UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 1, 2018
Summit Materials, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
001-36873 |
47-1984212 |
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(State or Other Jurisdiction |
(Commission |
(I.R.S. Employer |
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of Incorporation) |
File Number) |
Identification No.) |
1550 Wynkoop Street, 3rd Floor
Denver, Colorado 80202
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (303) 893-0012
Not Applicable
(Former Name or Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On August 1, 2018, Summit Materials, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended June 30, 2018. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information being furnished pursuant to this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No. |
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Description |
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99.1 |
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Press Release of Summit Materials, Inc. dated August 1, 2018. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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SUMMIT MATERIALS, INC. |
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By: |
/s/ Anne Lee Benedict |
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Name: |
Anne Lee Benedict |
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Title: |
Chief Legal Officer |
DATED: August 1, 2018
Exhibit 99.1
Summit Materials, Inc. Reports Second Quarter 2018 Results
-Y/Y Net Revenue Growth of 14.8%, Supported By Broad-Based Organic Volume Improvements
-Completed Four Materials-Based Bolt-on Acquisitions For Total Invested Capital of $75 million Since May 2018
-Reduced Midpoint of Adjusted EBITDA Guidance Range For The Full-Year 2018 By 7%
-Remain On Pace To Achieve Record Full-Year Adjusted EBITDA in 2018
DENVER, CO. - (August 1, 2018) - Summit Materials, Inc. (NYSE: SUM, “Summit” or the “Company”), a leading vertically integrated construction materials company, today announced results for the second quarter 2018.
For the three months ended June 30, 2018, the Company reported basic earnings per share of $0.32 on net income attributable to Summit Inc. of $35.5 million, compared to basic earnings per share of $0.46 on net income attributable to Summit Inc. of $50.0 million in the prior year period. On an adjusted basis, Summit reported adjusted diluted earnings per share of $0.32 on adjusted diluted net income of $37.1 million, versus adjusted diluted earnings per share of $0.47 on adjusted diluted net income of $53.6 million in the prior year period.
“While net revenue increased 14.8% on a year-over-basis in the second quarter 2018, supported by organic volume growth in our aggregates and products lines of business, Adjusted EBITDA was flat on a year-over-year basis, given lower contributions from our cement segment and Houston operations, together with inflation in our variable costs,” stated Tom Hill, CEO of Summit Materials. “With a finite number of days remaining in the construction season, we have reduced the midpoint of our 2018 Adjusted EBITDA guidance by 7 percent.”
“Organic sales volumes in our cement segment were impacted by a combination of high precipitation levels during April and May, together with competitive pressures in the markets we serve,” stated Hill. “Our Houston operations were impacted by a slower start to the construction season than had been anticipated. Looking to the second half of the year, we expect a strengthening in both our cement segment and Houston operations, given accelerating demand in our residential, low-rise commercial and public end-markets.”
“The pace of cost inflation in raw materials, freight, labor and fuel exceeded our expectations in the first half of 2018,” continued Hill. “Although we anticipated some measure of cost inflation entering the year, the effective date of our announced price increases lagged behind the impact of higher costs incurred by our business. Importantly, our average selling prices on both materials and products have gained traction entering the third quarter, which we expect will offset these higher variable costs in the second half of the year.”
“Demand conditions in most of our markets are strong and are expected to remain so into 2019 and beyond,” continued Hill. “Within our private markets, we are seeing sustained growth in new single-family home construction, given low inventories and positive demographic trends, while in our public markets, state transportation funding measures in Texas, coupled with steady increases in federal subsidies, are contributing to increased lettings activity. In July 2018, aggregates shipments per day increased 5% versus the prior year period and 13% versus June 2018.”
“Since May 2018, we have completed four materials-based acquisitions for total invested capital of $75 million,” continued Hill. “Recent acquisitions have served to further establish our leadership in well-structured, materials-based markets in Texas, Kansas, Missouri and Virginia. On a year-to-date basis, we have completed eleven acquisitions for total invested capital of $228 million. Across these eleven transactions, we have added more than 300 million tons of aggregates reserves to our portfolio. The acquisition pipeline remains active as we look ahead to the remainder of the year, with multiple transactions currently in various stages of diligence.”
“As of June 30, 2018, our net leverage increased to 4.3x, due to the timing of acquisition-related investments,” stated Brian Harris, CFO of Summit Materials. “By year-end 2018, we anticipate net leverage to be approximately 3.5x, subject to the pace of acquisitions.”
“We continue to generate significant free cash flow from operations that is helping to support the overall growth of our business,” continued Harris. “Based on the midpoint of our revised guidance, we anticipate Adjusted EBITDA less total capital spending will be approximately $250 million in 2018. Importantly, this includes approximately $100 million of discretionary capital spending.”
“Our vertically integrated, multi-local strategy continues to gain momentum in our regional markets, positioning Summit as an emerging leader in the North American heavy materials industry that remains on pace to achieve record full-year Adjusted EBITDA in 2018,” stated Hill.
1
Second Quarter 2018 | Results by Line of Business
Aggregates Business: Aggregates net revenues increased by 23.1% to $103.7 million in the second quarter 2018, when compared to the prior year period. Aggregates adjusted cash gross profit margin declined to 64.8% in the second quarter, versus 68.3% in the prior year period, given higher variable costs. Organic aggregates sales volumes increased 2.3% in the second quarter 2018, when compared to the prior-year period. Excluding contributions from the Company’s project-dependent sand business in Vancouver, organic aggregates sales volumes increased 4.3% in the second quarter 2018. Organic growth in aggregates sales volumes was due mainly to higher volumes in the East Region, which more than offset a decline in sales volumes in the West Region, which was impacted by adverse weather conditions during the period. Organic average selling prices on aggregates increased 3.6% in the second quarter 2018 due to year-over-year improvements in prices within both the West and East segments during the period.
