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Concrete Pumping Holdings Inc (NASDAQ:BBCP)
Q3 2020 Earnings Call
Sep 09, 2020, 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 third quarter fiscal quarter ended July 31, 2020. 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 ahead. I'd 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 -- External Director of Investor Relations

Thanks, Kevin. 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. 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 Holding Inc.'s publicly 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 discuss adjusted EBITDA and net debt, which are non-GAAP financial measures. Adjusted EBITDA, adjust reported EBITDA for certain items. We believe the presentation of this non-GAAP financial measure is useful because it provides investors and industry analysts the same information that we use internally for purposes of assessing our core operating performance.

Net debt reflects all principal amounts outstanding under debt agreements less cash. Cash is subtracted from the GAAP measure because it could be used to reduce the company's debt obligations. We believe this non-GAAP measure provides useful information to management and investors in order to monitor the company's leverage and evaluate the company's consolidated balance sheet. For a reconciliation of both of these measures to their most directly comparable GAAP financial measure, please refer to the press release issued today or the investor presentation posted on the company's website.

I'd like to remind everyone that this call will be available for replay later this evening. A webcast replay will also be available via the link provided in today's press release as well as in the company's website. Additionally, we have posted an updated investor presentation on the same 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. As our third quarter results demonstrate, we continue to navigate COVID-19 from a position of strength, which is a testament to our great employees, the resiliency of our business model, and our highly variable cost structure. Our team continues to show exceptional leadership, resourcefulness, and collaboration as we address this unprecedented event. I remain incredibly proud of our employee morale throughout the organization as our team seamlessly adapts to new health protocols and remains focused on serving our many stakeholders.

Our employees continue to demonstrate a high degree of engagement in the work and empathy for our clients during these uncertain times. The proactive safety measures I laid out during our last earnings call are still in place and have served us well as we've continued to experience minimal disruption in our operations. Diving into our Q3 performance, revenue and EBITDA were essentially flat despite COVID-19-related shutdowns in the U.K. and softness in a few of our markets.

Our concrete waste management services business performed particularly well, growing by double digits. Again, I'm incredibly proud of our entire team, given that they were able to maintain consistent year-over-year operating performance despite a substantially more challenging macro environment in 2020. Let me summarize the components of our revenue performance a bit further. Our U.S.

Pumping business remained fairly resilient in the third quarter. Markets like Seattle, which experienced a significant drop in revenue during our second quarter that recovered quickly, continued to run at pre-COVID revenue levels for most of Q3. We experienced growing demand across our residential market and expect that to continue to strengthen in the near term, as evidenced by strong housing starts data in the majority of our geographic markets. Our Eco-Pan business, which we define as U.S.

concrete waste management services in our filings, was the real standout of the quarter, growing organically revenue by 18% and adjusted EBITDA by 34%. In addition to steady organic growth and improved operational effectiveness that continues to drive this business during the quarter, we launched roll off services in several locations. The service is comprised of a larger container than our legacy offering and has moved with a roll-off or hook lift truck. It is intended to service larger-volume pickups where Apple space is available compared to the compact nature of our standard Eco-Pan offering.

While this isn't the route density play of traditional Eco-Pan, it allows us to increase our revenue penetration with a complementary concrete waste removal solution that remains superior to other historical alternatives the contractor had at their disposal prior to Eco-Pan. We -- we're obviously pleased with Eco-Pan's performance during the quarter, and we are confident market tailwinds will remain. In fact, during the quarter, we invested an additional capex to have the equipment necessary to fill strong demand. Iain will walk through capex in his section, and we are pleased to -- we have the equipment to go to attack this exciting market.

The offset to this revenue performance was continued softness in our U.K. market as a result of continued lingering effect of COVID-19, which drove substantial curtailment of business operations during May and into -- during April and into May. We noted at last quarter's call that the U.K. was performing at roughly 60% of the revenue capacity that we would normally expect.

