Summit Materials, Inc. Reports First Quarter 2020 Results

- Record Net Revenue increased 11.9% to $342.4 million

-Aggregates volumes increased 9.7%

- Adjusted EBITDA increased 149.1% to $16.4 million

DENVER--()--Summit Materials, Inc. (NYSE: SUM, “Summit,” "Summit Inc." or the “Company”), a leading vertically integrated construction materials company, today announced results for the first quarter 2020.

For the three months ended March 28, 2020, the Company reported net loss attributable to Summit Inc. of $(45.0) million, or $(0.40) per basic share, compared to net loss attributable to Summit Inc. of $(68.8) million, or $(0.62) per basic share in the comparable prior year period. Summit reported adjusted diluted net loss of $(56.3) million, or $(0.48) per adjusted diluted share as compared to adjusted diluted net income of $(56.9) million, or $(0.49) per adjusted diluted share in the prior year period.

Summit's net revenue increased 11.9% in the first quarter of 2020 compared to the first quarter of 2019, as ready-mix and aggregates contributed the largest proportion of incremental net revenue. The Company reported an operating loss of $(41.7) million in the first quarter 2020, compared to $(57.7) million in the prior year. Summit's operating margin improved to (12.2)% in the three months ended March 28, 2020 from (18.8)% in the comparable prior year period on net revenue gains in excess of our cost of revenue, partially offset by increases in general and administrative expenses. Adjusted EBITDA increased 149.1% in the first quarter to $16.4 million as compared to $6.6 million in 2019.

For the three months ended March 28, 2020, organic sales volumes increased 9.7% in aggregates, 0.7% in cement and 14.0% in ready-mix concrete and decreased (2.9)% in asphalt, relative to the same period last year, while Q1 2020 organic average selling prices increased 2.2% in aggregates, 2.6% in cement, 6.0% in ready-mix concrete, and 4.1% in asphalt relative to the prior year period.

Tom Hill, CEO of Summit Materials, commented, "We experienced strong demand and favorable pricing conditions in our East and West regions throughout the first quarter, resulting in record Q1 net revenue. More importantly, we implemented safety and distancing protocols at all of our operations in early March in response to the COVID-19 outbreak and we are committed to the continuous improvement of those safety measures. Construction has been deemed essential in all of Summit's markets, and the health and safety of our workforce, customers and local communities is our highest priority."

As of March 28, 2020, the Company had $199.1 million in cash and $1.9 billion in debt outstanding. The Company's $345 million revolving credit facility has $329 million available after consideration of committed letters of credit. For the three months ended March 28, 2020, cash flow used in operations was $(38.9) million while cash paid for capital equipment was $61.8 million. Brian Harris, CFO of Summit Materials added, "While we’ve only seen a limited impact from COVID-19 to date, we have been proactively engaging in contingency planning. We are conducting regular reviews of our capital spending, cost structure, receivables, and working capital under various demand scenarios. Summit has over $500 million in available liquidity and is in a strong financial position."

Summit is withdrawing its previously announced 2020 Adjusted EBITDA guidance of $460 million to $500 million. Hill continued, "While demand for our products and services has not yet been materially impacted by COVID-19, the near term impact to construction activity is less clear. We believe that it is prudent to withdraw guidance at this time, pending better visibility into the extent of economic disruption related to COVID-19 and the ultimate resumption of normal business conditions."

The Company is reducing its 2020 capital expenditure guidance to $145 to $160 million, including $50 million to $60 million for greenfield projects, from its prior 2020 capital expenditure guidance of $185 to $205 million, which included $65 to $80 million for greenfield projects, as certain items have been deferred at Summit's option to later periods.

Summit's approximately 6,000 employees continue to work as construction has been deemed essential in its markets. Extensive safety, hygiene, and distancing protocols have been implemented. Summit has been continuously improving its safety measures and following CDC guidelines. Employees in office-related functions have been working from home since early March.

