Summit Materials, Inc. Reports Second Quarter 2024 Results

Rhea-AI Summary

Summit Materials, Inc. (NYSE: SUM) reported strong Q2 2024 results, with net revenue up 58.1% to $1.08 billion and net income increasing 25.2% to $106.1 million. Despite weather-related disruptions, the company saw positive pricing momentum across all business lines and ongoing cost savings initiatives. Summit reaffirmed its 2024 guidance, projecting Adjusted EBITDA between $970 million and $1,010 million.

Key highlights include:

• Operating income up 33.4% to $172.9 million
• Adjusted EBITDA increased 54.5% to $296.2 million
• On track to generate at least $40 million in Argos USA synergies
• Capital expenditures expected to range from $430 million to $470 million

CEO Anne Noonan expressed confidence in Summit's ability to capitalize on a constructive pricing environment and drive operational improvements to deliver significant shareholder value.

Positive

• Net revenue increased by 58.1% to $1.08 billion
• Net income rose by 25.2% to $106.1 million
• Adjusted EBITDA grew by 54.5% to $296.2 million
• Positive pricing momentum across all business lines
• On track to generate at least $40 million in Argos USA synergies
• Reaffirmed 2024 Adjusted EBITDA guidance of $970 million to $1,010 million

Negative

• Basic EPS decreased by 14.3% to $0.60
• Adjusted Diluted EPS declined by 7.0% to $0.66
• Weather-related disruptions impacted operations

Financial Analyst

Summit Materials' Q2 2024 results demonstrate strong financial performance despite weather-related challenges. Key highlights include:

• Net revenue up 58.1% to $1.08 billion
• Operating income increased 33.4% to $172.9 million
• Adjusted EBITDA grew 54.5% to $296.2 million

The company's ability to maintain its 2024 Adjusted EBITDA guidance of $970 million to $1.01 billion is particularly noteworthy. This stability, coupled with ongoing synergies from the Argos USA acquisition and positive pricing momentum, suggests a resilient business model capable of navigating market uncertainties.

However, investors should note the 14.3% decrease in Basic EPS and 7.0% drop in Adjusted Diluted EPS, which may indicate some pressure on per-share profitability. This could be due to increased shares outstanding or higher costs associated with integration efforts.

Market Research Analyst

Summit Materials' Q2 results reflect a positive industry outlook for aggregates and cement. The company's ability to achieve price increases across all business lines suggests strong demand and pricing power in the construction materials sector. This aligns with broader trends in infrastructure spending and construction activity.

The successful integration of Argos USA is a key strategic win, with synergies on track to deliver at least $40 million in value. This acquisition has significantly expanded Summit's footprint and market position, potentially providing a competitive edge in securing large-scale projects.

Investors should monitor the "uneven demand environment" mentioned by management, as it could signal regional variations or potential headwinds in certain market segments. The company's focus on cost savings and operational improvements appears to be a prudent strategy to navigate these challenges and drive margin expansion.

Construction Industry Expert

Summit Materials' Q2 performance underscores the resilience of the construction materials sector. Despite weather-related disruptions, which often plague this industry, the company managed to deliver strong results. This demonstrates effective operational management and the benefits of geographic diversification.

The sustained growth in aggregates is particularly noteworthy, as it's a key indicator of overall construction activity. Aggregates are essential for both public infrastructure projects and private construction, suggesting broad-based demand across multiple end markets.

The company's capital expenditure guidance of $430 million to $470 million for 2024 indicates ongoing investment in capacity and efficiency improvements. This level of CapEx, representing about 10-11% of projected revenues, is typical for the industry and necessary to maintain competitive positioning and support future growth.

Argos USA Synergies On Track

Sustained Aggregates Growth

Reaffirming 2024 Guidance Range

DENVER, Aug. 5, 2024 /PRNewswire/ -- Summit Materials, Inc. (NYSE: SUM) ("Summit," "Summit Materials," "Summit Inc." or the "Company"), a market-leading producer of aggregates and cement company, today announced results for the second quarter ended June 29, 2024. All comparisons are versus the quarter ended July 1, 2023 unless noted otherwise.

