- Record 2020 Net Income Attributable to Summit
Inc of $138.0 million
- 4Q Net Income Attributable to Summit Inc. of
$35.2 million
- Leverage ratio improved to 3.2x
- Record Full Year 2020 Adjusted EBITDA of
$485.0 million, an increase of 5.1%
Summit Materials, Inc. (NYSE: SUM, “Summit,” "Summit Inc." or
the “Company”), a leading vertically integrated construction
materials company, today announced results for the fourth quarter
and full year 2020.
For the three months ended January 2, 2021, the Company reported
net income attributable to Summit Inc. of $35.2 million, or $0.31
per basic share, compared to net income attributable to Summit Inc.
of $35.7 million, or $0.32 per basic share in the comparable prior
year period. Summit reported adjusted diluted net income of $28.8
million, or $0.25 per adjusted diluted share as compared to
adjusted diluted net income of $71.5 million, or $0.62 per adjusted
diluted share in the prior year period. For the full year 2020, net
income attributable to Summit Inc. was $138.0 million, or $1.21 per
basic share, compared to $59.1 million, or $0.53 per basic share,
in 2019.
Summit's net revenue increased 13.0% in the fourth quarter of
2020 to $571.9 million, compared to $506.3 million in the fourth
quarter of 2019, on higher ready-mix concrete, aggregates, asphalt
and paving revenue, relative to a year ago. Net revenue increased
$104.1 million to $2,134.8 million in the year ended January 2,
2021, resulting from growth in all lines of business other than
cement.
The Company reported operating income of $66.2 million in the
fourth quarter 2020, compared to $59.9 million in the prior year
period, and operating income of $225.2 million in the full year
2020, compared to $213.6 million in 2019. Operating income
increased by $11.6 million, or 5.4%, in 2020 as compared to 2019,
primarily due to net revenue gains, partially offset by higher
G&A costs due in part to a management transition that occurred
earlier in the year. Summit's operating margin percentage for the
three and twelve months ended January 2, 2021 decreased to 11.6%
from 11.8%, and was unchanged at 10.5% respectively, from the
comparable period a year ago, due to the factors noted above.
Adjusted EBITDA increased in the fourth quarter to $130.6
million as compared to $121.1 million in the fourth quarter 2019,
and for full year 2020 Adjusted EBITDA increased to $485.0 million
from $461.5 million in 2019.
For the three months ended January 2, 2021, sales volumes
increased 24.7% in aggregates, 4.5% in cement, 6.4% in ready-mix
concrete and 20.3% in asphalt relative to the same period last
year. Organic average selling prices for aggregates decreased 3.6%
in the fourth quarter of 2020 due to changes in product mix
relative to a year ago as the fourth quarter 2019 included a
contribution from flood repair work. Inclusive of acquisitions,
average selling prices in the fourth quarter of 2020 decreased 6.2%
in aggregates, and increased 2.8% in cement, 3.2% in ready-mix
concrete and 2.1% in asphalt. For the full year 2020, sales volumes
increased 9.5% in aggregates, 5.0% in ready-mix concrete and 4.7%
in asphalt, and decreased 4.6% in cement. Average selling prices in
full year 2020 decreased 2.0% in aggregates due to product mix, and
increased 1.5% in cement, 4.7% in ready-mix concrete and 1.4% in
asphalt. On a mix-adjusted basis, aggregates prices increased
1.7%.
Anne Noonan, CEO of Summit Materials, commented, "Summit
delivered a strong finish to 2020 as migration trends continued to
favor our rural and exurban markets, which directly benefited
residential construction activity. In many of our key states,
public spending activity was resilient and we had more working
days. We are reporting record annual net income, Adjusted EBITDA
and free cash flow. We are focused on sustainable growth with
investments in greenfields and end markets that are underpinned by
strong growth fundamentals. Our leverage ratio declined to 3.2x at
year end, down from 3.6x a year ago. Most importantly, we continue
to vigilantly practice safety and distancing protocols in response
to the COVID-19 outbreak."
As of January 2, 2021, the Company had $418.2 million in cash
and $1.9 billion in debt outstanding. The Company's $345 million
revolving credit facility has $329 million available after letters
of credit. For the year ended January 2, 2021, cash flow provided
by operations was $408.9 million while cash paid for capital
equipment was $177.2 million. Brian Harris, CFO of Summit Materials
added, "Record annual net income and improved working capital
management resulted in record annual free cash flow of $245.6
million. We ended 2020 at 3.2x leverage, which is the lowest
year-end leverage ratio in Summit's history, combined with nearly
$750 million in available liquidity."
For the full year 2021, Summit is currently projecting Adjusted
EBITDA of approximately $490 million to $520 million.
