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 April ~~2, 2022~~1, 2023


☐			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~~1801 California Street, ~~3rd Floor~~Suite 3500						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 May ~~2, 2022,~~1, 2023, 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 ~~118,099,723~~118,829,196 and 99, respectively.

As of May ~~2, 2022,~~1, 2023, 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 April ~~2, 2022,~~1, 2023, its sole material asset was a 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 months ended April ~~2, 2022~~1, 2023 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 1,~~December 31, 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;~~operate, including residential;

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

•risks related to weather and seasonality;

•risks associated with our capital-intensive business;

•competition within our local markets;

•our ability to execute on our acquisition strategy and portfolio optimization strategy, successfully integrate acquisitions with our existing operations and retain key employees of acquired businesses;

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

•the impact of rising interest rates, and diminished liquidity and credit availability in the ~~coronavirus (“COVID-19”) pandemic, and responses to it, including vaccine mandates, or any similar crisis, on our business;~~market broadly;

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

•our reliance on private investment in infrastructure, which may be adversely affected by periods of economic stagnation and recession;

•environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use;

•~~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 current level of indebtedness, including our exposure to variable interest rate risk;

•our dependence on senior management ~~team,~~and other key personnel, 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;

•costs associated with pending and future litigation;

•interruptions in our information technology systems and infrastructure, including cybersecurity and data leakage risks; ~~and~~

•potential labor disputes, strikes, other forms of work stoppage or other union activities; and

•the impact of the COVID-19 pandemic, and responses to it, including vaccine mandates, or any similar crisis, on our 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;

•“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 April ~~2, 2022.~~1, 2023. 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 April ~~2, 2022~~1, 2023 (unaudited) and ~~January 1,~~December 31, 2022	1

	Unaudited Consolidated Statements of Operations for the three months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021~~2, 2022	2

	Unaudited Consolidated Statements of Comprehensive Income for the three months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021~~2, 2022	3

	Unaudited Consolidated Statements of Cash Flows for the three months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021~~2, 2022	4

	Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the three months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021~~2, 2022	5

	Notes to Unaudited Consolidated Financial Statements	6

	Financial Statements for Summit Materials, LLC	20

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	34

PART II — Other Information

Item 1.	Legal Proceedings	3635

Item 1A.	Risk Factors	3635

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3635

Item 3.	Defaults Upon Senior Securities	3635

Item 4.	Mine Safety Disclosures	3635

Item 5.	Other Information	3635

Item 6.	Exhibits	3736

SIGNATURES		38

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)


		April 2, 2022		January 1, 2022			April 1, 2023		December 31, 2022
		(unaudited)		(audited)			(unaudited)		(audited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	287,392	$	380,961	Cash and cash equivalents	$	379,457	$	520,451
Accounts receivable, net	Accounts receivable, net	239,839		287,226		Accounts receivable, net	236,569		256,669
Costs and estimated earnings in excess of billings	Costs and estimated earnings in excess of billings	12,723		7,600		Costs and estimated earnings in excess of billings	14,387		6,510
Inventories	Inventories	187,009		180,760		Inventories	234,564		212,491
Other current assets	Other current assets	14,305		11,827		Other current assets	24,608		20,787
Current assets held for sale	Current assets held for sale	36,572		1,236		Current assets held for sale	1,305		1,468
Total current assets	Total current assets	777,840		869,610		Total current assets	890,890		1,018,376
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
Property, plant and equipment, less accumulated depreciation, depletion and amortization (April 1, 2023 - $1,311,037 and December 31, 2022 - $1,267,557)						Property, plant and equipment, less accumulated depreciation, depletion and amortization (April 1, 2023 - $1,311,037 and December 31, 2022 - $1,267,557)	1,867,412		1,813,702
Goodwill	Goodwill	1,146,276		1,163,750		Goodwill	1,159,525		1,132,546
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)		211,372		204,566
Intangible assets, less accumulated amortization (April 1, 2023 - $16,428 and December 31, 2022 - $15,503)						Intangible assets, less accumulated amortization (April 1, 2023 - $16,428 and December 31, 2022 - $15,503)	70,485		71,384
Deferred tax assets, less valuation allowance (April 1, 2023 - $1,113 and December 31, 2022 - $1,113)						Deferred tax assets, less valuation allowance (April 1, 2023 - $1,113 and December 31, 2022 - $1,113)	144,467		136,986
Operating lease right-of-use assets	Operating lease right-of-use assets	28,766		30,150		Operating lease right-of-use assets	36,638		37,889
Other assets	Other assets	43,200		58,745		Other assets	45,523		44,809
Noncurrent assets held for sale		102,182		—

Total assets	Total assets	$	4,143,245	$	4,239,125	Total assets	$	4,214,940	$	4,255,692
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	$	5,096	$	5,096
Current portion of acquisition-related liabilities	Current portion of acquisition-related liabilities	13,078		13,110		Current portion of acquisition-related liabilities	7,243		13,718
Accounts payable	Accounts payable	146,292		128,232		Accounts payable	138,961		104,031
Accrued expenses	Accrued expenses	113,569		147,476		Accrued expenses	97,478		119,967
Current operating lease liabilities	Current operating lease liabilities	5,934		6,497		Current operating lease liabilities	7,515		7,296
Billings in excess of costs and estimated earnings	Billings in excess of costs and estimated earnings	6,734		7,401		Billings in excess of costs and estimated earnings	4,233		5,739
Current liabilities held for sale		13,110		—

Total current liabilities	Total current liabilities	305,071		309,070		Total current liabilities	260,526		255,847
Long-term debt	Long-term debt	1,590,050		1,591,019		Long-term debt	1,487,783		1,488,569
Acquisition-related liabilities	Acquisition-related liabilities	22,928		33,369		Acquisition-related liabilities	22,939		29,051
Tax receivable agreement liability	Tax receivable agreement liability	326,548		326,548		Tax receivable agreement liability	322,624		327,812
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	28,017		28,880		Noncurrent operating lease liabilities	34,315		35,737
Other noncurrent liabilities	Other noncurrent liabilities	121,103		127,027		Other noncurrent liabilities	106,807		106,686
Noncurrent liabilities held for sale		3,031		—

Total liabilities	Total liabilities	2,396,748		2,415,913		Total liabilities	2,234,994		2,243,702
Commitments and contingencies (see note 12)	Commitments and contingencies (see note 12)	0		0		Commitments and contingencies (see note 12)
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
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 A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 118,818,671 and 118,408,655 shares issued and outstanding as of April 1, 2023 and December 31, 2022, respectively						Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 118,818,671 and 118,408,655 shares issued and outstanding as of April 1, 2023 and December 31, 2022, respectively	1,189		1,185
Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of April 1, 2023 and December 31, 2022						Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of April 1, 2023 and December 31, 2022	—		—
Additional paid-in capital	Additional paid-in capital	1,330,548		1,326,340		Additional paid-in capital	1,403,186		1,404,122
Accumulated earnings	Accumulated earnings	397,170		478,956		Accumulated earnings	560,091		590,895
Accumulated other comprehensive income	Accumulated other comprehensive income	8,389		7,083		Accumulated other comprehensive income	3,245		3,084
Stockholders’ equity	Stockholders’ equity	1,737,288		1,813,567		Stockholders’ equity	1,967,711		1,999,286
Noncontrolling interest in Summit Holdings	Noncontrolling interest in Summit Holdings	9,209		9,645		Noncontrolling interest in Summit Holdings	12,235		12,704
Total stockholders’ equity	Total stockholders’ equity	1,746,497		1,823,212		Total stockholders’ equity	1,979,946		2,011,990
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	4,143,245	$	4,239,125	Total liabilities and stockholders’ equity	$	4,214,940	$	4,255,692

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						Three months ended
			April 2, 2022		April 3, 2021				April 1, 2023		April 2, 2022
Revenue:	Revenue:						Revenue:
Product	Product		$	355,669	$	354,234	Product		$	372,172	$	355,669
Service	Service		36,826		44,247		Service		35,098		36,826
Net revenue	Net revenue		392,495		398,481		Net revenue		407,270		392,495
Delivery and subcontract revenue	Delivery and subcontract revenue		28,452		29,363		Delivery and subcontract revenue		28,118		28,452
Total revenue	Total revenue		420,947		427,844		Total revenue		435,388		420,947
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		290,345		277,134		Product		295,881		290,345
Service	Service		34,583		40,197		Service		30,038		34,583
Net cost of revenue	Net cost of revenue		324,928		317,331		Net cost of revenue		325,919		324,928
Delivery and subcontract cost	Delivery and subcontract cost		28,452		29,363		Delivery and subcontract cost		28,118		28,452
Total cost of revenue	Total cost of revenue		353,380		346,694		Total cost of revenue		354,037		353,380
General and administrative expenses	General and administrative expenses		51,924		51,642		General and administrative expenses		46,362		51,924
Depreciation, depletion, amortization and accretion	Depreciation, depletion, amortization and accretion		51,193		56,336		Depreciation, depletion, amortization and accretion		50,894		51,193
Gain on sale of property, plant and equipment	Gain on sale of property, plant and equipment		(1,255)		(1,769)		Gain on sale of property, plant and equipment		(430)		(1,255)
Operating loss	Operating loss		(34,295)		(25,059)		Operating loss		(15,475)		(34,295)
Interest expense	Interest expense		20,149		24,186		Interest expense		27,420		20,149

Loss on debt financings							Loss on debt financings		493		—

Gain on sale of businesses	Gain on sale of businesses		(14,205)		(15,668)		Gain on sale of businesses		—		(14,205)
Other income, net	Other income, net		(696)		(4,889)		Other income, net		(5,710)		(696)
Loss from operations before taxes	Loss from operations before taxes		(39,543)		(28,688)		Loss from operations before taxes		(37,678)		(39,543)
Income tax benefit	Income tax benefit		(4,743)		(5,443)		Income tax benefit		(6,466)		(4,743)
Net loss	Net loss		(34,800)		(23,245)		Net loss		(31,212)		(34,800)

Net loss attributable to Summit Holdings	Net loss attributable to Summit Holdings		(508)		(728)		Net loss attributable to Summit Holdings		(408)		(508)
Net loss attributable to Summit Inc.	Net loss attributable to Summit Inc.		$	(34,292)	$	(22,517)	Net loss attributable to Summit Inc.		$	(30,804)	$	(34,292)
Loss per share of Class A common stock:	Loss per share of Class A common stock:						Loss per share of Class A common stock:
Basic	Basic		$	(0.29)	$	(0.19)	Basic		$	(0.26)	$	(0.28)
Diluted	Diluted		$	(0.29)	$	(0.20)	Diluted		$	(0.26)	$	(0.28)
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		118,937,466		115,664,725		Basic		118,679,656		120,916,680
Diluted	Diluted		118,937,466		115,411,204		Diluted		118,679,656		120,916,680

See notes to unaudited consolidated financial statements.

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SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Comprehensive Income

(In thousands)


		Three months ended						Three months ended
			April 2, 2022		April 3, 2021				April 1, 2023		April 2, 2022
Net loss	Net loss		$	(34,800)	$	(23,245)	Net loss		$	(31,212)	$	(34,800)
Other comprehensive income (loss):	Other comprehensive income (loss):						Other comprehensive income (loss):
Foreign currency translation adjustment	Foreign currency translation adjustment		1,744		2,126		Foreign currency translation adjustment		203		1,744

Less tax effect of other comprehensive loss items	Less tax effect of other comprehensive loss items		(419)		(446)		Less tax effect of other comprehensive loss items		(39)		(419)
Other comprehensive income	Other comprehensive income		1,325		1,680		Other comprehensive income		164		1,325
Comprehensive loss	Comprehensive loss		(33,475)		(21,565)		Comprehensive loss		(31,048)		(33,475)
Less comprehensive loss attributable to Summit Holdings	Less comprehensive loss attributable to Summit Holdings		(489)		(683)		Less comprehensive loss attributable to Summit Holdings		(405)		(489)
Comprehensive loss attributable to Summit Inc.	Comprehensive loss attributable to Summit Inc.		$	(32,986)	$	(20,882)	Comprehensive loss attributable to Summit Inc.		$	(30,643)	$	(32,986)

See notes to unaudited consolidated financial statements.

