Summit Materials Inc (SUM) 2016 Q1 法說會逐字稿

Greetings, and welcome to Summit Materials first-quarter 2016 earnings conference call.

(Operator Instructions)

As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to your host, Rodny Nacier, Investor Relations.

Good morning, and welcome to Summit Materials first-quarter earnings call. Today we are joined by Tom Hill, Chief Executive Officer, and Brian Harris, Chief Financial Officer. We issued a press release this morning detailing our first-quarter 2016 results, and published an updated supplemental workbook highlighting key financial and operating data which can be found in the investor section of our website at summit-materials.com. This call will be accompanied by our first-quarter presentation slides which are available by accessing the live webcast in the investor section of our website.

Turning to page 2. I would like to remind you that Management's remarks and answers to your questions on today's call may include forward-looking statements which by their nature are uncertain and outside of Summit Materials' control. Although these forward-looking statements are based on Management's current expectations and beliefs, actual results may differ in a material way.

For a discussion of some of the factors that could cause actual results to differ, please see the risk factors section of Summit Materials' annual report on form 10-K filed with the SEC on February 22, 2016. Additionally, you can find reconciliations of the non-GAAP financial measures discussed in today's call in this morning's earnings press release. With that I'll turn the call over to Tom.

Good morning. And thank you for joining our first-quarter 2016 earnings call. To start off today's call I will begin with a brief overview of our business followed by a review of our operating highlights for the quarter. Brian will then review some first-quarter financial metrics, followed by a question-and-answer session.

Turning to slide 4. With over 2.5 billion tons of well located reserves serving our aggregates and cement businesses, we are well-positioned to capitalize on the continued improvement in our markets. Demand is increasing across all three of our end markets: residential, nonresidential, and publicly funded infrastructure. Private residential and nonresidential starts remain well below peak levels and infrastructure end markets are poised to benefit from expanding federal and state funding. We believe we are in the early stages of this construction cycle, and that with our unique acquisition strategy we will benefit from scalable national operations and local entrepreneurial leadership.

Our successful integration and improvement of acquired businesses contributed to our impressive first quarter incremental margins of 86% in our aggregates operations. Our adjusted EBITDA improved 480 basis points in the quarter primarily on the strength of our resource-based materials businesses. On an LTM basis, this comprised 62% of our adjusted EBITDA.

Turning to slide 5, Summit began 2016 with a strong quarter. Our solid performance included a 19% increase in our revenue due to volume and prices increasing among most of our lines of business. As markets improve we continue to focus on our profit improvement strategies which has contributed to expanded margins. This momentum helps us improve our gross margin by 440 basis points to 25% for the quarter. Our operating leverage resulted in gross margins outpacing the increase in revenue. The larger proportion of activity for materials, coupled with lower energy costs, also contributed to this quarter's strong incremental margins.

Our adjusted EBITDA increased by $9.8 million in the quarter. This was the first positive EBITDA start to the year that we have had in our history. Our adjusted EBITDA margin improved 480 basis points to 4%. Our adjusted loss per share was $0.42, an improvement of $0.08 from the prior-year quarter. So far this year we have spent $39 million in capital expenditures on plant upgrades and rolling stock. We remain committed to investing in our business for the long term.

Turning some to slide 6. Since Summit's inception our strategy has been to develop significant scale by acquisition, both platform and bolt-on. To date we have completed 41 acquisitions. In the first quarter we successfully executed the strategy with the acquisitions of Boxley Materials Company in Virginia and American Materials Company in the Carolinas. These acquisitions allowed us to expand our presence in the attractive Mid-Atlantic area. I welcome all of AMC's and Boxley's employees to Summit.

Turning to slide 7. As you saw in this morning's announcement we recently closed on Sierra Ready Mix, our 41st acquisition. We look forward to working with our new team in Las Vegas and believe this company is a great fit with our existing operations in the West segment. The Sierra acquisition brings both a first-class Management Team and superb assets to Summit in the expanding Las Vegas market. This market is in the early stages of a cyclical recovery after a steep decline post the financial crisis. We believe there are also a number of bolt-on opportunities that would fit well with these new operations in Nevada.

