Concrete Pumping Holdings Inc

Previous wording

All branches operating within our U.S. Concrete Pumping segment are concrete pumping service providers in the United States ("U.S."). Our U.S. Concrete Pumping core business is the provision of concrete pumping services to general contractors and concrete finishing companies in the commercial, infrastructure and residential sectors. Equipment generally returns to a "home base" nightly and these branches do not contract to purchase, mix, or deliver concrete. This segment collectively has approximately 100 branch locations across approximately 21 states with their corporate headquarters in Thornton, Colorado.

Current wording

All branches operating within our U.S. Concrete Pumping segment are concrete pumping service providers in the United States ("U.S."). Our U.S. Concrete Pumping core business is the provision of concrete pumping services to general contractors and concrete finishing companies in the commercial, infrastructure and residential sectors. Equipment generally returns to a "home base" nightly and these branches do not contract to purchase, mix, or deliver concrete. This segment collectively has approximately 100 branch locations across 21 states with their corporate headquarters in Thornton, Colorado.

Previous wording

The tables included in the period-to-period comparisons below provide summaries of our revenues and gross profits for our business segments for the three and six months ended April 30, 2024 and 2023.

Current wording

The tables included in the period-to-period comparisons below provide summaries of our revenues and gross profits for our business segments for the three and nine months ended July 31, 2024 and 2023.

Previous wording

*Total revenue.*Total revenues were $107.1 million for the three months ended April 30, 2024 compared to $107.8 million for the three months ended April 30, 2023. Revenue by segment is further discussed below.

Current wording

*Total revenue.*Total revenues were $109.6 million for the three months ended July 31, 2024 compared to $120.7 million for the three months ended July 31, 2023. Revenue by segment is further discussed below.

Previous wording

*U.S. Concrete Pumping.*Revenue for our U.S. Concrete Pumping segment decreased by 4.8%, or $3.8 million, from $78.4 million in the second quarter of fiscal 2023 to $74.6 million for the second quarter of fiscal 2024 primarily attributable to a decrease in volumes driven by (1) a general slowdown in commercial construction work, mostly due to the impact from rising interest rates, (2) oversaturation of concrete pumps in certain markets and (3) higher than normal precipitation throughout the quarter, specifically in the Company's Texas, Arizona, Nevada, California and Colorado markets.

Current wording

*U.S. Concrete Pumping.*Revenue for our U.S. Concrete Pumping segment decreased by 13.9%, or $12.1 million, from $87.3 million in the third quarter of fiscal 2023 to $75.2 million for the third quarter of fiscal 2024 primarily attributable to a decrease in volumes driven by (1) a general slowdown in commercial construction work, mostly due to the price sensitive impact on project starts from high interest rates, (2) oversaturation of concrete pumps in certain markets and (3) higher than normal rainfall in the Company's southeast regions and historically high rainfall in the Company's Texas markets.

Previous wording

*U.K. Operations.*Revenue for our U.K. Operations segment increased by 2.0%, or $0.3 million, from $15.2 million in the second quarter of fiscal 2023 to $15.5 million for the second quarter of fiscal 2024. Excluding the impact from foreign currency translation, revenue was down 1% year-over-year.

Current wording

*U.K. Operations.*Revenue for our U.K. Operations segment decreased by 8.1%, or $1.4 million, from $17.3 million in the third quarter of fiscal 2023 to $15.9 million for the third quarter of fiscal 2024. Excluding the impact from foreign currency translation, revenue was down 9% year-over-year, due to lower volumes caused by a general slowdown in commercial construction work, mostly due to the impact from high interest rates.

Previous wording

*U.S. Concrete Waste Management Services.*Third-party revenue for the U.S. Concrete Waste Management Services segment improved by 19.3%, or $2.7 million, from $14.2 million in the second quarter of fiscal 2023 to $16.9 million for the second quarter of fiscal 2024. The increase in revenue was driven by robust organic growth and pricing improvements.

Current wording

*U.S. Concrete Waste Management Services.*Third-party revenue for the U.S. Concrete Waste Management Services segment improved by 15.3%, or $2.4 million, from $16.1 million in the third quarter of fiscal 2023 to $18.5 million for the third quarter of fiscal 2024. The increase in revenue was driven by robust organic growth and pricing improvements.

Previous wording

*Gross margin.*Our gross margin for the second quarter of fiscal 2024 was 39.0% compared to 40.3% in the second quarter of fiscal 2023. The slight decrease in our gross margin was primarily related to lower revenue in our U.S. Concrete Pumping segment, decreased labor utilization driven by the reduced revenue in our U.S. Concrete Pumping segment and inflationary increases in commercial insurance premium costs. These amounts were partially offset by improved repair and maintenance costs.

