Good morning everyone and thank you for participating in today's conference call to discuss Concrete Pumping Holdings’ financial results for the fourth quarter and fiscal year ended October 31, 2018.

Joining us today are Concrete Pumping Holdings’ CEO, Bruce Young, CFO Iain Humphries and the Company’s External Director of Investor Relations Cody Slach. Before we go further, I would like to turn the call over to Mr.

Slach 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 Doug. I would 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 actual results to differ materially from such statement.

For information concerning these risks and uncertainties, the Concrete Pumping Holding Inc 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 revenue pro forma for acquisitions and adjusted EBITDA pro forma for acquisitions which are non-GAAP financial measures which adjust reported figures for nonrecurring items, constant currency and full year contributions of historical acquisition.

Please refer to the investor deck posted on our website for a definition and reconciliation of these measures GAAP. We believe the presentation of such non-GAAP financial measures is useful because it provides investors and industry analysts the same information that we use internally for purposes of assessing our core operating performance.

Also, please note that on December 6, 2018 we consummated the previously announced acquisition of the formerly private company formerly known as Concrete Pumping Holdings Inc, which we refer to as the business combination.

In connection with the closing of the business combination the Company changed its name from Concrete Pumping Holdings Acquisition Corp, to Concrete Pumping Holdings Inc and each of Industrea Acquisition Corp and the formerly private company formerly known as Concrete Pumping Holdings Inc became a wholly owned subsidiary of the Company.

Finally, the results described today for dates and periods prior to the business combination relate to the operations of the formerly private company formerly known as Concrete Pumping Holdings Inc unless otherwise indicated.

For additional information, please see our 8K amendment that we filed today which includes the historical Concrete Pumping Holdings’, financial statements that we're discussing on this call as well as pro forma financial information for the Company that reflects the business combination.

I would like to remind everyone that this call will be available for replay starting at 1:00 P.M. Eastern today.

The webcast replay will also be available via the link provided in today's press release as well as on the Company's website and updated investor presentation incorporating, updated financial results and adjusted financial information, pro forma for acquisitions is also available on the 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 morning everyone. It's a pleasure to be joining you. Today we will be discussing our results for the fourth quarter and fiscal year ended October 31, 2018.

Since this is our first earnings call as a public company, I'd also like to introduce Concrete Pumping Holdings to the marketplace and review our growth strategy, which we believe will drive long-term shareholder value.

For those of you that are new to the Company, I thought I would start with a brief introduction of our business founded in 1983 and headquartered in Denver, Colorado Concrete Pumping Holdings is a leading provider of concrete pumping services and concrete waste management services in the U.S. and UK.

Operating under the only established national brands in each country. We provide concrete pumping services in the U.S. from a diversified footprint of 80 locations across 22 states under the brand Brundage-Bone and in the UK from 28 locations under the Camfaud brand.

We believe we have approximately 10% and approximately 34% market shares respectively in the U.S. and in the UK. We also provide high-margin environmental waste management services through our high growth Eco-Pan brand.

Our large fleet of approximately 945 company owned units of specialized equipment and over 650 highly trained operators position us to deliver concrete placement solutions that facilitates substantial labor cost savings to our customers or typically construction contractors.

Our solutions also has shortened concrete placement times, enhanced worksite safety and improved construction quality relative to using alternative placement solutions such as wheelbarrows or cranes and buckets.

Our business model is unique in that we do not take project risk and therefore have no bonding and surety requirements, which is in contrast to many other construction services company. Also we have no raw material exposure and we do not take ownership of the concrete we’ve placed.

Since our founding we have completed more than 45 acquisitions that have aided us in building a platform with significant national scale and diversity across both the U.S. and the UK. This differentiates us from our competitors who typically only serve local areas and lack expertise and don't have the breadth of equipment that we own.

We have reasonably balanced end market exposure across commercial, infrastructure and residential markets with commercial and infrastructure comprising approximately 75% of our concrete pumping revenues in the U.S.

