BBCP - Earnings call transcript Q2 2021 | Concrete Pumping Holdings, Inc.

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Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Concrete Pumping Holdings' financial results for the Second Quarter ended April 30, 2021.

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 begin, 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

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

The which of For annual or XX-Q information, today's statements, XX-K, SEC. revise reference Form including free any on Form whether we forward-looking disclaims report will and with flow, net we events these as publicly certain company On quarterly a otherwise. and filings see EBITDA, uncertainties, or update result financial measures, risks concerning and intention adjusted on information new Concrete Holdings or available non-GAAP also other obligation Pumping future debt call, cash any report the to useful believe today on non-GAAP reconciliations website. measures and information We about our I'd the information release investors. comparable will as in these provide presentation provide posted financial like website. the available available provided measures investor remind press the today's for link to company's via call as further also GAAP evening. be or replay company's this everyone this the for replay be release, press in on A webcast the to well later will issued

website. have we company's presentation an posted the Additionally, on updated

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

Bruce Young

month region temperatures in for the and our highlight a when of halt that experienced the of resilience central compared cold construction business and and our front activities the that business, business the weather especially second Cody, of weather prior market favorable conditions everyone. Thank half brought Texas affected also February, to seasonably our you, in same projects record-setting to We to of experienced our the year. to am good afternoon, the profitability our sub-freezing model. flexibility our pleased in I quarter continued very report our

revenue margins However, quarter to free our projects the strong in in our commercial and flow in growth, This growth residential continued cash model, resilient delivered included continued with solid our testament was a infrastructure business market we strength and our and share, line second expectations. work. internal that as recovery consolidated that in returned our performance

to continued million to with We contributed cash year-to-date our that liquidity our strong improving of available total demonstrate financial million. $XX.X profile flow $XXX.X in free

to results, detail outlook X% To Given and today, position total execute our QX a priorities a XXXX. execution remained year about revenue our in our consolidated improved we more ago. bit a financial in strategic to by strong upon provide compared

quarter really second started impacted partially during Our the year of pandemic the COVID-XX, by month as April. set to was last

thrive continued headwinds strength our times other growth virtual pricing return regional and team’s growth, to our when due to pandemic the improvements the residential roll-off across due our operations more to revenue adoption. compared than In pumping revenue in increased organic our to our historic This to almost highly volume difficulty period a some by our due share And slightly cost was recovery In by mostly our was were ability exposure commercial as was and in impacting impacts to review the February structure. let’s continued Eco-Pan down hit growth service in muted a due of variable revenue our end-market headwind scale, sectors. U.S. projects. Texas harder pre-pandemic in to is business, business. growth testament earlier regions In strong sales UK to was and in XX% Our from X% in diversified Eco-Pan, individual for infrastructure a our regions and UK winter slightly a segment, central COVID-XX margin to our revenue and COVID-XX our up U.S. reporting environment. our continued of prolonged the offset segments. revenue and and market expansion storm the

and and the customers economy, a with double-digit However, virtual comfortable gaining reopening more to optimistic of model, sales rate gradual selling soon. more the in we returning about growth with our our are

In additions fact, longer we make during the force our continue strategy. strengthen to Eco-Pan to term in our sales quarter growth

on to residential the and commentary, strong Now have able homes remains to in turning single-family end-market for especially to capitalize market, demand that been some we momentum.

third this our for to company sales XX% construction residential has prior expect compared bright represent the a and call, our in of a been on discussed fiscal spot total year, As our XXXX. to roughly we it fiscal

we caused regional as expect recent diversity. some of has increase expected shifted opportunities material agility a – cost the management some our the impact cement there strong several undergone value availability shortages customers a result. and to construction commodities fleet fleet residential over weakness a supply, tailored which has and From the and maintenance, in of services our capture chain fleet tightness critical scale residential perspective, headwinds our plants have focus this pandemic the to supply we other commodities example the and the in intentionally Staying and on and up have remain to markets new in U.S. short-term picked the not our while introduced management cement have markets, affected is our for lumber commercial While on be issue, for near-term. our some cement in demand is moment, have the business. Several industry another

are to may customers utilizing we do our any mitigate own not this delays project While transport relationships face. possible, or purchase help wherever commodity, our we

be administration’s projects railway also by size, the In and many We We including timing proposed including current have ultimately market UK flow heavy of infrastructure placed UK. funding are success the always the industrial infrastructure the passed, been speed XXXX. infrastructure still a last we project that seeing U.S. unknown. believe The talk has government bill. in steady concrete-intensive U.S. other supported although infrastructure treatment with our around and schools, and the plants high continued an bridges, Much will projects details wastewater bill are will beyond the hospitals. project surrounds

