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Summit Materials, Inc. Reports Fourth Quarter and Full Year 2022 Results

Record Safety Performance

Record Annual Organic Pricing Growth for All Lines of Business

Record Annual Operating Income

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 fourth quarter and full year ended December 31, 2022. All comparisons are versus the quarter ended January 1, 2022 unless noted otherwise.

 

 

Three months ended

 

Year ended

($ in thousands , except per share amounts)

 

December 31,

2022

 

January 1,

2022

 

% Chg vs. PY

 

December 31,

2022

 

January 1,

2022

 

% Chg vs. PY

Net revenue

 

$

511,662

 

$

553,426

 

(7.5) %

 

$

2,222,084

 

$

2,232,696

 

(0.5) %

Operating income

 

 

65,044

 

 

57,184

 

13.7 %

 

 

269,047

 

 

253,065

 

6.3 %

Net income

 

 

30,326

 

 

44,390

 

(31.7) %

 

 

275,943

 

 

154,281

 

78.9 %

Basic EPS

 

$

0.25

 

$

0.36

 

(30.6) %

 

$

2.27

 

$

1.27

 

78.7 %

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Cash Gross Profit

 

 

161,618

 

 

161,604

 

— %

 

 

649,345

 

 

673,259

 

(3.6) %

Adjusted EBITDA

 

 

119,291

 

 

124,272

 

(4.0) %

 

 

491,476

 

 

520,082

 

(5.5) %

"Our fourth quarter caps a year of tremendous strategic progress. I am proud that, despite challenging macro conditions, in 2022 Summit Materials effectively completed our divestiture program, further fortified our balance sheet, set an Elevate Summit high water mark for ROIC, returned over $100 million to shareholders, and delivered record organic pricing growth across all lines of business," commented Anne Noonan, Summit Materials President and CEO. "Thanks to our team's dedicated focus on our Elevate Summit strategy we navigated dynamic market conditions and delivered admirable financial results consistent with the expectations we previously laid out. Achieving solid Adjusted EBITDA growth on a pro forma basis in the midst of historic cost inflation represents very strong operating performance and provides substantial momentum heading into 2023.

"More importantly, as we look to 2023, we strongly believe that the outlook we provide today is both achievable and appropriate given the level of uncertainty in the marketplace. We are well positioned and prepared to execute on the commercial and operational plans that are within our control with especially strong tailwinds from pricing expected in the year ahead. That said, cost trends and residential end market visibility are cause for a certain amount of managerial caution as we move into 2023. We believe we are taking a balanced, if not prudent, approach in setting expectation for next year and will leverage Summit's organizational agility to mitigate risk and capitalize on all market opportunities available to us."

Brian Harris, CFO of Summit Materials added, "The portfolio optimizing transactions we've completed since the launch of Elevate Summit together with a materials-led approach to M&A not only enhances our product mix and profitability, but also strengthens our balance sheet and the economic durability of our company. We continue to pursue a capital allocation approach that first prioritizes investments in high return organic and inorganic opportunities and then looks to opportunistically return capital to shareholders. This, coupled with sound operational execution, is a powerful combination to drive attractive shareholder value."

2023 Guidance

For the full year 2023, Summit is currently projecting Adjusted EBITDA of approximately $480 million to $520 million and expects 2023 capital expenditures of approximately $220 million to $240 million including greenfield projects.

Adjusted EBITDA is a non-GAAP measure. Refer to the “Non-GAAP Financial Measures” section for more information. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.

Full Year 2022 | Total Company Results

Net revenue decreased $10.6 million, or 0.5% in 2022 to $2.2 billion, as strong pricing growth across all lines of business nearly offset lower volumes and the impact of divestitures.

Operating income increased $16.0 million, or 6.3% in 2022 to $269.0 million, as higher revenue combined with lower depreciation, depletion, and amortization as well as lower general and administrative expenses more than offset higher cost of revenue. Summit's operating margin percentage for 2022 increased to 12.1% from 11.3% in 2021, due to the factors noted above.

Net income attributable to Summit Inc. increased to $272.1 million, or $2.27 per basic share, compared to $152.2 million, or $1.27 per basic share in the comparable prior year period. Summit reported adjusted diluted net income of $153.9 million, or $1.27 per adjusted diluted share as compared to $138.4 million, or $1.14 per adjusted diluted share in the prior year period.

Adjusted EBITDA decreased $28.6 million, or 5.5% to $491.5 million, primarily due to a decrease of $40.9 million from divestitures.

Fourth Quarter 2022 | Total Company Results

Net revenue decreased $41.8 million, or 7.5% in the fourth quarter to $511.7 million, as increases in average sales prices across all lines of business were more than offset by lower volumes, which includes the impact of divestitures.

Operating income increased $7.9 million, or 13.7% in the fourth quarter to $65.0 million, due to lower depletion, amortization and accretion expenses as well as gains on the sale of property, plant and equipment. Summit's operating margin percentage for the three months ended December 31, 2022 increased to 12.7% from 10.3%, from the comparable period a year ago.

Net income attributable to Summit Inc. decreased to $29.8 million, or $0.25 per basic share, compared to $43.8 million, or $0.36 per basic share in the comparable prior year period. Summit reported adjusted diluted net income of $38.3 million, or $0.32 per adjusted diluted share as compared to $34.0 million, or $0.28 per adjusted diluted share in the prior year period.

Adjusted EBITDA decreased $5.0 million, or 4.0% to $119.3 million reflecting the impact of divestitures and inflationary cost of revenue conditions that more than offset pricing gains and lower general and administrative expenses relative to the prior year period. Excluding the impacts of acquisitions and divestitures, Adjusted EBITDA would have grown in the fourth quarter.

