Concrete Pumping Q4 2024 Earnings Report

Concrete Pumping EPS Results

• Actual EPS: $0.16
• Consensus EPS: $0.14
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: N/A

Concrete Pumping Revenue Results

• Actual Revenue: $93.58 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Concrete Pumping Announcement Details

• Quarter: Q4 2024
• Date: 1/8/2025
• Time: After Market Closes
• Conference Call Date: Thursday, January 9, 2025
• Conference Call Time: 5:00PM ET

Concrete Pumping (NASDAQ:BBCP) (NASDAQ: BBCP) is a specialized provider of concrete placing and pumping solutions for commercial, residential and infrastructure construction projects. Through its network of regional operating subsidiaries, the company offers boom pumps, line pumps and volumetric concrete mixers, enabling contractors to efficiently deliver and place concrete on jobsites of varying scale and complexity. Concrete Pumping’s services are designed to streamline the concrete placement process, reduce project timelines and improve overall jobsite safety.

Since its formation through a series of strategic acquisitions beginning in 2020, Concrete Pumping Holdings has focused on consolidating regional operators under a unified platform. This roll‐up strategy has allowed the company to leverage shared best practices in equipment maintenance, operator training and fleet utilization, while expanding its service footprint. By combining local expertise with centralized operational oversight, the company aims to deliver consistent, high-quality service to customers across its markets.

Concrete Pumping’s geographic footprint encompasses key construction markets in the western and southwestern United States, with active operations in states such as California, Arizona, Nevada and Texas. The company’s regional structure enables it to respond quickly to customer needs, deploying specialized pumping crews and equipment to projects ranging from mid-rise multifamily buildings to large-scale civil infrastructure initiatives. As the U.S. construction industry continues to grow, Concrete Pumping Holdings positions itself as a focused niche play on concrete placement solutions.

Concrete Pumping Q4 2024 Earnings Call Transcript

Key Takeaways

• 4th quarter U.S. Pumping segment volume declined year-over-year due to high interest rates dampening commercial projects and increased office vacancies.
• The Waste Management (Eco Pan) business delivered double-digit revenue growth (+11%) and 12% adjusted EBITDA increase driven by strong volumes and pricing improvements.
• Disciplined fleet management and cost controls lifted adjusted EBITDA margins (+40bps) and generated 5% higher free cash flow, enabling a $42 M reduction in net debt.
• Concrete Pumping Holdings issued FY2025 guidance of $425 M–$445 M revenue, $115 M–$125 M adjusted EBITDA and at least $65 M free cash flow, assuming low single-digit volume and pricing growth.
• Robust liquidity (~$378 M), a net debt/EBITDA leverage of 3.0x and ongoing share repurchases ($2.5 M in Q4, $70 M remaining) underscore balance sheet strength and capital return strategy.

Presentation

[Operator]

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Concrete Pumping Holdings' financial results for the fourth quarter and fiscal year ended October 31st, 2024. Joining us today are Concrete Pumping Holdings' CEO, Bruce Young, CFO, Iain Humphries, and the company's external director of investor relations, Cody Slach. Before we go further, I'd like to turn the call over to Mr. Slach to read the company's safe harbor statement within the meanings of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

[Cody Slach, Director of Investor Relations at Concrete Pumping Holdings]

Thanks, Matt. 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' 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 events, or otherwise. On today's call, we will also reference certain non-GAAP financial measures, including Adjusted EBITDA, Net Debt, and Free Cash Flow, which we believe provide useful information for investors.

