BBCP - Earnings call transcript Q4 2018 | Concrete Pumping Holdings, Inc.

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Operator

Good morning everyone and thank you for participating in today's conference call to discuss Concrete Pumping Holdings’ financial results for the fourth quarter and fiscal year ended October 31, 2018.

Joining us today are Concrete Pumping Holdings’ CEO, Bruce Young, CFO Iain Humphries and the Company’s External Director of Investor Relations Cody Slach.

Before we go further, I would like to turn the call over to Mr. Slach to read the Company’s Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Cody Slach

Doug. Thanks certain to give in of you we be like this course our everyone will to call a making remind would the that of operations, I statements. forward-looking better understanding actual subject are such and could materially numerous These results statements differ to to uncertainties risks that cause statement. from

adjusted private a of Pumping Holdings formerly of Holdings each subsidiary Inc, as uncertainties, private forward-looking these assessing to we Concrete Also, formerly result disclaims we Industrea Holdings refer Corp, website Holding changed for which any measures name Pumping X, On the its is year provides the a or deck same the Company. and and core owned and that industry we purposes Concrete non-GAAP obligation company full Inc business statements, GAAP. our Acquisition Concrete consummated investors the to for figures SEC. the to use are Corp publicly as which posted of we Holdings believe Inc combination. future For information otherwise. and XXXX such for please known adjusted the on the constant Company concerning refer which Company of financial In Pumping available performance. our Concrete from of formerly connection acquisitions adjust or internally non-GAAP the became known will of acquisition. revenue acquisition formerly analysts historical The any useful Acquisition of business revise information update operating the currency the whether the pro contributions note risks measures that wholly closing for December and as the reconciliation information, the or these new Pumping filings We investor with discuss and it financial of of forma also company because on measures intention combination Please Pumping EBITDA pro for forma events a with announced call today's acquisitions reported to nonrecurring previously and Concrete definition Inc presentation items, as

Finally, to the known the of Pumping business operations private company dates the prior unless and periods for to as relate the results otherwise combination described Concrete Inc formerly indicated. Holdings today formerly

includes For for well see I combination. Holdings’, to as remind would call available Eastern additional statements amendment in for investor information, discussing please well as everyone Concrete replay XK the we're we starting the that financial financial forma presentation Pumping forma which adjusted today updated the available today's the pro that like business will be website. pro the on webcast filed that historical for website this our provided P.M. that also information on and also replay available at this reflects Company press on financial call as release be via and incorporating, acquisitions financial The Company's results X:XX information, updated as today. the link is will

Bruce. Young. the like Concrete Bruce to call turn CEO over the Pumping Now of I to Holdings, would

Bruce Young

we we company, as value. Thank review XX, and I'd October Pumping good year to shareholder discussing and Since growth long-term you. marketplace will earnings our you joining be results is our XXXX. our It's first call to everyone. this public believe Holdings Concrete the the a fiscal ended quarter Today which will Cody morning and to also fourth introduce pleasure a for drive like be strategy,

only the established Holdings concrete Denver, UK. management concrete Colorado the the provider Concrete I the to headquartered I Company, in waste of and a that thought pumping introduction and and in start leading XXXX a national are new with is U.S. would our of business approximately country. you the in brief services XX% Pumping across of locations For those have U.S. brand Operating XX% XX founded in services under We believe shares and in XX and concrete approximately provide under Camfaud UK. states and services we in market the respectively under brand. We U.S. the from brands a in Brundage-Bone footprint from each XX of UK the pumping locations diversified the in

environmental We also provide growth services Eco-Pan high high-margin waste through management our brand.

Our solutions typically our approximately highly concrete contractors. of and operators that owned construction cost company us of facilitates position to equipment large fleet substantial to placement units customers XXX trained or XXX deliver specialized labor over savings

also enhanced safety cranes solutions and as solutions or placement concrete to and improved alternative wheelbarrows buckets. quality has Our worksite times, such using shortened construction placement relative

with and is many not is to other placed. no we unique significant Our and U.S. and don't national the construction have we differentiates bonding no business both we have have in therefore do we’ve take surety concrete that that who UK. diversity Since that building and equipment do Also expertise in the our only completed material company. XX areas in exposure us more our services ownership not and own. we local and than contrast risk scale model platform have serve which have acquisitions lack This us take a from across we of competitors of and aided project the raw the typically requirements, breadth founding

commercial infrastructure concrete and U.S. of revenues across end balanced residential commercial, comprising pumping markets our market infrastructure the in approximately XX% reasonably have with We and exposure

our low collectively have XXXX revenue. and customers less project of XX% we representing concentration with our customer fiscal XX than year Finally, top

trends by fiscal to like fiscal and seeing and the we're Now to on note year quarter XXXX results. gears our XXXX underlying the am a strong ended We business. fourth that switch I'd in I encouraged

