UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____ to ____
Commission File Number:
CONCRETE PUMPING HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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| (Address of principal executive offices) | (Zip Code) |
(
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | | ☒ |
| Non-accelerated filer | ☐ | Smaller reporting company | |
| Emerging growth company | |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 30, 2024, the registrant had
CONCRETE PUMPING HOLDINGS, INC.
QUARTERLY REPORT ON FORM 10-Q
fOR THE PERIOD ENDED July 31, 2024
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| Part I. Financial Information |
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| Item 1. |
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| Condensed Consolidated Statements of Comprehensive Income (Unaudited). | 5 | ||
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Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) |
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Notes to Unaudited Condensed Consolidated Financial Statements |
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| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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| Item 4. |
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| Part II. Other Information |
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| Item 1. |
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| Item 1A. |
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| Item 2. |
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| Item 3. |
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| Item 4. |
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| Item 5. |
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| Item 6. |
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| Signatures | 40 | ||
PART I
Concrete Pumping Holdings, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| As of July 31, | As of October 31, | |||||||
| (in thousands, except per share amounts) | 2024 | 2023 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Receivables, net of allowance for doubtful accounts of $and $, respectively | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Right-of-use operating lease assets | ||||||||
| Other non-current assets | ||||||||
| Deferred financing costs | ||||||||
| Total assets | $ | $ | ||||||
| Current liabilities: | ||||||||
| Revolving loan | $ | $ | ||||||
| Operating lease obligations, current portion | ||||||||
| Finance lease obligations, current portion | ||||||||
| Accounts payable | ||||||||
| Accrued payroll and payroll expenses | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Income taxes payable | ||||||||
| Warrant liability, current portion | ||||||||
| Total current liabilities | ||||||||
| Long term debt, net of discount for deferred financing costs | ||||||||
| Operating lease obligations, non-current | ||||||||
| Finance lease obligations, non-current | ||||||||
| Deferred income taxes | ||||||||
| Other liabilities, non-current | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 13) | ||||||||
| Zero-dividend convertible perpetual preferred stock, $par value, shares issued and outstanding as of July 31, 2024 and October 31, 2023 | ||||||||
| Stockholders' equity | ||||||||
| Common stock, $par value, shares authorized, and issued and outstanding as of July 31, 2024 and October 31, 2023, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders' equity | ||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Concrete Pumping Holdings, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months Ended July 31, | Nine Months Ended July 31, | |||||||||||||||
| (in thousands, except per share amounts) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of operations | ||||||||||||||||
| Gross profit | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Income from operations | ||||||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense and amortization of deferred financing costs | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Change in fair value of warrant liabilities | ||||||||||||||||
| Interest income | ||||||||||||||||
| Other income (expense), net | ||||||||||||||||
| Total other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income before income taxes | ||||||||||||||||
| Income tax expense | ||||||||||||||||
| Net income | ||||||||||||||||
| Less accretion of liquidation preference on preferred stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income available to common shareholders | $ | $ | $ | $ | ||||||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
| Net income per common share | ||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Concrete Pumping Holdings, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| Three Months Ended July 31, | Nine Months Ended July 31, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Other comprehensive income: | ||||||||||||||||
| Foreign currency translation adjustment | ||||||||||||||||
| Total comprehensive income | $ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Concrete Pumping Holdings, Inc.
Condensed Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
| Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total | |||||||||||||||||||||||
| (in thousands, except share amounts) | Shares | Amount | ||||||||||||||||||||||||||
| Balance, April 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Stock-based compensation expense | - | |||||||||||||||||||||||||||
| Forfeiture/cancellation of restricted stock | ( | ) | ||||||||||||||||||||||||||
| Shares issued under stock-based program | - | |||||||||||||||||||||||||||
| Treasury shares purchased for tax withholding | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Treasury shares purchased under share repurchase program | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | - | |||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||||||
| Balance, July 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Common Stock |
Additional Paid-In Capital |
Treasury Stock |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Total |
|||||||||||||||||||||||
| (in thousands, except share amounts) |
Shares |
Amount |
||||||||||||||||||||||||||
| Balance, April 30, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||
| Stock-based compensation expense |
- | |||||||||||||||||||||||||||
| Forfeiture/cancellation of restricted stock |
( |
) | ||||||||||||||||||||||||||
| Shares issued under stock-based program |
- | - | - | - | - | - | ||||||||||||||||||||||
| Treasury shares purchased for tax withholding |
||||||||||||||||||||||||||||
| Treasury shares purchased under share repurchase program |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Net income |
- | |||||||||||||||||||||||||||
| Foreign currency translation adjustment |
- | |||||||||||||||||||||||||||
| Balance, July 31, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||
Concrete Pumping Holdings, Inc.
