USCR - Earnings call transcript Q2 2019

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Operator

Good morning, ladies and gentlemen, and thank you for standing by, and welcome to the U.S. Concrete, Incorporated Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call maybe recorded.

to conference like to now would turn over the Mr. I Chief Senior Vice Kunz, Financial President John and Officer.

John Kunz

Lady. to quarter U.S. you, Concrete's Thank Good second XXXX morning, earnings and welcome call.

Chairman call our Pruitt, and Chief Bill on and President today Officer. me Executive Officer; the Sandbrook, Joining our and Operating Chief Ronnie are

after some open we the call will make which We to prepared remarks will questions.

items. to to cover Before like I would turn Bill, the I call few administrative over a

our website. presentation facilitate of Investor discussion Relations available is the to in A today's section

undertake which As and X as call or differ actual by Such Litigation Page update subject detailed include Except the will actual of no are Act conform could Securities such to today's statements on to will or results expectations. presentation, our obligation of cause our other changes risks, in Private forward-looking XXXX. to defined statements to as statements factors materially. results Reform uncertainties forward-looking we legally required, U.S.

the please the For SEC. a with list risk to filings factors, of refer contained legal our and these in factors disclaimers

note today. the the other X-K non-GAAP earlier regarding the call we reconciliations measures on Form you find that Please information financial in will filed and discuss can that this

releases, distribution Relations If list in up to website an of be future under news you our would Investor on please section to like email sign receive the email alerts.

under of website today's will be it our call, available and would you of Investor to to like Relations the replay If Presentations. section a listen in Events

With that, to Bill. I'll turn over now the call

William Sandbrook

Good call. to our morning, and John. ladies welcome Thanks, gentlemen, and

use Texas of And the to dry plays and dominate accept roads, of off morning, order construction big-box in particularly and the the quarter our were standing roads second runways in of short-term precipitation Texas horizontal water lies markets. reflective our in concrete, that reported rely which release such horizontal realities ultimate complication the of the that warehouses access out this rainfall sites and projects ready-mixed ability to job on added our unfortunate As press as concrete. the downstream work in fact in drain results

sales weather multiple single with of days Thus, can lost be event.

in year’s rain during Specifically prior to inches Worth, the second the only XX second compared inches quarter. over four in experienced Dallas/Fort quarter of we

we consecutive the in importantly, DFW measurable experienced past with of the of XX weeks months. inches in More XX rain rainfall over market XX

not ready-mixed It XXX,XXX volume our in cubic is and Texas, thus surprising Worth was West down that yards. Dallas/Fort

to another our sand was supplies our inability tons gravel down Additionally, aggregate volume quarter of flooding an the eruption and in our due the the as XXX,XXX run plants a major of operation one largely during on River DFW. that result Red and to sand

second accounted $XX the our ready-mixed Texas for down XX% for surprise impact adjusted volume that the EBITDA weather prior our million is in the company Texas events total the from was As financial with meaningful of no approximately year. with quarter

Page corresponding On compares history our XX-month a X each concrete included month. in that to of DFW the rainfall volumes we've market our presentation, in

growth can Texas although August market by second most February rain remain this year, was during by which is construction solid quarter. in did the last reflective of see when strength subsides it far volume that it's year of the as impressive, and and the our impacted in You the Texas, fact of and overall in the of July weather

in significant rainfall plagued are also our regions with other We as well.

quarter, impacted was quarter. significantly in following May know what weather Northern rainfall the most and versus California, the XX XX the a experienced we York, second you is wettest first years in over in last already years New In

second was pace in While deferred the where quarter strong the inventory we in Polaris first construction the resulting quarter. aggregate into delays, in the deferred buildup for from in The these during market in shipping Northern quarter carried during California activity terminals reported first inventory distribution shipments resulted the the results excess by very over despite Polaris. the market weather quarter the steady

more contextual degrade not pits time. heavy construction quarries move the hard markets. perishable. to do Now realities materials and let's are of with Deposits some rock They sand at not and related and gravel industrial

In inherent to fact, building in due due permitting, on time. increasing over difficulties value in to ever grieved quarry the new operations restrictions spend to grow

