UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended~~July 31~~~~, 2020~~April 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-38166

CONCRETE PUMPING HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Delaware	83-1779605
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

500 E. 84th Avenue, Suite A-5

Thornton, Colorado 80229

(Address of principal executive offices, including zip code)

(303) 289-7497

(Registrant's telephone number, including area code)

None

(Former name, former address and former fiscal year, if changes since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	BBCP	The Nasdaq Capital Market

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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 ~~definition~~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	☐	Accelerated Filer	☒
Non-Accelerated Filer	☐	Smaller Reporting Company	☒
Emerging growth company	☒

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 ☐ No ☒

As of ~~September 8, 2020,~~June 11, 2021, the registrant had ~~58,200,084~~56,698,060 shares of common stock outstanding.

Table of Contents

CONCRETE PUMPING HOLDINGS, INC.

FORM 10-Q

FOR THE QUARTER ENDED ~~JULY 31~~~~, 2020~~April 30, 2021

			Page
PartI. Financial Information

	Item 1.	Unaudited Consolidated Financial Statements:
		Consolidated Balance Sheets	3
		Consolidated Statements of Operations and Comprehensive Income	4
		Consolidated Statements of Changes in ~~Stockholders’~~Stockholders’ Equity	6
		Consolidated Statements of Cash Flows	87
		Notes to Unaudited Consolidated Financial Statements	119
	Item 2.	~~Management’s~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	3934
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5951
	Item 4.	Controls and Procedures	5951

Part II. Other Information

	Item 1.	Legal Proceedings	6052
	Item 1A.	Risk Factors	6052
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6052
	Item 3.	Defaults Upon Senior Securities	6052
	Item 4.	Mine Safety Disclosures	6052
	Item 5.	Other Information	6052
	Item 6.	Exhibits	6153

~~Signatures~~	62Signatures		54

Table of Contents

PART I

ITEM 1.Unaudited Consolidated Financial Statements

Concrete Pumping Holdings, Inc.

Consolidated Balance Sheets

	(Unaudited)						(Unaudited)
	*July 31,*			*October 31,*			*April 30,*			*October 31,*
(in thousands except per share amounts)	*2020*			*2019*			*2021*			*2020*
ASSETS

Current assets:
Cash and cash equivalents	$	4,131		$	7,473		$	13,714		$	6,736
Trade receivables, net		44,365			45,957			41,800			44,343
Inventory		5,339			5,254			4,555			4,630
Income taxes receivable		4,766			697			352			1,602
Prepaid expenses and other current assets		4,631			3,378			7,204			2,694
Total current assets		63,232			62,759			67,625			60,005

Property, plant and equipment, net		305,896			307,415			304,865			304,254
Intangible assets, net		192,228			222,293			171,213			183,839
Goodwill		223,565			276,088			225,012			223,154
Other non-current assets		1,782			1,813			712			1,753
Deferred financing costs		814			997			2,088			753
Total assets	$	787,517		$	871,365		$	771,515		$	773,758

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Revolving loan	$	12,990		$	23,555		$	1,087		$	1,741
Term loans, current portion		20,888			20,888			0			20,888
Current portion of capital lease obligations		95			91			100			97
Accounts payable		5,910			7,408			6,622			6,587
Accrued payroll and payroll expenses		11,183			9,177			10,838			13,065
Accrued expenses and other current liabilities		21,493			28,106			21,618			18,879
Income taxes payable		1,348			1,153			601			1,055
Deferred consideration		0			1,708
Total current liabilities		73,907			92,086			40,866			62,312

Long term debt, net of discount for deferred financing costs		348,183			360,938			368,388			343,906
Capital lease obligations, less current portion		405			477			330			380
Deferred income taxes		69,257			69,049			65,618			68,019
Warrant liability								18,485			7,031
Total liabilities		491,752			522,550			493,687			481,648

Zero-dividend convertible perpetual preferred stock, $0.0001 par value, 2,450,980 shares issued and outstanding as of July 31, 2020 and October 31, 2019		25,000			25,000
Zero-dividend convertible perpetual preferred stock, $0.0001 par value, 2,450,980 shares issued and outstanding as of April 30, 2021 and October 31, 2020								25,000			25,000

Stockholders' equity
Common stock, $0.0001 par value, 500,000,000 shares authorized, 58,200,084 and 58,253,220 issued and outstanding as of July 31, 2020 and October 31, 2019, respectively		6			6
Common stock, $0.0001 par value, 500,000,000 shares authorized, 56,575,186 and 56,463,992 issued and outstanding as of April 30, 2021 and October 31, 2020, respectively								6			6
Additional paid-in capital		354,696			350,489			371,703			367,681
Treasury stock		(131	)		0			(461	)		(131	)
Accumulated other comprehensive income (loss)		1,008			(599	)		4,563			(606	)
(Accumulated deficit)		(84,814	)		(26,081	)
Accumulated deficit								(122,983	)		(99,840	)
Total stockholders' equity		270,765			323,815			252,828			267,110

Total liabilities and stockholders' equity	$	787,517		$	871,365		$	771,515		$	773,758

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements

Table of Contents

Concrete Pumping Holdings, Inc.

Consolidated Statements of Operations

(Unaudited)

	*Successor*												*Predecessor*			*Three Months Ended April 30,*							*Six Months Ended April 30,*
(in thousands, except share and per share amounts)	*Three Months Ended July 31, 2020*			*Three Months Ended July 31, 2019*			*Nine Months Ended July 31, 2020*			*December 6, 2018 through July 31, 2019*			*November 1, 2018 through December 5, 2018*			*2021*			*2020*				*2021*			*2020*

Revenue	$	77,131		$	78,655		$	225,111		$	174,613		$	24,396		$	76,873		$	74,041			$	147,294		$	147,980

Cost of operations		39,330			39,665			123,295			98,396			14,027			43,570			42,174				84,128			83,965
Gross profit		37,801			38,990			101,816			76,217			10,369			33,303			31,867				63,166			64,015

General and administrative expenses		26,954			28,159			79,941			63,693			4,936			26,472			26,381				48,860			52,988
Goodwill and intangibles impairment		0			0			57,944			0			0			0			57,944				0			57,944
Transaction costs		0			176			0			1,458			14,167			55			0				84			0
Income (loss) from operations		10,847			10,655			(36,069	)		11,066			(8,734	)		6,776			(52,458	)			14,222			(46,917	)

Other income (expense):
Interest expense, net		(8,364	)		(9,843	)		(26,632	)		(24,753	)		(1,644	)		(6,029	)		(8,765	)			(12,929	)		(18,268	)
Loss on extinguishment of debt		0			0			0			0			(16,395	)		0			0				(15,510	)		0
Change in fair value of warrant liabilities																	(11,456	)		3,254				(11,456	)		2,864
Other income, net		36			28			139			59			6			26			34				52			103
Total other expense		(8,328	)		(9,815	)		(26,493	)		(24,694	)		(18,033	)		(17,459	)		(5,477	)			(39,843	)		(15,301	)

Income (loss) before income taxes		2,519			840			(62,562	)		(13,628	)		(26,767	)
Loss before income taxes																	(10,683	)		(57,935	)			(25,621	)		(62,218	)

Income tax expense (benefit)		(462	)		(1,922	)		(3,829	)		(3,115	)		(4,192	)		170			(2,221	)			(2,478	)		(3,368	)

Net income (loss)		2,981			2,762			(58,733	)		(10,513	)		(22,575	)
Net loss																	(10,853	)		(55,714	)			(23,143	)		(58,850	)
																						��
Less accretion of liquidation preference on preferred stock		(489	)		(456	)		(1,432	)		(1,159	)		(126	)		(499	)		(470	)			(1,006	)		(943	)

Income (loss) available to common shareholders	$	2,492		$	2,306		$	(60,165	)	$	(11,672	)	$	(22,701	)
Loss available to common shareholders																$	(11,352	)	$	(56,184	)		$	(24,149	)	$	(59,793	)

Weighted average common shares outstanding
Basic		52,782,663			49,940,411			52,752,884			37,155,182			7,576,289			53,465,799			52,782,663				53,303,302			52,752,884
Diluted		55,892,193			53,122,690			52,752,884			37,155,182			7,576,289			53,465,799			52,782,663				53,303,302			52,752,884

Net income (loss) per common share
Net loss per common share
Basic	$	0.05		$	0.05		$	(1.14	)	$	(0.31	)	$	(3.00	)	$	(0.21	)	$	(1.06	)		$	(0.45	)	$	(1.13	)
Diluted	$	0.04		$	0.05		$	(1.14	)	$	(0.31	)	$	(3.00	)	$	(0.21	)	$	(1.06	)		$	(0.45	)	$	(1.13	)

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements

Table of Contents

Concrete Pumping Holdings, Inc.

Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss

(Unaudited)

	*Successor*											*Predecessor*			*Three Months Ended April 30,*						*Six Months Ended April 30,*
(in thousands)	*Three Months Ended July 31, 2020*		*Three Months Ended July 31, 2019*			*Nine Months Ended July 31, 2020*			*December 6, 2018 through July 31, 2019*			*November 1, 2018 through December 5, 2018*			*2021*			*2020*			*2021*			*2020*

Net income (loss)	$	2,981	$	2,762		$	(58,733	)	$	(10,513	)	$	(22,575	)
Net loss															$	(10,853	)	$	(55,714	)	$	(23,143	)	$	(58,850	)

Other comprehensive income (loss):
Foreign currency translation adjustment		3,821		(4,535	)		1,607			(6,441	)		(674	)		668			(4,185	)		5,169			(2,214	)

Total comprehensive income (loss)	$	6,802	$	(1,773	)	$	(57,126	)	$	(16,954	)	$	(23,249	)
Total comprehensive loss															$	(10,185	)	$	(59,899	)	$	(17,974	)	$	(61,064	)

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements

Table of Contents

Concrete Pumping Holdings, Inc.

Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)

~~(PREDECESSOR)~~

~~October 31, 2018 through December 5, 2018~~

(in thousands)

Common Stock

Additional Paid-In Capital

Accumulated Other Comprehensive Income (loss)

Retained Earnings (Accumulated Deficit)

Total

Balance at October 31, 2018
$ 8 $ 18,724 $ 584 $ 26,704 $ 46,020
Net loss
0 0 0 (22,575 ) (22,575 )
Stock-based compensation
0 27 0 0 27
Foreign currency translation adjustment
0 0 (674 ) 0 (674 )
Balance at December 5, 2018
$ 8 $ 18,751 $ (90 ) $ 4,129 $ 22,798

~~(SUCCESSOR)~~

~~December 6, 2018 through~~ ~~July 31~~~~, 2019~~

Common Stock

Additional Paid-In

Accumulated Other Comprehensive

(in thousands)

Class A

Class B

Capital

Income (loss)

Accumulated Deficit

Total

Balance at December 6, 2018
$ 0 $ 1 $ 12,433 $ 0 $ (7,434 ) $ 5,000
Redemption of Class A common stock
0 0 (12,433 ) 0 (3,577 ) (16,010 )
Issuance of Class A common stock
1 0 96,900 0 0 96,901
Rollover of Class A common stock as a result of the Business Combination
1 0 164,908 0 0 164,909
Conversion of Class B common stock
1 (1 ) 0 0 0 0
Net loss
0 0 0 0 (3,630 ) (3,630 )
Foreign currency translation adjustment
0 0 0 (557 ) 0 (557 )
Balance at January 31, 2019
$ 3 $ 0 $ 261,808 $ (557 ) $ (14,641 ) $ 246,613
Shares issued to acquire business
0 0 1,150 0 0 $ 1,150
Stock-based compensation expense
0 0 361 0 0 361
Shares issued upon exercise of stock options and warrants
0 0 1,370 0 0 1,370
Shares issued upon awards of restricted stock
1 0 (1 ) 0 0 0
Issuance of shares in exchange for warrants
0 0 5,158 0 (5,158 ) 0
Net loss
0 0 0 0 (9,645 ) (9,645 )
Foreign currency translation adjustment
0 0 0 (1,349 ) 0 (1,349 )
Balance at April 30, 2019
$ 4 $ 0 $ 269,846 $ (1,906 ) $ (29,444 ) $ 238,500
Shares issued upon public offering Class A common stock 2 0 77,385 0 0 $ 77,387
Stock-based compensation expense 0 0 1,625 0 0 1,625
Net income 0 0 0 0 2,762 2,762
Foreign currency translation adjustment 0 0 0 (4,535 ) 0 (4,535 )
Balance at July 31, 2019 $ 6 $ 0 $ 348,856 $ (6,441 ) $ (26,682 ) $ 315,739

~~Table of Contents~~

~~(SUCCESSOR)~~

~~October 31, 2019 through~~ ~~July 31~~~~, 2020~~

(in thousands)	*Common Stock*		*Additional Paid-In Capital*		*Treasury Stock*			*Accumulated Other Comprehensive Income (loss)*			*Accumulated Deficit*			*Total*			*Common Stock*		*Additional Paid-In Capital*		*Treasury Stock*			*Accumulated Other Comprehensive Income (loss)*			*Accumulated Deficit*			*Total*
Balance at October 31, 2019	$	6	$	350,489	$	0		$	(599	)	$	(26,081	)	$	323,815		$	6	$	356,227	$	0		$	(599	)	$	(38,589	)	$	317,045
Stock-based compensation expense		0		1,467		0			0			0			1,467			0		1,467		0			0			0			1,467
Shares issued upon exercise of stock options, net of shares used for tax withholding		0		0		(131	)		0			0			(131	)		0		0		(131	)		0			0			(131	)
Net loss		0		0		0			0			(2,746	)		(2,746	)		0		0		0			0			(3,137	)		(3,137	)
Foreign currency translation adjustment		0		0		0			1,971			0			1,971			0		0		0			1,971			0			1,971
Balance at January 31, 2020	$	6	$	351,956	$	(131	)	$	1,372		$	(28,827	)	$	324,376		$	6	$	357,694	$	(131	)	$	1,372		$	(41,726	)	$	317,216
Stock-based compensation expense		0		1,383		0			0			0		$	1,383			0		1,383		0			0			0			1,383
Net loss		0		0		0			0			(58,968	)		(58,968	)		0		0		0			0			(55,714	)		(55,714	)
Foreign currency translation adjustment		0		0		0			(4,185	)		0			(4,185	)		0		0		0			(4,185	)		0			(4,185	)
Balance at April 30, 2020	$	6	$	353,339	$	(131	)	$	(2,813	)	$	(87,795	)	$	262,606		$	6	$	359,077	$	(131	)	$	(2,813	)	$	(97,439	)	$	258,700



(in thousands)																	*Common Stock*		*Additional Paid-In Capital*		*Treasury Stock*			*Accumulated Other Comprehensive Income (loss)*			*Accumulated Deficit*			*Total*
Balance at October 31, 2020																	$	6	$	367,681	$	(131	)	$	(606	)	$	(99,840	)	$	267,110
Stock-based compensation expense		0		1,357		0			0			0		$	1,357			0		672		0			0			0			672
Net income		0		0		0			0			2,981			2,981
Shares issued upon exercise of stock options, net of shares used for tax withholding																		0		0		(330	)		0			0			(330	)
Net loss																		0		0		0			0			(12,290	)		(12,290	)
Foreign currency translation adjustment		0		0		0			3,821			0			3,821			0		0		0			4,501			0			4,501
Balance at July 31, 2020	$	6	$	354,696	$	(131	)	$	1,008		$	(84,814	)	$	270,765
Balance at January 31, 2021																	$	6	$	368,353		(461	)	$	3,895		$	(112,130	)	$	259,663
Stock-based compensation expense																		0		3,350		0			0			0			3,350
Net loss																		0		0		0			0			(10,853	)		(10,853	)
Foreign currency translation adjustment																		0		0		0			668			0			668
Balance at April 30, 2021																	$	6	$	371,703		(461	)	$	4,563		$	(122,983	)	$	252,828

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements

Table of Contents

Concrete Pumping Holdings, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Successor

Predecessor

(in thousands)

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

Net loss
$ (58,733 ) $ (10,513 ) $ (22,575 )
Adjustments to reconcile net income to net cash provided by operating activities:

Goodwill and intangibles impairment
57,944 0 0
Depreciation
19,537 14,125 2,060
Deferred income taxes
92 (2,983 ) (4,355 )
Amortization of deferred financing costs
3,094 1,385 152
Write off deferred debt issuance costs
0 0 3,390
Amortization of debt premium
0 0 (11 )
Amortization of intangible assets
25,290 22,235 653
Stock-based compensation expense
4,207 1,986 27
Prepayment penalty on early extinguishment of debt
0 0 13,004
Net (loss) gain on the sale of property, plant and equipment
(944 ) 420 (166 )
Payment of contingent consideration in excess of amounts established in purchase accounting
(526 ) 0 0
Net changes in operating assets and liabilities (net of acquisitions):
Trade receivables, net
1,668 (4,346 ) 485
Inventory
(63 ) (143 ) (294 )
Prepaid expenses and other current assets
(3,520 ) (4,209 ) (1,283 )
Income taxes payable, net
(3,899 ) (279 ) 203
Accounts payable
(1,489 ) (7,666 ) (654 )
Accrued payroll, accrued expenses and other current liabilities
10,826 (8,587 ) 17,280
Net cash provided by operating activities
53,484 1,425 7,916

Cash flows from investing activities:

Purchases of property, plant and equipment
(36,658 ) (29,700 ) (503 )
Proceeds from sale of property, plant and equipment
6,392 1,546 364
Cash withdrawn from Industrea Trust Account
0 238,474 0
Acquisition of net assets, net of cash acquired - CPH acquisition
0 (449,434 ) 0
Acquisition of net assets, net of cash acquired - Capital acquisition
0 (129,218 )
Acquisition of net assets, net of cash acquired - Other Business Combinations
0 (2,257 ) 0
Net cash (used in) investing activities
(30,266 ) (370,589 ) (139 )

~~Table of Contents~~

~~Concrete Pumping Holdings, Inc.~~

~~Consolidated Statements of Cash Flows (Continued)~~

~~(Unaudited)~~

	*Successor*						*Predecessor*			*For the Six Months Ended April 30,*
(in thousands)	*Nine Months Ended July 31, 2020*			*December 6, 2018 through July 31, 2019*			*November 1, 2018 through December 5, 2018*			*2021*			*2020*
Net loss										$	(23,143	)	$	(58,850	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Goodwill and intangibles impairment											0			57,944
Depreciation											13,991			13,015
Deferred income taxes											(2,926	)		(3,515	)
Amortization of deferred financing costs											1,419			2,076
Amortization of intangible assets											13,853			17,147
Stock-based compensation expense											4,022			2,850
Change in fair value of warrant liabilities											11,456			(2,864	)
Loss on extinguishment of debt											15,510			0
Net gain on the sale of property, plant and equipment											(869	)		(477	)
Payment of contingent consideration in excess of amounts established in purchase accounting											0			(526	)
Net changes in operating assets and liabilities (net of acquisitions):
Trade receivables, net											3,135			4,009
Inventory											161			127
Prepaid expenses and other current assets											(3,377	)		(5,209	)
Income taxes payable, net											750			301
Accounts payable											(145	)		(101	)
Accrued payroll, accrued expenses and other current liabilities											2,359			1,060
Net cash provided by operating activities											36,196			26,987

Cash flows from investing activities:
Purchases of property, plant and equipment											(16,672	)		(23,305	)
Proceeds from sale of property, plant and equipment											3,687			3,607
Net cash used in investing activities											(12,985	)		(19,698	)

Cash flows from financing activities:
Proceeds on long term debt		0			417,000			0			375,000			0
Payments on long term debt		(15,666	)		(9,747	)		0			(381,206	)		(10,444	)
Proceeds on revolving loan		206,420			161,123			4,693			138,239			143,559
Payments on revolving loan		(217,162	)		(128,932	)		(20,056	)		(139,004	)		(127,404	)
Payment of debt issuance costs		0			(23,708	)		0			(8,464	)		0
Redemption of common shares		0			(231,415	)		0
Payments on capital lease obligations		(67	)		(56	)		(7	)		(47	)		(45	)
Purchase of treasury stock		(131	)		0			0			(330	)		(131	)
Issuance of preferred shares		0			25,000			0
Payment of underwriting fees		0			(8,050	)		0
Issuance of common shares - Dec 2018		0			96,900			0
Issuance of common shares - May 2019		0			77,387			0
Payment of contingent consideration established in purchase accounting		(1,161	)		0			0			0			(1,161	)
Proceeds on exercise of rollover incentive options		0			1,370			0
Net cash provided by (used in) financing activities		(27,767	)		376,872			(15,370	)		(15,812	)		4,374
Effect of foreign currency exchange rate on cash		1,207			(3,183	)		(70	)		(421	)		(1,088	)
Net increase (decrease) in cash		(3,342	)		4,525			(7,663	)
Cash:
Net increase in cash and cash equivalents											6,978			10,575
Cash and cash equivalents:
Beginning of period		7,473			4			8,621			6,736			7,473
End of period	$	4,131		$	4,529		$	958		$	13,714		$	18,048

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements

Table of Contents

Concrete Pumping Holdings, Inc.

Consolidated Statements of Cash Flows (Continued)

(Unaudited)

	*Successor*				*Predecessor*		*Six Months Ended April 30,*
(in thousands)	*Nine Months Ended July 31, 2020*		*December 6, 2018 through July 31, 2019*		*November 1, 2018 through December 5, 2018*		*2021*		*2020*
Supplemental cash flow information:
Cash paid for interest	$	24,017	$	20,696	$	201	$	5,908	$	16,673
Cash paid for income taxes	$	343	$	1,860	$	0	$	953	$	212

Non-cash investing and financing activities:
Fair value of rollover equity for Business Combination	$	0	$	164,909	$	0
Equipment purchases included in accrued expenses and accounts payable	$	2,397	$	7,658	$	0	$	2,029	$	4,557
Shares issued to acquire a business	$	0	$	1,150	$	0
Holdbacks related to the acquisition of a business	$	0	$	181	$	0

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements

108

Table of Contents

Note 1. Organization and Description of Business

Organization

Concrete Pumping Holdings, Inc. (the “Company” or “Successor”) is a Delaware corporation headquartered in Thornton (near Denver), Colorado. The Consolidated Financial Statements include the accounts of Concrete Pumping Holdings, Inc. and its wholly owned subsidiaries including Brundage-Bone Concrete Pumping, Inc. (“Brundage-Bone”), Capital Pumping (“Capital”), Camfaud Group Limited (“Camfaud”), and Eco-Pan, Inc. (“Eco-Pan”).

On December 6, 2018 (the ~~"Closing Date"~~“Closing Date”), 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”~~(the "Predecessor") 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. ~~The financial results described herein for the dates and periods prior to the Business Combination relate to the operations of CPH prior to the consummation of the Business Combination. See Note~~ 4 ~~– Business Combinations for further discussion.~~

Nature of business

Brundage-Bone and Capital are concrete pumping service providers 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 ~~contractor~~finishing companies in the commercial, infrastructure and residential sectors. Most often equipment 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 22 states, with its corporate headquarters in Thornton (near Denver), Colorado. Camfaud has approximately 30 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 in the U.S. and the U.K. Eco-Pan uses containment pans specifically designed to hold waste products from concrete and other industrial cleanup operations. Eco-Pan has 1617 operating locations across the U.S. and shares an operating location in the U.K. with one of the Camfaud branches mentioned above, with its corporate headquarters in Thornton (near Denver), Colorado.

Seasonality

The Company’s sales are historically seasonal, with lower revenue volumes typically in the first half of the fiscal year and higher revenue volumes in the second half of each fiscal year. Such seasonality also causes the Company’s working capital cash flow requirements to vary from the first half of the fiscal year to the second half of the fiscal year and primarily depends on the variability of weather patterns with the Company generally having lower sales volume during the winter and spring months.

Impacts of COVID-19

In ~~December 2019,~~ ~~a novel strain of coronavirus (“COVID-~~~~19”~~~~) emerged and has spread around the world. On~~ March ~~11,~~ 2020, the World Health Organization declared the outbreak of COVID-19 to be a global pandemic and recommended containment and mitigation measures worldwide. On The COVID-~~March 13,~~19 pandemic has rapidly changed market and economic conditions globally and may continue to create significant uncertainty in the macroeconomic environment.

In addition, the COVID-19 pandemic drove a sustained decline in the Company's stock price and a deterioration in general economic conditions in the fiscal 2020second quarter, which qualified as a triggering event necessitating the evaluation of its goodwill and long-lived assets for indicators of impairment. As a result of the evaluation, the Company conducted a quantitative interim impairment test as of April 30, 2020 ~~U.S. President Trump announced a National Emergency relating~~resulting in non-cash impairment charges of $43.5 million and $14.4 million to the ~~pandemic. Government authorities~~Company's U.S. Concrete Pumping and U.K. Operations reporting units, respectively. Through April 30, 2021, no subsequent triggering events have been identified. The Company will continue to evaluate its goodwill and intangible assets in future quarters. Additional impairments may be recorded in the ~~U.S.~~future based on events and ~~U.K. have recommended or imposed various social distancing, quarantine, and isolation measures on large portions~~circumstances, including those related to COVID-19 discussed above.

Table of ~~the population, which include limitations on travel and mandatory cessation~~Contents
Despite recent progress in administration of ~~certain business activities. Both~~vaccines, both the outbreak 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 primarily negatively impacted revenue volumes 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 returning back to pre-pandemic levels, and during the second quarter of fiscal 2021 improved from pre-pandemic levels; 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;~~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.
11

~~Table of Contents~~
~~In the final month of the~~ ~~second~~ ~~quarter of fiscal~~ ~~2020,~~ ~~our operations in the Seattle and U.K. markets were negatively impacted due to COVID-~~19~~-imposed construction site shutdowns. These restrictions were, for the most part, lifted during the~~ ~~third~~ ~~quarter ended~~ ~~July 31, 2020.~~ As a result of the pandemic, the Company has implemented certain short-term cost reductions, including headcount reductions, modified work schedules reducing hours where needed, and furloughs in limited locations. The Company had previously suspended any remaining uncommitted ~~2020~~ capital expenditure investments, but that has since been lifted as its overall liquidity and operations have improved. While the Company believes these disruptions will be temporary, it is difficult to predict how long they will last and the impact they will have on the Company in future periods. The Company will continue to evaluate the effect of COVID-19 on its business.

~~In addition, the COVID-~~19 ~~pandemic drove a sustained decline in the Company's stock price and a deterioration in general economic conditions in the fiscal~~ ~~2020~~~~second~~ quarter, which qualified as a triggering event necessitating the evaluation of its goodwill and long-lived assets for indicators of impairment. As a result of the evaluation, the Company conducted a quantitative interim impairment test as of ~~April 30, 2020.~~ ~~There were~~ no ~~triggering events during the fiscal~~ ~~2020~~~~third~~ ~~quarter. Refer to Notes~~ 2 ~~and~~ 8 ~~for further discussion. The Company will continue to evaluate its 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.~~

Note 2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying Unaudited Consolidated Financial Statements have been prepared, without audit, in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the ~~Securities and Exchange Commission (“SEC”).~~SEC. Accordingly, they do not include all 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 fairly the financial position, results of operations and cash flows of the Company at ~~July 31, 2020~~ April 30, 2021and for all periods presented. All intercompany balances and transactions have been eliminated in consolidation.

