USCR - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the U.S. Concrete’s Second Quarter 2020 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. [Operator Instructions] I would like to turn the call to John Kunz, Senior Vice President and Chief Financial Officer.

John Kunz

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

today Pruitt, our me on and Ronnie call the Officer. Joining President is Chief Executive

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

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

disclaimers discuss X-K, facilitate the earlier call that of contained our reconciliations measures For factors, this of Please a SEC. in on and our list financial the these can is website. risk legal discussion other today’s filings in A and find with please Form that the investor today. the on note you available we relations to non-GAAP the regarding the information section filed factors was presentation will which refer to

review markets quarter. Ronnie the in businesses to turn began in in a March over I These call [The] disruptions I reduction performance quarter. results especially volume for offer significant our serve. continued revenue during April, coastal results. that present in financial to disruptions the comments, his will Today, the Before we pleased into our and to we are resulted the second

technology. and in in utilization and result ‘where's greater We achieved primarily efficiency adjusted cycle quarter demand. the of improvement of steady versus equipment, plant of of a cost margins concrete efficient the utilization equipment XXXX, of progressed, EBITDA higher containment, aggressive technology’, the As overall we quarter reductions the through my use analytics, use The our plant quarter of was a substantially and and our proprietary second rebounded use our experienced and and in as increased more data the times. achieved

since the and a our strength direct the pandemic, testament including to challenging business of environment of to quarter performance of Our the our team's the our inception rapidly results this second a of response is result strength model.

building demonstrates integrated produce positions conditions. concentration the model on vertically focus results market us quarter an and times in and during our increasing of Our robust defensible with strength helped second the difficult aggregates business market

record investments quarter. in performance and second notably significant to in of led the Coram Our aggregates, Polaris setting aggregates business most our

the were projects customer’s other in business, last orders These shutdown out in a the our in During was Even compared restrictions year in a an $XX.X rolled the quarter, most were disruptions during prior the year’s volume regions. various though million, delays acutely our to subject requirements, EBITDA shelter and impacted as deemed of lower to pandemic, the demand second place related and XX.X% XX% million and decrease, $XX.X quarter. many the quarter to being of essential compared Despite in the implemented. resulting quarter. impact adjusted increase, $XXX million, the revenue total restrictions we revenue, were second of were coastal felt our the

operations. in both our Our the by the XX.X% and adjusted versus XXXX. driven aggregate was during quarter This EBITDA margin XX.X% mixed quarter was improvement second of ready

of points, XXX to X,XXX which points and basis basis Our year, the adjusted an margin prior year. increase which was EBITDA prior adjusted ready mixed margin was was compared XX%, was up versus aggregates the XX.X%, our EBITDA

were Our material to able quarter price the material was year margin modest to increases. at flat prior XX.X% we compared recover as

to the for Coram and initiatives, realignment accounting purchase for adjustments Our EBITDA inventory. relate compensation, consideration, stock primarily adjustments quarter contingent

interest our tax effective adjusted XX% $XX and in the to million expense range. For XXXX, our million expect we to be rate to $XX approximately be

balance provided year during activities the Moving $XX.X adjusted $XX.X cash free during second quarter the in quarter. cash and generated $XX.X $XX.X we second of million flow compared million quarter. the operating We year of generated in the more to by prior sheet, the than million on flow prior cash to double the quarter, million

containment operating the Our performance this cost and quarter efforts contributed to during improvement.

Our respect $X.X the these working capital focus with to and effort added during quarter. to million results

XX, lower a our quarter our times March with cash flow net XX of resulting the March EBITDA, and pay compared debt XX reduced of debt million trailing as in our months us of solid quarter. end at at Our $XX XX reduced net of to net debt $XXX.X quarter-end, ratio. to return, in leverage The June position down million along compared by debt leverage X.X the the allowed increase about for the to

availability As under loan. including equivalents, we cash our term million and million of draw June total had XX, of $XXX.X million of delayed $XXX $XXX availability liquidity cash million, of under our plus $XX.X revolver, of

of capital invested XXXX, $X.X quarter expenditures, million second last same the compared for in year. we million $XX.X approximately to During period approximately the

business opportunity XXXX, growth return cash For to circumstances we’re million. free for Similar above planning a are once projects, to million we million, for the capital this to range but to the high targeting given improving $XXX environment and full-year expenditures capital of the and high could if to $XX allocate $XX we reduce flow full-year the within be change. again amount XXXX, both

base, quarter, improved While the management With the to pleased are during to turn will team during data we quarter. employees costs, call the technology, and performance our to challenges Ronnie. led that and I had rose that, and the leveraging very our by operating our over controlling challenge our of we share asset which analytics,

Ronnie Pruitt

for the challenging Thank morning, everyone. Good I continues know people. to And you thank this joining John. time you, call. a for many be

and foremost, hope I and all first healthy you're So staying safe.

