WillScot (WSC) 3 Aug 232023 Q2 Earnings call transcript

Welcome to the Second Quarter 2023 WillScot Mobile Mini Earnings Conference Call. My name is Amy, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we conduct the question-and-answer session. Please note that this conference is being recorded.

the and to Investor turn Director Girardi, now Treasury of Relations. will call Nick over Senior I Nick, you may begin.

Brad on Good of Mini's morning, quarter call and Participants second material President Today's section and be Mobile WillScot Executive Chief include Tim website. today's Financial Boswell, and welcome Relations XXXX found Mobile to earnings on the the Investor Soultz, WillScot Officer; Chief presentation Officer. Mini may call. the

X our harbor Slide statement. contains safe

presentation making and be statements forward-looking during the Q&A will our We today session.

business operations are subject our Our and a uncertainties, beyond to are risks and variety many of of control. which

a differ materially As from results our result, actual today's may comments.

harbor the to our and in with a complete possible our the refer other filings For SEC. could safe cause please factors differ description statement and actual results of presentation risks, more the that to

With the that, Brad Soultz. to over I'll call turn

thank to I'm Mini. Good morning Brad Thanks, CEO everyone, of Soultz, today. Nick. for Mobile WillScot and joining us you

XQ terrific start investor predictable and Let's of are XXXX cash showcases we the generation for clearly compounding business. company quarter was the returns scale that on and XQ deck. as our accelerating Slide XX our another

on this track outpace that are of already page, exceeding to Day metrics in or we of the on performance our out XXXX. we all laid Investor shown November As in

began we in SAP the the about margin, operating initiatives milestone points, increased basis XX% we're Revenue as well to XXX of $XXX on which VAPS the due at the our optimization adjusted two flow-through as function range adjusted compounding EBITDA been platform margin of At to we've since penetration. enhancement the that increased high Day. out expanded Adjusted XX% the and year-over-year we EBITDA and million XX% effect of of VAPS focused rate rate Investor EBITDA laid both margin and years top-end a ago. on

flow free XX% free flow of in just record our million. our free outstanding. generate milestone leverage is of million achieved cash to on a net EBITDA cash allocation we've well with approach $XXX towards at cash capital $XXX debt expect margin of of we're end delivered excess X.Xx, quarter. of and flow during in generation unconstrained. XXXX. free range our the cash million of and our and and Year-to-date, next to company And cash flow to of [Xx] free of bottom Cash million well $XXX flow in business We Clearly, Xx our $XXX target the unchanged remains to adjusted way

million million. M&A, of invested quarter, stock net the repurchased we common for X.X million We $XX to $XX CapEx. in shares allocated During and $XXX we our million

our last Over $XXX count million share and this and the months, financial XX powerful the performance X.X%. our results now was economic shareholders outstanding, in, demonstrate our and All quarter compounding predictable by of returned to we've reduced portfolio.

well Commercially, picture website. announce I'm launched of drove and others innovation our the safely, which collaboration a of market this the more efficiently up us for deck our operate pipeline. during operational space of as proprietary premium you customers on that as proud incredibly see I'm their of investor solution team this our example connect PRORACK, our on is and the cover offering, is VAPS a a PRORACK our with safe, nature can in tool a in above. development, excited modules management configurations or comfortably commercial It's successfully flexible shelves to any and or to customer and PRORACK easy container, crib, pipe projects. four material of durable, of can innovation in containers. customers. storage to side easy [product] we the inside that use many that and install, is helps PRORACK solves the building the rack, that and XX-foot flexible the storage, fits that on type problems each teams to PRORACK differentiates perfect storage of as modular desk, to function configurations

next reminder, realize our and billion balance unit. level delivered levers. $XXX in the to growth offices, to idiosyncratic simply million five across currently this likely the the to of $XX $XXX storage three confident $XXX portfolio place. the eclipsing represents the In $X a portfolio in based including $XXX Modular, per million represent we of VAPS of As million from years. ground in reaching extremely VAPS of the milestone achieve on We're order need Storage, the to rates million

XX-month with only last our reference, already the unit any our year rollout since is over storage As before basic $XX point and per a PRORACK. offering one delivered rate contribution in that's of from and of

XX. to with earnings to Slide to and demand back our short, much XXXX not manufacturing Flipping across from QX services. respect has markets, and particularly In We're changed professional in end robust commercial demand. experience end-market call industrial continuing

of was deferral for and we've remodels orders started needs. at non-mall-based demand the impacting storage QX said, quarter, in is to in storage which seasonal volumes driven retail expected, That receive storage As down by now retailers, QX. major

the a timing remained ABI construction has at quarters. like to are in been our consistent two following the non-residential the throughout which modest good stabilized X And our levels prior record to while project foot throughout. in forward ranges contracting quantity customers' neutral of to Also, index Index, levels XX AIA, backlogs, The we're months, has of early with And robust been expectations. these leading the indicator second the basis now positive quarter, XXXX. the expected, starts inquiry and has in, a has Billing dollar and construction a both Architectural on as both square the starts, below and in non-residential noted

