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| 8-K - 8-K - Summit Materials, Inc. | a8kcoverpage-q42019.htm |
Exhibit 99.1
Summit Materials, Inc. Reports Fourth Quarter and Full Year 2019 Results
- Annual operating income increased 31.4% to $213.6 million
-Annual net income attributable to Summit Inc. increased 74.2% to $59.1 million
-Aggregates volumes increased 13.3%
- Adjusted EBITDA increased 13.6% to $461.5 million
DENVER, CO. - (February 5, 2020) - Summit Materials, Inc. (NYSE: SUM, “Summit,” "Summit Inc." or the “Company”), a leading vertically integrated construction materials company, today announced results for the fourth quarter and full year 2019.
For the three months ended December 28, 2019, the Company reported net income attributable to Summit Inc. of $35.7 million, or $0.32 per basic share, compared to a net loss attributable to Summit Inc. of $19.2 million, or $(0.17) per basic share in the comparable prior year period. Summit reported adjusted diluted net income of $71.5 million, or $0.62 per adjusted diluted share as compared to adjusted diluted net loss of $18.6 million, or $(0.16) per adjusted diluted share in the prior year period. The increase in adjusted diluted net income in the fourth quarter 2019 was partially due to an annual re-measurement of the Company's Tax Receivable Agreement.
For the year ended December 28, 2019, the Company reported net income attributable to Summit Inc. of $59.1 million, or $0.53 per basic share, compared to net income attributable to Summit Inc. of $33.9 million, or $0.30 per basic share in the comparable prior year period. Summit reported adjusted diluted net income of $108.8 million, or $0.94 per adjusted diluted share as compared to adjusted diluted net income of $17.4 million, or $0.15 per adjusted diluted share in the prior year period. The increase in 2019 adjusted diluted net income was partially due to an annual re-measurement of the Company's Tax Receivable Agreement.
Summit's net revenue increased 13.7% in the fourth quarter and 6.4% in full year 2019 compared to the fourth quarter and full year 2018, respectively. While volume and price increased in all lines of business in 2019 relative to the prior year, aggregates contributed the largest proportion of incremental net revenue. The Company reported operating income of $213.6 million in 2019, compared to $162.5 million in the prior year. Summit's operating margin expanded to 10.5% in 2019 from 8.5% in 2018 on net revenue gains in excess of our cost of revenue, partially offset by increases in general and administrative, depreciation, depletion, amortization and accretion expenses. Adjusted EBITDA increased 29.6% in the fourth quarter to $121.1 million as compared to $93.4 million in 2018. For the full year 2019, Adjusted EBITDA was $461.5 million, an increase of 13.6% compared to 2018.
Tom Hill, CEO of Summit Materials, commented, "Sustained public sector demand coupled with improved pricing contributed to margin expansion in our aggregates and products lines of business late in the quarter, resulting in the highest fourth quarter Adjusted EBITDA in the Company's history. For the full year 2019, our aggregates business delivered strong results due in part to strong performance from our East Segment."
As of December 28, 2019, the Company had $311.3 million in cash and $1.9 billion in debt outstanding. For the year ended December 28, 2019, cash flow from operations was $337.2 million while cash paid for capital equipment was $177.5 million. Brian Harris, CFO of Summit Materials added, "We were disciplined and selective on acquisitions while generating increased cash flow from operations, which combined with lower capital expenditures enabled us to lower our leverage ratio."
For the year ended December 28, 2019, organic sales volumes increased 9.5% in aggregates, 2.8% in cement, 0.1% in ready-mix concrete, and 2.6% in asphalt relative to the same period last year. Full year 2019 organic average selling prices increased 6.5% in aggregates, 1.7% in cement, 3.3% in ready-mix concrete, and 6.2% in asphalt relative to the prior year period.
Summit provided 2020 full year Adjusted EBITDA guidance of $460 million to $500 million. Hill continued, "In 2020 we anticipate continued growth in public markets, as many states enact new fuel taxes, in residential markets where entry-level housing demand continues to exceed supply, and in non-residential markets where low rise commercial development and windfarm work present opportunities."
The Company provided 2020 capital expenditure guidance of approximately $185 million to $205 million, which include $65 million to $80 million estimated for greenfield projects.
Full-Year 2019 | Results by Line of Business
Aggregates Business: Aggregates net revenues increased by 25.6% to $469.7 million during 2019, when compared to the prior year due to higher organic volume and selling price, and to a lesser extent, our acquisition program. Aggregates adjusted cash gross profit margin increased to 60.2% in 2019, compared to 59.4% in 2018 primarily due to higher average selling prices. Organic aggregates sales volumes increased 9.5% in 2019 as compared to 2018 led by higher volumes in our Missouri, Kansas and Texas markets. Organic aggregates pricing increased 6.5% as compared to 2018, primarily due to higher pricing in Missouri, and to a lesser extent, higher prices in many of our other markets.
Cement Business: Cement net revenues increased 3.5% to $290.7 million during 2019, when compared to 2018. Cement adjusted cash gross profit margin decreased to 40.3% in 2019, compared to 44.3% in 2018 due to higher distribution costs related to flooding and unplanned maintenance. Sales volume of cement increased 2.8% in 2019 when compared to 2018 on higher sales in northern markets relative to the prior year. Cement average selling prices increased 1.7% in 2019 relative to 2018.
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Products Business: Products net revenues increased to $988.6 million during 2019 compared to $967.5 million in 2018. Products adjusted cash gross profit margin increased to 22.1% in 2019, versus 21.1% in 2018. Organic sales volumes of ready-mix concrete increased 0.1% in 2019, while organic average selling prices increased 3.3% as compared to 2018, led by pricing gains in Texas as well as in a number of our other markets. Organic sales volumes of asphalt increased 2.6% in 2019, while organic average selling prices increased 6.2% during 2019 as higher volume and pricing were reported in our Utah, Texas, and Kentucky markets.
Fourth Quarter 2019 | Results by Line of Business
Aggregates Business: Aggregates net revenues increased by 24.2% to $115.6 million in the fourth quarter 2019, when compared to the prior year period. Aggregates adjusted cash gross profit margin increased to 61.9% in the fourth quarter 2019 compared to 54.8% on higher volumes, increased average selling prices and product mix. Aggregates sales volumes increased 15.4% in the fourth quarter 2019, when compared to the prior-year period on higher organic volume growth, particularly in Missouri, Kansas, and Texas. Average selling prices for aggregates increased 4.3% in the fourth quarter 2019 when compared to the prior year period.
