Concrete Pumping Holdings, Inc.

Previous wording

Certain statements in this Quarterly Report on Form 10-Q ("Report") constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. These forward-looking statements may be identified by terminology such as "likely," "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or "views" or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained in this Report are reasonable, we cannot guarantee future results.

Current wording

Certain statements in this Quarterly Report on Form 10-Q ("Report") constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. These forward-looking statements may be identified by terminology such as "likely," "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue" or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained in this Report are reasonable, we cannot guarantee future results.

Previous wording

As part of the Company’s business growth and capital allocation strategy, the Company views strategic acquisitions as opportunities to enhance our value proposition through differentiation and competitiveness. Depending on the deal size and characteristics of the M&A opportunities available, we expect to allocate capital for opportunistic M&A utilizing cash on the balance sheet and the Company's revolving line of credit. In recent years, we have successfully executed on this strategy.

Current wording

As part of the Company’s business growth and capital allocation strategy, the Company views strategic acquisitions as opportunities to enhance our value proposition through differentiation and competitiveness. Depending on the deal size and characteristics of the M&A opportunities available, we expect to allocate capital for opportunistic M&A utilizing cash on the balance sheet and the Company's revolving line of credit.

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 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 90 branch locations across 22 states with their corporate headquarters in Thornton, Colorado.

Previous wording

Our U.K. Operations segment consists of our Camfaud, Premier and U.K. based Eco-Pan businesses. Camfaud is a concrete pumping service provider in the U.K. Our U.K. core business is primarily the provision of concrete pumping services to general contractors and concrete finishing companies in the commercial, infrastructure and residential sectors. Equipment generally returns to a "home base" nightly and does not contract to purchase, mix, or deliver concrete. Camfaud has approximately 30 branch locations throughout the U.K., with its corporate headquarters in Epping (near London), England. In addition, we have concrete waste management operations under our Eco-Pan brand name in the U.K. and currently operate from a shared Camfaud location.

Current wording

Our U.K. Operations segment consists of our Camfaud, Premier and U.K. based Eco-Pan businesses. Camfaud is a concrete pumping service provider in the U.K. Our U.K. core business is primarily the provision of concrete pumping services to general contractors and concrete finishing companies in the commercial, infrastructure and residential sectors. Equipment generally returns to a "home base" nightly and does not contract to purchase, mix, or deliver concrete. Camfaud has approximately 35 branch locations throughout the U.K., with its corporate headquarters in Epping (near London), England. In addition, we have concrete waste management operations under our Eco-Pan brand name in the U.K. and currently operate from a shared Camfaud location.

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 nine months ended July 31, 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 months ended January 31, 2025 and 2024.

Previous 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.

Current wording

*Total revenue.*Total revenues were $86.4 million for the three months ended January 31, 2025 compared to $97.7 million for the three months ended January 31, 2024. Revenue by segment is further discussed below.

Previous 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.

Current wording

*U.S. Concrete Pumping.*Revenue for our U.S. Concrete Pumping segment decreased by 14.6%, or $9.8 million, from $66.7 million in the first quarter of fiscal 2024 to $56.9 million for the first quarter of fiscal 2025 primarily attributable to a decrease in volumes driven by (1) higher than normal rainfall and much colder than average temperatures in the Company's central, mountain and southeastern regions throughout the quarter and (2) a continued general slowdown in commercial construction work, mostly due to tighter-than-expected monetary policy.

Previous 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.

Current wording

*U.S. Concrete Waste Management Services.*Revenue for the U.S. Concrete Waste Management Services segment improved by 6.9%, or $1.1 million, from $15.6 million in the first quarter of fiscal 2024 to $ 16.7 million for the first quarter of fiscal 2025. The increase in revenue was driven by organic growth and pricing improvements.

Previous 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.

Current wording

*U.K. Operations.*Revenue for our U.K. Operations segment decreased by 16.7%, or $2.6 million, from $15.4 million in the first quarter of fiscal 2024 to $12.8 million for the first quarter of fiscal 2025. Excluding the impact from foreign currency translation, revenue was down 16.5% year-over-year, due to lower volumes caused by a general slowdown in commercial construction work.

Previous 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.

Current wording

*Gross margin.*Our gross margin for the first quarter of fiscal 2025 was 36.1% compared to 34.1% in the first quarter of fiscal 2024. The improvement in gross margin was primarily related to improvements in fuel and commercial insurance costs.

Previous 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.

