Summit Materials, Inc. Reports Second Quarter 2019 Results
- Operating income increased 4.1% in Second Quarter 2019
- Organic aggregates volumes increased 4.4%
- Organic aggregates price increased 8.0%
- Reaffirmed 2019 Adjusted EBITDA Guidance Range For Full-Year 2019 at $430 - $470 million
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 2019.
For the three months ended June 29, 2019, the Company reported net income attributable to Summit Inc. of $36.4 million, or $0.32 per basic share, compared to net income attributable to Summit Inc. of $35.5 million, or $0.32 per basic share in the comparable prior year period. Summit reported adjusted diluted net income of $36.0 million, or $0.31 per adjusted diluted share as compared to adjusted diluted net income of $37.1 million, or $0.32 per adjusted diluted share in the prior year period.
Summit's net revenue increased 0.6% in the second quarter of 2019 compared to the comparable 2018 period. Adjusted EBITDA increased to $140.5 million in 2019 as compared to $135.3 million in 2018, as Summit continues to achieve increases in aggregates, cement and asphalt volumes on a year to date basis and pricing increases for aggregates, ready-mix concrete and asphalt. Tom Hill, CEO of Summit Materials, stated "We were very pleased to see the solid increases in our organic sales volumes as well as average sales prices for aggregates that started in the first quarter of 2019, continue into the second quarter." Summit reported a 12.6% increase in aggregate sales volumes combined with a 8.5% increase in aggregates average sales prices during the first six months of 2019 as compared to the same period in 2018. Despite achieving a 1.9% increase in year to date ready-mix concrete average sales prices, Summit reported its ready-mix concrete volumes in 2019 were 5.9% below 2018 levels as wet and cold weather conditions in Houston and the Intermountain geographies adversely impacted volumes.
Hill commented, "While the Mississippi River presented significant barge shipment challenges for our cement segment during the quarter, we were able to ship 2.6% more volume in the second quarter of 2019 compared to 2018. While average sales prices of cement were up slightly in the second quarter, they have been flat compared to the first six months of 2018." Summit's cement segment increased its Adjusted EBITDA from $34.7 million in the second quarter of 2018 to $35.4 million in the same period in 2019.
Summit reaffirmed its 2019 full year Adjusted EBITDA guidance. Hill continued, "Despite some adverse weather conditions impacting our cement and ready-mix concrete operations in the first half of 2019, we are pleased to confirm our previously announced Adjusted EBITDA guidance of approximately $430 million to $470 million for 2019."
“Underlying demand conditions in most of our markets remain favorable and are expected to remain so during the remainder of 2019,” continued Hill. In Summit's public markets, state transportation funding measures in Texas, coupled with steady increases in federal subsidies, are contributing to increased lettings activity. Single family housing starts and permits remain well below peak levels in Summit's major markets.
Further, Summit reaffirmed its guidance for 2019 capital expenditures of approximately $160 million to $175 million, and noted its cash paid for capital equipment decreased from $131.7 million in the first six months of 2018 to $105.6 million in 2019 as Summit continues to execute on its plan to reduce its leverage ratio by the end of 2019. As expected, given the seasonality of its operations, Summit's leverage ratio decreased slightly over levels reported at the end of the first quarter 2019.
Second Quarter 2019 | Results by Line of Business
Aggregates Business: Aggregates net revenues increased by 24.1% to $128.7 million in the second quarter 2019, when compared to the prior year period. Aggregates adjusted cash gross profit margin declined to 61.4% in the second quarter 2019, compared to 64.8% in the prior year period, primarily due to operational inefficiencies caused by the loss of a piece of mining equipment used in our Texas operations during the quarter. Aggregate margins in the West region were also adversely impacted by certain stripping and maintenance costs which are not expected to recur in the second half of the year. Organic aggregates sales volumes increased 4.4% in the second quarter 2019, when compared to the prior-year period. Organic average selling prices on aggregates increased 8.0% in the second quarter 2019 when compared to the prior year period due to improvements in prices within both the West and East segments during the period.
Cement Business: Cement segment net revenues increased 3.3% to $84.5 million in the second quarter 2019, when compared to the prior-year period. Cement adjusted cash gross profit margin decreased to 45.8% in the second quarter, compared to 46.5% in the prior-year period, as margins were impacted by lower production levels in 2019 and increased logistics and distribution costs. Organic sales volume of cement increased 2.6% in the second quarter, when compared to the prior year period. Organic average selling prices on cement increased 0.6% in the second quarter, when compared to the prior year period due to changes of the customer mix across our geographies.
Products Business: Net revenues decreased 6.7% to $261.2 million in the second quarter 2019, when compared to the prior year period, primarily due to the sale of a non-core business in the third quarter of 2018. Products adjusted cash gross profit margin slightly increased to 22.3% in the second quarter, versus 22.0% in the prior year period. Our organic average sales price for ready-mix concrete increased 2.9%, which was offset by a 7.2% decrease in organic sales volumes of ready-mix concrete. Our organic average sales price for asphalt increased 6.8% while we had a 2.5% decrease in asphalt organic sales volumes.
Second Quarter 2019 | Results By Reporting Segment
Net revenue increased by 0.6% to $552.6 million in the second quarter 2019, versus $549.2 million in the prior year period. The improvement in net revenue was primarily attributable to both organic and acquisition-related contributions in the East segment and to a lesser extent, the Cement segment, offset by a decline in the West segment. The Company reported operating income of $80.4 million in the second quarter 2019, compared to $77.3 million in the prior year period. Net income increased 2.9% to $38.0 million in the second quarter of 2019, compared to $36.9 million in the prior year period. Adjusted EBITDA increased 3.8% to $140.5 million in the second quarter of 2019, compared to $135.3 million in the prior year period.
