Summit Materials, Inc. Reports Third Quarter 2022 Results

Announces Acquisition of SCI Materials

Record Organic Pricing Growth for Aggregates, Cement, and Ready-mix

Record Adjusted Diluted Net Income

Strongest Balance Sheet in Company History

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 third quarter ended October 1, 2022 (“third quarter”). All comparisons are versus the quarter ended October 2, 2021 unless noted otherwise.

 

 

Three months ended

($ in thousands)

 

October 1, 2022

 

October 2, 2021

 

% Chg vs. PY

Net revenue

 

$

686,009

 

$

662,259

 

3.6

%

Operating income

 

 

127,062

 

 

125,017

 

1.6

%

Net income

 

 

87,651

 

 

75,378

 

16.3

%

Basic EPS

 

$

0.73

 

$

0.63

 

15.9

%

 

 

 

 

 

 

 

Adjusted Cash Gross Profit

 

 

217,811

 

 

230,304

 

(5.4

)%

Adjusted EBITDA

 

 

184,888

 

 

190,284

 

(2.8

)%

"Today, we are pleased to report that Summit Materials delivered record organic pricing growth across aggregates, cement, and ready-mix while achieving the lowest net leverage in Company history and the highest ROIC since we launched Elevate Summit," commented Anne Noonan, Summit Materials President and CEO. "These solid financial results in the face of market crosscurrents is thanks to continued execution of our Elevate Strategy and the commitment of our team to meet the opportunities of a dynamic marketplace. We are positioned to achieve strong pricing growth in 2022 driven, in large part, by double digit growth across all lines of business in the third quarter and catalyzed by accelerating aggregates and cement pricing. We continue to view the pricing environment as favorable and we expect to see substantial exit velocity heading into 2023.

"On portfolio optimization, recent transactions are evidence that Summit, equipped with the strongest balance sheet in Company history, is well positioned to play offense as we intentionally shift towards a more materials-led portfolio. Finally, our 2022 Adjusted EBITDA guidance has been adjusted to reflect 2022 performance to date, the additional divestiture we made in the third quarter, and the projected fourth quarter impacts from Hurricane Ian and low Mississippi River levels. The mid-point of the revised guide now represents mid-single-digit Adjusted EBITDA growth on a pro forma basis, which we feel represents very strong performance especially in light of a challenging macroeconomic backdrop."

Brian Harris, CFO of Summit Materials, added, "Our strong balance sheet and liquidity position affords us the unique opportunity to concurrently pursue multiple capital allocation priorities. We continue to make capital investments to sustain and drive organic growth while, at the same time, opportunistically buying back our own common stock when shares represent compelling value. And, more recently, we have taken steps to strengthen the portfolio via value creative M&A. With the acquisition of SCI Materials in October, we enter into the high-growth Florida market, expand the Summit footprint, and become more materials-led by adding an aggregates-based business to the portfolio. These moves are proof that we have a focused and intentional capital allocation approach and that we will use our financial flexibility and firepower to pursue the highest return opportunities for our shareholders."

In the three months ended October 1, 2022, Summit Materials sold one business in the East segment, resulting in cash proceeds of $32.0 million and a total gain on disposition of $4.1 million. To date, as part of its Elevate Summit Strategy, the Company has received $502.1 million in proceeds from a total of eleven divestitures.

On October 14, 2022, Summit completed the acquisition of SCI Materials, an aggregates-based business in the high-growth Florida market. SCI Materials is being integrated with Summit’s Georgia Stone Products business and will contribute to its East Segment.

2022 Guidance

For the full year 2022, Summit is revising its Adjusted EBITDA guidance to reflect performance over the first nine months of 2022, the divestiture of an asphalt and paving business in the East Segment, as well as impacts from Hurricane Ian and low Mississippi River levels that will impact the Company's fourth quarter. The Company now expects Adjusted EBITDA of approximately $490 million to $510 million, a revision from $500 million to $530 million previously. The Company now expects 2022 capital expenditures of approximately $240 million to $260 million, a revision from $270 million to $290 million previously.

Third Quarter 2022 | Total Company Results

Net Revenue increased $23.8 million, or 3.6% in the third quarter to $686.0 million, due to increases in average sales prices across all lines of business that more than offset the impact of divestitures.

Operating income increased $2.0 million, or 1.6% in the third quarter to $127.1 million, as net revenue gains combined with lower general & administrative expenses and decreases in depletion, amortization and accretion expenses more than offset increases in cost of revenue. Summit's operating margin percentage for the three months ended October 1, 2022 decreased to 18.5% from 18.9%, from the comparable period a year ago.

Net income attributable to Summit Inc. increased to $86.5 million, or $0.73 per basic share, compared to $74.2 million, or $0.63 per basic share in the comparable prior year period. Summit reported adjusted diluted net income of $84.2 million, or $0.71 per adjusted diluted share as compared to $81.5 million, or $0.68 per adjusted diluted share in the prior year period.

