- Record Second Quarter Net Revenue of $618.5
million, an increase of 7.5%
-Net income attributable to Summit Inc. of
$56.7 million
-Record Second Quarter Adjusted EBITDA of
$163.8 million, an increase of 2.4%
-Aggregates volumes increased 14.7%
-Cement volumes increased 8.3%
Summit Materials, Inc. (NYSE: SUM, “Summit,” “Summit Materials,”
"Summit Inc." or the “Company”), a leading vertically integrated
construction materials company, today announced results for the
second quarter 2021.
For the three months ended July 3, 2021, the Company reported
net income attributable to Summit Inc. of $56.7 million, or $0.48
per basic share, compared to net income attributable to Summit Inc.
of $57.1 million, or $0.50 per basic share in the comparable prior
year period. Summit reported adjusted diluted net income of $58.0
million, or $0.49 per adjusted diluted share as compared to
adjusted diluted net income of $58.9 million, or $0.50 per adjusted
diluted share in the prior year period.
Summit's net revenue increased $43.3 million, or 7.5% in the
second quarter of 2021 to $618.5 million, compared to $575.2
million in the second quarter of 2020, on higher aggregates,
ready-mix concrete and cement revenue relative to a year ago on
continued favorable market demand conditions and price growth in
all lines of business.
The Company reported operating income of $95.9 million in the
second quarter 2021, a decrease of 4.1%, compared to $100.1 million
in the prior year period. Higher aggregates, cement and ready-mix
volume and prices across the business were offset by increases in
cost of revenue and general and administrative expenses associated
with implementation of our Elevate Summit strategy, combined with
fewer working days in Texas due to unusually wet conditions in May.
Summit's operating margin percentage for the three months ended
July 3, 2021 decreased to 15.5% from 17.4%, from the comparable
period a year ago, due to the factors noted above.
Adjusted EBITDA increased in the second quarter 2021 to $163.8
million as compared to $159.9 million in the second quarter
2020.
For the three months ended July 3, 2021, sales volumes increased
14.7% in aggregates, 8.3% in cement and 6.3% in ready-mix concrete
relative to the same period last year on strong demand in most of
our markets. Average selling prices in the second quarter of 2021
increased 2.4% in aggregates, 2.9% in cement, 3.0% in ready-mix
concrete and 0.7% in asphalt. Adjusted cash gross profit for
aggregates expanded to $85.8 million in the second quarter 2021, an
increase of 14.3% relative to $75.0 million in the year ago
quarter.
Anne Noonan, CEO of Summit Materials, commented, "Today we are
reporting Summit's third consecutive quarter of record Adjusted
EBITDA. These results reflect our team's commitment to operational
and commercial excellence, which delivered volume growth in most
lines of business and pricing growth in all lines of business.
Demand fundamentals remain strong in our rural and exurban markets,
while most of the state Departments of Transportation that we serve
have returned to typical letting and operating conditions.
As part of our Elevate Summit strategy, we have now completed a
total of five strategic divestitures, as we exit non-core or
non-leading market positions, unlock proceeds for more strategic
use, and convert some of those businesses to an asset light model
to drive higher aggregates pull through. We believe Summit's
organic growth profile and asset light conversion model position
the company to absorb the impact of the foregone contribution from
those five divested businesses, so we are leaving our full year
Adjusted EBITDA guidance unchanged at this time."
As of July 3, 2021, the Company had $469.1 million in cash and
$1.9 billion in debt outstanding. The Company's $345 million
revolving credit facility has $329.1 million available after
outstanding letters of credit. For the quarter ended July 3, 2021,
cash flow provided by operations was $74.7 million and cash paid
for capital expenditures was $132.7 million.
Brian Harris, CFO of Summit Materials, added, "We are making
meaningful progress on the leverage reduction element of our
Elevate Summit strategy. Our Elevate Summit goal is less than 3.0x
leverage, and we continue to believe that is within our sights in
2021."
