UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM			10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~October~~April 2, ~~2021~~2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file numbers:

001-36873 (Summit Materials, Inc.)

333-187556 (Summit Materials, LLC)


SUMMIT MATERIALS, INC.
SUMMIT MATERIALS, LLC
(Exact name of registrants as specified in their charters)


Delaware (Summit Materials, Inc.)						47-1984212
Delaware (Summit Materials, LLC)						26-4138486
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
1550 Wynkoop Street, 3rd Floor						80202
Denver, Colorado						(Zip Code)
(Address of principal executive offices)

Registrants’ telephone number, including area code: (303) 893-0012

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Class A Common Stock (par value $.01 per share)

SUM

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Summit Materials, Inc.

Yes

☒

☐

Summit Materials, LLC

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Summit Materials, Inc.

Yes

☒

☐

Summit Materials, LLC

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Summit Materials, Inc.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Summit Materials, LLC

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Summit Materials, Inc.

Yes

☐

☒

Summit Materials, LLC

Yes

☐

☒

As of ~~November 1, 2021,~~May 2, 2022, the number of shares of Summit Materials, Inc.’s outstanding Class A and Class B common stock, par value $0.01 per share for each class, was ~~118,566,950~~118,099,723 and 99, respectively.

As of ~~November 1, 2021,~~May 2, 2022, 100% of Summit Materials, LLC’s outstanding limited liability company interests were held by Summit Materials Intermediate Holdings, LLC, its sole member and an indirect subsidiary of Summit Materials, Inc.

EXPLANATORY NOTE

This quarterly report on Form 10-Q (this “report”) is a combined quarterly report being filed separately by two registrants: Summit Materials, Inc. and Summit Materials, LLC. Each registrant hereto is filing on its own behalf all of the information contained in this report that relates to such registrant. Each registrant hereto is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information. We believe that combining the quarterly reports on Form 10-Q of Summit Materials, Inc. and Summit Materials, LLC into this single report eliminates duplicative and potentially confusing disclosure and provides a more streamlined presentation since a substantial amount of the disclosure applies to both registrants.

Unless stated otherwise or the context requires otherwise, references to “Summit Inc.” mean Summit Materials, Inc., a Delaware corporation, and references to “Summit LLC” mean Summit Materials, LLC, a Delaware limited liability company. The references to Summit Inc. and Summit LLC are used in cases where it is important to distinguish between them. We use the terms “we,” “our,” “us” or “the Company” to refer to Summit Inc. and Summit LLC together with their respective subsidiaries, unless otherwise noted or the context otherwise requires.

Summit Inc. was formed on September 23, 2014 to be a holding company. As of ~~October~~April 2, ~~2021,~~2022, its sole material asset was a ~~98.8%~~98.9% economic interest in Summit Materials Holdings L.P., a Delaware limited partnership (“Summit Holdings”). Summit Inc. has 100% of the voting rights of Summit Holdings, which is the indirect parent of Summit LLC. Summit LLC is a co-issuer of our outstanding 6 1/2 % senior notes due 2027 (“2027 Notes”) and our 5 1/4% senior notes due 2029 (“2029 Notes” and collectively with the 2027 Notes, the “Senior Notes”). Summit Inc.’s only revenue for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 was that generated by Summit LLC and its consolidated subsidiaries. Summit Inc. controls all of the business and affairs of Summit Holdings and, in turn, Summit LLC.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report 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~~1, 2022 (the “Annual Report”), as filed with the Securities and Exchange Commission (the “SEC”), any factors discussed in the section entitled “Risk Factors” of this report and the following:

•our dependence on the construction industry and the strength of the ~~local~~ economies in which we operate;

•the cyclical nature of our ~~business;~~industry;

•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 with our existing operations and retain key employees of acquired businesses;

•our ~~ability to implement and successfully execute on our Elevate Summit strategy;~~

•~~our~~ dependence on securing and permitting aggregate reserves in strategically located areas;

•the impact of the coronavirus (“COVID-19”) pandemic, and responses to it, including vaccine mandates, or any similar crisis, on our business;

•declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities and other state agencies particularly if such are not augmented by federal funding or if the federal government fails to act on a highway infrastructure bill;

•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, geopolitical events 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 team, and our ability to retain and attract other 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 other regulations;

•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 report. 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.

CERTAIN DEFINITIONS

As used in this report, unless otherwise noted or the context otherwise requires:

•“EBITDA” refers to net income (loss) before interest expense (income), income tax expense (benefit) and depreciation, depletion and amortization;

•“Finance Corp.” refers to Summit Materials Finance Corp., an indirect wholly-owned subsidiary of Summit LLC and the co-issuer of the Senior Notes;

•“~~Issuers” refers to Summit LLC and Finance Corp. as co‑issuers of the Senior Notes;~~

•“LP Units” refers to the Class A limited partnership units of Summit Holdings; and

•“TRA” refers to a tax receivable agreement between Summit Inc. and certain current and former holders of LP Units and their permitted assignees.

Corporate Structure

The following chart summarizes our organizational structure, equity ownership and our principal indebtedness as of ~~October~~April 2, ~~2021.~~2022. This chart is provided for illustrative purposes only and does not show all of our legal entities or all obligations of such entities.

(1)SEC registrant.

(2)The shares of Class B Common Stock are currently held by pre-IPO investors, including certain members of management or their family trusts that directly hold LP Units. A holder of Class B Common Stock is entitled, without regard to the number of shares of Class B Common Stock held by such holder, to a number of votes that is equal to the aggregate number of LP Units held by such holder.

(3)Guarantor under the senior secured credit facilities, but not the Senior Notes.

(4)Summit LLC and Finance Corp are the issuers of the Senior Notes and Summit LLC is the borrower under our senior secured credit facilities. Finance Corp. was formed solely for the purpose of serving as co-issuer or guarantor of certain indebtedness, including the Senior Notes. Finance Corp. does not and will not have operations of any kind and does not and will not have revenue or assets other than as may be incidental to its activities as a co-issuer or guarantor of certain indebtedness.

Table of Contents

SUMMIT MATERIALS, INC.

SUMMIT MATERIALS, LLC

FORM 10-Q

TABLE OF CONTENTS


		Page No.
PART I—Financial Information

Item 1.	Financial Statements for Summit Materials, Inc.	1

	Consolidated Balance Sheets as of ~~October~~April 2, ~~2021~~2022 (unaudited) and January ~~2, 2021~~1, 2022	1

	Unaudited Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020~~April 3, 2021	2

	Unaudited Consolidated Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020~~April 3, 2021	3

	Unaudited Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020~~April 3, 2021	4

	Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020~~April 3, 2021	5

	Notes to Unaudited Consolidated Financial Statements	76

	Financial Statements for Summit Materials, LLC	2220

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2220

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3934

Item 4.	Controls and Procedures	3934

PART II — Other Information

Item 1.	Legal Proceedings	4136

Item 1A.	Risk Factors	4136

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4136

Item 3.	Defaults Upon Senior Securities	4136

Item 4.	Mine Safety Disclosures	4136

Item 5.	Other Information	4136

Item 6.	Exhibits	4237

SIGNATURES		4338

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share and per share amounts)


		October 2, 2021		January 2, 2021			April 2, 2022		January 1, 2022
		(unaudited)		(audited)			(unaudited)		(audited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	258,083	$	418,181	Cash and cash equivalents	$	287,392	$	380,961
Accounts receivable, net	Accounts receivable, net	333,351		254,696		Accounts receivable, net	239,839		287,226
Costs and estimated earnings in excess of billings	Costs and estimated earnings in excess of billings	34,181		8,666		Costs and estimated earnings in excess of billings	12,723		7,600
Inventories	Inventories	195,312		200,308		Inventories	187,009		180,760
Other current assets	Other current assets	13,855		11,428		Other current assets	14,305		11,827
Current assets held for sale						Current assets held for sale	36,572		1,236
Total current assets	Total current assets	834,782		893,279		Total current assets	777,840		869,610
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
Property, plant and equipment, less accumulated depreciation, depletion and amortization (April 2, 2022 - $1,290,560 and January 1, 2022 - $1,266,513)						Property, plant and equipment, less accumulated depreciation, depletion and amortization (April 2, 2022 - $1,290,560 and January 1, 2022 - $1,266,513)	1,766,594		1,842,908
Goodwill	Goodwill	1,174,855		1,201,291		Goodwill	1,146,276		1,163,750
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
Intangible assets, less accumulated amortization (April 2, 2022 - $16,218 and January 1, 2022 - $15,269)						Intangible assets, less accumulated amortization (April 2, 2022 - $16,218 and January 1, 2022 - $15,269)	67,015		69,396
Deferred tax assets, less valuation allowance (April 2, 2022 - $1,675 and January 1, 2022 - $1,675)						Deferred tax assets, less valuation allowance (April 2, 2022 - $1,675 and January 1, 2022 - $1,675)	211,372		204,566
Operating lease right-of-use assets	Operating lease right-of-use assets	27,339		28,543		Operating lease right-of-use assets	28,766		30,150
Other assets	Other assets	57,807		55,000		Other assets	43,200		58,745
Noncurrent assets held for sale						Noncurrent assets held for sale	102,182		—
Total assets	Total assets	$	4,216,649	$	4,308,011	Total assets	$	4,143,245	$	4,239,125
Liabilities and Stockholders’ Equity	Liabilities and Stockholders’ Equity					Liabilities and Stockholders’ Equity
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of debt	Current portion of debt	$	6,354	$	6,354	Current portion of debt	$	6,354	$	6,354
Current portion of acquisition-related liabilities	Current portion of acquisition-related liabilities	12,809		10,265		Current portion of acquisition-related liabilities	13,078		13,110
Accounts payable	Accounts payable	155,919		120,813		Accounts payable	146,292		128,232
Accrued expenses	Accrued expenses	137,378		160,570		Accrued expenses	113,569		147,476
Current operating lease liabilities	Current operating lease liabilities	6,818		8,188		Current operating lease liabilities	5,934		6,497
Billings in excess of costs and estimated earnings	Billings in excess of costs and estimated earnings	11,631		16,499		Billings in excess of costs and estimated earnings	6,734		7,401
Current liabilities held for sale						Current liabilities held for sale	13,110		—
Total current liabilities	Total current liabilities	330,909		322,689		Total current liabilities	305,071		309,070
Long-term debt	Long-term debt	1,591,989		1,892,347		Long-term debt	1,590,050		1,591,019
Acquisition-related liabilities	Acquisition-related liabilities	33,223		12,246		Acquisition-related liabilities	22,928		33,369
Tax receivable agreement liability	Tax receivable agreement liability	330,871		321,680		Tax receivable agreement liability	326,548		326,548
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	21,596		21,500		Noncurrent operating lease liabilities	28,017		28,880
Other noncurrent liabilities	Other noncurrent liabilities	136,297		121,281		Other noncurrent liabilities	121,103		127,027
Noncurrent liabilities held for sale						Noncurrent liabilities held for sale	3,031		—
Total liabilities	Total liabilities	2,444,885		2,691,743		Total liabilities	2,396,748		2,415,913
Commitments and contingencies (see note 12)	Commitments and contingencies (see note 12)	0		0		Commitments and contingencies (see note 12)	0		0
Stockholders’ equity:	Stockholders’ equity:					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, respectively		1,186		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		—		—
Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 118,041,848 and 118,705,108 shares issued and outstanding as of April 2, 2022 and January 1, 2022, respectively						Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 118,041,848 and 118,705,108 shares issued and outstanding as of April 2, 2022 and January 1, 2022, respectively	1,181		1,188
Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of April 2, 2022 and January 1, 2022						Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of April 2, 2022 and January 1, 2022	—		—
Additional paid-in capital	Additional paid-in capital	1,319,897		1,264,681		Additional paid-in capital	1,330,548		1,326,340
Accumulated earnings	Accumulated earnings	435,118		326,772		Accumulated earnings	397,170		478,956
Accumulated other comprehensive income	Accumulated other comprehensive income	5,670		5,203		Accumulated other comprehensive income	8,389		7,083
Stockholders’ equity	Stockholders’ equity	1,761,871		1,597,801		Stockholders’ equity	1,737,288		1,813,567
Noncontrolling interest in Summit Holdings	Noncontrolling interest in Summit Holdings	9,893		18,467		Noncontrolling interest in Summit Holdings	9,209		9,645
Total stockholders’ equity	Total stockholders’ equity	1,771,764		1,616,268		Total stockholders’ equity	1,746,497		1,823,212
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	4,216,649	$	4,308,011	Total liabilities and stockholders’ equity	$	4,143,245	$	4,239,125

See notes to unaudited consolidated financial statements.

Table of Contents

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

(In thousands, except share and per share amounts)


		Three months ended				Nine months ended					Three months ended
		October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020				April 2, 2022		April 3, 2021
Revenue:	Revenue:									Revenue:
Product	Product	$	561,938	$	540,904	$	1,443,972	$	1,334,471	Product		$	355,669	$	354,234
Service	Service	100,321		104,342		235,298		228,421		Service		36,826		44,247
Net revenue	Net revenue	662,259		645,246		1,679,270		1,562,892		Net revenue		392,495		398,481
Delivery and subcontract revenue	Delivery and subcontract revenue	54,981		64,373		133,731		144,926		Delivery and subcontract revenue		28,452		29,363
Total revenue	Total revenue	717,240		709,619		1,813,001		1,707,818		Total revenue		420,947		427,844
Cost of revenue (excluding items shown separately below):	Cost of revenue (excluding items shown separately below):									Cost of revenue (excluding items shown separately below):
Product	Product	356,214		354,250		980,045		923,384		Product		290,345		277,134
Service	Service	75,741		82,969		187,570		190,153		Service		34,583		40,197
Net cost of revenue	Net cost of revenue	431,955		437,219		1,167,615		1,113,537		Net cost of revenue		324,928		317,331
Delivery and subcontract cost	Delivery and subcontract cost	54,981		64,373		133,731		144,926		Delivery and subcontract cost		28,452		29,363
Total cost of revenue	Total cost of revenue	486,936		501,592		1,301,346		1,258,463		Total cost of revenue		353,380		346,694
General and administrative expenses	General and administrative expenses	47,364		50,972		146,454		132,385		General and administrative expenses		51,924		51,642
Depreciation, depletion, amortization and accretion	Depreciation, depletion, amortization and accretion	59,082		58,054		173,651		163,760		Depreciation, depletion, amortization and accretion		51,193		56,336
Gain on sale of property, plant and equipment	Gain on sale of property, plant and equipment	(1,159)		(1,616)		(4,331)		(5,747)		Gain on sale of property, plant and equipment		(1,255)		(1,769)
Operating income		125,017		100,617		195,881		158,957
Operating loss										Operating loss		(34,295)		(25,059)
Interest expense	Interest expense	24,134		24,623		72,536		78,049		Interest expense		20,149		24,186
Loss on debt financings		6,016		4,064		6,016		4,064

Loss (gain) on sale of businesses		113		—		(15,319)		—

Gain on sale of businesses										Gain on sale of businesses		(14,205)		(15,668)
Other income, net	Other income, net	(1,137)		(1,226)		(10,721)		(2,753)		Other income, net		(696)		(4,889)
Income from operations before taxes		95,891		73,156		143,369		79,597
Income tax expense (benefit)		20,513		(19,613)		33,478		(25,333)
Net income		75,378		92,769		109,891		104,930
Loss from operations before taxes										Loss from operations before taxes		(39,543)		(28,688)
Income tax benefit										Income tax benefit		(4,743)		(5,443)
Net loss										Net loss		(34,800)		(23,245)

Net income attributable to Summit Holdings		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:
Net loss attributable to Summit Holdings										Net loss attributable to Summit Holdings		(508)		(728)
Net loss attributable to Summit Inc.										Net loss attributable to Summit Inc.		$	(34,292)	$	(22,517)
Loss per share of Class A common stock:										Loss per share of Class A common stock:
Basic	Basic	$	0.63	$	0.79	$	0.92	$	0.90	Basic		$	(0.29)	$	(0.19)
Diluted	Diluted	$	0.62	$	0.79	$	0.92	$	0.90	Diluted		$	(0.29)	$	(0.20)
Weighted average shares of Class A common stock:	Weighted average shares of Class A common stock:									Weighted average shares of Class A common stock:
Basic	Basic	118,473,530		114,436,907		117,258,431		114,088,447		Basic		118,937,466		115,664,725
Diluted	Diluted	119,291,646		114,472,171		118,360,615		114,457,276		Diluted		118,937,466		115,411,204

See notes to unaudited consolidated financial statements.

Table of Contents

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Comprehensive Income

(In thousands)

Three months ended Nine months ended
October 2, 2021 September 26, 2020 October 2, 2021 September 26, 2020
Net income $ 75,378 $ 92,769 $ 109,891 $ 104,930
Other comprehensive income (loss):
Foreign currency translation adjustment (4,076) 2,018 682 (3,395)
Less tax effect of other comprehensive income (loss) items 823 (494) (176) 831
Other comprehensive (loss) income (3,253) 1,524 506 (2,564)
Comprehensive income 72,125 94,293 110,397 102,366
Less comprehensive income attributable to Summit Holdings 1,117 2,091 1,584 2,024
Comprehensive income attributable to Summit Inc. $ 71,008 $ 92,202 $ 108,813 $ 100,342


	Three months ended
		April 2, 2022		April 3, 2021
Net loss		$	(34,800)	$	(23,245)
Other comprehensive income (loss):
Foreign currency translation adjustment		1,744		2,126

Less tax effect of other comprehensive loss items		(419)		(446)
Other comprehensive income		1,325		1,680
Comprehensive loss		(33,475)		(21,565)
Less comprehensive loss attributable to Summit Holdings		(489)		(683)
Comprehensive loss attributable to Summit Inc.		$	(32,986)	$	(20,882)

See notes to unaudited consolidated financial statements.

Table of Contents

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

(In thousands)


		Nine months ended					Three months ended
		October 2, 2021		September 26, 2020			April 2, 2022		April 3, 2021
Cash flow from operating activities:
Net income		$	109,891	$	104,930
Cash flows from operating activities:						Cash flows from operating activities:
Net loss						Net loss	$	(34,800)	$	(23,245)
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion	Depreciation, depletion, amortization and accretion	177,841		164,397		Depreciation, depletion, amortization and accretion	54,838		59,107
Share-based compensation expense	Share-based compensation expense	14,875		23,119		Share-based compensation expense	5,422		5,363
Net gain on asset and business disposals	Net gain on asset and business disposals	(19,295)		(5,746)		Net gain on asset and business disposals	(15,660)		(15,964)
Non-cash loss on debt financings		2,116		4,064

Change in deferred tax asset, net	Change in deferred tax asset, net	19,814		(28,968)		Change in deferred tax asset, net	(7,770)		(10,145)
Other	Other	(586)		760		Other	(221)		483
Decrease (increase) in operating assets, net of acquisitions and dispositions:	Decrease (increase) in operating assets, net of acquisitions and dispositions:					Decrease (increase) in operating assets, net of acquisitions and dispositions:
Accounts receivable, net	Accounts receivable, net	(78,108)		(48,361)		Accounts receivable, net	35,836		4,946
Inventories	Inventories	(12,002)		(2,829)		Inventories	(36,752)		(15,412)
Costs and estimated earnings in excess of billings	Costs and estimated earnings in excess of billings	(26,969)		(30,912)		Costs and estimated earnings in excess of billings	(6,449)		(8,442)
Other current assets	Other current assets	(2,556)		(75)		Other current assets	(1,891)		(9,209)
Other assets	Other assets	6,459		8,367		Other assets	1,183		2,504
(Decrease) increase in operating liabilities, net of acquisitions and dispositions:	(Decrease) increase in operating liabilities, net of acquisitions and dispositions:					(Decrease) increase in operating liabilities, net of acquisitions and dispositions:
Accounts payable	Accounts payable	33,756		21,729		Accounts payable	16,744		14,518
Accrued expenses	Accrued expenses	(15,598)		3,164		Accrued expenses	(25,946)		(24,130)
Billings in excess of costs and estimated earnings	Billings in excess of costs and estimated earnings	(2,907)		395		Billings in excess of costs and estimated earnings	317		(2,578)
Tax receivable agreement liability	Tax receivable agreement liability	9,191		993		Tax receivable agreement liability	—		4,152
Other liabilities	Other liabilities	(8,549)		3,012		Other liabilities	(1,564)		(3,266)
Net cash provided by operating activities		207,373		218,039
Cash flow from investing activities:
Acquisitions, net of cash acquired		(7,263)		(123,195)
Net cash used in operating activities						Net cash used in operating activities	(16,713)		(21,318)
Cash flows from investing activities:						Cash flows from investing activities:

Purchases of property, plant and equipment	Purchases of property, plant and equipment	(170,070)		(140,006)		Purchases of property, plant and equipment	(57,774)		(69,757)
Proceeds from the sale of property, plant and equipment	Proceeds from the sale of property, plant and equipment	8,827		8,848		Proceeds from the sale of property, plant and equipment	1,439		2,663
Proceeds from sale of businesses	Proceeds from sale of businesses	103,649		—		Proceeds from sale of businesses	47,821		33,077
Other	Other	(459)		1,395		Other	(857)		(483)
Net cash used in investing activities	Net cash used in investing activities	(65,316)		(252,958)		Net cash used in investing activities	(9,371)		(34,500)
Cash flow from financing activities:
Proceeds from debt issuances		—		700,000
Debt issuance costs		—		(9,565)
Cash flows from financing activities:						Cash flows from financing activities:

Payments on debt	Payments on debt	(323,802)		(666,892)		Payments on debt	(7,603)		(10,170)
Payments on acquisition-related liabilities	Payments on acquisition-related liabilities	(9,755)		(10,391)		Payments on acquisition-related liabilities	(11,397)		(8,096)

Repurchases of common stock						Repurchases of common stock	(47,509)		—
Proceeds from stock option exercises	Proceeds from stock option exercises	32,416		329		Proceeds from stock option exercises	27		15,920
Other	Other	(951)		(908)		Other	(1,180)		(416)
Net cash (used in) provided by financing activities		(302,092)		12,573
Net cash used in financing activities						Net cash used in financing activities	(67,662)		(2,762)
Impact of foreign currency on cash	Impact of foreign currency on cash	(63)		(216)		Impact of foreign currency on cash	177		140
Net decrease in cash	Net decrease in cash	(160,098)		(22,562)		Net decrease in cash	(93,569)		(58,440)
Cash and cash equivalents—beginning of period	Cash and cash equivalents—beginning of period	418,181		311,319		Cash and cash equivalents—beginning of period	380,961		418,181
Cash and cash equivalents—end of period	Cash and cash equivalents—end of period	$	258,083	$	288,757	Cash and cash equivalents—end of period	$	287,392	$	359,741

See notes to unaudited consolidated financial statements.