Adjusted EBITDA decreased $5.4 million, or 2.8% to $184.9 million reflecting the impact of divestitures and inflationary cost of revenue conditions that more than offset net revenue growth and lower general and administrative expenses relative to the prior year. Excluding the impacts of acquisitions and divestitures, Adjusted EBITDA would have grown in the third quarter.

Third Quarter 2022 | Results by Line of Business

Aggregates Business: Aggregates net revenues increased by $3.2 million to $163.5 million in the third quarter. Aggregates adjusted cash gross profit margin decreased to 53.3% in the third quarter as compared to 60.3% in the third quarter 2021. Aggregates sales volume decreased 9.0% in the third quarter due primarily to divestitures in the East Segment. Organic aggregates sales volumes declined 3.5% driven by a combination of unfavorable weather conditions and supply chain related disruptions. Average selling prices for aggregates increased 10.2% in the third quarter with solid growth across both reporting segments.

Cement Business: Cement segment net revenues increased 29.6% to $119.9 million in the third quarter. Cement segment adjusted cash gross profit margin decreased to 42.5% in the third quarter, compared to 47.4% in the prior year period as strong pricing gains were more than offset by higher variable costs and a greater proportion of sales from imports. Sales volume of cement increased 12.4% reflecting a healthy demand environment. Average selling prices increased 12.8% in the third quarter driven by compounding pricing actions taken in 2022 and a focus on value pricing.

Products Business: Products net revenues were $311.1 million in the third quarter, compared to $314.0 million in the prior year period. Products adjusted cash gross profit margin decreased to 19.5% in the third quarter, versus 21.0% in the prior year period. Organic average sales price for ready-mix concrete increased 18.8% driven by pricing growth across all markets, with strong, double-digit growth in the Intermountain West and South Texas. Organic sales volumes of ready-mix concrete decreased 1.3% due to cement supply constraints. Organic average selling prices for asphalt increased 17.8%, driven by strong pricing gains in Texas and the Intermountain West market. Organic asphalt sales volume decreased 0.9% including lower sales volumes in North Texas and Virginia markets.

Third Quarter 2022 | Results By Reporting Segment

West Segment: The West Segment operating income increased 8.4% to $73.1 million and Adjusted EBITDA increased 6.5% to $98.3 million in the third quarter due primarily to pricing gains that more than offset lower volumes and inflationary cost conditions. Aggregates revenue in the third quarter increased 11.6% as 14.5% pricing growth was partially offset by 2.5% volume declines. Double digit price growth was experienced by all markets while volume growth in the Intermountain West was more than offset by lower sales volume in Texas and British Columbia. Ready-mix concrete revenue in the third quarter increased 18.6% driven by 19.4% pricing growth and only partially offset by lower volumes, particularly in South Texas. Lower aggregates and ready-mix volumes in Texas were due, in part, to unfavorable weather conditions and supply chain constraints. Asphalt revenue increased 18.0% in the third quarter as sales prices increased 16.7% and volumes increased 1.1% in the period.

East Segment: The East Segment operating income decreased 36.7% to $28.5 million and Adjusted EBITDA decreased 36.1% to $44.1 million in the third quarter reflecting the impact of divestitures as well as increased cost of revenue that exceeded pricing growth. The impact from divestitures on Adjusted EBITDA was approximately $16.3 million in the period. Aggregates revenue decreased 9.2% versus the prior year period. Organic aggregates volumes decreased 4.7% with wet conditions and supply chain related disruptions more than offsetting growth in Kansas and Virginia. Aggregates organic pricing increased 8.2% led by the strongest growth in Virginia and the Carolinas. Ready-mix concrete revenue decreased 44.0% due primarily to divestitures. Organic sales volumes were down 4.9% relative to the year ago period due to unfavorable weather conditions and supply chain disruptions. Ready-mix concrete organic average selling price increased 15.0% in the period. Due to divestitures, asphalt revenue decreased 61.4%. Asphalt organic volumes decreased 18.5% while organic average selling prices for asphalt increased 29.2% to reflect increased costs.

Cement Segment: The Cement Segment operating income increased 18.1% to $35.5 million in the third quarter. Adjusted EBITDA increased $6.2 million as revenue growth combined with greater contribution from Green America Recycling more than offset inflationary conditions. In the third quarter, the Cement Segment reported a volume increase of 12.4% and average selling price growth of 12.8%.

Liquidity and Capital Resources

As of October 1, 2022, the Company had $471.7 million in cash and $1.5 billion in debt outstanding. The Company's $345 million revolving credit facility has $324.9 million available after outstanding letters of credit. For the quarter ended October 1, 2022, cash flow provided by operations was $132.2 million and cash paid for capital expenditures was $189.0 million.

During the three months ended October 1, 2022, Summit Materials repaid $23.3 million of its term loan under provisions related to the divestitures of businesses.

In the three months ending October 1, 2022, Summit Materials repurchased approximately 1.9 million shares of Class A common stock for approximately $53.5 million. As of October 1, 2022, approximately $149.0 million remained available for share repurchase under the share repurchase program.

