|FORTERRA, INC. filed this Form 10-Q on 11/09/2017|
For the purposes of evaluating segment performance, the Company’s chief operating decision maker reviews earnings before interest, taxes, depreciation and amortization (“EBITDA”) as a basis for making the decisions to allocate resources and assess performance. Our discussion below includes the primary drivers of EBITDA.
Drainage Pipe & Products
Net sales increased by $32.7 million, or 15.2%, to $248.2 million in the three months ended September 30, 2017 from $215.5 million in the three months ended September 30, 2016. The increase was primarily attributable to net sales of approximately $28.4 million provided by our acquisitions. The remaining increase in net sales of $4.3 million was due to higher net sales in certain regions driven by increased volumes and average sales price, offset by the negative impact of hurricanes Irma and Harvey.
Gross profit was $51.8 million in the three months ended September 30, 2017, a decrease of $0.9 million or 1.7% from $52.7 million in the three months ended September 30, 2016. The decrease was primarily due to the impact of higher cost of goods sold, including labor, freight and raw materials, that were not fully offset by an increase in average sales prices of products sold.