<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 March 31, 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 21,737,511 shares of its Common Stock, par value $.001
per share, outstanding at May 12, 2000.
<PAGE>
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 SUPPLEMENTAL COMBINED
FINANCIAL INFORMATION
Supplemental Combined Financial Information....................................... 1
Supplemental Combined Statements of Operations for the three months ended
March 31, 2000 and 1999.......................................................... 2
U.S. CONCRETE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets............................................. 4
Condensed Consolidated Statements of Operations................................... 5
Condensed Consolidated Statements of Cash Flows................................... 6
Notes to Condensed Consolidated Financial Statements.............................. 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations....................................................................... 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk................... 10
Part II - Other Information
Item 2. Changes in Securities and Use of Proceeds.................................... 11
Item 6. Exhibits and Reports on Form 8-K............................................. 12
</TABLE>
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
U.S. CONCRETE, INC. AND SUBSIDIARIES
SUPPLEMENTAL COMBINED FINANCIAL INFORMATION
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. We
did not conduct any operations prior to May 1999. On May 28, 1999, we completed
the initial public offering of our common stock and concurrently acquired six
operating businesses. From the date of the IPO through March 31, 2000, we
acquired 11 additional operating businesses. We intend to acquire additional
companies to expand our operations.
For financial statement presentation purposes, (1) we present Central Concrete
Supply Co., Inc., one of the acquired businesses, 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. The operations of the businesses we acquired
after May 31, 1999 are included from their respective dates of acquisition.
The accompanying unaudited supplemental pro forma combined statement of
operations for the three months ended March 31, 1999 assumes that we completed
the following transactions on January 1, 1999:
. our issuance and sale in the IPO of 4.4 million shares of our common stock
(including shares we sold on the exercise of our underwriters' over-allotment
option) at $8.00 per share;
. our application of our net proceeds from the IPO;
. our acquisition of the six initial operating businesses and payment of
the purchase prices for those businesses; and
. our refinancing with borrowings under our credit facility of the
indebtedness we assumed as a result of the acquisitions.
The unaudited supplemental pro forma combined statement of operations for the
three months ended March 31, 1999 also reflects pro forma adjustments for:
. 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.
This statement does not reflect the operations of the businesses we acquired
after May 31, 1999.
We present the unaudited supplemental pro forma combined statement of
operations for the three months ended March 31, 1999 because we believe
investors find the information useful. You should read this statement together
with the condensed consolidated financial statements and notes in this report
and our annual report on Form 10-K for the year ended December 31, 1999. The pro
forma adjustments are based on estimates, available information and certain
assumptions which we may revise as additional information becomes available. The
supplemental pro forma combined statement of operations does not purport to
represent what the combined results of operations of U.S. Concrete, Inc. and
subsidiaries actually would have been if these transactions and events had in
fact occurred when assumed and is not necessarily representative of our
consolidated financial results of operations for any future period.
1
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
SUPPLEMENTAL COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS; UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
------------------------------------
2000 1999
--------- ---------
(Pro Forma)
<S> <C> <C>
Sales $67,933 $38,461
Cost of goods sold 55,748 31,986
------- -------
Gross profit 12,185 6,475
Selling, general and administrative expenses 5,277 3,378
Depreciation and amortization 2,354 1,173
------- -------
Income from operations 4,554 1,924
Interest expense, net 2,251 422
Other, net (234) (497)
------- -------
Income before income tax provision 2,537 1,999
Income tax provision 1,020 993
------- -------
Net income $ 1,517 $ 1,006
======= =======
Earnings per share:
Basic $0.08 $0.06
======= =======
Diluted $0.08 $0.06
======= =======
Number of shares used in calculating earnings per share:
Basic 20,206 16,209
------ ------
Diluted 20,209 16,209
======= =======
</TABLE>
The accompanying notes are an integral part of these supplemental combined
statements of operations.
