Le Lézard
Classified in: Business, Covid-19 virus
Subjects: ERN, ERP

Summit Materials, Inc. Reports Third Quarter 2023 Results


Establishes Summit Records for Revenue and Profitability

Sets Elevate Summit highs for ROIC and Adjusted EBITDA Margin

Raises 2023 Guidance

DENVER, Nov. 1, 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 third quarter ended September 30, 2023. All comparisons are versus the quarter-ended October 1, 2022 unless noted otherwise.



Three months ended

($ in thousands, except per share amounts)


September 30,
2023


October 1,
2022


% Chg vs. PY

Net revenue


$     741,960


$     686,009


8.2 %

Operating income


127,983


127,062


0.7 %

Net income


232,725


87,651


165.5 %

Basic EPS


$           1.93


$           0.72


168.1 %








Adjusted Cash Gross Profit


251,638


217,811


15.5 %

Adjusted EBITDA


208,519


184,888


12.8 %

Adjusted Diluted EPS


$           0.81


$           0.70


15.7 %

"Once again I'm pleased to report we delivered record financial results this quarter as our sharp executional focus along with a more powerful, materials-led portfolio drove significant growth across the P&L," commented Anne Noonan, Summit Materials President and CEO. Year-to-date performance and enduring pricing trends allows us to again increase our 2023 Adjusted EBITDA guidance and carry strong momentum into 2024. Our dedicated teams throughout our footprint deserve the credit for powering Elevate Summit highs for Adjusted EBITDA margin and Return on Invested Capital. It's their commitment, together with our strategic direction that gives us confidence that Summit is well positioned to better seize the opportunities ahead of us.    

"We look forward to our announced combination with Argos USA, which accelerates our materials-led strategy, enhances our scale and reach in cement, and bolsters our cash flow generation to fuel further Aggregates-oriented organic and inorganic growth opportunities. Importantly, we have cleared HSR review and are now on pace to close the transaction before the end of the first quarter of next year. When completed, we will be better positioned to capitalize on strong and durable demand tailwinds while leveraging proven expertise to materially upgrade profitability through synergy generation. With enhanced capabilities, world-class talent, and a strong balance sheet, Summit is well positioned to deliver superior growth and value creation to all of our shareholders."

2023 Guidance

For the full year 2023, Summit is increasing the low end of its Adjusted EBITDA guidance range to approximately $560 from $550 previously. The revised outlook is now for $560 million to $570 million in Adjusted EBITDA for the full year 2023. Summit maintains its outlook for 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.

Third Quarter 2023 | Total Company Results

Net revenue increased $56.0 million, or 8.2% in the third quarter to $742.0 million, as increases in average sales prices across all lines of business more than offset lower volumes.

Operating income increased $0.9 million, or 0.7% in the third quarter to $128.0 million, driven by increases in average sales price that more than offset a combination of inflationary increases in cost of revenue, higher general and administrative expenses, and increased transaction costs versus the prior year period. Summit's operating margin percentage for the three months ended September 30, 2023 decreased to 17.2% from 18.5%, from the comparable period a year ago primarily reflecting the aforementioned transaction costs related to the Argos USA transaction.

Net income attributable to Summit Inc. increased to $230.0 million, or $1.93 per basic share, compared to $86.5 million, or $0.72 per basic share in the comparable prior year period due primarily to recognizing a tax receivable benefit of $153.1 million in connection with Summit's agreement to acquire all the rights and interest in the TRA from affiliates of Blackstone Inc. and other TRA holders. Excluding this gain as well as other customary adjustments, Summit reported adjusted diluted net income of $97.5 million, or $0.81 per adjusted diluted share, up from  $84.2 million, or $0.70 per adjusted diluted share in the prior year period.

Adjusted EBITDA increased $23.6 million, or 12.8% to $208.5 million primarily reflecting strong pricing across all lines of business.

