Concrete Pumping Holdings, Inc.

Thank you. I'd like to remind everyone that during 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 because 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 of the comparable GAAP measures in our press release issued today. or in 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'd like to turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

Thank you, Cody, and good afternoon, everyone. In the fourth quarter, our results continued to demonstrate the durability of our operating model and the benefit of our diversified platform, despite a challenging macroeconomic backdrop. U.S. concrete pumping volumes in the fourth quarter remained stable in the commercial market, and the continued improvement in infrastructure was offset by lower home building volumes and softer residential construction markets. Our Ecopan waste management services segment again delivered steady year-over-year growth, underscoring the benefits of our diversified platform. In addition, our disciplined approach to cost management, fleet efficiency, and strategic pricing played an important role in managing top-line pressure and supporting profitability. Turning to specific comments by segment, within our U.S. pumping business, we continue to experience year over year improvement in publicly funded infrastructure work, including road, bridge, and education projects. Infrastructure projects are 24% of our U.S. concrete pumping revenue during fiscal 2025, and our national footprint remains an advantage as previously allocated federal and state funding moves into proactive project starts. In the commercial end market, which was 47% of our U.S. concrete pumping revenue, the demand environment in heavy commercial construction improved through the year in our key geographies, and this is underpinned by expansion in data center, chip plant, and large warehouse activity. Light commercial activity was softer year over year as construction volumes remained more sensitive to interest rate pressure and tariff-related uncertainty. Moving on to the residential end market, affordability constraints from higher interest rates continue to cause downward pressure on home building demand volumes and year-over-year revenue was lower in this end market despite pricing being relatively stable. A residential end market mix was at 29% of total revenue on a trailing 12-month basis, and we expect that moderating mortgage rates will encourage a steady path towards normalization to address the structural supply demand imbalance in housing. We expect this will support medium to long-term home building activity, and we believe the Federal Reserve's path to interest rate reduction should provide incremental support to this end market growth over time. Moving to our UK operations, commercial construction activity remains subdued as elevated interest rates and economic uncertainty continue to weigh on volumes. However, infrastructure remains resilient in the UK, particularly in energy projects and continued growth in HS2 rail construction, which still has a long construction runway remaining to project completion. In our US concrete waste management business, we continue to increase revenue due to both organic volume and pricing growth, even as the broader US construction markets remain challenged. Now I'd like to pivot to 2026 in our capital investment plans, particularly surrounding an upcoming change with tighter emission standards that we believe will impact the broader construction industry. As a company focused on sustainable growth and long-term shareholder value, we are proactively accelerating a $22 million investment from fiscal 2027 into fiscal 2026 in our U.S. concrete pumping and Ecopan fleet to advance in advance of the upcoming 2027 stricter NOx emission standards. For those of you who are unaware of what this means, NOx refers to nitrogen oxides, which are emissions produced by diesel engines and regulated due to their impact on air quality. The upcoming 2027 standards that are expected to go into effect January 1, 2027, will significantly tighten allowable NOx emission levels for new heavy-duty equipment. For fleet operators like concrete pumping holdings, these standards affect the cost, design, reliability, and availability of new OEM equipment and will increasingly influence customer preferences on job site requirements. The decision to accelerate equipment purchases is based on a couple of key considerations, including navigating expected disruptions from first-generation truck technologies and anticipated truck price increases in 2027 driven by incremental OEM production costs. From an operational standpoint, we have experienced this change in emission regulations before, and transitioning heavy construction equipment to meet modern NOx emission standards is far more complex than simply replacing an engine or adding emissions hardware. These changes fundamentally alter how the equipment behaves in real-world conditions, and the last engine emissions change took several years to achieve an acceptable standard. This pull forward of a significant portion of fiscal year 2027 investment will reduce replacement cap expenditures in fiscal year 2027 and aligns with our capital allocation roadmap to allow for a smooth transition under new regulations to improve the company's competitive positioning. I will now let Ian address our financial results in more detail before I return to provide some concluding remarks. Ian?

