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Concrete Pumping Holdings, Inc. - Quarter Report: 2023 April (Form 10-Q)

bbpp20230430_10q.htm
 

 

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

For the quarterly period ended April 30, 2023

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____ to ____

 

Commission File Number: 001-38166

 

CONCRETE PUMPING HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware

83-1779605

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

500 E. 84th Avenue, Suite A-5

80229

Thornton, Colorado

 

(Address of principal executive offices)

(Zip Code)

 

(303) 289-7497

(Registrant's telephone number, including area code)

 

None

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

BBCP

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of June 5, 2023, the registrant had 54,884,923 shares of common stock, par value $0.0001 per share, issued and outstanding. 

 

 
 

CONCRETE PUMPING HOLDINGS, INC.

FORM 10-Q

FOR THE QUARTER ENDED April 30, 2023

 

 

 

Page

Part I. Financial Information

 

 

 

 

 

Item 1.

Financial Statements:

 

 

 

Condensed Consolidated Balance Sheets (Unaudited)

3

 

 

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)

4

 

 

Condensed Consolidated Statements of Changes in Stockholders Equity (Unaudited)

6
 

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

8
 

 

Notes to Unaudited Condensed Consolidated Financial Statements

10

 

Item 2.

Managements Discussion and Analysis of Financial Condition and Results of Operations

24

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35

 

Item 4.

Controls and Procedures

35

 

 

 

 

Part II. Other Information

 

 

 

 

 

 

Item 1.

Legal Proceedings

36
 

Item 1A.

Risk Factors

36
 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

36
 

Item 3.

Defaults Upon Senior Securities

36
 

Item 4.

Mine Safety Disclosures

36
 

Item 5.

Other Information

36
 

Item 6.

Exhibits

37
 

 

 

 

  Signatures   38

 

 

PART I

 

ITEM 1.     Financial Statements 

 

Concrete Pumping Holdings, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 

   

As of April 30,

   

As of October 31,

 

(in thousands except per share amounts)

 

2023

   

2022

 

Current assets:

               

Cash and cash equivalents

  $ 6,643     $ 7,482  

Trade receivables, net of allowance for doubtful accounts of $871 and $941, respectively

    62,834       62,882  

Inventory, net

    6,349       5,532  

Income taxes receivable

    -       485  

Prepaid expenses and other current assets

    10,176       5,175  

Total current assets

    86,002       81,556  
                 

Property, plant and equipment, net

    429,154       419,377  

Intangible assets, net

    129,835       137,754  

Goodwill

    222,434       220,245  

Right-of-use operating lease assets

    25,444       24,833  

Other non-current assets

    1,973       2,026  

Deferred financing costs

    1,437       1,698  

Total assets

  $ 896,279     $ 887,489  
                 
                 

Current liabilities:

               

Revolving loan

  $ 60,947     $ 52,133  

Operating lease obligations, current portion

    4,651       4,001  

Finance lease obligations, current portion

    113       109  

Accounts payable

    7,721       8,362  

Accrued payroll and payroll expenses

    11,959       13,341  

Accrued expenses and other current liabilities

    23,323       32,156  

Income taxes payable

    746       178  
Warrant liability, current portion     1,302       -  

Total current liabilities

    110,762       110,280  
                 

Long term debt, net of discount for deferred financing costs

    371,172       370,476  

Operating lease obligations, non-current

    21,069       20,984  

Finance lease obligations, non-current

    112       169  

Deferred income taxes

    76,125       74,223  
Warrant liability, non-current     -       7,030  

Total liabilities

    579,240       583,162  
                 

Commitments and contingencies (Note 12)

               
                 

Zero-dividend convertible perpetual preferred stock, $0.0001 par value, 2,450,980 shares issued and outstanding as of April 30, 2023 and October 31, 2022

    25,000       25,000  
                 

Stockholders' equity

               

Common stock, $0.0001 par value, 500,000,000 shares authorized, 55,015,572 and 56,226,191 issued and outstanding as of April 30, 2023 and October 31, 2022, respectively

    6       6  

Additional paid-in capital

    381,599       379,395  

Treasury stock

    (12,894 )     (4,609 )

Accumulated other comprehensive loss

    (2,498 )     (9,228 )

Accumulated deficit

    (74,174 )     (86,237 )

Total stockholders' equity

    292,039       279,327  
                 

Total liabilities and stockholders' equity

  $ 896,279     $ 887,489  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

Concrete Pumping Holdings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 

   

Three Months Ended April 30,

   

Six Months Ended April 30,

 

(in thousands, except share and per share amounts)

 

2023

   

2022

   

2023

   

2022

 
                                 

Revenue

  $ 107,791     $ 96,482     $ 201,366     $ 181,930  
                                 

Cost of operations

    64,317       57,544       121,438       108,866  

Gross profit

    43,474       38,938       79,928       73,064  
                                 

General and administrative expenses

    30,258       28,567       57,299       55,308  

Income from operations

    13,216       10,371       22,629       17,756  
                                 

Other income (expense):

                               

Interest expense, net

    (7,348 )     (6,346 )     (14,219 )     (12,608 )

Change in fair value of warrant liabilities

    1,172       2,474       5,728       2,474  

Other income, net

    13       13       34       52  

Total other expense

    (6,163 )     (3,859 )     (8,457 )     (10,082 )
                                 

Income before income taxes

    7,053       6,512       14,172       7,674  
                                 

Income tax expense

    1,465       527       2,109       506  
                                 

Net income

    5,588       5,985       12,063       7,168  
                                 

Less accretion of liquidation preference on preferred stock

    (427 )     (427 )     (868 )     (868 )
                                 

Income available to common shareholders

  $ 5,161     $ 5,558     $ 11,195     $ 6,300  
                                 

Weighted average common shares outstanding

                               

Basic

    53,329,576       53,901,278       53,467,897       53,782,345  

Diluted

    54,224,611       54,795,262       54,343,461       54,738,504  
                                 

Net income per common share

                               

Basic

  $ 0.09     $ 0.10     $ 0.20     $ 0.11  

Diluted

  $ 0.09     $ 0.10     $ 0.20     $ 0.11  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

Concrete Pumping Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

 

   

Three Months Ended April 30,

   

Six Months Ended April 30,

 

(in thousands)

 

2023

   

2022

   

2023

   

2022

 
                                 

Net income

  $ 5,588     $ 5,985     $ 12,063     $ 7,168  
                                 

Other comprehensive income (loss):

                               

Foreign currency translation adjustment

    1,678       (4,984 )     6,730       (6,424 )
                                 

Total comprehensive income

  $ 7,266     $ 1,001     $ 18,793     $ 744  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

Concrete Pumping Holdings, Inc.

Condensed Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)

 

   

Common Stock

   

Additional Paid-In Capital

   

Treasury Stock

   

Accumulated Other Comprehensive Income (loss)

   

Accumulated Deficit

   

Total

 

(in thousands, except share amounts)

 

Shares

   

Amount

                                         

Balance, January 31, 2023

    55,407,330     $ 6     $ 380,535     $ (10,105 )   $ (4,176 )   $ (79,762 )   $ 286,498  

Stock-based compensation expense

    -       -       1,064       -       -       -       1,064  

Shares issued under stock-based program, net of treasury shares purchased for tax withholding

    (52,226 )     -       -       (467 )     -       -       (467 )

Treasury shares purchased under share repurchase program

    (339,532 )     -       -       (2,322 )     -       -       (2,322 )

Net income

    -       -       -       -       -       5,588       5,588  

Foreign currency translation adjustment

    -       -       -       -       1,678       -       1,678  

Balance, April 30, 2023

    55,015,572     $ 6     $ 381,599     $ (12,894 )   $ (2,498 )   $ (74,174 )   $ 292,039  

 

   

Common Stock

   

Additional Paid-In Capital

   

Treasury Stock

   

Accumulated Other Comprehensive Income (loss)

   

Accumulated Deficit

   

Total

 

(in thousands, except share amounts)

 

Shares

   

Amount

                                         

Balance, January 31, 2022

    56,700,148     $ 6     $ 375,754     $ (995 )   $ 2,231     $ (113,730 )   $ 263,266  

Stock-based compensation expense

    -       -       1,351       -       -       -       1,351  

Forfeiture of restricted stock

    (41,641 )     -       -       -       -       -       -  

Shares issued under stock-based program, net of treasury shares purchased for tax withholding

    9,458       -       43       (478 )     -       -       (435 )

Net income

    -       -       -       -       -       5,985       5,985  

Foreign currency translation adjustment

    -       -       -       -       (4,984 )     -       (4,984 )

Balance, April 30, 2022

    56,667,965     $ 6     $ 377,148     $ (1,473 )   $ (2,753 )   $ (107,745 )   $ 265,183  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

Concrete Pumping Holdings, Inc.

Condensed Consolidated Statements of Changes in Stockholders' Equity

(Unaudited) - (Continued)

 

   

Common Stock

   

Additional Paid-In

   

Treasury

   

Accumulated Other Comprehensive

   

Accumulated

         

(in thousands, except share amounts)

 

Shares

   

Amount

   

Capital

   

Stock

   

Income (loss)

   

Deficit

   

Total

 

Balance, October 31, 2022

    56,226,191     $ 6     $ 379,395     $ (4,609 )   $ (9,228 )   $ (86,237 )   $ 279,327  

Stock-based compensation expense

    -       -       2,204       -       -       -       2,204  

Forfeiture of restricted stock

    (1,312 )     -       -       -       -       -       -  

Shares issued under stock-based program, net of treasury shares purchased for tax withholding

    (109,318 )     -       -       (1,040 )     -       -       (1,040 )

Treasury shares purchased under share repurchase program

    (1,099,989 )     -       -       (7,245 )     -       -       (7,245 )

Net income

    -       -       -       -       -       12,063       12,063  

Foreign currency translation adjustment

    -       -       -       -       6,730       -       6,730  

Balance, April 30, 2023

    55,015,572     $ 6     $ 381,599     $ (12,894 )   $ (2,498 )   $ (74,174 )   $ 292,039  

 

   

Common Stock

   

Additional Paid-In

   

Treasury

   

Accumulated Other Comprehensive

   

Accumulated

         

(in thousands, except share amounts)

 

Shares

   

Amount

   

Capital

   

Stock

   

Income (loss)

   

Deficit

   

Total

 

Balance, October 31, 2021

    56,564,642     $ 6     $ 374,272     $ (461 )   $ 3,671     $ (114,913 )   $ 262,575  

Stock-based compensation expense

    -       -       2,831       -       -       -       2,831  

Forfeiture of restricted stock

    (41,641 )     -       -       -       -       -       -  

Shares issued under stock-based program, net of treasury shares purchased for tax withholding

    144,964       -       45       (1,012 )     -       -       (967 )

Net income

    -       -       -       -       -       7,168       7,168  

Foreign currency translation adjustment

    -       -       -       -       (6,424 )     -       (6,424 )

Balance, April 30, 2022

    56,667,965     $ 6     $ 377,148     $ (1,473 )   $ (2,753 )   $ (107,745 )   $ 265,183  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

Concrete Pumping Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

   

For the Six Months Ended April 30,

 

(in thousands)

 

2023

   

2022

 

Net income

  $ 12,063     $ 7,168  

Adjustments to reconcile net income to net cash provided by operating activities:

               

Non-cash operating lease expense

    2,317       1,134  

Foreign currency adjustments

    (1,106 )     -  

Depreciation

    19,523       16,843  

Deferred income taxes

    1,128       236  

Amortization of deferred financing costs

    957       916  

Amortization of intangible assets

    9,647       11,471  

Stock-based compensation expense

    2,204       2,831  

Change in fair value of warrant liabilities

    (5,728 )     (2,474 )

Net gain on the sale of property, plant and equipment

    (640 )     (910 )

Provision for bad debt

    (70 )     50  

Net changes in operating assets and liabilities:

               

Trade receivables

    867       (8,381 )

Inventory

    (681 )     (553 )

Prepaid expenses and other assets

    (3,216 )     (3,882 )

Accounts payable

    (1,112 )     (1,249 )

Accrued payroll, accrued expenses and other liabilities

    (5,061 )     (1,809 )

Net cash provided by operating activities

    31,092       21,391  
                 

Cash flows from investing activities:

               

Purchases of property, plant and equipment

    (34,745 )     (60,332 )

Proceeds from sale of property, plant and equipment

    4,416       4,636  

Purchases of intangible assets

    (800 )     (1,450 )

Net cash used in investing activities

    (31,129 )     (57,146 )
                 

Cash flows from financing activities:

               

Proceeds on revolving loan

    174,504       179,933  

Payments on revolving loan

    (167,213 )     (150,759 )

Purchase of treasury stock

    (8,285 )     (1,012 )

Other financing activities

    (58 )     (5 )

Net cash provided by (used in) financing activities

    (1,052 )     28,157  

Effect of foreign currency exchange rate on cash

    250       970  

Net decrease in cash and cash equivalents

    (839 )     (6,628 )

Cash and cash equivalents:

               

Beginning of period

    7,482       9,298  

End of period

  $ 6,643     $ 2,670  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

Concrete Pumping Holdings, Inc.

