- Net Revenue Growth of 5.5% in First Quarter
2019
- Organic aggregates volumes increased 6.6%
- Organic aggregates price increased 6.3%
- Reaffirmed 2019 Adjusted EBITDA Guidance
Range For The Full-Year 2019 at $430 - $470 million
Summit Materials, Inc. (NYSE: SUM, “Summit” or the “Company”), a
leading vertically integrated construction materials company, today
announced results for the first quarter 2019.
For the three months ended March 30, 2019, the Company reported
net loss attributable to Summit Inc. of $(68.8) million, or $(0.62)
per basic share, compared to net loss attributable to Summit Inc.
of $(53.7) million, or $(0.49) per basic share in the comparable
prior year period. Summit reported adjusted diluted net loss
of $(56.9) million, or $(0.49) per adjusted diluted share as
compared to adjusted diluted net loss of $(62.9) million, or
$(0.55) per adjusted diluted share in the prior year period.
Summit's net revenue increased 5.5% in the first quarter of 2019
compared to the comparable 2018 period, while net income and
earnings per share decreased in 2019 as compared to the comparable
2018 period, primarily due to the $14.6 million loss on debt
financing to redeem the 8.5% senior notes in March 2019. Adjusted
EBITDA increased to $6.6 million in 2019 as compared to $5.5
million in 2018, as increases in aggregates and asphalt volumes and
pricing were achieved. However, Summit noted those increases were
offset by higher costs of revenue in its cement segment due to
lower production levels during the quarter. Tom Hill, CEO of Summit
Materials, stated, "We were very pleased to see our organic average
sales prices for aggregates increased by 6.3% in the first quarter
as compared to a year ago. We continue to believe end market
fundamentals remain intact for the construction industry going into
2019." Hill commented, "Cement sales volumes were up slightly in
the first quarter of 2019 as compared to 2018 despite challenging
weather conditions. However, an extended annual maintenance
shutdown and record flooding on the Mississippi River that has
continued into the second quarter has negatively impacted our
Cement business."
Summit reaffirmed its 2019 full year Adjusted EBITDA guidance.
Hill continued, "We are pleased to confirm our previously announced
Adjusted EBITDA guidance of approximately $430 million to $470
million for 2019."
“Underlying demand conditions in most of our markets remain
favorable and are expected to remain so during the remainder of
2019,” continued Hill. In Summit's public markets, state
transportation funding measures in Texas, coupled with steady
increases in federal subsidies, are contributing to increased
lettings activity. Single family housing starts and permits
remain well below peak levels in Summit's major markets.
As previously announced, in February 2019 Summit extended and
amended its revolving credit facility which now has maximum
availability of $345 million and matures in 2024. Further, in March
2019, Summit retired $250 million of 8.5% senior notes due 2022 by
issuing $300 million of 6.5% senior notes due in 2027. Brian
Harris, CFO of Summit Materials, stated, “We were very pleased with
both of those transactions, which increased our overall liquidity
position and lowers our cash interest outlays in the future.
Further, we are pleased to reaffirm our guidance for 2019 capital
expenditures of approximately $160 million to $175 million." As
expected, given the seasonal decrease in cash balances, Summit's
leverage ratio increased over year-end levels. However, Summit
continues to expect increased levels of cash flow generated from
operations less capital expenditures in 2019 as compared to 2018,
which we expect will allow Summit to reduce its leverage ratio by
the end of 2019.
First Quarter 2019| Results by Line of Business
Aggregates Business: Aggregates net revenues increased by
30.3% to $87.9 million in the first quarter 2019, when compared to
the prior year period. Aggregates adjusted cash gross profit
margin improved to 43.2% in the first quarter 2019, compared to
41.5% in the prior year period, as pricing gains exceeded input
costs. Organic aggregates sales volumes increased 6.6% in the first
quarter 2019, when compared to the prior year period. Organic
average selling prices on aggregates increased 6.3% in the first
quarter 2019 when compared to the prior year period due to
improvements in prices within both the West and East segments
during the period.
