Summit Materials, Inc. Reports Fourth Quarter and Full Year 2018 Results

– Net Revenue Growth of 9.0% in Year Ended December 29, 2018,
Supported By Acquisitions

– Announced 2019 Adjusted EBITDA Guidance Range For The Full-Year
2019 at $430 – $470 million

DENVER–(BUSINESS WIRE)–Summit Materials, Inc. (NYSE: SUM, “Summit” or the “Company”), a leading
vertically integrated construction materials company, today announced
results for the fourth quarter and full year 2018.

For the three months ended December 29, 2018, the Company reported net
loss attributable to Summit Inc. of $(19.2) million, or $(0.17) per
basic share, compared to net income attributable to Summit Inc. of $43.0
million, or $0.39 per basic share in the comparable prior year
period. Summit reported adjusted diluted net loss of $(18.6) million, or
$(0.16) per adjusted diluted share as compared to adjusted diluted net
income of $52.1 million, or $0.46 per adjusted diluted share in the
prior year period.

For the year ended December 29, 2018, the Company reported net income
attributable to Summit Inc. of $33.9 million, or $0.30 per basic share,
compared to net income attributable to Summit Inc. of $121.8 million, or
$1.12 per basic share in the comparable prior year period. Summit
reported adjusted diluted net income of $17.4 million, or $0.15 per
adjusted diluted share as compared to adjusted diluted net income of
$104.9 million, or $0.93 per adjusted diluted share in the prior year
period.

Summit’s net revenue increased 1.0% in the fourth quarter of 2018
compared to the comparable 2017 period, while net income and Adjusted
EBITDA decreased in 2018 as compared to 2017, as a result of the
increases in our input costs which exceeded its revenue gains. Summit’s
net revenue increased 9.0% in the year ended December 29, 2018 as
compared to 2017, primarily due to acquisitions, offset by decreases
caused by less favorable weather conditions in 2018. Net income and
Adjusted EBITDA for the full year 2018 were also lower than in 2017 due
to the same factors that impacted our quarterly results. Tom Hill, CEO
of Summit Materials, stated “although we continued to face input cost
headwinds in the fourth quarter, we were very pleased to see our organic
average sales prices for aggregates increased by 6.5% in the fourth
quarter as compared to a year ago. We have also announced our cement
price increases for 2019 which will go into effect in the next few
months. We continue to believe end market fundamentals remain intact for
the construction industry, as well as cement specifically, going into
2019.” Summit noted that according to the USGS, aggregates pricing has
increased in 70 of the last 75 years, with average price growth in the
low single digits. Further the PCA has reported that cement consumption
is still below long-term trend lines, which we believe suggests room for
demand expansion in 2019. Hill commented, “we believe these long term
industry trends support our expectation for improved average sales
prices in 2019.”

Summit also announced its 2019 Adjusted EBITDA guidance, as well as
guidance regarding capital expenditures. Hill continued “as we enter
2019, we’re pleased to announce Adjusted EBITDA guidance of
approximately $430 million to $470 million for 2019.”

“Underlying demand conditions in most of our markets remain favorable
and are expected to remain so into 2019,” continued Hill. In Summit’s
public markets, state transportation funding measures in Texas, coupled
with steady increases in federal subsidies, are contributing to
increased lettings activity. Single family housing starts and permits
remain well below peak levels in Summit’s major markets.

During 2018, Summit completed 13 acquisitions for total invested capital
of $300 million. Across these 13 transactions, Summit added more than
400 million tons of aggregates reserves to its portfolio.

Brian Harris, CFO of Summit Materials, stated “our 2019 Adjusted EBITDA
guidance reflects an increase from our 2018 results, and we also expect
to reduce the level of capital expenditures to approximately $160
million to $175 million, which we believe is more reflective of levels
to be incurred in future years.” Summit expects to remain disciplined
and selective on future acquisitions. As such, Summit expects to
generate increased levels of cash flow from operations less capital
expenditures in 2019 as compared to 2018, which we expect will allow us
to reduce our leverage ratio by the end of 2019.

