H&E Equipment Services (HEES) 29 Oct 242024 Q3 Earnings call transcript

Good morning, and welcome to H&E Equipment Services Third Quarter 2024 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Jeff Chastain, Vice President of Investor Relations. Please go ahead.

operator. you, Thank welcome to and of our on participants Rentals. Good the to third call review performance quarter today's morning, all XXXX H&E financial A website, with Slide discussion posted President Relations X, our Leslie Investor under all Operating and the statements tab are joining and accompany Officer results Brad as & today the Presentations. On Corporate today's Officer; Financial see the and in Barber, all can ]. A you'll supporting press the me Chief well on Events H&E that slide as on and and issued will Rentals Officer; and along also today's Executive on was h&erentals.com Chief our Secretary, earlier for John found be Magee, schedules Engquist, Chief release reviewing [ call. is quarter website company's presentation I contains morning's him, today's I this call begin please will securities the within laws. to federal review. But remind Slide proceed to Brad the as forward-looking meaning the X, before call of over that statements you turn beliefs about containing may, as such forward-looking anticipate and expressions believe, expectations, expect, Statements words could, and statements. statements similar and our constitute

the these undertake update evaluating The referencing of such forward-looking risks this slide measures call. Also, from undue factors known non-GAAP are investors, company not reliance statements. Form for forward-looking after is financial and other results on and company's date conference today's cause Annual risks in forward-looking and or to statements in other the presentation does and to on involve are safe Risk the cautioned during listeners to in potential not described statements in the statement. A Report included the in XX-K and contained any call. uncertainties, could company's differ today's publicly periodic consider contained which place statements urged Forward-looking summary the unknown of uncertainties we revise Factors materially those in to any reports. Investors, actual and these forward-looking statement includes are the carefully harbor call

disclosure comparable an measures our supplemental for call supporting to required the in directly schedules for today. find concludes measure preliminary the and will materials. That and release details presentation the most appendix including our these the press You today's associated reconciliation to as GAAP

So the Executive of over Brad Barber, to I'll now H&E Officer turn call Chief Rentals.

and XXXX Thank financial quarter Good you, of Jeff. third morning, the to results. welcome our review

As continued always, interest appreciated. Proceed H&E Slide and participation in is to X. your

results [ segment. Also, business assessment. give my project exhibit construction the environment With the the remain industry rental give third quarter the mixed key slower branch exception positive to approach with growing a further decline year-ago our metrics growing select identify some headwinds, and well construction to we XX-state quarter provide we industry key long-term the our more lower ] across I leading constraint physical growth. execute Rental financial rental across spending trailing evidenced [ our of with confidence our incremental an performance non-residential certain mega industry footprint. ample continuing factors The by year-over-year total weaker in of opportunities, types. The continue equipment of want verticals more financial levels details the period. the to thoughts as I'll our spending expansion in strategic operational measures performance availability in near-term as quarter measure Despite on us these the XXXX and to weighed and spending utilization, program, presence third of led ] to our on as to that support on lend rates, as the equipment generally

early XXXX our comes review expansion Finally, thoughts achievements what some behind and on next. I'll the details

please. call Lastly, financial third performance, will the Slide then and open for quarter we'll our we X, on commentary follow with questions. On the expanded to

to equipment both sales financial exceeded Total XX% key the the branches. On a XXX our in including close in rental rental trailing year-ago quarter, reduction the revenues X.X% lowered about quarter revenues in to moment. age sales our very of leverage quarter more fleet mixed. rental I'll XXXX. on have in to period the our new of in design strong same metrics of third XXXX, XX-month equipment. We third physical XX-month compared basis again, rental as improved to than of young a from fleet declined trailing equipment were, say due impressive Our point since XX% basis, by acquired offset equipment X% primarily the in X.X% and more XXXX. the decline was in quarter. Total achievements investment and revenues of the sales expansion record the XX improved addition Margins quarter by a utilization locations were

Finally, as pace reduced or The increase billion, quarter. OEC our the to $X slower an measured at XXXX. in the of our CapEx compared year-ago cost, each equipment reflects XXXX compared original gross third in fleet closed expenditures record an to the size at OEC by below just XXXX and investment a conclusion OEC, growth quarter in the X.X% of years of of

investment XX, Our was same XXXX fleet through the $XXX.X to million, period in to XXXX compared XXXX. On decline Slide September a gross XX% X.