Condensed Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
| Common Stock |
Additional Paid-In Capital |
Treasury Stock |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Total |
|||||||||||||||||||||||
| (in thousands, except share amounts) |
Shares |
Amount |
||||||||||||||||||||||||||
| Balance, October 31, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||
| Stock-based compensation expense |
- | |||||||||||||||||||||||||||
| Forfeiture/cancellation of restricted stock |
( |
) | ||||||||||||||||||||||||||
| Shares issued under stock-based program |
- | |||||||||||||||||||||||||||
| Treasury shares purchased for tax withholding |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Treasury shares purchased under share repurchase program |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Net income |
- | |||||||||||||||||||||||||||
| Foreign currency translation adjustment |
- | |||||||||||||||||||||||||||
| Balance, July 31, 2024 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||
| Common Stock |
Additional Paid-In Capital |
Treasury Stock |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Total |
|||||||||||||||||||||||
| (in thousands, except share amounts) |
Shares |
Amount |
||||||||||||||||||||||||||
| Balance, October 31, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||
| Stock-based compensation expense |
- | |||||||||||||||||||||||||||
| Forfeiture/cancellation of restricted stock |
( |
) | ||||||||||||||||||||||||||
| Shares issued under stock-based program |
- | - | - | - | - | - | ||||||||||||||||||||||
| Treasury shares purchased for tax withholding |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Treasury shares purchased under share repurchase program |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Net income |
- | |||||||||||||||||||||||||||
| Foreign currency translation adjustment |
- | |||||||||||||||||||||||||||
| Balance, July 31, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Concrete Pumping Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| For the Nine Months Ended July 31, | ||||||||
| (in thousands) | 2024 | 2023 | ||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Non-cash operating lease expense | ||||||||
| Foreign currency adjustments | ( | ) | ( | ) | ||||
| Depreciation | ||||||||
| Deferred income taxes | ||||||||
| Amortization of deferred financing costs | ||||||||
| Amortization of intangible assets | ||||||||
| Stock-based compensation expense | ||||||||
| Change in fair value of warrant liabilities | ( | ) | ( | ) | ||||
| Net gain on the sale of property, plant and equipment | ( | ) | ( | ) | ||||
| Other operating activities | ( | ) | ||||||
| Net changes in operating assets and liabilities: | ||||||||
| Receivables | ( | ) | ||||||
| Inventory | ( | ) | ||||||
| Other operating assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ( | ) | ||||
| Other operating liabilities | ||||||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant and equipment | ( | ) | ( | ) | ||||
| Proceeds from sale of property, plant and equipment | ||||||||
| Purchases of intangible assets | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds on revolving loan | ||||||||
| Payments on revolving loan | ( | ) | ( | ) | ||||
| Payment of debt issuance costs | ( | ) | ||||||
| Purchase of treasury stock | ( | ) | ( | ) | ||||
| Other financing activities | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Effect of foreign currency exchange rate changes on cash | ||||||||
| Net increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents: | ||||||||
| Beginning of period | ||||||||
| End of period | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Concrete Pumping Holdings, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
Note 1. Organization and Description of Business
Organization
Concrete Pumping Holdings, Inc. (the "Company") is a Delaware corporation headquartered in Thornton, Colorado. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries including Brundage-Bone Concrete Pumping, Inc. ("Brundage-Bone"), Camfaud Group Limited ("Camfaud") and Eco-Pan, Inc. ("Eco-Pan").
