<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
---------
(MARK ONE)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
for the quarterly period ended September 30, 2000 or
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
for the transition period from ___________________ to ____________________
Commission file number 000-26025
U.S. CONCRETE, INC.
(exact name of registrant as specified in its charter)
Delaware 76-0586680
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1300 Post Oak Blvd., Suite 1220, Houston, Texas 77056
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (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 X No _______
-------
U.S. Concrete, Inc. had 22,349,599 shares of its Common Stock, par value $.001
per share, outstanding at November 14, 2000.
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U.S. CONCRETE, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I - Financial Information
Item 1. Financial Statements
U.S. CONCRETE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets............................................ 1
Condensed Consolidated Statements of Operations.................................. 2
Condensed Consolidated Statements of Cash Flows.................................. 3
Notes to Condensed Consolidated Financial Statements............................. 4
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations...................................................................... 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk.................. 9
Part II - Other Information
Item 2. Changes in Securities and Use of Proceeds................................... 10
Item 6. Exhibits and Reports on Form 8-K............................................ 10
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
-------------------- -------------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,542 $ 627
Trade accounts receivable, net 74,912 44,085
Other receivables 1,813 1,496
Inventories 9,144 4,351
Prepaid expenses and other current assets 1,210 1,758
---------------- ---------------
Total current assets 89,621 52,317
---------------- ---------------
Property, plant and equipment, net 83,383 53,949
Goodwill, net 189,370 105,492
Other assets 2,459 976
---------------- ---------------
Total assets $364,833 $212,734
================ ===============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 129 $ 140
Accounts payable and accrued liabilities 56,263 37,599
---------------- ---------------
Total current liabilities 56,392 37,739
---------------- ---------------
Long-term debt, net of current maturities 150,562 57,235
Deferred income taxes 9,986 6,967
---------------- ---------------
Total liabilities 216,940 101,941
---------------- ---------------
Stockholders' equity
Common stock 22 19
Additional paid-in capital 126,463 104,271
Retained earnings 21,408 6,503
---------------- ---------------
Total stockholders' equity 147,893 110,793
---------------- ---------------
Total liabilities and stockholders' equity $364,833 $212,734
================ ===============
The accompanying notes are an integral part of these condensed consolidated
financial statements.
1
</TABLE>
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts; unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
----------------------------------------- -------------------------------------
2000 1999 2000 1999
-------------- ------------------ ----------- ----------------
<S> <C> <C> <C> <C>
Sales $116,591 $59,803 $290,987 $100,407
Cost of goods sold 91,338 48,078 230,560 80,853
-------------- ------------ ----------- -----------
Gross profit 25,253 11,725 60,427 19,554
Selling, general and administrative expenses 7,302 2,281 18,525 5,738
Stock compensation charge -- -- -- 2,880
Depreciation and amortization 2,747 1,148 8,165 2,106
-------------- ------------ ----------- -----------
Income from operations 15,204 8,296 33,737 8,830
Interest expense, net 4,023 463 9,673 742
Other income, net 227 292 1,122 626
-------------- ------------ ----------- -----------
Income before income tax provision 11,408 8,125 25,186 8,714
Income tax provision 4,676 3,212 10,281 4,854
-------------- ------------ ----------- -----------
Net income $ 6,732 $ 4,913 $ 14,905 $ 3,860
============== ============ =========== ===========
Net income per share:
Basic $ 0.31 $ 0.30 $ 0.70 $ 0.40
============== ============ =========== ============
Diluted $ 0.31 $ 0.30 $ 0.70 $ 0.40
============== ============ =========== ============
Number of shares used in calculating net income
per share:
Basic 22,027 16,498 21,312 9,562
============== ============ =========== ===========
Diluted 22,037 16,589 21,337 9,636
============== ============ =========== ===========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
</TABLE>
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
-------------------------------------
2000 1999
------------ -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 14,905 $ 3,860
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 8,165 2,106
Net gain on sale of property, plant and equipment (415) (217)
Deferred income tax provision 2,000 924
Provision for doubtful accounts 66 242
Stock compensation charge -- 2,880
Changes in assets and liabilities, excluding effects of acquisitions:
Receivables (16,565) (9,322)
Prepaid expenses and other current assets 64 (1,608)
Accounts payable and accrued liabilities 4,629 9,108
------------ -------------
Net cash provided by operating activities 12,849 7,973
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (6,514) (2,847)
Payments for acquisitions accounted for as purchases, net of cash received
of $3,961 and $10,078 (97,935) (55,661)
Proceeds from disposals of property, plant and equipment 1,839 2,330
------------ -------------
Net cash used in investing activities (102,610) (56,178)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 93,420 32,148
Repayments of borrowings (104) (3,501)
Proceeds from issuances of common stock -- 32,512
Common stock issuance costs (242) (3,459)
Debt issuance costs (1,398) --
Distributions to stockholders -- (7,714)
------------ -------------
Net cash provided by financing activities 91,676 49,986
------------ -------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,915 1,781
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 627 4,213
------------ -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,542 $ 5,994
============ =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 9,071 $ 705
Cash paid for income taxes $ 889 $ 370
NONCASH FINANCING ACTIVITY:
Distribution of cash surrender value of life insurance to stockholder $ -- $ 1,155
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
</TABLE>
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION
U.S. Concrete, Inc., a Delaware corporation, was founded in July 1997 to
create a leading provider of ready-mixed concrete and related products and
services to the construction industry in major markets in the United States. It
did not conduct any operations prior to May 1999. On May 28, 1999, it completed
the initial public offering of its common stock and concurrently acquired six
operating businesses. From the date of its IPO through September 30, 2000, U.S.
