EULESS, Texas, Nov. 8, 2019 /PRNewswire/ -- U.S. Concrete,
Inc. (NASDAQ: USCR), a leading producer of construction materials
in select major markets across the United
States, today reported results for the quarter ended
September 30, 2019.
THIRD QUARTER 2019 RESULTS1
- Consolidated revenue increased 1.1% from last year's third
quarter to $408.9 million, an
all-time quarterly high;
- Ready-mixed concrete revenue increased 2.3% from last year's
third quarter to $354.1 million, an
all-time quarterly high;
- Operating income was $33.3
million; Adjusted Gross Profit2 increased 9.9% to
$87.7 million compared to last year's
third quarter; Adjusted Gross Profit Margin2 increased
to 21.4% from 19.7% in last year's third quarter;
- Net income was $13.6 million;
Total Adjusted EBITDA2 increased 15.6% from last year's
third quarter to $62.1 million, an
all-time quarterly high; Total Adjusted EBITDA Margin2
increased to 15.2% from 13.3% in last year's third quarter.
|
|
1
|
Certain
computations within this press release may reflect rounding
adjustments.
|
2
|
Adjusted Gross
Profit, Total Adjusted EBITDA and related margins are non-GAAP
measures. Please refer to the reconciliations and other
information at the end of this press release.
|
William J. Sandbrook, Chairman
and Chief Executive Officer of U.S. Concrete, Inc. stated, "With
the benefit of continued economic expansion and improved weather
patterns I am pleased to announce our third quarter 2019 results,
which include quarterly records of consolidated revenue,
consolidated total adjusted EBITDA, ready-mixed concrete segment
revenue and aggregate products segment adjusted EBITDA. Our revenue
growth was driven by both higher ready-mixed concrete segment
volumes and higher average sales prices in our aggregate products
and ready-mixed concrete segments. The increased ready-mixed
concrete volumes also enabled us to improve our adjusted EBITDA
margin to 15.2% this quarter. These results validate our belief in
the strength of each regional market we serve."
Mr. Sandbrook continued, "Our margin improvement was aided by
increased ready-mixed concrete volumes and solid operational
improvements in our aggregate products segment. We continue to
focus on enhancing our margins through cost containment and
increased utilization of technology. We are increasing our
technology investments with the objective of improving our
customers' experiences while increasing revenue and reducing
costs."
Mr. Sandbrook concluded, "We will continue to work strategically
and operationally on those areas of our business that will improve
shareholder value. Our expectation is to continue with our strategy
of building defensible, vertically-integrated positions in major
metropolitan markets with an increasing emphasis on aggregate
products, which lead to value-enhancing franchises that are
virtually impossible to replicate."
OPERATING RESULTS
READY-MIXED CONCRETE SEGMENT
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
($ in millions
except selling prices)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Ready-Mixed
Concrete Segment:
|
|
|
|
|
|
|
|
Revenue
|
$
|
354.1
|
|
|
$
|
346.3
|
|
|
$
|
958.5
|
|
|
$
|
985.5
|
|
Adjusted
EBITDA
|
$
|
51.5
|
|
|
$
|
47.5
|
|
|
$
|
124.1
|
|
|
$
|
140.3
|
|
|
|
|
|
|
|
|
|
Ready-Mixed
Concrete Data:
|
|
|
|
|
|
|
|
Average selling price
("ASP") per cubic yard
|
$
|
138.54
|
|
|
$
|
138.10
|
|
|
$
|
138.81
|
|
|
$
|
135.94
|
|
Sales volume in
thousand cubic yards
|
2,551
|
|
|
2,503
|
|
|
6,892
|
|
|
7,222
|
|
Revenue from the ready-mixed concrete segment increased
$7.8 million, or 2.3%, compared to
the prior year third quarter, primarily resulting from a volume
increase of 1.9%. Adjusted EBITDA in this segment was
positively impacted by the higher sales volume and increased
pricing.
AGGREGATE PRODUCTS SEGMENT
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
($ in millions
except selling prices)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Aggregate Products
Segment:
|
|
|
|
|
|
|
|
Sales to
external customers
|
$
|
37.9
|
|
|
$
|
41.1
|
|
|
$
|
105.8
|
|
|
$
|
100.9
|
|
Intersegment
sales
|
15.0
|
|
|
12.4
|
|
|
39.5
|
|
|
35.3
|
|
Total aggregate
products revenue
|
$
|
52.9
|
|
|
$
|
53.5
|
|
|
$
|
145.3
|
|
|
$
|
136.2
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
16.3
|
|
|
$
|
12.2
|
|
|
$
|
38.9
|
|
|
$
|
29.1
|
|
|
|
|
|
|
|
|
|
Aggregate Products
Data:
|
|
|
|
|
|
|
|
Average selling price
per ton(1)
|
$
|
11.86
|
|
|
$
|
11.63
|
|
|
$
|
11.93
|
|
|
$
|
11.26
|
|
Sales volume in
thousand tons
|
3,116
|
|
|
3,211
|
|
|
8,492
|
|
|
8,402
|
|
|
|
(1)
|
The Company's
calculation of the aggregate products segment ASP excludes certain
other ancillary revenue and Polaris's freight revenue. The
Company defines revenue for its aggregate products ASP calculation
as amounts billed to external and internal customers for coarse and
fine aggregate products, excluding delivery charges. The
Company's definition and calculation of ASP may differ from other
companies in the construction materials industry.
|
Aggregate products revenue declined $0.6
million in the quarter, resulting from a 3.0% decrease in
sales volume that was partially offset by the 2.0% increase in
average selling price. Sales volume growth was hindered by
the delay in certain Polaris Materials's shipments due to one of
the transportation carrier's ships being temporarily taken out of
service. Aggregate products Adjusted EBITDA of $16.3 million in the 2019 third quarter increased
33.6% from the prior third year quarter, primarily related to
improved operating efficiencies.
