Record Quarterly Net Income
Strongest Balance Sheet in Company History
Net Leverage Ratio remains below Elevate Summit
target
Summit Materials, Inc. (NYSE: SUM) (“Summit,” “Summit
Materials,” "Summit Inc." or the “Company”), a leading vertically
integrated construction materials company, today announced results
for the second quarter ended July 2, 2022 (“second quarter”). All
comparisons are versus the quarter ended July 3, 2021 unless noted
otherwise.
Three months ended
($ in thousands)
July 2, 2022
July 3, 2021
% Chg vs. PY
Net revenue
$
631,918
$
618,530
2.2
%
Operating income
111,236
95,923
16.0
%
Net income
192,766
57,758
233.7
%
Basic EPS
$
1.61
$
0.48
235.4
%
Adjusted Cash Gross Profit
202,349
200,201
1.1
%
Adjusted EBITDA
164,034
163,792
0.1
%
"Today, Summit is reporting record quarterly earnings and the
lowest net leverage in Company history as we continue to
successfully execute on our Elevate Strategy," commented Anne
Noonan, Summit Materials President and CEO. "In 2022, we have
already achieved a mid to high single digit price increases in each
line of business, with asphalt achieving double digit price
increases. We continue to characterize current market conditions as
favorable towards the potential for additional price increases. Our
portfolio optimization efforts are enhancing the contributions from
materials and opening up opportunities to invest strategically. We
are pulling all available self-help margin levers to improve
performance and offset inflation. We are maintaining our 2022
Adjusted EBITDA guidance and remain confident that Summit Materials
is on track for another year of strong performance."
Brian Harris, CFO of Summit Materials, added, "Armed with the
strongest balance sheet in Summit history, we are well positioned
to pursue a broad range of high return capital allocation
priorities that are value creative to Summit shareholders. As part
of our Horizon Two objective, we will invest to grow priority
markets. To us, that means advancing our market leadership position
through growth initiatives, including greenfields, as well as
pursuing attractive M&A opportunities that align with our
portfolio optimization criteria. This financial flexibility
together with sound execution sets Summit Materials up for growth
and strong returns."
In the three months ended July 2, 2022, Summit Materials sold
one business in the East segment, resulting in cash proceeds of
$293.9 million and a total gain on disposition of $156.1 million.
To date, as part of its Elevate Summit Strategy, the Company has
received $470.1 million in proceeds from a total of ten
divestitures.
During the three months ended July 2, 2022, Summit Materials
repaid $72.4 million of its term loan under provisions related to
the divestitures of businesses.
2022 Guidance
For the full year 2022, Summit is reiterating its Adjusted
EBITDA guidance of approximately $500 million to $530 million, and
continues to expect 2022 capital expenditures of approximately $270
million to $290 million, including greenfield projects.
Second Quarter 2022 | Total Company
Results
Net Revenue increased $13.4 million, or 2.2% in the
second quarter to $631.9 million, due to increases in average sales
prices across all lines of business that more than offset volume
declines due primarily to divestitures.
Operating income increased $15.3 million, or 16.0% in the
second quarter to $111.2 million, primarily as net revenue gains
and decreases in depletion, amortization and accretion expenses
outpaced increases in cost of revenue. Summit's operating margin
percentage for the three months ended July 2, 2022 increased to
17.6% from 15.5%, from the comparable period a year ago.
Net income attributable to Summit Inc. increased to
$190.1 million, or $1.61 per basic share, compared to $56.7
million, or $0.48 per basic share in the comparable prior year
period. Summit reported adjusted diluted net income of $71.8
million, or $0.60 per adjusted diluted share as compared to $58.0
million, or $0.49 per adjusted diluted share in the prior year
period.
Adjusted EBITDA increased $0.2 million, or 0.1% to $164.0
million as net revenue growth was mostly offset by higher cost of
revenue.
Second Quarter 2022 | Results by Line
of Business
Aggregates Business: Aggregates net revenues increased by
$8.0 million to $161.5 million in the second quarter. Aggregates
adjusted cash gross profit margin decreased to 53.7% in the second
quarter as compared to 55.9% in the second quarter 2021. Aggregates
sales volume decreased 1.6% in the second quarter as solid organic
volume growth driven by the West Segment was more than offset by
volume decreases in certain markets due to divestitures. Average
selling prices for aggregates increased 4.7% in the second quarter
with growth across both reporting segments.
Cement Business: Cement segment net revenues increased
9.1% to $93.7 million in the second quarter. Cement segment
adjusted cash gross profit margin increased to 48.6% in the second
quarter, compared to 47.2% in the prior year period, reflecting
strong pricing gains that more than offset higher variable costs.
