Attached files
| file | filename |
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| 8-K - U.S. CONCRETE, INC. | v176859_8k.htm |
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NEWS RELEASE
Contact:Robert D.
Hardy, CFO
U.S.
Concrete, Inc.
713-499-6222
|
FOR IMMEDIATE RELEASE
U.S.
CONCRETE REPORTS
FOURTH
QUARTER AND YEAR-END 2009 RESULTS
AND
PROVIDES UPDATE ON DEBT RESTRUCTURING EFFORTS
HOUSTON, TEXAS –March 10, 2010 –U.S. Concrete,
Inc. (NASDAQ: RMIX) today reported a net loss attributable to stockholders of
$16.7 million, or ($0.46) per diluted share, for the quarter ended December 31,
2009, compared to a net loss attributable to stockholders of $132.2 million, or
($3.63) per diluted share, in the fourth quarter of 2008. The net
loss attributable to stockholders during the fourth quarter of 2008 included an
after-tax non-cash charge of $119.8 million, or ($3.29) per diluted share, to
reduce the carrying amount of the Company’s goodwill. The net loss
attributable to stockholders for the fourth quarter of 2008, excluding these
items (a non-GAAP financial measure), would have been $12.4 million, or ($0.34)
per diluted share.
For the
full year 2009, the Company reported a net loss attributable to stockholders of
$88.2 million, or ($2.44) per diluted share. The net loss
attributable to stockholders for the full year 2009 included several non-cash
charges in accordance with existing authoritative accounting guidance. The
Company recorded a non-cash charge of $45.8 million to reduce the carrying
amount of the Company’s goodwill, a non-cash charge of $8.8 million to reduce
the carrying amount of long-lived assets in our Michigan market, and a $3.0
million non-cash loss on the sale of plants in the Sacramento, California
market, all of which occurred in the third quarter of 2009. Additionally, the
results reflect a gain of $7.4 million related to purchases of the Company’s
senior subordinated notes during the first and second quarters of
2009. The net loss attributable to stockholders for the full year
2009 excluding these items (a non-GAAP financial measure), would have been $40.8
million, or ($1.13) per diluted share, compared to net loss attributable to
stockholders of $12.6 million, or ($0.33) per share, for the full year 2008,
excluding the items noted above from the fourth quarter of 2008.
A
reconciliation of (i) the Company’s net loss attributable to stockholders for
the full year of 2008 and 2009 and fourth quarter of 2008, to (ii) the Company’s
net loss attributable to stockholders for the full year of 2008 and 2009 and
fourth quarter of 2008, excluding the goodwill impairment charges, asset
impairment charges, non-cash loss on the sale of the plants in Sacramento,
California and gain on purchases of the Company’s senior subordinated notes is
included in the attached “Unaudited Non-GAAP Condensed Consolidated Statements
of Operations” schedules.
As
previously announced, the Company has retained financial and legal advisors to
assist in evaluating potential strategies to strengthen its balance
sheet. The Company also amended its credit agreement to provide
access to an additional $5.0 million in liquidity and obtained waivers for
certain potential future events. While the Company is currently in
compliance with the provisions of its amended credit agreement, the continuing
economic conditions impacting the ready-mixed concrete industry in the Company’s
markets and the impact of unusually severe winter weather have placed
significant stress on the Company’s liquidity position, which has further
weakened in 2010.
FOURTH
QUARTER 2009 RESULTS
Revenue
in the fourth quarter of 2009 decreased 30.9 percent to $119.9 million, compared
to $173.3 million in the fourth quarter of 2008, reflecting lower ready-mixed
concrete sales volumes and lower precast concrete products
revenue. This decline was the result of the continued decrease in
demand for the Company’s products due to the significant slowdown in
construction activity in our U.S. markets due to the U.S.
recession.
The
Company’s ready-mixed concrete and concrete-related products revenue for the
fourth quarter of 2009 was $111.0 million, a decline of 31.6 percent compared to
the fourth quarter of 2008. Ready-mixed concrete sales volume in the
fourth quarter of 2009 was approximately 1.01 million cubic yards, down 33.7
percent from 1.52 million cubic yards of ready-mixed concrete sold in the fourth
quarter of 2008. On a same-plant-sales basis, fourth quarter 2009
volumes were also down 33.7 percent from the fourth quarter of 2008, with volume
declines in each of the Company’s major markets. The primary reason
for the decline in volume continues to be the depressed economic conditions in
the U.S. construction industry.
The
Company’s consolidated average sales price per cubic yard of ready-mixed
concrete increased 0.6 percent during the fourth quarter of 2009, as compared to
the fourth quarter of 2008. Increased pricing in certain markets was
mostly offset by lower prices in certain of the Company’s other
markets. On a sequential quarter basis, the Company’s average sales
price per cubic yard of ready-mixed concrete decreased 0.5 percent in the fourth
quarter of 2009 from the third quarter of 2009. The Company
anticipates that pricing will continue to be affected by the recessionary
conditions into 2010.
Revenue
in the Company’s precast concrete products segment was $11.8 million for the
three months ended December 31, 2009, a decrease of $3.1 million, or 20.8
percent, from the corresponding period in 2008. The Company’s fourth quarter
2009 precast concrete products revenue was down as a result of the continued
downturn in residential construction in the Company’s northern California and
Phoenix, Arizona markets and lower commercial construction activity in the
mid-Atlantic market.
