EX-99.1 2 a8kexhibit991-q32021.htm EX-99.1 Document

Exhibit 99.1
 
Summit Materials, Inc. Reports Third Quarter 2021 Results
- Third Quarter Net Revenue of $662.3 million, an increase of 2.6%
-Net income attributable to Summit Inc. of $74.2 million
-Third Quarter Adjusted EBITDA of $190.3 million
-Aggregates volumes increased 9.2%
-Cement volumes increased 2.0%

DENVER, CO. - (November 3, 2021) - Summit Materials, Inc. (NYSE: SUM, “Summit,” “Summit Materials,” "Summit Inc." or the “Company”), a leading vertically integrated construction materials company, today announced results for the third quarter 2021.

For the three months ended October 2, 2021, the Company reported net income attributable to Summit Inc. of $74.2 million, or $0.63 per basic share, compared to net income attributable to Summit Inc. of $90.7 million, or $0.79 per basic share in the comparable prior year period. The 18.2% decrease in net income included the reversal of an unrecognized tax benefit in 2020. Summit reported adjusted diluted net income of $81.5 million, or $0.68 per adjusted diluted share as compared to adjusted diluted net income of $63.9 million, or $0.55 per adjusted diluted share in the prior year period.

Summit's net revenue increased $17.0 million, or 2.6% in the third quarter of 2021 to $662.3 million, compared to $645.2 million in the third quarter of 2020, on higher aggregates, ready-mix concrete and cement revenue relative to a year ago on continued favorable market demand conditions and price growth in all lines of business.

The Company reported operating income of $125.0 million in the third quarter 2021, an increase of 24.3%, compared to $100.6 million in the prior year period, primarily due to higher revenue. General and administrative expenses also decreased by $3.6 million in the current period relative to third quarter 2020, when the Company incurred CEO transition costs. Summit's operating margin percentage for the three months ended October 2, 2021 increased to 18.9% from 15.6%, from the comparable period a year ago, due to the factors noted above.

Adjusted EBITDA increased in the third quarter 2021 to $190.3 million as compared to $177.3 million in the third quarter 2020.

For the three months ended October 2, 2021, sales volumes increased 9.2% in aggregates and 2.0% in cement relative to the same period last year on strong demand in most of our markets. Average selling prices in the third quarter of 2021 increased 3.9% in aggregates, 4.4% in cement, 3.7% in ready-mix concrete and 1.7% in asphalt. Adjusted cash gross profit for aggregates expanded to $96.7 million in the third quarter 2021, an increase of 26.1% relative to $76.7 million in the year ago quarter.

Anne Noonan, CEO of Summit Materials, commented, "The Market Leadership theme in our Elevate Summit strategy is beginning to be reflected in our results. Today we are reporting third quarter Adjusted EBITDA growth of 7.3% versus Q3 2020. Organic volume and pricing growth was reflected in expanded adjusted cash gross profit margin in aggregates, cement and services. Our Q3 Adjusted EBITDA margin increased 120 basis points from the year ago quarter, contributing towards our Elevate Summit 30% Adjusted EBITDA margin goal, which is measured over the trailing 12 months.

Summit is currently progressing several strategic divestitures in addition to the five divestitures that were already completed in the first half of 2021. We believe Summit's organic growth profile and asset light conversion model position the Company to absorb the impact of the foregone contribution from those divested businesses. When comparing 2020 to 2021, it’s also important to understand that 2020 included 53 reporting weeks, while 2021 is a standard 52-week reporting year. In consideration of factors such as those, we are leaving our full year 2021 Adjusted EBITDA guidance unchanged."

On September 27, 2021, Summit redeemed all $300.0 million of the 5.125% senior notes due June 1, 2025 using existing cash on hand. As a result of the redemption, charges of $6.0 million were recognized in the quarter ended October 2, 2021, which included charges of $3.9 million for the applicable redemption premium and $2.1 million for the write-off of the deferred financing fees.

