Delaware | 76-0586680 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Large accelerated filer þ | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ | Emerging growth company ¨ |
(Do not check if a smaller reporting company) |
Page No. | ||
Part I – Financial Information | ||
Item 1. | Financial Statements (Unaudited) | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II – Other Information | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 4. | ||
Item 6. | ||
September 30, 2017 | December 31, 2016 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 248,263 | $ | 75,774 | |||
Trade accounts receivable, net of allowances of $6,284 and $5,960 as of September 30, 2017, and December 31, 2016, respectively | 234,976 | 207,292 | |||||
Inventories | 45,429 | 41,979 | |||||
Other receivables | 14,080 | 8,691 | |||||
Prepaid expenses | 6,328 | 5,534 | |||||
Other current assets | 1,298 | 2,019 | |||||
Total current assets | 550,374 | 341,289 | |||||
Property, plant and equipment, net of accumulated depreciation, depletion, and amortization of $167,874 and $137,629 as of September 30, 2017, and December 31, 2016, respectively | 438,789 | 337,412 | |||||
Goodwill | 147,160 | 133,271 | |||||
Intangible assets, net | 121,385 | 130,973 | |||||
Other assets | 1,993 | 2,457 | |||||
Total assets | $ | 1,259,701 | $ | 945,402 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 123,126 | $ | 110,694 | |||
Accrued liabilities | 90,563 | 85,243 | |||||
Current maturities of long-term debt | 24,938 | 16,654 | |||||
Derivative liabilities | — | 57,415 | |||||
Total current liabilities | 238,627 | 270,006 | |||||
Long-term debt, net of current maturities | 663,480 | 432,644 | |||||
Other long-term obligations and deferred credits | 60,833 | 46,267 | |||||
Deferred income taxes | 14,970 | 7,656 | |||||
Total liabilities | 977,910 | 756,573 | |||||
Commitments and contingencies (Note 14) | |||||||
Stockholders' equity: | |||||||
Preferred stock | — | — | |||||
Common stock | 18 | 17 | |||||
Additional paid-in capital | 317,254 | 249,832 | |||||
Accumulated deficit | (10,711 | ) | (39,296 | ) | |||
Treasury stock, at cost | (24,770 | ) | (21,724 | ) | |||
Total stockholders' equity | 281,791 | 188,829 | |||||
Total liabilities and stockholders' equity | $ | 1,259,701 | $ | 945,402 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | $ | 354,628 | $ | 328,588 | $ | 994,687 | $ | 849,383 | |||||||
Cost of goods sold before depreciation, depletion and amortization | 278,995 | 253,477 | 778,328 | 674,451 | |||||||||||
Selling, general and administrative expenses | 30,056 | 25,104 | 86,073 | 71,447 | |||||||||||
Depreciation, depletion and amortization | 16,593 | 14,139 | 48,802 | 38,795 | |||||||||||
Change in value of contingent consideration | 719 | 714 | 2,047 | 2,325 | |||||||||||
Impairment of assets | 648 | — | 648 | — | |||||||||||
Loss (gain) on disposal of assets, net | (106 | ) | (1,003 | ) | (496 | ) | (1,016 | ) | |||||||
Operating income | 27,723 | 36,157 | 79,285 | 63,381 | |||||||||||
Interest expense, net | 10,552 | 7,635 | 31,062 | 19,933 | |||||||||||
Derivative loss (income) | (13,119 | ) | (21,772 | ) | 791 | (6,430 | ) | ||||||||
Loss on extinguishment of debt | 60 | — | 60 | 12,003 | |||||||||||
Other income, net | (1,287 | ) | (405 | ) | (2,591 | ) | (1,412 | ) | |||||||
Income from continuing operations before income taxes | 31,517 | 50,699 | 49,963 | 39,287 | |||||||||||
Income tax expense | 7,241 | 12,577 | 20,854 | 14,317 | |||||||||||
Income from continuing operations | 24,276 | 38,122 | 29,109 | 24,970 | |||||||||||
Loss from discontinued operations, net of taxes | (222 | ) | (166 | ) | (524 | ) | (518 | ) | |||||||
Net income | $ | 24,054 | $ | 37,956 | $ | 28,585 | $ | 24,452 | |||||||
Basic income (loss) per share: | |||||||||||||||
Income from continuing operations | $ | 1.51 | $ | 2.50 | $ | 1.85 | $ | 1.67 | |||||||
Loss from discontinued operations, net of taxes | (0.01 | ) | (0.01 | ) | (0.03 | ) | (0.04 | ) | |||||||
Net income per share – basic | $ | 1.50 | $ | 2.49 | $ | 1.82 | $ | 1.63 | |||||||
Diluted income (loss) per share: | |||||||||||||||
Income from continuing operations | $ | 1.46 | $ | 2.35 | $ | 1.75 | $ | 1.54 | |||||||
Loss from discontinued operations, net of taxes | (0.01 | ) | (0.01 | ) | (0.03 | ) | (0.03 | ) | |||||||
Net income per share – diluted | $ | 1.45 | $ | 2.34 | $ | 1.72 | $ | 1.51 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 16,028 | 15,222 | 15,745 | 14,978 | |||||||||||
Diluted | 16,651 | 16,240 | 16,633 | 16,186 |
Common Stock | ||||||||||||||||||||||
# of Shares | Par Value | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Total Equity | |||||||||||||||||
BALANCE, December 31, 2016 | 15,696 | $ | 17 | $ | 249,832 | $ | (39,296 | ) | $ | (21,724 | ) | $ | 188,829 | |||||||||
Stock-based compensation expense | — | — | 6,523 | — | — | 6,523 | ||||||||||||||||
Restricted stock vesting | 13 | — | — | — | — | — | ||||||||||||||||
Restricted stock grants, net of cancellations | 139 | — | — | — | — | — | ||||||||||||||||
Stock options exercised | 6 | — | 132 | — | — | 132 | ||||||||||||||||
Warrants exercised | 834 | 1 | 60,767 | — | — | 60,768 | ||||||||||||||||
Other treasury share purchases | (44 | ) | — | — | — | (3,046 | ) | (3,046 | ) | |||||||||||||
Net income | — | — | — | 28,585 | — | 28,585 | ||||||||||||||||
BALANCE, September 30, 2017 | 16,644 | $ | 18 | $ | 317,254 | $ | (10,711 | ) | $ | (24,770 | ) | $ | 281,791 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 28,585 | $ | 24,452 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 48,802 | 38,795 | |||||
Amortization of debt issuance costs | 1,515 | 1,431 | |||||
Amortization of discount on long-term incentive plan and other accrued interest | 530 | 445 | |||||
Amortization of premium on long-term debt | (1,163 | ) | — | ||||
Derivative loss (income) | 791 | (6,430 | ) | ||||
Change in value of contingent consideration | 2,047 | 2,325 | |||||
Net loss (gain) on disposal of assets | (496 | ) | (1,016 | ) | |||
Loss on extinguishment of debt | 60 | 12,003 | |||||
Asset impairments | 648 | — | |||||
Deferred income taxes | 6,863 | 9,772 | |||||
Provision for doubtful accounts and customer disputes | 3,518 | 1,421 | |||||
Stock-based compensation | 6,523 | 5,678 | |||||
Changes in assets and liabilities, excluding effects of acquisitions: | |||||||
Accounts receivable | (30,076 | ) | (24,969 | ) | |||
Inventories | (2,946 | ) | (4,376 | ) | |||
Prepaid expenses and other current assets | 1,565 | (1,906 | ) | ||||
Other assets and liabilities | 201 | 2,168 | |||||
Accounts payable and accrued liabilities | 17,279 | 32,497 | |||||
Net cash provided by operating activities | 84,246 | 92,290 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property, plant and equipment | (33,984 | ) | (31,041 | ) | |||
Payments for acquisitions, net of cash acquired | (56,796 | ) | (124,481 | ) | |||
Advance for note receivable | (8,063 | ) | — | ||||
Proceeds from disposals of property, plant and equipment | 1,003 | 1,920 | |||||
Proceeds from disposal of businesses | 1,305 | 375 | |||||
Net cash used in investing activities | (96,535 | ) | (153,227 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from revolver borrowings | — | 128,904 | |||||
Repayments of revolver borrowings | — | (173,904 | ) | ||||
Proceeds from issuance of debt | 211,500 | 400,000 | |||||
Repayments of debt | — | (200,000 | ) | ||||
Premium paid on early retirement of debt | — | (8,500 | ) | ||||
Proceeds from exercise of warrants and stock options | 2,695 | 166 | |||||
Payments of other long-term obligations | (7,722 | ) | (4,143 | ) | |||
Payments for other financing | (14,317 | ) | (8,880 | ) | |||
Debt issuance costs | (4,332 | ) | (7,786 | ) | |||
Other treasury share purchases | (3,046 | ) | (2,825 | ) | |||
Net cash provided by financing activities | 184,778 | 123,032 | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 172,489 | 62,095 | |||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 75,774 | 3,925 | |||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 248,263 | $ | 66,020 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Supplemental Disclosure of Cash Flow Information: | |||||||
Cash paid for interest | $ | 20,870 | $ | 11,389 | |||
Cash paid for income taxes | $ | 17,377 | $ | 2,892 | |||
Supplemental Disclosure of Non-cash Investing and Financing Activities: | |||||||
Capital expenditures funded by capital leases and promissory notes | $ | 45,517 | $ | 29,171 | |||
Settlement of accounts receivable for acquisition of a business | $ | — | $ | 1,000 |
1. | BASIS OF PRESENTATION |
2. | RECENT ACCOUNTING PRONOUNCEMENTS AND SIGNIFICANT ACCOUNTING POLICIES |
3. | ACQUISITIONS |
• | Corbett Aggregate Companies, LLC. ("Corbett") located in Quinton, New Jersey on April 7, 2017; |
• | Harbor Ready-Mix ("Harbor") located in Redwood City, California on September 29, 2017; |
• | A-1 Materials, Inc. ("A-1”) and L.C. Frey Company, Inc. ("Frey") (collectively “A-1/Frey”) located in San Carlos, California on September 29, 2017; and |
• | Action Supply Co., Inc. ("Action Supply") located in Philadelphia, Pennsylvania on September 29, 2017. |
2017 Acquisitions | |||
Accounts receivable (1) | $ | 1,126 | |
Inventory | 504 | ||
Other current assets | 40 | ||
Property, plant and equipment | 55,315 | ||
Definite-lived intangible assets | 5,884 | ||
Total assets acquired | 62,869 | ||
Current liabilities | 674 | ||
Total liabilities assumed | 674 | ||
Goodwill | 12,164 | ||
Total consideration (fair value) (2) | $ | 74,359 |
(1) | The aggregate fair value of the acquired accounts receivable approximates the aggregate gross contractual amount as of the respective acquisition dates. |
2016 Acquisitions | |||
Cash | $ | 9 | |
Accounts receivable (1) | 12,314 | ||
Inventory | 1,249 | ||
Other current assets | 68 | ||
Property, plant and equipment | 34,918 | ||
Definite-lived intangible assets | 47,144 | ||
Total assets acquired | 95,702 | ||
Current liabilities | 7,055 | ||
Other long-term liabilities | 3,713 | ||
Total liabilities assumed | 10,768 | ||
Goodwill | 60,583 | ||
Total consideration (fair value) (2) | $ | 145,517 |
(1) | The aggregate fair value of the acquired accounts receivable approximates the aggregate gross contractual amount as of the respective acquisition dates. |
(2) | Deferred payments included at fair value as of the respective acquisition dates. |
Weighted Average Amortization Period (In Years) | Fair Value At Acquisition Date | ||||
Customer relationships | 6.00 | $ | 37,764 | ||
Non-compete agreements | 5.00 | 5,807 | |||
Leasehold interests | 5.00 | 4,955 | |||
Trade names | 4.95 | 4,118 | |||
Favorable Contract | 3.67 | 384 | |||
Total | $ | 53,028 |
Year Ending December 31, | |||
2017 (remainder of the year) | $ | 2,350 | |
2018 | 9,398 | ||
2019 | 9,133 | ||
2020 | 8,604 | ||
2021 | 7,679 | ||
Thereafter | 5,427 | ||
Total | $ | 42,591 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | $ | 361,262 | $ | 349,431 | $ | 1,026,865 | $ | 972,564 | |||||||
Net income (loss) | $ | 24,813 | $ | 40,128 | $ | 31,869 | $ | 31,397 | |||||||
Net income per share, basic | $ | 1.55 | $ | 2.64 | $ | 2.02 | $ | 2.10 | |||||||
Net income per share, diluted | $ | 1.49 | $ | 2.47 | $ | 1.92 | $ | 1.94 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Decrease (increase) in intangible amortization expense | $ | (203 | ) | $ | (1,655 | ) | $ | (538 | ) | $ | (6,254 | ) | |||
Exclusion of buyer transaction costs | $ | 334 | $ | 584 | $ | 867 | $ | 1,395 | |||||||
Decrease (increase) in interest expense | $ | 54 | $ | (9 | ) | $ | 224 | $ | (193 | ) | |||||
Decrease (increase) in income tax expense | $ | 279 | $ | 969 | $ | (607 | ) | $ | (4,725 | ) |
4. | DISCONTINUED OPERATIONS |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | $ | — | $ | 48 | $ | — | $ | 48 | |||||||
Operating expenses | 363 | 316 | 858 | 887 | |||||||||||
Loss from discontinued operations, before income taxes | (363 | ) | (268 | ) | (858 | ) | (839 | ) | |||||||
Income tax benefit | (141 | ) | (102 | ) | (334 | ) | (321 | ) | |||||||
Loss from discontinued operations, net of taxes | $ | (222 | ) | $ | (166 | ) | $ | (524 | ) | $ | (518 | ) |
5. | INVENTORIES |
September 30, 2017 | December 31, 2016 | ||||||
Raw materials | $ | 41,486 | $ | 38,752 | |||
Building materials for resale | 2,263 | 1,923 | |||||
Other | 1,680 | 1,304 | |||||
Total inventories | $ | 45,429 | $ | 41,979 |
Ready-Mixed Concrete Segment | Aggregate Products Segment | Other Non-Reportable Segments | Total | |||||||||||||
Balance at December 31, 2016 | $ | 127,515 | $ | 2,494 | $ | 3,262 | $ | 133,271 | ||||||||
2017 acquisitions (1) | 12,164 | — | — | 12,164 | ||||||||||||
Adjustment for prior period business combination(2) | 549 | 1,176 | — | 1,725 | ||||||||||||
Balance at September 30, 2017 | $ | 140,228 | $ | 3,670 | $ | 3,262 | $ | 147,160 |
(1) | The measurement period adjustments for the 2017 acquisitions recorded during the nine months ended September 30, 2017, primarily included the impact of recording a $0.9 million definite-lived intangible asset. (See Note 3) |
(2) | Reflects a $1.2 million correction to the change in the acquisition accounting for a 2015 acquisition and a $0.5 million adjustment related to determination of the conclusion of tax attributes as of the acquisition date for a 2016 acquisition. The correction to the 2015 acquisition accounting was recorded in the current period as it was not material to the prior periods and had no impact on the Condensed Consolidated Statements of Operations of any period. |
As of September 30, 2017 | ||||||||||||||
Gross | Accumulated Amortization | Net | Weighted Average Remaining Life (In Years) | |||||||||||
Definite-lived intangible assets | ||||||||||||||
Customer relationships | $ | 85,993 | $ | (25,041 | ) | $ | 60,952 | 5.30 | ||||||
Trade names | 45,756 | (7,353 | ) | 38,403 | 19.62 | |||||||||
Non-competes | 17,375 | (7,673 | ) | 9,702 | 3.24 | |||||||||
Leasehold interests | 12,480 | (2,956 | ) | 9,524 | 6.85 | |||||||||
Favorable contracts | 4,034 | (2,708 | ) | 1,326 | 1.54 | |||||||||
Total definite-lived intangible assets | 165,638 | (45,731 | ) | 119,907 | 9.79 | |||||||||
Indefinite-lived intangible assets | ||||||||||||||
Land rights(1) | 1,478 | — | 1,478 | |||||||||||
Total purchased intangible assets | $ | 167,116 | $ | (45,731 | ) | $ | 121,385 |
(1) | Land rights acquired in a prior year acquisition will be reclassified to property, plant, and equipment upon the division of certain shared properties and settlement of the associated deferred payment. |
As of December 31, 2016 | ||||||||||||||
Gross | Accumulated Amortization | Net | Weighted Average Remaining Life (In Years) | |||||||||||
Definite-lived intangible assets | ||||||||||||||
Customer relationships | $ | 82,174 | $ | (16,414 | ) | $ | 65,760 | 5.97 | ||||||
Trade names | 44,456 | (4,948 | ) | 39,508 | 20.20 | |||||||||
Non-competes | 16,862 | (5,160 | ) | 11,702 | 3.81 | |||||||||
Leasehold interests | 12,480 | (1,693 | ) | 10,787 | 7.46 | |||||||||
Favorable contract | 3,650 | (1,912 | ) | 1,738 | 1.67 | |||||||||
Total definite-lived intangible assets | 159,622 | (30,127 | ) | 129,495 | 10.19 | |||||||||
Indefinite-lived intangible assets | ||||||||||||||
Land rights(1) | 1,478 | — | 1,478 | |||||||||||
Total purchased intangible assets | $ | 161,100 | $ | (30,127 | ) | $ | 130,973 |
(1) | Land rights acquired in a prior year acquisition will be reclassified to property, plant, and equipment upon the division of certain shared properties and settlement of the associated deferred payment. |
Year Ending December 31, | |||
2017 (remainder of the year) | $ | 5,362 | |
2018 | 21,018 | ||
2019 | 19,176 | ||
2020 | 16,985 | ||
2021 | 15,561 | ||
Thereafter | 41,805 | ||
Total | $ | 119,907 |
7. | ACCRUED LIABILITIES |
September 30, 2017 | December 31, 2016 | ||||||
Accrued materials | $ | 17,827 | $ | 20,349 | |||
Accrued compensation and benefits | 16,724 | 16,553 | |||||
Accrued insurance reserves | 16,409 | 15,206 | |||||
Accrued interest | 12,871 | 2,217 | |||||
Accrued property, sales and other taxes | 8,811 | 11,829 | |||||
Deferred consideration | 6,448 | 9,227 | |||||
Contingent consideration, current portion | 2,322 | 2,418 | |||||
Deferred rent | 2,270 | 2,232 | |||||
Other | 6,881 | 5,212 | |||||
Total accrued liabilities | $ | 90,563 | $ | 85,243 |
8. | DEBT |
September 30, 2017 | December 31, 2016 | ||||||
Senior unsecured notes due 2024 and unamortized premium(1) | $ | 610,337 | $ | 400,000 | |||
Senior secured credit facility | — | — | |||||
Capital leases | 62,490 | 37,860 | |||||
Other financing | 26,817 | 20,248 | |||||
Debt issuance costs | (11,226 | ) | (8,810 | ) | |||
Total debt | 688,418 | 449,298 | |||||
Less: current maturities | (24,938 | ) | (16,654 | ) | |||
Long-term debt, net of current maturities | $ | 663,480 | $ | 432,644 |
(1) | The effective interest rates for these notes as of September 30, 2017, and December 31, 2016, were 6.56% and 6.62%, respectively. |
• | incur additional debt or issue disqualified stock or preferred stock; |
• | pay dividends or make other distributions, repurchase or redeem our stock or subordinated indebtedness or make certain investments; |
• | sell assets and issue capital stock of our restricted subsidiaries; |
• | incur liens; |
• | allow to exist certain restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us; |
• | enter into certain transactions with affiliates; |
• | consolidate, merge or sell all or substantially all of our assets; and |
• | designate our subsidiaries as unrestricted subsidiaries. |
9. | WARRANTS |
10. | DERIVATIVES |
Fair Value | ||||||||||
Derivative Instruments Not Designated As Hedging Instruments Under ASC 815 | Balance Sheet Classification | September 30, 2017 | December 31, 2016 | |||||||
Warrants | Derivative liabilities | $ | — | $ | 57,415 |
Three Months Ended | ||||||||||
Derivative Instruments Not Designated As Hedging Instruments Under ASC 815 | Classification in Statement of Operations | September 30, 2017 | September 30, 2016 | |||||||
Warrants | Derivative loss (income) | $ | (13,119 | ) | $ | (21,772 | ) |
Nine Months Ended | ||||||||||
Derivative Instruments Not Designated As Hedging Instruments Under ASC 815 | Classification in Statement of Operations | September 30, 2017 | September 30, 2016 | |||||||
Warrants | Derivative loss (income) | $ | 791 | $ | (6,430 | ) |
Number of Shares | ||||||
Derivative Instruments Not Designated As Hedging Instruments Under ASC 815 | September 30, 2017 | December 31, 2016 | ||||
Warrants | — | 1,395 |
11. | FAIR VALUE DISCLOSURES |
September 30, 2017 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Contingent consideration, including current portion (1) (2) (3) (4) (5) | $ | 52,554 | $ | — | $ | — | $ | 52,554 | |||||||
$ | 52,554 | $ | — | $ | — | $ | 52,554 |
December 31, 2016 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Derivative – Warrants | $ | 57,415 | $ | — | $ | 57,415 | $ | — | |||||||
Contingent consideration, including current portion (1) (2) (4) (5) (6) | 32,212 | — | — | 32,212 | |||||||||||
$ | 89,627 | $ | — | $ | 57,415 | $ | 32,212 |
(1) | The current portion of contingent consideration is included in accrued liabilities in our condensed consolidated balance sheets. The long-term portion of contingent consideration is included in other long-term obligations and deferred credits in our condensed consolidated balance sheets. |
