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Bruce Young

Thank you, Cody, and good afternoon, everyone. The trends we experienced in the fourth quarter largely followed prior quarters with year-over-year volume driven declines in our US pumping segment offsetting continued gains in our concrete waste management business, specifically lingering high interest rates during our fourth fiscal quarter affected the timing of more rate sensitive commercial projects, while increased commercial building vacancy rates continue to delay the start of new construction.
Conversely, our concrete waste management business sustained its double digit growth fueled by strong market share expansion, our ability to improve pricing. We anticipate this positive momentum will continue in the UK. The impact of sustained higher interest rates on commercial project volume largely followed similar trends we experienced domestically. But our infrastructure projects and improved pricing held up well. Considering the market backdropped.
Despite the challenges in the US pumping market, our disciplined fleet management and cost control strategies enabled us to increase adjusted EBITA margins and generate robust free cash flow in the fourth quarter. In fact, an $11 million reduction in year over year in expenditure, coupled with strong proceeds from sale of the equipment resulted in a 5% increase in free cash flow compared to last year, allowing us to lower our year-over-year net debt by $42 million and further reduce our leverage.
This flexible capital expenditure strategy combined with our strong unit economics expanded liquidity. Improving balance sheet strength positions us well for a market recovery in fiscal 2025 and beyond. Turning to specific comments by end market within our commercial end market, we continue to experience softness, softness across a variety of commercial work, especially in light commercial and office buildings which tend to be more interest rate sensitive.
Larger commercial projects remain mostly durable but continue to move at a slower pace. Given the economic backdrop, our residential and market remained resilient, especially considering the interest rate environment. In fact, our mix of us concrete pumping work in the residential end market was resilient at 32% of total revenue on a trailing 12-month basis. We continue to see residential construction investments within our mountain region and in Texas, which represents undersupplied regions where single family construction is prominent.
We still expect the structural supply demand and balance and housing will continue to support homebuilding activity especially as homebuilders entice customers with creative solutions that include rate buy downs. And we believe the Federal Reserve's path to interest rate reductions should continue to support this in market's growth.
Offsetting some of our commercial market softness revenue share in our infrastructure markets grew slightly year over year in the fourth quarter in the UK, infrastructure growth has continued and our strong us national footprint allowed us to win more work.
We expect our infrastructure business to grow in fiscal year 2025 due to the funding environment in the UK as well as opportunities domestically from the conversion of our allocated budget funding into project starts within the Infrastructure Investment and Jobs Act. I will now let Ian address our financial results in a more in more detail before I return to provide some concluding remarks, Ian.

