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Form 8-K Summit Materials, Inc. For: Aug 03

August 3, 2022 4:22 PM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 3, 2022
Summit Materials, Inc.
(Exact name of registrant as specified in its charter)
Delaware001-3687347-1984212
(State or Other Jurisdiction(Commission(I.R.S. Employer
of Incorporation)File Number)Identification No.)
 
1550 Wynkoop Street, 3rd Floor
Denver, Colorado 80202
(Address of Principal Executive Offices) (Zip Code)
 Registrant’s Telephone Number, Including Area Code:  (303) 893-0012
 Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock (par value, $0.01 per share)SUMNew York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company             
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                                  



Item 2.02 Results of Operations and Financial Condition.  
 
    On August 3, 2022, Summit Materials, Inc. (the “Company”) issued a press release announcing the results of the Company’s operations for the fiscal quarter ended July 2, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
 
    The information in this Current Report on Form 8-K, including Exhibit 99.1 hereto, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Item 9.01 Financial Statements and Exhibits.
 
    (d)    Exhibits
 
 
Exhibit No.Description
   
99.1 
104.1Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURES
 
    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
  
 
 
 SUMMIT MATERIALS, INC.
   
 DATED:  August 3, 2022
By:/s/ Christopher B. Gaskill
 Name:Christopher B. Gaskill
 Title:EVP, Chief Legal Officer & Secretary




Exhibit 99.1
 
Summit Materials, Inc. Reports Second Quarter 2022 Results

Record Quarterly Net Income
Strongest Balance Sheet in Company History
Net Leverage Ratio remains below Elevate Summit target
DENVER, CO. - (August 3, 2022) - 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 second quarter ended July 2, 2022 (“second quarter”). All comparisons are versus the quarter ended July 3, 2021 unless noted otherwise.

Three months ended
($ in thousands)July 2, 2022July 3, 2021% Chg vs. PY
Net revenue$631,918 $618,530 2.2 %
Operating income111,236 95,923 16.0 %
Net income192,766 57,758 233.7 %
Basic EPS$1.61 $0.48 235.4 %
Adjusted Cash Gross Profit202,349 200,201 1.1 %
Adjusted EBITDA164,034 163,792 0.1 %

"Today, Summit is reporting record quarterly earnings and the lowest net leverage in Company history as we continue to successfully execute on our Elevate Strategy," commented Anne Noonan, Summit Materials President and CEO. "In 2022, we have already achieved a mid to high single digit price increases in each line of business, with asphalt achieving double digit price increases. We continue to characterize current market conditions as favorable towards the potential for additional price increases. Our portfolio optimization efforts are enhancing the contributions from materials and opening up opportunities to invest strategically. We are pulling all available self-help margin levers to improve performance and offset inflation. We are maintaining our 2022 Adjusted EBITDA guidance and remain confident that Summit Materials is on track for another year of strong performance."

Brian Harris, CFO of Summit Materials, added, "Armed with the strongest balance sheet in Summit history, we are well positioned to pursue a broad range of high return capital allocation priorities that are value creative to Summit shareholders. As part of our Horizon Two objective, we will invest to grow priority markets. To us, that means advancing our market leadership position through growth initiatives, including greenfields, as well as pursuing attractive M&A opportunities that align with our portfolio optimization criteria. This financial flexibility together with sound execution sets Summit Materials up for growth and strong returns."

In the three months ended July 2, 2022, Summit Materials sold one business in the East segment, resulting in cash proceeds of $293.9 million and a total gain on disposition of $156.1 million. To date, as part of its Elevate Summit Strategy, the Company has received $470.1 million in proceeds from a total of ten divestitures.

During the three months ended July 2, 2022, Summit Materials repaid $72.4 million of its term loan under provisions related to the divestitures of businesses.

2022 Guidance
For the full year 2022, Summit is reiterating its Adjusted EBITDA guidance of approximately $500 million to $530 million, and continues to expect 2022 capital expenditures of approximately $270 million to $290 million, including greenfield projects.

1


Second Quarter 2022 | Total Company Results
Net Revenue increased $13.4 million, or 2.2% in the second quarter to $631.9 million, due to increases in average sales prices across all lines of business that more than offset volume declines due primarily to divestitures.

