BBCP - Earnings call transcript Q3 2024 | Concrete Pumping Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Concrete Company Holdings financial results for the third quarter ended July 31, 2024.

Joining us today are Concrete Pumping Holdings' CEO, Bruce Young. CFO, Iain Humphries; and the company's External Investor Relations Director, 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. ahead. go please Cody,

Cody Slach

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

quarterly annual these the concerning see and on report other on and risks XX-K, SEC. with Holdings' information For Concrete publicly Form uncertainties, report filings XX-Q Form Pumping available

non-GAAP any we obligation On measures, statements, otherwise. investors. new believe net EBITDA, The which intention company ratio including any result for future revise information, update today's forward-looking call, disclaims free adjusted as of financial a cash leverage or flow, certain debt, provide to we or or and information will events useful whether reference also

about in provide release these measures GAAP non-GAAP information and or the the comparable measures financial the company's posted investor our website. We on further presentation reconciliations press today issued to

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

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

Bruce Young

starts longer of rates the new monetary commercial build sensitive and everyone. afternoon, impacted Management rainfall policy, projects continued our quarter, that more across have Texas vacancy third and and Concrete delayed in quarter. organic our the ongoing of Cody, offset projects. impacted with Higher construction curtailed was together segment, business project Waste timing have restrictive U.S. volumes In by U.S. declines the rates region, historic in you, Concrete good building a commercial on in Thank volume-driven higher rate the Pumping factors for growth series interest for Southeast

have on interest nonetheless our experienced on well temporary, In market these the the higher we followed While infrastructure financial results. largely we U.K., are had the still rates our impact volume a backdrop. the but projects considering sustained believe up held they circumstances domestically, trends negative of impacts

waste pleased at grow to quite a by with challenging double-digit driven are continued continued in of our share healthy growth concrete construction we the management the rate business Meanwhile, market. organically price improvements face and market

debt, our financial improving tailwinds speaks adjusted approach unit strengthen margin, continued EBITDA In We our this beyond. we business to the continue of as investments. quarter, capital sheet the expect and in flow management, to our for as to remainder to and cash this robust cost year strong disciplined economics which preserving third improving free well fleet initiatives our profile our and paying down balance the by and

trends projects comments market. commercial work, the interest our specific we to more are economics. With pace experience which Larger is projects, Turning rate at similar commercial experienced We slower sensitive albeit moving prolonged to these manufacturing light continue of what by largely market, commercial we our to softness saw in end a variety and quarter. across commercial especially to a environment high even rate currently mostly haven't remained tend we to interest in. to immune projects durable, been be momentum but second

States weather projects. in Texas in also wet continuing Weather quarter unseasonably delay outsized the played role to an with United and the Southeastern

to to QX, events on into move these further we this work. catch expect portion of would subside we up weather a As and

revenue approximately XX% interest XX-month of our higher holding environment rate market a resilient, with concrete market residential mix trailing end our considering the of on overall work basis. in remained U.S. total pumping Our residential the at

prominent. rate We as customers undersupplied creative perspective, our a mountain to with especially in motivated activity include Texas, path support represents and the construction solutions region to supply-demand expect within regions that markets we entice which investments homebuilders From construction still should rate in homebuilding is structural regional continue see residential growth. to this believe housing where we imbalance to and continue to will end the buydowns continue interest support reductions remain Federal Reserve's single-family

we to from Investment and revenue. project infrastructure projects Infrastructure Offsetting resilience commercial in softness, versus our of domestically X% public see footprint momentum U.S. and these revenue in market and X% expanding beginning some of the our some drove the capital other of more grew by investments. infrastructure our or national U.K. projects and are our deployment results, third finally Act in our year-over-year in markets quarter JOBS combination total The

and national organically while investment, As aggressively footprint positions these continued XXXX and breadth, diversification deployed competitors and our and see investment. growth domestic unique of the to accretive being in we to market market the well pumping phase, is funding soft, time fleet. for the the project grow commercial, positioned both at IIJA sheet than our pursue develop given we depth our remainder as to customers our opportunities. U.K., summary, U.S. to to major value government projects are that infrastructure continued In we proposition us expect particularly infrastructure remains challenging M&A. beyond due to construction construction Furthermore, and the and to a we environment strong through of agility has in the result, our execute early balance best for continue believe to lines relative to In advance as continue faster our

ability plan As the shareholder execution to and term, strategic value. responsibly through over disciplined navigate drive our a result, cycles we superior long believe will of macroeconomic our our growth

I our Iain provide in return to remarks. financial concluding address Iain? I let some more will detail results now before

Iain Humphries

afternoon, and good Bruce, Thanks, everyone.