Full Year 2022 | Results by Line of Business

Aggregates Business: Aggregates net revenues increased $10.8 million to $584.0 million in 2022. Aggregates adjusted cash gross profit margin decreased to 48.5% in 2022 as compared to 51.7% in 2021. Aggregates sales volume decreased 7.3% in 2022, primarily reflecting the impact of divestitures and unfavorable weather conditions. Excluding divestitures, organic sales volume decreased 2.8% in 2022. By market, volume performance was strongest in Virginia, Houston, and the Intermountain West. 2022 was a record pricing year as average selling prices for aggregates increased 8.2% fueled by 10.4% pricing growth in the West Segment and 7.3% pricing growth in the East Segment.

Cement Business: Cement Segment net revenues increased 20.0% to $357.7 million in 2022. Cement Segment adjusted cash gross profit margin of 39.6% in 2022 was relatively flat compared to 2021 adjusted cash gross profit margin of 39.9%. Sales volume of cement increased 4.2% and average selling prices increased 12.0% in 2022.

Products Business: Products net revenues decreased 4.8% in 2022. Products adjusted cash gross profit margin of 17.1% in 2022 decreased from 18.3% in 2021. Ready-mix concrete average selling prices increased 13.3% reflecting inflation-justified price increases and sales volumes decreased 13.5%, which includes the impact of divestitures. Ready-mix volumes in Houston and Salt Lake City, the Company's two primary residential markets, decreased 4.3% and 4.7%, respectively in 2022. Average selling prices for asphalt increased 19.0% with pricing growth across both reporting segments. Asphalt volume decreased 26.4% due to the divestiture of a paving business in 2021.

Fourth Quarter 2022 | Results by Line of Business

Aggregates Business: Aggregates net revenues decreased by $6.4 million to $135.6 million in the fourth quarter. Aggregates adjusted cash gross profit margin increased to 47.8% in the fourth quarter as compared to 45.7% in the prior year period. Aggregates sales volume decreased 17.0% in the fourth quarter due primarily to divestitures in the East Segment. Organic aggregates sales volumes declined 12.0% driven by a combination of unfavorable weather conditions, supply chain related disruptions, and moderating residential demand. Average selling prices for aggregates increased 13.9% in the fourth quarter with growth across all markets and led by the strongest gains in Texas, the Intermountain West, and the Carolinas.

Cement Business: Cement Segment net revenues increased 23.6% to $97.9 million in the fourth quarter. Cement Segment adjusted cash gross profit margin increased to 47.1% in the fourth quarter, compared to 42.7% in the prior year period as strong pricing gains more than offset higher variable costs and a greater proportion of sales from imports. Sales volume of cement increased 1.7% reflecting a healthy demand environment. Average selling prices increased 16.6% in the fourth quarter driven by compounding pricing actions taken in 2022 and an ongoing focus to improve customer mix.

Products Business: Products net revenues were $221.5 million in the fourth quarter, compared to $263.2 million in the prior year period. Products adjusted cash gross profit margin decreased to 17.1% in the fourth quarter, versus 18.3% in the prior year period. Organic average sales price for ready-mix concrete increased 20.7% driven by pricing growth across all markets, with strong, double-digit growth in Texas and the Intermountain West. Organic sales volumes of ready-mix concrete decreased 16.3% due to wet conditions, particularly in Texas and, to a lesser extent, moderating residential activity. Organic average selling prices for asphalt increased 19.3%, driven by strong pricing gains in North Texas and the Intermountain West. Organic asphalt sales volume decreased 12.3% as volume growth in the Intermountain West was more than offset by lower sales volumes in North Texas.

Full Year 2022 | Results By Reporting Segment

West Segment: The West Segment operating income increased 6.2% to $181.8 million and Adjusted EBITDA increased 3.3% to $280.6 million in 2022. Aggregates revenue in 2022 increased 9.0% driven by a 10.4% increase in average sales prices that was only partially offset by a 1.3% decrease in volume. Despite lower volumes in Texas and the Intermountain West, ready-mix concrete revenue in 2022 increased 9.5% with average sales price growth of 14.3% including double-digit pricing growth in Houston and Salt Lake City. Asphalt revenue increased by 3.7% as volumes decreased 10.2% due to a divestiture in the second quarter 2021 that was more than offset by 17.7% growth in average selling prices in 2022.

East Segment: The East Segment operating income decreased 28.6% to $64.6 million and Adjusted EBITDA decreased 28.8% to $129.2 million in 2022 due primarily to divestitures. Aggregates revenue decreased 7.1% despite 7.3% growth in average selling prices as volumes declined 13.4% due primarily to divestitures and unfavorable weather conditions. Ready-mix concrete revenue decreased 40.6% as volumes decreased by 44.1%, partially offset by average selling price growth of 6.4%. Asphalt revenue decreased 52.2% with volumes down 54.7% due to divestitures. Asphalt average selling prices increased 17.3% on higher liquid asphalt index prices across several markets.

Cement Segment: The Cement Segment operating income increased 34.8% to $89.2 million. Adjusted EBITDA increased 7.2% to $125.6 million in 2022 as demand conditions supported volume and pricing growth. The segment reported growth in sales volumes and average selling prices of 4.2% and 12.0%, respectively in 2022.

Fourth Quarter 2022 | Results By Reporting Segment

West Segment: The West Segment operating income increased 7.6% to $38.2 million and Adjusted EBITDA increased 8.5% to $64.9 million in the fourth quarter due primarily to pricing gains that more than offset lower volumes and inflationary cost conditions. Aggregates revenue in the fourth quarter increased 4.2% as 20.9% pricing growth was partially offset by 13.8% volume declines. Pricing growth was strongest in Texas and Salt Lake City and followed by more moderate growth in British Columbia. Ready-mix concrete revenue in the fourth quarter increased 2.1% driven by 20.6% pricing growth and only partially offset by lower volumes, particularly in Houston. Lower aggregates and ready-mix volumes in Texas were due, in part, to wet weather conditions. Asphalt revenue increased 4.2% in the fourth quarter as sales prices increased 18.9% and volumes decreased 12.4% in the period.

