Q3 2024 Concrete Pumping Holdings Inc Earnings Call

Operator: Good afternoon, everyone, and thank you for participating in today's conference call to discuss concrete pumping openings.

Good afternoon, everyone and thank you for participating in today's conference call to discuss concrete pumping Holdings' financial results for the third quarter ended July 31st Street and 24.

Operator: Find out the results for the third quarter and in July 31st, 2024.

Operator: Joining us today are Concrete Pumping, holding CEO, Bruce Young, DFO, Iain Humphries, and the company's external investor relations selector, Cody Slach.

Speaker Change: Joining us today are concrete pumping holdings' CEO, Bruce young CFO, Iain Humphries and the company's external interest in relation director Coty slow.

Cody Slach: Before we go further, I would like to turn the call over to Mr. Slach to read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important questions regarding closing statements.

Coty Schwalb: Before we go further I would like to turn the call over to Mr. Schwalb should 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.

Cody Slach: Thank you.

Thank you.

Cody Slach: I'd like to remind everyone that, in the course of 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 and your report on Form 10-K, 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 as a result of new information, feature events, or otherwise.

Mr. Schwalb: I'd like to remind everyone that in the course of 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.

Mr. Schwalb: For information concerning these risks and uncertainties see concrete pumping Holdings' annual report on Form 10-K 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 as a result of new information future.

Speaker Change: Events or otherwise on today's call. We will also reference certain non-GAAP financial measures, including adjusted EBITDA net debt leverage ratio and free cash flow, which we believe provide useful information for investors.

Cody Slach: On today's call, we will also reference certain non-GAAP financial measures, including adjusted EBITDA net debt leverage ratio and free cash flow, which we believe provide useful information for investors. We provide further information about these non-GAAP financial measures and reconciliation to the comparable GAAP measures in our press release issued today, or the investor presentation posted on the company's website.

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.

Cody Slach: I'd like to remind everyone this call will be available for replay later this evening. Webcast replay will also be available via the link provided in today's press release, as well as on the company's website.

Speaker Change: Like to remind everyone. 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 in the company's website.

Operator: Now, I'd like to turn the call over to the CEO of Concrete Pumping Holdings.

Now I'd like to turn the call over to the CEO of concrete pumping holdings Bruce Young Bruce.

Cody Slach: Bruce Young. Bruce?

Bruce Young: Thank you, Cody, and good afternoon, everyone. In the third quarter, continued organic growth in our U.S. concrete waste management business was offset by a series of factors that impacted volume-driven declines in our U.S. concrete pumping segment. Historic rainfall in Texas and across the Southeast region, together with ongoing restrictive monetary policy, curtailed construction volumes for the quarter. Higher for longer interest rates have impacted the timing of more rate-sensitive commercial projects, and higher commercial building vacancy rates have delayed project starts on new build projects. While we believe these circumstances are temporary, they nonetheless have had a negative impact on our financial results.

Bruce Young: Thank you Cody and good afternoon, everyone.

Speaker Change: In the third quarter continued organic growth in our U S concrete waste management business was offset by a series of factors that impacted volume driven declines in our U S concrete pumping segment.

Speaker Change: Historic rainfall in Texas and across the South East region, together with ongoing restricted monetary policy curtailed construction volumes for the quarter higher for longer interest rates have impacted the timing of more rate sensitive commercial projects and higher commercial building vacancy rates have delayed project starts our newbuild projects.

Speaker Change: I believe these circumstances are temporary they nonetheless have had a negative impact on our financial results.

Bruce Young: In the UK, the impacts of sustained higher interest rates on volume largely followed the trends we experienced domestically, but our infrastructure projects still held up well considering the market backdrop. Meanwhile, we are quite pleased with our concrete waste management business continued to grow organically at a double-digit rate driven by healthy market share growth and continued price improvements in the face of the challenging construction market. We expect to tailwinds in this business to continue for the remainder of this year and beyond. In the third quarter, we continue to strengthen our balance sheet by paying down debt, preserving our robust free cash flow, and improving our adjusted EBITDA margin, which speaks to our strong financial profile and union economics, as well as our disciplined approach to fleet management, improving cost initiatives, and capital investment.

Speaker Change: In the U K the impacts of sustained higher interest rates on volume largely followed the trends, we experienced domestically, but our infrastructure projects still held up well considering the market backdrop.

Speaker Change: Meanwhile, we are quite pleased with our concrete waste management business continued to grow organically at a double digit rate driven by healthy market share growth and continued price improvements in the face of the challenging construction market. We expect a tailwind for this business to continue for the remainder of this year and beyond.

Speaker Change: In the third quarter, we continued to strengthen our balance sheet by paying down debt preserving our robust free cash flow and improving our adjusted EBITDA margin, which speaks to our shrunk our financial profile and unit economics as well as our disciplined approach to fleet management, improving cost initiatives and capital investments.

Bruce Young: Conference. Turning to specific comments by end market, we largely experienced similar trends to what we saw in our second quarter. With our commercial market, we continue to experience softness across a variety of commercial work, especially like commercial and manufacturing projects, which tend to be more sensitive to the prolonged high interest rate environment we are currently in. Larger commercial projects remain mostly durable, albeit momentum is moving at a slower pace. But even these projects haven't been immune to interest rate economics. Weather also played an outside role in the quarter, with unseasonably wet weather in Texas and the Southeastern United States continuing to delay projects.

Speaker Change: Turning to specific comments by end market, we largely experienced similar trends to what we saw in our second quarter was our commercial market. We continue to experience softness across a variety of commercial work, especially.

Speaker Change: Especially like commercial and manufacturing projects, which tend to be more sensitive to the prolonged high interest rate environment. We are currently in la.

Speaker Change: Larger commercial projects remains mostly durable, albeit momentum is moving at a slower pace, but even these projects havent been immune to interest rate economics.

Speaker Change: Weather also played an outsized role in a quarter with unseasonably wet weather in Texas, and the south Eastern United States can shunyi continuing to delay projects.

Bruce Young: As we move further into Q4, we would expect these weather events to subside and to catch up on a portion of this work. Our residential market remained resilient considering the higher interest rate environment, with our overall mix of our U.S. concrete pumping work and the residential end market holding at approximately 31% of total revenue on a trailing 12-month basis. From a regional perspective, we continue to see residential construction investments within our mountain region and in Texas, which represents undersupplied regions where single-family construction is prominent. We still expect the structural supply, demand, and balance in housing will continue to support home building activity, especially as home builders remain motivated to entice customers with creative solutions that include rate buy-downs, and we believe the Federal Reserve's path to interest rate reductions should continue to support this end market's growth.

Speaker Change: As we move further into Q4, we would expect these weather events to subside and to catch up on a portion of this work.

Speaker Change: Our residential market remained resilient considering the higher interest rate environment with our overall mix of our U S concrete pumping work in our residential end market holding at approximately 31% of total revenue on a trailing 12 month basis.

From a regional perspective, we continue to see residential construction investments within our mountain region and in Texas, which represents under supplied regions, where single family construction as prominent we still expect a structural supply demand imbalance in housing will continue to support homebuilding activity, especially as as homebuilders remain more.

Speaker Change: <unk> added to entice customers with creative solutions that include rate buy downs, and we believe the federal reserve's path to interest rate reductions should continue to support this end markets growth.

Bruce Young: Offsetting some of our commercial market softness, revenue in our infrastructure markets grew year over year in the third quarter by 5% or 1% of total revenue. The combination of more resilience in our UK infrastructure projects versus our projects domestically and our expanding U.S. national footprint growth these results. And we are finally beginning to see some momentum in capital deployment from the Infrastructure Investment and Jobs Act and other public project investments. As a result, we expect to see infrastructure projects continue to grow for the remainder of 2024 and beyond as early IIA-JA projects advance to the major construction phase and we continue to aggressively pursue these opportunities.

