Federal Signal (FSS) 30 Apr 242024 Q1 Earnings call transcript

Greetings, and welcome to the Federal Signal Corporation first quarter earnings conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Felix Boeschen, Vice President, Corporate Strategy and Investor Relations. Thank you, sir.

You may begin.

to First welcome Call. XXXX and morning, Federal Quarter Signal's Conference Good Felix President Relations. Vice the Corporate I'm company's Investor of Boeschen, Strategy and Also Officer; call President with Chief the Jennifer me our Sherman, Financial today Officer. and Ian and is Executive Hudson, our Chief on

release, to can earnings and be website, by to website. we will followed to release refer as federalsignal.com, as morning. webcast. Investor We've slide the under the the our the into icon presentation online signing some We issued Investor clicking today our this slides on well posted the the which slides Call tab and on The going also presentation earnings

Before in filings with our to and are These we that Signal's subject you today today's in available like safe Federal and Securities statements some documents remind our harbor language that are news comments on the begin, release found of may Commission. Exchange I'd to the made contain forward-looking website.

some not measures to earnings presentation we non-GAAP release these measures our Our reconcile that and In with contains in U.S. GAAP accepted principles. are also filings, accounting generally accordance measures.

the first on we After financial then update Form prepared will file our today. for Jennifer our XXXX. strategic revised later questions. will line results. on open today our any comments, initiatives perspective performance, addition, multiyear by provide details provide for our on XX-Q her start will providing we our outlook In Ian our quarter an will and

the over With would that, to Ian. to I like call now turn

Thank you, Felix.

double-digit and in results improvement financial XXX margin earnings we In in for quarter expansion, and backlog. point a quarter provided orders release. with EBITDA growth, summary, net sales consolidated today's strong results in records margin are year-over-year gross first new and financial earnings basis the delivered Our

$XX.X for the million, million, or was income $XXX or Consolidated X%. Consolidated or million XX% sales for operating compared up last growth year. $XX compared year. were million sales for the the was XX% quarter $XX to to quarter last up quarter Organic net $XX.X million

$XX.X Consolidated the adjusted $X.XX to XX% EBITDA share, QX for XX% for from to compared the to a up last EPS year. was points this up translates XX.X% $X.XX year, basis quarter last $XX.X GAAP year. of quarter last in margin per per share million or million, up XXX compared was year. That or

$X.XX last On in and EPS from outstanding, In an first QX previous million year. year. quarter, quarter surpassing adjusted the for basis, or the was intake $X.XX per record last QX in million, increase reported an total, XX% this up compared year share orders the high, was again per were or in Order QX $XXX year. $XX share quarter set for orders the which to last was we X% of

company high the Backlog and end another was increase quarter or of $XXX last at the compared all-time XX% $X.X for million billion, to QX an of the year.

million our up supply net the a ESG's last results, $XXX at facility. $XX the In of or despite of sales for terms issue of group third-party to compared unit timing of $XX.X largest were million year, effects shipments our component delayed XX% that approximately the quarter million,

for to quarter or the for $XX.X basis the improvement ESG's $XX.X quarter up compared an last XX.X%, up translates points was of ESG's million, was operating of adjusted income last the to an adjusted compared EBITDA last for XXX quarter or $XX.X million to year. EBITDA million That year. to compared $XX.X XX% year. million, XX% margin

income up XX%. X%. $XX X% $X million, year. $XX quarter of operating orders million total SSG's million in year, million $XXX for million for last increase up to this was this reported or net sales an were compared or the of the ESG $XX.X QX quarter year, compared or to basis was last quarter year. XX% XXX target points EBITDA to $X.X SSG's up or the $XX.X and of compared SSG's adjusted the million of for XX.X% a range to translates million million, That end upper year. margin towards last $X.X up

SSG's last and million approximately compared last with QX $XX benefit of stock for insurance orders increase were Corporate to partially operating quarter $XX.X compensation expenses $X the million compared million in from by $XX.X the due higher million. year year. for to quarter $XX primarily to expense, were million an the a incentive-based recovery compensation offset

improvement Turning in margin income year. the XX.X%, the XXX increase a Consolidated contributed gross $XX.X a in statement, now where consolidated for gross quarter point over the to was sales to last profit. basis increase million

were general administrative of selling, percentage quarter a from and sales, QX the expenses unchanged for As essentially engineering, our year. last

quarterly affecting increase expense. a in interest include and $XXX,XXX in in $X.X other the expenses, Other a $XXX,XXX expense reduction million acquisition-related increase items results a

During from year, the also $XX this tax joint after discrete a approved tax we execution claim resulting the benefit million recorded committee refund taxation strategy. multiyear tax the QX planning a company's on of

of the recognition in the in of tax during in million the recognized this associated expense to We quarter. expect tax $XXX,XXX income stock refund activity. second of benefit We benefit current $X.X compared year including quarter benefits tax a receive income quarter, $XXX,XXX compensation with prior an the excess year cash and to

rate $XX to QX Our expense of of At XXXX tax any excluding year. it. benefits. effective effective our without the discrete additional an XX% last tax a between for compares and benefit effective this quarters million rate That be time, to year QX tax XX% of tax rate benefit for we X.X%, was tax X approximately expect the remaining XX% this in of XX% including and

