READY MIX, INC. (RMI) (NYSE Amex:RMX) today announced
financial results for the second quarter of 2009.
Second Quarter Results
For the three months ended June 30, 2009, revenue decreased
60.4% to $6.8 million, compared to revenue of $17.1 million for the
second quarter of 2008. Cubic yards of concrete sold decreased
56.1% for the second quarter of 2009 compared to the same period of
2008, while average unit sales price decreased 13.5%.
Gross loss for the second quarter of 2009 was $1.9 million. This
compares to gross profit of $0.3 million for the second quarter of
2008.
Non-cash depreciation and amortization expense was $1.1 million
for the second quarter of 2009 and $1.2 million for the second
quarter of 2008.
The net loss for the second quarter of 2009 was $1.8 million, or
$0.47 per basic and diluted share. This compares to a net loss for
the second quarter of 2008 of $0.5 million, or $0.12 per basic and
diluted share.
"While the pace of declines in residential construction in
metropolitan Las Vegas, Nevada and Phoenix, Arizona has moderated
somewhat, residential construction nevertheless was down sharply in
the second quarter compared to prior year. Continued weakness in
the non-residential market, which typically lags the residential
market, exacerbated the negative impact on our business. Our
strategy is to continue providing the first-class service and
support our customers expect from RMI, even as we closely manage
our costs and liquidity in preparation for improved business
conditions in the future," said Chief Executive Officer Bradley
Larson.
As announced on June 17, 2009, the Company engaged the services
of Lincoln International LLC to evaluate and advise the Board of
Directors regarding strategic alternatives to enhance shareholder
value, including the potential sale of the Company. The
implementation of any strategic alternative would be subject to,
among other things, the results of the Board's evaluation of
strategic alternatives, obtaining Board and stockholder approvals
of any proposed transaction, and customary conditions to the
closing of any proposed transaction. Accordingly, there is no
assurance that the review of strategic alternatives will result in
the Company pursuing any particular transaction, or, if it pursues
any such transaction, that it will be completed. No further public
comment is expected regarding the review until the Board of
Directors has approved a specific transaction or otherwise deems
disclosure of significant developments appropriate.
First Half Results
For the six months ended June 30, 2009, revenue decreased 52.9%
to $15.5 million, compared to $32.9 million for the first six
months of 2008. Cubic yards of concrete sold decreased 48.6% for
the first half of 2009 versus the same period last year, while
average unit sales price decreased 12.2%.
The net loss for the first six months of 2009 was $3.3 million,
or $0.87 per basic and diluted share. This compares to a net loss
for the first six months of 2008 of $1.1 million, or $0.29 per
basic and diluted share.
Balance Sheet Highlights
At June 30, 2009, Ready Mix, Inc. reported working capital of
approximately $6.8 million, including cash and cash equivalents of
$3.5 million, a current ratio of approximately 2.2, and total
stockholders' equity of $23.2 million, or $6.10 per outstanding
share. At December 31, 2008, Ready Mix, Inc. reported working
capital of approximately $9.6 million, including cash and cash
equivalents of $4.2 million, a current ratio of approximately 2.7,
and total stockholders' equity of $26.4 million, or $6.94 per
outstanding share.
Bank Covenants
As of June 30, 2009, RMI was not in compliance with the fixed
charge coverage ratio with Wells Fargo Equipment Finance, Inc.
("WFE"). RMI and WFE have amended the agreements to: (1) include a
waiver of the fixed charge coverage ratio covenant requirement for
the quarters ending June 30, 2009 and September 30, 2009; (2) have
WFE accept payments of interest only for four months, which will
defer the Company's payment of approximately $695,000 in principal
during such period; (3) require the Company to provide
approximately an additional $750,000 as collateral to secure the
deferred principal; (4) require the Company to pay WFE a $8,500
consent fee; and (5) require the Company to pay WFE 35% of proceeds
in excess of related loans and costs if the Company were to sell
its headquarters building and the real estate on which it is
located.
RMI also has a covenant requirement with National Bank of
Arizona ("NBA"). The NBA loan is secured by RMI's headquarters
building in Phoenix, Arizona. The covenant requirement is a minimum
adjusted earnings before interest, taxes, depreciation and
amortization expense debt coverage ratio evaluated at year end. By
letter received August 10, 2009, NBA alleged that the covenant
requirement is 1.25 to 1.0 for the year ended December 31, 2008 and
that RMI is out of compliance with a ratio of .80 to 1.0. RMI has
timely made all payments, is currently in discussions with NBA and
expects to obtain a waiver of the covenant requirement and amend
the loan agreement. Although these discussions are ongoing and RMI
and NBA have agreed in principle to basic terms that would
accomplish the foregoing, there can be no assurance that RMI will
be able to obtain an amendment or waiver from NBA. If RMI is not
able to do so, the $1.3 million note payable that is currently
outstanding to NBA could become immediately due and payable and NBA
could proceed against collateral granted to it to secure that debt
if RMI were not able to repay it. If NBA accelerates the payment
requirements, RMI may not have sufficient liquidity to pay off the
related debt and there would be a material adverse effect on RMI's
financial condition and results of operations.
