UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the Quarterly Period Ended March 31, 2007
Commission
File Number 000-26025
U.S.
CONCRETE, INC.
A
Delaware Corporation
IRS
Employer Identification No. 76-0586680
2925
Briarpark, Suite 1050
Houston,
Texas 77042
(713)
499-6200
Indicate
by check mark whether the registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements
for
the past 90 days. Yes þ
No
¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of
the Exchange Act).
Large
accelerated filer ¨
Accelerated filer þ
Non-accelerated filer ¨
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ¨
No
þ
As
of the
close of business on May 8, 2007, U.S. Concrete, Inc. had 39,076,299
shares
of its common stock, $0.001 par value, outstanding (excluding treasury shares
of
289,575).
U.S.
CONCRETE, INC.
INDEX
|
Page
No.
|
Part
I - Financial Information
|
|
Item
1. Financial Statements
|
|
Condensed
Consolidated Balance Sheets
|
1
|
Condensed
Consolidated Statements of
Operations
|
2
|
Condensed
Consolidated Statement of Changes in Stockholders’
Equity
|
3
|
Condensed
Consolidated Statements of Cash
Flows
|
4
|
Notes
to Condensed Consolidated Financial
Statements
|
5
|
Item
2. Management’s Discussion and Analysis of
Financial Condition and Results of
Operations
|
13
|
Item
3. Quantitative and Qualitative Disclosures
About Market Risk
|
21
|
Item
4. Controls and
Procedures
|
21
|
|
|
Part
II - Other Information
|
|
Item
1. Legal Proceedings
|
22
|
Item
2. Unregistered Sales of Equity Securities
and Use of Proceeds
|
22
|
Item
6. Exhibits
|
23
|
|
|
SIGNATURE
|
24
|
INDEX
TO EXHIBITS
|
25
|
PART
I - FINANCIAL INFORMATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in
thousands)
|
|
March
31,
|
|
December
31,
|
|
|
|
2007
|
|
2006
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
9,501
|
|
$
|
8,804
|
|
Trade
accounts receivable, net
|
|
|
99,867
|
|
|
109,161
|
|
Inventories
|
|
|
33,046
|
|
|
33,777
|
|
Prepaid
expenses
|
|
|
6,163
|
|
|
2,984
|
|
Other
current assets
|
|
|
20,241
|
|
|
16,396
|
|
Total
current assets
|
|
|
168,818
|
|
|
171,122
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
|
268,817
|
|
|
281,021
|
|
Goodwill
|
|
|
259,653
|
|
|
251,499
|
|
Other
assets, net
|
|
|
12,848
|
|
|
13,004
|
|
Total
assets
|
|
$
|
710,136
|
|
$
|
716,646
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Current
maturities of long-term debt
|
|
$
|
3,596
|
|
$
|
3,764
|
|
Accounts
payable
|
|
|
35,736
|
|
|
49,785
|
|
Accrued
liabilities
|
|
|
55,928
|
|
|
52,886
|
|
Total
current liabilities
|
|
|
95,260
|
|
|
106,435
|
|
|
|
|
|
|
|
|
|
Long-term
debt, net of current
maturities
|
|
|
308,927
|
|
|
299,528
|
|
Other
long-term liabilities and deferred
credits
|
|
|
10,950
|
|
|
7,594
|
|
Deferred
income taxes
|
|
|
29,973
|
|
|
33,512
|
|
Total
liabilities
|
|
|
445,110
|
|
|
447,069
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies (Note 10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity:
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
—
|
|
|
—
|
|
Common
stock
|
|
|
39
|
|
|
39
|
|
Additional
paid-in capital
|
|
|
263,917
|
|
|
262,856
|
|
Retained
earnings
|
|
|
3,154
|
|
|
8,541
|
|
Treasury
stock, at cost
|
|
|
(2,084
|
)
|
|
(1,859
|
)
|
Total
stockholders’ equity
|
|
|
265,026
|
|
|
269,577
|
|
Total
liabilities and stockholders’
equity
|
|
$
|
710,136
|
|
$
|
716,646
|
|
The
accompanying notes are an integral part of these condensed consolidated
financial statements.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in
thousands, except per share amounts)
|
|
Three
Months
Ended
March 31,
|
|
|
|
2007
|
|
2006
|
|
|
|
|
|
Sales
|
|
$
|
169,389
|
|
$
|
139,594
|
|
Cost
of goods sold before depreciation, depletion and
amortization
|
|
|
147,620
|
|
|
120,796
|
|
Selling,
general and administrative
expenses
|
|
|
17,740
|
|
|
15,434
|
|
Depreciation,
depletion and
amortization
|
|
|
7,218
|
|
|
4,176
|
|
Loss
from
operations
|
|
|
(3,189
|
)
|
|
(812
|
)
|
Interest
income
|
|
|
24
|
|
|
696
|
|
Interest
expense
|
|
|
6,891
|
|
|
4,632
|
|
Other
income, net
|
|
|
483
|
|
|
387
|
|
Loss
before income taxes
|
|
|
(9,573
|
)
|
|
(4,361
|
)
|
Income
tax benefit
|
|
|
(3,844
|
)
|
|
(1,660
|
)
|
Net
loss
|
|
$
|
(5,729
|
)
|
$
|
(2,701
|
)
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per
share
|
|
$
|
(0.15
|
)
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
Basic
and diluted common shares
outstanding
|
|
|
38,030
|
|
|
33,669
|
|
The
accompanying notes are an integral part of these condensed consolidated
financial statements.
U.S.
CONCRETE, INC.
CONDENSED
CONSOLIDATED STATEMENT
OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
(in
thousands)
|
|
Common
Stock
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Par
Value
|
|
Additional
Paid-In Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Total
Stockholders’ Equity
|
|
BALANCE,
December 31,
2006
|
|
|
38,795
|
|
$
|
39
|
|
$
|
262,856
|
|
$
|
8,541
|
|
$
|
(1,859
|
)
|
$
|
269,577
|
|
Change
in accounting principle for FIN
No. 48
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
342
|
|
|
—
|
|
|
342
|
|
Stock
options exercised
|
|
|
60
|
|
|
—
|
|
|
425
|
|
|
—
|
|
|
—
|
|
|
425
|
|
Stock-based
compensation
|
|
|
289
|
|
|
—
|
|
|
636
|
|
|
—
|
|
|
—
|
|
|
636
|
|
Purchase
of treasury shares
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(225
|
)
|
|
(225
|
)
|
Cancellation
of shares
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net
loss
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,729
|
)
|
|
—
|
|
|
(5,729
|
)
|
BALANCE,
March 31,
2007
|
|
|
39,115
|
|
$
|
39
|
|
$
|
263,917
|
|
$
|
3,154
|
|
$
|
(2,084
|
)
|
$
|
265,026
|
|
The
accompanying notes are an integral part of these condensed consolidated
financial statements.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in
thousands)
|
|
Three
Months
Ended
March 31,
|
|
|
|
2007
|
|
2006
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
Net
loss
|
|
$
|
(5,729
|
)
|
$
|
(2,701
|
)
|
Adjustments
to reconcile net loss to net cash provided by (used in) operations:
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
7,218
|
|
|
4,176
|
|
Debt
issuance cost amortization
|
|
|
380
|
|
|
326
|
|
Net
(gain) loss on sale of property, plant and
equipment
|
|
|
4
|
|
|
(460
|
)
|
Deferred
income taxes
|
|
|
(3,898
|
)
|
|
642
|
|
Provision
for doubtful accounts
|
|
|
306
|
|
|
184
|
|
Stock-based
compensation
|
|
|
636
|
|
|
606
|
|
Excess
tax benefits from stock-based
compensation
|
|
|
(54
|
)
|
|
(1,105
|
)
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
Trade
accounts receivable
|
|
|
9,006
|
|
|
9,051
|
|
Inventories
|
|
|
731
|
|
|
(783
|
)
|
Prepaid
expenses and other current
assets
|
|
|
(1,865
|
)
|
|
(833
|
)
|
Other
assets
|
|
|
(39
|
)
|
|
(350
|
)
|
Accounts
payable and accrued
liabilities
|
|
|
(7,668
|
)
|
|
(8,108
|
)
|
Net
cash provided by (used in) operating
activities
|
|
|
(972
|
)
|
|
645
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Property,
plant and equipment, net of disposals of $250 and
$1,056
|
|
|
(7,374
|
)
|
|
(4,342
|
)
|
Other
investing activities
|
|
|
(174
|
)
|
|
425
|
|
Net
cash used in investing
activities
|
|
|
(7,548
|
)
|
|
(3,917
|
)
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds
from borrowings
|
|
|
10,100
|
|
|
—
|
|
Repayment
of capital leases and notes
payable
|
|
|
(929
|
)
|
|
(731
|
)
|
Proceeds
from issuance of common
stock
|
|
|
—
|
|
|
84,812
|
|
Proceeds
from issuance of common stock under compensation
plans
|
|
|
371
|
|
|
3,630
|
|
Debt
issuance costs
|
|
|
(154
|
)
|
|
—
|
|
Excess
tax benefits from stock-based
compensation
|
|
|
54
|
|
|
1,105
|
|
Purchase
of treasury stock
|
|
|
(225
|
)
|
|
(20
|
)
|
Net
cash provided by financing
activities
|
|
|
9,217
|
|
|
88,796
|
|
NET
INCREASE IN CASH AND CASH
EQUIVALENTS
|
|
|
697
|
|
|
85,524
|
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD
|
|
|
8,804
|
|
|
23,654
|
|
CASH
AND CASH EQUIVALENTS AT END OF
PERIOD
|
|
$
|
9,501
|
|
$
|
109,178
|
|
The
accompanying notes are an integral part of these condensed consolidated
financial statements.