Operating income increased $15.3 million, or 16.0% in the second quarter to $111.2 million, primarily as net revenue gains and decreases in depletion, amortization and accretion expenses outpaced increases in cost of revenue. Summit's operating margin percentage for the three months ended July 2, 2022 increased to 17.6% from 15.5%, from the comparable period a year ago.

Net income attributable to Summit Inc. increased to $190.1 million, or $1.61 per basic share, compared to $56.7 million, or $0.48 per basic share in the comparable prior year period. Summit reported adjusted diluted net income of $71.8 million, or $0.60 per adjusted diluted share as compared to $58.0 million, or $0.49 per adjusted diluted share in the prior year period.

Adjusted EBITDA increased $0.2 million, or 0.1% to $164.0 million as net revenue growth was mostly offset by higher cost of revenue.

Second Quarter 2022 | Results by Line of Business
Aggregates Business: Aggregates net revenues increased by $8.0 million to $161.5 million in the second quarter. Aggregates adjusted cash gross profit margin decreased to 53.7% in the second quarter as compared to 55.9% in the second quarter 2021. Aggregates sales volume decreased 1.6% in the second quarter as solid organic volume growth driven by the West Segment was more than offset by volume decreases in certain markets due to divestitures. Average selling prices for aggregates increased 4.7% in the second quarter with growth across both reporting segments.

Cement Business: Cement segment net revenues increased 9.1% to $93.7 million in the second quarter. Cement segment adjusted cash gross profit margin increased to 48.6% in the second quarter, compared to 47.2% in the prior year period, reflecting strong pricing gains that more than offset higher variable costs. Sales volume of cement decreased 0.4% and average selling prices increased 7.5% in the second quarter.
 
Products Business: Products net revenues were $294.6 million in the second quarter, compared to $292.1 million in the prior year period. Products adjusted cash gross profit margin decreased to 18.2% in the second quarter, versus 18.8% in the prior year period. Average sales price for ready-mix concrete increased 9.7% driven by pricing growth across the majority of markets, with strong, double-digit growth in the Intermountain West and Texas. Sales volumes of ready-mix concrete decreased 9.1% due to divestitures and cement supply constraints. Average selling prices for asphalt increased 18.9%, driven by strong pricing gains in Texas and the Intermountain West market. Asphalt volume decreased 15.2% due primarily to the impact of divestitures.

Second Quarter 2022 | Results By Reporting Segment
West Segment: The West Segment operating income increased 17.6% to $62.6 million and Adjusted EBITDA increased 7.5% to $84.6 million in the second quarter due primarily to pricing gains and aggregates volume growth that more than offset lower downstream volumes and inflationary cost conditions. Aggregates revenue in the second quarter increased 11.8% on 4.2% pricing growth and 7.3% volume growth, which was driven by strong demand conditions in Texas and British Columbia. Ready-mix concrete revenue in the second quarter increased 10.7% as 11.2% pricing growth was partially offset by lower volumes in the Intermountain West and North Texas. Asphalt revenue increased 10.8% in the second quarter as volumes decreased 5.0%, due to a divestiture made in the second quarter of 2021. Asphalt sales prices increased 19.2% in the period.

East Segment: The East Segment operating income decreased 8.6% to $31.6 million and Adjusted EBITDA decreased 18.5% to $46.7 million in the second quarter. Lower operating income and Adjusted EBITDA reflects increased cost of revenue that exceeded pricing growth. Aggregates revenue decreased 4.1% versus the prior year period. Aggregates volumes decreased 9.9% as growth in the Georgia market was more than offset by divestitures and wet conditions in Kansas. Average selling prices for aggregates increased 6.6% led by strong growth in Georgia. Ready-mix concrete revenue decreased 37.0% as volumes decreased 38.2% due to divestitures. Excluding divestitures, volumes were flat in the second quarter relative to the year ago period. Ready-mix concrete average selling price increased 1.8% in the period. Due to divestitures, asphalt revenue decreased 22.0% as lower volumes were only partially offset by pricing growth. Asphalt average selling prices increased 16.1% to reflect increases in liquid asphalt costs.

2


Cement Segment: The Cement Segment operating income increased 30.7% to $33.7 million in the second quarter. Adjusted EBITDA increased $3.8 million as pricing gains and cost control measures more than offset inflationary conditions. In the second quarter, the Cement Segment reported a volume decrease of 0.4% and average selling price growth of 7.5%.
 