West Segment: The West Segment reported operating income of $31.6 million in the second quarter 2019, compared to $38.4 million in the prior year period. Adjusted EBITDA decreased to $54.8 million in the first quarter 2019, compared to $61.2 million in the prior year period. The quarterly declines in West Segment operating income and Adjusted EBITDA were primarily attributable to operational inefficiencies related to the loss of a piece of mining equipment in the West, the sale of a non-core business in the third quarter of 2018, along with increased labor and materials costs and cold weather conditions in Texas, Utah and Colorado, partially offset by increases in average selling prices on aggregates, ready-mix concrete and asphalt. Aggregates revenue in the second quarter increased 13.9% over the prior year period as a result of contributions from acquisitions completed in the second half of 2018, resulting in a 4.8% increase in organic volumes and a 4.6% increase in organic average sales prices. Ready-mix concrete revenue in the second quarter 2019 decreased 2.7% over the prior year period, primarily due to a 6.2% decrease in organic volumes, partially offset by a 3.3% increase in organic average sales prices. Asphalt revenue increased by 8.3% in the second quarter 2019 over the prior year period, as our liquid asphalt terminal which had been damaged in Hurricane Harvey was operating in 2019, but not in the comparable period in 2018.
East Segment: The East Segment reported operating income of $33.7 million in the second quarter 2019, compared to $26.9 million in the prior year period. Adjusted EBITDA increased to $54.4 million in the first quarter 2019, compared to $45.4 million in the prior year period. The quarterly improvement in East Segment operating income and Adjusted EBITDA was mainly attributable to increases in net revenue from our acquisition program, increases in average selling prices of aggregates, ready-mix concrete and asphalt, partially offset by decreases in ready-mix concrete volumes. Aggregates revenue increased 25.5%, primarily due to increases resulting from our acquisition program as well as a 4.1% and 10.6% increase in organic volumes and average sales prices, respectively. Ready-mix concrete revenue decreased 8.4% as a result of lower sales volumes, partially offset by an increase in organic average sales prices. Asphalt revenue increased 25.1% primarily as a result of a 14.2% increase in organic average sales prices, partially offset by a 1.1% decrease in organic volumes.
Cement Segment: The Cement Segment reported operating income of $25.5 million in the second quarter 2019, compared to $25.8 million in the prior year period Adjusted EBITDA increased to $35.4 million in the second quarter 2019, compared to $34.7 million in the prior year period, due primarily to the increase of 2.6% and 0.6% in organic sales volumes and organic average selling prices, respectively, during the second quarter 2019 as compared to the prior year period.
Liquidity and Capital Resources
As of June 29, 2019, the Company had cash on hand of $67.7 million and borrowing capacity under its revolving credit facility of $329.8 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 June 29, 2019, the Company had $1.9 billion in debt outstanding.
Financial Outlook
For full-year 2019, the Company estimates its Adjusted EBITDA to be in the range of $430 million to $470 million. For full-year 2019, the Company estimates its capital expenditures to be in the range of $160 million to $175 million.
Webcast and Conference Call Information
Summit Materials will conduct a conference call today at 11:00 a.m. eastern time (9:00 a.m. mountain time) to review the Company’s second quarter 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: |
57511368 |
To listen to a replay of the teleconference, which will be available through September 1, 2019:
Domestic Replay: |
1-844-512-2921 |
International Replay: |
1-412-317-6671 |
Conference ID: |
13692401 |
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 29, 2018 as filed with the Securities and Exchange Commission (the “SEC”), any factors discussed in the section entitled “Risk Factors” in any of our subsequently filed SEC filings, and the following:
- 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;
- environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use;
- rising prices for commodities, labor and other production and delivery costs 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;
- our substantial current level of indebtedness;
- our dependence on senior management and other key 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; and
- potential labor disputes.
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 |
|
Six months ended |
||||||||||||
|
|
June 29, |
|
June 30, |
|
June 29, |
|
June 30, |
||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Product |
|
$ |
467,637 |
|
|
$ |
459,967 |
|
|
$ |
739,278 |
|
|
$ |
716,774 |
|
Service |
|
84,954 |
|
|
89,268 |
|
|
119,263 |
|
|
122,377 |
|
||||
Net revenue |
|
552,591 |
|
|
549,235 |
|
|
858,541 |
|
|
839,151 |
|
||||
Delivery and subcontract revenue |
|
48,300 |
|
|
51,655 |
|
|
74,989 |
|
|
76,160 |
|
||||
Total revenue |
|
600,891 |
|
|
600,890 |
|
|
933,530 |
|
|
915,311 |
|
||||
Cost of revenue (excluding items shown separately below): |
|
|
|
|
|
|
|
|
||||||||
Product |
|
294,857 |
|
|
295,147 |
|
|
508,583 |
|
|
492,580 |
|
||||
Service |
|
62,336 |
|
|
64,130 |
|
|
88,925 |
|
|
90,053 |
|
||||
Net cost of revenue |
|
357,193 |
|
|
359,277 |
|
|
597,508 |
|
|
582,633 |
|
||||
Delivery and subcontract cost |
|
48,300 |
|
|
51,655 |
|
|
74,989 |
|
|
76,160 |
|
||||
Total cost of revenue |
|
405,493 |
|
|
410,932 |
|
|
672,497 |
|
|
658,793 |
|
||||
General and administrative expenses |
|
60,961 |
|
|
61,657 |
|
|
128,571 |
|
|
131,518 |
|
||||
Depreciation, depletion, amortization and accretion |
|
53,625 |
|
|
49,731 |
|
|
109,013 |
|
|
96,689 |
|
||||
Transaction costs |
|
390 |
|
|
1,291 |
|
|
698 |
|
|
2,557 |
|
||||
Operating income |
|
80,422 |
|
|
77,279 |
|
|
22,751 |
|
|
25,754 |
|
||||
Interest expense |
|
29,401 |
|
|
28,943 |
|
|
59,506 |
|
|
57,727 |
|
||||
Loss on debt financings |
|
— |
|
|
149 |
|
|
14,565 |
|
|
149 |
|
||||
Other income, net |
|
(3,676 |
) |
|
(916 |
) |
|
(6,479 |
) |
|
(8,571 |
) |
||||
Income (loss) from operation before taxes |
|
54,697 |
|
|
49,103 |
|
|
(44,841 |
) |
|
(23,551 |
) |
||||
Income tax expense (benefit) |
|
16,707 |
|
|
12,190 |
|
|
(11,330 |
) |
|
(4,516 |
) |
||||
Net income (loss) |
|
37,990 |
|
|
36,913 |
|
|
(33,511 |
) |
|
(19,035 |
) |
||||
Net income (loss) attributable to Summit Holdings (1) |
|
1,580 |
|
|
1,404 |
|
|
(1,149 |
) |
|
(815 |
) |
||||
Net income (loss) attributable to Summit Inc. |
|
$ |
36,410 |
|
|
$ |
35,509 |
|
|
$ |
(32,362 |
) |
|
$ |
(18,220 |
) |
Income (loss) per share of Class A common stock: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
0.32 |
|
|
$ |
0.32 |
|
|
$ |
(0.29 |
) |
|
$ |
(0.16 |
) |
Diluted |
|
$ |
0.32 |
|
|
$ |
0.32 |
|
|
$ |
(0.29 |
) |
|
$ |
(0.16 |
) |
Weighted average shares of Class A common stock: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
112,070,009 |
|
|
111,564,190 |
|
|
111,940,844 |
|
|
111,111,644 |
|
||||
Diluted |
|
112,182,555 |
|
|
112,583,321 |
|
|
111,940,844 |
|
|
111,111,644 |
|
||||
________________________________________________________
(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) |
||||||||
|
|
June 29, |
|
December 29, |
||||
|
|
2019 |
|
2018 |
||||
|
|
(unaudited) |
|
(audited) |
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
67,658 |
|
|
$ |
128,508 |
|
Accounts receivable, net |
|
294,604 |
|
|
214,518 |
|
||
Costs and estimated earnings in excess of billings |
|
45,371 |
|
|
18,602 |
|
||
Inventories |
|
208,136 |
|
|
213,851 |
|
||
Other current assets |
|
12,618 |
|
|
16,061 |
|
||
Total current assets |
|
628,387 |
|
|
591,540 |
|
||
Property, plant and equipment, less accumulated depreciation, depletion and amortization (June 29, 2019 - $881,606 and December 29, 2018 - $794,251) |
|
1,788,664 |
|
|
1,780,132 |
|
||
Goodwill |
|
1,198,177 |
|
|
1,192,028 |
|
||
Intangible assets, less accumulated amortization (June 29, 2019 - $9,054 and December 29, 2018 - $8,247) |
|
17,653 |
|
|
18,460 |
|
||
Deferred tax assets, less valuation allowance (June 29, 2019 - $27,863 and December 29, 2018 - $19,366) |
|
237,089 |
|
|
225,397 |
|
||
Operating lease right-of-use assets |
|
34,101 |
|
|
— |
|
||
Other assets |
|
50,785 |
|
|
50,084 |
|
||
Total assets |
|
$ |