Concrete acquired 14 additional operating businesses and intends to acquire
additional companies to expand its operations.
For financial statement presentation purposes, (1) we present Central
Concrete Supply Co., Inc., one of the businesses we initially acquired, as the
acquirer of the other acquired businesses and U.S. Concrete, (2) we account for
these acquisitions in accordance with the purchase method of accounting and (3)
the effective date of the initial acquisitions is May 31, 1999. Our financial
statements are those of Central prior to June 1, 1999 and of U.S. Concrete and
its consolidated subsidiaries after that date. Our financial statements reflect
the operations of the businesses we acquired after May 31, 1999 from their
respective dates of acquisition.
U.S. Concrete's future success depends on a number of factors, which
include integrating operations successfully, identifying and integrating
satisfactory acquisition candidates, obtaining acquisition financing, managing
growth, attracting and retaining qualified management and employees, complying
with government regulations and other regulatory requirements or contract
specifications, and addressing risks associated with competition, seasonality
and quarterly fluctuations.
Under applicable regulations of the SEC, the historical consolidated
financial statements in this report are unaudited and omit information and
footnote disclosures that financial statements prepared in accordance with
generally accepted accounting principles normally would include. In the opinion
of management, (1) the disclosures herein are adequate to make the information
presented not misleading and (2) the consolidated financial statements reflect
all elimination entries and normal adjustments that are necessary for a fair
presentation of the results for the interim periods presented.
Operating results for interim periods are not necessarily indicative of the
results for full years. You should read these condensed consolidated financial
statements together with the audited financial statements and related notes in
U.S. Concrete's annual report on Form 10-K for the year ended December 31, 1999.
2. SIGNIFICANT ACCOUNTING POLICIES
U.S. Concrete has not added to or changed its accounting policies
significantly since December 31, 1999. For a description of these policies,
refer to Note 2 of the Consolidated Financial Statements in U.S. Concrete's
annual report on Form 10-K for the year ended December 31, 1999.
3. BUSINESS COMBINATIONS
During the first nine months of 2000, U.S. Concrete acquired six
businesses. The aggregate consideration it paid in these transactions, all of
which are accounted for as purchases, consisted of $94.1 million in cash and 3.7
million shares of common stock. The accompanying balance sheet as of September
30, 2000 includes a preliminary allocation of this consideration and is subject
to final adjustment. This allocation resulted in the addition of $83.6 million
to goodwill that is being amortized over 40 years. The following summarized pro
forma financial information adjusts the historical financial information by
assuming that all the businesses acquired through September 30, 2000 by U.S.
Concrete had been acquired on January 1, 1999:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
----------------------------- ---------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
(dollars in thousands, except per share amounts; unaudited)
<S> <C> <C> <C> <C>
Revenues.................... $ 119,668 $ 121,952 $ 312,724 $ 302,679
Net income.................. $ 6,731 $ 8,592 $ 14,995 $ 13,416
Basic earnings per share.... $ 0.30 $ 0.38 $ 0.67 $ 0.60
Diluted earnings per share.. $ 0.30 $ 0.38 $ 0.67 $ 0.60
</TABLE>
4
<PAGE>
The pro forma adjustments these amounts include primarily relate to:
. contractual reductions in salaries, bonuses and benefits to former
owners of the businesses;
. elimination of legal, accounting and other professional fees incurred
in connection with the acquisitions;
. amortization of goodwill resulting from the acquisitions;
. reduction in interest expense, net of interest expense on borrowings
to fund acquisitions; and
. adjustments to the federal and state income tax provisions based on
pro forma operating results.
