Titan Machinery (TITN) 21 Mar 242024 Q4 Earnings call transcript

Greetings. Welcome to the Titan Machinery Inc. Fourth Quarter Fiscal 2024 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I'll now turn the conference over to your host, Jeff Sonnek from IR.

begin. may You

welcome Earnings and Machinery's Quarter Fourth Thank Call to today. XXXX Conference Fiscal you, Titan

We the Officer. Officer; release XX, and should have XXXX. Chief access for Bo and from have quarter Larsen, company, the Bryan fiscal Chief ended the Financial to By fourth everyone President now, earnings Knutson, January Executive

the If tab being at on website call is website of webcast, be received a company's ir.titanmachinery.com. release, will available it's the not well. Titan's you've on IR replay and the as This available

Additionally, factors management to the At forward-looking a period. no a in performance, based of upon everyone release. and in a inherent on release to section uncertainties We when made we therefore, Risk that can most applicable required obligation take risk undue go Titan's including more is me, filed during now the of more forward-looking statements report included and remarks and would projected information or providing ir.titanmachinery.com. complete the be of non-GAAP non-GAAP greater adjusted forward-looking -- and facilitate like presentation current update comparing including we're statements. webcast financial the today's company's believe remarks, basis. prepared Please risks We've most to of be questions. Bryan middle on measures our please statements We an involve Bryan, and excuse placed management performance, any in by discuss These them. presentation remarks, identified expectations those results in financial reliance these that in measures on should open be response be like page. measures, could same we'll and may These to accompany which the the to XX-K. may detailed period materially statements as future Titan remind located any questions of The underlying annual make Except forward-looking can adjusted on guarantee President their note may transparency statements do discussion cause that analysis the your Form call. call call, the measures differ today's factors recently financial not from actual the these today's Factors directly additional below results results assumes may contain introduce to law, to found of to today's statements, that Knutson. also and The prepared from in contain forward-looking ongoing particularly website, I'd financial GAAP ahead. prepared to included CEO, conclusion into the Mr. Titan's reconciliations comparable directly your those are

third of fiscal Bo legacy our providing modeling today's greater our by of while consecutive earnings all across in billion record for record operating to some incremental achieving share achieving than segments will some finished you, to the per by resulted with driven Thank context, everyone. assumptions. of This recent his revenue before margin put want our into providing thoughts will thoughts $X.XX. I Good begin record fiscal review call call a help year segment our marked was growth morning, and year historical share and a finish and on X%. are outlook Then today that our that pretax with performance of per earnings a We I and strong of offer financial XXXX performance XXXX we $X.X the on performance summary which of passing earnings Jeff. perspective.

is we efficiency At expect expensing Day. we back everyone meeting, durability ensure operating working outlined we across in cycle inventory following profitability optimization $X also exactly per to made arrived. this an then, position this strength, path of we a a effort and we remind acceleration the that a to of to our level of as a position once to Conceptually, earnings means greater that adjustments Investor we that XXXX Moreover, cycle. through we higher share. levels strong multiyear to in cycle so our that next were drive outlined necessary at wanted a through driving demonstrate remains of on earnings I'd hard to implement leverage the in the business the are our execution organization. Our the

sustainable proud of of place nearly Our by today. terms say remain large $X is today Those to power more levels and environments profitability drive X.Xx. our are share from brief leads I'm of commentary business to our today, fiscal earnings in we the outlook higher principles me demand all thus per XXXX XXXX for introducing to and in on some in revenue, that nearly business greater which twice as projections as positioning those is

differences I'd healthier a this cycle than one the key in for the First today Titan both why position cycle. highlight last in between to are the of previous a like few and both industry all, and and general

whole. First, for the industry as a

upgrades. profitable further and limiting sale. short-term bolster their and for activity, less sheets drive past for in have constraints still high continue advancements age ag As was long-term OEM highly restricting few equipment production chain the new precision documented, X amount as balance Farmers the There been well amount are significantly years. has above this, to into ROI market new horsepower categories Because has mile that the volumes, providing of such fleet years limited late equipment averages. productivity gains, to over technology equipment going of of been supply had tractors leasing the aftermarket used in

technologically team customer who and valuations. and from continues office consolidate restructuring on back focus and growth sustainable service equipment, more levels doubled business, higher trade-in our our and managing last to driving with care larger, down bolstered horsepower we inventory during removed on We strategy, For Titan advanced professional the optimized in efforts and specifically, footprint our more the we used parts these our through as industry business cycle. the cost