[Cody Slach, Director of Investor Relations at Concrete Pumping Holdings]

We provide further information about these non-GAAP financial measures and reconciliations to the comparable GAAP measures in our press release issued today or the investor presentation posted on the company's website. I'd like to remind everyone this call will be available for replay later this evening. The webcast replay will also be available via the link provided in today's press release as well as on the company's website. Additionally, we have posted an updated investor presentation to the company's website. I'd like to now turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

[Bruce Young, CEO at Concrete Pumping Holdings]

Thank you, Cody, and good afternoon, everyone. The trends we experienced in the fourth quarter largely followed prior quarters, with year-over-year volume-driven declines in our U.S. pumping segment offsetting continued gains in our concrete waste management business. Specifically, lingering high interest rates during our fourth fiscal quarter affected the timing of more rate-sensitive commercial projects, while increased commercial building vacancy rates continued to delay the start of new construction. Conversely, our concrete waste management business sustained its double-digit growth, fueled by strong market share expansion and our ability to improve pricing. We anticipate this positive momentum will continue. In the U.K., the impacts of sustained higher interest rates on commercial project volume largely followed similar trends we experienced domestically, but our infrastructure projects and improved pricing held up well considering the market backdrop. Despite the challenges in the U.S.

[Bruce Young, CEO at Concrete Pumping Holdings]

pumping market, our disciplined fleet management and cost control strategies enabled us to increase Adjusted EBITDA margins and generate robust Free Cash Flow in the fourth quarter. In fact, an $11 million reduction in year-over-year equipment expenditure, coupled with strong proceeds from sale of the equipment, resulted in a 5% increase in Free Cash Flow compared to last year, allowing us to lower our year-over-year Net Debt by $42 million and further reduce our leverage. This flexible capital expenditure strategy, combined with our strong unit economics, expanded liquidity, and improving balance sheet strength, positions us well for a market recovery in fiscal 2025 and beyond. Turning to specific comments by end market, within our commercial end market, we continue to experience softness across a variety of commercial work, especially in light commercial and office buildings, which tend to be more interest rate sensitive.

[Bruce Young, CEO at Concrete Pumping Holdings]

Larger commercial projects remain mostly durable but continue to move at a slower pace given the economic backdrop. Our residential end market remained resilient, especially considering the interest rate environment. In fact, our mix of U.S. concrete pumping work in the residential end market was resilient at 32% of total revenue on a trailing 12-month basis. 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 imbalance in housing will continue to support home building activity, especially as home builders 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. Offsetting some of our commercial market softness, revenue share in our infrastructure markets grew slightly year-over-year in the fourth quarter.

[Bruce Young, CEO at Concrete Pumping Holdings]

In the U.K., infrastructure growth has continued, and our strong U.S. national footprint allowed us to win more work. We expect our infrastructure business to grow in fiscal year 2025 due to the funding environment in the U.K., as well as opportunities domestically from the conversion of our allocated budget funding into project starts within the Infrastructure Investment and Jobs Act. I will now let Iain address our financial results in more detail before I return to provide some concluding remarks. Iain?

[Iain Humphries, CFO at Concrete Pumping Holdings]

Thanks, Bruce, and good afternoon, everyone. I'll keep my prepared remarks mostly focused on our fourth quarter results, and an analysis of our full year can be found in our supplemental investor presentation as well as within our Form 10-K. In the fourth quarter, revenue was $111.5 million compared to $120.2 million in the same year-ago quarter. The decrease is mostly attributable to a decline in our U.S. concrete pumping segment due to the slowdown in commercial construction volume and an oversaturation of concrete pumps in certain markets. Revenue in our U.S. concrete pumping segment, mostly operating under the Brundage-Bone brand, was $74.5 million compared to $85 million in the prior year quarter. For our U.K. operations, operating largely under the Camfaud brand, revenue was $17.1 million compared to $17.4 million in the same year-ago quarter.

[Iain Humphries, CFO at Concrete Pumping Holdings]

When excluding the foreign exchange translation effects from the British pound, revenue for our UK operations decreased approximately 6% in the fourth quarter, primarily due to lower construction volumes. Revenue in our U.S. concrete waste management services segment, operating under the Eco-Pan brand, increased 11% to $19.8 million compared to $17.8 million in the prior year quarter. This strong organic increase was driven by increased volumes and sustained improvement in pricing. Returning to our consolidated results, gross margin in the fourth quarter increased 80 basis points to 41.5% compared to 40.7% in the same year-ago quarter. The improved margin was primarily due to continued improvement in our cost control initiatives that include improved labor utilization and repair and maintenance efficiencies.