Slide 8 outlines the outlook for highway market in our main states. In 2015 about 40% of Summit's revenue was derived from the public end market. In the US, approximately 50% of the highway spending is sourced federally with the other half state and local. The recent passage of the five-year highway bill, or FAST Act, in December of 2015 provides enhanced visibility for federal highway spending. In addition, many states have commenced initiatives to increase the funding for highways while others are in more preliminary stages. This effort is not uniform across all of our states, but the overall trend is positive.

In 2015 approximately 60% of our revenue came from residential and nonresidential construction. On the residential side, US housing starts were approximately $1.1 million in 2015. This is well below normalized levels of $1.5 million to $1.6 million. With population growth and expanding job markets, we believe housing starts will continue to show improvement for a number of years.

In Texas, despite lower oil prices, the residential outlook is still positive. Single-family residential permits are expected to increase by 9% in 2016. Specifically in Houston, residential demand has softened slightly. But in entry level homes in the west and southwest part of the city where we operate demand has remained steady. In Utah the residential market has been a standout with housing continuing to outpace the national average supported by a low unemployment rate of 3.6% versus the national average of 4.9%.

As for nonresidential, we primarily participate in light commercial, such as hotels and retail centers. This end use typically follows residential development. Kansas and Missouri have positive nonresidential outlooks supported by expanding job markets and increasing population trends. Commercial construction spending is expected to increase 23% and 4%, respectively, in these states.

Although we cannot control the pace of this recovery we remain focused on improving our pricing and reducing cost. This focus on internal improvements and the tailwinds from the construction cycle give us tremendous confidence going forward. Now I would like to turn the call over to Brian who will take us through our first-quarter financial metrics beginning on slide 10.

Thank you, Tom. We're off to a good start in 2016 with a continuation of the momentum we experienced in 2015. We reported an increase in net revenue of 19% to $208 million, and adjusted EBITDA improved $9.8 million to $8.4 million. To provide context, I'd like to walk you through some of the details and drivers behind these numbers.

In Q1 2016 prices increased across all lines of business on a reported and organic basis. Aggregates prices increased 9% in the first quarter, reflecting the benefit of successful price increases implemented over the past 18 months. In our combined cement operations in Davenport, Iowa, and Hannibal, Missouri, average cement prices increased 7% in the first quarter, mainly reflecting price increases put into effect in 2015. Additional cement price increases in several of our markets went into effect on April 1, 2016.

Ready-mixed concrete price growth was moderate, and asphalt pricing was lower than the prior quarter mainly reflecting lower liquid asphalt input costs and regional mix. This overall price momentum helped us achieve an incremental gross margin of approximately 48% for the quarter. Underlying volume growth was stronger overall and acquisitions contributed additional growth primarily in cement.

The Davenport acquisition, completed in July 2015, drove the significant increase in cement volume. Aggregates and ready-mix organic volumes grew in the single digits and were in line with expectations and enhanced by acquisitions. Asphalt volumes were lower in the quarter due to increased competition in Austin, Texas.

Moving on to slide 11. We were pleased to achieve aggregates incremental margins of 86% for the first quarter. Total gross profit increased approximately 44%. As a percentage of net revenue, gross margin in the first quarter expanded to 25% compared to 20% in the prior year.

We had a 910 basis point increase in the mix of our gross profit from higher margin materials during the first quarter due to our acquisition of the Davenport assets and recent aggregates based acquisitions. In products we achieved 410 basis points of gross margin expansion including the benefit of lower energy costs.

Adjusted EBITDA margin improved 480 basis points in Q1 2016, largely as a result of our ability to increase prices organically, integrate our acquisitions, and effectively manage our costs. A larger proportion of higher margin materials and product revenue assisted as well.

Moving on to our balance sheet and liquidity on slide 12. This quarter Summit raised $250 million of 8.5% senior notes due 2022. We used these proceeds to fund the acquisition of Boxley, replenish cash used for the acquisition of AMC, and to pay related fees.

We ended the quarter with a prudently levered balance sheet and ample capital resources to continue executing our strategic growth initiatives in a disciplined manner. We intend to remain methodical with our capital utilization with the long-term objective of reducing our leverage multiple through earnings growth.

With the 8.5% senior notes, our annualized interest expense is approximately $87 million on our long-term debt. At quarter end we had total outstanding net debt of $1.5 billion. Our cash balance was $92 million, and we had $210.6 million of availability on our revolving credit facility, which is net of $24 million of outstanding letters of credit. We ended the quarter with total net leverage of 4.5 times.

