Earnings call transcript Q3 2023

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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 third quarter ended July 31, 2023.

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

you. Thank 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 actual cause differ from risks to that such could These statements statements. numerous uncertainties are materially to the results

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

free Company's we certain non-GAAP release believe the also issued the reference again, updated the be we remind evening. have everyone this later will the like website. as well today presentation today's or webcast investor call, to And investors. the including provide our non-GAAP useful today's will investor replay replay measures information adjusted posted for and in release provide press provided measures be A on available available link also will comparable Company's this via an these website. website. as on call flow, debt about cash I'd GAAP we further information in presentation on posted for which measures, On Company's to and reconciliations We financial financial EBITDA, the net press

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

Bruce Young

good and everyone. Cody, you, afternoon, Thank

double-digit our record-setting in of half every the segment third of we accelerated business. growth The first in the quarter, by driven growth in our revenue experienced year

market quarter eighth is end report organic gain our double-digit pleased well. share growth. continued also performing that quarter continued By from This was our to of I'm attributed accretive fact, and recent marked to our acquisitions third revenue growth. market, consecutive In business

like projects plants. semiconductor plants, large to momentum fabrication battery continue In commercial, distribution experience electric centers, vehicle in commercial we manufacturing and warehouses,

as We expect to this demand out build to trends domestic footprint. continue their U.S. companies look reassuring given manufacturing

demand our regional continued weaker pumping Despite our from particularly stalled head market smaller sensitivity as of from banks concrete with commercial However, expectation commercial be for opportunities projects projects. business. strong and manufacturing, has remains fiscal to we large reduced interest financing this, in some another year into the comparatively light availability quarter as strong for rate given has seasonal XXXX

project Turning as revenue footprint U.S. more strong our to to drive to capture from national investments. continued public expanding infrastructure, allowed us results it

to We and state the renewed projects will to U.S. in Act. to the the continue work Jobs win Investment at and look Infrastructure levels with and investment local forward

funds continue operate. markets in of these be plan aggressively to we see numerous pursue are the to to to a We where visibility tailwind flowing potential which plus existing believe our an located business. opportunities of project for and five-year many projects, has improved We it

imbalance momentum in financing housing have residential During buyer new end not and options. only demand the construction homebuilders structural ongoing new that creative remained quarter, the due given in home design enticed housing, continued our to the the third residential supply with stable but fact market home

of of as business X commercial gain diversity and agility a revenue of During the remained total highlighting fleet. of of once in point our percentage at consistent growth there mix infrastructure revenue, our of our revenue the quarter, XX% percentage a XX% again, was and the to

cost in Shifting revenue continue the hamper impacts from our growth. cost to of ongoing inflation, side particularly our to ability of strong business, leverage labor, to the our

protracted return realize performed, on of expected the but difficult the fully across equipment business all and headwinds. the rates continues to work is same offset Our team to for recalibrate investment our segments volume inflationary

cash free end generation strong are are flow the X of Importantly, by track to pay fiscal reduce our down to times leverage on the our and debt however, year. to we using

let now will Iain some on financial details provide more through remarks. I I our concluding walk Iain? return results to before

Iain Humphries

good and everyone. afternoon, Bruce, Thanks,

QX U.S. prior Carolina to the segment, increased In revenue pumping business operating acquisition of largely UK volume our XX% from recent organic due quarter. XX% compared increased and in dollar U.S. By segment, our to our Coastal brand, Camfaud growth. under contributions the revenues year

revenue translation the impact, Excluding by XX%. FX grew

with team concrete-intensive, road compared which Services segment expected we beyond Eco-Pan projects In the in XXXX. project, the HSX, operating record we exceptional organic to previously by market sales and continues on deliver increasing energy, rail ago expansion our year addition same to to by continue to an service quarter. is to revenue high-speed Waste our created U.S. secure under Our and last to work penetration, brand, Management railway our be the and Concrete offering. enhanced announced of driven XX% results, the continues basis value by team This

Eco-Pan's our in construction our maintain in growth, organic investment used continued continue the given and concrete double-digit in Going penetration and we equipment, team to forward, waste. contain of concrete market revenue continued expect methods the to its projects the to evolution