3,954,856 |
|
|
$ |
3,857,641 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Current portion of debt |
|
$ |
4,765 |
|
|
$ |
6,354 |
|
Current portion of acquisition-related liabilities |
|
35,470 |
|
|
34,270 |
|
||
Accounts payable |
|
131,391 |
|
|
107,702 |
|
||
Accrued expenses |
|
113,996 |
|
|
100,491 |
|
||
Current operating lease liabilities |
|
8,470 |
|
|
— |
|
||
Billings in excess of costs and estimated earnings |
|
10,733 |
|
|
11,840 |
|
||
Total current liabilities |
|
304,825 |
|
|
260,657 |
|
||
Long-term debt |
|
1,854,189 |
|
|
1,807,502 |
|
||
Acquisition-related liabilities |
|
40,088 |
|
|
49,468 |
|
||
Tax receivable agreement liability |
|
309,733 |
|
|
309,674 |
|
||
Noncurrent operating lease liabilities |
|
26,614 |
|
|
— |
|
||
Other noncurrent liabilities |
|
96,636 |
|
|
88,195 |
|
||
Total liabilities |
|
2,632,085 |
|
|
2,515,496 |
|
||
Stockholders’ equity: |
|
|
|
|
||||
Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 112,073,494 and 111,658,927 shares issued and outstanding as of June 29, 2019 and December 29, 2018, respectively |
|
1,122 |
|
|
1,117 |
|
||
Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of June 29, 2019 and December 29, 2018 |
|
— |
|
|
— |
|
||
Additional paid-in capital |
|
1,205,221 |
|
|
1,194,204 |
|
||
Accumulated earnings |
|
97,377 |
|
|
129,739 |
|
||
Accumulated other comprehensive income |
|
5,791 |
|
|
2,681 |
|
||
Stockholders’ equity |
|
1,309,511 |
|
|
1,327,741 |
|
||
Noncontrolling interest in Summit Holdings |
|
13,260 |
|
|
14,404 |
|
||
Total stockholders’ equity |
|
1,322,771 |
|
|
1,342,145 |
|
||
Total liabilities and stockholders’ equity |
|
$ |
3,954,856 |
|
|
$ |
3,857,641 |
|
SUMMIT MATERIALS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows ($ in thousands) |
||||||||
|
|
Six months ended |
||||||
|
|
June 29, |
|
June 30, |
||||
|
|
2019 |
|
2018 |
||||
Cash flow from operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(33,511 |
) |
|
$ |
(19,035 |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
||||
Depreciation, depletion, amortization and accretion |
|
110,982 |
|
|
98,562 |
|
||
Share-based compensation expense |
|
10,605 |
|
|
14,190 |
|
||
Net gain on asset disposals |
|
(3,937 |
) |
|
(7,508 |
) |
||
Non-cash loss on debt financings |
|
2,850 |
|
|
— |
|
||
Change in deferred tax asset, net |
|
(12,550 |
) |
|
(6,934 |
) |
||
Other |
|
(120 |
) |
|
162 |
|
||
(Increase) decrease in operating assets, net of acquisitions and dispositions: |
|
|
|
|
||||
Accounts receivable, net |
|
(79,320 |
) |
|
(57,763 |
) |
||
Inventories |
|
5,208 |
|
|
(44,428 |
) |
||
Costs and estimated earnings in excess of billings |
|
(26,715 |
) |
|
(34,525 |
) |
||
Other current assets |
|
3,585 |
|
|
(1,766 |
) |
||
Other assets |
|
4,374 |
|
|
780 |
|
||
(Decrease) increase in operating liabilities, net of acquisitions and dispositions: |
|
|
|
|
||||
Accounts payable |
|
29,898 |
|
|
23,912 |
|
||
Accrued expenses |
|
9,395 |
|
|
1,674 |
|
||
Billings in excess of costs and estimated earnings |
|
(1,138 |
) |
|
(2,187 |
) |
||
Tax receivable agreement liability |
|
59 |
|
|
1,688 |
|
||
Other liabilities |
|
(3,717 |
) |
|
(540 |
) |
||
Net cash provided by (used in) operating activities |
|
15,948 |
|
|
(33,718 |
) |
||
Cash flow from investing activities: |
|
|
|
|
||||
Acquisitions, net of cash acquired |
|
(2,842 |
) |
|
(153,196 |
) |
||
Purchases of property, plant and equipment |
|
(105,569 |
) |
|
(131,657 |
) |
||
Proceeds from the sale of property, plant and equipment |
|
8,005 |
|
|
14,110 |
|
||
Other |
|
(439 |
) |
|
684 |
|
||
Net cash used for investing activities |
|
(100,845 |
) |
|
(270,059 |
) |
||
Cash flow from financing activities: |
|
|
|
|
||||
Proceeds from debt issuances |
|
300,000 |
|
|
— |
|
||
Debt issuance costs |
|
(6,246 |
) |
|
(550 |
) |
||
Payments on debt |
|
(261,025 |
) |
|
(10,772 |
) |
||
Payments on acquisition-related liabilities |
|
(9,158 |
) |
|
(31,224 |
) |
||
Distributions from partnership |
|
— |
|
|
(69 |
) |
||
Proceeds from stock option exercises |
|
784 |
|
|
15,615 |
|
||
Other |
|
(502 |
) |
|
(1,904 |
) |
||
Net cash provided by (used in) financing activities |
|
23,853 |
|
|
(28,904 |
) |
||
Impact of foreign currency on cash |
|
194 |
|
|
(471 |
) |
||
Net decrease in cash |
