- Third Quarter Net Revenue of $662.3 million,
an increase of 2.6%
-Net income attributable to Summit Inc. of
$74.2 million
-Third Quarter Adjusted EBITDA of $190.3
million
-Aggregates volumes increased 9.2%
-Cement volumes increased 2.0%
Summit Materials, Inc. (NYSE: SUM, “Summit,” “Summit Materials,”
"Summit Inc." or the “Company”), a leading vertically integrated
construction materials company, today announced results for the
third quarter 2021.
For the three months ended October 2, 2021, the Company reported
net income attributable to Summit Inc. of $74.2 million, or $0.63
per basic share, compared to net income attributable to Summit Inc.
of $90.7 million, or $0.79 per basic share in the comparable prior
year period. The 18.2% decrease in net income included the reversal
of an unrecognized tax benefit in 2020. Summit reported adjusted
diluted net income of $81.5 million, or $0.68 per adjusted diluted
share as compared to adjusted diluted net income of $63.9 million,
or $0.55 per adjusted diluted share in the prior year period.
Summit's net revenue increased $17.0 million, or 2.6% in the
third quarter of 2021 to $662.3 million, compared to $645.2 million
in the third 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 $125.0 million in the
third quarter 2021, an increase of 24.3%, compared to $100.6
million in the prior year period, primarily due to higher revenue.
General and administrative expenses also decreased by $3.6 million
in the current period relative to third quarter 2020, when the
Company incurred CEO transition costs. Summit's operating margin
percentage for the three months ended October 2, 2021 increased to
18.9% from 15.6%, from the comparable period a year ago, due to the
factors noted above.
Adjusted EBITDA increased in the third quarter 2021 to $190.3
million as compared to $177.3 million in the third quarter
2020.
For the three months ended October 2, 2021, sales volumes
increased 9.2% in aggregates and 2.0% in cement relative to the
same period last year on strong demand in most of our markets.
Average selling prices in the third quarter of 2021 increased 3.9%
in aggregates, 4.4% in cement, 3.7% in ready-mix concrete and 1.7%
in asphalt. Adjusted cash gross profit for aggregates expanded to
$96.7 million in the third quarter 2021, an increase of 26.1%
relative to $76.7 million in the year ago quarter.
Anne Noonan, CEO of Summit Materials, commented, "The Market
Leadership theme in our Elevate Summit strategy is beginning to be
reflected in our results. Today we are reporting third quarter
Adjusted EBITDA growth of 7.3% versus Q3 2020. Organic volume and
pricing growth was reflected in expanded adjusted cash gross profit
margin in aggregates, cement and services. Our Q3 Adjusted EBITDA
margin increased 120 basis points from the year ago quarter,
contributing towards our Elevate Summit 30% Adjusted EBITDA margin
goal, which is measured over the trailing 12 months.
Summit is currently progressing several strategic divestitures
in addition to the five divestitures that were already completed in
the first half of 2021. 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 divested businesses.
When comparing 2020 to 2021, it’s also important to understand that
2020 included 53 reporting weeks, while 2021 is a standard 52-week
reporting year. In consideration of factors such as those, we are
leaving our full year 2021 Adjusted EBITDA guidance unchanged."
On September 27, 2021, Summit redeemed all $300.0 million of the
5.125% senior notes due June 1, 2025 using existing cash on hand.
As a result of the redemption, charges of $6.0 million were
recognized in the quarter ended October 2, 2021, which included
charges of $3.9 million for the applicable redemption premium and
$2.1 million for the write-off of the deferred financing fees.
As of October 2, 2021, the Company had $258.1 million in cash
and $1.6 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 October 2,
2021, cash flow provided by operations was $207.4 million and cash
paid for capital expenditures was $170.1 million.
Brian Harris, CFO of Summit Materials, added, "Just a few months
after the announcement of our Elevate Strategy, we have achieved
our Elevate Summit leverage reduction goal of less than 3.0x, and
we believe further improvements are possible with steady execution
of our strategy."
For the full year 2021, Summit has not made any changes to its
outlook for Adjusted EBITDA of approximately $490 million to $520
million, 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.
Third Quarter 2021 | Results by Line of Business
Aggregates Business: Aggregates net revenues increased by
$23.9 million to $160.3 million in the third quarter 2021 when
compared to the prior year period. Aggregates adjusted cash gross
profit margin increased to 60.3% in the third quarter 2021 as
compared to 56.2% in the third quarter 2020. Aggregates sales
volumes increased 9.2% in the third 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, North Kansas,
Virginia and British Columbia markets. Average selling prices for
aggregates increased 3.9% in the third quarter 2021.
