<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 June 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 1-12977
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 21,981,827 shares of its Common Stock, par value $.001
per share, outstanding at August 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 1. Legal Proceedings 10
Item 2. Changes in Securities and Use of Proceeds 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
2000 1999
---------- ------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 3,355 $ 627
Trade accounts receivable, net 65,846 44,085
Receivables from related parties 1,481 1,496
Inventories 7,080 4,351
Prepaid expenses and other current assets 1,486 1,758
-------- --------
Total current assets 79,248 52,317
-------- --------
Property, plant and equipment, net 84,887 53,949
Goodwill, net 183,327 105,492
Other assets 2,353 976
-------- --------
Total assets $349,815 $212,734
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 143 $ 140
Accounts payable and accrued liabilities 48,410 37,599
-------- --------
Total current liabilities 48,553 37,739
-------- --------
Long-term debt, net of current maturities 153,142 57,235
Deferred income taxes 9,125 6,967
-------- --------
Total liabilities 210,820 101,941
-------- --------
Stockholders' equity
Common stock 22 19
Additional paid-in capital 124,297 104,271
Retained earnings 14,676 6,503
-------- --------
Total stockholders' equity 138,995 110,793
-------- --------
Total liabilities and stockholders' equity $349,815 $212,734
======== ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
1
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U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts; unaudited)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
------------------------------- ------------------------------
2000 1999 2000 1999
----------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Sales $106,463 $27,648 $174,396 $40,604
Cost of goods sold 83,474 22,150 139,222 32,775
----------- --------- ---------- ----------
Gross profit 22,989 5,498 35,174 7,829
Selling, general and administrative expenses 5,946 2,134 11,223 3,457
Stock compensation charge -- 2,880 -- 2,880
Depreciation and amortization 3,064 666 5,418 959
----------- --------- ---------- ----------
Income (loss) from operations 13,979 (182) 18,533 533
Interest expense, net 3,399 317 5,650 279
Other income, net 661 145 895 334
----------- --------- ---------- ----------
Income (loss) before income tax provision 11,241 (354) 13,778 588
Income tax provision 4,585 1,642 5,605 1,642
----------- --------- ---------- ----------
Net income (loss) $ 6,656 $(1,996) $ 8,173 $(1,054)
=========== ========= ========== ==========
Net income (loss) per share:
Basic $0.31 $(0.23) $0.39 $(0.17)
=========== ========= ========== ==========
Diluted $0.31 $(0.23) $0.39 $(0.17)
=========== ========= ========== ==========
Number of shares used in calculating net income
(loss) per share:
Basic 21,696 8,576 20,951 6,037
=========== ========= ========== ==========
Diluted 21,756 8,576 20,982 6,037
=========== ========= ========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
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U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
-------------------------
<S> <C> <C>
2000 1999
---------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 8,173 $ (1,054)
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 5,418 959
Net gain on sale of property, plant and equipment (336) (215)
Deferred income tax provision 1,300 924
Provision for doubtful accounts 103 217
Stock compensation charge -- 2,880
Changes in assets and liabilities, excluding effects of acquisitions:
Receivables (8,794) (4,361)
Prepaid expenses and other current assets 77 (60)
Accounts payable and accrued liabilities (3,898) 3,482
---------- ---------
Net cash provided by operating activities 2,043 2,772
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (4,657) (2,240)
Payments for acquisitions accounted for as purchases, net of cash received
of $3,848 and $9,154 (91,819) (37,051)
Proceeds from disposals of property, plant and equipment 1,251 959
Other -- 691
---------- ---------
Net cash used in investing activities (95,225) (37,641)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 95,982 18,700
Repayments of borrowings (72) (3,480)
Proceeds from issuances of common stock -- 32,512
Cash paid related to common stock issuance costs -- (3,002)
Distributions to stockholders -- (4,952)
---------- ---------
Net cash provided by financing activities 95,910 39,778
---------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,728 4,909
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 627 4,213
---------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,355 $ 9,122
========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 4,900 $ 262
Cash paid for income taxes $ 3,481 $ 137
NONCASH FINANCING ACTIVITY:
Distribution of cash surrender value of life insurance to stockholder $ -- $ 1,155
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
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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 June 30, 2000, U.S.