Webcast and Conference Call Information

Summit Materials will conduct a conference call on Thursday, November 3, 2022, at 11:00 a.m. eastern time (9:00 a.m. mountain time) to review the Company’s third 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 third 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/550652656.

To participate in the live teleconference for third 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 November 8, 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

 

Nine months ended

 

 

October 1,

 

October 2,

 

October 1,

 

October 2,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

Product

 

$

587,138

 

 

$

561,938

 

 

$

1,485,746

 

 

$

1,443,972

 

Service

 

 

98,871

 

 

 

100,321

 

 

 

224,676

 

 

 

235,298

 

Net revenue

 

 

686,009

 

 

 

662,259

 

 

 

1,710,422

 

 

 

1,679,270

 

Delivery and subcontract revenue

 

 

66,738

 

 

 

54,981

 

 

 

149,826

 

 

 

133,731

 

Total revenue

 

 

752,747

 

 

 

717,240

 

 

 

1,860,248

 

 

 

1,813,001

 

Cost of revenue (excluding items shown separately below):

 

 

 

 

 

 

 

 

Product

 

 

392,187

 

 

 

356,214

 

 

 

1,042,888

 

 

 

980,045

 

Service

 

 

76,011

 

 

 

75,741

 

 

 

179,807

 

 

 

187,570

 

Net cost of revenue

 

 

468,198

 

 

 

431,955

 

 

 

1,222,695

 

 

 

1,167,615

 

Delivery and subcontract cost

 

 

66,738

 

 

 

54,981

 

 

 

149,826

 

 

 

133,731

 

Total cost of revenue

 

 

534,936

 

 

 

486,936

 

 

 

1,372,521

 

 

 

1,301,346

 

General and administrative expenses

 

 

39,959

 

 

 

47,364

 

 

 

139,534

 

 

 

146,454

 

Depreciation, depletion, amortization and accretion

 

 

52,133

 

 

 

59,082

 

 

 

150,483

 

 

 

173,651

 

Gain on sale of property, plant and equipment

 

 

(1,343

)

 

 

(1,159

)

 

 

(6,293

)

 

 

(4,331

)

Operating income

 

 

127,062

 

 

 

125,017

 

 

 

204,003

 

 

 

195,881

 

Interest expense

 

 

21,980

 

 

 

24,134

 

 

 

62,728

 

 

 

72,536

 

Loss on debt financings

 

 

 

 

 

6,016

 

 

 

 

 

 

6,016

 

Tax receivable agreement expense

 

 

 

 

 

 

 

 

954

 

 

 

 

(Gain) loss on sale of businesses

 

 

(4,115

)

 

 

113

 

 

 

(174,373

)

 

 

(15,319

)

Other income, net

 

 

(3,283

)

 

 

(1,137

)

 

 

(4,956

)

 

 

(10,721

)

Income from operations before taxes

 

 

112,480

 

 

 

95,891

 

 

 

319,650

 

 

 

143,369

 

Income tax expense

 

 

24,829

 

 

 

20,513

 

 

 

74,033

 

 

 

33,478

 

Net income

 

 

87,651

 

 

 

75,378

 

 

 

245,617

 

 

 

109,891

 

Net income attributable to Summit Holdings (1)

 

 

1,162

 

 

 

1,174

 

 

 

3,307

 

 

 

1,545

 

Net income attributable to Summit Inc.

 

$

86,489

 

 

$

74,204

 

 

$

242,310

 

 

$

108,346

 

Earnings per share of Class A common stock:

 

 

 

 

 

 

 

 

Basic

 

$

0.73

 

 

$

0.63

 

 

$

2.05

 

 

$

0.92

 

Diluted

 

$

0.73

 

 

$

0.62

 

 

$

2.03

 

 

$

0.92

 

Weighted average shares of Class A common stock:

 

 

 

 

 

 

 

 

Basic

 

 

117,917,058

 

 

 

118,473,530

 

 

 

118,365,801

 

 

 

117,258,431

 

Diluted

 

 

118,404,098

 

 

 

119,291,646

 

 

 

119,098,936

 

 

 

118,360,615

 

________________________________________________________

(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)

 

 

 

 

 

 

 

October 1,

 

January 1,

 

 

 

2022

 

 

 

2022

 

 

(unaudited)

 

(audited)

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

471,666

 

 

$

380,961

Accounts receivable, net

 

 

363,956

 

 

 

287,226

Costs and estimated earnings in excess of billings

 

 

33,568

 

 

 

7,600

Inventories

 

 

202,783

 

 

 

180,760

Other current assets

 

 

20,132

 

 

 

11,827

Current assets held for sale

 

 

1,205

 

 

 

1,236

Total current assets

 

 

1,093,310

 

 

 

869,610

Property, plant and equipment, less accumulated depreciation, depletion and amortization (October 1, 2022 - $1,241,028 and January 1, 2022 - $1,266,513)

 

 

1,768,394

 

 

 

1,842,908

Goodwill

 

 

1,131,764

 