Third Quarter 2023 | Results by Line of Business

Aggregates Business: Aggregates net revenues increased by $16.3 million to $179.8 million in the third quarter. Aggregates adjusted cash gross profit margin was 59.0% in the third quarter as compared to 53.3% in the prior year period. Aggregates sales volume decreased 3.8% in the third quarter despite a positive impact from acquisitions. Due primarily to reduced residential activity, organic aggregates sales volumes declined 7.5% as lower volumes in British Columbia, Kansas, and Missouri more than offset organic aggregates volume growth in Virginia and North Texas. Average selling prices for aggregates increased 14.4%, maintaining strong levels and reflecting the cumulative effects of multiple pricing actions implemented in 2023.

Cement Business: Cement Segment net revenues increased 1.2% to $121.3 million in the third quarter. Cement Segment adjusted cash gross profit margin increased to 46.3% in the third quarter, compared to 42.5% in the prior year period as strong pricing gains combined with increased product mix of internally produced cement to more than offset inflationary cost conditions. Sales volume of cement decreased 11.3% reflecting, in part, a lower proportion of import volume relative to the prior year as well as wet condition in many northern markets. Average selling prices increased 13.9% in the third quarter due to the compounding effects of pricing actions implemented in January and July of 2023. 

Products Business: Products net revenues were $346.8 million in the third quarter, up 11.5% versus the prior year period. Products adjusted cash gross profit margin increased to 20.0% in the third quarter primarily driven by asphalt margin expansion. Organic average sales price for ready-mix concrete increased 8.1% driven by pricing growth across all markets, including our key markets of Houston and Salt Lake City. Organic sales volumes of ready-mix concrete decreased 12.2% due to reduced residential activity. Organic average selling prices for asphalt increased 14.3%, due to pricing gains in North Texas and the Intermountain West. Organic asphalt sales volume increased 2.5% fueled by public infrastructure growth.

Third Quarter 2023 | Results By Reporting Segment

West Segment: The West Segment operating income increased $16.5 million to $89.6 million and Adjusted EBITDA of $117.8 million in the third quarter increased 19.9% versus the prior year period. Aggregates revenue increased 11.8% as 14.7% organic pricing growth was partially offset by 6.6% organic volume declines. Pricing growth was strongest in Houston,  Intermountain West, and British Columbia. Ready-mix concrete revenue increased 16.1% as 7.8% organic pricing growth was only partially offset by lower organic volumes. Asphalt revenue increased 25.0% due to organic pricing growth of 15.9% including double-digit growth in North Texas and the Intermountain West. Asphalt organic volumes increased 3.7% versus the prior year period. 

East Segment: The East Segment operating income of $34.2 million increased 20.2% versus the prior year period and Adjusted EBITDA increased 13.5% to $50.1 million, despite the impact of divestitures and reflecting constructive pricing conditions across Summit's markets. Aggregates revenue increased 8.4% versus the prior year period. Organic aggregates volumes decreased 8.4% as growth in Virginia and the Carolinas was more than offset by lower volumes in Kansas and Missouri. Aggregates pricing increased 13.7% with solid growth across markets. Ready-mix concrete revenue decreased 7.9% with selling price growth of 9.5% more than offset by lower volumes. Due primarily to divestitures, asphalt revenue decreased to $7.8 million.

Cement Segment: The Cement Segment operating income increased 7.9% to $38.3 million. Adjusted EBITDA increased $3.8 million as revenue growth and favorable product mix combined to more than offset inflationary conditions. As noted above, in the third quarter, the Cement Segment reported a volume decreased of 11.3% and average selling price growth of 13.9%.

Liquidity and Capital Resources

As of September 30, 2023, the Company had $197.5 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 cash used for payments related to the purchase of certain TRA interests.

For the quarter ended September 30, 2023, cash flow provided by operations was $243.6 million and cash paid for capital expenditures was $182.2 million.

As of September 30, 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, November 2, 2023, at 11:00 a.m. eastern time (9:00 a.m. mountain time) to review the Company's third 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 third 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/991348107.

