Investor Relations
Press Release
U.S. Concrete Announces First Quarter 2018 Results
FIRST QUARTER 2018 HIGHLIGHTS COMPARED TO FIRST QUARTER 2017
- Consolidated revenue increased 9.6% to
$327.8 million - Ready-mixed concrete revenue increased 5.0% to
$289.2 million - Ready-mixed concrete average sales price improved 2.0% to
$136.99 per cubic yard - Aggregate products revenue increased 83.3% to
$32.7 million - Aggregate products average sales price increased 14.1% to
$14.36 per ton - Completed three acquisitions, including ready-mixed concrete plants in key growth markets enhancing the Company's established presence in the
New York metro andPhiladelphia regions, and ready-mixed concrete plants and aggregate reserves withinTexas , which increased vertical integration - Ready-mixed concrete backlog increased 11.0% to an all-time high of 8.2 million cubic yards
FIRST QUARTER 2018 RESULTS COMPARED TO FIRST QUARTER 2017
Consolidated revenue increased 9.6% to
During the 2018 first quarter, operating income was
Selling, general and administrative ("SG&A") expenses were
During the 2018 first quarter, our loss from continuing operations was
For the first quarter of 2018, the net loss attributable to
MANAGEMENT COMMENTARY
Mr. Sandbrook continued, "We have a lot to be excited about heading into the peak months of the construction season and are optimistic about the rest of the year. We have grown and maintained record backlog levels, we have just scratched the surface on the production and earnings capacity of our recent acquisitions and demand remains high in all of our markets, which we intend to capitalize on in the coming months with the cooperation of more normalized weather."
Mr. Sandbrook concluded, "Our recent acquisition of
BALANCE SHEET AND LIQUIDITY
Net cash provided by operating activities in the first quarter of 2018 was
At March 31, 2018, the Company had cash and cash equivalents of
CONFERENCE CALL AND WEBCAST DETAILS
A live webcast will be available on the Investor Relations section of the Company's website at www.us-concrete.com. Please visit the website at least 15 minutes before the call begins to register, download and install any necessary audio software. A replay of the conference call and archive of the webcast will be available shortly after the call on the Investor Relations section of the Company's website at www.us-concrete.com.
ABOUT
For more information on
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This press release contains various forward-looking statements and information that are based on management's beliefs, as well as assumptions made by and information currently available to management. These forward-looking statements speak only as of the date of this press release. The Company disclaims any obligation to update these statements and cautions you not to rely unduly on them. Forward-looking information includes, but is not limited to, statements regarding: the expansion of the business; the opportunities and results of our acquisitions; the prospects for growth in new and existing markets; encouraging nature of volume and pricing increases; the business levels of our existing markets; ready-mixed concrete backlog; ability to maintain our cost structure and monitor fixed costs; ability to maximize liquidity, manage variable costs, control capital spending and monitor working capital usage; and the adequacy of current liquidity. Although U.S. Concrete believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that those expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions, including, among other matters: general and regional economic conditions; the level of activity in the construction industry; the ability of
(Tables Follow)
U.S. CONCRETE, INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
(Unaudited) |
|||||||
(in thousands, except per share amounts) |
|||||||
Three Months Ended |
|||||||
2018 |
2017 |
||||||
Revenue |
$ |
327,787 |
$ |
299,133 |
|||
Cost of goods sold before depreciation, depletion and amortization |