For the full year 2021, Summit has not made any changes to its
outlook for Adjusted EBITDA of approximately $490 million to $520
million, but may revisit this forecast as the year progresses. The
Company continues to expect 2021 capital expenditure guidance of
approximately $200 million to $220 million including approximately
$25 million to $35 million for greenfield projects.
Second Quarter 2021 | Results by Line of Business
Aggregates Business: Aggregates net revenues increased by
$23.5 million to $153.5 million in the second quarter 2021 when
compared to the prior year period. Aggregates adjusted cash gross
profit margin decreased to 55.9% in the second quarter 2021 as
compared to 57.7% in the second quarter 2020. Aggregates sales
volumes increased 14.7% in the second quarter 2021 when compared to
the prior year period on organic growth in both the West and East
segments. Volume increased in the Intermountain West, Virginia,
Carolinas, Georgia, and British Columbia markets, partially offset
by slight decreases in Kansas and Missouri as wind farm and flood
repair volumes in the second quarter of 2020 did not repeat in
2021. Average selling prices for aggregates increased 2.4% in the
second quarter 2021.
Cement Business: Cement segment net revenues increased
13.4% to $85.8 million in the second quarter 2021, when compared to
the prior year period, on higher sales volume of cement. Cement
adjusted cash gross profit margin decreased to 47.2% in the second
quarter, compared to 50.8% in the prior year period. Our Green
America Recycling facility continues to ramp up production
following an explosion that occurred in April 2020. Sales volume of
cement increased 8.3% in the second quarter and average selling
prices increased 2.9% when compared to the prior year period.
Products Business: Products net revenues were $292.1
million in the second quarter 2021, compared to $285.0 million in
the prior year period. Products adjusted cash gross profit margin
decreased to 18.8% in the second quarter, versus 20.6% in the prior
year period. Our organic average sales price for ready-mix concrete
increased 3.0% and organic sales volumes of ready-mix concrete
increased 6.3%, as volume increased in our Intermountain West,
Texas, and British Columbia markets, and prices increased in most
markets. Our organic average sales price for asphalt increased
0.7%, with pricing gains across our Texas geographies and British
Columbia, while volume decreased 11.3%, due to a divestiture of a
paving business.
Second Quarter 2021 | Results By Reporting Segment
Net revenue increased by 7.5% to $618.5 million in the second
quarter 2021, versus $575.2 million in the prior year period on
organic growth in our aggregates, cement, and ready-mix concrete
operations. The Company reported operating income of $95.9 million
in the second quarter 2021, compared to $100.1 million in the prior
year period as favorable volume and price trends in most lines of
business were partially offset by fewer working days in Texas due
to unusually wet conditions in May.
Net income decreased to $57.8 million in the second quarter of
2021, compared to income of $58.9 million in the prior year period.
Adjusted EBITDA increased 2.4% to $163.8 million in the second
quarter of 2021, compared to $159.9 million in the prior year
period on higher revenue.
West Segment: The West Segment reported operating income
of $53.2 million in the second quarter 2021, compared to $56.7
million in the prior year period. Adjusted EBITDA was $78.8 million
in the second quarter 2021, compared to $78.9 million in the prior
year period, as higher volume and price for aggregates and
ready-mix concrete were offset by fewer working days in Texas,
which negatively impacted asphalt and paving volumes in particular.
Market conditions continue to reflect strong demand for aggregates
and ready-mix concrete, particularly in the Houston and Salt Lake
City areas. Aggregates revenue in the second quarter increased
32.7% over the prior year period, while organic volumes and average
sales prices increased 4.8% and 5.0%, respectively. Ready-mix
concrete revenue in the second quarter 2021 increased 15.5% over
the prior year period, as organic volumes increased 13.2% and
organic average sales prices increased 2.2%, reflecting favorable
market conditions for residential construction. Asphalt revenue
decreased by 26.8% in the second quarter 2021 over the prior year
period as asphalt volumes decreased 25.8%, due to wet conditions in
Texas cited above, and sales prices increased 1.7%.