Sales volume of cement decreased 0.4% and average selling prices
increased 7.5% in the second quarter.
Products Business: Products net revenues were $294.6
million in the second quarter, compared to $292.1 million in the
prior year period. Products adjusted cash gross profit margin
decreased to 18.2% in the second quarter, versus 18.8% in the prior
year period. Average sales price for ready-mix concrete increased
9.7% driven by pricing growth across the majority of markets, with
strong, double-digit growth in the Intermountain West and Texas.
Sales volumes of ready-mix concrete decreased 9.1% due to
divestitures and cement supply constraints. Average selling prices
for asphalt increased 18.9%, driven by strong pricing gains in
Texas and the Intermountain West market. Asphalt volume decreased
15.2% due primarily to the impact of divestitures.
Second Quarter 2022 | Results By
Reporting Segment
West Segment: The West Segment operating income increased
17.6% to $62.6 million and Adjusted EBITDA increased 7.5% to $84.6
million in the second quarter due primarily to pricing gains and
aggregates volume growth that more than offset lower downstream
volumes and inflationary cost conditions. Aggregates revenue in the
second quarter increased 11.8% on 4.2% pricing growth and 7.3%
volume growth, which was driven by strong demand conditions in
Texas and British Columbia. Ready-mix concrete revenue in the
second quarter increased 10.7% as 11.2% pricing growth was
partially offset by lower volumes in the Intermountain West and
North Texas. Asphalt revenue increased 10.8% in the second quarter
as volumes decreased 5.0%, due to a divestiture made in the second
quarter of 2021. Asphalt sales prices increased 19.2% in the
period.
East Segment: The East Segment operating income decreased
8.6% to $31.6 million and Adjusted EBITDA decreased 18.5% to $46.7
million in the second quarter. Lower operating income and Adjusted
EBITDA reflects increased cost of revenue that exceeded pricing
growth. Aggregates revenue decreased 4.1% versus the prior year
period. Aggregates volumes decreased 9.9% as growth in the Georgia
market was more than offset by divestitures and wet conditions in
Kansas. Average selling prices for aggregates increased 6.6% led by
strong growth in Georgia. Ready-mix concrete revenue decreased
37.0% as volumes decreased 38.2% due to divestitures. Excluding
divestitures, volumes were flat in the second quarter relative to
the year ago period. Ready-mix concrete average selling price
increased 1.8% in the period. Due to divestitures, asphalt revenue
decreased 22.0% as lower volumes were only partially offset by
pricing growth. Asphalt average selling prices increased 16.1% to
reflect increases in liquid asphalt costs.
Cement Segment: The Cement Segment operating income
increased 30.7% to $33.7 million in the second quarter. Adjusted
EBITDA increased $3.8 million as pricing gains and cost control
measures more than offset inflationary conditions. In the second
quarter, the Cement Segment reported a volume decrease of 0.4% and
average selling price growth of 7.5%.
Liquidity and Capital
Resources
As of July 2, 2022, the Company had $465.3 million in cash and
$1.5 billion in debt outstanding. The Company's $345 million
revolving credit facility has $324.6 million available after
outstanding letters of credit. For the quarter ended July 2, 2022,
cash flow provided by operations was $16.3 million and cash paid
for capital expenditures was $129.6 million.
In March 2022, Summit’s board authorized the Company’s first
ever share repurchase program. As of July 2, 2022, approximately
$202.5 million remained available under the share repurchase
program.
Webcast and Conference Call
Information
Summit Materials will conduct a conference call on Thursday,
August 4, 2022, at 11:00 a.m. eastern time (9:00 a.m. mountain
time) to review the Company’s second quarter 2022 financial
results, discuss recent events and conduct a question-and-answer
session.
A webcast of the conference call and accompanying presentation
materials will be available in the Investors section of Summit’s
website at investors.summit-materials.com. To listen to a live
broadcast, go to the site at least 15 minutes prior to the
scheduled start time in order to register, download, and install
any necessary audio software.
A webcast of the second quarter results conference call and
accompanying presentation materials will be available in the
Investors section of Summit’s website at
investors.summit-materials.com or at the following link:
https://events.q4inc.com/attendee/118298228
To participate in the live teleconference for second quarter
2022 financial results:
Domestic Live:
1-888-330-3416
International Live:
1-646-960-0820
Conference ID:
1542153
To listen to a replay of the teleconference, which will be
available through August 11, 2022:
Domestic Replay:
1-800-770-2030
International Replay:
1-647-362-9199
Conference ID:
1542153
About Summit Materials
Summit Materials is a leading vertically integrated
materials-based company that supplies aggregates, cement, ready-mix
concrete and asphalt in the United States and British Columbia,
Canada. Summit is a geographically diverse, materials-based
business of scale that offers customers a single-source provider of
construction materials and related downstream products in the
public infrastructure, residential and nonresidential end markets.