Nature of business
Brundage-Bone is a concrete pumping service provider in the United States ("U.S.") and Camfaud is a concrete pumping service provider in the United Kingdom ("U.K."). Their core business is the provision of concrete pumping services to general contractors and concrete finishing companies in the commercial, infrastructure and residential sectors. Most often equipment returns to a "home base" nightly and these service providers do not contract to purchase, mix, or deliver concrete. Brundage-Bone has approximately 100 branch locations across
Eco-Pan provides industrial cleanup and containment services, primarily to customers in the construction industry. Eco-Pan uses containment pans specifically designed to hold waste products from concrete and other industrial cleanup operations. Eco-Pan has
Seasonality
The Company’s sales are historically seasonal, with lower revenue in the first quarter and higher revenue in the fourth quarter of each year. Such seasonality also causes the Company’s working capital cash flow requirements to vary from quarter to quarter and primarily depends on the variability of weather patterns with the Company generally having lower sales volume during the winter and spring months.
Note 2. Summary of Significant Accounting Policies
We describe our significant accounting policies in Note 2 of the notes to condensed consolidated financial statements in our annual report on Form 10-K for the year ended October 31, 2023 ("Annual Report"). During the nine months ended July 31, 2024, there were no changes to those accounting policies.
Basis of presentation
Our condensed consolidated balance sheet as of October 31, 2023, which was derived from our audited condensed consolidated financial statements and our unaudited interim condensed consolidated financial statements provided herein have been prepared in accordance with the instructions for Form 10-Q. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. The enclosed statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present a fair statement of the interim periods. The consolidated results of operations and cash flows for the first nine months of the year are not necessarily indicative of the consolidated results of operations and cash flows that might be expected for the entire year. These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended October 31, 2023.
Certain prior period amounts have been reclassified in order to conform to the current year presentation.
During the first quarter of fiscal year 2024, certain assets and associated revenues and expenses previously part of the Company's Other activities were aggregated into its U.S. Concrete Pumping segment in order to better align its placement with the manner in which the Company now allocates resources and measures performance. As a result, segment results for prior periods have been reclassified to conform to current period presentation. For further discussion, see Note 18.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Revenue recognition
The Company generates revenues primarily from (1) concrete pumping services in both the U.S. and U.K and (2) the Company’s concrete waste services business, both of which are discussed below. In addition, the Company generates an immaterial amount of revenue from the sales of replacement parts to customers. The Company’s delivery terms for replacement part sales are FOB shipping point. Revenue is disaggregated between two accounting standards: (1) ASC 606, Revenue Recognition ("ASC 606") and (2) ASC 842, Leases ("ASC 842").
Leases as Lessor
Our Eco-Pan business involves contracts with customers whereby we are a lessor for the rental component of the contract and therefore, such rental components of the contract are recorded as lease revenue. We account for such rental contracts as operating leases. We recognize revenue from pan rentals in the period earned, regardless of the timing of billing to customers. The lease component of the revenue is disaggregated by a base price that is based on the number of contractual days and a variable component that is based on days in excess of the number of contractual days.
The table below summarizes our revenues as presented in our unaudited condensed consolidated statements of operations for the periods ended July 31, 2024 and 2023 by revenue type:
| Three Months Ended July 31, | Nine Months Ended July 31, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Service revenue | $ | $ | $ | $ | ||||||||||||
| Lease fixed revenue | ||||||||||||||||
| Lease variable revenue | ||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||
Receivables and contract assets and liabilities
Receivables are carried at the original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts. Generally, the Company does not require collateral for their accounts receivable; however, the Company may file statutory liens or take other appropriate legal action when necessary on construction projects in which collection problems arise. A receivable is typically considered to be past due if any portion of the receivable balance is outstanding for more than 30 days. The Company does not typically charge interest on past-due receivables.
Pursuant to CECL (defined below), Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts, Management’s understanding of the current economic circumstances within the Company’s industry, reasonable and supportable forecasts and Management’s judgment as to the likelihood of ultimate payment based upon available data. Receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. Our estimate of doubtful accounts could change based on changing circumstances, including changes in the economy or in particular circumstances of individual customers. Accordingly, the Company may be required to increase or decrease the allowance for doubtful accounts.