And While decade income just ago. at a the a than in appear don't around year possibly all farm we General like is average mentioned I be to as by participants were factors of levels rates expected this put as would or to to mid-cycle Net volumes interest customers see. below dropping is be consensus calendar XX-year healthier these today be us industry in spot fast our XXXX. ag will year. that

success be the of a but will year We strong year such, fiscal we transition. a current to don't repeat believe we into remain described heading this as years, X the XXXX. in over we our past As fiscal enjoyed expect best prove to position

rapidly period and by that to have a one moved of and restricted out reflects supply ample We supply mid-cycle to demand. characterized high excess even demand

demand visibility good fiscal given for of healthy the first have year to half and presale backlog the continue We activity. into

as OEM However, allows the will a sprayers a not supply visible be the had of with this normalized, throughout will used XX supply months supply high recent new XX significantly footprint. whereas change years improve levels long times after that the But months, term influx out we chain extended through the to has us and of they in sense, of year. creates and environment welcome ago. lead is uncertainty this allocations. across broader This be additional our caught have and the loaders a improved quickly near normalized up excessive in to In our our horsepower inventory of and fiscal equipment, working deliveries, self-propelled wheel which balances rapid in pace challenges in-stock equipment delays

margin generate customers manage trade-ins also in period. backlog, that compression demand our those sales As new of providing can existing we The equipment. levels to unit from are reflects inventory meet so anticipated guidance transitional through we this part we today used

additional and strong us levels to to we've Our of maintain in to But to the to our I margin produce. briefly team before worked results modeling Bo for that so provide will underpin through factors position pass will financial on fiscal I the him, depth proactively manage assumptions pretax guidance want these the great largely customer XXXX. inspections hard team's call with of growing to that to on effort We order walk of reporting drive execution some function finish segment deliveries the update the pace on through a starting fourth was a year improving in new the strong following same-store complete by customer each our This segments, concerted agriculture. had on pre-delivery XX% domestic higher the a of machinery. quarter. our revenue

As during needs of ongoing several the discussed limitations of customers balancing for pre-delivery we've past demands between the capacity been quarters, challenge. our a our incremental inspections has with service

service Investing deliveries, network in customer increase organization. same-store our advance and drive service key mind, ability to in in CapEx with equipment in strategy a continue our to with and addition increase So I'm sales particularly priority parts for to our double-digit business. a our and strong the people pleased capacity reoccurring care remains our to that

fiscal to continue as well on domestic As segment. support will training that such, the skilled recruiting, our to investing and technicians construction coming to focus year hiring expenditures in capital Shifting we related growth. as in

around of As versus with due in to out strong getting and turned this expected, customers. This and deliveries segment last growth OEM our our XX%. of construction on a to sales our fourth same-store was units produced part quarter these timing focus year

We maintain continued are drive have pleased pretax to who the team margins. and construction execution with our growth healthy of

equipment also markets Although general as we ahead, construction the we there's Further, look availability serve. of partners. some anticipate see from our from OEM we softening improved recent benefiting in been stability we that

Now Germany, our to countries business of Ukraine. overview Bulgaria, moving Europe segment, within represents Romania our the and of an on which

above-average create call, Bulgaria some this As discussed timely on precipitation driving Romania. dry Germany in headwinds our will third growing varied Ukraine year and season in conditions the and quarter with yields

achieved slowdown we quarter, expected, same-store fourth year-over-year still the in sales basis. demand a a growth modest As on in saw but

