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Summit Materials, Inc. Reports Second Quarter 2023 Results

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Second Quarter Records established for Revenue and Profitability

Achieved Elevate Summit target for ROIC

Raises 2023 Guidance

DENVER, Aug. 2, 2023 /PRNewswire/ -- 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 ended July 1, 2023. All comparisons are versus the quarter-ended July 2, 2022 unless noted otherwise.



Three months ended

($ in thousands, except per share amounts)


July 1, 2023


July 2, 2022


% Chg vs. PY

Net revenue


$     680,373


$     631,918


7.7 %

Operating income


129,633


111,236


16.5 %

Net income


84,728


192,766


(56.0) %

Basic EPS


$           0.70


$           1.58


(55.7) %








Adjusted Cash Gross Profit


236,747


202,349


17.0 %

Adjusted EBITDA


191,745


164,034


16.9 %

Adjusted Diluted EPS


$           0.71


$           0.59


20.3 %

 

"Sustained pricing momentum across the portfolio, together with solid demand fundamentals and very strong operational execution resulted in remarkable second quarter performance and several financial records for our business," commented Anne Noonan, Summit Materials President and CEO. Importantly, we are delivering against our Elevate Summit goals, setting high-water marks for Adjusted EBITDA margin and surpassing our ROIC target minimum. Given these first half tailwinds, more favorable second half operating conditions, and contributions from recently completed acquisitions, we are on solid footing to again raise our financial commitments for this year. Underpinning these upgraded expectations is better-than-anticipated traction on recent pricing actions and a more robust demand environment, especially concerning residential demand resiliency. Bottom line is that the teams across our Summit footprint are capitalizing on market opportunities, raising the bar operationally, and delivering significant growth in 2023 for the organization and our shareholders."

Scott Anderson, Executive Vice President and CFO of Summit Materials added, "Our financial progress is complemented by aggressive, yet purposeful efforts to draw on the Company's fortified balance sheet for growth. In the second quarter, we completed three acquisitions that each fit nicely within our M&A framework, strengthen the overall portfolio, and will immediately be accretive to Adjusted EBITDA. These acquisitions further our materials-led portfolio strategy while, at the same time, enter Summit into the prioritized market of Phoenix, Arizona. With the purchase of Arizona Materials, we establish an integrated leadership position in one of the fastest growing markets in the country with the opportunity and intentions to build out a more extensive, materials-oriented growth platform in that geography. Collectively, we believe ongoing portfolio additions like these alongside existing organic opportunities is a powerful algorithm for Summit's profitable growth."         

2023 Guidance

For the full year 2023, Summit is raising its Adjusted EBITDA guidance to incorporate performance over the first six months, recent acquisitions, and improved assumptions for operating conditions. The Company is now projecting Adjusted EBITDA of approximately $550 million to $570 million, up from the previous outlook of $490 million to $530 million. Summit currently projects 2023 capital expenditures of approximately $240 million to $260 million including greenfield projects.

Adjusted EBITDA is a non-GAAP measure. Refer to the "Non-GAAP Financial Measures" section for more information. 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.

Second Quarter 2023 | Total Company Results

Net revenue increased $48.5 million, or 7.7% in the second quarter to $680.4 million, as increases in average sales prices across all lines of business more than offset lower volumes.

Operating income increased $18.4 million, or 16.5% in the second quarter to $129.6 million, driven by a combination of increases in average sales price that more than offset inflationary increases in cost of revenue and higher general and administrative expenses versus the prior year period. Summit's operating margin percentage for the three months ended July 1, 2023 increased to 19.1% from 17.6%, from the comparable period a year ago.

Net income attributable to Summit Inc. decreased to $83.6 million, or $0.70 per basic share, compared to $190.1 million, or $1.58 per basic share in the comparable prior year period due primarily to gain on sale of business in the prior year period. Summit reported adjusted diluted net income of $84.7 million, or $0.71 per adjusted diluted share as compared to $71.8 million, or $0.59 per adjusted diluted share in the prior year period.

Adjusted EBITDA increased $27.7 million, or 16.9% to $191.7 million primarily reflecting strong pricing across all lines of business.