CONSOLIDATED THIRD QUARTER 2019 RESULTS COMPARED TO THIRD
QUARTER 2018
Consolidated revenue increased 1.1% compared to the prior year
third quarter. During the third quarter of 2019, operating
income was $33.3 million compared to
$35.0 million in the third quarter of
2018, with an operating income margin of 8.1% compared to 8.7% in
the third quarter of 2018. Operating income in 2018
included a $14.6 million gain on the
divestiture of our Dallas/Fort
Worth area lime operations.
Selling, general and administrative expenses ("SG&A") as a
percentage of revenue was 7.8% in the 2019 third quarter compared
to 8.0% in the prior year third quarter. SG&A decreased
$0.2 million, or 0.6%, for the
quarter ended September 30, 2019, in comparison to the
corresponding 2018 quarter, as a result of lower
acquisition-related costs being partially offset by an increase in
non-cash stock-based compensation expense. On a non-GAAP basis, our
Adjusted SG&A, which excludes non-cash stock compensation,
acquisition-related costs and officer transition expenses, was 6.3%
in the 2019 third quarter compared to 6.6% in the prior year third
quarter. Adjusted SG&A as a percentage of revenue is a non-GAAP
financial measure. Please refer to the definitions,
reconciliations and other information at the end of this press
release.
BALANCE SHEET AND LIQUIDITY
Net cash provided by operating activities in the 2019 third
quarter was $51.5 million, compared
to $42.3 million in the prior year
third quarter. The Company's Adjusted Free Cash Flow in the
2019 third quarter was $41.5 million,
as compared to $45.5 million in the
prior year third quarter. Free Cash flow in 2018 included the
proceeds from the divestiture of our former Dallas/Fort Worth area lime operations.
Adjusted Free Cash Flow is a non-GAAP financial measure.
Please refer to the definitions, reconciliations and other
information at the end of this press release.
At September 30, 2019, the Company had cash and cash
equivalents of $27.0 million and
total debt of $705.7 million,
resulting in Net Debt of $678.7
million. Net Debt decreased by $15.4 million from December 31, 2018, due to
the pay-down of overall debt balances, despite the impact of
$23.2 million of contingent
consideration payments made in the 2019 third quarter. The
Company had $236.1 million of unused
availability under its revolving credit facility at
September 30, 2019, resulting in total liquidity of
$263.1 million. Net Debt is a
non-GAAP financial measure. Please refer to the definitions,
reconciliations and other information at the end of this press
release.
FULL YEAR 2019 GUIDANCE
With the completion of nine months of operations, the Company
expects to be around the lower end of the range of the following
previously provided annual guidance:
|
|
2019
Guidance
|
Category
|
|
Low
|
|
High
|
Consolidated
revenue
|
|
$
|
1.5
|
billion
|
|
$
|
1.575
|
billion
|
Total Adjusted EBITDA
(1)
|
|
$
|
195
|
million
|
|
$
|
210
|
million
|
|
|
(1)
|
Because certain GAAP
financial measures on a forward-looking basis are not accessible,
and reconciling information is not available without unreasonable
effort, we have not provided reconciliations for forward-looking
non-GAAP measures.
|
CONFERENCE CALL AND WEBCAST DETAILS
U.S. Concrete will host a conference call on Friday,
November 8, 2019 at 10:00 a.m. Eastern
Time (9:00 a.m. Central Time),
to review its third quarter 2019 results. To participate in
the call, please dial (877) 312-8806 – Conference ID: 4575837 at
least ten minutes before the conference call begins and ask for the
U.S. Concrete conference call.
A live webcast will be available on the Investor Relations
section of the Company's website at www.us-concrete.com.
Please visit the website at least 15 minutes before the call begins
to register, download and install any necessary audio
software. A replay of the conference call and archive of the
webcast will be available shortly after the call on the Investor
Relations section of the Company's website at
www.us-concrete.com.
ABOUT U.S. CONCRETE
U.S. Concrete, Inc. (NASDAQ: USCR) is a leading supplier of
concrete and aggregates for large-scale commercial, residential and
infrastructure projects across the country. The Company holds
leading market positions in the high-growth metropolitan markets
of New York, Philadelphia, San
Francisco, Dallas/Fort Worth and Washington, D.C.,
and its materials have been used in some of the most complex and
highly specialized construction projects of the last decade.
U.S. Concrete has continued to grow organically and through a
series of strategic acquisitions of independent producers in our
target markets.