(2) | Includes the fair value of the contingent consideration associated with the 2015 acquisition of Ferrara Bros. Building Materials Corp. ("Ferrara Bros. Contingent Consideration"). The fair value was determined based on the expected vesting of incentive awards granted to the former owners at acquisition based on probability-weighted assumptions related to the achievement of certain annual EBITDA thresholds, using a discount rate of 8.75% as of both September 30, 2017, and December 31, 2016. The fair value of the Ferrara Bros. Contingent Consideration was $27.4 million and $26.3 million as of September 30, 2017, and December 31, 2016, respectively. The Ferrara Bros. Contingent Consideration payments were capped at $35.0 million over a four-year period beginning in 2017. |
(3) | Includes the fair value of the contingent consideration associated with the 2017 acquisition of certain assets of Corbett Aggregates Company, LLC ("Corbett Contingent Consideration"). The fair value was determined based on the expected consideration that will be due to the former owner related to the achievement of obtaining permits for mining all available reserves and was based on the probability-weighted assumptions, using a discount rate of 5.0% as of September 30, 2017. The fair value of the Corbett Contingent Consideration was $20.8 million as of September 30, 2017. The Corbett Contingent Consideration payment is capped at $23.0 million and not payable before a two-year minimum period from the acquisition date. |
(4) | Includes the fair value of the earn-out payments associated with the 2015 acquisition of Right Away Redy Mix, Inc. (the "Right Away Earn-out"). The fair value was determined based on expected payouts that will be due to the former owners based on probability-weighted assumptions related to the achievement of annual sales volume milestones, using a discount rate of 8.25% and 8.50% as of September 30, 2017, and December 31, 2016, respectively. The fair value of the Right Away Earn-out was $3.9 million as of both September 30, 2017, and December 31, 2016. The remaining Right Away Earn-out payments were capped at $4.3 million over a four-year period and $5.0 million over a five-year period as of September 30, 2017, and December 31, 2016, respectively. |
(5) | Includes the fair value of the earn-out payments associated with the 2015 acquisition of DuBrook Concrete, Inc. ("DuBrook Earn-out"). The fair value was determined based on the expected payouts that will be due to the former owners based on probability-weighted assumptions related to the achievement of sales volume milestones, using a discount rate of 15.75% as of both September 30, 2017, and December 31, 2016. The fair value of the DuBrook Earn-out was $0.5 million and $0.6 million as of September 30, 2017, and December 31, 2016, respectively. The DuBrook Earn-out payments are not capped; however, we do not expect total payments to be in excess of $0.5 million over a two-year period and $0.7 million over a three-year period as of September 30, 2017, and December 31, 2016, respectively. |
(6) | Includes the fair value of the earn-out payments associated with the 2012 acquisition of Bode Gravel Co. and Bode Concrete LLC ("Bode Earn-out"). The fair value was determined based on expected payouts that will be due to the former owners based on the achievement of certain incremental sales volume milestones, using a contractual discount rate of 7.0%. These payments were capped at a fair value of $1.4 million as of December 31, 2016. The final Bode Earn-out payment was made in January 2017. |
Contingent Consideration | |||
Balance at December 31, 2016 | $ | 32,212 | |
Acquisitions (1) | 20,621 | ||
Total losses included in earnings (2) | 2,047 | ||
Payment on contingent consideration | (2,326 | ) | |
Balance at September 30, 2017 | $ | 52,554 |
(1) | Represents the fair value of the contingent consideration associated with the Corbett acquisition as of the acquisition date. |
(2) | Represents the net loss on the change in valuation of contingent consideration, which is included in the line item of the same name in our condensed consolidated statements of operations. |
12. | INCOME TAXES |
13. | NET EARNINGS (LOSS) PER SHARE |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Numerator: | |||||||||||||||
Income from continuing operations | $ | 24,276 | $ | 38,122 | $ | 29,109 | $ | 24,970 | |||||||
Loss from discontinued operations, net of taxes | (222 | ) | (166 | ) | (524 | ) | (518 | ) | |||||||
Numerator for diluted earnings per share | $ | 24,054 | $ | 37,956 | $ | 28,585 | $ | 24,452 | |||||||
Denominator: | |||||||||||||||
Basic weighted average common shares outstanding | 16,028 | 15,222 | 15,745 | 14,978 | |||||||||||
Restricted stock awards and restricted stock units | 84 | 67 | 112 | 84 | |||||||||||
Warrants | 524 | 939 | 760 | 1,111 | |||||||||||
Stock options | 15 | 12 | 16 | 13 | |||||||||||
Denominator for diluted earnings per share | 16,651 | 16,240 | 16,633 | 16,186 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
Potentially dilutive shares: | |||||||||||
Unvested restricted stock awards and restricted stock units | 60 | 35 | 62 | 35 | |||||||
Total potentially dilutive shares | 60 | 35 | 62 | 35 |
14. | COMMITMENTS AND CONTINGENCIES |
15. | SEGMENT INFORMATION |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue: | ||||||||||||||||
Ready-mixed concrete | ||||||||||||||||
Sales to external customers | $ | 323,567 | $ | 297,858 | $ | 909,145 | $ | 770,479 | ||||||||
Aggregate products | ||||||||||||||||
Sales to external customers | 10,972 | 12,289 | 32,305 | 30,756 | ||||||||||||
Intersegment sales | 9,987 | 9,839 | 29,244 | 25,641 | ||||||||||||
Total aggregate products | 20,959 | 22,128 | 61,549 | 56,397 | ||||||||||||
Total reportable segment revenue | 344,526 | 319,986 | 970,694 | 826,876 | ||||||||||||
Other products and eliminations | 10,102 | 8,602 | 23,993 | 22,507 | ||||||||||||
Total revenue | $ | 354,628 | $ | 328,588 | $ | 994,687 | $ | 849,383 | ||||||||
Reportable Segment Adjusted EBITDA: | ||||||||||||||||
Ready-mixed concrete | $ | 53,627 | $ | 51,394 | $ | 144,777 | $ | 111,809 | ||||||||
Aggregate products | 6,218 | 7,005 | 18,889 | 15,080 | ||||||||||||
Total reportable segment Adjusted EBITDA | $ | 59,845 | $ | 58,399 | $ | 163,666 | $ | 126,889 | ||||||||
Reconciliation of Total Reportable Segment Adjusted EBITDA to Income (Loss) From Continuing Operations: | ||||||||||||||||
Total reportable segment Adjusted EBITDA | $ | 59,845 | $ | 58,399 | $ | 163,666 | $ | 126,889 | ||||||||
Other products and eliminations from operations | 3,315 | 2,472 | 9,338 | 6,704 | ||||||||||||
Corporate overhead | (14,051 | ) | (10,628 | ) | (39,757 | ) | (31,150 | ) | ||||||||
Depreciation, depletion and amortization for reportable segments | (15,441 | ) | (13,036 | ) | (45,586 | ) | (35,630 | ) | ||||||||
Hurricane-related losses for reportable segments | (1,854 | ) | — | (1,854 | ) | — | ||||||||||
Quarry dredge costs for specific event for reportable segment | (2,175 | ) | — | (2,175 | ) | — | ||||||||||
Interest expense, net | (10,552 | ) | (7,635 | ) | (31,062 | ) | (19,933 | ) | ||||||||
Corporate loss on early extinguishment of debt | (60 | ) | — | (60 | ) | (12,003 | ) | |||||||||
Corporate derivative income (loss) | 13,119 | 21,772 | (791 | ) | 6,430 | |||||||||||
Change in value of contingent consideration for reportable segments | (719 | ) | (714 | ) | (2,047 | ) | (2,325 | ) | ||||||||
Corporate, other products and eliminations other income, net | 90 | 69 | 291 | 305 | ||||||||||||
Income from continuing operations before income taxes | 31,517 | 50,699 | 49,963 | 39,287 | ||||||||||||
Income tax expense | (7,241 | ) | (12,577 | ) | (20,854 | ) | (14,317 | ) | ||||||||
Income from continuing operations | $ | 24,276 | $ | 38,122 | $ | 29,109 | $ | 24,970 | ||||||||
Capital Expenditures: | ||||||||||||||||
Ready-mixed concrete | $ | 5,006 | $ | 5,807 | $ | 17,329 | $ | 17,978 | ||||||||
Aggregate products | 10,092 | 1,676 | 15,769 | 9,689 | ||||||||||||
Other products and corporate | 194 | 625 | 886 | 3,374 | ||||||||||||
Total capital expenditures | $ | 15,292 | $ | 8,108 | $ | 33,984 | $ | 31,041 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue by Product: | ||||||||||||||||
Ready-mixed concrete | $ | 323,567 | $ | 297,858 | $ | 909,145 | $ | 770,479 | ||||||||
Aggregate products | 10,972 | 12,289 | 32,305 | 30,756 | ||||||||||||
Aggregates distribution | 8,423 | 7,381 | 21,376 | 18,662 | ||||||||||||
Building materials | 7,263 | 5,577 | 18,007 | 14,823 | ||||||||||||
Lime | 2,240 | 3,479 | 7,380 | 7,828 | ||||||||||||
Hauling | 1,465 | 1,320 | 4,066 | 4,301 | ||||||||||||
Other | 698 | 684 | 2,408 | 2,534 | ||||||||||||
Total revenue | $ | 354,628 | $ | 328,588 | $ | 994,687 | $ | 849,383 |
As of September 30, 2017 | As of December 31, 2016 | |||||||
Identifiable Property, Plant And Equipment Assets: | ||||||||
Ready-mixed concrete | $ | 268,174 | $ | 229,077 | ||||
Aggregate products | 146,259 | 87,064 | ||||||
Other products and corporate | 24,356 | 21,271 | ||||||
Total identifiable assets | $ | 438,789 | $ | 337,412 |
16. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION |
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations and Reclassifications | U.S. Concrete Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | — | 247,873 | $ | 390 | $ | — | $ | 248,263 | |||||||||||
Trade accounts receivable, net | — | 234,671 | 305 | — | 234,976 | |||||||||||||||
Inventories | — | 42,084 | 3,345 | — | 45,429 | |||||||||||||||
Other receivables | 8,063 | 5,946 | 71 | — | 14,080 | |||||||||||||||
Prepaid expenses | — | 6,301 | 27 | — | 6,328 | |||||||||||||||
Other current assets | 11,397 | 1,282 | 16 | (11,397 | ) | 1,298 | ||||||||||||||
Total current assets | 19,460 | 538,157 | 4,154 | (11,397 | ) | 550,374 | ||||||||||||||
Property, plant and equipment, net | — | 414,760 | 24,029 | — | 438,789 | |||||||||||||||
Goodwill | — | 141,407 | 5,753 | — | 147,160 | |||||||||||||||
Intangible assets, net | — | 118,676 | 2,709 | — | 121,385 | |||||||||||||||
Deferred income taxes | — | — | 558 | (558 | ) | — | ||||||||||||||
Investment in subsidiaries | 417,747 | — | — | (417,747 | ) | — | ||||||||||||||
Intercompany receivables | 463,096 | — | — | (463,096 | ) | — | ||||||||||||||
Other assets | — | 1,946 | 47 | — | 1,993 | |||||||||||||||
Total assets | $ | 900,303 | $ | 1,214,946 | $ | 37,250 | $ | (892,798 | ) | $ | 1,259,701 | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 116 | $ | 122,260 | $ | 750 | $ | — | $ | 123,126 | ||||||||||
Accrued liabilities | 17,447 | 82,624 | 1,889 | (11,397 | ) | 90,563 | ||||||||||||||
Current maturities of long-term debt | — | 24,841 | 97 | — | 24,938 | |||||||||||||||
Total current liabilities | 17,563 | 229,725 | 2,736 | (11,397 | ) | 238,627 | ||||||||||||||
Long-term debt, net of current maturities | 599,112 | 64,064 | 304 | — | 663,480 | |||||||||||||||
Other long-term obligations and deferred credits | 1,835 | 58,172 | 826 | — | 60,833 | |||||||||||||||
Deferred income taxes | — | 15,528 | — | (558 | ) | 14,970 | ||||||||||||||
Intercompany payables | — | 454,154 | 8,942 | (463,096 | ) | — | ||||||||||||||
Total liabilities | 618,510 | 821,643 | 12,808 | (475,051 | ) | 977,910 | ||||||||||||||
Total stockholders' equity | 281,793 | 393,303 | 24,442 | (417,747 | ) | 281,791 | ||||||||||||||
Total liabilities and stockholders' equity | $ | 900,303 | $ | 1,214,946 | $ | 37,250 | $ | (892,798 | ) | $ | 1,259,701 |
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations and Reclassifications | U.S. Concrete Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 75,576 | $ | 198 | $ | — | $ | 75,774 | ||||||||||
Trade accounts receivable, net | — | 206,426 | 866 | — | 207,292 | |||||||||||||||
Inventories | — | 38,856 | 3,123 | — | 41,979 | |||||||||||||||
Prepaid expenses | — | 5,516 | 18 | — | 5,534 | |||||||||||||||
Other receivables | 1,200 | 7,491 | — | — | 8,691 | |||||||||||||||
Other current assets | 39,239 | 2,004 | 15 | (39,239 | ) | 2,019 | ||||||||||||||
Total current assets | 40,439 | 335,869 | 4,220 | (39,239 | ) | 341,289 | ||||||||||||||
Property, plant and equipment, net | — | 314,332 | 23,080 | — | 337,412 | |||||||||||||||
Goodwill | — | 127,518 | 5,753 | — | 133,271 | |||||||||||||||
Intangible assets, net | — | 127,798 | 3,175 | — | 130,973 | |||||||||||||||
Deferred income taxes | — | — | 561 | (561 | ) | — | ||||||||||||||
Investment in subsidiaries | 368,726 | — | — | (368,726 | ) | — | ||||||||||||||
Intercompany receivables | 239,776 | — | — | (239,776 | ) | — | ||||||||||||||
Other assets | — | 2,410 | 47 | — | 2,457 | |||||||||||||||
Total assets | $ | 648,941 | $ | 907,927 | $ | 36,836 | $ | (648,302 | ) | $ | 945,402 | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 458 | $ | 108,803 | $ | 1,433 | $ | — | $ | 110,694 | ||||||||||
Accrued liabilities | 5,365 | 117,104 | 2,013 | (39,239 | ) | 85,243 | ||||||||||||||
Current maturities of long-term debt | — | 16,654 | — | — | 16,654 | |||||||||||||||
Derivative liabilities | 57,415 | — | — | — | 57,415 | |||||||||||||||
Total current liabilities | 63,238 | 242,561 | 3,446 | (39,239 | ) | 270,006 | ||||||||||||||
Long-term debt, net of current maturities | 391,190 | 41,454 | — | — | 432,644 | |||||||||||||||
Other long-term obligations and deferred credits | 5,684 | 39,613 | 970 | — | 46,267 | |||||||||||||||
Deferred income taxes | — | 8,217 | — | (561 | ) | 7,656 | ||||||||||||||
Intercompany payables | — | 233,319 | 6,457 | (239,776 | ) | — | ||||||||||||||
Total liabilities | 460,112 | 565,164 | 10,873 | (279,576 | ) | 756,573 | ||||||||||||||
Total stockholders' equity | 188,829 | 342,763 | 25,963 | (368,726 | ) | 188,829 | ||||||||||||||
Total liabilities and stockholders' equity | $ | 648,941 | $ | 907,927 | $ | 36,836 | $ | (648,302 | ) | $ | 945,402 | |||||||||
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations and Reclassifications | U.S. Concrete Consolidated | ||||||||||||||||
Revenue | $ | — | $ | 351,005 | $ | 3,623 | $ | — | $ | 354,628 | ||||||||||
Cost of goods sold before depreciation, depletion and amortization | — | 275,581 | 3,414 | — | 278,995 | |||||||||||||||
Selling, general and administrative expenses | — | 28,630 | 1,426 | — | 30,056 | |||||||||||||||
Depreciation, depletion and amortization | — | 16,028 | 565 | — | 16,593 | |||||||||||||||
Change in value of contingent consideration | 389 | 330 | — | — | 719 | |||||||||||||||
Impairment of assets | — | — | 648 | — | 648 | |||||||||||||||
Loss (gain) on disposal of assets | — | (106 | ) | — | — | (106 | ) | |||||||||||||
Operating income (loss) | (389 | ) | 30,542 | (2,430 | ) | — | 27,723 | |||||||||||||
Interest expense, net | 9,977 | 574 | 1 | — | 10,552 | |||||||||||||||
Derivative loss (income) | (13,119 | ) | — | — | — | (13,119 | ) | |||||||||||||
Loss on extinguishment of debt | 60 | — | — | — | 60 | |||||||||||||||
Other (income) expense, net | — | (654 | ) | (633 | ) | — | (1,287 | ) | ||||||||||||
Income (loss) from continuing operations before income taxes and equity in earnings of subsidiaries | 2,693 | 30,622 | (1,798 | ) | — | 31,517 | ||||||||||||||
Income tax expense (benefit) | (3,930 | ) | 11,240 | (69 | ) | — | 7,241 | |||||||||||||
Income (loss) from continuing operations, net of taxes and before equity in earnings of subsidiaries | 6,623 | 19,382 | (1,729 | ) | — | 24,276 | ||||||||||||||
Loss from discontinued operations, net of taxes and before equity in earnings of subsidiaries | — | (222 | ) | — | — | (222 | ) | |||||||||||||
Income (loss), net of taxes and before equity in earnings of subsidiaries | 6,623 | 19,160 | (1,729 | ) | — | 24,054 | ||||||||||||||
Equity in earnings of subsidiaries | 17,431 | — | — | (17,431 | ) | — | ||||||||||||||
Net income (loss) | $ | 24,054 | $ | 19,160 | $ | (1,729 | ) | $ | (17,431 | ) | $ | 24,054 |
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations and Reclassifications | U.S. Concrete Consolidated | ||||||||||||||||
Revenue | $ | — | $ | 323,406 | $ | 5,182 | $ | — | $ | 328,588 | ||||||||||
Cost of goods sold before depreciation, depletion and amortization | — | 249,185 | 4,292 | — | 253,477 | |||||||||||||||
Selling, general and administrative expenses | — | 24,438 | 666 | — | 25,104 | |||||||||||||||
Depreciation, depletion and amortization | — | 13,529 | 610 | — | 14,139 | |||||||||||||||
Change in value of contingent consideration | 131 | 583 | — | — | 714 | |||||||||||||||
Loss (gain) on disposal of assets | — | (1,003 | ) | — | — | (1,003 | ) | |||||||||||||
Operating income (loss) | (131 | ) | 36,674 | (386 | ) | — | 36,157 | |||||||||||||
Interest expense, net | 7,105 | 526 | 4 | — | 7,635 | |||||||||||||||
Derivative loss (income) | (21,772 | ) | — | — | — | (21,772 | ) | |||||||||||||
Other (income) expense, net | — | (333 | ) | (72 | ) | — | (405 | ) | ||||||||||||
Income (loss) from continuing operations, net of taxes and before income taxes and equity in earnings of subsidiaries | 14,536 | 36,481 | (318 | ) | — | 50,699 | ||||||||||||||
Income tax expense (benefit) | (3,219 | ) | 16,869 | (1,073 | ) | — | 12,577 | |||||||||||||
Income (loss) from continuing operations, net of taxes and before equity in earnings of subsidiaries | 17,755 | 19,612 | 755 | — | 38,122 | |||||||||||||||
Loss from discontinued operations, net of taxes and before equity in earnings of subsidiaries | — | (166 | ) | — | — | (166 | ) | |||||||||||||
Income (loss), net of taxes and before equity in earnings of subsidiaries | 17,755 | 19,446 | 755 | — | 37,956 | |||||||||||||||
Equity in earnings of subsidiaries | 20,201 | — | — | (20,201 | ) | — | ||||||||||||||
Net income (loss) | $ | 37,956 | $ | 19,446 | $ | 755 | $ | (20,201 | ) | $ | 37,956 |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2017 (in thousands) | ||||||||||||||||||||
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations and Reclassifications | U.S. Concrete Consolidated | ||||||||||||||||
Revenue | $ | — | $ | 980,496 | $ | 14,191 | $ | — | $ | 994,687 | ||||||||||
Cost of goods sold before depreciation, depletion and amortization | — | 766,605 | 11,723 | — | 778,328 | |||||||||||||||
Selling, general and administrative expenses | — | 83,285 | 2,788 | — | 86,073 | |||||||||||||||
Depreciation, depletion and amortization | — | 46,957 | 1,845 | — | 48,802 | |||||||||||||||
Change in value of contingent consideration | 669 | 1,378 | — | — | 2,047 | |||||||||||||||
Impairment of assets | — | — | 648 | — | 648 | |||||||||||||||
Loss (gain) on disposal or sale of assets | — | (498 | ) | 2 | — | (496 | ) | |||||||||||||
Operating income (loss) | (669 | ) | 82,769 | (2,815 | ) | — | 79,285 | |||||||||||||
Interest expense, net | 29,665 | 1,396 | 1 | — | 31,062 | |||||||||||||||
Derivative loss (income) | 791 | — | — | — | 791 | |||||||||||||||
Loss on extinguishment of debt | 60 | — | — | 60 | ||||||||||||||||
Other (income) expense, net | — | (2,027 | ) | (564 | ) | — | (2,591 | ) | ||||||||||||
Income (loss) from continuing operations, net of taxes and before income taxes and equity in earnings of subsidiaries | (31,185 | ) | 83,400 | (2,252 | ) | — | 49,963 | |||||||||||||
Income tax (benefit) expense | (11,397 | ) | 32,337 | (86 | ) | — | 20,854 | |||||||||||||
