BBCP - Earnings call 4 2023 | 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 fourth quarter and fiscal year ended October 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. Cody 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, certain to give in of you we be like this course our everyone our will to regarding call, a making remind would outlook. the that of operations, business I and statements forward-looking better understanding to from These materially uncertainties that to statements. risks could statements numerous and actual cause are results subject such differ

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

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

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

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

Bruce Young

business. another by strength fiscal driven Cody, Thank the strong We afternoon, of year diversification and you, in had good everyone. and XXXX,

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

adjusted continue win Each residential and to X% of increased our us XX% as to EBITDA footprint $XXX million. end our and $XX contributed infrastructure increased XX% construction fiscal to XXXX, Looking million performance, of remains at this particularly expanded $XXX full income enabled year net increased markets to our projects. to to revenue million, strong

the the continue Xx execute fiscal of end year. reduction our achieving target on to also debt initiative, XXXX our We at leverage ratio

our fourth strong the investments. our more infrastructure our end as market, footprint to public revenue drive performed we with to market, Shifting by from expanded captured in quarter U.S. expectations. continued line results performance national In end business project

see tailwind flowing We investment it continue numerous with the operate these be to opportunities to where we for more aggressively projects business. plan has we to our to X-year the project plus that a belief potential and pursue

not new end expect fourth quarter, construction housing remained new homebuilders stable given ongoing creative interest enticed the and home end, a structural market and for housing supply-demand in we fact remain imbalance rates rate the financing healthy subsequent residential cuts continued to due During residential only have interest in our that home momentum the design residential the buyer XXXX, but in to projection to falling projects quarter business. our options. additional the housing, of with With

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

reshoring manufacturing U.S. to a given trends domestic We build continue expect this as out demand their footprint. to company

projects. light from regional demand weaker commercial and of financing availability sensitivity pumping has continued concrete installed interest from as However, to rate be banks comparatively reduced some projects smaller

We expect that interest could moving rate these cuts again. in help get XXXX projects

declined diversity highlights residential our revenue fleet. This fully while projects, the as by our This to commercial once mix quarter, absorbed the a of flat of year-over-year XX%. XXX year-over-year basis our and was the of agility points business again percentage at our During our total was XX%. infrastructure

the inflation through ability margin. accounted bottom labor, we continue P&L. to estimate of inflationary strong We persistent experienced the inflationary to hamper side line to to flow cost the half performance pressures, in Shifting headwinds of our labor in our business, revenue for our our roughly particularly

While year, employees shareholder to retain the measures taking business to rates we new value. drive we into steps right systems confident in long-term the these are we the our the are and continue to recalibrate our attract are for expect we to headwinds are implementing

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

Iain Humphries

brand as good million In higher to ago . and in compared million U.S. Bruce, $XX the certain quarter. in in regions from Thanks, mainly attributable segment increase increased our the afternoon, $XX.X $XXX.X fourth pricing. same under growth in improved $XXX.X Concrete revenue volumes each quarter, our of to prior year The increased Brundage-Bone and growth organic compared million Revenue to to to was million of a X% everybody. quarter. segments, operating result the X% Pumping across mostly year the

operations, the the in our improved large approximately U.K. U.K. same increased due revenue primarily foreign When to for operations million translation pound, pricing XX% to in compared under excluding $XX.X XX% $XX.X our Camfaud fourth For to year quarter. British the effects improvements. from operating brand, the revenue the quarter ago million exchange

pricing. Revenue prior in compared in The our to Eco-Pan and Management increase in organic by strong to year increased million was under quarter. operating XX% volume brand million driven segment, $XX.X revenue the Waste Concrete improvement U.S. increases $XX sustained Services in in the

impact margin compared same fourth to Returning mostly XX.X% results. year-ago decreased the to related labor Gross quarter consolidated our with XX.X% a quarter was to of the being inflation. the margin in in

quarter the ago $XX.X million the to and General year in fourth administrative same $XX.X compared were million expenses flat quarter. roughly at in

costs fourth XX.X% improved same As to of the G&A compared to a quarter quarter. XX.X% in revenue, in percentage the year-ago

amortization as noncash percentage XX%, which costs were revenue prior approximately G&A when G&A of XXXX, a the is For consistent with year. and the full year expenses for the of compensation, stock-based excluding

compared fourth million to to $XX.X same ago the quarter increased in the adjusted per to the per in same $X.XX $X.XX XX% diluted Net the quarter. share income Consolidated $XX.X fourth or year marginally common $X or million available $X.X to million EBITDA shareholders increased quarter. compared in million ago diluted share quarter year to in

the same compared discussed XX.X% as labor. the particularly cost cost of was margin in year margin was XX% persistent And quarter. by the ago EBITDA in driven previously, erosion in slight inflation to Adjusted