East Segment: The East Segment operating income decreased 28.2% to $15.2 million and Adjusted EBITDA decreased 30.2% to $30.3 million in the fourth quarter reflecting the impact of divestitures. The impact from divestitures on Adjusted EBITDA was approximately $13.6 million in the period. Aggregates revenue decreased 13.4% versus the prior year period. Organic aggregates volumes decreased 9.8% driven, in part, by wet conditions in the Carolinas. Aggregates pricing increased 8.4% with double-digit growth in the Carolinas followed by high-single-digit growth in Northern Kansas, Missouri, and Virginia. Ready-mix concrete revenue decreased 50.8% due primarily to divestitures and despite average selling price growth of 10.4% in the period. Due to divestitures, asphalt revenue decreased 81.4%.

Cement Segment: The Cement Segment operating income increased 64.4% to $33.5 million in the fourth quarter. Adjusted EBITDA increased $6.7 million as revenue growth combined with greater contribution from Green America Recycling to more than offset inflationary conditions. In the fourth quarter, the Cement Segment reported a volume increase of 1.7% and average selling price growth of 16.6%.

Liquidity and Capital Resources

As of December 31, 2022, the Company had $520.5 million in cash and $1.5 billion in debt outstanding. The Company's $345 million revolving credit facility has $325.2 million available after outstanding letters of credit. In January 2023, the Company amended its senior secured revolving credit facility, increasing the total availability to $395 million and extending the maturity date to January 2028.

For the year ended December 31, 2022, cash flow provided by operations was $284.1 million and cash paid for capital expenditures was $266.7 million.

As of December 31, 2022, approximately $149.0 million remained available for share repurchase under the share repurchase program.

Webcast and Conference Call Information

Summit Materials will conduct a conference call on Thursday, February 16, 2023, at 1:00 p.m. eastern time (11:00 a.m. mountain time) to review the Company’s fourth quarter and full year 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 fourth quarter and full year 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/534973317.

To participate in the live teleconference for fourth quarter and full year 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 February 23, 2023:

Domestic Replay

1-800-770-2030

International Replay:

1-647-362-9199

Conference ID:

1542153

About Summit Materials

Summit Materials is a leading vertically integrated materials-based company that supplies aggregates, cement, ready-mix concrete and asphalt in the United States and British Columbia, Canada. Summit is a geographically diverse, materials-based business of scale that offers customers a single-source provider of construction materials and related downstream products in the public infrastructure, residential and nonresidential end markets. Summit has a strong track record of successful acquisitions since its founding and continues to pursue growth opportunities in new and existing markets. For more information about Summit Materials, please visit www.summit-materials.com.

Non-GAAP Financial Measures

The Securities and Exchange Commission (“SEC”) regulates the use of “non-GAAP financial measures,” such as Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, 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.

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.

 

-

 

our dependence on the construction industry and the strength of the local economies in which we operate, including residential;

 

-

 

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 and portfolio optimization 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;

 

-

 

the impact of rising interest rates;

 

-

 

declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities, the federal government 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;

 

-

 

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;

 

-

 

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;

 

-

 

costs associated with pending and future litigation;

 

-

 

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;

 

-

 

the impact of the COVID-19 pandemic, and responses to it, including vaccine mandates, or any similar crisis, on our business.

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

 

Year ended

 

 

December 31,

 

January 1,

 

December 31,

 

January 1,

 

 

2022

 

2022

 

2022

 

2022

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

(audited)

Revenue:

 

 

 

 

 

 

 

 

Product

 

$

447,784

 

 

$

479,313

 

 

$

1,933,530

 

 

$

1,923,285

 

Service

 

 

63,878

 

 

 

74,113

 

 

 

288,554

 

 

 

309,411

 

Net revenue

 

 

511,662

 

 

 

553,426

 

 

 

2,222,084

 

 

 

2,232,696

 

Delivery and subcontract revenue

 

 

40,612

 

 

 

43,242

 

 

 

190,438

 

 

 

176,973

 

Total revenue

 

 

552,274

 

 

 

596,668

 

 

 

2,412,522

 

 

 

2,409,669

 

Cost of revenue (excluding items shown separately below):

 

 

 

 

 

 

 

 

Product

 

 

302,056

 

 

 

334,371

 

 

 

1,344,944

 

 

 

1,314,416

 

Service

 

 

47,988

 

 

 

57,451

 

 

 

227,795

 

 

 

245,021

 

Net cost of revenue

 

 

350,044

 

 

 

391,822

 

 

 

1,572,739

 

 

 

1,559,437

 

Delivery and subcontract cost

 

 

40,612

 

 

 

43,242

 

 

 

190,438

 

 

 

176,973

 

Total cost of revenue

 

 

390,656

 

 

 

435,064

 

 

 

1,763,177

 

 

 

1,736,410

 

General and administrative expenses

 

 

50,684

 

 

 

50,274

 

 

 

190,218

 

 

 

196,728

 

Depreciation, depletion, amortization and accretion

 

 

49,967

 

 

 

55,715

 

 

 

200,450

 

 

 

229,366

 

Gain on sale of property, plant and equipment

 

 

(4,077

)

 

 

(1,569

)

 

 

(10,370

)

 

 

(5,900

)

Operating income

 

 

65,044

 

 

 

57,184

 