Returning the to ago third compared same points our XX% the consolidated XX.X% to results. XX quarter. basis to year quarter Gross increased in margin in

the quarter by margin partially inflation. noted was supported of Bruce earlier, strong offset wage growth As expansion our this revenue cost higher the in and

$XX.X due million administrative primarily expenses quarter, versus million additions same headcount in labor $XX to year-ago the and to QX related costs General acquisitions. recent and in were higher

we the achieve quarter organically year of percentage improved to operating revenue, we costs quarter. XX.X% M&A. scale illustrative and same the in This ago G&A to both the third a XX.X% is of through in typically compared as As efficiencies

liabilities income improvement in this value $X.XX to benefited year quarter. operations, lower diluted million well achieved quarter to per the from compared or our warrant million year shareholders $XXX,XXX in from income year-over-year and expense income of as $X.X available compared common benefit ago same $X.XX as quarter in interest a slightly was year. change the tax $X.X million to last million share $X.X third QX per $XX.X net a share diluted in a favorable While fair the we or

net warrants, XX% of impact would the year fair quarter. been or same Excluding to income have quarter compared $X.X the value approximately higher third the ago million our of

Consolidated EBITDA third quarter. compared increased ago adjusted EBITDA improved the year million slightly to the in margin ago Adjusted XX% to same compared $XX.X XX.X% year $XX to quarter same quarter. in the in million XX.X% to

quarter. in million to segment. to $X quarter. year EBITDA Moving $XX.X on adjusted In U.S. In same million compared by ago $X.X XX% year adjusted our the in the to EBITDA UK $XX.X results compared to our Pumping Concrete business, increased million to our business, million increased prior

business, EBITDA in to XX% compared million ago adjusted improved same quarter. year For to million $X.X $X.X our Management U.S. Concrete the Waste

Turning to liquidity.

million. the since As X.X had net a reduced on third of XXXX, a we outstanding we ratio public debt EBITDA debt leverage company. debt is quarter, becoming trailing times In our at net basis, our leverage July by million or net million XX-month which of of total adjusted $XXX resulting $XX a debt XX, ratio in $XXX lowest

availability a cash XXXX. of million ABL the upsized facility. to July our $XXX lending our third XX, which we of includes quarter, on its approximately in from also had to in reminder, asset-based June and $XXX liquidity from million, maturity extending We as As balance facility while sheet XXXX, the $XXX million

free quarter, long-term to leverage target mentioned, and enhances track times. overall we Throughout to improve we this cash believe and debt our as strategic flow deleveraging to ratio net growth our continue and delivering X.X our investment strategy. accretive the third our towards strong opportunities continued Bruce by We liquidity ability of leverage pursue support

now near-term to maturing investment debt remain have and we reminder, senior free Concrete investment maturing like also, flow maturities M&A, no a position Pumping the XXXX. a optionality in and liquidity opportunities notes value-added We accretive XXXX in As lending with further pursue our and asset-based of in provides organic Eco-Pan facility strong growth continued in our which cash our fleet.

approximately repurchased Company shares the XXX,XXX million. quarter, third the for $X.X In

we XXXX, $X.X million remaining approximately repurchase authorization. XX, July under at existing share the As had

We by beyond. momentum we are we are in into our the are that carrying seeing quarter encouraged fourth and business and what the

and one we as narrowing cash approximately fiscal fiscal our million million. adjusted and guidance financial $XXX replacement paid for CapEx $XX interest, $XXX we year Now less approximately moving EBITDA of With to cash in are our adjusted outlook. of net revenue left approximately EBITDA and flow, year less which quarter million, define XXXX of expect XXXX, free

Additionally, fiscal in confidence our we by solid a expect Operationally our year-end. times growth X have net ratio financially, strategy. to debt be approximately and have and we we leverage executing foundation, our

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

Bruce Young

Iain. Thanks,

top another with In quarter summary, every double-digit growth in very record pleased segment. and by expansion line are driven we

our end a offering XXXX projects, positions We business the of mission-critical high-value particularly We compelling heavy by us beyond. driven of the our necessity backlog work proposition continue residential for the and growth in service of anticipate resilient ongoing in and to commercial and service industry, which construction our well infrastructure markets, prove work.

equation, to paying which have recently are the increasing. been year On and all close of the cost we attention fuel side volatile costs,

seasonally focus into our quarter, move to our as is end fourth line top mix remains QX. optimizing However, to to deliver growth we continue market similar on and bottom which strong typically

continue maximizing M&A and opportunistic high-value our service capabilities, on reducing unique We executing focus value offering operational will on while accretive to also strategically shareholder leverage. our leveraging by

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

Operator

first with comes Our question UBS. the of from Instructions] line [Operator Steven Fisher

Steven Fisher

revenue the see to Nice afternoon. Good Thanks. performance there.