Summit has a strong track record of successful acquisitions since
its founding and continues to pursue growth opportunities in new
and existing markets. For more information about Summit Materials,
please visit www.summit-materials.com.
Non-GAAP Financial
Measures
The Securities and Exchange Commission (“SEC”) regulates the use
of “non-GAAP financial measures,” such as Adjusted Net Income
(Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Adjusted
EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit,
Adjusted Cash Gross Profit Margin, Free Cash Flow, Net Leverage and
Net Debt which are derived on the basis of methodologies other than
in accordance with U.S. generally accepted accounting principles
(“U.S. GAAP”). We have provided these measures because, among other
things, we believe that they provide investors with additional
information to measure our performance, evaluate our ability to
service our debt and evaluate certain flexibility under our
restrictive covenants. Our Adjusted Net Income (Loss), Adjusted
Diluted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Further
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross
Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow, Net
Leverage and Net Debt may vary from the use of such terms by others
and should not be considered as alternatives to or more important
than net income (loss), operating income (loss), revenue or any
other performance measures derived in accordance with U.S. GAAP as
measures of operating performance or to cash flows as measures of
liquidity.
Adjusted EBITDA, Adjusted EBITDA Margin, and other non-GAAP
measures have important limitations as analytical tools, and you
should not consider them in isolation or as substitutes for
analysis of our results as reported under U.S. GAAP. Some of the
limitations of Adjusted EBITDA are that these measures do not
reflect: (i) our cash expenditures or future requirements for
capital expenditures or contractual commitments; (ii) changes in,
or cash requirements for, our working capital needs; (iii) interest
expense or cash requirements necessary to service interest and
principal payments on our debt; and (iv) income tax payments we are
required to make. Because of these limitations, we rely primarily
on our U.S. GAAP results and use Adjusted EBITDA, Adjusted EBITDA
Margin and other non-GAAP measures on a supplemental basis.
Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA
Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit
Margin, Adjusted Net Income (Loss), Adjusted Diluted Net Income,
Adjusted Diluted EPS, Free Cash Flow, Net Leverage and Net Debt
reflect additional ways of viewing aspects of our business that,
when viewed with our GAAP results and the accompanying
reconciliations to U.S. GAAP financial measures included in the
tables attached to this press release, may provide a more complete
understanding of factors and trends affecting our business. We
strongly encourage investors to review our consolidated financial
statements in their entirety and not rely on any single financial
measure. Reconciliations of the non-GAAP measures used in this
press release are included in the attached tables. Because GAAP
financial measures on a forward-looking basis are not accessible,
and reconciling information is not available without unreasonable
effort, we have not provided reconciliations for forward-looking
non-GAAP measures. For the same reasons, we are unable to address
the probable significance of the unavailable information, which
could be material to future results.
Cautionary Statement Regarding
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the federal securities laws, which involve risks and
uncertainties. Forward-looking statements include all statements
that do not relate solely to historical or current facts, and you
can identify forward-looking statements because they contain words
such as “believes,” “expects,” “may,” “will,” “should,” “seeks,”
“intends,” “trends,” “plans,” “estimates,” “projects” or
“anticipates” or similar expressions that concern our strategy,
plans, expectations or intentions. All statements made relating to
our estimated and projected earnings, margins, costs, expenditures,
cash flows, growth rates and financial results are forward-looking
statements. These forward-looking statements are subject to risks,
uncertainties and other factors that may cause our actual results,
performance or achievements to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. We derive many of our forward-looking
statements from our operating budgets and forecasts, which are
based upon many detailed assumptions. While we believe that our
assumptions are reasonable, it is very difficult to predict the
effect of known factors, and, of course, it is impossible to
anticipate all factors that could affect our actual results. In
light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by us or any
other person that the results or conditions described in such
statements or our objectives and plans will be realized. Important
factors could affect our results and could cause results to differ
materially from those expressed in our forward-looking statements,
including but not limited to the factors discussed in the section
entitled “Risk Factors” in Summit Inc.’s Annual Report on Form 10-K
for the fiscal year ended January 1, 2022, as filed with the SEC,
and any factors discussed in the section entitled “Risk Factors” in
any of our subsequently filed SEC filings.