Likewise, periods. completion and into construction actual Thus weather, our not project pushed the of concrete projects are future are canceled. delayed by aggregate and usage

concrete long in horizon. investments to and time mine have reserves Our deliver very rock produce and assets and a

periods There a of quarry will or concrete disruptions life of the be in ready-mixed weather plant.

as short-term interpreted the should way, in underlying temporary periods our no weather demand results. of of driver be long-term However, disrupted

Quite our Unemployment Consumer remains long-term of remains pent-up levels. tailwind. again fundamental Interest at the once a in robust. remains cuts confidence all the residential favorable. contrary, low There markets untapped high. as become is remain demographic economic rate historic demand trends markets trends have in

ready-mix respectively to chain, quarter. is transportation bill spending selling in infrastructure the our and on for The pass in possibility. year-over-year material ability of the increasing and increases our a our markets prices second average bipartisan environment. a surface local level These strength in simply weak increases increased demand State is in along is for in not meaningful cost X% spending federal of the evident realm outlook aggregate occur long-term value increase do raw a and X.X%

in our July contrary, to return return to a in volumes. has more weather historical a resulted the pattern On normalized a

I to simply emphasize Finally, that waiting results. weather must we improve and pricing our for not robust better are

operating aggressive both actions at undertaking unit are We and the levels. portfolio strategic multiple

strategic our five undervalued over aggregates to business aggregate our peer profit. our remains the XX% and On gross now of significant value adjusted compared past increased group. business the is years front, of represents our the This

and streamline order operating and undertaking Company processes at to leverage costs within are increase efficiencies, and functions actions non-drying of streamlined at vigorous We delivery level. significant organization production cut our all office in the all levels the technology to back

detail. over Ronnie Now, turn initiatives I will to the these in discuss call to greater

Ronnie Pruitt

Bill. Thanks,

time strategic region. I've reflected call, our take I with the evaluate, before and pleased team but reorganized some quarter our direction management results. taken, has and initiatives team our our drive each effectively more are during actions in initiatives fully As first new leadership it our within to been mentioned our will manage,

progress seeing margin which of in coming our growth am should the on regional support I quarters. each initiatives,

regional Our and eliminate becoming redundant processes leaner standardized we teams functions. as are

design second processes quarter. raw per improvement basis streamlined more in mixed yard This our Our substantial over our $X in material can seen organized, and the a for on cost. prior becoming material $XX.XX cubic X% and providing was quarter, the spread, opportunity year be which savings

We to delivery efficiency concrete cost of delivery few. workforce, customer our points have designated management professional related and all name the waste focus initiatives just on to touch various our the concrete disposal of regional teams process, to a of

drive business on sales are initiatives will improve more ability additional improve service, our professional regional Our customer focused more vision market, volume teams importantly business and more transparency market with pricing leverage, customer and profitability. into penetration operating opportunities to processes and our efficiently. and project These new operate level and to

the plan within portions making discuss and are and It for we of facing progress customer representatives proprietary our meeting the of the recently our functionality we of on office We our general had was software, development our customization good away the and productive extremely implementation implementation and a with from Dallas enhance to came WheresMyConcrete. software. software. Additionally, an development, rollout great of regions in the of each CRM

teams to believe platform rollout substantial our stages early deliver a anticipate customers months. the and development of of over this all The still regional capabilities months are the in will better We WheresMyConcrete to next to leading our and and successful improved benefits rollout provide analytics making. the enhanced XX transparency of we through data XX decision steady will

would of like key each our of I you highlight areas and to the are regions that now results. driving through take our some

includes well Polaris as operations XX% approximately our as West ready-mix Our Northern our this aggregates, revenues which California represented quarter. of region,

we sales of Demand the have backlog. Northern construction supported markets a of further remains cycle. pushed this to been strong the in back by Due the solid seen have region's many projects deferral extending California weather,

scheduled the the in off concrete cycle Over projects Tower Oyster Adobe foundations kick Jose, a concrete of to Point will such as Francisco. many that the Amphitheater have we and San San Google coming North needs fulfill in heavy large the of deliveries weekends

being concrete And no utilize U.S. Polaris brings there's in Additionally, aggregates us fully the can the specifications. for those seismic which recent a earthquakes than Concrete, Southern to forefront. zone the in provider better specifications remind California complex

the help carbon That continue products footprint. concrete environmental that mixes the Northern of aimed located a concrete of with in leader amount laboratory use our the coupled Fran These business. released are will value added types products in California at premiums national our of success of San to into the research COX is come reducing into support also while our standard and reducing the atmosphere. of

and second project construction in weather the to through the rainfall impact in Northern market from improved continued California quarter. quarter June, first significant overall half and first Although the of the May delays results in