To participate in the live teleconference for third 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 November 9, 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:

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

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

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




Three months ended


Nine months ended



September 30,


October 1,


September 30,


October 1,



2023


2022


2023


2022

Revenue:









Product


$       641,778


$       587,138


$    1,609,664


$    1,485,746

Service


100,182


98,871


219,939


224,676

Net revenue


741,960


686,009


1,829,603


1,710,422

Delivery and subcontract revenue


52,837


66,738


129,732


149,826

Total revenue


794,797


752,747


1,959,335


1,860,248

Cost of revenue (excluding items shown separately below):









Product


412,784


392,187


1,086,299


1,042,888

Service


77,538


76,011


173,568


179,807

Net cost of revenue


490,322


468,198


1,259,867


1,222,695

Delivery and subcontract cost


52,837


66,738


129,732


149,826

Total cost of revenue


543,159


534,936


1,389,599


1,372,521

General and administrative expenses


50,895


39,232


150,731


136,897

Depreciation, depletion, amortization and accretion


57,452


52,133


163,133


150,483

Transaction costs


17,442


727


19,518


2,637

Gain on sale of property, plant and equipment


(2,134)


(1,343)


(5,787)


(6,293)

Operating income


127,983


127,062


242,141


204,003

Interest expense


28,013


21,980


83,335


62,728

Loss on debt financings


?


?


493


?

Tax receivable agreement (benefit) expense


(153,080)


?


(153,080)


954

Gain on sale of businesses


?


(4,115)


?


(174,373)

Other income, net


(3,583)


(3,283)


(14,771)


(4,956)

Income from operations before taxes


256,633


112,480


326,164


319,650

Income tax expense


23,908


24,829


39,923


74,033

Net income


232,725


87,651


286,241


245,617

Net income attributable to Summit Holdings (1)


2,680


1,162


3,363


3,307

Net income attributable to Summit Inc.


$       230,045


$         86,489


$       282,878


$       242,310

Earnings per share of Class A common stock:









Basic


$              1.93


$              0.72


$              2.38


$              2.01

Diluted


$              1.92


$              0.72


$              2.37


$              2.00

Weighted average shares of Class A common stock:









Basic


119,013,331


119,896,272


118,874,967


120,345,015

Diluted


119,725,693


120,383,312


119,558,974


121,078,150

________________________________________________________

(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)




September 30,


December 31,



2023


2022



(unaudited)


(audited)

Assets





Current assets:





Cash and cash equivalents


$     197,475


$     520,451

Accounts receivable, net


375,929


256,669

Costs and estimated earnings in excess of billings


40,985


6,510

Inventories


243,136


212,491

Other current assets


17,976


20,787

Current assets held for sale


1,702


1,468

Total current assets


877,203


1,018,376

Property, plant and equipment, less accumulated depreciation, depletion and amortization
(September 30, 2023 - $1,387,348 and December 31, 2022 - $1,267,557)


1,974,532


1,813,702

Goodwill


1,241,472


1,132,546

Intangible assets, less accumulated amortization (September 30, 2023 - $18,115 and
December 31, 2022 - $15,503)


68,814


71,384

Deferred tax assets, less valuation allowance (September 30, 2023 - $1,113 and December 31,
2022 - $1,113)


113,362


136,986

Operating lease right-of-use assets


38,380


37,889

Other assets


51,201


44,809

Total assets


$ 4,364,964


$ 4,255,692

Liabilities and Stockholders' Equity





Current liabilities:





Current portion of debt


$         3,822


$         5,096

Current portion of acquisition-related liabilities


7,028


13,718

Accounts payable


173,127


104,031

Accrued expenses


147,619


119,967

Current operating lease liabilities


8,745


7,296

Billings in excess of costs and estimated earnings


8,539


5,739

Total current liabilities


348,880


255,847

Long-term debt


1,488,069


1,488,569

Acquisition-related liabilities


27,633


29,051

Tax receivable agreement liability


52,143


327,812

Noncurrent operating lease liabilities


34,838


35,737

Other noncurrent liabilities


105,668


106,686

Total liabilities


2,057,231


2,243,702

Stockholders' equity:





Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized,
119,112,950 and 118,408,655 shares issued and outstanding as of September 30, 2023 and
December 31, 2022, respectively


1,192


1,185

Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares
issued and outstanding as of September 30, 2023 and December 31, 2022


?