Speaker Change: Offsetting some of our commercial market softness revenue in our infrastructure markets grew year over year in the third quarter by 5% or 1% of total revenue the.

Speaker Change: The combination of more resilience in our U K infrastructure projects versus our projects domestically in our expanding U S. National footprint drove these results and we are finally, beginning to see some momentum in capital deployment from the infrastructure investment and jobs Act and other public project investments as a result, we.

Speaker Change: To see infrastructure projects continue to grow for the remainder of 2024 and beyond as early I E. J J a project advanced to the major construction phase and we continue to aggressively pursue these opportunities in the U K infrastructure growth has continued to develop as funding is being deployed it faster.

Bruce Young: In the UK, infrastructure growth has continued to develop as funding is being deployed at faster timelines than domestic U.S. Government investment. In summary, while the construction market remains soft, particularly in commercial, we believe that we are best positioned relative to our competitors to execute in the challenging environment due to our unique value proposition to our customers, given our national footprint and market diversification and the breadth, depth, and agility of our pumping fleet. Furthermore, our strong balance sheet positions us well for continuing investment both organically and through a creative M&A. As a result, over the long term, we believe our disciplined execution of our strategic growth plan and our ability to responsibly navigate through my macroeconomic cycles will drive superior shareholder value.

Speaker Change: Timelines and domestic U S government investment in summary, while the construction market remains soft, particularly in commercial we believe that we are best positioned relative to our competitors to execute in the challenging environment due to our unique value proposition to our customers given our national footprint and market diversification.

Speaker Change: And the breadth depth and agility of our pumping fleet. Furthermore, our strong balance sheet positions us well for continued investment both organically and through accretive M&A as a result over the long term, we believe our disciplined execution of our strategic growth plan and our ability to responsibly navigate through my macro economic cycles will drive.

Speaker Change: <unk> superior shareholder value.

Bruce Young: I will now let Ian address our financial results in more detail before I return to provide some concluding remarks.

Speaker Change: I will now let Ian address our financial results in more detail before I return to provide some concluding remarks and.

Iain Humphries: Ian? Thanks, Bruce.

Ian: Thanks, Bruce and good afternoon, everyone.

Iain Humphries: Good afternoon, everyone. In the third quarter, consolidated revenue was $109.6 million; it compares to $120.7 million in the same year-to-go quarter. As Bruce mentioned, the decline in revenue was mostly driven by a volume decline in our US concrete pumping segment, partially upset by continued strong organic growth in concrete wage management services. As such, revenue in our US concrete pumping segment, mostly operating under the Brunei's Bone brand, decreased 14% to 75.2 million compared to 87.3 million in the prior year quarter. The decrease is primarily attributable to lower volumes caused by a general slowdown in commercial construction work, mostly due to the impact from higher interest rates, oversaturation of concrete pumps in certain markets, and higher than normal rainfall throughout the quarter, specifically in our Texas and Southeast regions.

Ian: Third quarter consolidated revenue was $109 6 million compared to $120 7 million in the same year ago quarter.

Ian: As Bruce mentioned the decline in revenue is mostly driven by a volume decline our U S. Concrete pumping segment, partially offset by continued strong organic growth in concrete waste management services.

Speaker Change: As such revenue in our U S concrete pumping segment, mostly operating under the Brundage bone brand decreased 14% to $75 2 million compared to $87 3 million in the prior year quarter.

Speaker Change: The decrease was primarily attributable to lower volumes caused by a general slowdown in commercial construction works, mostly due to the impact from higher interest rates over saturation of concrete pumps in certain markets and higher than normal rainfall throughout the quarter or specifically in our Texas and southeast regions.

Iain Humphries: We estimate that the impact of adverse wearer and third quarter caused approximately 6 million of project revenue delays. For our UK operations, operating under the Canford brand, revenue decreased 8% to 15.9 million compared to 17.3 million in the prior year quarter. Excluding the impact from foreign currency translation, revenue was down 9% year over year. Strength in the UK's infrastructure work did not outweigh a volume-driven slowdown in other commercial projects due to higher interest rates. Revenue in our US concrete waste management services segment, operating under the Eco-Pan brand, increased 15% to 18.5 million compared to 16.1 million in the prior year quarter.

Speaker Change: We estimate that the impact of adverse weather in the third quarter are caused approximately $6 million of project revenue delays.

Speaker Change: For our UK operations operating under the comfort brand revenue decreased 8% to $15 9 million compared to $17 3 million in the prior year quarter.

Speaker Change: Excluding the impact from foreign currency translation revenue was down 9% year over year.

Strength in the UK is infrastructure work did not we are volume driven slowdown in other commercial projects due to higher interest rates.

Speaker Change: Revenue in our U S concrete waste management services segment operating under the Eco Pan brand increased 15% to $18 5 million compared to $16 1 million in the prior year quarter.

Iain Humphries: The increase was driven by robust organic growth and pricing improvements. Returning to our consolidated results, gross margin in the third quarter was 45.6%, compared to 41% in the same year-goal quarter. Given the volume declines, we are pleased to preserve our gross margin, and this was achieved through continued focus on cost initiatives that include labor cost efficiency and our paerum maintenance supply chain. General and administrative expenses in the third quarter decreased to 27.9 million compared to 29.9 million in the same year-goal quarter, largely due to non-cash decreases in amortization expense of $1 million and lower labor costs of 800,000.

Speaker Change: The increase was driven by robust organic growth and pricing improvements.

Speaker Change: Returning to our consolidated results gross margin in the third quarter was 46% compared to 41% and same year ago quarter.

Speaker Change: Given the volume declines we are pleased to have preserved our gross margin and this was achieved through continued focus on cost initiatives that include labor cost efficiency, and our repair and maintenance and supply chain.

Speaker Change: General and administrative expenses in the third quarter decreased to $27 9 million compared to $29 9 million in the same year ago quarter, largely due to noncash decreases in amortization expense of $1 million and lower labor costs of 800000.

Iain Humphries: As a percentage of revenue, G&A costs are 25.5% in the third quarter compared to 24.8% in the prior year quarter. Now income available has come as shareholders in the third quarter for $7.1 million, or $13 per dilute share compared to $9.9 million, or $18 per dilute share in the same year-goal quarter. Consolidated registered EBITDA in the third quarter decreased to 31.6 million compared to 34.9 million in the same year-goal quarter, but adjusted EBITDA margin was consistent year-over-year at approximately 29%. Our ability to preserve adjusted EBITDA margins in a lower demand environment shows the benefits of our scale, our ability to prudently manage our fleet, and the efforts by our team to protect the value of the specialty service offering we have.

Speaker Change: As a percentage of revenue G&A costs were 25, 5% in the third quarter compared to 24, 8% in the prior year quarter.

Speaker Change: Net income available to common shareholders in the third quarter was $7 1 million or <unk> 13 per diluted share compared to $9 9 million or <unk> 18 per diluted share in the same year ago quarter.

Speaker Change: Consolidated adjusted EBITDA in the third quarter decreased to $31 6 million compared to $34 9 million in the same year ago quarter, but adjusted EBITDA margin was consistent year over year at approximately 29%.

Speaker Change: Our ability to preserve adjusted EBITDA margins and a lower demand environment shows the benefits of our scale our ability to prudently manage our fleet and the efforts by our team to protect the value of the specialty service offering we have.

