-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ot7+zLcLN61Jxj6y6Wo1fH0HpATmx+f4sBJpjE30Q4tNBwG6eldIe4xc0R2Ilhza 7XedIXSh2FzeDJjUIoWVhQ== 0000899243-00-001343.txt : 20000516 0000899243-00-001343.hdr.sgml : 20000516 ACCESSION NUMBER: 0000899243-00-001343 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: US CONCRETE INC CENTRAL INDEX KEY: 0001073429 STANDARD INDUSTRIAL CLASSIFICATION: CONCRETE PRODUCTS, EXCEPT BLOCK & BRICK [3272] IRS NUMBER: 760588680 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-26025 FILM NUMBER: 632178 BUSINESS ADDRESS: STREET 1: 1360 POST OAK BLVD STREET 2: SUITE 800 CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 7133506000 MAIL ADDRESS: STREET 1: 1360 POST OAK BLVD STREET 2: SUITE 800 CITY: HOUSTON STATE: TX ZIP: 77056 FORMER COMPANY: FORMER CONFORMED NAME: RMX INDUSTRIES INC DATE OF NAME CHANGE: 19981113 10-Q 1 FORM 10-Q FOR QUARTER ENDED MARCH 31, 2000 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. U.S. CONCRETE, INC. AND SUBSIDIARIES INDEX
Page ---- 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
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 U.S. CONCRETE, INC. AND SUBSIDIARIES SUPPLEMENTAL COMBINED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS; UNAUDITED)
THREE MONTHS ENDED MARCH 31 ------------------------------------ 2000 1999 --------- --------- (Pro Forma) 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 ======= =======
The accompanying notes are an integral part of these supplemental combined statements of operations. 2 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:
THREE MONTHS ENDED MARCH 31 --------------------------------- 2000 1999 -------- ----------- (Pro Forma) 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 ====== ======
3 U.S. CONCRETE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
MARCH 31, DECEMBER 31, 2000 1999 --------------------- -------------------- (UNAUDITED) 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 ===================== ====================
The accompanying notes are an integral part of these condensed consolidated financial statements. 4 U.S. CONCRETE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts; unaudited)
THREE MONTHS ENDED MARCH 31 --------------------------------- 2000 1999 -------- -------- 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 ======== ========
The accompanying notes are an integral part of these condensed consolidated financial statements. 5 U.S. CONCRETE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands; unaudited)
THREE MONTHS ENDED MARCH 31 ----------------------------------- 2000 1999 ---------- --------- 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
The accompanying notes are an integral part of these condensed consolidated financial statements. 6 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:
THREE MONTHS ENDED YEAR ENDED MARCH 31, 2000 DECEMBER 31, 1999 ---------------------- --------------------- (unaudited) 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
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 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:
THREE MONTHS ENDED MARCH 31, -------------------------------- 2000 1999 ---------- ---------- (unaudited) 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 ======= ======
5. LONG-TERM DEBT A summary of long-term debt is as follows (dollars in thousands):
MARCH 31, DECEMBER 31, 2000 1999 ---------- ------------ (unaudited) 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 ======== =======
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 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.
THREE MONTHS ENDED MARCH 31 ------------------------------------------------------------------ 2000 1999 ------------------------- ------------------------------- (dollars in thousands; unaudited) 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% ======= ===== ======= =====
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 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 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.
EXHIBIT NUMBER DESCRIPTION - ----------- ------------- 2.1* -- Agreement and Plan of Reorganization dated as of March 22, 1999 by and among U.S. Concrete, OCC Acquisition Inc., Opportunity Concrete Corporation and the stockholders named therein (Form S-1 (Reg. No. 333-74855), Exhibit 2.1). 2.2* -- Agreement and Plan of Reorganization dated as of March 22, 1999 by and among U.S. Concrete, Walker's Acquisition Inc., Walker's Concrete, Inc. and the stockholders named therein (Form S-1 (Reg. No. 333- 74855), Exhibit 2.2). 2.3* -- Agreement and Plan of Reorganization dated as of March 22, 1999 by and among U.S. Concrete, Central Concrete 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).
11
EXHIBIT NUMBER DESCRIPTION - ----------- ------------- 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.
- --------------- * 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 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 EX-27.1 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 3,054 0 46,823 0 6,086 59,541 80,168 0 301,641 35,077 130,149 0 0 21 128,034 301,641 67,933 67,933 55,748 55,748 0 0 2,251 2,537 1,020 1,517 0 0 0 1,517 0.08 0.08
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