to added year-over-year Rental to lesser in third the degree a is in rental and the declined decline fleet only mega utilization. Rental new XX, price points the rental of X.X% decrease with XXXX. where were rental quarter [ with while by period XX.X%, quarter margins compared the to project utilization locations new work, the in greater improved revenues year. declined to same basis rose utilization period, points. rates. rates a continued XXX matched due physical addition performance, sequential basis, XXXX, XXX demonstrated gross XX our rental ] in our with activity from lower XX year-ago on project term the in XXXX improved shift assignments. Average resiliency, On points, basis third a flexibility the last from declining utilization locations compared in the X to Physical longer in September of over down project XXX ending the of impact quarter X.X%, the offsetting modest Turning physical quarter rental months rates basis a some part to due the reflecting X.X% through rates XX.X%, largely a basis, X.X% and quarterly

Additionally, targeted our due newly commonly branch achieve expansion before costs activity was the the that new of quarter a to metrics. branch generated responsible for margin locations occur in opened our performance headwind misalignment and revenues slight

and months. to is to misalignment for unwind As average before, an we have discussed XX XX common seen it of this over

Local rates equipment. the will with remains of part a fleet of We XXXX third and to an continue the year below discussing the expected a rental but meaningful an continues slowing to to of was due demonstrate equipment to through rate remainder of of types want of trend believe rental operating measures. early to extended growth oversupply now largely encouraging transition interest in physical developed of X, without please. of remain rental XXXX. Slide quarter on in elevated year-ago the evaluation utilization more rates, period dollar observed moderating project compared over manage industry to XX.X% remainder from half importantly, to The XXXX. I environment the Finally, activity we quarter persist the deviation utilization our of some activity expectations. Construction equipment the slight certain XXXX, muted thoughts of has in with XXXX. and first spending XX.X% U.S. and the increasingly in the

Beyond our the consider. to for the with quarter, into fourth outlook XXXX more encouraging developing is industry factors many

a at spending, of or Dodge For a upward expected have a Index, Momentum last activity construction easing positive consecutive as levels. robust under employment the of implications rates steady a X indicator and construction September X and DMI, example, purchases rates conditions. Furthermore, remains remains disciplined approach has rental of are trajectory months regarding leading growth industry more with interest competitors cycle Also, favorable of through projects for gains for construction to the XXXX. Equally to exhibited months equipment. is on X continue lending reevaluated important, of local demonstrate

driver expansion into of An the projects of strong industry well are a remains number future. X, mega please. both of to increasing as as reside, the growth regions our for within Finally, projects Slide today our planned significant operation. On or of these

equipment. Slide projects deployed mega volumes extended and equipment XX. utilization durations, previous characterized and rental yield project active leading premium beyond providers on for noted mega a are of equipment. metrics Due equipment XXXX, construction multiple are stable projects. on most large their equipment to visibility I've As by excellent rental elevated to needs, on base demand projects calls, remarkable With remain

a a in of evolves. I facilities, ahead An estimated branches October. up location We nearly has of activity reside date disciplined will H&E Our our Construction robust billion is opportunities branch outcome data expectations. The to now record X commenced favorably, total our in in data on presence added solar of new projects, a ninth the bring operation. LNG strategic branch indicative continues scale to locations outstanding estimated branch from equipment Network in expansion exposure H&E's exceeding and expansion that deployed farms, of and the expansion as achievements participation the a OEC. including percent Dodge approach XXXX, XX% these in additional these on opened to trend our A record believe is a stated and to the the regions. projects of industry. locations grow Equipment to which mega in has please. does in quarter, expanded with of wind for and evaluation our to you increased several XX, of equipment number reflected as deployed scale have The name and projects PEC have H&E were as remaining new of on projects. The building led and our $XXX value found projects to month third operational rental achieved recent strong expansion a half of execution growing centers, A balance recent few. Bidding of continue accelerated presence to mega and our construction, projects of initiatives. Slide XX program, while regions currently opportunity export was greater lies want

in geographic Both close to count U.S. dominant XX% of our a across both through has When for and industry. now as added XXXX the accomplishment within branches acquisition, our locations following XXXX. XX% over up close coverage branch of accounting grown approximately is XXth. are new measures of XXX XX the and Our September states since XXXX locations

