. and outlook but the our on that the this certain we’ve year On and growth current provided we adjusted the our progresses, EBITDA may year. the divestiture profile support revisit from last forecast our wet earnings model five conversion QX for believe

which growth to of of X% $XXX expect over we generate assumes $XXX at million, EBITDA million to midpoint XXXX, its For adjusted XXXX.

to to million We be will $XX spend on related million of $XXX million expect to which Greenfields. million CapEx, $XX to $XXX

those mid of business low continue in low increases year aggregates, ready-mix, volume expect basis. price single-digit We lines single-digit to increases full on for to and cement a and

flat lower We pricing be a divestiture. to expect to on asphalt due relatively volumes

change that remains view of residential beginning pre-COVID the return we picture in fiscal this haven’t strong, from state the seen numbers our way seen move into year. meaningful to funding have nor budgets construction levels, While a very stimulus dollars on nonresidential we yet

the we are or more forecasted. we way originally out fact, In play seeing less XXXX

and Summit’s next strong X forward position, X-year support after on Summit Congress. started. to months steps the moves legislation as Elevate the earlier hard package XX, leverage that capital includes monitor trillion have week, invested surface look proposed through where nearly $X a and transportation Slide this implementation The improved reauthorization over to of for first Senate continue package we We the on indicated of infrastructure all margin strategy, EBITDA return the our we Concluding bill.

excellence busiest year. progress are season commercial the we quarter, through and we laser-focused volume to the price As of support third on and our fiscal through operational

our We than closer us and to less goals XX% drive greater ROIC team Xx to our have aligned leverage, of XX% margin. greater than than

putting and and We’re Elevate I’d time. responsibility goal the for consistent Horizon returns halfway for proceeds. Summit towards approach, to shareholders action questions. for the will operator over into portfolio objectives are believe that, over this more X We divestitures social better and our turn With and innovation market Operator? deliver leadership, to our like it asset-light,


from first your And Stanley Stifel. of with Elliott line Instructions] [Operator question comes the

Stanley Elliott

everyone. we talk exit just question. pricing the what Thank more see really into year? mean How good you get discussions with you are year trying pretty a seeing you all strong mentioned U.S. increases. that given on Can the might about for you taking pricing you. Hi, demand Do the morning how side? pervasive to for is I broadly across the the going to customers? mid-single-digit this your you’re flavor And Thank accelerating price the low

Anne Noonan

And through the rest of In the get into you second different on – of the and across aggregates, the we’d price through year. ready-mix all realization deliberate as pricing, in the the our are markets half increases And see price second Good went as we Cement April. as push first we diligently pushing that executing currently know, go of impact right we low in through on allow points and business, of we move about all price aggregates. strategic And areas we and at year. price and being trying we in additional we our QX price And it, their see increase. our to know, impact as very thought through and and morning, on be our increases markets increases price is business, through mid-single-digit coming that that of in of with price On are key team to are aggregates putting we and that to continue most increases have asphalt for track cement across Stanley, pricing numbers. the we on And will our any heavily of on but where you that. we you went our markets. that mid very aggregates some

absolutely on of correct, Stanley, pricing high, our and to we our sure and so impacts. be customers, commercial focused bring we demand laser stay ahead we will we also excellence from So but is you’re to are well through and make to both quality service continue efforts, the inflationary

Stanley Elliott

Thank you, Anne.

Anne Noonan

Thank you, Stanley.


Your comes next question of Stephens with from Inc. the Grooms Trey line

Trey Grooms

and taking for my good morning Hi, thanks questions.

it first and So this is on the question I in guess – around touched the and you definitely here, comments, this is the guidance.