First Quarter 2020 | Results by Line of Business

Aggregates Business: Aggregates net revenues increased by 9.4% to $96.2 million in the first quarter 2020 when compared to the prior year period. Aggregates adjusted cash gross profit margin increased to 47.7% in the first quarter 2020 compared to 43.2% on higher volumes, increased average selling prices and product mix. Aggregates sales volumes increased 9.7% in the first quarter 2020, when compared to the prior-year period on higher organic volume growth, particularly in Missouri, Kansas, Utah, and Virginia. Average selling prices for aggregates increased 2.2% in the first quarter 2020 when compared to the prior year period.

Cement Business: Cement segment net revenues increased 1.7% to $37.9 million in the first quarter 2020, when compared to the prior-year period. Cement adjusted cash gross profit margin decreased to (10.0)% in the first quarter, compared to 3.1% in the prior year period, as the Company incurred higher maintenance and winter storage costs. Organic sales volume of cement increased 0.7% in the first quarter and organic average selling prices increased 2.6% when compared to the prior year period.

Products Business: Products net revenues were $176.3 million in the first quarter 2020, compared to $151.3 million in the prior year period. Products adjusted cash gross profit margin increased to 18.4% in the first quarter, versus 13.5% in the prior year period. Our organic average sales price for ready-mix concrete increased 6.0%, coupled with a 14.0% increase in organic sales volumes of ready-mix concrete, led by higher volumes in Kansas, Utah, and Arkansas. Our organic average sales price for asphalt increased 4.1% while we had a 2.9% decrease in asphalt organic sales volumes as volume growth in Virginia was partially offset by maintenance activity in parts of Texas.

First Quarter 2020 | Results By Reporting Segment

Net revenue increased by 11.9% to $342.4 million in the first quarter 2020, versus $306.0 million in the prior year period. The improvement in net revenue was primarily attributable to organic volume and price growth in ready-mix concrete and aggregates. The Company reported an operating loss of $(41.7) million in the first quarter 2020, compared to $(57.7) million in the prior year period. Net loss decreased to $(46.7) million in the first quarter of 2020, compared to a loss of $(71.5) million in the prior year period. Adjusted EBITDA increased 149.1% to $16.4 million in the first quarter of 2020, compared to $6.6 million in the prior year period.

West Segment: The West Segment reported operating income of $0.4 million in the first quarter 2020, compared to $(11.6) million in the prior year period. Adjusted EBITDA increased to $22.5 million in the first quarter 2020, compared to $14.3 million in the prior year period. Improvements in operating income reflected increased demand for ready-mix and aggregates in Utah and Texas. Aggregates revenue in the first quarter increased 7.5% over the prior year period including a 9.2% increase in organic volumes despite a (1.5)% decrease in organic average sales prices. Ready-mix concrete revenue in the first quarter 2020 increased 11.8% over the prior year period, as a 5.2% increase in organic volumes and a 6.3% increase in organic average sales prices reflected favorable market conditions in Utah and Texas. Asphalt revenue decreased by (3.6)% in the first quarter 2020 over the prior year period on a (4.9)% decrease in volume in parts of Texas related to maintenance activity, partially offset by a 3.7% increase in price.

East Segment: The East Segment reported operating loss of $(11.8) million in the first quarter 2020, compared to $(17.3) million in the prior year period. Adjusted EBITDA increased to $9.6 million in the first quarter 2020, compared to $3.2 million in the prior year period. Adjusted EBITDA was favorably impacted by higher volume and price in all lines of business. Aggregates revenue increased 15.7% resulting from a 10.0% and 5.2% increase in organic volumes and average sales prices, respectively, driven by growth in Missouri and parts of Kansas. Ready-mix concrete revenue increased 58.7% due to an increase in organic volumes while average selling prices increased 3.5% due in part to wind farm work in Kansas and significant commercial work in Arkansas. Asphalt revenue increased 20.0% due to a 21.2% increase in organic volumes and a 5.8% increase in organic average sales prices reflecting strong demand and favorable weather conditions in Virginia.