As of October 2, 2021, the Company had $258.1 million in cash and $1.6 billion in debt outstanding. The Company's $345 million revolving credit facility has $329.1 million available after outstanding letters of credit. For the quarter ended October 2, 2021, cash flow provided by operations was $207.4 million and cash paid for capital expenditures was $170.1 million.

Brian Harris, CFO of Summit Materials added, "Just a few months after the announcement of our Elevate Strategy, we have achieved our Elevate Summit leverage reduction goal of less than 3.0x, and we believe further improvements are possible with steady execution of our strategy."

For the full year 2021, Summit has not made any changes to its outlook for Adjusted EBITDA of approximately $490 million to $520 million, The Company continues to expect 2021 capital expenditure guidance of approximately $200 million to $220 million including approximately $25 million to $35 million for greenfield projects.




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Third Quarter 2021 | Results by Line of Business
Aggregates Business: Aggregates net revenues increased by $23.9 million to $160.3 million in the third quarter 2021 when compared to the prior year period. Aggregates adjusted cash gross profit margin increased to 60.3% in the third quarter 2021 as compared to 56.2% in the third quarter 2020. Aggregates sales volumes increased 9.2% in the third quarter 2021 when compared to the prior year period on organic growth in both the West and East segments. Volume increased in the Intermountain West, North Kansas, Virginia and British Columbia markets. Average selling prices for aggregates increased 3.9% in the third quarter 2021.

Cement Business: Cement segment net revenues increased 9.0% to $92.5 million in the third quarter 2021, when compared to the prior year period, on higher sales volume of cement. Cement adjusted cash gross profit margin increased to 47.4% in the third quarter, compared to 45.1% in the prior year period. Our Green America Recycling facility continues to ramp up production following an explosion that occurred in April 2020. Sales volume of cement increased 2.0% in the third quarter and average selling prices increased 4.4% when compared to the prior year period.
 
Products Business: Products net revenues were $314.0 million in the third quarter 2021, compared to $321.8 million in the prior year period. Products adjusted cash gross profit margin decreased to 21.0% in the third quarter, versus 21.8% in the prior year period. Our organic average sales price for ready-mix concrete increased 3.7% and organic sales volumes of ready-mix concrete decreased 1.4%, due mostly to wet conditions in Texas in the third quarter of 2021 that resulted in operational inefficiencies. Our organic average sales price for asphalt increased 1.7%, with pricing improvements in Kentucky and British Columbia, while volume decreased 11.2% due to a divestiture of a paving business.

Third Quarter 2021 | Results By Reporting Segment
Net revenue increased by 2.6% to $662.3 million in the third quarter 2021, versus $645.2 million in the prior year period on growth in our aggregates, cement, and ready-mix concrete operations. The Company reported operating income of $125.0 million in the third quarter 2021, compared to $100.6 million in the prior year period due to favorable volume and price trends in most lines of business in addition to lower general and administrative costs.

Net income decreased 18.7% to $75.4 million in the third quarter of 2021, compared to income of $92.8 million in the prior year period, which included the reversal of an unrecognized tax benefit. Adjusted EBITDA increased 7.3% to $190.3 million in the third quarter of 2021, compared to $177.3 million in the prior year period on higher revenue.
 
West Segment: The West Segment reported operating income of $67.4 million in the third quarter 2021, compared to $72.3 million in the prior year period. Adjusted EBITDA was $92.3 million in the third quarter 2021, compared to $95.5 million in the prior year period. The decreases in operating income and Adjusted EBITDA for the third quarter of 2021 occurred as the weather conditions in 2021 in Texas were less favorable as compared to the 2020 period, resulting in operational inefficiencies. Aggregates revenue in the third quarter increased 11.9% over the prior year period, while organic volumes and organic average sales prices increased 3.8% and 2.8%, respectively. Ready-mix concrete revenue in the third quarter 2021 increased 4.2% over the prior year period, as organic volumes increased 0.7% and organic average sales prices increased 3.4%, reflecting favorable market conditions for residential construction. Asphalt revenue decreased by 25.6% in the third quarter 2021 over the prior year period as asphalt volumes decreased 23.1%, due to a divestiture in the second quarter 2021, while sales prices increased 1.8%.