Cement Business: Cement segment net revenues increased
9.0% to $92.5 million in the third quarter 2021, when compared to
the prior year period, on higher sales volume of cement. Cement
adjusted cash gross profit margin increased to 47.4% in the third
quarter, compared to 45.1% 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 2.0% in the third quarter and average selling
prices increased 4.4% when compared to the prior year period.
Products Business: Products net revenues were $314.0
million in the third quarter 2021, compared to $321.8 million in
the prior year period. Products adjusted cash gross profit margin
decreased to 21.0% in the third quarter, versus 21.8% in the prior
year period. Our organic average sales price for ready-mix concrete
increased 3.7% and organic sales volumes of ready-mix concrete
decreased 1.4%, due mostly to wet conditions in Texas in the third
quarter of 2021 that resulted in operational inefficiencies. Our
organic average sales price for asphalt increased 1.7%, with
pricing improvements in Kentucky and British Columbia, while volume
decreased 11.2% due to a divestiture of a paving business.
Third Quarter 2021 | Results By Reporting Segment
Net revenue increased by 2.6% to $662.3 million in the third
quarter 2021, versus $645.2 million in the prior year period on
growth in our aggregates, cement, and ready-mix concrete
operations. The Company reported operating income of $125.0 million
in the third quarter 2021, compared to $100.6 million in the prior
year period due to favorable volume and price trends in most lines
of business in addition to lower general and administrative
costs.
Net income decreased 18.7% to $75.4 million in the third quarter
of 2021, compared to income of $92.8 million in the prior year
period, which included the reversal of an unrecognized tax benefit.
Adjusted EBITDA increased 7.3% to $190.3 million in the third
quarter of 2021, compared to $177.3 million in the prior year
period on higher revenue.
West Segment: The West Segment reported operating income
of $67.4 million in the third quarter 2021, compared to $72.3
million in the prior year period. Adjusted EBITDA was $92.3 million
in the third quarter 2021, compared to $95.5 million in the prior
year period. The decreases in operating income and Adjusted EBITDA
for the third quarter of 2021 occurred as the weather conditions in
2021 in Texas were less favorable as compared to the 2020 period,
resulting in operational inefficiencies. Aggregates revenue in the
third quarter increased 11.9% over the prior year period, while
organic volumes and organic average sales prices increased 3.8% and
2.8%, respectively. Ready-mix concrete revenue in the third quarter
2021 increased 4.2% over the prior year period, as organic volumes
increased 0.7% and organic average sales prices increased 3.4%,
reflecting favorable market conditions for residential
construction. Asphalt revenue decreased by 25.6% in the third
quarter 2021 over the prior year period as asphalt volumes
decreased 23.1%, due to a divestiture in the second quarter 2021,
while sales prices increased 1.8%.
East Segment: The East Segment reported operating income
of $45.0 million in the third quarter 2021, compared to $29.3
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 $69.1
million in the third quarter 2021, compared to $56.9 million in the
prior year period. Aggregates revenue increased 15.0%, as volumes
increased 8.9% and average selling prices increased 5.5%. Ready-mix
concrete revenue decreased 3.4% as organic volumes decreased by
7.5%, partially offset by organic average selling prices which
increased 4.3%, primarily due to lower volumes in Kansas as wind
farm projects in the 2020 period were not fully replaced in 2021.
Asphalt revenue increased 30.6% as organic volumes increased 18.6%
on higher volumes in Kentucky, Kansas and Virginia, and organic
average selling prices increased 5.4% on higher liquid asphalt
index prices in most of our markets.
Cement Segment: The Cement Segment reported operating
income of $30.0 million in the third quarter 2021, compared to
$24.0 million in the prior year period. Adjusted EBITDA increased
to $40.4 million in the third quarter 2021, compared to $35.1
million in the prior year period on higher volumes and prices. The
segment reported increased organic sales volumes and organic
average selling prices of 2.0% and 4.4%, respectively, during the
third quarter 2021 as compared to the prior year period. Our Green
America Recycling facility is now operational, but continues to
ramp up production following an explosion that occurred in April
2020.
Liquidity and Capital Resources
As of October 2, 2021, the Company had cash on hand of $258.1
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 October 2, 2021, the Company had $1.6 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. 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,
November 4, 2021 , at 11:00 a.m. eastern time (9:00 a.m. mountain
time) to review the Company’s third 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 for third quarter 2021
financial results:
Domestic Live: 1-877-823-8690 International Live: 1-825-312-2236
Conference ID: 3128039 Password: Summit
To listen to a replay of the teleconference, which will be
available through November 11, 2021:
Domestic Replay: 1-800-585-8367 International Replay:
1-416-621-4642 Conference ID: 3128039
About Summit Materials
Summit Materials is a leading vertically integrated
materials-based company that supplies aggregates, cement, ready-mix
concrete and asphalt in the United States and British Columbia,
Canada. Summit is a geographically diverse, materials-based
business of scale that offers customers a single-source provider of
construction materials and related downstream products in the
public infrastructure, residential and nonresidential end markets.
