USCR - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the U.S. Concrete, Inc.

Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Instructions] [Operator

go like John conference and Kunz, Officer. you. now speaker to Chief hand Thank Mr. today, Senior Please to would over the your Financial I ahead. Vice President

John Kunz

and Thank you, XXXX Call. to Concrete's Third Earnings welcome Roshae. Quarter U.S. morning Good

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

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

to the like a over today's website. to section Bill, items. Before presentation few of I turn A would administrative the call discussion I is Investor our cover to facilitate available in Relations

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

other can refer the this a risk will call SEC. the these X-K earlier you of Form note factors, filed to list on regarding information the today. financial contained non-GAAP measures please with that that in legal factors disclaimers and our For reconciliations the discuss filings Please and find we in the

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

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

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

Bill Sandbrook

and In am ready-mixed to continued hit prices ladies and to welcome light I announce growth in volumes product and ready-mixed revenue patterns, aggregates quarterly average in driven and sales of improved Good increased and high The of each million. pleased John. in record $XXX our morning, you, by our markets our our revenue of a that Thank was weather higher strength gentlemen, lines. call.

adjusted high as well the quarter XX.X% EBITDA $XX contributing in Our EBITDA million at for was with total the improvements. these and to adjusted came margins increased our a volumes record

are we did, overall meaningful Texas than volume markets. growth anticipated, growth revenue lower we in our volume however, and a bit see With our

Our growth labor in Texas markets volume the housing competitors. and markets, expansion availability in residential in ready-mixed North a has by nonunion was truck growth economic continued Northern union tempered of California somewhat the the of commercial shortages by The Texas, erosion York continued the limited overall the the City markets and drivers. New softness of

past, aggressively to and the incremental to the market the share. but our of in continue employment than recruitment opportunities and it economy, fleet the capture difficult fully has rate the unemployment been We low utilize our makes strengthening job more alternate numerous drivers retention ability and recruit limiting additional

While shortage presents continued does strength the speak driver markets. demand to the underlying in Texas it environment of our North its challenges, the

challenges drivers going and pursuing the year. and to these into these markets expect avenues aggressively are We fully source retain new overcome non-traditional to in

Our volumes temporary residential impacted are California slowdown markets. being a the in housing market by Northern in

is is and where Area. participate, Bay Central for the areas, we there the in the While in do exact Valley housing markets increase Sacramento the an not our opposite in case

available tech and state is the in industry creative shortage the financing at zoning alternatives. permitting, housing addressed through both recognized as levels the local affordable government changes being and of However, critical and aggressively itself, within

are outside is of some SB-X in Central being seems under regions, these a earlier expected the funding initially delays not California of and projects release infrastructure released the as the to certain were five taking the funds in in projects new for anticipated larger of than be XX and funding bit such year. Furthermore, our Highway area. while Additionally, service Interstate longer Valley

as markets. the However, markets. in the the But nonunion we going York, projects horizon In vibrant remained on in we not are participate management both industry work XXXX. operating the of correct the and the many New we new sector between The presents tech union migration and concerning the workforce confident towards challenges the commercial overly to have XXXX. and of into its nonunion that migrate two the with model is the competitive Silicon Valley dynamic continues

percentage As for California to discussed. pricing, Northern effects from previously some Dallas the metro the shifting of our we business, higher mix from factors ready-mixed our markets, experienced negative a markets to due

than pricing calls, in on our As and real lower regional because we its mix underlying of let on described differences. increases. mask of average the Do price materially price true Francisco selling not is Dallas San have strength previous cost structural effect

a residential aggregate Area primarily slight the supply to our the we did results, during the experience was driven by in decline temporary Turning the in associated decline lull markets. and volumes while a Bay quarter, with our aggregates aggregate chain Polaris logistics

Some of the fourth the quarter in out causing to temporarily one experienced issue of be shifts deferred the of our were as it taken service. shipments propeller into rotation

Significant However, year not volume Atlantic continued limit margins Texas steady profitability. were the versus Central improve normal has levels to the regions. our due more River improved in as that and and our quarter. lost Jersey up in evident in subsided in improvements volumes New Red Aggregate were in and operations the ability period well. regions to is aggregate efficiency location The and both on demand prior those returning the operational the flooding in production the team's in did quarter our to

take over call and I'll highlight progress. markets of improvement to margin Ronnie each now the our to turn us our to through