Second Quarter 2023 | Results by Line of Business

Aggregates Business: Aggregates net revenues increased by $21.0 million to $182.5 million in the second quarter. Aggregates adjusted cash gross profit margin was 53.6% in the second quarter as compared to 53.7% in the prior year period. Aggregates sales volume decreased 2.5% in the second quarter due, in part, to divestitures in the East Segment. Organic aggregates sales volumes declined 2.0% as unfavorable weather conditions and residential softness in the West Segment more than offset organic aggregates volume growth from the East Segment. Average selling prices for aggregates increased 14.5%, sustaining strong levels and reflecting the cumulative effects of January 1, 2023 pricing actions and those implemented in the second quarter.

Cement Business: Cement Segment net revenues increased 19.5% to $111.9 million in the second quarter. Cement Segment adjusted cash gross profit margin increased to 52.8% in the second quarter, compared to 48.6% in the prior year period as strong pricing gains coupled with a greater contribution from Green America Recycling more than offset inflationary cost conditions. Despite solid demand conditions, sales volume of cement decreased 0.3% reflecting sold-out conditions along the Mississippi River market. Average selling prices increased 16.0% in the second quarter due to the compounding effects of mid-year 2022 and January 1, 2023 pricing actions. 

Products Business: Products net revenues were $309.6 million in the second quarter, up 5.1% versus the prior year period. Products adjusted cash gross profit margin increased 3 percentage points to 21.2% in the second quarter reflecting margin expansion for both ready-mix concrete and asphalt relative to the year-ago period. Organic average sales price for ready-mix concrete increased 13.7% driven by strong, double-digit pricing growth across all markets, including our key residential markets of Houston and Salt Lake City. Organic sales volumes of ready-mix concrete decreased 11.0% due to reduced residential activity. Organic average selling prices for asphalt increased 15.0%, due to pricing gains in North Texas and the Intermountain West. Organic asphalt sales volume increased 2.1% fueled by growth in North Texas and public infrastructure demand.

Second Quarter 2023 | Results By Reporting Segment

West Segment: The West Segment operating income increased $12.1 million to $74.7 million and Adjusted EBITDA of $104.5 million in the second quarter increased 23.5% versus the prior year period. Aggregates revenue increased 12.8% as 17.6% organic pricing growth was partially offset by 6.6% organic volume declines. Pricing growth was strongest in Texas followed by British Columbia and then the Intermountain West. Ready-mix concrete revenue increased 10.2% as 13.5% organic pricing growth was more than offset by lower volumes, particularly in Houston while activity in Salt Lake City demonstrated robust sequential recovery. Asphalt revenue increased 25.6% due to organic pricing growth of 17.2% and organic volume growth of 3.8% driven by the North Texas market and, to a lesser extent, the Intermountain West. 

East Segment: The East Segment operating income of $31.6 million was essentially flat to the prior year period and Adjusted EBITDA increased 2.0% to $47.6 million, despite the impact of divestitures and reflective of a favorable pricing and demand environment. Aggregates revenue increased 10.4% versus the prior year period. Organic aggregates volumes increased 3.4% driven by strong growth in Kansas and Virginia. Aggregates pricing increased 10.3% with solid growth across markets. Ready-mix concrete revenue increased 1.6% due to average selling price growth of 14.2% that more than offset lower volumes. Due primarily to divestitures, asphalt revenue decreased to $9.2 million.

Cement Segment: The Cement Segment operating income increased 27.6% to $43.0 million. Adjusted EBITDA increased $9.6 million as revenue growth combined with greater contribution from Green America Recycling to more than offset inflationary conditions. In the second quarter, the Cement Segment reported a volume decreased of 0.3% and average selling price growth of 16.0%.

Liquidity and Capital Resources

As of July 1, 2023, the Company had $230.0 million in cash and $1.5 billion in debt outstanding. The Company's $395 million revolving credit facility has $374.1 million available after outstanding letters of credit.  The reduction in the Company's cash position relative to the period ending April 1, 2023 primarily reflects acquisitions made in the second quarter of 2023.

For the quarter ended July 1, 2023, cash flow provided by operations was $94.0 million and cash paid for capital expenditures was $126.9 million.

As of July 1, 2023, approximately $149.0 million remained available for share repurchase under the Company's existing share repurchase program.

Webcast and Conference Call Information

Summit Materials will conduct a conference call on Thursday, August 3, 2023, at 12:00 p.m. eastern time (10:00 a.m. mountain time) to review the Company's second quarter 2023 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.

A webcast of the second quarter results conference call and accompanying presentation materials will be available in the Investors section of Summit's website at investors.summit-materials.com or at the following link: 
https://events.q4inc.com/attendee/210795718.