 

 

269,047

 

 

 

253,065

 

Interest expense

 

 

24,241

 

 

 

19,704

 

 

 

86,969

 

 

 

92,240

 

Loss on debt financings

 

 

1,737

 

 

 

 

 

 

1,737

 

 

 

6,016

 

Tax receivable agreement expense (benefit)

 

 

612

 

 

 

(6,779

)

 

 

1,566

 

 

 

(6,779

)

Loss (gain) on sale of businesses

 

 

1,984

 

 

 

(4,692

)

 

 

(172,389

)

 

 

(20,011

)

Other income, net

 

 

(5,368

)

 

 

(6,317

)

 

 

(10,324

)

 

 

(17,038

)

Income from operations before taxes

 

 

41,838

 

 

 

55,268

 

 

 

361,488

 

 

 

198,637

 

Income tax expense

 

 

11,512

 

 

 

10,878

 

 

 

85,545

 

 

 

44,356

 

Net income

 

 

30,326

 

 

 

44,390

 

 

 

275,943

 

 

 

154,281

 

Net income attributable to Summit Holdings (1)

 

 

491

 

 

 

552

 

 

 

3,798

 

 

 

2,097

 

Net income attributable to Summit Inc.

 

$

29,835

 

 

$

43,838

 

 

$

272,145

 

 

$

152,184

 

Earnings per share of Class A common stock:

 

 

 

 

 

 

 

 

Basic

 

$

0.25

 

 

$

0.36

 

 

$

2.27

 

 

$

1.27

 

Diluted

 

$

0.25

 

 

$

0.36

 

 

$

2.26

 

 

$

1.26

 

Weighted average shares of Class A common stock:

 

 

 

 

 

 

 

 

Basic

 

 

118,542,728

 

 

 

120,804,241

 

 

 

119,894,444

 

 

 

119,629,294

 

Diluted

 

 

119,159,955

 

 

 

121,692,811

 

 

 

120,628,459

 

 

 

120,721,146

 

________________________________________________________

(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)

 

 

 

December 31,

 

January 1,

 

 

2022

 

2022

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

520,451

 

$

380,961

Accounts receivable, net

 

 

256,669

 

 

287,226

Costs and estimated earnings in excess of billings

 

 

6,510

 

 

7,600

Inventories

 

 

212,491

 

 

180,760

Other current assets

 

 

20,787

 

 

11,827

Current assets held for sale

 

 

1,468

 

 

1,236

Total current assets

 

 

1,018,376

 

 

869,610

Property, plant and equipment, net

 

 

1,813,702

 

 

1,842,908

Goodwill

 

 

1,132,546

 

 

1,163,750

Intangible assets, net

 

 

71,384

 

 

69,396

Deferred tax assets

 

 

136,986

 

 

204,566

Operating lease right-of-use assets

 

 

37,889

 

 

30,150

Other assets

 

 

44,809

 

 

58,745

Total assets

 

$

4,255,692

 

$

4,239,125

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Current portion of debt

 

$

5,096

 

$

6,354

Current portion of acquisition-related liabilities

 

 

13,718

 

 

13,110

Accounts payable

 

 

104,031

 

 

128,232

Accrued expenses

 

 

119,967

 

 

147,476

Current operating lease liabilities

 

 

7,296

 

 

6,497

Billings in excess of costs and estimated earnings

 

 

5,739

 

 

7,401

Total current liabilities

 

 

255,847

 

 

309,070

Long-term debt

 

 

1,488,569

 

 

1,591,019

Acquisition-related liabilities

 

 

29,051

 

 

33,369

Tax receivable agreement liability

 

 

327,812

 

 

326,548

Noncurrent operating lease liabilities

 

 

35,737

 

 

28,880

Other noncurrent liabilities

 

 

106,686

 

 

127,027

Total liabilities

 

 

2,243,702

 

 

2,415,913

Stockholders’ equity:

 

 

 

 

Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 118,408,655 and 118,705,108 shares issued and outstanding as of December 31, 2022 and January 1, 2022, respectively

 

 

1,185

 

 

1,188

Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of December 31, 2022 and January 1, 2022

 

 

 

 

Additional paid-in capital

 

 

1,404,122

 

 

1,326,340

Accumulated earnings

 

 

590,895

 

 

478,956

Accumulated other comprehensive income

 

 

3,084

 

 

7,083

Stockholders’ equity

 

 

1,999,286

 

 

1,813,567

Noncontrolling interest in Summit Holdings

 

 

12,704

 

 

9,645

Total stockholders’ equity

 

 

2,011,990

 

 

1,823,212

Total liabilities and stockholders’ equity

 

$

4,255,692

 

$

4,239,125

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

($ in thousands)

 

 

 

Year ended

 

 

December 31,

 

January 1,

 

 

2022

 

2022

Cash flows from operating activities:

 

 

 

 

Net income

 

$

275,943

 

 

$

154,281

 

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

 

 

 

 

Depreciation, depletion, amortization and accretion

 

 

212,501

 

 

 

235,278

 

Share-based compensation expense

 

 

18,347

 

 

 

19,705

 

Net gain on asset and business disposals

 

 

(182,263

)

 

 

(25,559

)

Non-cash loss on debt financings

 

 

915

 

 

 

2,116

 

Change in deferred tax asset, net

 

 

69,568

 

 

 

24,685

 

Other

 

 

(1,447

)

 

 

(2,249

)

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

 

 

 

 

Accounts receivable, net

 

 

10,749

 

 

 

(31,292

)

Inventories

 

 

(63,247

)

 

 

3,815

 

Costs and estimated earnings in excess of billings

 

 

(4,960

)

 

 

(394

)

Other current assets

 

 

(7,368

)

