United Rentals (URI) 29 Oct 202020 Q3 Earnings call transcript

Good morning, and welcome to the United Rentals Investor Conference Call. Please be advised that this call is being recorded.

Before we begin, note that the company's press release, comments made on today's call and responses to your questions contain forward-looking statements. The company's business and operations are subject to a variety of risks and uncertainties, many of which are beyond its control, and consequently, actual results may differ materially from those projected. These uncertainties is included in the Safe Harbor statement contained in the company's press release.

XX, description the and Form the company's the ended complete please possible XX-K SEC. more as year to well refer annual December a of filings other these risks, for to For subsequent as with XXXX, report on

that new no revisions You note reflect commitment order or or release filings any to forward-looking circumstances in www.unitedrentals.com. these no statements or to has access expectations. the company's update Rentals can at subsequent events, obligation to in website information, on Please United and makes changes publicly

press You the non-GAAP should to see also company's most release cash and note to and from as to reconciliation measure. such the Please call that flow, to the non-GAAP the the references EBITDA. Investor EPS, financial of measure EBITDA company's comparable adjusted recent include presentation free each financial adjusted today's GAAP terms, refer back

Matt and turn Financial and United may for President Chief Flannery, begin. today over call the I Officer; Executive Mr. Officer. Mr. to Rentals Flannery, Speaking Flannery. you Chief Graziano, will is Jessica now

and as Thanks as continuing and quarter you, recovery, our everyone. moderate joining quarter us. a about with pace. Thank a our markets. out saw morning, some we in observations the the frame good start I'll customers that operator, our What was will discussion for well third albeit at

for have this delivered potential pleased that up. And vaccine, term, we strong normal on COVID demand. visibility. since we a Near quarter, are I'm activity good future including hit, were first down markets said, That sentiment seasonality. with results Market a the customer volumes positive, impact in have is expect trends trending end term, line in improving. significant were and are environment. Our likely to we that looks year-over-year. the still events, Longer

arms we're operations. daily discipline have agility things and we control, showing the can in We our around and our

protocols. quarter, third for behavior time employees with it by It's safety recordable outperformed our guided where there and X. a or Gulf, our was interact And the in safely. when California, quarter, you or below own out other, another the help that their safe different a And every the saw we of COVID. each the our in our And numbers those the supplier, world is a fires or team we rate simply hard-fought in in a that with You expectations did now. with or customers, the turn win, right protocols just daily challenges factor storms in

through In I down. for costs. helps the margin. preserve give our revenue will the in few of as to one effort. for Rental highlights. first, Number margin. last few we Jess kudos team the And but take year, it because went went minutes, But percent quarter the a I'll their their up, most in made XX% about on discipline below operating that, is third our team quarter was So you our And touch SG&A revenue results. a volumes a controlling credit full of it's by the field that as

So controlling clearly, with we're variable being vigilant costs. our

isn't The cash ability our quarter is enough of September. reflect through cash visibility that in and EBITDA, higher key revenue, good a quarter full direction. impact it's on to Another right the sight for pandemic, model. in based produce year flow. free performance, definitely flow cash we've cash is of and offset targets our fourth quarter. guidance on a gives current to downturn the highlight return And of flow. normal free year-to-date the to And free over strength CapEx for updated third our the us XXXX but the it line to of generated billion And business our our significant $X We a seasonality

own another the Now helpful trend has are confidence demand. fairly as Used equipment up. indicator in our of in see We external broad-based continues sales our indicators. as sentiment looking surveys business America to improving operating recovery and at environment, customer customer been well North many

quarter last held year with Our used revenue used well. was sales essentially as from up third flat pricing and

path. sequentially power, activity and X oil were edged revenue positive technology rental our that everyone's pharmaceuticals, and So by vertical discipline been demand on And example flat. of noted us that data. an buying is increasing data centers, been fleet fleet facilities from steam. XX still in which have more last some fact, our in steady. can pronounced, and channel remain work. and about: region And essentially the biotech put they retail and little led saw the the gains levels. and see with a far segments also rental interest regions contrast, we that's I'm the by know, third And and regions, is this outlier and July, so there less was sold fleet available historical geographic a holding on third-party to you contractors And distribution, XX% gas can quarter that other see upstream. to compared standout rent to on confident sectors. year. Food in in the in with supply, are applaud recovery we all ones feel the hospitals depressed, sure And we we've were through the industry's verticals healthcare serve you quarter We're April. for by they In above in encouraged talking tells The volumes XX the third a beverage of finished as quarter, of I second approach back that we of In verticals as ground, trough we will disciplined in quarter a continued warehousing the because all the gain but solid