Adjusted
earnings before interest, income taxes, depreciation and amortization (“EBITDA”)
was ($0.9) million in the fourth quarter of 2009, compared to ($1.4) million in
the fourth quarter of 2008. The Company defines adjusted EBITDA as
net income (loss) attributable to stockholders plus expense (benefit) for income
taxes, net interest expense, goodwill and other asset impairments, non-cash
gain/loss related to asset sales, depreciation, depletion and amortization.
Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation
of adjusted EBITDA, free cash flow and net debt (other non-GAAP financial
measures used in this earnings release) to the most directly comparable GAAP
financial measures, please see the attached “Additional Statistics”
schedule.
2
Commenting
on the fourth quarter results and the restructuring process, Michael W. Harlan,
the Company’s President and Chief Executive Officer, said, “Our revenue was down
about 30 percent, which was about what we expected as we began the
quarter. We continue to experience challenging market conditions,
which have negatively impacted our revenue, profitability and
liquidity. We have implemented further cost control measures,
including expanded wage freezes, elimination of our 401(k) matching
contribution, reduction of employee benefits and emergency-only capital
expenditures.” Mr. Harlan continued, “2010 has gotten off to a slow
start, with inclement weather causing delays in concrete projects in most of our
markets. As a result, our volumes are approximately 20 percent lower
than our expectations through February, which has added further pressure to our
liquidity. From a restructuring perspective, we are working
diligently to right size our capital structure and enhance our liquidity
position. In light of these circumstances, we have initiated
discussions with the lenders under our credit agreement, representatives of our
8⅜% senior subordinated notes and others regarding a permanent restructuring of
our balance sheet. Such a restructuring would likely affect the 8⅜% senior
subordinated notes, our credit agreement and our outstanding common stock, and
may be effected through negotiated modifications to the agreements related to
those debt obligations or through other forms of in or out of court
restructurings.”
The
Company’s selling, general and administrative (“SG&A”) expenses were $15.3
million during the fourth quarter of 2009, compared to $23.5 million for the
fourth quarter of 2008. The Company experienced lower costs during
the fourth quarter of 2009 related primarily to reduced compensation as a result
of workforce reductions in 2008 and 2009, reduced incentive-based compensation
accruals, reduced litigation accruals and other administrative cost reductions
such as in travel and entertainment costs, professional fees and office
expenses.
Net
interest expense in the fourth quarter of 2009 decreased approximately $0.4
million, to $6.5 million, compared to $6.9 million for the fourth quarter of
2008. This decline was primarily due to the interest savings from the repurchase
of some of the Company’s senior subordinated notes and lower interest rates on
borrowings under its credit facility when compared to the fourth quarter of
2008. This reduction was partially offset by increased interest associated with
higher amounts outstanding under the Company’s credit facility.
The
Company recorded income tax expense from continuing operations of $2.1 million
for the three months ended December 31, 2009, as compared to a $19.9 million
benefit for the corresponding period in 2008. For the year ended
December 31, 2009, the Company applied a valuation allowance against certain of
its deferred tax assets, including net operating loss carryforwards, which
reduced the effective tax rate from the expected statutory rate.
3
The
Company used cash in operations of $3.9 million during the fourth quarter of
2009, compared to cash provided by operations of $10.2 million in the fourth
quarter of 2008. Cash flow from operations decreased in the fourth
quarter of 2009 compared to the fourth quarter of 2008 due to lower collections
associated with lower product demand. The Company’s free cash flow
(defined as net cash provided by (used in) operations, less capital expenditures
for property, plant and equipment, net of disposals) for the fourth quarter of
2009 was ($4.4) million, compared to $3.6 million in the fourth quarter of
2008. Capital expenditures were down $6.1 million to $1.5 million in
the fourth quarter of 2009, as compared to $7.6 million in the fourth quarter of
2008 as the Company continues to control capital spending.
The
Company’s net debt at December 31, 2009 was $292.3 million, up $4.2 million from
September 30, 2009. The sequential quarterly increase in the
Company’s net debt was primarily related to a reduction in our cash
balances. Net debt at December 31, 2009 was comprised of total debt
of $296.5 million, less cash and cash equivalents of $4.2 million.
Robert D.
Hardy, Executive Vice President and Chief Financial Officer of U.S. Concrete,
stated, “As of December 31, 2009, we have $4.2 million of cash on hand and $45.3
million of available borrowing capacity under our revolving credit
facility. We had $16.7 million outstanding on our revolving credit
facility and $11.6 million of letters of credit. However, the
Company’s liquidity (cash and revolver availability) has dropped significantly,
to less than $25 million as of the end of February. Additional letters of credit
to support our self insurance and surety bond programs and a reduction in the
borrowing base computation due to significantly reduced sales volumes reduced
our revolver availability.” Mr. Hardy continued, “Absent a successful
restructuring, there is substantial doubt about our ability to continue to
operate as a going concern.”
FULL
YEAR 2009 RESULTS
Revenue
for the year ended December 31, 2009 decreased 29.1 percent to $534.5 million,
compared to $754.3 million for the year ended 2008, reflecting lower ready-mixed
concrete sales volumes and lower precast concrete products
revenue. This decline was the result of decreased demand for the
Company’s products due to lower construction spending and depressed economic
conditions in the Company’s markets.