 

 

(2,483

)

Other assets

 

 

(6,946

)

 

 

7,748

 

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

 

 

 

 

Accounts payable

 

 

(9,218

)

 

 

4,593

 

Accrued expenses

 

 

(25,200

)

 

 

(7,030

)

Billings in excess of costs and estimated earnings

 

 

(768

)

 

 

(7,138

)

Tax receivable agreement liability

 

 

1,264

 

 

 

4,868

 

Other liabilities

 

 

(3,772

)

 

 

(19,015

)

Net cash provided by operating activities

 

 

284,098

 

 

 

361,929

 

Cash flows from investing activities:

 

 

 

 

Acquisitions, net of cash acquired

 

 

(22,730

)

 

 

(19,513

)

Purchases of property, plant and equipment

 

 

(266,733

)

 

 

(211,982

)

Proceeds from the sale of property, plant and equipment

 

 

15,374

 

 

 

11,674

 

Proceeds from sale of businesses

 

 

373,073

 

 

 

128,337

 

Other

 

 

(3,162

)

 

 

236

 

Net cash provided by (used in) investing activities

 

 

95,822

 

 

 

(91,248

)

Cash flows from financing activities:

 

 

 

 

Debt issuance costs

 

 

(1,557

)

 

 

 

Payments on debt

 

 

(122,536

)

 

 

(329,010

)

Payments on acquisition-related liabilities

 

 

(13,428

)

 

 

(10,360

)

Distributions from partnership

 

 

(678

)

 

 

 

Repurchases of common stock

 

 

(100,980

)

 

 

 

Proceeds from stock option exercises

 

 

213

 

 

 

32,451

 

Other

 

 

(27

)

 

 

(1,008

)

Net cash used in financing activities

 

 

(238,993

)

 

 

(307,927

)

Impact of foreign currency on cash

 

 

(1,437

)

 

 

26

 

Net increase (decrease) in cash

 

 

139,490

 

 

 

(37,220

)

Cash and cash equivalents—beginning of period

 

 

380,961

 

 

 

418,181

 

Cash and cash equivalents—end of period

 

$

520,451

 

 

$

380,961

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Revenue Data by Segment and Line of Business

($ in thousands)

 

 

 

Three months ended

 

Year ended

 

 

December 31,

 

January 1,

 

December 31,

 

January 1,

 

 

2022

 

2022

 

2022

 

2022

Segment Net Revenue:

 

 

 

 

 

 

 

 

West

 

$

288,881

 

 

$

282,530

 

 

$

1,272,041

 

 

$

1,169,466

 

East

 

 

124,836

 

 

 

191,653

 

 

 

592,307

 

 

 

764,996

 

Cement

 

 

97,945

 

 

 

79,243

 

 

 

357,736

 

 

 

298,234

 

Net Revenue

 

$

511,662

 

 

$

553,426

 

 

$

2,222,084

 

 

$

2,232,696

 

 

 

 

 

 

 

 

 

 

Line of Business - Net Revenue:

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

135,596

 

 

$

141,956

 

 

$

583,993

 

 

$

573,157

 

Cement (1)

 

 

90,660

 

 

 

74,128

 

 

 

332,518

 

 

 

282,081

 

Products

 

 

221,528

 

 

 

263,229

 

 

 

1,017,019

 

 

 

1,068,047

 

Total Materials and Products

 

 

447,784

 

 

 

479,313

 

 

 

1,933,530

 

 

 

1,923,285

 

Services

 

 

63,878

 

 

 

74,113

 

 

 

288,554

 

 

 

309,411

 

Net Revenue

 

$

511,662

 

 

$

553,426

 

 

$

2,222,084

 

 

$

2,232,696

 

 

 

 

 

 

 

 

 

 

Line of Business - Net Cost of Revenue:

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

70,809

 

 

$

77,103

 

 

$

300,576

 

 

$

276,756

 

Cement

 

 

44,511

 

 

 

40,308

 

 

 

190,838

 

 

 

163,108

 

Products

 

 

183,548

 

 

 

215,127

 

 

 

842,890

 

 

 

872,132

 

Total Materials and Products

 

 

298,868

 

 

 

332,538

 

 

 

1,334,304

 

 

 

1,311,996

 

Services

 

 

51,176

 

 

 

59,284

 

 

 

238,435

 

 

 

247,441

 

Net Cost of Revenue

 

$

350,044

 

 

$

391,822

 

 

$

1,572,739

 

 

$

1,559,437

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

64,787

 

 

$

64,853

 

 

$

283,417

 

 

$

296,401

 

Cement (3)

 

 

46,149

 

 

 

33,820

 

 

 

141,680

 

 

 

118,973

 

Products

 

 

37,980

 

 

 

48,102

 

 

 

174,129

 

 

 

195,915

 

Total Materials and Products

 

 

148,916

 

 

 

146,775

 

 

 

599,226

 

 

 

611,289

 

Services

 

 

12,702

 

 

 

14,829

 

 

 

50,119

 

 

 

61,970

 

Adjusted Cash Gross Profit

 

$

161,618

 

 

$

161,604

 

 

$

649,345

 

 

$

673,259

 

 

 

 

 

 

 

 

 

 

Adjusted Cash Gross Profit Margin (2)

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

 

47.8

%

 

 

45.7

%

 

 

48.5

%

 

 

51.7

%

Cement (3)

 

 

47.1

%

 

 

42.7

%

 

 

39.6

%

 

 

39.9

%

Products

 

 

17.1

%

 

 

18.3

%

 

 

17.1

%

 

 

18.3

%

Services

 

 

19.9

%

 

 

20.0

%

 

 

17.4

%

 

 

20.0

%

Total Adjusted Cash Gross Profit Margin

 

