Summit Materials, Inc. Reports First Quarter 2021 Results

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 first quarter 2021.

For the three months ended April 3, 2021, the Company reported net loss attributable to Summit Inc. of $22.5 million, or $(0.19) per basic share, compared to net loss attributable to Summit Inc. of $45.0 million, or $(0.40) per basic share in the comparable prior year period. Summit reported adjusted diluted net loss of $38.9 million, or $(0.33) per adjusted diluted share as compared to adjusted diluted net loss of $56.3 million, or $(0.48) per adjusted diluted share in the prior year period.

Summit's net revenue increased $56.1 million, or 16.4% in the first quarter of 2021 to $398.5 million, compared to $342.4 million in the first quarter of 2020, on higher aggregates, ready-mix concrete, cement, asphalt and paving revenue relative to a year ago on strong demand in most markets.

The Company reported an operating loss of $25.1 million in the first quarter 2021, an improvement of 39.9%, compared to $41.7 million in the prior year period. Net revenue gains in all lines of business exceeded increases in costs of revenue and more than offset a $10.0 million increase in general and administrative expenses, which included $3.4 million in severance related costs and professional fees associated with optimizing organizational efficiencies. Summit's operating margin percentage for the three months ended April 3, 2021 increased to (6.3)% from (12.2)%, from the comparable period a year ago, due to the factors noted above.

Adjusted EBITDA increased in the first quarter to $41.7 million as compared to $15.7 million in the first quarter 2020.

For the three months ended April 3, 2021, sales volumes increased 20.7% in aggregates, 13.7% in cement, 7.6% in ready-mix concrete and 15.9% in asphalt relative to the same period last year on strong demand in most of our markets. Average selling prices in the first quarter of 2021 decreased 1.9% in aggregates, and increased 0.4% in cement, 3.7% in ready-mix concrete and 5.5% in asphalt. While most of Summit's geographies reported higher average selling prices for aggregates in the first quarter, slight changes in product mix in our Kansas and North Texas markets resulted in a lower company-wide average selling price than the year ago quarter. Adjusted cash gross profit for aggregates expanded to $49.1 million in the first quarter 2021, an increase of 34.0% relative to $36.6 million in the year ago quarter.

Anne Noonan, CEO of Summit Materials, commented, "After a strong finish to 2020, Summit has accelerated into 2021 with record first quarter Adjusted EBITDA. Migration activity continues to favor our rural and exurban markets and most of the state Departments of Transportation that we serve are on solid financial footing. We are in full implementation mode on our Elevate Summit strategy, and we are seeing early signs of success. In the first quarter we completed one strategic divestiture and made progress on others. We remain focused on sustainable growth with investments in greenfields and end markets that are underpinned by strong growth fundamentals."

As of April 3, 2021, the Company had $359.7 million in cash and $1.9 billion in debt outstanding. The Company's $345 million revolving credit facility has $329 million available after outstanding letters of credit. For the quarter ended April 3, 2021, cash flow used in operations was $21.3 million and cash paid for capital expenditures was $69.8 million.

Brian Harris, CFO of Summit Materials added, "Our Q1 2021 leverage ratio was steady from the prior quarter, which is the lowest first quarter leverage ratio in Summit's history, and a significant improvement from a year ago. Our leverage ratio typically increases in the first quarter, as Q1 typically has the lowest EBITDA contribution of the year, but that did not happen in Q1 2021 due to our excellent financial performance. Our Elevate Summit goal is less than 3x leverage, and we believe that is within our sights in 2021."

For the full year 2021, Summit has not made any changes to its outlook for Adjusted EBITDA of approximately $490 million to $520 million, but expects to revisit this forecast as the year progresses. The Company continues to expect 2021 capital expenditure guidance of approximately $200 million to $220 million including approximately $25 million to $35 million for greenfield projects.

Beginning in the first quarter of 2021, the Company is reporting fixed overhead expenses related to production in its cost of revenue to align more closely to industry peers. Previously, the Company reported fixed overhead expenses in its general and administrative costs.