Cement Business: Cement net revenues increased 3.6% to $69.9 million in the fourth quarter 2019, when compared to the prior-year period. Cement adjusted cash gross profit margin decreased to 45.4% in the fourth quarter, compared to 46.4% in the prior year period, as the Company incurred some unplanned maintenance and winter storage costs. Organic sales volume of cement increased 2.7% in the fourth quarter, when compared to the prior year period, on higher sales in certain southern markets along the Mississippi River versus a year ago. Organic average selling prices on cement increased 2.6% in the fourth quarter when compared to the prior year period.
Products Business: Products net revenues were $251.4 million in the fourth quarter 2019, compared to $216.1 million in the prior year period. Products adjusted cash gross profit margin increased to 23.9% in the fourth quarter, versus 21.6% in the prior year period. Our organic average sales price for ready-mix concrete increased 6.5%, coupled with a 12.6% increase in organic sales volumes of ready-mix concrete, led by higher volumes in Utah and Texas. Our organic average sales price for asphalt increased 4.3% while we had a 4.6% increase in asphalt organic sales volumes, driven in part by volume growth in Utah, Texas, and Kentucky.
Full-Year 2019 | Results By Reporting Segment
Net revenue increased by 6.4% to $2.0 billion in 2019, versus $1.9 billion in 2018. The increase in consolidated net revenue relative to 2019 was primarily attributable to a 16.2% increase in East Segment net revenue, combined with a 3.5% increase in Cement Segment net revenue and a 1.1% increase in West Segment net revenue. The Company reported operating income of $213.6 million in 2019, compared to $162.5 million in the prior year. Adjusted EBITDA was $461.5 million in 2019 compared to $406.3 million in 2018.
West Segment: The West Segment reported operating income of $109.2 million in 2019, compared to $92.1 million in 2018, due in part to higher revenue from aggregates and asphalt. Adjusted EBITDA increased to $205.0 million in 2019, compared to $189.0 million in 2018. Aggregates revenue in 2019 increased 11.4% over 2018 as a result of a 5.8% increase in organic volumes, led by volume growth in Texas, and a 2.7% increase in organic average selling prices, led by pricing gains in Utah and Colorado. Ready-mix concrete revenue in 2019 increased 2.9% over 2018, reflecting improved weather conditions in Utah and the Intermountain geographies relative to a year ago. A 1.5% decrease in organic ready-mix concrete volumes was offset by a 3.6% increase in organic average sales prices. Asphalt revenue increased by 14.7% in 2019, as organic volumes increased 2.8% and average sales prices increased 5.7% compared to 2018, when the Company's liquid asphalt terminal did not operate for the full year 2018 due to hurricane-related repairs.
East Segment: The East Segment reported operating income of $101.8 million in 2019, compared to $59.6 million in 2018. The increase in East Segment operating income was mainly attributable to higher net revenue from aggregates. Adjusted EBITDA increased to $187.6 million in 2019, compared to $138.0 million in 2018. Aggregates net revenue increased 29.2%, primarily due to an 12.9% increase in organic volume as well as an increase in organic average sales prices of 9.1%, mainly related to public repair work. Organic ready-mix concrete revenue increased 7.7% due to a 5.4% increase in volume and a 2.2% increase in price. Organic asphalt revenue increased 16.0%, reflecting a 2.1% increase in volume, led by our Kentucky markets, combined with a 7.5% increase in price, led by our Kansas markets.
Cement Segment: The Cement Segment reported operating income of $64.7 million in 2019, compared to $75.8 million in 2018. Adjusted EBITDA declined to $103.4 million in 2019, compared to $111.4 million in 2018. Cement Segment revenue increased 3.5%, reflecting a 2.8% increase in volume and a 1.7% increase in price. Cement segment operating income declined as higher revenue was more than offset by additional distribution costs incurred as a result of shipping challenges on the Mississippi River due to flooding, as well as incremental plant downtime.
Fourth Quarter 2019 | Results By Reporting Segment
Net revenue increased by 13.7% to $506.3 million in the fourth quarter 2019, versus $445.1 million in the prior year period. The improvement in net revenue was primarily attributable to organic volume and price growth in aggregates and ready-mix concrete. The Company reported operating income of $59.9 million in the fourth quarter 2019, compared to $28.5 million in the prior year period. Net income increased to $36.4 million in the fourth quarter of 2019, compared to a loss of $18.6 million in the prior year period. Adjusted EBITDA increased 29.6% to $121.1 million in the fourth quarter of 2019, compared to $93.4 million in the prior year period.
West Segment: The West Segment reported operating income of $30.7 million in the fourth quarter 2019, compared to $11.6 million in the prior year period. Adjusted EBITDA increased to $53.9 million in the fourth quarter 2019, compared to $37.7 million in the prior year period.
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Improvements in operating income reflected increased demand for aggregates across the Segment as well as more favorable weather conditions than a year ago. Aggregates revenue in the fourth quarter increased 8.9% over the prior year period including a 11.4% increase in organic volumes despite a 2.2% decrease in organic average sales prices as higher pricing in Utah and British Columbia was offset by lower pricing in Texas. Ready-mix concrete revenue in the fourth quarter 2019 increased 15.5% over the prior year period, as a 7.1% increase in organic volumes and a 7.7% increase in organic average sales prices reflected favorable weather and market conditions in Utah and in parts of Texas. Asphalt revenue increased by 19.8% in the fourth quarter 2019 over the prior year period on a 10.7% increase in volume and a 5.9% increase in price, led by our Utah, Texas, and British Columbia operations.
East Segment: The East Segment reported operating income of $29.8 million in the fourth quarter 2019, compared to $15.5 million in the prior year period. Adjusted EBITDA increased to $53.1 million in the fourth quarter 2019, compared to $37.5 million in the prior year period. Adjusted EBITDA was favorably impacted by a higher than expected contribution related to public repair work. Aggregates revenue increased 29.4% due to increases resulting from a 19.0% and 8.7% increase in organic volumes and average sales prices, respectively, driven by growth in Missouri and Kansas. Ready-mix concrete revenue increased 34.6% due to an increase in organic volumes while average selling prices increased 3.0%. Asphalt revenue increased 1.9% despite a 4.5% decrease in organic volumes slightly offset by a 1.4% increase in organic average sales prices reflecting strength in Kentucky and parts of Kansas.