Summit has a strong track record of successful acquisitions since
its founding and continues to pursue growth opportunities in new
and existing markets. For more information about Summit Materials,
please visit www.summit-materials.com.
Non-GAAP Financial Measures
The Securities and Exchange Commission (“SEC”) regulates the use
of “non-GAAP financial measures,” such as Adjusted Net Income
(Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Adjusted
EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit,
Adjusted Cash Gross Profit Margin, Free Cash Flow, Net Leverage and
Net Debt which are derived on the basis of methodologies other than
in accordance with U.S. generally accepted accounting principles
(“U.S. GAAP”). We have provided these measures because, among other
things, we believe that they provide investors with additional
information to measure our performance, evaluate our ability to
service our debt and evaluate certain flexibility under our
restrictive covenants. Our Adjusted Net Income (Loss), Adjusted
Diluted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Further
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross
Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow, Net
Leverage and Net Debt may vary from the use of such terms by others
and should not be considered as alternatives to or more important
than net income (loss), operating income (loss), revenue or any
other performance measures derived in accordance with U.S. GAAP as
measures of operating performance or to cash flows as measures of
liquidity.
Adjusted EBITDA, Adjusted EBITDA Margin, and other non-GAAP
measures have important limitations as analytical tools, and you
should not consider them in isolation or as substitutes for
analysis of our results as reported under U.S. GAAP. Some of the
limitations of Adjusted EBITDA are that these measures do not
reflect: (i) our cash expenditures or future requirements for
capital expenditures or contractual commitments; (ii) changes in,
or cash requirements for, our working capital needs; (iii) interest
expense or cash requirements necessary to service interest and
principal payments on our debt; and (iv) income tax payments we are
required to make. Because of these limitations, we rely primarily
on our U.S. GAAP results and use Adjusted EBITDA, Adjusted EBITDA
Margin and other non-GAAP measures on a supplemental basis.
Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA
Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit
Margin, Adjusted Net Income (Loss), Adjusted Diluted Net Income,
Adjusted Diluted EPS, Free Cash Flow, Net Leverage and Net Debt
reflect additional ways of viewing aspects of our business that,
when viewed with our GAAP results and the accompanying
reconciliations to U.S. GAAP financial measures included in the
tables attached to this press release, may provide a more complete
understanding of factors and trends affecting our business. We
strongly encourage investors to review our consolidated financial
statements in their entirety and not rely on any single financial
measure. Reconciliations of the non-GAAP measures used in this
press release are included in the attached tables. Because GAAP
financial measures on a forward-looking basis are not accessible,
and reconciling information is not available without unreasonable
effort, we have not provided reconciliations for forward-looking
non-GAAP measures. For the same reasons, we are unable to address
the probable significance of the unavailable information, which
could be material to future results.
Cautionary Statement Regarding Forward-Looking
Statements
This press release includes “forward-looking statements” within
the meaning of the federal securities laws, which involve risks and
uncertainties. Forward-looking statements include all statements
that do not relate solely to historical or current facts, and you
can identify forward-looking statements because they contain words
such as “believes,” “expects,” “may,” “will,” “should,” “seeks,”
“intends,” “trends,” “plans,” “estimates,” “projects” or
“anticipates” or similar expressions that concern our strategy,
plans, expectations or intentions. All statements made relating to
our estimated and projected earnings, margins, costs, expenditures,
cash flows, growth rates and financial results are forward-looking
statements. These forward-looking statements are subject to risks,
uncertainties and other factors that may cause our actual results,
performance or achievements to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. We derive many of our forward-looking
statements from our operating budgets and forecasts, which are
based upon many detailed assumptions. While we believe that our
assumptions are reasonable, it is very difficult to predict the
effect of known factors, and, of course, it is impossible to
anticipate all factors that could affect our actual results. In
light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by us or any
other person that the results or conditions described in such
statements or our objectives and plans will be realized. Important
factors could affect our results and could cause results to differ
materially from those expressed in our forward-looking statements,