Cement Segment: The Cement Segment reported an operating loss of $(15.5) million in the first quarter 2020, an increase from $(12.9) million in the prior year period. Adjusted EBITDA decreased to $(7.6) million in the first quarter 2020, compared to $(2.6) million in the prior year period, due to higher maintenance and winter storage costs. The segment reported increases of 0.7% and 2.6% in organic sales volumes and organic average selling prices, respectively, during the first quarter 2020 as compared to the prior year period.

Liquidity and Capital Resources

As of March 28, 2020, the Company had cash on hand of $199.1 million and borrowing capacity under its $345 million revolving credit facility of $329 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. The Company only has a financial maintenance covenant for the benefit of its revolving credit facility not to exceed First Lien on its Net Leverage of 4.75x. As of March 28, 2020, the Company had $1.9 billion in debt outstanding, including $680.7 million of Net Senior Secured Leverage.

Financial Outlook

Summit is withdrawing its previously announced 2020 Adjusted EBITDA guidance until the Company has better visibility into the extent of economic disruption related to COVID-19 and the ultimate resumption of normal business conditions. The Company is reducing its 2020 capital expenditure guidance to $145-$160 million, including $50 million to $60 million estimated for greenfield projects, from its prior 2020 capital expenditure guidance of $185 to $205 million, including $65 to $80 million for greenfield projects, as certain items have been deferred at Summit's option to later periods.

Webcast and Conference Call Information

Summit Materials will conduct a conference call on Wednesday, April 29, 2020, at 11:00 a.m. eastern time (9:00 a.m. mountain time) to review the Company’s first quarter 2020 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:

1-877-823-8690

International Live:

1-825-312-2236

Conference ID:

8877386

Password:

Summit

To listen to a replay of the teleconference, which will be available through May 5, 2020:

Domestic Replay:

1-800-585-8367

International Replay:

1-416-621-4642

Conference ID:

8877386

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 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 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 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 December 28, 2019, 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

Consolidated Statements of Operations

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

 

 

Three months ended

 

 

March 28,

 

March 30,

 

 

2020

 

2019

Revenue:

 

 

 

 

Product

 

$

305,307

 

 

$

271,641

 

Service

 

37,099

 

 

34,309

 

Net revenue

 

342,406

 

 

305,950

 

Delivery and subcontract revenue

 

24,784

 

 

26,689

 

Total revenue

 

367,190

 

 

332,639

 

Cost of revenue (excluding items shown separately below):

 

 

 

 

Product

 

232,504

 

 

213,726

 

Service

 

28,867

 

 

26,589

 

Net cost of revenue

 

261,371

 

 

240,315

 

Delivery and subcontract cost

 

24,784

 

 

26,689

 

Total cost of revenue

 

286,155

 

 

267,004

 

General and administrative expenses

 

70,224

 

 

67,610

 

Depreciation, depletion, amortization and accretion

 

51,778

 

 

55,388

 

Transaction costs

 

753

 

 

308

 

Operating loss

 

(41,720

)

 

(57,671

)

Interest expense

 

27,818

 

 

30,105

 

Loss on debt financings

 

 

 

14,565

 

Other loss (income), net

 

89

 

 

(2,803

)

Loss from operations before taxes

 

(69,627

)

 

(99,538

)

Income tax benefit

 

(22,901

)

 

(28,037

)

Net loss

 

(46,726

)

 

(71,501

)

Net loss attributable to Summit Holdings (1)

 

(1,747

)

 

(2,729

)

Net loss attributable to Summit Holdings

 

$

(44,979

)

 

$

(68,772

)

Loss per share of Class A common stock:

 

 

 

 

Basic

 

$

(0.40

)

 

$

(0.62

)

Diluted

 

$

(0.40

)

 

$

(0.62

)

Weighted average shares of Class A common stock:

 

 

 

 

Basic

 

113,602,110

 

 

111,811,679

 

Diluted

 

113,602,110

 

 

111,811,679

 

________________________________________________________

(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)

 

 

March 28,

 

December 28,

 

 

2020

 

2019

 

 

(unaudited)

 

(audited)

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

199,114

 

 

$

311,319

 

Accounts receivable, net

 

231,215

 

 

253,256

 