 

 

1,163,750

Intangible assets, less accumulated amortization (October 1, 2022 - $14,642 and January 1, 2022 - $15,269)

 

 

67,253

 

 

 

69,396

Deferred tax assets, less valuation allowance (October 1, 2022 - $1,113 and January 1, 2022 - $1,675)

 

 

151,099

 

 

 

204,566

Operating lease right-of-use assets

 

 

31,057

 

 

 

30,150

Other assets

 

 

42,078

 

 

 

58,745

Total assets

 

$

4,284,955

 

 

$

4,239,125

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Current portion of debt

 

$

6,354

 

 

$

6,354

Current portion of acquisition-related liabilities

 

 

12,215

 

 

 

13,110

Accounts payable

 

 

166,592

 

 

 

128,232

Accrued expenses

 

 

123,985

 

 

 

147,476

Current operating lease liabilities

 

 

6,481

 

 

 

6,497

Billings in excess of costs and estimated earnings

 

 

7,143

 

 

 

7,401

Total current liabilities

 

 

322,770

 

 

 

309,070

Long-term debt

 

 

1,492,429

 

 

 

1,591,019

Acquisition-related liabilities

 

 

23,953

 

 

 

33,369

Tax receivable agreement liability

 

 

327,501

 

 

 

326,548

Noncurrent operating lease liabilities

 

 

29,945

 

 

 

28,880

Other noncurrent liabilities

 

 

117,133

 

 

 

127,027

Total liabilities

 

 

2,313,731

 

 

 

2,415,913

Stockholders’ equity:

 

 

 

 

Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 116,386,969 and 118,705,108 shares issued and outstanding as of October 1, 2022 and January 1, 2022, respectively

 

 

1,165

 

 

 

1,188

Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of October 1, 2022 and January 1, 2022

 

 

 

 

 

Additional paid-in capital

 

 

1,340,602

 

 

 

1,326,340

Accumulated earnings

 

 

620,320

 

 

 

478,956

Accumulated other comprehensive (loss) income

 

 

(3,470

)

 

 

7,083

Stockholders’ equity

 

 

1,958,617

 

 

 

1,813,567

Noncontrolling interest in Summit Holdings

 

 

12,607

 

 

 

9,645

Total stockholders’ equity

 

 

1,971,224

 

 

 

1,823,212

Total liabilities and stockholders’ equity

 

$

4,284,955

 

 

$

4,239,125

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

($ in thousands)

 

 

 

 

 

Nine months ended

 

 

October 1,

 

October 2,

 

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

Net income

 

$

245,617

 

 

$

109,891

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation, depletion, amortization and accretion

 

 

160,162

 

 

 

177,841

 

Share-based compensation expense

 

 

15,058

 

 

 

14,875

 

Net gain on asset and business disposals

 

 

(180,240

)

 

 

(19,295

)

Non-cash loss on debt financings

 

 

 

 

 

2,116

 

Change in deferred tax asset, net

 

 

58,318

 

 

 

19,814

 

Other

 

 

(396

)

 

 

(586

)

Decrease (increase) in operating assets, net of acquisitions and dispositions:

 

 

 

 

Accounts receivable, net

 

 

(96,724

)

 

 

(78,108

)

Inventories

 

 

(53,762

)

 

 

(12,002

)

Costs and estimated earnings in excess of billings

 

 

(32,042

)

 

 

(26,969

)

Other current assets

 

 

(6,961

)

 

 

(2,556

)

Other assets

 

 

3,432

 

 

 

6,459

 

(Decrease) increase in operating liabilities, net of acquisitions and dispositions:

 

 

 

 

Accounts payable

 

 

44,510

 

 

 

33,756

 

Accrued expenses

 

 

(21,780

)

 

 

(15,598

)

Billings in excess of costs and estimated earnings

 

 

646

 

 

 

(2,907

)

Tax receivable agreement liability

 

 

954

 

 

 

9,191

 

Other liabilities

 

 

(4,601

)

 

 

(8,549

)

Net cash provided by operating activities

 

 

132,191

 

 

 

207,373

 

Cash flows from investing activities:

 

 

 

 

Acquisitions, net of cash acquired

 

 

(1,933

)

 

 

(7,263

)

Purchases of property, plant and equipment

 

 

(189,008

)

 

 

(170,070

)

Proceeds from the sale of property, plant and equipment

 

 

8,298

 

 

 

8,827

 

Proceeds from sale of businesses

 

 

373,790

 

 

 

103,649

 

Other

 

 

(2,214

)

 

 

(459

)

Net cash provided by (used in) investing activities

 

 

188,933

 

 

 

(65,316

)

Cash flows from financing activities:

 

 

 

 

Payments on debt

 

 

(113,769

)

 

 

(323,802

)

Payments on acquisition-related liabilities

 

 

(12,964

)

 

 

(9,755

)

Distributions from partnership

 

 

(399

)

 

 

 

Repurchases of common stock

 

 

(100,980

)

 

 

 

Proceeds from stock option exercises

 