including but not limited to the factors discussed in the section
entitled “Risk Factors” in Summit Inc.’s Annual Report on Form 10-K
for the fiscal year ended January 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, and responses to it,
including vaccine mandates, or any similar crisis, on our
business;
- our dependence on the construction industry and the strength of
the local economies in which we operate;
- the cyclical nature of our business;
- risks related to weather and seasonality;
- risks associated with our capital-intensive business;
- competition within our local markets;
- our ability to execute on our acquisition strategy,
successfully integrate acquisitions with our existing operations
and retain key employees of acquired businesses;
- our dependence on securing and permitting aggregate reserves in
strategically located areas;
- declines in public infrastructure construction and delays or
reductions in governmental funding, including the funding by
transportation authorities and other state agencies;
- our reliance on private investment in infrastructure, which may
be adversely affected by periods of economic stagnation and
recession;
- environmental, health, safety and climate change laws or
governmental requirements or policies concerning zoning and land
use;
- costs associated with pending and future litigation;
- rising prices for, or more limited availability of,
commodities, labor and other production and delivery inputs as a
result of inflation, supply chain challenges or otherwise;
- conditions in the credit markets;
- our ability to accurately estimate the overall risks,
requirements or costs when we bid on or negotiate contracts that
are ultimately awarded to us;
- material costs and losses as a result of claims that our
products do not meet regulatory requirements or contractual
specifications;
- cancellation of a significant number of contracts or our
disqualification from bidding for new contracts;
- special hazards related to our operations that may cause
personal injury or property damage not covered by insurance;
- unexpected factors affecting self-insurance claims and reserve
estimates;
- our substantial current level of indebtedness, including our
exposure to variable interest rate risk;
- our dependence on senior management and other key personnel,
and our ability to retain and attract qualified personnel;
- supply constraints or significant price fluctuations in the
electricity and petroleum-based resources that we use, including
diesel and liquid asphalt;
- climate change and climate change legislation or
regulations;
- unexpected operational difficulties;
- interruptions in our information technology systems and
infrastructure; including cybersecurity and data leakage risks;
and
- potential labor disputes, strikes, other forms of work stoppage
or other union activities.
All subsequent written and oral forward-looking statements
attributable to us, or persons acting on our behalf, are expressly
qualified in their entirety by these cautionary statements. Any
forward-looking statement that we make herein speaks only as of the
date of this press release. We undertake no obligation to publicly
update or revise any forward-looking statement as a result of new
information, future events or otherwise, except as required by
law.
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Consolidated Statements
of Operations
($ in thousands, except share and
per share amounts)
Three months ended
Nine months ended
October 2,
September 26,
October 2,
September 26,
2021
2020
2021
2020
Revenue:
Product
$
561,938
$
540,904
$
1,443,972
$
1,334,471
Service
100,321
104,342
235,298
228,421
Net revenue
662,259
645,246
1,679,270
1,562,892
Delivery and subcontract revenue
54,981
64,373
133,731
144,926
Total revenue
717,240
709,619
1,813,001
1,707,818
Cost of revenue (excluding items shown
separately below):
Product
356,214
354,250
980,045
923,384
Service
75,741
82,969
187,570
190,153
Net cost of revenue
431,955
437,219
1,167,615
1,113,537
Delivery and subcontract cost
54,981
64,373
133,731
144,926
Total cost of revenue
486,936
501,592
1,301,346
1,258,463
General and administrative expenses
47,364
50,972
146,454
132,385
Depreciation, depletion, amortization and
accretion
59,082
58,054
173,651
163,760
Gain on sale of property, plant and
equipment
(1,159
)
(1,616
)
(4,331
)
(5,747
)
Operating income
125,017
100,617
195,881
158,957
Interest expense
24,134
24,623
72,536
78,049
Loss on debt financings
6,016
4,064
6,016
4,064
Loss (gain) on sale of businesses
113
—
(15,319
)
—
Other income, net
(1,137
)
(1,226
)
(10,721
)
(2,753
)
Income from operations before taxes
95,891
73,156
143,369
79,597
Income tax expense (benefit)
20,513
(19,613
)
33,478
(25,333
)
Net income
75,378
92,769
109,891
104,930
Net income attributable to Summit Holdings
(1)
1,174
2,039
1,545
2,115
Net income attributable to Summit Inc.
$
74,204
$
90,730
$
108,346
$
102,815
Earnings per share of Class A common
stock:
Basic
$
0.63
$
0.79
$
0.92
$
0.90
Diluted
$
0.62
$
0.79
$
0.92
$
0.90
Weighted average shares of Class A common
stock:
Basic
118,473,530
114,436,907
117,258,431
114,088,447
Diluted
119,291,646
114,472,171
118,360,615
114,457,276
(1) Represents portion of business owned by pre-IPO investors
rather than by Summit.