Ronnie Pruitt

good morning everyone. and Bill, Thanks,

recently have initiatives across along process, mentioned improve strategic hall continued all calls, The initiatives our areas with end These throughout our members regions mix, As optimization. our with team. embedded of series undertaken system town Concrete that I on in of customer critical role U.S. dispatching hosting will system our company. initiatives. and to our development I delivery, margins the traveled CRM proprietary several these numerous of of meetings a WheresMyConcrete, success we To a previous play the of include

courage, discussed process CX our compassion credibility initiatives discipline while of our workforce, we meetings reinforcing within improvement these During regions. throughout our the also and

response The our overwhelming extremely encouraging. team embracing is owning not members goals but only from these positive

ahead tremendous have but am in confident of amount a improvement We work I our margin initiatives.

transformation As be a I our successful mentioned before critical strategy path. digital of will piece our

of are we revenue time experience, such, the objective increase and the the from increasing customer reducing at technology costs. the As same continuing our investment to with while improving

the continued functionality, artificial quote-to-cash Our digital be the cornerstone platform of of WheresMyConcrete mobile its digital development core analytics initiative and intelligence. with will transformation the applications,

WheresMyConcrete the substantial to enhanced on which leading our of and analytics, adopters and early and customer decision-making. regional benefits is transparency teams more our quicker confirms from informed Feedback data based improved to

that value WheresMyConcrete further along enhance the customer efficiencies. business, delivery our delivers to even targeted experience the technology leverage is our identifying our team more ways Beyond proposition with to technology this to

let regional time on me Now spend performance. some our

Our includes new to of Texas, USVI demand leading quarter. XX% our show as Central this region growth. corporate region, which added and to Dallas we Oklahoma continues strong operations, office see revenue and This area attract the population relocations jobs North represented the

downtown will North over is hub, its capital landscape plan the in of million million $XX of investment more enhance moving expanding by bringing Microsoft as in operations more jobs future. additions the investments Dallas' its investing outside Irving, than a to Uber sector more should drive from to while market further corporate These further its this which capital. Texas the to position technology is and of Dallas. in One in also the X,XXX exciting $XX spend reach

The record West We are XXX,XXX-square yet. development also area of to continuing downtown storeys of area, Dallas Plano many its be a major early out lettings vertical recent planned. projects growth XXXX. XX at construction getting begin job tallest continued is outside will market The tower to foot growth by in see the Dallas in is expected top for a and the mixed-use supported will setting. the set non-DOT Plans traditional that future North construction the

develop showing million International passing connect XX project to major billion announced sixth Houston, and rail construction Airlines cubic towards project high-speed nearly which hurdles terminal. of potential, billion Dallas/Fort invest will Dallas A that yards to many plans American the Airport $X.X to non-DOT concrete. $XX Recently, is that is utilize Worth significant to get a will

much Hoover Dam. the that that's put three perspective, to to construct nearly in used we -- to as as times Just we used as or

the fully both of this area high-growth operation Strengthening on the in commissioning continue external on plant this this base internal metroplex. focus anticipate our this one the of position as of needs greenfield Metroplex. in operational customer aggregate began our we mentioned grow serve by will as We well of end year. being This DFW vertical market, to Ranch, integration south recently located We previously plants, MW our opportunities.

facility are the operational capacity of operation. production new this our as We Texas This downstream should as also fully costs, production XXXX lower with Amarillo much-needed of in first progressing in half West market. supporting the our be well and modernization high-growth assets aggregate add production

Our driven seeing of West results programs. XX% public our market revenue and aggregates This approximately region Northern strong this includes sector construction ready-mixed tech which represented commercial and operations Polaris California is quarter. by in the

infrastructure safety as and more further constituents be This California continue is aggregate both and rolled this of support California's widely important the our step funding to SB-X that concrete all sector spend will operations. for to We legislation an are continues confident ready-mixed out. of from supports

from increased aggregate demand as both Southern ready-mixed from Northern benefit More California, these in specifically, will demand projects. public Polaris and increases

and in markets that that the industrial commercial, we we mitigate feel some infrastructure spend softness. residential the softness have this for projects should seen confident housing serve, While we

affordable development. XX% housing region, represented The New they're towards committed land Apple $X our housing Virginia, and for East to billion Google and solve middle-income revenue fact, housing many appropriate includes $X.X this committing also in announced Jersey, has Facebook for has into York, New billion better needs. workers these quarter. while other committed which In of more Philadelphia housing recently California, billion help D.C. towards $X utilization

benefits changes We year, high markets. market the of our have structure and we alignment strategic this from this our are sales a earlier regional and to with customers greater made seeing optimism degree specifically in