for target [ XXXX million, quarter expansion third achievements $XXX through remains highlight to XXXX. expenditures million. To in our conclude, expenditures $XXX growth the of significant gross ] Our million $XXX with a range fleet remain

among XXXX. a Our XX% best the increase in as close the branch the in count trajectory industry, remains since evidenced growth of by

our we attractive financial grow location, we financial are for expansion initiatives construction in under possible with position for branch opportunities improvement. a well-executed trends know the to growth equipment contribution our disciplined the same fortify of long-term with industry. At modest presence attractive of in a competitive location associated the approach long-term The evaluation future a our and that growth geographies long-term each rental from thorough is when the We is each Our headwind time, to addition and includes compared consideration. plan. that insignificant platform establish with new

to will Our future in greater going our discuss benefit an to financial and detail. Leslie? quarter Slide you third over I'm come. With in this, ask performance represents call turn to Leslie, investment expansion the I who will decades proceed to XX, and now will the H&E to for

$XXX.X profit, XX quarterly by of in in X increase a $XX.X of the since X the demand physical basis million And decrease to a weaker follows These XXX were our branches of and morning network third third improvement down Brad. review increased the in and decrease slight million largely compared were to due year-ago million of $XX.X improved million a quarterly basis third XX strategy. compared was continued Sales or quarter, XX.X% a XXXX. decrease with nearly X% equipment, third quarter you, XXXX. A to a of through quarterly and $X.X original sequential decrease year-ago XXXX. Reduced resulting totaled to in fleet begin $XX.X equipment of in revenue million, utilization was profit to modest $XXX.X the to I'll offset acquisitions. quarter fleet rental mix. everyone. partially and totaled offset to below accelerated quarter $XX.X due of million the of by margins. Revenues million the third rental million a the and expansion of compared addition, down quarter equipment. the this rates. Physical $XX.X part new was X.X% in posted On X.X% the to XX in the quarter, year-ago $X compared on $XXX.X locations rate in welcome, the added oversupply lower years quarter. Gross in Revenue $XXX.X sales OEC in a quarter XX.X% Good $XXX.X the resulted XXX quarter XX% profit closed driven rental year-ago rental added location demand with of the unfavorable basis. quarter $XXX.X measure, of from in X.X% or utilization of was strategy total the points. Rental quarter quarter Rates third in from equipment down third just million in following to branches and sale down of billion. quarter revenues points XX.X% an improved quarter. new or to with with a million our year-ago to equipment third rates branch in equipment to quarter XX% close compared The gains. Thank of revenues. Rental million primarily Gross the the compared partially by quarter the a gross sales from management $XX.X decline of cost, the in margins from our sequential X% due million of or our further morning, The increases $XX.X fleet in revenues, third an new margin third up primarily quarter, in Slide million rental of OEC, declined XXXX. million the X.X% basis,

year-record to expense, while million, the from The segments, $X.X and sale compared XXXX As margins goodwill due XX.X% the $XX.X charge Brad XX.X% income margin utilization was third due XXXX. goodwill million Slide of or charge. million, from non-cash rental XX.X% margins XX.X% the the compared was $X.XX excluding equipment share in result impairment charge. Adjusted in comparison. Slide lower in in over a third the lower to $X.XX quarter rental our a XX.X% impairment primarily $XX.X declined or XX.X% margins, same or net XX, in quarter, explained period comparison. quarter million, at the the XXXX, third equipment which for $XX.X of of income compared year-ago using XX.X%, pre-tax year-over-year XX.X% excluding of Reviewing SG&A compared in quarter quarter, experienced from XX, over income quarter income diluted of initiatives. Total third share in from and operations please. while rates the compared operation, to an XX.X% Adjusted on per were $XX.X adjusted earlier, XXXX. diluted The charge, on the included new was XX.X% impairment quarter to Income quarter remain income to of $X.XX third share. expansion quarter our rental operations levels the rental unfavorable revenue $XX excludes mix. Proceed margins the margin margins the equipment business the The to XX.X% please. lower of or year-ago million, decline the were XXXX to impairment third rental year-ago margins lower same per was to was diluted higher million. calculated third branch in compared to compared net Net period $XX.X headwinds resulting rental XX.X% quarter, sale the to were our of the million of in operations to year-ago of per

the $XXX.X The in and EBITDA with quarter XXXX. Proceed third XX.X% Slide to in rentals. to Adjusted the in please. the for SG&A in million Our third adjusted the $XXX.X effective declined the compared was XXXX, to due same income to EBITDA equipment decline third in quarter compared year-ago margins lower margin quarter. primarily on to was XX.X% X.X% compared XX, quarter XX.X% million of XX.X% higher rate quarter the expenses tax to