Cement Business: Cement segment net revenues declined 2.8% to $81.8 million in the second quarter 2018, when compared to the prior-year period. Cement adjusted cash gross profit margin declined to 46.5% in the second quarter, versus 57.4% in the prior-year period, due to higher freight, storage and demurrage costs related to weather-affected cement inventories. Organic sales volume of cement declined 4.8% in the second quarter, when compared to the prior year period, due mainly to high levels of precipitation that disrupted project work during the period, together with competitive pressures in the market. Organic average selling prices on cement increased 1.9% in the second quarter, when compared to the prior year period.
Products Business: Net revenues increased 19.3% to $279.9 million in the second quarter 2018, when compared to the prior year period. Products adjusted cash gross profit margin declined to 22.0% in the second quarter, versus 25.6% in the prior year period, as the timing of product price increases lagged behind increases in raw materials and labor costs. Organic sales volumes of ready-mix concrete increased 0.2% in the second quarter, while organic average selling prices increased 2.7%, versus the prior year period. Organic sales volumes of asphalt increased 2.0% in the second quarter, while organic average selling prices declined 1.3%, versus the prior year period.
Second Quarter 2018 | Results By Reporting Segment
Net revenue increased by 14.8% to $549.2 million in the second quarter 2018, versus $478.4 million in the prior year period. The improvement in net revenue was primarily attributable to both organic and acquisition-related contributions in the East and West segments, offset by a decline in the Cement segment. The Company reported operating income of $77.3 million in the second quarter 2018, versus $82.4 million in the prior year period. Adjusted EBITDA was $135.3 million in the second quarter 2018, versus $135.2 million in the prior year period.
West Segment: The West Segment reported operating income of $38.4 million in the second quarter 2018, versus operating income of $42.9 million in the prior year period. Adjusted EBITDA increased to $61.2 million in the second quarter 2018, versus $60.5 million in the prior year period. The year-over-year improvement in West Segment Adjusted EBITDA was attributable to increased average selling prices on aggregates and ready-mix concrete, together with higher organic sales volumes of asphalt, that offset lower organic aggregates sales in the Company’s Houston operations.
East Segment: The East Segment reported operating income of $26.9 million in the second quarter 2018, versus operating income of $21.1 million in the prior year period. Adjusted EBITDA increased to $45.4 million in the second quarter 2018, versus $38.8 million in the prior year period. The year-over-year improvement in East Segment Adjusted EBITDA was mainly attributable to organic volume growth in aggregates and ready-mix concrete, which increased 11.0% and 10.3%, respectively in the period.
Cement Segment: The Cement Segment reported operating income of $25.8 million in the second quarter 2018, versus operating income of $33.7 million in the prior year period. Adjusted EBITDA declined to $34.7 million in the second quarter 2018, versus $43.8 million in the prior year period. Higher organic average selling prices were more than offset primarily by high levels of precipitation in the Company’s Mississippi River markets and price-driven competitive pressures that resulted in a year-over-year decline in organic sales volume during the second quarter 2018.
2
Acquisition Program
As of August 1, 2018, the Company has completed eleven acquisitions on a year-to-date basis, including four transactions that have closed since the Company’s last quarterly update on May 8, 2018. Total investment spend across the eleven acquisitions completed year-to-date 2018 was approximately $228 million, including approximately $75 million for the four bolt-on acquisitions completed since the last update.
Olathe Assets (Kansas). The Olathe Assets comprise two quarries, two asphalt plants and two construction and landfill sites. These assets expand the Company’s existing operations into the southwestern Kansas City metropolitan area. Summit closed on the acquisition of the Olathe Assets in July 2018.
Buckingham Slate (Virginia). Buckingham is an aggregates acquisition that expands the Company’s market position and reserve base in central Virginia. Summit closed on the acquisition of Buckingham Slate in June 2018.
Buildex (Missouri). Buildex is a lightweight aggregates business based in western Missouri that provides a complementary product offering to the Company’s existing portfolio in the region. Summit closed on the acquisition of Buildex in July 2018.
XIT (Texas). XIT is an aggregates company that provides further vertical integration of the Company’s operations in north Texas. Summit closed on its acquisition of XIT in July 2018.
Liquidity and Capital Resources
As of June 30, 2018, the Company had cash on hand of $50.4 million and borrowing capacity under its revolving credit facility of $219.6 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 30, 2018, the Company had $1.8 billion in debt outstanding.
Financial Outlook
For the full-year 2018, the Company has reduced its Adjusted EBITDA guidance from a range of $495 million to $515 million to a range of $460 million to $480 million, including acquisition-related contributions from four transactions that closed since the Company’s last update in May 2018. No additional potential acquisitions are included within the Company’s full-year 2018 Adjusted EBITDA guidance. For the full-year 2018, the Company has reiterated its capital expenditure guidance in the range of $210 million to $225 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 2018 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, 2018:
Domestic Replay: 1-844-512-2921
International Replay: 1-412-317-6671
Conference ID: 13681575
3
About Summit Materials
Summit Materials is a leading vertically integrated materials-based company that supplies aggregates, cement, ready-mix concrete and asphalt in the United States and British Columbia, Canada. Summit is a geographically diverse, materials-based business of scale that offers customers a single-source provider of construction materials and related downstream products in the public infrastructure, residential and nonresidential, and end markets. Summit has a strong track record of successful acquisitions since its founding and continues to pursue growth opportunities in new and existing markets. For more information about Summit Materials, please visit www.summit-materials.com.