|
(60,850 |
) |
|
(333,152 |
) |
||
Cash and cash equivalents—beginning of period |
|
128,508 |
|
|
383,556 |
|
||
Cash and cash equivalents—end of period |
|
$ |
67,658 |
|
|
$ |
50,404 |
|
SUMMIT MATERIALS, INC. AND SUBSIDIARIES Unaudited Revenue Data by Segment and Line of Business ($ in thousands) |
||||||||||||||||
|
|
Three months ended |
|
Six months ended |
||||||||||||
|
|
June 29, |
|
June 30, |
|
June 29, |
|
June 30, |
||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Segment Net Revenue: |
|
|
|
|
|
|
|
|
||||||||
West |
|
$ |
273,306 |
|
|
$ |
293,685 |
|
|
$ |
441,535 |
|
|
$ |
462,629 |
|
East |
|
194,738 |
|
|
173,709 |
|
|
295,153 |
|
|
257,130 |
|
||||
Cement |
|
84,547 |
|
|
81,841 |
|
|
121,853 |
|
|
119,392 |
|
||||
Net Revenue |
|
$ |
552,591 |
|
|
$ |
549,235 |
|
|
$ |
858,541 |
|
|
$ |
839,151 |
|
|
|
|
|
|
|
|
|
|
||||||||
Line of Business - Net Revenue: |
|
|
|
|
|
|
|
|
||||||||
Materials |
|
|
|
|
|
|
|
|
||||||||
Aggregates |
|
$ |
128,650 |
|
|
$ |
103,690 |
|
|
$ |
216,522 |
|
|
$ |
171,140 |
|
Cement (1) |
|
77,799 |
|
|
76,413 |
|
|
110,298 |
|
|
109,530 |
|
||||
Products |
|
261,188 |
|
|
279,864 |
|
|
412,458 |
|
|
436,104 |
|
||||
Total Materials and Products |
|
467,637 |
|
|
459,967 |
|
|
739,278 |
|
|
716,774 |
|
||||
Services |
|
84,954 |
|
|
89,268 |
|
|
119,263 |
|
|
122,377 |
|
||||
Net Revenue |
|
$ |
552,591 |
|
|
$ |
549,235 |
|
|
$ |
858,541 |
|
|
$ |
839,151 |
|
|
|
|
|
|
|
|
|
|
||||||||
Line of Business - Net Cost of Revenue: |
|
|
|
|
|
|
|
|
||||||||
Materials |
|
|
|
|
|
|
|
|
||||||||
Aggregates |
|
$ |
49,652 |
|
|
$ |
36,472 |
|
|
$ |
99,542 |
|
|
$ |
75,954 |
|
Cement |
|
39,112 |
|
|
38,359 |
|
|
70,463 |
|
|
64,147 |
|
||||
Products |
|
203,035 |
|
|
218,315 |
|
|
333,890 |
|
|
349,452 |
|
||||
Total Materials and Products |
|
291,799 |
|
|
293,146 |
|
|
503,895 |
|
|
489,553 |
|
||||
Services |
|
65,394 |
|
|
66,131 |
|
|
93,613 |
|
|
93,080 |
|
||||
Net Cost of Revenue |
|
$ |
357,193 |
|
|
$ |
359,277 |
|
|
$ |
597,508 |
|
|
$ |
582,633 |
|
|
|
|
|
|
|
|
|
|
||||||||
Line of Business - Adjusted Cash Gross Profit (2): |
|
|
|
|
|
|
|
|
||||||||
Materials |
|
|
|
|
|
|
|
|
||||||||
Aggregates |
|
$ |
78,998 |
|
|
$ |
67,218 |
|
|
$ |
116,980 |
|
|
$ |
95,186 |
|
Cement (3) |
|
38,687 |
|
|
38,054 |
|
|
39,835 |
|
|
45,383 |
|
||||
Products |
|
58,153 |
|
|
61,549 |
|
|
78,568 |
|
|
86,652 |
|
||||
Total Materials and Products |
|
175,838 |
|
|
166,821 |
|
|
235,383 |
|
|
227,221 |
|
||||
Services |
|
19,560 |
|
|
23,137 |
|
|
25,650 |
|
|
29,297 |
|
||||
Adjusted Cash Gross Profit |
|
$ |
195,398 |
|
|
$ |
189,958 |
|
|
$ |
261,033 |
|
|
$ |
256,518 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Cash Gross Profit Margin (2) |
|
|
|
|
|
|
|
|
||||||||
Materials |
|
|
|
|
|
|
|
|
||||||||
Aggregates |
|
61.4 |
% |
|
64.8 |
% |
|
54.0 |
% |
|
55.6 |
% |
||||
Cement (3) |
|
45.8 |
% |
|
46.5 |
% |
|
32.7 |
% |
|
38.0 |
% |
||||
Products |
|
22.3 |
% |
|
22.0 |
% |
|
19.0 |
% |
|
19.9 |
% |
||||
Services |
|
23.0 |
% |
|
25.9 |
% |
|
21.5 |
% |
|
23.9 |
% |
||||
Total Adjusted Cash Gross Profit Margin |
|
35.4 |
% |
|
34.6 |
% |
|
30.4 |
% |
|
30.6 |
% |
||||
________________________________________________________
(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 |
|
Six months ended |
||||||||||||
Total Volume |
|
June 29, 2019 |
|
June 30, 2018 |
|
June 29, 2019 |
|
June 30, 2018 |
||||||||
Aggregates (tons) |
|
14,528 |
|
|
13,151 |
|
|
24,735 |
|
|
21,966 |
|
||||
Cement (tons) |
|
698 |
|
|
680 |
|
|
995 |
|
|
974 |
|
||||
Ready-mix concrete (cubic yards) |
|
1,398 |
|
|
1,503 |
|
|
2,489 |
|
|
2,645 |
|
||||
Asphalt (tons) |
|
1,596 |
|
|
1,611 |
|
|
2,017 |
|
|
1,961 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended |
|
Six months ended |
||||||||||||
Pricing |
|
June 29, 2019 |
|
June 30, 2018 |
|
June 29, 2019 |
|
June 30, 2018 |
||||||||
Aggregates (per ton) |
|
$ |
11.14 |
|
|
$ |
10.21 |
|
|
$ |
10.93 |
|
|
$ |
10.07 |
|
Cement (per ton) |
|
114.95 |
|
|
114.21 |
|
|
114.46 |
|
|
114.46 |
|
||||
Ready-mix concrete (per cubic yards) |
|
110.35 |
|
|
107.09 |
|
|
109.15 |
|
|
107.09 |
|
||||
Asphalt (per ton) |
|
58.16 |
|
|
54.70 |
|
|
57.42 |
|
|
54.23 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended |
|
Six months ended |