Liquidity and Capital Resources
As of July 2, 2022, the Company had $465.3 million in cash and $1.5 billion in debt outstanding. The Company's $345 million revolving credit facility has $324.6 million available after outstanding letters of credit. For the quarter ended July 2, 2022, cash flow provided by operations was $16.3 million and cash paid for capital expenditures was $129.6 million.

In March 2022, Summit’s board authorized the Company’s first ever share repurchase program. As of July 2, 2022, approximately $202.5 million remained available under the share repurchase program.

3


Webcast and Conference Call Information
Summit Materials will conduct a conference call on Thursday, August 4, 2022, at 11:00 a.m. eastern time (9:00 a.m. mountain time) to review the Company’s second quarter 2022 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 second 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/118298228

To participate in the live teleconference for second quarter 2022 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 August 11, 2022:

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.


4


Non-GAAP Financial Measures
The Securities and Exchange Commission (“SEC”) regulates the use of “non-GAAP financial measures,” such as Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow, Net Leverage and Net Debt which are derived on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). We have provided these measures because, among other things, we believe that they provide investors with additional information to measure our performance, evaluate our ability to service our debt and evaluate certain flexibility under our restrictive covenants. Our Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow, Net Leverage and Net Debt may vary from the use of such terms by others and should not be considered as alternatives to or more important than net income (loss), operating income (loss), revenue or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or to cash flows as measures of liquidity.

Adjusted EBITDA, Adjusted EBITDA Margin, and other non-GAAP measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of the limitations of Adjusted EBITDA are that these measures do not reflect: (i) our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) changes in, or cash requirements for, our working capital needs; (iii) interest expense or cash requirements necessary to service interest and principal payments on our debt; and (iv) income tax payments we are required to make. Because of these limitations, we rely primarily on our U.S. GAAP results and use Adjusted EBITDA, Adjusted EBITDA Margin and other non-GAAP measures on a supplemental basis.

Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Free Cash Flow, Net Leverage and Net Debt reflect additional ways of viewing aspects of our business that, when viewed with our GAAP results and the accompanying reconciliations to U.S. GAAP financial measures included in the tables attached to this press release, may provide a more complete understanding of factors and trends affecting our business. We strongly encourage investors to review our consolidated financial statements in their entirety and not rely on any single financial measure. Reconciliations of the non-GAAP measures used in this press release are included in the attached tables. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
5


Cautionary Statement Regarding Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include all statements that do not relate solely to historical or current facts, and you can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “trends,” “plans,” “estimates,” “projects” or “anticipates” or similar expressions that concern our strategy, plans, expectations or intentions. All statements made relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, it is very difficult to predict the effect of known factors, and, of course, it is impossible to anticipate all factors that could affect our actual results. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be realized. Important factors could affect our results and could cause results to differ materially from those expressed in our forward-looking statements, including but not limited to the factors discussed in the section entitled “Risk Factors” in Summit Inc.’s Annual Report on Form 10-K for the fiscal year ended January 1, 2022, 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, and responses to it, including vaccine mandates, 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, or more limited availability of, commodities, labor and other production and delivery inputs as a result of inflation, supply chain challenges 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;
6


-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.

7


SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
($ in thousands, except share and per share amounts)
 