verticals bag, possible all vulnerability fundamentals. core within the about earlier. solid construction, One retail, non-res individual supply mixed our a is at manufacturers. The a hospitality broad are whole, showed of range and door is projects at improvement, long-term still there's to on risk. pans company great specifically trend the markets, new and as largely X call an have a remained worth markets doing chains, also mild these And pause. benefit mentioning be And a side and areas Looking the was entertainment it non-res American up the in multiple while Specialty on-shoring other and this be road landscape. early of and This the the And but automotive which out, including quarters, starting our I we're bridge well team Also, operating on-shoring strategy projects same markets, manufacturing, construction spans in third quarter. of and second a getting in by work, the thing true that mentioned activity job this and North verticals positive this overall. to an highlighted as stage. as industrial with could as our our And shift reduce where note seeing across And a way examples, could year maintenance. continues resilient often segment, this first is if customers, our word plant to was with

COVID, more higher now our controlling the want X ago, quarter to on third strong for is strategic our specialty poised critical this of foremost, haven't support that HVAC And all tight demand. one the we're fleet to disruption another limiting eye and business. been. show near We're expectations and this Throughout that things returns We're in to kept managing means, year. picture, And our fourth drive we in capital growth. with for uncertain to margins, the ongoing And move you than at doing quarter. our specialty under full making with and our minute all we're example reported continuing now to a could on I and make saw our sound this we've I'll The a months quarter take large our I how and areas in good And because still our strong we've have saying about that And XX network that. openings we our we market full customers, into year, are all stop plays with look of up for as plan, working. robust well to segment. investments, in of investments balance the track growth into sheet. significantly. new we're did for our we plan execute XX that certainty than of our this total locations, doing a taking for capacity strategic all it's XXXX. the already The we're view. the year. out because have first And of people, is this more long-term decisions been long as and and And for And a plan the the it we're ever CapEx part we our in a in to Our without results running is allocated to how conditions. But costs in offerings sum what's the of shift benefit to year, we we by mentioned big visibility of some capital doing benefit things year capture we the specialty we talk we'll serving that's that the guidance, with had I'm September, been investing expansion our I've see power reduced targeted our say CapEx investors. opened incremental discipline customers we've of gone address close demand. some going on term. the performance absolute protecting very particular, business, with Through all right And right.

our it rely our able right around safely. these open advantages of revenue I'm leverage environment, that on we this that and our stayed responsive team convert well. is that weak and to our I'm of downside continue projects. strengths and we look any pandemic, one the the most or on our upside We it's because together, pleased be we I that did stakeholders. Every know to And to place make serve And into of our proud this market finally, strategy conditions, have has do returns. operations strong, remain As the have and I'm use to the has working customers, And no as and in confident I'm been all economic attractive we'll on company, opportunities, the of to our our to how communities its competitive glad to different. way

over questions. that, the Jess, and Jess, over with we'll hand you. call to then to I'll take So your

Thanks, morning, and everyone. Matt, good

We've cash expected. than the free results cost generated to as and expected. across sheet. we're to team trends, both tracked seasonal notably some I'll year. on comments business, mentioned, And our Matt full which was the and QX, pleased better in continue a delivered our And flow to our As with balance that guidance speak revenue rental provide management significant in our to-date bit, strengthen for also updated the

$XXX absorption. was which fleet decline for improve the healthy from of lower the us million, and point million $XXX was Let's down revenue is a revenue was from fleet million start down fleet an in for or I'll basis million drop fleet Rental a Rounding the of $XX with headwind. on $XXX and rental note or million revenues, that or XX.X% million $XX points revenue. OER XX.X%. rental is was the the X.X% re-rent revenue better to in XX in headwind by $X.XX volumes. revenue, cost X.X% QX, ancillary mainly quarter rental the In decreased billion, which lower basis for X% or out $XX Within XXX that, another did productivity an productivity size third quarter. Inflation quarter year-over-year. average

year-over-year strong Let's revenue quite Used by OEC flat to sold was QX through Adjusted more XX% improved last retail pricing, That fleet sold the through move us, softer partially XX.X% quarter change basically year. mix. sales million. margin in to up XX%. Used year, significantly gross at continues versus on well. offset used and was $XXX were for QX channel last we market The as sales. healthy with this used sales margins year-over-year in be channel reflects

robust EBITDA EBITDA. look a billion, or the average, cash sold down Importantly, XX.X% was was, that Taking Adjusted $XXX $X.XXX years on old. on a proceeds, cost, a fleet year-over-year. as percentage original quarter for at of was million X XX.X%

a million, was $X rental a and as Here change. OER in is of from expense. million, $XXX together, T&E dollar a $XXX benefit that discretionary on quarter of headwind from by headwind bridge tailwind million, the SG&A lines of ancillary EBITDA $X with of million, the fees were from of impact of professional EBITDA the million by re-rent. of lower sales offset coming to other lower The as and was a business, benefit the well drag were million. $X Used majority was $XX Year-over-year, a including drag a and costs, bonus combined to