activity in NA Further strength the against in in the the in realized our XXXX. was segment quarter quarter levels U.S. quoting note, modestly robust second extremely of up Modular again, second Geographically,

through Coast states to respect continue a countering in West that further to extremely outlook demand down tailwinds to of U.S. and Carolinas accelerate relatively Canada. with XXXX, the and we and we're in maintain desert the prudent weaker potential have XXXX And U.S. from market associated Midwest the years expect end infrastructure while the onshoring we states in come. with about balance the persist reshoring. Northeast, Southeast demand for Florida, and excited to to been projects

breaking projects cetera. renewables, have with represent to gen, restoring are our the offering and Large-scale unrivaled long-duration and CRM, already North our vehicles, increase. to space size have complexity capabilities and in winning America, particularly uniform sales as recently further customers our projects scale, opportunities which ground disproportionately been now chemicals, visibility and actively the semiconductors, dollar all modular deploy as material combined provide bidding our positioned participating, We're and such multiple storage et with services. And billion field power in electric product sectors projects, our value-added total we solutions even well teams into product complex to

And quickly on Slide XX.

In the portable rates best-in-class to years VAPS, in while still in Our Modular double-digit the we storage early increased XXXX rates the for average last years in Storage leverage the new as Storage our rate portfolio. more tools investments five to powerfully execute continue segment, and growth over and continued the monthly a positioning. XX% very price to across our and our recipe technology product we've predictably segment. compound as roadmap, experienced meaningfully provide begin management sustained innings, and of we'll contribute

above Spreads driven remain increased and of Modular year modular penetration. versus by and have both portfolio spot prior continued average in sequentially, XX% robust the In X% increased the rate average last our over to the VAPS rates in delivered a between last XX%. XX XX rental segment, months months -- rates the

late thank Now before I to of quarter like is track the hand and Along to team ambitious return another moment eclipse has safely exceeded the delivering to XXXX. growth the at Tim, to metrics or our over levers. we I growth would frugally multiyear call all and our progressing of each on way, Day a take yet for $X idiosyncratic Investor billion committed to and team our the seven outstanding in

that, I'll for the context. call Tim over With hand additional to

good exceptionally strong segments, quarter. streams, to summary in and continued outstanding and across driven Page and XX of financial free we margin morning, performance both all cash record high-level Brad, profitability a penetration everyone. pricing and products across revenue you, saw by strong performance shows flow. the value-added Similar QX, resulting Thank

approaching Brad key ranges or our forth Investor exceeding our see that at Day of we growth are our over $X every billion operating financial we back across pointed opportunity still We metric in five set out, As XXXX. in levers.

spreads, free drive lease in well business in turn and go XXXX it's given of revenues QX, immediate by are in So across spot profitability durations EBITDA see XX% a detail will to powerfully that as we expect adjusted minute, exactly healthy cash into our this margin drivers value-added term, In I'll capital expanded on rate XXXX. levels. performing all ahead as return into which allowing XXXX, rate with invested Leasing run we the logical to margins capital, which levers will is support that in into environment. our look allocate pricing on expect and year-over-year, very driven we products flow is in upside more XXXX, the to these well into multiple us are but In record find margin, three-year confidence. up we'll ranges. would compounding many

returned to for are to in We up surplus acquisitions end XXXX, getting $XX And period. using midpoint. share that repurchase our XX%, longer-term the with year expect over belief months, the through and in outstanding operating we of revenue count QX potential and over we and approach that the And XX% [tuck-in] our end Overall, shareholders in with our Investor increase growing the executed at and Day $XXX XX are the that our will platform shares in earnings of million the unchanged X% respectively, year-over-year the stronger. ranges and as capital million is represents top EBITDA pace our of expectations of year. last our

increase to XX and quarter. that Brad was Slide leasing up year-over-year and detailed in revenue line $XXX The in with sequential for and prior slightly and $XXX increased lays revenues KPIs revenue revenue saw drove in year-over-year EBITDA the our Obviously, commercial strongest to guidance. our sales. adjusted quarterly growth XX% Adjusted we that down our normal a EBITDA million. million XX% seasonal out in

that is coming from services our And you chart, our see revenue of leasing can reoccurring the revenues. in XX% right and bottom

extremely drivers. margins worth million high-quality So mix. predictable of from our and be performance with this and source an both and in a revenue is quarter, It's in a a it about of longer-term our spending minute continues down because short- benefiting margin $X trajectory sales upside are on to revenue the year-over-year combination

we we've to as which rental variable reduce our entirely XXXX costs calls, in work million order year-over-year. is and the on we $X and margins a gross down tailwind term, as is up have a that levels. due leasing inflationary will are discussed through will activity couple increase the result, natural immediate as XXXX. the inflation, First, last progress relative of And year, That into to impact as head means only

mentioned I refurbishment as again, for efficiencies last quarter, over and spend, in realizing we modular years. Second, operated having now our very are two SAP in meaningful

efficiency work to these years. inflationary improved approximately that a record XX% conversion refurbishment in This resulting per sustainable order relative we cash flow from capital expect modular few are last is refurbishment believe the margin free inflationary and we further cost and despite QX, progress average in was spend down QX. as Our pressures. is into pressures We down and XXXX, XX% CapEx relief to and efficiencies year-over-year in driving up cash

we we to see Lightning then driven made as This efficiency within our points continue improvements salesforce.com optimization. we which cost XXXX our which see year-over-year. opportunity primarily platform the we but improved been margins, we Service pricing, consolidate logistics on also Field will management and has XXX expect by continue benefits operations enable later to to this our route year Third, ultimately, basis for in increased of which to