[Iain Humphries, CFO at Concrete Pumping Holdings]

General and administrative expenses in the fourth quarter declined 9% to $27 million compared to $29.6 million in the prior year quarter, primarily due to non-cash currency translation gains and a lower amortization expense. As a percentage of revenue, G&A costs were 24.2% in the fourth quarter compared to 24.6% in the prior year quarter. Net income available to common shareholders in the fourth quarter was $9 million, or $0.16 per diluted share, and this is largely unchanged compared to the same year-ago quarter. Consolidated Adjusted EBITDA in the fourth quarter decreased slightly to $33.7 million compared to $35.8 million in the same year-ago quarter. However, Adjusted EBITDA margin increased 40 basis points to 30.2% compared to 29.8% in the same year-ago quarter. As discussed previously, the improvement in margin on lower revenue was driven by strong variable cost control and a disciplined approach to managing our fleet.

[Iain Humphries, CFO at Concrete Pumping Holdings]

In our U.S. concrete pumping business, Adjusted EBITDA declined to $19.3 million compared to $23.4 million in the same year-ago quarter. In our U.K. business, Adjusted EBITDA increased 18% to $5.2 million compared to $4.4 million in the same year-ago quarter. And for our U.S. concrete waste management business, Adjusted EBITDA increased 12% to $9.1 million compared to $8.1 million in the same year-ago quarter. Additionally, Free Cash Flow increased 26% in the fourth quarter to $24 million compared to $19 million in the same year-ago quarter. This includes proactive steps that we have taken to turn our net replacement CapEx negative in the fourth quarter, which further highlights the flexibility we have in our fleet investments. Turning to liquidity, at October 31, 2024, we had total debt outstanding of $375 million and net debt of $332 million.

[Iain Humphries, CFO at Concrete Pumping Holdings]

This is a decrease of $46 million over the course of the year, which is a testament to our strong free cash flow generation. This equates to a net debt-to-EBITDA leverage ratio of three times, which was our guided target for the 2024 fiscal year. We had approximately $378 million of liquidity as of October 31, 2024, which includes cash on the balance sheet and availability from our ABL facility. We remain in a strong liquidity position, which provides optionality to responsibly pursue value-added investment opportunities like accretive M&A or the organic investment in our fleet of equipment to support our overall long-term growth strategy.

[Iain Humphries, CFO at Concrete Pumping Holdings]

Now looking at the terms of our credit facilities, our ABL facility will mature in September of 2029, and although our senior notes have more than a year until they come due in February of 2026, we believe there's encouraging momentum in the market that could support an opportunistic refinance. Now moving to our share buyback plan, during the fourth quarter, we repurchased approximately 423,000 shares for $2.5 million, or an average price of $5.89. Since the buyback was initiated in 2022, we have repurchased approximately $18 million of our stock and have an additional $17 million authorized through March of 2025. We believe our share buyback plan demonstrates both our commitment to delivering enhanced value to shareholders and our confidence in our strategic growth plan.

[Iain Humphries, CFO at Concrete Pumping Holdings]

Moving now into our 2025 full-year guidance, we expect fiscal year revenue to range between $425 and $445 million, Adjusted EBITDA to range between $115 and $125 million, and Free Cash Flow, which we define as Adjusted EBITDA less net replacement CapEx and less cash paid for interest, to be at least $65 million. Please note that this outlook assumes a return to our more normal typical seasonality, with roughly 45% of our revenue incurring in the first half of 2025 and the balance in the back half of the year. With that, I will now turn the call back over to Bruce.