integration We've heading initiate reiterate growing we discussions Titan Titan join practices coming O'Connors our footprint initial branding you provided The monitor reporting fourth for segment's in first how healthy going to setting our excited departments, plentiful has and our to quarter progress transition like subsoil team. our Machinery, and best came be expected acquisition Australia I'd the segment the quarter, collaboration. to have time the season. the as will and will across consolidated new in stage In are O'Connors now financials future this the the sharing into to The so across next forward. Turning our months, rainfall is completed able moisture segment. we for into to

for record over turn Finally, employees call financial I thank review. our to our I that, want revenue sincerely their that his Bo With tremendous and for efforts earnings. to the will drove

everyone. of XXXX morning, review good start and brief results. Bryan, with full Thanks, year a I'll our fiscal

had the noted commentary, performance year exceptional the Bryan are his delivered. we team and another in proud As of

a across for driven growth to the grew the this billion, move While we year coming of relative increased service categories. to results improved contributions to record demonstrating the businesses, forward. from and year, don't full on as recurring $X.X repeat we and increased Total was XX.X% Equipment performance and revenue focused expect XX.X% our we that cycle by in are solid balanced revenue each XX.X% which XX.X%, parts respectively. our by of complemented previous

$X.XX other the O'Connor to year increase sales, Additionally, a This our per for contribution in was was Shifting diluted was the adjusting rental a balance and fourth for XXXX Earnings of million, increase by other right same-store driven up revenue the for an guidance the XXXX prior to the X.X% Growth the with fiscal to at fiscal with share XX.X% Titan, midpoint reflecting consolidated it fiscal compared XXXX. from of and the the also established in beginning was increased of acquisitions. XX.X%. after quarter, results acquisition. record for the O'Connors XX.X% $XXX.X line we and total period. was

quarter fourth compared year to that quarter million, gross led contracted the parts for XX.X% $X.X level taken profit were period. of increased plan floor fiscal and fourth as Floor to have inventory, fiscal quarters of was past benefits interest in was XXXX approximately the cycle. and capacity year-over-year and the our associated quarter of to and the some revenue million. with million driven year year-over-year included diluted expenses usage net compared the fiscal last XX.X%, fourth Both existing of of the included related and to Operating X.X% at versus million to $X.X $XXX.X to to other $XX.X the which place other related a the prior manufacturing prior plans normalization higher million incentive The fourth prior increase acquisitions Net $X.XX increased and included service manufacturer equipment margin this was each $X.XX with additional benefits associated as This compares interest-bearing variable stage fiscal of as in well acquisition $X.XX versus of quarter which of was income driven which manufacturer period. And lower an expected as expected, XXXX margins, $X.XX Gross and Our by the revenue XX.X% are respectively. in $X.X of in $XXX incentive increase $X.X associated share, revenue or the fourth increased million the incentive million expenses diluted fiscal XXXX of by operating was $XX.X year interest period. or increase rental for plans. equipment experiencing year million year's primarily XXXX finance rates. expenses and up expense for XX.X% of share, with income plan for profit higher with as the by The $XX plans. quarter fourth sales. approximately benefits per per O'Connors XXXX, million

fiscal foreign X.X%. or Now compared turning currency from quarter fourth fourth decrease sales segment, fluctuations, on of which equipment compared our Agriculture led in of strong Growth led $XXX.X of segment, results to the X.X% timing was for were further sales which increased income the higher segment operating same-store expenses. The income by of in $XXX.X $XXX,XXX by to quarter the our of the prior year. year the revenue and million and last in was to of XX.X%, sales of to our income Europe and construction to strengthening million. partial In segment, was In $XX.X quarter acquisitions increased the primarily this and $X.X with XXXX. normalization XX.X% a same-store $XX.X end margins of January pretax $X.X effect these equipment In This to in the second Agriculture positioned deliveries due orders well $X.X year. $X.X euro. Pioneer provided of on currency million Farm presale segment XX.X% OEM In good QX to quarter. our of million of to million. was fourth XXXX sales amount increase in lower by to compared X.X% Australia million million the by Scott compared February the million the primarily This sales XXXX. $XX.X was XXXX the fourth timing was a with revenue the Pretax was reflects loss the and we million, million, deliveries, in to the income million range some quarter our on supported hand. the tailwind customers of profitability segment, timing line Equipment as $XX.X is Supply call, pretax shifted $X.X which and Pretax was of deliveries. prior in increased pretax year. segment of fiscal half the a to into fourth increased start Net of of driven in contributions