The pro forma financial information does not purport to represent what the
combined financial results of operations of U.S. Concrete actually would have
been if these transactions had in fact occurred when assumed and are not
necessarily representative of its financial results of operations for any future
period.
4. SHARES USED IN COMPUTING EARNINGS PER SHARE
The following table summarizes the number of shares (in thousands) of
common stock we have used on a weighted average basis in calculating earnings
per share:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
--------------------------- ----------------------------
2000 1999 2000 1999
------- ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C>
Shares issued to Central's owners 3,120 3,120 3,120 3,120
Shares issued to owners of acquired businesses other
than Central 11,684 6,155 10,969 2,782
Shares issued to initial stockholders and
management personnel of U.S. Concrete 2,853 2,853 2,853 1,688
Shares issued in the IPO 4,370 4,370 4,370 1,972
------- ------- ------- -------
Number of shares used in calculating basic
earnings per share 22,027 16,498 21,312 9,562
Effect of shares issuable under stock options and
warrants based on the treasury stock method 10 91 25 74
------- ------- ------- -------
Number of shares used in calculating diluted
earnings per share 22,037 16,589 21,337 9,636
======= ======= ======= =======
</TABLE>
5. LONG-TERM DEBT
A summary of long-term debt is as follows (dollars in thousands):
September 30, December 31,
2000 1999
------------- ------------
(unaudited)
Secured revolving credit facility $ 150,520 $ 57,100
Other 171 275
------------- ------------
150,691 57,375
Less: current maturities (129) (140)
------------- ------------
Long-term debt, net of current maturities $ 150,562 $ 57,235
============= ============
U.S. Concrete has a revolving credit facility ($200 million at September
30, 2000 and $100 million at December 31, 1999) with a group of banks that is
due May 31, 2002. It may use this facility for working capital, to finance
acquisitions, to internally expand operations and for other general corporate
purposes. Availability under the facility is tied to consolidated cash flow and
liquidity. Advances bear interest, at U.S. Concrete's option, at a prime rate or
LIBOR, in each case plus a margin keyed to the ratio of consolidated
indebtedness to cash flow. Commitment fees are due on any unused borrowing
capacity. The facility requires U.S. Concrete to maintain financial covenants
regarding net worth, coverage ratios and additional indebtedness and prohibits
dividends on its common stock. Subsidiary guarantees and pledges of
substantially all U.S. Concrete's fixed assets secure the payment of all
obligations owing under the facility.
5
<PAGE>
6. INCOME TAXES
Prior to their respective acquisitions, Central and several other acquired
businesses were S corporations and were not subject to federal income taxes.
Effective with their acquisitions, they became subject to those taxes, and U.S.
Concrete has recorded an estimated deferred tax liability to provide for its
estimated future income tax liability as a result of the difference between the
book and tax bases of the net assets of these corporations as of the dates of
their acquisitions. These consolidated financial statements reflect the federal
and state income taxes of these corporations since their dates of acquisition.
7. SUBSEQUENT EVENT
On November 10, 2000, U.S. Concrete, Inc. issued and sold to institutional
investors in a private placement $95 million aggregate principal amount of its
12.00% senior subordinated notes due November 10, 2010 for cash consideration
equal to 100% of that aggregate principal amount. The terms of these notes will
require U.S. Concrete to repay them in equal annual installments of
approximately $13.6 million on November 10 in each of the years 2004 through
2010. U.S. Concrete used the proceeds from its sale of the notes to reduce
amounts outstanding under its secured revolving credit facility. U.S. Concrete
intends to keep that facility in place and may borrow under that facility to
fund future growth opportunities and for general corporate purposes.
6
<PAGE>
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 heading "Cautionary Statement
Concerning Forward-looking Statements" following Items 1 and 2 of Part I of our
annual report on Form 10-K for the year ended December 31, 1999 and under the
heading "Management's Discussion and Analysis of Financial Condition and Results
of Operations - Factors That May Affect Our Future Operating Results" in Item 7
of Part II of that annual report.
