Suncrete, Inc. (RMIX) Earnings Call Transcript & Summary

Hello and welcome to Suncrete's Third Quarter 2026 Earnings Conference Call. Right now, everyone is in listen-only mode. After the formal presentation, there will be a short question and answer session. Should you need operator assistance at any point during the call, just press star zero on your telephone keypad. Please be aware that this conference is being recorded. I'll now hand the conference over to Rick Black with Investor Relations. Please go ahead. Thanks, Operator, and good morning.

Good morning, everyone, and thank you for joining us on the Sun Creek conference call, where we'll review the results for the third quarter of 2026. A webcast of this call is also available, and you can reach it via the audio link located on the events and presentations page within the investor relations section of suncrease.com. The information captured on this call is accurate only as of today, November 13, 2026. Please keep in mind that any time-sensitive information might no longer be accurate by the time of any replay, listening, or reading of a transcript. I'd also like to remind everyone that what we discuss today is not historical fact; any statements about expectations, future events, or future financial performance are forward-looking statements made under the safe harbor provision of the Private Securities Litigation Reform Act of 1995. During today's call we will make forward-looking statements that, by their very nature, are uncertain and beyond the company's control. Actual results could differ materially. Our earnings press release contains our disclosures regarding forward-looking statements. You can find these factors along with other risks and uncertainties described in detail in the company's filings with the Securities and Exchange Commission. Management will additionally refer to non-GAAP measures, among them adjusted net income, adjusted EBITDA, and supplemental adjusted EBITDA. Reconciliations to the nearest GAAP measures appear at the end of our earnings press release. Fund Suncrete undertakes no obligation to publicly update or revise any forward-looking statements; and with that out of the way, I'd like to hand the call over to Suncrete's CEO, Randall Edgar. Randall? Thank you, Rick, and good morning, everyone.

Joining us today are our chief financial officer, Tommy Wintroth, and Ned Fleming, our executive chairman, along with several other members of the management team. I'll begin by covering how we operated during the third quarter and the progress being made across the businesses we've acquired. After that, Tommy will review our financial results and the 2026 outlook, and then Ned will share his remarks before we open things up for questions. There are three key points I want investors to take away from the quarter. First, our local markets throughout the Sun Belt continue to be active, and I'm pleased with the operational performance that produced roughly 10% organic growth. On top of that, we raised the supplemental adjusted EBITDA margin. relative to Q2, that’s a 150-basis-point improvement. On top of that, revenue rose 45%, and supplemental adjusted EBITDA climbed 60% versus the prior quarter. The second key point: our plans for integrating acquisitions are moving forward as we anticipated, and a number of businesses are now getting close to Suncrete’s target margin levels; with our North Texas operation, we made a substantial advance on that front. Third, the pipeline for M&A is still strong. Our balance sheet provides the flexibility needed to keep carrying out our growth strategy. Before I go further, I want to express appreciation to the more than 1,100 employees for how they serve our customers and support each other. ReadyMix is a service business. Our product quality and delivery reliability rest on the local teams who run the plants, keep the equipment maintained, and engage with customers daily. We see people and culture as fundamental to our capacity to execute consistently, expand the business, and generate long-term value. Activity throughout the Sunbelt market drove volume growth both year over year and sequentially. Even so, we reduced our full-year outlook ranges to reflect present weakness in residential construction stemming from elevated interest rates, and several larger projects have been pushed back because of uncertainty following the midterm election and ongoing geopolitical concerns. We still feel good about the steady volume demand in our particular markets. We've been through comparable economic periods before, so we understand that plenty of fresh chances for growth and margin will emerge. The updated guidance mirrors proposed end-of-year schedules for integration in certain markets. We keep pushing our operating efforts forward and stay confident that we can deliver this year's acquisitions at the target margin profile. Across Suncrete's footprint, our markets are still underbuilt relative to the demand generated by Population Road in Oklahoma, Arkansas, North Texas, and Louisiana. That trend isn't slowing — population and business expansion throughout the Sun Belt keeps supporting long-term demand opportunities in commercial, infrastructure, and residential construction. Data centers make up a growing share of that mix. In Oklahoma, we currently have multiple projects under construction, and those should keep us busy through 2027. On top of that, throughout the areas where we operate, we keep seeing data center backlogs that stretch out at least two years. Our local ties and our track record of dependable execution on big, complicated pours give us an edge over competitors and leave us well positioned for this work. From the start, our strategy has been to cultivate a client mix that stays balanced among commercial, infrastructure, and residential building, and that has paid off for us when the economy has been uncertain. The level of activity varies from one sector to another and from one region to another, and solid relationships with customers are essential to the success we continue to enjoy. Now I'll move on to our expanding platform and to how we're bringing acquired companies on board. We continue to execute the playbook, and across every business we bought last quarter, progress is being made. In particular, North Texas is still very competitive, yet our results got better steadily as the quarter went on, which is reflected in the margin expansion. Five key areas form the core of our playbook: people and culture, procurement, commercial opportunities, logistics, and technology. People come first, and there we focus on keeping local leadership in place and integrating each team into a shared culture of safety and accountability. As for procurement, greater purchasing scale can improve the way we source materials, equipment, and maintenance services. On the commercial side, our broader capabilities can help local teams serve regional customers and go after projects that may previously have been unforeseen and beyond their reach. When it comes to logistics, our focus is on dispatch, routing, maintenance, and fleet productivity. Technology backs those efforts by giving teams improved visibility into how efficiently trucks are operating, how plants are performing, and what the financial results look like; we gauge progress using metrics like yards delivered per driver hour, plant and fleet utilization, on-time delivery, and profitability. Moving to strategy, the 2026 acquisitions give us a bigger revenue base for 2027 along with more chances to expand margins. Right now, we anticipate those acquisitions will add roughly 200 to 250 million in revenue during 2027. Thank you. Based on how projects line up and what the market does, this could add meaningfully for the full year; further integration of the business should help margins, and we look for gross profit to rise while SG&A increases at a slower pace than revenue. On costs, material price hikes are typically handled through annual base price adjustments to customers. We see only a modest overall cost effect in Q4 and intend to fold expected supplier increases into our usual 2027 pricing cycle. Our pipeline for acquisitions is still active. Advanced talks are underway with a number of prospects that would be strongly accretive, broadening current markets and moving into neighboring ones. We remain disciplined about deploying capital and believe our balance sheet can support future growth. Although a few purchases now look likely to close in the opening six months of 2027 rather than earlier, the count of prospects keeps growing. We remain dedicated to expanding the platform and folding in our operating approach so we can grow the business and lift operating results. As we gain density in the local markets we serve, we see a chance to reach additional customers, raise the productivity of our plants and trucks, and widen margins throughout the businesses we buy.