The Company is announcing 2021 capital expenditure guidance of
$200 million to $220 million including approximately $25 million to
$35 million for greenfield projects.
Full-Year 2020 | Results by Line of Business
Aggregates Business: Aggregates net revenues were $498.0
million in 2020, compared to $469.7 million the prior year.
Aggregates adjusted cash gross profit margin decreased to 59.2% in
2020 compared to 60.2% on a combination of higher volumes, and
product mix. Aggregates sales volumes increased 9.5% in 2020, when
compared to the prior year period on higher organic volume growth,
particularly in Texas, Utah, and Kansas. Average selling prices for
aggregates decreased 2.0% in 2020 when compared to the prior year
period, which included some favorably priced levee repair work in
2019. On a mix-adjusted basis, Summit estimates that aggregates
prices increased by approximately 1.7% in 2020.
Cement Business: Cement segment net revenues decreased
6.9% to $270.6 million in 2020 when compared to the prior year
period. Cement adjusted cash gross profit margin decreased to
39.6%, compared to 40.3% in the prior year. Organic sales volume of
cement decreased 4.6% in 2020 when compared to the prior year.
Organic average selling prices on cement increased 1.5% in 2020
relative to 2019. In addition, our solid waste processing facility
continued to undergo repairs related to an explosion that occurred
in April 2020. The full year 2020 impact was approximately $14
million of foregone adjusted EBITDA.
Products Business: Products net revenues were $1,069.0
million in 2020, compared to $988.6 million in the prior year.
Products adjusted cash gross profit margin increased to 23.8%,
versus 22.1% in the prior year. Our organic average sales price for
ready-mix concrete increased 4.7%, coupled with a 5.0% increase in
organic sales volumes of ready-mix concrete, led by higher volumes
in Utah and Kansas. Our organic average sales price for asphalt
increased 1.4% while we had a 4.7% increase in asphalt organic
sales volumes, driven in part by volume growth in Texas, Kansas and
Virginia.
Fourth Quarter 2020 | Results by Line of Business
Aggregates Business: Aggregates net revenues increased by
$19.8 million to $135.5 million in the fourth quarter 2020 when
compared to the prior year period. Aggregates adjusted cash gross
profit margin decreased to 57.6% in the fourth quarter 2020 as
compared to 61.9% in the fourth quarter 2019 on differences in
product mix. Aggregates sales volumes increased 24.7% in the fourth
quarter 2020 when compared to the prior year period on higher
volumes in Texas, partially offset by lower volumes in Missouri and
Kansas. Average selling prices for aggregates decreased 6.2% in the
fourth quarter 2020, reflecting acquisition related volumes. On an
organic basis, average selling prices for aggregates decreased
3.6%. On a mix-adjusted basis, Summit estimates that aggregates
prices increased by approximately 1.7% in 2020.
Cement Business: Cement segment net revenues increased
3.3% to $72.2 million in the fourth quarter 2020, when compared to
the prior year period, on higher sales volume of cement. Cement
adjusted cash gross profit margin increased to 47.5% in the fourth
quarter, compared to 45.4% in the prior year period, as higher
volumes resulted in lower unit plant costs. In addition, our solid
waste processing facility continued to undergo repairs related to
an explosion that occurred in April 2020. The Adjusted EBITDA
impact from the down time at the facility was approximately $4.2
million in the fourth quarter 2020. Sales volume of cement
increased 4.5% in the fourth quarter and average selling prices
increased 2.8% when compared to the prior year period.
Products Business: Products net revenues were $286.0
million in the fourth quarter 2020, compared to $251.4 million in
the prior year period. Products adjusted cash gross profit margin
increased to 24.0% in the fourth quarter, versus 23.9% in the prior
year period. Our organic average sales price for ready-mix concrete
increased 3.2% and organic sales volumes of ready-mix concrete
increased 6.4%, as higher volumes in residential construction
markets were offset by flat to slightly lower volumes in other
parts of Texas (Permian) and Kentucky. Our organic average sales
price for asphalt increased 2.1%, while asphalt organic sales
volumes increased 20.3%, as lower volume in Kentucky was offset by
higher volumes in North Texas and Kansas.
Full-Year 2020 | Results By Reporting Segment
Net revenue increased by 5.1% to $2.1 billion in 2020, versus
$2.0 billion in 2019. The increase in consolidated net revenue
relative to 2019 was primarily attributable to a 12.2% increase in
West Segment net revenue, partially offset by a 0.1% decrease in
East Segment net revenue, combined with a 6.9% decrease in Cement
Segment net revenue. The Company reported operating income of
$225.2 million in 2020, compared to $213.6 million in the prior
year. Adjusted EBITDA was $485.0 million in 2020, an increase of
5.1% compared to $461.5 million in 2019.