 

199

 

 

 

32,416

 

Other

 

 

(774

)

 

 

(951

)

Net cash used in financing activities

 

 

(228,687

)

 

 

(302,092

)

Impact of foreign currency on cash

 

 

(1,732

)

 

 

(63

)

Net increase (decrease) in cash

 

 

90,705

 

 

 

(160,098

)

Cash and cash equivalents—beginning of period

 

 

380,961

 

 

 

418,181

 

Cash and cash equivalents—end of period

 

$

471,666

 

 

$

258,083

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Revenue Data by Segment and Line of Business

($ in thousands)

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

 

 

October 1,

 

October 2,

 

October 1,

 

October 2,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Segment Net Revenue:

 

 

 

 

 

 

 

 

West

 

$

394,648

 

 

$

338,575

 

 

$

983,160

 

 

$

886,936

 

East

 

 

171,446

 

 

 

231,184

 

 

 

467,471

 

 

 

573,343

 

Cement

 

 

119,915

 

 

 

92,500

 

 

 

259,791

 

 

 

218,991

 

Net Revenue

 

$

686,009

 

 

$

662,259

 

 

$

1,710,422

 

 

$

1,679,270

 

 

 

 

 

 

 

 

 

 

Line of Business - Net Revenue:

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

163,524

 

 

$

160,317

 

 

$

448,397

 

 

$

431,201

 

Cement (1)

 

 

112,489

 

 

 

87,645

 

 

 

241,858

 

 

 

207,953

 

Products

 

 

311,125

 

 

 

313,976

 

 

 

795,491

 

 

 

804,818

 

Total Materials and Products

 

 

587,138

 

 

 

561,938

 

 

 

1,485,746

 

 

 

1,443,972

 

Services

 

 

98,871

 

 

 

100,321

 

 

 

224,676

 

 

 

235,298

 

Net Revenue

 

$

686,009

 

 

$

662,259

 

 

$

1,710,422

 

 

$

1,679,270

 

 

 

 

 

 

 

 

 

 

Line of Business - Net Cost of Revenue:

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

76,369

 

 

$

63,622

 

 

$

229,767

 

 

$

199,653

 

Cement

 

 

61,519

 

 

 

43,768

 

 

 

146,327

 

 

 

122,800

 

Products

 

 

250,591

 

 

 

248,042

 

 

 

659,342

 

 

 

657,005

 

Total Materials and Products

 

 

388,479

 

 

 

355,432

 

 

 

1,035,436

 

 

 

979,458

 

Services

 

 

79,719

 

 

 

76,523

 

 

 

187,259

 

 

 

188,157

 

Net Cost of Revenue

 

$

468,198

 

 

$

431,955

 

 

$

1,222,695

 

 

$

1,167,615

 

 

 

 

 

 

 

 

 

 

Line of Business - Adjusted Cash Gross Profit (2):

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

87,155

 

 

$

96,695

 

 

$

218,630

 

 

$

231,548

 

Cement (3)

 

 

50,970

 

 

 

43,877

 

 

 

95,531

 

 

 

85,153

 

Products

 

 

60,534

 

 

 

65,934

 

 

 

136,149

 

 

 

147,813

 

Total Materials and Products

 

 

198,659

 

 

 

206,506

 

 

 

450,310

 

 

 

464,514

 

Services

 

 

19,152

 

 

 

23,798

 

 

 

37,417

 

 

 

47,141

 

Adjusted Cash Gross Profit

 

$

217,811

 

 

$

230,304

 

 

$

487,727

 

 

$

511,655

 

 

 

 

 

 

 

 

 

 

Adjusted Cash Gross Profit Margin (2)

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

 

53.3

%

 

 

60.3

%

 

 

48.8

%

 

 

53.7

%

Cement (3)

 

 

42.5

%

 

 

47.4

%

 

 

36.8

%

 

 

38.9

%

Products

 

 

19.5

%

 

 

21.0

%

 

 

17.1

%

 

 

18.4

%

Services

 

 

19.4

%

 

 

23.7

%

 

 

16.7

%

 

 

20.0

%

Total Adjusted Cash Gross Profit Margin

 

 

31.8

%

 

 

34.8

%

 

 

28.5

%

 

 

30.5

%

________________________________________________________

(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

 

Nine months ended

Total Volume

 

October 1, 2022

 

October 2, 2021

 

October 1, 2022

 

October 2, 2021

Aggregates (tons)

 

 

16,267

 

 

 

17,884

 

 

 

46,489

 

 

 

48,484

 

Cement (tons)

 

 

841

 

 

 

748

 

 

 

1,887

 

 

 

1,796

 

Ready-mix concrete (cubic yards)

 

 

1,326

 

 

 

1,509

 

 

 

3,960

 

 

 

4,381

 

Asphalt (tons)

 

 

1,459

 

 

 

1,880

 

 

 

3,041

 

 

 

3,911

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

Pricing

 

October 1, 2022

 

October 2, 2021

 

October 1, 2022

 

