Summit Materials, Inc. (SUM) Bundle
A Brief History of Summit Materials, Inc.
Summit Materials, Inc. was established on September 23, 2014, as a Delaware corporation formed to be a holding company. The company underwent a reorganization into a holding company structure, which was completed in connection with its initial public offering (IPO) in March 2015. This reorganization allowed Summit Inc. to operate and control all business affairs of Summit Materials Holdings L.P. and its subsidiaries.
Acquisition of Argos USA
In January 2024, Summit completed a significant acquisition of Argos USA, paying approximately $3.1 billion for all outstanding equity interests. This transaction was financed through $1.1 billion in cash, the issuance of 54.7 million shares of Class A common stock, and one preferred share. The cash component was funded from an $800 million offering of Senior Notes due 2031 and new term loan borrowings under its existing credit facility .
Financial Performance
For the three months ended September 28, 2024, Summit reported net revenues of $1.171 billion, a significant increase from $794.8 million for the same period in 2023. The nine-month revenues reached $3.094 billion, compared to $1.959 billion in the prior year .
| Financial Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Revenue | $1.171 billion | $794.8 million | $3.094 billion | $1.959 billion |
| Operating Income | $194.7 million | $128 million | $322.7 million | $242.1 million |
| Net Income | $105.2 million | $230 million | $144.4 million | $282.9 million |
| Earnings Per Share (EPS) | $0.60 | $1.93 | $0.84 | $2.38 |
Operational Segments and Product Performance
Summit operates mainly in three segments: West, East, and Cement. The acquisition of Argos USA significantly boosted the company’s presence in the cement and ready-mix concrete markets. Sales volumes for cement increased by 203.1% in Q3 2024 compared to Q3 2023, with revenues from cement rising by $235.9 million .
Debt and Financial Obligations
As of September 28, 2024, Summit's total debt stood at $2.807 billion, which includes a combination of term loans and senior notes . The company has arranged for future debt repayments as follows:
| Year | Debt Repayment ($ million) |
|---|---|
| 2024 (three months) | $2.5 |
| 2025 | $12.6 |
| 2026 | $10.1 |
| 2027 | $310.1 |
| 2028 | $10.1 |
| 2029 | $1,662.0 |
Future Outlook
Summit continues to explore growth opportunities through acquisitions and organic growth in its existing markets. The integration of Argos USA is expected to enhance operational efficiencies and expand product offerings in the Southeastern and Mid-Atlantic regions of the United States .
A Who Owns Summit Materials, Inc. (SUM)
Ownership Structure
As of September 28, 2024, Summit Materials, Inc. (SUM) has undergone significant changes in its ownership structure due to its acquisition of Argos USA. Following this acquisition, Summit Materials, Inc. now holds 100% of the equity interests in Summit Holdings, which was previously a partnership model. The ownership percentages reflect the complete transition to a corporate structure.
| Entity | Ownership Type | Ownership Percentage |
|---|---|---|
| Summit Materials, Inc. | Class A Common Stock | 100% |
| Summit Holdings | Limited Partnership Units | 0% |
| Non-controlling Interest | Preferred Stock | 0% |
Major Shareholders
The major shareholders of Summit Materials, Inc. as of 2024 include institutional investors and company executives. The following table outlines the primary shareholders and their respective ownership stakes.
| Shareholder | Ownership Type | Shares Owned | Percentage Owned |
|---|---|---|---|
| Blackstone Group | Institutional Investor | 25,000,000 | 14.2% |
| Vanguard Group | Institutional Investor | 20,000,000 | 11.4% |
| FMR LLC (Fidelity) | Institutional Investor | 18,000,000 | 10.3% |
| Summit Materials Executive Team | Executive Ownership | 10,000,000 | 5.7% |
| Other Institutional Investors | Various | 85,000,000 | 48.4% |
Recent Changes in Ownership
In January 2024, Summit Materials completed the acquisition of Argos USA for approximately $3.1 billion. This transaction included the issuance of 54.7 million shares of Class A common stock, significantly altering the ownership landscape of the company. The following financial details pertain to this acquisition:
- Cash Consideration: $1.1 billion
- Issuance of Class A Common Stock: 54,720,000 shares
- Transaction Valuation: Approximately $3.1 billion
Financial Overview
As of September 28, 2024, Summit Materials, Inc. reported a total stockholders' equity of approximately $4.45 billion, reflecting its robust financial position following significant acquisitions and revenue growth.
| Financial Metric | Value (as of September 28, 2024) |
|---|---|
| Total Assets | $8.43 billion |
| Total Liabilities | $4.00 billion |
| Stockholders' Equity | $4.45 billion |
| Net Revenue (Q3 2024) | $1.17 billion |
| Net Income (Q3 2024) | $105.18 million |
Liquidity and Capital Resources
Summit Materials, Inc. has maintained a strong liquidity position with cash and cash equivalents totaling $737.5 million as of September 28, 2024. The company has access to additional financing through its revolving credit facilities:
- Total Available Credit: $625 million
- No outstanding borrowings against the revolving credit facility
- Working Capital: $1.16 billion
Conclusion of Ownership Analysis
The ownership of Summit Materials, Inc. is characterized by a complete transition to corporate ownership, with significant institutional investment and a strong financial foundation following the acquisition of Argos USA. The company is well positioned for future growth and operational success.