2
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL COMBINED STATEMENTS OF OPERATIONS
(UNAUDITED)
SHARES USED IN COMPUTING EARNINGS PER SHARE
The following table summarizes the number of shares (in thousands) of common
stock used in calculating earnings per share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
---------------------------------
2000 1999
-------- -----------
(Pro Forma)
<S> <C> <C>
Shares issued to Central's owners 3,120 3,120
Shares issued to owners of acquired businesses
other than Central 9,863 5,866
Shares issued to initial stockholders and
management personnel of U.S. Concrete 2,853 2,853
Shares issued in the IPO 4,370 4,370
------ ------
Number of shares used in calculating basic earnings
per share 20,206 16,209
Effect of shares issuable under stock options and
warrants based on the treasury stock method 3 --
------ ------
Number of shares used in calculating diluted
earnings per share 20,209 16,209
====== ======
</TABLE>
3
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------------------- --------------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,054 $ 627
Trade accounts receivable, net 46,823 44,085
Receivables from related parties 1,512 1,496
Inventories 6,086 4,351
Prepaid expenses and other current assets 2,066 1,758
--------------------- --------------------
Total current assets 59,541 52,317
--------------------- --------------------
Property, plant and equipment, net 80,168 53,949
Goodwill, net 158,389 105,492
Other assets 3,543 976
--------------------- --------------------
Total assets $301,641 $212,734
===================== ====================
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 142 $ 140
Accounts payable and accrued liabilities 34,935 37,599
--------------------- --------------------
Total current liabilities 35,077 37,739
--------------------- --------------------
Long-term debt, net of current maturities 130,149 57,235
Deferred income taxes 8,360 6,967
--------------------- --------------------
Total liabilities 173,586 101,941
--------------------- --------------------
Stockholders' equity
Common stock 21 19
Additional paid-in capital 120,014 104,271
Retained earnings 8,020 6,503
--------------------- --------------------
Total stockholders' equity 128,055 110,793
--------------------- --------------------
Total liabilities and stockholders' equity $301,641 $212,734
===================== ====================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts; unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
---------------------------------
2000 1999
-------- --------
<S> <C> <C>
Sales $67,933 $12,956
Cost of goods sold 55,748 10,625
-------- --------
Gross profit 12,185 2,331
Selling, general and administrative expenses 5,277 1,323
Depreciation and amortization 2,354 292
-------- --------
Income from operations 4,554 716
Interest expense (income), net 2,251 (38)
Other, net (234) (189)
-------- --------
Income before income tax provision 2,537 943
Income tax provision 1,020 17
-------- --------
Net income $ 1,517 $ 926
======== ========
Earnings per share:
Basic $0.08 $0.30
======== ========
Diluted $0.08 $0.30
======== ========
Number of shares used in calculating earnings per share:
Basic 20,206 3,120
======== ========
Diluted 20,209 3,120
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
-----------------------------------
2000 1999
---------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,517 $ 926
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 2,354 292
Net gain on sale of property, plant and equipment (15) (189)
Deferred income tax provision 600 --
Provision for doubtful accounts 67 --
Changes in assets and liabilities, excluding effects of acquisitions:
Receivables 7,287 1,836
Prepaid expenses and other current assets (225) 173
Accounts payable and accrued liabilities (12,298) (1,118)
-------- --------
Net cash provided by (used in) operating activities (713) 1,920
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (3,090) (1,768)
Payments for acquisitions accounted for as purchases, net of cash received
of $2,987 and $0 (66,710) --
Proceeds from disposals of property, plant and equipment 24 1,129
-------- --------
Net cash used in investing activities (69,776) (639)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 72,952 1,613
Repayments of borrowings (36) (31)
Distributions to stockholders -- (1,637)
-------- --------
Net cash provided by (used in) financing activities 72,916 (55)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,427 1,226
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 627 4,213
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,054 $ 5,439
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $1,768 $18
Cash paid for income taxes $ 232 $40
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<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 March 31, 2000, U.S.
Concrete acquired 11 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 acquired businesses, 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. The operations of the businesses we acquired
after May 31, 1999 are included from their respective dates of acquisition.
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 quarter of 2000, U.S. Concrete acquired three businesses.
The aggregate consideration it paid in these transactions, all of which are
accounted for as purchases, consisted of $67.4 million in cash and 2.6 million
shares of common stock. The accompanying balance sheet as of March 31, 2000
includes preliminary allocations of the purchase prices and is subject to final
adjustment. The following summarized unaudited pro forma financial information
adjusts the historical financial information by assuming that all the businesses
acquired through March 31, 2000 by U.S. Concrete had been acquired on January 1,
1999:
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, 2000 DECEMBER 31, 1999
---------------------- ---------------------
(unaudited)
<S> <C> <C>
Revenues...................................................................... $74,566 $372,858
Net Income.................................................................... $ 1,351 $ 17,207
Basic earnings per share...................................................... $ 0.06 $ 0.81
Diluted earnings per share.................................................... $ 0.06 $ 0.81
</TABLE>
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.
7
<PAGE>
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.
From April 1, 2000 through May 11, 2000, U.S. Concrete acquired one business
for $11.5 million in cash and 0.5 million shares of common stock in a
transaction accounted for as a purchase.