Results of Operations
The following table sets forth for us selected historical statements of
operations information and that information as a percentage of sales for the
periods indicated. These financial statements are those of Central prior to June
1, 1999 and of U.S. Concrete and its consolidated subsidiaries after that date.
Except as we note below, the consolidation of operating results beginning on
June 1, 1999 and our subsequent acquisitions in 1999 and the first three
quarters of 2000 principally account for the changes in 2000 from 1999.
<TABLE>
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
------------------------------------------ --------------------------------------------
2000 1999 2000 1999
------------------------------------------ --------------------------------------------
(dollars in thousands; unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $116,591 100.0% $59,803 100.0% $290,987 100.0% $100,407 100.0%
Cost of goods sold 91,338 78.3 48,078 80.4 230,560 79.2 80,853 80.5
------------ -------- ---------- -------- ----------- -------- ----------- ------
Gross profit 25,253 21.7 11,725 19.6 60,427 20.8 19,554 19.5
Selling, general and
administrative expenses 7,302 6.3 2,281 3.8 18,525 6.4 5,738 5.7
Stock compensation charge -- -- -- -- -- -- 2,880 2.9
Depreciation and amortization 2,747 2.4 1,148 1.9 8,165 2.8 2,106 2.1
------------ -------- ---------- -------- ----------- -------- ----------- ------
Income from operations 15,204 13.0 8,296 13.9 33,737 11.6 8,830 8.8
Interest expense, net 4,023 3.5 463 0.8 9,673 3.3 742 0.7
Other income, net 227 0.2 292 0.5 1,122 0.4 626 0.6
------------ -------- ---------- -------- ----------- -------- ----------- ------
Income before income tax
provision 11,408 9.7 8,125 13.6 25,186 8.7 8,714 8.7
Income tax provision 4,676 4.0 3,212 5.4 10,281 3.5 4,854 4.8
------------ -------- ---------- -------- ----------- -------- ----------- ------
Net income $ 6,732 5.7% $ 4,913 8.2% $ 14,905 5.2% $ 3,860 3.9%
============ ======== ========== ======== =========== ======== =========== ======
</TABLE>
Sales. Sales increased $56.8 million, or 95.0%, and $190.6 million, or
189.8%, for the three- and nine-month periods ended September 30, 2000,
respectively, as compared with the corresponding periods in 1999.
Gross profit. Gross profit increased $13.5 million, or 115.4%, and $40.9
million, or 209.0%, for the three- and nine-month periods ended September 30,
2000, respectively, as compared with the corresponding periods in 1999. Gross
margins increased from 19.6% in the three months ended September 30, 1999 to
21.7% in the three months ended September 30, 2000 and increased from 19.5% in
the nine months ended September 30, 1999 to 20.8% in the nine months ended
September 30, 2000. The increase in gross margins for the three- and nine-month
periods is attributable to improved pricing terms we have negotiated with key
materials suppliers in our major ready-mixed markets.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased $5.0 million, or 220.1%, and $12.8 million, or
222.8%, for the three- and nine-month periods ended September 30, 2000,
respectively, as compared with the corresponding periods in 1999. Selling,
general and administrative expenses as a percentage of sales increased from 3.8%
in the three months ended September 30, 1999 to 6.3% in the three months ended
September 30, 2000 and increased from 5.7% in the nine months ended September
30, 1999 to 6.4% in the nine months ended September 30, 2000. The increase in
selling, general and administrative expenses as a percentage of sales for both
the three- and nine-month periods is attributable to additions to the corporate
overhead infrastructure to accommodate our growth strategy as well as management
additions in certain of our markets.
7
<PAGE>
Stock compensation charge. The 1999 stock compensation charge represents a
noncash charge related to 400,000 shares of common stock U.S. Concrete issued in
December 1998 and March 1999 to management and nonemployee directors at a
nominal cost. The amount of this charge reflected a fair value of $7.20 per
share, which represented a 10% discount from the initial offering price to the
public of $8.00 per share in the IPO.
Depreciation and amortization. Depreciation and amortization expense increased
$1.6 million, or 139.3%, and $6.1 million, or 287.7%, for the three-and nine-
month periods ended September 30, 2000, respectively, as compared with the
corresponding periods in 1999. This increase includes amortization of the
goodwill attributable to our acquisition activity. We are amortizing this
goodwill over 40 years for each acquisition. At September 30, 2000, the
annualized amount of this noncash expense was $4.8 million.
