The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our Consolidated Financial
Statements and related notes included elsewhere in this Annual Report. In
addition to historical information, the following discussion contains
forward-looking statements, such as statements regarding the Company's
expectation for future performance, liquidity and capital resources that involve
risks, uncertainties and assumptions that could cause actual results to differ
materially from the Company's expectations. The Company's actual results may
differ materially from those contained in or implied by any forward-looking
statements. Factors that could cause such differences include those identified
below and those described in "Cautionary Note Regarding Forward-Looking
Statements," and in Item 1A "Risk Factors" of this Annual Report on Form 10-K.
The Company assumes no obligation to update any of these forward-looking
statements.



Business Overview



The Company is a Delaware corporation headquartered in Thornton, Colorado. The
audited consolidated financial statements included herein include the accounts
of Concrete Pumping Holdings, Inc. and its wholly owned subsidiaries including
Brundage-Bone Concrete Pumping, Inc. ("Brundage-Bone"), Capital Pumping
("Capital"), and Camfaud Group Limited ("Camfaud"), and Eco-Pan, Inc.
("Eco-Pan").



On December 6, 2018, the Company, formerly known as Concrete Pumping Holdings
Acquisition Corp., consummated a business combination transaction (the "Business
Combination") pursuant to which it acquired (i) the private operating company
formerly called Concrete Pumping Holdings, Inc. ("CPH") and (ii) the former
special purpose acquisition company called Industrea Acquisition Corp
("Industrea"). In connection with the closing of the Business Combination, the
Company changed its name to Concrete Pumping Holdings, Inc. The financial
results described herein for the dates and periods prior to the Business
Combination relate to the operations of CPH prior to the consummation of the
Business Combination.



U.S. Concrete Pumping



In May 2019, the Company, through its wholly-owned subsidiary Brundage-Bone,
acquired Capital Pumping, LP and its affiliates, a concrete pumping provider
based in Texas for a purchase price of $129.2 million. The closing of this
acquisition provided the Company with complementary assets and operations and
significantly expanded its footprint and business in Texas.



Brundage-Bone and Capital are concrete pumping service providers in the United
States ("U.S."). Their core business is the provision of concrete pumping
services to general contractors and concrete finishing companies in the
commercial, infrastructure and residential sectors. Equipment generally returns
to a "home base" nightly and neither company contracts to purchase, mix, or
deliver concrete. Brundage-Bone and Capital collectively have approximately 90
branch locations across 22 states with their corporate headquarters in Thornton
(near Denver), Colorado.


In addition, in April 2018, Brundage-Bone completed the acquisition of substantially all of the assets of Richard O'Brien Companies, Inc., O'Brien Concrete Pumping-Arizona, Inc., O'Brien Concrete Pumping-Colorado, Inc. and O'Brien Concrete Pumping, LLC (collectively, "O'Brien" or the "O'Brien Companies"), solidifying Brundage-Bone's presence in the Colorado and Phoenix, Arizona markets. All trucks of O'Brien were rebranded as Brundage-Bone trucks.

U.S. Concrete Waste Management Services




Eco-Pan provides industrial cleanup and containment services, primarily to
customers in the construction industry. Eco-Pan uses containment pans
specifically designed to hold waste products from concrete and other industrial
cleanup operations. Eco-Pan has 16 operating locations across the United States
with its corporate headquarters in Thornton, Colorado.



U.K. Operations



Camfaud is a concrete pumping service provider in the United Kingdom ("U.K.").
Their core business is primarily the provision of concrete pumping services to
general contractors and concrete finishing companies in the commercial,
infrastructure and residential sectors. Equipment generally returns to a "home
base" nightly and does not contract to purchase, mix, or deliver concrete.
Camfaud has 28 branch locations throughout the U.K., with its corporate
headquarters in Epping (near London), England. In addition, during the third
fiscal quarter of 2019, we started concrete waste management operations under
our Eco-Pan brand name in the U.K. and currently operate from 1 location.



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Results of Operations



To reflect the application of different bases of accounting as a result of the
Business Combination, the tables provided below separate the Company's results
via a black line into two distinct periods as follows: (1) up to and including
the Business Combination closing date (labeled "Predecessor") and (2) the period
after that date (labeled "Successor"). The periods after December 5, 2018 are
the "Successor" periods while the periods before December 6, 2018 are the
"Predecessor" periods.



The historical financial information of Industrea prior to the Business
Combination (a special purpose acquisition company, or "SPAC") has not been
reflected in the Predecessor financial statements as these historical amounts
have been determined to be not useful information to a user of the financial
statements. SPACs deposit the proceeds from their initial public offerings into
a segregated trust account until a business combination occurs, where such funds
are then used to pay consideration for the acquiree and/or to pay stockholders
who elect to redeem their shares of common stock in connection with the business
combination. The operations of a SPAC, until the closing of a business
combination, other than income from the trust account investments and
transaction expenses, are nominal. Accordingly, no other activity in the Company
was reported for periods prior to December 6, 2018 besides CPH's operations as
Predecessor.