In Q1 2016, we spent $33 million on net CapEx on plant upgrades and rolling stock, compared to $15 million in the prior year. As a reminder, our first quarter is typically our seasonally lowest cash flow quarter.

Looking ahead to the remainder of 2016 on slide 13. Our business has been performing as anticipated and demand is improving in our markets. We are also optimistic about the impact from recent federal and state legislative acts.

We now expect our full-year 2016 adjusted EBITDA outlook to range from $350 million to $370 million. And by way of reminder, this increased range includes the successive period for AMC, Boxley, and Sierra completed in 2016. These three acquisitions exceeded our $30 million annualized EBITDA target including synergies.

However, we remain committed to growing our business through acquisitions in a disciplined manner. Our deal pipeline remains healthy and we are confident about our ability to grow and add value both organically and through acquisitions. The potential upside from any future acquisitions is excluded from our stated adjusted EBITDA guidance range due to the unknown timing of any future acquisitions. The impact of any future acquisitions will be incorporated as appropriate.

We continue to expect gross capital expenditures to be approximately $150 million to $170 million in 2016. This number includes maintenance CapEx and several profit improvement projects mainly in our aggregates facilities to improve efficiency and increase capacity. Over the long term we expect our CapEx to be 6% to 7% of net revenue composed of 70% maintenance and 30% investment spend. And with that review, I'd like to turn the call back to Tom for some closing remarks.

Thank you, Brian. In summary, we are off to a good start to the year with a strong first quarter. We continue to be committed to providing a safe working environment for our employees and being good corporate citizens in the local communities that we serve.

We are pleased with the progress we have made and excited about our future. We are now happy to take some of your questions. Operator, can you please open the lines to Q&A?

(Operator Instructions)

Rob Hansen with Deutsche Bank.

Thanks. So first question, I just wanted to confirm that the guidance raise was just for acquisitions? And secondly, if you think about your different end markets, you gave some good color there. If you could kind of rank what is seeing the most growth and the outlook and how that relates to your outlook for this year?

Yes, good morning Rob. I'll let Brian talk to the guidance range, and I'll talk to the end market. Brian?

The guidance range that we've increased it by $25 million at the bottom and the top is reflective (inaudible) of the acquisitions.

And then just on general end markets and demand, we have a backdrop where nationally we are seeing res, non-res, and public all increase with good, strong outlooks. But this being a very local business, what counts is what's happening on the ground. So I'll give you a little bit of color as far as some of the local demand trends.

We're seeing really good momentum and building momentum both in Utah and in British Columbia, and also in Texas highways are very strong with Prop 1 money having already being let, and Prop 7 money looking like it's going to let next year. So good momentum in those markets.

In the east we are seeing more steady -- lower but steady growth in Kansas, Kentucky, and Missouri with positive private markets offset a bit by some weakness in highways in Kansas and Kentucky. And then we are really seeing good underlying demand in our new mid-Atlantic platform in Virginia, North and South Carolina. And that really goes across all three of those end uses res, non-res, and highways.

On the cement side, where we service up and down the Mississippi from Minneapolis down to New Orleans, we are seeing just good solid demand. Again, probably mid-single-digits across all of the end uses and all of those markets. So good steady demand on the cement side. Is that what you were looking for, Rob?

Yes, Yes that's very helpful. The second thing I wanted to ask about was just the Sierra acquisition. I wanted to try to get a few more details. Was this a competitive bid or was this a situation where they came to you?

And then what's the aggregate reserves look like? And then just on the market share, I think you mentioned that it doesn't have any infrastructure exposure, so how does that -- I guess how are you getting to that market share calculation?

Sierra was not a competitive auction. And we were in contact with them for a while. It's a really nice, fine business. They have a big sand and gravel site to the south of Las Vegas and they cover the entire metro area from two ready-mix plants, one north and one south.

We tend -- we're not going to give any more detail on that really for competitive reasons. We just don't really -- on individual acquisitions we are really not going to give any more details than that.

Okay thanks. I'll hop back into queue.

Okay Rob. Cheers.

Jerry Revich with Goldman Sachs.

Good morning. This is actually Brandon Jaffe on behalf of Jerry. On aggregates pricing just to start, last year you put through sequential price increases over the course of the year. How would you think about the opportunity to do that this year?