For more information on U.S. Concrete, visit
www.us-concrete.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Certain statements and information provided in
this press release are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These forward-looking
statements include, without limitation, statements concerning
plans, objectives, goals, projections, outlook, strategies, future
events or performance, and underlying assumptions and other
statements, which are not statements of historical facts. In some
cases, you can identify forward-looking statements by terminology
such as "may," "will," "intend," "should," "expect," "plan,"
"anticipate," "believe," "estimate," "outlook," "predict,"
"potential" or "continue," the negative of such terms or other
comparable terminology. These forward-looking statements, which are
subject to risks, uncertainties and assumptions about us, may
include projections of our future financial performance, our
anticipated growth strategies and anticipated trends in our
business. These statements are predictions based on our current
expectations and projections about future events which we believe
are reasonable. Actual events or results may differ materially.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. We believe
that these risks and uncertainties include, but are not limited to:
general economic and business conditions, which will, among other
things, affect demand for new residential and commercial
construction; our ability to successfully identify, manage, and
integrate acquisitions; the cyclical nature of, and changes in, the
real estate and construction markets, including pricing changes by
our competitors; governmental requirements and initiatives,
including those related to mortgage lending, financing or
deductions, funding for public or infrastructure construction, land
usage, and environmental, health, and safety matters; disruptions,
uncertainties or volatility in the credit markets that may limit
our, our suppliers' and our customers' access to capital; our
ability to successfully implement our operating strategy; weather
conditions; our substantial indebtedness and the restrictions
imposed on us by the terms of our indebtedness; the effects of
currency fluctuations on our results of operations and financial
condition; our ability to maintain favorable relationships with
third parties who supply us with equipment and essential supplies;
our ability to retain key personnel and maintain satisfactory labor
relations; and product liability, property damage, results of
litigation and other claims and insurance coverage issues.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
Moreover, neither we nor any other person assumes responsibility
for the accuracy and completeness of the forward-looking
statements. All written and oral forward-looking statements made in
connection with this press release that are attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by the "Risk Factors" in our Annual Report on Form 10-K
and our Quarterly Reports on Form 10-Q filed with the Securities
and Exchange Commission. We are under no duty to update any
of the forward-looking statements after the date of this press
release to conform such statements to actual results or to changes
in our expectations, except as required by federal securities
laws. There can be no assurance that other factors will not
affect the accuracy of these forward-looking statements or that our
actual results will not differ materially from the results
anticipated in such forward-looking statements. Unpredictable or
unknown factors we have not discussed in this press release also
could have material effects on actual results or matters that are
the subject of our forward-looking statements. We undertake no
obligation to, and do not intend to, update our description of
important factors each time a potential important factor
arises.
Non-GAAP Financial Measures
Included in this press
release are certain non-GAAP financial measures that we believe are
useful for investors. These non-GAAP financial measures may
not be comparable to similarly titled measures other companies
report and are not intended to be used as an alternative to any
measure of our performance in accordance with GAAP.
Reconciliations and definitions of the non-GAAP financial
measures used in this press release are included at the end of this
press release. Because certain GAAP financial measures on a
forward-looking basis are not accessible, and reconciling
information is not available without unreasonable effort, we have
not provided reconciliations for forward-looking non-GAAP financial
measures.
(Tables Follow)
U.S. CONCRETE,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(in millions
except per share amounts)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenue
|
$
|
408.9
|
|
|
$
|
404.3
|
|
|
$
|
1,109.5
|
|
|
$
|
1,136.3
|
|
Cost of goods sold
before depreciation, depletion and amortization
|
321.2
|
|
|
325.3
|
|
|
886.4
|
|
|
912.7
|
|
Selling, general and
administrative expenses
|
32.0
|
|
|
32.2
|
|
|
103.3
|
|
|
96.4
|
|
Depreciation,
depletion and amortization
|
22.3
|
|
|
25.5
|
|
|
70.2
|
|
|
68.2
|
|
Change in value of
contingent consideration
|
0.3
|
|
|
0.4
|
|
|
1.6
|
|
|
(0.9)
|
|
Impairment of
assets
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
Loss (gain) on
sale/disposal of assets and business, net
|
(0.2)
|
|
|
(14.1)
|
|
|
0.8
|
|
|
(14.6)
|
|
Operating
income
|
33.3
|
|
|
35.0
|
|
|
47.2
|
|
|
73.2
|
|
Interest expense,
net
|
11.6
|
|
|
11.7
|
|
|
34.8
|
|
|
34.6
|
|
Other income,
net
|
(0.2)
|
|
|
(1.1)
|
|
|
(7.8)
|
|
|
(4.1)
|
|
Income before income
taxes
|
21.9
|
|
|
24.4
|
|
|
20.2
|
|
|
42.7
|
|
Income tax
expense
|
8.3
|
|
|
8.6
|
|
|
8.3
|
|
|
14.5
|
|
Net income
|
13.6
|
|
|