As Industrea's historical financial information is excluded from the Predecessor
financial information, the business, and thus financial results, of the
Successor and Predecessor entities, are expected to be largely consistent,
excluding the impact on certain financial statement line items that were
impacted by the Business Combination. Management believes reviewing our
operating results for the twelve-months ended October 31, 2019 by combining the
results of the Predecessor and Successor periods ("S/P Combined") is more useful
in discussing our overall operating performance when compared to the same period
in the prior year. Accordingly, in addition to presenting our results of
operations as reported in our consolidated financial statements in accordance
with GAAP, the tables below present the non-GAAP combined results for the year.



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                                                                                  S/P Combined
                                           Successor         Predecessor           (non-GAAP)          Predecessor
                                            December
                                            6, 2018
                                            through        November 1, 2018        Year Ended
                                            October        through December        October 31,          Year Ended
(dollars in thousands)                      31, 2019           5, 2018                2019           October 31, 2018

Revenue                                    $  258,565     $           24,396     $       282,961     $        243,223

Cost of operations                            143,512                 14,027             157,539              136,876
Gross profit                                  115,053                 10,369             125,422              106,347
Gross margin                                     44.5 %                 42.5 %              44.3 %               43.7 %

General and administrative expenses            91,914                  4,936              96,850               58,789
Transaction costs                               1,521                 14,167              15,688                7,590
Income (loss) from operations                  21,618                 (8,734 )            12,884               39,968

Other income (expense):
Interest expense, net                         (34,880 )               (1,644 )           (36,524 )            (21,425 )
Loss on extinguishment of debt                      -                (16,395 )           (16,395 )                  -
Other income, net                                  47                      6                  53                   55
                                              (34,833 )              (18,033 )           (52,866 )            (21,370 )

Income (loss) before income taxes             (13,215 )              (26,767 )           (39,982 )             18,598

Income tax expense (benefit)                   (3,303 )               (4,192 )            (7,495 )             (9,784 )

Net income (loss)                              (9,912 )              (22,575 )           (32,487 )             28,382

Less preferred shares dividends                (1,623 )                 (126 )            (1,749 )             (1,428 )
Less undistributed earnings allocated to
preferred shares                                    -                      -                   -               (6,365 )
Income (loss) available to common
shareholders                               $  (11,535 )   $          (22,701 )   $       (34,236 )   $         20,589



Twelve Months Ended October 31, 2019 and October 31, 2018




For the S/P Combined twelve months ended October 31, 2019, our net loss was
$32.5 million, a decrease of $60.9 million compared to net income of $28.4
million in the same period a year ago, primarily as a result of higher
depreciation expense, amortization expense, interest expense, transaction costs,
and debt extinguishment costs, all of which were predominantly the result of the
Business Combination. We had a 16.3% improvement in revenue year-over-year,
driven mostly by the acquisition of Capital. Net income in the S/P Combined
twelve months ended October 31, 2019 was negatively impacted by higher
depreciation expense of $4.6 million, amortization expense of $25.1 million,
interest expense, net of $15.1 million, transaction costs of $8.1 million, and
debt extinguishment costs of $16.4 million, all of which were predominantly the
result of the Business Combination. In addition to the impact from the Business
Combination, we incurred an additional $4.1 million in general and
administrative ("G&A") expenses on a year-over-year basis resulting from various
costs related to being a newly public company, which included legal, accounting,
and director-related costs. Approximately $1.6 million of such expenses are
expected to be non-recurring. Furthermore, as a result of the enactment of the
Tax Cuts and Jobs Act in December 2017 (the "2017 Tax Act"), we revalued our
deferred tax assets and liabilities in the fiscal 2018 first quarter, resulting
in the realization of a $14.6 million tax benefit whereas no such benefit was
realized in fiscal 2019. These amounts were slightly offset by positive
contributions to net income from the acquisition of Capital, which occurred in
May 2019.



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Total Assets



Total assets increased from $370.1 million as of October 31, 2018 to $871.4
million as of October 31, 2019. The primary driver of the increase in assets for
all segments was the Business Combination, which resulted in a step-up in the
value of certain assets, primarily goodwill and intangibles, coupled with the
Capital acquisition in May 2019, which added $129.2 million in net assets to the
balance sheet.



