Concrete Pumping Holdings, Inc. Class A Stock

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Concrete Pumping Holdings' financial results for the third quarter ended July 31, 2026. Joining us today are Concrete Pumping Holdings' CEO, Bruce Young, CFO, Iain Humphries, and the company's External Director of Investor Relations, Cody Slach.

Before we go further, I would like to turn the call over to Mr. Slach to read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Thank you. I'd like to remind everyone that during this call, to give you a better understanding of our operations, we will be making certain forward-looking statements regarding our business and outlook. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements.

For information concerning these risks and uncertainties, see Concrete Pumping Holdings' Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and other publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether because of new information, future events, or otherwise.

On today's call, we will also reference certain non-GAAP financial measures, including adjusted EBITDA, net debt, and free cash flow, which we believe provide useful information for investors. We provide further information about these non-GAAP financial measures and reconciliations with comparable GAAP measures in our press release issued today or the investor presentation posted on the company's website.

I'd like to remind everyone that this call will be available for replay later this evening. Our webcast replay will also be available via the link provided in today's press release, as well as on the company's website. Additionally, we have posted an updated investor presentation to the company's website.

Now I'd like to turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

Thank you, Cody, and good afternoon, everyone. 2026 remains on track to be a strong year for our company as we continue to execute our strategy and prove ourselves to be the partner of choice of our customers, particularly in large, more complex projects. I'm pleased to report that we delivered another strong quarter with revenue increasing 13% year over year and adjusted EBITDA also growing 13%, reflecting continued momentum across our U.S. operations, disciplined operational execution, and healthy demand across several of our key end markets.

Our performance during the quarter continued to be led by large-scale commercial and infrastructure construction activity. As we have discussed in the last couple of quarters, data centers and other large-scale commercial projects remain the primary driver of growth.

In addition, we are also seeing encouraging activity across education, utilities, energy, and other infrastructure-related projects. These larger more complex projects continue to support healthy fleet utilization across both our Brundage-Bone and Eco-Pan businesses and reinforce the competitive advantages created by our national footprint, scale, and operational expertise.

We remain optimistic about the continued growth in these segments for the foreseeable future. The broader construction backdrop remains largely unchanged.

Heavy commercial construction has remained relatively resilient, while light commercial activity continues to be pressured by elevated interest rates and economic uncertainty.

Residential construction also remains soft as affordability challenges continue to weigh on new home construction despite favorable long-term housing fundamentals. Our Eco-Pan Concrete Waste Management Services business again delivered an excellent quarter and remains on track for another record year, benefiting from continued strength in commercial construction activity, pricing execution, and ongoing penetration into new customer accounts. Eco-Pan continues to demonstrate the attractive operating characteristics of the business and remains an important differentiator for our overall platform.

Turning to our U.K. operations, market conditions remain more challenging than those in the U.S. with inflation, elevated interest rates, and slower commercial construction environment continuing to pressure demand. That said, we were encouraged to see commercial activity improve during the months of July and August, and while it's too early to call an inflection point, the trends are encouraging.

In addition to our recent expansion into the temporary power market, it's performing well as executing in line with our strategy to build a diversified multi-service platform supporting the construction and infrastructure sectors.

Along with our Republic of Ireland expansion, these strategic growth investments continue to strengthen our long-term platform. Overall, we are pleased with our performance through the first nine months of fiscal 2026. We continue to grow profitably and generate meaningful free cash flow, and our balance sheet is in an excellent position as we have driven net leverage down to 3.6x on track towards our near-term target of 3x.

Liquidity is also very strong at about $357 million, giving us tremendous flexibility to grow shareholder value through accelerated organic growth opportunities, M&A, and other capital allocation strategies. The consistency of our execution, the durability of demand across large commercial and infrastructure projects, and the strength of our operating model give us confidence as we enter the final quarter of fiscal 2026.

As a result, we are once again raising our full-year revenue, adjusted EBITDA, and free cash flow outlook while remaining focused on disciplined execution, free cash flow generation, and long-term value creation for our shareholders.

Looking out longer term, we are excited about the opportunities we see in front of us. We believe these opportunities, coupled with our differentiated business model, will translate to profitable growth across all segments both organically and through potential M&A.

Today we made an important update regarding capital allocation, and we are pleased to announce that our Board of Directors has approved the initiation of a regular quarterly cash dividend. The first expected payment of $0.13 per share is to be paid on October 2, 2026, and on an annualized basis, this equates to $0.52 per share, representing a yield of approximately 5.6% based on our current stock price. The dividend does not change our growth investment priorities and our ability to pursue strategic initiatives.

Rather, it reflects our confidence in the durability of our free cash flow and our commitment to returning capital to shareholders through multiple channels.

I will now turn the call over to Iain to walk through financial results in more detail. Iain?

Thanks, Bruce, and good afternoon, everyone. Moving directly into our third quarter results. Revenue increased 13% to $116.8 million compared to $103.7 million in the prior year quarter. The increase was driven by continued strength in U.S. commercial and infrastructure activity, particularly large-scale data center and infrastructure projects, along with pricing improvement and mostly stable weather conditions across our U.S. markets.

Revenue in our U.S. Concrete Pumping segment increased 10% to $76.2 million compared to $69.3 million in the prior year quarter. Commercial and infrastructure activity remained healthy, led by continued demand from data centers while utilities, education, and energy-related projects also contributed to growth. These gains were partially offset by continued softness in light commercial construction and subdued residential demand resulting from elevated interest rates and ongoing economic uncertainty.

Revenue in our Eco-Pan Concrete Waste Management Services business increased 14% to $21.9 million compared to $19.3 million in the prior year quarter. Growth was driven by organic volume increases, pricing improvements, and continued success expanding relationships with new customers, demonstrating the scalability and resiliency of the business.

Turning to our U.K. operations, revenue increased 24% to $18.7 million. The increase primarily reflected the contribution from the Templant temporary power acquisition while underlying commercial construction activity remained relatively soft.

Although inflationary pressures continue to impact fuel costs, we were encouraged by the improving commercial demand activity during July and August and continue to believe our strategic investments are positioning the business for long-term growth.

At the consolidated level, gross margin was 38.7% compared to 39% in the prior year quarter. Pricing execution largely offset inflationary pressures with a modest decline primarily reflecting higher fuel costs during the quarter.

General and administrative expenses increased to $30.1 million compared to $27.5 million in the prior year quarter, reflecting higher stock compensation and costs from recent acquisitions. However, G&A as a percentage of revenue improved to 25.8% from 26.5%, demonstrating continued operating leverage.

Net income attributable to common shareholders increased to $4.5 million, or $0.09 per diluted share, compared to $3.3 million, or $0.07 per diluted share, last year. Adjusted EBITDA increased 13% to $30.4 million, with margin improving to 26%.

Within U.S. Concrete Pumping, adjusted EBITDA increased 18% to $18.4 million, while Eco-Pan adjusted EBITDA increased 19% to $8.8 million, reflecting continued operating leverage from higher volumes and improved pricing.

Turning to liquidity, and as Bruce mentioned earlier, we ended the quarter with total debt of $425 million and net debt of approximately $382 million, reducing our net leverage ratio to approximately 3.6x adjusted EBITDA compared to 3.8x last quarter. We also ended the quarter with approximately $357 million of available liquidity.

The continued reduction in leverage reflects our strong free cash flow generation and disciplined capital allocation strategy and positions us well to continue investing in the business while maintaining balance sheet flexibility.

Turning now to our outlook for fiscal 2026, based on our continued strong performance through the first nine months of the year, we are once again increasing our 2026 full year guidance. We now expect revenue between $425 million and $435 million compared to our prior range of $410 million to $425 million.

We are also raising our adjusted EBITDA outlook to a range of $103 million to $108 million from our prior range of $98 million to $105 million. And lastly, we are also increasing our free cash flow expectation to approximately $50 million from our prior expectation of at least $45 million.

Turning to capital allocation, over the last four years, we have returned approximately $91 million to shareholders through share purchases and a special dividend. As Bruce mentioned earlier, today we have added to our capital allocation strategy by initiating a regular quarterly cash dividend program.

The first expected payment of $0.13 per share is to be paid on October 2, 2026 to shareholders of record as of September 18, 2026. On an annualized basis, this equates to $0.52 per share, representing a yield of approximately 5.6% based on our current stock price. As always, the declaration and payment of any future dividends remains subject to the discretion and approval of our Board of Directors each quarter based on our financial position, cash flow generation, and capital needs at the time.

As a reminder from last quarter, since the initiation of our share repurchase program in 2022, we have repurchased approximately 5.9 million shares for $38.1 million. There is $11.9 million remaining under the current authorization, and the Board of Directors recently extended its authorization through November 30, 2028.

These items, in addition to our strategic growth initiatives, reflect our confidence in our business model and ability to generate healthy free cash flow as we remain committed to our near-term net leverage target of 3x.

With that, I'll turn the call back to Bruce.

Thanks, Iain. As we look toward the remainder of the year, we remain encouraged by both the consistency of our execution and the resilience of our business. Demand across large commercial and infrastructure projects continues to provide a solid foundation for growth, while our diversified service offering and disciplined operating model continue to differentiate us in the marketplace.

Our priorities remain unchanged. We will continue to execute with discipline, investing strategically in our fleet, expanding complementary service offerings, and maintaining a strong balance sheet. The progress we've made reducing leverage to 3.6x while continuing to invest in the business demonstrates the strength of our cash generation and provides additional flexibility to pursue active growth opportunities.

