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8-K - 8-K - Summit Materials, Inc.d26703d8k.htm

Exhibit 99.1

 

LOGO

Summit Materials Announces Second Quarter 2015 Results

Denver, Colorado (August 3, 2015) — Summit Materials, Inc. (NYSE: SUM, “Summit” or the “Company”), a leading vertically integrated construction materials company, today announced results for the second quarter ended June 27, 2015.

Second Quarter 2015 Highlights Compared to Second Quarter 2014:

 

    Net revenue increased 12.5% to $329.0 million.

 

    Net income approximately break even, compared to $14.2 million

 

    Further Adjusted EBITDA grew 28.4% to $78.1 million.

 

    Operating income improved 24.7% to $42.3 million.

 

    Gross profit increased 25.1% to $115.8 million.

 

    Aggregates, cement, ready-mixed concrete and asphalt volumes grew 33.1%, 0.7%, 17.5% and 7.0%, respectively.

 

    Aggregates, cement, ready-mixed concrete and asphalt organic price improved 5.1%, 9.1%, 4.8% and 4.6%, respectively.

 

    In June 2015, acquired Lewis & Lewis, Inc., a vertically integrated aggregates-based company serving the southwest Wyoming market.

 

    Redeemed $471.2 million aggregate principal amount of outstanding 10 12% Senior Notes due 2020 during the second and third quarters of 2015.

Recent Developments:

 

    In July 2015, Summit completed its previously announced acquisition of a 1.2 million short ton capacity cement plant in Davenport, Iowa along with seven cement distribution terminals (collectively, the “Davenport Assets”) from Lafarge North America Inc. (“Lafarge”) for a purchase price of $450.0 million in cash, plus an exchange of Summit’s Bettendorf, Iowa cement distribution terminal. Following completion of the transaction, Summit owns 2.4 million short tons of cement production capacity across the two cement plants plus eight cement distribution terminals along the Mississippi River system.

 

    Summit completed an offering of $350 million aggregate principal amount of 6.125% Senior Notes due 2023 and also entered into a new $650 million term loan facility due 2022, which replaced Summit’s prior $422 million term loan due 2019.

Tom Hill, the President and CEO of Summit, stated, “During the second quarter we produced significant growth in net revenues and margins across all of our lines of business. This strong improvement reflects the steady demand improvement in all of our regions, despite some weather-related challenges, mainly in Texas and Kansas, and our disciplined focus on price optimization across our vertically integrated lines of businesses. We achieved this while also expanding our Further Adjusted EBITDA margin by 300 basis points and generating incremental margins in excess of 50%. The success of our acquisition strategy was also evident in our results with more than half of our profit growth contributed by our accretive acquisitions, including the recent strategic bolt on addition of Lewis & Lewis, a vertically integrated aggregates-based business, in our West region.”

Mr. Hill continued, “We believe our sustained progress is a direct result of the steps we have taken to expand our business into attractive markets and establish leadership positions throughout our diversified footprint. Our completion of the Davenport Assets acquisition was an exciting milestone for our company and significantly advanced our position as a leading cement producer in the Midwest. We are now better positioned to continue enhancing our materials earnings exposure and overall profitability as we integrate these assets onto our platform. As we look to the back half of 2015, we plan to capitalize on the improving demand environment to improve our profitability while also remaining opportunistic with our capital to further expand our businesses in select target markets.”

Second Quarter 2015 Operating Results

In the second quarter 2015, net revenue increased 12.5% to $329.0 million, compared to $292.4 million in the prior year quarter. The increase in net revenue was primarily attributable to an increase in volumes across all lines of business, led by the West and Central regions. Net revenue grew organically by $9.3 million, or 3.2%, compared to the prior year quarter.

 

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Further Adjusted EBITDA increased 28.4% to $78.1 million, compared to $60.9 million in the prior year quarter, with growth in all regions. As a percentage of net revenue, Further Adjusted EBITDA improved to 23.8%, compared to 20.8% in the prior year quarter. Adjusted EBITDA by region in the second quarter 2015 compared to the prior year quarter was as follows:

 

    The West Region grew $8.7 million, or 28.4%, primarily driven by a higher mix of net revenue from aggregates, organic volume and price growth and the impact of acquisitions, mainly in the Houston and Midland/Odessa, Texas and British Columbia, Canada markets.