West Segment: The West Segment reported operating income
of $176.5 million in 2020, compared to $109.2 million in 2019, due
to higher revenue from all lines of business. Adjusted EBITDA
increased to $271.1 million in 2020, an increase of 32.2% compared
to $205.0 million in 2019. Aggregates revenue in 2020 increased
15.9% over 2019, partly as a result of a 4.4% increase in organic
volumes, led by volume growth in Texas, and a 1.8% increase in
organic average selling prices. Ready-mix concrete revenue in 2020
increased 7.8% over 2019, reflecting improved weather conditions
relative to a year ago. Organic ready-mix concrete volumes
increased 3.0% while organic average sales prices increased 4.7%.
Asphalt revenue increased by 12.7% in 2020, as organic volumes
increased 10.3% and average sales prices increased 2.9% compared to
2019. The Company completed the acquisition of Multisources of
Houston, Texas and Valley Gravel of Abbotsford, British Columbia,
in 2020, both of which are primarily aggregates businesses.
East Segment: The East Segment reported operating income
of $69.8 million in 2020, compared to $101.8 million in 2019,
primarily due to decreased asphalt and paving activity in Kentucky.
Adjusted EBITDA decreased to $162.3 million in 2020, compared to
$187.6 million in 2019. Aggregates net revenue increased 1.3%,
primarily due to a 3.0% increase in organic volume despite a
decrease in organic average sales prices of 2.1%, as sales prices
decreased in Missouri relative to 2019, which included more higher
priced flood and levy volumes related to public repair work.
Organic ready-mix concrete revenue increased 16.4% due to a 11.2%
increase in volume and a 4.6% increase in price. Organic asphalt
revenue decreased 18.8%, reflecting a 7.9% decrease in volume,
combined with a 3.3% decrease in price, reflecting less activity in
Kentucky, partially offset by higher volume in Kansas and
Virginia.
Cement Segment: The Cement Segment reported operating
income of $55.3 million in 2020, compared to $64.7 million in 2019.
Adjusted EBITDA declined to $93.0 million in 2020, compared to
$103.4 million in 2019. Cement Segment revenue decreased 6.9%,
reflecting a 4.6% decrease in volume despite a 1.5% increase in
price. Cement segment operating income declined in part due to
lower sales volumes related to COVID-19, notably in our southern
markets. Additionally, our solid waste processing facility that
provides fuel for one of our plants remained closed to processing
solid waste due to an explosion in April 2020, which increased our
operating costs.
Fourth Quarter 2020 | Results By Reporting Segment
Net revenue increased by 13.0% to $571.9 million in the fourth
quarter 2020, versus $506.3 million in the prior year period on
higher volume in all lines of business. Aggregates reported average
selling prices declined 6.2% in the fourth quarter 2020 relative to
the prior year, but on a product mix adjusted basis, year to date
aggregates pricing has increased approximately 2.1%. The Company
reported operating income of $66.2 million in the fourth quarter
2020, compared to $59.9 million in the prior year period.
Net income decreased to $36.3 million in the fourth quarter of
2020, compared to income of $36.4 million in the prior year period.
Adjusted EBITDA increased 7.9% to $130.6 million in the fourth
quarter of 2020, compared to $121.1 million in the prior year
period on higher revenue.
West Segment: The West Segment reported operating income
of $47.2 million in the fourth quarter 2020, compared to $30.7
million in the prior year period. Adjusted EBITDA increased to
$74.2 million in the fourth quarter 2020, compared to $53.9 million
in the prior year period. Improvements in operating income
reflected increased demand for aggregates and ready-mix concrete in
Utah and Texas. Aggregates revenue in the fourth quarter increased
43.1% over the prior year period, while organic volumes and average
sales prices increased 15.9% and 2.3%, respectively. Ready-mix
concrete revenue in the fourth quarter 2020 increased 12.3% over
the prior year period, as organic volumes increased 8.8% and
organic average sales prices increased 3.3%, reflecting favorable
market conditions in Utah and Texas. Asphalt revenue increased by
38.9% in the fourth quarter 2020 over the prior year period.
Asphalt volumes increased 33.5%, reflecting higher demand in Texas
and Utah, and sales prices increased 4.0%.