Full-Year 2018 | Results by Line of Business

Aggregates Business: Aggregates net revenues increased by 19.3%
to $373.8 million during 2018, when compared to the prior year
period. Aggregates adjusted cash gross profit margin declined to 59.4%
in 2018, compared to 65.3% in 2017 due to higher variable costs. Organic
aggregates sales volumes decreased 0.1% in 2018, as compared to
2017. Summit had growth in organic aggregates sales volumes in the West
Region, which were more than offset by a decline in organic aggregates
sales volumes in the East Region. Organic average selling prices on
aggregates increased 3.3% in 2018 due to improvements in prices within
both the West and East segments during the year.

Cement Business: Cement segment net revenues declined 7.6%
to $280.8 million during 2018, when compared to 2017. Cement adjusted
cash gross profit margin decreased to 44.3% in 2018, compared to 47.1%
in 2017, as productivity gains and a 0.6% increase in average sales
prices were offset by a higher freight, storage and demurrage costs
related to weather-affected cement inventories. Organic sales volume of
cement declined 8.6% in 2018, when compared to 2017, due to high levels
of precipitation that disrupted project work during the year, as well as
increased competition.

Products Business: Net revenues increased 13.2% to $967.5 million
during 2018, when compared to 2017. Products adjusted cash gross profit
margin declined to 21.1% in 2018, versus 24.6% in the 2017, as the
increases in labor, raw materials and transportation costs exceeded
increases in our average sales prices. Organic sales volumes of
ready-mix concrete increased 0.2% in 2018, while organic average selling
prices increased 2.0% as compared to 2017. Organic sales volumes of
asphalt decreased 0.4% in 2018, while organic average selling prices
increased 2.4% during 2017.

Fourth Quarter 2018 | Results by Line of
Business

Aggregates Business: Aggregates net revenues increased by 20.9%
to $93.1 million in the fourth quarter 2018, when compared to the prior
year period. Aggregates adjusted cash gross profit margin declined to
54.8% in the fourth quarter 2018, compared to 70.5% in the prior year
period, due to higher variable costs. Organic aggregates sales volumes
decreased 1.9% in the fourth quarter 2018, when compared to the
prior-year period. Organic average selling prices on aggregates
increased 6.5% in the fourth quarter 2018 due to improvements in prices
within both the West and East segments during the period.

Cement Business: Cement segment net revenues declined 9.5%
to $67.4 million in the fourth quarter 2018, when compared to the
prior-year period. Cement adjusted cash gross profit margin decreased to
46.4% in the fourth quarter, compared to 49.9% in the prior-year period,
as margins were impacted by the same factors noted above. Organic sales
volume of cement declined 10.1% in the fourth quarter, when compared to
the prior year period, due to high levels of precipitation and cold
weather that disrupted project work during the quarter, as well as
increased competition. Organic average selling prices on cement
increased 0.1% in the fourth quarter, when compared to the prior year
period.

Products Business: Net revenues increased 0.1% to $216.1 million
in the fourth quarter 2018, when compared to the prior year period.
Products adjusted cash gross profit margin declined to 21.6% in the
fourth quarter, versus 23.7% in the prior year period, as the increases
in labor, raw materials and transportation costs exceeded increases in
our average sales prices. Organic sales volumes of ready-mix concrete
decreased 4.8% in the fourth quarter, while organic average selling
prices decreased 0.7% as compared to the prior year period. Organic
sales volumes of asphalt decreased 3.0% in the fourth quarter, while
organic average selling prices increased 6.4%, over the same period in
2017.

Full-Year 2018 | Results By Reporting Segment

Net revenue increased by 9.0% to $1.9 billion in 2018, versus $1.8
billion in 2017. The improvement in net revenue was attributable to a
small amount of organic growth and primarily acquisition-related
contributions in the East and West segments, offset by a decline in the
Cement segment. The Company reported operating income of $162.5 million
in 2018, compared to $220.9 million in the prior year. Adjusted EBITDA
was $406.3 million in 2018 compared to $435.8 million in 2017.

