Concrete Pumping Holdings (NASDAQ:BBCP) Q2 2026 Earnings Call

0:00 Good afternoon, everyone, and thank you for participating in today's conference call to discuss Concrete Pumping Holdings financial results for the second quarter ended 04/30/2026. Joining us today are Concrete Pumping Holdings' CEO, Bruce Young CFO, Ian Humphries and the company's External Director of Investor Relations, Cody Slaw. Before we go further, I would like to turn the call over to Mr. Slaw to read the company's Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act

0:32 of 1995 that provides important cautions regarding forward looking statements. Cody, please go ahead. Thank you. I'd like to remind everyone that during this call, to give you a better understanding of our operations, we will be making certain forward looking statements regarding our business and outlook. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Concrete Pumping Holdings annual report on Form 10 ks, quarterly report on Form 10 Q and other publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward looking statements, whether because of new information, future events or otherwise.

1:20 On today's call, we will also reference certain non GAAP financial measures, including adjusted EBITDA, net debt and free cash flow, which we believe provide useful information for investors. We provide further information about these non GAAP financial measures and reconciliations to the comparable GAAP measures in our press release issued today or the investor presentation posted on the company's website. I'd like to remind everyone that this call will be available for replay later this evening. A webcast replay will also be available via the link provided in today's press release as well as on the company's website. Additionally, we have posted an updated investor presentation to the company's website. Now I'd like to turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

2:06 Thank you, Cody, and good afternoon, everyone. We were pleased with our strong second quarter with revenue increasing 14% year over year and adjusted EBITDA growing 17%, driven by continued momentum across our U. S. Operations, disciplined operational execution throughout the organization and favorable end market activity in several of our key geographies. This quarter was also highlighted by the early April closing on the TEM Plant Hire acquisition in The UK. Importantly, this acquisition represents an important step in executing our strategy to build a diversified multi service platform supporting the construction and infrastructure sectors. Templant is a high quality business with strong leadership, and we see clear opportunities to accelerate growth and provide long term sustainable value for our shareholders.

3:00 Returning to our execution in the second quarter, our performance was led by continued strength in commercial and infrastructure construction activity across a wide variety of industries, including education, healthcare, energy, infrastructure and of course, centers. Growth across these projects, particularly in data centers, remains healthy and continues to support improved utilization levels throughout our U. S. Concrete Pumping and Eco Pan operations. In addition to the growing data center activity, we are also seeing solid demand across public infrastructure related projects, including roads, bridges and education construction. Overall, the environment for larger scale commercial and infrastructure projects remains exciting and continues to play into our competitive advantage as the largest concrete pumping service provider in The U. S.

3:50 We also benefited from generally favorable weather conditions across our U. S. Markets during the first half of the year, which supported improved activity levels compared to the prior year period. Combined with continued price discipline and solid operational execution, these factors contributed to a strong margin performance and another quarter of healthy free cash flow generation. Outside of these areas of strength, broader construction trends remain relatively consistent with what we had discussed last quarter. Heavy commercial activity continues to hold up reasonably well, while more interest rate sensitive segments, including office and portions of light commercial construction, remain subdued as customers continue to navigate elevated finance cost and economic uncertainty.

4:37 Residential construction activity also remains challenged. Elevated mortgage rates and affordability pressures continue to weigh on new home construction activity. And while we continue to believe the long term housing fundamentals remain favorable, near term demands remain soft. Infrastructure activity in The U. S. Continues to be generally strong as the underlying bidding environment and project activity remained healthy, particularly across larger scale and longer duration projects. Our Eco Pan concrete waste management services business again delivered a strong quarter, continuing to benefit from healthy underlying construction activity, pricing execution and ongoing penetration into new customer accounts. Eco Pan remains a highly complementary service offering to our concrete pumping operations and continues to demonstrate active through cycle characteristics.

5:31 Turning to our UK operations, market conditions remain more challenging. Elevated interest rates, inflationary pressures and broader economic uncertainty continue to impact commercial construction activity, while public infrastructure funding dynamics also remain less favorable than what we experienced in The U. S. Despite these conditions, infrastructure related activity in areas such as energy projects and HS2 construction remains relatively resilient, and we continue to focus on disciplined cost management and operational execution within the region. We are also pleased with the progress of our recent strategic acquisitions, including our Republic Of Ireland expansion and entry into The UK temporary power market.

6:17 While the near term acquisition revenue contribution remains modest, we are encouraged by the

6:22 strategic positioning these investments provide and the opportunities they create to further expand our platform and grow organically over time. Overall, we are encouraged by our first half performance, and we believe the second quarter further demonstrates the strength of our operating model, our disciplined execution and the benefits of our scale and marketing position. As a result of our performance and current market trends, we are raising our full year outlook while remaining focused on operational discipline, free cash flow generation and long term value creation. I will now turn the call over to Ian to walk through the financials results in more detail. Ian? Thanks Bruce and good afternoon everyone. Moving directly into our second quarter results. Revenue increased 14% to 106,800,000 compared to $94,000,000 in the prior year quarter.

