Earnings call transcript Q4 2022

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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 Fourth Quarter and Fiscal Year ended October 31, 2022.

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

Camilla. 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 For annual XX-Q, XX-K, SEC. Form on of Form disclaims report and or with events, these publicly company quarterly revise and filings otherwise. statements, future whether see uncertainties, or update risks concerning as intention on information Concrete a Holdings' available other obligation result Pumping any or information, forward-looking report new the to any

cash for non-GAAP financial certain further today financial also website. comparable or the On today's these adjusted will the investors. information call, presentation in believe about on reconciliations and issued measures, non-GAAP GAAP we press provide company's useful which measures We flow, our we posted and provide information EBITDA, the to reference free measures including net investor debt, release

like press on this the be provided later today's for replay available well as webcast call evening. website. also link that to A remind available this via replay in will the will I'd company's as release, everyone be

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

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

Bruce Young

strategic execution the afternoon, strength, revenue of and contributions continued closed share note our out and underscoring recent We driven plan. XXXX our of from accretive growth. resiliency by good growth on double-digit was acquisitions efficiency, segments our everyone. market fifth posting our all business and across operational high Cody a gains consecutive year This and record Thank quarter you, fiscal of exceptional consolidated

and able As to performance EBITDA for we the a were annual income for company. revenue, adjusted drive net records result, financial

$XX.X $XXX.X net XX% million. EBITDA Looking increased $XX.X of to revenue million, to and million, full million income to at fiscal year $XXX.X increased XXXX, XX% adjusted the increased

recalibrating acquisitions performance By reporting were fourth business share our strong and commercial driven warehouses buildings, centers in increased commercial demand has segment, grow recovery distribution pent-up our and our the within note, in centers, successful recent market data capturing rates end market been pandemic driven an We office by commercial and in U.S. continue Pumping Of sector. XX% in our recovery. the and revenue in to opportunistically the strategic growing by quarter, our there hospitality market. encouraging

expanded as investments. our Turning infrastructure, national project us drive more allowed to to to it capture public continued results funds for footprint

at At business our levels infrastructure our the into to to in time, to the projects remain local as investments built Job We has and the uncertain forward not state this and in been continue such and win forecast. benefits bills the with work look investment Act. XXXX renewed infrastructure U.S. to

to residential quarter, issues demand that fourth relatively that remains to unwind. be affordability due continues majority but resides ongoing created continue note segment higher Mountain states U.S. the to resilient imbalance housing Texas in recognize versus areas rates work the and During have other stable the of the the in that our interest important our structural in supply We in market, is to which residential

work. the change moderate was in by the expected, volume high other fourth quarter residential absorbed As in margin

in fourth our traded which quarter, in our example, with For market growth carries residential the residential work. work volumes margins commercial typically to higher

distribution in our the by Pumping fiscal year and infrastructure. residential, our noted increased quarter. compared strength high headwinds, the the in-spite by value to revenue XX% diverse of of diversity end end advantages X% broad deck, our market In of our commercial, year, was geography change mix service. exchange work the XXXX of and of and The at illustrates and revenue segment, our prior investor As today's in XX% U.S. XX% platform UK the foreign of national

continue quarter. our organic deliver Our sales team up revenue last management with approach expected growth we high to concrete exceptional we announced our concrete addition in have value continues Eco-Pan, In speed the incentive, work projects beyond to XXXX. road improved XX% driven continues of in This previously is rail HSX, the to and service an the to which to with enhanced and business rail energy waste secure by be offering. railway project the

in to we Eco-Pan's pumping given double-digit business. organic our penetration its forward, to expect maintain size to growth market Going its revenue relative

new exciting are the operational were fiscal several businesses into with During greenfield It to the seamless. our tuck-in welcome teammates family last we of integrations and year an opportunistic year, and opportunities. was acquisitions expansion and

costs to inflation, the in-line particularly with our dollars execute and high headwind, Despite last gross to case continued cost persistent team of margin as side business, in has in recalibration the comparisons. are quarter, this to our margin these expectations. year-over-year the actions offset Shifting inflationary cost fuel our have our our impact largely continued containment rates diesel was of

As continue return the performed. for to of on the a we result, work investment volume expected same realize equipment

and to in I pass growth the close results I call will return priorities. outlook. out our our Iain? are Iain to in to later detail. execute an off provide will to updated market the But growth discuss year for XXXX, our and a to strategic look we As strategy discuss forward more we now, strong longer-term position

