<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
-----------
(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, 1999 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 the
filing requirements for at least the past 90 days.
Yes X No _______
------
U.S. Concrete, Inc. had 18,633,609 shares of its Common Stock, par value $.001
per share, outstanding at February 7, 2000.
<PAGE>
This Amendment No. 1 on Form 10-Q/A amends Item 1 of the Quarterly Report on
Form 10-Q of U.S. Concrete, Inc. for the quarter ended September 30, 1999, to
revise our previously reported balances for goodwill, accounts payable and
accrued liabilities and retained earnings as reflected on our consolidated
balance sheet as of September 30, 1999 and our consolidated statement of cash
flows for the nine months ended September 30, 1999. This revision reflects an
adjustment to record an additional liability for taxes and purchase price
adjustments related to acquisitions. This revision has no impact on our
previously reported historical or pro forma results of operations for any
periods presented.
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, this
Amendment No. 1 sets forth the complete text to Item 1 of Part I of our Form 10-
Q for the quarter ended September 30, 1999, as amended.
PART I
Item 1. Financial Statements
PRO FORMA 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. It did not
conduct any operations prior to May 1999. On May 28, 1999, it completed an
initial public offering of its common stock and concurrently acquired six
operating businesses. From the date of its IPO through September 30, 1999, U.S.
Concrete acquired four additional operating businesses for approximately $13.2
million in cash and 1.7 million shares of common stock. U.S. Concrete intends
to acquire additional companies to expand its operations.
For financial statement presentation purposes, (1) Central Concrete Supply Co.,
Inc., one of the acquired businesses, is presented as the acquirer of the other
acquired businesses and U.S. Concrete, (2) these acquisitions are accounted for
in accordance with the purchase method of accounting and (3) the effective date
of the initial acquisitions is May 31, 1999. As used in this report, the term
"Company" means (1) Central prior to June 1, 1999 and (2) U.S. Concrete and its
consolidated subsidiaries on that date and thereafter.
The accompanying unaudited pro forma combined statements of operations for the
three and nine months ended September 30, 1999 and 1998, respectively, assume
that U.S. Concrete completed the following transactions on January 1 in each
period presented:
. its issuance and sale in the IPO of 4.4 million shares of its common
stock (including shares it sold on the exercise of its underwriters'
over-allotment option) at $8.00 per share;
. its application of its net proceeds from the IPO;
. its acquisition of the 10 operating businesses and its payment of the
purchase prices for those businesses; and
. its refinancing with borrowings under its credit facility of the
indebtedness it assumed as a result of the acquisitions.
These statements also reflect pro forma adjustments for:
. certain contractual reductions in salaries, bonuses and benefits to
former owners of the operating businesses;
. elimination of legal, accounting and other professional fees incurred
in connection with the acquisitions of businesses;
. amortization of goodwill resulting from the acquisitions of
businesses;
. reduction in interest expense, net of interest expense on borrowings
to fund S corporation distributions by certain businesses; and
. adjustments to the federal and state income tax provision based on pro
forma operating results.
These statements do not reflect the operations of the two businesses acquired by
the Company subsequent to September 30, 1999.
You should read the accompanying unaudited pro forma combined statements of
operations together with the Company's historical unaudited financial statements
and notes thereto this report includes. The pro forma adjustments are based on
estimates, available information and certain assumptions which may be revised as
additional information becomes available. The pro forma financial information
does not purport to represent what the Company's combined financial position or
results of operations would actually have been if such transactions had in fact
occurred when assumed and are
2
<PAGE>
not necessarily representative of the Company's financial position or results of
operations for any future period. Since U.S. Concrete and its acquired
businesses were not under common control or management for all or a portion of
the periods presented, historical combined results may not be comparable to, or
indicative of, future performance.
3
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
PRO FORMA COMBINED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts; unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------------- -------------------------------
1999 1998 1999 1998
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Sales $69,531 $71,085 $175,897 $170,639
Cost of goods sold 55,016 56,489 139,442 137,149
------------- -------------- ------------- --------------
Gross profit 14,515 14,596 36,455 33,490
Selling, general and administrative expenses 3,444 4,972 13,536 13,571
Stock compensation charge -- -- 2,880 --
Depreciation and amortization 1,483 1,461 4,384 4,384
------------- -------------- ------------- --------------
Income from operations 9,588 8,163 15,655 15,535
Interest expense, net (670) (1,088) (2,271) (3,263)
Other income, net 339 199 1,256 455
------------- -------------- ------------- --------------
Income before income tax provision 9,257 7,274 14,640 12,727
Income tax provision 3,675 2,888 6,910 5,053
------------- -------------- ------------- --------------
Net income $ 5,582 $ 4,386 $ 7,730 $ 7,674
============= ============== ============= ==============
Net income per share:
Basic $ 0.31 $ 0.24 $ 0.43 $ 0.43
============= ============== ============= ==============
Diluted $ 0.31 $ 0.24 $ 0.43 $ 0.43
============= ============== ============= ==============
Number of shares used in calculating net income
per share:
Basic 17,945 17,945 17,945 17,945
============= ============== ============= ==============
Diluted 18,036 17,945 18,018 17,945
============= ============== ============= ==============
</TABLE>
The accompanying notes are an integral part of these pro forma combined
financial statements.