First Quarter 2021 | Results by Line of Business

Aggregates Business: Aggregates net revenues increased by $21.2 million to $117.4 million in the first quarter 2021 when compared to the prior year period. Aggregates adjusted cash gross profit margin increased to 41.8% in the first quarter 2021 as compared to 38.1% in the first quarter 2020. Aggregates sales volumes increased 20.7% in the first quarter 2021 when compared to the prior year period on organic growth in both the West and East segments. Volume increased in the Intermountain West, Virginia and British Columbia markets, partially offset by slight decreases in Kansas and Missouri as wind farm and flood repair volumes in the first quarter of 2020 did not repeat in 2021. Average selling prices for aggregates decreased 1.9% in the first quarter 2021, primarily due to product mix in Kansas and North Texas markets. On an organic basis, average selling prices for aggregates remained flat.

Cement Business: Cement segment net revenues increased 7.2% to $40.7 million in the first quarter 2021, when compared to the prior year period, on higher sales volume of cement. Cement adjusted cash gross profit margin increased to 1.9% in the first quarter, compared to (10.0)% in the prior year period, as higher volumes resulted in lower unit plant costs. Our Green America Recycling facility continues to ramp up production following an explosion that occurred in April 2020. Sales volume of cement increased 13.7% in the first quarter and average selling prices increased 0.4% when compared to the prior year period.

Products Business: Products net revenues were $198.7 million in the first quarter 2021, compared to $176.3 million in the prior year period. Products adjusted cash gross profit margin increased to 13.6% in the first quarter, versus 11.4% 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 increased 7.6%, as volume increased in our Intermountain West and North Texas markets, and prices increased in our Intermountain West market. Our organic average sales price for asphalt increased 5.5%, with strong pricing gains across our Texas geographies, while volume increased 15.9%, on higher volumes in North Texas.

First Quarter 2021 | Results By Reporting Segment

Net revenue increased by 16.4% to $398.5 million in the first quarter 2021, versus $342.4 million in the prior year period on organic growth in our aggregates and ready-mix concrete operations. The Company reported an operating loss of $25.1 million in the first quarter 2021, compared to $41.7 million in the prior year period.

Net loss decreased to $23.2 million in the first quarter of 2021, compared to loss of $46.7 million in the prior year period. Adjusted EBITDA increased 166.5% to $41.7 million in the first quarter of 2021, compared to $15.7 million in the prior year period on higher revenue.

West Segment: The West Segment reported operating income of $15.1 million in the first quarter 2021, compared to $0.4 million in the prior year period. Adjusted EBITDA increased to $40.6 million in the first quarter 2021, compared to $22.5 million in the prior year period, as we had increases in net revenue in all lines of business. Improvements in operating income reflected increased demand for aggregates and ready-mix concrete, particularly in the Houston and Salt Lake City areas. Aggregates revenue in the first quarter increased 39.8% over the prior year period, while organic volumes and average sales prices increased 13.1% and 1.1%, respectively. Ready-mix concrete revenue in the first quarter 2021 increased 19.5% over the prior year period, as organic volumes increased 14.1% and organic average sales prices increased 4.7%, reflecting favorable market conditions for residential construction. Asphalt revenue increased by 18.2% in the first quarter 2021 over the prior year period. Asphalt volumes increased 11.7%, reflecting higher demand in North Texas, and sales prices increased 8.0%.

East Segment: The East Segment reported an operating loss of $10.4 million in the first quarter 2021, compared to $11.8 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 $11.7 million in the first quarter 2021, compared to $9.6 million in the prior year period. Aggregates revenue increased 2.6%, as volumes increased 2.7%, partially offset by decreased average selling prices of 0.2%. Ready-mix concrete revenue decreased 11.9% as volumes decreased by 12.4%, partially offset by organic average selling prices which increased 0.5% primarily due to lower volumes in Kansas as wind farm projects in 2020 were not fully replaced in 2021. Asphalt revenue increased 40.6% as organic volumes increased 55.0% on higher volumes in Kansas and Virginia, while organic average selling prices decreased 11.5% on lower liquid asphalt index prices in most of our markets.

