EULESS, Texas, Aug. 4,
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 June 30,
2020.
SECOND QUARTER 2020 RESULTS AND
HIGHLIGHTS(1)
- Consolidated revenue was $322.7
million
- Aggregate products revenue was $54.5
million, an all-time quarterly high
- Aggregate products Adjusted EBITDA was $21.6 million, an all-time quarterly high
- Operating income more than tripled from the prior year second
quarter to $21.6 million
- Net income increased to $6.5
million from $0.9 million in
the prior year second quarter
- Total Adjusted EBITDA(2) increased 13.3% to
$47.6 million as compared to
$42.0 million in the prior year
second quarter
- Net income margin of 2.0% and Total Adjusted EBITDA
Margin(2) of 14.8%.
- Net cash provided by operating activities was $40.1 million, more than double the prior year
second quarter
- Adjusted Free Cash Flow(2) was $33.3 million, more than double the prior year
second quarter
- Available liquidity of $334.8
million as of June 30,
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, "While
today's release is about our second quarter financial results, I
want to acknowledge that we are operating in a remarkably
challenging environment, and I want to thank our employees,
suppliers, customers and financial stakeholders for their
dedication and resilience.
"We are very pleased to report our Total Adjusted EBITDA Margin
for the second quarter of 2020 was 14.8%, a significant improvement
over the prior year second quarter. A comprehensive review of
our operations and decisive action by our managers, combined with
the highly variable nature of our cost structure, allowed us to
achieve these margins, despite the unprecedented disruption in
several of our key markets."
Mr. Pruitt continued, "We continue to realize the strategic
value of the Coram Materials acquisition, and I'm pleased by the
successful integration of that important operation. Our
growing presence as a third-party provider of critical aggregate
products supports the underlying demand trends in all major markets
where we operate. This was evident as we achieved all-time
quarterly high revenue and Adjusted EBITDA in our aggregate
products segment during the second quarter of 2020.
"Our employees' ability to address rapid changes in our markets
during the quarter demonstrates their flexibility and resolve. This
is most evident in our re-engineering efforts and sustainable cost
containment initiatives that resulted in the operating performance
improvements and set the framework to address future changes to our
business and demand for our products."
OPERATING RESULTS
AGGREGATE PRODUCTS SEGMENT
|
|
Three Months Ended
June 30,
|
|
Six Months
Ended
June 30,
|
($ in millions
except selling prices)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Aggregate Products
Segment:
|
|
|
|
|
|
|
|
|
Sales to
external customers
|
|
$
|
38.2
|
|
|
$
|
36.2
|
|
|
$
|
69.3
|
|
|
$
|
67.9
|
|
Intersegment
sales
|
|
16.3
|
|
|
13.3
|
|
|
28.8
|
|
|
24.5
|
|
Total aggregate
products revenue
|
|
$
|
54.5
|
|
|
$
|
49.5
|
|
|
$
|
98.1
|
|
|
$
|
92.4
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
21.6
|
|
|
$
|
12.2
|
|
|
$
|
32.9
|
|
|
$
|
22.6
|
|
|
|
|
|
|
|
|
|
|
Aggregate Products
Data:
|
|
|
|
|
|
|
|
|
ASP per
ton(1)
|
|
$
|
12.83
|
|
|
$
|
11.83
|
|
|
$
|
12.56
|
|
|
$
|
11.96
|
|
Sales volume in
thousand tons
|
|
3,188
|
|
|
2,878
|
|
|
5,820
|
|
|
5,376
|
|
(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 $5.0
million in the 2020 second quarter to an all-time high of
$54.5 million, resulting from a 10.8%
increase in sales volume and an 8.5% increase in average selling
price related to the favorable mix of products sold compared to the
second quarter of 2019. Aggregate products Adjusted EBITDA of
$21.6 million in the 2020 second
quarter increased 77.0% from the second quarter of 2019, primarily
related to improved operating efficiencies, increased production
volume at our Texas aggregates
operations, and the profitability from the Coram Materials
acquisition.