The
Company’s ready-mixed concrete and concrete-related products revenue for 2009
was $491.8 million, a decrease of 30.0 percent compared to
2008. The Company’s ready-mixed concrete sales volume for 2009
was approximately 4.5 million cubic yards, down 30.7 percent from approximately
6.5 million cubic yards of ready-mixed concrete sold in
2008. Excluding ready-mixed concrete volumes attributable to the
Company’s acquired businesses, volumes during 2009 were down approximately 33.3
percent on a same-plant-sales basis from 2008. This decline in volume
reflects the continued slowdown in construction activity in each of the
Company’s major markets.
4
The
Company’s consolidated average sales price per cubic yard of ready-mixed
concrete increased approximately 1.2 percent during 2009, as compared to
2008. This increase was attributable to higher prices in certain of
the Company’s markets, offset by lower prices in certain of the Company’s other
markets.
Revenue
in the Company’s precast concrete products segment was $57.0 million in 2009, a
decrease of $11.1 million, or 16.3 percent, from 2008. This decrease
reflected the continued downturn primarily in residential construction in our
northern California and Phoenix, Arizona markets and lower commercial
construction activity in the mid-Atlantic market.
Adjusted
EBITDA was $25.3 million, or 4.7 percent of revenue, in 2009, as compared with
$40.5 million, or 5.3 percent of revenue, in 2008. Adjusted EBITDA
for 2009 was lower than the comparable prior-year period, primarily due to
reduced profits resulting from lower ready-mixed concrete sales volumes and
lower precast products revenue. This was partially offset by a gain on the
repurchase of some of the Company’s senior subordinated notes and cost
reductions.
The
Company’s selling, general and administrative expenses were $66.1 million in
2009, compared to $79.0 million in 2008. This decrease was primarily
due to reduced compensation as a result of workforce reductions in 2008 and
2009, lower incentive compensation accruals, lower litigation accruals and other
administrative cost reductions such as in travel and entertainment costs and
office expenses. This was partially offset by an increase in our bad debt
provision when compared to 2008.
The
Company’s loss on sale of assets increased to $2.3 million during 2009, compared
to a loss on sale of assets of $0.7 million in 2008. The sale of
ready-mixed concrete plants in the Sacramento, California market resulted in a
$3.0 million loss after the allocation of $3.0 million of related
goodwill.
The
Company performed an impairment test on remaining goodwill as a result of the
Sacramento asset sale and current economic conditions and recorded an impairment
charge of $45.8 million during 2009. The Company also evaluated
the recoverability of its property, plant and equipment. As a
result, the Company recorded an $8.8 million impairment charge related to
its property, plant and equipment in the Michigan market in 2009.
The
Company recorded a $7.4 million net gain in the first and second quarters of
2009 related to the purchase of $12.4 million aggregate principal amount of its
8⅜% senior subordinated notes in open market transactions for $4.8
million. The Company used borrowings under its revolving credit
facility to fund the open market purchases.
Net
interest expense for 2009 was down approximately $0.6 million to $26.5 million,
compared to $27.1 million for 2008. This change was primarily due to
the interest savings from the repurchase of some of the Company’s senior
subordinated notes and lower interest rates on borrowings under the credit
facility when compared to 2008. This was mostly offset by increased
interest associated with higher amounts outstanding under the Company’s credit
facility.
The
Company recorded an income tax benefit from continuing operations of $0.2
million for the full year 2009, as compared to $19.6 million in
2008. For 2009, the Company applied a valuation allowance against
certain of its deferred tax assets, including net operating loss carryforwards,
which reduced the effective benefit rate from the expected statutory
rate.
5
The
Company generated cash from operations of $8.0 million in 2009, compared to cash
from operations in 2008 of $29.7 million. Cash flow from operations
declined primarily due to lower income as a result of lower demand for the
Company’s products, partially offset by the receipt of a $4.9 million federal
tax refund in the third quarter of 2009 and by a reduction of working capital
requirements. The Company’s free cash flow in 2009 was $4.2 million,
as compared to $6.3 million in 2008. Capital expenditures were down
$13.9 million to $13.9 million in 2009, as compared to $27.8 million in 2008.
The proceeds from asset disposals increased $5.7 million in 2009 due to the $6.0
million sale of the Company’s plants in Sacramento, California.
CONFERENCE
CALL
U.S.
Concrete has scheduled a conference call for Wednesday, March 10, 2010, at 10:00
a.m., Eastern time, to review its fourth quarter 2009 results. To
participate in the call, dial (480) 629-9819 at least ten minutes before the
conference call begins and ask for the U.S. Concrete conference
call. A replay of the conference call will be available through
Wednesday, March 17, 2010. To access the replay, dial (303) 590-3030
using the pass code 4255647.
Investors,
analysts and the general public will also have the opportunity to listen to the
conference call over the Internet by accessing www.us-concrete.com. To
listen to the live call on the Web, please visit the Web site at least 15
minutes early to register, download and install any necessary audio
software. For those who cannot listen to the live Web cast, an
archive will be available shortly after the call on the Company’s Web site at
www.us-concrete.com
within the “Investors” section of the site.