Cement Segment: The Cement Segment reported operating income of $20.6 million in the fourth quarter 2019, an increase from $19.3 million in the prior year period. Adjusted EBITDA decreased to $27.9 million in the fourth quarter 2019, compared to $28.8 million in the prior year period, due primarily to the lingering effects of shipping constraints on the Mississippi River. Despite these challenges, the segment reported increases of 2.7% and 2.6% in organic sales volumes and organic average selling prices, respectively, during the fourth quarter 2019 as compared to the prior year period.
Liquidity and Capital Resources
As of December 28, 2019, the Company had cash on hand of $311.3 million and borrowing capacity under its revolving credit facility of $329.8 million. The borrowing capacity on the revolving credit facility is fully available to the Company within the terms and covenant requirements of its credit agreement. As of December 28, 2019, the Company had $1.9 billion in debt outstanding.
Financial Outlook
For full-year 2020, the Company estimates its Adjusted EBITDA to be in the range of $460 million to $500 million. For full-year 2020, the Company estimates its capital expenditures to be in the range of $185 million to $205 million, including approximately $65 million to $80 million estimated for greenfield opportunities.
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Webcast and Conference Call Information
Summit Materials will conduct a conference call on Wednesday, February 5, 2020, at 11:00 a.m. eastern time (9:00 a.m. mountain time) to review the Company’s fourth quarter and full year 2019 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: 1-877-823-8690
International Live: 1-825-312-2236
Conference ID: 7192995
Password: Summit
To listen to a replay of the teleconference, which will be available through February 12, 2020:
Domestic Replay: 1-800-585-8367
International Replay: 1-416-621-4642
Conference ID: 7192995
About Summit Materials
Summit Materials is a leading vertically integrated materials-based company that supplies aggregates, cement, ready-mix concrete and asphalt in the United States and British Columbia, Canada. Summit is a geographically diverse, materials-based business of scale that offers customers a single-source provider of construction materials and related downstream products in the public infrastructure, residential and nonresidential end markets. Summit has a strong track record of successful acquisitions since its founding and continues to pursue growth opportunities in new and existing markets. For more information about Summit Materials, please visit www.summit-materials.com.
Non-GAAP Financial Measures
The Securities and Exchange Commission (“SEC”) regulates the use of “non-GAAP financial measures,” such as Adjusted Net Income (Loss), Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow, Net Leverage and Net Debt which are derived on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). We have provided these measures because, among other things, we believe that they provide investors with additional information to measure our performance, evaluate our ability to service our debt and evaluate certain flexibility under our restrictive covenants. Our Adjusted Net Income (Loss), Adjusted Diluted EPS, Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow, Net Leverage and Net Debt may vary from the use of such terms by others and should not be considered as alternatives to or more important than net income (loss), operating income (loss), revenue or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or to cash flows as measures of liquidity.
Adjusted EBITDA, Adjusted EBITDA Margin, and other non-GAAP measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of the limitations of Adjusted EBITDA are that these measures do not reflect: (i) our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) changes in, or cash requirements for, our working capital needs; (iii) interest expense or cash requirements necessary to service interest and principal payments on our debt; and (iv) income tax payments we are required to make. Because of these limitations, we rely primarily on our U.S. GAAP results and use Adjusted EBITDA, Adjusted EBITDA Margin and other non-GAAP measures on a supplemental basis.
Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Adjusted Net Income (Loss), Adjusted Diluted EPS, Free Cash Flow, Net Leverage and Net Debt reflect additional ways of viewing aspects of our business that, when viewed with our GAAP results and the accompanying reconciliations to U.S. GAAP financial measures included in the tables attached to this press release, may provide a more complete understanding of factors and trends affecting our business. We strongly encourage investors to review our consolidated financial statements in their entirety and not rely on any single financial measure. Reconciliations of the non-GAAP measures used in this press release are included in the attached tables. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
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Cautionary Statement Regarding Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include all statements that do not relate solely to historical or current facts, and you can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “trends,” “plans,” “estimates,” “projects” or “anticipates” or similar expressions that concern our strategy, plans, expectations or intentions. All statements made relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, it is very difficult to predict the effect of known factors, and, of course, it is impossible to anticipate all factors that could affect our actual results. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be realized. Important factors could affect our results and could cause results to differ materially from those expressed in our forward-looking statements, including but not limited to the factors discussed in the section entitled “Risk Factors” in Summit Inc.’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018 as filed with the Securities and Exchange Commission (the “SEC”), any factors discussed in the section entitled “Risk Factors” in any of our subsequently filed SEC filings, including our Annual Report on Form 10-K for the fiscal year ended December 28, 2019, which is expected to be filed on or about the date of this press release, and the following:
- | our dependence on the construction industry and the strength of the local economies in which we operate; | ||
- | the cyclical nature of our business; | ||
- | risks related to weather and seasonality; | ||
- | risks associated with our capital-intensive business; | ||
- | competition within our local markets; | ||
- | our ability to execute on our acquisition strategy, successfully integrate acquisitions with our existing operations and retain key employees of acquired businesses; | ||
- | our dependence on securing and permitting aggregate reserves in strategically located areas; | ||
- | declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities and other state agencies; | ||
- | environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use; | ||
- | costs associated with pending and future litigation; | ||
- | shortages of, or increases in prices for commodities, labor and other production and delivery inputs; | ||
- | conditions in the credit markets; | ||
- | our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us; | ||
- | material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications; | ||
- | cancellation of a significant number of contracts or our disqualification from bidding for new contracts; | ||
- | special hazards related to our operations that may cause personal injury or property damage not covered by insurance; | ||
- | our substantial current level of indebtedness, including our exposure to variable interest rate risk; | ||
- | our dependence on senior management and other key personnel, and our ability to retain and attract qualified personnel; | ||
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- | supply constraints or significant price fluctuations in the electricity and petroleum-based resources that we use, including diesel and liquid asphalt; | ||
- | climate change and climate change legislation or regulations; | ||
- | unexpected operational difficulties; | ||
- | interruptions in our information technology systems and infrastructure; including cybersecurity and data leakage risks; and | ||
- | potential labor disputes, strikes, other forms of work stoppage or other union activities. | ||
All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements. Any forward-looking statement that we make herein speaks only as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.