Costs and estimated earnings in excess of billings

 

11,319

 

 

13,088

 

Inventories

 

231,413

 

 

204,787

 

Other current assets

 

15,195

 

 

13,831

 

Total current assets

 

688,256

 

 

796,281

 

Property, plant and equipment, less accumulated depreciation, depletion and amortization (March 28, 2020 - $1,000,745 and December 28, 2019 - $955,815)

 

1,768,703

 

 

1,747,449

 

Goodwill

 

1,195,557

 

 

1,199,699

 

Intangible assets, less accumulated amortization (March 28, 2020 - $11,071 and December 28, 2019 - $10,366)

 

22,793

 

 

23,498

 

Deferred tax assets, less valuation allowance (March 28, 2020 - $1,675 and December 28, 2019 - $1,675)

 

237,922

 

 

212,333

 

Operating lease right-of-use assets

 

30,527

 

 

32,777

 

Other assets

 

48,510

 

 

55,519

 

Total assets

 

$

3,992,268

 

 

$

4,067,556

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Current portion of debt

 

$

7,942

 

 

$

7,942

 

Current portion of acquisition-related liabilities

 

30,923

 

 

32,700

 

Accounts payable

 

122,350

 

 

116,359

 

Accrued expenses

 

102,460

 

 

120,005

 

Current operating lease liabilities

 

8,131

 

 

8,427

 

Billings in excess of costs and estimated earnings

 

14,022

 

 

13,864

 

Total current liabilities

 

285,828

 

 

299,297

 

Long-term debt

 

1,850,289

 

 

1,851,057

 

Acquisition-related liabilities

 

13,024

 

 

19,801

 

Tax receivable agreement liability

 

327,957

 

 

326,965

 

Noncurrent operating lease liabilities

 

23,280

 

 

25,381

 

Other noncurrent liabilities

 

96,031

 

 

100,282

 

Total liabilities

 

2,596,409

 

 

2,622,783

 

Stockholders’ equity:

 

 

 

 

Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 114,110,597 and 113,309,385 shares issued and outstanding as of March 28, 2020 and December 28, 2019, respectively

 

1,142

 

 

1,134

 

Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of March 28, 2020 and December 28, 2019

 

 

 

 

Additional paid-in capital

 

1,239,271

 

 

1,234,020

 

Accumulated earnings

 

143,826

 

 

188,805

 

Accumulated other comprehensive (loss) income

 

(2,645

)

 

3,448

 

Stockholders’ equity

 

1,381,594

 

 

1,427,407

 

Noncontrolling interest in Summit Holdings

 

14,265

 

 

17,366

 

Total stockholders’ equity

 

1,395,859

 

 

1,444,773

 

Total liabilities and stockholders’ equity

 

$

3,992,268

 

 

$

4,067,556

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

($ in thousands)

 

 

Three months ended

 

 

March 28,

 

March 30,

 

 

2020

 

2019

Cash flow from operating activities:

 

 

 

 

Net loss

 

$

(46,726

)

 

$

(71,501

)

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

 

 

 

 

Depreciation, depletion, amortization and accretion

 

55,278

 

 

57,039

 

Share-based compensation expense

 

4,905

 

 

5,906

 

Net gain on asset disposals

 

(1,933

)

 

(1,735

)

Non-cash loss on debt financings

 

 

 

2,850

 

Change in deferred tax asset, net

 

(24,194

)

 

(28,028

)

Other

 

1,611

 

 

47

 

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

 

 

 

 

Accounts receivable, net

 

19,939

 

 

20,118

 

Inventories

 

(26,979

)

 

(705

)

Costs and estimated earnings in excess of billings

 

1,710

 

 

1,541

 

Other current assets

 

(2,519

)

 

(3,447

)

Other assets

 

5,543

 

 

2,576

 

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

 

 

 

 

Accounts payable

 

(2,712

)

 

(5,431

)

Accrued expenses

 

(20,776

)

 

(6,963

)

Billings in excess of costs and estimated earnings

 

245

 

 

(1,195

)

Tax receivable agreement liability

 