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SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

(In thousands)


		Three months ended					Three months ended
		April 2, 2022		April 3, 2021			April 1, 2023		April 2, 2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net loss	Net loss	$	(34,800)	$	(23,245)	Net loss	$	(31,212)	$	(34,800)
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	54,838		59,107		Depreciation, depletion, amortization and accretion	53,927		54,838
Share-based compensation expense	Share-based compensation expense	5,422		5,363		Share-based compensation expense	4,708		5,422
Net gain on asset and business disposals	Net gain on asset and business disposals	(15,660)		(15,964)		Net gain on asset and business disposals	(868)		(15,660)

Non-cash loss on debt financings						Non-cash loss on debt financings	161		—
Change in deferred tax asset, net	Change in deferred tax asset, net	(7,770)		(10,145)		Change in deferred tax asset, net	(7,522)		(7,770)
Other	Other	(221)		483		Other	26		(221)
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	35,836		4,946		Accounts receivable, net	20,414		35,836
Inventories	Inventories	(36,752)		(15,412)		Inventories	(20,960)		(36,752)
Costs and estimated earnings in excess of billings	Costs and estimated earnings in excess of billings	(6,449)		(8,442)		Costs and estimated earnings in excess of billings	(7,868)		(6,449)
Other current assets	Other current assets	(1,891)		(9,209)		Other current assets	(3,748)		(1,891)
Other assets	Other assets	1,183		2,504		Other assets	2,239		1,183
(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	16,744		14,518		Accounts payable	20,987		16,744
Accrued expenses	Accrued expenses	(25,946)		(24,130)		Accrued expenses	(27,968)		(25,946)
Billings in excess of costs and estimated earnings	Billings in excess of costs and estimated earnings	317		(2,578)		Billings in excess of costs and estimated earnings	(1,507)		317
Tax receivable agreement liability	Tax receivable agreement liability	—		4,152		Tax receivable agreement liability	(531)		—
Other liabilities	Other liabilities	(1,564)		(3,266)		Other liabilities	57		(1,564)
Net cash used in operating activities		(16,713)		(21,318)
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	335		(16,713)
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:

Acquisitions, net of cash acquired						Acquisitions, net of cash acquired	(55,477)		—
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(57,774)		(69,757)		Purchases of property, plant and equipment	(63,584)		(57,774)
Proceeds from the sale of property, plant and equipment	Proceeds from the sale of property, plant and equipment	1,439		2,663		Proceeds from the sale of property, plant and equipment	1,777		1,439
Proceeds from sale of businesses	Proceeds from sale of businesses	47,821		33,077		Proceeds from sale of businesses	—		47,821
Other	Other	(857)		(483)		Other	(1,045)		(857)
Net cash used in investing activities	Net cash used in investing activities	(9,371)		(34,500)		Net cash used in investing activities	(118,329)		(9,371)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Debt issuance costs						Debt issuance costs	(1,566)		—
Payments on debt	Payments on debt	(7,603)		(10,170)		Payments on debt	(4,414)		(7,603)
Payments on acquisition-related liabilities	Payments on acquisition-related liabilities	(11,397)		(8,096)		Payments on acquisition-related liabilities	(11,374)		(11,397)

Repurchases of common stock	Repurchases of common stock	(47,509)		—		Repurchases of common stock	—		(47,509)
Proceeds from stock option exercises	Proceeds from stock option exercises	27		15,920		Proceeds from stock option exercises	15		27
Other	Other	(1,180)		(416)		Other	(5,719)		(1,180)
Net cash used in financing activities	Net cash used in financing activities	(67,662)		(2,762)		Net cash used in financing activities	(23,058)		(67,662)
Impact of foreign currency on cash	Impact of foreign currency on cash	177		140		Impact of foreign currency on cash	58		177
Net decrease in cash	Net decrease in cash	(93,569)		(58,440)		Net decrease in cash	(140,994)		(93,569)
Cash and cash equivalents—beginning of period	Cash and cash equivalents—beginning of period	380,961		418,181		Cash and cash equivalents—beginning of period	520,451		380,961
Cash and cash equivalents—end of period	Cash and cash equivalents—end of period	$	287,392	$	359,741	Cash and cash equivalents—end of period	$	379,457	$	287,392

See notes to unaudited consolidated financial statements.

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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		Shares	Dollars		Shares	Dollars		Capital		Summit Holdings		Equity			Earnings		income		Shares	Dollars		Shares	Dollars		Capital		Summit Holdings		Equity
Balance - January 1, 2022		$	478,956	$	7,083	118,705,108	$	1,188	99	$	—	$	1,326,340	$	9,645	$	1,823,212
Balance - December 31, 2022																		Balance - December 31, 2022	$	590,895	$	3,084	118,408,655	$	1,185	99	$	—	$	1,404,122	$	12,704	$	2,011,990

Net loss	Net loss	(34,292)		—		—	—		—	—		—		(508)		(34,800)		Net loss	(30,804)		—		—	—		—	—		—		(408)		(31,212)
LP Unit exchanges																		LP Unit exchanges	—		—		2,000	—		—	—		21		(21)		—
Other comprehensive income, net of tax																		Other comprehensive income, net of tax	—		161		—	—		—	—		—		3		164
Stock option exercises																		Stock option exercises	—		—		902	—		—	—		15		—		15
Share-based compensation																		Share-based compensation	—		—		—	—		—	—		4,708		—		4,708

Shares redeemed to settle taxes and other																		Shares redeemed to settle taxes and other	—		—		407,114	4		—	—		(5,680)		(43)		(5,719)
Balance - April 1, 2023																		Balance - April 1, 2023	$	560,091	$	3,245	118,818,671	$	1,189	99	$	—	$	1,403,186	$	12,235	$	1,979,946

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		Other comprehensive income, net of tax	—		1,306		—	—		—	—		—		19		1,325
Stock option exercises	Stock option exercises	—		—		1,589	—		—	—		27		—		27		Stock option exercises	—		—		1,589	—		—	—		27		—		27
Share-based compensation	Share-based compensation	—		—		—	—		—	—		5,422		—		5,422		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)		Repurchases of common stock	(47,494)		—		(1,506,878)	(15)		—	—		(121)		121		(47,509)
Shares redeemed to settle taxes and other		—		—		842,029	8		—	—		(1,120)		(68)		(1,180)
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		$	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	Shares redeemed to settle taxes and other	—		—		678,605	6		—	—		(1,432)		—		(1,426)		Shares redeemed to settle taxes and other	—		—		842,029	8		—	—		(1,120)		(68)		(1,180)
Balance — April 3, 2021		$	304,255	$	6,838	116,644,332	$	1,167	99	$	—	$	1,289,267	$	13,033	$	1,614,560
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

See notes to unaudited consolidated financial statements.

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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, 2two 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 3three 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 1,~~December 31, 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 April ~~2, 2022,~~1, 2023, the results of operations for the three months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021~~2, 2022 and cash flows for the three months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021.~~2, 2022.

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

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those resulting from continuing changes in the economic environment, are reflected in the Company’s consolidated financial statements when the change in estimate occurs.

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Business and Credit Concentrations—The Company’s operations are conducted primarily across 2120 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 months ended April ~~2, 2022~~1, 2023 or April ~~3, 2021.~~2, 2022.

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 plastics components, and from the provision of services, which are primarily paving and related ~~services.~~services, but also include landfill operations, the receipt and disposal of waste that is converted to fuel for use in our cement plants.

Products: Revenue for product sales is recognized when ~~evidence of an arrangement exists and when control passes,~~the performance obligation is satisfied, 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~~a method similar to 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~~Estimating costs to be incurred for revenue recognition 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 $1.2 million of other current assets to current assets held for sale for the year ended January 1, 2022 to be consistent with the current year presentation.~~

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:


	Three months ended	Year ended
	April 1, 2023	December 31, 2022
West	1	—
East	—	2

The purchase price allocation, primarily the valuation of property, plant and equipment for the acquisitions completed during the three months ended April 1, 2023, as well as the acquisitions completed during 2022 that occurred after April 2,

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2022, 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:


	Three months ended		Year ended
	April 1, 2023		December 31, 2022
Financial assets	$	804	$	297
Inventories	1,107		161
Property, plant and equipment	27,170		30,041

Other assets	91		1,116
Financial liabilities	(59)		(1,120)
Other long-term liabilities	(138)		(1,589)
Net assets acquired	28,975		28,906
Goodwill	26,910		—
Purchase price	55,885		28,906
Acquisition-related liabilities	—		(6,176)
Other	(408)		—
Net cash paid for acquisitions	$	55,477	$	22,730

Changes in the carrying amount of goodwill, by reportable segment, from ~~January 1,~~December 31, 2022 to April ~~2, 2022~~1, 2023 are summarized as follows:

West East Cement
Total
Balance—January 1, 2022 $ 570,509 $ 388,585 $ 204,656 $ 1,163,750
Dispositions (1) — (12,036) — (12,036)
Foreign currency translation adjustments 621 — — 621
Goodwill allocated to assets held for sale — (6,059) — (6,059)
Balance—April 2, 2022 $ 571,130 $ 370,490 $ 204,656 $ 1,146,276


	West		East		Cement		Total
Balance—December 31, 2022	$	566,389	$	361,501	$	204,656	$	1,132,546
Acquisitions (1)	26,910		—		—		26,910

Foreign currency translation adjustments	69		—		—		69

Balance—April 1, 2023	$	593,368	$	361,501	$	204,656	$	1,159,525

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

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2023 acquisitions.

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, 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:


		April 2, 2022						January 1, 2022							April 1, 2023						December 31, 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	$	(2,987)	$	30,684	$	33,671	$	(2,467)	$	31,204	Operating permits	$	38,677	$	(4,498)	$	34,179	$	38,677	$	(4,109)	$	34,568
Mineral leases	Mineral leases	15,463		(6,105)		9,358		19,927		(8,922)		11,005		Mineral leases	17,766		(7,005)		10,761		18,091		(7,056)		11,035
Reserve rights	Reserve rights	25,586		(3,535)		22,051		25,586		(3,329)		22,257		Reserve rights	25,586		(4,402)		21,184		25,242		(3,872)		21,370

Other	Other	5,286		(364)		4,922		5,481		(551)		4,930		Other	4,884		(523)		4,361		4,877		(466)		4,411
Total intangible assets	Total intangible assets	$	80,006	$	(12,991)	$	67,015	$	84,665	$	(15,269)	$	69,396	Total intangible assets	$	86,913	$	(16,428)	$	70,485	$	86,887	$	(15,503)	$	71,384

Amortization expense totaled $0.9 million and ~~$1.0~~$0.9 million for the three months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021,~~2, 2022, respectively. The estimated amortization expense for the intangible assets for each of the five years subsequent to April ~~2, 2022~~1, 2023 is ~~as follows:~~

2022 (nine months) $ 2,830
2023 3,780
2024 3,754
2025 3,710
2026 3,661
2027 3,649
Thereafter 45,631
Total $ 67,015

In the first quarter of 2022, as part of the Company's strategy to rationalize assets, the Company sold 1 business in the East segment, resulting in cash proceeds of $47.8 million and a total gain on disposition of $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:

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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 $ —


2023 (nine months)	$	2,984
2024	3,987
2025	3,945
2026	3,897
2027	3,884
2028	3,887
Thereafter	47,901
Total	$	70,485

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 months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021~~2, 2022 is as follows:


		Three months ended						Three months ended
			April 2, 2022		April 3, 2021				April 1, 2023		April 2, 2022
Revenue by product*:	Revenue by product*:						Revenue by product*:
Aggregates	Aggregates		$	123,393	$	117,388	Aggregates		$	143,653	$	123,393
Cement	Cement		42,554		38,139		Cement		49,013		42,554
Ready-mix concrete	Ready-mix concrete		157,563		158,233		Ready-mix concrete		138,778		157,563
Asphalt	Asphalt		17,138		28,375		Asphalt		26,635		17,138
Paving and related services	Paving and related services		30,610		43,215		Paving and related services		27,184		30,610
Other	Other		49,689		42,494		Other		50,125		49,689
Total revenue	Total revenue		$	420,947	$	427,844	Total revenue		$	435,388	$	420,947

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

Accounts receivable, net consisted of the following as of April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022:

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		April 2, 2022		January 1, 2022			April 1, 2023		December 31, 2022
Trade accounts receivable	Trade accounts receivable	$	217,435	$	230,714	Trade accounts receivable	$	222,479	$	215,766
Construction contract receivables	Construction contract receivables	16,243		47,054		Construction contract receivables	12,243		37,067
Retention receivables	Retention receivables	10,354		13,094		Retention receivables	9,428		11,048
Receivables from related parties		—		292

Accounts receivable	Accounts receivable	244,032		291,154		Accounts receivable	244,150		263,881
Less: Allowance for doubtful accounts	Less: Allowance for doubtful accounts	(4,193)		(3,928)		Less: Allowance for doubtful accounts	(7,581)		(7,212)
Accounts receivable, net	Accounts receivable, net	$	239,839	$	287,226	Accounts receivable, net	$	236,569	$	256,669

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 April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022:


		April 2, 2022		January 1, 2022			April 1, 2023		December 31, 2022
Aggregate stockpiles	Aggregate stockpiles	$	123,981	$	130,640	Aggregate stockpiles	$	152,276	$	148,347
Finished goods	Finished goods	37,882		22,690		Finished goods	51,884		33,622
Work in process	Work in process	6,974		8,277		Work in process	7,754		8,191
Raw materials	Raw materials	18,172		19,153		Raw materials	22,650		22,331
Total	Total	$	187,009	$	180,760	Total	$	234,564	$	212,491

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5.ACCRUED EXPENSES

Accrued expenses consisted of the following as of April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022:


		April 2, 2022		January 1, 2022			April 1, 2023		December 31, 2022
Interest	Interest	$	9,063	$	22,762	Interest	$	11,064	$	24,625
Payroll and benefits	Payroll and benefits	24,556		38,894		Payroll and benefits	20,447		34,485
Finance lease obligations	Finance lease obligations	14,234		17,624		Finance lease obligations	4,224		6,959
Insurance	Insurance	20,993		20,480		Insurance	19,713		18,127
Non-income taxes		22,737		19,409
Current portion of TRA liability and non-income taxes						Current portion of TRA liability and non-income taxes	9,536		4,360
Deferred asset purchase payments	Deferred asset purchase payments	3,515		4,912		Deferred asset purchase payments	5,287		5,131
Professional fees	Professional fees	1,690		1,524		Professional fees	2,053		924
Other (1)	Other (1)	16,781		21,871		Other (1)	25,154		25,356
Total	Total	$	113,569	$	147,476	Total	$	97,478	$	119,967

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

6.DEBT

Debt consisted of the following as of April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022:


		April 2, 2022		January 1, 2022			April 1, 2023		December 31, 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
Term Loan, due 2027:						Term Loan, due 2027:
$508.3 million and $509.6 million, net of $4.8 million and $5.0 million discount at April 1, 2023 and December 31, 2022, respectively						$508.3 million and $509.6 million, net of $4.8 million and $5.0 million discount at April 1, 2023 and December 31, 2022, respectively	$	503,530	$	504,549
61⁄2% Senior Notes, due 2027	61⁄2% Senior Notes, due 2027	300,000		300,000		61⁄2% Senior Notes, due 2027	300,000		300,000
51⁄4% Senior Notes, due 2029	51⁄4% Senior Notes, due 2029	700,000		700,000		51⁄4% Senior Notes, due 2029	700,000		700,000
Total	Total	1,607,767		1,609,298		Total	1,503,530		1,504,549
Current portion of long-term debt	Current portion of long-term debt	6,354		6,354		Current portion of long-term debt	5,096		5,096
Long-term debt	Long-term debt	$	1,601,413	$	1,602,944	Long-term debt	$	1,498,434	$	1,499,453

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The contractual payments of long-term debt, including current maturities, for the five years subsequent to April ~~2, 2022,~~1, 2023, are as follows:


2022 (nine months)		$	4,765
2023		6,353
2023 (nine months)				2023 (nine months)	$	3,822
2024	2024	597,254		2024	3,822
2025	2025	—		2025	6,369
2026	2026	—		2026	5,096
2027	2027	300,000		2027	789,177
2028				2028	—
Thereafter	Thereafter	700,000		Thereafter	700,000
Total	Total	1,608,372		Total	1,508,286
Less: Original issue net discount	Less: Original issue net discount	(605)		Less: Original issue net discount	(4,756)
Less: Capitalized loan costs	Less: Capitalized loan costs	(11,363)		Less: Capitalized loan costs	(10,651)
Total debt	Total debt	$	1,596,404	Total debt	$	1,492,879

Senior Notes— On August 11, 2020, Summit LLC and Summit Finance (together, 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~~"2029 Notes Indenture"). The ~~2020~~2029 Notes 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~~2029 Notes 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.

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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~~2029 Notes 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 April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 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~~$508.3 million and revolving credit commitments in an aggregate amount of ~~$345.0~~$395.0 million (the “Senior Secured Credit Facilities”). Under the Senior Secured Credit Facilities, required principal repayments of 0.25% of the refinanced aggregate amount of term debt are due on the last business day of each March, June, September and December commencing with the March ~~2018~~2023 payment. The ~~unpaid principal balance~~interest rate on the term loan is ~~due in full~~a variable rate, it was 8.49% as of April 1, 2023. In 2022, the Company repaid $95.6 million of its term loan under provisions related to divestitures of businesses.

On December 14, 2022, Summit Materials, LLC entered into Amendment No. 5 to the credit agreement governing the Senior Secured Credit Facilities (the “Credit Agreement”), which among other things, (a) refinanced the existing $509.6 million of existing term loans with new term loans under the Term Loan Facility bearing interest, at Summit LLC’s option, based on either the base rate or Term Secured Overnight Financing Rate ("SOFR") rate and an applicable margin of (i) 2.00% per annum with respect to base rate borrowings and a floor of 1.00% per annum or (ii) 3.00% per annum with respect to Term SOFR borrowings, with a SOFR adjustment of 0.10% per annum and a floor of zero, and (b) extended the maturity date ~~which is November 21, 2024.~~to December 14, 2027.

On January 10, 2023, Summit Materials, LLC entered into Amendment No. 6 to the Credit Agreement, which among other things, increased the maximum amount available to $395.0 million and extended the maturity date to January 10, 2028. The revolving credit ~~facility~~agreement bears interest per annum equal to ~~at Summit LLC’s option, either (i)~~ a ~~base rate determined by reference to the highest~~Term SOFR Rate with a SOFR adjustment of ~~(a) the federal funds rate plus 0.50%, (b) the prime rate~~0.10% per annum and a floor 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.zero.

There were no outstanding borrowings under the revolving credit facility as of April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022, with borrowing capacity of ~~$324.6~~$373.9 million remaining as of April ~~2, 2022,~~1, 2023, which is net of ~~$20.4~~$21.1 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 April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022, Summit LLC was in compliance with all financial covenants.

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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.

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The following table presents the activity for the deferred financing fees for the three months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021:~~2, 2022:


	Deferred financing fees
Balance—December 31, 2022	$	11,489
Loan origination fees	1,566
Amortization	(616)
Write off of deferred financing fees	(160)
Balance—April 1, 2023	$	12,279


Balance—January 1, 2022	$	13,049

Amortization	(692)

Balance—April 2, 2022	$	12,357


~~Balance—January 2, 2021~~	$	~~18,367~~

~~Amortization~~	~~(836)~~

~~Balance—April 3, 2021~~	$	~~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, which was amended on November 30, 2020, 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%~~0.20% and (iii) ~~$0.3~~$1.5 million CAD revolving credit commitment to provide guarantees on behalf of that ~~subsidiary.~~subsidiary and (iv) $10.0 million CAD revolving foreign exchange facility available to purchase foreign exchange forward contracts. There were no amounts outstanding under this agreement as of April ~~2, 2022~~1, 2023 or ~~January 1,~~December 31, 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.

Our income tax benefit was ~~$4.7~~$(6.5) million and $(4.7) million in the three months ended April 1, 2023 and April 2, 2022, ~~and our income tax benefit was $5.4 million in the three months ended April 3, 2021.~~respectively. The effective tax rate for Summit Inc. differs from the federal statutory tax rate primarily due to (1) ~~state taxes, (2)~~ tax depletion expense in excess of the expense recorded under U.S. GAAP, ~~(3)~~(2) basis differences in assets divested, (3) state taxes, (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.

As of April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022, Summit Inc. had a valuation allowance of ~~$1.7~~$1.1 million and $1.1 million, respectively, 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 months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021.~~2, 2022.

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 three months ended April ~~2, 2022, there were no~~1, 2023, 2,000 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. As of April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022, we had recorded ~~$326.5~~$327.8 million and ~~$326.5~~$328.4 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

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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

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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. No tax distributions were made by Summit Holdings ~~did not make any tax distributions~~ in the three months ended April ~~2, 2022 and April 3, 2021.~~1, 2023.

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:


		Three months ended						Three months ended
			April 2, 2022		April 3, 2021				April 1, 2023		April 2, 2022
Net loss attributable to Summit Inc.	Net loss attributable to Summit Inc.		$	(34,292)	$	(22,517)	Net loss attributable to Summit Inc.		$	(30,804)	$	(34,292)

Weighted average shares of Class A stock outstanding	Weighted average shares of Class A stock outstanding		118,777,341		115,411,204		Weighted average shares of Class A stock outstanding		118,564,556		120,756,555
Add: Nonvested restricted stock awards of retirement eligible shares	Add: Nonvested restricted stock awards of retirement eligible shares		160,125		253,521		Add: Nonvested restricted stock awards of retirement eligible shares		115,100		160,125
Weighted average shares outstanding	Weighted average shares outstanding		118,937,466		115,664,725		Weighted average shares outstanding		118,679,656		120,916,680
Basic loss per share	Basic loss per share		$	(0.29)	$	(0.19)	Basic loss per share		$	(0.26)	$	(0.28)

Diluted net loss attributable to Summit Inc.	Diluted net loss attributable to Summit Inc.		$	(34,292)	$	(22,517)	Diluted net loss attributable to Summit Inc.		$	(30,804)	$	(34,292)

Weighted average shares outstanding	Weighted average shares outstanding		118,937,466		115,411,204		Weighted average shares outstanding		118,679,656		120,916,680
Add: weighted average of LP Units	Add: weighted average of LP Units		—		—		Add: weighted average of LP Units		—		—
Add: stock options	Add: stock options		—		—		Add: stock options		—		—
Add: warrants	Add: warrants		—		—		Add: warrants		—		—
Add: restricted stock units	Add: restricted stock units		—		—		Add: restricted stock units		—		—
Add: performance stock units	Add: performance stock units		—		—		Add: performance stock units		—		—
Weighted average dilutive shares outstanding	Weighted average dilutive shares outstanding		118,937,466		115,411,204		Weighted average dilutive shares outstanding		118,679,656		120,916,680
Diluted loss per share	Diluted loss per share		$	(0.29)	$	(0.20)	Diluted loss per share		$	(0.26)	$	(0.28)

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


		Three months ended				Three months ended
			April 2, 2022	April 3, 2021			April 1, 2023	April 2, 2022
Antidilutive shares:	Antidilutive shares:				Antidilutive shares:
LP Units	LP Units		1,314,006	2,613,209	LP Units		1,311,257	1,314,006
Time-vesting stock options	Time-vesting stock options		290,944	1,175,135	Time-vesting stock options		279,680	290,944
Warrants	Warrants		31,519	43,166	Warrants		31,519	31,519
Time-vesting restricted stock units	Time-vesting restricted stock units		1,379,251	1,894,877	Time-vesting restricted stock units		1,051,844	1,379,251
Market-based restricted stock units	Market-based restricted stock units		416,096	410,357	Market-based restricted stock units		439,704	416,096

9.STOCKHOLDERS’ EQUITY

During ~~2021,~~2023, 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~~As of ~~2022, we repurchased 1.5~~April 1, 2023, there was $149.0 million ~~shares of Class A common stock~~available for ~~$47.5 million. These shares were retired~~purchase, upon ~~purchase.~~which they will be retired.

