EULESS, Texas, May 5, 2020
/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 March 31, 2020.
FIRST QUARTER 2020 RESULTS COMPARED TO FIRST QUARTER
2019(1)
- Consolidated revenue increased 0.4% to $334.4 million
- Ready-mixed concrete revenue increased 0.6% to $292.2 million
- Aggregate products revenue increased 1.6% to $43.6 million
- Aggregate products sales volume increased 5.4% to 2.6 million
tons
- Net loss was $2.8 million
compared to $2.6 million
- Total Adjusted EBITDA(2) was $34.2 million compared to $34.5 million
- Net cash provided by operating activities more than doubled to
$44.0 million
- Adjusted Free Cash Flow(2) more than doubled to
$36.9 million
- Available liquidity of $152.6
million as of March 31, 2020,
which does not include the additional $180
million of available liquidity from the delayed draw term
loan credit facility entered into on April
17, 2020
(1)
|
Certain
computations within this press release may reflect rounding
adjustments.
|
(2)
|
Total Adjusted
EBITDA, Adjusted Free Cash Flow and related margins are non-GAAP
financial measures. Please refer to the reconciliations and
other information at the end of this press release.
|
Ronnie Pruitt, President and
Chief Executive Officer of U.S. Concrete, Inc. highlighted, "We are
very pleased with our financial results for the first quarter,
which we accomplished in spite of significant rainfall in
Texas and the initial impacts of
COVID-19. Since early March, we have been focused non-stop on
increased efforts to evaluate all areas of our business, both
financially and operationally, to further drive process
improvements and maximize financial flexibility. Our operations
have been generally deemed to be essential, and we remain
operational in each of our regions."
Mr. Pruitt continued, "Our Coram Materials acquisition in
February enhanced our vertical integrated position in the
New York market. While our
production volumes at Coram have
decreased due to the COVID-19 related slowdown in New York City, we are starting to experience
improved production volumes in recent days. We are pleased with the
business and our ability to integrate their operations, which
generated $1.7 million of Adjusted
EBITDA during the quarter post-acquisition.
"We ended the quarter with $153
million in cash and available borrowing capacity under our
asset-based credit facility. Having financial security to
proactively manage our business while we navigate through these
unprecedented times is critical. U.S. Concrete has a strong
liquidity position with no near-term debt maturities and was
enhanced by the recent addition of our new $180 million delayed draw term loan entered into
in April."
Mr. Pruitt concluded, "Due to the uncertainty surrounding the
underlying impact of the operating restrictions resulting from the
COVID-19 pandemic, we have elected to withdraw our previously
communicated 2020 financial guidance. Even though certain of our
projects in New York and
San Francisco have been delayed
due to the definition of 'essential construction work' in those
local markets, the majority of our markets continue to see solid
demand. We have taken swift action throughout the business to
realign our cost structure with our operating volumes and will
continue to reassess our costs in light of evolving market
conditions. We believe we are well positioned to weather this storm
and capitalize on the opportunities that will present themselves as
the economy rebounds."
OPERATING RESULTS
READY-MIXED CONCRETE SEGMENT
|
|
Three Months Ended
March 31,
|
($ in millions
except selling prices)
|
|
2020
|
|
2019
|
Ready-Mixed
Concrete Segment:
|
|
|
|
|
Revenue
|
|
$
|
292.2
|
|
|
$
|
290.4
|
|
Adjusted
EBITDA
|
|
$
|
31.7
|
|
|
$
|
34.5
|
|
|
|
|
|
|
Ready-Mixed
Concrete Data:
|
|
|
|
|
Average selling price
("ASP") per cubic yard(1)
|
|
$
|
144.30
|
|
|
$
|
139.60
|
|
Sales volume in
thousand cubic yards
|
|
2,022
|
|
|
2,077
|
|
|
|
(1)
|
Calculation excludes
certain ancillary revenue that is reported within the
segment.
|
Driven by both product mix and geographical pricing mix, revenue
from the ready-mixed concrete segment increased $1.8 million, or 0.6%, compared to the prior year
first quarter, despite a 2.6% decrease in volume. Adjusted
EBITDA growth was hindered by lower volumes, higher labor, and
fleet repair and maintenance costs.
