EULESS, Texas, Oct. 29, 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
September 30, 2020.
THIRD QUARTER 2020 RESULTS(1) AND
HIGHLIGHTS, INCLUDING RECORD AGGREGATE RESULTS
- Consolidated revenue was $374.2
million
- Aggregate products revenue was $63.6
million, an all-time quarterly high
- Aggregate products average selling price per ton, $13.37, and volumes sold, 3.7 million, were both
all-time quarterly highs
- Aggregate products Adjusted EBITDA was $26.8 million, an all-time quarterly high and a
64.4% increase compared to the prior year third quarter
- Net income was $24.1 million
- Total Adjusted EBITDA(2) increased 2.9% to
$63.9 million compared to the prior
year third quarter
- Net income margin was 6.4% and Total Adjusted EBITDA
Margin(2) was 17.1%
- Net cash provided by operating activities increased 19.0% to
$61.3 million compared to the prior
year third quarter
- Adjusted Free Cash Flow(2) increased 40.7% to
$58.4 million compared to the prior
year third quarter
- Completed a $400.0 million
private placement of 5.125% senior unsecured notes due 2029
_________
|
(1)
|
Certain
computations within this press release may reflect rounding
adjustments.
|
(2)
|
Total Adjusted
EBITDA, Adjusted Free Cash Flow and related margins are non-GAAP
financial measures. Please refer to the reconciliations and
other information at the end of this press release.
|
Ronnie Pruitt, President and
Chief Executive Officer of U.S. Concrete, Inc. stated, "We believe
our business is well positioned to continue to deliver strong
results, both in the short and long term. We are very proud
to announce record results for the quarter, and record six-month
results when combining the second and third quarters of 2020, all
in the context of lower revenues amid the pandemic. The
transformation we have undertaken over the past several years to
reshape our portfolio and capabilities for growth and better
margins has proven critical in enabling us to respond to the
changing dynamics in the current environment. Our diversified
portfolio of operating assets, commitment to innovate, and agile
culture have allowed us to respond to the construction demand in
the markets that we serve and positions us to deliver meaningful
financial results into the future."
OPERATING RESULTS
AGGREGATE PRODUCTS SEGMENT
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
($ in millions
except selling prices)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Aggregate Products
Segment:
|
|
|
|
|
|
|
|
Sales to
external customers
|
$
|
45.2
|
|
|
$
|
37.9
|
|
|
$
|
114.5
|
|
|
$
|
105.8
|
|
Intersegment
sales
|
18.4
|
|
|
15.0
|
|
|
47.2
|
|
|
39.5
|
|
Total aggregate
products revenue
|
$
|
63.6
|
|
|
$
|
52.9
|
|
|
$
|
161.7
|
|
|
$
|
145.3
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
26.8
|
|
|
$
|
16.3
|
|
|
$
|
59.7
|
|
|
$
|
38.9
|
|
|
|
|
|
|
|
|
|
Aggregate Products
Data:
|
|
|
|
|
|
|
|
Average selling price
("ASP") per ton(1)
|
$
|
13.37
|
|
|
$
|
11.86
|
|
|
$
|
12.87
|
|
|
$
|
11.93
|
|
Sales volume in
thousand tons
|
3,663
|
|
|
3,116
|
|
|
9,483
|
|
|
8,492
|
|
|
|
(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 $10.7 million in the third quarter of 2020 to an
all-time high of $63.6 million,
resulting from a 17.6% increase in sales volume and a 12.7%
increase in average selling price related to the favorable mix of
products sold compared to the third quarter of 2019.
Aggregate products Adjusted EBITDA of $26.8
million in the third quarter of 2020 increased 64.4% from
the third quarter of 2019, primarily related to improved operating
efficiencies, increased production volume at the Company's
Texas aggregates operations, and
the profitability from the Coram Materials business acquired
earlier this year.
