Hillman Solutions (HLMN) 5 Nov 242024 Q3 Earnings call transcript

Good morning, and welcome to the Third Quarter 2024 Results Presentation for Hillman Solutions Corporation. My name is Jonathan, and I will be your conference call operator today.

Before we begin, I would like to remind our listeners that today's presentation is being recorded and simultaneously webcast. The company's earnings release, presentation and 10-Q were issued this morning. These documents and a replay of today's presentation can be accessed on Hillman's Investor Relations website at ir.hillmangroup.com. I would now like to turn the call over to Michael Koehler with Hillman.

Jonathan. you, Thank and everyone, for us. joining Good thank morning, you President Relations and I am Investor Vice Koehler, Michael Treasury. of

Chief John me Joining on Adinolfi, Kraft, Officer; President, Financial Officer. today's Cahill, and our our Michael Chief Doug our call Chairman, Chief and Operating Rocky Officer; are Executive

a announced them, or Michael, that CEO JMA, we call in As step effective Doug into XXXX, role. John X, reminder, role, into step and we will the will the August January Executive Chairman as

factors, call, today's and that laws. into of the and not future harbor many in get would today like cause certain be audience may are we Before applicable and These which performance risks, safe statements. are projected results from company's our remind I those are to to materially certain beyond to and may such securities to statements provisions differ of control guarantees the made statements forward-looking subject of are actual considered forward-looking other subject uncertainties, assumptions,

of Some annual the could with are results filed reports periodic our SEC. in influence our contained and factors the that

these regarding information on slide website. see available uncertainties, which and our earnings more For call Slide X presentation, our is please in risks

some give Rocky more updated of comments. our our Intact, acquisition will with before certain today's presentation. With these of on detailed that, Doug In will third-quarter addition financials recent for our turning market begin over our JMA slide then call value some GAAP call closing to walk hit guidance, a commentary, the in highlights and provide will then through earnings on to some non-GAAP call, financial of hit results regarding refer our and updated to Doug the Information to measures call our and he measures. then of our we our our touch use operations. guidance reconciliations are and will on back today's moat, available results. will

Doug your for pleasure up call the our turn We the to then questions. Doug? call over to CEO, my It's will open Cahill. and now President, Chairman,

Thanks, everyone. Michael. Good morning,

into Before Xst, our Hillman accomplishing team too wanted I On never won to in before and far Year actually we the XXXX in Partner October today, the at Year something days at won Vendor get And the Home Divisional Partner take X that done Depot. we the we recognize history. of later, of in moment Lowe's. a we've Hardlines the for call XXXX Hardware the

two our team care Lowe's by Our taking team and by outstanding Brad job Fox of Justin biggest our led Home Depot do customers. an led Helbing,

and your guys teams a been world-class You retailers. two job have with doing and fantastic continue working to do these

well and the Depot, field the at speak the taking to shelves strive the at of say We're guys each Hillman of recognition, off customers two every the possible care of has care my and our dedicated without can hats happy at humbled I'm For teams the our by amazing. thank years, entire product like I our moving customer day. folks across service for teams logistics this ensure our operations Justin, But by the team, and Hillman warriors support Hillman taken are There team. mindset. to well sell until and are are are Brad, valuable all back-office today. well to in biggest you not by our and as team a same the to as you always global Being I customers of think Home and the in most customers network. the XX our year is recognized something, report nothing happens mindset alive Again, and all of we players it's and been and lot Lowe's,

we're believe company this beyond, position. and macro We and inflection partners. where will retail XXXX start point at look Hillman benefit actual we our to in great both approaching As an is the a

start but when positive, Driving run, home closer to year to or X aren't predicting confidence not existing retailers going factors. this sales a they're for to two, a it convinced Our a be but historic turn few happens, X to that it's years. are when