 

31.6

%

 

 

29.2

%

 

 

29.2

%

 

 

30.2

%

________________________________________________________

(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

 

Year ended

Total Volume

 

December 31,

2022

 

January 1,

2022

 

December 31,

2022

 

January 1,

2022

Aggregates (tons)

 

 

13,036

 

 

 

15,701

 

 

 

59,525

 

 

 

64,185

 

Cement (tons)

 

 

646

 

 

 

635

 

 

 

2,533

 

 

 

2,431

 

Ready-mix concrete (cubic yards)

 

 

1,082

 

 

 

1,450

 

 

 

5,043

 

 

 

5,831

 

Asphalt (tons)

 

 

683

 

 

 

1,151

 

 

 

3,724

 

 

 

5,062

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Year ended

Pricing

 

December 31,

2022

 

January 1,

2022

 

December 31,

2022

 

January 1,

2022

Aggregates (per ton)

 

$

12.70

 

 

$

11.15

 

 

$

12.07

 

 

$

11.16

 

Cement (per ton)

 

 

141.77

 

 

 

121.60

 

 

 

134.66

 

 

 

120.24

 

Ready-mix concrete (per cubic yards)

 

 

146.01

 

 

 

122.04

 

 

 

136.47

 

 

 

120.47

 

Asphalt (per ton)

 

 

76.71

 

 

 

62.48

 

 

 

72.65

 

 

 

61.05

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Year ended

 

 

Percentage Change in

 

Percentage Change in

Year over Year Comparison

 

Volume

 

Pricing

 

Volume

 

Pricing

Aggregates (per ton)

 

 

(17.0

) %

 

 

13.9

%

 

 

(7.3

) %

 

 

8.2

%

Cement (per ton)

 

 

1.7

%

 

 

16.6

%

 

 

4.2

%

 

 

12.0

%

Ready-mix concrete (per cubic yards)

 

 

(25.4

) %

 

 

19.6

%

 

 

(13.5

) %

 

 

13.3

%

Asphalt (per ton)

 

 

(40.7

) %

 

 

22.8

%

 

 

(26.4

) %

 

 

19.0

%

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Year ended

 

 

Percentage Change in

 

Percentage Change in

Year over Year Comparison (Excluding acquisitions & divestitures)

 

Volume

 

Pricing

 

Volume

 

Pricing

Aggregates (per ton)

 

 

(12.0

) %

 

 

14.4

%

 

 

(3.6

) %

 

 

8.9

%

Cement (per ton)

 

 

1.7

 %

 

 

16.6

%

 

 

4.2

%

 

 

12.0

%

Ready-mix concrete (per cubic yards)

 

 

(16.3

) %

 

 

20.7

%

 

 

(5.2

) %

 

 

14.6

%

Asphalt (per ton)

 

 

(12.3

) %

 

 

19.3

%

 

 

(3.3

) %

 

 

16.9

%

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 December 31, 2022

 

 

 

 

 

 

Gross Revenue

 

Intercompany

 

Net

 

 

Volumes

 

Pricing

 

by Product

 

Elimination/Delivery

 

Revenue

Aggregates

 

13,036

 

$

12.70

 

$

165,549

 

$

(29,953

)

 

$

135,596

Cement

 

646

 

 

141.77

 

 

91,565

 

 

(905

)

 

 

90,660

Materials

 

 

 

 

 

$

257,114

 

$

(30,858

)

 

$

226,256

Ready-mix concrete

 

1,082

 

 

146.01

 

 

158,007

 

 

(58

)

 

 

157,949

Asphalt

 

683

 

 

76.71

 

 

52,406

 

 

(45

)

 

 

52,361

Other Products

 

 

 

 

 

 

73,470

 

 

(62,252

)

 

 

11,218

Products

 

 

 

 

 

$

283,883

 

$

(62,355

)

 

$

221,528

 

 

Year ended December 31, 2022

 

 

 

 

 

 

Gross Revenue

 

Intercompany

 

Net

 

 

Volumes

 

Pricing

 

by Product

 

Elimination/Delivery

 

Revenue

Aggregates

 

59,525

 

$

12.07

 

$

718,492

 

$

(134,499

)

 

$

583,993

Cement

 

2,533

 

 

134.66

 

 

341,082

 

 

(8,564

)

 

 

332,518

Materials

 

 

 

 

 

$

1,059,574

 

$

(143,063

)

 

$

916,511

Ready-mix concrete

 

5,043

 

 

136.47

 

 

688,185

 

 

(235

)

 

 

687,950

Asphalt

 

3,724

 

 

72.65

 

 

270,542

 

 

(324

)

 

 

270,218

Other Products

 

 

 

 

 

 

346,582

 

 

(287,731

)

 

 

58,851

Products

 

 

 

 

 

$

1,305,309

 

$

(288,290

)

 

$

1,017,019

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 months and years ended December 31, 2022 and January 1, 2022.