- the impact of the COVID-19 pandemic, and responses to it,
including vaccine mandates, or any similar crisis, on our
business;
- our dependence on the construction industry and the strength of
the local economies in which we operate;
- the cyclical nature of our business;
- risks related to weather and seasonality;
- risks associated with our capital-intensive business;
- competition within our local markets;
- our ability to execute on our acquisition strategy,
successfully integrate acquisitions with our existing operations
and retain key employees of acquired businesses;
- our dependence on securing and permitting aggregate reserves in
strategically located areas;
- declines in public infrastructure construction and delays or
reductions in governmental funding, including the funding by
transportation authorities and other state agencies;
- our reliance on private investment in infrastructure, which may
be adversely affected by periods of economic stagnation and
recession;
- environmental, health, safety and climate change laws or
governmental requirements or policies concerning zoning and land
use;
- costs associated with pending and future litigation;
- rising prices for, or more limited availability of,
commodities, labor and other production and delivery inputs as a
result of inflation, supply chain challenges or otherwise;
- conditions in the credit markets;
- our ability to accurately estimate the overall risks,
requirements or costs when we bid on or negotiate contracts that
are ultimately awarded to us;
- material costs and losses as a result of claims that our
products do not meet regulatory requirements or contractual
specifications;
- cancellation of a significant number of contracts or our
disqualification from bidding for new contracts;
- special hazards related to our operations that may cause
personal injury or property damage not covered by insurance;
- unexpected factors affecting self-insurance claims and reserve
estimates;
- our substantial current level of indebtedness, including our
exposure to variable interest rate risk;
- our dependence on senior management and other key personnel,
and our ability to retain and attract qualified personnel;
- supply constraints or significant price fluctuations in the
electricity and petroleum-based resources that we use, including
diesel and liquid asphalt;
- climate change and climate change legislation or
regulations;
- unexpected operational difficulties;
- interruptions in our information technology systems and
infrastructure; including cybersecurity and data leakage risks;
and
- potential labor disputes, strikes, other forms of work stoppage
or other union activities.
All subsequent written and oral forward-looking statements
attributable to us, or persons acting on our behalf, are expressly
qualified in their entirety by these cautionary statements. Any
forward-looking statement that we make herein speaks only as of the
date of this press release. We undertake no obligation to publicly
update or revise any forward-looking statement as a result of new
information, future events or otherwise, except as required by
law.
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Consolidated Statements
of Operations
($ in thousands, except share and
per share amounts)
Three months ended
Six months ended
July 2,
July 3,
July 2,
July 3,
2022
2021
2022
2021
Revenue:
Product
$
542,939
$
527,800
$
898,608
$
882,034
Service
88,979
90,730
125,805
134,977
Net revenue
631,918
618,530
1,024,413
1,017,011
Delivery and subcontract revenue
54,636
49,387
83,088
78,750
Total revenue
686,554
667,917
1,107,501
1,095,761
Cost of revenue (excluding items shown
separately below):
Product
360,356
346,697
650,701
623,831
Service
69,213
71,632
103,796
111,829
Net cost of revenue
429,569
418,329
754,497
735,660
Delivery and subcontract cost
54,636
49,387
83,088
78,750
Total cost of revenue
484,205
467,716
837,585
814,410
General and administrative expenses
47,651
47,448
99,575
99,090
Depreciation, depletion, amortization and
accretion
47,157
58,233
98,350
114,569
Gain on sale of property, plant and
equipment
(3,695
)
(1,403
)
(4,950
)
(3,172
)
Operating income
111,236
95,923
76,941
70,864
Interest expense
20,599
24,216
40,748
48,402
Tax receivable agreement expense
954
—
954
—
(Gain) loss on sale of businesses
(156,053
)
236
(170,258
)
(15,432
)
Other income, net
(977
)
(4,695
)
(1,673
)
(9,584
)
Income from operations before taxes
246,713
76,166
207,170
47,478
Income tax expense
53,947
18,408
49,204
12,965
Net income
192,766
57,758
157,966
34,513
Net income attributable to Summit Holdings
(1)
2,653
1,099
2,145
371
Net income attributable to Summit Inc.
$
190,113
$
56,659
$
155,821
$
34,142
Earnings per share of Class A common
stock:
Basic
$
1.61
$
0.48
$
1.31
$
0.29
Diluted
$
1.60
$
0.48
$
1.31
$
0.29
Weighted average shares of Class A common
stock:
Basic
118,242,880
117,637,036
118,590,173
116,650,881
Diluted
118,681,507
118,585,398
119,394,954
117,832,026
_______________
(1) Represents portion of business owned
by pre-IPO investors rather than by Summit.