READY-MIXED CONCRETE SEGMENT
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
($ in millions
except selling prices)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Ready-Mixed
Concrete Segment:
|
|
|
|
|
|
|
|
Revenue
|
$
|
313.3
|
|
|
$
|
354.1
|
|
|
$
|
877.9
|
|
|
$
|
958.5
|
|
Adjusted
EBITDA
|
$
|
45.9
|
|
|
$
|
51.5
|
|
|
$
|
115.7
|
|
|
$
|
124.1
|
|
|
|
|
|
|
|
|
|
Ready-Mixed Concrete
Data:
|
|
|
|
|
|
|
|
ASP per cubic
yard(1)
|
$
|
141.38
|
|
|
$
|
138.54
|
|
|
$
|
140.99
|
|
|
$
|
138.81
|
|
Sales volume in
thousand cubic yards
|
2,213
|
|
|
2,551
|
|
|
6,216
|
|
|
6,892
|
|
|
|
(1)
|
Calculation
excludes certain ancillary revenue that is reported within the
segment.
|
Revenue from the ready-mixed concrete segment for the third
quarter of 2020 decreased $40.8
million, or 11.5%, compared to the prior year third quarter,
as the business continued to be impacted by regional effects of the
pandemic, including certain construction project delays and cement
supply shortages. Partially offsetting the impact of the volume
decline on revenue, overall ASP increased due to changes in the
product and geographical mix of revenue compared to the third
quarter of 2019. Despite the volume decline, business contingency
actions, including labor management, concrete mix optimization,
higher asset utilization and delivery efficiencies, which included
lower fuel expenses, reduced the impact to Adjusted EBITDA in the
third quarter of 2020. Adjusted EBITDA as a percentage of revenue
improved in the third quarter of 2020 compared to the third quarter
of 2019 aided by our overall cost containment
efforts.
CONSOLIDATED THIRD QUARTER 2020 RESULTS COMPARED TO THIRD
QUARTER 2019
Consolidated revenue decreased $34.7
million, or 8.5%, compared to the prior year third quarter,
primarily as a result of lower ready-mixed concrete volumes, which
were partially offset by record revenue from aggregate products.
During the third quarter of 2020, operating income was $32.3 million compared to $33.3 million in the third quarter of 2019, with
an operating income margin of 8.6% compared to 8.1% in the third
quarter of 2019. Aggressive cost containment measures,
operating efficiencies, growth from the aggregate products segment,
which included the Coram Materials acquisition, and lower fuel
expenses helped to mitigate the impact on operating income from
lower revenue.
Selling, general and administrative expenses ("SG&A")
were $32.1 million in the third
quarter of 2020 compared to $32.0
million in the third quarter of 2019. SG&A
as a percentage of revenue was 8.6% in the third quarter of
2020 compared to 7.8% in the prior year third quarter. On a
non-GAAP basis, Adjusted SG&A, which excludes non-cash stock
compensation, acquisition-related costs, a pension withdrawal
liability, and realignment initiative costs, was 7.3% of revenue in
the 2020 third quarter compared to 6.3% in the prior year third
quarter, with reduced leverage due to the lower sales volumes.
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.
The income tax benefit for the third quarter of 2020 included
the impact of $10.2 million of tax
benefits related to the finalization of the interest
limitation provisions contained in the Tax Cuts and Jobs Act and
the net operating loss carryback provisions of the Coronavirus Aid,
Relief and Economic Security Act ("CARES Act").
BALANCE SHEET AND LIQUIDITY
Net cash provided by operating activities in the third quarter
of 2020 increased 19.0% to $61.3
million, compared to $51.5
million in the prior year third quarter. The Company's
Adjusted Free Cash Flow in the third quarter of 2020 increased
40.7% to $58.4 million, compared to
$41.5 million in the prior year third
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.
On September 23, 2020, U.S.
Concrete completed a private offering of $400.0 million aggregate principal amount of
5.125% senior unsecured notes due 2029. In October 2020, the Company used the net proceeds
from that notes offering plus borrowings from its revolving credit
facility to redeem $400.0 million of
its outstanding 6.375% senior unsecured notes due 2024. As of
September 30, 2020, the Company had available borrowing
capacity of $240.4 million under its
revolving credit facility and $179.6 million under its delayed draw term
loan facility, resulting in total liquidity of $825.5 million when combined with its cash
balances. At September 30, 2020, U.S. Concrete had
cash and cash equivalents of $405.5
million and total debt of $1,102.8
million, resulting in Net Debt of $697.3 million. Net Debt as of
September 30, 2020 increased $50.6
million from December 31, 2019 due primarily to the
acquisition of Coram Materials in February 2020. Net debt at
September 30, 2020 decreased $44.1
million from June 30, 2020
following positive cash flow performance. 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 Thursday,
October 29, 2020 at 10:00 a.m. Eastern
Time (9:00 a.m. Central Time),
to review its third quarter 2020 results. To participate in
the call, please dial (877) 312-8806 – Conference ID: 9977758 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.