Cement Business: Cement segment net revenues
declined 0.7% to $37.3 million in the first quarter 2019, when
compared to the prior year period. Cement adjusted cash gross
profit margin decreased to 3.1% in the first quarter, compared to
19.5% in the prior year period, as margins were impacted by lower
production levels in 2019. Organic sales volume of cement
increased 1.0% in the first quarter, when compared to the prior
year period. Organic average selling prices on cement
decreased 1.5% in the first quarter, when compared to the prior
year period due to changes of the customer mix across our
geographies.
Products Business: Net revenues decreased 3.2% to $151.3
million in the first quarter 2019, when compared to the prior year
period. Products adjusted cash gross profit margin declined to
13.5% in the first quarter, versus 16.1% in the prior year period,
reflecting a 5.7% decrease in organic sales volumes of ready-mix
concrete, which adversely impacted productivity and efficiency in
the first quarter of 2019. This decrease was only partially offset
by an increase in the organic average selling prices of 0.4% above
the prior year period. Organic sales volumes of asphalt increased
20.0% in the first quarter and organic average selling prices
increased 5.0% over the same period in 2018.
First Quarter 2019 | Results By Reporting Segment
Net revenue increased by 5.5% to $306.0 million in the first
quarter 2019, versus $289.9 million in the prior year
period. The improvement in net revenue was primarily
attributable to both organic and acquisition-related contributions
in the East and West segments, offset by a decline in the Cement
segment. The Company reported operating loss of $(57.7)
million in the first quarter 2019, compared to $(51.5) million in
the prior year period. Adjusted EBITDA was $6.6 million in the
first quarter 2019, compared to $5.5 million in the prior year
period.
West Segment: The West Segment reported operating
loss of $(11.6) million in the first quarter 2019, compared to
$(6.1) million in the prior year period. Adjusted EBITDA decreased
to $14.3 million in the first quarter 2019, compared to $16.2
million in the prior year period. The quarterly declines in
West Segment operating income and Adjusted EBITDA were primarily
attributable to increased labor and materials costs as well as
increased depreciation and amortization from acquisitions completed
in the last nine months of 2018, partially offset by increases in
average selling prices on aggregates and asphalt concrete.
Aggregates revenue in the first quarter increased 12.3% over the
prior year period as a result of contributions from acquisitions,
resulting in a 4.2% increase in organic volumes and a 4.7% increase
in organic average sales prices. Ready-mix concrete revenue in the
first quarter 2019 decreased 4.3% over the prior year period,
primarily due to a 5.4% and 0.5% decrease in organic volumes and
organic average sales prices, respectively, which were partially
offset by an increase in acquisition related volumes. Asphalt
revenue increased by 44.0% in the first quarter 2019 over the prior
year period, resulting from a 22.8% and 1.6% increase in volumes
and average sales prices, respectively.
East Segment: The East Segment reported operating
loss of $(17.3) million in the first quarter 2019, compared to
$(20.9) million in the prior year period. Adjusted EBITDA
increased to $3.2 million in the first quarter 2019, compared to
$(3.2) million in the prior year period. The quarterly
improvement in East Segment operating loss and Adjusted EBITDA was
mainly attributable to increases in net revenue from our
acquisition program, increases in average selling prices of
aggregates, ready-mix concrete and asphalt, partially offset by
increased labor as well as decreases in ready-mix volumes.
Aggregates revenue increased 36.8%, primarily due to increases
resulting from our acquisition program as well as a 9.1% and 7.6%
increase in organic volumes and average sales prices, respectively.
Ready-mix concrete revenue decreased 2.7% as a result of lower
sales volumes, partially offset by an increase in organic average
sales prices. Asphalt revenue increased 47.3% primarily as a result
of a 50.0% increase in organic average sales prices, partially
offset by a 5.9% decrease in organic volumes.
Cement Segment: The Cement Segment reported operating
loss of $(12.9) million in the first quarter 2019, compared to
$(2.8) million in the prior year period primarily due to lower
levels of production due to extended plant shutdowns in 2019, which
resulted in higher costs of revenue as less production costs were
capitalized into inventory. Adjusted EBITDA declined to $(2.6)
million in the first quarter 2019, compared to $3.7 million in the
prior year period, as total production in the first three months of
2019 was below production levels in the first three months of
2018. The Company experienced slightly lower organic average
selling prices mostly offset by a slight increase in organic sales
volumes during first quarter 2019 as compared to the prior year
period.