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Consolidated Balance Sheets
($ in thousands, except share and
per share amounts)
October 2,
January 2,
2021
2021
(unaudited)
(audited)
Assets
Current assets:
Cash and cash equivalents
$
258,083
$
418,181
Accounts receivable, net
333,351
254,696
Costs and estimated earnings in excess of
billings
34,181
8,666
Inventories
195,312
200,308
Other current assets
13,855
11,428
Total current assets
834,782
893,279
Property, plant and equipment, less
accumulated depreciation, depletion and amortization (October 2,
2021 - $1,234,171 and January 2, 2021 - $1,132,925)
1,841,139
1,850,169
Goodwill
1,174,855
1,201,291
Intangible assets, less accumulated
amortization (October 2, 2021 - $14,309 and January 2, 2021 -
$11,864)
70,338
47,852
Deferred tax assets, less valuation
allowance (October 2, 2021 - $1,675 and January 2, 2021 -
$1,675)
210,389
231,877
Operating lease right-of-use assets
27,339
28,543
Other assets
57,807
55,000
Total assets
$
4,216,649
$
4,308,011
Liabilities and Stockholders’
Equity
Current liabilities:
Current portion of debt
$
6,354
$
6,354
Current portion of acquisition-related
liabilities
12,809
10,265
Accounts payable
155,919
120,813
Accrued expenses
137,378
160,570
Current operating lease liabilities
6,818
8,188
Billings in excess of costs and estimated
earnings
11,631
16,499
Total current liabilities
330,909
322,689
Long-term debt
1,591,989
1,892,347
Acquisition-related liabilities
33,223
12,246
Tax receivable agreement liability
330,871
321,680
Noncurrent operating lease liabilities
21,596
21,500
Other noncurrent liabilities
136,297
121,281
Total liabilities
2,444,885
2,691,743
Stockholders’ equity:
Class A common stock, par value $0.01 per
share; 1,000,000,000 shares authorized, 118,564,950 and 114,390,595
shares issued and outstanding as of October 2, 2021 and January 2,
2021, respectively
1,186
1,145
Class B common stock, par value $0.01 per
share; 250,000,000 shares authorized, 99 shares issued and
outstanding as of October 2, 2021 and January 2, 2021
—
—
Additional paid-in capital
1,319,897
1,264,681
Accumulated earnings
435,118
326,772
Accumulated other comprehensive income
5,670
5,203
Stockholders’ equity
1,761,871
1,597,801
Noncontrolling interest in Summit
Holdings
9,893
18,467
Total stockholders’ equity
1,771,764
1,616,268
Total liabilities and stockholders’
equity
$
4,216,649
$
4,308,011
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Consolidated Statements
of Cash Flows
($ in thousands)
Three months ended
October 2,
September 26,
2021
2020
Cash flow from operating activities:
Net income
$
109,891
$
104,930
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, amortization and
accretion
177,841
164,397
Share-based compensation expense
14,875
23,119
Net gain on asset and business
disposals
(19,295
)
(5,746
)
Non-cash loss on debt financings
2,116
4,064
Change in deferred tax asset, net
19,814
(28,968
)
Other
(586
)
760
Decrease (increase) in operating assets,
net of acquisitions and dispositions:
Accounts receivable, net
(78,108
)
(48,361
)
Inventories
(12,002
)
(2,829
)
Costs and estimated earnings in excess of
billings
(26,969
)
(30,912
)
Other current assets
(2,556
)
(75
)
Other assets
6,459
8,367
(Decrease) increase in operating
liabilities, net of acquisitions and dispositions:
Accounts payable
33,756
21,729
Accrued expenses
(15,598
)
3,164
Billings in excess of costs and estimated
earnings
(2,907
)
395
Tax receivable agreement liability
9,191
993
Other liabilities
(8,549
)