 Three months endedSix months ended
 July 2,July 3,July 2,July 3,
 2022202120222021
Revenue:    
Product$542,939 $527,800 $898,608 $882,034 
Service88,979 90,730 125,805 134,977 
Net revenue631,918 618,530 1,024,413 1,017,011 
Delivery and subcontract revenue54,636 49,387 83,088 78,750 
Total revenue686,554 667,917 1,107,501 1,095,761 
Cost of revenue (excluding items shown separately below):    
Product360,356 346,697 650,701 623,831 
Service69,213 71,632 103,796 111,829 
Net cost of revenue429,569 418,329 754,497 735,660 
Delivery and subcontract cost54,636 49,387 83,088 78,750 
Total cost of revenue484,205 467,716 837,585 814,410 
General and administrative expenses47,651 47,448 99,575 99,090 
Depreciation, depletion, amortization and accretion47,157 58,233 98,350 114,569 
Gain on sale of property, plant and equipment (3,695)(1,403)(4,950)(3,172)
Operating income111,236 95,923 76,941 70,864 
Interest expense20,599 24,216 40,748 48,402 
Tax receivable agreement expense954 — 954 — 
(Gain) loss on sale of businesses(156,053)236 (170,258)(15,432)
Other income, net(977)(4,695)(1,673)(9,584)
Income from operations before taxes246,713 76,166 207,170 47,478 
Income tax expense53,947 18,408 49,204 12,965 
Net income192,766 57,758 157,966 34,513 
Net income attributable to Summit Holdings (1)2,653 1,099 2,145 371 
Net income attributable to Summit Inc.$190,113 $56,659 $155,821 $34,142 
Earnings per share of Class A common stock:
Basic$1.61 $0.48 $1.31 $0.29 
Diluted$1.60 $0.48 $1.31 $0.29 
Weighted average shares of Class A common stock:
Basic118,242,880 117,637,036 118,590,173 116,650,881 
Diluted118,681,507 118,585,398 119,394,954 117,832,026 
________________________________________________________
(1) Represents portion of business owned by pre-IPO investors rather than by Summit.
8


SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
($ in thousands, except share and per share amounts)
 July 2,January 1,
 20222022
 (unaudited)(audited)
Assets  
Current assets:  
Cash and cash equivalents$465,315 $380,961 
Accounts receivable, net327,266 287,226 
Costs and estimated earnings in excess of billings37,813 7,600 
Inventories209,875 180,760 
Other current assets14,393 11,827 
Current assets held for sale1,799 1,236 
Total current assets1,056,461 869,610 
Property, plant and equipment, less accumulated depreciation, depletion and amortization (July 2, 2022 - $1,219,120 and January 1, 2022 - $1,266,513)1,785,844 1,842,908 
Goodwill1,144,282 1,163,750 
Intangible assets, less accumulated amortization (July 2, 2022 - $13,824 and January 1, 2022 - $15,269)68,375 69,396 
Deferred tax assets, less valuation allowance (July 2, 2022 - $1,113 and January 1, 2022 - $1,675)161,942 204,566 
Operating lease right-of-use assets31,407 30,150 
Other assets42,492 58,745 
Total assets$4,290,803 $4,239,125 
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of debt$6,354 $6,354 
Current portion of acquisition-related liabilities12,846 13,110 
Accounts payable167,643 128,232 
Accrued expenses133,810 147,476 
Current operating lease liabilities6,504 6,497 
Billings in excess of costs and estimated earnings5,805 7,401 
Total current liabilities332,962 309,070 
Long-term debt1,516,705 1,591,019 
Acquisition-related liabilities23,849 33,369 
Tax receivable agreement liability327,501 326,548 
Noncurrent operating lease liabilities30,186 28,880 
Other noncurrent liabilities118,798 127,027 
Total liabilities2,350,001 2,415,913 
Stockholders’ equity:  
Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 118,114,612 and 118,705,108 shares issued and outstanding as of July 2, 2022 and January 1, 2022, respectively1,182 1,188 
Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of July 2, 2022 and January 1, 2022— — 
Additional paid-in capital1,336,375 1,326,340 
Accumulated earnings587,283 478,956 
Accumulated other comprehensive income4,193 7,083 
Stockholders’ equity1,929,033 1,813,567 
Noncontrolling interest in Summit Holdings11,769 9,645 
Total stockholders’ equity1,940,802 1,823,212 
Total liabilities and stockholders’ equity$4,290,803 $4,239,125 