Liquidity and Capital Resources
As of March 30, 2019, the Company had cash on hand of $64.8
million and borrowing capacity under its revolving credit facility
of $329.8 million. The borrowing capacity on the revolving
credit facility is fully available to the Company within the terms
and covenant requirements of its credit agreement. As of
March 30, 2019, the Company had $1.9 billion in debt
outstanding.
Financial Outlook
For the full-year 2019, the Company estimates its Adjusted
EBITDA to be in the range of $430 million to $470 million. For
the full-year 2019, the Company estimates its capital expenditures
to be in the range of $160 million to $175 million.
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
first quarter 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: 1-877-407-0784
International Live: 1-201-689-8560 Conference ID: 57511368
To listen to a replay of the teleconference, which will be
available through June 9, 2019:
Domestic Replay: 1-844-512-2921
International Replay: 1-412-317-6671 Conference ID: 13690428
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 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 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 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 December 29, 2018 as filed with the
Securities and Exchange Commission (the “SEC”), any factors
discussed in the section entitled “Risk Factors” in any of our
subsequently filed SEC filings, and the following:
- 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;
- environmental, health, safety and climate
change laws or governmental requirements or policies concerning
zoning and land use;
- rising prices for commodities, labor and
other production and delivery costs as a result of inflation 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;
- our substantial current level of
indebtedness;
- our dependence on senior management and
other key 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; and
- potential labor disputes.
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
Consolidated Statements of Operations
($ in thousands, except share and per
share amounts)
Three months ended March 30,
March 31, 2019 2018 Revenue:
Product $ 271,641 $ 256,807 Service 34,309 33,109 Net
revenue 305,950 289,916 Delivery and subcontract revenue 26,689
24,505 Total revenue 332,639 314,421
Cost of revenue (excluding items shown separately below): Product
213,726 197,433 Service 26,589 25,923 Net cost of
revenue 240,315 223,356 Delivery and subcontract cost 26,689
24,505 Total cost of revenue 267,004 247,861
General and administrative expenses 67,610 69,861 Depreciation,
depletion, amortization and accretion 55,388 46,958 Transaction
costs 308 1,266 Operating loss (57,671 ) (51,525 )
Interest expense 30,105 28,784 Loss on debt financings 14,565 —
Other income, net (2,803 ) (7,655 ) Loss from operations before
taxes (99,538 ) (72,654 ) Income tax benefit (28,037 ) (16,706 )
Net loss (71,501 ) (55,948 ) Net loss attributable to Summit
Holdings (1) (2,729 ) (2,219 ) Net loss attributable to Summit Inc.
$ (68,772 ) $ (53,729 ) Loss per share of Class A common stock:
Basic $ (0.62 ) $ (0.49 ) Diluted $ (0.62 ) $ (0.49 ) Weighted
average shares of Class A common stock: Basic 111,811,679
110,659,098 Diluted 111,811,679 110,659,098
________________________________________________________ (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)
March 30,
December 29, 2019 2018 (unaudited) (audited)
Assets Current assets: Cash and cash equivalents $ 64,837 $
128,508 Accounts receivable, net 195,411 214,518 Costs and
estimated earnings in excess of billings 17,079 18,602 Inventories