?

Additional paid-in capital


1,415,320


1,404,122

Accumulated earnings


873,773


590,895

Accumulated other comprehensive income


3,296


3,084

Stockholders' equity


2,293,581


1,999,286

Noncontrolling interest in Summit Holdings


14,152


12,704

Total stockholders' equity


2,307,733


2,011,990

Total liabilities and stockholders' equity


$ 4,364,964


$ 4,255,692

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

($ in thousands)




Nine months ended



September 30,


October 1,



2023


2022

Cash flows from operating activities:





Net income


$     286,241


$     245,617

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





Depreciation, depletion, amortization and accretion


168,758


160,162

Share-based compensation expense


15,116


15,058

Net gain on asset and business disposals


(5,790)


(180,240)

Non-cash loss on debt financings


161


?

Change in deferred tax asset, net


23,540


58,318

Other


(105)


(396)

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





Accounts receivable, net


(107,349)


(96,724)

Inventories


(23,935)


(53,762)

Costs and estimated earnings in excess of billings


(34,463)


(32,042)

Other current assets


4,438


(6,961)

Other assets


2,208


3,432

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





Accounts payable


48,524


44,510

Accrued expenses


19,034


(21,780)

Billings in excess of costs and estimated earnings


2,812


646

Tax receivable agreement benefit


(153,080)


954

Other liabilities


(2,486)


(4,601)

Net cash provided by operating activities


243,624


132,191

Cash flows from investing activities:





Acquisitions, net of cash acquired


(239,508)


(1,933)

Purchases of property, plant and equipment


(182,182)


(189,008)

Proceeds from the sale of property, plant and equipment


9,760


8,298

Proceeds from sale of businesses


?


373,790

Other


(3,602)


(2,214)

Net cash (used in) provided by investing activities


(415,532)


188,933

Cash flows from financing activities:





Debt issuance costs


(1,566)


?

Payments on debt


(8,520)


(113,769)

Purchase of tax receivable agreement interests


(122,935)


?

Payments on acquisition-related liabilities


(12,203)


(12,964)

Distributions from partnership


(60)


(399)

Repurchases of common stock


?


(100,980)

Proceeds from stock option exercises


112


199

Other


(6,011)


(774)

Net cash used in financing activities


(151,183)


(228,687)

Impact of foreign currency on cash


115


(1,732)

Net (decrease) increase in cash


(322,976)


90,705

Cash and cash equivalents?beginning of period


520,451


380,961

Cash and cash equivalents?end of period


$     197,475


$     471,666

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Revenue Data by Segment and Line of Business

($ in thousands)




Three months ended


Nine months ended



September 30,


October 1,


September 30,


October 1,



2023


2022


2023


2022

Segment Net Revenue:









West


$   461,094


$   394,648


$  1,095,502


$   983,160

East


159,547


171,446


446,790


467,471

Cement


121,319


119,915


287,311


259,791

Net Revenue


$   741,960


$   686,009


$  1,829,603


$  1,710,422










Line of Business - Net Revenue:









Materials









Aggregates


$   179,819


$   163,524


$   505,984


$   448,397

Cement (1)


115,135


112,489


267,755


241,858

Products


346,824


311,125


835,925


795,491

Total Materials and Products


641,778


587,138


1,609,664


1,485,746

Services


100,182


98,871


219,939


224,676

Net Revenue


$   741,960


$   686,009


$  1,829,603


$  1,710,422










Line of Business - Net Cost of Revenue:









Materials









Aggregates


$      73,733


$      76,369


$   251,781


$   229,767

Cement


58,997


61,519


147,400


146,327

Products


277,498


250,591


678,593


659,342

Total Materials and Products


410,228


388,479


1,077,774


1,035,436

Services


80,094


79,719


182,093


187,259

Net Cost of Revenue


$   490,322


$   468,198


$  1,259,867


$  1,222,695










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









Materials









Aggregates


$   106,086


$      87,155


$   254,203


$   218,630

Cement (3)


