U.S. Concrete, Inc.
Q4 2014 Earnings Call Transcript

Published: 6 Mar 2015

[Operator:]

Good day, ladies and gentlemen, and welcome to the U.S. Concrete Incorporated Fourth Quarter and Full-Year 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Matt Brown, Senior Vice President and Chief Financial Officer. You may begin.

[Matt Brown:]

Thank you, Nicole. Good morning, and welcome to U.S. Concrete's fourth quarter and full-year 2014 earnings conference call. Joining me on the call today is Bill Sandbrook, our President and Chief Executive Officer. Before I turn the call over to Bill, I would like to cover a few administrative items. U.S. Concrete would like to take advantage of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Certain statements in this conference call may be considered forward-looking statements within the meaning of that act. Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially. For a list of these factors, please refer to the legal disclaimers contained in our filings with the Securities and Exchange Commission. Please note that you can find a reconciliation to non-GAAP financial measures that we will discuss on this call in the Form 8-K filed earlier today and in the Investor Relations section of our website. If you would like to be on an email distribution list to receive future news releases, please sign up in the Investor Relations section of our website under Email Alerts. If you would like to listen to a replay of today's call, it will be available in the Investor Relations section of our website under Events & Presentations. Now, I'd like to turn the call over to Bill Sandbrook, our President and CEO, to discuss the highlights for the fourth quarter and full-year of 2014.

[Bill Sandbrook:]

Thanks, Matt. As we announced this morning, the fourth quarter was an exclamation point on the end of an extremely successful 2014, which culminated in 95% growth in fourth quarter adjusted EBITDA and a record setting full-year EBITDA margin of 10.7%. All of our regional markets continue to strengthen as we captured full-year growth in revenue and profit in all regions and in both segments of our business. The focused execution of our operating plan continues to take advantage of the operating leverage in our core business. In addition, we are very excited about the progress we made in the acquisition markets, particularly momentum gained in the fourth quarter of 2014 leading into the beginning of 2015. Our ready-mix concrete acquisitions will further strengthen our core market positions Dallas, Texas, the bay area of California and New York City. Our new aggregate distribution terminals in New York City will enhance our vertical integration and improve our operating efficiencies in the surrounding markets. The addition of the two largest volumetric concrete businesses in Texas is a unique opportunity to expand into enhanced product offerings with high margins within our core ready-mix concrete segment. These recent transactions illustrate the strength and diversity of our acquisition strategy and together will be immediately accretive to our bottom line. Despite recent uncertainty in the oil and gas industry and its potential impact on the Texas economy, we continue to see no negative impact in our backlog or bidding opportunities. Texas led the nation in job growth during 2014 with all 11 major industries of the Texas economy boasting net employment growth. The oil and gas industry accounts for less than 3% of the overall Texas economy and 1% of the employment in Texas. The favorable business climate, positive demographic trends, economic diversity and the substantial backlog of major construction projects bolstered by the recent approval of Proposition 1 shows the commitment to infrastructure and a platform for growth in Texas. The Dallas/Fort Worth regional market or DFW Metroplex is even less energy-dependent than the state as a whole with only 1% of its economy relying on natural resources. The DFW Metroplex bodes one of the most broadly diverse economies in the nation, led by a world-class transportation infrastructure making it an international gateway. The Metroplex ranks among the top three in a nation for business expansions, relocations and employment growth with eight Fortune 500 companies headquartered in the area. It is also a home to the nation's third busiest airport, the largest domestic airline in the country and the world's fully industrial airport. Its central location, low cost of living and pro-business mindset make it an ideal climate for continued growth in the future. In San Francisco, construction job growth in the bay area grew 5.7% in 2014. The city has issued record permits for new projects over the past 12 months and expect double-digit growth in 2015. Additionally, construction spending in the Oakland, Freemont and Hayward metro area is expected to increase by over 40% this year with the surge in new apartment buildings and condominiums. New York City construction is equally vibrant with a 31% increase in construction starts in 2014 compared to 2013. Housing starts rose for the fourth consecutive year with an increase of 73% over 2013. This trend is projected to continue as the market demand has shifted toward a need for additional multi-family luxury apartments. Non-residential construction starts increased 26% over 2013 with the resumption of full scale construction on multiple large high-rise office buildings including three world trade center in Hudson Yards, 2015 is shaping up to be a great year in this market. Our recent expansions in Texas, California and New York give us an exciting opportunity to capitalize on the accelerated growth in these markets in the upcoming years. We are very pleased with our fourth quarter and full-year results and the progress made in support of our strategic plan. Now, I would like to turn the call back over to Matt to discuss our fourth quarter and full-year results in more details.