Table of Contents

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Changes in Stockholders’ Equity

(In thousands, except share amounts)


	Summit Materials, Inc.																	Summit Materials, Inc.
			Accumulated																	Accumulated
			Other		Class A			Class B			Additional		Noncontrolling		Total					Other		Class A			Class B			Additional		Noncontrolling		Total
	Accumulated		Comprehensive		Common Stock			Common Stock			Paid-in		Interest in		Stockholders’			Accumulated		Comprehensive		Common Stock			Common Stock			Paid-in		Interest in		Stockholders’
	Earnings		income (loss)		Shares	Dollars		Shares	Dollars		Capital		Summit Holdings		Equity			Earnings		income		Shares	Dollars		Shares	Dollars		Capital		Summit Holdings		Equity
Balance - January 2, 2021	$	326,772	$	5,203	114,390,595	$	1,145	99	$	—	$	1,264,681	$	18,467	$	1,616,268

Net loss	(22,517)		—		—	—		—	—		—		(728)		(23,245)
LP Unit exchanges	—		—		711,794	7		—	—		4,744		(4,751)		—
Other comprehensive income, net of tax	—		1,635		—	—		—	—		—		45		1,680
Stock option exercises	—		—		863,338	9		—	—		15,911		—		15,920
Share-based compensation	—		—		—	—		—	—		5,363		—		5,363
Shares redeemed to settle taxes and other	—		—		678,605	6		—	—		(1,432)		—		(1,426)
Balance — April 3, 2021	$	304,255	$	6,838	116,644,332	$	1,167	99	$	—	$	1,289,267	$	13,033	$	1,614,560
Net loss	56,659		—		—	—		—	—		—		1,099		57,758
LP Unit exchanges	—		—		445,540	4		—	—		3,631		(3,635)		—
Other comprehensive income, net of tax	—		2,028		—	—		—	—		—		51		2,079
Stock option exercises	—		—		847,480	8		—	—		15,837		—		15,845
Share-based compensation	—		—		—	—		—	—		4,827		—		4,827
Shares redeemed to settle taxes and other	—		—		18,536	1		—	—		(148)		—		(147)
Balance — July 3, 2021	$	360,914	$	8,866	117,955,888	$	1,180	99	$	—	$	1,313,414	$	10,548	$	1,694,922
Net income	74,204		—		—	—		—	—		—		1,174		75,378
LP Unit exchanges	—		—		283,649	3		—	—		1,769		(1,772)		—
Other comprehensive loss, net of tax	—		(3,196)		—	—		—	—		—		(57)		(3,253)
Stock option exercises	—		—		33,438	—		—	—		651		—		651
Share-based compensation	—		—		—	—		—	—		4,685		—		4,685
Shares redeemed to settle taxes and other	—		—		291,975	3		—	—		(622)		—		(619)
Balance - October 2, 2021	$	435,118	$	5,670	118,564,950	$	1,186	99	$	—	$	1,319,897	$	9,893	$	1,771,764
Balance - January 1, 2022																	Balance - January 1, 2022	$	478,956	$	7,083	118,705,108	$	1,188	99	$	—	$	1,326,340	$	9,645	$	1,823,212

Net loss																	Net loss	(34,292)		—		—	—		—	—		—		(508)		(34,800)

Other comprehensive income, net of tax																	Other comprehensive income, net of tax	—		1,306		—	—		—	—		—		19		1,325
Stock option exercises																	Stock option exercises	—		—		1,589	—		—	—		27		—		27
Share-based compensation																	Share-based compensation	—		—		—	—		—	—		5,422		—		5,422
Repurchases of common stock																	Repurchases of common stock	(47,494)		—		(1,506,878)	(15)		—	—		(121)		121		(47,509)
Shares redeemed to settle taxes and other																	Shares redeemed to settle taxes and other	—		—		842,029	8		—	—		(1,120)		(68)		(1,180)
Balance - April 2, 2022																	Balance - April 2, 2022	$	397,170	$	8,389	118,041,848	$	1,181	99	$	—	$	1,330,548	$	9,209	$	1,746,497

Balance — January 2, 2021																	Balance — January 2, 2021	$	326,772	$	5,203	114,390,595	$	1,145	99	$	—	$	1,264,681	$	18,467	$	1,616,268
Net loss																	Net loss	(22,517)		—		—	—		—	—		—		(728)		(23,245)
LP Unit exchanges																	LP Unit exchanges	—		—		711,794	7		—	—		4,744		(4,751)		—
Other comprehensive income, net of tax																	Other comprehensive income, net of tax	—		1,635		—	—		—	—		—		45		1,680
Stock option exercises																	Stock option exercises	—		—		863,338	9		—	—		15,911		—		15,920
Share-based compensation																	Share-based compensation	—		—		—	—		—	—		5,363		—		5,363

Shares redeemed to settle taxes and other																	Shares redeemed to settle taxes and other	—		—		678,605	6		—	—		(1,432)		—		(1,426)
Balance — April 3, 2021																	Balance — April 3, 2021	$	304,255	$	6,838	116,644,332	$	1,167	99	$	—	$	1,289,267	$	13,033	$	1,614,560

~~Table of Contents~~

Summit Materials, Inc.
Accumulated
Other Class A Class B Additional Noncontrolling Total
Accumulated Comprehensive Common Stock Common Stock Paid-in Interest in Stockholders’
Earnings income (loss) Shares Dollars Shares Dollars Capital Summit Holdings Equity
Balance — December 28, 2019 $ 188,805 $ 3,448 113,309,385 $ 1,134 99 $ — $ 1,234,020 $ 17,366 $ 1,444,773
Net loss (44,979) — — — — — — (1,747) (46,726)
LP Unit exchanges — — 196,542 2 — — 1,132 (1,134) —
Other comprehensive loss, net of tax — (6,093) — — — — — (220) (6,313)
Stock option exercises — — 13,335 — — — 310 — 310
Share-based compensation — — — — — — 4,905 — 4,905
Shares redeemed to settle taxes and other — — 591,335 6 — — (1,096) — (1,090)
Balance — March 28, 2020 $ 143,826 $ (2,645) 114,110,597 $ 1,142 99 $ — $ 1,239,271 $ 14,265 $ 1,395,859
Net income 57,064 — — — — — — 1,823 58,887
Other comprehensive income, net of tax — 2,148 — — — — — 77 2,225
Share-based compensation — — — — — — 4,892 — 4,892
Shares redeemed to settle taxes and other — — 1,351 — — — — — —
Balance — June 27, 2020 $ 200,890 $ (497) 114,111,948 $ 1,142 99 $ — $ 1,244,163 $ 16,165 $ 1,461,863
Net income 90,730 — — — — — — 2,039 92,769
Other comprehensive income, net of tax — 1,472 — — — — — 52 1,524
Stock option exercises — — 1,069 — — — 18 — 18
Share-based compensation — — — — — — 13,322 — 13,322
Shares redeemed to settle taxes and other — — 10,894 — — — 3 (3) —
Balance — September 26, 2020 $ 291,620 $ 975 114,123,911 $ 1,142 99 $ — $ 1,257,506 $ 18,253 $ 1,569,496

See notes to unaudited consolidated financial statements.

Table of Contents

SUMMIT MATERIALS, INC.

��

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, except per share amounts or otherwise noted)

1.SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Summit Materials, Inc. (“Summit Inc.” and, together with its subsidiaries, “Summit,” “we,” “us,” “our” or the “Company”) is a vertically-integrated construction materials company. The Company is engaged in the production and sale of aggregates, cement, ready-mix concrete, asphalt paving mix and concrete products and owns and operates quarries, sand and gravel pits, 2 cement plants, cement distribution terminals, ready-mix concrete plants, asphalt plants and landfill sites. It is also engaged in paving and related services. The Company’s 3 operating and reporting segments are the West, East and Cement segments.

Substantially all of the Company’s construction materials, products and services are produced, consumed and performed outdoors, primarily in the spring, summer and fall. Seasonal changes and other weather-related conditions can affect the production and sales volumes of its products and delivery of services. Therefore, the financial results for any interim period are typically not indicative of the results expected for the full year. Furthermore, the Company’s sales and earnings are sensitive to national, regional and local economic conditions, weather conditions and to cyclical changes in construction spending, among other factors.

Summit Inc. is a holding corporation operating and controlling all of the business and affairs of Summit Materials Holdings L.P. (“Summit Holdings”) and its subsidiaries, and through Summit Holdings conducts its business. Summit Inc. owns the majority of the partnership interests of Summit Holdings (see Note 9, Stockholders’ Equity). Summit Materials, LLC (“Summit LLC”), an indirect wholly owned subsidiary of Summit Holdings, conducts the majority of our operations. Summit Materials Finance Corp. (“Summit Finance”), an indirect wholly owned subsidiary of Summit LLC, has jointly issued our Senior Notes as described below.

Basis of Presentation—These unaudited consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures typically included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and the notes thereto as of and for the year ended January ~~2, 2021.~~1, 2022. The Company continues to follow the accounting policies set forth in those audited consolidated financial statements.

Management believes that these consolidated interim financial statements include all adjustments, normal and recurring in nature, that are necessary to present fairly the financial position of the Company as of ~~October~~April 2, ~~2021,~~2022, the results of operations for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020~~April 3, 2021 and cash flows for the ~~nine~~three months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020.~~April 3, 2021.

Principles of Consolidation—The consolidated financial statements include the accounts of Summit Inc. and its majority owned subsidiaries. All intercompany balances and transactions have been eliminated.

For a summary of the changes in Summit Inc.’s ownership of Summit Holdings, see Note 9, Stockholders’ Equity.

Use of Estimates—Preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenue and expenses. Such estimates include the valuation of accounts receivable, inventories, valuation of deferred tax assets, goodwill, intangibles and other long-lived assets, tax receivable agreement ("TRA") liability, pension and other postretirement obligations and asset retirement obligations. Estimates also include revenue earned on contracts and costs to complete contracts. Most of the Company’s paving and related services are performed under fixed unit-price contracts with state and local governmental entities. Management regularly evaluates its estimates and assumptions based on historical experience and other factors, including the current economic environment. As future events and their effects cannot be determined with precision, actual results can differ significantly from estimates made. Changes in estimates, including those resulting from continuing changes in the economic environment, are reflected in the Company’s consolidated financial statements when the change in estimate occurs.

Table of Contents

Business and Credit Concentrations—The Company’s operations are conducted primarily across 21 U.S. states and in British Columbia, Canada, with the most significant revenue generated in Texas, Utah, Kansas and Missouri. The Company’s accounts receivable consist primarily of amounts due from customers within these areas. Therefore, collection of these accounts is dependent on the economic conditions in the aforementioned states, as well as specific situations affecting individual customers. Credit granted within the Company’s trade areas has been granted to many customers, and management does not believe that a significant concentration of credit exists with respect to any individual customer or group of customers. No single customer accounted for more than 10% of the Company’s total revenue in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 or ~~September 26, 2020.~~April 3, 2021.

Revenue Recognition—We earn revenue from the sale of products, which primarily include aggregates, cement, ready-mix concrete and asphalt, but also include concrete products, and from the provision of services, which are primarily paving and related services.

Products: Revenue for product sales is recognized when evidence of an arrangement exists and when control passes, which generally is when the product is shipped.

Services: We earn revenue from the provision of services, which are primarily paving and related services, which are typically calculated using monthly progress based on the percentage of completion or a customer’s engineer review of progress.

The majority of our construction service contracts are completed within one year, but may occasionally extend beyond this time frame. The majority of our construction service contracts are for work that occurs mostly during the spring, summer and fall. We generally measure progress toward completion on long-term paving and related services contracts based on the proportion of costs incurred to date relative to total estimated costs at completion.

The percentage of completion method of accounting involves the use of various estimating techniques to project costs at completion, and in some cases includes estimates of recoveries asserted against the customer for changes in specifications or other disputes.

Earnings per Share—The Company computes basic earnings per share attributable to stockholders by dividing income attributable to Summit Inc. by the weighted-average shares of Class A common stock outstanding. Diluted earnings per share reflects the potential dilution beyond shares for basic earnings per share that could occur if securities or other contracts to issue common stock were exercised, converted into common stock, or resulted in the issuance of common stock that would have shared in the Company’s earnings. Since the Class B common stock has no economic value, those shares are not included in the weighted-average common share amount for basic or diluted earnings per share. In addition, as the shares of Class A common stock are issued by Summit Inc., the earnings and equity interests of noncontrolling interests are not included in basic earnings per share.

Prior Period Reclassifications — We reclassified ~~$32.6 million and $93.1~~$1.2 million of ~~fixed overhead expenses related~~other current assets to ~~production activities from general and administrative expenses to cost of revenue~~current assets held for sale for the ~~three and nine months~~year ended ~~September 26, 2020, respectively,~~January 1, 2022 to ~~conform to~~be consistent with the current year presentation. In addition, we reclassified $1.6 million and $5.7 million of gain on sale of property, plant and equipment from general and administrative expenses to a separate line item included within operating income, also to conform to the current year presentation. Lastly, we reclassified $0.4 million and $1.5 million of transaction costs from its own line item within operating income into general and administrative expenses for the three and nine months ended September 26, 2020, respectively, to conform to the current year presentation. We believe these reclassifications enhance the comparability of our financial statements to others in the industry and had no material impact on previously reported operating income or Adjusted EBITDA, a non-GAAP measure described in Note 14, Segment Information, below.

~~New Accounting Standards —~~ ~~In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15,~~ ~~Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,~~ which reduces the accounting complexity of implementing a cloud computing service arrangement. The ASU aligns the capitalization of implementation costs among hosting arrangements and costs incurred to develop internal-use software. We adopted this ASU in the first quarter of 2020 and the adoption of this ASU did not have a material impact on the consolidated financial statements.

~~In August 2018, the FASB issued ASU No. 2018-14,~~ ~~Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework Changes to The Disclosure Requirements for Defined Benefits Plans, which~~

~~Table of Contents~~

modifies the disclosure requirements of employer-sponsored defined benefit and other postretirement benefits plans. The ASU is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. We adopted this ASU in the fourth quarter of 2020 and the adoption of this ASU did not have a material impact on the consolidated financial statements.

2.ACQUISITIONS, DISPOSITIONS, GOODWILL AND INTANGIBLES

The Company has completed numerous acquisitions since its formation, which have been financed through a combination of debt and equity funding and available cash. The operations of each acquisition have been included in the Company’s consolidated results of operations since the respective closing dates of the acquisitions. The Company measures all assets acquired and liabilities assumed at their acquisition-date fair value. Goodwill acquired during a business combination has an indefinite life and is not amortized. ~~The following table summarizes the Company’s acquisitions by region and period:~~

Nine months ended Year ended
October 2, 2021 January 2, 2021
West — 2
East 2 1

The purchase price allocation, primarily the valuation of property, plant and equipment for the acquisitions completed during the nine months ended October 2, 2021, as well as the acquisitions completed during 2020 that occurred after September 26, 2020, have not yet been finalized due to the recent timing of the acquisitions, status of the valuation of property, plant and equipment and finalization of related tax returns. The following table summarizes aggregated information regarding the fair values of the assets acquired and liabilities assumed as of the respective acquisition dates:

Nine months ended Year ended
October 2, 2021 January 2, 2021
Financial assets $ — $ 8,696
Inventories 173 2,856
Property, plant and equipment 7,958 130,042
Intangible assets 702 —
Other assets — 2,790
Financial liabilities (121) (4,469)
Other long-term liabilities (300) (16,069)
Net assets acquired 8,412 123,846
Goodwill — —
Purchase price 8,412 123,846
Acquisition-related liabilities (1,149) —
Other — (369)
Net cash paid for acquisitions $ 7,263 $ 123,477

Changes in the carrying amount of goodwill, by reportable segment, from January 1, 2022 to April 2, ~~2021 to October 2, 2021~~2022 are summarized as follows:


		West		East		Cement		Total			West		East		Cement		Total
Balance—January 2, 2021		$	586,209	$	410,426	$	204,656	$	1,201,291
Balance—January 1, 2022										Balance—January 1, 2022	$	570,509	$	388,585	$	204,656	$	1,163,750
Dispositions (1)	Dispositions (1)	(16,222)		(10,520)		—		(26,742)		Dispositions (1)	—		(12,036)		—		(12,036)
Foreign currency translation adjustments	Foreign currency translation adjustments	306		—		—		306		Foreign currency translation adjustments	621		—		—		621
Balance—October 2, 2021		$	570,293	$	399,906	$	204,656	$	1,174,855
Goodwill allocated to assets held for sale										Goodwill allocated to assets held for sale	—		(6,059)		—		(6,059)
Balance—April 2, 2022										Balance—April 2, 2022	$	571,130	$	370,490	$	204,656	$	1,146,276

(1) Reflects goodwill derecognition from dispositions completed during the ~~nine~~three months ended ~~October~~April 2, ~~2021.~~2022.

Table of Contents

The Company’s intangible assets subject to amortization are primarily composed of operating permits, mineral lease agreements and reserve rights. Operating permits relate to permitting and zoning rights acquired outside of a business combination. The assets related to mineral lease agreements reflect the submarket royalty rates paid under agreements, primarily for extracting aggregates. The values were determined as of the respective acquisition dates by a comparison of market-royalty rates. The reserve rights relate to aggregate reserves to which the Company has certain rights of ownership,

~~Table of Contents~~

but does not own the reserves. The intangible assets are amortized on a straight-line basis over the lives of the leases or permits. The following table shows intangible assets by type and in total:


		October 2, 2021						January 2, 2021							April 2, 2022						January 1, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Operating permits	Operating permits	$	33,671	$	(2,206)	$	31,465	$	33,671	$	(1,207)	$	32,464	Operating permits	$	33,671	$	(2,987)	$	30,684	$	33,671	$	(2,467)	$	31,204
Mineral leases	Mineral leases	19,927		(8,497)		11,430		19,225		(7,571)		11,654		Mineral leases	15,463		(6,105)		9,358		19,927		(8,922)		11,005
Reserve rights	Reserve rights	25,586		(3,123)		22,463		6,234		(2,504)		3,730		Reserve rights	25,586		(3,535)		22,051		25,586		(3,329)		22,257

Other	Other	5,463		(483)		4,980		586		(582)		4		Other	5,286		(364)		4,922		5,481		(551)		4,930
Total intangible assets	Total intangible assets	$	84,647	$	(14,309)	$	70,338	$	59,716	$	(11,864)	$	47,852	Total intangible assets	$	80,006	$	(12,991)	$	67,015	$	84,665	$	(15,269)	$	69,396

Amortization expense totaled $0.9 million and ~~$2.8~~$1.0 million for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022 and ~~$0.7 million and $2.3 million for the three and nine months ended September 26, 2020,~~April 3, 2021, respectively. The estimated amortization expense for the intangible assets for each of the five years subsequent to ~~October~~April 2, ~~2021~~2022 is as follows:


2021 (three months)		$	1,034
2022		4,141
2022 (nine months)				2022 (nine months)	$	2,830
2023	2023	4,008		2023	3,780
2024	2024	3,913		2024	3,754
2025	2025	3,868		2025	3,710
2026	2026	3,724		2026	3,661
2027				2027	3,649
Thereafter	Thereafter	49,650		Thereafter	45,631
Total	Total	$	70,338	Total	$	67,015

In the first ~~nine months~~quarter of ~~2021,~~2022, as part of the Company's strategy to rationalize assets, the Company sold ~~4 businesses~~1 business in the East ~~segment and 1 in the West~~ segment, resulting in cash proceeds of ~~$103.6~~$47.8 million and a total gain on disposition of ~~$15.3~~$14.2 million.