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SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
($ in thousands, except share and per share amounts)
Three months ended | Year ended | |||||||||||||||
December 28, | December 29, | December 28, | December 29, | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue: | ||||||||||||||||
Product | $ | 430,463 | $ | 370,563 | $ | 1,724,462 | $ | 1,600,159 | ||||||||
Service | 75,796 | 74,527 | 306,185 | 309,099 | ||||||||||||
Net revenue | 506,259 | 445,090 | 2,030,647 | 1,909,258 | ||||||||||||
Delivery and subcontract revenue | 50,269 | 45,940 | 191,493 | 191,744 | ||||||||||||
Total revenue | 556,528 | 491,030 | 2,222,140 | 2,101,002 | ||||||||||||
Cost of revenue (excluding items shown separately below): | ||||||||||||||||
Product | 269,960 | 244,378 | 1,116,662 | 1,058,544 | ||||||||||||
Service | 50,627 | 54,865 | 218,177 | 225,491 | ||||||||||||
Net cost of revenue | 320,587 | 299,243 | 1,334,839 | 1,284,035 | ||||||||||||
Delivery and subcontract cost | 50,269 | 45,940 | 191,493 | 191,744 | ||||||||||||
Total cost of revenue | 370,856 | 345,183 | 1,526,332 | 1,475,779 | ||||||||||||
General and administrative expenses | 72,011 | 62,634 | 262,926 | 253,609 | ||||||||||||
Depreciation, depletion, amortization and accretion | 52,962 | 54,247 | 217,102 | 204,910 | ||||||||||||
Transaction costs | 773 | 421 | 2,222 | 4,238 | ||||||||||||
Operating income | 59,926 | 28,545 | 213,558 | 162,466 | ||||||||||||
Interest expense | 28,086 | 29,932 | 116,509 | 116,548 | ||||||||||||
Loss on debt financings | — | — | 14,565 | 149 | ||||||||||||
Tax receivable agreement expense (benefit) | 16,237 | (22,684 | ) | 16,237 | (22,684 | ) | ||||||||||
Gain on sale of business | — | — | — | (12,108 | ) | |||||||||||
Other income, net | (3,623 | ) | (3,574 | ) | (11,977 | ) | (15,516 | ) | ||||||||
Income from operations before taxes | 19,226 | 24,871 | 78,224 | 96,077 | ||||||||||||
Income tax (benefit) expense | (17,171 | ) | 43,498 | 17,101 | 59,747 | |||||||||||
Net income (loss) | 36,397 | (18,627 | ) | 61,123 | 36,330 | |||||||||||
Net income attributable to Summit Holdings (1) | 726 | 536 | 2,057 | 2,424 | ||||||||||||
Net income (loss) attributable to Summit Inc. | $ | 35,671 | $ | (19,163 | ) | $ | 59,066 | $ | 33,906 | |||||||
Earnings (Loss) per share of Class A common stock: | ||||||||||||||||
Basic | $ | 0.32 | $ | (0.17 | ) | $ | 0.53 | $ | 0.30 | |||||||
Diluted | $ | 0.31 | $ | (0.17 | ) | $ | 0.52 | $ | 0.30 | |||||||
Weighted average shares of Class A common stock: | ||||||||||||||||
Basic | 112,755,444 | 111,656,069 | 112,204,067 | 111,380,175 | ||||||||||||
Diluted | 114,036,924 | 111,656,069 | 112,684,718 | 112,316,646 | ||||||||||||
________________________________________________________
(1) Represents portion of business owned by pre-IPO investors rather than by Summit.
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SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
($ in thousands, except share and per share amounts)
December 28, | December 29, | |||||||
2019 | 2018 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 311,319 | $ | 128,508 | ||||
Accounts receivable, net | 253,256 | 214,518 | ||||||
Costs and estimated earnings in excess of billings | 13,088 | 18,602 | ||||||
Inventories | 204,787 | 213,851 | ||||||
Other current assets | 13,831 | 16,061 | ||||||
Total current assets | 796,281 | 591,540 | ||||||
Property, plant and equipment | 1,747,449 | 1,780,132 | ||||||
Goodwill | 1,199,699 | 1,192,028 | ||||||
Intangible assets | 23,498 | 18,460 | ||||||
Deferred tax assets | 212,333 | 225,397 | ||||||
Operating lease right-of-use assets | 32,777 | — | ||||||
Other assets | 55,519 | 50,084 | ||||||
Total assets | $ | 4,067,556 | $ | 3,857,641 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Current portion of debt | $ | 7,942 | $ | 6,354 | ||||
Current portion of acquisition-related liabilities | 32,700 | 34,270 | ||||||
Accounts payable | 116,359 | 107,702 | ||||||
Accrued expenses | 120,005 | 100,491 | ||||||
Current operating lease liabilities | 8,427 | — | ||||||
Billings in excess of costs and estimated earnings | 13,864 | 11,840 | ||||||
Total current liabilities | 299,297 | 260,657 | ||||||
Long-term debt | 1,851,057 | 1,807,502 | ||||||
Acquisition-related liabilities | 19,801 | 49,468 | ||||||
Tax receivable agreement liability | 326,965 | 309,674 | ||||||
Noncurrent operating lease liabilities | 25,381 | — | ||||||
Other noncurrent liabilities | 100,282 | 88,195 | ||||||
Total liabilities | 2,622,783 | 2,515,496 | ||||||
Stockholders’ equity: | ||||||||
Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 113,309,385 and 111,658,927 shares issued and outstanding as of December 28, 2019 and December 29, 2018, respectively | 1,134 | 1,117 | ||||||
Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of December 28, 2019 and December 29, 2018 | — | — | ||||||
Additional paid-in capital | 1,234,020 | 1,194,204 | ||||||
Accumulated earnings | 188,805 | 129,739 | ||||||
Accumulated other comprehensive income | 3,448 | 2,681 | ||||||
Stockholders’ equity | 1,427,407 | 1,327,741 | ||||||
Noncontrolling interest in Summit Holdings | 17,366 | 14,404 | ||||||
Total stockholders’ equity | 1,444,773 | 1,342,145 | ||||||
Total liabilities and stockholders’ equity | $ | 4,067,556 | $ | 3,857,641 | ||||
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SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in thousands)
Year ended | ||||||||
December 28, | December 29, | |||||||