214,038 213,851 Other current assets 19,245 16,061 Total
current assets 510,610 591,540 Property, plant and equipment, less
accumulated depreciation, depletion and amortization (March 30,
2019 - $837,896 and December 29, 2018 - $794,251) 1,799,941
1,780,132 Goodwill 1,195,262 1,192,028 Intangible assets, less
accumulated amortization (March 30, 2019 - $8,656 and December 29,
2018 - $8,247) 18,051 18,460 Deferred tax assets, less valuation
allowance (March 30, 2019 - $21,859 and December 29, 2018 -
$19,366) 253,104 225,397 Operating lease right-of-use assets 34,403
— Other assets 49,990 50,084 Total assets $ 3,861,361
$ 3,857,641
Liabilities and Stockholders’ Equity Current
liabilities: Current portion of debt $ 4,765 $ 6,354 Current
portion of acquisition-related liabilities 37,422 34,270 Accounts
payable 101,843 107,702 Accrued expenses 96,476 100,491 Current
operating lease liabilities 8,098 — Billings in excess of costs and
estimated earnings 10,656 11,840 Total current liabilities
259,260 260,657 Long-term debt 1,855,346 1,807,502
Acquisition-related liabilities 38,908 49,468 Tax receivable
agreement liability 309,733 309,674 Noncurrent operating lease
liabilities 27,200 — Other noncurrent liabilities 92,439
88,195 Total liabilities 2,582,886 2,515,496 Stockholders’ equity:
Class A common stock, par value $0.01 per share; 1,000,000,000
shares authorized, 112,067,531 and 111,658,927 shares issued and
outstanding as of March 30, 2019 and December 29, 2018,
respectively 1,121 1,117 Class B common stock, par value $0.01 per
share; 250,000,000 shares authorized, 99 shares issued and
outstanding as of March 30, 2019 and December 29, 2018 — —
Additional paid-in capital 1,200,503 1,194,204 Accumulated earnings
60,967 129,739 Accumulated other comprehensive income 4,265
2,681 Stockholders’ equity 1,266,856 1,327,741 Noncontrolling
interest in Summit Holdings 11,619 14,404 Total
stockholders’ equity 1,278,475 1,342,145 Total liabilities
and stockholders’ equity $ 3,861,361 $ 3,857,641
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in thousands)
Three months ended
March 30, March 31, 2019
2018 Cash flow from operating activities: Net loss $ (71,501
) $ (55,948 ) Adjustments to reconcile net loss to net cash
provided by operating activities: Depreciation, depletion,
amortization and accretion 57,039 45,559 Share-based compensation
expense 5,906 8,507 Net gain on asset disposals (1,735 ) (4,077 )
Non-cash loss on debt financings 2,850 — Change in deferred tax
asset, net (28,028 ) (17,373 ) Other 47 1,579 (Increase) decrease
in operating assets, net of acquisitions and dispositions: Accounts
receivable, net 20,118 27,979 Inventories (705 ) (35,248 ) Costs
and estimated earnings in excess of billings 1,541 (2,678 ) Other
current assets (3,447 ) (3,202 ) Other assets 2,576 747 (Decrease)
increase in operating liabilities, net of acquisitions and
dispositions: Accounts payable (5,431 ) (7,742 ) Accrued expenses
(6,963 ) (8,660 ) Billings in excess of costs and estimated
earnings (1,195 ) (1,788 ) Tax receivable agreement liability 59
822 Other liabilities (1,807 ) 156 Net cash used in
operating activities (30,676 ) (51,367 ) Cash flow from investing
activities: Acquisitions, net of cash acquired (2,842 ) (113,993 )
Purchases of property, plant and equipment (62,188 ) (49,505 )
Proceeds from the sale of property, plant and equipment 2,797 7,788
Other (178 ) 1,500 Net cash used for investing activities
(62,411 ) (154,210 ) Cash flow from financing activities: Proceeds
from debt issuances 300,000 — Debt issuance costs (5,774 ) —
Payments on debt (256,333 ) (3,972 ) Payments on