2020 INVESTOR DAY
U.S. Concrete will host a virtual Investor Day on Thursday, November 12, 2020 at 10:30 a.m. Eastern Time (9:30 a.m. Central Time). The event will
include presentations on the Company's business strategy from
Ronnie Pruitt, U.S. Concrete's
President and Chief Executive Officer, and John Kunz, Senior Vice President and Chief
Financial Officer. The live webcast and presentation slides
will be available on the Investor Relations section of the
Company's website at www.us-concrete.com. A replay of the
event will also be made available on the Company's website
following the event.
ABOUT U.S. CONCRETE
U.S. Concrete, Inc. (NASDAQ: USCR) is a leading
supplier of aggregates and concrete for infrastructure, residential
and commercial projects across the country. The Company holds
leading market positions in the high-growth metropolitan markets
of Dallas/Fort Worth, San
Francisco, New York
City, Philadelphia, 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)
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(in millions
except per share amounts)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
$
|
374.2
|
|
|
$
|
408.9
|
|
|
$
|
1,031.3
|
|
|
$
|
1,109.5
|
|
Cost of goods sold
before depreciation, depletion and amortization
|
283.9
|
|
|
321.2
|
|
|
807.9
|
|
|
886.4
|
|
Selling, general and
administrative expenses
|
32.1
|
|
|
32.0
|
|
|
97.5
|
|
|
103.3
|
|
Depreciation,
depletion and amortization
|
25.8
|
|
|
22.3
|
|
|
74.4
|
|
|
70.2
|
|
Change in value of
contingent consideration
|
0.1
|
|
|
0.3
|
|
|
(5.4)
|
|
|
1.6
|
|
Loss (gain) on
sale/disposal of assets, net
|
—
|
|
|
(0.2)
|
|
|
(0.1)
|
|
|
0.8
|
|
Operating
income
|
32.3
|
|
|
33.3
|
|
|
57.0
|
|
|
47.2
|
|
Interest expense,
net
|
12.0
|
|
|
11.6
|
|
|
34.8
|
|
|
34.8
|
|
Other income,
net
|
(0.4)
|
|
|
(0.2)
|
|
|
(1.6)
|
|
|
(7.8)
|
|
Income before income
taxes
|
20.7
|
|
|
21.9
|
|
|
23.8
|
|
|
20.2
|
|
Income tax expense
(benefit)
|
(3.4)
|
|
|
8.3
|
|
|
(4.0)
|
|
|
8.3
|
|
Net income
|
24.1
|
|
|
13.6
|
|
|
27.8
|
|
|
11.9
|
|
Less: Net income
attributable to non-controlling interest
|
0.6
|
|
|
0.6
|
|
|
0.8
|
|
|
0.9
|
|
Net income
attributable to U.S. Concrete
|
$
|
23.5
|
|
|
$
|
13.0
|
|
|
$
|
27.0
|
|
|
$
|
11.0
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to U.S. Concrete:
|
|
|
|
|
|
|
|
Basic
|
$
|
1.42
|
|
|
$
|
0.79
|
|
|
$
|
1.63
|
|
|
$
|
0.67
|
|
Diluted
|
$
|
1.42
|
|
|
$
|
0.79
|
|
|
$
|
1.63
|
|
|
$
|
0.67
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
16.6
|
|
|
16.5
|
|
|
16.6
|
|
|
16.4
|
|
Diluted
|
16.6
|
|
|
16.5
|
|
|
16.6
|
|
|
16.4
|
|
U.S. CONCRETE,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
millions)
|
|
|
September 30,
2020
|
|
December 31,
2019
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
405.5
|
|
|
$
|
40.6
|
|
Trade accounts
receivable, net
|
232.4
|
|
|
233.1
|
|
Inventories
|
68.9
|
|
|
59.0
|
|
Other receivables,
net
|
10.2
|
|
|
8.4
|
|
Prepaid expenses and
other
|
10.9
|
|
|
7.9
|
|
Total current
assets
|
727.9
|
|
|
349.0
|
|
Property, plant and
equipment, net
|
786.7
|
|
|
673.5
|
|
Operating lease
assets
|
69.7
|
|
|
69.8
|
|
Goodwill
|
239.5
|
|
|
239.5
|
|
Intangible assets,
net
|
76.6
|
|
|
92.4
|
|
Other
assets
|
15.3
|
|
|
9.1
|
|
Total
assets
|
$
|
1,915.7
|
|
|
$
|
1,433.3
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
137.2
|
|
|
$
|
136.4
|
|
Accrued
liabilities
|
99.4
|
|
|
63.5
|
|
Current maturities of
long-term debt
|
435.0
|
|
|
32.5
|
|
Current operating
lease liabilities
|
14.0
|
|