$XX.X adjusted And quarter, forma million. to X% acquisitions million. for EBITDA acquisitions pro for $XX.X to forma up was increased X% pro revenue adjusted fourth the For

highlight recent the provide more and across in year. will to performance adjusted organic year few main segments key acquisitions contributions our time Eco-Pan, detail the to the up of of EBITDA share from the million. X% financial For Several increased acquisitions of our pro Namely Iain call, our forma so our a on growth the to was revenue use market initiatives later forma to recent in pro key also wins. for X% for to $XX.X gains $XXX.X adjusted contributors were growth solid and results acquisitions. like the all I'd three million

the had year. First driver key in performance and a solid full a the growth Company of the both Eco-Pan fourth quarter for

full will has to to For confident grow. value up the positioned revenue environmental growth for share cost XX% volume gains. market was And continued demand fiscal that wastewater by manage business regulatory we this believe We benefit $XX.X issues from XXXX, reported compliance market continue million as solution a to trend. proposition to effective, concrete remain compelling drove service, the Eco-Pans caused

and April markets marketplace. Companies pumping we presence and concrete U.S. This the with our U.S. in in greater acquisition provides acquired XXXX, Second U.S. of Brundage-Bone’s the even national in Richard Colorado solidified in segment O’Brien coverage Arizona the

of we the commercial fiscal the in to conditions, Lastly, major XXXX business are the allowing rain service than fiscal acquisitions acquired markets, the our particularly we customer concrete marketplace, Pumping in-line for XXXX. quarter particularly the pushed growth into for and Based Oklahoma we usual positive Texas adverse anticipated fourth are in fourth heavier forma of and currently expectations business which trends pro revenue in seeing fiscal quarter on for adjusted was out weather UK. provide its of with solid originally base comprehensive Concrete performing that the segment offsetting footprint with pumping Reilly This I'd to July projects. with our the across of provides in our partially for infrastructure and offering XXXX a UK national Company diverse note region like acquisition a more truly XXXX.

over call financial Before our pass Iain through overview. providing walk more growth an update I the a on to will to Iain? strategy, detailed

Iain Humphries

Thanks Bruce good and morning everyone.

reported adjusted forma forma we acquisitions acquisitions financial adjusted for into like I'd investor details, discussed pro EBITDA for remind presentation Before can to refer found non-GAAP of revenue everyone results both getting measures. on are A GAAP results in our posted the pro the between be that reconciliation and our which website. and non-GAAP to our would

conditions to mentioned, year $XX.X acquisitions quarter our on strong to increased forma construction increased to driven On west turning Richard and finished O’Brien the in by revenue west Brundage-Bone well fiscal in quarter All fourth acquisition of three as by O’Brien in pro and U.S. from for and favorable results, XXXX The regions as of the fourth central first as basis, XXXX momentum million. acquisition quarter the region. over companies, revenue reported Bruce winter a share X% XX% and strong adjusted as note we growth pumping concrete market saw fourth business reported a segments our Brundage-Bone XXXX reported continued XX% $XX.X to as have for full-year. contributions were year-ago Now X% quarter, the fiscal for million results. Richard the and primarily and or well full the in Camfaud. in of gains as the revenue increase segment positive $XX.X million brand compared of year Results year company Eco-Pan the largely half driven the

were was As off XXXX. Bruce kicked Texas mentioned increased UK in have in and market west weather, in or in footprint The fourth mainly region, premiere Eco-Pan projects the and Oklahoma fourth Washington, quarter. services adverse customer concrete these adoption Camfaud Many response by of was year. the The offset reported segment the reporting strong as region. Eco-Pan for fiscal as Concrete market across revenue XXXX. market Pumping broader Utah the the XXXX from of in XXXX, the growth the organic and XX% full Services grew fourth services. California solid by operating XX% the acquisition in The driven revenue by well largest to in UK quarter from in contribution in which is increased Results year demand increased July by quarter management share our and in Management partially Concrete waste the mature markets, XX% now this had impacted approximately Waste Eco-Pans markets. the in or Reilly full fiscal XX% a driven performances by