Condensed Consolidated Statements of Cash Flows (Continued)

(Unaudited)

 

   

Six Months Ended April 30,

 

(in thousands)

 

2023

   

2022

 

Supplemental cash flow information:

               

Cash paid for interest

  $ 13,000     $ 11,589  

Cash paid (refunded) for income taxes

  $ (182 )   $ 145  
                 

Non-cash investing and financing activities:

               

Equipment purchases included in accrued expenses and accounts payable

  $ 2,566     $ 6,335  

Operating lease right-of-use assets recorded upon adoption of ASC 842

  $ -     $ 18,625  

Operating lease liabilities recorded upon adoption of ASC 842

  $ -     $ 18,593  

Operating lease assets obtained in exchange for new operating lease liabilities

  $ 3,658     $ 2,056  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

Concrete Pumping Holdings, Inc. 

Notes to the Condensed Consolidated Financial Statements (Unaudited)

 

Note 1. Organization and Description of Business

 

Organization

 

Concrete Pumping Holdings, Inc. (the “Company”) is a Delaware corporation headquartered in Denver, Colorado. The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries including Brundage-Bone Concrete Pumping, Inc. (“Brundage-Bone”), Capital Pumping (“Capital”), Camfaud Group Limited (“Camfaud”) and Eco-Pan, Inc. (“Eco-Pan”).

 

Nature of business

 

Brundage-Bone and Capital are concrete pumping service providers in the United States ("U.S.") and Camfaud is a concrete pumping service provider in the United Kingdom (“U.K.”). Their core business is the provision of concrete pumping services to general contractors and concrete finishing companies in the commercial, infrastructure and residential sectors. Most often equipment returns to a “home base” nightly and these service providers do not contract to purchase, mix, or deliver concrete. Brundage-Bone and Capital collectively have approximately 100 branch locations across approximately 20 states, with its corporate headquarters in Denver, Colorado. Camfaud has approximately 30 branch locations throughout the U.K., with its corporate headquarters in Epping (near London), England.

 

Eco-Pan provides industrial cleanup and containment services, primarily to customers in the construction industry. Eco-Pan uses containment pans specifically designed to hold waste products from concrete and other industrial cleanup operations. Eco-Pan has 19 operating locations across the U.S. with its corporate headquarters in Denver, Colorado. In addition, we have concrete waste management operations under our Eco-Pan brand name in the U.K. and currently operate from a shared Camfaud location.

 

Seasonality

 

The Company’s sales are historically seasonal, with lower revenue in the first quarter and higher revenue in the fourth quarter of each year. Such seasonality also causes the Company’s working capital cash flow requirements to vary from quarter to quarter and primarily depends on the variability of weather patterns with the Company generally having lower sales volume during the winter and spring months.

 

Note 2. Summary of Significant Accounting Policies

 

We describe our significant accounting policies in Note 2 of the notes to consolidated financial statements in our annual report on Form 10-K for the year ended October 31, 2022 ("Annual Report"). During the six months ended April 30, 2023, there were no significant changes to those accounting policies.

 

Basis of presentation

 

Our condensed consolidated balance sheet as of October 31, 2022, which was derived from our audited consolidated financial statements and our unaudited interim consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. The enclosed statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present a fair statement of the interim periods. The consolidated results of operations and cash flows for the first six months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended October 31, 2022.

 

Certain prior period amounts have been reclassified in order to conform to the current year presentation.

 

10

 

Use of estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue recognition

 

The Company generates revenues primarily from (1) concrete pumping services in both the U.S. and U.K and (2) the Company’s concrete waste services business, both of which are discussed below. In addition, the Company generates an immaterial amount of revenue from the sales of replacement parts to customers. The Company’s delivery terms for replacement part sales are FOB shipping point. Revenue is disaggregated between two accounting standards: (1) ASC 606, Revenue Recognition ("ASC 606") and (2) ASC 842, Leases ("ASC 842").

 

Leases as Lessor

 

Our Eco-Pan pan business involves contracts with customers whereby we are a lessor for the rental component of the contract and therefore, such rental components of the contract are recorded as lease revenue. We account for such rental contracts as operating leases. We recognize revenue from pan rentals in the period earned, regardless of the timing of billing to customers. The lease component of the revenue is disaggregated by a base price that is based on the number of contractual days and a variable component that is based on days in excess of the number of contractual days.

 

The table below summarizes our revenues as presented in our unaudited consolidated statements of operations for the periods ended  April 30, 2023 and 2022 by revenue type and by applicable accounting standard:

 

  

Three Months Ended April 30,

  

Six Months Ended April 30,

 

(in thousands)

 

2023

  

2022

  

2023

  

2022

 

Service revenue - ASC 606

  100,816   91,059   187,182   171,138 

Lease fixed revenue – ASC 842

  2,813   3,353   5,968   6,371 

Lease variable revenue - ASC 842

  4,162   2,070   8,216   4,421 

Total revenue

  107,791   96,482   201,366   181,930 

 

Newly adopted accounting pronouncements

 

Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) - In March 2020, the FASB issued ASU 2020-04, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”). Specifically, to the extent the Company's debt agreements are modified to replace LIBOR with another interest rate index, ASU 2020-04 will permit the Company to account for the modification as a continuation of the existing contract without additional analysis. Companies may generally elect to apply the guidance for periods that include March 12, 2020 through December 31, 2022. Effective October 1, 2021, the Company transitioned all of its GBP borrowings from LIBOR to the Sterling Overnight Index Average ("SONIA") rate. Effective June 29, 2022, the Company transitioned all of its U.S. Dollar borrowings from LIBOR to the Secured Overnight Financing Rate ("SOFR"). See Note 8 for further discussion.

 

ASU 2016-02, Leases ("ASU 2016-02") - In February 2016, the FASB issued ASU 2016-02, which is codified in ASC 842, Leases (“ASC 842”) and supersedes current lease guidance in ASC 840, Leases. ASC 842 requires a lessee to recognize a right-of-use asset ("ROU") and a corresponding lease liability for substantially all leases. The lease liability will be equal to the present value of the remaining lease payments while the right-of-use asset will be similarly calculated and then adjusted for initial direct costs. In addition, ASC 842 expands the disclosure requirements to increase the transparency and comparability of the amount, timing and uncertainty of cash flows arising from leases. In July 2018, the FASB issued ASU 2018-11, Leases ASC 842: Targeted Improvements, which allows entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The new standard is effective for emerging growth companies that have elected to use private company adoption dates for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted the guidance for the year ended October 31, 2022, with an effective date of adoption of November 1, 2021.

 

11

 

Recently issued accounting pronouncements not yet effective

 

ASU 2016-13, Financial Instruments Credit Losses (Topic 326) (“ASU 2016-13”) - In June 2016, the FASB issued ASU No. 2016-13, which, along with subsequently issued related ASUs, requires financial assets (or groups of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected, among other provisions. This ASU is effective for smaller reporting companies with fiscal years beginning after December 15, 2022, with early adoption permitted. The Company plans to adopt the guidance during the first quarter of the fiscal year ending October 31, 2024. The amendments of this ASU should be applied on a modified retrospective basis to all periods presented. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements.

 

Note 3. Business Combinations and Asset Acquisitions

 

The Company completed one asset acquisition during the second quarter of 2023, no acquisitions during the first quarter of fiscal 2023 and five acquisitions during fiscal 2022. All acquisitions either added complementary assets in markets in which the Company already operates or expanded the Company's footprint into adjacent markets. With the exception of the Coastal Carolina Pumping, Inc. ("Coastal") acquisition during the fourth quarter of fiscal 2022, all other transactions qualified as asset acquisitions. Except for the acquisition of Pioneer in the first quarter of fiscal 2022 and Coastal in the fourth quarter of fiscal 2022, these acquisitions were not individually significant to our results of operations. The consideration for the acquisitions in fiscal 2022 consisted of cash and was allocated to the acquired long-lived tangible and intangible assets. 

 

August 2022 (Fiscal 2022) Coastal Acquisition

 

In August 2022, the Company acquired the property, equipment and intangible assets of Coastal for total purchase consideration of $30.8 million, which was paid for using cash and the ABL Facility (defined below). This transaction expanded our operations in the Carolinas and Florida and qualified as a business combination under ASC 805. Accordingly, the Company recorded all assets acquired and liabilities assumed at their acquisition-date fair values. There was no goodwill recognized in this transaction.

 

The following table represents the final allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition-date fair values with any measurement-period adjustments included:

 

(in thousands)    

Consideration paid:

 $30,762 
     

Net assets acquired:

    

Intangible assets

 $2,500 

Property and equipment

  28,500 

Liabilities assumed

  (238

)

Total net assets acquired

 $30,762 

 

All assets were valued using level 3 inputs. The equipment was valued using a market approach while the intangible assets were valued using an income approach based on management’s projections.

 

Identifiable intangible assets acquired consist of customer relationships of $1.7 million and non-compete agreements valued at $0.8 million. The customer relationships were valued using the multi-period excess earnings method. The non-competes were valued using a direct valuation of economic damages approach. The Company determined the useful life of both the customer relationships and non-compete agreements to be 5 years.

 

Concurrent with closing of the asset purchase agreement, the Company signed five leases directly with the seller. The leases were entered into at market rates and the Company recognized an ROU asset and liability of $6.5 million related to these leases.

 

12

 

November 2021 (Fiscal 2022) Pioneer Acquisition

 

In November 2021, the Company acquired the assets, no cash, of Pioneer Concrete Pumping Services (“Pioneer”) for total purchase consideration of $20.2 million, of which, $1.0 million was held back (the “Holdback”) to allow for a post-closing joint inspection of Pioneer’s fleet vehicles. The Holdback had not been paid out as of April 30, 2023. This transaction was treated as an asset acquisition. The Company allocated $19.1 million to the purchase of Pioneer's equipment. The remaining $1.1 million was allocated to a definite-lived assembled workforce intangible asset and a definite-lived customer relationships intangible asset. All assets were valued using level 3 inputs. The equipment was valued using a market approach while the intangible assets were valued using an income approach based on management’s projections. The intangible assets will be amortized over 3 to 5 years.