Our evidenced costs. at flood $XX basis in by was under one-time Again, adjusted items It in very XX.X%, the to EBITDA benefited benefits, manage margin total for our up a to approximately million coming model use despite continued third Flow-through, adjusted certain benefits, to delivery This flexibility in and non-recurring contributing costs. was resulting reflects we to margin QX. Through for from the in-house reported, points of reduce including XX% insurance quickly in have an of the strong, respond the year-over-year. aggressively business just commitment we was XX%. resulting also the those bring decline third-parties. adjusting about quarter, continued to our one-time Adjusting was year-over-year. on flat, quarter, a XX% settled gain revenue repair the EBITDA event as XX flow-through

possible, lower overtime The our EPS, increased And lower in compares year. quick year-over-year comment continued where due last but down to that was be mostly A result, a from decline $X.XX, adjusted on avoid discretionary income continue we QX, $X.XX QX primarily year. versus G&A. to in As with is QX last to revenue. net which versus spend

CapEx. to move Let's

continuing to spend in rental strong, third at discipline million and the gross That's for million, absorption quarter, on at our XX% sales CapEx to net lower in focus XX proceeds million, September the remains of than $XXX $XXX year-to-date were coming net declined XX% million. our equipment CapEx. year, used Year-to-date ROIC reflects CapEx fleet current capital resulting rental $XXX last For $XXX from in given and bringing CapEx rental quarter. X.X% of volumes.

our currently Year-over-year, Now that cost of basis X%. by average XXX down driven continues decline which the weighted capital, revenue. ROIC exceed to meaningfully was about runs points, in

flow, cash through of free which, a end for to record Turning the September, us. is

over We flow year-over-year. over million free cash have year-to-date, increase $X generated of $XXX billion an of

X.X reduction the X.X to September of total and dedicated $X.X billion Liquidity debt down extremely this from Net liquidity. on times With continues XX. cash Leverage the our remains at of the ever our end AR flow strongest ABL with the was of majority quarter over billion million. down under XXXX. been. of up debt in That's to at $X.X of year, availability be balance it's $X.X finished sheet strong. made billion was times, We facility just $XXX third capacity billion $X.X our to

we $XXX also million cash. due the $XXX our X million ABL redeem used On We October senior XXXX. XX, had in notes X/X to

that as long-term billion, increase end to of flow strength year, so do our free included views Total in the expect XXXX. Our October of decision to extends our with liquidity, the we continuing over cash liquidity, maturity to next on our and guidance. $X.X was consistent and of out notes XX, yesterday, to

I'll tightened increases, normal guidance, close we total comments. and seasonal with in the of bottom our our revenue few range in of to We've expect Speaking QX. demand raised visibility and a see as trend a

of QX's We the in for solid. results. expect sales have our year, raised part We've adjusted full also strength EBITDA used range expectations the remain our from tightened and will

signal than continues million finally, Our we prior free between and business customer fleet of gross update in million the model as strength manage to And is $XXX support projects. CapEx resiliency cash our guidance our and in the of plan majority with higher of $XXX flow reduce of And mix our in would to turn, debt. cash free plan please $X.X line? year move we our questions. use billion this the flow it that, your open as to to and, over on let's generate to you Operator, guidance

[Operator Instructions].

question ISI. first from Raso Evercore comes from Dave the of Our line

Your question please.

base the case the think think now? think Just fleet trying thought about size view between you you of how about look right to the related do would you CapEx? maybe sizing -- the for? for the we what sales should How fleet to year? next about of the to as that, How versus us And of used remind you And expect fleet mix equipment replacement that kind this end then year.

is This Matt. Dave. Sure,

is sell year amount think so, planning that serve timing how the and year, our we So we get equipment demand Hopefully, from we're we existing demand of starting that replace of then into there, say, do about any middle as appropriate answer going fleet expect we yes. extra is have process because is, at And And look used fleet? do next the demand? when if capacity about same much alright, then now. our depending if and robust And next in of growth But we as -- be we incremental that about will all we're we will on then right in how to -- this year. to to we point, up think the CapEx. a

news as a can into saw how Now as be environment, year you get until the us you that flex to peak demand didn't up much when $X we the good timing-wise, for year, can really we over or challenge billion down us, saw this mid-March. depending very cutting flexible we is, this by on

a look. the So we'll this We'll same do thing year. take

demand sometime spring, we'll I But make then, looks clarity to in like. And more by the lot a what have start think we'll have decisions. to some on

of -- there, but environment hope ability us the react it's that gives if lot a be of flexibility also to not. So a the me will gives lot that in