New experiencing the competitive York we nonunion projects. more In contractors, a landscape from are opportunities union of gaining region,

in have will in our pursue work, allows the year. while us delivery we competitively This volumes seen across well high-profile distinct that us be drive can work to boroughs work boroughs, that shift With continue to next the advantage footprint into that a all to outer costs. our controlling gives

reduce driver -- delivery to training also further and costs. issues and overcome help aggressively We're us on focused training delivery and personnel recruitment,

safety is New are to York Like support of the needs what also very seriously. specific many sustainability to they the handle markets doing is of their our other and taking infrastructure necessary community.

wall and overhaul a Transportation approved forward the billion be with Plans the plan New and flooding to protective capital wall Manhattan, surges moving planning system. around recently awarded U, $XX.X reduce September billion to possibility of southern funds and damages. storm park flood-related also the The of for transportation Metropolitan Authority need. Staten the a BIG to York city's to seems the defend the against $X the of tip of is reminder a stark impact providing build Island the

to reserves processing as well the enhancing New output aggregates, both the of year. better production increased Northern regards process anticipate Through calendar Jersey in aggregate as our next additional the we we increased With of equipment, operations. efficiencies are and throughout of both

operations as to water long-term New additional We to also efficient enhance costs sand we have market. well South We improvements. transport in by enhancements provide to operating capacity York which continue more Jersey these our as anticipate the into continued

Amazon's our boom in area continue Washington Northern portfolio own news was is Amazon's about built with spurred new approved growth Virginia one adds our XX-storey and our markets. of HQX, their subsidiaries; to center we a growth positive reaffirming for be Pentagon to tower economic the Northern markets see an also in data what a data Each mixed-use continued This market, market. of construction in building from be for outlook Recent Amazon's is Virginia. confidence by the facility expanding presents out to City. In expected center Perspecta D.C. to

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

John Kunz

Thanks Ronnie.

total $XX of and weather economy. million all-time higher of both revenue ready-mixed the active which more were an which records favorable quarter third $XXX and volumes by conditions For construction of resulted company driven adjusted were EBITDA our from million

Our was per cubic on basis. dollar yard material $XX.XX spread a

revenue. primarily X% primarily acquisition-related stock was of compensation XXXX revenue the for in SG&A expenses. the quarter quarter acquisition-related costs Adjusted to reflecting and SG&A to quarter. the Our relate officer expenses of excluding for and compared impact costs prior stock third year higher transition X.X% the was revenue the of of EBITDA year the to officer compared quarter X.X% third transition compensation prior in X.X% quarter in XXXX of adjustments

shareholder stock but valuation annual as for the previously was of expense did at March, until accounting discussed not our our compensation beginning were awards purposes higher May. at in meeting take approval we made As the place annual

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

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

As and in operating of we was XX, our lease maturities total September including million current liabilities. reported million debt $XX $XXX

and revolver. XX September million $XXX total cash had of we availability of and million including under of As cash million our equivalents liquidity $XX $XXX of

the we quarter further in X.X debt-to-adjusted EBITDA quarter, reduction in our With would ratio was a at see year performance year-end. net expect this anticipated Our in and the versus ago improvement to times. fourth volumes

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

included and prior $XX.X to We Moving year of of year prior flow generated quarter. flow during third as cash Dallas cash the XXXX generated $XX.X to compared in $XX of free cash provided quarter last line operating $XX.X of year's our activity remembering sale million in adjusted business. to we the million that our flow the million the sheet, balance by our compared from million of $XX.X million quarter cash

with contingent contingent acquisitions to of XXXX expenditures to in third and We payments cash associated managing $XX will working would made of focus We capital the increased capital continue further payments coming the expect million past consideration approximately be during quarter and flow. in significant any that quarter generate QX on consideration not

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

the For anticipate be development anticipate will in quarry. range capital and million $XX managing to $XX the $XX aggregates for in expenditures full $XX through acquired we range capital continue of million leases equipment our year of a to XXXX Texas million the of the that to million excluding capital

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

solid anticipate flow continue liquidity We a need. to operational to results. robust we -- continue build to environment ongoing along our upon demand generation quarter to look as We sufficient see continued our third cash with support

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

Bill Sandbrook

John. Thanks,

to of have As to telling we into positive end few that the potential. type becoming and with pipeline of our as look coming the is year outlook for meaningful solid the years. be quarter margin cycle past of in into projects our we the this XXXX, fourth customers and solid are There remain us clear expect growth. of to customers a the XXXX volumes seen continued Visibility on we the activity continuation near and and for the market continues

exceeding to a gotten quarter fourth year has a good their off start ago. of far the levels So with volumes

be guidance, guidance. full and the revenue As we EBITDA total our our to of anticipate range lower previous around we XXXX refine year

mid volume in and look we view out low XXXX, our As anticipates to into mid pricing. preliminary growth single-digit single-digit growth to low

to aggregates profitably closing, over execute actively we emphasize on maximize metropolitan the areas strategic that impossible strategic With long-term. which will value. on order well-positioned pursue to efficiently grow we we an concentration enhance build most plans vertically our our to are positions shareholder In to this to and and and to We vision increasing to I integrated continue replicate. focused create markets work will want business to believe vision, shareholder we intend of effectively operationally that strategically are successfully our and unique market-leading value-enhancing the believe in major value with on in franchises, defensible

like you question-and-answer Concrete. to call interest in now Roshae the U.S. back your for Thank the over for We to turn session. would

Operator

with [Operator Trey first Stephens your Grooms question Inc. you. Thank Instructions] from of the line And

Trey Grooms

morning. good Hey

John Kunz

Trey. Hi,

Ronnie Pruitt

morning. Good

Trey Grooms

the on few a So markets first. end

clearly strong fundamentals the or by of availability drivers drivers. North being you're So constrained Texas, but

do So the forward? that's issue think demand constrain to for soon? labor ability is from strong to why benefit you And continue change there, going I but this anytime know market outlook going you good the would guys' to

Ronnie Pruitt

the ability to Hi, but hiring pick our as labor, we've not what to hiring into the is and other a to and hiring for I turnover we Trey, that this move these has on the is good that we're attracting. seen our of industries and Ronnie. earlier. may focus on be Where most I Yeah, and future competitors job for choose been like impact to move only really other think also Bill mean I and doing think doing companies we're drivers of really referred on really

a as So hiring our focus retention heavy effort now as is really effort. just the

The ability to can that it's on like have customers that. our And is And I come with labor there. been as well the you customers' and ability said to on struggling also as believe truly place an impact have finish we going our side labor and demand with really down well.

what on place we've the But piece. good of think of that be will programs and the the positive I So, got end a lot day, a retention focusing turnover this at piece in should the on side, to have better moving pricing DFW. see what what be is Trey, DFW pushing. through in That's better I bode we're in forward we going pricing and as that's to mean also

Trey Grooms

And the then all right. on guidance. That Okay, sense. just makes

XQ saw the top a And growth the in So low pretty year-over-year world. not of line in XQ. full the rebound guide it's end good versus comp we the in easiest in year your implies top-line what

the to end what's low in XQ given So constrained in of getting that of that you the -- the that range? level headwinds the you what's mentioned confidence

John Kunz

range. gave I the -- at pretty range, right around we feel you the to your to guidance is it's range. end of really maybe $XX low we're revenue that to confident. guiding $XXX if going low if get end mean suggesting the that EBITDA we to million the that mark in the be right look higher Trey of number that little a And million-plus

of performed When you in are. we how relatively your comparison, talk light with quarter-over-quarter we confident about in that feel where and we QX

year we mentioned, continued time. pretty first of we a we we As And bit like month ahead progress in the have feel are at last or month a we confident little where Bill there. that see if were volumes now, our over can get this

Trey Grooms

one impact you from down the And the is they shipments? point? in behind then somebody the kind at that Last on shipments if it could picked for those just ship Okay. by issue Or up Or is quantify are being of is that you also And me were quarter your delayed? gone? this else?

Ronnie Pruitt

the the it not -- it is us picked ship a was going deferred does is and and is anyone was going it it long -- us up it Southern Yes by and to And behind issue Beach. in really to it's else. California delay where a impacted Long

tons of And so missed kind specified half, about delay and that. of ship a you deferred -- those it's the because on context projects Materials. there's that's with we mean are and But the per XX,XXX-plus not said I ship a Polaris lost if it's

to projects. we supply be will So, continuing those

that flow we'll up. of So, was -- just really make it a and

John Kunz

numbers And as the that's baked into well. QX

that that be shipments is expectation QX. make -- up ship able in to will Our we'll those

Ronnie Pruitt

in seeing don't good improvement profile. John on add I we underestimate margin that think I I have. our we're also said what initiatives previous your question And Trey the would mean

continue our the that I optimization other think on and the costs will and things of quarter. focus we positive And focused all into the to have fourth results changes we're show the on delivery

those comp, stop. just to we're know that that's So, improvements not a focused I but on to and margin understand it going tough is

Trey Grooms

was I good the Yes. That And show that's job to striving a for And and good guys at. want EBITDA say on in have there. you been hard I working know did margin. something

hats the margin. on So, off to you

Bill Sandbrook

you. Thank

Trey Grooms

a Thanks lot.

Operator

with the CJ next Securities. And your Larry of from Solow question line

Larry Solow

Thanks. morning guys. Good Great.

Bill Sandbrook

Larry. Good morning

Larry Solow

faster. the a a individual can price But fully area markets? Dallas maybe in maybe just maybe is year discuss little get think perhaps late the you bit help to of then a growing us color this pricing? year? bit just little the shift And give which obviously little in mix more you more next the trends Can on increase a I I on will Dallas

Ronnie Pruitt

Larry, is Ronnie. Yes this

I some we've the trends strong. you by on seeing we're West. So, side what I can we're talked West regional single-digit in even you the pricing though in tell year-over-year to the give increases what seeing price would the -- housing the on extremely we're mid seeing broad slow, a high about profile. on And is markets

Northeast, things competitive talked we're same single-digit price in of the market. with increases the market nature about Atlantic kind the seen we've trends the and in And seeing mid yes, the here low In DFW, year-over-year. this we've

as So, pull and rest the I Central good. of what to is up DFW West would little which DFW say USVI you is the so Texas in define Oklahoma markets DFW a are if we flat Texas down in

so And seen year-over-year. same we've increases mid-level single-digit the

with So, in next and believe this the you'll we DFW and to I the year out And DFW. material second continued quarter about quarter improvement And second that second when are in the we if do in happening quarter, our the going I think focus. really and price that the there normally impact the talked into weather headwinds coming so that market increases just our flatness. were see that's many increases in it's go year that you the all saw weather ready-mixed really DFW there when price of of into pricing back

Larry Solow

Northern X% on couple that -- is -- you And Was lower think the it bit. a little certainly Obviously Okay. pretty little have were the of constraints. reoccurring than coming But expect of off driver called wet just year. the guys disappointing on been out California? know which biggest a even last a less you it's a volume, QX things of I I labor the numbers sort of it

just residential mixture that it could labor in and in issues just -- that I'm know -- Dallas maybe areas improve. just good or is it to did you of California it trying it a or bucket a is in mixture? the Is

Ronnie Pruitt

would that most Yes. that have. the the I I Northern look footprint mean mix. you California -- I that of out mean I we And at by driven think And called tell if is you we overall second people that we for have our recovered it's quarter ready-mixed what -- like DFW third felt in expectation-wise largest was quarter should I the our volume-wise But know assets. market. in DFW

So new it's the commercial in work There the area, But but new overly work think we a is so be labor labor. on side, on side, being there And just saying it in consistent side, being buildings have market continued that on labor everyone is. going wasn't Everything is that is bad public is out more I labor if more is inefficiencies. to on force. residential the the really strong DFW the focus homes the extremely built, built. biggest strong

Larry Solow

And I It's that's Any got Polaris. to some on whether better update just plans fine. recent that Bear be but definitely then what contracts any well to Black clarify, have update yes it. lastly switching And be Asia quarry in it XXXX? just or little a just on and it just could pending you the wasn't gears bad. maybe for or

Ronnie Pruitt

everything permitting, design. as we're engineering, goes with Bear progressing talked that as in the we've about Black So with past far plant

being the the year. of calendar full on have there We anticipation that steam year's following going projects next in several ahead with different

think we at So I think to Bear. happening schedule going Black be on and is we're what right for on plan right

anything Asia. we far the opportunities. large used The projects -- in baking -- project-specific the would some still opportunities, infrastructure Asian in As these for that We're projects. are the not projects on markets have be very Polaris, we believe product were the as,

If we're we're not that. very continuing it the that of we not still advantage started that have And take that position in to Polaris pursue a baking doesn't serve markets other comes ability good to projects well. believe to has into Those as opportunity anything. but we're if

Larry Solow

Thank it. Great. Appreciate very you it. Got much.

Ronnie Pruitt

Thank you

Operator

question line of BNP Your next from Paribas. with comes Paul the Exane Roger

Robert Whitworth

question. for which indicators This some about actually for index, Robert actually ABI next you Dodge very thank hi, on like Hi, How year? the my the is non-resi concerned questions. its metrics. start to got could I've much with I Whitworth markets leading are -- of suggest a you John, couple Paul. fall index, wanted taking

Bill Sandbrook

is earlier bullish all infrastructure especially most on of is Northern described Robert. residential We the forward in call, going markets on self-help state Yes. projects; This California. as end are to which with anticipated our fairly Bill, participate we markets: healthy, be we in

New increased numbers York reporting units Commercial XX.X% stable over be for for was XXXX. constructed contractors that's has housing X% quarter of Chamber built. backlog, up permits two. the September, Actually Construction building in of XX% Commerce be total U.S. Index backlog projects to up And to The project is that September or meaning still from

be this and we've of customer to fact that rates, on on side accomplish more to labor on our with call I'm base. I'm concerned concerned low the all side. about being our the that in the on our available And indicators. interest in customers' what chain bullish not leading in with able unemployment about both continued low talked rates, I'm order backlogs healthy supply

report, that Cement the all construction growing looks from to McKenzie XXXX. look economic in Every slightly environment at forecast stable a Association; PCA Portland toward we

as resources concerned capital in constrained environment going So said face. And a be the we I'm pricing have very that to Ronnie labor more call. the for about accomplish of making the we already human the bullish it's has that sure to opportunities offset in previously

Robert Whitworth

you. Thank question. clear. my And other Very follow-up just

levels Do and the expect this fall to this they QX You that seen? between on earlier terms QX could year? of you've happen briefly in usually Or but QX? sort margins, concrete on, it of sequentially you of sort touched you hold

John Kunz

Yes. good. Well

suggest us, a QX was expect year, to that of an we Robert, margins our versus don't had the expect around right we so overall guidance that you at last improvement at look at So margin. if, would When achieve look the low-end QX guidance year expect margin of the type range we we that in if see QX quarter-over-quarter we're gave look expecting would for last of in QX of year we're -- year. QX, quarter that XX% so full last we decline certainly When you the challenging a you area. for to versus

margin back suggest for right a numbers XX% around you quarter. into EBITDA if for that So the would the fourth

So just guidance. math that's the our of

Robert Whitworth

pretty Thank for you Thanks very what had. It's much. we much confirming.

John Kunz

Sure.

Bill Sandbrook

Robert. Thanks,

Operator

from question Thompson with Davis. next line the Adam Thalhimer Your of

Adam Thalhimer

morning guys. Hey, good

Bill Sandbrook

Adam. morning, Good

Adam Thalhimer

So pretty to volumes think $XXX sequential the to I from ready-mixed agg decrease for revenue that I think QX. get QX - do to QX? million QX QX a close volumes, mean, guess the of implies be you the that I to can small for

Ronnie Pruitt

Bill about we earlier as were think to right talked we I on line need think where as Well be. we with October, of

remainder going the become on of to weather. mean year is this normal base I we So -- the

So normal the best dryer weather sides believe seen is in there. both can seen in it's other we get weather And as abnormal we places. we've do say in We've we and can weather some our now if places. weather markets that's seen We've wetter that of what right it.

So based can. there. we now demand believe we weather right is on The normal that

Adam Thalhimer

you the California? in see fires And Okay. impact did from any

Ronnie Pruitt

structural seen impact. haven't any We

at we have some any some We had not have our but all. at outages of power had facilities, structural damages

Adam Thalhimer

versus York. of I sound nonunion. just It's Bill, Okay. Is issue this correct? And the mean New on that then union good you

Bill Sandbrook

taken agreement. that The and I drivers. York lower work with the out It's sorted B New on B of trick And out. is the into or source to our now. a we about believe level model just have nonunion B-level our is fully rate, sorted that while fine delivering completely I'm wage labor drivers

projects. ensure in available those differences we jobs. structural some to have to pricing have there's And lower-priced of the those that structurally deliver B So labor we

Adam Thalhimer

And just pricing. Dallas Okay. lastly the

price that at talk in a was there think all? increase October. Did we I about

Ronnie Pruitt

October, price announced about did an in yes. We increase talk

Adam Thalhimer

so point? And through sense have we how of flowed at do that a this

Ronnie Pruitt

we increases we've the to literally a price we one. think I with jobs in one quote get to day in move announced a work negotiate past explained when chance price. as that every ready-mixed concrete, We those get chance by

or that is aggregates lot went and to tied labor the materials confidence continue good going very to in pricing going when have past raw when to and more is We been a it's that. of cement went that up. improve drive to up Where

is a think I market. pricing force which very labor, to tied to good more be move to going in it's this Now

Adam Thalhimer

me. Okay. guys. for That's it Thanks

Ronnie Pruitt

you. Thank

Bill Sandbrook

you. Thank

Operator

with next from Company. Julio line the Romero question Your Sidoti & of

Julio Romero

everyone. Hey good morning

Bill Sandbrook

Julio. Hey,

Ronnie Pruitt

Julio. Hey,

Julio Romero

You have efficiency. time to initiatives. ask on wanted I the the some doing those about driver alongside mentioned works operational Texas your optimize initiatives at that really is to driver focus how same retention you're

thinking they Just view areas those looks forward. going focus of from two of like it point my about conflict might

retention So and can you to at balance just optimize planning talk efforts both how about efficiency? same you're the time maybe

Ronnie Pruitt

Yes.

of our a about associations when -- We've some well of the retention mean other due majority of a of pay. talk as as And lot both and lot done -- efforts independent groups. we So national leaving to the with work jobs not we some have studies. I is people

must So communications. more. inconsistent not is pay It's pay have five automatically list. them you – to There's in well everyone like number It's says, just the It's scheduling. it. on

into their believe with drivers more make better and – want drivers delivery efficient, spend to the that there's lot goals And the visibility their will technology going I so it to will it's controlling efficiency in our we're driving it will be and believe they investing I say, better things give and times. to time I times our which productivity – we're into families. is down not it going more workday and a opposite. – mean, of But our this their

in buy-in daily accountability schedule their drivers these make have what's over into more to more With our things and their into control more and we're performance. happening investing

solves That's problem. just, we going not money to it. and more the we're pay it's not that So just think

Julio Romero

if primary least maybe, maybe mentioned driver of as in the this as retention? well? or – that And better pressured drivers you the can maybe Understood. what some But also the need biggest sense other the other XQ within given companies factor the it for Was us your looking one at may ready was mixed of a backdrop quarter, that the was you weather factor maybe quarter? industries better which give

Ronnie Pruitt

mean, at basis Dallas if look Yeah. I a was up. you year-over-year quarter-over-quarter it still on

because like year-over-year, maintain put in the over meet I plants Dallas. is not lost you and at scattered mean, of it's wow, as XX-plus it's it's saying, up and were DFW more Metroplex and we and to XX%. growth moving I ability drivers seats and we saying, so the XX% It's mean, So look more predict up to anticipated that we're DFW it's to ability really it's our not or looking our forward. about Metroplex. areas as anticipate in a put the just XXX-mile talk we drivers ability Dallas our easy radius when consider well

in it's to Midlothian out Forney. suburbs, attract area we're Northwest the the at the to trying Northern So where a Fort big area Southeast in Worth

have growth of areas these our remote find areas. of reach much in a outside mean, drivers Dallas on, it's I and but going these ability all so to really lot

so And just reinforce which Dallas to confidence this in we're as I our up, continuing and extreme don't But pricing want our us that I fact said in Bill that's great the to lose opportunities to gives as want see was market. and focus.

Julio Romero

do XX just still basis underlying one If Helpful. here is months? on those margin to track the XX XXX of could I you expansion drive squeeze one last next to points feel over

Ronnie Pruitt

Yes.

we we're at in and the has think And someone tracking I too. we're and it's very those mentioned, everything. the in mean, market confidence much as end programs have our I day online place the of

underlying So, when products can we strong. drive put very based we in programs efficiencies that more we the of have on in to the demand market, place is we these our the have believe confidence

Julio Romero

of Thanks Great. best in luck and QX. very much

Operator

line [Operator from Instructions] of question Your next Elliott with the Stanley Stifel.

Stanley Elliott

and say about guys you Thank the you mentioned all question. of this. I I it? for apologize, guys. anything Did morning, missed you at Good quarter taking end the backlog if

John Kunz

one conference backlog as And the I after you we is non-contractual. and didn't. things our I No. well think your mentioned of Stanley, mentioned I with

it's consistent not mark. the just that the that we mean, year. indicator. guidance was right continuing in revenue because but is provide around backlog really our I provide Last forward, backlog our it's it with provide eight year don't with non-contractual. do I and good we where anticipate QX, a we million-yard revenue same. going to But We So said was last mean, were guidance,

Stanley Elliott

you And the marketplace. savings about that they're putting of any you're you're seeing require some guess, vendor? the additional the that you capital is some or more there then That's quantify it your all some of seeing that out and from that improvements the of talked in all one fair. going And customers I analytics to are seeing and two to that? you preferred sort year of of maybe a making is next for are spend into way seeing