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Consolidated Balance Sheets
($ in thousands, except share and
per share amounts)
July 2,
January 1,
2022
2022
(unaudited)
(audited)
Assets
Current assets:
Cash and cash equivalents
$
465,315
$
380,961
Accounts receivable, net
327,266
287,226
Costs and estimated earnings in excess of
billings
37,813
7,600
Inventories
209,875
180,760
Other current assets
14,393
11,827
Current assets held for sale
1,799
1,236
Total current assets
1,056,461
869,610
Property, plant and equipment, less
accumulated depreciation, depletion and amortization (July 2, 2022
- $1,219,120 and January 1, 2022 - $1,266,513)
1,785,844
1,842,908
Goodwill
1,144,282
1,163,750
Intangible assets, less accumulated
amortization (July 2, 2022 - $13,824 and January 1, 2022 -
$15,269)
68,375
69,396
Deferred tax assets, less valuation
allowance (July 2, 2022 - $1,113 and January 1, 2022 - $1,675)
161,942
204,566
Operating lease right-of-use assets
31,407
30,150
Other assets
42,492
58,745
Total assets
$
4,290,803
$
4,239,125
Liabilities and Stockholders’
Equity
Current liabilities:
Current portion of debt
$
6,354
$
6,354
Current portion of acquisition-related
liabilities
12,846
13,110
Accounts payable
167,643
128,232
Accrued expenses
133,810
147,476
Current operating lease liabilities
6,504
6,497
Billings in excess of costs and estimated
earnings
5,805
7,401
Total current liabilities
332,962
309,070
Long-term debt
1,516,705
1,591,019
Acquisition-related liabilities
23,849
33,369
Tax receivable agreement liability
327,501
326,548
Noncurrent operating lease liabilities
30,186
28,880
Other noncurrent liabilities
118,798
127,027
Total liabilities
2,350,001
2,415,913
Stockholders’ equity:
Class A common stock, par value $0.01 per
share; 1,000,000,000 shares authorized, 118,114,612 and 118,705,108
shares issued and outstanding as of July 2, 2022 and January 1,
2022, respectively
1,182
1,188
Class B common stock, par value $0.01 per
share; 250,000,000 shares authorized, 99 shares issued and
outstanding as of July 2, 2022 and January 1, 2022
—
—
Additional paid-in capital
1,336,375
1,326,340
Accumulated earnings
587,283
478,956
Accumulated other comprehensive income
4,193
7,083
Stockholders’ equity
1,929,033
1,813,567
Noncontrolling interest in Summit
Holdings
11,769
9,645
Total stockholders’ equity
1,940,802
1,823,212
Total liabilities and stockholders’
equity
$
4,290,803
$
4,239,125
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Consolidated Statements
of Cash Flows
($ in thousands)
Six months ended
July 2,
July 3,
2022
2021
Cash flows from operating activities:
Net income
$
157,966
$
34,513
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, amortization and
accretion
107,511
118,430
Share-based compensation expense
10,156
10,190
Net gain on asset and business
disposals
(174,902
)
(18,390
)
Change in deferred tax asset, net
44,160
2,743
Other
(357
)
92
Decrease (increase) in operating assets,
net of acquisitions and dispositions:
Accounts receivable, net
(57,797
)
(60,829
)
Inventories
(58,092
)
(14,606
)
Costs and estimated earnings in excess of
billings
(36,165
)
(21,475
)
Other current assets
(2,130
)
(3,925
)
Other assets
(593
)
4,927
(Decrease) increase in operating
liabilities, net of acquisitions and dispositions:
Accounts payable
39,602
26,858
Accrued expenses
(11,108
)
(4,496
)
Billings in excess of costs and estimated
earnings
(737
)
(2,031
)
Tax receivable agreement liability
954
7,132
Other liabilities
(2,214
)
(4,482
)
Net cash provided by operating
activities
16,254
74,651
Cash flows from investing activities:
Acquisitions, net of cash acquired
(1,933
)
(7,271
)
Purchases of property, plant and
equipment
(129,580
)
(132,723
)
Proceeds from the sale of property, plant
and equipment
5,427
6,806
Proceeds from sale of businesses
341,741
103,649
Other
(1,098
)
(27
)
Net cash provided by (used in) investing
activities
214,557
(29,566
)
Cash flows from financing activities:
Payments on debt
(86,821
)
(17,433
)
Payments on acquisition-related
liabilities
(11,577
)
(8,378
)
Distributions from partnership
(25
)
—
Repurchases of common stock
(47,509
)
—
Proceeds from stock option exercises
123
31,766
Other
(187
)
(417
)
Net cash (used in) provided by financing