Pumping In million $X.X $XX.X our in business, $X.X $XX.X adjusted compared In the the in business, X% quarter. to our Concrete decreased same million X% million adjusted EBITDA year-ago to to compared U.K. EBITDA year to ago million U.S. increased same quarter.

management our XX% Concrete adjusted to For EBITDA million million $X.X U.S. to ago increased base year business, in same compared quarter. the $X.X

flow free to now cash Turning liquidity. and

XX% equipment cash in to million, million $XX after $XX interest. million For This growth cash $XX year. XXXX, year we investing the the is disbursing in approximately almost $XX to delivered is compared free which prior flow full approximately in of and in replacement million

we of debt XX, $XXX to million, a XXXX, testament October year, equates is strong a million outstanding $XX cash At the course $XXX debt million of had over free flow This which the the debt-to-EBITDA of of total our balance of or generation. net had liquidity target our cash was ABL XXXX, on which from year-end. October for XXXX leverage ratio $XXX to which approximately sheet facility. million and of availability the includes guided our Xx, net a We as of XX, decrease

our position, pursue lending and to maturing strategy. to overall we We our opportunities in the XXXX XXXX. have like senior no investment value-added notes in a organic As optionality our debt of fleet strong maturities support responsibly maturing remain which or facility long-term in equipment accretive liquidity asset-based a near-term our growth investment with further in M&A provides reminder,

$XX a shares entered additional the XXXX, to up Directors program of an million of outstanding of approved January of quarter third a we to XXXX, the repurchase common stock. buyback During into Board million In share $XX authorize our of of increase.

shares of the During $X.XX quarter a repurchase of fourth repurchased total common approximately our average stock for under of $XXX,XXX our an approximately price share of XXXX, program, at share. XX,XXX per we

share. approximately million for and program, a $X.X shares of we the During share an share and March growth Board The average buyback of ] authorized repurchased price by confidence believe XXXX, million fiscal this our total X.X stock commitment our in Directors our program through our our to our current to value year $X.XX And we shareholders point. of XXXX of or demonstrates XXXX. delivering [ both repurchase strategic under common of is per

into guidance. XXXX now Moving full year

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

expect XXXX, be to offset cost initiatives. by year and cost labor fiscal and the to efficiency we recalibration inflationary primarily and impacted costs For continued from rate pressures, these continued expect insurance costs

to a have continue we continuing foundation, to have solid Operationally strategy. financially, our on and growth we execute confidence and in

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

Bruce Young

and backlog in anticipate infrastructure EBITDA every with infrastructure Iain. In the record projects ongoing of year in our markets, residential growth a summary, residential by incredibly work. resilient are driven of accompanied particularly pleased We and segment. expansion by we end revenue and Thanks,

and on rate talent side On the pressures of attracting industry from while retaining focused through cost we the the best in cost equation, the increases. inflationary impact reducing the are

focus bottom and to line our growth. always, end top optimizing remains mix As strong market to deliver on continue

service believe we market for the us ahead, diversity Looking construction our end in positions well mission-critical continued and industry growth.

while growth We our accretive leverage. opportunistic strategically expect continuing organic reducing to complement to M&A evaluate by

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

Operator

will [Operator of Instructions] Davidson. the D.A. come question And with first Thielman Brent from line our

Brent Thielman

some labor in of helpful or margins better Is inflation, shrinking what from your being compression it's thoughts X question cost margin in the still guess, there. inflection environment? like or get Bruce U.S. as of sort labor pumping. quarters business lower group? I new sort first the some we today's in of revenue an It'd the away proportion margin of that business guess, be I X in reflects to on Iain, is just that still presenting sort looks segment, Are

Iain Humphries

question. mean, shrinking. good Brent, short, in Yes, I it Yes, is

part on couple mentioned our in is of points remarks. a obviously that. cost a prepared we -- this And initiatives So

been a portion I certainly mentioned, labor that of the we've around the is of inflation mean, this seen about has Bruce So as half feature. year labor. big

So it's certainly of focuses. key one our

to forward. a those big still the So the impact do, are going margin cost work part of shrinking, certainly and but is some initiatives

Bruce Young

it what to continue is that I and get year as to Brent, Yes. out. I plays the as think now better add will -- shrinking is we would

Brent Thielman

the of it of also see mean, guess of Okay. healthy I in reasonably mean, I growth XXXX, that what does you've the growth moderation seen I That's moving in kind call growth. fact of pieces light rates maybe great. revenue quarter, relative for And this to a And outlook in just I for you pumping for some mean U.S. the market. there. did terms the

I sort anticipate what growth of you that year? for you this in reacceleration confidence guess, some Bruce, see bridge new the you in fiscal So And pumping? can just U.S.