people the and healthcare our to of continuing following the leaders immediately customers. ourselves with of taking serve COVID-XX, of we of priority our to onset With care guidance a committed global

maintaining our commit monitor to priorities. continue We on important these mandates government focus related and to

second the cases balance restrictions in and in that our comprising place the XX%. quarter COVID our on of dynamic shift and in to of construction of projects between of and during restrictions affected was markets, projects We direct a markets daily revenue most a quarter, XXXX and our across our very correlation business. New revenue timing those to in in a operations cases government with due witnessed country, and the the We and We their the were put the that a witnessed environment the and the adjusted in number serve representing deemed number East COVID basis our due notably impact California. the geographical markets, regions XX% The essential. of customers to region West operating imposed our central York of

earned to markets in April, during performance, each the XX% million construction May $XXX.X revenue to earned as sequential XX% generated restrictions XXXX, the and June. we with Turning in market XX%, Each during quarter essential second our from the of month definition earned of activity quarter, revenue across in we our were in of modified. in increasing services growth saw evolved

almost revenue had U.S. concrete’s tons to of are million million record quarterly setting operations X.X that announce pleased $XX sold. with aggregate We

Greenfield was an saw were a up of aggregate and margin $XX operations Both the activity Ranch, production at adjusted EBITDA EBITDA quarter. of and we XX%. Revenue during for our of led net Mobile sand year-over-year quarter-over-quarter quarter, in operation. supported freight regions and by MW increase volume operations at million significant the and EBITDA construction Equipment our adjusted strategic their these and and for during our in Our our investments modernization Amarillo plant gravel the aggregates of robust second with Texas

segment in full sand gravel February. Coram that further aggregates quarter was operation performance acquired by the Long and enhanced on Our we Island first Materials, of our

area. integration in to pleased support very the pull-through operations of are party our the the New volume third external with the customers sales Coram, We and to of York

York operation, to tons our the Coram addition internal XXX,XXX ready New consumption customers mixed shipped quarter. during our in external to In

synergized As on achieve is post to of previously Xx. discussed, multiple Coram a target

segment $XX ready adjusted over million X delivered of concrete nearly of during million generating EBITDA. yards concrete revenue million Our cubic $XXX and the quarter, mixed of

changes consolidated ready Concrete to while mix. measures our The all diligently business each the platform mixed were technology actively was of the implemented cutting proprietary U.S. geographical manage operating to data business. each and during our to ASP and changes but concrete due quarter, re-engineering real provided Our in in our was analytics our efficiently slightly the on business the environments, in its to at valuable employees and product could CRM we to cost respond so basis time of markets and a and up respond the that down WheresMyConcrete

form showed in to second and The structure and our to scaling quarter variable an adjusted of EBITDA margin key nature managers second the delivering delivery XX.X% margins market the to materials each by improvement quarter, in the resizing mirror generated the for of two-fold. the and XX.X% assets our to market is conditions. cost as example, labor XXXX. our agility of the The their During we in of operating fuel, compared of

cost, for platform were our plant initiatives: management, asset our on delivery management focus and improved expenses driver continues variable, yards customer Our consolidation, with on processes, for converting with sum the of service mixed sourced higher labor office of internally hour, back WheresMyConcrete. of what efficiencies team to concrete, focused utilization, fixed be and traditionally a the enhanced to technology following use aggregates, optimization

lower cost and lower from the volumes fuel quarter. benefited traffic also We during

these measures of cost improvements structure our and are All profitability. driving to

margins continues on operating to focus efficiencies. be operating and Our

will quarter, our a April's. were prepared than restrictions demand either they markets as still June's quarter be, These second improved operating markets work our We're to commercial, evidenced address pivot performance. that what remotely setting, work patterns are exhibited as as residential, to As the future, results, live, lifted by during impact commute unknown. an substantially changing we the to performance serve. where our environment will all also fully performance office trends was infrastructure better and In and people within in by traditional how the or our

what business view which third XXs markets activity possible, is that to resulting an quarter. and I healthy business is assess result EBITDA and and difficult volatility the levels to anchored today, we limited, their While our still on the future demand. in quantify. Based will all are companies certain that further for clearly restrictions our in changing pandemic's should know construction and economic adjusted in evaluating the in impact landscape be are the restrictions am

XX.X% connects Construction to spend Looking the place we presentation XXXX, of detailed a analysis refer over into U.S. a in construction Please supplemental X forward Slide markets spending serve in our MSA construct XXXX. provided. put projects increase in for commercial

and the relationships, have of and locations, mix to leader, a have we the designs expertise with participate all project. support the As of market assets sectors the in any materials type plant construction and industry and

to projects complex discussed. projects capabilities operating It platform. we across the with conditions versatility variety diversity recognize we large have wide portfolio infrastructure and very a the diverse that and support of with that This have of to markets important continue projects handle our conditions. and market to large We dynamic thousands of is customers also consistently in highlights favorable thousands commercial underlying our

We infrastructure. locations, With attractive growth, the to population projects and well-positioned proximity ability, concrete in-markets these have been whatever infrastructure markets, to knowledge, over our the are support the projects and projects. to population has increased and represent residential, demand, support whether Due and aggregates be national desirable with and U.S. and Concrete to markets than the or agility drives our in XX% the rates of for commercial, average. U.S. will seeing higher of

with coordinated We proprietary technology be aggregates of major for positioned platforms, attractive better and with alignment bill. formidable are markets. near confirms and will distribution concrete infrastructure terminals many infrastructure all which are to aggregates foundation of and located strategic our our our markets that any support contemplated now even a This

be We our continue focused laser to strategy. on

U.S. variable a durable, purpose results major our Concrete have as have and structure. Concrete’s United to stakeholders. as mixed quarter management crossed our efficiencies, company We metropolitan evolution diversified is operating employee portfolio with important operating margins by to with second deliver assets, and our U.S. aggregates and financial States we an cost second our We of a operating results. integration a quarter of our all is in further with the sense Every in for on through across assets diverse cost results, exhibited milestone robust provide maximizing ready our operational our for long-term vertical focus regions

improve We our we have times successfully that even proven of and during maintain can margins operating pressure.