3,012
Net cash provided by operating
activities
207,373
218,039
Cash flow from investing activities:
Acquisitions, net of cash acquired
(7,263
)
(123,195
)
Purchases of property, plant and
equipment
(170,070
)
(140,006
)
Proceeds from the sale of property, plant
and equipment
8,827
8,848
Proceeds from sale of businesses
103,649
—
Other
(459
)
1,395
Net cash used in investing activities
(65,316
)
(252,958
)
Cash flow from financing activities:
Proceeds from debt issuances
—
700,000
Debt issuance costs
—
(9,565
)
Payments on debt
(323,802
)
(666,892
)
Payments on acquisition-related
liabilities
(9,755
)
(10,391
)
Proceeds from stock option exercises
32,416
329
Other
(951
)
(908
)
Net cash (used in) provided by financing
activities
(302,092
)
12,573
Impact of foreign currency on cash
(63
)
(216
)
Net decrease in cash
(160,098
)
(22,562
)
Cash and cash equivalents—beginning of
period
418,181
311,319
Cash and cash equivalents—end of
period
$
258,083
$
288,757
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Revenue Data by Segment
and Line of Business
($ in thousands)
Three months ended
Nine months ended
October 2,
September 26,
October 2,
September 26,
2021
2020
2021
2020
Segment Net Revenue:
West
$
338,575
$
351,510
$
886,936
$
835,026
East
231,184
208,862
573,343
529,405
Cement
92,500
84,874
218,991
198,461
Net Revenue
$
662,259
$
645,246
$
1,679,270
$
1,562,892
Line of Business - Net Revenue:
Materials
Aggregates
$
160,317
$
136,396
$
431,201
$
362,546
Cement (1)
87,645
82,698
207,953
188,854
Products
313,976
321,810
804,818
783,071
Total Materials and Products
561,938
540,904
1,443,972
1,334,471
Services
100,321
104,342
235,298
228,421
Net Revenue
$
662,259
$
645,246
$
1,679,270
$
1,562,892
Line of Business - Net Cost of
Revenue:
Materials
Aggregates
$
63,622
$
59,704
$
199,653
$
174,169
Cement
43,768
44,449
122,800
115,998
Products
248,042
251,606
657,005
633,991
Total Materials and Products
355,432
355,759
979,458
924,158
Services
76,523
81,460
188,157
189,379
Net Cost of Revenue
$
431,955
$
437,219
$
1,167,615
$
1,113,537
Line of Business - Adjusted Cash Gross
Profit (2):
Materials
Aggregates
$
96,695
$
76,692
$
231,548
$
188,377
Cement (3)
43,877
38,249
85,153
72,856
Products
65,934
70,204
147,813
149,080
Total Materials and Products
206,506
185,145
464,514
410,313
Services
23,798
22,882
47,141
39,042
Adjusted Cash Gross Profit
$
230,304
$
208,027
$
511,655
$
449,355
Adjusted Cash Gross Profit Margin (2)
Materials
Aggregates
60.3
%
56.2
%
53.7
%
52.0
%
Cement (3)
47.4
%
45.1
%
38.9
%
36.7
%
Products
21.0
%
21.8
%
18.4
%
19.0
%
Services
23.7
%
21.9
%
20.0
%
17.1
%
Total Adjusted Cash Gross Profit
Margin
34.8
%
32.2
%
30.5
%
28.8
%
(1) Net revenue for the cement line of business excludes revenue
associated with hazardous and non-hazardous waste, which is
processed into fuel and used in the cement plants and is included
in services net revenue. Additionally, net revenue from cement
swaps and other cement-related products are included in products
net revenue. (2) Adjusted cash gross profit is calculated as net
revenue by line of business less net cost of revenue by line of
business. Adjusted cash gross profit margin is defined as adjusted
cash gross profit divided by net revenue. (3) The cement adjusted
cash gross profit includes the earnings from the waste processing
operations, cement swaps and other products. Cement line of
business adjusted cash gross profit margin is defined as cement
adjusted cash gross profit divided by cement segment net
revenue.