Cement Segment: The Cement Segment reported an operating loss of $10.0 million in the first quarter 2021, compared to $15.5 million in the prior year period. Adjusted EBITDA increased to $2.5 million in the first quarter 2021, compared to $(7.6) million in the prior year period on higher volumes. The segment reported organic sales volumes and organic average selling prices increased 13.7% and increased 0.4%, respectively, during the first quarter 2021 as compared to the prior year period. Our Green America Recycling facility continues to ramp up production following an explosion that occurred in April 2020. As a result, revenue from that facility is below 2020 levels for the first quarter 2021.

Liquidity and Capital Resources

As of April 3, 2021, the Company had cash on hand of $359.7 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 April 3, 2021, the Company had $1.9 billion in debt outstanding.

Financial Outlook

For the full year 2021, Summit has not made any changes to its outlook for Adjusted EBITDA of approximately $490 million to $520 million, but expects to revisit this forecast as the year progresses. The Company continues to expect 2021 capital expenditure guidance of approximately $200 million to $220 million including approximately $25 million to $35 million for greenfield projects.

Webcast and Conference Call Information

Summit Materials will conduct a conference call on Tuesday, May 11, 2021, at 11:00 a.m. eastern time (9:00 a.m. mountain time) to review the Company’s first quarter 2021 financial results, discuss recent events and conduct a question-and-answer session.

A webcast of the conference call and accompanying presentation materials will be available in the Investors section of Summit’s website at investors.summit-materials.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.

To participate in the live teleconference on May 11, 2021:

Domestic Live: 1-877-823-8690
International Live: 1-825-312-2236
Conference ID: 2395906
Password: Summit

To listen to a replay of the teleconference, which will be available through May 18, 2021:

Domestic Replay: 1-800-585-8367
International Replay: 1-416-621-4642
Conference ID: 2395906

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, or any similar crisis, on our business;
  • our dependence on the construction industry and the strength of the local economies in which we operate;
  • the cyclical nature of our business;
  • risks related to weather and seasonality;
  • risks associated with our capital-intensive business;
  • competition within our local markets;
  • our ability to execute on our acquisition strategy, successfully integrate acquisitions with our existing operations and retain key employees of acquired businesses;
  • our dependence on securing and permitting aggregate reserves in strategically located areas;
  • declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities and other state agencies;
  • our reliance on private investment in infrastructure, which may be adversely affected by periods of economic stagnation and recession;
  • environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use;
  • costs associated with pending and future litigation;
  • rising prices for commodities, labor and other production and delivery inputs as a result of inflation or otherwise;
  • conditions in the credit markets;
  • our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us;
  • material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications;
  • cancellation of a significant number of contracts or our disqualification from bidding for new contracts;
  • special hazards related to our operations that may cause personal injury or property damage not covered by insurance;
  • unexpected factors affecting self-insurance claims and reserve estimates;
  • our substantial current level of indebtedness, including our exposure to variable interest rate risk;
  • our dependence on senior management and other key personnel, and our ability to retain and attract qualified personnel;
  • supply constraints or significant price fluctuations in the electricity and petroleum-based resources that we use, including diesel and liquid asphalt;
  • climate change and climate change legislation or regulations;
  • unexpected operational difficulties;
  • interruptions in our information technology systems and infrastructure; including cybersecurity and data leakage risks; and
  • potential labor disputes, strikes, other forms of work stoppage or other union activities.