 

    The Central Region increased $6.7 million, or 23.2%, largely attributable to price growth across all lines of business, stronger volume in aggregates and ready-mixed concrete and the favorable impact of acquisition activity.

 

    The East Region improved $1.6 million, or 20.8%, primarily as a result of higher volume in aggregates leading to a larger mix of net revenue derived from materials.

Gross profit increased 25.1% to $115.8 million, compared to $92.5 million in the prior year quarter. As a percentage of net revenue, gross profit improved to 35.2%, compared to 31.6% in the prior year quarter, primarily attributable to a higher mix of net revenue from materials and products as a result of organic improvement and acquisition activity.

Materials Results – Net revenue from materials increased 29.6% to $88.1 million, compared to $67.9 million in the prior year quarter. Aggregates volumes grew 33.1% driven by 3.5% organic volume growth and the remainder attributable to acquisitions. Aggregates organic price increased 5.1% with the improvement due to higher prices across most markets. Including acquisitions, aggregates price increased 0.3% primarily due to the regional mix effect of acquisitions in markets with lower absolute prices, which partially offset organic price growth. Cement volume and price increased 0.7% and 9.1%, respectively, both driven by additional market demand. Gross profit from materials grew 34.7% to $52.7 million, compared to $39.1 million in the prior year quarter.

Products Results – Net revenue from products increased 12.9% to $173.2 million, compared to $153.4 million in the prior year quarter. Ready-mixed concrete volumes increased 17.5% primarily attributable to acquisitions. Ready-mixed concrete price increased 6.4%, largely benefitting from the pass through of higher cement industry prices. Asphalt volume and price increased 7.0% and 4.8% respectively, mostly reflecting stronger market demand. Gross profit from products increased 40.1% to $44.9 million, compared to $32.1 million in the prior year quarter.

Liquidity and Capital Resources

In April 2015, in connection with its initial public offering in March 2015, the Company redeemed $288.2 million aggregate principal amount of its outstanding 10 12% Senior Notes due 2020 at a redemption price equal to par, plus an applicable premium of $38.2 million and $5.2 million of accrued and unpaid interest.

At June 27, 2015, the Company had cash of $12.6 million and total outstanding debt of $827.2 million, as compared to cash of $13.2 million and total outstanding debt of approximately $1,064.9 million at December 27, 2014. As of June 27, 2015, the Company’s borrowing capacity was $144.8 million on its $235.0 million revolving credit facility, excluding $24.2 million of letters of credit.

Subsequent Events

On July 17, 2015, Summit completed the acquisition of the Davenports Assets, including a 1.2 million short ton cement plant, a quarry and seven cement distribution terminals, from Lafarge for a purchase price of $450.0 million in cash and a cement distribution terminal in Bettendorf, Iowa. The Davenport Assets are being integrated with and will operate as Continental Cement Company, an existing wholly-owned subsidiary of Summit.

In connection with the acquisition, on July 8, 2015, the Company issued $350.0 million in aggregate principal amount of 6.125% Senior Notes due 2023 at 100.0% of their par value. Additionally, on July 17, 2015, the Company refinanced its term loan under its senior secured credit facilities, in which the Company entered into a new $650 million term loan facility due 2022, replacing the prior $422 million term loan due 2019. The refinancing also reduced the applicable margins used to calculate interest rates for term loans under the Company’s senior secured credit facilities to 3.25% from 3.50%.

The Company used the combined net proceeds from the issuance of the senior notes and the refinancing of the term loan to finance an initial $370.0 million cash purchase price for the Davenport Assets, to refinance its existing senior secured term loan facility, to redeem $183.0 million aggregate principal amount of its outstanding 10 12% Senior Notes due 2020 and to pay related fees and expenses. The remaining $80.0 million of the purchase price for the Davenport Assets is due by December 31, 2015 and accrues interest at an annual rate of 7.5%, payable monthly.

Webcast and Conference Call Information

Summit will conduct a conference call at 4:30 p.m. Eastern Time (2:30 p.m. Mountain Time) on Monday, August 3, 2015 to review second quarter results, discuss recent events, and conduct a question-and-answer period. A webcast of the conference call and presentation slides to be referred to on the call 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.