[Matt Brown:]

Thanks Bill. First, I'd like to summarize a few highlights of our full-year, and then I will discus our fourth quarter results in a little more detail. For the full-year, total revenues from continuing operations were up $105.6 million or 17.6% over the prior year. We saw improvement in both of our operating segments. Ready-mix concrete revenue increased by 16.0% over prior year and Aggregate products revenue increased by 37.7% over prior year. Revenue growth was driven by both volume and pricing improvement. Ready-mix concrete volume and pricing increased by 9.0% and 6.6% respectively year-over-year. Aggregate's volume and pricing increased by 29.3% and 6.3% respectively year-over-year. The combination of volume and pricing improvement drove increased operating profit in all aspects of our business. Ready-mix concrete gross profit increased $25.9 million or 34.5% on a 16.0% improvement in revenue. This represents a 190 basis point expansion in our ready-mix concrete gross profit margin for the year. Our Aggregate's gross profit increased $3.8 million or 42.2% on a 37.7% improvement in revenue. This represents a 70 basis point expansion in our Aggregate's gross profit margin for the year. We continue to validate our commitment and ability to effectively pass through increased cost in cement and aggregates in the form of increased ready-mix pricing. Adjusted EBITDA for the year was $75.2 million, a 55.7% improvement over prior year. Adjusted EBITDA margin was 10.7% for the year, compared to 7.9% in the prior year. This represents a new record of high margin for a full-year for U.S. Concrete and continues to show the operating leverage we have in our business. Now, I'd like to discuss our fourth quarter results in a little more detail. Total revenues from continuing operations of $179.5 million was up $31.4 million or 21.2% year-over-year for the quarter. Acquisitions completed during the year accounted for $13.8 million incremental revenue during the fourth quarter of 2014. Ready-mix revenue increased by $23.6 million or 17.4% year-over-year due to combination of higher volumes and higher average sales prices per cubit yard. In addition, acquisitions completed during the year accounted for $8.9 million in incremental ready-mixed concrete revenue during the fourth quarter of 2014. Aggregate product revenue increased by $4.1 million or 40.4% for the same period. This marks the 16th consecutive quarter where we reported an increase in consolidated revenue on a year-over-year comparative basis. Ready-mix volume for the quarter increased by 9.7% compared to the fourth quarter of 2013. We are pleased to see that ready-mix volumes have now increased year-over-year in the last 14 consecutive quarters. On the price side, we realized an increase in our average ready-mix sales price of 7.2% from $107.36 per yard in the fourth quarter of 2013 to $115.05 per yard in the fourth quarter of 2014. Our ready-mixed concrete raw material spread increased $5.70 per yard in the fourth quarter of 2014 compared to 2013 to $55.76 per yard. This represents a 190 basis point expansion in raw material spread margin year-over-year to 48.4%. Our SG&A expense was $18.4 million in the fourth quarter of 2014, compared to $14.5 million in the prior year quarter. Our fourth quarter 2014 expenses included $1.6 million of acquisition related professional fees. The remaining increase is primarily due to higher non-cash stock and incentive compensation expenses. Excluding non-cash stock compensation and acquisition related costs, SG&A expenses as a percentage of revenue, decreased to 8.8% in the fourth quarter of 2014, compared to 9.1% in the prior year. For the full year, excluding non-cash stock compensation and acquisition related expenses, our SG&A expenses as a percentage of total revenue decreased to 7.9% in 2014 compared to 8.9% in 2013. We continue to focus on aggressively managing our SG&A cost, but we anticipate we will continue to incur transactional expenses in this area as we deploy capital in support of our acquisition strategy. Consolidated adjusted EBITDA increased by 94.6% to $17.4 million in the fourth quarter of 2014, compared to $9.0 million in the fourth quarter of 2013. Acquisitions completed during the year accounted for $1.6 million in incremental adjusted EBITDA during the fourth quarter or 2014. Adjusted EBITDA as a percentage of revenue was 9.7% for the fourth quarter of 2014, compared to 6.0% for the prior year quarter. During the fourth quarter of 2014 our free cash flow was $17.9 million, compared to negative $8.9 million in the prior year quarter. The increase in free cash flow year-over-year for the quarter was related to improved financial performance and continued focus on management of trade working capital. For the full-year we generated $50.9 million of cash from operations in 2014, an improvement of $26.8 million or 111% over 2013. We spent $32.6 million on capital expenditures during 2014, up approximately $12.6 million compared to the prior year. The increase in capital expenditures was due to higher spending on mixture trucks and Aggregate plant upgrade in New Jersey and plant equipment and improvements, all to support the growing demand in our markets. The book value of our long-term debt including term maturities was $220.4 million on December 31, 2014. This included $200 million of senior secured notes due 2018, $18.9 million of equipment financing for new mixer trucks and mobile equipments and $1.5 million of other notes payable. As of December 31, 2014, we had zero drawn on our credit facility, with $11.3 million of undrawn letters of credit outstanding. This left us with $119.8 million of availability as of December 31, 2014, compared to $88.3 million available as of December 31, 2013. Our availability is net of a $13.5 million availability reserve for outstanding letters of credit and sales tax and other reserves. It is also limited by the eligible amount of our accounts receivable, inventory and rolling stock, which was $123.3 million as of December 31, 2014. We had $30.2 million of cash and cash equivalents on our balance sheet for a total liquidity of $140 million at the end of 2014. Now, let me turn the call back over to Bill.

