CONCRETE PUMPING: Discussion and analysis by management of the financial position and operating results. (form 10-Q)

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You should read the following management discussion and analysis with
Concrete Pumping Holdings, Inc. (the “Company”, “we”, “us”, “us” or “Successor”) Unaudited Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report.

Caution Regarding Forward-Looking Statements



Certain statements in this Quarterly Report on Form 10-Q constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include
statements regarding our business, financial condition, results of operations,
cash flows, strategies and prospects. These forward-looking statements may be
identified by terminology such as "likely," "may," "will," "should," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts," "potential" or
"continue," or the negative of such terms and other comparable terminology.
Although we believe that the expectations reflected in the forward-looking
statements contained in this Report are reasonable, we cannot guarantee future
results. These statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Company to be materially different from those expressed or implied by the
forward-looking statements. We undertake no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise. However, any further disclosures made on related subjects
in subsequent reports on Forms 10-K, 10-Q and 8-K should be considered.
Additionally, information about issues that could lead to material changes in
performance and risk factors that have the potential to affect us is contained
under the caption "Risk Factors" in our Form 10-K/A filed with the SEC on June
11, 2021.



Business Overview



The Company is a Delaware corporation headquartered in Thornton (near Denver),
Colorado. The unaudited consolidated financial statements included herein
include the accounts of Concrete Pumping Holdings, Inc. and its wholly owned
subsidiaries including Brundage-Bone Concrete Pumping, Inc. ("Brundage-Bone"),
Capital Pumping ("Capital"), and Camfaud Group Limited ("Camfaud"), and Eco-Pan,
Inc. ("Eco-Pan").



On December 6, 2018, the Company, formerly known as Concrete Pumping Holdings
Acquisition Corp., consummated a business combination transaction (the "Business
Combination") pursuant to which it acquired (i) the private operating company
formerly called Concrete Pumping Holdings, Inc. ("CPH") and (ii) the former
special purpose acquisition company called Industrea Acquisition Corp
("Industrea"). In connection with the closing of the Business Combination, the
Company changed its name to Concrete Pumping Holdings, Inc.



As part of the Company's business growth strategy and capital allocation policy,
strategic acquisitions are considered opportunities to enhance our value
proposition through differentiation and competitiveness. Depending on the deal
size and characteristics of the M&A opportunities available, we expect to
allocate capital for opportunistic M&A utilizing cash on the balance sheet and
the revolving line of credit. In recent years we have successfully executed on
this strategy, including our 2018 acquisition of Richard O'Brien Companies and
its affiliates, which solidified our presence in the Colorado and Phoenix,
Arizona markets and our 2019 acquisition of Capital Pumping, LP and its
affiliates, which provided us with complementary assets and operations and
significantly expanded our geographic footprint and business in Texas.



U.S. Concrete Pumping



Brundage-Bone and Capital are concrete pumping service providers in the United
States ("U.S."). Their core business is the provision of concrete pumping
services to general contractors and concrete finishing companies in the
commercial, infrastructure and residential sectors. Equipment generally returns
to a "home base" nightly and neither company contracts to purchase, mix, or
deliver concrete. Brundage-Bone and Capital collectively have approximately 90
branch locations across 19 states with their corporate headquarters in Thornton
(near Denver), Colorado.


we Concrete Waste management services



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 17 operating locations across the United States
with its corporate headquarters in Thornton, Colorado.



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U.K. Operations



Camfaud is a concrete pumping service provider in the United Kingdom ("U.K.").
Their core business is primarily the provision of concrete pumping services to
general contractors and concrete finishing companies in the commercial,
infrastructure and residential sectors. Equipment generally returns to a "home
base" nightly and does not contract to purchase, mix, or deliver concrete.
Camfaud has approximately 30 branch locations throughout the U.K., with its
corporate headquarters in Epping (near London), England. In addition, during the
third quarter of fiscal 2019, we started concrete waste management operations
under our Eco-Pan brand name in the U.K. and currently operate from a shared
Camfaud location.



Corporate


Our Corporate segment is mainly related to the intercompany leasing of real estate to some of our we Concrete pumping branches.


Impacts of COVID-19



In March 2020, the World Health Organization declared the outbreak of COVID-19
to be a global pandemic and recommended containment and mitigation measures
worldwide. The COVID-19 pandemic has rapidly changed market and economic
conditions globally and may continue to create significant uncertainty in the
macroeconomic environment.