October 2, 2021

Aggregates (per ton)

 

$

12.48

 

 

$

11.32

 

 

$

11.89

 

 

$

11.16

 

Cement (per ton)

 

 

136.83

 

 

 

121.26

 

 

 

132.22

 

 

 

119.76

 

Ready-mix concrete (per cubic yards)

 

 

142.66

 

 

 

121.40

 

 

 

133.87

 

 

 

119.95

 

Asphalt (per ton)

 

 

73.26

 

 

 

61.42

 

 

 

71.74

 

 

 

60.63

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

 

 

Percentage Change in

 

Percentage Change in

Year over Year Comparison

 

Volume

 

Pricing

 

Volume

 

Pricing

Aggregates (per ton)

 

 

(9.0

)%

 

 

10.2

%

 

 

(4.1

)%

 

 

6.5

%

Cement (per ton)

 

 

12.4

%

 

 

12.8

%

 

 

5.1

%

 

 

10.4

%

Ready-mix concrete (per cubic yards)

 

 

(12.1

)%

 

 

17.5

%

 

 

(9.6

)%

 

 

11.6

%

Asphalt (per ton)

 

 

(22.4

)%

 

 

19.3

%

 

 

(22.2

)%

 

 

18.3

%

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

 

 

Percentage Change in

 

Percentage Change in

Year over Year Comparison (Excluding acquisitions & divestitures)

 

Volume

 

Pricing

 

Volume

 

Pricing

Aggregates (per ton)

 

 

(3.5

)%

 

 

11.2

%

 

 

(0.9

)%

 

 

7.4

%

Cement (per ton)

 

 

12.4

%

 

 

12.8

%

 

 

5.1

%

 

 

10.4

%

Ready-mix concrete (per cubic yards)

 

 

(1.3

)%

 

 

18.8

%

 

 

(1.6

)%

 

 

13.0

%

Asphalt (per ton)

 

 

(0.9

)%

 

 

17.8

%

 

 

(0.6

)%

 

 

16.3

%

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 October 1, 2022

 

 

 

 

 

 

Gross Revenue

 

Intercompany

 

Net

 

 

Volumes

 

Pricing

 

by Product

 

Elimination/Delivery

 

Revenue

Aggregates

 

16,267

 

$

12.48

 

$

202,982

 

$

(39,458

)

 

$

163,524

Cement

 

841

 

 

136.83

 

 

115,022

 

 

(2,533

)

 

 

112,489

Materials

 

 

 

 

 

$

318,004

 

$

(41,991

)

 

$

276,013

Ready-mix concrete

 

1,326

 

 

142.66

 

 

189,151

 

 

(70

)

 

 

189,081

Asphalt

 

1,459

 

 

73.26

 

 

106,897

 

 

(92

)

 

 

106,805

Other Products

 

 

 

 

 

 

94,964

 

 

(79,725

)

 

 

15,239

Products

 

 

 

 

 

$

391,012

 

$

(79,887

)

 

$

311,125

 

 

Nine months ended October 1, 2022

 

 

 

 

 

 

Gross Revenue

 

Intercompany

 

Net

 

 

Volumes

 

Pricing

 

by Product

 

Elimination/Delivery

 

Revenue

Aggregates

 

46,489

 

$

11.89

 

$

552,943

 

$

(104,546

)

 

$

448,397

Cement

 

1,887

 

 

132.22

 

 

249,517

 

 

(7,659

)

 

 

241,858

Materials

 

 

 

 

 

$

802,460

 

$

(112,205

)

 

$

690,255

Ready-mix concrete

 

3,960

 

 

133.87

 

 

530,178

 

 

(177

)

 

 

530,001

Asphalt

 

3,041

 

 

71.74

 

 

218,136

 

 

(279

)

 

 

217,857

Other Products

 

 

 

 

 

 

273,112

 

 

(225,479

)

 

 

47,633

Products

 

 

 

 

 

$

1,021,426

 

$

(225,935

)

 

$

795,491

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 nine months ended October 1, 2022 and October 2, 2021.

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Three months ended October 1, 2022

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

76,350

 

 

$

30,225

 

 

$

40,748

 

 

$

(59,672

)

 

$

87,651

 

Interest (income) expense

 

 

(4,475

)

 

 

(2,602

)

 

 

(5,110

)

 

 

34,167

 

 

 

21,980

 

Income tax expense

 

 

1,384

 

 

 

 

 

 

 

 

 

23,445

 

 

 

24,829

 

Depreciation, depletion and amortization

 

 

24,676

 

 

 

15,063

 

 

 

10,879

 

 

 

821

 

 

 

51,439

 

EBITDA

 

$

97,935

 

 

$

42,686

 

 

$

46,517

 

 

$

(1,239

)

 

$

185,899

 

Accretion

 

 

232

 

 

 

382

 

 

 

80

 

 

 

 

 

 

694

 

Loss (gain) on sale of businesses

 

 

 

 

 

1,005

 

 

 

 

 

 

(5,120

)

 

 