That has improved to roughly 80% and in the third quarter, so a nice sequential improvement, but still room for further recovery. We aren't expecting any structural demand constraints that concern us long term. We believe it's simply a market that is slower to recover from COVID-19 when compared to what we're experiencing in the U.S. We have begun a modest amount of work on the HS2 project, but not enough to change the revenue dynamics near term.

Of course, it still represents an enormous opportunity for our business, and we are well-positioned to capitalize when work begins in earnest and -- which we anticipate to occur in the first half of fiscal year 2021. In addition, in our U.S. Pumping business, there are a few markets that experienced project delays due to COVID-19-related reasons. We are confident most of these projects will come back and include things in retail and hospitality space.

The diversity of our revenue often shows the most value in times of uncertainty, and we are currently seeing that today. As I mentioned, Eco-Pan continues to gain momentum. Our infrastructure business, which we define as anything publicly funded, remains resilient, and our residential business is strengthening. Putting this together, we believe flat revenue growth was a good outcome in a challenging market.

I'm also pleased to report that we're able to show the value of our roughly 70% variable cost structure. This showed most prominently in our ability to maintain a 39% adjusted EBITDA margin. As Iain will highlight, this was also aided by proactive measures we took across the organization to rationalize variable expenses. All of this was accomplished by continuing to strengthen our balance sheet.

With our continued commitment to strengthen our balance sheet, we reduced net debt by $17.5 million during the third quarter and have access to $43.5 million of total liquidity as of July 31. Our healthy operating cash flow and no near-term debt maturities had us continuing to feel comfortable with our liquidity during these uncertain times. Now I'd like to hand the call over to Iain, so he can provide a detailed overview on our third quarter financial results. I'll then return to provide some color on our market expectations for the remainder of the year.

Iain?

Iain Humphries -- Chief Financial Officer

Thanks, Bruce, and good afternoon, everyone. Moving into our third quarter 2020 results. We generated Q3 revenue of $77.1 million compared to $78.7 million in the same year-ago quarter. The slight decline was largely due to lower revenue in our U.K.

segment as a result of the continued market softness from COVID-19. This was offset by the strength of our 18% organic growth in Eco-Pan and resiliency in our U.S. concrete Pumping operations. In the third fiscal quarter, revenue in our U.S.

concrete pumping segment mostly operating under the Brundage Bone brand, increased slightly to $58.6 million from $58.4 million in the same year-ago quarter. On an organic basis, which removes the results from capital in both periods, revenue in Q3 was consistent year over year. Q3 2020 revenue in our U.K. operations operating largely under the Camfaud brand was $9.2 million compared to $12.5 million in the same year-ago quarter.

Construction volume reduction is due to a slower recovery from COVID-19 was a driver of the decline. As Bruce mentioned, the U.K. is currently running at approximately 80% of our pre-COVID revenue run rate. As we anticipate a temporary return to full revenue capacity in the U.K.

region, we believe we have ample runway for long-term market share expansion, including the multi-decade high-speed rail project, HS2. Revenue in our U.S. Concrete Waste Management Services segment, operating under the Eco-Pan brand increased 18% to $9.4 million in the third quarter. This was driven by robust organic growth in the majority of our markets and high utilization of our assets.

We also experienced strong growth in our next-tier markets as we continue integrating the Eco-Pan service into our concrete pumping footprint. At the end of Q3 2020, pans in the field, which is a leading indicator for future pickups, were 11% higher when compared to the same year-ago quarter. As Bruce referenced, our Eco-Pan operations benefited from the continued investment and growth in roll off services in several locations, which allows us to service larger volumes than our established small and large pan services. Turning back to our consolidated results.

Gross profit in the third quarter was $37.8 million compared to $39 million in the same year ago quarter, and gross margin declined 60 basis points to 49% as improved revenue pricing, more favorable fuel costs, and continued improvement in our supply chain procurement costs did not fully offset the slight decline in revenue. General and administrative expenses in Q3 were $27 million compared to $28.2 million in the same year-ago quarter. The 4% cost reduction was largely due to lower amortization of tangible asset expense and reduced variable G&A expenses, such as travel costs. Net income available to common shareholders in the third quarter of fiscal year 2020 was $2.5 million or $0.04 per diluted share compared to $2.3 million or $0.05 per diluted share in the third quarter of fiscal year 2019.

