Concrete Pumping Holdings Reports Third Quarter Fiscal Year 2021 Results

DENVER, Sept. 08, 2021 (GLOBE NEWSWIRE) -- Concrete Pumping Holdings, Inc. (Nasdaq: BBCP) (the “Company” or “CPH”), a leading provider of concrete pumping and waste management services in the U.S. and U.K., reported financial results for the third quarter ended July 31, 2021.

Third Quarter Fiscal Year 2021 Summary vs. Third Quarter of Fiscal Year 2020 (where applicable)

• Revenue increased 5% to $80.8 million compared to $77.1 million.
• Gross profit was $37.2 million compared to $37.8 million.
• Income from operations was $12.2 million compared to $10.8 million.
• Net income attributable to common shareholders improved to $4.1 million or $0.07 per diluted share, compared to a net loss attributable to common shareholders of $0.2 million or $0.00 per diluted share.
• Adjusted EBITDA1 was $28.4 million compared to $30.0 million, with adjusted EBITDA margin1 at 35.2% compared to 38.9%.
• Amounts outstanding under debt agreements was $375.0 million with net debt1 of $354.8 million. Total available liquidity increased to $142.2 million as of July 31, 2021 compared to $134.9 million as of April 30, 2021.

Management Commentary

“The third quarter was another testament to the strength and resilience of our proven business plan,” said Bruce Young, CEO of Concrete Pumping Holdings. “The Company delivered robust year over year revenue growth in the quarter notwithstanding the above average precipitation in some of our key markets like Texas and Colorado, and we were able to recapture some of the projects by quarter end.

“During the quarter, we also executed on our organic growth strategy by acquiring all the concrete pumping equipment of H.D. Construction Equipment in the Southern California market.  Most of these assets folded into our existing regional location, while the remaining were used to support our greenfield expansion into the Las Vegas market. In addition, we successfully acquired the assets of Hi-Tech Concrete Pumping Services at the beginning of September, enhancing our market share and service reach in the Houston metropolitan area which further strengthens our presence in Texas.

“As we enter the last quarter of our 2021 fiscal year, we continue to see strong demand for residential and infrastructure projects, and we are seeing the gradual return of commercial work as the economy recovers. While we are not immune to inflationary pressures or supply chain constraints that may delay other areas of the customers we serve, our team is doing a great job managing these challenges and meeting the needs of our customers. Overall, we remain committed to executing our strategic priorities and maximizing shareholder value for the rest of the year and beyond.”

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1 Adjusted EBITDA and net debt are financial measures that are not calculated in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). See “Non-GAAP Financial Measures” below for a discussion of the definition of any non-GAAP financial measures used in this release and a reconciliation to their most comparable GAAP measures.

Third Quarter Fiscal Year 2021 Financial Results

Revenue in the third quarter of fiscal year 2021 increased 5% to $80.8 million compared to $77.1 million in the third quarter of fiscal year 2020. The increase was primarily attributable to increased revenue from the Company’s U.K. Operations.

Gross profit in the third quarter of fiscal year 2021 was $37.2 million compared to $37.8 million in the year-ago quarter. Gross margin was 46.1% down from 49.0% in the prior year quarter, due to inflationary cost pressures, most notably around higher fuel costs.

G&A expenses for the fiscal 2021 third quarter were $25.0 million compared to $27.0 million in the fiscal 2020 third quarter. As a percent of revenue, G&A expenses were 30.9% for the fiscal 2021 third quarter compared to 34.9% in the fiscal 2020 third quarter. Excluding non-cash expenses of $6.7 million in amortization of intangible assets and $1.3 million in stock-based compensation expense, G&A expenses were down $0.4 million year-over-year to $17.0 million (21.1% of revenue) from $17.5 million (22.6% of revenue).

Net income attributable to common shareholders increased to $4.1 million or $0.07 per diluted share, compared to a net loss attributable to common shareholders of $0.2 million or $0.00 per diluted share.

Adjusted EBITDA in the third quarter of fiscal year 2021 was $28.4 million compared to $30.0 million in the year-ago quarter. Adjusted EBITDA margin was 35.2% compared to 38.9% in the prior year quarter.

Liquidity

On July 31, 2021, the Company had debt outstanding of $375.0 million, net debt of $354.8 million and total available liquidity of $142.2 million.