(4,115

)

Non-cash compensation

 

 

 

 

 

 

 

 

 

 

 

4,902

 

 

 

4,902

 

Other

 

 

114

 

 

 

46

 

 

 

 

 

 

(2,652

)

 

 

(2,492

)

Adjusted EBITDA

 

$

98,281

 

 

$

44,119

 

 

$

46,597

 

 

$

(4,109

)

 

$

184,888

 

Adjusted EBITDA Margin (1)

 

 

24.9

%

 

 

25.7

%

 

 

38.9

%

 

 

 

 

27.0

%

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Three months ended October 2, 2021

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

69,457

 

 

$

47,924

 

 

$

34,310

 

 

$

(76,313

)

 

$

75,378

 

Interest (income) expense

 

 

(2,933

)

 

 

(2,237

)

 

 

(4,359

)

 

 

33,663

 

 

 

24,134

 

Income tax expense

 

 

976

 

 

 

119

 

 

 

 

 

 

19,418

 

 

 

20,513

 

Depreciation, depletion and amortization

 

 

24,577

 

 

 

22,412

 

 

 

10,324

 

 

 

1,068

 

 

 

58,381

 

EBITDA

 

$

92,077

 

 

$

68,218

 

 

$

40,275

 

 

$

(22,164

)

 

$

178,406

 

Accretion

 

 

219

 

 

 

397

 

 

 

85

 

 

 

 

 

 

701

 

Loss on debt financings

 

 

 

 

 

 

 

 

 

 

 

6,016

 

 

 

6,016

 

(Gain) loss on sale of businesses

 

 

(135

)

 

 

248

 

 

 

 

 

 

 

 

 

113

 

Non-cash compensation

 

 

 

 

 

 

 

 

 

 

 

4,685

 

 

 

4,685

 

Other

 

 

142

 

 

 

221

 

 

 

 

 

 

 

 

 

363

 

Adjusted EBITDA

 

$

92,303

 

 

$

69,084

 

 

$

40,360

 

 

$

(11,463

)

 

$

190,284

 

Adjusted EBITDA Margin (1)

 

 

27.3

%

 

 

29.9

%

 

 

43.6

%

 

 

 

 

28.7

%

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Nine months ended October 1, 2022

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

153,857

 

 

$

101,680

 

 

$

70,958

 

 

$

(80,878

)

 

$

245,617

 

Interest (income) expense

 

 

(12,480

)

 

 

(8,767

)

 

 

(14,932

)

 

 

98,907

 

 

 

62,728

 

Income tax expense (benefit)

 

 

2,547

 

 

 

(106

)

 

 

 

 

 

71,592

 

 

 

74,033

 

Depreciation, depletion and amortization

 

 

70,803

 

 

 

47,470

 

 

 

27,760

 

 

 

2,340

 

 

 

148,373

 

EBITDA

 

$

214,727

 

 

$

140,277

 

 

$

83,786

 

 

$

91,961

 

 

$

530,751

 

Accretion

 

 

692

 

 

 

1,185

 

 

 

233

 

 

 

 

 

 

2,110

 

Tax receivable agreement benefit

 

 

 

 

 

 

 

 

 

 

 

954

 

 

 

954

 

Gain on sale of businesses

 

 

 

 

 

(42,652

)

 

 

 

 

 

(131,721

)

 

 

(174,373

)

Non-cash compensation

 

 

 

 

 

 

 

 

 

 

 

15,058

 

 

 

15,058

 

Other

 

 

198

 

 

 

139

 

 

 

 

 

 

(2,652

)

 

 

(2,315

)

Adjusted EBITDA

 

$

215,617

 

 

$

98,949

 

 

$

84,019

 

 

$

(26,400

)

 

$

372,185

 

Adjusted EBITDA Margin (1)

 

 

21.9

%

 

 

21.2

%

 

 

32.3

%

 

 

 

 

21.8

%

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Nine months ended October 2, 2021

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

142,340

 

 

$

91,928

 

 

$

65,935

 

 

$

(190,312

)

 

$

109,891

 

Interest (income) expense

 

 

(7,825

)

 

 

(6,133

)

 

 

(12,439

)

 

 

98,933

 

 

 

72,536

 

Income tax expense

 

 

2,360

 

 

 

209

 

 

 

 

 

 

30,909

 

 

 

33,478

 

Depreciation, depletion and amortization

 

 

74,634

 

 

 

65,032

 

 

 

28,535

 

 

 

3,273

 

 

 

171,474

 

EBITDA

 

$

211,509

 

 

$

151,036

 

 

$

82,031

 

 

$

(57,197

)

 

$

387,379

 

Accretion

 

 

653

 

 

 

1,274

 

 

 

250

 

 

 

 

 

 

2,177

 

Loss on debt financings

 

 

 

 

 

 

 

 

 

 

 

6,016

 

 

 

6,016

 

Gain on sale of businesses

 

 

(408

)

 

 

(14,911

)

 

 

 

 

 

 

 

 

(15,319

)

Non-cash compensation

 

 

 

 

 

 

 

 

 

 

 

14,875

 

 

 

14,875

 

Other

 

 

(32

)

 

 

714

 

 

 

 

 

 

 

 

 

682

 

Adjusted EBITDA

 

$

211,722

 

 

$

138,113

 

 

$

82,281

 

 

$

(36,306

)

 

$

395,810

 

Adjusted EBITDA Margin (1)

 

 

23.9

%

 

 

24.1

%

 

 

37.6

%

 

 

 

 

23.6

%

________________________________________________

(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 nine months ended October 1, 2022 and October 2, 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

 

Nine months ended

 

 

October 1, 2022

 

October 2, 2021

 

October 1, 2022

 

October 2, 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.