[Bruce Young, CEO at Concrete Pumping Holdings]

Thanks, Iain. In summary, while construction markets remain softer in 2024, particularly in the commercial end market, we believe that we are well positioned relative to our competitors to execute in a challenging environment due to our unique value proposition to our customers given our national footprint, market diversification, and the breadth, depth, and agility of our equipment fleet. Furthermore, our strong balance sheet and healthy liquidity positions us well for continued growth investments and other strategies to deliver superior shareholder value. As we look towards 2025 and remain focused on the long-term strategic aspect of our business that we can meaningfully influence, including the consistent and disciplined execution of our strategic growth plan, resolute adherence to our leading commercial strategy, and prudent cost control through ongoing operational excellence.

[Bruce Young, CEO at Concrete Pumping Holdings]

Equally, we are hopeful that a return of more seasonal weather patterns coupled with an expected improvement in commercial construction volumes will stimulate demand. In fact, we expect that overall construction volumes in the U.S. and U.K. in 2025 will increase by low single digits and pricing will increase the same. As Iain mentioned, our 2025 outlook is predominantly back half-weighted, which reflects typical seasonality but also considers our estimation that the incoming administration's pro-growth onshoring agenda, combined with the gradual easing of interest rates, can accelerate our domestic concrete pumping and Eco-Pan business when these policies take hold. In the U.K., our team continues to secure nationally critical energy, road, and rail projects in addition to the well-documented HS2 project, as the new government seeks to drive broader economic and productivity growth.

[Bruce Young, CEO at Concrete Pumping Holdings]

With that, I would now like to turn the call back over to the operator for Q&A. Matt?

[Operator]

Great. Thank you so much. We'll now be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. First question is from Andrew Wittmann from Baird. Please go ahead.

[Andrew Wittmann, Senior Research Analyst at Baird]

Great. Thanks for taking my questions, and good afternoon, guys. I guess I just wanted to drill in a little bit on the CapEx here. So you flipped the net CapEx here to slightly negative, disposing more than you purchased. Iain, I was just hoping maybe you could just help us think about $25. I heard the greater than $65 million of free cash flow under your definition, but maybe can you break it down a little bit? How much kind of gross CapEx do you think is going to go into new fleets, and how much are the sales going to remain elevated? Just if you could help us just understand how you're thinking about the overall CapEx budget for 2025.

[Iain Humphries, CFO at Concrete Pumping Holdings]

Yeah, absolutely. And thanks for the question, Andy. So yes, just to recap on 2024, I mean, as you know, during the year, based on the volume demand, we had sufficient capacity in our fleet, so we invested less on the replacement side, and it was roughly around 4% of revenue. Now, our more normalized target for replacement is around 6% or 7% of revenue, and that's what we have placed into the guidance for 2025, with the expectation that we feel good about the fleet that we have and the capacity that we've got, but really making sure that the uptime that we would expect is more reflective of that sort of more normal 6% or 7% of revenue.

[Iain Humphries, CFO at Concrete Pumping Holdings]

In addition to that, I would say, Andy, we might have like $3-$4 million on the gross side for Eco-Pan, but again, as we look for volume coming through the year, then we'll consider that within the guidance, but that's really the starting point if that's helpful. On the trade side, we would expect unusual trade activity. I mean, as you know, about 5% of our fleet will age out each year. We don't expect that to change.

[Andrew Wittmann, Senior Research Analyst at Baird]

Got it. Okay. Thank you for that. I guess maybe the next thing I wanted to dig into, you kind of had a comment there on the senior notes coming due about a year from now. You said something about the market conditions may allow you to refinance. Are you thinking right now the primary path is refinance senior notes with new senior notes, or would you expand the ABL? What's kind of the pricing the way you're approaching this since it sounds like you're kind of thinking about it already?

[Iain Humphries, CFO at Concrete Pumping Holdings]

Yeah, we are. I mean, obviously, we have a number of options available to us, and we're looking for best execution. So yeah, we think the market has some momentum right now, so we think that it's a good time to be considering that window. And we'll be opportunistic as we see that market play out, Andy. Obviously, as you know, we upsized the ABL at the end of last year, so we think we have some good structural elements for good execution.