The Company does not have contract liabilities associated with contracts with customers. The Company’s contract assets and impairment losses associated therewith are not significant. Contracts with customers do not result in amounts billed to customers in excess of recognizable revenue.
Newly adopted accounting pronouncements
ASU 2016-13, Financial Instruments Credit Losses (Topic 326) ("ASU 2016-13") - In June 2016, the FASB issued ASU No. 2016-13, which, along with subsequently issued related ASUs, requires financial assets (or groups of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected, among other provisions (known as the current expected credit loss ("CECL") model). Under the new guidance, the Company recognizes an allowance for its estimate of expected credit losses over the entire contractual term of its receivables from the date of initial recognition of the financial instrument. Measurement of expected credit losses are based on relevant forecasts that affect collectability. The Company’s receivables are in scope for CECL. At the point that these receivables are recorded, they become subject to the CECL model and estimates of expected credit losses over their contractual life are recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. This ASU is effective for smaller reporting companies with fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted CECL as of November 1, 2023 for fiscal year ending October 31, 2024. The adoption of CECL did not have a material impact on the condensed consolidated financial statements and related disclosures or the existing internal controls because the Company’s accounts receivable are of short duration and there is not a material difference between incurred losses and expected losses.
Recently issued accounting pronouncements not yet effective
ASU 2023-07, Improvements to Reportable Segment Disclosures ("ASU 2023-07") - In November 2023, the FASB issued ASU No. 2023-07, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. This ASU is effective for public companies with annual periods beginning after December 15, 2023, and interim periods within annual period beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effects adoption of this guidance will have on its consolidated financial statements.
ASU 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09") - In December 2023, the FASB issued ASU No. 2023-09, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. This ASU is effective for public companies with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effects adoption of this guidance will have on its consolidated financial statements.
Note 3. Fair Value Measurement
The carrying amounts of the Company's cash and cash equivalents, accounts receivable, accounts payable and current accrued liabilities approximate their fair value as recorded due to the short-term maturity of these instruments, which approximates fair value. The Company’s outstanding obligations on its asset-backed loan ("ABL") credit facility are deemed to be at fair value as the interest rates on these debt obligations are variable and consistent with prevailing rates. There were no changes since October 31, 2023 in the Company's valuation techniques used to measure fair value.
Long-term debt instruments
The Company's long-term debt instruments are recorded at their carrying values in the condensed consolidated balance sheet, which may differ from their respective fair values. The fair values of the long-term debt instruments are derived from Level 2 inputs. The fair value amount of the long-term debt instruments as of July 31, 2024 and October 31, 2023 is presented in the table below based on the prevailing interest rates and trading activity of the Senior Notes.
| As of July 31, | As of October 31, | |||||||||||||||
| 2024 | 2023 | |||||||||||||||
| (in thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
| Senior Notes | $ | $ | $ | $ | ||||||||||||
Warrants
At October 31, 2023, there were
All other non-financial assets
The Company's non-financial assets, which primarily consist of property and equipment, goodwill and other intangible assets, are not required to be carried at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis or whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and indefinite lived intangibles), non-financial instruments are assessed for impairment and, if applicable, written down to and recorded at fair value.
Note 4. Prepaid Expenses and Other Current Assets
The significant components of prepaid expenses and other current assets as of July 31, 2024 and October 31, 2023 are comprised of the following:
| As of July 31, | As of October 31, | |||||||
| (in thousands) | 2024 | 2023 | ||||||
| Expected recoveries related to self-insured commercial liabilities | $ | $ | ||||||
| Prepaid insurance | ||||||||
| Prepaid licenses and deposits | ||||||||
| Prepaid rent | ||||||||
| Other current assets and prepaids | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
Note 5. Property, Plant and Equipment
The significant components of property, plant and equipment as of July 31, 2024 and October 31, 2023 are comprised of the following:
| As of July 31, | As of October 31, | |||||||
| (in thousands) | 2024 | 2023 | ||||||
| Land, building and improvements | $ | $ | ||||||
| Finance leases—land and buildings | ||||||||
| Machinery and equipment | ||||||||
| Transportation equipment | ||||||||
| Furniture and office equipment | ||||||||
| Property, plant and equipment, gross | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
For the three and nine months ended July 31, 2024 and 2023, depreciation expense is as follows:
| Three Months Ended July 31, | Nine Months Ended July 31, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Cost of operations | $ | $ | $ | $ | ||||||||||||
| General and administrative expenses | ||||||||||||||||
| Total depreciation expense | $ | $ | $ | $ | ||||||||||||
Note 6. Goodwill and Intangible Assets
The Company has recognized goodwill and certain intangible assets in connection with prior business combinations.