Non-GAAP Financial Measures
The Securities and Exchange Commission (“SEC”) regulates the use of “non-GAAP financial measures,” such as Adjusted Net Income (Loss), Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow and Net Leverage which are derived on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). We have provided these measures because, among other things, we believe that they provide investors with additional information to measure our performance, evaluate our ability to service our debt and evaluate certain flexibility under our restrictive covenants. Our Adjusted Net Income (Loss), Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA Margin , Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow and Net Leverage 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. This press release also includes certain unaudited financial information for the last twelve months (“LTM”) ended June 30, 2018, which is calculated as the six months ended June 30, 2018 plus the actual for the year-ended December 30, 2017 less the actual six months ended June 30, 2017. This presentation is not in accordance with GAAP. However, we believe that this information is useful to investors as we use LTM financial information to evaluate our financial performance for ongoing planning purposes, including a continuous assessment of our financial performance in comparison to budgets and internal projections. In addition, we use such LTM financial information to test compliance with covenants under our senior secured credit facilities.
Adjusted EBITDA, Adjusted EBITDA Margin, LTM financial information and other non-GAAP measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of the limitations of Adjusted EBITDA are that these measures do not reflect: (i) our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) changes in, or cash requirements for, our working capital needs; (iii) interest expense or cash requirements necessary to service interest and principal payments on our debt; and (iv) income tax payments we are required to make. Because of these limitations, we rely primarily on our U.S. GAAP results and use Adjusted EBITDA, Adjusted EBITDA Margin and other non-GAAP measures on a supplemental basis.
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Adjusted Net Income (Loss), Adjusted EPS, Free Cash Flow and Net Leverage 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
4
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 30, 2017 (the “Annual Report”), 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 quarterly reports on Form 10-Q or other SEC filings and the following:
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our dependence on the construction industry and the strength of the local economies in which we operate; |
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the cyclical nature of our business; |
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risks related to weather and seasonality; |
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risks associated with our capital-intensive business; |
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competition within our local markets; |
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our ability to execute on our acquisition strategy, successfully integrate acquisitions with our existing operations and retain key employees of acquired businesses; |
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our dependence on securing and permitting aggregate reserves in strategically located areas; |
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declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities and other state agencies; |
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environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use; |
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conditions in the credit markets; |
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our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us; |
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material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications; |
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cancellation of a significant number of contracts or our disqualification from bidding for new contracts; |
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special hazards related to our operations that may cause personal injury or property damage not covered by insurance; |
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our substantial current level of indebtedness; |
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our dependence on senior management and other key personnel; |
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supply constraints or significant price fluctuations in electricity and the petroleum-based resources that we use; |
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unexpected operational difficulties; |
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interruptions in our information technology systems and infrastructure; |
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potential labor disputes; and |
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rising prices for commodities, labor and other production and delivery costs as a result of inflation or otherwise. |
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.
5
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
($ in thousands, except share and per share amounts)
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Three months ended |
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Six months ended |
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June 30, |
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July 1, |
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June 30, |
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July 1, |
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2018 |
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2017 |
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2018 |
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2017 |
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Revenue: |
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Product |
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$ |
459,967 |
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$ |
397,726 |
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$ |
716,774 |
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$ |
622,743 |
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Service |
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89,268 |
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80,642 |
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122,377 |
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114,669 |
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Net revenue |
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549,235 |
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478,368 |
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839,151 |
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737,412 |
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Delivery and subcontract revenue |
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51,655 |
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45,725 |
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76,160 |
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70,958 |