East Segment: The East Segment reported operating income
of $34.6 million in the second quarter 2021, compared to $31.5
million in the prior year period as net revenue increases in
aggregates, asphalt and paving and related services exceeded a
decrease in ready-mix concrete. Adjusted EBITDA increased to $57.3
million in the second quarter 2021, compared to $53.4 million in
the prior year period. Aggregates revenue increased 7.4%, as
volumes increased 3.4% and average selling prices increased 3.8%.
Ready-mix concrete revenue decreased 6.7% as organic volumes
decreased by 11.4%, partially offset by organic average selling
prices which increased 5.3%, primarily due to lower volumes in
Kansas as wind farm projects in 2020 were not fully replaced in
2021. Asphalt revenue increased 35.8% as organic volumes increased
27.3% on higher volumes in Kentucky, Kansas and Virginia, while
organic average selling prices increased 0.6% on lower liquid
asphalt index prices in most of our markets.
Cement Segment: The Cement Segment reported operating
income of $25.8 million in the second quarter 2021, compared to
$26.1 million in the prior year period. Adjusted EBITDA increased
to $39.4 million in the second quarter 2021, compared to $35.6
million in the prior year period on higher volumes. The segment
reported increased organic sales volumes and organic average
selling prices of 8.3% and 2.9%, respectively, during the second
quarter 2021 as compared to the prior year period. Our Green
America Recycling facility continues to ramp up production
following an explosion that occurred in April 2020.
Liquidity and Capital Resources
As of July 3, 2021, the Company had cash on hand of $469.1
million and borrowing capacity under its $345 million revolving
credit facility of $329.1 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 July 3, 2021, the Company had $1.9 billion in debt
outstanding.
Financial Outlook
For the full year 2021, Summit has not made any changes to its
outlook for Adjusted EBITDA of approximately $490 million to $520
million, but may revisit this forecast as the year progresses. The
Company continues to expect 2021 capital expenditure guidance of
approximately $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 Thursday,
August 5, 2021, at 11:00 a.m. eastern time (9:00 a.m. mountain
time) to review the Company’s second quarter 2021 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 August 5, 2021:
Domestic Live: 1-877-823-8690 International Live: 1-825-312-2236
Conference ID: 3865846 Password: Summit
To listen to a replay of the teleconference, which will be
available through August 12, 2021:
Domestic Replay: 1-800-585-8367 International Replay:
1-416-621-4642 Conference ID: 3865846
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,” “outlook,”
“seeks,” “intends,” “trends,” “plans,” “estimates,” “projects” or
“anticipates” or similar expressions that concern our strategy,
plans, expectations or intentions. All statements made relating to
our estimated and projected earnings, margins, costs, expenditures,
cash flows, growth rates and financial results are forward-looking
statements. These forward-looking statements are subject to risks,
uncertainties and other factors that may cause our actual results,
performance or achievements to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. We derive many of our forward-looking
statements from our operating budgets and forecasts, which are
based upon many detailed assumptions. While we believe that our
assumptions are reasonable, it is very difficult to predict the
effect of known factors, and, of course, it is impossible to
anticipate all factors that could affect our actual results. In
light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by us or any
other person that the results or conditions described in such
statements or our objectives and plans will be realized. Important
factors could affect our results and could cause results to differ
materially from those expressed in our forward-looking statements,
including but not limited to the factors discussed in the section
entitled “Risk Factors” in Summit Inc.’s Annual Report on Form 10-K
for the fiscal year ended January 2, 2021, 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 ability to implement and successfully execute on our
Elevate Summit Strategy;
- 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 particularly if
such are not augmented by federal funding or if the federal
government fails to act on highway infrastructure bill;
- 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 other
regulations;
- unexpected operational difficulties;
- interruptions in our information technology systems and
infrastructure; including cybersecurity and data leakage risks;
and
- potential labor disputes, strikes, other forms of work stoppage
or other union activities.