U.S.
CONCRETE, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.
BASIS OF PRESENTATION
The
accompanying condensed consolidated financial statements include the accounts
of
U.S. Concrete, Inc. and its subsidiaries and have been prepared by us, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission (the “SEC”). Some information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the SEC’s rules
and regulations, although our management believes that the disclosures made
are
adequate to make the information presented not misleading. These unaudited
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and related notes in our annual report
on
Form 10-K for the year ended December 31, 2006 (the “2006 Form 10-K”). In the
opinion of our management, all adjustments necessary to state fairly the
information in our unaudited Condensed Consolidated Financial Statements have
been included. Operating results for the three-month period ended March 31,
2007
are not necessarily indicative of our results expected for the year ending
December 31, 2007.
The
preparation of financial statements and accompanying notes in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported.
Actual results could differ from those estimates.
2.
SIGNIFICANT ACCOUNTING POLICIES
For
a
description of our accounting policies, see Note 1 of the consolidated financial
statements in the 2006 Form 10-K, as well as Notes 7, 11 and 13 herein.
3. BUSINESS
COMBINATIONS
In
November 2006, we acquired a small ready-mixed concrete and sand and gravel
quarry operation in Breckenridge, Texas. The purchase price was $3.0 million
in
cash and the assumption of approximately $0.4 million in debt.
In
October 2006, we acquired certain aggregates assets located in New Jersey from
Pinnacle Materials, Inc. for $12.5 million in cash. The assets consist of a
granite quarry and a natural sand pit.
In
July
2006, we acquired all of the equity interests of Alberta Investments, Inc.
and
Alliance Haulers, Inc. for $165.0 million, subject to post-closing adjustments.
We funded the payment of the purchase price with net proceeds from the private
placement of $85.0 million in senior subordinated notes due 2014, issued in
July
2006, a borrowing under the revolving credit facility provided by our Amended
and Restated Senior Secured Credit Agreement (the “Credit Agreement”) and cash
on hand. We also effectively assumed, in connection with this acquisition,
equipment financing loans of approximately $10.6 million. Alberta
Investments conducts the substantial majority of its operations through two
subsidiaries: Redi-Mix, L.P. and Ingram Enterprises, L.P. Redi-Mix operates
13
ready-mixed concrete plants in the Dallas/Fort Worth Metroplex and in areas
north of the Metroplex. Ingram Enterprises operates 17 ready-mixed concrete
plants and three sand and gravel plants in West Texas. Redi-Mix and Ingram
operate a combined fleet of approximately 310 mixer trucks and produced
approximately 2.4 million cubic yards of ready-mixed concrete and 1.1 million
tons of aggregates in 2005. Alliance Haulers provides cement and aggregates
hauling services with a fleet of approximately 260 hauling trucks owned by
Redi-Mix and third-party haulers. The accompanying balance sheet at March 31,
2007 includes our preliminary allocations of the purchase price for this
acquisition. The preliminary purchase price allocation is subject to certain
contractual provisions which require third-party review. We expect to complete
this review in the second quarter of this year.
In
June
2006, we acquired the operating assets, including real property, of Olson
Precast Company used in the production of precast concrete products in northern
California, for $4.8 million in cash.
In
April
2006, we acquired Kurtz Gravel Company and the Phoenix operating assets of
Pre-Cast Mfg., Inc. Kurtz produces ready-mixed concrete from six plants and
mines aggregates from a quarry, all located in or near U.S. Concrete’s existing
operations in the metropolitan Detroit area. We purchased Kurtz for
approximately $13.0 million in cash and assumed certain capital lease
liabilities with a net present value of approximately $1.5 million. We purchased
the Pre-Cast Mfg. assets for approximately $5.0 million using cash on
hand.
U.S.
CONCRETE, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
4.
INVENTORIES
Inventories
consist of the following (in thousands):
|
|
March
31,
|
|
December
31,
|
|
|
|
2007
|
|
2006
|
|
|
|
|
|
|
|
Raw
materials
|
|
$
|
15,276
|
|
$
|
16,490
|
|
Precast
products
|
|
|
7,802
|
|
|
7,959
|
|
Building
materials for resale
|
|
|
5,873
|
|
|
5,236
|
|
Repair
parts
|
|
|
4,095
|
|
|
4,092
|
|
|
|
$
|
33,046
|
|
$
|
33,777
|
|
5.
GOODWILL
The
change in the carrying amount of goodwill from December 31, 2006 to March 31,
2007 was as follows (in thousands):
|
|
Ready-Mixed
Concrete and Concrete-Related Products
|
|
Western
Precast Concrete
|
|
Total
|
|
Balance
at December 31, 2006
|
|
$
|
216,598
|
|
$
|
34,901
|
|
$
|
251,499
|
|
Acquisitions
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjustments
|
|
|
8,154
|
|
|
—
|
|
|
8,154
|
|
Balance
at March 31, 2007
|
|
$
|
224,752
|
|
$
|
34,901
|
|
$
|
259,653
|
|
The
adjustment made in the three months ended March 31, 2007 related to adjustments
of our preliminary purchase price allocations in connection with acquisitions
completed in the second and third quarters of 2006.
6.
DEBT
A
summary
of debt is as follows (in thousands):
|
|
March
31,
|
|
December
31,
|
|
|
|
2007
|
|
2006
|
|
Senior
secured credit facility due
2011
|
|
$
|
19,200
|
|
$
|
9,100
|
|
8⅜%
senior subordinated notes due
2014
|
|
|
283,664
|
|
|
283,616
|
|
Notes
payable
|
|
|
8,238
|
|
|
9,043
|
|
Capital
leases
|
|
|
1,421
|
|
|
1,533
|
|
|
|
|
312,523
|
|
|
303,292
|
|
Less:
current maturities
|
|
|
3,596
|
|
|
3,764
|
|
|
|
$
|
308,927
|
|
$
|
299,528
|
|
On
June
30, 2006, we entered into the Credit Agreement, which amended and restated
our
senior secured credit agreement dated as of March 12, 2004.
The
Credit Agreement, as amended to date, provides for a $150 million revolving
credit facility, with borrowings limited based on a portion of the net amounts
of eligible accounts receivable, inventory and mixer trucks. The facility
matures in March 2011. At March 31, 2007, borrowings under the facility
would have borne annual interest at the Eurodollar-based rate (“LIBOR”) plus
1.75% or the domestic rate plus 0.25%. The outstanding borrowings under the
facility as of March 31, 2007 were bearing interest at the rate of 7.4% per
annum, based on our election to borrow at the LIBOR rate plus the applicable
margin. The interest rate margins vary inversely with the amount of unused
borrowing capacity available under the facility. Commitment fees at an
annual rate of 0.25% are payable on the unused portion of the facility.
Our
subsidiaries have guaranteed the repayment of all amounts owing under the Credit
Agreement. In addition, we collateralized our obligations under the Credit
Agreement with the capital stock of our subsidiaries, excluding minor
subsidiaries without operations or material assets, and substantially all the
assets of those subsidiaries, excluding most of the assets of the aggregates
quarry in northern New Jersey and other real estate owned by us or our
subsidiaries. The Credit Agreement contains covenants restricting, among other
things, prepayment or redemption of subordinated notes, distributions, dividends
and repurchases of capital stock and other equity interests, acquisitions and
investments, mergers, asset sales other than in the ordinary course of business,
indebtedness, liens, changes in business, changes to charter documents and
affiliate transactions. It also limits capital expenditures (excluding permitted
acquisitions) to $45 million for 2006 and the greater of $45 million or 5%
of
consolidated revenues in the prior 12 months after 2006 and will require us
to
maintain a minimum fixed-charge coverage ratio of 1.0 to 1.0 on a rolling
12-month basis if the available credit under the facility falls below $25
million. The Credit Agreement provides that specified change-of-control events
would constitute events of default.
U.S.
CONCRETE, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
Continued
The
Credit Agreement provides that the administrative agent may, on the bases
specified, reduce the amount of the available credit from time to time. At
March
31, 2007, there was $19.2 million of revolving credit borrowings outstanding
under the Credit Agreement and the amount of the available credit was
approximately $85.5 million, net of outstanding letters of credit of $14.3
million.
On
March
31, 2004, we issued $200 million of 8⅜% senior subordinated notes due April 1,
2014. Interest on these notes is payable semi-annually
on April 1 and October 1 of each year. We
used the
net proceeds of this financing to redeem our prior 12% senior subordinated
notes
and prepay the outstanding debt under our credit facility. In July 2006, we
issued $85 million of additional 8⅜% senior subordinated notes due April 1, 2014
to fund a portion of the purchase price for the acquisition of Alberta
Investments and Alliance Haulers.
All
of
our subsidiaries, excluding minor subsidiaries, have jointly and severally
and
fully and unconditionally guaranteed the repayment of the 8⅜%
senior
subordinated notes. We directly or indirectly own 100% of each subsidiary
guarantor. Separate financial statements of the subsidiary guarantors are not
provided because we have no independent assets or operations, the guarantees
are
full and unconditional and joint and several, and the non-guarantor subsidiaries
are minor. There are no significant restrictions on our ability or the ability
of any guarantor to obtain funds from our subsidiaries by dividend or
loan.