Current wording

*Gross margin.*Our gross margin for the third quarter of fiscal 2024 was 40.6% compared to 41.0% in the third quarter of fiscal 2023. The slight decrease in gross margin was primarily related to lower revenue in our U.S. Concrete Pumping segment and an increase in depreciation expense offset by improved labor, fuel and repair and maintenance costs.

Previous wording

*General and administrative expenses ("G&A").*G&A expenses for the second quarter of fiscal 2024 were $29.7 million, a decrease of $0.5 million from $30.2 million in the second quarter of fiscal 2023. G&A expenses as a percent of revenue were 27.7% for the second quarter of fiscal 2024 compared to 28.0% for the same period a year ago. The decrease in G&A expenses was largely due to (1) non-cash decreases in amortization expense of $0.9 million and stock-based compensation of $0.3 million, and (2) higher gain on sales of assets of $0.7 million. These decreases were mostly offset by higher labor costs of approximately $1.1 million as a result of wage inflation in the United States.

Current wording

*General and administrative expenses ("G&A").*G&A expenses for the third quarter of fiscal 2024 were $27.9 million, a decrease of $2.0 million from $29.9 million in the third quarter of fiscal 2023. G&A expenses as a percent of revenue were 25.5% for the third quarter of fiscal 2024 compared to 24.8% for the same period a year ago. The decrease in G&A expenses was largely due to (1) non-cash decreases in amortization expense of $1.0 million and stock-based compensation of $0.3 million, and (2) lower labor costs of approximately $0.8 million.

Previous wording

For the second quarter of fiscal 2024, excluding amortization of intangible assets of $3.9 million, depreciation expense of $0.6 million, and stock-based compensation expense of $0.7 million, G&A expenses were $24.5 million (22.9% of revenue). For the second quarter of fiscal 2023, excluding amortization of intangible assets of $4.9 million, depreciation expense of $0.6 million and stock-based compensation expense of $1.1 million G&A expenses were $23.7 million (22.0% of revenue). This increase of $0.8 million is primarily due to the increases in labor costs, as discussed above.

Current wording

For the third quarter of fiscal 2024, excluding amortization of intangible assets of $3.7 million, depreciation expense of $0.6 million, and stock-based compensation expense of $0.6 million, G&A expenses were $23.0 million (20.9% of revenue). For the third quarter of fiscal 2023, excluding amortization of intangible assets of $4.7 million, depreciation expense of $0.6 million and stock-based compensation expense of $0.9 million G&A expenses were $23.7 million (19.6% of revenue). This decrease of $0.7 million is primarily due to the decreases in labor costs, as discussed above.

Previous wording

*Interest expense and amortization of deferred financing costs.*Interest expense and amortization of deferred financing costs for the second quarter of fiscal 2024 was $6.9 million, down $0.4 million from $7.3 million in the second quarter of fiscal 2023. The decrease was primarily attributable to a lower average ABL revolver draw during the fiscal 2024 second quarter as compared to the same quarter a year ago.

Current wording

*Interest expense and amortization of deferred financing costs.*Interest expense and amortization of deferred financing costs for the third quarter of fiscal 2024 was $6.3 million, down $0.8 million from $7.1 million in the third quarter of fiscal 2023. The decrease was primarily attributable to a lower average ABL revolver draw during the fiscal 2024 third quarter as compared to the same quarter a year ago.

Previous wording

Change in fair value of warrant liabilities. During the three months ended April 30, 2024 the Company did not recognize a gain or loss on the fair value remeasurement of our liability-classified warrants. During the three months ended April 30, 2023 the Company recognized a $1.2 million gain on the fair value measurement of our liability-classified warrants. The decline in the fair value remeasurement of the public warrants is due to the Company's share price trading below the exercise price as the warrants were closer to expiring in December 2023. On December 6, 2023, we announced the expiration of the Company's 13,017,677 warrants, as such they are no longer recognized as a liability on the condensed consolidated balance sheet as of April 30, 2024.

Current wording

Change in fair value of warrant liabilities. During the three months ended July 31, 2024 the Company did not recognize any warrant fair value remeasurement as no warrants were outstanding during the period. During the three months ended July 31, 2023 the Company recognized a $0.9 million gain on the fair value measurement of our liability-classified warrants. On December 6, 2023, we announced the expiration of the Company's 13,017,677 warrants, as such they are no longer recognized as a liability on the condensed consolidated balance sheet as of July 31, 2024.