I'll hand things over now to Tommy. Thanks, Randall, and good morning to all of you. Just as a reminder, the results we posted for the third quarter include the complete contributions from every acquisition that has closed as of today. So let me walk through our third quarter results and the key financial metrics. Third quarter revenue came in at $141 million, which is a 45% rise versus the second quarter of 2026 and a 163% jump versus Q3 of last year. Net income for the third quarter was $76,000, compared with a net loss of $37.1 million in the second quarter of 2026, and net income of $4.6 million in the same quarter a year ago. Adjusted EBITDA for the third quarter totaled $22.4 million, which works out to a 15.9% adjusted EBITDA margin. That was up 66% from the second quarter of 2026 and up 64% from Q3 last year. Supplemental adjusted EBITDA in the third quarter reached $23.3 million, a 16.5% supplemental adjusted EBITDA margin. That figure rose 60% versus the second quarter of 2026 and 62% versus Q3 last year. GAAP and non-GAAP reconciliations for net income, adjusted EBITDA, and supplemental adjusted EBITDA can be found at the end of today's earnings release. Now on to the balance sheet: as of September 30th, total liquidity stood at roughly $206.5 million, which includes $49 million in cash and cash equivalents and $44.5 million of available capacity under our revolving loan facility. Moving to our outlook, we are today revising our 2026 guidance to the following ranges. Revenue of 408 to 434 million. Net loss of 48.7 to 44.7 million. Adjusted net loss of 21.8 to 17.8 million. Adjusted EBITDA of 60 to 64 million, and supplemental adjusted EBITDA of 63 to 67 million. With that, I'll turn the call over to our Executive Chairman, Ned Fleming.