Iain Humphries

Thanks, Bruce. And good afternoon, everyone. I'll keep my prepared remarks mostly focused on our fourth quarter results and analysis of our full year can be found in our supplemental investor presentation as well as within our 10-K.
In the fourth quarter, revenue was $111.5 million compared to $120.2 million in the same year ago quarter. The decrease is mostly attributable to a decline in our US concrete pumping segment due to the slowdown in commercial construction volume and an oversaturation of concrete pumps in certain markets revenue in our US concrete pumping segment, mostly operating under the Bernie Boeing brand was $74.5 million compared to $85 million in the prior year quarter.
For our UK operations operating largely under the Camper brand revenue was $17.1 million compared to $17.4 million in the same year ago quarter. When excluding the foreign exchange translation effects from the British pound, revenue for our UK operations decreased. Approximately 6% in the fourth quarter are primarily due to lower construction volumes revenue in our US concrete waste management services segment operating under the Eco Pan brand increased 11% to $19.8 million compared to $17.8 million in the prior year quarter. This strong organic increase was driven by increased volumes and sustained improvement in pricing.
Returning to our consolidated results gross margin the fourth quarter increased 80 basis points to 41.5% compared to 40.7% in the same year ago quarter. The improved margin was primarily due to continued improvement in our cost control initiatives that include improved labor utilization and repair and maintenance, efficiencies.
General and administrative expenses in the fourth quarter declined 9% to $27 million compared to $29.6 million in the prior year quarter, primarily due to noncash currency translation gains and lower amortization expense as a percentage of revenue G&A costs were 24.2% in the fourth quarter compared to 24.6% in the prior year quarter.
Net income available to common shareholders in the fourth quarter was $9 million or $0.16 per dilute share. And this is largely unchanged compared to the same year ago quarter.
Consolidated adjusted EBITDA in the fourth quarter decreased slightly to $33.7 million compared to $35.8 million in the same EUR quarter. However, adjusted EBITDA margin increased 40 basis points to 30.2% compared to 29.8% in the same year ago quarter.
As discussed previously, the improvement in margin on lower revenue was driven by strong variable cost control and a disciplined approach to managing our fleet in our US concrete pumping business adjusted IDA declined to $19.3 million compared to $23.4 million in the same year ago quarter. In our UK business adjusted EBITDA increased 18% to $5.2 million compared to $4.4 million in the same year ago quarter.
And for our US concrete waste management business adjusted increased 12% to $9.1 million compared to $8.1 million in the same year ago quarter. Additionally, free cash flow increased 26% in the fourth quarter to $24 million to put it to $19 million in the same quarter. This includes proactive steps that we've taken to turn our net replacement CapEx negative in the fourth quarter, which further highlights the flexibility we have in our fleet investments.
Turning to liquidity at October 31, 2024, we had total debt outstanding of $375 million and net debt of $332 million and this is a decrease of $46 million over the course of the year, which is a testament to our strong free cash flow generation. This equates to a net debt leverage ratio of three times which was our guided target for the 2024 fiscal year. We had approximately $378 million of liquidity as of October 31, 2024, which includes cash on the balance sheet and availability for my ABL facility.
We remain a strong liquidity position which provides optionality to responsibly pursue value added investment opportunities like a creator of M&A or the organic investment in our fleet of equipment to support our overall long term growth strategy.
Now, looking at the terms of our credit facilities, our ABL facility will mature in September of 2029. And although our senior notes have more than a year until they come due in February 2026 we believe there is encouraging momentum in the market that could support an opportunistic refinance.
Now, moving to a share buyback plan during the fourth quarter, we repurchased approximately 423,000 shares for $2.5 million or an average price of $5.89. Since the buyback was initiated in 2022, we have repurchased approximately $18 million of our stock and have an additional $17 million authorized through March of 2025. We believe our share buyback plan demonstrates both our commitment to delivering enhanced value to shareholders and our confidence in our strategic growth plan.
Moving now into our 2025 full year guidance. We expect fiscal year revenue to range between $425 million and $445 million adjusted with that to range between $115 million and $125 million and free cash flow which we define as adjusted with less net replacement CapEx and less cash paid for interest to be at least $65 million.
Please note that this outlook assumes a return to our more normal typical seasonality with roughly 45% of our revenue incurred in the first half of 2025 and the balance in the back half of the year.
With that, I will now turn the call back over to, Bruce.

Bruce Young

Thanks, Iain. In summary, while construction markets remained softer in 2024 particularly in the commercial end market. We believe that we are well positioned relative to our competitors to execute in a challenging environment due to our unique value proposition to our customers.
Given our national footprint market diversification and the breadth depth and agility of our equipment fleet. Furthermore, our strong balance sheet and healthy liquidity positions us well for continued growth investments and other strategies to deliver superior shareholder value as we look towards 2025 and remain focused on the long term strategies.
Strategic aspect of our business that we may that we can meaningfully influence including the consistent and disciplined execution of our strategic growth plan, resolute adherence to our leading commercial strategy and prudent cost control through ongoing operational excellence.
Equally, we are hopeful that a return of more seasonal weather patterns coupled with an expected improvement in commercial construction volumes will stimulate demand. In fact, we expect that overall construction volumes in the US and UK in 2025 will increase by low single digits and pricing will increase the same as Ian mentioned.
Our 2025 outlook is predominantly back half weighted, which reflects typical seasonality but also considers our estimation that the incoming administration's pro growth onshoring agenda. Combined with the gradual easing of interest rates can accelerate our domestic concrete pumping and band business. When these policies take hold in the UK, our team continues to secure nationally critical energy road and rail projects. In addition to the well documented HS two project, as the new government seeks to drive broader economic and productivity growth.
With that, I would now like to turn the call back over to the operator for Q&A. Matt?