15.8
|
|
|
11.9
|
|
|
28.2
|
|
Less: Net income
attributable to non-controlling interest
|
(0.6)
|
|
|
(0.2)
|
|
|
(0.9)
|
|
|
(0.2)
|
|
Net income
attributable to U.S. Concrete
|
$
|
13.0
|
|
|
$
|
15.6
|
|
|
$
|
11.0
|
|
|
$
|
28.0
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to U.S. Concrete:
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
0.79
|
|
|
$
|
0.95
|
|
|
$
|
0.67
|
|
|
$
|
1.70
|
|
Diluted earnings per
share
|
$
|
0.79
|
|
|
$
|
0.94
|
|
|
$
|
0.67
|
|
|
$
|
1.70
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
16.5
|
|
|
16.5
|
|
|
16.4
|
|
|
16.5
|
|
Diluted
|
16.5
|
|
|
16.5
|
|
|
16.4
|
|
|
16.5
|
|
U.S. CONCRETE,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
millions)
|
|
|
September 30,
2019
|
|
December 31,
2018
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
27.0
|
|
|
$
|
20.0
|
|
Trade accounts
receivable, net
|
259.3
|
|
|
226.6
|
|
Inventories
|
53.9
|
|
|
51.2
|
|
Other receivables,
net
|
13.3
|
|
|
18.4
|
|
Prepaid expenses and
other
|
9.0
|
|
|
7.9
|
|
Total current
assets
|
362.5
|
|
|
324.1
|
|
Property, plant and
equipment, net
|
676.3
|
|
|
680.2
|
|
Operating lease
assets(1)
|
69.3
|
|
|
—
|
|
Goodwill
|
239.5
|
|
|
239.3
|
|
Intangible assets,
net
|
98.0
|
|
|
116.6
|
|
Other
assets
|
10.7
|
|
|
11.1
|
|
Total
assets
|
$
|
1,456.3
|
|
|
$
|
1,371.3
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
135.8
|
|
|
$
|
125.8
|
|
Accrued
liabilities
|
90.3
|
|
|
96.3
|
|
Current maturities of
long-term debt
|
35.6
|
|
|
30.8
|
|
Current operating
lease liabilities(1)
|
13.5
|
|
|
—
|
|
Total current
liabilities
|
275.2
|
|
|
252.9
|
|
Long-term debt, net
of current maturities
|
670.1
|
|
|
683.3
|
|
Long-term operating
lease liabilities(1)
|
58.6
|
|
|
—
|
|
Other long-term
obligations and deferred credits
|
44.0
|
|
|
54.8
|
|
Deferred income
taxes
|
44.9
|
|
|
43.1
|
|
Total
liabilities
|
1,092.8
|
|
|
1,034.1
|
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
Common
stock
|
—
|
|
|
—
|
|
Additional paid-in
capital
|
346.2
|
|
|
329.6
|
|
Retained
earnings
|
27.2
|
|
|
16.2
|
|
Treasury stock, at
cost
|
(35.6)
|
|
|
(33.4)
|
|
Total shareholders'
equity
|
337.8
|
|
|
312.4
|
|
Non-controlling
interest
|
25.7
|
|
|
24.8
|
|
Total
equity
|
363.5
|
|
|
337.2
|
|
Total liabilities and
equity
|
$
|
1,456.3
|
|
|
$
|
1,371.3
|
|
|
|
(1)
Beginning January 1, 2019, we adopted new
lease accounting rules. As allowed, we did not revise amounts
of prior periods. See our 2019 Quarterly Report on Form 10-Q
for the quarter ended March 31, 2019 for more
information.
|
U.S. CONCRETE,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(in
millions)
|
|
|
Nine Months Ended
September 30,
|
|
2019
|
|
2018
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
|
$
|
11.9
|
|
|
$
|
28.2
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation,
depletion and amortization
|
70.2
|
|
|
68.2
|
|
Amortization of debt
issuance costs
|
1.3
|
|
|
1.4
|
|
Change in value of
contingent consideration
|
1.6
|
|
|
(0.9)
|
|
Loss (gain) on
sale/disposal of assets and business, net
|
0.8
|
|
|
(14.6)
|
|
Gains from eminent
domain matter and property insurance claims
|
(6.0)
|
|
|
—
|
|
Impairment of
assets
|
—
|
|
|
1.3
|
|
Deferred income
taxes
|
2.0
|
|
|
10.1
|
|
Provision for
doubtful accounts and customer disputes
|
2.2
|
|
|
3.4
|
|
Stock-based
compensation
|
16.4
|
|
|
8.1
|
|
Other, net
|
(1.0)
|
|
|
(0.8)
|
|
Changes in assets and
liabilities, excluding effects of acquisitions:
|
|
|
|
Accounts
receivable
|
(33.9)
|
|
|
(44.4)
|
|
Inventories
|
(2.7)
|
|
|
(0.2)
|
|
Prepaid expenses and
other current assets
|
2.9
|
|
|
(4.8)
|
|
Other assets and
liabilities
|
(1.3)
|
|
|
(1.6)
|
|
Accounts payable and
accrued liabilities
|
27.7
|
|
|
36.8
|
|
Net cash provided by
operating activities
|
92.1
|
|
|
90.2
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchases of
property, plant and equipment
|
(28.6)
|
|
|
(32.2)
|
|
Payments for
acquisitions, net of cash acquired
|
—
|
|
|
(72.3)
|
|
Proceeds from
disposals of businesses and property, plant and
equipment
|
1.2
|
|
|
18.6
|
|
Purchases of
environmental credits
|
—
|
|
|
(2.8)
|
|
Proceeds from eminent
domain matter and property insurance claims
|
6.0
|
|
|
2.1
|
|
Net cash used in
investing activities
|
(21.4)
|
|
|
(86.6)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Proceeds from
revolver borrowings
|
273.3
|
|
|
338.2
|
|
Repayments of
revolver borrowings
|
(277.2)
|
|
|
(310.7)
|
|
Proceeds from stock
option exercises
|
0.2
|
|
|
0.1
|
|
Payments of other
long-term obligations
|
(33.4)
|
|
|
(5.6)
|
|
Payments for other
financing
|
(24.2)
|
|
|
(21.5)
|
|
Treasury share
purchases
|
(2.2)
|
|
|
(1.9)
|
|
Other
proceeds
|
—
|
|
|
0.5
|
|
Net cash used in
financing activities
|
(63.5)
|
|
|
(0.9)
|
|
EFFECT OF EXCHANGE
RATES ON CASH AND CASH EQUIVALENTS
|
(0.2)
|
|
|
(0.1)
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
7.0
|
|
|
2.6
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
20.0
|
|
|
22.6
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$
|
27.0
|
|
|
$
|
25.2
|
|
NON-GAAP FINANCIAL
MEASURES
(Unaudited)
Total Adjusted EBITDA and Total Adjusted
EBITDA Margin
Total Adjusted EBITDA and Total Adjusted EBITDA Margin are
non-GAAP financial measures. We define Total Adjusted EBITDA
as our net income (loss), excluding the impact of income tax
expense (benefit), depreciation, depletion and amortization, net
interest expense and certain other non-cash, non-recurring and/or
unusual, non-operating items including, but not limited to:
non-cash stock compensation expense, non-cash change in value of
contingent consideration, impairment of assets, acquisition-related
costs, officer transition expenses, quarry dredge costs for
specific event and hurricane-related loss recoveries, net.