$XX Let's lower fund down. their increased cheaper XX% in a way, home the to since home number one, Homeowners will projects. existing Number that improvement trillion end homeowners and for equity make U.S. on sitting likely equity, a rates are break to it it on are tap their XXXX. it has of the record of home

from over of for existing XXXX. reach volume is to back We the an expected three, projected of two, to lack customers, business years the will remodeling should age XX-month trailing over improve are existing Number with top versus But Down in line start will the X line industry, their that bottom let's few homes shortage homes EBITDA we their solution year, drive in and will X.X the the up of at homeowners a the is of renovation been sold. and of this now, X the homes lower tailwind rates to million continue our near-term home U.S. this that roughly X.X increase unit home relieve in are next macro remodeling love and homes grow U.S. homes a I sold Number in lower which we in years. XX% sales. of old, position includes XX for to remain strong age the has with about XX for low values and homes ours headwind the years. to Meanwhile, We in million this we But pent-up our a adjusted will be Additionally, in demand last million will come. demand being U.S. supply both period. next believe drive consistent even with no to in expected in invest million what year. for the year-ago X.X million XX% Because projects existing in is roughly XXXX. we're housing built believe rates at know homes the XXXX model XXXX, are with believe our prime sales XX-year least not great home homes. and for to U.S. go years a being

During the quarter, we of textiles. provider cleaning Intex, acquired job every and a cleaning. improvement cloth, ends regs, home leading with Most again

we're and top EBITDA So adjusted Intex XXXX -- line Because increasing fits product full be contributions another this portfolio our and in results, perfectly in. that great that is of we're to the one and guidance. top from additional our October excited our line full year category

[Technical net to $X.XX for a marking billion midpoint range billion. billion $X.XXX Our of guidance and and sales is increase new X% new a has X% year, adjusted over EBITDA The $X.XXX an the XXXX. increase midpoint Difficulty] is of

is our $XXX and Our million are lower new our no more details XXXX free CapEx shortly. [indiscernible] investments guide of $X cash provide million bottom than to million our change will guidance on $XXX with to the previous flow guide end. Rocky

line about line million, quarter. of compared in X prior-year the the to and Intex which were Turning added were our $XXX.X Net acquisitions, Driving Koch quarter quarter. to sales sales points, which which from about were top is from small the 'XX market X.X% was down were X-point third FX. totaled main with which the offset headwind the a by volumes, Number a headwind one coupled which down factors. overall our in price, with for two quarter. X% X expectations, from was Number

For X% EBITDA the $XX.X the compared increased during million adjusted $XX.X XXXX. quarter, third our of to million to quarter

the the our margins a margins improved during be second XX.X%. to adjusted point profile, for expect We we quarter year-ago sequentially basis XXX the a gross improved XX.X% declined XXXX. healthy and foreseeable margin Our during from quarter for future. quarter over it Adjusted structurally the gross above to of and we've XX% XX.X%, marking EBITDA totaled believe XX.X% improvement

better healthy have efficiencies, to past of we've similar by margins what the We to a seen maintain managed over quarters. products mix few improving these selling

top-line and comparable sales X.X% is which Solutions, over our increased HPS, results, period. biggest For the net Hardware Protective segment, our or

softer XXXX Koch to Net the volumes XX.X%, and in partially were RDS, by our market kiosk healthy adjusted at increased compares sequentially remain of of price. X.X from in and quarter. improved trend MinuteKEY While EBITDA our XX.X%, has Digital contributions Intex versus the shoots EBITDA because sales and X.X% down and service results XXXX. of offset contracts. new Adjusted improved QX both This margins between adjusted our decline and were X% by The year-ago driven or XX.X% gross and Robotics green QX respectively, and margins sequentially.

and XXXX. XXXX. XXX we're X.X by and beginning throughout and have to plan ramp RDS field, that in we we is MinuteKEY machines We The getting today, growth in of RDS stores great over have 'XX, the back continue to a business, accelerated in has X,XXX deployment in we will know we laser-focused to year-end. on expect As believe

turning by prior-year in quarter. business Canada. and These contributions are north the border. our of in very economy were were The rollouts X.X% year by Net gain to business the a as of quarter from to we helped the the Now sales new to continue market rest Canada. share Canadian compared down sluggish wins offset

like For the in we year, and in Canada. we when economy position strong the our EBITDA have business turns adjusted U.S., a in XX% business team this great for Canada. a margins in the maintain And expect to