 

Transaction Costs

 

Transaction costs include expenses for legal, accounting, and other professionals that were engaged in connection with an asset acquisition or business combination. There were no significant transaction costs incurred in each of the three and six months ended April 30, 2023 and 2022.

 

Unaudited Pro Forma Financial Information

 

The following unaudited pro forma financial information presents the combined results of operations for the Company and gives effect to the Coastal business combination discussed above as if it had occurred on November 1, 2020. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have been realized if the Coastal business combination had been completed on November 1, 2020, nor does it purport to project the results of operations of the combined company in future periods. The pro forma financial information does not give effect to any anticipated integration costs related to the acquired company.

 

The unaudited pro forma financial information is as follows:

 

  Three Months Ended April 30,  Six Months Ended April 30, 

(in thousands)

 

2022

  

2022

 

Revenue

 $96,482  $181,930 

Pro forma revenue adjustments by Business Combination

        

Coastal

 $5,757  $9,881 

Total pro forma revenue

 $102,239  $191,811 
         

Net income

 $5,985  $7,168 

Pro forma net income adjustments by Business Combination

        

Coastal

 $557  $510 

Total pro forma net income

 $6,542  $7,678 

 

Significant pro forma adjustments include:

 

 

Tangible and intangible assets are assumed to be recorded at their estimated fair values as of November 1, 2021 and are depreciated or amortized over their estimated useful lives; and

 

The Company incurred approximately $30.0 million on the ABL Facility (defined below) in connection with the acquisition of Coastal. Interest expense has been adjusted as of November 1, 2020.

 

Coastal’s contribution to the Company's revenue for the three and six months ended April 30, 2023 was $5.0 million and $9.4 million, respectively. Coastal's contribution to the Company's net income for the three and six months ended April 30, 2023 was $0.5 million and $1.1 million, respectively.

 

13

 
 

Note 4. Fair Value Measurement 

 

The carrying amounts of the Company's cash and cash equivalents, accounts receivable, accounts payable and current accrued liabilities approximate their fair value as recorded due to the short-term maturity of these instruments, which approximates fair value. The Company’s outstanding obligations on its asset-backed loan ("ABL") credit facility are deemed to be at fair value as the interest rates on these debt obligations are variable and consistent with prevailing rates. There were no changes since October 31, 2022 in the Company's valuation techniques used to measure fair value.

 

Long-term debt instruments

 

The Company's long-term debt instruments are recorded at their carrying values in the consolidated balance sheet, which may differ from their respective fair values. The fair values of the long-term debt instruments are derived from Level 2 inputs.  The fair value amount of the long-term debt instruments as of April 30, 2023 and October 31, 2022 is presented in the table below based on the prevailing interest rates and trading activity of the Senior Notes.

 

  

As of April 30,

  

As of October 31,

 
  

2023

  

2022

 

(in thousands)

 

Carrying Value

  

Fair Value

  

Carrying Value

  

Fair Value

 

Senior Notes

 $375,000  $352,500  $375,000  $339,375 
 

Warrants

 

At  April 30, 2023 and October 31, 2022, there were 13,017,677 public warrants and no private warrants outstanding. Each warrant entitles its holder to purchase one share of Class A common stock at an exercise price of $11.50 per share. The warrants expire on December 6, 2023, or earlier upon redemption or liquidation. The Company may call the outstanding public warrants for redemption at a price of $0.01 per warrant, if the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day before the Company sends the notice of redemption to the warrant holders.

 

The Company accounts for the public warrants issued in connection with its IPO in accordance with ASC 815, under which certain provisions in the public warrant agreements do not meet the criteria for equity classification and therefore these warrants must be recorded as liabilities. The fair value of each public warrant is based on the public trading price of the warrant (Level 2 fair value measurement). Gains and losses related to the warrants are reflected in the change in fair value of warrant liabilities in the consolidated statements of operations.

 

All other non-financial assets

 

The Company's non-financial assets, which primarily consist of property and equipment, goodwill and other intangible assets, are not required to be carried at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis or whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and indefinite lived intangibles), non-financial instruments are assessed for impairment and, if applicable, written down to and recorded at fair value.

 

14

 
 

Note 5. Prepaid Expenses and Other Current Assets

 

The significant components of prepaid expenses and other current assets as of April 30, 2023 and October 31, 2022 are comprised of the following:

 

  

As of April 30,

  

As of October 31,

 

(in thousands)

 

2023

  

2022

 

Prepaid insurance

 $6,985  $1,550 

Prepaid licenses and deposits

  1,176   751 

Prepaid rent

  901   402 

Other current assets and prepaids

  1,114   2,472 

Total prepaid expenses and other current assets

 $10,176  $5,175 

 

 

Note 6. Property, Plant and Equipment

 

The significant components of property, plant and equipment as of April 30, 2023 and October 31, 2022 are comprised of the following:

 

  

As of April 30,

  

As of October 31,

 

(in thousands)

 

2023

  

2022

 

Land, building and improvements

 $28,964  $28,528 

Finance leases—land and buildings

  828   828 

Machinery and equipment

  504,606   478,162 

Transportation equipment

  8,309   7,133 

Furniture and office equipment

  3,837   3,870 

Property, plant and equipment, gross

  546,544   518,521 

Less accumulated depreciation

  (117,390)  (99,144)

Property, plant and equipment, net

 $429,154  $419,377 

 

Depreciation expense for the three and six months ended April 30, 2023 and 2022 is as follows:

 

  

Three Months Ended April 30,

  

Six Months Ended April 30,

 

(in thousands)

 

2023

  

2022

  

2023

  

2022

 

Cost of operations

 $9,261  $7,904  $18,322  $15,675 

General and administrative expenses

  608   598   1,201   1,168 

Total depreciation expense

 $9,869  $8,502  $19,523  $16,843 
 

Note 7. Goodwill and Intangible Assets

 

The Company has recognized goodwill and certain intangible assets in connection with prior business combinations.

 

There were no triggering events during the six months ended April 30, 2023. The Company will continue to evaluate its goodwill and intangible assets in future quarters.

 

15

 

The following table summarizes the composition of intangible assets as of April 30, 2023 and October 31, 2022:

 

  

As of April 30,

 
  

2023

 
  

Weighted Average

  

Gross

          

Foreign Currency

  

Net

 
  

Remaining Life

  

Carrying

      

Accumulated

  

Translation

  

Carrying

 

(in thousands)

 

(in Years)

  

Value

  

Impairment

  

Amortization

  

Adjustment

  

Amount

 

Intangibles subject to amortization:

                        

Customer relationship

  10.5  $195,859  $-  $(121,690) $331  $74,500 

Trade name

  5.6   5,284   -   (2,382)  55   2,957 

Assembled workforce

  1.8   1,650   -   (697)  -   953 

Noncompete agreements

  4.3   1,200   -   (275)  -   925 

Indefinite-lived intangible assets:

                        

Trade names (indefinite life)

  -   55,500   (5,000)  -   -   50,500 

Total intangibles

     $259,493  $(5,000) $(125,044) $386  $129,835 

 

  

As of October 31,

 
  

2022

 
  Weighted Average  Gross          Foreign Currency  Net 
  Remaining Life  Carrying      Accumulated  Translation  Carrying 

(in thousands)

 

(in Years)

  

Value

  

Impairment

  

Amortization

  

Adjustment

  

Amount

 

Intangibles subject to amortization:

                        

Customer relationship

  11.0  $193,710  $-  $(112,658) $1,416  $82,468 

Trade name

  6.1   4,836   -   (2,127)  239  $2,948 

Assembled workforce

  2.1   1,450   -   (444)  -  $1,006 

Noncompete agreements

  4.6   1,000   -   (168)  -  $832 

Indefinite-lived intangible assets:

                        

Trade names (indefinite life)

  -   55,500   (5,000)  -   -  $50,500 

Total intangibles

     $256,496  $(5,000) $(115,397) $1,655  $137,754 

 

The changes in the carrying value of goodwill by reportable segment for the six months ended April 30, 2023 are as follows:

 

Reportable Segment

 

As of October 31, 2022

  

Foreign Currency Translation

  

As of April 30, 2023

 

(in thousands)

            

U.S. Concrete Pumping

 $147,482  $-  $147,482 

U.K. Operations

  23,630   2,189   25,819 

U.S. Concrete Waste Management Services

  49,133   -   49,133 

Total

 $220,245  $2,189  $222,434 

 

16

 
 

Note 8. Long Term Debt and Revolving Lines of Credit

 

The table below is a summary of the composition of the Company’s debt balances as of  April 30, 2023 and October 31, 2022:

 

       

As of April 30,

  

As of October 31,

 

(in thousands)

 

Interest Rates

 

Maturities

 

2023

  

2022

 

Revolving loan - short term

 

Varies

 

January 2026

 $60,947  $52,133 

Senior Notes - all long term

 6.0000% 

February 2026

  375,000   375,000 

Total debt, gross

       435,947   427,133 

Less: Unamortized deferred financing costs offsetting long term debt

       (3,828)  (4,524)

Less: Revolving loan - short term

       (60,947)  (52,133)

Long term debt, net of unamortized deferred financing costs

      $371,172  $370,476 

 

On January 28, 2021, Brundage-Bone Concrete Pumping Holdings Inc., a Delaware corporation (the “Issuer”) and a wholly-owned subsidiary of the Company (i) completed a private offering of $375.0 million in aggregate principal amount of its 6.000% senior secured second lien notes due 2026 (the “Senior Notes”) issued pursuant to an indenture, among the Issuer, the Company, the other Guarantors (as defined below), Deutsche Bank Trust Company Americas, as trustee and as collateral agent (the "Indenture") and (ii) entered into an amended and restated ABL Facility (as subsequently amended, the "ABL Facility") by and among the Company, certain subsidiaries of the Company, Wells Fargo Bank, National Association, as agent, sole lead arranger and sole bookrunner, the other lenders party thereto, which provided up to $125.0 million of asset-based revolving loan commitments to the Company and the other borrowers under the ABL Facility. The proceeds from the Senior Notes, along with certain borrowings under the ABL Facility, were used to repay all outstanding indebtedness under the Company’s then existing Term Loan Agreement (see discussion below), dated December 6, 2018, and pay related fees and expenses.

 

On July 29, 2022, the ABL Facility was amended to, among other changes, increase the maximum revolver borrowings available to be drawn thereunder from $125.0 million to $160.0 million and increase the letter of credit sublimit from $7.5 million to $10.5 million. The ABL Facility also provides for an uncommitted accordion feature under which the ABL borrowers can, subject to specified conditions, increase the ABL Facility by up to an additional $75.0 million. The $35.0 million in incremental commitments was provided by JPMorgan Chase Bank, N.A.

 

Summarized terms of these facilities are included below.

 

Senior Notes

 

Summarized terms of the Senior Notes are as follows:

 

 

Provides for an original aggregate principal amount of $375.0 million;

 

The Senior Notes will mature and be due and payable in full on February 1, 2026;

 

The Senior Notes bear interest at a rate of 6.000% per annum, payable on February 1st and August 1st of each year;

 

The Senior Notes are jointly and severally guaranteed on a senior secured basis by the Company, Concrete Pumping Intermediate Acquisition Corp. and each of the Issuer’s domestic, wholly-owned subsidiaries that is a borrower or a guarantor under the ABL Facility (collectively, the "Guarantors"). The Senior Notes and the guarantees are secured on a second-priority basis by all the assets of the Issuer and the Guarantors that secure the obligations under the ABL Facility, subject to certain exceptions. The Senior Notes and the guarantees will be the Issuer’s and the Guarantors’ senior secured obligations, will rank equally with all of the Issuer’s and the Guarantors’ existing and future senior indebtedness and will rank senior to all of the Issuer’s and the Guarantors’ existing and future subordinated indebtedness. The Senior Notes are structurally subordinated to all existing and future indebtedness and liabilities of the Company’s subsidiaries that do not guarantee the Senior Notes; and

 

The Indenture includes certain covenants that limit, among other things, the Issuer’s ability and the ability of its restricted subsidiaries to: incur additional indebtedness and issue certain preferred stock; make certain investments, distributions and other restricted payments; create or incur certain liens; merge, consolidate or transfer all or substantially all assets; enter into certain transactions with affiliates; and sell or otherwise dispose of certain assets.