In addition, during the second quarter of fiscal 2020, the COVID-19 pandemic
drove a sustained decline in our stock price and a deterioration in general
economic conditions, which qualified as a triggering event necessitating the
evaluation of our goodwill and long-lived assets for indicators of impairment.
As a result of the evaluation, we conducted a quantitative interim impairment
test as of April 30, 2020 resulting in non-cash impairment charges of $43.5
million and $14.4 million to our U.S. Concrete Pumping and U.K. Operations
reporting units, respectively. Through July 31, 2021, no subsequent triggering
events have been identified. We will continue to evaluate our goodwill and
intangible assets in future quarters. Additional impairments may be recorded in
the future based on events and circumstances, including those related to
COVID-19 discussed above.



Despite recent progress in administration of vaccines, both the outbreak, the
recent impact from the Delta variant and the containment and mitigation measures
have had and are likely to continue to have a serious adverse impact on the
global economy, the severity and duration of which are uncertain. It is likely
that government stabilization efforts will only partially mitigate the
consequences to the economy. To date, the COVID-19 pandemic has negatively
impacted revenue volumes primarily in the U.K. and certain markets in the U.S.
This impact was most heavily pronounced in the second and third quarters of
fiscal 2020. Beginning in the fourth quarter of fiscal 2020, revenue volumes
began showing signs of improvement, and as of the third quarter of fiscal 2021,
they have returned back to pre-pandemic levels for most of our markets in the
United States and near pre-pandemic levels in the United Kingdom; however, the
impact from COVID-19 remains an issue in certain markets. The full extent to
which the COVID-19 pandemic will impact the Company's business, financial
condition, and results of operations in the future is highly uncertain and will
be affected by a number of factors. These include the duration and extent of the
pandemic; the duration and extent of imposed or recommended containment and
mitigation measures; the extent, duration, and effective execution of government
stabilization and recovery efforts, including those from the successful
distribution of an effective vaccine; the impact of the pandemic on economic
activity, including on construction projects and the Company's customers' demand
for its services; the Company's ability to effectively operate, including as a
result of travel restrictions and mandatory business and facility closures; the
ability of the Company's customers to pay for services rendered; any further
closures of the Company's and the Company's customers' offices and facilities;
and any additional project delays or shutdowns. Customers may also slow down
decision-making, delay planned work or seek to terminate existing agreements.
Any of these events may have a material adverse effect on the Company's
business, financial condition, and/or results of operations, including further
impairment to our goodwill and intangible assets. The Company will continue to
evaluate the effect of COVID-19 on its business.



Notes Offering



In January 2021, Brundage-Bone Concrete Pumping Holdings Inc., a wholly-owned
subsidiary of the Company, closed its private offering of $375.0 million in
aggregate principal amount of senior secured second lien notes due 2026 (the
"Senior Notes"). The Senior Notes were issued at par and bear interest at a
fixed rate of 6.000% per annum. In addition, we amended and restated our
existing ABL credit agreement (the "ABL Facility") to provide up to $125.0
million (previously $60.0 million) of commitments. The offering proceeds, along
with approximately $15.0 million of borrowings under the ABL Facility, were used
to repay all outstanding indebtedness under our existing term loan agreement,
dated December 6, 2018, and pay related fees and expenses.



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Restatement and revision of financial statements for prior periods



As described in additional detail in the Explanatory Note to our Annual Report
on Form 10-K/A for the year ended October 31, 2020, filed on June 11, 2021, the
SEC released a public statement on April 12, 2021 (the "SEC Statement")
informing market participants that warrants issued by special purpose
acquisition companies ("SPACs") may require classification as a liability of the
entity measured at fair value, with changes in fair value each period reported
in earnings.



The Company previously classified its publicly traded warrants (the "public
warrants") and private placement warrants (the "private warrants") (collectively
the "Warrants"), which were issued in August of 2017, as equity. Following
consideration of the guidance in the SEC Statement, the Company concluded that
its Warrants should have been classified as liabilities and measured at fair
value, with changes in fair value each period reported in earnings. As such, the
Company previously restated its (1) consolidated financial statements as of
October 31, 2019 and for the Successor period from December 6, 2018 through
October 31, 2019 and (2) unaudited consolidated interim financial statements for
the periods ended July 31, 2019, April 30, 2019, and January 31, 2019. Also,
while not material, the Company previously revised its (1) consolidated
financial statements as of and for the fiscal year ended October 31, 2020 and
(2) unaudited consolidated interim financial statements for the periods ended
July 31, 2020, April 30, 2020, and January 31, 2020 to correct the accounting
for its Warrants. The unaudited consolidated financial statements for the three
and nine month periods ended July 31, 2020 included in this Quarterly Report on
Form 10-Q reflect the impacts of such revisions.



