- Full-Year Net Income Increased 32.7% to
$36.8 million
-Full-Year Adjusted Net Income Increased
31.5% to $98.3 million
-Full-Year Operating Income Increased 14.4%
to $154.0 million
- Full-Year Adjusted EBITDA Increased 29.2%
to $371.3 million
- Introducing Full-Year 2017 Adjusted EBITDA
Guidance of $410.0 million to $425.0 million
Summit Materials, Inc. (NYSE: SUM, “Summit” or the
“Company”), a leading vertically integrated construction materials
company, today announced results for the fourth quarter and
full-year 2016.
For the twelve months ended December 31, 2016, the Company
reported basic and diluted earnings per share of $0.53 on net
income of $36.8 million. For the same twelve month period, Summit
reported adjusted diluted earnings per share of $0.97 on adjusted
net income of $98.3 million. For the three months ended December
31, 2016, the Company reported a basic loss per share of ($0.00) on
a net loss of ($0.3) million. For the same three month period,
Summit reported adjusted diluted earnings per share of $0.21 on
adjusted net income of $21.0 million. The Company’s adjusted net
income for the fourth quarter and full-year 2016 excludes an $14.9
million charge for estimated future payments to certain current and
former limited partners under the tax receivable agreement entered
into at the time of the Company’s initial public offering, $13.8
million of which is expected to be paid beginning in 2019 or
thereafter.
“Our strong full-year performance further validates the unique
competitive advantages afforded by our integrated, materials-based
model,” stated Tom Hill, CEO of Summit Materials. “Our leading
positions in well-structured, early-cycle markets drove sustained
margin expansion throughout all lines of business in 2016, as both
gross margin and Adjusted EBITDA margin increased to record levels.
Adjusted EBITDA exceeded the high-end of our guided range for the
full-year, given sustained growth in materials pricing,
contributions from completed acquisitions and improved cost
efficiencies.”
“Gross profit generated from our materials lines of business
increased by more than 35% year-over-year in 2016, despite
temporary softness in organic sales volumes of aggregates in our
Texas and Vancouver markets,” continued Hill. “Excluding Texas and
Vancouver, organic sales volumes of aggregates and ready-mix
increased 1.2% and 5.1%, respectively, in the full-year 2016,
versus the prior year. Looking ahead to 2017, we anticipate
positive growth in materials pricing and volumes across all of our
reporting segments.”
“In January 2017, we entered into definitive agreements to
acquire Colorado-based Everist Materials and Arkansas-based
Razorback Concrete Company for a combined $110 million in cash,”
stated Hill. “Collectively, these acquisitions bring aggregates
operations with ~100 million tons of permitted reserves and an
extensive network of vertically integrated ready-mix concrete and
asphalt plants in close proximity to our existing portfolio of
materials-based assets. In addition to Everist, which closed in
January 2017, and Razorback, which is expected to close during the
first quarter 2017, our acquisition pipeline remains robust, with
more than 20 additional transactions currently under review.”
“Our cement business represents a clear catalyst for growth
heading into 2017,” continued Hill. “Limited domestic production
capacity and continued growth in U.S. demand have combined to
create opportunities for sustained growth in industry cement
pricing. During the fourth quarter, our cement segment generated
organic price and volume growth of 6.8% and nearly 1%,
respectively. Looking ahead to the remainder of 2017, we anticipate
continued Adjusted EBITDA growth in our cement business, as
supported by sustained growth in organic cement prices and sales
volumes along the Mississippi River corridor.”
“Following the recent election cycle, we have entered a new era
of bipartisan support for funding that will help to properly
maintain and modernize our nation’s aging transportation
infrastructure,” continued Hill. “In the markets we serve, nearly
60 cents of every dollar spent by states on transportation
infrastructure is federally funded. Given that nearly 40% of our
net revenue is derived from public infrastructure work, Summit is
well positioned to benefit from this opportunity. With the support
of appropriations from the FAST Act, we anticipate an acceleration
in state-level infrastructure spending beginning in mid-to-late
2017. Further, given ongoing advocacy by Congress and the current
Administration for increased investment in state transportation
infrastructure, we see numerous opportunities for multi-year growth
in our public-facing businesses.”