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Total revenue |
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600,890 |
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524,093 |
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915,311 |
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808,370 |
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Cost of revenue (excluding items shown separately below): |
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Product |
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295,147 |
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233,592 |
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492,580 |
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400,560 |
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Service |
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64,130 |
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56,587 |
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90,053 |
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81,958 |
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Net cost of revenue |
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359,277 |
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290,179 |
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582,633 |
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482,518 |
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Delivery and subcontract cost |
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51,655 |
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45,725 |
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76,160 |
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70,958 |
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Total cost of revenue |
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410,932 |
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335,904 |
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658,793 |
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553,476 |
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General and administrative expenses |
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61,657 |
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58,086 |
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131,518 |
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116,554 |
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Depreciation, depletion, amortization and accretion |
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49,731 |
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45,039 |
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96,689 |
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84,787 |
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Transaction costs |
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1,291 |
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2,620 |
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2,557 |
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3,893 |
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Operating income |
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77,279 |
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82,444 |
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25,754 |
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49,660 |
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Interest expense |
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28,943 |
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25,986 |
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57,727 |
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50,955 |
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Loss on debt financings |
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149 |
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— |
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149 |
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190 |
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Tax receivable agreement expense |
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— |
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1,525 |
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— |
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1,525 |
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Other income, net |
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(916) |
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(590) |
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(8,571) |
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(1,247) |
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Income (loss) from operations before taxes |
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49,103 |
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55,523 |
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(23,551) |
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(1,763) |
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Income tax expense (benefit) |
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12,190 |
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3,435 |
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(4,516) |
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|
1,257 |
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Net income (loss) |
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36,913 |
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52,088 |
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(19,035) |
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(3,020) |
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Net income (loss) attributable to noncontrolling interest in subsidiaries |
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— |
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12 |
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— |
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(86) |
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Net income (loss) attributable to Summit Holdings (1) |
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1,404 |
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2,076 |
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(815) |
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(490) |
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Net income (loss) attributable to Summit Inc. |
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$ |
35,509 |
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$ |
50,000 |
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$ |
(18,220) |
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$ |
(2,444) |
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Income (loss) per share of Class A common stock: |
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Basic |
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$ |
0.32 |
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$ |
0.46 |
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$ |
(0.16) |
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$ |
(0.02) |
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Diluted |
|
$ |
0.32 |
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$ |
0.46 |
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$ |
(0.16) |
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$ |
(0.02) |
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Weighted average shares of Class A common stock: |