[Bill Sandbrook:]

Thanks, Matt. To wrap things up, we are very pleased with another solid year of growth and look forward to building on that momentum throughout 2015. We've created defensible positions in all of our core markets, and we have begun an aggressive campaign to strategically deploy capital that will further enhance these positions and expand into new high growth markets. The disciplined execution of our strategic plan remains a focus of the entire team as we continue to aggressively execute on our vision of making U.S. Concrete the preeminent value-added supplier of ready-mixed concrete in the markets we serve, while simultaneously delivering superior returns for our shareholders. Thank you for your interest in U.S. Concrete. We look forward to reporting on continued successes in future quarters. We would now like to turn the call back over to the operator for the question-and-answer session.

[Operator:]

Thank you. [Operator Instructions] Our first question comes from the line of Todd Vencil of Sterne, Agee. Your line is now open.

[Todd Vencil:]

Thanks. Good morning, guys.

[Matt Brown:]

Hi Todd.

[Todd Vencil:]

Bill, you talked in the press release about the fact that momentum gained from your fourth quarter transactions kicked off a great start at the New Year, I think it's how you put it. So, since you opened the door on that and we're a couple months in, I figured I would go ahead and ask you if you can give us a feel for how things have progressed here in the first quarter.

[Bill Sandbrook:]

Yeah. I don't want to get too specific on that Todd, obviously, but I would characterize almost exactly as I said in the press release that we ended up the year very strongly as you can see in our quarterly results. The underlying demand in all of our markets remained intact through this portion of the first quarter with obviously seasonal or weather effects affecting various portions of the country as you can see on the weather map every day. But the underlying trends that I've described remain intact, and I'm very confident that we have those trends pegged pretty well.

[Todd Vencil:]

Good. Thanks for that. And then, with regard to the acquisition you guys just made in the east bay in Northern California, can you just sort of give us a little color and an update on the market structure there? May be where this deal has taken you in that particular market or submarket, however you want to think about that? And then where you think you can go?

[Bill Sandbrook:]

Sure. This continues our strategy of consolidating around areas regional strength so that we can leverage our existing management teams. We're pretty consolidated on the west bay area of that market, and there was further consolidation to be accomplished in the Oakland area and north and south Hayward, et cetera. So it's exactly a continuation of our overarching strategy to leverage our management teams in areas of the country that exhibit higher than average current growth characteristics.

[Todd Vencil:]

If I remember right, and please correct me if I'm wrong, you're down to two competitors in the west bay at this point is that right?

[Bill Sandbrook:]

That's not accurate.

[Todd Vencil:]

Okay. Sorry about that. How many -- how fragmented is the east bay looking at this point?

[Bill Sandbrook:]

There's competition in east bay and west bay more than you described there. There's obviously both union and non-union competitors in the markets. And as we've been very clear with our strategy, we try to compete for the high-end work in these urban areas, which tend to limit the number of players that can accomplish it because of their customer relationships or their ability to produce the quality concrete needed for the high-end work. But there's competition in all parts of the central California markets.