XXXX. Modular The sourcing us should a trucks improving, also and market which challenge is transportation drivers to volume for in in-source since more allow segment which our been has

in and lastly, have which out XXX driven for expanded strong down relative multiple In and of points dollars, and levers good reduced of which points revenue. segments. was compensation, leverage basis year So by supporting again, SG&A we're margins, an basis across XX% year-over-year profit year-over-year all was XXXX, up revenue overall, absolute were variable which year-over-year both XXX very lines And and was to getting now flat bonuses commissions. down primarily gross SG&A, we unusually to sequentially

stabilize improve we operating see CRM, another as forward, back to we Looking expect this new heading and consolidated in opportunities office efficiency workflow leverage will XXXX. our and source significant into be of

growth to to year-over-year drive end revenue Flow-through operating for range. flow of of we outstanding. is and into XX% XX.X% see EBITDA to drivers adjusted basis can the across XXX of this margin underlying and and both up benefits XX% Investor adjusted EBITDA of of combined are free beyond. margin All key the points cash our all quarter, And the of top Day look which XXXX

So guidance. upside margins see where to prior relative area we clearly an are long-term our

more X% that not provides detail which by year-over-year in to Keep discontinued cash these Net cash adjusted for cash million. activities increased metrics operating a XX Page mind highlight. flow, are is on provided operations. $XXX

a effectively So row. cash pro continue levels half in operations maintenance from was is that CapEx our at the expect they for of are forma flows XXXX. X% we will Net than to second a basis, faster $XX current and the growing in which expand on million, quarter second

last fleet new quarterly of are driving margin improvements of purchases million Steady purely growth, be expansion are necessary in CapEx year. whereas moderating and demand efficiency driven cash company mentioned, and spend, line with given sustainable $XXX cash free free in As additions resulted flow combined top flow margin. I a capital moderated XX% record and improved the won't work fleet order inflation,

free shares. annualized, on flow $X established flow of direct us free free today's million our million share and gives this run which over cash Investor of If million run line to XXXX the per of XXX we rate, a Day and based that $XXX share sight at flow rate cash cash count approximately target represents $XXX

through we line the QX million of in cash with see well flows flow for which stronger in free with run For XXXX. cash rate heading year, the levels excess and the free purposes remainder the year implies of XXXX, of $XXX a quarterly into

with QX, net X.Xx. range are comfortably XX. to Turning is leverage bottom target of to end the adjusted EBITDA, at we X.Xx very X.Xx to Consistent at operating of Page our which debt

asset-backed on We have over our of liquidity revolver. $X billion

debt near-term X.X%. no and So maturities of weighted approximately average pretax a of interest rate

and factors, invested a record from these free are capital flow capital, cash with accelerating unconstrained So return allocation standpoint. we on

shows allocated we've Page And over how that and capital our months. how framework XX last capital XX allocation the

Our capital on that is Day, our Investor to be approach the shared left. with continues we which at the XXXX consistent shown framework allocation

in of of shown chart, a months, we As billion the XX basis middle on $X.X inclusive capital last the divestitures. generated over leverage-neutral

for in levels as the year a on percent decrease capital Based the will current XXXX guidance, of net following CapEx slightly full record generated XXXX.

our should pipeline the increase to last count [tuck-in] On our M&A capital returning business capital progress over having reduced through the remainder by surplus we repurchase which the generated to substantial acquisition XX other hand, economic candidates, authorization, given year. shareholders are as the of by share allocated the we via of That share X.X% months. still leaves our

control is to potential earnings and in our consistent the our business, within repurchases capital consistent our to deliver in reinvesting return Given over growth share way this right business with framework the time. are returns another long-term compound lever yet

XX continue expected which would of originally means is value-added CapEx. from our volume opening back shows margins order it efficiencies than rate our into I expectations trending Brad current unchanged. also turning continued Q&A, benefiting largely work But unchanged, else we price prior expect mix quarter. unchanged All heading the and which page and XXXX the products equal, also to and are is before Lastly, with stronger underlying to guidance, run

XX% XXX XX% over be of trajectory up cash up be for expansion basis well XXXX. midpoint, $XXX a the year-over-year, which up would and be free up XX% at sets margin the flow for and million, of year all revenue north should with Again, EBITDA of would points strong

I QX continue margins QX into with assuming costs expect would expand sequentially, slightly or rental EBITDA seasonal our most seasonally to always As build the down expect profitable be almost variable adjusted in then to sequentially is we margins from through months, compressing sequentially flat stronger which QX, QX, to quarter. to progress and again I

outstanding of revenues in deliver That's us really or portfolio. those our which billion where guidance we're got that retail of record we've higher demand, we and a or this portfolio predictability sales lower $X installation growth business in an all ranges drive take very leasing track XXXX, revenues exceed year are consistent or high in of a is the confidence team sustainable which longer-term seasonal that have a at track achieve degree at keeps targets. got are the one on It we'll delivery variables point beauty our of and opportunities growth a We've well Acquisitions, focused. could returns. largely the the this us best got only formula point of and to And to our operating the as We've year. the the leasing proven the and will costs booked with that in business variable means drive beyond and execution.

back that, Brad, it hand With I'll to you.