READY-MIXED CONCRETE SEGMENT
|
|
Three Months Ended
June 30,
|
|
Six Months
Ended
June 30,
|
($ in millions
except selling prices)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Ready-Mixed
Concrete Segment:
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
272.4
|
|
|
$
|
314.0
|
|
|
$
|
564.6
|
|
|
$
|
604.4
|
|
Adjusted
EBITDA
|
|
$
|
38.1
|
|
|
$
|
38.1
|
|
|
$
|
69.8
|
|
|
$
|
72.6
|
|
|
|
|
|
|
|
|
|
|
Ready-Mixed
Concrete Data:
|
|
|
|
|
|
|
|
|
Average selling price
("ASP") per cubic yard(1)
|
|
$
|
137.18
|
|
|
$
|
138.40
|
|
|
$
|
140.77
|
|
|
$
|
138.97
|
|
Sales volume in
thousand cubic yards
|
|
1,982
|
|
|
2,264
|
|
|
4,003
|
|
|
4,342
|
|
(1)
|
Calculation excludes
certain ancillary revenue that is reported within the
segment.
|
Revenue from the ready-mixed concrete segment for the second
quarter of 2020 decreased $41.6
million, or 13.2%, compared to the prior year second
quarter, as our New York City and
California markets were
impacted by temporary restrictions and delays in certain
construction activity related to the COVID-19 pandemic.
Despite the volume decline, actions taken from our business
contingency plans in the form of labor management, concrete mix
optimization, higher asset utilization and delivery efficiencies,
which included lower fuel costs, resulted in second quarter 2020
Adjusted EBITDA equal to the the second quarter of 2019. While the
Company recognized resilient and increased pricing in each of its
operating regions in the second quarter of 2020, overall ASP
declined due to changes in the product and geographical mix of
revenue compared to the second quarter of 2019.
CONSOLIDATED SECOND QUARTER 2020 RESULTS COMPARED TO SECOND
QUARTER 2019
Consolidated revenue decreased as compared to the prior year
second quarter, primarily as a result of lower ready-mixed concrete
volumes stemming from the COVID-19 pandemic, which were partially
offset by record revenue from aggregate products. Revenue
declined significantly in April but improved progressively
month-to-month throughout the second quarter as the definition of
essential services evolved in each market and restrictions were
modified. During the second quarter of 2020, operating income
was $21.6 million compared to
$6.0 million in the second quarter of
2019, with an operating income margin of 6.7% compared to 1.6% in
the second quarter of 2019. The improvement in operating
income resulted from our aggressive cost containment measures,
operating efficiencies, continued focus on our operating margin,
and growth from our aggregate products segment, which included our
Coram Materials acquisition, as well as lower fuel costs.
Selling, general and administrative expense ("SG&A") as a
percentage of revenue was 9.8% in the 2020 second quarter compared
to 10.7% in the prior year second quarter. SG&A decreased
$7.5 million, or 19.1%, for the 2020
second quarter, in comparison to the 2019 second quarter, primarily
as a result of a lower non-cash stock-based compensation expense.
In addition, management implemented cost-cutting measures
throughout the Company in response to the COVID-19 pandemic,
particularly impacting travel, entertainment, and labor.
