KeyBanc Capital Markets
Basic Materials & Packaging Conference
September 16, 2009
2
Certain statements provided in this presentation, including those that express a belief, expectation or intention and
those that are not of historical fact, are “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve a
number of risks and uncertainties and are intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. These risks and uncertainties may cause actual results to differ
materially from expected results and are described in detail in filings made by U.S. Concrete, Inc. (the “Company”)
with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year
ended December 31, 2008 and subsequent Quarterly Reports on Form 10-Q.
The forward-looking statements speak only as of the date of this presentation. Investors are cautioned not to rely
unduly on them. Many of these forward-looking statements are based on expectations and assumptions about
future events that may prove to be inaccurate. The Company’s management considers these expectations and
assumptions to be reasonable, but they are inherently subject to significant business, economic, competitive,
regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which
are beyond the Company’s control. The Company undertakes no obligation to update these statements unless
required by applicable securities laws.
Also, this presentation will contain various financial measures not in conformity with generally accepted accounting
principles (“GAAP”). A reconciliation to the most comparable GAAP financial measure can be found at the end of
this presentation.
Forward-Looking Statement
Company Overview
4
Company Overview
Ready mixed concrete
6.5 million cubic yards in 2008
129 fixed concrete and 12 portable plants
Leading market position in 5 regions
Aggregate business
7 producing aggregate facilities
2 aggregate facilities leased to third parties
Precast products
Seven production facilities
Solid operating margins
Internal and external growth
opportunities
Top 10 Producer of ready-mixed concrete in the U.S.
SAN FRANCISCO
SANTA ROSA
SAN JOSE
MD
NJ
DE
NY
PA
FIXED READY-MIXED
PRECAST
BLOCK
AGGREGATES
Broad Geographic Footprint
HEADQUARTERS
5
6
Aggressively manage through current economic cycle
Implement cost controls throughout organization
Control capital spending
Manage balance sheet and capital structure
Evaluate existing asset base
Ensure assets are delivering appropriate returns
Increase focus on value-added and engineered sales
Conservatively evaluate internal and external growth
Our Strategy Today
Industry Overview
8
Over $60 billion in annual revenue
More than 2,300 independent ready-
mixed concrete producers
More than 3,500 precast concrete
manufacturers
Increasing vertical integration among
cement, aggregates and concrete
producers
Cemex / Rinker
Hanson / Heidelberg
Vulcan / Florida Rock
Votorantim / Prairie Materials
$27 billion
$26 billion
Source: National Ready-Mixed Concrete Association and National Precast Concrete Association
Large, Fragmented Market
($ in billions)
Concrete Products Market Size
$26.0
$36.0
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
Pre-Cast
Ready Mixed
Route to Market
Ready mixed concrete and concrete products are the
principle route to market for both cement and aggregates
9
CEMENTITIOUS
AGGREGATES
BITUMEN
MORTAR
READY MIX
CONCRETE PRODUCTS
ASPHALT + CONSTRUCTION
SERVICES
CUSTOMERS
Cement
Blended cement
Fly
-
ash
Slag
5%
75%
15%
2%
22%
15%
25%
36%
5%
%
Indicates amount of volume moved through each product
Home Builders
General Contractors/
Self Builders
Merchants/DIY
Civil Engineering
Contractors
Local Authorities /
Highway Agency
10
Ready-Mixed Concrete End Use Markets
Source: McGraw-Hill Construction
U.S. Concrete
Source: Company filings - 2008
Total U.S. Market
Commercial and industrial sectors generate higher margins
Streets and highways often self- performed by construction companies
U.S. Cement Consumption Forecast
11
(000 Metric Tons)
Source: Portland Cement Association – Summer 2009
Residential Demand
12
(26.0%)
Note: PCA Summer 2009
Stimulus Package
Construction Related Projects
$48 billion
$38 billion
$30 billion
$21 billion
Concrete Intensive
14
ARRA – Highway Stimulus Tracking
Source: PCA 2009 Summer Forecast
15
($ in 000)
