- Consolidated Revenue: $107.1 million, a slight decrease from $107.8 million in the same year-ago quarter.
- US Concrete Pumping Revenue: Decreased 5% to $74.6 million from $78.4 million in the prior-year quarter.
- UK Operations Revenue: Improved 2% to $15.5 million from $15.2 million in the prior-year quarter.
- US Concrete Waste Management Services Revenue: Increased 19% to $16.9 million from $14.2 million in the prior-year quarter.
- Gross Margin: 39%, down from 40.3% in the same year-ago quarter.
- General and Administrative Expenses: Decreased to $29.7 million from $30.2 million in the same year-ago quarter.
- Net Income: $2.6 million, or $0.05 per diluted share, compared to $5.2 million or $0.09 per diluted share in the same year-ago quarter.
- Consolidated Adjusted EBITDA: Decreased 4% to $27.5 million from $28.8 million in the same year-ago quarter.
- Adjusted EBITDA Margin: Declined to 25.7% from 26.7% in the same year-ago quarter.
- US Concrete Pumping Adjusted EBITDA: Decreased 11% to $17.2 million from $19.3 million in the same year-ago quarter.
- UK Operations Adjusted EBITDA: Increased 8% to $4.1 million from $3.8 million in the same year-ago quarter.
- US Concrete Waste Management Adjusted EBITDA: Increased 8% to $6.2 million from $5.7 million in the same year-ago quarter.
- Total Debt Outstanding: $391.4 million, with net debt of $373.5 million.
- Net Debt to EBITDA Leverage Ratio: 3.2 times.
- Liquidity: Approximately $216.9 million as of April 30, 2024.
- Share Repurchase Program: Repurchased approximately 171,000 shares for $1.3 million at an average price of $7.42 per share during the second quarter.
- Full-Year Revenue Guidance: Revised to range between $455 million and $465 million.
- Full-Year Adjusted EBITDA Guidance: Revised to range between $120 million and $125 million.
- Free Cash Flow Target: At least $75 million for fiscal 2024.
- Net Leverage Ratio Target: Approximately 2.75 times by the end of fiscal 2024.
Release Date: June 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue in the infrastructure and residential sectors grew year over year by 14% and 12%, respectively.
- Concrete waste management services segment sustained double-digit growth despite challenging conditions.
- UK operations maintained stable performance with strong organic growth momentum.
- Free cash flow target of at least $75 million for 2024 is expected to be met.
- Strong liquidity position with approximately $216.9 million available, providing flexibility for future investments.
Negative Points
- US concrete pumping segment experienced a 5% revenue decline due to commercial project volume decreases and adverse weather.
- Gross margin decreased to 39% from 40.3% year-over-year, impacted by lower revenue volumes and increased insurance costs.
- Net income available to common shareholders decreased to $2.6 million from $5.2 million year-over-year.
- Adjusted EBITDA decreased 4% to $27.5 million, with a margin decline to 25.7% from 26.7% year-over-year.
- Persistent inflation and higher interest rates continue to affect commercial project volumes and profitability.
Q & A Highlights
Q: Just curious as it pertains to the revised outlook, does that primarily reflect the pressures you saw during this quarter in the first half of the year, or does it also incorporate a more cautionary outlook on the back half of this year, perhaps as it relates to commercial project activity?
A: We do think that the second half of the year is going to have some of the same concerns that we've seen in the first half of the year. We did have several weather delays in the first half of the year that we don't expect, but we do feel that commercial market is going to be a little sluggish through the remainder of this year. (Bruce Young, CEO)
Q: In terms of some of the early rollout from IIJ infrastructure investment, what types of projects are you seeing come through first as it relates to that investment opportunity, and how much visibility do you have into future projects tied to the IIJ?
A: We are seeing healthcare projects, road and bridge work, airport projects, and water and wastewater projects. It's a mixed bag across the board, but it's starting to build momentum, and we're starting to build a little more of a backlog. We anticipate that getting better through this year and even stronger next year and for several years to come. (Bruce Young, CEO)
Q: Could you guys talk a little bit about the weather impact? How many days did you guys miss? Or maybe even from a utilization perspective, how we were this quarter versus the prior year?
A: We lost about $2 million revenue due to unexpected weather in the second quarter. Utilization did pick up sequentially, but not as much as we would have seen in the prior-year quarter. It is maybe like 2 percentage points different from the prior year, just with some of those weather delays. (Iain Humphries, CFO)
Q: The waste business, nice growth there. Are you guys moving into new markets? Is it better uptake in existing markets? And maybe kind of how much more of the US do you have left to cover with that product?
A: Our growth there comes from moving into a few new markets, basically adjacent markets to markets we're currently in that are very easy for us to service. We're also gaining more penetration in the markets that we're currently in. We still are in only 7% of that market, so we believe we have quite a bit of runway ahead. (Bruce Young, CEO)
Q: Does the competitive environment on rates mean you want to accelerate M&A to consolidate some of the markets and alleviate some of those concerns?
A: We are looking at several businesses right now. Inflation has hurt our industry, and most businesses we're looking at have challenging margin issues. We think that will start shifting into next year, and we look forward to continuing to do more consolidation, which could help with the rates. (Bruce Young, CEO)
Q: Could you talk about the oversaturation of concrete pumps in certain markets and what the company plans on doing to make sure this is not a headwind in the second half?
A: There were more concrete pumps brought into the market than needed. For 2024, there are fewer machines going into the market than in 2023. We are careful within our own business to ensure we are running at the right utilization, and our CapEx spend is much less this year. We will sell off assets to benefit us, and over the next year or so, we'll see that settle out. (Bruce Young, CEO)
Q: Would revenue and volume have been flat otherwise if you had favorable weather? And could you provide a glimpse of what you've seen post the quarter through May regarding weather impact?
A: The volume would have been largely in line with where we'd expect to be. If the weather had cooperated, at least flat would have been more in line with where we'd expect to be. May is early in the quarter to call out anything specific, but we'll factor that into the updated guidance for the rest of the year. (Iain Humphries, CFO)
Q: Could you clarify or elaborate on what you're seeing on larger projects like semiconductors and EVs relative to smaller- or medium-sized general commercial projects?
A: Several large projects in the planning stage have been pushed out, but we do anticipate them starting later in the year or into next year. We are encouraged about the long-term opportunities there, but it has affected us in the short term. (Bruce Young, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