Interest expense, net. Interest expense, net, increased $3.6 million, or
768.9%, and $8.9 million, or 1,203.6%, for the three- and nine-month periods
ended September 30, 2000, respectively, as compared with the corresponding
periods in 1999. This increase was attributable principally to borrowings we
made to pay the cash portion of the purchase prices for our acquisitions. At
September 30, 2000, we had borrowings totaling $150.6 million outstanding under
our credit facility at a weighted average interest cost of 9.1% per annum.
Other income, net. Other income, net decreased $65,000, or 22.3%, and
increased $496,000, or 79.2%, for the three- and nine-month periods ended
September 30, 2000, respectively, as compared with the corresponding periods in
1999. The nine-month increase was attributable to the sale of a customer
contract, a gain from the involuntary conversion of property and numerous other
items of income and expense.
Income tax provision. Income tax provision increased $1.5 million, or 45.6%,
and $5.4 million, or 111.8%, for the three- and nine-month periods ended
September 30, 2000, respectively, as compared with the corresponding periods in
1999. These increases were attributable to the fact that Central was an S
corporation during the first five months of 1999 and thus made no provision for
federal income taxes in that period.
Liquidity and Capital Resources
Our acquisitions since December 31, 1999 principally account for the changes
in our working capital accounts and our property, plant and equipment account
from December 31, 1999 to September 30, 2000.
During the first three quarters of 2000, we purchased six businesses that we
have accounted for in accordance with the purchase method of accounting. The
aggregate consideration we paid in these transactions consisted of $94.1 million
in cash and 3.7 million shares of common stock.
In February 2000, we increased the size of our secured revolving credit
facility to $200 million. We had $150.6 million of outstanding borrowings under
the facility at September 30, 2000. The facility has a term expiring in May 2002
and a $5.0 million sublimit for letters of credit issued on our behalf. Our
borrowing capacity under the facility will vary from time to time depending on
our satisfaction of several financial tests. We may use the facility for the
following purposes:
. financing acquisitions;
. funding the internal expansion of our operations;
. working capital; and
. general corporate purposes.
Our subsidiaries have guaranteed the repayment of all amounts owing under the
facility, and we secured the facility with the capital stock and assets of our
subsidiaries. The facility:
. requires the consent of the lenders for certain acquisitions;
. prohibits the payment of cash dividends on our common stock;
. limits our ability to incur additional indebtedness; and
. requires us to comply with financial covenants.
The failure to comply with these covenants and restrictions would constitute
an event of default under the facility.
8
<PAGE>
On November 10, 2000, we issued and sold to institutional investors in a
private placement $95 million aggregate principal amount of our 12.00% senior
subordinated notes due November 10, 2010 for cash consideration equal to 100% of
that aggregate principal amount. The terms of these notes will require us to
repay them in equal annual installments of approximately $13.6 million on
November 10 in each of the years 2004 through 2010. We used the net proceeds
from our sale of the notes to reduce amounts outstanding under our secured
revolving credit facility. We intend to keep that facility in place and may
borrow under that facility to fund future growth opportunities and for general
corporate purposes.
We anticipate that our consolidated cash flow from our operations will exceed
our normal working capital needs, debt service requirements and the amount of
our planned capital expenditures, excluding acquisitions, for at least the next
12 months.
The continuation of our growth strategy will require substantial capital. We
currently intend to finance future acquisitions through issuances of our common
stock or debt securities, including convertible debt securities, and borrowings
under our credit facility. Using debt to complete acquisitions could
substantially limit our operational and financial flexibility. The extent to
which we will be able or willing to use our common stock to make acquisitions
will depend on its market value from time to time and the willingness of
potential sellers to accept it as full or partial payment. Using our common
stock for this purpose may result in dilution to our then existing stockholders.
To the extent we are unable to use our common stock to make future acquisitions,
our ability to grow will be limited by the extent to which we are able to raise
capital for this purpose, as well as to expand existing operations, through debt
or additional equity financings. If we are unable to obtain additional capital
on acceptable terms, we may be required to reduce the scope of our presently
anticipated expansion, which could materially adversely affect our business and
the value of our common stock.
We cannot accurately predict the timing, size and success of our acquisition
efforts or our associated potential capital commitments.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Borrowings under our revolving credit facility expose us to market risks.