All subsequent written and oral forward-looking statements
attributable to us, or persons acting on our behalf, are expressly
qualified in their entirety by these cautionary
statements. Any forward-looking statement that we make herein
speaks only as of the date of this press release. We undertake no
obligation to publicly update or revise any forward-looking
statement as a result of new information, future events or
otherwise, except as required by law.
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Consolidated Statements
of Operations
($ in thousands, except share and
per share amounts)
Three months ended
Six months ended
July 3,
June 27,
July 3,
June 27,
2021
2020
2021
2020
Revenue:
Product
$
527,800
$
488,260
$
882,034
$
793,567
Service
90,730
86,980
134,977
124,079
Net revenue
618,530
575,240
1,017,011
917,646
Delivery and subcontract revenue
49,387
55,769
78,750
80,553
Total revenue
667,917
631,009
1,095,761
998,199
Cost of revenue (excluding items shown
separately below):
Product
346,697
315,079
623,831
569,134
Service
71,632
68,660
111,829
107,184
Net cost of revenue
418,329
383,739
735,660
676,318
Delivery and subcontract cost
49,387
55,769
78,750
80,553
Total cost of revenue
467,716
439,508
814,410
756,871
General and administrative expenses
47,448
39,727
99,090
81,413
Depreciation, depletion, amortization and
accretion
58,233
53,928
114,569
105,706
Gain on sale of property, plant and
equipment
(1,403
)
(2,214
)
(3,172
)
(4,131
)
Operating income
95,923
100,060
70,864
58,340
Interest expense
24,216
25,608
48,402
53,426
Loss (gain) on sale of businesses
236
—
(15,432
)
—
Other income, net
(4,695
)
(1,616
)
(9,584
)
(1,527
)
Income from operations before taxes
76,166
76,068
47,478
6,441
Income tax expense (benefit)
18,408
17,181
12,965
(5,720
)
Net income
57,758
58,887
34,513
12,161
Net income attributable to Summit Holdings
(1)
1,099
1,823
371
76
Net income attributable to Summit Inc.
$
56,659
$
57,064
$
34,142
$
12,085
Earnings per share of Class A common
stock:
Basic
$
0.48
$
0.50
$
0.29
$
0.11
Diluted
$
0.48
$
0.50
$
0.29
$
0.11
Weighted average shares of Class A common
stock:
Basic
117,637,036
114,111,204
116,650,881
113,856,657
Diluted
118,585,398
114,137,857
117,832,026
114,252,268
(1) Represents portion of business owned by pre-IPO investors
rather than by Summit.
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Consolidated Balance Sheets
($ in thousands, except share and
per share amounts)
July 3,
January 2,
2021
2021
(unaudited)
(audited)
Assets
Current assets:
Cash and cash equivalents
$
469,097
$
418,181
Accounts receivable, net
316,615
254,696
Costs and estimated earnings in excess of
billings
28,717
8,666
Inventories
198,217
200,308
Other current assets
15,271
11,428
Total current assets
1,027,917
893,279
Property, plant and equipment, less
accumulated depreciation, depletion and amortization (July 3, 2021
- $1,184,841 and January 2, 2021 - $1,132,925)
1,865,841
1,850,169
Goodwill
1,176,351
1,201,291
Intangible assets, less accumulated
amortization (July 3, 2021 - $13,366 and January 2, 2021 -
$11,864)
71,409
47,852
Deferred tax assets, less valuation
allowance (July 3, 2021 - $1,675 and January 2, 2021 - $1,675)
226,722
231,877
Operating lease right-of-use assets
28,164
28,543
Other assets
55,981
55,000
Total assets
$
4,452,385
$
4,308,011
Liabilities and Stockholders’
Equity
Current liabilities:
Current portion of debt
$
6,354
$
6,354
Current portion of acquisition-related
liabilities
13,519
10,265
Accounts payable
152,285
120,813
Accrued expenses
150,154
160,570
Current operating lease liabilities
7,019
8,188