East Segment: The East Segment reported operating income
of $20.8 million in the fourth quarter 2020, compared to $29.8
million in the prior year period as lower asphalt revenues due to
the ongoing fiscal constraints in Kentucky more than offset
strength in ready-mix concrete. Adjusted EBITDA decreased to $42.4
million in the fourth quarter 2020, compared to $53.1 million in
the prior year period. Aggregates revenue decreased 0.3%, as
average selling prices decreased 7.0% on a difference in product
mix from the year-ago quarter, which reflected significant flood
repair work. The decrease in revenue was partially offset by a 6.4%
increase in organic volumes on higher volumes in Kansas, Kentucky,
and Virginia. Ready-mix concrete revenue increased 2.7% as organic
average selling prices increased 2.7% due in part to wind farm work
in Kansas. Asphalt revenue decreased 12.1% as organic volumes
decreased 2.6% on a lower contribution from Kentucky, and organic
average selling prices decreased 3.9%.
Cement Segment: The Cement Segment reported operating
income of $20.8 million in the fourth quarter 2020, compared to
$20.6 million in the prior year period. The segment reported
organic sales volumes and organic average selling prices increased
4.5% and increased 2.8%, respectively, during the fourth quarter
2020 as compared to the prior year period. Adjusted EBITDA
increased to $29.8 million in the fourth quarter 2020, compared to
$27.9 million in the prior year period as volumes improved relative
to the prior year, resulting in lower unit plant costs. In
addition, our solid waste processing facility continued to undergo
repairs related to an explosion that occurred in April 2020. The
Adjusted EBITDA impact from the down time at the facility was
approximately $4.0 million in the quarter.
Liquidity and Capital Resources
As of January 2, 2021, the Company had cash on hand of $418.2
million and borrowing capacity under its $345 million revolving
credit facility of $329 million. The borrowing capacity on the
revolving credit facility is currently fully available to the
Company within the terms and covenant requirements of its credit
agreement. As of January 2, 2021, the Company had $1.9 billion in
debt outstanding.
Financial Outlook
For the full year 2021, Summit is currently projecting Adjusted
EBITDA of approximately $490 million to $520 million.
The Company is announcing 2021 capital expenditure guidance of
$200 million to $220 million including approximately $25 million to
$35 million for greenfield projects.
Webcast and Conference Call Information
Summit Materials will conduct a conference call on Wednesday,
February 24, 2021, at 11:00 a.m. eastern time (9:00 a.m. mountain
time) to review the Company’s fourth quarter and full year 2020
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.
To participate in the live teleconference on February 24, 2021:
Domestic Live: 1-877-823-8690 International Live: 1-825-312-2236
Conference ID: 1994474 Password: Summit
To listen to a replay of the teleconference, which will be
available through March 3, 2021: Domestic Replay: 1-800-585-8367
International Replay: 1-416-621-4642 Conference ID: 1994474
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 December 28, 2019 and Quarterly Report on
Form 10-Q for the fiscal period ended March 28, 2020, each 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, 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 commodities, labor and other production and
delivery inputs 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;
- 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
Consolidated Statements of
Operations
($ in thousands, except share and
per share amounts)
Three months ended
Year ended
January 2,
December 28,
January 2,
December 28,
2021
2019
2021
2019
Revenue:
Product
$
490,208
$
430,463
$
1,824,679
$
1,724,462
Service
81,654
75,796
310,075
306,185
Net revenue
571,862
506,259
2,134,754
2,030,647
Delivery and subcontract revenue
52,771
50,269
197,697
191,493
Total revenue
624,633
556,528
2,332,451
2,222,140
Cost of revenue (excluding items shown
separately below):
Product
308,354
269,960
1,166,266
1,116,662
Service
57,554
50,627
220,033
218,177
Net cost of revenue
365,908
320,587
1,386,299
1,334,839
Delivery and subcontract cost
52,771
50,269
197,697
191,493
Total cost of revenue
418,679
370,856
1,583,996
1,526,332
General and administrative expenses
84,000
75,420
309,531
275,813
Depreciation, depletion, amortization and
accretion
57,560
52,962
221,320
217,102
Gain on sale of property, plant and
equipment
(1,822)
(2,636)
(7,569)
(10,665)
Operating income
66,216
59,926
225,173
213,558
Interest expense
25,546
28,086
103,595
116,509
Loss on debt financings
—
—
4,064
14,565
Tax receivable agreement (benefit)
expense
(7,559)
16,237
(7,559)
16,237
Other income, net
(1,229)
(3,623)
(3,982)
(11,977)
Income from operations before taxes
49,458
19,226
129,055
78,224
Income tax expense (benefit)
13,148
(17,171)
(12,185)
17,101
Net income
36,310
36,397
141,240
61,123
Net income attributable to Summit Holdings
(1)
1,158
726
3,273
2,057
Net income attributable to Summit Inc.