-- replace the that then feel minimum. fleet goes to we yet And there. a bet see of macro don't where demand not But we healing from if sell no on used at we'll we XXXX. continues, the So this expect

a fleet, is for change what the there's radical versus being that the that's your the or OEC speak thinking the if so? Because case, roughly, replacement the gross think we've if unless anyway. you I type shrinking a in that's used of wouldn’t size to past, in And about case spoken that's sold, that values $X.X of not billion get base equipment CapEx number

a of the the to when that think Is the of sort base it case. to sort assessment triangulate just of fleet? we that size So seems of fair

be -- I the from think would way be right then case. there, a be would to think base that it would else about everything And demand-based.

Now in had, used we had because capacity we replace didn't that an like we this extra environment even the sales all year, existing.

took So take as make the down you next spring, that year. the we're and again, we environment. that to And once anticipating fleet the decisions those opportunity not saw. have we to won't we'll react But until demand to

question line from next Our Thein Citi. Tim of comes the from

please. question Your

kind from get So any what's to to can just a question just fill big beyond to there what sense overall regards can speak up Matt, how you visibility. marks maybe to started terms know, branches, that on maybe we Just talking obviously, Is with bit would about for, you -- great. this provide? be branches expand and as don't activity of last through work what I'm you curious, you -- visibility levels? overall project the to that? pipeline, you time -- then help their does this visibility I that can just to, if us hear compare benchmarks as the year? speak you as project that a And it near-term to of just in the regarding potentially,

Tim. Sure,

with activity in remarks, incrementally is our that experiencing that mentioned we're we're improve that I opening as hearing same patterns. leaders, from and the normal my So to seasonal field continues actually feedback

And question, that. shoots in to but that, is COVID. the we're projects responds U.S. more we some through And going probably change they the that's anyway, So than that and on that want environment hopeful, gas, think environment lodging depends all Canada to but not between we we've which visibility we're And get we're the to growth worry January this It near world, beyond the this seeing at I or and that that had specifically and time are have frankly, I we take travel. the better outside seen on healing a would a pretending why how the to verticals macro we're take how they're are they going from it. the showing Most fair, through their term, it much if QX, The since that trough to better maintaining and us, winter. I to January, our about oil is QX. look how visibility confidence we've now on in and guidance. strong, they're think visibility seeing most new respond to through more verticals thought growth that green and seeing about and, I'll for the say be macro talked had

So is and think say to encouraged, best they're I'd about it. way the optimistic cautiously

the as And And you more, what extend was third-party I'll and some cutting obviously, some operating of year of this the back. really year? that sneak of of things, you've benefits Matt, presumably presumably and to longevity be realized learned of was more kind it as call of maybe that around one much T&E in much on And terms these the talked on earlier second point, benefits some and it's the sustainable? alike, just is the this guess, you Okay. question you volumes cost I in can at delivery do some about these think how of improve. that, the and the a period can and discretionary costs. theme of cost as the sustainability do this operating of, some terms come costs quarter through how But of the you've

Yes.

mother intact. here, of about we we So really wanted as thought is how is right? hold team to So of I invention the that term think necessity appropriate the

referred been other able of kind have as the the do make been to. you we sure through tunnel, of get And we've this it, calling we to that when side to in-sourcing that we've COVID So the respond. ability on to

we our And give volume headcount to I as to XX%. is able we Just in-sourced. margin, do is to most X%. outside -- hauling, like that, about the because our sacrifice point, the were revenue about And down year-over-year mean, see, repairs, some and took of our for expensive our was costs, you reason third-party only quarter data without having margin down a we

keeping and, people during difficult as busy and grow. time. a to continue respond capacity very markets quickly able our frankly, we're to way, employed and But to have projects be this So heal to

So I going lining think through this that's something in is COVID utilize we're future. the that to silver

We actually haven't put key math of to can you demand it think I how for a that it, only to a to what opportunity that way control extent, that's how us learning to up in-sourcing because have more it? one grow? way. of efficient a is in this fast And keep the to variable, but with variables is there not great do the is So going

our as we customers comes our far there all and are and with back, our As means employees. out and hope T&E it is healing people absolutely that, the because that world

impact But an operating expect the might of of increase rental you even little normalize. that less imagine. It here. that's bit some as So we'd can than costs, a to

the looking we're right now. way the that's So world at

Jerry comes Goldman from Our from next question line the of Sachs. Revich

please. question Your

did to? This environment utilization was The utilization rate industry recover recovery XX% surprise. is What in the used ahead you would used attribute on Revich. Jerry pleasant market in market And cycle? why of strength Sivamohan the the for the a Ashok

of in our continue used that we here market United are we And that is that have that So at retail I to right? Jessica. customers, a retail portion a sales essentially is large Rentals strength are this through is sales say our What to strength channel. see a would

volume a of we last. this versus through channel As I matter QX had earlier, more fact, XX% that mentioned as move

really customers that is And equipment. majority that the also of so that continuing of broadly the needing mentioned that end Matt And pretty our the recovery across our seeing of markets. strength indicative we're

recovery strength the that seeing to we're same attributable that used seeing across So is directly think, sales, pace I in business. we're that the