East Segment: The East Segment reported operating income of $45.0 million in the third quarter 2021, compared to $29.3 million in the prior year period as net revenue increases in aggregates, asphalt and paving and related services exceeded a decrease in ready-mix concrete. Adjusted EBITDA increased to $69.1 million in the third quarter 2021, compared to $56.9 million in the prior year period. Aggregates revenue increased 15.0%, as volumes increased 8.9% and average selling prices increased 5.5%. Ready-mix concrete revenue decreased 3.4% as organic volumes decreased by 7.5%, partially offset by organic average selling prices which increased 4.3%, primarily due to lower volumes in Kansas as wind farm projects in the 2020 period were not fully replaced in 2021. Asphalt revenue increased 30.6% as organic volumes increased 18.6% on higher volumes in Kentucky, Kansas and Virginia, and organic average selling prices increased 5.4% on higher liquid asphalt index prices in most of our markets.

Cement Segment: The Cement Segment reported operating income of $30.0 million in the third quarter 2021, compared to $24.0 million in the prior year period. Adjusted EBITDA increased to $40.4 million in the third quarter 2021, compared to $35.1 million in the prior year period on higher volumes and prices. The segment reported increased organic sales volumes and organic average selling prices of 2.0% and 4.4%, respectively, during the third quarter 2021 as compared to the prior year period. Our Green America Recycling facility is now operational, but continues to ramp up production following an explosion that occurred in April 2020.
 
Liquidity and Capital Resources
As of October 2, 2021, the Company had cash on hand of $258.1 million and borrowing capacity under its $345 million revolving credit facility of $329.1 million. The borrowing capacity on the revolving credit facility is currently fully available to the Company within the terms and covenant requirements of its credit agreement. As of October 2, 2021, the Company had $1.6 billion in debt outstanding.
 


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Financial Outlook
For the full year 2021, Summit has not made any changes to its outlook for Adjusted EBITDA of approximately $490 million to $520 million. The Company continues to expect 2021 capital expenditure guidance of approximately $200 million to $220 million including approximately $25 million to $35 million for greenfield projects.

Webcast and Conference Call Information
Summit Materials will conduct a conference call on Thursday, November 4, 2021 , at 11:00 a.m. eastern time (9:00 a.m. mountain time) to review the Company’s third quarter 2021 financial results, discuss recent events and conduct a question-and-answer session.

A webcast of the conference call and accompanying presentation materials will be available in the Investors section of Summit’s website at investors.summit-materials.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.

To participate in the live teleconference for third quarter 2021 financial results:

Domestic Live: 1-877-823-8690
International Live: 1-825-312-2236
Conference ID: 3128039
Password:     Summit

To listen to a replay of the teleconference, which will be available through November 11, 2021:

Domestic Replay: 1-800-585-8367
International Replay: 1-416-621-4642
Conference ID: 3128039

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

Non-GAAP Financial Measures
The Securities and Exchange Commission (“SEC”) regulates the use of “non-GAAP financial measures,” such as Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow, Net Leverage and Net Debt which are derived on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). We have provided these measures because, among other things, we believe that they provide investors with additional information to measure our performance, evaluate our ability to service our debt and evaluate certain flexibility under our restrictive covenants. Our Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow, Net Leverage and Net Debt may vary from the use of such terms by others and should not be considered as alternatives to or more important than net income (loss), operating income (loss), revenue or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or to cash flows as measures of liquidity.

Adjusted EBITDA, Adjusted EBITDA Margin, and other non-GAAP measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of the limitations of Adjusted EBITDA are that these measures do not reflect: (i) our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) changes in, or cash requirements for, our working capital needs; (iii) interest expense or cash requirements necessary to service interest and principal payments on our debt; and (iv) income tax payments we are required to make. Because of these limitations, we rely primarily on our U.S. GAAP results and use Adjusted EBITDA, Adjusted EBITDA Margin and other non-GAAP measures on a supplemental basis.

Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Free Cash Flow, Net Leverage and Net Debt reflect additional ways of viewing aspects of our business that, when viewed with our GAAP results and the accompanying reconciliations to U.S. GAAP financial measures included in the tables attached to this press release, may provide a more complete understanding of factors and trends affecting our business. We strongly encourage investors to review our consolidated financial statements in their entirety and not rely on
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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 January 2, 2021, as filed with the SEC, and any factors discussed in the section entitled “Risk Factors” in any of our subsequently filed SEC filings.

-
the impact of the COVID-19 pandemic, and responses to it, including vaccine mandates, or any similar crisis, on our business;
-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;
-our reliance on private investment in infrastructure, which may be adversely affected by periods of economic stagnation and recession;
-environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use;
-costs associated with pending and future litigation;
-
rising prices for, or more limited availability of, commodities, labor and other production and delivery inputs as a result of inflation, supply chain challenges or otherwise;
-conditions in the credit markets;
-our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us;
-material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications;
-cancellation of a significant number of contracts or our disqualification from bidding for new contracts;
-special hazards related to our operations that may cause personal injury or property damage not covered by insurance;
-unexpected factors affecting self-insurance claims and reserve estimates;
-our substantial current level of indebtedness, including our exposure to variable interest rate risk;
-our dependence on senior management and other key personnel, and our ability to retain and attract qualified personnel;
-supply constraints or significant price fluctuations in the electricity and petroleum-based resources that we use, including diesel and liquid asphalt;
-climate change and climate change legislation or regulations;
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-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
Unaudited Consolidated Statements of Operations
($ in thousands, except share and per share amounts)
 
 Three months endedNine months ended
 October 2,September 26,October 2,September 26,
 2021202020212020
Revenue:    
Product$561,938 $540,904 $1,443,972 $1,334,471 
Service100,321 104,342 235,298 228,421 
Net revenue662,259 645,246 1,679,270 1,562,892 
Delivery and subcontract revenue54,981 64,373 133,731 144,926 
Total revenue717,240 709,619 1,813,001 1,707,818 
Cost of revenue (excluding items shown separately below):    
Product356,214 354,250 980,045 923,384 
Service75,741 82,969 187,570 190,153 
Net cost of revenue431,955 437,219 1,167,615 1,113,537 
Delivery and subcontract cost54,981 64,373 133,731 144,926 
Total cost of revenue486,936 501,592 1,301,346 1,258,463 
General and administrative expenses47,364 50,972 146,454 132,385 
Depreciation, depletion, amortization and accretion59,082 58,054 173,651 163,760 
Gain on sale of property, plant and equipment (1,159)(1,616)(4,331)(5,747)
Operating income125,017 100,617 195,881 158,957 
Interest expense24,134 24,623 72,536 78,049 
Loss on debt financings6,016 4,064 6,016 4,064 
Loss (gain) on sale of businesses113 — (15,319)— 
Other income, net(1,137)(1,226)(10,721)(2,753)
Income from operations before taxes95,891 73,156 143,369 79,597 
Income tax expense (benefit)20,513 (19,613)33,478 (25,333)
Net income75,378 92,769 109,891 104,930 
Net income attributable to Summit Holdings (1)1,174 2,039 1,545 2,115 
Net income attributable to Summit Inc.$74,204 $90,730 $108,346 $102,815 
Earnings per share of Class A common stock:
Basic$0.63 $0.79 $0.92 $0.90 
Diluted$0.62 $0.79 $0.92 $0.90 
Weighted average shares of Class A common stock:
Basic118,473,530 114,436,907 117,258,431 114,088,447 
Diluted119,291,646 114,472,171 118,360,615 114,457,276 
________________________________________________________
(1) Represents portion of business owned by pre-IPO investors rather than by Summit.
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SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
($ in thousands, except share and per share amounts)
 October 2,January 2,
 20212021
 (unaudited)(audited)
Assets  
Current assets:  
Cash and cash equivalents$258,083 $418,181 
Accounts receivable, net333,351 254,696 
Costs and estimated earnings in excess of billings34,181 8,666 
Inventories195,312 200,308 
Other current assets13,855 11,428 
Total current assets834,782 893,279 
Property, plant and equipment, less accumulated depreciation, depletion and amortization (October 2, 2021 - $1,234,171 and January 2, 2021 - $1,132,925)1,841,139 1,850,169 
Goodwill1,174,855 1,201,291 
Intangible assets, less accumulated amortization (October 2, 2021 - $14,309 and January 2, 2021 - $11,864)70,338 47,852 
Deferred tax assets, less valuation allowance (October 2, 2021 - $1,675 and January 2, 2021 - $1,675)210,389 231,877 
Operating lease right-of-use assets27,339 28,543 
Other assets57,807 55,000 
Total assets$4,216,649 $4,308,011 
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of debt$6,354 $6,354 
Current portion of acquisition-related liabilities12,809 10,265 
Accounts payable155,919 120,813 
Accrued expenses137,378 160,570 
Current operating lease liabilities6,818 8,188 
Billings in excess of costs and estimated earnings11,631 16,499 
Total current liabilities330,909 322,689 
Long-term debt1,591,989 1,892,347 
Acquisition-related liabilities33,223 12,246 
Tax receivable agreement liability330,871 321,680 
Noncurrent operating lease liabilities21,596 21,500 
Other noncurrent liabilities136,297 121,281 
Total liabilities2,444,885 2,691,743 
Stockholders’ equity:  
Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 118,564,950 and 114,390,595 shares issued and outstanding as of October 2, 2021 and January 2, 2021, respectively1,186 1,145 
Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of October 2, 2021 and January 2, 2021— — 
Additional paid-in capital1,319,897 1,264,681 
Accumulated earnings435,118 326,772 
Accumulated other comprehensive income5,670 5,203 
Stockholders’ equity1,761,871 1,597,801 
Noncontrolling interest in Summit Holdings9,893 18,467 
Total stockholders’ equity1,771,764 1,616,268 
Total liabilities and stockholders’ equity$4,216,649 $4,308,011 