$
35,152
$
35,671
$
137,967
$
59,066
Earnings per share of Class A common
stock:
Basic
$
0.31
$
0.32
$
1.21
$
0.53
Diluted
$
0.31
$
0.31
$
1.20
$
0.52
Weighted average shares of Class A common
stock:
Basic
114,613,695
112,755,444
114,227,192
112,204,067
Diluted
115,146,597
114,036,924
114,631,768
112,684,718
________________________________________________________
(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)
January 2,
December 28,
2021
2019
Assets
Current assets:
Cash and cash equivalents
$
418,181
$
311,319
Accounts receivable, net
254,696
253,256
Costs and estimated earnings in excess of
billings
8,666
13,088
Inventories
200,308
204,787
Other current assets
11,428
13,831
Total current assets
893,279
796,281
Property, plant and equipment
1,850,169
1,747,449
Goodwill
1,201,291
1,199,699
Intangible assets
47,852
23,498
Deferred tax assets
231,877
212,333
Operating lease right-of-use assets
28,543
32,777
Other assets
55,000
55,519
Total assets
$
4,308,011
$
4,067,556
Liabilities and Stockholders’
Equity
Current liabilities:
Current portion of debt
$
6,354
$
7,942
Current portion of acquisition-related
liabilities
10,265
32,700
Accounts payable
120,813
116,359
Accrued expenses
160,570
120,005
Current operating lease liabilities
8,188
8,427
Billings in excess of costs and estimated
earnings
16,499
13,864
Total current liabilities
322,689
299,297
Long-term debt
1,892,347
1,851,057
Acquisition-related liabilities
12,246
19,801
Tax receivable agreement liability
321,680
326,965
Noncurrent operating lease liabilities
21,500
25,381
Other noncurrent liabilities
121,281
100,282
Total liabilities
2,691,743
2,622,783
Stockholders’ equity:
Class A common stock, par value $0.01 per
share; 1,000,000,000 shares authorized, 114,390,595 and 113,309,385
shares issued and outstanding as of January 2, 2021 and December
28, 2019, respectively
1,145
1,134
Class B common stock, par value $0.01 per
share; 250,000,000 shares authorized, 99 shares issued and
outstanding as of January 2, 2021 and December 28, 2019
—
—
Additional paid-in capital
1,264,681
1,234,020
Accumulated earnings
326,772
188,805
Accumulated other comprehensive income
5,203
3,448
Stockholders’ equity
1,597,801
1,427,407
Noncontrolling interest in Summit
Holdings
18,467
17,366
Total stockholders’ equity
1,616,268
1,444,773
Total liabilities and stockholders’
equity
$
4,308,011
$
4,067,556
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Consolidated Statements of Cash
Flows
($ in thousands)
Year ended
January 2,
December 28,
2021
2019
Cash flow from operating activities:
Net income
$
141,240
$
61,123
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation, depletion, amortization and
accretion
227,817
222,862
Share-based compensation expense
28,857
20,403
Net gain on asset disposals
(7,548)
(10,294)
Non-cash loss on debt financings
4,064
2,850
Change in deferred tax asset, net
(18,384)
16,012
Other
619
(2,135)
Decrease (increase) in operating assets,
net of acquisitions and dispositions:
Accounts receivable, net
5,467
(37,049)
Inventories
3,339
8,582
Costs and estimated earnings in excess of
billings
4,535
5,558
Other current assets
472
5,465
Other assets
10,264
5,085
(Decrease) increase in operating
liabilities, net of acquisitions and dispositions:
Accounts payable
(4,231)
18,903
Accrued expenses
15,476
7,640
Billings in excess of costs and estimated
earnings
2,616
1,988
Tax receivable agreement liability
(5,285)
17,291
Other liabilities
(449)
(7,100)
Net cash provided by operating
activities
408,869
337,184
Cash flow from investing activities:
Acquisitions, net of cash acquired
(123,477)
(5,392)
Purchases of property, plant and
equipment
(177,249)
(177,495)
Proceeds from the sale of property, plant
and equipment
14,018
21,173
Other
1,121
(1,095)
Net cash used in investing activities
(285,587)
(162,809)
Cash flow from financing activities:
Proceeds from debt issuances
700,000
300,000
Debt issuance costs
(9,605)
(6,312)
Payments on debt
(674,045)
(270,229)
Payments on acquisition-related
liabilities
(33,257)
(33,883)
Proceeds from stock option exercises
1,043
19,076
Other
(907)
(502)
Net cash (used in) provided by financing
activities
(16,771)
8,150
Impact of foreign currency on cash
351
286
Net increase in cash
106,862
182,811
Cash and cash equivalents—beginning of
period