Importantly, growth does we of until current for any construction as believe not include our fiscal XXXX resulting XXXX. not an begin possible bill infrastructure would benefits fiscal

to without are many physical and should we the to beginning states state infrastructure an to bill. passage infrastructure However, on return help spending or of increased be on level able with capitalize the

revenue vertical become mix infrastructure larger the result, should a time. percentage over our of As overall a

to the such multiple require fulfillment centers datacenters as growth that the have XX working and pandemic. a the recovery This Our of as progress a projects reference, along The we to centers continued completed commercial XX projects continued currently are high markets fulfillment building nation’s about concrete center. recover that storey with and requires building. fulfillment much typical in are in XX% of storey from on datacenter concrete includes large amount typical for as

results. operational discuss year. execution were market to and remainder our Iain? we financial to our the us I’ll for now, will I discuss quarter with pleased call pass in financial and second the for our puts of second with the So a off outlook. to provide the and long-term performance strategy quarter Iain return But the it trajectory on growth

Iain Humphries

Bruce, Thanks, afternoon, and good everyone.

ago Consolidated UK compared by by $XX.X organic continues mainly right from emerge Brexit to quarter. quarter UK revenue revenue shutdowns. in results. XXXX the X% the operations, into driven the million was construction million $XX to impacts COVID-related Moving The second growth to same in increased as our increase year market of the and

growth brand organic improved of almost Additionally, the compared under momentum and when concrete waste solid quarter. same Eco-Pan U.S. our showed management to the business ago operating X% year

south performance, Texas, individual quarter. operating to million, The and year our decline workforce Concrete $XX.X and in slight Kansas and our under Brundage-Bone eight review prolonged segment Pumping Turning the the now is of compared dominated the U.S. revenue brand, construction ago to attributed weather segment million in particular, that $XX.X front the in central regions including was Colorado. same to cold February impact Oklahoma, to in volume the our mostly

increased the locked the ago was abruptly $X.X organic the of same brand, - to COVID-XX the largely operations, $XX.X down is prior shutdowns UK that This the operating fact year the largely as impacted year by on million, quarter. pandemic. brand to UK our under to onset the Camfaud in For attributed the million compared revenue growth XX% period

our quarter to ago organic the million $X and is growth X% second million volume the that $X.X we XXXX, are UK and roll-off We This in same increased revenue is adoption. are year in cover rest compared solid Services improvements, optimistic running to in due – rapidly. to Concrete now report pleased at our the about Waste runrate pre-COVID-XX the year continues recover the Revenue of UK over the increase our to of of region XX% service Management in pricing to quarter. growth, the segment as almost

containment the the control in expenses our million, revenue growth expect to compared to As this to were our teams the same and the variable continues in segment reopen in QX double-digit mentioned, $XX.X as ago million over Bruce volumes and cost. of customers year disciplined improvement are in in administrative expansion U.S. results, consolidated meet margin sales General to to with is and and quarter, person. X% Returning to of reflective $XX.X improved our show to the we our gross improved successful in able of increase to increase return less putting to basis margin second The cost at quarter. teams’ due $XX.X gross measures ago to quarter in in place profit of compared than efforts $XX.X The compared year G&A million, onset the XX%. XX.X%, the COVID-XX. same expenses in to XX million the X% revenue points