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Basic |
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111,564,190 |
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108,419,568 |
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|
111,111,644 |
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107,556,143 |
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Diluted |
|
|
112,583,321 |
|
|
109,429,944 |
|
|
111,111,644 |
|
|
107,556,143 |
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(1) |
Represents portion of business owned by pre-IPO investors rather than by Summit. |
6
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
($ in thousands, except share and per share amounts)
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|
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June 30, |
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December 30, |
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||
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2018 |
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2017 |
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(unaudited) |
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(audited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
50,404 |
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$ |
383,556 |
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Accounts receivable, net |
|
|
268,819 |
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|
198,330 |
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Costs and estimated earnings in excess of billings |
|
|
44,481 |
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|
9,512 |
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Inventories |
|
|
245,238 |
|
|
184,439 |
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Other current assets |
|
|
12,381 |
|
|
7,764 |
|
|
Total current assets |
|
|
621,323 |
|
|
783,601 |
|
|
Property, plant and equipment, less accumulated depreciation, depletion and amortization (June 30, 2018 - $711,216 and December 30, 2017 - $631,841) |
|
|
1,733,653 |
|
|
1,615,424 |
|
|
Goodwill |
|
|
1,114,967 |
|
|
1,036,320 |
|
|
Intangible assets, less accumulated amortization (June 30, 2018 - $7,337 and December 30, 2017 - $6,698) |
|
|
16,294 |
|
|
16,833 |
|
|
Deferred tax assets, less valuation allowance (June 30, 2018 and December 30, 2017 - $1,675) |
|
|
287,606 |
|
|
284,092 |
|
|
Other assets |
|
|
50,413 |
|
|
51,063 |
|
|
Total assets |
|
$ |
3,824,256 |
|
$ |
3,787,333 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current portion of debt |
|
$ |
6,354 |
|
$ |
4,765 |
|
|
Current portion of acquisition-related liabilities |
|
|
15,634 |
|
|
14,087 |
|
|
Accounts payable |
|
|
144,284 |
|
|
98,744 |
|
|
Accrued expenses |
|
|
118,494 |
|
|
116,629 |
|
|
Billings in excess of costs and estimated earnings |
|
|
14,724 |
|
|
15,750 |
|
|
Total current liabilities |
|
|
299,490 |
|
|
249,975 |
|
|
Long-term debt |
|
|
1,807,290 |
|
|
1,810,833 |
|
|
Acquisition-related liabilities |
|
|
28,904 |
|
|
58,135 |
|
|
Tax receivable agreement liability |
|
|
333,028 |
|
|
331,340 |
|
|
Other noncurrent liabilities |
|
|
77,773 |
|
|
65,329 |
|
|
Total liabilities |
|
|
2,546,485 |
|
|
2,515,612 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 111,629,238 and 110,350,594 shares issued and outstanding as of June 30, 2018 and December 30, 2017, respectively |
|
|
1,117 |
|
|
1,104 |
|
|
Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 and 100 shares issued and outstanding as of June 30, 2018 and December 30, 2017, respectively |
|
|
— |
|
|
— |
|
|
Additional paid-in capital |
|
|
1,183,071 |
|
|
1,154,220 |
|
|
Accumulated earnings |
|
|
77,613 |
|
|
95,833 |
|
|
Accumulated other comprehensive income |
|
|
4,645 |
|
|
7,386 |
|
|
Stockholders’ equity |
|
|
1,266,446 |
|
|
1,258,543 |
|
|
Noncontrolling interest in Summit Holdings |
|
|
11,325 |
|
|
13,178 |
|
|
Total stockholders’ equity |
|
|
1,277,771 |
|
|
1,271,721 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
3,824,256 |
|
$ |
3,787,333 |
|
7
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in thousands)
|
|
|
Six months ended |
||||
|
|
|
June 30, |
|
July 1, |
||
|
|
|
2018 |
|
2017 |
||
|
Cash flow from operating activities: |
|
|
|
|
|
|
|
Net loss |
|
$ |
(19,035) |
|
$ |
(3,020) |
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion |
|
|
98,562 |
|
|
90,781 |
|
Share-based compensation expense |
|
|
14,190 |
|
|
9,424 |
|
Net gain on asset disposals |
|
|
(7,508) |
|
|
(4,052) |
|
Non-cash loss on debt financings |
|
|
— |
|
|
85 |
|
Change in deferred tax asset, net |
|
|
(6,934) |
|
|
391 |
|
Other |
|
|
162 |
|
|
710 |
|
(Increase) decrease in operating assets, net of acquisitions: |
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(57,763) |
|
|
(68,539) |
|
Inventories |
|
|
(44,428) |
|
|
(19,272) |
|
Costs and estimated earnings in excess of billings |
|
|
(34,525) |
|
|
(21,571) |
|
Other current assets |
|
|
(1,766) |
|
|
3,535 |
|
Other assets |
|
|
780 |
|
|
(1,565) |
|
Increase (decrease) in operating liabilities, net of acquisitions: |
|
|
|
|
|
|
|
Accounts payable |
|
|
23,912 |
|
|
28,550 |
|
Accrued expenses |
|
|
1,674 |
|
|
(6,789) |
|
Billings in excess of costs and estimated earnings |
|
|
(2,187) |
|
|
1,252 |
|
Tax receivable agreement liability |
|
|
1,688 |
|
|
1,525 |
|
Other liabilities |
|
|
(540) |
|
|
(296) |
|
Net cash (used in) provided by operating activities |
|
|
(33,718) |
|
|
11,149 |
|
Cash flow from investing activities: |
|
|
|
|
|
|
|
Acquisitions, net of cash acquired |
|
|
(153,196) |
|
|
(213,124) |
|
Purchases of property, plant and equipment |
|
|
(131,657) |
|
|
(109,088) |
|
Proceeds from the sale of property, plant and equipment |
|
|
14,110 |
|
|
8,411 |
|
Other |
|
|
684 |
|
|
137 |
|
Net cash used for investing activities |
|
|
(270,059) |
|
|
(313,664) |
|
Cash flow from financing activities: |
|
|
|
|
|
|
|
Proceeds from equity offerings |
|
|
— |
|
|
237,600 |
|
Capital issuance costs |
|
|
— |
|
|
(627) |
|
Proceeds from debt issuances |
|
|
— |
|
|
302,000 |
|
Debt issuance costs |
|
|
(550) |
|
|
(5,308) |
|
Payments on debt |
|
|
(10,772) |
|
|
(9,288) |
|
Payments on acquisition-related liabilities |
|
|
(31,224) |
|
|
(17,204) |
|
Distributions from partnership |
|
|
(69) |
|
|
(79) |
|
Proceeds from stock option exercises |
|
|
15,615 |
|
|
5,736 |
|
Other |
|
|
(1,904) |
|
|
(832) |
|
Net cash (used in) provided by financing activities |
|
|
(28,904) |
|
|
511,998 |
|
Impact of foreign currency on cash |
|
|
(471) |
|
|
188 |
|
Net (decrease) increase in cash |
|
|
(333,152) |
|
|
209,671 |
|
Cash and cash equivalents—beginning of period |
|
|
383,556 |
|
|
143,392 |
|
Cash and cash equivalents—end of period |
|
$ |
50,404 |
|
$ |
353,063 |
8
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Revenue Data by Segment and Line of Business
($ in thousands)
|
|
|
Three months ended |
|
Six months ended |
|
Twelve Months Ended |
|
||||||||||||
|
|
|
June 30, |
|
July 1, |
|
June 30, |
|
July 1, |
|
June 30, |
|
July 1, |
|
||||||
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Net Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West |
|
$ |
293,685 |
|
$ |
249,849 |
|
$ |
462,629 |
|
$ |
381,823 |
|
$ |
980,798 |
|
$ |
795,575 |
|
|
East |
|
|
173,709 |
|
|
144,290 |
|
|
257,130 |
|
|
227,525 |
|
|
578,209 |
|
|
513,890 |
|
|
Cement |
|
|
81,841 |
|
|
84,229 |
|
|
119,392 |
|
|
128,064 |
|
|
295,141 |
|
|