So your strong. first very seasonally quarter,

call from the I uncertainties. is full is getting better you aren’t last some divestitures. also, And out here biggest we’re really why time folks revising go year-end. understand there since guide there understand at still up the this than XQ. to year I And night question expectations And in weather the some You is came in time. you before

if just an far with this seen some we’ve these guide of given along give us year? could of on it thus and divestitures that, more idea maybe, the holding as the along bit of kind the what you is, impact of So thought lines the of process

Anne Noonan

of so more on a the I’ll Okay. little kind takes and some could bit give we Well, us give process our take to you on maybe high-level thought then puts and that, kind Trey. Brian depth through that guidance, of

a and a right as why bit give bag, don’t of we lot that’s key a So nonresidential. annual said is overall, year-long it’s I’ve and The business we see before, now, a we on this look guidance. area where of at visibility mixed basis,

in called lumpy. versus down has earnings, wind farms, nonresidential EBITDA. about in We first was that be our As because and of our million we $X predicted XXXX quarter we’d been in ‘XX

EBITDA asset-light and In May in QX the our from of able And we – million. an addition impact of impact an reported, divestitures, in detractor on a but results. had we our basis it, somewhat that you was in to on full guidance, obviously, our then it June, of lot on just a that, if you cases, Texas we hit year $X conditions in an was look impact had were to wet a to and of Trey, has at earnings, away which and wet QX turn right had conditions, and about we what

a should confident as today year guidance guidance Texas or read saying challenged the Maybe, that if overall will and up in give year specifics still it, And some very you because position sitting more about QX. bottom and will say where lack bringing confidence we we we’re QX, be down reach Brian, of anything, to line more puts on. believe I takes goes guidance. with impacting as want we’re in to if give starting that However, it would from we that, our and great. to you full And revisit divestitures our our would of

Brian Harris

but the Yes. we did to don’t to a mind, last XX-week have Anne’s comments, add year in keep Trey, whole I year. have lot just

was in that repeat. That’s to that’s It we a the get million year. last $XX in So, October a it $X – fourth doesn’t quarter. million impact

the Recycling. go to still of We’ve the America year-to-date. the XXX September, got got month our ramp-up of and of the at midpoint. We’ve the to Green is year. largest quarter continue get to We’re XXX year the to QX largest

just feel it’s year not will as progresses. to bit nonresidential, little the we the as appropriate a that we revisit that around increase that given uncertainty guidance. said, of So But we

Trey Grooms

you for I Makes that luck. all. to me. you. will pass sense for Good That’s unpacking helpful And us. Very Great. it and on. thank Thank

Anne Noonan

Trey. Thanks,


from BNP Paribas. with line comes question next the of Paul Roger Your Exane

Paul Roger

broad And about year? you in half the materials guess me in Brian and Clearly, business? from it were possible margins second margins second product some in Yes, just little and afternoon business Karli. Well, But and slot you obviously, quantify is Can focus talk and a the about the keep bit can the half, of afternoon. is QX. compared raw headwinds the on impacting the question thinking product good last to think the Anne bit I they I to whether in energy? a good

Anne Noonan

you’ll four what stepping Summit we question to key to element look the performance point I’d expansion, if margin how business. kind is with our and you of back we evaluate which, me, kind strategy. of the I’d when like And bear is your by do underlying address Paul, key have sharing of like know, Okay, of we factors at Elevate that a out as to

it factor Summit And been was if first $XX comments. you In it’s that’s impacts, we our implementation $X The of been is prepared one-time million. one-time called the look really in a year-to-date, out impacts, strategy. Elevate at our QX, million hit. around And which

look at, those operating And If year-to-date, look if you which if we margin what we is exclude from our we year-on-year, line, by QX increased we’ve X%. we’ve at by income look away year-on-year, actually XX%. at increased

all of one-time our when is pretty line you thing to we’re operating profit So the our line business, where do we we as your up drill take at by of businesses, income is which out. in on products, question. effects. comfortable except out you correctly are feel the you next of business, point lines the margin The down asking line gross we And

year-to-date points, ags on in products were up basis about basis we’re XX up and XX basis points up basis. points services XXX, So cement a just down XXX

in are because both did impacters ready-mix one, divestitures in things: and the Now number divestitures our of have which products affects QX. our we we asphalt two a