311,319
128,508
Cash and cash equivalents—end of
period
$
418,181
$
311,319
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Revenue Data by Segment
and Line of Business
($ in thousands)
Three months ended
Year ended
January 2,
December 28,
January 2,
December 28,
2021
2019
2021
2019
Segment Net Revenue:
West
$
312,895
$
249,694
$
1,147,921
$
1,022,730
East
186,806
186,705
716,211
717,213
Cement
72,161
69,860
270,622
290,704
Net Revenue
$
571,862
$
506,259
$
2,134,754
$
2,030,647
Line of Business - Net Revenue:
Materials
Aggregates
$
135,461
$
115,620
$
498,007
$
469,670
Cement (1)
68,775
63,455
257,629
266,235
Products
285,972
251,388
1,069,043
988,557
Total Materials and Products
490,208
430,463
1,824,679
1,724,462
Services
81,654
75,796
310,075
306,185
Net Revenue
$
571,862
$
506,259
$
2,134,754
$
2,030,647
Line of Business - Net Cost of
Revenue:
Materials
Aggregates
$
57,378
$
44,026
$
203,393
$
186,724
Cement
34,532
31,726
150,519
149,149
Products
217,474
191,247
814,146
770,533
Total Materials and Products
309,384
266,999
1,168,058
1,106,406
Services
56,524
53,588
218,241
228,433
Net Cost of Revenue
$
365,908
$
320,587
$
1,386,299
$
1,334,839
Line of Business - Adjusted Cash Gross
Profit (2):
Materials
Aggregates
$
78,083
$
71,594
$
294,614
$
282,946
Cement (3)
34,243
31,729
107,110
117,086
Products
68,498
60,141
254,897
218,024
Total Materials and Products
180,824
163,464
656,621
618,056
Services
25,130
22,208
91,834
77,752
Adjusted Cash Gross Profit
$
205,954
$
185,672
$
748,455
$
695,808
Adjusted Cash Gross Profit Margin (2)
Materials
Aggregates
57.6
%
61.9
%
59.2
%
60.2
%
Cement (3)
47.5
%
45.4
%
39.6
%
40.3
%
Products
24.0
%
23.9
%
23.8
%
22.1
%
Services
30.8
%
29.3
%
29.6
%
25.4
%
Total Adjusted Cash Gross Profit
Margin
36.0
%
36.7
%
35.1
%
34.3
%
________________________________________________________
(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
Year ended
Total Volume
January 2, 2021
December 28, 2019
January 2, 2021
December 28, 2019
Aggregates (tons)
16,622
13,325
59,098
53,954
Cement (tons)
600
574
2,286
2,395
Ready-mix concrete (cubic yards)
1,523
1,431
5,740
5,466
Asphalt (tons)
1,550
1,288
5,831
5,568
Three months ended
Year ended
Pricing
January 2, 2021
December 28, 2019
January 2, 2021
December 28, 2019
Aggregates (per ton)
$
10.27
$
10.95
$
10.77
$
10.99
Cement (per ton)
118.44
115.27
116.80
115.03
Ready-mix concrete (per cubic yards)
117.86
114.21
116.47
111.27
Asphalt (per ton)
59.95
58.73
59.76
58.93
Three months ended
Year ended
Percentage Change in
Percentage Change in
Year over Year Comparison
Volume
Pricing
Volume
Pricing
Aggregates (per ton)
24.7
%
(6.2)
%
9.5
%
(2.0)
%
Cement (per ton)
4.5
%
2.8
%
(4.6)
%
1.5
%
Ready-mix concrete (per cubic yards)
6.4
%
3.2
%
5.0
%
4.7
%
Asphalt (per ton)
20.3
%
2.1
%
4.7
%
1.4
%
Three months ended
Year ended
Percentage Change in
Percentage Change in
Year over Year Comparison (Excluding
acquisitions)
Volume
Pricing
Volume
Pricing
Aggregates (per ton)
10.7
%
(3.6)
%
3.6
%
(0.5)
%
Cement (per ton)
4.5
%
2.8
%
(4.6)
%
1.5
%
Ready-mix concrete (per cubic yards)
6.4
%
3.2
%
5.0
%
4.7
%
Asphalt (per ton)
20.3
%
2.1
%
4.7
%
1.4
%
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Reconciliations of
Gross Revenue to Net Revenue by Line of Business
($ and Units in thousands, except
pricing information)
Three months ended January 2,
2021
Gross Revenue
Intercompany
Net
Volumes
Pricing
by Product
Elimination/Delivery
Revenue
Aggregates
16,622
$
10.27
$
170,756
$
(35,295)
$
135,461
Cement
600
118.44
71,017
(2,242)
68,775
Materials
$
241,773
$
(37,537)
$
204,236
Ready-mix concrete
1,523
117.86
179,454
(104)
179,350
Asphalt
1,550
59.95
92,898
(72)
92,826
Other Products
97,265
(83,469)
13,796
Products
$
369,617
$
(83,645)
$
285,972
Year ended January 2,
2021
Gross Revenue
Intercompany
Net
Volumes
Pricing
by Product
Elimination/Delivery
Revenue
Aggregates
59,098
$
10.77
$
636,254
$
(138,247)
$
498,007
Cement
2,286
116.80
266,989
(9,360)
257,629
Materials
$
903,243
$
(147,607)
$
755,636
Ready-mix concrete
5,740
116.47
668,488
(428)
668,060
Asphalt
5,831
59.76
348,433
(706)
347,727
Other Products
372,830
(319,574)
53,256
Products
$
1,389,751
$
(320,708)
$
1,069,043
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 months and
years ended January 2, 2021 and December 28, 2019.
