Concrete Pumping Holdings, Inc. Commitments Disclosure

Note 18. Commitments and Contingencies

  

Purchase Commitments

 

As of October 31, 2025, the Company was contractually committed for $35.5 million of capital expenditures for purchases of property and equipment. A majority of these obligations are expected to be satisfied in the next twelve months.

 

Insurance

 

Commercial Self-Insured Losses

 

The following table summarizes as of October 31, 2025 and 2024 for (1) recorded liabilities, related to both asserted as well as unasserted insurance claims and (2) any related insurance claims receivables.

 

			As of October 31, 2025				As of October 31, 2024
(in thousands)	Classification on the Consolidated Balance Sheets
Self-insured commercial liability, current	Accrued expenses and other current liabilities		$	11,134			$	12,210
Self-insured commercial liability, non-current	Other non-current liabilities			10,789				12,332
Total self-insured commercial liabilities			$	21,923			$	24,542
Expected recoveries related to self-insured commercial liabilities, current	Prepaid expenses and other current assets		$	954			$	3,155
Expected recoveries related to self-insured commercial liabilities, non-current	Other non-current assets			10,789				12,170
Total expected recoveries related to self-insured commercial liabilities			$	11,743			$	15,325
Total self-insured commercial liability, net of expected recoveries			$	10,180			$	9,217

 

The Company has accrued $10.2 million and $9.2 million, as of October 31, 2025 and 2024, respectively, for estimated (1) losses reported and (2) claims incurred but not reported, net of recoveries.

 

Medical Self-Insured Losses

 

As of October 31, 2025 and 2024, the Company had accrued $1.4 million and $1.7 million, respectively, for estimated health claims incurred but not reported based on historical claims amounts and average lag time. These accruals are included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets. The Company contracts with a third-party administrator to process claims, remit benefits, etc. The third-party administrator required the Company to maintain a bank account to facilitate the administration of claims.

 

Litigation

 

The Company is currently involved in certain legal proceedings and other disputes with third parties that have arisen in the ordinary course of business. Management believes that the outcomes of these matters will not have a material impact on the Company’s financial statements and does not believe that any amounts need to be recorded for contingent liabilities in the Company’s consolidated balance sheet.

 

Washington Department of Revenue Sales Tax Issue

 

Historically, the Company has not charged sales tax to its Washington State customers that provide a reseller certificate, treating this as a wholesale transaction rather than as a retail sale. Effective April 1, 2020, the state of Washington Department of Revenue ("DOR") published a rule which amended Washington Administrative Code 458-20-211, otherwise known as Rule 211, by designating sales of stand-alone concrete pumping services as solely retail transactions. The Company sought to defend its position that no sales tax should be charged for customers that provide a reseller certificate. As such, for the period from April 1, 2020 through January 31, 2024, the Company did not charge sales tax where its customers provided a reseller certificate and petitioned for declaratory relief from the amended rule.

 

In February 2023, the Company received an adverse ruling from the Thurston County superior court in Washington State regarding its position, which it appealed. As of October 31, 2023, no liability had been recorded in connection with this contingency as a loss was not deemed probable at that time.

 

In February 2024, oral arguments were heard in the Court of Appeals in Tacoma, Washington and the Company received an unfavorable judgement during the same month. As a result of this unfavorable judgment, the Company concluded that loss is probable and therefore recorded a loss of $3.5 million. The loss is included in general and administrative expenses in the Company’s condensed consolidated financial statements for the three months ended January 31, 2024. During the quarter ended January 31, 2024, the Company made a payment of $1.8 million to the DOR. Beginning with the second quarter of fiscal year 2024, the Company started assessing sales tax related to its customers in the state of Washington.

 

Letters of credit

 

The ABL Facility provides for up to $32.5 million of standby letters of credit. As of October 31, 2025, total outstanding letters of credit totaled $18.5 million, all of which had been committed to the Company’s commercial insurance providers.