~~As a result~~
Principles of the Business Combination, the Company is the acquirer for accounting purposes and CPH is the acquiree and accounting predecessor. The Company’s financial statement presentation distinguishes the Company’s financial performance into ~~two~~ ~~distinct periods, the period up to the Closing Date (labeled “Predecessor”) and the period including and after that date (labeled “Successor”).~~consolidation

The Business Combination was accounted for as a business combination using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting that is based on the fair value of the net assets acquired.
~~Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. See Note~~ 4 ~~– Business Combinations for a discussion of the estimated fair values of assets and liabilities recorded in connection with the Company’s acquisition of CPH.~~
As a result of the application of the acquisition method of accounting as of the Closing Date of the Business Combination, the accompanying Consolidated Financial Statements include a black line division which indicates that the Predecessor and Successor reporting entities shown are presented on a different basis and are therefore, ~~not~~ ~~comparable.~~
~~The historical financial information of Industrea prior to the Business Combination (a special purpose acquisition company, or “SPAC”) has~~ ~~not~~ ~~been reflected in the Predecessor financial statements as these historical amounts have been determined to be~~ ~~not~~ useful information to a user of the financial statements. SPACs deposit the proceeds from their initial public offerings into a segregated trust account until a business combination occurs, where such funds are then used to pay consideration for the acquiree and/or to pay stockholders who elect to redeem their shares of common stock in connection with the business combination. The operations of a SPAC, until the closing of a business combination, other than income from the trust account investments and transaction expenses, are nominal. Accordingly, no ~~other activity in the Company was reported for periods prior to~~ ~~December 6, 2018~~ ~~besides CPH’s operations as Predecessor.~~
12

~~Table of Contents~~
~~Principles of consolidation~~
~~The Successor~~ Consolidated Financial Statements include all accounts of the Company ~~and its subsidiaries. The Predecessor Consolidated Financial Statements include all accounts of CPH~~ and its subsidiaries. All intercompany balances and transactions have been eliminated.

Restatement and Revision of Prior Period Financial Statements
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 six month periods ended April 30, 2020 included in this Quarterly Report on Form 10-Q reflect the impacts of such revisions. Management evaluated the impact of the change in the classification of the Warrants on the unaudited consolidated financial statements for the quarter ended January 31, 2021 and determined the impact was immaterial. As a result, the Company is has revised those unaudited consolidated financial statements to correct the accounting for its Warrants.
10
Table of Contents
The following table sets forth the impact on the unaudited consolidated financial statements as of January 31, 2021:
As previously reported Revision adjustment As revised
Warrant liabilities 0 7,031 7,031
Total liabilities 474,329 7,031 481,360

Additional paid-in capital 362,615 5,738 368,353
Accumulated deficit (99,361 ) (12,769 ) (112,130 )
Total stockholders' equity 266,694 (7,031 ) 259,663
The revision had no impact on the Company’s net revenue, operating income, cash and cash equivalents, or cash flows from operating, investing and financing activities. The impact on the consolidated statement of operations was $0.5 million, which was determined to be immaterial and has been recorded as an out-of-period adjustment during the quarter ended April 30, 2021.
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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates include accrued sales and use taxes, the liability for incurred but unreported claims under various partially self-insured polices, allowance for doubtful accounts, goodwill impairment analysis, valuation of share-based compensation and accounting for business combinations. Actual results may differ from those estimates, and such differences may be material to the Company’s consolidated financial statements.

Trade receivables

Trade 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 trade 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 charge interest on past-due trade receivables.

Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. The allowance for doubtful accounts was $0.7 million and $0.6 ~~million~~ as of ~~July 31, 2020~~ April 30, 2021and October 31, ~~2019,~~ 2020, respectively. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received.

Inventory

Inventory consists primarily of replacement parts for concrete pumping equipment. Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. The Company evaluates inventory and records an allowance for obsolete and slow- moving inventory to account for cost adjustments to market. Based on management’s analysis, no0 allowance for obsolete and slow-moving inventory was required as of ~~July 31, 2020~~ April 30, 2021or and October 31, ~~2019.~~2020.

11

Fair Value Measurements

The Financial Accounting Standard Board's (the “FASB”) standard on fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. This standard establishes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities.

Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

13

~~Table of Contents~~

Deferred financing costs

Deferred financing costs representing third-party, non-lender debt issuance costs are deferred and amortized using the effective interest rate method over the term of the related long-term-debt agreement, and the straight-line method for the revolving credit agreement.

Debt issuance costs, including any original issue discounts, related to term loans or senior notes are reflected as a direct deduction from the carrying amount of the long-term debt liability that is included in long term debt, net of discount for deferred financing costs in the accompanying consolidated balance sheets. Debt issuance costs related to revolving credit facilities are capitalized and reflected in deferred financing in the accompanying consolidated balance sheets.

12

Table of Contents
Goodwill

In accordance with ~~ASC~~Accounting Standards Codification ("ASC") Topic 350, Intangibles–Goodwill and Other (“ASC 350”), the Company evaluates goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses a two-step process to assess the realizability of goodwill. The first step is a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit. For example, the Company analyzes changes in economic, market and industry conditions, business strategy, cost factors, and financial performance, among others, to determine if there are indicators of a significant decline in the fair value of a particular reporting unit. If the qualitative assessment indicates a stable or improved fair value, no further testing is required. If a qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company will proceed to the quantitative second step where the fair value of a reporting unit is calculated based on weighted income and market-based approaches. If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded, not to exceed the carrying amount of goodwill in the reporting unit.
~~During the~~ As of ~~second~~April 30, 2021, no ~~quarter~~indicators of ~~fiscal year~~ ~~2020,~~ ~~the Company identified a triggering event from the recent decline in its stock price resulting from the COVID-~~19 ~~pandemic (“COVID-~~~~19”~~~~). As a result, the Company performed an interim step~~ ~~one~~ ~~goodwill~~ impairment ~~analysis in accordance with ASU~~ ~~2017~~-~~04,~~~~Intangibles — Goodwill and Other (ASC~~ ~~350~~~~): Simplifying the Test for Goodwill Impairment (“ASU~~ ~~2017~~-~~04”~~)~~. Refer to Note~~ 8 ~~for further discussion.~~have been identified.

Property, plant and equipment

Property, plant and equipment are recorded at cost. Expenditures for additions and betterments are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred; however, maintenance and repairs that improve or extend the life of existing assets are capitalized. The carrying amount of assets disposed of and the related accumulated depreciation are eliminated from the accounts in the year of disposal. Gains or losses from property and equipment disposals are recognized in the year of disposal. Property, plant and equipment is depreciated using the straight-line method over the following estimated useful lives:

In Years
Buildings and improvements
15 to 40
Capital lease assets—buildings
40
Furniture and office equipment
2 to 7
Machinery and equipment
3 to 25
Transportation equipment
3 to 7

Intangible assets
Intangible assets are recorded at cost or their estimated fair value (when acquired through a business combination) less accumulated amortization (if finite-lived).

Intangible assets with finite lives, except for customer relationships, are amortized on a straight-line basis over their estimated useful lives. Customer relationships are amortized on an accelerated basis over their estimated useful lives. Intangible assets with indefinite lives are not amortized but are subject to annual reviews for impairment. ~~As noted above, the Company identified a triggering event during the~~ ~~second~~ ~~fiscal quarter of~~ ~~2020~~ ~~from the recent decline in its stock price and elected to perform an interim impairment test on its indefinite-lived trade names. Refer to Note~~ 8 ~~for further discussion.~~

14

~~Table of Contents~~
Impairment of long-lived assets
ASC 360, Property, Plant and Equipment (ASC 360) requires other long-lived assets to be evaluated for impairment when indicators of impairment are present. If indicators are present, assets are grouped to the lowest level for which identifiable cash flows are largely independent of other asset groups and cash flows are estimated for each asset group over the remaining estimated life of each asset group. If the undiscounted cash flows estimated to be generated by those assets are less than the asset’s carrying amount, impairment is recognized in the amount of the excess of the carrying value over the fair value. ~~Based on the results of the Company’s analysis, long-lived assets were~~ ~~not~~No ~~impaired.~~ No indicators of impairment were identified as of ~~July 31, 2020.~~ April 30, 2021~~As noted above, the Company identified a triggering event during the~~ ~~second~~ ~~fiscal quarter of~~ ~~2020~~ ~~from the recent decline in its stock price and assessed its long-lived assets for impairment.~~.

Derivatives
The Company has public warrants outstanding and due to certain provisions in the warrant agreement, coupled with the Company's capital structure, which includes preferred stock with voting rights, the public warrants do not meet the criteria to be classified in stockholders’ equity and instead meet the definition of a liability-classified derivative under ASC Topic 815, Derivatives and Hedging ("ASC 815"). As such, the Company recognizes these warrants within long-term liabilities on the consolidated balance sheet at fair value, with subsequent changes in fair value recognized in the consolidated statement of income at each reporting date.
13

Table of Contents
Revenue recognition

The Company generates revenues primarily from concrete pumping services in both the U.S. and U.K. Additionally, revenue is generated from the Company’s waste management business which consists of service fees charged to customers for the delivery of its pans and containers and the disposal of the concrete waste material.

The Company recognizes revenue from these businesses when all of the following criteria are met: (a) persuasive evidence of an arrangement exists, (b) the service has been performed or delivery has occurred, (c) the price is fixed or determinable, and (d) collectability is reasonably assured. The Company’s delivery terms for replacement part sales are FOB shipping point.

The Company imposes and collects sales taxes concurrent with its revenue-producing transactions with customers and remits those taxes to the various governmental authorities as prescribed by the taxing jurisdictions in which it operates. The Company presents such taxes in its consolidated statement of operations on a net basis.

Stock-based compensation

The Company follows ASC 718, ~~Compensation—~~Compensation—Stock Compensation (“(“ASC ~~718”~~718”), which requires the measurement and recognition of compensation expense, based on estimated fair values, for all share-based awards made to employees and directors. The Company expenses the grant date fair value of the award in the consolidated statements of operations over the requisite service periods on a straight-line basis. The Company accounts for forfeitures as they occur in accordance with ASU No. 2016-09, ~~Compensation—~~Compensation—Stock Compensation (ASC 718): Improvements to Employee Share-Based Payment Accounting.

Income taxes

The Company complies with ASC 740, Income Taxes, which requires aan asset and liability approach to financial reporting for income taxes.

The Company computes deferred income tax assets and liabilities annually for differences between the financial statements and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, carryback opportunities, and tax planning strategies in making the assessment. Income tax expense includes both the current income taxes payable or refundable and the change during the period in the deferred tax assets and liabilities. The tax benefit from an uncertain tax position is only recognized in the consolidated balance sheet if the tax position is more likely than not to be sustained upon an examination.

~~The Company's U.K. Operations segment~~Camfaud files income tax returns in the U.K. ~~and~~Camfaud’s national statutes are generally open for one year following the statutory filing period.

15

~~Table of Contents~~

Foreign currency translation

The functional currency of Camfaud is the Pound Sterling (GBP). The assets and liabilities of the Company's foreign subsidiaries are translated into U.S. Dollars using the period end exchange rates for the periods presented, and the consolidated statements of operations are translated at the average exchange rate for the periods presented. The resulting translation adjustments are recorded as a component of comprehensive income on the consolidated statements of comprehensive income and accumulated in other comprehensive income. The functional currency of our other subsidiaries is the United States Dollar.

14

Table of Contents
Earnings per share

The Company calculates earnings per share in accordance with ASC 260, Earnings per Share. The two-class method of computing earnings per share is required for entities that have participating securities. The two-class method is an earnings allocation formula that determines earnings per share for participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. ~~The Company has~~For purposes of ASC 260, the two ~~classes of~~-class method is computed based on the following participating stock: (1) Common Stock ~~(comprised of shareholder owned common stock and shares of unvested restricted stock held by participating security holders)~~ and (2) ~~Participating Preferred~~Restricted Stock ~~(“Preferred Stock”).~~Awards.

Basic earnings (loss) per common share is calculated by dividing net income (loss) attributable to common shareholders by the weighted average number of shares of Common Stock outstanding each period. Diluted earnings (loss) per common share is based on the weighted average number of shares outstanding during the period plus the common stock equivalents which would arise from the exercise of stock options outstanding using the treasury stock method and the average market price per share during the period. Common stock equivalents are not included in the diluted earnings (loss) per share calculation when their effect is antidilutive.

An anti-dilutive impact is an increase in earnings per share or a reduction in net loss per share resulting from the conversion, exercise, or contingent issuance of certain securities.

Business combinations

The Company applies the principles provided in ASC 805, Business Combinations (“("ASC ~~805”~~805"), when a business is acquired. Tangible and intangible assets acquired and liabilities assumed are recorded at fair value and goodwill is recognized for any differences between the fair value of consideration transferred and the fair value of net assets acquired. Transaction costs for business combinations are expensed as incurred in accordance with ASC 805.

Concentrations

As of ~~July 31, 2020,~~ April 30, 2021and October 31, ~~2019,~~ 2020there were ~~two~~three significant vendors that the Company relied upon to purchase concrete pumping boom equipment. However, should the need arise, there are alternate vendors who can provide concrete pumping boom equipment.

Cash balances held at financial institutions may, at times, be in excess of federally insured limits. The Company places its temporary cash balances in high-credit quality financial institutions.

The Company’s customer base is dispersed across the U.S. and U.K. The Company performs ongoing evaluations of its customers’ financial condition and requires no collateral to support credit sales. During the ~~Predecessor and Successor~~ periods described above, no customer represented 10 percent or more of sales or trade receivables.

16

~~Table of Contents~~

Note 3. New Accounting Pronouncements

~~The Company has~~We have opted to take advantage of the extended transition period available to emerging growth companies pursuant to the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) for new accounting standards.

~~Newly adopted accounting pronouncements~~
In ~~January 2017,~~ ~~the FASB issued ASU~~ ~~No.~~~~2017~~-~~01,~~~~Business Combinations (ASC~~ ~~805~~~~): Clarifying the Definition of a Business~~ ~~(“ASU~~ ~~2017~~-~~01”~~~~), which provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU~~ ~~2017~~-01 ~~requires entities to use a screen test to determine when an integrated set of assets and activities is~~ ~~not~~ a business or if the integrated set of assets and activities needs to be further evaluated against the framework. The new standard will be applied prospectively to any transactions occurring within the period of adoption and is effective for entities other than public business entities for fiscal years beginning after ~~December 15, 2018,~~ ~~and interim periods within fiscal years beginning after~~ ~~December 15, 2019.~~ ~~The Company adopted this ASU in the~~ ~~first~~ ~~quarter of~~ ~~2020.~~ ~~As there have been~~ no ~~new business combinations, this ASU has~~ ~~not~~ ~~had an effect on the Company’s consolidated financial statements. The Company will continue to evaluate this ASU as new business combinations occur.~~
In ~~August 2016,~~ ~~the FASB issued ASU~~ ~~No.~~~~2016~~-~~15,~~~~Statement of Cash Flows (Topic~~ ~~230~~)~~: Classification of Certain Cash Receipts and Cash Payments (“ASU~~ ~~2016~~-~~15”~~~~) related to how certain cash receipts and payments are presented and classified in the statement of cash flows. These cash flow issues include debt prepayment or extinguishment costs, settlement of~~ ~~zero~~-coupon debt, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows. ASU ~~2016~~-15 ~~is effective for emerging growth companies in annual reporting periods beginning after~~ ~~December 15, 2018,~~ ~~and interim reporting periods within annual reporting periods beginning after~~ ~~December 15, 2019.~~ ~~The Company early adopted this ASU in the~~ ~~first~~ ~~quarter of~~ ~~2020~~ ~~on a retrospective basis and the adoption did~~ ~~not~~ ~~have a material impact on the consolidated financial statements.~~
Recently issued accounting pronouncements not yet effective

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606) (“ASU 2014-09”), which is a comprehensive new revenue recognition model.

Under ASU 2014-09 and the related clarifying ASUs, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. Following the issuance of ASU 2020-05 that deferred the effective date for certain companies, ASU 2014-09 is effective for emerging growth companies that have elected to use private company adoption dates in annual reporting periods beginning after December 15, ~~2019~~2018 and interim reporting periods within annual reporting periods beginning after December 15, ~~2020~~2019 and is to be adopted using either a full retrospective or modified retrospective transition method. The Company expects to adopt the guidance under the modified retrospective approach during the fourth quarter of the fiscal year ending October 31, 2021. The Company is currently evaluating the impact of the ~~pending~~ adoption of the new standard, including the review of revenue streams and related contracts, but does not expect a significant impact on the consolidated financial statements.

15

Table of Contents
In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which is codified in ASC 842, Leases (“ASC 842”) and supersedes current lease guidance in ASC 840, ~~Leases~~.Leases. ASC 842 requires a lessee to recognize a right-of-use asset and a corresponding lease liability for substantially all leases. The lease liability will be equal to the present value of the remaining lease payments while the right-of-use asset will be similarly calculated and then adjusted for initial direct costs. In addition, ASC 842 expands the disclosure requirements to increase the transparency and comparability of the amount, timing and uncertainty of cash flows arising from leases. In July 2018, the FASB issued ASU 2018-11, Leases ASC 8~~42:~~842: Targeted Improvements,, which allows entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

The new standard is effective for emerging growth companies that have elected to use private company adoption dates for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company plans to adopt the new standard effective for the year ending October 31, 2022. The Company is currently evaluating the impact of the pending adoption of the new standard on the consolidated financial statements.

17

~~Table of Contents~~
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), This ASU, 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. This ASU is effective for emerging growth companies that have elected to use private company adoption dates with annual and interim periods beginning after December 15, 2022, with early adoption permitted. The Company plans to adopt the new standard effective for the year ending October 31, 2022. The amendments of this ASU should be applied on a modified retrospective basis to all periods presented. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“(“ASU 2020-04”), which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”). Specifically, to the extent the Company's debt agreements are modified to replace LIBOR with another interest rate index, ASU 2020-04 will permit the Company to account for the modification as a continuation of the existing contract without additional analysis. Companies may generally elect to apply the guidance for periods that include March 12, 2020 through December 31, 2022. The Company is evaluating the anticipated impact of this standard on its condensed consolidated financial statements as well as timing of adoption.
~~Note~~ 4. ~~Business Combinations~~
~~May 2019~~ ~~Acquisition of Capital Pumping~~
On ~~May 15, 2019,~~ the Company acquired Capital Pumping, LP and its affiliates (“Capital”), a concrete pumping provider based in Texas for a purchase price of $129.2 million, which was paid using proceeds from the Company’s public offering of common stock and additional borrowings on its term loan facility. This acquisition qualified as a business combination under ASC ~~805.~~ Accordingly, the Company recorded all assets acquired and liabilities assumed at their acquisition-date fair values, with any excess recognized as goodwill. Goodwill recorded from the transaction represents expected synergies from combining operations and the assembled workforce.
The following table represents the final allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition-date fair values with any measurement-period adjustments included:
Consideration paid:
$ 129,218

Net assets acquired:

Current assets
$ 748
Intangible assets
45,500
Property and equipment
56,467
Liabilities assumed
(63 )
Total net assets acquired
102,652

Goodwill
$ 26,566
Identifiable intangible assets acquired consist of customer relationships of $40.0 million and a trade name valued at $5.5 million. The customer relationships were valued using the multi-period excess earnings method. The Company determined the useful life of the customer relationships to be 15 years. The trade name was valued using the relief-from-royalty method and the Company determined the trade name associated with Capital to be indefinite.

1816
Table of Contents
~~December 2018~~ ~~Acquisition of CPH~~

On ~~December 6, 2018,~~ ~~the Company consummated the Business Combination. This acquisition qualified as a business combination under ASC~~ ~~805.~~ Accordingly, the Company recorded all assets acquired and liabilities assumed at their acquisition-date fair values, with any excess recognized as goodwill. Goodwill recorded from the transaction represents the value provided by the Company’s leading market share in a highly-fragmented industry.
The following table represents the final allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition-date fair values with any measurement-period adjustments included (see paragraph below for any measurement-period adjustments included):
Consideration paid:

Cash
$ 445,386
Fair value of rollover equity
164,908
Net working capital adjustment
4,050
Total consideration paid
$ 614,344

Net assets acquired:

Current assets
$ 48,912
Intangible assets
208,063
Property and equipment
219,467
Liabilities assumed
(110,245 )
Total net assets acquired
366,197

Goodwill
$ 248,147
~~Note: Cash in table above is net of $1.0 million in cash acquired~~
Identifiable intangible assets acquired consist of customer relationships of $152.7 million and trade names of $55.4 million. The customer relationships were valued using the multi-period excess earnings method. The Company determined the useful life of the customer relationships to be 15 years. The trade names were valued using the relief-from-royalty method. The Company determined the useful life of the trade name associated with Camfaud to be 10 years. The Company determined the trade names associated with Brundage-Bone and Eco-Pan to be indefinite.
~~During the Successor period from~~ ~~December 6, 2018~~ ~~through~~ ~~October 31, 2019,~~ the Company recorded an out of period adjustment related to the reduction of sales tax accrual of $3.4 million that resulted in changes to goodwill and liabilities assumed in the transaction. The impact of the adjustment was ~~not~~ ~~considered material to the Company's previously issued financial statements.~~
~~CPH incurred transaction costs of $14.2 million and debt extinguishment costs of $16.4 million independently prior to the Business Combination.~~
Additional costs consisting of stock option and other compensation related expenses were recorded in connection with the Business Combination. These costs were solely contingent upon the completion of the business combination and did ~~not~~ ~~include any future service requirements. As such, these costs will be presented “on the line” and are~~ ~~not~~ reflected in either Predecessor or Successor financial statements. “On the line” describes those expenses triggered by the consummation of a business combination that were incurred by the acquiree, i.e. CPH, that are ~~not~~ ~~recognized in the Statement of Operations of either the Predecessor or Successor as they are~~ ~~not~~ ~~directly attributable to either period but instead were contingent on the Business Combination.~~
In conjunction with the Business Combination, there were $15.6 million of transaction bonuses and, as a result of a change in control provision for stock-based awards, certain unvested stock-based awards immediately vested, resulting in the recognition of compensation expense of approximately $0.6 million. These expenses were ~~not~~ ~~reflected in either the Predecessor or Successor consolidated statement of operations and comprehensive loss periods.~~
19

~~Table of Contents~~
~~Unaudited Pro Forma Financial Information~~
The following unaudited pro forma financial information presents the combined results of operations for the Company and gives effect to the CPH and Capital business combinations discussed above as if they had occurred on ~~November 1, 2018.~~ ~~The unaudited pro forma financial information is presented for illustrative purposes only and is~~ ~~not~~ ~~necessarily indicative of the results of operations that would have been realized if the CPH and Capital business combinations had been completed on~~ ~~November 1, 2018,~~ ~~nor does it purport to project the results of operations of the combined company in future periods. The unaudited pro forma financial information does~~ ~~not~~ ~~give effect to any anticipated integration costs related to the acquired company.~~
~~The unaudited pro forma financial information is as follows:~~
(in thousands)

Nine Months Ended July 31, 2020

Nine Months Ended July 31, 2019

Revenue
$ 225,111 $ 24,396
Pro forma revenue adjustments by Business Combination

Capital
0 26,829
CPH
0 174,613
Total pro forma revenue
$ 225,111 $ 225,838
(in thousands)

Nine Months Ended July 31, 2020

Nine Months Ended July 31, 2019

Net loss $ (58,733 ) $ (22,575 )
Pro forma net income (loss) adjustments by Business Combination

Capital
0 2,868
CPH
0 (10,513 )
Total pro forma net loss $ (58,733 ) $ (30,220 )
20

~~Table of Contents~~

Note 5.4.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.~~instruments. The Company’s outstanding obligations on its 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. The Company believes the carrying values of its capital lease obligations represent fair value.
Long-term debt instruments

The Company's long-term debt instruments are recorded at their carrying values in the 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~~long-term debt instruments at ~~July 31, 2020~~ April 30, 2021and at October 31, ~~2019~~ 2020is presented in the table below based on the prevailing interest rates and trading activity of the Term ~~loans.~~loans or Senior Notes.

July 31,

October 31,

April 30,

October 31,

2020

2019

2021

2020

(in thousands)

Carrying Value

Fair Value

Carrying Value

Fair Value

Carrying Value

Fair Value

Carrying Value

Fair Value

Term loans
$ 386,427 $ 359,377 $ 402,094 $ 394,052 $ 0 $ 0 $ 381,205 $ 365,003
Senior notes $ 375,000 $ 394,688 $ 0 $ 0
Capital lease obligations
500 500 568 568 $ 430 $ 430 $ 477 $ 477

Deferred consideration
In connection with the acquisition of Camfaud in November 2016, former Camfaud shareholders were eligible to receive earnout payments (“deferred consideration”) of up to $3.1 million if certain Earnings before interest, taxes, depreciation, and amortization ("EBITDA") targets were met. In accordance with ASC 805, the Company reviewed the deferred consideration on a quarterly basis in order to determine its fair value. Changes in the fair value of the liability are recorded within general and administrative expenses in the consolidated statement of income in the period in which the change was made. The Company estimated the fair value of the deferred consideration based on its probability assessment of Camfaud’s EBITDA achievements during the 3 year earnout period. In developing these estimates, the Company considered its revenue and EBITDA projections, its historical results, and general macro-economic environment and industry trends. This fair value measurement was based on significant revenue and EBITDA inputs not observed in the market, which represents a Level 3 measurement. The ~~fair value of the~~$1.7 million in deferred consideration was ~~$1.7 million at~~ ~~October 31, 2019,~~ ~~which also represented the date at which the~~ 3~~-year earnout period ended. The deferred consideration was~~fully paid out during the ~~fiscal~~ ~~2020~~first quarter of fiscal 2020. In accordance with US GAAP, the related cash outflows are reflected in the statement of cash flows with $1.2 million being included in financing activities, reflecting the payment of contingent consideration that was originally established in purchase accounting, and the remaining $0.5 million being included in operating activities, reflecting the payment amount that is in excess of the contingent consideration that was originally established in purchase accounting.
17
Table of Contents
Warrants
At both October 31, 2020 and 2019, there were 13,017,777 public warrants and no private warrants outstanding. Each warrant entitles its holder to purchase one share of Class A common stock at an exercise price of $11.50 per share. The warrants expire on December 6, 2022, or earlier upon redemption or liquidation. The Company may call the outstanding public warrants for redemption at a price of $0.01 per warrant, if the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day before the Company sends the notice of redemption to the warrant holders.
The Company accounts for the public warrants issued in connection with its IPO in accordance with ASC 815, under which certain provisions in the public warrant agreements do not meet the criteria for equity classification and therefore these warrants must be recorded as ~~such,~~liabilities. The fair value of each public warrant is based on the ~~liability 0 longer exists at~~public trading price of the warrant (Level ~~July 31, 2020.~~1 fair value measurement). Gains and losses related to the warrants are reflected in the change in fair value of warrant liabilities in the consolidated statements of operations.
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.
21

~~Table of Contents~~

Note 6.5. Prepaid Expenses and Other Current Assets

The significant components of prepaid expenses and other current assets at ~~July 31, 2020~~ April 30, 2021and at October 31, ~~2019~~ 2020are comprised of the following:

July 31,

October 31,

April 30,

October 31,

(in thousands)

2020

2019

2021

2020

Prepaid insurance
$ 3,358 $ 1,416 $ 4,186 $ 1,399
Prepaid licenses and deposits
363 528 715 429
Prepaid rent
533 485 476 149
Other prepaids
377 949
Other current assets and prepaids 1,827 717
Total prepaid expenses and other current assets
$ 4,631 $ 3,378 $ 7,204 $ 2,694

Note 7.6. Property, Plant and Equipment

The significant components of property, plant and equipment at ~~July 31, 2020~~ April 30, 2021and at October 31, ~~2019~~ 2020are comprised of the following:

July 31,

October 31,

April 30,

October 31,

(in thousands)

2020

2019

2021

2020

Land, building and improvements
$ 26,682 $ 26,085 $ 26,890 $ 26,728
Capital leases—land and buildings
828 828 828 828
Machinery and equipment
311,903 295,741 329,787 318,029
Transportation equipment
2,213 2,223 2,513 2,338
Furniture and office equipment
1,184 1,209 2,398 1,230
Property, plant and equipment, gross
342,810 326,086 362,416 349,153
Less accumulated depreciation
(36,914 ) (18,671 ) (57,551 ) (44,899 )
Property, plant and equipment, net
$ 305,896 $ 307,415 $ 304,865 $ 304,254

Depreciation expense for the three and ~~nine~~six-month periods ended ~~July 31, 2020~~ April 30, 2021was ~~$6.5~~$7.1 million and ~~$19.5~~$14.0 million, respectively. Depreciation expense for the ~~Successor for the~~ three and six-month ~~period~~periods ended ~~July 31, 2019~~ April 30, 2020~~and the period from~~ ~~December 6, 2018~~ to ~~July 31, 2019~~ was ~~$5.5~~$6.5 million and ~~$14.1~~$13.0 million, respectively. ~~Depreciation expense for the Predecessor from~~ ~~November 1, 2018~~ to ~~December 5, 2018~~ ~~was $2.1 million.~~ Depreciation expense related to revenue producing machinery and equipment is recorded in cost of operations and an immaterial amount of depreciation expense related to ~~the Company's~~our capital leases and furniture and fixtures is included in general and administrative expenses.