activities
(145,996
)
5,538
Impact of foreign currency on cash
(461
)
293
Net increase in cash
84,354
50,916
Cash and cash equivalents—beginning of
period
380,961
418,181
Cash and cash equivalents—end of
period
$
465,315
$
469,097
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Revenue Data by Segment
and Line of Business
($ in thousands)
Three months ended
Six months ended
July 2,
July 3,
July 2,
July 3,
2022
2021
2022
2021
Segment Net Revenue:
West
$
352,510
$
313,617
$
588,512
$
548,361
East
185,757
219,091
296,025
342,159
Cement
93,651
85,822
139,876
126,491
Net Revenue
$
631,918
$
618,530
$
1,024,413
$
1,017,011
Line of Business - Net Revenue:
Materials
Aggregates
$
161,480
$
153,496
$
284,873
$
270,884
Cement (1)
86,815
82,169
129,369
120,308
Products
294,644
292,135
484,366
490,842
Total Materials and Products
542,939
527,800
898,608
882,034
Services
88,979
90,730
125,805
134,977
Net Revenue
$
631,918
$
618,530
$
1,024,413
$
1,017,011
Line of Business - Net Cost of
Revenue:
Materials
Aggregates
$
74,789
$
67,734
$
153,398
$
136,031
Cement
41,323
41,672
84,808
79,032
Products
241,098
237,343
408,751
408,963
Total Materials and Products
357,210
346,749
646,957
624,026
Services
72,359
71,580
107,540
111,634
Net Cost of Revenue
$
429,569
$
418,329
$
754,497
$
735,660
Line of Business - Adjusted Cash Gross
Profit (2):
Materials
Aggregates
$
86,691
$
85,762
$
131,475
$
134,853
Cement (3)
45,492
40,497
44,561
41,276
Products
53,546
54,792
75,615
81,879
Total Materials and Products
185,729
181,051
251,651
258,008
Services
16,620
19,150
18,265
23,343
Adjusted Cash Gross Profit
$
202,349
$
200,201
$
269,916
$
281,351
Adjusted Cash Gross Profit Margin (2)
Materials
Aggregates
53.7
%
55.9
%
46.2
%
49.8
%
Cement (3)
48.6
%
47.2
%
31.9
%
32.6
%
Products
18.2
%
18.8
%
15.6
%
16.7
%
Services
18.7
%
21.1
%
14.5
%
17.3
%
Total Adjusted Cash Gross Profit
Margin
32.0
%
32.4
%
26.3
%
27.7
%
_______________
(1) Net revenue for the cement line of
business excludes revenue associated with hazardous and
non-hazardous waste, which is processed into fuel and used in the
cement plants and is included in services net revenue.
Additionally, net revenue from cement swaps and other
cement-related products are included in products net revenue. (2)
Adjusted cash gross profit is calculated as net revenue by line of
business less net cost of revenue by line of business. Adjusted
cash gross profit margin is defined as adjusted cash gross profit
divided by net revenue. (3) The cement adjusted cash gross profit
includes the earnings from the waste processing operations, cement
swaps and other products. Cement line of business adjusted cash
gross profit margin is defined as cement adjusted cash gross profit
divided by cement segment net revenue.
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Volume and Price
Statistics
(Units in thousands)
Three months ended
Six months ended
Total Volume
July 2, 2022
July 3, 2021
July 2, 2022
July 3, 2021
Aggregates (tons)
16,820
17,091
30,223
30,600
Cement (tons)
705
708
1,046
1,048
Ready-mix concrete (cubic yards)
1,394
1,534
2,635
2,872
Asphalt (tons)
1,321
1,557
1,582
2,031
Three months ended
Six months ended
Pricing
July 2, 2022
July 3, 2021
July 2, 2022
July 3, 2021
Aggregates (per ton)
$
11.92
$
11.39
$
11.58
$
11.06
Cement (per ton)
128.57
119.64
128.52
118.68
Ready-mix concrete (per cubic yards)
131.63
119.94
129.45
119.18
Asphalt (per ton)
71.16
59.87
70.33
59.91
Three months ended
Six months ended
Percentage Change in
Percentage Change in
Year over Year Comparison
Volume
Pricing
Volume
Pricing
Aggregates (per ton)
(1.6
)%
4.7
%
(1.2
)%
4.7
%
Cement (per ton)
(0.4
)%
7.5
%
(0.2
)%
8.3
%
Ready-mix concrete (per cubic yards)
(9.1
)%
9.7
%
(8.3
)%
8.6
%
Asphalt (per ton)
(15.2
)%
18.9
%
(22.1
)%
17.4
%
Three months ended
Six months ended
Percentage Change in
Percentage Change in
Year over Year Comparison (Excluding
acquisitions)
Volume
Pricing
Volume
Pricing
Aggregates (per ton)
(2.3
)%
4.7
%
(2.1
)%
4.8
%
Cement (per ton)
(0.4
)%
7.5
%
(0.2
)%
8.3
%
Ready-mix concrete (per cubic yards)
(9.1
)%
9.7
%
(8.3
)%
8.6
%
Asphalt (per ton)
(15.2
)%
18.9
%
(22.1
)%
17.4
%
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Reconciliations of