Results of Operations



                                               Three Months Ended July 31,           Nine Months Ended July 31,
(dollars in thousands)                         2021                 2020                2021               2020

Revenue                                    $      80,761       $        77,131     $      228,054       $  225,111

Cost of operations                                43,548                39,330            127,676          123,295
Gross profit                                      37,213                37,801            100,378          101,816
Gross margin                                        46.1 %                49.0 %             44.0 %           45.2 %

General and administrative expenses               24,951                26,954             73,812           79,941
Goodwill and intangibles impairment                    -                     -                  -           57,944
Transaction costs                                    111                     -                195                -
Income (loss) from operations                     12,151                10,847             26,371          (36,069 )

Other income (expense):
Interest expense, net                             (6,153 )              (8,364 )          (19,082 )        (26,632 )
Loss on extinguishment of debt                         -                     -            (15,510 )              -
Change in fair value of warrant
liabilities                                          260                (2,734 )          (11,195 )            130
Other income, net                                     32                    36                 85              139
Total other expense                               (5,861 )             (11,062 )          (45,702 )        (26,363 )

Income (loss) before income taxes                  6,290                  

(215) (19 331) (62 432)

Income tax expense (benefit)                       1,652                  (462 )             (826 )         (3,829 )

Net income (loss)                                  4,638                   247            (18,505 )        (58,603 )

Less accretion of liquidation preference
on preferred stock                                  (525 )                (489 )           (1,530 )         (1,432 )
Net income (loss) available to common
shareholders                               $       4,113       $          (242 )   $      (20,035 )     $  (60,035 )






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Three months ended July 31, 2021



For the three months ended July 31, 2021, our net income was $4.6 million, as
compared to a net income of $0.2 million in same period a year ago. The
improvement was due to (1) a 4.7% year-over-year increase in revenue, (2) $2.2
million in lower interest expense, (3) a $2.0 million reduction in general and
administrative expenses and (4) $3.0 million in lower warrant liability
revaluation expense. These amounts were offset by a $2.1 million increase in
income tax expense.


Nine months ended July 31, 2021



For the nine-month period ended July 31, 2021, our net loss was $18.5 million,
as compared to a net loss of $58.6 million in same period a year ago. The
primary driver of the lower net loss was a $15.5 million loss on extinguishment
of debt recorded in the fiscal 2021 first quarter in comparison to the $57.9
million goodwill and intangibles impairment recorded in the fiscal 2020 second
quarter. In addition, we had a $6.1 million improvement in general and
administrative ("G&A") expenses and a $7.6 million reduction in interest
expense. These amounts were offset by a year-over-year change in the fair value
of warrant liabilities of $11.3 million from $0.1 million of income in the
nine-month period ended July 31, 2020 to $11.2 million of expense in the same
period of 2021.



Total Assets


Total assets increased slightly from $ 773.8 million from October 31, 2020 To
$ 782.0 million from July 31, 2021.


                                          July 31,       October 31,
(in thousands)                              2021            2020
Total Assets
U.S. Concrete Pumping                     $ 577,398     $     570,536
U.K. Operations                             104,641           109,726
U.S. Concrete Waste Management Services     143,797           140,209
Corporate                                    26,454            25,517
Intersegment                                (70,324 )         (72,230 )
                                          $ 781,966     $     773,758




Revenue



                                              Three Months Ended July 31,                  Change
(in thousands)                                 2021                 2020              $              %
Revenue
U.S. Concrete Pumping                     $       58,025       $       58,644     $     (619 )         -1.1 %
U.K. Operations                                   12,652                9,208          3,444           37.4 %
U.S. Concrete Waste Management Services           10,122                9,390            732            7.8 %
Corporate                                            625                  625              -            0.0 %
Intersegment                                        (663 )               (736 )           73           -9.9 %
Total revenue                             $       80,761       $       77,131     $    3,630            4.7 %




                                             Nine Months Ended July 31,                 Change
(in thousands)                                 2021               2020             $              %
Revenue
U.S. Concrete Pumping                     $      166,509       $   171,209     $   (4,700 )         -2.7 %
U.K. Operations                                   34,285            28,294          5,991           21.2 %
U.S. Concrete Waste Management Services           27,552            25,978          1,574            6.1 %
Corporate                                          1,875             1,875              -            0.0 %
Intersegment                                      (2,167 )          (2,245 )           78           -3.5 %
Total revenue                             $      228,054       $   225,111     $    2,943            1.3 %