[Andrew Wittmann, Senior Research Analyst at Baird]

Got it, and then Bruce, just for you, obviously, getting EBITDA margins up year-over-year on tough volumes is always a testament to how you're running the business. Could you maybe just talk about some of the major buckets that allowed you to drive that kind of performance? Maybe things like fuel. It's nice that there was a comment on repair and maintenance as well that you made. And maybe if you could drill into how much that helps you, and are you starting to defer stuff because the utilization rates of the equipment maybe aren't as high, so you can defer that and grab it later when the equipment's more in demand? And maybe if you could just address how labor's factoring into your P&L as well, if you're able to optimize that further.

[Bruce Young, CEO at Concrete Pumping Holdings]

Sure. As it comes to fuel pricing, fuel pricing has gotten better for us over the last several months, and so we have had some benefit of that. We believe we've done a much better job of managing our labor within the business to improve the margin as well. And then pricing on spare parts for repair and maintenance have gone back to lower levels than what we had seen the previous year, and we've been able to take advantage of some large orders to improve that. And there's just being more aware of preventative maintenance and making sure that we get out on top of things before they become serious issues. We have not deferred any maintenance at all on any units, so we feel like we've done a good job of controlling those rates, getting those margins down, and really preparing ourselves for the future.

[Andrew Wittmann, Senior Research Analyst at Baird]

Got it. Okay. I think I'll leave it there for the evening. Thank you so much.

[Iain Humphries, CFO at Concrete Pumping Holdings]

Thanks, Andy.

[Bruce Young, CEO at Concrete Pumping Holdings]

Thanks, Andy.

[Operator]

Next question is from Tim Mulrooney from William Blair. Please go ahead.

[Tim Mulrooney, Group Head of the Global Services Sector and Senior Analyst at William Blair]

Bruce, Iain, good afternoon.

[Bruce Young, CEO at Concrete Pumping Holdings]

Hey, Tim.

[Tim Mulrooney, Group Head of the Global Services Sector and Senior Analyst at William Blair]

So it looks like your guidance is calling for about 7% EBITDA growth at the midpoint for the full year. This is kind of following a 7% decline or so on the back half of fiscal 2024. So it sounds like you're expecting a nice inflection here. Just curious how you're thinking about the cadence of EBITDA growth as you move through the year. Do you expect it to be pretty steady, or is the expectation that this growth will be more front-end or back-end loaded?

[Iain Humphries, CFO at Concrete Pumping Holdings]

Yeah, Tim, it really ties to that return to more normal seasonality that we mentioned in our prepared remarks. I mean, if you look at 2024, we were more sort of 46-weighted on the front half of the year, and we now expect to be more back to the sort of 45-55. So the cadence of EBITDA, I mean, obviously, Q1 is a slower quarter for us, obviously being through winter, so we would expect margin to build through the year, ultimately resulting in at least a 1% margin pickup through the end of the year. So we expect some improvement as we go through the year, but it's likely going to be more back-end weighted, just like the change in that revenue phasing.

[Tim Mulrooney, Group Head of the Global Services Sector and Senior Analyst at William Blair]

Okay. Got you. Thank you. And kind of building off of the conversation you were having with Andy, you mentioned previously, I think last quarter maybe or two quarters ago, you're running at about 70% fleet utilization, down a bit from that 80% target. Curious where utilization currently stands today?

[Iain Humphries, CFO at Concrete Pumping Holdings]

Yeah, it's right around that 70%. So again, it comes back to the fleet utilization and the expectations as we go into 2025. We think there's an opportunity in there, which also means to your earlier point, Tim, on margin contribution. We think we have capacity to improve that as the demand moves.

[Tim Mulrooney, Group Head of the Global Services Sector and Senior Analyst at William Blair]

Okay. Got it. Moving to the infrastructure business, which I think you said grew a little bit in the fourth quarter. It was good to hear, but now you've got this incoming administration, you focus on cost reductions. Do you see any risk to the funding environment for some of the large infrastructure projects that you work on, whether or not they're tied to the IIJA, maybe in both cases, or has most of that money been set aside for these projects or already kind of set aside or deployed?