7:14 The increase was driven by higher U. S. Commercial and infrastructure activity, particularly related to large scale data center and infrastructure projects along pricing improvements, organic volume growth in Eco Pan and generally more favorable weather conditions across our U. S. Markets. Revenue in our U. S. Concrete Pumping segment, which operates primarily under the Brundage Bone brand increased 15% to $71,500,000 compared to $62,100,000 in the prior year quarter. Commercial and infrastructure activity benefited from continued strength in large scale projects including data centers, roads, bridges, education, warehousing and energy related projects. These gains were partially offset by continued softness in light commercial construction and subdued residential demand due to elevated interest rates and broader economic uncertainty.

8:09 Revenue in our Concrete Waste Management Services segment operating under Eco Pan brand increased 13% to $20,300,000 compared to $18,100,000 in the prior year quarter. Growth was driven by organic volume increases, continued penetration into new customer accounts and pricing improvements, reflecting the continued strength and scalability of the business. Turning to our UK operations, revenue increased 8% to $14,900,000 compared to $13,800,000 in the prior year quarter. Excluding the 600,000 beneficial impact of foreign currency translation and the $1,400,000 contribution from recent acquisitions, underlying commercial construction activity remained soft amid elevated interest rates, inflationary pressures and economic uncertainty in The UK.

9:00 At a consolidated level, second quarter gross margin increased modestly to 38.6% compared to 38.5% in the prior year quarter. Strong revenue growth and pricing execution helped offset continued inflationary pressures, including higher repair and maintenance costs, wear part inflation and the impact of tariffs on certain replacement parts. General and administrative expenses increased to $29,200,000 compared to $27,900,000 in the prior year quarter. However, as a percentage of revenue, G and A improved to 27.3% compared to 29.7% in the prior year quarter, reflecting continued operating leverage and disciplined cost management.

9:48 Net income attributable to common shareholders in the second quarter increased to $2,100,000 or $04 per diluted share compared to a net loss of $400,000 or $01 per diluted share in the prior year quarter. Consolidated adjusted EBITDA increased 17% to $26,400,000 compared to $22,500,000 in the year ago quarter. Adjusted EBITDA margin improved 80 basis points to 24.7% from 23.9% and the increase was primarily driven by higher revenue and improved operating leverage. Within our U. S. Concrete Pumping business, adjusted EBITDA increased 23% to $15,600,000 compared to $12,700,000 in the prior year quarter.

10:36 In The UK business, EBITDA was $3,100,000 compared to $3,200,000 reflecting inflationary pressures in labor, fuel and repair maintenance costs. In our U. S. Concrete Waste Management Services business, adjusted EBITDA increased 16% to $7,700,000 driven by strong operating leverage on higher volumes and pricing. Turning to liquidity, as of 04/30/2026, total debt outstanding was $425,600,000 with net debt of $386,900,000 representing a net leverage ratio of approximately 3.8 times adjusted EBITDA. We ended the quarter with approximately 3 and $46,300,000 of available liquidity, which includes cash on hand and availability under our ABL facility and provides substantial financial flexibility.

11:31 Regarding capital allocation, during the second quarter, we repurchased approximately 392,000 shares for $2,600,000 at an average price of $6.68 per share. Since initiating the program in 2022, we have repurchased approximately 5,900,000 shares for $38,100,000 with $11,900,000 remaining under the current authorization through December 2026. We continue to view the share repurchase program as a flexible and opportunistic use of capital. Turning to our outlook for fiscal twenty twenty six and based on our strong first half performance and continued momentum across our U. S. Operations, we are raising our full year revenue outlook to a range of $410,000,000 to $425,000,000 compared to our prior range of $390,000,000 to $410,000,000 We are also raising our adjusted EBITDA outlook to a range of $98,000,000 to $105,000,000 from a prior range of 90,000,000 to $100,000,000 And lastly, we are also increasing our free cash flow expectation to be at least $45,000,000 from our prior expectation of approximately $40,000,000 While we remain encouraged by activity levels in large scale commercial and infrastructure projects, particularly data center related activity, it is important to note that we began experiencing accelerated growth from these projects during the third quarter of last year.

13:03 As a result, we expect year over year comparisons to reflect some tempered growth during the second half of fiscal twenty twenty six. In addition, based on our first half performance and current project visibility, we expect revenue and adjusted EBITDA seasonality during fiscal twenty twenty six to be more balanced relative to historical trends, with revenue expectations to show about a 47% and a 53% split compared to our traditional 4555% split. Importantly, our outlook continues to assume no meaningful recovery in the broader residential or light commercial construction activity during fiscal twenty twenty six. We expect free cash flow defined as adjusted EBITDA less net replacement CapEx and less net cash paid for interest to be at least $45,000,000 This outlook assumes approximately $23,000,000 of net replacement CapEx and $32,000,000 of net cash paid for interest and this excludes the accelerated CapEx pulled forward from fiscal twenty twenty six.