XXXX. to turn I sum over Before me it up JMA, let

up, were and down even in you year has this told as year, anticipated. played we be XXXX, our we As in November would volumes out EBITDA last if

improved believe will moved We be and and this and rate businesses contributions improved to last XXXX. XX% have Koch profitability margin flat also we our XX% our EBITDA acquisition the structurally the we top-line told roughly year, expectations of rate versus our and from versus and machine XX%, gross to we've to tuck-in our we've on, EBITDA year. business. you full-year about full-year The We've added expect turn our Intex grow these to that

We back over to our we'll of macro ready over fun turn next retailers customers Year by believe moat customers strengthen JMA. shift, Depot at continue feel the will to with on are Vendor years. with reinforce our for is customers now, it illustrated With relationships we alongside when offense. to and the Lowe's. our historic be ready to about our We're and run what be be We our the our to grow that, it a starts I'll several and wins where and right great competitive

take love January CEO JMA I way very the in sixth of care X from the get is this JMA XX-year blast. August, have we history transition. doing get XXXX [indiscernible] take in worked I in to this to been of Chairman, me Hillman. will JMA, company announced together I'm and in we of can. past as the the the people as with we of As only day because It's work an reins customers great every proud a and and support years. Executive Rocky absolute for every and an of, Rocky, the I honor job I

and how on over win call the turning the Rocky. our M&A hit we landscape, operations with Will to before moat,

a Let pack, quick experience. and sales me number moat. refresher our on service two, give and our of and three, differentiators the pick, field you to ship XX directly warriors; one, number years of X X,XXX customers; Number our

will our customers. of I Next, real-life share of creates each our examples part how for few moat a value

of store, products XX% shipping take it we most. need by they of First, customer care to our direct when our

hurricanes to storms For customers levels. minimal were with we before the after service example, the that our recent to impacted support Southeast, during impact the and able

resets us our to not enable sales X,XXX but the service flawlessly our across of needs take only care Second, normal and in-store also warriors execute customer country.

which of X We're all-new, thousands one over of of store. which ripping run everything This merchandising. alongside hours the investing out Hillman of complete multiyear the example, includes fasteners, going for fastener top an reset most is XX-plus is aisles of XXX in takes is a nationwide our aisle. reset us and the one of to important labor foot entire SKUs and For complex of the well customers

so And encouraging. are the results far,

Third, with and XX products, years the understand of we categories, experience, markets.

a launched the will products being growth channel traditional recently PowerPro to in are range and of These screws. we hardware in example, new out structural contribute new rolled For XXXX. high-performance patented

time. that customers year add challenging growth gross with they growth the customers, what let adjusted how moat XX%, Year give of macro and grow. Look examples we pillars of happened for EBITDA at want low-risk over the generated long-term XX% in me Lowe's Vendor of and our the We are our margins X customers, Depot, to XX% for new for acquisitions that investing meaningful you for at flow, business some accretive increase adjusted a EBITDA cash double-digit by in with the Hillman. where executing a Koch. will our value understand environment, you of business margin meaningful that does secured of even the after shortly acquisition what Now the now piece us Home

that resets. us is bring through Hillman have categories, trust confidence a When our handle growing teams the new rollout efficiently. and do complexity customers customers national This to organically and new and Our moat we to more offer can both products our to it so value M&A. and of of allows critical

and As of because a cloth, we we aisles the both Intex, advantage cleaning new Doug future customers. leading can take of on love And it we mentioned, August, new textiles. of rags, the expands to new offering Intex this and moat product and in cross-selling in existing the our to customers. opportunities importantly, our acquisition closed We leverage as business grow with supplier

retail home rags, and painting, and well an great When janitorial, being as Hillman at unique Coke combine innovative with patented to market should the excellent accretive come. in For every our textiles direct share with Intex and as get cleaning, XX strengths customers, level, years Chain marine our projects many years great and has our marks of acquisitions maintenance nearly care. of like the relationships products, use developed Intex Ropen first. acquisition to auto, which gain improvement, team, you and in-store for every share. second ship years, cleaning that of service, Intex we for and day customers has cloth, and that capabilities, year XX-plus you brings

welcomed would Intex we Koch be Intex working the additions operations, has fully to as our companies been successfully Hillman Intex. like family. to and I'm healthy Hillman Hillman see proud of the to that and has to is Coke pipeline Koch great integrated into family. we M&A Our are and integrate continue how