As of April 2, 2022, the Company has operations in the East Segment that are classified as assets held for sale. Asset and liabilities held for sale as of April 2, 2022 and January 1, 2022 were as follows:

Table of Contents


	April 2, 2022		January 1, 2022
Cash and cash equivalents	$	175	$	—
Accounts receivable, net	7,124		—
Costs and estimated earnings in excess of billings	1,333		—
Inventories	26,361		—
Other current assets	1,579		1,236
Total current assets held for sale	$	36,572	$	1,236

Property, plant and equipment, net	$	77,988	$	—
Goodwill	6,059		—
Intangible assets, net	1,858		—
Operating lease right-of-use assets	998		—
Other assets	15,279		—
Total noncurrent assets held for sale	$	102,182	$	—

Accounts payable	$	7,844	$	—
Accrued expenses	3,873		—
Current operating lease liabilities	403		—
Billings in excess of costs and estimated earnings	990		—
Total current liabilities held for sale	$	13,110	$	—

Noncurrent operating lease liabilities	$	538	$	—
Other noncurrent liabilities	2,493		—
Total noncurrent liabilities held for sale	$	3,031	$	—

The above stated amounts classified as held for sale have been excluded from the tables shown in Note 2 - Intangible Assets, Note 3 - Accounts Receivable, net, Note 4 - Inventories, Note 5 - Accrued Expenses and Note 11 - Leases.

3.REVENUE RECOGNITION

We derive our revenue predominantly by selling construction materials, products and providing paving and related services. Construction materials consist of aggregates and cement. Products consist of related downstream products, including ready-mix concrete, asphalt paving mix and concrete products. Paving and related service revenue is generated primarily from the asphalt paving services that we provide.

Revenue by product for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020~~April 3, 2021 is as follows:


		Three months ended				Nine months ended					Three months ended
		October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020				April 2, 2022		April 3, 2021
Revenue by product*:	Revenue by product*:									Revenue by product*:
Aggregates	Aggregates	$	160,317	$	136,396	$	431,201	$	362,546	Aggregates		$	123,393	$	117,388
Cement	Cement	87,645		82,698		207,953		188,854		Cement		42,554		38,139
Ready-mix concrete	Ready-mix concrete	183,114		179,124		525,208		488,710		Ready-mix concrete		157,563		158,233
Asphalt	Asphalt	116,364		128,125		238,674		255,992		Asphalt		17,138		28,375
Paving and related services	Paving and related services	112,671		136,191		257,966		280,446		Paving and related services		30,610		43,215
Other	Other	57,129		47,085		151,999		131,270		Other		49,689		42,494
Total revenue	Total revenue	$	717,240	$	709,619	$	1,813,001	$	1,707,818	Total revenue		$	420,947	$	427,844

*Revenue from liquid asphalt terminals is included in asphalt revenue.

Accounts receivable, net consisted of the following as of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021:~~1, 2022:

109

Table of Contents


		October 2, 2021		January 2, 2021			April 2, 2022		January 1, 2022
Trade accounts receivable	Trade accounts receivable	$	268,188	$	191,871	Trade accounts receivable	$	217,435	$	230,714
Construction contract receivables	Construction contract receivables	53,647		47,179		Construction contract receivables	16,243		47,054
Retention receivables	Retention receivables	14,894		18,824		Retention receivables	10,354		13,094
Receivables from related parties	Receivables from related parties	877		1,339		Receivables from related parties	—		292
Accounts receivable	Accounts receivable	337,606		259,213		Accounts receivable	244,032		291,154
Less: Allowance for doubtful accounts	Less: Allowance for doubtful accounts	(4,255)		(4,517)		Less: Allowance for doubtful accounts	(4,193)		(3,928)
Accounts receivable, net	Accounts receivable, net	$	333,351	$	254,696	Accounts receivable, net	$	239,839	$	287,226

Retention receivables are amounts earned by the Company but held by customers until paving and related service contracts and projects are near completion or fully completed. Amounts are generally billed and collected within one year.

4.INVENTORIES

Inventories consisted of the following as of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021:~~1, 2022:

October 2, 2021 January 2, 2021
Aggregate stockpiles $ 132,325 $ 137,938
Finished goods 31,334 32,993
Work in process 9,189 9,281
Raw materials 22,464 20,096
Total $ 195,312 $ 200,308


	April 2, 2022		January 1, 2022
Aggregate stockpiles	$	123,981	$	130,640
Finished goods	37,882		22,690
Work in process	6,974		8,277
Raw materials	18,172		19,153
Total	$	187,009	$	180,760

5.ACCRUED EXPENSES

Accrued expenses consisted of the following as of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021:~~1, 2022:


		October 2, 2021		January 2, 2021			April 2, 2022		January 1, 2022
Interest	Interest	$	8,891	$	21,860	Interest	$	9,063	$	22,762
Payroll and benefits	Payroll and benefits	37,906		46,026		Payroll and benefits	24,556		38,894
Finance lease obligations	Finance lease obligations	17,424		24,601		Finance lease obligations	14,234		17,624
Insurance	Insurance	19,676		18,355		Insurance	20,993		20,480
Non-income taxes	Non-income taxes	23,834		15,669		Non-income taxes	22,737		19,409
Deferred asset purchase payments	Deferred asset purchase payments	4,538		9,749		Deferred asset purchase payments	3,515		4,912
Professional fees	Professional fees	1,152		828		Professional fees	1,690		1,524
Other (1)	Other (1)	23,957		23,482		Other (1)	16,781		21,871
Total	Total	$	137,378	$	160,570	Total	$	113,569	$	147,476

(1)Consists primarily of current portion of asset retirement obligations and miscellaneous accruals.

6.DEBT

Debt consisted of the following as of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021:~~1, 2022:


	April 2, 2022		January 1, 2022
Term Loan, due 2024:
$608.4 million and $610.0 million, net of $0.6 million and $0.7 million discount at April 2, 2022 and January 1, 2022, respectively	$	607,767	$	609,298
61⁄2% Senior Notes, due 2027	300,000		300,000
51⁄4% Senior Notes, due 2029	700,000		700,000
Total	1,607,767		1,609,298
Current portion of long-term debt	6,354		6,354
Long-term debt	$	1,601,413	$	1,602,944

1110

Table of Contents

October 2, 2021 January 2, 2021
Term Loan, due 2024:
$611.5 million and $616.3 million, net of $0.7 million and $0.9 million discount at October 2, 2021 and January 2, 2021, respectively $ 610,830 $ 615,425
51⁄8% Senior Notes, due 2025
— 300,000
61⁄2% Senior Notes, due 2027
300,000 300,000
51⁄4% Senior Notes, due 2029
700,000 700,000
Total 1,610,830 1,915,425
Current portion of long-term debt 6,354 6,354
Long-term debt $ 1,604,476 $ 1,909,071

The contractual payments of long-term debt, including current maturities, for the five years subsequent to ~~October~~April 2, ~~2021,~~2022, are as follows:


2021 (three months)		$	1,588
2022		6,354
2022 (nine months)				2022 (nine months)	$	4,765
2023	2023	6,354		2023	6,353
2024	2024	597,252		2024	597,254
2025	2025	—		2025	—
2026	2026	—		2026	—
2027				2027	300,000
Thereafter	Thereafter	1,000,000		Thereafter	700,000
Total	Total	1,611,548		Total	1,608,372
Less: Original issue net discount	Less: Original issue net discount	(718)		Less: Original issue net discount	(605)
Less: Capitalized loan costs	Less: Capitalized loan costs	(12,487)		Less: Capitalized loan costs	(11,363)
Total debt	Total debt	$	1,598,343	Total debt	$	1,596,404

Senior Notes— On ~~September 27, 2021,~~August 11, 2020, Summit LLC and Summit Finance (together, the “Issuers”) redeemed all $300.0 million in aggregate principal amount of their 5.125% senior notes due June 1, 2025 (the "2025 Notes") using existing cash on hand at a price equal to par plus an applicable premium and the indenture under which the 2025 Notes were issued was satisfied and discharged. 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.

~~On August 11, 2020, the Issuers~~ issued $700.0 million in aggregate principal amount of 5.250% senior notes due January 15, 2029 (the “2029 Notes”). The 2029 Notes were issued at 100.0% of their par value with proceeds of $690.4 million, net of related fees and expenses. The 2029 Notes were issued under an indenture dated August 11, 2020 (the "2020 Indenture"). The 2020 Indenture contains covenants limiting, among other things, Summit LLC and its restricted subsidiaries’ ability to incur additional indebtedness or issue certain preferred shares, pay dividends, redeem stock or make other distributions, make certain investments, sell or transfer certain assets, create liens, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets, enter into certain transactions with affiliates, and designate subsidiaries as unrestricted subsidiaries. The 2020 Indenture also contains customary events of default. Interest on the 2029 Notes is payable semi-annually on January 15 and July 15 of each year commencing on January 15, 2021.

On March 15, 2019, the Issuers issued $300.0 million in aggregate principal amount of 6.500% senior notes due March 15, 2027 (the “2027 Notes”). The 2027 Notes were issued at 100.0% of their par value with proceeds of $296.3 million, net of related fees and expenses. The 2027 Notes were issued under an indenture dated March 25, 2019, the terms of which are generally consistent with the 2020 Indenture. Interest on the 2027 Notes is payable semi-annually on March 15 and September 15 of each year commencing on September 15, 2019.

As of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021,~~1, 2022, the Company was in compliance with all covenants under the applicable indentures.

Senior Secured Credit Facilities— Summit LLC has credit facilities that provide for term loans in an aggregate amount of $650.0 million and revolving credit commitments in an aggregate amount of $345.0 million (the “Senior Secured Credit Facilities”). Under the Senior Secured Credit Facilities, required principal repayments of 0.25% of the refinanced aggregate

~~Table of Contents~~

amount of term debt are due on the last business day of each March, June, September and December commencing with the March 2018 payment. The unpaid principal balance is due in full on the maturity date, which is November 21, 2024.

The revolving credit facility bears interest per annum equal to, at Summit LLC’s option, either (i) a base rate determined by reference to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate of Bank of America, N.A. and (c) LIBOR plus 1.00%, plus an applicable margin of 2.00% for base rate loans or (ii) a LIBOR rate determined by reference to Reuters prior to the interest period relevant to such borrowing adjusted for certain additional costs plus an applicable margin of 3.00% for LIBOR rate loans. The maturity date with respect to revolving credit commitments under the revolving credit facility is February 25, 2024.

There were no outstanding borrowings under the revolving credit facility as of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021,~~1, 2022, with borrowing capacity of ~~$329.1~~$324.6 million remaining as of ~~October~~April 2, ~~2021,~~2022, which is net of ~~$15.9~~$20.4 million of outstanding letters of credit. The outstanding letters of credit are renewed annually and support required bonding on construction projects, large leases, workers compensation claims and the Company’s insurance liabilities.

Summit LLC’s Consolidated First Lien Net Leverage Ratio, as such term is defined in the Credit Agreement, should be no greater than 4.75:1.0 as of each quarter-end. As of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021,~~1, 2022, Summit LLC was in compliance with all financial covenants.

Table of Contents

Summit LLC’s wholly-owned domestic subsidiary companies, subject to certain exclusions and exceptions, are named as subsidiary guarantors of the Senior Notes and the Senior Secured Credit Facilities. In addition, Summit LLC has pledged substantially all of its assets as collateral, subject to certain exclusions and exceptions, for the Senior Secured Credit Facilities.

The following table presents the activity for the deferred financing fees for the ~~nine~~three months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020:~~April 3, 2021:


	Deferred financing fees
Balance—January 1, 2022	$	13,049

Amortization	(692)

Balance—April 2, 2022	$	12,357


Balance—January 2, 2021	$	18,367

Amortization	~~(2,510)~~(836)
~~Write off of deferred financing fees~~	~~(2,116)~~
Balance—~~October 2,~~April 3, 2021	$	~~13,741~~


~~Balance—December 28, 2019~~	$	~~15,436~~
~~Loan origination fees~~	~~9,565~~
~~Amortization~~	~~(2,499)~~
~~Write off of deferred financing fees~~	~~(3,338)~~
~~Balance—September 26, 2020~~	$	~~19,164~~17,531

Other—On January 15, 2015, the Company’s wholly-owned subsidiary in British Columbia, Canada entered into an agreement with HSBC Bank Canada for a (i) $6.0 million Canadian dollar (“CAD”) revolving credit commitment to be used for operating activities that bears interest per annum equal to the bank’s prime rate plus 0.20%, (ii) $0.5 million CAD revolving credit commitment to be used for capital equipment that bears interest per annum at the bank’s prime rate plus 0.90% and (iii) $0.3 million CAD revolving credit commitment to provide guarantees on behalf of that subsidiary. There were no amounts outstanding under this agreement as of ~~October~~April 2, ~~2021~~2022 or January ~~2, 2021.~~1, 2022, which may be terminated upon demand.

7.INCOME TAXES

Summit Inc.’s tax provision includes its proportional share of Summit Holdings’ tax attributes. Summit Holdings’ subsidiaries are primarily limited liability companies but do include certain entities organized as C corporations and a Canadian subsidiary. The tax attributes related to the limited liability companies are passed on to Summit Holdings and then to its partners, including Summit Inc. The tax attributes associated with the C corporation and Canadian subsidiaries are fully reflected in the Company’s accounts.

~~Table of Contents~~

primarily due to (1) ~~unrecognized tax benefits in 2020, (2)~~ state taxes, ~~(3)~~(2) tax depletion expense in excess of the expense recorded under U.S. GAAP, (3) basis differences in assets divested, (4) the minority interest in the Summit Holdings partnership that is allocated outside of the Company and (5) various other items such as limitations on meals and entertainment, certain stock compensation and other costs. In the first quarter of 2020, we recorded the impact of the Coronavirus Aid, Relief and Economic Stability Act ("CARES Act") enacted into law in late March 2020, which reduced our unrecognized tax benefits by approximately $9.5 million. In the third quarter of 2020, final regulations were issued clarifying portions of the Tax Cuts and Jobs Act of 2017 ("TCJA"). Under the provisions of the final regulations, we reversed unrecognized tax benefits of $32.9 million in the third quarter of 2020.

As of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021,~~1, 2022, Summit Inc. had a valuation allowance of $1.7 million, which relates to certain deferred tax assets in taxable entities where realization is not more likely than not.

No material interest or penalties were recognized in income tax expense during the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020.~~April 3, 2021.

Tax Receivable Agreement—The Company is party to a TRA with certain current and former holders of LP Units that provides for the payment by Summit Inc. to exchanging holders of LP Units of 85% of the benefits, if any, that Summit Inc. actually realizes (or, under certain circumstances such as an early termination of the TRA, is deemed to realize) as a result of increases in the tax basis of tangible and intangible assets of Summit Holdings and certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA.

In the ~~nine~~three months ended ~~October~~April 2, ~~2021, 1,440,983~~2022, there were no LP Units ~~were~~ acquired by Summit Inc. in exchange for an equal number of newly-issued shares of Summit Inc.’s Class A common stock. These exchanges resulted in net new deferred tax assets of approximately $10.8 million. As we determined that the deferred tax assets created from these exchanges are realizable and payment under the TRA is considered probable, we have recorded 85% of the increase in deferred tax assets as TRA liability and the remainder as an adjustment to additional paid in capital. As of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021,~~1, 2022, we had recorded ~~$330.9~~$326.5 million and ~~$321.7~~$326.5 million of TRA liability, respectively.

Tax Distributions – The holders of Summit Holdings’ LP Units, including Summit Inc., incur U.S. federal, state and local income taxes on their share of any taxable income of Summit Holdings. The limited partnership agreement of Summit

Table of Contents

Holdings provides for pro rata cash distributions (“tax distributions”) to the holders of the LP Units in an amount generally calculated to provide each holder of LP Units with sufficient cash to cover its tax liability in respect of the LP Units. In general, these tax distributions are computed based on Summit Holdings’ estimated taxable income allocated to Summit Inc. multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate in New York, New York. Summit Holdings did not make any tax distributions in the ~~nine~~three months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020.~~April 3, 2021.

8.EARNINGS PER SHARE

Basic earnings per share is computed by dividing net earnings by the weighted average common shares outstanding and diluted net earnings is computed by dividing net earnings, adjusted for changes in the earnings allocated to Summit Inc. as a result of the assumed conversion of LP Units, by the weighted-average common shares outstanding assuming dilution.

The following table shows the calculation of basic and diluted earnings per share:

~~Table of Contents~~


		Three months ended				Nine months ended					Three months ended
		October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020				April 2, 2022		April 3, 2021
Net income attributable to Summit Inc.		$	74,204	$	90,730	$	108,346	$	102,815
Net loss attributable to Summit Inc.										Net loss attributable to Summit Inc.		$	(34,292)	$	(22,517)

Weighted average shares of Class A stock outstanding	Weighted average shares of Class A stock outstanding	118,272,955		114,116,564		117,040,207		113,943,292		Weighted average shares of Class A stock outstanding		118,777,341		115,411,204
Add: Nonvested restricted stock awards of retirement eligible shares	Add: Nonvested restricted stock awards of retirement eligible shares	200,575		320,343		218,224		145,155		Add: Nonvested restricted stock awards of retirement eligible shares		160,125		253,521
Weighted average basic shares outstanding		118,473,530		114,436,907		117,258,431		114,088,447
Basic earnings per share		$	0.63	$	0.79	$	0.92	$	0.90
Weighted average shares outstanding										Weighted average shares outstanding		118,937,466		115,664,725
Basic loss per share										Basic loss per share		$	(0.29)	$	(0.19)

Diluted net income attributable to Summit Inc.		$	74,204	$	90,730	$	108,346	$	102,815
Diluted net loss attributable to Summit Inc.										Diluted net loss attributable to Summit Inc.		$	(34,292)	$	(22,517)

Weighted average shares of Class A stock outstanding		118,272,955		114,116,564		117,040,207		113,943,292

Weighted average shares outstanding										Weighted average shares outstanding		118,937,466		115,411,204
Add: weighted average of LP Units										Add: weighted average of LP Units		—		—
Add: stock options	Add: stock options	125,164		—		310,990		—		Add: stock options		—		—
Add: warrants	Add: warrants	14,405		—		17,573		—		Add: warrants		—		—
Add: restricted stock units	Add: restricted stock units	680,980		263,886		812,702		450,353		Add: restricted stock units		—		—
Add: performance stock units	Add: performance stock units	198,142		91,721		179,143		63,631		Add: performance stock units		—		—
Weighted average dilutive shares outstanding	Weighted average dilutive shares outstanding	119,291,646		114,472,171		118,360,615		114,457,276		Weighted average dilutive shares outstanding		118,937,466		115,411,204
Diluted earnings per share		$	0.62	$	0.79	$	0.92	$	0.90
Diluted loss per share										Diluted loss per share		$	(0.29)	$	(0.20)

Excluded from the above calculations were the shares noted below as they were antidilutive:


		Three months ended		Nine months ended			Three months ended
		October 2, 2021	September 26, 2020	October 2, 2021	September 26, 2020			April 2, 2022	April 3, 2021
Antidilutive shares:	Antidilutive shares:					Antidilutive shares:
LP Units	LP Units	1,594,272	3,053,115	2,031,090	3,086,819	LP Units		1,314,006	2,613,209
Time-vesting stock options	Time-vesting stock options	—	2,095,929	—	2,095,929	Time-vesting stock options		290,944	1,175,135
Warrants	Warrants	—	100,037	—	100,037	Warrants		31,519	43,166
Time-vesting restricted stock units	Time-vesting restricted stock units	—	—	—	—	Time-vesting restricted stock units		1,379,251	1,894,877
Market-based restricted stock units	Market-based restricted stock units	—	—	—	—	Market-based restricted stock units		416,096	410,357

9.STOCKHOLDERS’ EQUITY

During ~~the nine months ended October 2,~~ 2021, ~~and September 26, 2020,~~ certain limited partners of Summit Holdings exchanged their LP Units for shares of Class A common stock of Summit Inc.

In March 2022, our Board of Directors authorized a share repurchase program, whereby we can repurchase up to $250 million of our Class A common stock. During the first quarter of 2022, we repurchased 1.5 million shares of Class A common stock for $47.5 million. These shares were retired upon purchase.