Asia. the expanded our increase customer Polaris to a opportunities work limits our capacity business. make side and from seeing on our contributor our development while in aggregates operational transforming export Polaris regards America of team business continue our Polaris company at are major efficiencies improved underway of The well With North will and efforts quarry to new efforts and agreements the to in production

high also across profile our Jersey, market holding represented which all reliant news being New Demand we concrete. another The the steady this of of built. in In East Virginia region, includes that developments exacting This quarter. require revenue specifications performance New with D.C., on delighted XX% are York, is for York, New Philadelphia, is superstructure high sectors.

recently future a approved their Chase announced site Morgan skyscraper. on the demolish to were the JP of plans building

concrete as Avenue continue Hudson Park Manhattan, jobs expansion XXX providing LaGuardia we as addition, in the Yards. In like existing to Airport and well

developments confident We these of will we see are announced. many new that

in sectors and all projects strong New HQX and moves the through metropolitan in market with in Virginia We Amazon in Washington areas. the continues actively growth impact. Northern to New five York, infrastructure Jersey commercial In development through the indirect D.C. plans economic own forecast the residential represented. dominate boroughs demand all their across Greater remained

apartment will nearby far to units in tire and add of reaching their have favorable economic will of The units XXXX tire is XX the on impact have proposing building the housing a anticipation quickly selling the impact, storey area. one complex

of region, Our Central operations, our revenue represented this includes Oklahoma, USVI XX% quarter. which Texas, and

example entire area the One the city. new with of which again see Worth cycle construction from The will to and to population seeing even We're supports has of that pick project a space construction bring our strong than of X this Dallas, feet production in jobs mixed across in development than rain will Fort building area, this continues kept to which and market. economic longer activity use up be square of seen more can not expectations companies continue this million heart Dallas expected. announced will Downtown the moving growth. significant recently

We projects on XXXX and us puts sectors that will line active significant all and are continually in District. well Arts into remain makes that Center nature the which by as of action Texas, projects infrastructure Swab Campus Plano planned the this contributor the as of very Fine swift market currently for to bottom Texas our Charles School new Westlake, a beyond. confident Transportation The in Department

Texas commercial, led by Backlogging West public Our seeing Redi-Mix improvements activity projects. weather's and volume improved. as healthy works continue residential, bidding and operations remains

Texas Key Our demand as and by significant Abilene energy as Amarillo, well such Texas are in educational West with expansion continued West driven Lubbock projects medical as sector. from markets in spend spends

any a producing more is power wind than of also leading leader other in state. Texas

projects have and farm seen We throughout are new the announced major year. this currently we wind pursuing work lucrative

As quarter in our begun Amarillo have our mentioned that expansion concrete we plant of downstream aggregate our support and first operations. modernization on call,

reaffirming In fully begun be which Greenfield commissioning Metroplex, addition, MW of quarter. focus investments building on outlook markets gravel own support Ranch, continued operation for positive DFW Both and online these bullish their growth. continued have south our of our located growth, the revenue outlook in third the Each our should our strategic presents of for our construction markets. sand aggregate we and of

to to Now I results. turn John call over our the financial discuss to like would

John Kunz

adjusted due million. from received D.C. $XX from Washington weather the total relate proceeds for with primarily quarter $XXX on primarily million domain for proceeds expenses revenue revenue XXXX, recoveries generated in received to and declined second to We plant of compensation, headwinds for the of quarter acquisition Island relocation our U.S. and the EBITDA are adjusted Ronnie. EBITDA costs, Thanks, the eminent Both our Virgin related stock of EBITDA related Hurricane of adjustments insurance losses quarter XXXX officer transition

