1Q17 Results Overview Investor Presentation May 3, 2017
Legal Disclaimer Forward-Looking Statements This presentation contains “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. Any and all statements made relating to the macroeconomic outlook for our markets, potential acquisition activity, our estimated and projected earnings, margins, costs, expenditures, cash flows, sales volumes and financial results are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those expected. 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 impact 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 achieved. 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 our Annual Report on Form 10-K filed with the SEC on February 28, 2017. Such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. 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 otherwise required by law. Non-GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures, such as Adjusted EBITDA, Further Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted EPS, Gross Profit, Net Debt, Net Leverage and Free Cash Flow designed to complement the financial information presented in accordance with U.S. GAAP because management believes such measures are useful to investors. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with GAAP. Please refer to the appendix of this presentation for a reconciliation of the historical non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP. Reconciliations of the non-GAAP measures used in this presentation are included in the tables attached to the appendix, to the extent available without unreasonable effort. 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. 1
Conference Call Agenda Introduction Noel Ryan, IR Business Update Tom Hill, CEO Financial Update Brian Harris, CFO Conclusion & Outlook Tom Hill, CEO Q&A 2
Business Update Tom Hill, CEO 3
Executive Summary 1Q17 Results | 2017 Outlook First Quarter 2017 | Results – Net Revenue increased 24.5% y/y to $259.0 million – Gross Profit increased 29.3% y/y to $66.7 million – LTM Gross Margin increased 240 bps to 37.0% – Adjusted EBITDA increased 62.1% y/y to $13.6 million – LTM Adjusted EBITDA Margin increased 200 bps to 24.5% (1) – Completed six acquisitions YTD 2017 for a combined total of $180 million (2,3) Full-Year 2017 | Outlook – Raising FY17 Adjusted EBITDA guidance to a range of $430 million to $445 million – Anticipate positive organic growth in materials sales volumes and avg. selling prices for FY17 – Anticipate closing on $40 million to $60 million of acquired EBITDA for FY17 – Anticipate net leverage at approximately 3.0x by year-end 2017 – Raising FY17 gross CAPEX guidance by $5 million to a range of $140 million to $160 million (1) Adjusted EBITDA margin defined as Adjusted EBITDA divided by net revenue (2) Acquired companies include Everist Materials, Razorback Concrete, Hannah’s Bend Aggregates, Carolina Sand, Winvan Paving and Sandidge Concrete (3) As of May 3, 2017 4
Key Financial Metrics Growth In Net Revenue, Gross Profit, Adjusted EBITDA Gross Profit ($MM) Net Revenue ($MM) & Margin (%) (1) $1,539.3 37.0% $1,322.9 34.6% $569.4 $457.9 25.8% 24.8% $259.0 $208.0 $66.7 $51.6 1Q16 1Q17 LTM 1Q16 LTM 1Q17 1Q16 1Q17 LTM 1Q16 LTM 1Q17 Adjusted EBITDA ($MM) & Margin (%) Adjusted Net Income/Loss ($MM) (2) 24.5% $85.9 $81.1 22.5% $376.6 $297.3 5.3% 4.0% $13.6 -$42.5 $8.4 -$54.8 1Q16 1Q17 LTM 1Q16 LTM 1Q17 1Q16 1Q17 LTM 1Q16 LTM 1Q17 (1) Gross profit margin defined as gross profit divided by net revenue (2) Adjusted EBITDA margin defined as Adjusted EBITDA divided by net revenue 5
Price and Volume Analysis Y/Y Organic Growth In Materials Price and Volume Average Selling Price, Excluding Acquisitions Average Selling Price, Including Acquisitions (y/y % change) (y/y % change) Aggregates Cement Aggregates Cement 8.6% 9.4% 7.3% 6.7% 6.3% 5.4% 2.9% Sales Volume, Excluding Acquisitions Sales Volume, Including Acquisitions (y/y % change) (y/y % change) Ready-Mix Ready-Mix Aggregates Cement Asphalt Aggregates Cement Asphalt Concrete Concrete 142.7% 64.5% 66.8% 27.5% 17.6% 18.9% 14.4% 6.0% 6.3% 14.3% 0.6% 10.0% -11.4% -26.7% -29.4% 1Q17 1Q16 6
Gross Margin Scorecard Sustained Y/Y Growth In Materials Margins Aggregates Business Cement Segment Gross Margin (%) Gross Margin (%) 62.0% 59.4% 45.2% 43.6% 43.1% 42.9% 14.3% 12.8% 1Q16 1Q17 2015 2016 1Q16 1Q17 2015 2016 Products Business Services Business Gross Margin (%) Gross Margin (%) 28.0% 26.6% 26.5% 24.7% 23.1% 21.7% 21.2% 8.4% 1Q16 1Q17 2015 2016 1Q16 1Q17 2015 2016 7
Positive Demographic Trends In Key Markets SUM’s Top 5 States Outperform National Averages Single Family Housing Starts in SUM’s Top 5 State Markets 40% Below Prior Peak AND Below 30-Year Average (1,2) 300,000 250,000 200,000 30-Year Average 150,000 100,000 50,000 Unemployment in SUM’s Top 5 State Markets Below National Average 29 of The Last 30 Years (1,2) 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% Unemployment Rate - SUM's Top 5 States Unemployment Rate - National (1) Source: Moody’s Analytics, U.S. Department of Labor (BLS) (2) States include Texas, Missouri, Utah, Kansas and Virginia 8
New Residential Cycle Emerging in Texas Unsold Home Inventories Declining, Permits Higher Number of Unsold Finished Homes Per Community Texas New Home Inventories Declined by 25% Y/Y in March 2017 (1) 1.69 United States 1.53 2.38 Texas 1.79 Mar-16 Mar-17 LTM Percent Change In Single-Family Home Permits By Key Texas Markets Austin Market Experiencing Sharp Recovery, Houston Market Stabilizing 23% -1% -3% -6% Austin Houston LTM Thru Mar-16 LTM Thru Mar-17 (1) Source: JBREC Survey, March 2017. Survey results comprise 20% of new home sales in the U.S. Survey participants oversee 3,000+ communities across more than 70 metro regions. Publicly traded builders account for 31% of responses. 9
Long-Term Funding Drives Infrastructure Spending SUM Well-Positioned To Capitalize On Funding Growth FAST Act Provides More Than $225 Billion in Federal Highway Program Funding Thru 2020 (1) $47.1 $46.0 $45.0 $44.0 $43.1 $41.0 2015 2016 2017 2018 2019 2020 The FAST Act Expected To Drive Multi- Year Infrastructure Spending Growth In SUM’s State Markets (1) SUM’s Top Five State Markets Expected To Receive a combined SUM State Markets Expected To Receive 40% of FAST Act Highway ~$30 billion of FAST Act Highway Funding (2016-2020) Funding, or More Than $80 billion (2016-2020) Missouri Kansas Utah Texas Virginia $2.0 $18.3 $5.4 $5.0 $1.8 billion billion billion billion billion 2.4% 1.0% 1.0% 8.8% 2.6% of total of total of total of total of total (1) Source: American Road & Transportation Builders Association (2016) – denotes highway program funding under the FAST Act 10
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