                                            Successor        Predecessor
                                           October 31,       October 31,
(in thousands)                                2019              2018
Total Assets
U.S. Concrete Pumping                     $     637,384     $     277,936
U.K. Operations                                 138,435            39,167
U.S. Concrete Waste Management Services         137,646            32,782
Corporate                                        24,223            20,259
Intersegment                                    (66,323 )               -
                                          $     871,365     $     370,144




Revenue



                                                               S/P Combined
                        Successor         Predecessor           (non-GAAP)         Predecessor                Change
                         December
                         6, 2018
                         through        November 1, 2018        Year Ended
                         October        through December       October 31,          Year Ended
(in thousands)           31, 2019           5, 2018                2019          October 31, 2018         $             %
Revenue
U.S. Concrete Pumping   $  187,031     $           16,659     $     

203,690     $        164,306     $  39,384          24.0 %
U.K. Operations             44,021                  5,143             49,164               50,448        (1,284 )        -2.5 %
U.S. Concrete Waste
Management Services         27,779                  2,628             30,407               28,469         1,938           6.8 %
Corporate                    2,258                    242              2,500                    -         2,500           0.0 %
Intersegment                (2,524 )                 (276 )           (2,800 )                  -        (2,800 )         0.0 %
                        $  258,565     $           24,396     $      282,961     $        243,223     $  39,738          16.3 %




U.S. Concrete Pumping



For the S/P Combined twelve months ended October 31, 2019 for our U.S. Concrete
Pumping segment, revenue was up 24.0%, or $39.4 million, year-over-year to
$203.7 million. The incremental benefits from (1) the O'Brien acquisition in
April 2018, which strengthened our presence in the Colorado and Arizona markets,
and (2) the Capital acquisition in May 2019, which added additional pumping
capacity in our Texas market, drove $7.3 million and $25.2 million of the
increase in revenue, respectively. We also had notable improvements in revenue
in our Oklahoma market, where we worked on several special projects utilizing
placing booms, and in our Idaho market, where we experienced an increase in
billable hours. These amounts were slightly offset by approximately $1.5 million
of delayed revenue due to a severe, early winter storm that delivered snow and
rain from Idaho to Texas that caused nearly 40% of our operations to be shut
down for the final week of the fourth fiscal quarter of 2019.



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U.K. Operations



For the S/P Combined twelve months ended October 31, 2019, revenue was down 2.5%
year-over-year to $49.2 million. Excluding any impact from foreign exchange
rates, revenue for this segment was up 2.4% year-over-year as a result of more
favorable weather conditions in the U.K. for most of the fiscal year, which
resulted in improved equipment utilization rates of our operating assets. This
includes the revenue from the Eco-Pan business that began in the third fiscal
quarter of 2019, which amounted to $0.1 million and was immaterial overall to
the segment.


U.S. Concrete Waste Management Services





For the S/P Combined twelve months ended October 31, 2019, revenue was up $1.9
million or 6.8% year-over-year to $30.4 million. Improved volume in many of our
markets was offset by slight declines in certain of our West Coast operations
due to adverse weather conditions experienced during the first two quarters of
fiscal 2019. Specifically, aggregate revenue from operations in the West Coast
was down $0.8 million for the S/P combined twelve months ended October 31, 2019
as compared to the prior year period.



Corporate



There was limited movement in revenue for our Corporate segment for the periods
presented. Any year-over-year changes for our Corporate segment was primarily
related to the leasing of real estate to the different U.S Concrete Pumping
facilities.



Gross Margin



Gross margin for the S/P Combined twelve months ended October 31, 2019 was
44.3%, up 60 basis points from the prior fiscal year. The increase in gross
margin was primarily due to the post-acquisition contribution from the Capital
acquisition, more favorable fuel pricing and improvement in the Company's
procurement costs. The gross margin improvement was partially offset by the
step-up in depreciation related to the Business Combination, as depreciation
expense related to pumping equipment is included in the Company's cost of
operations.



General and Administrative Expenses





G&A expenses for the S/P Combined twelve months ended October 31, 2019 were
$96.9 million, up $38.1 million as compared to $58.8 million in the fiscal year
ended October 31, 2018. As a percentage of revenue, G&A expenses were 34.2% as
compared to 24.2% in the prior fiscal year. The increase was largely due to
$25.1 million of higher amortization expense caused by the step-up in fair value
of certain intangible assets mostly related to the Business Combination, a $4.1
million increase in legal, accounting, and director-related costs as a result of
being a publicly traded company (approximately $1.6 million of these expenses
are expected to be non-recurring) and a $3.3 million increase in stock-based
compensation expense as a result of a stock grant made by the Company in April
of 2019. The remaining increase is largely attributable to incremental G&A
expenses from both the O'Brien and Capital acquisitions.



Transaction Costs & Debt Extinguishment Costs





Transaction costs include expenses for legal, accounting, and other
professionals that were engaged in connection with an acquisition. Transaction
costs and debt extinguishment costs for the S/P Combined twelve months ended
October 31, 2019 were $15.7 million and $16.4 million, respectively. Of those
amounts, the Predecessor incurred $14.2 million of the S&P Combined transaction
costs and all of the S&P Combined debt extinguishment costs, all of which were
related to the Business Combination. The remaining transaction costs incurred
during the Successor period were predominantly related to the acquisition of
Capital in May 2019. Transaction costs incurred during the fiscal year ended
October 31, 2018 were primarily related to the O'Brien acquisition.