		Three months ended
($ in thousands, except per share amounts)		June 29, 2024		July 1, 2023		% Chg vs. PY
Net revenue		$ 1,075,471		$     680,373		58.1 %
Operating income		172,896		129,633		33.4 %
Net income		106,075		84,728		25.2 %
Basic EPS		$           0.60		$           0.70		(14.3) %
Adjusted Cash Gross Profit		368,253		236,747		55.5 %
Adjusted EBITDA		296,166		191,745		54.5 %
Adjusted Diluted EPS		$           0.66		$           0.71		(7.0) %

"We are pleased and proud to report that our teams safely and successfully managed through weather-related disruptions to deliver a strong quarter of strategic execution and solid financial results," remarked Anne Noonan, Summit Materials President and CEO. "Our resilient performance was supported by positive pricing momentum across all lines of business, ongoing cost savings initiatives underway across our network, and a more durable portfolio. As a result, our 2024 financial targets are virtually unchanged. Namely, we are still on track to generate at least $40 million dollars of Argos USA synergies, drive significant pro forma margin expansion this year, and confidently deliver 2024 Adjusted EBITDA within our previous guidance range. Without question, Summit Materials is well positioned to capitalize on a constructive pricing environment and tap operation improvements across our enterprise to profitably grow in an uneven demand environment.  This growth, together with a fortified and capable balance sheet will help generate significant shareholder value this year and the years ahead. Our team remains focused on controlling what we can, acting with agility, and delivering on all of our 2024 stakeholder commitments." 

2024 Guidance

For the full year 2024, Summit is reaffirming its Adjusted EBITDA range of approximately $970 million to $1,010 million and its 2024 capital expenditures range of approximately $430 million to $470 million.

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 2024 | Total Company Results

Net revenue increased $395.1 million, or 58.1%, in the second quarter to $1,075.5 million. In the quarter, $464.0 million of net revenue was due to acquisitions, primarily the Argos USA transaction. Divestitures decreased net revenue by $46.6 million in the period. All lines of business experienced organic pricing growth.

Operating income increased in the second quarter by 33.4%  to $172.9 million largely due to the Argos USA transaction. Summit's operating margin percentage for the three months ended June 29, 2024, decreased to 16.1% from 19.1%.

Net income attributable to Summit Inc. increased to $106.1 million, or $0.60 per basic share, compared to $83.6 million, or $0.70 per basic share in the prior year period. Summit reported adjusted diluted net income of $115.2 million, or $0.66 per adjusted diluted share, compared to an adjusted diluted net income of $84.7 million, or $0.71 per adjusted diluted share, in the prior year period. 

Adjusted EBITDA increased $104.4 million, or 54.5%, to $296.2 million reflecting the contribution from the Argos USA assets, continued pricing gains, and operational improvements across the enterprise, including integration synergies.

Second Quarter 2024 | Results by Line of Business

Aggregates Business: Aggregates net revenues increased by $4.6 million to $187.1 million in the second quarter. Aggregates adjusted cash gross profit margin expanded to 54.1% in the second quarter as compared to 53.6% in the prior year period, reflecting strong commercial and operational execution. Aggregates sales volume decreased 10.0% in the second quarter. Organic aggregates sales volumes decreased 9.4% as a result of wet weather conditions and restrained private end-market activity. Average selling prices for aggregates increased 11.8%, with organic pricing increasing 10.8%. Pricing growth was strong throughout the footprint and led by the East Segment, which increased 14.8% versus the prior year period.  