Thanks, Tim.

quarter, to you wish you their for just and thank prepared with to continuing and always, to As the beyond. you the team all of our work continued concludes not And trust deliver again remarks. to our the XXXX customers as health. to capital. safety good your shareholders thanks for our team This towards and your drive our Tim for listening I today continued and support, hard thank but referenced, continued

you questions? open for the please would line Operator,

Blair. [Operator comes Our Tim with from Instructions] question first Mulrooney William

seeing of retail was due other are volumes questions or was I were if portable on My was side? the from I well But as Yes. to X% softness think, markets primary a retail driver primarily, in curious that decline storage else the overwhelming anywhere the any down, pause on I refurbishments. think, you if

kind of modular same that Yes. see storage as underlying Tim, in are that but to was we driver, core the you the well. seeing softening primary

Okay. Got you.

the fourth again, a quarters similar, third in a and storage as expecting volume similar for portable you well? are decline volumes, So

as as earnings look at be first characterized is the to demand, of we year down to the X% core the in this similar No, call, X%. last at expect we just end

modular most store decline. we that in then in XX,XXX which compounding the prevalently and a second containers was like effect of see year-over-year You'll remodels, the had and third the quarter on

Okay.

two coming you're volumes like right rates the well? these curious lower inflation up moving an and year-over-year down, constraints, is With are I'm that chain of that softening if also now after spot as if just indication seeing basis. rates supply spot a on years

well driving mean very logistics the the spot terms not really and premium and I with frugal incremental value the organized. seeing of product rates. we're positioning No, in is be to pressure We're differentiated market continuing the capability on the offering.

out really So spot place rates. not on mentioned double-digit XXXX five and had kind VAPS we've meaningful I will recipe delivered that seeing yet not in driving more any as as seeing us well. really pressure from growth my much And prepared modular playing contribution which remarks, give in in storage, that in storage for of rate in years, become we're for

Our next question Credit Suisse. with comes from Kevin McVeigh

particularly balance I mean, Is the like thoughts with a just nicely lot of $XXX amount them? million around full way right, but opportunity, It's just of really or And just associated variables quick forge I dividend dollar the of allocation, a thoughts, money, today. a know to lot is no framed sits any the on given a where think kind Any a then the capital follow-up. sheet lot Tim year cash. about there guide. maybe traditional

always, of as of said coming move projected different different core and relative I that's the call Kevin, key that about my products variables this volume, around a the of rather we really punchline guidance declines outset of anticipated in we price which robust being is, the with anything stability some is us and from value-added year-over-year the any all out remarks, modular more the KPIs. across function QX mix start than I'll there. those delivery within isn't but a extremely year, is point, XXXX standpoint Brad's from leasing could the But XXXX. than of indicates To Tim. particularly

as about component go we we've source add potential retail talked into And is right upside to length then at the retail of piece you That I that, QX. which on now. think a

capacity Variable we're with sequential which to storage should to respond we've into to you and know, idle of As QX. and is big demand, EBITDA as of retailers guidance, non-mall-based QX decline cost this year obviously progression into going second capacity the our always in which always, for we drive the service it. seasonal And are got half QX. incremental. factor, QX then actively and that from a a pursuing Acquisitions, temporary more

the margins in normal That's of I'd then as QX. back north get QX pop when up to expect probably levels into volume up business. we activity picks And those

we're us. can not that revenues. Sales progression expecting. And installation focus So the sales quickly that's sequential last XXX% move is then particular concentrated for revenue the is that a delivering variable and on We're and in from prior still lease attractive at primary is growth revenue into which, quarter. run again, XXXX, and that heading a driving the point run time, rate very our unchanged any focus rate we see

As years two, ourselves time, an return going, is of in absolutely long-term where our questions share your framework. it allocation, be haven't over deploy very our out four the capital to consider that happy the source business around surplus into we're look shareholders accretive three, frankly, repurchase among that's we And changed we for right relates those. we to and to as now of capital terms

of around type The stability Your one. cash of is capital allocation. question support a that good our streams dividend absolutely flow

more share place So Board. not when, with to a I obviously, dollars. that of the here in if, right be the we repurchase But start it's is think sitting discussion the our put having question today,

next Deutsche Our Bank. Alwy Faiza question from comes with

'XX to curious say a now there how for taking take I'm beneficiary Tim, to we about XX%, that maybe with And storage just But pricing that get your you I beyond. ability as can on how think us? been disinflation that inflation. wanted spot you've of the into XQ. deterioration. think looks historically, it you And clarify talked and heard place, you've from Based about been But narrative hasn't there's then some deterioration around like I I on portable the mentioned follow XQ you pricing. you into gap up

it to That spot Yes, continue if the containers rate pass and Brad. fleet. function convergence spread, is inflationary delivered the I'll the for point. this simply is for in of a of then will, clarify The compression rates Tim you over to faster the progress.

spread back prices level last year at were record out quarter the prices, approaching the of that think fourth was the modular at core I that we units when above the had average seasonal markets.

