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Concrete Pumping Holdings Inc (BBCP) Q4 2021 Earnings Call Transcript

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Concrete Pumping Holdings Inc (NASDAQ: BBCP)
Q4 2021 Earnings Call
Jan 12, 2022, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Concrete Pumping Holdings financial results for the fourth quarter and fiscal year ended October 31st, 2021. Joining us today are Concrete Pumping Holdings' CEO, Bruce Young; CFO, Iain Humphries; and the company's external director of investor relations, Cody Slach. Before we go further, I would like to turn the call over to Mr. Slach to read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements.

Cody, please go ahead.

Cody Slach -- Director of Investor Relations

Thanks, Paul. I'd like to remind everyone that in the course of this call, to give you a better understanding of our operations, we will be making certain forward-looking statements regarding our business and outlook. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Concrete Pumping Holdings' annual report on Form 10-K, quarterly report on Form 10-Q, and other available filings with the SEC.

The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. On today's call, we will also reference certain non-GAAP financial measures, including adjusted EBITDA, net debt, and free cash flow, which we believe provide useful information for investors. We provide further information about these non-GAAP financial measures and reconciliations to the comparable GAAP measures in our press release issued today or the investor presentation posted on the company's website. I'd like to remind everyone, this call will be available for replay later this evening.

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A webcast replay will also be available via the link provided in today's press release, as well as on the company's website. Additionally, we have posted an updated investor presentation to the company's website. Now I'd like to turn the call over to the CEO of Concrete Pumping Holdings, Bruce Young. Bruce?

Bruce Young -- Chief Executive Officer

Thank you, Cody, and good afternoon, everyone. I'm happy to report that we had a strong finish to fiscal year 2021, and our fourth quarter revenue increased 11% to $87.8 million compared to the prior year quarter. The strong results for the quarter were driven by increased revenue from higher construction volumes across each of our operating segments. During the 2021 fiscal year, revenue increased 4% to $315.8 million as we continue to grow our market share in the U.S.

and the U.K., strengthened our strong financial profile and reignited our compelling M&A and growth strategy. An additional -- and in addition to multiple acquisitions in fiscal year 2021 and as announced on November 2, we welcomed the experienced Pioneer Concrete Pumping team into the Concrete Pumping Holdings family as we successfully completed the acquisition. With the addition of this outstanding team, their strong customer relationships and high-quality assets, we are well-positioned to benefit from favorable market dynamics and accelerating construction activity in our important Texas and Georgia regions. This addition also provides a complementary growth platform for our Eco-Pan service expansion.

I'm grateful to our colleagues for their dedication and perseverance in their efforts to complete the acquisition, and we look forward to working together to seamlessly integrate and realize synergies to deliver improved stakeholder value. Integration activities are progressing well as expected from both an operational and customer-facing perspective. Within our individual reporting segments, our U.S. pumping business increased 8% in the fourth quarter, driven by the contribution from recent acquisitions and the continued strength in our residential and infrastructure end markets.

Our commercial business continues to experience pockets of softness across the country tied to the dynamic environment created by COVID-19 and new variants. The uneven pattern of the country returning to work is delaying some of our customers' projects, but we are -- but we've seen continued progress in high-growth markets such as fulfillment centers and data centers, both of which are concrete-intensive projects. In our U.K. segment, revenue increased 27% compared to the prior year quarter due to the country's continued strong recovery from impacts of COVID-19.

In Eco-Pan, our concrete waste management business, revenue increased 11% for the fourth quarter as our sales force has been successful in executing more in-person selling. Eco-Pan remains an important part of our long-term growth strategy, and we look forward to maintaining double-digit growth expectations as the nation continues to reopen. Turning to some end market commentary. We continue to see strong demand within the residential market and intentionally tailored our fleet management to maximize our ability to win work.

High demand for single-family homes is a key reason for our sustained market share gains, and we still expect residential to remain a bright spot for our company into 2022. In the infrastructure end market, we continue to see momentum in the U.K. and U.S. regions.

In the U.K., our team continues to secure energy, road, and rail projects, including the concrete-intensive high-speed rail project that we expect to last beyond 2030. In the U.S., we've mentioned in our recent earnings calls that states have increased public funding for bridges, schools, wastewater treatment plants, and hospitals. Going forward, we will continue to capitalize on increased infrastructure spending at the state level and fully expect the federal spending to increase due to the recent passage of the Infrastructure Investment and Jobs Act. While we do not assume any meaningful impact from the infrastructure bill in our 2022 fiscal year, we remain well-positioned to capitalize on expanded federal- and state-level infrastructure investment in 2023 and beyond, although the magnitude is currently tough to estimate.

