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 second quarter ended April 30th, 2021. Joining us today are Concrete Pumping Holdings CEO, Bruce Young, CFO, Ian Humphreys, and the company's external director of investor relations, Cody Slaw. Before we begin, I would like to turn the call 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, Paul. I'd like to remind everyone that in the course of this call, to give you a better understanding of our operations, we will be making certain forward-looking statements regarding our business and outlook. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Concrete Pumping Holdings annual report on Form 10-K, quarterly report on Form 10-Q, and other publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. On today's call, we will also reference certain non-GAAP financial measures, including adjusted EBITDA, net debt, and free cash flow, which we believe provide useful information for investors. We provide further information about these non-GAAP financial measures and reconciliations to the comparable GAAP measures in our press release issued today or the investor presentation posted on the company's website. I'd like to remind everyone this call will be available for replay later this evening. 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 company's 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. I am very pleased to report that our second quarter continued to highlight the resilience of our business, the flexibility of our projects, and the profitability of our business model. We experienced record-setting sub-freezing temperatures in our Texas market that brought our business to a halt for half the month of February. The same cold weather front also affected construction activities in our central region, especially when compared to unseasonably favorable weather conditions experienced in the prior year. However, as a testament to our resilient business model, we delivered a second quarter that returned solid, consolidated revenue growth, strong margins, and free cash flow performance that was in line with our internal expectations. This included continued growth in our market share, strength in our residential and infrastructure projects, and the continued recovery in our commercial work. We continue to demonstrate our strong financial profile with $28.5 million in year-to-date free cash flow that contributed to our improving total available liquidity of $134.9 million. Given our execution to date, we remain in a strong position to execute upon our strategic priorities and financial outlook in 2021. To provide a bit more detail about our Q2 results, total consolidated revenue improved by 4% compared to a year ago. Our second quarter last year was partially impacted by COVID-19 as the pandemic really started to set in during the month of April. Our ability to return to revenue and margin growth is a testament to our scale, diversified regional and market exposure, and our highly variable cost structure. Now to review our individual reporting segments. In our U.S. pumping business, revenue was down slightly due to the historic winter storm in February impacting our Texas and central regions and continued COVID-19 headwinds in some of our commercial projects. This volume headwind was mostly offset by continued strength and market share expansion in our other regions across the residential and infrastructure sectors. In our UK segment, revenue was up 41% due to a strong recovery from the impacts of COVID-19 as our UK operations were hit harder by the pandemic earlier and for a more prolonged period than our US business. In Ecopan, revenue increased almost 9% due to continued organic growth, pricing improvements, and growth in our roll-off service adoption. Ecopan revenue growth was slightly muted when compared to the pre-pandemic times due to our team's difficulty to thrive in a virtual sales environment. However, with our customers getting more and more comfortable in a virtual selling model and with the gradual reopening of the economy, we are optimistic about returning to our double-digit sales growth rate soon. In fact, we continue to make additions in our Ecopan sales force during the quarter to strengthen our longer-term growth strategy. Now turning to some end market commentary, in the residential market, demands remain especially strong for single-family homes, and we have been able to capitalize on that momentum. As discussed on our prior calls, residential construction has been a bright spot for our company, and we expect it to represent roughly a third of our total sales this fiscal year, compared to a 30% in fiscal 2020. While the pandemic has caused some weakness in the commercial construction markets, we have intentionally shifted our focus and tailored capture residential opportunities and have picked up several new customers as a result. From a commodities and supply chain perspective, the recent lumber shortages and other impact costs increased in the industry have not affected demand for our services, and we expect the residential market to remain strong over the near term. Staying on commodities for a moment, there are some headwinds on cement availability in our U.S. business. Several cement plants have undergone critical maintenance, which has introduced some regional tightness in the cement material supply. While this is expected to be a short-term issue, there is yet another example of the value of our fleet management agility, scale, and diversity. While we do not purchase, transport, or own this commodity, wherever possible, we are utilizing our breadth of relationships to help mitigate any project delays our customers may face. We are also seeing continued success with our infrastructure projects in the US and the UK. The UK market has always been infrastructure project heavy, including the concrete intensive high speed railway project that was flat that will last beyond 2030. In the US we have a steady flow of industrial projects supported by public funding, including bridges, schools, wastewater treatment plants and hospitals. Much talk as of late surrounds around the current administration's proposed infrastructure bill. We believe an infrastructure bill will ultimately be passed, although the size, timing, and many other details are still unknown. Importantly, our current outlook for fiscal 2021 does not include possible benefits of an infrastructure bill as we believe any resulting construction would not begin until fiscal 2022. However, many states are beginning to return to fiscal health and we should be able to capitalize on increased infrastructure spending on the state level with or without the passage of an infrastructure bill. As a result, the infrastructure verticals should become a larger percentage of our overall revenue mix over time. Our commercial projects continue to recover along with the nation's recovery from the pandemic. This includes continued progress in high-growth markets such as fulfillment centers and data centers. For reference, we have completed multiple fulfillment centers that require as much concrete as a 25-story building and are currently working on projects that are as large as a 50-story building. The typical data center requires about 80% of the amount of concrete in a typical fulfillment center. So we were pleased with our operational execution and financial performance in the second quarter and with the trajectory it puts on us for the remainder of the year. I will return to discuss our long-term growth strategy and provide a market outlook. But for now, I will pass the call off to Ian to discuss our second quarter financial results. Ian?