14:08 Our balance sheet and liquidity position comfortably support this investment strategy. We remain committed to a disciplined capital deployment, maintaining leverage within our target range and prioritizing returns on invested capital. We believe we are well positioned to strengthen our service offering in anticipation of a market recovery. With that, I will now turn the call back over to Bruce. Thanks, Ian. As we move through the remainder of fiscal twenty twenty six, we remain encouraged by the momentum we are seeing across the business and the continued resilience of our U. S. Markets. While broader construction activity remains mixed, particularly in residential and certain commercial segments, demand tied to large scale infrastructure and commercial projects continues to support healthy activity levels across our platform.

14:58 Our focus remains on disciplined execution, operational efficiency, pricing discipline and strategic capital allocation. We believe the actions we have taken over the past several years to strengthen the business, optimize the fleet and maintain financial flexibility continue to position us well to perform across varying market conditions.

15:20 We are also pleased with the progress we are making on our strategic growth initiatives, including investing in our fleet and recent acquisitions that expand our geographic reach and service capabilities. Combined with our strong balance sheet and continued free cash flow generation, we believe we remain well positioned to invest in the business, pursue disciplined growth opportunities and continue creating long term shareholder value. With that, I would now like to turn the call back over to the operator for Q and A. Paul? Thank you. Well, now we can open a question and answer session. Session.

16:20 Our first question is from Sam Cusworth with William Blair. Hey, thanks for taking our questions. Bruce, Ian, first, congrats on the really strong quarter. That was great to see. In your prepared remarks, you pointed to data centers as kind of being a big contributor to that. I guess I wanted to ask what percent of your revenue are you currently generating from data centers today and how that compares to both this time last year as well as you think it can land maybe next year or even by the end of the year?

16:55 Yeah, hi Sam, good question. So you might remember last year the data center activity was quite slow to grow in the first half of the year. So we're probably doing maybe 4% or 5% of our work on either chip plants or data center in the first half of last year. And you probably heard in our prepared remarks that that grew quite nicely through the back half of last year. Today between data centers and chip plant work, we're probably doing 10% to 12% of revenue on that type of work. So there's been some nice growth acceleration. And obviously, as we mentioned, consistent weather really helps with the continuity of that work and execution. Got it. That's very helpful. Obviously, contributed to the top line, but I also wanted to ask regarding your margins, they also took a pretty nice step up.

17:47 I was wondering if this is really just due to better leverage on your fleets or if the data center work itself carries a higher margin. Could you maybe just compare that margin for that type of work versus your other commercial work as well as maybe against residential and infrastructure?

18:04 Yes, sure. So on the margin front, you're right. With improved volume comes improved operating leverage through the better utilization of our fleet. I mean as you all know a lot of this work tends to be in remote locations. So it is especially in nature requiring longer equipment. So the pricing reflects that, which helps the margin profile. But again, it's underpinned by a lot of the work that we've done in prior years on that cost base and some real operational discipline to make sure that we can get the right pricing and margin profile. I mean, you heard in our prepared remarks, there's still a challenge around inflation, but the team has done a really nice job getting the pricing right on these projects and making sure we can optimize the operating leverage of the execution that we're delivering.

18:55 Got it. Okay. Appreciate all the color guys. Thanks. Thanks, Our next question is from Rohan Vossadeva with Baird. Yes, guys. Thanks for taking my question. I think my last question was taken, but I wanted to talk about the acquisition of Templant. Could you talk about the multiples you guys paid for it? And Templant looks to be a bit different than the traditional quarter. Can talk about EBITDA margin and the mix benefit from that acquisition? Yes. So while we don't give the multiple out, it's consistent with what we would have been paying for acquisitions of concrete pumps into the future. Now with The U. K. Being soft with commercial market, and we have a really good team of people over there, we looked out to other areas. With the last call, we talked about going into Ireland and expanding our footprint into there with some opportunities there.

19:52 We see this TAM plant as an opportunity to leverage the service side of the temporary power business. We have really strong leadership in that business that fits very well with us. And we do expect to be able to rapidly grow the temporary power business in The U. K. Going forward. Got it. Thank you. And then my second one was, you had the approval for the $22,000,000 of planned investments that you can pull forward in 2027. But you haven't incurred any of that. Should we expect that all $22,000,000 will happen in the second half? Or could you give some more color around the cadence of those investments? Yes, we're still working on that. Now we are trying to move forward as much equipment into this year and maybe even later next year, at least buying the chassis so that we I think we've talked on calls in the past about the complications of the new emissions and reliability and getting the type of horsepower we need to run our big units.

20:54 We're fearful that, that will take a little while for them to run that out. So we're trying to pull forward as much of that as we possibly can. We're still trying to sort through how much of that will fall into this year and how much will fall into next year. We'll have more color on that on our when we announce in Q3. Thank you. You. There are no further questions at this time. I would like to hand the floor back over to Bruce Young for any closing remarks. Thank you, Paul. We'd like to thank everyone for listening to today's call, we look forward to speaking with you when report our third quarter results in September. Thank you. Ladies and gentlemen, this does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.