USE
OF NON-GAAP FINANCIAL MEASURES
This
press release uses the non-GAAP financial measures “adjusted EBITDA,” “free cash
flow” and “net debt.” The Company has included adjusted EBITDA in
this press release because it is widely used by investors for valuation and
comparing the Company’s financial performance with the performance of other
building material companies. The Company also uses adjusted EBITDA to
monitor and compare the financial performance of its
operations. Adjusted EBITDA does not give effect to the cash the
Company must use to service its debt or pay its income taxes, and thus does not
reflect the funds actually available for capital expenditures. In
addition, the Company’s presentation of adjusted EBITDA may not be comparable to
similarly titled measures other companies report. The Company
considers free cash flow to be an important indicator of its ability to service
debt and generate cash for acquisitions and other strategic
investments. The Company believes that net debt is useful to
investors as a measure of its financial position. Non-GAAP financial
measures should be viewed in addition to, and not as an alternative for, the
Company’s reported operating results or cash flow from operations or any other
measure of performance as determined in accordance with GAAP.
6
ABOUT
U.S. CONCRETE
U.S. Concrete services the
construction industry in several major markets in the United States through its
two business segments: ready-mixed concrete and concrete-related products; and
precast concrete products. The Company has 125 fixed and 11 portable ready-mixed
concrete plants, seven precast concrete plants and seven producing aggregates
facilities. During 2009 (including acquired volumes), these plant facilities
produced approximately 4.5 million cubic yards of ready-mixed concrete and 3.0
million tons of aggregates. For more information on U.S. Concrete,
visit www.us-concrete.com.
CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS
This
press release contains various forward-looking statements and information that
are based on management's belief, as well as assumptions made by and information
currently available to management. These forward-looking statements speak only
as of the date of this press release. The Company disclaims any obligation to
update these statements and cautions you not to rely unduly on
them. Forward-looking information includes, but is not limited to,
statements regarding: pricing trends; impact of the recession on our
revenue, profitability and liquidity; effect of the amendment to our senior
secured revolving credit facility on short-term liquidity; ability to implement,
and any resulting effect of engaging in, a restructuring process; effects of the
Company’s cost control measures; expectations regarding first quarter 2010 and
full year 2010 volumes; the Company’s ability to manage its working capital
needs and capital expenditures program; effect of additional letters of credit
on revolver availability; and the Company’s ability to continue as a going
concern. Although U.S. Concrete believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that those expectations will prove to have been correct. Such
statements are subject to certain risks, uncertainties and assumptions,
including, among other matters: general and regional economic conditions; the
level of activity in the construction industry; the ability of U.S. Concrete to
complete acquisitions and to effectively integrate the operations of acquired
companies; development of adequate management infrastructure; departure of key
personnel; access to labor; union disruption; competitive factors; government
regulations; exposure to environmental and other liabilities; the cyclical and
seasonal nature of U.S. Concrete's business; adverse weather conditions; the
availability and pricing of raw materials; the availability of refinancing
alternatives; and general risks related to the industry and markets in which
U.S. Concrete operates. Should one or more of these risks materialize, or should
underlying assumptions prove incorrect, actual results or outcomes may vary
materially from those expected. These risks, as well as others, are discussed in
greater detail in U.S. Concrete's filings with the Securities and Exchange
Commission, including U.S. Concrete's Annual Report on Form 10-K for the year
ended December 31, 2008 and subsequent quarterly reports on Form
10-Q.
(Tables
to follow)
7
U.S.
CONCRETE, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except per share amounts)
(Unaudited)
|
Three
Months
Ended
December 31,
|
Year
Ended December 31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Revenue
|
$ | 119,851 | $ | 173,325 | $ | 534,485 | $ | 754,298 | ||||||||
|
Cost
of goods sold before depreciation, depletion and
amortization
|
106,531 | 151,422 | 459,214 | 639,448 | ||||||||||||
|
Selling,
general and administrative expenses
|
15,341 | 23,546 | 66,068 | 79,040 | ||||||||||||
|
Goodwill
and other asset impairments
|
185 | 135,631 | 54,745 | 135,631 | ||||||||||||
|
Loss
on sale of assets
|
238 | 1,127 | 2,267 | 728 | ||||||||||||
|
Depreciation,
depletion and amortization
|
7,070 | 8,140 | 29,621 | 29,902 | ||||||||||||
|
Loss
from operations
|
(9,514 | ) | (146,541 | ) | (77,430 | ) | (130,451 | ) | ||||||||
|
Interest
expense, net
|
6,542 | 6,935 | 26,450 | 27,056 | ||||||||||||
|
Gain
on purchases of senior subordinated notes
|
— | — | 7,406 | — | ||||||||||||
|
Other
income, net
|
407 | 356 | 1,423 | 1,984 | ||||||||||||
|
Loss
from continuing operations before
income taxes
|
(15,649 | ) | (153,120 | ) | (95,051 | ) | (155,523 | ) | ||||||||
|
Income
tax expense (benefit)
|
2,074 | (19,946 | ) | (188 | ) | (19,601 | ) | |||||||||
|
Loss
from continuing operations
|
(17,723 | ) | (133,174 | ) | (94,863 | ) | (135,922 | ) | ||||||||
|
Loss
from discontinued operations, net of tax
|
— | — | — | (149 | ) | |||||||||||
|
Net
loss
|
(17,723 | ) | (133,174 | ) | (94,863 | ) | (136,071 | ) | ||||||||
|
Net
loss attributable to non-controlling interest
|
993 | 981 | 6,625 | 3,625 | ||||||||||||
|
Net
loss attributable to stockholders
|
$ | (16,730 | ) | $ | (132,193 | ) | $ | (88,238 | ) | $ | (132,446 | ) | ||||
|
Loss
per share attributable to stockholders
– basic
|
||||||||||||||||
|
Loss
from continuing operations
|
$ | (0.46 | ) | $ | (3.63 | ) | $ | (2.44 | ) | $ | (3.48 | ) | ||||
|
Loss
from discontinued operations, net of income
tax benefit
|
— | — | — | — | ||||||||||||
|
Net
loss
|
$ | (0.46 | ) | $ | (3.63 | ) | $ | (2.44 | ) | $ | (3.48 | ) | ||||
|
Loss
per share attributable to stockholders
– diluted
|
||||||||||||||||
|
Loss
from continuing operations
|
$ | (0.46 | ) | $ | (3.63 | ) | $ | (2.44 | ) | $ | (3.48 | ) | ||||
|
Loss
from discontinued operations, net of income
tax benefit
|
— | — | — | — | ||||||||||||
|
Net
loss
|
$ | (0.46 | ) | $ | (3.63 | ) | $ | (2.44 | ) | $ | (3.48 | ) | ||||
|
Weighted
average shares outstanding:
|
||||||||||||||||
|
Basic
|
36,280 | 36,395 | 36,169 | 38,099 | ||||||||||||
|
Diluted
|
36,280 | 36,395 | 36,169 | 38,099 | ||||||||||||
8
U.S.