acquisition-related liabilities (8,933 ) (8,962 ) Distributions
from partnership — (9 ) Proceeds from stock option exercises 766
15,475 Other (501 ) (1,820 ) Net cash provided by financing
activities 29,225 712 Impact of foreign currency on
cash 191 (398 ) Net (decrease) increase in cash (63,671 ) (205,263
) Cash and cash equivalents—beginning of period 128,508
383,556 Cash and cash equivalents—end of period $ 64,837
$ 178,293
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Revenue Data by Segment and Line
of Business
($ in thousands)
Three months ended
Twelve months ended March 30, March 31,
March 30, March 31, 2019 2018
2019 2018 Segment Net Revenue: West $ 168,229 $
168,944 $ 1,010,440 $ 936,962 East 100,415 83,421 634,308 548,790
Cement 37,306 37,551 280,544 297,529
Net Revenue $ 305,950 $ 289,916 $ 1,925,292 $
1,783,281 Line of Business - Net Revenue: Materials
Aggregates $ 87,872 $ 67,450 $ 394,246 $ 319,211 Cement (1) 32,499
33,117 258,258 275,723 Products 151,270 156,240
962,489 886,792 Total Materials and Products 271,641
256,807 1,614,993 1,481,726 Services
34,309 33,109 310,299 301,555 Net
Revenue $ 305,950 $ 289,916 $ 1,925,292 $
1,783,281 Line of Business - Net Cost of Revenue:
Materials Aggregates $ 49,890 $ 39,482 $ 162,246 $ 113,429 Cement
31,351 25,788 140,160 131,673 Products 130,855 131,137
763,037 677,406 Total Materials and Products
212,096 196,407 1,065,443 922,508
Services 28,219 26,949 235,551 210,120
Net Cost of Revenue $ 240,315 $ 223,356 $ 1,300,994
$ 1,132,628 Line of Business - Adjusted Cash
Gross Profit (2): Materials Aggregates $ 37,982 $ 27,968 $ 232,000
$ 205,782 Cement (3) 1,148 7,329 118,098 144,050 Products 20,415
25,103 199,452 209,386 Total Materials
and Products 59,545 60,400 549,550 559,218
Services 6,090 6,160 74,748 91,435
Adjusted Cash Gross Profit $ 65,635 $ 66,560 $
624,298 $ 650,653 Adjusted Cash Gross Profit
Margin (2) Materials Aggregates 43.2 % 41.5 % 58.8 % 64.5 % Cement
(3) 3.1 % 19.5 % 42.1 % 48.4 % Products 13.5 % 16.1 % 20.7 % 23.6 %
Services 17.8 % 18.6 % 24.1 % 30.3 % Total Adjusted Cash Gross
Profit Margin 21.5 % 23.0 % 32.4 % 36.5 %
________________________________________________________ (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
Total Volume March 30, 2019 March
31, 2018 Aggregates (tons) 10,207 8,814 Cement (tons) 297 294
Ready-mix concrete (cubic yards) 1,091 1,142 Asphalt (tons) 421 350
Three months ended Pricing March 30,
2019 March 31, 2018 Aggregates (per ton) $ 10.62 $ 9.86
Cement (per ton) 113.31 115.04 Ready-mix concrete (per cubic yards)
107.62 107.08 Asphalt (per ton) 54.62 52.04
Year
over Year Comparison Volume Pricing Aggregates
(per ton) 15.8 % 7.7 % Cement (per ton) 1.0 % (1.5 )% Ready-mix
concrete (per cubic yards) (4.5 )% 0.5 % Asphalt (per ton) 20.3 %
5.0 %
Year over Year Comparison (Excluding
acquisitions) Volume Pricing Aggregates (per ton)
6.6 % 6.3 % Cement (per ton) 1.0 % (1.5 )% Ready-mix concrete (per
cubic yards) (5.7 )% 0.4 % Asphalt (per ton) 20.0 % 5.0 %
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 March 30, 2019
Gross Revenue Intercompany
Net Volumes Pricing by Product
Elimination/Delivery Revenue Aggregates 10,207 $
10.62 $ 108,388 $ (20,516 ) $ 87,872 Cement 297 113.31
33,600 (1,101 ) 32,499 Materials $ 141,988 $
(21,617 ) $ 120,371 Ready-mix concrete 1,091 107.62 117,428 (108 )
117,320 Asphalt 421 54.62 23,009 (43 ) 22,966 Other Products 65,549
(54,565 ) 10,984 Products $ 205,986 $ (54,716 ) $
151,270
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 loss to Adjusted EBITDA by
segment for the three months ended March 30, 2019 and
March 31, 2018.