XXXX. increase, the million, compared contributed $X.X Next, third $XX initiatives, quarter The please. million expenses to Slide the in following previously expansion totaled X.X% in expense the mentioned XX period. the new locations approximately or which quarter $XXX.X our third to of SG&A branch over in XX, due was $XXX.X million million

of well XX% expenses, fleet XXXX, and rental fleet the an and expansion please. the facilities well year-over-year fleet resulting operating totaled third in the in of due which increase expenses. SG&A of rental was branch expenditures commencement depreciation in operations, the largely of with incurred capital New revenues to to amortization quarter of million. XX, in wages, costs decrease to a net revenues lower expenses, quarter as Gross $XXX.X ahead salaries, third led and employee XX.X% capital with sales. Slide quarter other million, third branch as compared combined from expenditures total $XXX.X in X%

ended figures and For million, $XXX.X months these respectively. were the X September XX, XXXX, $XXX.X million

million, capital with XX, ended for gross the gross September fleet accordance September totaled approximately expenditures third quarter used over $XXX.X or $XX.X period Our flow ahead $XX.X through compared months million September XXXX, used during over million, was XX% PP&E. million, XXXX, net the And XX, strategy X in sales period fleet lower of of utilization. Gross PP&E in than the our fleet investment $XX.X the same PP&E months the cash X PP&E flow management ended the lower of cash million. Free with XXXX, million of CapEx was investment $XX.X in in capital XXXX. to gross net of same was expenditures free $XX XXXX

$XXX.X free Excluding X XX, totaled September ended million flow XXXX. for adjusted the months cash acquisitions,

on an on X.X%, based our million, on XX, a increase acquisitions. XXXX We Fleet or $XXX.X to in growth quarter of third representing includes OEC September million billion, below equipment XX. from nearly XXXX. just Slide $XXX original $X in fleet of compared size Next closed cost with fleet the

Our XX.X utilization average Average XXX points compared rental from XX.X please. the at of XXXX. of quarter dollar locations. Slide of compared in second was average physical the to and year-over-year industry impact fleet XX, age of quarter basis the months. same the and was months, in new quarter quarter an our branch the of slight was XX.X% XX.X%, decline and close of age XXXX, a rates The XX.X% to in indicative lower utilization third

to ratio leverage a Our debt capital ] X solid to measures, remained of structure compared steady Xx. with [ target net X.Xx, of range including a

debt $X.XX billion availability XXXX senior we Additionally, $XXX.X under of December notes facility. Proceed ABL with on no unsecured XX. million million, excess $XXX the borrowing to while Slide senior billion. credit third before and $X.X closed our maturities liquidity, quarter cash and was of availability, or secured have facility the We approximately

by as the ABL With we $XX minimum Our billion, remains any availability remain million. availability, of of concerns. $X.X free defined covenant excess agreement,

stock Finally, of XXXX. per quarter dividend the we in our paid common share third quarterly regular of of $X.XXX

While material intent for please. resulting pace spending dividends in are to is our observe through driven financial a our our lower appreciation quarter, of XXXX improve operating performance, to revenue periods we in of services improved results. It motivation to to the as cyclical focus it margin demand margin trailed subject financial weakness in slower pay that to pure noting To year-ago continue the and continue construction Board third performance approval, XX, close, model cyclical business our was dividend. Slide of expected, and revenue to a worth consistency transition expansion. by our the decision during and and stability rental meaning is our our to

same competitive in greater already business and Also, current market our we diversification true of establish to position commitment and our and the XXXX, expansion is as geographic to market operating the manage We demonstrated steady our XXXX the during we scale. especially from the expansion as will gains continue intensify our pure-play focus, dynamics. have

cost, Brad locations As the XX already earlier, investment represent financial near-term the added are of substantial since our end financial benefit, initiatives there contributing to as expansion providing pointed XXXX future, have an performance. new our noted quarter third of in the out. Many but long-term is we of our a

regions as further continue advancing Additional capture to our of new position in we expansion while industry. opportunities rental to the in build position the presence U.S., our XXXX project in will equipment attractive H&E competitive

now We provide instructions. to Thank Q&A ready are Operator, begin please you. the period.