the expenses SG&A second second in revenue quarter, year quarter revenue. and compared for was was the costs of XXXX SG&A quarter primarily XX.X% of of to volumes in stock X.X% impact the compensation prior officer compared reflecting the transition of lower X.X% quarter. to and X.X% revenue prior of acquisition Adjusted related excluding year a in XXXX

higher between compensation not of March, meeting they until were two be awards as been expense. approval expense share There valuation forward, accounting price stock compensation beginning as in annual a for the Had purposes did our was line in but to going those as increase Stock more in the those dates made annual our increase in our at as expense at in they was an prior in years. place leading May. the shareholder take and sync prior expect would years were we with meaningful dates

expected the be approximately we to to in XXXX, rate our expect to million expense million range. adjusted is and XX% for be $XX In interest effective the tax full-year our $XX

unfavorable manufacturers based the XX% included by the in the to of rate final proposed related expectation version. regulations currently language to treasury the limitation deduction that tax effective as adjusted is in remove Our interest the on

As of credit debt maturities consisting debt XX, notes million senior and $XXX and total of of mobile equipment, approximately new net million to facility million $XX.X in million million, included our financing mixer issuance of with mainly trucks $XX.X June current debt our $XXX.X revolving on costs. unsecured equipment including outstanding for $X.X other of XXXX, this

operating XX. reported we liabilities of addition, million lease June In in $XX as

we and was debt including XX, our availability million our of had cash EBITDA $XXX.X X.Xx. At of As revolver. million and of June net cash of $XX.X adjusted liquidity XX, total under June to million $XXX.X equivalents

ramps second half to would this the in ratio. up a expect the volume in of As reduction and we weather year, improves see

continue a or position and notes We near-term no to liquidity have associated our facility. with solid senior maturities ABL

sheet. balance Moving to and our flow cash

to quarter, generated quarter cash During D.C. proceeds the compared we million the activity our quarter. provided in year of $XX.X flow of benefit to from including domain the our relocation of free prior year prior insurance eminent recoveries $XX.X in as the of the adjusted million second we cash $XX.X and operating $XX.X compared following by of generated Washington plan, million XXXX activities million

We continue the flow. capital increased to to and cash generate focus on capital in quarters managing expenditures working coming

Through approximately the more expect we with of five July, the acquisitions reserves at made upon of a payments months In past permit our deferred six one $XX the the and $X contingent we payment associated additional made aggregate of sand approval consideration our approximately million quarries of $XX we first for months, million process. And of and gravel completion year, remaining payments. to million. make

approximately plants to During on to the second quarter capital related of markets million XXXX, we same demand primarily machinery equipment period $XX.X year. million approximately the to continued support for $XX.X our compared last and spend the expenditures, in

impacted given managing For than we anticipate our the the XXXX weather full-year expenditures planned. originally half first lower capital results,

excluding to aggregates $XX to expenditures acquired capital $XX $XX million to our the million expect million equipment in to the million capital We through leases equal our Texas of quarry. capital $XX equal development for

be to to of XX% the adjusted EBITDA. activities for range flow operating expected Our in XX% cash of

to liquidity our we from half generation environment weather cash first to anticipate continue a ongoing as flow support demand see solid rebound We to year. look of robust impacted the operational with along continued sufficient needs. We

now back to the I'll call over turn Bill.

William Sandbrook

We Thank regions. the you, demand fundamentals, backlog remain confident strong and environment John. our in solid in overall

the the the reflect on our up enough half capacity driver guidance our based of and the year markets guidance. year, first left are from original delays the make in annual time we the uncertainty to shortages updating our the contracted is However, shortfalls in there of significant constraints to impact in some in that given

of billion the adjusted the and $X.XXX midpoint with to million $X.X we range now for the the $XXX EBITDA of total million billion to of $XXX billion $X.XX XXXX, revenue such, As of in $XXX.X in range midpoint with expect the full-year million.

the While was year regional of disappointing, for in of of fundamental with the remain first half year economic we the optimistic markets. the indicators very remainder strong each our

our leveraging you the pace in your of initiatives out increase and combined interest and shareholder drive remain flow with our to the of year. focused for strength in should momentum U.S. Concrete. cash As work That solid our on the backlog our team, profitability improved positions resulting volume. anticipate finish drive improves, our Thank ongoing activity to assets, positive generate market We bidding weather the and in to increased we ongoing to relentlessly meaningful value.

now would the to like over We call turn to session. question-and-answer the the back operator for

Operator

you. Thank

[U.S. We will questions. Trey Grooms first now of open question Concrete]. the [Operator line to from Instructions] comes Your

Your line is now open.

