Bruce Young is the CEO of Concrete Pumping Holdings, ticker symbol BBCP. Concrete Pumping Holdings is a construction services company based out of Denver, CO. BBCP is the largest concrete pumping services provider in the US and UK. Tune in to hear Bruce provide an overview of his business, the industry outlook, and his priorities for the company.
When this interview was published, Concrete Pumping Holdings had a market cap of $270M, total debt of $417M, and cash on the balance sheet was nearly $5M, putting the enterprise value just over $650M. Under the GICS classification system, BBCP falls within the industrial sector.
From a personal perspective, I walked away from this interview with three important takeaways. First and foremost, management is super solid. Bruce knows the business backwards and forwards, and, something I didn’t know until I had the chance to interview him – Bruce isn’t just an executive, he’s an operator. Secondly, the company generates a ton of free cash. In recent years, free cash flow margin has been around 22% and free cash flow conversion from EBITDA has been about 65%. And the third takeaway, were the similarities between the what the big waste services companies have done in their industry to what Bruce and his team are doing in the concrete pumping services space. To learn more about the waste services model, check out the interview I had with Waste Management’s CFO Devina Rankin.
Interview Transcript
Participants
Bruce Young, CEO of Concrete Pumping Holdings (BBCP)
Nate Abercrombie, The Stock Podcast
Interview Transcript
Nate: Thank you very much for coming onto the podcast.
Bruce: Well, thanks Nate. I appreciate you inviting me here.
Nate: It’s my pleasure. I’m personally very interesting in your business. You guys generate tons of free cashflow. But before we get to anything financials related, we’d just like to hear about your background.
Bruce: Well, thanks. So I’ve been the CEO of the business since 2008, with the company in 1985. I started in the concrete pumping business in 1980 in Casper, Wyoming as a concrete pump operator. And then I was involved in starting the Eco-Pan business in 1999 in our Seattle operation, where I was our branch manager at that point and time. And I’ve been the CEO of the Eco-Pan business since we started it.
Nate: Okay. That’s great to know. I’m very interested in what Eco-Pan is, but before we get to Eco-Pan, I guess just the history of Concrete Pumping Holdings would be, I think, educational for listeners.
Bruce: Yeah. So this is a great a story. Brundage-Bone Concrete Pumping was started by Jack Brundage and Dale Bone in 1983. And they had very ambitious goals. They had decided that they wanted to come together and build a national player in the US. And the goal to build that was to bring in the very best equipment, hire the very best people, acquire the very best businesses and build that out over some period of time. Now as you know today with the size that we are, we’ve accomplished most of those goals. We have a phenomenal team of people. We have service offerings that are far superior to anyone else in our industry. Not only do we have a national presence, we acquired in 2016 the Camfaud businesses in the UK, so we’ve extended it with that being our first international opportunity. We sold the business in 2014 to Peninsula Pacific Strategic Partners, which was a private equity firm based out of California. And at the same time, myself and other managers, we owned Eco-Pan separately, and we tucked Eco-Pan in with that acquisition. We ran that for about four years. It was quite successful for all of us. And in 2018, we decided to go auction and market the business. And through that auction, we met the folks from Industrea, which is a SPAC sponsored by Argand. And we were able to become a public company in December of 2018 through that SPAC.
Nate: Could you talk a little bit about the business model? So how do you guys make money?
Bruce: Yeah. So in the concrete pumping service, whether it’s on the US or the UK, especially with our national footprint, we supply concrete pumping services to customers in various end markets, where anywhere you can’t drive a ready mix truck through, the most efficient, safest way to place concrete is putting it through a concrete pump. And these concrete pumps come in many different shapes and sizes and configurations so that we can meet what our customers’ needs are. And then with our Eco-Pan business, we have found in the US and the UK, we both have the same environmental controls and regulations that need to be adhered to, and so every concrete placement requires a washout system. And so we believe in the US this is about a $900 million market, of which we only have about a little over 3% market share.
Bruce: And the idea is that we provide pans to job sites that are in various sizes, where you can either clean out a concrete pump into a pan, a smaller pan, or larger pans are used to clean out ready mix trucks and other tools on the site. And then what we do is we have a lid that seals in the liquid waste. We haul it off to recycle facilities to have the materials recycled, and it’s sold off as backfill or road base.
Nate: So explain that just a little bit. What is concrete washing?
Bruce: So when we’re pumping concrete, we have a pipeline on our boom truck, so if you’re looking at the concrete pump, it looks similar to a crane that is mounted on a truck that drives up and down the road. And there’s a pipeline on that, and when you finish pouring, you have to clean the pipeline out. The way you do that, you bring the material back into the hopper that is used for the concrete to be poured into. At the end of the pour, that hopper needs to be dumped on the job site. In many areas, especially in downtown areas, or nearly every residential area we deal with now, they have some controls or some constraints on where that washout can be handled. And so historically, it was just dumped on the ground. Well, dumped on that ground, the water runs in the storm drain and is a pollutant and causes other issues. So we provide these pans, where you can actually stick the pan under the hopper of the concrete pump. When we’re done pumping, we dump the hopper of the pump into the pan. It contains that liquid waste, and again, with the ready mix trucks, they have chutes that they’re pouring concrete down these chutes as they’re either pouring into a concrete pump, or if they not using the concrete pump, they’re still using those chutes that need to be washed out at the end of the day. We provide a container to wash that material off of those chutes into before it gets hard on the chute or in a concrete pump.
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