2218

Table of Contents

Note 8.7. Goodwill and Intangible Assets

The Company recognized goodwill and certain intangible assets in connection with business ~~combinations (see Note~~ 4 ~~- Business Combinations).~~combinations.

During the second quarter of fiscal ~~year~~ 2020, the Company identified a triggering event resulting from ~~the recent~~a sustained decline in its stock price and deterioration in general economic conditions resulting from COVID-19. As a result, the Company, with the assistance of a third party valuation specialist, performed an interim impairment test on its indefinite-lived trade name intangible assets and goodwill as of April 30, 2020.

The valuation methodology used to value the trade-names was based on the relief-from-royalty method which is an income based measure that derives the value from total revenue growth projected and what percentage is attributable to the trade name. As a result of the analysis, the Company identified that the fair value of its Brundage-Bone Concrete Pumping trade name was approximately 11.8% below its carrying value and as such, recorded a non-cash impairment charge of $5.0 million in intangibles impairment ~~in its consolidated statements of operations for both the~~ ~~three~~ ~~and~~ ~~six~~~~-month periods ended~~on April 30, 2020.~~The impaired trade name has a remaining value of $37.3 million as of~~ ~~July 31, 2020.~~ In addition, the Company concluded that the fair values of its Eco-Pan and Capital Pumping trade names exceeded their carrying values by approximately 7.8% and 109.1%, respectively, and their remaining values are $7.7 million and $5.5 million as of ~~July 31, 2020,~~ ~~respectively.~~

The goodwill impairment test was performed on the Company’s U.S. Concrete Pumping, U.S. Concrete Waste Management Services, and U.K. Operations reporting units. The valuation methodologies used to value the reporting units included the discounted cash flow method (income approach) and the guideline public company method (market approach). As a result of the goodwill impairment analysis, the Company identified that the fair values of its U.S. Concrete Pumping and U.K. Operations reporting units were approximately 6.9% and 14.8% below their carrying values, respectively. As such, the Company recorded non-cash impairment charges of $38.5 million and $14.4 million to its U.S. Concrete Pumping and U.K. Operations reporting units, respectively, in goodwill impairment ~~in its consolidated statements of operations for both the~~ ~~three~~ ~~and~~ ~~six~~~~-month periods ended~~on April 30, 2020.In addition, the Company concluded that the fair value of its U.S. Concrete Waste Management Services reporting unit exceeded its carrying value by approximately 4.5% and, as such, 0 impairment charge was recorded.

The factors leading to the impairment of the Company's goodwill and intangibles were primarily due to (1) lower anticipated future net revenues and earnings in its estimate of future cash flows resulting from COVID-19 and (2) a higher discount rate applied to future cash flows as a result of uncertainties of the overall economic impact from COVID-19. There is inherent uncertainty associated with key assumptions used by the Company in its impairment analyses including the duration of the economic downturn associated with COVID-19 and the recovery period.

There were no triggering events during the fiscal ~~2020~~2021 ~~third~~first ~~quarter.~~and second quarters. The Company will continue to evaluate its goodwill and intangible assets in future quarters. Additional impairments may be recorded based on events and circumstances, including those related to COVID-19 discussed in Note 1.

The following table summarizes the composition of intangible assets at ~~July 31, 2020~~ April 30, 2021and at October 31, ~~2019:~~2020:

July 31,

October 31,

April 30,

October 31,

2020

2019

2021

2020

Gross

Foreign Currency

Net

Gross

Foreign Currency

Net

Gross

Foreign Currency

Net

Gross

Foreign Currency

Net

Carrying

Accumulated

Translation

Carrying

Carrying

Accumulated

Translation

Carrying

Carrying
Accumulated

Translation

Carrying

Carrying

Accumulated

Translation

Carrying

(in thousands)

Value

Impairments

Amortization

Adjustment

Amount

Value

Amortization

Adjustment

Amount

Value

Impairment

Amortization

Adjustment

Amount

Value

Impairment

Amortization

Adjustment

Amount

Customer relationship
$ 193,913 $ 0 $ (56,721 ) $ (216 ) $ 136,976 $ 193,594 $ (31,861 ) $ (62 ) $ 161,671 $ 195,069 $ 0 (78,223 ) $ (666 ) $ 116,180 $ 193,585 $ 0 $ (64,676 ) $ (106 ) $ 128,803
Trade name
5,516 0 (883 ) (29 ) 4,604 5,434 (483 ) (7 ) 4,944 5,812 0 (1,306 ) (91 ) 4,415 5,432 0 (1,020 ) (14 ) $ 4,398
Trade name (indefinite life)
55,500 (5,000 ) - - 50,500 55,500 - - 55,500 55,500 (5,000 ) - 0 50,500 55,500 (5,000 ) - 0 $ 50,500
Noncompete agreements
200 0 (52 ) 0 148 200 (22 ) 0 178 200 0 (82 ) 0 118 200 0 (62 ) 0 $ 138
Total intangibles
$ 255,129 $ (5,000 ) $ (57,656 ) $ (245 ) $ 192,228 $ 254,728 $ (32,366 ) $ (69 ) $ 222,293 $ 256,581 $ (5,000 ) $ (79,611 ) $ (757 ) $ 171,213 $ 254,717 $ (5,000 ) $ (65,758 ) $ (120 ) $ 183,839

2319
Table of Contents

Amortization expense for the three and ~~nine~~six-month periods ended ~~July 31, 2020~~ April 30, 2021was ~~$8.1~~$7.0 million and ~~$25.3~~$13.9 million, respectively. Amortization expense for the ~~Successor for the~~ three and six-month ~~period~~periods ended ~~July 31, 2019~~ April 30, 2020~~and the period from~~ ~~December 6, 2018~~ to ~~July 31, 2019~~ was ~~$10.4~~$8.6 million and ~~$22.2~~$17.1 million, respectively. ~~Amortization expense for the Predecessor from~~ ~~November 1, 2018~~ to ~~December 5, 2018~~ ~~was $0.7 million.~~ The estimated aggregate amortization expense for intangible assets over the next five fiscal years ending October 31 and thereafter is as follows:

(in thousands)

2020 (excluding the period from November 1, 2019 to July 31, 2020)
$ 8,077
2021
26,831
2021 (excluding the period from November 1, 2020 to April 30, 2021) $ 13,168
2022
21,589 21,747
2023
17,159 17,292
2024
13,779 13,892
2025 11,245
Thereafter
54,293 43,369
Total
$ 141,728 $ 120,713

The changes in the carrying value of goodwill by reportable segment for the quarter ended ~~July 31, 2020~~ April 30, 2021are as follows:

(in thousands)

U.S. Concrete Pumping

U.K. Operations

U.S. Concrete Waste Management Services

Corporate

Total

Balance at October 31, 2019
$ 185,782 $ 41,173 $ 49,133 $ 0 $ 276,088
Measurement-period adjustments
200 0 0 0 200
Impairments
(38,500 ) (14,444 ) 0 0 (52,944 )
Foreign currency translation
0 221 0 0 221
Balance at July 31, 2020
$ 147,482 $ 26,950 $ 49,133 $ 0 $ 223,565
(in thousands)

U.S. Concrete Pumping

U.K. Operations

U.S. Concrete Waste Management Services

Corporate

Total

Balance at October 31, 2020
$ 147,482 $ 26,539 $ 49,133 $ 0 $ 223,154
Foreign currency translation 0 1,858 0 0 1,858
Balance at April 30, 2021 $ 147,482 $ 28,397 $ 49,133 $ 0 $ 225,012

2420
Table of Contents

Note 9.8. Long Term Debt and Revolving Lines of Credit
~~Successor~~
~~As part of the Business Combination, the Predecessor’s Revolver, U.K. Revolver, Senior secured notes,~~On January 28, 2021, Brundage-Bone Concrete Pumping Holdings Inc., a Delaware corporation (the “Issuer”) and ~~Seller notes (see Predecessor section below for~~ a ~~discussion of these agreements) were all extinguished and the Company entered into (i) a term loan agreement, dated~~ ~~December 6, 2018,~~ ~~among the Company, certain subsidiaries~~wholly-owned subsidiary of the Company ~~Credit Suisse AG, Cayman Islands Branch as administrative agent and Credit Suisse Loan Funding LLC, Jefferies Finance LLC and Stifel Nicolaus &~~(i) completed a private offering of $375.0 million in aggregate principal amount of its 6.000% senior secured second lien notes due 2026 (the “Senior Notes”) issued pursuant to an indenture, among the Issuer, the Company, ~~Incorporated LLC as joint lead arrangers and joint bookrunners, and~~ the other ~~Lenders party thereto~~Guarantors (as defined below), Deutsche Bank Trust Company Americas, as trustee and as collateral agent (the ~~“Term Loan Agreement”~~"Indenture") and (ii) ~~a Credit Agreement, dated~~ ~~December 6, 2018,~~ entered into an amended and restated ABL Facility (the "ABL Facility") by and among the Company, certain subsidiaries of the Company, Wells Fargo Bank, National Association, as agent, sole lead arranger and sole bookrunner, the other Lenders party thereto, which provided up to $125.0 million of asset-based revolving loan commitments to the Company and the other ~~parties thereto (“ABL Credit Agreement”). In addition, in order to finance the acquisition of Capital, the Company added~~ ~~$60.0~~ ~~million of incremental term loans~~borrowers under the ~~Term Loan Agreement in~~ABL Facility. The proceeds from the Senior Notes, along with certain borrowings under the ABL Facility, were used to repay all outstanding indebtedness under the Company’s existing term loan agreement (see discussion below), dated ~~May 2019.~~December 6, 2018, and pay related fees and expenses. Summarized terms of these facilities are included below.
~~Term Loan Agreement~~Senior Notes

Summarized terms of the ~~Term Loan Agreement~~Senior Notes are as follows:

●
Provides for an original aggregate principal amount of ~~$357.0 million. This amount was increased in~~ ~~May 2019~~ $375.0~~by $60.0 million in connection with the acquisition of Capital;~~ million;
●
The ~~initial term loans advanced~~Senior Notes will mature and be due and payable in full on ~~seven~~February 1, 2026; ~~years after the Closing Date, with principal amortization payments in an annual amount equal to 5.00% of the original principal amount;~~
●
~~Borrowings under the Term Loan Agreement, will bear interest at either (~~1~~) an adjusted LIBOR rate or (~~2~~) an alternate base rate, plus an applicable margin of 6.00% or 5.00%, respectively;~~
●
The ~~Term Loan Agreement is secured by (i)~~Senior Notes bear interest at a rate of ~~first~~6.000% ~~priority perfected lien~~per annum, payable on ~~substantially all~~ February 1 and August 1 of ~~the assets of the Company and certain of its subsidiaries that are loan parties thereunder to the extent~~ ~~not~~ ~~constituting ABL Credit Agreement priority collateral and (ii) a~~ ~~second~~ ~~priority perfected lien on substantially all ABL Credit Agreement priority collateral, in~~ each ~~case subject to customary exceptions and limitations;~~year;
●
The ~~Term Loan Agreement~~Senior 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 are borrowers and certain of the guarantors under the ABL Facility (collectively, the "Guarantors"). The Senior Notes and the guarantees are secured on a second-priority basis by all the assets of the Issuer and the Guarantors that secure the obligations under the ABL Facility, subject to certain exceptions. The Senior Notes and the guarantees will be the Issuer’s 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 indebtedness and liabilities of the Company’s subsidiaries that do not guarantee the Senior Notes;
●
The Indenture includes certain ~~non-financial covenants.~~covenants that limit, among other things, the Issuer’s ability and the ability of its restricted subsidiaries to: incur additional indebtedness and issue certain preferred stock; make certain investments, distributions and other restricted payments; create or incur certain liens; 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 ~~balance under the Term Loan Agreement~~principal amount of Senior Notes as of ~~July 31, 2020~~ April 30, 2021was ~~$386.4~~$375.0 million and as of that date, the Company was in compliance with all ~~debt covenants. The Company’s interest on borrowings~~covenants under the Term Loan Agreement bear interest using the London Interbank Offered Rate (LIBOR) as the base rate plus an applicable margin in line with the summarized terms of the Term Loan Agreement as described above.Indenture.
~~Future maturities of the term loans for fiscal years ending~~ ~~October 31~~ ~~and thereafter is as follows:~~
(in thousands)

2020 (excluding the period from November 1, 2019 to July 31, 2020)
$ 5,222
2021
20,888
2022
20,888
2023
20,888
2024
20,888
Thereafter
297,653
Total
$ 386,427

2521

Table of Contents

ABL ~~Credit Agreement~~Facility

~~Summarized~~A comparison of terms of the ABL ~~Credit Agreement~~Facility before and immediately after the amendment are as follows:

Dated December 6, 2018

●As of January 28, 2021
Borrowing availability in U.S. Dollars and GBP up to a maximum of $60.0 million;
●Borrowing availability in U.S. Dollars and GBP up to a maximum of $125.0 million and an accordion feature under which the Company can increase the ABL Facility by up to an additional $75.0 million;
Borrowing capacity available for standby letters of credit of up to $7.5 million and for swing loan borrowings of up to $7.5 million. Any issuance of letters of credit or making of a swing loan will reduce the amount available under the ABL Facility;
Same;
All loans advanced will mature and be due and payable in full on December 6, 2023;
●
All loans advanced will mature and be due and payable in full on ~~five~~January 28, 2026; ~~years after the Closing Date;~~
●
Amounts borrowed may be repaid at any time, subject to the terms and conditions of the agreement;
●Same;
Borrowings in U.S. Dollars and GBP ~~under the ABL Credit Agreement will~~ bear interest at either (1) an adjusted LIBOR rate or (2) a base rate, in each case plus an applicable margin currently set at 2.25% and 1.25%, respectively. The ABL ~~Credit Agreement~~Facility is subject to two step-downs of 0.25% and 0.50% based on excess availability levels;
●Borrowings in U.S. Dollars and GBP bear interest at either (1) an adjusted LIBOR rate or (2) a base rate, in each case plus an applicable margin currently set at 2.0% and 1.00% per annum, respectively. The ABL Facility is subject to a step-down of 0.25% based on excess availability levels;
U.S. ABL ~~Credit Agreement~~Facility obligations will be secured by (i) a perfected first priority security interest in substantially all personal property of the Company and certain of its subsidiaries that are loan parties thereunder consisting of all accounts receivable, inventory, cash, intercompany notes, books and records, chattel paper, deposit, securities and operating accounts and all other working capital assets and all documents, instruments and general intangibles related to the foregoing (the “U.S. ABL Priority Collateral”) and (ii) a perfected second priority security interest in substantially all Term Loan Agreement priority collateral, in each case subject to customary exceptions and limitations;
●US ABL Facility obligations will be secured by a first-priority perfected security interest in substantially all the assets of the Issuer, together with Brundage-Bone Concrete Pumping, Inc., Eco-Pan, Inc., Capital Pumping LP (collectively, the "US ABL Borrowers") and each of the Company's wholly-owned domestic subsidiaries (the "US ABL Guarantors"), subject to certain exceptions;
U.K. ABL ~~Credit Agreement~~Facility obligations will be secured by (i) a perfected first-priority security interest in (A) the U.S. ABL Priority Collateral, (B) all of the stock (or other ownership interests) in, and held by, the U.K. borrower subsidiaries of the Company, and (C) all of the current and future assets and property of the U.K subsidiaries of the Company that are loan parties thereunder, including a first-ranking floating charge over all current and future assets and property of each U.K. subsidiary of the Company that is a loan party thereunder; and (ii) a perfected, second-priority security interest in substantially all Term Loan Agreement priority collateral, in each case subject to customary exceptions and limitations; and
●UK ABL Facility obligations will be secured by a first priority perfected security interest in substantially all assets of Camfaud Concrete Pumps Limited and Premier Concrete Pumping Limited, each of the Company's wholly-owned UK subsidiaries, and by each of the US ABL Borrowers and the US ABL Guarantors, subject to certain exceptions;
The ABL ~~Credit Agreement~~Facility also includes (i) a springing financial covenant (fixed charges coverage ratio) based on excess availability levels that the Company must comply with on a quarterly basis during required compliance periods and (ii) certain non-financial covenants.
Same.

The outstanding balance under the amended ABL ~~Credit Agreement~~Facility as of ~~July 31, 2020~~ April 30, 2021was ~~$13.0~~$1.1 million and as of that date, the Company was in compliance with all debt covenants.

~~Predecessor~~
~~Revolving line of credit~~
~~The Predecessor had a revolving loan agreement (the "Revolver"). Summarized terms of the Revolver were as follows:~~
●
~~Maximum borrowing capacity of $65.0 million with a maturity date of~~ ~~September 8, 2022;~~
●
Borrowings bear interest at the LIBOR rate plus an applicable margin that resets quarterly and is (a) 2.00%, (b) 2.25% or (c) 2.50% if the quarterly average excess availability is (a) at least 66.67%, (b) less than 66.67% and at least 33.33% and (c) less than 33.33%, respectively;
●
~~Interest is due monthly and the outstanding principal balance was due upon maturity;~~
●
On ~~October 2, 2017,~~ ~~$35.0 million of the Revolver balance was transferred to a~~ 3~~-month line of credit with a separate LIBOR interest rate; and~~
●
~~Required Predecessor to maintain a maximum ratio of total fixed charges.~~
2622

Table of Contents

~~U.K. Revolver~~Term Loan Agreement
~~The Predecessor had a revolving loan agreement (the “U.K. Revolver”) associated with the acquisition of Camfaud in~~ ~~November 2016.~~ The U.K. Revolver had a maximum borrowing capacity of approximately $28.0 million and bore interest at LIBOR plus 2.00%. The U.K. Revolver required the Predecessor maintain a maximum ratio of total fixed charges.
~~Senior secured notes~~
In ~~August 2014,~~ ~~the Predecessor issued $140.0 million in senior secured notes through a high-yield bond offering under SEC Rule~~ ~~144A~~ ~~(“Senior Notes”). In~~ ~~November 2016,~~ ~~the Predecessor issued additional senior secured notes of $40.0 million as an incremental borrowing with the same terms and form as the original Senior Notes.~~

Summarized terms of the ~~Senior Notes were~~Term Loan Agreement are as follows:

●
~~Maturity date on~~Provides for an original aggregate principal amount of $357.0 million. This amount was increased in ~~September 1, 2021.~~May 2019 ~~Principal due upon maturity;~~by $60.0 million in connection with the acquisition of Capital;
●
~~Interest rate of 10.375% per annum, payments due every~~ ~~March 1~~ ~~and~~ ~~September 1~~ ~~commencing~~ ~~March 1, 2015;~~
●
The ~~Senior Notes were~~initial term loans advanced will mature and be due and payable in full seven years after the Closing Date, with principal amortization payments in an annual amount equal to 5.00% of the original principal amount;
●
Borrowings under the Term Loan Agreement, will bear interest at either (1) an adjusted LIBOR rate or (2) an alternate base rate, plus an applicable margin of 6.00% or 5.00%, respectively;
●
The Term Loan Agreement is secured by (i) a first priority perfected lien on substantially all of the assets of the Company and ~~contain various~~certain of its subsidiaries that are loan parties thereunder to the extent not constituting ABL Facility priority collateral and (ii) a second priority perfected lien on substantially all ABL Facility priority collateral, in each case subject to customary exceptions and limitations;
●
The Term Loan Agreement includes certain non-financial covenants.

~~Over the period of~~ ~~January 2016~~ ~~through~~ ~~September 2017,~~ ~~the Predecessor repurchased and retired approximately $26.0 million, in the aggregate, of principal of the Senior Notes.~~
In ~~September 2017,~~ ~~the Predecessor completed an exchange of substantially~~As discussed above, all outstanding ~~existing Senior Notes for newly issued senior secured notes (“New Senior Notes”). The terms of the New Senior Notes were identical to the Senior Notes except that the maturity date was extended to~~ ~~September 1, 2023.~~
In ~~April 2018,~~ the Predecessor issued additional New Senior Notes with a principal amount of $15.0 million at a 104 percent premium for a total purchase price of $15.6 million. The $0.6 million was recorded by the Predecessor as a debt premium and was amortized over the life of the New Senior Notes using the effective interest method.
~~Seller notes~~
~~In connection with the acquisitions of the Camfaud and Reilly Concrete Pumping Limited (“Reilly”) in~~ ~~November 2016~~ ~~and~~ ~~July 2017,~~ respectively, the Predecessor entered into separate loan agreements with the former owners of Camfaud and Reilly for $6.2 million and $1.9 million, respectively (collectively, the “Seller Notes”). The Seller Note with respect to Camfaud bore interest at 5.0% per annum and all principal plus accrued interest was due upon the earlier of; (1) 6 ~~months after the U.K. Revolver is repaid in full, (~~2) 42 ~~months after the acquisition date (~~ ~~May 2020)~~ ~~or (~~3~~) the date on which the Predecessor suffers an insolvency event. The Seller Note with respect to Reilly bore interest at 5.0% per annum and all principal plus accrued interest are due~~ ~~three~~ ~~years after the acquisition date (~~ ~~July 2020).~~ ~~The Seller Notes were unsecured.~~
~~In connection with the Business Combination, the Company repaid its existing credit facilities in full and replaced them with~~borrowings under the Term Loan Agreement ~~and~~were repaid on January 28, 2021. The pay-off of the term loan were treated as a debt extinguishment while the amended ABL ~~Credit Agreement. The~~facility was treated as a debt modification. In accordance with debt extinguishment accounting rules, the Company ~~also incurred an aggregate of $16.4~~recorded $15.5 million ofin debt extinguishment costs related to the ~~extinguishment of its existing debts, including the~~ write-off of all unamortized ~~borrowing~~deferred debt issuance costs that were related to the term loan and ~~an early extinguishment fee paid~~capitalized $7.0 million of debt issuance costs related to ~~its lenders. The amount has been reflected as~~the Senior Notes. For the amendments to the ABL Facility, the Company capitalized $1.5 million of debt ~~extinguishment costs in the Predecessor’s consolidated statement of income for the period ended~~ ~~December 5, 2018.~~issuance costs.

27

~~Table of Contents~~
The table below is a summary of the composition of the Company’s ~~long-term~~ debt balances at ~~July 31, 2020~~ April 30, 2021and at October 31, ~~2019.~~2020.

July 31,

October 31,

(in thousands)

2020

2019

Short term portion of term loan
$ 20,888 $ 20,888
Long term portion of term loan
365,539 381,206
Total term loan
386,427 402,094
Less unamortized deferred financing costs
(17,356 ) (20,268 )
Total debt
$ 369,071 $ 381,826

April 30,

October 31,

(in thousands)

2021

2020

Revolving loan (short term) $ 1,087 $ 1,741
Short term portion of term loan
0 20,888
Long term portion of term loan
0 360,317
Senior notes - all long term 375,000 0
Total debt, gross
376,087 382,946
Less unamortized deferred financing costs offsetting long term debt (6,612 ) (16,411 )
Total debt, net of unamortized deferred financing costs $ 369,475 $ 366,535
23
Table of Contents

Note ~~10.~~9. Accrued Payroll and Payroll Expenses

The following table summarizes accrued payroll and expenses at ~~July 31, 2020~~ April 30, 2021and at October 31, ~~2019:~~2020:

July 31,

October 31,

April 30,

October 31,

(in thousands)

2020

2019

2021

2020

Accrued vacation
$ 3,468 $ 4,638 $ 1,992 $ 1,667
Accrued payroll 1,603 1,507
Accrued bonus
3,502 3,177 2,183 4,752
Other accrued 4,213 1,362 5,060 5,139
Total accrued payroll and payroll expenses $ 11,183 $ 9,177 $ 10,838 $ 13,065

Note ~~11.~~10. Accrued Expenses and Other Current Liabilities

The following table summarizes accrued expenses and other current liabilities at ~~July 31, 2020~~ April 30, 2021and at October 31, ~~2019:~~ 2020:

July 31,

October 31,

April 30,

October 31,

(in thousands)

2020

2019

2021

2020

Accrued insurance
$ 8,397 $ 6,105 $ 9,792 $ 7,806
Accrued interest
2,543 3,049 5,750 146
Accrued equipment purchases
2,397 15,343 956 4,149
Accrued sales and use tax
311 311 1,535 311
Accrued property taxes
723 915 532 882
Accrued professional fees
1,949 1,729 860 1,213
Accrued due to related party (refer to Note 12) 2,000 0
Accrued due to related party 40 1,765
Other
3,173 654 2,153 2,607
Total accrued expenses and other liabilities
$ 21,493 $ 28,106 $ 21,618 $ 18,879

28

~~Table of Contents~~

Note ~~12.~~11. Income Taxes

For the ~~third~~second fiscal quarter ended ~~July 31, 2020,~~ April 30, 2021, the Company recorded an income tax ~~benefit~~expense of ~~$0.5~~$0.2 million on a pretax ~~income~~loss of ~~$2.5~~$10.7 million. For the same quarter a year ago, the Company recorded an income tax benefit of ~~$1.9~~$2.2 million on a pretax ~~income~~loss of ~~$0.8~~$57.9 million.
For the first ~~nine~~six months of ~~fiscal~~ ~~2020,~~2021, the Company recorded an income tax benefit of ~~$3.8~~$2.5 million on a pretax loss of ~~$62.6~~$25.6 million. For the ~~Successor~~same period ~~from~~ ~~December 6, 2018~~ to ~~July 31, 2019,~~ a year ago, the Company recorded an income tax benefit of ~~$3.1~~$3.4 million on a pretax loss of ~~$13.6~~$62.2 million. ~~For the Predecessor period from~~ ~~November 1, 2018~~ to ~~December 5, 2018,~~ ~~the Company recorded an income tax benefit of $4.2 million on a pretax loss of $26.8 million. The effective tax rates for the periods presented were~~ ~~not~~ ~~meaningful.~~
~~The factors impacting comparability between our effective tax rates for the periods discussed above are as follows:~~
(1)
~~For the period ended~~ ~~December 5, 2018,~~ ~~the Predecessor recorded nondeductible transaction related costs that resulted in a $1.4 million permanent tax difference;~~
(2)
~~The Successor included $0.2 million of tax benefit in the estimated annual effective rate for the period ended~~ ~~July 31, 2019~~ ~~related to foreign income inclusions compared to $0.3 million of tax expense for the period ended~~ ~~July 31, 2020~~ ~~and $0.0 for the Predecessor period ended~~ ~~December 5, 2018;~~
(3)
~~The Successor included $0.9 million of tax expense related to the increase in the deferred statutory U.K. corporate tax rate from 17% to 19% in the period ended~~ ~~July 31, 2020~~
(4)
~~Of the $57.9 million of impairments recorded for goodwill and intangibles by the Company during the~~ ~~second~~ ~~quarter of fiscal~~ ~~2020,~~ ~~only $11.9 million was deductible for tax purposes ($2.9 million tax benefit to the Company) as the remaining impairment was related to nondeductible goodwill;~~
(5) ~~The Successor included a tax benefit of $1.4 million in the period ended~~ ~~July 31, 2020~~ related to write-up in the carrying value of certain net operating losses (“NOL”) carryforwards as it was determined that those NOLs would be carried back to prior years pursuant to the provisions included in the CARES Act (see below for further details);
(6) ~~For the period ended~~ ~~July 31, 2020,~~ ~~the Successor recorded nondeductible expenses related to a contingent liability (see discussion below for further detail) that resulted in a $0.4 million permanent tax difference; and~~
(7)
~~Changes in our~~ ~~estimated~~ ~~full year income before tax and the related impact on our estimated full year effective tax rate that was applied to year to date losses for the Successor periods ended~~ ~~July 31, 2020~~ ~~and~~ ~~2019.~~

At ~~July 31, 2020~~ April 30, 2021and October 31, ~~2019,~~ 2020, we had deferred tax liabilities, net of deferred tax assets, of ~~$69.3~~$65.6 million and ~~$69.0~~$68.0 million, respectively. The decrease in our net deferred tax liability is primarily due to current year operating results and reversal of existing deferred tax assets and liabilities during the period ended April 30, 2021. The Company has a valuation allowance of $0.1 million as of both ~~July 31, 2020~~ April 30, 2021and October 31, ~~2019~~ 2020related to foreign tax credit carryforwards where realization is more uncertain at this time due to the limited carryforward periods that exist.