our some volume. as which And might margin, is So second our that to noise Texas, days imagine. you in added lost ready-mix our XX% the we had was the for of

the basically where lagging impact and an our couldn’t was price volume had sell. out get just that so we literally And because

if the QX year-to-date look that’s you numbers. So and impacts really at

as that about obviously, The question, thing Brian talked we focused very price third execution. we on Stanley’s out, earlier pointed in are

value excellence center to is and value our see can commercial get and inflation QX focused on of cover service you our the good, both we the pricing, in increases price and provide. that of April numbers. So quality were that

prices organic X%, and in X.X%, ags X.X%. ready-mix were cement asphalt up X.X%, Our and

If in as can Stanley, along then we all Texas half, we’re execute we it on additional of for going point prices and we price; comments confident look to So our cement, in in the your extent that it like can passing price. to record pass that as don’t secure gives we’re to us we ready-mix, starting move we do said we’re we Texas, cement had that weather businesses; comfort I price; business the in we’re as my the looking the get second indexed, proven long have of ags, more track our a right and we but along, price also. to other and we’re on of for and asphalt, cement along

extremely our we’ve that questions escalation. keeping raw far. intentional spend we’re The ahead which I a explaining, price I material would lot cost. about in I think fourth how like focused, because we’re strategic pricing, of summarize, minutes and successful been about so few on I get that would of a bucket, just And So doing to

labor productivity is driving actually, is what’s biggest then it’s second our at And which year-to-date, But that cost so the about our And and wonderful materials, costs per sure look a our done strategy cost of separate efficiency been our or right have that have our all done if we the what all, wage cost standard labor proud and to big we our a it’s our is those first have we year, capital procurement total team labor And element, so actual third is XX% do stream to of our to everything hour versus actually – volumes practice Labor But of and is work labor of at make year-on-year. of had, cost. plan standardize in job sales. flat has that we through X%. up of a we controlling across look that. team driving mitigate point, first actually you of pricing, our in in the our and very our input that. are half our being pass if costs, XX% optimized. rate to And control, to your to escalation, cost, doing of at in all they last offset can

because of element get lot this. third The cost energy that we I around a of call out questions is

net is And look which divestiture we In QX, impact. energy. cost. less $X only our down you dollars fact, we because asphalt increase impacts year-to-date, total if where of it’s year-to-date large from at you at if actually, had business a And million of X% had divested energy have the a look than

away the I of whole our people ahead escalation. So, our margin cost take pricing conclusion like this is around would to question is that

We base operating and optimized. down are and on our our operational commercial drive very ready excellence. to And we focused capital cost to continue stand

products. Paul, I on respect hope a at actual margins, flat overall, your answered what that question, With expect. that the be to So we would, would minimum,

you saw, we increased. year-to-date, As have

continue to we strategy. So, push of Elevate part this as our

Paul Roger

very you Perfect. Thank much.


the next line question Thompson with Thompson comes from Kathryn Your Research. of

Kathryn Thompson

question Hi. today. for Thank taking my you

increase importantly, Somewhat changed activity changed the materials light field related the this has in how in activity? conversations given industry, or this you. M&A increased in to portfolio influenced in your operational how has initiatives, Thank the heavy your of optimization,

Anne Noonan

pipeline, in Kathryn. we very rural two is From back, and chosen number number and number XXth of you and know, very are which at goal be to and with our or Thanks, we markets, always we we one as M&A our are M&A, exurban. strategic and targets deliberate the were a March that stepped going active, on looking said about

there So, nothing direction. changed has strategic our from

X when Horizon started we off. divestitures our the – exactly list had are are We we same

our hasn’t upstream are high and I asset-light to acquire effect market a changed would be assets. would running at are some it say increase position But from that to Materials higher, optimization. of or material operating but seeing point Horizon We in hasn’t the we in overall on our an process increased are had potentially portfolio anticipated downstream this it are the the activity, divestiture, That say is the are we includes, X activity because Summit going how could we we anyway. more landscape. Obviously, evaluating list. what I obviously, really what importantly, as seeing both for and valuations how year affects really leadership it