9


SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
($ in thousands)
 Six months ended
 July 2,July 3,
 20222021
Cash flows from operating activities:  
Net income$157,966 $34,513 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion107,511 118,430 
Share-based compensation expense10,156 10,190 
Net gain on asset and business disposals(174,902)(18,390)
Change in deferred tax asset, net44,160 2,743 
Other(357)92 
Decrease (increase) in operating assets, net of acquisitions and dispositions:
Accounts receivable, net(57,797)(60,829)
Inventories(58,092)(14,606)
Costs and estimated earnings in excess of billings(36,165)(21,475)
Other current assets(2,130)(3,925)
Other assets(593)4,927 
(Decrease) increase in operating liabilities, net of acquisitions and dispositions:
Accounts payable39,602 26,858 
Accrued expenses(11,108)(4,496)
Billings in excess of costs and estimated earnings(737)(2,031)
Tax receivable agreement liability954 7,132 
Other liabilities(2,214)(4,482)
Net cash provided by operating activities16,254 74,651 
Cash flows from investing activities:
Acquisitions, net of cash acquired(1,933)(7,271)
Purchases of property, plant and equipment(129,580)(132,723)
Proceeds from the sale of property, plant and equipment5,427 6,806 
Proceeds from sale of businesses341,741 103,649 
Other(1,098)(27)
Net cash provided by (used in) investing activities214,557 (29,566)
Cash flows from financing activities:
Payments on debt(86,821)(17,433)
Payments on acquisition-related liabilities(11,577)(8,378)
Distributions from partnership(25)— 
Repurchases of common stock(47,509)— 
Proceeds from stock option exercises123 31,766 
Other(187)(417)
Net cash (used in) provided by financing activities(145,996)5,538 
Impact of foreign currency on cash(461)293 
Net increase in cash84,354 50,916 
Cash and cash equivalents—beginning of period380,961 418,181 
Cash and cash equivalents—end of period$465,315 $469,097 
10


SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Revenue Data by Segment and Line of Business
($ in thousands)
 Three months endedSix months ended
 July 2,July 3,July 2,July 3,
 2022202120222021
Segment Net Revenue:  
West$352,510$313,617$588,512$548,361
East185,757219,091296,025342,159
Cement93,65185,822139,876126,491
Net Revenue$631,918$618,530$1,024,413$1,017,011
Line of Business - Net Revenue:    
Materials    
Aggregates$161,480$153,496$284,873$270,884
Cement (1)86,81582,169129,369120,308
Products294,644292,135484,366490,842
Total Materials and Products542,939527,800898,608882,034
Services88,97990,730125,805134,977
Net Revenue$631,918$618,530$1,024,413$1,017,011
Line of Business - Net Cost of Revenue:    
Materials    
Aggregates$74,789$67,734$153,398$136,031
Cement41,32341,67284,80879,032
Products241,098237,343408,751408,963
Total Materials and Products357,210346,749646,957624,026
Services72,35971,580107,540111,634
Net Cost of Revenue$429,569$418,329$754,497$735,660
Line of Business - Adjusted Cash Gross Profit (2):    
Materials    
Aggregates$86,691$85,762$131,475$134,853
Cement (3)45,49240,49744,56141,276
Products53,54654,79275,61581,879
Total Materials and Products185,729181,051251,651258,008
Services16,62019,15018,26523,343
Adjusted Cash Gross Profit$202,349$200,201$269,916$281,351
Adjusted Cash Gross Profit Margin (2)    
Materials    
Aggregates53.7 %55.9 %46.2 %49.8 %
Cement (3)48.6 %47.2 %31.9 %32.6 %
Products18.2 %18.8 %15.6 %16.7 %
Services18.7 %21.1 %14.5 %17.3 %
Total Adjusted Cash Gross Profit Margin32.0 %32.4 %26.3 %27.7 %
________________________________________________________
(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.

11


SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Volume and Price Statistics
(Units in thousands)
 
 Three months endedSix months ended
Total VolumeJuly 2, 2022July 3, 2021July 2, 2022July 3, 2021
Aggregates (tons)16,820 17,091 30,223 30,600 
Cement (tons)705 708 1,046 1,048 
Ready-mix concrete (cubic yards)1,394 1,534 2,635 2,872 
Asphalt (tons)1,321 1,557 1,582 2,031 
 Three months endedSix months ended
PricingJuly 2, 2022July 3, 2021July 2, 2022July 3, 2021
Aggregates (per ton)$11.92 $11.39 $11.58 $11.06 
Cement (per ton)128.57 119.64 128.52 118.68 
Ready-mix concrete (per cubic yards)131.63 119.94 129.45 119.18 
Asphalt (per ton)71.16 59.87 70.33 59.91 
Three months endedSix months ended
Percentage Change inPercentage Change in
Year over Year ComparisonVolumePricingVolumePricing
Aggregates (per ton)(1.6)%4.7 %(1.2)%4.7 %
Cement (per ton)(0.4)%7.5 %(0.2)%8.3 %
Ready-mix concrete (per cubic yards)(9.1)%9.7 %(8.3)%8.6 %
Asphalt (per ton)(15.2)%18.9 %(22.1)%17.4 %
Three months endedSix months ended
Percentage Change inPercentage Change in
Year over Year Comparison (Excluding acquisitions)VolumePricingVolumePricing
Aggregates (per ton)(2.3)%4.7 %(2.1)%4.8 %
Cement (per ton)(0.4)%7.5 %(0.2)%8.3 %
Ready-mix concrete (per cubic yards)(9.1)%9.7 %(8.3)%8.6 %
Asphalt (per ton)(15.2)%18.9 %(22.1)%17.4 %


