Summit Materials Inc (NYSE: SUM) stock falls post second quarter update

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Summit Materials Inc (NYSE: SUM) stock fell over 2.6% on 22nd July, 2020 (as of 11:25 am GMT-4 ; Source: Google finance) after the company posted better than expected results for the second quarter of FY 20. As of June 27, 2020, the Company’s cash stood at $253.4 million and $1.9 billion in debt outstanding. The Company has reported net income attributable to Summit Inc. of $57.1 million, compared to net income attributable to Summit Inc. of $36.4 million in the comparable prior year period. The Company has $345 million revolving credit facility of $329 million, which is made available after consideration of committed letters of credit. For the six months ended June 27, 2020, the company generated cash flow provided by operations of $61.7 million while cash paid for capital equipment was $105.7 million.

SUM in the second quarter of FY 20 has reported the adjusted earnings per share of 50 cents, beating the analysts’ estimates for the adjusted earnings per share of 25 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 4.1 percent to $575.2 million in the second quarter of FY 20, beating the analysts’ estimates for revenue by 4.61%. The revenue grew as ready mix and aggregates contributed the largest proportion of incremental net revenue. The Company’s  operating income increased to $100.1 million in the second quarter 2020, compared to $80.4 million in the prior year. Summit’s operating margin expanded to 17.4% in the second quarter from 14.6% in the comparable prior year period on net revenue gains in excess of the cost of revenue, partially offset by increases in general and administrative expenses. Adjusted EBITDA grew by 14.1% in the second quarter to $160.2 million as compared to $140.5 million in 2019.

For the second quarter of FY 20, organic sales volumes rose 2.6% in aggregates, 3.2% in ready-mix concrete, and 10.0% in asphalt, respectively, and decreased (6.3)% in cement relative to the same period last year. Organic average selling prices in the second quarter of 2020 fell (0.2)% in aggregates, and grew 1.2% in cement, 5.5% in ready-mix concrete, and 2.3% in asphalt compared to the prior year period.

On the other hand, the company announced that Thomas W. Hill plans to step down from his role as President and Chief Executive Officer and as a member of the Board effective September 1, 2020. At that time, Anne Noonan will be appointed President and Chief Executive Officer and as a member of the Board.

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