Income (loss) from continuing operations, net of taxes and before equity in earnings of subsidiaries | (19,788 | ) | 51,063 | (2,166 | ) | — | 29,109 | |||||||||||||
Loss from discontinued operations, net of taxes and before equity in earnings of subsidiaries | — | (524 | ) | — | — | (524 | ) | |||||||||||||
Income (loss), net of taxes and before equity in earnings of subsidiaries | (19,788 | ) | 50,539 | (2,166 | ) | — | 28,585 | |||||||||||||
Equity in earnings of subsidiaries | 48,373 | — | — | (48,373 | ) | — | ||||||||||||||
Net income (loss) | $ | 28,585 | $ | 50,539 | $ | (2,166 | ) | $ | (48,373 | ) | $ | 28,585 |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2016 (in thousands) | ||||||||||||||||||||
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations and Reclassifications | U.S. Concrete Consolidated | ||||||||||||||||
Revenue | $ | — | $ | 833,589 | $ | 15,794 | $ | — | $ | 849,383 | ||||||||||
Cost of goods sold before depreciation, depletion and amortization | — | 660,889 | 13,562 | — | 674,451 | |||||||||||||||
Selling, general and administrative expenses | — | 69,760 | 1,687 | — | 71,447 | |||||||||||||||
Depreciation, depletion and amortization | — | 36,709 | 2,086 | — | 38,795 | |||||||||||||||
Change in value of contingent consideration | 315 | 2,010 | — | — | 2,325 | |||||||||||||||
Loss (gain) on disposal or sale of assets | — | (1,016 | ) | — | — | (1,016 | ) | |||||||||||||
Operating income (loss) | (315 | ) | 65,237 | (1,541 | ) | — | 63,381 | |||||||||||||
Interest expense, net | 18,729 | 1,192 | 12 | — | 19,933 | |||||||||||||||
Derivative loss (income) | (6,430 | ) | — | — | — | (6,430 | ) | |||||||||||||
Loss on extinguishment of debt | 12,003 | — | — | 12,003 | ||||||||||||||||
Other (income) expense, net | — | (1,357 | ) | (55 | ) | — | (1,412 | ) | ||||||||||||
Income (loss) from continuing operations, net of taxes and before income taxes and equity in earnings of subsidiaries | (24,617 | ) | 65,402 | (1,498 | ) | — | 39,287 | |||||||||||||
Income tax expense (benefit) | (12,447 | ) | 28,449 | (1,685 | ) | — | 14,317 | |||||||||||||
Income (loss) from continuing operations, net of taxes and before equity in earnings of subsidiaries | (12,170 | ) | 36,953 | 187 | — | 24,970 | ||||||||||||||
Loss from discontinued operations, net of taxes and before equity in earnings of subsidiaries | — | (518 | ) | — | — | (518 | ) | |||||||||||||
Income (loss), net of taxes and before equity in earnings of subsidiaries | (12,170 | ) | 36,435 | 187 | — | 24,452 | ||||||||||||||
Equity in earnings of subsidiaries | 36,622 | — | — | (36,622 | ) | — | ||||||||||||||
Net income (loss) | $ | 24,452 | $ | 36,435 | $ | 187 | $ | (36,622 | ) | $ | 24,452 |
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | U.S. Concrete Consolidated | ||||||||||||||||
Net cash provided by operating activities | $ | (905 | ) | $ | 95,217 | $ | 363 | $ | (10,429 | ) | $ | 84,246 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Purchases of property, plant and equipment | — | (31,416 | ) | (2,568 | ) | — | (33,984 | ) | ||||||||||||
Payments for acquisitions, net of cash acquired | 469 | (57,265 | ) | — | — | (56,796 | ) | |||||||||||||
Proceeds from disposals of property, plant and equipment | — | 1,001 | 2 | — | 1,003 | |||||||||||||||
Proceeds from disposals of businesses | — | 1,305 | — | — | 1,305 | |||||||||||||||
Investment in subsidiaries | (646 | ) | — | — | 646 | — | ||||||||||||||
Advance for note receivable | (8,063 | ) | — | — | — | (8,063 | ) | |||||||||||||
Net cash (used in) provided by investing activities | (8,240 | ) | (86,375 | ) | (2,566 | ) | 646 | (96,535 | ) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||||||
Proceeds from issuance of debt | 211,500 | — | — | — | 211,500 | |||||||||||||||
Proceeds from exercise of stock options and warrants | 2,695 | — | — | — | 2,695 | |||||||||||||||
Payments of other long-term obligations | (2,925 | ) | (4,789 | ) | (8 | ) | — | (7,722 | ) | |||||||||||
Payments for other financing | — | (14,317 | ) | — | — | (14,317 | ) | |||||||||||||
Debt issuance costs | (4,332 | ) | — | — | — | (4,332 | ) | |||||||||||||
Other treasury share purchases | (3,046 | ) | — | — | — | (3,046 | ) | |||||||||||||
Intercompany funding | (194,747 | ) | 182,561 | 2,403 | 9,783 | — | ||||||||||||||
Net cash (used in) provided by financing activities | 9,145 | 163,455 | 2,395 | 9,783 | 184,778 | |||||||||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | — | 172,297 | 192 | — | 172,489 | |||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | — | 75,576 | 198 | — | 75,774 | |||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | — | $ | 247,873 | $ | 390 | $ | — | $ | 248,263 |
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | U.S. Concrete Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (4,117 | ) | $ | 94,789 | $ | 1,618 | $ | — | $ | 92,290 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Purchases of property, plant and equipment | — | (28,780 | ) | (2,261 | ) | — | (31,041 | ) | ||||||||||||
Payments for acquisitions, net of cash acquired | — | (124,481 | ) | — | — | (124,481 | ) | |||||||||||||
Proceeds from disposals of property, plant and equipment | — | 1,920 | — | — | 1,920 | |||||||||||||||
Proceeds from disposals of businesses | — | 375 | — | — | 375 | |||||||||||||||
Investment in subsidiaries | (300 | ) | — | — | 300 | — | ||||||||||||||
Net cash used in investing activities | (300 | ) | (150,966 | ) | (2,261 | ) | 300 | (153,227 | ) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||||||
Proceeds from revolver borrowings | 128,904 | — | — | — | 128,904 | |||||||||||||||
Repayments of revolver borrowings | (173,904 | ) | — | — | — | (173,904 | ) | |||||||||||||
Proceeds from issuance of debt | 400,000 | — | — | — | 400,000 | |||||||||||||||
Repayments of debt | (200,000 | ) | — | — | — | (200,000 | ) | |||||||||||||
Premium paid on early retirement of debt | (8,500 | ) | — | — | — | (8,500 | ) | |||||||||||||
Proceeds from exercise of stock options and warrants | 166 | — | — | — | 166 | |||||||||||||||
Payments of other long-term obligations | (657 | ) | (3,486 | ) | — | — | (4,143 | ) | ||||||||||||
Payments for other financing | — | (8,880 | ) | — | — | (8,880 | ) | |||||||||||||
Debt issuance costs | (7,786 | ) | — | — | — | (7,786 | ) | |||||||||||||
Other treasury share purchases | (2,825 | ) | — | — | — | (2,825 | ) | |||||||||||||
Intercompany funding | (130,981 | ) | 130,113 | 1,168 | (300 | ) | — | |||||||||||||
Net cash provided by financing activities | 4,417 | 117,747 | 1,168 | (300 | ) | 123,032 | ||||||||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | — | 61,570 | 525 | — | 62,095 | |||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | — | 3,854 | 71 | — | 3,925 | |||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | — | $ | 65,424 | $ | 596 | $ | — | $ | 66,020 |
17. | PENDING ACQUISITION |
18. | HURRICANES IRMA AND MARIA |
• | general economic and business conditions, which will, among other things, affect demand for new residential and commercial construction; |
• | our ability to successfully identify, manage, and integrate acquisitions; |
• | the cyclical nature of, and changes in, the real estate and construction markets, including pricing changes by our competitors; |
• | governmental requirements and initiatives, including those related to mortgage lending, financing or deductions, funding for public or infrastructure construction, land usage, and environmental, health, and safety matters; |
• | disruptions, uncertainties or volatility in the credit markets that may limit our, our suppliers' and our customers' access to capital; |
• | our ability to successfully implement our operating strategy; |
• | weather conditions; |
• | our substantial indebtedness and the restrictions imposed on us by the terms of our indebtedness; |
• | our ability to maintain favorable relationships with third parties who supply us with equipment and essential supplies; |
• | our ability to retain key personnel and maintain satisfactory labor relations; and |
• | product liability, property damage, results of litigation, and other claims and insurance coverage issues. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
(amounts in thousands, except selling prices and percentages) | |||||||||||||||||||||
Three Months Ended September 30, | Increase/ (Decrease) | Nine Months Ended September 30, | Increase/ (Decrease) | ||||||||||||||||||
2017 | 2016 | %(1) | 2017 | 2016 | %(1) | ||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||
Revenue | $ | 354,628 | $ | 328,588 | 7.9% | $ | 994,687 | $ | 849,383 | 17.1% | |||||||||||
Cost of goods sold before depreciation, depletion and amortization | 278,995 | 253,477 | 10.1 | 778,328 | 674,451 | 15.4 | |||||||||||||||
Selling, general and administrative expenses | 30,056 | 25,104 | 19.7 | 86,073 | 71,447 | 20.5 | |||||||||||||||
Depreciation, depletion and amortization | 16,593 | 14,139 | 17.4 | 48,802 | 38,795 | 25.8 | |||||||||||||||
Change in value of contingent consideration | 719 | 714 | 0.7 | 2,047 | 2,325 | (12.0) | |||||||||||||||
Impairment of assets | 648 | — | NM | 648 | — | NM | |||||||||||||||
Loss (gain) on disposal of assets, net | (106 | ) | (1,003 | ) | (89.4) | (496 | ) | (1,016 | ) | (51.2) | |||||||||||
Operating income | 27,723 | 36,157 | (23.3) | 79,285 | 63,381 | 25.1 | |||||||||||||||
Interest expense, net | 10,552 | 7,635 | 38.2 | 31,062 | 19,933 | 55.8 | |||||||||||||||
Derivative loss (income) | (13,119 | ) | (21,772 | ) | (39.7) | 791 | (6,430 | ) | NM | ||||||||||||
Loss on extinguishment of debt | 60 | — | NM | 60 | 12,003 | 99.5 | |||||||||||||||
Other income, net | (1,287 | ) | (405 | ) | 217.8 | (2,591 | ) | (1,412 | ) | 83.5 | |||||||||||
Income from continuing operations before income taxes | 31,517 | 50,699 | (37.8) | 49,963 | 39,287 | 27.2 | |||||||||||||||
Income tax expense | 7,241 | 12,577 | (42.4) | 20,854 | 14,317 | 45.7 | |||||||||||||||
Income from continuing operations | 24,276 | 38,122 | (36.3) | 29,109 | 24,970 | 16.6 | |||||||||||||||
Loss from discontinued operations, net of taxes | (222 | ) | (166 | ) | 33.7 | (524 | ) | (518 | ) | 1.2 | |||||||||||
Net income | $ | 24,054 | $ | 37,956 | (36.6%) | $ | 28,585 | $ | 24,452 | 16.9% | |||||||||||
Ready-mixed Concrete Data: | |||||||||||||||||||||
Average selling price per cubic yard | $ | 136.62 | $ | 132.70 | 3.0 | % | $ | 135.16 | $ | 129.64 | 4.3 | % | |||||||||
Sales volume in cubic yards | 2,366 | 2,240 | 5.6 | % | 6,719 | 5,929 | 13.3 | % | |||||||||||||
Aggregates Data: | |||||||||||||||||||||
Average selling price per ton | $ | 12.25 | $ | 11.93 | 2.7 | % | $ | 12.56 | $ | 11.78 | 6.6 | % | |||||||||
Sales volume in tons | 1,502 | 1,595 | (5.8 | )% | 4,277 | 4,205 | 1.7 | % |
(amounts in thousands, except selling prices and percentages) | ||||||||||||||||||||
Three Months Ended September 30, | Increase/ (Decrease) | Nine Months Ended September 30, | Increase/ (Decrease) | |||||||||||||||||
2017 | 2016 | % | 2017 | 2016 | % | |||||||||||||||
Ready-mixed Concrete Segment: | ||||||||||||||||||||
Revenue | $ | 323,567 | $ | 297,858 | 8.6% | $ | 909,145 | $ | 770,479 | 18.0% | ||||||||||
Segment revenue as a percentage of total revenue | 91.2 | % | 90.6 | % | 91.4 | % | 90.7 | % | ||||||||||||
Adjusted EBITDA | $ | 53,627 | $ | 51,394 | 4.3% | $ | 144,777 | $ | 111,809 | 29.5% | ||||||||||
Adjusted EBITDA as a percentage of segment revenue | 16.6 | % | 17.3 | % | 15.9 | % | 14.5 | % | ||||||||||||
Ready-mixed Concrete Data: | ||||||||||||||||||||
Average selling price per cubic yard | $ | 136.62 | $ | 132.70 | 3.0% | $ | 135.16 | $ | 129.64 | 4.3% | ||||||||||
Sales volume in thousands of cubic yards | 2,366 | 2,240 | 5.6% | 6,719 | 5,929 | 13.3% |
(amounts in thousands, except selling prices and percentages) | ||||||||||||||||||||
Three Months Ended September 30, | Increase/ (Decrease) | Nine Months Ended September 30, | Increase/ (Decrease) | |||||||||||||||||
2017 | 2016 | % | 2017 | 2016 | % | |||||||||||||||
Aggregate Products Segment: | ||||||||||||||||||||
Revenue | $ | 20,959 | $ | 22,128 | (5.3)% | $ | 61,549 | $ | 56,397 | 9.1% | ||||||||||
Segment revenue, excluding intersegment sales, as a percentage of total revenue | 3.1 | % | 3.7 | % | 3.2 | % | 3.6 | % | ||||||||||||
Adjusted EBITDA | $ | 6,218 | $ | 7,005 | (11.2)% | $ | 18,889 | $ | 15,080 | 25.3% | ||||||||||
Adjusted EBITDA as a percentage of segment revenue | 29.7 | % | 31.7 | % | 30.7 | % | 26.7 | % | ||||||||||||
Aggregates Data: | ||||||||||||||||||||
Average selling price per ton | $ | 12.25 | $ | 11.93 | 2.7% | $ | 12.56 | $ | 11.78 | 6.6% | ||||||||||
Sales volume in tons | 1,502 | 1,595 | (5.8)% | 4,277 | 4,205 | 1.7% |
September 30, 2017 | December 31, 2016 | ||||||
Cash and cash equivalents | $ | 248,263 | $ | 75,774 | |||
Working capital | $ | 311,747 | $ | 71,283 | |||
Total debt (1) | $ | 688,418 | $ | 449,298 | |||
Total stockholders' equity | 281,791 | 188,829 | |||||
Total capital | $ | 970,209 | $ | 638,127 | |||
Maximum availability under our Revolving Facility | $ | 245,800 | $ | 221,300 |
• | deterioration of revenue, due to lower volume and/or pricing, because of weakness in the markets in which we operate; |
• | declines in gross margins due to shifts in our product mix or increases in the cost of our raw materials and fuel; |
• | any deterioration in our ability to collect our accounts receivable from customers as a result of weakening in construction demand or payment difficulties experienced by our customers; and |
• | inclement weather beyond normal patterns that could reduce our sales volumes. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
• | the hiring of a tax manager experienced in accounting for income taxes under U.S. GAAP and taxation of multinational corporations; |
• | the engagement of a third-party tax advisory firm to assist in the preparation and review of the quarterly income tax accounting; |
• | the finalization of the initial implementation of the selected document management software, which will allow for its utilization, beginning in the fourth quarter of 2017, to assist in improving the documentation related to management review controls and the overall organization of control related documentation; |
• | the finalization of phase one of the implementation process related to the selected income tax accounting software, which will allow for its utilization in the fourth quarter of 2017 to prepare year-end accounting for income taxes; |
• | the establishment of documentation standards for management review controls; and |
• | the reassessment of the balance between preventative and detective type internal controls, which resulted in an increase in preventative controls. |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Calendar Month | Total Number of Shares Acquired (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares That May Yet Be Purchased Under Plans or Programs (2) | |||||||||
July 1 - July 31, 2017 | 397 | $ | 78.71 | — | $ | 50,000,000 | |||||||
August 1 - August 31, 2017 | 2,478 | 76.45 | — | 50,000,000 | |||||||||
September 1 - September 30, 2017 | — | — | — | 50,000,000 | |||||||||
Total | 2,875 | $ | 76.76 | — | $ | 50,000,000 |
(1) | The total number of shares purchased includes shares of our common stock acquired from employees who elected for us to make their required tax payments upon vesting of certain restricted shares by withholding a number of those vested shares having a value on the date of vesting equal to their tax obligations. |
(2) | The Second Share Repurchase Program was approved by our Board on March 1, 2017, and allows us to repurchase up to $50.0 million of our common stock effective April 1, 2017, until the earlier of March 31, 2020, or a determination by the Board to discontinue the Second Share Repurchase Program. The Second Share Repurchase Program does not obligate us to acquire any specific number of shares. |
Item 4. | Mine Safety Disclosures |
Item 6. | Exhibits |
2.1* | |
3.1* | |
3.2* | |
3.3* | |
10.1*† | |
10.2*† | |
10.3*† | |
10.4*† | |
10.5*† | |
10.6*† | |
10.7*† | |
12.1 | |
31.1 | |
31.2 | |
32.1 | |
32.2 | |
95.1 | |
101.INS | —XBRL Instance Document |
101.SCH | —XBRL Taxonomy Extension Schema Document |
101.CAL | —XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | —XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | —XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | —XBRL Taxonomy Extension Presentation Linkbase Document |
U.S. CONCRETE, INC. | |||
Date: | November 3, 2017 | By: | /s/ John E. Kunz |
John E. Kunz | |||
Senior Vice President and Chief Financial Officer | |||
(Principal Financial Officer) | |||
Nine Months Ended September 30, 2017 | ||||
Earnings: | ||||
Pretax income from continuing operations | $ | 50.0 | ||
Add: | ||||
Fixed charges | 37.1 | |||
Earnings adjusted for fixed charges | $ | 87.1 | ||
Fixed Charges: | ||||
Interest expensed and capitalized | $ | 30.2 | ||
Amortization of discount and capitalized expenses related to indebtedness | 0.9 | |||
Estimate of interest within rental expense (2) | 6.0 | |||
Total Fixed Charges | $ | 37.1 | ||
Ratio of Earnings to Fixed Charges | 2.3 | |||
(1) Our statement of computation of ratio of earnings to fixed charges should be read in conjunction with our consolidated financial statements and our notes to consolidated financial statements for matters that affect the comparability of the information presented above. | ||||
(2) One-third of rent expense is deemed to be representative of interest. | ||||
Date: | November 3, 2017 | By: | /s/ William J. Sandbrook |
William J. Sandbrook | |||
President, Chief Executive Officer and Vice Chairman | |||
(Principal Executive Officer) |
Date: | November 3, 2017 | By: | /s/ John E. Kunz |
John E. Kunz | |||
Senior Vice President and Chief Financial Officer | |||
(Principal Financial Officer) |
Date: | November 3, 2017 | By: | /s/ William J. Sandbrook |
William J. Sandbrook | |||
President, Chief Executive Officer and Vice Chairman | |||
(Principal Executive Officer) |
Date: | November 3, 2017 | By: | /s/ John E. Kunz |
John E. Kunz | |||
Senior Vice President and Chief Financial Officer | |||
(Principal Financial Officer) |
(H) | ||||||||||
(A) | (B) | (C) | (D) | (E) | (F) | (G) | Pending | |||
Section | Section | Section | Section | Section | Proposed | Legal | ||||
Mine Name/ID | 104 S&S | 104(b) | 104(d) | 110(b)(2) | 107(a) | Assessments | Fatalities | Action | ||
Robert Lee Quarry / 4102617 | - | - | - | - | - | - | - | - | ||
Cox Bend Quarry / 4102977 | - | - | - | - | - | - | - | - | ||
Bronte Quarry / 4104210 | - | - | - | - | - | - | - | - | ||
Waurika Quarry / 3400362 | - | - | - | - | - | $ | 232 | - | - | |
Vernon Quarry / 3401820 | - | - | - | - | - | - | - | - | ||
Red River Quarry / 3401945 | - | - | - | - | - | - | - | - | ||
Chatfield Plant / 4104209 | - | - | - | - | - | $ | 934 | - | 1 | |
Hamburg Quarry / 2800011 | - | - | - | - | - | - | - | - | ||
Glen Gardner Quarry / 2800009 | 1 | - | - | - | - | $ | 608 | - | - | |
Cedar Bridge Quarry / 2800717 | - | - | - | - | - | - | - | - | ||
Wantage Quarry / 2801035 | - | - | - | - | - | - | - | - | ||
Quinton Twp Pit | - | - | - | - | - | - | - | - | ||
Springfield Quarry / 5500002 | 1 | - | - | - | - | $ | 587 | - | - | |