All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements. Any forward-looking statement that we make herein speaks only as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

($ in thousands, except share and per share amounts)

 

 

 

Three months ended

 

 

April 3,

 

March 28,

 

 

2021

 

 

2020

 

Revenue:

 

 

 

 

Product

 

$

354,234

 

 

 

$

305,307

 

 

Service

 

44,247

 

 

 

37,099

 

 

Net revenue

 

398,481

 

 

 

342,406

 

 

Delivery and subcontract revenue

 

29,363

 

 

 

24,784

 

 

Total revenue

 

427,844

 

 

 

367,190

 

 

Cost of revenue (excluding items shown separately below):

 

 

 

 

Product

 

277,134

 

 

 

254,055

 

 

Service

 

40,197

 

 

 

38,524

 

 

Net cost of revenue

 

317,331

 

 

 

292,579

 

 

Delivery and subcontract cost

 

29,363

 

 

 

24,784

 

 

Total cost of revenue

 

346,694

 

 

 

317,363

 

 

General and administrative expenses

 

51,642

 

 

 

41,686

 

 

Depreciation, depletion, amortization and accretion

 

56,336

 

 

 

51,778

 

 

Gain on sale of property, plant and equipment

 

(1,769

)

 

 

(1,917

)

 

Operating loss

 

(25,059

)

 

 

(41,720

)

 

Interest expense

 

24,186

 

 

 

27,818

 

 

Gain on sale of business

 

(15,668

)

 

 

 

 

Other (income) loss, net

 

(4,889

)

 

 

89

 

 

Loss from operations before taxes

 

(28,688

)

 

 

(69,627

)

 

Income tax benefit

 

(5,443

)

 

 

(22,901

)

 

Net loss

 

(23,245

)

 

 

(46,726

)

 

Net loss attributable to Summit Holdings (1)

 

(728

)

 

 

(1,747

)

 

Net loss attributable to Summit Inc.

 

$

(22,517

)

 

 

$

(44,979

)

 

Loss per share of Class A common stock:

 

 

 

 

Basic

 

$

(0.19

)

 

 

$

(0.40

)

 

Diluted

 

$

(0.20

)

 

 

$

(0.40

)

 

Weighted average shares of Class A common stock:

 

 

 

 

Basic

 

115,664,725

 

 

 

113,602,110

 

 

Diluted

 

115,411,204

 

 

 

113,602,110

 

 

 

(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)

 

 

 

April 3,

 

January 2,

 

 

2021

 

2021

 

 

(unaudited)

 

(audited)

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

359,741

 

 

$

418,181

 

Accounts receivable, net

 

250,058

 

 

254,696

 

Costs and estimated earnings in excess of billings

 

17,124

 

 

8,666

 

Inventories

 

210,934

 

 

200,308

 

Other current assets

 

20,578

 

 

11,428

 

Total current assets

 

858,435

 

 

893,279

 

Property, plant and equipment, less accumulated depreciation, depletion and amortization (April 3, 2021 - $1,170,071 and January 2, 2021 - $1,132,925)

 

1,897,117

 

 

1,850,169

 

Goodwill

 

1,201,426

 

 

1,201,291

 

Intangible assets, less accumulated amortization (April 3, 2021 - $12,502 and January 2, 2021 - $11,864)

 

71,486

 

 

47,852

 

Deferred tax assets, less valuation allowance (April 3, 2021 - $1,675 and January 2, 2021 - $1,675)

 

240,565

 

 

231,877

 

Operating lease right-of-use assets

 

28,796

 

 

28,543

 

Other assets

 

53,432

 

 

55,000

 

Total assets

 

$

4,351,257

 

 

$

4,308,011

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Current portion of debt

 

$

6,354

 

 

$

6,354

 

Current portion of acquisition-related liabilities

 

13,372

 

 

10,265

 

Accounts payable

 

150,243

 

 

120,813

 

Accrued expenses

 

130,338

 

 

160,570

 

Current operating lease liabilities

 

7,480

 

 

8,188

 

Billings in excess of costs and estimated earnings

 

13,930

 

 

16,499

 

Total current liabilities

 

321,717

 

 

322,689

 

Long-term debt

 

1,891,522

 

 

1,892,347

 

Acquisition-related liabilities

 

31,015

 

 

12,246

 

Tax receivable agreement liability

 

325,832

 

 

321,680

 

Noncurrent operating lease liabilities

 

22,246

 

 

21,500

 

Other noncurrent liabilities

 

144,365

 

 

121,281

 

Total liabilities

 