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Three months ended December 31, 2022

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

42,729

 

 

$

16,955

 

 

$

39,059

 

 

$

(68,417

)

 

$

30,326

 

Interest (income) expense

 

 

(4,643

)

 

 

(3,090

)

 

 

(5,531

)

 

 

37,505

 

 

 

24,241

 

Income tax expense

 

 

478

 

 

 

 

 

 

 

 

 

11,034

 

 

 

11,512

 

Depreciation, depletion and amortization

 

 

26,136

 

 

 

14,227

 

 

 

8,208

 

 

 

893

 

 

 

49,464

 

EBITDA

 

$

64,700

 

 

$

28,092

 

 

$

41,736

 

 

$

(18,985

)

 

$

115,543

 

Accretion

 

 

261

 

 

 

415

 

 

 

(173

)

 

 

 

 

 

503

 

Loss on debt financings

 

 

 

 

 

 

 

 

 

 

 

1,737

 

 

 

1,737

 

Tax receivable agreement benefit

 

 

 

 

 

 

 

 

 

 

 

612

 

 

 

612

 

Loss (gain) on sale of businesses

 

 

 

 

 

1,700

 

 

 

 

 

 

284

 

 

 

1,984

 

Non-cash compensation

 

 

 

 

 

 

 

 

 

 

 

3,289

 

 

 

3,289

 

Other

 

 

(21

)

 

 

47

 

 

 

 

 

 

(4,403

)

 

 

(4,377

)

Adjusted EBITDA

 

$

64,940

 

 

$

30,254

 

 

$

41,563

 

 

$

(17,466

)

 

$

119,291

 

Adjusted EBITDA Margin (1)

 

 

22.5

%

 

 

24.2

%

 

 

42.4

%

 

 

 

 

23.3

%

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Three months ended January 1, 2022

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

38,913

 

 

$

30,393

 

 

$

29,417

 

 

$

(54,333

)

 

$

44,390

 

Interest (income) expense

 

 

(3,635

)

 

 

(2,739

)

 

 

(4,778

)

 

 

30,856

 

 

 

19,704

 

Income tax expense

 

 

337

 

 

 

(95

)

 

 

 

 

 

10,636

 

 

 

10,878

 

Depreciation, depletion and amortization

 

 

23,962

 

 

 

19,880

 

 

 

10,150

 

 

 

976

 

 

 

54,968

 

EBITDA

 

$

59,577

 

 

$

47,439

 

 

$

34,789

 

 

$

(11,865

)

 

$

129,940

 

Accretion

 

 

221

 

 

 

437

 

 

 

89

 

 

 

 

 

 

747

 

Tax receivable agreement benefit

 

 

 

 

 

 

 

 

 

 

 

(6,779

)

 

 

(6,779

)

(Gain) loss on sale of businesses

 

 

53

 

 

 

(4,745

)

 

 

 

 

 

 

 

 

(4,692

)

Non-cash compensation

 

 

 

 

 

 

 

 

 

 

 

4,830

 

 

 

4,830

 

Other

 

 

(13

)

 

 

239

 

 

 

 

 

 

 

 

 

226

 

Adjusted EBITDA

 

$

59,838

 

 

$

43,370

 

 

$

34,878

 

 

$

(13,814

)

 

$

124,272

 

Adjusted EBITDA Margin (1)

 

 

21.2

%

 

 

22.6

%

 

 

44.0

%

 

 

 

 

22.5

%

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Year ended December 31, 2022

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

196,586

 

 

$

118,635

 

 

$

110,017

 

 

$

(149,295

)

 

$

275,943

 

Interest (income) expense

 

 

(17,123

)

 

 

(11,857

)

 

 

(20,463

)

 

 

136,412

 

 

 

86,969

 

Income tax expense (benefit)

 

 

3,025

 

 

 

(106

)

 

 

 

 

 

82,626

 

 

 

85,545

 

Depreciation, depletion and amortization

 

 

96,939

 

 

 

61,697

 

 

 

35,968

 

 

 

3,233

 

 

 

197,837

 

EBITDA

 

$

279,427

 

 

$

168,369

 

 

$

125,522

 

 

$

72,976

 

 

$

646,294

 

Accretion

 

 

953

 

 

 

1,600

 

 

 

60

 

 

 

 

 

 

2,613

 

Loss on debt financings

 

 

 

 

 

 

 

 

 

 

 

1,737

 

 

 

1,737

 

Tax receivable agreement benefit

 

 

 

 

 

 

 

 

 

 

 

1,566

 

 

 

1,566

 

Gain on sale of businesses

 

 

 

 

 

(40,952

)

 

 

 

 

 

(131,437

)

 

 

(172,389

)

Non-cash compensation

 

 

 

 

 

 

 

 

 

 

 

18,347

 

 

 

18,347

 

Other

 

 

177

 

 

 

186

 

 

 

 

 

 

(7,055

)

 

 

(6,692

)

Adjusted EBITDA

 

$

280,557

 

 

$

129,203

 

 

$

125,582

 

 

$

(43,866

)

 

$

491,476

 

Adjusted EBITDA Margin (1)

 

 

22.1

%

 

 

21.8

%

 

 

35.1

%

 

 

 

 

22.1

%

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Year ended January 1, 2022

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

181,253

 

 

$

122,321

 

 

$

95,352

 

 

$

(244,645

)

 

$

154,281

 

Interest (income) expense

 

 

(11,460

)

 

 

(8,872

)

 

 

(17,217

)

 

 

129,789

 

 

 

92,240

 

Income tax expense

 

 

2,697

 

 

 

114

 

 

 

 

 

 

41,545

 

 

 

44,356

 

Depreciation, depletion and amortization

 

 

98,596

 

 

 

84,912

 

 

 

38,685

 

 

 

4,249

 

 

 

226,442

 

EBITDA

 

$

271,086

 

 

$

198,475

 

 

$

116,820

 

 

$

(69,062

)

 

$

517,319

 

Accretion

 

 

874

 

 

 

1,711

 

 

 

339

 

 

 

 

 

 

2,924

 

Loss on debt financings

 

 

 

 

 

 

 

 

 

 

 

6,016

 

 

 

6,016

 

Tax receivable agreement benefit

 

 

 

 

 

 

 

 

 

 

 

(6,779

)

 

 

(6,779

)

Gain on sale of businesses

 

 

(355

)

 

 

(19,656

)

 

 

 

 

 

 

 

 

(20,011

)

Non-cash compensation

 

 

 

 

 

 

 

 

 

 

 

19,705

 

 

 

19,705

 

Other

 

 

(45

)

 

 

953

 

 

 

 

 

 

 

 

 

908

 

Adjusted EBITDA

 

$

271,560

 

 

$

181,483

 

 

$

117,159

 

 

$

(50,120

)

 

$

520,082

 

Adjusted EBITDA Margin (1)

 

 

23.2

%

 

 

23.7

%

 

 

39.3

%

 

 

 

 

23.3

%

________________________________________________

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

The table below reconciles our net income attributable to Summit Materials, Inc. to adjusted diluted net income per share for the three months and years ended December 31, 2022 and January 1, 2022. The per share amount of the net income attributable to Summit Materials, Inc. presented in the table is calculated using the total equity interests for the purpose of reconciling to adjusted diluted net income per share.