 

17

 

The outstanding principal amount of the Senior Notes as of  April 30, 2023 was $375.0 million and as of that date, the Company was in compliance with all covenants under the Indenture.

 

ABL Facility

 

Summarized terms of the ABL Facility, as amended, are as follows:

 

 

Borrowing availability in U.S. Dollars and GBP up to a maximum aggregate principal amount of $160.0 million and an uncommitted accordion feature under which the Company can increase the ABL Facility by up to an additional $75.0 million;

 

Borrowing capacity available for standby letters of credit of up to $10.5 million and for swing loan borrowings of up to $10.5 million. Any issuance of letters of credit or making of a swing loan will reduce the amount available under the ABL Facility;

 

All loans advanced will mature and be due and payable in full on January 28, 2026;

 

Amounts borrowed may be repaid at any time, subject to the terms and conditions of the agreement;

 

Borrowings in GBP bear interest at the SONIA rate plus an applicable margin currently set at 2.0326%. The applicable margins for SONIA are subject to a step down of 0.25% based on excess availability levels;

 Through June 29, 2022, borrowings in U.S. Dollars bore interest at either (1) an adjusted LIBOR rate plus an applicable margin of 2.25% or (2) a base rate plus an applicable margin of 1.25%. After June 29, 2022, borrowings in U.S. Dollars bear interest at (1) a base rate plus an applicable margin currently set at 1.0000% or (2) the SOFR rate plus an applicable margin currently set at 2.0000%. The applicable margins for U.S. Dollar loans are subject to a step down of 0.25% based on excess availability levels;
 U.S. ABL Facility obligations are secured by a first-priority perfected security interest in substantially all the assets of the Issuer, together with Brundage-Bone Concrete Pumping, Inc., Eco-Pan, Inc., Capital Pumping LP (collectively, the "US ABL Borrowers") and each of the Company's wholly-owned domestic subsidiaries (the "US ABL Guarantors"), subject to certain exceptions;
 U.K. ABL Facility obligations are secured by a first priority perfected security interest in substantially all assets of Camfaud Concrete Pumps Limited and Premier Concrete Pumping Limited, each of the Company's wholly-owned U.K. subsidiaries, and by each of the US ABL Borrowers and the US ABL Guarantors, subject to certain exceptions; and
 The ABL Facility also includes (i) a springing financial covenant (fixed charges coverage ratio) based on excess availability levels that the Company must comply with on a quarterly basis during required compliance periods and (ii) certain non-financial covenants.

 

               The outstanding balance under the ABL Facility as of  April 30, 2023 was $60.9 million and as of that date, the Company was in compliance with all debt covenants.

 

               In addition, as of April 30, 2023, the Company had $1.1 million in credit line reserves and a letter of credit balance of $4.2 million.

 

               As of April 30, 2023, we had $93.8 million of available borrowing capacity under the ABL Facility. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an asset in deferred financing costs in the accompanying consolidated balance sheets. The Company had debt issuance costs related to the revolving credit facilities of $1.4 million as of April 30, 2023.

 

               At April 30, 2023 and October 31, 2022, the weighted average interest rate for borrowings under the ABL Facility was 7.2% and 4.4%, respectively.  

 

18

 
 

Note 9. Accrued Payroll and Payroll Expenses

 

The following table summarizes accrued payroll and expenses as of April 30, 2023 and October 31, 2022:

 

  

As of April 30,

  

As of October 31,

 

(in thousands)

 

2023

  

2022

 

Accrued vacation

 $3,070  $2,705 

Accrued payroll

  2,287   2,763 

Accrued bonus

  3,676   4,835 

Accrued employee-related taxes

  2,444   2,760 

Other accrued

  482   278 

Total accrued payroll and payroll expenses

 $11,959  $13,341 

 

 

Note 10. Accrued Expenses and Other Current Liabilities

 

The following table summarizes accrued expenses and other current liabilities as of April 30, 2023 and October 31, 2022

 

  

As of April 30,

  

As of October 31,

 

(in thousands)

 

2023

  

2022

 

Accrued insurance

  9,299  $12,133 

Accrued interest

  6,249   5,996 

Accrued equipment purchases

  2,393   7,644 

Accrued property, sales and use tax

  1,447   1,671 

Accrued professional fees

  1,104   831 

Other

  2,831   3,881 

Total accrued expenses and other liabilities

  23,323  $32,156 

 

 

Note 11. Income Taxes

 

The following table summarizes income before income taxes and income tax expense for the three and six months ended April 30, 2023 and 2022

 

  

Three Months Ended April 30,

  

Six Months Ended April 30,

 

(in thousands)

 

2023

  

2022

  

2023

  

2022

 
                 

Income before income taxes

 $7,053  $6,512  $14,172  $7,674 
                 

Income tax expense

 $1,465  $527  $2,109  $506 

 

The effective tax rate for the three and six months ended April 30, 2023 was primarily impacted by the respective change in fair value of warrant liabilities, all of which is not recognized for tax purposes.

 

At  April 30, 2023 and October 31, 2022, the Company had deferred tax liabilities, net of deferred tax assets, of $76.1 million and $74.2 million, respectively. Included in deferred tax assets at  April 30, 2023 and  October 31, 2022 were net operating loss carryforwards of $24.3 million and $25.9 million, respectively. The Company has a valuation allowance of $0.1 million as of April 30, 2023 and  October 31, 2022 related to foreign and U.S. state tax credit carryforwards where realization is more uncertain at this time due to the limited carryforward periods that exist and state net operating losses that are expected to expire before they can be utilized.

 

 

19

 

Note 12. Commitments and Contingencies

 

Insurance

 

As of  April 30, 2023 and October 31, 2022, the Company was partially insured for automobile, general and worker's compensation liability. The Company has accrued $6.4 million and $7.0 million, as of  April 30, 2023 and October 31, 2022, respectively, for estimated (1) losses reported and (2) claims incurred but not reported, which is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.

 

The Company offers employee health benefits via a partially self-insured medical benefit plan. Participant claims exceeding certain limits are covered by a stop-loss insurance policy. As of  April 30, 2023 and October 31, 2022, the Company had accrued $0.9 million and $3.3 million, respectively, for estimated health claims incurred but not reported based on historical claims amounts and average lag time. These accruals are included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets. The Company contracts with a third-party administrator to process claims, remit benefits, etc. The third-party administrator required the Company to maintain a bank account to facilitate the administration of claims. The account balance was $0.2 million as of April 30, 2023 and October 31, 2022, and is included in cash and cash equivalents in the accompanying consolidated balance sheet.

 

Litigation

 

The Company is currently involved in certain legal proceedings and other disputes with third parties that have arisen in the ordinary course of business. Management believes that the outcomes of these matters will not have a material impact on the Company’s financial statements and does not believe that any amounts need to be recorded for contingent liabilities in the Company’s consolidated balance sheet.

 

Letters of credit

 

The ABL Facility provides for up to $10.5 million of standby letters of credit. As of April 30, 2023, total outstanding letters of credit totaled $4.2 million, the vast majority of which had been committed to the Company’s general liability insurance provider.

 

Note 13. Stockholders Equity

 

Share Repurchase Program

 

In January 2023, the board of directors of the Company approved a $10.0 million increase to the Company’s share repurchase program. This authorization will expire on March 31, 2024 and is in addition to the repurchase authorization of up to $10.0 million through June 15, 2023 that was previously approved in June 2022. The repurchase program permits shares to be repurchased in the open market, by block purchase, in privately negotiated transactions, in one or more transactions from time to time, or pursuant to any trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Open market purchases will be conducted in accordance with the limitations set forth in Rule 10b-18 of the Exchange Act and other applicable legal and regulatory requirements. The repurchase program may be suspended, terminated, extended or otherwise modified by the Board without notice at any time for any reason, including, without limitation, market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, capital and liquidity objectives, and other factors deemed appropriate by the Company's management.

 

The following table summarizes the shares repurchased, total cost of shares repurchased and average price per share for the three and six months ended April 30, 2023

 

  

Three Months Ended April 30,

  Six Months Ended April 30, 

(in thousands, except price per share)

 

2023

  

2023

 

Shares repurchased

  340   1,100 

Total cost of shares repurchased

 $2,322  $7,245 

Average price per share

 $6.84  $6.59 

 

20

 

Note 14. Stock-Based Compensation

 

Pursuant to the Concrete Pumping Holdings, Inc. 2018 Omnibus Incentive Plan, the Company granted stock-based awards to certain employees in the U.S. and U.K.

 

The following table summarizes realized compensation expense related to stock options and restricted stock awards in the accompanying condensed consolidated statements of operations:

 

  

Three Months Ended April 30,

  

Six Months Ended April 30,

 

(in thousands)

 

2023

  

2022

  

2023

  

2022

 

Compensation expense – stock options

 $123  $162  $255  $336 

Compensation expense – restricted stock awards

  941   1,189   1,949   2,495 

Total

 $1,064  $1,351  $2,204  $2,831 
 

Note 15. Earnings Per Share

 

The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share. For purposes of calculating earnings per share (“EPS”), a company that has participating security holders (for example, holders of unvested restricted stock that have non-forfeitable dividend rights and the Company’s Series A Preferred Stock) is required to utilize the two-class method for calculating EPS unless the treasury stock method results in lower EPS. The two-class method is an allocation of earnings/(loss) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings/(loss) for the reporting period is calculated by taking the net income (loss) for the period, less both the dividends declared in the period on participating securities (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) for the period. Our common shares outstanding are comprised of shareholder owned common stock and shares of unvested restricted stock held by participating security holders. Basic EPS is calculated by dividing income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding, excluding participating shares. Diluted earnings per share is based upon the weighted average number of shares as determined for basic earnings per share plus shares potentially issuable in conjunction with unvested restricted stock awards, incentive stock options, non-qualified stock options and shares of zero-dividend convertible perpetual preferred stock outstanding.

 

The table below shows our basic and diluted EPS calculations for the three and six months ended April 30, 2023 and 2022:

 

  

Three Months Ended April 30,

  

Six Months Ended April 30,

 

(in thousands, except share and per share amounts)

 

2023

  

2022

  

2023

  

2022

 

Net income (numerator):

                

Net income attributable to Concrete Pumping Holdings, Inc.

 $5,588  $5,985  $12,063  $7,168 

Less: Accretion of liquidation preference on preferred stock

  (427)  (427)  (868)  (868)

Less: Undistributed earnings allocated to participating securities

  (184)  (274)  (418)  (322)

Net income attributable to common stockholders (numerator for basic earnings per share)

 $4,977  $5,284  $10,777  $5,978 

Add back: Undistributed earning allocated to participating securities

  184   274   418   322 

Less: Undistributed earnings reallocated to participating securities

  (181)  (270)  (412)  (317)

Numerator for diluted earnings per share

 $4,980  $5,288  $10,783  $5,983 
                 

Weighted average shares (denominator):

                

Weighted average shares - basic

  53,329,576   53,901,278   53,467,897   53,782,345 

Weighted average shares - diluted

  54,224,611   54,795,262   54,343,461   54,738,504 
                 

Basic earnings per share

 $0.09  $0.10  $0.20  $0.11 

Diluted earnings per share

 $0.09  $0.10  $0.20  $0.11 

 

For the three and six months ended April 30, 2023 and 2022, 13.0 million warrants to purchase shares of common stock at an exercise price of $11.50 and 2.5 million shares of Series A Preferred Stock were excluded from the computation of diluted EPS because their effect would have been anti-dilutive.