adjusted will diluted XX.X%, Adjusted to in quarter. which XX share. dollar year $X.XX business, Later $XX.X EBITDA our EBITDA As available basis million shareholders I In liability ago recovery points the In commentary, in same Pumping loss to the million year adjusted our $XX.X fair a same year UK year warrant same compared per higher business, million adjustment. of quarter compares quarter, the million was EBITDA the loss basis EBITDA Adjusted in second the this quarter to revenue or result quarter the terms in consistent $XX percentage. to basis million the increased diluted This in the or X.X% $X.XX to $XX.X value adjustment to million, million, in compared the XX.X% growth. increased of warrant in million margin is $XX.X second quarter. and EBITDA per in in U.S. discuss fair was given $X.X share a $X.X common same points net ago organic the year ago to our to same with ago margin $XX.X to ago in XX% quarter. increased liabilities our a value sharp net compared XX of Concrete

EBITDA adjusted to $X.X year business, $X Management For quarter. our Waste U.S. was the million, prior Construction million in compared

mentioned, reflective this Eco-Pan we these in top-line the made profitability and of segment reaccelerating investments ahead have of Bruce investments. is As strategic our sales in team on

capital structure $XXX.X Now net a turning million, totaled and X.X liquidity, debt-to-EBITDA which to million of ratio approximately XX, on of to our debt our times. net leverage outstanding of XXXX, April equates $XXX.X the we’ve

liquidity like facility. We on $XXX.X opportunities million overall have to accretive an support our and of cash in investment the XX%, as includes of our ABL XXXX, approximately pursue and growth enhances balance sheet to long-term XXXX strategy. as XX, as ability and improvement which This January our sheet XX, greatly well is compared from April M&A, balance capacity availability

high January activities a of cash a million $XX.X our million have year-to-date. generation As income by by this expense business cash interest year, $X.X model, expense our following in – interest and reminder, our and lowered paid we refinance successfully strategic

our maturing debt near-term in maturities with no XXXX. have facility senior asset-based notes lending We and

healthy ownership concrete free the since and flows. work for not to continues we take customers perform do we operating generate have working business our we capital place. invoice Our we minimal daily We cash the requirements of

goals. XX, spec warrants on a warrant In the introduced relatively strategic for adjusted cash an strong and accounting cash of have is our line conversion our flow to for in flow ability in SEC’s EBITDA is from well each which healthy April fiscal of with operationally, presented through our approximately special as cash our with the balance SEC current a and out model, in our a shape common generate that sheet Even purpose quarter generated rate this was which guidance new statement came corporations. perspective example and period. what flow The As more XXXX. macroeconomic free year-to-date $XX.X free equates million we the free to interpretations be acquisition liquidity historical mark-to-market us to expand on approximately the structures cash environment, that are should our flow liabilities delever allows of above average. position This XX%,

valued the in impact debt have any with SEC and such net we or operating statement. is conform there metrics. Also filed our impact on XX-K/A our our in non-cash any this alter order income, debt operating way that to and which business income The prior point covenants we provide in financial audited or business of about stock our in to our way price are actual XX-Q using and continue as public nothing capital of that we key statements X-K is and a Friday leverage, is detail any I registered way any performing. the of and as income think This movements. below our restated mark-to-market operations. operating the retroactively our metrics So GAAP of It possible transparent metrics on about with of change primarily here does facilities business our no our filings economic falls believe the the change trend. be the net of today warrants on as our any is market prices or of quoted impact the our do function does to not non-GAAP or has how not performance this our on structures share

all December our in of As public a reminder, warrants of outstanding expire XXXX.

critically we Turning CapEx on to This our reasons. provide been to update important existing now Pumping for improvements making fleet consistently age. several an is Concrete investments, have

enhanced reduce attract we safety qualified reliability the retention. and improving inherently opportunities and stimulate equipment. time, our We to the wins our Also, enhance with new employees of lower of an our costs often fleet, which and fleet by project repair age capture helps repair improves helps First, customers. employee

improved we business. in business Our is performance cost confidence equipment These our in of and the underscores our periods. have repair fleet factors outlook. strength fleet also in uptime The capacity margin equipment ensure optimized improved our critical are and during consistent of investments our driving improved the combination busiest across that

progresses, we to and investments. XXXX accretive capital remain CapEx strategic continue As with and opportunistic will allocation apply prudent

our and XXXX fiscal and with our continue were in outlook quarter line financial remains internal and results from U.S. QX as markets weather COVID-XX second Our to year U.K. expectations the unchanged, recover our disruptions.