over our increased administrative due last conditions part in quarter expense year the to year was XXXX. weather the profit gross XX.X% million to from quarter. consolidated points basis fourth fourth General $XX.X million increased to compared XXX margin ago $XX.X Gross back the XX% Brundage-Bone. impacted results, fiscal $XX.X adverse quarter to year, down in that million Turning XX%, and in

which was preferred fiscal fourth of to transaction year $X.XX with earnings Corp. in Brundage-Bone. account administrative to combination largely conditions allocated income million a by undistributed share, to the nonrecurring of by of slightly XX.X% increased income percent to impacted compared driven Net year, resulting Net dividends from the and the year and diluted to improved common into shares was takes was quarter XX.X% shares $X.X expense quarter. on general also fourth costs in weather The ago preferred in fiscal $X.X that in revenue, adverse higher due XXXX part revenue, from improvement per last business offset As the XXXX. Industrea million $X.XX quarter Acquisition compared

business Now the redeemed aforementioned closing the do preferred preferred that that the expect fully shares combination not we and dividends at will were continue. of

General across fiscal Finally, to increased year by XX% to expense our million X% to to lower our XXXX, and year to revenue quarter Transitioning points year rates year year. adjusted administrative $XX.X XX% in in $XXX.X million in $XX.X million to fiscal $XX.X fleet. basis in margin for to higher utilization million million fiscal XXXX, year increased for million. from EBITDA forma $XXX.X XX.X% $XX.X increased acquisitions was to increased compared X% for revenue million compared pro $XX.X in with million XXX XX.X% reported fiscal to equipment depreciation adjusted to XXXX. acquisitions Gross expense $XXX.X the profit due increased year. compared up Gross fourth last XXXX XX% year pro largely full XXXX results fiscal the and last approximately forma and

slightly that of in year incurred income to due takes fiscal percent Net XX asset compared and points The XXXX. reform million an depreciation was year. year in account revenue, and to benefit fiscal XXXX $XX.X higher gross not the on to XX.X% administrative revenue preferred on $X.X driven Net rules at a expense diluted improved million repeat in XX% dividends and into higher did loss of common extinguishment compared increase and of to of preferred undistributed XXXX. income a the fiscal the tax was shares to were fiscal per basis As to in a debt year at shares share, of margin which tax by to pro an closing a for year slightly last decreased earnings loss general X% income compared above compared EBITDA $XX $XX.X Adjusted growth continued combination, in and in year $X.XX business were forma done that redeemed $XX.X fiscal spend to million XXXX. XXXX was the year, which to in million in allocated to acquisitions acquisitions to original drive $X.XX [indiscernible]. outlook, for increased Capital investment This pro due our opportunistically forma fiscal higher million year expenditures was effort for incremental Eco-Pan. largely XXXX. contribution

with Turning to of million fiscal year the $X.X and ended balance million $XXX.X in XXXX sheet, we debt. cash

As Industrea connection to $XX we had of the our business on transaction. date million December ABL with the X, drawn approximately the revolver $XX with closing brought debt total closed new XXXX, we the Corp, in Acquisition combination This date at $XXX million. million

allow us comfort over will minimal our our not us significant we delever we And the is time. performed. company ability as of daily flows debt invoice as generates sheet business do balance replaced. take capital as and cash free to we As the to gives ownership generate the free a reminder, flows levels have with current customers work strong cash working requirements This

projects, Looking ahead, in spending to strategy. we positioned combined in strong in and to back predominantly With market business Bruce there to of UK, you year turn potential the public win the and over in call presence walk terms in infrastructure fleet in solid due relative fiscal trends well positive both growth and I to to our national with is momentum underlying now a larger capabilities growth the through scale sectors. U.S. the Also that, the infrastructure our from commercial our will are peers. XXXX