267,232 |
235,759 |
|||||
Selling, general and administrative expenses |
32,276 |
25,817 |
|||||
Depreciation, depletion and amortization |
20,575 |
15,859 |
|||||
Change in value of contingent consideration |
368 |
608 |
|||||
Gain on sale of assets, net |
(190) |
(192) |
|||||
Operating income |
7,526 |
21,282 |
|||||
Interest expense, net |
11,309 |
10,142 |
|||||
Derivative income |
— |
(1,856) |
|||||
Other income, net |
(1,619) |
(708) |
|||||
Income (loss) from continuing operations before income taxes |
(2,164) |
13,704 |
|||||
Income tax expense |
1,652 |
6,702 |
|||||
Income (loss) from continuing operations |
(3,816) |
7,002 |
|||||
Loss from discontinued operations, net of taxes |
— |
(122) |
|||||
Net income (loss) |
(3,816) |
6,880 |
|||||
Less: Net income attributable to non-controlling interest |
(42) |
— |
|||||
Net income (loss) attributable to U.S. Concrete |
$ |
(3,858) |
$ |
6,880 |
|||
Basic income (loss) per share attributable to U.S. Concrete: |
|||||||
Income (loss) from continuing operations |
$ |
(0.23) |
$ |
0.45 |
|||
Loss from discontinued operations, net of taxes |
— |
(0.01) |
|||||
Net income (loss) per share attributable to U.S. Concrete - basic |
$ |
(0.23) |
$ |
0.44 |
|||
Diluted income (loss) per share attributable to U.S. Concrete: |
|||||||
Income (loss) from continuing operations |
$ |
(0.23) |
$ |
0.43 |
|||
Loss from discontinued operations, net of taxes |
— |
(0.01) |
|||||
Net income (loss) per share attributable to U.S. Concrete - diluted |
$ |
(0.23) |
$ |
0.42 |
|||
Weighted average shares outstanding: |
|||||||
Basic |
16,423 |
15,498 |
|||||
Diluted |
16,423 |
16,483 |
U.S. CONCRETE, INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(in thousands) |
|||||||
March 31, 2018 |
December 31, 2017 |
||||||
(Unaudited) |
|||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
36,616 |
$ |
22,581 |
|||
Trade accounts receivable, net |
213,354 |
214,221 |
|||||
Inventories |
47,341 |
48,085 |
|||||
Prepaid expenses |
9,460 |
5,297 |
|||||
Other receivables |
16,073 |
19,191 |
|||||
Other current assets |
1,479 |
2,310 |
|||||
Total current assets |
324,323 |
311,685 |
|||||
Property, plant and equipment, net |
664,594 |
636,268 |
|||||
Goodwill |
220,107 |
204,731 |
|||||
Intangible assets, net |
126,134 |
118,123 |
|||||
Other assets |
7,161 |
5,327 |
|||||
Total assets |
$ |
1,342,319 |
$ |
1,276,134 |
|||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
115,729 |
$ |
117,070 |
|||
Accrued liabilities |
84,038 |
65,420 |
|||||
Current maturities of long-term debt |
25,902 |
25,951 |
|||||
Total current liabilities |
225,669 |
208,441 |
|||||
Long-term debt, net of current maturities |
729,826 |
667,385 |
|||||
Other long-term obligations and deferred credits |
84,533 |
93,341 |
|||||
Deferred income taxes |
3,123 |
4,825 |
|||||
Total liabilities |
1,043,151 |
973,992 |
|||||
Commitments and contingencies |
|||||||
Equity: |
|||||||
Preferred stock |
— |
— |
|||||
Common stock |
18 |
18 |
|||||
Additional paid-in capital |
321,216 |
319,016 |
|||||
Accumulated deficit |
(17,642) |
(13,784) |
|||||
Treasury stock, at cost |
(26,032) |
(24,799) |
|||||
Total shareholders' equity |
277,560 |
280,451 |
|||||
Non-controlling interest |
21,608 |
21,691 |
|||||
Total equity |
299,168 |
302,142 |
|||||
Total liabilities and equity |
$ |
1,342,319 |
$ |
1,276,134 |
U.S. CONCRETE, INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(Unaudited) |
|||||||
(in thousands) |
|||||||
Three Months Ended |
|||||||
2018 |
2017 |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||
Net income (loss) |
$ |
(3,816) |
$ |
6,880 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation, depletion and amortization |
20,575 |
15,859 |
|||||
Amortization of debt issuance costs |
463 |
519 |
|||||
Amortization of discount on long-term incentive plan and other accrued interest |
194 |
185 |
|||||
Amortization of premium on long-term debt |
(388) |
(388) |
|||||
Derivative income |
— |
(1,856) |
|||||
Change in value of contingent consideration |