As I mentioned earlier, our commercial end market continues to recover as the economy recovers from the impacts of the pandemic. We are actively bidding projects that require specialty equipment and it's expected these projects will begin in 2022. Now shifting to the cost side of the business, as similar to our third quarter, rapid inflationary pressures impacted our income statement quicker and more severe than we were able to pass along to our customers, which caused temporary pressure on margins. The most notable headwind was diesel fuel.

Not only did the cost of diesel move higher more quickly, but also consumed more fuel as we navigated higher traffic congestion when compared to the prior year. Typically, our short project durations allow normal inflation to be passed on in our projects. However, given the sudden and sharp inflationary cost environment, we are experiencing a temporary lag in our cost mitigation efforts as we burn off current workload at previously agreed pricing. Moving to labor.

It remains a challenge to find qualified workers, given the current tightness in the construction job market. As we shared last quarter, our business generally has unique levers to pull to combat labor headwinds like a higher wage base that helps retain talent and a flexible fleet that can be agile depending on where construction projects and workers are. Despite these levers, the labor environment was difficult to fully offset. With some workers remaining on the sidelines due to COVID, labor rates have been forced higher, impacting various trades across many of our customers' projects.

As these labor constraints continue in the industry, it is important to note that the construction backlog in the U.S. and the U.K. remains strong. We anticipate continued inflation in fiscal year 2022, and we are actively implementing our pass-through pricing mechanisms and working with our customers on new project bids and pricing agreements.

Now to provide an update on the acquisitions discussed last quarter. We are very pleased with the strategic tuck-in acquisitions in the Southern California market. And our acquisition of Hi-Tech in Texas has resulted in market share gains. In the U.K., we made a small tuck-in acquisition during the fourth quarter, solidifying our leading market share position in Southern Scotland.

We believe this acquisition serves an important gateway to increasing our expansion in this part of the country. We also continue to focus on growing our U.K. business organically and through opportunistic tuck-in acquisitions. As I mentioned earlier, on November 2, we also announced the acquisition of Pioneer, which expanded our presence in Atlanta, Dallas, and San Antonio.

We are confident in our ability to realize the benefits of this transaction and deliver stakeholder value creation following the same proven approach we have taken with our previous acquisitions. We will continue to pursue opportunistic M&A that will be accretive to our earnings and have teams that align with our core values of safety, people, and reliability. Lastly, on the topic of M&A, our acquisitions offer a compelling opportunity to cross-sell our Eco-Pan service, and we look forward to introducing new customers to our cost-effective and environmentally friendly concrete wash-out solution. As we close out the 2021 fiscal year and look forward to 2022, we are in a strong position to execute our strategic growth priorities.

I will return later to discuss our long-term growth strategy and provide an updated market outlook. But for now, I will pass the call off to Iain to discuss our fourth quarter and fiscal year 2021 financial results in more depth. Iain?

Iain Humphries -- Chief Financial Officer

Thanks, Bruce, and good afternoon, everyone. For the fourth fiscal quarter of 2021, consolidated revenue increased 11% to $87.8 million compared to $79.2 million in the same year-ago quarter. By segment, revenue in our U.S. concrete pumping business, operating largely under the Brundage-Bone brand, increased 8% to 63 million compared to $58.5 million in the same year-ago quarter.

For our U.K. operations, operating mainly under the Camfaud brand, revenue improved 27% to 13.8 million compared to 10.9 million in the prior year quarter. This organic growth was a result of the U.K. region's continued recovery after being heavily impacted by COVID-19 shutdowns.

Revenue in our U.S. concrete waste management services segment achieved our double-digit growth expectations and increased 11% to $11 million in the fourth quarter of 2021 compared to 9.9 million in the prior year quarter. Gross profit in the fourth quarter increased 5% to 37.3 million compared to 35.5 million in the same year-ago quarter. Gross margin was 42.6% compared to 44.8%.