Our newly established regular dividend program sits alongside our disciplined capital allocation commitment to continued investment in growth opportunities, providing superior shareholder value and lower leverage. While remaining mindful of ongoing softness in residential construction and the uncertainty that persists in portions of the U.K. market, we believe our diversified end markets, operational discipline, and strategic investment positions us well to continue delivering long-term value for our customers and shareholders.

With that, I'd like to turn the call back over to the operator for Q&A. Shamali?

Thank you, sir. We will now begin a question and answer session. [Operator Instructions]

And our first question comes from the line of Andy Wittmann with Baird. Please proceed with your question.

Great, good afternoon. Thanks, guys, for taking my questions. Iain, I guess I wanted to just start a little bit on the cash flow dividend here. It was interesting news; I was a little surprised by it, but I'm sure the market will like that. Not sure, but I think it will. I guess my question has to do with the free cash flow guidance here. Year to date, you're already free cash flow, like $40 million. So 4Q is like $10 million.

I guess you pay the coupon on some of the debt, or paid it in August. It kind of feels like that's not just a lot of cash flow in the fourth quarter. Can you maybe talk through some of the moving pieces? And I know you're pulling forward some of the — I don't know if that, if you consider the CapEx for the fleet that you're pulling forward to get ahead of the emission stuff. Is that the reason why free cash flow is not better?

Are you considering that growth or maintenance CapEx? Because I guess your free cash flow definition is only including the maintenance side of that so I can just clarify what the fourth quarter looks like and what the, and the CapEx numbers in the fourth quarter, maybe?

Yes, thanks for the question, Andy. I'll start with the pull forward of the 2027 CapEx. So it's mostly a replacement that we're pulling forward in 2026. So that's, that would be reversed in next year's free cash flow update. I guess the best way to think about the free cash flow guide update for the full year, if you work from the midpoint of the EBITDA guide, so call it $105 million or $106 million, the difference between that and the $50 million is approximately $32 million of interest and about $23 million of replacement CapEx.

So there's a small amount of replacement CapEx in the fourth quarter, and that replacement CapEx is about 5% of revenue which is in line with our normal run rate, so they're probably like $2 million or $3 million of replacement CapEx in the fourth quarter.

So as we look forward then, with the pull forward, what's the right number for replacement CapEx that you're thinking, kind of broad strokes for '27? I'm not looking for decimal points or anything like that. I know you're not giving '27 guides. I just want to make sure we're thinking like you're thinking.

Yes. So, excluding the pull forward piece, it will be a low single digits in next year.

Excluding the pull forward. Got it. Okay.

Yes. So yes, if all the pull -- you might remember, so we had $22 million of pull forward, about $18 million of that was for U.S. Pumping and about $4 million for Eco-Pan. So depending on how much of the replacement comes through in the fourth quarter, the expectation for next year on replacement would be low percentage single digits for the U.S. Pumping business.

And then with the dividend, how does that work against the Nuveen preferred? Does that preferred conversion ratio change as a result of this? Can you just update us on that?

Because it used to have a mandatory conversion trigger and all these things, and so does that start moving now that you're paying the dividend on the common?

Doesn't change anything on the preferred.

Okay, got it, that makes sense. And then just as it relates to the 3.0 target now with a decent sized dividend here, what's a realistic timeframe to consider getting down to that 3.0 target? Understanding, obviously, that you're always looking at M&A, but maybe you could say, like, if you don't do M&A, X is the date we think is realistic or something like that?

Yes, it's a good question. So obviously it depends on the investments that we make in growth initiatives. But I mean, as you remember, we've had a healthy like share repurchase in prior years. So from last year, I want to say it was around $12 million to $14 million. I think in the, in the year prior to that, it was around $10 million.

So, depending on where the share price is, it would depend on what goes into share repurchases. From a cash perspective, we've always thought that, it's not a stretch for us to turn leverage down by at least a half a turn in 12 months.

Obviously, it's dependent on, what we do on the growth side as well, but a reasonable expectation, I would say, is, I would say around 18 months, barring anything extraordinary on the investment side.

Okay, and then my last question is just on the margins in the U.K. segment. It was a lower number than I think I expected here, and I was just wondering if there was a mix impact from the acquisition in there or something else that we should know about, just because that one just stood out a little bit and I wanted to understand?

Yes, nothing really from the acquisition side that have impacted margin. I mean, as you'll know, we've had some demand headwinds in the U.K. slightly. So there's been a slight loss of labor efficiency. But as Bruce mentioned in his comments, we've seen a bit of a pickup in the volume side in July in demand. So it's slightly from the labor component in the third quarter, just really based on demand.

Yes, and I think what I would add to that, Andy, in the U.K., labor isn't as variable as what we see in the U.S., so we need to keep our team intact and we pay them while we have them employed for us. But we are seeing really strong signs of that market starting to come back, so we think that will improve.

Okay, that's good context. I appreciate you flagging the difference in the labor -- the labor force there, Bruce.

Thank you. At this time, this concludes our question and answer session. I would now like to turn the call back over to Mr. Young for closing remarks.

Thank you, Shamali. We'd like to thank everyone for listening to today's call and we look forward to speaking with you when we report our fourth quarter and full year 2026 results in January. Thank you.

And ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Concrete Pumping Holdings' financial results for the second quarter ended April 30, 2026. Joining us today are Concrete Pumping Holdings' CEO, Bruce Young; CFO, Iain Humphries; and the company's External Director of Investor Relations, Cody Slach.

Before we go further, I would like to turn the call over to Mr. Slach to read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Thank you. I'd like to remind everyone that during this call, to give you a better understanding of our operations, we will be making certain forward-looking statements regarding our business and outlook. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Concrete Pumping Holdings' annual report on Form 10-K, quarterly report on Form 10-Q and other publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise.

On today's call, we will also reference certain non-GAAP financial measures, including adjusted EBITDA, net debt and free cash flow, which we believe provide useful information for investors. We provide further information about these non-GAAP financial measures and reconciliations to the comparable GAAP measures in our press release issued today or the investor presentation posted on the company's website.

I'd like to remind everyone that this call will be available for replay later this evening. A webcast replay will also be available via the link provided in today's press release as well as on the company's website. Additionally, we have posted an updated investor presentation to the company's website.

Now I'd like to turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

Thank you, Cody, and good afternoon, everyone. We were pleased with our strong second quarter with revenue increasing 14% year-over-year and adjusted EBITDA growing 17%, driven by continued momentum across our U.S. operations, disciplined operational execution throughout the organization and favorable end market activity in several of our key geographies. This quarter was also highlighted by the early April closing on the Templant Hire acquisition in the U.K. Importantly, this acquisition represents an important step in executing our strategy to build a diversified multiservice platform supporting the construction and infrastructure sectors. Templant is a high-quality business with strong leadership, and we see clear opportunities to accelerate growth and provide long-term sustainable value for our shareholders.

Returning to our execution in the second quarter, our performance was led by continued strength in commercial and infrastructure construction activity across a wide variety of industries, including education, health care, energy, infrastructure and of course, data centers. Growth across these projects, particularly in data centers, remains healthy and continues to support improved utilization levels throughout our U.S. Concrete Pumping and Eco-Pan operations.

In addition to the growing data center activity, we are also seeing solid demand across public infrastructure-related projects including roads, bridges and education construction. Overall, the environment for larger scale commercial and infrastructure projects remains exciting and continues to play into our competitive advantage as the largest concrete pumping service provider in the U.S.

We also benefited from generally favorable weather conditions across our U.S. markets during the first half of the year, which supported improved activity levels compared to the prior year period. Combined with continued price discipline and solid operational execution, these factors contributed to a strong margin performance and another quarter of healthy free cash flow generation.

Outside of these areas of strength, broader construction trends remain relatively consistent with what we had discussed last quarter. Heavy commercial activity continues to hold up reasonably well, while more interest rate-sensitive segments, including office and portions of light commercial construction remains subdued as customers continue to navigate elevated finance cost and economic uncertainty.

Residential construction activity also remains challenged. Elevated mortgage rates and affordability pressures continue to weigh on new home construction activity. And while we continue to believe the long-term housing fundamentals remain favorable, near-term demands remain soft.

Infrastructure activity in the U.S. continues to be generally strong as the underlying bidding environment and project activity remained healthy, particularly across larger scale and longer-duration projects.

Our Eco-Pan Concrete Waste Management Services business again delivered a strong quarter, continuing to benefit from healthy underlying construction activity, pricing execution and ongoing penetration into new customer accounts. Eco-Pan remains a highly complementary service offering to our concrete pumping operations and continues to demonstrate active through-cycle characteristics.

Turning to our U.K. operations. Market conditions remain more challenging. Elevated interest rates, inflationary pressures and broader economic uncertainty continue to impact commercial construction activity, while public infrastructure funding dynamics also remain less favorable than what we experienced in the U.S. Despite these conditions, infrastructure-related activity in areas such as energy projects and HS2 construction remains relatively resilient, and we continue to focus on disciplined cost management and operational execution within the region.

We are also pleased with the progress of our recent strategic acquisitions, including our Republic of Ireland expansion and entry into the U.K. temporary power market. While the near-term acquisition revenue contribution remains modest, we are encouraged by the strategic positioning these investments provide and the opportunities they create to further expand our platform and grow organically over time.

Overall, we are encouraged by our first half performance, and we believe the second quarter further demonstrates the strength of our operating model, our disciplined execution and the benefits of our scale and marketing position. As a result of our performance and current market trends, we are raising our full year outlook while remaining focused on operational discipline, free cash flow generation and long-term value creation.

I will now turn the call over to Iain to walk through the financial results in more detail. Iain?