Finally, adjusted EBITDA in the third quarter was $30 million compared to $30.6 million in the same year-ago quarter. Adjusted EBITDA margin remained consistently strong at 39%. In our U.S. Concrete Waste Management business, adjusted EBITDA improved 34% to $4.8 million on the back of 18% organic revenue growth.

In our U.S. Concrete Pumping business, adjusted EBITDA was marginally down 4% to $21.2 million on slight revenue growth. And in our U.K. business, adjusted EBITDA declined by $0.9 million against approximately $3 million drop in revenue.

Despite the lower trends, we are proud of the cost containment and margin control coming out of the U.K. during a slower demand environment. The healthy and consistent consolidated adjusted EBITDA margin in Q3 and EBITDA margin improvement year-to-date demonstrates the ability of our team to move proactively and with agility to successfully navigate through challenging times. Turning to the balance sheet.

We continue to prioritize our liquidity and cash preservation. Compared to Q2 2020, net debt in the third fiscal quarter was reduced by approximately $17.5 million to $395.3 million. This was comprised of $399.4 million in debt principal and $4.1 million in cash. We have no near-term debt maturities.

And as a reminder, our five-year ABL resolver -- revolver is in place until December 2023, and our seven-year term loan facility matures in December 2025. These debt instruments are also covenant-light. We have no financial covenants on the term loan and our ABL has a springing one-to-one fixed charge ratio based on total excess availability. And based on our improving liquidity position, we believe we have significant headroom.

Cash preservation initiatives implemented since the onset of the coronavirus have helped us build approximately $43.5 million of total available liquidity as of July 31, 2020, which includes cash on the balance sheet and availability from the ABL revolver. As a reminder, our business generates healthy operating free cash flows as we invoice our customers daily for the work we perform. And we have minimal working capital requirements as we do not take ownership of the concrete we place. We believe our ability to generate strong operating free cash flows, along with our strong margins, provides us with the ability to de-lever and strengthen our balance sheet over time, even in the current environment.

We suspended uncommitted 2020 capex investment for a brief period during the height of the COVID-19 pandemic. However, as Bruce mentioned, the continued growth momentum in our Eco-Pan business supported strategic capex investments to fulfill demand. With the continued strong performance of U.S. Concrete Pumping, we also took the opportunity to selectively improve the age of our concrete pumping fleet.

We will continue to apply prudent capital deployment and remain opportunistic with other capex investments in our fourth quarter. With our cash and liquidity focus, we are pleased that we've been able to reduce our net debt position by approximately $38 million over the past two quarters while being able to strategically invest in equipment to position our operations for growth. The resiliency of our business, the highly available component of our costs, and our revenue diversity are also strong components of these results. We continue to believe we are well-positioned to navigate the evolving impacts of the COVID-19 environment, and we are fully prepared to leverage an economic recovery.

However, given the lingering uncertainty about the duration and timing of the economic recovery associated with the COVID-19 pandemic, we are not currently prepared to provide guidance for the last quarter of 2020. The combination of our healthy operating cash flow, highly variable cost structure, and ample liquidity with no near-term debt maturities, puts us in a position of strength as we manage the business through the pandemic, while opportunistically investing for growth. With that, I will now turn the call back over to Bruce.

Bruce Young -- Chief Executive Officer

Thanks, Iain. I now want to make some broad statements about how we view the remainder of our fiscal year playing out and how CPH will leverage its strength to succeed moving forward. We remain cautiously optimistic about the demand environment for the remainder of our fiscal year. Our diversified revenue and customer base create opportunities for growth, particularly in areas where we're currently experiencing incremental market share gains like Eco-Pan and residential construction.