The Company had unrecognized tax benefits of ~~$1.6~~$1.5 million and ~~$1.7~~$1.6 million as of ~~July 31, 2020~~ April 30, 2021and October 31, ~~2019,~~ 2020, respectively. If recognized, none of these benefits would favorably impact the Company's income tax expense.

On ~~March 17, 2020,~~ ~~the House of Commons in the U.K. passed a Budget Resolution under the Provisional Collection of Taxes Act of~~ ~~1968~~ ~~(the “Budget Resolution”). The Budget Resolution substantively enacted an increase in the U.K. corporate tax rate for tax periods after~~ ~~March 31, 2020~~ from 17% to 19%. As a result of the Budget Resolution, the Company recorded tax expense of $0.9 million related to the remeasurement of deferred tax assets and liabilities to reflect the increase in the U.K. corporate tax rate.
2924
Table of Contents

On ~~March 27, 2020,~~ President Trump signed the Coronavirus Aid, Relief, and Economic Security “CARES” Act into law. The CARES Act includes several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses (“NOL”) and allow businesses to carry back NOLs arising in ~~2018,~~~~2019~~ ~~and~~ ~~2020~~ ~~to the~~ ~~five~~ ~~prior years, accelerate refunds of previously generated corporate alternative minimum tax credits, generally loosen the business interest limitation under IRC section~~ ~~163~~~~(j) from~~ 30 ~~percent to~~ 50 percent among other technical corrections included in the Tax Cuts and Jobs Act tax provisions. The Company has performed the analysis of the CARES Act and with the exception of carrying back certain NOLs discussed in the paragraph below, the Company has concluded that there is no ~~impact as of~~ ~~July 31, 2020.~~ ~~The Company will continue to evaluate how the CARES Act~~ ~~may~~ ~~impact future periods. Also, refer to Note~~ ~~13.~~
~~During fiscal years~~ ~~2016~~ ~~and~~ ~~2017,~~ ~~the Company paid federal income taxes totaling $4.3 million (at a federal income tax rate of~~ ~~34%~~~~). As the Company generated NOL carryforwards during fiscal~~ ~~2018~~ ~~and~~ ~~2019,~~ ~~the CARES Act allowed the Company to carry back those NOLs to the fiscal~~ ~~2016~~ ~~and~~ ~~2017~~ ~~tax returns. On~~ ~~March 31, 2020,~~ the Company received a demand letter alleging that the Company is required to apply for and remit to the Predecessor’s shareholders certain tax refunds from carrying back certain tax net operating loss carryforwards that were made available as a result of the recent passage of the CARES Act. In the fiscal ~~2020~~~~third~~ ~~quarter, the Company carried back all NOLs that were generated in fiscal year~~ ~~2018.~~ ~~Furthermore, in~~ ~~August 2020,~~ ~~the Company carried back a portion of the NOLs accumulated during the fiscal~~ ~~2019~~ ~~year. As of the date of filing,~~ no agreement has been reached between the Company and the Predecessor’s shareholders. However, the Company has recorded a $2.0 million estimated loss related to this contingent liability that is included in general and administrative expenses in the accompanying consolidated statements of operations. Following the $1.4 million write-up in the carrying value of the NOL’s as a result of the carryback benefit at a higher tax rate, the net estimated financial impact to the Company is a $0.6 million loss. The corresponding due to related party is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.

Note ~~13.~~12. Commitments and Contingencies

Insurance

As of ~~July 31, 2020~~ April 30, 2021and October 31, ~~2019,~~ 2020, the Company was partially insured for automobile, general and worker's compensation ~~liability with the following deductibles:~~

Deductible

General liability
$ 250,000
General liability (in the case of accident and driver has completed NationsBuilders Insurance Services driver training)
$ 125,000
Automobile
$ 100,000
Workers' compensation
$ 250,000
~~We had~~liability. The Company has accrued ~~$6.5~~$6.7 million and ~~$5.0~~$5.4 million, as of ~~July 31, 2020~~ April 30, 2021and October 31, ~~2019,~~ 2020, respectively, for claims incurred but not reported and estimated losses reported, which is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.

The Company offers employee health benefits via a partially self-insured medical benefit plan. Participant claims exceeding certain limits are covered by a stop-loss insurance policy. As of ~~July 31, 2020~~ April 30, 2021and October 31, ~~2019,~~ 2020, the Company had accrued ~~$1.9~~$3.1 million and ~~$1.1~~$1.9 million, respectively, for health claims incurred but not reported based on historical claims amounts and average lag time. These accruals are included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets. The Company contracts with a third party administrator to process claims, remit benefits, etc. The third party administrator requires the Company to maintain a bank account to facilitate the administration of claims. The account balance was ~~$0.2~~$0.1 million and $0.3 million, as of ~~July 31, 2020~~ April 30, 2021and October 31, ~~2019,~~ 2020, respectively, and is included in cash and cash equivalents in the accompanying consolidated balance sheets.

30

~~Table of Contents~~
Litigation

The Company is currently involved in certain legal proceedings and other disputes with third parties that have arisen in the ordinary course of business. Management believes that the outcomes of these matters will not have a material impact on the Company’s financial statements and does not believe that any amounts need to be recorded for contingent liabilities in the Company’s consolidated balance sheet.

Letters of credit

The ABL ~~Credit Agreement~~Facility provides for up to $7.5 million of standby letters of credit. As of ~~July 31, 2020,~~ April 30, 2021, total outstanding letters of credit totaled ~~$1.2~~$2.3 million, the vast majority of which had been committed to the Company’s general liability insurance provider.
25
Table of Contents

Note ~~14.~~13. ~~Stockholders’~~Stockholders’ Equity
~~In conjunction with the Business Combination, all common and preferred shares that were in existence for the Predecessor were settled and~~ no ~~longer outstanding subsequent to~~ ~~December 5, 2018.~~ On ~~December 6, 2018,~~ in connection with the closing of the Business Combination, the Company redeemed a total of 22,337,322 shares of its Class A common stock pursuant to the terms of its certificate of incorporation, resulting in a total cash payment from the Company’s trust account to redeeming stockholders of $231.4 million.

The Company’s amended and restated certificate of incorporation authorizes the issuance of 500,000,000 shares of common stock, par value $0.0001, and 10,000,000 shares of preferred stock, par value $0.0001. Immediately following the Business Combination, there were:

•●
28,847,707 shares of common stock issued and outstanding;

•●
34,100,000 warrants outstanding, each exercisable for one share of common stock at an exercise price of $11.50 per ~~share;~~ share, with exercisable rights expiring December 6, 2023; and

•●
2,450,980 shares of zero-dividend convertible perpetual preferred stock (“Series A Preferred Stock”) outstanding, as further discussed below

On May 14, 2019, in order to finance a portion of the purchase price for the acquisition of Capital, the Company completed a public offering of 18,098,166 of its common stock at a price of $4.50 per share, receiving net proceeds of approximately $77.4 million, after deducting underwriting discounts, commissions, and other offering expenses. In connection with the offering, certain of the Company’s directors, officers and significant stockholders, and certain other related investors purchased an aggregate of 3,980,166 shares of its common stock from the underwriters at the public offering price of $4.50, representing approximately 25% of the total shares issued (without giving effect to the underwriters’ option to purchase additional shares).

As discussed below, on April 29, 2019, 2,101,213 shares of common stock were issued in exchange for the Company's public warrants and 1,707,175 shares of common stock were issued in exchange for the Company's private warrants. After the completion of the warrant exchange and as of ~~July 31, 2020,~~ April 30, 2021, there were 13,017,777 public warrants and no private warrants outstanding.

The Company’s Series A Preferred Stock does not pay dividends and is convertible (effective June 6, 2019) into shares of the Company’s common stock at a 1:1 ratio (subject to customary adjustments). The Company has the right to elect to redeem all or a portion of the Series A Preferred Stock at its election after December 6, 2022 for cash at a redemption price equal to the amount of the principal investment plus an additional cumulative amount that will accrue at an annual rate of 7.0% thereon. In addition, if the volume weighted average price of shares of the Company’s common stock equals or exceeds $13.00 for 30 consecutive days, then the Company will have the right to require the holder of the Series A Preferred Stock to convert its Series A Preferred Stock into Company common stock, at a ratio of 1:1 (subject to customary adjustments).

31

~~Table of Contents~~
Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. The preferred stock contains a redemption feature contingent upon a change in control which is not solely within the control of the Company, and as such, the preferred stock is presented outside of permanent equity.

26
Table of Contents
Warrant Exchange
On April 1, 2019, the Company commenced an offer to each holder of its publicly traded warrants (the “public warrants”) and private placement warrants that were issued in connection with Industrea’s initial public offering on April 17, 2017 (the “private warrants”) ~~the opportunity~~ to receive 0.2105 shares of common stock in exchange for each outstanding public warrant tendered and 0.1538 shares of common stock in exchange for each private warrant tendered pursuant to the offer (the “Offer” or “Warrant Exchange”).

On April 26, 2019, a total of 9,982,123 public warrants and 11,100,000 private warrants were tendered for exchange pursuant to the Offer.  On April 29, 2019, 2,101,213 shares of common stock were issued in exchange for the tendered public warrants and 1,707,175 shares of common stock were issued in exchange for the tendered private warrants. A negligible amount of cash was paid for fractional shares. As no agreement was modified as a result of the exchange, we concluded that the exchange of Company common stock for the warrants was analogous to a share repurchase. The Company recorded a loss on repurchase of the warrants of $5.2 million in the ~~2019~~~~second~~ quarter, all of which was included as an adjustment to retained earnings. The $5.2 million loss reflects the par value of the warrants in APIC of $21.1 million less the fair value of the common stock that was issued in exchange for the warrants of $26.3 million. After the completion of the Warrant Exchange and as of ~~July 31, 2020,~~ April 30, 2021, 13,017,777 public warrants and no private warrants were outstanding.
On April 12, 2021, the SEC staff issued a statement regarding accounting and reporting considerations for warrants issued by SPACs. In light of the issues raised by the SEC staff, the Company re-evaluated its accounting position for its private and public warrants. See Note 2 for further discussion of the accounting implications relating to these warrants.

Note ~~15.~~14. Stock-Based Compensation
~~Successor~~

The Company rolled forward certain vested options from the Predecessor (see discussion below) to 2,783,479 equivalent vested options in the ~~Successor.~~Company. NaN incremental compensation costs were recognized on conversion as the fair value of the options issued were equivalent to the fair value of the vested options of the Predecessor. Exercise prices for those options range from $0.87 to $6.09.

During 2019, pursuant to the Concrete Pumping Holdings, Inc. 2018 Omnibus Incentive Plan, the Company granted stock-based awards to certain employees in the U.S. and U.K. All awards in the U.S. are participating restricted stock awards while awards granted to employees in the U.K. are stock options with exercise prices of $0.01. Regardless of where the awards were granted, the awards ~~vest~~vested pursuant to one of the ~~following~~ four following conditions:

(1.1)
Time-based only – Awards vest in equal installments over a five-year ~~period~~period.

(2.2)
$13 market-based and time-based vesting – Awards will vest as to first condition once the Company’s stock reaches a closing price of $13.00 for 30 consecutive trading days. Once the first vesting condition is achieved, the stock award will then vest 1/3 annually over a three-year period.

(3.3)
$16 market-based and time-based vesting – Awards will vest as to first condition once the Company’s stock reaches a closing price of $16.00 for 30 consecutive trading days. Once the first vesting condition is achieved, the stock award will then vest 1/3 annually over a three-year period.

(4.4)
$19 market-based and time-based vesting – Awards will vest as to first condition once the Company’s stock reaches a closing price of $19.00 for 30 consecutive trading days. Once the first vesting condition is achieved, the stock award will then vest 1/3 annually over a three-year period.

3227
Table of Contents
On October 29, 2020 almost all of the then-outstanding stock awards were modified as follows:
(1) 113 awards for 113 employees accepted a modification to their restricted stock awards (if U.S. employees) or stock options (if U.K. employees) with market-based vesting conditions as follows:
o The price vesting targets of $13.00 per share, $16.00 per share or $19.00 per share were reduced to $6.00 per share, $8.00 per share or $10.00 per share, respectively
o The market-based awards were exchanged on a 2-for-1 exchange ratio. In total 3,816,450 market-based awards were exchanged for 1,908,165 market-based awards
(2) 18 awards for 18 employees had their restricted stock awards (if U.S. employees) or stock options (if U.K. employees) with market-based vesting conditions (the same $13/$16/$19 price targets outlined above) modified as follows:
o Each individual's total award was split into the following: (a) 46% of time vesting shares that vested on December 6, 2020, (b) 15% of time vesting shares which will vest ratably 1/3 each year on December 6, 2021, 2022 and 2023, and (c) the remaining 39% will initially vest based on reduced price vesting targets of $6.00 per share, $8.00 per share or $10.00 per share. Once the first vesting condition is achieved, the stock award will then vest 1/3 annually over a three-year period.
o In the aggregate, 1,381,426 stock awards were modified as follows:
(a) 635,455 shares vested on December 6, 2020,
(b) 207,215 shares will vest ratably 1/3 each year on December 6, 2021, 2022 and 2023, and
(c) 538,756 shares will vest based on reduced price vesting targets of $6.00 per share, $8.00 per share or $10.00 per share
As a result of the modifications, and in accordance with ASC 718, the Company updated the fair value of each modified award to be equal to the following:
● Unrecognized stock-based compensation expense as of October 29, 2020 immediately before the modification plus
● The greater of $0 or the difference between fair value of new award immediately after modification less the fair value of old award immediately before modification
The fair values for the above awards were calculated using a Monte Carlo simulation model and the updated fair value of the stock award is expensed over the new service period for the new award. As a result of the modifications, the Company recorded $5.9 million of compensation expense on day 1 of the modification as the requisite service period is zero. Outside of the unrecognized compensation expense for all other awards, no incremental costs are expected to be incurred in the future.
As of April 30, 2021, the Company has the following outstanding stock-based awards:
(1)
Time-based only – Awards vest in equal installments over a three or five-year period.
(2)
$6 market-based and time-based vesting – Awards will vest as to first condition once the Company’s stock reaches a closing price of $6.00 for 30 consecutive trading days. Once the first vesting condition is achieved, the stock award will then vest 1/3 annually over a three-year period.
(3)
$8 market-based and time-based vesting – Awards will vest as to first condition once the Company’s stock reaches a closing price of $8.00 for 30 consecutive trading days. Once the first vesting condition is achieved, the stock award will then vest 1/3 annually over a three-year period.
(4)
$10 market-based and time-based vesting – Awards will vest as to first condition once the Company’s stock reaches a closing price of $10.00 for 30 consecutive trading days. Once the first vesting condition is achieved, the stock award will then vest 1/3 annually over a three-year period.
28
Table of Contents

Included in the table below is a summary of ~~the~~unvested awards ~~granted,~~at April 30, 2021, including the location, type of award, ~~fair value of awards,~~shares outstanding, unrecognized compensation expense, and the date that expense will be recognized through. ~~In accordance with ASC~~ ~~718,~~ ~~the market-based awards were assigned the fair values in the table below using a Monte Carlo simulation model.~~ In addition, while the table below provides a date through which expense will be recognized on a straight-line basis for the remaining market-based stock awards, if at such time ~~these market-based stock awards~~they vest ~~under both vesting conditions,~~earlier than the Monte Carlo simulation derived service period, expense recognition will be accelerated. The $6 Market/Time-Based shares noted below achieved the $6.00 market condition on March 29, 2021, which was a date that was earlier than the Monte Carlo simulation had originally estimated. As such, the remaining unrecognized expense for these awards will be accelerated over the new remaining requisite service period. In addition, the Company has broken out the market-based awards by vesting tranche to address the accelerated attribution applied to the awards.
Location

Type of Award

Shares Unvested at April 30, 2021

Weighted Average Fair Value

Unrecognized Compensation Expense at April 30, 2021

Date Expense will be Recognized Through (Straight-Line Basis)
U.S. Time Based Only 864,028 $ 6.20 $ 3,894,504 12/6/2023
U.S.

$6 Market/Time- Based
150,697 $ 3.86 $ 0
10/29/2020
U.S.

$6 Market/Time- Based
192,652 $ 8.63 $ 535,622
3/29/2022
U.S.

$6 Market/Time- Based
192,652 $ 8.63 $ 818,896
3/29/2023
U.S.

$6 Market/Time- Based
192,663 $ 8.63 $ 987,767
3/29/2024
U.S.

$8 Market/Time- Based
150,697 $ 3.46 $ 0
10/29/2020
U.S.

$8 Market/Time- Based
192,653 $ 7.43 $ 623,894
5/1/2023
U.S.

$8 Market/Time- Based
192,653 $ 7.43 $ 795,783
5/1/2024
U.S.

$8 Market/Time- Based
192,662 $ 7.43 $ 908,426
5/1/2025
U.S.

$10 Market/Time- Based
150,706 $ 3.15 $ 0
10/29/2020
U.S.

$10 Market/Time- Based
192,658 $ 6.45 $ 580,256
7/9/2023
U.S.

$10 Market/Time- Based
192,654 $ 6.45 $ 715,214
7/9/2024
U.S. $10 Market/Time- Based 192,670 $ 6.45 $ 805,215 7/9/2025
U.S. $13 Market/Time- Based 433 $ 4.47 $ 794 5/4/2022
U.S. $13 Market/Time- Based 433 $ 4.47 $ 1,045 5/4/2023
U.S. $13 Market/Time- Based 434 $ 4.47 $ 1,209 5/4/2024
U.S. $16 Market/Time- Based 433 $ 3.85 $ 764 8/27/2022
U.S. $16 Market/Time- Based 433 $ 3.85 $ 950 8/27/2023
U.S. $16 Market/Time- Based 434 $ 3.85 $ 1,076 8/27/2024
U.S. $19 Market/Time- Based 433 $ 3.34 $ 708 11/19/2022
U.S. $19 Market/Time- Based 433 $ 3.34 $ 853 11/19/2023
U.S. $19 Market/Time- Based 434 $ 3.34 $ 953 11/19/2024
U.K. Time Based Only 132,259 $ 6.08 $ 550,704 12/6/2023
U.K.

$6 Market/Time- Based
28,885 $ 3.85 $ 0
10/29/2020
U.K.

$6 Market/Time- Based
27,892 $ 8.36 $ 76,663
3/29/2022
U.K.

$6 Market/Time- Based
27,892 $ 8.36 $ 116,244
3/29/2023
U.K.

$6 Market/Time- Based
27,901 $ 8.36 $ 139,791
3/29/2024
U.K.

$8 Market/Time- Based
28,885 $ 3.45 $ 0
10/29/2020
U.K.

$8 Market/Time- Based
27,892 $ 7.20 $ 88,882
5/1/2023
U.K. $8 Market/Time- Based 27,892 $ 7.20 $ 112,737 5/1/2024
U.K. $8 Market/Time- Based 27,901 $ 7.20 $ 128,403 5/1/2025
U.K. $10 Market/Time- Based 28,886 $ 3.14 $ 0 10/29/2020
U.K. $10 Market/Time- Based 27,902 $ 6.24 $ 82,553 7/9/2023
U.K. $10 Market/Time- Based 27,892 $ 6.24 $ 101,225 7/9/2024
U.K. $10 Market/Time- Based 27,901 $ 6.24 $ 113,743 7/9/2025
Total
3,523,925 $ 12,184,873
Note: The $13/$16/$19 Market/Time Based shares noted above relate to the shares not exchanged in the October 29, 2020 modification discussed above.
29
Table of Contents
Stock-based compensation expense for the three and ~~nine~~six-month periods ended ~~July 31, 2020~~ April 30, 2021was ~~$1.4~~$3.3 million and ~~$4.2 million, respectively. Stock-based compensation expense for the~~ ~~three~~~~-month period ending~~ ~~July 31, 2019~~ ~~and the Successor period from~~ ~~December 6, 2018~~ ~~through~~ ~~July 31, 2019~~ ~~was $1.6 million and $2.0 million, respectively.~~
Location

Type of Award

Shares Awarded
Fair Value of Awards Per Share Total Fair Value of Awards Date Expense will be Recognized Through (Straight-Line Basis)
U.S.

Time Based Only
1,156,630 $ 6.67 $ 7,714,722
12/6/2023
U.S.

$13 Market/Time- Based
1,543,044 $ 4.47 $ 6,904,032
5/4/2024
U.S.

$16 Market/Time- Based
1,543,044 $ 3.85 $ 5,940,038
8/27/2024
U.S.

$19 Market/Time- Based
1,543,091 $ 3.34 $ 5,149,194
11/19/2024
U.S.

Time Based Only
25,000 $ 4.05 $ 101,250
12/6/2023
U.S.

$13 Market/Time- Based
25,000 $ 2.72 $ 67,919
5/4/2024
U.S.

$16 Market/Time- Based
25,000 $ 2.34 $ 58,436
8/27/2024
U.S.

$19 Market/Time- Based
25,000 $ 2.03 $ 50,654
11/19/2024
U.K.

Time Based Only
164,744 $ 6.67 $ 1,098,842
12/6/2023
U.K.

$13 Market/Time- Based
238,808 $ 4.46 $ 1,066,272
5/4/2024
U.K.

$16 Market/Time- Based
238,808 $ 3.84 $ 917,096
8/27/2024
U.K.

$19 Market/Time- Based
238,833 $ 3.33 $ 794,772
11/19/2024
Total
6,767,002 $ 29,863,227
~~Predecessor~~
~~The Predecessor accounted for share-based awards in accordance with ASC Topic~~ ~~718~~~~Compensation–Stock Compensation~~ ~~(“ASC~~ ~~718”~~), which requires the fair value of stock-based compensation awards to be amortized as an expense over the vesting period. Stock-based compensation awards are valued at fair value on the date of grant. As a result of the Business Combination, the acceleration clause within the original award agreements was triggered and all unvested awards immediately vested, resulting in an amount of $0.6 million of stock-based compensation expense presented “on the line” (see Note 4 ~~- Business Combinations). Stock-based compensation for the Predecessor period from~~ ~~November 1, 2018~~ to ~~December 5, 2018~~ ~~totaled $0.1~~$4.0 million and has been included in general and administrative expenses on the accompanying consolidated ~~statements~~statement of ~~operations.~~ income. Stock-based compensation expense for the three and six-month periods ended April 30, 2020 was $1.4 million and $2.9 million, respectively.
33

~~Table of Contents~~

Note ~~16.~~15. Earnings Per Share

The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share. For purposes of calculating earnings (loss) per share (“EPS”), a company that has participating security holders (for example, holders of unvested restricted stock that have non-forfeitable dividend rights and the Company’s Series A Preferred Stock) is required to utilize the two-class method for calculating EPS unless the treasury stock method results in lower EPS. The two-class method is an allocation of earnings/(loss) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings/(loss) for the reporting period is calculated by taking the net income (loss) for the period, less both the dividends declared in the period on participating securities (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) for the period. Our common shares outstanding are comprised of shareholder owned common stock and shares of unvested restricted stock held by participating security holders. Basic EPS is calculated by dividing income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding, excluding participating shares. To calculate diluted EPS, basic EPS is further adjusted to include the effect of potentially dilutive stock options outstanding and Series A Preferred Stock outstanding as of the beginning of the period.

~~Successor~~
At ~~July 31, 2020 (~~April 30, 2021~~Successor)~~, the Company had outstanding (1) ~~13,017,777~~13.0 million warrants to purchase shares of common stock at an exercise price of $11.50, (2) ~~5.5~~3.1 million outstanding unvested restricted stock awards, (3) 1.2 million outstanding vested incentive stock options, (4) ~~0.8~~0.5 million outstanding ~~unvested~~ non-qualified stock options, and (5) 2.5 million shares of Series A Preferred Stock, all of which could potentially be dilutive. For the Successor period presented, the weighted-average dilutive impact, if any, of these shares was excluded from the calculation of diluted earnings (loss) per common share because their inclusion would have been anti-dilutive. As a result, dilutive earnings (loss) per share is equal to basic earnings (loss) per share. Stock.

The table below shows our basic and diluted EPS calculations for the three and ~~nine~~~~-month periods ended~~ ~~July 31, 2020,~~ ~~the~~ ~~three~~six-month period ended ~~July 31, 2019,~~April 30, 2021 and ~~the Successor period from~~ ~~December 6, 2018~~ April 30, 2020~~through~~ ~~July 31, 2019:~~:

Successor

Three Months Ended April 30,

Six Months Ended April 30,

(in thousands, except share and per share amounts)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

2021

2020

2021

2020

Net income (loss) (numerator):

Net loss (numerator):

Net loss attributable to Concrete Pumping Holdings, Inc.
$ 2,981 $ 2,762 $ (58,733 ) $ (10,513 ) $ (10,853 ) $ (55,714 ) $ (23,143 ) $ (58,850 )
Less: Accretion of liquidation preference on preferred stock
(489 ) (456 ) (1,432 ) (1,159 ) (499 ) (470 ) (1,006 ) (943 )
Less: Undistributed earnings allocated to participating securities
(42 ) (53 ) - - 0 0 0 0
Net loss attributable to common stockholders (numerator for basic earnings per share)
$ 2,450 $ 2,253 $ (60,165 ) $ (11,672 ) $ (11,352 ) $ (56,184 ) $ (24,149 ) $ (59,793 )
Add back: Accretion of liquidation preference on preferred stock 489 456 - - - - - -
Add back: Undistributed earning allocated to participating securities 42 53 - - - - - -
Less: Undistributed earnings reallocated to participating securities (41 ) (51 ) - - - - - -
Numerator for diluted earnings (loss) per share $ 2,940 $ 2,711 $ (60,165 ) $ (11,672 ) $
(11,352
) $ (56,184 ) $ (24,149 ) $ (59,793 )

Weighted average shares (denominator):

Weighted average shares - basic
52,782,663 49,940,411 52,752,884 37,155,182 53,465,799 52,782,663 53,303,302 52,752,884
Weighted average shares - diluted
55,892,193 53,122,690 52,752,884 37,155,182 53,465,799 52,782,663 53,303,302 52,752,884

Basic income (loss) per share
$ 0.05 $ 0.05 $ (1.14 ) $ (0.31 )
Diluted income (loss) per share
$ 0.04 $ 0.05 $ (1.14 ) $ (0.31 )
Basic loss per share
$ (0.21 ) $ (1.06 ) $ (0.45 ) $ (1.13 )
Diluted loss per share
$ (0.21 ) $ (1.06 ) $ (0.45 ) $ (1.13 )
For all periods presented, the Company realized a net loss and as such, the weighted-average dilutive impact of any shares was excluded from the calculation of diluted EPS because they were antidilutive.