Conference Call
Ready Mix, Inc. has scheduled a conference call today at 11:00
a.m. EDT. To participate in the call, dial (212) 231-2904 and ask
for the Ready Mix conference call, reservation #21432028. A
simultaneous webcast of the conference call may be accessed online
at the Investor Information link of www.readymixinc.com. A replay
will be available after 1:00 p.m. EDT at this same Internet
address. For a telephone replay, dial (800) 633-8284, reservation
#21432028 after 1:00 p.m. EDT.
About Ready Mix, Inc.
Ready Mix, Inc. (RMI) has provided ready-mix concrete products
to the construction industry since 1997. RMI currently operates
four ready-mix concrete plants in the metropolitan Phoenix, Arizona
area, three plants in the metropolitan Las Vegas, Nevada area, and
one plant in Moapa, Nevada. RMI also operates two sand and gravel
crushing and screening facilities near Las Vegas, Nevada, which
provide raw materials for its Las Vegas and Moapa concrete
plants.
Forward-Looking Statements
The statements in this press release that are forward looking
are based on current expectations and actual results or future
events may differ materially. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause the actual results of the Company or future events
to differ materially from those expressed in or underlying such
forward-looking statements, including without limitation: our
continuing operating losses; our alleged defaults of certain
financial covenants in our agreement with National Bank of Arizona;
whether we will be able to obtain a waiver of this covenant and
amend our loan agreement with National Bank of Arizona, and the
possible acceleration of the loan and seizure of our headquarters
building if we are not able to do so; results of the Board's
evaluation of strategic alternatives; the ability to obtain Board
and stockholder approvals of any proposed transaction; customary
conditions to the closing of any proposed transaction; national and
local economic, business, real estate and other market conditions;
the competitive environment in which the Company operates; the
execution of the Company's business plan; financing risks;
acquisition and location development risks; potential environmental
and other liabilities; and other factors affecting the construction
industry generally. For further discussion of the factors that
could affect outcomes, please refer to the "Risk Factors" section
of the Company's annual report on Form 10-K for the year ended
December 31, 2008, and other subsequent filings by the Company with
the Securities and Exchange Commission.
READY MIX, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
Six months ended
June 30,
June 30,
2009
2008
2009
2008
Revenue:
Revenue
$
6,758,265
$
16,905,255
$
15,457,315
$
32,595,666
Revenue - related parties
1,331
168,931
6,383
265,042
Total revenue
6,759,596
17,074,186
15,463,698
32,860,708
Cost of revenue
8,676,153
16,790,678
18,884,040
32,579,885
Gross profit (loss)
(1,916,557
)
283,508
(3,420,342
)
280,823
General and administrative
expenses
826,830
1,059,069
1,769,207
2,090,919
Loss from operations
(2,743,387
)
(775,561
)
(5,189,549
)
(1,810,096
)
Other income (expense):
Interest income
3,292
33,360
9,248
104,698
Interest expense
(27,277
)
(27,369
)
(51,846
)
(54,889
)
Other income
103,650
40,037
194,695
13,442
79,665
46,028
152,097
63,251
Loss before income taxes
(2,663,722
)
(729,533
)
(5,037,452
)
(1,746,845
)
Income tax benefit
858,216
262,632
1,712,734
628,864
Net loss
$
(1,805,506
)
$
(466,901
)
$
(3,324,718
)
$
(1,117,981
)
Net loss per common share
Basic
$
(0.47
)
$
(0.12
)
$
(0.87
)
$
(0.29
)
Diluted
$
(0.47
)
$
(0.12
)
$
(0.87
)
$
(0.29
)
Weighted average common shares
outstanding
Basic
3,809,500
3,809,500
3,809,500
3,809,500
Diluted
3,809,500
3,809,500
3,809,500
3,809,500
READY MIX, INC.
BALANCE SHEETS
June 30,
December 31,
2009
2008
Assets:
(Unaudited)
Current assets:
Cash and cash equivalents
$
3,492,490
$
4,204,280
Accounts receivable, net
3,946,159
6,751,769
Inventory
1,642,936
1,411,761
Prepaid expenses
1,431,715
1,189,598
Due from affiliate
70,142
--
Income tax receivable
971,361
1,026,133
Deferred tax asset
713,965
696,892
Total current assets
12,268,768
15,280,433
Property and equipment, net
21,614,538
23,988,688
Refundable deposits
108,079
108,079
Total assets
$
33,991,385
$
39,377,200
Liabilities and stockholders'
equity:
Current liabilities:
Accounts payable
$
2,150,203
$
2,329,620
Accrued liabilities
1,096,279
966,058
Notes payable
2,217,221
2,204,706
Due to affiliate
--
177,825
Total current liabilities
5,463,703
5,678,209
Notes payable, less current
portion
4,810,860
6,041,731
Deferred tax liability
491,805
1,216,100
Total liabilities
10,766,368
12,936,040
Commitments and contingencies
Stockholders' equity:
Preferred stock - $.001 par value;
5,000,000 shares authorized, none issued and outstanding
--
--
Common stock - $.001 par value;
15,000,000 shares authorized, 3,809,500 issued and outstanding
3,810
3,810
Additional paid-in capital
18,471,132
18,362,557
Retained earnings
4,750,075
8,074,793
Total stockholders' equity
23,225,017
26,441,160
Total liabilities and
stockholders' equity
$
33,991,385
$
39,377,200
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