||||||||||||
|
|
Percentage Change in |
|
Percentage Change in |
||||||||||||
Year over Year Comparison |
|
Volume |
|
Pricing |
|
Volume |
|
Pricing |
||||||||
Aggregates (per ton) |
|
10.5 |
% |
|
9.1 |
% |
|
12.6 |
% |
|
8.5 |
% |
||||
Cement (per ton) |
|
2.6 |
% |
|
0.6 |
% |
|
2.2 |
% |
|
— |
% |
||||
Ready-mix concrete (per cubic yards) |
|
(7.0 |
)% |
|
3.0 |
% |
|
(5.9 |
)% |
|
1.9 |
% |
||||
Asphalt (per ton) |
|
(0.9 |
)% |
|
6.3 |
% |
|
2.9 |
% |
|
5.9 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended |
|
Six months ended |
||||||||||||
|
|
Percentage Change in |
|
Percentage Change in |
||||||||||||
Year over Year Comparison (Excluding acquisitions) |
|
Volume |
|
Pricing |
|
Volume |
|
Pricing |
||||||||
Aggregates (per ton) |
|
4.4 |
% |
|
8.0 |
% |
|
5.3 |
% |
|
7.4 |
% |
||||
Cement (per ton) |
|
2.6 |
% |
|
0.6 |
% |
|
2.2 |
% |
|
— |
% |
||||
Ready-mix concrete (per cubic yards) |
|
(7.2 |
)% |
|
2.9 |
% |
|
(6.5 |
)% |
|
1.8 |
% |
||||
Asphalt (per ton) |
|
(2.5 |
)% |
|
6.8 |
% |
|
1.6 |
% |
|
6.2 |
% |
||||
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 June 29, 2019 |
|||||||||||||||||
|
|
|
|
|
|
Gross Revenue |
|
Intercompany |
|
Net |
|||||||||
|
|
Volumes |
|
Pricing |
|
by Product |
|
Elimination/Delivery |
|
Revenue |
|||||||||
Aggregates |
|
14,528 |
|
|
$ |
11.14 |
|
|
$ |
161,842 |
|
|
$ |
(33,192 |
) |
|
$ |
128,650 |
|
Cement |
|
698 |
|
|
114.95 |
|
|
80,248 |
|
|
(2,449 |
) |
|
77,799 |
|
||||
Materials |
|
|
|
|
|
$ |
242,090 |
|
|
$ |
(35,641 |
) |
|
$ |
206,449 |
|
|||
Ready-mix concrete |
|
1,398 |
|
|
110.35 |
|
|
154,239 |
|
|
(59 |
) |
|
154,180 |
|
||||
Asphalt |
|
1,596 |
|
|
58.16 |
|
|
92,790 |
|
|
(65 |
) |
|
92,725 |
|
||||
Other Products |
|
|
|
|
|
102,828 |
|
|
(88,545 |
) |
|
14,283 |
|
||||||
Products |
|
|
|
|
|
$ |
349,857 |
|
|
$ |
(88,669 |
) |
|
$ |
261,188 |
|
|||
|
|
Six months ended June 29, 2019 |
|||||||||||||||||
|
|
|
|
|
|
Gross Revenue |
|
Intercompany |
|
Net |
|||||||||
|
|
Volumes |
|
Pricing |
|
by Product |
|
Elimination/Delivery |
|
Revenue |
|||||||||
Aggregates |
|
24,735 |
|
|
$ |
10.93 |
|
|
$ |
270,230 |
|
|
$ |
(53,708 |
) |
|
$ |
216,522 |
|
Cement |
|
995 |
|
|
114.46 |
|
|
113,848 |
|
|
(3,550 |
) |
|
110,298 |
|
||||
Materials |
|
|
|
|
|
$ |
384,078 |
|
|
$ |
(57,258 |
) |
|
$ |
326,820 |
|
|||
Ready-mix concrete |
|
2,489 |
|
|
109.15 |
|
|
271,667 |
|
|
(167 |
) |
|
271,500 |
|
||||
Asphalt |
|
2,017 |
|
|
57.42 |
|
|
115,799 |
|
|
(108 |
) |
|
115,691 |
|
||||
Other Products |
|
|
|
|
|
168,377 |
|
|
(143,110 |
) |
|
25,267 |
|
||||||
Products |
|
|
|
|
|
$ |
555,843 |
|
|
$ |
(143,385 |
) |
|
$ |
412,458 |
|
|||
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
|
||||||||||||||||||||
The tables below reconcile our net income (loss) to Adjusted EBITDA by segment for the three and six months ended June 29, 2019 and June 30, 2018. |
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
|
Three months ended June 29, 2019 |
||||||||||||||||||
by Segment |
|
West |
|
East |
|
Cement |
|
Corporate |
|
Consolidated |
||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) |
|
$ |
30,739 |
|
|
$ |
35,175 |
|
|
$ |
27,917 |
|
|
$ |
(55,841 |
) |
|
$ |
37,990 |
|
Interest expense (income) |
|
751 |
|
|
1,047 |
|
|
(2,345 |
) |
|
29,948 |
|
|
29,401 |
|
|||||
Income tax expense |
|
777 |
|
|
64 |
|
|
— |
|
|
15,866 |
|
|
16,707 |
|
|||||
Depreciation, depletion and amortization |
|
22,784 |
|
|
19,540 |
|
|
9,719 |
|
|
992 |
|
|
53,035 |
|
|||||
EBITDA |
|
$ |
55,051 |
|
|
$ |
55,826 |
|
|
$ |
35,291 |
|
|
$ |
(9,035 |
) |
|
$ |
137,133 |
|
Accretion |
|
140 |
|
|
300 |
|
|
150 |
|
|
— |
|
|
590 |
|
|||||
Transaction costs |
|
11 |
|
|
— |
|
|
— |
|
|
379 |
|
|
390 |
|
|||||
Non-cash compensation |
|
— |
|
|
— |
|
|
— |
|
|
4,699 |
|
|
4,699 |
|
|||||
Other (2) |
|
(382 |
) |
|
(1,714 |
) |
|
— |
|
|
(250 |
) |
|
(2,346 |
) |
|||||
Adjusted EBITDA (1) |
|
$ |
54,820 |
|
|
$ |
54,412 |
|
|
$ |
35,441 |
|
|
$ |
(4,207 |
) |
|
$ |
140,466 |
|
Adjusted EBITDA Margin (1) |
|
20.1 |
% |
|
27.9 |
% |
|
41.9 |
% |
|
|
|
25.4 |
% |
||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
|
Three months ended June 30, 2018 |
||||||||||||||||||
by Segment |
|
West |
|
East |
|
Cement |
|
Corporate |
|
Consolidated |