U.S. Concrete
Gross
States
Apportionments
Obligations
Outlays
Obligated
Paid Out
Arizona
521,598
$
309,082
$
2,301
$
59.2%
0.4%
California
2,569,568
1,775,448
3,225
69.1%
0.1%
District of Columbia
123,508
112,714
163
91.3%
0.1%
Maryland
431,035
283,268
14,562
65.7%
3.4%
Michigan
847,205
478,108
14,120
56.4%
1.7%
New Jersey
651,774
463,189
841
71.1%
0.1%
New York
1,120,685
749,360
9,125
66.9%
0.8%
Oklahoma
464,655
405,028
56,470
87.2%
12.2%
Pennsylvania
1,026,429
852,435
18,093
83.0%
1.8%
Texas
2,250,015
1,125,866
11,719
50.0%
0.5%
TOTAL
10,006,472
$
6,554,498
$
130,619
$
65.5%
1.3%
Affect on U.S. Concrete
Significantly increased marketing focus on public works and
infrastructure spending for the past several months
Attempting to exploit current cost differential between
concrete and asphalt
Road paving
Parking lots
Aggressively bidding state DOT projects
Recently secured projects tied directly to the Stimulus Plan
Numerous projects are currently being bid
16
Company End Use Markets
Annual Revenue Trend
$402.2
$426.9
$526.4
$736.5
$804.0
$754.3
18
Annual Revenue Trend
19
Revenues by Segment
20
54%
Second Quarter YTD Comparison
Revenues by Major Market – Ready Mixed Concrete
21
37%
Second Quarter 2009 Revenues by Major Market
($ in millions)
Revenues by Major Market – Ready Mixed Concrete
22
53%
Second Quarter 2008 Revenues by Major Market
($ in millions)
Financial Highlights
2008 Performance Summary Analysis
Note 1: Included goodwill impairment expense, net of tax, of $119.8 million, $76.4 million and 26.8 million in 2008, 2007 and 2006, respectively
Goodwill EPS impact was ($3.17, ($1.99) and ($.72) per share for 2008, 2007, 2006, respectively
24
1
2008
2007
2006
2007 vs. 2008
2006 vs. 2008
Volume
6,517.0
7,176.0
6,679.0
-9.2%
-2.4%
Revenue
754.3
$
803.8
$
728.5
$
-6.2%
3.5%
EBITDA
40.7
$
75.4
$
74.7
$
-46.0%
-45.5%
EBITDA Margin
5.4%
9.4%
10.3%
-400
bps
-490
bps
Net Loss
1
(132.4)
$
(63.8)
$
(7.3)
$
N/A
N/A
EPS
1
(3.48)
$
(1.67)
$
(0.20)
$
N/A
N/A
Operating Cash Flow
29.7
$
44.3
$
39.5
$
-33.0%
-24.8%
Capital Expenditures, net
23.4
$
27.1
$
38.2
$
-13.7%
-38.7%
Free Cash Flow
6.3
$
17.2
$
1.3
$
-63.4%
384.6%
% Change
2Q09 Highlights
2Q09 revenues of $143.7 were 30.2% below 2Q08
Average ready-mixed sales prices increased 0.3% in 2Q09 compared to 2Q08
Higher Texas and Michigan pricing offset by northern New Jersey and California declines
Ready-mixed sales volumes (1,228,227 cubic yards) were 31.2% below 2Q08 (1,786,433 cubic
yards), same-store-sales volumes were down 35.3%
Ready-mixed material spread was 44.8% ($42.49 per cubic yard) vs. 42.0% ($39.76 per
cubic yard) in 2Q08. Material spread improved significantly in our Texas operations
and decreased in New Jersey.
Precast operations segment reflected 7.7% decrease in revenue compared to 2Q08. 2Q09
results, down $1.1 million (62.4%) from 2Q08
25
2Q09 Highlights
SG&A costs were $17.6 million or 12.3% of revenue, while 2Q08 was 8.6% of revenue.
Lower incentive and stock-based compensation accruals, lower T&E and lower office
expenses were offset by higher bad debt provision and professional fees.
Bad debt expense increased $1.1 million related to collection risks in Michigan and Atlantic
Legal fees $715K for the quarter $1.2 million YTD
2Q09 EBITDA was $9.6 million (6.7% margin), 2Q08 was $19.2 million (9.3% margin).
Income tax reflects “no benefit” on current losses. Full-year expected tax rate will
reflect valuation allowance on current losses.
Purchased $5.0 million face value of bonds for $2.0 million (40%), recorded gain of
$2.9 million.
26
2Q09 Highlights
2Q09 continuing EPS was $(0.11) compared to $0.08 in 2Q08.
Capital expenditures, net of disposals, were $2.1 million, down $1.8 million compared
to 2Q08.
Free cash flow decreased $15.4 million and was $(14.2) million compared with $1.2
million in 2Q08 on lower profitability in 2Q09. YTD 2009 free cash flow was $(8.5)
million, a decrease of $8.5 million from YTD 2008, due to lower profits, partially offset
by lower capital expenditures.
Cash at June 30, 2009 was $4.5 million, and revolving credit facility borrowings
were $26 million.
Available credit at June 30, 2009 was $48.1 million, down $43.0 million from
December 31, 2008. June 30, 2008 available credit was $91.1 with $3.7 million
outstanding.