56,138


50,970


120,355


95,531

Products


69,326


60,534


157,332


136,149

Total Materials and Products


231,550


198,659


531,890


450,310

Services


20,088


19,152


37,846


37,417

Adjusted Cash Gross Profit


$   251,638


$   217,811


$   569,736


$   487,727










Adjusted Cash Gross Profit Margin (2)









Materials









Aggregates


59.0 %


53.3 %


50.2 %


48.8 %

Cement (3)


46.3 %


42.5 %


41.9 %


36.8 %

Products


20.0 %


19.5 %


18.8 %


17.1 %

Services


20.1 %


19.4 %


17.2 %


16.7 %

Total Adjusted Cash Gross Profit Margin


33.9 %


31.8 %


31.1 %


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


Nine months ended

Total Volume


September 30,
2023


October 1,
2022


September 30,
2023


October 1,
2022

Aggregates (tons)


15,654


16,267


44,622


46,489

Cement (tons)


746


841


1,787


1,887

Ready-mix concrete (cubic yards)


1,383


1,326


3,667


3,960

Asphalt (tons)


1,385


1,459


2,805


3,041












Three months ended


Nine months ended

Pricing


September 30,
2023


October 1,
2022


September 30,
2023


October 1,
2022

Aggregates (per ton)


$     14.28


$     12.48


$       13.81


$       11.89

Cement (per ton)


155.79


136.83


151.58


132.22

Ready-mix concrete (per cubic yards)


154.39


142.66


150.66


133.87

Asphalt (per ton)


85.20


73.26


84.36


71.74












Three months ended


Nine months ended



Percentage Change in


Percentage Change in

Year over Year Comparison


Volume


Pricing


Volume


Pricing

Aggregates (per ton)


(3.8) %


14.4 %


(4.0) %


16.1 %

Cement (per ton)


(11.3) %


13.9 %


(5.3) %


14.6 %

Ready-mix concrete (per cubic yards)


4.3 %


8.2 %


(7.4) %


12.5 %

Asphalt (per ton)


(5.1) %


16.3 %


(7.8) %


17.6 %












Three months ended


Nine months ended



Percentage Change in


Percentage Change in

Year over Year Comparison (Excluding acquisitions & divestitures)


Volume


Pricing


Volume


Pricing

Aggregates (per ton)


(7.5) %


13.6 %


(4.4) %


15.7 %

Cement (per ton)


(11.3) %


13.9 %


(5.3) %


14.6 %

Ready-mix concrete (per cubic yards)


(12.2) %


8.1 %


(13.9) %


12.1 %

Asphalt (per ton)


2.5 %


14.3 %


5.5 %


15.1 %

 

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 September 30, 2023







Gross Revenue


Intercompany


Net



Volumes


Pricing


by Product 


Elimination/Delivery 


Revenue 

Aggregates


15,654


$       14.28


$            223,593


$                           (43,774)


$               179,819

Cement


746


155.79


116,285


(1,150)


115,135

Materials






$            339,878


$                           (44,924)


$               294,954

Ready-mix concrete


1,383


154.39


213,546


(221)


213,325

Asphalt


1,385


85.20


117,980


(85)


117,895

Other Products






90,830


(75,226)


15,604

Products






$            422,356


$                           (75,532)


$               346,824

























Nine months ended September 30, 2023







Gross Revenue


Intercompany


Net



Volumes


Pricing


by Product 


Elimination/Delivery 


Revenue 

Aggregates


44,622


$       13.81


$            616,257


$                         (110,273)


$               505,984

Cement


1,787


151.58


270,916


(3,161)


267,755

Materials






$            887,173


$                         (113,434)


$               773,739

Ready-mix concrete


3,667


150.66


552,516


(843)


551,673

Asphalt


2,805


84.36


236,623


(284)


236,339

Other Products






253,342


(205,429)


47,913

Products






$         1,042,481


$                         (206,556)


$               835,925

 

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 nine months ended September 30, 2023 and October 1, 2022.