CONCRETE, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
|
December
31,
|
December
31,
|
|||||||
|
2009
|
2008
|
|||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash
equivalents
|
$ | 4,229 | $ | 5,323 | ||||
|
Trade
accounts receivable,
net
|
74,851 | 100,269 | ||||||
|
Inventories
|
30,960 | 32,768 | ||||||
|
Deferred
income
taxes
|
11,057 | 11,576 | ||||||
|
Prepaid
expenses
|
3,729 | 3,519 | ||||||
|
Other
current
assets
|
6,973 | 13,801 | ||||||
|
Total
current
assets
|
131,799 | 167,256 | ||||||
|
Property,
plant and equipment,
net
|
239,917 | 272,769 | ||||||
|
Goodwill
|
14,063 | 59,197 | ||||||
|
Other
assets
|
6,591 | 8,588 | ||||||
|
Total
assets
|
$ | 392,370 | $ | 507,810 | ||||
|
LIABILITIES
AND EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Current
maturities of long-term
debt
|
$ | 7,873 | $ | 3,371 | ||||
|
Accounts
payable
|
37,678 | 45,920 | ||||||
|
Accrued
liabilities
|
48,557 | 54,481 | ||||||
|
Total
current
liabilities
|
94,108 | 103,772 | ||||||
|
Long-term
debt, net of current
maturities
|
288,669 | 302,617 | ||||||
|
Other
long-term obligations and deferred
credits
|
6,916 | 8,522 | ||||||
|
Deferred
income
taxes
|
12,868 | 12,536 | ||||||
|
Total
liabilities
|
402,561 | 427,447 | ||||||
|
Commitments
and contingencies
|
||||||||
|
Equity:
|
||||||||
|
Preferred
stock
|
– | – | ||||||
|
Common
stock
|
38 | 37 | ||||||
|
Additional
paid-in
capital
|
268,306 | 265,453 | ||||||
|
Retained
deficit
|
(280,802 | ) | (192,564 | ) | ||||
|
Treasury
stock, at
cost
|
(3,284 | ) | (3,130 | ) | ||||
|
Total
stockholders’
equity
|
(15,742 | ) | 69,796 | |||||
|
Non-controlling
interest
|
5,551 | 10,567 | ||||||
|
Total
equity
|
(10,191 | ) | 80,363 | |||||
|
Total
liabilities and
equity
|
$ | 392,370 | $ | 507,810 | ||||
9
U.S.
CONCRETE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(In
thousands)
(Unaudited)
|
Year
Ended December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
CASH
FLOWS FROM OPERATING
ACTIVITIES
|
$ | 8,011 | $ | 29,678 | ||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Purchases
of property, plant and
equipment
|
(13,939 | ) | (27,783 | ) | ||||
|
Proceeds
from disposals of property, plant and equipment
|
10,135 | 4,403 | ||||||
|
Payments
for
acquisitions
|
(5,214 | ) | (23,759 | ) | ||||
|
Disposal
of business
unit
|
– | 7,583 | ||||||
|
Other
investing
activities
|
– | 40 | ||||||
|
Net
cash used in investing
activities
|
(9,018 | ) | (39,516 | ) | ||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Proceeds
from
borrowings
|
190,293 | 151,897 | ||||||
|
Repayments
of
borrowings
|
(185,888 | ) | (145,051 | ) | ||||
|
Purchases
of senior subordinated
notes
|
(4,810 | ) | – | |||||
|
Shares
purchased under common stock buyback program
|
– | (6,595 | ) | |||||
|
Purchase
of treasury
shares
|
(154 | ) | (497 | ) | ||||
|
Proceeds
from issuances of common stock under compensation plans
|
472 | 717 | ||||||
|
Other
financing
activities
|
– | (160 | ) | |||||
|
Net
cash provided by (used in) financing
activities
|
(87 | ) | 311 | |||||
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(1,094 | ) | (9,527 | ) | ||||
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
5,323 | 14,850 | ||||||
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 4,229 | $ | 5,323 | ||||
10
U.S.
CONCRETE, INC.