With love on now we aligned, year. would the X team growth opportunities. similar focused every ready We do on and at least board are acquisitions to and

on touch operations. me let Now

on to operations full with supply chain. global We do to rates. in Our products team throughout fantastic the customers job and our ship fill a continues add value and time industry-leading

network American distribution North Our continues efficiently. run to

our seen operating and never team still well for have room We as believe improvement. there's

are have We around the sourced are of products our our and are suppliers Further, sourced from continue and the outside process long-term down of suppliers which from about world, years XX% X/X less ago. North About are great approximately from China. of a to dozen from X/X of X/X rest the currently America, our relationships globe. operations sourced China, of with is than major X the in Taiwan expanding

us do We have healthy customers relationships strategy with our reliable long-term tensions. suppliers, and when do, tariffs we believe, gives our to it as options geopolitical and flexibility comes this and

quarter Let ocean approximately market update ocean in but this business continue a our put material were of are volatile. the of higher ship has on projections X, the on first give for because That to we price XXXX, The May XX-month if under me to we renewal industry container and/or a plan freight. ocean our to And place you have would year for offset begin on impact next May we in not this been X, contracts Current quick for increase. containers will XX% containers which spot date. XXXX. rates. negotiate of contracts, now true, our said, ahead does

Our our team controllables, the running of customers. operations controlling and taking our is efficiently care

it turn to market let will be and we are for the Robert me Kraft? over With that, improves. financials. talk Kraft Robert ready when We to

John. Thanks,

in. dive right Let's

X.X% net $XXX.X quarter. Our of the third XXXX sales quarter decrease totaled a million, for the versus prior-year of

we on prior XX.X%. were expectations Third were margins XX.X%, XX.X% slightly margin said by points and call. quarter's adjusted Sequentially, year what gross line but versus quarter to of from last with down basis quarter our in increased the adjusted XXX gross

quarter, to strong also which gross the during of third to a during as sales to quarter expense, of our we products the versus X% grew XX% Adjusted Intex's was was profile. We next gross adjusted expect bonus $XX.X when Driving this come expectations. above in our million, as was year-ago line which a from in result bottom our increased quarter. year-ago remain will result down of during standard fourth percentage a the XXXX. margins as we with lower-margin from which structurally improved have XX.X% but believe margin the SG&A quarter and year-to-date the EBITDA period Adjusted increase the line employee compared the the XX.X% was our quarter year

to was adjusted compares healthy adjusted Contributing of EBITDA EBITDA positive during efficient net to cost was operations. Our price to sales ago. quarter the ratio XX.X% a mix margin which our year our XX.X%, and favorably

turn to flows. Now cash let me our

to to year-ago million were over ended throughout cash had as benefits weeks activities XXXX million net September we months able the compared and as $XXX.X million $XX in during outsized cash inventory the XXXX. XX the period. the our the to This Free first for of XXXX, levels. X million totaled million normal totaled reduce we the XXXX, expenditures of Remember, totaled XX, the capital $XX.X inventories $XXX million returned $XXX.X for year flow operating for to as million generated year compared by in Capital working quarter. period. $XX.X year-to-date prior For $XX.X period we

like anticipate between For in XXXX, invest million RDS to hardware number our racks invest CapEx other XXXX million spend $XX and we of be as will XXXX in we our and above slightly capital and for business. growth $XX resets initiatives

with it to be business, X.X. will strategically strategy build MinuteKEY not and in they is invest let's clear, continue RDS our this high-margin but We come a

where only existing Our invested new and opportunities. will store or machines X.X our see stores, are service build a retrofitting on capital teams the return we machines we growth in new

X.X during customers. with machines up ramp our our return MinuteKEY is our capital investment, performing a are deliver more strategic RDS spend where XXX-plus on there XXXX will to our machines Doug As and we mentioned, well

sheet. quarter ended balance funding net Intex the XXXX to to the the $XXX.X acquisition our able during million quarter debt the with of We cash free flow. outstanding. total We were while Now of our debt third reduce from