Bruce Young

Iain. Thanks

our detail morning. of compelling strategy Holdings’ growth Concrete to be important can More these long-term can believe found updated think posted Pumping elements presentation investor it's drive that to value. we the growth website key the around review in strategies shareholder this I we

customers that a and brand under growth penetration high The is is place penetrated margin X% to in Eco-Pan U.S. only the First, market in accretive X% its we as Camfaud’s EPA own white XX the Only has with fiscal well will expect avoidance. – across XX Currently and first services believe be quarter to that the leak-proof high we our Brundage-Bone’s of locations in a business Brundage-Bone operates XX% large of only currently to space cross-selling state penetration compliant Eco-Pan’s regulations. violation drivers with key the three increase Brundage-Bone’s compared solution simple provides the both U.S. pumping Eco-Pan the to ability in is with start the and into the and XXXX. as a units. base. Eco-Pan’s being in opportunity are and Eco-Pan that allows contractor locations expanding grow UK second by we'll customer business There

unlevered We X.X protection, solution jobs. year investment. margin, payback is coupled solution believe new likely XX% This finally, drive Eco-Pan on with alternatives turnkey period core EBITDA with and industry's for ROI pits. spill most an Eco-Pan are them is driver is second and easily approximate The per regulatory increased that adoption. a allowing high quality route include turnkey the advanced with environmental strong compliant pans focus unit than And our economics which washout Eco-Pan’s XX% their messy leak will a to or to far that contractors less is

acquisitions successfully Second, than the believe since only more national is and markets. concrete scale completed our founding, pumping in and business the what created have UK U.S. with we XX we

historically or have of accounting times synergies. multiples just before for average We X.X less paid EBITDA adjusted

today. have includes CPH to the the XX% cost have market us XX which of we these around to the margins that enabled utilization a our and The EBITDA leverage acquired the enhancement achieves at synergies. acquisitions of businesses fragmented Our of use approximate businesses plus scale of around in levels benefits profitability highly to percent time increase increase been

targets pipeline million represents with built potential that several EBITDA. and $XXX incremental acquisition over have discussion an We are of in adjusted active

tailwinds Third, there that share are believe several continued our gains. secular market we will drive

becoming national complex commercial new For are and in dangerous, those more robust instance, well we diversity good with becoming and position the are crowded fleet worksites more our seeing to presence. a current extensive long-term sector due to in and and below positive business still experience, jobs increasingly level trends is are we averages win construction as

contractors players of pulling number and our many and as come on new into us they reach. customers, are whom are they share pumping of providers their to won have extensive as are our markets to capture reducing national of projects market Additionally, large continue depend fleet prefer

also can we spending reasons, we believe in similar For government from benefit and infrastructure increased the U.S. the in UK.

significant expect approximate services an win pumping the speed and market to demand anticipated high for generate that example, is share work project giving As UK our we in $XX meaningful to a amount XX% the of concrete UK. billion rail

believe record a of growth. future We will that have we track our optimization. price Finally, support

We compelling value shareholder our with service give creates on little customers our pumping to of increase cost perishes our versus believe XX we other and accretive rate allow market concrete to have Pumping. X% also X% UK growth a costs creation. significant for per cash the proposition ability make assist and on-site wastage also developed is close, economic only revenue year growing associated acquisitions of we of allow dynamics and potential. higher The pricing represents of insurance value our maximize fragmented, background, an as to to in customers. labor growth cost job XXXX our costing built the for broad fiscal policy concrete about allow have will compound success to about viewing Also markets optimize XX% analytical brand billed portfolio extensive to are fast per play will a hour To are characteristics, that drive X% only our tool projects evidenced margin significantly to relative and to share and approximately job alternatives market have of in flows gross minutes found a To concrete that Concrete in that a ability against utilization to profit U.S. Eco-Pan account, into increase us rate high jobs our on XXXX. ready-mix analytical better at customer that to typical price we costing pumping the tools placement highly which revenue us inefficiently. conditions across I takes in an capital, experience, our project of value underlying our makes brand, and from that better our Through – and job returns the in not brand billed operate accretive four-year annual long-term platform that X% in us serve you

Finally, management have shareholder significant value investment in creation.

combination to As business the Corp, for with back now like Industrea of XX% diluted concludes company approximately Acquisition remarks. prepared the fully That call Doug? the on I'd and a over to basis. questions operator we own turn my a answers.

