crete Pumping (BBCP) - 2024 Q2 - Quarterly Results

Overall Performance and Outlook Second Quarter Fiscal Year 2024 Financial Highlights Concrete Pumping Holdings reported nearly flat revenue in Q2 FY2024, while net income and Adjusted EBITDA declined, yet total available liquidity significantly increased Q2 FY2024 Key Financial Metrics (vs. Q2 FY2023) | Metric | Q2 FY2024 | Q2 FY2023 | | :--- | :--- | :--- | | Revenue | $107.1 million | $107.8 million | | Gross Profit | $41.8 million | $43.5 million | | Income from Operations | $12.1 million | $13.2 million | | Net Income | $3.0 million | $5.6 million | | Diluted EPS | $0.05 | $0.09 | | Adjusted EBITDA | $27.5 million | $28.8 million | | Adjusted EBITDA Margin | 25.7% | 26.7% | - Total available liquidity significantly increased to $216.9 million as of April 30, 2024, compared to $100.4 million in the prior year[1] - As of April 30, 2024, the company had $391.4 million in outstanding debt and net debt of $373.5 million[1] Management Commentary Management highlighted strong growth in waste management offsetting concrete pumping declines due to project delays and weather, while remaining optimistic about full-year revenue and free cash flow - The U.S. Concrete Pumping segment experienced a volume decline due to delayed commercial work and above-average rainfall in Texas and the southwestern U.S[2] - Infrastructure project revenue increased by 14% year-over-year, believed to be driven by federal and state funding from the Infrastructure Investment and Jobs Act[2] - The Concrete Waste Management business continued its strong performance, with revenue growing 19% due to increased market share and improved pricing[3] - The company is positioned to deliver full-year revenue growth and maintain its free cash flow outlook, aiming to achieve its target leverage ratio[4] Fiscal Year 2024 Outlook The company updated its FY2024 guidance, projecting revenue between $455.0 million and $465.0 million, Adjusted EBITDA of $120.0 million to $125.0 million, and maintaining its free cash flow outlook Fiscal Year 2024 Guidance | Metric | Expected Range/Target | | :--- | :--- | | Revenue | $455.0M - $465.0M | | Adjusted EBITDA | $120.0M - $125.0M | | Free Cash Flow | At least $75.0M | | Leverage Ratio (by Oct 31, 2024) | ~2.75x | Detailed Financial Results Consolidated Financial Performance Consolidated revenue slightly decreased to $107.1 million in Q2 FY2024, leading to declines in gross profit, net income, and Adjusted EBITDA, primarily due to U.S. Concrete Pumping slowdown - Q2 revenue decreased slightly to $107.1 million, impacted by a slowdown in commercial construction, market oversaturation of pumps, and poor weather, offset by strong growth in Concrete Waste Management[5] - Gross margin decreased to 39.0% from 40.3% in the prior year quarter, primarily due to lower revenue and labor utilization in U.S. Concrete Pumping and increased insurance costs[6] - General and administrative (G&A) expenses decreased to $29.7 million from $30.2 million, mainly due to lower amortization expense and stock-based compensation[6] - Net income attributable to common shareholders was $2.6 million, or $0.05 per diluted share, compared to $5.2 million, or $0.09 per diluted share, in the prior year quarter[7] Segment Performance Q2 2024 segment performance was mixed, with U.S. Concrete Pumping revenue declining, U.K. Operations showing modest growth, and U.S. Concrete Waste Management Services achieving strong revenue and Adjusted EBITDA increases U.S. Concrete Pumping The U.S. Concrete Pumping segment experienced a 5% revenue decrease to $74.6 million in Q2 2024, resulting in a net loss and lower Adjusted EBITDA due to volume declines U.S. Concrete Pumping Q2 Performance (vs. Q2 2023) | Metric | Q2 FY2024 | Q2 FY2023 | | :--- | :--- | :--- | | Revenue | $74.6 million | $78.4 million | | Net Income (Loss) | ($1.0 million) | $0.8 million | | Adjusted EBITDA | $17.2 million | $19.3 million | U.K. Operations U.K. Operations saw a 2% revenue increase to $15.5 million, with net income growing 11% and Adjusted EBITDA rising 8% due to improved rates and fuel prices U.K. Operations Q2 Performance (vs. Q2 2023) | Metric | Q2 FY2024 | Q2 FY2023 | | :--- | :--- | :--- | | Revenue | $15.5 million | $15.2 million | | Net Income | $1.0 million | $0.9 million | | Adjusted EBITDA | $4.1 million | $3.8 million | U.S. Concrete Waste Management Services U.S. Concrete Waste Management Services achieved strong performance with a 19% revenue increase to $16.9 million, leading to an 11% rise in net income and an 8% increase in Adjusted EBITDA U.S. Concrete Waste Management Q2 Performance (vs. Q2 2023) | Metric | Q2 FY2024 | Q2 FY2023 | | :--- | :--- | :--- | | Revenue | $16.9 million | $14.2 million | | Net Income | $3.0 million | $2.7 million | | Adjusted EBITDA | $6.2 million | $5.7 million | Liquidity and Financial Position As of April 30, 2024, the company maintained a strong liquidity position with $216.9 million