Previous wording

*Income tax expense.*For the second fiscal quarter ended April 30, 2024 the Company recorded income tax expense of $2.2 million on pretax income of $5.2 million. For the same quarter a year ago, the Company recorded an income tax expense of $1.5 million on pretax income of $7.1 million. The comparability of effective tax rates between both periods was primarily impacted by (1) excess tax deficiencies from share-based compensation in the three months ended April 30, 2024 and (2) the warrants fair value activity in the three months ended April 30, 2023, as it is not recognized for tax purposes.

Current wording

*Income tax expense.*For the three months ended July 31, 2024 and 2023, the Company’s effective tax rate was 29.0% and 24.3%, respectively. The comparability of effective tax rates between both periods was primarily impacted by (1) increases in the UK corporate income tax rate to 25% and (2) the warrants fair value activity in the three months ended July 31, 2023, as it is not recognized for tax purposes.

Previous wording

The tables included in the period-to-period comparisons below provide summaries of our revenue and gross profit for our business segments for the six months ended April 30, 2024 and 2023.

Current wording

The tables included in the period-to-period comparisons below provide summaries of our revenue and gross profit for our business segments for the nine months ended July 31, 2024 and 2023.

Previous wording

*Total revenue.*Total revenues were $204.8 million for the six months ended April 30, 2024 compared to $201.4 million for the six months ended April 30, 2023. Revenue by segment is further discussed below.

Current wording

*Total revenue.*Total revenues were $314.4 million for the nine months ended July 31, 2024 compared to $322.0 million for the nine months ended July 31, 2023. Revenue by segment is further discussed below.

Previous wording

*U.S. Concrete Pumping.*Revenue for our U.S. Concrete Pumping segment decreased by 2.9%, or $4.3 million, from $145.6 million for the six months ended April 30, 2023 to $141.3 million for the six months ended April 30, 2024 primarily attributable to (1) a general slowdown in commercial construction work, mostly due to the impact from rising interest rates, (2) oversaturation of concrete pumps in certain markets, and (3) higher than normal precipitation for the six months ended April 30, 2024.

Current wording

*U.S. Concrete Pumping.*Revenue for our U.S. Concrete Pumping segment decreased by 7.0%, or $16.4 million, from $232.9 million for the nine months ended July 31, 2023 to $216.5 million for the nine months ended July 31, 2024 primarily attributable to (1) a general slowdown in commercial construction work, mostly due to the impact from high interest rates, (2) oversaturation of concrete pumps in certain markets, and (3) much higher than normal rainfall in the Company's Texas markets for the nine months ended July 31, 2024.

Previous wording

*U.K. Operations.*Revenue for our U.K. Operations segment increased by 10.8%, or $3.0 million, from $27.9 million for the six months ended April 30, 2023 to $30.9 million for the six months ended April 30, 2024. Excluding the impact from foreign currency translation, revenue was up 6.6% year-over-year. The increase in revenue was primarily attributable to pricing improvements.

Current wording

*U.K. Operations.*Revenue for our U.K. Operations segment increased by 3.6%, or $1.6 million, from $45.2 million for the nine months ended July 31, 2023 to $46.8 million for the nine months ended July 31, 2024. Excluding the impact from foreign currency translation, revenue was up 1% year-over-year. The increase in revenue was primarily attributable to pricing improvements that more than offset the volume declines as a result of continued delays on project start dates and awards.

Previous wording

*U.S. Concrete Waste Management Services.*Third-party revenue for the U.S. Concrete Waste Management Services segment increased by 16.8%, or $4.7 million, from $27.8 million for the six months ended April 30, 2023 to $32.5 million for the six months ended April 30, 2024. The increase in revenue was driven by robust organic growth and pricing improvements against a backdrop of adverse weather.

Current wording

*U.S. Concrete Waste Management Services.*Third-party revenue for the U.S. Concrete Waste Management Services segment increased by 16.2%, or $7.2 million, from $43.9 million for the nine months ended July 31, 2023 to $51.1 million for the nine months ended July 31, 2024. The increase in revenue was driven by robust organic growth and pricing improvements despite higher than normal rainfall.

Previous wording

*Gross margin.*Our gross margin for the six months ended April 30, 2024 was 36.7% compared to 39.7% in the six months ended April 30, 2023. The decrease in our gross margin was primarily related to lower revenue in our U.S. Concrete Pumping segment, decreased labor utilization driven by the reduced revenue in our U.S. Concrete Pumping segment and inflationary increases in commercial insurance premium costs. These amounts were partially offset by improved fuel expense and lower repair and maintenance costs.