“We generated significant growth in cash flows from operations
last year, resulting in a material improvement in our credit
metrics,” stated Brian Harris, CFO of Summit Materials. “We had
outstanding debt of $1.5 billion as of December 31, 2016. Net
leverage was 3.9x at year-end 2016, ahead of our full-year guidance
of 4.0x. Including net proceeds from the 10 million share equity
offering we completed in January 2017, net leverage declined to
3.5x at year-end 2016. Looking ahead, we currently anticipate a
further reduction in net leverage to approximately 3.0x by year-end
2017, assuming the mid-point of our 2017 Adjusted EBITDA
guidance.”
“We had $143.4 million in cash and $209.4 million of available
liquidity under our revolving credit facility at year-end,” stated
Harris. “Including proceeds from the equity offering we completed
in January 2017, net of $110 million used to fund the acquisition
of Everist and Razorback, we had pro-forma cash and liquidity of
approximately $480 million exiting 2016,” continued Harris. “Our
current liquidity position provides sufficient flexibility with
which to fund the working capital and strategic growth requirements
of our business at this time. Looking forward, disciplined capital
allocation remains a high priority for us, particularly as we seek
to reduce our net leverage ratio and improve our credit metrics. We
are pleased with our full-year performance and remain focused on
creating additional value for our investors in the year ahead.”
Full-Year 2016 | Financial
Performance
Net revenue increased 15.4% year-over-year to $1.5 billion,
versus $1.3 billion in 2015. The year-over-year improvement in net
revenue was primarily attributable to higher acquisition-related
sales volumes across all lines of business, coupled with improved
organic and acquisition-related pricing on aggregates, cement and
ready-mix concrete.
Gross profit increased 25.4% year-over-year to $554.0 million,
versus $441.7 million in 2015. Gross profit generated from the
Company’s aggregates and cement assets represented 52.5% of total
gross profit in 2016, versus 48.4% of gross profit in 2015. Gross
margin increased 300 basis points to a record 37.2% for the
full-year 2016, versus 34.2% in 2015. Adjusted EBITDA increased
29.2% year-over-year to $371.3 million, versus $287.5 million in
2015. Adjusted EBITDA margin increased 270 basis points to a record
25.0% for the full-year 2016, versus 22.3% in 2015.
Adjusted net income increased 31.5% year-over-year to $98.3
million, versus $74.7 million in 2015. On an adjusted basis, the
Company reported full-year 2016 earnings per share of $0.97 per
adjusted diluted share, using 101.2 million weighted-average total
shares. The shares of Class A common stock are issued by
Summit Materials, Inc., and as such the earnings and equity
interests of non-controlling interests, including LP units that are
issued by its subsidiary Summit Materials Holdings L.P., are not
included in basic earnings per share. Summit believes adjusted net
income and Adjusted EPS are more representative of earnings
performance, as these measures exclude the non-operating impact to
earnings per share of any potential exchange of LP units for Class
A common stock in any given quarter.
- West Segment: Adjusted EBITDA
increased 11.1% year-over-year to $167.4 million, versus $150.8
million in 2015. Adjusted EBITDA margin increased to 22.7% in 2016,
up from 21.0% in 2015. A year-over-year decline in organic Adjusted
EBITDA growth was more than offset by acquisition-related EBITDA
contributions. The organic decline was attributable to severe
weather and flooding in Houston and tough prior-year comparisons in
the Vancouver, B.C. market related to the timing of customer
projects.
- East Segment: Adjusted EBITDA
increased 36.5% year-over-year to $126.0 million, versus $92.3
million in 2015. Adjusted EBITDA margin increased to 26.8% in 2016,
up from 24.6% in 2015. A year-over-year decline in organic Adjusted
EBITDA growth was more than offset by acquisition-related EBITDA
contributions. The organic decline was attributable to transitory
softness in public infrastructure spending in the Kansas and
Kentucky markets.
- Cement Segment: Adjusted EBITDA
increased 51.0% to $113.0 million, versus $74.8 million in 2015.
Adjusted EBITDA margin increased to 40.2% in 2016, up from 38.3% in
2015. A year-over-year increase in average selling prices,
increased sales volumes due to the acquisition of the Davenport
cement assets in July 2015, improved production efficiencies and
continued cost reductions all contributed to improved full-year
results.
Full-Year 2016 | Results by Line of
Business
- Aggregates Business: Aggregates
net revenues increased 20.8% to $264.6 million in 2016, when
compared to the prior year period. Aggregates gross profit as a
percentage of aggregates net revenues increased nearly 260 basis
points to 62.0% in 2016, when compared to the prior year period.
Including acquisitions, sales volumes increased 11.8% and average
sales price increased 7.2%, when compared to the prior year period.