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U.S. Concrete Pumping



Revenue for our U.S. Concrete Pumping segment decreased by 1.1%, or $0.6
million, from the fiscal 2020 third quarter to the fiscal 2021 third quarter.
The second quarter of fiscal 2020 was impacted by COVID-19 primarily during the
month of April. While revenue in many of our markets has returned back to, or
even improved from pre-pandemic levels, the impact from COVID-19 in certain
markets, especially on commercial work, remains an issue and therefore drove the
decline in revenue. In addition, certain of our markets, most notably in Texas,
experienced record or close to record levels of rainfall impacting our ability
to provide service in these markets during the fiscal 2021 third quarter.



Revenue for our U.S. Concrete Pumping segment for the nine-month period ended
July 31, 2021 decreased by 2.7%, or $4.7 million, from the same period in fiscal
2020. Certain of our markets, most notably in Texas and the central part of the
United States, experienced severe adverse weather during the fiscal 2021
nine-month period, which included much higher than average levels of
precipitation and some historically rare freezing temperatures, which impacted
our ability to provide service. Furthermore, the fiscal 2020 first quarter had
no impact from COVID-19 while the fiscal 2021 first quarter was entirely
impacted by the effects of the pandemic.



U.K. Operations



Revenue for our U.K. Operations segment increased by 37.4%, or $3.4 million,
from the fiscal 2020 third quarter to the fiscal 2021 third quarter. Excluding
the impact from foreign currency translation, revenue was up 23.2% year over
year. For the nine-month period ended July 31, 2021, revenue for our U.K.
Operations segment increased by 21.2%, or $6.0 million, from the nine-month
period ended July 31, 2020. Excluding the impact from foreign currency
translation, revenue was up 11.8% year over year. The increase in revenue during
both periods was attributable to the recovery from the impact from COVID-19
which had a much stronger impact on our UK operations in the fiscal 2020 second
and third quarters.


we Concrete Waste management services



Revenue for the U.S. Concrete Waste Management Services segment increased by
7.8%, or $0.7 million, from the fiscal 2020 third quarter to the fiscal 2021
third quarter. For the nine-month period ended July 31, 2021, revenue for the
U.S. Concrete Waste Management Services segment increased by 6.1%, or $1.6
million, from the same period in fiscal 2020. The increase in revenue during
both periods was primarily due to organic growth, pricing improvements, and new
product offerings (such as our new roll off service, which allows for 100 to 120
concrete truck mixer wash outs) that more than offset impacts from COVID-19 in
certain markets.



Corporate



There was no change in revenue for our Corporate segment for the periods
presented. All activity in our Corporate segment is related to the intercompany
leasing of real estate to certain of our U.S Concrete Pumping branches. This
revenue is eliminated in consolidation through the Intersegment line included
above.



Gross Margin



Gross margin was 46.1% and 44.0% for the three and nine-month periods ended July
31, 2021, respectively, down 290 basis points and 120 basis points,
respectively, from the same periods in fiscal 2020. This slight decline in gross
margin is due to inflationary pressures seen throughout the US and UK,
specifically around labor and fuel costs.



General and administrative expenses



G&A expenses for the fiscal 2021 third quarter were $25.0 million, down 7.4%
from $27.0 million in the fiscal 2020 third quarter. As a percent of revenue,
G&A expenses were 30.9% for the fiscal 2021 third quarter compared to 34.9% in
the fiscal 2020 third quarter. During the fiscal 2020 third quarter, we recorded
a $2.0 million contingent liability charge for a potential settlement between
the Company and our previous shareholders as a result of carrying back certain
net operating loss carryforwards and remitting them to the prior shareholders.
There was no such charge in the fiscal 2021 third quarter. The other key driver
of the decline in our G&A expenses is lower amortization of intangible assets
expense of $1.5 million. These amounts were slightly offset by higher
administrative overhead expenses. Excluding non-cash G&A expenses related to
amortization of intangible assets and stock-based compensation expense, G&A
expenses were $17.0 million for the fiscal 2021 third quarter (21.1% of
revenue), down $0.5 million from $17.5 million for the fiscal 2020 third quarter
(22.6% of revenue).



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G&A expenses for the first nine-months of fiscal 2021 were $73.8 million, down
from $79.9 million in the first nine months of fiscal 2021. As a percent of
revenue, G&A expenses were 32.4% for the first nine-months of fiscal 2021
compared to 35.5% in the same period a year ago. The decrease was largely due to
lower amortization of intangible assets expense of $4.8 million and lower
stock-based compensation expense of $1.1 million. Excluding amortization of
intangible assets and stock-based compensation expense, G&A expenses were down
$2.4 million year-over-year. The primary driver of the decline was the
contingent liability charge discussed above.