 

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To participate in the telephone conference call:

 

Domestic:

  1-877-407-0784   

International:

  1-201-689-8560   

Conference ID:

  1361   

To listen to a replay of the telephone conference call:

 

Domestic:

  1-877-870-5176   

International:

  1-858-384-5517   

Conference ID:

  13614396   

About Summit Materials

Summit Materials is a leading vertically integrated construction materials company that supplies aggregates, cement, ready-mixed concrete and asphalt in the United States and British Columbia, Canada. Summit is a geographically diverse, aggregates-based business of scale that offers customers a single-source provider of construction materials and related downstream products in the residential, nonresidential, and public infrastructure end markets. Summit has completed more than 35 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 rules of the SEC regulate the use in filings with the SEC of “non-GAAP financial measures,” such as Adjusted EBITDA, Further Adjusted EBITDA, gross profit, adjusted net loss per share, and free cash flow 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 Adjusted EBITDA, Further Adjusted EBITDA, gross profit, adjusted net loss per share, and free cash flow 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. Further Adjusted EBITDA is defined in our senior secured credit facilities and used to measure compliance with covenants, including interest coverage and debt incurrence, and is used to measure our debt incurrence and restricted payment capacity under the indenture governing our senior notes. Our use of the terms Adjusted EBITDA, Further Adjusted EBITDA, gross profit and adjusted net loss per share, may vary from the use of such terms by others and should not be considered as alternatives to 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 and Further Adjusted EBITDA 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 and Further 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; (iv) income tax payments we are required to make; and (v) any cash requirements for the replacement cost of assets being depreciated or amortized. Because of these limitations, we rely primarily on our U.S. GAAP results and use Adjusted EBITDA and Further Adjusted EBITDA only supplementally.

Adjusted EBITDA, Further Adjusted EBITDA, gross profit, adjusted net loss per share, and free cash flow reflect an additional way 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. However, non-GAAP financial measures should not be construed as being more important than other comparable U.S. GAAP financial measures and should be considered in conjunction with the U.S. GAAP measures. In addition, non-

 

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GAAP financial measures are not standardized; therefore, it may not be possible to compare such financial measures with other companies’ non-GAAP financial measures having the same or similar names. 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 tables attached to this press release.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “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. Any and all statements made relating to the timing, funding of, and expectations for our anticipated purchase of the Davenport Assets, the macroeconomic outlook for our markets, potential acquisition activity, our estimated and projected earnings, margins, costs, expenditures, cash flows, sales volumes and financial results are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those expected. 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 impact 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 achieved. 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 our prospectus dated March 11, 2015, filed with the SEC on March 13, 2015. Such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov.

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 otherwise required by law.

 

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SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

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

 

     Three months ended     Six months ended  
     June 27,
2015
    June 28,
2014
    June 27,
2015
    June 28,
2014
 

Revenue:

        

Product

   $ 261,270      $ 221,323      $ 410,190      $ 321,491   

Service

     67,739        71,087        93,958        106,938   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenue

     329,009        292,410        504,148        428,429   

Delivery and subcontract revenue

     35,934        31,885        54,782        46,957   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     364,943        324,295        558,930        475,386   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue (excluding items shown separately below):

        

Product

     163,632        150,137        283,423        234,614   

Service

     49,604        49,740        69,234        78,866   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cost of revenue

     213,236        199,877        352,657        313,480   

Delivery and subcontract cost

     35,934        31,885        54,782        46,957   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     249,170        231,762        407,439        360,437   
  

 

 

   

 

 

   

 

 

   

 

 

 

General and administrative expenses

     39,711        34,867        106,945        70,355   

Depreciation, depletion, amortization and accretion

     27,386        21,339        53,512        40,695   

Transaction costs

     6,376        2,405        7,740        4,996   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     42,300        33,922        (16,706     (1,097

Other expense (income), net

     102        (697     493        (891

Loss on debt financings

     30,873        —          31,672        —     

Interest expense

     17,395        21,651        41,504        40,470   
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from continuing operations before taxes

     (6,070     12,968        (90,375     (40,676

Income tax benefit

     (5,345     (864     (9,813     (1,460
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from continuing operations

     (725     13,832        (80,562     (39,216

Income from discontinued operations

     (758     (369     (758     (349
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     33        14,201        (79,804     (38,867

Net income (loss) attributable to noncontrolling interest in subsidiaries

     13        1,946        (1,969     (569
    

 

 

     

 

 

 

Net income (loss) attributable to Summit Holdings

     225      $ 12,255        (67,479   $ (38,298
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to Summit Materials, Inc.