Iain Humphries: In the US concrete pumping business, adjusted EBITDA was $20.1 million compared to $22.7 million in the same year-goal quarter. In our UK business, adjusted EBITDA was $4.2 million compared to $4.8 million in the same year-goal for a U.S. concrete waste management services business, adjusted EBITDA with $7.3 million, compared to $7.5 million in the same uRugal quarter. Turning to liquidity, at July 31, 2024, we had total debt outstanding of $375 million, or net debt of $348.7 million. This equates to a decrease in net debt from the second quarter of 2024 to the third quarter of nearly $25 million, and a net debt to EBITDA leverage ratio of 3.1 times.

Speaker Change: In the U S concrete pumping business adjusted EBITDA was $20 1 million compared to $22 7 million in the same year ago quarter.

Speaker Change: And our U K business adjusted EBITDA was $4 2 million compared to $4 8 million in the same Utica acquirer.

Speaker Change: For our U S concrete waste management services business adjusted EBITDA was $7 3 million compared to $7 5 million in the same year ago quarter.

Speaker Change: Turning to liquidity.

Speaker Change: July 31, 2024, with total debt outstanding of $375 million or net debt of $348 7 million.

Speaker Change: This equates to a decrease in net debt from the second quarter of 2024 to the third quarter of nearly $25 million and a net debt to EBITDA leverage ratio of three one times.

Iain Humphries: We had approximately 236.3 million of liquidity as of July 31, 2024, which includes cash on the balance sheet and availability from our ABL facility. As a reminder, we have no near-term debt maturities, where our senior notes maturing in 2026, and our asset-based lending facility maturing in 2028. We remain in a strong liquidity position to support our overall long-term growth strategy.

Speaker Change: We had approximately $236 3 million of liquidity as of July 31, 2024, which includes cash on the balance sheet and availability from our ABL facility.

Speaker Change: As a reminder, we have no near term debt maturities with our senior notes maturing in 2026, and our asset based lending facility maturing in 2028.

Speaker Change: And our strong liquidity position to support our overall long term growth strategy.

Iain Humphries: During the third quarter of 2022, we enter into a share repurchase program that authorized the buyback of up to $10 million of our outstanding shares of common stock. In January of 2023, a board of directors approved an additional $10 million increase, and in March of 2024, an additional $15 million was approved. During the third quarter of 2024, we repurchased approximately 370,000 shares of our common stock for $2.5 million, or an average price of $6.64 per share. Since the program was initiated, we have repurchased approximately $2.3 million shares for $15.5 million, or an average price of $6.68 per share.

Speaker Change: During the third quarter of 2022, we entered into a share repurchase program. The authorized the buyback of up to $10 million of outstanding shares of common stock in January of 2023, our board of directors approved an additional $10 million increase and in March of 2020 for an additional $15 million was approved.

Speaker Change: During the third quarter of 2024, we repurchased approximately 370000 shares of our common stock for $2 $5 million or an average price of $6 64 per share.

Speaker Change: Since the program was initiated we have repurchased approximately two 3 million shares for $15 $5 million or an average price of $6 68 per share.

Iain Humphries: The current share buyback program has 19.5 million dollars remaining and is authorized through March of 2025, and we believe this demonstrates both our commitment to delivering long-term shareholder value and our confidence in our strategic growth plan.

Speaker Change: The current share buyback program has $19 $5 million remaining and is authorized through March 2025, and we believe this demonstrates both our commitment to delivering long term shareholder value and our confidence in our strategic growth plan.

Iain Humphries: Moving now into our 2024 full-year guidance, while we had expected some recovery and an improved project funding landscape in the second half of fiscal 2024, a restrictive monetary policy has driven higher-for-longer interest rates, and this has weakened the near-term demand environment, particularly in our commercial end market. As we navigate lower commercial project volumes, we are adjusting our financial outlook for fiscal 2024. We now expect revenue to range between $420 and $430 million, and it's just that even that had to range between $108 and $113 million. We now expect free cash flow, which we define as a just-a-day bidda, less net replacement capex, less cash paid for interest, to be at least $67 million and expect to end the year with a leverage ratio of approximately three times.

Speaker Change: Moving now into our 2020 for full year guidance, while we had expected some recovery and an improved project funding landscape in the second half of fiscal 2024.

Speaker Change: Our restricted monetary policy has driven higher for longer interest rates and this is weak in the near term demand environment, particularly in our commercial end market.

Speaker Change: As we navigate lower commercial project volumes, we are adjusting our financial outlook for fiscal 2024, we now expect revenue to range between 420 and $430 million and adjusted EBITDA to range between 101 hundred $13 million.

Speaker Change: We now expect free cash flow, which we define as adjusted EBITDA less net replacement capex less cash paid for interest to be at least $67 million and expect to end the year with a leverage ratio of approximately three times.

Iain Humphries: Our ability to drive strong free cash flow on lower expected volumes stems from our ability to optimize equipment utilization and flex our capex investments based on demand. This flexibility is also supported by previous investments we've made over the last three years, including from acquisitions to maintain sufficient capacity and our fleet utilization.

Speaker Change: Our ability to drive strong free cash flow on lower expected volumes stems from our ability to optimize equipment utilization and flex our capex investments based on demand. This flexibility is also supported by previous investments. We've made over the last three years, including from acquisitions to maintain sufficient capacity in our fleet.

Speaker Change: <unk>.

Bruce Young: With that, I will now turn a call back over to Bruce. Thanks, Ian. Turn into the final quarter of our fiscal year. As I mentioned previously, we still expect a demand environment to be variable in our concrete pumping business given current market conditions. However, we believe the scale, breadth, and agility of this business has optimized our position for recovery as macro improvements, like lower interest rates, arise. We are encouraged by our performance in our infrastructure business and believe underlying demand trends will continue into Fiscal Year 2025. The same goes for residential, as market imbalances favor the development of new housing.

Speaker Change: With that I will now turn the call back over to Bruce.

Bruce Young: Thanks, Ian churn into the final quarter of our fiscal year as I mentioned previously we still expect a demand environment to be variable in our concrete pumping business given current market conditions. However, we believe the scale breadth and agility of this business is optimize our positioned for recovery as macro improvements like lower interest rates.

Speaker Change: Rice.

Speaker Change: We are encouraged by our performance in our infrastructure business and believe underlying demand trends will continue into fiscal year 2025. The same goes for residential as market imbalances favour. The development of new housing on the cost side of the equation. We are beginning to see our cost control initiatives take hold which should drive growth margin grow.

Bruce Young: On the cost side of the equation, we are beginning to see our cost control initiatives take hold, which should drive margin growth as our commercial position is further benefited by our operational flexibility and sustained opportunistic approach to equipment utilization as we can pursue more value-driven work rather than focus solely on more volume-based projects. And as always, our focus remains on optimizing and market mix to maximize top and bottom-line growth. Today's market environment does not deter our long-term approach to growing our business.

Speaker Change: With as our commercial end market improves.

Speaker Change: Our position is further benefited by our operational flexibility and sustained opportunistic approach to equipment utilization as we can pursue more value driven work rather than focused solely on more volume based projects.

Speaker Change: And as always our focus remains on optimizing end market mix to maximize top and Bottomline growth today's market environment does not deter our long term approach to growing our business, we still expect to complement our organic growth initiatives by continuing to evaluate opportunistic accretive M&A, while strategically reducing our la.

Operator: Good afternoon, everyone, and thank you for participating in today's conference call to discuss concrete pumping openings. Find out the results for the third quarter and in July 31st, 2024.

Bruce Young: We still expect to complement our organic growth initiatives by continuing to evaluate opportunistic, accretive M&A while strategically reducing our leverage.