Thanks, Bruce, and good afternoon, everyone. Moving directly into our second quarter results. Revenue increased 14% to $106.8 million compared to $94 million in the prior year quarter. The increase was driven by higher U.S. commercial and infrastructure activity, particularly related to large-scale data center and infrastructure projects, along with pricing improvements, organic volume growth in Eco-Pan and generally more favorable weather conditions across our U.S. markets.

Revenue in our U.S. Concrete Pumping segment, which operates primarily under the Brundage-Bone brand, increased 15% to $71.5 million compared to $62.1 million in the prior year quarter.

Commercial and infrastructure activity benefited from continued strength in large-scale projects, including data centers, roads, bridges, education, warehousing and energy-related projects. These gains were partially offset by continued softness in light commercial construction and subdued residential demand due to elevated interest rates and broader economic uncertainty.

Revenue in our Concrete Waste Management Services segment, operating under the Eco-Pan brand increased 13% to $20.3 million compared to $18.1 million in the prior year quarter. Growth was driven by organic volume increases, continued penetration into new customer accounts and pricing improvements, reflecting the continued strength and scalability of the business.

Turning to our U.K. operations. Revenue increased 8% to $14.9 million compared to $13.8 million in the prior year quarter. Excluding the $600,000 beneficial impact of foreign currency translation and the $1.4 million contribution from recent acquisitions, underlying commercial construction activity remained soft amid elevated interest rates, inflationary pressures and economic uncertainty in the U.K.

At a consolidated level, second quarter gross margin increased modestly to 38.6% compared to 38.5% in the prior year quarter. Strong revenue growth and pricing execution helped offset continued inflationary pressures, including higher repair and maintenance costs, wear part inflation and the impact of tariffs on certain replacement parts.

General and administrative expenses increased to $29.2 million compared to $27.9 million in the prior year quarter. However, as a percentage of revenue, G&A improved to 27.3% compared to 29.7% in the prior year quarter, reflecting continued operating leverage and disciplined cost management.

Net income attributable to common shareholders in the second quarter increased to $2.1 million or $0.04 per diluted share compared to a net loss of $400,000 or $0.01 per diluted share in the prior year quarter.

Consolidated adjusted EBITDA increased 17% to $26.4 million compared to $22.5 million in the year ago quarter. Adjusted EBITDA margin improved 80 basis points to 24.7% from 23.9% and the increase was primarily driven by higher revenue and improved operating leverage.

Within our U.S. Concrete Pumping business, adjusted EBITDA increased 23% to $15.6 million compared to $12.7 million in the prior year quarter. In the U.K. business, adjusted EBITDA was $3.1 million compared to $3.2 million, reflecting inflationary pressures in labor, fuel and repair and maintenance costs.

In our U.S. Concrete Waste Management Services business, adjusted EBITDA increased 16% to $7.7 million, driven by strong operating leverage on higher volumes and pricing.

Turning to liquidity. As of April 30, 2026, total debt outstanding was $425.6 million with net debt of $386.9 million, representing a net leverage ratio of approximately 3.8x adjusted EBITDA. We ended the quarter with approximately $346.3 million of available liquidity, which includes cash on hand and availability under our ABL facility and provides substantial financial flexibility.

Regarding capital allocation, during the second quarter, we repurchased approximately 392,000 shares for $2.6 million at an average price of $6.68 per share. Since initiating the program in 2022, we have repurchased approximately 5.9 million shares for $38.1 million with $11.9 million remaining under the current authorization through December of 2026. We continue to view the share repurchase program as a flexible and opportunistic use of capital.

Turning to our outlook for fiscal 2026, and based on our strong first half performance and continued momentum across our U.S. operations, we are raising our full year revenue outlook to a range of $410 million to $425 million compared to our prior range of $390 million to $410 million. We are also raising our adjusted EBITDA outlook to a range of $98 million to $105 million from our prior range of $90 million to $100 million. And lastly, we are also increasing our free cash flow expectation to be at least $45 million from our prior expectation of approximately $40 million.

While we remain encouraged by activity levels in large-scale commercial and infrastructure projects, particularly data center-related activity, it is important to note that we began experiencing accelerated growth of these projects during the third quarter of last year. As a result, we expect year-over-year comparisons to reflect some tempered growth during the second half of fiscal 2026.

In addition, based on our first half performance and current project visibility, we expect revenue and adjusted EBITDA seasonality during fiscal 2026 to be more balanced relative to historical trends, with revenue expectations to show about a 47% and a 53% split compared to our traditional 45% and 55% split.

Importantly, our outlook continues to assume no meaningful recovery in the broader residential or light commercial construction activity during fiscal 2026. We expect free cash flow, defined as adjusted EBITDA less net replacement CapEx and less net cash paid for interest to be at least $45 million. This outlook assumes approximately $23 million of net replacement CapEx and $32 million of net cash paid for interest, and this excludes the accelerated CapEx pulled forward from fiscal 2026. Our balance sheet and liquidity position comfortably support this investment strategy.

We remain committed to a disciplined capital deployment, maintaining leverage within our target range and prioritizing returns on invested capital. We believe we are well positioned to strengthen our service offering in anticipation of a market recovery.

With that, I will now turn the call back over to Bruce.

Thanks, Iain. As we move through the remainder of fiscal 2026, we remain encouraged by the momentum we are seeing across the business and the continued resilience of our U.S. markets. While broader construction activity remains mixed, particularly in residential and certain commercial segments, demand tied to large-scale infrastructure and commercial projects continues to support healthy activity levels across our platform. Our focus remains on disciplined execution, operational efficiency, pricing discipline and strategic capital allocation. We believe the actions we have taken over the past several years to strengthen the business, optimize the fleet and maintain financial flexibility continue to position us well to perform across varying market conditions.

We are also pleased with the progress we are making on our strategic growth initiatives, including investing in our fleet and recent acquisitions that expand our geographic reach and service capabilities. Combined with our strong balance sheet and continued free cash flow generation, we believe we remain well positioned to invest in the business, pursue disciplined growth opportunities and continue creating long-term shareholder value.

With that, I would now like to turn the call back over to the operator for Q&A. Paul?

[Operator Instructions] Our first question is from Sam Kusswurm with William Blair.

Bruce and Iain, first, congrats on the really strong quarter. That was great to see. In your prepared remarks, you pointed to data centers as kind of being a big contributor to that. I guess I wanted to ask, what percent of your revenue are you currently generating from data centers today? And how that compares to both this time last year as well as where you think it can land maybe next year or even by the end of the year?

Yes. Sam, good question. So you might remember, last year, the data center activity was quite slow to grow in the first half of the year. So we were probably doing maybe 4% or 5% of our work on either chip plants or data centers in the first half of last year. And you probably heard in our prepared remarks that, that grew quite nicely through the back half of last year. Today, between data centers and chip plant work, we're probably doing 10% to 12% of revenue on that type of work. So there's been some nice growth acceleration. And obviously, as we mentioned, consistent weather really helps with the continuity of that work and execution.

Got it. That's very helpful. Obviously, that contributed to the top line, but I also wanted to ask regarding your margins, they also took a pretty nice step up. I was wondering if this is really just due to better leverage on your fleet or if the data center work itself carries a higher margin. Could you maybe just compare that margin for that type of work versus your other commercial work as well as maybe against residential and infrastructure?

Yes, sure. So on the margin front, I mean, you're right. With improved volume comes improved operating leverage through the better utilization of our fleet. And as you'll know, a lot of this work tends to be in remote locations. So it is specialty in nature, requiring longer equipment. So the pricing reflects that, which helps the margin profile. But again, it's underpinned by a lot of the work that we've done in prior years on that cost base and some real operational discipline to make sure that we can get the right pricing and margin profile.

I mean, as you heard in our prepared remarks, there's still a challenge around inflation, but the team has done a really nice job getting the pricing right on these projects and making sure we can optimize the operating leverage of the execution that we're delivering.

Our next question is from Rohan Vasudeva with Baird.

I think my last question was taken, but I wanted to talk about the acquisition of Templant. Could you talk about the multiple you guys paid for it? And Templant looks to be a bit different than the 3 traditional core groups. If you could talk about EBITDA margin and the mix benefit from that acquisition.

Yes. So while we don't give the multiple out, it's consistent with what we would have been paying for acquisitions of concrete pumps into the future. Now with the U.K. being soft with the commercial market, and we have a really good team of people over there, we looked out to other areas. With the last call, we talked about going into Ireland and expanding our footprint into there with some opportunities there. We see this Templant as an opportunity to leverage the service side of the temporary power business. We have a really strong leadership in that business that fits very well with us. And we do expect to be able to rapidly grow the temporary power business in the U.K. going forward.

Got it. And then my second one was, you got the approval for the $22 million of planned investments that you could pull forward from 2027, but you haven't incurred any of that. Should we expect that, that will -- all $22 million will happen in the second half? If you could give more color around the cadence of those investments?

Yes. We're still working on that. Now we are trying to move forward as much equipment into this year and maybe even later next year, at least buying the chassis so that we can -- I think we've talked on calls in the past about the complications of the new emissions and reliability and getting the type of horsepower we need to run our big units. We're fearful that, that will take a little while for them to run that out. So we're trying to pull forward as much of that as we possibly can. We're still trying to sort through how much of that will fall into this year and how much will fall into next year. We'll have more color on that on our -- when we announce in Q3.

There are no further questions at this time. I would like to hand the floor back over to Bruce Young for any closing remarks.

Thank you, Paul. We'd like to thank everyone for listening to today's call, and we look forward to speaking with you when we report our third quarter results in September. Thank you.