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 ENDED
MARCH 31,
--------------------------------
2000 1999
---------- ----------
(unaudited)
<S> <C> <C>
Shares issued to Central's owners 3,120 3,120
Shares issued to owners of acquired businesses other than Central 9,863 --
Shares issued to initial stockholders and management personnel of U.S. Concrete 2,853 --
Shares issued in the IPO 4,370 --
------- -------
Number of shares used in calculating basic earnings per share 20,206 3,120
Effect of shares issuable under stock options and warrants based on the treasury
stock method 3 --
------- -------
Number of shares used in calculating diluted earnings per share
20,209 3,120
======= ======
</TABLE>
5. LONG-TERM DEBT
A summary of long-term debt is as follows (dollars in thousands):
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
---------- ------------
(unaudited)
<S> <C> <C>
Secured revolving credit facility $130,050 $57,100
Other 241 275
-------- -------
130,291 57,375
Less: current maturities (142) (140)
-------- -------
Long-term debt, net of current maturities $130,149 $57,235
======== =======
</TABLE>
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 $200 million in February 2000.
6. INCOME TAXES
Prior to their respective acquisitions, Central and 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.
8
<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 on Form 10-K.
RESULTS OF OPERATIONS
The following table sets forth for us selected historical statement 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 quarter of
2000 principally account for the changes in 2000 from 1999.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
------------------------------------------------------------------
2000 1999
------------------------- -------------------------------
(dollars in thousands; unaudited)
<S> <C> <C> <C> <C>
Sales $67,933 100.0% $12,956 100.0%
Cost of goods sold 55,748 82.1 10,625 82.0
------- ----- ------- -----
Gross profit 12,185 17.9 2,331 18.0
Selling, general and administrative expenses 5,277 7.8 1,323 10.2
Depreciation and amortization 2,354 3.4 292 2.3
------- ----- ------- -----
Income from operations 4,554 6.7 716 5.5
Interest expense (income), net 2,251 3.3 (38) (0.3)
Other, net (234) (0.3) (189) (1.4)
------- ----- ------- -----
Income before income tax provision 2,537 3.7 943 7.2
Income tax provision 1,020 1.5 17 0.1
------- ----- ------- -----
Net income $ 1,517 2.2% $ 926 7.1%
======= ===== ======= =====
</TABLE>
SALES. Sales increased $55.0 million, or 424.3%, from $13.0 million in 1999
to $67.9 million in 2000.
GROSS PROFIT. Gross profit increased $9.9 million, or 422.7%, from $2.3
million in 1999 to $12.2 million in 2000. Gross margins decreased from 18.0% in
1999 to 17.9% in 2000.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $4.0 million, or 298.8%, from $1.3 million in
1999 to $5.3 million in 2000. The 2000 expenses include the salaries of our
executive officers and expenses we incurred in building our corporate
infrastructure.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense increased
$2.1 million, or 706.2%, from $292,000 in 1999 to $2.4 million in 2000. This
increase includes amortization of the goodwill attributable to our acquisition
activity. We are amortizing this goodwill over 40 years for each acquisition. At
March 31, 2000, the annualized amount of this noncash expense was $3.4 million.
INTEREST EXPENSE (INCOME), NET. Interest expense (income), net, increased $2.3
million from $(38,000) in 1999 to $2.3 million in 2000. This increase was
attributable principally to borrowings we made to finance our post-IPO
acquisitions and to refinance indebtedness of our acquired businesses.
INCOME TAX PROVISION. We provided for income taxes of $1.0 million in 2000, an
increase of $1.0 million from our provision in 1999. This increase is
attributable to the fact that Central was an S corporation during 1999 and thus
made no provision for federal income taxes in that period.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of 2000, we acquired three operating businesses for
aggregate consideration of $67.4 million in cash and 2.6 million
shares of common stock. We used the purchase method of accounting for each of
these acquisitions. These acquisitions principally account for the changes in
our working capital accounts and our property, plant and equipment account from
December 31, 1999 to March 31, 2000.
In February 2000, we increased the size of our secured revolving credit
facility to $200 million. We had $130.1 million of outstanding borrowings under
the facility at March 31, 2000 at a weighted average interest cost of 8.4% per
annum. 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;
. internally expanding 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.
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 certain market
risks. Outstanding borrowings under our credit facility were $130.1 million at
March 31, 2000. Based on this outstanding balance, a change of one percent in
the interest rate would cause a change in interest expense of approximately $1.3
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 60-day
Eurodollar interest rate.
10
<PAGE>
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
(c) Unregistered Sales of Securities.
Between January 1, 2000 and March 31, 2000, U.S. Concrete issued 2,613,202
shares of common stock as part of the consideration we paid to the former owners
of the three 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 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 Acquisitions 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 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,
Exhibit 2.1).
2.11* -- Amendment No. 1 to Stock Purchase Agreement, dated 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, Exhibit 2.2).
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -------------
<C> <S>
2.12* -- Stock Purchase Agreement, dated 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, 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).
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).
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: May 15, 2000 By: /s/ Michael W. Harlan
------------------------
Michael W. Harlan
Senior Vice President -- Chief
Financial Officer
13
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<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
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<SECURITIES> 0
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0
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