The
indenture governing the notes limits our ability and the ability of our
subsidiaries to pay dividends or repurchase common stock, make certain
investments, incur additional debt or sell preferred stock, create liens, merge
or transfer assets. After March 31, 2009, we may redeem all or a part of the
notes at a redemption price of 104.188% in 2009, 102.792% in 2010, 101.396%
in
2011 and 100% in 2012 and thereafter. The indenture requires us to offer to
repurchase (1) an aggregate principal amount of the subordinated notes equal
to
the proceeds of certain asset sales that are not reinvested in the business
or
used to pay senior debt, and (2) all the notes following the occurrence of
a
change of control. The Credit Agreement would prohibit these repurchases.
As
a
result of restrictions contained in the indenture relating to the 8⅜% senior
subordinated notes, our ability to incur additional debt is primarily limited
to
the greater of (1) borrowings available under our Credit Agreement, plus the
greater of $15 million or 7.5% of our tangible assets, or (2) additional debt
if, after giving effect to the incurrence of such additional debt, our earnings
before interest, taxes, depreciation, amortization and certain noncash items
equal or exceed two times its total interest expense.
For
the
three months ended March 31, our interest payments were approximately $0.5
million in 2007 and $0.2 million in 2006.
7.
INCOME TAXES
In
accordance with applicable generally accepted accounting principles, we estimate
for each interim reporting period the effective tax rate we expect for the
full
fiscal year and use that estimated rate in providing our income taxes on a
current year-to-date basis.
The
effective income tax rates of approximately 40% and 38% for the first three
months of 2007 and 2006, respectively, differed from the federal statutory
rate
of 35% due primarily to state income taxes.
For
the
three months ended March 31, our income tax payments were approximately $1.8
million in 2007 and $30,000 in 2006.
See
Note
13 for a discussion of our adoption of Financial
Accounting Standards Board (FASB) Interpretation No. 48, “Accounting
for Uncertainty in Income Taxes, an Interpretation of FASB Statement
No. 109” (“FIN 48”).
In
accordance with FIN 48, we recognize a tax benefit associated with an uncertain
tax position when, in our judgment, it is more likely than not that the position
will be sustained upon examination by a taxing authority. For a tax position
that meets the more-likely-than-not recognition threshold, we initially and
subsequently measure the tax benefit as the largest amount that we judge to
have
a greater than 50% likelihood of being realized upon ultimate settlement with
a
taxing authority. Our liability associated with unrecognized tax benefits is
adjusted periodically due to changing circumstances, such as the progress of
tax
audits, case law developments and new or emerging legislation. Such adjustments
are recognized entirely in the period in which they are identified. Our
effective tax rate includes the net impact of changes in the liability for
unrecognized tax benefits and subsequent adjustments as considered appropriate
by management.
U.S.
CONCRETE, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
Continued
In
2004,
we incurred a federal net operating loss
from the
costs related to early extinguishment of debt. We filed a $2.2 million
tentative refund claim in our amended tax return for 2002, reporting the
2004 net operating loss carryback. We received the $2.2 million tax
refund in 2005. This refund claim is subject to review by
the U.S. government, which is currently in process.
8.
STOCKHOLDERS’ EQUITY
Common
Stock and Preferred Stock
The
following table presents information regarding U.S. Concrete’s common stock (in
thousands):
|
|
March
31,
|
|
December
31,
|
|
|
|
2007
|
|
2006
|
|
Shares
authorized
|
|
|
60,000
|
|
|
60,000
|
|
Shares
outstanding at end of period
|
|
|
39,115
|
|
|
38,795
|
|
Shares
held in treasury
|
|
|
251
|
|
|
231
|
|
We
are
authorized to issue 10,000,000 shares of preferred stock, $0.001 par value,
of
which none were outstanding as of March 31, 2007 and December 31,
2006.
Treasury
Stock
Employees
may elect to satisfy their tax obligations on the vesting of their restricted
stock by having us make the required tax payments and withhold a number of
vested shares having an aggregate value on the date of vesting equal to the
tax
obligation. As a result of such employee elections, we withheld approximately
20,000 shares during the three months ended March 31, 2007, at a total value
of
$0.2 million, and we accounted for those shares as treasury stock.
Public
Offering of Common Stock
In
February 2006, we received $90.6 million in gross proceeds from an underwritten
public offering of 8,050,000 shares of our common stock. After deducting the
underwriters’ commission and offering expenses, we received net proceeds of
approximately $84.8 million.
9.
SHARES USED IN COMPUTING NET LOSS PER SHARE
The
following table summarizes the number of shares (in thousands) of common stock
U.S. Concrete has used on a weighted-average basis in calculating basic and
diluted net loss per share:
|
|
Three
Months
Ended
March 31,
|
|
|
|
2007
|
|
2006
|
|
Basic
weighted average common shares outstanding
|
|
|
38,030
|
|
|
33,669
|
|
Effect
of dilutive stock options and awards
|
|
|
—
|
|
|
—
|
|
Diluted
weighted average common shares outstanding
|
|
|
38,030
|
|
|
33,669
|
|
For
the
three-month period ended March 31, stock options and awards covering 1.9 million
shares in 2007 and 3.1 million shares in 2006 were excluded from the computation
of the net loss per share because their effect would have been antidilutive.
10.
COMMITMENTS AND CONTINGENCIES
From
time
to time, and currently, we are subject to various claims and litigation brought
by employees, customers and other third parties for, among other matters,
personal injuries, property damages, product defects and delay damages that
have, or allegedly have, resulted from the conduct of our
operations.
U.S.
CONCRETE, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
Continued
We
believe that the resolution of all litigation currently pending or threatened
against us or any of our subsidiaries should not have a material adverse effect
on our consolidated financial condition, results of operations or liquidity;
however, because of the inherent uncertainty of litigation, we cannot provide
assurance that the resolution of any particular claim or proceeding to which
we
or any of our subsidiaries is a party will not have a material adverse effect
on
our consolidated results of operations or liquidity for the fiscal period in
which that resolution occurs. We expect in the future that we and our operating
subsidiaries will from time to time be a party to litigation or administrative
proceedings that arise in the normal course of our business.
We
are
subject to federal, state and local environmental laws and regulations
concerning, among other matters, air emissions and wastewater discharge. Our
management believes we are in substantial compliance with applicable
environmental laws and regulations. From time to time, we receive claims from
federal and state environmental regulatory agencies and entities asserting
that
we may be in violation of environmental laws and regulations. Based on
experience and the information currently available, our management believes
that
these claims should not have a material impact on our consolidated financial
condition, results of operations or liquidity. Despite compliance and
experience, it is possible that we could be held liable for future charges,
which might be material, but are not currently known to us or estimable by
us.
In addition, changes in federal or state laws, regulations or requirements,
or
discovery of currently unknown conditions, could require additional
expenditures.
As
permitted under Delaware law, we have agreements that provide indemnification
of
officers and directors for certain events or occurrences while the officer
or
director is or was serving at our request in such capacity. The maximum
potential amount of future payments that we could be required to make under
these indemnification agreements is not limited; however, we have a director
and
officer insurance policy that potentially limits our exposure and enables us
to
recover a portion of future amounts that may be paid. As a result of the
insurance policy coverage, we believe the estimated fair value of these
indemnification agreements is minimal. Accordingly, we have not recorded any
liabilities for these agreements as of March 31, 2007.
We
and
our subsidiaries are parties to agreements that require us to provide
indemnification in certain instances when we acquire businesses and real estate
and in the ordinary course of business with our customers, suppliers, lessors
and service providers.
Insurance
Programs
We
maintain third-party insurance coverages in amounts and against the risks we
believe are reasonable. Under certain components of our insurance program,
we
share the risk of loss with our insurance underwriters by maintaining high
deductibles subject to aggregate annual loss limitations. Generally, our
deductible retentions per occurrence for auto and general liability insurance
programs are $1.0 million for 2007 and $0.5 million for 2006, and our deductible
retentions per occurrence for our workers’ compensation insurance programs are
$1.0 million for 2007 and 2006, although certain of our operations are
self-insured for workers’ compensation. We fund these deductibles and record an
expense for expected losses under the programs. The expected losses are
determined using a combination of our historical loss experience and subjective
assessments of our future loss exposure. The estimated losses are subject to
uncertainty from various sources, including changes in claims reporting
patterns, claims settlement patterns, judicial decisions, legislation and
economic conditions. Although we believe that the estimated losses we have
recorded are reasonable, significant differences related to the items noted
above could materially affect our insurance obligations and future
expense.
In
March
2007, we settled a lawsuit with a third-party claims administrator responsible
for handling workers’ compensation claims related to 2002 and 2003. The
settlement relieves us of any future responsibility relating to certain workers’
compensation claims and requires the payment of $225,000 in cash to us by the
third party administrator. As a result, we recorded additional income of
approximately $1.4 million resulting from the reversal of accrued liabilities
relating to workers’ compensation claims associated with 2002 and 2003 and the
cash settlement amount. The additional income is reported in our financial
statements primarily as an offset to cost of sales in the quarter.
Performance
Bonds
In
the
normal course of business, we and our subsidiaries are contingently liable
for
performance under $14.1 million in performance bonds that various contractors,
states and municipalities have required. The bonds principally relate to
construction contracts, reclamation obligations and mining permits. We and
our
subsidiaries have indemnified the underwriting insurance company against any
exposure under the performance bonds. No material claims have been made against
these bonds.
U.S.
CONCRETE, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
Continued
11.
SEGMENT INFORMATION
Operating
segments are defined under the guidance of SFAS No. 131, “Disclosures about
Segments of an Enterprise and Related Information,” as components of an
enterprise that engage in business activities that earn revenue, incur expenses
and prepare financial information that is evaluated regularly by our chief
operating decision maker in order to allocate resources and assess performance.