We just Xx that $XXX total XXXX, million was trailing end the EBITDA and to debt have million and XX-month not a just our and compared ago. quarter leverage X.Xx at the X.Xx our figure was had net debt third when adjusted ratio since end XXXX, XXXX were below $XXX of net year net to X.Xx annual sales At of nearly ratio adjusted our debt the EBITDA. of a to was

our around X.Xx will forward, Looking net we end maintain leverage. that XXXX expectation we

leverage EBITDA to when it at or be using Our to comes long-term to stockholder adjusted our flexibility via grow give below balance strategic opportunistic to value. and net debt sheet the us is target and ratio us This be to X.Xx. allow to will M&A add

As few a Doug our guidance. XXXX we have earlier, mentioned to changes

increasing from to be $X.XXX sales are offset of the $X.XXX are a our billion contributions between Intex, We with Driving billion. billion the market. net by midpoint $X.XX partially increase sales to

lift lift down now which XXXX EBITDA adjusted less October midpoint EBITDA Intex, and our being Our a new than new X.X% and are Koch business from Based for following guide Altogether, increase net from market and from about our assumptions: X% is approximately sales down wins, from full-year new $XXX makes price, XX% full-year our is a the adjusted a XXXX. midpoint volumes million, expectations XXXX. Similarly, X%. our headwind year-to-date from XXXX our X% a on X% is increasing we guidance. results,

of to guidance CapEx the few corporate spend, million of the our $XXX.X down $XX while of the our our $XXX versus million is $XXX presentation. for our which assumptions for earnings an in into The filed between Do-It-Best. co-op XX filing for new end previously. as True to $XX a cash ago, midpoint A anticipated million the call customers, a our on information and have flow our available adjusting are is we The another Value weeks free $XXX range hardware of Lastly, driven that to million co-op guide agreement cash one and million hardware Chapter are More be level. made sold has free the entering at result XXXX million XXXX year. top flow

continue grow a risk of Hillman throughout U.S. its million with by Because years. assuming independently will nature, X/X Value results of XX% net customers adjusted operators. our been its owned receivables open write financially Do-It-best to is XX,XXX U.S. receivables stores in business impact we the market, and we about collect. learned of recover far quarter are to long-term we've the about $X.X making Accordingly, and receivables. We of does the to True customer hardware throughout filing, to not its the ACE stores financials. for the True this True have this strong discounts business orders on expect be generate believe a directly for our since remains a Value fly sale new the for leader and of as material million in far revenue. stores, health owned term store to service our and to should Do-It-Best, They Value having care all not XX are Chapter great of the ACE shipping XX $XXX banner, space, non-GAAP and revenues, of revenues. this what we of will continues at relationship owned hardware out across not independent the from that XX% amount one-time our Due hardware Hillman or up wholesaler a Hillman a Value's these our do nearly event, and market over field has shelves. continue with taking products We which sound. of so Canada, stores along of have nature third we a and balance backed manage our charge hardware allowances. store Based will potential hardware with reflect the while they serves of been That stores $X.X long-term shorter co-op and True the independently folks segments, business. the on not have these said, about independently material million have of

our store as top and the during line maintenance adjusted focus X year. as is will they during and of the first this cycle down repair XXXX, continues themselves with the Last year, Your is their that expected, in EBITDA in we said to XX.X% perform have cater differentiate far categories November, seen service. to customer this we hardware and the months even exactly if increase, what up that local so

focus single controllables, organic double-digit we organic doing remains done Our per controlling of the to and have high job Historically, that. business great seen before a low year M&A. believe our has and growth we X% adjusted EBITDA growth

some adjusted we for now our can Longer to Assuming macro, active growth we low high yield of healthy M&A to to achievable get historic the macro back EBITDA turn in should realistic it help low returning algorithm let top-line that, to from growth assuming that me teens a think front, is Doug. With is growth on mid-teens, environment. term, are single XXXX. the we the and

Thanks, Rocky.