3430
Table of Contents

~~Predecessor~~
Under the terms and conditions of the Company’s Participating Preferred Stock Agreement, the holders of the preferred stock had the right to receive dividends or dividend equivalents should the Company declare dividends on its common stock on a ~~one-for-~~~~one~~ ~~per-share basis. Under the~~ ~~two~~-class method, undistributed earnings was calculated by the earnings for the period less the cumulative preferred stock dividends earned for the period. The undistributed earnings were then allocated on a pro-rata basis to the common and preferred stockholders on a ~~one~~~~-for-~~~~one~~ per-share basis. The weighted-average number of common and preferred shares outstanding during the period was then used to calculate basic EPS for each class of shares. As a result, the undistributed earnings available to common shareholders was calculated by earnings (loss) for the period less the cumulative preferred stock dividends earned for the period less undistributed earnings allocated to the holders of the preferred stock.
In periods in which the Company had a net loss or undistributed net loss, basic loss per share was calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. The ~~two~~~~-class method was~~ ~~not~~ ~~used, because the holders of the preferred stock did~~ ~~not~~ ~~participate in losses.~~
~~The table below shows our basic and diluted EPS calculations for the Predecessor periods from~~ ~~November 1, 2018~~ ~~through~~ ~~December 5, 2018:~~

Predecessor

(in thousands, except share and per share amounts)

November 1, 2018
through
December 5,
2018

Net loss (numerator):

Net loss income attributable to Concrete Pumping Holdings, Inc.
$ (22,575 )
Less: Accretion of liquidation preference on preferred stock
(126 )
Less: Undistributed earnings allocated to preferred shares
0
Net (loss) available to common shareholders
$ (22,701 )

Weighted average shares (denominator):

Weighted average shares - basic
7,576,289
Weighted average shares - diluted
7,576,289

Antidilutive stock options
932,746

Basic loss per share
$ (3.00 )
Diluted loss per share
$ (3.00 )
35

~~Table of Contents~~

Note ~~17.~~16. Segment Reporting

The Company conducts business through the following reportable segments based on geography and the nature of services sold:

●
U.S. Concrete Pumping – Consists of concrete pumping services sold to customers in the U.S. Business in this segment is primarily performed under the Brundage-Bone and Capital ~~Pumping trade names.~~tradenames.
●
U.K. Operations – Consists of concrete pumping services and leasing of concrete pumping equipment to customers in the U.K. Business in this segment is primarily performed under the Camfaud Concrete Pumps and Premier Concrete Pumping ~~trade names.~~tradenames. In addition to concrete pumping, we recently started operations of waste management services in the U.K. under the Eco-Pan ~~trade name~~tradename and the results of this business are included in this segment. This represents the Company’s foreign operations.
●
U.S. Concrete Waste Management Services – Consists of pans and containers rented to customers in the U.S. and the disposal of the concrete waste material services sold to customers in the U.S. Business in this segment is performed under the Eco-Pan ~~trade name.~~tradename.
●
Corporate - Is primarily related to the intercompany leasing of real estate to certain of the U.S Concrete Pumping branches.

Any differences between segment reporting and consolidated results are reflected in Corporate and/or Intersegment below.

The accounting policies of the reportable segments are the same as those described in Note 2. The Company’s Chief Operating Decision Maker (“CODM”) evaluates the performance of each segment based on revenue, and measures segment performance based upon EBITDA (earnings before interest, taxes, depreciation and amortization). Non-allocated interest expense and various other administrative costs are reflected in Corporate. Corporate assets primarily include cash and cash equivalents, prepaid expenses and other current assets, and real property. The following provides operating information about the Company’s reportable segments for the periods presented:

Successor

Predecessor

Three Months Ended April 30,

Six Months Ended April 30,

(in thousands)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

2021

2020

2021

2020

Revenue

U.S. Concrete Pumping
$ 58,644 $ 58,354 $ 171,209 $ 124,969 $ 16,659 $ 56,168 $ 57,459 $ 108,484 $ 112,564
U.K. Operations
9,208 12,492 28,294 30,996 5,143 11,853 8,401 21,633 19,086
U.S. Concrete Waste Management Services
9,390 7,967 25,978 18,806 2,628 9,008 8,306 17,430 16,589
Corporate
625 626 1,875 1,634 242 625 625 1,250 1,250
Intersegment
(736 ) (784 ) (2,245 ) (1,792 ) (276 ) (781 ) (750 ) (1,503 ) (1,509 )
$ 77,131 $ 78,655 $ 225,111 $ 174,613 $ 24,396
Total revenue
$ 76,873 $ 74,041 $ 147,294 $ 147,980

Income (loss) before income taxes

U.S. Concrete Pumping
$ 497 $ (1,050 ) $ (50,430 ) $ (14,946 ) $ (27,354 ) $ (1,306 ) $ (47,054 ) $ (16,806 ) $ (50,928 )
U.K. Operations
(81 ) 1,353 (16,535 ) 290 207 481 (15,446 ) (227 ) (16,454 )
U.S. Concrete Waste Management Services
1,685 329 3,149 (85 ) 225 1,181 893 2,034 1,464
Corporate
418 208 1,254 1,113 155 (11,039 ) 3,672 (10,622 ) 3,700
$ 2,519 $ 840 $ (62,562 ) $ (13,628 ) $ (26,767 )
Total income (loss) before income taxes
$ (10,683 ) $ (57,935 ) $ (25,621 ) $ (62,218 )

3631

Table of Contents

Successor

Predecessor

Three Months Ended April 30,

Six Months Ended April 30,

(in thousands)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

2021

2020

2021

2020

EBITDA

U.S. Concrete Pumping
$ 17,862 $ 17,934 $ 3,911 $ 29,283 $ (24,565 ) $ 13,346 $ (28,814 ) $ 13,241 $ (13,952 )
U.K. Operations
2,715 5,013 (8,038 ) 9,445 1,587 3,334 (12,712 ) 5,413 (10,753 )
U.S. Concrete Waste Management Services
4,346 3,587 11,149 7,748 388 3,504 3,553 6,704 6,803
Corporate
625 626 1,875 1,633 180 (10,831 ) 3,879 (10,206 ) 4,114
$ 25,548 $ 27,160 $ 8,897 $ 48,109 $ (22,410 )
Total EBITDA
$ 9,353 $ (34,094 ) $ 15,152 $ (13,788 )

Consolidated EBITDA reconciliation

Net income (loss)
$ 2,981 $ 2,762 $ (58,733 ) $ (10,513 ) $ (22,575 )
Net loss
$ (10,853 ) $ (55,714 ) $ (23,143 ) $ (58,850 )
Interest expense, net
8,364 9,843 26,632 24,753 1,644 6,029 8,765 12,929 18,268
Income tax benefit
(462 ) (1,922 ) (3,829 ) (3,115 ) (4,192 )
Income tax expense (benefit)
170 (2,221 ) (2,478 ) (3,368 )
Depreciation and amortization
14,665 16,477 44,827 36,984 2,713 14,007 15,076 27,844 30,162
EBITDA
$ 25,548 $ 27,160 $ 8,897 $ 48,109 $ (22,410 )
Total EBITDA
$ 9,353 $ (34,094 ) $ 15,152 $ (13,788 )

Successor

Predecessor

Three Months Ended April 30,

Six Months Ended April 30,

(in thousands)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

2021

2020

2021

2020

Depreciation and amortization

U.S. Concrete Pumping
$ 9,745 $ 9,938 $ 29,893 $ 21,471 $ 1,635 $ 9,405 $ 10,144 $ 18,677 $ 20,148
U.K. Operations
2,052 2,864 6,313 7,161 890 2,071 2,065 4,081 4,261
U.S. Concrete Waste Management Services
2,661 3,257 8,000 7,832 163 2,323 2,660 4,670 5,339
Corporate
207 418 621 520 25 208 207 416 414
$ 14,665 $ 16,477 $ 44,827 $ 36,984 $ 2,713
Total depreciation and amortization
$ 14,007 $ 15,076 $ 27,844 $ 30,162

Interest expense, net

U.S. Concrete Pumping
$ (7,620 ) $ (9,046 ) $ (24,448 ) $ (22,758 ) $ (1,154 ) $ (5,247 ) $ (8,096 ) $ (11,370 ) $ (16,828 )
U.K. Operations
(744 ) (796 ) (2,184 ) (1,994 ) (490 ) (782 ) (669 ) (1,559 ) (1,440 )
U.S. Concrete Waste Management Services
0 (1 ) 0 (1 ) 0 0 0 0 0
Corporate
0 0 0 0 0 0 0 0 0
$ (8,364 ) $ (9,843 ) $ (26,632 ) $ (24,753 ) $ (1,644 )
Total interest expense, net
$ (6,029 ) $ (8,765 ) $ (12,929 ) $ (18,268 )

Transaction costs including transaction-related debt extinguishment

U.S. Concrete Pumping
$ 0 $ 1,458 $ 0 $ 1,458 $ 0 $ 55 $ 0 $ 84 $ 0
Corporate
0 (1,282 ) 0 0 30,562 0 0 0 0
$ 0 $ 176 $ 0 $ 1,458 $ 30,562
Total transaction costs including transaction-related debt extinguishment
$ 55 $ 0 $ 84 $ 0

3732

Table of Contents

Total assets by segment for the periods presented are as follows:

July 31,

October 31,

April 30,

October 31,

(in thousands)

2020

2019

2021

2020

Total Assets

U.S. Concrete Pumping
$ 583,810 $ 637,384 $ 567,635 $ 570,536
U.K. Operations
122,986 138,435 105,393 109,726
U.S. Concrete Waste Management Services
138,718 137,646 141,723 140,209
Corporate
25,139 24,223 26,029 25,517
Intersegment
(83,136 ) (66,323 ) (69,265 ) (72,230 )
$ 787,517 $ 871,365
Total assets
$ 771,515 $ 773,758

The U.S. and U.K. were the only regions that accounted for more than 10% of the Company’s revenue for the periods presented. There was no single customer that accounted for more than 10% of revenue for the periods presented. Revenue for the periods presented and long lived assets as of ~~July 31, 2020~~ April 30, 2021and October 31, ~~2019~~ 2020are as follows:

Successor

Predecessor
Three Months Ended April 30, Six Months Ended April 30,
(in thousands)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

2021

2020

2021

2020

Revenues

Revenue by Geography

U.S.
$ 67,923 $ 66,163 $ 196,817 $ 143,617 $ 19,253 $ 65,020 $ 65,640 $ 125,661 $ 128,894
U.K.
9,208 12,492 28,294 30,996 5,143 11,853 8,401 21,633 19,086
$ 77,131 $ 78,655 $ 225,111 $ 174,613 $ 24,396
Total revenue
$ 76,873 $ 74,041 $ 147,294 $ 147,980

July 31,

October 31,

(in thousands)

2020

2019

Long Lived Assets

U.S.
$ 262,419 $ 263,363
U.K.
43,477 44,052
$ 305,896 $ 307,415

April 30,

October 31,

(in thousands)

2021

2020

Long Lived Assets

U.S.
$ 257,764 $ 260,693
U.K.
47,101 43,561
Total long lived assets
$ 304,865 $ 304,254

Note ~~18.~~17. Related Party Transaction
~~Predecessor~~
~~The Predecessor had~~During fiscal years 2016 and 2017, the Company paid federal income taxes totaling $4.3 million (at a ~~Management Services Agreement,~~federal income tax rate of 34%). As the Company generated NOL carryforwards during fiscal 2018 and 2019, the CARES Act allowed the Company to carry back those NOL's to the fiscal 2016 and 2017 tax returns. During fiscal 2020, the Company carried back all NOL's that were generated in fiscal year 2018 to the 2016 and part of the 2017 tax returns and also carried back a portion of the NOL's accumulated during fiscal 2019 to the remaining income from the 2017 tax return. On March 31, 2020, the Company received a demand letter alleging that the Company is required to remit to the Predecessor's shareholders certain tax refunds from carrying back certain NOL's made available as ~~amended from time to time,~~a result of the passage of the CARES Act. In October 2020, the Company reached a settlement with ~~PGP Advisors, LLC (“PGP”),~~ the Predecessor’s ~~largest shareholder,~~shareholders, resulting in the Company agreeing to ~~provide advisory, consulting and other professional services. Under the terms~~pay $2.0 million of the ~~agreement~~$4.3 million in refunds to the ~~annual fee for these services~~Predecessor’s shareholders. This $2.0 million charge was ~~$4.0 million from~~recorded in the fiscal ~~September~~ of ~~2017~~2020 ~~through~~ ~~August~~ of ~~2019,~~fourth ~~and $2.0 million annually thereafter. For the period from~~ ~~November 1, 2018~~ ~~through~~ ~~December 5, 2018,~~ ~~the Predecessor incurred~~ no ~~fees related to this agreement and other agreed upon expenses. These expenses were included~~quarter in general and administrative expenses onin the ~~accompanying~~ consolidated statements of operations. ~~In conjunction with~~The corresponding due to related party was recorded to accrued expenses and other current liabilities in the ~~Business Combination,~~consolidated balance sheets and was to be settled as the income tax refunds from the IRS are received. The majority of this ~~agreement~~liability was ~~terminated.~~ paid in the fiscal 2021first quarter while remainder of the liability was paid in the fiscal 2021second quarter.
3833
Table of Contents

Item 2.    ~~Management’s~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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

Cautionary Statement Concerning 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, and the potential impact of the COVID-19 pandemic on our business.~~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 filed with the SEC on January ~~14, 2020~~.12, 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. ~~The financial results described herein for the dates and periods prior to the Business Combination relate to the operations of CPH prior to the consummation~~
As part of the ~~Business Combination.~~
39

~~Table~~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 ~~Contents~~
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 22 states with their corporate headquarters in Thornton (near Denver), Colorado.

In May 2019, the Company, through its wholly-owned subsidiary Brundage-Bone, acquired Capital Pumping, LP and its affiliates (“Capital”), a concrete pumping provider based in Texas for a purchase price of $129.2 million. The closing of this acquisition provided the Company with complementary assets and operations and significantly expanded its footprint and business in Texas.
~~U.K. Operations~~
Our U.K. operations consists of concrete pumping and concrete waste management services. Our concrete pumping services are primarily provided through either our Camfaud brand (operated pumping services) or our Premier Concrete Pumping brand (rental of pumping equipment on a long-term basis without an operator). Camfaud’s core business is primarily the provision of concrete pumping services to general contractors and concrete finishing companies in the commercial, infrastructure and residential sectors. Camfaud currently has 30 branch locations throughout the U.K. In addition, during the 2019 third quarter, we started concrete waste management operations under our Eco-Pan brand name in the U.K. and currently operate from a shared location with one of the Camfaud branches. The U.K. operations headquarters are in Epping (near London), England.
U.S. 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 1617 operating locations across the United States with its corporate headquarters in Thornton, ~~(near Denver),~~ Colorado.

4034

Table of Contents

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 primarily related to the intercompany leasing of real estate to certain of our U.S Concrete Pumping branches.
Impacts of COVID-19

In ~~December 2019, a novel strain of coronavirus (“COVID-19”) emerged and has spread around the world. On~~ March ~~11,~~ 2020, the World Health Organization declared the outbreak of COVID-19 to be a global pandemic and recommended containment and mitigation measures worldwide. ~~On March 13, 2020, U.S. President Trump announced a National Emergency relating~~The COVID-19 pandemic has rapidly changed market and economic conditions globally and may continue to ~~the pandemic. Government authorities~~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 April 30, 2021, no subsequent triggering events have ~~recommended or imposed various social distancing, quarantine,~~been identified. We will continue to evaluate our goodwill and ~~isolation measures~~intangible assets in future quarters. Additional impairments may be recorded in the future based on ~~large portions~~events and circumstances, including those related to COVID-19 discussed above.
Despite recent progress in administration of ~~the population, which include limitations on travel and mandatory cessation of certain business activities. Both~~vaccines, both the outbreak and the containment and mitigation measures have had and ~~will~~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. Most notably in the second and third quarter of fiscal 2020, the COVID-19 pandemic has primarily impacted revenue volumes in the U.K. and certain markets in the U.S. Beginning in the fourth quarter of fiscal 2020, revenue volumes began returning back to pre-pandemic levels, and during the second quarter of fiscal 2021 improved from pre-pandemic levels; however, the impact from COVID-19 remains an issue in certain markets. The full extent to which the COVID-19 pandemic will impact ~~our~~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;~~efforts, including those from the successful distribution of an effective vaccine; the impact of the pandemic on economic activity, including on construction projects and our customers’ demand for our services; our ability to effectively operate, including as a result of travel restrictions and mandatory business and facility closures; the ability of our customers to pay us for services rendered; any further closures of ~~our and~~the Company's or our customers’ offices and facilities; and any additional project delays or shutdowns. Customers have and may ~~also~~continue to slow down decision-making, delay planned work or seek to terminate existing agreements. Any of these events may have a material adverse effect on our business, financial condition, and/or results of operations, including further impairment to our goodwill and intangible assets.
In the final month of the second quarter of fiscal 2020, our operations in the Seattle and U.K. markets were negatively impacted due to COVID-19-imposed construction site shutdowns. These restrictions were, for the most part, lifted during the third quarter ended July 31, 2020. As a result of the pandemic, we have implemented certain short-term cost reductions, including headcount reductions, modified work schedules reducing hours where needed, and furloughs in limited locations. While we believe these disruptions will be temporary, it is difficult to predict how long they will last and the impact they will have on the Company in future periods. We will continue to evaluate the effect of COVID-19 on our business.

Notes Offering
In addition, the COVID-19 pandemic drove a sustained decline in the Company's stock price and a deterioration in general economic conditions in the second quarter of fiscal 2020, which qualified as a triggering event necessitating the evaluation of its goodwill and long-lived assets for indicators of impairment. As a result of the evaluation, the Company conducted a quantitative interim impairment test as of April 30, 2020 and recorded $57.9 million in impairments, including a $5.0 million impairment of ourJanuary 2021, Brundage-Bone Concrete Pumping ~~trade-name,~~Holdings Inc., 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. No additional impairments were required during the third quarter of fiscal 2020.
In an effort to maintain the safety and welfare of our employees and customers, we have implemented various employee safety measures to contain the spread of COVID-19, including domestic and international travel restrictions, the promotion of social distancing and work-from-home practices, extensive cleaning protocols, daily symptom assessments, and enhanced use of personal protective equipment such as masks. We are closely monitoring all guidance provided by public agencies such as the Centers for Disease Control and Prevention in the U.S. and the U.K. department of health to ensure the safety of our employees, vendors, and customers.
~~Results of Operations~~
~~To reflect the application of different bases of accounting as a result~~wholly-owned subsidiary of the ~~Business Combination, the tables provided below separate the Company’s results via~~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 ~~black line into two distinct periods as follows: (1)~~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 ~~and including~~$125.0 million (previously $60.0 million) of commitments.  The offering proceeds, along with approximately $15.0 million of borrowings under the Business Combination closing date (labeled “Predecessor”) and (2) the period after that date (labeled “Successor”). The periods after December 5, 2018 are the “Successor” periods while the periods beforeABL Facility, were used to repay all outstanding indebtedness under our existing term loan agreement, dated December 6, 2018, ~~are the “Predecessor” periods.~~
The historical financial information of Industrea prior to the Business Combination (a special purpose acquisition company, or “SPAC”) has not been reflected in the Predecessor financial statements as these historical amounts have been determined to be not useful information to a user of the financial statements. SPACs deposit the proceeds from their initial public offerings into a segregated trust account until a business combination occurs, where such funds are then used toand pay consideration for the acquiree and/or to pay stockholders who elect to redeem their shares of common stock in connection with the business combination. The operations of a SPAC, until the closing of a business combination, other than income from the trust account investmentsrelated fees and ~~transaction expenses, are nominal. Accordingly, no other activity in the Company was reported for periods prior to December 6, 2018 besides CPH’s operations as Predecessor.~~expenses.

4135

Table of Contents

Restatement and Revision of Prior Period Financial Statements
As ~~Industrea’s historical financial information is excluded from~~described in additional detail in the ~~Predecessor financial information,~~Explanatory Note to our Annual Report on Form 10-K/A for the ~~business, and thus financial results,~~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 ~~Successor~~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 ~~Predecessor entities, are expected to be largely consistent, excluding~~private placement warrants (the “private warrants”) (collectively the ~~impact on certain~~“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 ~~statement line items that were impacted by the Business Combination. Management believes reviewing our operating results~~statements as of October 31, 2019 and for the ~~nine-months~~Successor period from December 6, 2018 through October 31, 2019 and (2) unaudited consolidated interim financial statements for the periods ended July 31, 2019, ~~by combining~~April 30, 2019, and January 31, 2019. Also, while not material, the results of the Predecessor and Successor periods (“S/P Combined”) is more useful in discussing our overall operating performance when compared to the same period in the current year. Accordingly, in addition to presenting our results of operations as reported in ourCompany previously revised its (1) consolidated financial statements ~~in accordance with GAAP, the tables below present the non-GAAP combined results~~as of and for the ~~year.~~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. Management evaluated the impact of these revisions on the unaudited consolidated financial statements for the quarter ended January 31, 2021 and determined the impact was immaterial. As a result, the Company is also revising those unaudited consolidated financial statements to correct the accounting for its Warrants. See Note 2 to the consolidated financial statements for further information. The unaudited consolidated financial statements for the three and six month periods ended April 30, 2020 included in this Quarterly Report on Form 10-Q reflect the impacts of such revisions.

S/P Combined

Successor

Predecessor

(non-GAAP)

(dollars in thousands)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

Nine Months Ended July 31, 2019

Revenue
$ 77,131 $ 78,655 $ 225,111 $ 174,613 $ 24,396 $ 199,009

Cost of operations
39,330 39,665 123,295 98,396 14,027 112,423
Gross profit
37,801 38,990 101,816 76,217 10,369 86,586
Gross margin
49.0 % 49.6 % 45.2 % 43.6 % 42.5 % 43.5 %

General and administrative expenses
26,954 28,159 79,941 63,693 4,936 68,629
Goodwill and intangibles impairment
- - 57,944 - - -
Transaction costs
- 176 - 1,458 14,167 15,625
Income (loss) from operations
10,847 10,655 (36,069 ) 11,066 (8,734 ) 2,332

Other income (expense):

Interest expense, net
(8,364 ) (9,843 ) (26,632 ) (24,753 ) (1,644 ) (26,397 )
Loss on extinguishment of debt
- - - - (16,395 ) (16,395 )
Other income, net
36 28 139 59 6 65
Total other expense
(8,328 ) (9,815 ) (26,493 ) (24,694 ) (18,033 ) (42,727 )

Income (loss) before income taxes
2,519 840 (62,562 ) (13,628 ) (26,767 ) (40,395 )

Income tax expense (benefit)
(462 ) (1,922 ) (3,829 ) (3,115 ) (4,192 ) (7,307 )

Net income (loss)
2,981 2,762 (58,733 ) (10,513 ) (22,575 ) (33,088 )

Less accretion of liquidation preference on preferred stock
(489 ) (456 ) (1,432 ) (1,159 ) (126 ) (1,285 )
Net income (loss) available to common shareholders
$ 2,492 $ 2,306 $ (60,165 ) $ (11,672 ) $ (22,701 ) $ (34,373 )
Results of Operations

Three Months Ended April 30,

Six Months Ended April 30,

(dollars in thousands)

2021

2020

2021

2020

Revenue
$ 76,873 $ 74,041 $ 147,294 $ 147,980

Cost of operations
43,570 42,174 84,128 83,965
Gross profit
33,303 31,867 63,166 64,015
Gross margin
43.3 % 43.0 % 42.9 % 43.3 %

General and administrative expenses
26,472 26,381 48,860 52,988
Goodwill and intangibles impairment
- 57,944 - 57,944
Transaction costs
55 - 84 -
Income (loss) from operations
6,776 (52,458 ) 14,222 (46,917 )

Other income (expense):

Interest expense, net
(6,029 ) (8,765 ) (12,929 ) (18,268 )
Loss on extinguishment of debt
- - (15,510 ) -
Change in fair value of warrant liabilities
(11,456 ) 3,254 (11,456 ) 2,864
Other income, net
26 34 52 103
Total other expense
(17,459 ) (5,477 ) (39,843 ) (15,301 )

Income (loss) before income taxes
(10,683 ) (57,935 ) (25,621 ) (62,218 )

Income tax expense (benefit)
170 (2,221 ) (2,478 ) (3,368 )

Net income (loss)
(10,853 ) (55,714 ) (23,143 ) (58,850 )

Less accretion of liquidation preference on preferred stock
(499 ) (470 ) (1,006 ) (943 )
Net income (loss) available to common shareholders
$ (11,352 ) $ (56,184 ) $ (24,149 ) $ (59,793 )

4236

Table of Contents

Three Months Ended ~~July 31~~~~, 2020~~April 30, 2021

For the three months ended ~~July 31, 2020,~~April 30, 2021, our net ~~income~~loss was ~~$3.0~~$10.9 million, ~~or an increase of $0.2 million when~~as compared to ~~the~~a net ~~income~~loss of ~~$2.8~~$55.7 million in ~~the~~ same period a year ago. ~~We had~~The improvement was due to a ~~1.9% decline~~$57.9 million year-over-year reduction in goodwill and intangibles impairment, a 3.8% year-over-year increase in revenue and a $2.7 million reduction in interest expense. These improvements were offset by the $14.8 million year-over-year ~~from $78.7~~change in fair value of warrant liabilities, which reflected income of $3.3 million in the ~~fiscal 2019 third quarter to $77.1 million in the third~~second quarter of fiscal 2020 ~~driven mostly by the 26.3% decline in our U.K. Operations segment as a result~~versus expense of ~~construction site shutdowns due to COVID-19. This was mostly offset up by robust year-over-year revenue growth of 17.9% from our U.S Concrete Waste Management Services segment. Net income~~$11.5 million in the ~~third~~second quarter of fiscal 2020, when compared to the same period a year ago was also impacted by lower interest expense of $1.5 million, lower general and administrative expenses of $1.2 million, and a $1.5 million lesser income tax benefit.2021.

~~Nine~~Six Months Ended ~~July 31~~~~, 2020~~April 30, 2021
For the ~~nine~~six months ended ~~July 31, 2020,~~April 30, 2021, our net loss was ~~$58.7~~$23.1 million, ~~or an increase of $25.6 million when~~as compared to ~~the~~a net loss of ~~$33.1~~$58.9 million in ~~the S/P combined~~same period a year ago. The ~~higher~~primary driver of the lower net loss ~~is primarily attributable to goodwill and intangible impairment charges totaling $57.9~~was a $15.5 million resulting from the significant decline in the Company's stock price during the second quarter driven by the COVID-19 pandemic. Despite the impact from COVID-19, we had a 13.1% improvement in revenue year-over-year, driven mostly by the additional assets we obtained from the acquisition of Capital, which supported the operations in our Texas market, and strong revenue growth of 21.2% from our U.S. Concrete Waste Management Services segment. Our improved revenue was slightly offset by a 21.7% year-over-year decline in revenue from our U.K. Operations segment which has been heavily impacted from construction site shutdowns due to COVID-19. Net income for the nine-months ended July 31, 2020, when compared to the S/P combined period a year ago, was also impacted by (1) lower transaction costs of $15.6 million, most of which related to the Business Combination, (2) lower loss on extinguishment of debt ~~of $16.4~~recorded in the fiscal 2021 first quarter in comparison to the $57.9 million ~~all of which were~~goodwill and intangibles impairment recorded in the ~~result of the Business Combination, and (3) $11.3~~fiscal 2020 second quarter. In addition, we had a $4.1 million improvement in ~~higher~~ general and administrative ~~expenses.~~(“G&A”) expenses and a $5.3 million reduction in interest expense. These amounts were offset by a net increase in the fair value of warrant liabilities of $14.4 million from $2.9 million of income in the six months ended April 30, 2020 to $11.5 million of expense in the same period of 2021.

Total Assets

July 31,

October 31,

(in thousands)

2020

2019

Total Assets

U.S. Concrete Pumping
$ 583,810 $ 637,384
U.K. Operations
122,986 138,435
U.S. Concrete Waste Management Services
138,718 137,646
Corporate
25,139 24,223
Intersegment
(83,136 ) (66,323 )
$ 787,517 $ 871,365
Total assets decreased slightly from ~~$871.4~~$773.8 million as of October 31, ~~2019~~2020 to ~~$787.5~~$771.5 million as of July 31, 2020. The decrease is primarily attributable to the goodwill and intangibles impairment charges of $57.9 million that were recorded during the second quarter of fiscal 2020. The remainder is attributable to depreciation and amortization of long lived assets.April 30, 2021.

