Summit Materials Inc. announced results for the fourth quarter and full year of 2015. In the fourth quarter of 2015, the company introduced a Cement Segment as a new segment and reclassified its segments into West, East and Cement.
After the close of full year 2015, in February 2016, Summit acquired American Materials Co., an aggregates company headquartered in Wilmington, N.C. The acquisition expanded Summit’s geographic reach into the high-growth coastal North and South Carolina markets through five strategically positioned sand and gravel operations, with an estimated 40.5 million tons of combined aggregates reserves.
In the fourth quarter of 2015 compared to the fourth quarter of 2014:
- Net revenue from aggregates increased 15.7 percent to $57.1 million. Aggregates volumes grew 8.0 percent driven by 4.4 percent organic volume growth and the remainder attributable to acquisitions. Aggregates organic price increased 6.9 percent with the improvement due to higher prices in all segments. Gross margin from aggregates increased to 65.1 percent, compared to 54.5 percent in the prior year quarter.
- Net revenue from cement grew 194.0 percent to $70.0 million. Cement volume and price increased 129.3 percent and 24.7 percent, respectively, mainly attributable to the acquisition of the Davenport cement plant and overall improved market pricing. Gross margin from cement was 45.6 percent, compared to 61.9 percent in the prior year quarter due to the timing of major repair and maintenance expense and customer mix.
- Net revenue increased 22.3 percent, with growth in all segments, primarily from acquisitions.
- Adjusted net income of $34.4 million, or Adjusted EPS of $0.34.
- Net income attributable to Summit Materials Inc. of $23.4 million, or EPS of $0.4.
Full-year 2015 compared to full-year 2014:
- Volume and price increased across most lines of business.
- Net revenue increased 20.5 percent, led by West and Cement segments.
- Adjusted net income of $74.7 million.
- Net income attributable to Summit Materials, Inc. of $27.7 million.
- Adjusted EBITDA increased 52.1 percent to $287.5 million.
Tom Hill, CEO of Summit, stated, “2015 marked a significant year of progress for our company, in which we meaningfully enhanced our materials exposure, improved our capital position and met or exceeded nearly all our core operating metrics. During the year, we increased our Adjusted EBITDA margin by approximately 460 basis points primarily driven by organic price improvement in each of our lines of business and the successful integration of our accretive acquisitions, especially in cement.
“In our core aggregates business we finished strong with fourth quarter volume up 8.0 percent and organic price up 6.9 percent, representing the fourth straight quarter of improved pricing,” he continued. “In cement, we more than doubled our shipments in the fourth quarter and capitalized on positive pricing opportunities in our markets, while further solidifying our strategic position in the upper Midwest. In our ready-mix and asphalt businesses our fourth quarter gross margin improved 500 basis points reflecting the benefits of our vertically integrated businesses. This collective improvement demonstrates the strength of our materials based-strategy, which focuses on securing attractively positioned reserves in well-structured markets, with selective downstream exposure.
“We are pleased with the positive momentum in our business during 2015. The fundamentals in our markets remain quite positive for private construction activity, and we believe we are still in the early stages of the U.S. construction recovery,” Hill concluded. “Additionally, our infrastructure end markets are poised to potentially benefit from the recent passage of the five-year highway bill, the FAST Act, in December 2015. The enhanced visibility of the FAST Act provides a catalyst for states to embark on larger scale and more material-intensive projects. Specifically in Texas, our markets continue to exhibit positive economic growth, population influxes and increased spending on infrastructure.”