[Todd Vencil:]

Got it. And then final one from me. On the -- looking at the aggregates business, just kind of drilling down a little bit, margins came in lower than we had in the model, not that there's anything magic about that. And incrementals looking like they've kind of -- incremental margins on sort of revenue growth have kind of come in the last couple of quarters from the level they had been. Is there anything going on with the acquisitions that is sort of reducing those incrementals and the overall margins either on a temporary basis or on a structural basis?

[Bill Sandbrook:]

No. In our results or in the press release there we do discuss that we had a major upgrade of a facility in New Jersey. It's our Glenn Gardner Quarry. And while we were accomplishing that upgrade, the existing antiquated plants sufficiencies were severely degraded. And so that's probably what you're seeing in the numbers.

[Todd Vencil:]

Got it. So, is that effect behind us now?

[Bill Sandbrook:]

Yes.

[Todd Vencil:]

Okay. Thanks so much.

[Bill Sandbrook:]

You're welcome.

[Operator:]

Thank you. Our next question comes from the line of Trey Grooms of Stephens Inc. Your line is now open.

[Trey Grooms:]

Hi. Good morning, guys.

[Matt Brown:]

Good morning, Trey.

[Bill Sandbrook:]

Morning, Trey.

[Trey Grooms:]

I guess the first one would be -- my first question would be on input cost. With the announcements that we've heard in cement and aggregates, can you talk about what you're seeing in your key markets as far as price increases there? And how we should be thinking about how that impacts you guys this year?

[Bill Sandbrook:]

Sure. You know, as has been the case over the last 18 to 24 months, obviously, cement and aggregate pricing momentum has increased commensurate it with the increased demand for those building -- for those building inputs. As it's traditional through all of the cycles and it's same in this case, the amounts, price increases are kind of starting point for negotiations. And the more concentrated your purchasing power is in a local market, the more leverage you have in somewhat attenuating those price increases, i.e. we're power buyers in all of our markets, so we invariably never end up having to pay the announced increase. Although we do think that smaller players do because they just don't have the leverage that we do. But there is obviously inflationary dynamics of play. As you can see, a quarter after quarter after quarter after quarter we have been successful in passing those on and increasing our material margin sequentially and quarter-over-quarter for a long period of time.

[Trey Grooms:]

Yeah. I've seen that. And you guys have done a great job with that. And so, would -- I guess, so should we expect that material margin spread to continue to expand as these raw materials continue to move up through this year?

[Bill Sandbrook:]

Well, it's always a negotiation between us and our material suppliers and us and our customers. We've shown the ability to successfully navigate both sides of that negotiation equation, so I have no indication at this point that we won't be successful in the future, although that's no guarantee.

[Trey Grooms:]

Fair enough. Thanks Bill. And then on diesel cost, diesel is obviously is come in some. How should we think about the potential impact from lower diesel prices on you guy's business?

[Matt Brown:]

Trey, it's Matt. With respect to that diesel cost represent about 5% of our total cost of good sold on a consolidated basis. And if you consider that diesel is down about 20% from the peak, just consider if we went from 2014 to 2015 hypothetically if diesel cost were 20% lower that would result in an approximate $3 million to $5 million positive impact on cost of goods sold for us, which will go straight to EBITDA. So, that's kind of the dimension and that's what we're thinking at this point.

[Trey Grooms:]

Great. That's very helpful. And also, Matt, how should we be thinking with the acquisitions that you guys have completed so far. How should we be thinking about SG&A and D&A as we go through 2015?

[Matt Brown:]

Well, with respect to SG&A, I would say that -- and you saw that SG&A was up a little bit in Q4, and that's really related to the prosecution of the acquisition pipeline. During Q4 we had $1.6 million of professional fees related to M&A activity. And that ended up resulting in adjusted SG&A after taking that out and taking out stock comp of $1 million of SG&A of 8.8% of total revenue. So, going forward, I would say that before adjusting for those items in SG&A, I would target 9% to 9.5% of revenue for SG&A, after removing those items 8% to 8.5% of revenue. And then going forward, over the next couple of years our aspirational target would be 7.5% on an adjusted basis.

[Trey Grooms:]

Okay. Great. That's helpful as well. And then last one for me, you guys touched on M&A, obviously that's a big part of the story here. What would your appetite be for looking into -- you mentioned new markets obviously, and I don't know how much detail you can go into there, but anything you could give us on roughly which markets you might be interested in. And then also, what is your appetite for potentially doing a larger deal, or should we expect kind of continuation of the same level, kind of same size deals we've been seeing you guys execute on. Thank you.

[Bill Sandbrook:]

You're welcome, Trey. Yeah, I'll take that one. As far as new markets, we are actively prospecting in areas of the country that we feel can replicate the successful model that we are employing in our existing regions. We have been public about that we'd rather that more southerly than northerly just to remove seasonality from our cash flows. But we are actively looking in multiple markets around the country to see if we can find an appropriate one with the right characteristics. As far as the size deals that we anticipate; we are not limiting ourselves on the low-end because very small deals in the $1 million range, if it's a critical plant or operation that can enhance our existing footprint, we will undertake that minor bolt-on. And we have no problem now executing up into the $30 million, $40 million, $50 million range and higher. And if an appropriate large deal comes along in the $100 million range, we rate we are not discounting that either. It's all depending on how good that deal is and how it fits in with our strategic plans.

[Trey Grooms:]

All right. Thanks a lot, and great quarter, and good luck. Thank you.

[Bill Sandbrook:]

Okay. Thanks, Trey.

[Matt Brown:]

Thanks, Trey.

[Operator:]

Thank you. Our next question comes from the line of Craig Bibb of CJS Securities. Your line is now open.

[Craig Bibb:]

Hi. Congratulations on an outstanding quarter. From your comments in the press release and on the call, it sounds like your three key geographic markets could see something approaching double-digit construction growth in 2015. So if I add 5% to 7% price on top of that you could be looking at a plus 15% top line in '15, is that a fair way to look at it?

[Matt Brown:]

Craig, I think you may be a little bit aggressive there, particularly on the volume. Some of our regions may grow in double-digit volume percentage year-over-year, but I would say the weighted average on a consolidated basis would be more in the high-single-digit area percentage-wise, which would get you to kind of low-double-digit for revenue growth year-over-year.

[Craig Bibb:]

And then price was a little bit better in the fourth quarter, can we roll that across the quarters?

[Bill Sandbrook:]

It's a -- that dynamic, as I've described in the past, there's old jobs falling off of our book of work which bring down the average selling price. And we price job specific on a rolling basis based on the complexity of the job what we forecast to be, the increase in our raw material inputs and our variable cost inputs. And sequentially, each project is priced higher and higher and higher than the previous one. I think if you would look at an average over the last couple of years of how our price increases have come in, that I'd see nothing taking us off that same trajectory.

[Craig Bibb:]

And then away from organic growth, can you ballpark that kind of total volume of M&A that would be reasonable for '15?

[Bill Sandbrook:]

Well, in terms of dollar value of deals, we still have a large amount of acquisitions, large number and lager sizes of deals in our pipeline at this point. So, we don't want to put an exact dimension on it, but it's bigger than the ones we've done in Q4 and so far Q1 of this year.

[Craig Bibb:]

So, would you expect activity to pick up next year?

[Bill Sandbrook:]

We would expect it to continue similarly to what you saw in Q4 and so far in Q1.

[Craig Bibb:]

Can you make any generalizations about the sellers at this point of cycle? You're mainly talking of mom and pops for the most part, I believe.

[Bill Sandbrook:]

That would be true in general. Although, we still expect some of the strategics to be divesting non-core assets as you've seen over last the 12 months in various parts of the country.

[Craig Bibb:]

Great. Well, outstanding quarter. Actually let me ask the one Texas question before I let you go. Are you seeing weakness in West Texas?

[Bill Sandbrook:]

Not at this point. We don't have a lot of visibility into Q4 yet if oil prices remain low. But we're working through a large backlog of projects currently and have not seen any effect in our bidding or activity to this point in West Texas.

[Matt Brown:]

And just to put that in perspective, West Texas represents between 15% and 20% of consolidated revenue. And there're really five plants in West Texas in the Midland in San Angelo areas that are really exposed to oil and gas, although we're not actually doing down the well activity there. And that represents about 4% of consolidated revenue and volume and that is five plants out of 142 total of the company.

[Craig Bibb:]

And right now it sounds like you have decent backlog that if it were to start to slow down that's more like a second half kind of concern, tiny percentage of your volume.