So a will, compression, rather is declining the convergence if rates, in that portfolio. not spread function you spot the average quicker of growth of for

And Faiza, is this Tim.

think necessarily across contractor inflation I I don't business. markets. narrative there reality, about this across is what you see of to the that's the exactly that. construction think not disinflation talk especially out their It's a narrative, you a kind talking

a an And container on side is for of price and extremely products and drive business environment some especially differentiated the to benefiting the healthy storage we this So you use add techniques strategic of and both capabilities, from positioning, that also other on modular product and segmentation, the then the where logistics our tactical value-added differentiator. that's still pricing. offering services then

no, the So a anything be that in as progress through to changing continues pricing see we don't year. regard we highlight, and

with Our from Andrew Baird. comes next Wittmann question

a I just a prior response wanted to question. to clarify

side the Brad, of want comment to for sure, the that down this of the to Or segment? year? demand updated X% just business if or the Storage modular was that the you core overall? expectation could And X% expectations, think, any, comment your Company that demand on on for the kind year. was you mentioned core specific for I I was make was

in and modular wrap commercial nonresi let's retail. the So market, and the separating

on impact call, bifurcated layover in end expect said the really to it's there's as range of be is X% same well. down storage a we've the we And The storage in As effect -- it retail. the that the at effect last year. storage. will X%,

You've got but year. the the didn't remodels very occur I of my with end of prepared occur, you The mentioned and normal remodels the seasonal and is and it's at year. comments, didn't the have opportunity in middle flow. line the your in in of then demand our early expectation It's the They in. seasonal just timing, in order terms started demand, as largely

bigger So will, you moving part, I guess the at Andy, in projections. as year-end look you storage if that's

this expected. And bit it. just come Yes. that morning up times of this Got than Can that is, last did then or came approach the not same conversations, just the as some affect guess, you which given just quarter. has how in Tim, a here, a the thought, did little in you I guidance, updated couple better quarter way talk I about the guidance

quarter. that said, little than driving Yes, push rates manage time and is happy we're out that our Very KPIs, we're in and and but business things minus like the very X% to on Core plus will line like you a better with the looking results encouraged But run horizon. in going last the much trends over expected, particular, not XQ us with type what guidance, where three leasing two we quarter a expected to focused that, of or years, trying this here. spent most of time get is or bit by margin in

frankly, implied about concern core good that next real executing I So me our run across a can't year, very happy rate those of with long-term the trajectory of targets. And KPIs cause flags business, XXXX. any it very red sets find up going the any would into

Our next Schneeberger question Oppenheimer. comes from Scott with

would to talk these So where any chips X% into that slightly down a on year, Could that XXXX? is elaborate than demand were the about you questions two to sounds Could at all infrastructure pose it core risk year bill what X% non-res general, for of in the you the regard in across going to segments. seeing the just and or at please just across reshoring X% you down -- looking science, and softer half demand beginning? consideration all about for back main inflation with the lot upside to you're Reduction of Act, like X%

these a Yes, reminder, this durations. lease are Scott. is three-year Again,

levels. prior I So modular quote up my remarks, And North comments you modestly on prior quarter slowly. over year American prepared second were rents would moves record was year. rates our know recall at in in the

or here. crisis issue no there's So

objectively, Now the down, whether look half, it's foot, right? dollars first had through now at starts or we're a square construction ABI soft nonresi period, in went you stabilized.

new what is here. sitting in we and there's where to alluded So kind guidance, no reaffirmed we issued here of news that's we're today. when we This really first the quarter,

into we certainly as about the extremely So we're infrastructure the fact uniquely we're extremely winning already into cases. forward not for of in year it's these and And the in and waiting we're of we reshoring, these here D.C., that potential service I the positioned happening, second the and We're bidding, sitting right? projects. needs such. to think customers' excited opportunity take the exciting, stimulus are the half something of XXXX, it's onshoring, look super and advantage materialize They're

my regard question a VAPS. And with second Great. then to two-parter is

Your your talks would say around XX%. its first than Where about question. that's VAPS greater is part of European the about the you VAPS is, specifically modular, this peer penetration penetration is

is, was story second year-over-year. but The you if VAPS was delivered the rate are Is you modular? [story,] getting up any long part quarter? is this, I'm portable is you've Are describe just modular XX% X% concern out the VAPS down still And from going that maintained where dynamic the in could [XXX.] in that Or there on rental to the average that rate feeling tapping on [indiscernible] the going in come the monthly in quarter, year-over-year, now? the is VAPS the LTM with maybe comfortable we

to XX at is the answer way kind regarding best [$XXX] core leasing penetration delivered at modular. in VAPS least European I unit first rate relative part at it peer. if think of the spot our you look I'll rate for the Scott, per it's attempt of, look of north to our over last Tim. revenue. But a to $X,XXX that's revenue unit And months the call