Outstanding borrowings under our credit facility were $150.6 million at
September 30, 2000. A change of one percent in the interest rate would cause a
change in interest expense on these outstanding borrowings of approximately $1.5
million, or $0.04 per share, on an annual basis. We did not enter into our
credit facility for trading purposes, and the facility carries interest at a
pre-agreed percentage point spread from either a prime interest rate or a LIBOR
interest rate.
9
<PAGE>
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
(c) Unregistered Sales of Securities.
Between July 1, 2000 and September 30, 2000, U.S. Concrete issued 385,832
shares of common stock as part of the consideration we paid to the former owners
of the businesses we acquired in the current and prior period. We issued these
shares without registration under the Securities Act in reliance on the
exemption Section 4(2) of the Securities Act provides for transactions not
involving any public offering. Each acquisition involved a small number of
owners who received shares of U.S. Concrete common stock.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit
Number Description
------ --------------------------------------------------------------------
2.1* -- Agreement and Plan of Reorganization dated as of March 22, 1999 by
and among U.S. Concrete, OCC Acquisition Inc., Opportunity Concrete
Corporation and the stockholders named therein (Form S-1 (Reg. No.
333-74855), Exhibit 2.1).
2.2* -- Agreement and Plan of Reorganization dated as of March 22, 1999 by
and among U.S. Concrete, Walker's Acquisition Inc., Walker's
Concrete, Inc. and the stockholders named therein (Form S-1 (Reg.
No. 333-74855), Exhibit 2.2).
2.3* -- Agreement and Plan of Reorganization dated as of March 22, 1999 by
and among U.S. Concrete, Central Concrete Acquisition Inc., Central
Concrete Supply Co., Inc. and the stockholders named therein (Form
S-1 (Reg. No. 333-74855), Exhibit 2.3).
2.4* -- Agreement and Plan of Reorganization dated as of March 22, 1999 by
and among U.S. Concrete, Bay Cities Acquisition Inc., Bay Cities
Building Materials Co., Inc. and the stockholders named therein
(Form S-1 (Reg. No. 333-74855), Exhibit 2.4).
2.5* -- Agreement and Plan of Reorganization dated as of March 22, 1999 by
and among U.S. Concrete, Baer Acquisition Inc., Baer Concrete,
Incorporated and the stockholders named therein (Form S-1 (Reg. No.
333-74855), Exhibit 2.5).
2.6* -- Agreement and Plan of Reorganization dated as of March 22, 1999 by
and among U.S. Concrete, Santa Rosa Acquisition Inc., R.G.
Evans/Associates (d/b/a Santa Rosa Cast Products Co.) and the
stockholders named therein (Form S-1 (Reg. No. 333-74855), Exhibit
2.6).
2.7* -- Uniform Provisions for the Acquisitions (incorporated into the
agreements filed as Exhibits 2.1 through 2.6 hereto) (Form S-1 (Reg.
No. 333-74855), Exhibit 2.7).
2.8* -- Acquisition Agreement and Plan of Reorganization dated as of
September 14, 1999 by and among U.S. Concrete, Inc., Concrete XI
Acquisition, Inc., Carrier Excavation and Foundation Company, John
F. Carrier, William Henry Carrier, Michael K. Carrier, Mary G.
Carrier, Trustee for Anne Carrier (TN UGMA), William Henry Carrier,
Trustee for William Henry Carrier, Jr. (TN UGMA), and Mary G.
Carrier (Form 10-K for the year ended December 31, 1999 (File No.
000-26025), Exhibit 2.8).
2.9* -- Stock Purchase Agreement dated as of November 5, 1999 by and among
U.S. Concrete, Inc., B. Thomas Stover, as Trustee under Trust
Agreement dated February 20, 1986 for B. Thomas Stover, Sarah M.
Stover, as Trustee under Trust Agreement dated February 27, 1990 for
Sarah M. Stover, B. Andrew Stover, B. Thomas Stover, Custodian under
Michigan Uniform Gifts to Minors Act for the benefit of Carolyn A.
Stover, Jeffery D. Spahr, Jeffrey T. Stover, and Bradley C. Stover
(Form 10-K for the year ended December 31, 1999 (File No.
000-26025), Exhibit 2.9).
2.10* -- Stock Purchase Agreement dated as of January 20, 2000 by and among
Robert S. Beall, Chase Bank of Texas, National Association, in its
capacity as Trustee for Allison Beall 1999 Trust, Logan Beall 1999
Trust, Allison Beall Descendents' Trust and Logan Beall Descendents'
Trust and U.S. Concrete, Inc. (Form 8-K dated February 23, 2000
(File No. 000-26025), Exhibit 2.1).