Kathryn Thompson

Okay, great. you. Thank


Your Loop Garik comes the Shmois question from of Capital. with line next

Garik Shmois

been about having weather back that ask for are to want deferred, just if Hi. of and the demand the Thanks timing just have end thinking the projects? How they pent-up expectation that in before the you me the half saw projects these in quarter. the completed the impacts the of should if you And of year? be on. year around I the get the

Anne Noonan

plenty looking a where – have interim. to and Yes, Garik, at have team ourselves. that. we to the continue at looking been that And our had ready our wet And a great Texas because I it’s I primary are that really can, backlog we we conditions. as have in work. fast staffed of will have is and as say managing And do move question, great standing we as been and doing say we is is furious ready business job we up the to costs will

That evidenced can, as that underpin still XXXX, However, of as to having as I very believe into strong given will on now and I they our a that that conditions. our diversity lag two definitely demand. year do think numbers, catching I that wet look very know is being there focused based have some we about rest, based was but months conditions geographic team is portfolio thing across is up businesses of may demand occur said, nice the the on a fast on bleed guidance Texas our business. a in this and and we QX stick our as a

Garik Shmois

again. Thanks

Anne Noonan

Garik. Thanks


And Ng line Jefferies. your question next comes of Phil from the with

Collin Verron

headwinds the Can of actually And points business. Thank cement of decline you Collin Phil. how of is basis through just us magnitude of are through potentially taking the rest This XXX thinking for margin in saw the Hi. for the question. on different you those my and you XXXX? gross walk quantify the about you drivers

Anne Noonan

Collin. Yes. or It’s Nice X.X% price up Basically, volume at to cement, you you. look – saw our in numbers, you X.X%. meet QX if our overall, up thanks,

one And backdrop. performing the really element our drove drove one and had our the overhead Really some downtime production caused and facilities that business that well. recovery. what lower that we key that’s lower in of is it’s down, really was margins So, in –

impact So, say, that was a on our a would temporary slight margins. impact, I

our in also are the team to evidenced out their come volume price are done some around initiatives excellence that has to success, supply and benefit I we commercial of on us. think have the chain reap efforts that and and starting this

past operational that in we and up running point the at the business cement pleased our we is issue this overall, and well are we with So time. are where pretty had is, team and

and still good progress are full waiting America facility and Green our year we production year-to-date with have We for made the the that progresses implementation Recycling to we done here. get as of But hope team.

Collin Verron

for color. the you Thank


Brent Thielman D.A. Your the line next with Davidson. comes question of from

Brent Thielman

historically? align you much wondering quickly. been time fast you thinking and markets Thank are Hi. what you. the that you less it about about prioritized or haven’t particularly perhaps about markets may for I divestiture like program, how than you to in, the looks include whether an current footprint in Anne nearing look some with those your am these Horizon are obviously start this a you new Summit of are leverage done guess of that and X, goal Xx pretty to emphasis identified Brian, half geographies off invest I

Anne Noonan

and for our – investment from our thanks the into and inorganic. around activities an we organic both are Horizon say would well perspective, fine-tuning discussions have Brent, X we question. Yes, I

is We acquisitions, a where still in six and we there much actively of working continue are our be. do believe and would bolt-on of core said we primary of We fragmentation are five number where the we lot is that we can market opportunity M&A markets around there our strength those. pretty to enough a target

changed. hasn’t that So,

March those the point, and have to doing actively element, We is that. and our infrastructure to around analysis. Horizon we also on that look we X we spread your will in are said place key And that reach adjacencies markets our a at already, in XXth, leverage core off

rural, but time reaching than our our I so leadership, goals on other come of never goals, with have geographies, applied discipline margins discussions ROIC. over number in achieving particular and our we frankly, more very the number XX% pleased, are greater one X. them very really to-date, EBITDA And to have been look being this We teams and XX% Horizon two we is market exurban, at about said won’t which or how

Brent Thielman

Okay. Thank you. Best of luck.