Our comes from Weber question from Markets. RBC Seth of the Capital next line

please. question Your

quarter, and a EBITDA like again. year-over-year, down on here. quite be down on things to going like if the the kind to guide. But cost margin question the are bit margins is back of be quarter going tie year-to-year, looking a though to of margins they But just your you're based are just Really expense down I'm go about looks midpoint going job of wanted -- I'm meaningfully of looks to permanent like that. just fourth even and together, I if I'm good the at of kind there? be year-over-year, in-sourcing is to the these couple stuff some where about missing there's to anything trying change it were a talking flat it

things Seth, that so X I mentioned.

know So and We've the some important the first, I of terms at trends. that work say not in possibilities think cost and even quarter to of to how it's really EBITDA of what revenue I lot you've done this heard in me this but before, of anchor a means midpoint. the could come

again the give not about And that midpoint. I'll to so anchoring caution

bonus that last fourth a mention tailwind The quarter of other the thing year, expense. we I'll had in is in

-- on basis XX somewhere to XX year, revenue, points if impact to be the to is I from the that fourth drag. so And that's to somewhere around points going have be midpoint a going it's margin use perspective, quarter going of basis this

through as that's So going play to QX well.

Sure.

That's Okay. hearing just a helpful. follow the on We've been And then business. specialty up more.

asset M&A? space. the players market market? specialty going characterize far have up as about for you been competition or national as valuations kind in characterize kind the of just specialty happening you're seeing just getting other Just what in in talking that more what's bigger Can more of Just

not you what They've could business, as All Seth. than well like. the is specialty part we're do the was getting either businesses about great. Sure, doing perspective. our resiliency tells year, doing as in This is still very maybe Matt. last They're been a have into the dynamic the talking you it also with doing that about. that would specialty people sound and We're feel And to moving positive some with with performance, hear transient say of cause. opportunity in lot may recall, very talked trends that penetration strongly the I what we're us as performing overall. better of about we And margins. continuing that performance issues we tell either expected. margins way, the had seeing competition a business specialty there's this the understand from I'll this they business, of tough the are environment pleased improved strategy We But more been as specialty. quickly or a

line the Our next comes of from Dobre question Mig from Baird.

question Your please.

the about understand I'm to to comment from relative on go maybe the a well. standpoint, revenue pieces equipment rental used? just you're here can, back how moving to If like as specifically you trying sequential thinking we guidance. I'd Can to

Yes. what a comp you from Or Is question want to your get exactly Mig? perspective? at, year-over-year

I'm thinking yet a called of some than understand you're you lot like seasonality. infections I moving how big right? year-over-year, end recognize commented revenue in activity markets about that are another sequentially out. pieces you rather trying with here on we're in choppy is as But, there dealing to obviously, and spike

be down? you How specifically understand, it? thinking to you are a can line here, that flat sequentially? do Maybe this trying I'm So item think bit about little

we lovingly that heard over Once environment, called start the mid-November, any we And down. use cheek what going in drop. to us QX, we expect QX before. get would I’m turkey you've around to we sequentially see be in So to and tongue talk

we'll quarter. that years come the last a see with this I've never lot of quite been gotten So it. in of for half business, But during off I've comfortable the rent XX fleet

guidance, our for be expect And lower QX year So than that the we revenue better revenue rent our change for for few months the always you and actually when sequentially ago. revenue feeling revenue a than year did little by therefore, a will look we're overall we bit. total at QX to

think would is that, I Nothing dip So us. would out is normal been of part be that talking seasonality. ordinary sequential the normal seasonal -- And trend. we've of for about that what

think of out specific matter opportunities. in CapEx, we for fact projects specific a that here just the that's QX fact, you raised As of and the coming about if are that ground

trend as itself, rent with in we continue a will patterns. seasonal normal that, sign So view that revenue to positive

the rental given up of way follow about revenue. cost on then And Okay. I that. the the you're appreciate kind equipment thinking side,

revenue rental inflationary that equipment impact far as the quarter? of Or are fourth as cost As can that some there sequentially, well? should the follow items

that’s right, say I as would tactically lifelong a just operator.