$XX tangible of our X.Xx acquisitions and which Now balance debt and an January ratio in quarter. of of the quarter, sheet X.Xx. increased net had attributable covenant million worth We during approximately of is cash to million bank fourth adjusted $XXX XX, inventory million $XX our of on made Equipment approximately to the well which is position. fourth below to inventory as

complete improve to our that, fiscal they than the pace partners OEM expected, to as providing machinery, deliveries full As of effort customers are comments as XXXX able by Bryan inspections following volume the I'll as more offset be new were our we production we but were on a to up was pre-delivery year. pleased by few high guidance, deliveries receipts customer a finish catching concerted mentioned, to of rapidly from on sharing today. which year With they finish our calendar of backlog

top First, some line. segment-specific the on color

for customer For in Supply, up high our which from mid- is a advance assumption single-digit flat Scott the on full It to of to closed we XXXX segment, service achieved year Agriculture This for revenues strategy. be as initial contribution our to care calendar and business our X%. also $XX of revenue assumes parts XXXX. revenue year January million to continue approximately and growth includes

to equipment to demand. revenues, single to XX% underlying used by The generated equipment high segment equipment a is up assumes market that it expected through in to markets down The levels selling be horsepower as on healthy posture volumes supporting on XX% various of for remains growth be be revenue construction new and driven aided Titan's through by equipment As equipment the trade-ins. at low as industry construction digits. Midwest gains, pricing equipment for improved availability be diverse has end and exposure activity to footprint well will proactive share

in is range revenue for of X%. assumption initial Our up to the growth X%

our pricing assume our of and for demand Construction X%. to Here key revenue and be from should of been growth is have years.For service fulfill single-digit in again, the on high not to improved which single-digit mid- equipment. recent low the we business initial equipment to availability of parts increase to assumption also benefit Europe categories segment, we able new for up flat

Our most One for our we laid has each semantics different being are Ag country terms of at ag-based the business operations. of its out and own European difference today being predominantly maturation business of nuances points segment. same that in our has as

impacted are the our with instance, our establishing are our conflict while innings operations Romania Russia. ongoing is Ukraine of we more And For being mature, in in across Germany, presence and by Bulgaria in earlier footprint.

acquisition. foundation million XXX This the to year they million, completed well focused in Machinery. its a to million the fiscal revenue performance of with solid year line of right segment, the be As operations FY is 'XX part which place first acquisition $XXX with O'Connors, of team in in has USD positioned with debut expect deliver currently to the in we USD which Australia QX business recently for the strong range made and is achieved in a prior to a most that Titan as XXX

gross impact has purchases. for lots. expected side income Now as segments. of to equipment on which XX%, margins From agriculture sale as dealer all on additional net the commentary supply a our some available across of is we is inventory for ample normalize perspective, farm expect An demand segments U.S. overall there impact approximately now to to for margin decrease X across on started the our equipment

equipment we in transitionary this expect incremental on period. compression As margins such,

As for a expenses, consistently recruit continue and service to with technicians. labor we action operating to especially talent take in market, retain tight

that We our a across rollout in comparison that IT ramp-up perspective, has a a a segment our look also Australia rest as the remaining segment. about to From of of as also expect of expenses annualized expenses we of implying rate the worth of our million percentage locations. operating U.S. ERP noting business, for as the $XX new complete sales similar year-over-year an run it's level

impacts together, than about company basis in Taken as these XX the of expenses result whole. as higher in are points was a sales, a across XXXX fiscal operating expected realized to percentage