Brookman Quarry / 5500008 | 2 | - | - | - | 1 | $ | 20,131 | - | 2 |
(A) | The total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under section 104 of the Mine Safety and Health Act of 1977 (30 U.S.C. 814) for which the operator received a citation from the Mine Safety and Health Administration. | |
(B) | The total number of orders issued under section 104(b) of such Act (30 U.S.C. 814(b)). | |
(C) | The total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section 104(d) of such Act (30 U.S.C. 814(d)). | |
(D) | The total number of flagrant violations under section 110(b)(2) of such Act (30 U.S.C. 820(b)(2)). | |
(E) | The total number of imminent danger orders issued under section 107(a) of such Act (30 U.S.C. 817(a)). | |
(F) | The total dollar value of proposed assessments from the Mine Safety and Health Administration under such Act (30 U.S.C. 801 et seq.). | |
(G) | The total number of mining-related fatalities. | |
(H) | Any pending legal action before the Federal Mine Safety and Health Review Commission involving such coal or other mine. |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Nov. 01, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | US CONCRETE INC | |
Entity Central Index Key | 0001073429 | |
Current Fiscal Year End | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 16,649,356 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $ 6,284 | $ 5,960 |
Property, plant and equipment, accumulated depreciation, depletion, and amortization | $ 167,874 | $ 137,629 |
BASIS OF PRESENTATION |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements include the accounts of U.S. Concrete, Inc. and its subsidiaries (collectively, "we," "us," "our," "U.S. Concrete," or the "Company") and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for reporting interim financial information. Some information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") have been condensed or omitted pursuant to the SEC’s rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, 2016 (the "2016 Form 10-K"). In the opinion of our management, all adjustments necessary to state fairly the information in our unaudited condensed consolidated financial statements and to make such financial statements not misleading have been included. All adjustments are of a normal or recurring nature. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The preparation of financial statements and accompanying notes in conformity with U.S. GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions that we consider critical and that involve complex judgments in the preparation of our financial statements include those related to our business combinations, goodwill and goodwill impairment, impairment of long-lived assets, accruals for self-insurance programs, income taxes, derivative instruments, and contingent consideration. Certain reclassifications have been made to prior year balances to conform with the current year presentation. |
RECENT ACCOUNTING PRONOUNCEMENTS AND SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS AND SIGNIFICANT ACCOUNTING POLICIES | RECENT ACCOUNTING PRONOUNCEMENTS AND SIGNIFICANT ACCOUNTING POLICIES Standards/Updates Adopted This Year In March 2016, the Financial Accounting Standards Board ("FASB") issued an amendment related to share-based payments to employees, which simplifies several aspects of the accounting for employee share-based payment transactions for public entities. In the first quarter of 2017, we adopted all applicable aspects of this standard on a prospective basis with the exception of the presentation of excess tax benefits on the statement of cash flows, which we adopted on a retrospective basis, and the election to account for forfeitures as they occur, which we adopted on a modified-retrospective basis. The new standard requires companies to recognize all excess tax benefits and tax deficiencies in the income statement when the awards vest or are settled, rather than recognized as additional paid-in capital in the equity section of the balance sheet. Upon adoption, we recognized $0.2 million in discrete tax benefits related to share-based payment accounting, resulting in a lower effective tax rate. This standard also affects the average shares outstanding used in the diluted earnings per share calculation, as we no longer increase or decrease the assumed proceeds from an employee vesting in, or exercising, a share-based payment award by the amount of excess tax benefits or deficiencies taken to additional paid-in capital. The guidance also requires excess tax benefits to be classified as an operating activity in the statement of cash flows rather than a financing activity. Retrospective application of the cash flow presentation requirement resulted in an increase to net cash provided by operating activities of $3.8 million and a decrease to net cash provided by financing activities of $3.8 million for the nine months ended September 30, 2016. Further, this guidance permits an entity to make an accounting policy election to either estimate forfeitures on stock compensation awards, as previously required, or to recognize forfeitures as they occur. We elected to change our accounting policy from estimating forfeitures expected to occur to recognizing forfeitures as they occur. This change in policy did not have a material impact on our financial condition, results of operations, or cash flows. In July 2015, the FASB issued guidance requiring inventory to be measured at the lower of cost or net realizable value, which is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance is effective prospectively for annual reporting periods beginning after December 15, 2016, and interim reporting periods within those annual reporting periods. We adopted this guidance as of January 1, 2017, when it became effective for us. There was no impact on our consolidated financial statements or results of operations as a result of adopting this standard. Standards/Updates Not Yet Adopted In January 2017, the FASB issued new guidance to simplify the accounting for goodwill impairment. The guidance removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation. Upon adoption, a goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. This guidance is effective in 2020, but early adoption is permitted for any impairment tests performed after January 1, 2017. We are currently evaluating the impact that this guidance will have on our financial condition and results of operations. In January 2017, the FASB issued an update under business combinations in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or as business combinations. The amendments in this update provide a screen to determine when a set of assets is not of a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted for transactions for which the acquisition (or disposal) date occurs before the effective date of the amendments, if the transaction has not been reported in financial statements that have been issued or made available for issuance. We do not expect the adoption of this standard to have a material impact on our financial condition and results of operations. In August 2016, the FASB issued guidance to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The new amendment is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those periods. Adoption of this standard will not result in any material changes to our statements of cash flows. In February 2016, the FASB issued an amendment related to leases. The new guidance requires the recognition of lease assets and lease liabilities for all of our leases greater than one year in duration that are currently classified as operating leases. The adoption of this amendment will result in a significant increase to the Company's consolidated balance sheets for lease liabilities and right-of-use assets, and we are still evaluating the other effects the adoption on our financial condition and results of operations. The evaluation process will include reviewing all forms of leases, performing a completeness assessment over the lease population, analyzing the practical expedients, and assessing the need to make any changes to our lease accounting technology system in order to determine the best implementation strategy. The standard will be adopted when it becomes effective for us in the first quarter of 2019 using a modified retrospective transition beginning with the earliest comparative period presented. In May 2014, the FASB issued guidance that outlines a single comprehensive model for accounting for revenue arising from contracts with customers, which supersedes most of the existing revenue recognition guidance. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The guidance is effective for interim and annual reporting periods that begin after December 15, 2017. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We primarily earn our revenue by producing and delivering ready-mixed concrete, aggregates, and related building materials, as requested by our customers primarily through purchase orders. We generally do not have significant customer contracts and do not provide post-delivery services, such as paving or finishing. As such, adoption of the new guidance should not result in significant changes in the amount of revenue recognized or the timing of when such revenue is recognized. We will adopt the new guidance in the first quarter of 2018, when it becomes effective for us, using the modified retrospective transition method. For a description of our significant accounting policies, see Note 1 of the consolidated financial statements in our 2016 Form 10-K. |
ACQUISITIONS |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS 2017 Acquisitions We completed four acquisitions that expanded our ready-mixed concrete and aggregate products operations during the first nine months of 2017. The total consideration was $53.7 million, along with contingent consideration for the Corbett acquisition, as defined below, of $23.0 million, which is based on the amount of reserves permitted and is not payable before a minimum two-year period following the acquisition date. The aggregate purchase price was comprised of $53.5 million in cash and the assumption of a $0.2 million working capital payable. We funded the cash portion of the acquisitions from cash on hand. The acquisitions included the assets of the following:
The combined assets acquired through these 2017 acquisitions included 401 acres of land with 35 million tons of proven aggregate reserves, 45 mixer trucks, 4 ready-mix concrete plants, a long-term lease with the South Jersey Port Corporation for an export dock as well as a licensing agreement with the exclusive right to move coarse and fine aggregates through the North Shore Terminal located on Staten Island, New York. See Note 11 for additional information related to contingent consideration obligations. The recording of the Corbett, Harbor, A-1/Frey, and Action Supply business combinations is preliminary, and we expect to record adjustments as we accumulate information needed to estimate the fair value of assets acquired and liabilities assumed, including working capital balances, estimated fair value of identifiable intangible assets, property, plant, and equipment, and goodwill. The following table presents the total consideration for the 2017 acquisitions and the preliminary amounts related to the assets acquired and liabilities assumed based on the estimated fair values as of the respective acquisition dates (in thousands):
(2) Contingent consideration payments included at fair value as of the respective acquisition dates. The accounting for business combinations requires the significant use of estimates and is based on information that was available to management at the time these condensed consolidated financial statements were prepared. We utilized recognized valuation techniques, including the income approach, sales approach, and cost approach to value the net assets acquired. Any changes to the provisional business combination accounting will be made as soon as practical, but no later than one year from the respective acquisition dates. 2016 Acquisitions During 2016, we completed four acquisitions that expanded our ready-mixed concrete operations in the New York Metropolitan market for total consideration of $142.8 million. The acquisitions included the assets of the following ready-mixed concrete plants in New York: •Greco Brothers Concrete of L.I., Inc. ("Greco"), located in Brooklyn on February 26, 2016; •Nycon Supply Corp. ("Nycon"), located in Queens on June 24, 2016; •Jenna Concrete Corp. ("Jenna"), located in Bronx on August 10, 2016; and •Kings Ready Mix Inc. ("Kings"), located in Brooklyn on August 22, 2016. The combined assets acquired through the New York acquisitions included land, 10 ready-mixed concrete plants, and a fleet of 189 mixer trucks. In addition, on March 31, 2016, and September 13, 2016, we acquired two individually immaterial ready-mixed concrete operations in our West Texas market for total consideration of $3.5 million. The aggregate consideration for these six acquisitions included $131.7 million in cash, $6.1 million in payments deferred over a three-year period, the issuance of $1.0 million of credits applied against existing trade accounts receivable, plus 136,215 shares of our common stock, calculated in accordance with the terms of the purchase agreement, and valued at approximately $7.5 million on the date of issuance. We funded the cash portion of these acquisitions through a combination of cash on hand and borrowings under our asset-based revolving credit facility (the "Revolving Facility"). The following table presents the total consideration for the 2016 acquisitions and the final amounts related to the assets acquired and liabilities assumed based on the fair values as of the respective acquisition dates (in thousands):
Acquired Intangibles The major classes of intangible assets acquired in 2016 and 2017 were as follows (in thousands of dollars):
The amortization periods of these intangible assets range from seven months to ten years. As of September 30, 2017, the estimated future aggregate amortization expense of definite-lived intangible assets from the acquisitions was as follows (in thousands):
Also included in other non-current liabilities in the accompanying condensed consolidated balance sheets is an unfavorable lease intangible with a gross carrying amount of $0.4 million and a net carrying amount of $0.3 million as of September 30, 2017. This unfavorable lease intangible will be amortized over its remaining lease term. During the three and nine months ended September 30, 2017, we recorded $2.1 million and $6.5 million of net amortization expense and during both the three and nine months ended September 30, 2016, we recorded $1.0 million of net amortization expense related to these intangible assets and unfavorable lease intangibles. The goodwill ascribed to each of the 2016 and 2017 acquisitions is related to the synergies we expect to achieve with expansion in the markets in which we already operate as well as entry into new metropolitan areas of our existing geographic markets. The goodwill for the 2016 and 2017 acquisitions relates primarily to our ready-mixed concrete reportable segment. See Note 6 for the allocation of goodwill to our segments. We expect the goodwill to generally be deductible for tax purposes. See Note 12 for additional information regarding income taxes. Actual and Pro Forma Impact of Acquisitions During the three months ended September 30, 2017, we recorded approximately $39.9 million of revenue and $4.8 million of operating income in our condensed consolidated statements of operations related to the 2016 and 2017 acquisitions. During the three months ended September 30, 2016, we recorded approximately $31.8 million of revenue and $6.2 million of operating income in our condensed consolidated statements of operations related to the 2016 acquisitions. During the nine months ended September 30, 2017, we recorded approximately $122.0 million of revenue and $17.4 million of operating income in our condensed consolidated statements of operations related to the 2016 and 2017 acquisitions. During the nine months ended September 30, 2016, we recorded approximately $34.9 million of revenue and $6.2 million of operating income in our condensed consolidated statements of operations related to the 2016 acquisitions. The unaudited pro forma information presented below reflects the combined financial results for the 2016 and 2017 acquisitions, excluding the two 2016 individually immaterial acquisitions in West Texas described above, because historical financial results for these operations were not material and were impractical to obtain from the former owners. All other 2016 and 2017 acquisitions have been included and represent our estimate of the results of operations for the three and nine months ended September 30, 2017 and 2016, as if the 2017 acquisitions had been completed on January 1, 2016, and the 2016 acquisitions had been completed on January 1, 2015 (in thousands, except per share information):
The above pro forma results are unaudited and were prepared based on the historical U.S. GAAP results of the Company and the historical results of the acquired companies for which financial information was available, based on data provided by the former owners. These results are not necessarily indicative of what the Company's actual results would have been had the 2017 acquisitions occurred on January 1, 2016, and the 2016 acquisitions occurred on January 1, 2015. The unaudited pro forma net income (loss) and net income (loss) per share amounts above reflect the following adjustments (in thousands):
The unaudited pro forma results do not reflect any operational efficiencies or potential cost savings that may occur as a result of consolidation of the operations. PENDING ACQUISITION On September 29, 2017, we entered into an arrangement agreement (the "Arrangement Agreement") with Polaris Materials Corporation ("Polaris"), a Canadian corporation, to purchase all of the issued and outstanding common shares of Polaris at a purchase price of C$3.40 per share (references to "C$" are for Canadian dollars) by way of a statutory plan of arrangement (the "Arrangement"). The price per share implies an aggregate fully diluted equity value for Polaris of approximately C$309 million. Upon completion of the Arrangement, Polaris will be an indirect wholly owned subsidiary of the Company. The transaction is expected to close in the fourth quarter of 2017, subject to approval by Polaris' securityholders at a special meeting of the securityholders, approval by the Supreme Court of British Columbia, and other customary closing conditions. We expect to finance the transaction with a combination of cash on hand and borrowings under our Revolving Facility (see Note 8). In connection with the Arrangement, Polaris terminated the previously announced arrangement agreement among Polaris, Vulcan Materials Company and its wholly owned subsidiary dated August 25, 2017, (the "Vulcan Agreement"). In connection with terminating the Vulcan Agreement, we received a C$10 million promissory note ($8.1 million as of September 30, 2017) from Polaris ("Polaris Note") in exchange for cash Polaris used to pay the Vulcan Agreement termination fee. The Polaris Note bears interest at a rate of 6.75% per annum, is payable on demand in Canadian dollars, and is recorded in other receivables in our condensed consolidated balance sheets. |
