Good morning, ladies and gentlemen, and welcome to the Arcosa Incorporated Third Quarter 2020 Earnings Conference Call. My name is Nicky and I will be your conference call coordinator today. As a reminder, today’s call is being recorded. Now, I would like to turn the call over to your host, Gail Peck, Senior Vice President, Finance and Treasurer for Arcosa. Ms. Peck, you may begin.

Good morning, everyone. Thank you for joining our third quarter 2020 earnings call. With me today are Antonio Carrillo, President and CEO; and Scott Beasley, CFO. A question-and-answer session will follow their prepared remarks. A copy of yesterday’s press release and the slide presentation for this morning’s call are posted at our Investor Relations website www.ir.arcosa.com. A replay of today’s call will be available for the next two weeks. Instructions for accessing the replay number are included in the press release. A replay of the webcast will be available for one year on our website under the News & Events tab. Today’s comments and presentation slides contain financial measures that have not been prepared in accordance with Generally Accepted Accounting Principles. Reconciliations of non-GAAP financial measures to the closest GAAP measure are included in the appendix of the slide presentation. Let me also remind you that today’s conference call contains forward-looking statement as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Please refer to the Company’s SEC filings for more information on these risks and uncertainties including our form 10-K, the earnings press release we filed yesterday and our Form 10-Q for the third quarter expected to be filed later today. I would now like to turn the call over to Antonio.

Thank you, Gail. Good morning and thank you for joining today’s call to discuss Arcosa’s third quarter results and our business outlook. Beginning with the key messages on slide 4. First, our highest priority has been the safety of our employees as we continue to operate in the COVID-19 environment. Our businesses remain fully operational as essential services, and we continually update our protocols to meet or exceed CDC guidelines and ensure the safety of every one of our employees. We’re grateful to our employees and our communities for the dedication during this challenging time. Next, Arcosa results continued to highlight the resilience of our business model and the repositioning of our Company around infrastructure products. Double digit growth in revenues and EBITDA was led by strong performance of our Construction Products segment. We executed well in the third quarter despite a record hurricane season causing some revenue and profit headwinds, and ongoing challenges associated with the pandemic. New order activity was mostly positive. Construction activity remained healthy and would have been stronger had weather events not been so prevalent. Additionally, we booked $154 million in wind tower orders, and we have seen increased project-based wind tower inquiries. For utility structures, demand remains robust and our primary constraint remains production capacity. Demand for traffic structures in our new Florida business has exceeded our expectations. Our Mexico business received good orders for infrastructure projects. In the liquid barge market, utilization rates continue to be low for our customers, but conditions in the dry cargo market have improved, with higher grain volumes and freight rates and very attractive steel prices. Even though we only received $18 million in new orders during the quarter, in the last few weeks, we have seen significant improvement in inquiries and have closed $32 million of additional…

Thank you, Antonio, and good morning, everyone. I’ll start on slide 9 and review our segment results from the third quarter. Construction Products revenue grew 27% to $147 million. And adjusted EBITDA increased 40% to $36.8 million. Both revenue and EBITDA were roughly even versus this year’s record second quarter, despite an extraordinary number of major weather events in Houston and the Gulf Coast that impacted construction activity and our operations in those areas. Segment EBITDA margin of 25.1% was up roughly 250 basis points from last year’s third quarter, a result of strong execution by our operating teams. I’ll give a few highlights from the quarter. Our Cherry business in Houston performed well, despite major weather events. Both recycled aggregates and natural aggregates have grown since last year, and we are expanding our reserve positions to continue growing in the attractive Houston market. In our legacy natural aggregates business that serves construction markets, volumes were up at a healthy level versus last year as we supplied major infrastructure projects and the Texas triangle experienced strong residential activity and benefited from several bolt-on acquisitions. We also improved margins significantly through operating efficiencies, lower maintenance costs, and lower fuel costs. Our mix shift resulted in a lower ASP, but gross profit per ton was up nicely. Our aggregate plants in South and West Texas serving the oil and gas markets, continued to be down versus last year, but were stable sequentially. We recorded an impairment charge of $800,000 as we right-sized our South Texas footprint and redeployed equipment to more stable demand markets. Our overall volumes in aggregates were roughly flat versus last year, as we replaced more volatile oil and gas exposure with more stable construction market exposure. Our specialty products business has also performed well, but has dealt with…

