Summit Materials reported full-year net income up 32.7% to $36.8 million for the year ended December 2016.
Summit reported adjusted Ebitda up 29.2% to $371.3 million and earnings per share of $0.53 on net income of $36.8 million.
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Summit Materials reported full-year net income for 2016 up 32.7% to $36.8m[/caption]
For the same twelve month period, Summit reported adjusted diluted earnings per share of $0.97 on adjusted net income of $98.3 million.
For the three months ended December 31, 2016, the company reported a basic loss per share of ($0.00) on a net loss of ($0.3) million.
For the same three month period, Summit reported adjusted diluted earnings per share of $0.21 on adjusted net income of $21.0 million.
The company’s adjusted net income for the fourth quarter and full-year 2016 excludes an $14.9 million charge for estimated future payments to certain current and former limited partners under the tax receivable agreement entered into at the time of the company’s initial public offering, $13.8 million of which is expected to be paid beginning in 2019 or thereafter.
“Our strong full-year performance further validates the unique competitive advantages afforded by our integrated, materials-based model,” said Tom Hill, chief executive Summit Materials.
“Our leading positions in well-structured, early-cycle markets drove sustained margin expansion throughout all lines of business in 2016, as both gross margin and Adjusted EBITDA margin increased to record levels. Adjusted EBITDA exceeded the high-end of our guided range for the full-year, given sustained growth in materials pricing, contributions from completed acquisitions and improved cost efficiencies.”
“Gross profit generated from our materials lines of business increased by more than 35% year-over-year in 2016, despite temporary softness in organic sales volumes of aggregates in our Texas and Vancouver markets,” Hill said.
“Excluding Texas and Vancouver, organic sales volumes of aggregates and ready-mix increased 1.2% and 5.1%, respectively, in the full-year 2016, versus the prior year. Looking ahead to 2017, we anticipate positive growth in materials pricing and volumes across all of our reporting segments.”
“In January 2017, we entered into definitive agreements to acquire Colorado-based Everist Materials and Arkansas-based Razorback Concrete Company for a combined $110 million in cash,” stated Hill. “Collectively, these acquisitions bring aggregates operations with ~100 million tons of permitted reserves and an extensive network of vertically integrated ready-mix concrete and asphalt plants in close proximity to our existing portfolio of materials-based assets. In addition to Everist, which closed in January 2017, and Razorback, which is expected to close during the first quarter 2017, our acquisition pipeline remains robust, with more than 20 additional transactions currently under review.”
“Our cement business represents a clear catalyst for growth heading into 2017,” continued Hill. “Limited domestic production capacity and continued growth in U.S. demand have combined to create opportunities for sustained growth in industry cement pricing. During the fourth quarter, our cement segment generated organic price and volume growth of 6.8% and nearly 1%, respectively. Looking ahead to the remainder of 2017, we anticipate continued Adjusted EBITDA growth in our cement business, as supported by sustained growth in organic cement prices and sales volumes along the Mississippi River corridor.”
“Following the recent election cycle, we have entered a new era of bipartisan support for funding that will help to properly maintain and modernize our nation’s aging transportation infrastructure,” Hill said.
“In the markets we serve, nearly 60 cents of every dollar spent by states on transportation infrastructure is federally funded. Given that nearly 40% of our net revenue is derived from public infrastructure work, Summit is well positioned to benefit from this opportunity. With the support of appropriations from the Fast Act, we anticipate an acceleration in state-level infrastructure spending beginning in mid-to-late 2017. Further, given ongoing advocacy by Congress and the current Administration for increased investment in state transportation infrastructure, we see numerous opportunities for multi-year growth in our public-facing businesses.”
“We generated significant growth in cash flows from operations last year, resulting in a material improvement in our credit metrics,” stated Brian Harris, chief financial officer, Summit Materials. “We had outstanding debt of $1.5 billion as of December 31, 2016. Net leverage was 3.9x at year-end 2016, ahead of our full-year guidance of 4.0x. Including net proceeds from the 10 million share equity offering we completed in January 2017, net leverage declined to 3.5x at year-end 2016. Looking ahead, we currently anticipate a further reduction in net leverage to approximately 3.0x by year-end 2017, assuming the mid-point of our 2017 Adjusted EBITDA guidance," he said.
“We had $143.4 million in cash and $209.4 million of available liquidity under our revolving credit facility at year-end,” Harris said.
"Including proceeds from the equity offering we completed in January 2017, net of $110 million used to fund the acquisition of Everist and Razorback, we had pro-forma cash and liquidity of approximately $480 million exiting 2016," Harris said.
“Our current liquidity position provides sufficient flexibility with which to fund the working capital and strategic growth requirements of our business at this time. Looking forward, disciplined capital allocation remains a high priority for us, particularly as we seek to reduce our net leverage ratio and improve our credit metrics. We are pleased with our full-year performance and remain focused on creating additional value for our investors in the year ahead.”