Excluding acquisitions, organic sales volume declined 5.5% and
organic average sales price increased 4.8%, when compared to the
prior year period. In the full-year 2016, organic sales volumes
were affected by severe weather conditions throughout Texas and
lower year-over-year contributions from the Vancouver, B.C. market,
given the completion of a large sand river project in 2015.
- Cement Business: Cement net
revenues increased 49.3% to $250.3 million in 2016, when compared
to the prior year period. Cement gross profit as a percentage of
cement segment net revenues was 45.1% in 2016, more than 220 basis
points higher than in the prior year period. Sales volumes and the
average sales price increased 37.0% and 7.5%, respectively, when
compared to the prior year period. Cement volumes increased on a
year-over-year basis as a result of the Davenport acquisition in
July 2015, while cement prices improved as a result of favorable
overall market conditions.
- Products Business: Net revenues
from ready-mix concrete, asphalt and other products increased 7.8%
to $708.1 million in 2016, when compared to the prior year.
Products gross margin as a percentage of product net revenues
increased 190 basis points to 26.6% in 2016, when compared to the
prior year period. Including acquisitions, sales volumes and the
average selling price of ready-mix concrete increased 12.2% and
0.8%, respectively, versus the prior year. Including acquisitions,
sales volumes of asphalt were flat, versus the prior year, while
the average selling price declined by 5.1%, versus the prior year.
Excluding acquisitions, organic sales volumes of ready-mix concrete
and asphalt declined 3.4% and 13.0%, respectively, while average
selling prices increased 2.0% and declined 3.6%, respectively.
Fourth Quarter 2016 | Financial
Performance
Net revenue increased by 7.7% year-over-year to $387.4 million
in the fourth quarter 2016, versus $359.5 in the prior year period.
The year-over-year improvement in net revenue was primarily
attributable to higher acquisition-related sales volumes across all
lines of business, improved organic pricing on cement and ready-mix
concrete, in addition to improved acquisition related pricing on
aggregates.
Gross profit increased 13.9% year-over-year to $148.9 million in
the fourth quarter 2016, versus $130.7 million in the prior year
period. Gross profit generated from the Company’s aggregates and
cement assets represented 52.2% of total gross profit in the fourth
quarter 2016, versus 52.9% of gross profit in the prior year
period. Gross margin increased 210 basis points to 38.4% in the
fourth quarter 2016, versus 36.3% in the prior year period.
Adjusted EBITDA increased 12.9% year-over-year to $102.0 million,
versus $90.3 million in the prior year period. Adjusted EBITDA
margin increased 120 basis points to a record 26.3% in the fourth
quarter 2016, versus 25.1% in the prior year period.
Adjusted net income declined 38.9% year-over-year to $21.0
million in the fourth quarter 2016, versus $34.4 million in the
prior year period. On an adjusted basis, the Company reported
fourth quarter 2016 earnings per share of $0.21 per adjusted
diluted share, using 101.2 million weighted-average total shares.
The shares of Class A common stock are issued by Summit
Materials, Inc., and as such the earnings and equity interests of
non-controlling interests, including LP units, are not included in
basic earnings per share. Summit believes adjusted net income and
Adjusted EPS are more representative of earnings performance, as
these measures exclude the non-operating impact to earnings per
share of any potential exchange of LP units for Class A common
stock in any given quarter.
- West Segment: Adjusted EBITDA
was relatively flat at $39.9 million in the fourth quarter 2016,
versus the prior year period. Adjusted EBITDA margin increased to
22.4% in the fourth quarter 2016, versus 21.5% in the prior year
period. A year-over-year decline in Adjusted EBITDA in certain of
the Company’s Texas operations was more than offset by
acquisition-related EBITDA contributions.
- East Segment: Adjusted EBITDA
increased 20.5% year-over-year to $35.6 million in the fourth
quarter 2016, versus $29.5 million in the prior year period.
Adjusted EBITDA margin declined to 27.1% in the fourth quarter
2016, down from 29.0% in the prior year period. A year-over-year
decline in Adjusted EBITDA growth primarily related to the delayed
public funding in Kentucky was more than offset by
acquisition-related EBITDA contributions.
- Cement Segment: Adjusted EBITDA
increased 10.4% to $34.2 million in the fourth quarter 2016, versus
$30.9 million in the prior year period. Adjusted EBITDA margin
increased to 43.8% in the fourth quarter 2016, up from 41.3% in the
prior year period. A year-over-year increase in average selling
prices, organic sales volumes, improved production efficiencies and
cost reductions all contributed to improved results.
