Concrete Pumping (BBCP) 7 Mar 242024 Q1 Earnings call transcript

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

Joining us today are Concrete Pumping Holdings CEO, Bruce Young; CFO, Iain Humphries; 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.

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

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

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

conditions first our experienced pleased continue in to deliver quarter, challenging double-digit Concrete U.S. everyone. operations you, Thank winter that revenue report projects a I'm our the and Management brought afternoon, although a Concrete standstill. Waste good we maintain the our Pumping growth to during of Cody, heavy month January, we in weather temperatures on basis. In and to freezing U.S. States many rainfall, growth and of snow consolidated the operations across U.K. Services and United

were As delayed volume concrete events closed. in a lowered approximately estimate We of projects such revenue expected result, were by work sites job million customers' $X pumping and many January. of weather our our the

has are closely normalized to However, with in accommodate more by our to recently working quarter, increased primarily returned Waste schedules. In accelerated U.K. the and continued operations. we by execution February driven customers levels, in Management in strong work consolidated revenue our Concrete X% first project

demonstrates and by for type. these revenues and their and of by these year-over-year, respectively, The strong performance fact, X XX% the In segments segments XX% of maintained by benefit our EBITDA margins. increased service diversification market adjusted end

million Additionally, at with $X market. despite our quarter, maintaining challenges approximately our to ABL balance improve sheet, this loan our strength by revolving $XXX balance pleased faced are by we million. Transitioning to we the of efforts our in ongoing reducing liquidity segments the while end

construction Texas, experience residential, is a grow, to trends From continue we quarter. within region construction prominent. residential among activity where dollars most see in strong supply-demand we that undersupplied which driving saw fourth demand and being single-family similar homebuilders. perspective, Mountain continues to the regions increased allocated represents the regional We levels structural development and imbalance our In

one. market this that elevated, new point, due see While of no home in we in slowing a the at versus remain purchasing signs interest rates this exists imbalance existing affordability to an

more the revenue project XXXX, rate will our we from We infrastructure, additional optimistic we to captured results drive that tailwinds. In footprint U.S. national with cuts expected public strong as in capture are investments. interest expanded continued

time aggressively is the pursue domestic In these infrastructure accelerated lines has HSX continue operate, capital develop at and U.S. particular, see plan more to We investment we across continues opportunities. energy-related to faster growth flowing government and and we numerous as to spending projects to U.K. where project funding. being to deployed

commercial and centers, demand distribution here remain electric manufacturing warehouses, the fabrication semiconductor strong, momentum plants in plants vehicle end and trends like be sensitivity concrete growing and Within battery in projects, comparatively banks to activity light regards reshoring interest projects from commercial smaller of underpinned rate to have larger some as market, by continues projects. pumping weaker commercial the reduced from financing stalled U.S. With the regional availability

second recovery XXXX to the continue half funding project expect We a backdrop in fiscal as improves. the of

performance into the impact a our from adverse to mix cost downstream business. experienced in persistent pressures to the addition our driven insurance rate ability largely but continued markets, QX recalibration end our labor and to margin. a conditions, to and that positive geographies The across by offset are margin continue anticipate expected headwinds of side flow headwinds weather Such we continued the of impact through first Turning we XXXX, margins in quarter continued inflationary drive expansion line our should all with revenue to over to bottom the time. throughout

right systems are details employees step some our are Iain? remarks. will attract and provide to value. I the Iain more let drive we shareholder to through and measures walk our concluding before financial rates results business to Our implementing return and in long-term to now of for recalibrate retain I

Management million and Bruce, good ago quarter. Waste across growth was $XX.X in operations. increase Services due the compared to quarter, Thanks, consolidated strong million and everyone. increased to afternoon, revenue first The same the In U.K. Concrete X% our to $XX.X year

stalled winter to decreased growth Concrete month January. Revenue Brundage-Bone offset in compared the weather experienced this to mostly States U.S. approximately across U.S. extreme severe by estimate of United in due winter in volume U.S. year million harsh As to the The the our Pumping mentioned, a under decrease segment, Concrete in and X% of $XX.X the primarily Pumping Bruce weather brand, in to revenue January. many temperatures freezing events $XX.X Pumping was customers' operating volumes due prior the work January decrease million projects. $X rainfall impacts as million weather was expected We of our the Concrete quarter. the our by lowered in in the

revenue For the improved our Camfaud in compared to U.K. under to million $XX.X million the quarter. year $XX.X ago operations, XX.X% operating same brand, largely