range. that approaching easily XX% You're

penetration wanted terms If just you to the way I probably look contribution, of the relative at in dollar that's do it. best to think

day. So on end of that we're at dollar focused really the just contribution the

VAPS There flattened delivered well, is some rate the has out. -- LTM

those are core and I think delivered which there in unit now you But own the the fungibility in word although value-added -- commensurate restrooms metric. core surcharges not lease unit like LTM modular between pickup is a to impacting pricing sanitation, some saw be that's for for also things their wrong is two. the in in example, pricing standpoint, we're getting rate, and going

force, excess the $XXX with the drive top And just over still change of per around this well been as we're our core best case And today. That's here numbers sales performance now time. of XX over been unit of sales expectations there's wide going for across the forever, that at offering performers the of this well a we over reporting years. very in dispersion that's that we VAPS and force the has no time. in to coaching in on practice sharing use to pushing the terms that look And

comes Thompson next Steven with question Research. Our from Ramsey

in you on of CapEx these this you million target refurbishment move so have is well three- the keep far efficiencies? target gotten Maybe $XXX the as part with start or million? to And the to enough efficiencies range the building five-year of was efforts, upward modular this over to that $XXX

as that Because free think had And of the the flow. bridge question. good bridge we have cash million the around in a XXXX Investor that laid That's $XXX Tim. to wouldn't presented efficiencies. we about incurred that is framework we was refurbishment the assumed would nor back assumption this go of out, $XXX course assumption Steven, a Day we circa million. through to have meaningful million inflation probably CapEx $XXX That an

midpoint we guidance year the probably of there's bridge. the our such think And offset that I there, I'm that with actually this natural in comfortable So not put it's in $XXX million coincidental. very some that fact,

than don't we in range head over run the I'd I rate that confidence it had the improvement we advertised that to it point change So definitely as can on keep beyond. me into an that we're other XXXX and and we is that gives there much know too XXXX

the Okay. conversations storage it's Interesting. part That's over results. on customers part with retail part quoting great. realize And next But then QX? the are of tiny current And conversations of small -- activity reality start months? for to projects it's not financial VAPS, is set on of is a this for with XX for that customers this a I

the things. you storage contribution Storage they the these build. compounding segment of things And to VAPS these on that little types won't from start in And portfolio take get VAPS. the while But XXX% as of insignificant. a a are nature I to is say do churns,

$XX revenue be If you from is include million just storage. example, pushing year of products The the to for of ground portion in services of this north level office value-added that and build. fleet, we'll container associated now beginning

to all up And value-added back services $XXX you're run a revenue the at Scott's mean? and go which PRORACK, on through of to as all the into you of follow delivering products opportunity look just we before hold expected about And Day. is per does million from $XX frankly, talking question, is out translates $XX month our that over so, better right? products, And this think if products north penetration you we it any just flow as per you yet about rate this like container these playing where that's is the convergence just of contribution six you’re value-added last with today, So If probably to months other a unit what million average Investor XXXX. or thing, P&L. across than

Pricing about through where $XXX flow yet opportunity that today, is to there's is P&L. it million another the convergence

per spot no question rate becoming customer of modular. to we're things And are concerns to penetration is that push very trajectory a getting side continuing have of the about these We opportunity that ago, about. we're absolutely minute to excited a seeing, on products We're storage things. Scott's So unit which back $XXX value-added conversation. on the part

comes with question Ng Jefferies. Philip from next Our

highlighted called slowing Congrats strong you on on these the some also nonres quarter. new obviously mega down side about of another well as ABI out activity but is and projects. and the you The infrastructure nervous market strength

crosscurrents, to to So we volumes is looking when about activity far? about we so think how on what think translates bidding color these progressing And that XXXX, should your how any then out year? next

Yes.

NA was. referenced, the considering I in Modular modestly year. XXXX quarter our especially how That's up quoting strong phenomenal, second in was prior As over activity

cross positive territory that territory, contracting XXXX currents, fact like as Following right? neutral that's the of two quarters far As very the a ABI outlook. has supportive of stabilized into

So on with that's core recovering onshoring, out we've markets already ABI and infrastructure, jet if else you the of and strong, play continues remain and for seen everything I today. fuel beginning reshoring see think kind to stable probably we basically to

you're this your So it pretty cycle. at short sounds Brad, business preaching juncture, like, is

volumes upside have down expecting to not like it big be some You're year. next next year. It might sounds

that's guess And So switching I pretty Tim. gears, a question encouraging. for

pricing. the I guys doing pretty are on execution it margin the of you year? and What inflation you the way Because kind need of see the think of on not you got and and you volumes things margins side stuff for down decline still to like momentum out XXXX. the a lot all side went runway sounds coming to highlight of on kind up good would for be to next good cost of then

done mean I hard haven't I exact Yes. would math, that be get that to. to Phil,

durations Given of just feel opportunities lease on got I and revenue good into on [X/X] pricing XXXX. across year that of you've roughly get flowing opportunity our products. that. going margins is just based math almost very and that cost top a three-year I you $XXX said And million convergence efficiency value-added about of through the rough

year, felt into around be and And this just about popped XXX basis said XXX for going up points basis very good we QX, I I and margins I last least at we'll XXXX, points time in think year. the

predictably opportunities business leverage structural revenue in things trajectory. operating margin CapEx, I and the bit variable it churns. discretion and quite like a of don't happy the very flowing a know, those is the me this costs make get and through about which portfolio growth as you business There's where over So consistently

from Our with Barclays. next Manav comes question Patnaik

This is Kennedy on John for Manav.