4
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA COMBINED STATEMENTS OF OPERATIONS
(unaudited)
1. SHARES USED IN COMPUTING PRO FORMA NET INCOME PER SHARE
The following table summarizes the number of shares (in thousands) of common
stock used in calculating pro forma net income per share:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
---------------------------- ----------------------------
1999 1998 1999 1998
------------- ------------ ------------- ------------
<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 7,602 7,602 7,602 7,602
Shares issued to the initial stockholders and
certain management personnel of U.S. Concrete 2,853 2,853 2,853 2,853
Shares issued in the IPO 4,370 4,370 4,370 4,370
------------- ------------ ------------- ------------
Number of shares used in calculating basic net
income per share 17,945 17,945 17,945 17,945
Effect of shares issuable under stock options and
warrants based on the treasury stock method 91 -- 73 --
------------- ------------ ------------- ------------
Number of shares used in calculating diluted
net income per share 18,036 17,945 18,018 17,945
============= ============ ============= ============
</TABLE>
5
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
--------------------- ---------------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 5,994 $ 4,213
Trade accounts receivable, net 40,192 7,641
Receivables from related parties 1,658 2,712
Inventories 3,408 792
Prepaid expenses 2,333 833
Deferred tax asset 157 --
Other current assets 833 156
--------------------- ---------------------
Total current assets 54,575 16,347
--------------------- ---------------------
Property, plant and equipment, net 49,079 9,138
Goodwill, net 74,555 --
Cash surrender value of life insurance -- 1,155
Other assets 1,007 --
--------------------- ---------------------
Total assets $179,216 $26,640
===================== =====================
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 136 $ 1,006
Accounts payable and accrued liabilities 36,881 7,910
--------------------- ---------------------
Total current liabilities 37,017 8,916
--------------------- ---------------------
Long-term debt, net of current maturities 32,222 2,524
Deferred income taxes 6,704 46
--------------------- ---------------------
Total liabilities 75,943 11,486
--------------------- ---------------------
Stockholders' equity
Common stock 18 70
Additional paid-in capital 101,082 554
Retained earnings 2,173 14,530
--------------------- ---------------------
Total stockholders' equity 103,273 15,154
--------------------- ---------------------
Total liabilities and stockholders' equity $179,216 $26,640
===================== =====================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts; unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
-------------------------------- --------------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Sales $59,803 $21,482 $100,407 $47,175
Cost of goods sold 48,078 17,161 80,853 38,491
-------------- -------------- -------------- --------------
Gross profit 11,725 4,321 19,554 8,684
Selling, general and administrative expenses 2,281 1,712 5,738 3,368
Stock compensation charge -- -- 2,880 --
Depreciation and amortization 1,148 219 2,106 679
-------------- -------------- -------------- --------------
Income from operations 8,296 2,390 8,830 4,637
Interest expense, net (463) (35) (742) (12)
Other income, net 292 22 626 50
-------------- -------------- -------------- --------------
Income before income tax provision 8,125 2,377 8,714 4,675
Income tax provision 3,212 37 4,854 68
-------------- -------------- -------------- --------------
Net income $ 4,913 $ 2,340 $ 3,860 $ 4,607
============== ============== ============== ==============
Net income per share:
Basic $ 0.30 $ 0.75 $ 0.40 $ 1.48
============== ============== ============== ==============
Diluted $ 0.30 $ 0.75 $ 0.40 $ 1.48
============== ============== ============== ==============
Number of shares used in calculating net income
per share:
Basic 16,498 3,120 9,562 3,120
============== ============== ============== ==============
Diluted 16,589 3,120 9,636 3,120
============== ============== ============== ==============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
7
<PAGE>
U.S. CONCRETE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
---------------------------------------
1999 1998
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,860 $ 4,607
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 2,106 679
Net gain on sale of property, plant and equipment (217) 13
Deferred income tax provision 924 --
Change in allowance for doubtful accounts 242 16
Stock compensation charge 2,880 --
Changes in assets and liabilities, excluding effects of acquisitions:
Trade accounts receivable (9,322) (1,853)
Prepaid expenses and other current assets (1,608) 154
Accounts payable and accrued liabilities 9,108 2,961
----------------- -----------------
Net cash provided by operating activities 7,973 6,577
----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (2,847) (2,860)
Payments for acquisitions accounted for as purchases, net of cash received of
$10,078 (55,661) --
Proceeds from disposals of property, plant and equipment 2,330 14
Increase in cash surrender value of life insurance -- (106)
----------------- -----------------
Net cash used in investing activities (56,178) (2,952)
----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 32,148 1,857
Repayments of borrowings (3,501) (706)
Proceeds from issuances of common stock 32,512 --
Cash paid related to common stock issuance costs (3,459) --
Distributions to stockholders (7,714) (1,801)
----------------- -----------------
Net cash provided by (used in) financing activities 49,986 (650)
----------------- -----------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,781 2,975
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,213 1,945
----------------- -----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,994 $ 4,920
================= =================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 705 $ 262
Cash paid during the period for income taxes $ 370 $ --
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.