|
12.9
|
|
Total current
liabilities
|
685.6
|
|
|
245.3
|
|
Long-term debt, net
of current maturities
|
667.8
|
|
|
654.8
|
|
Long-term operating
lease liabilities
|
59.1
|
|
|
59.7
|
|
Other long-term
obligations and deferred credits
|
45.5
|
|
|
49.1
|
|
Deferred income
taxes
|
56.1
|
|
|
54.8
|
|
Total
liabilities
|
1,514.1
|
|
|
1,063.7
|
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Additional paid-in
capital
|
361.0
|
|
|
348.9
|
|
Retained
earnings
|
54.8
|
|
|
31.1
|
|
Treasury stock, at
cost
|
(37.9)
|
|
|
(36.6)
|
|
Total shareholders'
equity
|
377.9
|
|
|
343.4
|
|
Non-controlling
interest
|
23.7
|
|
|
26.2
|
|
Total
equity
|
401.6
|
|
|
369.6
|
|
Total liabilities and
equity
|
$
|
1,915.7
|
|
|
$
|
1,433.3
|
|
U.S. CONCRETE,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(in
millions)
|
|
|
Nine months ended
September 30,
|
|
2020
|
|
2019
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
|
$
|
27.8
|
|
|
$
|
11.9
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation,
depletion and amortization
|
74.4
|
|
|
70.2
|
|
Amortization of debt
issuance costs
|
1.6
|
|
|
1.3
|
|
Change in value of
contingent consideration
|
(5.4)
|
|
|
1.6
|
|
Gains from eminent
domain matter and property insurance claims
|
—
|
|
|
(6.0)
|
|
Deferred income
taxes
|
2.1
|
|
|
2.0
|
|
Provision for doubtful
accounts and customer disputes
|
1.7
|
|
|
2.2
|
|
Stock-based
compensation
|
8.8
|
|
|
16.4
|
|
Other, net
|
(1.3)
|
|
|
(0.2)
|
|
Changes in assets and
liabilities, excluding effects of acquisitions:
|
|
|
|
Accounts
receivable
|
(3.4)
|
|
|
(33.9)
|
|
Inventories
|
(2.0)
|
|
|
(2.7)
|
|
Prepaid expenses and
other current assets
|
(4.4)
|
|
|
2.9
|
|
Other assets and
liabilities
|
9.8
|
|
|
(1.3)
|
|
Accounts payable and
accrued liabilities
|
35.7
|
|
|
27.7
|
|
Net cash provided by
operating activities
|
145.4
|
|
|
92.1
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchases of property,
plant and equipment
|
(17.5)
|
|
|
(28.6)
|
|
Payment for
acquisition of business
|
(141.8)
|
|
|
—
|
|
Proceeds from sale of
property, plant and equipment
|
0.7
|
|
|
1.2
|
|
Proceeds from eminent
domain matter and property insurance claims
|
—
|
|
|
6.0
|
|
Net cash used in
investing activities
|
(158.6)
|
|
|
(21.4)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Proceeds from issuance
of debt
|
400.0
|
|
|
—
|
|
Proceeds from revolver
borrowings
|
347.9
|
|
|
273.3
|
|
Repayments of revolver
borrowings
|
(347.9)
|
|
|
(277.2)
|
|
Payments for
acquisition-related liabilities
|
(10.0)
|
|
|
(33.4)
|
|
Payments for finance
leases, promissory notes and other
|
(17.7)
|
|
|
(24.2)
|
|
Debt issuance
costs
|
(7.5)
|
|
|
—
|
|
Shares redeemed for
employee income tax obligations
|
(1.2)
|
|
|
(2.2)
|
|
Proceeds from finance
leases and other
|
14.5
|
|
|
0.2
|
|
Net cash provided by
(used in) financing activities
|
378.1
|
|
|
(63.5)
|
|
EFFECT OF EXCHANGE
RATES ON CASH AND CASH EQUIVALENTS
|
—
|
|
|
(0.2)
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
364.9
|
|
|
7.0
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
40.6
|
|
|
20.0
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$
|
405.5
|
|
|
$
|
27.0
|
|
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, excluding the impact of income taxes,
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,
acquisition-related costs, officer transition expenses, purchase
accounting adjustments for inventory, pension withdrawal liability,
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 (in
millions).