Reconciliation of Net Income to Adjusted EBITDA


Three months ended September 30, 2023

by Segment


West


East


Cement


Corporate


Consolidated

($ in thousands)











Net income


$     92,652


$    37,350


$     43,347


$    59,376


$   232,725

Interest (income) expense


(4,068)


(3,055)


(5,135)


40,271


28,013

Income tax expense


1,644


?


?


22,264


23,908

Depreciation, depletion and amortization


28,443


15,103


12,123


1,022


56,691

EBITDA


$   118,671


$    49,398


$     50,335


$  122,933


$   341,337

Accretion


258


483


20


?


761

Tax receivable agreement benefit


?


?


?


(153,080)


(153,080)

Non-cash compensation


?


?


?


5,192


5,192

Argos USA acquisition and integration costs


?


?


?


17,859


17,859

Other


(1,083)


208


?


(2,675)


(3,550)

Adjusted EBITDA


$   117,846


$    50,089


$     50,355


$   (9,771)


$   208,519

Adjusted EBITDA Margin (1)


25.6 %


31.4 %


41.5 %




28.1 %












Reconciliation of Net Income (Loss) to Adjusted EBITDA


Three months ended October 1, 2022

by Segment


West


East


Cement


Corporate


Consolidated

($ in thousands)











Net income (loss)


$     76,350


$    30,225


$     40,748


$ (59,672)


$     87,651

Interest (income) expense


(4,475)


(2,602)


(5,110)


34,167


21,980

Income tax expense


1,384


?


?


23,445


24,829

Depreciation, depletion and amortization


24,676


15,063


10,879


821


51,439

EBITDA


$     97,935


$    42,686


$     46,517


$   (1,239)


$   185,899

Accretion


232


382


80


?


694

Loss (gain) on sale of businesses


?


1,005


?


(5,120)


(4,115)

Non-cash compensation


?


?


?


4,902


4,902

Other


114


46


?


(2,652)


(2,492)

Adjusted EBITDA


$     98,281


$    44,119


$     46,597


$   (4,109)


$   184,888

Adjusted EBITDA Margin (1)


24.9 %


25.7 %


38.9 %




27.0 %












Reconciliation of Net Income (Loss) to Adjusted EBITDA


Nine months ended September 30, 2023

by Segment


West


East


Cement


Corporate


Consolidated

($ in thousands)











Net income (loss)


$   179,928


$    77,936


$     88,193


$ (59,816)


$   286,241

Interest (income) expense


(10,777)


(8,707)


(14,988)


117,807


83,335

Income tax expense


3,861


?


?


36,062


39,923

Depreciation, depletion and amortization


82,450


45,454


29,973


3,044


160,921

EBITDA


$   255,462


$  114,683


$   103,178


$    97,097


$   570,420

Accretion


768


1,385


59


?


2,212

Loss on debt financings


?


?


?


493


493

Tax receivable agreement benefit


?


?


?


(153,080)


(153,080)

Non-cash compensation


?


?


?


15,116


15,116

Argos USA acquisition and integration costs


?


?


?


17,859


17,859

Other


(1,189)


490


?


(10,856)


(11,555)

Adjusted EBITDA


$   255,041


$  116,558


$   103,237


$ (33,371)


$   441,465

Adjusted EBITDA Margin (1)


23.3 %


26.1 %


35.9 %




24.1 %












Reconciliation of Net Income (Loss) to Adjusted EBITDA


Nine months ended October 1, 2022

by Segment


West


East


Cement


Corporate


Consolidated

($ in thousands)











Net income (loss)


$   153,857


$  101,680


$     70,958


$ (80,878)


$   245,617

Interest (income) expense


(12,480)


(8,767)


(14,932)


98,907


62,728

Income tax expense (benefit)


2,547


(106)


?


71,592


74,033

Depreciation, depletion and amortization


70,803


47,470


27,760


2,340


148,373

EBITDA


$   214,727


$  140,277


$     83,786


$    91,961


$   530,751

Accretion


692


1,185


233


?