Iain Humphries

million, to afternoon, Pumping year, year quarter. Strong increased growth, In operating Revenue volume to quarter. $XX.X in in acquisitions, and U.S. XX.X good Brundage-Bone same XX% million contributed million fiscal the the prior ago increased the from $XXX.X and to to in growth XX revenue Bruce, all fourth ongoing pricing brand, revenue quarter recent of organic year Thanks, compared compared million improvement mostly under XXXX the double-digit the XX% to everyone. segment, increase. our our

and due ongoing on Coastal, million construction basis the increased revenue organic the Excluding of price higher to volumes Hi-Tech, XX% acquisitions an Pioneer, to XX.X and improvements.

UK the approximately by while COVID-XX the overcoming XX% strong recalibration effects to foreign the from pricing. Camfaud due the exchange revenue our British translation our with from largely of brand, for operations, in increased excluding under in operating This effects, weakening of was fourth region's the the For recovery U.K. progress operations our quarter. along volume the pound,

our On to an $XX.X dollar ago quarter. $XX.X in in to U.S. expansion, Eco-Pan revenue fourth share increased to million quarter. the in sales Waste driven Management year strong million X% reported regional Revenue compared was brand increase growth, operating Concrete conversion million, the teams. U.S. our as XX% volume XX.X same by improved organic organic the basis, Services market robust under and by This

quarter. same Gross price pressures, quarter related Returning fourth slight in to margin XX.X% year compared is XX.X%, inflationary directly The related decrease escalation. to the ago was diesel consolidated particularly to to results. in our the fuel

or million basis For the points point the full fiscal of change inflation the full-year for impact year, the XXX of was approximately diesel basis fuel gross cost XXX $XX margin.

ago were we was compared from same amortization labor and to expense, lower in but stock-based than by year intangibles offset fourth expenses million, quarter, QX million General administrative In experienced more lower this acquisitions. compensation recent $XX.X $XX.X the increases quarter. the in cost cost of and headcount

the to both improvement million percentage to same to organic quarter. substantial of income the to $X.XX XX.X% share, was Net fourth diluted contributions quarter ago in XX.X%, year a per result from XXX% revenue to shareholders in improved per $X.X growth. same compared available fourth acquired of costs quarter. in in year share common diluted or the a revenue, As the $X increased quarter compared $X.XX and or The million ago G&A

was EBITDA fourth Consolidated adjusted margin year the in in XX.X quarter. same to Adjusted quarter. to the EBITDA ago XX% compared XX.X% million, the to quarter XX.X%, same increased in million ago XX.X year compared

was margin inflation, in cost erosion particularly of slight diesel driven the previously, fuel. by the discussed cost in As persistent

ago X.X to the ago business, UK X.X currency quarter, from adjusted inflation same was compared quarter, our by driven to our concrete XX% million, the improved revenue In to EBITDA XX.X in a in weakness In million revenue by U.S. the offset costs. year was pumping EBITDA strong growth. translation million significant XX.X our million growth from business, compared throughput diesel year strong adjusted fuel and same

in compared to disciplined adjusted same due X.X million organic to ago our year waste For improved efficiency. XX% EBITDA to business, and U.S. revenue and X.X management concrete the growth operational million, strong quarter,

Turning to liquidity.

XX, had in XXXX, ABL million. which as and We outstanding availability million includes approximately liquidity XX, or October balance cash on debt from million XXXX, facility. XXX total of debt had we October XXX of of net sheet XXX of As the

As a facility with lending reminder, debt maturities term in maturing have no we and notes near our asset-based XXXX. senior

strategy. [ph] interest. We Additionally, free fiscal million equipment remain cash we million approximately approximately million XXXX in [divesting] XX in after replacement growth in of and to of XX cash investment delivered our our value provides in strong opportunities dispersing optionality support $XX strong year further flow position, liquidity the investment like pursue in to age fleet reduction overall added our accretive long-term M&A, or which

up million we XXXX the our third reminder, a we fourth On $XX program XXXX, authorized October initiated under June share approximately buyback common repurchased XXXX, a repurchase As approximately of of XX, remaining approximately company million that quarter, outstanding XXX,XXX to the shares stock. In during for shares the $X.X of authorization. million. of quarter a the had $X.X