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Total Adjusted
EBITDA Reconciliation
|
|
|
|
|
|
|
|
Net income
|
$
|
24.1
|
|
|
$
|
13.6
|
|
|
$
|
27.8
|
|
|
$
|
11.9
|
|
Add/(subtract):
Income tax expense (benefit)
|
(3.4)
|
|
|
8.3
|
|
|
(4.0)
|
|
|
8.3
|
|
Income before income
taxes
|
20.7
|
|
|
21.9
|
|
|
23.8
|
|
|
20.2
|
|
Add:
Depreciation, depletion and amortization
|
25.8
|
|
|
22.3
|
|
|
74.4
|
|
|
70.2
|
|
Add: Interest
expense, net
|
12.0
|
|
|
11.6
|
|
|
34.8
|
|
|
34.8
|
|
Add: Non-cash
stock compensation expense
|
2.6
|
|
|
5.3
|
|
|
8.8
|
|
|
16.4
|
|
Add: Pension
withdrawal liability
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
Add/(subtract):
Non-cash change in value of contingent consideration
|
0.1
|
|
|
0.3
|
|
|
(5.4)
|
|
|
1.6
|
|
Add: Purchase
accounting adjustments for inventory
|
0.4
|
|
|
—
|
|
|
4.6
|
|
|
—
|
|
Add:
Acquisition-related costs
|
0.3
|
|
|
0.2
|
|
|
1.6
|
|
|
1.0
|
|
Add: Realignment
initiative costs
|
0.5
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
Add: Officer
transition expenses
|
—
|
|
|
0.5
|
|
|
0.2
|
|
|
1.1
|
|
Add: Loss on
mixer truck fire
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
Subtract: Eminent
domain matter
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3)
|
|
Subtract:
Hurricane-related loss recoveries, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.1)
|
|
Total Adjusted
EBITDA
|
$
|
63.9
|
|
|
$
|
62.1
|
|
|
$
|
145.7
|
|
|
$
|
138.6
|
|
|
|
|
|
|
|
|
|
Net income
margin
|
6.4
|
%
|
|
3.3
|
%
|
|
2.7
|
%
|
|
1.1
|
%
|
Total Adjusted EBITDA
Margin
|
17.1
|
%
|
|
15.2
|
%
|
|
14.1
|
%
|
|
12.5
|
%
|
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, 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
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted Gross
Profit Reconciliation
|
|
|
|
|
|
|
|
Operating
income
|
$
|
32.3
|
|
|
$
|
33.3
|
|
|
$
|
57.0
|
|
|
$
|
47.2
|
|
Add: Depreciation,
depletion and amortization
|
25.8
|
|
|
22.3
|
|
|
74.4
|
|
|
70.2
|
|
Add: Selling, general
and administrative expenses
|
32.1
|
|
|
32.0
|
|
|
97.5
|
|
|
103.3
|
|
Add/(subtract):
Change in value of contingent consideration
|
0.1
|
|
|
0.3
|
|
|
(5.4)
|
|
|
1.6
|
|
Add: Purchase
accounting adjustments for inventory
|
0.4
|
|
|
—
|
|
|
4.6
|
|
|
—
|
|
Add/(subtract): Loss
(gain) on sale/disposal of assets, net
|
—
|
|
|
(0.2)
|
|
|
(0.1)
|
|
|
0.8
|
|
Adjusted Gross
Profit
|
$
|
90.7
|
|
|
$
|
87.7
|
|
|
$
|
228.0
|
|
|
$
|
223.1
|
|
|
|
|
|
|
|
|
|
Operating income
margin
|
8.6
|
%
|
|
8.1
|
%
|
|
5.5
|
%
|
|
4.3
|
%
|
Adjusted Gross Profit
Margin
|
24.2
|
%
|
|
21.4
|
%
|
|
22.1
|
%
|
|
20.1
|
%
|
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, pension withdrawal liability, and
realignment 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