2019 | 2018 | |||||||
Cash flow from operating activities: | ||||||||
Net income | $ | 61,123 | $ | 36,330 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation, depletion, amortization and accretion | 222,862 | 208,772 | ||||||
Share-based compensation expense | 20,403 | 25,378 | ||||||
Net gain on asset disposals | (10,294 | ) | (30,093 | ) | ||||
Non-cash loss on debt financings | 2,850 | — | ||||||
Change in deferred tax asset, net | 16,012 | 57,490 | ||||||
Other | (2,135 | ) | 2,018 | |||||
(Increase) decrease in operating assets, net of acquisitions and dispositions: | ||||||||
Accounts receivable, net | (37,049 | ) | (5,796 | ) | ||||
Inventories | 8,582 | (11,598 | ) | |||||
Costs and estimated earnings in excess of billings | 5,558 | (8,702 | ) | |||||
Other current assets | 5,465 | (7,159 | ) | |||||
Other assets | 5,085 | (106 | ) | |||||
(Decrease) increase in operating liabilities, net of acquisitions and dispositions: | ||||||||
Accounts payable | 18,903 | (13,403 | ) | |||||
Accrued expenses | 7,640 | (16,544 | ) | |||||
Billings in excess of costs and estimated earnings | 1,988 | (5,052 | ) | |||||
Tax receivable agreement liability | 17,291 | (21,666 | ) | |||||
Other liabilities | (7,100 | ) | (501 | ) | ||||
Net cash provided by operating activities | 337,184 | 209,368 | ||||||
Cash flow from investing activities: | ||||||||
Acquisitions, net of cash acquired | (5,392 | ) | (246,017 | ) | ||||
Purchases of property, plant and equipment | (177,495 | ) | (220,685 | ) | ||||
Proceeds from the sale of property, plant and equipment | 21,173 | 21,635 | ||||||
Proceeds from sale of business | — | 21,564 | ||||||
Other | (1,095 | ) | 3,804 | |||||
Net cash used for investing activities | (162,809 | ) | (419,699 | ) | ||||
Cash flow from financing activities: | ||||||||
Proceeds from debt issuances | 300,000 | 64,500 | ||||||
Debt issuance costs | (6,312 | ) | (550 | ) | ||||
Payments on debt | (270,229 | ) | (85,042 | ) | ||||
Payments on acquisition-related liabilities | (33,883 | ) | (36,504 | ) | ||||
Distributions from partnership | — | (69 | ) | |||||
Proceeds from stock option exercises | 19,076 | 15,615 | ||||||
Other | (502 | ) | (1,943 | ) | ||||
Net cash provided by (used in) financing activities | 8,150 | (43,993 | ) | |||||
Impact of foreign currency on cash | 286 | (724 | ) | |||||
Net increase (decrease) in cash | 182,811 | (255,048 | ) | |||||
Cash and cash equivalents—beginning of period | 128,508 | 383,556 | ||||||
Cash and cash equivalents—end of period | $ | 311,319 | $ | 128,508 | ||||
9
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Revenue Data by Segment and Line of Business
($ in thousands)
Three months ended | Year ended | |||||||||||||||
December 28, | December 29, | December 28, | December 29, | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Segment Net Revenue: | ||||||||||||||||
West | $ | 249,694 | $ | 219,180 | $ | 1,022,730 | $ | 1,011,155 | ||||||||
East | 186,705 | 158,485 | 717,213 | 617,314 | ||||||||||||
Cement | 69,860 | 67,425 | 290,704 | 280,789 | ||||||||||||
Net Revenue | $ | 506,259 | $ | 445,090 | $ | 2,030,647 | $ | 1,909,258 | ||||||||
Line of Business - Net Revenue: | ||||||||||||||||
Materials | ||||||||||||||||
Aggregates | $ | 115,620 | $ | 93,063 | $ | 469,670 | $ | 373,824 | ||||||||
Cement (1) | 63,455 | 61,437 | 266,235 | 258,876 | ||||||||||||
Products | 251,388 | 216,063 | 988,557 | 967,459 | ||||||||||||
Total Materials and Products | 430,463 | 370,563 | 1,724,462 | 1,600,159 | ||||||||||||
Services | 75,796 | 74,527 | 306,185 | 309,099 | ||||||||||||
Net Revenue | $ | 506,259 | $ | 445,090 | $ | 2,030,647 | $ | 1,909,258 | ||||||||
Line of Business - Net Cost of Revenue: | ||||||||||||||||
Materials | ||||||||||||||||
Aggregates | $ | 44,026 | $ | 42,091 | $ | 186,724 | $ | 151,838 | ||||||||
Cement | 31,726 | 30,156 | 149,149 | 134,597 | ||||||||||||
Products | 191,247 | 169,457 | 770,533 | 763,319 | ||||||||||||
Total Materials and Products | 266,999 | 241,704 | 1,106,406 | 1,049,754 | ||||||||||||
Services | 53,588 | 57,539 | 228,433 | 234,281 | ||||||||||||
Net Cost of Revenue | $ | 320,587 | $ | 299,243 | $ | 1,334,839 | $ | 1,284,035 | ||||||||
Line of Business - Adjusted Cash Gross Profit (2): | ||||||||||||||||
Materials | ||||||||||||||||
Aggregates | $ | 71,594 | $ | 50,972 | $ | 282,946 | $ | 221,986 | ||||||||
Cement (3) | 31,729 | 31,281 | 117,086 | 124,279 | ||||||||||||
Products | 60,141 | 46,606 | 218,024 | 204,140 | ||||||||||||
Total Materials and Products | 163,464 | 128,859 | 618,056 | 550,405 | ||||||||||||
Services | 22,208 | 16,988 | 77,752 | 74,818 | ||||||||||||
Adjusted Cash Gross Profit | $ | 185,672 | $ | 145,847 | $ | 695,808 | $ | 625,223 | ||||||||
Adjusted Cash Gross Profit Margin (2) | ||||||||||||||||
Materials | ||||||||||||||||
Aggregates | 61.9 | % | 54.8 | % | 60.2 | % | 59.4 | % | ||||||||
Cement (3) | 45.4 | % | 46.4 | % | 40.3 | % | 44.3 | % | ||||||||
Products | 23.9 | % | 21.6 | % | 22.1 | % | 21.1 | % | ||||||||
Services | 29.3 | % | 22.8 | % | 25.4 | % | 24.2 | % | ||||||||
Total Adjusted Cash Gross Profit Margin | 36.7 | % | 32.8 | % | 34.3 | % | 32.7 | % | ||||||||
________________________________________________________
(1) Net revenue for the cement line of business excludes revenue associated with hazardous and non-hazardous waste, which is processed into fuel and used in the cement plants and is included in services net revenue. Additionally, net revenue from cement swaps and other cement-related products are included in products net revenue.