 

21

 

Note 16. Segment Reporting

 

The Company’s revenues are derived from four reportable segments: U.S. Concrete Pumping, U.K. Operations, U.S. Concrete Waste Management Services and Corporate. Any differences between segment reporting and consolidated results are reflected in Intersegment below. The Company evaluates the performance of each segment based on revenue, and measures segment performance based upon EBITDA (earnings before interest, taxes, depreciation and amortization). Non-allocated interest expense and various other administrative costs are reflected in Corporate. Corporate assets primarily include cash and cash equivalents, prepaid expenses and other current assets, and real property. The following provides operating information about the Company’s reportable segments for the periods presented.

 

  

Three Months Ended April 30,

  

Six Months Ended April 30,

 

(in thousands)

 

2023

  

2022

  

2023

  

2022

 

Revenue

                

U.S. Concrete Pumping

 $78,386  $71,767  $145,573  $134,837 

U.K. Operations

  15,239   13,541   27,947   25,563 

U.S. Concrete Waste Management Services

  14,167   11,281   27,940   21,738 

Corporate

  625   625   1,250   1,250 

Intersegment

  (626)  (732)  (1,344)  (1,458)

Total revenue

 $107,791  $96,482  $201,366  $181,930 
                 

Income (loss) before income taxes

                

U.S. Concrete Pumping

 $547  $1,599  $(942) $258 

U.K. Operations

  1,259   140   1,119   (115)

U.S. Concrete Waste Management Services

  3,665   1,888   7,445   4,231 

Corporate

  1,582   2,885   6,550   3,300 

Total income before income taxes

 $7,053  $6,512  $14,172  $7,674 

 

  

Three Months Ended April 30,

  

Six Months Ended April 30,

 

(in thousands)

 

2023

  

2022

  

2023

  

2022

 

EBITDA

                

U.S. Concrete Pumping

 $17,787  $17,078  $32,850  $31,029 

U.K. Operations

  3,808   2,913   6,188   5,421 

U.S. Concrete Waste Management Services

  5,730   4,005   11,545   8,422 

Corporate

  1,797   3,098   6,978   3,724 

Total EBITDA

 $29,122  $27,094  $57,561  $48,596 
                 

Consolidated EBITDA reconciliation

                

Net income

 $5,588  $5,985  $12,063  $7,168 

Interest expense, net

  7,348   6,346   14,219   12,608 

Income tax expense

  1,465   527   2,109   506 

Depreciation and amortization

  14,721   14,236   29,170   28,314 

Total EBITDA

 $29,122  $27,094  $57,561  $48,596 

 

22

 
  

Three Months Ended April 30,

  

Six Months Ended April 30,

 

(in thousands)

 

2023

  

2022

  

2023

  

2022

 

Depreciation and amortization

                

U.S. Concrete Pumping

 $10,592  $9,880  $20,966  $19,688 

U.K. Operations

  1,849   2,026   3,676   4,011 

U.S. Concrete Waste Management Services

  2,065   2,117   4,100   4,191 

Corporate

  215   213   428   424 

Total depreciation and amortization

 $14,721  $14,236  $29,170  $28,314 
                 

Interest expense, net

                

U.S. Concrete Pumping

 $(6,648) $(5,599) $(12,826) $(11,083)

U.K. Operations

  (700)  (747)  (1,393)  (1,525)

Total interest expense, net

 $(7,348) $(6,346) $(14,219) $(12,608)
                 

Transaction costs

                

U.S. Concrete Pumping

 $24  $20  $27  $38 

Total transaction costs

 $24  $20  $27  $38 

 

Total assets by segment for the periods presented are as follows:

 

  

As of April 30,

  

As of October 31,

 

(in thousands)

 

2023

  

2022

 

Total assets

        

U.S. Concrete Pumping

 $705,985  $693,048 

U.K. Operations

  114,500   103,255 

U.S. Concrete Waste Management Services

  162,629   157,370 

Corporate

  29,110   27,834 

Intersegment

  (115,945)  (94,018)

Total assets

 $896,279  $887,489 

 

The U.S. and U.K. were the only regions that accounted for more than 10% of the Company’s revenue for the periods presented. Revenue for the periods presented and long-lived assets as of  April 30, 2023 and  October 31, 2022 are as follows:

 

  

Three Months Ended April 30,

  

Six Months Ended April 30,

 

(in thousands)

 

2023

  

2022

  

2023

  

2022

 

Revenue by geography

                

U.S.

 $92,552  $82,941  $173,419  $156,367 

U.K.

  15,239   13,541   27,947   25,563 

Total revenue

 $107,791  $96,482  $201,366  $181,930 

 

  

As of April 30,

  

As of October 31,

 

(in thousands)

 

2023

  

2022

 

Property, plant and equipment, net

        

U.S.

 $370,681  $366,814 

U.K.

  58,473   52,563 

Total property, plant and equipment, net

 $429,154  $419,377 
 

Note 17. Subsequent Events

 

On June 1, 2023, the Company amended its ABL Facility to, among other things, (1) increase the maximum revolver borrowings available to be drawn thereunder from $160.0 million to $225.0 million and (2) extend the maturity of the ABL Facility to June 1, 2028 (a five-year extension from closing). The $65.0 million in incremental commitments was provided with the introduction of PNC Bank N.A. providing a new commitment of $50.0 million and JPMorgan Chase Bank, N.A. increasing their existing commitment for an additional $15.0 million.

 

23

 

Item 2.    Managements Discussion and Analysis of Financial Condition and Results of Operations.

 

You should read the following managements discussion and analysis together with Concrete Pumping Holdings, Inc.s (the Company, we, us or our) condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. All references to "Notes" in this Item 2 of Part I refer to the notes to condensed consolidated financial statements included in Item 1 of Part I of this report. All references to Annual Report refers to our Form 10-K for the year ended October 31, 2022 filed with the SEC on January 31, 2023.

 

Cautionary Statement Concerning Forward-Looking Statements and Risk Factors Summary

 

Certain statements in this Quarterly Report on Form 10-Q ("Report") constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects, and the potential impact of the COVID-19 pandemic on our business. These forward-looking statements may be identified by terminology such as “likely,” “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or "views" or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained in this Report are reasonable, we cannot guarantee future results.

 

The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects. These statements involve known and unknown risks, uncertainties (some of which are beyond our control) and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the items in the following:

 

 

the adverse impact of recent inflationary pressures, including significant increases in fuel costs, global economic conditions and events related to these conditions, including the ongoing war in Ukraine and the COVID-19 pandemic;
  general economic and business conditions, which may affect demand for commercial, infrastructure, and residential construction and adverse effects of major endemics or pandemics on our business;
  our ability to successfully implement our operating strategy;
  our ability to successfully identify, manage and integrate acquisitions;
  the restatement of our financial statements for the quarter ended July 31, 2022 and our ability to establish and maintain effective internal control over financial reporting, including our ability to remediate the existing material weakness in our internal controls;
  governmental requirements and initiatives, including those related to mortgage lending, financing or deductions, funding for public or infrastructure construction, land usage, and environmental, health, and safety matters;
  seasonal and inclement weather conditions, which impede the installation of ready-mixed concrete;
  the cyclical nature of, and changes in, the real estate and construction markets, including pricing changes by our competitors;
  our ability to maintain favorable relationships with third parties who supply us with equipment and essential supplies;
  our ability to retain key personnel and maintain satisfactory labor relations;
  disruptions, uncertainties or volatility in the credit markets that may limit our, our suppliers’ and our customers’ access to capital;
  personal injury, property damage, results of litigation and other claims and insurance coverage issues;
  our substantial indebtedness and the restrictions imposed on us by the terms of our indebtedness;
  the effects of currency fluctuations on our results of operations and financial condition; and
  other factors as described in the section entitled “Risk Factors” in our Annual Report.

 

Our forward-looking statements speak only as of the date of this report or as of the date they are made, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports on Forms 10-K, 10-Q and 8-K should be considered.

 

 

Business Overview

 

The Company is a Delaware corporation headquartered in Denver, Colorado. The unaudited consolidated financial statements included herein include the accounts of Concrete Pumping Holdings, Inc. and its wholly owned subsidiaries including Brundage-Bone Concrete Pumping, Inc. (“Brundage-Bone”), Capital Pumping, LP (“Capital”), and Camfaud Group Limited (“Camfaud”), and Eco-Pan, Inc. (“Eco-Pan”).

 

As part of the Company’s business growth and capital allocation strategy, the Company views strategic acquisitions as opportunities to enhance our value proposition through differentiation and competitiveness. Depending on the deal size and characteristics of the M&A opportunities available, we expect to allocate capital for opportunistic M&A utilizing cash on the balance sheet and the Company's revolving line of credit. In recent years and as further described below, we have successfully executed on this strategy, including (1) our November 2021 acquisition of Pioneer Concrete Pumping Service, Inc. (“Pioneer”) for the purchase consideration of $20.2 million, which provided us with complementary assets and operations in both Georgia and Texas and (2) our acquisition of Coastal Carolina Concrete Pumping, Inc. ("Coastal") in August 2022 for the purchase consideration of $30.8 million, which expanded our operations in the Carolinas and Florida. 

 

U.S. Concrete Pumping

 

All branches operating within our U.S. Concrete Pumping segment are concrete pumping service providers in the United States ("U.S."). Our U.S. Concrete Pumping core business is the provision of concrete pumping services to general contractors and concrete finishing companies in the commercial, infrastructure and residential sectors. Equipment generally returns to a “home base” nightly and these branches do not contract to purchase, mix, or deliver concrete. This segment collectively has approximately 100 branch locations across approximately 20 states with their corporate headquarters in Denver, Colorado.

 

In recent years, U.S. Concrete Pumping has grown through the acquisitions of Coastal in August 2022 and Pioneer in November 2021, as described above, in addition to its greenfield expansion into Metro Washington DC in fiscal 2022.

 

U.S. Concrete Waste Management Services

 

Our U.S. Concrete Waste Management Services segment consists of our U.S. based Eco-Pan business. Eco-Pan provides industrial cleanup and containment services, primarily to customers in the construction industry. Eco-Pan uses containment pans specifically designed to hold waste products from concrete and other industrial cleanup operations. Eco-Pan has 19 operating locations across the U.S. with its corporate headquarters in Denver, Colorado.

 

U.K. Operations

 

Our U.K. Operations segment consists of our Camfaud, Premier and U.K. based Eco-Pan businesses. Camfaud is a concrete pumping service provider in the U.K. Our U.K. core business is primarily the provision of concrete pumping services to general contractors and concrete finishing companies in the commercial, infrastructure and residential sectors. Equipment generally returns to a “home base” nightly and does not contract to purchase, mix, or deliver concrete. Camfaud has approximately 30 branch locations throughout the U.K., with its corporate headquarters in Epping (near London), England. In addition, we have concrete waste management operations under our Eco-Pan brand name in the U.K. and currently operate from a shared Camfaud location.

 

Corporate

 

Our Corporate segment is primarily related to the intercompany leasing of real estate to certain of our U.S Concrete Pumping branches.

 

Impacts of Macroeconomic Factors and COVID-19 Recovery

 

There have been no material changes to the "Impacts of Macroeconomic Factors and COVID-19 Recovery" previously disclosed in our Annual Report. For a detailed discussion of the risks that affect our business, please refer to the section entitled “Impacts of Macroeconomic Factors and COVID-19 Recovery” in the Annual Report.