Question and Answer Session

Operator

Great. Thank you so much. We now be conducting a question-and-answer session. (Operator Instructions)
Andrew Wittmann, Baird.

Andrew Wittmann

Alright, great. Thanks for taking my questions and good afternoon, guys. I guess just wanted to drill in a little bit on the CapEx here. So you flipped the net CapEx here to slightly negative disposing more than you purchased. You know, I was just hoping maybe you could just help us think about '25.
I heard the greater than $65 million of free cash flow under your definition, but maybe can you break it down a little bit? How much, how much kind of gross CapEx do you think is going to go into new fleet? And you know where, how much are the are the sales going to remain elevated? Just if you could help us just understand how you're thinking about the overall CapEx budget for for '25.

Iain Humphries

Yeah, absolutely. And thanks for the question, Andy. So yeah, just to recap on '24, I mean, as you know, during the year based on the volume demand, we had sufficient capacity in our fleet. So we invested less on the replacement side and it was roughly around 4% of revenue. Our more normalized target for replacement is around six or 7% of revenue. And that's what we have placed into the guidance for for 2025 with the expectation that we feel good about the fleet that we have and the capacity that we've got.
But really making sure that the uptime that we would expect is more reflective of that sort of more normal 6% or 7% of revenue. In addition to that, we, I would say, Andy, we may have like $3 million or $4 million the growth side for pan. But again, it will, as we look for for volume and come through the year, then we'll consider that within the guidance.
But the starting point, if that's helpful on the trade side, we would expect unusual trade activity. I mean, as you know, about 5% of our fleet will age out each year. We don't expect that to change.

Andrew Wittmann

Got it. Okay, thank you for that. I guess maybe the next thing I wanted to dig into -- I don't know, you kind of had a comment there on the senior notes coming due about a year from now said something about the market condition, the market conditions may allow you to refinance. Are are you thinking right now, the primary path is refinance senior notes with new senior notes or would you expand the ABL? What's kind of the pricing the way you're approaching this? It sounds like you're kind of thinking about it already.

Iain Humphries

Yeah, we are. I mean, obviously we have a number of options available to us and we're looking for best execution. So, yeah, we think the market has some momentum right now. So we think that it's a good time to be considering like that window. And we'll be opportunistic as we see that that market play out.
Andy, obviously, as you know, we upsized the ABL at the end of last year. And so we think we have some good structural elements for good execution.

Andrew Wittmann

Got it. And then, Bruce, just for you. Obviously getting EBITDA margins up year over year on tough volumes is always you know, a testament to how you're running the business. Could you maybe just talk about some of the major buckets that allowed you to to drive that kind of performance?
Maybe things like fuel, kind of, there was a comment on repair and maintenance as well that you made. And maybe if you could drill into like how much that helps you and, and are you starting to defer stuff? Because the utilization rates of the equipment maybe aren't as high so you can defer that and grab it later when the equipment is more in demand. And maybe if you could just address how labor is factoring into your P&L as well, if you're able to optimize that further.

Bruce Young

Sure. As it comes to fuel pricing, fuel pricing has gotten better for us over the last several months. And so we have had some benefit of that. We believe we've done a much better job of managing our labor within the business to improve the margin as well. And then pricing on spare parts for repair and maintenance have gone back to lower levels than what we had seen the previous year.
And we've been able to take advantage of some large orders to improve that. And this just being more aware of preventative maintenance and making sure that we get out on top of things before they become serious issues. We have not deferred any maintenance at all on any units. So we feel like we've done a good job of controlling those rates, getting those margins down, and really preparing ourselves for the future.