Current wording

*Gross margin.*Our gross margin for the nine months ended July 31, 2024 was 38.0% compared to 40.2% in the nine months ended July 31, 2023. The decrease in our gross margin was primarily related to lower revenue in our U.S. Concrete Pumping segment, decreased labor efficiencies driven by the reduced revenue in our U.S. Concrete Pumping segment and inflationary increases in commercial insurance premium costs. These amounts were partially offset by improved fuel expense and lower repair and maintenance costs.

Previous wording

*General and administrative expenses ("G&A").*G&A expenses for the six months ended April 30, 2024 were $61.6 million, an increase of $4.3 million from $57.3 million for the six months ended April 30, 2023. G&A expenses as a percent of revenue were 30.1% for the six months ended April 30, 2024 compared to 28.4% for the same period a year ago. The increase in G&A expenses was largely due to (1) a non-recurring charge of $3.5 million in the first quarter of 2024 as a result of a recent adverse court ruling related to sales tax in Washington State, as further described in Note 13 in Part I, Item 1 of this report for more information, and (2) higher labor and health insurance costs of approximately $3.6 million as a result of wage inflation coupled with limited headcount growth. These increases were partially offset by non-cash decreases in amortization expense of $1.9 million and stock-based compensation expense of $0.9 million.

Current wording

*General and administrative expenses ("G&A").*G&A expenses for the nine months ended July 31, 2024 were $89.5 million, an increase of $2.3 million from $87.2 million for the nine months ended July 31, 2023. G&A expenses as a percent of revenue were 28.5% for the nine months ended July 31, 2024 compared to 27.1% for the same period a year ago. The increase in G&A expenses was largely due to (1) a non-recurring charge of $3.5 million in the first quarter of 2024 as a result of a recent adverse court ruling related to sales tax in Washington State, as further described in Note 13 in Part I, Item 1 of this report, and (2) higher labor and health insurance costs of approximately $2.7 million as a result of wage inflation. These increases were partially offset by non-cash decreases in amortization expense of $2.8 million and stock-based compensation expense of $1.2 million.

Previous wording

For the six months ended April 30, 2024, excluding amortization of intangible assets of $7.8 million, depreciation expense of $1.1 million, stock-based compensation expense of $1.3 million and the non-recurring $3.5 million sales tax litigation-related charge, G&A expenses were $47.9 million (23.4% of revenue). For the six months ended April 30, 2023, excluding amortization of intangible assets of $9.6 million, depreciation expense of $1.2 million and stock-based compensation expense of $2.2 million, G&A expenses were $44.3 million (22.0% of revenue). The increase of $3.6 million was primarily due to the higher labor and increased health insurance costs as discussed above.

Current wording

For the nine months ended July 31, 2024, excluding amortization of intangible assets of $11.5 million, depreciation expense of $1.7 million, stock-based compensation expense of $1.9 million and non-recurring charges of $4.1 million which include $3.5 million related to the sales tax court ruling, G&A expenses were $70.3 million (22.4% of revenue). For the nine months ended July 31, 2023, excluding amortization of intangible assets of $14.3 million, depreciation expense of $1.8 million and stock-based compensation expense of $3.1 million, G&A expenses were $68.0 million (21.1% of revenue). The increase of $2.3 million was primarily due to the higher labor and increased health insurance costs as discussed above.

Previous wording

*Interest expense and amortization of deferred financing costs.*Interest expense and amortization of deferred financing costs for the six months ended April 30, 2024 was $13.3 million, down $0.9 million from $14.2 million for the six months ended April 30, 2023. The decrease was primarily attributable to a lower average ABL revolver draw during the first and second quarter of fiscal 2024 as compared to the same quarters a year ago.

Current wording

*Interest expense and amortization of deferred financing costs.*Interest expense and amortization of deferred financing costs for the nine months ended July 31, 2024 was $19.7 million, down $1.6 million from $21.3 million for the nine months ended July 31, 2023. The decrease was primarily attributable to a lower average ABL revolver draw during the first, second and third quarters of fiscal 2024 as compared to the same quarters a year ago.

Previous wording

Change in fair value of warrant liabilities. During the six months ended April 30, 2024, the Company recognized a $0.1 million gain on the fair value remeasurement of our liability-classified warrants. During the six months ended April 30, 2023 the Company recognized a $5.7 million gain on the fair value measurement of our liability-classified warrants. The decline in the fair value remeasurement of the public warrants is due to the Company's share price trading below the exercise price as the warrants were closer to expiring in December 2023. On December 6, 2023, we announced the expiration of the Company's 13,017,677 warrants. As such they were no longer recognized as a liability on the condensed consolidated balance sheet as of April 30, 2024.