[Iain Humphries, CFO at Concrete Pumping Holdings]

Yeah. So we see this as an opportunity for us, Tim, where the money has been set aside for those projects. It's been allocated to those projects, but it hasn't been awarded to contractors yet. And a lot of that has to do with the amount of challenges that the municipalities, states have had to meet the requirements. And we believe as they lessen some of those requirements, whether they're environmental or labor, that it may accelerate some of those projects, and we should see infrastructure pick up this year and into 2026.

[Tim Mulrooney, Group Head of the Global Services Sector and Senior Analyst at William Blair]

All right. Thank you very much. I'll leave it there, and have a good night.

[Iain Humphries, CFO at Concrete Pumping Holdings]

All right. Thanks, Tim.

[Operator]

Next question is from Steven Fisher from UBS. Please go ahead.

[Steven Fisher, Managing Director and Senior Equity Research Analyst at UBS]

Thanks. Good afternoon. Just to follow up again on that sort of return to normal seasonality, is there a particular quarter that you expect the U.S. concrete pumping revenues to inflect back to positive year-over-year growth from what we're seeing now, the declines?

[Iain Humphries, CFO at Concrete Pumping Holdings]

Yeah. It's likely going to be more into the third quarter, and that's really back to that sort of back half-weighting. And that gets us back to that sort of more normalized 45-55 split. That's where I would expect the inflection to be. It'll be close through the end of the second quarter, but I would say the start of the third quarter.

[Steven Fisher, Managing Director and Senior Equity Research Analyst at UBS]

Okay. That's helpful. And you mentioned, Bruce, that the current level of activity is sort of a continuation of trends you've seen for a little while now. I mean, I'm just curious how your customer conversations changed, if they did at all, after the election?

[Iain Humphries, CFO at Concrete Pumping Holdings]

The conversations with the customers are a lot more optimistic. Now, there are several things that I think that have to happen before that shifts into more positive results for us, and that's why we're thinking more towards the second half of the year than the first half of the year. But there are projects that were delayed that are now ramping up that we should be placing concrete on in the next quarter, sizable projects. We see other projects that we think that had been put on hold that we think they will be starting as well. So we're starting to be a lot more optimistic about the second half of the year.

[Steven Fisher, Managing Director and Senior Equity Research Analyst at UBS]

Okay. And you mentioned that there's an imbalance of supply and demand, too many concrete pumps in certain markets. Can you clarify? Is that referring to certain geographic markets, or is it sort of end vertical markets, or maybe both? And just maybe some detail on what specifically you're referring to there.

[Iain Humphries, CFO at Concrete Pumping Holdings]

We've talked about this before, but all the concrete pumps come from overseas, whether they come from South Korea, China, or Germany, and so they're always ordered well in advance, and so the oversupply came when 2023 and 2024 really didn't meet the level of growth that the industry had anticipated or the manufacturers had anticipated, so they had those assets. They did a good job of getting them out of their facilities into concrete pumpers' hands, but as we've talked to the manufacturers for 2025, their expectations are much, much lower, and we expect that that will play out. It will improve for us over this year and into next year.

[Operator]

Okay. Thank you very much.

[Iain Humphries, CFO at Concrete Pumping Holdings]

Thanks, Steve.

[Bruce Young, CEO at Concrete Pumping Holdings]

Thanks, Steve.

[Operator]

As a reminder, if you would like to ask a question, it is Star One. Next question here is from Jean Ramirez from D.A. Davidson. Please go ahead.

[Jean Ramirez, SVP and Senior Research Analyst at D.A. Davidson]

Hi. Good afternoon. Thank you for the time.

[Iain Humphries, CFO at Concrete Pumping Holdings]

Hi.

[Jean Ramirez, SVP and Senior Research Analyst at D.A. Davidson]

Just following regarding the U.S. Concrete Pumping's inflection third quarter, could you talk about what sort of demand conditions are baked into this outlook?