[Matt Brown:]

Correct.

[Craig Bibb:]

Great. Again, thanks for making us all look smart. Great quarter.

[Matt Brown:]

Thanks Craig.

[Bill Sandbrook:]

Craig, thank you.

[Operator:]

Thank you. Our next question comes from line of Philip Volpicelli of Deutsche Bank. Your line is now open.

[Philip Volpicelli:]

Good morning. Just following on, could you repeat those numbers for West Texas as a percent of total revenue? I think you said it's 15% to 20% and then there was a comment about 4%.

[Matt Brown:]

Right. The 4% -- you're correct, 15% to 20% for West Texas. And then I really drilled down into which plants within West Texas are in the areas that are most exposed to oil and gas. And those would be the Midland, Odessa and San Angelo areas. And there are five plants that we have in those particular areas. And those plants represent 4% of consolidated revenue and volume and that's out of 142 plants total at the company.

[Philip Volpicelli:]

Great. Thank you very much. My question is with regard to the cap structure. Clearly it sounds like acquisitions are going to either continue or pickup as you move forward. How do you think about financing that? Would you use a combination of debt and equity? And if you're using debt, how do you think about that with your bonds coming call at the end of the year?

[Bill Sandbrook:]

Right. Well, at this point, we're doing an acquisition since the beginning of the year, so you saw that we had cash of $30 million at the end of last year. That's obviously down some since then. We still have the revolver which is undrawn at this point, and the availability on that as of the end of the year was $110 million. We wouldn't draw all of that obviously, we leave a cushion there. So, we have the revolver really as our first source of funding for acquisitions. Beyond that we have opportunities in the capital markets. We would look first to the debt capital markets, so as not to dilute existing shareholders. And at some point in the future, may be an equity offering will be palatable, but our first source of funding will be debt at this point. And at this point, if you look at our leverage, we're down to 2.9 times on a gross basis and 2.5 times on a net basis, which is pretty conservative. So we have a little bit of room to add some debt there to fund acquisitions in the near-term which will bring an EBITDA.

[Philip Volpicelli:]

Okay. Great. Thank you very much.

[Matt Brown:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Todd Vencil of Sterne, Agee. Your line is now open.

[Todd Vencil:]

Hi guys, thanks. I just had a couple of follow ups on a couple of questions that were asked before. You're talking about the fact that backlog is still strong in West Texas, how far out are you on deliveries here at this point? I mean, if I call up and ask you for a pour today, like how -- when could you deliver that?

[Bill Sandbrook:]

Seeing that its winter, the overall temple of construction is obviously declined everywhere. If we were talking about this in March or June, or let's say May or June in DFW, it could have been upto three weeks.

[Todd Vencil:]

Got it. Perfect. And then, you had a question about acquisitions that how much you might do in acquisitions this year. I was just wondering can you size up for us what the impact on this year's results will be from acquisitions you've already done. So things we haven't anniversaried yet?

[Bill Sandbrook:]

Sure. We had some…

[Todd Vencil:]

Just layered on top of organic. Sorry.

[Matt Brown:]

Sure. We had some like-for-like comparisons in the press release, which should give you a little bit of help there, as well as a few pieces of information within the prepared remarks for the call. But in addition to that what I would tell you is that of all the ready-mix acquisitions we did during 2014 and 2015, those added a run rate of 800,000 cubic yards to the company in terms of volume, no capacity, but volume. So that's something you can consider now. You can't just add that to 2014 volume because some of those acquisitions were done during 2014, most of them during Q4, and one of the acquisitions was done during Q1. So you kind of have to figure all that out. But between all those acquisitions on ready-mix side that's about 800,000 cubic yards of incremental capacity or rather volume run rate for the first year.

[Todd Vencil:]

Perfect. That's very helpful. Thank you.

[Operator:]

Thank you. [Operator Instructions] I'm showing no further questions at this time. I'd like to hand the call back over to Bill Sandbrook for any closing remarks.

[Bill Sandbrook:]

Thanks Nicole. Thank you everyone for participating in the call this morning, and for your support of U.S. Concrete. We look forward to discussing our first quarter 2015 results with you in May. Have a great day.

[Operator:]

Ladies and gentlemen, thank you for participating in today's conference. That does conclude our program. You may all disconnect. Have a great day, everyone.