295,546 |
|
|
Net Revenue |
|
$ |
549,235 |
|
$ |
478,368 |
|
$ |
839,151 |
|
$ |
737,412 |
|
$ |
1,854,148 |
|
$ |
1,605,011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Line of Business - Net Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates |
|
$ |
103,690 |
|
$ |
84,221 |
|
$ |
171,140 |
|
$ |
145,843 |
|
$ |
338,680 |
|
$ |
287,509 |
|
|
Cement (1) |
|
|
76,413 |
|
|
78,893 |
|
|
109,530 |
|
|
118,328 |
|
|
273,243 |
|
|
270,173 |
|
|
Products |
|
|
279,864 |
|
|
234,612 |
|
|
436,104 |
|
|
358,572 |
|
|
932,044 |
|
|
766,626 |
|
|
Total Materials and Products |
|
|
459,967 |
|
|
397,726 |
|
|
716,774 |
|
|
622,743 |
|
|
1,543,967 |
|
|
1,324,308 |
|
|
Services |
|
|
89,268 |
|
|
80,642 |
|
|
122,377 |
|
|
114,669 |
|
|
310,181 |
|
|
280,703 |
|
|
Net Revenue |
|
$ |
549,235 |
|
$ |
478,368 |
|
$ |
839,151 |
|
$ |
737,412 |
|
$ |
1,854,148 |
|
$ |
1,605,011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Line of Business - Net Cost of Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates |
|
$ |
36,472 |
|
$ |
26,740 |
|
$ |
75,954 |
|
$ |
61,522 |
|
$ |
123,161 |
|
$ |
106,724 |
|
|
Cement |
|
|
38,359 |
|
|
30,511 |
|
|
64,147 |
|
|
63,684 |
|
|
139,521 |
|
|
134,290 |
|
|
Products |
|
|
218,315 |
|
|
174,622 |
|
|
349,452 |
|
|
272,363 |
|
|
721,099 |
|
|
568,668 |
|
|
Total Materials and Products |
|
|
293,146 |
|
|
231,873 |
|
|
489,553 |
|
|
397,569 |
|
|
983,781 |
|
|
809,682 |
|
|
Services |
|
|
66,131 |
|
|
58,306 |
|
|
93,080 |
|
|
84,949 |
|
|
217,945 |
|
|
197,889 |
|
|
Net Cost of Revenue |
|
$ |
359,277 |
|
$ |
290,179 |
|
$ |
582,633 |
|
$ |
482,518 |
|
$ |
1,201,726 |
|
$ |
1,007,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Line of Business - Adjusted Cash Gross Profit (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates |
|
$ |
67,218 |
|
$ |
57,481 |
|
$ |
95,186 |
|
$ |
84,321 |
|
$ |
215,519 |
|
$ |
180,785 |
|
|
Cement (3) |
|
|
38,054 |
|
|
48,382 |
|
|
45,383 |
|
|
54,644 |
|
|
133,722 |
|
|
135,883 |
|
|
Products |
|
|
61,549 |
|
|
59,990 |
|
|
86,652 |
|
|
86,209 |
|
|
210,945 |
|
|
197,958 |
|
|
Total Materials and Products |
|
|
166,821 |
|
|
165,853 |
|
|
227,221 |
|
|
225,174 |
|
|
560,186 |
|
|
514,626 |
|
|
Services |
|
|
23,137 |
|
|
22,336 |
|
|
29,297 |
|
|
29,720 |
|
|
92,236 |
|
|
82,814 |
|
|
Adjusted Cash Gross Profit |
|
$ |
189,958 |
|
$ |
188,189 |
|
$ |
256,518 |
|
$ |
254,894 |
|
$ |
652,422 |
|
$ |
597,440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Cash Gross Profit Margin (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregates |
|
|
64.8 |
% |
|
68.3 |
% |
|
55.6 |
% |
|
57.8 |
% |
|
63.6 |
% |
|
62.9 |
% |
|
Cement (3) |
|
|
46.5 |
% |
|
57.4 |
% |
|
38.0 |
% |
|
42.7 |
% |
|
45.3 |
% |
|
46.0 |
% |
|
Products |
|
|
22.0 |
% |
|
25.6 |
% |
|
19.9 |
% |
|
24.0 |
% |
|
22.6 |
% |
|
25.8 |
% |
|
Services |
|
|
25.9 |
% |
|
27.7 |
% |
|
23.9 |
% |
|
25.9 |
% |
|
29.7 |
% |
|
29.5 |
% |
|
Total Adjusted Cash Gross Profit Margin |
|
|
34.6 |
% |
|
39.3 |
% |
|
30.6 |
% |
|
34.6 |
% |
|
35.2 |
% |
|
37.2 |
% |
|
(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) |
Previously, we presented gross profit as a non- GAAP metric. We have renamed that metric adjusted cash gross profit to be more descriptive of the calculation. Adjusted cash gross profit calculated as net revenue by line of business less net cost of revenue by line of business. Adjusted cash gross profit margin is defined as adjusted cash gross profit divided by net revenue. |
|
(3) |
The cement adjusted cash gross profit includes the earnings from the waste processing operations, cement swaps and other products. Cement line of business adjusted cash gross profit margin is defined as cement adjusted cash gross profit divided by cement segment net revenue. |
9
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Volume and Price Statistics
(Units in thousands)
|
|
|
Three months ended |
|
Six months ended |
|
||||||||
|
Total Volume |
|
June 30, 2018 |
|
July 1, 2017 |
|
June 30, 2018 |
|
July 1, 2017 |
|
||||
|
Aggregates (tons) |
|
|
13,151 |
|
|
11,286 |
|
|
21,966 |
|
|
19,249 |
|
|
Cement (tons) |
|
|
680 |
|
|
714 |
|
|
974 |
|
|
1,075 |
|
|
Ready-mix concrete (cubic yards) |
|
|
1,503 |
|
|
1,237 |
|
|
2,645 |
|
|
2,143 |
|
|
Asphalt (tons) |
|
|
1,611 |
|
|
1,517 |
|
|
1,961 |
|
|
1,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
||||||||
|
Pricing |
|
June 30, 2018 |
|
July 1, 2017 |
|
June 30, 2018 |
|
July 1, 2017 |
|
||||
|
Aggregates (per ton) |
|
$ |
10.21 |
|
$ |
9.97 |
|
$ |
10.07 |
|
$ |
9.92 |
|
|
Cement (per ton) |
|
|
114.21 |
|
|
112.09 |
|
|
114.46 |
|
|
111.89 |
|
|
Ready-mix concrete (per cubic yards) |
|
|
107.09 |
|
|
104.23 |
|
|
107.09 |
|
|
103.73 |
|
|
Asphalt (per ton) |
|
|
54.70 |
|
|
54.94 |
|
|
54.23 |
|
|
54.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year over Year Comparison |
|
Volume |
|
Pricing |
|
Volume |
|
Pricing |
|
||||
|
Aggregates (per ton) |
|
|
16.5 |
% |
|
2.4 |
% |
|
14.1 |
% |
|
1.5 |
% |
|
Cement (per ton) |
|
|
(4.8) |
% |
|
1.9 |
% |
|
(9.4) |
% |
|
2.3 |
% |
|
Ready-mix concrete (per cubic yards) |
|
|
21.5 |
% |
|
2.7 |
% |
|
23.4 |
% |
|
3.2 |
% |
|
Asphalt (per ton) |
|
|
6.2 |
% |
|
(0.4) |
% |
|
4.3 |
% |
|
(1.0) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year over Year Comparison (Excluding acquisitions) |
|
Volume |
|
Pricing |
|
Volume |
|
Pricing |
|
||||
|
Aggregates (per ton) |
|
|
2.3 |
% |
|
3.6 |
% |
|
(1.5) |
% |
|
2.8 |
% |
|
Cement (per ton) |
|
|
(4.8) |
% |
|
1.9 |
% |
|
(9.4) |
% |
|
2.3 |
% |
|
Ready-mix concrete (per cubic yards) |
|
|
0.2 |
% |
|
2.7 |
% |
|
1.3 |
% |
|
3.4 |
% |
|
Asphalt (per ton) |
|
|
2.0 |
% |
|
(1.3) |
% |
|
(2.7) |
% |
|
(1.7) |
% |
10
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 30, 2018 |
||||||||||||
|
|
|
|
|
|
|
|
Gross Revenue |
|
Intercompany |
|
Net |
|||
|
|
|
Volumes |
|
Pricing |
|
by Product |
|
Elimination/Delivery |
|
Revenue |
||||
|
Aggregates |
|
13,151 |
|
$ |
10.21 |
|
$ |
134,213 |
|
$ |
(30,523) |
|
$ |
103,690 |
|
Cement |
|
680 |
|
|
114.21 |
|
|
77,714 |
|
|
(1,301) |
|
|
76,413 |
|
Materials |
|
|
|
|
|
|
$ |
211,927 |
|
$ |
(31,824) |
|
$ |
180,103 |
|
Ready-mix concrete |
|
1,503 |
|
|
107.09 |
|
|
160,930 |
|
|
(322) |
|
|
160,608 |
|
Asphalt |
|
1,611 |
|
|
54.70 |
|
|
88,120 |
|
|
(185) |
|
|
87,935 |
|
Other Products |
|
|
|
|
|
|
|
108,164 |
|
|
(76,843) |
|
|
31,321 |
|
Products |
|
|
|
|
|
|
$ |
357,214 |
|
$ |
(77,350) |
|
$ |
279,864 |
|
|
|
Six months ended June 30, 2018 |
||||||||||||
|
|
|
|
|
|
|
|
Gross Revenue |
|
Intercompany |
|
Net |
|||
|
|
|
Volumes |
|
Pricing |
|
by Product |
|
Elimination/Delivery |
|
Revenue |
||||
|
Aggregates |
|
21,966 |
|
$ |
10.07 |
|
$ |
221,092 |
|
$ |
(49,952) |
|
$ |
171,140 |
|
Cement |
|
974 |
|
|
114.46 |
|
|
111,480 |
|
|
(1,950) |
|
|
109,530 |
|
Materials |
|
|
|
|
|
|
$ |
332,572 |
|
$ |
(51,902) |
|
$ |
280,670 |
|
Ready-mix concrete |
|
2,645 |
|
|
107.09 |
|
|
283,238 |
|
|
(614) |
|
|
282,624 |
|
Asphalt |
|
1,961 |
|
|
54.23 |
|
|
106,340 |
|
|
(264) |
|
|
106,076 |
|
Other Products |
|
|
|
|
|
|
|
170,659 |
|
|
(123,255) |
|
|
47,404 |
|
Products |
|
|
|
|
|
|
$ |
560,237 |
|
$ |
(124,133) |
|
$ |
436,104 |
11
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Reconciliations of Non-GAAP Financial Measures
($ in thousands, except share and per share amounts)
The tables below reconcile our net income (loss) to Adjusted EBITDA by segment for the three and six months ended June 30, 2018 and July 1, 2017.