April 30,

October 31,

(in thousands)

2021

2020

Total Assets

U.S. Concrete Pumping $ 567,635 $ 570,536
U.K. Operations 105,393 109,726
U.S. Concrete Waste Management Services 141,723 140,209
Corporate 26,029 25,517
Intersegment (69,265 ) (72,230 )
Total Assets $ 771,515 $ 773,758
Revenue

Three Months Ended April 30,

Change

(in thousands)

2021

2020

$

%

Revenue

U.S. Concrete Pumping
$ 56,168 $ 57,459 $ (1,291 ) -2.2 %
U.K. Operations
11,853 8,401 3,452 41.1 %
U.S. Concrete Waste Management Services
9,008 8,306 702 8.5 %
Corporate
625 625 - 0.0 %
Intersegment
(781 ) (750 ) (31 ) 4.1 %
Total revenue $ 76,873 $ 74,041 $ 2,832 3.8 %

Six Months Ended April 30, 2020

Change

(in thousands)

2021

2020
$
%

Revenue

U.S. Concrete Pumping
$ 108,484 $ 112,564 $ (4,080 ) -3.6 %
U.K. Operations
21,633 19,086 2,547 13.3 %
U.S. Concrete Waste Management Services
17,430 16,589 841 5.1 %
Corporate
1,250 1,250 - 0.0 %
Intersegment
(1,503 ) (1,509 ) 6 -0.4 %
Total revenue
$ 147,294 $ 147,980 $ (686 ) -0.5 %

4337

Table of Contents

~~Revenue~~

Successor

Change

(in thousands)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

$

%

Revenue

U.S. Concrete Pumping
$ 58,644 $ 58,354 $ 290 0.5 %
U.K. Operations
9,208 12,492 (3,284 ) -26.3 %
U.S. Concrete Waste Management Services
9,390 7,967 1,423 17.9 %
Corporate
625 626 (1 ) NM¹
Intersegment
(736 ) (784 ) 48 NM¹
$ 77,131 $ 78,655 $ (1,524 ) -1.9 %
⁽¹⁾~~Not meaningful~~

Successor

Predecessor

S/P Combined
(non-GAAP)

Change

(in thousands)

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

Nine Months Ended July 31, 2019
$
%

Revenue

U.S. Concrete Pumping
$ 171,209 $ 124,969 $ 16,659 $ 141,628 $ 29,581 20.9 %
U.K. Operations
28,294 30,996 5,143 36,139 (7,845 ) -21.7 %
U.S. Concrete Waste Management Services
25,978 18,806 2,628 21,434 4,544 21.2 %
Corporate
1,875 1,634 242 1,876 (1 ) NM¹
Intersegment
(2,245 ) (1,792 ) (276 ) (2,068 ) (177 ) NM¹
$ 225,111 $ 174,613 $ 24,396 $ 199,009 $ 26,102 13.1 %
⁽¹⁾~~Not meaningful~~
U.S. Concrete Pumping

Revenue for our U.S. Concrete Pumping segment ~~increased~~decreased by ~~0.5%~~2.2%, or ~~$0.3~~$1.3 million, from ~~$58.4 million in~~ the ~~2019 third~~ fiscal 2020 second quarter to ~~$58.6 million in~~ the ~~third~~fiscal 2021 second quarter. The second quarter of fiscal ~~2020. Modest organic growth~~2020 was impacted by COVID-19 primarily only during the month of April. While revenue in many of our markets ~~were mostly offset by~~has returned back to, or even improved from pre-pandemic levels, the impact from COVID-19 ~~driven declines~~ in certain ~~other markets.~~
markets remains an issue and therefore drove the decline in revenue. In addition to COVID-19 impacts, severe weather conditions in Texas also contributed to a decline in revenue during the fiscal 2021 second quarter. Revenue for our U.S. Concrete Pumping segment ~~increased~~decreased by ~~20.9%~~3.6%, or ~~$29.6~~$4.1 million, from ~~$141.6 million in~~ the ~~S/P combined nine~~six months ended ~~July 31, 2019~~April 30, 2020 to ~~$171.2 million in~~ the first ~~nine-months~~six months of ~~2020.~~2021. The ~~incremental benefit~~drivers of this decline are the same as those above for the three-month comparison, and also due to the fact that 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 acquisition of Capital, which added additional pumping capacity to Texas, drove $26.7 million of the increase in revenue. The remaining increase was the result of organic growth in the majority of our other regional markets.pandemic.

44

~~Table of Contents~~
U.K. Operations

Revenue for our U.K. Operations segment ~~decreased~~increased by ~~26.3%~~41.1%, or ~~$3.3~~$3.5 million, from ~~$12.5 million in~~ the fiscal ~~2019 third~~2020 second quarter to ~~$9.2~~the fiscal 2021 second quarter. Excluding the impact from foreign currency translation, revenue was up 27.3% year over year. For the six months ended April 30, 2021, revenue for our U.K. Operations segment increased by 13.3%, or $2.5 million, infrom the ~~third quarter of fiscal~~six months ended April 30, 2020. Excluding the impact from foreign currency translation, revenue was down 25.3% year over year. For the nine-months ended July 31, 2020, revenue for this segment decreased by 21.7%, or $7.8 million, from $36.1 million in the S/P combined nine-months ended July 31, 2019 to $28.3 million. Excluding the impact from foreign currency translation, revenue was down 20.7%up 6.1% year over year. The ~~decline~~increase in revenue during both periods was ~~largely~~ attributable to the recovery from the impact offrom COVID-19 ~~which drove complete lockdowns on our U.K. business operations~~that negatively impacted results in the final month of ~~April and negatively impacted operations throughout~~ the ~~third quarter of~~ fiscal ~~2020.~~2020 second quarter.

U.S. Concrete Waste Management Services

Revenue for the U.S. Concrete Waste Management Services segment increased by ~~17.9%~~8.5%, or ~~$1.4~~$0.7 million, from ~~$8.0 million in~~ the ~~2019 third~~ fiscal 2020 second quarter to ~~$9.4 million in~~ the ~~2020 third~~fiscal 2021 second quarter. For the ~~nine-months~~six months ended ~~July 31, 2020,~~April 30, 2021, revenue for the U.S. Concrete Waste Management Services segment increased by ~~21.2%~~5.1%, or ~~$4.5~~$0.8 million, from ~~$21.4 million in~~ the ~~S/P combined nine-months~~six months ended ~~July 31, 2019 to $26.0 million.~~April 30, 2020. The increase in revenue during both periods was primarily due to ~~robust~~ organic growth, pricing improvements, and new product offerings ~~and continuing momentum~~(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 ~~the newer branch locations established over the last year.~~certain markets.

Corporate

There was ~~limited movement~~no change in revenue for our Corporate segment for the periods presented. ~~Any year-over-year changes for~~All activity in our Corporate segment ~~was primarily~~is related to the intercompany leasing of real estate to certain of our U.S Concrete Pumping branches. ~~These revenues are~~This revenue is eliminated in consolidation through the Intersegment line included above.

Gross Margin

Gross margin for the ~~third quarter of fiscal 2020 decreased 60 basis points from 49.6% in the 2019 third quarter~~three and six-month period ending April 30, 2021 was relatively flat to ~~49.0%. The limited decline in gross margin was driven by our U.K. Operations segment, which has realized lower gross margins as a result~~that of the ~~continuing impacts from COVID-19.~~
Gross margin for the first nine months of 2020 increased 170 basis points from 43.5% in the S/P combined nine-months ended July 31, 2019 to 45.2%. The increase in gross margin for the nine-months ended July 31, 2020 was primarily due to the post-acquisition contribution from Capital, more favorable fuel pricingrespective three and ~~improvement in the Company’s procurement costs.~~six-month periods ending April 30, 2020.

4538

Table of Contents

General and Administrative Expenses

G&A expenses for the ~~third~~fiscal 2021 second quarter ~~of fiscal 2020~~ were ~~$27.0~~$26.5 million, ~~a decrease of $1.2 million~~relatively flat from ~~$28.2~~$26.4 million in the third quarter of fiscal 2019. As a percentage of revenue, G&A expenses were 34.9% for the 2020 third quarter compared to 35.8% for the 2019 third quarter. Excluding non-cash costs for depreciation expense, amortization of intangibles, and stock-based compensation expense G&A expenses, as a percentage of revenue, were 14.2% for the 2020 third quarter compared to 13.6% for the 2019 third quarter. As a result of COVID-19, we have significantly reduced various G&A expenses such as travel, meals and entertainment expense by $0.5 million. In addition, we had lower amortization of intangible assets expense of $2.3 million and stock-based compensation expense of $0.3 million. These amounts were partially offset by an estimated $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.
~~G&A expenses for the first nine-months of~~ fiscal 2020 ~~were $79.9 million, an increase of $11.3 million from $68.6 million in the S/P combined nine-months ended July 31, 2019.~~second quarter. As a percent of revenue, G&A expenses were ~~35.5%~~34.4% for the ~~first nine-months of 2020~~fiscal 2021 second quarter compared to ~~34.5% for~~35.6% in the same period a year ago. Excluding non-cash costs for depreciation expense, amortization of intangibles, and stock-based compensation expense G&A expenses, as a percentage of revenue, were 13.7% for the first nine-months offiscal 2020 ~~compared to 13.8% for the same period a year ago.~~second quarter. The ~~overall increase~~decrease was largely due to ~~higher~~lower amortization of intangible assets expense of ~~$2.4~~$1.6 million ~~most of which was the result of the acquisition of Capital. In addition, we incurred an additional $2.2 million in~~offset by higher stock-based compensation expense ~~as a result~~ of ~~a stock grant in April of 2019.~~$2.0 million. Excluding amortization of intangible assets and stock-based compensation expense, G&A expenses were ~~up $6.7~~down $0.3 million year-over-year. ~~The remainder of the year-over-year increase was mostly attributable to the contingent liability charge discussed above and headcount growth, predominantly from the new team members at Capital.~~

~~Transaction Costs & Debt Extinguishment Costs~~
~~Transaction costs include~~G&A expenses ~~for legal, accounting, and other professionals that were engaged in connection with an acquisition. There were no transaction costs or debt extinguishment costs~~ for the first ~~nine~~six-months of fiscal 2021 were $48.9 million, down from $53.0 million in the first six months of ~~2020. Transaction costs amounted to $0.2 million~~fiscal 2021. As a percent of revenue, G&A expenses were 33.2% for the ~~third quarter~~first six-months of ~~2019 and $1.5 million for~~fiscal 2021 compared to 35.8% in the ~~period from December 6, 2018 through July 31, 2019, which were associated with the Capital Acquisition.~~
During the period from November 1, 2018 through December 5, 2018, the Predecessor incurred transaction costs of $14.2 and debt extinguishment costs of $16.4 million. All costs in this period were related to the Business Combination.
~~Interest Expense, Net~~
~~Interest expense, net for the three months ended July 31, 2020 was $8.4 million, down $1.5 million from the comparable~~same period a year ago. The decrease ~~for the three months ended July 31, 2020~~ was largely due to ~~having~~ lower ~~net debt as compared to the same period a year ago. Interest~~amortization of intangible assets expense ~~net for the nine months ended July 31, 2020 was $26.6~~of $3.3 million ~~up $0.2~~offset by higher stock-based compensation expense of $1.2 million. Excluding amortization of intangible assets and stock-based compensation expense, G&A expenses were down $2.0 million ~~from the same S/P combined period from a year ago.~~year-over-year.

Goodwill and Intangibles Impairment
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 April 30, 2021, no subsequent triggering events have been identified.
Change in Fair Value of Warrant Liabilities
During the second quarter of fiscal 2021 and 2020 we recognized a $11.5 million loss and a $3.3 million gain, respectively, on the fair value remeasurement of our liability-classified warrants. For the first six-months of fiscal 2021 and 2020, we recognized an $11.5 million loss and a $2.9 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 is due to the substantial increase in the Company's share price since April 30, 2020.
Transaction Costs & Debt Extinguishment Costs
Transaction costs include expenses for legal, accounting, and other professionals that were engaged in connection with an acquisition. There were no ~~additional impairments recorded~~significant transaction costs incurred during the three and six-month periods ended April 30, 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 April 30, 2021 was $6.0 million, down $2.7 million from $8.8 million in second quarter of fiscal 2020. Interest expense, net for the six months ended ~~July 31,~~April 30, 2021 was $12.9 million, down $5.3 million from $18.3 the six-month period from a year ago. The decrease was due to having lower average debt during the second quarter of fiscal 2021 compared to the second quarter of fiscal 2020.
Income Tax (Benefit) Provision

For the second quarter of fiscal 2021, the Company recorded income tax expense of $ 0.2 million on a pretax loss of $ 10.7 million, versus a $ 2.2 million income tax benefit on a $ 57.9 million pretax loss during the same period in the prior year. For the first six months of fiscal 2021, the Company recorded an income tax benefit of $ 2.5 million on a pretax loss of $ 25.6 million, versus a $ 3.4 million income tax benefit on a pretax loss of $ 62.2 million.
46

39
Table of Contents

Adjusted EBITDA⁽¹⁾ and Net Income ~~Tax (Benefit) Provision~~(Loss)

For the third fiscal quarter ended July 31, 2020, the Company recorded income tax expense of $0.5 million on pretax income of $2.5 million. For the same quarter a year ago, the Company recorded a income tax benefit of $1.9 million on pretax income of $0.1 million. For the first nine months of 2020, the Company recorded an income tax benefit of $3.8 million on a pretax loss of $62.6 million. For the S/P combined nine-months ended July 31, 2019, we recorded an income tax benefit of $7.3 million on a pretax loss of $40.4 million. The effective tax rates for the periods presented were not meaningful.

Net Loss

Adjusted EBITDA

Three Months Ended April 30,

Three Months Ended April 30,

Change

(in thousands, except percentages)

2021

2020

2021

2020

$

%

U.S. Concrete Pumping
$ (925 ) $ (44,303 ) $ 16,306 $ 16,319 $ (13 ) -0.1 %
U.K. Operations
402 (15,955 ) 4,114 2,516 1,598 63.5 %
U.S. Concrete Waste Management Services
833 859 4,002 4,055 (53 ) -1.3 %
Corporate
(11,163 ) 3,685 625 625 (0 ) 0.0 %
Total adjusted EBITDA
$ (10,853 ) $ (55,714 ) $ 25,047 $ 23,515 $ 1,532 6.5 %

~~The factors impacting comparability between our effective tax rates for the periods discussed above are as follows:~~
~~(1)~~
~~For the period ended December 5, 2018, the Predecessor recorded nondeductible transaction related costs that resulted in a $1.4 million permanent tax difference;~~
~~(2)~~
The Successor included $0.2 million of tax benefit in the estimated annual effective rate for the period ended July 31, 2019 related to foreign income inclusions compared to $0.3 million of tax expense for the period ended July 31, 2020 and $0.0 for the Predecessor period ended December 5, 2018;
~~(3)~~
~~The Successor included $0.9 million of tax expense related to the increase in the deferred statutory U.K. corporate tax rate from 17% to 19% in the period ended July 31, 2020~~
~~(4)~~
Of the $57.9 million of impairments recorded for goodwill and intangibles by the Company during the second quarter of fiscal 2020, only $11.9 million was deductible for tax purposes ($2.9 million tax benefit to the Company) as the remaining impairment was related to nondeductible goodwill;
~~(5)~~
The Successor included a tax benefit of $1.4 million in the period ended July 31, 2020 related to write-up in the carrying value of certain net operating losses (“NOL”) carryforwards as it was determined that those NOLs would be carried back to prior years pursuant to the provisions included in the CARES Act (see below for further details);
~~(6)~~ For the period ended July 31, 2020, the Successor recorded nondeductible expenses related to a contingent liability (see discussion in the G&A section above for further detail) that resulted in a $0.4 million permanent tax difference; and
~~(7)~~ Changes in our estimated full year income before tax and the related impact on our estimated full year effective tax rate that was applied to year to date losses for the Successor periods ended July 31, 2020 and 2019.
~~Adjusted EBITDA~~⁽¹⁾

Successor

Change

(in thousands, except percentages)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

$

%

U.S. Concrete Pumping
$ 21,170 $ 22,029 $ (859 ) -3.9 %
U.K. Operations
3,397 4,278 (881 ) -20.6 %
U.S. Concrete Waste Management Services
4,846 3,628 1,218 33.6 %
Corporate
625 625 - 0.0 %
$ 30,038 $ 30,560 $ (522 ) -1.7 %
47

~~Table of Contents~~

Successor

Predecessor

S/P Combined (non-GAAP)

Change

(in thousands)

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

Nine Months Ended July 31, 2019

$

%

U.S. Concrete Pumping
$ 54,338 $ 36,707 $ 7,627 $ 44,334 $ 10,004 22.6 %
U.K. Operations 8,524 9,706 1,396 11,102 (2,578 ) -23.2 %
U.S. Concrete Waste Management Services 12,650 8,309 388 8,697 3,953 45.5 %
Corporate 1,875 1,633 177 1,810 65 3.6 %
$ 77,387 $ 56,355 $ 9,588 $ 65,943 $ 11,444 17.4 %

Net Loss

Adjusted EBITDA

Six Months Ended April 30,

Six Months Ended April 30,

Change

(in thousands)

2021

2020

2021

2020

$

%

U.S. Concrete Pumping
$ (13,602 ) $ (46,790 ) $ 31,592 $ 33,166 $ (1,574 ) -4.7 %
U.K. Operations
(129 ) (16,848 ) 6,861 5,127 1,734 33.8 %
U.S. Concrete Waste Management Services
1,450 1,225 7,702 7,804 (102 ) -1.3 %
Corporate
(10,862 ) 3,563 1,250 1,250 (0 ) 0.0 %
Total adjusted EBITDA
$ (23,143 ) $ (58,850 ) $ 47,405 $ 47,347 $ 58 0.1 %
⁽¹⁾Please see ~~“Non-GAAP~~“Non-GAAP Measures (EBITDA and Adjusted EBITDA)” below ~~for a reconciliation of these non-GAAP measures to their most comparable GAAP measures.~~

U.S. Concrete Pumping

Adjusted EBITDA for our U.S. Concrete Pumping segment was ~~$21.2~~$16.3 million for both the three months ended ~~July 31, 2020, down 3.9% from $22.0 million~~April 30, 2021 and for the ~~same period in~~second quarter of fiscal ~~2019. The slight decrease was primarily attributable to~~2020. For the ~~impact from COVID-19.~~
~~Adjusted~~six months ended April 30, 2021, adjusted EBITDA for our U.S. Concrete Pumping segment was ~~$54.3~~$31.6 million, down 4.7% from $33.2 million. The year-over-year decline for the ~~first nine-months of 2020, up 22.6% from $44.3 million for~~six-month period was primarily attributable to the ~~S/P combined nine-months ended July 31, 2019. The significant~~ year-over-year ~~increase was due primarily to (1) the acquisition of Capital, (2) improved gross margins as a result of more favorable fuel pricing and improvement~~change in ~~the Company's procurement costs, and (3) volume growth across many of the U.S. markets.~~revenue discussed previously.

U.K. Operations

Adjusted EBITDA for our U.K. Operations segment was ~~$3.4~~$4.1 million for the ~~three-months~~three months ended ~~July 31, 2020, down 20.6% from $4.3~~April 30, 2021 as compared to $2.5 million for the ~~third quarter of 2019.~~same period in fiscal 2020. For the ~~nine-months~~six months ended ~~July 31, 2020,~~April 30, 2021, adjusted EBITDA for our U.K. Operations segment was ~~$8.5~~$6.9 million, ~~down 23.2%~~up 33.8% from ~~$11.1~~$5.1 million for the ~~S/P combined nine-months ended July 31, 2019.~~same period in fiscal 2020. The ~~decreases in both periods are~~year-over-year increase was primarily attributable to the year-over-year change in revenue ~~due to COVID-19~~ discussed previously.

U.S. Concrete Waste Management Services

Adjusted EBITDA for our U.S. Concrete Waste Management Services segment was ~~$4.8~~$4.0 million for the ~~three-months~~three months ended ~~July 31, 2020, up 33.6% from $3.6 million~~April 30, 2021 and $7.7 for the ~~third quarter of 2019. For~~six months ended April 30, 2021. Both periods were relatively flat with the nine-months ended July 31, 2020, adjusted EBITDA for our U.S. Concrete Waste Management Services segment was $12.7 million, up 45.5% from $8.7 million for the S/P combined nine-months ended July 31, 2019. The increasessame comparative periods in ~~both periods are primarily attributable to the year-over-year change in revenue discussed previously.~~fiscal 2020.

Corporate

There was ~~limited~~no movement in Adjusted EBITDA for our Corporate segment for both periods presented. Any year-over-year changes for our Corporate segment ~~was~~is primarily related to the allocation of overhead costs.

4840

Table of Contents

~~LIQUIDITY AND CAPITAL RESOURCES~~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 ~~Credit Agreement”~~Facility”), which provides for aggregate borrowings of up to ~~$60.0~~$125.0 million, subject to a borrowing base limitation. As of ~~July 31, 2020,~~April 30, 2021, we had ~~$4.1~~$13.7 million of cash and cash equivalents and ~~$39.4~~$121.2 million of available borrowing capacity under the ABL ~~Credit Agreement,~~Facility, providing total available liquidity of ~~$43.5~~$134.9 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 ~~Term Loan Agreement (defined below)~~Senior Notes and (4) short-term financing under our ABL ~~Credit Agreement.~~Facility. We may from time to time seek to retire or pay down borrowings on the outstanding balance of our ABL ~~Credit Agreement~~Facility or ~~Term Loan Agreement~~Senior Notes using cash on hand. Such repayments, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

~~After consideration of any potential impacts from COVID-19 on our operations, we~~We believe our existing cash and cash equivalent balances, cash flow from operations and borrowing capacity under our ABL ~~Credit Agreement~~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 ~~could~~would restrict our operations.

4941

Table of Contents

~~Term Loan Agreement~~Senior Notes and ABL ~~Credit Agreement~~Facility

As part of the Business Combination, the Predecessor’s Revolver, U.K. Revolver, Senior secured notes, and Seller notes (see Predecessor section below for a discussion of these agreements) were all extinguished and the Company entered into (i) a Term Loan Agreement, dated December 6, 2018, among the Company, certain subsidiaries of the Company, Credit Suisse AG, Cayman Islands Branch as administrative agent and Credit Suisse Loan Funding LLC, Jefferies Finance LLC and Stifel Nicolaus & Company Incorporated LLC as joint lead arrangers and joint bookrunners, and the other Lenders party thereto (the “Term Loan Agreement”) (ii) a Credit Agreement, dated December 6, 2018, among the Company, certain subsidiaries of the Company, Wells Fargo Bank, National Association, as agent, sole lead arranger and sole bookrunner, the other Lenders party thereto and the other parties thereto (“ABL Credit Agreement”). Summarized terms of those debt agreements are included below.

~~Term Loan Agreement~~Senior Notes

Summarized terms of the ~~Term Loan Agreement~~senior secured notes are as follows:

●
Provides for an original aggregate principal amount of ~~$357.0 million. This amount was increased in May 2019 by $60.0 million in connection with the acquisition of Capital;~~$375.0 million;
●
The ~~initial term loans advanced~~Senior Notes will mature and be due and payable in full ~~seven years after the issuance, with principal amortization payments in an annual amount equal to 5.00% of the original principal amount;~~on February 1, 2026;
●
~~Borrowings under the Term Loan Agreement, will bear interest at either (1) an adjusted LIBOR rate or (2) an alternate base rate, plus an applicable margin of 6.00% or 5.00%, respectively;~~
●
The ~~Term Loan Agreement is secured by (i)~~Senior Notes bear interest at a ~~first priority perfected lien~~rate of 6.000% per annum, payable on ~~substantially all of the assets of the Company~~February 1^st and certain of its subsidiaries that are loan parties thereunder to the extent not constituting ABL Credit Agreement priority collateral and (ii) a second priority perfected lien on substantially all ABL Credit Agreement priority collateral, inAugust 1^st each ~~case subject to customary exceptions and limitations;~~year;
●
The ~~Term Loan Agreement~~Senior 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 are borrowers and certain of the guarantors under the ABL Facility (collectively, the "Guarantors"). The Senior Notes and the guarantees are secured on a second-priority basis by all the assets of the Issuer and the Guarantors that secure the obligations under the ABL Facility, subject to certain exceptions. The Senior Notes and the guarantees will be the Issuer’s 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 indebtedness and liabilities of the Company’s subsidiaries that do not guarantee the Senior Notes;
●
The Indenture includes certain ~~non-financial covenants.~~
covenants that limit, among other things, the Issuer’s ability and the ability of its restricted subsidiaries to: incur additional indebtedness and issue certain preferred stock; make certain investments, distributions and other restricted payments; create or incur certain liens; 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 ~~balance under the Term Loan Agreement~~principal amount of Senior Notes as of ~~July 31, 2020~~April 30, 2021 was ~~$386.4~~$375.0 million and as of that date, the Company was in compliance with all ~~debt covenants. The Company’s interest on borrowings~~covenants under the Term Loan Agreement bear interest using the London Interbank Offered Rate (LIBOR) as the base rate plus an applicable margin in line with the summarized terms of the Term Loan Agreement as described above.Indenture.

5042

Table of Contents

Asset Based Revolving Lending Credit Agreement

Summarized terms of the ABL ~~Credit Agreement~~Facility, as amended on January 28, 2021, are as follows:

●
Borrowing availability in U.S. Dollars and GBP up to a maximum of ~~$60.0~~$125.0 million and an accordion feature under which the Company can increase the ABL Facility by up to an additional $75.0 million;

●
Borrowing capacity available for standby letters of credit of up to $7.5 ~~million and for swing loan borrowings of up to $7.5 million. Any issuance of letters of credit or making of a swing loan will reduce the amount available under the ABL Facility;~~million;

●
All loans advanced will mature and be due and payable in full ~~five years after the issuance;~~on January 28, 2026;

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

●
~~Interest on borrowings~~Borrowings in U.S. Dollars and GBP ~~under the ABL Credit Agreement, will~~ bear interest at either (1) an adjusted LIBOR rate or (2) a base rate, in each case plus an applicable margin currently set at ~~2.25%~~2.0% and ~~1.25%,~~1.00% per annum, respectively. The ABL ~~Credit Agreement~~Facility is subject to ~~two step-downs~~a step-down of 0.25% ~~and 0.50%~~ based on excess availability levels;

●
~~U.S.~~US ABL ~~Credit Agreement~~Facility obligations will be secured by ~~(i)~~ a first-priority perfected ~~first priority~~ security interest in substantially all ~~personal property~~the assets of the ~~Company and~~US ABL Guarantors, subject to certain of its subsidiaries that are loan parties thereunder consisting of all accounts receivable, inventory, cash, intercompany notes, books and records, chattel paper, deposit, securities and operating accounts and all other working capital assets and all documents, instruments and general intangibles related to the foregoing (the “U.S.exceptions;
●
UK ABL ~~Priority Collateral”) and (ii)~~Facility obligations will be secured by a first priority perfected ~~second priority~~ security interest in substantially all ~~Term Loan Agreement priority collateral, in each case subject to customary exceptions and limitations;~~
●
~~U.K. ABL Credit Agreement obligations will be secured by (i) a perfected first-priority security interest in (A) the U.S. ABL Priority Collateral, (B) all~~assets of the stock (or other ownership interests) in, and held by, the U.K. borrower subsidiaries of the Company, and (C) all of the current and future assets and property of the U.K subsidiaries of the Company that are loan parties thereunder, including a first-ranking floating charge over all current and future assets and property of each U.K. subsidiary of the Company that is a loan party thereunder; and (ii) a perfected, second-priority security interest in substantially all Term Loan Agreement priority collateral, in each case subject to customary exceptions and limitations;UK ABL Guarantors; and

●
The ABL ~~Credit Agreement~~Facility also includes (i) a springing financial covenant (fixed charges coverage ratio) based on excess availability levels that the Company must comply with on a quarterly basis during required compliance periods and (ii) certain non-financial covenants.

The outstanding balance under the amended ABL ~~Credit Agreement~~Facility as of ~~July 31, 2020~~April 30, 2021 was ~~$13.0~~$1.1 million and as of that date, the Company was in compliance with all debt covenants.