the significantly business, XX% impact quarter. our aggregates segment of generated reported We have during EBITDA which of grown represented total the adjusted

and we our difficult We flow. with leverage products conditions free the X.X quarter. to cash over We and stable of have improved improving recognize liquidity generation our pricing reduced of market the during times our even

concrete, focused focused on on a on are are results. company and delivering are we a company a delivering focused we aggregates, company delivering We

word team call and and ‘we’. for are U.S. our is evidence questions. tangible work If want you of I the results noticed, hard all I a for to This thank I emphasize of now dedication. effort, their the to Concrete’s employees would and leadership open Operator, efforts. financial like their

Operator

is Thank you. go [Operator first Paul Please ahead. - Our BNP Roger from question Instructions] Exane Paribas.

Paul Roger

Hi, the good And is with afternoon I'll Congratulations margin as please. big London, taking Obviously, for my about always, And guys. two I them, guess the results. of story on questions. off the just performance. today, from start excellent thanks

realistic do a you then like let's it level sequentially ready is on you'll question X% the they're mixed is say second will second when fell, get half? I think think half, and in margins, again about that sustainable we but looks the in in clearly, that's those the think pricing, second And quarter. my about the Now, whatever they demands be

you've mix. Now, mentioned

So, should been be we quite is a industry about tell volatile. the that? that mix on typically was to historically what it how pricing adjusted And us has basis? concerned Obviously, possible

Ronnie Pruitt

pond. Yeah. on Thanks, Good the your Paul. afternoon of side

take I'll question So, margin. the first on

So, a if talk want about really we million I'll QX at points of to yards. right around I think couple so were X about. give quarter-over-quarter, to you sequential our data at look volumes, And you

about very similar Our at X volumes in QX yards. million were right

as over and look at cost which our and at on those our plant I about about then percentage at look our the total and cost, cost, really down going little is So, cost a repair at a On take, basis, XX%. operating I’d I'm ready our delivery what quarter-over-quarter, comparable plants, facilities, I plant talk $X down look total our a our was well to maintenance is I and total labor million. total quarter-over-quarter, those as in were our at amount, if our if when they labor dollar mixed

maintenance and additional was repair an Our down XX%.

$X only You total a of side, tailwind at million in and look that. a I down we know, made take has talked Q-over-Q sequentially. everyone delivery If million about fuel about tailwind that on fuel. the the on up on were I about we the on but really $XX on fuel, Obviously, had fuel,

XX%, delivery that think cost, things I labor was when cost delivery so R&M other And about our the down our delivery go into was about down our XX%.

let most side. to where manager planning. out to insight and the dip watching the pricing to control. I'll things labor know, with So I there And, And, help our those you is you that, are the me that made. every side to we on we're And has will want we Traffic Those have are decisions little continue just, technology but on a really tailwind, of that. we you control John a know, been over the tailwind. also give we that be continues fuel driving emphasize a I focus and congestion

John Kunz

with answer your ASP, on is a basis, our is short to to respect actually ASP Paul, up our the adjusted question mix X.X%. So

just about know, think you the region they higher of obviously, if ASPs. hardest you Atlantic one that, was the hit, Now, the have conceptually,

we're see really So them and mix the basis. every to up on that is a drops, saw when really pull in X.X% what regions you the just but have down our region. as know, individually, the you the quarter volume ASP, across We adjusted a regions, we going look do obviously but in region, for didn't that's decrease

Paul Roger

now? [WheresMyConcrete] help it answer is what logistics and that's actually it labor? going first the lines And linking Ronnie's address? using what is UseMyConcrete just of [sic] good. really network does it to UseMyConcrete Is tool you or down Okay, delivery [WheresMyConcrete], [sic] question, the to to your And proportion back this

Ronnie Pruitt

I think is our… you referred WheresMyConcrete? to WheresMyConcrete

Paul Roger

Apology.

Ronnie Pruitt

okay. spend money Paul. that That’s getting name of We there, lot a right

phase we rolled of that our installing rolled So, first currently Texas be region on in the and ready California of footprint. WheresMyConcrete, half we're our our West it of DFW Ingram year, ready The it, it mix. is into Atlantic our on will it. the next In out mix out all entire

scheduling system us customers of a about our the try taken the to that, drive it’s our it’s would our our And that serve it’s job job. far on, so system. taken, what trucks do three through a historically allows scheduling, of of scheduling way what eight probably running would efficiencies a so XX done about know, scheduling think four thing serve yards the and serve a we're a it’s little ahead out think of as to us now as we when we're job, it if is of job the taking you to we getting have do, orders, and all it's have estimating serve to the hours number you the of using over The to of takes to of quarters labor, and X now historically impacts to trucks analytics hours delivery,

weeks and predict going So, if estimating ability business, is the know, efficiencies. it back in we system's know, on that we estimate know, critical we to been didn't to didn't Because us. have, patterns, would you old way that and that taken would the we real and know you to that own, of drive time things were our have traffic maybe be learning and our several doing really

from time so that's and and the a making for more schedules model demand predictable it but needs it, those most needs, use of we're do. and trying a it assets. our we allows the in-bound to traffic really of so predict managing our in and that's with that labor it's what technology to it's be all to and predictability also predict materials. what adds It to basis, us – to a real And On lot adjustments labor printing functions part,

Paul Roger

Thanks That’s a really lot. interesting.