Acquisition-related costs consist of fees and expenses for
accountants, lawyers and other professionals incurred during the
negotiation and closing of strategic acquisitions and certain
acquired entities' management severance costs.
Acquisition-related costs do not include fees or expenses
associated with post-closing integration of strategic
acquisitions. We define Total Adjusted EBITDA Margin as the
amount determined by dividing Total Adjusted EBITDA by total
revenue. We have included Total Adjusted EBITDA and Total
Adjusted EBITDA Margin herein because they are widely used by
investors for valuation and comparing our financial performance
with the performance of other building material companies. We
also use Total Adjusted EBITDA and Total Adjusted EBITDA Margin to
monitor and compare the financial performance of our
operations. Total Adjusted EBITDA does not give effect to the
cash we must use to service our debt or pay our income taxes and
thus does not reflect the funds actually available for capital
expenditures. In addition, our presentation of Total Adjusted
EBITDA may not be comparable to similarly titled measures other
companies report. Total Adjusted EBITDA and Total Adjusted
EBITDA Margin are not intended to be used as an alternative to any
measure of our performance in accordance with GAAP. The
following table reconciles Total Adjusted EBITDA to the most
directly comparable GAAP financial measure, which is net income
(loss) (in millions).
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Total Adjusted
EBITDA Reconciliation
|
|
|
|
|
|
|
|
Net income
|
$
|
13.6
|
|
|
$
|
15.8
|
|
|
$
|
11.9
|
|
|
$
|
28.2
|
|
Add: Income tax
expense
|
8.3
|
|
|
8.6
|
|
|
8.3
|
|
|
14.5
|
|
Income before income
taxes
|
21.9
|
|
|
24.4
|
|
|
20.2
|
|
|
42.7
|
|
Add:
Depreciation, depletion and amortization
|
22.3
|
|
|
25.5
|
|
|
70.2
|
|
|
68.2
|
|
Add: Interest
expense, net
|
11.6
|
|
|
11.7
|
|
|
34.8
|
|
|
34.6
|
|
Add: Non-cash
stock compensation expense
|
5.3
|
|
|
2.9
|
|
|
16.4
|
|
|
8.0
|
|
Add/Subtract:
Eminent domain matter
|
—
|
|
|
0.6
|
|
|
(5.3)
|
|
|
0.6
|
|
Subtract:
Hurricane-related loss recoveries, net
|
—
|
|
|
—
|
|
|
(2.1)
|
|
|
(0.2)
|
|
Add/Subtract:
Non-cash change in value of contingent consideration
|
0.3
|
|
|
0.4
|
|
|
1.6
|
|
|
(0.9)
|
|
Add:
Acquisition-related costs
|
0.2
|
|
|
1.7
|
|
|
1.0
|
|
|
5.2
|
|
Add: Officer
transition expenses
|
0.5
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
Add: Loss on
mixer truck fire
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
Add: Quarry
dredge costs for specific event
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.8
|
|
Add: Impairment
of assets
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
Add: Purchase
accounting adjustments for inventory
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
Add: Litigation
settlement costs
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
Subtract: Gain on
sale of business
|
—
|
|
|
(14.6)
|
|
|
—
|
|
|
(14.6)
|
|
Total Adjusted
EBITDA
|
$
|
62.1
|
|
|
$
|
53.7
|
|
|
$
|
138.6
|
|
|
$
|
147.3
|
|
|
|
|
|
|
|
|
|
Net income
margin
|
3.3
|
%
|
|
3.9
|
%
|
|
1.1
|
%
|
|
2.5
|
%
|
Total Adjusted EBITDA
Margin
|
15.2
|
%
|
|
13.3
|
%
|
|
12.5
|
%
|
|
13.0
|
%
|
Adjusted Gross Profit and Adjusted Gross
Margin
Adjusted Gross Profit and Adjusted Gross Margin are non-GAAP
financial measures. We define Adjusted Gross Profit as our
operating income, excluding the impact of depreciation, depletion
and amortization ("DD&A"), selling, general and administrative
expenses, change in value of contingent consideration, quarry
dredge costs for specific event, hurricane-related losses in COGS
before DD&A, purchase accounting adjustments for inventory and
loss (gain) on sale/disposal of assets and business, net. We
define Adjusted Gross Margin as the amount determined by dividing
Adjusted Gross Profit by total revenue. We have included
Adjusted Gross Profit and Adjusted Gross Margin herein because they
are widely used by investors for valuing and comparing our
financial performance from period to period. We also use
Adjusted Gross Profit and Adjusted Gross Margin to monitor and
compare the financial performance of our operations. Adjusted
Gross Profit and Adjusted Gross Margin are not intended to be used
as an alternative to any measure of our performance in accordance
with GAAP. The following table reconciles Adjusted Gross
Profit to the most directly comparable GAAP financial measure,
which is operating income (in millions).