AGGREGATE PRODUCTS SEGMENT
|
|
Three Months Ended
March 31,
|
($ in millions
except selling prices)
|
|
2020
|
|
2019
|
Aggregate Products
Segment:
|
|
|
|
|
Sales to
external customers
|
|
$
|
31.1
|
|
|
$
|
31.8
|
|
Intersegment
sales
|
|
12.5
|
|
|
11.1
|
|
Total aggregate
products revenue
|
|
$
|
43.6
|
|
|
$
|
42.9
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
11.3
|
|
|
$
|
10.4
|
|
|
|
|
|
|
Aggregate Products
Data:
|
|
|
|
|
ASP per
ton(1)
|
|
$
|
12.23
|
|
|
$
|
12.12
|
|
Sales volume in
thousand tons
|
|
2,632
|
|
|
2,498
|
|
|
|
(1)
|
The calculation of
ASP excludes certain other ancillary revenue and certain 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 increased $0.7
million in the quarter, compared to the prior year first
quarter, resulting from a 5.4% increase in sales volume and a 0.9%
increase in average selling price related to the mix of products
sold. Aggregate products Adjusted EBITDA of $11.3 million in the 2020 first quarter increased
8.7% from the prior first year quarter, primarily related to
improved operating efficiencies, including the impact of our Coram
Materials acquisition partially offset by inclement weather in
Texas.
CONSOLIDATED FIRST QUARTER 2020 RESULTS COMPARED TO FIRST
QUARTER 2019
Consolidated revenue increased 0.4% compared to the prior year
first quarter. During the first quarter of 2020, operating
income was $3.1 million compared to
$7.9 million in the first quarter of
2019, with an operating income margin of 0.9% compared to 2.4% in
the first quarter of 2019.
Selling, general and administrative expenses ("SG&A") as a
percentage of revenue was 10.1% in the 2020 first quarter compared
to 9.6% in the prior year first quarter. SG&A increased
$1.6 million, or 5.0%, for the
quarter ended March 31, 2020, in comparison to the
corresponding 2019 quarter, primarily as a result of higher
acquisition-related costs and an increase in non-cash stock-based
compensation expense, partially offset by the positive impact of
certain personnel cost reductions. On a non-GAAP basis, Adjusted
SG&A, which excludes non-cash stock compensation,
acquisition-related costs and officer transition expenses, was 8.5%
in the 2020 first quarter compared to 9.1% in the prior year first
quarter, as we benefited from lower personnel costs. 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 2020 first
quarter was $44.0 million, compared
to $21.9 million in the prior year
first quarter. The Company's Adjusted Free Cash Flow in the
2020 first quarter was $36.9 million,
as compared to $15.1 million in the
prior year first quarter. 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 March 31, 2020, the Company had cash and cash
equivalents of $26.4 million and
total debt of $789.9 million,
resulting in Net Debt of $763.5
million. Net Debt increased by $116.8 million from December 31, 2019, due
primarily to the acquisition of Coram Materials in February
2020. The Company had $126.2
million of unused availability under its revolving credit
facility at March 31, 2020, resulting in total liquidity of
$152.6 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.
CONFERENCE CALL AND WEBCAST DETAILS
U.S. Concrete will host a conference call on Tuesday,
May 5, 2020 at 8:30 a.m. Eastern
Time (7:30 a.m. Central Time),
to review its first quarter 2020 results. To participate in
the call, please dial (877) 312-8806 – Conference ID: 2787005 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 City, 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. These
risks and uncertainties also include the effects of COVID-19; the
length and severity of the COVID-19 pandemic; the pace of recovery
following the COVID-19 pandemic; our ability to implement cost
containment strategies; and the adverse effects of COVID-19 on our
business, the economy and the markets we serve.