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SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
($ in thousands)
 Three months ended
 October 2,September 26,
 20212020
Cash flow from operating activities:  
Net income$109,891 $104,930 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion177,841 164,397 
Share-based compensation expense14,875 23,119 
Net gain on asset and business disposals(19,295)(5,746)
Non-cash loss on debt financings2,116 4,064 
Change in deferred tax asset, net19,814 (28,968)
Other(586)760 
Decrease (increase) in operating assets, net of acquisitions and dispositions:
Accounts receivable, net(78,108)(48,361)
Inventories(12,002)(2,829)
Costs and estimated earnings in excess of billings(26,969)(30,912)
Other current assets(2,556)(75)
Other assets6,459 8,367 
(Decrease) increase in operating liabilities, net of acquisitions and dispositions:
Accounts payable33,756 21,729 
Accrued expenses(15,598)3,164 
Billings in excess of costs and estimated earnings(2,907)395 
Tax receivable agreement liability9,191 993 
Other liabilities(8,549)3,012 
Net cash provided by operating activities207,373 218,039 
Cash flow from investing activities:
Acquisitions, net of cash acquired(7,263)(123,195)
Purchases of property, plant and equipment(170,070)(140,006)
Proceeds from the sale of property, plant and equipment8,827 8,848 
Proceeds from sale of businesses103,649 — 
Other(459)1,395 
Net cash used in investing activities(65,316)(252,958)
Cash flow from financing activities:
Proceeds from debt issuances— 700,000 
Debt issuance costs— (9,565)
Payments on debt(323,802)(666,892)
Payments on acquisition-related liabilities(9,755)(10,391)
Proceeds from stock option exercises32,416 329 
Other(951)(908)
Net cash (used in) provided by financing activities(302,092)12,573 
Impact of foreign currency on cash(63)(216)
Net decrease in cash(160,098)(22,562)
Cash and cash equivalents—beginning of period418,181 311,319 
Cash and cash equivalents—end of period$258,083 $288,757 
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SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Revenue Data by Segment and Line of Business
($ in thousands)
 Three months endedNine months ended
 October 2,September 26,October 2,September 26,
 2021202020212020
Segment Net Revenue:  
West$338,575 $351,510 $886,936 $835,026 
East231,184 208,862 573,343 529,405 
Cement92,500 84,874 218,991 198,461 
Net Revenue$662,259 $645,246 $1,679,270 $1,562,892 
Line of Business - Net Revenue:    
Materials    
Aggregates$160,317 $136,396 $431,201 $362,546 
Cement (1)87,645 82,698 207,953 188,854 
Products313,976 321,810 804,818 783,071 
Total Materials and Products561,938 540,904 1,443,972 1,334,471 
Services100,321 104,342 235,298 228,421 
Net Revenue$662,259 $645,246 $1,679,270 $1,562,892 
Line of Business - Net Cost of Revenue:    
Materials    
Aggregates$63,622 $59,704 $199,653 $174,169 
Cement43,768 44,449 122,800 115,998 
Products248,042 251,606 657,005 633,991 
Total Materials and Products355,432 355,759 979,458 924,158 
Services76,523 81,460 188,157 189,379 
Net Cost of Revenue$431,955 $437,219 $1,167,615 $1,113,537 
Line of Business - Adjusted Cash Gross Profit (2):    
Materials    
Aggregates$96,695 $76,692 $231,548 $188,377 
Cement (3)43,877 38,249 85,153 72,856 
Products65,934 70,204 147,813 149,080 
Total Materials and Products206,506 185,145 464,514 410,313 
Services23,798 22,882 47,141 39,042 
Adjusted Cash Gross Profit$230,304 $208,027 $511,655 $449,355 
Adjusted Cash Gross Profit Margin (2)    
Materials    
Aggregates60.3 %56.2 %53.7 %52.0 %
Cement (3)47.4 %45.1 %38.9 %36.7 %
Products21.0 %21.8 %18.4 %19.0 %
Services23.7 %21.9 %20.0 %17.1 %
Total Adjusted Cash Gross Profit Margin34.8 %32.2 %30.5 %28.8 %
________________________________________________________
(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.