Cody Slach: Joining us today are a concrete pumping holding CEO, Bruce Young, DFO, Iain Humphries, and the company's external investor relations selector Cody Slach. Before we go further, I would like to turn the call over to Mr. Slach to read the company's safe harbor statement within the meaning of the private security litigation reform act of 1995 that provide important precautions regarding closing statements. Cody, please go ahead. Thank you. I'd like to remind everyone that in the course of this call to give you a better understanding of our operations, we will be making certain forward-looking statements regarding our business and outlook.

Bruce Young: With that, I would now like to turn the call back over to the operator for Q&A. Simole. Thank you.

Speaker Change: Average well.

Speaker Change: With that I would now like to turn the call back over to the operator for Q&A sure Molly.

Speaker Change: Yeah.

Molly: Thank you we will now be conducting a question and answer session.

Operator: We will now be conducting a question and answer session. If you would like to ask the question, please press star one on your telephone keypad. A confirmation tone will indicate your line in the question. You may press star two to remove yourself from the key. Participants use the speaker equipment and may be necessary to pick up the answer before pressing the star key. One moment, please.

Speaker Change: If you'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in Nebraska.

Speaker Change: You May press Star two.

Speaker Change: Do yourself from the queue for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star.

Speaker Change: One moment, please while we poll for questions.

Operator: I will pull four questions.

Speaker Change: Yeah.

Andy Whitman: And our first question comes from the line of Andy Whitman with Bayer. Please proceed with your question. Great. Good afternoon, guys. And thank you for taking my questions here. I guess I wanted to dig in a little bit to kind of curb market conditions and some of the actions you're taking to react to those. I look at the revenue guidance that's implied for the fourth quarter and compared to the EBITDA. That's also implied in the fourth quarter. I guess the revenue is seeing more impact than the EBITDA line. And you mentioned, Bruce, that you're taking actions that are taking hold on your cost structure.

Speaker Change: And our first question comes from the line of Andy Wittmann with Baird.

Cody Slach: 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 and your report on Form 10K, quarterly report on Form 10Q, and other publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, feature events, or otherwise.

Speaker Change: Please proceed with your question.

Andy Wittmann: Great. Good afternoon, guys and thank you for taking my questions here, I guess I wouldn't and I wanted to dig in a little bit kind of current market conditions and some of the actions you're taking to react to those.

Speaker Change: When I look at the revenue guidance, that's implied for the fourth quarter and compare it to the EBITDA. That's also implied in the fourth quarter.

Speaker Change: I guess I guess the revenues is seen more impact in the EBITDA line.

Cody Slach: On today's call, we will also reference certain non-gap financial measures, including adjusted EVA.NET, leverage ratio and free cash flow, which we believe provide useful information for investors. We provide further information about these non-gap financial measures and reconciliation to the comparable gap measures in our press release issue today, or the investor presentation posted on the company's website. I'd like to remind everyone this call will be available for replay later this evening. Webcast replay will also be available in the link provided in today's press release as well as in the company's website.

Speaker Change: And you mentioned Bruce that you were taking actions.

Bruce Young: Actions to.

Speaker Change: They're taking hold on your cost structure I thought it'd be helpful for us to hear a little bit more detail about what youre doing to achieve that and particularly among other things. If you could also address specifically, how you're managing the repair and maintenance expense on your units today for you.

Bruce Young: I thought it would be helpful for us to hear a little bit more detail about what you're doing to achieve that. And particularly among other things, if you can also address specifically how you're managing the repair maintenance expense on your units today. Are you referring some of that now, just recognizing that the demand isn't as strong, or are you still staying kind of up to date on that stuff? Thanks.

Speaker Change: You deferring some of that now just recognizing that the demand isn't as strong or you're still seeing a kind of up to date on that stuff.

Bruce Young: Yes, thanks, Andy. I would start with, we are not deferring any maintenance on our assets. We keep them to the same standard that we always have. We have done a lot better job of purchasing parts that we've seen a little deflation in parts. We've done a better job of managing the labor to maintain that equipment and really staying on top of that with better preventative maintenance out in front of that, which we started a year or so ago. And now we're starting to see some of the benefit of that. On the revenue side of the business, while we're quite disappointed in where the summer has been for us, where we expected Q3 to come out with a little better start as summer weather.

Speaker Change: Yes, Thanks, Andy I will start with we are not deferring any maintenance on our on our assets, we keep them to the same standard that we always have.

Operator: Now I'd like to turn the call over to the CEO of concrete pumping holdings.

Bruce Young: Bruce Young. Bruce?

Bruce Young: Thank you, Cody, and good afternoon, everyone. In the third quarter, continued organic growth in our U.S, concrete waste management business was offset by a series of factors that impacted volume-driven declines in our U.S, concrete pumping segment. Historic rainfall in Texas and across the Southeast region, together with ongoing restrictive monetary policy, curtailed construction volumes for the quarter. Higher for longer interest rates have impacted the timing of more rate-sensitive commercial projects and higher commercial building vacancy rates have delayed project starts on new build projects.

Speaker Change: We have done a lot better job of purchasing parts that we've seen a little deflation in parts, we have done a better job of managing the AR the labor to maintain that equipment and really staying on top of that with a better preventative maintenance out in front of that which we started a year or so ago and now we're starting to see some of the benefit of that.

Speaker Change: On the revenue side of the business our wild bird.

Speaker Change: Get disappointed in and where the summer has been for US where we expected a Q3 to come out with a little better start as a summer weather well, we hope for a summer weather improvement, which turned out to be quite challenging in Q3, but even with that the the commercial markets just didn't react like we had expected them to.

Bruce Young: Well, we hope for summer weather improvement, which turned out to be quite challenging in Q3. But even with that, the commercial markets just didn't react like we had expected them to. We've done an awful lot of analysis on our market share with concerns that we might be losing share during that period of time. We're very comfortable that we are not losing share during that period of time. But what we are seeing is that a lot of the major projectives that would use our specialty type equipment, placing booms, high-rise pumps, that sort of thing. We're not getting near the utilization out of that that we would have expected this summer, meaning that a lot of those larger projects are either delayed or just aren't being planted at all.

Bruce Young: While we believe these circumstances are temporary, they nonetheless have had a negative impact on our financial results. In the UK, the impacts of sustained higher interest rates on volume largely followed the trends we experienced domestically, but our infrastructure projects still held up well considering the market backdrop. Meanwhile, we are quite pleased with our concrete waste management business continued to grow organically at a double-digit rate driven by healthy market share growth and continued price improvements in the face of the challenging construction market. We expect to tail winds in this business to continue for the remainder of this year and beyond.

Speaker Change: We've done an awful lot of analysis on our market share with concerns that we might be losing share during that period of time, we're very comfortable that we are not losing share during that period of time that but what we are seeing is that a lot of the major projects that would use our specialty type equipment, placing booms high rise pumps that sort of thing, we're not getting near the utilization out of.

Speaker Change: That that we would've expected the summer meeting that a lot of those larger projects are either delayed or or or just arent being planned at all so there's sort of some of the things that we're seeing however, we really are focused on making sure that our business is really strong and better positioned for the recovery of the markets.

Bruce Young: In the third quarter, we continue to strengthen our balance sheet by paying down depth preserving our robust free cash flow and improving our adjusted EBITDA margin, which speaks to our strong financial profile and union economics as well as our disciplined approach to fleet management, improving cost initiatives and capital investments. Turning to specific comments by end market, we largely experienced similar trends to what we saw in our second quarter. With our commercial market, we continue to experience softness across a variety of commercial work, especially like commercial and manufacturing projects which tend to be more sensitive to the prolonged high interest rate environment we are currently in.

Andy Whitman: So those are some of the things that we're seeing. However, we really are focused on making sure that our business is really strong and better positioned for the recovery of the market. That's helpful color. I appreciate that. And just for my follow-up question, I know you guys are probably planning for 25, and obviously after next quarter, you'll probably guide for that. But just for early thinking here, given that the trends were what they were in the quarter, I mean, do you feel like overall that 25 is a, you know, is it up years or down year?