Concrete acquired 13 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 half of 2000, U.S. Concrete acquired five businesses. The
aggregate consideration it paid in these transactions, all of which are
accounted for as purchases, consisted of $86.0 million in cash and 3.3 million
shares of common stock. The accompanying balance sheet as of June 30, 2000
includes preliminary allocations of the purchase prices and is subject to final
adjustment. The initial purchase price allocations of the five acquired
businesses resulted in the addition of $73.4 million to goodwill. The following
summarized pro forma financial information adjusts the historical financial
information by assuming that all the businesses acquired through June 30, 2000
by U.S. Concrete had been acquired on January 1, 1999:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
---------------------------- --------------------------
2000 1999 2000 1999
-------- -------- -------- --------
(dollars in thousands, except per share amounts; unaudited)
<S> <C> <C> <C> <C>
Revenues $108,969 $102,699 $184,452 $175,611
Net income $ 6,864 $ 3,539 $ 7,898 $ 4,710
Basic earnings per share $ 0.31 $ 0.16 $ 0.36 $ 0.21
Diluted earnings per share $ 0.31 $ 0.16 $ 0.36 $ 0.21
</TABLE>
4
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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 SIX MONTHS
ENDED JUNE 30 ENDED JUNE 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 11,353 2,127 10,608 1,069
Shares issued to initial stockholders and
management personnel of U.S. Concrete 2,853 1,832 2,853 1,095
Shares issued in the IPO 4,370 1,497 4,370 753
------------- ------------ ------------- ------------
Number of shares used in calculating basic
earnings per share 21,696 8,576 20,951 6,037
Effect of shares issuable under stock options and
warrants based on the treasury stock method 60 -- 31 --
------------- ------------ ------------- ------------
Number of shares used in calculating diluted
earnings per share 21,756 8,576 20,982 6,037
============= ============ ============= ============
</TABLE>
5. LONG-TERM DEBT
A summary of long-term debt is as follows (dollars in thousands):
JUNE 30, DECEMBER 31,
2000 1999
---------- -------------
(unaudited)
Secured revolving credit facility $153,079 $57,100
Other 206 275
----------- -----------
153,285 57,375
Less: current maturities (143) (140)
----------- -----------
Long-term debt, net of current maturities $153,142 $57,235
=========== ===========
On May 28, 1999, U.S. Concrete entered into a three-year $75 million revolving
credit facility with a group of banks. 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. The size of the facility increased
to $100 million in December 1999 and to $200 million in February 2000.
5
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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. LEGAL PROCEEDINGS
You should read Item 1 of Part II for a discussion of our legal proceedings.
6
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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 on Form 10-K.
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 two
quarters of 2000 principally account for the changes in 2000 from 1999.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
-------------------------------------------- ------------------------------------------
2000 1999 2000 1999
------------------- ------------------- ------------------- -----------------
(dollars in thousands; unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $106,463 100.0% $27,648 100.0% $174,396 100.0% $40,604 100.0%
Cost of goods sold 83,474 78.4 22,150 80.1 139,222 79.8 32,775 80.7
---------------------------------------------------------------------------------------------
Gross profit 22,989 21.6 5,498 19.9 35,174 20.2 7,829 19.3
Selling, general and
administrative expenses 5,946 5.6 2,134 7.7 11,223 6.4 3,457 8.5
Stock compensation charge -- -- 2,880 10.4 -- -- 2,880 7.1
Depreciation and amortization 3,064 2.9 666 2.4 5,418 3.1 959 2.4
---------------------------------------------------------------------------------------------
Income (loss) from operations 13,979 13.1 (182) (0.6) 18,533 10.7 533 1.3
Interest expense, net 3,399 3.2 317 1.1 5,650 3.2 279 0.7
Other income, net 661 0.6 145 0.5 895 0.5 334 0.8
---------------------------------------------------------------------------------------------
Income (loss) before income tax
provision 11,241 10.5 (354) (1.2) 13,778 8.0 588 1.4
Income tax provision 4,585 4.3 1,642 5.9 5,605 3.2 1,642 4.0
---------------------------------------------------------------------------------------------
Net income (loss) $ 6,656 6.2% $(1,996) (7.1)% $ 8,173 4.8% $(1,054) (2.6)%
=============================================================================================
</TABLE>
SALES. Sales increased $78.8 million, or 285.1%, and $133.8 million, or
329.5%, for the three- and six-month periods ended June 30, 2000, respectively,
as compared with the corresponding periods in 1999.