 

 

Three months ended

 

Year ended

 

 

December 31, 2022

 

January 1, 2022

 

December 31, 2022

 

January 1, 2022

Reconciliation of Net Income Per Share to Adjusted Diluted EPS

 

Net Income

 

Per Equity

Unit

 

Net Income

 

Per Equity

Unit

 

Net Income

 

Per Equity

Unit

 

Net Income

 

Per Equity

Unit

Net income attributable to Summit Materials, Inc.

 

$

29,835

 

$

0.25

 

$

43,838

 

 

$

0.36

 

 

$

272,145

 

 

$

2.25

 

 

$

152,184

 

 

$

1.25

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interest

 

 

491

 

 

 

 

552

 

 

 

 

 

 

3,798

 

 

 

0.03

 

 

 

2,097

 

 

 

0.02

 

Loss (gain) on sale of businesses, net of tax

 

 

5,601

 

 

0.05

 

 

(3,567

)

 

 

(0.03

)

 

 

(125,374

)

 

 

(1.03

)

 

 

(15,108

)

 

 

(0.12

)

Loss on debt financings

 

 

1,737

 

 

0.01

 

 

 

 

 

 

 

 

1,737

 

 

 

0.01

 

 

 

6,016

 

 

 

0.05

 

Adjusted diluted net income before tax related adjustments

 

 

37,664

 

 

0.31

 

 

40,823

 

 

 

0.33

 

 

 

152,306

 

 

 

1.26

 

 

 

145,189

 

 

 

1.20

 

Tax receivable agreement expense (benefit)

 

 

612

 

 

0.01

 

 

(6,779

)

 

 

(0.05

)

 

 

1,566

 

 

 

0.01

 

 

 

(6,779

)

 

 

(0.06

)

Adjusted diluted net income

 

$

38,276

 

$

0.32

 

$

34,044

 

 

$

0.28

 

 

$

153,872

 

 

$

1.27

 

 

$

138,410

 

 

$

1.14

 

Weighted-average shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Class A common stock

 

 

118,399,588

 

 

 

 

120,603,529

 

 

 

 

 

119,747,056

 

 

 

 

 

119,415,448

 

 

 

LP Units outstanding

 

 

1,312,006

 

 

 

 

1,378,141

 

 

 

 

 

1,313,203

 

 

 

 

 

1,867,853

 

 

 

Total equity units

 

 

119,711,594

 

 

 

 

121,981,670

 

 

 

 

 

121,060,259

 

 

 

 

 

121,283,301

 

 

 

The following table reconciles operating income to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the three months and years ended December 31, 2022 and January 1, 2022.

 

 

Three months ended

 

Year ended

 

 

December 31,

 

January 1,

 

December 31,

 

January 1,

Reconciliation of Operating Income to Adjusted Cash Gross Profit

 

2022

 

2022

 

2022

 

2022

($ in thousands)

 

 

 

 

 

 

 

 

Operating income

 

$

65,044

 

 

$

57,184

 

 

$

269,047

 

 

$

253,065

 

General and administrative expenses

 

 

50,684

 

 

 

50,274

 

 

 

190,218

 

 

 

196,728

 

Depreciation, depletion, amortization and accretion

 

 

49,967

 

 

 

55,715

 

 

 

200,450

 

 

 

229,366

 

Gain on sale of property, plant and equipment

 

 

(4,077

)

 

 

(1,569

)

 

 

(10,370

)

 

 

(5,900

)

Adjusted Cash Gross Profit (exclusive of items shown separately)

 

$

161,618

 

 

$

161,604

 

 

$

649,345

 

 

$

673,259

 

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

 

 

31.6

%

 

 

29.2

%

 

 

29.2

%

 

 

30.2

%

_______________________________________________________

(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 months and years ended December 31, 2022 and January 1, 2022.

 

 

Three months ended

 

Year ended

 

 

December 31,

 

January 1,

 

December 31,

 

January 1,

($ in thousands)

 

2022

 

2022

 

2022

 

2022

Net income

 

$

30,326

 

 

$

44,390

 

 

$

275,943

 

 

$

154,281

 

Non-cash items

 

 

64,719

 

 

 

59,211

 

 

 

117,621

 

 

 

253,976

 

Net income adjusted for non-cash items

 

 

95,045

 

 

 

103,601

 

 

 

393,564

 

 

 

408,257

 

Change in working capital accounts

 

 

56,862

 

 

 

50,955

 

 

 

(109,466

)

 

 

(46,328

)

Net cash provided by operating activities

 

 

151,907

 

 

 

154,556

 

 

 

284,098

 

 

 

361,929

 

Capital expenditures, net of asset sales

 

 

(70,649

)

 

 

(39,065

)

 

 

(251,359

)

 

 

(200,308

)

Free cash flow

 

$

81,258

 

 

$

115,491

 

 

$

32,739

 

 

$

161,621

 

 

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