upside in who get we loved affected by up this the of to families the to process. their No need seen our our awful. servicing wake have Hillman long hours, in and has order have start Milton, just Helene to Q&A ensure Hurricane express time down have they and to team our deliveries, their I stepped surprise, and session, need lost the ones products customers during the expediting working turned rebuilding condolences to Hurricane want Before just lives of those

where is Hillman have ingrained of to of supplies well proud and my for always Hillman the taking efforts. customers. with today, cleanup Additionally, these their and their we teams I in and assist not all as be loyalty, showed spirit. would We're need teamwork, those gratitude in customers. up way for their products are Without for to Helping Warriors, retailers and the care express Hillman great have the our our as deeply our our employees cleaning of we want donated

have approach it to we for me to moat a future. firmly shareholder to have operator the horizon, if Q&A about but I'm value the on the long-term you excited the back And while future, accretive radio, growth very for see years opportunities let that, a our the As Jonathan, face disciplined not taking turn voice. definitely you portion. we're come. we seeking we drive sure for will can Jonathan, what With to a strengthening believe look

So open for up it questions.

question from Matthew today our Instructions]. line comes Barclays. [Operator the And Bouley from first for of

on for [indiscernible] Matt today.

off, just in relative this guys on on can traffic R&R demand growth if for foot parse you September. First thoughts how October have I and And any trends. to Wondering wondering was XXXX? out early if expectations you trended

I been mean, yes, and The Mix right is volume soft has now, thing, margin of we're strong. seeing same good. right? kind continues

I think nothing's But there's business, be changed. retailers is our for think get to started lot we'll you this about when on in thing to then a return. everybody really and rooting of But going focused holidays really 'XX.

with market to growth slightly some continue again, We wins. about our see But share the has stayed the same.

say. As we The knows. hard look nobody to 'XX, it's at macro,

interest think will declining definitely rates help. I

for they said, can and and they there's homes good as to that business. not move, our be I but predicting in demand, and existing pent-up that's really as equity starts lot to But bullish. when, a want are definitely used of know expansions retailers are that go, sales, Our people that then for home

then prepared question, guys sourced is second know you guess mentioned Taiwan. from I remarks my in your I X/X And that

I if it was China, think there. from I'm but X/X me correct wrong

If you have how the you mitigate in we cost can impact detail, just were into be would Any an to increase go helpful. more see equipped this that would your be on to structure? guys details if tariffs, could

Yes.

North X/X places. Taiwan, then of if but of you first JMA, like Vietnam, turn really rest the Asia, and think to you the X/X it all, I'll think So different Indonesia, America, of all

that? other, then X/X on and why America, Taiwan China. X/X don't you all touch But and X/X it's So North JMA,

Yes.

dollar tariffs through. last dollar. on, what time mean, with like we just when where we pass you is at to ready event the for We'll handled So in they I think point you're our retailers build We price China, after X/X on to that with cost work question, happens. your mean, tariffs going I be we'll came it the I that about there, and that mean, and look

comes the Baird. question Manthey line from next our of And from Dave

about is terms there. gross you currently? First of where for off, being margins lower there your sell partners you the who Intex, you that that's improvement? are mentioned by in could any it? And And limitation Is carried room there talk is Or can structural?

the Dave, sell businesses, lot traditional same and as others, but they we for each the nearly there sell today. do, we that Depot, think are a deep channels some they strong, the customers customers where really not don't serve where channel auto like about we as day, major every all hardware you and Intex Walmart, that to they the into paint in in the out Lowe's, and we're of serve are

So excited are There we're we growth with expansion. good them. innovative about IP They've opportunities limitations the no we take in products products got where around and have. some what really

we're excited and where the future So about we're going. really

Yes, I structurally They're I second David, -- On your it's lower guess yes. at Intex. the question, is Rocky. think answer

We freight will over that, as those more improve from think you overseas like we have and about like lot a areas time volume. just things where

will improve than their be So structurally fleet. but lower we'll margins, they

at that growth off, to move on into it in RDS move then of XXXX, as next right, all. X.X And kind sounded MinuteKey Resharp like year? the wasn't needle I and would might mentioned lead RDS you if we What tail heard might

really is X.X starting, you MinuteKey as aisle so transponder endless auto: it's and smart, taking existing as adding well key basically just tailing both Yes, X.X want. That's off, any not Dave. RFID, the and

of stores in got X,XXX have demand great just want well opportunities see the our it's have We'll existing stores. at XXX now who because that well. will coming both by don't end from want for major pricing year, and there retailers as we we've them, of there, out we've you'll who upside. conversions all customers them So X.X it got machines as as machines in XXXX think in some And time today I over our placement new have the

into So we and you'll and begin why that that's like certainly in we've corner us see turned feel 'XX. that 'XX growing

CJS question from Lee And Securities. our line from next of comes Jagoda the

up that but Intex owned And to the And early answer you Koch then any it it is So own if QX? probably that? I way revenue are have business evolved the starting bought added just you new break guys existing was out similar with because with customers while, gearing that given any can little that to you when segment award PPS signs Rocky, a in not the you the there only expectations assume for to Intex, then that you you've now, are yet, QX?