||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) |
|
$ |
36,532 |
|
|
$ |
26,421 |
|
|
$ |
27,458 |
|
|
$ |
(53,498 |
) |
|
$ |
36,913 |
|
Interest expense (income) |
|
1,554 |
|
|
947 |
|
|
(1,479 |
) |
|
27,921 |
|
|
28,943 |
|
|||||
Income tax expense (benefit) |
|
431 |
|
|
(84 |
) |
|
— |
|
|
11,843 |
|
|
12,190 |
|
|||||
Depreciation, depletion and amortization |
|
22,445 |
|
|
17,606 |
|
|
8,716 |
|
|
635 |
|
|
49,402 |
|
|||||
EBITDA |
|
$ |
60,962 |
|
|
$ |
44,890 |
|
|
$ |
34,695 |
|
|
$ |
(13,099 |
) |
|
$ |
127,448 |
|
Accretion |
|
144 |
|
|
220 |
|
|
(35 |
) |
|
— |
|
|
329 |
|
|||||
Loss on debt financings |
|
— |
|
|
— |
|
|
— |
|
|
149 |
|
|
149 |
|
|||||
Transaction costs |
|
(2 |
) |
|
— |
|
|
— |
|
|
1,293 |
|
|
1,291 |
|
|||||
Non-cash compensation |
|
— |
|
|
— |
|
|
— |
|
|
5,683 |
|
|
5,683 |
|
|||||
Other |
|
123 |
|
|
285 |
|
|
— |
|
|
33 |
|
|
441 |
|
|||||
Adjusted EBITDA (1) |
|
$ |
61,227 |
|
|
$ |
45,395 |
|
|
$ |
34,660 |
|
|
$ |
(5,941 |
) |
|
$ |
135,341 |
|
Adjusted EBITDA Margin (1) |
|
20.8 |
% |
|
26.1 |
% |
|
42.4 |
% |
|
|
|
24.6 |
% |
||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
|
Six months ended June 29, 2019 |
||||||||||||||||||
by Segment |
|
West |
|
East |
|
Cement |
|
Corporate |
|
Consolidated |
||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) |
|
$ |
21,187 |
|
|
$ |
16,808 |
|
|
$ |
17,349 |
|
|
$ |
(88,855 |
) |
|
$ |
(33,511 |
) |
Interest expense (income) |
|
1,494 |
|
|
2,055 |
|
|
(4,664 |
) |
|
60,621 |
|
|
59,506 |
|
|||||
Income tax expense (benefit) |
|
334 |
|
|
118 |
|
|
— |
|
|
(11,782 |
) |
|
(11,330 |
) |
|||||
Depreciation, depletion and amortization |
|
46,580 |
|
|
39,445 |
|
|
19,873 |
|
|
1,944 |
|
|
107,842 |
|
|||||
EBITDA |
|
$ |
69,595 |
|
|
$ |
58,426 |
|
|
$ |
32,558 |
|
|
$ |
(38,072 |
) |
|
$ |
122,507 |
|
Accretion |
|
269 |
|
|
606 |
|
|
296 |
|
|
— |
|
|
1,171 |
|
|||||
Loss on debt financings |
|
— |
|
|
— |
|
|
— |
|
|
14,565 |
|
|
14,565 |
|
|||||
Transaction costs |
|
11 |
|
|
— |
|
|
— |
|
|
687 |
|
|
698 |
|
|||||
Non-cash compensation |
|
— |
|
|
— |
|
|
— |
|
|
10,605 |
|
|
10,605 |
|
|||||
Other (2) |
|
(757 |
) |
|
(1,378 |
) |
|
— |
|
|
(357 |
) |
|
(2,492 |
) |
|||||
Adjusted EBITDA |
|
$ |
69,118 |
|
|
$ |
57,654 |
|
|
$ |
32,854 |
|
|
$ |
(12,572 |
) |
|
$ |
147,054 |
|
Adjusted EBITDA Margin (1) |
|
15.7 |
% |
|
19.5 |
% |
|
27.0 |
% |
|
|
|
17.1 |
% |
||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
|
Six months ended June 30, 2018 |
||||||||||||||||||
by Segment |
|
West |
|
East |
|
Cement |
|
Corporate |
|
Consolidated |
||||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) |
|
$ |
36,604 |
|
|
$ |
4,777 |
|
|
$ |
26,361 |
|
|
$ |
(86,777 |
) |
|
$ |
(19,035 |
) |
Interest expense (income) |
|
2,734 |
|
|
1,553 |
|
|
(3,085 |
) |
|
56,525 |
|
|
57,727 |
|
|||||
Income tax expense (benefit) |
|
49 |
|
|
(270 |
) |
|
— |
|
|
(4,295 |
) |
|
(4,516 |
) |
|||||
Depreciation, depletion and amortization |
|
44,453 |
|
|
35,118 |
|
|
15,029 |
|
|
1,345 |
|
|
95,945 |
|
|||||
EBITDA |
|
$ |
83,840 |
|
|
$ |
41,178 |
|
|
$ |
38,305 |
|
|
$ |
(33,202 |
) |
|
$ |
130,121 |
|
Accretion |
|
287 |
|
|
435 |
|
|
22 |
|
|
— |
|
|
744 |
|
|||||
Loss on debt financings |
|
— |
|
|
— |
|
|
— |
|
|
149 |
|
|
149 |
|
|||||
Transaction costs |
|
(6 |
) |
|
— |
|
|
— |
|
|
2,563 |
|
|
2,557 |
|
|||||
Non-cash compensation |
|
— |
|
|
— |
|
|
— |
|
|
14,190 |
|
|
14,190 |
|
|||||
Other (2) |
|
(6,721 |
) |
|
579 |
|
|
— |
|
|
(765 |
) |
|
(6,907 |
) |
|||||
Adjusted EBITDA |
|
$ |
77,400 |
|
|
$ |
42,192 |
|
|
$ |
38,327 |
|
|
$ |
(17,065 |
) |
|
$ |
140,854 |
|
Adjusted EBITDA Margin (1) |
|
16.7 |
% |
|
16.4 |
% |
|
32.1 |
% |
|
|
|
16.8 |
% |
||||||
_______________________________________________________
(1) Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of net revenue.
(2) In the three and six months ended June 29, 2019, we negotiated a $2.0 million reduction in the amount of a contingent liability from one of our acquisitions. In the six months ended June 30, 2018, we negotiated a $6.9 million reduction in the amount of a contingent liability from one of our acquisitions. As we had passed the period to revise the opening balance sheet for this acquisition, the adjustment was recorded in the respective period as other income.