There were
The following table summarizes the composition of intangible assets as of July 31, 2024 and October 31, 2023:
| As of July 31, | ||||||||||||||||||||||||
| 2024 | ||||||||||||||||||||||||
| Weighted Average | Gross | Foreign Currency | Net | |||||||||||||||||||||
| Remaining Life | Carrying | Accumulated | Accumulated | Translation | Carrying | |||||||||||||||||||
| (in thousands) | (in Years) | Value | Impairment | Amortization | Adjustment | Amount | ||||||||||||||||||
| Intangibles subject to amortization: | ||||||||||||||||||||||||
| Customer relationship | $ | $ | - | $ | ( | ) | $ | $ | ||||||||||||||||
| Trade name | - | ( | ) | |||||||||||||||||||||
| Assembled workforce | - | ( | ) | - | ||||||||||||||||||||
| Noncompete agreements | - | ( | ) | - | ||||||||||||||||||||
| Indefinite-lived intangible assets: | ||||||||||||||||||||||||
| Trade names (indefinite life) | - | ( | ) | - | - | |||||||||||||||||||
| Total intangibles | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||
| As of October 31, | ||||||||||||||||||||||||
| 2023 | ||||||||||||||||||||||||
| Weighted Average | Gross | Foreign Currency | Net | |||||||||||||||||||||
| Remaining Life | Carrying | Accumulated | Accumulated | Translation | Carrying | |||||||||||||||||||
| (in thousands) | (in Years) | Value | Impairment | Amortization | Adjustment | Amount | ||||||||||||||||||
| Intangibles subject to amortization: | ||||||||||||||||||||||||
| Customer relationship | $ | $ | - | $ | ( | ) | $ | $ | ||||||||||||||||
| Trade name | - | ( | ) | |||||||||||||||||||||
| Assembled workforce | - | ( | ) | - | ||||||||||||||||||||
| Noncompete agreements | - | ( | ) | - | ||||||||||||||||||||
| Indefinite-lived intangible assets: | ||||||||||||||||||||||||
| Trade names (indefinite life) | - | ( | ) | - | - | |||||||||||||||||||
| Total intangibles | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||
Amortization expense for the three months ended July 31, 2024 and 2023 was $
The changes in the carrying value of goodwill by reportable segment for the nine months ended July 31, 2024 are as follows:
| (in thousands) | U.S. Concrete Pumping | U.K. Operations | U.S. Concrete Waste Management Services | Total | ||||||||||||
| Balance at October 31, 2023 | $ | $ | $ | $ | ||||||||||||
| Foreign currency translation | - | - | ||||||||||||||
| Balance at July 31, 2024 | $ | $ | $ | $ | ||||||||||||
Note 7. Other Non-Current Assets
The significant components of other non-current assets as of July 31, 2024 and October 31, 2023 are comprised of the following:
| As of July 31, | As of October 31, | |||||||
| (in thousands) | 2024 | 2023 | ||||||
| Expected recoveries related to self-insured commercial liabilities | $ | $ | ||||||
| Other non-current assets | ||||||||
| Total other non-current assets | $ | $ | ||||||
Note 8. Long Term Debt and Revolving Lines of Credit
The table below is a summary of the composition of the Company’s debt balances as of July 31, 2024 and October 31, 2023:
| July 31, | October 31, | ||||||||||||
| (in thousands) | Interest Rates | Maturities | 2024 | 2023 | |||||||||
| ABL Facility - short term | Varies | June 2028 | $ | $ | |||||||||
| Senior notes - all long term | February 2026 | ||||||||||||
| Total debt, gross | |||||||||||||
| Less: Unamortized deferred financing costs offsetting long term debt | ( | ) | ( | ) | |||||||||
| Less: Current portion | ( | ) | |||||||||||
| Long term debt, net of unamortized deferred financing costs | $ | $ | |||||||||||
On January 28, 2021, Brundage-Bone Concrete Pumping Holdings Inc., a Delaware corporation (the "Issuer") and a wholly-owned subsidiary of the Company (i) completed a private offering of $
On June 1, 2023, the ABL Facility was amended to, among other changes, (1) increase the maximum revolver borrowings available to be drawn thereunder to $
The outstanding principal amount of the Senior Notes as of July 31, 2024 was $
There was
The Company utilizes the ABL Facility to support its working capital arrangement.