Ronnie Pruitt

capital is to going It additional spend. require

development the that drives the in that the provides we're of CRM, rollout what us the to and business. know our we we're in develop. is control So middle and and continue and our benefits On WheresMyConcrete we'll both

what need to around are that lack we decision-making. we So focus know analytics technology the of impactful to develop the the of areas lack on really or

business customers to that operationally, in do going a is our but for we everything better company do make ourselves system So only not to us for with.

out So York we've in New Washington New system dispatching not only and the rolled Jersey. D.C.,

in more trucks, starting customer rolling their the out into billing, Texas, their timing of customers we're we're Now electronic our apps. into It also visibility their into paperless. gives orders, billing,

efficiencies life in what to real to efficiencies we're the the catching lives in we've -- all mean, that's which gain pushing off we for life is is your doing things your of this an been we to up very may the sound believe you've true. XX up, steps and -- take. think just normal these real gained got just we've as of and where lot the ready-mixed is years some I says, we're our which is can doing And to technology. catch slow just about that But person industry industry, a

continue invest So users out and internal and more own -- we're then development to of cost and in it. our both and people, and training going of as headcount we development it's to roll

John Kunz

Yeah.

capital to then let of an operating perspective, from CapEx about a capital Stan, for too expenses talk and an just perspective. me When going from the investment, be clarify So investment side you accounting it. it's both

be will as operating into head we for this So expense additional XXXX. from we an costs incurring perspective

Stanley Elliott

Okay. on you And by go-forward to a the are of way on all run basis rates a kind B savings of York, differentiating matched guess, kind up lastly, of then here is the there going rate a then, basis. rates see you around quantify labor having maybe New the lastly from A the And to or I kind of in of how save? could labor all go-forward kind much that confidence

Ronnie Pruitt

Yes.

alone it. on source So ability side our XX% amount ability then the when market we It's have about you a and seats cost to serve right that difference is in with XX% B footprint on the to of that cost of versus difference the labor in B the labor savings the talk and and that. the to about drivers our just right right A

-- delivery we're cost able located gain. the affect where to the And with it so we didn't being of at efficiencies that other

of where of So up pick magnitude we piece that's the kind on of delivery the that. could

Stanley Elliott

very Excellent. Perfect guys. Thank you much.

John Kunz

Thanks Stanley.

Operator

with your D.A. And Bill from next question of the line Newby Davidson.

Bill Newby

question. guys. on Brent my today. Bill morning for Thanks Good for taking

John Kunz

Hi, Bill.

Bill Newby

see Bill I shift, you from guess, in what New back guess Manhattan any over potential the see more significant year strong into a did the the given York. boroughs just you you I volume in mentioned next the permit area do front for you you? of

Bill Sandbrook

in equivalent But I a B in high-rise margins Well, construction are of little lull work. on perhaps marginal, on we're and Manhattan. looking a we bit would A because at say

boroughs low-rise Manhattan four versus the EBITDA in of of A So, other as versus I overall profitability determinant our mix at opportunities the of a real wouldn't or construction look New York. mid-rise, high-rise in a

deliver our I with rate think margin drivers what's to much is B drive work B that rate more ability important to effectively.

not say marginally York -- marginally -- it. I'd am of opportunities. construction, high-rise some margin on So that's some overall the but I driver bullish improved New

Bill Newby

be mid reasonable to want is that side, don't year, guys guide we And far next seems and that of starting seems too about what kind you for of it. as Got point for That's seeing in to I year on commentary the get price next kind kind then aggregate ahead a it. you're be in but XXXX? for understand with it I single-digit consistent think of industry range. Got helpful. to guess

Ronnie Pruitt

consistent. That's Yes.

Bill Newby

Great. All taking questions. right. for my Thanks

Ronnie Pruitt

you. Thank

Bill Sandbrook

you. Thank

Operator

for will closing Chief turn to Sandbrook, Executive remarks. and And Bill it I back over Chairman Officer

Bill Sandbrook

quarter our This look we you Roshae, forward in Thank you for U.S. and participating full you to your and our with call fourth support February. the morning Thank in discussing Okay. and and everyone of thank year Concrete. this you. earnings concludes call for continued

Operator

and this for Ladies call. today's Thank gentlemen, you conference concludes participating.

disconnect. You may now

U.S. Concrete (USCR) 8 Nov 192019 Q3 Earnings call transcript