Speaker Change: Okay.

Speaker Change: That's helpful color I appreciate that and just for my follow up question.

Speaker Change: I know you guys are probably planning for 25, and obviously after next quarter, you'll probably guide for that but just just for early thinking here given that the trends were what they were in the quarter. I mean do you feel like overall the 25 is a is a.

Speaker Change: Isn't it appears are down here and then maybe even more specifically if you think about the margins and twenty-five you guys talked about weather and in all three quarters. So far this year.

Bruce Young: And then maybe even more specifically, if you think about the margins in 25, you guys talk about whether in all three quarters so far this year, regardless of the outcome, is it fair to think that your gross margins could be flat to up? Yeah, well, certainly whether it has an impact on our margins and with better weather, which just has to be one of the worst years for weather we've seen in my history in the business, which is lengthy. So, with that, we expect margins to improve. But just being coming more efficient as markets slow down, you find ways to be much better at what you do, where you're not constantly chasing after work.

Bruce Young: Larger commercial projects remain mostly durable, albeit momentum is moving at a slower pace, but even these projects haven't been immune to interest rate economics. Whether also played an outside role in the quarter, with unseasonably wet weather in Texas and the southeastern United States continuing to delay projects. As we move further into Q4, we would expect these weather events to subside and to catch up on a portion of this work. Our residential market remained resilient considering the higher interest rate environment with our overall mix of our U.S, concrete pumping work and the residential end market holding at approximately 31 percent of total revenue on a trailing 12 month basis.

Speaker Change: Regardless of the outcome is it fair to think that your gross margins could be flat to up.

Speaker Change: Yeah, well certainly weather has an impact on our margins and with better weather, which just has to be one of the worst years for weather we've seen.

Speaker Change: And my history in the business, which is lengthy.

Speaker Change: So with that we expect margins to improve but just being coming more efficient are you know as markets slowed down you find ways to be much better at what you do well you're not constantly chasing after work and so we think those things will will improve the margins as well over time.

Andy Whitman: And so we think those things will improve the margins as well over time. Looking at the forecast, the ABI, the Architectural Building Index and seeing some softness there, we really expect the first half of our 2025, which starts in November, to be very similar to what we're seeing now. And then hopefully things will start picking up towards the second half of next year. Thank you very much for the client. I appreciate it. Thanks, Andy.

Bruce Young: From a regional perspective, we continue to see residential construction investments within our mountain region and in Texas, which represents undersupplied regions where single-family construction is prominent. We still expect a structural supply demand imbalance in housing will continue to support home building activity, especially as home builders remain motivated to entice customers with creative solutions that include rate-by-downs and we believe the Federal Reserve's path to interest rate reductions should continue to support this in markets growth.

Speaker Change: At the forecast.

Speaker Change: The a b R E D architectural building index and seeing some softness there we really expect the first half of our 2025, which starts in November to be very similar to what we're seeing now and then hopefully things will start picking up towards the second half of next year.

Speaker Change: Thank you very much for the insight I appreciate it.

Andy Wittmann: Thanks, Andy.

Luke McFadden: Thank you. Our next question comes from a line of Tim LaRoune with William Blair. Please proceed with your question. Hi, Bruce and Ian. This is Luke McFadden on for Tim LaRoune. Thanks for taking our questions today. So I guess we're starting here. Some recent data from Dodge pointed towards early signs of potential improvement in the non-residential construction market. They also called out that a September rate cut would likely make conditions even more accommodative for projects, starts going forward here. Curious just to get your viewpoint on that and how future rate cuts get impact your business over the next six to 12 months.

Speaker Change: Thank you. Our next question comes from the line of Tim Mulrooney with William Blair. Please proceed with your question.

Bruce Young: Offsetting some of our commercial market softness revenue in our infrastructure markets grew year over year in the third quarter by 5 percent or 1 percent of total revenue. The combination of more resilience in our UK infrastructure projects versus our projects domestically and our expanding U.S, national footprint growth these results. And we are finally beginning to see some momentum in capital deployment from the Infrastructure Investment and Jobs Act and other public project investments.

Speaker Change: Hi, Bruce and Ian This is Luke on for Tomo Rooney, Thanks for taking my questions today.

Luke: So I guess just starting here.

Speaker Change: Some recent data from Dodge pointed towards early signs of potential improvement in the nonresidential construction market.

Speaker Change: They also called out to the September rate cut would likely make conditions, even more accommodative from projects starts going forward here.

Bruce Young: As a result, we expect to see infrastructure projects continue to grow for the remainder of 2024 and beyond as early I.I.J.J.A, project advanced to the major construction phase and we continue to aggressively pursue these opportunities. In the UK infrastructure growth has continued to develop as funding is being deployed at faster timelines than domestic U.S, government investment.

Speaker Change: Curious just to get your viewpoint on that and how future rate cuts could impact your business over the next six to 12 months.

Bruce Young: Thanks for the question. Now with Dodge, they load up all the project value in the beginning of the project, which means they still need to do the excavation and other such things before they get to the concrete stage. While we do see some activity and bidding by the time it gets to the concrete stages project, we see that coming into our second half of next year.

Speaker Change: Thanks for the call. The question was now with Dodge they load up all the the project value in the beginning of the project, which means that they still need to do the excavation and other such things before they get to the concrete stage.

Bruce Young: In summary, while the construction market remains soft, particularly in commercial, we believe that we are best positioned relative to our competitors to execute in the challenging environment due to our unique value proposition to our customers, given our national footprint and market diversification and the breadth, depth and agility of our pumping fleet. Furthermore, our strong balance sheet positions us well for continuing investment both organically and through a creative M&A. As a result, over the long term, we believe our disciplined execution of our strategic growth plan and our ability to responsibly navigate through my macroeconomic cycles will drive superior shareholder value.

Speaker Change: While while we do see some activity in bidding by the time it gets to the the concrete stages project, where you see that coming into our second half of next year.

Speaker Change: Okay.

Bruce Young: Very helpful. And then, if I can just follow up here related to utilization rates, could you just provide some color there as it relates to recent utilization rates in the business. It seems like some of those headwinds from last quarter, like whether an equipment over saturation. We're present again here this quarter, but just open it. Maybe get an update on what you're seeing from a utilization standpoint in the business today. Yeah, thanks for that. We are very focused on utilization. Our utilization currently runs around 70%, where we can be efficient running us with highest view of the station is 80%.

Speaker Change: Very helpful. And then if I could not just follow up here related to utilization rates could you just provide some color there as it relates to recent utilization rates in the business. It seems like some of those headwinds from last quarter like weather and equipment over saturation. Our present again here this quarter, but just hoping to maybe get an update on what you saw.

Speaker Change: From a utilization standpoint in the business today.

Thanks for that we are very focused on utilization our utilization currently runs around 70%, where we can be efficient running as well.

Iain Humphries: I will now let Ian address our financial results in more detail before I return to provide some concluding remarks. Ian? Thanks, Bruce.

Speaker Change: With the highest utilization is 80%. So we're looking at getting our fleet right are still to have a few older machines that will sellers, who are waiting for the markets to come back around but.

Iain Humphries: So we're looking at getting our fleet right. Still have a few older machines that will sell as we're waiting for the markets to come back around. But yeah, we have an awful lot of capacity for opportunity as it comes as well. Yeah, Luke, one thing I'd add to that. I mean, and that's what you've seen. We've talked a lot about our free cash flow. And you'll see is protect that free cash flow this year for the utilization rates that Bruce mentioned. So I mean, as we mentioned in our set prepared, we have sufficient capacity in our fleet right now.