Andrew Wittmann

Got it. Okay. I think I'll leave it there for the for the evening. Thank you so much.

Bruce Young

Thanks, Andrew.

Operator

Tim Mulrooney, William Blair.

Tim Mulrooney

Bruce Jean. Good afternoon.
Yeah.
So it looks like your guidance is calling for about 7% growth at the midpoint for the for the full year, but this is kind of following a 7% decline or so in the back half of fiscal 2024. So it sounds like you're expecting a nice inflection here. Just curious, how are you thinking about the cadence of EBITDA growth as you move through the year? Do you expect it to be pretty steady or is the expectation that this growth will be more front end or back end loaded?

Iain Humphries

Yeah, Tim, it really ties to that return to more normal seasonality that we mentioned in our sort of prepared remarks. And if you look at 2024 we were more up to 46 weighted on the on the front half of the year and we now expect to be more back to the sort of 4,555. So the cadence of, I mean, obviously, Q1 is a slower quarter for us, obviously being through winter. So we would expect and margin to build through the year, ultimately resulting in at least a 1% margin pick up through the end of the year. So we expect some improvement as we go through the year, but it's likely going to be more back end weighted just like the change in that revenue phasing.

Tim Mulrooney

Okay. Got you. Thank you and kind of building off of the conversation you're having with Andy, you mentioned, previously you were, I think last quarter maybe or two quarters ago, you're running at about 70% utilization down a bit from that 80% target. Curious where utilization currently stands today.

Iain Humphries

Yeah, it's right around that 70%. And so again, it comes back to the fleet utilization and the expectations as we go into 2025 we think there's an opportunity in there which also, I mean to your point on margin contribution, we think we have capacity to improve that as the demand moves.

Tim Mulrooney

Okay. Got it. Moving to the infrastructure business which I think you said, grew a little bit in the fourth quarter. It was good to hear. But you know, now you've got this incoming administration, you focus on cost reductions. Do you see any risk to the funding environment for some of the large infrastructure projects that you work on? Whether the whether or not they're tied to the IIJ A maybe in both cases or has most of that money been set aside for these projects or you know, already kind of set aside or deployed?

Bruce Young

Yeah, so we see this as an opportunity for us, Tim, where the money has been set aside for those projects. It's been allocated to those projects, but it hasn't been awarded to contractors yet. And a lot of that has to do with the amount of, of challenges that the, that the municipality states have had to meet the requirements. And we believe as they lessen some of those requirements, whether they are environmental or labor that it may accelerate some of those projects and we should see infrastructure pick up this year and into '26.

Tim Mulrooney

All right. Thank you very much. I'll leave it there and have have a good.

Bruce Young

Night, all. Thanks, Tim.

Operator

Steven Fisher, UPS.

Steve Fisher

Thanks. Good afternoon. Just to follow up again on that sort of return to normal seasonality. Is there a particular quarter that you expect the US concrete pumping revenues to inflect back to positive growth from what we're seeing now? The declines.

Iain Humphries

Yes, it's likely going to be more in into the third quarter and that's really back to that sort of back half weighting and that gets us back to that sort of more normalized 45/55 split. That's where I would expect the inflection to be. It'll be close through the end of the second quarter, but I would say the start of the third quarter.

Steve Fisher

Okay, that's helpful. And you know, you mentioned Bruce that the current level of activity is sort of a continuation of trends you've seen for a little while now. I mean, I'm just -- I'm curious how your customer conversations changed. If they did it all after the election.

Bruce Young

The conversation with the customers are a lot more optimistic. Now. There are several things that I think that have to happen before that shifts into, you know, more positive results for us. And that's why we're thinking more towards the second half of the year than the first half of the year. But there are projects that were delayed that are now ramping up that we should be placing concrete on in the next quarter.
Sizable projects, we see other projects that we think that had been put on hold that we think they will be starting as well. So we're starting to be a lot more optimistic about the second half of the year.