Ladies and gentlemen, this does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Concrete Pumping Holdings financial results for the first quarter ended January 31, 2026. Joining us today are Concrete Pumping Holdings CEO, Bruce Young; CFO, Iain Humphries; and the company's External Director of Investor Relations, Cody Slach.

Before we go further, I would like to turn the call over to Mr. Slach to read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Thank you. I'd like to remind everyone that during this call to give you a better understanding of our operations, we will be making certain forward-looking statements regarding our business and outlook. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Concrete Pumping Holdings annual report on Form 10-K, quarterly report on Form 10-Q and other publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise.

On today's call, we will also reference certain non-GAAP financial measures, including adjusted EBITDA, net debt and free cash flow, which we believe provide useful information for investors. We provide further information about these non-GAAP financial measures and reconciliations to the comparable GAAP measures in our press release issued today or the investor presentation posted on the company's website.

I'd like to remind everyone that this call will be available for replay later this evening. A webcast replay will also be available via the link provided in today's press release as well as on the company's website. Additionally, we have posted an updated investor presentation to the company's website.

Now I would like to turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

Thank you, Cody, and good afternoon, everyone. We were pleased with our first quarter results, which represented a promising start to the year. Revenue increased 5% year-over-year with adjusted EBITDA up 6%, driven by a return to growth in our U.S. Concrete Pumping operations, solid execution across the organization and continued discipline around pricing and cost management.

The quarter was led by renewed growth in our commercial end market where activity improved year-over-year. In particular, demand from large-scale data center projects has remained strong across several of our core geographies and continues to be a meaningful driver of growth for the business. These projects benefit from our scale, fleet depth and ability to reliably service complex high-volume pours, and we believe we are well positioned to continue supporting this activity. We also benefited from more favorable weather patterns during the quarter compared to the prior year quarter. Combined with strength in pricing, these factors contributed to improved performance and a solid quarter of free cash flow generation. Outside of data centers, the broader commercial end market continues to reflect the trends we have seen in recent quarters. Heavy commercial activity remains relatively resilient, while more interest rate-sensitive segments such as office construction continue to experience softness as developers remain cautious in the current rate environment.

Turning to residential. Conditions were largely unchanged from prior quarters. Elevated interest rates and affordability constraints continue to weigh on homebuilding activity and volumes in this end market remained soft. While we continue to believe in the long-term fundamentals of housing given structural supply-demand imbalances, near-term conditions remain challenging. Infrastructure activity was also generally consistent with recent trends. We continue to closely monitor public infrastructure spending, particularly as the current federal funding bill approaches its expiration in September. That said, it is important to remember that the infrastructure funding is not an on and off switch.

Historically, when a new funding bill is not immediately in place, extensions of existing programs are often implemented, typically adjusted for inflation. As a result, bidding activity and project starts tend to continue. Given this dynamic, our national footprint, we remain optimistic on the overall infrastructure backdrop. Our Eco-Pan Waste Management Services business again delivered a strong quarter, continuing to demonstrate the ability and diversification benefits it brings to the platform. Demand remains healthy, supported by both volume and pricing, and Eco-Pan continues to perform excellently even as the broader construction markets remain mixed.

Moving to our U.K. operations. The impacts of interest rates and economic uncertainty continue to weigh heavily on commercial project volumes. However, infrastructure remains resilient in the U.K., particularly with energy projects and the continued demand in HS2 construction and the long construction runway remaining to the project completion. Finally, we remain on track with our capital investment plans we discussed last quarter. Our focus on fleet management, efficiency and disciplined capital allocation remains unchanged, and we believe these investments will continue to enhance our competitive positioning, support margins and drive long-term shareholder value.

Overall, we are encouraged by the start of the year and believe the first quarter reinforces the strength of our operating model, the benefits of our scale and our ability to perform across a range of market conditions.

I will now turn the call over to Iain to walk through financial results in more detail. Iain?

Thanks, Bruce, and good afternoon, everyone. Moving directly into our first quarter results. Revenue increased 5% to $90.6 million compared to $86.4 million in the prior year quarter. The increase was driven by higher U.S. commercial and infrastructure volumes, particularly in data center-related projects, favorable weather patterns and continued strength in pricing within our U.S. Concrete Pumping and Eco-Pan segments.

Revenue in our U.S. Concrete Pumping segment, which operates primarily under the Brundage-Bone brand, increased 5% to $59.9 million compared to $56.9 million in the prior year quarter. By end market, commercial and infrastructure activity benefited from higher volumes led by data center projects, along with strength in chip plants, education and bridge work. These gains were partially offset by continued softness in light commercial construction and subdued residential demand, largely driven by affordability challenges from elevated interest rates.

Revenue in our Concrete Waste Management Services segment, operating under the Eco-Pan brand increased 8% to $18.1 million compared to $16.7 million in the prior year quarter. This growth was driven by organic volume increases and pricing improvements, underscoring the scalability of this business through the cycle due to long-term market demand. Turning to our U.K. operations, which operates under the Camfaud brand, revenue was $12.5 million compared to $12.8 million in the prior year quarter. The decline was due to a mix of disruptive winter weather and volume-driven weakness in commercial construction activity amid elevated interest rates and economic uncertainty.

Foreign exchange translation provided an approximately 570 basis point benefit to revenue during the quarter. At the consolidated level, first quarter gross margin declined 80 basis points to 35.3% compared to 36.1% a year ago. The decrease was primarily attributable to higher commercial insurance costs and an increase in repair and maintenance expenses. General and administrative expenses declined to $27.5 million in the first quarter compared to $27.8 million in the prior year quarter. As a percentage of revenue, G&A was 30.4% in the first quarter compared to 32.2% in the prior year quarter, reflecting our continued cost discipline. Net loss attributable to common shareholders in the first quarter was $2.9 million or $0.06 per diluted share compared to a net loss of $3.1 million or $0.06 per diluted share in the prior year quarter.

Consolidated adjusted EBITDA increased 6% to $18 million compared to $17 million in the year ago quarter, with adjusted EBITDA margin remaining consistent at 20%. Within our U.S. Concrete Pumping business, adjusted EBITDA increased 6% to $9.7 million compared to $9.2 million in the prior year quarter. In our U.S. Concrete Waste Management Services business, adjusted EBITDA increased 20% to $6 million compared to $5 million in the prior year quarter, driven by strong operating leverage on higher volumes and pricing. And in the U.K. operations, adjusted EBITDA was $2.3 million compared to $2.8 million in the prior year quarter.

Turning now to liquidity. As of January 31, 2026, total debt outstanding was $425 million with net debt of $372 million, representing a net leverage ratio of approximately 3.8x to adjusted EBITDA. We ended the quarter with approximately $350 million of available liquidity, which includes cash on hand and availability under our ABL facility, providing substantial financial flexibility. Regarding capital allocation, during the first quarter, we repurchased approximately 651,000 shares for $4 million at an average price of $6.21 per share. Since initiating this program in 2022, we have repurchased approximately 5.6 million shares for $35.5 million with $14.5 million remaining under the current authorization through December of 2026.

We believe our share buyback plan demonstrates both our commitment to delivering enhanced shareholder value and our confidence in our long-term strategic growth plan. Turning to our outlook for fiscal 2026, which remains unchanged. We continue to expect revenue in the range of $390 million to $410 million and adjusted EBITDA between $90 million and $100 million. Our guidance assumes no meaningful recovery in the construction markets during fiscal 2026. We expect free cash flow, which is defined as adjusted EBITDA less net replacement CapEx and net cash interest to be at least $40 million. This outlook assumes approximately $23 million of net replacement CapEx and $32 million of net cash paid for interest. This excludes the accelerated CapEx pulled forward from fiscal 2027 that was discussed on our prior earnings call.

As a reminder, we are incorporating accelerated fleet investment into our fiscal 2026 planning. We expect to invest approximately $22 million in fiscal 2026 that has been accelerated from 2027, and this pull-forward investment relates to the upcoming 2027 stricter NOx emission standards. Beginning in fiscal 2027, we expect net replacement CapEx to be in the low single-digit percentage of revenue. Our balance sheet and liquidity position comfortably supports this investment strategy. We remain committed to disciplined capital deployment, maintaining leverage within our target range and prioritizing returns on invested capital. We believe we are well positioned to strengthen our service offering in anticipation of a market recovery.

With that, I will now turn the call back over to Bruce.

Thanks, Iain. As we move through the year, we are encouraged by the momentum we are seeing in the business following a strong start to 2026. While some end markets remain challenged, particularly in residential construction, the return to growth in our commercial operations and continued strength in data center-related activity reinforces our confidence in the durability of our platform and our ability to perform across varying market conditions.

Over the last several quarters, we have continued to generate solid free cash flow and maintain a strong balance sheet, preserving the financial flexibility that allows us to operate from a position of strength. This discipline provides the ability to invest through the cycle, remain selective and opportunistic and position the company to benefit as construction activity continues to normalize. Our focus remains squarely on the areas within our control, executing our disciplined growth strategy, maintaining commercial leadership in our core markets, driving efficiency through cost management and fleet optimization and investing strategically in our equipment base as a key source of competitive advantage.

We believe these priorities, combined with the benefits of scale and pricing discipline will continue to support margin performance and long-term value creation. With our strong financial position, we retain the flexibility to pursue value-accretive acquisitions, invest in organic growth initiatives and return capital to shareholders when appropriate. We remain disciplined in our approach to M&A, prioritizing opportunities to strengthen our core platform and align with our strategic and financial objectives. The strength of our operating model, diversified end market exposure and proven ability to navigate cycles gives us confidence in our outlook. We believe we are well positioned to continue executing in the near term while creating meaningful long-term shareholder value as market conditions evolve.