This temporary reduction in gross margin was primarily due to the rapid inflationary impact on our cost that Bruce just discussed, particularly in higher diesel prices and higher fuel consumption from increased traffic congestion. For the fourth quarter alone, diesel costs increased approximately $1.5 million compared to Q4 2020. And absent this inflationary headwind, our consolidated adjusted gross margin would have been largely consistent with the same year-ago quarter. While less impactful to our results, it is important to note that our recent acquisitions have been integrated in our Q4 results at a lower gross margin than our heritage U.S.

pumping base business. As we integrate these growth additions, we would naturally expect to improve margin performance as we optimize our fleet management scale and supply chain purchasing power. In other areas of our company costs, we continue to prudently monitor and manage our expenses. Our general and administrative expenses in Q4 improved 18% to $25.6 million compared to $31.1 million in the same year-ago quarter.

Excluding the noncash G&A expenses related to amortization and stock-based compensation, G&A expenses were $17.1 million compared with $15.4 million in the same year-ago quarter. As a percentage of revenue, both comparable fourth quarters were approximately 19% of revenue. Net income attributable to common shareholders in the fourth quarter increased to $2.8 million or $0.05 per diluted share compared to a net loss attributable to common shareholders of $3.1 million or $0.06 per diluted share. The improvement was largely driven by the increase in revenue, reduction in G&A expenses, and the lower interest expense as a result of the strategic debt refinancing that we completed in January of 2021.

Adjusted EBITDA in the fourth quarter was $28.3 million compared to $29.9 million in the fourth quarter of 2020. Adjusted EBITDA margin was 32.2% compared to 37.8% in the same year-ago quarter. The temporary reduction in EBITDA margin was due to the rapid cost inflation items explained earlier. Looking at adjusted EBITDA by segment.

Adjusted EBITDA in our U.S. concrete pumping business was $18.1 million compared to $20.6 million in the same year-ago quarter. In our U.K. business, adjusted EBITDA improved 13% to $4.2 million compared to $3.7 million in the same year-ago quarter.

For our U.S. concrete waste management business, adjusted EBITDA improved to $5.4 million compared to $5 million in the same prior year quarter. Now turning to our capital structure and liquidity. At October 31, 2021, we had total debt outstanding of $376 million or net debt of $366.7 million, which equates to a net debt-to-EBITDA leverage ratio of approximately three and a half times.

Also, we had approximately $129.9 million in liquidity, which includes cash on the balance sheet and availability from our ABL facility. When compared to the fiscal year ended October 31, 2020, our current liquidity position has significantly improved from $59.3 million or by approximately $70 million. This greatly enhances the strength and flexibility of our balance sheet capacity and ability to pursue accretive investment opportunities like M&A and organic growth. As a reminder, we have no near-term debt maturities, with our senior notes and asset-based lending facility maturing in 2026.

Our business continues to generate healthy operating free cash flows. We invoice our customers daily for the work we perform, and we have minimal working capital requirements since we do not take ownership of the concrete we place. In fiscal 2021, we generated approximately $50 million in free cash flow. As we generally record our concrete pumping growth investments or acquisitions as asset purchases as opposed to business combinations, the purchase price is included in plant and equipment purchases within our cash flow statement investing activities.

When excluding these acquisitions completed in fiscal year 2021, we achieved the midpoint of our 2021 free cash flow guidance. Looking forward to 2022, we expect to continue the strong performance of delivering significant free cash flow that provides the capacity to secure attractive and accretive growth opportunities. Moving now into our 2022 full year guidance. We expect full year revenues to range between $360 million and $370 million; adjusted EBITDA to range between $115 million and $120 million; and free cash flow, which we define as adjusted EBITDA less net replacement capex less cash interest, to range between $55 million and $60 million.

Improvements to our fleet are critical to drive improved margin performance across the business and attract and retain the qualified employees, something that is very important in today's tight labor market. We continue to make improvements to our concrete pumping fleet so that we have safe and reliable equipment, lower our repair costs, and reduce down for repair time, all of which help us capture project wins with new customers. It should be noted that we intend to reinvest a significant amount of the $55 million to $60 million free cash flow dollars back into our business. For example, we redeployed approximately $20 million into the successful acquisition of Pioneer Concrete Pumping in the first quarter of fiscal 2022.