We have six operating segments based upon our six geographic reporting units
that serve our principal markets in the United States and have historically
aggregated these operating segments into one reportable segment based upon
the
guidance in SFAS No. 131.
During
the third quarter of 2006, we re-assessed our application of SFAS No. 131 and
based on the expected variation in the long-term margins of our operating
segments, determined that it would be appropriate to present our previously
aggregated six geographic reporting units as two reportable segments primarily
along product lines: ready-mixed concrete and concrete-related products and
western precast concrete. We have revised our prior-period presentation to
correspond with the revision.
Our
ready-mixed concrete and concrete-related products segment produces and sells
ready-mixed concrete, aggregates (crushed stone, sand and gravel), concrete
masonry and building materials as well as a limited amount of precast concrete.
This segment serves the following principal markets: north and west Texas,
northern California, New Jersey, Delaware, Washington, D.C., Michigan, Tennessee
and Mississippi. Our western precast concrete segment produces and sells precast
concrete products in the western United States.
We
account for inter-segment sales at market prices. Segment operating profit
consists of net sales less operating expense, including certain operating
overhead directly related to the operation of the specific segment. Corporate
includes administrative, financial, legal, human resources and risk management,
activities which are not allocated to operations and are excluded from segment
operating profit.
The
following table sets forth certain financial information relating to our
operations by reportable segment (in thousands):
|
|
Three
Months Ended March 31,
|
|
|
|
2007
|
|
2006
|
|
Sales:
|
|
|
|
|
|
|
|
Ready-mixed
concrete and concrete-related
products
|
|
$
|
154,869
|
|
$
|
124,492
|
|
Western
precast concrete
|
|
|
17,815
|
|
|
15,709
|
|
Inter-segment
sales
|
|
|
(3,295
|
)
|
|
(607
|
)
|
Total
sales
|
|
$
|
169,389
|
|
$
|
139,594
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
Ready-mixed
concrete and concrete-related
products
|
|
$
|
(1,371
|
)
|
$
|
1,989
|
|
Western
precast concrete
|
|
|
1,359
|
|
|
1,694
|
|
Unallocated
overhead and other income
|
|
|
1,832
|
|
|
975
|
|
Corporate:
|
|
|
|
|
|
|
|
Selling,
general and administrative
expense
|
|
|
(4,530
|
)
|
|
(5,088
|
)
|
Interest
income
|
|
|
24
|
|
|
696
|
|
Interest
expense
|
|
|
(6,891
|
)
|
|
(4,632
|
)
|
Other
income, net
|
|
|
4
|
|
|
5
|
|
Loss
before income taxes
|
|
$
|
(9,573
|
)
|
$
|
(4,361
|
)
|
Depreciation,
Depletion and Amortization:
|
|
|
|
|
|
Ready-mixed
concrete and concrete-related
products
|
|
$
|
6,719
|
|
$
|
3,840
|
|
Western
precast concrete
|
|
|
404
|
|
|
220
|
|
Corporate
|
|
|
95
|
|
|
116
|
|
Total
depreciation, depletion and
amortization
|
|
$
|
7,218
|
|
$
|
4,176
|
|
|
|
|
|
|
|
|
|
U.S.
CONCRETE, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
Continued
|
|
Three
Months Ended March 31,
|
|
|
|
2007
|
|
2006
|
|
Capital
Expenditures:
|
|
|
|
|
|
|
|
Ready-mixed
concrete and concrete-related
products
|
|
$
|
6,876
|
|
$
|
4,656
|
|
Western
precast concrete
|
|
|
748
|
|
|
742
|
|
Total
capital expenditures
|
|
$
|
7,624
|
|
$
|
5,398
|
|
Sales
by Product:
|
|
|
|
|
|
Ready-mixed
concrete
|
|
$
|
136,996
|
|
$
|
114,286
|
|
Precast
concrete
|
|
|
18,542
|
|
|
16,210
|
|
Building
materials
|
|
|
4,882
|
|
|
5,002
|
|
Aggregates
|
|
|
4,807
|
|
|
2,382
|
|
Other
|
|
|
4,162
|
|
|
1,714
|
|
Total
sales
|
|
$
|
169,389
|
|
$
|
139,594
|
|
Identifiable
Assets:
|
|
March
31,
2007
|
|
December 31,
2006
|
|
Ready-mixed
concrete and concrete-related
products
|
|
$
|
587,978
|
|
$
|
598,328
|
|
Western
precast concrete
|
|
|
71,876
|
|
|
70,654
|
|
Corporate
|
|
|
50,282
|
|
|
47,664
|
|
Total
assets
|
|
$
|
710,136
|
|
$
|
716,646
|
|
12.
RECENT ACCOUNTING PRONOUNCEMENTS
In
September 2006, the FASB issued Statement of Financial Accounting Standards
No.
157, “Fair Value Measurements.” SFAS No. 157 clarifies
the principle that fair value should be based on the assumptions market
participants would use when pricing an asset or liability and establishes a
fair-value hierarchy that prioritizes the information used to develop those
assumptions. Under SFAS No. 157, fair-value measurements would be separately
disclosed by level within the fair-value hierarchy. SFAS No. 157 is effective
for fiscal years beginning after November 15, 2007. We do not believe the
adoption of SFAS No. 157 will have a material impact on our consolidated
financial position, results of operations or cash flows.
In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115.” SFAS No. 159 amends SFAS No. 115, “Accounting for Certain
Investments in Debt and Equity Securities.” This statement permits, but does not
require, entities to measure many financial instruments and certain other items
at fair value. Unrealized gains and losses on items for which the fair value
option has been elected should be recognized in earnings at each subsequent
reporting date. SFAS 159 is effective for financial statements issued for fiscal
years beginning after November 15, 2007 and interim periods within
those fiscal years, and cannot be adopted early unless SFAS No. 157, “Fair
Value Measurements,” is also adopted. We are currently evaluating the impact
adoption of SFAS No. 159 may have on our consolidated financial
statements.
13.
ACCOUNTING CHANGES
We
adopted FIN
48 on
January 1, 2007. FIN 48 establishes a single model to address accounting
for uncertain tax positions. FIN 48 clarifies the accounting for income taxes
by
prescribing a minimum recognition threshold a tax position is required to
meet
before being recognized in the financial statements. As a result of our
adoption of FIN 48, we recognized an adjustment of approximately $0.3
million to the beginning balance of retained earnings on the balance
sheet. At January 1, 2007, we had approximately $7.3
million of unrecognized tax benefits, of which approximately $2.2
million would reduce our effective tax rate if recognized.
We recognize
interest and penalties related to uncertain tax positions in income tax
expense. At January 1, 2007, we also had approximately $0.8
million accrued for interest and penalties.
U.S.
Concrete and its subsidiaries are subject to U.S. federal income tax as well
as
income tax of multiple state jurisdictions. We are open to examination
in U.S. federal jusrisdiction, and generally in state
jurisdictions, for tax years subsequent to 2001. During
2006, the U.S. government began an administrative review of
the our tax years ranging from 2002 through 2004. In
addition, one of our subsidiaries is currently under audit by New
Jersey for its tax years ranging from 2002 through 2005. We do not
anticipate that the balance of unrecognized tax benefits will significantly
change due to the settlement of audits and the expiration of statute of
limitations prior to March 30, 2008.
During
the quarter ended March 31, 2007, there have been no significant changes
to
these amounts.
See
Note
11 for changes in our accounting for Segments.
U.S.
CONCRETE, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
Continued
14.
SUBSEQUENT EVENT
In
April
2006, we formed a joint venture with the Edw. C. Levy Co. which will operate
in
Michigan. Under the contribution agreement, we contributed substantially
all of our ready-mixed concrete and concrete-related products assets in
Michigan to the joint venture in exchange for a 60% ownership interest, while
the Edw. C. Levy Co. contributed all of its Michigan ready-mixed concrete and
related concrete products assets for a 40% ownership interest. The joint
venture, which operates primarily under our trade name Superior Materials,
currently owns and operates 28 ready-mixed concrete plants, a 24,000-ton cement
terminal and approximately 300 ready-mixed concrete trucks. In addition, the
joint venture will not be a guarantor of our 8⅜% senior subordinated
notes.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Statements
we make in the following discussion which express a belief, expectation or
intention, as well as those that are not historical fact, are forward-looking
statements that are subject to risks, uncertainties and assumptions. Our actual
results, performance or achievements, or industry results, could differ
materially from those we express in the following discussion as a result of
a
variety of factors, including the risks and uncertainties we have referred
to
under the headings “Risk Factors” in Item 1A of Part I in the 2006 Form 10-K,
and “—Risks and Uncertainties” below. For a discussion of our other commitments,
related-party transactions, and our critical accounting policies, see
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in Item 7 in the 2006 Form 10-K. We assume no obligation to update
these forward-looking statements.
Our
Business
We
operate our business in two business segments: ready-mixed concrete and
concrete-related products and western precast concrete.
Ready-Mixed
Concrete and Concrete-Related Products. Our
ready-mixed concrete and concrete-related products segment is engaged primarily
in the production, sale and delivery of ready-mixed concrete to our customer’s
job sites. To a lesser extent, this segment is engaged in the mining and sale
of
aggregates; the production, sale and distribution of precast concrete and
concrete masonry; and the resale of building materials, primarily to our
ready-mixed concrete customers. We provide these products and services from
our
operations in north and west Texas, northern California, New Jersey, Washington,
D.C., Michigan, Tennessee, Oklahoma and Mississippi.