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 June 29, 2019 and June 30, 2018. The per share amount of the net income (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 income (loss) per share.
|
|
Three months ended |
|
Six months ended |
||||||||||||||||||||||||||||
|
|
June 29, 2019 |
|
June 30, 2018 |
|
June 29, 2019 |
|
June 30, 2018 |
||||||||||||||||||||||||
Reconciliation of Net Income (Loss) Per Share to Adjusted Diluted EPS |
|
Net Income |
|
Per Equity
|
|
Net Income |
|
Per Equity
|
|
Net Loss |
|
Per Equity
|
|
Net Loss |
|
Per Equity
|
||||||||||||||||
Net income (loss) attributable to Summit Materials, Inc. |
|
$ |
36,410 |
|
|
$ |
0.32 |
|
|
$ |
35,509 |
|
|
$ |
0.31 |
|
|
$ |
(32,362 |
) |
|
$ |
(0.28 |
) |
|
$ |
(18,220 |
) |
|
$ |
(0.16 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss) attributable to noncontrolling interest |
|
1,580 |
|
|
0.01 |
|
|
1,404 |
|
|
0.01 |
|
|
(1,149 |
) |
|
(0.01 |
) |
|
(815 |
) |
|
(0.01 |
) |
||||||||
Adjustment to acquisition deferred liability |
|
(2,000 |
) |
|
(0.02 |
) |
|
— |
|
|
— |
|
|
(2,000 |
) |
|
(0.02 |
) |
|
(6,947 |
) |
|
(0.06 |
) |
||||||||
Loss on debt financings |
|
— |
|
|
— |
|
|
149 |
|
|
— |
|
|
14,565 |
|
|
0.13 |
|
|
149 |
|
|
— |
|
||||||||
Adjusted diluted net income (loss) |
|
$ |
35,990 |
|
|
$ |
0.31 |
|
|
$ |
37,062 |
|
|
$ |
0.32 |
|
|
$ |
(20,946 |
) |
|
$ |
(0.18 |
) |
|
$ |
(25,833 |
) |
|
$ |
(0.23 |
) |
Weighted-average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic Class A common stock |
|
112,070,009 |
|
|
|
|
111,564,190 |
|
|
|
|
111,940,844 |
|
|
|
|
111,111,644 |
|
|
|
||||||||||||
LP Units outstanding |
|
3,418,018 |
|
|
|
|
3,517,602 |
|
|
|
|
3,422,318 |
|
|
|
|
3,583,407 |
|
|
|
||||||||||||
Total equity units |
|
115,488,027 |
|
|
|
|
115,081,792 |
|
|
|
|
115,363,162 |
|
|
|
|
114,695,051 |
|
|
|
||||||||||||
The following table reconciles operating income to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the three and six months ended June 29, 2019 and June 30, 2018.
|
|
Three months ended |
|
Six months ended |
||||||||||||
|
|
June 29, |
|
June 30, |
|
June 29, |
|
June 30, |
||||||||
Reconciliation of Operating Income to Adjusted Cash Gross Profit |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
($ in thousands) |
|
|
|
|
|
|
|
|
||||||||
Operating income |
|
$ |
80,422 |
|
|
$ |
77,279 |
|
|
$ |
22,751 |
|
|
$ |
25,754 |
|
General and administrative expenses |
|
60,961 |
|
|
61,657 |
|
|
128,571 |
|
|
131,518 |
|
||||
Depreciation, depletion, amortization and accretion |
|
53,625 |
|
|
49,731 |
|
|
109,013 |
|
|
96,689 |
|
||||
Transaction costs |
|
390 |
|
|
1,291 |
|
|
698 |
|
|
2,557 |
|
||||
Adjusted Cash Gross Profit (exclusive of items shown separately) |
|
$ |
195,398 |
|
|
$ |
189,958 |
|
|
$ |
261,033 |
|
|
$ |
256,518 |
|
Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1) |
|
35.4 |
% |
|
34.6 |
% |
|
30.4 |
% |
|
30.6 |
% |
||||
_______________________________________________________
(1) Adjusted Cash Gross Profit Margin is defined as Adjusted Cash Gross Profit as a percentage of net revenue.
The following table reconciles net cash provided by (used in) operating activities to free cash flow for the three and six months ended June 29, 2019 and June 30, 2018.
|
|
Three months ended |
|
Six months ended |
||||||||||||
|
|
June 29, |
|
June 30, |
|
June 29, |
|
June 30, |
||||||||
($ in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Net income (loss) |
|
$ |
37,990 |
|
|
$ |
36,913 |
|
|
$ |
(33,511 |
) |
|
$ |
(19,035 |
) |
Non-cash items |
|
71,751 |
|
|
64,277 |
|
|
107,830 |
|
|
98,472 |
|
||||
Net income (loss) adjusted for non-cash items |
|
109,741 |
|
|
101,190 |
|
|
74,319 |
|
|
79,437 |
|
||||
Change in working capital accounts |
|
(63,117 |
) |
|
(83,541 |
) |
|
(58,371 |
) |
|
(113,155 |
) |
||||
Net cash provided by (used in) operating activities |
|
46,624 |
|
|
17,649 |
|
|
15,948 |
|
|
(33,718 |
) |
||||
Capital expenditures, net of asset sales |
|
(38,173 |
) |
|
(75,830 |
) |
|
(97,564 |
) |
|
(117,547 |
) |
||||
Free cash flow |
|
$ |
8,451 |
|
|
$ |
(58,181 |
) |
|
$ |
(81,616 |
) |
|
$ |
(151,265 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190801005172/en/
Mr. Brian Harris
Executive Vice President and Chief Financial Officer
Summit Materials, Inc.
[email protected]
Source: Summit Materials