In addition, as of July 31, 2024 the Company had $
As of July 31, 2024 we had $
There was
Note 9. Accrued Payroll and Payroll Expenses
The following table summarizes accrued payroll and expenses as of July 31, 2024 and October 31, 2023:
| As of July 31, | As of October 31, | |||||||
| (in thousands) | 2024 | 2023 | ||||||
| Accrued vacation | $ | $ | ||||||
| Accrued payroll | ||||||||
| Accrued bonus | ||||||||
| Accrued employee-related taxes | ||||||||
| Other accrued | ||||||||
| Total accrued payroll and payroll expenses | $ | $ | ||||||
Note 10. Accrued Expenses and Other Current Liabilities
The following table summarizes accrued expenses and other current liabilities as of July 31, 2024 and October 31, 2023:
| As of July 31, | As of October 31, | |||||||
| (in thousands) | 2024 | 2023 | ||||||
| Accrued self-insured commercial liabilities | $ | $ | ||||||
| Accrued self-insured health liabilities | ||||||||
| Accrued interest | ||||||||
| Accrued equipment purchases | ||||||||
| Accrued property, sales and use tax | ||||||||
| Accrued professional fees | ||||||||
| Other | ||||||||
| Total accrued expenses and other liabilities | $ | $ | ||||||
Note 11. Other Liabilities, Non-Current
The following table summarizes other non-current liabilities as of July 31, 2024 and October 31, 2023:
| As of July 31, | As of October 31, | |||||||
| (in thousands) | 2024 | 2023 | ||||||
| Self-insured commercial liability | $ | $ | ||||||
| Other | ||||||||
| Total other non-current liabilities | $ | $ | ||||||
Note 12. Income Taxes
The following table summarizes income before income taxes and income tax expense for the three and nine months ended July 31, 2024 and 2023:
| Three Months Ended July 31, | Nine Months Ended July 31, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Income before income taxes | $ | $ | $ | $ | ||||||||||||
| Income tax expense | $ | $ | $ | $ | ||||||||||||
For the three months ended July 31, 2024 and 2023, the Company’s effective tax rate was
Note 13. Commitments and Contingencies
Insurance
Commercial Self-Insured Losses
The Company retains a significant portion of the risk for workers' compensation, automobile, and general liability losses ("self-insured commercial liability"). Reserves have been recorded that reflect the undiscounted estimated liabilities including claims incurred but not reported. When a recognized liability is covered by third-party insurance, the Company records an insurance claim receivable to reflect the covered liability. Amounts estimated to be paid within one year have been included in accrued expenses and other current liabilities, with the remainder included in other liabilities, non-current on the condensed consolidated balance sheets. Insurance claims receivables that are expected to be received from third-party insurance within one year have been included in prepaid expenses and other current assets, with the remainder included in other non-current assets on the condensed consolidated balance sheets.
The following table summarizes as of July 31, 2024 and October 31, 2023 for (1) recorded liabilities, related to both asserted as well as unasserted insurance claims and (2) any related insurance claims receivables:
| As of July 31, 2024 | As of October 31, 2023 | ||||||||
| (in thousands) | Classification on the Condensed Consolidated Balance Sheets | ||||||||
| Self-insured commercial liability, current | Accrued expenses and other current liabilities | ||||||||