Operator

you. Thank

Our Please Thompson next Kathryn question ahead. go with comes Thompson from Research.

Kathryn Thompson

for today. a how my times concrete you side Wanted of in much lower much forward of but questions your for was business, in from efficiency look or and of basis, how the really more variable quarter does along guaranteed have by the you internally with thank future? shortened other taking margin on – efficiency and the mean you labor to with done including go tools of you have on terms versus changes back that know Hi, on traffic, cutting drive could also the driven clarity front you cutting margins costs, on other the more for times, improvement the costs the the that labor, and that give may what

John Kunz

Yeah, Thank morning, good Kathryn. you.

the tell the we've of And going further, you about those those quarter the I year. reduce know, know, and, know, even in first fourth breaking in-line at of some our know, about, that I through pressures and more Texas would guaranteed talked April. in market. in talked we you level, with to a You union you also was our you, We we here non down just in quarter call, hours numbers on the consistent that early labor know, yes, did our attract talked how footprint ability high and implemented hours past in in guaranteed in about, the you last

of those during dramatically know, pressures we things You the lifted seen one time. on the this labor have is

labor about do hours. lot but lot our time, that managing to delivery is turnover has being this think driver Our cost of predictability, better again, our costs down I a a when our labor a that XX% sequentially, there's we those with really perspective, of driver from talked during

do but say comments going and It know, would to is back, had those If guess same going to New most impacted this know, don't know, you not sustain will there's this that's like and Francisco, ability and are well, going the know, or traffic that? be, never another but office New taken only not most demand you demand, the I've the labor we the Now, if meet congestion on does the ability at those And markets able office going I is that's you you San whether there ways. to as these to a and you time, we've way residential, I've I sustain I down to kind help be definitely – to going York traffic going make said, they're then of commercial, of needs those whatever markets do my the I I've the build in does. argument really for they to of to labor. to and other, the pivot that or our never are York market that going to build be would back. can building can't our either in to from whether you're both will argue time, never managers efficiencies. infrastructure, concrete results the the predicting be and buildings have positive whether adapt but think long we are may traffic our that's One be, shift, managing to thing demand, the daily needs what is, that,

where a I'm in that, a extremely it that some continue going we cost to margins pleased took we're model, to variable Are back? the you of pleased know, come in so that drive know, I'm There's those we in but You of there at. And factors off. extremely to influence ability delivered. And out depends. our lot just costs cost

Kathryn Thompson

be So, as the labor it’s could the kind a is – fair perhaps portion upside not of there all, the classified outside margin say to change more that but that of a structural decent element. the

John Kunz

Yes.

Kathryn Thompson

Okay.

John Kunz

last, you you plus did ability I that think mean, what the we've do you give us assets. you've I acquisitions look I mean, growth as the manage out the is know, the past, at look Concrete, done years, of U.S. eight that pointed and at, over it the to Yeah, in

just, assets major at our so we that and to have these a I ability zero we that plant take have market. if down. these needs, big about labor there's if I I can ultimately, cost think don't we areas, serve when we multiple to plant can that take that coming of down, labor we into out and plants, April my and plant what any and opened when to back, cost that we're costs we're there, we and obviously a back going really saw, then plants is don't June, May, come serve labor And you that but we goes operate predicting I as down, especially those metropolitan on doing in all markets, our a mean, up have plant. less demand in mean, that's in take the to way the I plant

we're an a are company this not looking standpoint so delivery a as also And at but as from many plants just asset that these well, management operate company, production in as locations. we

Kathryn Thompson

Northern you faster trends markets? little helpful. of routes it's give bit California, Northern, in are of update the Southern California of just understanding that shelter-in-place where terms both activity and back Shifting seeing are now, are than Southern to in those between what a in Okay, and just that us where an got Because terms California? you now you you of, volumes in kind not just but could

John Kunz

are know, Southern interruptions that so, were on California we specific we less California, more the because just deemed Yeah, of or the from Southern our steady we're We with essential. Polaris. that tell during – I in you there our pretty Beach there. Long work less obviously, project quarter and was supply terminal business with you that type of would

to have in are Northern of opened because look you in New a how you analysis from as pretty those a it's for seen variety lot smaller a California. And steady, restrictions place, that's and on don't you and we a forward, financial And then I all far the in is, as obviously as do, much there's that predict think So, tough restrictions presence volumes thing out to little lifted, California, Northern shift, in the a in model, put a steady. spend were pipeline opportunity the our it wide a Southern a very tremendous the there. we pretty to York quick far that projects California, as recover us. less with would immediate that out the different haven't there, saw we was of demand like know, we're, and similar of very that, early know, disrupt residential in has up, we but side, of market been I obviously have lot were saw the as back lot we interruption and I bidding market think technology perspective because of amount we we liquidity tell that on we different impacts