8
<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 an
initial public offering of its common stock and concurrently acquired six
operating businesses. From the date of its IPO through September 30, 1999, U.S.
Concrete acquired four additional operating businesses for approximately $13.2
million in cash and 1.7 million shares of common stock. U.S. Concrete intends
to acquire additional companies to expand its operations.
For financial statement presentation purposes, (1) Central Concrete Supply Co.,
Inc., one of the acquired businesses, is presented as the acquirer of the other
acquired businesses and U.S. Concrete, (2) these acquisitions are accounted for
in accordance with the purchase method of accounting and (3) the effective date
of the initial acquisitions is May 31, 1999. As used in this report, the term
"Company" means (1) Central prior to June 1, 1999 and (2) U.S. Concrete and its
consolidated subsidiaries on that date and thereafter.
Under applicable regulations of the SEC, the historical 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 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,
which U.S. Concrete's registration statement for its IPO includes.
2. SIGNIFICANT ACCOUNTING POLICIES
The Company has not added to or changed its accounting policies significantly
since December 31, 1998. For a description of these policies, see Note 2 of
Notes to Financial Statements of Central in U.S. Concrete's IPO registration
statement.
3. SUBSEQUENT BUSINESS COMBINATIONS
From October 1, 1999 through November 12, 1999, U.S. Concrete has acquired two
additional operating businesses for approximately $15.3 million in cash and
550,000 shares of common stock.
9
<PAGE>
4. SHARES USED IN COMPUTING NET INCOME (LOSS) 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 net income or loss
per share:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
---------------------------- -------------------------
1999 1998 1999 1998
------------- ------------ ---------- -----------
<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 6,155 -- 2,782 --
Shares issued to the initial stockholders and
certain management personnel of U.S. Concrete 2,853 -- 1,688 --
Shares issued in the IPO 4,370 -- 1,972 --
------------- ------------ ---------- -----------
Number of shares used in calculating basic net
income per share 16,498 3,120 9,562 3,120
Effect of shares issuable under stock options and
warrants based on the treasury stock method 91 -- 74 --
------------- ------------ ---------- -----------
Number of shares used in calculating diluted
net income per share 16,589 3,120 9,636 3,120
============= ============ ========== ===========
</TABLE>
5. LONG-TERM DEBT
A summary of long-term debt is as follows (dollars in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
-------------------- -------------------
<S> <C> <C>
Secured revolving credit facility $32,050 $ --
Notes payable to various financial institutions, secured by mixer
trucks, maturing in varying amounts through May 2003, with interest
ranging from 7.0% to 9.7% -- 2,860
Notes payable to various financial institutions, secured by various
equipment and guaranteed by stockholders, maturing in varying
amounts through September 2003, with interest ranging from 4.7% to
8.8% -- 670
Other 308 --
-------------------- -------------------
32,358 3,530
Less: current maturities (136) (1,006)
-------------------- -------------------
Long-term debt, net of current maturities $32,222 $ 2,524
==================== ===================
</TABLE>
On May 28, 1999, U.S. Concrete entered into a three-year $75 million revolving
credit facility with a group of banks. The Company may use this facility for
working capital, to finance acquisitions and for other general corporate
purposes. Availability under the facility is tied to the Company's cash flow
and liquidity. Advances bear interest, at the Company's option, at a prime rate
or LIBOR, in each case plus a margin keyed to the ratio of the Company's
indebtedness to cash flow. Commitment fees are due on any unused borrowing
capacity. The facility requires the Company to maintain financial covenants
regarding net worth, coverage ratios and additional indebtedness and prohibits
dividends by U.S. Concrete. Subsidiary guarantees and pledges of substantially
all the Company's fixed assets secure the payment of all obligations owing under
the facility.
6. INCOME TAXES
Prior to their respective acquisitions, Central and certain other acquired
businesses were S corporations and were not subject to federal income taxes.
Effective with their acquisition they became C corporations subject to those
taxes, and we have recorded an estimated deferred tax liability to provide for
the Company's estimated future income tax liability as a result of the
difference between the book and tax bases of the net assets of these
corporations. For purposes of these consolidated financial statements, federal
and previously inapplicable state income taxes have been provided for the post-
acquisition periods.
10
<PAGE>
7. SEGMENT REPORTING
SFAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" requires that companies report separately information about each
significant operating segment reviewed by the chief operating decision maker.
All segments that meet a threshold of 10% of revenues, reported profit or loss,
or combined assets are defined as significant segments. The Company currently
operates under one segment and all operations and long-lived assets are in the
United States.
11
<PAGE>
SIGNATURE
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.
Dated: February 7, 2000 /s/ MICHAEL W. HARLAN
---------------------------------
By: Michael W. Harlan
Senior Vice President --
Chief Financial Officer
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