In 4Q15, net revenue increased by 22.3% to US$359.5 million, as opposed to US$294.0 million in the same period of the previous year. This improvement in net revenue was primarily attributable to an increase in volumes and price in aggregates and cement. Net revenue growth from acquisitions for the West Segment was US$15.7 million compared to 4Q14.
Adjusted EBITDA increased by 44.9% to US$90.3 million, in comparison to US$62.3 million in the same quarter of the previous year, with growth in all segments. As a percentage of net revenue, Adjusted EBITDA improved to 25.1%, compared to 21.2% in the prior year quarter.
Gross profit increased 40.7% to US$130.7 million, compared to US$92.9 million in 4Q14. As a percentage of net revenue, gross margin improved to 36.3%, primarily attributable to improved profitability in aggregates and products, a higher mix of revenue from cement as a result of acquisition activity and lower energy costs.
Aggregates Results – Net revenue from aggregates increased 15.7% to US$57.1 million. Aggregates volumes grew 8.0% driven by 4.4% organic volume growth and the remainder attributable to acquisitions. Aggregates organic price increased 6.9% with the improvement due to higher prices in all segments. Gross margin from aggregates increased to 65.1%, compared to 54.5% in the prior year quarter.
Cement Results – Net revenue from cement grew 194.0% to US$70.0 million. Cement volume and price increased 129.3% and 24.7%, respectively, mainly attributable to the acquisition of the Davenport cement plant and overall improved market pricing. Gross margin from cement was 45.6%, compared to 61.9% in 4Q14 due to the timing of major repair and maintenance expense and customer mix.
Products Results – Net revenue from products increased 10.3% to US$168.5 million. Ready-mixed concrete volumes were up 7.9% primarily attributable to stronger demand and acquisitions. Ready-mixed concrete price increased 3.4%, largely benefitting from the pass through of higher cement prices. Asphalt price rose 1.1% mainly due to geographic mix with volume off 2.6% due to unfavourable weather in our East Segment. Gross margin from products expanded to 25.4%.
Adjusted net income in 4Q15 was US$34.4 million.
In FY15, net revenue increased by 20.5% to US$1,290.0 million. The increase in net revenue was primarily attributable to an increase in volumes and price across most of our lines of business, led by the West and Cement Segments. Net revenue growth from acquisitions was US$108.3 million compared to the prior year, excluding the Cement Segment.
Adjusted EBITDA increased 52.1% to US$287.5 million, with growth in all segments. Gross profit grew 39.3% to US$441.7 million, reflecting improved profitability in aggregates, cement and products, in addition to a higher mix of revenue from aggregates and cement as a result of organic improvements and acquisition activity.
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% and organic price up 6.9%, representing the fourth straight quarter of improved pricing. 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.”
Mr. Hill continued, “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. 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. As we move forward in 2016 we believe we are on firm footing to execute on our growth, price and cost initiatives to deliver on our Adjusted EBITDA expectations.”
Brian Harris, CFO of Summit, stated, “During 2015, we generated positive cash flow on our expanding operations and improved our credit metrics. Our upsized bond offering in late 2015 was met with strong demand and provided us with an attractive source of funds to refinance our debt and lower our cost of capital. We invested wisely in our capacity and equipment to enhance our ability to serve customers and support pricing initiatives, with our capex representing 6.9% of net revenue in 2015. We ended the year with a prudently levered balance sheet and ample capital resources to continue executing our strategic growth initiatives in a disciplined manner. We are pleased with our financial progress and into 2016 we remain committed to further increasing our Adjusted EBITDA to produce additional cash flow and generate value for stockholders.”
Adapted from press release by Rebecca Bowden
Read the article online at: https://www.worldcement.com/the-americas/16022016/summit-materials-4q15-and-fy15-results-508/