 

 

Results of Operations 

 

The tables included in the period-to-period comparisons below provide summaries of our revenues, gross profits and net income for our business segments for the three and six months ended April 30, 2023 and 2022.

 

Three Months Ended April 30, 2023 Compared to the Three Months Ended April 30, 2022

 

Revenue

 

   

Three Months Ended April 30,

   

Change

 

(in thousands, unless otherwise stated)

 

2023

   

2022

   

$

   

%

 

Revenue

                               

U.S. Concrete Pumping

  $ 78,386     $ 71,767     $ 6,619       9.2 %

U.K. Operations

    15,239       13,541       1,698       12.5 %

U.S. Concrete Waste Management Services

    14,167       11,281       2,886       25.6 %

Corporate

    625       625       -       0.0 %

Intersegment

    (626 )     (732 )     106       -14.5 %

Total revenue

  $ 107,791     $ 96,482     $ 11,309       11.7 %

 

Total revenue. Total revenues were $107.8 million for the three months ended April 30, 2023 compared to $96.5 million for the three months ended April 30, 2022. Revenues by segments are further discussed below.

 

U.S. Concrete Pumping. Revenue for our U.S. Concrete Pumping segment increased by 9.2%, or $6.6 million, from $71.8 million in the second quarter of fiscal 2022 to $78.4 million for the second quarter of fiscal 2023 primarily driven from prior acquisitions and improved pricing.Revenue attributable to our acquisition of Coastal was $5.0 million for the second quarter of fiscal 2023.

 

U.K. Operations. Revenue for our U.K. Operations segment increased by 12.5%, or $1.7 million, from $13.5 million in the second quarter of fiscal 2022 to $15.2 million for the second quarter of fiscal 2023. Excluding the impact from foreign currency translation, revenue was up 21.8% year-over-year. The increase in revenue was primarily attributable to improved pricing across the U.K. region.

 

U.S. Concrete Waste Management Services. Revenue for the U.S. Concrete Waste Management Services segment improved by 25.6%, or $2.9 million, from $11.3 million in the second quarter of fiscal 2022 to $14.2 million for the second quarter of fiscal 2023. The increase in revenue was primarily due to organic volume growth and pricing improvements.

 

Corporate. There was no change in revenue for our Corporate segment for the periods presented. Any year-over-year changes for our Corporate segment are primarily related to the intercompany leasing of real estate to certain of our U.S Concrete Pumping branches. These revenues are eliminated in consolidation through the Intersegment line item.

 

Cost of operations, Gross Profit and Gross Margin

 

   

Three Months Ended April 30,

   

Change

 

(in thousands, unless otherwise stated)

 

2023

   

2022

    $    

%

 

Gross Profit and Gross Margin

                               
Gross Profit   $ 43,474     $ 38,938     $ 4,536       11.6 %
Gross Margin     40.3 %     40.4 %     -       -0.1 %

 

Gross margin. Our gross margin for the second quarter of fiscal 2023 was 40.3% compared to 40.4% in the second quarter of fiscal 2022. While there was stabilization of certain input costs, particularly in diesel fuel, this was offset by slightly lower equipment utilization as a result of inclement weather conditions affected fiscal 2023 second quarter, particularly in locations west of the Rocky Mountains.

 

 

General and administrative expenses

 

General and administrative expenses ("G&A"). G&A expenses for the second quarter of fiscal 2023 were $30.2 million, an increase of $1.7 million from $28.5 million in the second quarter of fiscal 2022. G&A expenses as a percent of revenue were 28.0% for the second quarter of fiscal 2023 compared to 29.6% for the same period a year ago. The dollar increase in G&A expenses was largely due to higher labor costs of approximately $2.0 million as a result of additional headcount from recent acquisitions.

 

Excluding amortization of intangible assets of $4.9 million, depreciation expense of $0.6 million and stock-based compensation expense of $1.1 million, G&A expenses were $23.7 million for the second quarter of fiscal 2023 (22.0% of revenue), up $2.8 million from $20.9 million for the second quarter of fiscal 2022 (21.6% of revenue). The increase was primarily due to the higher labor costs as discussed above.

 

Total other income (expense)

 

Interest expense, net. Interest expense, net for the second quarter of fiscal 2023 was $7.3 million, up $1.0 million from $6.3 million in the second quarter of fiscal 2022. The increase was primarily attributable to a higher average ABL revolver draw during the fiscal 2023 second quarter as compared to the same quarter a year ago.

 

Change in fair value of warrant liabilities. During the second quarter of fiscal 2023 the Company recognized a $1.2 million gain on the fair value remeasurement of our liability-classified warrants. During the second quarter of fiscal 2022 the Company recognized a $2.5 million gain on the fair value measurement of our liability-classified warrants. The continued decline in the fair value remeasurement of the public warrants for all periods presented is due to the Company's share price being below the exercise price as the warrants get closer to expiring in December 2023. 

 

Income tax expense

 

Income tax expense. For the second fiscal quarter ended April 30, 2023 the Company recorded income tax expense of $1.5 million on pretax income of $7.1 million. For the same quarter a year ago, the Company recorded an income tax expense of $0.5 million on a pretax income of $6.5 million. The effective tax rate for the three months ended April 30, 2023 was primarily impacted by the respective change in fair value of warrant liabilities, all of which is not recognized for tax purposes.

 

Six Months Ended April 30, 2023 Compared to the Six Months Ended April 30, 2022

 

Revenue

 

   

Six Months Ended April 30,

   

Change

 

(in thousands, unless otherwise stated)

 

2023

   

2022

   

$

   

%

 

Revenue

                               

U.S. Concrete Pumping

  $ 145,573     $ 134,837     $ 10,736       8.0 %

U.K. Operations

    27,947       25,563       2,384       9.3 %

U.S. Concrete Waste Management Services

    27,940       21,738       6,202       28.5 %

Corporate

    1,250       1,250       -       0.0 %

Intersegment

    (1,344 )     (1,458 )     114       -7.8 %

Total revenue

  $ 201,366     $ 181,930     $ 19,436       10.7 %

 

Total revenue. Total revenues were $201.4 million for the six months ended April 30, 2023 compared to $181.9 million for the six months ended April 30, 2022. Revenues by segment are further discussed below.

 

 

U.S. Concrete Pumping. Revenue for our U.S. Concrete Pumping segment increased by 8.0%, or $10.7 million, from $134.8 in the six months ended April 30, 2022 to $145.6 million primarily driven by revenue contributions from recent acquisitions, coupled with organic growth in certain of our markets, notably in the southeastern region of the U.S. Revenue attributable to our acquisition of Coastal was $9.4 million for the six months ended April 30, 2023.

 

U.K. Operations. Revenue for our U.K. Operations segment increased by 9.3%, or $2.4 million, from $25.6 in the six months ended April 30, 2022 to $27.9 million. Excluding the impact from foreign currency translation, revenue was up 20.0% year-over-year. The increase in revenue was primarily attributable to improved pricing across the U.K. region.

 

U.S. Concrete Waste Management Services. Revenue for the U.S. Concrete Waste Management Services segment improved by 28.5%, or $6.2 million, from $21.7 in the six months ended April 30, 2022 to $27.9 million. The increase in revenue was due to robust organic volume growth and pricing improvements.

 

Corporate. There was no change in revenue for our Corporate segment for the periods presented. Any year-over-year changes for our Corporate segment are primarily related to the intercompany leasing of real estate to certain of our U.S Concrete Pumping branches. These revenues are eliminated in consolidation through the Intersegment line item.

 

Gross Profit and Gross Margin

 

   

Six Months Ended April 30,

   

Change

 

(in thousands, unless otherwise stated)

 

2023

   

2022

    $    

%

 

Gross Profit and Gross Margin

                               
Gross Profit   $ 79,928     $ 73,064     $ 6,864       9.4 %
Gross Margin     39.7 %     40.2 %     -       -0.5 %

 

Gross margin. Our gross margin for the six months ended April 30, 2023 was 39.7% compared to 40.2% in the same period of fiscal 2022. Our industry has experienced persistent inflation in some of our input costs, particularly in diesel fuel and labor costs in both the U.S. and the U.K. When possible, we have continued to increase pricing in line with the rise in our actual input costs.  With the prolonged impact of adverse weather effects year to date, equipment utilization has been slightly lower than expected which has had an additional impact on profitability and margins.

 

General and administrative expenses

 

General and administrative expenses ("G&A"). G&A expenses for the six months ended April 30, 2023 were $57.3 million, an increase of $2.0 million from $55.3 million for the six months ended April 30, 2022. The increase in G&A expenses was primarily due to (1) higher labor costs of approximately $3.2 million primarily due to additional headcount that joined the Company as a result of recent acquisitions, (2) higher legal and accounting expenses of $1.1 million, (3) higher rent, utilities and office expenses aggregating to $1.3 million primarily from recent acquisitions, partially offset by $2.2 million in additional non-cash expense related to fluctuations in the GBP and lower amortization of intangible assets expense of $1.8 million. G&A expenses as a percent of revenue were 28.4% for fiscal 2023 compared to 30.4% for the same period a year ago.

 

Excluding amortization of intangible assets of $9.6 million, depreciation expense of $1.2 million and stock-based compensation expense of $2.2 million, G&A expenses were $44.3 million for the six months ended April 30, 2023 (22.0% of revenue), up $4.5 million from $39.8 million for the six months ended April 30, 2022 (21.9% of revenue). The increase was primarily due to the higher labor costs, legal and accounting costs, rent, utilities, and office expenses, consulting fees and lower gain on asset sales, that was partially offset by fluctuations in the GBP and health costs, as discussed above.

 

Total other income (expense)

 

Interest expense, net. Interest expense, net for the six months ended April 30, 2023 was $14.2 million, up $4.5 million from $12.6 million from the six-month period ended April 30, 2022. The increase was primarily attributable to a higher average ABL revolver draw during the six months ended April 30, 2023 as compared to the same quarter a year ago.

 

Change in fair value of warrant liabilities. During the six months ended April 30, 2023 the Company recognized a $5.7 gain on the fair value remeasurement of our liability-classified warrants. During the six months ended April 30, 2022 the Company recognized a $2.5 million gain on the fair value measurement of our liability-classified warrants. The continued decline in the fair value remeasurement of the public warrants for all periods presented is due to the Company's share price being below the exercise price as the warrants get closer to expiring in December 2023.

 

 

Income tax expense

 

Income tax expense. For the  six months ended April 30, 2023, the Company recorded an income tax expense of $ 2.1 million on pretax income of $ 14.2. For the same period a year ago, the Company recorded an income tax expense of $ 0.5 on pretax income of $ 7.7 million. The effective tax rate for the  three and six-month periods ended April 30, 2023 was primarily impacted by the respective change in fair value of warrant liabilities, all of which is not recognized for tax purposes.
 