993

 

 

59

 

Other liabilities

 

(3,316

)

 

(1,807

)

Net cash used in operating activities

 

(38,931

)

 

(30,676

)

Cash flow from investing activities:

 

 

 

 

Acquisitions, net of cash acquired

 

 

 

(2,842

)

Purchases of property, plant and equipment

 

(61,829

)

 

(62,188

)

Proceeds from the sale of property, plant and equipment

 

3,160

 

 

2,797

 

Other

 

1,801

 

 

(178

)

Net cash used for investing activities

 

(56,868

)

 

(62,411

)

Cash flow from financing activities:

 

 

 

 

Proceeds from debt issuances

 

 

 

300,000

 

Debt issuance costs

 

 

 

(5,774

)

Payments on debt

 

(5,493

)

 

(256,333

)

Payments on acquisition-related liabilities

 

(9,515

)

 

(8,933

)

Proceeds from stock option exercises

 

310

 

 

766

 

Other

 

(908

)

 

(501

)

Net cash (used in) provided by financing activities

 

(15,606

)

 

29,225

 

Impact of foreign currency on cash

 

(800

)

 

191

 

Net decrease in cash

 

(112,205

)

 

(63,671

)

Cash and cash equivalents—beginning of period

 

311,319

 

 

128,508

 

Cash and cash equivalents—end of period

 

$

199,114

 

 

$

64,837

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Revenue Data by Segment and Line of Business

($ in thousands)

 

Three months ended

 

Twelve months ended

 

March 28,

 

March 30,

 

March 28,

 

March 30,

 

2020

 

2019

 

2020

 

2019

Segment Net Revenue:

 

 

 

 

 

 

 

West

$

184,492

 

 

$

168,229

 

 

$

1,038,993

 

 

$

1,010,440

 

East

119,989

 

 

100,415

 

 

736,787

 

 

634,308

 

Cement

37,925

 

 

37,306

 

 

291,323

 

 

280,544

 

Net Revenue

$

342,406

 

 

$

305,950

 

 

$

2,067,103

 

 

$

1,925,292

 

 

 

 

 

 

 

 

 

Line of Business - Net Revenue:

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

Aggregates

$

96,161

 

 

$

87,872

 

 

$

477,959

 

 

$

394,246

 

Cement (1)

32,863

 

 

32,499

 

 

266,599

 

 

258,258

 

Products

176,283

 

 

151,270

 

 

1,013,570

 

 

962,489

 

Total Materials and Products

305,307

 

 

271,641

 

 

1,758,128

 

 

1,614,993

 

Services

37,099

 

 

34,309

 

 

308,975

 

 

310,299

 

Net Revenue

$

342,406

 

 

$

305,950

 

 

$

2,067,103

 

 

$

1,925,292

 

 

 

 

 

 

 

 

 

Line of Business - Net Cost of Revenue:

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

Aggregates

$

50,263

 

 

$

49,890

 

 

$

187,097

 

 

$

162,246

 

Cement

36,651

 

 

31,351

 

 

154,449

 

 

140,160

 

Products

143,927

 

 

130,855

 

 

783,605

 

 

763,037

 

Total Materials and Products

230,841

 

 

212,096

 

 

1,125,151

 

 

1,065,443

 

Services

30,530

 

 

28,219

 

 

230,744

 

 

235,551

 

Net Cost of Revenue

$

261,371

 

 

$

240,315

 

 

$

1,355,895

 

 

$

1,300,994

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

Aggregates

$

45,898

 

 

$

37,982

 

 

$

290,862

 

 

$

232,000

 

Cement (3)

(3,788

)

 

1,148

 

 

112,150

 

 

118,098

 

Products

32,356

 

 

20,415

 

 

229,965

 

 

199,452

 

Total Materials and Products

74,466

 

 

59,545

 

 

632,977

 

 

549,550

 

Services

6,569

 

 

6,090

 

 

78,231

 

 

74,748

 

Adjusted Cash Gross Profit

$

81,035

 

 

$

65,635

 

 

$

711,208

 

 