Western
Precast Concrete. Our
western precast concrete segment engages principally in the production,
distribution and sale of precast concrete products from its eight plants located
in northern California, southern California and Arizona. Of these facilities,
we
have two sites in Phoenix, two sites in San Diego and four sites in northern
California. From these facilities, we produce precast concrete structures such
as utility vaults, manholes and other wastewater management products, specialty
engineered structures, curb-inlets, catch basins, retaining and other wall
systems and other precast concrete products.
Our
Markets
The
markets for our products are generally local, and our operating results are
subject to fluctuations in the level and mix of construction activity that
occur
in our markets. The level of activity affects the demand for our products,
while
the product mix of activity among the various segments of the construction
industry affects both our relative competitive strengths and our operating
margins. Commercial and industrial projects generally provide more opportunities
to sell value-added products which are designed to meet the high-performance
requirements of these types of projects.
Our
customers are generally involved in the construction industry, which is a
cyclical business and is subject to general and more localized economic
conditions. In addition, our business is impacted by seasonal variations in
weather conditions which vary by regional markets. Accordingly, demand for
our
products and services during the winter months is typically lower than other
months of the year because of inclement weather. Also, sustained periods of
inclement weather and other weather conditions could postpone or delay projects
in our markets during other times of the year.
Through
the three months ended March 31, 2007, we continued to experience improved
pricing trends in most of our markets, while margins improved in our northern
California, Atlantic and Michigan markets as compared to 2006. Sustaining or
improving our margins in the future will depend on market conditions, including
potential continuation of the softening of the residential sector, and our
ability to increase our product pricing or realize gains in productivity to
offset further increases in raw materials and other costs.
For
the
first three months of 2007, demand for our ready-mixed concrete and
concrete-related products in our South Central markets and most of our markets
in northern California has remained steady. Despite strong competition in the
Dallas/Fort Worth Metroplex market area, our 2007 price increases are holding
and we have seen solid improvement in our pricing in the first quarter of 2007
as compared to the fourth quarter of 2006. Our California markets remain strong
with the exception of the continued slowdown in the residential market in
Sacramento, California.
During
the first quarter of 2007, our Atlantic region was adversely impacted by more
severe weather patterns than those experienced in 2006. This region is also
seeing the effects of a slowdown in the residential construction sector. Our
Michigan operations have continued to face downward pressure from the
general economic decline in the area brought about in part by the decline in
the
residential housing sector and the economic uncertainty resulting from factors
impacting the automotive industry, which makes up a significant component of
the
economic base in that market.
Demand
for our products in our western precast concrete segment has been strong, with
revenues improving 13% in the first quarter of 2007 as compared to the first
quarter of 2006. This improvement is reflective of the two acquisitions
completed in 2006 and improved pricing for our products.
Cement
and Other Raw Materials
Our
cost
of goods sold consists principally of the costs we incur in obtaining cement,
aggregates and admixtures we combine to produce ready-mixed concrete for
delivery to customers or use in our precast concrete operations. We obtain
most
of these materials from third parties and generally only have a few days’ supply
at each of our plants. These costs vary with our levels of production. Our
cost
of goods sold also includes labor costs, primarily for delivery and plant
personnel, insurance costs and the operating, maintenance and rental expenses
and fuel costs we incur in operating our plants, mixer trucks and other
vehicles.
In
the
first quarter of 2007, cement and aggregates prices continued to rise as a
result of strong domestic consumption. While we expect residential construction
to continue at lower levels going forward, we anticipate that commercial
construction and other building segments will comprise a
larger
component of domestic demand. As a result, we do not expect any significant
cement shortages in our markets and believe
the pace of cement price increases will moderate as a result of improved
availability of cement in our markets. The
price
and supply of aggregates are generally driven by local market supply and demand
characteristics. Today, in most of our markets, we believe there is an adequate
supply of aggregates.
Acquisitions
Since
our
inception in 1999, our growth strategy has contemplated acquisitions. The rate
and extent to which appropriate further acquisition opportunities are available,
and the extent to which acquired businesses are integrated and anticipated
synergies and cost savings are achieved, can affect our operations and
results.
During
2006, we completed six acquisitions. Four of these acquisitions were in our
ready-mixed concrete and concrete-related products segment and two were in
our
western precast segment. Each of these acquisitions is discussed briefly
below.
Ready-Mixed
Concrete and Concrete-Related Products Segment
Breckenridge
Ready-Mix Acquisition. In
November 2006, we acquired the operating assets of Breckenridge Ready-Mix,
Inc.
for $3.0 million in cash and effectively assumed approximately $0.4 million
in
interest-bearing debt. The assets include two ready-mix plants and a sand and
gravel quarry operation in Breckenridge, Texas.
Pinnacle
Materials Acquisition. In
October 2006, we acquired certain aggregates assets located in New Jersey from
Pinnacle Materials, Inc. for $12.5 million in cash. The assets consist of a
granite quarry and a natural sand pit.
Alberta
Investments/Alliance Haulers Acquisition.
In
July
2006, we acquired all of the outstanding equity interests in Alberta Investments
and Alliance Haulers for $165 million, subject to specified adjustments. Alberta
Investments conducts the substantial majority of its business through two
subsidiaries: Redi-Mix, L.P. and Ingram Enterprises, L.P. Redi-Mix operates
13
ready-mixed concrete plants in the Dallas/Fort Worth Metroplex and in areas
north of the Metroplex. Ingram Enterprises operates 17 ready-mixed concrete
plants and three sand and gravel plants in west Texas. Alliance Haulers provides
cement and aggregates hauling services with a fleet of approximately 260 hauling
trucks in the markets covered by Redi-Mix and Ingram.
Kurtz
Acquisition. In
April
2006, we acquired Kurtz Gravel Company, which produces ready-mixed concrete
from
six plants and mines aggregates from a quarry, all located in or near our
existing metropolitan Detroit market area, for approximately $13.0 million
in
cash. We also assumed certain capital lease liabilities with a net present
value
of $1.5 million.
Western
Precast Concrete Segment
Olson
Precast Acquisition.
In June
2006, we acquired the operating assets, including real property, of Olson
Precast Company used in the production of precast concrete products in northern
California for approximately $4.8 million in cash.
Pre-Cast
Mfg. Acquisition.
In April
2006, we acquired the operating assets of Pre-Cast Mfg., Inc. in our existing
Phoenix market area for approximately $5.0 million in cash. Pre-Cast Mfg.
produces pre-cast concrete products.
Risks
and Uncertainties
Numerous
factors could affect our future operating results, including the factors
discussed under the heading “Risk Factors” in Item 1A of Part I of the 2006 Form
10-K and:
Internal
Computer Network and Applications. We
rely
on our network infrastructure, enterprise applications and internal technology
systems for our operational, support and sales activities. The hardware and
software systems related to such activities are subject to damage from
earthquakes, floods, fires, power loss, telecommunication failures and other
similar events. They are also subject to computer viruses, physical or
electronic vandalism or other similar disruptions that could cause system
interruptions, delays and loss of critical data and could prevent us from
fulfilling our customers’ orders. We have developed disaster recovery plans and
backup systems to reduce the potentially adverse effects of such events. Any
event that causes failures or interruption in our hardware or software systems
could result in disruption in our business operations, loss of revenues or
damage to our reputation.
Accounting
Rules and Regulations. We
prepare our consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America (“GAAP”). A change
in these policies can have a significant effect on our reported results and
may
even retroactively affect previously reported transactions. Our accounting
policies that recently have been or may be affected by changes in the accounting
rules are as follows:
•
accounting for share-based payments;
•
accounting for income taxes; and
•
accounting for stripping costs.
Tax
Liabilities.
We are
subject to federal, state and local income taxes, applicable to corporations
generally, as well as non-income-based taxes. Significant judgment is required
in determining our provision for income taxes and other tax liabilities. In
the
ordinary course of business, we make calculations for which the ultimate tax
determination is uncertain. We are also from time to time under audit by state
and local tax authorities. Although we can provide no assurance that the final
determination of our tax liabilities will not differ from what our historical
income tax provisions and accruals reflect, we believe our tax estimates are
reasonable.
Critical
Accounting Policies
We
have
outlined our critical accounting policies in Item 7 of Part II of the 2006
Form
10-K. Our critical accounting policies involve the use of estimates in the
recording of allowance for doubtful accounts, realization of goodwill, accruals
for self-insurance, accruals for income taxes and the valuation and useful
lives
of property, plant and equipment. During the three months ended March 31, 2007,
we made no changes in the application of our critical accounting policies
presented in the 2006 Form 10-K. See Note 1 to our consolidated financial
statements included in Item 8 of Part II of the 2006 Form 10-K for a discussion
of these accounting policies. See Notes 12 and 13 to the condensed consolidated
financial statements in Part I of this report for a discussion of recent
accounting pronouncements and accounting changes.