Iain Humphries: Good afternoon, everyone. In the third quarter, consolidated revenue was $109.6 million, compared to $120.7 million in the same As Bruce mentioned, the decline in revenue was mostly driven by a volume decline in our US concrete pumping segment, partially upset by continued strong organic growth in concrete waste management services. As such, revenue in our US concrete pumping segment mostly operating under the Brunnage Bone Brand decreased 14% to 75.2 million compared to 87.3 million in the prior year quarter.

Iain Humphries: The decrease is primarily attributable to lower volumes caused by a general slowdown in commercial construction work, mostly due to the impact from higher interest rates, oversaturation of concrete pumps in certain markets and higher than normal rainfall throughout the quarter, specifically in our Texas and Southeast regions. We estimate that the impact of adverse wearer and third quarter caused approximately 6 million of project revenue delays. For our UK operations operating under the Canford Brand, revenue decreased 8% to 15.9 million compared to 17.3 million in the prior year quarter.

Speaker Change: Yeah, we have an awful lot of capacity for opportunity as it comes as well, yes look one thing I'd add to that I mean, and that's why you've seen we've talked a lot about our free cash flow.

Speaker Change: And you've seen us protect that free cash flow this year for the utilization rates that Bruce mentioned, so I mean, as we mentioned in our prepared remarks, we have sufficient capacity in our fleet right. Now. So that's why you are posting a lesser investment this year as we focus on the balance sheet, because we still have a good amount of capacity to use in that fleet utilization today, so as we see.

Iain Humphries: So that's why you're probably seeing a lesser investment this year as we focus on the balance sheet because we still have a good amount of capacity to use in that fleet utilization today. So as we see that pick up with volumes, then obviously we'll see some extra utilization come through on the fleet of equipment.

Speaker Change: That pickup with volumes and then obviously, we'll see some.

Speaker Change: Extra utilization comes through on the fleet of equipment.

Luke McFadden: Lewis. Understood, thank you very much.

Speaker Change: Understood. Thank you very much.

Speaker Change: Okay.

Brent Fieldman: Thank you. And, as a reminder, if anyone has any questions, you may press star one on your telephone keypads, join the question and answer queue. Our next question comes from the line of Brent Fieldman with DA Davidson. Please proceed with your question. Bruce, maybe just to start, where are you seeing this oversaturation of equipment, and I guess in the spirit of protecting your margins? What's your response as a company to potentially more competitive pricing or sort of bidding conditions out there? Yeah, so with the manufacturers, all the equipment that is used in our industry in the US, these are outcomes from Germany, China, or South Korea.

Speaker Change: Thank you.

Speaker Change: And as a reminder, if anyone has any questions you May press star one on your telephone keypad to join the question queue.

Speaker Change: Our next question comes from the line of Brent Thielman with D. A Davidson. Please proceed with your question.

Brent Thielman: Hey, Bruce a yen.

Brent Thielman: Bruce maybe just to start where are your CNS over saturation of equipment and I guess in the spirit of protecting your margins. What's your response as a company to potentially more competitive pricing or.

Iain Humphries: Excluding the impact from foreign currency translation, revenue was down 9% year over year. Strength in the UK's infrastructure work did not outweigh a volume driven slowdown in other commercial projects due to higher interest rates. Revenue in our US concrete waste management services segment, operating under the Equipment Brand increased 15% to 18.5 million compared to 16.1 million in the prior year quarter. The increase was driven by robust organic growth and pricing improvements.

Bruce Young: Conditions out there.

Speaker Change: Yeah, so with the with the manufacturers all the equipment that is used in our industry in the U S. Either comes from Germany, China, or South Korea, and so it takes several years of planning to get equipment sold into the U S.

Bruce Young: And so it takes several years of planning to get equipment sold into the US. And with forecasts with the infrastructure bill and commercial forecasts for a couple of years ago, I think we expected, as an industry, that the volumes would be greater. And so that equipment did come into the market. It did go into the hands of those that might become competitors of ours or those that are competitors of ours, creating an oversaturation of equipment in the market. Folks are trying to get that equipment out into the field. And with that, there's some pricing pressure that we've dealt with this year.

Iain Humphries: Returning to our consolidated results, gross margin in the third quarter was 40.6% compared to 41% in the same year of gold quarter. Given the volume declines, we are pleased to preserve our gross margin and this was achieved through continued focus on cost initiatives that include labor cost efficiency and our pay room maintenance supply chain. General and administrative expenses in the third quarter decreased to 27.9 million compared to 29.9 million in the same year of gold quarter largely due to non-cash decreases in amortization expense of $1 million and lower labor costs of $800,000.

Speaker Change: And what you know with the forecast with the infrastructure Bill and our commercial forecast for them. A couple of years ago. I think we expected is an industry that are the volumes would be greater and so that equipment did come into the market. It did go into the hands of those who might be come competitors of ours are those that are competitor of ours.

Speaker Change: Trading.

Speaker Change: Over saturation of equipment in the market.

Speaker Change: Folks are trying to get that equipment out into the field and with that there's some pricing pressure that we've dealt with this year.

Bruce Young: We've been able to maintain our pricing in our concrete pumping services this year, but we haven't been able to increase it. And we think a lot of that has to do with the oversaturation. But again, as I mentioned earlier, we're focused on market shares as well, making sure we maintain our market share as we're dealing with that pressure.

Speaker Change: We made it to maintain our pricing and our concrete pumping service this year, but we haven't been able to increase it and we think a lot of that has to do with the over saturation, but again as I mentioned earlier, we're focused on market share as well and making sure we maintain our market share as we're dealing with that pressure.

Iain Humphries: As a percentage of revenue, G&E costs are 25.5% in the third quarter compared to 24.8% in the prior year quarter. Now income available to common shareholders in the third quarter was $7.1 million or $13 per dilute share compared to $9.9 million or $18 per dilute share in the same year of gold quarter. Consolidated registered a bit down the third quarter decreased to $31.6 million compared to $34.9 million in the same year of gold quarter, but adjusted a bit down margin was consistent year over year at approximately 29%.

Speaker Change: Okay.

Bruce Young: Okay, I appreciate that, Bruce. And then I guess coming back to just how things has evolved. Maybe over even the last few months, particularly this demand environment and the progression. And it sounds like some of these interest rate sensitive sectors is sort of moderating even more, Bruce, than what you thought a few months ago. I thought I heard you made a comment about some of the large projects potentially losing a little momentum. Can you expand on that and what you're seeing there? Yeah, so things with large manufacturing plants where there's EB plants, battery plants, chip plants; those things aren't going at the rate that we would have anticipated.

Speaker Change: Okay I appreciate that Bruce and then I.

I I guess coming back to just how things have evolved.

Speaker Change: Maybe over even the last few months, particularly this demand environment that progression.

Speaker Change: And it sounds like some of these interest rate sensitive sector sort of moderate need even more than what you thought a few months ago.

Speaker Change: I thought I heard you made a comment about some of the large projects potentially losing a little momentum could you expand on that.

Iain Humphries: Our ability to preserve adjusted a bit down margins and a lower demand environment shows the benefits of our scale, our ability to prudently manage our fleet and the efforts by our team to protect the value of the specialty service offering we have. In the US concrete pumping business, adjusted a bit down was $20.1 million compared to $22.7 million in the same year of gold quarter. In our UK business, adjusted a bit down was $4.2 million compared to $4.8 million in the same year of gold quarter, for a U.S, concrete waste management services business, adjusted EBITDA with $7.3 million, compared to $7.5 million in the same uRugal quarter.

And what Youre seeing there.