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SUMMIT MATERIALS, INC. AND SUBSIDIARIES
Unaudited Volume and Price Statistics
(Units in thousands)
 
 Three months endedNine months ended
Total VolumeOctober 2, 2021September 26, 2020October 2, 2021September 26, 2020
Aggregates (tons)17,884 16,383 48,484 42,476 
Cement (tons)748 733 1,796 1,686 
Ready-mix concrete (cubic yards)1,509 1,531 4,381 4,217 
Asphalt (tons)1,880 2,118 3,911 4,281 
 Three months endedNine months ended
PricingOctober 2, 2021September 26, 2020October 2, 2021September 26, 2020
Aggregates (per ton)$11.32 $10.89 $11.16 $10.96 
Cement (per ton)121.26 116.17 119.76 116.22 
Ready-mix concrete (per cubic yards)121.40 117.12 119.95 115.97 
Asphalt (per ton)61.42 60.40 60.63 59.69 
Three months endedNine months ended
Percentage Change inPercentage Change in
Year over Year ComparisonVolumePricingVolumePricing
Aggregates (per ton)9.2 %3.9 %14.1 %1.8 %
Cement (per ton)2.0 %4.4 %6.5 %3.0 %
Ready-mix concrete (per cubic yards)(1.4)%3.7 %3.9 %3.4 %
Asphalt (per ton)(11.2)%1.7 %(8.6)%1.6 %
Three months endedNine months ended
Percentage Change inPercentage Change in
Year over Year Comparison (Excluding acquisitions)VolumePricingVolumePricing
Aggregates (per ton)5.6 %4.7 %5.0 %3.5 %
Cement (per ton)2.0 %4.4 %6.5 %3.0 %
Ready-mix concrete (per cubic yards)(1.4)%3.7 %3.9 %3.4 %
Asphalt (per ton)(11.2)%1.7 %(8.6)%1.6 %