Thank you, Scott. Let’s turn to slide 15 for a discussion of our business outlook. Starting with Construction Products. The overall outlook for this segment is positive, and I’ll touch on three factors that underpin this outlook, attractive and market fundamentals, resiliency of margins, and a robust pipeline to deploy capital. First, infrastructure products -- infrastructure and residential markets have shown strong demand, which has offset softness in non-residential construction and COVID-related CapEx deferrals from our customers. The majority of the aggregates business is located in high-growth geographies, particularly Texas, where construction activity has remained robust. In the short term, lower state budgets could dampen infrastructure spending, but our federal stimulus plan including infrastructure investment could offer upside. We were pleased to see the one year extension of the FAST Act. Second is margin resiliency. A large portion of the construction segment costs are variable, which allows the business to adjust their cost structures as demand fluctuates. In the markets where demand has softened because of COVID, primarily lightweight aggregates and shoring products, we have been able to reduce our cost structure and maintain healthy margins. Even with slowdowns in those businesses, we were able to increase segment margins by 250 basis points in the quarter. Finally, we continue to be optimistic on our ability to deploy capital in aggregates and specialty materials, both organically and through acquisitions. An example of this disciplined capital allocation was the October acquisition of Strata Materials. The bulk of Strata revenue comes from recycled aggregates, which is a key area of focus for us that started with the acquisition of Cherry earlier this year. The acquisition is an excellent strategic fit with our current footprint as it brings on six new locations in the Dallas-Fort Worth market, including five recycled aggregates plant and one…

[Operator Instructions] And we will take our first question from Julio Romero with Sidoti.

I wanted to ask about the barge business. You mentioned that orders in October were better than in 3Q in total. What do you think is driving the uptick recently? And do you expect orders and inquiry activity to kind of remain at that same level in November and December, or maybe better than the pace in October?

Yes. This is Antonio, Julio. Let me give you some color on this. If you remember, we had a very good first quarter in orders and then after COVID hit, I think, like most businesses, our customers started looking at their CapEx and trying to figure out how to conserve cash. And that’s the first impact we saw people were trying to avoid large CapEx. And then, you had of course the uncertainty how much the merchandise was going to be moving on the river system. So, you have two different dynamics here. On the liquid barge, we said we have not seen an uptick in demand, we continue to see very slow inquiries. Utilization rates are very, very low. So, that’s why we’re saying that it’s going to take longer to recover. On the dry cargo side, you’ve seen a very healthy crop, you’ve seen China importing more grain, and they’re still far away from the target that they have set. Rates have gone up. The opening of the Illinois river in October is going to help. So, I think there’s a lot of positive signs for the dry cargo market. And if you remember, over the last five years, the dry cargo market has been the one that has replaced their barges more slowly. So, there’s more potential for replacement in the dry side and in the liquid side. And that’s why because of this uncertainty on the amount of orders that we will receive, and we are positive in the ones that we’re receiving, we continue to see inquiries as of this morning. I think, that’s why we said that our priority is to remain flexible in our production footprint, so that we can react when our customers need us to deliver these barges. Because if you remember in 2018, when demand picked up, we were not ready and we were slow to ramp up, we need to ramp up much faster, and that’s the forces we have going forward.

Got it. And nice job on the cash flow in the quarter. I think, you mentioned in your prepared remarks about extending payables, working to extend payables to more of industry norm. So, can you just talk about that? And is days payable in that mid-30s range kind of where you expect to be in the future?