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

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								Summit Inc. Shares (Class A)	LP Units	Total	Summit Inc. Ownership Percentage
Balance — December 31, 2022							Balance — December 31, 2022	118,408,655	1,312,004	119,720,659	98.9	%
Exchanges during period							Exchanges during period	2,000	(2,000)	—
Stock option exercises							Stock option exercises	902	—	902

Other equity transactions							Other equity transactions	407,114	—	407,114
Balance — April 1, 2023							Balance — April 1, 2023	118,818,671	1,310,004	120,128,675	98.9	%

		Summit Inc. Shares (Class A)	LP Units	Total	Summit Inc. Ownership Percentage
Balance — January 1, 2022	Balance — January 1, 2022	118,705,108	1,314,006	120,019,114	98.9	%	Balance — January 1, 2022	120,684,322	1,314,006	121,998,328	98.9	%

Stock option exercises	Stock option exercises	1,589	—	1,589			Stock option exercises	1,589	—	1,589
Repurchases of common stock	Repurchases of common stock	(1,506,878)	—	(1,506,878)			Repurchases of common stock	(1,506,878)	—	(1,506,878)
Other equity transactions	Other equity transactions	842,029	—	842,029			Other equity transactions	842,029	—	842,029
Balance — April 2, 2022	Balance — April 2, 2022	118,041,848	1,314,006	119,355,854	98.9	%	Balance — April 2, 2022	120,021,062	1,314,006	121,335,068	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 1.1% and 1.1% as of April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022, respectively.

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 — December 31, 2022								Balance — December 31, 2022	$	6,356	$	(3,272)	$	3,084

Foreign currency translation adjustment, net of tax								Foreign currency translation adjustment, net of tax	—		161		161

Balance — April 1, 2023								Balance — April 1, 2023	$	6,356	$	(3,111)	$	3,245

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

Balance — January 2, 2021		$	533	$	4,670	$	5,203

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

Balance — April 3, 2021		$	533	$	6,305	$	6,838

10.SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information is as follows:


		Three months ended					Three months ended
		April 2, 2022		April 3, 2021			April 1, 2023		April 2, 2022
Cash payments:	Cash payments:					Cash payments:
Interest	Interest	$	31,789	$	29,476	Interest	$	37,970	$	31,789
Payments for income taxes, net	Payments for income taxes, net	1,542		2,312		Payments for income taxes, net	2,088		1,542
Operating cash payments on operating leases	Operating cash payments on operating leases	2,455		2,928		Operating cash payments on operating leases	2,402		2,455
Operating cash payments on finance leases	Operating cash payments on finance leases	372		655		Operating cash payments on finance leases	149		372
Finance cash payments on finance leases	Finance cash payments on finance leases	5,949		5,834		Finance cash payments on finance leases	4,011		5,949
Non cash financing activities:
Non cash investing and financing activities:						Non cash investing and financing activities:
Accrued liabilities for purchases of property, plant and equipment						Accrued liabilities for purchases of property, plant and equipment	$	21,911	$	23,610
Right of use assets obtained in exchange for operating lease obligations	Right of use assets obtained in exchange for operating lease obligations	$	5,416	$	3,081	Right of use assets obtained in exchange for operating lease obligations	679		5,416
Right of use assets obtained in exchange for finance leases obligations	Right of use assets obtained in exchange for finance leases obligations	248		588		Right of use assets obtained in exchange for finance leases obligations	413		248
Exchange of LP Units to shares of Class A common stock	Exchange of LP Units to shares of Class A common stock	—		19,784		Exchange of LP Units to shares of Class A common stock	60		—

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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 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:

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					Three months ended											Three months ended
										April 2, 2022			April 3, 2021							April 1, 2023		April 2, 2022
Operating lease cost	Operating lease cost									$	2,512		$	1,727	Operating lease cost					$	2,641	$	2,512
Variable lease cost	Variable lease cost									113			72		Variable lease cost					30		113
Short-term lease cost	Short-term lease cost									8,248			7,301		Short-term lease cost					7,270		8,248
Financing lease cost:	Financing lease cost:														Financing lease cost:
Amortization of right-of-use assets	Amortization of right-of-use assets									1,986			3,050		Amortization of right-of-use assets					818		1,986
Interest on lease liabilities	Interest on lease liabilities									369			657		Interest on lease liabilities					148		369
Total lease cost	Total lease cost									$	13,228		$	12,807	Total lease cost					$	10,907	$	13,228

		April 2, 2022			January 1, 2022				April 1, 2023			December 31, 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	$	28,766		$	30,150		Operating lease right-of-use assets	$	36,638		$	37,889

Current operating lease liabilities	Current operating lease liabilities	$	5,934		$	6,497		Current operating lease liabilities	$	7,515		$	7,296
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	28,017			28,880			Noncurrent operating lease liabilities	34,315			35,737
Total operating lease liabilities	Total operating lease liabilities	$	33,951		$	35,377		Total operating lease liabilities	$	41,830		$	43,033
Finance leases:	Finance leases:							Finance leases:
Property and equipment, gross	Property and equipment, gross	$	63,040		$	68,982		Property and equipment, gross	$	24,565		$	32,119
Less accumulated depreciation	Less accumulated depreciation	(31,459)			(31,404)			Less accumulated depreciation	(11,279)			(14,992)
Property and equipment, net	Property and equipment, net	$	31,581		$	37,578		Property and equipment, net	$	13,286		$	17,127

Current finance lease liabilities	Current finance lease liabilities	$	14,234		$	17,624		Current finance lease liabilities	$	4,224		$	6,959
Long-term finance lease liabilities	Long-term finance lease liabilities	10,557			14,982			Long-term finance lease liabilities	6,303			7,167
Total finance lease liabilities	Total finance lease liabilities	$	24,791		$	32,606		Total finance lease liabilities	$	10,527		$	14,126

Weighted average remaining lease term (years):	Weighted average remaining lease term (years):							Weighted average remaining lease term (years):
Operating leases	Operating leases	9.7			9.7			Operating leases	9.0			9.1
Finance lease	Finance lease	2.5			2.3			Finance lease	3.5			2.8

Weighted average discount rate:	Weighted average discount rate:							Weighted average discount rate:
Operating leases	Operating leases	4.4		%	4.4		%	Operating leases	4.7		%	4.7		%
Finance leases	Finance leases	5.1		%	5.2		%	Finance leases	5.6		%	5.3		%

Maturities of lease liabilities, as of April 2, 2022, were as follows:
Maturities of lease liabilities, as of April 1, 2023, were as follows:															Maturities of lease liabilities, as of April 1, 2023, were as follows:
		Operating Leases			Finance Leases				Operating Leases			Finance Leases
2022 (nine months)		$	5,352		$	11,198
2023		6,197			7,510
2023 (nine months)															2023 (nine months)	$	6,929	$	3,106
2024	2024	4,883			2,936			2024	8,289			3,433
2025	2025	3,612			2,415			2025	6,377			2,435
2026	2026	2,952			990			2026	5,009			990
2027	2027	2,456			760			2027	4,161			760
2028															2028	3,223		513
Thereafter	Thereafter	17,307			1,083			Thereafter	16,787			570
Total lease payments	Total lease payments	42,759			26,892			Total lease payments	50,775			11,807
Less imputed interest	Less imputed interest	(8,808)			(2,101)			Less imputed interest	(8,945)			(1,280)
Present value of lease payments	Present value of lease payments	$	33,951		$	24,791		Present value of lease payments	$	41,830		$	10,527

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

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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 April 2,1, 2023 and December 31, 2022, ~~and January 1, 2022, $37.0~~$35.5 million and ~~$37.7~~$36.3 million, respectively, were included in other noncurrent liabilities on the consolidated balance sheets and ~~$4.3~~$5.3 million and ~~$7.4~~$4.0 million, respectively, were included in accrued expenses for future reclamation costs. The total undiscounted anticipated costs for site reclamation as of April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022 were ~~$107.6~~$124.8 million and ~~$112.4~~$124.9 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 April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022 was:


		April 2, 2022		January 1, 2022			April 1, 2023		December 31, 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	$	133	$	129	Contingent consideration	$	336	$	336
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	$	1,115	$	1,239	Contingent consideration	$	4,961	$	4,981

The fair value of contingent consideration was based on unobservable, or Level 3, inputs, including projected probability-weighted cash payments and a ~~9.5%~~10.0% 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 April ~~2, 2022~~1, 2023 and April ~~3, 2021.~~2, 2022.

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 April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022 was:

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		April 2, 2022				January 1, 2022					April 1, 2023				December 31, 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)	$	1,596,591	$	1,607,767	$	1,653,085	$	1,609,298	Long-term debt(1)	$	1,457,171	$	1,503,530	$	1,447,673	$	1,504,549
Level 3	Level 3									Level 3
Current portion of deferred consideration and noncompete obligations(2)	Current portion of deferred consideration and noncompete obligations(2)	12,945		12,945		12,981		12,981		Current portion of deferred consideration and noncompete obligations(2)	6,907		6,907		13,382		13,382
Long term portion of deferred consideration and noncompete obligations(3)	Long term portion of deferred consideration and noncompete obligations(3)	21,813		21,813		32,130		32,130		Long term portion of deferred consideration and noncompete obligations(3)	17,978		17,978		24,070		24,070

(1)$~~6.4~~5.1 million was included in current portion of debt as of April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 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 3three 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 April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022 and for the three months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021:~~2, 2022:


		Three months ended						Three months ended
			April 2, 2022		April 3, 2021				April 1, 2023		April 2, 2022
Revenue*:	Revenue*:						Revenue*:
West	West		$	252,232	$	251,133	West		$	250,882	$	252,232
East	East		122,490		136,042		East		130,389		122,490
Cement	Cement		46,225		40,669		Cement		54,117		46,225
Total revenue	Total revenue		$	420,947	$	427,844	Total revenue		$	435,388	$	420,947

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

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		Three months ended						Three months ended
			April 2, 2022		April 3, 2021				April 1, 2023		April 2, 2022
Loss from operations before taxes	Loss from operations before taxes		$	(39,543)	$	(28,688)	Loss from operations before taxes		$	(37,678)	$	(39,543)
Interest expense	Interest expense		20,149		24,186		Interest expense		27,420		20,149
Depreciation, depletion and amortization	Depreciation, depletion and amortization		50,479		55,570		Depreciation, depletion and amortization		50,188		50,479
Accretion	Accretion		714		766		Accretion		706		714

Loss on debt financings							Loss on debt financings		493		—

Gain on sale of businesses	Gain on sale of businesses		(14,205)		(15,668)		Gain on sale of businesses		—		(14,205)
Non-cash compensation	Non-cash compensation		5,422		5,363		Non-cash compensation		4,708		5,422
Other	Other		247		205		Other		(4,636)		247
Total Adjusted EBITDA	Total Adjusted EBITDA		$	23,263	$	41,734	Total Adjusted EBITDA		$	41,201	$	23,263

Total Adjusted EBITDA by Segment:	Total Adjusted EBITDA by Segment:						Total Adjusted EBITDA by Segment:
West	West		$	32,692	$	40,648	West		$	32,678	$	32,692
East	East		8,136		11,745		East		18,852		8,136
Cement	Cement		(5,819)		2,499		Cement		10		(5,819)
Corporate and other	Corporate and other		(11,746)		(13,158)		Corporate and other		(10,339)		(11,746)
Total Adjusted EBITDA	Total Adjusted EBITDA		$	23,263	$	41,734	Total Adjusted EBITDA		$	41,201	$	23,263


		Three months ended					Three months ended
		April 2, 2022		April 3, 2021			April 1, 2023		April 2, 2022
Purchases of property, plant and equipment	Purchases of property, plant and equipment					Purchases of property, plant and equipment
West	West	$	26,874	$	34,068	West	$	38,174	$	26,874
East	East	24,326		33,202		East	15,518		24,326
Cement	Cement	6,115		2,273		Cement	6,996		6,115
Total reportable segments	Total reportable segments	57,315		69,543		Total reportable segments	60,688		57,315
Corporate and other	Corporate and other	459		214		Corporate and other	2,896		459
Total purchases of property, plant and equipment	Total purchases of property, plant and equipment	$	57,774	$	69,757	Total purchases of property, plant and equipment	$	63,584	$	57,774


		Three months ended						Three months ended
			April 2, 2022		April 3, 2021				April 1, 2023		April 2, 2022
Depreciation, depletion, amortization and accretion:	Depreciation, depletion, amortization and accretion:						Depreciation, depletion, amortization and accretion:
West	West		$	24,575	$	25,140	West		$	26,373	$	24,575
East	East		18,295		21,943		East		15,535		18,295
Cement	Cement		7,574		8,149		Cement		7,998		7,574
Total reportable segments	Total reportable segments		50,444		55,232		Total reportable segments		49,906		50,444
Corporate and other	Corporate and other		749		1,104		Corporate and other		988		749
Total depreciation, depletion, amortization and accretion	Total depreciation, depletion, amortization and accretion		$	51,193	$	56,336	Total depreciation, depletion, amortization and accretion		$	50,894	$	51,193


		April 2, 2022		January 1, 2022			April 1, 2023		December 31, 2022
Total assets:	Total assets:					Total assets:
West	West	$	1,527,170	$	1,512,298	West	$	1,632,437	$	1,565,776
East	East	1,259,620		1,292,638		East	1,155,539		1,151,223
Cement	Cement	852,313		844,086		Cement	885,608		873,604
Total reportable segments	Total reportable segments	3,639,103		3,649,022		Total reportable segments	3,673,584		3,590,603
Corporate and other	Corporate and other	504,142		590,103		Corporate and other	541,356		665,089
Total	Total	$	4,143,245	$	4,239,125	Total	$	4,214,940	$	4,255,692

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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.