Thanks, Bruce, and good afternoon, everyone. Moving right into our fourth quarter results, revenue was $108.8 million compared to $111.5 million in the prior year quarter. The slight year-over-year decline reflects continued timing delays in commercial construction activity and softness in residential demand driven primarily by the prolonged high interest rate environment. Revenue in our U.S. concrete pumping segment, mostly operating under the Burndage Bone brand, with $72.2 million compared to $74.5 million in the prior year quarter. Looking at our end markets, infrastructure projects remained a bright spot, with demand supported by sustained federal and state investments. Commercial project volume was largely consistent with the prior year fourth quarter. Strength in heavy and complex commercial projects helped to offset softness in light commercial work that continues to feel the pressure from high interest rates. Residential demand softened late in the fiscal year, consistent with the broader affordability challenges and the prolonged high-interest rate environment. Revenue in our U.S. concrete waste management services segment, operating under the Ecopan brand, increased 8% to $21.3 million compared to $19.8 million in the prior year quarter. This organic growth was driven by higher pan pickup volumes and continued pricing momentum. underscoring the durability of this business through the cycle. For our UK operations, operating under the Canford brand, revenue was 15.3 million compared to 17.1 million in the same year-ago quarter. The decline was primarily volume-driven, reflecting ongoing weakness in commercial construction activity amid elevated interest rates and economic uncertainty. Foreign exchange translation was a 220 basis point benefit to revenue in the quarter. Returning to our consolidated results, fourth quarter gross margin declined 170 basis points to 39.8% from 41.5% a year ago. As we continue to focus on the elements of business that we can control, a strong emphasis on cost control initiatives and pricing discipline help mitigate margin pressure from lower demand volumes. However, these benefits were slightly outweighed by lower volumes and reduced fleet utilization. General and administrative expenses in the fourth quarter were $26.5 million compared to $27 million in the prior year quarter. As a percentage of revenue, G&A was 24.4% in the fourth quarter compared to 24.2% in the prior year quarter, reflecting some operating deal leverage on lower revenue rather than an increase in absolute spending. Net income available to common shareholders in the fourth quarter was $4.9 million, or $0.09 per diluted share compared to $9 million or $0.16 per diluted share in the prior year quarter. Consolidated adjusted EBITDA in the fourth quarter was $30.7 million compared to $33.7 million in the same year-ago quarter. Adjusted EBITDA margin was 28.2% compared to 30.2% in the prior year quarter. The decline was primarily driven by lower revenue volumes, partially offset by ongoing cost initiatives across the organization. In our U.S. concrete pumping business, adjusted EBITDA declined to $17.5 million compared to $19.7 million in the same year-ago quarter. In our U.K. business, adjusted EBITDA was $4.1 million compared to $5.2 million in the same year-ago quarter. And for our U.S. concrete waste management services business, Adjusted EBITDA increased 3.8% to $9.1 million, reflecting robust operating leverage on higher volumes and pricing. Turning now to liquidity, at October 31, 2025, we had total debt outstanding of $425 million, a net debt of $380.6 million, representing a net debt to adjusted EBITDA leverage ratio of approximately 3.9 times. We ended the quarter with approximately 360 million of available liquidity, including cash on hand and availability under our ABL facility, providing substantial financial flexibility. Now moving on to our share buyback plan. During the fourth quarter, we repurchased approximately 274,000 shares for $1.8 million, or an average price of $6.73 per share. Since initiating this program in 2022, we have repurchased approximately 4.9 million shares for roughly $31.5 million, with $18.5 million remaining in the current authorization through December of 2026. We continue to view repurchases as a flexible and opportunistic component of our capital allocation strategy that demonstrates our ongoing commitment to delivering enhanced shareholder value. Turning to our outlook for fiscal 2026, We expect revenue to range between $390 and $410 million and adjusted EBITDA to range between $90 and $100 million. Our guidance assumes no meaningful recovery in the construction markets during fiscal year 2026. While overall manufacturing and commercial activity remains muted due to interest rate and tariff uncertainty, we continue to see healthy bidding activity and project starts in large-scale commercial projects such as data centers, semiconductor facilities, and distribution centers, where pricing remains constructive. In our infrastructure and residential end markets, we expect 2026 revenue to be roughly flat year over year. We expect free cash flow, which we define as adjusted EBITDA, less net replacement capex, less net cash paid for interest, to be at least $40 million. The 2026 outlook assumes approximately $23 million of net replacement capex, and $32 million of net cash paid for interest. This excludes the exceptional accelerated capex brought forward from 2027. As Bruce mentioned, we are incorporating accelerated fleet investment into our fiscal 2026 planning and long-term capital allocation framework. In fiscal 2026, we expect to invest approximately $22 million that has been accelerated from our planned 2027 capital allocation investments. This represents a timing shift rather than a structural change to our long-term capital framework, with our fleet net replacement expected to be low single-digit percentage of revenue in fiscal 2027. Our balance sheet and liquidity position is comfortable to support this fleet investment, and we remain committed to disciplined capital deployment, maintaining leverage within our target range, and prioritizing returns on invested capital. We believe we are well positioned to strengthen our service offering in anticipation of a market recovery. With that, I'll now turn the call back to Bruce.