SUMMIT MATERIALS, INC. AND
SUBSIDIARIES
Unaudited Volume and Price
Statistics
(Units in thousands)
Three months ended
Nine months ended
Total Volume
October 2, 2021
September 26, 2020
October 2, 2021
September 26, 2020
Aggregates (tons)
17,884
16,383
48,484
42,476
Cement (tons)
748
733
1,796
1,686
Ready-mix concrete (cubic yards)
1,509
1,531
4,381
4,217
Asphalt (tons)
1,880
2,118
3,911
4,281
Three months ended
Nine months ended
Pricing
October 2, 2021
September 26, 2020
October 2, 2021
September 26, 2020
Aggregates (per ton)
$
11.32
$
10.89
$
11.16
$
10.96
Cement (per ton)
121.26
116.17
119.76
116.22
Ready-mix concrete (per cubic yards)
121.40
117.12
119.95
115.97
Asphalt (per ton)
61.42
60.40
60.63
59.69
Three months ended
Nine months ended
Percentage Change in
Percentage Change in
Year over Year Comparison
Volume
Pricing
Volume
Pricing
Aggregates (per ton)
9.2
%
3.9
%
14.1
%
1.8
%
Cement (per ton)
2.0
%
4.4
%
6.5
%
3.0
%
Ready-mix concrete (per cubic yards)
(1.4
)%
3.7
%
3.9
%
3.4
%
Asphalt (per ton)
(11.2
)%
1.7
%
(8.6
)%
1.6
%
Three months ended
Nine months ended
Percentage Change in
Percentage Change in
Year over Year Comparison (Excluding
acquisitions)
Volume
Pricing
Volume
Pricing
Aggregates (per ton)
5.6
%
4.7
%
5.0
%
3.5
%
Cement (per ton)
2.0
%
4.4
%
6.5
%
3.0
%
Ready-mix concrete (per cubic yards)
(1.4
)%
3.7
%
3.9
%
3.4
%
Asphalt (per ton)
(11.2
)%
1.7
%
(8.6
)%
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 October 2,
2021
Gross Revenue
Intercompany
Net
Volumes
Pricing
by Product
Elimination/Delivery
Revenue
Aggregates
17,884
$
11.32
$
202,523
$
(42,206
)
$
160,317
Cement
748
121.26
90,648
(3,003
)
87,645
Materials
$
293,171
$
(45,209
)
$
247,962
Ready-mix concrete
1,509
121.40
183,213
(99
)
183,114
Asphalt
1,880
61.42
115,471
(106
)
115,365
Other Products
106,663
(91,166
)
15,497
Products
$
405,347
$
(91,371
)
$
313,976
Nine months ended October 2,
2021
Gross Revenue
Intercompany
Net
Volumes
Pricing
by Product
Elimination/Delivery
Revenue
Aggregates
48,484
$
11.16
$
540,912
$
(109,711
)
$
431,201
Cement
1,796
119.76
215,024
(7,071
)
207,953
Materials
$
755,936
$
(116,782
)
$
639,154
Ready-mix concrete
4,381
119.95
525,485
(277
)
525,208
Asphalt
3,911
60.63
237,138
(246
)
236,892
Other Products
283,804
(241,086
)
42,718
Products
$
1,046,427
$
(241,609
)
$
804,818
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 nine months
ended October 2, 2021 and September 26, 2020.
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Three months ended October 2,
2021
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
69,457
$
47,924
$
34,310
$
(76,313
)
$
75,378
Interest (income) expense
(2,933
)
(2,237
)
(4,359
)
33,663
24,134
Income tax expense
976
119
—
19,418
20,513
Depreciation, depletion and
amortization
24,577
22,412
10,324
1,068
58,381
EBITDA
$
92,077
$
68,218
$
40,275
$
(22,164
)
$
178,406
Accretion
219
397
85
—
701
Loss on debt financings
—
—
—
6,016
6,016
(Gain) loss on sale of businesses
(135
)
248
—
—
113
Non-cash compensation
—
—
—
4,685
4,685
Other
142
221
—
—
363
Adjusted EBITDA
$
92,303
$
69,084
$
40,360
$
(11,463
)
$
190,284
Adjusted EBITDA Margin (1)
27.3
%
29.9
%
43.6
%
28.7
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Three months ended September
26, 2020
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
72,871
$
31,013
$
27,324
$
(38,439
)
$
92,769
Interest (income) expense
(1,192
)
(649
)
(3,393
)
29,857
24,623
Income tax expense (benefit)
937
(193
)
—
(20,357
)
(19,613
)
Depreciation, depletion and
amortization
22,973
22,346
11,066
979
57,364
EBITDA
$
95,589
$
52,517
$
34,997
$
(27,960
)
$
155,143
Accretion
144
457
89
—
690
Loss on debt financings
—
—
—
4,064
4,064
Non-cash compensation
—
—
—
13,322
13,322
Other
(263
)
3,969
—
377
4,083
Adjusted EBITDA
$
95,470
$
56,943
$
35,086
$
(10,197
)
$
177,302
Adjusted EBITDA Margin (1)
27.2
%
27.3
%
41.3
%
27.5
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Nine months ended October 2,
2021
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
142,340
$
91,928
$
65,935
$
(190,312
)
$
109,891
Interest (income) expense
(7,825
)
(6,133
)
(12,439
)
98,933
72,536
Income tax expense
2,360
209
—
30,909
33,478
Depreciation, depletion and
amortization
74,634
65,032
28,535
3,273
171,474
EBITDA
$
211,509
$
151,036
$
82,031
$
(57,197
)
$
387,379
Accretion
653
1,274
250
—
2,177
Loss on debt financings
—
—
—
6,016
6,016
Gain on sale of businesses
(408
)
(14,911
)
—
—
(15,319
)
Non-cash compensation
—
—
—
14,875
14,875
Other
(32
)
714
—
—
682
Adjusted EBITDA
$
211,722
$
138,113
$
82,281
$
(36,306
)
$
395,810
Adjusted EBITDA Margin (1)
23.9
%
24.1
%
37.6
%
23.6
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Nine months ended September
26, 2020
by Segment
West
East
Cement
Corporate
Consolidated
($ in thousands)
Net income (loss)
$
130,409
$
52,152
$
44,432
$
(122,063
)
$
104,930
Interest (income) expense
(2,479
)
(1,651
)
(9,685
)
91,864
78,049
Income tax expense (benefit)
1,524
(358
)
—
(26,499
)
(25,333
)
Depreciation, depletion and
amortization
66,707
64,080
28,165
2,960
161,912
EBITDA
$
196,161
$
114,223
$
62,912
$
(53,738
)
$
319,558
Accretion
375
1,213
260
—
1,848
Loss on debt financings
—
—
—
4,064
4,064
Non-cash compensation
—
—
—
23,119
23,119
Other
345
4,464
—
(522
)
4,287
Adjusted EBITDA
$
196,881
$
119,900
$
63,172
$
(27,077
)
$
352,876
Adjusted EBITDA Margin (1)
23.6
%
22.6
%
31.8
%
22.6
%
(1) Adjusted EBITDA Margin is defined as Adjusted EBITDA as a
percentage of net revenue.