$XX our commitment and underscores strategic sheet, In today's liquidity to earnings plan. and demonstrates confidence this of the and million our balance both Directors the to approved increase our an to in value have buyback Board program additional release share announcement, program shareholders our delivering growth

guidance. full-year now Moving XXXX into the

million, $XXX to fiscal range EBITDA which $XX to and define EBITDA less expect million. We adjusted revenue as between range adjusted range net to interest million $XXX we $XXX free paid replacement million CapEx, million, cash and million and for $XXX $XX between year cash flow, and between less

with strategy. and of utilization, market us reliability, we a We safety to have customers. downtime, minimizing equipment which foundation fleet we wins new share and have are Operationally and ensure consistently solid additional repair project capture enhancing confidence executing help growth our financially, our equipment in and and operating optimizing

turn back that, now Bruce. the will With over I to call

Bruce Young

the pleased continuation we a and normalized In Ian. operating report to to fourth growth of more XXXX, revenue return a quarter are environment. double-digit of Thanks,

steps XXXX, strategic organic Looking as well to growth, we as through deliberate broadly in more scale continued drive took M&A.

value to growth grew Eco-Pan expanded Our continued offering Eco-Pan our double-digit we the force. deliver service business sales our and exceptional of as

Additionally, effort. to for thank inflation and all persistent our were recalibrate entire to remarkable pressures. rates want team able of throughout the year, in I cost truly businesses to the this combat we our rapid

high have continue business will As we conviction our have the to that positioned, are is experiencing we about due that to we infrastructure and think strong factors commercial demand today. where

us recent our rising for rates in XXXX. business indicators fluctuate and of give to residential weakening, it's only and ground in spending commercial interest consumer infrastructure business practical to assume some our Given may volumes

utilization. of region manage one our volumes in However, and end fleet management. ensure agility this we we optimize change to example our equipment our construction business model resilience the market, of fleet an and is adjust Where

in with XXXX pleased business, momentum the XXXX, very are growth and our promising organic fourth we we XXXX. XX% with optimistic the execution our long-term exceptional full-year about summary, delighted a markets strategy, the and are our challenging quarter in our new year-over-year fundamentals. M&A against consolidated backdrop revenue Eco-Pan contribution growth into XX% of into With In with almost and and results expansion business year-over-year heading are

expect for in superior construction activity through this commercial fully organic provide come. continue shareholder and and state to is We infrastructure and focused investing to remain value. that and market believe level the path scale the M&A investment to growing drive the the growth We expanded years execution recovery strategy of best to on growth federal to support

the the turn operator With that, to I like call for to Q&A. back Camilla. would over now

Operator

Thank you, Mr.

William our Please with Young. And [Operator Mulrooney your will with come Blair. Instructions] question from Tim question. proceed first

Unidentified Analyst

[Sam both well. doing Iain, filling you this in Tim. hope Bruce, [ph] Hey, Kessel] are is for

Iain Humphries

Sam. Hi

Bruce Young

are How you? Sam. Hi,

Unidentified Analyst

give wondering pumping? could a And I'm come chunk but for It in the it good. Doing of be both spoken if maybe semiconductor a from sense facility Act, helpful being us CHIPS U.S. of to guess lot I will of like the a of concrete this? Act. pretty large fabs also likely be built talk type before the the you and needs We've would if would about you Infrastructure having about seems that

Bruce Young

Yes.

and us bidding we're the that that there currently of and So are several several we large intensive. concrete the facilities working facilities very on CHIPS And those are helped has Act are types future. into

thing for And so, a very good yes, us. that's

Unidentified Analyst

expect the And might Infrastructure from have as the your maybe in of is at far you maybe the that guidance, benefit maybe don't or these though that but XXXX as we can the year know something of – Act I timing like is earliest? from just the benefit CHIPS Act guys that some maybe fiscal is projects, the also

Iain Humphries

XXXX. would say XXXX Yes, I late into

Unidentified Analyst

guys might but outlook, to just you impact you market customer what regard then end outlook, XXXX? in more consequently And maybe change to just compared that related can And fiscal us share one be? Thanks. mix, then from Okay. maybe to the maybe are margin your hoping of what the fiscal

Iain Humphries

Yes.

work mentioned equipment So, commercial and and commercial residential in from our specialty pumping we're we markets, as market. the And more volumes. into with is our higher of script, using booms larger the the shifting more

So, are through market. per higher we remainder is our the continue and And of revenue margins hour to greater that that in this our expect year.

Unidentified Analyst

it then. We'll there Great. guys. leave Thanks

Iain Humphries

Thank you.

Operator

And our Andy with proceed question W. will next come question. with Robert Please Wittmann from your Baird.