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Interest Expense, Net



Interest expense, net for the S/P Combined twelve-months ended October 31, 2019
was $36.5 million up $15.1 million from fiscal 2018. As part of the Business
Combination, the Company extinguished all previous outstanding debt and entered
into a new Term Loan Agreement (as defined below) and ABL Credit Agreement (as
defined below). In addition, in order to finance the acquisition of Capital, the
Company added $60.0 million of incremental term loans under the Term Loan
Agreement in May 2019. The increased interest expense, net, was the result
of higher average debt amounts outstanding during the twelve months ended
October 31, 2019 when compared to fiscal year ended October 31, 2018, coupled
with interest rates on both new financial instruments being higher than the
previous debt instruments.



Income Tax (Benefit) Provision





For the S/P Combined twelve months ended October 31, 2019, the Company recorded
an income tax benefit of $7.5 million on a pretax loss of $40.0 million,
resulting in an effective tax rate of 18.7%. Our income tax benefit was
negatively impacted mostly by $1.4 million of transaction expenses that were not
deductible and $0.3 million in deferred taxes on undistributed foreign earnings.



For the fiscal year ended October 31, 2018, we had an income tax benefit of $9.8
million on pretax income of $18.6 million. In December 2017, the Tax Cuts and
Jobs Act (the "2017 Tax Act") was enacted. The 2017 Tax Act significantly
revised the U.S. corporate income tax regime by, among other things, lowering
the U.S. corporate tax rate from 35 percent to 21 percent effective January 1,
2018. In accordance with Staff Accounting Bulletin No. 118, which provides SEC
staff guidance for the application of ASC Topic 740, the Company recognized the
income tax effects of the 2017 Tax Act in its consolidated financial statements
in the period the 2017 Tax Act was signed into law. As such, the Company's
consolidated financial statements for the period ended October 31, 2018 reflect
the income tax effects of the 2017 Tax Act for which the accounting is complete
and provisional amounts for those specific income tax effects for which the
accounting is incomplete but a reasonable estimate could be determined. All
provisional amounts have been finalized for the October 31, 2019 financial
statements as required by Staff Accounting Bulletin No. 118. Such finalization
had no impact on the tax provision for 2018.



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Adjusted EBITDA1



                                                                 S/P Combined
                          Successor         Predecessor           (non-GAAP)         Predecessor                Change
                         December 6,
                            2018
                           through        November 1, 2018        Year Ended
(in thousands, except    October 31,      through December       October 31,          Year Ended
percentages)                2019              5, 2018                2019          October 31, 2018         $             %
U.S. Concrete Pumping    $    56,069     $            6,752     $       62,821     $         46,793     $  16,028          34.3 %
U.K. Operations               14,034                  1,660             15,694               16,752        (1,058 )        -6.3 %
U.S. Concrete Waste
Management Services           13,178                    999             14,177               13,238           939           7.1 %
Corporate                      2,625                    177              2,802                2,367           435          18.4 %
                         $    85,906     $            9,588     $       95,494     $         79,150     $  16,344          20.6 %

1Please see "Non-GAAP Measures (EBITDA and Adjusted EBITDA)" below

U.S. Concrete Pumping



Adjusted EBITDA for our U.S. Concrete Pumping segment was $62.8 million for the
S/P Combined twelve months ended October 31, 2019 as compared to $46.8 million
for the fiscal year ended October 31, 2018. The 34.3% year-over-year increase
was primarily attributable to the Capital acquisition, improved gross margins,
and volume growth across the majority of the U.S. markets.



U.K. Operations



Adjusted EBITDA for our U.K. Operations segment was $15.7 million for the S/P
Combined twelve months ended October 31, 2019 as compared to $16.8 million for
the fiscal year ended October 31, 2018. The 6.3% decline was primarily
attributable to the reduced revenue previously discussed.



U.S. Concrete Waste Management Services

Adjusted EBITDA for our U.S. Concrete Waste Management Services segment was $14.2 million for the S/P Combined twelve months ended October 31, 2019 as compared to $13.2 million for the fiscal year ended October 31, 2018. The 7.1% year-over-year increase was due primarily to the year-over-year change in revenue discussed previously.





Corporate


There was limited movement in Adjusted EBITDA for our Corporate segment for the periods presented. Any year-over-year changes for our Corporate segment was primarily related to the allocation of overhead costs.


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Liquidity and Capital Resources





Overview



We use our liquidity and capital resources to: (1) finance working capital
requirements; (2) service our indebtedness; (3) purchase property, plant and
equipment; and (4) finance strategic acquisitions, such as the acquisition of
Capital. Our primary sources of liquidity are cash generated from operations,
available cash and cash equivalents and access to our revolving credit facility
under our Asset-Based Lending Credit Agreement (the "ABL Credit Agreement"),
which provides for aggregate borrowings of up to $60.0 million, subject to a
borrowing base limitation. As of October 31, 2019, we had $7.5 million of cash
and cash equivalents and $29.2 million of available borrowing capacity under the
ABL Credit Agreement, providing total available liquidity of $36.7 million.