Current wording

*General and administrative expenses ("G&A").*G&A expenses for the first quarter of fiscal 2025 were $27.8 million, a decrease of $4.1 million from $31.9 million in the first quarter of fiscal 2024. G&A expenses as a percent of revenue were 32.2% for the first quarter of fiscal 2025 compared to 32.7% for the same period a year ago. The decrease in G&A expenses was largely due to (1) the non-recurring $3.5 million sales tax litigation-related charge in the first quarter of 2024, (2) non-cash decreases in amortization expense of $0.9 million, and (3) lower labor costs of approximately $0.8 million, that were partially offset by a decrease in currency gain of $0.7 million and higher professional fees of $0.6 million.

Previous 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.

Current wording

For the first quarter of fiscal 2025, excluding amortization of intangible assets of $3.0 million, depreciation expense of $0.5 million, and stock-based compensation expense of $0.4 million, G&A expenses were $23.9 million (27.7% of revenue). For the first quarter of fiscal 2024, excluding amortization of intangible assets of $3.9 million, depreciation expense of $0.6 million, stock-based compensation expense of $0.5 million, the non-recurring $3.5 million sales tax litigation-related charge and currency gain of $0.7 million, G&A expenses were $24.1 million (24.7% of revenue).

Previous 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.

Current wording

*Interest expense and amortization of deferred financing costs, net of interest income.*Interest expense and amortization of deferred financing costs, net of interest income for the first quarter of fiscal 2025 was $5.8 million, down $0.7 million from $6.5 million in the first quarter of fiscal 2024. The decrease was primarily attributable to a lower average ABL revolver draw during the fiscal 2025 first quarter as compared to the same quarter a year ago.

Previous 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.

Current wording

*Income tax benefit.*For the three months ended January 31, 2025 and 2024, the Company’s effective tax rate was 28.2% and 20.9%, respectively. The comparability of effective tax rates between both periods was primarily impacted by excess tax deficiencies from share-based compensation in 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. 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:

Current wording

During the first quarter of fiscal year 2025, the Company updated its methodology in which the Company allocates its corporate costs to better align with the manner in which the Company now allocates resources and measures performance. As a result, segment results for prior periods have been reclassified to conform to the current period presentation.

Previous wording

*U.S. Concrete Waste Management Services.*Net income for our U.S. Concrete Waste Management Services segment was $3.1 million for the third quarter of fiscal 2024, versus net income of $4.0 million for the third quarter of fiscal 2023. Adjusted EBITDA for our U.S. Concrete Waste Management Services segment was $7.3 million for the third quarter of fiscal 2024, down $0.2 million from $7.5 million for the same period in fiscal 2023. The decrease in net income was attributable to the inflationary increases in labor, higher corporate allocations and slightly higher depreciation, partially offset by the increase in revenue as described above. Apart from the slight increase in depreciation, the change in adjusted EBITDA was impacted by the same items.

Current wording

*U.S. Concrete Waste Management Services.*Net income for our U.S. Concrete Waste Management Services segment was $0.2 million for the first quarter of fiscal 2025 compared to a net loss of $1.2 million for the first quarter of fiscal 2024. Adjusted EBITDA for our U.S. Concrete Waste Management Services segment was $5.0 million for the first quarter of fiscal 2025, up $0.5 million from $4.5 million for the same period in fiscal 2024. The increase in net income was attributable to the increase in revenue as described above, lower non-recurring allocations of $0.8 million and lower tax expense of $0.8 million and the loss on extinguishment of debt of $0.5 million and an increase in depreciation expense $0.4 million. The increase in adjusted EBITDA was primarily attributable to the improved year-over-year revenue.

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 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.

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 $350.0 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 (4) finance strategic acquisitions; (5) repurchase shares and (6) pay dividends to our stockholders, as discussed further below. As of January 31, 2025, we had $85.1 million of cash and cash equivalents and $324.5 million of available borrowing capacity under the ABL Facility (as defined below), providing total available liquidity of $409.6 million.

Previous wording

We believe our existing cash and cash equivalent balances, cash flow from operations and borrowing capacity under our ABL Facility will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, potential acquisitions and overall economic conditions. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity could result in dilution to our stockholders and the incurrence of additional debt could restrict our operations.

Current wording

We believe our existing cash and cash equivalent balances, cash flow from operations and borrowing capacity under our ABL Facility will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, potential acquisitions and overall economic conditions. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity could result in dilution to our stockholders while the incurrence of additional debt could restrict our operations.

Previous wording

Our principal uses of cash historically have been to fund operating activities and working capital, purchases of property and equipment, strategic acquisitions, fund payments due under facility operating and finance leases, share repurchases and to meet debt service requirements.

Current wording

Our principal uses of cash historically have been to fund operating activities and working capital, purchases of property and equipment, strategic acquisitions, fund payments due under facility operating and finance leases, share repurchases, payment of dividends and to meet debt service requirements.

Previous 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.

Current wording

Our working capital surplus as of January 31, 2025 was $47.7 million. We are in compliance with our debt covenants and believe that we have sufficient working capital to meet our material cash requirements for the foreseeable future.

