DENVER--(BUSINESS WIRE)--Summit Materials, Inc. (NYSE: SUM, “Summit” or the “Company”), a leading vertically integrated construction materials company, today announced results for the second quarter 2017.
For the three months ended July 1, 2017, the Company reported basic earnings per share of $0.47 on net income of $50.0 million, compared to basic earnings per share of $0.21 on net income of $13.4 million in the prior year period. On an adjusted diluted basis, Summit reported diluted earnings per share of $0.48 on net income of $53.6 million, compared to adjusted diluted earnings per share of $0.45 on net income of $46.2 million in the prior year period. Operating income increased by 75.6% to $82.4 million in the second quarter 2017, versus $46.9 million in the prior year period.
“We delivered exceptional growth in net revenue, operating income and net income during the second quarter, driven by a combination of strong seasonal demand across all lines of business, together with contributions from recently completed acquisitions,” stated Tom Hill, CEO of Summit Materials. “Adjusted EBITDA increased 17.9% year-over-year to $135.2 million, supported by favorable market conditions in our West Region and in our Cement Segment. Organic growth contributed one-third of the year-over-year improvement in Adjusted EBITDA, as supported by ongoing price, volume and cost optimization initiatives at each of our operating companies.”
“Organic sales volumes within our materials lines of business have exceeded our expectations coming into the year,” continued Hill. “Organic cement and aggregates sales volumes increased 7.1% and 6.1%, respectively, in the second quarter 2017, when compared to the prior year period. Cement sales volumes in our northern Mississippi River markets increased nearly 25% year-over-year, while aggregates demand in Texas and Utah benefited from a combination of favorable demographic trends and recent state-level funding initiatives that support multi-year investments in transportation infrastructure.”
“Organic cement pricing increased 3.0% year-over-year, in-line with expectations, while organic aggregates pricing declined on a year-over-year basis due to a less favorable sales mix in our Vancouver and Austin markets, given increased sales of lower priced products. Outside of Austin and Vancouver, organic aggregates pricing increased on a year-over-year basis in nearly all of our other platform markets,” stated Hill.
“We continue to realize superior margin capture throughout our business,” noted Hill. “Aggregates adjusted cash gross profit margin increased nearly 500 basis points year-over-year to 68.3%, while cement adjusted cash gross profit margin increased 520 basis points year-over-year to 57.4%. On a trailing twelve month basis through the second quarter 2017, Adjusted EBITDA margin improved by nearly 100 basis points to 24.7%, versus the comparable year period.”
“We have closed on four acquisitions since our last quarterly update in May 2017,” continued Hill. “Together, these bolt-on transactions expand and enhance our vertically-integrated materials-based businesses in Texas, Kentucky, Colorado and South Carolina. Given partial-year contributions from these four acquisitions, we have increased our Adjusted EBITDA guidance for the second time this year. For the full-year 2017, we now forecast total Adjusted EBITDA in the range of $440 million to $455 million, up from the prior range of $430 million to $445 million.”
“Our acquisition pipeline remains very active, with more than 20 transactions currently under review,” continued Hill. “On a year-to-date basis, we have invested $309 million across ten transactions, leading us to upwardly revise our annualized acquired EBITDA target from a range of approximately $40 million to $60 million to a range of $50 million to $70 million for the full-year 2017.”
“We ended the second quarter with significant available liquidity on our balance sheet,” stated Brian Harris, CFO of Summit Materials. “As of July 1, 2017, we had more than $570 million in cash and availability under our revolving credit facility, up from $200 million in the prior year period, due mainly to the completion of a $300 million 5.125% senior notes offering in June 2017. This opportunistic capital raise allowed us to lower our overall cost of debt, while equipping us to finance the ongoing strategic growth of our business.”
“Net leverage was 3.7x exiting the second quarter 2017, versus 4.5x in the prior year period and down from 3.9x at year-end 2016,” continued Harris. “Looking ahead, we expect net leverage to be in a range of 3.0x to 3.5x by year-end 2017, assuming the mid-point of our upwardly revised 2017 Adjusted EBITDA guidance.”
“Given continued strength in organic volume growth, record levels of available liquidity and multiple near-term acquisitions on the horizon, Summit is well positioned as we transition into the second half of the year,” concluded Hill. “We are pleased with our performance in the second quarter and look forward to building on the momentum evident in our business.”
Second Quarter 2017 | Financial Performance
Net revenue increased by 15.9% to $478.4 million in the second quarter 2017, versus $412.6 in the prior year period. The improvement in net revenue was primarily attributable to acquisition-related contributions, increased organic sales volumes across all lines of business, together with improved organic average selling prices in cement and ready-mix concrete. Operating income increased by 75.6% to $82.4 million in the second quarter 2017, when compared to the prior year period. Adjusted EBITDA increased 17.9% year-over-year to $135.2 million, versus $114.7 million in the prior year period. Adjusted EBITDA margin increased 50 basis points to 28.3% in the second quarter 2017, when compared to the prior year period.
The Company reported an adjusted diluted net income of $0.48 per diluted share in the second quarter 2017, using 111.5 million weighted-average total shares. The shares of Class A common stock are issued by Summit Materials, Inc., and as such the earnings and equity interests of non-controlling interests, including LP units, are not included in basic earnings per share under generally accepted accounting principles. Management believes excluding non-recurring and non-operating changes provides investors with information that may be more comparable to the financial performance of our peers.
West Segment: Operating income increased 25.5% to $42.9 million in the second quarter 2017, when compared to the prior year period. Adjusted EBITDA increased by 19.6% to $60.5 million in the second quarter 2017, when compared to the prior year period. Adjusted EBITDA margin was 24.2% in the second quarter 2017, flat versus the prior year. Year-over-year organic improvements in aggregates and ready-mix concrete sales volumes, together with acquisition-related EBITDA contributions, more than offset lower organic asphalt sales volumes and organic declines in average selling prices.