Anne Noonan

Thanks Brent.


line Your next the Difficulty] of from David [Technical question comes

Unidentified Analyst

turn. my I everyone. morning my first Good just I presume Yes. name. heard it’s


Please Your go open. line is ahead.

Unidentified Analyst


call. guess time any be will and there to an the next infrastructure Davids presumably, the now Apologies talk, other we Anne, Okay. bill. on between I

stands on by So, the proposals opportunities begin expect bill I would infrastructure through to where, you geographic Summit? just the revenue And see the for it maybe guess you by coming guess immediate or to expect would through? product, look as that today, region quickly I most as how you

Anne Noonan

had with infrastructure the I great Clearly, proposed are authorization very current versus Congress. a pass $X the a made hard Yes, trillion surface gives package and that. in bill the X-year through fast billion. $XX the to progress Senate from I wish nice forward transportation look billion bump David, funding $XX up will answer by to I to we encouraged say seeing it

all see we raising So, frankly. ships, as that

understand very over Now geographies. general, to specifically exact of states. we confidence One, in factors. I all there funding But need in say our and providing robust. businesses would it of impacts all coming and the our our be weeks and how the details is what three It’s would is months state

near-term and in the to pricing Secondly, the over to long-term. it constructive volume near should be

we right So, that still and know answer we the ships, now, the forward that But geography funding the look the exact through extremely would increase, as basic raise all see details. going positive to are to state, it through we working and to Congress. but love

Unidentified Analyst

Good much. luck. Thanks very

Anne Noonan

David. Thanks


with Davis. And Thalhimer from of line Thompson Adam your next comes the question

Adam Thalhimer

morning Good Hi. guys.

back quick of the forward? on balance cash sheet half, cash deployment probably thoughts grows the going a in just your up and further is Just question, piling

Brian Harris

want so have that obviously had deploy flexible. that Adam effective and in remarks position position a thanks we about the question. way. Anne possible in most We needs capital Yes, can right stay to it prepared we have liquidity the that talked that to cash CapEx deployment so for the obviously healthy it’s now. we maintain for

now, position are comfortable right that though. the we have We with cash


line of And with from your Anthony question the next Pettinari comes Citigroup.

Unidentified Analyst

maybe like capacity. I utilization some operating but [indiscernible] don’t and sitting Anthony. This in competitors tightening wondering, of market you is just full is was that your cement rates, understanding near just for to the out give

of ‘XX, ‘XX put be there? maybe Just limit what volume looking have any do room does and upper kind could your growth capacity or on at into cement you wiggle

Anne Noonan

Well, general, to assume all, get Asher, pricing margins. correct. on because expand utilization business entire high deliberately capacity is we is rates value its we to them in very as But strong, footprint, you talk continue frankly. and utilization this very don’t We needs rates are rates. to is high We are demand across to hard there have very our utilization it that and focused continue

also make have at need meeting needs, However, right sure we supply which laser-focused amount our they we time. customers’ the on are the to means right of

import, limited So, margin. amount of lower which we do a at is a

our meet and encourage pricing to So, that. we the balance needs very value get to customer that carefully to

is utilization I So if remain say and would entire you rates into look the at we strong ‘XX, industry. overall, demand that PCA etcetera, will I ‘XX build forecasted as look to be high across forecasts, infrastructure and that expect

will for it our pricing getting needs value meeting matter customers’ So, and of the be we provide. a service

Unidentified Analyst

over. turn helpful. will that’s Okay, I


Markets. Your question from next RBC line Capital Mike comes of Dahl with the

Unidentified Analyst

Collins for on my Thanks is taking This for Hi. questions. Chris Mike.

divestiture are meaningfully deploying are where sitting be down Just in are you of whether of capital priorities about below kind thinking and naturally of you de-lever kind to target? set $XXX given towards today, taking the target would million one the deployment, Xx kind investments you versus another proceeds, capital that here, that your more how on that leverage internal allocation from