As always it really is up to the local market to what pricing increases the market can take. And we do believe that when it's all said and done we're going to end up in the mid-single-digits price increase in aggs. I'll give you little flavor for what's been announced. So far in Kansas we've had price increases in the 4% to 5% range that went into effect in January. In Utah, 5% to 6% effective April 1.

We're seeing really good progress in Texas with high single low double digits price increases announced for mid-year. And this is on top of a double-digit price increase the end of last year, I think it was in September.

So we are seeing good progress, so it's sort of a continuation of the same trends we had last year. But the environment price increases is quite good on the aggregate side.

Okay. And can you talk about some of the pricing opportunities on your recently acquired businesses on prior acquisitions? You've been able to improve pricing by about 2% relatively quickly. How did that compare to what you're thinking regarding some of the recent deals you've made?

In the recent deals, which are Boxley, American Materials, and now Sierra, implementing our IT system and we are introducing basic pricing methodologies, whether it be tiered pricing or [next] best alternative. And it's probably early days, hard to say, but I'd be disappointed if we didn't see a continuation of being able to add value on the pricing side there in addition to whatever the market is going up.

So we are very optimistic about that, but really on those recent acquisitions it's just early days. We have seen success in the LeGrand and Lewis & Lewis deals that were done last year, and we expect the same in the more recent acquisitions.

Great. Thanks a lot.

Thank you.

Kathryn Thompson with Thompson Research Group.

Thank you for taking my questions today. First on your asphalt group, you mentioned in the prepared commentary a more competitive market in Austin which drove softer volumes. Could you just give a little bit more color on that and is it just purely a function of that Austin market and competitive dynamics, or were there any other externalities like weather that played a factor?

In Q1 weather did not play a factor. It was probably more normal in Q1. I can't say the same for April, by the way. But we had a new entrant who put up a couple of asphalt plants and certainly disrupted the market. We see that stabilizing over the next 12 months, but certainly impacted both volume and price in the Austin market.

To some degree that's been offset in Texas by a very strong highway market in northeast Texas and west Texas where we have a significant operation. But specifically in Austin it was just the impact of a new entrant.

And you're seeing similar trends -- would you see a dissipating trend as the year progresses or is it too early to call?

Probably too early to call, but we have a new Management Team in place in Austin and we are making very good progress in stabilizing that market.

Follow-up on cements. 6% [in place] in the quarter was driven by price increases last year but I would assume also just from Davenport in the mix. Could you perhaps break out how much was price increasing versus mix and maybe any additional color on the $12 per ton increase that was implemented in April? Thank you.

Yes, the price increases that were implemented varied from $12 down to $8. In general the price increases have held quite well. Most of them were effective April 1, so we still expect realization due to the April 1 implementation date in that $6 to $8 a ton range.

Great, and then one just housekeeping item, [poost] transactions that were listed today. Could you give us an annualized D&A running rate?

It's about $130 million, Kathryn.

Great. Thank you.

Paul Luther with Bank of America Merrill Lynch.

Good morning, Tom and Brian. Thanks for taking my questions.

Good morning.

I want to dive in a little bit more in terms of what you're seeing in terms of Texas. One of your competitors had some relatively sluggish aggregate shipments in the quarter and talked about Houston softness.

And you alluded to that briefly in your comments, and you do have a fair amount of residential Houston exposure. So I just wanted to get a sense maybe if we could drill down in terms of what you are seeing in terms of shipment growth and movement across the regions in Texas?

Yes, we do -- we have four businesses in Texas, the smallest is out in Odessa Midland and it's in the aggregates and ready-mix business and it certainly has seen oil related weakness. We are still doing okay there and volumes I think have stabilized, albeit at a lower level, but it's by far and away the smallest of our businesses.

The second is, which I've already talked a little bit about, is our Austin and our northeast Texas businesses which are in aggregates in asphalt, and primarily service the highway market. We're seeing very, very strong demand on the highway side especially in northeast and north Texas offset to some degree by I said a more competitive environment in Austin. And also in those markets, even though it's a smaller part of the business, we're seeing very strong res and non-res growth.

Our biggest business in Texas is in Houston. We have a very fine aggregates and ready-mix business that services the west and southwest part of the city. It also has the closest aggregate supply with -- we have just tremendous aggregate reserves about 40 miles west near Columbus, Texas.

We are seeing in those -- in the Houston market we are seeing very strong demand for aggregate. We are up significantly over last year and we are seeing good, solid double-digit price increases on the aggregate side.