Andy Wittmann

taking great. right, question. my All for evening, Good gentlemen. Thanks

investment? of think First, all to cash including doing the cash the that how I purchases flow footnote you you're CapEx have us the acknowledge helpful growth disclosure better on you're a asset is. to I free what out of flow, I get guess, for about that that's sense wanted and here the here splitting talks your underlying

also it generates So, questions.

to I there. wanted start So,

here the in same also $XX footnote of on out million M&A fourth quarter. of quarter. but the that's CapEx to line Just its the assuming it that It Is it fourth not separately take as million XX million, I'm here, $XX right? mentions $XX called Iain, looks I'm own like supposed well. the in line was

Iain Humphries

replacement, in Yes. XX business the the Andy. about about the [ph] there's to combination have million] including we in – right, [XX the growth at million the in a investment full-year, the if I you like it, way and [ph] M&A. in mean, [XX That's think looking million take way XXX million] obviously organic full-year, And think we for there,

So that's color maybe well. more helpful as

Andy Wittmann

of helpful. just there. that's some It say total Yes, what footnotes your is

CapEx. you guidance free you guess cash So, for I replacement here of mentioned definition the the that to net cash flow, it then here around being flow as relates free gave kind

net the number CapEx given So, I you here? guidance gets guess flow the that the can give replacement cash is you you've that that free to guidance

Iain Humphries

Yes.

and mid-point the guess free if flow, million I CapEx cash it you call million cash So, in XX it's XX really year's – you take for interest. replacement next subtract in

of you largely for is So million consistent replacement the And you mid-point of as revenue get Andy the cash that know we've would a flow. XX with then done that to free around year-over-year. percent the

Andy Wittmann

EBITDA in that's not all free. Got there going needed Is about. be growth then you've to growth generate – range [That’s] CapEx is that some it. the what should order the to given? for expecting There's number that and to be [ph] range the we talking CapEx coming fund that you're

Iain Humphries

Yes.

the really in growth XXXX. So, CapEx was invested

for into got is, So, we've what is investment for guide next growth XXXX year. year the next

So, another it call year-over-year change, think about X%. so to way that

the investment and from M&A we'll that from and have would X% We of volume get from price XXXX. volume growth X% pickup the then and X% in from come full-year

additional give. to there's So, then pickup we there if investment growth XXXX, that would be range current in a guidance the

Andy Wittmann

you're It drive growth Sorry, income numbers lines, to the are income the what's like sounds that needed the asking giving range numbers. these I talking you're the given? about give was CapEx statement you've growth numbers statement – CapEx that

Iain Humphries

CapEx growth contemplated free cash flow. no year's There's next in

Andy Wittmann

Okay.

in XXXX, and growth So fiscal of replacement, XX for capital, M&A. there's of XX XX

you're to is growth So, do then that it around replacement, saying M&A. be million this year capital whatever is M&A $XX no you in going and

year? So, that's the prior tailwind a plus million $XX versus

Iain Humphries

did acquisitions last lot Andy, year, acquisitions a very those is, assets all the as and one additional that all we got underutilized through in that future growth to were we would helps our thing through that you that add they well. of

Bruce Young

Yes.

terms, Andy. the on about it thinking revenue So, dollar

the So, end XXXX. at obviously coastal of was done

would [ph], on X% would another X% be be percentage [X given if another would X% on million, million] [ph]. XX million] So, pickup, the you [X X% be M&A volume that take just

any to that's bridge So, the XXXX mid-point of XXXX the really from without investment. growth

Andy Wittmann

being with That’s business to Okay. surprised growing needed that that interesting basically guess that and so the I'm no there's all Eco-Pan it. grow I specifically CapEx [Indiscernible]. well organic, and for business

Iain Humphries

no, No, you're not. no,

flow. free the of out come would that So, cash

at… looking So,

Andy Wittmann

Right.

Speakers] [Multiple So CapEx.

Iain Humphries

Yes. number… Correct. And that

Andy Wittmann

CapEx [indiscernible] for How does that?

Iain Humphries

be That will X million. around

Andy Wittmann

Okay.

Iain Humphries

flow just investment. cash is doesn't It free on replacement our number contemplate the the So, growth side.

Andy Wittmann

Okay.

need there's the fleets is So, grow anything [Pan’s], there you $X business? for that to other in million

Iain Humphries

Eco-Pan growth is The and No. for equipment. Pan’s

Andy Wittmann

Got it.