Cement Business: Cement Segment net revenues increased to $324.8 million in the second quarter. Cement Segment adjusted cash gross profit margin decreased to 49.4% in the second quarter, compared to 52.8% in the prior year period, due primarily to margin mix impacts from inclusion of the Argos USA assets. Sales volume of cement increased 238.0%. Organic sales volumes decreased 16.5% due to reduced import volume in the River Markets and moderating demand conditions. Organic average selling prices increased 7.3% in the second quarter, primarily reflecting traction from increases implemented earlier in the year. 

Products Business: Products net revenues were $495.5 million in the second quarter, up 60.0% versus the prior year period. Products adjusted cash gross profit margin decreased to 17.3% in the second quarter. Organic average sales price for ready-mix concrete increased 5.6%, with pricing growth in both segments. Organic sales volumes of ready-mix concrete decreased 14.9% due to adverse weather conditions in Houston and restrained private end-market activity. Organic average selling prices for asphalt increased 0.5%. Organic sales volume decreased 6.6%, driven, in part, by unfavorable timing on activity. 

Second Quarter 2024 | Results By Reporting Segment

West Segment: The West Segment operating income decreased $3.9 million to $70.7 million. Adjusted EBITDA decreased $2.9 million, or  2.8%, to $101.6 million in the second quarter largely reflecting unfavorable weather conditions in the Houston market. Aggregates revenue decreased 4.9%, driven by a volume decline of 12.2%. Pricing grew 8.3% over the prior period led by double-digit growth in Houston and Arizona markets. Ready-mix concrete revenue increased 16.7% on 3.8% pricing growth and 12.4% volume growth. Organic ready-mix pricing increased 5.3%. Subdued private construction activity drove organic ready-mix volumes down 13.9% in the period. Asphalt revenue decreased 6.1% reflecting a volume decline of 6.6% while pricing remained relatively flat.

East Segment: The East Segment operating income increased $15.3 million to $46.9 million and Adjusted EBITDA increased $22.9 million to $70.6 million. Aggregates revenue increased 6.0% versus the prior year period driven by strong pricing. Organic aggregates volumes decreased 8.9%, with softness in Kansas and Missouri markets that more than offset growth in Georgia and the Carolinas. Aggregates pricing increased 14.8% with most markets realizing double-digit growth. Ready-mix concrete revenue increased $164.7 million to $191.9 million due to the acquisition of the Argos USA ready-mix concrete operations in Florida, Georgia, and the Carolinas. Asphalt revenue decreased $9.2 million versus the prior year period due to divestiture of certain asphalt assets.   

Cement Segment: The Cement Segment operating income increased 113.8% to $92.0 million. Adjusted EBITDA increased $87.9 million, primarily from the Argos USA transaction. Adjusted EBITDA margin decreased to 43.3% from 47.3% in the year-ago period due to margin mix from inclusion of the Argos USA cement assets and planned maintenance at certain cement plants. As noted above, the Cement Segment reported an organic volume decrease of 16.5% and organic selling price growth of 7.3%.

Liquidity and Capital Resources

As of June 29, 2024, the Company had $538.7 million in cash and $2.8 billion in debt outstanding. The Company's $625 million revolving credit facility has $592.7 million available after outstanding letters of credit. 

For the six months ended  June 29, 2024, cash flow provided by operations was $111.4 million and cash paid for capital expenditures was $176.0 million.

As of June 29, 2024, approximately $149.0 million remained available for share repurchases under the share repurchase program.

Webcast and Conference Call Information

Summit Materials will conduct a conference call on Tuesday, August 6, 2024, at 12:00 p.m. eastern time (10:00 a.m. mountain time) to review the Company's second quarter 2024 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 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/766164594 

To participate in the live teleconference for second quarter 2024 financial results:

North America Toll-Free:                 1-888-330-3416
International Toll:                              1-646-960-0820  
Conference ID:                                   1542153
Password:                                            Summit

To listen to a replay of the teleconference, which will be available through August 13, 2024:

US & Canada Toll-Free:                     1-800-770-2030
Conference ID:                                   1542153