Thanks, Tommy. Suncrete was designed to produce steady, profitable growth through organic expansion and disciplined acquisitions throughout the Sun Belt, and our team keeps pushing that strategy forward. As Randall noted, success in this business begins with people. Randall, Tommy, and Mark Jones head a phenomenal team that includes seasoned leaders plus more than 1,100 dedicated, disciplined employees across the organization executing day in and day out. Over the past 18 years, this team has led and expanded the business successfully, year after year. We're growing local market share by winning customer loyalty through dependable service, rigorous specifications for the materials required, and partnerships with high-quality suppliers. Our growth and acquisition model puts customer relationships first by backing local leadership and fostering an entrepreneurial culture, while at the same time supplying capital, expertise, and administrative services that support sustainable, profitable growth. Population gains and business expansion keep creating opportunities throughout our markets. Data centers, our customers, including projects under construction in Oklahoma, provide an additional source of demand into 2027. Our local relationships and our capacity to execute large, complex pours bolster our ability to win this work and carry it out. As we grow, we build market density, boost purchasing power, and raise fleet utilization in order to lift the margins of acquired businesses and generate attractive returns on invested capital; we plow the resulting cash flow back into our people, our operations, and further acquisitions. This repeatable model lets us scale Suncrete, sustain profitable growth, and compound shareholder value over time. Because of this, we believe Suncrete's future is very bright. And now we'd like to open the call for questions. Operator? Thank you. We will now begin a question and answer session. If you'd like to ask a question, please press star one on your telephone.

your phone’s keypad. When you hear a confirmation tone, that means your line has joined the question queue. If you want to take your question out of the queue, you can press star 2; those of you on speaker equipment might need to pick up your handset before pressing the star keys. Please hold for a moment while we pull for the first question. Our first question is from Catherine Thompson at Thompson Research. Please go ahead.

Morning to everyone, and thank you for being here and for your questions. Let me begin by... Morning. Morning. To start, I want to dig into several points from today's release — particularly the ones about bigger projects slipping into 27; many of the industry people we spoke with during our survey period brought that up. The causes varied. In some cases it was about moving past elections. In others, it was a pause tied to reauthorizing the upcoming federal highway bill. So essentially, that approach builds pressure on Congress, and then some cases simply reflect elevated rates. Looking at your business book and backlog, what's the breakdown across those three categories for project delays stretching into 2027?

Catherine, we still have a solid backlog at present, though you're right about several of the points you raised — we've observed a handful of jobs slipping somewhat, and we believe that ties to the election, the uncertainty over its result, and the geopolitical instability underway. But with the election now behind us, we expect matters to calm down again, and those jobs will likely return to the books. On the interest rate point you raised — everyone is aware that rates climbed, and that has done nothing to lift the residential segment. Our view is that conditions stay under pressure until rates reverse. That said, we still expect 207 to shape up as a solid year; we have several sizable projects kicking off right now in Q4, plus another one getting underway after the first quarter. On top of that, there's the integration side — we remain confident in our 12-to-18-month playbook, though for a few of these deals the timeline looks nearer to 18 months than 12. All in all, we're feeling good about 27.

All right, that helps. And could you also explain how this affects your margin profile? During the quarter, a few of the companies you acquired carry lower margins than the legacy business. Uh, how much of the quarter came from acquired assets diluting margins versus market pressures? And then as well, could you give us a bit more detail, since I know you're focused on improving your market mix. Put another way, you might accept a slightly lower top line in exchange for better overall margins, so what update can you share on what you're seeing from the acquired companies toward that margin improvement goal? Thank you.

Well, once more, Kevin, I think you basically put your finger on it. It's the acquisitions. And, once more, we remain confident we'll bring them to the margins, but that will take the 12- to 18-month window. So repeat the second part of your question.

How much of the impact in the quarter actually came from margins on acquisitions, as opposed to margin pressure you saw from the broader market in your legacy business?

Well, the legacy businesses are performing well. Again, our margins remain outstanding and continue to be so, and we believe we'll maintain them into 27. So again, it's a matter of lifting the acquisitions up to the legacy margin level. Okay, perfect. Excellent. Thank you. Thank you. Before we go to the next question, we'd like to quickly fix a number in our press release that relates to our outlook. Obviously, yesterday's massive email outage made things a challenge to work around. The good news is that the correct numbers represent an improvement, and I'll have Tommy take you through it. Tommy?.

For the full year 2026 guidance, the net loss figures were overstated. Here are the correct numbers. A net loss ranging from 43.685 million to 39.685 million, while adjusted net loss should come in between 16.81 million and 12.8 million. 1 million. Our revenue guidance, adjusted EBITDA guidance, and supplemental adjusted EBITDA guidance stay unchanged.