We look forward to our continued execution in these markets while appropriately balancing debt paydown and investment opportunities to support the long-term growth of the business. While some projects are experiencing delays, for the most part, our projects are expected to move forward, and the bidding environment is still relatively healthy. However, we are taking a cautious approach to our growth expectations while still remaining optimistic. We still expect to report year-over-year revenue growth in our U.S.

concrete pumping, but at a lower rate than originally contemplated in our full year revenue outlook earlier this year. However, given the strength in Eco pan, we now expect our waste management services segment to actually grow faster than the 11% to 17% top line rate contemplated in our original outlook. For perspective, the segment is up 21% year-to-date. In our U.K.

market, pace of recovery has turned out to be slower than the U.S. As such, we now expect this market to continue to recover into our fiscal year 2021. And while it's difficult to know when normalized business returns throughout the world, we remain confident that our company is well-positioned for the recovery. We have strengthened proactive measures to enforce our variable expense structure and remain focused on managing cash flow.

Our highly variable cost structure makes us well-positioned to accelerate growth and drive profit when conditions stabilize. We also have a solid balance sheet and improved liquidity, no near-term debt maturities, and covenant-light debt facilities. Our healthy operating cash flow characteristics position us well to safeguard liquidity and to service our debt obligations. We have an unrivaled geographic footprint in the U.S.

and the U.K. as well as highly diversified end market exposure. In closing, we wish you your colleagues and everyone's family the very best during these trying times. We're living through complex and dynamic times, and our entire team is highly committed to maximizing shareholder value, supporting our talented employees and our partners in the coming months ahead.

With that, I'd now like to turn the call back over to Kevin for Q&A.

Questions & Answers:


Operator

Thank you. [Operator instructions] Our first question today is coming from Sam Kusswurm from William Blair. Your line is now live.

Sam Kusswurm -- William Blair and Company -- Analyst

Hey, Bruce. Hey, Iain. Hope you guys are doing well.

Bruce Young -- Chief Executive Officer

Hi, Sam.

Sam Kusswurm -- William Blair and Company -- Analyst

So, can you guys update us on how the current backlog looks relative to pre-COVID levels? And if it is pretty stable at this point? Or if it is trending higher as the quarter progress?

Bruce Young -- Chief Executive Officer

Yes. So, what we're seeing, Sam, is things are very stable, not really growing, fairly consistent. The bidding activity is similar to what we had seen a year ago. And so that's where our outlook for, you know, the remainder of the year is to remain flat, and then we'll continue to watch it as we go into next year.

Sam Kusswurm -- William Blair and Company -- Analyst

Got you. Thanks. And then maybe pivoting to Eco-Pan. You mentioned the new roll-off options within the Eco-pan business.

Can you expand on the market opportunity for this larger bucket and the margin profile it has compared to the business' original offering?

Bruce Young -- Chief Executive Officer

Yeah. You might have seen in our investor presentation that the -- if every concrete placement had a concrete wash-out system, it's about an $850 million market. Now our Eco-Pan offering that we have in most of our locations is a smaller container that fits in very tight congested areas on shop sites. Largely to clean out concrete pumps and ready-made trucks and other tools on-site and contain the water.

The roll-off containers we've used in other markets. It's a larger container that can take higher volumes of debris.Now it's not, as I mentioned in the script that it's not a route density business like our pan service where, you know, it's kind of the milk route where the more pickups, we can pickups and drop-offs we have every time we send a truck off, the better our margins are. With roll outs, it's one large container at a time, but it's the same customer base. That has a need for both type services.

So, we're trying to introduce that in as many markets as we can currently, and it's been doing quite well for us.

Sam Kusswurm -- William Blair and Company -- Analyst

Great to hear. And then maybe just one follow-up. Do you have plans to open additional Eco-Pan branches over the next few periods here? And if so, are there any areas you're hoping to target specifically?

Bruce Young -- Chief Executive Officer

We haven't announced any new areas we're going into. We've spent the last year -- we had moved into a lot of new locations in 2019, and we've spent the last year refining and building up those locations, and that's where you've seen our margin improvement as we've created that density in those areas. We still believe there's a lot of room in those current markets. And we are contemplating other new markets, but we're not ready to release those areas yet.