We have also earmarked approximately $20 million to $25 million toward organic growth capex and specifically new equipment. It is expected that the delivery of the organic growth equipment will begin to arrive in the second half of 2022, delivering revenue and earnings benefit in fiscal 2023 and beyond. We are dedicated and committed to driving organic growth and believe the new growth equipment units will allow us to attract top industry talent and position us well to drive long-term profitable growth with superior value for all our stakeholders. We will continue to be strategic and prudent when making capital allocation decisions, remain strong from an operational and financial standpoint and actively accelerate growth.

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

Bruce Young -- Chief Executive Officer

Thanks, Iain. In the fourth quarter of 2021, we're pleased to report double-digit revenue growth to return to a more normalized state in both the U.S. and the U.K. compared to 2020.

We took steps to drive scale through continued organic growth, as well as strategic M&A. We also returned to our expected double-digit growth in our Eco-Pan business, as our recently expanded Eco-Pan sales force were more effectively able to communicate the value of the service offering to our customers. Additionally, we opportunistically raised rates as we endured the rapid cost inflationary pressures such as increased labor and fuel costs. Despite our actions to mitigate inflation, we expect margins to remain impacted in the near term due to timing delay in obtaining price increases that corresponded with the timing and volatility of increasing inflationary costs.

Earlier, I discussed our recent acquisitions of Hi-Tech, Pioneer, and our small tuck-in, in Southern California and Scotland. We've made great progress, and I want to reiterate what I've said in prior quarters, which is that we continue to have a robust pipeline of other acquisitions that our management team are evaluating. We remain very disciplined in our approach to M&A and have the clear sightlines to the areas we want to grow. We will continue to develop our market share leading position and pursue accretive M&A opportunities.

Overall, we are growing our business by maintaining a healthy balance sheet while also balancing our disciplined capital allocation priorities. We remain committed to returning superior value to our stakeholders by making strategic investments to grow organically and through acquisitions. We look forward to continuing to gain market share in both the U.S. and the U.K.

To share some thoughts in 2022, we expect the residential to remain -- area to remain an area of momentum and strength in our U.S. business as demand remains high for these projects, especially single-family housing projects. As for infrastructure, we expect the momentum to continue both in the U.S. and in the U.K.

This is outside of any beneficial impact that we may achieve from the passage of the Infrastructure Investment and Jobs Act. Moving to commercial. There continues to be heightened demand for heavy commercial and industrial warehouses and data centers as people continue to work from home and rely on online retail services. We expect commercial process will continue to increase as the economy recovers from the impacts of COVID-19.

Lastly, we anticipate that Eco-Pan's revenue will continue to accelerate as our sales team ramp up the in-person selling. Looking beyond 2022 and to build on Iain's earlier comment of the $20 million to $25 million allocated for organic growth next year, we remain well-positioned to capitalize on attractive market fundamentals and secular demand trends across our geographic footprint. We fully expect expanded federal- and state-level infrastructure investment, continued single-family housing strength and the commercial market recovery to support growing construction activity for years to come. With that, I'd now like to turn the call back over to the operator for Q&A.

Paul?

Questions & Answers:


Operator

Thank you, sir. [Operator instructions] One moment, please, while we poll for questions. Thank you. Our first question comes from Andy Wittmann with Baird.

Please proceed with your question.

Andy Wittmann -- Baird -- Analyst

Great. Good afternoon, guys. I have a few questions here, if you'll indulge me. I guess I wanted to start with the guidance and specifically the implied margins in guidance.

I calculated them at about -- at the midpoint about 32.2%. That's down about 90 basis points over your actuals for this year, if my math is correct. In these last couple of quarters, you had obviously the diesel impact that, you know, cut that was just really fast, so you weren't able to offset it right away. You had some weather earlier in the year, too.

I guess maybe, Iain, with the margins being down again next year, I would have thought that you are able to now price for the higher diesel, so that shouldn't be as much of a headwind. All of your contracts are just shortened duration. Labor, all these things, I would think you'd be able to bake into your pricing to either keep your margins flat or maybe even improve them. So, I was hoping you could just talk a little bit about what specific cost buckets are going against you in your guidance plan and give some detail there.

Iain Humphries -- Chief Financial Officer

Yeah. Thanks, Andy. So, obviously, I mean fuel is something that continues early into 2022. And you heard us talk about in our prepared remarks, we're still working through those inflationary pressures right now.