$XXX.X the quarter, In quarter. third consolidated ago same $XXX.X the year million to was revenue our million compared in

Management in was the a revenue Concrete organic Bruce Services. Waste offset by decline strong mostly our volume Concrete U.S. partially As Pumping mentioned, continued driven in decline in segment, by growth

operating from construction of to concrete $XX.X mostly in to prior regions. to is primarily due higher certain commercial compared the lower volumes million and decrease and the oversaturation Concrete in impact in work, quarter. decreased revenue The million our under mostly by such, markets XX% Brundage-Bone year As caused Pumping higher-than-normal to $XX.X segment brand attributable our a specifically U.S. quarter, rates, slowdown Texas general the pumps in Southeast interest throughout rainfall the in

We adverse impact approximately project weather caused revenue of million estimate delays. the that the of third quarter in $X

million operating Camfaud compared For year revenue quarter. under our the U.K. $XX.X in decreased to the to million X% operations, $XX.X prior brand,

due the rates. currency Excluding outweigh work volume-driven commercial higher did the foreign infrastructure a not in other to translation, interest revenue impact down from in Strength projects X% U.K.'s year-over-year. was slowdown

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

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

the million expenses quarter, same decreases have million cost are pleased million chain. labor that volume maintenance cost amortization Given to efficiency achieved and declines, of noncash $XXX,XXX. and $XX.X in $X General labor lower due include and ago preserved largely we of compared continued decreased third the repair margin, focus our in costs gross to our to on administrative year in to was and initiatives through expense the this and supply $XX.X quarter

in third Net prior percentage EBITDA compared quarter As same in of in or the Consolidated quarter, adjusted per the XX.X% revenue, quarter. approximately in but same compared in year XX%. year the was in $X.XX the available year-over-year shareholders compared was diluted share decreased quarter. to quarter ago were or adjusted million $X.X $XX.X million costs a margin the to consistent per million diluted EBITDA XX.X% third $X.X to the $XX.X to share third at year-ago income quarter million G&A common $X.XX to

prudently Our adjusted EBITDA manage to scale, the by offering ability and our of a of the we efforts specialty environment the ability margins our in value our team lower protect fleet benefits our have. service preserve to demand the shows to

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

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

At from XXXX, the debt a total debt the of million. which outstanding debt-to-EBITDA debt million of of includes $XXX.X or from Turning million in of XX, on $XXX quarter decrease leverage XX, nearly as our net approximately to million $XXX.X of ratio net facility. to had net liquidity July a second had XXXX, the we cash This and $XX July ABL liquidity. of quarter availability We XXXX equates to sheet balance and X.Xx. of third

our asset-based remain strong facility to overall no our XXXX. have As support senior maturing with in notes growth in position and debt near-term in a maturities XXXX strategy. we long-term We maturing a liquidity our reminder, lending

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

our remaining million we is current we average price $XX.X and X.X XXXX, share. to shares of per Since share. average or for long-term $X.XX through strategic we and and $X.XX value XXXX, have shareholder shares XXX,XXX of this March program program confidence $XX.X delivering approximately authorized has both an was plan. approximately third or the repurchased in believe common our growth share for During initiated, $X.X of of price repurchased demonstrates the quarter of our an million per commitment million The buyback our stock million

Moving our now full guidance. year XXXX into

restrictive and market. interest second had for fiscal half in an and our the end the we commercial While this environment, monetary rates, some has higher of in funding policy recovery longer weakened project has near-term XXXX, improved landscape demand a particularly expected driven

replacement least EBITDA we between As project cash end and cash $XXX million $XX paid our year now a million. and the fiscal be XXXX. and we flow, expect CapEx, for range We free revenue expect We with approximately which $XXX financial between less EBITDA are navigate as for lower less expect now range at ratio adjusting and outlook define adjusted Xx. to to to volumes, of million to million $XXX $XXX interest we adjusted leverage million net commercial

stems volumes utilization to equipment expected ability investments from and flex free our strong flow cash lower and optimize to demand. based ability on our Our CapEx drive

maintain we've over including the flexibility now previous to turn also call over that, our from acquisitions years, will the last fleet back is by X This made I supported sufficient With capacity in investments to Bruce. utilization.