To participate in the live teleconference for second quarter 2023 financial results:

Domestic Live:                       1-888-330-3416 
International Live:                  1-646-960-0820
Conference ID:                       1542153

To listen to a replay of the teleconference, which will be available through August 10, 2023:

Domestic Replay:                   1-800-770-2030
International Replay:              1-647-362-9199
Conference ID:                       1542153

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, and Free Cash Flow which are derived on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). We have provided these measures because, among other things, we believe that they provide investors with additional information to measure our performance, evaluate our ability to service our debt and evaluate certain flexibility under our restrictive covenants. Our Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, and Free Cash Flow may vary from the use of such terms by others and should not be considered as alternatives to or more important than net income (loss), operating income (loss), revenue or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or to cash flows as measures of liquidity.

Adjusted EBITDA, Adjusted EBITDA Margin, and other non-GAAP measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of the limitations of Adjusted EBITDA are that these measures do not reflect: (i) our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) changes in, or cash requirements for, our working capital needs; (iii) interest expense or cash requirements necessary to service interest and principal payments on our debt; and (iv) income tax payments we are required to make. Because of these limitations, we rely primarily on our U.S. GAAP results and use Adjusted EBITDA, Adjusted EBITDA Margin and other non-GAAP measures on a supplemental basis.

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, and Free Cash Flow reflect additional ways of viewing aspects of our business that, when viewed with our GAAP results and the accompanying reconciliations to U.S. GAAP financial measures included in the tables attached to this press release, may provide a more complete understanding of factors and trends affecting our business. We strongly encourage investors to review our consolidated financial statements in their entirety and not rely on any single financial measure. Reconciliations of the non-GAAP measures used in this press release are included in the attached tables. 

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," "outlook," "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 31, 2022, as filed with the SEC, and any factors discussed in the section entitled "Risk Factors" in any of our subsequently filed SEC filings; and the following:

  • our dependence on the construction industry and the strength of the local economies in which we operate, including residential;
  • 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 and portfolio optimization 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;
  • the impact of rising interest rates, and diminished liquidity and credit availability in the market generally;
  • declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities, the federal government and other state agencies particularly;
  • 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;
  • 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 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;
  • costs associated with pending and future litigation;
  • interruptions in our information technology systems and infrastructure; including cybersecurity and data leakage risks;
  • potential labor disputes, strikes, other forms of work stoppage or other union activities; and
  • the impact of the COVID-19 pandemic and responses to it, including vaccine mandates, or any similar crisis, on our 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 1,


July 2,


July 1,


July 2,



2023


2022


2023


2022

Revenue:









Product


$       595,714


$       542,939


$       967,886


$       898,608

Service


84,659


88,979


119,757


125,805

Net revenue


680,373


631,918


1,087,643


1,024,413

Delivery and subcontract revenue


48,777


54,636


76,895


83,088

Total revenue


729,150


686,554


1,164,538


1,107,501

Cost of revenue (excluding items shown separately below):









Product


377,634


360,356


673,515


650,701

Service


65,992


69,213


96,030


103,796

Net cost of revenue


443,626


429,569


769,545


754,497

Delivery and subcontract cost


48,777


54,636


76,895


83,088

Total cost of revenue


492,403


484,205


846,440


837,585

General and administrative expenses


55,550


47,651


101,912


99,575

Depreciation, depletion, amortization and accretion


54,787


47,157


105,681


98,350

Gain on sale of property, plant and equipment


(3,223)


(3,695)


(3,653)


(4,950)

Operating income


129,633


111,236


114,158


76,941

Interest expense


27,902


20,599


55,322


40,748

Loss on debt financings




493


Tax receivable agreement expense



954



954

Gain on sale of businesses



(156,053)



(170,258)

Other income, net


(5,478)


(977)


(11,188)


(1,673)

Income from operations before taxes


107,209


246,713


69,531


207,170

Income tax expense


22,481


53,947


16,015


49,204

Net income


84,728


192,766


53,516


157,966

Net loss attributable to Summit Holdings (1)


1,091


2,653


683


2,145

Net income attributable to Summit Inc.