Finally, we have low customer and project concentration with our top 10 customers collectively representing less than 10% of our fiscal year 2018 revenue. Now I'd like to switch gears to our fourth quarter and fiscal year 2018 results. We ended fiscal 2018 on a strong note and I am encouraged by the underlying trends that we're seeing in the business.

For the fourth quarter, adjusted revenue pro forma for acquisitions increased 6% to $68.1 million. And adjusted EBITDA pro forma for acquisitions was up 2% to $22.4 million. For the year adjusted revenue pro forma for acquisitions increased 6% to $251.3 million and adjusted EBITDA pro forma for acquisitions was also up 6% to $83.4 million.

Several of our key growth initiatives were the main contributors to our solid performance in the year. Namely the organic growth of Eco-Pan, market share gains across all three segments and contributions from recent acquisitions.

Iain will provide more detail on our financial results later in the call, so I'd like to use the time to highlight a few of our key recent wins. First Eco-Pan a key growth driver of the Company had a solid performance both in the fourth quarter and for the full year.

For fiscal 2018, reported revenue was up 21% to $28.5 million as volume growth drove continued market share gains. We remain confident that the market demand for a full service, cost effective, regulatory compliance solution to manage environmental issues caused by concrete wastewater will continue to grow.

And we believe Eco-Pans compelling value proposition has positioned the business to benefit from this trend. Second in April of 2018, we acquired Richard O’Brien Companies in the U.S. This acquisition solidified Brundage-Bone’s presence in the Colorado and Arizona markets and provides our U.S.

concrete pumping segment with even greater national coverage in the U.S. marketplace. Lastly, in July of 2017 we acquired Reilly Concrete Pumping out of UK.

This acquisition provides our UK concrete pumping segment with a more comprehensive footprint across the region allowing the Company to provide its diverse customer base with a truly national service offering for major infrastructure and commercial projects.

I'd like to note that particularly partially offsetting the solid growth of our adjusted revenue pro forma for acquisitions in the fourth quarter was adverse weather conditions, particularly heavier than usual rain in Texas and Oklahoma markets, which pushed our business originally anticipated for the fourth quarter of fiscal 2018 into fiscal 2019.

Based on the positive trends we are seeing in the business and marketplace, we are currently performing in-line with expectations for fiscal 2019. Before providing an update on our growth strategy, I will pass the call over to Iain to walk through a more detailed financial overview.

Iain?.

Thanks Bruce and good morning everyone. Before getting into the details, I'd like to remind everyone that we would refer to adjusted revenue pro forma for acquisitions and adjusted EBITDA pro forma for acquisitions both of which are non-GAAP financial measures.

A reconciliation between our reported GAAP results and the non-GAAP results discussed can be found in our investor presentation posted on our website. Now turning to our 2018 full year results, as Bruce mentioned, we finished fiscal 2018 on a strong note as fourth quarter adjusted revenue pro forma for acquisitions increased 6% to $68.1 million.

On a reported basis, revenue increased 13% to $67.4 million compared to $59.6 million in the year-ago quarter, largely driven by contributions from the acquisition of Richard O’Brien company as well as continued growth over Eco-Pan brand and market share gains in Brundage-Bone and Camfaud.

All three of our business segments have strong fourth quarter and fiscal year reported 2018 results. The U.S. concrete pumping segment or Brundage-Bone saw reported revenue increase 11% for the fourth quarter and 9% for the full-year.

Results were driven by the acquisition of Richard O’Brien companies, positive construction momentum in the first half of the year and primarily in the west and central regions as well as favorable winter conditions in the west region.

As Bruce mentioned this was partially offset by adverse weather, mainly in the Texas and Oklahoma markets, in the fourth quarter. Many of these impacted projects have now kicked off in fiscal 2019. The UK segment or Camfaud increased reporting revenue by approximately 20% in the fourth quarter and 38% in fiscal 2018.

Results were driven by the full year contribution in 2018 from the Reilly Concrete Pumping acquisition in July 2017, as well as increased market share from operating a broader footprint across the UK region. The Concrete Waste Management Services or Eco-Pan grew reported revenue by 15% in the fourth quarter and 21% in the full year.