I a an on there's, mean, tower use did So MEDPOR downtown two ago. mix office weeks San we Francisco

willing not with customers. everything's like, an a not it's having a seeing so still very wow, And We're a still you're there's nothing, good just think And to lot interaction lot come of, end. We're activity. in that. seeing why still I of our know, you of lot what you to we're guidance after say, blurriness ahead of that's we as we'll think get? confident know, for far our say you third are we looks I crystal to it as and re-evaluate far ball and a how quarter said

Kathryn Thompson

for geographic at final for and you Okay, very helpful. key Texas. looking once And point, again, market just a

you to thoughts, little a in – that market, bit of kind that side. Your more exposed you're know private

what non-res extent, on resi market are you specifically terms very seeing terms that of are much. market the resi you in So, in some and and Thank of debt activity? end to your trends in what thoughts

Ronnie Pruitt

on the some got were then told thank that hard that goes, construction, distinguish and would quick. early as on customers and and lot far we stay the was to resi seen really and to really because pretty most some side we've weather, impact have and was going it on mixed the of consistent. and I say flipped you. with early of houses impact were the so weather resi going Yeah, Yeah, COVID pretty so not as to new much under both that just Texas we that initially any the side was they were start continue a all us had

very results consistent on the resi seen side. we've So,

continue I side, non-resi the same trends. we the to On see think

major cancellations. word bidding seen a delay, We've basis. are words really jobs pushed as like and daily out, not the have anything, we're weekly on seeing also that seen We words like as but far

And that that markets, so we're the on that's per be consumption so, at population you the where you and is. going know, I capita in right where equation piece based think look to people to are me matters. and is When the

nowhere, whether easy so, where whether at I'm And the and whether place, of the they're much that's in easy. assets commercial for today be in the that to I are build me, mean, extremely expertise. my pivot ability that we've or right than would the is to I got infrastructure, rather something again, extremely that's is going middle residential hoping

the demand a whatever to is, we're meet. in So, position

Kathryn Thompson

much. Thank very you

Operator

Thank you.

Our comes Please Trey from go Grooms next Stephens. with question ahead.

Trey Grooms

good Hey, morning.

John Kunz

Trey. Hi

Trey Grooms

kind the there especially on on things congrats that first a my the little we’re talking of coming but know that I increase how but much quite structural aggregate the about you side specifically you know, much aggregate on bit, the side, was work, margins. aggregates, a seems that's touched on the on on about ready And the lot on And side, been of mix is it more massive like Nice in there Coram of the margin. gross talk just is a due on, the bit that would how be you've and made, more question? of Can that changes to and quarter.

John Kunz

Trey. Yeah,

fully out a was the a Greenfield that our I the benefit margin I in that and very maximizing of also benefit you called also, Definitely on the online was continued through year, really from Polaris know Ranch, definitely really in-force side. but know, the big toe quarter as think MW first investment you from Coram.

the talk aggregate it freight net on our guess side. and way of look we margins I at You Trey when XX% know, I about would

You a stepchild gravel at think hard rock of is of and get rock sand hard necessary. lack we know, Hard as I credit people the kind look is to rock. is good,

the plants Polaris, with when have and fine quarries at in with every with single hard have structure, yard, have Ranch, concrete, aggregates, We Jersey, that I of if today yard within look efficient, have needed much is I’d mine on It's ASPs I but just River, very mean, there's gravel we I for Coram really they're And Red I at drill and My look a our rock quarry Chatfield, very, with aggregates and I little and the how steady. look MW you aggregates and sand of fine you list Rainbow, the if extremely there In have. there's just at with down so New cost. operations blasting. needed. don't the you go sand. also different. cost

a with good we've aggregate think And a we equipment put we're and in operations a strategy, payback coordinated invest continue matters our and pull-through to our position done in everything also so talked and about location been what in efficiencies. has good around really improvements strategy. I we from we've mobile has really as a our for done, our those just we that continue to so

hard work tell. that's the it. did downstream a the downstream same the for. we at the through And lot about not it, so we integrate we to assets, thing story the the rest and the did Polaris to Coram think have And the it, continue of pull easier. assets. Once buy We that to try what exact and example is you can I we on that at Coram we and continue story is And work we control that's talked another credit lot, we get is

people results in our we've what the right but definitely So aggregate. credit continue hopefully, you to operating right us teams you I the And, have business, for and place know of will very with did. know, and I'm can done tough a give locations, the what these It's in believe we we're right teams proud deliver.

Trey Grooms

now the quarter to closed sticking know you know, with you right just kind second, aggregates Coram still hit. follow-up gate just worth know, seeing, out guess had, And I you you you then, COVID definitely on of for noting. XX% know, the a and in of is EBITDA And aggregates of you that

we've So, seen, clearly know, I full potential. I don't, its you don't think

forward? how portion aggregate So, of are thinking that we EBITDA your go you you mix, as about as know, total a

Ronnie Pruitt

as, that see it as know, you sides. both in think interrupted the COVID, we I XX% interruptions

So too. it concrete did interrupt the side,

the improve, is an sides aggregates we've of you on have see and know markets, to we've continued would a influence. continued obviously a see EBITDA the margin as I month-over-month side, greater on side much a, going So, to it to sequentially you tell both improve.