12


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 2, 2022
   Gross RevenueIntercompanyNet
 VolumesPricing
by Product 
Elimination/Delivery 
Revenue 
Aggregates16,820 $11.92 $200,535 $(39,055)$161,480 
Cement705 128.57 90,689 (3,874)86,815 
Materials$291,224 $(42,929)$248,295 
Ready-mix concrete1,394 131.63 183,425 (68)183,357 
Asphalt1,321 71.16 94,022 (107)93,915 
Other Products  102,183 (84,811)17,372 
Products  $379,630 $(84,986)$294,644 

Six months ended July 2, 2022
Gross RevenueIntercompanyNet
VolumesPricingby Product Elimination/Delivery Revenue 
Aggregates30,223 $11.58 $349,961 $(65,088)$284,873 
Cement1,046 128.52 134,495 (5,126)129,369 
Materials$484,456 $(70,214)$414,242 
Ready-mix concrete2,635 129.45 341,027 (107)340,920 
Asphalt1,582 70.33 111,239 (187)111,052 
Other Products178,148 (145,754)32,394 
Products$630,414 $(146,048)$484,366 

13


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 six months ended July 2, 2022 and July 3, 2021.
Reconciliation of Net Income to Adjusted EBITDAThree months ended July 2, 2022
by SegmentWestEastCementCorporateConsolidated
($ in thousands)     
Net income$65,606$64,089$38,641$24,430$192,766
Interest (income) expense(4,035)(2,714)(4,860)32,20820,599
Income tax expense98752,96053,947
Depreciation, depletion and amortization21,77914,5239,38377046,455
EBITDA$84,337$75,898$43,164$110,368$313,767
Accretion23339277702
Tax receivable agreement benefit954954
Gain on sale of businesses(29,452)(126,601)(156,053)
Non-cash compensation4,7344,734
Other74(144)(70)
Adjusted EBITDA$84,644$46,694$43,241$(10,545)$164,034
Adjusted EBITDA Margin (1)24.0 %25.1 %46.2 %26.0 %
Reconciliation of Net Income (Loss) to Adjusted EBITDAThree months ended July 3, 2021
by SegmentWestEastCementCorporateConsolidated
($ in thousands)     
Net income (loss)$55,447$37,035$33,230$(67,954)$57,758
Interest (income) expense(2,860)(2,176)(4,035)33,28724,216
Income tax expense1,19815617,05418,408
Depreciation, depletion and amortization25,13321,14610,1431,10157,523
EBITDA$78,918$56,161$39,338$(16,512)$157,905
Accretion21840884710
(Gain) loss on sale of businesses(273)509236
Non-cash compensation4,8274,827
Other(92)206114
Adjusted EBITDA$78,771$57,284$39,422$(11,685)$163,792
Adjusted EBITDA Margin (1)25.1 %26.1 %45.9 %26.5 %
Reconciliation of Net Income (Loss) to Adjusted EBITDASix months ended July 2, 2022
by SegmentWestEastCementCorporateConsolidated
($ in thousands)
Net income (loss)$77,507$71,455$30,210$(21,206)$157,966
Interest (income) expense(8,005)(6,165)(9,822)64,74040,748
Income tax expense (benefit)1,163(106)48,14749,204
Depreciation, depletion and amortization46,12732,40716,8811,51996,934
EBITDA$116,792$97,591$37,269$93,200$344,852
Accretion4608031531,416
Tax receivable agreement benefit954954
Gain on sale of businesses(43,657)(126,601)(170,258)
Non-cash compensation10,15610,156
Other8493177
Adjusted EBITDA$117,336$54,830$37,422$(22,291)$187,297
Adjusted EBITDA Margin (1)19.9 %18.5 %26.8 %18.3 %
14


