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U.S. Concrete reports net loss

Published by , Assistant Editor
World Cement,

U.S. Concrete has reported its results for the quarter ending 30 June 2017. In 2Q17, the company reported a net loss of US$2.3 million, compared to a net loss of US$3.5 million in 2Q16.

Results for 2Q17 include the recognition of a US$15.8 million non-cash derivative related loss resulting from fair value changes in the Company's outstanding warrants compared to a US$2.6 million non-cash derivative related loss in the 2Q16. In addition, the company incurred US$2.4 million in acquisition-related costs during 2Q17 compared to US$0.4 million in 2Q16 as the Company has begun to significantly elevate the scale of our acquisition target profile resulting in increased diligence costs. During 2Q17, loss from continuing operations was US$2.2 million, as compared to a loss from continuing operations of US$3.3 million in 2Q16. Loss from continuing operations as a percentage of revenue was 0.6% in 2Q17, compared to a loss from continuing operations as a percentage of revenue of 1.2% 2Q16. Total Adjusted EBITDA increased to US$53.0 million in 2Q17, compared to US$34.1 million in 2Q16. Total Adjusted EBITDA as a percentage of revenue was 15.5% in 2Q17, compared to 12.4% in 2Q16. William J. Sandbrook, President and Chief Executive Officer of U.S. Concrete, stated, "Our strong second quarter results demonstrate that we continue to successfully build upon our leadership positions in the major metropolitan markets in which we operate and capitalise on positive demand trends. We drove these superior results with our development of market leading positions in high growth urban areas with difficult operating environments and lack of reliance on external stimulus or local government funding. Our market strategy continues to prove successful and allowed us to achieve our 26th straight quarter of year-over-year revenue growth and 25th straight quarter of ready-mixed concrete pricing growth. Additionally, we remain focused on operating excellence and capitalised on our strategic operating leverage, which drove incremental aggregate products segment and ready-mixed concrete segment Adjusted EBITDA margins of 72.7% and 27.2%, respectively, through the first half of 2017."

Mr. Sandbrook continued, "We are very optimistic for the balance of the year because we produced these results despite weather-related challenges in some of our major markets, including the Dallas/Fort Worthmetroplex, which recorded the fifth wettest June on record and the wettest June in the past decade. Underlying market demand remains strong with the Architectural Billing Index at its highest point in three years and recently announced gross domestic product growth in the United States of 2.6% driven by solid growth in personal spending, nonresidential investment and federal government spending. These underlying positive trends continue to support the growth in our backlog and drive increased bidding activity in our markets. We have good visibility into the next 12-18 months and expect the current growth in our volume and pricing and margin expansion to continue."

Mr. Sandbrook concluded, "We remain active in the acquisition market with a very robust pipeline, which continues to improve in number and profile, and expect to continue to supplement our organic growth with strategic expansion within our existing markets and potential further vertical integration. Our acquisition pipeline continues to provide opportunities for selective, accretive growth in both our ready-mixed concrete and aggregate products platforms, and we are very focused on the potential to enter into new major metropolitan areas."

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