Sam Kusswurm -- William Blair and Company -- Analyst

OK. Perfect. Thanks, guys.

Bruce Young -- Chief Executive Officer

Thank you.

Operator

Thanks. Our next question is coming from Andrew Wittmann from Robert W. Baird. Your line is now live.

Andrew Wittmann -- Robert W. Baird -- Analyst

Thanks. I was wanting to just dig in a little bit to the end markets, particularly in the U.S., it sounds like there's a little bit of a dynamic happening here that's pretty well-known to the investment community about residential markets being very strong. In commercial, I think there's some concerns in the investment community about the strength of the commercial market. So Bruce, I guess the question is this, is the growth rate that you're seeing for your residential business, which is about half the size of your commercial business, sufficient to offset any declines that could occur or maybe are occurring from the delays that you're seeing today in the hospitality and retail markets? In other words, is -- do you think the growth rate in residential could be two times that of commercial?

Bruce Young -- Chief Executive Officer

I do think there's going to be -- yes. Andy, I do believe that next year, there will be more opportunity in residential. Currently, what we're seeing is our residential, as a percentage of revenue, hasn't really grown that much quarter over quarter of what we had been experiencing. Our commercial markets are still quite strong.

Infrastructure still seems strong. We think there is some opportunity to increase our revenues with the residential as that markets became much hotter in most of our locations, and we're certainly targeting that. But the real question, I think that we're following most closely as where the commercial market goes. And currently, it's been fairly stable for us.

Andrew Wittmann -- Robert W. Baird -- Analyst

Got it. And then I guess I wanted to dig in next a little bit onto the U.K. business. I heard your comments about -- it just seems like it's a little bit slower recovery from the COVID impact there than it has been in the U.S.

I was just wondering if you could put a little bit more meat on that bone and talk about the dynamics that you're seeing in the marketplace that gives you the confidence to say that? In other words, is there maybe longer-term economic damage from the COVID impact? Or is it just really purely a reopening timing where things are reopening slower? Just trying to understand your thoughts behind that would be helpful, I think.

Bruce Young -- Chief Executive Officer

Yeah. So currently, we're seeing things reopening slower. Scotland wells have been slower to reopen, and the city of London itself has been a little slower to reopen. And so, the market seems fairly strong for next year.

You know, we've talked about HS2 and the impact that, that will have. Hinkley Point still been a very good project for us there. I think once London and Scotland wells get opened up to their full capacity, I think our revenue should get back to what our normal expectations would be.

Andrew Wittmann -- Robert W. Baird -- Analyst

OK. That's helpful. Sorry, I've got one more kind of big-picture question than a technical one, but just on the infrastructure side of the business, there's been a lot in the popular press about state and local budgets. You know, you mentioned the infrastructure segment for you guys is anything that's publicly funded.

I was wondering what you're hearing from your customers and what your customers are hearing from the – from their budgetary folks as to what the impacts are today or could be in the future from the potential decline in tax receipts and if there's any impact on your business that you're seeing today or likely to see in the next few months?

Bruce Young -- Chief Executive Officer

Yeah. Again, our infrastructure revenue as a percentage of the total is still fairly consistent with what we would have expected. We're beating a lot of infrastructure work in certain areas. We're following them just state by state, just as you are, thinking about a federal supported fund that would come in, a bill that would fund that package into the future.

You know, clearly, we're following that as closely as we can in every city and every state. And while it's not a really big part of our business, it could be impactful in the states that are very -- that are better-funded with receipts.

Andrew Wittmann -- Robert W. Baird -- Analyst

That's all helpful. I don't want to forget about Iain. So, the last one is for you. I noticed in the EBITDA reconciliation bridge, there was a $3.1 million of other adjustments.

Given that there are other, I thought it would be worth giving you an opportunity to comment on what those were. Thanks.