Coram sales clean lot just side, a it's FOB really, revenue operation of on is FOB has know, that a the of a You really lot and customers. so

York one being pure that really the a a integrated pull-through market. of fit know, other of market. entire New it into us visibility that, benefits You for know, that you in good It's vertically with side just the is that of the market into is gives just us the

in in markets as not So, party it diversifies so operations, own are supports and and our those in it lot well. good commercial really have we smaller and third there us customers residential that markets diversified also in of other stuff other infrastructure internal really there, a but all only

us better volatility York the market gives well. it cushion New in any as a around think I So,

Trey Grooms

right you heard around that I and, Got it to technical number you're little XXs seeing that, the, kind if what I can of more adjusted drives to you And know, secondly, what's just around was little give difficulties make number first kind was it. heard into about, sure And that commentary backed switching that you that you in a sure that of guess? you're you what’s color saying and your kind to time, you then the grabs and maybe bit you like up breaking gears to to know, of know, had of you off? what bit I that make right, sounded a I some range. I XQ, want EBITDA it having

Ronnie Pruitt

we Trey, anchored did hear, you should in XXs. Yeah, have the

side, this confidence I've tell sequential things place durability we you the we improvements. business gives there. us what so to to will And that on a in and see is; I two, manage margin the one, little we've the month-over-month-over-month what things And the continued about the talked that put we're side in range and pressures get see; trying through

we're QX far I we're our really the concrete demand to can assets meet so to aggregate be absolutely to in predict think around getting patient trying whatever confident and we out and side, enough not the but that our manage we're and absolutely think too that visibility, get have that And can you we and I that I drives going we can a demand the far be in that maximize that. demand will we're into and out tell ability ahead of position that business, demand.

Trey Grooms

Understood. Thanks for the color.

Operator

Thank you.

Our next question Elliott is Stifel. Stanley with from

Stanley Elliott

on everybody. any the if I you this, juggling July? I had commentary good calls I of, guys heard of nice plus in if million I bunch this July? on a mentioned but curious provide for just Trent did Hi, anything you Congratulations quarter. morning XX have was you a morning, been apologize EBITDA, about kind said

John Kunz

not. did we No,

is, Stanley think we said business. sequential see to what we in I continue have our improvements just

markets the we have April, I the gave July. continued to back in as that steady we the stable as small just more markets stabilized example into as you the up, in difference May, So, we've trends how and we've did, see June, continue opened see in of difference a look same difference to in the the increase gotten

Stanley Elliott

the terms in provide from guys of ramp in that piece? acquisitions you any contribution aggregates the quarter nice Did on Perfect.

Ronnie Pruitt

difficulties out had of, through even end Now, were that the that Even what called that. timing but Coram in-line in you on Coram on I believe where originally of pace however with a can multiple the like, that we’re in we was, where exactly February called post-synergy I we you at on COVID, said. said of the would and think we all through were that confident and we absolutely going that external everybody influence absolutely the kind announcing we acquisition, is model of to we mean, out so have, Xx

Stanley Elliott

split union just And those markets? job costs those Just non-union kind pretty on how if there trended, curious lastly, between any side, a it and were cost. delivery your well between did and you cost Is the different nice of in kind two? of

John Kunz

would shift Yeah, perspective, of and revenues in central. XX% was a from the east, using we was said modeling tell our you XX% came a from our what XX% west, there I regionally in

higher contracts use if of perspective, That's So, volume a and Obviously, you wash I that I those things. labor on of a will in but some use. costs think, things good would pretty model that our like out. that, to from of kind cost there's the most kind say model quarter, union perspective,

Stanley Elliott

Perfect for the guys. Best Thanks of appreciate luck. it. time

Ronnie Pruitt

Stanley. you, Thank

Operator

you. Thank

Our next Adam Thompson Please Davis. from go question with Thalhimer is ahead.

Adam Thalhimer

Congrats. guys. morning good Very

John Kunz

Hey, Adam.

Adam Thalhimer

of I'm just know things during and disability have months to moving curious, at improved front, ago, the a of your schedules, kind your has with the visibility faith around couple you that on concrete general? kind Hey, all in just I know, just like pandemic, hard it’s client’s

Ronnie Pruitt

use developed. you know, I have of, that technology part CRM, from think system CRM our In is we that we we've the a WheresMyConcrete a visibility – standpoint our we've that we of CRM the more put place rolled is us it everywhere. level. actually allows out customer that technology ahead CRM what of We way in the and to to the dispatching specific does down be

of lot the the the jobs. that as inflows customers end and we a are trends, biggest the track on of we day, as So, of outflows ones at our see far because things customer impact

And a because the residential, commercial, good customers where have segmented and so if have visibility there's and we I at trends, shifts segment real market when they're in we mean, infrastructure. customers really start we in customer pretty predicting year-over-year in into think customer I in segmented

trying we smarter visibility our like. people looking going can the to we more things we're are forward Age, just to backlog, and a think our so into that there that talk our what labor, out backlog you that want because to planning data from look use typical we far about, still lot more know, talk CapEx, things Stone us backlog to So I, there's planning away asset, around can planning people get was be about those playing our and planning investment, around,

on And mean, product we again, our will. we – did pricing. not what do never you demand to It going side. pricing in never tell We so, our I are it create I is with and would disciplined we not be has

going on always a construct more the of a – supply is we're reported lot lot know it’s like, to because three, way I to connect, to it's a we connect the pouring in may projects you demand we're if then those whether construct up you on job front-end. whether lag prepared say lag the five whatever of get reporting, four, know, front. going we're are So guys you that, would months, also And information we a look be even of think the these right gave but about you, a but be lot

you a So, that improvements balances of really mid-May you starting know, you, it out, good when know, would we've seen, the lot the tell but sequential you feel on our I think perspective, see lifted. continuing of were from we from kind to I restrictions know,