$

624,298

 

 

 

 

 

 

 

 

 

Adjusted Cash Gross Profit Margin (2)

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

Aggregates

47.7

%

 

43.2

%

 

60.9

%

 

58.8

%

Cement (3)

(10.0

)%

 

3.1

%

 

38.5

%

 

42.1

%

Products

18.4

%

 

13.5

%

 

22.7

%

 

20.7

%

Services

17.7

%

 

17.8

%

 

25.3

%

 

24.1

%

Total Adjusted Cash Gross Profit Margin

23.7

%

 

21.5

%

 

34.4

%

 

32.4

%

________________________________________________________

(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

March 28, 2020

 

March 30, 2019

Aggregates (tons)

11,193

 

 

10,207

 

Cement (tons)

299

 

 

297

 

Ready-mix concrete (cubic yards)

1,244

 

 

1,091

 

Asphalt (tons)

409

 

 

421

 

 

 

 

 

 

Year ended

Pricing

March 28, 2020

 

March 30, 2019

Aggregates (per ton)

$

10.85

 

 

$

10.62

 

Cement (per ton)

116.21

 

 

113.31

 

Ready-mix concrete (per cubic yards)

114.04

 

 

107.62

 

Asphalt (per ton)

56.86

 

 

54.62

 

 

 

 

 

 

Year ended

 

Percentage Change in

Year over Year Comparison

Volume

 

Pricing

Aggregates (per ton)

9.7

%

 

2.2

%

Cement (per ton)

0.7

%

 

2.6

%

Ready-mix concrete (per cubic yards)

14.0

%

 

6.0

%

Asphalt (per ton)

(2.9

)%

 

4.1

%

 

 

 

 

 

Year ended

 

Percentage Change in

Year over Year Comparison (Excluding acquisitions)

Volume

 

Pricing

Aggregates (per ton)

9.7

%

 

2.2

%

Cement (per ton)

0.7

%

 

2.6

%

Ready-mix concrete (per cubic yards)

14.0

%

 

6.0

%

Asphalt (per ton)

(2.9

)%

 

4.1

%

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 March 28, 2020

 

 

 

 

 

 

Gross Revenue

 

Intercompany

 

Net

 

 

Volumes

 

Pricing

 

by Product

 

Elimination/Delivery

 

Revenue

Aggregates

 

11,193

 

 

$

10.85

 

 

$

121,473

 

 

$

(25,312

)

 

$

96,161

 

Cement

 

299

 

 

116.21

 

 

34,758

 

 

(1,895

)

 

32,863

 

Materials

 

 

 

 

 

$

156,231

 

 

$

(27,207

)

 

$

129,024

 

Ready-mix concrete

 

1,244

 

 

114.04

 

 

141,809

 

 

(105

)

 

141,704

 

Asphalt

 

409

 

 

56.86

 

 

23,243

 

 

(49

)

 

23,194

 

Other Products

 

 

 

 

 

69,846

 

 

(58,461

)

 

11,385

 

Products

 

 

 

 

 

$

234,898

 

 

$

(58,615

)

 

$

176,283

 

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 March 28, 2020 and March 30, 2019.

 

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

 

Transaction costs

 

 

 

 

 

 

 

753

 

 

753

 

Non-cash compensation

 

 

 

 

 

 

 

4,905

 

 

4,905

 

Other

 

1,215

 

 

242

 

 

 

 

(670

)

 

787

 

Adjusted EBITDA

 

$

22,468

 

 

$

9,573

 

 

$

(7,561

)

 

$

(8,066

)

 

$

16,414

 

Adjusted EBITDA Margin (1)

 

12.2

%

 

8.0

%

 

(19.9

)%

 

 

 

4.8

%

 

Reconciliation of Net Loss to Adjusted EBITDA

 

Three months ended March 30, 2019

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(9,552

)

 

$

(18,367

)

 

$

(10,568

)

 

$

(33,014

)

 

$

(71,501

)

Interest expense (income)

 

743

 

 

1,008

 

 

(2,319

)

 

30,673

 

 

30,105

 