GROSS PROFIT. Gross profit increased $17.5 million, or 318.1%, and $27.3
million, or 349.3%, for the three- and six-month periods ended June 30, 2000,
respectively, as compared with the corresponding periods in 1999. Gross margins
increased from 19.9% in the three months ended June 30, 1999 to 21.6% in the
three months ended June 30, 2000 and increased from 19.3% in the six months
ended June 30, 1999 to 20.2% in the six months ended June 30, 2000.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $3.8 million, or 178.7%, and $7.8 million, or
224.7%, for the three- and six-month periods ended June 30, 2000, respectively,
as compared with the corresponding periods in 1999.
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 $2.4 million, or 360.0%, and $4.5 million, or 465.0%, for the three-
and six-month periods ended June 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 June 30, 2000, the annualized
amount of this noncash expense was $4.7 million.
7
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INTEREST EXPENSE, NET. Interest expense, net, increased $3.1 million, or
972.2%, and $5.4 million, or 1,925.0%, for the three- and six-month periods
ended June 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 June 30, 2000,
we had borrowings totaling $153.1 million outstanding under our credit facility
at a weighted average interest cost of 8.5% per annum.
OTHER INCOME, NET. Other income, net increased $516,000, or 355.9%, and
$561,000, or 168.0%, for the three- and six-month periods ended June 30, 2000,
respectively, as compared with the corresponding periods in 1999. These
increases were 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. We provided for income taxes of $4.6 million and $5.6
million for the three- and six-month periods ended June 30, 2000, respectively,
as compared with a provision of $1,642 during the corresponding periods in 1999.
These increases were attributable to the fact that Central was an S corporation
during 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 June 30, 2000.
During the first two quarters of 2000, we purchased five operating businesses
that we have accounted for in accordance with the purchase method of accounting.
The aggregate consideration we paid in these transactions consisted of $86.0
million in cash and 3.3 million shares of common stock.
In February 2000, we increased the size of our secured revolving credit
facility to $200 million. We had $153.1 million of outstanding borrowings under
the facility at June 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.
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.
8
<PAGE>
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 $153.1 million at June 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 1. LEGAL PROCEEDINGS
Bay-Crete Transportation & Materials, LLC alleges in a lawsuit it filed on
July 11, 2000 in California Superior Court in San Mateo County, against U.S.
Concrete, Inc. and its subsidiary Central Concrete Supply Co., Inc., that it
possesses beneficiary rights under a 1983 contract to purchase annually up to
200,000 cubic yards of ready-mixed concrete from Central until March 30, 2082.
Under that contract, the purchase price would consist of Central's direct
materials costs and an overhead fee. Bay-Crete alleges that U.S. Concrete, Inc.
breached that contract by refusing to acknowledge Bay-Crete's rights as a
beneficiary of that contract. It is seeking damages of $500 million of lost
profits spread over the next 82 years. A predecessor to Central previously
prevailed in a similar action brought by the general manager of Bay-Crete under
a related agreement, and U.S. Concrete and Central believe they have meritorious
defenses to Bay-Crete's claim and intend to vigorously defend this suit. Based
on our evaluation of the above matter, we believe it is unlikely that the final
outcome of this claim will have a material adverse effect on our business,
financial condition or results of operations; however, due to the inherent
uncertainty of litigation, there can be no assurance that the resolution of this
claim will not have a material adverse effect on our results of operations for
the fiscal period in which such resolution occurs.