Iain Humphries -- Chief Financial Officer

Yeah. I mean, the way that we look at the other adjustments on EBITDA, really anything that's nonrecurring or nonoperational. So those are consistent with other adjustments in prior periods, and -- but it's largely around any sort of restructure or nonoperational costs that are coming through the business.

Andrew Wittmann -- Robert W. Baird -- Analyst

Thanks.

Operator

Thanks. Our next question today is coming from Brent Thielman from D.A. Davidson. Your line is now live.

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

Hey, great. Good afternoon. Hey, Iain, could you comment on the net capex expectations for this year? I think originally, it was $35 million to $38 million. And then I think you thought that you might fall somewhere below that.

So, I just wanted to see where you thought that would stand at this point.

Iain Humphries -- Chief Financial Officer

Yeah. So, I mean, obviously, through the current year, I mean, obviously, as you know, we look at the free cash flow of the business. And given the nice surprise of strong momentum, and I mean, that's where we're looking at how we look at the capital allocation. So, through the year-to-date, it's around $30 million.

We haven't provided guidance for the fourth quarter. But as we said in our prepared remarks, as long as there is a strategic opportunity for us to invest in the growth of the business, then we'll continue to look at those. But really, it takes some comfort, first of all, about how well those investment levels support our expectations around free cash flow.

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

OK. And then as a follow-up to that and with, I guess, these larger buckets in Eco-Pan. Could you comment on the need to continue this pace of capex within that business in order to sustain this growth you've seen in that segment?

Iain Humphries -- Chief Financial Officer

Yeah. I mean, again, given that it's the highest-margin, highest-growth part of our business, again, as long as the returns on investments qualify for that investment, then obviously, we'll look at all those opportunities in that market. But I mean, we're very happy with not just the margin performance in the third quarter or year-to-date, but the expansion year over year. And that really qualifies a very nice payback and a nice cash flow from that level of our business.

So again, and Bruce mentioned this, as we look to weave that service into our concrete pumping footprint and get some operating leverage in there. I mean, that really provides us a good investment and criteria to continue that. A strategic part for the business.

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

OK. I appreciate that. Bruce, I'm wondering if you could elaborate on the market share gain opportunities. You mentioned that you're seeing in the residential construction business.

What exactly are you seeing there?

Bruce Young -- Chief Executive Officer

Yeah. So, we provide very good concrete pumping service. And we think it's second to no one else. And so, as we slow down in certain markets, it's up to us to go and improve our value to other end markets.

And it comes down to being available when they need us, being reliable so that when they have concrete there that they know that it's going to go into the forms and, you know, they won't have issues with the equipment. And if they do, we have the backup, having the specialty sizes of equipment that sometimes become advantageous to them in unusual circumstances. And so, as we have that capacity, we'll drive that message hard with residential customers and even try to gain share in the commercial market.

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

And I -- Bruce, is that across the country where you operate? Or is it specific areas you're really targeting?

Bruce Young -- Chief Executive Officer

That's across the country. In every one of our locations, we have targeted end markets and targeted customers. And we work on those things weekly. This isn't a new thing.

Now, when markets slow down, we accelerate that. And that's really where we're at right now, you know, with the uncertainty where next year's markets will be.

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

OK. Great. Thank you.

Operator

Thanks. Our next question today is coming from Steven Fisher from UBS. Your line is now live.

Steven Fisher -- UBS -- Analyst

Thanks. Good afternoon, guys. So, I know there's enough uncertainty to prevent you from giving a guidance, but can you just maybe give us a sense of the visibility that you do have in your various businesses at this point relative to the visibility you would typically have at this point? I don't know if that's sort of expressed in kind of months of opportunities or backlog or work. But just kind of curious how you feel your visibility is today versus typically at this point and kind of where those core uncertainties really lie.

Because it sounds like, you know, a number of your businesses still sound like you feel pretty confident about them.

Bruce Young -- Chief Executive Officer

We do. We feel like the remainder of this year, we'll go strong into next year. We are watching to see which projects get funded of the projects we're bidding right now, whether it's a federally or state funded job or whether it's privately funded job. We do have, you know, some concerns there, but our activity levels still seem relatively stable.