Good will and depreciation of intangible assets

During the second quarter of fiscal year 2020, as a result of the COVID-19
impact on the Company's market capitalization, with the assistance of a third
party valuation specialist, we performed an interim impairment test over our
indefinite-lived trade name intangible assets and goodwill as of April 30, 2020.
The analysis resulted in $57.9 million in impairments, including a $5.0 million
impairment of our Brundage-Bone Concrete Pumping trade-name, a $38.5 million
goodwill impairment for our U.S Concrete Pumping reporting unit and a $14.4
million impairment to our U.K. Operations reporting unit. Through July 31, 2021,
no subsequent triggering events have been identified.



Change in fair value of liabilities related to warrants



During the third quarter of fiscal 2021 and 2020 we recognized a $0.3 million
gain and a $2.7 million expense, respectively, on the fair value remeasurement
of our liability-classified warrants. For the first nine-months of fiscal 2021
and 2020, we recognized an $11.2 million expense and a $0.1 million gain,
respectively, on the fair value remeasurement of our liability-classified
warrants. The significant increase seen in the fair value remeasurement of the
public warrants for the first nine months of fiscal 2021 is due to the
substantial increase in the Company's share price.



Transaction costs and debt extinguishment costs



Transaction costs include expenses for legal, accounting, and other
professionals that were engaged in connection with an acquisition. There were no
significant transaction costs incurred during the three and nine-month periods
ended July 31, 2021 or 2020.



On January 28, 2021, we (1) closed on our private offering of $375.0 million in
aggregate principal amount of senior secured second lien notes due 2026, (2)
amended and restated our existing ABL Facility to provide up to $125.0 million
(previously $60.0 million) of commitments and (3) repaid all outstanding
indebtedness under our then-existing term loan agreement, dated December 6,
2018. The $15.5 million in debt extinguishment costs incurred relate to the
write-off of all unamortized deferred debt issuance costs that were related to
the term loan.



Interest Expense, Net



Interest expense, net for the three months ended July 31, 2021 was $6.2 million,
down $2.2 million from $8.4 million in third quarter of fiscal 2020. Interest
expense, net for the nine-month period ended July 31, 2021 was $19.1 million,
down $7.6 million from $26.6 the nine-month period from a year ago. The
decreases in both periods were due to having lower average debt from strategic
refinance activities secured in January 2021 and the associated lower
competitive interest rates during the fiscal 2021 periods when compared to the
fiscal 2020 periods.


Income tax provision (benefit)



For the third fiscal quarter ended July 31, 2021, the Company recorded income
tax  expense of $ 1.7 million on pretax  income of $ 6.3 million. For the same
quarter a year ago, the Company recorded income tax  benefit of $ 0.5 million on
a pretax  loss of $ 0.2 million. For the first nine months of  2021, the Company
recorded income tax  benefit of $ 0.8 million on pretax  loss of $ 19.3 million.
For the same period a year ago, the Company recorded income tax  benefit of $
3.8 million on pretax  loss of $ 62.4 million. For the nine-month period ended
July 31, 2021, the Company's effective tax rate was significantly impacted by
the $11.2 million change in fair value of warrant liabilities, all of which is
not recognized for tax purposes. The effective tax rates for the three and
nine-month periods ended July 31, 2020 were impacted by (1) the respective
change in fair value of warrant liabilities, all of which is not recognized for
tax purposes, (2) a $2.0 million contingent liability charge that was not
deductible for tax purposes and (3) a $1.4 million discrete benefit from the
revaluation of net operating losses that were carried back during the period. In
addition, the income tax provision for the year-to-date period ended July 31,
2020 was impacted by the goodwill and intangibles impairment recorded during the
fiscal 2020 second quarter, as most of the impairment was not deductible, and a
rate change in the UK that drove an increase in expense to the tax provision of
$0.9 million.