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
March 31,
|
|
2020
|
|
2019
|
Revenue
|
$
|
334.4
|
|
|
$
|
333.1
|
|
Cost of goods sold
before depreciation, depletion and amortization
|
273.9
|
|
|
268.4
|
|
Selling, general and
administrative expenses
|
33.7
|
|
|
32.1
|
|
Depreciation,
depletion and amortization
|
23.4
|
|
|
22.8
|
|
Change in value of
contingent consideration
|
0.3
|
|
|
1.0
|
|
Loss on sale/disposal
of assets, net
|
—
|
|
|
0.9
|
|
Operating
income
|
3.1
|
|
|
7.9
|
|
Interest expense,
net
|
11.4
|
|
|
11.6
|
|
Other income,
net
|
(0.6)
|
|
|
(0.4)
|
|
Income (loss) before
income taxes
|
(7.7)
|
|
|
(3.3)
|
|
Income tax expense
(benefit)
|
(4.9)
|
|
|
(0.7)
|
|
Net income
(loss)
|
(2.8)
|
|
|
(2.6)
|
|
Less: Net loss
(income) attributable to non-controlling interest
|
(0.3)
|
|
|
(0.1)
|
|
Net income (loss)
attributable to U.S. Concrete
|
$
|
(3.1)
|
|
|
$
|
(2.7)
|
|
|
|
|
|
Earnings (loss) per
share attributable to U.S. Concrete:
|
|
|
|
Basic
|
$
|
(0.19)
|
|
|
$
|
(0.16)
|
|
Diluted
|
$
|
(0.19)
|
|
|
$
|
(0.16)
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
Basic
|
16.5
|
|
|
16.3
|
|
Diluted
|
16.5
|
|
|
16.3
|
|
U.S. CONCRETE,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in
millions)
|
|
|
March 31,
2020
|
|
December 31,
2019
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
26.4
|
|
|
$
|
40.6
|
|
Trade accounts
receivable, net
|
215.2
|
|
|
233.1
|
|
Inventories
|
69.2
|
|
|
59.0
|
|
Other receivables,
net
|
13.1
|
|
|
8.4
|
|
Prepaid expenses and
other
|
8.7
|
|
|
7.9
|
|
Total current
assets
|
332.6
|
|
|
349.0
|
|
Property, plant and
equipment, net
|
804.0
|
|
|
673.5
|
|
Operating lease
assets
|
71.7
|
|
|
69.8
|
|
Goodwill
|
239.5
|
|
|
239.5
|
|
Intangible assets,
net
|
87.1
|
|
|
92.4
|
|
Other
assets
|
8.2
|
|
|
9.1
|
|
Total
assets
|
$
|
1,543.1
|
|
|
$
|
1,433.3
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
136.2
|
|
|
$
|
136.4
|
|
Accrued
liabilities
|
71.0
|
|
|
63.5
|
|
Current maturities of
long-term debt
|
27.3
|
|
|
32.5
|
|
Current operating
lease liabilities
|
13.7
|
|
|
12.9
|
|
Total current
liabilities
|
248.2
|
|
|
245.3
|
|
Long-term debt, net
of current maturities
|
762.6
|
|
|
654.8
|
|
Long-term operating
lease liabilities
|
61.0
|
|
|
59.7
|
|
Other long-term
obligations and deferred credits
|
49.5
|
|
|
49.1
|
|
Deferred income
taxes
|
55.7
|
|
|
54.8
|
|
Total
liabilities
|
1,177.0
|
|
|
1,063.7
|
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Additional paid-in
capital
|
355.9
|
|
|
348.9
|
|
Retained
earnings
|
24.7
|
|
|
31.1
|
|
Treasury stock, at
cost
|
(37.7)
|
|
|
(36.6)
|
|
Total shareholders'
equity
|
342.9
|
|
|
343.4
|
|
Non-controlling
interest
|
23.2
|
|
|
26.2
|
|
Total
equity
|
366.1
|
|
|
369.6
|
|
Total liabilities and
equity
|
$
|
1,543.1
|
|
|
$
|
1,433.3
|
|
U.S. CONCRETE,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in
millions)
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
(loss)
|
$
|
(2.8)
|
|
|
$
|
(2.6)
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation,
depletion and amortization
|
23.4
|
|
|
22.8
|
|
Amortization of debt
issuance costs
|
0.4
|
|
|
0.4
|
|
Change in value of
contingent consideration
|
0.3
|
|
|
1.0
|
|
Loss on sale/disposal
of assets, net