(2) Adjusted cash gross profit is calculated as net revenue by line of business less net cost of revenue by line of business. Adjusted cash gross profit margin is defined as adjusted cash gross profit divided by net revenue.
(3) The cement adjusted cash gross profit includes the earnings from the waste processing operations, cement swaps and other products. Cement line of business adjusted cash gross profit margin is defined as cement adjusted cash gross profit divided by cement segment net revenue.
10
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Volume and Price Statistics
(Units in thousands)
Three months ended | Year ended | |||||||||||||||
Total Volume | December 28, 2019 | December 29, 2018 | December 28, 2019 | December 29, 2018 | ||||||||||||
Aggregates (tons) | 13,325 | 11,543 | 53,954 | 47,624 | ||||||||||||
Cement (tons) | 574 | 559 | 2,395 | 2,329 | ||||||||||||
Ready-mix concrete (cubic yards) | 1,431 | 1,269 | 5,466 | 5,433 | ||||||||||||
Asphalt (tons) | 1,288 | 1,231 | 5,568 | 5,404 | ||||||||||||
Three months ended | Year ended | |||||||||||||||
Pricing | December 28, 2019 | December 29, 2018 | December 28, 2019 | December 29, 2018 | ||||||||||||
Aggregates (per ton) | $ | 10.95 | $ | 10.50 | $ | 10.99 | $ | 10.27 | ||||||||
Cement (per ton) | 115.27 | 112.40 | 115.03 | 113.14 | ||||||||||||
Ready-mix concrete (per cubic yards) | 114.21 | 107.34 | 111.27 | 107.61 | ||||||||||||
Asphalt (per ton) | 58.73 | 56.32 | 58.93 | 55.57 | ||||||||||||
Three months ended | Year ended | |||||||||||||||
Percentage Change in | Percentage Change in | |||||||||||||||
Year over Year Comparison | Volume | Pricing | Volume | Pricing | ||||||||||||
Aggregates (per ton) | 15.4 | % | 4.3 | % | 13.3 | % | 7.0 | % | ||||||||
Cement (per ton) | 2.7 | % | 2.6 | % | 2.8 | % | 1.7 | % | ||||||||
Ready-mix concrete (per cubic yards) | 12.8 | % | 6.4 | % | 0.6 | % | 3.4 | % | ||||||||
Asphalt (per ton) | 4.6 | % | 4.3 | % | 3.0 | % | 6.0 | % | ||||||||
Three months ended | Year ended | |||||||||||||||
Percentage Change in | Percentage Change in | |||||||||||||||
Year over Year Comparison (Excluding acquisitions) | Volume | Pricing | Volume | Pricing | ||||||||||||
Aggregates (per ton) | 15.4 | % | 4.3 | % | 9.5 | % | 6.5 | % | ||||||||
Cement (per ton) | 2.7 | % | 2.6 | % | 2.8 | % | 1.7 | % | ||||||||
Ready-mix concrete (per cubic yards) | 12.6 | % | 6.5 | % | 0.1 | % | 3.3 | % | ||||||||
Asphalt (per ton) | 4.6 | % | 4.3 | % | 2.6 | % | 6.2 | % | ||||||||
11
SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Reconciliations of Gross Revenue to Net Revenue by Line of Business
($ and Units in thousands, except pricing information)
Three months ended December 28, 2019 | |||||||||||||||||||
Gross Revenue | Intercompany | Net | |||||||||||||||||
Volumes | Pricing | by Product | Elimination/Delivery | Revenue | |||||||||||||||
Aggregates | 13,325 | $ | 10.95 | $ | 145,868 | $ | (30,248 | ) | $ | 115,620 | |||||||||
Cement | 574 | 115.27 | 66,196 | (2,741 | ) | 63,455 | |||||||||||||
Materials | $ | 212,064 | $ | (32,989 | ) | $ | 179,075 | ||||||||||||
Ready-mix concrete | 1,431 | 114.21 | 163,466 | (102 | ) | 163,364 | |||||||||||||
Asphalt | 1,288 | 58.73 | 75,654 | (68 | ) | 75,586 | |||||||||||||
Other Products | 91,295 | (78,857 | ) | 12,438 | |||||||||||||||
Products | $ | 330,415 | $ | (79,027 | ) | $ | 251,388 | ||||||||||||
Year ended December 28, 2019 | |||||||||||||||||||
Gross Revenue | Intercompany | Net | |||||||||||||||||
Volumes | Pricing | by Product | Elimination/Delivery | Revenue | |||||||||||||||
Aggregates | 53,954 | $ | 10.99 | $ | 593,027 | $ | (123,357 | ) | $ | 469,670 | |||||||||
Cement | 2,395 | 115.03 | 275,530 | (9,295 | ) | 266,235 | |||||||||||||
Materials | $ | 868,557 | $ | (132,652 | ) | $ | 735,905 | ||||||||||||
Ready-mix concrete | 5,466 | 111.27 | 608,168 | (546 | ) | 607,622 | |||||||||||||
Asphalt | 5,568 | 58.93 | 328,165 | (213 | ) | 327,952 | |||||||||||||
Other Products | 377,900 | (324,917 | ) | 52,983 | |||||||||||||||
Products | $ | 1,314,233 | $ | (325,676 | ) | $ | 988,557 | ||||||||||||
12
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 months and years ended December 28, 2019 and December 29, 2018.