   $ (205     $ (10,356  
  

 

 

     

 

 

   

Net loss per share of Class A common stock:

        

Basic

   $ (0.01     $ (0.39  

Diluted

   $ (0.01     $ (0.40  

Weighted average shares of Class A common stock:

        

Basic

     26,584,738          26,584,738     

Diluted

     26,584,738          28,410,890     

 

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SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Balance Sheets

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

 

     June 27,
2015
    December 27,
2014
 
Assets     

Current assets:

    

Cash

   $ 12,570     $ 13,215  

Accounts receivable, net

     164,059       141,302  

Costs and estimated earnings in excess of billings

     24,721       10,174  

Inventories

     128,417       111,553  

Other current assets

     19,853       17,172  
  

 

 

   

 

 

 

Total current assets

     349,620       293,416  

Property, plant and equipment, less accumulated depreciation, depletion and amortization (June 27, 2015 - $317,293 and December 27, 2014 - $279,375)

     985,081       950,601  

Goodwill

     418,659       419,270  

Intangible assets, less accumulated amortization (June 27, 2015 - $4,274 and December 27, 2014 - $3,073)

     16,257       17,647  

Other assets

     45,875       48,843  
  

 

 

   

 

 

 

Total assets

   $ 1,815,492     $ 1,729,777  
  

 

 

   

 

 

 

Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity/Partners’ Interest

    

Current liabilities:

    

Current portion of debt

   $ 71,275     $ 5,275  

Current portion of acquisition-related liabilities

     22,395       18,402  

Accounts payable

     90,822       78,854  

Accrued expenses

     90,778       101,496  

Billings in excess of costs and estimated earnings

     8,341       8,958  
  

 

 

   

 

 

 

Total current liabilities

     283,611       212,985  

Long-term debt

     755,972       1,059,642  

Acquisition-related liabilities

     42,869       42,736  

Other noncurrent liabilities

     114,153       93,691  
  

 

 

   

 

 

 

Total liabilities

     1,196,605       1,409,054  
  

 

 

   

 

 

 

Redeemable noncontrolling interest

     —         33,740  

Stockholders’ equity/partners’ interest:

    

Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 26,584,738 shares issued and outstanding as of June 27, 2015

     266       —    

Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 69,007,297 shares issued and outstanding as of June 27, 2015

     690       —    

Partners’ interest

     —         285,685  

Additional paid-in capital

     457,767       —    

Accumulated deficit

     (10,356 )     —    

Accumulated other comprehensive loss

     14       —    
  

 

 

   

 

 

 

Stockholders’ equity/partners’ interest:

     448,381       285,685  

Noncontrolling interest in consolidated subsidiaries

     1,219       1,298  

Noncontrolling interest in Summit Materials, Inc.

     169,287       —    
  

 

 

   

 

 

 

Total stockholders’ equity/partners’ interest

     618,887       286,983  
  

 

 

   

 

 

 

Total liabilities, redeemable noncontrolling interest and stockholders’ equity/partners’ interest

   $ 1,815,492     $ 1,729,777  
  

 

 

   

 

 

 

 

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SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

($ in thousands, except per share amounts)

 

     Six months ended  
     June 27,
2015
    June 28,
2014
 

Cash flow from operating activities:

    

Net loss

   $ (79,804   $ (38,867

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

    

Depreciation, depletion, amortization and accretion

     57,131        43,766   

Share-based compensation expense

     17,020        1,138   

Deferred income tax expense (benefit)

     23        (525

Net gain on asset disposals

     (3,487     (76

Net gain on debt financings

     (6,926     —     

Other

     1,185        559   

(Increase) decrease in operating assets, net of acquisitions:

    

Accounts receivable, net

     (21,535     (28,917

Inventories

     (16,555     (17,820

Costs and estimated earnings in excess of billings

     (14,505     (10,246

Other current assets

     (2,779     (2,128

Other assets

     53        2,214   

Increase (decrease) in operating liabilities, net of acquisitions:

    

Accounts payable

     3,105        3,589   

Accrued expenses

     (11,021     8,511   

Billings in excess of costs and estimated earnings

     (875     (4,361

Other liabilities

     (1,114     (2,717
  

 

 

   

 

 

 

Net cash used in operating activities

     (80,084     (45,880
  

 

 

   

 

 

 

Cash flow from investing activities:

    

Acquisitions, net of cash acquired

     (15,863     (234,870

Purchases of property, plant and equipment

     (43,379     (49,260

Proceeds from the sale of property, plant and equipment

     6,039        5,985   

Other

     610        757   
  

 

 

   

 

 

 

Net cash used for investing activities

     (52,593     (277,388
  

 

 

   

 

 

 

Cash flow from financing activities:

    

Proceeds from initial public offering

     460,000        —     

Capital issuance costs

     (36,398     —     

Capital contributions by partners

     —          24,350   

Proceeds from debt issuances

     242,000        424,750   

Debt issuance costs

     (5,130     (6,354

Payments on debt

     (469,628     (109,246

Purchase of noncontrolling interest in consolidated subsidiary

     (35,000     —     

Payments on acquisition-related liabilities

     (11,970     (4,259

Distributions from partnership

     (11,842     —     

Other

     —          (88
  

 

 

   

 

 

 

Net cash provided by financing activities

     132,032        329,153   
  

 

 

   

 

 

 

Net (decrease) increase in cash

     (645     5,885   

Cash – beginning of period

     13,215        18,184   
  

 

 

   

 

 

 

Cash – end of period

   $ 12,570      $ 24,069   
  

 

 

   

 

 

 

 

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SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Revenue Data by Region and Product

($ in thousands, except per share amounts)

 

     Three months ended      Six months ended  
     June 27,
2015
     June 28,
2014
     June 27,
2015
     June 28,
2014
 

Net Revenue:

           

West region

   $ 186,013       $ 160,884       $ 303,019       $ 249,148   

Central region

     107,168         95,697         157,756         136,831   

East region

     35,828         35,829         43,373         42,450   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total net revenue

   $ 329,009       $ 292,410       $ 504,148       $ 428,429   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Three months ended      Six months ended  
     June 27,
2015
     June 28,
2014
     June 27,
2015
     June 28,
2014
 

Net Revenue by Product

           

Materials

   $ 88,059       $ 67,923       $ 138,147       $ 97,731   

Products

     173,211         153,400         272,043         223,760   

Services

     67,739         71,087         93,958         106,938   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net Revenue

   $ 329,009       $ 292,410       $ 504,148       $ 428,429   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross Profit

           

Materials

   $ 52,692       $ 39,118       $ 62,829       $ 43,415   

Products

     44,946         32,070         63,938         43,463   

Services

     18,135         21,345         24,724         28,071   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross Profit

   $ 115,773       $ 92,533       $ 151,491       $ 114,949   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

8


SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Volume and Price Statistics

(Units in thousands, except per share amounts)

 

    Three months ended     Six months ended  
    June 27, 2015     June 28, 2014     June 27, 2015     June 28, 2014  

Total Volume

       

Aggregates (tons)

    8,733        6,559        14,821        10,196   

Cement (tons)

    307        305        430        395   

Ready-mixed concrete (cubic yards)

    871        741        1,564        1,197   

Asphalt (tons)

    1,302        1,217        1,598        1,647   
    Three months ended     Six months ended  
    June 27, 2015     June 28, 2014     June 27, 2015     June 28, 2014  

Pricing

       

Aggregates (per ton)

  $ 9.15      $ 9.12      $ 8.92      $ 8.96   

Cement (per ton)

    98.38        90.21        97.56        89.32   

Ready-mixed concrete (per cubic yards)

    102.48        96.35        101.91        95.04   

Asphalt (per ton)

    56.49        53.90        56.58        52.49   
    Volume     Pricing     Volume     Pricing  

Year over Year Comparison

       

Aggregates (per ton)

    33.1     0.3     45.4     (0.4 )% 

Cement (per ton)

    0.7     9.1     8.9     9.2

Ready-mixed concrete (per cubic yards)