Steven Fisher -- UBS -- Analyst

OK. And I guess within your flattish revenues, you know, let's call it, in the U.S. Concrete pumping, how would you characterize for the quarter, what the market was versus market share to get to that flat? And what was volume versus price, if I missed it?

Bruce Young -- Chief Executive Officer

Yeah. So, our -- we didn't give numbers on volume versus price. Our rates have increased nicely during this quarter. You know, the markets were softer.

Some of the revenue that we created was because we got better rates on a lot of our projects, especially those that required specialty equipment. But we continue to -- you know, to drive price and value. And that's really what our customers are looking for from us.

Steven Fisher -- UBS -- Analyst

OK. Any way to, sort of, bracket what that pricing was, kind of like low single digits? Is that kind of what we should assume?

Bruce Young -- Chief Executive Officer

Yeah, Steven. I mean, that's typically what we see on the pricing is low single digits year-over-year. And then almost an equal amount on volume as well. But obviously, we haven't broke out for the current quarter.

But yes, low single digits on prices is fair for where we are.

Steven Fisher -- UBS -- Analyst

OK. And then, just lastly, can you just clarify what's implied by your comments for concrete -- U.S. concrete pumping for Q4. I thought you said that you're now looking at revenues sort of flattish for the year, which I think, presumably, if I heard that right, implies a decline in Q4.

But maybe I didn't hear that right. Can you just clarify what you're implying there?

Bruce Young -- Chief Executive Officer

Yeah. I mean, what we were talking about for the third and for the fourth quarter, if you look at the seasonality of our business, I mean, Q3 and Q4 are considered relatively comparable. Now, looking at what we mentioned on the flatness was actually year-over-year for the third quarter. But looking forward to the fourth, I mean, if you look at the seasonality of our business, typically, Q4, if you're looking for a guide, is relatively similar to Q3.

Steven Fisher -- UBS -- Analyst

OK. Got it Thanks very much.

Bruce Young -- Chief Executive Officer

Thank you.

Operator

Thanks. The next question today is coming from Alex Rygiel from B. Riley FBR. Your line is now live.

Alex Rygiel -- B. Riley FBR -- Analyst

Thank you. Lots of questions here so far taken. But can you comment on how the competitive environment has changed at all following COVID?

Bruce Young -- Chief Executive Officer

Alex, it's a little bit market by market. Some markets really haven't changed that much with COVID. Others have. And so, we look at the different geographies in the different end markets, and it's a little bit all over the board.

Alex Rygiel -- B. Riley FBR -- Analyst

And then as we think about Eco-Pan, how should we think about the growth rate in 2021? The growth rate in 2020 is, you know, moving along very, very well. How should we think about modeling that for 2021?

Bruce Young -- Chief Executive Officer

Well, we really aren't giving any guidance right now for 2021, although we're very bullish on the opportunity.

Alex Rygiel -- B. Riley FBR -- Analyst

And as you look at the M&A environment, coming out of COVID, how has that changed? Or how has your view on M&A activity and how the acquisitions on near-term changed?

Bruce Young -- Chief Executive Officer

Going into COVID, we had an off -- a large backlog of opportunity for acquisitions. It hasn't really changed through COVID. Now as you know, we've been focused on de-levering, improving the balance sheet, which we have done a fairly good job of this year, and we'll continue to do. We will start looking at acquisitions more seriously and creating them on where the best opportunities are.

Alex Rygiel -- B. Riley FBR -- Analyst

Great. Thank you very much.

Bruce Young -- Chief Executive Officer

Thank you.

Iain Humphries -- Chief Financial Officer

Thanks, Alex.

Operator

Thanks. Next question is coming from Stanley Elliott from Stifel. Your line is now live.

Stanley Elliott -- Stifel Financial Corp. -- Analyst

Hey. Thanks, guys. Good afternoon. Thanks for taking the questions.

Bruce, on -- in terms of M&A, what sort of leverage do you want to get to? Do you have a bogey in mind before you'd start to look at M&A? Or is it just going to be more opportunistic on a go-forward basis?