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Adjusted Gross
Profit Reconciliation
|
|
|
|
|
|
|
|
Operating
income
|
$
|
33.3
|
|
|
$
|
35.0
|
|
|
$
|
47.2
|
|
|
$
|
73.2
|
|
Add: Depreciation,
depletion and amortization
|
22.3
|
|
|
25.5
|
|
|
70.2
|
|
|
68.2
|
|
Add: Selling, general
and administrative expenses
|
32.0
|
|
|
32.2
|
|
|
103.3
|
|
|
96.4
|
|
Add/Subtract: Change
in value of contingent consideration
|
0.3
|
|
|
0.4
|
|
|
1.6
|
|
|
(0.9)
|
|
Add: Impairment of
assets
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
Add: Quarry dredge
costs for specific event
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.8
|
|
Add: Eminent domain
costs
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
Add:
Hurricane-related losses in COGS before DD&A
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
Add: Purchase
accounting adjustments for inventory
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
Add/Subtract: Loss
(gain) on sale/disposal of assets and business, net
|
(0.2)
|
|
|
(14.1)
|
|
|
0.8
|
|
|
(14.6)
|
|
Adjusted Gross
Profit
|
$
|
87.7
|
|
|
$
|
79.8
|
|
|
$
|
223.1
|
|
|
$
|
226.0
|
|
|
|
|
|
|
|
|
|
Operating income
margin
|
8.1
|
%
|
|
8.7
|
%
|
|
4.2
|
%
|
|
6.4
|
%
|
Adjusted Gross Profit
Margin
|
21.4
|
%
|
|
19.7
|
%
|
|
20.1
|
%
|
|
19.9
|
%
|
Adjusted SG&A and Adjusted SG&A as a
Percentage of Revenue
Adjusted selling, general and administrative expenses
("SG&A") and Adjusted SG&A as a percentage of revenue are
non-GAAP financial measures. We define Adjusted SG&A as
selling, general and administrative expenses, excluding the impact
of non-cash stock compensation expense and acquisition-related
costs. We define Adjusted SG&A as a percentage of revenue
as Adjusted SG&A divided by total revenue. We have
included Adjusted SG&A and Adjusted SG&A as a percentage of
revenue herein because they are used by investors to compare our
SG&A leverage with the performance of other building materials
companies. We use Adjusted SG&A and Adjusted SG&A as
a percentage of revenue to monitor and compare the financial
performance of our operations. Adjusted SG&A and Adjusted
SG&A as a percentage of revenue are not intended to be used as
an alternative to any measure of our performance under GAAP.
The following table reconciles Adjusted SG&A to the most
directly comparable GAAP financial measure, which is SG&A (in
millions).
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Adjusted
SG&A
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
$
|
32.0
|
|
|
$
|
32.2
|
|
|
$
|
103.3
|
|
|
$
|
96.4
|
|
Subtract: Non-cash
stock compensation expense
|
(5.3)
|
|
|
(2.9)
|
|
|
(16.4)
|
|
|
(8.0)
|
|
Subtract:
Acquisition-related costs
|
(0.2)
|
|
|
(1.7)
|
|
|
(1.0)
|
|
|
(5.2)
|
|
Subtract: Litigation
settlement costs
|
—
|
|
|
(0.9)
|
|
|
—
|
|
|
(0.9)
|
|
Subtract: Officer
transition expenses
|
(0.5)
|
|
|
—
|
|
|
(1.1)
|
|
|
—
|
|
Adjusted
SG&A
|
$
|
26.0
|
|
|
$
|
26.7
|
|
|
$
|
84.8
|
|
|
$
|
82.3
|
|
|
|
|
|
|
|
|
|
SG&A as a
percentage of revenue
|
7.8
|
%
|
|
8.0
|
%
|
|
9.3
|
%
|
|
8.5
|
%
|
Adjusted SG&A as
a percentage of revenue
|
6.3
|
%
|
|
6.6
|
%
|
|
7.6
|
%
|
|
7.2
|
%
|
Adjusted Net Income Attributable to U.S.
Concrete and Adjusted Net Income Attributable to U.S. Concrete per
Diluted Share
Adjusted Net Income Attributable to U.S. Concrete and Adjusted
Net Income Attributable to U.S. Concrete per Diluted Share are
non-GAAP financial measures. We define Adjusted Net Income
Attributable to U.S. Concrete as net income (loss) attributable to
U.S. Concrete, net of taxes, income tax expense (benefit) and
certain other non-cash, non-recurring and/or unusual, non-operating
items including, but not limited to: non-cash stock compensation
expense, non-cash change in value of contingent consideration,
impairment of assets, acquisition-related costs, officer transition
expenses, quarry dredge costs for specific event and
hurricane-related loss recoveries, net. We also adjust
Adjusted Net Income Attributable to U.S. Concrete for a normalized
effective income tax rate of 27%. We define Adjusted Net Income
Attributable to U.S. Concrete per Diluted Share as Adjusted Net
Income Attributable to U.S. Concrete on a diluted per share
basis. Acquisition-related costs consist of fees and expenses
for accountants, lawyers and other professionals incurred during
the negotiation and closing of strategic acquisitions and certain
acquired entities' management severance costs.
Acquisition-related costs do not include fees or expenses
associated with post-closing integration of strategic
acquisitions.
We have included Adjusted Net Income Attributable to U.S.
Concrete and Adjusted Net Income Attributable to U.S. Concrete per
Diluted Share herein because they are used by investors for
valuation and comparing our financial performance with the
performance of other building material companies. We use
Adjusted Net Income Attributable to U.S. Concrete and Adjusted Net
Income Attributable to U.S. Concrete per Diluted Share to monitor
and compare the financial performance of our operations.
Adjusted Net Income Attributable to U.S. Concrete and Adjusted Net
Income Attributable to U.S. Concrete per Diluted Share are not
intended to be used as an alternative to any measure of our
performance in accordance with GAAP.