East Segment: Operating income declined 5.7% to $21.1 million in the second quarter 2017, as increases in depreciation, and to a lesser extent general and administrative expenses, exceeded acquisition-related revenue gains due to the seasonality of the business. Adjusted EBITDA increased by 8.7% to $38.8 million in the second quarter 2017, when compared to the prior year period. Adjusted EBITDA margin declined to 26.9% in the second quarter 2017, versus 28.8% in the prior year period. Year-over-year organic improvements in average selling prices on aggregates and ready-mix concrete, improved organic asphalt sales volumes, together with acquisition-related EBITDA contributions, were offset by organic sales volume declines in aggregates and ready-mix concrete, due in part to weather-related factors.
Cement Segment: Operating income increased 18.1% to $33.7 million in the second quarter 2017, when compared to the prior year period. The increase in operating income was primarily due to increased organic growth in sales volumes and pricing. Adjusted EBITDA increased by 16.5% to $43.8 million in the second quarter 2017, when compared to the prior year period, resulting primarily from pricing improvements and operational efficiencies. Adjusted EBITDA margin increased to 52.0% in the second quarter 2017, versus 47.2% in the prior year period. A year-over-year increase in average selling prices, organic sales volumes, improved production efficiencies and cost reductions all contributed to improved results.
Second Quarter 2017 | Results by Line of Business
Aggregates Business: Aggregates net revenues increased by 15.3% to $84.2 million in the second quarter 2017, when compared to the prior year period. Aggregates adjusted cash gross profit margin increased to 68.3% in the second quarter 2017, versus 63.3% in the prior year period. Organic aggregates sales volumes increased 6.1% in the second quarter 2017, due mainly to increased demand in Texas, Utah, Virginia and Vancouver. Organic aggregates average selling prices declined 1.7% in the second quarter, due in part to an unfavorable sales mix in the Vancouver and Austin markets. Excluding the Vancouver and Austin markets, organic aggregates average selling prices increased 3.5% on a year-over-year basis.
Cement Business: Cement segment net revenues increased 5.8% to $84.2 million in the second quarter 2017, when compared to the prior-year period. Cement adjusted cash gross profit margin was 57.4% in the second quarter 2017, versus 52.2% in the prior-year period. Organic sales volumes and average selling prices of cement increased 7.1% and 3.0%, respectively, when compared to the prior year period. Strong regional demand in the Company’s northern markets drove organic volume growth in the second quarter, while continued organic growth in sales prices was attributable to previously announced price increases.
Products Business: Net revenues increased 18.3% to $234.6 million in the second quarter 2017, when compared to the prior year period. Products adjusted cash gross profit margin declined to 25.6% in the second quarter 2017, versus 26.9% in the prior year period. Organic sales volumes of ready-mix concrete and asphalt increased 9.2% and 3.6%, respectively, when compared to the prior-year period. With regard to organic ready-mix sales volumes, demand was strongest in the Houston, Austin, northeast Texas and Kansas markets. With regard to organic asphalt sales volumes, demand was strongest in the Austin, Kansas and Kentucky markets.
Acquisition Program Update
The Company has completed ten acquisitions on a year-to-date basis, including four transactions that have closed since May 2017. Total investment spend across the ten acquisitions completed year-to-date 2017 is approximately $309 million, including $130 million for the four acquisitions completed since May 2017.
Glasscock Company (South Carolina). Glasscock is a vertically integrated aggregates and ready-mix business serving the East Columbia, South Carolina market. This acquisition complements Summit’s existing aggregates footprint in central South Carolina. The Company estimates that Glasscock’s exposure is mainly weighted toward residential and non-residential construction markets, together with some public construction market exposure. Summit closed on its acquisition of Glasscock in May 2017.
Great Southern Ready Mix (Texas). Great Southern is a ready-mix business that provides for further expansion into the north/northeast Houston market. The Company estimates that Great Southern’s exposure is entirely weighted toward residential and non-residential construction markets. Summit closed on its acquisition of Great Southern in July 2017.
Ready-Mix Concrete of Somerset (Kentucky). Ready-Mix Concrete is a ready-mix concrete business serving the central Kentucky region. The Company estimates that Ready-Mix’s exposure is mainly weighted toward residential and non-residential construction markets, together with some public construction market exposure. Summit closed on its acquisition of Ready-Mix Concrete in July 2017.
Northwest Ready Mix (Colorado). Northwest Ready Mix is an aggregates and ready-mix concrete business that allows for further expansion in the intermountain region outside of Steamboat Springs, Colorado. The Company estimates that Northwest Ready Mix’s exposure is entirely weighted toward residential and non-residential construction markets. Summit closed on its acquisition of Northwest Ready Mix in July 2017.
Liquidity and Capital Resources
At July 1, 2017, the Company had cash on hand of $353.1 million and borrowing capacity under its revolving credit facility of $218.9 million. The borrowing capacity on the revolving credit facility is fully available to the Company within the terms and covenant requirements of its credit agreement. As of July 1, 2017, the Company had $1.8 billion in debt outstanding.
2017 Financial Guidance & Outlook
The Company is raising its full-year 2017 Adjusted EBITDA guidance from a range of $430.0 million to $445.0 million to a range of $440 million to $455 million. The upwardly revised Adjusted EBITDA outlook assumes the partial-year impact of the four acquisitions completed since May 2017. No additional potential acquisitions are included within the Company’s full-year 2017 Adjusted EBITDA guidance. Including the impact of the ten acquisitions completed on a year-to-date basis, the Company is reiterating its gross capital expenditure guidance of $140 million to $160 million for the full-year 2017.