Steven question first UBS. from The Instructions] is Fisher with [Operator

rate Can the decline conditions, be excluding just of of still off impact? Last rental function parse mega in you what's project out want a I just just as impact expectation about clarification. mega to have the market maybe you function rates would the you it talked the negative for quarter what mix start of be a a as Would QX? sort year-over-year with broader there of projects. the and

at longer our of view gains. the larger decrease We're rates level, but small rates still And that product is customer me not mega moving some fair see conclusion a entirety medium-sized providing that duration. to the say because those projects base, we that let and our it's when of these for very our incremental

market, gains. local some end None. minimal market, we're getting no So, in small, still price medium-sized Zero. degradation. customer cases, And

Our to projects. price of decrease more mega reflective transition is clearly our of OEC

of a to see follow question and positive a to light rental more more non-mega guess the about projects, just more in just in mega if the even overall, you're path to could would next that, have So, if the -- in there's curious that still stabilizing for And [ 'XX? 'XX, might in ] XXXX, if really have your outlook you you you of continue rental stabilization in or just rates theory, any positive especially holding projects think you that curious there do think fact rental of are rates I when rates you the if year? on then Okay. on

Sure.

no the to seen rental to quarter. I product to decline I will we've what incremental going think projects, this doubt rate that rates, there be some can reason believe I to recent to to dissimilar in quarter. our most trajectory on no deploy have saw or here incremental certainly continue in as have you the be. that's pull mega and going we're more have

question we likely down answer. basis. The on has inflection starts difficult out when it is increase, completely that to importantly downward will and no incrementally an a so but see So and sequential levels more trajectory, of more small, really to

back half thing, that 'XX. our focused continuing for and get I is our that's The of all with possible in competitors buying product -- on returns we to discipline one think see we're investors. the

going and this and I our a of and We're of many medium long-term, as large on a some base. And understand, projects discipline of time, cost talked not traditional these and decrease behavior. At with in our from price declining in business rates happens, still to customers. attribute invest of to So, improve. But deployed folks fully point yield. way, positive times, which I when expect price more job, a zero our a with lack think rates project -- about make we've we grow come in see decreases that one start interest I particular increases small quantity anticipate more don't the standpoint, work mega will face products to we local desirable an see most let customer me with gives answer anticipate very

The is from Group. next question Steven with Thompson Research Ramsey

I wanted projects on in bit go throttle shift maybe full bit mega on? And until strategic as are need about markets a secondly, competitive makes you mega to favorable? way exposure standpoint, in competitive projects this at that. the mega back backdrop projects questions capturing attractive a it think not about the return two from just a and then pressures any as evolving opportunity of as to to that Is more, kind capture Or your a still here then, early you think limit come you or way, think do on that? local is you

their standpoint, question Sure. of seeing we're competitive in substantial a any rental bit of rate a a it's declines aggression things a the change. competitive further all pricing more lower not From part for the cost, same. To can Well, gas could so first is and let me achieve your there certainly It's a but take Their or the first. we get. and just little the take little factor no rates, variety are on consider. bit ] second more. we not [ we of Frankly, more question, foot more

the So opportunity, stretching be and billion facilities. to We're we're talking we're our of We're talking this things about that we about depends projects things on very we nature going call out talk plan measured about may it that close it talking in the with. existing depends customer on to addressable $XXX about It close we what on be want really geography, product that the are the -- away. project, within not to are dealing our hundreds on. depends that after. When miles of and that's we

there think we many more become the no those primary But are other the are don't out. consider these but and selective we're very are same. pricing more I it's So variables, projects anyone's going three we of variables more forward. as aggression, to inherently aggressive going

ones best the that we're to going variables as possible. fit understand and environment I our we well think pick the So very

think mixed want kind and Okay. backdrop. XXXX, does this this, with pace longer this of like Just intrinsic That's I term? growth change of long-term your to the between at curious about to your lagging XX growth helpful. If stays world of in And strategy days then, view the strategy the a to environment kind demand your for position where locals the longer? in megas growing, kind how sluggishness yourself on increasing assess XX locations a you bit