Results
of Operations
The
following table sets forth selected historical statements of operations
information (in thousands, except for selling prices) and that information
as a
percentage of sales for the periods indicated.
|
|
Three
Months Ended March 31,
|
|
|
|
2007
|
|
2006
|
|
|
|
(unaudited)
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
Ready-mixed
concrete and concrete-related
products
|
|
$
|
154,869
|
|
|
91.4
|
%
|
$
|
124,492
|
|
|
89.2
|
%
|
Western
precast concrete
|
|
|
17,815
|
|
|
10.5
|
|
|
15,709
|
|
|
11.3
|
|
Inter-segment
sales
|
|
|
(3,295
|
)
|
|
(1.9
|
)
|
|
(607
|
)
|
|
(0.5
|
)
|
Total
sales
|
|
$
|
169,389
|
|
|
100.0
|
%
|
$
|
139,594
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of goods sold before depreciation, depletion and
amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ready-mixed
concrete and concrete-related
products
|
|
$
|
134,072
|
|
|
79.2
|
%
|
$
|
109,066
|
|
|
78.1
|
%
|
Western
precast concrete
|
|
|
13,548
|
|
|
8.0
|
|
|
11,730
|
|
|
8.4
|
|
Selling,
general and administrative
expenses
|
|
|
17,740
|
|
|
10.5
|
|
|
15,434
|
|
|
11.1
|
|
Depreciation,
depletion and amortization
|
|
|
7,218
|
|
|
4.2
|
|
|
4,176
|
|
|
3.0
|
|
Loss
from operations
|
|
|
(3,189
|
)
|
|
(1.9
|
)
|
|
(812
|
)
|
|
(0.6
|
)
|
Interest
income
|
|
|
24
|
|
|
0.0
|
|
|
696
|
|
|
0.5
|
|
Interest
expense
|
|
|
6,891
|
|
|
4.1
|
|
|
4,632
|
|
|
3.3
|
|
Other
income, net
|
|
|
483
|
|
|
0.3
|
|
|
387
|
|
|
0.3
|
|
Loss before income
taxes
|
|
|
(9,573
|
)
|
|
(5.7
|
)
|
|
(4,361
|
)
|
|
(3.1
|
)
|
Income
tax benefit
|
|
|
(3,844
|
)
|
|
(2.3
|
)
|
|
(1,660
|
)
|
|
(1.2
|
)
|
Net
loss
|
|
$
|
(5,729
|
)
|
|
(3.4
|
)%
|
$
|
(2,701
|
)
|
|
(1.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ready-mixed
Concrete Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
selling price per cubic yard
|
|
$
|
90.50
|
|
|
|
|
$
|
89.83
|
|
|
|
|
Sales
volume in cubic yards
|
|
|
1,514
|
|
|
|
|
|
1,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Precast
Concrete Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
selling price per cubic yard of concrete used in
production
|
|
$
|
634.65
|
|
|
|
|
$
|
640.02
|
|
|
|
|
Ready-mixed
concrete used in production in cubic
yards
|
|
|
28
|
|
|
|
|
|
25
|
|
|
|
|
Sales.
Ready-mixed
concrete and concrete-related products. Sales
of
ready-mix concrete and concrete-related products increased $30.4 million, or
24.4%, for the three months ended March 31, 2007, as compared to the
corresponding period in 2006. This increase was primarily attributable to an
18.9% increase in ready-mixed concrete sales volume and a 0.8% increase in
the
average sales price of ready-mixed concrete in the quarter ended March 31,
2007,
as compared to the corresponding period in 2006. The increase in ready-mixed
concrete sales volume was primarily attributable to the Alberta
Investments/Alliance Haulers acquisition and the Kurtz acquisition, both of
which we completed after the end of the first quarter of 2006. The slight
increase in the average sales price of ready-mixed concrete reflects higher
ready-mixed concrete selling prices in all of our markets, mostly offset by
the
shift in the geographic mix of our volumes, primarily related to the 2006
acquisitions in the Dallas/Fort Worth market.
Western
precast concrete.
Sales in
our western precast concrete segment increased $2.1 million, or 13.4%, for
the
three months ended March 31, 2007, as compared to the corresponding period
in
2006. This increase was primarily attributable to the two acquisitions we
completed in this segment during the second quarter of 2006.
Cost
of goods sold before depreciation, depletion and
amortization.
Ready-mixed
concrete and concrete-related products. Cost
of
goods sold before depreciation, depletion and amortization for our ready-mixed
concrete and concrete-related products segment increased $25.0 million, or
22.9%, for the three months ended March 31, 2007, as compared to the
corresponding period in 2006. This increase was primarily attributable to an
18.9% increase in ready-mixed concrete sales volumes and higher materials costs
(primarily cement and aggregates) in the first quarter of 2007 as compared
to
the first quarter of 2006.
Western
precast concrete. Cost
of
goods sold before depreciation, depletion and amortization for our western
precast segment increased $1.8 million, or 15.5%, for the three months ended
March 31, 2007, as compared to the corresponding period in 2006. Cost of goods
sold before depreciation, depletion and amortization as a percentage of sales
for the three months ended March 31, 2007, increased as compared to the
corresponding period in 2006, primarily as a result of increased sales volumes
of precast products resulting from the two acquisitions we made in the second
quarter of 2006.
Selling,
general and administrative expenses.
Selling,
general and administrative expenses increased $2.3 million, or 14.9%, for the
three months ended March 31, 2007, as compared to the corresponding period
in
2006. The increase was primarily attributable to higher selling costs and higher
administrative compensation expenses, including additional personnel costs
related to acquired businesses.
Depreciation,
depletion and amortization.
Depreciation, depletion and amortization expense increased $3.0 million, or
72.8%, for the three months ended March 31, 2007 as compared to the
corresponding period in 2006. The increase was primarily attributable to
additional depreciation, depletion and amortization expense related to assets
acquired in connection with our recent business acquisitions.
Interest
expense.
Interest
expense increased $2.3 million for the three months ended March 31, 2007, as
compared to the corresponding period in 2006. The increase was primarily
attributable to the additional borrowings and assumption of certain indebtedness
related to our acquisitions in 2006.
Income
tax benefit.
We
recorded an income tax benefit of $3.8 million for the three months ended March
31, 2007, as compared to $1.7 million for the corresponding period in 2006.
The
increase in the income tax benefit resulted from an increased net loss, as
compared to the corresponding period in 2006. At
the
end of each interim reporting period, we estimate the effective income tax
rate
expected to be applicable for the full year. We use this estimate in providing
for income taxes on a year-to-date basis, and it may change in subsequent
interim periods. Our
estimated annualized effective tax rate was 40% and 38% for the three months
ended March 31, 2007 and 2006, respectively.
The
effective income tax rate for the 2007 and 2006 period is higher than the
federal statutory rate, due primarily to state income taxes.
Liquidity
and Capital Resources
Our
primary short-term liquidity needs consist of financing seasonal increases
in
working capital requirements, purchasing properties and equipment and paying
cash interest expense under our 8⅜% senior subordinated notes due in April 2014
and cash interest expense on borrowings under our senior secured revolving
credit facility due in March 2011. In addition to cash and cash equivalents
of
$9.5 million at March 31, 2007 and cash from operations, our senior secured
revolving credit facility provides us with a significant source of liquidity.
That facility provides us a borrowing capacity of up to $150 million. The Credit
Agreement relating to this facility provides that the administrative agent
may,
on the bases specified, reduce the amount of available credit from time to
time.
At March 31, 2007, $19.2 million was outstanding under the revolving credit
facility, and the amount of available credit was approximately $85.5 million,
net of outstanding letters of credit of $14.3 million. Our working capital
needs
are typically at their lowest level in the first quarter and sharply increase
in
the second and third quarters to fund the increases in working capital
requirements during those periods and the cash interest payment on our senior
subordinated notes on April 1 and October 1 of each year.
The
principal factors that could adversely affect the amount and availability of
our
internally generated funds include:
|
• |
any
deterioration of sales, because of weakness in markets in which we
operate;
|
• |
any
decline in gross margins due to shifts in our project mix or increases
in
the cost of our raw materials; and
|
|
• |
the
extent to which we are unable to generate internal growth through
integration of additional businesses or capital expansions of our
existing
business.
|
The
principal factors that could adversely affect our ability to obtain cash from
external sources include:
• covenants
contained in the Credit Agreement and the indenture governing our 8⅜% senior
subordinated notes;
• volatility
in the markets for corporate debt; and
• fluctuations
in the market price of our common stock or 8⅜%
senior
subordinated notes.
The
following key financial measurements reflect our financial position and capital
resources as of March 31, 2007 and December 31, 2006 (dollars in
thousands):
|
|
March
31,
2007
|
|
December
31,
2006
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
9,501
|
|
$
|
8,804
|
|
Working
capital
|
|
|
73,558
|
|
|
64,687
|
|
Total
debt
|
|
|
312,523
|
|
|
303,292
|
|
Debt
to debt and equity
|
|
|
54.1
|
%
|
|
52.9
|
%
|
Our
cash
and cash equivalents consist of highly liquid investments in deposits we hold
at
major banks.
Senior
Secured Credit Facility
On
June
30, 2006, we entered into the Credit Agreement, which amended and restated
our
senior secured credit agreement dated as of March 12, 2004.
The
Credit Agreement, as amended to date, provides us with a $150 million revolving
credit facility, with borrowings limited based on a portion of the net amounts
of eligible accounts receivable, inventory and mixer trucks. The facility
matures in March 2011. At March 31, 2007, new borrowings under the
facility would have borne annual interest at the Eurodollar-based rate (“LIBOR”)
plus 1.75% or the domestic rate plus 0.25%. The outstanding borrowings under
the
facility as of March 31, 2007 were bearing interest at the rate of 7.4% per
annum, based on our election to borrow at the LIBOR rate plus the applicable
margin. The interest rate margins will vary inversely with the amount of unused
borrowing capacity available under the facility. Commitment fees at an
annual rate of 0.25% are payable on the unused portion of the facility.