Webcast and Conference Call Information
Summit Materials will conduct a conference call today at 12:30 p.m. eastern time (10:30 a.m. mountain time) to review the Company’s second quarter 2017 financial results. 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:
| Domestic Live: | 1-877-407-0784 | ||||
| International Live: | 1-201-689-8560 | ||||
| Conference ID: | 86972581 | ||||
To listen to a replay of the teleconference, which will be available through September 2, 2017:
| Domestic Replay: | 1-844-512-2921 | ||||
| International Replay: | 1-412-317-6671 | ||||
| Conference ID: | 13665400 | ||||
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, and 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 EPS, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow and Net Leverage 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, Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Cash Gross Profit 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 Net Income (loss), Adjusted 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. 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 contains “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. Any and all statements made relating to the expectations for our anticipated benefits from recent acquisitions, the macroeconomic outlook for our markets, potential acquisition activity, our estimated and projected earnings, margins, costs, expenditures, cash flows, sales volumes and financial results are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those expected. 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 impact 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 achieved. 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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. Such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. 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 otherwise required by law.
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SUMMIT MATERIALS, INC. AND SUBSIDIARIES |
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Unaudited Consolidated Statements of Operations |
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($ in thousands, except share and per share amounts) |
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| Three months ended | Six months ended | |||||||||||||||||||
| July 1, | July 2, | July 1, | July 2, | |||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Product | $ | 397,726 | $ | 341,341 | $ | 622,743 | $ | 521,443 | ||||||||||||
| Service | 80,642 | 71,295 | 114,669 | 99,232 | ||||||||||||||||
| Net revenue | 478,368 | 412,636 | 737,412 | 620,675 | ||||||||||||||||
| Delivery and subcontract revenue | 45,725 | 32,638 | 70,958 | 52,978 | ||||||||||||||||
| Total revenue | 524,093 | 445,274 | 808,370 | 673,653 | ||||||||||||||||
| Cost of revenue (excluding items shown separately below): | ||||||||||||||||||||
| Product | 233,592 | 202,029 | 400,560 | 334,425 | ||||||||||||||||
| Service | 56,587 | 50,471 | 81,958 | 74,525 | ||||||||||||||||
| Net cost of revenue | 290,179 | 252,500 | 482,518 | 408,950 | ||||||||||||||||
| Delivery and subcontract cost | 45,725 | 32,638 | 70,958 | 52,978 | ||||||||||||||||
| Total cost of revenue | 335,904 | 285,138 | 553,476 | 461,928 | ||||||||||||||||
| General and administrative expenses | 58,086 | 75,490 | 116,554 | 120,860 | ||||||||||||||||
| Depreciation, depletion, amortization and accretion | 45,039 | 37,408 | 84,787 | 69,768 | ||||||||||||||||
| Transaction costs | 2,620 | 290 | 3,893 | 3,606 | ||||||||||||||||
| Operating income | 82,444 | 46,948 | 49,660 | 17,491 | ||||||||||||||||
| Interest expense | 25,986 | 25,617 | 50,955 | 47,194 | ||||||||||||||||
| Loss on debt financings | — | — | 190 | — | ||||||||||||||||
| Tax receivable agreement expense | 1,525 | — | 1,525 | — | ||||||||||||||||
| Other (income) expense, net | (590 | ) | 882 | (1,247 | ) | 548 | ||||||||||||||
| Income (loss) from operations before taxes | 55,523 | 20,449 | (1,763 | ) | (30,251 | ) | ||||||||||||||
| Income tax expense (benefit) | 3,435 | (1,056 | ) | 1,257 | (9,222 | ) | ||||||||||||||
| Net income (loss) | 52,088 | 21,505 | (3,020 | ) | (21,029 | ) | ||||||||||||||
| Net income (loss) attributable to noncontrolling interest in subsidiaries | 12 | 44 | (86 | ) | (35 | ) | ||||||||||||||
| Net income (loss) attributable to Summit Holdings (1) | 2,076 | 8,090 | (490 | ) | (13,247 | ) | ||||||||||||||
| Net income (loss) attributable to Summit Inc. | $ | 50,000 | $ | 13,371 | $ | (2,444 | ) | $ | (7,747 | ) | ||||||||||
| Income (loss) per share of Class A common stock: | ||||||||||||||||||||
| Basic | $ | 0.47 | $ | 0.21 | $ | (0.02 | ) | $ | (0.14 | ) | ||||||||||
| Diluted | $ | 0.46 | $ | 0.21 | $ | (0.02 | ) | $ | (0.20 | ) | ||||||||||
| Weighted average shares of Class A common stock: | ||||||||||||||||||||
| Basic | 106,898,512 | 62,743,149 | 106,035,087 | 56,812,906 | ||||||||||||||||
| Diluted | 107,908,888 | 63,893,909 | 106,035,087 | 100,954,233 | ||||||||||||||||
_____________________
| (1) | Represents portion of business owned by pre-IPO investors rather than by Summit. | |
| SUMMIT MATERIALS, INC. AND SUBSIDIARIES | |||||||||||