Current wording

Change in fair value of warrant liabilities. During the nine months ended July 31, 2024, the Company recognized a $0.1 million gain on the fair value remeasurement of our liability-classified warrants. During the nine months ended July 31, 2023 the Company recognized a $6.6 million gain on the fair value measurement of our liability-classified warrants. The decline in the fair value remeasurement of the public warrants is due to the Company's share price trading below the exercise price as the warrants were closer to expiring in December 2023. On December 6, 2023, we announced the expiration of the Company's 13,017,677 warrants. As such they were no longer recognized as a liability on the condensed consolidated balance sheet as of July 31, 2024.

Previous wording

*Income tax expense.*For the six months ended April 30, 2024, the Company recorded income tax expense of $1.2 million on pretax income of $0.4 million. For the same period a year ago, the Company recorded income tax expense of $2.1 million on pretax income of $14.2 million. The comparability of effective tax rates between both periods was primarily impacted by (1) excess tax deficiencies from share-based compensation in the six months ended April 30, 2024 and (2) the warrants fair value activity in the six months ended April 30, 2023, as it is not recognized for tax purposes.

Current wording

*Income tax expense.*For the nine months ended July 31, 2024 and 2023, the Company’s effective tax rate was 38.5% and 19.5%, respectively. The comparability of effective tax rates between both periods was primarily impacted by (1) higher excess tax deficiencies from share-based compensation exercise and vesting activity in the nine months ended July 31, 2024, (2) the warrants fair value activity in the nine months ended July 31, 2023, as it is not recognized for tax purposes, (3) increases in the UK corporate income tax rate to 25% and (4) the expiration of the capital allowances super deduction in the UK in fiscal 2024.

Previous wording

During the first quarter of fiscal year 2024, the Company moved certain assets and associated revenues and expenses, which were previously categorized in the Company's Other activities, into the U.S. Concrete Pumping segment in order to better align its placement with the manner in which the Company allocates its resources and measures performance. As a result, segment results for prior periods have been reclassified to conform to the current period presentation. For further discussion, see Note 18 in Part I, Item 1 of this report for more information. In addition, in order to appropriately distribute the use of corporate resources and better align measures with segment performance, beginning in the first quarter of fiscal year 2024, the Company is no longer adding back intercompany allocations to segment Adjusted EBITDA. The Company recast segment results for the three and six months ended April 30, 2023 are below:

Current wording

During the first quarter of fiscal year 2024, the Company moved certain assets and associated revenues and expenses, which were previously categorized in the Company's Other activities, into the U.S. Concrete Pumping segment in order to better align its placement with the manner in which the Company allocates its resources and measures performance. As a result, segment results for prior periods have been reclassified to conform to the current period presentation. For further discussion, see Note 18 in Part I, Item 1 of this report for more information. In addition, in order to appropriately distribute the use of corporate resources and better align measures with segment performance, beginning in the first quarter of fiscal year 2024, the Company is no longer adding back intercompany allocations to segment Adjusted EBITDA. Refer to Non-GAAP Measures below for details on adjustments. The Company recast segment results for the three and nine months ended July 31, 2023 are below:

Previous wording

Net loss for our U.S. Concrete Pumping segment was $7.8 million for the six months ended April 30, 2024, versus net loss of $0.0 million for the six months ended April 30, 2023. Adjusted EBITDA for our U.S. Concrete Pumping segment was $27.9 million for the six months ended April 30, 2024, down 22.6% from $36.1 million for the same period in fiscal 2023.

Current wording

Net loss for our U.S. Concrete Pumping segment was $4.3 million for the nine months ended July 31, 2024, versus net income of $3.8 million for the nine months ended July 31, 2023. Adjusted EBITDA for our U.S. Concrete Pumping segment was $48.0 million for the nine months ended July 31, 2024, down $10.8 million from $58.8 million for the same period in fiscal 2023. The decrease in net income and Adjusted EBITDA were primarily attributable to lower revenue volumes, decreased labor efficiencies driven by the reduced revenue, and inflationary increases in commercial insurance.

Previous wording

U.K. Operations. Net income for our U.K. Operations segment was $1.0 million for the second quarter of fiscal 2024, versus net income of $0.9 million for the second quarter of fiscal 2023. Adjusted EBITDA for our U.K. Operations segment was $4.1 million for the second quarter of fiscal 2024, up 8.2% from $3.8 million from the same period in fiscal 2023. The increases were primarily attributable to the year-over-year improvement in revenue and reductions in fuel and repair costs.