|
—
|
|
|
0.9
|
|
Deferred income
taxes
|
2.2
|
|
|
2.2
|
|
Provision for
doubtful accounts and customer disputes
|
0.3
|
|
|
0.4
|
|
Stock-based
compensation
|
3.7
|
|
|
1.7
|
|
Other, net
|
(0.8)
|
|
|
(0.5)
|
|
Changes in assets and
liabilities, excluding effects of acquisitions:
|
|
|
|
Accounts
receivable
|
15.1
|
|
|
0.6
|
|
Inventories
|
(0.2)
|
|
|
0.7
|
|
Prepaid expenses and
other current assets
|
(5.2)
|
|
|
(3.5)
|
|
Other assets and
liabilities
|
0.3
|
|
|
(1.0)
|
|
Accounts payable and
accrued liabilities
|
7.3
|
|
|
(1.2)
|
|
Net cash provided by
operating activities
|
44.0
|
|
|
21.9
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchases of
property, plant and equipment
|
(7.3)
|
|
|
(7.2)
|
|
Payments for
acquisitions, net of cash acquired
|
(140.2)
|
|
|
—
|
|
Proceeds from sale of
businesses and property, plant and equipment
|
0.2
|
|
|
0.4
|
|
Net cash used in
investing activities
|
(147.3)
|
|
|
(6.8)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Proceeds from
revolver borrowings
|
170.2
|
|
|
76.3
|
|
Repayments of
revolver borrowings
|
(79.9)
|
|
|
(74.8)
|
|
Proceeds from stock
option exercises
|
—
|
|
|
0.2
|
|
Payments of other
long-term obligations
|
(2.9)
|
|
|
(3.7)
|
|
Payments for finance
leases, promissory notes and other
|
(8.4)
|
|
|
(8.1)
|
|
Debt issuance
costs
|
(1.0)
|
|
|
—
|
|
Shares redeemed for
employee income tax obligations
|
(1.1)
|
|
|
(1.1)
|
|
Other
proceeds
|
12.2
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
89.1
|
|
|
(11.2)
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
(14.2)
|
|
|
3.9
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
40.6
|
|
|
20.0
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$
|
26.4
|
|
|
$
|
23.9
|
|
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, and purchase accounting
adjustments for inventory. 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
March 31,
|
|
|
2020
|
|
2019
|
Total Adjusted
EBITDA Reconciliation
|
|
|
|
|
Net income
(loss)
|
|
$
|
(2.8)
|
|
|
$
|
(2.6)
|
|
Add/(subtract):
Income tax expense (benefit)
|
|
(4.9)
|
|
|
(0.7)
|
|
Income (loss) before
income taxes
|
|
(7.7)
|
|
|
(3.3)
|
|
Add:
Depreciation, depletion and amortization
|
|
23.4
|
|
|
22.8
|
|
Add: Interest
expense, net
|
|
11.4
|
|
|
11.6
|
|
Add: Non-cash
stock compensation expense
|
|
3.7
|
|
|
1.7
|
|
Add: Non-cash
change in value of contingent consideration
|
|
0.3
|
|
|
1.0
|
|
Add:
Acquisition-related costs
|
|
1.3
|
|
|
0.1
|
|
Add: Officer
transition expenses
|
|
0.2
|
|
|
—
|
|
Add: Loss on
mixer truck fire
|
|
—
|
|
|
0.6
|
|
Add: Purchase
accounting adjustments for inventory
|
|
1.6
|
|
|
—
|
|
Total Adjusted
EBITDA
|
|
$
|
34.2
|
|
|
$
|
34.5
|
|
|
|
|
|
|
Net income (loss)
margin
|
|
(0.8)
|
%
|
|
(0.8)
|
%
|
Total Adjusted EBITDA
Margin
|
|
10.2
|
%
|
|
10.4
|
%
|
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, 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
March 31,
|
|
2020
|
|
2019
|
Adjusted Gross
Profit Reconciliation
|
|
|
|
Operating
income
|
$
|
3.1
|
|
|
$
|
7.9
|
|
Add: Depreciation,
depletion and amortization
|
23.4
|
|
|
22.8
|
|
Add: Selling, general
and administrative expenses
|
33.7
|
|
|
32.1
|
|
Add: Change in value
of contingent consideration
|