$         83,637


$       190,113


$         52,833


$       155,821

Earnings per share of Class A common stock:









Basic


$              0.70


$              1.58


$              0.44


$              1.29

Diluted


$              0.70


$              1.58


$              0.44


$              1.28

Weighted average shares of Class A common stock:









Basic


118,931,914


120,222,094


118,805,785


120,569,387

Diluted


119,393,709


120,660,721


119,431,604


121,374,168

________________________________________________________

(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 1,


December 31,



2023


2022



(unaudited)


(audited)

Assets





Current assets:





Cash and cash equivalents


$     230,010


$     520,451

Accounts receivable, net


370,504


256,669

Costs and estimated earnings in excess of billings


35,315


6,510

Inventories


246,275


212,491

Other current assets


22,336


20,787

Current assets held for sale


1,862


1,468

Total current assets


906,302


1,018,376

Property, plant and equipment, less accumulated depreciation, depletion and amortization
(July 1, 2023 - $1,352,008 and December 31, 2022 - $1,267,557)


1,979,986


1,813,702

Goodwill


1,228,468


1,132,546

Intangible assets, less accumulated amortization (July 1, 2023 - $17,321 and December 31, 2022
- $15,503)


69,714


71,384

Deferred tax assets, less valuation allowance (July 1, 2023 - $1,113 and December 31, 2022
- $1,113)


126,817


136,986

Operating lease right-of-use assets


36,013


37,889

Other assets


48,187


44,809

Total assets


$ 4,395,487


$ 4,255,692

Liabilities and Stockholders' Equity





Current liabilities:





Current portion of debt


$         5,096


$         5,096

Current portion of acquisition-related liabilities


7,243


13,718

Accounts payable


171,221


104,031

Accrued expenses


148,660


119,967

Current operating lease liabilities


7,707


7,296

Billings in excess of costs and estimated earnings


7,054


5,739

Total current liabilities


346,981


255,847

Long-term debt


1,487,289


1,488,569

Acquisition-related liabilities


23,503


29,051

Tax receivable agreement liability


322,624


327,812

Noncurrent operating lease liabilities


33,563


35,737

Other noncurrent liabilities


107,563


106,686

Total liabilities


2,321,523


2,243,702

Stockholders' equity:





Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized,
118,886,274 and 118,408,655 shares issued and outstanding as of July 1, 2023 and
December 31, 2022, respectively


1,190


1,185

Class B common stock, par value $0.01 per share; 250,000,000 shares authorized,
99 shares issued and outstanding as of July 1, 2023 and December 31, 2022



Additional paid-in capital


1,409,364


1,404,122

Accumulated earnings


643,728


590,895

Accumulated other comprehensive income


6,326


3,084

Stockholders' equity


2,060,608


1,999,286

Noncontrolling interest in Summit Holdings


13,356


12,704

Total stockholders' equity


2,073,964


2,011,990

Total liabilities and stockholders' equity


$ 4,395,487


$ 4,255,692

  

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

($ in thousands)




Six months ended



July 1,


July 2,



2023


2022

Cash flows from operating activities:





Net income


$       53,516


$     157,966

Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation, depletion, amortization and accretion


110,659


107,511

Share-based compensation expense


9,924


10,156

Net gain on asset and business disposals


(3,655)


(174,902)

Non-cash loss on debt financings


161


Change in deferred tax asset, net


9,350


44,160

Other


(21)


(357)

Decrease (increase) in operating assets, net of acquisitions and dispositions:





Accounts receivable, net


(101,119)


(57,797)

Inventories


(27,115)


(58,092)

Costs and estimated earnings in excess of billings


(28,760)


(36,165)

Other current assets


(1,070)


(2,130)

Other assets


1,732


(593)

(Decrease) increase in operating liabilities, net of acquisitions and dispositions:





Accounts payable


52,157


39,602

Accrued expenses


19,048


(11,108)

Billings in excess of costs and estimated earnings


1,299


(737)

Tax receivable agreement liability


(531)


954

Other liabilities


(1,533)


(2,214)

Net cash provided by operating activities


94,042


16,254

Cash flows from investing activities:





Acquisitions, net of cash acquired


(237,666)


(1,933)

Purchases of property, plant and equipment


(126,893)


(129,580)

Proceeds from the sale of property, plant and equipment


5,760


5,427

Proceeds from sale of businesses



341,741

Other


(1,852)


(1,098)

Net cash (used in) provided by investing activities


(360,651)


214,557

Cash flows from financing activities:





Debt issuance costs


(1,566)


Payments on debt


(6,720)


(86,821)