We do expect that we will offset the pricing as we go forward with our customers. So we will see the margins improve several of those buckets, but diesel is obviously one that we continue with. You also heard us say that with some of the acquisitions, they come in at slightly lower margins. So that is something that we work through on the synergy side to offset.

But you're right, I mean, as we outpace the headwinds, we do expect to see the margins improve through the adjustments that we're making on price.

Andy Wittmann -- Baird -- Analyst

OK. Got it. Can you -- maybe just to build on some of the questions on the acquisitions and just trying to understand this vis-a-vis your guidance. So, you said in your prepared remarks that you've been acquiring -- the acquisitions that you've done have been asset purchases, so they're not coming in on the financial statements as acquisitions, rather they are coming in, I guess, on the capex line.

So, just to be really clear here, is your guidance of 55 million to 60 million free cash flow, that's treating the asset purchases as acquisitions. So, we have to kind of know that adjustment. Is that right, Iain?

Iain Humphries -- Chief Financial Officer

Yes. So if you take really the 55 million to 60 million, looking at the operational free cash flow of their business, and they will be available to deploy any growth. So as you heard us say in our remarks, you would take the 20 million for Pioneer, I would presumably, actually, pull that through, it will show up on the capex line as opposed to a business combination line. So the 55 million to 60 million is the operational free cash flow after we look at net replacement investment on equipment.

So like I said, for Pioneer, 20 million of that 55 million to 60 million would be thought of as going in that investment.

Andy Wittmann -- Baird -- Analyst

Yeah. OK. Just wanted to confirm that. So I've got 20 million for Pioneer, we got 20 million, 25 million growth capex.

I didn't hear a maintenance capex number that should be contemplated in the '22 guide. Can you tell us what you're thinking about that one?

Iain Humphries -- Chief Financial Officer

Yeah. So on the free cash flow, it's within there. So, I mean, as you know, if you go from EBITDA down to the free cash flow line, we really get that net replacement capex and interest. So if you look at the interest really on the high-yield bond, the interest expectation for the full year would be about 23 million and the replacement would be the difference between those two, so around 36 million.

Andy Wittmann -- Baird -- Analyst

OK. Last question, sorry, but just last question here. Can you give us some help on what the Hi-Tech acquisition, as well as the Pioneer acquisitions, are expected to contribute in terms of revenue? I'm just trying to understand and decipher the revenue guidance here for '22 versus what we would have otherwise expected on an organic basis. And knowing those acquisition and revenue contributions even approximately would be helpful in that regard.

Iain Humphries -- Chief Financial Officer

Yeah. It's about 25 million or 26 million.

Andy Wittmann -- Baird -- Analyst

OK. Combined from the both of them?

Iain Humphries -- Chief Financial Officer

Yeah.

Andy Wittmann -- Baird -- Analyst

Got it. OK. I will yield the floor. I might chime back in because I do have some others, but I bet they will be asked by others.

So, thank you and have a good night. Good to talk to you.

Iain Humphries -- Chief Financial Officer

Thanks, Andy.

Bruce Young -- Chief Executive Officer

Thanks, Andy.

Operator

Thank you. Our next question comes from Tim Mulrooney with William Blair. Please proceed with your question.

Tim Mulrooney -- William Blair -- Analyst

Bruce, Iain, good afternoon.

Bruce Young -- Chief Executive Officer

Hi, Tim.

Iain Humphries -- Chief Financial Officer

Hi, Tim.

Tim Mulrooney -- William Blair -- Analyst

So, first on your revenue guide for fiscal '22, I mean, it was ahead of what we were expecting, I think, ahead of what consensus was expecting. But you made, you know, several asset purchase acquisitions in the back half of the year that may help explain some of that gap. Can you just talk about what kind of organic growth you're baking into your guidance for fiscal '22 that excludes all of those acquisitions, asset purchase or otherwise? My sense is that that's also a little bit higher than what the Street is currently assuming. So I want to clarify.

Iain Humphries -- Chief Financial Officer

Yeah, the organic growth across the business will be about 5% or 6%.

Tim Mulrooney -- William Blair -- Analyst

All right. Thanks, Iain. I know you mentioned that you've got new equipment coming in, in the second half of this year, which will enable you to grow faster in '23. I mean does that mean that in the meantime, you're somewhat capacity-constrained or constrained on the top line because you can't get all the equipment that you need right now, you know, due to supply chain constraints?