Sure. Julio, this is Scott. I think, the biggest thing we’ve done is create a focus on cash culture, where everybody is very-focused on cash, when we spun off from our former parent company, that hadn’t been a priority. And so, over the last two years, we’ve been trying to build the cultural foundation. We’ve seen a lot of success and we generated about $170 million of free cash flow this year, thus far, $93 million in the quarter. I’d say we’ve made the most progress in our accounts receivable. We have made progress in accounts payable, have room to go. And then, inventory remains probably the biggest opportunity, where it’s a little harder to get, because it involves more full kind of operational redesigns but we think that we have opportunities in inventory too. So, across inventory and AP, I think, we still have room to improve working capital and we’re optimistic that we can do that next year.

I appreciate the comprehensive answer. I’ll hop back into queue.

Thanks.

And we will take our next question from Bascome Majors with Susquehanna. Please go ahead. Your line is open.

Yes. Thanks for taking my questions. You made some preliminary commentary on next year in the wind tower business. I was hoping that we could pull it back a little more. And at least for those businesses, where you do have backlog and some visibility, just directionally think about what next year might look like, or at least start like from where we sit today.

Sure. Bascome, let me give you some color on -- we’re still in October, almost the end of October. So, we still have ways to go. We haven’t even done our budgeting. So, it’s hard for me to give you a lot of color. But, I’ll tell you where things are playing out and how I see our markets for 2021, just directionally. We’re very, very positive on our construction segment. We will have Strata for the full year; we will have all these small acquisitions that we did for the full year. And, we have organic growth. We’ve invested in the Houston area, Scott mentioned. We’re investing around the Dallas-Fort Worth area, we’re investing around some of their operations. And the shoring business is looking better than -- we had a really bad year, it doesn’t show in our numbers, because some of our businesses have done fantastic. But our lightweight aggregates that are showing progress did not do well in terms of revenue and growth. They kept their margins, and that’s what we liked, but they did not have a good year. And they’re struggling because of a lot of COVID project delays, especially in the areas where they’re located. So, I think, the construction segment, if you put all of those together, we’re very positive about growing it in 2021 at a very healthy level. On the energy side, we have -- as we said, our utility structure continues to be strong, and we continue to see it as a very strong market for 2021. We will have our acquisitions for the full year next year, which will allow us to grow there. We have these projects to replicate these acquisitions in other areas. So, you will see us deploy capital there. And, we have the new…

That’s tremendously helpful. And I appreciate your candid discussion before you’ve gone and set your budget. One more and then I’ll pass it on. I recall, with the nature of a tax free spin, there’s some limitations, at least at the parent company with the IRS and what you can do from a capital allocation standpoint, until you hit that two-year anniversary. With that two-year anniversary for Arcosa as a spin-co, was anything restricted in the last two years? And starting next week, as you lap that, is there more optionality or opportunity on some things you can do with capital allocation next week that you couldn’t do this week?

I’m not alone in the room, Bascome. But, I’ll tell you that the -- there were some limitations from the tax to allow the spin-off to be tax free. I will tell you that there were -- there’s quite a bit of limitations. The biggest limitation we had was on the Energy Equipment segment, which is what’s considered our main segment as we spun off, because of its size. But, there were some other limitations. What we mentioned in my remark -- prepared remarks is that we continue to be committed to simplifying the business, as we have discussed before. And I also mentioned that we have continued to move forward with our initiatives with the pandemic and everything. But, things have slowed down. And we didn’t expect, for example, the drop in the rail market as fast as it did this year, starting last year and some of the things that have slowed us down in making some decisions. So, the comment I can tell you is that I think after November 1st, we -- a lot of limitations go away. But, that has not been the primary, let’s say, bottleneck for us to do things. I think, it was there, but it was not the primary focus. I think, the business conditions have to be what drives us. And the business conditions have been relatively uncertain over the last year or so. But, we are still committed with what we said day one from the spin-off.

Thank you very much.

And we will take our next question from Stefanos Crist with CJS Securities. Please go ahead. Your line is open.

Good morning and thanks for taking my questions. First, you talked about operational challenges and utility structures business due to COVID. Could you go in a little more detail on what those challenges are, and maybe how long you expect those to linger?