Fourth Quarter 2016 | Results by Line
of Business
- Aggregates Business: Aggregates
net revenues increased 10.9% to $63.4 million in the fourth quarter
2016, when compared to the prior year period. Aggregates gross
profit as a percentage of aggregates net revenues declined 140
basis points to 63.7% in the fourth quarter 2016, versus 65.1% in
the prior year period. Including acquisitions, sales volumes and
average selling prices increased 5.3% and 2.7%, respectively, in
the fourth quarter 2016, when compared to the prior year period.
Excluding acquisitions, organic sales volumes declined 11.8% and
average selling prices were flat in the fourth quarter 2016, versus
the prior year period. Organic sales volumes in the fourth quarter
2016 were impacted by a combination of transitory softness in
Houston’s residential market, lower contributions from continued
delays in public spending within the Kentucky market and tough
prior-year comparisons in the Vancouver, B.C. market.
- Cement Business: Cement net
revenues increased by 12.7% to $70.7 million in the fourth quarter
2016, when compared to the prior year period. Cement gross profit
as a percentage of cement segment net revenues was 47.9% in the
fourth quarter 2016, 530 basis points higher than in the prior year
period. On an organic basis, cement sales volumes and average
selling prices increased 0.6% and 6.8% in the fourth quarter 2016,
respectively, when compared to the prior year period. A combination
of steady organic demand along the Company’s core markets along the
Mississippi River, coupled with continued organic growth in average
selling prices, contributed to strong fourth quarter results in the
Cement segment.
- Products Business: Net revenues
increased by 3.1% to $181.2 million in the fourth quarter 2016,
when compared to the prior year period. Products gross margin as a
percentage of products net revenues. Products gross margin as a
percentage of product net revenues increased 170 basis points to
26.1% in the fourth quarter 2016, when compared to the prior year
period. Including acquisitions, sales volumes and the average
selling price of ready-mix concrete increased 12.3% and declined
1%, respectively, compared to the prior year period. Including
acquisitions, sales volumes and the average selling price of
asphalt increased 1.7% and declined 10.5%, respectively, compared
to the prior year period. Excluding acquisitions, organic sales
volumes of ready-mix concrete and asphalt declined 9.5% and 9.2%,
respectively, while average selling prices increased 1.5% and
declined 9.0%, respectively.
Liquidity and Capital
Resources
At December 31, 2016, the Company had cash on hand of $143.4
million and borrowing capacity under its revolving credit facility
of $209.4 million. Including net proceeds from the equity offering
completed in January 2017, the Company held pro-forma cash of
$271.5 million at year-end 2016. The borrowing capacity on the
revolving credit facility is net of $25.6 million of
outstanding letters of credit, and is fully available to the
Company within the terms and covenant requirements of its credit
agreement. At year-end 2016, the Company had $1.5 billion in debt
outstanding, versus $1.3 billion in debt outstanding at year-end
2015.
2017 Financial Guidance &
Outlook
Based on current market conditions, the Company anticipates
Adjusted EBITDA in the range of $410.0 million to $425.0 million
for the full-year 2017. The Adjusted EBITDA outlook assumes organic
improvement, coupled with the residual impact of acquisitions
announced since the beginning of 2017, including the acquisitions
of Everist Materials and Razorback Concrete. No additional
potential acquisitions are included within the Company’s full-year
2017 Adjusted EBITDA guidance.
For the full year 2017, the Company anticipates gross capital
expenditures to be in the range $135.0 million to $155.0 million,
which includes several maintenance and profit-improvement projects.
Longer-term, the Company expects gross capital expenditures to
approximate 7-8% of net revenue per annum.
Webcast and Conference Call
Information
Summit Materials will conduct a conference call today at 11:00
a.m. eastern time (9:00 a.m. mountain time) to review the Company’s
fourth quarter and full-year 2016 financial results. 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.
To participate in the live teleconference:
Domestic Live: 1-877-407-0784International Live:
1-201-689-8560Conference ID: 86972581
To listen to a replay of the teleconference, which will be
available through March 22, 2017:
Domestic Replay: 1-844-512-2921International Replay:
1-412-317-6671Conference ID: 13652776
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, and 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 EPS, Adjusted EBITDA, Adjusted EBITDA margin,
gross profit and free cash flow, 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, Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA margin,
gross profit and net leverage 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, Adjusted EBITDA margin, gross profit, adjusted
net income, Adjusted EPS and free cash flow 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, to the extent
available without unreasonable effort. 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 contains “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. Any and all statements made
relating to the expectations for our anticipated benefits from
recent acquisitions, the macroeconomic outlook for our markets,
potential acquisition activity, our estimated and projected
earnings, margins, costs, expenditures, cash flows, sales volumes
and financial results are forward-looking statements. These
forward-looking statements are subject to risks and uncertainties
that may change at any time, and, therefore, our actual results may
differ materially from those expected. 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 impact 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 achieved. 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 our Annual Report on Form 10-K for the
fiscal year ended January 2, 2016. Such factors may be updated from
time to time in our periodic filings with the SEC, which are
accessible on the SEC’s website at www.sec.gov.