We are organized into 1110 operating companies that make up our three distinct operating segments: West, East and Cement, which are also our reporting segments. We operate in 2120 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.

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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. From a macroeconomic view, we continue to see positive indicators for highway ~~obligations. While~~obligations as funds from the Infrastructure Investment and Jobs Act (“IIJA”) are beginning to be spent in our markets. We are seeing the impact of rising interest rates and inflation ~~have not yet~~on residential

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~~impacted housing starts, we are monitoring that activity closely.~~markets in our geographies. Rising interest rates and inflation may also impact our non-residential construction activity in the ~~future.~~future as non-residential activity tends to lag behind residential activity by a year or so.

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. The ~~Infrastructure Investment and Jobs Act ("IIJA") was signed into law on November 15, 2021. The~~ IIJA provides $1.2 trillion in funding over five years from 2022 through 2026, ~~including $550~~which includes $347.8 billion ~~in new investments~~ for ~~all modes of transportation, water, power~~highways, and ~~energy, environment remediation, public lands, broadband and resilience.~~$91.0 billion for transit.

In ~~2021,~~2022, approximately ~~64%~~65% 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~~is expected to remain a high ~~priority for the federal government in 2021, but no action has been taken to date.~~priority.

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 ~~23%~~24%, ~~15%~~17%, ~~12%~~10% and 9%10%, respectively, of our total revenue in ~~2021.~~2022. The following is a summary of key funding initiatives in those states:

•The Texas Department of Transportation (“TXDOT”) Unified Transportation Program (“UTP”) is a long-term planning document, released annually, that guides the development of transportation work over ten years. The total ten-year work program for fiscal years 2023 through 2032 totals $85.06 billion, a 14.3% increase over the prior plan for fiscal years 2022 through 2032. Fiscal year 2023 of the updated ~~its~~plan calls for $13.62 billion in total spending, a 58% increase over fiscal year 2022 ~~lettings estimate to $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.~~the previous plan.

•The state of Utah anticipates transportation funding of approximately ~~$1.8~~$2.7 billion in ~~2022.~~fiscal year 2023.

•The ~~state~~Kansas State Transportation Improvement Program projects fiscal year 2023 total expenditures of ~~Kansas anticipates approximately~~ $2.2 billion, ~~for 2022 for transportation funding.~~a 25.4% increase over fiscal year 2022. Projected construction expenditures total $1.32 billion, a 29.2% annual increase.

•The state of Missouri anticipates transportation funding of approximately ~~$3.2~~$3.5 billion in ~~2022.~~fiscal year 2023.

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 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.

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Financial Highlights

The principal factors in evaluating our financial condition and operating results as of and for the three months ended April ~~2, 2022~~1, 2023 as compared to the three months ended April ~~3, 2021,~~2, 2022, and certain other highlights include:

•Net revenue ~~decreased $6.0~~increased $14.8 million in the three months ended April ~~2, 2022,~~1, 2023, primarily resulting from ~~divestitures completed in 2021, partially offset by~~ increases in average sales ~~prices.~~prices which more than offsetting reduced volumes and decreases due to divestitures completed in 2022.

•Our operating loss ~~increased $9.2~~decreased $18.8 million in the three months ended April ~~2, 2022,~~1, 2023, as our increases in revenue overcame inflationary impacts on our cost ~~structure and higher repair and maintenance costs exceeded the increases in average sales prices,~~of revenue, mitigated by a $5.6 million decrease in ~~depreciation, depletion, amortization~~general and ~~accretion expenses.~~administrative expenses resulting from our divestitures.

•In the three months ended April ~~2, 2022,~~1, 2023, average sales price increased ~~4.8%~~20.5%, 14.8%, 15.2% and 24.5% in aggregates, ~~10.1% in~~ cement, ~~7.3% in~~ ready-mix concrete and ~~10.2% in asphalt.~~asphalt, respectively.

•In the three months ended April ~~2, 2022,~~1, 2023, sales volume decreased ~~0.8%~~6.2%, 1.2% and 23.4% in aggregates, ~~7.2%~~cement and in ready-mix concrete, respectively, and ~~45.1%~~increased 25.0% in ~~asphalt, offset by a 0.3% increase in cement.~~

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

•~~In March 2022, the Company repurchased $47.5 million of our Class A common stock.~~asphalt.

Results of Operations

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 (loss) 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. 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 months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021.~~2, 2022.


		Three months ended						Three months ended
			April 2, 2022		April 3, 2021				April 1, 2023		April 2, 2022
($ in thousands)	($ in thousands)						($ in thousands)
Net revenue	Net revenue		$	392,495	$	398,481	Net revenue		$	407,270	$	392,495
Delivery and subcontract revenue	Delivery and subcontract revenue		28,452		29,363		Delivery and subcontract revenue		28,118		28,452
Total revenue	Total revenue		420,947		427,844		Total revenue		435,388		420,947
Cost of revenue (excluding items shown separately below)	Cost of revenue (excluding items shown separately below)		353,380		346,694		Cost of revenue (excluding items shown separately below)		354,037		353,380
General and administrative expenses	General and administrative expenses		51,924		51,642		General and administrative expenses		46,362		51,924
Depreciation, depletion, amortization and accretion	Depreciation, depletion, amortization and accretion		51,193		56,336		Depreciation, depletion, amortization and accretion		50,894		51,193
Gain on sale of property, plant and equipment	Gain on sale of property, plant and equipment		(1,255)		(1,769)		Gain on sale of property, plant and equipment		(430)		(1,255)
Operating loss	Operating loss		(34,295)		(25,059)		Operating loss		(15,475)		(34,295)
Interest expense	Interest expense		20,149		24,186		Interest expense		27,420		20,149

Loss on debt financings							Loss on debt financings		493		—

Gain on sale of businesses	Gain on sale of businesses		(14,205)		(15,668)		Gain on sale of businesses		—		(14,205)
Other income, net	Other income, net		(696)		(4,889)		Other income, net		(5,710)		(696)
Loss from operations before taxes	Loss from operations before taxes		(39,543)		(28,688)		Loss from operations before taxes		(37,678)		(39,543)
Income tax benefit	Income tax benefit		(4,743)		(5,443)		Income tax benefit		(6,466)		(4,743)
Net loss	Net loss		$	(34,800)	$	(23,245)	Net loss		$	(31,212)	$	(34,800)

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Three months ended April ~~2, 2022~~1, 2023 compared to the three months ended April ~~3, 2021~~2, 2022


		Three months ended													Three months ended
($ in thousands)	($ in thousands)	April 2, 2022	April 3, 2021			Variance					($ in thousands)				April 1, 2023	April 2, 2022	Variance
Net revenue	Net revenue		$	392,495		$	398,481		$	(5,986)		(1.5)	%	Net revenue			$	407,270		$	392,495		$	14,775	3.8	%
Operating loss	Operating loss		(34,295)			(25,059)			(9,236)			(36.9)	%	Operating loss			(15,475)			(34,295)			18,820		54.9	%
Operating margin percentage	Operating margin percentage		(8.7)		%	(6.3)		%						Operating margin percentage			(3.8)		%	(8.7)		%
Adjusted EBITDA (1)	Adjusted EBITDA (1)		$	23,263		$	41,734		$	(18,471)		(44.3)	%	Adjusted EBITDA (1)			$	41,201		$	23,263		$	17,938	77.1	%
Adjusted EBITDA Margin (1)	Adjusted EBITDA Margin (1)		5.9		%	10.5		%						Adjusted EBITDA Margin (1)			10.1		%	5.9		%

(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 (loss), which is the most directly comparable GAAP measure.

Net revenue ~~decreased $6.0~~increased $14.8 million in the three months ended April ~~2, 2022, primarily resulting from organic volume decline~~1, 2023, due to increases in our ~~ready-mix concrete~~average sales price and ~~asphalt operations due to our divestiture program. Of~~as well as organic revenue increases in the East and Cement segments, more than offsetting a $18.9 million decrease in net revenue ~~$9.0~~in the East segment related to divestitures. Of the increase in net revenue, $26.7 million was from increased revenue of materials, partially offset by $10.2 million from decreased ~~sales of~~revenue from products and ~~$7.4~~$1.7 million from decreased service ~~revenue, partially offset by $10.4 million from~~revenue. We experienced organic volume decline of 3.4%, 1.2% and 19.3% in our aggregates, cement and ready-mix concrete lines of business, respectively, while our organic asphalt volumes increased ~~sales of materials.~~38.7%. Our organic ~~volumes declined 1.5%, 7.2% and 45.1%~~volume declines in aggregates and ready-mix concrete ~~and asphalt, respectively, offset by a 0.3% increase~~occurred primarily in ~~cement. The organic~~the West segment, due to unfavorable winter weather and volume decreases ~~for aggregates, ready-mix~~in residential and ~~asphalt were primarily attributable to our divestiture program.~~non-residential markets. We ~~had~~achieved organic price growth ~~in our aggregate, cement, ready-mix and asphalt~~across all lines of business ~~of 5.0%, 10.1%, 7.3% and 10.2%, respectively,~~ during the first ~~three months~~quarter of ~~2022.~~2023. Additional detail about the impact of acquisitions and divestitures on each segment is presented below where material.

Operating loss ~~increased~~decreased by ~~$9.2~~$18.8 million in the ~~first~~ three months ~~of 2022 as compared~~ended April 1, 2023, dues to ~~the first three months~~a combination of ~~2021, primarily as increases in our cost structure exceeded the~~ increases in average sales ~~prices, as well as the timing~~price that exceeded inflationary increases in cost of ~~repair~~revenue and ~~maintenance expenditures~~lower general and ~~certain stripping activities, unplanned downtime at a few of our locations, mitigated by a decrease of $5.1 million in depreciation, depletion, amortization and accretion expense primarily~~administrative expenses resulting from reduced headcount due to ~~divestitures completed in 2021.~~divestitures.

Our operating margin percentage for the three months ended April ~~2, 2022 decreased~~1, 2023 increased from ~~(6.3)~~(8.7)% to ~~(8.7)~~(3.8)%, from the comparable period a year ago, due to the factors noted above. Adjusted EBITDA, as defined in "Non-GAAP Performance Measures" below, ~~decreased $18.5~~increased by $17.9 million in the three months ended April ~~2, 2022,~~1, 2023, 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:


		Three months ended											Three months ended
($ in thousands)	($ in thousands)	April 2, 2022	April 3, 2021		Variance				($ in thousands)				April 1, 2023	April 2, 2022	Variance
Revenue by product*:	Revenue by product*:											Revenue by product*:
Aggregates	Aggregates		$	149,426	$	143,794	$	5,632		3.9	%	Aggregates			$	168,937	$	149,426	$	19,511	13.1	%
Cement	Cement		43,806		39,703		4,103			10.3	%	Cement			49,742		43,806		5,936		13.6	%
Ready-mix concrete	Ready-mix concrete		157,602		158,336		(734)			(0.5)	%	Ready-mix concrete			139,144		157,602		(18,458)		(11.7)	%
Asphalt	Asphalt		17,501		31,225		(13,724)			(44.0)	%	Asphalt			26,717		17,501		9,216		52.7	%
Paving and related services	Paving and related services		40,337		61,808		(21,471)			(34.7)	%	Paving and related services			40,717		40,337		380		0.9	%
Other	Other		12,275		(7,022)		19,297			274.8	%	Other			10,131		12,275		(2,144)		(17.5)	%
Total revenue	Total revenue		$	420,947	$	427,844	$	(6,897)		(1.6)	%	Total revenue			$	435,388	$	420,947	$	14,441	3.4	%

*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.