Iain Humphries

Hey, now. Doug, we're to ready questions take

Operator

you. Thank

Instructions] will Our line from conducting question. We with a comes proceed Alex question B. FBR. Riley now first [Operator Rygiel session. be Please the question-and-answer your of with

Alex Rygiel

Good call. Iain. morning, conference Bruce first Congratulations your and on

Bruce Young

you. Thank

Iain Humphries

Hey good morning.

Alex Rygiel

random questions. of Couple

little or the there first were be being Is talked fourth about quarter Iain, way any from pushed first a all into have quarter. you affectively projects into any the been for bracket quarter? opportunities First, fourth any reason of pushed bit in first those realized that secondly, the from sales this should the some fully quarter you can cancel the And might they quarter?

Iain Humphries

none see mean, is contractor, we a million quarter projects the additional will up. revenue push constraint whether our in seen depending following from its year. become up. ability probably from whether would on we’ll contractors’ will – the largely to through was perspective, into labor first about But the the catch depending revenue, the come contractors’ with catch historically this And largely of XXXX, on canceled. on ability And this in just these see, the typically depend they’re it projects haven't to revenue incremental and the let's I but projects revenue. around So in were incremental $X.X

Alex Rygiel

you can ran growth volume break possibly there, UK And and you but was down Thank the pumping back of mix could the circle year-over-year? you. we then quarter pumping U.S. Helpful. fourth the of and numbers what kind price through to quickly and

Iain Humphries

Yes, And X% I you the this mean, the mean, pumping. our U.S. morning. price on about may and UK across it increase on the in investor in U.S. price and deck X.X% I have UK. both was about the seen

it's volume. the terms growth, close between In and of quite XX/XX to price

Alex Rygiel

on? planned And your a can as you helpful. upon business initiatives Eco-Pan XXXX, in as both then business expand the well for so many how bit little the Very pumping greenfield markets

Bruce Young

Yes. Alex, this Bruce. is

greenfield area, quite So, been we've Brundage-Bone, Charlotte, us. into for going one into currently well with which Carolina North is expanding market

really that of into areas locations. that others have the expanding Eco-Pan, locations locations, process Brundage-Bone our in currently are some are just currently footprint six we're moving new locations five We of mind in. in six With in we're are that the

So service satellite leverage in Brundage-Bone current the running be basically just over that's can operation. market of One we the a the would outside market would teams. and sales be southern California

Alex Rygiel

you up us sort mature can long it contribution get And markets takes of sales to remind to revenue those how level? a

Bruce Young

profitable anywhere six within outside, four largely, to somewhere be from the utilization months. able of the months ranges being one out get But five truck. we to in two usually It's months between first year. full a to, on to It

Alex Rygiel

of awards on P&L? in might you can the might the UK receive through us rail when Very then, come timing of some helpful. speed And when you it high the update your and

Bruce Young

revenue in bidding most with this year. the spotted we Yeah, project some of so phase coming – now first year see of of throughout of or and significant the we'll see the end that revenue we're the towards to process expect this

Alex Rygiel

on views And short outlook, with and of to comment detail XXXX. there with in go or XXXX maybe your your you can into little regards a a there sales EBITDA bit regards to update more Excellent. sort

Iain Humphries

prior we the months. and but is some quarters to have October XXXX don’t fiscal into QX with down break winter through usually published we quarterly. information historic from go the there as coming seems early deck outlook expectation our QX and Yeah, year same end in and the the we for XXXX QX you'll And the ramp-up it this through for the investment of so the was, we

Alex Rygiel

of that So EBITDA, $XX you're $XXX revenue still comfortable million million to with million? kind or in $XXX take give a and range

Iain Humphries

Yes.

Alex Rygiel

I'll in much. you queue. Perfect. get back Thank very

Bruce Young

Thank you.

Iain Humphries

Thanks Alex.

Operator

Instructions] are questions queue. further like to to no call the There Mr. I'd [Operator back hand the in

closing for Young comments.

Bruce Young

like like thank quickly Thanks, We to Concrete when listening entire today's transition during continued organization company. Doug. thank dedication, everyone to you also Holdings for Pumping to I'd become the our exciting for We'd Thank forward we focus call. a you. report to look to the with speaking and their especially public first quarter results.

Operator

does and gentlemen, participation. Ladies Thank you this conclude your today for teleconference.

disconnect lines have your time wonderful this a may You day. at and

Concrete Pumping (BBCP) 29 Jan 192018 Q4 Earnings call transcript