Our
subsidiaries have guaranteed the repayment of all amounts owing under the senior
secured credit facility. In addition, we collateralized the facility with the
capital stock of our subsidiaries, excluding minor subsidiaries without
operations or material assets, and substantially all the assets of those
subsidiaries, excluding most of the assets of the aggregates quarry in northern
New Jersey and other real estate owned by us or our subsidiaries. The Credit
Agreement contains covenants restricting, among other things, prepayment or
redemption of subordinated notes, distributions, dividends and repurchases
of
capital stock and other equity interests, acquisitions and investments, mergers,
asset sales other than in the ordinary course of business, indebtedness, liens,
changes in business, changes to charter documents and affiliate transactions.
It
also limits capital expenditures (excluding permitted acquisitions) to $45
million for 2006 and the greater of $45 million or 5% of consolidated revenues
in the prior 12 months after 2006 and will require us to maintain a minimum
fixed-charge coverage ratio of 1.0 to 1.0 on a rolling 12-month basis if the
available credit under the facility falls below $25 million. The Credit
Agreement provides that specified change of control events would constitute
events of default.
The
Credit Agreement provides that the administrative agent may, on the bases
specified, reduce the amount of the available credit from time to time. At
March
31, 2007, there was $19.2 million outstanding under the credit facility and
the
amount of the available credit was approximately $85.5 million, net of
outstanding letters of credit of $14.3 million.
Senior
Subordinated Notes
On
March
31, 2004, we issued $200 million of 8⅜% senior subordinated notes due April 1,
2014. Interest on these notes is payable semi-annually
on April 1 and October 1 of each year. We
used the
net proceeds of this financing to redeem our prior 12% senior subordinated
notes
and prepay the outstanding debt under our credit facility. In July 2006, we
issued $85 million of additional 8⅜% senior subordinated notes due April 1, 2014
to a fund a portion of the purchase price for the acquisition of Alberta
Investments and Alliance Haulers.
All
of
our subsidiaries, excluding minor subsidiaries, have jointly and severally
and
fully and unconditionally guaranteed the repayment of the 8⅜%
senior
subordinated notes.
The
indenture governing the notes limits our ability and the ability of our
subsidiaries to pay dividends or repurchase common stock, make certain
investments, incur additional debt or sell preferred stock, create liens, merge
or transfer assets. After March 31, 2009, we may redeem all or a part of the
notes at a redemption price of 104.188% in 2009, 102.792% in 2010, 101.396%
in
2011 and 100% in 2012 and thereafter. The indenture requires us to offer to
repurchase (1) an aggregate principal amount of the subordinated notes equal
to
the proceeds of certain asset sales that are not reinvested in the business
or
used to pay senior debt and (2) all the notes following the occurrence of a
change of control. Our senior secured credit agreement prohibits these
repurchases.
As
a
result of restrictions contained in the indenture relating to the 8⅜% senior
subordinated notes, our ability to incur additional debt is primarily limited
to
the greater of (1) borrowings available under our senior secured credit
facility, plus the greater of $15 million or 7.5% of our tangible assets, or
(2)
additional debt if, after giving effect to the incurrence of such additional
debt, our earnings before interest, taxes, depreciation, amortization and
certain noncash items equal or exceed two times our total interest
expense.
Cash
Flow
Our
net
cash provided by (used in) operating activities generally reflects the cash
effects of transactions and other events used in the determination of net income
or loss. Net cash used in operating activities of $1.0 million in the three
months ended March 31, 2007 decreased $1.6 million from the net cash provided
by
operating activities in the three months ended March 31, 2006. This decrease
was
principally a result of higher working capital requirements and cash income
tax
payments.
Our
net
cash used in investing activities of $7.5 million increased $3.6 million for
the
three months ended March 31, 2007, as compared to the three months ended March
31, 2006, primarily because of increased purchases of property and equipment
as
a result of the acquisitions we completed in 2006.
Our
net
cash provided by financing activities of $9.2 million for the three months
ended
March 31, 2007 decreased $79.6 million from the net cash provided by financing
activities for the three months ended March 31, 2006. This decrease was
attributable to our February 2006 common stock issuance, partially offset by
our
increased borrowings under our revolving credit facility as of March 31,
2007.
We
define free cash flow as net cash provided by operating activities less
purchases of property, plant and equipment (net of disposals). Free cash flow
is
a performance measure not prepared in accordance with generally accepted
accounting principles (“GAAP”). Our management uses free cash flow in managing
our business because we consider it to be an important indicator of our ability
to service our debt and generate cash for acquisitions and other strategic
investments. We believe free cash flow may provide users of our financial
information additional meaningful comparisons between current results and
results in prior operating periods. As a non-GAAP financial measure, free cash
flow 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.
Our
net
cash provided by (used in) operations and free cash flow is as follows (in
thousands):
|
|
Three
Months Ended March 31,
|
|
|
|
2007
|
|
2006
|
|
|
|
|
|
Net
cash provided by (used in)
operations
|
|
$
|
(972
|
)
|
$
|
645
|
|
Less:
Purchases of property and equipment (net of
disposals)
|
|
|
(7,374
|
)
|
|
(4,342
|
)
|
Free
cash flow (as defined)
|
|
$
|
(8,346
|
)
|
$
|
(3,697
|
)
|
Future
Capital Requirements
For
the
last nine months of 2007, our capital requirements are expected to be in the
range of $32.0 million to $37.0 million of planned capital expenditures, most
of
which we expect to be related to the purchase of mixer drums, loaders, routine
plant improvements, plant relocations and other rolling stock. In addition,
in the normal course of business, we lease certain equipment used in our
operations under operating leases.
We
believe, on the basis of current expectations, that our cash on hand, internally
generated cash flow and available borrowings under our revolving credit facility
will be sufficient to provide the liquidity necessary to fund our operations
and
meet our capital and debt service requirements for at least the next 12
months.
Off-Balance
Sheet Arrangements
We
do not
currently have any off-balance sheet arrangements. From time to time, we may
enter into noncancellable operating leases that would not be reflected on our
balance sheet.
Commitments
The
following are our contractual commitments associated with our indebtedness
and
lease obligations as of March 31, 2007 (in millions):
Contractual
obligations
|
|
Total
|
|
Less
Than
1
year
|
|
1-3
years
|
|
4-5
years
|
|
After
5
years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
on debt
|
|
$
|
311.1
|
|
$
|
2.8
|
|
$
|
4.7
|
|
$
|
0.8
|
|
$
|
302.8
|
|
Interest
on debt (1)
|
|
|
179.8
|
|
|
24.2
|
|
|
48.1
|
|
|
47.8
|
|
|
59.7
|
|
Capital
leases
|
|
|
1.4
|
|
|
0.8
|
|
|
0.5
|
|
|
0.1
|
|
|
—
|
|
Operating
leases
|
|
|
43.3
|
|
|
8.7
|
|
|
18.2
|
|
|
8.1
|
|
|
8.3
|
|
Total
|
|
$
|
535.6
|
|
$
|
36.5
|
|
$
|
71.5
|
|
$
|
56.8
|
|
$
|
370.8
|
|
(1) Interest
payments due under our 8 ⅜%
senior
subordinated notes, notes payable and capital leases.
The
following are our commercial commitment expirations as of March 31, 2007 (in
millions):
Other
commercial commitments
|
|
Total
|
|
Less
Than
1
year
|
|
1-3
years
|
|
4-5
years
|
|
After
5
years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Standby
letters of credit
|
|
$
|
14.3
|
|
$
|
14.3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Purchase
obligations
|
|
|
4.5
|
|
|
4.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Performance
bonds
|
|
|
14.1
|
|
|
14.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
$
|
32.9
|
|
$
|
32.9
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Other
We
periodically evaluate our liquidity requirements, alternative uses of capital,
capital needs and availability of resources in view of, among other things,
our
dividend policy, our debt service and capital expenditure requirements and
estimated future operating cash flows. As a result of this process, in the
past
we have sought, and in the future we may seek, to: reduce, refinance, repurchase
or restructure indebtedness; raise additional capital; issue additional
securities; repurchase shares of our common stock; modify our dividend policy;
restructure ownership interests; sell interests in subsidiaries or other assets;
or take a combination of such steps or other steps to manage our liquidity
and
capital resources. In the normal course of our business, we may review
opportunities for the acquisition, divestiture, joint venture or other business
combinations in the ready-mixed concrete or related businesses. In the event
of
any acquisition or joint venture transaction, we may consider using available
cash, issuing equity securities or increasing our indebtedness to the extent
permitted by the agreements governing our existing debt. See Note 6 to the
condensed consolidated financial statements in Part I of this
report.
Inflation
As
a
result of the relatively low levels of inflation in recent years, inflation
did
not significantly affect our results of operations in 2006 or in the first
three
months of 2007. However, cement prices and certain other raw material prices,
including aggregates and diesel fuel prices, have generally risen faster than
regional inflationary rates. The impact of these price increases has been
partially mitigated by price increases in our products, which were generally
higher than regional inflationary rates.
We
do not
enter into derivatives or other financial instruments for trading or speculative
purposes, but we may utilize them to manage our fixed to variable-rate debt
ratio. All derivatives, whether designated as hedging relationships or not,
are
required to be recorded on the balance sheet at fair value. Because of the
short
duration of our investments, changes in market interest rates would not have
a
significant impact on their fair values. At March 31, 2007 and 2006, we were
not
a party to any derivative financial instruments.
The
indebtedness evidenced by our 8⅜% senior subordinated notes is fixed-rate debt,
so we are not exposed to cash-flow risk from market interest rate changes on
these notes. The fair value of that debt will vary as interest rates change.
Borrowings
under our revolving credit facility expose us to certain market risks. Interest
on amounts drawn under the credit facility varies based on either the prime
rate
or one-, two-, three- or six-month LIBOR rates. Based on the $19.2 million
outstanding balance as of March 31, 2007, a one-percent change in the applicable
rate would not materially change the amount of interest expense for
2007.