Capital Resources



Our capital structure is primarily a combination of (1) permanent financing,
represented by stockholders' equity; (2) zero-dividend convertible perpetual
preferred stock; (3) long-term financing represented by our Term Loan Agreement
(defined below) and (4) short-term financing under our ABL Credit Agreement. We
may from time to time seek to retire or pay down borrowings on the outstanding
balance of our ABL Credit Agreement or Term Loan Agreement using cash on hand.
Such repayments, if any, will depend on prevailing market conditions, our
liquidity requirements, contractual restrictions and other factors.



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



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Term Loan Agreement and ABL Credit Agreement





As part of the Business Combination, the Company entered into (i) a Term Loan
Agreement, dated December 6, 2018, among the Company, certain subsidiaries of
the Company, Credit Suisse AG, Cayman Islands Branch as administrative agent and
Credit Suisse Loan Funding LLC, Jefferies Finance LLC and Stifel Nicolaus &
Company Incorporated LLC as joint lead arrangers and joint bookrunners, and the
other Lenders party thereto (as amended, the "Term Loan Agreement") and (ii) a
Credit Agreement, dated December 6, 2018, among the Company, certain
subsidiaries of the Company, Wells Fargo Bank, National Association, as agent,
sole lead arranger and sole bookrunner, the other Lenders party thereto and the
other parties thereto ("ABL Credit Agreement"). Summarized terms of those debt
agreements are included below.



Term Loan Agreement


Summarized terms of the Term Loan Agreement are as follows:

? Provides for an original aggregate principal amount of $357.0 million. This

amount was increased in May 2019 by $60.0 million in connection with the

acquisition of Capital;

? The initial term loans advanced will mature and be due and payable in full

seven years after the issuance, with principal amortization payments in an

annual amount equal to 5.00% of the original principal amount;

? Borrowings under the Term Loan Agreement, will bear interest at either (1) an

adjusted LIBOR rate or (2) an alternate base rate, plus an applicable margin

of 6.00% or 5.00%, respectively;

? The Term Loan Agreement is secured by (i) a first priority perfected lien on

substantially all of the assets of the Company and certain of its subsidiaries

that are loan parties thereunder to the extent not constituting ABL Credit

Agreement priority collateral and (ii) a second priority perfected lien on

substantially all ABL Credit Agreement priority collateral, in each case


    subject to customary exceptions and limitations;


  ? The Term Loan Agreement includes certain non-financial covenants.




The outstanding balance under the Term Loan Agreement as of October 31, 2019 was
$402.1 million and the Company was in compliance with all debt covenants. The
Company's interest on borrowings under the Term Loan Agreement bear interest
using the London Inter-bank Offered Rate (LIBOR) as the base rate plus an
applicable margin in line with the summarized terms of the Term Loan Agreement
as described above.



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Asset Based Revolving Lending Credit Agreement

Summarized terms of the ABL Credit Agreement are as follows:





  ? Borrowing availability in U.S. Dollars and GBP up to a maximum of $60.0
    million;

? Borrowing capacity available for standby letters of credit of up to $7.5

million and for swingline loan borrowings of up to $7.5 million. Any issuance

of letters of credit or making of a swingline loan will reduce the amount

available under the ABL Facility;

? All loans advanced will mature and be due and payable in full five years after


    the issuance;


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

? Interest on borrowings in U.S. Dollars and GBP under the ABL Credit Agreement,

will bear interest at either (1) an adjusted LIBOR rate or (2) a base rate, in

each case plus an applicable margin currently set at 2.25% and 1.25%,

respectively. The ABL Credit Agreement is subject to two step-downs of 0.25%

and 0.50% based on excess availability levels;

? U.S. ABL Credit Agreement obligations are secured by (i) a perfected first

priority security interest in substantially all personal property of the

Company and certain of its subsidiaries that are loan parties thereunder

consisting of all accounts receivable, inventory, cash, intercompany notes,

books and records, chattel paper, deposit, securities and operating accounts


    and all other working capital assets and all documents, instruments and
    general intangibles related to the foregoing (the "U.S. ABL Priority
    Collateral") and (ii) a perfected second priority security interest in
    substantially all Term Loan Agreement priority collateral, in each case
    subject to customary exceptions and limitations;


  ? U.K. ABL Credit Agreement obligations are secured by (i) a perfected

first-priority security interest in (A) the U.S. ABL Priority Collateral, (B)

all of the stock (or other ownership interests) in, and held by, the U.K.

borrower subsidiaries of the Company, and (C) all of the current and future

assets and property of the U.K. subsidiaries of the Company that are loan

parties thereunder, including a first-ranking floating charge over all current

and future assets and property of each U.K. subsidiary of the Company that is

a loan party thereunder; and (ii) a perfected, second-priority security

interest in substantially all Term Loan Agreement priority collateral, in each

case subject to customary exceptions and limitations; and

? The ABL Credit Agreement also includes (i) a springing financial covenant

(fixed charge coverage ratio) based on excess availability levels that the

Company must comply with on a quarterly basis during required compliance


    periods and (ii) certain non-financial covenants.