The strong organic growth was driven by increased customer adoption of the Eco-Pan services in response to market demand for premiere concrete waste management services. Eco-Pans largest market is the west region, which had solid performances in our mature Washington, Utah and California markets.

Turning back to our consolidated results, gross profit increased 10%, $28.9 million over the year ago quarter. Gross margin was 42.9% down 120 basis points from last year, due in part to adverse weather conditions that impacted Brundage-Bone.

General and administrative expense increased 19% in the fourth quarter to $15.9 million compared to $13.4 million in the fourth quarter fiscal year 2017. As a percent of revenue, general and administrative expense was 23.6% compared to 22.5% last year, also due in part to adverse weather conditions that impacted Brundage-Bone.

Net income improved to $1.4 million from $1.1 million in the year ago quarter. The improvement was largely driven by higher revenue, slightly offset by increased nonrecurring transaction costs resulting from the business combination with Industrea Acquisition Corp.

Net income per diluted common share, which takes into account dividends on preferred shares and undistributed earnings allocated to preferred shares was $0.09 in the fourth quarter of fiscal year 2018 compared to $0.07 in the fourth quarter of fiscal 2017.

Now that the aforementioned preferred shares were fully redeemed at the closing of the business combination and we do not expect that preferred dividends will continue. Finally, adjusted EBITDA pro forma for acquisitions increased 2% to $22.4 million in the fourth quarter compared with $21.9 million last year.

Transitioning to our full year results for the fiscal year 2018, adjusted revenue pro forma for acquisitions increased 7% to $250.2 million and reported revenue was up 15% to $243.2 million. Gross profit in fiscal year 2018 increased 18% to $106.3 million compared to $89.8 million last year.

Gross margin increased by approximately 120 basis points to 43.7% from 42.5% in fiscal year 2017, largely due to lower depreciation expense and higher utilization rates across our equipment fleet. General and administrative expense increased 11% to $58.8 million in fiscal year 2018 compared to $52.9 million in fiscal year 2017.

As a percent of revenue, general and administrative expense decreased 80 basis points to 24.2% compared to 25% last year. Net income improved slightly to $28.4 million compared to $0.9 million in fiscal year 2017.

The increase was driven by a contribution of higher revenue at higher gross margin and an income tax benefit due to the tax reform asset depreciation rules and a loss on extinguishment of debt incurred in fiscal year 2017 that did not repeat in fiscal year 2018.

Net income per diluted common share, which takes into account dividends on preferred shares and undistributed earnings allocated to preferred shares that were redeemed at the closing of the business combination, was $2.47 in fiscal year 2018 compared to a loss of $0.12 in fiscal year 2017.

Adjusted EBITDA pro forma for acquisitions increased 6% to $83.4 million compared to $78.4 million in fiscal year 2017. Capital expenditures pro forma for acquisitions were $28 million for the year, which was slightly above our original outlook, largely due to higher investment in Eco-Pan.

This incremental spend was done opportunistically and an effort to drive continued growth in [indiscernible]. Turning to the balance sheet, we ended fiscal year 2018 with $8.6 million in cash and $237.1 million of debt.

As of December 6, 2018, the date we closed the business combination with Industrea Acquisition Corp, we had approximately $11 million drawn on our new $60 million ABL revolver in connection with the transaction. This brought total debt at the closing date to $368 million.

As a reminder, our business generates significant free cash flows as we invoice customers daily as the work is performed. And we have minimal working capital requirements as we do not take ownership of the company replaced.

This ability to generate strong free cash flows gives us comfort with our current debt levels and will allow us to delever the balance sheet over time. Looking ahead, there is solid momentum in the business from a strong fiscal year in 2018 combined with positive underlying market trends predominantly in the commercial and infrastructure sectors.

Also in terms of potential growth in public infrastructure spending in both the U.S. and the UK, we are well positioned to win larger scale projects, due to our national presence and fleet capabilities relative to our peers. With that, I will now turn the call back over to Bruce to walk you through our growth strategy..