Reconciliation of Net Income (Loss) to Adjusted EBITDA | Three months ended December 28, 2019 | |||||||||||||||||||
by Segment | West | East | Cement | Corporate | Consolidated | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Net income (loss) | $ | 30,735 | $ | 32,859 | $ | 23,828 | $ | (51,025 | ) | $ | 36,397 | |||||||||
Interest expense (income) | (171 | ) | (463 | ) | (3,094 | ) | 31,814 | 28,086 | ||||||||||||
Income tax expense | 440 | (411 | ) | — | (17,200 | ) | (17,171 | ) | ||||||||||||
Depreciation, depletion and amortization | 22,986 | 21,411 | 7,061 | 1,011 | 52,469 | |||||||||||||||
EBITDA | $ | 53,990 | $ | 53,396 | $ | 27,795 | $ | (35,400 | ) | $ | 99,781 | |||||||||
Accretion | 114 | 273 | 106 | — | 493 | |||||||||||||||
Tax receivable agreement expense | — | — | — | 16,237 | 16,237 | |||||||||||||||
Transaction costs | 84 | — | — | 689 | 773 | |||||||||||||||
Non-cash compensation | — | — | — | 4,979 | 4,979 | |||||||||||||||
Other | (278 | ) | (523 | ) | — | (371 | ) | (1,172 | ) | |||||||||||
Adjusted EBITDA (1) | $ | 53,910 | $ | 53,146 | $ | 27,901 | $ | (13,866 | ) | $ | 121,091 | |||||||||
Adjusted EBITDA Margin (1) | 21.6 | % | 28.5 | % | 39.9 | % | 23.9 | % | ||||||||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA | Three months ended December 29, 2018 | |||||||||||||||||||
by Segment | West | East | Cement | Corporate | Consolidated | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Net income (loss) | $ | 11,738 | $ | 16,451 | $ | 21,461 | $ | (68,277 | ) | $ | (18,627 | ) | ||||||||
Interest expense (income) | 950 | 1,094 | (2,021 | ) | 29,909 | 29,932 | ||||||||||||||
Income tax (benefit) expense | (81 | ) | 27 | — | 43,552 | 43,498 | ||||||||||||||
Depreciation, depletion and amortization | 23,627 | 20,191 | 9,345 | 703 | 53,866 | |||||||||||||||
EBITDA | $ | 36,234 | $ | 37,763 | $ | 28,785 | $ | 5,887 | $ | 108,669 | ||||||||||
Accretion | 138 | 260 | (17 | ) | — | 381 | ||||||||||||||
Tax receivable agreement benefit | — | — | — | (22,684 | ) | (22,684 | ) | |||||||||||||
Transaction costs | 1 | — | — | 420 | 421 | |||||||||||||||
Non-cash compensation | — | — | — | 5,545 | 5,545 | |||||||||||||||
Other | 1,310 | (488 | ) | — | 247 | 1,069 | ||||||||||||||
Adjusted EBITDA (1) | $ | 37,683 | $ | 37,535 | $ | 28,768 | $ | (10,585 | ) | $ | 93,401 | |||||||||
Adjusted EBITDA Margin (1) | 17.2 | % | 23.7 | % | 42.7 | % | 21.0 | % | ||||||||||||
13
Reconciliation of Net Income (Loss) to Adjusted EBITDA | Year ended December 28, 2019 | |||||||||||||||||||
by Segment | West | East | Cement | Corporate | Consolidated | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Net income (loss) | $ | 108,751 | $ | 106,307 | $ | 75,480 | $ | (229,415 | ) | $ | 61,123 | |||||||||
Interest expense (income) | 1,734 | 1,774 | (10,489 | ) | 123,490 | 116,509 | ||||||||||||||
Income tax expense (benefit) | 1,918 | (267 | ) | — | 15,450 | 17,101 | ||||||||||||||
Depreciation, depletion and amortization | 92,737 | 80,262 | 37,891 | 3,996 | 214,886 | |||||||||||||||
EBITDA | $ | 205,140 | $ | 188,076 | $ | 102,882 | $ | (86,479 | ) | $ | 409,619 | |||||||||
Accretion | 519 | 1,141 | 556 | — | 2,216 | |||||||||||||||
Loss on debt financings | — | — | — | 14,565 | 14,565 | |||||||||||||||
Tax receivable agreement expense | — | — | — | 16,237 | 16,237 | |||||||||||||||
Transaction costs | 96 | — | — | 2,126 | 2,222 | |||||||||||||||
Non-cash compensation | — | — | — | 20,403 | 20,403 | |||||||||||||||
Other (2) | (791 | ) | (1,592 | ) | — | (1,417 | ) | (3,800 | ) | |||||||||||
Adjusted EBITDA | $ | 204,964 | $ | 187,625 | $ | 103,438 | $ | (34,565 | ) | $ | 461,462 | |||||||||
Adjusted EBITDA Margin (1) | 20.0 | % | 26.2 | % | 35.6 | % | 22.7 | % | ||||||||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA | Year ended December 29, 2018 | |||||||||||||||||||
by Segment | West | East | Cement | Corporate | Consolidated | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Net income (loss) | $ | 109,363 | $ | 58,579 | $ | 83,148 | $ | (214,760 | ) | $ | 36,330 | |||||||||
Interest expense (income) | 5,064 | 3,491 | (6,815 | ) | 114,808 | 116,548 | ||||||||||||||
Income tax expense | 535 | 32 | — | 59,180 | 59,747 | |||||||||||||||
Depreciation, depletion and amortization | 91,224 | 74,463 | 34,996 | 2,622 | 203,305 | |||||||||||||||
EBITDA | $ | 206,186 | $ | 136,565 | $ | 111,329 | $ | (38,150 | ) | $ | 415,930 | |||||||||
Accretion | 570 | 970 | 65 | — | 1,605 | |||||||||||||||
Loss on debt financings | — | — | — | 149 | 149 | |||||||||||||||
Tax receivable agreement benefit | — | — | — | (22,684 | ) | (22,684 | ) | |||||||||||||
Gain on sale of business | (12,108 | ) | — | — | — | (12,108 | ) | |||||||||||||
Transaction costs | (3 | ) | — | — | 4,241 | 4,238 | ||||||||||||||
Non-cash compensation | — | — | — | 25,378 | 25,378 | |||||||||||||||
Other (2) | (5,646 | ) | 497 | — | (1,098 | ) | (6,247 | ) | ||||||||||||
Adjusted EBITDA | $ | 188,999 | $ | 138,032 | $ | 111,394 | $ | (32,164 | ) | $ | 406,261 | |||||||||
Adjusted EBITDA Margin (1) | 18.7 | % | 22.4 | % | 39.7 | % | 21.3 | % | ||||||||||||
_______________________________________________________
(1) Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of net revenue.