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 October 2, 2021
   Gross RevenueIntercompanyNet
 VolumesPricing
by Product 
Elimination/Delivery 
Revenue 
Aggregates17,884 $11.32 $202,523 $(42,206)$160,317 
Cement748 121.26 90,648 (3,003)87,645 
Materials$293,171 $(45,209)$247,962 
Ready-mix concrete1,509 121.40 183,213 (99)183,114 
Asphalt1,880 61.42 115,471 (106)115,365 
Other Products  106,663 (91,166)15,497 
Products  $405,347 $(91,371)$313,976 

 Nine months ended October 2, 2021
   Gross RevenueIntercompanyNet
 VolumesPricing
by Product 
Elimination/Delivery 
Revenue 
Aggregates48,484 $11.16 $540,912 $(109,711)$431,201 
Cement1,796 119.76 215,024 (7,071)207,953 
Materials$755,936 $(116,782)$639,154 
Ready-mix concrete4,381 119.95 525,485 (277)525,208 
Asphalt3,911 60.63 237,138 (246)236,892 
Other Products283,804 (241,086)42,718 
Products$1,046,427 $(241,609)$804,818 
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 and nine months ended October 2, 2021 and September 26, 2020.
Reconciliation of Net Income (Loss) to Adjusted EBITDAThree months ended October 2, 2021
by SegmentWestEastCementCorporateConsolidated
($ in thousands)     
Net income (loss)$69,457$47,924$34,310$(76,313)$75,378
Interest (income) expense(2,933)(2,237)(4,359)33,66324,134
Income tax expense976119—19,41820,513
Depreciation, depletion and amortization24,57722,41210,3241,06858,381
EBITDA$92,077$68,218$40,275$(22,164)$178,406
Accretion21939785—701
Loss on debt financings———6,0166,016
(Gain) loss on sale of businesses(135)248——113
Non-cash compensation———4,6854,685
Other142221——363
Adjusted EBITDA$92,303$69,084$40,360$(11,463)$190,284
Adjusted EBITDA Margin (1)27.3 %29.9 %43.6 %28.7 %
Reconciliation of Net Income (Loss) to Adjusted EBITDAThree months ended September 26, 2020
by SegmentWestEastCementCorporateConsolidated
($ in thousands)     
Net income (loss)$72,871$31,013$27,324$(38,439)$92,769
Interest (income) expense(1,192)(649)(3,393)29,85724,623
Income tax expense (benefit)937(193)—(20,357)(19,613)
Depreciation, depletion and amortization22,97322,34611,06697957,364
EBITDA$95,589$52,517$34,997$(27,960)$155,143
Accretion14445789—690
Loss on debt financings———4,0644,064
Non-cash compensation———13,32213,322
Other(263)3,969—3774,083
Adjusted EBITDA$95,470$56,943$35,086$(10,197)$177,302
Adjusted EBITDA Margin (1)27.2 %27.3 %41.3 %27.5 %
Reconciliation of Net Income (Loss) to Adjusted EBITDANine months ended October 2, 2021
by SegmentWestEastCementCorporateConsolidated
($ in thousands)     
Net income (loss)$142,340$91,928$65,935$(190,312)$109,891
Interest (income) expense(7,825)(6,133)(12,439)98,93372,536
Income tax expense2,360209—30,90933,478
Depreciation, depletion and amortization74,63465,03228,5353,273171,474
EBITDA$211,509$151,036$82,031$(57,197)$387,379
Accretion6531,274250—2,177
Loss on debt financings———6,0166,016
Gain on sale of businesses(408)(14,911)——(15,319)
Non-cash compensation———14,87514,875
Other(32)714——682
Adjusted EBITDA$211,722$138,113$82,281$(36,306)$395,810
Adjusted EBITDA Margin (1)23.9 %24.1 %37.6 %23.6 %
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Reconciliation of Net Income (Loss) to Adjusted EBITDANine months ended September 26, 2020
by SegmentWestEastCementCorporateConsolidated
($ in thousands)     
Net income (loss)$130,409$52,152$44,432$(122,063)$104,930
Interest (income) expense(2,479)(1,651)(9,685)91,86478,049
Income tax expense (benefit)1,524(358)—(26,499)(25,333)
Depreciation, depletion and amortization66,70764,08028,1652,960161,912
EBITDA$196,161$114,223$62,912$(53,738)$319,558
Accretion3751,213260—1,848
Loss on debt financings———4,0644,064
Non-cash compensation———23,11923,119
Other3454,464—(522)4,287
Adjusted EBITDA$196,881$119,900$63,172$(27,077)$352,876
Adjusted EBITDA Margin (1)23.6 %22.6 %31.8 %22.6 %
________________________________________________
(1) Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of net revenue.