Thank you. The next question comes from Phil Eng with Jefferies. Please proceed.

All right, let's take the next question.

Hi folks, so I suppose this one's directed at you, Rando. As you mentioned, margins are still squeezed on a few of the deals you've brought in, but you come across as fairly positive and definitely reassuring about margins getting better quarter by quarter. Some of that is surely seasonal. If no further deals come along and we simply examine the business you have today, from an outsider's view we'll be watching EBITDA dollars along with EBITDA margins. Do you figure you'll be in a decent position where, first, your overall business posts year-over-year EBITDA margin expansion, say in the first half of next year, perhaps 2Q, or will it still require more time, since as you noted it's closer to an 18-month window rather than 12 months? Just help us frame how the integration work is coming along and what milestones we on the outside could watch to judge whether you're making headway? Well, the short answer is yes; we do believe we will; and comparing last quarter with this quarter, I think we've improved that by more than 150 basis points. That demonstrates progress on the acquisition, getting them aligned with our standards. Appreciate it. And 2027 looks like it'll be a strong year for us. We're entering it with a solid backlog. As I mentioned, projects are launching this month that are only just getting underway — it's a sizable one. So those will carry straight into 27; we've adapted to the residential downturn, and even so we've kept a reasonably good mix in our project work thanks to diversification. We expect volumes to rise, revenues to rise, and everything to be up in 2020. All right, but at this point you're not at ease projecting when that inflection might occur on a year-over-year basis? On our margins—well, we'll give the 2027 outlook, and at that point we anticipate meaningful growth, both through acquisitions and organically. Okay, that's helpful. Did freight, and simply inflation broadly, play a part in the margin compression during 3Q? Was your price-cost essentially neutral, low-compress, and what's the back-half outlook for the fourth quarter? And I think you sort of hinted at your suppliers announcing price increases—the Agris folks and the Cement folks, I believe, have price increases across the board. Does that help your cause when it comes to pushing price increases through 2027? On the question of whether we can push through some additional pricing and how we're handling the relationship between price and cost: yes — this is that point in the year when suppliers are issuing their price-increase notices. So we'll meet with those suppliers in a structured fashion and talk through what 2027 will look like. A practice we follow every year has worked well for us — it's essential, and it happens at this same time annually. Where we feel we have strong ability to pass the increase through, we will; where we think conditions may be somewhat tighter, we'll negotiate our way through it. Yes, we've managed over 20 years to hold our margins, and the total increases are.., at this same time each year. Okay, and was price cost a pinch point in the back half, or is this mostly demand? And just the incremental acquisitions. Sure, was price-cost a negative factor in how margins will affect you in 3Q and 4Q, or is this largely, you know — I'm sorry, you cut out on me there for a little while. The deals, and maybe volume has been somewhat softer; now, okay.

Yes, it was largely what you just said. Yes.

Okay, that's useful. Thanks. Thanks very much. Our next question is from Rohit Seth at B. Riley Securities. Go ahead.

Appreciate you fitting in my question. Regarding the materials margin, meaning revenue minus that NAGS figure, it came in at roughly 53% during the first half. Once the acquisitions were in for a full quarter, did that margin stay above 52% in Q3?

I'm not — we're struggling to hear you. Could you ask that once more, please? Yes, go ahead.

You're struggling to hear it. So regarding the materials margin, that was roughly 53% during the first half of the year. Did it stay above 52% this quarter, with the acquisitions included for the full quarter?

I'll pass that over to Tommy. It came in down slightly from 9%. You're down 9%? It's sort of like you're in a cave.

It's, it's difficult — it's difficult to follow. Can you hear me? Are you unable to hear me? Is that what you mean?

Much better now, Rogan, yes. All right, so your materials margin comes in at roughly 53% for the first half. Did it stay above 52% during the third quarter, given all the acquisitions in there? The acquisitions pulled it down a little. Okay. And what about plant and delivery costs? In the second they were 24% of sales versus 22% in the first. Could you give me a sense of where that stood in the third quarter, with the acquired fleets in your dispatch system? They came in better in the third quarter. Okay, so material margin lower, plant and delivery costs better. Okay. And then SG&A was around 31 million in 3Q. In August, I believe you said it would be roughly 25 million, so what's the appropriate quarterly run rate for the residue model going forward?

I'd say 31 million per quarter. That will rise somewhat, but we need to get ready for the growth we expect across 2027.