the economic full cetera? level been about the contribution And profile, have of I $XX of with unlocking can the million the changes cumulative as 'XX? cash those acquisitions the you synergy return profile, for the quarter, maintenance last enhancement, value terms result profile On then And us multiple, the et Have financial presentation. flow, changed acquisition is return cetera. throughout year a don't costs, slides the the the in of et on to the efficiencies, unit M&A, acquisition there $XX remind think tuck-in in million expected this, the what

the I'll John, this out Tim. QX the called best way questions start XX -- from $XX acquisitions your months. around acquisition is to we roughly revenue million of And with numbers there last into flowing is in I the contribution. that think

those a can rate the -- course because You the bit during run $XX see of is of annualized higher assume that, some occurred million little that than of QX.

million,] $XX to [$XX margin it mid- you're that, call XXs on at So that. put million annualized high

that's you'll idea operating of consistent multiple And get to businesses. if to synergy at that which acquisitions last the enterprise we a those branch $XXX an with assume you've compare And those purchased branches uplift from the primarily the assets period implied our Fair and get been we that annualized over XX-month months, network. of EBITDA just cost X.Xx about got some the and rest LTM an then you in acquired. XX of million

in value-added over pricing we're talking that products as the then And uplift class portfolio churns, benefits the of time, about. get uplift we asset the depending specific on

team of weekly is recently early integrated. exhaustive highly strategy pretty manage meets that stage tuck-in pipeline We've got both to opportunities, a the So programmatic. a and

since And that into and integration. growth out competency completion Mini be XXXX we a is continues the process it expect developed bit pick little there periods. investments up the as repeatable we've close our and So go part our probably Mobile a algorithm that that to core future as of of I'd we

very with So that. happy

been of based haven't slide changes. of We on updating we material in kind every unit year kind once revisit And the the it of economics quarter. habit a

sourcing and of life. the terms rates seeing kind things we're on of that, modular I And refurbishment containers. business. that's still products XX-month unit about relative costs the improvements on in to payback Then spot Conceptually, cost [latter of like that unit's yes, think roughly payback our unit in the accelerate in and in economics to modular some pointing cash-on-cash XX, So cash-on-cash X/X] with returns think the services. to on value-added a those way and still XX-month right

sequential the the progression Can expected in Appreciate some then the it's CapEx flow? follow-up year, it. confirm expect the just that? remainder on of a a the asked prior capital that the And when for and on to CapEx know of a refurbs. reflect was for of free question I are to planning, expectations the function the CapEx kind you more to do back inflect or what And cash then to I growth? efficiencies XX-day but bring of

I'd long-term increases we because in into into CapEx increase actually niche long have be little -- go from then of But our -- be fleet costs variable no QX. the very as based don't have in supply come QX in along substantial demand. investment, yet more on a to may of reactive then other could XXXX. we more with Yes, a we baked play We And kind commitments business. expect that that can terms we sequentially some as categories head do QX we we that sequentially mind in haven't in kind P&L CapEx this And QX. in there to expect I very of QX have

we year, fleet be typically XXXX. that of into what's obviously guidance number annual centered we the would cash that part that heading to and storage us to was be second up But flow to of I in core to range. support those million the earlier, be number starting terms ramping in wouldn't But half and around, the of Investor question the about bridges if took QX. of Day that free will demand our our QX the XXX modular I we think centered $XXX until for get it into around growth that core investments, next

Sorry, QX could I QX, free please cash flow if confirm progression that? and for

QX. go would would typically, there. some with and in margins up offsetting going based QX. and to CapEx bit bit should has And been bit free of down go cash spend growth QX a also historically then in QX, flow a highest coming dips capital going maybe where it be left There's a roughly in line increased Yes, be into we on out

be So that case but CapEx a would think base and it will be on any driven about, probably good fluctuation. demand based largely to

question next with Davidson. Thielman comes Brent D.A. from Our

critical the consideration to to margin you enhancement into to that words, the seasonal what and less the if anticipate in activity what hoping storage variables versus just the possibly even Tim, is that drivers? expansion clarify is other uptick today? than still fourth Great. just see in you margin degree storage In for quarter, seasonal would the other

to just right? Yes, as QX is know, that at change Brent, doesn't lease maybe coming much, of really go you as fact as into latter. and in I our all impact driven the margin typically it's my thinking give guidance. repair really QX. activity The But very XXX I revenues don't So absolutely the what that expect maintenance up seasonal we It's sequentially down get contraction QX. points by out would basis of we slows

seasonal driven maybe of cost by just the magnitude XXX be me course. But changes, again, the kind then business. variable that. that that's, puts I've really ramping the XXXX you the up a again, That why heading on high of that's, not degree on all margin by business. fluctuation driven of is into think, year will And QX. And I the some how Give sequential got at could points finish business. latitude which, confidence at And in costs order driven get those and into in it's we going variable you record of QX of of by magnitude, expansion a from