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Exhibit
Number Description
------- --------------------------------------------------------------------
2.11* -- Amendment No. 1 to Stock Purchase Agreement dated as of January 28,
2000 by and among Robert S. Beall, Chase Bank of Texas, National
Association, in its capacity as trustee for Allison Beall 1999
Trust, Logan Beall 1999 Trust, Allison Beall Descendents' Trust and
Logan Beall Descendents' Trust and U.S. Concrete, Inc. (Form 8-K
dated February 23, 2000 (File No. 000-26025), Exhibit 2.2).
2.12* -- Stock Purchase Agreement dated as of January 24, 2000 by and among
Fallis Arch Beall, Nola Sue Beall, Robert S. Beall, Leigh Ann
Gathright, Doris W. Stokes and Fallis Arch Beall, in his capacity as
Trustee for the R. E. Stokes Trust and U.S. Concrete, Inc. (Form 8-K
dated February 23, 2000 (File No. 000-26025), Exhibit 2.3).
2.13* -- Acquisition Agreement and Plan of Reorganization dated as of
February 8, 2000 by and among U.S. Concrete, Inc., Concrete XIX
Acquisition, Inc., Cornillie Fuel & Supply, Inc., Richard A.
Deneweth and Joseph C. Cornillie, Trustee URTA of Joseph C.
Cornillie (Form 10-K for the year ended December 31, 1999 (File No.
000-26025), Exhibit 2.13).
2.14* -- Stock Purchase Agreement dated as of February 8, 2000 by and among
U.S. Concrete, Inc., Cornillie Fuel & Supply, Inc., Dencor, Inc.,
Richard A. Deneweth and Joseph C. Cornillie, Trustee URTA of Joseph
C. Cornillie (Form 10-K for the year ended December 31, 1999 (File
No. 000-26025), Exhibit 2.14).
2.15* -- Acquisition Agreement and Plan of Reorganization dated as of
February 8, 2000 by and among U.S. Concrete, Inc., Concrete XVIII
Acquisition, Inc., Cornillie Leasing, Inc., Richard A. Deneweth and
Joseph C. Cornillie, Trustee URTA of Joseph C. Cornillie (Form 10-K
for the year ended December 31, 1999 (File No. 000-26025), Exhibit
2.15).
2.16* -- Acquisition Agreement and Plan of Reorganization dated as of March
2, 2000 by and among U.S. Concrete, Inc., Concrete XXIV Acquisition,
Inc., Stancon Inc. and Donald S. Butler and John Grace (Form 10-K
for the year ended December 31, 1999 (File No. 000-26025), Exhibit
2.16).
3.1* -- Restated Certificate of Incorporation of U.S. Concrete (Form S-1
(Reg. No. 333-74855), Exhibit 3.1).
3.2 -- Amended and Restated Bylaws of U.S. Concrete.
3.3* -- Certificate of Designations of Series A Junior Participating
Preferred Stock of U.S. Concrete, Inc.
4.1* -- Amended and Restated Credit Agreement dated as of February 9, 2000
among U.S. Concrete, the Guarantors named therein, the Lenders named
therein, Bankers Trust Company, as syndication agent, First Union
Nation Bank, as documentation agent, Bank One, Texas, NA, Branch
Banking & Trust Company, Credit Lyonnais New York Branch and The
Bank of Nova Scotia, as co-managing agents and Chase Bank of Texas,
N.A., as the Administrative Agent, and Chase Securities, Inc. as
sole book manager and lead arranger (Form 10-K for the year ended
December 31, 1999 (File No. 000-26025), Exhibit 4.6).
10.1 -- Amended and Restated Indemnification Agreements dated August 17,
2000 between U.S. Concrete and each of its directors and officers.
10.2 -- Indemnification Agreement dated August 17, 2000 between U.S.
Concrete and Raymond C. Turpin.
27.1 -- Financial Data Schedule.
_______
* Incorporated by reference to the filing indicated.
(b) Reports on Form 8-K.
U.S. Concrete did not file any reports on Form 8-K during the quarter
ended September 30, 2000.
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<PAGE>
SIGNATURES
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: November 14, 2000 By: /s/ Michael W. Harlan
---------------------------------
Michael W. Harlan
Senior Vice President -- Chief
Financial Officer
12