These improvements were partially offset by realignment initiative
costs. On a non-GAAP basis, Adjusted SG&A, which excludes
non-cash stock compensation, acquisition-related costs and
realignment initiative costs, was 8.8% of revenue in the 2020
second quarter compared to 7.8% in the prior year second quarter,
with reduced leverage due to the lower sales volumes stemming from
the COVID-19 pandemic. 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 second
quarter more than doubled to $40.1
million, compared to $18.7
million in the prior year second quarter. The
Company's Adjusted Free Cash Flow in the 2020 second quarter more
than doubled to $33.3 million,
compared to $14.1 million in the
prior year second 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 June 30, 2020, the Company had cash and cash equivalents
of $17.5 million and total debt of
$758.9 million, resulting in Net Debt
of $741.4 million. Net Debt
increased $94.7 million from
December 31, 2019 due primarily to the acquisition of Coram
Materials in February 2020. At June 30, 2020, the
Company had available borrowing capacity of $137.3 million under its revolving credit
facility and $180.0 million
under its delayed draw term loan facility, resulting in total
liquidity of $334.8 million when
combined with its cash balances. 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,
August 4, 2020 at 8:30 a.m. Eastern
Time (7:30 a.m. Central Time),
to review its second quarter 2020 results. To participate in
the call, please dial (877) 312-8806 – Conference ID: 4483164 at
least 20 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 20 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 the COVID-19
pandemic 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
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
$
|
322.7
|
|
|
$
|
367.5
|
|
|
$
|
657.1
|
|
|
$
|
700.6
|
|
Cost of goods sold
before depreciation, depletion and amortization
|
250.1
|
|
|
296.8
|
|
|
524.0
|
|
|
565.2
|
|
Selling, general and
administrative expenses
|
31.7
|
|
|
39.2
|
|
|
65.4
|
|
|
71.3
|
|
Depreciation,
depletion and amortization
|
25.2
|
|
|
25.1
|
|
|
48.6
|
|
|
47.9
|
|
Change in value of
contingent consideration
|
(5.8)
|
|
|
0.3
|
|
|
(5.5)
|
|
|
1.3
|
|
Loss (gain) on
sale/disposal of assets, net
|
(0.1)
|
|
|
0.1
|
|
|
(0.1)
|
|
|
1.0
|
|
Operating
income
|
21.6
|
|
|
6.0
|
|
|
24.7
|
|
|
13.9
|
|
Interest expense,
net
|
11.4
|
|
|
11.6
|
|
|
22.8
|
|
|
23.2
|
|
Other income,
net
|
(0.6)
|
|
|
(7.2)
|
|
|
(1.2)
|
|
|
(7.6)
|
|
Income (loss) before
income taxes
|
10.8
|
|
|
1.6
|
|
|
3.1
|
|
|
(1.7)
|
|
Income tax expense
(benefit)
|
4.3
|
|
|
0.7
|
|
|
(0.6)
|
|
|
—
|
|
Net income
(loss)
|
6.5
|
|
|
0.9
|
|
|
3.7
|
|
|
(1.7)
|
|
Less: Net income
(loss) attributable to non-controlling interest
|
(0.1)
|
|
|
0.2
|
|
|
0.2
|
|
|
0.3
|
|
Net income (loss)
attributable to U.S. Concrete
|
$
|
6.6
|
|
|
$
|
0.7
|
|
|
$
|
3.5
|
|
|
$
|
(2.0)
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to U.S. Concrete:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.39
|
|
|
$
|
0.04
|
|
|
$
|
0.21
|
|
|
$
|
(0.12)
|
|
Diluted
|
$
|
0.39
|
|
|
$
|
0.04
|
|
|
$
|
0.21
|
|
|
$
|
(0.12)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
16.6
|
|
|
16.4
|
|
|
16.6
|
|
|
16.4
|
|
Diluted
|
16.6
|
|
|
16.4
|
|
|
16.6
|
|
|
16.4
|
|
U.S. CONCRETE,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
millions)
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
17.5
|
|
|
$
|
40.6
|
|
Trade accounts
receivable, net
|
204.7
|
|
|
233.1
|
|
Inventories
|
65.2
|
|
|
59.0
|
|
Other receivables,
net
|
13.1
|
|
|
8.4
|
|
Prepaid expenses and
other
|
6.5
|
|
|
7.9
|
|
Total current
assets
|
307.0
|
|
|
349.0
|
|
Property, plant and
equipment, net
|
794.1
|
|
|
673.5
|
|