Pumping you slowdown like seems Do the even is significant if can growth might is that It rate. kind it or X% right? resi bit give growth the us bit QX color slowdown? a bigger wondering implies commercial implied in accelerating of little -- of just Concrete Where possibly Your surprising have the softness. a by only I'm steadily, if organically. growing X% pretty of U.S. little the infrastructure you that see and with segment. be a And growing I market seems

Iain Humphries

the what And is to million QX. and Yes. is Labor we've what given down, the know, revenue for than that's quarter usually, QX, slow Hi I comparable. we're for quite fourth that's projecting Typically, for $XXX you Day comparable think this Iain. quite think is of things I our With Steve, as QX QX other holiday, question. which Thanks QX, the in can guidance.

segments So about the would the we the the somewhat By we expect, I comparable each side. the is to into fourth segment, guess, as momentum QX and mentioned on to way, think his EBITDA from as quarter. in line ongoing Bruce go growth of like marginal QX comments, on top

we've on comparable So, like year. our I the I that's QX, for and full largely guidance is think QX to said, what underscored

Steven Fisher

us versus a you give in Concrete Pumping? Can QX assumed particularly QX, in and U.S. Concrete you've what for just the the price Pumping Okay. -- sense maybe for was what volume

Iain Humphries

sure. Yes,

in So also, some M&A we this have year.

side, look down, was X% X% on XX%, and M&A, about to was third way best broken further mostly the the Pumping maybe which the at volume some that's on context. Maybe quarter from for and the price. volume So U.S. on growth X%

you for price. it's XX% If X% -- it's the same, year-to-date the X% the basis, or about growth look volume about on on and year-to-date the X% quite year, M&A XX% same on for -- the XX% and is for and a Steve,

we fourth the well, consistent that be quarter for full in been expect year. has comparable quite quite as the So, to which

Steven Fisher

at should maybe the that seasonality be able of I EBITDA comment adjusted bit somewhere know Okay. and we point us consensus is at kind And right how I the I to mean mean a early much do second million there's kind that if this thinking than half this have that? But a $XXX first to then further, usually annualize visibility on I just half we the you bit adjusted to 'XX XXXX. XXXX happens of little to around mean, neighborhood half. in out would EBITDA, which be give about be looking is of how your your stronger for of point? second

Bruce Young

out is Bruce. of a us too type Thanks infrastructure We to for question. improving. Steve, It's projection do put the see there. little this early that still for a

now see through some are to business. We that starting our revenue flow of

trying next it’s are in a one we'll out year, understand few stable, next good. been learn more get year. goes look it's It's more light slow understanding to that we However, The next that residential the as before over the thing guidance coming. still work to projects pretty January. on we large into in the where and expect The we -- I'm little commercial months the market we looks into the put need

Operator

William Our with next of the Blair. from question Mulrooney comes Tim line

Sam Kusswurm

This Thanks for Tim. my questions. taking is for Sam on

have new your rates? how in environment? know I on So areas a but clients you comment end commercial certain certain been could interest where addressed with you bit or projects markets higher hesitation prepared expressed Are with noticed dealing pullback rate there clients have given you've higher further greater Thanks. remarks, interest the

Bruce Young

the in -- It's comes Tim a are (sic) seeing lighter (Sam). plants, for more of electric more that lot much thing. projects What at projects rates, like to not question, it's but pullback where that vehicle large anything sort the sensitive commercial concern The that projects of thanks about chip we're that, -- manufacturing really or large scale and we're more returns. it anything really affects plants, the smaller the interest the seeing --

Sam Kusswurm

related then in Great. to and trends that broadly you the are you the maybe further ground, Are initiatives Government those we see could funding, if talk to are break Infrastructure you about demand process? some -- relates Act. more And projects to starting or bidding seeing still allocation

Bruce Young

secure the gotten bids work, here to stage of some We fairly actually we're that. us but have by encouraged to led we've projects. some recently, that for those large that Nothing bid seen

we it was opportunity being year. see do that into much than so And XXXX this better a

Sam Kusswurm

Great. you we broader Obviously, one themes keep as guidance so XXXX provide I relates towards just formal to your there we growth next if your look are just more know then and and year, that it But for I And in mind in squeeze could maybe should fourth as margins? any won't quarter. here.