About Summit Materials

Summit Materials is a market-leading producer of aggregates and cement with vertically integrated operations that supply ready-mix concrete and asphalt in select markets. Summit is a geographically diverse, materials-led business of scale that offers customers in the United States and British Columbia, Canada high quality products and services for the public infrastructure, residential and non-residential end markets. Summit has a strong track record of successful acquisitions since its founding and continues to pursue high-return 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 (Loss), 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 (Loss), 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, Adjusted EBITDA Margin and other non-GAAP measures 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 (Loss), 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 30, 2023, and Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2024, each 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;
• risks related to the integration of Argos USA and realization of intended benefits within the intended timeframe;
• our ability to execute on our acquisition strategy and portfolio optimization strategy and, successfully integrate acquisitions with our existing operations;
• our dependence on securing and permitting aggregate reserves in strategically located areas;
• the impact of rising interest rates;
• 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 and safety 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;
• 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;
• potential incurrence of substantially more debt;
• restrictive covenants in the instruments governing our debt obligations;
• our dependence on senior management and other key personnel, and our ability to retain 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;
• evolving corporate governance and corporate disclosure regulations and expectations, including with respect to environmental, social and governance matters;
• unexpected operational failures or 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
• material or adverse effects related to the Argos USA combination.

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
		June 29,		July 1,		June 29,		July 1,
		2024		2023		2024		2023
Revenue:
Product		$       993,741		$       595,714		$    1,722,435		$       967,886
Service		81,730		84,659		126,265		119,757
Net revenue		1,075,471		680,373		1,848,700		1,087,643
Delivery and subcontract revenue		42,791		48,777		74,577		76,895
Total revenue		1,118,262		729,150		1,923,277		1,164,538
Cost of revenue (excluding items shown separately below):
Product		650,088		377,634		1,206,108		673,515
Service		57,130		65,992		93,335		96,030
Net cost of revenue		707,218		443,626		1,299,443		769,545
Delivery and subcontract cost		42,791		48,777		74,577		76,895
Total cost of revenue		750,009		492,403		1,374,020		846,440
General and administrative expenses		83,875		53,838		152,401		99,836
Depreciation, depletion, amortization and accretion		104,397		54,787		200,368		105,681
Transaction and integration costs		10,265		1,712		72,473		2,076
Gain on sale of property, plant and equipment		(3,180)		(3,223)		(4,028)		(3,653)
Operating income		172,896		129,633		128,043		114,158
Interest expense		52,849		27,902		104,741		55,322
Loss on debt financings		—		—		5,453		493
Gain on sale of businesses		(3,758)		—		(18,743)		—
Other income, net		(8,086)		(5,478)		(16,964)		(11,188)
Income from operations before taxes		131,891		107,209		53,556		69,531
Income tax expense		25,816		22,481		14,751		16,015
Net income		106,075		84,728		38,805		53,516
Net income attributable to Summit Holdings (1)		—		1,091		(404)		683
Net income attributable to Summit Inc.		$       106,075		$         83,637		$         39,209		$         52,833
Earnings per share of Class A common stock:
Basic		$              0.60		$              0.70		$              0.23		$              0.44
Diluted		$              0.60		$              0.70		$              0.23		$              0.44
Weighted average shares of Class A common stock:
Basic		175,550,487		118,931,914		171,531,031		118,805,785
Diluted		176,132,001		119,393,709		172,308,044		119,431,604