West Segment: The West Segment reported operating income of
$92.1 million in 2018, compared to $130.3 million in 2017. Adjusted
EBITDA decreased to $189.0 million in 2018, compared to $203.6 million
in 2017. The decreases in West Segment operating income and Adjusted
EBITDA were primarily attributable to increases in labor and liquid
asphalt costs and low margin construction projects, partially offset by
increases in average selling prices on aggregates and ready-mix
concrete. Aggregates revenue in 2018 increased 14.2% over 2017 as a
result of contributions from acquisitions, a 0.8% increase in organic
volumes and a 4.2% increase organic average sales prices. Ready-mix
concrete revenue in 2018 increased 23.5% over 2017, as a result of
contributions from acquisitions, along with a 2.7% increase in organic
volumes and a 2.4% increase in organic average sales prices. Asphalt
revenue also increased by 0.1% in 2018, as contributions from our
acquisitions exceeded a 0.4% decrease in volumes and a 1.4% decrease in
average sales price.

East Segment: The East Segment reported operating income of
$59.6 million in 2018, compared to $67.7 million in 2017. Adjusted
EBITDA decreased to $138.0 million in 2018, compared to $139.1 million
in 2017. The decrease in East Segment operating income was mainly
attributable to increases in net revenue from our acquisition program
and increases in average selling prices of aggregates, ready-mix
concrete and asphalt, partially offset by increased labor and
hydrocarbon costs, as well as decreases in ready-mix volumes. Aggregates
revenue increased 20.5%, primarily due to increases resulting from our
acquisition program as well as an increase in organic average sales
prices of 2.7%, offset by a decline in organic sales volumes of 0.9%.
Ready-mix concrete revenue increased 4.9% as a result of our acquisition
program, partially offset by a decline in organic sales volumes of 6.6%.
Asphalt revenue increased 14.2% primarily as a result of acquisition
related volumes and increased average sales prices, partially offset by
a decrease in organic sales volumes.

Cement Segment: The Cement Segment reported operating income of
$75.8 million in 2018, compared to $89.4 million in 2017. Adjusted
EBITDA declined to $111.4 million in 2018, compared to $127.5 million in
2017. The Company experienced slightly higher organic average selling
prices as well as declines in organic sales volumes during 2018 due to
high levels of precipitation in the Company’s Mississippi River markets.

Fourth Quarter 2018 | Results By Reporting
Segment

Net revenue increased by 1.0% to $445.1 million in the fourth quarter
2018, versus $440.6 million in the prior year period. The improvement in
net revenue was primarily attributable to both organic and
acquisition-related contributions in the East and West segments, offset
by a decline in the Cement segment. The Company reported operating
income of $28.5 million in the fourth quarter 2018, compared to $57.3
million in the prior year period. Adjusted EBITDA was $93.4 million in
the fourth quarter 2018, compared to $114.2 million in the prior year
period.

West Segment: The West Segment reported operating income of
$11.6 million in the fourth quarter 2018, compared to $30.2 million in
the prior year period. Adjusted EBITDA decreased to $37.7 million in the
third quarter 2018, compared to $50.7 million in the prior year
period. The quarterly declines in West Segment operating income and
Adjusted EBITDA were primarily attributable to increased labor and
hydrocarbon costs, partially offset by increases in average selling
prices on aggregates and ready-mix concrete. Aggregates revenue in the
fourth quarter increased 11.0% over the prior year as a result of
contributions from acquisitions, a 0.9% decrease in organic volumes and
a 5.4% increase in organic average sales prices. Ready-mix concrete
revenue in the fourth quarter 2018 increased 10.0% over the prior year
period, as a result of contributions from acquisitions, partially offset
by a 1.4% and 1.9% decrease in organic volumes and organic average sales
prices, respectively. Asphalt revenue decreased by 1.5% in the fourth
quarter, resulting from a 6.6% decrease in volumes, partially offset by
a 0.9% increase in average sales price.