Sure. Stefanos, this is Antonio. Let me give you some color. And, the challenges were mainly in the first half of the third quarter. They’ve been improving since then. But, two of our big plants were in communities where COVID was -- COVID cases were going pretty significantly. And we had to isolate a lot of people because of that. And, as you start isolating people, absenteeism goes up tremendously. And even though you don’t realize it, but we try to operate in a very lean organization. So, we don’t have a significant backup. If you send five people home in a certain area, you don’t have people to substitute them. So, we really were -- two of our plants were basically brought to their knees for a few weeks. And since then, things have improved. So, those two plans have started to come back. And in September, they behaved much better than August and July. So, I think, we’re moving ahead. And we are mostly out of the woods. So, things are starting to perform very well again. But, that’s one of the examples of what COVID can create for one of your plants, if something happens in the communities, mainly in the communities, and then they bring it into the plant. So, I think that was the case. But, it did impact us pretty significantly in our utility structure for the quarter. We are optimistic and we’re very positive on the fourth quarter in our utility structure. And the good news is that these are not like hotel rooms where you don’t sleep and it goes away. The orders are still there, the customers are still there, we need to deliver. So, that’s probably the good news around it.

Thank you. That makes sense. And then, could you maybe give us a little more color on organic growth, in aggregates?

Sure. So, Scott mentioned we have invested quite a bit in increasing our reserve base around Houston. Houston still has a lot of potential for us. When we bought Cherry, they had a very nice strategic plan laid out of how to expand towards the areas where Houston is growing. So, Houston has been one of our big -- organic areas. Around DFW, again, we continue to expand and we bought -- we’ve gone through some land acquisition mainly, but more the bolt-on acquisitions have been -- those are inorganic but have helped us. When you start combining a few bolt-ons, you start generating synergies between them that we consider that part organic. And then, on the specialty materials, as Scott said, I think, the highlight is our plaster business continues to grow. We saw a slowdown in the second quarter but it started to grow again. And we have nice organic opportunities there. So, overall, I would say that it’s been around Houston, Dallas and some of the specialty materials.

Thank you. And I’ll jump back in queue.

We will move next with Ian Zaffino with Oppenheimer.

Scott, I don’t know, if I heard actual organic growth number for the aggregates business. So, I wonder if you can maybe give that. And also maybe just -- can you talk about just the conversations you’re having with customers. I guess, Texas has a massive rainy day fund. Is that large enough to maybe cover them for the next couple of years, or how do we think about it, as we look into next year, and maybe to some states, to have budget shortfalls, but then they also have a rainy day fund. So, if you could maybe give us some color there, have people in the industry are like thinking about this and what your customers are saying? Thanks.

Sure. Ian, this is Scott. I’ll take those separately. So, on the organic growth rate in aggregates, we had roughly offsetting factors. So, the legacy businesses driven by strong construction market exposure was up, call it mid-single-digits in terms of volumes, that was offset by the oil and gas exposure that we had, primarily South Texas and West Texas. So, the two of those offset each other into roughly flat volumes. But, we talked about replacing the more volatile oil and gas exposure with more stable construction market exposure. So, we think that’s a better mix, even the volumes are roughly flat. On your second question of Texas fundamentals. I would agree with your premise that Texas is in a very good fiscal position. So, when we look at indicators, there’s a healthy state budget, there’s a $9 billion rainy day fund that comptroller said is not expected to have to be used, but could be used, if needed to, for this fiscal year. You’ve seen healthy population growth, particularly as de-urbanization has increased in Houston and Dallas, and the outskirts have been a beneficiary of that. We’ve seen major improvement in housing starts, particularly in Houston and Dallas. And as Antonio said, about two-thirds of our Construction Products exposure is in Texas. And we’re very bullish on the state and the fundamentals there.

Okay. Thanks. And then, just as a follow-up on the M&A front. You’ve been doing a lot of acquisitions. At the same time, the M&A market is relatively robust here. I mean, is this an opportunity to take advantage of anything inside the portfolio maybe to achieve the goals of making the business a little bit more, I guess, streamlined and a little bit more focused?