returns for just a going XXth or statements, sluggishness today, XX to as of your environment. But we based which going done said so. the type looking these more XXXX. If expect it open in of but has. all real schedule. in environment more you robust more current would investments. can We that XX markets going prepared to fun XX the locations It's a and serve continue locations them in we're it's be we off our durable And like for we're if course, to -- long-term we're location at measured growth environment see basically don't same we said, [ decades to opened us to opportunity I year. decline, of contain that our long-term to to to the forward, that us a pace the to see to question, year's my we locations are most to the That open These announced certainly openings come. construction. doing the same -- level going ] We We with to individually, open give a are to the substantial XX lot for of we're profile, year, But in highest slowing this were

more same. more slow doing we're could So, safe is we we're this certainly a current comfortable of is negatively, return for in long a to going level, our going this We to a It's time. pay which the would then what see very view, current really at this environment, something But down. and do we're shift investment. not

question next Citigroup. from Timothy The with Thein is

on maybe perspective of I just kind to you're from but -- high potential in for million there. to Formally, just capital the that thinking in you're extent 'XX, year forces I million? On on about $XXX -- is $XXX the first point, have target a may a and level, backwards the you 'XX the of this the go -- guess hand, at but question what how rate gross -- degree preliminary of relative this that on one year, further outlined competing this guess time you you to some and hikes optimism kind to based spur the

capital in what perspective from thoughts terms about 'XX? in Board the a initial are thinking some of just and you maybe So,

Sure.

Tim. Let the -- question, me for thanks

going Our I year going be to is speaking to CapEx to of -- you're primarily know be remainder this and replacement. for 'XX, is the

Our the growth is year. now for capital spent

on to cases. budgeting we're in just manufacturers QX, in forward. not better in CapEx I process as the in comment going that replacement our middle position you tell so we'll So We're can seeing have pricing capital. speak, from we of we're selected

So we're we'll -- on bit early get rental to in on a But just really do XX better too little year. power XX it's in next planning our bear to comment. Again, on what locations XXXX. new spend we mind

going to where we familiar months. of up. mature open talking continuing plenty to offering locations we'll find Those that can we everyone's what with location expectations. Again, about 'XX capital opportunity. wrap we're are be will we -- far are think be I the But the markets a deploy XX as exceed that to best in as CapEx, as the independently typically they first year our in it

Okay. across to construction in perspective, later more the from obviously cycle, in more cycle, or maybe across from tends in from cycle. major different you can't the notable utilized be early product what where just just glean heavy a bit earthmoving of we aerials if the what maybe are whereas curious category, you're may able to seeing any you time think -- tend -- I'm to there a be utilization life little just you're of can the being be terms -- trends are that to as can I And classes? gleaning your which project

when highest our or earthmoving a make actually signs not that? in to continue earthmoving before, to we've we product, your look time, to product year-over-year. And of tell looking add point it's some in XXXX, forward any particular seen an to question. nice and have not is typically, you Yes, That's much year John, at have improvements certainly for showing opportunity to going utilization as be invested to this as we're But I at this us. anything unfavorably dollar where you can do improvement. Traditionally, we've calendar category. it's we

have obviously, Tim, on up is XXXX utilization. again, I to year-over-year equal. to it only every basis. that improvement utilization all specifics a a but improving, some going shown not and But good we point, be different thing to is sign while we not And earthmoving moving would there's but see earthmoving -- we add, I product have forward, in on each The line mean, cover, give lines. interesting, Brad's don't with different and product we only levels they're

Yes. Maybe sneak one I'll one. in last

On revenues up you these new kind about months of XX open, of that the the ramp talked you a misalignment is kind to typical XX lag cost. stores as you and

is maybe these, guess, efficient? Obviously, market you a that, more horizon time the As shortening you that more you've I you -- it continue and more of softer. some of do little learnings become along there's as way, just backdrop done the is to

you've locations? by timeline new terms in curious it's any So, of if and more I'm trend bring of these there's as maybe a thing, location seen if but just you that -- on location