Detail of our volumes and average selling prices by product in the three months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021~~2, 2022 were as follows:

Table of Contents


		Three months ended											Three months ended
		April 2, 2022			April 3, 2021								April 1, 2023			April 2, 2022
		Volume(1)			Volume(1)			Percentage Change in					Volume(1)			Volume(1)			Percentage Change in
		(in thousands)	Pricing(2)		(in thousands)	Pricing(2)		Volume		Pricing			(in thousands)	Pricing(2)		(in thousands)	Pricing(2)		Volume		Pricing
Aggregates	Aggregates	13,402	$	11.15	13,509	$	10.64	(0.8)	%	4.8	%	Aggregates	12,572	$	13.44	13,402	$	11.15	(6.2)	%	20.5	%
Cement	Cement	341	128.42		340	116.69		0.3	%	10.1	%	Cement	337	147.41		341	128.42		(1.2)	%	14.8	%
Ready-mix concrete	Ready-mix concrete	1,241	127.00		1,338	118.31		(7.2)	%	7.3	%	Ready-mix concrete	951	146.29		1,241	127.00		(23.4)	%	15.2	%
Asphalt	Asphalt	260	66.15		474	60.01		(45.1)	%	10.2	%	Asphalt	325	82.33		260	66.15		25.0	%	24.5	%

(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 ~~$5.6~~$19.5 million in the three months ended April ~~2, 2022.~~1, 2023. In the ~~first~~ three months ~~of 2022,~~ended April 1, 2023 we had ~~solid~~strong organic price increases ~~in organic aggregate volumes in most of our markets,~~ which were offset by ~~volume decreases~~a decrease in ~~certain markets due to divestitures in 2021. Aggregate average sales price of $11.15 per ton increased 4.8%~~organic aggregate volumes. Organic aggregate volumes decreased 3.4% in the first three months of ~~2022~~2023 as compared to the same period a year ago, primarily due to moderating demand, as well as unfavorable weather conditions in certain geographies as noted below. Aggregate average sales price of $13.44 per ton increased 20.5% in the first three months of 2023 as compared to the first three months of ~~2021,~~2022, due to our focus on increasing prices in the current inflationary environment. We ~~have continued, and expect~~continue to ~~continue~~focus on increasing our prices ~~to stay ahead of inflationary pressures.~~as market conditions allow.

Revenue from cement increased ~~$4.1~~$5.9 million in the three months ended April ~~2, 2022.~~1, 2023. In the three months ended April ~~2, 2022, organic cement volumes increased 0.3% and~~1, 2023, organic cement average sales prices increased ~~10.1%~~14.8%, ~~as compared~~due to the ~~same period in the prior year.~~current pricing environment as noted above.

Revenue from ready-mix concrete decreased ~~$0.7~~$18.5 million in the three months ended April ~~2, 2022.~~1, 2023. In the three months ended April ~~2, 2022,~~1, 2023, our ready-mix volumes decreased ~~7.2%~~23.4%, and our average sales prices increased ~~7.3%~~15.2%. InThe volume decrease in the three months ended April ~~2, 2022, our volume decrease~~1, 2023 occurred primarily in our ~~Kansas and north Texas markets~~Intermountain West market due to unfavorable weather and moderating demand in our residential markets, while our price increases ~~were in~~occurred across all of our major markets.

Revenue from asphalt ~~decreased $13.7~~increased $9.2 million in the three months ended April ~~2, 2022,~~1, 2023, primarily due to ~~the divestiture of~~increased volumes in our ~~paving business in~~North Texas ~~in May 2021.~~market. In the first three months of ~~2022,~~2023, organic ~~pricing~~volumes increased ~~10.2%, with strong pricing gains in the Virginia and Intermountain West geographies.~~by 38.7%. In the first three months of ~~2022,~~2023, organic ~~volumes decreased 45.1% mainly due to the divestiture noted above.~~pricing increased 20.8%, with strong pricing gains across all our major markets.

Other Financial Information

Interest ~~expense~~Expense

~~In September 2021, we redeemed all $300.0~~Our interest expense was $27.4 million ~~5.125% Senior Notes due 2025 using existing cash on hand. As a result, interest expense~~and $20.1 million in the three months ended April 1, 2023 and April 2, 2022, respectively. Although our total debt balance has decreased $100.1 million from April 2, 2022 to April 1, 2023, rising interest rates led to higher interest expense in 2023, which is ~~less than it was in~~expected to continue during the ~~first three months~~rest of ~~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 three months of 2022, as well as in the first three months of 2021, we sold one business in the East segment in each year, resulting in cash proceeds of $47.8 million and a net gain on disposition of $14.2 million in 2022, and cash proceeds of $33.1 million and a net gain on disposition of $15.7 million in 2021.2023.

Income Tax Expense

Our income tax benefit was $6.5 million and $4.7 million in the three months ended April 1, 2023 and April 2, 2022, ~~and our income tax benefit was $5.4 million in the three months ended April 3, 2021.~~respectively. The effective tax rate for Summit Inc. differs from the federal statutory tax rate primarily due to (1) ~~state taxes, (2)~~ tax depletion expense in excess of the expense recorded under U.S. GAAP, ~~(3)~~(2) basis differences in assets divested, (3) state taxes, (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.

~~Table of 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													Three months ended
($ in thousands)	($ in thousands)	April 2, 2022	April 3, 2021			Variance					($ in thousands)				April 1, 2023	April 2, 2022	Variance
Net revenue	Net revenue		$	236,002		$	234,744		$	1,258		0.5	%	Net revenue			$	234,370		$	236,002		$	(1,632)	(0.7)	%
Operating income	Operating income		7,992			15,057			(7,065)			(46.9)	%	Operating income			5,713			7,992			(2,279)		(28.5)	%
Operating margin percentage	Operating margin percentage		3.4		%	6.4		%						Operating margin percentage			2.4		%	3.4		%
Adjusted EBITDA (1)	Adjusted EBITDA (1)		$	32,692		$	40,648		$	(7,956)		(19.6)	%	Adjusted EBITDA (1)			$	32,678		$	32,692		$	(14)	—	%
Adjusted EBITDA Margin (1)	Adjusted EBITDA Margin (1)		13.9		%	17.3		%						Adjusted EBITDA Margin (1)			13.9		%	13.9		%

Net revenue in the West segment decreased $1.6 million for the three months ended April 1, 2023 due to net revenue decreases in our ready mix lines of businesses, offset by an increase in our asphalt lines of business. Organic aggregates average sales prices increased ~~$1.3 million~~25.0% in the three months ended April ~~2, 2022,~~1, 2023, as price increases ~~in net revenues in aggregates and ready-mix concrete outpaced a decrease in asphalt and paving revenues due~~were implemented across all geographies to ~~a divestiture in the second quarter of 2021.~~offset inflationary factors. Organic aggregate volumes ~~increased 3.9%~~decreased 17.7% in the ~~first~~ three ~~months of 2022~~month period due, in part, to softness in our residential markets and unfavorable weather in our Intermountain West market, as compared to the first three months of 2021, and organic aggregates average sales prices increased 3.7%, primarily due to strong demand in our Texas, as well as in our Intermountain West geography and increased projects in British Columbia.2022. Organic ready-mix concrete volumes decreased ~~0.9% and our~~21.1% while organic ready-mix concrete average sales prices increased ~~7.0%. Organic ready-mix volumes were strong in 2022 in south Texas which were offset by slightly lower volumes~~16.1% in the ~~Intermountain Region. Residential construction~~three months ended April 1, 2023. Construction activity ~~remains strong, particularly~~is slowing, to varying degrees, across residential markets, including in ~~the~~our two largest, 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~~as higher mortgage interest rates are negatively impacting demand and, ~~other inflationary concerns.~~by extension, dampened home builder activity.

The West segment’s operating income decreased ~~$7.1~~$2.3 million in the three months ended April ~~2, 2022.~~1, 2023. Adjusted EBITDA ~~decreased $8.0 million~~ and Adjusted EBITDA Margin decreased to 13.9% from 17.3% in the three months ended April 2, 2022. The decreases in operating income and Adjusted EBITDA for the first quarter of 2022 occurred primarily due to higher sub-contractor costs, as well as increased repair and maintenance and fuel costs.margin remained constant. The operating margin percentage in the West segment decreased in the three months ended April ~~2, 2022~~1, 2023 due to ~~the aggregate~~unfavorable product mix ~~in Texas~~relative to prior year, as well as ~~the other factors noted above.~~ongoing input cost inflation.

Gross revenue by product/ service was as follows:


		Three months ended											Three months ended
($ in thousands)	($ in thousands)	April 2, 2022	April 3, 2021		Variance				($ in thousands)				April 1, 2023	April 2, 2022	Variance
Revenue by product*:	Revenue by product*:											Revenue by product*:
Aggregates	Aggregates		$	77,782	$	72,138	$	5,644		7.8	%	Aggregates			$	80,514	$	77,782	$	2,732	3.5	%
Ready-mix concrete	Ready-mix concrete		134,591		126,986		7,605			6.0	%	Ready-mix concrete			123,256		134,591		(11,335)		(8.4)	%
Asphalt	Asphalt		13,600		27,688		(14,088)			(50.9)	%	Asphalt			23,761		13,600		10,161		74.7	%
Paving and related services	Paving and related services		32,503		46,889		(14,386)			(30.7)	%	Paving and related services			37,392		32,503		4,889		15.0	%
Other	Other		(6,244)		(22,568)		16,324			72.3	%	Other			(14,041)		(6,244)		(7,797)		(124.9)	%
Total revenue	Total revenue		$	252,232	$	251,133	$	1,099		0.4	%	Total revenue			$	250,882	$	252,232	$	(1,350)	(0.5)	%

*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 months ended April ~~2, 2022~~1, 2023 from the three months ended April ~~3, 2021~~2, 2022 were as follows:


	Three months ended
	Percentage Change in
		Volume		Pricing
Aggregates		(17.4)	%	25.4	%
Ready-mix concrete		(21.1)	%	16.1	%
Asphalt		40.9	%	24.1	%

Revenue from aggregates in the West segment increased $2.7 million in the three months ended April 1, 2023. Aggregates pricing for the three months ended April 1, 2023 increased 25.4% when compared to the same period in 2022.

Table of Contents

Three months ended
Percentage Change in
Volume Pricing
Aggregates 3.9 % 3.7 %
Ready-mix concrete (0.9) % 7.0 %
Asphalt (50.7) % 10.3 %

~~Revenue from aggregates~~Increased average sales prices more than offset a 17.4% decrease in sales volumes in the ~~West segment increased $5.6 million in the three months ended April 2, 2022, due to an increase in aggregates sales volumes and prices.~~first quarter of 2023. In the three months ended April ~~2, 2022,~~1, 2023, aggregate volumes ~~increased 3.9%,~~decreased in all our major markets. Aggregate volume declines in the first quarter of 2023 were primarily ~~due~~attributable to ~~strong volumes~~a slowdown in ~~Texas~~our residential markets as noted above, as well as unfavorable weather in the Intermountain ~~West markets. Aggregates pricing for the three months ended April 2, 2022 increased 3.7% when compared to the same period in 2021 due to prices increases in all our markets.~~West.

Revenue from ready-mix concrete in the West segment ~~increased $7.6~~decreased $11.3 million in the three months ended April ~~2, 2022.~~1, 2023. For the three months ended April ~~2, 2022,~~1, 2023, our organic ready-mix concrete volumes decreased 21.1%, which only partially offset increased organic ready-mix concrete prices ~~increased 7.0%~~of 16.1%. For the three months ended April ~~2, 2022,~~1, 2023, our organic ready-mix concrete ~~organic~~ volumes decreased ~~0.9% as strong volume increases~~due to unfavorable weather in ~~south Texas were offset by declines in the~~our Intermountain West ~~geographies.~~geography and reduced residential demand.

~~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 $14.1~~increased $10.2 million in the three months ended April ~~2, 2022.~~1, 2023. For the three months ended April ~~2, 2022,~~1, 2023, asphalt volumes ~~decreased 50.7%.~~increased 40.9% due primarily to growth in North Texas. Average sales prices for asphalt increased ~~10.3%~~24.1% in the three months ended April ~~2, 2022.~~1, 2023. Revenue for paving and related services in the West segment ~~decreased~~increased by ~~$14.4~~$4.9 million in the three months ended April ~~2, 2022.~~1, 2023.

Prior to eliminations of intercompany transactions, the net effect of volume and pricing changes on gross revenue in the three months ended April ~~2, 2022~~1, 2023 was approximately ~~$(2.9)~~$(6.9) million and ~~$3.8~~$8.4 million, respectively.

East Segment


		Three months ended													Three months ended
($ in thousands)	($ in thousands)	April 2, 2022	April 3, 2021			Variance					($ in thousands)				April 1, 2023	April 2, 2022	Variance
Net revenue	Net revenue		$	110,268		$	123,068		$	(12,800)		(10.4)	%	Net revenue			$	118,783		$	110,268		$	8,515	7.7	%
Operating loss			(10,727)			(10,374)			(353)			(3.4)	%
Operating income (loss)														Operating income (loss)			2,964			(10,727)			13,691		127.6	%
Operating margin percentage	Operating margin percentage		(9.7)		%	(8.4)		%						Operating margin percentage			2.5		%	(9.7)		%
Adjusted EBITDA (1)	Adjusted EBITDA (1)		$	8,136		$	11,745		$	(3,609)		(30.7)	%	Adjusted EBITDA (1)			$	18,852		$	8,136		$	10,716	131.7	%
Adjusted EBITDA Margin (1)	Adjusted EBITDA Margin (1)		7.4		%	9.5		%						Adjusted EBITDA Margin (1)			15.9		%	7.4		%

Net revenue in the East segment ~~decreased $12.8~~increased $8.5 million in the three months ended April 2,1, 2023, as compared to the same period a year ago, primarily due to increased aggregate volumes and price. The increases in net revenue more than offset the impact from divestitures during 2022 of $18.9 million in the three months ended April 1, 2023. Operating income increased $13.7 million in the three months ended April 1, 2023, as increases in average sales prices exceeded inflationary increases in our cost of revenue. Adjusted EBITDA increased $10.7 million in the three months ended April 1, 2023, which benefited from the timing of 2022 divestitures, contributing $5.9 million of Adjusted EBITDA in the three months ended April 1, 2023. Operating income margin increased to 2.5% from (9.7)% in the three months ended April 1, 2023, as compared to the same period a year ago as the ~~decreases in ready-mix concrete and paving and related services exceeded an increase in asphalt revenues. Operating loss~~impact of our Elevate Summit strategy to divest underperforming businesses is being realized. Adjusted EBITDA Margin increased ~~$0.4 million~~to 15.9% from 7.4% in the three months ended April 2, 2022, as increases in our cost of revenue exceeded our increases in average sales prices. Adjusted EBITDA decreased $3.6 million in the three months ended April 2, 2022 and Adjusted EBITDA Margin decreased to 7.4% from 9.5% in the three months ended April 2, 2022,1, 2023, as compared to the same period a year ago.

~~Operating margin percentage for the three months ended April 2, 2022 decreased to (9.7)% from (8.4)%, from the comparable period a year ago, due to the items noted above.~~

Gross revenue by product/ service was as follows:

~~Table of Contents~~


		Three months ended											Three months ended
($ in thousands)	($ in thousands)	April 2, 2022	April 3, 2021		Variance				($ in thousands)				April 1, 2023	April 2, 2022	Variance
Revenue by product*:	Revenue by product*:											Revenue by product*:
Aggregates	Aggregates		$	71,644	$	71,656	$	(12)		—	%	Aggregates			$	88,423	$	71,644	$	16,779	23.4	%
Ready-mix concrete	Ready-mix concrete		23,011		31,350		(8,339)			(26.6)	%	Ready-mix concrete			15,888		23,011		(7,123)		(31.0)	%
Asphalt	Asphalt		3,901		3,537		364			10.3	%	Asphalt			2,956		3,901		(945)		(24.2)	%
Paving and related services	Paving and related services		7,834		14,919		(7,085)			(47.5)	%	Paving and related services			3,325		7,834		(4,509)		(57.6)	%
Other	Other		16,100		14,580		1,520			10.4	%	Other			19,797		16,100		3,697		23.0	%
Total revenue	Total revenue		$	122,490	$	136,042	$	(13,552)		(10.0)	%	Total revenue			$	130,389	$	122,490	$	7,899	6.4	%

Table of Contents

The East segment’s percent changes in sales volumes and pricing in the three months ended April ~~2, 2022~~1, 2023 from the three months ended April ~~3, 2021~~2, 2022 were as follows:


		Three months ended						Three months ended
		Percentage Change in						Percentage Change in
			Volume		Pricing				Volume		Pricing
Aggregates	Aggregates		(6.5)	%	7.0	%	Aggregates		8.9	%	13.2	%
Ready-mix concrete	Ready-mix concrete		(32.5)	%	8.9	%	Ready-mix concrete		(36.5)	%	8.6	%
Asphalt	Asphalt		(8.1)	%	14.5	%	Asphalt		(31.6)	%	20.4	%

Revenue from aggregates in the East segment ~~remained flat~~increased $16.8 million in the three months ended April ~~2, 2022~~1, 2023, as compared to the same period a year ago. Aggregate volumes in the ~~first~~ three months of ~~2022 decreased 6.5%~~2023 increased 8.9%, primarily due to ~~our divestiture program, partially offset by organic growth~~favorable weather in ~~our Georgia operations.~~2023. Excluding the impact of the divestitures, aggregate volumes in the three months of 2023 increased 21.7%. Aggregates organic pricing increased ~~7.7%~~12.7% in the three months ended April ~~2, 2022,~~1, 2023, as compared to the same period a year ago.

Revenue from ready-mix concrete in the East segment decreased ~~$8.3~~$7.1 million and ready-mix concrete volumes decreased 36.5% in the three months ended April 1, 2023, as compared to the same period in 2022, primarily due to our divestiture program. In the three months ended April 1, 2023, our ready-mix concrete average sales prices increased 8.6%.

Revenue from asphalt decreased $0.9 million in the three months ended April ~~2, 2022, as~~1, 2023, when compared to the same period in ~~2021, as our realized price increases of 8.9% were not enough to overcome a 32.5% volume decrease primarily~~2022. Asphalt pricing increased 20.4% in the three months ended April 1, 2023, due to ~~divestitures~~increases in liquid asphalt. Paving and ~~lower volumes in Kansas impacted by weather conditions.~~

~~Revenue from asphalt increased $0.4~~related service revenue decreased $4.5 million in the three months ended April 2, 2022, when compared to the same period in 2021. The increase was mainly attributable to higher volumes in Kentucky. Asphalt pricing increased 14.5% in the three months ended April 2, 2022, due to product mix and asphalt mix design. Paving and related service revenue decreased $7.1 million in the three months ended April 2, 2022,1, 2023, primarily due to ~~the items~~our divestitures noted above.

Prior to eliminations of intercompany transactions, the net effect of volume and pricing changes on gross revenue in the three months ended April ~~2, 2022~~1, 2023 was approximately ~~$(17.6)~~$(3.0) million and ~~$9.6~~$11.7 million, respectively.

Cement Segment


		Three months ended													Three months ended
($ in thousands)	($ in thousands)	April 2, 2022	April 3, 2021			Variance					($ in thousands)				April 1, 2023	April 2, 2022	Variance
Net revenue	Net revenue		$	46,225		$	40,669		$	5,556		13.7	%	Net revenue			$	54,117		$	46,225		$	7,892	17.1	%
Operating loss	Operating loss		(13,506)			(10,046)			(3,460)			(34.4)	%	Operating loss			(7,944)			(13,506)			5,562		41.2	%
Operating margin percentage	Operating margin percentage		(29.2)		%	(24.7)		%						Operating margin percentage			(14.7)		%	(29.2)		%
Adjusted EBITDA (1)	Adjusted EBITDA (1)		$	(5,819)		$	2,499		$	(8,318)		(332.9)	%	Adjusted EBITDA (1)			$	10		$	(5,819)		$	5,829	100.2	%
Adjusted EBITDA Margin (1)	Adjusted EBITDA Margin (1)		(12.6)		%	6.1		%						Adjusted EBITDA Margin (1)			0.0		%	(12.6)		%

Net revenue in the Cement segment increased ~~$5.6~~$7.9 million primarily due to an average price ~~increase~~increases of ~~10.1% coupled with increased organic cement volumes of 0.3%~~14.8% in the three months ended April 2, 2022. Our Green America Recycling facility, which provides alternative fuel for one of our plants, is now operational; however, the facility was not operational in the first quarter of 2021, after its prolonged shutdown due to an explosion in April 2020.

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1, 2023.

Operating loss ~~increased $3.5~~decreased $5.6 million during the three months ended April ~~2, 2022.~~1, 2023. In the first quarter of 2022, we had negative Adjusted EBITDA ~~decreased $8.3~~that had increased $5.8 million to nearly zero and consequently, our Adjusted EBITDA Margin ~~decreased~~increased to ~~(12.6)% from 6.1%~~zero in the three months ended April ~~2, 2022. In the first quarter~~1, 2023. Operating loss, Adjusted EBITDA and Adjusted EBITDA margin benefited from higher levels of ~~2022,~~average sales price and a greater contribution from 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 $4.3 million in business interruption insurance proceeds in the first quarter of 2021, which was recorded as other income.Green America Recycling facility.

Operating margin percentage for the three months ended April ~~2, 2022 decreased~~1, 2023 increased to ~~(29.2)~~(14.7)% from ~~(24.7)~~(29.2)%, from the comparable period a year ago. The ~~decreased~~increased operating margin for the three months ended April ~~2, 2022~~1, 2023 was primarily due to ~~increased levels~~increases in our average sales price targeted to exceed inflationary pressures and lower distribution costs related to the commissioning of ~~repair and maintenance costs, as well as the impact of selling more imported tons of~~our cement storage dome in 2022 than in 2021. We expect to import cement throughout the duration of 2022 to keep pace with demand. Production levels in the first three months of 2022 were less than the comparable period in 2021.Davenport, IA.

Gross revenue by product was as follows:

Three months ended
($ in thousands) April 2, 2022 April 3, 2021 Variance
Revenue by product*:
Cement $ 43,806 $ 39,703 $ 4,103 10.3 %
Other 2,419 966 1,453 150.4 %
Total revenue $ 46,225 $ 40,669 $ 5,556 13.7 %

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	Three months ended
($ in thousands)	April 1, 2023	April 2, 2022		Variance
Revenue by product*:
Cement		$	49,742	$	43,806	$	5,936	13.6	%
Other		4,375		2,419		1,956		80.9	%
Total revenue		$	54,117	$	46,225	$	7,892	17.1	%

*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 months ended April ~~2, 2022~~1, 2023 from the three months ended April ~~3, 2021~~2, 2022 were as follows:

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


	Three months ended
	Percentage Change in
		Volume		Pricing
Cement		(1.2)	%	14.8	%

Revenue from cement increased ~~$4.1~~$5.9 million in the three months ended April ~~2, 2022~~1, 2023, due to organic cement pricing gains of ~~10.1%~~14.8%, ~~supplemented~~partially offset by a volume ~~increase~~decreases of ~~0.3%~~1.2%.

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,~~2023, we filed a shelf registration statement with the SEC that will expire in January ~~2023.~~2026. 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 April ~~2, 2022,~~1, 2023, we had ~~$287.4~~$379.5 million in cash and cash equivalents and ~~$472.8~~$630.4 million of working capital compared to ~~$381.0~~$520.5 million and ~~$560.5~~$762.5 million, respectively, at ~~January 1,~~December 31, 2022. Working capital is calculated as current assets less current liabilities. There were no restricted cash balances as of April ~~2, 2022~~1, 2023 or December 31, 2022. In January ~~1, 2022.~~2023, we amended our senior secured revolving credit facility, increasing the total availability to $395.0 million and extending the maturity date to January 2028. We had no outstanding borrowings on our senior secured revolving credit facility, which had borrowing capacity of ~~$324.6~~$373.9 million as of April ~~2, 2022,~~1, 2023, which is net of ~~$20.4~~$21.1 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~~fiscal year 2022, we repurchased ~~1.5~~3.4 million shares of Class A common stock for ~~$47.5~~$101.0 million. No repurchases were made during the fiscal quarter ended April 1, 2023. As of April ~~2, 2022,~~1, 2023, approximately ~~$202.5~~$149.0 million remained available for share repurchases under the share repurchase program.