Payments on acquisition-related liabilities


(11,539)


(11,577)

Distributions from partnership



(25)

Repurchases of common stock



(47,509)

Proceeds from stock option exercises


84


123

Other


(4,838)


(187)

Net cash used in financing activities


(24,579)


(145,996)

Impact of foreign currency on cash


747


(461)

Net (decrease) increase in cash


(290,441)


84,354

Cash and cash equivalents—beginning of period


520,451


380,961

Cash and cash equivalents—end of period


$     230,010


$     465,315

  

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Revenue Data by Segment and Line of Business

($ in thousands)




Three months ended


Six months ended



July 1,


July 2,


July 1,


July 2,



2023


2022


2023


2022

Segment Net Revenue:









West


$   400,038


$   352,510


$   634,408


$   588,512

East


168,460


185,757


287,243


296,025

Cement


111,875


93,651


165,992


139,876

Net Revenue


$   680,373


$   631,918


$  1,087,643


$  1,024,413










Line of Business - Net Revenue:









Materials









Aggregates


$   182,512


$   161,480


$   326,165


$   284,873

Cement (1)


103,607


86,815


152,620


129,369

Products


309,595


294,644


489,101


484,366

Total Materials and Products


595,714


542,939


967,886


898,608

Services


84,659


88,979


119,757


125,805

Net Revenue


$   680,373


$   631,918


$  1,087,643


$  1,024,413










Line of Business - Net Cost of Revenue:









Materials









Aggregates


$      84,713


$      74,789


$   178,048


$   153,398

Cement


44,568


41,323


88,403


84,808

Products


243,854


241,098


401,095


408,751

Total Materials and Products


373,135


357,210


667,546


646,957

Services


70,491


72,359


101,999


107,540

Net Cost of Revenue


$   443,626


$   429,569


$   769,545


$   754,497










Line of Business - Adjusted Cash Gross Profit (2):









Materials









Aggregates


$      97,799


$      86,691


$   148,117


$   131,475

Cement (3)


59,039


45,492


64,217


44,561

Products


65,741


53,546


88,006


75,615

Total Materials and Products


222,579


185,729


300,340


251,651

Services


14,168


16,620


17,758


18,265

Adjusted Cash Gross Profit


$   236,747


$   202,349


$   318,098


$   269,916










Adjusted Cash Gross Profit Margin (2)









Materials









Aggregates


53.6 %


53.7 %


45.4 %


46.2 %

Cement (3)


52.8 %


48.6 %


38.7 %


31.9 %

Products


21.2 %


18.2 %


18.0 %


15.6 %

Services


16.7 %


18.7 %


14.8 %


14.5 %

Total Adjusted Cash Gross Profit Margin


34.8 %


32.0 %


29.2 %


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 1, 2023


July 2, 2022


July 1, 2023


July 2, 2022

Aggregates (tons)


16,396


16,820


28,968


30,223

Cement (tons)


703


705


1,041


1,046

Ready-mix concrete (cubic yards)


1,333


1,394


2,284


2,635

Asphalt (tons)


1,096


1,321


1,420


1,582












Three months ended


Six months ended

Pricing


July 1, 2023


July 2, 2022


July 1, 2023


July 2, 2022

Aggregates (per ton)


$     13.65


$     11.92


$       13.56


$       11.58

Cement (per ton)


149.10


128.57


148.55


128.52

Ready-mix concrete (per cubic yards)


149.91


131.63


148.41


129.45

Asphalt (per ton)


83.90


71.16


83.54


70.33












Three months ended


Six months ended



Percentage Change in


Percentage Change in

Year over Year Comparison


Volume


Pricing


Volume


Pricing

Aggregates (per ton)


(2.5) %


14.5 %


(4.2) %


17.1 %

Cement (per ton)


(0.3) %


16.0 %


(0.5) %


15.6 %

Ready-mix concrete (per cubic yards)


(4.4) %


13.9 %


(13.3) %


14.6 %

Asphalt (per ton)


(17.0) %


17.9 %


(10.2) %


18.8 %












Three months ended


Six months ended



Percentage Change in


Percentage Change in

Year over Year Comparison (Excluding acquisitions & divestitures)


Volume


Pricing


Volume


Pricing

Aggregates (per ton)


(2.0) %


14.4 %


(2.6) %


17.0 %

Cement (per ton)