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 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.

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 and business needs. Our gross capital expenditures for the three months ended January 31, 2025 and 2024 were approximately $5.8 million and $17.8 million, respectively. See "Cash Flow" discussion below for more information.

Previous wording

On January 28, 2021, Brundage-Bone Concrete Pumping Holdings Inc., a Delaware corporation (the "Issuer") and a wholly-owned subsidiary of the Company (i) completed a private offering of $375.0 million in aggregate principal amount of its 6.000% senior secured second lien notes due 2026 (the "Senior Notes") issued pursuant to an indenture, among the Issuer, the Company, the other Guarantors (as defined below), Deutsche Bank Trust Company Americas, as trustee and as collateral agent (the "Indenture") and (ii) entered into an amended and restated ABL Facility (as subsequently amended, the "ABL Facility") by and among the Company, certain subsidiaries of the Company, Wells Fargo Bank, National Association, as agent, sole lead arranger and sole bookrunner, the other lenders party thereto, which originally provided up to $125.0 million of asset-based revolving loan commitments to the Company and the other borrowers under the ABL Facility. The Senior Notes are jointly and severally guaranteed on a senior secured basis by the Company, Concrete Pumping Intermediate Acquisition Corp. and each of the Issuer’s domestic, wholly-owned subsidiaries that is a borrower or a guarantor under the ABL Facility (collectively, the "Guarantors").

Current wording

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

Previous wording

On June 1, 2023, the ABL Facility was amended to, among other changes, (1) increase the maximum revolver borrowings available to be drawn thereunder to $225.0 million, (2) increase the letter of credit sublimit to $22.5 million and (3) extend the maturity of the ABL Facility to the earlier of (a) June 1, 2028 or (b) the date that is 180 days prior to (i) the final stated maturity date of the Senior Notes or (ii) the date the Senior Notes become due and payable. The ABL Facility also provides for an uncommitted accordion feature under which the borrowers under the ABL Facility can, subject to specified conditions, increase the ABL Facility by up to an additional $75.0 million. The amended ABL Facility was treated as a debt modification. The Company capitalized an additional $0.5 million of debt issuance costs related to the June 1, 2023, ABL Facility amendment. The preexisting unamortized deferred costs of $1.4 million and the additional costs of $0.5 million will be amortized from June 1, 2023 through June 1, 2028.

Current wording

On September 6, 2024, the ABL Facility was amended to, among other changes, (1) increase the maximum revolver borrowings available to be drawn thereunder from $225.0 million to $350.0 million, (2) increase the letter of credit sublimit from $22.5 million to $32.5 million and (3) extend the maturity of the ABL Facility to the earlier of (a) September 6, 2029 or (b) the date that is 180 days prior to (i) the final stated maturity date of the Senior Notes or (ii) the date the Senior Notes become due and payable. The ABL Facility also provides for an uncommitted accordion feature under which the borrowers under the ABL Facility can, subject to specified conditions, increase the ABL Facility by up to an additional $25.0 million. Of the $125.0 million in incremental commitments, $75.0 million was provided by Bank of America, N.A. and $50.0 million was provided by PNC Bank, N.A. The amended ABL Facility was treated as a debt modification. The Company capitalized an additional $1.2 million of debt issuance costs related to the September 6, 2024, ABL Facility amendment. The preexisting unamortized deferred costs of $1.4 million and the additional costs of $1.2 million will be amortized from September 6, 2024 through September 6, 2029.

Previous 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.

Current wording

There was no outstanding balance under the ABL Facility as of January 31, 2025 and as of that date, the Company was in compliance with all debt covenants. In addition, as of January 31, 2025, the Company had $1.1 million in credit line reserves and a letter of credit balance of $13.9 million. As of January 31, 2025, we had $324.5 million of available borrowing capacity under the ABL Facility. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an asset in deferred financing costs in the accompanying condensed balance sheets. The Company had debt issuance costs related to the revolving credit facilities of $2.4 million as of January 31, 2025.

Previous 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.

Current wording

Net cash provided by operating activities during the three months ended January 31, 2025 was $6.0 million. The Company had a net loss of $2.6 million, which included net non-cash expense items of $14.7 million. In addition, we had cash inflows related to a decrease in our working capital of $6.0 million. Cash inflows related to working capital activity include a decrease to other operating liabilities of $14.1 million, a decrease to accounts payable of $3.3 million, an increase in other operating assets of $1.4 million and an increase in inventory of $0.3 million, partially offset by a decrease to receivables of $13.2 million. The decrease in other operating liabilities is mainly due to a change in timing of payment of our 2026 Notes due to the refinancing activity previously discussed. The decrease in accounts payable is driven by a slowdown in business activity and the general timing of invoices. The decrease in receivables is due to decreases in sales volumes during the three months ended January 31, 2025.

