Concrete Pumping Holdings, Inc.

Note1. 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 donot contract to purchase, mix, or deliver concrete. Brundage-Bone has approximately90 branch locations across 22 states, with its corporate headquarters in Thornton, Colorado. Camfaud has approximately 35 branch locations throughout the U.K., with its corporate headquarters in Epping (near London), England.

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 20 operating locations across the U.S. with its corporate headquarters in Thornton, Colorado. In addition, we have concrete waste management operations under our Eco-Pan brand name in the U.K. and currently operate from a shared Camfaud location.

Seasonality

The Company’s sales are historically seasonal, with lower revenue in thefirst quarter and higher revenue in thefourth 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.

Note2. Summary of Significant Accounting Policies

We describe our significant accounting policies in Note2 of the notes to the consolidated financial statements in our annual report on Form10-K for the year ended* October 31, 2024 ("Annual Report"). During thethree* months ended* January 31, 2025*, there wereno changes to those accounting policies.

Basis of presentation

We have prepared these unaudited condensed consolidated financial statements based on Securities and Exchange Commission (“SEC”) rules that permit reduced disclosure for interim periods. These financial statements include all adjustments that are necessary for a fair statement of our consolidated results of operations, financial condition and cash flows for the periods shown, including normal, recurring accruals and other items. The consolidated results of operations for the interim periods presented arenot necessarily indicative of results for the full year.

The year-end condensed consolidated balance sheet was derived from audited financial statements but doesnot include all disclosures required by generally accepted accounting principles in the United States (“GAAP”). 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 Form10-K for the year ended* October 31, 2024*.

Certain prior period amounts have been reclassified in order to conform to the current year presentation.

During thefirst quarter of fiscal year2025, the Company updated its allocation methodology of corporate costs to better align 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 the current period presentation. For further discussion, see Note19.

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.

Recently issued accounting pronouncementsnot yet effective**

ASU2023-07, Improvements to Reportable Segment Disclosures ("ASU2023-07") - In* November 2023,the FASB issued ASUNo.* 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 reporting periods beginning after* December 15, 2023,and interim reporting periods within annual reporting periods beginning after December 15, 2024,with early adoption permitted. The Company will adopt the standard during thefourth* quarter of its fiscal year ending* October 31, 2025,*and is currently evaluating the effects that the adoption of this guidance will have on its consolidated financial statements.

ASU2023-09, Improvements to Income Tax Disclosures ("ASU2023-09") - In* December 2023,the FASB issued ASUNo.* 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 reporting periods beginning after* December 15, 2024,*with early adoption permitted. The Company is currently evaluating the effects that the adoption of this guidance will have on its consolidated financial statements.

ASU2024-03, Reporting Comprehensive Income - Expense Disaggregation Disclosures ("ASU2024-03") - In* November 2024,the FASB issued ASUNo.* 2024-03, which requires additional information about specific expense categories in the notes to financial statements for both interim and annual reporting periods. This ASU is effective for public companies with annual reporting periods beginning after* December 15, 2026,and interim reporting periods within annual reporting periods beginning after December 15, 2027,*with early adoption permitted. The Company is currently evaluating the effects that the adoption of this guidance will have on its consolidated financial statements.

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Note3. Prepaid Expenses and Other Current Assets

The significant components of prepaid expenses and other current assets as of* January 31, 2025* and* October 31, 2024* are comprised of the following:

Note4. Property, Plant and Equipment

The significant components of property, plant and equipment as of* January 31, 2025* and* October 31, 2024* are comprised of the following:

For thethree months ended* January 31, 2025and2024* depreciation expense is as follows:

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Note5. Goodwill and Intangible Assets

The Company has recognized goodwill and certain intangible assets in connection with prior business combinations.

There wereno triggering events during thethree months ended* January 31, 2025*. The Company will continue to evaluate its goodwill and intangible assets in future quarters.

The following table summarizes the composition of intangible assets as of* January 31, 2025* and* October 31, 2024*:

Amortization expense for thethree months ended* January 31, 2025* and2024 was $3.0 million and $3.9 million, respectively.

The changes in the carrying value of goodwill by reportable segment for thethree months ended* January 31, 2025* are as follows:

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Note6. Other Non-Current Assets

The significant components of other non-current assets as of* January 31, 2025* and* October 31, 2024* are comprised of the following:

Note7. 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* January 31, 2025* and* October 31, 2024:*

On* January 31, 2025,Brundage-Bone Concrete Pumping Holdings Inc., a Delaware corporation (the "Issuer") and a wholly-owned subsidiary of the Company, closed its private offering of $425.0 million in aggregate principal amount of senior securedsecond* lien notes due2032 (the*“2032* Notes”), issued pursuant to an indenture, among the Issuer, the Company, the other Guarantors (as defined below), Deutsche Bank Trust Company Americas, as trustee and as collateral agent (the "Indenture"). The2032 Notes were issued at par and bear interest at a fixed rate of 7.500% per annum. The Issuer’s obligations under the2032 Notes are jointly and severally guaranteed on a senior secured basis by the Company, Concrete Pumping Intermediate Acquisition Corp. and each of the Issuer’s domestic, wholly-owned subsidiaries that is a borrower or a guarantor under the ABL Facility (collectively, the "Guarantors"). The proceeds from the2032 Notes were used to pay the redemption price for all of the Company's outstanding 6.000% senior securedsecond lien notes due2026 (the*“2026* Notes”) and to pay related fees and expenses thereto. In addition, the remainder of the net proceeds, together with cash on hand, were used to pay a special cash dividend of $1.00 per share of common stock of the Company on* February 3, 2025.*

The pay-off of the2026 Notes was treated as a debt extinguishment. In accordance with debt extinguishment accounting rules, the Company recorded $1.4 million in debt extinguishment costs related to the write-off of all unamortized deferred debt issuance costs that were related to the2026 Notes and capitalized $7.9 million of debt issuance costs related to the2032 Notes.