368 |
608 |
|||||
Net gain on disposal of assets |
(190) |
(192) |
|||||
Deferred income taxes |
(547) |
2,761 |
|||||
Provision for doubtful accounts and customer disputes |
982 |
718 |
|||||
Stock-based compensation |
2,172 |
1,619 |
|||||
Unrealized foreign exchange gain |
(13) |
— |
|||||
Changes in assets and liabilities, excluding effects of acquisitions: |
|||||||
Accounts receivable |
(128) |
6,749 |
|||||
Inventories |
1,418 |
182 |
|||||
Prepaid expenses and other current assets |
(1,785) |
(2,246) |
|||||
Other assets and liabilities |
(1,346) |
(77) |
|||||
Accounts payable and accrued liabilities |
7,977 |
(1,777) |
|||||
Net cash provided by operating activities |
25,936 |
29,544 |
|||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||
Purchases of property, plant and equipment |
(8,375) |
(10,718) |
|||||
Payments for acquisitions, net of cash acquired |
(60,250) |
(2,731) |
|||||
Proceeds from disposals of property, plant and equipment |
262 |
485 |
|||||
Proceeds from disposal of businesses |
72 |
294 |
|||||
Insurance proceeds from property loss claims |
1,634 |
— |
|||||
Net cash used in investing activities |
(66,657) |
(12,670) |
|||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||
Proceeds from revolver borrowings |
135,650 |
— |
|||||
Repayments of revolver borrowings |
(69,650) |
— |
|||||
Proceeds from issuance of debt |
— |
211,500 |
|||||
Proceeds from exercise of warrants and stock options |
28 |
327 |
|||||
Payments of other long-term obligations |
(3,540) |
(4,500) |
|||||
Payments for other financing |
(6,419) |
(4,246) |
|||||
Debt issuance costs |
— |
(3,170) |
|||||
Other treasury share purchases |
(1,233) |
(735) |
|||||
Net cash provided by financing activities |
54,836 |
199,176 |
|||||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS |
(80) |
— |
|||||
NET INCREASE IN CASH AND CASH EQUIVALENTS |
14,035 |
216,050 |
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
22,581 |
75,774 |
|||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
36,616 |
$ |
291,824 |
UNAUDITED SEGMENT FINANCIAL INFORMATION
Our two reportable segments consist of ready-mixed concrete and aggregate products. Our chief operating decision maker evaluates segment performance and allocates resources based on Adjusted EBITDA. The following tables set forth certain unaudited financial information relating to our continuing operations by reportable segment (in thousands, except average sales price amounts):
Three Months Ended |
||||||||
2018 |
2017 |
|||||||
Revenue: |
||||||||
Ready-mixed concrete |
||||||||
Sales to external customers |
$ |
289,240 |
$ |
275,456 |
||||
Aggregate products |
||||||||
Sales to external customers |
19,455 |
9,297 |
||||||
Intersegment sales |
13,223 |
8,527 |
||||||
Total aggregate products |
32,678 |
17,824 |
||||||
Total reportable segment revenue |
321,918 |
293,280 |
||||||
Other products and eliminations |
5,869 |
5,853 |
||||||
Total revenue |
$ |
327,787 |
$ |
299,133 |
||||
Reportable Segment Adjusted EBITDA |
||||||||
Ready-mixed concrete Adjusted EBITDA |
$ |
40,967 |
$ |
41,504 |
||||
Aggregate products Adjusted EBITDA |
$ |
5,030 |
$ |
3,997 |
Three Months Ended |
Year- |
|||||||||
2018 |
2017 |
Change |
||||||||
Ready-Mixed Concrete |
||||||||||
Average sales price per cubic yard |
$ |
136.99 |
$ |
134.28 |
2.0 |
% |
||||
Sales volume in cubic yards |
2,095 |
2,049 |
2.2 |
% |
||||||
Aggregate Products |
||||||||||
Average sales price per ton |
$ |
14.36 |
$ |
12.59 |
14.1 |
% |
||||
Sales volume in tons |
2,135 |
1,246 |
71.3 |
% |
NON-GAAP FINANCIAL MEASURES
(Unaudited)
Total Adjusted EBITDA and Total Adjusted EBITDA Margin