________________________________________________________
(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)
		June 29,		December 30,
		2024		2023
		(unaudited)		(audited)
Assets
Current assets:
Cash and cash equivalents		$     538,708		$     374,162
Restricted cash		—		800,000
Accounts receivable, net		550,093		287,252
Costs and estimated earnings in excess of billings		33,948		10,289
Inventories		349,099		241,350
Other current assets		28,461		17,937
Current assets held for sale		446		1,134
Total current assets		1,500,755		1,732,124
Property, plant and equipment, less accumulated depreciation, depletion and amortization (June 29, 2024 - $1,509,453 and December 30, 2023 - $1,399,468)		4,354,088		1,976,820
Goodwill		2,093,010		1,224,861
Intangible assets, less accumulated amortization (June 29, 2024 - $39,586 and December 30, 2023 - $18,972)		168,282		68,081
Deferred tax assets, less valuation allowance (June 29, 2024 - $1,113 and December 30, 2023 - $1,113)		—		52,009
Operating lease right-of-use assets		89,360		36,553
Other assets		108,497		59,134
Total assets		$ 8,313,992		$ 5,149,582
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of debt		$         7,575		$         3,822
Current portion of acquisition-related liabilities		8,987		7,007
Accounts payable		282,091		123,621
Accrued expenses		250,355		171,691
Current operating lease liabilities		17,217		8,596
Billings in excess of costs and estimated earnings		7,635		8,228
Total current liabilities		573,860		322,965
Long-term debt		2,771,463		2,283,639
Acquisition-related liabilities		21,217		28,021
Tax receivable agreement liability		47,667		41,276
Deferred tax liabilities		189,138		15,854
Noncurrent operating lease liabilities		77,326		33,230
Other noncurrent liabilities		300,577		108,017
Total liabilities		3,981,248		2,833,002
Stockholders' equity:
Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 175,586,471 and 119,529,380 shares issued and outstanding as of June 29, 2024 and December 30, 2023, respectively		1,757		1,196
Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 0 and 99 shares issued and outstanding as of June 29, 2024 and December 30, 2023, respectively		—		—
Preferred Stock, par value $0.01 per share; 250,000,000 shares authorized, 1 and 0 shares issued and outstanding as of June 29, 2024 and December 30, 2023, respectively		—		—
Additional paid-in capital		3,412,879		1,421,813
Accumulated earnings		915,960		876,751
Accumulated other comprehensive income		2,148		7,275
Stockholders' equity		4,332,744		2,307,035
Noncontrolling interest in Summit Holdings		—		9,545
Total stockholders' equity		4,332,744		2,316,580
Total liabilities and stockholders' equity		$ 8,313,992		$ 5,149,582

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
($ in thousands)
		Six months ended
		June 29,		July 1,
		2024		2023
Cash flows from operating activities:
Net income		$       38,805		$       53,516
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		206,668		110,659
Share-based compensation expense		14,133		9,924
Net gain on asset and business disposals		(22,773)		(3,655)
Non-cash loss on debt financings		5,453		161
Change in deferred tax asset, net		2,976		9,350
Other		1,163		(21)
Decrease (increase) in operating assets, net of acquisitions and dispositions:
Accounts receivable, net		(104,579)		(101,119)
Inventories		(11,552)		(27,115)
Costs and estimated earnings in excess of billings		(24,076)		(28,760)
Other current assets		2,509		(1,070)
Other assets		3,922		1,732
(Decrease) increase in operating liabilities, net of acquisitions and dispositions:
Accounts payable		7,700		52,157
Accrued expenses		(4,584)		19,048
Billings in excess of costs and estimated earnings		(144)		1,299
Tax receivable agreement (benefit) expense		6,227		(531)
Other liabilities		(10,444)		(1,533)
Net cash provided by operating activities		111,404		94,042
Cash flows from investing activities:
Acquisitions, net of cash acquired		(1,113,267)		(237,666)
Purchase of intellectual property		(21,400)		—
Purchases of property, plant and equipment		(175,960)		(126,893)
Proceeds from the sale of property, plant and equipment		14,217		5,760
Proceeds from sale of businesses		86,031		—
Other		(2,070)		(1,852)
Net cash used in investing activities		(1,212,449)		(360,651)
Cash flows from financing activities:
Proceeds from debt issuances		1,007,475		—
Debt issuance costs		(17,731)		(1,566)
Payments on debt		(509,765)		(6,720)
Payments on acquisition-related liabilities		(6,289)		(11,539)
Proceeds from stock option exercises		1,580		84
Other		(8,088)		(4,838)
Net cash provided by (used in) financing activities		467,182		(24,579)
Impact of foreign currency on cash		(1,591)		747
Net decrease in cash and cash equivalents and restricted cash		(635,454)		(290,441)
Cash and cash equivalents and restricted cash—beginning of period		1,174,162		520,451
Cash and cash equivalents and restricted cash—end of period		$     538,708		$     230,010