SELECTED
REPORTABLE SEGMENT INFORMATION
(In
thousands)
(Unaudited)
|
Three
Months
ended
December 31,
|
Year
Ended December 31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Revenue:
|
||||||||||||||||
|
Ready-mixed
concrete and concrete-related products
|
$ | 111,013 | $ | 162,301 | $ | 491,755 | $ | 702,525 | ||||||||
|
Precast
concrete products
|
11,832 | 14,937 | 56,959 | 68,082 | ||||||||||||
|
Inter-segment
sales
|
(2,994 | ) | (3,913 | ) | (14,229 | ) | (16,309 | ) | ||||||||
|
Total
revenue
|
$ | 119,851 | $ | 173,325 | $ | 534,485 | $ | 754,298 | ||||||||
|
Segment operating income
(loss):
|
||||||||||||||||
|
Ready-mixed
concrete and concrete-related products
|
$ | (5,604 | ) | $ | (110,158 | ) | $ | (62,366 | ) | $ | (85,334 | ) | ||||
|
Precast
concrete products
|
(813 | ) | (27,906 | ) | 298 | (22,629 | ) | |||||||||
|
Gain
on purchases of senior subordinated notes
|
– | – | 7,406 | – | ||||||||||||
|
Unallocated
overhead and other income
|
1,626 | (1,221 | ) | 4,108 | 2,820 | |||||||||||
|
Corporate:
|
||||||||||||||||
|
Selling,
general and administrative expense
|
(4,316 | ) | (6,900 | ) | (18,044 | ) | (23,541 | ) | ||||||||
|
Gain
(loss) on sale of assets
|
– | – | (3 | ) | 217 | |||||||||||
|
Interest
expense, net
|
(6,542 | ) | (6,935 | ) | (26,450 | ) | (27,056 | ) | ||||||||
|
Loss
before income taxes
|
$ | (15,649 | ) | $ | (153,120 | ) | $ | (95,051 | ) | $ | (155,523 | ) | ||||
|
Depreciation,
depletion and amortization:
|
||||||||||||||||
|
Ready-mixed
concrete and concrete-related products
|
$ | 5,738 | $ | 6,621 | $ | 24,539 | $ | 26,138 | ||||||||
|
Precast
concrete products
|
713 | 798 | 2,870 | 2,683 | ||||||||||||
|
Corporate
|
619 | 721 | 2,212 | 1,081 | ||||||||||||
|
Total
depreciation, depletion and amortization
|
$ | 7,070 | $ | 8,140 | $ | 29,621 | $ | 29,902 | ||||||||
11
U.S.
CONCRETE, INC.
ADDITIONAL
STATISTICS
(In
thousands, unless otherwise noted)
(Unaudited)
We report
our financial results in accordance with generally accepted accounting
principles in the United States (“GAAP”). However, our management
believes that certain non-GAAP performance measures and ratios, which our
management uses in managing our business, may provide users of this financial
information additional meaningful comparisons between current results and
results in prior operating periods. See the table below for
(1) presentations of our adjusted EBITDA, adjusted EBITDA margin, Net Debt
and Free Cash Flow for the three months and years ended December 31, 2009 and
December 31, 2008 and (2) corresponding reconciliations to GAAP financial
measures for the three months and years ended December 31, 2009 and December 31,
2008. We have also included in the table below certain Ready-Mixed
Concrete Statistics for the three and twelve months ended December 31, 2009 and
December 31, 2008.
We define
adjusted EBITDA as our net income (loss) attributable to stockholders, plus the
provision (benefit) for income taxes, net interest expense, goodwill and other
asset impairments, non-cash loss on asset sales, depreciation, depletion and
amortization. We define adjusted EBITDA margin as the amount determined by
dividing adjusted EBITDA by total revenue. We have included adjusted
EBITDA and adjusted EBITDA margin in the accompanying tables 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 adjusted
EBITDA to monitor and compare the financial performance of our
operations. 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 adjusted EBITDA may not be comparable to similarly titled
measures other companies report.
We define
Free Cash Flow as cash provided by (used in) operations less capital
expenditures for property, plant and equipment, net of disposals. We consider
Free Cash Flow to be an important indicator of our ability to service our debt
and generate cash for acquisitions and other strategic investments.
We define
Net Debt as total debt, including current maturities and capital lease
obligations, minus cash and cash equivalents. We believe that Net
Debt is useful to investors as a measure of our financial position.
Non-GAAP
financial measures should be viewed in addition to, and not as an alternative
for, our reported operating results or cash flow from operations or any other
measure of performance prepared in accordance with GAAP.
