Concrete Pumping Holdings, Inc.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Concrete Pumping Holdings financial results for the third quarter fiscal quarter and into July 31st, 2020. Joining us today are Concrete Pumping Holdings CEO, Bruce Young, CFO, Iain Humphries, and the company's external director of investor relations, Cody Slaw. Before we go ahead, I'd like to turn the floor over to Mr. Slaw to read the company's Safe Harbor Statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Thanks, Kevin. I'd like to remind everyone that in the course of this call to give you a better understanding of our operations, we will be making certain forward-looking statements. These statements are subject to numerous risks and uncertainties that could cause the actual result to differ materially from such statements. For information concerning these risks and uncertainties, see Concrete Pumping Holding, Inc.'s publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. On today's call, we will also discuss adjusted EBITDA and net debt, which are non-GAAP financial measures. Adjusted EBITDA adjusts reported EBITDA for certain items. We believe the presentation of this non-GAAP financial measure is useful because it provides investors and industry analysts the same information that we use internally for purposes of assessing our core operating performance. Net debt reflects all principal amounts outstanding under debt agreements plus cash. Cash is subtracted from the GAAP measure because it could be used to reduce the company's debt obligations. We believe this non-GAAP measure provides useful information to management and investors in order to monitor the company's leverage and evaluate the company's consolidated balance sheet. For a reconciliation of both of these measures to their most directly comparable GAAP financial measure, please refer the press release issued today or the investor presentation posted on the company's website. I'd like to remind everyone that this call will be available for replay later this evening. A webcast replay will also be available via the link provided in today's press release, as well as on the company's website. Additionally, we have posted an updated investor presentation on the same website. Now I'd like to turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

Thank you, Cody, and good afternoon, everyone. As our third quarter results demonstrate, we continue to navigate COVID-19 from a position of strength, which is a testament to our great employees. the resiliency of our business model and our highly variable cost structure. Our team continues to show exceptional leadership, resourcefulness, and collaboration as we address this unprecedented event. I remain incredibly proud of our employee morale throughout the organization as our team seamlessly adapts to new health protocols and remains focused on serving our many stakeholders. Our employees continue to demonstrate a high degree of engagement in the work and empathy for our clients during these uncertain times. Their proactive safety measures I laid out during our last earnings call are still in place and have served us well as we've continued to experience minimal disruption in our operations. Diving into our Q3 performance, revenue and EBITDA were essentially flat despite COVID-19 related shutdowns in the UK and softness in a few of our markets. Our concrete waste management services business performed particularly well, growing by double digits. Again, I am incredibly proud of our entire team given that they were able to maintain consistent year-over-year operating performance despite a substantially more challenging macro environment in 2020. Let me summarize the components of our revenue performance a bit further. Our U.S. pumping business remained fairly resilient in the third quarter. Markets like Seattle, which experienced a significant drop in revenue during our second quarter but recovered quickly, continued to run a pre-COVID and others. We experienced growing demand across our residential market and expect that to continue to strengthen in the near term as evidenced by strong housing starts data in the majority of our geographic markets. Our Ecopan business, which we define as U.S. Concrete Waste Management Services in our filings, was a real standout of the quarter, growing organically Revenue by 18% and Adjusted EBITDA by 34%. In addition to steady organic growth and improved operational effectiveness that continues to drive this business during the quarter, we launched roll-off services in several locations. The services compromised a larger container than our legacy offering and is moved with a roll-off or hook-lift truck. is intended to service larger volume pickups where ample space is available compared to the compact nature of our standard Ecopan offering. While this isn't the rapacity play of traditional Ecopan, it allows us to increase our revenue penetration with a complementary concrete waste removal solution that remains superior to other historical alternatives the contractor had at their disposal prior to Ecopan. We're obviously pleased with Ecopan's performance during the quarter, and we are confident market tailwinds will remain. In fact, during the quarter, we invested in additional CapEx to have the equipment necessary to fill strong demand. Iain will walk through CapEx in his section, and we are pleased we have the equipment to go to attack this exciting market. The offset to this revenue performance was continued softness in our UK market as a result of continued lingering effect of COVID-19, which drove substantial curtailment of business operations during April and into May. We noted last quarter's call that the UK was performing at roughly 60% of the revenue capacity that we would normally expect. That has improved to roughly 80% in the third quarter, so a nice sequential improvement, but still room for further recovery. We aren't expecting any structural demand constraints that concern us long-term. We believe it's simply a market that is slower to recover from COVID-19 when compared to what we're experiencing in the U.S. We have begun a modest amount of work on the HS2 project, but not enough to change the revenue dynamics near-term. Of course, it still represents an enormous opportunity for our business, and we are well-positioned to capitalize when work begins in earnest, which we anticipate to occur in the first half of fiscal year 2021. In addition, in our U.S. pumping business, there are a few markets that experience project delays due to COVID-19-related reasons. We are confident most of these projects will come back and include things in retail and hospitality space. The diversity of our revenue often shows the most value in times of uncertainty, and we are currently seeing that today. As I mentioned, Ecopan continues to gain momentum. Our infrastructure business, which we define as anything publicly funded, remains resilient, and our residential business is strengthening. Putting this together, we believe flat revenue growth was a good outcome in a challenging market. I'm also pleased to report that we were able to show the value of our roughly 70% variable cost structure. This showed most prominently in our ability to maintain a 39% adjusted EBITDA margin, As Iain will highlight, this was also aided by proactive measures we took across the organization to rationalize variable expenses. All of this was accomplished by continuing to strengthen our balance sheet. With our continued commitment to strengthen our balance sheet, we reduced net debt by $17.5 million during the third quarter and have access to $43.5 million of total liquidity as of July 31st. Our healthy operating cash flow and no near-term debt maturities has us continuing to feel comfortable with our liquidity during these uncertain times. Now I'd like to hand the call over to Iain so he can provide a detailed overview on our third quarter financial results. I'll then return to provide some color on our market expectations for the remainder of the year. Iain?