Segment Results

U.S. Concrete Pumping. Revenue in the third quarter of fiscal 2021 was $58.0 million compared to $58.6 million in the year-ago quarter. The slight decrease was attributable to above average rainfall affecting operations in Texas, Colorado, and Arizona. Net income in the third quarter improved to $1.8 million compared to net income of $0.9 million in the prior year quarter. Adjusted EBITDA was $18.4 million compared to $21.2 million in the year-ago quarter.

U.K. Operations. Revenue in the third quarter of fiscal 2021 increased 37% to $12.7 million compared to $9.2 million in the year-ago quarter. The increase was primarily driven by the segment’s recovery from the impacts of COVID-19. Net income in the third quarter improved to $0.4 million compared to a net loss of $0.0 million in the prior year quarter. Adjusted EBITDA improved 20% to $4.1 million compared to $3.4 million in the year-ago quarter.

U.S. Concrete Waste Management Services. Revenue in the third quarter of fiscal 2021 increased 8% to $10.1 million compared to $9.4 million in the year-ago quarter. The increase was due to organic growth and pricing improvements. Net income in the third quarter increased to $1.8 million compared to $1.7 million in the prior year third quarter. Adjusted EBITDA improved 10% to $5.3 million compared to $4.8 million in the year-ago quarter.

Fiscal Year 2021 Outlook

The Company continues to expect fiscal year 2021 revenue to range between $300.0 million to $310.0 million, Adjusted EBITDA to range between $105.0 million to $110.0 million, and free cash flow2 to range between $47.5 million and $52.5 million. The midpoint of the Company's free cash flow outlook implies a 10% yield to its current market capitalization of approximately $524 million.

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2 Free cash flow is a financial measure that is not calculated in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). See “Non-GAAP Financial Measures” below for a discussion of the definition of any non-GAAP financial measures used in this release and a reconciliation to their most comparable GAAP measures.

Conference Call

The Company will hold a conference call today at 5:00 p.m. Eastern time to discuss its third quarter 2021 results.

Date: Wednesday, September 8, 2021Time: 5:00 p.m. Eastern time (3:00 p.m. Mountain time)Toll-free dial-in number: 1-877-407-9039International dial-in number: 1-201-689-8470Conference ID: 13722482

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 1-949-574-3860.

The conference call will be broadcast live and available for replay at here and via the investor relations section of the Company’s website at www.concretepumpingholdings.com.

A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through September 29, 2021.

Toll-free replay number: 1-844-512-2921International replay number: 1-412-317-6671Replay ID: 13722482

About Concrete Pumping Holdings

Concrete Pumping Holdings is the leading provider of concrete pumping services and concrete waste management services in the fragmented U.S. and U.K. markets, primarily operating under what we believe are the only established, national brands in both geographies – Brundage-Bone for concrete pumping in the U.S., Camfaud in the U.K., and Eco-Pan for waste management services in both the U.S. and U.K. The Company’s large fleet of specialized pumping equipment and trained operators position it to deliver concrete placement solutions that facilitate labor cost savings to customers, shorten concrete placement times, enhance worksite safety and improve construction quality. Highly complementary to its core concrete pumping service, Eco-Pan seeks to provide a full-service, cost-effective, regulatory-compliant solution to manage environmental issues caused by concrete washout. As of July 31, 2021, the Company provided concrete pumping services in the U.S. from a footprint of approximately 90 locations across 19 states, concrete pumping services in the U.K. from approximately 30 locations, and route-based concrete waste management services from 16 locations in the U.S. and 1 shared location in the U.K. For more information, please visit www.concretepumpingholdings.com or the Company’s brand websites at www.brundagebone.com, www.camfaud.co.uk, or www.eco-pan.com.

Forward‐Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ from expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” “outlook” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to future performance, including the Company's fiscal year 2021 outlook. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the Company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: the impacts on the Company related to its recent accounting restatement, material weakness in internal control over financial reporting and the assessment of complex accounting issues, as disclosed in the Company's From 10-K/A filed with the Securities and Exchange Commission (the "SEC") on June 11, 2021 (The "Amended 10-K"); the impacts of the COVID-19 pandemic and related economic conditions on the Company; the outcome of any legal proceedings or demand letters that may be instituted against or sent to the Company or its subsidiaries; the ability of the Company to grow and manage growth profitably and retain its key employees; the ability to complete targeted acquisitions and realize the expected benefits from recent acquisitions, including the Company’s acquisition of the assets of Hi-Tech Concrete Pumping Services described above; changes in applicable laws or regulations; the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission, including the risk factors in the Company's latest Annual Report on Form 10-K, the Amended 10-K, and Quarterly Reports on Form 10-Q. The Company cautions that the foregoing list of factors is not exclusive. The Company cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.