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted SG&A
Reconciliation
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
$
|
32.1
|
|
|
$
|
32.0
|
|
|
$
|
97.5
|
|
|
$
|
103.3
|
|
Subtract: Non-cash
stock compensation expense
|
(2.6)
|
|
|
(5.3)
|
|
|
(8.8)
|
|
|
(16.4)
|
|
Subtract:
Acquisition-related costs
|
(0.3)
|
|
|
(0.2)
|
|
|
(1.6)
|
|
|
(1.0)
|
|
Subtract: Pension
withdrawal liability
|
(1.5)
|
|
|
—
|
|
|
(1.5)
|
|
|
—
|
|
Subtract: Realignment
initiative costs
|
(0.5)
|
|
|
—
|
|
|
(1.4)
|
|
|
—
|
|
Subtract: Officer
transition expenses
|
—
|
|
|
(0.5)
|
|
|
(0.2)
|
|
|
(1.1)
|
|
Adjusted
SG&A
|
$
|
27.2
|
|
|
$
|
26.0
|
|
|
$
|
84.0
|
|
|
$
|
84.8
|
|
|
|
|
|
|
|
|
|
SG&A as a
percentage of revenue
|
8.6
|
%
|
|
7.8
|
%
|
|
9.5
|
%
|
|
9.3
|
%
|
Adjusted SG&A as
a percentage of revenue
|
7.3
|
%
|
|
6.3
|
%
|
|
8.1
|
%
|
|
7.6
|
%
|
Adjusted Net Income Attributable to U.S.
Concrete and Adjusted Net Income Attributable to U.S. Concrete per
Diluted Share
Adjusted Net Income Attributable to U.S. Concrete and Adjusted
Net Income Attributable to U.S. Concrete per Diluted Share are
non-GAAP financial measures. We define Adjusted Net Income
Attributable to U.S. Concrete as net income 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,
acquisition-related costs, officer transition expenses, purchase
accounting adjustments for inventory, and realignment initiative
costs. We also adjust Adjusted Net Income Attributable to
U.S. Concrete for a normalized effective income tax rate of 27%. We
define Adjusted Net Income Attributable to U.S. Concrete per
Diluted Share as Adjusted Net Income Attributable to U.S. Concrete
on a diluted per share basis. Acquisition-related costs
consist of fees and expenses for accountants, lawyers and other
professionals incurred during the negotiation and closing of
strategic acquisitions and certain acquired entities' management
severance costs. Acquisition-related costs do not include
fees or expenses associated with post-closing integration of
strategic acquisitions.
We have included Adjusted Net Income Attributable to U.S.
Concrete and Adjusted Net Income Attributable to U.S. Concrete per
Diluted Share herein because they are used by investors for
valuation and comparing our financial performance with the
performance of other building material companies. We use
Adjusted Net Income Attributable to U.S. Concrete and Adjusted Net
Income Attributable to U.S. Concrete per Diluted Share to monitor
and compare the financial performance of our operations.
Adjusted Net Income Attributable to U.S. Concrete and Adjusted Net
Income Attributable to U.S. Concrete per Diluted Share are not
intended to be used as an alternative to any measure of our
performance in accordance with GAAP.