The following table summarizes the changes in our ownership of Summit Holdings:

Summit Inc.
Shares (Class A) LP Units Total Summit Inc.
Ownership
Percentage
Balance — January 2, 2021 114,390,595 2,873,170 117,263,765 97.5 %
Exchanges during period 1,440,983 (1,440,983) —
Stock option exercises 1,744,256 — 1,744,256
Other equity transactions 989,116 — 989,116
Balance — October 2, 2021 118,564,950 1,432,187 119,997,137 98.8 %
Balance — December 28, 2019 113,309,385 3,249,657 116,559,042 97.2 %
Exchanges during period 196,542 (196,542) —
Stock option exercises 14,404 — 14,404
Other equity transactions 603,580 — 603,580
Balance — September 26, 2020 114,123,911 3,053,115 117,177,026 97.4 %

Table of Contents


	Summit Inc. Shares (Class A)	LP Units	Total	Summit Inc. Ownership Percentage
Balance — January 1, 2022	118,705,108	1,314,006	120,019,114	98.9	%

Stock option exercises	1,589	—	1,589
Repurchases of common stock	(1,506,878)	—	(1,506,878)
Other equity transactions	842,029	—	842,029
Balance — April 2, 2022	118,041,848	1,314,006	119,355,854	98.9	%


Balance — January 2, 2021	114,390,595	2,873,170	117,263,765	97.5	%
Exchanges during period	711,794	(711,794)	—
Stock option exercises	863,338	—	863,338
Other equity transactions	678,605	—	678,605
Balance — April 3, 2021	116,644,332	2,161,376	118,805,708	98.2	%

Summit Inc. is Summit Holdings’ primary beneficiary and thus consolidates Summit Holdings in its consolidated financial statements with a corresponding noncontrolling interest reclassification, which was ~~1.2%~~1.1% and ~~2.5%~~1.1% as of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021,~~1, 2022, respectively.

~~Table of Contents~~

Accumulated other comprehensive income (loss) —The changes in each component of accumulated other comprehensive income (loss) consisted of the following:


									Change in retirement plans		Foreign currency translation adjustments		Accumulated other comprehensive income (loss)
Balance — January 1, 2022								Balance — January 1, 2022	$	1,508	$	5,575	$	7,083

Foreign currency translation adjustment, net of tax								Foreign currency translation adjustment, net of tax	—		1,306		1,306

Balance — April 2, 2022								Balance — April 2, 2022	$	1,508	$	6,881	$	8,389

		Change in retirement plans		Foreign currency translation adjustments		Accumulated other comprehensive income (loss)
Balance — January 2, 2021	Balance — January 2, 2021	$	533	$	4,670	$	5,203	Balance — January 2, 2021	$	533	$	4,670	$	5,203

Foreign currency translation adjustment, net of tax	Foreign currency translation adjustment, net of tax	—		467		467		Foreign currency translation adjustment, net of tax	—		1,635		1,635

Balance — October 2, 2021		$	533	$	5,137	$	5,670

Balance — December 28, 2019		$	2,171	$	1,277	$	3,448

Foreign currency translation adjustment, net of tax		—		(2,473)		(2,473)

Balance — September 26, 2020		$	2,171	$	(1,196)	$	975
Balance — April 3, 2021								Balance — April 3, 2021	$	533	$	6,305	$	6,838

10.SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information is as follows:


		Nine months ended					Three months ended
		October 2, 2021		September 26, 2020			April 2, 2022		April 3, 2021
Cash payments:	Cash payments:					Cash payments:
Interest	Interest	$	77,890	$	86,427	Interest	$	31,789	$	29,476
Payments for income taxes, net	Payments for income taxes, net	6,694		1,131		Payments for income taxes, net	1,542		2,312
Operating cash payments on operating leases	Operating cash payments on operating leases	7,894		8,372		Operating cash payments on operating leases	2,455		2,928
Operating cash payments on finance leases	Operating cash payments on finance leases	1,722		2,402		Operating cash payments on finance leases	372		655
Finance cash payments on finance leases	Finance cash payments on finance leases	13,739		11,528		Finance cash payments on finance leases	5,949		5,834
Non cash financing activities:	Non cash financing activities:					Non cash financing activities:
Right of use assets obtained in exchange for operating lease obligations	Right of use assets obtained in exchange for operating lease obligations	$	6,476	$	2,931	Right of use assets obtained in exchange for operating lease obligations	$	5,416	$	3,081
Right of use assets obtained in exchange for finance leases obligations	Right of use assets obtained in exchange for finance leases obligations	600		17,605		Right of use assets obtained in exchange for finance leases obligations	248		588
Exchange of LP Units to shares of Class A common stock	Exchange of LP Units to shares of Class A common stock	43,796		4,648		Exchange of LP Units to shares of Class A common stock	—		19,784

1614

Table of Contents

11.LEASES

We lease construction and office equipment, distribution facilities and office space. Leases with an initial term of 12 months or less, including month to month leases, are not recorded on the balance sheet. Lease expense for short-term leases is recognized on a straight line basis over the lease term. For lease agreements we have entered into or reassessed we combine lease and nonlease components. While we also own mineral leases for mining operations, those leases are outside the scope of ~~ASU~~Accounting Standards Update No. 2016-2, Leases (Topic 842). Assets acquired under finance leases are included in property, plant and equipment.

Many of our leases include options to purchase the leased equipment. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The components of lease expense were as follows:

1715

Table of Contents


		Three months ended				Nine months ended										Three months ended
		October 2, 2021		September 26, 2020		October 2, 2021			September 26, 2020										April 2, 2022		April 3, 2021
Operating lease cost	Operating lease cost	$	1,755	$	2,478	$	5,175		$	7,576		Operating lease cost							$	2,512	$	1,727
Variable lease cost	Variable lease cost	90		90		263			253			Variable lease cost							113		72
Short-term lease cost	Short-term lease cost	12,373		14,335		30,517			33,369			Short-term lease cost							8,248		7,301
Financing lease cost:	Financing lease cost:											Financing lease cost:
Amortization of right-of-use assets	Amortization of right-of-use assets	2,168		3,439		7,835			9,307			Amortization of right-of-use assets							1,986		3,050
Interest on lease liabilities	Interest on lease liabilities	475		780		1,689			2,329			Interest on lease liabilities							369		657
Total lease cost	Total lease cost	$	16,861	$	21,122	$	45,479		$	52,834		Total lease cost							$	13,228	$	12,807

						October 2, 2021			January 2, 2021				April 2, 2022			January 1, 2022
Supplemental balance sheet information related to leases:	Supplemental balance sheet information related to leases:											Supplemental balance sheet information related to leases:
Operating leases:	Operating leases:											Operating leases:
Operating lease right-of-use assets	Operating lease right-of-use assets					$	27,339		$	28,543		Operating lease right-of-use assets	$	28,766		$	30,150

Current operating lease liabilities	Current operating lease liabilities					$	6,818		$	8,188		Current operating lease liabilities	$	5,934		$	6,497
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities					21,596			21,500			Noncurrent operating lease liabilities	28,017			28,880
Total operating lease liabilities	Total operating lease liabilities					$	28,414		$	29,688		Total operating lease liabilities	$	33,951		$	35,377
Finance leases:	Finance leases:											Finance leases:
Property and equipment, gross	Property and equipment, gross					$	69,115		$	92,679		Property and equipment, gross	$	63,040		$	68,982
Less accumulated depreciation	Less accumulated depreciation					(29,387)			(32,828)			Less accumulated depreciation	(31,459)			(31,404)
Property and equipment, net	Property and equipment, net					$	39,728		$	59,851		Property and equipment, net	$	31,581		$	37,578

Current finance lease liabilities	Current finance lease liabilities					$	17,424		$	24,601		Current finance lease liabilities	$	14,234		$	17,624
Long-term finance lease liabilities	Long-term finance lease liabilities					18,249			31,727			Long-term finance lease liabilities	10,557			14,982
Total finance lease liabilities	Total finance lease liabilities					$	35,673		$	56,328		Total finance lease liabilities	$	24,791		$	32,606

Weighted average remaining lease term (years):	Weighted average remaining lease term (years):											Weighted average remaining lease term (years):
Operating leases	Operating leases					9.1			8.7			Operating leases	9.7			9.7
Finance lease	Finance lease					2.5			2.4			Finance lease	2.5			2.3

Weighted average discount rate:	Weighted average discount rate:											Weighted average discount rate:
Operating leases	Operating leases					5.0		%	5.3		%	Operating leases	4.4		%	4.4		%
Finance leases	Finance leases					5.3		%	5.2		%	Finance leases	5.1		%	5.2		%

Maturities of lease liabilities, as of October 2, 2021, were as follows:
Maturities of lease liabilities, as of April 2, 2022, were as follows:												Maturities of lease liabilities, as of April 2, 2022, were as follows:
						Operating Leases			Finance Leases				Operating Leases			Finance Leases
2021 (three months)						$	2,103		$	3,950
2022						7,489			18,668
2022 (nine months)												2022 (nine months)	$	5,352		$	11,198
2023	2023					5,830			7,386			2023	6,197			7,510
2024	2024					3,662			3,209			2024	4,883			2,936
2025	2025					2,444			2,583			2025	3,612			2,415
2026	2026					1,794			990			2026	2,952			990
2027												2027	2,456			760
Thereafter	Thereafter					12,976			1,843			Thereafter	17,307			1,083
Total lease payments	Total lease payments					36,298			38,629			Total lease payments	42,759			26,892
Less imputed interest	Less imputed interest					(7,884)			(2,956)			Less imputed interest	(8,808)			(2,101)
Present value of lease payments	Present value of lease payments					$	28,414		$	35,673		Present value of lease payments	$	33,951		$	24,791

12.COMMITMENTS AND CONTINGENCIES

The Company is party to certain legal actions arising from the ordinary course of business activities. Accruals are recorded when the outcome is probable and can be reasonably estimated. While the ultimate results of claims and litigation cannot be predicted with certainty, management expects that the ultimate resolution of all current pending or threatened claims and

1816

Table of Contents

litigation will not have a material effect on the Company’s consolidated financial position, results of operations or liquidity. The Company records legal fees as incurred.

In March 2018, we were notified of an investigation by the Canadian Competition Bureau (the ~~“CCB”~~��CCB”) into pricing practices by certain asphalt paving contractors in British Columbia, including Winvan Paving, Ltd. (“Winvan”). We believe the investigation is focused on time periods prior to our April 2017 acquisition of Winvan and we are cooperating with the CCB. Although we currently do not believe this matter will have a material adverse effect on our business, financial condition or results of operations, we are currently not able to predict the ultimate outcome or cost of the investigation.

Environmental Remediation and Site Restoration —The Company’s operations are subject to and affected by federal, state, provincial and local laws and regulations relating to the environment, health and safety and other regulatory matters. These operations require environmental operating permits, which are subject to modification, renewal and revocation. The Company regularly monitors and reviews its operations, procedures and policies for compliance with these laws and regulations. Despite these compliance efforts, risk of environmental liability is inherent in the operation of the Company’s business, as it is with other companies engaged in similar businesses and there can be no assurance that environmental liabilities or noncompliance will not have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.

The Company has asset retirement obligations arising from regulatory and contractual requirements to perform reclamation activities at the time certain quarries and landfills are closed. As of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021, $32.7~~1, 2022, $37.0 million and ~~$33.6~~$37.7 million, respectively, were included in other noncurrent liabilities on the consolidated balance sheets and ~~$9.6~~$4.3 million and ~~$10.0~~$7.4 million, respectively, were included in accrued expenses for future reclamation costs. The total undiscounted anticipated costs for site reclamation as of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021~~1, 2022 were ~~$108.0~~$107.6 million and ~~$112.8~~$112.4 million, respectively.

Other—The Company is obligated under various firm purchase commitments for certain raw materials and services that are in the ordinary course of business. Management does not expect any significant changes in the market value of these goods and services during the commitment period that would have a material adverse effect on the financial condition, results of operations and cash flows of the Company. The terms of the purchase commitments generally approximate one year.

13.FAIR VALUE

Fair Value Measurements—Certain acquisitions made by the Company require the payment of contingent amounts of purchase consideration. These payments are contingent on specified operating results being achieved in periods subsequent to the acquisition and will only be made if earn-out thresholds are achieved. Contingent consideration obligations are measured at fair value each reporting period. Any adjustments to fair value are recognized in earnings in the period identified.

The fair value of contingent consideration as of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021~~1, 2022 was:


		October 2, 2021		January 2, 2021			April 2, 2022		January 1, 2022
Current portion of acquisition-related liabilities and Accrued expenses:	Current portion of acquisition-related liabilities and Accrued expenses:					Current portion of acquisition-related liabilities and Accrued expenses:
Contingent consideration	Contingent consideration	$	554	$	654	Contingent consideration	$	133	$	129
Acquisition-related liabilities and Other noncurrent liabilities:	Acquisition-related liabilities and Other noncurrent liabilities:					Acquisition-related liabilities and Other noncurrent liabilities:
Contingent consideration	Contingent consideration	$	1,199	$	1,209	Contingent consideration	$	1,115	$	1,239

The fair value of contingent consideration was based on unobservable, or Level 3, inputs, including projected probability-weighted cash payments and a 9.5% discount rate, which reflects a market discount rate. Changes in fair value may occur as a result of a change in actual or projected cash payments, the probability weightings applied by the Company to projected payments or a change in the discount rate. Significant increases or decreases in any of these inputs in isolation could result in a lower, or higher, fair value measurement. There were no material valuation adjustments to contingent consideration as of ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020.~~April 3, 2021.

Financial Instruments—The Company’s financial instruments include debt and certain acquisition-related liabilities (deferred consideration and noncompete obligations). The carrying value and fair value of these financial instruments as of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021~~1, 2022 was:

1917

Table of Contents


		October 2, 2021				January 2, 2021					April 2, 2022				January 1, 2022
		Fair Value		Carrying Value		Fair Value		Carrying Value			Fair Value		Carrying Value		Fair Value		Carrying Value
Level 1	Level 1									Level 1
Long-term debt(1)	Long-term debt(1)	$	1,661,673	$	1,610,830	$	1,971,087	$	1,915,425	Long-term debt(1)	$	1,596,591	$	1,607,767	$	1,653,085	$	1,609,298
Level 3	Level 3									Level 3
Current portion of deferred consideration and noncompete obligations(2)	Current portion of deferred consideration and noncompete obligations(2)	12,255		12,255		9,611		9,611		Current portion of deferred consideration and noncompete obligations(2)	12,945		12,945		12,981		12,981
Long term portion of deferred consideration and noncompete obligations(3)	Long term portion of deferred consideration and noncompete obligations(3)	32,024		32,024		11,037		11,037		Long term portion of deferred consideration and noncompete obligations(3)	21,813		21,813		32,130		32,130

(1)$6.4 million was included in current portion of debt as of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021.~~1, 2022.

(2)Included in current portion of acquisition-related liabilities on the consolidated balance sheets.

(3)Included in acquisition-related liabilities on the consolidated balance sheets.

The fair value of debt was determined based on observable, or Level 2, inputs, such as interest rates, bond yields and quoted prices in inactive markets. The fair values of the deferred consideration and noncompete obligations were determined based on unobservable, or Level 3, inputs, including the cash payment terms in the purchase agreements and a discount rate reflecting the Company’s credit risk. The discount rate used is generally consistent with that used when the obligations were initially recorded.

Securities with a maturity of three months or less are considered cash equivalents and the fair value of these assets approximates their carrying value.

14.SEGMENT INFORMATION

The Company has 3 operating segments: West, East and Cement, which are its reporting segments. These segments are consistent with the Company’s management reporting structure.

The operating results of each segment are regularly reviewed and evaluated by the Chief Executive Officer, our Company’s Chief Operating Decision Maker (“CODM”). The CODM primarily evaluates the performance of the Company’s segments and allocates resources to them based on a segment profit metric that we call Adjusted EBITDA, which is computed as earnings from operations before interest, taxes, depreciation, depletion, amortization, accretion, and share-based compensation, as well as various other non-recurring, non-cash amounts. Beginning with the first quarter of 2021, the Company no longer adjusts for transaction costs, as those costs are recurring cash payments, and are included in general and administrative expenses.

The West and East segments have several subsidiaries that are engaged in various activities including quarry mining, aggregate production and contracting. The Cement segment is engaged in the production of Portland cement. Assets employed by each segment include assets directly identified with those operations. Corporate assets consist primarily of cash, property, plant and equipment for corporate operations and other assets not directly identifiable with a reportable business segment. The accounting policies applicable to each segment are consistent with those used in the consolidated financial statements.

The following tables display selected financial data for the Company’s reportable business segments as of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021~~1, 2022 and for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020:~~April 3, 2021:


		Three months ended				Nine months ended					Three months ended
		October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020				April 2, 2022		April 3, 2021
Revenue*:	Revenue*:									Revenue*:
West	West	$	369,250	$	390,310	$	958,351	$	919,016	West		$	252,232	$	251,133
East	East	255,490		234,435		635,659		590,341		East		122,490		136,042
Cement	Cement	92,500		84,874		218,991		198,461		Cement		46,225		40,669
Total revenue	Total revenue	$	717,240	$	709,619	$	1,813,001	$	1,707,818	Total revenue		$	420,947	$	427,844

*Intercompany sales are immaterial and the presentation above only reflects sales to external customers.

Table of Contents


		Three months ended				Nine months ended					Three months ended
		October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020				April 2, 2022		April 3, 2021
Income from operations before taxes		$	95,891	$	73,156	$	143,369	$	79,597
Loss from operations before taxes										Loss from operations before taxes		$	(39,543)	$	(28,688)
Interest expense	Interest expense	24,134		24,623		72,536		78,049		Interest expense		20,149		24,186
Depreciation, depletion and amortization	Depreciation, depletion and amortization	58,381		57,364		171,474		161,912		Depreciation, depletion and amortization		50,479		55,570
Accretion	Accretion	701		690		2,177		1,848		Accretion		714		766
Loss on debt financings		6,016		4,064		6,016		4,064

Loss (gain) on sale of businesses		113		—		(15,319)		—

Gain on sale of businesses										Gain on sale of businesses		(14,205)		(15,668)
Non-cash compensation	Non-cash compensation	4,685		13,322		14,875		23,119		Non-cash compensation		5,422		5,363
Other	Other	363		4,083		682		4,287		Other		247		205
Total Adjusted EBITDA	Total Adjusted EBITDA	$	190,284	$	177,302	$	395,810	$	352,876	Total Adjusted EBITDA		$	23,263	$	41,734

Total Adjusted EBITDA by Segment:	Total Adjusted EBITDA by Segment:									Total Adjusted EBITDA by Segment:
West	West	$	92,303	$	95,470	$	211,722	$	196,881	West		$	32,692	$	40,648
East	East	69,084		56,943		138,113		119,900		East		8,136		11,745
Cement	Cement	40,360		35,086		82,281		63,172		Cement		(5,819)		2,499
Corporate and other	Corporate and other	(11,463)		(10,197)		(36,306)		(27,077)		Corporate and other		(11,746)		(13,158)
Total Adjusted EBITDA	Total Adjusted EBITDA	$	190,284	$	177,302	$	395,810	$	352,876	Total Adjusted EBITDA		$	23,263	$	41,734


		Nine months ended					Three months ended
		October 2, 2021		September 26, 2020			April 2, 2022		April 3, 2021
Purchases of property, plant and equipment	Purchases of property, plant and equipment					Purchases of property, plant and equipment
West	West	$	85,137	$	51,148	West	$	26,874	$	34,068
East	East	69,469		75,006		East	24,326		33,202
Cement	Cement	14,852		12,097		Cement	6,115		2,273
Total reportable segments	Total reportable segments	169,458		138,251		Total reportable segments	57,315		69,543
Corporate and other	Corporate and other	612		1,755		Corporate and other	459		214
Total purchases of property, plant and equipment	Total purchases of property, plant and equipment	$	170,070	$	140,006	Total purchases of property, plant and equipment	$	57,774	$	69,757


		Three months ended				Nine months ended					Three months ended
		October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020				April 2, 2022		April 3, 2021
Depreciation, depletion, amortization and accretion:	Depreciation, depletion, amortization and accretion:									Depreciation, depletion, amortization and accretion:
West	West	$	24,796	$	23,117	$	75,287	$	67,082	West		$	24,575	$	25,140
East	East	22,809		22,803		66,306		65,293		East		18,295		21,943
Cement	Cement	10,409		11,155		28,785		28,425		Cement		7,574		8,149
Total reportable segments	Total reportable segments	58,014		57,075		170,378		160,800		Total reportable segments		50,444		55,232
Corporate and other	Corporate and other	1,068		979		3,273		2,960		Corporate and other		749		1,104
Total depreciation, depletion, amortization and accretion	Total depreciation, depletion, amortization and accretion	$	59,082	$	58,054	$	173,651	$	163,760	Total depreciation, depletion, amortization and accretion		$	51,193	$	56,336


		October 2, 2021		January 2, 2021			April 2, 2022		January 1, 2022
Total assets:	Total assets:					Total assets:
West	West	$	1,569,240	$	1,503,382	West	$	1,527,170	$	1,512,298
East	East	1,316,659		1,303,742		East	1,259,620		1,292,638
Cement	Cement	863,858		850,835		Cement	852,313		844,086
Total reportable segments	Total reportable segments	3,749,757		3,657,959		Total reportable segments	3,639,103		3,649,022
Corporate and other	Corporate and other	466,892		650,052		Corporate and other	504,142		590,103
Total	Total	$	4,216,649	$	4,308,011	Total	$	4,143,245	$	4,239,125

2119

Table of Contents

SUMMIT MATERIALS, LLC AND SUBSIDIARIES

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The unaudited consolidated financial statements and notes thereto for Summit Materials, LLC and subsidiaries are included as Exhibit 99.1 to this Quarterly Report on Form 10-Q and are incorporated by reference herein.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding and assessing the trends and significant changes in our results of operations and financial condition. Historical results may not be indicative of future performance. Forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in the section entitled “Risk Factors” in the Annual Report, and factors discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated interim financial statements and the related notes and other information included in this report.