    17.5     6.4     30.7     7.2

Asphalt (per ton)

    7.0     4.8     (3.0 )%      7.8
    Volume     Pricing     Volume     Pricing  

Year over Year Comparison

(Excluding Acquisitions)

       

Aggregates (per ton)

    3.5     5.1     6.8     4.2

Cement (per ton)

    0.7     9.1     8.9     9.2

Ready-mixed concrete (per cubic yards)

    0.1     4.8     5.2     4.7

Asphalt (per ton)

    6.2     4.6     (3.5 )%      7.6

 

9


SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Reconciliations of Non-GAAP Financial Measures

($ in thousands, except per share amounts)

The tables below reconcile our net income (loss) to Adjusted EBITDA and present Adjusted EBITDA by segment for the three and six months ended June 27, 2015 and June 28, 2014.

 

     Three months ended      Six months ended  
     June 27,
2015
     June 28,
2014
     June 27,
2015
     June 28,
2014
 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

           

Net income (loss)

   $ 33       $ 14,201       $ (79,804    $ (38,867

Interest expense

     17,395         21,651         41,504         40,470   

Depreciation, depletion and amortization

     27,027         21,121         52,749         40,270   

Accretion

     359         218         763         425   

Income tax benefit

     (5,345      (864      (9,813      (1,460

Initial public offering costs

     —           —           28,296         —     

Loss on debt financings

     30,873         —           31,672         —     

Income from discontinued operations

     (758      (369      (758      (349
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

$ 69,584    $ 55,958    $ 64,609    $ 40,489   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA by Segment

West

$ 39,497    $ 30,750    $ 51,366    $ 32,541   

Central

  35,518      28,823      36,228      28,400   

East

  9,580      7,932      1,713      (1,406

Corporate

  (15,011   (11,547   (24,698   (19,046
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

$ 69,584    $ 55,958    $ 64,609    $ 40,489   
  

 

 

    

 

 

    

 

 

    

 

 

 

The table below reconciles our net income per share to adjusted net income per share for the three and six months ended June 27, 2015.

 

    June 27, 2015  
    Three months
ended
    Six months
ended
 

Reconciliation of Net Income Per Share to Adjusted Income Per Share

       

Net loss attributable to Summit Materials, Inc.

  $ (205   $ (0.01   $ (10,356   $ (0.37

Initial public offering costs

    —          —          7,866        0.28   

Loss on debt financings

    8,583        0.33        8,805        0.31   
 

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted income loss

$ 8,378    $ 0.32    $ 6,315    $ 0.24   
 

 

 

   

 

 

   

 

 

   

 

 

 

Add: Noncontrolling interest impact of LP Unit conversion (1)

  —        —        (958   (0.03
 

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income

$ 8,378    $ 0.32    $ 5,357    $ 0.19   
 

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares of Class A common stock:

Basic

  26,584,738      26,584,738   

Diluted

  26,584,738      28,410,890   

 

  (1) Diluted net income for the six months ended June 27, 2015 considers the change in ownership percentage from 27.8% to 30.4% as a result of the LP unit conversions.

 

10


SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Reconciliations of Non-GAAP Financial Measures

($ in thousands, except per share amounts)

 

The table below reconciles the Summit Materials, Inc. net (loss) per share to net earnings (loss) per share attributable to member of Summit Materials, LLC, post-IPO for the three and six months ended June 27, 2015:

 

     June 27, 2015  
     Three months
ended
    Six months
ended
 

Net income (loss) to member of Summit Materials, LLC, post-IPO:

    

Net loss attributable to Summit Materials, Inc.

   $ (205   $ (10,356

Net income (loss) attributable to Summit Materials Holdings, post-IPO

     225      $ (25,936
  

 

 

   

 

 

 

Total net income (loss), post-IPO

   $ 20      $ (36,292
  

 

 

   

 

 

 

Weighted-average common shares:

    

Weighted average shares of Class A common stock

     26,584,738        26,584,738   

Weighted average LP Units outstanding in Summit Materials Holdings, L.P.

     69,007,297        69,007,297   
  

 

 

   

 

 

 

Total

     95,592,035        95,592,035   
  

 

 

   

 

 

 

Net loss per share attributable to Summit Materials, Inc.