5143

Table of Contents

Cash Flows
~~Successor~~

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 ~~(used in)~~ 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-months~~six months ended ~~July 31, 2020~~April 30, 2021 was ~~$53.5~~$36.2 million. The Company had a net loss of ~~$58.7~~$23.1 million that included an increase of $2.9 million in our net deferred income taxes, a gain on sale of assets of $0.9 million, and significant non-cash charges ~~net~~ totaling ~~$110.2~~$60.3 million as follows: (1) ~~Goodwill and intangibles impairment of $57.9 million, (2)~~ depreciation of ~~$19.5~~$14.0 million, ~~(3)~~(2) amortization of intangible assets of ~~$25.3~~$13.9 million, ~~(4)~~(3) amortization of deferred financing costs of ~~$3.1~~$1.4 million, ~~and~~(4) loss on extinguishment of debt expense of $15.5 million, (5) stock-based compensation expense of ~~$4.2 million.~~$4.0 million, and (6) an $11.5 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 ~~$1.7~~$3.1 million in trade receivables, ~~and~~ (2) an increase of ~~$10.8~~$2.4 million in accrued payroll, accrued expenses and other current ~~liabilities.~~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 ~~the following activity: (1)~~ a ~~$3.5~~$3.4 million increase in prepaid expenses and other current assets, (2) a $0.5 million payment of contingent consideration in excess of amounts established in purchase accounting, (3) a decrease of $3.9 million in income taxes payable, and (4) a decrease of $1.5 million in accounts payable.assets.

We used ~~$30.3~~$13.0 million to fund investing activities during the ~~nine-months~~six months ended ~~July 31, 2020.~~April 30, 2021. The Company used ~~$36.7~~$16.7 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~~$3.7 million.

Net cash used in financing activities was ~~$27.8~~$15.8 million for the ~~nine-months~~six months ended ~~July 31,~~April 30, 2021. Financing activities during this period included $0.8 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 six months ended April 30, 2020 was $27.0 million. The Company had a net loss of $58.9 million that included a non-cash gain of $2.9 million from the change in fair value of warrant liabilities, an increase of $3.5 million in our net deferred income taxes, a gain on sale of assets of $0.5 million and significant non-cash charges totaling $93.0 million as follows: (1) Goodwill and intangibles impairment of $57.9 million, (2) depreciation of $13.0 million, (3) amortization of intangible assets of $17.1 million, (4) amortization of deferred financing costs of $2.1 million and (5) stock-based compensation expense of $2.9 million. In addition, we had cash outflows related to the following activity: (1) a $5.2 million increase in prepaid expenses and other current assets and (2) 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 $4.0 million in trade receivables and (2) an increase of $1.1 million in accrued payroll, accrued expenses and other current liabilities.
We used $19.7 million to fund investing activities during the six months ended April 30, 2020. The Company used $23.3 million for the purchase of property, plant and equipment, which was partially offset by proceeds from the sale of property, plant and equipment of $3.6 million.
Net cash provided by financing activities was $4.4 million for the six months ended April 30, 2020. Financing activities during this period included ~~$10.7~~$16.2 million in net ~~payments~~borrowings under the Company’s ABL Credit Agreement ~~$15.7 in~~and was partially offset by payments on the ~~Company's~~ Term Loan Agreement of $10.4 million and the payment of the contingent consideration in connection with the acquisition of Camfaud of $1.2 million.

Net cash used in operating activities during the period from December 6, 2018 through July 31, 2019 (the “Successor Period”) was $1.4 million. The Company had a net loss of $10.5 million that included significant non-cash charges totaling $42.7 million as follows: (1) depreciation of $14.1 million, (2) amortization of intangible assets of $22.2 million, (3) amortization of deferred financing costs of $1.4 million, (4) stock-based compensation expense of $2.0 million, and (5) an increase of $3.0 million in our net deferred income taxes. In addition, we had cash outflows related to the following activity: (1) a $4.2 million increase in prepaid expenses and other current assets, (2) a $4.3 million increase in trade receivables, (3) a decrease of $8.6 million in accrued payroll, accrued expenses and other current liabilities, (4) a decrease of $7.7 million in accounts payable, and (5) a decrease of $0.3 million in income taxes payable.
We used $370.6 million to fund investing activities during the Successor Period. The Company paid $449.4 million to fund the Business Combination, $129.2 million to fund the acquisition of Capital and $2.3 million to fund other business combinations. Additionally, $29.7 million was used to purchase machinery, equipment, and other vehicles to service our business. These cash outflows were partially offset by $238.5 million in cash withdrawn from Industrea trust account in addition to proceeds from the sale of property, plant and equipment of $1.5 million.
Net cash provided from financing activities was $376.9 million for the Successor Period. Financing activities during the Successor Period included $417.0 million in proceeds from our new Term Loan Agreement, $32.2 million in net borrowings under the Company’s new ABL Credit Agreement, $174.3 million from the issuance of common shares, $1.4 million in proceeds from the exercise of stock options and an additional $25.0 million from the issuance of preferred stock. All of these cash inflows were used to the fund the Business Combination and other operational activity such as equipment purchases. These cash inflows were offset by payments for redemptions of common stock totaling $231.4 million, $23.7 million for the payment of debt issuance costs associated with the Term Loan Agreement and new ABL Credit Agreement, and $8.1 million in payments for underwriting fees.
5244

~~Table of Contents~~
~~Predecessor~~
Net cash provided by operating activities during the period from November 1, 2018 through December 5, 2018 (the “Predecessor Period”) was $7.9 million. The Company had a net loss of $22.6 million that included significant non-cash charges totaling $18.5 million as follows: (1) depreciation of $2.1 million, (2) prepayment penalty on early extinguishment of debt of $13.0 million, and (3) write off deferred debt issuance costs of $3.4 million. The Company had cash outflows due to (1) an increase of $0.3 million in inventory, (2) a $1.3 million increase in prepaid expenses and other current assets, (3) an increase of $4.4 million in our net deferred income taxes, and (4) a $0.7 million decrease in accounts payable. The amounts were more than offset by cash inflows from an increase of $17.3 million in accrued payroll, accrued expenses and other current liabilities.
We used $0.1 million to fund investing activities during the Predecessor Period. We used $0.5 million to fund purchases of machinery, equipment and other vehicles to service our business. This was offset by $0.4 million in proceeds received from the sale of property, plant and equipment.
We used $15.4 million to fund financing activities during the Predecessor Period and this activity was driven by $15.4 million of net borrowings under the Revolver to operate our business and fund acquisitions.
~~Off-Balance Sheet Arrangements~~
We do not currently have any off-balance sheet arrangements that have had or are reasonably likely to have a material current or future effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures, or capital resources. From time to time, we enter into non-cancellable operating leases that are not reflected on our balance sheet. At July 31, 2020, we had $1.2 million of undrawn letters of credit outstanding.
53

Table of Contents

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 to 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 ~~make.~~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 ~~newly~~ publicly-traded company and other non-recurring ~~costs,~~costs. In addition, within the individual segment presentations only, other adjustments also include transfer pricing and allocation of intercompany related expenses, which ~~includes the $2.0 million estimated loss recorded during the fiscal 2020 third quarter for the contingent liability related to certain of the Company's prior shareholders.~~are eliminated in consolidation.

S/P Combined

Successor

Predecessor

(non-GAAP)

Three Months Ended April 30,

Six Months Ended April 30,

(in thousands)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

Nine Months Ended July 31, 2019

2021

2020

2021

2020

Consolidated

Net income (loss)
$ 2,981 $ 2,762 $ (58,733 ) $ (10,513 ) $ (22,575 ) $ (33,088 ) $ (10,853 ) $ (55,714 ) $ (23,143 ) $ (58,850 )
Interest expense, net 8,364 9,843 26,632 24,753 1,644 26,397 6,029 8,765 12,929 18,268
Income tax benefit
(462 ) (1,922 ) (3,829 ) (3,115 ) (4,192 ) (7,307 ) 170 (2,221 ) (2,478 ) (3,368 )
Depreciation and amortization
14,665 16,477 44,827 36,984 2,713 39,697 14,007 15,076 27,844 30,162
EBITDA 25,548 27,160 8,897 48,109 (22,410 ) 25,699 9,353 (34,094 ) 15,152 (13,788 )
Transaction expenses - 176 - 1,458 14,167 15,625 55 - 84 -
Loss on debt extinguishment - - - - 16,395 16,395 - - 15,510 -
Stock-based compensation 1,357 1,625 4,208 1,986 - 1,986 3,350 1,383 4,022 2,850
Change in fair value of warrant liabilities
11,456 (3,254 ) 11,456 (2,864 )
Other income, net (36 ) (28 ) (139 ) (59 ) (6 ) (65 ) (26 ) (33 ) (52 ) (103 )
Goodwill and intangibles impairment - - 57,944 - - - - 57,944 - 57,944
Other adjustments 3,169 1,627 6,477 4,861 1,442 6,303 859 1,569 1,233 3,308
Adjusted EBITDA $ 30,038 $ 30,560 $ 77,387 $ 56,355 $ 9,588 $ 65,943 $ 25,047 $ 23,515 $ 47,405 $ 47,347

5445

Table of Contents

Successor

Predecessor

S/P Combined (non-GAAP)

Three Months Ended April 30,

Six Months Ended April 30,

(in thousands)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

Nine Months Ended July 31, 2019

2021

2020

2021

2020

U.S. Concrete Pumping

Net income (loss)
$ 865 $ 1,432 $ (45,925 ) $ (11,532 ) $ (25,252 ) $ (36,784 ) $ (925 ) $ (44,303 ) $ (13,602 ) $ (46,790 )
Interest expense, net
7,620 9,046 24,448 22,758 1,154 23,912 5,247 8,096 11,370 16,828
Income tax benefit
(368 ) (2,482 ) (4,505 ) (3,414 ) (2,102 ) (5,516 ) (381 ) (2,751 ) (3,204 ) (4,138 )
Depreciation and amortization
9,745 9,938 29,893 21,471 1,635 23,106 9,405 10,144 18,677 20,148
EBITDA
17,862 17,934 3,911 29,283 (24,565 ) 4,718 13,346 (28,814 ) 13,241 (13,952 )
Transaction expenses
- 1,458 - 1,458 14,167 15,625 55 - 84 -
Loss on debt extinguishment - - - - 16,395 16,395 - - 15,510 -
Stock-based compensation
1,357 1,625 4,208 1,986 - 1,986 3,350 1,383 4,022 2,850
Other income, net
1 (26 ) (16 ) (57 ) (6 ) (63 ) (12 ) (7 ) (24 ) (17 )
Goodwill and intangibles impairment - - 43,500 - - - - 43,500 - 43,500
Other adjustments
1,950 1,038 2,735 4,037 1,636 5,673 (433 ) 257 (1,241 ) 785
Adjusted EBITDA $ 21,170 $ 22,029 $ 54,338 $ 36,707 $ 7,627 $ 44,334 $ 16,306 $ 16,319 $ 31,592 $ 33,166

Successor

Predecessor

S/P Combined (non-GAAP)

(in thousands)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

Nine Months Ended July 31, 2019

U.K. Operations

Net income (loss)
$ (20 ) $ 999 $ (16,868 ) $ 230 $ 158 $ 388
Interest expense, net
744 796 2,184 1,994 490 2,484
Income tax expense (benefit)
(61 ) 354 333 60 49 109
Depreciation and amortization
2,052 2,864 6,313 7,161 890 8,051
EBITDA
2,715 5,013 (8,038 ) 9,445 1,587 11,032
Transaction expenses - - - - - -
Loss on debt extinguishment - - - - - -
Stock-based compensation - - - - - -
Other income, net (37 ) - (123 ) - - -
Goodwill and intangibles impairment - - 14,444 - - -
Other adjustments
719 (735 ) 2,241 261 (191 ) 70
Adjusted EBITDA $ 3,397 $ 4,278 $ 8,524 $ 9,706 $ 1,396 $ 11,102

Three Months Ended April 30,

Six Months Ended April 30,

(in thousands)

2021

2020

2021

2020

U.K. Operations

Net income (loss)
$ 402 $ (15,955 ) $ (129 ) $ (16,848 )
Interest expense, net
782 669 1,559 1,440
Income tax expense (benefit)
79 509 (98 ) 394
Depreciation and amortization
2,071 2,065 4,081 4,261
EBITDA
3,334 (12,712 ) 5,413 (10,753 )
Transaction expenses
- - - -
Loss on debt extinguishment
- - - -
Stock-based compensation
- - - -
Other income, net
(12 ) (26 ) (26 ) (86 )
Goodwill and intangibles impairment
- 14,444 - 14,444
Other adjustments
792 810 1,474 1,522
Adjusted EBITDA
$ 4,114 $ 2,516 $ 6,861 $ 5,127

5546

Table of Contents

Successor

Predecessor

S/P Combined (non-GAAP)

(in thousands)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

Nine Months Ended July 31, 2019

U.S. Concrete Waste Management Services

Net income (loss)
$ 1,679 $ 321 $ 2,904 $ (65 ) $ 2,009 $ 1,944
Interest expense, net
- 1 - 1 - 1
Income tax expense (benefit)
6 8 245 (20 ) (1,784 ) (1,804 )
Depreciation and amortization
2,661 3,257 8,000 7,832 163 7,995
EBITDA
4,346 3,587 11,149 7,748 388 8,136
Transaction expenses - - - - - -
Loss on debt extinguishment - - - - - -
Stock-based compensation - - - - - -
Other income, net
- (2 ) - (2 ) - (2 )
Goodwill and intangibles impairment - - - - - -
Other adjustments
500 43 1,501 563 - 563
Adjusted EBITDA $ 4,846 $ 3,628 $ 12,650 $ 8,309 $ 388 $ 8,697

Successor

Predecessor

S/P Combined (non-GAAP)

Three Months Ended April 30,

Six Months Ended April 30,

(in thousands)

Three Months Ended July 31, 2020

Three Months Ended July 31, 2019

Nine Months Ended July 31, 2020

December 6, 2018 through July 31, 2019

November 1, 2018 through December 5, 2018

Nine Months Ended July 31, 2019

2021

2020

2021

2020

Corporate

Net income
$ 457 $ 10 $ 1,156 $ 854 $ 510 $ 1,364
U.S. Concrete Waste Management Services

Net income (loss)
$ 833 $ 859 $ 1,450 $ 1,225
Interest expense, net - - - - - - - - - -
Income tax expense (benefit)
(39 ) 198 98 259 (355 ) (96 ) 348 34 584 239
Depreciation and amortization
207 418 621 520 25 545 2,323 2,660 4,670 5,339
EBITDA 625 626 1,875 1,633 180 1,813 3,504 3,553 6,704 6,803
Transaction expenses - (1,282 ) - - - - - - - -
Loss on debt extinguishment - - - - - - - - - -
Stock-based compensation - - - - - - - - - -
Other income, net - - - - - - (2 ) - (2 ) -
Goodwill and intangibles impairment - - - - - - - - - -
Other adjustments - 1,281 - - (3 ) (3 ) 500 502 1,000 1,001
Adjusted EBITDA $ 625 $ 625 $ 1,875 $ 1,633 $ 177 $ 1,810 $ 4,002 $ 4,055 $ 7,702 $ 7,804

Three Months Ended April 30,

Six Months Ended April 30,

(in thousands)

2021

2020

2021

2020

Corporate

Net income
$ (11,163 ) $ 3,685 $ (10,862 ) $ 3,563
Interest expense, net
- - - -
Income tax expense (benefit)
124 (13 ) 240 137
Depreciation and amortization
208 207 416 414
EBITDA
(10,831 ) 3,879 (10,206 ) 4,114
Transaction expenses
- - - -
Loss on debt extinguishment
- - - -
Stock-based compensation
- - - -
Change in fair value of warrant liabilities
11,456 (3,254 ) 11,456 (2,864 )
Other income, net
- - - -
Goodwill and intangibles impairment
- - - -
Other adjustments
- - - -
Adjusted EBITDA
$ 625 $ 625 $ 1,250 $ 1,250
Jobs Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. ~~As we are an emerging growth company, we have qualified for and~~We have previously elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. If we were to subsequently elect instead to comply with these public company effective dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act.

5647

Table of Contents

Critical Accounting Policies and Estimates

In presenting our financial statements in conformity with U.S. GAAP, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material impact to our consolidated and combined results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time. Presented below are those accounting policies that we believe require subjective and complex judgments that could potentially affect reported results. However, the majority of our business activities are in environments where we are paid a fee for a service performed, and therefore the results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.

Listed below are those estimates that we believe are critical and require the use of complex judgment in their application.

Goodwill and Intangible Assets

In accordance with ASC Topic 350, Intangibles–Goodwill and Other (“ASC 350”), the Company evaluates goodwill for possible impairment annually, generally as of August 31st, or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses a two-step process to assess the realizability of goodwill. The first step is a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit. For example, the Company analyzes changes in economic, market and industry conditions, business strategy, cost factors, and financial performance, among others, to determine if there are indicators of a significant decline in the fair value of a particular reporting unit. If the qualitative assessment indicates a stable or improved fair value, no further testing is required. If a qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company will proceed to the quantitative second step where the fair value of a reporting unit is calculated based on weighted income and market-based approaches. If the fair value of a reporting unit is lower than its carrying value, an impairment to goodwill is recorded, not to exceed the carrying amount of goodwill in the reporting unit.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. Estimating fair value of individual reporting units and indefinite-lived intangible assets requires us to make assumptions and estimates regarding out future plans, as well as industry and economic conditions including those relating to the duration and severity of COVID-19. These assumptions and estimates include projected revenue, royalty rate, discount rate, tax amortization benefit and other market factors outside of our control. The Company elects to perform a qualitative assessment for the other quarterly reporting periods throughout the fiscal year.
During the second quarter of fiscal year 2020, the Company identified a triggering event from the recent decline in its stock price and deterioration in general economic conditions resulting from the COVID-19 pandemic. As a result, the Company performed an interim step one goodwill impairment analysis in accordance with ASU 2017-04, Intangibles — Goodwill and Other (ASC 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) and recorded a goodwill and intangibles impairment charge of $57.9 million. No such impairment was required during ~~the~~ fiscal ~~2020 third quarter.~~2021.

When we perform any goodwill impairment test, the estimated fair value of our reporting units are determined using an income approach that utilizes a discounted cash flow (“DCF”) model and a market approach that utilizes the guideline public company method (“GPC”), both of which are weighted for each reporting unit and are discussed below in further detail. In accordance with ASC Topic 820, Fair Value Measurement ("ASC 820"), we evaluated the methods for reasonableness and reliability and assigned weightings accordingly. A mathematical weighting is not prescribed by ASC 820, rather it requires judgement. As such, each of the valuation methods were weighted by accounting for the relative merits of each method and considered, among other things, the reliability of the valuation methods and the inputs used in the methods. In addition, in order to assess the reasonableness of the fair value of our reporting units as calculated under both approaches, we also compare the Company’s total fair value to its market capitalization and calculate an implied control premium (the excess sum of the reporting unit’s fair value over its market capitalization). We evaluate the implied control premium by comparing it to control premiums of recent comparable market transactions, as applicable.

5748

Table of Contents

Under the income approach, the DCF model is based on expected future after-tax operating cash flows of the reporting unit, discounted to a present value using a risk-adjusted discount rate. Estimates of future cash flows require management to make significant assumptions concerning (i) future operating performance, including future sales, long-term growth rates, operating margins, variations in the amount and timing of cash flows and the probability of achieving the estimated cash flows, (ii) the probability of regulatory approvals, and (iii) future economic conditions, including the extent and duration of the COVID-19 pandemic, all of which may differ from actual future cash flows. These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The discount rate, which is intended to reflect the risks inherent in future cash flow projections, used in the DCF model, is based on estimates of the weighted average cost of capital (“WACC”) of market participants relative to our reporting unit. Financial and credit market volatility can directly impact certain inputs and assumptions used to develop the WACC. Any changes in these assumptions may affect our fair value estimate and the result of an impairment test. The discount rates and other inputs and assumptions are consistent with those that a market participant would use.

The GPC method provides an estimate of value using multiples derived from the stock prices of publicly traded companies. This method requires a selection of comparable publicly-traded companies on major exchanges and involves a certain degree of judgment, as no two companies are entirely alike. These companies should be engaged in the same or a similar line of business as the reporting units be evaluated. Once comparable companies are selected, the application of the GPC method includes (i) analysis of the guideline public companies' financial and operating performance, growth, intangible asset's value, size, leverage, and risk relative to the respective reporting unit, (ii) calculation of valuation multiples for the selected guideline companies, and (iii) application of the valuation multiples to each reporting unit's selected operating metrics to arrive at an indication of value. Market multiples for the selected guideline public companies are developed by dividing the business enterprise value of each guideline public company by a measure of its financial performance (e.g., earnings). The business enterprise value is calculated taking the market value of equity (share price times fully-diluted shares outstanding) plus total interest bearing debt net of cash, preferred stock and minority interest. The market value of equity is based upon the stock price of equity as of the valuation date, and the debt figures are taken from the most recently available financial statements as of the valuation date. In selecting appropriate multiples to apply to each reporting unit, we perform a comparative analysis between the reporting units and the guideline public companies. In making a selection, we consider the revenue growth, profitability and the size of the reporting unit compared to the guideline public companies, and the overall EBITDA multiples implied from the transaction price. In addition, we consider a control premium for purposes of estimating the fair value of our reporting units as we believe that a market participant buyer would be required to pay a premium for control of our business. The control premium utilized is based on control premiums observed in recent comparable market transactions.

The impairment charges were primarily due to COVID-19, which negatively impacted our market capitalization, drove an increase in the discount rate that is utilized in our DCF models, and negatively impacted near-term cash flow expectations.

Income Taxes

We are subject to income taxes in the U.S., U.K. and other jurisdictions. Significant judgment is required in determining our provision for income tax, including evaluating uncertainties in the application of accounting principles and complex tax laws.

Income taxes include federal, state and foreign taxes currently payable and deferred taxes arising from temporary differences between income for financial reporting and income tax purposes. Deferred tax assets and liabilities are determined based on the differences between the financial statement balances and the tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized.

5849

Table of Contents

Stock-Based Compensation.

ASC Topic 718, ~~Compensation—~~Compensation—Stock Compensation (“ASC 718”) requires that share-based compensation expense be measured and recognized at an amount equal to the fair value of share-based payments granted under compensation arrangements. The fair value of each restricted stock award or stock option awards (with an exercise price of $0.01) that only contains a time-based vesting condition is equal to the market value of our common stock on the date of grant. A substantial portion of the Company's stock awards contain a market condition. For those awards, we estimate the fair value using a Monte Carlo simulation model whereby the fair value of the awards is fixed at grant date and amortized over the longer of the remaining performance or service period. The Monte Carlo Simulation valuation model incorporates the following assumptions: expected stock price volatility, the expected life of the awards, a risk-free interest rate and expected dividend yield. Significant judgment is required in determining the expected volatility of our common stock. Due to the limited history of trading of the Company’s common stock, the Company determined expected volatility based on a peer group of publicly traded companies.

50
Table of Contents
Item 3.Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4.Controls and Procedures.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Our management, ~~evaluated,~~ with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of ~~July 31, 2020.~~
April 30, 2021. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as a result of a material weakness in internal control over financial reporting, ~~that was identified during the second quarter of 2020,~~ our disclosure controls and procedures were not effective as of ~~July 31, 2020.~~April 30, 2021, specifically, related to errors in our accounting for the warrants issued in connection with our IPO and a simultaneous private placement that continue to impact the Company.

~~Specifically, during completion of the Company’s goodwill and intangibles impairment analysis as of April 30, 2020, our Management determined its~~In response to this material weakness in internal control over financial reporting related to errors in our accounting for the ~~review of certain inputs~~warrants issued in connection with our IPO and a simultaneous private placement, we are implementing a new control to assess complex accounting issues reached in the ~~valuation analysis did not operate effectively, resulting in a material reduction~~past that continue to impact the ~~goodwill impairment originally recorded.~~ Company to ensure those conclusions reached are still appropriate. Our plans include increased communication among our personnel and third-party professionals with whom we consult regarding the application of complex accounting transactions. Our remediation plan can only be accomplished over time and will be continually reviewed to determine that it is achieving its objectives. We can offer no assurance that these initiatives will ultimately have the intended effects.
This error was identified and corrected prior to release of the Company’s fiscal 2021 second quarter ~~of fiscal 2020~~ Form 10-Q.

Management has since implemented a remediation plan intended to modify and improve the design of the controls in regard to the review of inputs into the valuation analysis by including an additional layer of review of the inputs utilized in the valuation analysis.
However, remedial controls must operate for a sufficient period of time for a definitive conclusion, through testing, that the deficiencies have been fully remediated and, as such, we can give no assurance that the measures we have undertaken have fully remediated the material weakness that we have identified or that additional material weaknesses will not arise in the future. As management continues to evaluate and improve internal control over financial reporting, we may decide to take additional measures to address control deficiencies, or in appropriate circumstances determine to modify the design of the Company’s internal controls.
Changes in Internal Control Over Financial Reporting

Other than the discussion above, there have been no changes in our internal control over financial reporting that occurred during our ~~third fiscal~~second quarter of ~~2020~~fiscal 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

5951

Table of Contents

Part II

Item 1. Legal Proceedings.

From time to time, we ~~are~~may have been and may again become involved in ~~various claims and lawsuits~~legal proceedings arising in the ordinary course of our ~~business~~business. We are not presently a party to any litigation that we believe ~~will~~to be material and we are not aware of any pending or threatened litigation against us that we believe could have a material adverse effect on our business, oroperating results, financial condition, ~~including claims and lawsuits alleging breaches of our contractual obligations.~~or cash flows.

Item 1A. Risk Factors.

~~Except as set forth below, there~~There have been no material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended October 31, ~~2019~~2020 filed with the SEC on January ~~14, 2020~~12, 2021 (the “Form 10-K”). as amended by Form 10-K/A filed on June 11, 2021. For a detailed discussion of the other risks that affect our business, please refer to the entire section entitled “Risk Factors” in the Form ~~10-K~~
~~Public health emergencies, epidemics, or pandemics, including the novel coronavirus, could adversely affect our business, results of operations and financial condition~~
The widespread outbreak of an illness or any other communicable disease, or any other public health emergency that results in economic and trade disruptions could negatively impact our business and the businesses of our customers. In December 2019, a novel strain of coronavirus, COVID-19, was identified and the virus continues to spread globally and the World Health Organization has declared COVID-19 a pandemic. Many countries and localities across the world have implemented orders to slow and limit the transmission of the virus. These orders have limited or prohibited certain economic activity, including, in some jurisdictions in which we operate, the shutdown of construction activity. If such an illness or infectious disease broke out at one or more of our offices, facilities or work sites, our operations, productivity and ability to complete projects in accordance with our contractual obligations may be significantly affected and we may incur increased labor and materials costs. In addition, if the customers with which we contract are affected by an outbreak of infectious disease, their construction and service projects may be delayed or cancelled, and we may incur significant operating losses and increased labor and materials costs.
Furthermore, the extent to which the COVID-19 pandemic will impact our business and results of operations 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; the impact of the pandemic on economic activity, including on construction projects and our customers’ demand for our services; our ability to effectively operate, including as a result of travel restrictions and mandatory business and facility closures; the ability of our customers to pay us for services rendered; any further closures of our and our 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 could have a material adverse effect on our business, financial condition, results of operations, and/or stock price.10-K/A.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None

Item 4.Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

(a) None
(b) None

6052

Table of Contents

Item 6. Exhibits.

The documents set forth below are filed herewith or incorporated herein by reference to the location indicated.

Exhibit No.

Description
31.1

Certification of the Chief Executive Officer required by Rule ~~13a-14(b)~~13a-14(a) or Rule15d-14(a).
31.2

Certification of the Chief Financial Officer required by Rule ~~13a-14(b)~~13a-14(a) or Rule15d-14(a).
32.1

Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule15d-14(b) and 18 U.S.C. Section 1350.
32.2

Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule15d-14(b) and 18 U.S.C. Section 1350.
101.INS
Inline XBRL Instance ~~Document. The instance document~~Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL ~~document.~~document)
101.SCH

Inline XBRL Taxonomy Extension Schema Document
101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

6153

Table of Contents

~~SIGNATURE~~SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CONCRETE PUMPING HOLDINGS, INC.