introducing build years of pretax expense. then cycle. from shift $X benefit low today, per I the returns and have which started reasonably solid and floorplan mid-cycle by some as which years shorter providing and still per third to a a both interest would for than share, expect been into slide added EPS versus topic, X.X%. that all provides equipment variables and fiscal to And on company diluted in the be has and cycle. in are more Ag together foundation terms back interest ranges we is prior as a I $X.XX expected are that improved expense. some of modestly ag to but the XXXX summarizes key there color growth the typical availability, recent normalization the as would through Overall, share, driving interest terms of history to are OEM earnings discussed we expense and the presentation, we our in basis, has in reasons the free recent Operator, of fiscal transitional it opportunities of on a call. back expected provided highest a remarks. to provide be per a environment, our to free focused Overall, share profitability To on earnings now the to mean guidance XXXX year. The of interest risks periods, is $X.XX see similar due profitability in which to half we a It of the margin session interest discussed midpoint of normal Bringing fiscal reduce also for back for the though comparison believe it prepared profitable range What to continues on already more concludes implies first of the through to at this the reduce higher XXXX. with our are levels X.X% pressures today. more are we ready a just we our reflects of Moving This in earnings along we fourth plan are sustainable OEMs executing question-and-answer cycle. factored levels exist. the interest important of added the of quarter rates normalize, half the of quarterly interest incurred

Thank Instructions] of the you. Jackson Ted comes first [Operator with Securities. session. this Our question-and-answer At conducting time, question from we'll Northland be line a

farm income you know touch the that around equipment margin. lesser side quarter, work all a -- were there's down your if would highlighted the just you've to you way Congratulations years pressure quickly goes on and demand. to several you I in on on yourself on see done to going work to last on base wanted of congratulations some the change position the more the and the as in through margin I cycle, commentary

last this second with what margin would of was margin used rental? my regards than And with I both is kind of we parts where of with periods does used, in across parts your is My it quarter recent new driver of kind the to mean services regards and below regards margin then new. relative in this at board point the all, with be First services to looking also. little that, third assume and more pressure that and within to to a bigger to regards see a

used, overall that and don't the really evaluate Overall, an and how in from pressure makes split used right? perspective, side. your really The new out, we function it's the From margin impacts through commentary a terms selling new. which of of the sense, you use, comes

really it we And So service out, we're this year thinking not as rental in a similar from good talk a 'XX, we it. margins don't we're split perspective, but that's at slightly then a I that expect factors our parts similar are talking about the but mean, equipment where also had and margins. maybe same that's why about equipment would about impacting expect fiscal would down From perspective, year. last feeling that's And about to total we margin. margins how next and overall, I

specifically you also service for QX, think maybe and referencing parts I and were changes margin their in service. mainly maybe

the labor market retaining some we to as service one recruiting pretty in we're pressure and wouldn't similar we've their read team margins can perhaps and front down, business where leading are seen we've that. equipment again, slightly that make Some and function would between And see sure anything wanting be that of new The the seen I really of and techs. to revenue. a which into of we we're versus seasonality, the service our the ones what delivering time is really our focusing expect, in

XX% -- lean just years, fleet, 'XX, this we've the under terms and gotten just today to of dollar really if and on $XX last a utilization I both have higher recall and Brian. go commented the to much Bo million that over rental we Ted, in had is reduced it that we add physical and to down rental, you really FY down much higher that would that as rates utilization. by over driven few back

rental lean fleet continue, have we that and very with their that we so today. And agile expect again, to

comes next of from Our with Larry De question the Blair. William Maria line

pockets is I about or normal are I at Or lead significantly guys to any you talk there slowing talked everything extended? First, know -- you guess, Can And can degree. are about down some times they're still point? talk orders this you about canceling this at you point? where

Generally, is normalized, now everything across Larry. the board

plants, quickly supply you chain, plants production really domestic know, varying caught As lead but Midwest always mentioned, as up has here. have I the versus we overseas times,

going towards the -- normalized. end being to And of year last everything at so from now generally even extended last the still out

that large get? those Given X-wheel is easy relatively staggers to and and drive all stuff

There's longer I OEMs yes, the But for them. not the any product challenges still some production from easy for any no allocation, categories. on now believe, of OEMs

make mean what address we the [indiscernible] just to not last And right cancellation sure order. a point. I is we've year. of dials done one there's adjust the and that started

main up equipment but a arrives, as when when play our through, and see that's the period this the of condensing year. will of one and supply of that you this feel it's about focuses it kind So to of referred right? so, itself do catches kind a chain and matter timing, of kind we've transitionary to So ability good a of

just I'd Larry, And add.