efficiencies. Revenue due Excluding margin related to weather-impacted inflationary and equipment result in expenses the lower a costs. General count a decreased and as operating pricing was increase year and Gross improvements January prior downstream as XX.X% increases XX% foreign increased brand, to the revenue was currency the up of and strong million head volume winter with from well hampered primarily ago administrative U.S. weather in quarter as XX% first lower driven to under segment, year Eco-Pan by quarter. compared being in inflation growth insurance was impact the consolidated quarter to rule utilization extreme year in million primarily the nonrecurring growth West our improvements, million increase results. weather. Returning margin $XX.X ago Waste our a the increase sales in result the dispute our due organic charge first a year-over-year. The and in and same to same revenue wage million compared pricing harsh to in The $XX.X Services operating compared head and primarily $XX.X Concrete quarter the change our a Management was to tax first of the seasonally rate notwithstanding the quarter. was to higher count translation, $XX region. in $X.X million quarter as XX.X% by winter The were

EBITDA same quarter Pumping million due same lower million U.S. the in $X.X in XX.X% U.S. loss compared first year the driven in to aforementioned as year adjusted from compared year revenue in shareholders same the $X.XX to quarter Again, the the per the compared ago ago common million Excluding available Adjusted quarter. same weather to condition million the ago to same the EBITDA adjusted an declined quarter. declines to charge, to ago In increased revenue labor $XX.X per quarter. to margin to insurance diluted to to same decreased compared year costs our G&A million a XX.X% and the to of impacts XX.X% year extreme percent million in in to EBITDA in increased XX.X% $XX decreased by $X.XX or million U.K. in $X.X quarter ago million Concrete first $XX.X compared the or and income to costs. In share our volume. Net slightly the adjusted share in Consolidated were million EBITDA net ago $X.X year business, diluted to EBITDA quarter. increase of the $X.X business, quarter compared $X first decreased quarter. in $XX.X XX.X%

to slightly impact the in For downstream U.S. $X.X decreased due weather our Concrete year Waste Services adjusted to business, EBITDA to winter $X.X compared utilization. quarter ago the labor on same Management million million

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

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

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

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

capacity XXXX will target remain of we flow, year-to-date to which million $XXX we fiscal year paid to fiscal and revenue This including investments utilization less given to of now our for and control we define to $XXX our adjusted that, I strategy. With and call a unchanged growth free call execute Moving back the least we solid at, our and turn in cash XXXX, between over The to revised investments Operationally our ability cash years, for guidance. less full to interest, the fleet. due $XXX and CapEx expectations have financially, the will foundation, have continue to reflects to weather-impacted adjusted age X million. as range acquisitions confidence Due million. year $XX EBITDA improve the range the and current have in Bruce. our CapEx replacement at our continuing now last net start fleet to between to previous over guidance in $XXX -- EBITDA the million million

value-driven we back In our we through us expected pumping utilization, will stronger and maintain year and February the approach momentum operations strategy with Iain. rate in interest performance. the opportunistic equipment we our and Services capital. enabling our that and under We evidenced a invested end optimistic capture and are of meantime, projects. In Thanks, optimistic U.S. in allows to remainder weather will various fleet Management Waste summary, reductions conditions on that starts the improve commercial return revenue to management half term, continued deliver by normalized the of our infrastructure near the pleased growth in our markets are Concrete to residential year U.K. work fiscal recover are continue the of as anticipate

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

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

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

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

comes from with of question first Wittmann Baird. The the Instructions] [Operator Andrew line

of first understand wanted guidance guess your the guess of so revision in to the bones probably I to about the I ] there's [ have year. I quarter. I been would reduction. that shortfall understand year magnitude in the mean the you much begin make have that thought the [ that the I would to with to given remaining, I $XX here. million up able ] guidance of is here the that

and So Or is that fiscal actually that it else know just your being guidance next year? in about? should is there purely something is timing we that into gets cut considered the pushed

Yes. the Andy, for thanks question.

projects conditions the many weeks because that bad is had the had of we So went that that weather their the our weather. we contractors X X beyond the that had or have concern of

with they're of while the out the we're labor starting of the remainder that little so a And start up of accelerate to these the year way. how now cautious play might and projects, lack on

So that to was that thought it address we best now.

it. Got

it they're helpful a substantially want that your starting more in-flight It projects? of little bit like understand. to have to guess, Okay. enough affecting kind that would in now projects? newly Is so -- on otherwise your weather it was from started, sounds affecting projects was or view? it don't and was not put delayed you affecting that been just like starting have that answer be there Or color I it

both. affects it so Yes, Yes.

pour currently in the projects we're that difficult it's weather extreme very conditions. So to concrete on,

And get excavation, delayed delayed placement the comes projects as the concrete and the gets conditions new concrete So weather the the gets after well. the because excavation of then because right delayed.