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Consolidated Balance Sheets |
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($ in thousands, except share and per share amounts) |
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| July 1, | December 31, | ||||||||||
| 2017 | 2016 | ||||||||||
| (unaudited) | (audited) | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 353,063 | $ | 143,392 | |||||||
| Accounts receivable, net | 247,546 | 162,377 | |||||||||
| Costs and estimated earnings in excess of billings | 29,212 | 7,450 | |||||||||
| Inventories | 182,886 | 157,679 | |||||||||
| Other current assets | 12,352 | 12,800 | |||||||||
| Total current assets | 825,059 | 483,698 | |||||||||
| Property, plant and equipment, less accumulated depreciation, depletion and amortization (July 1, 2017 - $554,433 and December 31, 2016 - $484,554) | 1,555,816 | 1,446,452 | |||||||||
| Goodwill | 918,511 | 782,212 | |||||||||
| Intangible assets, less accumulated amortization (July 1, 2017 - $6,041 and December 31, 2016 - $7,854) | 17,344 | 17,989 | |||||||||
| Other assets | 48,438 | 51,115 | |||||||||
| Total assets | $ | 3,365,168 | $ | 2,781,466 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of debt | $ | 6,500 | $ | 6,500 | |||||||
| Current portion of acquisition-related liabilities | 17,721 | 24,162 | |||||||||
| Accounts payable | 116,817 | 81,565 | |||||||||
| Accrued expenses | 119,260 | 111,605 | |||||||||
| Billings in excess of costs and estimated earnings | 16,873 | 15,456 | |||||||||
| Total current liabilities | 277,171 | 239,288 | |||||||||
| Long-term debt | 1,807,713 | 1,514,456 | |||||||||
| Acquisition-related liabilities | 38,039 | 32,664 | |||||||||
| Other noncurrent liabilities | 129,296 | 135,019 | |||||||||
| Total liabilities | 2,252,219 | 1,921,427 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity: | |||||||||||
| Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 107,491,979 and 96,033,222 shares issued and outstanding as of July 1, 2017 and December 31, 2016, respectively | 1,076 | 961 | |||||||||
| Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 100 shares issued and outstanding as of July 1, 2017 and December 31, 2016 | — | — | |||||||||
| Additional paid-in capital | 1,079,595 | 824,304 | |||||||||
| Accumulated earnings | 16,584 | 19,028 | |||||||||
| Accumulated other comprehensive income (loss) | 2,273 | (2,249 | ) | ||||||||
| Stockholders’ equity | 1,099,528 | 842,044 | |||||||||
| Noncontrolling interest in consolidated subsidiaries | 1,292 | 1,378 | |||||||||
| Noncontrolling interest in Summit Holdings | 12,129 | 16,617 | |||||||||
| Total stockholders’ equity | 1,112,949 | 860,039 | |||||||||
| Total liabilities and stockholders’ equity | $ | 3,365,168 | $ | 2,781,466 | |||||||
| SUMMIT MATERIALS, INC. AND SUBSIDIARIES | ||||||||||||
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Unaudited Consolidated Statements of Cash Flows |
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($ in thousands) |
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| Six months ended | ||||||||||||
| July 1, | July 2, | |||||||||||
| 2017 | 2016 | |||||||||||
| Cash flow from operating activities: | ||||||||||||
| Net loss | $ | (3,020 | ) | $ | (21,029 | ) | ||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
| Depreciation, depletion, amortization and accretion | 90,781 | 76,252 | ||||||||||
| Share-based compensation expense | 9,424 | 29,817 | ||||||||||
| Deferred income tax benefit | 374 | (10,040 | ) | |||||||||
| Net gain on asset disposals | (4,052 | ) | (3,717 | ) | ||||||||
| Non-cash loss on debt financings | 85 | — | ||||||||||
| Other | 710 | 129 | ||||||||||
| Decrease (increase) in operating assets, net of acquisitions: | ||||||||||||
| Accounts receivable, net | (68,539 | ) | (55,489 | ) | ||||||||
| Inventories | (19,272 | ) | (27,948 | ) | ||||||||
| Costs and estimated earnings in excess of billings | (21,571 | ) | (24,542 | ) | ||||||||
| Other current assets | 3,552 | (2,646 | ) | |||||||||
| Other assets | (1,565 | ) | (367 | ) | ||||||||
| Increase (decrease) in operating liabilities, net of acquisitions: | ||||||||||||
| Accounts payable | 28,550 | 9,682 | ||||||||||
| Accrued expenses | (6,789 | ) | 10,343 | |||||||||
| Billings in excess of costs and estimated earnings | 1,252 | (3,523 | ) | |||||||||
| Other liabilities | 1,229 | (3,422 | ) | |||||||||
| Net cash provided by (used in) operating activities | 11,149 | (26,500 | ) | |||||||||
| Cash flow from investing activities: | ||||||||||||
| Acquisitions, net of cash acquired | (213,124 | ) | (296,664 | ) | ||||||||
| Purchases of property, plant and equipment | (109,088 | ) | (91,669 | ) | ||||||||
| Proceeds from the sale of property, plant and equipment | 8,411 | 9,442 | ||||||||||
| Other | 137 | 1,500 | ||||||||||
| Net cash used for investing activities | (313,664 | ) | (377,391 | ) | ||||||||
| Cash flow from financing activities: | ||||||||||||
| Proceeds from equity offerings | 237,600 | — | ||||||||||
| Capital issuance costs | (627 | ) | (136 | ) | ||||||||
| Proceeds from debt issuances | 302,000 | 321,000 | ||||||||||
| Debt issuance costs | (5,308 | ) | (5,110 | ) | ||||||||