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Adjusted EBITDA (1) and net income (loss)



                                 Net Income (Loss)                                      Adjusted EBITDA
                            Three Months Ended July 31,             Three Months Ended July 31,                 Change
(in thousands, except
percentages)                 2021                 2020               2021                 2020              $             %
U.S. Concrete Pumping   $         1,844       $         865     $       18,403       $       21,170     $  (2,767 )       -13.1 %
U.K. Operations                     384                 (20 )            4,087                3,397           690          20.3 %
U.S. Concrete Waste
Management Services               1,832               1,679              5,334                4,846           488          10.1 %
Corporate                           578              (2,277 )              625                  625             -           0.0 %
Total adjusted EBITDA   $         4,638       $         247     $       28,449       $       30,038     $  (1,589 )        -5.3 %




                               Net Income (Loss)                                   Adjusted EBITDA
                          Nine Months Ended July 31,           Nine Months Ended July 31,                 Change
(in thousands)               2021               2020            2021                2020              $             %

we Concrete pumping $ (11,759) $ (45,925) $ 49,995

    $      54,338     $  (4,343 )        -8.0 %
U.K. Operations                    254          (16,868 )          10,948               8,524         2,424          28.4 %
U.S. Concrete Waste
Management Services              3,282            2,904            13,037              12,650           387           3.1 %
Corporate                      (10,282 )          1,286             1,877               1,875             2           0.1 %

Total adjusted EBITDA $ (18,505) $ (58,603) $ 75,857

$ 77,387 $ (1,530) -2.0%

(1) Please refer to the “Non-GAAP Measures (EBITDA and Adjusted EBITDA)” section below.


U.S. Concrete Pumping



Adjusted EBITDA for our U.S. Concrete Pumping segment was $18.4 million for the
three months ended July 31, 2021 and $21.2 for the third quarter of fiscal 2020.
For the nine-month period ended July 31, 2021, adjusted EBITDA for our U.S.
Concrete Pumping segment was $50.0 million, down 8.0% from $54.3 million. The
year-over-year decline seen for both the three and nine-month periods was
primarily attributable to the year-over-year change in revenue and higher costs
due to inflation that drove a slight decline in our gross margins as discussed
previously.



U.K. Operations



Adjusted EBITDA for our U.K. Operations segment was $4.1 million for the three
months ended July 31, 2021 as compared to $3.4 million for the same period in
fiscal 2020. For the nine-month period ended July 31, 2021, adjusted EBITDA for
our U.K. Operations segment was $10.9 million, up 28.4% from $8.5 million for
the same period in fiscal 2020. The year-over-year increase was primarily
attributable to the year-over-year improvement in revenue discussed previously.



we Concrete Waste management services



Adjusted EBITDA for our U.S. Concrete Waste Management Services segment was $5.3
million for the three months ended July 31, 2021, up 10.1% as compared to $4.8
million for the same period in fiscal 2020. For the nine-month period ended July
31, 2021, adjusted EBITDA for our U.S. Concrete Waste Management segment was
$13.0 million, up 3.1% from $12.7 million in the same period in fiscal 2020. The
year-over-year increase was primarily attributable to the strong year-over-year
revenue growth coupled with slightly improved gross margins.



Corporate


There was no movement in Adjusted EBITDA for our Corporate segment for the two periods presented. Any year-over-year change for our Headquarters segment is primarily related to the allocation of overheads.

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Liquidity and capital resources


Overview



We use our liquidity and capital resources to: (1) finance working capital
requirements; (2) service our indebtedness; (3) purchase property, plant and
equipment; and (4) finance strategic acquisitions, such as the acquisition of
Capital. Our primary sources of liquidity are cash generated from operations,
available cash and cash equivalents and access to our revolving credit facility
under our Asset-Based Lending Credit Agreement (the "ABL Facility"), which
provides for aggregate borrowings of up to $125.0 million, subject to a
borrowing base limitation. As of July 31, 2021, we had $20.2 million of cash and
cash equivalents and $121.9 million of available borrowing capacity under the
ABL Facility, providing total available liquidity of $142.2 million.



Capital Resources



Our capital structure is primarily a combination of (1) permanent financing,
represented by stockholders' equity; (2) zero-dividend convertible perpetual
preferred stock; (3) long-term financing represented by our Senior Notes and (4)
short-term financing under our ABL Facility. We may from time to time seek to
retire or pay down borrowings on the outstanding balance of our ABL Facility or
Senior Notes using cash on hand. Such repayments, if any, will depend on
prevailing market conditions, our liquidity requirements, contractual
restrictions and other factors.



We believe our existing cash and cash equivalent balances, cash flow from
operations and borrowing capacity under our ABL Facility will be sufficient to
meet our working capital and capital expenditure needs for at least the next 12
months. Our future capital requirements may vary materially from those currently
planned and will depend on many factors, including our rate of revenue growth,
potential acquisitions and overall economic conditions. To the extent that
current and anticipated future sources of liquidity are insufficient to fund our
future business activities and requirements, we may be required to seek
additional equity or debt financing. The sale of additional equity could result
in dilution to our stockholders. The incurrence of debt financing would result
in debt service obligations and the instruments governing such debt could
provide for operating and financing covenants that would restrict our
operations.