With that, I'd now like to turn the call back over to the operator for Q&A. Yun?

[Operator Instructions]

And our first question is from Sam Kusswurm with William Blair.

I guess to start, I wanted to ask a bit more about the momentum you saw in your business this quarter. The midpoint of your guide calls for top line growth of 2% and no meaningful recovery in the construction market, but you have a pretty strong start to the year here. Can you talk more about the end markets, geographies or project types that is surprising you to the positive? And if it's really primarily the data center work, was there a significant step-up that you weren't expecting before? Just trying to understand the acceleration a bit more.

Yes. So there's 3 things, I think. One, we did have better weather this quarter than we had last year. And so that helped with some of the momentum that we're feeling. We have started this next quarter with fairly good weather as well. So that's helped our Q2 to begin with. The data center work certainly has been stronger for us than we had initially anticipated. And it does appear that there could be greater potential in that as the year plays out, and we're monitoring that very closely.

And I guess the third thing is our infrastructure is continuing to do a little bit better as well with dollars that were set aside for those projects many years ago now coming into play, and we're starting to see that momentum. So with those offsetting some of the softness we're seeing in some of the other commercial segments and residential, we're still a little cautious going into the year, but we feel like we have a good start, and we're looking forward to the rest of the year.

Great. That's very helpful color. Maybe on the fluid side of this, I need to ask about your energy costs. I know it's really early right now in this whole dynamic and a lot seems to be changing every day. But if oil were to stay sticky at, say, $90 a barrel for a while, how should we think about the impact to your margins and your ability to stay within your guidance range for EBITDA, given I think your guide assumes or was assuming similar energy costs as last year?

Fuel prices are certainly front of mind for us. We do have fuel surcharges in a lot of our agreements that are left over from the last time we saw price escalation with fuel. And we're also starting to implement fuel surcharges in other areas as well. We do hope it's short-lived, no telling just how long we'll deal with that, but we'll do the best we can to recoup some of those additional costs.

Our next question comes from the line of Justin Hauke with Baird.

Great. I guess I was curious, I mean, just given that the guidance doesn't assume any volume growth, but you did talk about volume growth and pricing growth. Of the revenue growth, can you break out kind of the split between those 2 for the quarter? I'm just trying to, I guess, gauge how much the better weather helped on the volume side.

Yes, Justin, it was almost split about 2% on the volume side. And like Bruce said, that was some part due to like more consistent weather that we've seen that helped us with execution. And then the remaining piece of about 3% on price year-over-year.

Okay. I guess my second question before I turn it over, I just wanted to understand the language on the CapEx acceleration, which obviously is -- you talked about that last quarter when you gave the guidance, but there was some additional language where you haven't accelerated anything yet. And I didn't know if that meant that, that was still an option that you may decide not to do that $22 million of investment this year or if it just meant in the quarter, none of that had been spent.

Yes. It was just meant in the quarter. We do anticipate spending that this year. Now there may be some concerns with whether or not we can get those truck delivered before our fiscal year-end, which is in October. And largely, we'll have to have the trucks in place that might be delivered into next year that are 2026, but some of the changes that you're hearing or that we're all hearing about the regulation towards trucks, the truck manufacturers are still telling us they're moving forward with the change to the truck and the emissions, which we talked about on our last call being a concern for us because it won't give us the reliability and really the functionality with the stronger horsepower engines that we currently have that won't be available into the future.

So we do anticipate getting out in front of that. Now that has some benefit with the data center growth that we're experiencing, getting those trucks in a little bit earlier to help us with some of that work has been helpful.

At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Young for closing remarks.

Thank you, Bonn. We'd like to thank everyone for listening to today's call, and we look forward to speaking with you when we report our second quarter results in June. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Concrete Pumping Holdings' financial results for the fourth quarter and full year ended October 31, 2025. Joining us today are Concrete Pumping Holdings CEO, Bruce Young; CFO, Iain Humphries; and the company's External Director of Investor Relations, Cody Slach.

Before we go further, I would like to turn the call over to Mr. Slach to read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Thank you. I'd like to remind everyone that during this call, to give you a better understanding of our operations, we will be making certain forward-looking statements regarding our business and outlook. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Concrete Pumping Holdings' annual report on Form 10-K quarterly report on Form 10-Q and other publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise.

On today's call, we will also reference certain non-GAAP financial measures, including adjusted EBITDA, net debt and free cash flow, which we believe provide useful information for investors. We provide further information about these non-GAAP financial measures and reconciliations to the comparable GAAP measures in our press release issued today or in the investor presentation posted on the company's website.

I'd like to remind everyone that this call will be available for replay later this evening. A webcast replay will also be available via the link provided in today's press release as well as on the company's website. Additionally, we have posted an updated investor presentation to the company's website.

Now I would like to turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

Thank you, Cody, and good afternoon, everyone. In the fourth quarter, our results continue to demonstrate the durability of our operating model and the benefit of our diversified platform despite a challenging macroeconomic backdrop. U.S. concrete pumping volumes in the fourth quarter remained stable in the commercial market and the continued improvement in infrastructure was offset by lower homebuilding volumes and softer residential construction markets.

Our Eco-Pan Waste Management Services segment again delivered steady year-over-year growth, underscoring the benefits of our diversified platform. In addition, our disciplined approach to cost management, fleet efficiency and strategic pricing played an important role in managing top line pressure and supporting profitability.

Turning to specific comments by segment within our U.S. pumping business, we continue to experience year-over-year improvement in publicly funded infrastructure work, including road, bridge and education projects infrastructure projects were 24% of our U.S. Concrete Pumping revenue during fiscal 2025, and our national footprint remains an advantage as previously allocated federal and state funding moves into proactive project starts.

In the commercial end market, which was 47% of our U.S. concrete pumping revenue, the demand environment in heavy commercial construction improved through the year in our key geographies, and this is underpinned by expansion in data center, chip plant and large warehouse activity. Light commercial activity was softer year-over-year as construction volumes remained more sensitive to interest rate pressure and tariff-related uncertainty.

Moving on to the residential end market. affordability constraints from higher interest rates continue to cause downward pressure on homebuilding demand volumes and year-over-year revenue was lower in this end market despite pricing being relatively stable. Our residential end market mix was at 29% of total revenue on a trailing 12-month basis and we expect that moderating mortgage rates will encourage a steady path towards normalization to address the structural supply-demand imbalance in housing. We expect this will support medium to long-term homebuilding activity, and we believe the Federal Reserve's path to interest rate reduction should provide incremental support to this end market's growth over time.

Moving to our U.K. operations. Commercial construction activity remains subdued as elevated interest rates and economic uncertainty continue to weigh on volumes However, infrastructure remains resilient in the U.K., particularly in energy projects and continued growth in HS2 rail construction, which still has a long construction runway remaining to project completion. In our U.S. Concrete Waste Management business, we continued to increase revenue due to both organic volume and pricing growth even as the broader U.S. construction markets remain challenged.

Now I'd like to pivot to 2026 and our capital investment plans, particularly surrounding an upcoming change with tighter emission standards that we believe will impact the broader construction industry. As a company focused on sustainable growth and long-term shareholder value, we are proactively accelerating a $22 million investment from fiscal 2027 into fiscal 2026 and in our U.S. Concrete Pumping and Eco-Pan fleet to advance -- in advance of the upcoming 2027 stricter NOx emission standards.

For those of you who are unaware of what this means, NOx refers to nitrogen oxides, which are emissions which are emissions produced by diesel engines and regulated due to their impact on air quality. The upcoming 2027 standards that are expected to go into effect January 1, 2027, and significantly tighten allowable NOx emission levels for new heavy-duty equipment.

For fleet operators like Concrete Pumping Holdings, these standards affect the cost, design, reliability and availability of new OEM equipment and will increasingly influence customer preferences on job site requirements. The decision to accelerate equipment purchases is based on a couple of key considerations, including navigating expected disruptions from first-generation truck technologies and anticipated truck price increase in 2027 driven by incremental OEM production costs.

From an operational standpoint, we have experienced this change in emission regulations before and transitioning heavy construction equipment to meet modern NOx emission standards is far more complex than simply replacing an engine or adding emissions hardware. These changes fundamentally alter how the equipment behaves in real-world conditions in the last engine emissions change took several years to achieve an acceptable standard. This pull forward of a significant portion of fiscal year 2027 investment will reduce replacement CapEx expenditures in fiscal year 2027 and aligns with our capital allocation road map to allow for a smooth transition under new regulations to improve the company's competitive positioning.

I will now let Iain address our financial results in more detail before I return to provide some concluding remarks. Iain?

Thanks, Bruce, and good afternoon, everyone. Moving right into our fourth quarter results. Revenue was $108.8 million compared to $111.5 million in the prior year quarter. The slight year-over-year decline reflects continued timing delays in commercial construction activity and softness in residential demand, driven primarily by the prolonged high interest rate environment.

Revenue in our U.S. Concrete Pumping segment mostly operating under the Brundage-Bone brand was $72.2 million compared to $74.5 million in the prior year quarter. Looking at our end markets. Infrastructure projects remained a bright spot, with demand supported by sustained federal and state investments. Commercial project volume was largely consistent with the prior year fourth quarter. Strength in heavy and complex commercial projects helped to offset softness in light commercial work that continues to feel the pressure from high interest rates. Residential demand softened late in the fiscal year, consistent with the broader affordability challenges and the prolonged high interest rate environment.

Revenue in our U.S. Concrete Waste Management Services segment, operating under the Eco-Pan brand increased 8% to $21.3 million compared to $19.8 million in the prior year quarter. This organic growth was driven by higher pan pickup volumes and continued pricing momentum, underscoring the durability of this business through the cycle. For our U.K. operations, operating under the Comfort brand, revenue was $15.3 million compared to $17.1 million in the same year ago quarter. The decline was primarily volume driven, reflecting ongoing weakness in commercial construction activity amid elevated interest rates and economic uncertainty. Foreign exchange translation was a 220 basis point benefit to revenue in the quarter.

Returning to our consolidated results. Fourth quarter gross margin declined 170 basis points to 39.8% from 41.5% a year ago. As we continue to focus on the elements of business that we can control, a strong emphasis on cost control initiatives and pricing discipline help mitigate margin pressure from lower demand volumes. However, these benefits were slightly outweighed by lower volumes and reduced fleet utilization.

General and administrative expenses in the fourth quarter were $26.5 million compared to $27 million in the prior year quarter. As a percentage of revenue, G&A was 24.4% in the fourth quarter compared to 24.2% in the prior year quarter, reflecting some operating deleverage on lower revenue rather than an increase in absolute spending.

Net income available to common shareholders in the fourth quarter was $4.9 million or $0.09 per diluted share compared to $9 million or $0.16 per diluted share in the prior year quarter.

Consolidated adjusted EBITDA in the fourth quarter was $30.7 million compared to $33.7 million in the same year ago quarter. Adjusted EBITDA margin was 28.2% compared to 30.2% in the prior year quarter. The decline was primarily driven by lower revenue volumes, partially offset by ongoing cost initiatives across the organization.

In our U.S. Concrete Pumping business, adjusted EBITDA declined to $17.5 million compared to $19.7 million in the same year ago quarter. In our U.K. business, adjusted EBITDA was $4.1 million compared to $5.2 million in the same year ago quarter. And for our U.S. Concrete Waste Management Services business, adjusted EBITDA increased 3.8% to $9.1 million, reflecting robust operating leverage on higher volumes and pricing.

Turning now to liquidity. At October 31, 2025, we had total debt outstanding of $425 million and net debt of $380.6 million representing a net debt to adjusted EBITDA leverage ratio of approximately 3.9x. We ended the quarter with approximately $360 million of available liquidity, including cash on hand and availability under our ABL facility, providing substantial financial flexibility. Now moving on to our share buyback plan.

During the fourth quarter, we repurchased approximately 274,000 shares for $1.8 million or an average price of $6.73 per share. Since initiating this program in 2022, we have repurchased approximately 4.9 million shares for roughly $31.5 million, with $18.5 million remaining in the current authorization through December of 2026. We continue to view repurchases as a flexible and opportunistic component of our capital allocation strategy that demonstrates our ongoing commitment to delivering enhanced shareholder value.

Turning to our outlook for fiscal 2026. We expect revenue to range between $390 million and $410 million, and adjusted EBITDA to range between $90 million and $100 million. Our guidance assumes no meaningful recovery in the construction markets during fiscal year 2026.

While overall manufacturing and commercial activity remains muted due to interest rate and tariff uncertainty, we continue to see healthy bidding activity and project starts in large-scale commercial projects such as data centers, semiconductor facilities and distribution centers, where pricing remains constructive.

In our infrastructure and residential end markets, we expect 2026 revenue to be roughly flat year-over-year. We expect free cash flow, which we define as adjusted EBITDA less net replacement CapEx, less net cash paid for interest to be at least $40 million. The 2026 outlook assumes approximately $23 million of net replacement CapEx and $32 million of net cash paid for interest. This excludes the exceptional accelerated CapEx brought forward from 2027.

As Bruce mentioned, we are incorporating accelerated fleet investment into our fiscal 2026 planning and long-term capital allocation framework. In fiscal 2026, we expect to invest approximately $22 million that has been accelerated from our planned 2027 capital allocation investments. This represents a timing shift rather than a structural change to our long-term capital framework with our fleet net replacement expected to be low single-digit percentage of revenue in fiscal 2027.

Our balance sheet and liquidity position is comfortable to support this fleet investment, and we remain committed to disciplined capital deployment, maintain leverage within our target range and prioritizing returns on invested capital. We believe we are well positioned to strengthen our service offering in anticipation of a market recovery.

With that, I'll now turn it over to Bruce.

Thanks, Iain. While end markets have yet to show signs of a sustained recovery, we believe the company is well positioned to benefit as construction activity ultimately improves. Over the last several quarters, we have preserved financial flexibility and generated strong cash flow, reinforcing the stability of our platform. Our focus remains in the areas within our control, executing against our disciplined growth strategy, maintaining our commercial leadership, driving efficiency through operational excellence and strategically investing in our fleet as a source of significant competitive advantage.

With our solid financial position, we have the flexibility to pursue acquisitions when opportunities arise, invest in organic growth initiatives and deliver superior shareholder value. We continue to take a disciplined and opportunistic approach to M&A with a focus on value-added acquisitions that strengthen our core platform. In November of 2025, we completed an acquisition in Republic of Ireland that aligns us well with our strategy. While modest in size, the transaction adds complementary capabilities in a new international region with healthy long-term demand drivers.

The durability of our business model combined with a track record of successfully navigating cycles gives us confidence in our ability to deliver healthy financial and operating results through a variety of environments. We believe this positions the company to create long-term shareholder value over time.

With that, I'd now like to turn the call back over to the operator for Q&A. Von?

[Operator Instructions] And our first question comes from Tim Mulrooney with William Blair.

So a couple of questions on the guide here. I know you're expecting construction end markets to remain challenged this year, but it looks like you're actually expecting revenue to be up modestly at the midpoint. So can you just talk about the drivers behind that? Is the year-over-year growth primarily from the acquisition? Or are you expecting some organic growth as well?

Yes. Tim, this is Iain. I'll take that. Yes. It's more so we're expecting volume to be largely consistent year-over-year, but we do expect to see some pricing improvement. Some of that will come from the larger projects that we mentioned. But year-over-year, we expect the volume to be relatively flat year-over-year. So that's where the incremental growth at the midpoint would come from.

Okay. That's helpful. And then sticking on the guidance for a minute. It looks like you expect revenue to be up a little bit, but margins to contract, correct me if I'm wrong on that math. But if I'm right, how should we think about the primary drivers of that margin pressure in 2026 in the context of that low single-digit top line growth implied by the midpoint of your outlook? Is it just fleet utilization? Or is there more that I should take into consideration now?

Yes. No, I think you're right. It's mostly fleet utilization. I mean, obviously, as we scale volume. We get some nice incremental margin. But with the volume being flat, there's a marginal decline in that margin percentage at the midpoint from that lower-than-expected or optimal utilization.

Okay. Got it. Very clear. And if I could just sneak one more in, if you'd permit me. I wanted to ask about your outlook for residential construction, which I know continues to be a challenge right now, but it was a source of strength, not all that long ago. Would you characterize this market right now for you for new home construction as getting progressively softer in recent months or stabilizing or on a slow path to recovery? I asked because we're getting all sorts of different signals and opinions from macro data points out there.

Thanks, Tim. I'll take that. And I think I would look at that from the different regions. The regions where we most of our residential. It was a little softer last year, but it's starting to improve slightly. And we do expect that it should improve some during this year. We're actually somewhat optimistic on residential.

Okay. Good luck in '26. .

Our next question comes from Brent Thielman with D.A. Davidson. .

Yes, just I wanted to maybe just follow up on the overall kind of growth outlook for 2026 as you sit here today and maybe just ask in a different way your high-level views and expectations for each of the business groups. I guess I'm thinking a little more towards the U.K. group and Eco-Pan. What's sort of a good framework for us to think about for those 2 businesses with what you see in front of them?

Yes. Thanks, Brent. So taking them one at a time. So in the U.K., we have a really strong presence in the publicly funded work, especially HS2 and some of the energy projects that are going on. There's some work around London that we are very well positioned for us. We expect the public spend to be really good in our revenue in the U.K. to be quite strong with that. our opportunity that we have in Ireland is being run out of our U.K. operation. We see that as the commercial market in Ireland is good. The infrastructure market in Ireland is good. So we expect that small business that we bought there to improve throughout the year. And the real question mark for us in the U.K. is really the rebound of the commercial market. it appears that they're maybe 6 months behind even the U.S. market on commercial work. And so that's kind of our outlook there.

Eco-Pan, as you know, we always expect double-digit growth. And we think the construction market went backwards significantly last year, but Eco-Pan still had reasonable growth. We think with the kind of the flatness in the market going forward this year that Eco-Pan should be back to high single digits, maybe double-digit growth. We feel pretty good about the outlook for them. And with our U.S. Concrete Pumping business, we just mentioned residential, we expect it to be somewhat resilient this year. Infrastructure has been a little bit better for us.

The real question for us is in the commercial market. As you know, we do a lot of work on data centers and chip plants and those sorts of things, which are really nice jobs for us that require technical equipment, high volumes of concrete being placed off in remote areas. That's a really nice fit for our business. That's the upside, but the downside is there's still no office buildings, manufacturing because of tariff concerns, really hasn't come about like we would expect it to.

Hopefully, the tariff discussions get settled out sometime this year and manufacturing starts coming back. But the commercial market is kind of the question in the U.S. as well. The chip plans and data centers keep us going strong while we're waiting for light commercial and some of these other end markets come back in segments.

Really helpful, Bruce. Appreciate all that. Maybe just on Eco-Pan and getting to that high single, potentially low double-digit kind of growth. Is that contingent on your ability to get into new markets? Or can you get there in the existing sort of geographies that you're operating in?