XX Yes, utilization, compress. months of to XX different -- XX time to to like months of have been costs, for that timeline ago us to business these what in Years of kind opened maintenance terms we seen June last since seen that's 'XX, talk the XX locations. we we've metrics, operate locations for used it, We've you. have The compress. thing

to in question of on certainly weighs really progress, we on, of part incrementally but always XX on base But to a we utilization it's looking how what improvements. And our comfortable that started through what We're on the that depending and We're XX locations been months. continue grow your be of marketplace. number improve, we've to shorten and incrementally and we're produce to of possible. we our comfortable performance SG&As. our that that business best we and look as course, a as over of like then productive that's years on metrics to to expect very grown can So

The from next question FBR. Rygiel is B. Riley, Alex with

questions quick couple A here.

First comment you certain a types your equipment? can oversupply expand upon slight that is there of off, of

think nor is Most to really is, overweight And to of mega bit and of want we're one Just who but work reduce broadly that unfold. We product on, rent to it's CapEx a is reduced year-over-year more -- a We our saying guidance continuing what that are a in look, overall But every mean, and We for We product earlier XX%. year. think up, little well talked until slight probably bit little disappointed. being or been supply. there we're down seen [ And one on. continue the not gone. that indicator. -- this XX% we is best -- slightly overlap overweight somewhere supply type we'll ], that type give of personally is There's particularly quarter a have you've so we do think folks their between everyone products. CapEx less single projects more product to know the our there utilization on needs utilization go oversupply product variety is industry always I year we've the be

to in that be local going half reduction the what We are market start as we to second in of disciplined spur will competitors the the interest very work next interim, pickup rate And the hopeful in year. our see we're we're purchasing.

you And sequentially. bit there strategy then, used that's sales were Can year-over-year equipment talk the about driving a that? down

it's really just Alex, management. fleet basic

we to volume Looking that's equipment rid out, just XX need age, get we today, have fleet of. of the that aged under don't at months really our

that's really, reason. the main So

bottom is piece We retail categories some have have to Auction area #X sales. [ puzzle. seen if continued be We of decline. it some while certain reaching a to used priority one off it auctions, with been be ] some softening, equipment But -- our a that's wholesale. to the obviously, not that's in through soon. auction values little they're fleet for there's ] and going steadiness would that seen leveling sell one values. concerning, But We've [ and think

The Katie from Fleischer is next KeyBanc Markets. Capital question with

recovery like or any you markets any commentary give move you could curious you you end trended quarter? as But throughout just if depressed are there. throughout on of pretty and see sort quarter? seen local any to either if incremental quite how the haven't saw decline improvement wanted Sounds I still accounts the

improvement. Yes, well, incremental saw we

projects be more. it seen to utilization opportunity. I say up points We more but in time. But you basis improvement Our point picking don't not same -- the that you that see basis tells as easily was quarter-over-quarter, strength, just characterized, our any We things they're XXX and local markets, deploying XXX up that continue at utilization degradation greater to would certainly adjust quarter-over-quarter. that was there further unfair and with mega have

from we're pretty think forward. I here yes, go So, steady as we

have question just I equipment then used Those this on last bit is year. my than margins. more a little expected been resilient have And would Okay.

Just you those year? above level assume that going thinking next about curious you're Is XX% fair that going into continue it to how can forward?

XX% be is I think challenging. going going to Yes, forward

softening we As values. equipment have I some seen mentioned, in used

that as plus As stated to year, we mean, do percent far previous next expect on calls we've be gross to that XX I maintain margin. able

within fleet particular dispositions which of reflection the a is we're previous several it forward, quarters upon in past The quarter. was of sold of what age age to going -- age that what XX achieved more in par the believe criteria are we're the of the on -- our about was -- the a our of months, QX selling. -- meets sell I year. But fleet north Our mean, comes looking dependent I fleet QX XX%, with be to we've that's fleet

forward. percent can we So we achieve plus that still moving XX margin firm that stand gross

Showing back Jeff closing Instructions] to for Chastain conference turn our question-and-answer questions, any over remarks. session. [Operator this the no like concludes further to would I

look you and Okay, appreciate your Gary. us Well, day, Gary, everyone We thank assistance again. taking forward time with continued in everyone. interest to you. the Good the speaking today call. join to on for today's We H&E for Rentals. thanks

has now today's presentation. you Thank concluded. Thank The attending for you. conference

disconnect. You may now