| Payments on debt | (9,288 | ) | (63,676 | ) | ||||||||
| Payments on acquisition-related liabilities | (17,204 | ) | (25,662 | ) | ||||||||
| Distributions from partnership | (79 | ) | (373 | ) | ||||||||
| Other | 4,904 | 113 | ||||||||||
| Net cash provided by financing activities | 511,998 | 226,156 | ||||||||||
| Impact of foreign currency on cash | 188 | 498 | ||||||||||
| Net increase (decrease) in cash | 209,671 | (177,237 | ) | |||||||||
| Cash and cash equivalents—beginning of period | 143,392 | 186,405 | ||||||||||
| Cash and cash equivalents—end of period | $ | 353,063 | $ | 9,168 | ||||||||
| SUMMIT MATERIALS, INC. AND SUBSIDIARIES | |||||||||||||||||||||
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Unaudited Revenue Data by Segment and Line of Business |
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($ in thousands) |
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| Three months ended | Six months ended | ||||||||||||||||||||
| July 1, | July 2, | July 1, | July 2, | ||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
| Segment Net Revenue: | |||||||||||||||||||||
| West | $ | 249,849 | $ | 208,974 | $ | 381,823 | $ | 322,821 | |||||||||||||
| East | 144,290 | 124,045 | 227,525 | 184,249 | |||||||||||||||||
| Cement | 84,229 | 79,617 | 128,064 | 113,605 | |||||||||||||||||
| Net Revenue | $ | 478,368 | $ | 412,636 | $ | 737,412 | $ | 620,675 | |||||||||||||
| Line of Business - Net Revenue: | |||||||||||||||||||||
| Materials | |||||||||||||||||||||
| Aggregates | $ | 84,221 | $ | 73,035 | $ | 145,843 | $ | 122,943 | |||||||||||||
| Cement (1) | 78,893 | 69,968 | 118,328 | 98,504 | |||||||||||||||||
| Products | 234,612 | 198,338 | 358,572 | 299,996 | |||||||||||||||||
| Total Materials and Products | 397,726 | 341,341 | 622,743 | 521,443 | |||||||||||||||||
| Services | 80,642 | 71,295 | 114,669 | 99,232 | |||||||||||||||||
| Net Revenue | $ | 478,368 | $ | 412,636 | $ | 737,412 | $ | 620,675 | |||||||||||||
| Line of Business - Net Cost of Revenue: | |||||||||||||||||||||
| Materials | |||||||||||||||||||||
| Aggregates | $ | 26,740 | $ | 26,787 | $ | 61,522 | $ | 55,278 | |||||||||||||
| Cement | 30,511 | 28,375 | 63,684 | 52,558 | |||||||||||||||||
| Products | 174,622 | 144,951 | 272,363 | 223,134 | |||||||||||||||||
| Total Materials and Products | 231,873 | 200,113 | 397,569 | 330,970 | |||||||||||||||||
| Services | 58,306 | 52,387 | 84,949 | 77,980 | |||||||||||||||||
| Net Cost of Revenue | $ | 290,179 | $ | 252,500 | $ | 482,518 | $ | 408,950 | |||||||||||||
| Line of Business - Adjusted Cash Gross Profit (2): | |||||||||||||||||||||
| Materials | |||||||||||||||||||||
| Aggregates | $ | 57,481 | $ | 46,248 | $ | 84,321 | $ | 67,665 | |||||||||||||
| Cement (3) | 48,382 | 41,593 | 54,644 | 45,946 | |||||||||||||||||
| Products | 59,990 | 53,387 | 86,209 | 76,862 | |||||||||||||||||
| Total Materials and Products | 165,853 | 141,228 | 225,174 | 190,473 | |||||||||||||||||
| Services | 22,336 | 18,908 | 29,720 | 21,252 | |||||||||||||||||
| Adjusted Cash Gross Profit | $ | 188,189 | $ | 160,136 | $ | 254,894 | $ | 211,725 | |||||||||||||
| Adjusted Cash Gross Profit Margin (2) | |||||||||||||||||||||
| Materials | |||||||||||||||||||||
| Aggregates | 68.3 | % | 63.3 | % | 57.8 | % | 55.0 | ||||||||||||||
| Cement (3) | 57.4 | % | 52.2 | % | 42.7 | % | 40.4 | ||||||||||||||
| Products | 25.6 | % | 26.9 | % | 24.0 | % | 25.6 | ||||||||||||||
| Services | 27.7 | % | 26.5 | % | 25.9 | % | 21.4 | ||||||||||||||
| Total Adjusted Cash Gross Profit Margin | 39.3 | % | 38.8 | % | 34.6 | % | 34.1 | ||||||||||||||
_____________________
| (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) |
Previously, we presented gross profit as a non-GAAP metric. We have renamed that metric adjusted cash gross profit to be more descriptive of the calculation. Adjusted cash gross profit calculated as net revenue by line of business less net cost of revenue by line of business. Adjusted cash gross profit margin is defined as adjusted cash gross profit divided by net revenue. |
|
| (3) | The cement adjusted cash gross profit includes the earnings from the waste processing operations, cement swaps and other products. Cement line of business adjusted cash gross profit margin is defined as cement adjusted cash gross profit divided by cement segment net revenue. | |
| SUMMIT MATERIALS, INC. AND SUBSIDIARIES | ||||||||||||||||||||
|
Unaudited Volume and Price Statistics |
||||||||||||||||||||
|
(Units in thousands) |
||||||||||||||||||||
| Three months ended | Six months ended | |||||||||||||||||||
| Total Volume | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||||||
| Aggregates (tons) | 11,286 | 9,683 | 19,249 | 16,645 | ||||||||||||||||
| Cement (tons) | 714 | 659 | 1,075 | 943 | ||||||||||||||||
| Ready-mix concrete (cubic yards) | 1,237 | 953 | 2,143 | 1,715 | ||||||||||||||||
| Asphalt (tons) | 1,517 | 1,316 | 1,880 | 1,533 | ||||||||||||||||
| Three months ended | Six months ended | |||||||||||||||||||
| Pricing | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||||||
| Aggregates (per ton) | $ | 9.97 | $ | 10.02 | $ | 9.92 | $ | 9.74 | ||||||||||||
| Cement (per ton) | 112.09 | 108.89 | 111.89 | 107.38 | ||||||||||||||||