The outstanding balance under the ABL Credit Agreement as of October 31, 2019 was $23.6 million and the Company was in compliance with all debt covenants thereunder.





Cash Flows



Cash generated from operating activities typically reflects net income, as
adjusted for non-cash expense items such as depreciation, amortization and
stock-based compensation, and changes in our operating assets and liabilities.
Generally, we believe our business requires a relatively low level of working
capital investment due to low inventory requirements and customers paying the
Company as invoices are submitted daily for many of our services.



                                   Successor



Net cash provided by (used in) operating activities generally reflects the cash
effects of transactions and other events used in the determination of net income
or loss. Net cash provided by operating activities during the period from
December 6, 2018 through October 31, 2019 (the "Successor Period") was $22.8
million. The Company had a net loss of $9.9 million that included significant
non-cash charges totaling $60.0 million as follows: (1) depreciation of $20.3
million, (2) amortization of intangible assets of $32.4 million, (3)
amortization of deferred financing costs of $3.7 million and (4) stock-based
compensation expense of $3.6 million. These amounts were partially offset by net
cash outflows related to the following activity: (1) an increase of $5.9 million
in trade receivables, (2) a $0.5 million increase in inventory, (3) a $1.0
million increase in prepaid expenses and other current assets, (4) an increase
of $2.4 million in our net deferred income taxes, (5) a decrease in income taxes
payable of $1.4 million, (6) a $7.3 million decrease in accounts payable, and
(7) a decrease of $8.3 million in accrued payroll, accrued expenses and other
current liabilities.



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We used $374.9 million to fund investing activities during the Successor Period.
The Company paid $449.2 million to fund the Business Combination, $129.2 million
to fund the acquisition of Capital and $2.3 million to fund other business
combinations. Additionally, $35.7 million was used to purchase machinery,
equipment and other vehicles to service our business. These cash outflows were
partially offset by $238.5 million in cash withdrawn from Industrea trust
account in addition to proceeds from the sale of property, plant and equipment
of $3.1 million.



Net cash used in financing activities was $361.6 million for the Successor
Period. Financing activities during the Successor Period included cash inflows
from $402.1 million in net borrowings from our new Term Loan Agreement, $23.3
million in net borrowings under the Company's new ABL Credit Agreement, $174.3
million from the issuance of common shares, $1.4 million in proceeds from the
exercise of stock options and an additional $25.0 million from the issuance of
preferred stock. All of these cash inflows were used to fund business
combinations and other operational activity such as equipment purchases. These
cash inflows were offset by payments for redemptions of common stock totaling
$231.4 million, $24.9 million for the payment of debt issuance costs (which are
inclusive of any original issuance discounts) that were associated with the Term
Loan Agreement and new ABL Credit Agreement, and $8.1 million in payments for
underwriting fees.



                                  Predecessor



Net cash provided by operating activities during the period from November 1,
2018 through December 5, 2018 was $7.9 million. The Company had a net loss of
$22.6 million that included significant non-cash charges totaling $18.5 million
as follows: (1) depreciation of $2.1 million, (2) prepayment penalty on early
extinguishment of debt of $13.0 million, and (3) write off deferred debt
issuance costs of $3.4 million. These amounts were partially offset by net cash
outflows related to the following activity: (1) an increase of $0.3 million in
inventory, (2) a $1.3 million increase in prepaid expenses and other current
assets, (3) an increase of $4.4 million in our net deferred income taxes, (4) an
increase of $17.3 million in accrued payroll, accrued expenses and other current
liabilities, and (5) a $0.7 million decrease in accounts payable.



Net cash provided by operating activities for the fiscal year ended October 31,
2018 was $39.6 million. The Company had net income of $28.4 million that
included significant non-cash charges totaling $27.3 million as follows: (1)
depreciation of $17.7 million, (2) amortization of intangible assets of $7.9
million, and (3) amortization of deferred financing costs of $1.7 million. These
amounts were partially offset by net cash outflows related to the following
activity: (1) an increase of $7.5 million in trade receivables, (2) a $0.7
million increase in inventory, (3) a $1.4 million increase in prepaid expenses
and other current assets, (4) an increase of $11.1 million in our net deferred
income taxes, (6) an increase of $8.7 million in accrued payroll, accrued
expenses and other current liabilities, (7) a decrease in income taxes payable
of $0.4 million, and (8) a $1.8 million decrease in accounts payable.



We used $0.1 million to fund investing activities for the period from November
1, 2018 through December 5, 2018. We used $0.5 million to fund purchases of
machinery, equipment and other vehicles to service our business. This was offset
by $0.4 million in proceeds received from the sale of property, plant and
equipment.



We used $49.5 million to fund investing activities for the fiscal year ended
October 31, 2018. We used $31.7 million to fund purchases of machinery,
equipment and other vehicles to service our business. We also used $21.0 million
as part of the O'Brien acquisition completed in April of 2018.  These were
offset by $3.2 million in proceeds received from the sale of property, plant and
equipment.