[Iain Humphries, CFO at Concrete Pumping Holdings]

Yeah. I mean, around demand conditions, I mean, I think this is where we're—I mean, Bruce mentioned it in some of these prepared remarks around manufacturing reshoring and really the new administration coming in on the back of that optimism and really what the Federal Reserve are doing, improving that momentum. We think it will still take about five to six months for that to cycle through into new project starts and improve momentum. So that's why we think that it's going to be more back-end weighted next year.

[Steven Fisher, Managing Director and Senior Equity Research Analyst at UBS]

Got it. And regarding the margin for U.S. concrete pumping, given some of the over-saturation comments that you mentioned, do you expect the margins to be around the same levels experienced in fiscal 2024?

[Iain Humphries, CFO at Concrete Pumping Holdings]

Yeah. So we've got margin improvement projected for the consolidated business in 2025 compared to 2024, and we've got some nice momentum certainly in Q4 versus Q3 on the U.S. pumping side. We expect that will continue into 2025. So we would expect margin improvement through the business next year, including the U.S. pumping business, based on the controllable elements that we actually can influence.

[Steven Fisher, Managing Director and Senior Equity Research Analyst at UBS]

Could you provide some additional color into what this improvement looks like? Is it a 1% increase overall?

[Iain Humphries, CFO at Concrete Pumping Holdings]

Yeah. If you take the, I mean, if you just take the midpoint of the guide compared to 2024, it's about a 1% improvement year-over-year.

[Steven Fisher, Managing Director and Senior Equity Research Analyst at UBS]

All right. Appreciate that. And going back to waste management, and forgive me if I missed it, but could you talk about what caused the big jump in margins from the third quarter to the fourth quarter there?

[Iain Humphries, CFO at Concrete Pumping Holdings]

It wasn't any one thing in specific. I mean, obviously, we continue to invest in that business to really expand margins over time. So you will see some slight margin fluctuation as we invest in the business for growth. I mean, obviously, if you look at the year-over-year comparison, the businesses, I think we grew about 15% year-over-year. So you might see some small margin change, but obviously, it's still a very healthy margin and a great Free Cash Flow part of our business that we're going to drive that continued organic growth on over time.

[Steven Fisher, Managing Director and Senior Equity Research Analyst at UBS]

Just one last one from me. Going back to U.S. pumping margins, what sort of outlook do you guys see regarding pricing? Do you expect any sort of pressure in fiscal 2025?

[Iain Humphries, CFO at Concrete Pumping Holdings]

We do expect there'll be some additional pressure in 2025 until the markets start shifting, and then that pressure will ease on us, and we do expect that we will have success with price increases this year and into the next.

[Steven Fisher, Managing Director and Senior Equity Research Analyst at UBS]

Is there sort of timing or, yeah, is there a timing to see when this pressure eases off, or is it just a quarter-by-quarter basis?

[Iain Humphries, CFO at Concrete Pumping Holdings]

It's quarter-by-quarter.

[Steven Fisher, Managing Director and Senior Equity Research Analyst at UBS]

Yeah. I appreciate it. Thank you so much for the time.

[Iain Humphries, CFO at Concrete Pumping Holdings]

Thank you.

[Steven Fisher, Managing Director and Senior Equity Research Analyst at UBS]

Thank you.

[Operator]

This concludes the question-and-answer session. I'd like to turn the floor back to management for any closing comments.

[Bruce Young, CEO at Concrete Pumping Holdings]

Thank you, Matt. 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 2025 results in March. Thank you.

[Operator]

This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.

Participants

Executives

• Iain Humphries, CFO
• Cody Slach, Director of Investor Relations

Analysts

• Tim Mulrooney, Group Head of the Global Services Sector and Senior Analyst at William Blair
• Steven Fisher, Managing Director and Senior Equity Research Analyst at UBS
• Bruce Young, CEO at Concrete Pumping Holdings
• Jean Ramirez, SVP and Senior Research Analyst at D.A. Davidson
• Andrew Wittmann, Senior Research Analyst at Baird