and $XXX million year revenues XXXX range and million flow, range As guidance, we $XX.X million Bruce. the our financially, CapEx less we expect $XXX to our million, interest cash strong, working to to growth remain that, a $XXX between of released $XX.X free net reminder $XXX actively over between previously I our to between to define full which cash now and and With call as on execute Operationally adjusted EBITDA strategy. less we million will turn and to we million. and range adjusted are back EBITDA,

Bruce Young

growth quarter our Thanks, the Iain. organic of and with were In of second the pleased trajectory our business. we XXXX,

UK and M&A. the normalized through organic growth gradually U.S. as strategic and continued a we well both to driving state scale are as look returning in We to forward

with we equipment. Senior joins that team President our business, delighted XX as news In of who growth concrete executive a exciting Regarding service Sales have a enhance are capture and our our hired U.S. and value Schwing sales we enhance America, our to our Tom global we Executive reach we of Tom to organic recently O'Malley strategy, Pumping offering Eco-Pan disruptive strategic continue of new the to is service business, share additional to economic our our after pumping years national customers. Marketing. sales Vice of locations In our we growth our build as to supplier to U.S. to strategy as U.S. communicate team opportunities. and leading have announce Senior

very team in to are to sales valuable development national welcome We pleased will strategy. U.S. our expertise his in be Tom driving and first-class continued industry our the

acquisitions. we Now our have I’ve turning approach for in strategy clear shared earnings we acquisition how to prior that criteria calls, potential a

to priorities financial grow flexibility. continue while a maintaining healthy balance business We sheet to our capital balance allocation responsibly and our disciplined

our enhancement value Our acquisitions, capital priorities and on remain consistent of to focused a value investment shareholders. return organic prudent

high is M&A disciplined drive deals very operational team to do. returning The that continue investments and expansion. that has margin are We prioritize looking a consistently pipeline robust had what acquisition that revenue and improving to at our is approach and efficiencies see enable growth we to capital will a continue you to us

what our We grow important are to continue position areas these ultimately develop very as will market-leading we accretive this clear in creation. value to we want to and is share

be Looking to our UK. and continued projects forward increased investment the working the for infrastructure and demand the in the the In areas in business rest especially projects, these strength In we and continuation of to industrial residential warehouses year. year, U.S. the commercial, for as the of we from continues heavy our also accelerates and for expect construction area like rest an seeing momentum continued datacenters remain of expect are of homes. we momentum, ecommerce people in

aid I’d half We over will commercial the In and the back year momentum the for driving this second to we like this accelerate despite investment on that, challenges Eco-Pan, progresses. call recovery of as now focus the to in turn Paul growth year. pandemic-related our greatly Q&A. to forward to With look the expect business fiscal of

Operator

Robert W. first [Operator Instructions] Baird. from Wittmann question. question Our with comes your Please Andy with proceed

Andy Wittmann

kind was also my the hard in – do is mechanism, Good around then of you or in taking Just guys. Maybe make the you it if some to the could maybe market got just just the Iain, appear into way that Hey hoping next weather terms kind that arms talk us year? our current for that quarter of we but help the see of I the not Can kind of you nominal weather. quarter of all then track quarter. questions. afternoon. year of Thanks get talk you can can employ of quarter work want about mechanism work it and back fiscal what those on two about and that of the just just just the into this extra of revenue out another fiscal those weeks pushed in and out in understand canceled costs or

Iain Humphries

that $X did around where February We resulting the from the was actually back revenue million catch mark Andy. and in quarter the up we impact on Yes, second as seen were right over subsequent how second of the year, play in we’ll in quarter. might recover in behind expect rest that being the slightly And of that terms the we quarters. that you

the X% February something impact we catch have that closed where be So our the that actually severe weather will not that upon good job half with in customers is were locations done quite a expect for about month. of quite from and some recovering the not

Andy Wittmann

Got it.