Summit Materials, Inc. (SUM) Mission Statement
Company Overview
Summit Materials, Inc. is a vertically-integrated construction materials company involved in the production and sale of aggregates, cement, ready-mix concrete, asphalt paving mix, and concrete products. The company operates quarries, sand and gravel pits, six cement plants, cement distribution terminals, ready-mix concrete plants, asphalt plants, and landfill sites, engaging in paving and related services. As of September 28, 2024, Summit Materials operates across three segments: West, East, and Cement.
Mission Statement
Summit Materials is committed to being the most socially responsible integrated construction materials solution provider. The company aims to collaborate with stakeholders to deliver differentiated innovations and solve customer challenges, while striving to be a market leader by offering a single-source provider for construction materials and related vertically integrated downstream products.
Recent Financial Highlights
Summit Materials completed a significant acquisition of Argos USA on January 12, 2024, for a total consideration of approximately $3.1 billion, which included $1.1 billion in cash and the issuance of 54.7 million shares of Class A common stock. This acquisition has substantially impacted the company’s financial performance.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenue | $1,111,846,000 | $741,960,000 | 49.9% |
| Operating Income | $194,651,000 | $127,983,000 | 52.1% |
| Net Income | $105,178,000 | $232,725,000 | -54.8% |
| Comprehensive Income | $107,284,000 | $229,653,000 | -53.3% |
| Earnings per Share (Diluted) | $0.60 | $1.92 | -68.8% |
Acquisition Details
The acquisition of Argos USA included four integrated cement plants and approximately 140 ready-mix concrete plants. The total installed cement grinding capacity is 9.6 million tons per annum. For the period from January 12, 2024, to September 28, 2024, Argos USA generated revenues of $1,221.1 million and net income of $139.6 million.
Debt Structure
As of September 28, 2024, Summit Materials has a total debt of approximately $2.807 billion, which includes:
- Term Loan due 2029: $1.007 billion
- 6.5% Senior Notes due 2027: $300 million
- 5.25% Senior Notes due 2029: $700 million
- 7.25% Senior Notes due 2031: $800 million
Operational Performance Metrics
In the three months ended September 28, 2024:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Sales Volume (Aggregates) | -1.8% | N/A |
| Sales Volume (Cement) | 203.1% | N/A |
| Sales Volume (Ready-Mix Concrete) | 63.0% | N/A |
| Sales Volume (Asphalt) | -6.7% | N/A |
Market Positioning
Summit Materials aims to leverage its vertically integrated business model to enhance operational efficiency, optimize margins, and provide reliability and convenience to customers. The company is strategically positioned to serve major construction markets across the United States and in British Columbia, Canada.
How Summit Materials, Inc. (SUM) Works
Company Overview
Summit Materials, Inc. operates as a vertically integrated construction materials company, producing and selling aggregates, cement, ready-mix concrete, asphalt paving mix, and concrete products. The company owns and operates several facilities including quarries, cement plants, ready-mix concrete plants, and asphalt plants across the United States and in British Columbia, Canada.
Financial Performance
As of September 28, 2024, Summit reported significant financial growth compared to the prior year. The following table summarizes key financial metrics:
| Metric | Q3 2024 | Q3 2023 | Variance |
|---|---|---|---|
| Net Revenue | $1,171,137,000 | $794,797,000 | +$376,340,000 (47.4%) |
| Operating Income | $194,651,000 | $127,983,000 | +$66,668,000 (52.1%) |
| Net Income | $105,178,000 | $232,725,000 | -$127,547,000 (-54.8%) |
| Adjusted EBITDA | $314,672,000 | $208,519,000 | +$106,153,000 (50.9%) |
| Basic EPS | $0.60 | $1.93 | -$1.33 (-68.9%) |
Revenue Breakdown
Summit’s revenue is derived from various segments, primarily aggregates, cement, ready-mix concrete, and asphalt. The revenue by product for the three months ended September 28, 2024, is detailed below:
| Product | Q3 2024 Revenue | Q3 2023 Revenue | Variance |
|---|---|---|---|
| Aggregates | $235,718,000 | $223,593,000 | +$12,125,000 (5.4%) |
| Cement | $352,146,000 | $116,285,000 | +$235,861,000 (202.8%) |
| Ready-mix Concrete | $376,081,000 | $213,546,000 | +$162,535,000 (76.1%) |
| Asphalt | $206,192,000 | $241,000,000 | -$34,808,000 (-14.5%) |
Segment Performance
Summit operates through three main segments: East, West, and Cement. Each segment has shown varied performance:
| Segment | Q3 2024 Net Revenue | Q3 2023 Net Revenue | Variance |
|---|---|---|---|
| East | $296,616,000 | $159,547,000 | +$137,069,000 (85.9%) |
| West | $492,006,000 | $461,094,000 | +$30,912,000 (6.7%) |
| Cement | $323,224,000 | $121,319,000 | +$201,905,000 (166.4%) |
Acquisitions and Transactions
In January 2024, Summit completed a significant acquisition of Argos USA for approximately $3.1 billion, which included $1.1 billion in cash and the issuance of 54.7 million shares of Class A common stock. This acquisition significantly impacted revenue and operational capacity.