Anne Noonan

we And to leverage. remain our leverage, that. and process very manage on we the right, doing of to reduce are our commitment focused clearly, Well, in

capital We to see that. are the capital We cost bring lowest our of proving to continuing and as our highest the evaluate to return. job drive structure

is So, use capital. look so But the also debt one best factors, clearly, when of a couple cash, I of about those sustaining opportunities. think other at we repayment of

means that our investment. greenfield does mean? what So, It

We have resource. depleting a

sustainable in investment greenfield organic is growth. our continuous So, critical to

investment our under equipment support to addition to in is that, the sustaining to fixed critical keep bucket. operating In our growth and mobile plants earnings

deploy core in team doing our very to capital And really shareholders. opportunities would and for of and focused one market be our return overall going capital Elevate our our a our in to leadership increase also are identified we still targets to meet is company. on we use judicious being this bubbling to Summit, then a positions. as number M&A say capital allocation and or I with of two grow be this Secondly, on is our up have is And to strength ROIC, what our from strategy us number

and overall, improved our So ROIC. organic when I capital you measure think margins, accelerated of is allocation, leverage, how can inorganic expanded and us reduced growth,

we So, aggressive the have set targets.

committed are them. to doing We

So, of cash. to stewards our have balance good – will be we shareholders’ we

Unidentified Analyst

I Understood. the appreciate color.

Anne Noonan

you, Chris. Thank


And line your Revich of with Sachs. from last comes Goldman the Jerry question

Jerry Revich

a morning. Good the some owners solutions Hi. just expand be wondering if able I to take reached might Yes. split the more were folks mean business those the fits of this am businesses have it asset-light a essentially to vertically-integrated Anne does gate to the forward profile? exit similar going acquisitions, and of you buyers around could out why you if of assets. And you it importantly, Thanks. those that better and for be able up

Anne Noonan

asset-light. our for generally, our at question. is are one over or that, don’t not in have when where we asset-light Yes, that criteria you as XX% saying look that about, number are two. same number We we we remarks, competitors. And the I confident divestitures, prepared we look talked Great believe, the said Thanks, result of Jerry. reason the in will in we

also the of with which partners bringing divestitures our about, to basis an this fit approaches pull-through partnership aggregates while that have long-term back bringing quarter, industry into talked our of we our a And for on three We customers, opportunity were all partner and value existing each to strengthen to the shareholders. an asset-light us category.

so customers other, In fact, our into two either through industry to case one in all pull the fit aggregates. great partner they and opportunity in

It number And the number acquisition. we question criteria with been will much same our two or pleased we that the know criteria. be criteria part that do. stuck the – on in and is that, primary be putting targets doesn’t way exact invest doing acquisition has your upstream, integrated. stick we markets. great we divestitures and are If team that’s the really job everything and/or where one in too versus to something partnerships the buy we very we vertically remain very an Great to to have to of meet lens So, and of to an with it we that downstream have downstream open of on and our a will that much

Jerry Revich

Thanks. Okay.

Anne Noonan

Jerry. Thanks


the call We remarks. Anne over have turn our I allotted time for to for closing reached Q&A. will now

Anne Noonan

Thank to and would you, for you you messages. like thank operator, joining all three us. I with leave

at aggregates, First, place thereof. key paving cement, the markets Summit right and/or the and rural require all concrete, ready-mix in is or coalescing right time. in exurban Summit’s some form of are Megatrends combination a asphalt and

our improved seeing started. but today leverage quarter, not we of are our signs markedly all Elevate linear trajectory and we ratio, where Second, It be margin goals. are success ROIC upward a Summit may towards each versus early EBITDA

busiest long-term one on sustainable is we of any That business geography. Thank appreciate and the across creating today. our halfway care. Take and support through finally, your safety, are for Horizon now excellence to time proceeds. volume goals commercial are or and X call. you. Bye. drive a that market towards to price and divestitures I And year, our culture growth the season the concludes not We of dependent operational


call. this concludes Ladies disconnect. you participating may Thank now conference you gentlemen, for and today’s and