Okay.

what better going here – guidance to to is original quarter new even feel the hoping on if ability is work other it’s are you sequencing am that drive plants ex we meat you negative these to It a little Do your quarter a not can Is the million I So, think that of you through able sounds fault, bone it’s X%, the kind and issues? to are $X the supplement that weather, you put you or feel revenue is being tightness going everywhere. you closed there you is Bruce, guess, so the I the be of business. like but out? cement this maybe your to getting bit U.S. impact is back markets, more cement guys how bucks understand in that’s the that tightness this this a this of to I work or if and impact getting guys just like not guidance I in makes do pockets Could sense. factor? are you if could worse about was as And the the to talk your particular, put of the on in widespread with like make segment, well, guess so, then, kind to the like just get flat just

Bruce Young

more are week a markets we little the original delayed don’t sort during through it’s be guidance. half in on that to and a reaffirm headwind the that – areas shutting during be on it a but sure that run it assets regional any a that those down be we We haven’t comfortable are of work may that affected. bring the we will of out can certainly, they or making and bit been some day we to we watching can impact the that in certainly it’s Friday as Yes, thing. meet of our it time are of significant yet. aren’t just summer, some That’s But point that cement. at that where We us think

Andy Wittmann

just Got last here. it. my I guess, maybe question

about are you in the of are to this getting think stuff, for going it’s – a work essence to the UK the the is I it state in on we more U.S.? So, what healthy on that business side infrastructure it’s the break Certainly, seeing certainly way Even of year governments and potential are pace is in these belt for XXXX the there strong time. state construction that a kind sounds the – any think local phenomenon. states stimulus curious like of and on projects letting of more are out wondering you things that’s just if just getting your of of after and that? in do going back so and But awards, some kind really or

Bruce Young

is the reason projects some able now this projects at the more put started improvements will to end are into year that. that of level seeing that are state to being it optimistic about next Sure, planned us are on and year. were be towards with is – that new hold help But we there and

Andy Wittmann

Got with I’ll leave that. guys. it. Thanks

Bruce Young

Thanks, Andy.

Operator

you. Thank

proceed your Kusswurm Blair. question William with question. Our next with comes from Please Sam

Sam Kusswurm

you all well. are doing guys. Hope Hey

has all and changed inflation Has difficulty side staying in retain fact wage of employee recent retention months? and workers here, labor there the labor On availability. workers been the a close at second of find more frontline to rates things skilled for more along

Bruce Young

That’s question. great

faces, industry retaining We’ve good have for just pretty industry the our think new little has more we labor. biggest I challenging challenge that us. a the us, employees but in been employees entire bringing is done the not by construction job a of

hoping families will of providing for get hopefully and up better. to packages that and little some their able to more getting been it We as this that for stimulus It’s folks to us. are we’ve open point. are continue back to that will a up the needing bit balance to not worse get But

Sam Kusswurm

Great, great. Maybe switching there pages hoping you just with pipeline was closing on terms May an guys? here. In mentioned an you in your on last targets. for hurdles of earnings acquisition? the several Are having here. what I acquisition get call that are acquisition face so, update If and today, there NDAs you targets your still primary out powerful

Bruce Young

matter don’t fit there just any primarily acquisition hurdles. that’s know right that of getting and I a for Yes. is the It’s right a us.

act several have of able be to time that on future. going hoping some at active in and on some conversations those we’ll are we We the

Sam Kusswurm

comments the Cool. appreciate Well, I there.

Bruce Young

Sam. Alright. Thanks,

Operator

you. Thank

Our next Thielman with Brent question. from your question comes proceed Davidson. Please with D.A.