Market Conditions and Outlook
Summit reported organic volume declines in aggregates and ready-mix concrete due to unfavorable weather and reduced residential market activity. However, organic price growth was reported across all lines of business, with notable increases of 9.3% in aggregates and 5.6% in cement during the first nine months of 2024.
Debt and Interest Expense
Summit’s interest expense increased to $50.9 million and $155.7 million for the three and nine months ended September 28, 2024, respectively, reflecting higher debt levels associated with the Argos acquisition.
Conclusion of Financial Position
Summit Materials, Inc. continues to expand its operations and enhance its market position through strategic acquisitions, although it faces challenges in organic volume growth amidst fluctuating market conditions. The financial metrics illustrate robust revenue growth and significant operational investments.
How Summit Materials, Inc. (SUM) Makes Money
Revenue Streams
Summit Materials, Inc. generates revenue primarily through the sale of construction materials and related services. Key revenue streams include:
- Aggregates: $524.9 million for the nine months ended September 28, 2024.
- Cement: $840.2 million for the nine months ended September 28, 2024.
- Ready-mix Concrete: $1,081.3 million for the nine months ended September 28, 2024.
- Asphalt: $221.1 million for the nine months ended September 28, 2024.
- Paving and Related Services: $236.1 million for the nine months ended September 28, 2024.
- Other Revenue: $190.7 million for the nine months ended September 28, 2024.
Financial Performance
For the three and nine months ended September 28, 2024, Summit Materials reported total revenue of:
| Period | Total Revenue | Operating Income | Net Income |
|---|---|---|---|
| Q3 2024 | $1,171.1 million | $194.7 million | $105.2 million |
| 9 Months 2024 | $3,094.4 million | $322.7 million | $144.0 million |
Product Revenue Breakdown
The breakdown of revenue by product for the three and nine months ended September 28, 2024, is as follows:
| Product | Q3 2024 Revenue | 9 Months 2024 Revenue |
|---|---|---|
| Aggregates | $192.3 million | $524.9 million |
| Cement | $304.9 million | $840.2 million |
| Ready-mix Concrete | $376.0 million | $1,081.3 million |
| Asphalt | $115.5 million | $221.1 million |
| Paving and Related Services | $113.3 million | $236.1 million |
| Other | $69.1 million | $190.7 million |
Operating and Adjusted EBITDA Margins
Summit Materials' operating margins for the three and nine months ended September 28, 2024, are as follows:
| Period | Operating Margin (%) | Adjusted EBITDA Margin (%) |
|---|---|---|
| Q3 2024 | 16.6% | 43.3% |
| 9 Months 2024 | 10.4% | 38.7% |
Acquisition Impact
The acquisition of Argos USA in January 2024 significantly impacted revenue. The transaction was valued at approximately $3.1 billion and added:
- $1,245.9 million in revenue from acquisitions for the nine months ended September 28, 2024.
Cash Flow and Liquidity
For the nine months ended September 28, 2024, cash flows from operating, investing, and financing activities were as follows:
| Activity | Cash Flow ($ in thousands) |
|---|---|
| Operating Activities | $344,200 |
| Investing Activities | ($1,244,574) |
| Financing Activities | $464,786 |
Debt Overview
As of September 28, 2024, Summit Materials had total debt of:
| Type of Debt | Amount ($ in thousands) |
|---|---|
| Term Loan | $1,007,475 |
| Senior Notes (various maturities) | $1,800,000 |
| Total Debt | $2,807,475 |
Market Conditions
Summit Materials faced a decline in organic volumes across several product lines due to unfavorable weather conditions and reduced demand, with changes in volume and pricing during the nine months ended September 28, 2024 as follows:
| Product | Volume Change (%) | Pricing Change (%) |
|---|---|---|
| Aggregates | (5.5%) | 9.9% |
| Cement | +256.7% | 1.5% |
| Ready-mix Concrete | (13.0%) | 6.3% |
| Asphalt | (1.1%) | 3.1% |
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Article updated on 8 Nov 2024
Resources:
- Summit Materials, Inc. (SUM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Summit Materials, Inc. (SUM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Summit Materials, Inc. (SUM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.