Previous 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.

Current wording

Net cash provided by operating activities during the three months ended January 31, 2024 was $20.3 million. The Company had a net loss of $3.8 million, which included non-cash expense items of $13.4 million. In addition, we had cash outflows related to an increase to our working capital of $10.7 million. Working capital changes primarily include a decrease in receivables of $13.9 million, a decrease in inventory of $0.6 million, a decrease of $3.9 million in accounts payable, an increase in other operating assets of $0.6 million and a decrease in other operating liabilities of $0.6 million. The decrease in receivables is due to seasonal collection of receivables during the first quarter of fiscal year 2024. The decrease in accounts payable is driven by the timing of vendor payments. The increase in other assets is primarily due to the increase in sales tax receivable.

Previous 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.

Current wording

We used $3.9 million to fund investing activities during the three months ended January 31, 2025. The Company used $5.8 million for the purchase of property, plant and equipment, which was partially offset by $1.9 million in proceeds from the sale of property, plant and equipment.

Previous 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.

Current wording

We used $16.5 million to fund investing activities during the three months ended January 31, 2024. The Company used $17.8 million for the purchase of property, plant and equipment, which was partially offset by $1.3 million in proceeds from the sale of property, plant and equipment.

Previous 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.

Current wording

Net cash provided by financing activities was $40.0 million for the three months ended January 31, 2025. Cash provided by financing activities included $425.0 million in proceeds from the issuance of the 2032 Notes, $375.0 million in payments for the extinguishment of the 2026 Notes, $7.3 million in debt issuance costs paid related to the 2032 Notes and $2.6 million in purchase of treasury stock, which included $1.9 million purchased under the share repurchase program and $0.7 million 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 $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.

Current wording

Net cash used in financing activities was $5.6 million for the three months ended January 31, 2024. Cash used in financing activities included $5.9 million in net payments under the Company's ABL Facility and $1.1 million in purchase of treasury stock, which included $0.2 million purchased under the share repurchase program and $0.9 million from the purchase of shares into treasury stock in order to fund the employee tax obligations for certain vested stock awards.

Previous wording

We calculate EBITDA by taking GAAP net income and adding back interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is calculated by taking EBITDA and adding back loss on debt extinguishment, stock-based compensation, changes in the fair value of warrant liabilities, other income, net, goodwill and intangibles impairment and other adjustments. Other adjustments include non-recurring expenses, non-cash currency gains/losses, transaction expenses and interest income. Transaction expenses represent expenses for legal, accounting, and other professionals that were engaged in the completion of various acquisitions. Transaction expenses can be volatile as they are primarily driven by the size of a specific acquisition. As such, we exclude these amounts from Adjusted EBITDA for comparability across periods.

Current wording

We calculate EBITDA by taking GAAP net income and adding back interest expense and amortization of deferred financing costs, net of interest income, income taxes, depreciation and amortization. Adjusted EBITDA is calculated by taking EBITDA and adding back loss on debt extinguishment, stock-based compensation, changes in the fair value of warrant liabilities, other income, net, goodwill and intangibles impairment and other adjustments. Other adjustments include non-recurring expenses, non-cash currency gains/losses, transaction expenses and other items not necessarily indicative of our underlying operating performance. Transaction expenses represent expenses for legal, accounting, and other professionals that were engaged in the completion of acquisitions. Transaction expenses can be volatile as they are primarily driven by the size of a specific acquisition. As such, we exclude these amounts from Adjusted EBITDA for comparability across periods.

Previous wording

1 Other adjustments include the adjustment for non-recurring expenses, non-cash currency gains/losses, transaction expenses and interest income. For the nine months ended July 31, 2024, other adjustments include a $3.5 million non-recurring charge related to sales tax litigation. See Note 13 in Part I, Item 1 of this report for more information.

Current wording

1 Other adjustments include the adjustment for non-recurring expenses, non-cash currency gains/losses, transaction expenses and interest income. For the three months ended January 31, 2024, other adjustments include a $3.5 million non-recurring charge related to sales tax litigation. See Note 18 in Part I, Item 1 of this report for more information.

Previous wording

Our critical accounting policies and estimates are disclosed in the "Critical Accounting Policies and Estimates" section of our Annual Report. No modifications have been made during the nine months ended July 31, 2024 to these policies or estimates except for those noted in Note 2 to the condensed consolidated financial statements included within Item 1 of this report.

Current wording

Our critical accounting policies and estimates are disclosed in the "Critical Accounting Policies and Estimates" section of our Annual Report. No modifications have been made during the three months ended January 31, 2025 to these policies or estimates except for those noted in Note 2 to the condensed consolidated financial statements included within Item 1 of this report.