Operating lease
assets
|
70.3
|
|
|
69.8
|
|
Goodwill
|
239.5
|
|
|
239.5
|
|
Intangible assets,
net
|
81.9
|
|
|
92.4
|
|
Other
assets
|
11.7
|
|
|
9.1
|
|
Total
assets
|
$
|
1,504.5
|
|
|
$
|
1,433.3
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
127.2
|
|
|
$
|
136.4
|
|
Accrued
liabilities
|
75.1
|
|
|
63.5
|
|
Current maturities of
long-term debt
|
34.1
|
|
|
32.5
|
|
Current operating
lease liabilities
|
13.7
|
|
|
12.9
|
|
Total current
liabilities
|
250.1
|
|
|
245.3
|
|
Long-term debt, net
of current maturities
|
724.8
|
|
|
654.8
|
|
Long-term operating
lease liabilities
|
59.8
|
|
|
59.7
|
|
Other long-term
obligations and deferred credits
|
38.5
|
|
|
49.1
|
|
Deferred income
taxes
|
56.4
|
|
|
54.8
|
|
Total
liabilities
|
1,129.6
|
|
|
1,063.7
|
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Additional paid-in
capital
|
358.4
|
|
|
348.9
|
|
Retained
earnings
|
31.3
|
|
|
31.1
|
|
Treasury stock, at
cost
|
(37.9)
|
|
|
(36.6)
|
|
Total shareholders'
equity
|
351.8
|
|
|
343.4
|
|
Non-controlling
interest
|
23.1
|
|
|
26.2
|
|
Total
equity
|
374.9
|
|
|
369.6
|
|
Total liabilities and
equity
|
$
|
1,504.5
|
|
|
$
|
1,433.3
|
|
U.S. CONCRETE,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(in
millions)
|
|
|
Six months ended
June 30,
|
|
2020
|
|
2019
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
(loss)
|
$
|
3.7
|
|
|
$
|
(1.7)
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation,
depletion and amortization
|
48.6
|
|
|
47.9
|
|
Amortization of debt
issuance costs
|
1.0
|
|
|
0.9
|
|
Change in value of
contingent consideration
|
(5.5)
|
|
|
1.3
|
|
Loss (gain) on
sale/disposal of assets, net
|
(0.1)
|
|
|
1.0
|
|
Gains from eminent
domain matter and property insurance claims
|
—
|
|
|
(6.0)
|
|
Deferred income
taxes
|
2.6
|
|
|
2.5
|
|
Provision for doubtful
accounts and customer disputes
|
1.0
|
|
|
1.3
|
|
Stock-based
compensation
|
6.2
|
|
|
11.1
|
|
Other, net
|
(0.8)
|
|
|
(0.6)
|
|
Changes in assets and
liabilities, excluding effects of acquisitions:
|
|
|
|
Accounts
receivable
|
24.9
|
|
|
(13.1)
|
|
Inventories
|
1.7
|
|
|
(1.6)
|
|
Prepaid expenses and
other current assets
|
(3.0)
|
|
|
(4.6)
|
|
Other assets and
liabilities
|
2.7
|
|
|
(0.7)
|
|
Accounts payable and
accrued liabilities
|
1.1
|
|
|
2.9
|
|
Net cash provided by
operating activities
|
84.1
|
|
|
40.6
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchases of property,
plant and equipment
|
(14.2)
|
|
|
(18.1)
|
|
Payment for
acquisition of business
|
(140.2)
|
|
|
—
|
|
Proceeds from sale of
businesses and property, plant and equipment
|
0.3
|
|
|
0.7
|
|
Proceeds from eminent
domain matter and property insurance claims
|
—
|
|
|
6.0
|
|
Net cash used in
investing activities
|
(154.1)
|
|
|
(11.4)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Proceeds from revolver
borrowings
|
260.8
|
|
|
163.3
|
|
Repayments of revolver
borrowings
|
(204.3)
|
|
|
(157.8)
|
|
Proceeds from stock
option exercises
|
—
|
|
|
0.2
|
|
Payments of other
long-term obligations
|
(9.9)
|
|
|
(11.6)
|
|
Payments for finance
leases, promissory notes and other
|
(10.8)
|
|
|
(16.2)
|
|
Debt issuance
costs
|
(2.2)
|
|
|
—
|
|
Shares redeemed for
employee income tax obligations
|
(1.2)
|
|
|
(2.2)
|
|
Other
proceeds
|
14.5
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
46.9
|
|
|
(24.3)
|
|
EFFECT OF EXCHANGE
RATES ON CASH AND CASH EQUIVALENTS
|
—
|
|
|
(0.1)
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
(23.1)
|
|
|
4.8
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
40.6
|
|
|
20.0
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$
|
17.5
|
|
|
$
|
24.8
|
|
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, purchase accounting adjustments
for inventory, and realignment initiative costs.