Gross Revenue to Net Revenue by Line of Business
($ and Units in thousands, except
pricing information)
Three months ended July 2,
2022
Gross Revenue
Intercompany
Net
Volumes
Pricing
by Product
Elimination/Delivery
Revenue
Aggregates
16,820
$
11.92
$
200,535
$
(39,055
)
$
161,480
Cement
705
128.57
90,689
(3,874
)
86,815
Materials
$
291,224
$
(42,929
)
$
248,295
Ready-mix concrete
1,394
131.63
183,425
(68
)
183,357
Asphalt
1,321
71.16
94,022
(107
)
93,915
Other Products
102,183
(84,811
)
17,372
Products
$
379,630
$
(84,986
)
$
294,644
Six months ended July 2,
2022
Gross Revenue
Intercompany
Net
Volumes
Pricing
by Product
Elimination/Delivery
Revenue
Aggregates
30,223
$
11.58
$
349,961
$
(65,088
)
$
284,873
Cement
1,046
128.52
134,495
(5,126
)
129,369
Materials
$
484,456
$
(70,214
)
$
414,242
Ready-mix concrete
2,635
129.45
341,027
(107
)
340,920
Asphalt
1,582
70.33
111,239
(187
)
111,052
Other Products
178,148
(145,754
)
32,394
Products
$
630,414
$
(146,048
)
$
484,366
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Reconciliations of
Non-GAAP Financial Measures
($ in thousands, except share and
per share amounts)
The tables below reconcile our net income
to Adjusted EBITDA by segment for the three and six months ended
July 2, 2022 and July 3, 2021.
Reconciliation of Net Income to
Adjusted EBITDA
Three months ended July 2,
2022
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income
$
65,606
$
64,089
$
38,641
$
24,430
$
192,766
Interest (income) expense
(4,035
)
(2,714
)
(4,860
)
32,208
20,599
Income tax expense
987
—
—
52,960
53,947
Depreciation, depletion and
amortization
21,779
14,523
9,383
770
46,455
EBITDA
$
84,337
$
75,898
$
43,164
$
110,368
$
313,767
Accretion
233
392
77
—
702
Tax receivable agreement benefit
—
—
—
954
954
Gain on sale of businesses
—
(29,452
)
—
(126,601
)
(156,053
)
Non-cash compensation
—
—
—
4,734
4,734
Other
74
(144
)
—
—
(70
)
Adjusted EBITDA
$
84,644
$
46,694
$
43,241
$
(10,545
)
$
164,034
Adjusted EBITDA Margin (1)
24.0
%
25.1
%
46.2
%
26.0
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Three months ended July 3,
2021
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
55,447
$
37,035
$
33,230
$
(67,954
)
$
57,758
Interest (income) expense
(2,860
)
(2,176
)
(4,035
)
33,287
24,216
Income tax expense
1,198
156
—
17,054
18,408
Depreciation, depletion and
amortization
25,133
21,146
10,143
1,101
57,523
EBITDA
$
78,918
$
56,161
$
39,338
$
(16,512
)
$
157,905
Accretion
218
408
84
—
710
(Gain) loss on sale of businesses
(273
)
509
—
—
236
Non-cash compensation
—
—
—
4,827
4,827
Other
(92
)
206
—
—
114
Adjusted EBITDA
$
78,771
$
57,284
$
39,422
$
(11,685
)
$
163,792
Adjusted EBITDA Margin (1)
25.1
%
26.1
%
45.9
%
26.5
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Six months ended July 2,
2022
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
77,507
$
71,455
$
30,210
$
(21,206
)
$
157,966
Interest (income) expense
(8,005
)
(6,165
)
(9,822
)
64,740
40,748
Income tax expense (benefit)
1,163
(106
)
—
48,147
49,204
Depreciation, depletion and
amortization
46,127
32,407
16,881
1,519
96,934
EBITDA
$
116,792
$
97,591
$
37,269
$
93,200
$
344,852
Accretion
460
803
153
—
1,416
Tax receivable agreement benefit
—
—
—
954
954
Gain on sale of businesses
—
(43,657
)
—
(126,601
)
(170,258
)
Non-cash compensation
—
—
—
10,156
10,156
Other
84
93
—
—
177
Adjusted EBITDA
$
117,336
$
54,830
$
37,422
$
(22,291
)
$
187,297
Adjusted EBITDA Margin (1)
19.9
%
18.5
%
26.8
%
18.3
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Six months ended July 3,
2021
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
72,883
$
44,004
$
31,625
$
(113,999
)
$
34,513
Interest (income) expense
(4,892
)
(3,896
)
(8,080
)
65,270
48,402
Income tax expense
1,384
90
—
11,491
12,965
Depreciation, depletion and
amortization
50,057
42,620
18,211
2,205
113,093
EBITDA
$
119,432
$
82,818
$
41,756
$
(35,033
)
$
208,973
Accretion
434
877
165
—
1,476
Gain on sale of businesses
(273
)
(15,159
)
—
—
(15,432
)
Non-cash compensation
—
—
—
10,190
10,190
Other
(174
)
493
—
—
319
Adjusted EBITDA
$
119,419
$
69,029
$
41,921
$
(24,843
)
$
205,526
Adjusted EBITDA Margin (1)
21.8
%
20.2
%
33.1
%
20.2
%
_______________
(1) Adjusted EBITDA Margin is defined as
Adjusted EBITDA as a percentage of net revenue.