Bruce Young

a some what year. But and winning so sizes we hard opportunities think as that. different that is do to in need always it's geographies now of better the revenues analyze share under you markets, different trenches. getting markets same. as little to on to we're some it It's our different we're up will projects markets. we on on the our very that in see the holding things growing just many And in that operate of kind maybe will we working over be on to we're it's drive also know, rates But that different and equipment, battles large -- customers, is able impactful Yes. the next we that we gaining bit fairly the can been what different be different will where end we've And seeing where

Brent Thielman

effectively those those? been be got going are you've Or large to that to high Bruce, a attached confidence projects, And you're awarded? of ones level you've

Bruce Young

Yes.

of bidding we're be will others Some and currently shortly. that we some to expect be awarded us on, that that to

Brent Thielman

Okay.

the be this just And balance question, Xx into further want thoughts the you leverage? to my get XXXX I on Okay. nice with last year. where working sheet a in

Iain Humphries

is obviously, point, flow the as cash us know, I you I Brent, Yes. number. mean, mean, free for starting the

most best And so a we to But looking with with the think the out coming for flow. is free what strong value. shareholder create we're opportunities themes quite the consistent of cash always indication again, we're

in the growth we'll that to continue into the allocation business cash a the most from the of value. allocate areas free that have perspective, capital So flow

obviously, of it, lot is also we organic, values inorganic right. M&A opportunities A if have in Eco-Pan but the the are

from So doing that number there's been keep to have things we doing. options, that on a think, we flow cash number free the of

Operator

line the Wittmann will Andy with question next come Baird. Our from of

Andrew J. Wittmann

range. all there is question guess outlook for guess implied to kind low I it? thinking basically the a get and are here low -- almost that price I about 'XX. Is with on start of volumes the volumes to the of high just the it and the of about Is to wanted the end want rate thinking X% to to one think correct I understand then just way high end. about it? fair of positive I I what's revenue way that the think being How Is flattish the growth in and to end you it? about XX%. to

Iain Humphries

Yes, Andy. I fair, think that's

I right like we can there on. I recalibration as we that you're the of think you as get you're low to flatter between obviously, mean, right, equal. doing I mean I midpoint. we're split volume mentioned. on assumption is and an know, the volume. end, mean, as But somewhat pricing be continued

talk midpoint, on X% let's or price. flex volume on the volume, X% it's, or obviously, say, based the So around X% the we on will if just piece. that And X% the

I you're about think it So thinking right.

Andrew J. Wittmann

the we we be it margins? goes in 'XX as are -- that guess be on margin the for that guidance, mean basically of that a they're hundred about? expecting there that's I maybe, challenge opportunities growth broadly differently say the the then is I about XXXX. as there But Okay. should speaking, implied are that EBITDA the factor thinking down competing to should heard in 'XX? not I just is that. basis And what wanted I commentary Or considerations on competition That just the sense. on margins I'm a thinking into more continue is heard labor. maybe to dig And you're couple points. here guys Bruce, I the you wondering, rate other implicit implicit to makes that into robust? Is And that

Bruce Young

Yes.

ahead competitive lot the that get there's confidence the of thing to have We where against for think on I part We're environment rates this in. family last not most is discipline. the the inflation. biggest themselves we're of about offices up that in call competing talked a don't our

drive know -- out that. the largest so players And in get we of and this we've as of always had front kind because and to do and that

some And so that front of through concern year. about we're that, finding on creative is there get ways to how play out but the will

Andrew J. Wittmann

it. Got

here Okay. maybe That's helpful side. guess then maybe I last my just the commercial -- is on perspective. And question

down seeing here? all at want of shoots seeing kind give there. is if this that's commentary been has that that certainly, what the eyeing the are to Just new, of movement there even commercial of through you including build you the terms peak the green wondering or projects to seems these prepared like in toughest your of just you're Obviously, be are are on the I'm -- some feels you're positive. spot cancellations, process. jobs about what the seen Or not remarks, some it's in rates this case the you you delays made but commercial, to light wondering on seeing directionally bid in ground like

Bruce Young

Yes.

projects we commercial quarter. So The going. the that about haven't we last sometimes lighter a X, a or light months, from X about concern activity, it we know the The advance. doesn't create it's commercial year in lot on a X months. backlog larger larger ones, some them see still don't There's just like what the are things changed where projects get X --

see -- we up as we'll and don't as visibility, we demand we that much greater do So becomes interest increase. lighten rates that but have believe

Operator

Blair. the comes William Our next of with McFadden from line Luke question

Unknown Analyst

you commercial terms just for kind been it's side, know while I in here. one of territory just index, -- a now. kind on of negative the Maybe of ABI a mentioned the

hope that perspective, versus as any XXXX. that's of if I see your kind would think helpful. start you that is I just there But think improves. think But the weighted we about construction improve hope is front-end through guys take maybe it business? how from the more move And Just nonresidential your to somewhat that back-end we curious be weighted?