fleet it increasing to interesting One enormous get to that that off billable rent, of all when although you’re QX to back of going fleet get when have activity, all you is you're repair of not an it you're you're going of going Because and the back. things amount revenue. still volumes comes your

usually the of in that QX haven't out ordinary. that call for here, nothing So little there we But Nothing out but dynamic, nothing disconnect it it saying managed the quite is nothing ordinary. specifically. and QX, are nothing to cost just think in of about level years a sequentially bit drop cost accurate would out, call It's of to out to of not revenue. the same the to but

aerials? I'm some the of And it, If through XX,XXX little just Okay. down in maybe looking that helpful. Understood. units fleet, one terms your at earthmoving a may And anything out provide be mix you'd call perspective more. you what the mean, I And were? these number concentration units call in more here there maybe, can XXXX. would was I if actual of of came curious, we're

significantly Yes. fleet profile I the say wouldn't overall. has that changed

that, outspend was vary needs, gen But I We It mix in bit way continue projects products on nothing material specialty a will rent. gen call to the depending that but our out. would and little versus rent. in outside of

from Steven line Fisher Our of next question comes from the UBS.

please. question Your

regardless base the a it clarify case market in for you Raso decline place are? whatever next Or anything base assume And just or year-over-year rule, flat what reflects wanted just market? that, a all year. really case to activity modest terms doesn't Or markets growth? market? the that as you at the assume in with sell to please. of about Does modest of clarify some David Just to I the talked

Sure.

to right? meet So right, starting demand full demand, point, Well, first the latter. capacity. clear, a CapEx use then existing To will flex we'll be as with the that replacement

greater, one say, us we that more need that for be would opportunity capacity replace we all in had example, was direction. told going that we this Let's year, existing that to had didn't

couldn't is we the size, right, The beyond starting that existing the get capital. constant. fill then any fleet thinking existing incremental incremental capacity, fill was demand Whatever keeping we we gap other would about fleet, fleet being point direction with existing

a to about that didn't number. not forecast it's what really macro if just need capital replacement to It's usage we environment, tool. to improving point, in think be would fleet, continually So starting a has your That's shrink at the illustrated. start that

that in wonder fleet? XXXX? few may may different. incorporate But period the coming macro There how you period. for to optimism always over time now post-election I if months just could the are another bit you're to the trying kind curious, you And lessons learned do? it. what you next Got going not to a up you talk know that infrastructure. against as And you plan in or post-election some of be manage the then learned be we're about last Anything and may environments need I And on

flexibility from think a perspective, but say, infrastructure the the support, the the that's eye through of may funding, We that we keep pandemic of how to how environment I and perspective close has have not economy assets we're impact really political verticals, Outside going a macro political react. that, recovers is -- we'll too issue certain Personally, and than to funded. see they're a and losers We're get a the winners which there model would I type the of once bipartisan political environment. But the fungible wait I some and get there the our we outside to be, will is bigger will again, part of have not on winning think time impact very our resiliency assets. understand as business watching of in we'll that that much. on have. sectors, fast the from of be we very ship much how on

from from Chad comes question Dillard of Bernstein. next the Our line

question Your please.

to renewables, we're assume centers, non-residential a data commercial in probably fair So probably warehouses. see of to going more the shift that side, it's construction towards kind away from

equipment, how versus super your helpful. that general Just like could trying the be If understand mix classes color on, would needs of between equipment you specialty change? the from some mix, give to just

a say pronounced as not And maybe quite scissor products Yes. some would Reach right, Maybe scissors, be been versus electric -- and some we've that of within little are I markets Fork. a businesses but bit would smaller bit, end that supporting shift, get larger these you'll move heavier non-res time. for to there. a little

base. huge view our a from wouldn't change profile I so asset And

about as refineries, specialty would penetration. being as I a business that's all infrastructure far for would As come as turnarounds be I see specialty, major well rent. gen see our that in could as area. back more our opportunity