Adjusted EBITDA(1) and Net Income (Loss)

 

   

Net Income (Loss)

   

Adjusted EBITDA

 
   

Three Months Ended April 30,

   

Three Months Ended April 30,

   

Change

 

(in thousands)

 

2023

   

2022

   

2023

   

2022

    $    

%

 

U.S. Concrete Pumping

  $ 450     $ 1,663     $ 17,140     $ 18,017     $ (877 )     -4.9 %

U.K. Operations

    933       89       4,597       3,776       821       21.7 %

U.S. Concrete Waste Management Services

    2,728       1,446       6,471       4,641       1,830       39.4 %

Corporate

    1,477       2,787       625       624       1       0.2 %

Total

  $ 5,588     $ 5,985     $ 28,833     $ 27,058     $ 1,775       6.6 %

 

   

Net Income (Loss)

   

Adjusted EBITDA

 
   

Six Months Ended April 30,

   

Six Months Ended April 30,

   

Change

 

(in thousands)

 

2023

   

2022

   

2023

   

2022

   

$

   

%

 

U.S. Concrete Pumping

  $ (650 )   $ 961     $ 31,828     $ 32,508     $ (680 )     -2.1 %

U.K. Operations

    833       (85 )     7,783       7,062       721       10.2 %

U.S. Concrete Waste Management Services

    5,540       3,194       13,018       9,552       3,466       36.3 %

Corporate

    6,340       3,098       1,250       1,250       -       0.0 %

Total

  $ 12,063     $ 7,168     $ 53,879     $ 50,372     $ 3,507       7.0 %

 

  (1) See Non-GAAP Measures (EBITDA and Adjusted EBITDA) below.
  (2) As of the first quarter of fiscal 2023, we have modified the method in which adjusted EBITDA is calculated by no longer including an add-back for director costs and public company expenses. The Company recast adjusted EBITDA for U.S. Concrete Pumping in the three and six months ended April 30, 2022 by $0.6 million and $1.3 million, respectively, for these expenses to reflect this change. See Non-GAAP Measures (EBITDA and Adjusted EBITDA) below for more information.

 

U.S. Concrete Pumping. Net income for our U.S. Concrete Pumping segment was $0.5 million for the second quarter of fiscal 2023, versus net income of $1.7 million for the second quarter of fiscal 2022. Adjusted EBITDA for our U.S. Concrete Pumping segment was $17.1 million for the second quarter of fiscal 2023, versus $18.0 million for the same period in fiscal 2022. Adjusted EBITDA margin was negatively impacted by the lower equipment utilization as a result of inclement weather conditions affected fiscal 2023 second quarter, particularly in locations west of the Rocky Mountains.

 

Net loss for our U.S. Concrete Pumping segment was $0.7 million for the six months ended April 30, 2023, versus a net income of $1.0 million for the six months ended April 30, 2022. Adjusted EBITDA for our U.S. Concrete Pumping segment was $31.8 million for the six months ended April 30, 2023, versus $32.5 million for the same period in fiscal 2022. Adjusted EBITDA margin was negatively impacted by higher diesel fuel input costs and lower equipment utilization as a result of inclement weather conditions during the first six months of fiscal 2023, particularly in locations west of the Rocky Mountains.

 

U.K. Operations. Net income for our U.K. Operations segment was $0.9 million for the second quarter of fiscal 2023, versus net income of $0.1 million for the second quarter of fiscal 2022. Adjusted EBITDA for our U.K. Operations segment was $4.6 million for the second quarter of fiscal 2023, up 21.7% from $3.8 million from the same period in fiscal 2022. The increase was primarily attributable to the year-over-year improvement in revenue, which was partially offset by inflationary cost pressures on gross margins.

 

 

Net income for our U.K. Operations segment was $0.8 million for the six months ended April 30, 2023, compared to a net loss of $0.1 million for the six months ended April 30, 2022. Adjusted EBITDA for our U.K. Operations segment was $7.8 million for the six months ended April 30, 2023, versus $7.1 million from the same period in fiscal 2022. The increase was primarily attributable to the year-over-year improvement in revenue, which was partially offset by inflationary cost pressures on gross margins.

 

U.S. Concrete Waste Management Services. Net income for our U.S. Concrete Waste Management Services segment was $2.7 million for the second quarter of fiscal 2023, versus net income of $1.4 million for the second quarter of fiscal 2022. Adjusted EBITDA for our U.S. Concrete Waste Management Services segment was $6.5 million for the second quarter of fiscal 2023, up 39.4% from $4.6 million from the same period in fiscal 2022. The increase was primarily attributable to the year-over-year improvement in revenue as discussed above.

 

Net income for our U.S. Concrete Waste Management Services segment was $5.5 million for the six months ended April 30, 2023, up from net income of $3.2 million for the six months ended April 30, 2022. Adjusted EBITDA for our U.S Concrete Waste Management Services segment was $13.0 million for the six months ended April 30, 2023, up 36.3% from $9.6 million for the same period in fiscal 2022. The increase was primarily attributable to the year-over-year robust organic growth in revenue as discussed above.

 

Corporate. Net income for our Corporate segment was $1.5 million for the second quarter of fiscal 2023, compared to a net income of $2.8 million for the second quarter of fiscal 2022.

 

Net income for our Corporate segment was $6.3 million for the six months ended April 30, 2023, up from net income of $3.1 million for the six months ended April 30, 2022.

 

There was no change in Adjusted EBITDA for our Corporate segment for the periods presented.

 

Liquidity and Capital Resources

 

Overview

 

Our capital structure is primarily a combination of (1) permanent financing, represented by stockholders’ equity; (2) zero-dividend convertible perpetual preferred stock; (3) long-term financing represented by our Senior Notes and (4) short-term financing under our ABL Facility. Our primary sources of liquidity are cash generated from operations, available cash and cash equivalents and access to our revolving credit facility under our ABL Facility, which provides for aggregate borrowings of up to $160.0 million, subject to a borrowing base limitation. We use our liquidity and capital resources to: (1) finance working capital requirements; (2) service our indebtedness; (3) purchase property, plant and equipment; and (4) finance strategic acquisitions, such as the acquisition of Pioneer, Coastal and others. As of April 30, 2023, we had $6.6 million of cash and cash equivalents and $93.8 million of available borrowing capacity under the ABL Facility, providing total available liquidity of $100.4 million.

 

We may from time to time seek to retire or pay down borrowings on the outstanding balance of our ABL Facility or Senior Notes using cash on hand. Such repayments, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

 

We believe our existing cash and cash equivalent balances, cash flow from operations and borrowing capacity under our ABL Facility will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, potential acquisitions and overall economic conditions. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity could result in dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations.

 

Material Cash Requirements

 

Our principal uses of cash historically have been to fund operating activities and working capital, purchases of property and equipment, strategic acquisitions, fund payments due under facility operating and finance leases, share repurchases and to meet debt service requirements.

 

Our working capital deficit as of April 30, 2023 was $23.5 million. We generally operate with a working capital deficit due to our efficient use of cash in funding operations and because we have consistent access to capital markets. We believe we have adequate coverage of our debt covenants.

 

 

The amount of our future capital expenditures will depend on a number of factors including general economic conditions and growth prospects. In response to changing economic conditions, we believe we have the flexibility to modify our capital expenditures by adjusting them (either up or down) to match our actual performance. Our capital expenditures for the six months ended April 30, 2023 and 2022 were approximately $34.7 million and $60.3 million, respectively.

 

To service our debt, we require a significant amount of cash. Our ability to pay interest and principal on our indebtedness will depend upon our future operating performance and the availability of borrowings under the ABL Facility and/or other debt and equity financing alternatives available to us, which will be affected by prevailing economic conditions and conditions in the global credit and capital markets, as well as financial, business and other factors, some of which are beyond our control. Based on our current level of operations and given the current state of the capital markets, we believe our cash flow from operations, available cash and available borrowings under the ABL Facility will be adequate to service our debt and meet our future liquidity needs for the foreseeable future. See “Senior Notes and ABL Facility” discussion below for more information.

 

Future Contractual Obligations

 

For information regarding our future contractual obligations, see the MD&A discussion included in Item 7 of Part II of our Annual Report. 

 

Senior Notes and ABL Facility

 

The table below is a summary of the composition of the Company’s debt balances as of April 30, 2023 and at October 31, 2022:

 

             

As of April 30,

   

As of October 31,

 

(in thousands)

 

Interest Rates

 

Maturities

 

2023

   

2022

 

Revolving loan - short term

 

Varies

 

January 2026

  $ 60,947     $ 52,133  

Senior Notes - all long term

  6.0000%  

February 2026

    375,000       375,000  

Total debt, gross

              435,947       427,133  

Less: Unamortized deferred financing costs offsetting long term debt

              (3,828 )     (4,524 )

Less: Revolving loan - short term

              (60,947 )     (52,133 )

Long term debt, net of unamortized deferred financing costs

            $ 371,172     $ 370,476  

 

The outstanding balance under the ABL Facility as of April 30, 2023 was 60.9 million and as of that date, the Company was in compliance with all debt covenants. In addition, as of April 30, 2023, the Company had $1.1 million in credit line reserves and a letter of credit balance of $4.2 million. As of April 30, 2023, we had $93.8 million of available borrowing capacity under the ABL Facility. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an asset in deferred financing costs in the accompanying consolidated balance sheets. The Company had debt issuance costs related to the revolving credit facilities of $1.4 million as of April 30, 2023. See Note 8 for more information on the Senior Notes and ABL Facility.

 

 

Cash Flows

 

Cash generated from operating activities typically reflects net income, as adjusted for non-cash expense items such as depreciation, amortization and stock-based compensation, and changes in our operating assets and liabilities. Generally, we believe our business requires a relatively low level of working capital investment due to low inventory requirements and timely customer payments due to daily billings for most of our services.

 

Cash flow provided by operating activities. Net cash provided by operating activities generally reflects the cash effects of transactions and other events used in the determination of net income or loss.

 

Net cash provided by operating activities during the six months ended April 30, 2023 was $31.1 million. The Company had net income of $12.1 million, which included non-cash expense items of $28.2 million. In addition, we had cash outflows related to a decrease to our working capital of $9.2 million. Working capital changes primarily include a decrease in accrued payroll, accrued expenses and other current liabilities of $5.1 million, an increase in prepaid expenses and other assets of $3.2 million and a decrease of $1.1 million to accounts payable, a decrease in trade receivables of $0.9 million and an increase in inventory of $0.7 million. The decrease in accrued payroll, accrued expenses and other current liabilities is primarily related to payment of accrued interest. The Company makes semi-annual interest payments in February and August each year. The increase to prepaid expenses and other current assets is primarily due to timing of prepaid insurance, which is generally prepaid during first quarter of fiscal year. The decrease in accounts payable is driven by timing.

 

Net cash provided by operating activities during the six months ended April 30, 2022 was $21.4 million. The Company had net income of $7.2 million, which included non-cash expense items of $36.7 million. In addition, we had cash outflows related to a decrease to our working capital of $15.9 million. Working capital changes primarily include an increase to trade receivables of $8.4 million, an increase to prepaid expenses and other current assets of $3.9 million a decrease in accrued payroll, accrued expenses and other current liabilities of $1.8 million and a decrease of $1.2 million to accounts payable. The increase to trade receivables is primarily due to timing and seasonality of business volume increases during the second quarter. The increase to prepaid expenses and other current assets is primarily due to timing of prepaid insurance, which is generally prepaid during first quarter of fiscal year 2022. The decrease to accounts payable is driven by timing. The decrease in accrued payroll, accrued expenses and other current liabilities is primarily related to a decrease in accrued interest. The Company makes semi-annual interest payments in February and August each year.

 

Cash flow used in investing activities. Net cash used in operating activities generally reflects the cash outflows for property, plant and equipment.

 

We used $31.1 million to fund investing activities during the six months ended April 30, 2023. The Company used $34.7 million for the purchase of property, plant and equipment and $0.8 million for the purchase of intangible assets, which was partially offset by $4.4 million in proceeds from the sale of property, plant and equipment.

 

We used $57.1 million to fund investing activities during the six months ended April 30, 2022. The Company used $60.3 million for the purchase of property, plant and equipment and $1.5 million for the purchase of intangible assets, which was partially offset by proceeds from the sale of property, plant and equipment of $4.6 million.

 

Cash flow provided by (used in) financing activities.