Yes, good question. So we're always moving into -- every year, we move in a couple of new markets, but it takes a little while for them to develop. But again, the markets that we have into previously haven't matured yet. And so there's not a lot of opportunity to create greater density in some of the current markets that we're already in.

Got it. Maybe just the last question, the CapEx pull forward. Does this address all of your requirements associated with the upcoming regulations? Or should we think there's another big flood in CapEx in the next year, too?

No, this pulling it forward will address almost all of that issue. I don't know if you remember back that in 2008, the last time there was a major change in the admissions. For the concrete pumping industry, it literally took from 2008 to 2013 before they could come out with a reliable truck that they could put underneath a concrete pump and operate it. Now I realized during that time, we had the GFC. So there maybe wasn't a lot of effort to put into that, but we are concerned about the disruption to giving us a is reliable to service our customers the way we need. And that's the reason we're pulling that forward so we don't get caught up in that as they're trying to sort through getting us a reliable solution.

[Operator Instructions] Our next question comes from Andy Wittmann with Baird.

It's nice to have a CEO that has been around long enough to learn from the 2008 truck crisis to avoid in the past. So that's a good thing. I guess just Eco-Pan margins, good revenue growth. EBITDA didn't come through quite as much, Iain, was that a comp issue? Or you had to mention that you said that the pickups of the deliveries were a big driver. So I guess that's probably a little lower margin. Is that what it is? Is that the bridge Normally, I would expect positive leverage out of the business here, but that you could address?

Yes. I mean, as Bruce mentioned just in the last of his closing remarks, we did move into some new regions. So as you know, there is a little bit of overhead investment to stand up some of those new regions. So I mean slight change in the EBITDA margin percentage. But the payback and the ROI is still really healthy. So yes, we're still very happy with the margin. But as you know, there's a bit of an investment lag as we stand up some of those new markets that we entered into sort of late in '25, yes.

Okay. And then I just thought I'd ask about fuel actually. Crude prices are way down, but it doesn't look like diesel's followed suit quite as much. I was hoping you could just address what the net impact was in fuel to the quarter? And what you're looking for what's kind of underwritten in your guidance? I know obviously, there's a range, so there's a range in your fuel outcomes as well. But so are you thinking is that a headwind year-over-year in '26 tailwind? I know that diesel prices in November were super low actually, but they've kind of popped up a little bit more since then. So just maybe if you could address the topic a hole would be helpful for us.

Yes, sure. So I mean, obviously, we track that as well. And so year-over-year in the quarter, they were largely flat. They have come down. I mean, this is back from like 2022, '23, but it's sort of been a bit uneven, I would say, over the last year or 2. Our assumption is going forward, that will largely remain so we don't see it or like a headwind or a benefit going into next year as we sit here currently. So yes, that's a quick look back and where we see things going forward.

Got it. And then just, Bruce, just I know the Ireland investment is not that significant, but it feels kind of like a bit of a change. I guess you're not in Dublin. I know the whole country is kind of growing, but is this a one-off? Or do you feel like now that you've got at least some kind of a flag planted here that you need to build out the rest of the Republic. And maybe if you could just talk about any things that we should think about for modeling that one, Iain, that would be just helpful cash outlay or how much revenue we should expect from it just so we can understand what it might contribute?

Yes. Well, thanks for the question, Andy. But certainly, we wouldn't have gone into court just as a one-off. We see opportunity for several other opportunities for acquisitions in Ireland. And certainly not anything to talk about currently, but our plan is to take that and grow it.

Iain, any comments? Is there anything you can say in the economics? Or should we just wait for the filing? .

Yes. I mean on the economics in U.S. dollars, it's largely a couple of million dollars of revenue and about $0.5 million EBITDA contribution. And then as Bruce says, I mean, obviously, there's scale in Europe. I mean 1 thing that we can do is there's a common -- they call it a common travel area between the U.K. and Ireland. So there is an ability to move labor back and forth as we sort of build out that landscape. I mean as you move between like Galway, Dublin, Liberec, Decor. It is -- there's a really strong economy that's back in some of the construction activity we're seeing there.

Okay. Last one for me. Sorry to keep going here, but just run all up. Bruce, just kind of on the environment, I guess, for lack of a better term. At first, when interest rates are going up and things were kind of slowing down, there was talk about projects delayed timing, not cancellation, you still kind of had them on the roster for doing the job someday. I just wanted to check in on that, has there been, in fact, now cancellations that you're going to have to kind of rewin the jobs? Or what is kind of status of some of the stuff that was a onetime plan, but has been kind of slow moving now for a while. I'm just kind of curious what you kind of see there and kind of where your backlog stands today as a result of that.

Yes. So the only 2 areas that I would say that we have that concern, any office buildings that were planned over the last few years, they've been shelved and there's no telling when they may come back manufacturing, there's a lot of that, that is on hold, may start up depending on how the tariff conversations land. Many of those projects we already have and if they go, we'll be in line to do those projects. So we feel pretty good about that. But like we mentioned earlier, the offset is the chip plans and the data centers where we're doing quite well on that. And as long as they can keep providing energy and water to those sites, we think that could be really good for us this year.

At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Young for closing remarks. .

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

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.

Good afternoon, everyone and thank you for participating in today's conference call to discuss Concrete Pumping Holdings' financial results for the third quarter ended July 31, 2025. Joining us today are Concrete Pumping Holdings' CEO, Bruce Young; CFO, Iain Humphries; and the company's External Director of Investor Relations, Cody Slach.

Before we go further, I would like to turn the call over to Mr. Slach to read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Thank you. I'd like to remind everyone that in the course of this call, to give you a better understanding of our operations, we will be making certain forward-looking statements regarding our business and outlook. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Concrete Pumping Holdings' annual report on Form 10-K, quarterly report on Form 10-Q and other publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

On today's call, we will also reference certain non-GAAP financial measures, including adjusted EBITDA, net debt and free cash flow, which we believe provide useful information for investors. We provide further information about these non-GAAP financial measures and reconciliations to the comparable GAAP measures in our press release issued today or the investor presentation posted on the company's website.

I'd like to remind everyone this call will be available for replay later this evening. A webcast replay will also be available via the link provided in today's press release as well as on the company's website. Additionally, we have posted an updated investor presentation to the company's website.

Now I would like to turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

Thank you, Cody, and good afternoon, everyone. In the third quarter, our results demonstrated the resilience and adaptability of our business model through ongoing macroeconomic headwinds and localized weather-related disruptions. Our disciplined focus on cost management, fleet optimization and strategic pricing helped buffer against top line volume softness. Despite the market pressures, we remain committed to generating healthy free cash flow, maintaining flexibility and deploying capital thoughtfully to position the company for stronger performance as market conditions improve.

Now turning to specific comments on -- by segment. With our U.S. Concrete Pumping business, we continue to experience construction softness across a variety of commercial work, especially in more interest rate-sensitive light commercial projects. Larger commercial projects such as data centers and warehouses remain durable but continue to move at a slower pace given the uncertain economic backdrop.

Similar to last quarter, volume demand in our residential end market remained largely resilient against some pricing pressure in the Mountain region and Texas and we experienced continued softness in other U.S. regions due to market uncertainty and elevated interest rate environment. Our residential end market mix remained at 32% of total revenue on a trailing 12-month basis. We still expect the structural supply-demand imbalance in housing will continue to support medium- to long-term homebuilding activity, and we believe the Federal Reserve's path to interest rate reduction should continue to support this end market's growth.

Additionally, on the infrastructure side, our national footprint continue to allow us to gain market share as previously allocated funding moves into project starts. Finally, higher-than-normal rainfall in our central and southeastern regions further disrupted revenue in our U.S. Concrete Pumping business.

Moving to our U.K. Operations, the impacts of interest rates and economic uncertainty weighed more heavily on commercial project volume than we had experienced last quarter. However, infrastructure remains resilient in the U.K., particularly with continued growth in HS2 construction and a long construction runway remaining to project completion.

We expect our infrastructure business, both in the U.K. and the U.S. to remain robust in fiscal year 2025 due to the funding environment in the U.K. as well as opportunities domestically from the conversion of allocated budget funding into project starts within the Infrastructure Investment and Jobs Act.

In our U.S. Concrete Waste Management business, we continue to increase revenue due to both volume and pricing growth despite broader market headwinds.

I will now let Iain address our financial results in more detail before I return to provide some concluding remarks. Iain?

Thanks, Bruce, and good afternoon, everyone. Moving right into our results in the third quarter, revenue was $103.7 million compared to $109.6 million in the prior-year quarter. As Bruce mentioned, the decreased revenue was mostly attributable to a volume decline in our U.S. Concrete Pumping segment due to the continued softness in U.S. commercial construction volume and some adverse weather disrupting several of our U.S. regional markets.

Revenue in our U.S. Concrete Pumping segment, mostly operating under the Brundage-Bone brand, was $69.3 million compared to $75.2 million in the prior-year quarter. We estimate adverse weather in our central and southeast regions impacted our third quarter revenue by approximately $2 million.

Revenue in our U.S. Concrete Waste Management Services segment, operating under the Eco-Pan brand, increased 4% to $19.3 million compared to $18.5 million in the prior-year quarter. This organic increase was driven by robust pan pickup volumes and sustained improvement in pricing.

For our U.K. Operations, operating under the Camfaud brand, revenue was $15.1 million compared to $15.9 million in the same year-ago quarter due to lower volumes caused by a general slowdown in commercial construction work, mostly due to the impact from high interest rates. Foreign exchange translation was approximately a 500-basis point benefit to revenue in the quarter.

