BBCP

• Strong U.S. Performance: Delivered another strong quarter with 13% revenue and adjusted EBITDA growth, led by large-scale commercial and infrastructure projects, particularly data centers.
• End Market Dynamics: Heavy commercial construction remains resilient; light commercial is pressured by interest rates; residential construction remains soft due to affordability challenges.
• UK Challenges & Opportunities: Market conditions are challenging due to inflation and high rates, but commercial activity showed improvement in July/August. Expansion into temporary power and Ireland is proceeding well.
• Operational Efficiency: Gross margin was 38.7% (vs. 39% prior year), with pricing largely offsetting inflationary fuel costs. G&A as a % of revenue improved to 25.8% from 26.5%, demonstrating operating leverage.
• Capital Allocation Update: Board approved initiation of a regular quarterly cash dividend ($0.13/share, ~5.6% yield). This complements ongoing share repurchases ($11.9M remaining authorization).
• Balance Sheet Strength: Net leverage reduced to 3.6x (target 3.0x). Liquidity stands at approximately $357 million.

• Full-Year Revenue: Raised to $425–$435 million (previously $410–$425 million).
• Full-Year Adjusted EBITDA: Raised to $103–$108 million (previously $98–$105 million).
• Full-Year Free Cash Flow: Increased to approximately $50 million (previously at least $45 million).

• U.S. Concrete Pumping: Revenue increased 10% to $76.2 million (from $69.3 million YoY). Adjusted EBITDA rose 18% to $18.4 million.
• Ecopan (Concrete Waste Management): Revenue grew 14% to $21.9 million (from $19.3 million YoY). Adjusted EBITDA increased 19% to $8.8 million.
• UK Operations: Revenue surged 24% to $18.7 million, driven by the acquisition of a 10-plant temporary power business. Underlying commercial construction activity remained soft.

• Macroeconomic Pressures: Elevated interest rates and economic uncertainty continue to pressure light commercial and residential construction sectors.
• UK Market Volatility: Slower commercial construction environment, inflation, and elevated interest rates create challenging conditions in the UK.
• Input Cost Inflation: Fuel costs remain a headwind, impacting gross margins despite pricing execution.
• Labor Efficiency: UK operations face labor efficiency losses due to softer demand, though the team is being retained for anticipated recovery.

Q: Analyst asked about the modest Q4 free cash flow guidance ($10M) given YTD performance, questioning if CapEx pull-forwards or debt payments were the cause, and requested clarity on replacement CapEx trends for 2027.

A: CFO explained that ~$22M of 2027 replacement CapEx was pulled forward into 2026, which will reverse next year. For FY2026, approx. $23M is allocated to replacement CapEx (~5% of revenue), with only $2-3M in Q4. Excluding the pull-forward, 2027 replacement CapEx is expected to be low single digits as a percentage of revenue. The preferred conversion terms remain unchanged.

Q: Analyst inquired about the timeline to reach the net leverage target of 3.0x, considering the new dividend payout and potential M&A activity.

A: CFO stated that reducing leverage by half a turn annually is achievable. Barring extraordinary investments, the realistic timeframe to reach the 3.0x target is approximately 18 months. This assumes continued organic cash generation and standard share repurchase levels, though specific timing depends on future growth investment decisions.

Q: Analyst sought clarification on why UK segment margins were lower than expected, asking if the temporary power acquisition impacted profitability or if other factors were at play.

A: CFO noted the acquisition did not negatively impact margins. The decline was primarily due to slight labor efficiency losses caused by softer demand earlier in the quarter. CEO added that UK labor is less variable than in the US, so fixed costs remain while volume dips, but recent demand improvements in July/August suggest this will improve.