Billings in excess of costs and estimated
earnings
12,524
16,499
Total current liabilities
341,855
322,689
Long-term debt
1,890,697
1,892,347
Acquisition-related liabilities
32,815
12,246
Tax receivable agreement liability
328,812
321,680
Noncurrent operating lease liabilities
22,316
21,500
Other noncurrent liabilities
140,968
121,281
Total liabilities
2,757,463
2,691,743
Stockholders’ equity:
Class A common stock, par value $0.01 per
share; 1,000,000,000 shares authorized, 117,955,888 and 114,390,595
shares issued and outstanding as of July 3, 2021 and January 2,
2021, respectively
1,180
1,145
Class B common stock, par value $0.01 per
share; 250,000,000 shares authorized, 99 shares issued and
outstanding as of July 3, 2021 and January 2, 2021
—
—
Additional paid-in capital
1,313,414
1,264,681
Accumulated earnings
360,914
326,772
Accumulated other comprehensive income
8,866
5,203
Stockholders’ equity
1,684,374
1,597,801
Noncontrolling interest in Summit
Holdings
10,548
18,467
Total stockholders’ equity
1,694,922
1,616,268
Total liabilities and stockholders’
equity
$
4,452,385
$
4,308,011
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Consolidated Statements
of Cash Flows
($ in thousands)
Three months ended
July 3,
June 27,
2021
2020
Cash flow from operating activities:
Net income
$
34,513
$
12,161
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, amortization and
accretion
118,430
111,278
Share-based compensation expense
10,190
9,797
Net gain on asset and business
disposals
(18,390
)
(4,131
)
Change in deferred tax asset, net
2,743
(8,175
)
Other
92
1,244
Decrease (increase) in operating assets,
net of acquisitions and dispositions:
Accounts receivable, net
(60,829
)
(28,969
)
Inventories
(14,606
)
(27,391
)
Costs and estimated earnings in excess of
billings
(21,475
)
(30,557
)
Other current assets
(3,925
)
654
Other assets
4,927
6,420
(Decrease) increase in operating
liabilities, net of acquisitions and dispositions:
Accounts payable
26,858
15,410
Accrued expenses
(4,496
)
4,681
Billings in excess of costs and estimated
earnings
(2,031
)
(1,253
)
Tax receivable agreement liability
7,132
993
Other liabilities
(4,482
)
(461
)
Net cash provided by operating
activities
74,651
61,701
Cash flow from investing activities:
Acquisitions, net of cash acquired
(7,271
)
—
Purchases of property, plant and
equipment
(132,723
)
(105,724
)
Proceeds from the sale of property, plant
and equipment
6,806
6,607
Proceeds from sale of businesses
103,649
—
Other
(27
)
1,629
Net cash used in investing activities
(29,566
)
(97,488
)
Cash flow from financing activities:
Payments on debt
(17,433
)
(11,388
)
Payments on acquisition-related
liabilities
(8,378
)
(9,703
)
Proceeds from stock option exercises
31,766
310
Other
(417
)
(907
)
Net cash provided by (used in) financing
activities
5,538
(21,688
)
Impact of foreign currency on cash
293
(437
)
Net increase (decrease) in cash
50,916
(57,912
)
Cash and cash equivalents—beginning of
period
418,181
311,319
Cash and cash equivalents—end of
period
$
469,097
$
253,407
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Revenue Data by Segment
and Line of Business
($ in thousands)
Three months ended
Six months ended
July 3,
June 27,
July 3,
June 27,
2021
2020
2021
2020
Segment Net Revenue:
West
$
313,617
$
299,024
$
548,361
$
483,516
East
219,091
200,554
342,159
320,543
Cement
85,822
75,662
126,491
113,587
Net Revenue
$
618,530
$
575,240
$
1,017,011
$
917,646
Line of Business - Net Revenue:
Materials
Aggregates
$
153,496
$
129,989
$
270,884
$
226,150
Cement (1)
82,169
73,293
120,308
106,156
Products
292,135
284,978
490,842
461,261