The following tables reconcile (i) Adjusted Net Income
Attributable to U.S. Concrete to the most directly comparable GAAP
financial measure, which is net income (loss) attributable to U.S.
Concrete and (ii) Adjusted Net Income Attributable to U.S. Concrete
per Diluted Share to the most directly comparable GAAP financial
measure, which is net income (loss) attributable to U.S. Concrete
per diluted share (in millions except per share amounts).
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Adjusted Net
Income Attributable to U.S. Concrete Reconciliation
|
|
|
|
|
|
|
|
Net income
attributable to U.S. Concrete
|
$
|
13.0
|
|
|
$
|
15.6
|
|
|
$
|
11.0
|
|
|
$
|
28.0
|
|
Add: Income tax
expense
|
8.3
|
|
|
8.6
|
|
|
8.3
|
|
|
14.5
|
|
Adjusted income
before income taxes
|
21.3
|
|
|
24.2
|
|
|
19.3
|
|
|
42.5
|
|
Add: Non-cash stock
compensation expense
|
5.3
|
|
|
2.9
|
|
|
16.4
|
|
|
8.0
|
|
Add/Subtract:
Non-cash change in value of contingent consideration
|
0.3
|
|
|
0.4
|
|
|
1.6
|
|
|
(0.9)
|
|
Add:
Acquisition-related costs
|
0.2
|
|
|
1.7
|
|
|
1.0
|
|
|
5.2
|
|
Add: Officer
transition expenses
|
0.5
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
Add: Loss on mixer
truck fire
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
Subtract: Eminent
domain matter
|
—
|
|
|
0.6
|
|
|
(5.3)
|
|
|
0.6
|
|
Add: Quarry dredge
costs for specific event
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.8
|
|
Add: Litigation
settlement costs
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
Subtract:
Hurricane-related loss recoveries, net
|
—
|
|
|
—
|
|
|
(2.1)
|
|
|
(0.2)
|
|
Add: Impact of
impairment of assets
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
Add: Purchase
accounting adjustments for inventory
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
Subtract: Gain on
sale of business
|
—
|
|
|
(14.6)
|
|
|
—
|
|
|
(14.6)
|
|
Adjusted income
before income taxes
|
27.6
|
|
|
16.3
|
|
|
32.7
|
|
|
44.3
|
|
Subtract:
Normalized income tax expense(1)
|
(7.4)
|
|
|
(4.4)
|
|
|
(8.8)
|
|
|
(12.0)
|
|
Adjusted Net Income
Attributable to U.S. Concrete
|
$
|
20.2
|
|
|
$
|
11.9
|
|
|
$
|
23.9
|
|
|
$
|
32.3
|
|
|
|
|
|
|
(1) Assumes a
normalized effective tax rate of 27% in all periods.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Adjusted Net
Income Attributable to U.S. Concrete per Diluted Share
Reconciliation
|
|
|
|
|
|
|
|
Net income
attributable to U.S. Concrete
|
$
|
0.79
|
|
|
$
|
0.94
|
|
|
$
|
0.67
|
|
|
$
|
1.70
|
|
Add: Income tax
expense
|
0.50
|
|
|
0.53
|
|
|
0.51
|
|
|
0.89
|
|
Adjusted income
before income taxes
|
1.29
|
|
|
1.47
|
|
|
1.18
|
|
|
2.59
|
|
Add: Impact of
non-cash stock compensation expense
|
0.32
|
|
|
0.18
|
|
|
1.00
|
|
|
0.49
|
|
Add/Subtract:
Impact of non-cash change in value of contingent
consideration
|
0.03
|
|
|
0.02
|
|
|
0.10
|
|
|
(0.06)
|
|
Add: Impact of
acquisition-related costs
|
—
|
|
|
0.10
|
|
|
0.06
|
|
|
0.32
|
|
Add: Impact of
officer transition expenses
|
0.04
|
|
|
—
|
|
|
0.07
|
|
|
—
|
|
Add: Impact of
loss on mixer truck fire
|
—
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
Add: Impact of
quarry dredge costs for specific event
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.04
|
|
Add/Subtract: Impact
of eminent domain matter
|
—
|
|
|
0.03
|
|
|
(0.32)
|
|
|
0.03
|
|
Add: Impact of
litigation settlement costs
|
—
|
|
|
0.05
|
|
|
—
|
|
|
0.05
|
|
Subtract: Impact of
hurricane-related loss recoveries, net
|
—
|
|
|
—
|
|
|
(0.13)
|
|
|
(0.01)
|
|
Add: Impact of
impairment of assets
|
—
|
|
|
—
|
|
|
—
|
|
|
0.08
|
|
Add: Impact of
purchase accounting adjustments for inventory
|
—
|
|
|
—
|
|
|
—
|
|
|
0.04
|
|
Subtract: Impact of
gain on sale of business
|
—
|
|
|
(0.88)
|
|
|
—
|
|
|
(0.88)
|
|
Adjusted income
before income taxes
|
1.68
|
|
|
0.98
|
|
|
2.00
|
|
|
2.69
|
|
Subtract:
Normalized income tax expense(1)
|
(0.46)
|
|
|
(0.26)
|
|
|
(0.54)
|
|
|
(0.72)
|
|
Adjusted Net Income
Attributable to U.S. Concrete per Diluted Share
|
$
|
1.22
|
|
|
$
|
0.72
|
|
|
$
|
1.46
|
|
|
$
|
1.97
|
|
|
(1) Assumes a
normalized effective tax rate of 27% in all periods.
|
Adjusted Free Cash Flow
Adjusted Free Cash Flow is a non-GAAP financial measure.