Brent Thielman

Thanks. Good Iain. Bruce, Hey. afternoon,

you’ve in seen the a quarters? do of of business of kind right that over follow-up growth that So an sales that is of year? pace maybe the little on over that here just might maybe to about you double-digit a next you how on Where do think that? this like just And now a cause headwind your the still Eco-Pan And returning are feel question update growth force that, that with course and you initiatives. couple to margin bit expectation

Bruce Young

Brent, question. asking for Yes. thanks that

using the know, safest can’t placement, concrete pump So, people to is most as how and kind cost a it’s of ready have drive our the place the environmentally with taking effective same contractors most the more at been way used compliant using concrete and system mix the system know it’s plant best time. that some they truck With you efficient from legacy pumping, to concrete. them show they a that to Eco-Pan, and

ability a environment. good the something gaining and of in We’ve virtual share difficult now a job accelerate year. the folks that’s officers past end had they we of business the to do and rate in some getting we meet as back So, to work and are expect at to done double-digit the growth but expect to more not growing have that with that’s to to go that the back the by we

Brent Thielman

Okay. And quarter pumping I guess, guys UK? regions? Just great. what between That’s utilization whether on in where business, comment average the can are U.S. or between it’s the and – differences that circle an curious you’d two you levels where the And the for then, quarter? the the out

Bruce Young

in I the as by opposed between We and jobs we availability. on the mean, get by differences hours the the largely the regions in is in Yes. the at at utilization utilization look look U.S. job U.S. multiple UK the we the typically the as to UK.

usually high we see around that’s the of are our today. we In the in XXs utilization where business terms of And rates second percentages, they are horrible. and consistently quarter actually quite and

quarter. comparable be last utilization would quite The in see to that’s second expect for our them year. with So, we we business are that where trends the

Brent Thielman

as guess, I wondering year? as price this little the Okay. mean, a inflation am been go to just And then, all anticipation that stage January. additional fiscal needed is but you in sort at in base challenging, of effect get into adjustments more labor I adjustments of I had any that price always

Iain Humphries

concerned our but are things we’ll as labor consistent continue been to where most are, expectations We that fairly those with petroleum the are about necessary. to able naturally we two with that Right products, The we’ve that keep now, and of thing. adjust fuel watch and sort falling closely. inflation

Brent Thielman

Okay. Thank you guys.

Iain Humphries

Thanks, Brent.

Operator

[Operator Instructions] Thank you.

proceed your Our with with UBS. comes question. Steven next Fisher question Please from

Steven Fisher

guys. afternoon, Good Thanks.

the I given of of Just, a half the seasonality, weather. issues second the your guidance in of implies half. and weather of percentage EBITDA the and severe terms your higher business in affecting be kind just XX% half first of have second would around patterns might thought COVID that

So guidance I the or am implied half if at conservatism second wondering, moment. some maybe has in there

Iain Humphries

Hi, Yes. Steve.

our XX% And X before, our I typically perspective seasonality see is we business. mean, what a for - and business said from so, we’ve across

reaffirmed have we around would that And at. guidance. be why that’s and are that expect performing range to – we So right we

you And second around so, that as for the is expectation XX% half the mark mentioned.

So that pace delivering of we the second are and year. the right on half in we’re

Steven Fisher

of or maybe Okay. of are inflation, say, down, affect age the I over guess, fleet how suppliers terms imagine some would And your this next, year your trying to take maybe inflationary next the in and you pressure. CapEx the anticipate will facing year into rest

preparing So, or that you along then, for And how passed how are how to they that you being back you? next are is year? for for preparing that

Iain Humphries

Yes.

for we from looking requirements are shift, I look mean, in those the that early measures would are what pricing discussions CapEx like. we of As obviously,

seeing pricing are type this equipment I and any purchaser at in the as I change in are – you of largest we UK. this mean, know, of largely the and mean, U.S. the We moment meaningful

some we we and So, scaled have the could OEMs. with work purchasing

any And so meaningful in at change seen we haven’t moment. pricing this

Steven Fisher

very Okay. much. you Thank

Iain Humphries

Steve. Thanks,

Operator

There I no turn questions you. are at now Session. like our Mr. time. would this to further over conclude Question-and-Answer This Thank does call to back the

closing any for comments. Young

Bruce Young

and We’d XXXX for today’s we results third call forward we September. report our to speaking to in Thank listening Thank like you. you, with look thank when Paul. everyone you fiscal to quarter

Operator

conclude conference. does this Ladies and gentlemen, today's

your this You Thank may time. lines for wonderful evening. a disconnect your you participation. at Have

Concrete Pumping (BBCP) 15 Jun 212021 Q2 Earnings call transcript