Reconciliation of Net Income (Loss) to Adjusted EBITDASix months ended July 3, 2021
by SegmentWestEastCementCorporateConsolidated
($ in thousands)
Net income (loss)$72,883$44,004$31,625$(113,999)$34,513
Interest (income) expense(4,892)(3,896)(8,080)65,27048,402
Income tax expense1,3849011,49112,965
Depreciation, depletion and amortization50,05742,62018,2112,205113,093
EBITDA$119,432$82,818$41,756$(35,033)$208,973
Accretion4348771651,476
Gain on sale of businesses(273)(15,159)(15,432)
Non-cash compensation10,19010,190
Other(174)493319
Adjusted EBITDA$119,419$69,029$41,921$(24,843)$205,526
Adjusted EBITDA Margin (1)21.8 %20.2 %33.1 %20.2 %
________________________________________________
(1) Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of net revenue.

15


The table below reconciles our net income attributable to Summit Materials, Inc. to adjusted diluted net income per share for the three and six months ended July 2, 2022 and July 3, 2021. 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 endedSix months ended
 July 2, 2022July 3, 2021July 2, 2022July 3, 2021
Reconciliation of Net Income Per Share to Adjusted Diluted EPSNet IncomePer Equity UnitNet IncomePer Equity UnitNet IncomePer Equity UnitNet IncomePer Equity Unit
Net income attributable to Summit Materials, Inc.$190,113 $1.59 $56,659 $0.47 $155,821 $1.30 $34,142 $0.29 
Adjustments:
Net income attributable to noncontrolling interest2,653 0.02 1,099 0.02 2,145 0.02 371 — 
(Gain) loss on sale of businesses, net of tax(121,935)(1.02)208 — (127,569)(1.07)(11,654)(0.10)
Adjusted diluted net income before tax related adjustments70,831 0.59 57,966 0.49 30,397 0.25 22,859 0.19 
Tax receivable agreement expense954 0.01 — — 954 0.01 — — 
Adjusted diluted net income$71,785 $0.60 $57,966 $0.49 $31,351 $0.26 $22,859 $0.19 
Weighted-average shares:    
Basic Class A common stock118,099,059  117,436,461  118,438,200  116,423,833  
LP Units outstanding1,314,006  1,885,789  1,314,006  2,249,499  
Total equity units119,413,065  119,322,250  119,752,206  118,673,332  

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 2, 2022 and July 3, 2021.  
 Three months endedSix months ended
 July 2,July 3,July 2,July 3,
Reconciliation of Operating Income to Adjusted Cash Gross Profit2022202120222021
($ in thousands)    
Operating income$111,236$95,923$76,941$70,864
General and administrative expenses47,65147,44899,57599,090
Depreciation, depletion, amortization and accretion47,15758,23398,350114,569
Gain on sale of property, plant and equipment (3,695)(1,403)(4,950)(3,172)
Adjusted Cash Gross Profit (exclusive of items shown separately)$202,349$200,201$269,916$281,351
Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1)32.0 %32.4 %26.3 %27.7 %
_______________________________________________________
(1) Adjusted Cash Gross Profit Margin is defined as Adjusted Cash Gross Profit as a percentage of net revenue.

The following table reconciles net cash provided by operating activities to free cash flow for the three and six months ended July 2, 2022 and July 3, 2021. 
16


 Three months endedSix months ended
 July 2,July 3,July 2,July 3,
($ in thousands)2022202120222021
Net income$192,766 $57,758 $157,966 $34,513 
Non-cash items(50,041)74,221 (13,432)113,065 
Net income adjusted for non-cash items142,725 131,979 144,534 147,578 
Change in working capital accounts(109,758)(36,010)(128,280)(72,927)
Net cash provided by operating activities32,967 95,969 16,254 74,651 
Capital expenditures, net of asset sales(67,818)(58,823)(124,153)(125,917)
Free cash flow$(34,851)$37,146 $(107,899)$(51,266)

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


17


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