Reconciliation of Net Loss to Adjusted EBITDA
Three months ended March 30, 2019 by Segment
West East Cement
Corporate Consolidated ($ in thousands) Net
loss (1) $ (9,552 ) $ (18,367 ) $ (10,568 ) $ (33,014 ) $ (71,501 )
Interest expense (income) (1) 743 1,008 (2,319 ) 30,673 30,105
Income tax (benefit) expense (443 ) 54 — (27,648 ) (28,037 )
Depreciation, depletion and amortization 23,796 19,905
10,154 952 54,807 EBITDA $ 14,544
$ 2,600 $ (2,733 ) $ (29,037 ) $ (14,626 ) Accretion
129 306 146 — 581 Loss on debt financings — — — 14,565 14,565
Transaction costs — — — 308 308 Non-cash compensation — — — 5,906
5,906 Other (375 ) 336 — (107 ) (146 ) Adjusted
EBITDA $ 14,298 $ 3,242 $ (2,587 ) $ (8,365 ) $ 6,588
Adjusted EBITDA Margin (1) 8.5 % 3.2 % (6.9 )% 2.2 %
Reconciliation of Net Income (Loss) to Adjusted
EBITDA Three months ended March 31, 2018 by
Segment West East Cement Corporate
Consolidated ($ in thousands) Net income (loss) $ 72 $
(21,644 ) $ (1,097 ) $ (33,279 ) $ (55,948 ) Interest expense
(income) 1,180 606 (1,606 ) 28,604 28,784 Income tax benefit (382 )
(186 ) — (16,138 ) (16,706 ) Depreciation, depletion and
amortization 22,008 17,512 6,313 710
46,543 EBITDA $ 22,878 $ (3,712 ) $ 3,610 $
(20,103 ) $ 2,673 Accretion 143 215 57 — 415 Transaction
costs (4 ) — — 1,270 1,266 Non-cash compensation — — — 8,507 8,507
Other (2) (6,844 ) 294 — (798 ) (7,348 ) Adjusted
EBITDA $ 16,173 $ (3,203 ) $ 3,667 $ (11,124 ) $
5,513 Adjusted EBITDA Margin (1) 9.6 % (3.8 )% 9.8 % 1.9 %
_______________________________________________________ (1)
Adjusted EBITDA Margin is defined as Adjusted EBITDA as a
percentage of net revenue. (2) In the three months ended March 31,
2018, we negotiated a $6.9 million reduction in the amount of a
contingent liability from one of our acquisitions. As we had passed
the period to revise the opening balance sheet for this
acquisition, the adjustment was recorded as other income.
The table below reconciles our net loss per share attributable
to Summit Materials, Inc. to adjusted diluted net loss per share
for the three months ended March 30, 2019 and March 31, 2018. The
per share amount of the net loss 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
loss per share.
Three months ended March 30, 2019
March 31, 2018 Reconciliation of Net Loss
Per Share to Adjusted Diluted EPS Net Loss
Per EquityUnit
Net Loss
Per EquityUnit
Net loss attributable to Summit Materials, Inc. $ (68,772 ) $ (0.60
) $ (53,729 ) $ (0.47 ) Adjustments: Net loss attributable to
noncontrolling interest (2,729 ) (0.02 ) (2,219 ) (0.02 )
Adjustment to acquisition deferred liability — — (6,947 ) (0.06 )
Loss on debt financings 14,565 0.13 — —
Adjusted diluted net loss $ (56,936 ) $ (0.49 ) $ (62,895 ) $ (0.55
) Weighted-average shares: Basic Class A common stock 111,811,679
110,659,098 LP Units outstanding 3,426,617 3,649,212
Total equity units 115,238,296 114,308,310
The following table reconciles operating loss to Adjusted Cash
Gross Profit and Adjusted Cash Gross Profit Margin for the three
months ended March 30, 2019 and March 31, 2018.
Three months ended March
30, March 31, Reconciliation of
Operating Loss to Adjusted Cash Gross Profit 2019
2018 ($ in thousands) Operating loss $ (57,671 ) $ (51,525 )
General and administrative expenses 67,610 69,861 Depreciation,
depletion, amortization and accretion 55,388 46,958 Transaction
costs 308 1,266 Adjusted Cash Gross Profit (exclusive
of items shown separately) $ 65,635 $ 66,560 Adjusted
Cash Gross Profit Margin (exclusive of items shown separately) (1)
21.5 % 23.0 %
_______________________________________________________ (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 used for operating
activities to free cash flow for the three months ended
March 30, 2019 and March 31, 2018.
Three months ended March
30, March 31, ($ in thousands)
2019
2018 Net loss $ (71,501 ) $ (55,948 ) Non-cash items 36,079
34,195 Net loss adjusted for non-cash items (35,422 )
(21,753 ) Change in working capital accounts 4,746 (29,614 )
Net cash used in operating activities (30,676 ) (51,367 ) Capital
expenditures, net of asset sales (59,391 ) (41,717 ) Free cash flow
$ (90,067 ) $ (93,084 )
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190508005179/en/
Mr. Brian HarrisExecutive Vice President and Chief Financial
OfficerSummit Materials, Inc.brian.harris@summit-materials.com
Summit Materials (NYSE:SUM)
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