DISCONTINUED OPERATIONS |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS Discontinued operations primarily relate to real estate leases and subleases of our former precast concrete operations disposed of in prior years. The lease obligations will expire by June 30, 2018. The results of these discontinued operations were as follows (in thousands):
Cash flows from operating activities included operating cash flows used in discontinued operations of $0.6 million and $0.4 million during the nine months ended September 30, 2017 and 2016, respectively. Cash flows from investing activities included investing cash flows provided by discontinued operations of $0.6 million and $0.4 million for the nine months ended September 30, 2017 and 2016, respectively. |
INVENTORIES |
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INVENTORIES | INVENTORIES Inventories as of September 30, 2017, and December 31, 2016, consisted of the following (in thousands):
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES Goodwill The changes in goodwill by reportable segment from December 31, 2016, to September 30, 2017, were as follows (in thousands):
Other Intangibles Our purchased intangible assets were as follows (in thousands):
As of September 30, 2017, the estimated remaining amortization of our definite-lived intangible assets was as follows (in thousands):
Also included in other non-current liabilities in the accompanying condensed consolidated balance sheets are unfavorable lease intangibles with a gross carrying amount of $1.5 million and a net carrying amount of $1.1 million as of September 30, 2017, which have a weighted average remaining life of 5.14 years. We recorded $5.1 million and $4.2 million of amortization expense on our definite-lived intangible assets and unfavorable lease intangibles for the three months ended September 30, 2017 and 2016, respectively. We recorded $15.4 million and $11.1 million of amortization expense on our definite-lived intangible assets and unfavorable lease liabilities for the nine months ended September 30, 2017 and 2016, respectively. This amortization expense is included in the accompanying condensed consolidated statements of operations. |
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ACCRUED LIABILITIES | ACCRUED LIABILITIES Our accrued liabilities were as follows (in thousands):
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Our debt and capital leases were as follows (in thousands):
Senior Unsecured Notes due 2024 In 2016, we issued $400.0 million aggregate principal amount of 6.375% senior unsecured notes due 2024 (the "2024 Notes"). On January 9, 2017, we completed an offering of $200.0 million aggregate principal amount of additional 2024 Notes (the "Additional Notes," and together with the 2024 Notes, the "Senior Unsecured Notes") at an issue price of 105.75%. The terms of the Additional Notes are identical to the terms of the 2024 Notes, other than the issue date, the issue price, the first interest payment date, and the provisions relating to transfer restrictions and registration rights. We used the net proceeds from the offering of the Additional Notes, which were approximately $208.4 million, to increase our liquidity. The Senior Unsecured Notes are governed by an indenture (the “Indenture”) dated as of June 7, 2016, by and among U.S. Concrete, Inc., as issuer, the subsidiary guarantors party thereto, and U.S. Bank National Association, as trustee. The Senior Unsecured Notes accrue interest at a rate of 6.375% per annum. We pay interest on the Senior Unsecured Notes on June 1 and December 1 of each year. The Senior Unsecured Notes mature on June 1, 2024, and are redeemable at our option prior to maturity at prices specified in the Indenture. The Indenture contains negative covenants that restrict our ability and our restricted subsidiaries' ability to engage in certain transactions, as described below, and also contains customary events of default. The Indenture contains covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to:
The Senior Unsecured Notes are issued by U.S. Concrete, Inc. (the "Parent"). Our obligations under the Senior Unsecured Notes are jointly and severally and fully and unconditionally guaranteed on a senior unsecured basis by each of our restricted subsidiaries that guarantees any obligations under the Revolving Facility or that guarantees certain of our other indebtedness or certain indebtedness of our restricted subsidiaries (other than foreign restricted subsidiaries that guarantee only indebtedness incurred by another foreign subsidiary). U.S. Concrete, Inc. does not have any independent assets or operations, and none of its foreign subsidiaries guarantee the Senior Unsecured Notes. There are no significant restrictions on the ability of the Company or any guarantor to obtain funds from its subsidiaries by dividend or loan. For additional information regarding our guarantor and non-guarantor subsidiaries, see the information set forth in Note 16. The Senior Unsecured Notes and the guarantees thereof are effectively subordinated to all of our and our guarantors' existing and future secured obligations, including obligations under the Revolving Facility, to the extent of the value of the collateral securing such obligations; senior in right of payment to any of our and our guarantors' future subordinated indebtedness; pari passu in right of payment with any of our and our guarantors' existing and future senior indebtedness, including our and our guarantors' obligations under the Revolving Facility; and structurally subordinated to all existing and future indebtedness and other liabilities, including preferred stock, of any non-guarantor subsidiaries. Senior Secured Credit Facility On August 31, 2017, we entered into the Third Amended and Restated Loan and Security Agreement (the “Third Loan Agreement”) with certain financial institutions named therein as lenders (the “Lenders”) and Bank of America, N.A., as agent for the Lenders, which amended and restated the Second Amended and Restated Loan and Security Agreement, dated as of November 18, 2015 (the “Second Loan Agreement”). Among other things, the Third Loan Agreement increased the revolving commitments from $250.0 million to $350.0 million and extended the maturity date to August 31, 2022. The Third Loan Agreement also amended certain terms of the Second Loan Agreement, including, without limitation, a provision to permit the incurrence of other secured indebtedness up to amounts specified in the Third Loan Agreement. As of September 30, 2017, we had no outstanding borrowings on the Third Loan Agreement, and we had $14.3 million of undrawn standby letters of credit under the Revolving Facility. Our actual maximum credit availability under the Revolving Facility varies from time to time and is determined by calculating the value of our eligible accounts receivable, inventory, mixer trucks and machinery, minus reserves imposed by the Lenders and other adjustments, all as specified in the Third Loan Agreement. Our maximum availability under the Revolving Facility at September 30, 2017, was $245.8 million as compared to $221.3 million at December 31, 2016. The Third Loan Agreement also contains a provision for over-advances and protective advances by Lenders, in each case, of up to $25.0 million in excess of borrowing base levels and provides for swingline loans, up to a $15.0 million sublimit. Up to $50.0 million of the Revolving Facility is available for the issuance of letters of credit, and any such issuance of letters of credit will reduce the amount available for loans under the Revolving Facility. Loans under the Revolving Facility may not exceed a borrowing base as defined in the Third Loan Agreement. The Third Loan Agreement also requires that we, upon the occurrence of certain events, maintain a fixed charge coverage ratio of at least 1.0 to 1.0 for each period of 12 calendar months, as determined in accordance with the Third Loan Agreement. As of September 30, 2017, we were in compliance with all covenants under the Third Loan Agreement. The Third Loan Agreement is secured by a first priority lien on substantially all of the personal property of the Company and our guarantors, subject to permitted liens and certain exceptions. Capital Leases and Other Financing We have a series of promissory notes with various lenders for the purchase of mixer trucks and other machinery and equipment in an aggregate original principal amount of $44.4 million, with fixed annual interest rates ranging from 2.50% to 4.64%, payable monthly with terms ranging from one to five years. We have leasing agreements with various other lenders for the purchase of mixer trucks and other machinery and equipment for a total original principal amount of $82.3 million, with fixed annual interest rates ranging from less than 0.01% to 5.24%, payable monthly for terms ranging from two to seven years. The lease agreements include bargain purchase options at the end of the lease terms; accordingly, these financings have been classified as capital leases. The current portion of capital leases included in current maturities of long-term debt was $16.2 million as of September 30, 2017, and $9.8 million as of December 31, 2016. The weighted average interest rate of our capital leases and other financings was 3.30% as of September 30, 2017, and 3.11% as of December 31, 2016. |
WARRANTS |
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Sep. 30, 2017 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANTS | WARRANTS In 2010, we issued warrants to acquire common stock in two tranches: Class A Warrants to purchase an aggregate of approximately 1.5 million shares of common stock and Class B Warrants to purchase an aggregate of approximately 1.5 million shares of common stock (collectively, the "Warrants"). The Warrants were issued to holders of our predecessor common stock pro rata based on a holder’s stock ownership as of the issuance date and expired on August 31, 2017. The Warrants were included in derivative liabilities in the accompanying condensed consolidated balance sheet as of December 31, 2016, (see Note 10) and were recorded at their fair value (see Note 11). The Warrants were treated as potentially dilutive securities in the calculation of diluted earnings (loss) per share as shares of our common stock would have been issued if the Warrants had been exercised. A total of 112,638 Class A Warrants and 114,775 Class B Warrants expired unexercised on August 31, 2017. |
DERIVATIVES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES | DERIVATIVES Prior to their expiration on August 31, 2017, we were required to account for our warrants as derivative instruments, which were not used to manage business risk and were not executed for speculative purposes. The following table presents the fair value of our derivative instruments as of September 30, 2017, and December 31, 2016 (in thousands):
The following table presents the effect of derivative instruments on our condensed consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016, respectively, excluding income tax effects (in thousands):
Warrant volume positions represent the number of shares of common stock underlying the instruments. The table below presents our volume positions as of September 30, 2017, and December 31, 2016 (in thousands):
We do not have any derivative instruments with credit features requiring the posting of collateral in the event of a credit downgrade or similar credit event. |
FAIR VALUE DISCLOSURES |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Accounting guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. We review the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain assets and liabilities within the fair value hierarchy. The following tables present our fair value hierarchy for liabilities measured at fair value on a recurring basis as of September 30, 2017, and December 31, 2016 (in thousands):
The liability for the Warrants was valued utilizing a Black-Scholes-Merton model. Inputs into the model were based upon observable market data. The key inputs in determining our derivative liabilities include our stock price, stock price volatility, and risk free interest rates. As of December 31, 2016, observable market data existed for all of the key inputs in determining the fair value of our Warrants. The liabilities for the Right Away Earn-out and the Ferrara Bros. Contingent Consideration were valued using Monte Carlo simulations, which incorporated probability-weighted assumptions related to the achievement of specific milestones mentioned above. The liabilities for the Corbett Contingent Consideration were valued using the income approach which incorporated probability-weighted assumptions related to the achievement of specific milestones mentioned above. The liabilities for the Bode Earn-out and the DuBrook Earn-out were valued using a discounted cash flow technique. Inputs into the models were based upon observable market data where possible. Where observable market data did not exist, we modeled inputs based upon similar observable inputs. The key inputs in determining the fair value of the contingent consideration as of September 30, 2017, and December 31, 2016, included discount rates ranging from 5.00% to 15.75% and management's estimates of future sales volumes, EBITDA and permitted reserves. Changes in these inputs will impact the valuation of our contingent consideration obligations and will result in gain or loss each quarterly period. A reconciliation of the changes in Level 3 fair value measurements from December 31, 2016, to September 30, 2017, is provided below (in thousands):
Our other financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, and long-term debt. We consider the carrying values of cash and cash equivalents, accounts receivable, and accounts payable to be representative of their respective fair values because of their short-term maturities or expected settlement dates. The fair value of our Senior Unsecured Notes, estimated based on quoted market prices (i.e., Level 2 inputs), was $645.7 million as of September 30, 2017. The carrying value of any outstanding amounts under our Third Loan Agreement approximates fair value due to the floating interest rate. There were no such amounts outstanding as of September 30, 2017, or December 31, 2016. |
INCOME TAXES |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We recorded income tax expense allocated to continuing operations of $7.2 million and $20.9 million for the three and nine months ended September 30, 2017, respectively. We recorded income tax expense allocated to continuing operations of $12.6 million and $14.3 million for the three and nine months ended September 30, 2016, respectively. We recorded a tax benefit of $0.1 million and $0.3 million allocated to discontinued operations for the three and nine months ended September 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017, our effective tax rate differed from the federal statutory rate primarily due to other cumulative adjustments to deferred income taxes, which resulted in additional income tax expense. In addition, the adoption of ASU 2016-09 on January 1, 2017, (see Note 2) required the current period income tax benefit related to stock compensation to be reflected in the income statement instead of additional paid-in-capital, as previously required. For the nine months ended September 30, 2016, our effective tax rate differed from the federal statutory tax rate primarily due to the application of a valuation allowance that reduced the recognized benefit of certain of our deferred tax assets. In addition, certain state income taxes are calculated on a basis other than pre-tax income (loss). In addition, for both the three months ended September 30, 2017 and 2016, our effective tax rate differed from the federal statutory rate due to the tax impact of derivative income and losses related to our Warrants. Derivative income and losses were excluded from the calculation of our income tax provision and were treated as an unrecognized tax position. For the nine months ended September 30, 2017, our tax provision excluded $0.3 million of tax benefit related to our $0.8 million derivative loss. For the nine months ended September 30, 2016, our tax provision excluded $2.5 million of tax expense related to our $6.4 million derivative income. For the three and nine months ended September 30, 2017, we reduced to zero our unrecognized tax benefits and deferred tax asset balances associated with derivative income or losses related to our Warrants. The amount of the reduction for both was $43.6 million; therefore, the aggregate reductions did not have an impact to either total income tax expense or our effective tax rate. These reductions followed a decision to no longer pursue a future tax return deduction associated with our cumulative derivative losses related to our Warrants, given our inability, after multiple attempts, to obtain the necessary documentation to support the deduction and complete the related informational reporting requirements. In accordance with U.S. GAAP, we reduce the value of deferred tax assets to the amount that is more likely than not to be realized in future periods. The ultimate realization of the benefit of deferred tax assets from deductible temporary differences or tax carryovers depends on generating sufficient taxable income during the periods in which those temporary differences become deductible. We considered the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on these considerations, we relied upon the reversal of certain deferred tax liabilities to realize a portion of our deferred tax assets and established valuation allowances as of September 30, 2017, and December 31, 2016, for other deferred tax assets because of uncertainty regarding their ultimate realization. Our total net deferred tax liability was approximately $15.0 million as of September 30, 2017, and approximately $7.7 million as of December 31, 2016. We record changes in our unrecognized tax benefits based on anticipated federal and state tax filing positions on a quarterly basis. For the nine months ended September 30, 2017 and 2016, we recorded unrecognized tax benefits of $0.1 million and $4.1 million, respectively. |
NET EARNINGS (LOSS) PER SHARE |
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NET EARNINGS (LOSS) PER SHARE | NET EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the period after giving effect to all potentially dilutive securities outstanding during the period. The following is a reconciliation of the components of the basic and diluted earnings (loss) per share calculations for the three and nine months ended September 30, 2017 and 2016 (in thousands):
For the three and nine months ended September 30, 2017 and 2016, our potentially dilutive shares include the shares underlying our restricted stock awards, restricted stock units, stock options and Warrants. The following table shows the type and number (in thousands) of potentially dilutive shares excluded from the diluted earnings (loss) per share calculations for the periods presented as their effect would have been anti-dilutive or they have not met their performance target:
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COMMITMENTS AND CONTINGENCIES |
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Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, and currently, we are subject to various claims and litigation brought by employees, customers and other third-parties for, among other matters, personal injuries, property damages, product defects and delay damages that have, or allegedly have, resulted from the conduct of our operations. As a result of these types of claims and litigation, we must periodically evaluate the probability of damages being assessed against us and the range of possible outcomes. In each reporting period, if we determine that the likelihood of damages being assessed against us is probable, and if we believe we can estimate a range of possible outcomes, then we will record a liability. The amount of the liability will be based upon a specific estimate, if we believe a specific estimate to be likely, or it will reflect the low end of our range. Currently, there are no material legal proceedings pending against us. In the future, we may receive funding deficiency demands from multi-employer pension plans to which we contribute. We are unable to estimate the amount of any potential future funding deficiency demands because the actions of each of the contributing employers in the plans has an effect on each of the other contributing employers and the development of a rehabilitation plan by the trustees and subsequent submittal to and approval by the Internal Revenue Service is not predictable. Further, the allocation of fund assets and return assumptions by trustees are variable, as are actual investment returns relative to the plan assumptions. As of September 30, 2017, there are no material product defect claims pending against us. Accordingly, our existing accruals for claims against us do not reflect any material amounts relating to product defect claims. While our management is not aware of any facts that would reasonably be expected to lead to material product defect claims against us that would have a material adverse effect on our business, financial condition or results of operations, it is possible that claims could be asserted against us in the future. We do not maintain insurance that would cover all damages resulting from product defect claims. In particular, we generally do not maintain insurance coverage for the cost of removing and rebuilding structures. In addition, our indemnification arrangements with contractors or others, when obtained, generally provide only limited protection against product defect claims. Due to inherent uncertainties associated with estimating claims in our business, we cannot estimate the amount of any future loss that may be attributable to product defect claims related to ready-mixed concrete we have delivered prior to September 30, 2017. On March 28, 2017, Hans Ruedelstein, individually and on behalf of all others similarly situated, filed a purported class action lawsuit in the United States District Court of Northern Texas, Fort Worth Division, against the Company, William J. Sandbrook, William M. Brown and Joseph C. Tusa, Jr. alleging violations of certain federal securities laws. The case was filed purportedly on behalf of purchasers of the Company's stock between March 6, 2015 and March 23, 2017. On June 22, 2017, Robert Abric and Donald Bellafiore were appointed as co-lead plaintiffs. On August 24, 2017, co-lead plaintiffs voluntarily dismissed the complaint and on September 8, 2017, the case was terminated by the Court. We believe that the resolution of all litigation currently pending or threatened against us or any of our subsidiaries will not materially exceed our existing accruals for those matters. However, because of the inherent uncertainty of litigation, there is a risk that we may have to increase our accruals for one or more claims or proceedings to which we or any of our subsidiaries is a party as more information becomes available or proceedings progress, and any such increase in accruals could have a material adverse effect on our consolidated financial condition or results of operations. We expect in the future that we and our operating subsidiaries will, from time to time, be a party to litigation or administrative proceedings that arise in the normal course of our business. We are subject to federal, state and local environmental laws and regulations concerning, among other matters, air emissions and wastewater discharge. Our management believes we are in substantial compliance with applicable environmental laws and regulations. From time to time, we receive claims from federal and state environmental regulatory agencies and entities asserting that we may be in violation of environmental laws and regulations. Based on experience and the information currently available, our management does not believe that these claims will materially exceed our related accruals. Despite compliance and experience, it is possible that we could be held liable for future charges, which might be material, but are not currently known to us or cannot be estimated by us. In addition, changes in federal or state laws, regulations or requirements, or discovery of currently unknown conditions, could require additional expenditures. As permitted under Delaware law, we have agreements that provide indemnification of officers and directors for certain events or occurrences while the officer or director is or was serving at our request in such capacity. The maximum potential amount of future payments that we could be required to make under these indemnification agreements is not limited; however, we have a director and officer insurance policy that potentially limits our exposure and enables us to recover a portion of future amounts that may be paid. As a result of the insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal. Accordingly, we have not recorded any liabilities for these agreements as of September 30, 2017. We and our subsidiaries are parties to agreements that require us to provide indemnification in certain instances when we acquire businesses and real estate and in the ordinary course of business with our customers, suppliers, lessors and service providers. Insurance Programs We maintain third-party insurance coverage against certain risks in amounts we believe are reasonable. Under certain components of our insurance program, we share the risk of loss with our insurance underwriters by maintaining high deductibles subject to aggregate annual loss limitations. Generally, our deductible retentions per occurrence for auto, workers’ compensation and general liability insurance programs are $1.0 million, although certain of our operations are self-insured for workers’ compensation. We fund these deductibles and record an expense for expected losses under the programs. We determine the expected losses using a combination of our historical loss experience and subjective assessments of our future loss exposure. The estimated losses are subject to uncertainty from various sources, including changes in claims reporting patterns, claims settlement patterns, judicial decisions, legislation and economic conditions. Although we believe the estimated losses we have recorded are reasonable, significant differences related to the items we have noted above could materially affect our insurance obligations and future expense. The amount recorded in accrued liabilities in our condensed consolidated balance sheet for estimated losses was $15.5 million as of September 30, 2017, compared to $13.5 million as of December 31, 2016. Performance Bonds In the normal course of business, we are contingently liable for performance under $36.2 million in performance bonds that various contractors, states and municipalities have required as of September 30, 2017. The bonds principally relate to construction contracts, reclamation obligations, licensing and permitting. We and our subsidiaries have indemnified the underwriting insurance company against any exposure under the performance bonds. No material claims have been made against these bonds as of September 30, 2017. Employment Agreements We have employment agreements with executive officers and certain key members of management under which severance payments would become payable in the event of specified terminations without cause or after a change of control. |
SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION Our two reportable segments consist of ready-mixed concrete and aggregate products as described below. Our ready-mixed concrete segment produces and sells ready-mixed concrete. This segment serves the following markets: Texas, Northern California, New York, New Jersey, Washington, D.C., Oklahoma, and the U.S. Virgin Islands. Our aggregate products segment includes crushed stone, sand and gravel products and serves the North Texas, West Texas, New York, New Jersey, Oklahoma, and U.S. Virgin Islands markets in which our ready-mixed concrete segment operates. Other products not associated with a reportable segment include our building materials stores, hauling operations, lime slurry, ARIDUS® Rapid Drying Concrete technology, brokered product sales, a recycled aggregates operation, an aggregate distribution operation, and an industrial waterfront marine terminal and sales yard. The financial results of the acquisitions have been included in their respective reportable segment or in other products as of their respective acquisition dates. Our customers are generally involved in the construction industry, which is a cyclical business and is subject to general and more localized economic conditions. In addition, our business is impacted by seasonal variations in weather conditions, which vary by regional market. Accordingly, demand for our products and services during the winter months is typically lower than in other months of the year because of inclement weather. Also, sustained periods of inclement weather and other adverse weather conditions could cause the delay of construction projects during other times of the year. Our chief operating decision maker evaluates segment performance and allocates resources based on Adjusted EBITDA. We define Adjusted EBITDA as income (loss) from continuing operations excluding the impact of income tax expense (benefit), net interest expense, depreciation, depletion and amortization, derivative income (loss), the non-cash change in value of contingent consideration, hurricane-related losses, quarry dredge costs for a specific event, and loss on extinguishment of debt. We consider Adjusted EBITDA to be an indicator of the operational strength and performance of our business. We have included Adjusted EBITDA because it is a key financial measure used by our management to (1) internally measure our operating performance and (2) assess our ability to service our debt, incur additional debt, and meet our capital expenditure requirements. Adjusted EBITDA should not be construed as an alternative to, or a better indicator of, operating income or loss, is not based on U.S. GAAP, and is not a measure of our cash flows or ability to fund our cash needs. Our measurements of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies, and may not be comparable to similarly titled measures used in our various agreements, including the Third Loan Agreement and the Indenture. We generally account for inter-segment sales at market prices. Corporate includes executive, administrative, financial, legal, human resources, business development and risk management activities that are not allocated to reportable segments and are excluded from segment Adjusted EBITDA. Eliminations include transactions to account for intercompany activity. The following tables set forth certain financial information relating to our continuing operations by reportable segment (in thousands):
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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION The Senior Unsecured Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by each direct and indirect domestic subsidiary of the Company, each a guarantor subsidiary. Each guarantor subsidiary is directly or indirectly 100% owned by the Company. The Senior Unsecured Notes are not guaranteed by any direct or indirect foreign subsidiaries of the Company, each a non-guarantor subsidiary. Consequently, we are required to provide condensed consolidating financial information in accordance with Rule 3-10 of Regulation S-X. The following condensed consolidating financial statements present, in separate columns, financial information for (1) the Parent on a parent only basis, (2) the guarantor subsidiaries on a combined basis, (3) the non-guarantor subsidiaries on a combined basis, (4) the eliminations and reclassifications necessary to arrive at the information for the Company on a consolidated basis, and (5) the Company on a consolidated basis. The following condensed consolidating financial statements of U.S. Concrete, Inc. and its subsidiaries present investments in consolidated subsidiaries using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2017 (in thousands)
CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2016 (in thousands)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2017 (in thousands)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2016 (in thousands)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2017 (in thousands)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2016 (in thousands)
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PENDING ACQUISITION |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENDING ACQUISITION | ACQUISITIONS 2017 Acquisitions We completed four acquisitions that expanded our ready-mixed concrete and aggregate products operations during the first nine months of 2017. The total consideration was $53.7 million, along with contingent consideration for the Corbett acquisition, as defined below, of $23.0 million, which is based on the amount of reserves permitted and is not payable before a minimum two-year period following the acquisition date. The aggregate purchase price was comprised of $53.5 million in cash and the assumption of a $0.2 million working capital payable. We funded the cash portion of the acquisitions from cash on hand. The acquisitions included the assets of the following:
The combined assets acquired through these 2017 acquisitions included 401 acres of land with 35 million tons of proven aggregate reserves, 45 mixer trucks, 4 ready-mix concrete plants, a long-term lease with the South Jersey Port Corporation for an export dock as well as a licensing agreement with the exclusive right to move coarse and fine aggregates through the North Shore Terminal located on Staten Island, New York. See Note 11 for additional information related to contingent consideration obligations. The recording of the Corbett, Harbor, A-1/Frey, and Action Supply business combinations is preliminary, and we expect to record adjustments as we accumulate information needed to estimate the fair value of assets acquired and liabilities assumed, including working capital balances, estimated fair value of identifiable intangible assets, property, plant, and equipment, and goodwill. The following table presents the total consideration for the 2017 acquisitions and the preliminary amounts related to the assets acquired and liabilities assumed based on the estimated fair values as of the respective acquisition dates (in thousands):
(2) Contingent consideration payments included at fair value as of the respective acquisition dates. The accounting for business combinations requires the significant use of estimates and is based on information that was available to management at the time these condensed consolidated financial statements were prepared. We utilized recognized valuation techniques, including the income approach, sales approach, and cost approach to value the net assets acquired. Any changes to the provisional business combination accounting will be made as soon as practical, but no later than one year from the respective acquisition dates. 2016 Acquisitions During 2016, we completed four acquisitions that expanded our ready-mixed concrete operations in the New York Metropolitan market for total consideration of $142.8 million. The acquisitions included the assets of the following ready-mixed concrete plants in New York: •Greco Brothers Concrete of L.I., Inc. ("Greco"), located in Brooklyn on February 26, 2016; •Nycon Supply Corp. ("Nycon"), located in Queens on June 24, 2016; •Jenna Concrete Corp. ("Jenna"), located in Bronx on August 10, 2016; and •Kings Ready Mix Inc. ("Kings"), located in Brooklyn on August 22, 2016. The combined assets acquired through the New York acquisitions included land, 10 ready-mixed concrete plants, and a fleet of 189 mixer trucks. In addition, on March 31, 2016, and September 13, 2016, we acquired two individually immaterial ready-mixed concrete operations in our West Texas market for total consideration of $3.5 million. The aggregate consideration for these six acquisitions included $131.7 million in cash, $6.1 million in payments deferred over a three-year period, the issuance of $1.0 million of credits applied against existing trade accounts receivable, plus 136,215 shares of our common stock, calculated in accordance with the terms of the purchase agreement, and valued at approximately $7.5 million on the date of issuance. We funded the cash portion of these acquisitions through a combination of cash on hand and borrowings under our asset-based revolving credit facility (the "Revolving Facility"). The following table presents the total consideration for the 2016 acquisitions and the final amounts related to the assets acquired and liabilities assumed based on the fair values as of the respective acquisition dates (in thousands):
Acquired Intangibles The major classes of intangible assets acquired in 2016 and 2017 were as follows (in thousands of dollars):
The amortization periods of these intangible assets range from seven months to ten years. As of September 30, 2017, the estimated future aggregate amortization expense of definite-lived intangible assets from the acquisitions was as follows (in thousands):