|
Three
Months
Ended
December
31, 2009
|
Year
Ended
December
31, 2009
|
|||||||
|
Ready-Mixed
Concrete Statistics:
|
||||||||
|
Average
price per cubic yards (in dollars)
|
$ | 94.58 | $ | 95.32 | ||||
|
Volume
(in cubic yards and thousands)
|
1,005 | 4,517 | ||||||
|
Adjusted
EBITDA reconciliation:
|
||||||||
|
Net
loss attributable to stockholders
|
$ | (16,730 | ) | $ | (88,238 | ) | ||
|
Income
tax expense (benefit)
|
2,074 | (188 | ) | |||||
|
Interest
expense, net
|
6,542 | 26,450 | ||||||
|
Goodwill
and other asset impairments
|
185 | 54,745 | ||||||
|
Depreciation,
depletion and amortization
|
7,070 | 29,621 | ||||||
|
Non-cash
loss on sale of Sacramento assets
|
– | 2,954 | ||||||
|
Adjusted
EBITDA
|
$ | (859 | ) | $ | 25,344 | |||
|
Adjusted
EBITDA margin
|
(0.7 | )% | 4.7 | % | ||||
|
Free
Cash Flow reconciliation:
|
||||||||
|
Net
cash provided by (used in) operations
|
$ | (3,941 | ) | $ | 8,011 | |||
|
Less:
capital expenditures
|
(1,448 | ) | (13,939 | ) | ||||
|
Plus:
proceeds from the sale of assets
|
1,013 | 10,135 | ||||||
|
Free
Cash Flow
|
$ | (4,376 | ) | $ | 4,207 | |||
|
Net
Debt reconciliation:
|
||||||||
|
Total
debt, including current maturities and capital lease
obligations
|
$ | 296,542 | ||||||
|
Less:
cash and cash equivalents
|
4,229 | |||||||
|
Net
Debt
|
$ | 292,313 | ||||||
12
|
Three
Months
Ended
December
31, 2008
|
Year
Ended
December
31, 2008
|
|||||||
|
Ready-Mixed
Concrete Statistics:
|
||||||||
|
Average
price per cubic yards (in dollars)
|
$ | 94.04 | $ | 94.22 | ||||
|
Volume
in cubic yards
|
1,515 | 6,517 | ||||||
|
Adjusted
EBITDA reconciliation:
|
||||||||
|
Net
loss attributable to stockholders
|
$ | (132,193 | ) | $ | (132,446 | ) | ||
|
Income
tax benefit
|
(19,946 | ) | (19,601 | ) | ||||
|
Interest
expense, net
|
6,935 | 27,056 | ||||||
|
Goodwill
and other asset impairments
|
135,631 | 135,631 | ||||||
|
Depreciation,
depletion and amortization
|
8,140 | 29,902 | ||||||
|
Adjusted
EBITDA
|
$ | (1,433 | ) | $ | 40,542 | |||
|
Adjusted
EBITDA margin
|
(0.8 | )% | 5.4 | % | ||||
|
Free
Cash Flow reconciliation:
|
||||||||
|
Net
cash provided by operations
|
$ | 10,164 | $ | 29,678 | ||||
|
Less
capital expenditures
|
(7,587 | ) | (27,783 | ) | ||||
|
Plus:
proceeds from the sale of assets
|
1,053 | 4,403 | ||||||
|
Free
Cash Flow
|
$ | 3,630 | $ | 6,298 | ||||
|
Net
Debt reconciliation:
|
||||||||
|
Total
debt, including current maturities and capital lease
obligations
|
$ | 305,988 | ||||||
|
Less
cash and cash equivalents
|
5,323 | |||||||
|
Net
Debt
|
$ | 300,665 | ||||||
13
U.S.
CONCRETE, INC.
UNAUDITED
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(A
Non-GAAP Financial Measure)
Non-GAAP
Loss Reconciliation
We have
provided non-GAAP adjusted loss and loss per share information for the year
ended December 31, 2009 and the three months and year ended December 31, 2008 in
this press release in addition to providing financial results in accordance with
GAAP. For the year ended December 31, 2009, this information reflects, on a
non-GAAP adjusted basis, our net loss attributable to stockholders and loss per
diluted share attributable to stockholders after excluding the effects of the
goodwill impairment charge of $45.8 million, asset impairment charges of $8.9
million and the $3.0 million non-cash portion of the loss on sale of assets in
Sacramento, California during the three months ended September 30,
2009. For the year ended December 31, 2009, we have also, on a
non-GAAP adjusted basis, excluded the $7.4 million gain on the purchases of some
of our senior subordinated notes. For the three months and year ended December
31, 2008, this information reflects, on a non-GAAP adjusted basis, our net loss
and loss per diluted share after excluding the effects of the goodwill
impairment charges of $135.3 million.
This
non-GAAP financial information is provided to assist in the user’s overall
understanding of the Company’s current financial
performance. Specifically, we believe the adjusted results provide
useful information to both management and investors by excluding expense items
that we believe are not indicative of our core operating results. The
non-GAAP financial information should be considered in addition to, not as a
substitute for or as being superior to, operating income, cash flows, or other
measures of financial performance prepared in accordance with GAAP. A
reconciliation of this non-GAAP information to our actual results for the year
ended December 31, 2009 and the three months and year ended December 31, 2008 is
as follows:
|
Year
Ended December 31, 2009
|
||||||||||||
|
GAAP
Results
|
NON-GAAP
Adjustments
|
NON-GAAP
Adjusted
Results
|
||||||||||
|
(In
thousands, except per share amounts)
|
||||||||||||
|
Revenue
|
$ | 534,485 | - | $ | 534,485 | |||||||
|
Cost
of goods sold before depreciation, depletion, and amortization
|
459,214 | - | 459,214 | |||||||||
|
Goodwill
and other asset
impairments
|
54,745 | (54,745 | ) | - | ||||||||
|
Selling,
general and administrative expenses
|
66,068 | - | 66,068 | |||||||||
|
(Gain)
loss on sale of assets
|
2,267 | (2,954 | ) | (687 | ) | |||||||
|
Depreciation,
depletion and
amortization
|
29,621 | - | 29,621 | |||||||||
|
Loss
from
operations
|
(77,430 | ) | 57,699 | (19,731 | ) | |||||||
|
Interest
expense,
net
|
26,450 | - | 26,450 | |||||||||
|
Gain
on purchases of senior subordinated notes
|
7,406 | (7,406 | ) | - | ||||||||
|
Other
income,
net
|
1,423 | - | 1,423 | |||||||||
|
Loss
before income
taxes
|
(95,051 | ) | 50,293 | (44,758 | ) | |||||||
|
Income
tax
benefit
|
(188 | ) | - | (188 | ) | |||||||
|
Net
loss
|
(94,863 | ) | 50,293 | (44,570 | ) | |||||||
|
Net
loss attributable to non-controlling interest
|
6,625 | (2,860 | ) | 3,765 | ||||||||
|
Net
loss attributable to
stockholders
|
$ | (88,238 | ) | $ | 47,433 | $ | (40,805 | ) | ||||
|
Basic
and diluted loss per share attributable to stockholders
|
$ | (2.44 | ) | $ | (1.13 | ) | ||||||
|
Basic
and diluted weighted average shares outstanding
|
36,169 | 36,169 | ||||||||||
14
U.S.
