Herc (HRI) 10 Feb 222021 Q4 Earnings call transcript

Good day and welcome to the Herc Holdings, Fourth Quarter, 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operators Instructions]. After today's presentation there will be an opportunity to ask questions. Please note this event is being recorded. to conference like Higashi. to now would turn over the Elizabeth I go Please ahead.

Silber, Senior by And morning, for and the page Full Aaron website you Officer. morning. strategic you, XX-K be outlook. the open Senior our and thank Thank the President and and Jason. Events Executive slides, Chief Birnbaum, remarks operations presentation financial, all I'm are followed Conference Earlier prepared Officer, to by The Financial ir.hercrentals.com. Larry and at all Fourth an press on release, on fourth-quarter our Vice Officer. Earnings filed of Operating Welcome our industry Chief including full-year IR joining and and Quarter of XXXX and and President comments with view joined our Year Q&A. were Call. will This results today, SEC We'll everyone this Chief us Vice our and review our Mark with Irion, President our posted

begin environment today formal risks caution These on forward-looking to statement uncertainties. like our I'd from call made review see our we that on you remarks, to involve actual I Harbor the you statements X. based the include differ are this our remind forward-looking materially Safe statements Today's will and statements. therefore could as it Slide would we call. and Before results on

XXXX. of Factors the year to section You Report XX, Risk refer for Annual Form should the on also our ended December the XX-K

operating can conference found information presented GAAP in is that to these will the basis, presenting In evaluating performance. non-GAAP call be we equivalent non-GAAP for useful results closest financial measures GAAP believe the a Reconciliations the to in materials. addition the company's on we be

dial-in a in of be this instructions website. our call earnings Replay replay via our through were accessed included this webcast or a release on can Finally, morning.

or sanction call of call. the any call not I'll approve do any transcribing the other now and permission not for We Larry. recording turn of given this have to over

Please XXXX and Slide rental good Herc for for teams field our equipment and to Elizabeth, outstanding X. us. the to steady optimal performance turn be morning, combined Number an an excellent with Thank and The and of out for you, environment year industry everyone. support tight supplies operations Rentals. a pivotal have equipment time demand turned created of

Our completed contributed utilization acquisitions. in XXth, added we increased another strong and to XX.X% dividend a approximately quarter, XXXX, total December year-over-year of quarter record fourth have year. by Yesterday, reflecting volume, XX million. to rates. quarter, cash of $XX.XX which increase net fourth in share Since per basis our pleased acquisitions seven we announce was points fourth the for fourth-quarter initiated we cumulative were We to in the dollar improved mix, a also to XXX the In outlay XX% XXXX. a $XXX quarterly

September. Please Our from the and strong Slide XXXX Investor presented Day XXXX adjusted turn what the we XXXX X. going to we we at that last for guidance raised performance into is forward providing expect momentum EBITDA and our growth number clearly

outstanding fourth the results X Slide last three quarter metrics. results reflect new the many continue years. operational our demonstrate financial in fourth quarter Our records to shows execution over of and

not well. performance to a unusual but only of with the COVID-XX, share as impact comparison Given in we XXXX XXXX due the XXXX

specialty million year the continue compared XXXX. year, market businesses, our XXXX performance trajectory. $XXX.X growth our to could was solid grew rental prior you a Adjusted over an XX.X% XX.X% share both of from over driven $XXX.X our which XX.X%, performance in increase see, by revenue business EBITDA XXXX. fourth in pre core the over growing was our in clearly outpace XXXX. by performance prior of to our or and and accelerated Equipment -pandemic XX.X% As and in This million quarter, increase

basis income in quarter diluted margin, in operating or year-over-year EBITDA year. adjusted $XX.X to compared points, $X.XX diluted We improved million XX.X% share net a of reported fourth focus the share leverage million 'XX, last with the fourth Our or per $X.XX on XXX $XX.X another quarter record. per of

presented demand. Investor strong Our likely time steady last tight an a industry-leading as fall. Day you supply team goals, rate which management equipment delivered exciting inferred favorable the results operating growth and for environment in benefited Herc from at is we our rental from This

achieve customers excellent team committed and greater service Our solutions broad industries success. expanding to even has providing rental and of customer to a array our to

welcome all December employees to locations our help from the that our built Everything us over Now safely, do our X. performance efficiently, of customers X,XXX day. customers acquired joined hard every in communities team we to effectively since work members promise industry, XXXX. on of the our commitment history years achieve optimal and XX With Slide and on a future. We build brighter is equipment rental and ensure

market today, of in locations Association. and increase addressable now we to are of XX% American about and XXXX, Canada, the XXX North to United estimated states is $XX year-over-year The a be the As provinces. according size American in across States Rental XX Canadian five operating billion

we the market as We M&A. through overall to continuing both the addressing to our and opportunities continue momentum and expect the by grow organically outperform industry in

to a X. Now, addressable please expanding have capitalize Slide industry. We intend fragmented an turn truly we opportunities in market on number rental equipment to and

before take I of fire the Our advantage belly experienced what call have team exceptional in and opportunity an has us. to

focused the As ESG from elevating maximizing technology, capital. you our allocation this business, integrating expanding pillars business, growing at that specialty we our can and our our of Day, slide, see core Investor are strategic introduced major on

has see let share how our delivering just X, XXXX. pivot me with you a how tough we you I Before been to On well off number strategy that results. just Slide proved hand Aaron, XXXX from can will

dropped as reached in times margin X.X a XXXX we XX% even has And all-time 'XX. record the XX% Our from end of higher an a for times utilization X.X reach Adjusted of to the EBITDA goal. for to dollar at year. net leverage jumped high

here's Now, for in Officer. more Birnbaum, the our Chief our and Aaron outlook, our quarter of Operating about details operations the

team XXXX. Thank you, Larry. year. challenging of able local and field customer their base COVID our a the execution we serving demonstrated our serve every year-to-date grow from a sales, Despite our pandemic to markets. to Whether operational the serving in how local to front-lines was to our business team were circumstances. and environment, conviction a our continue our field year. results on want quarter management, I'm our for teams and commitment of or everyone. we thank It at national them proud I and and the here support What in our teams. customers, and branch matter our their the good were And center the commitment and response no outstanding The commitment customers overall. the supporting we what our that field in reflect day morning, overcame memorable challenges customers and support so single fourth support

to Slide XX. number please Now, turn

with XXXX XXXX. higher million QX compared rental momentum. all typical to from than and are XX% of showed solid to compared period the showing continued results exceptional in and and decline Business operations. quarter $XXX.X core revenue XX% end-markets performance Equipment quarter quarter Our positive to in XXXX in regional of to was performance fourth the XXXX rose seasonal a benefit in in solid compared continued and comparable activity be our strong our The operating and mild fourth was the our all business in more XXXX.

control, we in as fourth to continue ProSolutions business market growth quarter remediation and our of double-digit XXXX the generation, year-over-year Our climate also the contribute share equipment. in continued power to expand rental

services broaden our as and successfully we date strategic to in growth and in other our Our a markets investments foundation we robust we for content made also rental integration North market diversify and urban are markets. customer entertainment to is The strong track acquisitions base growth, America. The recorded continued business acquisitions and verticals of improvement targeted build the primarily pursuing we the to providers. for calendars industry throughout and our made production provide revenue strategy solid actively upon on related deepened

Our operational fleet offsetting continues and improvement, year-over-year costs personnel to efficiencies related performance drive Herc increases in in quarter. operating model in margin the

margin will growth remains further Our improvement as scale few our next robust. the revenue leverage years over and support

turn please to XX. Now Slide

key excellent performance growth. our fleet XXXX One behind of was in ingredients the

expenditures fourth quarter. totaled the million at $XXX OEC expenditures of fleet million in Our $XXX in XXXX with

of rental current level strategic full the Given demand equipment $XXX management in disposal of OEC fourth quarter million and million at the this quarter and the in of the fleet we environment, We fleet $XX for year. our equipment disposed in reduced of XXXX. fourth substantially constrained

OEC than the fourth slide. end Our of is The the QX, quarter, XXXX. fleet on at composition fleet as of $X.X fleet at side billion left-hand the of of XX% the about the end is higher now at OEC

total includes in end continue our and as accounted about ProSolutions ProContractor of which We and invest our XXXX. of for of fleet QX, to the fleet specialty XX%

also dollar each in the achieved to and fourth a We record XXXX continued XX.X% quarter improve quarter. in utilization

market our Our for received have certain fleet fleet purchases from from we early a of initial have XXXX, new we great getting equipment, tight We front while for department in OEMs. of a largely ordered a equipment orders. did experienced the job and delays

in XXXX, that costs equipment labor Our XXXX costs will shortages, industry the not anticipate cost but XXXX. were fleet industry, in as rise we to material increases and impact inflation, and continue

XX to impact to orders proceeds XXXX The XX XX last in used sales in with quarter number rose of will about and our contributed quarter in XX. XX% Please early mid-single improvement age compared an be last Fortunately, average now fleet sales equipment age months. year, in equipment of the OEC, turn orders Stronger in the our was XX% disposals our the an and channel mix fourth digit is a to Slide which on months the inflationary increase most modest as percentage to so pricing with of level. of year. our

national customer specialty our base sectors sales expanded with mix strategy. operating diverse of business business essential in large to customers our our drive continues and Our

urban Greenfield We are growth Additions markets to acquisitions core fast-growing drive growth. and expected in to drivers. to specialty to are continue top-line through expanding be and fleet

offer can premium due the we a chain array constrained while issues. of supply fleet market As to remains broader

warehousing, focus markets major verticals as will and control customers construction. other utilities healthcare manufacturing, [Indiscernible] entertainment, well energy, and and to continue addressable general on We as the and of remediation, expanding in and industrial climate

years drive last to industry the and over verticals several strategy diversification healthy targeted stable Our growth. new

see growth As by strong the we produced. you can

successfully grown multiple across verticals. have We industry

oil fourth represents In increased our quarter XX% contribution XXXX example still loan our gearing year-over-year, beyond. an and As up look support and revenue. Economy the double-digits is revenue. and in to rental XXXX. up in representing of gas revenue from our total the growth XX% rental It's only X% rental about was of local strong equivalent total of

in growth fourth full year be of customer accounts focus major a quarter source the continued be our New continue to XXXX. to sales a solid of and will and in organization

are high-growth are strong economy a continue to segments in of We targeting end the showing our markets recovery momentum XXXX. and

Slide million to We turn locations M&A acquired. into to with $XXX invested team. outlay pleased XX now XX. teams. these Besides please customer that made from and professionals Through the the we -- December XXXX able been busy our We're have organization. workforce integrated local was new different synergies, total all Now also we our to for skilled year our since have a relationships we net talented in we've and welcome join also and Herc We have team increase experienced we XXth, density thrilled XX cash integration improving cross-selling. are our revenue members acquisitions, for and of Rentals we XXXX. the acquisitions the

on see paid. could assumed the along we with acquired and You dates names companies the and of EBITDA slide the the implied multiples we

we pipeline the operating number targeted to Our our leverage Slide and scale. enhance turn density Please in our to improve continue MSAs seek M&A top robust urban remains locations and and to help XX. additional

In a spending amount goals goals Herc last the consider been forward. Directors at of that identify reduce by XXXX. our to to ESG emissions a our have help Board to time us need were began we meet of XXXX, intensity. and a discussing programs here we sustainability fair We for priority year's part be the The X established will of to continue objectives and greenhouse the gas will we areas set X that going and Scope

incorporate electricity we evaluating to We focusing our the initiatives and of can we of our efficiency of to to all our longer-term branches are our expand LED, reduce on to initiatives how gas process in greenhouse and other fuel seller emissions reduce usage, moving fleet. improve plan

benefits and a to we competitive made We it team the have to employer priority said enhance industry salaries we have in and repeatedly that attract of intend talent to be offer to Herc. and choice the retention

we metrics the on nearly to all employee employee of that of major base. XX% which annual X,XXX-employee improved rose including our participation recent Our showed survey

satisfaction to over Our understand of and Herc doubled and despite team prior been them employee improved promoter mission, integrating our our challenges net helping score job health new operations team members. the members XXX and the values. busy culture, year our business our We've of vision COVID over and

assist future development, Herc time and in at new are and training, team understanding We spending members career their to job also through opportunities. current

employee resource Our be support. the networking and Women opportunities, programs, in active Veterans also career-related and Group to Resource in Action groups, offering Employee continue

As day a branches of across every our foundation huddle We is always start safety everything the at stretch. do. and we with safety

TRIR committed a recordable to goal rate X.XX our our maintain under total or XXXX. We scores by to less incident of safety in or TRIR with continue improve remain X.X We XXXX.

heard of We're at XX% training. particularly means our their servicing striving with major reportable XXX% and means efficiently all perform days of one daily that with vehicle branch-by-branch about safety as focuses our always at-fault for focus of communications incidents, and equipment safely, activities achieved our talk and equipment that safety In to team the us them maintenance no and through DOT also and branches. least a measurement, supplying perfect past days driving at in perfect safety of programs perfect. and fourth-quarter days; days help you've will operations full-year, As no branch violations. a no It the and on all motor internal commitment our on in initiatives, various is OSHA accidents, continuous

are week. they safely days rental days when best seven Our are done a

pass Now, I'll to the call on Mark.

metrics morning, revenue, Herc high record as value most everyone. industry dealing the XXXX clearly key and and drive demand long-term supply shifted are come Aaron for train with had ongoing creation. with It's environment that a utilization. rich has All our strong equipment dollar our EBITDA will into The in and to good team Thanks great gear markets by rental construction end for of and delivered constraints. manufacturers

team orders year has throughout arrives our fleet competitors. ahead our job great a in our likely so fleet Our that steadily getting and new done the early of with smaller

peak our have for team the great utilization, led and fleet done job delivering model. fourth high equipment outlined performance Compared and at dollar to Day our Investor with gear compared operations improved customers year team shifted we and the response, the increased XX our in This of XXXX into fourth primarily by rental integrating to growth results right million of Our pricing. storm getting right consistent We've from our and excellent jobs, and Rental time quarter revenue a members the with September. fleet strategy continued full-year in and continue previous and to record Equipment XXXX, to managing that peak also and increased XXXX and has in executing the fourth due demands strong shows $XXX.X revenue and XXXX. well XX.X% on quarter volume customers quarter the are Herc $XXX.X Slide million execution that will momentum XXXX, XX.X%. into momentum last in summary with into XXXX. new

at points the XXXX to EBITDA XXXX, improving from and by million XXXX. XXX per for to in continue of deliver from XX.X% XXXX. XXXX were $X.XX net solid fourth comparison income EBITDA or a to XX.X% net margins the Adjusted diluted in XXXX of in share of up Adjusted or with in and XXXX. basis XX.X% $XX.X XX.X% with per We by million in QX compared $XX.X share QX adjusted profitability quarter in was also compared fourth XX.X% quarter diluted record income increased QX adjusted $X.XX

from over low the down to REBITDA rolling in to expected, likely historic XX.X% ability at base our XXXX quarters COVID slightly XXXX. strong cost for the our As of QX, of impacted [Indiscernible] effect the on side the margins impact remained was business XXXX maintain

the expectations over with return XX% point result for XX-basis in a successfully margins increase range was EBITDA For in expanding should we XXXX are XX% XXXX. our and record to to of year, our Adjusted targeted XX.X% line a to a of XX.X%. REBITDA with full flow

coming order business we delivery, revenues, the and On provide incurred side, our the superior customer into payroll, we -- expenses along have commissions back to record with to delight cost rental higher some re-rent, rental operating in service customers.

operating As invest platform the and to compensation benefits, part wage employer inflation that are have the our and for of providing our compensation competitive been committed will and to be strategically of adjusting in to in build become ahead stay and striving choice to industry, the we team's growth. team we of

is in our manageable and improve momentum rental faced down the evidenced left On in the last XX rate is invest to compared latest growth XXX illustrates managed revenues pricing points XXXX XX, our to to despite downturn, managing the drive as this investor basis basis The of reflects only COVID and our to the a in The quarter. trends rates business XXXX. context in how our and in people in on consistently last graph and QX price growth. of the highlights utilization quarter ability continue points All returns. well rates in can average upper double-digit we margins of of success all in our we of over XXXX couple we by years We year. challenges our the testimony in within was our results. Slide highlight up

XXXX is XXXX. we is operating and the rate and focus years. on up will over continue building we pricing also price discipline demand the and from right we are in our team. to three clear and steady environment supplies last our excellent our Our market this and to momentum on in current track equipment sales The maintain of of and record by continues benefit The rates X.X% executing of sorts clear of are all environments support professionalism tight our tools into momentum

to the industry addition, gotten the on seems In price leading price. intend have momentum continue and industry we to back

some billion. about the in early combination conjunction Our REC savvy us during orders fleet fleet is in XX% transition. and supplemented at those fleet size QX integrated with to of $X.X we Average an XXXX, receiving which purchasing most activity. compared by acquisition of saw closed year exciting fleet A the And grew with QX orders approximately year. our ordering in

on in $XXX.X positive on out laid can the XX, was the there we growth no the to comparison in as was of drive from flow in excellent million average growth assets. growth our utilization, to fleet in see represents that December we XX% time to QX specialty our XX%, a a acquisitions and new we record $X.X our our we momentum of full-year impact efficiency. Investor billion capital up At utilization we near-term future at continued Our as industry-leading Slide going approximately and XXXX. rents and This goals ample towards liquidity with we into our have operating invest XXXX the and driver Day commit by execution businesses quarter record record see for maturities, utilization return million time fleet Rate has net dollar debt On in goal and and We our track growth, of drove on recent which environment million a a powerful increased effort. business forward free in acquisitions, solid to of utilization. and of fleet momentum during $XXX before to mid-XXs value positive XX. QX, $XXX another as of XX.X% continue cash funding to After dollar generated long-term is cycle.

of of currently X% base in general we we rate a implies mix times end to share. our have grown We fleets industry. XXXX And X.X range have to at an faster times increase five a forecasted the forecasts. growth rental that which $XX.X XX% with XXXX, rental are revenue the liquidity to rate also payout a IRA than fund and seen the the our growth of our plans, well-diversified taking ample is momentum Rental our ARA XX, increase $X.XX This North share. and to in almost past broader and a general. in Yesterday in the the revenues company XXXX. On per share have industry XX% Herc is leverage lower of of XX% latest quarterly of clearly rental well-diversified more of we consistently have companies was industry a experience. annual a industry is rental scale with growth our times. large, X billion We with increase in than an $XX X market target consistent announced dividend and a broad in growth for XXXX, share, projects customer to industry of in American as scale of customers. much Slide

construction infrastructure steady clearly challenged even equipment demand supply OEMs in deliver to into is to of the with are of environment very a our worldwide to up-cycle X.X is from stages the any We proposed next This bottlenecks. and boost type new favorable rental fleet. to early the on we benefits spending. potential billion chain Equipment in manufacture get due supply before

and increasing Also, not should a remain facing our the really commitment is the environment for It of our connected inflation directly As business construction. to majority favorable to extent. our fleet cost our our rates service. availability, a of customers certain everyone fleet is appreciate breadth non-residential offerings, to as

our we will XXXX we that to and fleet grow our able continue look is business There share and investing to industrial have to this gain and by demand what ProSolutions a maintenance that strategic growth is share balance plants segment There's in and business. in turnarounds fuel benefit lot in pent-up and a and to markets is support do. of should specialty plenty we rebound to and market and of be demand sheet to real [Indiscernible] liquidity most for intend the growth in XXXX. in also Our that

can our momentum margins and Investor you from a billion of XXXX. continue for provided adjusted our maintaining of to a EBITDA EBITDA high are we our excited million goals XXXX XXXX. the and wanted to Day in $X.XXX margins billion $X.XX XX, XX.X% improve through to XXXX goal momentum top-line September. net range double-digit we XXXX for XXXX, September. results we're XXXX XX, $XXX side EBITDA expectations and guidance our year maintain billion. left growth growth growth We see On XXXX but expenditures our have highlight top-line times XXXX growth our three for raised with the $X.XXX in at and On last profitable margins raising Looking our with momentum in our on improved of of to currently range the last adjusted XX% what not at the we the very last capital to laid by to longer-term in focused Slide We're also growth to top-line our guidance business guidance and have only are out and intend to we guidance Slide raising

at industry adjusted And We benefit are industry into secular from an up new can at XX% Rental two and continues of to XX% industry rate CAGR growth the in rental. our to see a a through CAGR and EBITDA the leader organic rental leaders grow we shift grow XX%. beginning XXXX. to from our to a cycle, to times broader ownership revenue XX% it that three to is

improve by and XX% on range is high adjusted the focused for XXXX. to EBITDA goal have profitable margins growth our We to

as stages results excited the XXXX. over that, in clearly and in momentum the performance early Larry. excellent an a call the will take industry look anticipate advantage years likely about turn the are of in We strong up-cycle we of to result I'll of [Indiscernible] exciting are With that couple next back we and to

Mark. Thanks

Slide Now to please turn XX.

on We We in several goals Before by are when we we We vision we hold ago. we're wanted public we we move I committed dear this values values. to on focus communities. together, now, investing commitment prove out we line achieve mission years. nearly you purpose, to the particularly our we these responsibility, we became mission investors we right, and developed open values for given know every that talk manage to growth about also frequently and company our I And and over we making our to to six next wanted today a about but vision, Q&A, the the ourselves our to the Operator, what's are point business want results, questions. in day, our please do take years

Thank you.

begin from We ahead. session. Neil first question-and-answer Instructions] Tyler go from will Our [Operator now Please the Redburn. question comes

Yeah, with everyone. start a good couple please. morning, I'll

multiples are, during anticipate about slides That's understand question deals talk you what closed, you on and a those from if you that December. Firstly, you And then what synergies, you wonder I and can roughly, the that hit the a first where and your goal. the time if would insight acquisitions, could into period me uplift the think, I imply XX% where over B. parts in just share profits little A bit you've more help

delivery drivers to need you the the more most huge that be And the you'll talk daily have do customers? question about already taking specifically, months? over for you can and that and mechanics of equipment quantity of Second Thank coming such able of you. a the part, to offer like equipment practicalities to

Neil. Hi, Yeah.

the from revenue of most synergy those synergies On are M&A slide, enhancements. coming

did load. that year. in the were the Jersey. so Northeast, that a previous in typically over around first the we utilization place with years take return to of an QX Hampshire, will take the Toronto, probably The waiting acquisitions and what the Philadelphia, And had. and They New first bit get fleet fleet two So, I the we owners see increase from Aaron think of ability

increasing the we'd this labor concerns no drivers, a last We wages staff. the the call we than aggressively of knew mechanic have of our you we've been a it although and coming locations. I with in. more drivers the well but the year coming we existing We've than absorb we're think. We about on been absorbing well we've mechanics. prepared practicality asked a really question And I It fleet fleet. purchase Yeah, get tight market, staff, fleet a -- fleet how the in? -- is do can of staff about our board We it's year ago. of did have more and year bigger

this So, people curve place that we hiring actuality. putting in and and our we've we're in recruiting are plan aggressively that been achieving for growth [Indiscernible]

look XX% fast by little it's meal If the fleet on and up at the going fleet it bit a in a on clear quarter comes quarter you in as rent as average fleet XX, that the up in by average absorbing slide more. Page XX% with we're going pretty

thank it very helpful. Got you. That's

go question Gilardi next Bank of America. Ross Please from ahead. comes from The

morning, Ross. Good

wouldn't Hey, Larry. the I on broader quarters? there acceleration headline have speaking, just any continue is continue accelerate several just rates ratings. to based assume economy year a guidance reason X% EBITDA this your mean, of that, just and why and ongoing X.X% to rental at quarter, rates now with the does on experience, to Thanks. They above next CPI your historical accelerate generally good running inflation morning, I rate for is this question just

impact. exact P&L our don't the rate, that different so CPI see direct we slightly is than mean I and necessarily the

are our We mean, an wages XX% revenue the are employee increase XX% in look our line seeing in costs revenue. rental you of to sort that's costs. to of of our at I clear maybe XX% wages, in but XX% or

do by my this expect margins can XXXX in rates three into continue. pretty to continue our grow we we when raise comfortable to continue We environment. to see to with ability that which midterm, feel the So,

industry over inflationary You look back rental previous to environments. the

benefit got You the and early it into XXXXs get the inflation tends industry. back away to to rental

the positive necessarily bit of general. a a industry as not in is a So, challenge inflation a cyclical business, to it's little

And command incremental opportunities with and where some puts and continuing at point secular the in the types shift, channel the tight to of gear prospect opportunity we bill a seeing improvement supply, coupling certainly of great our can and that rate. Ross that with hands infrastructure markets to customers in

then Got follow-up. it. And a Thanks, guys. just

more since 's general, in months. Herc active last over acquisitions on Just XX gotten the much obviously

one competitors? reason selling are Just that what's competition just And in targets? you're elevator you your encountering players are of number now? that pitch finding a the your these two to bigger what's from the right And lot general,

that do. we integrate, think frankly, we're of there what come how them how to a because is and Yes. we after. heard employees go us they've some of about them mixture quite Look, we And and we and treat seeing reasons of I some

are we We we're perhaps little growing, all keep of in order And the than that companies that talent these to the are some part to different, talent maybe so still that and in continue others, a grow. we we people need acquire. that to want of

concern always about, market obviously we how a urban is business we is where plans I this approach some obvious point look, and and a firm obviously tax in relative businesses. out the focused we where ago see don't looming there And gains as markets specific think were motivating succession they to years look, handle an in improved several. is their and and motivating are multiples where integration the tax? change how will There's are from have upon capital that high-growth So, owners we few opportunities. primarily we're at those certainly What's opportunity. a is, that on be the perhaps markets the and And what it do they see that's aging

XX% to And the to say just those contributed revenue contribution rates? What revenue ask and the all I are want growth much something EBITDA up of for Just on rental XXXX? was able in acquisition M&A how to Thanks. was equipment XX% fourth you your to 'XX. quarter you

of in that terms Yeah. out No, we haven't really broken communication.

given to it way down the with. you slide into ramped the the then rate there. an contribution is in the EBITDA then put expect, that up. look number at from from think of later of come to probably we that's the we've bill sort in It's I work can to EBITDA a that months quarter annual couple bill, guidance back or the while would takes They a get first run the you of

purchase you're price that benefit, XXXX impact say, can XXXX rate multiples Slide run on that looking more in at there's So, from you to a ramping a in get the would as dollar impact. I than of the our XX, to total EBITDA

guys. Thanks, it Okay. turn I'll over.

comes The please go from next Gabelli Sponheimer from Funds, question ahead. Brian

Brian. morning, good Hey,

morning, Good everyone.

when thinking a obviously you you're positive ability to about perspective. base couple your a are very visibility customer from What about real outlook, on Just your for from broad questions looking your how of as sort towards into radar? the of even of plan fleet? contraction the any growing if potential half Vis economy on -a and for that's year move - latter we vis the the versus XXXX,

Brian. Hey, that take Aaron, one. It's I'll

far QX. As strong as we as went it's the momentum, we very believe through very,

compared down seasonal starting we slowed is 'XX, As see The wasn't really historical QX very in normal year. mild -- momentum. to we're strong

momentum, of fleet. lots demand of for lots So,

lot days. into with fleet just of continuing We bullish healthy projects these seeing I -- who healthy and say. very to environment business very, overall, from from demand do the very a customers, that has demand customers. think our our we're I coming and We the large have to fleet in from verticals manage verticals has a market new and in point start. would the different still our view we supply of customers. the from economics But the demand all Very our see operate

Okay.

Ross to of you is X.Xx? look bookend given either ' on back how you I'm size small acquisition if you could as acquisitions, question big would consider -- Going your the that or maybe leverage now curious the acquisition side at to at an the about

themselves I to either lot available, right? We'll that's on on what's limited making available left the a Yeah. that look top market. rental not out are or available there end, big just companies -- There think the to of

was which million. So, It is -- year $XXX about deal a I we in outlined our did think K. last

range ability, that several million. we capability have under there do sheet, do that deals out I if see the there's becomes that biggest don't $XX And have frankly. And and So done much bigger certainly quite say the bigger was prepared it. deal balance We're are just the the that, available, that to to to we I'd and done that's we've than much anything date. we've look,

year. great great another to Congratulations and team. quarter, Well, your you Understood. another

very you much. Thank

Thanks, Brian.

Thank you.

Sachs. from Jerry go comes The question Please from Goldman ahead. Revich next

This everyone. morning, up January? with quarter has into industry Good Revich. cadence is pricing business? the significantly, momentum prices Jatin on about the Jerry Can pricing transactional Khanaa talk And (ph) over of the for of new on your accelerated you the course transactional behalf

consistent clear momentum. there's QX, pretty was through Pricing

to at quarter-after-quarter slide, increase our continued Looking we the has that continue into pricing to that expect XXXX. year-over-year and

at of the on QX demand season. and You the with in get back. QX, pricing job a into nearly getting really given sort you murky, increase the net good We've get winter the there at digit from fleet. so of obviously on into we're just whole our of seasonality bit And so ideas read get that end XXXX, done single That sort in inflation the the doesn't gets orders a the little in slowdown looking we've and into in our going pricing equipment XXXX. unpack to got

So, see we're inflation we're margins. as really, real you rate able to grow improve rental and our really mid-single-digit our hitting manage comfortable And towards increases. with revenues can results, our from strong

the And just much please add as And you now? as can anticipate pipeline you based M&A pipeline today? fleet follow-up, on the you talk this do a stands could about it how year

the or a that we of or tool Whether business and that active they remains pipeline present will type general cooling the or ProContractor continue new From standpoint way. depend fleet, size of to a a opportunities upon acquisition comes it's assuring business all as a robust our fairly and the Look, business and rental. specialty or business evaluate themselves.

did equate fleets. XXXX. makeup dissimilar All and those of come But I too it to with would size different different not in what fleet we

Thank much. it. you very Got

ahead. The go Research question from Thompson Please Group. comes from next Steven Ramsey

Good morning.

Good Good morning. morning, Steven.

To percentage entertainment this vertical basis have shaping what a -- Yes. on the for in And or then how -- you XXXX. being see roughly questions normalized right few to can up category, a And with, talk you that. missed this that of that premium is a vertical, you may QX? in I now? there share on lastly, rate can rental revenue start

there concludes comment shutdowns COVID. the they there's the as and a on March, that, December, versus when strong where was a sling the In that hiatus It's a January for content. significant were getting robust through take we still pretty last typically dynamics momentum can in there I see from late we business. part QX a We of like saw shot see still hiatus into but is from winter slow of 'XX. February break, down, ready in new 'XX growing the entertainment ourselves back

is on that there of you a could Okay. that rental rough And share vertical? revenue percentage

out. portion haven't the that we We Page the in XX, broken other it buried slide out, Steve. break but of That's on don't

Okay.

Okay.

as acquisitions those I for Or unchanged in then can new the you Sounds -- at CAPEX with that done are guess to branches? in you the you've CAPEX? is the you situation those some maybe loading branches fleet this XXXX. on fleet fine talk being curious recently good. And the of

we that screen But certainly amount Look, were these significant our acquired companies into of planning fleet, when CAPEX, fleet, we radar XXXX obviously. of incorporated on were all planning. and our we our CAPEX

will refresh fleets well. those help So a brands incoming will get of yes, and they them as that build fleet portion the

mid to FYXXXX? would quick Okay, that high And last there any version that cash factors me, one change in great. for in past years. operating that of EBITDA XX Is flow then range three the

to with so. continue think continue that should should I don't that No. That -- along expand to margin.

Excellent. Thank you.

go next question Our Please comes Markets. Ken ahead. Capital from KeyBanc Instructions] Newman [Operator from

Ken. morning, Good

talk wage costs color to could Good morning, I provide relative into little just little about trends first Mark, increases of first I'm guys. the you quarter. the view a from and more if how you you leverage curious I'm think hoping mentioned a personnel OPEX the you year. bit the SG&A half higher on could

Just fleet in context absorption. and with growth higher

Right.

business season through. So, the roll way there's those expenses seasonality to as the the in it's typical a

percentage than There the quarter to see rental dollars, decrease continues of is on of probably nominal look first the leverage. that numbers operating metrics a rental the as on just as to each QX QX those percentage revenues ourselves to the a to it way easiest into is focus we we there back-end off But drop as year-over-year and at be rental of more decrease a revenues, you'll in of focus of should and each terms flow-through percentage upgrading revenues leverage. QX half. a as quarter in in So, challenged

XX% comps EBITDA difficult guide absorption in XX% does to but some against clarify, REBITDA pretty still Okay. obviously you're the flow-through of the operating to leverage imply benefits? the flow-through, that up given And just for the today

impact it's to are our a our on back that we our while that, and XXXX in Obviously direction that take the work going but That's given into target year. COVID and the that's less Yes. focused ongoing than into target. XXXX getting us just to way for

delivery you're expected Understood. taking open And the here back up to does my half. for equipment’s supplier are schedules I a production follow-up. understand seem bit of It little just bit earlier then like a into that view or your can little of the half bit second but utilization? you you competitors rental how just a into you year and think industry this rates where of impacts availability talk some equipment about than

is Ken -- believe we this Well, Aaron.

until come We after think so that to will question? are as every and solutions plan early things next later get in of what delivery quarter the the that far was we getting to for half in don't normal the second really And fleet to second as year but some part the We your second normal schedule. back it's it we into it do it supply believe that single happening. We there'll day. for did probably had be

curious I'm for as impact have availability to on just if you view a up? starts the open rates No,

real going to think to rate the all pressure on up. that environment. going the create And that's going for to really demand and year fleet. think I I continues inflation got We've think supply favorable indication the the focused some equipment flood don't be to anticipate industry we through think I XXXX. to good. remains I that no a right continue environment expect than There's fleet's rate. there's going is that's I more be just But a be and so tight freeing of through overnight that rewrite way got

if don't one Yeah. mind. more, I'll you ask

Sure.

'XX? dollar fourth-quarter. the in think I up just put want how to utilization You in we record baseline -- should dollar about

fair structure the about in today, for seasonality? given are and or takes benefits thinking quarter Just and that is puts it absorption the minimum assume 'XX the the company any to is there from XX% of

a of on fleet There sequentially But our from last and pretty And takes a those target and our we to years, the that QX way for our puts quarter-over-quarter returns fleet. so get happening. improving mid-XXs hit the steadily business that's are now the for that seasonality. to and in full-year average. our on see are is continue been improving goal mid-XXs to the is We've the quarter for we've couple improving,

Understood. Thank you very much.

Thank you.

please Our next from go Melius question Wertheimer Rob ahead. from Research, comes

Good morning, Rob.

do it's My two to there? growth. more will I morning. that the And see mostly has And in picture sort well. stock pathways wonder to But guided, if very, you. right [Indiscernible], to do pricing from of also or deploy Good talk continue question more I acquisitions? look trended one well? and and obviously what have went which the and very quarter went happens was big going some on Thanks. which obviously really I good here know you just understand of capital what's what a improve you left about [Indiscernible]? just you pull talked improve obviously strong dollar going the you what could right, what it about trucking Thank you have sear to outside is a pathway slip operational of have left Is levers but do we

But and to to organization, and their a improve our our continue continue pretty as have sales hands and important in specialty motivated pricing force part of grow our pricing we've years, pretty pricing one I finish is we pricing And played enable then well and of look, us great will take that can to part the of over the and maybe to that certainly opportunities, dollar utilization. business, certainly several it card is off. And seen of price Mark for use. is you've tools the have we dollar levers. But tools as look well. additionally, improving all the our past

businesses tend And we higher specialty continue on Our to to dollar focus those use. drive a

there those improved acquisitions certainly utilization as to of on fleet with grow, enables which amount fair do cross-selling well. new our dollar add that and

on fleet just And Thanks, acquisition. Okay. Larry. then

And be fleet the year business as inflation, inflation the mid-singles. across you this, structured, touched the your seem the But to what you absorb your You at was hinted, into think have for 'XX Any more said you way future. in vendors? -- one hearing year with on it way. I high-singles higher And on I'll to could as all sense age the the is you seem there. covered from obviously, given have you're based any don't just mentioned to stop Thanks. might that

very think that mid-single, Yeah, and be believe likely a This is XX Aaron. it's 'XX be in that in it'll it again. will we we

we a of points. year couple period, So, ten about over expect

Thanks. it. Got

question from Mig next Dobre from Baird. Please comes ahead. go Our

Mig. morning, Good

everyone. been September updated a one surrounding already. it lot Good happened Thanks A morning, guidance Initially, this provided good outlook. I and squeezing guidance. is questions here. would in in guess for -- have your of Good has lot this that asked your morning. feels outlook like back since me whole I you provided you ask

at way to you better, what bumped look -- some got of set here this terms You more what $XX I'm pieces got has your ended new it in challenging, XXXX. million numbers? getting today. up your share as curious, the for you of the moving how of operating Can plan evolved you

much lot we in we put thought of September Investor than had thoughts Mig, good had a actually to Day, we and we'd earlier up coming pretty what I and with were that with so So, guidance at think, giving XXXX. -- XXXX the stage out a into [Indiscernible]

$XXX something changed did have in to million to like pipeline but year. might of going part XXXX. was bit, there [Indiscernible] what know the the A didn't later in in and since wasn't and that of of M&A the $XXX an close the back million it what lot of happened was of we a but One then additional close. end M&A was really we in going September that

a the guidance range. not it's of driver significant So,

a confidence main QX right see on gives the and pricing that holidays. rolls normal and I XXXX. mid-term think the strong of didn't really was in that the Business And we QX maintained real my up strong the we mid-term do. that the and normally seasonality raise end for the impact us QX later my -- until into

start the are think, main to I hot a and finish strong real drivers a XXXX, there. So,

be clear, XXXX outlook. your Mark, to referring to Right. was And I

for utilization. obviously, rental incremental time on trying you have I also And negative in for different maybe You what terms inflation all into the as do which was XXXX utilization, differently to a EBITDA better. costs I'm makes you you So, curious, the M&A was of of got of you're and maybe again That time as say, as mentioned well? but rate side, have curious pieces labor on Are outlook dollar in for talked but the about sense. if outlook here, a far carries you that thinking contributions, instance utilization? angle as it instance, moving terms I'm

rolls get be maybe results to we momentum results than feel QX that had than enough, I articulate QX anticipated Yes. September, us is going what better anticipated. actual we and we No, through I that wasn't and were but leaves it, into QX which better to our

year, 'XX that with and really than a confident that good rate QX. and up feel that and we're raise strong business out So what is very as that's have. QX we also the open of Time strong and ends XX% start to the guidance the year. XXXX and strong time to seeing. momentum to very numbers QX we us QX QX stronger into pretty utilization close momentum into and of hit closing we anticipated, the makes The and can our

on equipment. Sure. Are rental understand a as of half for comment thinking from Understood. you sales pulled you. question thinking Then you I back Thank different any about to Maybe you how you're down last 'XX. the obviously why here. 'XX? back on of

QX. than renting utilization much the size off it our in and equipment fleet choked for to rent maximize of opens our and there's is that, Maybe just value to there strong. so strong is the selling. We've the sale rental more up so time economic is demand to The of completely equipment to ability

maximizing maybe equipment be of QX fleet of of our our couple little certainly, and sitting So tight rental volume we'll that up the on of pretty opens bit. quarters rent. But a and just on rental first that XXXX, XXXX by

Thanks, Mig.

Jason, think got we've last for question. I time think, one I

Evercore is question Please Last David from from go ahead. ISI. Raso

to me The Appreciate I'll you you Hi. margins Thank full you. you the in quick. XX% adjusted made acquisitions had how in. year? 'XX; the compare EBITDA do for fitting they on be the that margins

'XX? the The full-year to of margins EBITDA of 'XX compared

Acquisition.

what Or direct acquired you give companies you the to margin acquired. can your the of XX%. you EBITDA if On relative just

depends, mentioning, and we than the run margins run of business. margins on improving ourselves. -- you're EBITDA businesses of we mix. acquiring on is that we the mostly just have higher businesses savings, expense general, coming synergies Specialty a businesses from in utilization would ourselves the really they the as I come lower There's than coming to dollar not really slide type the run tend business The It performance as say Larry than that outline those the margin fleet in. from general improving we're of and it's was acquiring. lower we're rents

that you sales $XXX about to in you late just the acquired. But organic something get the of acquired trying were would versus in growth revenue. back we the maybe XX% then means a million like And acquired helped acquisitions your $XX so Okay. the acquired, year, quarter million, what just were into if to $XX, trying of the said, margins that sense

So better understand market we your about share gain. can comments

into maybe sort it's acquisition the has off is it's year. impact let's growth been year impact I'd say immaterial. and the of more organic in That XXXX. be the building by say, this going The XX% [Indiscernible] to growth not through far -- quarter. XX% come acquisitions

numbers Okay, that's similar running. we're to the

Okay. Thank you fitting me for Really in. much it. so appreciate

you. Thank

any to question-and-answer I'd our for Elizabeth session. This remarks. closing like Higashi turn to concludes over back conference the

on we for the you. today. to with call you all And Thank look forward joining us talking

Jason. have contact you please Thanks, feel other If Thank any us. to free questions, you.

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

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