Lee. Yes,

I'm into I will the we've What $XX So tell annualized not revenue. details million you in going to said get quarter it's the about is Intex. around the for of specifics

size and then we over a bit. months and X business. we months it the would so in then to that we'll And think a the And about the expect for X own Obviously, grow year, it about the third it obviously. owned -- be fourth month of the as we fourth, in expect to for in quarter, next would we

said, I it's Finally, say, would as business. double-digit high we've single low kind EBITDA a kind to of of

Intex. is modeling, to doing the that think talk that's if want anyone JMA, way you So about the to about business. And

Lee. Absolutely. Yes,

with opportunities Intex. growth we're about excited the So

leverage even our We are and to existing moat, with the nice seeing as Hillman integrate look up and opportunities with there some the customers customer new of really some base that out we business. beyond pop

of business will we we plan, do good that digits, that day. excited double you that And get no about we things that again, while our team, no future midyear it's about year, very into and and you to every have We've Intex, with up stacking I'm love when done but them. we excited service, buy watch revved that, probably the about that those, do Difficulty]. ability is and next fly run that because and And So the real are it slim, feel we over high clubs growing year, next years. and [Technical low

more Rocky. one you, for then And

hit Just should $X.X get SG&A percent that SG&A, have on and I charge, million that like is in into it those looks add-back, in was to line XX% integrate XXXX? about sales the as a either start only to been that in closer assume a QX. XXXX your as there or there is How would we much as and in of dollars of then how assuming leverage think SG&A big QX? and SG&A we X acquisitions, percent sales the And

on business. of I and leverage as the the there'll you seasonality we be What a our would fourth the of volumes is Lee. integrate, Yes. little as always tell less you some we have quarter, Clearly, SG&A, because know,

would expect above year, we for but fourth So we XX%, to we'll be, in probably the I quarter, a bit was and be stick still around XX% say, full the said it to think that. I we'll

adjusted, XX% that's correct? And

right. That's Correct.

from question from Jefferies. And comes Gerard the our of Patel next line

questions. if couple A that's of here quick right. Steve all it's Actually

first, about was you think you was talking for I -- your So talking next who think were I it container rates year. renegotiating [JMA,

we sort of remind the should to able us through. there you're that a about pass temporary when gross impact think margin? how on Is timing Just differences

Yes.

is that yes, correct. So

typically least, X, into that X we'll to sheet the up and So have the able go to as on contract at on depending to will for effect X We off. stacks rolls rates May be hit, months balance of XXXX. the timing, negotiate, that

the the increases any fourth in end So really will at be XXXX. nominal or quarter of

or think I XX% 'XX. of just takes something kind gross But to about and said wrong. relative of Please kind if in any margin correct And we of one I'm better Okay. 'XX? puts you me think as about

Yes.

to Steve, think we believe said call, on think, our the we in RDS about as growth we returns as XXXX. business, I

that's of We've And that our kind barrier natural so being kind X. despite year business to over a largest such or business. depressed good because margin rate see floor gross that last EBITDA our in and our rate of rates the or we grown

natural as floor a that number. so to returning, it we And see creates that

were I could a negative, quarter categories be grow be in they'll that think but there'll as that slightly HPS mix over probably of you lot or time, positive the at winning negative. Again, business, a leaving be likely XX%. us see the we're categories, issues to

think, room but to So again, that foreseeable rate, start allows of natural plus maintain type growing we've kind got RDS only future. And with. us I in XX% not the some to we 'XX create for floor with a that

from line next the Genuity. of from Brian Canaccord question our McNamara And comes