Yes. Ian, this is Antonio. Yes. As I said, we remain committed to that. So, there are opportunities. I think, there are opportunities to simplify the portfolio. And at the same time, we have really nice opportunities in the pipeline to deploy additional funds that we could get by simplifying. So, yes, I think, there are -- as I’ve said before and I am a firm believer, M&A has a life of its own. And sometimes it happens, when you least want it and sometimes it doesn’t happen when you more want it. It’s -- there’s always -- you need to do that. And at some point, I’m sure we’re going to have opportunities both on the buying side and the simplifying side. But, we remain committed to both and we made real appetite for both.

And we will take our next question from Bill Baldwin with Baldwin Anthony Securities.

Thank you very much and thank you for taking my call. Antonio, can you offer a little bit of insight into the utility structures market regarding -- how is split between your alliance customers or their alliance market and kind of the bid market? And where you see your most opportunity for Arcosa’s new business growth, say over the coming year or so?

Yes. Bill, I’ll give you some color on that. Historically, the business we have that we bought from -- in 2014, as part of trading is what mainly concentrated on alliance customers. And that has been the focus of the business. And I think, there’s several -- and we took out three big opportunities. One is, expanding our alliance customers, and we’ve been focusing on that. We have great opportunities to expand those. And I think I’m very excited about what I’m seeing and talking to the team about expanding that part of the business. The second one, probably the biggest by far is the bid market, because we have historically participated very little. As we expand our capacity, I think, the bid market has to be part of our portfolio where we play and part of our priorities to deploy some of our capacity there. It offers great things, it offers our volume, but it’s less reassuring. Let’s say, you have less visibility around it and therefore you have to be much more flexible in your manufacturing footprint to attack it. And that’s what we’re building. And then, the third piece of growth is expanding our product line to offer to both the alliance and the bid markets. And that’s why we’re expanding our bid -- our portfolio with these concrete poles, with distribution poles, with other kind of structures that they need. So, I think both markets are important. And if we add the additional product line to our opportunities, I think, we’re very, very excited about our future there.

Thank you, Antonio. That does offer some good insight. But, do you see the -- with the hurricanes being a negative obviously for a lot of operators, but do you see that as a impetus to demand for some of your utility tower products here, as you need to replace what’s been destroyed?

Yes…

Do you have meaningful market, I guess, is what I’m saying. Is that going to be a source of demand here in 2021?

That’s a really good question and something we don’t talk enough about. But, it’s -- weather events are becoming more and more prevalent. And there’s a few of our businesses that are very well-positioned to be very relevant in the rebuilding. One is the utility structures and distribution poles, as you said. All the structures in general, the one that we bought in Florida for traffic structures also gets additional volume. And also, our business around the Gulf Coast, Cherry and some of our average business, there’s significant demand that comes back when there’s weather events, you have to rebuild in -- especially in Houston, for example, the levees and all those things. There’s significant demand that comes from those. We’ve been preparing for those. I mentioned in the last conference call, we’re starting to import riprap from Mexico to try to help our business. So, I think, we’re optimistic. As I mentioned to Bascome in his question around 2021, the ups and downs of all of our businesses, we’re optimistic about 2021. And as weather events come, I think that’s an additional, let’s say, driver for our demand, some of our products.

On your acquisitions and traffic structures and telecom structures, your objective is to replicate that and expand the footprint to I guess a more national marketplace. What are the main challenges, Antonio? And taken those smaller, right now, where you have concentration in smaller markets and expanding that out to other markets in the country, what’s the main challenges of doing that?

It’s also a very good question. I think we -- the big challenge, if you look at the Company is to create a different structure, as we look at the markets. Commercial is a very different market. If you look at the traffic structure or the telecom structure, they’re very different market from utility. The commercial face of the Company has to be remained very-focused on each one of the markets. While the manufacturing piece is where we generate a lot of the synergies by putting these product through similar plant, has to be kind of a single source of manufacturing for the three markets. So, that’s -- the next challenge is to introduce these new products into our plants, to generate the synergies, while at the same time keeping the focus on our customers and the focus on the commercial aspect, very focused.