Current wording

U.K. Operations. Net income for our U.K. Operations segment was $0.9 million for the third quarter of fiscal 2024, versus net income of $1.6 million for the third quarter of fiscal 2023. Adjusted EBITDA for our U.K. Operations segment was $4.2 million for the third quarter of fiscal 2024, down $0.6 million from $4.8 million from the same period in fiscal 2023. The decrease in net income was primarily attributable to lower volumes caused by a general slowdown in commercial construction work, mostly due to the impact from high interest rates and non-recurring charges of $0.3 million that were partially offset by reductions in repair costs. Apart from the non-recuring charges, the change in adjusted EBITDA was impacted by the same items.

Previous wording

Net income for our U.K. Operations segment was $1.5 million for the six months ended April 30, 2024, versus net income of $0.8 million for the six months ended April 30, 2023. Adjusted EBITDA for our U.K. Operations segment was $7.3 million for the six months ended April 30, 2024, up 17.7% from $6.2 million for the six months ended April 30, 2023. The increases were primarily attributable to the year-over-year improvement in revenue, improved labor utilization and reductions in fuel and repair costs.

Current wording

Net income for our U.K. Operations segment was $2.4 million for the nine months ended July 31, 2024, versus net income of $2.4 million for the nine months ended July 31, 2023. Adjusted EBITDA for our U.K. Operations segment was $11.6 million for the nine months ended July 31, 2024, up $0.6 million from $11.0 million for the nine months ended July 31, 2023. The increases were primarily attributable to the year-over-year improvement in revenue and reductions in fuel and repair costs.

Previous wording

Net income for our U.S. Concrete Waste Management Services segment was $5.4 million for the six months ended April 30, 2024, versus net income of $5.5 million for the six months ended April 30, 2023. Adjusted EBITDA for our U.S. Concrete Waste Management Services segment was $11.6 million for the six months ended April 30, 2024, up 0.1% from $11.5 million for the six months ended April 30, 2023. The slight increase in Adjusted EBITDA was primarily driven by the increase in revenue that was mostly offset by adverse weather impacts in the first quarter on labor utilization, coupled with commercial insurance cost inflation and higher corporate allocations.

Current wording

Net income for our U.S. Concrete Waste Management Services segment was $8.5 million for the nine months ended July 31, 2024, versus net income of $9.5 million for the nine months ended July 31, 2023. Adjusted EBITDA for our U.S. Concrete Waste Management Services segment was $18.9 million for the nine months ended July 31, 2024, down $0.1 from $19.0 million for the nine months ended July 31, 2023. The decrease in net income was primarily driven by adverse weather impacts in the first quarter on labor efficiencies, coupled with inflationary increases in commercial insurance and labor costs, higher corporate allocations and slightly higher depreciation, partially offset by an increase in revenue as described above. Apart from the slight increase in depreciation, the change in adjusted EBITDA was impacted by the same items.

Previous wording

*Other.*There was no net income for Other activities for the second quarter of fiscal 2024, compared to a net income of $1.2 million for the second quarter of fiscal 2023. The change in net income is related to the change in warrant liability, as discussed above.

Current wording

*Other.*There was no net income for Other activities for the third quarter of fiscal 2024, compared to a net income of $0.9 million for the third quarter of fiscal 2023. The change in net income is related to the change in warrant liability, as discussed above.

Previous wording

Net income for Other activities was $0.1 million for the six months ended April 30, 2024, compared to a net income of $5.7 million for the six months ended April 30, 2023. The change in net income is related to the change in warrant liability, as discussed above.

Current wording

Net income for Other activities was $0.1 million for the nine months ended July 31, 2024, compared to a net income of $6.6 million for the nine months ended July 31, 2023. The change in net income is related to the change in warrant liability, as discussed above.

Previous wording

Our capital structure is primarily a combination of (1) permanent financing, represented by stockholders’ equity; (2) zero-dividend convertible perpetual preferred stock; (3) long-term financing represented by our Senior Notes (as defined below) and (4) short-term financing under our ABL Facility (as defined below). Our primary sources of liquidity are cash generated from operations, available cash and cash equivalents and access to our revolving credit facility under our ABL Facility (as defined below), which provides for aggregate borrowings of up to $225.0 million, subject to a borrowing base limitation. We use our liquidity and capital resources to: (1) finance working capital requirements; (2) service our indebtedness; (3) purchase property, plant and equipment; and (4) finance strategic acquisitions. As of April 30, 2024, we had $18.0 million of cash and cash equivalents and $198.9 million of available borrowing capacity under the ABL Facility (as defined below), providing total available liquidity of $216.9 million.