Speaker Change: Yes, so things with a large manufacturing plants, where theres VB plants battery plants chip plants, those things arent going at the rate that we would have anticipated. There's there's still don't awful lot in the planning and bidding stage that we expect to come in the second half of next year and beyond.

Bruce Young: There's still an awful lot in the planning and bidding stage that we expect to come into the second half of next year and beyond. You also have the infrastructure bill, which we did expect that, again, that we would get larger infrastructure projects that we would be in the process of working on currently. We're starting to see a little more activity there. We are bidding on some fairly substantial infrastructure projects that would take us laid into next year and beyond. But we just kind of, I think as an industry in our business, we expected more activity on that this year.

Speaker Change: So have the infrastructure Bill, which we did expect that that again that we would get larger infrastructure projects that we would be in the process of working on currently are starting to see a little more activity. There we are bidding on some fairly substantial.

Iain Humphries: Turning to liquidity, at July 31, 2024, we had total debt outstanding of $375 million, or net debt of $348.7 million. This equates to a decrease in net debt from the second quarter of 2024 to the third quarter of nearly $25 million, and a net debt to EBITDA leverage ratio of 3.1 times. We had approximately $236.3 million of liquidity as of July 31, 2024, which includes cash on the balance sheet and availability from our ABL facility.

Infrastructure projects that would take us.

Speaker Change: Late into next year and beyond but.

Speaker Change: We just kind of X I think as an industry and in our business, we expect it to be more activity on that this year.

Bruce Young: Got it. Maybe just last one, Bruce. Any concern in your ability to sustain this sort of rate of growth in eco-pan with justice, with slower overall industry activity? You know, it's an interesting question. We have been able to maintain fairly strong growth with eco-pan even in a softer environment, just with the idea that we've been able to show people that we can keep their sites clean for largely the same cost as what they're using now and make it more efficient for them. So, while in the concrete pumping business, we're really not taking on any new industry-type work.

Speaker Change: Got it maybe just last one Bruce that any concern in your ability to sustain this sort of rate of growth in eco pan.

I guess, just with lower overall industry activity.

Bruce Young: You know that is a it's an interesting question. We are we have been able to maintain fairly strong growth with with eco pan even in a softer environment I'm just with the idea that we've been able to show people that we can keep their sites clean them.

Iain Humphries: As a reminder, we have no near-term debt maturities where our senior knows maturing in 2026, and our asset-based lending facility maturing in 2028. We remain in a strong liquidity position to support our overall long-term growth strategy. During the third quarter of 2022, we enter into a shared repurchase program that authorized the buyback of up to $10 million of our outstanding shares of common stock. In January of 2023, a board of directors approved an additional $10 million increase and in March of 2024, an additional $15 million was approved.

Bruce Young: For largely the same cost as what they're using now and make it more efficient for them, so well while in the concrete pumping business, we're really not taking on any new industry type work Eco Pan is kind of revolutionized in an industry, where we're showing people the benefit of it and replacing a historical that mess.

Brent Fieldman: Eco-pan is kind of revolutionizing an industry where we're showing people the benefit of it in replacing the historical method that's, you know, that we've been able to prove out to be inefficient. Thank you. Okay. Very good. Thank you. Thanks, friends.

Bruce Young: That says that we've been able to prove out to be inefficient.

Bruce Young: Yeah.

Bruce Young: Okay very good thank you.

Brent Thielman: Thanks Brent.

Brent Thielman: Yes.

Operator: Thank you.

Iain Humphries: During the third quarter of 2024, we repurchase approximately $370,000 of our common stock for $2.5 million or an average price of $6.64 per share. Since the program was initiated, we have repurchased approximately $2.3 million shares for $15.5 million or an average price of $6.68 per share. The current share buyback program has $19.5 million remaining and is authorized through March of 2025. And we believe this demonstrates both our commitment to delivering long-term shareholder value and our confidence in our strategic growth plan.

Speaker Change: Thank you.

Operator: At this time, this concludes our question-and-answer session.

Speaker Change: At this time this concludes our question and answer session.

Bruce Young: Now, if we turn the call back over to Mr. Young for closing remarks. Thank you, Molly. We'd like to thank everyone for listening to today's call, and we look forward to speaking with you when we report our fourth quarter fiscal 2024 results in January of 2025. Thank you.

Speaker Change: On the call back over to Mr. Young for closing remarks.

Mr. Young: Thank you Molly and we'd like to thank everyone for listening to today's call and we look forward to speaking with you. When we report our first quarter fiscal 2024 results in January of 2025. Thank you.

Operator: Ladies and gentlemen, this concludes today's teleconference. You may disconnect your line at this time. Thank you for your participation.

Speaker Change: And ladies and gentlemen, this does conclude conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.

Speaker Change: Okay.

Iain Humphries: Moving now into our 2024 full-year guidance, while we had expected some recovery and an improved project funding landscape in the second half of fiscal 2024, a restrictive monetary policy has driven higher for longer interest rates and this is weakened in the near-term demand environment, particularly in our commercial end market. As we navigate lower commercial project volumes, we are adjusting our financial outlook for fiscal 2024. We now expect revenue to range between $420 and $430 million and it's just a little bit that had to range between $108 and $113 million.

Speaker Change: [music].

Iain Humphries: We now expect free cash flow, which we define as a just a little bit that less net replacement capex, less cash paid for interest to be at least $67 million and expect to end the year with a leverage ratio of approximately three times. Our ability to drive strong free cash flow on lower expected volumes stems from our ability to optimize equipment utilization and flex our capex investments based on demand. This flexibility is also supported by previous investments we've made over the last three years, including from acquisitions to maintain sufficient capacity and our fleet utilization.

Speaker Change: Yeah.

Speaker Change: [music].

Bruce Young: With that, I will now turn a call back over to Bruce. Thanks, Ian. Turn into the final quarter of our fiscal year. As I mentioned previously, we still expect a demand environment to be variable in our concrete pumping business given current market conditions. However, we believe the scale breadth and agility of this business has optimized our position for recovery as macro improvements like lower interest rates arise. We are encouraged by our performance in our infrastructure business and believe underlying demand trends will continue into fiscal year 2025.

Bruce Young: The same goes for residential as market imbalances favor the development of new housing. On the cost side of the equation, we are beginning to see our cost control initiatives take hold which should drive growth, margin growth as our commercial and market improve. Our position is further benefited by our operational flexibility and sustained opportunistic approach to equipment utilization as we can pursue more value driven work rather than focus solely on more volume based projects.

Bruce Young: And as always, our focus remains on optimizing and market mix to maximize top and bottom line growth. Today's market environment does not deter our long-term approach to growing our business. We still expect to complement our organic growth initiatives by continuing to evaluate opportunistic attritive M&A while strategically reducing our leverage. With that, I would now like to turn the call back over to the operator for Q&A. Thank you. We will now be conducting a question and answer session.

Bruce Young: If you would like to ask the question, please press star one on your telephone keypad. A confirmation tone will indicate your line in the question. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the answer before pressing the start key. One moment please, while we pull four questions.

Andy Whitman: And our first question comes from the line of Andy Whitman with Bayer. Please proceed with your question. Great. Good afternoon, guys, and thank you for taking my questions here. I guess I wanted to dig in a little bit to kind of current market conditions and some of the actions you're taking to react to those. I look at the revenue guidance that's implied for the fourth quarter and compared to the EBITDA. That's also implied in the fourth quarter.

Andy Whitman: I guess the revenue is seeing more impact than the EBITDA line. And you mentioned Bruce that you're taking actions that are taking hold on your cost structure. I thought it would be helpful for us to hear a little bit more detail about what you're doing to achieve that. And particularly among other things, if you could also address specifically how you're managing the repair maintenance expense on your units today. Are you referring some of that now just recognizing that the demand isn't as strong or are you still staying kind of up to date on that stuff? Thanks.