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Revenue Data by Segment and Line of Business
($ in thousands)
		Three months ended				Six months ended
		June 29,		July 1,		June 29,		July 1,
		2024		2023		2024		2023
Segment Net Revenue:
West		$   423,680		$   400,038		$   707,285		$   634,408
East		326,970		168,460		584,811		287,243
Cement		324,821		111,875		556,604		165,992
Net Revenue		$  1,075,471		$   680,373		$  1,848,700		$  1,087,643
Line of Business - Net Revenue:
Materials
Aggregates		$   187,100		$   182,512		$   332,611		$   326,165
Cement (1)		311,188		103,607		535,285		152,620
Products		495,453		309,595		854,539		489,101
Total Materials and Products		993,741		595,714		1,722,435		967,886
Services		81,730		84,659		126,265		119,757
Net Revenue		$  1,075,471		$   680,373		$  1,848,700		$  1,087,643
Line of Business - Net Cost of Revenue:
Materials
Aggregates		$      85,845		$      84,713		$   172,359		$   178,048
Cement		150,727		44,568		303,919		88,403
Products		409,658		243,854		724,603		401,095
Total Materials and Products		646,230		373,135		1,200,881		667,546
Services		60,988		70,491		98,562		101,999
Net Cost of Revenue		$   707,218		$   443,626		$  1,299,443		$   769,545
Line of Business - Adjusted Cash Gross Profit (2):
Materials
Aggregates		$   101,255		$      97,799		$   160,252		$   148,117
Cement (3)		160,461		59,039		231,366		64,217
Products		85,795		65,741		129,936		88,006
Total Materials and Products		347,511		222,579		521,554		300,340
Services		20,742		14,168		27,703		17,758
Adjusted Cash Gross Profit		$   368,253		$   236,747		$   549,257		$   318,098
Adjusted Cash Gross Profit Margin (2)
Materials
Aggregates		54.1 %		53.6 %		48.2 %		45.4 %
Cement (3)		49.4 %		52.8 %		41.6 %		38.7 %
Products		17.3 %		21.2 %		15.2 %		18.0 %
Services		25.4 %		16.7 %		21.9 %		14.8 %
Total Adjusted Cash Gross Profit Margin		34.2 %		34.8 %		29.7 %		29.2 %