The table below reconciles our net income
attributable to Summit Materials, Inc. to adjusted diluted net
income per share for the three and six months ended July 2, 2022
and July 3, 2021. The per share amount of the net income
attributable to Summit Materials, Inc. presented in the table is
calculated using the total equity interests for the purpose of
reconciling to adjusted diluted net income per share.
Three months ended
Six months ended
July 2, 2022
July 3, 2021
July 2, 2022
July 3, 2021
Reconciliation of Net Income Per Share
to Adjusted Diluted EPS
Net Income
Per Equity Unit
Net Income
Per Equity Unit
Net Income
Per Equity Unit
Net Income
Per Equity Unit
Net income attributable to Summit
Materials, Inc.
$
190,113
$
1.59
$
56,659
$
0.47
$
155,821
$
1.30
$
34,142
$
0.29
Adjustments:
Net income attributable to noncontrolling
interest
2,653
0.02
1,099
0.02
2,145
0.02
371
—
(Gain) loss on sale of businesses, net of
tax
(121,935
)
(1.02
)
208
—
(127,569
)
(1.07
)
(11,654
)
(0.10
)
Adjusted diluted net income before tax
related adjustments
70,831
0.59
57,966
0.49
30,397
0.25
22,859
0.19
Tax receivable agreement expense
954
0.01
—
—
954
0.01
—
—
Adjusted diluted net income
$
71,785
$
0.60
$
57,966
$
0.49
$
31,351
$
0.26
$
22,859
$
0.19
Weighted-average shares:
Basic Class A common stock
118,099,059
117,436,461
118,438,200
116,423,833
LP Units outstanding
1,314,006
1,885,789
1,314,006
2,249,499
Total equity units
119,413,065
119,322,250
119,752,206
118,673,332
The following table reconciles operating
income to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit
Margin for the three and six months ended July 2, 2022 and July 3,
2021.
Three months ended
Six months ended
July 2,
July 3,
July 2,
July 3,
Reconciliation of Operating Income to
Adjusted Cash Gross Profit
2022
2021
2022
2021
($ in thousands)
Operating income
$
111,236
$
95,923
$
76,941
$
70,864
General and administrative expenses
47,651
47,448
99,575
99,090
Depreciation, depletion, amortization and
accretion
47,157
58,233
98,350
114,569
Gain on sale of property, plant and
equipment
(3,695
)
(1,403
)
(4,950
)
(3,172
)
Adjusted Cash Gross Profit (exclusive of
items shown separately)
$
202,349
$
200,201
$
269,916
$
281,351
Adjusted Cash Gross Profit Margin
(exclusive of items shown separately) (1)
32.0
%
32.4
%
26.3
%
27.7
%
_______________
(1) Adjusted Cash Gross Profit Margin is
defined as Adjusted Cash Gross Profit as a percentage of net
revenue.
The following table reconciles net cash
provided by operating activities to free cash flow for the three
and six months ended July 2, 2022 and July 3, 2021.
Three months ended
Six months ended
July 2,
July 3,
July 2,
July 3,
($ in thousands)
2022
2021
2022
2021
Net income
$
192,766
$
57,758
$
157,966
$
34,513
Non-cash items
(50,041
)
74,221
(13,432
)
113,065
Net income adjusted for non-cash items
142,725
131,979
144,534
147,578
Change in working capital accounts
(109,758
)
(36,010
)
(128,280
)
(72,927
)
Net cash provided by operating
activities
32,967
95,969
16,254
74,651
Capital expenditures, net of asset
sales
(67,818
)
(58,823
)
(124,153
)
(125,917
)
Free cash flow
$
(34,851
)
$
37,146
$
(107,899
)
$
(51,266
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220803005648/en/
Andy Larkin VP, Investor Relations
andy.larkin@summit-materials.com 720-618-6013
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