Bruce Young: Andy, I would start with we are not deferring any maintenance on our assets. We keep them to the same standard that we always have. We have done a lot better job of purchasing parts that we've seen a little deflation in parts. We've done a better job of managing the labor to maintain that equipment and really staying on top of that with better preventative maintenance out in front of that, which we started a year or so ago.

Bruce Young: And now we're starting to see some of the benefit of that. On the revenue side of the business, while we're quite disappointed in where the summer has been for us, where we expected Q3 to come out with a little better start is summer weather. Well, we hope for summer weather improvement, which turned out to be quite challenging in Q3. But even with that, the commercial markets just didn't react like we had expected them to.

Bruce Young: We've done an awful lot of analysis on our market share with concerns that we might be losing share during that period of time. We're very comfortable that we are not losing share during that period of time. But what we are seeing is that a lot of the major projectives that would use our specialty type equipment placing booms, high-rise pumps, that sort of thing. We're not getting near the utilization out of that that we would have expected this summer meeting that a lot of those larger projects are either delayed or just aren't being planted all.

Bruce Young: So those are some of the things that we're seeing. However, we really are focused on making sure that our business is really strong and better positioned for the recovery of the market. That's helpful color. I appreciate that.

Andy Whitman: And just for my follow-up question, I know you guys are probably planning for 25 and obviously after next quarter, you'll probably guide for that. But just for early thinking here, given that the trends were what they were in the quarter.

Bruce Young: I mean, do you feel like overall that 25 is a, you know, is it up years or down year? And then maybe even more specifically, if you think about the margins in 25, you guys talk about weather in all three quarters so far this year. Regardless of the outcome, is it fair to think that your gross margins could be flat to up? Yeah, well, certainly whether it has an impact on our margins and with better weather, which just has to be one of the worst years for weather we've seen in my history in the business, which is lengthy.

Bruce Young: So with that, we expect margins to improve. But just being coming more efficient, as markets slow down, you find ways to be much better at what you do, where you're not constantly chasing after work. And so we think those things will improve the margins as well over time. Looking at the forecast, the ABI, the architectural building index, and seeing some softness there, we really expect the first half of our 2025, which starts in November to be very similar to what we're seeing now. And then hopefully things will start picking up towards the second half of next year.

Andy Whitman: Thank you very much for the client. I appreciate it. Thanks, Andy. Thank you.

Luke McFadden: Our next question comes from the line of Tim LaRoonie with William Blair. Please proceed with your question. Hi, Bruce and Ian. This is Luke McFadden on for Tim LaRoonie. Thanks for taking our questions today. So I guess we're starting here. Some recent data from Dodge pointed towards early signs of potential improvement in the non residential construction market. They also called out that a September rate cut would likely make conditions even more accommodative for projects, starts going forward here.

Luke McFadden: Curious just to get your viewpoint on that and how future rate cuts get impact your business over the next six to 12 months. Thanks for the question. Now with Dodge, they load up all the project value in the beginning of the project, which means they still need to do the excavation and other such things before they get to the concrete stage. While we do see some activity and bidding, by the time it gets to the concrete stages project, we see that coming into our second half of next year.

Bruce Young: Very helpful. And then if I can just follow up here related to utilization rates, could you just provide some color there as it relates to recent utilization rates in the business. It seems like some of those headwinds from last quarter, like whether an equipment over saturation. We're present again here this quarter, but just open it. Maybe get an update on what you're seeing from a utilization standpoint in the business today. Yeah, thanks for that.

Bruce Young: We are very focused on utilization. Our utilization currently runs around 70% where we can be efficient running as with height of utilization is 80%. So we're looking at getting our fleet right still have a few older machines that will sell as we're waiting for the markets to come back around. But yeah, we have an awful lot of capacity for opportunity as it comes as well. Yeah, Luke, one thing I'd add to that.

Bruce Young: I mean, and that's what you've seen. We've talked a lot about our free cash flow. And you'll see is I'll protect that free cash flow this year for the utilization rates that Bruce mentioned. So, I mean, as we mentioned in our set prepared, we have sufficient capacity in our fleet right now. So that's why you're probably seeing a lesser investment this year as we focus on the balance sheet because we still have a good amount of capacity to use in that fleet utilization today. So as we see that pick up with volumes, then obviously we'll see some extra utilization come through on the fleet of equipment. Lewis.

Luke McFadden: Understood, thank you very much. Thank you.

Operator: And as a reminder, if anyone has any questions, you may press star one on your telephone keypads to join the question and answer queue.

Brent Fieldman: Our next question comes from the line of Brent Fieldman with DA Davidson. Please see in this over saturation of equipment and I guess in the spirit of protecting your margins, what's your response as a company to potentially more competitive pricing or sort of bidding conditions out there? Yeah, so with the manufacturers, all the equipment that is used in our industry in the US, these are comes from Germany, China or South Korea.

Brent Fieldman: And so it takes several years of planning to get equipment sold into the US. And with forecast with the infrastructure bill and commercial forecast for a couple of years ago, I think we expected as an industry that the volumes would be greater and so that equipment did come into the market. It did go into the hands of those who might become competitors of ours or those at our competitor of ours, creating an over saturation of equipment in the market.

Brent Fieldman: Folks are trying to get that equipment out into the field and with that there's some pricing pressure that we've dealt with this year. We've made able to maintain our pricing in our concrete pumping services this year, but we haven't been able to increase it. And we think a lot of that has to do with the over saturation. But again, as I mentioned earlier, we're focused on market shares as well making sure we maintain our market share as we're dealing with that pressure.

Bruce Young: Okay, I appreciate that Bruce. And then I guess coming back to just how things have evolved, maybe over even the last few months, particularly this demand environment and the progression. And it sounds like some of these interest rate sensitive sectors have sort of moderated even more Bruce than what you thought a few months ago. I thought I heard you made a comment about some of the large projects potentially losing a little momentum.

Bruce Young: Can you expand on that and what you're seeing there? Yeah, so things with large manufacturing plants where there's VB plants, battery plants, chip plants, those things aren't going at the rate that we would have anticipated. There's still an awful lot in the planning and bidding stage that we expect to come into the second half of next year and beyond. You also have the infrastructure bill, which we did expect that again, that we would get larger infrastructure projects that we would be in the process of working on currently.

Bruce Young: We're starting to see a little more activity there. We are bidding on some fairly substantial infrastructure projects that would take us laid into next year and beyond. But we just kind of, I think as an industry and in our business, we expect to do more activity on that this year.

Bruce Young: Got it. Maybe just last one, Bruce, any concern in your ability to sustain this sort of rate of growth in eco-pan, which gets just with slower overall industry activity? It's an interesting question. We have been able to maintain fairly strong growth with eco-pan even in a softer environment, just with the idea that we've been able to show people that we can keep their sites clean for largely the same cost as what they're using now and make it more efficient for them.

Bruce Young: While in the concrete pumping business, we're really not taking on any new industry type work. Eco-pan is kind of revolutionizing an industry where we're showing people the benefit of it in replacing the historical method that we've been able to prove out to be inefficient.

Brent Fieldman: Okay, very good.

Operator: Thank you.

Operator: Thanks, friends.

Operator: Thank you.

Bruce Young: At this time, this concludes our question and answer session. Now, if we turn the call back over to Mr. Young for closing remarks. Thank you, Molly. We'd like to thank everyone for listening to today's call and we look forward to speaking with you and we report our fourth quarter fiscal 2024 results in January of 2025.

Operator: Thank you.

Operator: Ladies and gentlemen, this concludes today's teleconference.

Operator: You may disconnect your line at this time.

Operator: Thank you for your participation.