Thanks Iain. I think it's important to review the key elements of Concrete Pumping Holdings’ compelling growth strategy that we believe can drive long-term shareholder value. More detail around these growth strategies can be found in the updated investor presentation we posted to our website this morning.

First, Eco-Pan is a high growth and high – and margin accretive business that we believe is under penetrated in the market place that only 3% to 4% penetration in the U.S. The brand has a large white space opportunity as well as the ability to grow by cross-selling its services across both Brundage-Bone and Camfaud’s customer base.

Currently Eco-Pan only operates in 13 locations in the U.S. compared to Brundage-Bone’s 80 locations and we'll start expanding into the UK in the second quarter of fiscal 2019. Only 25% of the Eco-Pan’s business is currently with Brundage-Bone’s own pumping units.

There are three key drivers we expect will increase Eco-Pan’s penetration with the first being violation avoidance. Eco-Pan provides a simple leak-proof solution that allows our contractor customers to be compliant with EPA and state regulations.

The second driver is environmental protection, our high quality pans are far less likely to leak or spill than alternatives that easily that include messy with washout pits. And finally, Eco-Pan is a turnkey solution for contractors allowing them to focus on their core jobs.

We believe Eco-Pan is the industry's most advanced and regulatory compliant turnkey solution which will drive increased adoption. This is coupled with Eco-Pan’s strong unit economics with an approximate 44% EBITDA margin, 54% unlevered ROI and a 1.9 year payback period per new route investment.

Second, since our founding, we have successfully completed more than 45 acquisitions and created what we believe is the only concrete pumping business with national scale in the U.S. and UK markets. We have historically paid average adjusted EBITDA multiples of just 4.5 times or less before accounting for synergies.

Our benefits of scale in a highly fragmented market have enabled us to increase the EBITDA margins of our acquired businesses which have been around 20% at the time of acquisitions to levels around the approximate 30 plus percent that CPH achieves today.

The leverage we use to increase the profitability of these businesses includes utilization enhancement and cost synergies. We are in active discussion with several potential targets and have built an acquisition pipeline that represents over $100 million of incremental adjusted EBITDA.

Third, there are several secular tailwinds that we believe will drive our continued market share gains.

For instance, we are seeing positive trends in the commercial construction sector with current robust level is still well below long-term averages and as those jobs are increasingly becoming more complex and worksites becoming more crowded and dangerous, we are in a good position to win new business due to our extensive experience, fleet diversity and national presence.

Additionally, our customers, many of whom are large contractors continue to capture market share of projects won are reducing their number of pumping providers as they prefer national players and are pulling us into new markets as they have come to depend on our extensive fleet and reach.

For similar reasons, we also believe we can benefit from increased government infrastructure spending in the U.S. and in the UK.

As an example, the UK $77 billion high speed rail project is anticipated to generate significant demand for concrete pumping services and we expect to win a meaningful amount of that work giving our approximate 34% market share in the UK. Finally, we have a track record of price optimization. We believe that will support our future growth.

We have found that our customers play a significant value on our concrete pumping service relative to other placement alternatives viewing pumping as an insurance policy against significantly higher costs associated with concrete wastage and utilization of on-site labor inefficiently.

To give you a little background, ready-mix concrete which perishes at about 90 minutes represents approximately 10% of a typical projects cost versus only about 1% to 2% of project cost for Concrete Pumping.

Through our broad and extensive experience, we have developed an analytical job costing tool that makes – that takes into account, customer characteristics, market dynamics and underlying economic conditions to allow us to better price jobs to maximize profit potential.

The success of our analytical job costing tools is evidenced in our four-year compound annual growth rate in revenue per billed hour of 3% in the U.S. and 6% gross rate of revenue per billed job in UK from fiscal year 2014 to 2018.

To close, I believe our high margin and fast growing Eco-Pan brand, our ability to increase market share across the brand portfolio and our ability to optimize pricing creates a compelling value proposition for long-term growth in shareholder value creation.

Also assist the markets that we operate in are highly fragmented, the platform we have built will allow us to make accretive acquisitions that not only drive our returns on capital, increase cash flows that are also brand accretive and will also allow us to better serve our customers.