Overview

Summit’s vision is to be the most socially responsible, integrated construction materials solution provider, collaborating with stakeholders to deliver differentiated innovations and solve our customers’ challenges. Within our markets, we strive to be a market leader by offering customers a single-source provider for construction materials and related downstream products through our vertical integration. Our materials include aggregates, which we supply across the United States, and in British Columbia, Canada, and cement, which we supply to surrounding states along the Mississippi River from Minnesota to Louisiana. In addition to supplying aggregates to customers, we use a portion of our materials internally to produce ready-mix concrete and asphalt paving mix, which may be sold externally or used in our paving and related services businesses. Our vertical integration creates opportunities to increase aggregates volumes, optimize margin at each stage of production and provide customers with efficiency gains, convenience and reliability, which we believe gives us a competitive advantage.

~~Since our inception in 2009, we have completed dozens of acquisitions, which~~We are organized into 11 operating companies that make up our three distinct operating segments: West, East and Cement, which are also our reporting segments. We operate in 21 U.S. states and in British Columbia, Canada and currently have assets in 21 U.S. states and in British Columbia, Canada. As of April 2, 2022, the Company has operations in the East Segment that are classified as assets held for sale. The map below illustrates our geographic footprint.

2220

Table of Contents

Business Trends and Conditions

The U.S. construction materials industry is composed of four primary sectors: aggregates; cement; ready-mix concrete; and asphalt paving mix. Each of these materials is widely used in most forms of construction activity. Participants in these sectors typically range from small, privately-held companies focused on a single material, product or market to publicly traded multinational corporations that offer a wide array of construction materials and services. Competition is constrained in part by the distance materials can be transported efficiently, resulting in predominantly local or regional operations. Due to the lack of product differentiation, competition for all of our products is predominantly based on price and, to a lesser extent, quality of products and service. As a result, the prices we charge our customers are not likely to be materially different from the prices charged by other producers in the same markets. Accordingly, our profitability is generally dependent on the level of demand for our materials and products and our ability to control operating costs. We continue to monitor supply chain issues, as well as inflationary pressures on our raw material inputs as well as labor costs.

Our revenue is derived from multiple end-use markets including public infrastructure construction and private residential and nonresidential construction. Public infrastructure includes spending by federal, state, provincial and local governments for roads, highways, bridges, airports and other infrastructure projects. Public infrastructure projects have historically been a relatively stable portion of state and federal budgets. Residential and nonresidential construction consists of new construction and repair and remodel markets. Any economic stagnation or decline, which could vary by local region and market, could affect our results of operations. Our sales and earnings are sensitive to national, regional and local economic conditions and particularly to cyclical changes in construction spending, especially in the private sector. WeFrom a macroeconomic view, we continue to see positive indicators for ~~the construction sector, including positive trends in housing starts,~~highway obligations. While rising interest rates and ~~highway construction letting~~inflation have not yet

2321

Table of Contents

impacted housing starts, we are monitoring that activity closely. Rising interest rates and inflation may also impact our non-residential construction activity in ~~many of~~ the states in which we operate. However, given the ongoing nature of the COVID-19 pandemic discussed below, we continue to closely monitor these indicators for the impact on our business in subsequent quarters.future.

Transportation infrastructure projects, driven by both federal and state funding programs, represent a significant share of the U.S. construction materials market. Federal funds are allocated to the states, which are required to match a portion of the federal funds they receive. Federal highway spending uses funds predominantly from the Federal Highway Trust Fund, which derives its revenue from taxes on diesel fuel, gasoline and other user fees. The dependability of federal funding allows state departments of transportation to plan for their long-term highway construction and maintenance needs. ~~Through a continuing resolution~~The Infrastructure Investment and Jobs Act ("IIJA") was signed byinto law on November 15, 2021. The IIJA provides $1.2 trillion in funding over five years from 2022 through 2026, including $550 billion in new investments for all modes of transportation, water, power and energy, environment remediation, public lands, broadband and resilience.

In 2021, approximately 64% of our revenue was derived from the ~~President~~private construction market, and the remaining revenue from the public markets. We believe residential activity in October 2021, funding for the existing federal transportation funding program extends through December 3, 2021. Historically, Congress has maintained infrastructure spending via various means upon the expiration of federal transportation funding programs, but there is no assurance that thisour key markets will continue to be a driver for volumes in future periods. Funding for public infrastructure projects as been announced as a high priority for the ~~case. With the nation’s infrastructure aging, there is increased demand by states and municipalities for long-term~~ federal ~~funding~~government in 2021, but no action has been taken to ~~support the construction of new roads, highways and bridges in addition to the maintenance of the existing infrastructure.~~date.

In addition to federal funding, state, county and local agencies provide highway construction and maintenance funding. Our four largest states by revenue, Texas, Utah, Kansas and Missouri, represented approximately ~~25%~~23%, ~~14%~~15%, ~~13%~~12% and 9%, respectively, of our total revenue in ~~2020.~~2021. The following is a summary of key funding initiatives in those states:

•The Texas Department of Transportation (“TXDOT”) updated its fiscal year 2022 lettings estimate to ~~$10.1~~$10.0 billion up from $8.4 billion in fiscal year 2021 and $7.5 billion in fiscal year 2020. Longer term, TXDOT has indicated a target of $8 billion per year in total state and local lettings. ~~In addition, Texas has received $1.9 billion from legislation passed by Congress in December 2020 and March 2021.~~

•The state of Utah anticipates transportation funding of approximately ~~$1.3 billion in 2021 and~~ $1.8 billion in 2022. ~~In addition, Utah received approximately $263 million from legislation passed by Congress in December 2020 and March 2021.~~

•The state of Kansas anticipates approximately ~~$1.9 billion for 2021 and~~ $2.2 billion for 2022 for transportation funding. ~~In addition, Kansas received approximately $138 million from legislation passed by Congress in December 2020 and March 2021.~~

•The state of Missouri anticipates transportation funding of approximately ~~$2.9~~$3.2 billion in ~~2021 and $3.1 billion in~~ 2022. ~~In addition, Missouri received approximately $437 million from legislation passed by Congress in December 2020 and March 2021.~~

Use and consumption of our products fluctuate due to seasonality. Nearly all of the products used by us, and by our customers, in the private construction and public infrastructure industries are used outdoors. Our highway operations and production and distribution facilities are also located outdoors. Therefore, seasonal changes and other weather-related conditions, in particular extended rainy and cold weather in the spring and fall, as well as major weather events such as hurricanes, tornadoes, tropical storms, heavy snows and flooding, can adversely affect our business and operations through a decline in both the use of our products and demand for our services. In addition, construction materials production and shipment levels follow activity in the construction industry, which typically occurs in the spring, summer and fall. Warmer and drier weather during the second and third quarters of our fiscal year typically result in higher activity and revenue levels during those quarters. The first quarter of our fiscal year typically has lower levels of activity due to weather conditions, and the third quarter of our fiscal year typically has the highest levels of activity.

We are subject to commodity price risk with respect to price changes in liquid asphalt and energy, including fossil fuels and electricity for aggregates, cement, ready-mix concrete and asphalt paving mix production, natural gas for hot mix asphalt production and diesel fuel for distribution vehicles and production related mobile equipment. Liquid asphalt escalator provisions in most of our private and commercial contracts limit our exposure to price fluctuations in this commodity. We often obtain similar escalators on public infrastructure contracts. In addition, we enter into various firm purchase commitments, with terms generally less than one year, for certain raw materials, including diesel fuel.

Backlog

Our products are generally delivered upon receipt of orders or requests from customers, or shortly thereafter. Accordingly, the backlog associated with product sales is converted into revenue within a relatively short period of time. Inventory for products is generally maintained in sufficient quantities to meet rapid delivery requirements of customers. Therefore, a period-over-period increase or decrease of backlog does not necessarily result in an improvement or a deterioration

~~Table of Contents~~

of our business. Our backlog includes only those products and projects for which we have obtained a purchase order or a signed contract with the customer and does not include products purchased and sold or services awarded and provided within the period.

Table of Contents

Financial Highlights

The principal factors in evaluating our financial condition and operating results as of and for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 as compared to the three ~~and nine~~ months ended ~~September 26, 2020,~~April 3, 2021, and certain other highlights include:

•Net revenue ~~increased $17.0 million and $116.4~~decreased $6.0 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022, primarily resulting from ~~organic growth.~~divestitures completed in 2021, partially offset by increases in average sales prices.

•Our operating ~~income~~loss increased ~~$24.4 million and $36.9~~$9.2 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022, as ~~revenue~~increases in our cost structure and higher repair and maintenance costs exceeded the increases in ~~cost of revenue.~~average sales prices, mitigated by a decrease in depreciation, depletion, amortization and accretion expenses.

•In the ~~nine~~three months ended ~~October~~April 2, ~~2021,~~2022, average sales price increased 4.8% in aggregates, 10.1% in cement, 7.3% in ready-mix concrete and 10.2% in asphalt.

•In the three months ended April 2, 2022, sales volume decreased 0.8% in aggregates, 7.2% in ready-mix concrete and 45.1% in asphalt, offset by a 0.3% increase in cement.

•In the three months ended April 2, 2022, the Company sold ~~four businesses~~one business in the East ~~segment and one in the West~~ segment, resulting in cash proceeds of ~~$103.6~~$47.8 million and a total gain on disposition of ~~$15.3~~$14.2 million.

•In March 2022, the three and nine months ended October 2, 2021, sales volume increased 9.2% and 14.1% in aggregates, 2.0% and 6.5% in cement, declined (1.4)% and increased 3.9% in ready-mix concrete and declined (11.2)% and (8.6)% in asphalt, respectively.

•~~In September 2021, we redeemed all $300.0~~Company repurchased $47.5 million of ~~5.125% Senior Notes due 2025 (the “2025 Notes”) using existing cash on hand. We recognized a loss on debt financing of $6.0 million on this redemption.~~

•In August 2020, we issued $700 million of 5.25% Senior Notes due 2029 (the “2029 Notes”), resulting in net proceeds of $690.4 million, after related fees and expenses. The proceeds from the 2029 Notes were used to redeem the $650 million of 6.125% Senior Notes due 2023 (the “2023 Notes”) at par.our Class A common stock.

Results of Operations

In late 2019, the COVID-19 virus was first reported to have surfaced, and began impacting countries around the world. However, in all of our markets, construction activities were deemed essential businesses and we continued to operate while many businesses were forced to close or reduce operations. During the first nine months of each of 2021 and 2020, our operating markets remained substantially unaffected by COVID-19. We continue to monitor our operations, the operations of our customers, and the recommendations of the various national, state and local governments in the areas in which we operate. We implemented work-from-home protocols at all of our administrative locations late in the first quarter of 2020, and while some locations have returned, other locations, including our headquarters location, continue to work remotely. In addition, we implemented additional safety measures specific to COVID-19 at all of our operating locations, which did not significantly increase our costs. The extent to which the COVID-19 pandemic impacts the national and local economies in which we operate, and ultimately our business, will depend on numerous developments, which are highly uncertain and difficult to predict. These events, as they continue to develop, could result in business disruption, including reduced revenues, profitability and cash flow.

In 2020, approximately 61% of our revenue was derived from the private construction market, and the remaining revenue from the public markets. We believe residential activity in our key markets will continue to be a driver for volumes in future periods. Funding for public infrastructure projects as been announced as a high priority for the federal government in 2021, but no action has been taken to date.

As of October 2, 2021, we had $258.1 million in cash and cash equivalents, and we have remaining borrowing capacity on our senior secured revolving credit facility of $329.1 million, providing us with liquidity that we believe to be adequate to meet our obligations for the next twelve months.

The following discussion of our results of operations is focused on the key financial measures we use to evaluate the performance of our business from both a consolidated and operating segment perspective. Operating income and margins are discussed in terms of changes in volume, pricing and mix of revenue source (i.e., type of product, sales or service revenue). We focus on operating margin, which we define as operating income as a percentage of net revenue, as a key metric when assessing the performance of the business, as we believe that analyzing changes in costs in relation to changes in revenue provides more meaningful insight into the results of operations than examining costs in isolation.

Operating income reflects our profit from operations after taking into consideration cost of revenue, general and administrative expenses, depreciation, depletion, amortization and accretion and gain on sale of property, plant and equipment.

~~Table of Contents~~

Cost of revenue generally increases ratably with revenue, as labor, transportation costs and subcontractor costs are recorded in cost of revenue. As organic volumes increase, we expect our general and administrative costs as a percentage of revenue to decrease. General and administrative expenses as a percentage of revenue vary throughout the year due to the seasonality of our business.

Consolidated Results of Operations

The table below sets forth our consolidated results of operations for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020.~~April 3, 2021.


		Three months ended				Nine months ended					Three months ended
		October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020				April 2, 2022		April 3, 2021
($ in thousands)	($ in thousands)									($ in thousands)
Net revenue	Net revenue	$	662,259	$	645,246	$	1,679,270	$	1,562,892	Net revenue		$	392,495	$	398,481
Delivery and subcontract revenue	Delivery and subcontract revenue	54,981		64,373		133,731		144,926		Delivery and subcontract revenue		28,452		29,363
Total revenue	Total revenue	717,240		709,619		1,813,001		1,707,818		Total revenue		420,947		427,844
Cost of revenue (excluding items shown separately below)	Cost of revenue (excluding items shown separately below)	486,936		501,592		1,301,346		1,258,463		Cost of revenue (excluding items shown separately below)		353,380		346,694
General and administrative expenses	General and administrative expenses	47,364		50,972		146,454		132,385		General and administrative expenses		51,924		51,642
Depreciation, depletion, amortization and accretion	Depreciation, depletion, amortization and accretion	59,082		58,054		173,651		163,760		Depreciation, depletion, amortization and accretion		51,193		56,336
Gain on sale of property, plant and equipment	Gain on sale of property, plant and equipment	(1,159)		(1,616)		(4,331)		(5,747)		Gain on sale of property, plant and equipment		(1,255)		(1,769)
Operating income		125,017		100,617		195,881		158,957
Operating loss										Operating loss		(34,295)		(25,059)
Interest expense	Interest expense	24,134		24,623		72,536		78,049		Interest expense		20,149		24,186
Loss on debt financings		6,016		4,064		6,016		4,064

Loss (gain) on sale of businesses		113		—		(15,319)		—

Gain on sale of businesses										Gain on sale of businesses		(14,205)		(15,668)
Other income, net	Other income, net	(1,137)		(1,226)		(10,721)		(2,753)		Other income, net		(696)		(4,889)
Income from operations before taxes		95,891		73,156		143,369		79,597
Income tax expense (benefit)		20,513		(19,613)		33,478		(25,333)
Net income		$	75,378	$	92,769	$	109,891	$	104,930
Loss from operations before taxes										Loss from operations before taxes		(39,543)		(28,688)
Income tax benefit										Income tax benefit		(4,743)		(5,443)
Net loss										Net loss		$	(34,800)	$	(23,245)

Table of Contents

In the first nine months of 2021, we reclassified $32.6 million and $93.1 million of fixed overhead expenses related to production activities from general and administrative expenses to cost of revenue for the three and nine months ended September 26, 2020, respectively, to conform to the current year presentation. In addition, we reclassified $1.6 million and $5.7 million of gain on sale of property, plant and equipment from general and administrative expenses to a separate line item included within operating income, also to conform to the current year presentation. Lastly, we reclassified $0.4 million and $1.5 million of transaction costs from its own line item within operating income into general and administrative expenses for the three and nine months ended September 26, 2020, respectively, to conform to the current year presentation. We believe these reclassifications enhance the comparability of our financial statements to others in the industry and had no impact on previously reported operating income, as well as certain non-GAAP measures defined below, such as Adjusted EBITDA, or Adjusted EBITDA Margin; however, Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin were reduced.

Three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 compared to the three ~~and nine~~ months ended ~~September 26, 2020~~April 3, 2021


		Three months ended										Nine months ended											Three months ended
($ in thousands)	($ in thousands)	October 2, 2021			September 26, 2020			Variance				October 2, 2021			September 26, 2020			Variance				($ in thousands)	April 2, 2022	April 3, 2021			Variance
Net revenue	Net revenue	$	662,259		$	645,246		$	17,013	2.6	%	$	1,679,270		$	1,562,892		$	116,378	7.4	%	Net revenue		$	392,495		$	398,481		$	(5,986)	(1.5)	%
Operating income		125,017			100,617			24,400		24.3	%	195,881			158,957			36,924		23.2	%
Operating loss																						Operating loss		(34,295)			(25,059)			(9,236)		(36.9)	%
Operating margin percentage	Operating margin percentage	18.9		%	15.6		%					11.7		%	10.2		%					Operating margin percentage		(8.7)		%	(6.3)		%
Adjusted EBITDA (1)	Adjusted EBITDA (1)	$	190,284		$	177,302		$	12,982	7.3	%	$	395,810		$	352,876		$	42,934	12.2	%	Adjusted EBITDA (1)		$	23,263		$	41,734		$	(18,471)	(44.3)	%
Adjusted EBITDA Margin (1)	Adjusted EBITDA Margin (1)	28.7		%	27.5		%					23.6		%	22.6		%					Adjusted EBITDA Margin (1)		5.9		%	10.5		%

(1)Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures that we find helpful in monitoring the performance of our business. See "Non-GAAP Performance Measures" below for a reconciliation of Adjusted EBITDA to net income, which is the most directly comparable GAAP measure.

~~Table of Contents~~

Net revenue ~~increased $17.0~~decreased $6.0 million in the three months ended ~~October~~April 2, ~~2021,~~2022, primarily resulting from organic volume decline in our ready-mix concrete and asphalt operations due to ~~acquisition related volumes~~our divestiture program. Of the decrease in ~~the West segment as well as organic~~net revenue, ~~increases in the East~~$9.0 million was from decreased sales of products and ~~Cement segments. Net~~$7.4 million from decreased service revenue, ~~increased~~partially offset by ~~$28.9~~$10.4 million from increased sales of ~~materials,~~materials. Our organic volumes declined 1.5%, 7.2% and ~~decreased by $7.8 million and $4.0 million from sales of products and services, respectively. We experienced organic volume growth of 5.6% and 2.0%~~45.1% in ~~our~~ aggregates, ~~and cement lines of business, respectively, partially offset by a decline of 1.4% and 11.2% in~~ ready-mix concrete and asphalt, respectively. The decline in organic asphalt volumes was primarily due to a divestiture of a paving business in our West segment which occurred in the second quarter of 2021. We achieved organic price growth across all lines of business during the third quarter of 2021. Additional detail about the impact of acquisitions and divestitures on each segment is presented below where material.

Net revenue increased $116.4 million in the nine months ended October 2, 2021, primarily resulting from a mix of organic and acquisition growth in our aggregates operations and organic growth in our cement and ready-mix concrete operations. Of the increase in net revenue, $87.8 million was from increased sales of materials, $21.7 million was from increased sales of products and $6.9 million from increased service revenue. We generated organic volume growth of 5.0%, 6.5% and 3.9% in aggregates, cement and ready-mix concrete, respectively, offset by a ~~8.6% decline~~0.3% increase in cement. The organic volume decreases for aggregates, ready-mix and asphalt were primarily ~~due~~attributable to aour divestiture ~~of a paving business in our West segment which occurred in the second quarter of 2021.~~program. We had organic price growth in our aggregate, cement, ready-mix and asphalt lines of business of ~~3.5%~~5.0%, ~~3.0%~~10.1%, ~~3.4%~~7.3% and ~~1.6%~~10.2%, respectively, during the first ~~nine~~three months of ~~2021.~~2022.

Operating ~~income~~loss increased by ~~$24.4~~$9.2 million in the ~~third quarter~~first three months of ~~2021~~2022 as compared to the ~~third quarter~~first three months of ~~2020,~~2021, primarily as ~~our net revenue gains and decreases in general and administrative expenses outpaced~~ increases in our cost structure exceeded the increases in average sales prices, as well as the timing of ~~revenue~~repair and ~~depletion, amortization~~maintenance expenditures and ~~accretion expenses. Our general and administrative expenses decreased $3.6 million in the third quarter~~certain stripping activities, unplanned downtime at a few of ~~2021 despite increased levels of professional fees as we continue to optimize the business, which were offset~~our locations, mitigated by a decrease of ~~$10.6~~$5.1 million in CEO transition costs and related stock compensation expenses made in the third quarter of 2020. Our operating income in the West segment was reduced as costs of revenue, notably in Texas, exceeded our increases in net revenue primarily due to inefficiencies caused by weather conditions being less favorable in 2021 than in 2020. In addition, depreciation, depletion, amortization and accretion expense ~~increased by $1.0 million over the prior year amount.~~

~~Operating income increased by $36.9 million in the first nine months of 2021 as compared to the first nine months of 2020,~~ primarily as net revenue gains exceeded increases in costs of revenue, general and administrative expenses and depreciation, depletion, amortization and accretion expenses. Our general and administrative expenses increased $14.1 million in the first nine months of 2021 as compared to the same period a year ago due to ~~$3.4 million~~divestitures completed in severance related costs, an increase in consulting fees as we seek to optimize organizational efficiencies and increases in labor and benefits, offset by a decrease of $10.6 million in CEO transition costs in 2020. In addition, depreciation, depletion, amortization and accretion expense increased by $9.9 million over the prior year amount as our capital expenditures in 2021 exceeded those of 2020.2021.