Adam Thalhimer

Yeah.

saying, customer this Like, Okay. lifted, as here sit you move we the in seeing got how of kind I to alluded as rates were point. low. mean, but would are July, customers on saying, you stuff? to in San you I and That's my restrictions this behavior? characterize key Francisco, hey, are

Ronnie Pruitt

Yeah, I think of both. a it's combination been

them impacted of were restrictions some what work they more of think on type I depending were. by

you was hit So what's ahead, going some hole the the running. full said, mean, jobs happen. thought to dug, a later, then work jobs came if weeks know, that to we then that a of ground of was time. on you had. work them to be we've And And going immediately amount don't started delayed dirt we're back it they they back, was two already certain know, And for done. they customers whatever know, seen you speed long I already know

that, the like that push, model manage well you the and consistent. to consistent and during really but a [R&M] words can we cost residential that's you said blah, the ability efficiencies segment-by-segment to market-by-market, the been think And it's I I there's been blah, our don't that wouldn't control know, say, know as to the continue records consistent. built-in or want so has of, And it's ahead things we've us the And quarter. as, we very know, get of labor, that for I use very that is, controlling and you we blah,

Adam Thalhimer

least? just on to the then confident geographies do the know, and of kind the San feel big easiest X where guys And York, months ground, your you Dallas, where XX thing seeing, they're maybe feel Fran, know, Okay. you be your from kind just to bids the of, rank sense like, most would maybe New seeing, of, you of kind the a the they're you activity the next

Ronnie Pruitt

Texas a standpoint, of would past, lot talked and is it very a big has we've land lot has growth. I say a obviously is diverse. Texas a Yeah, about the Texas affordability that. from confidence piece in of of

I and from that is and what's for Jersey a from going care one lot reach it. thing We that, to We I it oh, it's leaves And be to political can of the standpoint city. to We're Westchester. New know, and the and the there's a in that going can that mean, the transition you Philadelphia, to still it's infrastructure about positive factors We're Jersey. the a city. the suburbs those standpoint to you're everything is suburbs. whatever dollars, not infrastructure most about I stuff when probably New we're markets it's there would you pay needed. are infrastructure how well, footprint, San mean, demand, talk infrastructure if I bah, there's have a starved to going think there's dollars can for, you happen. where been out know, well, of, I done that's so from reach bah, know, And like much perspective, and and And don't our Texas in a we say those influences From not And going demand markets. bah, there. be you so D.C., Francisco demand New pivot think, economic is and of York whatever both

pivot to and all Now, good our of fit the got really in go I'm assets of that, will and all to confident markets, too we suburbs we've and can different. look them so

we and big I them concrete and and aggregate is again, and of have feel locations, where demand pick matters, because drivers. is. of very capita pick different what just matters a population are right very And and I All per and to going the driver demand think are location people confident

Adam Thalhimer

Okay, great.

you, Thank great. Okay, Ronnie.

Ronnie Pruitt

Bye-bye.

Operator

you. Thank

Securities. Our CJS from next Larry with is Solow question

Unidentified Analyst

morning. Good This is Larry. Brendan on for

to the to how much at year-over-year, looking much, speak you to how aggregates benefit? that wanted margins ask about attributed could Coram Just

John Kunz

Coram. think and out results all that. aggregate a were to price good you were a tell gravel being are We mean, good on sales They they sand our break and would I side. don't results. consistent from from other production I very movement Coram’s very I similar all

And good pull-through know, are through put those for at us we it's to you improve. aggregate really looking just Coram, it, volume going really as good so, and margins has that play obviously just really, another more

Unidentified Analyst

that your know, more pipeline, are know, about I I now, projects, price] on some approaching, just steady fairly then mean, working talked beyond, And seen customers how [the looking you that feature Okay. out those you've you you're quickly, looking are large guess at you you with backlog? similar about like customers and sitting still having that's waiting, I of kind stuff backlog, just of potential necessarily projects Are not amounts having but people are conversations? conversations potential you looking guess,

Ronnie Pruitt

would No. now, these think into project markets depending meetings overall, the vary, is instead our still I maybe have in-person, we of We're that, confidence amount the planning having of think and complex so – of relationships you're we are pleasantly relationships same like the They customers Those they're on owners, say that's with of are by tell come And which taking tone the our have I goes still positive. being amount goes levels with that segment back key going you're they're customers those though conversations but developers, planning work come. projects, lots you and which approach even to that. changed what's pretty haven't the and to surprised about I projects same into planning and cautiously in. in, with of optimistic would I just virtual are their are

Unidentified Analyst

Thank Okay, you. great.

Ronnie Pruitt

All right.

Operator

Thank you.

