crete Pumping (US:BBCP)2022-03-09 16:00Revenue Growth - For the three months ended January 31, 2022, the company's revenue increased by 21.3% year-over-year to $85.4 million, compared to $70.4 million in the same period of 2021[145]. - The U.S. Concrete Pumping segment revenue rose by 20.6%, or $10.8 million, primarily due to acquisitions and organic growth, reaching $63.1 million[151]. - The U.K. Operations segment revenue increased by 22.9%, or $2.2 million, driven by recovery from COVID-19 impacts, totaling $12.0 million[152]. - The U.S. Concrete Waste Management Services segment saw a revenue increase of 24.2%, or $2.0 million, attributed to organic growth and pricing improvements, reaching $10.5 million[153]. Profitability - Gross profit for the first quarter of fiscal 2022 was $34.1 million, with a gross margin of 39.9%, down from 42.4% in the prior year due to inflationary pressures[145][155]. - Net income for the first quarter of fiscal 2022 was $1.2 million, a significant improvement from a net loss of $12.3 million in the same period last year[146]. - Adjusted EBITDA for U.S. Concrete Pumping segment was $15.2 million in Q1 fiscal 2022, slightly down from $15.3 million in Q1 fiscal 2021, despite a 20.6% revenue increase due to higher fuel and labor costs[165]. - Adjusted EBITDA for U.K. Operations improved to $3.3 million in Q1 fiscal 2022 from $2.7 million in Q1 fiscal 2021, driven by revenue growth[166]. - U.S. Concrete Waste Management Services segment saw a 32.7% increase in Adjusted EBITDA to $4.9 million in Q1 fiscal 2022 from $3.7 million in Q1 fiscal 2021, attributed to strong revenue growth[167]. Cash Flow and Liquidity - Net cash provided by operating activities was $13.2 million for Q1 fiscal 2022, with a net income of $1.2 million and non-cash charges totaling $16.0 million[177]. - The company used $34.5 million for investing activities in Q1 fiscal 2022, primarily for property, plant, and equipment purchases totaling $35.4 million[178]. - Net cash provided by financing activities was $14.7 million in Q1 fiscal 2022, mainly from $15.2 million in net borrowings under the ABL Facility[179]. - As of January 31, 2022, the company had $2.8 million in cash and cash equivalents and $105.2 million in available borrowing capacity under the ABL Facility, totaling $108.0 million in liquidity[170]. Debt and Compliance - The outstanding principal amount of Senior Notes was $375.0 million as of January 31, 2022, with the company in compliance with all covenants[174]. - The ABL Facility had an outstanding balance of $16.2 million as of January 31, 2022, with the company also in compliance with all debt covenants[175]. Strategic Acquisitions - The company completed strategic acquisitions, including Pioneer Concrete Pumping Service for $20.1 million and Hi-Tech Concrete Pumping Services for $12.3 million, enhancing its market presence[134]. - The company plans to utilize cash and a revolving line of credit for opportunistic M&A to enhance its value proposition[132]. Impact of COVID-19 - The company continues to evaluate the impact of COVID-19 on its operations, with ongoing uncertainties affecting labor resources and market conditions[140]. - Impairment charges were primarily due to COVID-19, which negatively impacted market capitalization and increased the discount rate used in DCF models[197]. Accounting and Taxation - The company will no longer be classified as an emerging growth company as of October 31, 2022, and will adopt new accounting standards accordingly[188]. - The company emphasizes that its financial results may not be comparable to those of non-emerging growth companies due to its previous election to delay the adoption of new accounting standards[188]. - The company is subject to income taxes in multiple jurisdictions, requiring significant judgment in determining tax provisions[198]. - Deferred tax assets and liabilities are based on differences between financial statement balances and tax bases, using enacted tax rates for the year of reversal[199]. Goodwill and Fair Value - The company evaluates goodwill for possible impairment annually, generally as of August 31st, using a two-step process that includes qualitative and quantitative assessments[191]. - Fair value determinations are sensitive to changes in underlying assumptions, including projected revenue and market factors, particularly due to the impact of COVID-19[192]. - The estimated fair value of reporting units is determined using a discounted cash flow (DCF) model and a market approach, with significant assumptions regarding future operating performance and economic conditions[193]. - The DCF model relies on expected future after-tax operating cash flows, discounted using a risk-adjusted discount rate based on the weighted average cost of capital (WACC)[195]. - The guideline public company (GPC) method estimates value using multiples derived from publicly traded companies, requiring careful selection of comparable companies[196].