Our operating margin percentage for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021 increased~~2022 decreased from ~~15.6%~~(6.3)% to ~~18.9% and from 10.2% to 11.7%~~(8.7)%, ~~respectively,~~ from the comparable period a year ago, due to the factors noted above. Adjusted EBITDA, as defined in "Non-GAAP Performance Measures" below, ~~increased by $13.0 million and $42.9~~decreased $18.5 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022, due to the factors noted above.

As a vertically-integrated company, we include intercompany sales from materials to products and from products to services when assessing the operating results of our business. We refer to revenue inclusive of intercompany sales as gross revenue. These intercompany transactions are eliminated in the consolidated financial statements. Gross revenue by product was as follows:

~~Table of Contents~~


		Three months ended								Nine months ended									Three months ended
($ in thousands)	($ in thousands)	October 2, 2021		September 26, 2020		Variance				October 2, 2021		September 26, 2020		Variance				($ in thousands)	April 2, 2022	April 3, 2021		Variance
Revenue by product*:	Revenue by product*:																	Revenue by product*:
Aggregates	Aggregates	$	202,523	$	178,377	$	24,146	13.5	%	$	540,912	$	465,498	$	75,414	16.2	%	Aggregates		$	149,426	$	143,794	$	5,632	3.9	%
Cement	Cement	90,648		85,108		5,540		6.5	%	215,024		195,972		19,052		9.7	%	Cement		43,806		39,703		4,103		10.3	%
Ready-mix concrete	Ready-mix concrete	183,213		179,261		3,952		2.2	%	525,485		489,034		36,451		7.5	%	Ready-mix concrete		157,602		158,336		(734)		(0.5)	%
Asphalt	Asphalt	123,364		137,685		(14,321)		(10.4)	%	255,215		275,150		(19,935)		(7.2)	%	Asphalt		17,501		31,225		(13,724)		(44.0)	%
Paving and related services	Paving and related services	194,678		232,514		(37,836)		(16.3)	%	432,384		470,648		(38,264)		(8.1)	%	Paving and related services		40,337		61,808		(21,471)		(34.7)	%
Other	Other	(77,186)		(103,326)		26,140		25.3	%	(156,019)		(188,484)		32,465		17.2	%	Other		12,275		(7,022)		19,297		274.8	%
Total revenue	Total revenue	$	717,240	$	709,619	$	7,621	1.1	%	$	1,813,001	$	1,707,818	$	105,183	6.2	%	Total revenue		$	420,947	$	427,844	$	(6,897)	(1.6)	%

*Revenue by product includes intercompany and intracompany sales transferred at market value. The elimination of intracompany transactions is included in Other. Revenue from the liquid asphalt terminals is included in asphalt revenue.

Detail of our volumes and average selling prices by product in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020~~April 3, 2021 were as follows:

Three months ended
October 2, 2021 September 26, 2020
Volume(1) Volume(1) Percentage Change in
(in thousands) Pricing(2) (in thousands) Pricing(2) Volume Pricing
Aggregates 17,884 $ 11.32 16,383 $ 10.89 9.2 % 3.9 %
Cement 748 121.26 733 116.17 2.0 % 4.4 %
Ready-mix concrete 1,509 121.40 1,531 117.12 (1.4) % 3.7 %
Asphalt 1,880 61.42 2,118 60.40 (11.2) % 1.7 %
Nine months ended
October 2, 2021 September 26, 2020
Volume(1) Volume(1) Percentage Change in
(in thousands) Pricing(2) (in thousands) Pricing(2) Volume Pricing
Aggregates 48,484 $ 11.16 42,476 $ 10.96 14.1 % 1.8 %
Cement 1,796 119.76 1,686 116.22 6.5 % 3.0 %
Ready-mix concrete 4,381 119.95 4,217 115.97 3.9 % 3.4 %
Asphalt 3,911 60.63 4,281 59.69 (8.6) % 1.6 %

Table of Contents











	Three months ended
	April 2, 2022			April 3, 2021
	Volume(1)			Volume(1)			Percentage Change in
	(in thousands)	Pricing(2)		(in thousands)	Pricing(2)		Volume		Pricing
Aggregates	13,402	$	11.15	13,509	$	10.64	(0.8)	%	4.8	%
Cement	341	128.42		340	116.69		0.3	%	10.1	%
Ready-mix concrete	1,241	127.00		1,338	118.31		(7.2)	%	7.3	%
Asphalt	260	66.15		474	60.01		(45.1)	%	10.2	%

(1)Volumes are shown in tons for aggregates, cement and asphalt and in cubic yards for ready-mix concrete.

(2)Pricing is shown on a per ton basis for aggregates, cement and asphalt and on a per cubic yard basis for ready-mix concrete.

Revenue from aggregates increased ~~$24.1 million and $75.4~~$5.6 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022. In the first ~~nine~~three months of ~~2021,~~2022, we had solid increases in organic aggregate volumes in most of our markets, ~~except for~~which were offset by volume decreases in ~~South Kansas as wind farm volumes~~certain markets due to divestitures in 2021. Aggregate average sales price of $11.15 per ton increased 4.8% in the first ~~nine~~three months of 2020 did not repeat in 2021. In the three months ended October 2, 2021, our aggregate volumes increased due to both acquisition and organic volumes, with organic growth in both the West and East segments. Organic aggregate volumes increased 5.0% in the first nine months of 2021 as compared to the same period a year ago, primarily due to increases in the Intermountain West, North Kansas, Virginia and British Columbia markets. Aggregate average sales prices of $11.16 per ton increased 1.8% in the first nine months of 20212022 as compared to the first ~~nine~~three months of ~~2020,~~2021, due to our ~~mix of higher priced products~~focus on increasing prices in the ~~Intermountain West, British Columbia~~current inflationary environment. We have continued, and ~~South Texas markets.~~expect to continue increasing prices to stay ahead of inflationary pressures.

Revenue from cement increased ~~$5.5 million and $19.1~~$4.1 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022. In the three ~~and nine~~ months ended ~~October~~April 2, ~~2021,~~2022, organic cement volumes increased ~~2.0% and 6.5%, respectively,~~0.3% and organic cement average sales prices increased ~~4.4% and 3.0%~~10.1%, ~~respectively,~~ as compared to the same period in the prior year.

~~Table of Contents~~

Revenue from ready-mix concrete ~~increased $4.0 million and $36.5~~decreased $0.7 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022. In the three ~~and nine~~ months ended ~~October~~April 2, ~~2021,~~2022, our ready-mix volumes decreased ~~1.4% and increased 3.9%, respectively,~~7.2% and our average sales prices increased ~~3.7%~~7.3%. In the three months ended April 2, 2022, our volume decrease occurred primarily in our Kansas and ~~3.4%, respectively. The volume decrease~~north Texas markets due to weather, while our price increases were in all of our markets.

Revenue from asphalt decreased $13.7 million in the three months ended ~~October~~April 2, 2021 occurred primarily in our Texas markets due to weather. The volume increases for the nine months ended October 2, 2021 occurred primarily in our Intermountain West and North Texas markets while our price increase was primarily in the Intermountain West market for both the three and nine months ended October 2, 2021.

~~Revenue from asphalt decreased $14.3 million and $19.9 million in the three and nine months ended October 2, 2021, respectively,~~2022, primarily due to the divestiture of our paving business in Texas in May 2021. In the first ~~nine~~three months of ~~2021,~~2022, organic pricing increased ~~1.6%~~10.2%, with strong pricing gains in the ~~Kentucky~~Virginia and ~~South Texas~~Intermountain West geographies. ~~Further, in~~In the first ~~nine~~three months of ~~2021, we had strong asphalt volume increases in Kentucky, as 2020~~2022, organic volumes ~~had been negatively impacted by COVID-19.~~decreased 45.1% mainly due to the divestiture noted above.

Other Financial Information

~~Loss on Debt Financings~~Interest expense

In September 2021, we redeemed all $300.0 million 5.125% Senior Notes due 2025 using existing cash on hand. In connection with this transaction, charges of $6.0 million were recognized in the quarter ended October 2, 2021. The fees included $3.9 million for the applicable prepayment premium and $2.1 million for the write-off of unamortized deferred financing fees.

In August 2020, we issued $700 million of 5.25% Senior Notes due 2029 (the "2029 Notes"), resulting in net proceeds of $690.4 million, after related fees and expenses. The proceeds from the 2029 Notes were used to redeem the $650 million of 6.125% Senior Notes due 2023 (the "2023 Notes") at par. In connection with that transaction, charges of $4.1 million were recognizedAs a result, interest expense in the three ~~and nine~~ months ended ~~September 26, 2020. The fees included $0.8 million for~~April 2, 2022 is less than it was in the ~~write-off~~first three months of ~~unamortized original issue discount and $3.3 million for the write-off of unamortized deferred financing fees.~~2021.

Gain (Loss) on Sale of business

We continue to make progress on our strategy to divest certain businesses through portfolio optimization. In the first ~~nine~~three months of 2022, as well as in the first three months of 2021, ~~as part of the Company's strategy to rationalize assets, the Company~~we sold ~~four businesses~~one business in the East segment ~~and one~~ in ~~the West segment,~~each year, resulting in cash proceeds of ~~$103.6~~$47.8 million and a net gain on disposition of ~~$15.3 million.~~$14.2 million in 2022, and cash proceeds of $33.1 million and a net gain on disposition of $15.7 million in 2021.

Income Tax Expense

Our income tax ~~expense~~benefit was ~~$20.5 million and $33.5~~$4.7 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022 and our income tax benefit was ~~$(19.6) million and $(25.3)~~$5.4 million in the three ~~and nine~~ months ended ~~September 26, 2020, respectively.~~April 3, 2021. The effective tax rate for Summit Inc. differs from the federal statutory tax rate primarily due to (1) ~~unrecognized tax benefits in 2020, (2)~~ state taxes, ~~(3)~~(2) tax depletion expense in excess of the expense recorded under U.S. GAAP, (3) basis differences in assets divested, (4) the minority interest in the Summit Holdings partnership that is allocated outside of the Company and (5) various other items such as limitations on meals and entertainment, certain stock compensation and other costs. ~~Additionally, in the first quarter~~

Table of 2020, we recorded the impact of the Coronavirus Aid, Relief and Economic Stability Act ("CARES Act") enacted into law in late March 2020, which reduced our unrecognized tax benefits by approximately $9.5 million. In the third quarter of 2020, final regulations were issued clarifying portions of the Tax Cuts and Jobs Act of 2017 ("TCJA"). Under the provisions of the final regulations, we reversed unrecognized tax benefits of $32.9 million in the third quarter of 2020.Contents

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible, as well as consideration of tax-planning strategies we may seek to utilize net operating loss carryforwards that begin to expire in 2030.

~~Table of Contents~~

Segment results of operations

West Segment


		Three months ended										Nine months ended											Three months ended
($ in thousands)	($ in thousands)	October 2, 2021			September 26, 2020			Variance				October 2, 2021			September 26, 2020			Variance				($ in thousands)	April 2, 2022	April 3, 2021			Variance
Net revenue	Net revenue	$	338,575		$	351,510		$	(12,935)	(3.7)	%	$	886,936		$	835,026		$	51,910	6.2	%	Net revenue		$	236,002		$	234,744		$	1,258	0.5	%
Operating income	Operating income	67,427			72,280			(4,853)		(6.7)	%	135,693			129,288			6,405		5.0	%	Operating income		7,992			15,057			(7,065)		(46.9)	%
Operating margin percentage	Operating margin percentage	19.9		%	20.6		%					15.3		%	15.5		%					Operating margin percentage		3.4		%	6.4		%
Adjusted EBITDA (1)	Adjusted EBITDA (1)	$	92,303		$	95,470		$	(3,167)	(3.3)	%	$	211,722		$	196,881		$	14,841	7.5	%	Adjusted EBITDA (1)		$	32,692		$	40,648		$	(7,956)	(19.6)	%
Adjusted EBITDA Margin (1)	Adjusted EBITDA Margin (1)	27.3		%	27.2		%					23.9		%	23.6		%					Adjusted EBITDA Margin (1)		13.9		%	17.3		%

Net revenue in the West segment ~~decreased $12.9~~increased $1.3 million ~~for~~in the three months ended ~~October~~April 2, 2021, as increases in net revenues in aggregates were more than offset by a decrease in asphalt and paving revenues due to a divestiture in the second quarter of 2021. Net revenue in the West segment increased $51.9 million in the nine months ended October 2, 2021,2022, as increases in net revenues in aggregates and ready-mix concrete outpaced a decrease in asphalt and paving revenues due to a divestiture in the second quarter of 2021. Organic aggregate volumes increased ~~6.6%~~3.9% in the first ~~nine~~three months of ~~2021~~2022 as compared to the first ~~nine~~three months of ~~2020,~~2021, and organic aggregates average sales prices increased ~~3.0%~~3.7%, primarily due to strong demand in our Texas, as well as in our Intermountain West geography and increased projects in British Columbia. Organic ready-mix concrete volumes ~~increased 8.9%~~decreased 0.9% and our organic ready-mix concrete average sales prices increased ~~3.3%~~7.0%. Organic ready-mix volumes were strong in 2022 in south Texas which were offset by slightly lower volumes in the Intermountain Region. Residential construction activity remains strong, particularly in the Houston and Salt Lake City areas, two of our largest metro areas where we operate. We continue to monitor that activity given recent increases in mortgage rates and other inflationary concerns.

The West segment’s operating income decreased ~~$4.9 million and increased $6.4~~$7.1 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022. Adjusted EBITDA decreased ~~$3.2 million and increased $14.8~~$8.0 million and Adjusted EBITDA Margin ~~increased~~decreased to ~~27.3%~~13.9% from ~~27.2% and to 23.9% from 23.6%~~17.3% in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022. The decreases in operating income and Adjusted EBITDA for the ~~third~~first quarter of ~~2021~~2022 occurred primarily due to higher sub-contractor costs, as ~~the weather conditions in 2021 in Texas were less favorable~~well as ~~compared to 2020, which has resulted in operational inefficiencies.~~increased repair and maintenance and fuel costs. The operating margin percentage in the West segment decreased in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 due to the aggregate product mix in Texas as well as the other factors noted above.

Gross revenue by product/ service was as follows:


		Three months ended								Nine months ended									Three months ended
($ in thousands)	($ in thousands)	October 2, 2021		September 26, 2020		Variance				October 2, 2021		September 26, 2020		Variance				($ in thousands)	April 2, 2022	April 3, 2021		Variance
Revenue by product*:	Revenue by product*:																	Revenue by product*:
Aggregates	Aggregates	$	91,701	$	81,981	$	9,720	11.9	%	$	251,324	$	199,506	$	51,818	26.0	%	Aggregates		$	77,782	$	72,138	$	5,644	7.8	%
Ready-mix concrete	Ready-mix concrete	138,371		132,847		5,524		4.2	%	406,858		361,541		45,317		12.5	%	Ready-mix concrete		134,591		126,986		7,605		6.0	%
Asphalt	Asphalt	74,695		100,409		(25,714)		(25.6)	%	161,847		205,041		(43,194)		(21.1)	%	Asphalt		13,600		27,688		(14,088)		(50.9)	%
Paving and related services	Paving and related services	119,385		159,307		(39,922)		(25.1)	%	270,042		324,880		(54,838)		(16.9)	%	Paving and related services		32,503		46,889		(14,386)		(30.7)	%
Other	Other	(54,902)		(84,234)		29,332		34.8	%	(131,720)		(171,952)		40,232		23.4	%	Other		(6,244)		(22,568)		16,324		72.3	%
Total revenue	Total revenue	$	369,250	$	390,310	$	(21,060)	(5.4)	%	$	958,351	$	919,016	$	39,335	4.3	%	Total revenue		$	252,232	$	251,133	$	1,099	0.4	%

*Revenue by product includes intercompany and intracompany sales transferred at market value. The elimination of intracompany transactions is included in “Other.” Revenue from the liquid asphalt terminals is included in asphalt revenue.

The West segment’s percent changes in sales volumes and pricing in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 from the three ~~and nine~~ months ended ~~September 26, 2020~~April 3, 2021 were as follows:

3026

Table of Contents


		Three months ended				Nine months ended					Three months ended
		Percentage Change in				Percentage Change in					Percentage Change in
		Volume		Pricing		Volume		Pricing				Volume		Pricing
Aggregates	Aggregates	9.4	%	2.3	%	24.4	%	1.3	%	Aggregates		3.9	%	3.7	%
Ready-mix concrete	Ready-mix concrete	0.7	%	3.4	%	8.9	%	3.3	%	Ready-mix concrete		(0.9)	%	7.0	%
Asphalt	Asphalt	(23.1)	%	1.8	%	(20.1)	%	2.3	%	Asphalt		(50.7)	%	10.3	%

Revenue from aggregates in the West segment increased ~~$9.7 million and $51.8~~$5.6 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022, due to an increase in aggregates sales ~~volumes.~~volumes and prices. In the three months ended ~~October~~April 2, ~~2021,~~2022, aggregate volumes increased ~~9.4%~~3.9%, primarily due to ~~acquisition related~~strong volumes in ~~South~~ Texas ~~and Vancouver,~~ as well as ~~organic volume increases~~ in ~~our~~the Intermountain West markets. ~~In the nine months ended October 2, 2021, the increases in aggregates volumes occurred in all of our markets which had organic growth coupled with increased acquisition volumes.~~ Aggregates pricing for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 increased ~~2.3% and 1.3%, respectively,~~3.7% when compared to the same period in ~~2020~~2021 due to prices increases ~~and market demand, offset by the impact of lower prices on acquisition related volumes.~~in all our markets.

Revenue from ready-mix concrete in the West segment increased ~~$5.5 million and $45.3~~$7.6 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022. For the three ~~and nine~~ months ended ~~October~~April 2, ~~2021,~~2022, organic ready-mix concrete prices increased ~~3.4% and 3.3%, respectively.~~7.0%. For the three ~~and nine~~ months ended ~~October~~April 2, ~~2021,~~2022, our ready-mix concrete organic volumes ~~increased 0.7% and 8.9%, respectively,~~decreased 0.9% as ~~there were~~ strong volume increases in south Texas were offset by declines in the Intermountain ~~geographies, where we continue to see strong residential volumes.~~West geographies.

In May 2021, we divested our paving business in South Texas, which reduced our volumes and revenues subsequent to the closing date. Revenue from asphalt in the West segment decreased ~~$25.7 million and $43.2~~$14.1 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022. For the three ~~and nine~~ months ended ~~October~~April 2, ~~2021,~~2022, asphalt volumes decreased ~~23.1% and 20.1%, respectively.~~50.7%. Average sales prices for asphalt increased ~~1.8% and 2.3%~~10.3% in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022. Revenue for paving and related services in the West segment decreased by ~~$39.9 million and $54.8~~$14.4 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022.

Prior to eliminations of intercompany transactions, the net effect of volume and pricing changes on gross revenue in the ~~nine~~three months ended ~~October~~April 2, ~~2021~~2022 was approximately ~~$37.1~~$(2.9) million and ~~$16.8~~$3.8 million, respectively.

East Segment


		Three months ended										Nine months ended											Three months ended
($ in thousands)	($ in thousands)	October 2, 2021			September 26, 2020			Variance				October 2, 2021			September 26, 2020			Variance				($ in thousands)	April 2, 2022	April 3, 2021			Variance
Net revenue	Net revenue	$	231,184		$	208,862		$	22,322	10.7	%	$	573,343		$	529,405		$	43,938	8.3	%	Net revenue		$	110,268		$	123,068		$	(12,800)	(10.4)	%
Operating income		45,018			29,296			15,722		53.7	%	69,249			49,014			20,235		41.3	%
Operating loss																						Operating loss		(10,727)			(10,374)			(353)		(3.4)	%
Operating margin percentage	Operating margin percentage	19.5		%	14.0		%					12.1		%	9.3		%					Operating margin percentage		(9.7)		%	(8.4)		%
Adjusted EBITDA (1)	Adjusted EBITDA (1)	$	69,084		$	56,943		$	12,141	21.3	%	$	138,113		$	119,900		$	18,213	15.2	%	Adjusted EBITDA (1)		$	8,136		$	11,745		$	(3,609)	(30.7)	%
Adjusted EBITDA Margin (1)	Adjusted EBITDA Margin (1)	29.9		%	27.3		%					24.1		%	22.6		%					Adjusted EBITDA Margin (1)		7.4		%	9.5		%

Net revenue in the East segment ~~increased $22.3 million and $43.9~~decreased $12.8 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022, as compared to the same period a year ago, as the ~~increases~~decreases in ~~aggregates, asphalt~~ready-mix concrete and paving and related services exceeded ~~a decrease~~an increase in ~~ready-mix concrete~~asphalt revenues. Operating ~~income~~loss increased ~~$15.7 million and $20.2~~$0.4 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively, primarily due to net revenue gains in excess of~~2022, as increases in our cost of ~~revenue.~~revenue exceeded our increases in average sales prices. Adjusted EBITDA ~~increased $12.1 million and $18.2~~decreased $3.6 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022 and Adjusted EBITDA Margin ~~increased~~decreased to ~~29.9%~~7.4% from ~~27.3% and to 24.1% from 22.6%~~9.5% in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022, as compared to the same period a year ago.