Bruce Young

Iain. Thanks,

the our to quarter year. fiscal Turning of final

environment expect mentioned variable to current market given business we pumping be I concrete still As the our previously, conditions. demand in

[indiscernible] lower scale, optimized believe rates our has this for breadth as rise. we improved business interest of However, the and macro position recovery agility

by We favor our of business into new our encouraged are market development housing. demand The year believe infrastructure goes trends for will continue residential same underlying fiscal and imbalances performance in XXXX. as the

of the hold, the market end On growth cost equation, we improves. as side which -- to are take commercial cost growth should drive initiatives see beginning our margin control our

further long-term environment Our and projects. our as And equipment focus growth. does benefited sustained bottom to always, our as positioning than our opportunistic on maximize work business. to value-driven can on more rather approach operational is we end flexibility to growing deter top remains volume-based by focus market utilization not mix solely market pursue Today's optimizing line approach our and more

leverage. M&A expect over growth operator Shamali? while complement our like accretive to that, opportunistic Q&A. to I the the With continuing initiatives would call turn to our back organic still We strategically now for reducing by to evaluate

Operator

And the of our Baird. with Instructions] line Andy from comes [Operator first question Wittmann

Andrew J. Wittmann

on fourth taking also the Bruce, it fourth compare more I in is current the at revenue thought doing you're that of achieve wanted some quarter. what and to would seeing that's little other detail guess guidance hold if I EBITDA you're to line. revenue market the expense you taking helpful impact actions react than about of hear guess maintenance Are and quarter to you're And Or the isn't of those. deferring as stuff? conditions that that's you you that now, it I demand for also could to on and the us bit things, you more implied strong? up-to-date a of I look your recognizing And just the little some are still repair to EBITDA particularly, be I for the cost managing implied are today. staying to specifically structure. kind kind a mentioned, you're the dig taking When that address actions the bit units your among on that that. in to how

Bruce Young

Andy. to I we start same not standard on Thanks, them always have. Yes. our would We the with any deferring that maintenance assets. are we keep

on that a of better starting with labor job staying in to little a top We've purchasing We the a parts. of that deflation we've benefit parts that, better lot out in ago, of or managing so preventative which year started and job now a really of have front maintain of the done equipment better of that we're done that. see maintenance seen some we and to

an that done we are business, On revenue the to. very the and as while losing our challenging would markets to little of But we QX during that the been commercial start a analysis we turned losing summer sort pumps, be for time. during share just of Well, which for We're where use hope we that lot expected of on seeing with high-rise like them that might our of placing summer that period of that, summer side not specialty QX. be that where quite out that share react we equipment, period with to we awful booms, weather. quite has even projects market better the time. weather didn't improvement, thing. type share lot we're concerns We've us, in But had of what is are the disappointed come out with major a comfortable expected

or projects just near aren't getting meaning of either lot delayed we planned that would larger out those the expected a not have this at are are being all. summer, utilization of We're that that,

So of the seeing. some we're those that are things

are really of making strong recovery focused really we that business is on However, better for positioned markets. sure our the and the

Andrew J. Wittmann

the given just my guys And then weather -- That's it quarter, up? specifically I flat early helpful far that. trends 'XX and probably this next in think like, And maybe your it you'll you quarter, even for an just that after gross X they thinking is 'XX, talked you know for were you for do year, so margins could Regardless is up guys in planning that. I question, it you is But the guide year? fair quarters about down is color. overall, were mean, all the that appreciate that to probably more here, -- as margins a to for obviously, follow-up a I the feel think year. of outcome, what on 'XX be in about are

Bruce Young

for weather better so in to Well, and is an the on Yes. certainly, impact which of has as in work. margins one my more worst to our find be improve. ways with has where constantly better at you after slow seen we've years weather, which margins history we chasing you're just the not expect weather But that, much efficient, business, this you down, what be lengthy, markets becoming with do, to

improve will things those margins think time. we so the well as And over

We November there. then we're seeing similar Looking very of will up picking our softness starts which some half year. in XXXX, expect the to Building ABI, the what to forecast, be second Architectural And the at really seeing next things first now. and of Index start the hopefully, half towards the

Operator

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

Benjamin Luke McFadden

This is McFadden on Mulrooney. for Luke Tim

a September starts XX viewpoint the So even out rate They X the could going would pointed rate I towards your and of accommodative business here. impact more recent market. forward potential next also to future some early construction get likely projects just months? conditions guess that that Dodge how on from your to cuts just Curious from in make nonresidential starting improvement called here, signs cut data over