The following tables reconcile (i) Adjusted Net Income
Attributable to U.S. Concrete to the most directly comparable GAAP
financial measure, which is net income attributable to U.S.
Concrete and (ii) Adjusted Net Income Attributable to U.S. Concrete
per Diluted Share to the most directly comparable GAAP financial
measure, which is net income attributable to U.S. Concrete
per diluted share (in millions except per share amounts).
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted Net
Income Attributable to U.S. Concrete Reconciliation
|
|
|
|
|
|
|
|
Net income
attributable to U.S. Concrete
|
$
|
23.5
|
|
|
$
|
13.0
|
|
|
$
|
27.0
|
|
|
$
|
11.0
|
|
Add/(subtract):
Income tax expense (benefit)
|
(3.4)
|
|
|
8.3
|
|
|
(4.0)
|
|
|
8.3
|
|
Adjusted income
before income taxes
|
20.1
|
|
|
21.3
|
|
|
23.0
|
|
|
19.3
|
|
Add: Non-cash
stock compensation expense
|
2.6
|
|
|
5.3
|
|
|
8.8
|
|
|
16.4
|
|
Add/(subtract):
Non-cash change in value of contingent consideration
|
0.1
|
|
|
0.3
|
|
|
(5.4)
|
|
|
1.6
|
|
Add: Purchase
accounting adjustments for inventory
|
0.4
|
|
|
—
|
|
|
4.6
|
|
|
—
|
|
Add:
Acquisition-related costs
|
0.3
|
|
|
0.2
|
|
|
1.6
|
|
|
1.0
|
|
Add: Pension
withdrawal liability
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
Add:
Realignment initiative costs
|
0.5
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
Add: Officer
transition expenses
|
—
|
|
|
0.5
|
|
|
0.2
|
|
|
1.1
|
|
Add: Loss on
mixer truck fire
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
Subtract:
Eminent domain matter
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3)
|
|
Subtract:
Hurricane-related loss recoveries, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.1)
|
|
Adjusted income
before income taxes
|
25.5
|
|
|
27.6
|
|
|
35.7
|
|
|
32.7
|
|
Subtract:
Normalized income tax expense(1)
|
6.9
|
|
|
7.4
|
|
|
9.6
|
|
|
8.8
|
|
Adjusted Net Income
Attributable to U.S. Concrete
|
$
|
18.6
|
|
|
$
|
20.2
|
|
|
$
|
26.1
|
|
|
$
|
23.9
|
|
|
|
|
|
|
|
|
|
(1) Assumes a
normalized effective tax rate of 27% in all periods.
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted Net
Income Attributable to U.S. Concrete per Diluted Share
Reconciliation
|
|
|
|
|
|
|
|
Net income
attributable to U.S. Concrete
|
$
|
1.42
|
|
|
$
|
0.79
|
|
|
$
|
1.63
|
|
|
$
|
0.67
|
|
Add: Income tax
expense (benefit)
|
(0.20)
|
|
|
0.50
|
|
|
(0.24)
|
|
|
0.51
|
|
Adjusted income
before income taxes
|
1.22
|
|
|
1.29
|
|
|
1.39
|
|
|
1.18
|
|
Add: Impact of
non-cash stock compensation expense
|
0.16
|
|
|
0.32
|
|
|
0.53
|
|
|
1.00
|
|
Add/(subtract):
Impact of non-cash change in value of contingent
consideration
|
0.01
|
|
|
0.03
|
|
|
(0.33)
|
|
|
0.10
|
|
Add: Impact of
purchase accounting adjustments for inventory
|
0.02
|
|
|
—
|
|
|
0.28
|
|
|
—
|
|
Add: Impact of
acquisition-related costs
|
0.01
|
|
|
—
|
|
|
0.10
|
|
|
0.06
|
|
Add: Impact of
pension withdrawal liability
|
0.09
|
|
|
—
|
|
|
0.09
|
|
|
—
|
|
Add: Impact of
realignment initiative costs
|
0.03
|
|
|
—
|
|
|
0.08
|
|
|
—
|
|
Add: Impact of
officer transition expenses
|
—
|
|
|
0.04
|
|
|
0.01
|
|
|
0.07
|
|
Add: Impact of
loss on mixer truck fire
|
—
|
|
|
—
|
|
|
—
|
|
|
0.04
|
|
Subtract: Impact of
eminent domain matter
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.32)
|
|
Subtract: Impact of