| Ready-mix concrete (per cubic yards) | 104.23 | 102.15 | 103.73 | 103.56 | ||||||||||||||||
| Asphalt (per ton) | 54.94 | 57.45 | 54.76 | 57.57 | ||||||||||||||||
| Year over Year Comparison | Volume | Pricing | Volume | Pricing | ||||||||||||||||
| Aggregates (per ton) | 16.6 | % | (0.5) | % | 15.6 | % | 1.8 | % | ||||||||||||
| Cement (per ton) | 8.3 | % | 2.9 | % | 14.0 | % | 4.2 | % | ||||||||||||
| Ready-mix concrete (per cubic yards) | 29.8 | % | 2.0 | % | 25.0 | % | 0.2 | % | ||||||||||||
| Asphalt (per ton) | 15.3 | % | (4.4) | % | 22.6 | % | (4.9) | % | ||||||||||||
| Year over Year Comparison (Excluding acquisitions) | Volume | Pricing | Volume | Pricing | ||||||||||||||||
| Aggregates (per ton) | 6.1 | % | (1.7) | % | 3.8 | % | 0.2 | % | ||||||||||||
| Cement (per ton) | 7.1 | % | 3.0 | % | 10.2 | % | 3.9 | % | ||||||||||||
| Ready-mix concrete (per cubic yards) | 9.2 | % | 1.1 | % | 0.1 | % | (0.1) | % | ||||||||||||
| Asphalt (per ton) | 3.6 | % | (3.9) | % | 12.3 | % | (4.5) | % | ||||||||||||
| 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 July 1, 2017 | ||||||||||||||||||||
| Gross Revenue | Intercompany | Net | ||||||||||||||||||
| Volumes | Pricing | by Product | Elimination/Delivery | Revenue | ||||||||||||||||
| Aggregates | 11,286 | $ | 9.97 | $ | 112,520 | $ | (28,299 | ) | $ | 84,221 | ||||||||||
| Cement | 714 | 112.09 | 79,985 | (1,092 | ) | 78,893 | ||||||||||||||
| Materials | $ | 192,505 | $ | (29,391 | ) | $ | 163,114 | |||||||||||||
| Ready-mix concrete | 1,237 | 104.23 | 128,942 | (229 | ) | 128,713 | ||||||||||||||
| Asphalt | 1,517 | 54.94 | 83,371 | (124 | ) | 83,247 | ||||||||||||||
| Other Products | 95,419 | (72,767 | ) | 22,652 | ||||||||||||||||
| Products | $ | 307,732 | $ | (73,120 | ) | $ | 234,612 | |||||||||||||
| Six months ended July 1, 2017 | ||||||||||||||||||||
| Gross Revenue | Intercompany | Net | ||||||||||||||||||
| Volumes | Pricing | by Product | Elimination/Delivery | Revenue | ||||||||||||||||
| Aggregates | 19,249 | $ | 9.92 | $ | 190,890 | $ | (45,047 | ) | $ | 145,843 | ||||||||||
| Cement | 1,075 | 111.89 | 120,289 | (1,961 | ) | 118,328 | ||||||||||||||
| Materials | $ | 311,179 | $ | (47,008 | ) | $ | 264,171 | |||||||||||||
| Ready-mix concrete | 2,143 | 103.73 | 222,300 | (410 | ) | 221,890 | ||||||||||||||
| Asphalt | 1,880 | 54.76 | 102,933 | (185 | ) | 102,748 | ||||||||||||||
| Other Products | 152,982 | (119,048 | ) | 33,934 | ||||||||||||||||
| Products | $ | 478,215 | $ | (119,643 | ) | $ | 358,572 | |||||||||||||
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited
Reconciliations of Non-GAAP Financial Measures
($ in thousands,
except share and per share amounts)
The tables below reconcile our net income (loss) to Adjusted EBITDA by segment for the three and six months ended July 1, 2017 and July 2, 2016 and the twelve months ended July 1, 2017 and July 2, 2016.
|
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
Three months ended July 1, 2017 | ||||||||||||||||||||||||
| by Segment | West | East | Cement | Corporate | Consolidated | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||
| Net income (loss) | $ | 40,529 | $ | 20,600 | $ | 34,442 | $ | (43,483 | ) | $ | 52,088 | ||||||||||||||
| Interest expense (income) | 1,843 | 929 | (684 | ) | 23,898 | 25,986 | |||||||||||||||||||
| Income tax expense (benefit) | 533 | (21 | ) | — | 2,923 | 3,435 | |||||||||||||||||||
| Depreciation, depletion and amortization | 17,224 | 16,740 | 9,961 | 662 | 44,587 | ||||||||||||||||||||
| EBITDA | $ | 60,129 | $ | 38,248 | $ | 43,719 | $ | (16,000 | ) | $ | 126,096 | ||||||||||||||
| Accretion | 195 | 193 | 64 | — | 452 | ||||||||||||||||||||
| Loss on debt financings | — | — | — | — | — | ||||||||||||||||||||
| Tax receivable agreement expense | — | — | — | 1,525 | 1,525 | ||||||||||||||||||||
| Transaction costs | (28 | ) | — | — | 2,648 | 2,620 | |||||||||||||||||||
| Non-cash compensation | — | — | — | 4,676 | 4,676 | ||||||||||||||||||||
| Other | 224 | 325 | — | (683 | ) | (134 | ) | ||||||||||||||||||
| Adjusted EBITDA | $ | 60,520 | $ | 38,766 | $ | 43,783 | $ | (7,834 | ) | $ | 135,235 | ||||||||||||||
| Adjusted EBITDA Margin (1) | 24.2 | % | 26.9 | % | 52.0 | % | 28.3 | % | |||||||||||||||||
|
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
Three months ended July 2, 2016 | ||||||||||||||||||||||||
| by Segment | West | East | Cement | Corporate | Consolidated | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||
| Net income (loss) | $ | 30,018 | $ | 21,150 | $ | 28,034 | $ | (57,697 | ) | $ | 21,505 | ||||||||||||||
| Interest expense | 2,545 | 2,008 | 326 | 20,738 | 25,617 | ||||||||||||||||||||
| Income tax expense (benefit) | 139 | — | — | (1,195 | ) | (1,056 | ) | ||||||||||||||||||
| Depreciation, depletion and amortization | 15,994 | 12,140 | 8,261 | 643 | 37,038 | ||||||||||||||||||||
| EBITDA | $ | 48,696 | $ | 35,298 | $ | 36,621 | $ | (37,511 | ) | $ | 83,104 | ||||||||||||||
| Accretion | 192 | 170 | 8 | — | 370 | ||||||||||||||||||||
| IPO/ Legacy equity modification costs | — | — | — | 24,751 | 24,751 | ||||||||||||||||||||
| Transaction costs | 216 | 5 | — | 69 | 290 | ||||||||||||||||||||