We define Adjusted Free Cash Flow as net cash provided by operating
activities less purchases of property, plant and equipment plus
proceeds from the disposal of businesses and property, plant and
equipment, eminent domain matter and property loss claims. We
consider Adjusted Free Cash Flow to be an important indicator of
our ability to service our debt and generate cash for acquisitions
and other strategic investments. However, Adjusted Free Cash
Flow is not intended to be used as an alternative to any measure of
our liquidity in accordance with GAAP. The following table
reconciles Adjusted Free Cash Flow to the most directly comparable
GAAP financial measure, which is net cash provided by operating
activities (in millions).
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Adjusted Free Cash
Flow Reconciliation
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
51.5
|
|
|
$
|
42.3
|
|
|
$
|
92.1
|
|
|
$
|
90.2
|
|
Subtract: Purchases
of property, plant and equipment
|
(10.5)
|
|
|
(11.4)
|
|
|
(28.6)
|
|
|
(32.2)
|
|
Subtract: Purchases
of environmental credits
|
—
|
|
|
(2.8)
|
|
|
—
|
|
|
(2.8)
|
|
Add: Proceeds from
disposals of businesses and property, plant and
equipment
|
0.5
|
|
|
17.4
|
|
|
1.2
|
|
|
18.6
|
|
Add: Proceeds from
eminent domain matter and property insurance claims
|
—
|
|
|
—
|
|
|
6.0
|
|
|
2.1
|
|
Adjusted Free Cash
Flow
|
$
|
41.5
|
|
|
$
|
45.5
|
|
|
$
|
70.7
|
|
|
$
|
75.9
|
|
Net Debt
Net Debt is a non-GAAP financial measure. We define Net
Debt as total debt, including current maturities and capital lease
obligations, less cash and cash equivalents. We believe that
Net Debt is useful to investors as a measure of our financial
position. We use Net Debt to monitor and compare our
financial position from period to period. However, Net Debt
is not intended to be used as an alternative to any measure of our
financial position in accordance with GAAP. The following
table reconciles Net Debt to the most directly comparable GAAP
financial measure, which is total debt, including current
maturities and capital lease obligations (in millions).
|
As
of
|
|
As
of
|
|
September 30,
2019
|
|
December 31,
2018
|
Net Debt
Reconciliation
|
|
|
|
Total debt, including
current maturities and finance lease obligations
|
$
|
705.7
|
|
|
$
|
714.1
|
|
Subtract: cash and
cash equivalents
|
(27.0)
|
|
|
(20.0)
|
|
Net Debt
|
$
|
678.7
|
|
|
$
|
694.1
|
|
Net Debt to Total Adjusted EBITDA
Net Debt to Total Adjusted EBITDA is a non-GAAP financial
measure. We define Net Debt to Total Adjusted EBITDA as Net Debt
divided by Total Adjusted EBITDA for the applicable last
twelve-month period. We define Total Adjusted EBITDA as our
net income (loss), excluding the impact of income tax expense
(benefit), depreciation, depletion and amortization, net interest
expense and certain other non-cash, non-recurring and/or unusual,
non-operating items including, but not limited to: non-cash stock
compensation expense, non-cash change in value of contingent
consideration, impairment of assets, acquisition-related costs,
officer transition expenses, quarry dredge costs for specific event
and hurricane-related loss recoveries, net. We believe that
Net Debt to Total Adjusted EBITDA is useful to investors as a
measure of our financial position. We use this measure to
monitor and compare our financial position from period to
period. However, Net Debt to Total Adjusted EBITDA is not
intended to be used as an alternative to any measure of our
financial position in accordance with GAAP. The following
table presents our calculation of Net Debt to Total Adjusted EBITDA
and the most directly comparable GAAP ratio, which is total debt to
last twelve months ("LTM") net income (in millions).
|
|
Twelve
Months
|
|
|
Ended
|
|
|
September 30,
2019
|
Total Adjusted
EBITDA Reconciliation
|
|
|
Net income
|
|
$
|
14.9
|
|
Add: Income tax
expense
|
|
10.6
|
|
Income before income
taxes
|
|
25.5
|
|
Add:
Depreciation, depletion and amortization
|
|
93.8
|
|
Add: Interest
expense, net
|
|
46.6
|
|
Add: Non-cash
stock compensation expense
|
|
18.9
|
|
Add: Non-cash
change in value of contingent consideration
|
|
2.5
|
|
Add:
Acquisition-related costs
|
|
2.0
|
|
Add: Loss on
mixer truck fire
|
|
0.7
|
|
Add: Quarry
dredge costs for specific event
|
|
0.3
|
|
Add: Litigation
settlement cost
|
|
1.2
|
|
Add: Officer
transition expenses
|
|
1.1
|
|
Add: Purchase
accounting adjustments for inventory
|
|
0.1
|
|
Subtract:
Eminent domain matter
|
|
(5.2)
|
|
Subtract:
Hurricane-related loss recoveries, net
|
|
(2.7)
|
|
Total Adjusted
EBITDA
|
|
184.8
|
|
|
|
|
Net Debt
|
|
$
|
678.7
|
|
|
|
|
Total debt to LTM
income
|
|
47.36x
|
|
Net Debt to Total
Adjusted EBITDA as of September 30, 2019
|
|
3.67x
|
|
Source: USCR-E
Contact:
|
U.S. Concrete, Inc.
Investor Relations
|
|
844-828-4774
|
|
IR@us-concrete.com
|
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SOURCE U.S. Concrete, Inc.