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
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Total Adjusted
EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
6.5
|
|
|
$
|
0.9
|
|
|
$
|
3.7
|
|
|
$
|
(1.7)
|
|
Add/(subtract):
Income tax expense (benefit)
|
|
4.3
|
|
|
0.7
|
|
|
(0.6)
|
|
|
—
|
|
Income (loss) before
income taxes
|
|
10.8
|
|
|
1.6
|
|
|
3.1
|
|
|
(1.7)
|
|
Add:
Depreciation, depletion and amortization
|
|
25.2
|
|
|
25.1
|
|
|
48.6
|
|
|
47.9
|
|
Add: Interest
expense, net
|
|
11.4
|
|
|
11.6
|
|
|
22.8
|
|
|
23.2
|
|
Add: Non-cash
stock compensation expense
|
|
2.5
|
|
|
9.4
|
|
|
6.2
|
|
|
11.1
|
|
Add/(subtract):
Non-cash change in value of contingent consideration
|
|
(5.8)
|
|
|
0.3
|
|
|
(5.5)
|
|
|
1.3
|
|
Add: Purchase
accounting adjustments for inventory
|
|
2.6
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
Add:
Acquisition-related costs
|
|
—
|
|
|
0.7
|
|
|
1.3
|
|
|
0.8
|
|
Add: Realignment
initiative costs
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
Add: Officer
transition expenses
|
|
—
|
|
|
0.6
|
|
|
0.2
|
|
|
0.6
|
|
Add: Loss on
mixer truck fire
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.7
|
|
Subtract: Eminent
domain matter
|
|
—
|
|
|
(5.3)
|
|
|
—
|
|
|
(5.3)
|
|
Subtract:
Hurricane-related loss recoveries, net
|
|
—
|
|
|
(2.1)
|
|
|
—
|
|
|
(2.1)
|
|
Total Adjusted
EBITDA
|
|
$
|
47.6
|
|
|
$
|
42.0
|
|
|
$
|
81.8
|
|
|
$
|
76.5
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
margin
|
|
2.0
|
%
|
|
0.2
|
%
|
|
0.6
|
%
|
|
(0.2)
|
%
|
Total Adjusted EBITDA
Margin
|
|
14.8
|
%
|
|
11.4
|
%
|
|
12.4
|
%
|
|
10.9
|
%
|
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
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted Gross
Profit Reconciliation
|
|
|
|
|
|
|
|
Operating
income
|
$
|
21.6
|
|
|
$
|
6.0
|
|
|
$
|
24.7
|
|
|
$
|
13.9
|
|
Add: Depreciation,
depletion and amortization
|
25.2
|
|
|
25.1
|
|
|
48.6
|
|
|
47.9
|
|
Add: Selling, general
and administrative expenses
|
31.7
|
|
|
39.2
|
|
|
65.4
|
|
|
71.3
|
|
Add/(subtract):
Change in value of contingent consideration
|
(5.8)
|
|
|
0.3
|
|
|
(5.5)
|
|
|
1.3
|
|
Add: Purchase
accounting adjustments for inventory
|
2.6
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
Add/(subtract): Loss
(gain) on sale/disposal of assets, net
|
(0.1)
|
|
|
0.1
|
|
|
(0.1)
|
|
|
1.0
|
|
Adjusted Gross
Profit
|
$
|
75.2
|
|
|
$
|
70.7
|
|
|
$
|
137.3
|
|
|
$
|
135.4
|
|
|
|
|
|
|
|
|
|
Operating income
margin
|
6.7
|
%
|
|
1.6
|
%
|
|
3.8
|
%
|
|
2.0
|
%
|
Adjusted Gross Profit
Margin
|
23.3
|
%
|
|
19.2
|
%
|
|
20.9
|
%
|
|
19.3
|
%
|
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,