East Segment: The East Segment reported operating income of
$15.5 million in the fourth quarter 2018, compared to $21.2 million in
the prior year period. Adjusted EBITDA decreased to $37.5 million in the
third quarter 2018, compared to $39.6 million in the prior year
period. The quarterly decline in East Segment operating income was
primarily attributable to increases in costs of revenue and general and
administrative expenses. The quarterly improvement in East Segment
Adjusted EBITDA was mainly attributable to increases in net revenue from
our acquisition program, increases in average selling prices of
aggregates, ready-mix concrete and asphalt, partially offset increased
labor and hydrocarbon costs, as well as decreases in ready-mix volumes.
Aggregates revenue increased 25.4%, primarily due to increases resulting
from our acquisition program as well as a 7.5% increase in organic
average sales prices, partially offset by a 3.0% decline in organic
sales volumes. Ready-mix concrete revenue decreased 10.9% as a result of
lower sales volumes, partially offset by an increase in organic average
sales prices. Asphalt revenue increased 26.8% primarily as a result of a
3.0% and 17.0% increase in organic volumes and organic average sales
prices, respectively.

Cement Segment: The Cement Segment reported operating income of
$19.3 million in the fourth quarter 2018, compared to $25.8 million in
the prior year period. Adjusted EBITDA declined to $28.8 million in the
fourth quarter 2018, compared to $34.2 million in the prior year
period. The Company experienced slightly higher organic average selling
prices as well as declines in organic sales volumes during fourth
quarter 2018 due to high levels of precipitation in the Company’s
Mississippi River markets and price-driven competitive pressures.

Acquisitions and Divestitures

During 2018, the Company completed 13 acquisitions with a total
investment of approximately $300 million.

Liquidity and Capital Resources

As of December 29, 2018, the Company had cash on hand of $128.5 million
and borrowing capacity under its revolving credit facility of $219.6
million. The borrowing capacity on the revolving credit facility is
fully available to the Company within the terms and covenant
requirements of its credit agreement. As of December 29, 2018, the
Company had $1.8 billion in debt outstanding.

Financial Outlook

For the full-year 2019, the Company estimates its Adjusted EBITDA to be
in the range of $430 million to $470 million. For the full-year 2019,
the Company estimates its capital expenditures to be in the range of
$160 million to $175 million.

Webcast and Conference Call Information

Summit Materials will conduct a conference call today at 11:00 a.m.
eastern time (9:00 a.m. mountain time) to review the Company’s fourth
quarter and full year 2018 financial results. A webcast of the
conference call and accompanying presentation materials will be
available in the Investors section of Summit’s website
at investors.summit-materials.com. To listen to a live broadcast, go to
the site at least 15 minutes prior to the scheduled start time in order
to register, download, and install any necessary audio software.

To participate in the live teleconference:
Domestic Live:									1-877-407-0784
International Live:									1-201-689-8560
Conference ID:									57511368
To listen to a replay of the teleconference, which will be available through March 6, 2019:
Domestic Replay:									1-844-512-2921
International Replay:									1-412-317-6671
Conference ID:									13686788

About Summit Materials

Summit Materials is a leading vertically integrated materials-based
company that supplies aggregates, cement, ready-mix concrete and asphalt
in the United States and British Columbia, Canada. Summit is a
geographically diverse, materials-based business of scale that offers
customers a single-source provider of construction materials and related
downstream products in the public infrastructure, residential and
nonresidential, and end markets. Summit has a strong track record of
successful acquisitions since its founding and continues to pursue
growth opportunities in new and existing markets. For more information
about Summit Materials, please visit www.summit-materials.com.

Non-GAAP Financial Measures

The Securities and Exchange Commission (“SEC”) regulates the use of
“non-GAAP financial measures,” such as Adjusted Net Income (Loss),
Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted
Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow,
Net Leverage and Net Debt which are derived on the basis of
methodologies other than in accordance with U.S. generally accepted
accounting principles (“U.S. GAAP”). We have provided these measures
because, among other things, we believe that they provide investors with
additional information to measure our performance, evaluate our ability
to service our debt and evaluate certain flexibility under our
restrictive covenants. Our Adjusted Net Income (Loss), Adjusted Diluted
EPS, Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA Margin,
Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash
Flow, Net Leverage and Net Debt may vary from the use of such terms by
others and should not be considered as alternatives to or more important
than net income (loss), operating income (loss), revenue or any other
performance measures derived in accordance with U.S. GAAP as measures of
operating performance or to cash flows as measures of liquidity.