(0.3) %


16.0 %


(0.5) %


15.6 %

Ready-mix concrete (per cubic yards)


(11.0) %


13.7 %


(14.8) %


14.4 %

Asphalt (per ton)


2.1 %


15.0 %


8.5 %


16.0 %

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Reconciliations of Gross Revenue to Net Revenue by Line of Business

($ and Units in thousands, except pricing information)




Three months ended July 1, 2023







Gross Revenue


Intercompany


Net



Volumes


Pricing


by Product 


Elimination/Delivery 


Revenue 

Aggregates


16,396


$       13.65


$            223,727


$                           (41,215)


$               182,512

Cement


703


149.10


104,889


(1,282)


103,607

Materials






$            328,616


$                           (42,497)


$               286,119

Ready-mix concrete


1,333


149.91


199,826


(256)


199,570

Asphalt


1,096


83.90


91,926


(118)


91,808

Other Products






92,275


(74,058)


18,217

Products






$            384,027


$                           (74,432)


$               309,595

























Six months ended July 1, 2023







Gross Revenue


Intercompany


Net



Volumes


Pricing


by Product 


Elimination/Delivery 


Revenue 

Aggregates


28,968


$       13.56


$            392,664


$                           (66,499)


$               326,165

Cement


1,041


148.55


154,631


(2,011)


152,620

Materials






$            547,295


$                           (68,510)


$               478,785

Ready-mix concrete


2,284


148.41


338,970


(622)


338,348

Asphalt


1,420


83.54


118,643


(199)


118,444

Other Products






162,512


(130,203)


32,309

Products






$            620,125


$                         (131,024)


$               489,101

 

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 and six months ended July 1, 2023 and July 2, 2022.


Reconciliation of Net Income (Loss) to Adjusted EBITDA


Three months ended July 1, 2023

by Segment


West


East


Cement


Corporate


Consolidated

($ in thousands)











Net income (loss)


$     78,354


$    34,648


$     47,871


$ (76,145)


$     84,728

Interest (income) expense


(3,378)


(2,890)


(4,890)


39,060


27,902

Income tax expense


1,478




21,003


22,481

Depreciation, depletion and amortization


27,884


15,254


9,870


1,034


54,042

EBITDA


$   104,338


$    47,012


$     52,851


$ (15,048)


$   189,153

Accretion


260


464


21



745

Non-cash compensation





5,216


5,216

Other


(81)


141



(3,429)


(3,369)

Adjusted EBITDA


$   104,517


$    47,617


$     52,872


$ (13,261)


$   191,745

Adjusted EBITDA Margin (1)


26.1 %


28.3 %


47.3 %




28.2 %












Reconciliation of Net Income to Adjusted EBITDA


Three months ended July 2, 2022

by Segment


West


East


Cement


Corporate


Consolidated

($ in thousands)











Net income


$     65,606


$    64,089


$     38,641


$    24,430


$   192,766

Interest (income) expense


(4,035)


(2,714)


(4,860)


32,208


20,599

Income tax expense


987




52,960


53,947

Depreciation, depletion and amortization


21,779


14,523


9,383


770


46,455

EBITDA


$     84,337


$    75,898


$     43,164


$  110,368


$   313,767

Accretion


233


392


77



702

Tax receivable agreement expense





954


954

Gain on sale of businesses



(29,452)



(126,601)


(156,053)

Non-cash compensation





4,734


4,734

Other


74


(144)




(70)

Adjusted EBITDA


$     84,644


$    46,694


$     43,241


$ (10,545)


$   164,034

Adjusted EBITDA Margin (1)


24.0 %


25.1 %


46.2 %




26.0 %












Reconciliation of Net Income (Loss) to Adjusted EBITDA


Six months ended July 1, 2023

by Segment


West


East


Cement


Corporate


Consolidated

($ in thousands)











Net income (loss)


$     87,276


$    40,586


$     44,846


$  (119,192)


$     53,516

Interest (income) expense


(6,709)


(5,652)


(9,853)


77,536


55,322

Income tax expense


2,217




13,798


16,015

Depreciation, depletion and amortization


54,007


30,351


17,850


2,022


104,230

EBITDA


$   136,791


$    65,285


$     52,843


$ (25,836)


$   229,083

Accretion


510


902


39



1,451

Loss on debt financings





493


493

Non-cash compensation





9,924


9,924

Other


(106)


282



(8,181)


(8,005)