The table below reconciles our net income
attributable to Summit Materials, Inc. to adjusted diluted net
income per share for the three and nine months ended October 2,
2021 and September 26, 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
Nine months ended
October 2, 2021
September 26, 2020
October 2, 2021
September 26, 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.
$
74,204
$
0.62
$
90,730
$
0.77
$
108,346
$
0.91
$
102,815
$
0.88
Adjustments:
Net income attributable to noncontrolling
interest
1,174
0.01
2,039
0.02
1,545
0.01
2,115
0.02
Loss (gain) on sale of businesses
113
—
—
—
(15,319
)
(0.13
)
—
—
Loss on debt financings
6,016
0.05
4,064
0.04
6,016
0.05
4,064
0.03
Adjusted diluted net income before tax
related adjustments
81,507
0.68
96,833
0.83
100,588
0.84
108,994
0.93
Changes in unrecognized tax expense
(benefit)
—
—
(32,885
)
(0.28
)
—
—
(42,422
)
(0.36
)
Adjusted diluted net income
$
81,507
$
0.68
$
63,948
$
0.55
$
100,588
$
0.84
$
66,572
$
0.57
Weighted-average shares:
Basic Class A common stock
118,272,955
114,116,564
117,040,207
113,943,292
LP Units outstanding
1,594,272
3,053,115
2,031,090
3,086,820
Total equity units
119,867,227
117,169,679
119,071,297
117,030,112
The following table reconciles operating
income to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit
Margin for the three and nine months ended October 2, 2021 and
September 26, 2020.
Three months ended
Nine months ended
October 2,
September 26,
October 2,
September 26,
Reconciliation of Operating Income to
Adjusted Cash Gross Profit
2021
2020
2021
2020
($ in thousands)
Operating income
$
125,017
$
100,617
$
195,881
$
158,957
General and administrative expenses
47,364
50,972
146,454
132,385
Depreciation, depletion, amortization and
accretion
59,082
58,054
173,651
163,760
Gain on sale of property, plant and
equipment
(1,159
)
(1,616
)
(4,331
)
(5,747
)
Adjusted Cash Gross Profit (exclusive of
items shown separately)
$
230,304
$
208,027
$
511,655
$
449,355
Adjusted Cash Gross Profit Margin
(exclusive of items shown separately) (1)
34.8
%
32.2
%
30.5
%
28.8
%
(1) Adjusted Cash Gross Profit Margin is defined as Adjusted
Cash Gross Profit as a percentage of net revenue.
The following table reconciles net cash
provided by operating activities to free cash flow for the three
and nine months ended October 2, 2021 and September 26, 2020.
Three months ended
Nine months ended
October 2,
September 26,
October 2,
September 26,
($ in thousands)
2021
2020
2021
2020
Net income
$
75,378
$
92,769
$
109,891
$
104,930
Non-cash items
81,700
47,613
194,765
157,626
Net income adjusted for non-cash items
157,078
140,382
304,656
262,556
Change in working capital accounts
(24,356
)
15,956
(97,283
)
(44,517
)
Net cash provided by operating
activities
132,722
156,338
207,373
218,039
Capital expenditures, net of asset
sales
(35,326
)
(32,041
)
(161,243
)
(131,158
)
Free cash flow
$
97,396
$
124,297
$
46,130
$
86,881
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211103006201/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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