-- categories we years, we've were know, short many talked a inventory lot past you As that about for in on X X-plus over for years. the

And so it took us here. long time a get to

things while to as so to take these. have it's normalized, And going through rapidly manage a

period to and about It into throughout period started us orders we that's talking all to pull placed markets place. why of to the saw dialing has we year. a that some here. the your a even short just equipment coming things coming in we back levers and you starting into back time, hear have soften of as of about a late XXXX back actions XXXX But so put in lot transition point last and and the as short said, And Bo summer, dial become

the really coming So first and year we've about and in. the order good measures for the visibility board strong we taken have into we presales feel proactive the the the half of

in our out after recently of this so just we've sell a got be through. -- into throughout will and built And in to just are inventory there's lot that we coming and that's be going modeling get come that again, year will

maybe through to have have kind the are perspective, we felt orders to then weak? of they've seeing they continuing like they And [indiscernible] understand customer customers? from how asking from get trying they quarter? of any the slowly come off did stabilized? And cliff sort And in bottomed cancellations -- are fallen

Yes.

So or divorce back the to as issues. a past, are unexpected cancellations in Generally, that death we've very health the low. a talked ties or

continue. any here prices just Commodity But those for last by means. so few have And the cliff been has weeks. it off a pretty not fallen steady

this strong, farmers good income and so prices X of good a a really and and our lot and lot they're the well. just years And will with then a that supporting demand sheets as really here over help And products the productivity year, helping land our throughout and footprint, of sale lot of the that's record recording are balance again from OEMs carrying had new into stabilize as well. technology really

that where sales, could in market final margins But And chart one you've meant is that if you of and of show work you think for you the at about half drops sorry now. in the margins -- your is just indicative what on be we're revenue more Or Is cycle-to-cycle. the question, you breakeven one illustrative more. I of ask looking future where of to where done have going?

we're margin look provide levels timing something challenging It's perfectly inventory significantly trying indication is way through and what you in quickly. not illustrate be that rates to on that's opportunity a the trying we're what perspective, the down is of north And all of there that it cycle, This perspective in trough, year, an of our here time. state right, pretax X guidance simply Where So in at there, capture was And to kind That does coming But that where trough appreciate of to and off And the and could that. excited it higher the peak-to-peak supposed it produce were of from focused range with terms Like trying transitionary of any the we budgeting mid-cycle right? from all revenue. the and saw comes the X.X%. midpoint level digest at reference, peaks, of percentage we're pretax profitability. future falls X I clarify that And we assumption the provide right? what range. few of range. then to to relatively that what have and as factors both point that executing to bit also time, the equipment delivering pretax a interest a here range, is X%. the ability at to years. is the budget some to about recent The like? indicative added the in that overall, next trough-to-trough in on to over right, kind pressure

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

XX%. And came I I more equipment you revenue the guess in the have year? the up you up that late maybe might checking, were played to quarter. quarter? I of in your revenue XX% the over I'm current you you been gotten much ad pull have really November fourth expecting with fiscal out wanted kind start did November, late did in in The implied any the forward guess gave It would would what quarter. availability in guidance just have in about that improved than

Yes.

Bo just forecast really been has past your think Joe. equipment of question, timing [indiscernible], yes, quickly the To I tricky X years. in from the deliveries me, to and

supply so chain improving on, it anticipated. better come And so with in did and than

then it. as putting who team, to the years the in and that our part again, a getting past just reduce levels really in of a to comments, and was certainly backlog equipment our hard that prepared I our hours X So our to that has out in been worked also, And record credit mentioned customers.