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Three months ended January 2,
2021
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
48,051
$
22,629
$
25,052
$
(59,422)
$
36,310
Interest (income) expense
(2,968)
(1,505)
(4,110)
34,129
25,546
Income tax expense
2,763
75
—
10,310
13,148
Depreciation, depletion and
amortization
26,572
20,424
8,752
1,022
56,770
EBITDA
$
74,418
$
41,623
$
29,694
$
(13,961)
$
131,774
Accretion
212
488
90
—
790
Tax receivable agreement benefit
—
—
—
(7,559)
(7,559)
Transaction costs
—
—
—
1,230
1,230
Non-cash compensation
—
—
—
5,738
5,738
Other
(459)
264
—
(1,135)
(1,330)
Adjusted EBITDA
$
74,171
$
42,375
$
29,784
$
(15,687)
$
130,643
Adjusted EBITDA Margin (1)
23.7
%
22.7
%
41.3
%
22.8
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Three months ended December
28, 2019
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
30,735
$
32,859
$
23,828
$
(51,025)
$
36,397
Interest (income) expense
(171)
(463)
(3,094)
31,814
28,086
Income tax expense (benefit)
440
(411)
—
(17,200)
(17,171)
Depreciation, depletion and
amortization
22,986
21,411
7,061
1,011
52,469
EBITDA
$
53,990
$
53,396
$
27,795
$
(35,400)
$
99,781
Accretion
114
273
106
—
493
Tax receivable agreement expense
—
—
—
16,237
16,237
Transaction costs
84
—
—
689
773
Non-cash compensation
—
—
—
4,979
4,979
Other
(278)
(523)
—
(371)
(1,172)
Adjusted EBITDA
$
53,910
$
53,146
$
27,901
$
(13,866)
$
121,091
Adjusted EBITDA Margin (1)
21.6
%
28.5
%
39.9
%
23.9
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Year ended January 2,
2021
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
178,460
$
74,781
$
69,484
$
(181,485)
$
141,240
Interest (income) expense
(5,447)
(3,156)
(13,795)
125,993
103,595
Income tax expense (benefit)
4,287
(283)
—
(16,189)
(12,185)
Depreciation, depletion and
amortization
93,279
84,504
36,917
3,982
218,682
EBITDA
$
270,579
$
155,846
$
92,606
$
(67,699)
$
451,332
Accretion
587
1,701
350
—
2,638
Loss on debt financings
—
—
—
4,064
4,064
Tax receivable agreement benefit
—
—
—
(7,559)
(7,559)
Transaction costs
—
—
—
2,747
2,747
Non-cash compensation
—
—
—
28,857
28,857
Other
(114)
4,728
—
(1,657)
2,957
Adjusted EBITDA
$
271,052
$
162,275
$
92,956
$
(41,247)
$
485,036
Adjusted EBITDA Margin (1)
23.6
%
22.7
%
34.3
%
22.7
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Year ended December 28,
2019
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
108,751
$
106,307
$
75,480
$
(229,415)
$
61,123
Interest expense (income)
1,734
1,774
(10,489)
123,490
116,509
Income tax expense (benefit)
1,918
(267)
—
15,450
17,101
Depreciation, depletion and
amortization
92,737
80,262
37,891
3,996
214,886
EBITDA
$
205,140
$
188,076
$
102,882
$
(86,479)
$
409,619
Accretion
519
1,141
556
—
2,216
Loss on debt financings
—
—
—
14,565
14,565
Tax receivable agreement expense
—
—
—
16,237
16,237
Transaction costs
96
—
—
2,126
2,222
Non-cash compensation
—
—
—
20,403
20,403
Other
(791)
(1,592)
—
(1,417)
(3,800)
Adjusted EBITDA
$
204,964
$
187,625
$
103,438
$
(34,565)
$
461,462
Adjusted EBITDA Margin (1)
20.0
%
26.2
%
35.6
%
22.7
%
________________________________________________
(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 months and years ended January 2, 2021 and December 28, 2019.