 

$

86,489

 

 

$

0.73

 

 

$

74,204

 

$

0.62

 

$

242,310

 

 

$

2.03

 

 

$

108,346

 

 

$

0.91

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interest

 

 

1,162

 

 

 

0.01

 

 

 

1,174

 

 

0.01

 

 

3,307

 

 

 

0.03

 

 

 

1,545

 

 

 

0.01

 

(Gain) loss on sale of businesses, net of tax

 

 

(3,406

)

 

 

(0.03

)

 

 

113

 

 

 

 

(130,975

)

 

 

(1.10

)

 

 

(11,541

)

 

 

(0.10

)

Loss on debt financings

 

 

 

 

 

 

 

 

6,016

 

 

0.05

 

 

 

 

 

 

 

 

6,016

 

 

 

0.06

 

Adjusted diluted net income before tax related adjustments

 

 

84,245

 

 

 

0.71

 

 

 

81,507

 

 

0.68

 

 

114,642

 

 

 

0.96

 

 

 

104,366

 

 

 

0.88

 

Tax receivable agreement expense

 

 

 

 

 

 

 

 

 

 

 

 

954

 

 

 

0.01

 

 

 

 

 

 

 

Adjusted diluted net income

 

$

84,245

 

 

$

0.71

 

 

$

81,507

 

$

0.68

 

$

115,596

 

 

$

0.97

 

 

$

104,366

 

 

$

0.88

 

Weighted-average shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Class A common stock

 

 

117,774,592

 

 

 

 

 

118,272,955

 

 

 

 

118,216,997

 

 

 

 

 

117,040,207

 

 

 

LP Units outstanding

 

 

1,312,797

 

 

 

 

 

1,594,272

 

 

 

 

1,313,603

 

 

 

 

 

2,031,090

 

 

 

Total equity units

 

 

119,087,389

 

 

 

 

 

119,867,227

 

 

 

 

119,530,600

 

 

 

 

 

119,071,297

 

 

 

The following table reconciles operating income to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the three and nine months ended October 1, 2022 and October 2, 2021.

 

 

Three months ended

 

Nine months ended

 

 

October 1,

 

October 2,

 

October 1,

 

October 2,

Reconciliation of Operating Income to Adjusted Cash Gross Profit

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

($ in thousands)

 

 

 

 

 

 

 

 

Operating income

 

$

127,062

 

 

$

125,017

 

 

$

204,003

 

 

$

195,881

 

General and administrative expenses

 

 

39,959

 

 

 

47,364

 

 

 

139,534

 

 

 

146,454

 

Depreciation, depletion, amortization and accretion

 

 

52,133

 

 

 

59,082

 

 

 

150,483

 

 

 

173,651

 

Gain on sale of property, plant and equipment

 

 

(1,343

)

 

 

(1,159

)

 

 

(6,293

)

 

 

(4,331

)

Adjusted Cash Gross Profit (exclusive of items shown separately)

 

$

217,811

 

 

$

230,304

 

 

$

487,727

 

 

$

511,655

 

Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1)

 

 

31.8

%

 

 

34.8

%

 

 

28.5

%

 

 

30.5

%

_______________________________________________________

(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 nine months ended October 1, 2022 and October 2, 2021.

 

 

Three months ended

 

Nine months ended

 

 

October 1,

 

October 2,

 

October 1,

 

October 2,

($ in thousands)

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net income

 

$

87,651

 

 

$

75,378

 

 

$

245,617

 

 

$

109,891

 

Non-cash items

 

 

66,334

 

 

 

81,700

 

 

 

52,902

 

 

 

194,765

 

Net income adjusted for non-cash items

 

 

153,985

 

 

 

157,078

 

 

 

298,519

 

 

 

304,656

 

Change in working capital accounts

 

 

(38,048

)

 

 

(24,356

)

 

 

(166,328

)

 

 

(97,283

)

Net cash provided by operating activities

 

 

115,937

 

 

 

132,722

 

 

 

132,191

 

 

 

207,373

 

Capital expenditures, net of asset sales

 

 

(56,557

)

 

 

(35,326

)

 

 

(180,710

)

 

 

(161,243

)

Free cash flow

 

$

59,380

 

 

$

97,396

 

 

$

(48,519

)

 

$

46,130

 

 

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