Income tax (benefit) expense

 

(443

)

 

54

 

 

 

 

(27,648

)

 

(28,037

)

Depreciation, depletion and amortization

 

23,796

 

 

19,905

 

 

10,154

 

 

952

 

 

54,807

 

EBITDA

 

$

14,544

 

 

$

2,600

 

 

$

(2,733

)

 

$

(29,037

)

 

$

(14,626

)

Accretion

 

129

 

 

306

 

 

146

 

 

 

 

581

 

Loss on debt financings

 

 

 

 

 

 

 

14,565

 

 

14,565

 

Transaction costs

 

 

 

 

 

 

 

308

 

 

308

 

Non-cash compensation

 

 

 

 

 

 

 

5,906

 

 

5,906

 

Other

 

(375

)

 

336

 

 

 

 

(107

)

 

(146

)

Adjusted EBITDA

 

$

14,298

 

 

$

3,242

 

 

$

(2,587

)

 

$

(8,365

)

 

$

6,588

 

Adjusted EBITDA Margin (1)

 

8.5

%

 

3.2

%

 

(6.9

)%

 

 

 

2.2

%

________________________________________________

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

The table below reconciles our net loss per share attributable to Summit Materials, Inc. to adjusted diluted net loss per share for the three months ended March 28, 2020 and March 30, 2019. 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

 

March 28, 2020

 

March 30, 2019

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.

$

(44,979

)

 

$

(0.39

)

 

$

(68,772

)

 

$

(0.60

)

Adjustments:

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

(1,747

)

 

(0.01

)

 

(2,729

)

 

(0.02

)

Loss on debt financings

 

 

 

 

14,565

 

 

0.13

 

Adjusted diluted net loss before tax related adjustments

(46,726

)

 

(0.40

)

 

(56,936

)

 

(0.49

)

Changes in unrecognized tax benefits

(9,537

)

 

(0.08

)

 

 

 

 

Adjusted diluted net loss

$

(56,263

)

 

$

(0.48

)

 

$

(56,936

)

 

$

(0.49

)

Weighted-average shares:

 

 

 

 

 

 

 

Basic Class A common stock

113,602,110

 

 

 

 

111,811,679

 

 

 

LP Units outstanding

3,154,228

 

 

 

 

3,426,617

 

 

 

Total equity units

116,756,338

 

 

 

 

115,238,296

 

 

 

The following table reconciles operating loss to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the three months ended March 28, 2020 and March 30, 2019.

 

Three months ended

 

March 28,

 

March 30,

Reconciliation of Operating Loss to Adjusted Cash Gross Profit

2020

 

2019

($ in thousands)

 

 

 

Operating loss

$

(41,720

)

 

$

(57,671

)

General and administrative expenses

70,224

 

 

67,610

 

Depreciation, depletion, amortization and accretion

51,778

 

 

55,388

 

Transaction costs

753

 

 

308

 

Adjusted Cash Gross Profit (exclusive of items shown separately)

$

81,035

 

 

$

65,635

 

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

23.7

%

 

21.5

%

_______________________________________________________

(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 used for operating activities to free cash flow for the three months ended March 28, 2020 and March 30, 2019.

 

Three months ended

 

March 28,

 

March 30,

($ in thousands)

2020

 

2019

Net loss

$

(46,726

)

 

$

(71,501

)

Non-cash items

35,667

 

 

36,079

 

Net loss adjusted for non-cash items

(11,059

)

 

(35,422

)

Change in working capital accounts

(27,872

)

 

4,746

 

Net cash used in operating activities

(38,931

)

 

(30,676

)

Capital expenditures, net of asset sales

(58,669

)

 

(59,391

)

Free cash flow

$

(97,600

)

 

$

(90,067

)

 

Contacts

Karli Anderson
Vice President, Investor Relations
karli.anderson@summit-materials.com
303-515-5152

Release Summary

Summit Materials, Inc. Reports First Quarter 2020 Results

Contacts

Karli Anderson
Vice President, Investor Relations
karli.anderson@summit-materials.com
303-515-5152