Does it involve having to go out and acquire new customers as you go into these new markets? Does it involve any kind of regulatory tests you have to pass for your products to go into different states and hotels? Do you have any new customer challenges and/or regulatory challenges with expanding this business?

Some of the plants, depending on the product line, some of the plants have to be certified for certain DOTs and some of the things. So, there are regulatory aspects that we have to follow. And that will take some time, but it’s nothing that we cannot do and we’re not used to doing. On the customer side, it’s like everything else, we just have to put our suit on and get our briefcase and travel to see the customers and convince them that we’re a good option and then prove that we are the best option.

I bet you can do that. Lastly, just -- you mentioned a number of times that storage business has large infrastructure projects in Mexico. Can you be more specific or offer color as to what the nature of those projects are?

Well, as you know, there is some strategic projects that the Mexican government is building. And those are large, specifically around the refining area, and there’s been some opportunities there that we are starting to capture. We are not selling -- we do not sell directly to governments, we sell everything through construction companies, large EPC. So, that’s -- our main focus is serving the large EPCs that serve the infrastructure market. So, we are not a direct seller to any specific project. We sell through large international EPCs.

We will move next with Justin Bergner with G.research.

I hopped on the call a bit late. So, I apologize if anything here is redundant. On the barge side of the business, you had positive comments about the outlook for dry barges, but it doesn’t seem like that filtered through into orders in the quarter. And so, I guess, any color there would be helpful. And, what does the rising steel price mean, if anything, for that -- for the dry barge market?

So, Justin, this is Antonio. Let me mention. The dry -- as we said in the prepared remarks, the quarter was very slow in orders. We received additional orders afterwards. And we continue to receive inquiries, as I said, even to this morning. So, we’re more optimistic on the dry cargo market. We’re still in the pandemic. So, I think, a lot of the customers have still some reservations around when to deploy their capital into additional CapEx. But, the dry cargo market has very specific dynamics that are positive. Grain exports that’s going to China, China buying more, rates are up, river reopening, a lot of positive things are happening there. Over the last six months, we’ve had really positive steel prices, as you mentioned. When you look at the steel prices, we’re going through a very interesting time, where the main -- when you hear steel prices are going up, it is mainly on the coil side. So, over the last six months, there’s been a complete, I would say, a reverse trend of what traditionally has happened. Plates have been historically more expensive than coil. And over the last six months, that has reversed. Today, coil is the one that’s going up, and plate has remained relatively flat. I personally believe that plates continue to be very -- very, very attractive prices at where we are today. And that’s why we’re saying that for us, steel prices continue to be a positive thing for barges. It still continues to go up and it reflects on the plate size, then of course, high steel prices are not good for barges because a significant portion of the cost of the barge. But overall, we’re very positive on the dry cargo market. As you said, we don’t have enough orders yet for 2021 to keep those at full capacity. That’s why we said we’re reducing our production. But, at the same time, we also said we’re keeping our three plants open because we believe so strongly in the fundamentals of the market that we have to be ready when demand comes back.

Okay. That makes sense. Understood. Shifting to Energy Equipment. Again, if you’ve already answered this question or it’s in your prepared remarks, just let me know and I’ll go back and review the transcript. The orders seem predominantly weighted towards wind tower deliveries in 2021. I mean, I guess, it doesn’t imply sort of as much orders on the utility structure side. Is that just sort of idiosyncratic quarter-to-quarter behaviors? Should I read anything into that?

Yes. I think, the -- let’s say, the thing to remark is the wind towers. The utility structure continues to be very strong. I think, we had a good quarter for orders in the utility structure and the other small business we bought. One thing to remember in the utility structure is that a lot of the orders we received that I mentioned in the previous call to Bill, from alliance customers, because they are blanket orders for the year and those have specifics. We cannot consider them part of the backlog. So, they become backlog, once we have enough details for us to consider them. So, on the utility structures, a large portion of the work we have committed for 2021, for example, is not considered in our backlog. And it will be considered as we define more specific with our customers, their needs, the timing, the pricing et cetera. So, on the wind tower side, it’s the other way around. It’s very specific. So, we can consider it part of the backlog, because it’s very specific prices, timing, deliveries, et cetera.