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The table below reconciles our net income attributable to Summit Materials, Inc. to adjusted diluted net income per share for the three and nine months ended October 2, 2021 and September 26, 2020. The per share amount of the net income attributable to Summit Materials, Inc. presented in the table is calculated using the total equity interests for the purpose of reconciling to adjusted diluted net income per share.
 Three months endedNine months ended
 October 2, 2021September 26, 2020October 2, 2021September 26, 2020
Reconciliation of Net Income Per Share to Adjusted Diluted EPSNet IncomePer Equity UnitNet IncomePer Equity UnitNet IncomePer Equity UnitNet IncomePer Equity Unit
Net income attributable to Summit Materials, Inc.$74,204 $0.62 $90,730 $0.77 $108,346 $0.91 $102,815 $0.88 
Adjustments:
Net income attributable to noncontrolling interest1,174 0.01 2,039 0.02 1,545 0.01 2,115 0.02 
Loss (gain) on sale of businesses113 — — — (15,319)(0.13)— — 
Loss on debt financings6,016 0.05 4,064 0.04 6,016 0.05 4,064 0.03 
Adjusted diluted net income before tax related adjustments81,507 0.68 96,833 0.83 100,588 0.84 108,994 0.93 
Changes in unrecognized tax expense (benefit)— — (32,885)(0.28)— — (42,422)(0.36)
Adjusted diluted net income$81,507 $0.68 $63,948 $0.55 $100,588 $0.84 $66,572 $0.57 
Weighted-average shares:    
Basic Class A common stock118,272,955  114,116,564  117,040,207  113,943,292  
LP Units outstanding1,594,272  3,053,115  2,031,090  3,086,820  
Total equity units119,867,227  117,169,679  119,071,297  117,030,112  
 
The following table reconciles operating income to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the three and nine months ended October 2, 2021 and September 26, 2020.  
 Three months endedNine months ended
 October 2,September 26,October 2,September 26,
Reconciliation of Operating Income to Adjusted Cash Gross Profit2021202020212020
($ in thousands)    
Operating income$125,017$100,617$195,881$158,957
General and administrative expenses47,36450,972146,454132,385
Depreciation, depletion, amortization and accretion59,08258,054173,651163,760
Gain on sale of property, plant and equipment (1,159)(1,616)(4,331)(5,747)
Adjusted Cash Gross Profit (exclusive of items shown separately)$230,304$208,027$511,655$449,355
Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1)34.8 %32.2 %30.5 %28.8 %
_______________________________________________________
(1) Adjusted Cash Gross Profit Margin is defined as Adjusted Cash Gross Profit as a percentage of net revenue.







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The following table reconciles net cash provided by operating activities to free cash flow for the three and nine months ended October 2, 2021 and September 26, 2020. 
 Three months endedNine months ended
 October 2,September 26,October 2,September 26,
($ in thousands)2021202020212020
Net income$75,378 $92,769 $109,891 $104,930 
Non-cash items81,700 47,613 194,765 157,626 
Net income adjusted for non-cash items157,078 140,382 304,656 262,556 
Change in working capital accounts(24,356)15,956 (97,283)(44,517)
Net cash provided by operating activities132,722 156,338 207,373 218,039 
Capital expenditures, net of asset sales(35,326)(32,041)(161,243)(131,158)
Free cash flow$97,396 $124,297 $46,130 $86,881 

Contact:
 
Karli Anderson
EVP, Chief Environmental, Social & Governance Officer and Head of Investor Relations
karli.anderson@summit-materials.com
303-875-3886


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