CONCRETE, INC.
UNAUDITED
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(A
Non-GAAP Financial Measure)
|
|
Year
Ended December 31, 2008
|
|||||||||||
|
GAAP
Results
|
NON-GAAP
Adjustments
|
NON-GAAP
Adjusted
Results
|
||||||||||
|
(In
thousands, except per share amounts)
|
||||||||||||
|
Revenue
|
$ | 754,298 | -- | $ | 754,298 | |||||||
|
Cost
of goods sold before depreciation, depletion and amortization
|
639,448 | -- | 639,448 | |||||||||
|
Goodwill
and other asset impairments
|
135,631 | (135,325 | ) | 306 | ||||||||
|
Selling,
general and administrative expenses
|
79,040 | -- | 79,040 | |||||||||
|
(Gain)
loss on sale of assets
|
728 | 728 | ||||||||||
|
Depreciation,
depletion and amortization
|
29,902 | -- | 29,902 | |||||||||
|
Loss from
operations
|
(130,451 | ) | 135,325 | 4,874 | ||||||||
|
Interest
expense, net
|
27,056 | -- | 27,056 | |||||||||
|
Other
income, net
|
1,984 | -- | 1,984 | |||||||||
|
Loss
from continuing operations before income taxes
|
(155,523 | ) | 135,325 | (20,198 | ) | |||||||
|
Income
tax benefit
|
(19,601 | ) | 15,513 | (4,088 | ) | |||||||
|
Loss
from continuing operations
|
(135,922 | ) | 119,812 | 16,110 | ||||||||
|
Loss
from discontinued operations, net of tax
|
(149 | ) | – | (149 | ) | |||||||
|
Net
loss
|
(136,071 | ) | 119,812 | (16,259 | ) | |||||||
|
Net
loss attributable to non-controlling interest
|
3,625 | -- | 3,625 | |||||||||
|
Net
loss attributable to stockholders
|
$ | (132,446 | ) | $ | 119,812 | $ | (12,634 | ) | ||||
|
Basic
and diluted loss per share attributable to stockholders
|
$ | (3.48 | ) | $ | (0.33 | ) | ||||||
|
Basic
and diluted weighted average shares outstanding
|
38,099 | 38,099 | ||||||||||
|
Three
Months December 31, 2008
|
||||||||||||
|
GAAP
Results
|
NON-GAAP
Adjustments
|
NON-GAAP
Adjusted
Results
|
||||||||||
|
(In
thousands, except per share amounts)
|
||||||||||||
|
Revenue
|
$ | 173,325 | -- | $ | 173,325 | |||||||
|
Cost
of goods sold before depreciation, depletion and amortization
|
151,422 | -- | 151,422 | |||||||||
|
Goodwill
and other asset impairments
|
135,631 | (135,325 | ) | 306 | ||||||||
|
Selling,
general and administrative expenses
|
23,546 | -- | 23,546 | |||||||||
|
(Gain)
loss on sale of assets
|
1,127 | – | 1,127 | |||||||||
|
Depreciation,
depletion and amortization
|
8,140 | -- | 8,140 | |||||||||
|
Loss from
operations
|
(146,541 | ) | 135,325 | (11,216 | ) | |||||||
|
Interest
expense, net
|
6,935 | -- | 6,935 | |||||||||
|
Other
income, net
|
356 | -- | 356 | |||||||||
|
Loss
from continuing operations before income taxes
|
(153,120 | ) | 135,325 | (17,795 | ) | |||||||
|
Income
tax benefit
|
(19,946 | ) | 15,513 | (4,433 | ) | |||||||
|
Loss
from continuing operations
|
(133,174 | ) | 119,812 | (13,362 | ) | |||||||
|
Loss
from discontinued operations, net of tax
|
– | – | – | |||||||||
|
Net
loss
|
(133,174 | ) | 119,812 | (13,362 | ) | |||||||
|
Net
loss attributable to non-controlling interest
|
981 | – | 981 | |||||||||
|
Net
loss attributable to stockholders
|
$ | (132,193 | ) | 119,812 | $ | (12,381 | ) | |||||
|
Basic
and diluted loss per share attributable to stockholders
|
$ | (3.63 | ) | $ | (0.34 | ) | ||||||
|
Basic
and diluted weighted average shares outstanding
|
36,395 | 36,395 | ||||||||||
15