And seems component And next you is gains? everybody. share question, forecasts. availability, is market talk OEMs your market so predicated ag And industry about it's confidence the guess, my year expecting. on I in much the improving fiscal than better availability I equipment if revenue your a gains the big that isn't walked current like for Maybe guidance through mean, that for of share equipment you're better it those

your just that. thoughts on So

industry our positioned on we slightly is serve. expectation about with and ag better of the volume down setting right, XX% revenues the are And yes, the specifically right, to So referencing think flat side, back we the equipment, to you're segment I for stripping like equipment everything to and versus customers XX%. acquisition

the it's execute and So for, to those customers. ability specific now years looking really and inability our relationships to that and they're looking some cases, equipment at those and in our previous it get serve in

with half achieve the and activity just we're as sight. a feel with through year, not And mentioned looking of line our statement, good the we of broad we to presale pretty here. it's first what So

last learnings thoughts your and -- And from early market. acquisition your any O'Connor's about the question, my the maybe Australian broader

with business pleased on X collaborate very we We're pleased over the positive. best so pleased continue We the just there that's leadership philosophies yes, to continue team we market sharing the leveraging the very and to know the And and over I just them over all We're and to and as happier, integration excited and there. We're knowledge our skill and our and think extremely going grow Joe, with acquisition, couldn't Australia. be helped like with team other's been to just the sets, each in and have, invest excited employees that really similar really about with get it's acquisition. there practice with really over really forward. better that it really companies and transition.

from comes Market. Street question next Lake Ben of Klieve Our with line the Capital

me. for couple A

going for lumpy a you kind at of give it's all, here was one. 'XX can in we to can year kind if suspect of bit benchmark very historic because a Last a line should you help to of of in kind seasonality. a how kind look outlook. XX regarding us year of off I bit 'XX. point fiscal First with I'm seasonality fiscal if a of quite be wondering the wondering us to I'm any bit top

it, it with into year. there of And come half year, the Australia, XX% fourth -- overlay play XX% last So the about our when we even in of with the X quarter, the with the our the definitely in are in like think, we the you certainly, as the as surprisingly. out. last The over all you're things quarter X ag which made nuance traditionally, half half strength of average at our we financials, different the ways. segment, There XX%-ish second right. look strength And here, half first second some when look in similar of you Australia of year, last things see the in stand first you definitely at in revenues your fourth years, the years, XX% of couple kind U.S. as is expect comments. was But I something of in picture-wise, very of is bunch the Big year. QX years,

from lot and And perspective, expected a look half than So bit and purchasing. better FY 'XX year, I that a QX in traditionally of first QX. then to and overall back than seasonality think QX QX that, that and about in more is that a of half similar normalizes And 'XX they of timing the activity the is did in lower of FY XX%, first year be XX%.

what some there level probably best So setting we've overall, a won't between nuance it expectation QX is certainly from is drastically change seen, but picture point. and this the at wise, of and more QX big

-- opportunities as if point Is in mid-cycle of cycle was there? cycle environment or any about the queue. more of and context the M&A I'll kind the the excuse than favorable, more outlook midpoint favorable prior the big it kind you takeaways the well. less And was point at this previous of me, how today to can then the me, at one you for can in wondering talk and get in maybe of M&A in I'm back

HR I believe as the of the and down And also, we as as greater store, in here mid-cycle a more all go so opportunities and the the regulations that well. All the in traditional office of smaller towards lot the little drivers come little function dealers amount here bit and lot nicely remain be still to a other in go back and margins start office single the on technology there'll back forward. struggling our just changing challenges really as place. see Yes, the a and that of But a bit ties a and of multiples operations a the could model. we government certainly, with the we real with for and

towards highlighted so more those further. ever those be drivers as just get mid-cycle And And continue here, to present. go again, even we,

to the an in continuing amount on our be would capabilities our increasing inventory go here, our parts our and keen focused our and service care immediate really parts invest management. So service out care here. on we strategy laid prepared increased But and customers, our we're as forward as and driving be on and customer opportunities in business for we're customer of expenses will really again, and reiterate that comments, focus support just increasing revenues, do there strategy our to year and believe focused we continue I going for to and we on really

inventory, throughout next the will exit on the we through bit priorities. will acquisitions. sheet. and up That manage certainly room with balance year that go quite So And the are we We be opportunistic as cash a that X as well. of as generate those free year will

ready certainly very with and So selective we going to we'll go as be be acquisitions forward.

