US Concrete Inc. (NASDAQ:RMIX) Plummeted at Chapter 11 Filing Announcement
30 Apr 2010

US Concrete Inc. ( NASDAQ: RMIX) has obviously failed to reassure investors with its restructuring moves. However, April 29 saw trading at levels as low as $0.5 which were mainly triggered by the announcement about the Company filing for Chapter 11 bankruptcy protection and the uncertainties related to the pending bankruptcy court approval for an $80 million debtor-in-possession credit facility led by JPMorgan. At these levels the markets do not see any positive signals and further rallies can be expected around these levels.

The fundamentals of the company have shown some improvements in 2009 compared to 2008 mainly with respect to higher other income and lower interest expense despite slightly falling gross margins over the last three years, still negative bottom line and precipitously falling cash from operations. US Concrete Inc. also reported a healthy shift in business segment revenue with street, highway and other public works representing already 26% of total revenue as compared to 19% in 2008. The markets reacted positively to these news with an upward correction from$0.5 to $0.7 in the beginning of March followed by sharp falls to $0.3 in mid March.  The uncertainties about the future of the Company has turned US Concrete Inc. into a highly speculative stock.

The overall fundamental position of the company is difficult to be assessed before all the restructuring initiatives are incorporated into the financial statements. The interest expense which has been approximately $25 million over the last three years  is expected to decrease further. However, general expectations are that filing for Chapter 11 is intended to assist the company in achieving more favorable restructuring conditions. The company has until September 7 to regain compliance with the NASDAQ listing requirements and need to close at $1 or higher for a minimum of 10 consecutive business days, this period roughly coinciding with the 90 day restructuring time frame.

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