hurricane-related loss recoveries, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.13)
|
|
Adjusted income
before income taxes
|
1.54
|
|
|
1.68
|
|
|
2.15
|
|
|
2.00
|
|
Subtract:
Normalized income tax expense(1)
|
0.42
|
|
|
0.46
|
|
|
0.58
|
|
|
0.54
|
|
Adjusted Net Income
Attributable to U.S. Concrete per Diluted Share
|
$
|
1.12
|
|
|
$
|
1.22
|
|
|
$
|
1.57
|
|
|
$
|
1.46
|
|
|
|
|
|
|
|
|
|
(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 sale of 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
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted Free Cash
Flow Reconciliation
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
61.3
|
|
|
$
|
51.5
|
|
|
$
|
145.4
|
|
|
$
|
92.1
|
|
Subtract: Purchases
of property, plant and equipment
|
(3.3)
|
|
|
(10.5)
|
|
|
(17.5)
|
|
|
(28.6)
|
|
Add: Proceeds from
sale of property, plant and equipment
|
0.4
|
|
|
0.5
|
|
|
0.7
|
|
|
1.2
|
|
Add: Proceeds from
eminent domain matter and property insurance claims
|
—
|
|
|
—
|
|
|
—
|
|
|
6.0
|
|
Adjusted Free Cash
Flow
|
$
|
58.4
|
|
|
$
|
41.5
|
|
|
$
|
128.6
|
|
|
$
|
70.7
|
|
Net Debt
Net Debt is a non-GAAP financial measure. We define Net
Debt as total debt, including current maturities and capital lease
obligations, less cash and cash equivalents. We believe that
Net Debt is useful to investors as a measure of our financial
position. We use Net Debt to monitor and compare our
financial position from period to period. However, Net Debt
is not intended to be used as an alternative to any measure of our
financial position in accordance with GAAP. The following
table reconciles Net Debt to the most directly comparable GAAP
financial measure, which is total debt, including current
maturities and capital lease obligations (in millions).
|
As
of
|
|
As
of
|
|
September 30,
2020
|
|
December 31,
2019
|
Net Debt
Reconciliation
|
|
|
|
Total debt, including
current maturities and finance lease obligations
|
$
|
1,102.8
|
|
|
$
|
687.3
|
|
Subtract: cash and
cash equivalents
|
405.5
|
|
|
40.6
|
|
Net Debt
|
$
|
697.3
|
|
|
$
|
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, excluding the impact of income taxes, 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,
acquisition-related costs, officer transition expenses, purchase
accounting adjustments for inventory, pension withdrawal liability,
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
|
|
|
September 30,
2020
|
Total LTM Adjusted
EBITDA Reconciliation
|
|
|
Net income
|
|
$
|
32.3
|
|
Add: Income tax
expense
|
|
—
|
|
Income before income
taxes
|
|
32.3
|
|
Add:
Depreciation, depletion and amortization
|
|
97.4
|
|
Add: Interest
expense, net
|
|
46.1
|
|
Add: Non-cash
stock compensation expense
|
|
11.4
|
|
Add/(subtract):
Non-cash change in value of contingent consideration
|
|
(4.2)
|
|
Add: Purchase
accounting adjustments for inventory
|
|
4.6
|
|
Add: Pension
withdrawal liability
|
|
1.5
|
|
Add:
Realignment initiative costs
|
|
1.4
|
|
Add:
Acquisition-related costs, net
|
|
0.7
|
|
Add: Litigation
settlement cost
|
|
0.3
|
|
Add: Officer
transition expenses
|
|
(0.3)
|
|
Total LTM Adjusted
EBITDA
|
|
191.2
|
|
|
|
|
Net Debt
|
|
$
|
697.3
|
|
|
|
|
Total debt to LTM net
income
|
|
34.14x
|
|
Net Debt to Total LTM
Adjusted EBITDA as of September 30, 2020
|
|
3.65x
|
|
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.