Iain Humphries

side. again, mean, we it on the on supply us demand back Yes. recalibrate I based really project for comes and as rates

As mentioned protected certainly comments, impact, labor, Bruce this year. his the inflation has around more been in

Eco-Pan So improvement UK And performance perspective, and to ease seen we start side, the expect as quite would rates. the margin. we've from to help we and stellar a in expect to margin recalibrate on that we some then obviously, continue that

Bruce Young

as of would It's more of work XXXX, The isn't inflation. there in environment. least a much XXXX. or is in that much ahead inflation as good harder XXXX. with I a getting What really at to was out It add it we great in did that's out was job rates competitive up

of harder improve with So, it made for improving rates. so battling share the and see competitive, much market it more should and was get markets it and 'XX margin We more into to rates. the

Operator

Our of with next Instructions] [Operator question from line Wittmann the Andy comes Baird.

Andy Wittmann

had of to maybe wanted on, on residential rates or just and I the a there uptick little in the here you sequentially that guess, confidence factor business. here been saw the zoom the in rising but to Obviously, your I was some. surprising a portion off demand

fairly forward it you've So -- outlook well. like decent look and sounds a got as as you

has put was just to on a Bruce, like remain wondering, that why you the and so. more may I you you little bit comments detail could So, if up made, that that as around shored residential believe

Bruce Young

question, Thanks for the Andy.

quite So, as been Mountain smaller it's that the impressed flow more Idaho, they've seen we do residential honestly, the those we large do work, that we've where in really the largely Utah, houses and residential keep homebuilders is markets. we And continuing. we're in been look Texas at our Arizona keep of on to have as and of going, is to lots, features and lot demand markets able many interest maybe in to the and have still high states. brought a see most built them down affordable. rates, what not with We've

Andy Wittmann

I see.

what something, Iain. Okay. that maybe earn-out or And noticed million a was or this non-recurrent Is one you sheet like then that about the liability can what is balance that wondering on just talk quarter. is? just We there an that just I $XX.X popped for maybe is?

Iain Humphries

Yes, change self-insurance. our presentation it's a really on

on So, GAAP it's program. a more it we line it our and self-insurance provides bit -- we think mean in think I provides visibility with

-- which insurance, consistent around is on about like liability commercial our with quarters. of if it's net from million, think you first so all, $X.X prior from perspective still So it, a

the change it's a really presentation, So, Andy. in

and way from deductibles, your the it between of gross works So retention a that up really self-insurance that programs your excess it's presentation.

there's about So the million about on million. asset liability side, $XX side, the $XX and there's

-- presentation. same it's So, it's in just it's just but the change net a number,

Andy Wittmann

you. Thank it. Got

there ask in happening? been calls. have about as to you I of program, else the for while. another leveling -- about a on I of talking the and out scheduling many what the that you you conference I annual its to that's when think that start for year look with or contributor that terms growth time, just contribution, has recognizing asked does years It's a this for think I construction 'XX HSX into a Do guess, long growth a UK still of lot in HSX of about there's to your I this off wanted been here. is guys forecasted more revenue it have know

Bruce Young

the leveling into next then see several off for growing and We it there year slightly next years.

Operator

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

for Young closing remarks.

Bruce Young

Thanks, provide everyone January. listening you to report Thank and XXXX when in thank to forward our we you. XXXX fourth to Shamali. We'd today's quarter for with look like fiscal speaking we call, and guidance results

Operator

does today's and ladies conclude And teleconference. gentlemen, this

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

Concrete Pumping (BBCP) 7 Sep 232023 Q3 Earnings call transcript