27
28
Company Ready Mix Average Selling Prices
2Q09
2Q09
Market
vs. 2Q08
vs. 1Q09
DFW
4.9%
-0.2%
West Texas
5.9%
-0.4%
New Jersey / NYC
-4.4%
-5.3%
Northern California
-6.5%
-9.6%
Michigan
2.3%
-4.9%
Consolidated
0.3%
-4.2%
% Change
29
Percent of Sales
Company Ready Mix Material Spread – Second Quarter
2Q09
2Q08
1Q09
2Q09 vs 2Q08
2Q09 vs 1Q09
DFW
39.9%
32.7%
39.1%
720
80
West Texas
48.0%
44.0%
47.4%
400
60
New Jersey / NYC
45.2%
47.9%
45.7%
-270
-50
Northern California
47.1%
46.4%
46.3%
70
80
Michigan
45.6%
45.4%
47.5%
20
-190
Consolidated
44.8%
42.0%
44.1%
280
70
Basis Point Differential
Leverage Profile
30
June 30,
2009
,
200
9
December 31,
200
8
(in thousands except where otherwise indicated)
Cash and Cash Equivalents
$
4
,
468
$
5,323
Total Debt
3
11
,
065
305,988
Net Debt
30
6
,
597
300,665
Equity
65
,
873
80,363
LTM EBITDA (Bank Define
d)
33
,
474
44,703
LTM Fixed Charges
29,1
70
29,136
Total Debt to LTM EBITDA
9.3
x
6.8x
Net Debt to LTM EBITDA
9.2
x
6.7x
Fixed charge coverage
.
6x
1.1x
Debt to Capital
82.
5
%
79.2%
Weighted Average Cost of Debt
7
.
86
%
8.
14%
Available borrowing capacity (in
millions)
$
48
.1
$
91.1
31
Managing Through the Economic Cycle
Cost control initiatives continue
Headcount reductions
Reducing discretionary spending
Disposing of excess equipment
Temporarily idling plants
Controlling capital expenditures
Divesting underperforming assets
Limiting external growth initiatives
Focusing on value-added and engineered sales program and
infrastructure projects
32
Disclosure of Non-GAAP Financial Measures
U.S. CONCRETE, INC.
ADDITIONAL STATISTICS
(In thousands, unless otherwise noted; unaudited)
We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”).
However, our management believes that certain non-GAAP performance measures and ratios, which our management uses in
managing our business, may provide users of this financial information additional meaningful comparisons between current results
and results in prior operating periods. See the table below for presentations of our EBITDA and EBITDA margin for years 2006
through 2008 and Free Cash Flow for the years 2006 through 2008.
We define EBITDA as our net income (loss) from continuing operations plus the provision (benefit) for income taxes, net
interest expense, and noncash impairments, depreciation, depletion and amortization. We define EBITDA margin as the amount
determined by dividing EBITDA by total sales. We have included EBITDA and EBITDA margin in the accompanying tables because
they are often used by investors for valuation and for comparing our financial performance with the performance of other building
material companies. We also use EBITDA to monitor and compare the financial performance of our operations. 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 EBITDA may not be comparable to similarly titled measures other companies
report.
We define Free Cash Flow as cash provided by (used in) operations less capital expenditures for property, plant and
equipment, net of disposals. We consider Free Cash Flow to be an important indicator of our ability to service our debt and generate
cash for acquisitions and other strategic investments. Non-GAAP financial measures should be viewed in addition to, and not as an
alternative for, our reported operating results or cash flow from operations or any other measure of performance prepared in
accordance with GAAP.
Disclosure Non-GAAP Financial Measures
33
U.S. Concrete, Inc. and Subsidaries
Reconciliation of Net Loss to EBITDA
(unaudited)
(amounts in thousands)
FY
FY
FY
2Q09
2Q08
2008
2007
2006
Net loss attributable to stockholders
(3,994)
$
3,303
$
(132,297)
$
(63,760)
$
(7,303)
$
Addback:
Interest Expense, net
6,562
6,668
27,056
27,978
21,588
Income Tax Expense (Benefit)
(431)
2,202
(19,601)
48
1,348
Asset and Goodwill Impairments
-
-
135,631
82,242
38,948
Depreciation, Depletion, and Amortization Expense
7,450
7,035
29,902
28,882
20,141
EBITDA
9,587
$
19,208
$
40,691
$
75,390
$
74,722
$
EBITDA margin
6.7%
9.3%
5.4%
9.4%
10.3%
34
Disclosure of Non-GAAP Financial Measures
U.S. Concrete, Inc. and Subsidaries
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
(amounts in millions)
FY
FY
FY
2Q09
2Q08
2008
2007
2006
Net Cash Provided by Operating Activities
(12,103)
$
5,033
$
30,113
$
44,338
$
39,851
$
Purchases of property, plant and equiment
(2,470)
(6,616)
(28,425)
(29,529)
(41,931)
Proceeds from disposls of property, plant and equipment
387
2,736
3,968
2,574
3,699
Free Cash Flow
(14,186)
$
1,153
$
5,656
$
17,383
$
1,619
$
35
Disclosure Non-GAAP Financial Measures
U.S. Concrete, Inc. and Subsidaries
Reconciliation of Net Debt
(unaudited)
(amounts in thousands)
As of
As of
June 30, 2009
December 31, 2008
Total Debt, including current maturities and capital leas obligations
311
$
306
$
Less cash and cash equivalents
4
5
Net Debt
307
$
301
$
KeyBanc Capital Markets
Basic Materials & Packaging Conference
September 16, 2009