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U.S. Concrete Completes Michigan Region Acquisition
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01/16/2005
U.S. Concrete, Inc. (NASDAQ:RMIX) today announced that it has completed the acquisition of Builders' Redi-Mix, Inc., which produces and distributes ready- mixed concrete in the Greater Lansing, Michigan market. This transaction, which significantly expands the Company's market area in its Michigan region, is expected to contribute approximately $14 million in annual revenue during 2003. The consideration consisted of a combination of cash and stock. No further details were disclosed.
"The acquisition of Builders' Redi-Mix represents an excellent strategic complement to our business in the Michigan market and we intend to explore additional opportunities to further consolidate our position in this fragmented market," stated Eugene P. Martineau, Chief Executive Officer. "This acquisition extends our existing geographic coverage area and allows us to better leverage our management team in Michigan. We plan to immediately integrate this company into our existing operations and anticipate realizing meaningful synergies throughout the year."
The Company further announced that is has recently restructured its Dallas/Ft. Worth operations by exiting certain non-core businesses and, thereby, reducing its operating and administrative staff. The Company acquired these non-core businesses in its initial acquisition in the Dallas/Ft. Worth market area in 2000. This restructuring is intended to allow the regional management team to focus on its core ready-mixed concrete operations and to take the necessary steps to improve productivity and profitability. The non-core businesses exited by the Company generated approximately $12.9 million in annual revenue during 2002. In connection with this restructuring, the Company expects to record restructuring charges of approximately $0.3 million in the fourth quarter of 2002, which includes severance costs, lease termination fees and various other exit costs.
"We feel these steps are necessary to refocus our regional management team on our core ready-mixed concrete operations," stated Mr. Martineau. "Since we initiated this restructuring plan, we have already noticed a marked improvement in our outlook for the Dallas/Ft. Worth operations. We believe, with an improving economy, we should be able to return these operations to an acceptable level of profitability in a reasonable period of time."
FOURTH QUARTER AND FULL YEAR 2002 PRELIMINARY RESULTS
The statements in the following paragraphs are based on a preliminary analysis of the Company's unaudited fourth quarter 2002 results.
U.S. Concrete expects to report fourth quarter 2002 revenues of approximately $114 million and a net loss of $16.8 million or $0.62 per share. The net loss in the fourth quarter of 2002 includes an estimated $28.2 million pre-tax non-cash charge to reduce the carrying value of the Company's goodwill and certain other assets pursuant to Statement of Financial Accounting Standards ("SFAS") Nos. 142 and 144. This estimated net loss also includes $0.3 million of restructuring charges discussed above. Net income for the fourth quarter of 2002, excluding these non-recurring charges, is expected to be $2.1 million, or $0.08 per diluted share. This compares to reported revenues of $129 million and net income of $2.6 million, or $0.10 per diluted share for the fourth quarter of 2001. Fourth quarter results for 2001 include $1.4 million of goodwill amortization. The fourth quarter 2002 results were negatively impacted by severe weather in several of the Company's key operating markets, including extended and unseasonable rain and flooding in Northern California, unprecedented early frost occurrence in Michigan and extreme cold conditions along the Atlantic seaboard for a significant part of the month of December.
For the full year 2002, the Company expects to report revenues of $503 million and a net loss of $28.4 million, or $1.06 per share. The net loss in 2002 includes $28.5 million in pre-tax non-recurring charges as discussed above, as well as a $24.3 million after-tax non-cash charge recorded in the first quarter of 2002 in connection with the Company's initial adoption of SFAS No. 142. Excluding the non-recurring charges discussed above, the Company expects to report net income for the year ended December 31, 2002, of $14.8 million, or $0.55 per diluted share. This compares to reported revenues of $494 million and net income of $9.5 million, or $0.39 per diluted share for the full year 2001. Full year results for 2001 include $5.0 million of pre- tax charges and $5.4 million of goodwill amortization.
"After the first three quarters of 2002, we were tracking on our previously released earnings guidance for the year," stated Mr. Martineau. "Through November 2002, in spite of an extremely wet October, which is traditionally our most productive month, we remained optimistic we would achieve our fourth quarter and full year earnings guidance. Unfortunately, this past December turned out to be the most challenging month in recent memory, primarily due to extreme weather in Northern California. Not surprisingly, our earnings for the month, quarter and full year were negatively impacted."
OUTLOOK
The statements in the following paragraphs are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential effect of any mergers, acquisitions or other business combinations or divestitures that may be completed after the date of this press release.
U.S. Concrete expects revenues for the first quarter of 2003 in the range of $90 million to $95 million and a loss per share in the range of $0.10 to $0.11. For the full year 2003, the Company expects revenues in the range of $510 million to $520 million and earnings per share in the range of $0.58 to $0.62. These revenue and earnings per share amounts include the results of acquisitions completed as of the date of this news release.
U.S. Concrete anticipates issuing a press release on the fourth quarter and full year 2002 results before the market opens on Wednesday, February 19, 2003, and has scheduled a conference call for February 19, 2003 at 9:30 a.m. eastern time (8:30 a.m. central time) to review its fourth quarter and full year 2002 results. To participate in the call, dial 303-262-2076 at least ten minutes before the conference call begins and ask for the U.S. Concrete conference call. A replay of the conference call will be available through February 26, 2003. To access the replay, dial 303-590-3000 using the pass code of 524255.
Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by accessing www.us-concrete.com . To listen to the live call on the web, please visit the web site at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live web cast, an archive will be available shortly after the call.
U.S. Concrete provides ready-mixed concrete and related concrete products and services to the construction industry in several major markets in the United States. The Company has 88 fixed and nine portable ready-mixed concrete plants, eight pre-cast concrete plants, three concrete block plants and one aggregates quarry. During 2002, these facilities produced 5.4 million cubic yards of ready-mixed concrete, 7.1 million eight-inch equivalent block units and 1.2 million tons of aggregates. For more information on U.S. Concrete visit www.us-concrete.com .
This press release contains various forward-looking statements and information that are based on management's belief as well as assumptions made by and information currently available to management. Forward-looking information includes statements regarding expected revenues and earnings per diluted share for the first quarter of 2003 and the full year 2003. Although the Company 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; future growth in the construction industry; the ability of U.S. Concrete to complete acquisitions and to effectively integrate the operations of acquired companies; access to sufficient capital to fund U.S. Concrete's desired growth; development of adequate management infrastructure; departure of key personnel; access to labor; union disruption; competitive factors; government regulations; exposure to environmental liabilities; the cyclical and seasonal nature of U.S. Concrete's business; adverse weather; and general risks related to the industry and markets in which U.S. Concrete operates. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. These risks, as well as others, are discussed in greater detail in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2001, and the Company's subsequent Quarterly Reports on Form 10-Q.
Contacts: Michael W. Harlan, CFO U.S. Concrete, Inc. 713-499-6200
CONTACT: Michael W. Harlan, CFO of U.S. Concrete, Inc., +1-713-499-6200; or Ken Dennard, [email protected] , or Lisa Elliott, [email protected] , both of DRG&E, +1-713-529-6600, for U.S. Concrete, Inc.