 

Net cash used in financing activities was $1.1 million for the six months ended April 30, 2023. Financing activities during this period included $8.3 million in purchase of treasury stock, which included $7.2 million purchased under the share repurchase program and $1.1 million in outflows from the purchase of shares into treasury stock in order to fund the employee tax obligations for certain vested stock awards. In addition, cash used in financing activities included $7.3 million in net proceeds under the Company's ABL Facility. 

 

Net cash provided by financing activities was $28.2 million for the six months ended April 30, 2022. Financing activities during this period primarily included $29.2 million in net borrowings under the Company’s ABL Facility that were partially offset by $1.0 million in outflows from the purchase of shares into treasury stock in order to fund the employee tax obligations for certain vested stock awards.

 

 

Accounting and Reporting Matters

 

Non-GAAP Measures (EBITDA and Adjusted EBITDA)

 

We calculate EBITDA by taking GAAP net income and adding back interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is calculated by taking EBITDA and adding back transaction expenses, loss on debt extinguishment, stock-based compensation, other income, net, goodwill and intangibles impairment and other adjustments. Transaction expenses represent expenses for legal, accounting, and other professionals that were engaged in the completion of various acquisitions. Transaction expenses can be volatile as they are primarily driven by the size of a specific acquisition. As such, we exclude these amounts from Adjusted EBITDA for comparability across periods. Other adjustments include the adjustments for warrant liabilities revaluation, extraordinary expenses and non-cash currency gains/losses. As of the first quarter of fiscal 2023, we have modified the method in which adjusted EBITDA is calculated by no longer including an add-back for director costs and public company expenses. Adjusted EBITDA in the three and six months ended April 30, 2022 is recast by $0.6 million and $1.3 million, respectively, for these expenses to reflect this change.

 

We believe these non-GAAP measures of financial results provide useful supplemental information to management and investors regarding certain financial and business trends related to our financial condition and results of operations, and as a supplemental tool for investors to use in evaluating our ongoing operating results and trends and in comparing our financial measures with competitors who also present similar non-GAAP financial measures. In addition, these measures (1) are used in quarterly and annual financial reports prepared for management and our board of directors and (2) help management to determine incentive compensation. EBITDA and Adjusted EBITDA have limitations and should not be considered in isolation or as a substitute for performance measures calculated under GAAP. These non-GAAP measures exclude certain cash expenses that we are obligated to make. In addition, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently or may not calculate it at all, which limits the usefulness of EBITDA and Adjusted EBITDA as comparative measures.

 

   

Three Months Ended April 30,

   

Six Months Ended April 30,

 

(in thousands)

 

2023

   

2022

   

2023

   

2022

 

Consolidated

                               

Net income

  $ 5,588     $ 5,985     $ 12,063     $ 7,168  

Interest expense, net

    7,348       6,346       14,219       12,608  

Income tax expense

    1,465       527       2,109       506  

Depreciation and amortization

    14,721       14,236       29,170       28,314  

EBITDA

    29,122       27,094       57,561       48,596  

Transaction expenses

    24       20       27       38  

Stock-based compensation

    1,064       1,351       2,204       2,831  

Change in fair value of warrant liabilities

    (1,172 )     (2,474 )     (5,728 )     (2,474 )

Other income, net

    (13 )     (13 )     (34 )     (52 )

Other adjustments (1)

    (192 )     1,080       (151 )     1,433  

Adjusted EBITDA

  $ 28,833     $ 27,058     $ 53,879     $ 50,372  

 

   

Three Months Ended April 30,

   

Six Months Ended April 30,

 

(in thousands)

 

2023

   

2022

   

2023

   

2022

 

U.S. Concrete Pumping

                               

Net income (loss)

  $ 450     $ 1,663       (650 )   $ 961  

Interest expense, net

    6,648       5,599       12,826       11,083  

Income tax expense (benefit)

    97       (64 )     (292 )     (703 )

Depreciation and amortization

    10,592       9,880       20,966       19,688  

EBITDA

    17,787       17,078       32,850       31,029  

Transaction expenses

    24       20       27       38  

Stock-based compensation

    1,064       1,351       2,204       2,831  

Other income, net

    (6 )     (6 )     (16 )     (37 )

Other adjustments (1)

    (1,729 )     (426 )     (3,237 )     (1,353 )

Adjusted EBITDA

  $ 17,140     $ 18,017     $ 31,828     $ 32,508  

 

  (1) Other adjustments include the adjustment for warrant liabilities revaluation, extraordinary expenses and non-cash currency gains/losses. As of the first quarter of fiscal 2023, we have modified the method in which adjusted EBITDA is calculated by no longer including an add-back for director costs and public company expenses. The Company recast adjusted EBITDA for U.S. Concrete Pumping in the three and six months ended April 30, 2022 by $0.6 million and $1.3 million, respectively, for these expenses to reflect this change.

 

 

   

Three Months Ended April 30,

   

Six Months Ended April 30,

 

(in thousands)

 

2023

   

2022

   

2023

   

2022

 

U.K. Operations

                               

Net income (loss)

  $ 933     $ 89       833     $ (85 )

Interest expense, net

    700       747       1,393       1,525  

Income tax expense (benefit)

    326       51       286       (30 )

Depreciation and amortization

    1,849       2,026       3,676       4,011  

EBITDA

    3,808       2,913       6,188       5,421  

Other income, net

    (11 )     (3 )     (17 )     (5 )

Other adjustments

    800       866       1,612       1,646  

Adjusted EBITDA

  $ 4,597     $ 3,776     $ 7,783     $ 7,062  

 

   

Three Months Ended April 30,

   

Six Months Ended April 30,

 

(in thousands)

 

2023

   

2022

   

2023

   

2022

 

U.S. Concrete Waste Management Services

                               

Net income

  $ 2,728     $ 1,446       5,540     $ 3,194  

Income tax expense

    937       442       1,905       1,037  

Depreciation and amortization

    2,065       2,117       4,100       4,191  

EBITDA

    5,730       4,005       11,545       8,422  

Other income, net

    4       (4 )     (1 )     (10 )

Other adjustments

    737       640       1,474       1,140  

Adjusted EBITDA

  $ 6,471     $ 4,641     $ 13,018     $ 9,552  

 

   

Three Months Ended April 30,

   

Six Months Ended April 30,

 

(in thousands)

 

2023

   

2022

   

2023

   

2022

 

Corporate

                               

Net income

  $ 1,477     $ 2,787       6,340     $ 3,098  

Income tax expense

    105       98       210       202  

Depreciation and amortization

    215       213       428       424  

EBITDA

    1,797       3,098       6,978       3,724  

Change in fair value of warrant liabilities

    (1,172 )     (2,474 )     (5,728 )     (2,474 )

Adjusted EBITDA

  $ 625     $ 624     $ 1,250     $ 1,250  

 

Critical Accounting Policies and Estimates

 

Our critical accounting policies and estimates are disclosed in the “Critical Accounting Policies and Estimates” section of our Annual Report. No modifications have been made during the six months ended April 30, 2023 to these policies or estimates.

 

New Accounting Pronouncements

 

For information regarding recent accounting pronouncements, see Note 2 to the condensed consolidated financial statements included within Item 1 of this report for more information.

 

 

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable.

 

Item 4.    Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management of the Company, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met. The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Report. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of April 30, 2023, the Company’s disclosure controls and procedures were not effective due to the material weaknesses described below.

 

Material Weaknesses in Internal Control Over Financial Reporting

 

A material weakness is a deficiency, or a combination of deficiencies, in internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

 

Management previously identified and disclosed two material weaknesses in "Item 9A Controls and Procedures" of the Company’s Annual Report. Specifically, material weaknesses were identified related to (1) the review of manual journal entries within the financial statement close process, which was identified in connection with the restatement of the Company’s interim unaudited financial statements as of July 31, 2022 ("MW #1"); and (2) the areas of user access and segregation of duties related to information technology systems that support the financial reporting process specifically related to accounts payable and expenditures ("MW #2").

 

Additionally, these material weaknesses could result in a misstatement of the accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

 

Remediation Activities

 

As of April 30, 2023, management designed and implemented measures that it believes remediate the identified material weaknesses. Specifically, for MW #1, controls were designed and implemented and evidenced to ensure that journal entries are adequately reviewed and approved, and for MW #2, the Company has designed and implemented a review of user activity reports and control activities to ensure appropriate segregation of duties. Notwithstanding these measures, due to the nature of the remediation process, newly implemented controls must operate effectively for a sufficient period of time for a definitive conclusion, validated through testing, that the deficiencies have been fully remediated and, as such, management can give no assurance that the measures it has undertaken have fully remediated the material weaknesses that it has identified or that additional material weaknesses will not arise in the future. Management will continue to monitor the design and effectiveness of these controls through ongoing tests and will make any further changes that management determines to be appropriate. 

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting that occurred during our second fiscal quarter of fiscal 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

Part II

 

Item 1.  Legal Proceedings.

 

From time to time, we may have been and may again become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any litigation that we believe to be material and we are not aware of any pending or threatened litigation against us that we believe could have a material adverse effect on our business, operating results, financial condition, or cash flows.

 

Item 1A. Risk Factors.

 

There have been no material changes to the Risk Factors previously disclosed in our Annual Report. For a detailed discussion of the risks that affect our business, please refer to the section entitled “Risk Factors” in the Annual Report.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

Issuer Purchases of Equity Securities

 

During the second quarter of 2023, under our share repurchase program, we repurchased an aggregate of 339,532 shares of our common stock for a total of $2.3 million at an average price of $6.84 per share. The following table reflects issuer purchases of equity securities for the three months ended April 30, 2023:

 

ISSUER PURCHASES OF EQUITY SECURITIES 

 

Period

 

Total Number of Shares Purchased (1)

   

Average Price Paid Per Share

   

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs

   

Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs (2,3)

 

February 1, 2022 - February 28, 2022

    -     $ -       -     $ 12,386,848  

March 1, 2022 - March 31, 2022

    188,425       6.93       120,416       11,546,760  

April 1, 2023 - April 30, 2023

    219,116       6.77       219,116       10,063,351  

Total

    407,541     $ 6.60       339,532     $ 10,063,351  

 

  (1)

In June 2022, our board of directors approved a share repurchase program, which was announced in June, 2022, authorizing us to repurchase up to $10.0 million of our common stock from time to time through June 15, 2023. In January 2023, the board of directors of the Company approved a $10.0 million increase to the Companys share repurchase program, which was announced in January 2023. This authorization will expire on March 31, 2024.

 

Of the 407,541 shares included in this column, 339,532 were purchased under the purchase program and the remaining shares reflect shares of common stock purchased into treasury stock in order to satisfy employee tax withholding obligations for the vesting of stock awards.

  (2) Dollar value of shares that may yet be purchased under the repurchase program is as of the end of the period.
  (3) Includes commission cost.

 

Item 3.  Defaults Upon Senior Securities.

 

None

 

Item 4. Mine Safety Disclosures.

 

Not Applicable.

 

Item 5.  Other Information.

 

(a) None

(b) None

 

 

Item 6.  Exhibits.

 

The documents set forth below are filed herewith or incorporated herein by reference to the location indicated.

 

Exhibit No.

 

Description

31.1  

Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule15d-14(a).

31.2  

Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule15d-14(a).

32.1  

Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule15d-14(b) and 18 U.S.C. Section 1350.

32.2  

Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule15d-14(b) and 18 U.S.C. Section 1350.

101.INS

 

Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH

 

Inline XBRL Taxonomy Extension Schema Document

101.CAL

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

 

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

 

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104  

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

CONCRETE PUMPING HOLDINGS, INC.

 

 

 

 

 

By: /s/ Iain Humphries

 

Name: Iain Humphries

 

Title: Chief Financial Officer and Secretary

  (Authorized Signatory)

 

 

 

Dated: June 8, 2023

 

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