2,736,697

 

 

2,691,743

 

Stockholders’ equity:

 

 

 

 

Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 116,644,332 and 114,390,595 shares issued and outstanding as of April 3, 2021 and January 2, 2021, respectively

 

1,167

 

 

1,145

 

Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of April 3, 2021 and January 2, 2021

 

 

 

 

Additional paid-in capital

 

1,289,267

 

 

1,264,681

 

Accumulated earnings

 

304,255

 

 

326,772

 

Accumulated other comprehensive income

 

6,838

 

 

5,203

 

Stockholders’ equity

 

1,601,527

 

 

1,597,801

 

Noncontrolling interest in Summit Holdings

 

13,033

 

 

18,467

 

Total stockholders’ equity

 

1,614,560

 

 

1,616,268

 

Total liabilities and stockholders’ equity

 

$

4,351,257

 

 

$

4,308,011

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

($ in thousands)

 

 

 

Three months ended

 

 

April 3,

 

March 28,

2021

2020

Cash flow from operating activities:

 

 

 

 

Net loss

 

$

(23,245

)

 

 

$

(46,726

)

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

Depreciation, depletion, amortization and accretion

 

59,107

 

 

 

55,278

 

 

Share-based compensation expense

 

5,363

 

 

 

4,905

 

 

Net gain on asset and business disposals

 

(15,964

)

 

 

(1,933

)

 

Non-cash loss on debt financings

 

 

 

 

 

 

Change in deferred tax asset, net

 

(10,145

)

 

 

(24,194

)

 

Other

 

483

 

 

 

1,611

 

 

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

 

 

 

 

Accounts receivable, net

 

4,946

 

 

 

19,939

 

 

Inventories

 

(15,412

)

 

 

(26,979

)

 

Costs and estimated earnings in excess of billings

 

(8,442

)

 

 

1,710

 

 

Other current assets

 

(9,209

)

 

 

(2,519

)

 

Other assets

 

2,504

 

 

 

5,543

 

 

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

 

 

 

 

Accounts payable

 

14,518

 

 

 

(2,712

)

 

Accrued expenses

 

(24,130

)

 

 

(20,776

)

 

Billings in excess of costs and estimated earnings

 

(2,578

)

 

 

245

 

 

Tax receivable agreement liability

 

4,152

 

 

 

993

 

 

Other liabilities

 

(3,266

)

 

 

(3,316

)

 

Net cash used in operating activities

 

(21,318

)

 

 

(38,931

)

 

Cash flow from investing activities:

 

 

 

 

Purchases of property, plant and equipment

 

(69,757

)

 

 

(61,829

)

 

Proceeds from the sale of property, plant and equipment

 

2,663

 

 

 

3,160

 

 

Proceeds from sale of business

 

33,077

 

 

 

 

 

Other

 

(483

)

 

 

1,801

 

 

Net cash used in investing activities

 

(34,500

)

 

 

(56,868

)

 

Cash flow from financing activities:

 

 

 

 

Payments on debt

 

(10,170

)

 

 

(5,493

)

 

Payments on acquisition-related liabilities

 

(8,096

)

 

 

(9,515

)

 

Proceeds from stock option exercises

 

15,920

 

 

 

310

 

 

Other

 

(416

)

 

 

(908

)

 

Net cash used in financing activities

 

(2,762

)

 

 

(15,606

)

 

Impact of foreign currency on cash

 

140

 

 

 

(800

)

 

Net decrease in cash

 

(58,440

)

 

 

(112,205

)

 

Cash and cash equivalents—beginning of period

 

418,181

 

 

 

311,319

 

 

Cash and cash equivalents—end of period

 

$

359,741

 

 

 

$

199,114

 

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Revenue Data by Segment and Line of Business

($ in thousands)

 

 

 

Three months ended

 

Twelve Months Ended

 

 

April 3,

 

March 28,

 

April 3,

 

March 28,

 

 

2021

 

2020

 

 

2021

 

2020

Segment Net Revenue:

 

 

 

 

 

 

 

