Summit Materials, Inc. Reports Second Quarter 2022 Results

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

)

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.