Returning to our consolidated results. Third quarter gross margin declined 160 basis points to 39% from 40.6% a year ago. While all going cost control initiatives help support margin performance, they could not fully offset the impact from lower revenue volumes and fleet utilization as we deliberately continue to invest in our equipment and people in the present softer market. As the construction market recovers, however, we expect to have an outsized benefit from these investments. As a result, we would expect to see bottom-line expansion through improved fleet utilization and higher efficiencies of pumping volumes.

General and administrative expenses in the third quarter declined slightly to $27.5 million compared to $27.9 million in the prior-year quarter. As a percentage of revenue, G&A costs were 26.5% in the third quarter when compared to 25.5% in the prior-year quarter.

Net income available to common shareholders in the third quarter was $3.3 million or $0.07 per diluted share, compared to net income available to common shareholders of $7.1 million or $0.13 per diluted share in the prior-year quarter.

Consolidated adjusted EBITDA in the third quarter was $26.8 million compared to $31.6 million in the same year-ago quarter. And adjusted EBITDA margin was 25.8% compared to 28.8% in the prior-year quarter. In our U.S. Concrete Pumping business, adjusted EBITDA declined to $15.6 million compared to $20.3 million in the same year-ago quarter. In our U.K. business, adjusted EBITDA was $3.9 million compared to $4.2 million in the same year-ago quarter. And for our U.S. Concrete Waste Management Services business, adjusted EBITDA increased 3% to $7.4 million compared to $7.2 million in the same year-ago quarter.

Turning now to liquidity. July 31, 2025, we had total debt outstanding of $425 million and net debt of $384 million. This equates to a net debt-to-EBITDA leverage ratio of approximately 3.8x. We had approximately $358 million of availability at the end of July, which includes cash on the balance sheet and availability from our ABL facility.

Now moving on to our share buyback plan. During the third quarter, we repurchased approximately 593,000 shares for $3.8 million or an average price of $6.40 per share. Since the buyback was initiated in 2022, we have repurchased over 4.6 million shares or approximately $30 million of our stock with $20 million remaining in the authorized plan through December of 2026. We believe our share buyback plan demonstrates both our commitment to delivering enhanced value to shareholders and our confidence in our long-term strategic growth plan.

Moving now into our 2025 full year guidance, which remains unchanged. We expect fiscal year revenue to range between $380 million and $390 million. Adjusted EBITDA to range between $95 million and $100 million. We expect free cash flow, which we define as adjusted EBITDA less net replacement CapEx and less cash paid for interest, to be approximately $45 million.

Despite a challenging macroeconomic backdrop, we're committed to a prudent capital allocation and an opportunistic investment strategy. Combined with our consistent track record of strong unit economics, healthy liquidity and balance sheet strength, we believe we are well positioned for continued investments in our fleet to strengthen our service offering in anticipation of a market recovery in fiscal 2026 and beyond.

With that, I will now turn the call back to Bruce.

Thanks, Iain. While end markets have yet to show signs of a sustained recovery, we continue to believe our business is well positioned to benefit when construction activity improves. Over the last several quarters, we have maintained a healthy balance sheet and strong cash generation, reinforcing the stability of our platform. Our focus remains in the areas within our control, executing against our disciplined growth strategy, maintaining our commercial leadership and driving efficiencies through operational excellence.

With our solid financial position, we have the flexibility to pursue acquisitions when opportunities arise, invest in organic growth initiatives and deliver superior shareholder value. The durability of our business model, combined with a track record of successfully navigating cycles gives us confidence in our ability to deliver healthy financial and operating results through a variety of environments. These efforts, we believe, set the stage for long-term shareholder value creation.

Lastly, on tariffs, we do not anticipate any meaningful direct near-term impact on our business, however, the heightened uncertainty has contributed to delays in customer decision-making and a slower pace of commercial project commitments.

With that, I would now like to turn the call back over to the operator for Q&A. Joe?

[Operator Instructions] And the first question comes from the line of Andy Wittmann with Baird.

Yes, I would just -- wanted to ask a little bit more detail on the outlook here. I guess just maybe just in terms of the fourth quarter, just looking at the implied guidance, I understand you don't want to change the ranges because there wasn't a big enough change to do anything here, but it looks like you're kind of implying that margins might be up, if I look at the midpoint in the fourth quarter. I don't know, Iain, if that's your math as well. And given that revenues are going to be down, that seems like it could be tougher. So just maybe thought you could address that one first, and then I want to talk about '26 and beyond.

Yes. So on the guidance piece, I mean, as you know, we tightened the range in the last quarter. So we still feel good about the range. And then as you know, in quarters 3 and 4 are usually quite comparable. There's an extra day in the fourth quarter compared to the third quarter. So we feel good about the range and where the margin profile is trending and the volume in the business for the fourth quarter.

Got it. Okay. Just -- and then I noticed the subtlety here. You're trying to -- it looks like in the commentary on the revenue guide, you're trying to just get everybody framed up here as to how do we think about the recovery here eventually. I think last quarter, you're a little bit more optimistic it could happen a little bit earlier here. It seems like you pushed it out a little bit or at least a couple of quarters, Bruce.

Maybe you could just talk about -- is this what you're seeing in the backlog? Is this what you're hearing from customers? Kind of what informs this new view of when the recovery -- positive revenue growth or at least positive volume growth, what informs it this quarter versus prior quarters, if anything is different?

Yes. Thanks, Andy. So some of the things we are seeing that are a little bit more positive. The bidding activity that we have right now is up from what we've seen in previous months slightly. As you know, residential has been fairly resilient for us. We expect it to stay strong through next year. The infrastructure projects are starting to come a little more rapidly than what we had seen in the past in the U.S. And then, of course, in the U.K. with HS2 really kind of hitting its height now and some decent infrastructure projects coming behind that. That looks good as well. The larger commercial projects, data centers, we're seeing good activity there, chip plants, big warehousing.

What we're not seeing a lot of is manufacturing, that seems to be a little bit on hold until the tariff talks kind of settle out. But we're becoming more optimistic into next year, but it's really too early to tell just what that's going to look like.

The next question comes from the line of Brent Thielman with D.A. Davidson.

Bruce, I was just wondering if you could speak to what you're seeing in the U.S. business relative to some of the pricing pressure you've alluded to in the past, whether you're seeing any stabilization in that? Or does that still exist and is still a factor here in the results?

Yes. That still does exist. And I think the reason for that is with light commercial being off, there -- a lot of the competitors that we have are trying to go after more complex projects that they wouldn't have gone after before, putting some pricing pressure on those types of projects. And with the softness in some of the markets that we're in with residential, it's caused a little more pricing pressure there. We do expect that we'll see that continue for another 6 months or so. And then as markets start recovering, we think that will go away.

And then on the U.S. pumping margins, when we just [ compare, ] is the, I guess, the lower comparison is purely just the underutilization of assets? Are you still modeling some costs that you've got to overcome? Is inflation a factor here? Or is it just getting [indiscernible] leverage back in the business, see the margins reverse?

Yes, Brent, thanks for the question. Yes, on the margin profile, I mean, as you would expect that the change in volume does put some pressure on that margin profile. I mean, as we mentioned in our prepared remarks, we've been very focused on the cost initiatives to help balance that. Unfortunately, it didn't quite offset the challenge on the margin piece. So there is a bit of operating leverage that we've seen right now.

But we expect the other side of that, as the volumes improve, the improvement from utilization improves that operating leverage, and we would expect to see a strong recovery on the benefit of that once the volume piece moves in the positive direction. But for right now, you're right, that's the current pressure on the margins, but that's also the benefit of the variable nature of our cost base that we can weather that storm and then obviously expand the margin profile as utilization and volumes improve.

The next question comes from the line of Luke McFadden with William Blair.

Maybe just tagging off of Andy's question related to the outlook from earlier. If the recovery were to begin in fiscal 2027 in terms of construction markets, should we be interpreting that to mean that growth might continue to be down in 2026? I know you're not in a position to be providing guidance for next year. But just as we kind of think about the shape of the recovery here as we move through the next 12 to 18 months?

Yes. Certainly, we expect by 2027, things will get better. At this point in time, it's difficult to know when in 2026, that turns. And so we're really not comfortable giving guidance out for '26 yet.

Sure, of course. Makes sense. And then, Iain, maybe just one clarification question related to weather. I think the comparable period from last year, weather, it caused about a $6 million headwind to the quarter. With that $2 million headwind that you called out for this quarter, are you saying in total, there was an $8 million weather-related headwind for the third quarter of 2025 here?

No, it was $2 million in comparison to last year. I mean, last year was also quite bad. But in the months of May and June, this year, it was worse than it was in the prior year. So it's a 2 years like year-over-year comparison. I mean, obviously, these weather events create some near-term noise that we sort through. So there's a bit of a disruption compared to last year in the months of May and June.

Understood. Understood. And if I can sneak in just one more here at the end. As we think about some of the heavy construction expected to be built domestically over the next few years, things like semiconductor fabs, data centers and broader manufacturing, it looks like some of this construction is probably going to congregate in certain geographic markets. I'm just wondering how you currently feel about your geographic footprint and if there any areas you'd like to have more exposure to in light of some of these trends?

Yes. That's a really good question. So we currently feel pretty good about our footprint. However, we have expanded our footprint recently to take in projects that were quite sizable in areas we weren't in, and we'll continue to do that into the future.

This concludes our question-and-answer session. At this time, I'd like to turn the call back over to Mr. Young for closing remarks.

Thank you, Joe, and thanks, everyone. We'd like to thank everyone for listening to today's call, and we look forward to speaking with you when we report our fourth quarter and full fiscal 2025 results in January.

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