Total Adjusted EBITDA and Total Adjusted EBITDA Margin are non-GAAP financial measures. We define Total Adjusted EBITDA as our income (loss) from continuing operations, excluding the impact of income tax expense (benefit), depreciation, depletion and amortization, net interest expense, derivative (income) loss, non-cash change in value of contingent consideration, hurricane-related losses, quarry dredge costs for specific event, purchase accounting adjustments for inventory, non-cash stock compensation expense, acquisition-related costs and officer transition expenses. Acquisition-related costs consist of fees and expenses for accountants, lawyers and other professionals incurred during the negotiation and closing of strategic acquisitions and certain acquired entities' management severance costs. Acquisition-related costs do not include fees or expenses associated with post-closing integration of strategic acquisitions. We define Total Adjusted EBITDA Margin as the amount determined by dividing Total Adjusted EBITDA by total revenue. We have included Total Adjusted EBITDA and Total Adjusted EBITDA Margin herein because they are widely used by investors for valuation and comparing our financial performance with the performance of other building material companies. We also use Total Adjusted EBITDA and Total Adjusted EBITDA Margin to monitor and compare the financial performance of our operations. Total Adjusted EBITDA does not give effect to the cash we must use to service our debt or pay our income taxes and thus does not reflect the funds actually available for capital expenditures. In addition, our presentation of Total Adjusted EBITDA may not be comparable to similarly titled measures other companies report. Total Adjusted EBITDA and Total Adjusted EBITDA Margin are not intended to be used as an alternative to any measure of our performance in accordance with GAAP. The following table reconciles Total Adjusted EBITDA to the most directly comparable GAAP financial measure, which is income (loss) from continuing operations (in thousands).
Three Months Ended |
|||||||
2018 |
2017 |
||||||
Total Adjusted EBITDA Reconciliation |
|||||||
Income (loss) from continuing operations |
$ |
(3,816) |
$ |
7,002 |
|||
Add: Income tax expense |
1,652 |
6,702 |
|||||
Income (loss) from continuing operations before income taxes |
(2,164) |
13,704 |
|||||
Add: Depreciation, depletion and amortization |
20,575 |
15,859 |
|||||
Add: Interest expense, net |
11,309 |
10,142 |
|||||
Add: Derivative income |
— |
(1,856) |
|||||
Add: Non-cash change in value of contingent consideration |
368 |
608 |
|||||
Add: Hurricane-related losses |
307 |
— |
|||||
Add: Quarry dredge costs for specific event |
191 |
— |
|||||
Add: Purchase accounting adjustments for inventory |
706 |
— |
|||||
Add: Non-cash stock compensation expense |
2,172 |
1,619 |
|||||
Add: Acquisition-related costs |
2,539 |
413 |
|||||
Add: Officer transition expenses |
— |
584 |
|||||
Total Adjusted EBITDA |
$ |
36,003 |
$ |
41,073 |
|||
Income (loss) from continuing operations margin |
(1.2) |
% |
2.3 |
% |
|||
Total Adjusted EBITDA Margin |
11.0 |
% |
13.7 |
% |
Adjusted Gross Profit and Adjusted Gross Margin
Adjusted Gross Profit and Adjusted Gross Margin are non-GAAP financial measures. We define Adjusted Gross Profit as our operating income (loss), excluding the impact of depreciation, depletion and amortization ("DD&A"), selling, general and administrative expenses, change in value of contingent consideration, hurricane-related losses in COGS before DD&A, purchase accounting adjustments for inventory, quarry dredge costs for specific event, and loss (gain) on disposal of assets, net. We define Adjusted Gross Margin as the amount determined by dividing Adjusted Gross Profit by total revenue. We have included Adjusted Gross Profit and Adjusted Gross Margin herein because they are widely used by investors for valuing and comparing our financial performance from period to period. We also use Adjusted Gross Profit and Adjusted Gross Margin to monitor and compare the financial performance of our operations. Adjusted Gross Profit and Adjusted Gross Margin are not intended to be used as an alternative to any measure of our performance in accordance with GAAP. The following table reconciles Adjusted Gross Profit to the most directly comparable GAAP financial measure, which is operating income (in thousands).