Senior Notes and ABL Facility





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Senior Notes


The summary terms of the Senior Secured Notes are as follows:

? Provides for an initial aggregate principal amount of $ 375.0 million;

? The Senior Notes will mature and will be due and payable in full on February 1st,

      2026;
    ? The Senior Notes bear interest at a rate of 6.000% per annum, payable on
      February 1st and August 1st each year;

? The senior notes are guaranteed jointly and severally on a senior guaranteed security

based by the Company, Intermediate Acquisition of Concrete Pumping Corp. and

each of the national wholly-owned subsidiaries of the Issuer that are borrowers

and some of the guarantors under the ABL Facility (collectively, the

“The guarantors”). The Senior Bonds and the guarantees are guaranteed on a

of second priority by all the assets of the Issuer and the Guarantors

which secure the obligations under the ABL facility, subject to certain

exceptions. The Senior Bonds and the guarantees will belong to the Issuer and the

      Guarantors' senior secured obligations, will rank equally with all of the
      Issuer's and the Guarantors' existing and future senior indebtedness and
      will rank senior to all of the Issuer's and the Guarantors' existing and
      future subordinated indebtedness. The Senior Notes are structurally

subordinated to all existing and future debts and commitments of the

Subsidiaries of the Company which do not guarantee the Senior Bonds;

? The act includes certain restrictive clauses which limit, among other things, the

The issuer’s ability and the ability of its restricted subsidiaries to: incur

additional indebtedness and issuance of certain preferred shares; Make sure

restricted investments, distributions and other payments; create or engage

certain privileges; merge, consolidate or transfer all or substantially all

      assets; enter into certain transactions with affiliates; and sell or
      otherwise dispose of certain assets.




The outstanding principal amount of Senior Notes as of July 31, 2021 was $375.0
million and as of that date, the Company was in compliance with all covenants
under the Indenture.


Revolving Asset Based Credit Agreement

Summary terms of the ABL Facility, as modified on January 28, 2021, are the following:

? Availability of borrowing in we Dollars and GBP to a maximum of $ 125.0

millions and an accordion function under which the Company can increase the ABL

Ease up to a surcharge $ 75.0 million;

? Borrowing capacity available for stand-by letters of credit up to $ 7.5

million;

? All loans granted will fall due and be due and payable in full on 28 january,

    2026;


  ? Amounts borrowed may be repaid at any time, subject to the terms and
    conditions of the agreement;

? Loans in we Dollars and pounds sterling bear interest at (1) an adjusted rate

LIBOR rate or (2) a base rate, in each case increased by an applicable margin

currently set at 2.0% and 1.00% per annum, respectively. The ABL facility is

subject to a reduction of 0.25% based on excess availability levels;

? The obligations of the US ABL facility will be secured by a

security on almost all the assets of the American guarantors ABL,

subject to certain exceptions;

? UK The obligations of the ABL Facility will be guaranteed by a perfect first priority

security on almost all of the assets of the UK ABL guarantors; and

? The ABL facility also includes (i) a spring financial covenant (fixed

expense coverage rate) based on the excess availability levels that the Company

must comply on a quarterly basis during the required compliance periods and

    (ii) certain non-financial covenants.



There were no outstanding balances under the amended ABL facility at July 31, 2021 and at that date, the Company was in compliance with all debt covenants.



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Cash Flows



Cash generated from operating activities typically reflects net income, as
adjusted for non-cash expense items such as depreciation, amortization and
stock-based compensation, and changes in our operating assets and liabilities.
Generally, we believe our business requires a relatively low level of working
capital investment due to low inventory requirements and customers paying the
Company as invoices are submitted daily for many of our services.



Net cash provided by operating activities generally reflects the cash effects of
transactions and other events used in the determination of net income or loss.
Net cash provided by operating activities during the nine-month period ended
July 31, 2021 was $60.3 million. The Company had a net loss of $18.5 million
that included an increase of $1.4 million in our net deferred income taxes, a
gain on sale of assets of $1.1 million, and significant non-cash charges
totaling $75.6 million as follows: (1) depreciation of $21.2 million, (2)
amortization of intangible assets of $20.5 million, (3) amortization of deferred
financing costs of $1.9 million, (4) loss on extinguishment of debt expense of
$15.5 million, (5) stock-based compensation expense of $5.3 million, and (6) an
$11.2 million increase in the fair value of warrant liabilities. In addition, we
had cash inflows primarily related to the following activity: (1) a decrease of
$0.5 million in trade receivables, (2) an increase of $5.9 million in accrued
payroll, accrued expenses and other current liabilities and (3) an increase of
$0.8 million in income taxes payable. These amounts were partially offset by net
cash outflows primarily related to a $1.3 million increase in prepaid expenses
and other current assets.