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 otherwise required by law.
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Consolidated Statements of Operations
($ in thousands, except share and per
share amounts)
Three months ended
Year ended December 31, January 2,
December 31,
January 2,
2016 2016 2016 2016 (unaudited)
(unaudited) (audited) (audited) Revenue: Product $ 315,329 $
295,633 $ 1,223,008 $ 1,043,843 Service 72,060
63,899 265,266 246,123 Net
revenue 387,389 359,532 1,488,274 1,289,966 Delivery and
subcontract revenue 35,584 41,930
137,789 142,331 Total revenue
422,973 401,462 1,626,063
1,432,297 Cost of revenue (excluding items shown separately
below): Product 192,185 185,534 751,697 676,457 Service
46,334 43,343 182,584
171,857 Net cost of revenue 238,519 228,877 934,281 848,314
Delivery and subcontract cost 35,584 41,930
137,789 142,331 Total cost of
revenue 274,103 270,807
1,072,070 990,645 General and administrative
expenses 58,654 28,285 243,862 177,769 Depreciation, depletion,
amortization and accretion 40,105 32,905 149,300 119,723
Transaction costs 1,507 1,475
6,797 9,519 Operating income 48,604 67,990
154,034 134,641 Interest expense 25,069 22,398 97,536 84,629 Loss
on debt financings — 7,318 — 71,631 Tax receivable agreement
expense 14,938 — 14,938 — Other (income) expense, net (66 )
(1,747 ) 733 (2,425 ) Income (loss)
from operations before taxes 8,663 40,021 40,827 (19,194 ) Income
tax expense (benefit) 2,614 (5,795 )
(5,299 ) (18,263 ) Income (loss) from continuing operations
6,049 45,816 46,126 (931 ) Income from discontinued operations
— (1,600 ) — (2,415 ) Net
income 6,049 47,416 46,126 1,484 Net income (loss) attributable to
noncontrolling interest in subsidiaries (41 ) 91 16 (1,826 ) Net
income (loss) attributable to Summit Holdings (1) 6,380
23,962 9,327 (24,408 )
Net income attributable to Summit Inc. $ (290 ) $ 23,363 $
36,783 $ 27,718 Net income per share of Class A
common stock: Basic $ (0.00 ) $ 0.46 $ 0.53 $ 0.70 Diluted $ (0.00
) $ 0.46 $ 0.53 $ 0.51 Weighted average shares of Class A common
stock: Basic 87,276,645 50,881,602 68,833,986 39,367,381
Diluted
87,276,645 50,908,151 69,317,452 89,472,266
_________________________
(1) Represents portion of business owned
by private interests
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Consolidated Balance Sheets
($ in thousands, except share and per
share amounts)
2016 2015
Assets Current assets:
Cash and cash equivalents
$ 143,392 $ 186,405 Accounts receivable, net 162,377 145,544 Costs
and estimated earnings in excess of billings 7,450 5,690
Inventories 157,679 130,082 Other current assets 12,800
4,807 Total current assets 483,698 472,528
Property, plant and equipment, net 1,444,367 1,269,006 Goodwill
781,824 596,397 Intangible assets, net 24,576 15,005 Other assets
47,001 43,243 Total assets $ 2,781,466
$ 2,396,179
Liabilities and Stockholders’
Equity Current liabilities: Current portion of debt $ 6,500 $
6,500 Current portion of acquisition-related liabilities 24,162
20,584 Accounts payable 81,565 81,397 Accrued expenses 111,605
92,942 Billings in excess of costs and estimated earnings
15,456 13,081 Total current liabilities
239,288 214,504 Long-term debt 1,514,456 1,273,652
Acquisition-related liabilities 32,664 39,977 Other noncurrent
liabilities 135,019 100,186 Total
liabilities 1,921,427 1,628,319
Stockholders’ equity: Class A common stock, par value $0.01 per
share; 1,000,000,000 shares authorized, 96,033,222 and 49,745,944
shares issued and outstanding as of December 31, 2016 and January
2, 2016, respectively 961 497 Class B common stock, par value $0.01
per share; 250,000,000 shares authorized, 100 and 69,007,297 shares
issued and outstanding as of December 31, 2016 and January 2, 2016,