Okay, understood. And then, lastly, I guess, you’ve done a lot of M&A activity in the recent 12 months. And, are we in sort of a digest phase? Is there more that you want to do in the near-term, or is there more you can get done before end of the year to take advantage of any tax-oriented sellers? Any color there, if you haven’t already addressed this question? Sorry, if you have.

No. I think, we are -- the good news is that we’ve done a lot of M&A, mostly this year, the big one was Cherry, and then the recent one from Strata. And those are very similar businesses in locations that are relatively close. I’m never worried about our ability to digest these things, because we’re not buying anything outside of our competency or outside of our normal reach, let’s say. We’re not buying something that we don’t understand. So, I think, as long as you see us continuing to buy things that we understand and that we are focused on, I think, the sizes on the deals we’ve done are very digestible, and we are in good shape. Of course, the more time we give our team to digest them, the better. But, we also see some opportunities to continue to do M&A. I wouldn’t say that for the next few months you should expect something big, we need to digest Strata and get that going and start pulling it out. But, we still have appetite for M&A.

Okay. And if it looks like the tax regime is going to change sort of coming -- looking forward a week from now, do you think there’s some bolt-on deals that would tax orient sellers that you might be able to get done before year-end? I’m just sort of curious to hear your perspective there as an industrial concern?

That’s what we hope. I mean, we -- that’s one of the things we’ve been discussing, how much especially small or medium sized private companies, we’ve seen some conversations from those sellers saying, look, I’d like to get it done before the end of the year. They might want that. But, of course, at the same time, we have to be very-disciplined and very, I would say, cautious about doing our due-diligence, and those are the things we need to be doing. But, I can tell you, we don’t have a line of people outside waiting for us to do it before the end of the year. That’s not the case.

And then, lastly there, are you seeing -- I mean, when you do these deals, who have you competed against to buy the companies, you’re buying or the bolt-ons that you’re buying, to the extent you have a reasonable sort of intuition there?

Yes. We’re all in the bolt-ons, it’s more relationship-oriented where you develop a relationship with the seller, and I would say most of them, we’ve been the only company that we reach a fair price that we feel is fair for both sides and we all do it. When you go to the bigger companies, we have seen in some cases, some of the big names in the industry. But, as we go to the smaller and medium size, it’s been mostly a handshake agreement that we come to and then we come to terms on pricing and then we move along together. I think, that’s been the history. And the big deals, of course, you see big companies involved. When you go to smaller ones, it’s more -- and that’s why we like those things, because we don’t -- prices don’t get crazy.

And we will move next with Zane Karimi [ph] with D.A. Davidson.

Juggling for a quick little follow-up color and apologies if this has already been covered, jumping on a little late as well. But, can you talk to the Construction Products Group activity for the quarter? And specifically looking around the pricing and demand dynamics of how they may have shifted from the beginning of the quarter to the end?

Sure. This is Scott. So, I think the big headline from Construction Products in the quarter was our 250 basis-point improvement in margins. So, we talked a bit about volumes being up in our construction market exposure, down in oil and gas exposure, some softness related to COVID in our lightweight aggregates, in our shoring businesses. But, we’re most pleased with the margin improvement, despite some of those headwinds. Aggregates, we had strong improvement from operating efficiencies, lower fuel costs and maintenance expenses. Cherry was able to do very well despite weather events. And so, overall, it shows the resilience of the portfolio in the quarter when you have some softness to be able to improve margins like we did.

We have no further questions at this time. I would now like to turn the program back to Ms. Peck for any closing remarks.

Thank you, Nicky. And thank you everyone for joining us today. We look forward to speaking with you again next quarter.

And this does conclude today’s program. Thank you for your participation. You may disconnect at any time.