________________________________________________________
(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		June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Aggregates (tons)		14,758		16,396		26,412		28,968
Cement (tons)		2,376		703		4,114		1,041
Ready-mix concrete (cubic yards)		2,376		1,333		4,273		2,284
Asphalt (tons)		911		1,096		1,231		1,420
		Three months ended				Six months ended
Pricing		June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Aggregates (per ton)		$     15.26		$     13.65		$     15.09		$     13.56
Cement (per ton)		153.43		149.10		152.87		148.55
Ready-mix concrete (per cubic yards)		165.51		149.91		165.10		148.41
Asphalt (per ton)		85.25		83.90		85.99		83.54
		Three months ended				Six months ended
		Percentage Change in				Percentage Change in
Year over Year Comparison		Volume		Pricing		Volume		Pricing
Aggregates (per ton)		(10.0) %		11.8 %		(8.8) %		11.3 %
Cement (per ton)		238.0 %		2.9 %		295.2 %		2.9 %
Ready-mix concrete (per cubic yards)		78.2 %		10.4 %		87.1 %		11.2 %
Asphalt (per ton)		(16.9) %		1.6 %		(13.3) %		2.9 %
		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)		(9.4) %		10.8 %		(8.8) %		10.6 %
Cement (per ton)		(16.5) %		7.3 %		(12.2) %		6.8 %
Ready-mix concrete (per cubic yards)		(14.9) %		5.6 %		(14.9) %		6.7 %
Asphalt (per ton)		(6.6) %		0.5 %		(2.8) %		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 June 29, 2024
						Gross Revenue		Intercompany		Net
		Volumes		Pricing		by Product		Elimination/Delivery		Revenue
Aggregates		14,758		$       15.26		$            225,148		$                           (38,048)		$               187,100
Cement		2,376		153.43		364,477		(53,289)		311,188
Materials						$            589,625		$                           (91,337)		$               498,288
Ready-mix concrete		2,376		165.51		393,294		(16)		393,278
Asphalt		911		85.25		77,701		(77)		77,624
Other Products						82,714		(58,163)		24,551
Products						$            553,709		$                           (58,256)		$               495,453
		Six months ended June 29, 2024
						Gross Revenue		Intercompany		Net
		Volumes		Pricing		by Product		Elimination/Delivery		Revenue
Aggregates		26,412		$       15.09		$            398,645		$                           (66,034)		$               332,611
Cement		4,114		152.87		628,969		(93,684)		535,285
Materials						$         1,027,614		$                         (159,718)		$               867,896
Ready-mix concrete		4,273		165.10		705,449		(124)		705,325
Asphalt		1,231		85.99		105,820		(211)		105,609
Other Products						154,468		(110,863)		43,605
Products						$            965,737		$                         (111,198)		$               854,539

 

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 and Adjusted EBITDA Margin by segment and on a consolidated basis for the three and six months ended June 29, 2024 and July 1, 2023.
Reconciliation of Net Income (Loss) to Adjusted EBITDA		Three months ended June 29, 2024
by Segment		West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income (loss)		$     82,939		$    51,434		$     98,787		$  (127,085)		$   106,075
Interest (income) expense		(7,734)		(5,408)		(6,286)		72,277		52,849
Income tax expense		1,300		—		—		24,516		25,816
Depreciation, depletion and amortization		29,824		22,841		48,224		2,490		103,379
EBITDA		$   106,329		$    68,867		$   140,725		$ (27,802)		$   288,119
Accretion		446		528		44		—		1,018
(Gain) loss on sale of businesses		(4,672)		914		—		—		(3,758)
Non-cash compensation		—		—		—		7,413		7,413
Argos USA acquisition and integration costs (2)		—		—		—		9,737		9,737
Other (3)		(518)		245		—		(6,090)		(6,363)
Adjusted EBITDA		$   101,585		$    70,554		$   140,769		$ (16,742)		$   296,166
Adjusted EBITDA Margin (1)		24.0 %		21.6 %		43.3 %				27.5 %
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 (3)		(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 (Loss) to Adjusted EBITDA		Six months ended June 29, 2024
by Segment		West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income (loss)		$   101,889		$    85,925		$   123,780		$  (272,789)		$     38,805
Interest (income) expense		(14,497)		(9,980)		(12,640)		141,858		104,741
Income tax expense (benefit)		1,809		—		—		12,942		14,751
Depreciation, depletion and amortization		59,718		45,400		88,887		4,337		198,342
EBITDA		$   148,919		$  121,345		$   200,027		$  (113,652)		$   356,639
Accretion		890		1,050		86		—		2,026
Loss on debt financings		—		—		—		5,453		5,453
Gain on sale of businesses		(3,828)		(14,915)		—		—		(18,743)
Non-cash compensation		—		—		—		14,133		14,133
Argos USA acquisition and integration costs (2)		—		62		110		70,859		71,031
Other (3)		(996)		488		—		(12,640)		(13,148)
Adjusted EBITDA		$   144,985		$  108,030		$   200,223		$ (35,847)		$   417,391
Adjusted EBITDA Margin (1)		20.5 %		18.5 %		36.0 %				22.6 %
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 (3)		(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 %

________________________________________________
(1) (2) (3)	Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of net revenue. The adjustment for acquisition and integration costs related to the Transaction is comprised of finder's fees, advisory, legal and professional fees incurred relating to the Transaction. Consists primarily of interest income earned on cash balances.