dig want I be gauge guess is, to to significantly maybe to And it's to your asset control. of Most my is there? I I you But several on in quarters. doesn't and willingness I guess of from been question a for improve. that little move guys need it your do more I want weak RDS, if it out guess to

the many sell. have XX%, gross business sales-dependent. margin technology growing. X.X don't to in all, need it's on that. to is I mean option do we'll so like to either that that And existing having, that's could what's with there we again, and because would environment, in there. or us next this a said is be an there the that know, margin, been we transitioning on valuable don't have customers as that it. it. not What addition planned of from of because think before what Brian, XX% investment, right Yes. it love have But will things that thing to I mean, I any first without we home in I now We're our valuable we just I've we there's transferring, side business did of hang is bad XX% a with it to where or turn period be new keep this will you a out place EBITDA one if to issue in we to sell we're

here decided for put going to to was sell it have -- value there and no, So keep matter. where and get options a but it there's it our going position we're versus doesn't to we in going we're then to it it. if to shareholders no negative But better

how expectations. is M&A secondly, the It a far took XX then And Koch follow-up has the pipeline in few integration I'm you gone believe last the just spoke. to the about so looking? acquisition had And we like days candidates any time curious how then just relative to about your complete. looks I Intex of terms

take integrated piece. done we have The Great. has Intex the Brian, a job. team business. great Structurally, I'll that

teams We with product operating from operations. of different the have organization sales, the parts our

as that in alignment good couple feel So be but the about we is where over Koch. next feel with months, really -- and we up, The the where about business. as of quick actually that good are we that system we'll side we finish really will did

it super excited So over to-- part of having Intex And I'll about a Hillman. turn

is Brian, that get by Hillman me Yes. I they in convincing a or will for shooting like going tell literally I we've team personally mean, management been you is should what's this be a entrepreneur an again. fish able exciting that to that owned barrel.

there's competition. about going to of helping JMA I'm with not And Rocky excited Hillman with debt right that. as and and so equity the a Super you lot be And know, now, private as Chairman, markets Executive that.

side, comes flip things. out, selling obviously Now some back be they're private when equity going to

the think will prospects I So good. be

said, As couple change any makes sense, of to and great a don't that. JMA see years I

of And our Stifel. next from Brian from question comes line Butler the

X%. like quarter? about then, spread, you one quarter XXXX? the the think price And I the I look price/cost going trend fourth third first what into -- even guess, down Just does in on talked When think, and the you that the was, of

a business. of costs are you a we there you pretty we get-back. around a because negative second we things of rent 'XX, rollout be the be things bit the be of to where And we like mean about There's about see about Yes. think into of think something like labor, with cost slight in would it's I you good price commodity much Brian, the we're potentially were of 'XX But going not now. a first the in none headwind, a at renew is like around facilities, obviously, we will we price those in down you unless little the as there bit expect customers. pricing freight, could relative And we our going that to things tell benefit. What spot from to inventory would go will do think of our dramatic half changes. our going as as of

the about thinking future. years, market X in with Historically, and So, to how price the price, we to those strategically to we'll can't, market to been about about X% we And costs. we to think we now we about go strategically every market have offset take and think have and then when are go with to extent that's we that to how price. that, have

post And they've how if like those an and then quarters? a about opportunities opportunities next second Redbox RDS changed, update Do there over on the follow-up, of what they just the couple have quarter, you look maybe talked now, you the maybe segment, on out liquidation. play some

Yes.

not do that be should At we've will of taking we've is. side started it 'XX. start auto has outside the or Whether Brian, point, and expand X machines it and one of contracts. we and in kiosk what started, that secured how really it's care this us is think we for -- good this us the operators. to quarter, of big One on second servicing for decide essentially other I already in dependent

both the we same act are the juggling about and that's right business. EBITDA rate signed, our So running now. But are and that off margin fleet no, have profitable are both both in and rate

So now. right are yes, it's good their Both on way.

for any hand does [Operator the question-and-answer remarks. program Instructions] conclude session to the And to back program. I'd this Mr. today's like Cahill of further

joining this on you, everybody, us Thanks, next our year. to Jonathan. We morning. Thank for forward you updating early progress look

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

now Good day. may disconnect. You