respectively — 690 Additional paid-in capital 824,304 619,003
Accumulated earnings 19,028 10,870 Accumulated other comprehensive
loss (2,249 ) (2,795 ) Stockholders’ equity 842,044
628,265 Noncontrolling interest in consolidated subsidiaries 1,378
1,362 Noncontrolling interest in Summit Holdings 16,617
138,233 Total stockholders’ equity
860,039 767,860 Total liabilities and
stockholders’ equity $ 2,781,466 $ 2,396,179
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in thousands)
2016 2015
Cash flow from operating activities: Net income (loss) $
46,126 $ 1,484 Adjustments to reconcile net income (loss) to net
cash provided by operating activities: Depreciation, depletion,
amortization and accretion 160,633 125,019 Share-based compensation
expense 49,940 19,899 Deferred income tax benefit (8,589 ) (19,838
) Net (gain) loss on asset disposals (3,102 ) (23,087 ) Net gain on
debt financings — (9,877 ) Other (1,282 ) (1,629 ) Decrease
(increase) in operating assets, net of acquisitions: Accounts
receivable, net 2,511 3,852 Inventories (10,297 ) 4,275 Costs and
estimated earnings in excess of billings (2,684 ) 6,604 Other
current assets (5,518 ) 11,438 Other assets 1,976 (1,369 )
(Decrease) increase in operating liabilities, net of acquisitions:
Accounts payable (5,751 ) (4,241 ) Accrued expenses 13,196 (14,354
) Billings in excess of costs and estimated earnings 700 1,313
Other liabilities 7,004 (1,286 ) Net cash
provided by operating activities 244,863
98,203 Cash flow from investing activities: Acquisitions,
net of cash acquired (336,958 ) (510,017 ) Purchases of property,
plant and equipment (153,483 ) (88,950 ) Proceeds from the sale of
property, plant and equipment 16,868 13,110 Other 2,921
1,510 Net cash used for investing activities
(470,652 ) (584,347 ) Cash flow from financing
activities: Proceeds from equity offerings — 1,037,444 Capital
issuance costs (136 ) (61,609 ) Capital contributions by partners —
— Proceeds from debt issuances 354,000 1,748,875 Debt issuance
costs (5,801 ) (14,246 ) Payments on debt (120,702 ) (1,505,486 )
Purchase of noncontrolling interests — (497,848 ) Payments on
acquisition-related liabilities (32,040 ) (18,056 ) Distributions
from partnership (13,034 ) (28,736 ) Other 420
(1 ) Net cash provided by financing activities 182,707
660,337 Impact of foreign currency on cash 69
(1,003 ) Net (decrease) increase in cash (43,013 )
173,190 Cash and cash equivalents—beginning of period
186,405 13,215 Cash and cash equivalents—end
of period $ 143,392 $ 186,405
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Revenue Data by Segment and Line
of Business
($ in thousands)
Three months ended
Year ended December 31, January 2,
December 31, January 2, 2016
2016 2016 2016 Net Revenue by Segment
West $ 178,085 $ 182,763 $ 736,573 $ 719,485 East 131,385 101,902
470,614 374,997 Cement 77,919 74,867 281,087
195,484 Net Revenue $ 387,389 $ 359,532 $ 1,488,274 $
1,289,966 Net Revenue by Line of Business Materials
Aggregates $ 63,392 $ 57,144 $ 264,609 $ 219,040 Cement (1) 70,691
62,710 250,349 167,696 Products 181,246 175,779
708,050 657,107 Total Materials and Products
315,329 295,633 1,223,008 1,043,843 Services
72,060 63,899 265,266 246,123 Net
Revenue $ 387,389 $ 359,532 $ 1,488,274 $ 1,289,966 Gross
Profit Materials Aggregates $ 40,356 $ 37,228 $ 164,129 $ 130,163
Cement (1) 37,299 31,913 126,907 83,804 Products 47,351 42,812
188,611 162,466 Services 23,864 18,702 74,346
65,219 Gross Profit $ 148,870 $ 130,655 $ 553,993 $ 441,652
_______________________
(1) Net revenue for the cement line of business
excludes revenue associated with the processing of 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. The
cement segment gross profit includes the earnings from the waste
processing operations, cement swaps and other products.