Total Materials and Products
527,800
488,260
882,034
793,567
Services
90,730
86,980
134,977
124,079
Net Revenue
$
618,530
$
575,240
$
1,017,011
$
917,646
Line of Business - Net Cost of
Revenue:
Materials
Aggregates
$
67,734
$
54,942
$
136,031
$
114,465
Cement
41,672
34,894
79,032
71,549
Products
237,343
226,168
408,963
382,385
Total Materials and Products
346,749
316,004
624,026
568,399
Services
71,580
67,735
111,634
107,919
Net Cost of Revenue
$
418,329
$
383,739
$
735,660
$
676,318
Line of Business - Adjusted Cash Gross
Profit (2):
Materials
Aggregates
$
85,762
$
75,047
$
134,853
$
111,685
Cement (3)
40,497
38,399
41,276
34,607
Products
54,792
58,810
81,879
78,876
Total Materials and Products
181,051
172,256
258,008
225,168
Services
19,150
19,245
23,343
16,160
Adjusted Cash Gross Profit
$
200,201
$
191,501
$
281,351
$
241,328
Adjusted Cash Gross Profit Margin (2)
Materials
Aggregates
55.9
%
57.7
%
49.8
%
49.4
%
Cement (3)
47.2
%
50.8
%
32.6
%
30.5
%
Products
18.8
%
20.6
%
16.7
%
17.1
%
Services
21.1
%
22.1
%
17.3
%
13.0
%
Total Adjusted Cash Gross Profit
Margin
32.4
%
33.3
%
27.7
%
26.3
%
(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
Six months ended
Total Volume
July 3, 2021
June 27, 2020
July 3, 2021
June 27, 2020
Aggregates (tons)
17,091
14,901
30,600
26,093
Cement (tons)
708
654
1,048
954
Ready-mix concrete (cubic yards)
1,534
1,443
2,872
2,686
Asphalt (tons)
1,557
1,755
2,031
2,163
Three months ended
Six months ended
Pricing
July 3, 2021
June 27, 2020
July 3, 2021
June 27, 2020
Aggregates (per ton)
$
11.39
$
11.12
$
11.06
$
11.00
Cement (per ton)
119.64
116.29
118.68
116.26
Ready-mix concrete (per cubic yards)
119.94
116.41
119.18
115.31
Asphalt (per ton)
59.87
59.48
59.91
58.99
Three months ended
Six months ended
Percentage Change in
Percentage Change in
Year over Year Comparison
Volume
Pricing
Volume
Pricing
Aggregates (per ton)
14.7
%
2.4
%
17.3
%
0.5
%
Cement (per ton)
8.3
%
2.9
%
9.9
%
2.1
%
Ready-mix concrete (per cubic yards)
6.3
%
3.0
%
6.9
%
3.4
%
Asphalt (per ton)
(11.3
)%
0.7
%
(6.1
)%
1.6
%
Three months ended
Six months ended
Percentage Change in
Percentage Change in
Year over Year Comparison (Excluding
acquisitions)
Volume
Pricing
Volume
Pricing
Aggregates (per ton)
2.7
%
4.7
%
4.6
%
2.7
%
Cement (per ton)
8.3
%
2.9
%
9.9
%
2.1
%
Ready-mix concrete (per cubic yards)
6.3
%
3.0
%
6.9
%
3.4
%
Asphalt (per ton)
(11.3
)%
0.7
%
(6.1
)%
1.6
%
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Reconciliations of
Gross Revenue to Net Revenue by Line of Business
($ and Units in thousands, except
pricing information)
Three months ended July 3,
2021
Gross Revenue
Intercompany
Net
Volumes
Pricing
by Product
Elimination/Delivery
Revenue
Aggregates
17,091
$
11.39
$
194,595
$
(41,099
)
$
153,496
Cement
708
119.64
84,673
(2,504
)
82,169
Materials
$
279,268
$
(43,603
)
$
235,665
Ready-mix concrete
1,534
119.94
183,936
(75
)
183,861
Asphalt
1,557
59.87
93,246
(82
)
93,164
Other Products
103,259
(88,149
)
15,110
Products
$
380,441
$
(88,306
)
$
292,135
Six months ended July 3,
2021
Gross Revenue
Intercompany
Net
Volumes
Pricing
by Product
Elimination/Delivery
Revenue
Aggregates
30,600
$
11.06
$
338,389
$
(67,505
)
$
270,884
Cement
1,048
118.68
124,376
(4,068
)
120,308
Materials
$
462,765
$
(71,573
)
$
391,192
Ready-mix concrete
2,872
119.18
342,272
(178
)
342,094
Asphalt
2,031
59.91
121,667
(140
)
121,527
Other Products
177,141
(149,920
)
27,221
Products
$
641,080
$
(150,238
)
$
490,842
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
(loss) to Adjusted EBITDA by segment for the three and six months
ended July 3, 2021 and June 27, 2020.