On the ready-mix side, which primarily services residential but also has a growing nonresidential presence, we certainly have seen residential weakness. It has been on the higher end specifically, and more centered on the north side of Houston that we don't service to a large degree.

On the entry-level side we -- entry-level housing to the west and southwest part of Houston, we're seeing pretty steady demand, and our ready-mix is give or take on par with last year. Our backlogs are very good there. We are very optimistic for the year in total. So strong aggs, steady ready-mix, and overall we are very optimistic about our Houston market.

Great, thanks. That's really great color, thanks for that. And then as a follow-up, just you showed a really nice aggregates price increase on an organic basis. Was there any geographic or product mix shift that moved that number around, or was that pretty broad-based?

Pretty broad-based. Overall both geographic and product mix would've been limited impact on the quarter.

Great thanks. I'll bit get back in queue. Thanks, Tom.

Brent Thielman with D.A. Davidson.

Good morning.

Good morning, Brent.

Tom, Brian, some of the flooding issues in Houston, any comments on that? Have your operations been materially impacted, consider something there for the second quarter?

We certainly had -- I think they described it as a 500 year event in rain. It's so early that -- the first two weeks of the quarter have been terrible there. I think with normal level we'll recover for the quarter. But we certainly could do without any additional wet weather in Texas for the next couple of months, though.

Okay, but no--

We've got one of our smaller aggregate sites that's going to be down for 30 days, but in general we've recovered quite well on a production side. And the way on the ready-mix side in Houston, it's interesting because it's a residential market where most of the concrete is pumped, the trucks don't go on the site. They pull up and the concrete is pumped.

It tends to recover from the rain quicker than other markets where the trucks are expected to get on the site. So I don't think -- I'm hoping with normal weather that we will not be impacted for the quarter.

Okay, but no costs associated with assets damaged or something like that?

Not really. We might have a little bit higher production cost as it's always more difficult to crush wet material than dry, but I don't think it's material in any way.

Okay. Great. And then Tom, when you look at the key markets driving organic aggregates volume growth this quarter, maybe the last couple quarters, is it still skewed more towards the private sector versus the public sector? Because when we think about lift in 2017 from the public side, I'm just trying to get a sense of where we're coming from in terms of what's driving performance today or growth today.

We would certainly see a lift on highways in Texas. We have not seeing the impact of the FAST Act or other state initiatives as of yet, and that should flow through in 2017. But certainly Texas has seen the impact of Prop 1 monies.

And the other just -- it's pretty lumpy on the private side. Like I say, we're starting to see some strong momentum in Utah and other markets. In our new markets in the mid-Atlantic we're very optimistic for those both public and private markets, but it varies around the country.

Okay. Thank you.

Thanks.

Trey Grooms with Stephens Incorporated.

Good morning Tom and Brian, this is actually Drew Lipke on for Trey.

Hey Drew.

Congrats on a good quarter. First question that I had was going back to cement pricing. Can you help us think about seasonality there? I understand we need to really think about on a year-over-year basis, and there was obviously the contribution from Davenport, but with pricing down over 9% sequentially in the quarter was this a mix issue? And can you kind of just help us think through that?

Drew, I think cement pricing was up 7%.

No, on a sequential basis, quarter-over-quarter.

Drew, that's a stat we haven't focused on, to be --

Okay, we can circle back on that.

We'll come back to that.

I think that has a geographic issue. I think -- we will get back to you on it, but I'm pretty sure it's a geographic issue where obviously the further north you go the more seasonal it is. So I believe that's a geographic issue, but we will get you that data.

Okay. And then just trends in the West group, you talked about the asphalt and the competitiveness in the Austin market. I'm curious on mainland sand and gravel.

I know you had some large projects that were rolling off there. I think there was some other projects coming out for bid here in that market. Can you just sort of comment on the environment there?

Yes. We have not seen the volume as yet from the additional infrastructure projects, but our bidding activity has really picked up in the last 60 days. So we are very optimistic about -- it probably will be all the way into the fourth quarter of this year when that hits.

But we are very optimistic and we see some demand momentum starting to build in that market. And that business has performed as expected.

We knew those big projects were going to roll off. And that's really a fine business and when the infrastructure market picks up there later this year in 2017 there are some very large projects going on there. We expect demand to recover nicely there over the next 18 months.

Got it. Okay. Thanks, guys.

Thanks.

Scott Schroeder with Citi.