|
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 |
|
$ |
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 |
|
Three months ended July 1, 2017 |
|||||||||||||
|
by Segment |
|
West |
|
East |
|
Cement |
|
Corporate |
|
Consolidated |
|||||
|
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
40,529 |
|
$ |
20,600 |
|
$ |
34,442 |
|
$ |
(43,483) |
|
$ |
52,088 |
|
Interest expense (income) |
|
|
1,843 |
|
|
929 |
|
|
(684) |
|
|
23,898 |
|
|
25,986 |
|
Income tax expense (benefit) |
|
|
533 |
|
|
(21) |
|
|
— |
|
|
2,923 |
|
|
3,435 |
|
Depreciation, depletion and amortization |
|
|
17,224 |
|
|
16,740 |
|
|
9,961 |
|
|
662 |
|
|
44,587 |
|
EBITDA |
|
$ |
60,129 |
|
$ |
38,248 |
|
$ |
43,719 |
|
$ |
(16,000) |
|
$ |
126,096 |
|
Accretion |
|
|
195 |
|
|
193 |
|
|
64 |
|
|
— |
|
|
452 |
|
Loss on debt financings |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Tax receivable agreement expense |
|
|
— |
|
|
— |
|
|
— |
|
|
1,525 |
|
|
1,525 |
|
Transaction costs |
|
|
(28) |
|
|
— |
|
|
— |
|
|
2,648 |
|
|
2,620 |
|
Non-cash compensation |
|
|
— |
|
|
— |
|
|
— |
|
|
4,676 |
|
|
4,676 |
|
Other |
|
|
224 |
|
|
325 |
|
|
— |
|
|
(683) |
|
|
(134) |
|
Adjusted EBITDA |
|
$ |
60,520 |
|
$ |
38,766 |
|
$ |
43,783 |
|
$ |
(7,834) |
|
$ |
135,235 |
|
Adjusted EBITDA Margin (1) |
|
|
24.2% |
|
|
26.9% |
|
|
52.0% |
|
|
|
|
|
28.3% |
12
|
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% |
|
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
|
Six months ended July 1, 2017 |
|||||||||||||
|
by Segment |
|
West |
|
East |
|
Cement |
|
Corporate |
|
Consolidated |
|||||
|
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
38,503 |
|
$ |
8,507 |
|
$ |
29,729 |
|
$ |
(79,759) |
|
$ |
(3,020) |
|
Interest expense (income) |
|
|
3,747 |
|
|
1,614 |
|
|
(1,334) |
|
|
46,928 |
|
|
50,955 |
|
Income tax expense (benefit) |
|
|
535 |
|
|
(21) |
|
|
— |
|
|
743 |
|
|
1,257 |
|
Depreciation, depletion and amortization |
|
|
32,692 |
|
|
31,927 |
|
|
17,951 |
|
|
1,321 |
|
|
83,891 |
|
EBITDA |
|
$ |
75,477 |
|
$ |
42,027 |
|
$ |
46,346 |
|
$ |
(30,767) |
|
$ |
133,083 |
|
Accretion |
|
|
390 |
|
|
384 |
|
|
122 |
|
|
— |
|
|
896 |
|
Loss on debt financings |
|
|
— |
|
|
— |
|
|
— |
|
|
190 |
|
|
190 |
|
Tax receivable agreement expense |
|
|
— |
|
|
— |
|
|
— |
|
|
1,525 |
|
|
1,525 |
|
Transaction costs |
|
|
9 |
|
|
— |
|
|
— |
|
|
3,884 |
|
|
3,893 |
|
Non-cash compensation |
|
|
— |
|
|
— |
|
|
— |
|
|
9,424 |
|
|
9,424 |
|
Other |
|
|
343 |
|
|
703 |
|
|
— |
|
|
(1,192) |
|
|
(146) |
|
Adjusted EBITDA |
|
$ |
76,219 |
|
$ |
43,114 |
|
$ |
46,468 |
|
$ |
(16,936) |
|
$ |
148,865 |
|
Adjusted EBITDA Margin (1) |
|
|
20.0% |
|
|
18.9% |
|
|
36.3% |
|
|
|
|
|
20.2% |
|
(1) |
Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of net revenue. |
|
(2) |
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 as other income. |
13
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 30, 2018 and July 1, 2017. 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 30, 2018 |
|
July 1, 2017 |
|
June 30, 2018 |
|
July 1, 2017 |
||||||||||||||||
|
Reconciliation of Net Income (Loss) Per Share to Adjusted Diluted EPS |
|
Net Income |
|
Per Equity Unit |
|
Net Income |
|
Per Equity Unit |
|
Net Loss |
|
Per Equity Unit |
|
Net Loss |
|
Per Equity Unit |
||||||||
|
Net income (loss) attributable to Summit Materials, Inc. |
|
$ |
35,509 |
|
$ |
0.31 |
|
$ |
50,000 |
|
$ |
0.44 |
|
$ |
(18,220) |
|
$ |
(0.16) |
|
$ |
(2,444) |
|
$ |