We used $15.4 million to fund financing activities during the period from November 1, 2018 through December 5, 2018, all of which was from net payment activity under our revolving credit facility.





Net cash used in financing activities was $13.0 million for the fiscal year
ended October 31, 2018. Financing activities for this period included a $15.6
million cash inflow from a bond offering to finance the O'Brien asset purchase.
This was offset by net payments of $2.4 million on our revolving credit facility
and $0.2 million in payments on our capital lease obligations.



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Off-Balance Sheet Arrangements





We do not currently have any off-balance sheet arrangements that have had or are
reasonably likely to have a material current or future effect on our financial
condition, revenue or expenses, results of operations, liquidity, capital
expenditures, or capital resources. From time to time, we enter into
non-cancellable operating leases that are not reflected on our balance sheet. At
October 31, 2019, we had $1.5 million of undrawn letters of credit outstanding.



Non-GAAP Measures (EBITDA and Adjusted EBITDA)





We calculate EBITDA by taking GAAP net income and adding back interest expense,
income taxes, depreciation and amortization. Adjusted EBITDA is calculated by
taking EBITDA and adding back transaction expenses, loss on debt extinguishment,
stock-based compensation, other income, net, and other adjustments. We believe
these non-GAAP measures of financial results provide useful information to
management and investors regarding certain financial and business trends related
to our financial condition and results of operations, as a tool for investors to
use in evaluating our ongoing operating results and trends and in comparing our
financial measures with competitors who also present similar non-GAAP financial
measures. In addition, these measures (1) are used in quarterly and annual
financial reports prepared for management and our board of directors and (2)
help management to determine incentive compensation. EBITDA and Adjusted EBITDA
have limitations and should not be considered in isolation or as a substitute
for performance measures calculated under GAAP. These non-GAAP measures exclude
certain cash expenses that we are obligated to make. In addition, other
companies in our industry may calculate EBITDA and Adjusted EBITDA differently
or may not calculate it at all, which limits the usefulness of EBITDA and
Adjusted EBITDA as comparative measures. Transaction expenses represent expenses
for legal, accounting, and other professionals that were engaged in the
completion of various acquisitions. Transaction expenses can be volatile as they
are primarily driven by the size of a specific acquisition. As such, we exclude
these amounts from adjusted EBITDA for comparability across periods. Other
adjustments include severance expenses, director fees, expenses related to being
a newly publicly-traded company and other non-recurring costs.



                                                                                   S/P Combined
                                            Successor         Predecessor           (non-GAAP)          Predecessor
                                           December 6,
                                              2018
                                             through        November 1, 2018        Year Ended
                                           October 31,      through December        October 31,          Year Ended
(in thousands)                                2019              5, 2018                2019           October 31, 2018
Consolidated
Net income (loss)                          $    (9,912 )   $          (22,575 )   $       (32,487 )   $         28,382
Interest expense, net                           34,880                  1,644              36,524               21,425
Income tax expense (benefit)                    (3,303 )               (4,192 )            (7,495 )             (9,784 )
Depreciation and amortization                   52,652                  2,713              55,365               25,623
EBITDA                                          74,317                (22,410 )            51,907               65,646
Transaction expenses                             1,521                 14,167              15,688                7,590
Loss on debt extinguishment                          -                 16,395              16,395                    -
Stock-based compensation                         3,619                      -               3,619                  281
Other income, net                                  (47 )                   (6 )               (53 )                (55 )
Other adjustments                                6,496                  1,442               7,938                5,688
Adjusted EBITDA                            $    85,906     $            9,588     $        95,494     $         79,150




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                                                                                  S/P Combined
                                           Successor         Predecessor           (non-GAAP)         Predecessor
                                            December
                                            6, 2018
                                            through        November 1, 2018        Year Ended
                                            October        through December       October 31,          Year Ended
(in thousands)                              31, 2019           5, 2018                2019          October 31, 2018
U.S. Concrete Pumping
Net income (loss)                          $  (11,031 )   $          (25,252 )   $      (36,283 )   $         13,955
Interest expense, net                          32,173                  1,154             33,327               17,247
Income tax expense (benefit)                   (6,658 )               (2,102 )           (8,760 )            (11,473 )
Depreciation and amortization                  32,245                  1,635             33,880               15,237
EBITDA                                         46,729                (24,565 )           22,164               34,966
Transaction expenses                            1,521                 14,167             15,688                7,590
Loss on debt extinguishment                         -                 16,395             16,395                    -
Stock-based compensation                        3,619                      -              3,619                  281
Other income, net                                 (45 )                   (6 )              (51 )                (55 )
Other adjustments                               4,245                    761              5,006                4,011
Adjusted EBITDA                            $   56,069     $            6,752     $       62,821     $         46,793