Okay. margin you're like it I from you're some – the and had if like want was XXXX rates outlook and going drill here. way a that costs, expecting [excluding] to are making up. just And the by to very change EBITDA But on a you've sources company's pressures surprise the on I sounds margin here guidance flat you're is not definitional into been positive like of now then you basically variance? after year of could to challenges guess adjusted but to change year-over-year, I that year margin guess – sounds It’s include point. compensation director's bit is EBITDA, like a diesel. which public the the obviously that diesel [ph] a my those this getting is, you're question a of other it little It what actually

margin guess to I'm should that about recovering prospect as be we allow if what of that like, to but thinking a are variables recovery, dollars, occur? about out are sounds made could curious recovering you’re I the that you the percentage? Bruce margin comment it there that just What So,

Bruce Young

better biggest is stabilized else rates down time. with at that and we a new over really Everything Fuel then level deal to there. it is the comes just one getting

Andy Wittmann

well, Got control maybe and of X was under somewhat stabilized, labor than you a do that seeing it. it that's – you Are as challenge ago? better the or like X been has had feel today months

Bruce Young

we last than over seen the stable more what definitely had it's year. Yes, today

Andy Wittmann

Got it.

Okay. Thanks, guys.

Bruce Young

Andy. Thanks,

Operator

And with will with question. Davidson. Thielman D.A. from come next Brent question your our proceed Please

Brent Thielman

like of we're you business still busy, in going sound the leveling approach, the they're to XX now through through on fuel kind approach plus last months, out? seeing you forward increases forward on just costs push going over your Bruce, flattening the you've Hey, operations is the of so, thanks. rate Iain. what that pretty can Bruce, prices some out that How continue REIT? these maybe with do pushed

Bruce Young

Well, to all rate on have out to prove value. have to their their able our be as best responsibility know, a customers so owners all the get you we services to

done good job. think a I we've pretty

service from what level the And see and to we I our on them that as were think last results meet able can customers you with do the of provide to forward. to with really took partnering we'll think I that. it going continue year same

customers say weren't that and it was inflation getting factor that and all our they a accommodating of us, I from knew were getting real from everyone would they to that. they just it were

I a little just we'll be really And think that. prove have going forward, to our thoughtful to continue out more they'll about value.

Brent Thielman

And Bruce, calling are recovery fuel continue and out supply that the and impact business you any we today percentage? of about or chain sort other, are just there margin to are talking worth really efficiencies about think when that

Bruce Young

other where that starting same in same The size thing past from only that we we concrete the XXXX get in would would for we've more pump or is paid price paid the XXXX standpoint, I the a equipment the capital it, in to be think XXXX. expensive talked have

So, equipment really the on the they're up. go – pricing really didn't

through inflation. couple Our the hit pretty manufacturers years of got with hard last

going up, fairly else we're equipment So, seeing new costs but is stable. the everything

Brent Thielman

infrastructure that be this may in see Maybe coming Act, it mean, help which seeing what to pretty the you like sub kind come ultimately markets? comes comments participate like help jobs clearly year will around segments on I visibility of Are since in I weakness and from guys from Okay. those markets a expect the in? of on offset tracking guess, CHIPS by commercial forward two spending you confident, that Your residential, like get what whatever you you sounds the commercial are up resi? you that infrastructure offset tailwind. the do just us, you're side look does

Bruce Young

dollar real should We to more difficult, forward. Act. forward job significant states a be do going going Tracing in bit clear Infrastructure becoming going there's down impact our revenues are very more on site is each dollars, positive amount little the the of there although and have still the way a that we'd visibility through more that it's dollars the and that

for sort for that's We're think mentioned become tell forecast bit a still but this just too through trying next very any in we're that's over to to we but year and early little to growth leaving our the infrastructure out that that, that script us. what clear going going we of it's still forward,

Brent Thielman

Okay. All it pass right. Great. on. Thank you. I'll

Bruce Young

Thanks Brent.

Operator

I back this [Operator Instructions] call to time, like At session. turn this would to question-and-answer concludes our over the Mr. now

for closing remarks. Young

Bruce Young

Camilla. in you. forward we when for to to you, look we call thank our March. today's We'd in speaking results Thank fiscal listening report like everyone to first Thank with quarter and XXXX you

Operator

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

lines may at disconnect for you your Thank participation. You this time. your

Concrete Pumping (BBCP) 23 Jan 232022 Q4 Earnings call transcript