Operating margin percentage for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021 increased~~2022 decreased to ~~19.5%~~(9.7)% from ~~14.0% and to 12.1% from 9.3%~~(8.4)%, ~~respectively,~~ from the comparable period a year ago, due to the items noted above.

~~Table of Contents~~

Gross revenue by product/ service was as follows:

Three months ended Nine months ended
($ in thousands) October 2, 2021 September 26, 2020 Variance October 2, 2021 September 26, 2020 Variance
Revenue by product*:
Aggregates $ 110,822 $ 96,396 $ 14,426 15.0 % $ 289,588 $ 265,992 $ 23,596 8.9 %
Ready-mix concrete 44,842 46,414 (1,572) (3.4) % 118,627 127,493 (8,866) (7.0) %
Asphalt 48,669 37,276 11,393 30.6 % 93,368 70,109 23,259 33.2 %
Paving and related services 75,293 73,207 2,086 2.8 % 162,342 145,768 16,574 11.4 %
Other (24,136) (18,858) (5,278) (28.0) % (28,266) (19,021) (9,245) (48.6) %
Total revenue $ 255,490 $ 234,435 $ 21,055 9.0 % $ 635,659 $ 590,341 $ 45,318 7.7 %

Table of Contents


	Three months ended
($ in thousands)	April 2, 2022	April 3, 2021		Variance
Revenue by product*:
Aggregates		$	71,644	$	71,656	$	(12)	—	%
Ready-mix concrete		23,011		31,350		(8,339)		(26.6)	%
Asphalt		3,901		3,537		364		10.3	%
Paving and related services		7,834		14,919		(7,085)		(47.5)	%
Other		16,100		14,580		1,520		10.4	%
Total revenue		$	122,490	$	136,042	$	(13,552)	(10.0)	%

The East segment’s percent changes in sales volumes and pricing in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 from the three ~~and nine~~ months ended ~~September 26, 2020~~April 3, 2021 were as follows:


		Three months ended				Nine months ended					Three months ended
		Percentage Change in				Percentage Change in					Percentage Change in
		Volume		Pricing		Volume		Pricing				Volume		Pricing
Aggregates	Aggregates	8.9	%	5.5	%	5.3	%	3.4	%	Aggregates		(6.5)	%	7.0	%
Ready-mix concrete	Ready-mix concrete	(7.5)	%	4.3	%	(10.2)	%	3.6	%	Ready-mix concrete		(32.5)	%	8.9	%
Asphalt	Asphalt	18.6	%	5.4	%	23.6	%	2.6	%	Asphalt		(8.1)	%	14.5	%

Revenue from aggregates in the East segment ~~increased $14.4 million and $23.6 million~~remained flat in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022 as compared to the same period a year ago. Aggregate volumes in the first ~~nine~~three months of ~~2021 increased 5.3%, as we had~~2022 decreased 6.5% primarily due to our divestiture program, partially offset by organic growth in our ~~North Kansas, Virginia and Carolinas markets.~~Georgia operations. Aggregates organic pricing increased ~~6.1% and 4.0%~~7.7% in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022, as compared to the same period a year ago.

Revenue from ready-mix concrete in the East segment decreased ~~$1.6 million and $8.9~~$8.3 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022, as compared to the same period in ~~2020,~~2021, as our realized price increases of ~~4.3% and 3.6%, respectively,~~8.9% were not enough to overcome a 32.5% volume ~~decreases~~decrease primarily due to divestitures and lower volumes in Kansas as wind farm projects in 2020 were not fully replaced in 2021. In the three and nine months ended October 2, 2021, ready-mix concrete volumes decreased 7.5% and 10.2%, respectively, compared to prior year levels primarily due to the items noted above.impacted by weather conditions.

Revenue from asphalt increased ~~$11.4 million and $23.3~~$0.4 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022, when compared to the same period in ~~2020.~~2021. The increase was mainly attributable to higher volumes in ~~Kentucky, where our volumes in 2020 were impacted by decreased volumes due to COVID-19, as well as increases in Kansas and Virginia.~~Kentucky. Asphalt pricing increased ~~2.6%~~14.5% in the ~~nine~~three months ended ~~October~~April 2, ~~2021,~~2022, due to product ~~mix.~~mix and asphalt mix design. Paving and related service revenue ~~increased $2.1 million and $16.6~~decreased $7.1 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022, primarily due to the items noted above.

Prior to eliminations of intercompany transactions, the net effect of volume and pricing changes on gross revenue in the ~~nine~~three months ended ~~October~~April 2, ~~2021~~2022 was approximately ~~$19.2~~$(17.6) million and ~~$18.8~~$9.6 million, respectively.

~~Table of Contents~~

Cement Segment


		Three months ended										Nine months ended											Three months ended
($ in thousands)	($ in thousands)	October 2, 2021			September 26, 2020			Variance				October 2, 2021			September 26, 2020			Variance				($ in thousands)	April 2, 2022	April 3, 2021			Variance
Net revenue	Net revenue	$	92,500		$	84,874		$	7,626	9.0	%	$	218,991		$	198,461		$	20,530	10.3	%	Net revenue		$	46,225		$	40,669		$	5,556	13.7	%
Operating income		30,012			23,975			6,037		25.2	%	45,767			34,579			11,188		32.4	%
Operating loss																						Operating loss		(13,506)			(10,046)			(3,460)		(34.4)	%
Operating margin percentage	Operating margin percentage	32.4		%	28.2		%					20.9		%	17.4		%					Operating margin percentage		(29.2)		%	(24.7)		%
Adjusted EBITDA (1)	Adjusted EBITDA (1)	$	40,360		$	35,086		$	5,274	15.0	%	$	82,281		$	63,172		$	19,109	30.2	%	Adjusted EBITDA (1)		$	(5,819)		$	2,499		$	(8,318)	(332.9)	%
Adjusted EBITDA Margin (1)	Adjusted EBITDA Margin (1)	43.6		%	41.3		%					37.6		%	31.8		%					Adjusted EBITDA Margin (1)		(12.6)		%	6.1		%

Net revenue in the Cement segment increased ~~$7.6 million and $20.5~~$5.6 million primarily due to an average price increase of 10.1% coupled with increased organic cement volumes of ~~2.0% and 6.5%~~0.3% in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022. Our Green America Recycling facility, which provides alternative fuel for one of our plants, is now operational; however, ~~revenue from that~~the facility ~~is below 2020 levels for~~was not operational in the ~~nine months ended October 2,~~first quarter of 2021, ~~as we completed repairs and commissioning activities~~ after its prolonged shutdown due to an explosion in April 2020.

Table of Contents

Operating ~~income~~loss increased ~~$6.0 million and $11.2~~$3.5 million during the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022. Adjusted EBITDA ~~increased $5.3 million and $19.1~~decreased $8.3 million and Adjusted EBITDA Margin decreased to ~~43.6%~~(12.6)% from ~~41.3% and increased to 37.6% from 31.8%~~6.1% in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively.~~2022. In the first ~~nine months~~quarter of 2022, our repair and maintenance costs were also elevated over the comparable prior period. In the first quarter of 2021, we received $1.2 million in insurance proceeds relative to property, plant and equipment that was destroyed in the recycling plant explosion that occurred in April 2020, which was recorded as gain on sale of assets. In addition, we received ~~$7.9~~$4.3 million in business interruption insurance proceeds in the first ~~nine months~~quarter of 2021, which was recorded as other income.

Operating margin percentage for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021 increased~~2022 decreased to ~~32.4%~~(29.2)% from ~~28.2% and to 20.9% from 17.4%~~(24.7)%, ~~respectively,~~ from the comparable period a year ago. The ~~increased~~decreased operating margin for the ~~nine~~three months ended ~~October~~April 2, ~~2021~~2022 was primarily due to increased levels of repair and maintenance costs, ~~due to increased capitalization of costs into inventory~~ as well as ~~lower levels~~the impact of ~~incentive compensation~~selling more imported tons of cement in 2022 than in 2021. We expect to import cement throughout the ~~third quarter~~duration of ~~2020.~~2022 to keep pace with demand. Production levels in the first three ~~and nine~~ months of ~~2021~~2022 were ~~slightly higher~~less than the comparable period in ~~2020.~~2021.

Gross revenue by product was as follows:


		Three months ended								Nine months ended									Three months ended
($ in thousands)	($ in thousands)	October 2, 2021		September 26, 2020		Variance				October 2, 2021		September 26, 2020		Variance				($ in thousands)	April 2, 2022	April 3, 2021		Variance
Revenue by product*:	Revenue by product*:																	Revenue by product*:
Cement	Cement	$	90,648	$	85,108	$	5,540	6.5	%	$	215,024	$	195,972	$	19,052	9.7	%	Cement		$	43,806	$	39,703	$	4,103	10.3	%
Other	Other	1,852		(234)		2,086		(891.5)	%	3,967		2,489		1,478		59.4	%	Other		2,419		966		1,453		150.4	%
Total revenue	Total revenue	$	92,500	$	84,874	$	7,626	9.0	%	$	218,991	$	198,461	$	20,530	10.3	%	Total revenue		$	46,225	$	40,669	$	5,556	13.7	%

*Revenue by product includes intercompany and intracompany sales transferred at market value. Revenue from waste processing and the elimination of intracompany transactions is included in Other.

The Cement segment’s percent changes in sales volumes and pricing in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021~~2022 from the three ~~and nine~~ months ended ~~September 26, 2020~~April 3, 2021 were as follows:

Three months ended Nine months ended
Percentage Change in Percentage Change in
Volume Pricing Volume Pricing
Cement 2.0 % 4.4 % 6.5 % 3.0 %


	Three months ended
	Percentage Change in
		Volume		Pricing
Cement		0.3	%	10.1	%

~~Table of Contents~~

Revenue from cement increased ~~$5.5 million and $19.1~~$4.1 million in the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022 due to ~~volume increases of 2.0% and 6.5%, respectively, supplemented by~~ organic cement pricing gains ~~in the three and nine months ended October 2, 2021.~~of 10.1%, supplemented by a volume increase of 0.3%.

Liquidity and Capital Resources

Our primary sources of liquidity include cash on-hand, cash provided by operations, amounts available for borrowing under our senior secured credit facilities and capital-raising activities in the debt and capital markets. In addition to our current sources of liquidity, we have access to liquidity through public offerings of shares of our Class A common stock. To facilitate such offerings, in January 2020, we filed a shelf registration statement with the SEC that will expire in January 2023. The amount of Class A common stock to be issued pursuant to this shelf registration statement was not specified when it was filed and there is no specific limit on the amount we may issue. The specifics of any future offerings, along with the use of the proceeds thereof, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

As of ~~October~~April 2, ~~2021,~~2022, we had ~~$258.1~~$287.4 million in cash and cash equivalents and ~~$503.9~~$472.8 million of working capital compared to ~~$418.2~~$381.0 million and ~~$570.6~~$560.5 million, respectively, at January ~~2, 2021.~~1, 2022. Working capital is calculated as current assets less current liabilities. There were no restricted cash balances as of ~~October~~April 2, ~~2021~~2022 or January ~~2, 2021.~~1, 2022. We had no outstanding borrowings on our senior secured revolving credit facility, which had borrowing capacity of ~~$329.1~~$324.6 million as of ~~October~~April 2, ~~2021,~~2022, which is net of ~~$15.9~~$20.4 million of outstanding letters of credit and is fully available to us within the terms and covenant requirements of our credit agreement governing the senior secured credit facilities (the “Credit Agreement”).

In March 2022, our Board of Directors authorized a share repurchase program, whereby we can repurchase up to $250.0 million of our Class A common stock. During the first quarter of 2022, we repurchased 1.5 million shares of Class A common stock for $47.5 million. As of April 2, 2022, approximately $202.5 million remained available for share repurchases under the share repurchase program.

Table of Contents

Given the seasonality of our business, we typically experience significant fluctuations in working capital needs and balances throughout the year. Our working capital requirements generally increase during the first half of the year as we build up inventory and focus on repair and maintenance and other set-up costs for the upcoming season. Working capital levels then decrease as the construction season winds down and we enter the winter months, which is when we see significant inflows of cash from the collection of receivables.

As of ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021,~~1, 2022, our long-term borrowings totaled $1.6 billion ~~and $1.9 billion, respectively,~~ for which we incurred ~~$20.8 million and $63.2~~$17.7 million of interest expense for the three ~~and nine~~ months ended ~~October~~April 2, ~~2021, respectively,~~2022, and ~~$21.5 million and $68.4~~$21.2 million for the three ~~and nine~~ months ended ~~September 26, 2020, respectively.~~April 3, 2021. We expect that normal operating cash flow will be sufficient to fund our seasonal working capital needs. We had no outstanding borrowings on the revolving credit facility as of ~~October~~April 2, ~~2021.~~2022.

We believe we have access to sufficient financial resources from our liquidity sources to fund our business and operations, including contractual obligations, capital expenditures and debt service obligations, for at least the next twelve months. Our growth strategy contemplates future acquisitions for which we believe we have sufficient access to capital. We also plan to divest of certain dilutive businesses as we rationalize our portfolio, which will also generate additional capital. As of April 2, 2022, we reclassified an operating unit in the East region as held for sale. We expect to close on the transaction in the second quarter of 2022.

We and our affiliates may from time to time purchase our outstanding debt through open market purchases, privately negotiated transactions or otherwise. Purchases or retirement of debt, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Indebtedness

Please refer to the notes to the consolidated interim financial statements for detailed information about our long-term debt, scheduled maturities of long-term debt and affirmative and negative covenants, including the maximum allowable consolidated first lien net leverage ratio. As of ~~October~~April 2, ~~2021,~~2022, we were in compliance with all debt covenants. At ~~October~~April 2, ~~2021~~2022 and January ~~2, 2021,~~1, 2022, $1.6 billion ~~and $1.9 billion, respectively,~~ of total debt was outstanding under our respective debt agreements.

Cash Flows

The following table summarizes our net cash used in or provided by operating, investing and financing activities and our capital expenditures in the ~~nine~~three months ended ~~October~~April 2, ~~2021~~2022 and ~~September 26, 2020:~~April 3, 2021:

~~Table of Contents~~


		Summit Inc.					Summit Inc.
($ in thousands)	($ in thousands)	October 2, 2021		September 26, 2020		($ in thousands)	April 2, 2022		April 3, 2021
Net cash provided by (used in):	Net cash provided by (used in):					Net cash provided by (used in):
Operating activities	Operating activities	$	207,373	$	218,039	Operating activities	$	(16,713)	$	(21,318)
Investing activities	Investing activities	(65,316)		(252,958)		Investing activities	(9,371)		(34,500)
Financing activities	Financing activities	(302,092)		12,573		Financing activities	(67,662)		(2,762)

Operating activities

During the ~~nine~~three months ended ~~October~~April 2, ~~2021,~~2022, cash ~~provided by~~used in operating activities was ~~$207.4~~$16.7 million primarily as a result of:

•Net ~~income~~loss of ~~$109.9~~$34.8 million, ~~increased~~decreased by non-cash expenses, including ~~$177.8~~$54.8 million of depreciation, depletion, amortization and accretion expense and ~~$14.9~~$5.4 million of share-based compensation, ~~reduced~~offset by the net gain on ~~sale~~asset and business disposals of ~~businesses and other assets of $19.3~~$15.7 million.

•Billed and unbilled accounts receivable ~~increased~~decreased by ~~$105.1~~$29.4 million in the first ~~nine~~three months of ~~2021~~2022 as a result of the seasonality of our business. The majority of our sales occur in the spring, summer and fall and we typically incur an increase in accounts receivable (net billed and unbilled) during the second and third quarters of each year. This amount is typically converted to cash in the fourth and first quarters. Our inventory levels decreased during the second quarter as business activity increased during the quarter.

Table of Contents

first half of the year and paid by year-end. In addition, we made ~~$77.9~~$31.8 million of interest payments in the ~~nine~~three months ended ~~October~~April 2, ~~2021.~~2022.

During the ~~nine~~three months ended ~~September 26, 2020,~~April 3, 2021, cash ~~provided by~~used in operating activities was ~~$218.0~~$21.3 million primarily as a result of:

•Net ~~income~~loss of ~~$104.9~~$23.2 million, ~~increased~~decreased by non-cash expenses, including ~~$164.4~~$59.1 million of depreciation, depletion, amortization and accretion expense and ~~$23.1~~$5.4 million of share-based ~~compensation.~~compensation, offset by the gain on sale of a business and other assets of $16.0 million.

•Billed and unbilled accounts receivable increased by ~~$79.3~~$3.5 million in the first ~~nine~~three months of ~~2020~~2021 as a result of the seasonality of our business. The majority of our sales occur in the spring, summer and fall and we typically incur an increase in accounts receivable (net billed and unbilled) during the second and third quarters of each year. This amount is typically converted to cash in the fourth and first quarters. Our inventory levels also increased during the first quarter as we prepared for the increase in activity over the warmer months.

•The timing of payments associated with accounts payable and accrued expenses of cash, which is consistent with the seasonality of our business whereby we build-up inventory levels and incur repairs and maintenance costs to ready the business for increased sales volumes in the summer and fall. These costs are typically incurred in the first half of the year and paid by year-end. In addition, we made ~~$86.4~~$29.5 million of interest payments in the ~~nine~~three months ended ~~September 26, 2020.~~April 3, 2021.

Investing activities

During the ~~nine~~three months ended ~~October~~April 2, ~~2021,~~2022, cash used for investing activities was ~~$65.3~~$9.4 million, of which ~~$170.1 million was invested in capital expenditures, which was offset by $103.6 million of proceeds from the sale of businesses, as well as $8.8 million of proceeds from asset sales.~~

~~During the nine months ended September 26, 2020, cash used for investing activities was $253.0 million, of which $123.2 million related to three acquisitions completed in the period and $140.0~~$57.8 million was invested in capital expenditures, which was partially offset by ~~$8.8~~$47.8 million of proceeds from the sale of a business in the East segment, as well as $1.4 million of proceeds from asset sales.

During the three months ended April 3, 2021, cash used for investing activities was $34.5 million, of which $69.8 million was invested in capital expenditures, which was partially offset by $2.7 million of proceeds from asset sales. Additionally, in February 2021 we received $33.1 million of proceeds from the sale of a business in the East segment.

Financing activities

During the ~~nine~~three months ended ~~October~~April 2, 2022, cash used in financing activities was $67.7 million. We made $7.6 million of payments on debt, $11.4 million payments on acquisition-related liabilities and used $47.5 million to repurchase shares of Class A common stock.

During three months ended April 3, 2021, cash used in financing activities was ~~$302.1~~$2.8 million. We ~~made $323.8 million of payments on debt, including the redemption of $300.0 million of the 2025 Senior Notes in September 2021,~~ received

~~Table of Contents~~

~~$32.4~~ $15.9 million of proceeds from stock option exercises, which was offset by ~~$9.8 million payments on acquisition-related liabilities.~~

~~During the nine months ended September 26, 2020, cash provided by financing activities was $12.6 million. We received $700.0 million from the issuance of the 2029 Notes, which was offset by $10.4~~$8.1 million payments on acquisition-related liabilities and ~~$666.9~~$10.2 million of payments on ~~debt, including the retirement of the 2023 Notes.~~debt.

Cash paid for capital expenditures

We paid cash of approximately ~~$170.1~~$57.8 million in capital expenditures in the ~~nine~~three months ended ~~October~~April 2, ~~2021~~2022 compared to ~~$140.0~~$69.8 million in the ~~nine~~three months ended ~~September 26, 2020.~~April 3, 2021.

We currently estimate that we will invest between ~~$200~~$270 million to ~~$220~~$290 million ~~including approximately $25 million to $35 million for~~inclusive of spend associated with greenfield projects. We increased our capital expenditure estimate from previously disclosed amounts as we invested in reserves subsequent to quarter end, as well as incremental capital purchases to service demand in high growth markets. The timing of our greenfield expenditures is dependent upon the timing of when permits may be issued. We expect to fund our capital expenditure program through cash on hand, cash from operations, and outside financing arrangements ~~and available borrowings under~~including our revolving credit facility.

