Summit Materials Stock

Summit Materials, Inc. operates as a construction materials company in the United States (U.S.).

Within its markets, the company strives to be a market leader by offering customers a single-source provider for construction materials and related vertically integrated downstream products. The company’s materials include aggregates, which it supplies across the United States, and in British Columbia, Canada, and cement, which it supplies to surrounding states along the Mississippi River from Minnesota to Louisiana. In addition to supplying aggregates to customers, the company uses a portion of its materials internally to produce ready-mix concrete and asphalt paving mix, which may be sold externally or used in its paving and related services businesses

The Argos USA assets include four integrated cement plants, two grinding facilities, 140 ready-mix concrete plants, eight ports and 10 inland terminals across the East and Gulf Coast regions, with a total installed cement grinding capacity of 9.6 million tons per annum and a total import capacity of 5.4 million tons of cement per annum. The import facilities allow the importing of cement from other countries, including a minimum quantity from a cement plant in Cartagena, Colombia, owned by Cementos Argos S.A., as stipulated under a cement supply agreement entered into upon closing the Transaction. The Argos USA assets also include 1.2 billion tons of reserves and resources in four quarries.

The company is a major participant in the U.S. construction materials industry. Including the operations of Argos USA acquired in January 2024, the company’s sales volumes put it in the top 6 of aggregates suppliers, the top 4 of cement producers and it is a major producer of ready-mix concrete and asphalt paving mix. Summit's aggregates reserves and resources were 5.5 billion tons as of December 30, 2023. In the year ended December 30, 2023, Summit sold 58.4 million tons of aggregates, 2.4 million tons of cement, 4.9 million cubic yards of ready-mix concrete and 3.7 million tons of asphalt paving mix across its nearly 400 sites and plants.

Business Segments

As of December 30, 2023, the company operated in 21 U.S. states and in British Columbia, Canada and had assets in 21 U.S. states and in British Columbia, Canada through its platforms that make up its operating segments: West, East and Cement. In addition, the Argos USA operations acquired subsequent to year end added operations in 18 states and assets in five states. The platform businesses in the West, East and Cement segments have their own management teams that are responsible for overseeing local operations, implementing commercial and operational best practices, developing growth opportunities and integrating acquired businesses.

West: The company’s West segment consists of its West and South regions, and includes operations in Texas, Utah, Arizona, Colorado, Idaho, Wyoming, Oklahoma, Arkansas and British Columbia, Canada. The company supplies aggregates, ready-mix concrete, asphalt paving mix and paving and related services in the West segment. As of December 30, 2023, the West segment controlled approximately 1.7 billion tons of aggregates reserves and resources. During the year ended December 30, 2023, approximately 61% of the company’s revenue was generated in the West segment.

East: The company’s East segment consists of its East and Central regions, and serves markets extending across the Midwestern and Eastern United States, most notably in Kansas, Missouri, Virginia, Florida, North Carolina, South Carolina, Georgia and Nebraska where it supplies aggregates, ready-mix concrete, asphalt paving mix and paving and related services. As of December 30, 2023, the East segment controlled approximately 3.3 billion tons of aggregates reserves and resources. During the year ended December 30, 2023, approximately 25% of the company’s revenue was generated in the East segment. The Argos USA operations acquired subsequent to year end serves markets extending across the Southeast United States, notably in Florida, Georgia, South Carolina, North Carolina, Alabama, as well as the Mid-Atlantic United States in Maryland and Virginia.

Cement: The company’s Cement segment consists of its Hannibal, Missouri and Davenport, Iowa cement plants and nine distribution terminals along the Mississippi River from Minnesota to Louisiana. The company’s highly efficient plants, which have converted all production to lower carbon Portland Limestone Cement, are complemented by its integrated distribution system that spans the Mississippi River. The company processes solid and liquid waste into fuel for the plants. The Hannibal, Missouri plant is one of very few cement facilities in the United States that can process both hazardous and non-hazardous solid and liquid waste into fuel. As of December 30, 2023, the Cement segment controlled approximately 0.5 billion tons of aggregates reserves and resources, which serve its cement business. During the year ended December 30, 2023, approximately 15% of the company’s revenue was generated in the Cement segment. The Argos USA operations acquired subsequent to year end includes four cement plants located in Harleyville, South Carolina; Roberta, Alabama; Newberry, Florida; and Martinsburg, West Virginia and two grinding facilities in Atlanta, Georgia and Tampa, Florida.

End Markets

Public Infrastructure: Public infrastructure construction includes spending by federal, state and local governments for highways, bridges, airports, schools, public buildings and other public infrastructure projects. Public infrastructure spending has historically been more stable than private sector construction. Historically, public infrastructure spending has been less sensitive to interest rate changes and economic cycles and often is supported by multi-year federal and state legislation and programs. A significant portion of the company’s revenue is derived from public infrastructure projects. As a result, the supply of federal and state funding for public infrastructure highway construction significantly affects the company’s public infrastructure end-use business.

Residential Construction: Residential construction includes single family homes and multi-family units, such as apartments and condominiums. Demand for residential construction is influenced primarily by employment prospects, new household formation and mortgage interest rates. In recent years, the company has observed migration trends towards rural and exurban U.S. markets, notably in its Texas and Utah markets.

Nonresidential Construction: Nonresidential construction encompasses all privately financed construction other than residential structures. Demand for nonresidential construction is customarily driven primarily by population and economic growth, and activity tends to follow residential activity by 12-24 months. Population growth generally spurs demand for stores, shopping centers and restaurants. Economic growth typically creates demand for projects, such as hotels, office buildings, warehouses and factories, although growth rates vary across the U.S. The supply of nonresidential construction projects is also affected by other variables, including interest rates and the availability of credit to finance these projects.

Strategy

The company continues to make progress on its strategy to divest certain businesses through portfolio optimization.

Seasonality

Use and consumption of the company’s products fluctuate due to seasonality. Nearly all of the products used by the company, and by its customers, in the private construction or public infrastructure industries are used outdoors. The company’s highway operations and production and distribution facilities are also located outdoors. Warmer and drier weather during the second and third quarters of the company’s fiscal year typically result in higher activity and revenue levels during those quarters. The first quarter of the company’s fiscal year (year ended December 31, 2023) typically has lower levels of activity due to weather conditions.

Environmental and Government Regulation

The company’s facilities and operations are subject to a variety of worker health and safety requirements, particularly those administered by the federal Occupational Safety and Health Administration; and Mine Safety and Health Administration.

History

Summit Materials, Inc. was founded in 2009. The company was incorporated under the laws of the state of Delaware in 2014.