Okay. guys I I of M&A. my remarks. question, you a little guess bit your obviously, been with I your wanted have the M&A to outlook. heard I more on patient, prepared your comments for end at here ask But think, follow-up

Given buying. demand for from -- picture the There's the picture, environment, for be the that that been here might years. ramifications the past living of who people of we've in changes macro the you lots changes year couple the financing

the do there the in feel feel you being more you with Or M&A XX a like like patience certainty that getting is Bruce, you do still it's or guess, been more I can past -- visibility, is like feel you bit months? more start So -- maybe changing? than aggressive you've little

Certainly, little we Yes. get can more a aggressive.

the inflation, our their with I industry of about mostly their getting think family-owned margins rates have and ahead past talked of businesses affected what confidence in we've in severely. up lack been in

then So businesses at increase look aren't with to to of their bring those the as assets and us we value the of look that continuing we most price, at the the value assets. worth the in of value businesses

opportunity aggressively for on And shift waiting when really jump that's happen. so we're we're we'll But the looks one. at And it. to looking each that where right, certainly certainly

from of with Next question Davidson. D.A. Ramirez comes the line Jin

provide regarding Pumping some And Thielman. how remainder and a energy of can with follow-up, start This color as Jan start Brent for we should costs margins is Ramirez we'll quarter, guess, on Yes, after I'll your the outlook concrete inflection with I the -- about year? half. slow I on think question, the the the labor the you for first for segment? the U.S. first guess Concrete the

Yes.

I XX side of but So mentioned work the on lately, stability year through rest the and of it's offset things. We rate that it still on increases. through fuel through, we're than something rates. stable right less But that's there's have we'll as wage has Bruce mean But we working they're ago. labor that costs, recalibrating maybe on now. inflation was that the as quite been volatile months energy fuel the where the in relative

the On we quarters in remaining the U.S. original back margins pumping half a as on mentioned in we lot of initiatives. guidance, recovering our for this cost working are or year,

So that we and as well. we've U.S. to least seen to would past expect margins the back in expect to get that outperform at the

on the before, the better, least can more operating the you not margins of of the that that volume came year. the seen weather through, impacted So than in back the we've at QX if other was leverage half that from expect

more margins on Can 'XX fiscal providing do be year, around? or full full to you the year the expect mind color of terms greater that? a the just for we in little than year-end And

Yes.

it compatible. slow based the I with So be at updated weather on and start guidance, our mean, would the least

how And update these if I you and the Could -- on you've working an that could bidding one that more. the and environment provide you now large through won? right projects you're works

Yes.

many as don't we smaller larger you against on have the competing we're As projects. projects, as know, near with people

the active have same environment, it's in we it's projects, while seen on past. as larger And bid very much the what the so the commercial

of Stanley from line comes Elliott with question the Stifel. Next

back that, kind and level Just seeing cost? more year? projects, financing really the were go the you softness. bit of maybe because about at year. trying that of some lower get of not I'm certain of we're the a weakest fiscal little kind not of ] little types since seasonally you we're Is guys but to of full talk your part Could to and there said pointing decision a [ more color

that area commercial Yes. And response more regional to most and be entirely. as on more the projects and banks. certainly, challenging either we're shelved inflation sensitive The pushed with seeing caution there's have light relying interest is a or little rates our been out Those well. would that

as on for us And that so economy come that see are projects waiting improves, growth in well. new for give that sector there the visibility in opportunities we But has believe, we're back. And that then causing to commercial come will We're there. been as that Residential just the see will that that's it's very large growing. us, and stable we The stable, seeing fairly more are continuing. light that concern. projects and is infrastructure

still about now, And kind building business, talk can existing of a seem the imply sounds pretty and kind that you it have closing book like is the you're how working to that the some of that's You mentioned order you business where would been environment also of backlog the it -- maybe changed? strong, to activity through like of but is out.

changed. hasn't It's commercial of about seeing we softness commercial track business difficult That are as infrastructure and Yes, the that larger you can that is we're more the to XX% that's and the projects in. track backlog, really projects And our that's right. projects. remember, the light

you U.S. what decided the restatement in us bit little you to why business? talk it that you now. And a for? Why pumping piece the -- remind had was that about could again Exactly do

Yes.

