In 2019, Summit Materials, Inc. benefitted from increased volumes and pricing, combined with strategic acquisitions and reduced capital expenditures. For the fourth quarter, Summit reported net income of $35.7 million, compared to a net loss of $19.2 in the fourth quarter of 2018. For the year end, its net income was $59.1 million, compared to $33.9 million in 2018.
While volumes and prices grew across all lines of business in 2019, aggregates contributed the largest proportion of incremental net revenue. Summit reported operating income of $213.6 million in 2019, compared to $162.5 million in 2018, a 31.4-percent increase.
“Sustained public sector demand coupled with improved pricing contributed to margin expansion in our aggregates and product lines of business late in the quarter, resulting in the highest fourth quarter EBITDA in the company’s history,” said CEO Tom Hill in a press release. “For the full year 2019, our aggregates business delivered strong results due in part to strong performance from our East Segment.”
For the year, aggregates net revenues increased 25.6 percent to $469.7 million when compared to the prior year. The increase is attributed to higher organic volume (up 9.5 percent) and selling price (up 6.5 percent), as well as the company’s acquisition program.
“Our focus on variable cost management intensified as 2019 progressed, and we looked to offset the impact of some operational changes with better efficiency,” Hill said. “This included our ongoing efforts to implement lean processes, labor cost management practices, and purchasing improvements.”
“We were disciplined and selective on acquisitions while generating increased cash flow from operations, which combined with lower capital expenditures enabled us to lower our leverage ratio,” added CFO Brian Harris.
Looking forward, Hill noted that Summit expects continued growth in public markets, fueled by new state gas taxes, strong demand for residential housing among entry-level buyers, and non-residential market demand for low-rise commercial development and windfarm work.
Summit Materials provided 2020 capital expenditure guidance of approximately $185 million to $205 million, which includes $65 million to $80 million estimated for greenfield projects.