Finally, management have significant investment in shareholder value creation. As a business combination with Industrea Acquisition Corp, we own approximately 13% of the company on a fully diluted basis. That concludes my prepared remarks. I'd like to now turn the call back over to the operator for questions and answers.

Doug?.

Hey, Doug, we're ready to take questions now..

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Alex Rygiel with B. Riley FBR. Please proceed with your question..

Good morning, Bruce and Iain. Congratulations on your first conference call..

Thank you..

Hey good morning..

Couple of random questions. First, Iain, you talked a little bit about some opportunities being pushed from the fourth quarter into the first quarter.

Is there any way you can bracket the sales that might have been pushed from the fourth quarter into the first quarter? And secondly, were any of those projects cancel for any reason or should they all affectively be fully realized in this first quarter?.

So the projects typically will push into the following year. I mean, depending on whether its incremental revenue in the first quarter is largely depending on the contractors’ ability to catch up.

And historically we haven't seen this from our contractor, just with the labor constraint – this would become and let's see, additional revenue, but none of the projects were canceled. But we’ll see these projects come through in 2019, whether they’re incremental will largely depend on the contractors’ ability to catch up.

And from a revenue perspective, it was probably around about $1.5 million in revenue..

Helpful. Thank you. And then you ran through the numbers kind of quickly there, but can we circle back to fourth quarter U.S.

pumping and UK pumping and could you possibly break down what the price and volume mix of the growth was year-over-year?.

Yes, I mean, across both the U.S. and UK pumping. I mean, the price increase you may have seen it on our investor deck this morning. And in the U.S. was about 2.5% on price and about 4% in the UK. In terms of the growth, it's quite close to 50/50 between price and volume..

Very helpful.

And then can you expand a little bit upon your planned greenfield initiatives both in the Eco-Pan business as well as the pumping business for 2019, how many markets so on?.

Yes. Alex, this is Bruce. So, currently with Brundage-Bone, we've been expanding into one greenfield market into Charlotte, North Carolina area, which is going quite well for us. We have some others in mind that are really just expanding our footprint in areas that we're currently in.

With Eco-Pan, we're in the process of moving into six new locations, five of the six locations are locations that are currently Brundage-Bone locations. So we can leverage the Brundage-Bone sales and service teams.

One would be in a market that's just outside of the current market would be basically running the satellite over southern California operation..

And can you remind us how long it takes those markets to sort of get up to a mature revenue sales contribution level?.

It ranges anywhere from being able to be profitable within one to two months to, on the outside, four to five months. But largely, we get full utilization out of the first truck. It's usually somewhere between six months in a year..

Very helpful.

And then, can you update us on the timing of when you might receive some of the high speed rail awards in the UK and when it might come through your P&L?.

Yeah, so we're in the process of bidding most of the or the first phase of that project now and we expect to see some – we'll see spotted revenue throughout this year with significant revenue coming towards the end of this year..

Excellent. And a short update or comment there with regards to sort of your 2019 outlook, can you maybe go into a little bit more detail there with regards to your views on sales and EBITDA in 2019..

Yeah, so we published it in our prior investment deck and the outlook for 2019 there was, we don’t break this down quarterly.

And you'll have seems from some of the historic information with the October fiscal year end and we usually ramp-up through the quarters and the expectation is the same for 2019 as we go through Q1 to Q4 but Q1 coming into the early winter months..

So you're still comfortable with kind of a revenue in that $270 million to $275 million range and EBITDA, give or take $95 million?.

Yes..

Perfect. I'll get back in queue. Thank you very much..

Thank you..

Thanks Alex..

[Operator Instructions] There are no further questions in the queue. I'd like to hand the call back to Mr. Young for closing comments..

Thanks, Doug. We'd like to thank everyone for listening to today's call. I'd also like to quickly thank the entire Concrete Pumping Holdings organization for their continued focus and dedication, especially during the exciting transition to become a public company. We look forward to speaking with you when we report our first quarter results.

Thank you..

Ladies and gentlemen, this does conclude today teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day..