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Volume and Price Statistics
(Units in thousands)
Three months ended Year
ended Total Volume December 31, 2016
January 2, 2016 December 31, 2016 January
2, 2016 Aggregates (tons) 8,790 8,349 36,092 32,297 Cement
(tons) 658 628 2,357 1,720 Ready-mix concrete (cubic yards) 1,025
913 3,823 3,406 Asphalt (tons) 1,090 1,072 4,359 4,359
Three months ended Year ended Pricing
December 31, 2016 January 2, 2016 December 31,
2016 January 2, 2016 Aggregates (per ton) $ 9.67 $ 9.42
$ 9.85 $ 9.19 Cement (per ton) 109.57 102.25 108.63 101.05
Ready-mix concrete (per cubic yards) 104.44 104.82 103.74 102.92
Asphalt (per ton) 52.06 58.15 54.74 57.67
Year over Year
Comparison Volume Pricing Volume
Pricing Aggregates (per ton) 5.3 % 2.7 % 11.8 % 7.2 % Cement
(per ton) 4.8 % 7.2 % 37.0 % 7.5 % Ready-mix concrete (per cubic
yards) 12.3 % (0.4 ) % 12.2 % 0.8 % Asphalt (per ton) 1.7 % (10.5 )
% - % (5.1 ) %
Year over Year Comparison (Excluding
acquisitions) Volume Pricing Volume
Pricing Aggregates (per ton) (11.8 ) % 0.0 % (5.5 ) % 4.8 %
Cement (per ton) 0.6 % 6.8 % * * Ready-mix concrete (per cubic
yards) (9.5 ) % 1.5 % (3.4 ) % 2.0 % Asphalt (per ton) (9.2 ) %
(9.0 ) % (13.0 ) % (3.6 ) %
_________________________
* The Davenport Assets were immediately integrated
with our existing cement operations such that it is impracticable
to bifurcate the growth attributable to the Davenport Assets from
organic growth.
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Reconciliations of Gross Revenue
to Net Revenue by Line of Business
($ and Units in thousands)
Three months ended December 31, 2016
Gross Revenue Intercompany
Net Volumes Pricing by Product
Elimination/Delivery Revenue Aggregates 8,790 $ 9.67
$ 84,989 $ (21,597 ) $ 63,392 Cement 658 109.57
72,078 (1,387 ) 70,691 Materials $ 157,067 $ (22,984
) $ 134,083 Ready-mix concrete 1,025 104.44 107,035 274 107,309
Asphalt 1,090 52.06 56,766 154 56,920 Other Products 79,732
(62,715 ) 17,017 Products $ 243,533 $ (62,287 ) $
181,246
Year ended December 31, 2016
Gross Revenue Intercompany Net Volumes
Pricing by Product Elimination/Delivery
Revenue Aggregates 36,092 $ 9.85 $ 355,617 $ (91,008 ) $
264,609 Cement 2,357 108.63 256,046 (5,697 )
250,349 Materials $ 611,663 $ (96,705 ) $ 514,958 Ready-mix
concrete 3,823 103.74 396,597 (681 ) 395,916 Asphalt 4,359 54.74
238,588 (230 ) 238,358 Other Products 327,778
(254,002 ) 73,776 Products $ 962,963 $ (254,913 ) $ 708,050
SUMMIT MATERIALS, INC. AND
SUBSIDIARIESUnaudited Reconciliations of Non-GAAP Financial
Measures($ in thousands, except share and per share amounts)
The tables below reconcile our net income to Adjusted EBITDA and
present Adjusted EBITDA by segment for the three months and year
ended December 31, 2016 and January 2, 2016.