available, total debt outstanding of $391.4 million, and net debt of $373.5 million Liquidity and Debt as of April 30, 2024 | Metric | Amount | | :--- | :--- | | Debt Outstanding | $391.4 million | | Net Debt | $373.5 million | | Total Available Liquidity | $216.9 million | Financial Statements and Reconciliations Condensed Consolidated Financial Statements The condensed consolidated financial statements show a slight decrease in total assets and liabilities, with lower net income for both the three and six-month periods, and a slight decrease in cash from operations Balance Sheets As of April 30, 2024, total assets slightly decreased to $894.7 million, total liabilities decreased to $561.4 million, and stockholders' equity remained stable Condensed Balance Sheet Data (in thousands) | Account | April 30, 2024 | October 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $99,459 | $94,270 | | Total Assets | $894,713 | $904,525 | | Total Current Liabilities | $79,973 | $83,976 | | Total Liabilities | $561,412 | $571,285 | | Total Stockholders' Equity | $308,301 | $308,240 | Statements of Operations For the three months ended April 30, 2024, net income was $3.0 million on $107.1 million revenue, while the six-month period recorded a net loss of $0.8 million Condensed Statement of Operations (in thousands) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :--- | :--- | :--- | | Revenue | $107,062 | $107,791 | | Gross Profit | $41,767 | $43,474 | | Income from Operations | $12,055 | $13,216 | | Net Income | $3,046 | $5,588 | Statements of Cash Flows For the six months ended April 30, 2024, net cash from operating activities was $29.4 million, with decreased cash used in investing activities and $4.1 million used in financing activities Condensed Statement of Cash Flows (Six Months Ended April 30, in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $29,445 | $31,092 | | Net cash used in investing activities | ($23,581) | ($31,129) | | Net cash provided by (used in) financing activities | ($4,135) | ($1,052) | | Net increase (decrease) in cash | $2,095 | ($839) | Non-GAAP Reconciliations and Other Financial Data This section provides detailed reconciliations of non-GAAP measures, including Adjusted EBITDA and net debt, along with segment performance breakdowns and notes on reclassification of certain activities - Beginning in Q1 2024, the company reclassified certain assets and related results into the U.S. Concrete Pumping segment and adjusted its corporate allocation methodology for segment Adjusted EBITDA, with prior period results recast for conformity[30] Reconciliation of Net Income to Adjusted EBITDA (Q2 2024, in thousands) | Line Item | Amount | | :--- | :--- | | Net income | $3,046 | | Interest expense | $6,873 | | Income tax expense | $2,180 | | Depreciation and amortization | $14,239 | | EBITDA | $26,338 | | Stock based compensation & other adjustments | $1,210 | | Adjusted EBITDA | $27,548 | Net Debt Trend (in thousands) | Date | Net Debt | | :--- | :--- | | April 30, 2023 | $429,304 | | October 31, 2023 | $378,093 | | April 30, 2024 | $373,472 | Supplementary Information About the Company Concrete Pumping Holdings is a leading provider of concrete pumping and waste management services in the U.S. and U.K., operating under key national brands - The company is a leading provider of concrete pumping and waste management services in the U.S. and U.K[15] - Key operating brands include Brundage-Bone in the U.S., Camfaud in the U.K., and Eco-Pan in both markets[15] Conference Call Information The company held a conference call on June 6, 2024, to discuss Q2 2024 results, with a replay available until June 13, 2024 - A conference call was held on Thursday, June 6, 2024, at 5:00 p.m. Eastern time to discuss the results[13] - A replay of the call is available until June 13, 2024[14] Non-GAAP Financial Measures Definition The company utilizes non-GAAP financial measures like Adjusted EBITDA and net debt to provide supplemental information, with definitions and reconciliations included in the financial tables - The company uses non-GAAP measures such as Adjusted EBITDA, net debt, and free cash flow to provide supplemental information on financial and business trends[17][19] - Adjusted EBITDA is calculated by taking net income and adding back interest, taxes, D&A, and other specific adjustments like transaction expenses and stock-based compensation[18] - Forward-looking non-GAAP guidance is not reconciled to GAAP measures due to the lack of predictability of reconciling items[22] Forward-Looking Statements This press release contains forward-looking statements regarding future performance and the fiscal year 2024 outlook, which are subject to significant risks and uncertainties - The report includes forward-looking statements concerning future performance and the fiscal 2024 outlook[16] - Key risks that could affect results include inflation, global economic conditions, fuel costs, adverse weather, and changes in regulations[16]