Bruce Young

question, for Thanks the Luke.

of get such load do and which still the the they they project, up stage. value in excavation they Dodge, the the before project the to other means things need with beginning all Now concrete to

gets we coming do to in our stage activity by concrete we see next some of see half bidding it that year. the While time project, the second into the of

Benjamin Luke McFadden

over here business? related it there can I provide the weather standpoint get you're the were utilization follow business from present just as of some on equipment you like utilization like But in on today. then It recent update Could from here And seems rates again relates color this seeing to rates. some saturation, if helpful. what up Very and quarter. just utilization to maybe headwinds last in an just those quarter a

Bruce Young

that. for Thanks

very are focused on utilization. We

around we runs with currently where XX%, utilization Our running be can XX%. as efficient utilization as high

to is opportunity we're looking of back right an that awful as we'll waiting a lot So sell markets getting few for that well. for at But the still our we as capacity fleet yes, machines to older around. it have come comes we're have

Iain Humphries

that. you've protect to lot Bruce flow, our what Yes. that about you've Luke, free talked for utilization seen we've thing and I'd the that add mentioned. this rates a mean, that's flow cash free I one year and seen, cash us

capacity we now. I in prepared mentioned remarks, So mean, as sufficient right in our fleet we have our

as you're a why this use have capacity to seeing that's because So in good investment of probably today. we utilization that lesser amount on sheet still the we balance focus year fleet

we see utilization obviously, then some as on fleet the with up So through extra we'll volumes, that see of come equipment. pick

Operator

Instructions] with [Operator the comes Thielman of D.A. Our question Brent next line from Davidson.

Brent Thielman

competitive seeing And to as are Bruce, oversaturation a conditions what of there? your pricing response start, to margins, equipment? I company guess, the just what's spirit you of your maybe bidding protecting of where in or out potentially this sort more

Bruce Young

Yes.

equipment in that from with the used Germany, our manufacturers, or So comes China the South either in Korea. industry the is all U.S.

expected we greater. the infrastructure be U.S. would I get with with years takes of ago, it as an commercial for equipment the and the several forecast the a to them couple so volumes that forecast planning of years And think, industry sold And bill into

that into competitors into are of did competitor of into out market. that those It the field. trying market. go are of get might Folks that ours those the ours hands oversaturation in of that become so or an creating did the And equipment the come equipment equipment to

with haven't year, there's been able market pricing pricing maintain that, of we've maintain service share as well, some to in we our to And focused sure that we're but this dealing we've with But market earlier, think a we're with pumping And concrete again, our with do this pressure the as mentioned dealt on making as we oversaturation. increase able been that to our it. we that I lot has pressure. year, share

Brent Thielman

Okay. I maybe few how the evolved projects environment of a over I a even back like coming more, potentially Appreciate interest what heard have guess Bruce. and few progression momentum. large moderated Bruce, there? than expand little last it on you that, you to some comment the sort I that demand particularly these it of thought of made sensitive some sectors, just and things a then sounds And months, Can this and thought the months even you're what ago. about you seeing losing rate

Bruce Young

Yes.

those we expect There's bidding lot and whether stage manufacturing have still EV going to beyond. and with that an of things anticipated. half the would So we large in at aren't plants, it's come the battery plants, awful the planning plants, things year rate chip second plants, next into

infrastructure working the be expect bill, on starting We're have we would more that, see activity that to of would get larger that infrastructure again, did projects also You we process little there. a the in currently. we that which

an I late think as our take more infrastructure substantial activity kind beyond. into this business, in we and of that we But industry, to -- that fairly year. us would year some on bidding are We expect next projects on do just

Brent Thielman

to slower the with in in of last -- industry any Got one, rate just sustain with Maybe activity. just overall of growth concern sort Eco-Pan it. ability your Bruce, guess

Bruce Young

an It's interesting question.

them. to using softer idea able Eco-Pan a and able the just they're to make people their maintain with we've strong same growth been largely what can with for environment, even the that cost in keep have more clean it fairly we show We efficient that been for sites as now

to replacing kind really any on of the showing people taking we're it prove we've of So that historical method an able been where type inefficient. benefit is revolutionizing business, pumping out to concrete while in not work, we're Eco-Pan new be in the industry industry

Operator

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

closing for remarks. Young

Bruce Young

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

Operator

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

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

Concrete Pumping (BBCP) 4 Sep 242024 Q3 Earnings call transcript