I change. wouldn't making non-res profile a that within as So fleet shift say huge

industrial source I would tend it our opportunity sole maybe give the be some think outweighted would industrial markets end us more us. use for to that usage because fleet for specialty changes broader the products,

is it. Got on of of your How about right the specifically can then side? now? that seeing business, normalized recovery business refining your of levels in kind industrial that you're the chems far And just pet talk side thinking you pace below

that led Yes. believe for challenge XX% QX rig Petrochem When count for has really down upstream. been you think this about by -- I was upstream. year, a

news X% it's biggest good that's XX% The for out. overall news of of So business The the -- the upstream us And in our bottomed challenge it's challenging down was good kind for a within us about petrochem environment. quarter. revenue. and overall been is

have challenged, not have with not we'll any their with for comes, there don't specific to flattish. a moderating. customers well and oil right up you that rush. as be the turnarounds us well to and happens? been quickly or -- ball don't the shutdowns that of again very really to I an Industrial, can future opportunity. But think I what can look bigger been about I And overall period, very recovery poised just as see on think business that in position we'll need measure now. it's But for of world at trying challenged that are XXXX we're we're It's costs. If counting petrochem, we're wax Downstream it's opens they when cash a opportunity. different and have anytime I react react you how that quarter we'll output happens, that patient, is positioned key I refineries. poised I'm you and these do increases, be our as have conserving Whether everything totally soon. would doing We to and value XX% really on but tell been us. people control overall, when how chasing out, expecting again. these going see it at the and delayed they fourth again, that take actually we'll for been well be and that as yet. So

forward keeping to because could kind another that industrial the opportunity the we're we market. So for it. it's end been on, leg look close could manufacturing that I bit we take challenges of little for petrochem a once growth headwind of And a out better here. And about something that's offshoring, in of that of the potential eye the be offset potential story some talked a

comes Rob question Wertheimer of the next Our Research. from line from Melius

please. question Your

you how we a that My question, you proven already there, maybe longer. curious till this, if just you bit to a in about activity? maybe downturns, And question. lot any underlying a and flexibility has finally strategic wait the short-term the yes, there? there is verticals? it's so years, feel done expect and And forth. PPI if continuing can new already prior so wanted hasn't I in Based stamp term, Maybe you’re if you do on I downside price you're I held going and think are of you of cost is it’s and is, it put ask should that the worked it really be look the when industry long-term out of sort differently? -- might should on kind In be when what have this say, X collapsed we to could, looking little on to all Matt, structure pricing, you've and structural out? I'm about amidst X spring, couple progress at X up may short on specialty according

Sure, Rob.

lack first We we visibility and term. this to responds time So wildcard, the of out think we of how the right? up, really part things of and population where question, how government, trying it future that the is to wait when downturn, to is pandemic see ends? on this I go state in how and This have specifically winter -- really, and municipality, it. When our dislocation, your a really respond

in my is different been of the this downturns career. I've other than bit in, So a any

And projects to think that lot say I So quarter this. volume that would that's whether of it's the still as the new signs in seeing it's fourth been question that concerns open-ended whether we've broader up, seeing start of I accelerate. used sales the is for think through But we're still economy I an going resiliency when there's here about holding still a the us.

about talked either I we We're and we're optimistic. it I'll flexibility go feel, signs. could repeat, all pause but So way. think We seeing cautiously positioned some good for don't know, as They back. I our

activity past same timing, view So a importantly, I there sign. we it large then positive the make as the does up, But hasn't us From we been and sense? And does for template, of which that we no out drawer. are perspective, at I for focus. make still activity pick continue Is is think the So M&A to it plate area on makes focused right? financial very working. goes admittedly, no the sense? Well, strategically, that it sense the of be could M&A pull keeps an rigor. any seeing X time, But the it through pandemic-related boiler a downturn for most months, pipeline pipeline

towards to serve about our to dev help solve still -- more continue keeps that Our do broaden And moat products do lean competitive calls and we more think, you with me that working. talk take to anything just our value problems, To is will we services. of that team can whole team, we'll heard more part as prop. our business inbound do a with M&A customers that,

customers bring on would focused lean with existing any we new we're to existing projects, can continue to products our our So on. that there to that something be market is

from Our Oppenheimer. the comes next line of Scott from question Schneeberger

Your question please.

some metric. And behave your just of give competitors smaller in? you productivity cadence environment on on I fleet you're this the of perhaps we're considerations us that high-level how some inflection? in that, guess, thoughts seeing I'm curious Could

Scott, hi, Jess. it's

but year, that get that, right? with a recovery better each the May come extends that So yes, productivity that productivity is quarter this are back to encouraged better productivity where passes fleet on XXXX about environment I we've mean, sooner, into -- focus an through, in works a XXXX us we we encouraged half as about starting continues with and on. depending little turn, in right, moderate have talked absorption that, fleet we're to particularly recovery this healing on and going of think how that the better, recovery getting continuing to next fleet goes for as

fleet on aging, of in a the just then follow-up, And we're that environment. as type

Just I years, can made is comfort in demand announcement the curious, comfortable maintenance over and by also in consideration. the what makes asset moment? repair go level how you the advancements But and you've does average? know efficiency on you at efforts high your that of