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
Year ended
January 2, 2021
December 28, 2019
January 2, 2021
December 28, 2019
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.
$
35,152
$
0.30
$
35,671
$
0.31
$
137,967
$
1.18
$
59,066
$
0.51
Adjustments:
Net income attributable to noncontrolling
interest
1,158
0.01
726
0.01
3,273
0.03
2,057
0.02
Adjustment to acquisition deferred
liability
—
—
—
—
—
—
(2,000)
(0.02)
Loss on debt financings
—
—
—
—
4,064
0.03
14,565
0.13
Adjusted diluted net income before tax
related adjustments
36,310
0.31
36,397
0.32
145,304
1.24
73,688
0.64
Tax receivable agreement (benefit)
expense
(7,559)
(0.06)
16,237
0.14
(7,559)
(0.06)
16,237
0.14
Changes in unrecognized tax expense
(benefit)
—
—
18,885
0.16
(42,422)
(0.37)
18,885
0.16
Adjusted diluted net income
$
28,751
$
0.25
$
71,519
$
0.62
$
95,323
$
0.81
$
108,810
$
0.94
Weighted-average shares:
Basic Class A common stock
114,213,808
112,755,444
114,014,749
112,204,067
LP Units outstanding
2,986,226
3,278,133
3,060,248
3,372,707
Total equity units
117,200,034
116,033,577
117,074,997
115,576,774
The following table reconciles operating income to Adjusted Cash
Gross Profit and Adjusted Cash Gross Profit Margin for the three
months and years ended January 2, 2021 and December 28, 2019.
Three months ended
Year ended
January 2,
December 28,
January 2,
December 28,
Reconciliation of Operating Income to
Adjusted Cash Gross Profit
2021
2019
2021
2019
($ in thousands)
Operating income
$
66,216
$
59,926
$
225,173
$
213,558
General and administrative expenses
84,000
75,420
309,531
275,813
Depreciation, depletion, amortization and
accretion
57,560
52,962
221,320
217,102
Gain on sale of property, plant and
equipment
(1,822)
(2,636)
(7,569)
(10,665)
Adjusted Cash Gross Profit (exclusive of
items shown separately)
$
205,954
$
185,672
$
748,455
$
695,808
Adjusted Cash Gross Profit Margin
(exclusive of items shown separately) (1)
36.0
%
36.7
%
35.1
%
34.3
%
_______________________________________________________
(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 months and years ended
January 2, 2021 and December 28, 2019.
Three months ended
Year ended
January 2,
December 28,
January 2,
December 28,
($ in thousands)
2021
2019
2021
2019
Net income
$
36,310
$
36,397
$
141,240
$
61,123
Non-cash items
77,799
41,330
235,425
249,698
Net income adjusted for non-cash items
114,109
77,727
376,665
310,821
Change in working capital accounts
76,721
95,614
32,204
26,363
Net cash provided by operating
activities
190,830
173,341
408,869
337,184
Capital expenditures, net of asset
sales
(32,073)
(29,595)
(163,231)
(156,322)
Free cash flow
$
158,757
$
143,746
$
245,638
$
180,862
The table below reconciles our Adjusted EBITDA to Further
Adjusted EBITDA and our calculation of Net Debt to arrive at our
Net Leverage Ratio for the years ended January 2, 2021 and December
28, 2019.
Year ended
January 2,
December 28,
($ in thousands)
2021
2019
Adjusted EBITDA
$
485,036
$
461,462
EBITDA for certain acquisitions (1)
11,448
—
Further Adjusted EBITDA (2)
$
496,484
$
461,462
Long-term debt, including current
portion
$
1,916,314
$
1,874,255
Acquisition related liabilities
20,073
47,866
Finance leases and other
56,328
56,417
Less: Cash and cash equivalents
(418,181)
(311,319)
Net Debt
$
1,574,534
$
1,667,219
Net Leverage Ratio (3)
3.2
x
3.6
x
_______________________________________________________
(1) Under the terms of our credit facilities, we include EBITDA
from our acquisitions, net of dispositions, in each fiscal year for
periods prior to acquisition.
(2) Further Adjusted EBITDA is defined as Adjusted EBITDA plus
the EBITDA contribution for certain recent acquisitions.
(3) Net Leverage Ratio is defined as Net Debt divided by Further
Adjusted EBITDA.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210223006066/en/
Karli Anderson Vice President, Investor Relations
karli.anderson@summit-materials.com 303-515-5152
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