We used $29.5 million to fund investing activities during the nine-month period
ended July 31, 2021. The Company used $34.6 million for the purchase of
property, plant and equipment, which was partially offset by proceeds from the
sale of property, plant and equipment of $5.1 million.



Net cash used in financing activities was $16.9 million for the nine-month
period ended July 31, 2021. Financing activities during this period included
$1.9 million in net borrowings under the Company's ABL Facility, $375.0 million
in proceeds from the issuance of Senior Notes, $381.2 million in payments made
to extinguish the Term Loan Agreement and $8.5 million in debt issuance costs.



Net cash provided by operating activities during the nine-month period ended
July 31, 2020 was $53.5 million. The Company had a net loss of $58.6 million
that included a non-cash gain of $0.1 million from the change in fair value of
warrant liabilities, a loss of $0.1 million in our net deferred income taxes, a
gain on sale of assets of $0.9 million and significant non-cash charges totaling
$110.0 million as follows: (1) Goodwill and intangibles impairment of $57.9
million, (2) depreciation of $19.5 million, (3) amortization of intangible
assets of $25.3 million, (4) amortization of deferred financing costs of $3.1
million and (5) stock-based compensation expense of $4.2 million. In addition,
we had cash outflows related to the following activity: (1) a $3.5 million
increase in prepaid expenses and other current assets, (2) a $1.5 million
decrease in accounts payable, (3) a decrease of $3.9 million in income taxes
payable and (4) a $0.5 million payment of contingent consideration in excess of
amounts established in purchase accounting. These amounts were partially offset
by net cash inflows primarily related to the following activity: (1) a decrease
of $1.7 million in trade receivables and (2) an increase of $10.8 million in
accrued payroll, accrued expenses and other current liabilities.



We used $30.3 million to fund investing activities during the nine-month period
ended July 31, 2020. The Company used $36.7 million for the purchase of
property, plant and equipment, which was partially offset by proceeds from the
sale of property, plant and equipment of $6.4 million.



Net cash provided by financing activities was $27.8 million for the nine-month
period ended July 31, 2020. Financing activities during this period included
$10.7 million in net borrowings under the Company's ABL Credit Agreement and was
partially offset by payments on the Term Loan Agreement of $15.7 million and the
payment of the contingent consideration in connection with the acquisition of
Camfaud of $1.2 million.



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Non-GAAP measures (EBITDA and Adjusted EBITDA)



We calculate EBITDA by taking GAAP net income and adding back interest expense,
income taxes, depreciation and amortization. Adjusted EBITDA is calculated by
taking EBITDA and adding back transaction expenses, loss on debt extinguishment,
stock-based compensation, other income, net, goodwill and intangibles
impairment, and other adjustments. We believe these non-GAAP measures of
financial results provide useful information to management and investors
regarding certain financial and business trends related to our financial
condition and results of operations, and as a tool for investors to use in
evaluating our ongoing operating results and trends and in comparing our
financial measures with competitors who also present similar non-GAAP financial
measures. In addition, these measures (1) are used in quarterly and annual
financial reports prepared for management and our board of directors and (2) may
be used to help management determine incentive compensation. EBITDA and Adjusted
EBITDA have limitations and should not be considered in isolation or as a
substitute for performance measures calculated under GAAP. These non-GAAP
measures exclude certain cash expenses that we are obligated to record on our
GAAP financial statements. In addition, other companies in our industry may
calculate EBITDA and Adjusted EBITDA differently or may not calculate it at all,
which limits the usefulness of EBITDA and Adjusted EBITDA as comparative
measures. Transaction expenses represent expenses for legal, accounting, and
other professionals that were engaged in the completion of various acquisitions.
Transaction expenses can be volatile as they are primarily driven by the size of
a specific acquisition. As such, we exclude these amounts from Adjusted EBITDA
for comparability across periods. Other adjustments include severance expenses,
director fees, expenses related to being a publicly-traded company and other
non-recurring costs. In addition, within the individual segment presentations
only, other adjustments also include transfer pricing and allocation of
intercompany related expenses, which are eliminated in consolidation.

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