 

West

 

$

234,744

 

 

$

184,492

 

 

 

$

1,198,173

 

 

$

1,038,993

 

East

 

123,068

 

 

119,989

 

 

 

719,290

 

 

736,787

 

Cement

 

40,669

 

 

37,925

 

 

 

273,366

 

 

291,323

 

Net Revenue

 

$

398,481

 

 

$

342,406

 

 

 

$

2,190,829

 

 

$

2,067,103

 

 

 

 

 

 

 

 

 

 

Line of Business - Net Revenue:

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

117,388

 

 

$

96,161

 

 

 

$

519,234

 

 

$

477,959

 

Cement (1)

 

38,139

 

 

32,863

 

 

 

262,905

 

 

266,599

 

Products

 

198,707

 

 

176,283

 

 

 

1,091,467

 

 

1,013,570

 

Total Materials and Products

 

354,234

 

 

305,307

 

 

 

1,873,606

 

 

1,758,128

 

Services

 

44,247

 

 

37,099

 

 

 

317,223

 

 

308,975

 

Net Revenue

 

$

398,481

 

 

$

342,406

 

 

 

$

2,190,829

 

 

$

2,067,103

 

 

 

 

 

 

 

 

 

 

Line of Business - Net Cost of Revenue:

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

68,297

 

 

$

59,523

 

 

 

$

250,856

 

 

$

224,015

 

Cement

 

37,360

 

 

36,655

 

 

 

151,238

 

 

154,467

 

Products

 

171,620

 

 

156,217

 

 

 

879,444

 

 

830,480

 

Total Materials and Products

 

277,277

 

 

252,395

 

 

 

1,281,538

 

 

1,208,962

 

Services

 

40,054

 

 

40,184

 

 

 

256,171

 

 

268,378

 

Net Cost of Revenue

 

$

317,331

 

 

$

292,579

 

 

 

$

1,537,709

 

 

$

1,477,340

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

49,091

 

 

$

36,638

 

 

 

$

268,378

 

 

$

253,944

 

Cement (3)

 

779

 

 

(3,792

)

 

 

111,667

 

 

112,132

 

Products

 

27,087

 

 

20,066

 

 

 

212,023

 

 

183,090

 

Total Materials and Products

 

76,957

 

 

52,912

 

 

 

592,068

 

 

549,166

 

Services

 

4,193

 

 

(3,085

)

 

 

61,052

 

 

40,597

 

Adjusted Cash Gross Profit

 

$

81,150

 

 

$

49,827

 

 

 

$

653,120

 

 

$

589,763

 

 

 

 

 

 

 

 

 

 

Adjusted Cash Gross Profit Margin (2)

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

41.8

%

 

38.1

 

%

 

51.7

%

 

53.1

%

Cement (3)

 

1.9

%

 

(10.0

)

%

 

40.8

%

 

38.5

%

Products

 

13.6

%

 

11.4

 

%

 

19.4

%

 

18.1

%

Services

 

9.5

%

 

(8.3

)

%

 

19.2

%

 

13.1

%

Total Adjusted Cash Gross Profit Margin

 

20.4

%

 

14.6

 

%

 

29.8

%

 

28.5

%

(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

Total Volume

 

April 3, 2021

 

March 28, 2020

Aggregates (tons)

 

13,509

 

 

11,193

 

Cement (tons)

 

340

 

 

299

 

Ready-mix concrete (cubic yards)

 

1,338

 

 

1,244

 

Asphalt (tons)

 

474

 

 

409

 

 

 

 

 

 

 

 

Three months ended

Pricing

 

April 3, 2021

 

March 28, 2020

Aggregates (per ton)

 

$

10.64

 

 

$

10.85

 

Cement (per ton)

 

116.69

 

 

116.21

 

Ready-mix concrete (per cubic yards)

 

118.31

 

 

114.04

 

Asphalt (per ton)

 

60.01

 

 

56.86

 

 

 

 

 

 

 

 

Three months ended

 

 

Percentage Change in

Year over Year Comparison

 