2,110

Tax receivable agreement expense


?


?


?


954


954

Gain on sale of businesses


?


(42,652)


?


(131,721)


(174,373)

Non-cash compensation


?


?


?


15,058


15,058

Other


198


139


?


(2,652)


(2,315)

Adjusted EBITDA


$   215,617


$    98,949


$     84,019


$ (26,400)


$   372,185

Adjusted EBITDA Margin (1)


21.9 %


21.2 %


32.3 %




21.8 %

________________________________________________

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

 

The table below reconciles our net income attributable to Summit Materials, Inc. to adjusted diluted net income per share for the three and nine months ended September 30, 2023 and October 1, 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


Nine months ended



September 30, 2023


October 1, 2022


September 30, 2023


October 1, 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.


$    230,045


$        1.91


$      86,489


$        0.71


$    282,878


$        2.36


$    242,310


$        1.99

Adjustments:

















Net income attributable to noncontrolling interest


2,680


0.02


1,162


0.01


3,363


0.03


3,307


0.03

Argos USA acquisition and integration costs


17,859


0.15


?


?


17,859


0.15


?


?

Gain on sale of businesses, net of tax


?


?


(3,406)


(0.02)


?


?


(130,975)


(1.08)

Loss on debt financings


?


?


?


?


493


?


?


?

Adjusted diluted net income before tax related adjustments


250,584


2.08


84,245


0.70


304,593


2.54


114,642


0.94

Tax receivable agreement (benefit) expense


(153,080)


(1.27)


?


?


(153,080)


(1.28)


954


0.01

Adjusted diluted net income


$      97,504


$        0.81


$      84,245


$        0.70


$    151,513


$        1.26


$    115,596


$        0.95

Weighted-average shares:

















Basic Class A common stock


118,928,799




119,753,806




118,780,523




120,196,211



LP Units outstanding


1,303,990




1,312,797




1,308,417




1,313,603



Total equity units


120,232,789




121,066,603




120,088,940




121,509,814



 

The following table reconciles operating income to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the three and nine months ended September 30, 2023 and October 1, 2022.  




Three months ended


Nine months ended



September 30,


October 1,


September 30,


October 1,

Reconciliation of Operating Income to Adjusted Cash Gross Profit


2023


2022


2023


2022

($ in thousands)









Operating income


$   127,983


$   127,062


$   242,141


$   204,003

General and administrative expenses


50,895


39,232


150,731


136,897

Depreciation, depletion, amortization and accretion


57,452


52,133


163,133


150,483

Transaction costs


17,442


727


19,518


2,637

Gain on sale of property, plant and equipment


(2,134)


(1,343)


(5,787)


(6,293)

Adjusted Cash Gross Profit (exclusive of items shown separately)


$   251,638


$   217,811


$   569,736


$   487,727

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


33.9 %


31.8 %


31.1 %


28.5 %

_______________________________________________________

(1)   Adjusted Cash Gross Profit Margin is defined as Adjusted Cash Gross Profit as a percentage of net revenue.

 

The following table reconciles net cash provided by operating activities to free cash flow for the three and nine months ended September 30, 2023 and October 1, 2022. 




Three months ended


Nine months ended



September 30,


October 1,


September 30,


October 1,

($ in thousands)


2023


2022


2023


2022

Net income


$     232,725


$       87,651


$     286,241


$     245,617

Non-cash items


75,262


66,334


201,680


52,902

Net income adjusted for non-cash items


307,987


153,985


487,921


298,519

Change in working capital accounts


(158,405)


(38,048)


(244,297)


(166,328)

Net cash provided by operating activities


149,582


115,937


243,624


132,191

Capital expenditures, net of asset sales


(51,289)


(56,557)


(172,422)


(180,710)

Free cash flow


$       98,293


$       59,380


$       71,202


$     (48,519)

 

Contact:

Andy Larkin
VP, Investor Relations
[email protected]
720-618-6013

SOURCE Summit Materials, Inc.


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