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 first quarter ended January 31st, 2025. Joining us today are Concrete Pumping Holdings CEO, Bruce Young, CFO, Ian Humphries, and the company's External Director of Investor Relations, Cody Slaw. Before we go further, 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 of Litigation Reform Act of 1995, that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Thanks, Jamali. 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 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 to the company's website. Now, I would like to turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

Thank you, Cody, and good afternoon, everyone. Our first quarter was again impacted by volume-driven declines in our U.S. concrete pumping segment, offsetting continued growth in our concrete waste management business. Specifically, lingering higher interest rates from higher-than-expected monetary policy during our first fiscal quarter affected the timing of commercial projects. Additionally, extreme weather conditions in our Central Mountain, Southeastern, and South regions, particularly in Texas, further impacted our revenue. In fact, we estimate some of the historic freezing temperatures and wet weather reduce our revenue by approximately $5 million in a quarter. In the UK, the impacts of sustained higher interest rates on commercial project volume largely followed similar trends we experienced domestically. But our infrastructure projects and improved pricing held up well considering the market backdrop. Despite the challenges in our pumping markets, our disciplined fleet management and cost control strategies enable us to increase gross margins and sustain our adjusted EBITDA margin in the first quarter. This flexible capital investment strategy combined with our strong unit economics, expanding liquidity, and improving balance sheet strength positions us well for a market recovery in fiscal 2025 and beyond. Turning to specific comments by end market, within our commercial end market, we continue to experience construction softness across a variety of commercial work, especially in light commercial, warehouse, manufacturing, and office buildings, which tend to be more interest rate sensitive. Larger commercial projects remain mostly durable but continue to move at a slower pace given the economic backdrop. Our residential end market remained resilient, especially considering the interest rate environment. In fact, our mix of our U.S. concrete pumping work in the residential end market was resilient at 33% of total revenue on a trailing 12-month basis. We continue to see residential construction investments within our mountain region and in Texas, which represents undersupplied regions where single-family construction is prominent. We still expect the structural supply-demand imbalance in housing will continue to support home-building activities especially as home builders entice customers with creative solutions that include rate buy-downs, and we believe the Federal Reserve's path to interest rate reductions should continue to support this end market's growth. Offsetting some of our commercial market softness, revenue share in our infrastructure markets grew slightly year over year in the first quarter. In the U.K., infrastructure growth has continued, and our U.S. national footprint has allowed us to win more publicly funded projects. We expect our infrastructure business to grow in fiscal 2025 due to the funding environment in the UK as well as opportunities domestically from the conversion of allocated budget funding into project starts within our Infrastructure Investment and Jobs Act. I will now let Ian address our financial results in more detail before I return to provide some concluding remarks.