Bruce Young -- Chief Executive Officer

You know, Tim, I think we're actually really good with equipment right now. We anticipate 2023 being much better. And with the systems in place we have for gaining share, we think that it's time for us to invest going forward. So we're prepared for the opportunity for growth in 2023.

Tim Mulrooney -- William Blair -- Analyst

OK. OK. Fair enough, Bruce. One more from me.

The acquisitions, how do the EBITDA margins and fleet utilization rates for some of your larger ones, like Pioneer, you know, how do those compare to what you see on a consolidated basis relative to Brundage-Bone?

Bruce Young -- Chief Executive Officer

So in both cases, their margins were much less than what Brundage-Bone typically gets, and their utilization was considerably lower. So with those, we have additional assets. Some of them were older, and we'll dispose of those for cash. But we want to improve the asset utilization of that, and then we think we can get margin improvement by really, you know, leveraging our overhead with theirs and using our pricing power to get better pricing on all supplies.

Tim Mulrooney -- William Blair -- Analyst

OK. So part of the plan is to -- you know, when you acquire these, then you can share the -- your existing footprint -- your fleet and your existing footprint to help lift those margins up. That's part of the basic plan here?

Bruce Young -- Chief Executive Officer

Yeah. And in both cases, we have existing operations in all the areas they both did business in. And so that's certainly helpful there.

Tim Mulrooney -- William Blair -- Analyst

Yeah. OK. All right. That's great.

Thank you for taking my questions.

Bruce Young -- Chief Executive Officer

Thanks, Tim.

Iain Humphries -- Chief Financial Officer

Thanks, Tim.

Operator

Thank you. Our next question comes from Brent Thielman with D.A. Davidson. Please proceed with your question.

Brent Thielman -- D.A. Davidson -- Analyst

Hey, thanks. Good afternoon, Bruce and Iain.

Bruce Young -- Chief Executive Officer

Hi, Brent.

Brent Thielman -- D.A. Davidson -- Analyst

Maybe just back on the guidance and the applied margins in F'22. Is there an embedded expectation sort of margin pressure that should neutralize, you know, in the second half? Or as you stand here today, do you expect to see some sustained pressure as we move through the fiscal year?

Bruce Young -- Chief Executive Officer

We do expect to get out in front of that in the second half of the year. It was a little steeper than what we've ever experienced before with inflation. And getting the rate increases as fast as what the customers would accept in the market has been a little challenging, but we do believe we're getting out in front of that.

Brent Thielman -- D.A. Davidson -- Analyst

And Bruce, as you stand here today, are there more adjustments necessary based on the inflationary conditions you're experiencing today? Or do you feel like you have what's out there to catch up?

Bruce Young -- Chief Executive Officer

We actually think that there's going to be continued more inflationary pressure. And so we actually are looking at the way we did our work and the length of time that we have our agreements in place for us so that we can get out in front of that if it continues.

Brent Thielman -- D.A. Davidson -- Analyst

OK. And then just on Eco-Pan, maybe your confidence in getting the business back to sort of 50-plus percent EBITDA margins at some point. And I'm just curious, over the last 30 days or so, you know, given the traction you've seen with in-person sales, has that slowed at all, has it taken a step back? Maybe just what you've seen with the latest and greatest of the variant?

Bruce Young -- Chief Executive Officer

You know, actually, Eco-Pan continues to build stronger momentum that we do have the ability to get out in front of contractors on site to show them the value of our service. And so I think you'll see that Eco-Pan will continue to be strong through the remainder of this year and into the future.

Brent Thielman -- D.A. Davidson -- Analyst

OK. Thanks, Bruce. Thanks, Iain.

Bruce Young -- Chief Executive Officer

Thank you.

Iain Humphries -- Chief Financial Officer

Thanks, Brent.

Operator

[Operator instructions] Our next question comes from Steven Fisher with UBS. Please proceed with your question.

Steven Fisher -- UBS -- Analyst

Hi, thanks. Good afternoon. You mentioned in an earlier answer that you anticipate about 5% to 6% organic growth for 2022. And I guess I'm a little surprised that it's not a bit higher than that.

Can you just give us a sense of what the pricing assumption you have embedded within that 5% to 6%?