Three Months Ended |
|||||||
March 31, |
|||||||
2018 |
2017 |
||||||
Adjusted Gross Profit Reconciliation |
|||||||
Operating income |
$ |
7,526 |
$ |
21,282 |
|||
Add: Depreciation, depletion and amortization |
20,575 |
15,859 |
|||||
Add: Selling, general and administrative expenses |
32,276 |
25,817 |
|||||
Add: Change in value of contingent consideration |
368 |
608 |
|||||
Add: Hurricane-related losses in COGS before DD&A |
277 |
— |
|||||
Add: Purchase accounting adjustments for inventory |
706 |
— |
|||||
Add: Quarry dredge costs for specific event |
191 |
— |
|||||
Less: Gain on disposal of assets, net |
(190) |
(192) |
|||||
Adjusted Gross Profit (non-GAAP) |
$ |
61,729 |
$ |
63,374 |
|||
Operating income margin |
2.3 |
% |
7.1 |
% |
|||
Adjusted Gross Margin (non-GAAP) |
18.8 |
% |
21.2 |
% |
Adjusted SG&A and Adjusted SG&A as a Percentage of Revenue
Adjusted selling, general and administrative ("SG&A") and Adjusted SG&A as a percentage of revenue are non-GAAP financial measures. We define Adjusted SG&A as selling, general and administrative expenses, excluding the impact of non-cash stock compensation expense, acquisition-related costs, officer transition expenses and hurricane-related losses. We define Adjusted SG&A as a percentage of revenue as Adjusted SG&A divided by total revenue. We have included Adjusted SG&A and Adjusted SG&A as a percentage of revenue herein because they are used by investors to compare our SG&A leverage with the performance of other building materials companies. We use Adjusted SG&A and Adjusted SG&A as a percentage of revenue to monitor and compare the financial performance of our operations. Adjusted SG&A and Adjusted SG&A as a percentage of revenue are not intended to be used as an alternative to any measure of our performance under GAAP. The following table reconciles Adjusted SG&A to the most directly comparable GAAP financial measure, which is SG&A (in thousands).
Three Months Ended |
|||||||
March 31, |
|||||||
2018 |
2017 |
||||||
Adjusted SG&A |
|||||||
Selling, general and administrative expenses |
$ |
32,276 |
$ |
25,817 |
|||
Less: Non-cash stock compensation expense |
(2,172) |
(1,619) |
|||||
Less: Acquisition-related costs |
(2,539) |
(413) |
|||||
Less: Officer transition expenses |
— |
(584) |
|||||
Less: Hurricane-related losses |
(30) |
— |
|||||
Adjusted SG&A (non-GAAP) |
$ |
27,535 |
$ |
23,201 |
|||
SG&A as a percentage of revenues |
9.8 |
% |
8.6 |
% |
|||
Adjusted SG&A as a percentage of revenues (non-GAAP) |
8.4 |
% |
7.8 |
% |
Adjusted Net Income from Continuing Operations and Adjusted Net Income from Continuing Operations per Diluted Share
Adjusted Net Income from Continuing Operations and Adjusted Net Income from Continuing Operations per Diluted Share are non-GAAP financial measures. We define Adjusted Net Income from Continuing Operations as net income (loss) attributable to
We have included Adjusted Net Income from Continuing Operations and Adjusted Net Income from Continuing Operations per Diluted Share herein because they are used by investors for valuation and comparing our financial performance with the performance of other building material companies. We use Adjusted Net Income from Continuing Operations and Adjusted Net Income from Continuing Operations per Diluted Share to monitor and compare the financial performance of our operations. Adjusted Net Income from Continuing Operations and Adjusted Net Income from Continuing Operations per Diluted Share are not intended to be used as an alternative to any measure of our performance in accordance with GAAP.