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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 April ~~2, 2022~~1, 2023 and ~~January 1,~~December 31, 2022, our long-term borrowings totaled ~~$1.6~~$1.5 billion and $1.5 billion, respectively, for which we incurred $24.3 million and $17.7 million of interest expense for the three months ended April 1, 2023 and April 2, 2022, ~~and $21.2 million for the three months ended April 3, 2021.~~respectively. 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 April ~~2, 2022.~~1, 2023.

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

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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 April ~~2, 2022,~~1, 2023, we were in compliance with all debt covenants. At April 2,1, 2023 and December 31, 2022, $1.5 billion and ~~January 1, 2022, $1.6~~$1.5 billion, respectively, of total debt was outstanding under our respective debt agreements. Due to our ongoing divestiture program, prepayments of the term loan may be required.

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 three months ended April ~~2, 2022~~1, 2023 and April ~~3, 2021:~~2, 2022:


		Summit Inc.					Summit Inc.
($ in thousands)	($ in thousands)	April 2, 2022		April 3, 2021		($ in thousands)	April 1, 2023		April 2, 2022
Net cash provided by (used in):	Net cash provided by (used in):					Net cash provided by (used in):
Operating activities	Operating activities	$	(16,713)	$	(21,318)	Operating activities	$	335	$	(16,713)
Investing activities	Investing activities	(9,371)		(34,500)		Investing activities	(118,329)		(9,371)
Financing activities	Financing activities	(67,662)		(2,762)		Financing activities	(23,058)		(67,662)

Operating activities

During the three months ended April ~~2, 2022,~~1, 2023, cash ~~used in~~provided by operating activities was ~~$16.7~~$0.3 million primarily as a result of:

•Net loss of ~~$34.8~~$31.2 million, decreased by non-cash expenses, including ~~$54.8~~$53.9 million of depreciation, depletion, amortization and accretion expense and ~~$5.4~~$4.7 million of share-based compensation, offset by the net gain on asset and business ~~disposals~~divestitures of ~~$15.7~~$0.9 million.

•Billed and unbilled accounts receivable decreased by ~~$29.4~~$12.5 million in the first three months of 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.

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

~~During the three months ended April 3, 2021, cash used in operating activities was $21.3 million primarily as a result of:~~

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

•~~Billed and unbilled accounts receivable increased by $3.5 million in the first three months of 2021~~2023 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 ~~$29.5~~$38.0 million of interest payments in the three months ended April ~~3, 2021.~~1, 2023.

During the three months ended April 2, 2022, cash used in operating activities was $16.7 million primarily as a result of:

•Net loss of $34.8 million, decreased by non-cash expenses, including $54.8 million of depreciation, depletion, amortization and accretion expense and $5.4 million of share-based compensation, offset by the net gain on asset and business disposals of $15.7 million.

•Billed and unbilled accounts receivable decreased by $29.4 million in the first three months of 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.

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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.

•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 $31.8 million of interest payments in the three months ended April 2, 2022.

Investing activities

During the three months ended April 1, 2023, cash used for investing activities was $118.3 million, of which $63.6 million was invested in capital expenditures and $55.5 million was used for a purchase of a business in our West segment, and was partially offset by $1.8 million of proceeds from asset sales.

During the three months ended April 2, 2022, cash used for investing activities was $9.4 million, of which $57.8 million was invested in capital expenditures, which was partially offset by $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.

Financing activities

During the three months ended April ~~3, 2021,~~1, 2023, cash used ~~for investing~~in financing activities was ~~$34.5~~$23.1 million. We made $4.4 million of ~~which $69.8~~payments on debt, $11.4 million ~~was invested in capital expenditures, which was partially offset by $2.7~~payments on acquisition-related liabilities and used $5.7 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~~on shares redeemed to settle taxes on restricted stock units.

During the three months ended 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 $2.8 million. We received $15.9 million of proceeds from stock option exercises, which was offset by $8.1 million payments on acquisition-related liabilities and $10.2 million of payments on debt.

Cash paid for capital expenditures

We paid cash of approximately ~~$57.8~~$63.6 million in capital expenditures in the three months ended April ~~2, 2022~~1, 2023 compared to ~~$69.8~~$57.8 million in the three months ended April ~~3, 2021.~~2, 2022.

We currently estimate that we will invest between ~~$270~~$220 million to ~~$290~~$240 million inclusive of spend associated with greenfield projects. 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 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

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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 April ~~2, 2022,~~1, 2023, we had accrued ~~$326.5~~$327.8 million as TRA liability in our consolidated financial statements. ~~We do not expect significant payments on our~~Of the total TRA liability, $5.2 million is expected to ~~occur within~~be paid in the next twelve months.

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Based upon a ~~$30.81~~$28.49 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 April ~~2, 2022,~~1, 2023, and a contractually defined discount rate of ~~3.17%~~6.31%, 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 ~~$282.2~~$254.8 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 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 April ~~2, 2022,~~1, 2023, 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.

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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 Three months ended April 2, 2022
by Segment West East Cement Corporate Consolidated
($ in thousands)
Net income (loss) $ 11,901 $ 7,366 $ (8,431) $ (45,636) $ (34,800)
Interest (income) expense (1) (3,970) (3,451) (4,962) 32,532 20,149
Income tax expense (benefit) 176 (106) — (4,813) (4,743)
Depreciation, depletion and amortization 24,348 17,884 7,498 749 50,479
EBITDA $ 32,455 $ 21,693 $ (5,895) $ (17,168) $ 31,085
Accretion 227 411 76 — 714
Gain on sale of businesses — (14,205) — — (14,205)
Non-cash compensation — — — 5,422 5,422
Other 10 237 — — 247
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

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Three months ended
Reconciliation of Operating Loss to Adjusted Cash Gross Profit April 2, 2022 April 3, 2021
($ in thousands)
Operating loss $ (34,295) $ (25,059)
General and administrative expenses 51,924 51,642
Depreciation, depletion, amortization and accretion 51,193 56,336
Gain on sale of property, plant and equipment (1,255) (1,769)
Adjusted Cash Gross Profit (exclusive of items shown separately) $ 67,567 $ 81,150
Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1) 17.2 % 20.4 %


Reconciliation of Net Income (Loss) to Adjusted EBITDA	Three months ended April 1, 2023
by Segment	West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income (loss)	$	8,922	$	5,938	$	(3,025)	$	(43,047)	$	(31,212)
Interest (income) expense	(3,331)		(2,762)		(4,963)		38,476		27,420
Income tax expense (benefit) (1)	739		—		—		(7,205)		(6,466)
Depreciation, depletion and amortization	26,123		15,097		7,980		988		50,188
EBITDA	$	32,453	$	18,273	$	(8)	$	(10,788)	$	39,930
Accretion	250		438		18		—		706
Loss on debt financings	—		—		—		493		493


Non-cash compensation	—		—		—		4,708		4,708
Other (2)	(25)		141		—		(4,752)		(4,636)
Adjusted EBITDA	$	32,678	$	18,852	$	10	$	(10,339)	$	41,201


Reconciliation of Net Income (Loss) to Adjusted EBITDA	Three months ended April 2, 2022
by Segment	West		East		Cement		Corporate		Consolidated
($ in thousands)
Net income (loss)	$	11,901	$	7,366	$	(8,431)	$	(45,636)	$	(34,800)
Interest (income) expense	(3,970)		(3,451)		(4,962)		32,532		20,149
Income tax expense (benefit) (1)	176		(106)		—		(4,813)		(4,743)
Depreciation, depletion and amortization	24,348		17,884		7,498		749		50,479
EBITDA	$	32,455	$	21,693	$	(5,895)	$	(17,168)	$	31,085
Accretion	227		411		76		—		714


Gain on sale of businesses	—		(14,205)		—		—		(14,205)
Non-cash compensation	—		—		—		5,422		5,422
Other	10		237		—		—		247
Adjusted EBITDA	$	32,692	$	8,136	$	(5,819)	$	(11,746)	$	23,263

(1)The reconciliation of net income (loss) to Adjusted EBITDA is based on the financial results of Summit Inc. and its subsidiaries, which was $6.0 million less than Summit LLC and its subsidiaries in the three months ended April 1, 2023, and $11.6 million less in three months ended April 2, 2022, due to TRA expense and income tax expense which are obligations of Summit Holdings and Summit Inc. and are thus excluded from Summit LLC’s consolidated net income.

(2)Consists primarily of interest income earned on cash balances.


Reconciliation of Working Capital	April 1, 2023		December 31, 2022
($ in thousands)
Total current assets	$	890,890	$	1,018,376
Less total current liabilities	(260,526)		(255,847)
Working capital	$	630,364	$	762,529


	Three months ended
Reconciliation of Operating Loss to Adjusted Cash Gross Profit		April 1, 2023			April 2, 2022
($ in thousands)
Operating loss		$	(15,475)		$	(34,295)
General and administrative expenses		46,362			51,924
Depreciation, depletion, amortization and accretion		50,894			51,193
Gain on sale of property, plant and equipment		(430)			(1,255)
Adjusted Cash Gross Profit (exclusive of items shown separately)		$	81,351		$	67,567
Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1)		20.0		%	17.2		%

(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

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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,~~16, 2023, 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.

and Summit ~~Inc. maintains~~LLC maintain 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 and 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 Inc.’s and Summit LLC'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 and Summit LLC’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 April ~~2, 2022.~~1, 2023. Based upon that evaluation, Summit Inc.’s ~~Chief Executive Officer~~ and ~~Chief Financial Officer concluded that, as of April 2, 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

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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 April 2, 2022. Based upon that evaluation, Summit LLC’s Chief Executive Officer and Chief Financial Officer concluded that, as of April ~~2, 2022,~~1, 2023, Summit Inc.’s and 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.~~

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~~their last fiscal quarter that has materially affected, or is reasonably likely to materially affect, ~~Summit LLC’s~~their internal control over financial reporting.

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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

~~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.~~None.

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.~~

None.

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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))
10.1			Offer letter, dated as of February 23, 2023, by and between Summit Materials, LLC and Scott Anderson (incorporated by reference to Exhibit 10.1 to Summit Materials, Inc.'s Current Report on Form 8-K filed on March 1, 2023 (File No. 001-36783))
10.2*			Participation Notice and Agreement under Summit Materials, Inc. Executive Severance Plan by and between Summit Materials, Inc. and Scott Anderson.
10.3*			Amendment to Participation Notice and Agreement under Summit Materials, Inc. Executive Severance Plan, dated as of March 1, 2023, by and between Summit Materials, Inc. and Anne P. Noonan.
10.4			Amendment No. 6, dated as of January 10, 2023, to the Amended and Restated Credit Agreement, dated as of July 17, 2015 (as amended by Amendment No. 1, dated as of January 19, 2017, Amendment No. 2, dated as of November 21, 2017, Amendment No. 3, dated as of May 22, 2018, Amendment No. 4, dated as of February 25, 2019 and Amendment No. 5, dated as of December 14, 2022), among Summit Materials, LLC, as the borrower, the guarantors party thereto, the several banks and other financial institutions or entities from time to time party thereto, Bank of America, N.A., as administrative agent, collateral agent, L/C issuer and swing line lender and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Registrants’ Current Report on Form 8-K, filed January 10, 2023).
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

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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 April ~~2, 2022,~~1, 2023, 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.

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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: May ~~5, 2022~~4, 2023	By:	/s/ Anne P. Noonan
		Anne P. Noonan
		Chief Executive Officer
		(Principal Executive Officer)

Date: May ~~5, 2022~~4, 2023	By:	/s/ ~~Brian J. Harris~~C. Scott Anderson
		~~Brian J. Harris~~C. Scott Anderson
		Chief Financial Officer
		(Principal Financial and Accounting Officer)


2022 (nine months)	$	2,830
2023	3,780
2024	3,754
2025	3,710
2026	3,661
2027	3,649
Thereafter	45,631
Total	$	67,015


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


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