officer transition costs, and realignemnt initiative cost. 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
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted SG&A
Reconciliation
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
$
|
31.7
|
|
|
$
|
39.2
|
|
|
$
|
65.4
|
|
|
$
|
71.3
|
|
Subtract: Non-cash
stock compensation expense
|
(2.5)
|
|
|
(9.4)
|
|
|
(6.2)
|
|
|
(11.1)
|
|
Subtract:
Acquisition-related costs
|
—
|
|
|
(0.7)
|
|
|
(1.3)
|
|
|
(0.8)
|
|
Subtract: Realignment
initiative costs
|
(0.9)
|
|
|
—
|
|
|
(0.9)
|
|
|
—
|
|
Subtract: Officer
transition expenses
|
—
|
|
|
(0.6)
|
|
|
(0.2)
|
|
|
(0.6)
|
|
Adjusted
SG&A
|
$
|
28.3
|
|
|
$
|
28.5
|
|
|
$
|
56.8
|
|
|
$
|
58.8
|
|
|
|
|
|
|
|
|
|
SG&A as a
percentage of revenue
|
9.8
|
%
|
|
10.7
|
%
|
|
10.0
|
%
|
|
10.2
|
%
|
Adjusted SG&A as
a percentage of revenue
|
8.8
|
%
|
|
7.8
|
%
|
|
8.6
|
%
|
|
8.4
|
%
|
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, purchase accounting adjustments
for inventory, and realignment initiative costs. 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
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted Net
Income (Loss) Attributable to U.S. Concrete
Reconciliation
|
|
|
|
|
|
|
|
Net income (loss)
attributable to U.S. Concrete
|
$
|
6.6
|
|
|
$
|
0.7
|
|
|
$
|
3.5
|
|
|
$
|
(2.0)
|
|
Add/(subtract):
Income tax expense (benefit)
|
4.3
|
|
|
0.7
|
|
|
(0.6)
|
|
|
—
|
|
Adjusted income
(loss) before income taxes
|
10.9
|
|
|
1.4
|
|
|
2.9
|
|
|
(2.0)
|
|
Add: Non-cash
stock compensation expense
|
2.5
|
|
|
9.4
|
|
|
6.2
|
|
|
11.1
|
|
Add/(subtract):
Non-cash change in value of contingent consideration
|
(5.8)
|
|
|
0.3
|
|
|
(5.5)
|
|
|
1.3
|
|
Add: Purchase
accounting adjustments for inventory
|
2.6
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
Add:
Acquisition-related costs
|
—
|
|
|
0.7
|
|
|
1.3
|
|
|
0.8
|
|
Add:
Realignment initiative costs
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
Add: Officer
transition expenses
|
—
|
|
|
0.6
|
|
|
0.2
|
|
|
0.6
|
|
Add: Loss on
mixer truck fire
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.7
|
|
Subtract:
Eminent domain matter
|
—
|
|
|
(5.3)
|
|
|
—
|
|
|
(5.3)
|
|
Subtract:
Hurricane-related loss recoveries, net
|
—
|
|
|
(2.1)
|
|
|
—
|
|
|
(2.1)
|
|
Adjusted income
before income taxes
|
11.1
|
|
|
5.1
|
|
|
10.2
|
|
|
5.1
|
|
Subtract:
Normalized income tax expense(1)
|
3.0
|
|
|
1.4
|
|
|
2.8
|
|
|
1.4
|
|
Adjusted Net Income
Attributable to U.S. Concrete
|
$
|
8.1
|
|
|
$
|
3.7
|
|
|
$
|
7.4
|
|
|
$
|
3.7
|
|
|
|
|
|
|
|
|
|
(1) Assumes a
normalized effective tax rate of 27% in all periods.