So resources the all from looking -- across every year, allocation of segments. at Stanley, we're the

a adjustment growth allocate So really and of them really, business of true-up business the segment based those and have the central and our that is capital. within we resources on use

it's revised. So allocation of we've really that the that update

And out. I the frames your put are time know it kind for you exactly long what buyback? extends then of around plans how some lastly,

great. I would think being plan on the it context active? March do But Any be help you was for XXXX. more there

is we Obviously, stock like to our continue feel undervalued.

And some maybe we buy using use for the the equipment, that shares us. not if of reasonable or at we're is our values best of of it capital, businesses to the use capital think buying are

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

about Let's us for versus the start you for at kind with expectations your growth here. for like and growth between It looks midpoint. U.S. U.K. business concrete the is break calling X% your that your outlook revenue down guide Can of Eco-Pan?

Yes.

there And X% the at an organic we end, say would I volume that top price and it's expect or and What the at would share on on on the assumption growth price. capture on you So or flatter volume price that higher really beyond the that end. more more look and of be volume the end if side, to is lower X% the would range, side. on X% X% and midpoint, on is more

U.S. total for is the there? specifically, Iain? the that pumping Is business business that Or

north business Eco-Pan, mean for to has you the for That's been see What total U.K. the the XX% change of year-over-year. the -- can business. and as on Yes. Eco-Pan I year-over-year growing you expect know,

you growth, consistently least first quarter we've to we and continue year-over-year they the along Eco-Pan softer in guided the deal had continuing so quarter, move they as with. Obviously, at little weather a volume was on on -- a the for is nice mean expect organic double-digit growth to XX% in the that I had of at would U.K. that growth. to quite business. And see, The pace. the can based to

expect that's end moving year. So along, towards we of mean, back I would as the the

Okay.

for you in continued here year? a little other impacts. that mean, margins expect saw business, those the was businesses. sounds do On like that up year-over-year play real Eco-Pan? at but Eco-Pan I EBITDA I change remainder be to of from So the Or lower, no growth revenue there, there higher, was it are factors strong weather-related for

they've pumping impact to I Yes. in The to it where mean U.S. immune than of the was weather. business but QX, a really they're it downstream got not that. less sensitive impact

operating So utilization there's there's labor a softness effect little of just downstream the leverage that from difficult bit of weather. when in

Okay.

margin otherwise, accretion density, So that continue build continued expect though, business you to in you'd out as et cetera?

expect continued would sure. Eco-Pan the strong Yes, yes, Yes. on margins for we business,

your over you undisciplined Okay. promotability bit Cool. earnings one from rates recall industry you on carry take I see ] which little competitors, pricing this [ I think from higher. quarter? dynamic about call quarter Last fourth that some talking me, Did a to into

improving. carry We have it it seen some of but over, is

about go companies equipment up had did helps as out they looking aren't well. past, And we're as prices well more well. work as the they seeing certainly, in doing the being that As and how us -- what quite thoughtful them as

Next question Slavic from [Operator with of Yaro Instructions] comes line Avi the UBS.

Fisher. Steve for On

of the So around implications the from happened first down what the $X of Revenue a quarter understand some impact was in in pumping. I'm U.S. was million-ish to and about adjusted $X had -- weather, trying math EBITDA and million. the just kind

in first down anyways come of with didn't, the quarter? to it $X as As EBITDA expecting guys kind in we but be the Because roughly to margin. in high the expected expected that what you incremental be if for very like million year-over-year a was adjusted should were you segment margin that you for So regardless? considering like, sounds

to just there. understand trying missing something So if I'm

Yes.

volume interrupted of pumping forward. the the not for all, events, and business leverage. the that's mean, the to from I have I margin downstream going we obviously, reduces operating U.S. First effect mean, weather when expect

don't the I through said It's not the going forward. year. be if performance consistent, expect going like margin more of rest to earlier yes, that So improving,

we utilization and where the work, clearly, volume we of as it accelerate So our improves of leverage, improves operating people. we margin, our can get equipment which

improve. than the as normal -- And more effect and I the become and event QX more the the margin we run of amplified said, that will certainly, like efficient rate. is So

labor Yes. variable would in equipment the were And scheduled, and and that the is offset we and done on did But in that to what it of actually that still we January, supply. maintenance people I year repair that would we add through repair the total fuel costs and and it and have normal our But have just there because is to will cost. ultimately to was remainder do parts and the equipment it because the maintenance. variable

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

comments. Young for closing

Thank listening you our you, fiscal today's report results Ranju. We'd quarter look like we Thank to speaking thank to June. results we you. in and to call, everyone for forward when -- XXXX to second fiscal

this teleconference. concludes Thank you. gentlemen, and Ladies today's

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