Current wording

Our capital structure is primarily a combination of (1) permanent financing, represented by stockholders’ equity; (2) zero-dividend convertible perpetual preferred stock; (3) long-term financing represented by our Senior Notes (as defined below) and (4) short-term financing under our ABL Facility (as defined below). Our primary sources of liquidity are cash generated from operations, available cash and cash equivalents and access to our revolving credit facility under our ABL Facility (as defined below), which provides for aggregate borrowings of up to $225.0 million, subject to a borrowing base limitation. We use our liquidity and capital resources to: (1) finance working capital requirements; (2) service our indebtedness; (3) purchase property, plant and equipment; and (4) finance strategic acquisitions. As of July 31, 2024, we had $26.3 million of cash and cash equivalents and $210.0 million of available borrowing capacity under the ABL Facility (as defined below), providing total available liquidity of $236.3 million.

Previous wording

Our working capital surplus as of April 30, 2024 was $19.5 million. We are in compliance with our debt covenants and believe that we have sufficient working capital to meet our material cash requirements.

Current wording

Our working capital surplus as of July 31, 2024 was $35.9 million. We are in compliance with our debt covenants and believe that we have sufficient working capital to meet our material cash requirements.

Previous wording

The amount of our future capital expenditures will depend on a number of factors including general economic conditions and growth prospects. In response to changing economic conditions, we believe we have the flexibility to modify our capital expenditures by adjusting them (either up or down) to match our actual performance. Our capital expenditures for the six months ended April 30, 2024 and 2023 were approximately $28.8 million and $34.7 million, respectively.

Current wording

The amount of our future capital expenditures will depend on a number of factors including general economic conditions and growth prospects. In response to changing economic conditions, we believe we have the flexibility to modify our capital expenditures by adjusting them (either up or down) to match our actual performance. Our capital expenditures for the nine months ended July 31, 2024 and 2023 were approximately $37.5 million and $43.2 million, respectively. See "Cash Flow" discussion below for more information.

Previous wording

The outstanding balance under the ABL Facility as of April 30, 2024 was $16.4 million and as of that date, the Company was in compliance with all debt covenants. In addition, as of April 30, 2024, the Company had $1.1 million in credit line reserves and a letter of credit balance of $8.5 million. As of April 30, 2024, we had $198.9 million of available borrowing capacity under the ABL Facility. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an asset in deferred financing costs in the accompanying condensed balance sheets. The Company had debt issuance costs related to the revolving credit facilities of $1.6 million as of April 30, 2024. See Note 8 for more information on the Senior Notes and ABL Facility.

Current wording

There was no outstanding balance under the ABL Facility as of July 31, 2024 and as of that date, the Company was in compliance with all debt covenants. In addition, as of July 31, 2024, the Company had $1.1 million in credit line reserves and a letter of credit balance of $13.9 million. As of July 31, 2024, we had $210.0 million of available borrowing capacity under the ABL Facility. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an asset in deferred financing costs in the accompanying condensed balance sheets. The Company had debt issuance costs related to the revolving credit facilities of $1.5 million as of July 31, 2024. See Note 8 of Part I, Item I in this document for more information on the Senior Notes and ABL Facility.

Previous wording

Net cash provided by operating activities during the six months ended April 30, 2024 was $29.4 million. The Company had a net loss of $0.8 million, which included net non-cash expense items of $30.8 million. In addition, we had cash outflows related to an increase in our working capital of $0.6 million. Cash outflows related to working capital activity include a decrease in other operating liabilities of $3.8 million, an increase in other operating assets of $2.4 million, and a decrease of $1.2 million in accounts payable. These were offset by a decrease in receivables of $6.3 million and a decrease in inventory of $0.6 million. The decrease in operating liabilities is due to payments on operating leases of $2.6 million and a decrease in sales and use tax. The increase to other operating assets is primarily due to timing of prepaid insurance. The decrease in accounts payable is driven by the timing of vendor payments. The decrease in receivables is due to seasonal collection of receivables and decrease in sales volumes during the six months ended April 30, 2024.