| Non-cash compensation | — | — | — | 3,029 | 3,029 | ||||||||||||||||||||
| Other | 1,481 | 201 | 964 | 542 | 3,188 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 50,585 | $ | 35,674 | $ | 37,593 | $ | (9,120 | ) | $ | 114,732 | ||||||||||||||
| Adjusted EBITDA Margin (1) | 24.2 | % | 28.8 | % | 47.2 | % | 27.8 | % | |||||||||||||||||
| Reconciliation of Net Income (Loss) to Adjusted EBITDA | Six months ended July 1, 2017 | ||||||||||||||||||||||||
| by Segment | West | East | Cement | Corporate | Consolidated | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||
| Net income (loss) | $ | 38,503 | $ | 8,507 | $ | 29,729 | $ | (79,759 | ) | $ | (3,020 | ) | |||||||||||||
| Interest expense (income) | 3,747 | 1,614 | (1,334 | ) | 46,928 | 50,955 | |||||||||||||||||||
| Income tax expense (benefit) | 535 | (21 | ) | — | 743 | 1,257 | |||||||||||||||||||
| Depreciation, depletion and amortization | 32,692 | 31,927 | 17,951 | 1,321 | 83,891 | ||||||||||||||||||||
| EBITDA | $ | 75,477 | $ | 42,027 | $ | 46,346 | $ | (30,767 | ) | $ | 133,083 | ||||||||||||||
| Accretion | 390 | 384 | 122 | — | 896 | ||||||||||||||||||||
| Loss on debt financings | — | — | — | 190 | 190 | ||||||||||||||||||||
| Tax receivable agreement expense | — | — | — | 1,525 | 1,525 | ||||||||||||||||||||
| Transaction costs | 9 | — | — | 3,884 | 3,893 | ||||||||||||||||||||
| Non-cash compensation | — | — | — | 9,424 | 9,424 | ||||||||||||||||||||
| Other | 343 | 703 | — | (1,192 | ) | (146 | ) | ||||||||||||||||||
| Adjusted EBITDA | $ | 76,219 | $ | 43,114 | $ | 46,468 | $ | (16,936 | ) | $ | 148,865 | ||||||||||||||
| Adjusted EBITDA Margin (1) | 20.0 | % | 18.9 | % | 36.3 | % | 20.2 | % | |||||||||||||||||
| Reconciliation of Net Income (Loss) to Adjusted EBITDA | Six months ended July 2, 2016 | ||||||||||||||||||||||||
| by Segment | West | East | Cement | Corporate | Consolidated | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||
| Net income (loss) | $ | 25,456 | $ | 11,712 | $ | 20,572 | $ | (78,769 | ) | $ | (21,029 | ) | |||||||||||||
| Interest expense | 4,531 | 3,898 | 3,500 | 35,265 | 47,194 | ||||||||||||||||||||
| Income tax expense (benefit) | 78 | — | — | (9,300 | ) | (9,222 | ) | ||||||||||||||||||
| Depreciation, depletion and amortization | 31,743 | 22,412 | 13,506 | 1,277 | 68,938 | ||||||||||||||||||||
| EBITDA | $ | 61,808 | $ | 38,022 | $ | 37,578 | $ | (51,527 | ) | $ | 85,881 | ||||||||||||||
| Accretion | 479 | 329 | 22 | — | 830 | ||||||||||||||||||||
| IPO/ Legacy equity modification costs | — | — | — | 24,751 | 24,751 | ||||||||||||||||||||
| Transaction costs | 365 | 5 | — | 3,236 | 3,606 | ||||||||||||||||||||
| Non-cash compensation | — | — | — | 5,065 | 5,065 | ||||||||||||||||||||
| Other | 1,212 | 491 | 964 | 341 | 3,008 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 63,864 | $ | 38,847 | $ | 38,564 | $ | (18,134 | ) | $ | 123,141 | ||||||||||||||
| Adjusted EBITDA Margin (1) | 19.8 | % | 21.1 | % | 33.9 | % | 19.8 | % | |||||||||||||||||
| Twelve months ended (2) | ||||||||||||
| Reconciliation of Net Income to Adjusted EBITDA | July 1, 2017 | July 2, 2016 | ||||||||||
| (in thousands) | ||||||||||||
| Net income | $ | 64,135 | $ | 60,259 | ||||||||
| Interest expense | 101,297 | 90,319 | ||||||||||
| Income tax expense (benefit) | 5,180 | (17,672 | ) | |||||||||
| Depreciation, depletion and amortization | 162,689 | 134,510 | ||||||||||
| EBITDA | $ | 333,301 | $ | 267,416 | ||||||||
| Accretion | 1,630 | 1,469 | ||||||||||
| IPO/ Legacy equity modification costs | 12,506 | 24,751 | ||||||||||
| Loss on debt financings | 190 | 39,959 | ||||||||||
| Tax receivable agreement expense | 16,463 | — | ||||||||||
| Transaction costs | 7,084 | 5,385 | ||||||||||
| Management fees and expenses | (1,379 | ) | — | |||||||||
| Non-cash compensation | 17,042 | 7,944 | ||||||||||
| Other | 10,234 | (13,048 | ) | |||||||||
| Adjusted EBITDA | $ | 397,071 | $ | 333,876 | ||||||||
| Adjusted EBITDA Margin (1) | 24.7 | % | 23.7 | % | ||||||||
_____________________
| (1) | Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of net revenue. | |
| (2) | Information for the twelve months ended July 1, 2017 is calculated as the six months ended July 1, 2017 plus the year ended December 31, 2016 less the six months ended July 2, 2016. Information for the twelve months ended July 2, 2016 is calculated as the six months ended July 2, 2016 plus the year ended January 2, 2016 less the six months ended June 27, 2015. This presentation is not in accordance with U.S. GAAP. We believe this information is useful to investors as we use it to evaluate our financial performance for ongoing planning purposes, including a continuous assessment of our financial performance in comparison to budgets and internal projections. In addition, we use such trailing twelve month financial data to test compliance with covenants under our senior secured credit facilities. | |
The table below reconciles our net income (loss) per share attributable to Summit Materials, Inc. to adjusted diluted net income (loss) per share for the three and six months ended July 1, 2017 and July 2, 2016. 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 (loss) per share.