Good morning, thanks for taking my questions. First I wanted to ask you about two key markets that you have, one of them is new, that it seems like might have tremendous growth opportunities. And I just wanted to see how much better than the Company averages these could be, how much they could push pricing, and ultimately what kind of competition would enter the market because of that. And that's Utah and Las Vegas.

So in Las Vegas I know that there's a major development -- developer in there developing the Summerlin MPC, we have the downtown Summerlin, and then with that, I forget, over 1 million square feet of mixed use plans. So I just want to see how much opportunity is there?

And then likewise on Utah with permits kind of skyrocketing there as well as office vacancy rates declining. How much more upside can we see there?

It's hard to quantify that, but we would be very optimistic both in Utah and Las Vegas. Vegas was just decimated after the financial crisis. We have teamed up with really a first-class company that's been around for a few decades in Sierra Ready Mix. They actually did reasonably well through the crisis and they are really poised to, I think, to take advantage of the upturn there.

I think there is both opportunities in Las Vegas both for significant organic growth, but also there -- the market still has some acquisition -- further acquisition opportunities. So we see Vegas as really a start to a real growth platform. Utah on the other hand is a fairly consolidated market. There's really three main players there.

Probably limited acquisition opportunities, but that market is really gaining momentum especially on the residential -- single-family residential side which has really been pretty muted as far as growth goes. The last few years we're definitely seeing some significant residential development and are very optimistic for that for the future.

It's pretty hard to quantify that specifically, and we tend not to give that kind of guidance by state, but both of those, Nevada and Utah, would be two areas that we would see significant growth prospects over the next few years.

Sure. I was just looking for some qualitative comments on that. Next, I wanted to move to the acquisition pipeline, and I know you've met your $30 million of EBITDA for the year. And given where leverage is now and your cash balance, how do you look at I guess the urgency to make further acquisitions to consolidate your new platforms at AMC and also Sierra?

Are seller expectations going to raise there to somewhat maybe try to stop you from consolidating there? So how quickly do you look to move on consolidating those markets?

We never really feel any urgency. We have a sort of a tried-and-true acquisition program where if we can meet the seller's needs, which many times are not just financial, and it becomes appropriate, then of course we go forward. But we're not -- we're never in any rush.

We certainly establish relationships, we have lots of relationships in the Carolinas and in Virginia that we've had for many years, and we're obviously continuing those and we are when it's appropriate for the seller we hope to do some add-on deals there. And I -- that -- establish a platform, keep contacts up with many of the add-ons there.

And that's actually something that these platforms bring to us. They also bring the Management's relationships with all of these local players, also. So it actually helps fill our pipeline not just with our relationships but with their relationships.

So we are very optimistic. The pipeline is really strong right now. We have a number of LOIs out there. We continue to focus on the small bolt-ons.

There's a few larger deals out there, but it's unlikely that we will participate in those. We like the singles and doubles and we're going to continue that strategy.

Great, thanks. I appreciate you taking my questions.

Okay. Cheers.

Stephen Kim with Barclays Bank.

It's actually Trey on for Steve. Definitely a good quarter. I wanted to just follow up on the M&A question. Just trying get a better understanding if you have any specific geographic priorities. I know you just brought on the platform on the East Coast, so is that some place that you would incrementally look to add new bolt-ons more than other more established platforms?

Like I say, we don't have an urgency, but certainly we have seen over 30 years when you do enter a market there is certainly a flurry of activity that goes along with that. So we would be optimistic about some of those turning into deals.

But it's not that we take all our resources and focus them on that area. We just continue with what we're doing and now we just have an expanded geographic area that we work on.

Got you. Thanks for that. And going back, a little bit more thought on acquisitions. Do you have any sense for how much acquisitions that you've done so far this year and you would include in your acquisition-based revenue could add to top line revenues for the year?

We don't give revenue guidance as you know, Trey, but we have included the EBITDA, successive period EBITDA, for all of the acquisitions closed to date in our guidance range. And we increased that obviously this quarter by $25 million, primarily reflecting Boxley and Sierra.

Got you. All right. Thanks guys, I appreciate it. And good luck next quarter.

Okay. Thanks.

There are no further questions. At this time I would like to turn the call over to Tom Hill for closing comments.

Thanks everybody for your time and your interest in Summit Materials, and I look forward to updating you on our progress next quarter. Have a good day.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.