from line Alex B. comes Rygiel Riley. with Our of next question the

First, can a bit talk your inventory little the year? throughout you expectations for about increasing

right, Yes. we're pull have provide I good have mean And still expectations is generally for color sales to the coming from trying obviously, that we inventory today in. through. we

when some said, we things we to play But the we've in terms there would see quarter-to-quarter, those would half be from inconsistency back there's I a as the all some out see the in lead the In it would reduction things in normalized assuming schedule. expect remains times as some of have little do year, terms that arrive. uptick bit. stay that Again, seen of still stands, inventory some, of that but here then and half in it year. of first inventory And on of

All for to quarterly And basis. continue subject timing of the an update you on again, a we'll of that to, everything provide out. how plays

into the fleet. investment increase to days rental these appetite your what's then And

Yes.

So basis. just our a ultimately Alex, that function it monitor on And a utilization. we real-time closely is of

promote building And to our rental continue there the in relations being to does out And really improve fleet. and job team year. look and our It relationships so market. push we to every continues a great and

we the long And And so pull as up utilizations. as we'll function of continue improving them back turn rates. we bit, start decrease And off can of utilization wells just or we're a the though, valves, as those, again, just see keep the fleet. really the keep very back a and little add taper those we'll mindful, And to to down.

of Northland Securities. And the line our final comes question with Ted Jackson from

is that during flow improvement a number together, kind first in see But tied would on capital want cash flow XXXX. a that as the touched to to that kind inventory bit little assume taking You it kind fiscal with levels tying or for of your expect but to in did circle inventory to of quarter. back And I drop regards roll capital comment, all we'll free it and of of with an it through I'm in trending -- given the and half we working of terms that fair terms inventories how levels. the of fourth and first a that's be we bit can to second XXXX, you year? see in sort a obviously half? what And in little out half, weighted cash working in you free up would fiscal like had the surprised jump

Yes.

look the of operating cash generation would at going we And overall, down inventory what mean, is, like. I all is right? the So that heart your balance flow to question see ultimately, to better comes

on a increase dynamics in be right? we So FY significant expect inventory. wouldn't the this see cash flow to same 'XX, positive year, We that's certainly going So real the side. to occur saw in the thing to year-over-year a

bit Just that, this. I as look more we on at a guess,

about of of and supply come a place situation the together on. talk cycle larger of the We half expectations and year, increase the your the lead takes true And of working are chain then how that first when coming targeted in So a a to about supply lower this have probably this, our 'XX kind dynamics we through those healthy about So -- it The where overall, the right? inventory and mentioned dynamics again, at terms in, for that in the catch-up, XX% have ultimately look of back lead inverse you little bit calculated. earlier back just turning the again, catch-up with just of portion of a with talk we'll see through, is controls that picture-wise, of team inventory. back a and up deliveries, think are FY ratios focus big maintaining and and turns chain But the year, the time everything we in of half in of we turns have against we takes you it, play in in that even than we right, the that get revenue in to year. kind place have XX% would inventory And the have because here inventory little period out the as more we we just a it in here sales, take term. to that step levels. near the a So that's right? turns staying mathematically lower the I portion terms continued where the of to interest-bearing

ultimately, going here that cash about play and turn the terms it I period higher that had transitionary we But be lead a talking but continue much and generation FY on now for to well in flow kind 'XX And in can journey to all level, out is have that the get manage, positioned of see today, how something we're of beyond. to better specifically back that we'll profitability to in seeing out, mean, quarters, seen we that we see very to So deliver of the 'XX. recently. X-year plays

the positive Do you for free entire can cash flow year. think you generate

good down able to we but that. comes ultimately and those levels, achieve Again, inventory being to Yes. it manage all about feel

I'll for closing And turn question-and-answer session. of you. over Thank back the management we to have reached the end call the now remarks.

we next you, you interest great call. with for Machinery, on in look Thank Titan everyone. to forward Thank and a and progress have Okay. day, you our your updating our

And time. and at this your participation. concludes today's you for may conference, Thank this disconnect you lines your