0.3
|
|
|
1.0
|
|
Add: Purchase
accounting adjustments for inventory
|
1.6
|
|
|
—
|
|
Add: Loss on
sale/disposal of assets and business, net
|
—
|
|
|
0.9
|
|
Adjusted Gross
Profit
|
$
|
62.1
|
|
|
$
|
64.7
|
|
|
|
|
|
Operating income
margin
|
0.9
|
%
|
|
2.4
|
%
|
Adjusted Gross Profit
Margin
|
18.6
|
%
|
|
19.4
|
%
|
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, acquisition-related costs
and officer transition 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
March 31,
|
|
2020
|
|
2019
|
Adjusted
SG&A
|
|
|
|
Selling, general and
administrative expenses
|
$
|
33.7
|
|
|
$
|
32.1
|
|
Subtract: Non-cash
stock compensation expense
|
(3.7)
|
|
|
(1.7)
|
|
Subtract:
Acquisition-related costs
|
(1.3)
|
|
|
(0.1)
|
|
Subtract: Officer
transition expenses
|
(0.2)
|
|
|
—
|
|
Adjusted
SG&A
|
$
|
28.5
|
|
|
$
|
30.3
|
|
|
|
|
|
SG&A as a
percentage of revenue
|
10.1
|
%
|
|
9.6
|
%
|
Adjusted SG&A as
a percentage of revenue
|
8.5
|
%
|
|
9.1
|
%
|
Adjusted Net Income (Loss) Attributable to U.S. Concrete and
Adjusted Net Income (Loss) Attributable to U.S. Concrete per
Diluted Share
Adjusted Net Income (Loss) Attributable to U.S. Concrete and
Adjusted Net Income (Loss) Attributable to U.S. Concrete per
Diluted Share are non-GAAP financial measures. We define
Adjusted Net Income (Loss) 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, and purchase accounting
adjustments for inventory. We also adjust Adjusted Net Income
(Loss) Attributable to U.S. Concrete for a normalized effective
income tax rate of 27%. We define Adjusted Net Income (Loss)
Attributable to U.S. Concrete per Diluted Share as Adjusted Net
Income (Loss) 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 (Loss) Attributable to U.S.
Concrete and Adjusted Net Income (Loss) 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 (Loss) Attributable to U.S. Concrete and
Adjusted Net Income (Loss) Attributable to U.S. Concrete per
Diluted Share to monitor and compare the financial performance of
our operations. Adjusted Net Income (Loss) Attributable to
U.S. Concrete and Adjusted Net Income (Loss) 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 (Loss)
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 (Loss) 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
March 31,
|
|
2020
|
|
2019
|
Adjusted Net
Income (Loss) Attributable to U.S. Concrete
Reconciliation
|
|
|
|
Net income (loss)
attributable to U.S. Concrete
|
$
|
(3.1)
|
|
|
$
|
(2.7)
|
|
Add/Subtract:
Income tax expense (benefit)
|
(4.9)
|
|
|
(0.7)
|
|
Adjusted income
(loss) before income taxes
|
(8.0)
|
|
|
(3.4)
|
|
Add: Non-cash stock
compensation expense
|
3.7
|
|
|
1.7
|
|
Add: Non-cash change
in value of contingent consideration
|
0.3
|
|
|
1.0
|
|
Add:
Acquisition-related costs
|
1.3
|
|
|
0.1
|
|
Add: Officer
transition expenses
|
0.2
|
|
|
—
|
|
Add: Loss on mixer
truck fire
|
—
|
|
|
0.6
|
|
Add: Purchase
accounting adjustments for inventory
|
1.6
|
|
|
—
|
|
Adjusted income
(loss) before income taxes
|
(0.9)
|
|
|
—
|
|
Subtract:
Normalized income tax expense (benefit)(1)
|
(0.2)
|
|
|
—
|
|
Adjusted Net Income
(Loss) Attributable to U.S. Concrete
|
$
|
(0.7)
|
|
|
$
|
—
|
|
|
|
|
|
(1) Assumes a
normalized effective tax rate of 27% in all periods.