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Three months ended July 3,
2021
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
55,447
$
37,035
$
33,230
$
(67,954
)
$
57,758
Interest (income) expense
(2,860
)
(2,176
)
(4,035
)
33,287
24,216
Income tax expense
1,198
156
—
17,054
18,408
Depreciation, depletion and
amortization
25,133
21,146
10,143
1,101
57,523
EBITDA
$
78,918
$
56,161
$
39,338
$
(16,512
)
$
157,905
Accretion
218
408
84
—
710
(Gain) loss on sale of businesses
(273
)
509
—
—
236
Non-cash compensation
—
—
—
4,827
4,827
Other
(92
)
206
—
—
114
Adjusted EBITDA
$
78,771
$
57,284
$
39,422
$
(11,685
)
$
163,792
Adjusted EBITDA Margin (1)
25.1
%
26.1
%
45.9
%
26.5
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Three months ended June 27,
2020
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
57,040
$
32,206
$
29,386
$
(59,745
)
$
58,887
Interest (income) expense
(709
)
(433
)
(3,116
)
29,866
25,608
Income tax expense (benefit)
1,054
(36
)
—
16,163
17,181
Depreciation, depletion and
amortization
22,050
21,014
9,291
992
53,347
EBITDA
$
79,435
$
52,751
$
35,561
$
(12,724
)
$
155,023
Accretion
115
380
86
—
581
Non-cash compensation
—
—
—
4,892
4,892
Other
(607
)
253
—
(229
)
(583
)
Adjusted EBITDA
$
78,943
$
53,384
$
35,647
$
(8,061
)
$
159,913
Adjusted EBITDA Margin (1)
26.4
%
26.6
%
47.1
%
27.8
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Six months ended July 3,
2021
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
72,883
$
44,004
$
31,625
$
(113,999
)
$
34,513
Interest (income) expense
(4,892
)
(3,896
)
(8,080
)
65,270
48,402
Income tax expense
1,384
90
—
11,491
12,965
Depreciation, depletion and
amortization
50,057
42,620
18,211
2,205
113,093
EBITDA
$
119,432
$
82,818
$
41,756
$
(35,033
)
$
208,973
Accretion
434
877
165
—
1,476
Gain on sale of businesses
(273
)
(15,159
)
—
—
(15,432
)
Non-cash compensation
—
—
—
10,190
10,190
Other
(174
)
493
—
—
319
Adjusted EBITDA
$
119,419
$
69,029
$
41,921
$
(24,843
)
$
205,526
Adjusted EBITDA Margin (1)
21.8
%
20.2
%
33.1
%
20.2
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Six months ended June 27,
2020
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
57,538
$
21,139
$
17,108
$
(83,624
)
$
12,161
Interest (income) expense
(1,287
)
(1,002
)
(6,292
)
62,007
53,426
Income tax expense (benefit)
587
(165
)
—
(6,142
)
(5,720
)
Depreciation, depletion and
amortization
43,734
41,734
17,099
1,981
104,548
EBITDA
$
100,572
$
61,706
$
27,915
$
(25,778
)
$
164,415
Accretion
231
756
171
—
1,158
Non-cash compensation
—
—
—
9,797
9,797
Other
608
495
—
(899
)
204
Adjusted EBITDA
$
101,411
$
62,957
$
28,086
$
(16,880
)
$
175,574
Adjusted EBITDA Margin (1)
21.0
%
19.6
%
24.7
%
19.1
%
(1) Adjusted EBITDA Margin is defined as Adjusted EBITDA as a
percentage of net revenue.