   $ (0.01   $ (0.39
  

 

 

   

 

 

 

Net earnings (loss) per share attributable to Summit Materials Holdings, L.P.

   $ 0.00      $ (0.38
  

 

 

   

 

 

 

The following table reconciles operating income to gross profit for the three and six months ended June 27, 2015 and June 28, 2014.

 

     Three months ended     Six months ended  
     June 27,
2015
    June 28,
2014
    June 27,
2015
    June 28,
2014
 

Reconciliation of Operating Income (Loss) to Gross Profit

        

Operating income (loss)

   $ 42,300      $ 33,922      $ (16,706   $ (1,097

General and administrative expenses

     39,711        34,867        106,945        70,355   

Depreciation, depletion, amortization and accretion

     27,386        21,339        53,512        40,695   

Transaction costs

     6,376        2,405        7,740        4,996   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit

   $ 115,773      $ 92,533      $ 151,491      $ 114,949   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Margin

     35.2     31.6     30.0     26.8

The following table reconciles net cash used for operating activities to free cash flow for the three and six months ended June 27, 2015 and June 28, 2014.

 

     Three months ended      Six months ended  
     June 27,
2015
     June 28,
2014
     June 27,
2015
     June 28,
2014
 

Net income (loss)

   $ 33       $ 14,201       $ (79,804    $ (38,867

Non- cash items

     22,737         23,522         64,946         44,862   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income (loss) adjusted for non-cash items

     22,770         37,723         (14,858      5,995   

Change in working capital accounts

     (41,346      (33,228      (65,226      (51,875
  

 

 

    

 

 

    

 

 

    

 

 

 

Net cash (used for) provided by operating activities

     (18,576      4,495         (80,084      (45,880

Capital expenditures, net of asset sales

     (22,373      (25,536      (37,340      (43,275
  

 

 

    

 

 

    

 

 

    

 

 

 

Free cash outflow

   $ (40,949    $ (21,041    $ (117,424    $ (89,155
  

 

 

    

 

 

    

 

 

    

 

 

 

 

11


SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Reconciliations of Non-GAAP Financial Measures

($ in thousands, except per share amounts)

 

The following table presents a reconciliation of net income (loss) to Further Adjusted EBITDA for the three and six months ended June 27, 2015 and June 28, 2014.

 

     Three months ended      Six months ended  
     June 27,
2015
     June 28,
2014
     June 27,
2015
     June 28,
2014
 

Net income (loss) (1)

   $ 33       $ 14,201       $ (79,804    $ (38,867

Interest expense (1)

     17,395         21,651         41,504         40,470   

Depreciation, depletion and amortization

     27,027         21,121         52,749         40,270   

Accretion

     359         218         763         425   

Income tax benefit

     (5,345      (864      (9,813      (1,460

Initial public offering costs

     —           —           28,296         —     

Loss on debt financings

     30,873         —           31,672         —     

Discontinued operations

     (758      (369      (758      (349
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 69,584       $ 55,958       $ 64,609       $ 40,489   
  

 

 

    

 

 

    

 

 

    

 

 

 

Acquisition transaction expenses

     6,376         2,405         7,740         4,996   

Non-cash compensation

     1,803         572         2,569         1,138   

Management fees and expenses

     53         1,344         1,046         2,260   

Other

     331         601         829         269   

EBITDA for certain completed acquisitions (2)

           
  

 

 

    

 

 

    

 

 

    

 

 

 

Further Adjusted EBITDA

   $ 78,147       $ 60,880       $ 76,793       $ 49,152   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

  (1) Further Adjusted EBITDA is defined in our senior secured credit facilities and used for various covenant ratios. Summit Materials, Inc.’s net loss, as shown here, was $291 thousand greater than the debt issuer’s, Summit Materials, LLC, due to additional interest expense associated with a certain deferred consideration obligation. However, Adjusted EBITDA and Further Adjusted EBITDA for Summit Materials, Inc. is the same as Summit Materials, LLC’s.
  (2) For purposes of this disclosure, EBITDA for certain completed acquisitions has been omitted.

Contact:

Investor Relations:

303-515-5159

Investorrelations@summit-materials.com

Media Contact:

303-515-5158

mediarelations@summit-materials.com

 

12