Iain Humphries -- Chief Financial Officer

Yeah, the pricing assumption is -- well, it's by local market. But I would say that the pricing assumption is slightly higher than what we've seen in our legacy business. So, it would be in that 5% to 8% range. But it depends on the market that we're in, whether it be the U.S.

or the U.K. But obviously, it's in that effort to offset those inflationary cost environment that we see today. So, it is a little higher than what we've seen in the past.

Steven Fisher -- UBS -- Analyst

So, does that imply then that your organic volumes are actually down?

Iain Humphries -- Chief Financial Officer

No, not within the U.S. pumping or the Eco-Pan part of our business or even in the U.K. I mean those are the target prices that we would expect to see. But the organic volume, we would expect to see in that 2% to 3% that we've seen sort of year over year.

Steven Fisher -- UBS -- Analyst

OK. And within that 2% to 3% volume, any sense of kind of first half versus second half, sort of assume that there should be some accelerating recovery over the course of the year. Any particular assumption there?

Iain Humphries -- Chief Financial Officer

The shape of our business, whether it be Q1 through Q4 or H1, H2, we expect to be largely the same as what we've seen in historical years. It is slightly flattened maybe from before we were 45-55 and it's maybe, you know, 46-54. But the shape of the business quarter to quarter or H1 over H2 is largely the same.

Steven Fisher -- UBS -- Analyst

OK. And then, I guess, my last question really relates to capacity in your customer base. And I'm wondering to what extent is there perhaps a constraint at your customers to be able to take on new work from a labor perspective? And how utilized do you think your customers are on balance? And how much capacity do you have to take on growth?

Bruce Young -- Chief Executive Officer

Yeah, that's a great question, Steve. I think that's the biggest challenge our industry faces is getting the labor to do the work. I think our customers have great backlog. They're having difficulty keeping up with the schedules that they currently have and taking on new jobs as we really work hard to get -- to attract more people into our industry, so we can drive more growth.

Steven Fisher -- UBS -- Analyst

OK. Thanks a lot.

Bruce Young -- Chief Executive Officer

Thank you.

Operator

Thank you. Our next question is from Andy Wittmann with Baird. Please proceed with your question.

Andy Wittmann -- Baird -- Analyst

Great. Thanks for taking my follow-up. I don't think I caught it if you said it, but could you give the FX contribution to revenue for the quarter?

Iain Humphries -- Chief Financial Officer

Yeah, the FX contribution for the quarter, I think, it was $600,000 or $700,000.

Andy Wittmann -- Baird -- Analyst

OK. So, that's still very good underlying growth. OK. And then maybe just a little bit more detail, Bruce, on your three business segments, residential, commercial, and infrastructure for your U.S.

segment in particular. Can you talk about what the full year plus or minus percent change was for those three categories in '21 now that that's in the book? And how do you expect those three categories to perform relatively in fiscal '22? We kind of heard your -- some thoughts on this. I just thought maybe you could be a little bit more specific if possible.

Bruce Young -- Chief Executive Officer

Yeah. So, commercial was down almost 10% year over year from the previous year, and it was picked up by residential largely and a little bit of infrastructure. We expect that going forward in the first half of this year, that it will stay fairly consistent to that. We are bidding on an awful lot of commercial projects, some substantial projects that need specialty equipment that are really good projects for us that we hope go this summer.

But that's the thing that we watched more than anything is when does the commercial market come back. And while we're hoping it will come back in the second half of this year, we really haven't budgeted too much for that and really expect to see more of that in 2023.

Andy Wittmann -- Baird -- Analyst

Got it. OK. Those are all my questions. Thanks a lot, guys.

Have a good evening.

Bruce Young -- Chief Executive Officer

Thank you.

Iain Humphries -- Chief Financial Officer

Thank you.

Operator

This concludes our question-and-answer session. I would now like to turn the call back over to Mr. Young for any closing remarks.

Bruce Young -- Chief Executive Officer

Thank you, Paul. We'd like to thank everyone for listening to today's call, and we look forward to speaking with you when we report our first quarter 2022 results in March.

Operator

[Operator signoff]

Duration: 37 minutes

Call participants:

Cody Slach -- Director of Investor Relations

Bruce Young -- Chief Executive Officer

Iain Humphries -- Chief Financial Officer

Andy Wittmann -- Baird -- Analyst

Tim Mulrooney -- William Blair -- Analyst

Brent Thielman -- D.A. Davidson -- Analyst

Steven Fisher -- UBS -- Analyst

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