| Three months ended | Six months ended | |||||||||||||||||||||||||||
| July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||||||||||||||||
| Reconciliation of Net Income (Loss) Per Share to Adjusted Diluted EPS |
Net |
Per |
Net |
Per |
Net |
Per |
Net |
Per |
||||||||||||||||||||
| Net income (loss) attributable to Summit Materials, Inc. | $ | 50,000 | $ | 0.45 | $ | 13,371 | $ | 0.13 | $ | (2,444 | ) | $ | (0.02 | ) | $ | (7,747 | ) | $ | (0.08 | ) | ||||||||
| Adjustments: | ||||||||||||||||||||||||||||
| Net income (loss) attributable to noncontrolling interest | 2,076 | 0.02 | 8,090 | 0.08 | (490 | ) | — | (13,247 | ) | (0.13 | ) | |||||||||||||||||
| IPO/ Legacy equity modification costs | — | — | 24,751 | 0.24 | — | — | 24,751 | 0.24 | ||||||||||||||||||||
| Tax receivable agreement expense | 1,525 | 0.01 | — | — | 1,525 | 0.01 | — | — | ||||||||||||||||||||
| Loss on debt financings | — | — | — | — | 190 | — | — | — | ||||||||||||||||||||
| Adjusted diluted net income (loss) | $ | 53,601 | $ | 0.48 | $ | 46,212 | $ | 0.45 | $ | (1,219 | ) | $ | (0.01 | ) | $ | 3,757 | $ | 0.04 | ||||||||||
| Weighted-average shares: | ||||||||||||||||||||||||||||
| Class A common stock | 106,898,512 | 62,743,149 | 106,035,087 | 56,812,906 | ||||||||||||||||||||||||
| LP Units outstanding | 4,574,104 | 38,418,331 | 4,821,955 | 44,339,911 | ||||||||||||||||||||||||
| Total equity interest | 111,472,616 | 101,161,480 | 110,857,042 | 101,152,817 | ||||||||||||||||||||||||
The following table reconciles operating income to adjusted cash gross profit and adjusted cash gross profit margin for the three and six months ended July 1, 2017 and July 2, 2016.
| Three months ended | Six months ended | |||||||||||||||||||
| July 1, | July 2, | July 1, | July 2, | |||||||||||||||||
| Reconciliation of Operating Income to Adjusted Cash Gross Profit | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||
| Operating Income | $ | 82,444 | $ | 46,948 | $ | 49,660 | $ | 17,491 | ||||||||||||
| General and administrative expenses | 58,086 | 75,490 | 116,554 | 120,860 | ||||||||||||||||
| Depreciation, depletion, amortization and accretion | 45,039 | 37,408 | 84,787 | 69,768 | ||||||||||||||||
| Transaction costs | 2,620 | 290 | 3,893 | 3,606 | ||||||||||||||||
| Adjusted Cash Gross Profit (exclusive of items shown separately) | $ | 188,189 | $ | 160,136 | $ | 254,894 | $ | 211,725 | ||||||||||||
| Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1) | 39.3 | % | 38.8 | % | 34.6 | % | 34.1 | % | ||||||||||||
_____________________
| (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 for operating activities to free cash flow for the three and six months ended July 1, 2017 and July 2, 2016.
| Three months ended | Six months ended | |||||||||||||||||||
| July 1, | July 2, | July 1, | July 2, | |||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Net income (loss) | $ | 52,088 | $ | 21,505 | $ | (3,020 | ) | $ | (21,029 | ) | ||||||||||
| Non-cash items | 52,382 | 55,158 | 97,322 | 92,441 | ||||||||||||||||
| Net income adjusted for non-cash items | 104,470 | 76,663 | 94,302 | 71,412 | ||||||||||||||||
| Change in working capital accounts | (47,782 | ) | (61,205 | ) | (83,153 | ) | (97,912 | ) | ||||||||||||
| Net cash provided by (used in) operating activities | 56,688 | 15,458 | 11,149 | (26,500 | ) | |||||||||||||||
| Capital expenditures, net of asset sales | (53,946 | ) | (49,121 | ) | (100,677 | ) | (82,227 | ) | ||||||||||||
| Free cash flow | $ | 2,742 | $ | (33,663 | ) | $ | (89,528 | ) | $ | (108,727 | ) | |||||||||