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 June 29, 2024 and July 1, 2023. 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
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
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.		$    106,075		$        0.60		$      83,637		$        0.70		$      39,209		$        0.23		$      52,833		$        0.44
Adjustments:
Net income (loss) attributable to noncontrolling interest		—		—		1,091		0.01		(404)		—		683		0.01
Argos USA acquisition and integration costs, net of tax		6,723		0.05		—		—		58,306		0.33		—		—
Loss (gain) on sale of businesses, net of tax		2,366		0.01		—		—		(7,333)		(0.04)		—		—
Loss on debt financings		—		—		—		—		5,453		0.03		493		—
Adjusted diluted net income		$    115,164		$        0.66		$      84,728		$        0.71		$      95,231		$        0.55		$      54,009		$        0.45
Weighted-average shares:
Basic Class A common stock		175,510,071				118,848,214				171,478,056				118,706,385
LP Units outstanding		—				1,310,004				255,783				1,310,630
Total equity units		175,510,071				120,158,218				171,733,839				120,017,015

The following table reconciles operating income to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the three and six months ended June 29, 2024 and July 1, 2023.  

		Three months ended				Six months ended
		June 29,		July 1,		June 29,		July 1,
Reconciliation of Operating Income to Adjusted Cash Gross Profit		2024		2023		2024		2023
($ in thousands)
Operating income		$   172,896		$   129,633		$   128,043		$   114,158
General and administrative expenses		83,875		53,838		152,401		99,836
Depreciation, depletion, amortization and accretion		104,397		54,787		200,368		105,681
Transaction and integration costs		10,265		1,712		72,473		2,076
Gain on sale of property, plant and equipment		(3,180)		(3,223)		(4,028)		(3,653)
Adjusted Cash Gross Profit (exclusive of items shown separately)		$   368,253		$   236,747		$   549,257		$   318,098
Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1)		34.2 %		34.8 %		29.7 %		29.2 %

_______________________________________________________
(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 June 29, 2024 and July 1, 2023. 

		Three months ended				Six months ended
		June 29,		July 1,		June 29,		July 1,
($ in thousands)		2024		2023		2024		2023
Net income		$     106,075		$       84,728		$       38,805		$       53,516
Non-cash items		123,233		75,986		207,620		126,418
Net income adjusted for non-cash items		229,308		160,714		246,425		179,934
Change in working capital accounts		(77,659)		(67,007)		(135,021)		(85,892)
Net cash provided by operating activities		151,649		93,707		111,404		94,042
Capital expenditures, net of asset sales		(105,888)		(59,326)		(161,743)		(121,133)
Free cash flow		$       45,761		$       34,381		$     (50,339)		$     (27,091)

Contact:

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

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SOURCE Summit Materials, Inc.

FAQ

What was Summit Materials' (SUM) net revenue for Q2 2024?

Summit Materials (SUM) reported net revenue of $1,075,471,000 for Q2 2024, representing a 58.1% increase from the same period last year.

How much did Summit Materials' (SUM) net income grow in Q2 2024?

Summit Materials' (SUM) net income grew by 25.2% to $106,075,000 in Q2 2024 compared to the same quarter in 2023.

What is Summit Materials' (SUM) Adjusted EBITDA guidance for 2024?

Summit Materials (SUM) reaffirmed its 2024 Adjusted EBITDA guidance range of approximately $970 million to $1,010 million.

How much in synergies does Summit Materials (SUM) expect from the Argos USA acquisition?

Summit Materials (SUM) is on track to generate at least $40 million in synergies from the Argos USA acquisition in 2024.