Reiterates and Provides Pathway to Elevate
Summit Margin Target
Upgrades Argos Synergy Target to at Least
$130 Million
Eliminates Up-C Structure
DENVER, March 13,
2024 /PRNewswire/ -- Summit Materials, Inc.
(NYSE: SUM) ("Summit," "Summit Materials," "Summit Inc." or the
"Company"), a market-leading construction materials company,
announces highlights that are being presented at its Investor Day
today in New York City.
"Since the introduction of our Elevate Summit Strategy in
March 2021, it has been the
cornerstone of our decision-making process, shaping our actions and
providing a clear roadmap for our future," said Anne Noonan, CEO of Summit Materials. "Today, we
are excited to share further insights into our strategic
achievements and outline a detailed plan for reaching our Elevate
Summit financial goals. We are confident in the attractiveness of
the markets we operate in, the quality of our assets, and,
importantly, our unique operational opportunities to drive
profitable and sustainable growth, which, coupled with our ability
to generate material synergies and our strong financial position,
will drive ongoing growth and value creation for Summit
shareholders."
Six key themes for today's presentation include:
- Consistent Strategic Priorities: Enabled by our people
and our culture, we maintain relentlessly focused on our four
strategic priorities of Market Leadership, Asset Light,
Sustainability, and Innovation.
- Reaffirming our Path to Achieve Elevate Summit Financial
Targets: Anchored by North
Star profitability targets, an intentional shift towards a
more materials-led organization, and an invest-to-grow mindset, we
aim to maintain leverage below 3x, achieve ROIC of at least 10%,
and reach Adjusted EBITDA margins of 30% or greater.
- Recommitment to being the Most Socially Responsible: Our
Sustainability Roadmap, which includes our goals for reducing
carbon emissions, is deeply embedded in our organizational DNA. We
are dedicated to benefiting communities and driving greater value
through these initiatives.
- Unlocking Value by Leveraging a Proven Integration
Playbook: We'll rely on deep expertise and a long track record
as we safely integrate Argos USA,
fulfill synergy commitments, and enhance enterprise-wide
profitability and cash flow.
- Strengthening the Materials-led Portfolio: Ongoing
portfolio optimization together with aggregates-oriented
acquisitions will further our materials-led portfolio
strategy.
- Capital Allocation Priorities Aligned with Growth
Objectives: Prioritizing above-market growth, our deployment of
capital will be growth-oriented and directed towards the highest
return opportunities.
"We are also pleased to announce the elimination of our Up-C
corporate structure," added Summit CFO Scott Anderson. "By completing the exchange of
all outstanding LP units, we have streamlined our structure
significantly, reducing corporate complexity. We are focusing on
eliminating the associated TRA liability in a value-accretive
manner, as we have successfully done in the past."
Investors and other interested parties can watch the webcast of
the event, which will begin at 9:00 a.m. ET today, at the
Company's
website, https://investors.summit-materials.com/corporate-profile/default.aspx.
The event will be recorded and available for replay shortly after
its conclusion.
2024 Guidance
For the full year 2024, Summit is reiterating all guidance
items. The Company currently projects Adjusted EBITDA of
approximately $950 million to
$1,010 million, and continues to
expect 2024 capital expenditure of approximately $430 million to $470
million.
Adjusted EBITDA is a non-GAAP measure. Refer to the "Non-GAAP
Financial Measures" section for more information. 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.
Investor Day Webcast Information
Summit Materials will conduct a conference call on Wednesday, March 13, 2024 beginning at
9:00am eastern time (7:00am mountain time).
Chief Executive Officer Anne
Noonan and her executive leadership team will lead an
investor presentation and Q&A session that will focus on the
Elevate Summit Strategy, growth drivers, integration plans, ESG
initiatives, as well as the Company's capital allocation
priorities.
A live webcast of the investor day presentation, along with
supporting materials, will be available on the day of the event at
the following link: https://app.webinar.net/d0y198kr4b6
A replay of the webcast and accompanying presentation materials
will be available in the Investors section of Summit's website at
investors.summit-materials.com shortly following the conclusion of
the event.
Contact:
Andy Larkin
VP, Investor Relations
andy.larkin@summit-materials.com
720-618-6013
About Summit Materials
Summit Materials is a market-leading producer of aggregates and
cement with vertically integrated operations that supply ready-mix
concrete and asphalt in select markets. Summit is a geographically
diverse, materials-led business of scale that offers customers in
the United States and British Columbia, Canada high quality products
and services for the public infrastructure, residential and
non-residential end markets. Summit has a strong track record of
successful acquisitions since its founding and continues to pursue
high-return 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 EBITDA and
Adjusted EBITDA margin, 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 EBITDA
and Adjusted EBITDA margin 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 and Adjusted EBITDA margin 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.
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 30,
2023, as filed with the SEC, and any factors discussed in
the section entitled "Risk Factors" in any of our subsequently
filed SEC filings.
- 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 and portfolio
optimization strategy, successfully integrate acquisitions,
including the integration of Argos USA, with our existing operations and retain
key employees of acquired businesses;
- our dependence on securing and permitting aggregate reserves
in strategically located areas;
- the impact of rising interest rates, and diminished liquidity
and credit availability in the market generally;
- declines in public infrastructure construction and delays or
reductions in governmental funding, including the funding by
transportation authorities, the federal government and other state
agencies particularly;
- 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;
- 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 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 qualified personnel;
- supply constraints or significant price fluctuations in the
electricity and petroleum-based resources that we use, including
coal, petcoke, diesel and liquid asphalt;
- climate change and climate change legislation or other
regulations;
- unexpected operational difficulties;
- costs associated with pending and future litigation;
- 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; and
- material or adverse effects related to the Argos USA combination.
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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SOURCE Summit Materials, Inc.