Tax Receivable Agreement

When the Company purchases LP Units for cash or LP Units are exchanged for shares of Class A common stock, this results in increases in the Company’s share of the tax basis of the tangible and intangible assets of Summit Holdings. These increases in tax basis may increase, for tax purposes, depreciation and amortization deductions and therefore reduce the amount of tax that Summit Inc. would otherwise be required to pay in the future. In connection with our initial public offering, we entered into a TRA with the holders of the LP Units that provides for the payment by Summit Inc. to exchanging holders of LP Units of 85% of the benefits, if any, that Summit Inc. actually realizes (or, under certain circumstances such as an early

Table of Contents

termination of the TRA is deemed to realize) as a result of these increases in tax basis and certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA. The increases in tax basis as a result of an exchange of LP Units for shares of Class A common stock, as well as the amount and timing of any payments under the TRA, are difficult to accurately estimate, as they will vary depending upon a number of factors, including the timing of the exchanges, the price of our Class A common stock at the time of the exchange, the extent to which the exchanges are taxable, the amount and timing of our income and the effective tax rate.

We anticipate funding payments under the TRA from cash flows from operations, available cash and available borrowings under our Senior Secured Revolving Credit Facilities. As of ~~October~~April 2, ~~2021,~~2022, we had accrued ~~$330.9~~$326.5 million as TRA liability in our consolidated financial statements. We do not expect significant payments on our TRA liability to occur within the next twelve months.

Based upon a ~~$33.34~~$30.81 per share price of our Class A common stock, the closing price of our stock on the last trading day of the three months ended ~~October~~April 2, ~~2021,~~2022, and a contractually defined discount rate of ~~1.24%~~3.17%, we estimate that if Summit Inc. were to exercise its right to terminate the TRA, the aggregate amount required to settle the TRA would be approximately ~~$321.7~~$282.2 million. Estimating the amount and the timing of payments that may be made under the TRA is by its nature difficult and imprecise, insofar as the amounts payable depends on a variety of factors, including, but not limited to, the timing of future exchanges, our stock price at the date of the exchange and the timing of the generation of future taxable income. The increases in tax basis as a result of an exchange, as well as the amount and timing of any payments under the TRA, will vary depending on a variety of factors.

Commitments and contingencies

We are party to certain legal actions arising from the ordinary course of business activities. Accruals are recorded when the outcome is probable and can be reasonably estimated. While the ultimate results of claims and litigation cannot be predicted with certainty, management expects that the ultimate resolution of all pending or threatened claims and litigation will not have a material effect on our consolidated financial position, results of operations or liquidity. We record legal fees as incurred.

Environmental Remediation—Our operations are subject to and affected by federal, state, provincial and local laws and regulations relating to the environment, health and safety and other regulatory matters. These operations require environmental operating permits, which are subject to modification, renewal and revocation. We regularly monitor and review

~~Table of Contents~~

its operations, procedures and policies for compliance with these laws and regulations. Despite these compliance efforts, risk of environmental liability is inherent in the operation of our business, as it is with other companies engaged in similar businesses and there can be no assurance that environmental liabilities and noncompliance will not have a material adverse effect on our consolidated financial condition, results of operations or liquidity.

Other—We are obligated under various firm purchase commitments for certain raw materials and services that are in the ordinary course of business. Management does not expect any significant changes in the market value of these goods and services during the commitment period that would have a material adverse effect on the financial condition, results of operations, and cash flows of the Company. The terms of the purchase commitments generally approximate one year.

Off-Balance sheet arrangements

As of ~~October~~April 2, ~~2021,~~2022, we had no material off-balance sheet arrangements.

Non-GAAP Performance Measures

We evaluate our operating performance using metrics that we refer to as “Adjusted EBITDA,” “Adjusted EBITDA Margin,” “Adjusted Cash Gross Profit” and “Adjusted Cash Gross Profit Margin” which are not defined by U.S. GAAP and should not be considered as an alternative to earnings measures defined by U.S. GAAP. We define Adjusted EBITDA as EBITDA, adjusted to exclude accretion, loss on debt financings, gain on sale of business, non-cash compensation and certain other non-cash and non-operating items. Beginning with the first quarter of 2021, the Company no longer adjusts for transaction costs, as those costs are recurring cash payments and included in general and administrative expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net revenue. We define Adjusted Cash Gross Profit as operating income before general and administrative expenses, depreciation, depletion, amortization and accretion and Adjusted Cash Gross Profit Margin as Adjusted Cash Gross Profit as a percentage of net revenue.

Table of Contents

We present Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the convenience of investment professionals who use such metrics in their analyses. The investment community often uses these metrics to assess the operating performance of a company’s business and to provide a consistent comparison of performance from period to period. We use these metrics, among others, to assess the operating performance of our individual segments and the consolidated company.

Non-GAAP financial measures are not standardized; therefore, it may not be possible to compare such financial measures with other companies’ non-GAAP financial measures having the same or similar names. We strongly encourage investors to review our consolidated financial statements in their entirety and not rely on any single financial measure.

The tables below reconcile our net income (loss) to EBITDA and Adjusted EBITDA, present Adjusted EBITDA by segment and reconcile operating income to Adjusted Cash Gross Profit for the periods indicated:


Reconciliation of Net Income (Loss) to Adjusted EBITDA	Reconciliation of Net Income (Loss) to Adjusted EBITDA	Three months ended October 2, 2021										Reconciliation of Net Income (Loss) to Adjusted EBITDA	Three months ended April 2, 2022
by Segment	by Segment	West		East		Cement		Corporate		Consolidated		by Segment	West		East		Cement		Corporate		Consolidated
($ in thousands)	($ in thousands)											($ in thousands)
Net income (loss)	Net income (loss)	$	69,457	$	47,924	$	34,310	$	(76,313)	$	75,378	Net income (loss)	$	11,901	$	7,366	$	(8,431)	$	(45,636)	$	(34,800)
Interest (income) expense(1)	Interest (income) expense(1)	(2,933)		(2,237)		(4,359)		33,663		24,134		Interest (income) expense(1)	(3,970)		(3,451)		(4,962)		32,532		20,149
Income tax expense		976		119		—		19,418		20,513
Income tax expense (benefit)												Income tax expense (benefit)	176		(106)		—		(4,813)		(4,743)
Depreciation, depletion and amortization	Depreciation, depletion and amortization	24,577		22,412		10,324		1,068		58,381		Depreciation, depletion and amortization	24,348		17,884		7,498		749		50,479
EBITDA	EBITDA	$	92,077	$	68,218	$	40,275	$	(22,164)	$	178,406	EBITDA	$	32,455	$	21,693	$	(5,895)	$	(17,168)	$	31,085
Accretion	Accretion	219		397		85		—		701		Accretion	227		411		76		—		714
Loss on debt financings		—		—		—		6,016		6,016

(Gain) loss on sale of businesses		(135)		248		—		—		113

Gain on sale of businesses												Gain on sale of businesses	—		(14,205)		—		—		(14,205)
Non-cash compensation	Non-cash compensation	—		—		—		4,685		4,685		Non-cash compensation	—		—		—		5,422		5,422
Other	Other	142		221		—		—		363		Other	10		237		—		—		247
Adjusted EBITDA	Adjusted EBITDA	$	92,303	$	69,084	$	40,360	$	(11,463)	$	190,284	Adjusted EBITDA	$	32,692	$	8,136	$	(5,819)	$	(11,746)	$	23,263


Reconciliation of Net Income (Loss) to Adjusted EBITDA	Three months ended April 3, 2021
by Segment	West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income (loss)	$	17,436	$	6,969	$	(1,605)	$	(46,045)	$	(23,245)
Interest (income) expense (1)	(2,032)		(1,720)		(4,045)		31,983		24,186
Income tax expense (benefit)	186		(66)		—		(5,563)		(5,443)
Depreciation, depletion and amortization	24,924		21,474		8,068		1,104		55,570
EBITDA	$	40,514	$	26,657	$	2,418	$	(18,521)	$	51,068
Accretion	216		469		81		—		766


Gain on sale of business	—		(15,668)		—		—		(15,668)
Non-cash compensation	—		—		—		5,363		5,363
Other	(82)		287		—		—		205
Adjusted EBITDA	$	40,648	$	11,745	$	2,499	$	(13,158)	$	41,734


Reconciliation of Working Capital	April 2, 2022		January 1, 2022
($ in thousands)
Total current assets	$	777,840	$	869,610
Less total current liabilities	(305,071)		(309,070)
Working capital	$	472,769	$	560,540

Table of Contents

Reconciliation of Net Income (Loss) to Adjusted EBITDA Nine months ended October 2, 2021
by Segment West East Cement Corporate Consolidated
($ in thousands)
Net income (loss) $ 142,340 $ 91,928 $ 65,935 $ (190,312) $ 109,891
Interest (income) expense (7,825) (6,133) (12,439) 98,933 72,536
Income tax expense 2,360 209 — 30,909 33,478
Depreciation, depletion and amortization 74,634 65,032 28,535 3,273 171,474
EBITDA $ 211,509 $ 151,036 $ 82,031 $ (57,197) $ 387,379
Accretion 653 1,274 250 — 2,177
Loss on debt financings — — — 6,016 6,016
Gain on sale of businesses (408) (14,911) — — (15,319)
Non-cash compensation — — — 14,875 14,875
Other (32) 714 — — 682
Adjusted EBITDA $ 211,722 $ 138,113 $ 82,281 $ (36,306) $ 395,810

Reconciliation of Net Income (Loss) to Adjusted EBITDA Three months ended September 26, 2020
by Segment West East Cement Corporate Consolidated
($ in thousands)
Net income (loss) $ 72,871 $ 31,013 $ 27,324 $ (38,439) $ 92,769
Interest (income) expense (1,192) (649) (3,393) 29,857 24,623
Income tax expense (benefit) 937 (193) — (20,357) (19,613)
Depreciation, depletion and amortization 22,973 22,346 11,066 979 57,364
EBITDA $ 95,589 $ 52,517 $ 34,997 $ (27,960) $ 155,143
Accretion 144 457 89 — 690
Loss on debt financings — — — 4,064 4,064
Non-cash compensation — — — 13,322 13,322
Other (263) 3,969 — 377 4,083
Adjusted EBITDA $ 95,470 $ 56,943 $ 35,086 $ (10,197) $ 177,302

Reconciliation of Net Income (Loss) to Adjusted EBITDA Nine months ended September 26, 2020
by Segment West East Cement Corporate Consolidated
($ in thousands)
Net income (loss) $ 130,409 $ 52,152 $ 44,432 $ (122,063) $ 104,930
Interest (income) expense (2,479) (1,651) (9,685) 91,864 78,049
Income tax expense (benefit) 1,524 (358) — (26,499) (25,333)
Depreciation, depletion and amortization 66,707 64,080 28,165 2,960 161,912
EBITDA $ 196,161 $ 114,223 $ 62,912 $ (53,738) $ 319,558
Accretion 375 1,213 260 — 1,848
Loss on debt financings — — — 4,064 4,064
Non-cash compensation — — — 23,119 23,119
Other 345 4,464 — (522) 4,287
Adjusted EBITDA $ 196,881 $ 119,900 $ 63,172 $ (27,077) $ 352,876

Reconciliation of Working Capital October 2, 2021 January 2, 2021
($ in thousands)
Total current assets $ 834,782 $ 893,279
Less total current liabilities (330,909) (322,689)
Working capital $ 503,873 $ 570,590

~~Table of Contents~~


		Three months ended						Nine months ended							Three months ended
Reconciliation of Operating Income to Adjusted Cash Gross Profit		October 2, 2021			September 26, 2020			October 2, 2021			September 26, 2020
Reconciliation of Operating Loss to Adjusted Cash Gross Profit														Reconciliation of Operating Loss to Adjusted Cash Gross Profit		April 2, 2022			April 3, 2021
($ in thousands)	($ in thousands)													($ in thousands)
Operating income		$	125,017		$	100,617		$	195,881		$	158,957
Operating loss														Operating loss		$	(34,295)		$	(25,059)
General and administrative expenses	General and administrative expenses	47,364			50,972			146,454			132,385			General and administrative expenses		51,924			51,642
Depreciation, depletion, amortization and accretion	Depreciation, depletion, amortization and accretion	59,082			58,054			173,651			163,760			Depreciation, depletion, amortization and accretion		51,193			56,336
Gain on sale of property, plant and equipment	Gain on sale of property, plant and equipment	(1,159)			(1,616)			(4,331)			(5,747)			Gain on sale of property, plant and equipment		(1,255)			(1,769)
Adjusted Cash Gross Profit (exclusive of items shown separately)	Adjusted Cash Gross Profit (exclusive of items shown separately)	$	230,304		$	208,027		$	511,655		$	449,355		Adjusted Cash Gross Profit (exclusive of items shown separately)		$	67,567		$	81,150
Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1)	Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1)	34.8		%	32.2		%	30.5		%	28.8		%	Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1)		17.2		%	20.4		%

(1)Adjusted Cash Gross Profit Margin, which we define as Adjusted Cash Gross Profit as a percentage of net revenue.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period.

Please refer to “Critical Accounting Policies and Estimates” described in “Part II. Item 7. Management’s Discussion and Analysis of our Financial Condition and Results of Operations” of our annual report on Form 10-K filed with the SEC on February 24, 2022, from which there have been no material changes.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks arising from transactions that are entered into in the normal course of business. Our operations are highly dependent upon the interest rate-sensitive construction industry as well as the general economic environment. Consequently, these marketplaces could experience lower levels of economic activity in an environment of rising interest rates or escalating costs. For a discussion of quantitative and qualitative disclosures about market risk, please refer to the Annual Report from which our exposure to market risk has not materially changed.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Summit Inc.

Summit Inc. maintains disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), that are designed to ensure that information required to be disclosed in Summit Inc.’s reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Summit Inc.’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Summit Inc.’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of Summit Inc.’s disclosure controls and procedures as of ~~October~~April 2, ~~2021.~~2022. Based upon that evaluation, Summit Inc.’s Chief Executive Officer and Chief Financial Officer concluded that, as of ~~October~~April 2, ~~2021,~~2022, Summit Inc.’s disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Summit LLC

Summit LLC maintains disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in Summit LLC’s reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Summit LLC’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any

Table of Contents

controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Summit LLC’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of Summit LLC’s disclosure controls and procedures as of ~~October~~April 2, ~~2021.~~2022. Based upon that evaluation, Summit LLC’s Chief Executive Officer and Chief Financial Officer concluded that, as of ~~October~~April 2, ~~2021,~~2022, Summit LLC’s disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

Summit Inc.

~~Table of Contents~~

There was no change in Summit Inc.’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during its last fiscal quarter that has materially affected, or is reasonably likely to materially affect, Summit Inc.’s internal control over financial reporting.

Summit LLC

There was no change in Summit LLC’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during its last fiscal quarter that has materially affected, or is reasonably likely to materially affect, Summit LLC’s internal control over financial reporting.

4035

Table of Contents

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth under Note 12, "Commitments and Contingencies," to Summit Inc.’s unaudited consolidated financial statements is incorporated herein by reference.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in the section entitled “Risk Factors” in the Annual Report, which could materially affect the Company’s business, financial condition, operating results or liquidity or future results. The risks described in the Annual Report are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that it currently deems to be immaterial also may materially adversely affect its results of operations, financial condition or liquidity. There have been no material changes to the risk factors disclosed in the Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~Purchases of our equity securities during the quarter ended April 2, 2022 were as follows:


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (1)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (2)
($ in thousands, except per share amounts)
February 27, 2022 - April 2, 2022	1,506,878	$	31.53	1,506,878	$	202,488
Total	1,506,878	$	31.53	1,506,878	$	202,488

(1)On March 2, 2022, we announced that our Board of Directors authorized the repurchase of up to $250.0 million of our Class A common stock. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

(2)The remaining $202.5 million in the table represents the amount available to repurchase shares under our share repurchase program as of April 2, 2022.

All share repurchases were made using available cash.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this report.

ITEM 5. OTHER INFORMATION

None.

4136

Table of Contents

ITEM 6. EXHIBITS


3.1			Restated Certificate of Incorporation of Summit Materials, Inc. (incorporated by reference to Exhibit 3.1 to Summit Materials, Inc.’s Current Report on Form 8-K filed on May 19, 2021).
3.2			Second Amended and Restated Bylaws of Summit Materials, Inc. (incorporated by reference to Exhibit 3.3 to Summit Materials, Inc.’s Current Report on Form 8-K filed on May 19, 2021).
3.3			Certificate of Formation of Summit Materials, LLC, as amended (incorporated by reference to Exhibit 3.1 to Summit Materials, LLC’s Registration Statement on Form S-4, filed March 27, 2013 (File No. 333-187556)).
3.4			Second Amended and Restated Limited Liability Company Agreement of Summit Materials, LLC (incorporated by reference to Exhibit 3.4 to the Registrants’ Quarterly Report on Form 10-Q filed on October 30, 2019 (File No. 001-36783))
31.1*			Summit Materials, Inc.’s Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*			Summit Materials, Inc.’s Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3*			Summit Materials, LLC’s Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4*			Summit Materials, LLC’s Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**			Summit Materials, Inc.’s Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**			Summit Materials, Inc.’s Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.3**			Summit Materials, LLC’s Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.4**			Summit Materials, LLC’s Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95.1*			Mine Safety Disclosures
99.1*			Summit Materials, LLC’s Unaudited Consolidated Financial Statements and Notes to Unaudited Consolidated Financial Statements.
101.INS*			Inline XBRL Instance Document - the instance document does not appear in the interactive data file because XBRL tags are embedded within the inline XBRL document
101.SCH*			Inline XBRL Taxonomy Extension Schema Document
101.CAL*			Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*			Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*			Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*			Inline XBRL Taxonomy Extension Presentation Linkbase Document
104.1*			Cover Page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~October~~April 2, ~~2021,~~2022, formatted in Inline XBRL (and contained in Exhibit 101).

* Filed herewith

** Furnished herewith

† Indicates management contract or compensatory plan or arrangement

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them other than for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

4237

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.



	SUMMIT MATERIALS, INC.
	SUMMIT MATERIALS, LLC

Date: ~~November 4, 2021~~May 5, 2022	By:	/s/ Anne P. Noonan
		Anne P. Noonan
		Chief Executive Officer
		(Principal Executive Officer)

Date: ~~November 4, 2021~~May 5, 2022	By:	/s/ Brian J. Harris
		Brian J. Harris
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

4338


	Nine months ended	Year ended
	October 2, 2021	January 2, 2021
West	—	2
East	2	1


Reconciliation of Net Income (Loss) to Adjusted EBITDA	Nine months ended October 2, 2021
by Segment	West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income (loss)	$	142,340	$	91,928	$	65,935	$	(190,312)	$	109,891
Interest (income) expense	(7,825)		(6,133)		(12,439)		98,933		72,536
Income tax expense	2,360		209		—		30,909		33,478
Depreciation, depletion and amortization	74,634		65,032		28,535		3,273		171,474
EBITDA	$	211,509	$	151,036	$	82,031	$	(57,197)	$	387,379
Accretion	653		1,274		250		—		2,177
Loss on debt financings	—		—		—		6,016		6,016

Gain on sale of businesses	(408)		(14,911)		—		—		(15,319)
Non-cash compensation	—		—		—		14,875		14,875
Other	(32)		714		—		—		682
Adjusted EBITDA	$	211,722	$	138,113	$	82,281	$	(36,306)	$	395,810


Reconciliation of Net Income (Loss) to Adjusted EBITDA	Three months ended September 26, 2020
by Segment	West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income (loss)	$	72,871	$	31,013	$	27,324	$	(38,439)	$	92,769
Interest (income) expense	(1,192)		(649)		(3,393)		29,857		24,623
Income tax expense (benefit)	937		(193)		—		(20,357)		(19,613)
Depreciation, depletion and amortization	22,973		22,346		11,066		979		57,364
EBITDA	$	95,589	$	52,517	$	34,997	$	(27,960)	$	155,143
Accretion	144		457		89		—		690
Loss on debt financings	—		—		—		4,064		4,064


Non-cash compensation	—		—		—		13,322		13,322
Other	(263)		3,969		—		377		4,083
Adjusted EBITDA	$	95,470	$	56,943	$	35,086	$	(10,197)	$	177,302


Reconciliation of Net Income (Loss) to Adjusted EBITDA	Nine months ended September 26, 2020
by Segment	West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income (loss)	$	130,409	$	52,152	$	44,432	$	(122,063)	$	104,930
Interest (income) expense	(2,479)		(1,651)		(9,685)		91,864		78,049
Income tax expense (benefit)	1,524		(358)		—		(26,499)		(25,333)
Depreciation, depletion and amortization	66,707		64,080		28,165		2,960		161,912
EBITDA	$	196,161	$	114,223	$	62,912	$	(53,738)	$	319,558
Accretion	375		1,213		260		—		1,848
Loss on debt financings	—		—		—		4,064		4,064


Non-cash compensation	—		—		—		23,119		23,119
Other	345		4,464		—		(522)		4,287
Adjusted EBITDA	$	196,881	$	119,900	$	63,172	$	(27,077)	$	352,876