Our with Davidson. Karimi D.A. next question from comes Zane

open. Your is line

Zane Karimi

quarter Hey, healthy well. and on hope everyone guys. Congrats and good is staying morning the

John Kunz

Zane. Thanks,

Zane Karimi

New of have Bay off, what to first think but and City back off in was should you to been assume sites So, XQ]? employees recovery we able of much – to earlier, Area, York guys I in Katherine's question degree job how the [into a

Ronnie Pruitt

far have or restrictions local as government far on in San job restrictions we York as imposed job or restrictions, in as sites Francisco. sites and So, New no as

on I sites. lifted. restrictions a have internal we things safety employees, been the our then safety have So, of being we and customers are done that things our we're with mean, job lot also have doing by own

lot perspective, right restrictions we're have but far that So, being on far any you now doing as safety of, as don't jobs, of either on things there's we a from market. as know, a those as

we're actually just would and the I of jobs from about all natural So, our the say it's customers start progression jobs those that the covering, a back. what is ability now and job to

a from is that perspective nothing governance it's restricted. being So,

Zane Karimi

Thank you think I at rate? CapEx true below you how guys levels? you. it run longer was the CapEx remind and maintenance of much these Then, DD&A can sustain can

John Kunz

you well. range so, XX to far million as that our our XX and is Yeah, depreciation, for to too amortization million CapEx, there depletion you know there isn't below refer that, in as

can We projects year and that. that do we think will to was allocate think for to than So, the then capital as how return but our on evaluate about we remainder so mid-XXs, a go by the the it, forecast and depreciation little next going we in there lower of to year, it growth, high forward. bit – the sustain is we the it, high want obviously

So, that managed. be it's something certainly can

Zane Karimi

Okay, well, much. very guys you thank

Ronnie Pruitt

you. Thank

Operator

Thank Julio is Instructions] Our with Company. from & you. question [Operator Sidoti next Romero

Julio Romero

you Hope are all morning. well. good Hey,

John Kunz

Julio. Thanks,

Julio Romero

markets out seeing price talk standalone you geographic ready question holding Guess can trends on you're up the just quarter, my mix pricing, basis? pricing know adjusted year-over-year you today, your I a X.X% mixed the and appreciate on first being John about you price maybe is still calling are on

John Kunz

today little pressure would. tell pricing, Yeah, normal you, like. economic I very on would look what on what downturn I a we're seeing very pressure would is, little

sides markets and think us ruling help a I about over as of consolidation. XX of on that, have a it Bill Julio, you to hammered assets There's was. and the other changed. pricing lot there's I the the of that all importance a since how years about to focus past, the did these community think investment know, been – started of of been X you strategy lot ever we to You up know, mean, the consolidation

with to the role being away, know, and to downs, using, willing a if pricing a again, at past, strategically PPI, past, standpoint continue you back every profitability I'll pricing reiterate day. we so, in to our be concrete look beat currently, and up we're pricing strong. from systems have over you of analytics I'm those focus. that it strong walk trying to the ready suppliers really but you not make last to And a beating the one just be with a continued holding between then the go And pricing things and focus, material and I'm not you but the up going to gets concrete. find very, decisions I'm can aggregate and material and it's there well, at create business, with but of look to years, you we given pricing. tool five of when margins And you, to we're going have, in correlation demand increases. saying we’ve WMC CRM we don't we not told not right you going mixed things was one give not, and it is it, really do so and up pricing. and trying is cement I'm not I've the margins, is ups And source and any with we're And as stable know, I position has I'm markets very tool, the walk price give going away, up the with do. I've our we're to ready in aggregate away, all mix can a good going the said our our our to told in And I'm to won’t that do I'm the leader the support in someone there

Julio Romero

you in question got you, in those the just volatility know, I appreciate do quarter do gained think that share competitive guess you. Northeast is, the given you have some mean, dovetails Thank up Thank the landscape, healthy you have markets? into in of positions maybe or markets, those I you follow in California my you've any caller. broader changes the any And you? in share some the and seen just I defensible have

Ronnie Pruitt

get up, those and opened Yeah, really depended to we're it the and what back market and I jobs in think that that visibility quarter, don't was how because the restrictions share job what choppiness going of really there hard job the it of was you think work I of affected. and type into was really, because into of on how just because down, the had because

to gave market took So, up think go going you or say, think to that I share. someone it's know, out really early and you're too

we jump. you or stabilizes, evaluate the we as lose ebb you normally. see It's project standpoint to really you just As because your it pricing for take flow too because market from I project continue more reason many or for moving being large parts. whatever large a a It's being measure that know, to big if in something not share that whatever and market it's and something and could reason, markets, we can side consistency the overreact get a large with on a of the aggressive projects not

Julio Romero

taking for the it. Thanks Understood. questions. Appreciate

John Kunz

Thank you.

Operator

gentlemen, his Thank final to our remarks. Q&A today. this session Pruitt call and like you. concludes to Ronnie turn for ladies And for I the would

Ronnie Pruitt

at U.S. joining call. second us you of all for From our [Cameron]. thank quarter you. Thank Concrete,

third will stay well. safe times We excellent to and until drive to be few and financial sharing these forward our quarter results navigate We margins challenging months, then, shareholder a value. to look in deliver continue operating

Operator

gentlemen conference. for in and today's ladies you, Thank participating

now may You disconnect.

U.S. Concrete (USCR) 4 Aug 202020 Q2 Earnings call transcript