Bruce Young

Luke. Thanks, Yes.

I months, is think commercial we'll expect that even, at then affect with to year. be light and and few doing it commercial is The quite until will in like over where second the now going, do least light they the projects, seem half see some that, next but ABIs well will the the our or were that, few have a We that larger concerns of was ago improve commercial. months up pick back. that we concern

Unknown Analyst

in saw know Mountain particular, particularly our any that anything were in again you one what I just on any Residential again. bright fourth quarter. specific And strong? a quarter, during nuances residential November, the spot here. In market more we single-family end quarter, discuss the saw you was region Great. homes jump strong the there? was the last you for but in of the new geographies Can around

Bruce Young

same story. into as job affordable. residential good better in really of plays supply be the up making Yes. we back the that we the come interest for have favor out and see our down. that, as picking It's expect been a even year, done And this rates has homebuilders and The homes year demand could much

Operator

from Stanley Our Stifel. comes question with the of line Elliott next

Unknown Analyst

on about Andrew the wondering given the Stanley. But and is landscape bit for talk certainly what there, is little the was you looking as more. like I enter is opportunities? seems new appetite It year a balance we could are the where the This like if M& sheet.

Bruce Young

Yes.

up cash very of increased value substantially. are getting either margins in new going competitors value their deals. in seen the so assets. the And we've And inflation, down assets haven't very their that inflation, the are strong M&A doing holding with up small with interested or challenge flow job of many of cost with their good good done So of we're a rates the of

year, that appetite think for And created always that will right thoughtful good doing we'll us at right to difficult a in We've us shifting for position We sheet deals. and balance that. start it's be for puts the we that, an the we'll just a during -- the about so the but time. have be

Unknown Analyst

growth are year? And to And rail the about do delays you segment, over there? have cancellations in or concerns you about how the this high-speed then related the project thinking into U.K. pumping any

Bruce Young

feel U.K. in. they're we're for the the time, going we're HSX at currently our really this Not portions XXXX. good we that on locked workload about that on, are into and The project

types are lot And as strong this continue so of are dollars that a we're projects being the throughout and to that finding we expect in U.K. spent And growth. year. of other other infrastructure that helping that well

commercial U.S. very But little U.K. is potential the in work growth 'XX. the the the the great flattish, similar the markets the are Now for we U.K. to really a in have on infrastructure opportunity

Operator

[Operator Instructions] Our next question with will the come Fisher UBS. line Steven from of

Steven Fisher

quarter, financing a you availability other think the the I I of apologize, level the or said drivers creating little that smaller and perhaps of things of softness, part get to challenge so But like. had I How any last challenging bit sounds a commercial for some you I'm much of missed in the it if and not versus it more covered terms actual sure factors? this like is call, first not. of financing. was warehouses

factor? much a that maybe So Is intensified? about is that Has still please? how a that it talk weakened bit, little --

Bruce Young

positive the do fairly for in quarter-over-quarter down, like Yes. rates state second half come watch for to fairly that those get see closely. to We us. of get close impact We expect should we same the It projects year. easier and anticipate, that from some a funded, that seems the as to

Steven Fisher

near seasonality of Okay. term, obviously, through well we're first I in the quarter. just in your guess And then terms

trying modeling happening that been just seasonality? put to of How these to aware for we last call have Curious months. what's be through? received? of of those should anything purposes the in terms near-term about been couple how you're rate So anything increases And out over

Iain Humphries

as I go to is consistent X. good through expect question. stronger Steve, second we typically, half maybe half. first Yes, the be seasonality going QX a to is slightly the we than What mean, quite actually

come we'll those some With online. in rates, commercial change the projects expected light of see

[ the usually, for that XX XX think ] of impact. we ] it back we're with you the know, year [ half might as where be stronger just So XX,

Steven Fisher

has rate the the Okay. increase by And have marketplace? accepted been how

Bruce Young

Yes.

to challenging, to and customers, always a We As especially we're believe in it's out dealing a in We're you great teammate really great know, market that a on success. rate our today. our and us having prove we're good go out we that sales provide team service, increases value. and do are and

Operator

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

closing for remarks. Young

Bruce Young

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

Operator

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

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

Concrete Pumping (BBCP) 11 Jan 242023 Q4 Earnings call transcript