Steve Fisher

Okay. And you mentioned that there's an imbalance of supply and demand too many concrete pumps in certain markets. Can you clarify, is that referring to certain geographic markets or is it sort of in vertical markets or maybe both? And just maybe some detail on what specifically you're referring to there?

Bruce Young

We talked about this before, but all the concrete pumps come from overseas, whether they come from South Korea, China, or Germany. And so they're always ordered well in advance. And so the oversupply came when 2023 and 2024 really didn't meet the level of growth that we and the industry anticipated or the manufacture that anticipated.
So they had those assets. They did a good job of getting them out of their facilities into concrete pumpers' hands. But as we've talked to the manufacturers for 2025 their expectations are much, much lower and we expect that that will play out. It will improve for us over this year and into next year.

Steve Fisher

Okay. Thank you very much.

Bruce Young

Thanks, Steve.

Operator

(Operator Instructions) Jean Ramirez, D.A. Davidson.

Jean Ramirez

Hi, good afternoon. Thank you for your time.

Operator

Hi.

Jean Ramirez

Just following it regarding the US concrete pumping inflection third quarter. Could you talk about what sort of demand conditions are baked in into this outlook?

Iain Humphries

Yeah, I mean, around demand conditions. I mean, I think this is where we're, I mean, Bruce mentioned in some of his prepared remarks around like manufacturing and really the new administration coming in on the back of that optimism and really what the Federal Reserve are doing improving that momentum. We think it will still take about 5 to 6 months for that to cycle through into like new project starts and improve momentum. So that's why we think that it's going to be more back end weighted next year.

Jean Ramirez

Got it and regarding the margin for us concrete pumping, given this some of the oversaturate comments that you mentioned, do you expect the margins to be around the same level of experience in fiscal 2020 four?

Iain Humphries

Yeah, so we've got margin improvement projected for the consolidated business and in 2025 compared to 2024 and we've got some nice momentum. Certainly in Q4 versus Q3 on the US pumping side, we expect that will continue into 2025. So we expect margin improvement through the through the business next year, including the US pumping business based on the controllable elements that we actually can influence.

Jean Ramirez

Could you provide some additional color to what this improvement looks like? Is it a 1% increase overall?

Iain Humphries

Yeah, if you take the mid -- I mean, if you just take the midpoint of the day compared to '24 it's about a 1% improvement year over year.

Jean Ramirez

I appreciate that and going back to waste management. And forgive me if I missed it, but could you talk about what caused the big jump in margins from the third quarter to the fourth quarter there?

Iain Humphries

You know, it wasn't any one thing in specific. I mean, obviously, we continue to invest in that business to really expand margins over time so that you will see some slight margin fluctuation as we invest in the business for growth.
I mean, obviously, if you look at the year over year comparison, the businesses, I think we grew about 15% year over year. So you might see some small margin and changement, but obviously still a very healthy margin and a great free cash flow part of our business and that we're going to drive that continued organic growth on over time.

Jean Ramirez

And just one last last one for me, going back to us pumping margins. What sort of outlook do you guys see regarding pricing? Do you expect any sort of pressure in '25?

Bruce Young

We do expect there'll be some more, some additional pressure in 2025 until the market start shifting and then that pressure will ease on us. And we do expect that we will get to have success with price increases this year and into the next.

Jean Ramirez

Is there sort of timing or is there? Yeah. Is there a timing to see when this pressure eases off or is it just a quarter by quarter cases?

Bruce Young

It's quarter by quarter?

Jean Ramirez

I appreciate it. Thank you so much for your time.

Iain Humphries

Thank you.

Operator

This concludes the question-and-answer session. I'd like to turn the floor back to management for any closing comments.

Bruce Young

Thank you, Matt. We'd like to thank everyone for listening to today's call and we look forward to speaking with you when we report our first quarter fiscal 2025 results in March. Thank you.

Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.