We
purchase commodities, such as cement, aggregates and diesel fuel, at market
prices and do not currently use financial instruments to hedge commodity
prices.
Our
operations are subject to factors affecting the level of general construction
activity, including the level of interest rates and availability of funds for
construction. A significant decrease in the level of general construction
activity in any of our market areas may have a material adverse effect on our
sales and earnings.
In
August
2005, the compensation committee of our board of directors awarded approximately
163,000 share price performance units which vest in four equal annual
installments beginning in May 2006. Each share price performance unit is equal
in value to one share of our common stock. Upon vesting, a holder of share
price
performance units will receive a cash payment from us equal to the number of
vested share price performance units multiplied by the closing price of a share
of our common stock on the vesting date. A change of one dollar in the price
of
our common stock would cause a pretax change in selling, general and
administrative expense of approximately one dollar for each share price
performance unit outstanding. At March 31, 2007, there were 118,000 share price
performance units outstanding.
Item
4. Controls and Procedures
In
accordance with Rules 13a-15 and 15d-15 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), we carried out an evaluation, under the
supervision and with the participation of management, including our chief
executive officer and chief financial officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of March 31, 2007. Based on that evaluation, our
chief executive officer and chief financial officer concluded that our
disclosure controls and procedures were effective as of March 31, 2007 to
provide reasonable assurance that information required to be disclosed in our
reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed
by
an issuer in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the issuer’s management, including its principal
executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure. During the three months ended March 31, 2007, there were no changes
in our internal control over financial reporting or in other factors that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings
For
information about litigation involving us, see Note 10 to the condensed
consolidated financial statements in Part I of this report, which we incorporate
by reference into this Item 1.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
In
the first quarter of 2007, we purchased 20,013 shares of restricted stock from
employees who elected to have us make their required tax payments upon vesting
of certain restricted shares by withholding a number of those vested shares
having an aggregate value on the date of vesting equal to their tax obligations.
The
following table provides information regarding those repurchases:
Period
|
|
Total
Number of
Shares
Purchased
|
|
Average
Price Paid
Per
Share
|
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
|
Maximum
Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased
Under the Plans or Programs
|
January
1 - 31
|
|
—
|
|
N/A
|
|
None
|
|
N/A
|
February
1 - 28
|
|
—
|
|
N/A
|
|
None
|
|
N/A
|
March
1 - 31
|
|
20,013
|
|
8.74
|
|
None
|
|
N/A
|
Total
|
|
20,013
|
|
8.74
|
|
None
|
|
N/A
|
Exhibit
Number
|
Description
|
2.1*
|
—Stock
Purchase Agreement dated June 27, 2006, among U.S. Concrete, Inc.,
Alliance Haulers, Inc., Alberta Investments, Inc., Atlas Concrete
Inc. and
Wild Rose Holding, Ltd. (Form 8-K filed on June 28, 2006 (File No.
000-26025), Exhibit 2.1).
|
3.1*
|
—Restated
Certificate of Incorporation of U.S. Concrete, Inc. (Form 8-K filed
on May
9, 2006 (File No. 000-26025), Exhibit 3.1).
|
3.2*
|
—Amended
and Restated Bylaws of U.S. Concrete, Inc., as amended (Post Effective
Amendment No. 1 to Form S-3 (Reg. No. 333-42860), Exhibit
4.2).
|
3.3*
|
—Restated
Certificate of Designation of Junior Participating Preferred Stock
(Form
10-Q for the quarter ended June 30, 2000 (File No. 000-26025), Exhibit
3.3).
|
4.1
|
—Amendment
No. 1 to Amended and Restated Credit Agreement, effective as of March
2,
2007, among U.S. Concrete, Inc., Citicorp North America, Inc., Bank
of
America, N.A., JP Morgan Chase Bank and the Lenders and Issuers named
therein.
|
4.2
|
—Credit
Agreement, dated as of April 6, 2007, by and between Superior Materials,
LLC, BWB, LLC and Comerica Bank.
|
10.1*
|
—Consulting
Agreement, dated as of February 23, 2007 by and between U.S. Concrete,
Inc., and Eugene P. Martineau (Form 8-K filed on March 1, 2007 (File
No.
000-26025), Exhibit 10.1).
|
10.2*
|
—Contribution
Agreement, dated as of March 26, 2007, by and among, BWB, Inc. of
Michigan
Builders’, Redi-Mix, LLC, Kurtz Gravel Company, Superior Materials, Inc.
USC Michigan, Inc., Edw. C. Levy Co. and Superior Joint Venture LLC
(Form
8-K filed on March 30, 2007 (File No. 000-26025), Exhibit
10.1).
|
10.3*
|
—Operating
Agreement of Superior Materials, LLC dated effective as of April
1, 2007,
by and between Kurtz Gravel Company, Superior Materials, Inc. and
Edw. C.
Levy Co., together with related Joinder Agreement dated effective
April 2,
2007 by BWB, Inc. of Michigan Builders’, Redi-Mix, LLC, USC Michigan, Inc.
and Superior Material Holdings LLC (Form 8-K filed on April 5, 2007
(File
No. 000-26025), Exhibit 10.1).
|
10.4*
|
—Guaranty
dated as of April 1, 2007 by U.S. Concrete, Inc. in favor of Edw.
C. Levy
Co. and Superior Materials Holdings, LLC (Form 8-K filed on April
5, 2007
(File No. 000-26025), Exhibit 10.2).
|
31.1
|
—Rule
13a-14(a)/15d-14(a) Certification of Eugene P.
Martineau.
|
31.2
|
—Rule
13a-14(a)/15d-14(a) Certification of Robert D. Hardy.
|
32.1
|
—Section
1350 Certification of Eugene P. Martineau.
|
32.2
|
—Section
1350 Certification of Robert D.
Hardy.
|
*
Incorporated by reference to the filing indicated.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
|
|
|
U.S.
CONCRETE, INC. |
|
|
|
Date:
May 10, 2007 |
By: |
/s/ Robert
D.
Hardy |
|
Robert
D. Hardy |
|
Senior
Vice President and Chief Financial Officer
(Principal
Financial and Accounting Officer)
|
Exhibit
Number
|
Description
|
2.1*
|
—Stock
Purchase Agreement dated June 27, 2006, among U.S. Concrete, Inc.,
Alliance Haulers, Inc., Alberta Investments, Inc., Atlas Concrete
Inc. and
Wild Rose Holding, Ltd. (Form 8-K filed on June 28, 2006 (File No.
000-26025), Exhibit 2.1).
|
3.1*
|
—Restated
Certificate of Incorporation of U.S. Concrete, Inc. (Form 8-K filed
on May
9, 2006 (File No. 000-26025), Exhibit 3.1).
|
3.2*
|
—Amended
and Restated Bylaws of U.S. Concrete, Inc., as amended (Post Effective
Amendment No. 1 to Form S-3 (Reg. No. 333-42860), Exhibit
4.2).
|
3.3*
|
—Restated
Certificate of Designation of Junior Participating Preferred Stock
(Form
10-Q for the quarter ended June 30, 2000 (File No. 000-26025), Exhibit
3.3).
|
4.1
|
—Amendment
No. 1 to Amended and Restated Credit Agreement, effective as of March
2,
2007, among U.S. Concrete, Inc., Citicorp North America, Inc., Bank
of
America, N.A., JP Morgan Chase Bank and the Lenders and Issuers named
therein.
|
4.2
|
—Credit
Agreement, dated as of April 6, 2007, by and between Superior Materials,
LLC, BWB, LLC and Comerica Bank.
|
10.1*
|
—Consulting
Agreement, dated as of February 23, 2007 by and between U.S. Concrete,
Inc., and Eugene P. Martineau (Form 8-K filed on March 1, 2007 (File
No.
000-26025), Exhibit 10.1).
|
10.2*
|
—Contribution
Agreement, dated as of March 26, 2007, by and among, BWB, Inc. of
Michigan
Builders’, Redi-Mix, LLC, Kurtz Gravel Company, Superior Materials, Inc.
USC Michigan, Inc., Edw. C. Levy Co. and Superior Joint Venture LLC
(Form
8-K filed on March 30, 2007 (File No. 000-26025), Exhibit
10.1).
|
10.3*
|
—Operating
Agreement of Superior Materials, LLC dated effective as of April
1, 2007,
by and between Kurtz Gravel Company, Superior Materials, Inc. and
Edw. C.
Levy Co., together with related Joinder Agreement dated effective
April 2,
2007 by BWB, Inc. of Michigan Builders’, Redi-Mix, LLC, USC Michigan, Inc.
and Superior Material Holdings LLC (Form 8-K filed on April 5, 2007
(File
No. 000-26025), Exhibit 10.1).
|
10.4*
|
—Guaranty
dated as of April 1, 2007 by U.S. Concrete, Inc. in favor of Edw.
C. Levy
Co. and Superior Materials Holdings, LLC (Form 8-K filed on April
5, 2007
(File No. 000-26025), Exhibit 10.2).
|
31.1
|
—Rule
13a-14(a)/15d-14(a) Certification of Eugene P.
Martineau.
|
31.2
|
—Rule
13a-14(a)/15d-14(a) Certification of Robert D. Hardy.
|
32.1
|
—Section
1350 Certification of Eugene P. Martineau.
|
32.2
|
—Section
1350 Certification of Robert D.
Hardy.
|
*Incorporated
by reference to the filing indicated.