Current wording

Net cash provided by operating activities during the nine months ended July 31, 2024 was $64.5 million. The Company had net income of $6.8 million, which included net non-cash expense items of $50.3 million. In addition, we had cash inflows related to a decrease in our working capital of $7.4 million. Cash inflows related to working capital activity include a decrease in receivables of $7.2 million, an increase in other operating liabilities of $2.1 million and a decrease in inventory of $0.3 million. These were offset by a decrease of $1.7 million in accounts payable and an increase in other operating assets of $0.6 million. The decrease in receivables is due to decreases in sales volumes during the nine months ended July 31, 2024. The decrease in accounts payable is driven by a change in timing.

Previous wording

Net cash provided by operating activities during the six months ended April 30, 2023 was $31.1 million. The Company had net income of $12.1 million, which included net non-cash expense items of $28.2 million. In addition, we had cash outflows related to an increase in our working capital of $9.2 million. Cash outflows related to working capital activity primarily include a decrease in other operating liabilities of $5.1 million, an increase in other operating assets of $3.2 million, a decrease of $1.1 million to accounts payable and an increase in inventory of $0.7 million. These were offset by a decrease in trade receivables of $0.9 million. The decrease in other operating liabilities is primarily related to payments on operating leases of $3.1 million and a decrease in accrued insurance. The increase to other operating assets is primarily due to timing of prepaid insurance, which is generally prepaid during first quarter of a fiscal year. The decrease in accounts payable is driven by timing.

Current wording

Net cash provided by operating activities during the nine months ended July 31, 2023 was $66.2 million. The Company had net income of $22.4 million, which included non-cash expense items of $46.5 million. In addition, we had cash outflows related to an increase in our working capital of $2.6 million. Cash outflows related to working capital activity include an increase in other operating liabilities of $4.5 million, an increase in trade receivables of $3.2 million, a decrease of $2.1 million to accounts payable, an increase in inventory of $1.0 million and an increase in other operating assets of $0.9 million. The increase in other operating liabilities is primarily related to timing of the payment of accrued interest. The Company makes semi-annual interest payments in February and August each year. The increase in trade receivables is due to stronger revenue growth. The decrease in accounts payable is driven by a change in timing.

Previous wording

We used $23.6 million to fund investing activities during the six months ended April 30, 2024. The Company used $28.8 million for the purchase of property, plant and equipment, which was partially offset by $5.2 million in proceeds from the sale of property, plant and equipment.

Current wording

We used $30.0 million to fund investing activities during the nine months ended July 31, 2024. The Company used $37.5 million for the purchase of property, plant and equipment, which was partially offset by $7.5 million in proceeds from the sale of property, plant and equipment.

Previous wording

We used $31.1 million to fund investing activities during the six months ended April 30, 2023. The Company used $34.7 million for the purchase of property, plant and equipment and $0.8 million for the purchase of intangible assets, which was partially offset by $4.4 million in proceeds from the sale of property, plant and equipment.

Current wording

We used $35.9 million to fund investing activities during the nine months ended July 31, 2023. The Company used $43.2 million for the purchase of property, plant and equipment and $0.8 million for the purchase of intangible assets, which was partially offset by $8.0 million in proceeds from the sale of property, plant and equipment.

Previous wording

Net cash used in financing activities was $1.1 million for the six months ended April 30, 2023. Financing activities during this period included $8.3 million in purchase of treasury stock, which included $7.2 million purchased under the share repurchase program and $1.1 million in outflows from the purchase of shares into treasury stock in order to fund the employee tax obligations for certain vested stock awards. In addition, cash used in financing activities included $7.3 million in net proceeds under the Company's ABL Facility.

Current wording

Net cash used in financing activities was $24.8 million for the nine months ended July 31, 2024. Cash used in financing activities included $19.0 million in net payments under the Company's ABL Facility and $7.2 million in purchase of treasury stock, which included $4.0 million purchased under the share repurchase program and $3.2 million in outflows from the purchase of shares into treasury stock in order to fund the employee tax obligations for certain stock award vesting and stock option exercise activities.

Previous wording

Net cash used in financing activities was $4.1 million for the six months ended April 30, 2024. Cash used in financing activities included $2.5 million in net payments under the Company's ABL Facility and $3.0 million in purchase of treasury stock, which included $1.5 million purchased under the share repurchase program and $1.5 million in outflows from the purchase of shares into treasury stock in order to fund the employee tax obligations for certain vested stock awards.

Current wording

Net cash used in financing activities was $26.7 million for the nine months ended July 31, 2023. Cash used in financing activities included $16.4 million in net proceeds under the Company's ABL Facility and $9.7 million in purchase of treasury stock, which included $8.6 million purchased under the share repurchase program and $1.1 million in outflows from the purchase of shares into treasury stock in order to fund the employee tax obligations for certain vested stock awards.