Also included in other non-current liabilities in the accompanying condensed consolidated balance sheets is an unfavorable lease intangible with a gross carrying amount of $0.4 million and a net carrying amount of $0.3 million as of September 30, 2017. This unfavorable lease intangible will be amortized over its remaining lease term. During the three and nine months ended September 30, 2017, we recorded $2.1 million and $6.5 million of net amortization expense and during both the three and nine months ended September 30, 2016, we recorded $1.0 million of net amortization expense related to these intangible assets and unfavorable lease intangibles. The goodwill ascribed to each of the 2016 and 2017 acquisitions is related to the synergies we expect to achieve with expansion in the markets in which we already operate as well as entry into new metropolitan areas of our existing geographic markets. The goodwill for the 2016 and 2017 acquisitions relates primarily to our ready-mixed concrete reportable segment. See Note 6 for the allocation of goodwill to our segments. We expect the goodwill to generally be deductible for tax purposes. See Note 12 for additional information regarding income taxes. Actual and Pro Forma Impact of Acquisitions During the three months ended September 30, 2017, we recorded approximately $39.9 million of revenue and $4.8 million of operating income in our condensed consolidated statements of operations related to the 2016 and 2017 acquisitions. During the three months ended September 30, 2016, we recorded approximately $31.8 million of revenue and $6.2 million of operating income in our condensed consolidated statements of operations related to the 2016 acquisitions. During the nine months ended September 30, 2017, we recorded approximately $122.0 million of revenue and $17.4 million of operating income in our condensed consolidated statements of operations related to the 2016 and 2017 acquisitions. During the nine months ended September 30, 2016, we recorded approximately $34.9 million of revenue and $6.2 million of operating income in our condensed consolidated statements of operations related to the 2016 acquisitions. The unaudited pro forma information presented below reflects the combined financial results for the 2016 and 2017 acquisitions, excluding the two 2016 individually immaterial acquisitions in West Texas described above, because historical financial results for these operations were not material and were impractical to obtain from the former owners. All other 2016 and 2017 acquisitions have been included and represent our estimate of the results of operations for the three and nine months ended September 30, 2017 and 2016, as if the 2017 acquisitions had been completed on January 1, 2016, and the 2016 acquisitions had been completed on January 1, 2015 (in thousands, except per share information):
The above pro forma results are unaudited and were prepared based on the historical U.S. GAAP results of the Company and the historical results of the acquired companies for which financial information was available, based on data provided by the former owners. These results are not necessarily indicative of what the Company's actual results would have been had the 2017 acquisitions occurred on January 1, 2016, and the 2016 acquisitions occurred on January 1, 2015. The unaudited pro forma net income (loss) and net income (loss) per share amounts above reflect the following adjustments (in thousands):
The unaudited pro forma results do not reflect any operational efficiencies or potential cost savings that may occur as a result of consolidation of the operations. PENDING ACQUISITION On September 29, 2017, we entered into an arrangement agreement (the "Arrangement Agreement") with Polaris Materials Corporation ("Polaris"), a Canadian corporation, to purchase all of the issued and outstanding common shares of Polaris at a purchase price of C$3.40 per share (references to "C$" are for Canadian dollars) by way of a statutory plan of arrangement (the "Arrangement"). The price per share implies an aggregate fully diluted equity value for Polaris of approximately C$309 million. Upon completion of the Arrangement, Polaris will be an indirect wholly owned subsidiary of the Company. The transaction is expected to close in the fourth quarter of 2017, subject to approval by Polaris' securityholders at a special meeting of the securityholders, approval by the Supreme Court of British Columbia, and other customary closing conditions. We expect to finance the transaction with a combination of cash on hand and borrowings under our Revolving Facility (see Note 8). In connection with the Arrangement, Polaris terminated the previously announced arrangement agreement among Polaris, Vulcan Materials Company and its wholly owned subsidiary dated August 25, 2017, (the "Vulcan Agreement"). In connection with terminating the Vulcan Agreement, we received a C$10 million promissory note ($8.1 million as of September 30, 2017) from Polaris ("Polaris Note") in exchange for cash Polaris used to pay the Vulcan Agreement termination fee. The Polaris Note bears interest at a rate of 6.75% per annum, is payable on demand in Canadian dollars, and is recorded in other receivables in our condensed consolidated balance sheets. |
HURRICANES IRMA AND MARIA |
9 Months Ended |
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Sep. 30, 2017 | |
Unusual or Infrequent Items, or Both [Abstract] | |
HURRICANES IRMA AND MARIA | HURRICANES IRMA AND MARIA On September 6, 2017, Hurricane Irma made landfall on the U.S. Virgin Island of Saint Thomas. On September 19, 2017, Hurricane Maria made landfall on Saint Croix. These storms resulted in extensive damage, flooding, and power outages throughout the islands, and power had not been fully restored as of the date of this filing. We are currently in the process of assessing the full extent of the damages to our operations; due to the ongoing conditions on the islands, we are unable at this time to quantify the impact to our consolidated financial statements. There is uncertainty as to the magnitude of the losses associated with these storms, including the potential, if any, for insurance recoveries. To date, we have identified approximately $0.6 million of impaired tangible assets, which has been recorded in the condensed consolidated statement of operations for the three and nine months ended September 30, 2017. The damages may result in the additional impairment of certain tangible and/or intangible assets. As of September 30, 2017, the assets in our U.S. Virgin Islands operations totaled $37.3 million, which included $3.3 million of inventory, $0.8 million of cash and other current assets, $8.5 million of goodwill and other intangible assets, and $24.0 million of property, plant, and equipment (of which $11.8 million is mineral reserves). |
BASIS OF PRESENTATION (Policies) |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements include the accounts of U.S. Concrete, Inc. and its subsidiaries (collectively, "we," "us," "our," "U.S. Concrete," or the "Company") and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for reporting interim financial information. Some information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") have been condensed or omitted pursuant to the SEC’s rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, 2016 (the "2016 Form 10-K"). In the opinion of our management, all adjustments necessary to state fairly the information in our unaudited condensed consolidated financial statements and to make such financial statements not misleading have been included. All adjustments are of a normal or recurring nature. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. |
Use of Estimates | The preparation of financial statements and accompanying notes in conformity with U.S. GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions that we consider critical and that involve complex judgments in the preparation of our financial statements include those related to our business combinations, goodwill and goodwill impairment, impairment of long-lived assets, accruals for self-insurance programs, income taxes, derivative instruments, and contingent consideration. |
Reclassifications | Certain reclassifications have been made to prior year balances to conform with the current year presentation. |
Standards/Updates Adopted This Year and Standards/Updates Not Yet Adopted | Standards/Updates Adopted This Year In March 2016, the Financial Accounting Standards Board ("FASB") issued an amendment related to share-based payments to employees, which simplifies several aspects of the accounting for employee share-based payment transactions for public entities. In the first quarter of 2017, we adopted all applicable aspects of this standard on a prospective basis with the exception of the presentation of excess tax benefits on the statement of cash flows, which we adopted on a retrospective basis, and the election to account for forfeitures as they occur, which we adopted on a modified-retrospective basis. The new standard requires companies to recognize all excess tax benefits and tax deficiencies in the income statement when the awards vest or are settled, rather than recognized as additional paid-in capital in the equity section of the balance sheet. Upon adoption, we recognized $0.2 million in discrete tax benefits related to share-based payment accounting, resulting in a lower effective tax rate. This standard also affects the average shares outstanding used in the diluted earnings per share calculation, as we no longer increase or decrease the assumed proceeds from an employee vesting in, or exercising, a share-based payment award by the amount of excess tax benefits or deficiencies taken to additional paid-in capital. The guidance also requires excess tax benefits to be classified as an operating activity in the statement of cash flows rather than a financing activity. Retrospective application of the cash flow presentation requirement resulted in an increase to net cash provided by operating activities of $3.8 million and a decrease to net cash provided by financing activities of $3.8 million for the nine months ended September 30, 2016. Further, this guidance permits an entity to make an accounting policy election to either estimate forfeitures on stock compensation awards, as previously required, or to recognize forfeitures as they occur. We elected to change our accounting policy from estimating forfeitures expected to occur to recognizing forfeitures as they occur. This change in policy did not have a material impact on our financial condition, results of operations, or cash flows. In July 2015, the FASB issued guidance requiring inventory to be measured at the lower of cost or net realizable value, which is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance is effective prospectively for annual reporting periods beginning after December 15, 2016, and interim reporting periods within those annual reporting periods. We adopted this guidance as of January 1, 2017, when it became effective for us. There was no impact on our consolidated financial statements or results of operations as a result of adopting this standard. Standards/Updates Not Yet Adopted In January 2017, the FASB issued new guidance to simplify the accounting for goodwill impairment. The guidance removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation. Upon adoption, a goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. This guidance is effective in 2020, but early adoption is permitted for any impairment tests performed after January 1, 2017. We are currently evaluating the impact that this guidance will have on our financial condition and results of operations. In January 2017, the FASB issued an update under business combinations in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or as business combinations. The amendments in this update provide a screen to determine when a set of assets is not of a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted for transactions for which the acquisition (or disposal) date occurs before the effective date of the amendments, if the transaction has not been reported in financial statements that have been issued or made available for issuance. We do not expect the adoption of this standard to have a material impact on our financial condition and results of operations. In August 2016, the FASB issued guidance to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The new amendment is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those periods. Adoption of this standard will not result in any material changes to our statements of cash flows. In February 2016, the FASB issued an amendment related to leases. The new guidance requires the recognition of lease assets and lease liabilities for all of our leases greater than one year in duration that are currently classified as operating leases. The adoption of this amendment will result in a significant increase to the Company's consolidated balance sheets for lease liabilities and right-of-use assets, and we are still evaluating the other effects the adoption on our financial condition and results of operations. The evaluation process will include reviewing all forms of leases, performing a completeness assessment over the lease population, analyzing the practical expedients, and assessing the need to make any changes to our lease accounting technology system in order to determine the best implementation strategy. The standard will be adopted when it becomes effective for us in the first quarter of 2019 using a modified retrospective transition beginning with the earliest comparative period presented. In May 2014, the FASB issued guidance that outlines a single comprehensive model for accounting for revenue arising from contracts with customers, which supersedes most of the existing revenue recognition guidance. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The guidance is effective for interim and annual reporting periods that begin after December 15, 2017. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We primarily earn our revenue by producing and delivering ready-mixed concrete, aggregates, and related building materials, as requested by our customers primarily through purchase orders. We generally do not have significant customer contracts and do not provide post-delivery services, such as paving or finishing. As such, adoption of the new guidance should not result in significant changes in the amount of revenue recognized or the timing of when such revenue is recognized. We will adopt the new guidance in the first quarter of 2018, when it becomes effective for us, using the modified retrospective transition method. |
ACQUISITIONS (Tables) |
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Major Classes of Intangible Assets Acquired | The major classes of intangible assets acquired in 2016 and 2017 were as follows (in thousands of dollars):
Our purchased intangible assets were as follows (in thousands):
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Schedule of Estimated Future Aggregate Amortization Expense of Definite-Lived Intangible Assets | As of September 30, 2017, the estimated future aggregate amortization expense of definite-lived intangible assets from the acquisitions was as follows (in thousands):
As of September 30, 2017, the estimated remaining amortization of our definite-lived intangible assets was as follows (in thousands):
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Schedule of Unaudited Pro Forma Information | The unaudited pro forma information presented below reflects the combined financial results for the 2016 and 2017 acquisitions, excluding the two 2016 individually immaterial acquisitions in West Texas described above, because historical financial results for these operations were not material and were impractical to obtain from the former owners. All other 2016 and 2017 acquisitions have been included and represent our estimate of the results of operations for the three and nine months ended September 30, 2017 and 2016, as if the 2017 acquisitions had been completed on January 1, 2016, and the 2016 acquisitions had been completed on January 1, 2015 (in thousands, except per share information):
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Schedule of Adjustments Reflected in Pro Forma Net Income (Loss) and Net Income (Loss) Per Share Amounts | The unaudited pro forma net income (loss) and net income (loss) per share amounts above reflect the following adjustments (in thousands):
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Schedule of Total Consideration and Amounts Related to the Assets Acquired and Liabilities Assumed | The following table presents the total consideration for the 2017 acquisitions and the preliminary amounts related to the assets acquired and liabilities assumed based on the estimated fair values as of the respective acquisition dates (in thousands):
(2) Contingent consideration payments included at fair value as of the respective acquisition dates. |
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Schedule of Total Consideration and Amounts Related to the Assets Acquired and Liabilities Assumed | The following table presents the total consideration for the 2016 acquisitions and the final amounts related to the assets acquired and liabilities assumed based on the fair values as of the respective acquisition dates (in thousands):
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DISCONTINUED OPERATIONS (Tables) |
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Schedule of Results of Discontinued Operations | The results of these discontinued operations were as follows (in thousands):
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INVENTORIES (Tables) |
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Schedule of Inventories | Inventories as of September 30, 2017, and December 31, 2016, consisted of the following (in thousands):
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GOODWILL AND OTHER INTANGIBLES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Goodwill by Reportable Segment | The changes in goodwill by reportable segment from December 31, 2016, to September 30, 2017, were as follows (in thousands):
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Schedule of Purchased Finite-Lived Intangible Assets | The major classes of intangible assets acquired in 2016 and 2017 were as follows (in thousands of dollars):
Our purchased intangible assets were as follows (in thousands):
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Schedule of Purchased Indefinite-Lived Intangible Assets | Our purchased intangible assets were as follows (in thousands):
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Schedule of Estimated Remaining Amortization of Definite-Lived Intangible Assets | As of September 30, 2017, the estimated future aggregate amortization expense of definite-lived intangible assets from the acquisitions was as follows (in thousands):
As of September 30, 2017, the estimated remaining amortization of our definite-lived intangible assets was as follows (in thousands):
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ACCRUED LIABILITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Our accrued liabilities were as follows (in thousands):
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DEBT (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt and Capital Leases | Our debt and capital leases were as follows (in thousands):
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DERIVATIVES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Derivative Instruments | The following table presents the fair value of our derivative instruments as of September 30, 2017, and December 31, 2016 (in thousands):
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Schedule of Effect of Derivative Instruments | The following table presents the effect of derivative instruments on our condensed consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016, respectively, excluding income tax effects (in thousands):
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Schedule of Volume Positions | The table below presents our volume positions as of September 30, 2017, and December 31, 2016 (in thousands):