Volume

 

Pricing

Aggregates (per ton)

 

20.7

%

 

(1.9

)%

Cement (per ton)

 

13.7

%

 

0.4

%

Ready-mix concrete (per cubic yards)

 

7.6

%

 

3.7

%

Asphalt (per ton)

 

15.9

%

 

5.5

%

 

 

 

 

 

 

 

Three months ended

 

 

Percentage Change in

Year over Year Comparison (Excluding acquisitions)

 

Volume

 

Pricing

Aggregates (per ton)

 

7.1

%

 

%

Cement (per ton)

 

13.7

%

 

0.4

%

Ready-mix concrete (per cubic yards)

 

7.6

%

 

3.7

%

Asphalt (per ton)

 

15.9

%

 

5.5

%

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 April 3, 2021

 

 

 

 

 

 

Gross Revenue

 

Intercompany

 

Net

 

 

Volumes

 

Pricing

 

by Product

 

Elimination/Delivery

 

Revenue

Aggregates

 

13,509

 

 

$

10.64

 

 

$

143,794

 

 

$

(26,406

)

 

 

$

117,388

 

Cement

 

340

 

 

116.69

 

 

39,703

 

 

(1,564

)

 

 

38,139

 

Materials

 

 

 

 

 

$

183,497

 

 

$

(27,970

)

 

 

$

155,527

 

Ready-mix concrete

 

1,338

 

 

118.31

 

 

158,336

 

 

(103

)

 

 

158,233

 

Asphalt

 

474

 

 

60.01

 

 

28,421

 

 

(58

)

 

 

28,363

 

Other Products

 

 

 

 

 

73,882

 

 

(61,771

)

 

 

12,111

 

Products

 

 

 

 

 

$

260,639

 

 

$

(61,932

)

 

 

$

198,707

 

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 loss to Adjusted EBITDA by segment for the three months ended April 3, 2021 and March 28, 2020.

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Three months ended April 3, 2021

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

17,436

 

 

$

6,969

 

 

$

(1,605

)

 

$

(46,045

)

 

$

(23,245

)

Interest (income) expense

 

(2,032

)

 

(1,720

)

 

(4,045

)

 

31,983

 

 

24,186

 

Income tax expense (benefit)

 

186

 

 

(66

)

 

 

 

(5,563

)

 

(5,443

)

Depreciation, depletion and amortization

 

24,924

 

 

21,474

 

 

8,068

 

 

1,104

 

 

55,570

 

EBITDA

 

$

40,514

 

 

$

26,657

 

 

$

2,418

 

 

$

(18,521

)

 

$

51,068

 

Accretion

 

216

 

 

469

 

 

81

 

 

 

 

766

 

Gain on sale of business

 

 

 

(15,668

)

 

 

 

 

 

(15,668

)

Non-cash compensation

 

 

 

 

 

 

 

5,363

 

 

5,363

 

Other

 

(82

)

 

287

 

 

 

 

 

 

205

 

Adjusted EBITDA

 

$

40,648

 

 

$

11,745

 

 

$

2,499

 

 

$

(13,158

)

 

$

41,734

 

Adjusted EBITDA Margin (1)

17.3

%

9.5

%

6.1

%

10.5

%

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Three months ended March 28, 2020

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

498

 

 

 

$

(11,067

)

 

 

$

(12,278

)

 

 

$

(23,879

)

 

 

$

(46,726

)

 

Interest (income) expense

 

(578

)

 

 

(569

)

 

 

(3,176

)

 

 

32,141

 

 

 

27,818

 

 

Income tax benefit

 

(467

)

 

 

(129

)

 

 

 

 

 

(22,305

)

 

 

(22,901

)

 

Depreciation, depletion and amortization

 

21,684

 

 

 

20,720

 

 

 

7,808

 

 

 

989

 

 

 

51,201

 

 

EBITDA

 

$

21,137

 

 

 

$

8,955

 

 

 

$

(7,646

)

 

 

$

(13,054

)

 

 

$

9,392

 

 

Accretion

 