By: /s/ Iain Humphries

Name: Iain Humphries

Title: Chief Financial Officer and Secretary
(Authorized Signatory)

Dated: ~~September 9, 2020~~June 14, 2021

6254

	*Common Stock*					*Additional Paid-In*			*Accumulated Other Comprehensive*
(in thousands)	*Class A*		*Class B*			*Capital*			*Income (loss)*			*Accumulated Deficit*			*Total*
Balance at December 6, 2018	$	0	$	1		$	12,433		$	0		$	(7,434	)	$	5,000
Redemption of Class A common stock		0		0			(12,433	)		0			(3,577	)		(16,010	)
Issuance of Class A common stock		1		0			96,900			0			0			96,901
Rollover of Class A common stock as a result of the Business Combination		1		0			164,908			0			0			164,909
Conversion of Class B common stock		1		(1	)		0			0			0			0
Net loss		0		0			0			0			(3,630	)		(3,630	)
Foreign currency translation adjustment		0		0			0			(557	)		0			(557	)
Balance at January 31, 2019	$	3	$	0		$	261,808		$	(557	)	$	(14,641	)	$	246,613
Shares issued to acquire business		0		0			1,150			0			0		$	1,150
Stock-based compensation expense		0		0			361			0			0			361
Shares issued upon exercise of stock options and warrants		0		0			1,370			0			0			1,370
Shares issued upon awards of restricted stock		1		0			(1	)		0			0			0
Issuance of shares in exchange for warrants		0		0			5,158			0			(5,158	)		0
Net loss		0		0			0			0			(9,645	)		(9,645	)
Foreign currency translation adjustment		0		0			0			(1,349	)		0			(1,349	)
Balance at April 30, 2019	$	4	$	0		$	269,846		$	(1,906	)	$	(29,444	)	$	238,500
Shares issued upon public offering Class A common stock		2		0			77,385			0			0		$	77,387
Stock-based compensation expense		0		0			1,625			0			0			1,625
Net income		0		0			0			0			2,762			2,762
Foreign currency translation adjustment		0		0			0			(4,535	)		0			(4,535	)
Balance at July 31, 2019	$	6	$	0		$	348,856		$	(6,441	)	$	(26,682	)	$	315,739

	As previously reported			Revision adjustment			As revised
Warrant liabilities		0			7,031			7,031
Total liabilities		474,329			7,031			481,360

Additional paid-in capital		362,615			5,738			368,353
Accumulated deficit		(99,361	)		(12,769	)		(112,130	)
Total stockholders' equity		266,694			(7,031	)		259,663

	In Years
Buildings and improvements		15 to 40
Capital lease assets—buildings		40
Furniture and office equipment		2 to 7
Machinery and equipment		3 to 25
Transportation equipment		3 to 7

Consideration paid:	$	129,218

Net assets acquired:
Current assets	$	748
Intangible assets		45,500
Property and equipment		56,467
Liabilities assumed		(63	)
Total net assets acquired		102,652

Goodwill	$	26,566

Consideration paid:
Cash	$	445,386
Fair value of rollover equity		164,908
Net working capital adjustment		4,050
Total consideration paid	$	614,344

Net assets acquired:
Current assets	$	48,912
Intangible assets		208,063
Property and equipment		219,467
Liabilities assumed		(110,245	)
Total net assets acquired		366,197

Goodwill	$	248,147

(in thousands)	*Nine Months Ended July 31, 2020*		*Nine Months Ended July 31, 2019*
Revenue	$	225,111	$	24,396
Pro forma revenue adjustments by Business Combination
Capital		0		26,829
CPH		0		174,613
Total pro forma revenue	$	225,111	$	225,838

(in thousands)
2020 (excluding the period from November 1, 2019 to July 31, 2020)	$	8,077
2021		26,831
2021 (excluding the period from November 1, 2020 to April 30, 2021)			$	13,168
2022		21,589		21,747
2023		17,159		17,292
2024		13,779		13,892
2025				11,245
Thereafter		54,293		43,369
Total	$	141,728	$	120,713

(in thousands)	*U.S. Concrete Pumping*			*U.K. Operations*			*U.S. Concrete Waste Management Services*		*Corporate*		*Total*
Balance at October 31, 2019	$	185,782		$	41,173		$	49,133	$	0	$	276,088
Measurement-period adjustments		200			0			0		0		200
Impairments		(38,500	)		(14,444	)		0		0		(52,944	)
Foreign currency translation		0			221			0		0		221
Balance at July 31, 2020	$	147,482		$	26,950		$	49,133	$	0	$	223,565

	●	Provides for an original aggregate principal amount of ~~$357.0 million. This amount was increased in~~ ~~May 2019~~ $375.0~~by $60.0 million in connection with the acquisition of Capital;~~ million;
	●	The ~~initial term loans advanced~~Senior Notes will mature and be due and payable in full on ~~seven~~February 1, 2026; ~~years after the Closing Date, with principal amortization payments in an annual amount equal to 5.00% of the original principal amount;~~
	●	~~Borrowings under the Term Loan Agreement, will bear interest at either (~~1~~) an adjusted LIBOR rate or (~~2~~) an alternate base rate, plus an applicable margin of 6.00% or 5.00%, respectively;~~
	●	The ~~Term Loan Agreement is secured by (i)~~Senior Notes bear interest at a rate of ~~first~~6.000% ~~priority perfected lien~~per annum, payable on ~~substantially all~~ February 1 and August 1 of ~~the assets of the Company and certain of its subsidiaries that are loan parties thereunder to the extent~~ ~~not~~ ~~constituting ABL Credit Agreement priority collateral and (ii) a~~ ~~second~~ ~~priority perfected lien on substantially all ABL Credit Agreement priority collateral, in~~ each ~~case subject to customary exceptions and limitations;~~year;
	●	The ~~Term Loan Agreement~~Senior 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 are borrowers and certain of the guarantors under the ABL Facility (collectively, the "Guarantors"). The Senior Notes and the guarantees are secured on a second-priority basis by all the assets of the Issuer and the Guarantors that secure the obligations under the ABL Facility, subject to certain exceptions. The Senior Notes and the guarantees will be the Issuer’s 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 indebtedness and liabilities of the Company’s subsidiaries that do not guarantee the Senior Notes;
	●	The Indenture includes certain ~~non-financial covenants.~~covenants that limit, among other things, the Issuer’s ability and the ability of its restricted subsidiaries to: incur additional indebtedness and issue certain preferred stock; make certain investments, distributions and other restricted payments; create or incur certain liens; merge, consolidate or transfer all or substantially all assets; enter into certain transactions with affiliates; and sell or otherwise dispose of certain assets.

(in thousands)
2020 (excluding the period from November 1, 2019 to July 31, 2020)	$	5,222
2021		20,888
2022		20,888
2023		20,888
2024		20,888
Thereafter		297,653
Total	$	386,427

Dated December 6, 2018		●As of January 28, 2021
Borrowing availability in U.S. Dollars and GBP up to a maximum of $60.0 million;
	●Borrowing availability in U.S. Dollars and GBP up to a maximum of $125.0 million and an accordion feature under which the Company can increase the ABL Facility by up to an additional $75.0 million;
Borrowing capacity available for standby letters of credit of up to $7.5 million and for swing loan borrowings of up to $7.5 million. Any issuance of letters of credit or making of a swing loan will reduce the amount available under the ABL Facility;		Same;
All loans advanced will mature and be due and payable in full on December 6, 2023;	●	All loans advanced will mature and be due and payable in full on ~~five~~January 28, 2026; ~~years after the Closing Date;~~
	●	Amounts borrowed may be repaid at any time, subject to the terms and conditions of the agreement;
	●Same;
Borrowings in U.S. Dollars and GBP ~~under the ABL Credit Agreement will~~ bear interest at either (1) an adjusted LIBOR rate or (2) a base rate, in each case plus an applicable margin currently set at 2.25% and 1.25%, respectively. The ABL ~~Credit Agreement~~Facility is subject to two step-downs of 0.25% and 0.50% based on excess availability levels;
	●Borrowings in U.S. Dollars and GBP bear interest at either (1) an adjusted LIBOR rate or (2) a base rate, in each case plus an applicable margin currently set at 2.0% and 1.00% per annum, respectively. The ABL Facility is subject to a step-down of 0.25% based on excess availability levels;
U.S. ABL ~~Credit Agreement~~Facility obligations will be secured by (i) a perfected first priority security interest in substantially all personal property of the Company and certain of its subsidiaries that are loan parties thereunder consisting of all accounts receivable, inventory, cash, intercompany notes, books and records, chattel paper, deposit, securities and operating accounts and all other working capital assets and all documents, instruments and general intangibles related to the foregoing (the “U.S. ABL Priority Collateral”) and (ii) a perfected second priority security interest in substantially all Term Loan Agreement priority collateral, in each case subject to customary exceptions and limitations;
	●US ABL Facility obligations will be secured by a first-priority perfected security interest in substantially all the assets of the Issuer, together with Brundage-Bone Concrete Pumping, Inc., Eco-Pan, Inc., Capital Pumping LP (collectively, the "US ABL Borrowers") and each of the Company's wholly-owned domestic subsidiaries (the "US ABL Guarantors"), subject to certain exceptions;
U.K. ABL ~~Credit Agreement~~Facility obligations will be secured by (i) a perfected first-priority security interest in (A) the U.S. ABL Priority Collateral, (B) all of the stock (or other ownership interests) in, and held by, the U.K. borrower subsidiaries of the Company, and (C) all of the current and future assets and property of the U.K subsidiaries of the Company that are loan parties thereunder, including a first-ranking floating charge over all current and future assets and property of each U.K. subsidiary of the Company that is a loan party thereunder; and (ii) a perfected, second-priority security interest in substantially all Term Loan Agreement priority collateral, in each case subject to customary exceptions and limitations; and
	●UK ABL Facility obligations will be secured by a first priority perfected security interest in substantially all assets of Camfaud Concrete Pumps Limited and Premier Concrete Pumping Limited, each of the Company's wholly-owned UK subsidiaries, and by each of the US ABL Borrowers and the US ABL Guarantors, subject to certain exceptions;
The ABL ~~Credit Agreement~~Facility also includes (i) a springing financial covenant (fixed charges coverage ratio) based on excess availability levels that the Company must comply with on a quarterly basis during required compliance periods and (ii) certain non-financial covenants.		Same.

	●	~~Maximum borrowing capacity of $65.0 million with a maturity date of~~ ~~September 8, 2022;~~
	●	Borrowings bear interest at the LIBOR rate plus an applicable margin that resets quarterly and is (a) 2.00%, (b) 2.25% or (c) 2.50% if the quarterly average excess availability is (a) at least 66.67%, (b) less than 66.67% and at least 33.33% and (c) less than 33.33%, respectively;
	●	~~Interest is due monthly and the outstanding principal balance was due upon maturity;~~
	●	On ~~October 2, 2017,~~ ~~$35.0 million of the Revolver balance was transferred to a~~ 3~~-month line of credit with a separate LIBOR interest rate; and~~
	●	~~Required Predecessor to maintain a maximum ratio of total fixed charges.~~

	●	~~Maturity date on~~Provides for an original aggregate principal amount of $357.0 million. This amount was increased in ~~September 1, 2021.~~May 2019 ~~Principal due upon maturity;~~by $60.0 million in connection with the acquisition of Capital;
	●	~~Interest rate of 10.375% per annum, payments due every~~ ~~March 1~~ ~~and~~ ~~September 1~~ ~~commencing~~ ~~March 1, 2015;~~
	●	The ~~Senior Notes were~~initial term loans advanced will mature and be due and payable in full seven years after the Closing Date, with principal amortization payments in an annual amount equal to 5.00% of the original principal amount;
	●	Borrowings under the Term Loan Agreement, will bear interest at either (1) an adjusted LIBOR rate or (2) an alternate base rate, plus an applicable margin of 6.00% or 5.00%, respectively;
	●	The Term Loan Agreement is secured by (i) a first priority perfected lien on substantially all of the assets of the Company and ~~contain various~~certain of its subsidiaries that are loan parties thereunder to the extent not constituting ABL Facility priority collateral and (ii) a second priority perfected lien on substantially all ABL Facility priority collateral, in each case subject to customary exceptions and limitations;
	●	The Term Loan Agreement includes certain non-financial covenants.

	(1)	~~For the period ended~~ ~~December 5, 2018,~~ ~~the Predecessor recorded nondeductible transaction related costs that resulted in a $1.4 million permanent tax difference;~~
	(2)	~~The Successor included $0.2 million of tax benefit in the estimated annual effective rate for the period ended~~ ~~July 31, 2019~~ ~~related to foreign income inclusions compared to $0.3 million of tax expense for the period ended~~ ~~July 31, 2020~~ ~~and $0.0 for the Predecessor period ended~~ ~~December 5, 2018;~~
	(3)	~~The Successor included $0.9 million of tax expense related to the increase in the deferred statutory U.K. corporate tax rate from 17% to 19% in the period ended~~ ~~July 31, 2020~~
	(4)	~~Of the $57.9 million of impairments recorded for goodwill and intangibles by the Company during the~~ ~~second~~ ~~quarter of fiscal~~ ~~2020,~~ ~~only $11.9 million was deductible for tax purposes ($2.9 million tax benefit to the Company) as the remaining impairment was related to nondeductible goodwill;~~
	(5)	~~The Successor included a tax benefit of $1.4 million in the period ended~~ ~~July 31, 2020~~ related to write-up in the carrying value of certain net operating losses (“NOL”) carryforwards as it was determined that those NOLs would be carried back to prior years pursuant to the provisions included in the CARES Act (see below for further details);
	(6)	~~For the period ended~~ ~~July 31, 2020,~~ ~~the Successor recorded nondeductible expenses related to a contingent liability (see discussion below for further detail) that resulted in a $0.4 million permanent tax difference; and~~
	(7)	~~Changes in our~~ ~~estimated~~ ~~full year income before tax and the related impact on our estimated full year effective tax rate that was applied to year to date losses for the Successor periods ended~~ ~~July 31, 2020~~ ~~and~~ ~~2019.~~

	Deductible
General liability	$	250,000
General liability (in the case of accident and driver has completed NationsBuilders Insurance Services driver training)	$	125,000
Automobile	$	100,000
Workers' compensation	$	250,000

	o	The price vesting targets of $13.00 per share, $16.00 per share or $19.00 per share were reduced to $6.00 per share, $8.00 per share or $10.00 per share, respectively
	o	The market-based awards were exchanged on a 2-for-1 exchange ratio. In total 3,816,450 market-based awards were exchanged for 1,908,165 market-based awards

	o	Each individual's total award was split into the following: (a) 46% of time vesting shares that vested on December 6, 2020, (b) 15% of time vesting shares which will vest ratably 1/3 each year on December 6, 2021, 2022 and 2023, and (c) the remaining 39% will initially vest based on reduced price vesting targets of $6.00 per share, $8.00 per share or $10.00 per share. Once the first vesting condition is achieved, the stock award will then vest 1/3 annually over a three-year period.
	o	In the aggregate, 1,381,426 stock awards were modified as follows:

	(a)	635,455 shares vested on December 6, 2020,
	(b)	207,215 shares will vest ratably 1/3 each year on December 6, 2021, 2022 and 2023, and
	(c)	538,756 shares will vest based on reduced price vesting targets of $6.00 per share, $8.00 per share or $10.00 per share

	●	Unrecognized stock-based compensation expense as of October 29, 2020 immediately before the modification plus
	●	The greater of $0 or the difference between fair value of new award immediately after modification less the fair value of old award immediately before modification

Location	*Type of Award*	*Shares Unvested at April 30, 2021*		*Weighted Average Fair Value*		*Unrecognized Compensation Expense at April 30, 2021*		*Date Expense will be Recognized Through (Straight-Line Basis)*
U.S.	Time Based Only		864,028	$	6.20	$	3,894,504	12/6/2023
U.S.	$6 Market/Time- Based		150,697	$	3.86	$	0	10/29/2020
U.S.	$6 Market/Time- Based		192,652	$	8.63	$	535,622	3/29/2022
U.S.	$6 Market/Time- Based		192,652	$	8.63	$	818,896	3/29/2023
U.S.	$6 Market/Time- Based		192,663	$	8.63	$	987,767	3/29/2024
U.S.	$8 Market/Time- Based		150,697	$	3.46	$	0	10/29/2020
U.S.	$8 Market/Time- Based		192,653	$	7.43	$	623,894	5/1/2023
U.S.	$8 Market/Time- Based		192,653	$	7.43	$	795,783	5/1/2024
U.S.	$8 Market/Time- Based		192,662	$	7.43	$	908,426	5/1/2025
U.S.	$10 Market/Time- Based		150,706	$	3.15	$	0	10/29/2020
U.S.	$10 Market/Time- Based		192,658	$	6.45	$	580,256	7/9/2023
U.S.	$10 Market/Time- Based		192,654	$	6.45	$	715,214	7/9/2024
U.S.	$10 Market/Time- Based		192,670	$	6.45	$	805,215	7/9/2025
U.S.	$13 Market/Time- Based		433	$	4.47	$	794	5/4/2022
U.S.	$13 Market/Time- Based		433	$	4.47	$	1,045	5/4/2023
U.S.	$13 Market/Time- Based		434	$	4.47	$	1,209	5/4/2024
U.S.	$16 Market/Time- Based		433	$	3.85	$	764	8/27/2022
U.S.	$16 Market/Time- Based		433	$	3.85	$	950	8/27/2023
U.S.	$16 Market/Time- Based		434	$	3.85	$	1,076	8/27/2024
U.S.	$19 Market/Time- Based		433	$	3.34	$	708	11/19/2022
U.S.	$19 Market/Time- Based		433	$	3.34	$	853	11/19/2023
U.S.	$19 Market/Time- Based		434	$	3.34	$	953	11/19/2024
U.K.	Time Based Only		132,259	$	6.08	$	550,704	12/6/2023
U.K.	$6 Market/Time- Based		28,885	$	3.85	$	0	10/29/2020
U.K.	$6 Market/Time- Based		27,892	$	8.36	$	76,663	3/29/2022
U.K.	$6 Market/Time- Based		27,892	$	8.36	$	116,244	3/29/2023
U.K.	$6 Market/Time- Based		27,901	$	8.36	$	139,791	3/29/2024
U.K.	$8 Market/Time- Based		28,885	$	3.45	$	0	10/29/2020
U.K.	$8 Market/Time- Based		27,892	$	7.20	$	88,882	5/1/2023
U.K.	$8 Market/Time- Based		27,892	$	7.20	$	112,737	5/1/2024
U.K.	$8 Market/Time- Based		27,901	$	7.20	$	128,403	5/1/2025
U.K.	$10 Market/Time- Based		28,886	$	3.14	$	0	10/29/2020
U.K.	$10 Market/Time- Based		27,902	$	6.24	$	82,553	7/9/2023
U.K.	$10 Market/Time- Based		27,892	$	6.24	$	101,225	7/9/2024
U.K.	$10 Market/Time- Based		27,901	$	6.24	$	113,743	7/9/2025
*Total*			3,523,925			$	12,184,873

Location	*Type of Award*	*Shares Awarded*		*Fair Value of Awards Per Share*		*Total Fair Value of Awards*		*Date Expense will be Recognized Through (Straight-Line Basis)*
U.S.	Time Based Only		1,156,630	$	6.67	$	7,714,722	12/6/2023
U.S.	$13 Market/Time- Based		1,543,044	$	4.47	$	6,904,032	5/4/2024
U.S.	$16 Market/Time- Based		1,543,044	$	3.85	$	5,940,038	8/27/2024
U.S.	$19 Market/Time- Based		1,543,091	$	3.34	$	5,149,194	11/19/2024
U.S.	Time Based Only		25,000	$	4.05	$	101,250	12/6/2023
U.S.	$13 Market/Time- Based		25,000	$	2.72	$	67,919	5/4/2024
U.S.	$16 Market/Time- Based		25,000	$	2.34	$	58,436	8/27/2024
U.S.	$19 Market/Time- Based		25,000	$	2.03	$	50,654	11/19/2024
U.K.	Time Based Only		164,744	$	6.67	$	1,098,842	12/6/2023
U.K.	$13 Market/Time- Based		238,808	$	4.46	$	1,066,272	5/4/2024
U.K.	$16 Market/Time- Based		238,808	$	3.84	$	917,096	8/27/2024
U.K.	$19 Market/Time- Based		238,833	$	3.33	$	794,772	11/19/2024
*Total*			6,767,002			$	29,863,227

	Predecessor
(in thousands, except share and per share amounts)	November 1, 2018 through December 5, 2018
Net loss (numerator):
Net loss income attributable to Concrete Pumping Holdings, Inc.	$	(22,575	)
Less: Accretion of liquidation preference on preferred stock		(126	)
Less: Undistributed earnings allocated to preferred shares		0
Net (loss) available to common shareholders	$	(22,701	)

Weighted average shares (denominator):
Weighted average shares - basic		7,576,289
Weighted average shares - diluted		7,576,289

Antidilutive stock options		932,746

Basic loss per share	$	(3.00	)
Diluted loss per share	$	(3.00	)

	●	U.S. Concrete Pumping – Consists of concrete pumping services sold to customers in the U.S. Business in this segment is primarily performed under the Brundage-Bone and Capital ~~Pumping trade names.~~tradenames.
	●	U.K. Operations – Consists of concrete pumping services and leasing of concrete pumping equipment to customers in the U.K. Business in this segment is primarily performed under the Camfaud Concrete Pumps and Premier Concrete Pumping ~~trade names.~~tradenames. In addition to concrete pumping, we recently started operations of waste management services in the U.K. under the Eco-Pan ~~trade name~~tradename and the results of this business are included in this segment. This represents the Company’s foreign operations.
	●	U.S. Concrete Waste Management Services – Consists of pans and containers rented to customers in the U.S. and the disposal of the concrete waste material services sold to customers in the U.S. Business in this segment is performed under the Eco-Pan ~~trade name.~~tradename.
	●	Corporate - Is primarily related to the intercompany leasing of real estate to certain of the U.S Concrete Pumping branches.

																S/P Combined
	Successor												Predecessor			(non-GAAP)
(dollars in thousands)	Three Months Ended July 31, 2020			Three Months Ended July 31, 2019			Nine Months Ended July 31, 2020			December 6, 2018 through July 31, 2019			November 1, 2018 through December 5, 2018			Nine Months Ended July 31, 2019

Revenue	$	77,131		$	78,655		$	225,111		$	174,613		$	24,396		$	199,009

Cost of operations		39,330			39,665			123,295			98,396			14,027			112,423
Gross profit		37,801			38,990			101,816			76,217			10,369			86,586
Gross margin		49.0	%		49.6	%		45.2	%		43.6	%		42.5	%		43.5	%

General and administrative expenses		26,954			28,159			79,941			63,693			4,936			68,629
Goodwill and intangibles impairment		-			-			57,944			-			-			-
Transaction costs		-			176			-			1,458			14,167			15,625
Income (loss) from operations		10,847			10,655			(36,069	)		11,066			(8,734	)		2,332

Other income (expense):
Interest expense, net		(8,364	)		(9,843	)		(26,632	)		(24,753	)		(1,644	)		(26,397	)
Loss on extinguishment of debt		-			-			-			-			(16,395	)		(16,395	)
Other income, net		36			28			139			59			6			65
Total other expense		(8,328	)		(9,815	)		(26,493	)		(24,694	)		(18,033	)		(42,727	)

Income (loss) before income taxes		2,519			840			(62,562	)		(13,628	)		(26,767	)		(40,395	)

Income tax expense (benefit)		(462	)		(1,922	)		(3,829	)		(3,115	)		(4,192	)		(7,307	)

Net income (loss)		2,981			2,762			(58,733	)		(10,513	)		(22,575	)		(33,088	)

Less accretion of liquidation preference on preferred stock		(489	)		(456	)		(1,432	)		(1,159	)		(126	)		(1,285	)
Net income (loss) available to common shareholders	$	2,492		$	2,306		$	(60,165	)	$	(11,672	)	$	(22,701	)	$	(34,373	)


	Three Months Ended April 30,						Six Months Ended April 30,
(dollars in thousands)	2021			2020			2021			2020

Revenue	$	76,873		$	74,041		$	147,294		$	147,980

Cost of operations		43,570			42,174			84,128			83,965
Gross profit		33,303			31,867			63,166			64,015
Gross margin		43.3	%		43.0	%		42.9	%		43.3	%

General and administrative expenses		26,472			26,381			48,860			52,988
Goodwill and intangibles impairment		-			57,944			-			57,944
Transaction costs		55			-			84			-
Income (loss) from operations		6,776			(52,458	)		14,222			(46,917	)

Other income (expense):
Interest expense, net		(6,029	)		(8,765	)		(12,929	)		(18,268	)
Loss on extinguishment of debt		-			-			(15,510	)		-
Change in fair value of warrant liabilities		(11,456	)		3,254			(11,456	)		2,864
Other income, net		26			34			52			103
Total other expense		(17,459	)		(5,477	)		(39,843	)		(15,301	)

Income (loss) before income taxes		(10,683	)		(57,935	)		(25,621	)		(62,218	)

Income tax expense (benefit)		170			(2,221	)		(2,478	)		(3,368	)

Net income (loss)		(10,853	)		(55,714	)		(23,143	)		(58,850	)

Less accretion of liquidation preference on preferred stock		(499	)		(470	)		(1,006	)		(943	)
Net income (loss) available to common shareholders	$	(11,352	)	$	(56,184	)	$	(24,149	)	$	(59,793	)

	July 31,			October 31,
(in thousands)	2020			2019
Total Assets
U.S. Concrete Pumping	$	583,810		$	637,384
U.K. Operations		122,986			138,435
U.S. Concrete Waste Management Services		138,718			137,646
Corporate		25,139			24,223
Intersegment		(83,136	)		(66,323	)
	$	787,517		$	871,365

	April 30,			October 31,
(in thousands)	2021			2020
Total Assets
U.S. Concrete Pumping	$	567,635		$	570,536
U.K. Operations		105,393			109,726
U.S. Concrete Waste Management Services		141,723			140,209
Corporate		26,029			25,517
Intersegment		(69,265	)		(72,230	)
Total Assets	$	771,515		$	773,758

	Three Months Ended April 30,						Change
(in thousands)	2021			2020			$			%
Revenue
U.S. Concrete Pumping	$	56,168		$	57,459		$	(1,291	)		-2.2	%
U.K. Operations		11,853			8,401			3,452			41.1	%
U.S. Concrete Waste Management Services		9,008			8,306			702			8.5	%
Corporate		625			625			-			0.0	%
Intersegment		(781	)		(750	)		(31	)		4.1	%
Total revenue	$	76,873		$	74,041		$	2,832			3.8	%

	Six Months Ended April 30, 2020						Change
(in thousands)	2021			2020			$			%
Revenue
U.S. Concrete Pumping	$	108,484		$	112,564		$	(4,080	)		-3.6	%
U.K. Operations		21,633			19,086			2,547			13.3	%
U.S. Concrete Waste Management Services		17,430			16,589			841			5.1	%
Corporate		1,250			1,250			-			0.0	%
Intersegment		(1,503	)		(1,509	)		6			-0.4	%
Total revenue	$	147,294		$	147,980		$	(686	)		-0.5	%

	Successor						Predecessor			S/P Combined (non-GAAP)			Change
(in thousands)	Nine Months Ended July 31, 2020			December 6, 2018 through July 31, 2019			November 1, 2018 through December 5, 2018			Nine Months Ended July 31, 2019			$			%
Revenue
U.S. Concrete Pumping	$	171,209		$	124,969		$	16,659		$	141,628		$	29,581			20.9	%
U.K. Operations		28,294			30,996			5,143			36,139			(7,845	)		-21.7	%
U.S. Concrete Waste Management Services		25,978			18,806			2,628			21,434			4,544			21.2	%
Corporate		1,875			1,634			242			1,876			(1	)		NM¹
Intersegment		(2,245	)		(1,792	)		(276	)		(2,068	)		(177	)		NM¹
	$	225,111		$	174,613		$	24,396		$	199,009		$	26,102			13.1	%