                                                                                   S/P Combined
                                            Successor         Predecessor           (non-GAAP)          Predecessor
                                           December 6,
                                              2018
                                             through        November 1, 2018        Year Ended
                                           October 31,      through December        October 31,          Year Ended
(in thousands)                                2019              5, 2018                2019           October 31, 2018
U.K. Operations
Net income (loss)                          $     1,123     $              158     $         1,281     $          3,018
Interest expense, net                            2,705                    490               3,195                4,173
Income tax expense (benefit)                       538                     49                 587                  503
Depreciation and amortization                    8,807                    890               9,697                8,060
EBITDA                                          13,173                  1,587              14,760               15,754
Transaction expenses                                 -                      -                   -                    -
Loss on debt extinguishment                          -                      -                   -                    -
Stock-based compensation                             -                      -                   -                    -
Other income, net                                    -                      -                   -                    -
Other adjustments                                  861                     73                 934                  998
Adjusted EBITDA                            $    14,034     $            1,660     $        15,694     $         16,752




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                                                                                   S/P Combined
                                            Successor         Predecessor           (non-GAAP)          Predecessor
                                           December 6,
                                              2018
                                             through        November 1, 2018        Year Ended
                                           October 31,      through December        October 31,          Year Ended
(in thousands)                                2019              5, 2018                2019           October 31, 2018
U.S. Concrete Waste Management Services
Net income (loss)                          $    (1,520 )   $            2,009     $           489     $          9,634
Interest expense, net                                2                      -                   2                    1
Income tax expense (benefit)                     2,485                 (1,784 )               701                  846
Depreciation and amortization                   10,871                    163              11,034                2,078
EBITDA                                          11,838                    388              12,226               12,559
Transaction expenses                                 -                      -                   -                    -
Loss on debt extinguishment                          -                      -                   -                    -
Stock-based compensation                             -                      -                   -                    -
Other income, net                                   (2 )                    -                  (2 )                  -
Other adjustments                                1,342                    611               1,953                  679
Adjusted EBITDA                            $    13,178     $              999     $        14,177     $         13,238




                                                                              S/P Combined
                                            Successor       Predecessor        (non-GAAP)          Predecessor
                                           December 6,
                                              2018          November 1,
                                             through       2018 through        Year Ended
                                           October 31,      December 5,        October 31,          Year Ended
(in thousands)                                2019             2018               2019           October 31, 2018
Corporate
Net income (loss)                          $     1,516     $         510     $         2,026     $          1,775
Interest expense, net                                -                 -                   -                    4
Income tax expense (benefit)                       332              (355 )               (23 )                340
Depreciation and amortization                      729                25                 754                  248
EBITDA                                           2,577               180               2,757                2,367
Transaction expenses                                 -                 -                   -                    -
Loss on debt extinguishment                          -                 -                   -                    -
Stock-based compensation                             -                 -                   -                    -
Other income, net                                    -                 -                   -                    -
Other adjustments                                   48                (3 )                45                    -
Adjusted EBITDA                            $     2,625     $         177     $         2,802     $          2,367




Jobs Act



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



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Critical Accounting Policies and Estimates





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



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

Goodwill and Intangible Assets





We assess potential impairment of our goodwill at least annually, generally as
of August 31st. However, as a result of our stock price declining substantially
during the fiscal 2019 third quarter, we concluded this qualified as a
triggering event and thus performed a step one goodwill impairment analysis as
of July 31, 2019. The results of our analysis indicated no impairment. The fair
value of our U.S. Concrete Pumping, U.K. Operations and U.S. Concrete Waste
Management Services reporting units exceeded their July 31, 2019 carrying values
by approximately 4%, 3% and 4%, respectively. The fact that the fair values of
these reporting units were largely in-line with their carrying values was
consistent with expectations given the short period of time that had passed
since goodwill was initially recorded on the Company's balance sheet, primarily
resulting from the Business Combination in December 2018 and the Capital
acquisition in May 2019.



Fair value determinations require considerable judgment and are sensitive to
changes in underlying assumptions, estimates and market factors. Estimating fair
value of individual reporting units and indefinite-lived intangible assets
requires us to make assumptions and estimates regarding out future plans, as
well as industry and economic conditions. These assumptions and estimates
include projected revenue, royalty rate, discount rate, tax amortization benefit
and other market factors outside of our control.



Due to the interim quantitative test performed as of July 31, 2019, a
quantitative test on our annual testing date of August 31, 2019 was not
considered necessary. As there were no additional impairment indicators present
as of year-end, the Company elected to perform a qualitative analysis for the
three-month period ending October 31, 2019 instead and no triggering events were
identified. For further information, refer to Note 8 to the Company's audited
financial statements included elsewhere in this Annual Report.



Income Taxes



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



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



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Stock-Based Compensation.



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



The Company accounts for forfeitures as they occur.

Recently Issued Accounting Standards





For a detailed description of recently adopted and new accounting pronouncements
refer to Note 2 to the Company's audited financial statements included elsewhere
in this Annual Report.

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