Adjusted EBITDA, Adjusted EBITDA Margin, and other non-GAAP measures
have important limitations as analytical tools, and you should not
consider them in isolation or as substitutes for analysis of our results
as reported under U.S. GAAP. Some of the limitations of Adjusted EBITDA
are that these measures do not reflect: (i) our cash expenditures or
future requirements for capital expenditures or contractual commitments;
(ii) changes in, or cash requirements for, our working capital needs;
(iii) interest expense or cash requirements necessary to service
interest and principal payments on our debt; and (iv) income tax
payments we are required to make. Because of these limitations, we rely
primarily on our U.S. GAAP results and use Adjusted EBITDA, Adjusted
EBITDA Margin and other non-GAAP measures on a supplemental basis.

Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA Margin,
Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Adjusted
Net Income (Loss), Adjusted Diluted EPS, Free Cash Flow, Net Leverage
and Net Debt reflect additional ways of viewing aspects of our business
that, when viewed with our GAAP results and the accompanying
reconciliations to U.S. GAAP financial measures included in the tables
attached to this press release, may provide a more complete
understanding of factors and trends affecting our business. We strongly
encourage investors to review our consolidated financial statements in
their entirety and not rely on any single financial
measure. Reconciliations of the non-GAAP measures used in this press
release are included in the attached tables. Because GAAP financial
measures on a forward-looking basis are not accessible, and reconciling
information is not available without unreasonable effort, we have not
provided reconciliations for forward-looking non-GAAP measures. For the
same reasons, we are unable to address the probable significance of the
unavailable information, which could be material to future results.

Cautionary Statement Regarding Forward-Looking
Statements

This press release includes “forward-looking statements” within the
meaning of the federal securities laws, which involve risks and
uncertainties. Forward-looking statements include all statements that do
not relate solely to historical or current facts, and you can identify
forward-looking statements because they contain words such as
“believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,”
“trends,” “plans,” “estimates,” “projects” or “anticipates” or similar
expressions that concern our strategy, plans, expectations or
intentions. All statements made relating to our estimated and projected
earnings, margins, costs, expenditures, cash flows, growth rates and
financial results are forward-looking statements. These forward-looking
statements are subject to risks, uncertainties and other factors that
may cause our actual results, performance or achievements to be
materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. We derive many
of our forward-looking statements from our operating budgets and
forecasts, which are based upon many detailed assumptions. While we
believe that our assumptions are reasonable, it is very difficult to
predict the effect of known factors, and, of course, it is impossible to
anticipate all factors that could affect our actual results. In light of
the significant uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be
regarded as a representation by us or any other person that the results
or conditions described in such statements or our objectives and plans
will be realized. Important factors could affect our results and could
cause results to differ materially from those expressed in our
forward-looking statements, including but not limited to the factors
discussed in the section entitled “Risk Factors” in Summit Inc.’s Annual
Report on Form 10-K for the fiscal year ended December 30, 2017 and
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2018, each as filed with the Securities and Exchange Commission (the
“SEC”), any factors discussed in the section entitled “Risk Factors” in
any of our subsequently filed SEC filings, including our Annual Report
on Form 10-K for the fiscal year ended December 29, 2018, which is
expected to be filed on or about the date of this press release, and the
following:

					•			our dependence on the construction industry and the strength of the local economies in which we operate;
					•			the cyclical nature of our business;
					•			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, 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;
					•			declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities and other state agencies;
					•			environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use;
					•			rising prices for commodities, labor and other production and delivery costs as a result of inflation 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;
					•			our substantial current level of indebtedness;
					•			our dependence on senior management and other key personnel;
					•			supply constraints or significant price fluctuations in electricity and the petroleum-based resources that we use, including diesel and liquid asphalt
					•			climate change and climate change legislation or regulations;
					•			unexpected operational difficulties;
					•			interruptions in our information technology systems and infrastructure; and
					•			potential labor disputes.

Contacts

Mr. Brian Harris
Executive Vice President and Chief Financial
Officer
Summit Materials, Inc.
brian.harris@summit-materials.com

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