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Summarized terms of the2032 Notes are as follows:

The outstanding principal amount of the2032 Notes as of* January 31, 2025* was $425.0 million and as of that date, the Company was in compliance with all covenants under the Indenture.

On* September 6, 2024,the ABL Facility was amended to, among other changes, (1) increase the maximum revolver borrowings available to be drawn thereunder from $225.0 million to $350.0 million, (2) increase the letter of credit sublimit from $22.5 million to $32.5 million and (3) extend the maturity of the ABL Facility to the earlier of (a) September 6, 2029or (b) the date that is180* days prior to (i) the final stated maturity date of the2032 Notes or (ii) the date the2032 Notes become due and payable. The ABL Facility also provides for an uncommitted accordion feature under which the borrowers under the ABL Facility can, subject to specified conditions, increase the ABL Facility by up to an additional $25.0 million. Of the $125.0 million in incremental commitments, $75.0 million was provided by Bank of America, N.A. and $50.0 million was provided by PNC Bank, N.A. The amended ABL Facility was treated as a debt modification. The Company capitalized an additional $1.2 million of debt issuance costs related to the* September 6, 2024ABL Facility amendment. The preexisting unamortized deferred costs of $1.4 million and the additional costs of $1.2 million will be amortized from September 6, 2024through September 6, 2029.*

There wasno outstanding balance under the ABL Facility as of* January 31, 2025* and as of that date, the Company was in compliance with all debt covenants. Borrowings are generally in the form of short-term fixed rate loans that can be extended to mature on the earlier of (a)* September 6, 2029or (b) the date that is180* days prior to (i) the final stated maturity date of the2032 Notes or (ii) the date the2032 Notes become due and payable. Amounts borrowed* may*be repaid at any time, subject to the terms and conditions of the agreement.

The Company utilizes the ABL Facility to support its working capital arrangement.

In addition, as of* January 31, 2025* the Company had $1.1 million in credit line reserves and a letter of credit balance of $13.9 million.

As of* January 31, 2025* we had $324.5 million of available borrowing capacity under the ABL Facility. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an asset in deferred financing costs in the accompanying condensed consolidated balance sheets. The Company had debt issuance costs related to the revolving credit facilities of $2.4 million as of* January 31, 2025*.

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Note8. Accrued Payroll and Payroll Expenses

The following table summarizes accrued payroll and expenses as of* January 31, 2025* and* October 31, 2024*:

Note9. Accrued Expenses and Other Current Liabilities

The following table summarizes accrued expenses and other current liabilities as of* January 31, 2025* and* October 31, 2024*:

Note10. Other Liabilities, Non-Current

The following table summarizes other non-current liabilities as of* January 31, 2025* and* October 31, 2024*:

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Note11. Stockholders’** Equity**

Share Repurchase Program

In* March 2024,the board of directors of the Company approved a $15.0 million increase to the Company’s share repurchase program. This authorization was in addition to the repurchase authorization of up to $10.0 million to expire March 31, 2025that was previously approved in January 2023.In March 2025,the board of directors of the Company approved the extension of the expiration date of the existing share repurchase program, from March 31, 2025to December 31, 2026.As of January 31, 2025,*the Company has $15.1 million available for repurchase under its share repurchase program.

The repurchase program permits shares to be repurchased in the open market, by block purchase, in privately negotiated transactions, inone or more transactions from time to time, or pursuant to any trading plan adopted in accordance with Rule10b5-1 of the Securities Exchange Act of1934, as amended, (the "Exchange Act"). Open market purchases will be conducted in accordance with the limitations set forth in Rule10b-18 of the Exchange Act and other applicable legal and regulatory requirements. The repurchase program* may*be suspended, terminated, extended or otherwise modified by the board of directors without notice at any time for any reason, including, without limitation, market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, capital and liquidity objectives, and other factors deemed appropriate by the Company's management.

The following table summarizes the shares repurchased, total cost of shares repurchased and average price per share for thethree months ended* January 31, 2025and2024.* All repurchases were at market value.

Note12. Revenue Recognition

The table below summarizes our revenues as presented in our unaudited condensed consolidated statements of operations for the periods ended* January 31, 2025and2024* by revenue type:

For further information, see Note2 of the notes to condensed consolidated financial statements in our annual report on Form10-K for the year ended* October 31, 2024 (*"Annual Report").

Note13. Income Taxes

The following table summarizes income before income taxes and income tax expense for thethree months ended* January 31, 2025and2024:*

For thethree months ended* January 31, 2025and2024,* the Company’s effective tax rate was 28.2% and 20.9%, respectively. The comparability of effective tax rates between both periods was primarily impacted by excess tax deficiencies from share-based compensation in fiscal2024.

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Note14. Stock-Based Compensation

Pursuant to the Concrete Pumping Holdings, Inc.2018 Omnibus Incentive Plan, the Company has granted stock-based awards to certain employees in the U.S. and U.K.

The following table summarizes realized compensation expense related to stock options and restricted stock awards in the accompanying condensed consolidated statements of operations: