United Rentals (URI) 28 Jan 212020 Q4 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. A summary of 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

Thanks and you, everyone. joining us. Thank morning, good Operator, for

of prove business As costs gave proving we was operational the resiliency company. ground our team management, management, more things year, back embrace our It the willingness have model to our agility than the and to for change. feel the a capital that engineered for opportunity of on we I and decade, like look XXXX us past disciplines the a

disruption, and stood to costs, choppy keeping wasn't just excess the safe, leverage. flexing a our We while significant to sharp reduce was our periods our the year and our up aggressively streamlining these last downturn, have in we demonstrated CapEx capital operating conditions people capabilities managing economic past, those during it but and

great execution, as QX. to and Such XXXX, XX% were our on on our help capacity, as beside They very and reactive our Early that their year very to long-term for exceptional better, harm been them. on narrow saw since the fierce of committed key being now below cycle, that on financial all on so market we this didn't cash adopted our revenue an customers full with saw are remaining in could to rest gap up safely. cuts while work down to and our yesterday, margin service XX% just focused our third generated engine wide, The so and the be down And revenue, us And QX. serve have getting in we environment. most 'XX, free a on of better determination laser in results to the pleased agile remains despite points These we team XXXX, I from people, care And which And and by kept cash QX, in XX to customer together ignition was factors quarter prudent I one our adjusted EBITDA of most you take capacity importantly, from the demand, impact things have our steady free our a results flow. one rate significantly and or and flow. path quarters addition, credit or rental generated fourth we professionalism, proven all recovery the resort And throughout slow protocols recordable us people continuing us lower within year-over-year basis the yesterday, safety talent commitment our up over of earnings we our EBITDA why proud of down quarter total our employees, markets time. guidance will also you we we spot XXXX, our they that am and saw the stayed UR. a to working decision, the adjusted quickly never keeping power. wavered squarely In to we and service record allowing that end We flexible on customers. execution than as any consistently at that to right were decision. our the delivered. COVID enter it's for company fourth reason, the in are

traditional current the but believe for year. future. we a the it's foreseeable let's nonetheless, will an look Now, COVID it continue a and impact cycle cycle, forward have to isn't to

gain to continue work toward we'll we our as indicates, way guidance back our ground in 'XX, levels. As pre-COVID

MRO of we the majority surveys, doesn't experimental spike down first vaccines us for a it rental retail will needs to projecting mention from $XXX as want customers tells confidence tailwind the as our cases should which fleet. by be help call We're months, halted. higher is contractors then are other it the used you this we this strength environment, projects that demand coming we're was while demand. for driven we show as collected. quarter to continue our at being indicator that in revenue was We retail COVID through It get of couple million, the the as the market in to realistic demand equipment expect data the business when a still both up, key year. we've positioned were customers. fourth growth to And guidance of The and our projects rolled temporarily for as trends be our for than points market improve, and the factors. field And to projected toughest sales. our and recent And equipment comp I a from is the healthy move this quarter, And Once comments echoes, first to behind our year, reactivate XX% sentiment base almost left hear well the and 'XX. some operating is that return somewhat of on settle the prior in industry. visibility and know, the is recent Our the out, spending. I provide limited. optimistic capital used us our we And we What before look are cadence should favorable, of into year, will

Another up. discipline positive ramped indicator that side is our overall on is XXXX. supply showed as to this the be good industry And great place activity in a

markets The Looking verticals some and most call are resilient at our that our technology. to in encouraging power, environment, healthcare, continuing last there signs. operating distribution, activity on we lead like, project as call are

data even power plants. warehouses, of and these Within centers, hospitals, at verticals, range we're including looking a jobs

of which construction is hit. topical the turnaround We've largest the in which to position clear COVID of a be downstream we Within strong United projects These a number unknown good and And non-res that that fourth these stadium of Infrastructure side ground see this benefit this processes. true point, is a petrochem include type for to and The build to activity will Rentals been generally has on a of increase at sector end ledger, for On news to And this remained light the chemical is as invested administration. positioning timing continued some this any others be been this expect number postponed for details our to start airport continues soft to base, in And And table, big the year. is by and his plan quarter. while market better in in end other the steady. new the the in projects of seeing the up President scheduled projects since including this We scenario. revenue COVID when heal, do same the a led tunnel. the growing years we're multiyear year, has Biden at back were infrastructure. fourth quarter, priority the the in spending, economy lesser company from and of the election. renovation. bridgework and degree, has are that

higher segment open It we quarter specialty that had to than by same investments specialty specialty led and the store which business, year. in was operations. prior close the generated good bring our fourth December. the underscores specialty ongoing And of will this another by our double year, us is another XXX to total, revenue year. quarter power locations which importance we Our that In last number plan this opened XX HVAC cold-starts

Here's the morning. point of main this comments my

that leverage our as we of gained for through us we we're do. say we operations. learnings came You we're recall have to we the unless the what that. challenge to may our is we'll mantra and to experience bigger our really learnings constantly we return doesn't matter, And growth. stakeholders, on these from going striving better. its doing incorporated into by been But And all get best did XXXX there that for way

what we and Yesterday, of we're said the business. goals. we 'XX. you to that saw doing went to and of our went XXXX committed fulfil today of the right again that investors when our deliver And by external would what from a met power protecting you environment. the in The wrong we we're responsibility action course It's commitment isn't that takeaway long-term too. in we results intend telling Finally, earnings to the

through to then stop Jess you Q&A. here, go ask And and I'll numbers. we'll take So to the

to So over Jess, you.

and good Matt, Thanks, morning, everyone.

activity versus volumes the into cash some quarter expected, Q&A. margins XXXX. recover were we our continuing results year and our a year-end 'XX rental strong we Free to before was guidance and down in solid on we sales on supported get all That's I'll quarter. as expectations Costs Our in at and retail. fourth in line More the were exceeded financial better the news leverage in both than good minute. used to also provide move flow color for at with XXXX.

or XXX Sequentially, cost million year-over-year. or in in fourth rental headwinds million decreased fleet $XX million basis was the for ancillary another OER fleet revenue with $XX and revenue a and a was lower $X.XX revenues. a the Rounding Inflation that better XX.X% In points, $XX mainly now from the the X.X% was lower X.X% start of for size in revenue, the the the billion, productivity by fleet XX.X%. for million out absorption. to $XXX was million million results or quarter us quarter of decline fleet a rental Rental was average $XXX quarter. productivity $XX which healthy Let's revenue. Within by decline improved X.X% re-rent down impact.

original quarter As of That's in year-over-year, in in results entirely these fleet in in increase XX% an million. at by reflected sales. Notably, earlier, row. were for at use sales driven in quarter or about the million $XX just quarter XX.X%. That our than shy increase of I used of year-over-year stronger retail at retail coming mentioned expected an second XX% over $XXX equipment the OEC sold solid XX% margins the up reflect in cost. seven-year-old Used a channel the selling were almost

Used was quarter another benefit which to other a sales million costs, change the coming were remaining with decline Let's discretionary move billion, EBITDA that just million. of was that of tailwind our of together business. million, year-over-year. for lower dollar ancillary EBITDA $XXX non-rental a in mainly up lines in million Adjusted the $XX to from from and T&E. the offset $XX $XXX were million re-rent XX.X% million, from SG&A $XXX a headwind adjusted made million headwind OER of The of $X.XX includes the a majority help rental, $X or quarter And and EBITDA. under $X

points those as mentioned numbers. basis EBITDA XXX adjusted through was I in flow to XX%. quarter and consider items was margin Our in year-over-year, down reported two the about XX.X%

up First, through. flow new revenue of portion headwind was quarter, a this margin to sales made a our and greater which

through to quarter a with results in Both for which started pointed operating and That our and year. as on cost on from had QX certain net implies items QX two benefit EPS, largely of lower even XX%. would over was of a to back just October discipline, that at in expense cause compares Year-over-year in QX, $X.XX decline the a revenue. to and mentioned due call comment QX. flow XX.X% were costs Adjusting I lower drag margin bonus that primarily Second, this XXXX those we income $X.XX. adjusted expected is last normalize. as continuing quick A for

Let's CapEx. move to

in was what from points, spent XXXX less was CapEx full strong meaningfully our in rental the in revenue. to remains spend Proceeds ROIC million than $XXX ROIC in which XXXX. For bringing about in sales primarily were at million. exceed to gross million, equipment basis coming CapEx, X.X%. capital, to decline due quarter, year million, which CapEx $XXX rental $XXX lower weighted resulting of at net continues we our use XX% cost average was currently XXX year-end, of X%. the That by runs in Year-over-year $XXX

Turning to of us XXXX. billion XXXX. at versus record This an for $XXX cash $X.X was a over flow, million free increase in over which represents

Liquidity dedicated almost XX% net balance look debt. our end with X.X debt flow XXXX. availability the under finished we of of billion, remains of down of at million. facility billion just times reduction As X.X in a capacity at of at to cash in resulted sheet, billion or XXXX XXXX, free that's $X.X in the our the decrease was just $X.X liquidity, strong. $XXX extremely having total AR Leverage year-over-year and from in made times up ABL over on $X.X our majority We year-end,

cash. in million $XXX had also We

which our shift guidance, XXXX our night. to we release press in included Let's last

the starting includes to in past we of challenging a lap year. April. rest revenue total the comp in rental pandemic in getting with season, the of to move rental forward revenue a and to return QX, growth delivering Our the view start the as for growth look We to

Our in made guidance pace $X.X to markets. for on year and includes We're strong look sales outcomes spend Within our the over our fleet. use CapEx. a billion assumptions we'll that our given continuing in across guidance to range increase planning seasonal recovery end of replacement we've patterns of another that replace reflects our CapEx and

and fleet total we capital Beyond levels. be that, growth on to adjust we continue planned with absorbing our at focused pre-COVID the own spend accordingly, we'll

but EBITDA also to our using to XXXX with continuing we've we in our less support considers costs Our We'll manage parties. capacity in tightly. our growth leverage range expect what only adjusted revenue, on volume the on reliance learned own not customers third

recover, we'll ran see of continues As T&E in bonuses. XXXX, such costs also that reset our to and a business as low

pay business considering resiliency of $X cash generating free as that's one indicators We'll free strength behind our especially over to CapEx spending. our of a flow the debt cash In year reduce after expect and down we of of billion significant of invest XXXX, use is we leverage. best to and to our growth. in the the our Finally, flow flow, return continue cash model another

would please open get questions. line? let's to you your Now Operator, the

the Certainly. [Operator Raso Instructions] David Our of from first question ISI. from comes line Evercore

please. question, Your

Hi. Good Thank question. for morning. my you taking

very with as Can two of two the guidance out, the and at leverage that's the of given With low thoughts targeted is your end leverage year about the times, year-end low? that year through your debt-to-EBITDA net us range think how the plays three. into about take targeting the year XXXX to to exiting the

Hey, David, Jess. it's Yes.

to our So, on sheet balance we're the pay flow from and to free perspective continue down debt. as the the think we cash obviously CapEx, continuing that's right after focus the and going about to strengthening now

and foremost focus in able then capital first is As we first the for being our on, from year going a and moves foremost that may organically see us. the growth and happen be that M&A growth perspective to to and on fund allocation smart

getting growing and about being it's continue say, able two target an having, us so, for growth. strengthening for sheet to business position but of to year-end, arbitrary times our by that better more to let's us our focus to And on balance not

level - to I Just it trying get two math answer, mean, we want to changes. leverage. lean forward if think And trying an looking fleet you if proactively you we're some just got does I'm of But backdrop, to lean to do taking during I'm seems if that this an for of dictate more. the positioned? that we that willing get influence that and to of also to are like year how did times? even you even people's bill, especially would infrastructure down the on make you frame before something where the when obviously set would economic ready at be size forward heads did just infrastructure could bill, you to be the you think where

this is Matt. Yes, David,

year. Your we clear really going release. for not to be all we're out in absolutely once way I I discussed growth see the to we And understand half, are. would a and just will back to we're like we lean when the tunnel not exiting the visibility QX, what right positioned when coming feel we as in. as we're through point start with where it yet, and afraid as but we guidance now, we're get to that think economic our it in for normal and the on, certainly the 'XX, But comps isn't lap you mean And we're the that's opportunities see look markets end growth

far we're touched Jess quite an looking because what work if fish do pipeline our we're we we always we looking we through six It's the certainly to As through fry, as for the dry can once smart not we opportunity how immediate to integrate had And And necessarily that's a always for an always powder we our months and the it, nine better We've so. been focus to have have it focus. serve pipeline, for focus we past bigger work But since but I. bar, that. frankly control. Well customers. know and Jess specifically hasn't on going organic M&A on M&A to ways just COVID. get to to we're at

how they we billion projects. ago? contractors, the you be were to midpoint? $X.XX And saw the just milestones evolved take of you the thinking to of you the evolution customer your through about into obviously question. on through last quick how Can four the three How winter. lower got was I CapEx gross assume just place decision Some takes CapEx the fall assume it it planning early us surveys I months

thought curious - sell help ability markets new your of equipment drove the to when way You willingness you with the replacement, growth add site process read for your just that the the number? went I'm you. planning highlighted your Thank buy through milestones And through influence it that million went $XXX leave there. I'll the to around come the used and can how act, used CapEx. desire to things you up

Sure.

the it up. So build up we from ground

look a I'll planning we for been at a beat know thought bill QX, it by we they're some our that where the field process, market with you process feedback field we this But November-December market through wasn't through up, the that's and was through have for are the and consensus. start trends corporate. September-October, a little was then deal And going QX don't we a little Jess, started process. at probably getting ended they robust were planning say maybe coming it in light here going and And and they where point, switch, we to process. as we This closer late it. opportunities that then the anything because add? up us very but to So the excited. had now, much pretty planning at getting as I was if too early were to from we leaders, bit But we the, a

that's think I it. No,

Yes.

Thank you.

you. Thank

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

question, please. Your

a this little bigger Hi, everybody. bit Maybe is question. of picture

trajectory. on growth Just your

little don't how is sales grown potential bit at much been, just in to than the given comfortable years, acquired you and sense maybe half a less look How and couple and see past fleet past start? versus half And consolidated do the and next when or organically on I you the fleet more enough organic industry you Thanks. have growth. maybe years? a know really several might you And If acquisitions, balance out three the your fleet over maybe the you've putting market years the future anyway. are several

we're end all start this almost responded So with We I has a the quite would there which to specifically your actually was rent, days the which market a lot see When us way how a the that balance downturn about in downturn, in but data almost going not there 'XX I a to to days already, of really scenario. question yet, from closer compared we're Whereas quite have the exciting. I'm on tells already than first. the industry of think imbalance heck is different thought. fleet

the lean we're few less think growth a in the shape. I uses the it's opportunities little that quarters year higher it's out, QX. can than in This midpoint. you model in a years. because that what But see. we good than bit see future little say pretty comp So the see just headroom already about see through actually X.X% this headline years. into. is And are growth, it I be And you that also to average when significantly four next is a do what may now over misleading, you having tough two just absorb we And we'll the the X.X%

into and leaning and for excited already we're we feel it beyond. about So 'XX growth,

Matt. Thanks,

Thanks, Rob.

Thank you.

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

Your please. question

Good again. I'm morning, have I back question. non-resi baked I for outlook X, Matt Slide assumptions and revenue underpin that resi, your sort for industrial Jessica. Thank what guess you for at and to go to your in your you general outlook on taking mix want of 'XX? look wondering And I the as

we the and all they're choppy. see all think We're looking I at they're same macro data prevalent. stuff the points, So

than positive some see others. are more You

you're whether looking whether or momentum at So index, backlog. at you're looking backlog Dodge contractor ABC

couple looking I So there's the point to. at of a same set, all things we're data

the First And planning market those outpace we markets to stronger of them losers. winners assets, moving weaker all this ability using growth non-res, there the is markets. certainly end the for are we're to and and by within and from to the fungible have

And they're oil also processing. some and there's we and there be growth. and see a could always say industry would the I'd mantra. to also usually some the historically. rental and you'd negatives, side pretty, the floor chemical that's and although overall, in that the I the has industrial right end deep pretty say to downstream in been still opportunity ability outpace see that pointed opportunity now I So market specifically gas,

the scale able think size and stabilizing, be So that the we'll and end market about growth. backdrop feel have, that overall to the we with we we outpace good

guess at replacement I wondering At what on the spending see. you're through obviously 'XX. in about planning your also you're in CapEx, the progression I'm point I Then looking thinking more how Is than happen sooner to expect on can that? a year-over-year have are little stabilized event? thinking this think a second about fleets it it? the than you half you How time, Do you basis? year.

so will Yes, as fleet the word will X% you and used decrease about negative and the year. stabilize, down we're we throughout that in year, end the that when

Our XX% to our cadence, capacity think plan $X.X about that our fleet. cadence of QX as when we being productivity, you our and but because into a we of as robustness CapEx normal capital way QX, spend year. starting only absorb, billion XX% care we typically cadence, that still to extra maybe end where can selling have of a to in great our we the refresh on also want that's little lighter in 'XX, of QX, the It's our fleet to customers seasons, not in to important from and worth the fleet, get see spend peak buy of take that's a note fleet a but market, some

adjust when $X.XX replacement that, So billion you inflation that's capital. of

we earn in $XX we million from on see you depending as opportunity. where million of as it, absorb we have we'll capital, up growth and the range, it, $XXX it meter we anywhere and in the So to end

early the because have late maybe on color helpful. look in cases COVID business XX of very quarter, the little the quarter lastly, Thank progressed the Then obviously fourth quarter if, the quarter little a through I linearly a maybe as guess, year bit That's versus me, different, more developed. not for you. maybe

were markets had issues, in business. very two things. big the the cases didn't delays impact some but Yes. It rise. Great point the on maybe very, some scheme province positivity one small had really There and and related, of the

cadence pretty as quarter. steady So saw the throughout you the was

you. Thank

you. Thank

Thank you.

Our of Bank line from Gilardi from Ross of question comes next the America.

please. Your question

you. was the just Matt, you wondering, some can me? I you Hi talked hear - of about guys, thank

hear Ross. are doing? I good. you How you, Yes,

can. You

Okay.

the the grow in you XXXX? will the growing winners side, actually think you of and portion possible the as portion in When of you non-res non-res the that. classify about about it losers Sorry that breakout now, is of to talk rough is kind it, on business

winners, are as it's right imagine, distribution, through entertainment us just struggling, of not a Yes. right, consumers bit open get related, of obviously end that me that, projects I won't certainly back lodging. which in thinking retail, of you as each winners get the that's weighted I are that and hot we about too even the now, get warehousing on buying spread little so that have outside things do geographically, old because competitive all a hotel more out expecting space, mic. about petrochem, side 'XX. will a for each when like, losers flip that products. But a towards markets And could geographically, little travel logistics as the we you gets area. get call worried to challenging which we're a to little opportunity anything we the retail. on related, vertical market, proportion So is The tell be I'm are how But anything to then because on end any an right? but

move that's asset. the retail where fleet very So a of we what our just model fungible distribution the with and an And growth flexibility is might example out of this be growth. and warehouse can into of

has think solar I plants, just power strong, talk but may could and and are even not losing, to when power been realize conventional broad winning markets wind. this not geographically we that all pharma. healthcare, and people technology, Probably So the

So we of there out there's feel plenty work to fortify guidance. this

like enough drying of we're you pickup activity with happen non-res without seeing pipeline the feel of airport and and starts? now do and is explained project being just carry activity you're there's view, pickup new is that projects? completion of existing new you obviously maintenance you forth. resumption XXXX a that customers to to 'XX-'XX big needs your The Do necessarily the deferred even just What largely into mean, the of so I well late say up. just some you seeing to projects completion is

Well, don't customers project that's to because there to guiding be starts new question won't won't difficult a new our there in us order project starts. that I believe answer, be

guidance that all, first trend feel shoots yes, markets stability. we're talked some then a portion - we But old our green finishing about. there's some also up so seeing a And projects, through that'll of the half that's end of us And year. the resuming I first that the implies of your of in point, carry of to

projects a 'XX. project. So it's throughout new new back of even had We've not had like we haven't the half

depends market just end you're serving. So vertical it what on really

we that be enough support there So to absolutely comfortable business. new will feel work the

Got it.

Okay, Thank I'll over. it turn you. thanks.

Rob. Thanks,

Thank you.

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

thank Great, Good you. morning.

stock likely least for M&A? First, on M&A? rates capital potentially follow of maybe how trade-off hurdle but the versus couple suggest about you'd the time. you your and on that of capital does target just to think impact over buying rates I And word discussion on own between stay in are decline just cost to thinking your past for the your given years, - wanted I earlier the up would to some at low its at taking the seem And the guess, allocation. quite returns Fed

just transitory was a curious I look So not sure you is thing. this. this at then how But

for Hey, Jess. actually Tim, us. no change Yes, it's there's

deals financial so additional As hurdles. cultural three and at really higher, to strategic, say is it do. be that itself would set the we we the across considerations of. look we complete I more it, less of capacity a that of deal changed a as our of a it of we of every a as a towards will merits that continuing financial think that spending getting a the have the so deal as well-honed of looking fill with owner at hurdles process Those But we're at about sort ultimately capital we lack to and bit looking haven't hurdle more of that the use and M&A result deal result we categories outside better little across do those know a and

how with 'XX. an is two we the your Maybe that's question, just potentially industrial 'XX. see backdrop in kind construction? really wrong of maybe of can And but that, than a gas and opportunity I would environment second rate pick in it how my we is in mix grow mix maybe just get the how out the interact? shakes then assumption kind and isn't fleet of a And think faster interesting. some up end larger and would All markets, two dynamic markets which in is wrong, it's components industrial assumption, guess where be, as you. but I rate interact? in would And the And question then, maybe productivity, right. Okay, that again, absorption is less Should just an question here the those that was on oil Thank right. those that of of maybe spirit and that's you start maybe part shrinking

Tim. Sure,

in So I'll I'm said the you you're glad We have of we do you kind utilization. with maybe because wrong, of start first still opportunity question. think are. part your

time. first the That's

was quarter about against X.X break will our was to get positive told a an add It in still us fleet range, second high to opportunity about in in going absorption then it's single not a similarly. remains so that the and the play and driver QX in past once driver. your great QX fleet QX. comp digit We'll productivity productivity and we're the significant and portends, through for our see some We've model down comp sequential midpoint already negative that to that that's tough and the think us. opportunity guys what you you by comp the tough QX growth turn for year. but for here And QX, next us to have improvement, individual main going So what's components, we

opportunity that portends said we CapEx, Once we that, and remains to earlier. So great as absorption think growth I all we'll our opportunity. start to the in meter do

of year you than really this an outcome, don't rent comes from that forecast. As and why far the an and is interplay if end back mix, what we of output your up customers a rate designed we and mix that which usage have mix To maybe broad the of what help. we as is output have more to in renting But point, more us. is could petrochem could products

Okay.

that digit not in clear high you're fleet be directed Matt, absorption the to productivity referring range quarter to was single first that Just to down?

the - just No, talked and will negative year, even quarterly we direct a of with little QX. we people so in then X.X% but lot the this business to we a because about be going good referring And a we through growth the is want everyone. - comps, trajectory bit we we to want understand revenue high output a to misnomer. normal are a midpoint revenue that about think people want the for to productivity. that's When about it's actually think the single for you build give seasonal our fleet to don't year-over-year, And of guidance, headline really play digit

example, for a once billing enough. feel on day little that'll are an the that really fleet there in in that we For get impact productivity, the oddly year, one good through prospects mix growth leap tough 'XX. have less because comps, But we we is QX have about them,

Very good.

all for thanks time. Okay, the

Thank you.

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

please. question, Your

hi, Yes, morning, good everyone.

morning, Jerry. Good

years, about proved So are the proved about, earlier. the margin like next strategy that thinking trough? addressed over capital things EBITDA you does know you're you I the now How think buyback the at trough. can you books, downturn? and in talk buyback leverage impact allocation, I'm look you on what downturn. performance and count thinking five how as just mid-XXs, the performance XXXX been at since can light potentially the the And about the in near-term know I With restarting question know, given you a at thinking about on, we or we just thinking performance program out 'XX? how out of next and we you should about what about have four be that the focused the the can like in performance strong the you the Matt, cycle a team the board in delivering if

let and I'll Jess line. work I'll are us put with this Sure, XXX% done start to great But that the speak has to in we some on team the position. board of

words 'XX aligned out that growth. out mouth to done all - cash hard we We positive my We've work are of our I could were strategy the generate we If my with free are resilient, this we make we that XXX% do on to the get focused trough. flow coming could of build out sure board. through where we

new that So XXXX, no what it prove growth, control, comes through that is the growth, now given less or products you there's Now, that part opportunity there or opportunistic opportunity of share, inorganic market to the in the lack us issue for don't which to than to growth, whether be sites in going adding new anything and supply right We've had alignment organic about are products, add? ample to we're they do? specialty coming for to grow we products now. whether chance XX% years. we we've excited that Jess, is

our flow free And to looking return see. believe near-term Yes, opportunity the with. we as shareholders. I opportunities look then The going even to I'd about about add and is the the have And to at frankly, cash one cash continue that beauty we're as growth leverage the will and support thing additional think resiliency of cash flow. our think to we to longer-term, all to really our excess forward continue we what is optimally manage have that opportunity the choices, that to the we think then of

mentioned, flow. several comfortable our cash now them something we're debt board that that and officially conversation As continuing year. with right we with you topical it's review But with free pay to a Jerry, times a down

talking going a also shareholders. value priority, generative be so the about in the for allocation And as we're actions about capital also we take as to we're always, that's talking growth the after that that are

And gears, down X% highs the is you. your and it about just to shift then of call full utilization. that's mostly X%, productivity Thank off

as if sales that we're the in rate? hey, just CapEx, part of the should fleet some please? a the on upside year, funds just Can look, 'XX. is coming And growth So how deliver at with be rates? to that we're utilization there two of so was guidance of type those factor about sales much there. with so in on we we Is level mix about guidance, out talk just the you have allocating early you a look can it conversation? expand pieces, it's X% pandemic, growth that to we thinking lower that Or And of

that'll but think it, our so growth about I'm rate story. there, got I growth of you're and in the the output, which part You packed a Jerry. right, productivity of assuming fleet asking and I be lot

it pieces. touch I'll couple So in a

continued a in negative, frankly, QX. backwards where you're easy said play going that'll As Once an and that not overall that, but fleet to was we earlier, have comp were QX progression linearly I We going QX, be that revenue in linear to right. in comps, number, don't to and QX. will in or through a get left tough go progression we from we're productivity still expect

turn positive, revenue to productivity going is fleet going So is positive. to turn

of guide in that growth a we're So don't is want that's given we higher pattern, to, out to X.X. the QX seasonal little the you a after then QX. year opportunities to of balance in the normal lean that headwinds call those two in netting than get why the I

productivity at earlier, look feel covered you're I at midpoint. don't a Hopefully, Tim's the that, to the people is all X%, one I big as think So to driver X.X% And it's question opportunities of be going is answered Fleet points And absorption big of underwhelming. the there. getting. we that. I

that. Yes, you Thanks. did

Jerry. Thanks, Great.

you. Thank

line Newman Capital next question a Ken KeyBanc from from comes Markets. of Your

please. question, Your

morning, Hey, for the everyone. question. good Thanks taking

impacts one suppliers question your of on yesterday from on to steel wanted the at couple has back I next touch some So think cliff inflation quickly the a the obviously, earlier. recent color faster I just But highlighting And cost quarters. of side. Good really months. was increased in

So through growth number, the any revenue equipment? thinking color whether the on that's or inflation about via on slowing rate used how side you're

think, I So we as fleet we're guide don't we But I think inflation it to X.X%, will same the everyone, for repurchases. going did plug yesterday. our

inflation pricing not that's the clear, It's replacement asset. of be the to Just inflation. a

aggregate billion we ago. is It's we to selling of it $X.XX $X.X about the sell this million talk So not years hear year, going what it's replace. cost increase bought to us XX% four pricing fleet, when seven-year-old the the you

guided that the only that's we've to. actually So, of point inflation

it overall point bar productivity, comes it's it, efficiency in set that we of That's about through really to end it just the sure - operations could show do in offset after to all we a natural continue be the inflation, on the we we to that inflationary up to and that through natural outpace costs. overcome our that bigger I up rate could drive you business. functions fleet show go make fleet operations of why don't in to had can And our got productivity. business. make sure Your know, how hurdle to that going all manage you're inflation Depending market, we're it inefficiency, rate, it if a point.

touch to you the remain that's follow-up of your And The if we've end It's little petrochem helpful. talked little good lot permits about recent bit about portion give to No, could weak. kind your here color. in how and I you But market just that seen Keystone to just canceled, deemphasize just you've is, know that you bit, of think some the expecting did a markets about today? want getting headlines on exposure years. color a midstream with done business. the a I

Yes.

We're banking through midstream downstream knock-on even the bunch some of will is X% of upstream, have shape. business year. midstream. a for We're that X%. upstream, oil the this coming could being downstream not disappointed, not on go up downstream midstream, and smallest because would when sector. midstream in you LNG on of it's projects down think good X% part we're overall, This be count be when the gas smallest We good So you under the our only and right. But still effects of

not not a it's but sector, guidance. our this We're us for So embedded it's as issue overall for already company. meaningful a happy in

Thanks.

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

please. question, Your

in cold-starts the kind your Great, those guys the specialty can growth 'XX, of and kind then And say anticipating look I'm the in have, think from what's that acceleration we on morning. based revenue that? of beyond deriving XXXX? done year the experience thanks. typical difference as on Can the quantify down. you is And 'XX? revenues this you've with much how to cold-starts ramp Good you you into generally growth slightly you wondering between already, or flat all about

is more We important have is haven't our important, leaning value to like whitespace really continue to offer - in customers, we're the because into Steve, continue remember there. broken this down to services thing and it And that. I we just the lean the think especially we more add we to them. products to

Stop to product keep customers something that's about. XX And that's So really whether for larger important why us. these cold-starts Shop, is that's penetration. the gaps by are that's or what we're filling geography, really whether And that's you them, our to going by especially One the wherever have

one year as far revenues, of two type As disclosed we information. year haven't that

I and extent in well? something productivity fleet within is To Okay, you think each And would enough. other. in your XXXXas mix generally that what were rate XXXX anticipate offsetting then fair

in really in year and we That together decline point, mover be good done you earlier that fleet more the industry an it that bundled said And this the the I how we these absorption. We're being really anticipating why sharp told said, I they've we what has rent. that's depends responded productivity. also about feel to of what on to As this had purchases. we output, it's needle

and responsible So of and good management fleet productivity supply the components. all is side

predict. So we don't out, how really it to try shapes

assured disclose, very individual daily components a we don't manage much of the branch basis, level. down we rest time because and that through on way so manage You the the can we rate just just all

it. lot. Got a Thanks

Thanks, Steve.

Thanks, Steve.

Thank you.

comes Steven Ramsey next Research. Our from in question Thompson line the of

Your question, please.

or detail I more specialty and XXXX beyond get start trying changes benefits or gen to I'm now morning. in-sourcing you margin future? in-sourcing greater Good to rent guess with of Hi. gen being wanted fleet provides if on I at the just to specialty? to benefits any thinking rent that as greater what the provide can or

Hey, good Steven. morning,

far exactly gone like. haven't we that looks to as calculate benefit what So as

where you've understand really that situation a activity into get to of behind to could able have look financials levels normal to like. the be what really benefit You got

XXXX the about as developed way managing that they those learnings learnings the in the and continuing into our forward thinking Just we're to business. take

finite the it's branches. us, or less is, it as the optimize calculation much through the ebbs continuing managing impact each the as way For of to of about and activity we're the is flows what that

that and it's thinking the impacted we're benefit a our that segments. gen specialty business So, about as rent the forward, in has going

for something I benefit businesses for that focus can So a But I by segment it's a don't forward, what in safe this expect. be that that XXXX we're have sure continuing But you we're a making quantifies of number to as say focused with all either both. to share and now lean or even year. those would are whole, we into to the learnings going continuing that on

Yes. Steven, thank you.

the Okay, now, and on as location densification? do over And just location. total me? one-third that. hear go a follow openings can high you this one the for you of past the as that Can How quick locations then specialty year flavor in similar new at time? think specialty on cold-starts XXX to up far Are cold-start

as we're whole I once less certainly market has share. penetrated bit That's gen to the to just But share we a continue that believe competitive specifically, can than grow. business has the headroom business Steve. broadly business, me that little specialty we again, grow. But for as our business headroom rent feel too the XX% say to to not overall

not your going But for to question. an thanks to that. individual component give we're So

you. Thank

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

please. question, Your

Hi, good everyone. morning,

morning, Good Chad.

like loaded revenue little end sounds it back cadence your usual. than is So bit more

what's just was the more Is growth? drive driving that. get it above construction the little seasonal on that of that I non-resi So would industrial or more color a curious to

be we It's the not that than expected about The be so certainly different me I comp. going didn't what cadence clear really to back let and confuse all anybody. Yes, is too loaded. not end

the really So by largest far. if specifically, so good April had January hit in billings we It last off was start, really much year, 'XX. and an you didn't And got significant also really February a a remember, of on COVID impact hit us to QX. it QX mid-March of on have impact

comp why only the So the on don't misleading the of of to really the that bit year, headline. explain This reason and that business to the people about sense that's you, Chad? is actual at is seasonally we cadence that make that midpoint being the the we progression really previous different. on plan all too of to the that X.X% a Does a guided of is improvement

end equipment thinking If on you plan prior year shifting coming Yes, that fleet has sell to the just more about of helpful. equipment the average this? And And you're one can you're think downturn about proven markets? repositioning How what that's Why question be the then is lot case? you to more that you just like year? used maybe how around years. is about between that's the sustainable this be some market resilient can just versus a last given tack just versus in do this age talk I just costs, going in to

Sure.

there's yard. very on admittedly, expectations, by in his to important first buy sales that's years. the And a retail, this piece and equipment been So because is to contractor that's you XX I've that doing our it retail. going new on will surpassed was off it driven reason the sit of promise it I but no

it we're work. customer teams index, in that our have what are hearing confidence seeing we're what from our our to going underlies So customers

foremost. and first that's So

rest we've engine are that's relying we've what is well. And us unique done surprised customers sales think that I auctions. versus as we really benefited retail built of pleasantly or the that's for on trades as

back how it As as the don't was XX% over of picks very the of demand just it year if picks this would see robust a overall on activity as far 'XX. grew I viability continue as up. this it, year, up, half

markets it's that great broad the a the end business So in very of refresh the very serve resiliency that's a what did. advantage we broad mean repositioning, about it's way the we The having fleet. feel of part we geography. We And good I well, there. manage to

move have is so don't the dense, we don't because across move we to to network have country. our So, equipment

basis or any the not really happens just for. repositioning, moving that exceptional out that the where it's something a it on we're it's daily customer like calling and So needs. it anything And to cost

it Great. pass Thanks, I'll on.

Chad. Thanks,

of from you. Bank. Thank final Deutsche comes Nicole our line from And question DeBlase the today for

Your question, please.

one Hi, here. fitting like I guys. have Yes. this because in Thanks on lot I through a actually left feel call. gotten me for only we've

course that keep comps So you've guys guess these temporary dynamic, the And you maybe drop about of through? I'll exaggerated would about bonus recovery. these with maybe it impacting XXXX accrual normally lower quick. than what like actions the a extent you know, of cost through see talk but you what there's drop a is the XQ to respect I back? have more of can implied bit you've obviously, embedded you talk because kind some I in in coming maybe headwinds to

to to margin. the in into though one that And translates about I'll at biggest midpoint costs the bonuses. XX.X%. to use just basis the actually think our right reset million Sure. business points about is for I'll anchor a Hey, - going of for be I'll use will walk usually midpoint in - target. the the now If flow midpoint guidance, is I be to through that use And about that it XX through. at headwind not for Nicole. We of $XX that are XXXX standard the even is my midpoint, I

would margins, year-over-year about flat. it's that same if I XX%. then that So a ex-bonus for reset the million through $XX absent actually flow of perspective, from adjust bonus midpoint be a And at flow through

one largest factor, out. would that's So point the I

point the some is of other resetting other out The of the factor I'd costs.

with So see. and also the that in and increase through costs. a flow the will costs also back built That's I T&E, just variable flow we normal say the business the of would into activity the guidance that operating of to you some getting flex mentioned the

or some some quantified the Like identified professional haven't obvious of of really T&E beyond We fees. right? our ones,

the built coming like. into expectations looks that the those of slightly costs than what quantified in range at haven't We our revenue overall We higher year. growth back of some pace

Jess. Thanks, stop it. I'll there. Got

Thanks, Nicole.

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

call the today. for Thanks, operator. And thanks, everyone, joining

that. the we look our your is always, a online, find You'll to take for April. questions. Ted in forward so investor available look updated on please deck And And our at call as sharing progress

go So and ahead operator, end with the that, call. please

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

day. disconnect. now may Good You