(2) In the year ended December 28, 2019, we negotiated a $2.0 million reduction in the amount of a contingent liability from one of our acquisitions. In the year ended December 29, 2018, we negotiated a $6.9 million reduction in the amount of a contingent liability from one of our acquisitions. As we had passed the period to revise the opening balance sheet for this acquisition, the adjustment was recorded in the respective period as other income.
14
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 months and years ended December 28, 2019 and December 29, 2018. The per share amount of the net income (loss) attributable to Summit Materials, Inc. presented in the table is calculated using the total equity interests for the purpose of reconciling to adjusted diluted net income (loss) per share.
Three months ended | Year ended | |||||||||||||||||||||||||||||||
December 28, 2019 | December 29, 2018 | December 28, 2019 | December 29, 2018 | |||||||||||||||||||||||||||||
Reconciliation of Net Income (Loss) Per Share to Adjusted Diluted EPS | Net Income | Per Equity Unit | Net Loss | Per Equity Unit | Net Income | Per Equity Unit | Net Income | Per Equity Unit | ||||||||||||||||||||||||
Net income (loss) attributable to Summit Materials, Inc. | $ | 35,671 | $ | 0.31 | $ | (19,163 | ) | $ | (0.17 | ) | $ | 59,066 | $ | 0.51 | $ | 33,906 | $ | 0.30 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | 726 | 0.01 | 536 | 0.01 | 2,057 | 0.02 | 2,424 | 0.02 | ||||||||||||||||||||||||
Adjustment to acquisition deferred liability | — | — | — | — | (2,000 | ) | (0.02 | ) | (6,947 | ) | (0.06 | ) | ||||||||||||||||||||
Gain on sale of business | — | — | — | — | — | — | (12,108 | ) | (0.11 | ) | ||||||||||||||||||||||
Loss on debt financings | — | — | — | — | 14,565 | 0.13 | 149 | — | ||||||||||||||||||||||||
Adjusted diluted net (loss) income before tax related adjustments | 36,397 | 0.32 | (18,627 | ) | (0.16 | ) | 73,688 | 0.64 | 17,424 | 0.15 | ||||||||||||||||||||||
Tax receivable agreement (benefit) expense | 16,237 | 0.14 | (22,684 | ) | (0.20 | ) | 16,237 | 0.14 | (22,684 | ) | (0.20 | ) | ||||||||||||||||||||
Unrecognized tax benefits | 18,885 | 0.16 | 22,663 | 0.20 | 18,885 | 0.16 | 22,663 | 0.20 | ||||||||||||||||||||||||
Adjusted diluted net income (loss) | $ | 71,519 | $ | 0.62 | $ | (18,648 | ) | $ | (0.16 | ) | $ | 108,810 | $ | 0.94 | $ | 17,403 | $ | 0.15 | ||||||||||||||
Weighted-average shares: | ||||||||||||||||||||||||||||||||
Basic Class A common stock | 112,755,444 | 111,656,069 | 112,204,067 | 111,380,175 | ||||||||||||||||||||||||||||
LP Units outstanding | 3,278,133 | 3,435,518 | 3,372,707 | 3,512,669 | ||||||||||||||||||||||||||||
Total equity units | 116,033,577 | 115,091,587 | 115,576,774 | 114,892,844 | ||||||||||||||||||||||||||||
The following table reconciles operating income to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the three months and years ended December 28, 2019 and December 29, 2018.
Three months ended | Year ended | |||||||||||||||
December 28, | December 29, | December 28, | December 29, | |||||||||||||
Reconciliation of Operating Income to Adjusted Cash Gross Profit | 2019 | 2018 | 2019 | 2018 | ||||||||||||
($ in thousands) | ||||||||||||||||
Operating income | $ | 59,926 | $ | 28,545 | $ | 213,558 | $ | 162,466 | ||||||||
General and administrative expenses | 72,011 | 62,634 | 262,926 | 253,609 | ||||||||||||
Depreciation, depletion, amortization and accretion | 52,962 | 54,247 | 217,102 | 204,910 | ||||||||||||
Transaction costs | 773 | 421 | 2,222 | 4,238 | ||||||||||||
Adjusted Cash Gross Profit (exclusive of items shown separately) | $ | 185,672 | $ | 145,847 | $ | 695,808 | $ | 625,223 | ||||||||
Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1) | 36.7 | % | 32.8 | % | 34.3 | % | 32.7 | % | ||||||||
_______________________________________________________
(1) Adjusted Cash Gross Profit Margin is defined as Adjusted Cash Gross Profit as a percentage of net revenue.
15
The following table reconciles net cash provided by operating activities to free cash flow for the three months and years ended December 28, 2019 and December 29, 2018.
Three months ended | Year ended | |||||||||||||||
December 28, | December 29, | December 28, | December 29, | |||||||||||||
($ in thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) | $ | 36,397 | $ | (18,627 | ) | $ | 61,123 | $ | 36,330 | |||||||
Non-cash items | 41,330 | 104,714 | 249,698 | 263,565 | ||||||||||||
Net income (loss) adjusted for non-cash items | 77,727 | 86,087 | 310,821 | 299,895 | ||||||||||||
Change in working capital accounts | 95,614 | 52,724 | 26,363 | (90,527 | ) | |||||||||||
Net cash provided by operating activities | 173,341 | 138,811 | 337,184 | 209,368 | ||||||||||||
Capital expenditures, net of asset sales | (29,595 | ) | (33,724 | ) | (156,322 | ) | (199,050 | ) | ||||||||
Free cash flow | $ | 143,746 | $ | 105,087 | $ | 180,862 | $ | 10,318 | ||||||||
Contact:
Karli Anderson
Vice President, Investor Relations
karli.anderson@summit-materials.com
303-515-5152
16