Bruce Young -- Chief Executive Officer

We've certainly worked hard to get our leverage down to around 3.5 times. We'd like to get it a little bit below that. But there are some opportunities out there that actually could help us de-lever the business at the same time. And so, we're looking at those types of opportunities as well.

Stanley Elliott -- Stifel Financial Corp. -- Analyst

Did you talk about -- or did you all see any disruptions from weather either during the quarter or kind of in the month of August that would have impacted some of the U.S. numbers?

Bruce Young -- Chief Executive Officer

We have seen some weather, and we'll continue to see weather with the, you know, geographic footprint we have in the U.S. and the U.K. We're going to have weather somewhere all the time. We try to factor that into our budgets.

And we believe that because of that geographic footprint, it doesn't affect us as much as it might with a regional player.

Stanley Elliott -- Stifel Financial Corp. -- Analyst

And you all mentioned some uncertainties on the marketplace. Iain, could you remind us when you need to commit your capex for next year? I think in the last -- I guess, this year, it seems like forever ago, but this year, you had already committed a lot in terms of capex. And then we had the dramatic shutdown, and you were, kind of, you know, had already committed to that. What sort of flexibility do you all have in terms of spend for next year first? And then I'll have a follow-up.

Iain Humphries -- Chief Financial Officer

Yeah. So, what I would say on our equipment orders is, I mean, typically, we're thinking about what the needs are today. And -- but it's probably worthwhile that we define the commitment piece where, I mean, up until the point when an equipment is actually delivered. And we have the ability to work with the manufacturers because of our scale to make sure that we can achieve the desired outcome where need be.

And that's really the avenue we explored this year. So, we have -- I would say that we would have some flexibility around the commitment part. But in terms of when we think about what we might need, it's right about now is when we tend to start thinking about what our equipment needs as we go forward.

Stanley Elliott -- Stifel Financial Corp. -- Analyst

And do we think about, you know, the capital spend for the Eco-Pan business and the roll-off trucks? Do we think of that as you pulling ahead capex? Or is this incremental capex because this is a new opportunity for you. Just trying to balance that and free cash flow expectations.

Iain Humphries -- Chief Financial Officer

Yeah. I mean, what I would say the spend on Eco-Pan mean is all growth. I mean, it's a growth part of our business. We're not really in a replacement cycle yet in terms of the life cycle of that business.

So, it would all be growth capex for that business as it sort of moves forward.

Stanley Elliott -- Stifel Financial Corp. -- Analyst

Perfect. And then lastly, have you noticed any changes in your receivables? You know anything -- just curious kind of the financial health of some of your contractor base, how those guys are looking out?

Iain Humphries -- Chief Financial Officer

No, we have not. I mean, the team have collectively done an exceptional job on accounts receivable and really staying in front of it. We've got quite sophisticated signals in our business, and it's something that we stay very close to. So even through our sort of cash and liquidity focus, that's something that got, I would say, heightened attention, but I would say it's performed very well through this period and even better than prior to COVID.

Stanley Elliott -- Stifel Financial Corp. -- Analyst

Great. Thanks, guys. I appreciate it.

Bruce Young -- Chief Executive Officer

Thank you.

Operator

We reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Bruce Young -- Chief Executive Officer

Thank you, Kevin. We'd like to thank everyone for listening to today's call, and we look forward to speaking with you again when we report our fourth-quarter and full-year fiscal 2020 results in January. Thank you.

Operator

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation.

Duration: 43 minutes

Call participants:

Cody Slach -- External Director of Investor Relations

Bruce Young -- Chief Executive Officer

Iain Humphries -- Chief Financial Officer

Sam Kusswurm -- William Blair and Company -- Analyst

Andrew Wittmann -- Robert W. Baird -- Analyst

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

Steven Fisher -- UBS -- Analyst

Alex Rygiel -- B. Riley FBR -- Analyst

Stanley Elliott -- Stifel Financial Corp. -- Analyst

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