Three months ended
Year ended December 31, January
2, December 31, January 2,
Reconciliation of Net Income to Adjusted EBITDA 2016
2016 2016 2016 Net
income $ 6,049 $ 47,416 $ 46,126 $ 1,484 Interest expense 25,069
22,398 97,536 84,629 Income tax expense (benefit) 2,614 (5,795 )
(5,299 ) (18,263 ) Depreciation, depletion and amortization
39,743 32,632 147,736
118,321 EBITDA $ 73,475 $ 96,651 $
286,099 $ 186,171 Accretion 362 273 1,564 1,402 IPO/
Legacy equity modification costs — — 37,257 28,296 Loss on debt
financings — 7,318 — 71,631 Tax receivable agreement expense 14,938
— 14,938 — Income from discontinued operations — (1,600 ) — (2,415
) Transaction costs 1,507 1,475 6,797 9,519 Management fees and
expenses (1,379 ) — (1,379 ) 1,046 Non-cash compensation 3,817
1,310 12,683 5,448 Loss (gain) on disposal and impairment of assets
3,805 (16,561 ) 3,805 (16,561 ) Other 5,490
1,463 9,583 2,991 Adjusted
EBITDA $ 102,015 $ 90,329 $ 371,347 $ 287,528
Adjusted EBITDA by Segment West 39,887 39,314
167,434 150,764 East 35,602 29,545 126,007 92,303 Cement 34,163
30,948 112,991 74,845 Corporate (7,637 ) (9,478 )
(35,085 ) (30,384 ) Adjusted EBITDA $ 102,015
$ 90,329 $ 371,347 $ 287,528 Adjusted EBITDA
Margin (1) 26.3 % 25.1 % 25.0 % 22.3 %
(1) Adjusted EBITDA margin is defined as
Adjusted EBITDA as a percentage of net revenue.
The table below reconciles our net (loss) income per share
attributable to Summit Materials, Inc. to adjusted income per share
for the three months and year ended December 31, 2016 and January
2, 2016. 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 net income per share.
Three months ended
Twelve months ended December 31, 2016
January 2, 2016 December 31, 2016 January
2, 2016 Reconciliation of Net (Loss) Income Per Share to
Adjusted Diluted EPS Net Income Per Share
Net Income Per Share Net Income
Per Share Net Income Per Share Net
(loss) income attributable to Summit Materials, Inc. $ (290 ) $ — $
23,363 $ 0.23 $ 36,783 $ 0.36 $ 27,718 $ 0.28 Adjustments: Net
income (loss) attributable to noncontrolling interest 6,380 0.06
23,962 0.24 9,327 0.09 (24,408 ) (0.25 ) IPO/ Legacy equity
modification costs — — — — 37,257 0.37 28,296 0.29 Tax receivable
agreement expense 14,938 0.15 — — 14,938 0.15 — — Loss on debt
financings, net of tax — — 3,671 0.04 — — 59,696 0.60 Gain on
transfer of Bettendorf assets — —
(16,561 ) (0.16 ) — — (16,561 )
(0.17 ) Adjusted diluted net income $ 21,028 $ 0.21 $ 34,435
$ 0.35 $ 98,305 $ 0.97 $ 74,741 $ 0.75
Weighted-average shares: Class A common stock 87,276,645 50,881,602
68,833,986 39,367,381 LP Units outstanding 13,900,060
50,306,370 32,327,907 59,911,631
Total equity interest 101,176,705 101,187,972
101,161,893 99,279,012
The following table reconciles operating income to gross profit
and gross margin for the three months and year ended December 31,
2016 and January 2, 2016.
Three months ended Year
ended December 31, January 2, December 31,
January 2, Reconciliation of Operating Income to Gross
Profit 2016 2016 2016 2016 (in
thousands) Operating income $ 48,604 $ 67,990 $ 154,034 $ 134,641
General and administrative expenses 58,654 28,285 243,862 177,769
Depreciation, depletion, amortization and accretion 40,105 32,905
149,300 119,723 Transaction costs 1,507 1,475
6,797 9,519 Gross Profit $ 148,870 $ 130,655 $ 553,993 $
441,652 Gross Margin (1) 38.4 % 36.3 % 37.2 % 34.2 %
_______________________
(1) Gross margin is defined as gross
profit as a percentage of net revenue.
The following table reconciles net cash used for operating
activities to free cash flow for the three months and year ended
December 31, 2016 and January 2, 2016.
Three months ended
Year ended December 31, January 2,
December 31, January 2, 2016
2016 2016 2016 Net income
$ 6,049 $ 47,416 $ 46,126 $ 1,484 Non-cash items 49,260
(9,467 ) 197,600 90,487
Net income adjusted for non-cash items 55,309 37,949 243,726 91,971
Change in working capital accounts 105,031
78,484 1,137 6,232 Net cash
provided by operating activities 160,340 116,433 244,863 98,203
Capital expenditures, net of asset sales (30,892 )
(15,051 ) (136,615 ) (75,840 ) Free cash flow $
129,448 $ 101,382 $ 108,248 $ 22,363
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version on businesswire.com: http://www.businesswire.com/news/home/20170222005577/en/
Summit Materials, Inc.Investor & Media Relations:Noel Ryan,
303-515-5155noel.ryan@summit-materials.com
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