Trey Grooms

morning, gentlemen. Good Hey.

William Sandbrook

Trey. Hey

Trey Grooms

a in us you the quarter? it I bit I or point channel kind I Polaris. inventory is – and what the on a Can was the right, assets distribution shipments. mean, on second in quarter, if more Polaris is detail First last guess the of impacted going you on with quarter in like the give little understood mentioned it build what first

typical you we you color on into give that And can that. anymore XQ? behind Just point kind and go us that of is at is this as it

Ronnie Pruitt

Hey, basis, mean, you aggregates Yes, X%. about, in down Polaris and talked down XX%. volumes if on about Bill think And a year-over-year is over were were as I Trey. This Ronnie. about volumes DFW,

downstream So California we the demand because the to talked into aggregate so continued our even quarter wasn't there of ship about first inventories. Polaris impact, weather though

take And the talked we Polaris us in the about May affects so Northern weather materials and that ability continued that the obviously to impact California. the in for continue weather to

up as So it's the just the in all and a July out. channel even volumes distribution pick August, lag. back And will

hiccups And and in the to say, you we'll see of as demand continue these inventory. it's when ebbs and So flows normal. we the see

Trey Grooms

the into thinking still of are we kind rate run you ton in kind X of And back as million half kind go the something here? of range

Ronnie Pruitt

that that's range. still we think I see a range. going good affect anything don't to That's

Trey Grooms

But in what everybody the guidance And guidance. well? second half well as guidance understanding as you be the guys lift really else. lift the are expectation embedded the driving back materials for good pretty half there. here as whether at Okay, margin that's here versus the been next and margin your an as the back what on for we implies half, just few the seeing The And then would around spread in you seeing a been we've Perfect. the look that's for then quarters thoughts last great. issue – there's

William Sandbrook

and really – When have place Sure. current back the basically at you DFW anticipating hour that the where year, whole. penalizes during was what market improved the obviously That's the quarter really half is in specifically. walked Trey, look the support as of volumes in a in we're guarantees same quarter XX the out and we it

at If expectations, volume timeframe. expectations what margin are really back the they you XXXX, than go your the back XXXX, XXXX – look different or in were historically, and your margin no called

unreasonable were margins that they So that even it's a hit XXXX are in going we not whole. back the levels the I improve. the think that timeframe as XXXX, to don't

is margin, to our With stated, well flat. bit. have as respect material said is, But DFW Ronnie everyone little pricing to what a compressed has as material we in basically margin

you you our out, So just DFW, actually take that take out, if if up. that we're that region

Ronnie Pruitt

would and of I Trey, ready-mix talk between usually material about think you cement always our increases Yes. about place aggregates if talk timing we in the we pricing. lag first quarter, timing about and the And the of this to April. taking that, on add and raw

to of our those did. and second grow margin. material our we material increases to even were weather from margin take maintain encouraged standpoint mean results, in that affected the able markets on very and continue quarter I'm I

think forward. this those into so place upside put from material play catching going volume all it's think we've and only now I will so additional that all in And are a prices better margin because I there up

Trey Grooms

questions. sounds pass thanks you my it color great. I'll that the Well, for for and on. Thank taking

William Sandbrook

Thank you.

Operator

Thank you.

comes next of from question Larry CJS Your Solow Securities.

Your open. line is now

Lawrence Solow

you. Thank morning. Good

like looking ready-mix. aggregates at impacted obviously a sounds both for Just guidance moment a from that and level, high it the weather

easier aggregate easier mix were is of those small a the than PC sort that piece? you of, adjustment say maybe is the to downward? of I realize make So up fair both aggregates due Will business, ready to than, sort but adjusted some build the inventory that of

William Sandbrook

pull the we somewhat side aggregate, aggregates. Yes. our The rebound of on expect a impacted really through a the complete in aggregate is the what rebound, And the business. would not

some really on there. So, weather related, of mostly related what Atlantic that's there. weather the headwinds because all adjustments just the right. were the The are ready-mix adjustments a side It's DFW,

Lawrence Solow

you have, July do And some your going normalized been of and I Right. guidance weather's lot whether opportunities you to far you down, stretch you Obviously, things. better. into right. to superb mentioned the you're or able make opportunities? of but guess – so through delayed forward. down maybe had that August the Opportunities July, a well just days sort obviously can't realize get lot shifted a not Q I if in going get Does of weather good. as as just guidance enough to was additional start But actually, assume, it double

Ronnie Pruitt

Larry, Ronnie. this is

what normal. So assume is we

was went down And the we pattern. back that a normal, to way normal XX days. all we shipping So take which to year weather

So you ability California, slabs, then about at up, pores to make weekends. look talked I amount Northern a on mass and doing the we're our big even of as

gives us some So ability make to up. Saturdays

Lawrence Solow

Right.

Ronnie Pruitt

for as challenges we're our It's markets and challenges. finishing labor just the placing our drivers. labor still customer's well. have actually their labor But Not challenges

just So we and in also And can't up some catching you all we're is as but what prolongs make the some, as we did through of past, assume that busier weather bake it deferred we've in once. pattern volume, we normal. but weekends, the it in up all a told some baked of at normal we

Lawrence Solow

Is drivers. the sort about basically or difficulty improved How terms year-over-year? hiring, been you retaining, is – still of Yes. has that guess of status just in mentioned all that at quo that I in some truck Understood.

William Sandbrook

challenge. are driver in to is of Northern Yes, even in some in markets the stable, Northeast, Dallas pool more Those and to California markets I going markets. South a would say the be West in our continue the Texas

from now on. hear us repeat I think that that's something you'll

We're programs, got but just We've we've we're we've drivers on. our it's recruiting And in come retention we're something be things to the back challenge taking of going not got we've head got doing. all kinds always sitting to programs. and waiting got a it's programs, and kinds of on all door,

Lawrence Solow

increases, at ready-mix obviously mentioned, you that specifically that, shift it sort And a help improvement mix expectation? the price Texas seen down perhaps skewed in the think Did all you out Okay. area on piece that significantly? little on have up or on is Texas was maybe the bit a X% I was Did and price average. of a QX

William Sandbrook

I'll But over impact down Yes, a the Ronnie I'll market the volume first on year-over-year There basis. then outlook. we actually in lower there. address a were DFW a half wasn't the to it and for marginal I is turn decreased price back realized impact. really in remember or mixed price mixed DFWs

take prices would So out our actually if equation, increased DFW have you more. the of

of really I'll it the for mixed reasons are that. back year. thing. isn't and address a Ronnie So except Absolute half for the let DFW all up prices the other

Ronnie Pruitt

the the Yes. would have the of of momentum start Texas. year in expecting I'm on efforts some improvement our see going we'll continued DFW that back in the pricing in seeing I to team market. think the we're we from in that half momentum sales actually in pricing

Lawrence Solow

Okay. appreciate it. much. Great. Thank I you very

Operator

you. Thank

Your Thielman next of question comes from Davidson. D.A. Brent

open. now is line Your

Brent Thielman

Hey, thanks. morning. Good

William Sandbrook

morning. Good

Brent Thielman

provide some volumes, see little these of more least internal maybe term that that specifically seen might can when shorter Ronnie, of how at protection the a or to talk weather gyrations? be you term you initiatives taking they some can't of but you're the might to able Bill about kind help business. you've in you disruptions to shorter Obviously, these control margins Hey,

William Sandbrook

Yes.

focused and are both initiatives we initiatives those from regional and So have standpoint, an labor raw corporate on materials, and really commercial. initiative

down mix you that not the raw And material having talking and start concrete. of anything waste mix cost goes else any or with into of breaking single honing optimization what that we're every really and mix as on so about in into

ordering in from customers from On literally back from our they the every their of and in single touch the their it's cancellations. full gamut, concrete efficiencies our grave treat customer points, the the way cradle labor way touch from our trucks our pour methods points, side, It's consolidation. from labor driver office our to driver processes thing our on

on then price our look we've the we concrete. sell we talked Dallas with commercial our leads. our It's had it's the every the we VP, CRM the we sales at about the the in way concrete. folks, It's job. And meetings regional GMs in It's way side, and way

So I going to can aspect I figure we it's tell we're and not it are how Brent, in way the best mean you, trying do to business, of to every the single only streamline our today, out change at way change and business is been real concrete a and business too. very got business is We've a looked time you've to future, in the that's our the goal, way it mature this around done. long the is

Brent Thielman

the some of – of are next strength something today? excess Okay. I you discussions increases price see you given round of have markets what are experienced could in, of on I on in the if appreciate to you kind do think aggregates, color. And that you've starting mean, the

William Sandbrook

I do.

markets we round our potential as aggregate markets of the there I for that well I think again, in the at serve tail have second a end DFW a of think as from year. some that standpoint, there's of Polaris an increases especially the potential

Brent Thielman

That's Okay. was segment other such flat EBITDA Was dragged year-on-year sorry markets? you last versus as in challenges from said still the great. from Polaris EBITDA the this. if of I'm kind the down And the up contribution year

William Sandbrook

with last EBITDA. respect we year flattish to Yes, compared to were

Brent Thielman

beyond market? this ready-mix year last sort you kind New that? just price. shift on, – beyond the last the of in to that of of, Is this one And we Are year-on-year mix out compare headwind Okay. to York boroughs it the

William Sandbrook

Yes.

I think so.

assessment. I think that's a fair

Brent Thielman

Thank great. you. Okay,

Operator

you much. Thank so

Elliott Your of Stifel. next Stanley question comes from

is line Your open. now

Stanley Elliott

the what came care if Good it. July Thank volume Did the taking I you morning, had you recovery about for talk in in kind would the question. of guys. been I you or apologize missed to?

John Kunz

complete Yes. washout August, was you really year, in impacted year-over-year in our last if basis. volumes I regions. most a up July, mean we're of QX on just late was September. what Remember look us our September a at

up we at So we're all. July that's And volumes where really impacted. year-over-year. impacted much wasn't in were

Stanley Elliott

And possible driver ready-mix especially when in I all about have contractor, seeing we're is of think of in when mean about kind August, – that a September? double-digit of with we volumes think it is and difficult the shortages, kind et relative the opportunities July achievable, we you or on the month cetera, constraints comparisons

John Kunz

Double-digits increase? percentage

Stanley Elliott

Yes.

John Kunz

– quarter. Quarter-over-quarter third

William Sandbrook

Yes. I – yes. think would

So I achieve that. would can we say

Stanley Elliott

margin have? any you you all Great. about, try guys Ronnie, me, of there Because clearly upside you you in talked margins? from I already might sort the of mean a saves cost terms margins just And strong of of be guys industry get to way Is for have. opportunities framework last to the and sort very what are leaders what ballpark there

Ronnie Pruitt

In that's mean would be we anticipation all north next run that think aspects our single in goals the gone background year. a kinds achievable. of done, on and of That from the we've on believe I our all the world-class. obviously rate XX% and every goals setting would I that we've be And number through

William Sandbrook

this is Stanley, Bill. And

year abnormal year run you're member, – industries entire we've weather. three If a had of the had a three a

weather not compared a XXXX would XXXX, and XXXX, you even say let's at basis. on XXXX, it's XXXX, If XXXX to, look comparable

with And when XXXXs, those this margins aspirationally the up always discussion hitting And are we we whole we market high of had go. XXXX. in were we targeted how the could

the time impacts weather only years. in like mirror, that we've the view three had seems over and because long a the of rear it's it Now

a look three ago, portfolio, compared we time good, weather. now to last years yearly the our at of If run rate really had you

to now help Our profile. heavily more aggregate portfolio weighted, which going is is margin that

is XXXX, get had. had those in to and like not we a and can unrealistic XXXX we if into maintain XXXX, stretch that of expectations weather exceed prior it So we

Stanley Elliott

you. guys. Thank it. Really Great appreciate

Operator

And from your you. Thank comes Thalhimer Thompson next of Davis. question Adam

Your line is now open.

Adam Thalhimer

morning, good guys. Hey,

William Sandbrook

morning. Good

Adam Thalhimer

ready-mix funnel, help The backlog cubic us that of a of that roads? weather because X.X bit give of you for that much strong million believe how you and were just a I was projects little pipeline, a is guys. and on delayed Can much that's how yards, and record of

John Kunz

the Yes. talked the in We market. about volumes deferred DFW

still we're bidding backlog, into yards very, has backlog. in very on active that our of some our placing well so new all as And of rolled markets and but our on

much Definitely say would into month than more pouring. even deferred, we we're a as then but mix see also some I continuing there So where there. is selling – this we or are

Adam Thalhimer

just question. of kind answered you like this Bill, And

for have XXXX? what a lot a is say of you weather, a just the potential that of years in and had snapback but for flat EBITDA You couple can else about

William Sandbrook

wouldn't improved whole I operations and of from is level the Greenfield tactical the of to as to office leads defer margins. well and portfolio our volumes both as up, that and back Texas. realignment combination Polaris That initiatives heading tactical strategic Well, corporate in increased significantly and Ronnie

Adam Thalhimer

All And right. for then one me. just last

the John, actually For have a flow free in left still on your some you could the might and paydown can also that you get comments cash of debt? then to do How help them? back cash of be you parse, half generate Trying used much us couple you payments year. to think

John Kunz

in the our flow that and cash we a generate results. we're not payment expecting cash We much solid It's as going a $XX that out, excess not far the we just as pretty from certainly light be flow the in be QX, QX debt from going payment significant there's but Once payments left. different payment, paydown there's really of million in use forward. to contingent made million got in some $XX

left. X only So there's million about

was biggest So the that one.

Adam Thalhimer

least be $XX should right? it But at million,

John Kunz

within I number, your Yes, reason. well, that's think would that's but right. That's that's yes, certainly

Adam Thalhimer

Great.

guys. Okay. Thanks

Operator

SunTrust. Seth Thank next you. comes Rohit of question our And from

is now Your line open.

Rohit Seth

my taking for question. thanks Hey,

if you the update can Just curious permitting Polaris. on with the us

permit about talked You expanding there? potentially that

William Sandbrook

phases two loader of was have just meeting talked our the pays through. like governmental go expectations. engineering the the that a from the about We're on the we what Bear which about is in standpoint. that second described ship things And – to Black permitting that talking It's itself, within well well of one as we then and guidelines we've and permitting is the within project expansion before ones

steam So we're of on those. both ahead full

Rohit Seth

first the Do phase? you on have of any sort timeframe

William Sandbrook

And this phase more capacity there ship loaders, the the for of So shipments Polaris Black we we've the set critical. to bringing have meet it's year expectations plenty into next. on the on and not to It's a tied that really Bear. first

of Bear. that's critical critical not the path permitting that's to force more tied So Black a

Rohit Seth

expand having to thought quarry? the that would without to I Okay. allowed have up ramp permit you

William Sandbrook

We already do. to there the had what I with capacity do the ship loader

it loader So both all quarries. is tying that's with it the critical together because used ship as will as not same be

it So quarry, a Bear but being the if through you think different funnel same about Black will all come ship of the loader.

two significantly So tied that's are projects those together.

why lock step working in it's together. that's all So

Rohit Seth

Okay.

that of any those on how So existing can expansion? where we permits have shift much Polaris before would you you terms in

William Sandbrook

that we up we've six we So was and that it our get eight to and do can clear now. made expectations can

Rohit Seth

all That's right. you. had. Thank All Okay. I

William Sandbrook

thanks Seth. Okay,

Operator

Mr. time. I am no Instructions] further for to at the to questions [Operator this call back now closing turn would Sandbrook Bill like showing remarks. I

William Sandbrook

you thank forward our in for U.S. call And third everyone this quarter to and the call This with Lady. discussing morning participating in November. Concrete. your concludes for our look support continued we of Thanks you and

Operator

Thank you today. participating much so for

now may a You disconnect. Have day. wonderful

U.S. Concrete (USCR) 9 Aug 192019 Q2 Earnings call transcript