(0.02) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interest |
|
|
1,404 |
|
|
0.01 |
|
|
2,076 |
|
|
0.02 |
|
|
(815) |
|
|
(0.01) |
|
|
(490) |
|
|
— |
|
Adjustment to acquisition deferred liability |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(6,947) |
|
|
(0.06) |
|
|
— |
|
|
— |
|
Loss on debt financings |
|
|
149 |
|
|
— |
|
|
— |
|
|
— |
|
|
149 |
|
|
— |
|
|
190 |
|
|
— |
|
Adjusted diluted net income (loss) before tax related adjustments |
|
|
37,062 |
|
|
0.32 |
|
|
52,076 |
|
|
0.46 |
|
|
(25,833) |
|
|
(0.23) |
|
|
(2,744) |
|
|
(0.02) |
|
Tax receivable agreement expense |
|
|
— |
|
|
— |
|
|
1,525 |
|
|
0.01 |
|
|
— |
|
|
— |
|
|
1,525 |
|
|
0.01 |
|
Adjusted diluted net income (loss) |
|
$ |
37,062 |
|
$ |
0.32 |
|
$ |
53,601 |
|
$ |
0.47 |
|
$ |
(25,833) |
|
$ |
(0.23) |
|
$ |
(1,219) |
|
$ |
(0.01) |
|
Weighted-average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Class A common stock |
|
|
111,564,190 |
|
|
|
|
|
108,419,568 |
|
|
|
|
|
111,111,644 |
|
|
|
|
|
107,556,143 |
|
|
|
|
LP Units outstanding |
|
|
3,517,602 |
|
|
|
|
|
4,574,104 |
|
|
|
|
|
3,583,407 |
|
|
|
|
|
4,821,955 |
|
|
|
|
Total equity units |
|
|
115,081,792 |
|
|
|
|
|
112,993,672 |
|
|
|
|
|
114,695,051 |
|
|
|
|
|
112,378,098 |
|
|
|
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 30, 2018 and July 1, 2017.
|
|
|
Three months ended |
|
|
Six months ended |
|
||||||||
|
|
|
June 30, |
|
July 1, |
|
|
June 30, |
|
July 1, |
|
||||
|
Reconciliation of Operating Income to Adjusted Cash Gross Profit |
|
2018 |
|
2017 |
|
|
2018 |
|
2017 |
|
||||
|
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
77,279 |
|
$ |
82,444 |
|
|
$ |
25,754 |
|
$ |
49,660 |
|
|
General and administrative expenses |
|
|
61,657 |
|
|
58,086 |
|
|
|
131,518 |
|
|
116,554 |
|
|
Depreciation, depletion, amortization and accretion |
|
|
49,731 |
|
|
45,039 |
|
|
|
96,689 |
|
|
84,787 |
|
|
Transaction costs |
|
|
1,291 |
|
|
2,620 |
|
|
|
2,557 |
|
|
3,893 |
|
|
Adjusted Cash Gross Profit (exclusive of items shown separately) |
|
$ |
189,958 |
|
$ |
188,189 |
|
|
$ |
256,518 |
|
$ |
254,894 |
|
|
Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1) |
|
|
34.6 |
% |
|
39.3 |
% |
|
|
30.6 |
% |
|
34.6 |
% |
|
(1) |
Adjusted Cash Gross Profit Margin is defined as Adjusted Cash Gross Profit as a percentage of net revenue. |
14
The following table reconciles net cash provided by (used in) operating activities to free cash flow for the three and six months ended June 30, 2018 and July 1, 2017.
|
|
|
Three months ended |
|
Six months ended |
||||||||
|
|
|
June 30, |
|
July 1, |
|
June 30, |
|
July 1, |
||||
|
($ in thousands) |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
||||
|
Net income (loss) |
|
$ |
36,913 |
|
$ |
52,088 |
|
$ |
(19,035) |
|
$ |
(3,020) |
|
Non-cash items |
|
|
64,277 |
|
|
52,382 |
|
|
98,472 |
|
|
97,339 |
|
Net income adjusted for non-cash items |
|
|
101,190 |
|
|
104,470 |
|
|
79,437 |
|
|
94,319 |
|
Change in working capital accounts |
|
|
(83,541) |
|
|
(47,782) |
|
|
(113,155) |
|
|
(83,170) |
|
Net cash provided by (used in) operating activities |
|
|
17,649 |
|
|
56,688 |
|
|
(33,718) |
|
|
11,149 |
|
Capital expenditures, net of asset sales |
|
|
(75,830) |
|
|
(53,946) |
|
|
(117,547) |
|
|
(100,677) |
|
Free cash flow |
|
$ |
(58,181) |
|
$ |
2,742 |
|
$ |
(151,265) |
|
$ |
(89,528) |
Contact:
Mr. Noel Ryan
Vice President, Investor Relations
Summit Materials, Inc.
noel.ryan@summit-materials.com
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