The following tables reconcile (i) Adjusted Net Income from Continuing Operations to the most directly comparable GAAP financial measure, which is net income (loss) attributable to
Three Months Ended |
|||||||
2018 |
2017 |
||||||
Adjusted Net Income from Continuing Operations Reconciliation |
|||||||
Net income (loss) attributable to U.S. Concrete |
$ |
(3,858) |
$ |
6,880 |
|||
Add: Net income attributable to non-controlling interest |
42 |
— |
|||||
Add: Loss from discontinued operations, net of taxes |
— |
122 |
|||||
Add: Income tax expense |
1,652 |
6,702 |
|||||
Income (loss) from continuing operations before income taxes |
(2,164) |
13,704 |
|||||
Less: Derivative income |
— |
(1,856) |
|||||
Add: Non-cash change in value of contingent consideration |
368 |
608 |
|||||
Add: Hurricane-related losses |
307 |
— |
|||||
Add: Quarry dredge costs for specific event |
191 |
— |
|||||
Add: Purchase accounting adjustments for inventory |
706 |
— |
|||||
Add: Non-cash stock compensation expense |
2,172 |
1,619 |
|||||
Add: Acquisition-related costs |
2,539 |
413 |
|||||
Add: Officer transition expenses |
— |
584 |
|||||
Adjusted income from continuing operations before income taxes |
4,119 |
15,072 |
|||||
Less: Normalized income tax expense(1) |
1,071 |
3,919 |
|||||
Adjusted Net Income from Continuing Operations (non-GAAP) |
$ |
3,048 |
$ |
11,153 |
(1) Assumes a normalized effective tax rate of 26% in both periods. |
Three Months Ended |
|||||||
2018 (1) |
2017 |
||||||
Adjusted Net Income from Continuing Operations per Diluted Share Reconciliation |
|||||||
Net income (loss) attributable to U.S. Concrete per diluted share |
$ |
(0.23) |
$ |
0.42 |
|||
Add: Net income attributable to non-controlling interest |
— |
— |
|||||
Add: Loss from discontinued operations, net of taxes per diluted share |
— |
0.01 |
|||||
Add: Income tax expense per diluted share |
0.10 |
0.40 |
|||||
Income (loss) from continuing operations before income taxes per diluted share |
(0.13) |
0.83 |
|||||
Less: Impact of derivative income |
— |
(0.11) |
|||||
Add: Impact of non-cash change in value of contingent consideration |
0.02 |
0.04 |
|||||
Add: Impact of hurricane-related losses |
0.02 |
— |
|||||
Add: Impact of quarry dredge costs for specific event |
0.01 |
— |
|||||
Add: Impact of purchase accounting adjustments for inventory |
0.04 |
— |
|||||
Add: Impact of non-cash stock compensation expense |
0.13 |
0.10 |
|||||
Add: Impact of acquisition-related costs |
0.16 |
0.02 |
|||||
Add: Impact of officer transition expenses |
— |
0.03 |
|||||
Adjusted income from continuing operations before income taxes |
0.25 |
0.91 |
|||||
Less: Normalized income tax expense(2) |
0.07 |
0.23 |
|||||
Adjusted Net Income from Continuing Operations per Diluted Share (non-GAAP) |
$ |
0.18 |
$ |
0.68 |
(1) Net loss per diluted share for the three months ended March 31, 2018 excludes common stock equivalents of 0.1 million shares from our options and restricted stock as their impact is anti-dilutive based on the net loss for the period; however, these common stock equivalents are included in Adjusted Net Income from Continuing Operations per Diluted Share. |
|||||||
(2) Assumes a normalized effective tax rate of 26% in both periods. |
Adjusted Free Cash Flow
Adjusted Free Cash Flow is a non-GAAP financial measure. We define Adjusted Free Cash Flow as net cash provided by operating activities less purchases of property, plant and equipment, plus proceeds from the disposals of property, plant and equipment, proceeds from disposal of businesses and insurance proceeds from property loss claims. We consider Adjusted Free Cash Flow to be an important indicator of our ability to service our debt and generate cash for acquisitions and other strategic investments. However, Adjusted Free Cash Flow is not intended to be used as an alternative to any measure of our liquidity in accordance with GAAP. The following table reconciles Adjusted Free Cash Flow to the most directly comparable GAAP financial measure, which is net cash provided by operating activities (in thousands).