Got it.

circulation I storage? constrained guys could do that, for you that. recall what years And availability the helpful. out then you've your assets? a ago? just recent been be Is the comment would supply greater among you But both see being always today Okay. industry of to speak If could prioritized and years. in the there for terms on I degree versus that you a appreciate dynamics industry vendors. in presume I it in modular few that to

most, we XX% much the care construction fleet. business focus rental what business. Brett, primary local buildings. side pretty And will from is on seen competitors modular product where all the not of an really start permanent change. any projects, be The be maybe modular participate. virtually of domestically, sourcing is I'll traditional it's At area network would a doing. manufacturer's Tim. material we're of focused modular sourcing our haven't be We'd XX-plus extent the which manufacturers of I to would on of be the to which

So base. a supply fairly it limited is domestic

I And of course that, of over is think which, because the really down think I a especially who cost months, in been reason. earlier deflation, into procurement at our frankly, modular a to precisely we basis on have business, a have one than last that new at prospective in all around come higher pipeline again, because industry reality it us that's And of narrative XX the the market seen talking is to acquisition historically. you questions haven't the of are would costs right? than capacity sellers more much coming some managing the our Any today,

up, container storage can every we're given it's on more that are of But a up, Those competing and have capacity capacity. makes competitor extent question are our it an difficult in side. costs Acquisition for quite local bit maritime enhances costs prices all another the market, to costs markets to day. way capacity its the where world. our to with fluctuate XXX into diverse our shipping business grow capital or smaller which their available filter, competitive the position procurement in A little different the

frankly, So pricing degree happening material don't see supply a impacting degree. material we availability just or that to or to a

Wondrack Our Bank. Sean comes from with next question Deutsche

to It's progressing see. on on Day. job great Investor from Great goals your

Sean. Thanks

of larger you typically of you the maybe element mix that these of part things talk the other the of projects given your to the think you've they profile of becoming project, like duration headlines. different what about is a seen, mega when a these contracts? projects, that dominate going you Can And of bigger maybe that to the than average think they're to some When have about sort there? compare continues on how about sort sort and that mix

a it's Sean, good Yes, question.

of solutions, projects. moving is construction in today, innings. started be absolutely overall very on the of site, likely majority projects disproportionately in think CRM on XXX the still a kind high these we there those these haven't turnkey need, mix our higher part When footage which shift look a I over think more mega employees balance in because going they spot. I that And activity towards And have is vast projects. are yet, to to more do types win longer we of sweet non-residential it's of our at right? rate complex, more is even larger, sophisticated, And duration, square early

strongest the we've the of competitive that where and That's the in cross-sell we're pure-play can all provider space market, positioning our across opportunities. got into capabilities only different those

of If haven't those that you build, infrastructure started vast look announced either. awarded to at been the projects have the related or yet majority

about talked Brad volume mix year. one positioning the the first side in before and square about reasons in majority reshoring of good of I on That's of disproportionately strong future pretty footage infrastructure-related really feel and change. believe, the that projects, half the the down the nonres is impact, given these of the So are we competitive which XXXX

strike that you it project, I'm about sort maybe bit how think does -- it lower you be Right. And that's a are then move level. Or sort there it's very a of looks from curious high then of just contract typical escalators when no, a as would helpful. year is duration where just roughly three-year margin, And little a forward? kind of like a and

that wouldn't contract associated very you've three-year course being three the over as margin variable got project years. of costs with a lower I because characterize little

these contractual now longer I duration all XX-month, minimum a become relative think, to what has -- else should absolutely, So term. skew equal our

project larger think being our mix and the opportunities. term part of increases seen positioned scale to I have But We some in delays. these towards partly due business more due to

it correlate So yes, size. longer contract I to project duration would on -- And with expect tends yes.

very, helpful. That's one I could more sneak it. And if very in. then Got

I do XXXX flexibility to due the short [indiscernible] with also, them with have Should your them? revolver? to to of two considering And in something the repay you do years. curious, that? doing coming just have desire was You are you then you

so revolver and Yes, if then right the high-yield repeat notes rates know, benchmark given you a them issuer market. for. refinance there choose. X%] the could frankly been short-term where about to We now the do moved. the anything have no we've we is into Rover There's urgency tomorrow XXX%. as in just what And we [X% if That's

to it availability activity them. we into We've always we're and happy them with got high-yield can refinance the So the market. quite in relates be the as to ABL, opportunistic

be by got well You'll recently aware, S&P. upgraded we

credit notches So United closer I think two now to we're the States profile.

and So our of in very the our happy credit with the structure. metrics flexibility progression debt frankly,

the have end today's to I will We back Nick. reached turn the call. call now now over of

Thank interest your WillScot Amy. in all for Mini. Mobile Thanks, you

contact If me. you have please questions additional after call, today's

Ladies you. gentlemen, today's this Thank conference. concludes and

You disconnect. now may