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Adjusted Net
Income (Loss) Attributable to U.S. Concrete per Diluted Share
Reconciliation
|
|
|
|
Net income (loss)
attributable to U.S. Concrete
|
$
|
(0.19)
|
|
|
$
|
(0.16)
|
|
Add: Income tax
expense (benefit)
|
(0.30)
|
|
|
(0.04)
|
|
Adjusted income
(loss) before income taxes
|
(0.49)
|
|
|
(0.20)
|
|
Add: Impact of
non-cash stock compensation expense
|
0.22
|
|
|
0.10
|
|
Add: Impact of
non-cash change in value of contingent consideration
|
0.02
|
|
|
0.06
|
|
Add: Impact of
acquisition-related costs
|
0.09
|
|
|
—
|
|
Add: Impact of
officer transition expenses
|
0.01
|
|
|
—
|
|
Add: Impact of
loss on mixer truck fire
|
—
|
|
|
0.04
|
|
Add: Impact of
purchase accounting adjustments for inventory
|
0.10
|
|
|
—
|
|
Adjusted income
(loss) before income taxes
|
(0.05)
|
|
|
—
|
|
Subtract:
Normalized income tax expense (benefit)(1)
|
(0.01)
|
|
|
—
|
|
Adjusted Net Income
(Loss) Attributable to U.S. Concrete per Diluted Share
|
$
|
(0.04)
|
|
|
$
|
—
|
|
|
|
|
|
(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
March 31,
|
|
2020
|
|
2019
|
Adjusted Free Cash
Flow Reconciliation
|
|
|
|
Net cash provided by
operating activities
|
$
|
44.0
|
|
|
$
|
21.9
|
|
Subtract: Purchases
of property, plant and equipment
|
(7.3)
|
|
|
(7.2)
|
|
Add: Proceeds from
disposals of businesses and property, plant and
equipment
|
0.2
|
|
|
0.4
|
|
Adjusted Free Cash
Flow
|
$
|
36.9
|
|
|
$
|
15.1
|
|
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
|
|
|
March 31,
2020
|
|
December 31,
2019
|
Net Debt
Reconciliation
|
|
|
|
|
Total debt, including
current maturities and finance lease obligations
|
|
$
|
789.9
|
|
|
$
|
687.3
|
|
Subtract: cash and
cash equivalents
|
|
26.4
|
|
|
40.6
|
|
Net Debt
|
|
$
|
763.5
|
|
|
$
|
646.7
|
|
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, and purchase accounting adjustments
for inventory. 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
|
|
|
March 31,
2020
|
Total LTM Adjusted
EBITDA Reconciliation
|
|
|
Net income
|
|
$
|
16.1
|
|
Add: Income tax
expense
|
|
8.1
|
|
Income before income
taxes
|
|
24.2
|
|
Add:
Depreciation, depletion and amortization
|
|
93.8
|
|
Add: Interest
expense, net
|
|
45.9
|
|
Add: Non-cash
stock compensation expense
|
|
21.1
|
|
Add: Non-cash
change in value of contingent consideration
|
|
2.1
|
|
Add:
Acquisition-related costs
|
|
1.3
|
|
Add: Loss on
mixer truck fire
|
|
0.1
|
|
Add: Litigation
settlement cost
|
|
0.3
|
|
Add: Officer
transition expenses
|
|
0.8
|
|
Add: Purchase
accounting adjustments for inventory
|
|
1.6
|
|
Subtract:
Eminent domain matter
|
|
(5.3)
|
|
Subtract:
Hurricane-related loss recoveries, net
|
|
(2.1)
|
|
Total LTM Adjusted
EBITDA
|
|
183.8
|
|
|
|
|
Net Debt
|
|
$
|
763.5
|
|
|
|
|
Total debt to LTM
income
|
|
49.06x
|
Net Debt to Total LTM
Adjusted EBITDA as of March 31, 2020
|
|
4.15x
|
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.