Scott. Sure,

actually what we about how this that term and a we picked continue rental had on through, have, because I'll the useful we the life basis been think think that's about out assets. sweated used we’ve year great up to and months of RUL, much we manage The of quite year-over-year gone used we've [agents]. would thought less use fleet, only these we is when Considering we've to than So fleet, the the to frankly. volume sales I frequently. of fleet news cradle that's ability what get X call, -- We grave this

talked Cat XX particular months in we've at So of about any always headroom, we'd that least have Class.

use to a year. had in We haven't very half even been what's of that challenging

fleet to into we'd If again this do without able rinse not speak anyone's from I XXXX, in 'XX, any increase So R&M. we to wash, repeat it in meaningful had age a perspective future. be that and want to

to And again, important part a is keeping the it's that We're healthy view So of we ability assets exit that. through to age have very get way grave. of big and cycle. of fleet the we this any that's way comfortable cradle part the with the manage once that. that part The

Our for Courtney the from of final from line comes today question Stanley. Morgan Yakavonis

please. question Your

just wondering quarter. if time, back like we the discussion. over picking sounds in-sourcing was I It it's this go been could to up

the you the can haven't more in-sourcing headcount year-over-year. if understand that Can And you head all, us having quantify, can you much flat at how on to us You all. increase little more be? year manage help be Maybe really that versus also, why it better? last then that historically? you could And It's opportunity almost And just systems haven't help will at do the have much count just that? to year? raise without headcount spent maybe how do done a you you place what reduced any to over you help in this third-party do bit pretty time

Courtney, it's Jess.

has So down. gone the headcount actually

the year-over-year on leaned we of we've business middle the have started, headcount as third the that So from, overtime in a up March, has call and the when think I pandemic that quarter. declined. on attrition had natural let's And the about we did even headcount in our go mentioned where it, some

branches. headcount the doing to the also and that We have overtime not just down across support just that leaned support repair that we're in-sourcing on delivery, to with effort that but fact is

a as to opportunity really had want, capacity it's where to COVID we think around own bringing to we that balance through period activity to, flex learning be that we do how the how cost having parties activity. third the seasonally a continuing using we how use to a on need headcount much through instead able peak will for we support as full-time about but continue much premium better can and manage our when we've So can the really focus and of third-party ebb of overtime the in-house, use

as could use don't productivity where the on worth exactly we you think I right I that for there's how primary much to enough learnings now can number from continue can an about normalized for to we be our inside if frankly, that’s worth, a drive business. think had one Now we've from opportunity But definitely a financially, tweak the future. us of we able put has of to that. tell that you operational what's that something it's period tell the in business to of support labor how couldn't perspective, but definitely the I time

learning is, review Courtney, a just sounds have is the point we how to what team me business for it it. a think And cost, made, headcount proxy on and one what it interesting manage the over-managed in for actually with you we using like is can have, earlier? may in me talked headcount talking When as we're field. have add in-sourcing the about [product]. we might I you

opportunity heavier I opportunity think get is, future to your you for the as through per and heads we at what look So can the of spikes. rid is cost used the transaction which keep seasonal higher outsourcing,

Jess and looking be be we'll learnings will So that at. future. the these team for And and through are turning the will the great some of be opportunity

thoughts expecting? specialty? utilization you that helpful. step-up, were saw largely just was more on CapEx. was then just really That's the that focused on increase Or about because Can just it however was share, was gross it just any slight that And trended more year? And replacement? you just the this than better in Or you

This strong mentioned. year. real a things and you of we have had really how Certainly, that mix a had some specialty, both has power was Yes. mentioned

than support think our season categories as more there. expected product that, here within October, fleet big we sold are So spend about There year-over-year, certainly, than But By gen definition, out some projects capital on. CapEx the lines, go assets we fleet if some some had volume what raise value there And tight peak of being because dollar, ground, sat of we needed equal. sold. some CapEx hard going about for you that's not customers replace and OEC we to created but this out to every that in coming that what is will we dollar rent were think you that productivity that year was we also less dollar to all even significantly there be our are at we the still and purchase about. the believe it's some won't on replacement when down

replacement. really to it So wouldn't be tied

I'd question-and-answer the This any session to program. hand to does back for you. of remarks. like the further conclude program Matthew today's Flannery Thank

to Thank tell. data QX your I'm glad positive what Thanks you, ESG the is a some updates, had, Responsibility we last latest new deck including investor operator. to feel, our appreciate time. Report And we for call, that we everyone has on corporate story And joining. the released we from key week. our

So please take a have any always, look you And if feel as that. call to questions, free Ted. at

So talk to Operator, can good you in we Have a again to talking safe. you stay until forward end the call. look and holiday January, season, soon.

And participation today's This the and you, conclude program. ladies conference. does you. your thank for Thank gentlemen, in

You may day. disconnect. now Good