From time to time, and currently, we are subject to various other claims and
litigation brought by employees, customers and 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. We
believe it is unlikely that the final outcome of any of such claims or
litigation will have a material adverse effect on our business, financial
condition or results of operations; however, due to the inherent uncertainty of
litigation, there can be no assurance that the resolution of any particular
claim or proceeding to which we are a party will not have a material adverse
effect on our results of operations for the fiscal period in which such
resolution occurs. We expect in the future we will from time to time be a party
to litigation or administrative proceedings which arise in the normal course of
our business.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) Unregistered Sales of Securities.
Between April 1, 2000 and June 30, 2000, U.S. Concrete issued 711,337 shares
of common stock as part of the consideration we paid to the former owners of the
two businesses we acquired in that 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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
1. Our stockholders voted upon the following matters at their annual meeting
held on May 16, 2000:
(a) The following were elected to serve new terms as directors and received
the number of votes set opposite their respective names:
For Against
---------- -------
Eugene P. Martineau 15,915,507 3,815
Michael W. Harlan 15,915,507 3,815
Peter T. Dameris 15,915,507 3,815
(b) The following are directors whose terms of office as director continued
after the meeting:
Vincent D. Foster William T. Albanese Murray S. Simpson
Michael D. Mitschele Robert S. Walker
John R. Colson Neil J. Vanucci
2. A proposal to ratify the adoption of the U.S. Concrete, Inc. 2000
Employee Stock Purchase Plan received 15,844,857 votes FOR and 72,165 votes
AGAINST, with 2,300 abstentions.
3. A proposal to ratify the appointment of Arthur Andersen LLP as our
independent public accountants received 15,914,102 votes FOR and 3,200 votes
AGAINST, with 2,020 abstentions.
10
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -------------------
<C> <S>
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. 1-12977), 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. 1- 12977), 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. 1-12977), Exhibit 2.1).
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. 1-12977), 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. 1-12977), 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. 1-12977), 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. 1-12977), Exhibit 2.14).
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ----------------------
<C> <S>
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. 1-12977), 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. 1-12977), 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* -- Bylaws of U.S. Concrete (Form S-1 (Reg. No. 333-74855), Exhibit 3.2).
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. 1-12977), Exhibit 4.6).
27.1 -- Financial Data Schedule.
</TABLE>
---------------
* Incorporated by reference to the filing indicated.
(b) Reports on Form 8-K.
On February 24, 2000, we filed with the SEC a Current Report on Form 8-K to
report our February 10, 2000 acquisition of Beall Industries, Inc., Atlas
Concrete, Inc., Atlas-Tuck Concrete, Inc., Stokes Transit-Mix, Inc. and Beall
Trucking, Inc. (collectively, the "Beall Companies"), which we accounted for as
a purchase transaction. On April 20, 2000, we amended that Form 8-K to include
(1) the combined balance sheets of the Beall Companies as of December 31, 1999
and 1998 and the combined statements of operations and comprehensive income,
stockholders' equity and cash flows of the Beall Companies for the years ended
December 31, 1999 and 1998 and (2) the pro forma condensed consolidated balance
sheet of U.S. Concrete and subsidiaries as of December 31, 1999 and the pro
forma condensed consolidated statement of operations of U.S. Concrete and
subsidiaries for the year ended December 31, 1999.
12
<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: August 14, 2000 By: /s/ Michael W. Harlan
------------------------
Michael W. Harlan
Senior Vice President -- Chief
Financial Officer
13