|
|
Three Months Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted Net
Income (Loss) Attributable to U.S. Concrete per Diluted Share
Reconciliation
|
|
|
|
|
|
|
|
Net income (loss)
attributable to U.S. Concrete
|
$
|
0.39
|
|
|
$
|
0.04
|
|
|
$
|
0.21
|
|
|
$
|
(0.12)
|
|
Add: Income tax
expense (benefit)
|
0.26
|
|
|
0.05
|
|
|
(0.04)
|
|
|
—
|
|
Adjusted income
(loss) before income taxes
|
0.65
|
|
|
0.09
|
|
|
0.17
|
|
|
(0.12)
|
|
Add: Impact of
non-cash stock compensation expense
|
0.15
|
|
|
0.57
|
|
|
0.37
|
|
|
0.68
|
|
Add/(subtract):
Impact of non-cash change in value of contingent
consideration
|
(0.35)
|
|
|
0.02
|
|
|
(0.33)
|
|
|
0.07
|
|
Add: Impact of
purchase accounting adjustments for inventory
|
0.16
|
|
|
—
|
|
|
0.26
|
|
|
—
|
|
Add: Impact of
acquisition-related costs
|
—
|
|
|
0.04
|
|
|
0.08
|
|
|
0.06
|
|
Add: Impact of
realignment initiative costs
|
0.06
|
|
|
—
|
|
|
0.06
|
|
|
—
|
|
Add: Impact of
officer transition expenses
|
—
|
|
|
0.03
|
|
|
0.01
|
|
|
0.03
|
|
Add: Impact of
loss on mixer truck fire
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.04
|
|
Subtract: Impact of
eminent domain matter
|
—
|
|
|
(0.32)
|
|
|
—
|
|
|
(0.32)
|
|
Subtract: Impact of
hurricane-related loss recoveries, net
|
—
|
|
|
(0.13)
|
|
|
—
|
|
|
(0.13)
|
|
Adjusted income
before income taxes
|
0.67
|
|
|
0.31
|
|
|
0.62
|
|
|
0.31
|
|
Subtract:
Normalized income tax expense(1)
|
0.18
|
|
|
0.08
|
|
|
0.17
|
|
|
0.08
|
|
Adjusted Net Income
Attributable to U.S. Concrete per Diluted Share
|
$
|
0.49
|
|
|
$
|
0.23
|
|
|
$
|
0.45
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
(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
June 30,
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted Free Cash
Flow Reconciliation
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
40.1
|
|
|
$
|
18.7
|
|
|
$
|
84.1
|
|
|
$
|
40.6
|
|
Subtract: Purchases
of property, plant and equipment
|
(6.9)
|
|
|
(10.9)
|
|
|
(14.2)
|
|
|
(18.1)
|
|
Add: Proceeds from
disposals of businesses and property, plant and
equipment
|
0.1
|
|
|
0.3
|
|
|
0.3
|
|
|
0.7
|
|
Add: Proceeds from
eminent domain matter and property insurance claims
|
—
|
|
|
6.0
|
|
|
—
|
|
|
6.0
|
|
Adjusted Free Cash
Flow
|
$
|
33.3
|
|
|
$
|
14.1
|
|
|
$
|
70.2
|
|
|
$
|
29.2
|
|
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
|
|
|
June 30,
2020
|
|
December 31,
2019
|
Net Debt
Reconciliation
|
|
|
|
|
Total debt, including
current maturities and finance lease
obligations
|
|
$
|
758.9
|
|
|
$
|
687.3
|
|
Subtract: cash and
cash equivalents
|
|
17.5
|
|
|
40.6
|
|
Net Debt
|
|
$
|
741.4
|
|
|
$
|
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, purchase accounting adjustments for
inventory and realignment initiative costs. 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
|
|
|
June 30,
2020
|
Total LTM Adjusted
EBITDA Reconciliation
|
|
|
Net income
|
|
$
|
21.6
|
|
Add: Income tax
expense
|
|
11.7
|
|
Income before income
taxes
|
|
33.3
|
|
Add:
Depreciation, depletion and amortization
|
|
94.0
|
|
Add: Interest
expense, net
|
|
45.7
|
|
Add: Non-cash
stock compensation expense
|
|
14.2
|
|
Add/(subtract):
Non-cash change in value of contingent consideration
|
|
(4.0)
|
|
Add: Purchase
accounting adjustments for inventory
|
|
4.2
|
|
Add:
Realignment initiative costs
|
|
0.9
|
|
Add:
Acquisition-related costs, net
|
|
0.6
|
|
Add: Litigation
settlement cost
|
|
0.3
|
|
Add: Officer
transition expenses
|
|
0.2
|
|
Total LTM Adjusted
EBITDA
|
|
189.4
|
|
|
|
|
Net Debt
|
|
$
|
741.4
|
|
|
|
|
Total debt to LTM net
income
|
|
35.05x
|
Net Debt to Total LTM
Adjusted EBITDA as of June 30, 2020
|
|
3.9x
|
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.