116

 

 

 

376

 

 

 

85

 

 

 

 

 

 

577

 

 

Non-cash compensation

 

 

 

 

 

 

 

 

 

 

4,905

 

 

 

4,905

 

 

Other

 

1,215

 

 

 

242

 

 

 

 

 

 

(670

)

 

 

787

 

 

Adjusted EBITDA

 

$

22,468

 

 

 

$

9,573

 

 

 

$

(7,561

)

 

 

$

(8,819

)

 

 

$

15,661

 

 

Adjusted EBITDA Margin (1)

 

12.2

 

%

 

8.0

 

%

 

(19.9

)

%

 

 

 

4.6

 

%

 

(1) Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of net revenue.

The table below reconciles our net loss attributable to Summit Materials, Inc. to adjusted diluted net loss per share for the three months ended April 3, 2021 and March 28, 2020. The per share amount of the net loss 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 loss per share.

 

 

Three months ended

 

 

April 3, 2021

 

March 28, 2020

Reconciliation of Net Loss Per Share to Adjusted Diluted EPS

 

Net Loss

 

Per Equity Unit

 

Net Loss

 

Per Equity Unit

Net loss attributable to Summit Materials, Inc.

 

$

(22,517

)

 

 

$

(0.19

)

 

 

$

(44,979

)

 

 

$

(0.39

)

 

Adjustments:

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

(728

)

 

 

(0.01

)

 

 

(1,747

)

 

 

(0.01

)

 

Gain on sale of business

 

(15,668

)

 

 

(0.13

)

 

 

 

 

 

 

 

Adjusted diluted net loss before tax related adjustments

 

(38,913

)

 

 

(0.33

)

 

 

(46,726

)

 

 

(0.40

)

 

Changes in unrecognized tax expense (benefit)

 

 

 

 

 

 

 

(9,537

)

 

 

(0.08

)

 

Adjusted diluted net loss

 

$

(38,913

)

 

 

$

(0.33

)

 

 

$

(56,263

)

 

 

$

(0.48

)

 

Weighted-average shares:

 

 

 

 

 

 

 

 

Basic Class A common stock

 

115,411,204

 

 

 

 

 

113,602,110

 

 

 

 

LP Units outstanding

 

2,613,210

 

 

 

 

 

3,154,228

 

 

 

 

Total equity units

 

118,024,414

 

 

 

 

 

116,756,338

 

 

 

 

The following table reconciles operating loss to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the three months ended April 3, 2021 and March 28, 2020.

 

 

Three months ended

 

 

April 3,

 

March 28,

Reconciliation of Operating Loss to Adjusted Cash Gross Profit

 

2021

 

 

2020

 

($ in thousands)

 

 

 

 

Operating loss

 

$

(25,059

)

 

 

$

(41,720

)

 

General and administrative expenses

 

51,642

 

 

 

41,686

 

 

Depreciation, depletion, amortization and accretion

 

56,336

 

 

 

51,778

 

 

Gain on sale of property, plant and equipment

 

(1,769

)

 

 

(1,917

)

 

Adjusted Cash Gross Profit (exclusive of items shown separately)

 

$

81,150

 

 

 

$

49,827

 

 

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

 

20.4

 

%

 

14.6

 

%

 

(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 used in operating activities to free cash flow for the three months ended April 3, 2021 and March 28, 2020.

 

 

Three months ended

 

 

April 3,

 

March 28,

($ in thousands)

 

2021

 

 

2020

 

Net loss

 

$

(23,245

)

 

 

$

(46,726

)

 

Non-cash items

 

38,844

 

 

 

35,667

 

 

Net loss adjusted for non-cash items

 

15,599

 

 

 

(11,059

)

 

Change in working capital accounts

 

(36,917

)

 

 

(27,872

)

 

Net cash used in operating activities

 

(21,318

)

 

 

(38,931

)

 

Capital expenditures, net of asset sales

 

(67,094

)

 

 

(58,669

)

 

Free cash flow

 

$

(88,412

)

 

 

$

(97,600

)