The table below reconciles our net income attributable to Summit
Materials, Inc. to adjusted diluted net income per share for the
three and six months ended July 3, 2021 and June 27, 2020. The per
share amount of the net income attributable to Summit Materials,
Inc. presented in the table is calculated using the total equity
interests for the purpose of reconciling to adjusted diluted net
income per share.
Three months ended
Six months ended
July 3, 2021
June 27, 2020
July 3, 2021
June 27, 2020
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.
$
56,659
$
0.47
$
57,064
$
0.49
$
34,142
$
0.29
$
12,085
$
0.10
Adjustments:
Net income attributable to noncontrolling
interest
1,099
0.02
1,823
0.01
371
—
76
—
Loss (gain) on sale of businesses
236
—
—
—
(15,432
)
(0.13
)
—
—
Adjusted diluted net income before tax
related adjustments
57,994
0.49
58,887
0.50
19,081
0.16
12,161
0.10
Changes in unrecognized tax expense
(benefit)
—
—
—
—
—
—
(9,537
)
(0.08
)
Adjusted diluted net income
$
57,994
$
0.49
$
58,887
$
0.50
$
19,081
$
0.16
$
2,624
$
0.02
Weighted-average shares:
Basic Class A common stock
117,436,461
114,111,204
116,423,833
113,856,657
LP Units outstanding
1,885,789
3,053,115
2,249,499
3,103,672
Total equity units
119,322,250
117,164,319
118,673,332
116,960,329
The following table reconciles operating income to Adjusted Cash
Gross Profit and Adjusted Cash Gross Profit Margin for the three
and six months ended July 3, 2021 and June 27, 2020.
Three months ended
Six months ended
July 3,
June 27,
July 3,
June 27,
Reconciliation of Operating Income to
Adjusted Cash Gross Profit
2021
2020
2021
2020
($ in thousands)
Operating income
$
95,923
$
100,060
$
70,864
$
58,340
General and administrative expenses
47,448
39,727
99,090
81,413
Depreciation, depletion, amortization and
accretion
58,233
53,928
114,569
105,706
Gain on sale of property, plant and
equipment
(1,403
)
(2,214
)
(3,172
)
(4,131
)
Adjusted Cash Gross Profit (exclusive of
items shown separately)
$
200,201
$
191,501
$
281,351
$
241,328
Adjusted Cash Gross Profit Margin
(exclusive of items shown separately) (1)
32.4
%
33.3
%
27.7
%
26.3
%
(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 and six months ended
July 3, 2021 and June 27, 2020.
Three months ended
Six months ended
July 3,
June 27,
July 3,
June 27,
($ in thousands)
2021
2020
2021
2020
Net income
$
57,758
$
58,887
$
34,513
$
12,161
Non-cash items
74,221
74,346
113,065
110,013
Net income adjusted for non-cash items
131,979
133,233
147,578
122,174
Change in working capital accounts
(36,010
)
(32,601
)
(72,927
)
(60,473
)
Net cash provided by operating
activities
95,969
100,632
74,651
61,701
Capital expenditures, net of asset
sales
(58,823
)
(40,448
)
(125,917
)
(99,117
)
Free cash flow
$
37,146
$
60,184
$
(51,266
)
$
(37,416
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210804006014/en/
Karli Anderson EVP, Chief Environmental, Social & Governance
Officer and Head of Investor Relations
karli.anderson@summit-materials.com 303-875-3886
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