Non-GAAP Financial Measures

Adjusted EBITDA is a financial measure that is not calculated in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). The Company believes that this non-GAAP financial measure provides useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company’s management also uses this non-GAAP financial measure to compare the Company’s performance to that of prior periods for trend analyses, determining incentive compensation and for budgeting and planning purposes. Adjusted EBITDA is also used in quarterly and annual financial reports prepared for the Company’s board of directors. The Company believes that this non-GAAP measure provides an additional tool for investors to use in evaluating the Company’s ongoing operating results and in comparing the Company’s financial results with competitors who also present similar non-GAAP financial measures.

Adjusted EBITDA is defined as net income calculated in accordance with GAAP plus interest expense, income taxes, depreciation, amortization, transaction expenses, loss on debt extinguishment, stock-based compensation, other income, net, and other adjustments. Adjusted EBITDA is not pro forma for acquisitions. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by total revenue for the period presented. See below for a reconciliation of Adjusted EBITDA to net income (loss) calculated in accordance with GAAP.

Net debt is calculated as all amounts outstanding under debt agreements (currently this includes the Company’s term loan and revolving line of credit balances, excluding any offsets for capitalized deferred financing costs) measured in accordance with GAAP less cash. Cash is subtracted from the GAAP measure because it could be used to reduce the Company’s debt obligations. A limitation associated with using net debt is that it subtracts cash and therefore may imply that there is less Company debt than the most comparable GAAP measure indicates. CPH believes this non-GAAP measure provides useful information to management and investors in order to monitor the Company’s leverage and evaluate the Company’s consolidated balance sheet. See “Non-GAAP Measures (Reconciliation of Net Debt)” below for a reconciliation of Net Debt to amounts outstanding under debt agreements calculated in accordance with GAAP.

Free cash flow is defined as Adjusted EBITDA less net capital expenditures and cash paid for interest. This measure is not a substitute for cash flow from operations and does not represent the residual cash flow available for discretionary expenditures, since certain non-discretionary expenditures, such as debt servicing payments, are not deducted from the measure. CPH believes this non-GAAP measure provides useful information to management and investors in order to monitor and evaluate the cash flow yield of the business.

The financial statement tables that accompany this press release include a reconciliation of Adjusted EBITDA, net debt and free cash flow to the applicable most comparable U.S. GAAP financial measure. However, the Company has not reconciled the forward-looking Adjusted EBITDA guidance range and free cash flow range included in this press release to the most directly comparable forward-looking GAAP measures because this cannot be done without unreasonable effort due to the lack of predictability regarding the various reconciling items such as provision for income taxes and depreciation and amortization.

Current and prospective investors should review the Company’s audited annual and unaudited interim financial statements, which are filed with the U.S. Securities and Exchange Commission, and not rely on any single financial measure to evaluate the Company’s business. Other companies may calculate Adjusted EBITDA, net debt and free cash flow differently and therefore these measures may not be directly comparable to similarly titled measures of other companies.

As a result of the business combination between our predecessor, Industrea Acquisition Corp., and the private operating company formerly called Concrete Pumping Holdings, Inc. (the “Business Combination”), the Company is the acquirer for accounting purposes and CPH is the acquiree and accounting predecessor. The Company’s financial statement presentation distinguishes the Company’s presentations into two distinct periods, the period up to the Business Combination closing date (labeled “Predecessor”) and the period including and after that date (labeled “Successor”). The Business Combination was accounted for as a business combination using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting that is based on the fair value of the net assets acquired. As the underlying business and financial results of the Successor and Predecessor entities are expected to be largely consistent, excluding the impact on certain financial statement line items that were impacted by the Business Combination, management has combined the fiscal year 2019 results of the Predecessor and Successor periods for comparability in certain tables below. Accordingly, in addition to presenting our results of operations as reported in our consolidated financial statements in accordance with GAAP, the tables below present the non-GAAP combined results for the fiscal year 2019.

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1 Adjusted EBITDA is a financial measure that is not calculated in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). See “Non-GAAP Financial Measures” below for a reconciliation of such measure to its most comparable GAAP measure.