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FAIR VALUE DISCLOSURES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Hierarchy for Liabilities Measured at Fair Value on a Recurring Basis | The following tables present our fair value hierarchy for liabilities measured at fair value on a recurring basis as of September 30, 2017, and December 31, 2016 (in thousands):
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Reconciliation of the Changes in Level 3 Fair Value Measurements | A reconciliation of the changes in Level 3 fair value measurements from December 31, 2016, to September 30, 2017, is provided below (in thousands):
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NET EARNINGS (LOSS) PER SHARE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Components of Basic and Diluted Earnings (Loss) Per Share | The following is a reconciliation of the components of the basic and diluted earnings (loss) per share calculations for the three and nine months ended September 30, 2017 and 2016 (in thousands):
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Schedule of Potentially Dilutive Shares Excluded From Diluted Earnings (Loss) Per Share Calculations | The following table shows the type and number (in thousands) of potentially dilutive shares excluded from the diluted earnings (loss) per share calculations for the periods presented as their effect would have been anti-dilutive or they have not met their performance target:
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SEGMENT INFORMATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Certain Financial Information Relating to Continuing Operations by Reportable Segment | The following tables set forth certain financial information relating to our continuing operations by reportable segment (in thousands):
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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet | CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2017 (in thousands)
CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2016 (in thousands)
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Condensed Consolidating Statement of Operations | CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2017 (in thousands)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2016 (in thousands)
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Condensed Consolidating Statement of Cash Flows | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2017 (in thousands)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2016 (in thousands)
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RECENT ACCOUNTING PRONOUNCEMENTS AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Mar. 31, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Discrete tax benefits related to share-based payment accounting | $ 200 | ||
Increase in net cash provided by operating activities | $ 84,246 | $ 92,290 | |
Decrease to net cash provided by financing activities | $ (184,778) | (123,032) | |
New Accounting Pronouncement, Early Adoption, Effect | ASU 2016-09, Excess Tax Benefit Component | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase in net cash provided by operating activities | 3,800 | ||
Decrease to net cash provided by financing activities | $ 3,800 |
ACQUISITIONS - Schedule of Total Consideration and Amounts Related to the Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Business Acquisition [Line Items] | ||
Goodwill | $ 147,160 | $ 133,271 |
2017 Acquisitions | ||
Business Acquisition [Line Items] | ||
Accounts receivable | 1,126 | |
Inventory | 504 | |
Other current assets | 40 | |
Property, plant and equipment | 55,315 | |
Definite-lived intangible assets | 5,884 | |
Total assets acquired | 62,869 | |
Current liabilities | 674 | |
Total liabilities assumed | 674 | |
Goodwill | 12,164 | |
Total consideration (fair value) | $ 74,359 | |
2016 Acquisitions | ||
Business Acquisition [Line Items] | ||
Cash | 9 | |
Accounts receivable | 12,314 | |
Inventory | 1,249 | |
Other current assets | 68 | |
Property, plant and equipment | 34,918 | |
Definite-lived intangible assets | 47,144 | |
Total assets acquired | 95,702 | |
Current liabilities | 7,055 | |
Other long-term liabilities | 3,713 | |
Total liabilities assumed | 10,768 | |
Goodwill | 60,583 | |
Total consideration (fair value) | $ 145,517 |
ACQUISITIONS - Schedule of Estimated Future Aggregate Amortization Expense of Definite-Lived Intangible Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Year Ending December 31, | ||
2017 (remainder of the year) | $ 5,362 | |
2018 | 21,018 | |
2019 | 19,176 | |
2020 | 16,985 | |
2021 | 15,561 | |
Thereafter | 41,805 | |
Total | 119,907 | $ 129,495 |
2016 acquisitions | ||
Year Ending December 31, | ||
2017 (remainder of the year) | 2,350 | |
2018 | 9,398 | |
2019 | 9,133 | |
2020 | 8,604 | |
2021 | 7,679 | |
Thereafter | 5,427 | |
Total | $ 42,591 |
ACQUISITIONS - Actual and Pro Forma Impact of Acquisitions (Narrative) (Details) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017
USD ($)
business
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Sep. 30, 2016
USD ($)
business
|
Sep. 30, 2017
USD ($)
business
|
Sep. 30, 2016
USD ($)
business
|
|
Acquisitions 2016 and 2017 | ||||
Business Acquisition [Line Items] | ||||
Revenue | $ 39.9 | $ 31.8 | $ 122.0 | $ 34.9 |
Operating income (loss) | $ 4.8 | $ 6.2 | $ 17.4 | $ 6.2 |
West Texas acquisitions | West Texas market | ||||
Business Acquisition [Line Items] | ||||
Number of businesses excluded from unaudited pro forma information | business | 2 | 2 | 2 | 2 |
ACQUISITIONS - Schedule of Unaudited Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Business Combinations [Abstract] | ||||
Revenue | $ 361,262 | $ 349,431 | $ 1,026,865 | $ 972,564 |
Net income (loss) | $ 24,813 | $ 40,128 | $ 31,869 | $ 31,397 |
Net income per share, basic (in dollars per share) | $ 1.55 | $ 2.64 | $ 2.02 | $ 2.10 |
Net income per share, diluted (in dollars per share) | $ 1.49 | $ 2.47 | $ 1.92 | $ 1.94 |
ACQUISITIONS - Schedule of Adjustments Reflected in Pro Forma Net Income (Loss) and Net Income (Loss) Per Share Amounts (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Decrease (increase) in intangible amortization expense | $ (5,100) | $ (4,200) | $ (15,400) | $ (11,100) |
Decrease (increase) in income tax expense | (7,241) | (12,577) | (20,854) | (14,317) |
Acquisition-related Costs | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Decrease (increase) in intangible amortization expense | (203) | (1,655) | (538) | (6,254) |
Exclusion of buyer transaction costs | 334 | 584 | 867 | 1,395 |
Decrease (increase) in interest expense | 54 | (9) | 224 | (193) |
Decrease (increase) in income tax expense | $ 279 | $ 969 | $ (607) | $ (4,725) |
DISCONTINUED OPERATIONS - Schedule of Results of Discontinued Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income tax benefit | $ (100) | $ (100) | $ (300) | $ (300) |
Discontinued operations, disposed of by sale | Precast concrete operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 0 | 48 | 0 | 48 |
Operating expenses | 363 | 316 | 858 | 887 |
Loss from discontinued operations, before income taxes | (363) | (268) | (858) | (839) |
Income tax benefit | (141) | (102) | (334) | (321) |
Loss from discontinued operations, net of taxes | $ (222) | $ (166) | $ (524) | $ (518) |
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Discontinued Operations and Disposal Groups [Abstract] | ||
Cash flows from operating activities included in operating cash flows used in discontinued operations | $ 0.6 | $ 0.4 |
Cash flows from investing activities included in investing cash flows provided by discontinued operations | $ 0.6 | $ 0.4 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 41,486 | $ 38,752 |
Building materials for resale | 2,263 | 1,923 |
Other | 1,680 | 1,304 |
Total inventories | $ 45,429 | $ 41,979 |
GOODWILL AND OTHER INTANGIBLES - Schedule of Estimated Remaining Amortization of Definite-Lived Intangible Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Year Ending December 31, | ||
2017 (remainder of the year) | $ 5,362 | |
2018 | 21,018 | |
2019 | 19,176 | |
2020 | 16,985 | |
2021 | 15,561 | |
Thereafter | 41,805 | |
Total | $ 119,907 | $ 129,495 |
GOODWILL AND OTHER INTANGIBLES - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 5.1 | $ 4.2 | $ 15.4 | $ 11.1 |
Unfavorable lease intangibles | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Unfavorable lease intangible, gross carrying amount | 1.5 | 1.5 | ||
Unfavorable lease intangible, net carrying amount | $ 1.1 | $ 1.1 | ||
Weighted average remaining life | 5 years 1 month 20 days |
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued materials | $ 17,827 | $ 20,349 |
Accrued compensation and benefits | 16,724 | 16,553 |
Accrued insurance reserves | 16,409 | 15,206 |
Accrued interest | 12,871 | 2,217 |
Accrued property, sales and other taxes | 8,811 | 11,829 |
Deferred consideration | 6,448 | 9,227 |
Contingent consideration, current portion | 2,322 | 2,418 |
Deferred rent | 2,270 | 2,232 |
Other | 6,881 | 5,212 |
Total accrued liabilities | $ 90,563 | $ 85,243 |
DEBT - Schedule of Debt and Capital Leases (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Capital leases | $ 62,490 | $ 37,860 |
Debt issuance costs | (11,226) | (8,810) |
Total debt | 688,418 | 449,298 |
Less: current maturities | (24,938) | (16,654) |
Long-term debt, net of current maturities | 663,480 | 432,644 |
Unsecured notes | Senior unsecured notes due 2024 and unamortized premium | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 610,337 | $ 400,000 |
Effective interest rate (as a percent) | 6.56% | 6.62% |
Senior secured credit facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 0 | $ 0 |
Other financing | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 26,817 | $ 20,248 |
DEBT - Senior Unsecured Notes due 2024 (Narrative) (Details) - USD ($) |
9 Months Ended | ||||
---|---|---|---|---|---|
Jan. 09, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
Jun. 07, 2016 |
|
Debt Instrument [Line Items] | |||||
Net proceeds from the offering of the Additional Notes | $ 211,500,000 | $ 400,000,000 | |||
Senior unsecured debt | Senior unsecured notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 400,000,000 | ||||
Stated interest rate (as a percent) | 6.375% | 6.375% | |||
Additional Notes | Additional 2024 Notes | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 200,000,000.0 | ||||
Issue price (as a percent) | 105.75% | ||||
Net proceeds from the offering of the Additional Notes | $ 208,400,000 |
DEBT - Capital Lease and Other Financing (Narrative) (Details) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Debt Instrument [Line Items] | ||
Total original principal amount of leasing arrangements | $ 82,300,000 | |
Current portion of capital leases | $ 16,200,000 | $ 9,800,000 |
Capital leases and other financings | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 3.30% | 3.11% |
Promissory notes | ||
Debt Instrument [Line Items] | ||
Aggregate original principal amount | $ 44,400,000.0 | |
Promissory notes | Minimum | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 2.50% | |
Debt instrument term | 1 year | |
Promissory notes | Maximum | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 4.64% | |
Debt instrument term | 5 years | |
Capital leases | Minimum | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 0.01% | |
Debt instrument term | 2 years | |
Capital leases | Maximum | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 5.24% | |
Debt instrument term | 7 years |
WARRANTS (Details) - shares |
Aug. 31, 2017 |
Dec. 31, 2010 |
---|---|---|
Tranche One | Class A Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrants issued (in shares) | 1,500,000 | |
Warrants expired unexercised (in shares) | 112,638 | |
Tranche Two | Class B Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrants issued (in shares) | 1,500,000 | |
Warrants expired unexercised (in shares) | 114,775 |
DERIVATIVES - Schedule of Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Derivative [Line Items] | ||
Fair Value | $ 0 | $ 57,415 |
Derivative liabilities | Derivative Instruments Not Designated As Hedging Instruments Under ASC 815 | Warrants | ||
Derivative [Line Items] | ||
Fair Value | $ 0 | $ 57,415 |
DERIVATIVES - Schedule of Effect of Derivative Instruments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Derivative [Line Items] | ||||
Derivative loss (income) | $ (13,119) | $ (21,772) | $ 791 | $ (6,430) |
Derivative loss (income) | Derivative Instruments Not Designated As Hedging Instruments Under ASC 815 | Warrants | ||||
Derivative [Line Items] | ||||
Derivative loss (income) | $ (13,119) | $ (21,772) | $ 791 | $ (6,430) |
DERIVATIVES - Schedule of Volume Positions (Details) - shares shares in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Derivative Instruments Not Designated As Hedging Instruments Under ASC 815 | Warrants | ||
Derivative [Line Items] | ||
Number of Shares | 0 | 1,395 |
FAIR VALUE DISCLOSURES - Narrative (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Senior Unsecured Notes | Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Fair value of long-term debt | $ 645,700,000 | |
Contingent Consideration | Minimum | ||
Debt Instrument [Line Items] | ||
Discount rate | 5.00% | 5.00% |
Contingent Consideration | Maximum | ||
Debt Instrument [Line Items] | ||
Discount rate | 15.75% | 15.75% |
Revolving Credit Facility | Line of Credit | Third Loan Agreement | ||
Debt Instrument [Line Items] | ||
Amounts outstanding under the Third Loan Agreement | $ 0 | $ 0 |
FAIR VALUE DISCLOSURES - Reconciliation of the Changes in Level 3 Fair Value Measurements (Details) - Contingent Consideration $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Contingent Consideration | |
Beginning balance | $ 32,212 |
Acquisitions | 20,621 |
Total losses included in earnings | 2,047 |
Payment on contingent consideration | (2,326) |
Ending balance | $ 52,554 |
INCOME TAXES (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||||
Income tax expense allocated to continuing operations | $ 7,241,000 | $ 12,577,000 | $ 20,854,000 | $ 14,317,000 | |
Tax benefit allocated to discontinued operations | 100,000 | 100,000 | 300,000 | 300,000 | |
Tax benefit excluded from tax provision | 300,000 | 2,500,000 | |||
Derivative loss (income) | 13,119,000 | $ 21,772,000 | (791,000) | 6,430,000 | |
Unrecognized tax benefits | 0 | 0 | |||
Deferred tax asset balances | 0 | 0 | |||
Reduction to unrecognized tax benefits | 43,600,000 | 43,600,000 | |||
Reduction to deferred tax asset balances | 43,600,000 | 43,600,000 | |||
Total net deferred tax liability | $ 15,000,000 | 15,000,000 | $ 7,700,000 | ||
Unrecognized tax benefits | $ 100,000 | $ 4,100,000 |
NET EARNINGS (LOSS) PER SHARE - Reconciliation of Components of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Numerator: | ||||
Income from continuing operations | $ 24,276 | $ 38,122 | $ 29,109 | $ 24,970 |
Loss from discontinued operations, net of taxes | (222) | (166) | (524) | (518) |
Net income (loss) | $ 24,054 | $ 37,956 | $ 28,585 | $ 24,452 |
Denominator: | ||||
Basic weighted average common shares outstanding (in shares) | 16,028 | 15,222 | 15,745 | 14,978 |
Restricted stock awards and restricted stock units (in shares) | 84 | 67 | 112 | 84 |
Warrants (in shares) | 524 | 939 | 760 | 1,111 |
Stock options (in shares) | 15 | 12 | 16 | 13 |
Denominator for diluted earnings per share (in shares) | 16,651 | 16,240 | 16,633 | 16,186 |
NET EARNINGS (LOSS) PER SHARE - Schedule of Potentially Dilutive Shares Excluded From Diluted Earnings (Loss) Per Share Calculations (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares (in shares) | 60 | 35 | 62 | 35 |
Unvested restricted stock awards and restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares (in shares) | 60 | 35 | 62 | 35 |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Insurance programs | ||
Loss Contingencies [Line Items] | ||
Deductible retentions per occurrence | $ 1.0 | |
Amount accrued for estimated losses | 15.5 | $ 13.5 |
Performance bonds | ||
Loss Contingencies [Line Items] | ||
Contingent liability for performance | $ 36.2 |
SEGMENT INFORMATION - Revenue by Product (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 354,628 | $ 328,588 | $ 994,687 | $ 849,383 |
Ready-mixed concrete | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 323,567 | 297,858 | 909,145 | 770,479 |
Aggregate products | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 10,972 | 12,289 | 32,305 | 30,756 |
Aggregates distribution | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 8,423 | 7,381 | 21,376 | 18,662 |
Building materials | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 7,263 | 5,577 | 18,007 | 14,823 |
Lime | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 2,240 | 3,479 | 7,380 | 7,828 |
Hauling | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 1,465 | 1,320 | 4,066 | 4,301 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 698 | $ 684 | $ 2,408 | $ 2,534 |
SEGMENT INFORMATION - Identifiable Property, Plant And Equipment Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Total identifiable assets | $ 438,789 | $ 337,412 |
Reportable segment | Ready-mixed concrete | ||
Segment Reporting Information [Line Items] | ||
Total identifiable assets | 268,174 | 229,077 |
Reportable segment | Aggregate products | ||
Segment Reporting Information [Line Items] | ||
Total identifiable assets | 146,259 | 87,064 |
Other products and corporate | ||
Segment Reporting Information [Line Items] | ||
Total identifiable assets | $ 24,356 | $ 21,271 |
PENDING ACQUISITION (Details) CAD / shares in Units, $ in Thousands, CAD in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2017
CAD
|
Dec. 31, 2017
CAD
CAD / shares
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 29, 2017 |
|
Business Acquisition [Line Items] | ||||||
Promissory note received | $ 8,100 | CAD 10 | $ 8,063 | $ 0 | ||
Scenario, Forecast | Polaris | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price (in CAD per share) | CAD / shares | CAD 3.40 | |||||
Aggregate fully diluted equity value for Polaris (in CAD) | CAD | CAD 309 | |||||
Promissory note | Polaris Note | Polaris | ||||||
Business Acquisition [Line Items] | ||||||
Stated interest rate (as a percent) | 6.75% |
HURRICANES IRMA AND MARIA (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Unusual or Infrequent Item, or Both [Line Items] | |||
Total assets | $ 1,259,701 | $ 1,259,701 | $ 945,402 |
Inventory | 45,429 | 45,429 | 41,979 |
Property, plant and equipment, net | 438,789 | 438,789 | $ 337,412 |
U.S. Virgin Islands | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Total assets | 37,300 | 37,300 | |
Inventory | 3,300 | 3,300 | |
Cash and other current assets | 800 | 800 | |
Goodwill and other intangible assets | 8,500 | 8,500 | |
Property, plant and equipment, net | 24,000 | 24,000 | |
Hurricanes Irma and Maria | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Impaired tangible assets | 600 | 600 | |
Mineral reserves | U.S. Virgin Islands | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Property, plant and equipment, net | $ 11,800 | $ 11,800 |
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