Three Months Ended |
|||||||
2018 |
2017 |
||||||
Adjusted Free Cash Flow Reconciliation |
|||||||
Net cash provided by operating activities |
$ |
25,936 |
$ |
29,544 |
|||
Less: Purchases of property, plant and equipment |
(8,375) |
(10,718) |
|||||
Add: Proceeds from the disposals of property, plant and equipment |
262 |
485 |
|||||
Add: Proceeds from disposal of businesses |
72 |
294 |
|||||
Add: Insurance proceeds from property loss claims |
1,634 |
— |
|||||
Adjusted Free Cash Flow (non-GAAP) |
$ |
19,529 |
$ |
19,605 |
Net Debt
Net Debt is a non-GAAP financial measure. We define Net Debt as total debt, including current maturities and capital lease obligations, less cash and cash equivalents. We believe that Net Debt is useful to investors as a measure of our financial position. We use Net Debt to monitor and compare our financial position from period to period. However, Net Debt is not intended to be used as an alternative to any measure of our financial position in accordance with GAAP. The following table reconciles Net Debt to the most directly comparable GAAP financial measure, which is total debt, including current maturities and capital lease obligations (in thousands).
As of |
As of |
||||||
March 31, 2018 |
December 31, 2017 |
||||||
Net Debt Reconciliation |
|||||||
Total debt, including current maturities and capital lease obligations |
$ |
755,728 |
$ |
693,336 |
|||
Less: cash and cash equivalents |
36,616 |
22,581 |
|||||
Net Debt (non-GAAP) |
$ |
719,112 |
$ |
670,755 |
Net Debt to Total Adjusted EBITDA
Net Debt to Total Adjusted EBITDA is a non-GAAP financial measure. We define Net Debt to Total Adjusted EBITDA as Net Debt divided by Total Adjusted EBITDA for the applicable last twelve-month period. We define Total Adjusted EBITDA as our income (loss) from continuing operations, excluding the impact of income tax expense (benefit), depreciation, depletion and amortization, net interest expense, loss on extinguishment of debt, derivative (income) loss, non-cash change in value of contingent consideration, impairment of goodwill and other assets, hurricane-related losses, quarry dredge costs for specific event, purchase accounting adjustments for inventory, foreign currency losses resulting from Polaris acquisition, non-cash stock compensation expense, acquisition-related costs and officer transition expenses. We believe that Net Debt to Total Adjusted EBITDA is useful to investors as a measure of our financial position. We use this measure to monitor and compare our financial position from period to period. However, Net Debt to Total Adjusted EBITDA is not intended to be used as an alternative to any measure of our financial position in accordance with GAAP. The following table presents our calculation of Net Debt to Total Adjusted EBITDA and the most directly comparable GAAP ratio, which is total debt to last twelve months ("LTM") income from continuing operations (in thousands).
Twelve Month Period |
|||
April 1, 2017 to |
|||
March 31, 2018 |
|||
Total Adjusted EBITDA Reconciliation |
|||
Income from continuing operations |
$ |
15,448 |
|
Add: Income tax expense |
7,386 |
||
Income from continuing operations before income taxes |
22,834 |
||
Add: Depreciation, depletion and amortization |
72,514 |
||
Add: Interest expense, net |
43,124 |
||
Add: Loss on extinguishment of debt |
60 |
||
Add: Derivative loss |
2,647 |
||
Add: Non-cash change in value of contingent consideration |
7,670 |
||
Add: Impairment of goodwill and other assets |
6,238 |
||
Add: Hurricane-related losses |
3,345 |
||
Add: Quarry dredge costs for specific event |
3,581 |
||
Add: Purchase accounting adjustments for inventory |
1,993 |
||
Add: Foreign currency losses resulting from Polaris acquisition |
1,949 |
||
Add: Non-cash stock compensation expense |
8,838 |
||
Add: Acquisition-related costs |
12,258 |
||
Add: Officer transition expenses |
200 |
||
Total Adjusted EBITDA |
$ |
187,251 |
|
Net Debt |
$ |
719,112 |
|
Total debt to LTM income from continuing operations |
48.92x |
||
Net Debt to Total Adjusted EBITDA as of March 31, 2018 (non-GAAP) |
3.84x |
Source: USCR-E
Contact: |
U.S. Concrete, Inc. Investor Relations |
844-828-4774 |
|
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