Adjusted EBITDA


$   137,195


$    66,469


$     52,882


$ (23,600)


$   232,946

Adjusted EBITDA Margin (1)


21.6 %


23.1 %


31.9 %




21.4 %












Reconciliation of Net Income (Loss) to Adjusted EBITDA


Six months ended July 2, 2022

by Segment


West


East


Cement


Corporate


Consolidated

($ in thousands)











Net income (loss)


$     77,507


$    71,455


$     30,210


$ (21,206)


$   157,966

Interest (income) expense


(8,005)


(6,165)


(9,822)


64,740


40,748

Income tax expense (benefit)


1,163


(106)



48,147


49,204

Depreciation, depletion and amortization


46,127


32,407


16,881


1,519


96,934

EBITDA


$   116,792


$    97,591


$     37,269


$    93,200


$   344,852

Accretion


460


803


153



1,416

Tax receivable agreement expense





954


954

Gain on sale of businesses



(43,657)



(126,601)


(170,258)

Non-cash compensation





10,156


10,156

Other


84


93




177

Adjusted EBITDA


$   117,336


$    54,830


$     37,422


$ (22,291)


$   187,297

Adjusted EBITDA Margin (1)


19.9 %


18.5 %


26.8 %




18.3 %

________________________________________________

(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 1, 2023 and July 2, 2022. 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 1, 2023


July 2, 2022


July 1, 2023


July 2, 2022

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.


$      83,637


$        0.70


$    190,113


$        1.57


$      52,833


$        0.44


$    155,821


$        1.28

Adjustments:

















Net income attributable to noncontrolling interest


1,091


0.01


2,653


0.02


683


0.01


2,145


0.02

Gain on sale of businesses, net of tax




(121,935)


(1.01)




(127,569)


(1.05)

Loss on debt financings






493




Adjusted diluted net income before tax related adjustments


84,728


0.71


70,831


0.58


54,009


0.45


30,397


0.25

Tax receivable agreement expense




954


0.01




954


0.01

Adjusted diluted net income


$      84,728


$        0.71


$      71,785


$        0.59


$      54,009


$        0.45


$      31,351


$        0.26

Weighted-average shares:

















Basic Class A common stock


118,848,214




120,078,273




118,706,385




120,417,414



LP Units outstanding


1,310,004




1,314,006




1,310,630




1,314,006



Total equity units


120,158,218




121,392,279




120,017,015




121,731,420



 

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 1, 2023 and July 2, 2022.  



Three months ended


Six months ended



July 1,


July 2,


July 1,


July 2,

Reconciliation of Operating Income to Adjusted Cash Gross Profit


2023


2022


2023


2022

($ in thousands)









Operating income


$   129,633


$   111,236


$   114,158


$      76,941

General and administrative expenses


55,550


47,651


101,912


99,575

Depreciation, depletion, amortization and accretion


54,787


47,157


105,681


98,350

Gain on sale of property, plant and equipment


(3,223)


(3,695)


(3,653)


(4,950)

Adjusted Cash Gross Profit (exclusive of items shown separately)


$   236,747


$   202,349


$   318,098


$   269,916

Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1)


34.8 %


32.0 %


29.2 %


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 1, 2023 and July 2, 2022. 



Three months ended


Six months ended



July 1,


July 2,


July 1,


July 2,

($ in thousands)


2023


2022


2023


2022

Net income


$       84,728


$     192,766


$       53,516


$     157,966

Non-cash items


75,986


(50,041)


126,418


(13,432)

Net income adjusted for non-cash items


160,714


142,725


179,934


144,534

Change in working capital accounts


(67,007)


(109,758)


(85,892)


(128,280)

Net cash provided by operating activities


93,707


32,967


94,042


16,254

Capital expenditures, net of asset sales


(59,326)


(67,818)


(121,133)


(124,153)

Free cash flow


$       34,381


$     (34,851)


$     (27,091)


$   (107,899)

 

Contact:
Andy Larkin
VP, Investor Relations
andy.larkin@summit-materials.com
720-618-6013

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/summit-materials-inc-reports-second-quarter-2023-results-301892034.html

SOURCE Summit Materials, Inc.

Summit Materials, Inc.

NYSE:SUM

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SUM Stock Data

8.48B
119.56M
31.91%
71.05%
2.12%
Building Materials
Mining & Quarrying of Nonmetallic Minerals (no Fuels)
Link
United States of America
DENVER