$X.XX year facilitate share in the typically adjust last comparisons, year. in we GAAP unusual for an recorded To items prior this or compared $X.XX our per QX share quarters. overall GAAP earnings On basis, earnings earned we in therefore current with per share per QX

per the $X.XX share were made our to to $X.XX previously exclude compared On the In mentioned. tax per million with current share $X benefit adjusted we share year. the expenses this year adjustments GAAP acquisition-related quarter, per for and earnings I earnings basis, quarter last

from generated quarter, cash increase of We last $XX the an at year. $XX operations from million cash million of during QX Looking now flow.

our We of $XXX facility with availability $XXX ended and credit of under debt the million. quarter million net

debt net leverage dividends low. to opportunistic pursue through initiatives, have With growth position significant remaining our current strategic organic cash strong, financial and invest acquisitions we repurchases. to Our stockholders in share flexibility and remains return ratio

On we that quarter. for note, $X.X second per similar dividend we paid dividend and an announced reflecting of increased during of share, a the the quarter, dividends million $X.XX recently

That Jennifer. turn concludes comments, call and over to would to now my like the I

Thank you, Ian.

while first again all-time rose first themes expansion metrics, discussed. adjusted growth have the margin previously strategies highs. in strength year strong of performance of to records to as forth the team underlying and represent Our including orders many The results back a QX reinforced new the set quarter sales and set we EPS, quarter across start during our sales net

demand Within meaningful achieved adjusted Streeter our year-over-year an in XX% increases aftermarket which at issue despite component Solutions EBITDA. a supply third-party Strong and facility. March at contributors was contributions recent to increase Group, this price Environmental several in our isolated production from were were sales net that able manufacturing we in growth acquisitions our businesses growth we experienced realization, deliver to XX% continued year-over-year and

in production issue than prioritize units on for of this resulted encountering Upon the in X expense months facility times. the up discussed deliveries this our strong customer started in unit at the to XX% to that anticipated. year with our rental And we increase effort of year, note, this at objective previously first destined March, shifted have reduce had to additions fleet, originally our fewer rental we QX we an some own production fleet levels production We lead of which year-over-year. in over

noted, ship have units. of cleaner supplier with the in order disruption, several that teams we began million were have substantially completed our supply solution Ian In worked approximately to component the this to in minimize delayed the as shipments of diligently a issue quarter As unable we timing identified implementing April. impact and of this $XX our sewer

mitigating see for alter given labor, the not the impacted to we businesses, in all recovery the materially good year. second chain improvements. this to incremental More underlying we of Importantly, to ship plan broadly, will and across continue our our expect underlying supply quarter rest believe units our do building plans actions, and access

challenges ESG recently at businesses. have we episodic our remain as So several of experienced,

we that challenges to and continue believe well positioned expect increases supply chain to rate build are throughout to gradual We we respond year. the

with Our quarter dump standout the businesses and improving chassis sales had X% supply of up of chain truck the for our businesses majority a back on body availability and fluidity.

facilities, plant key year-over-year body coupled processes several truck Alabama Bodies in contributing within was Ox our in our dump a including at increased segment. The ESG the margin our rigorous with improvement factor XX/XX production Fayette,

a flow businesses, of combination we chassis demand supply a remains Although increases X minority across dump rate increases pent-up units. build improving Class on for constraint chassis demand X our replacement optimistic Class further and remain body underlying share for of of a

equipment best still our body customers our Shifting customers also customer XX% income III continue introduced to launch parts X% existing increased at and across chassis. teams throughout X% is environment. increase rental product, a chassis NTEA and chain aftermarket rates and innovative of Our year-over-year markets. elevated. remains total led lighterweight have in received to We solutions in by March additional show our while this to as serve offerings iGo demand fluid product recent options increase Switch as this the such a utilization broadens an interchangeable Class our for end the feedback aftermarket One further it example year-over-year, activity targeting for as on revenue sales positive strong remain supply find in year-over-year

year-over-year parts its sales in and Force the our parts Ground revenues of also XX% contributions acquisitions recent approximately in provided quarter. with growth total to meaningful The TowHaul TowHaul of representing

and to introduced recently further platform new via are as continue see for acquired businesses growth the M&A. team we forward, aftermarket optimizes the businesses potential to Going

ESG XXXX. represented aggregate, the revenue first aftermarket of quarter XX% In and in of

at results growth during of Sales The adding Systems In margin $XX most the Systems acquisitions of growth, target our an contributed Security continuing our to top led our range. line with with X% to revenues strong SSG strong line top team and also another to of XX%, end Public million Shifting respectively. trackless, EBITDA delivered Warning and of with organic acquisition, Safety its Safety recent margin start recent quarter our the addition adjusted XX.X% quarter. Group. and and top up Equipment approximately the strong charge our

leverage basis efficiency price from benefits continued year-over-year. increased point which resulting contributed strong volumes to are a Our margin realization all operating recent rising of seeing investments, on teams improvement and XXX

the pleased our an generation in annual represents flow as are $XX typically basis, and than quarter due On to level. Recall, capital million our we rose conversion cash first Lastly, cash rental the we cash with lowest from XXX% target working continue build operations quarter cash quarter seasonal investment. more year-over-year. fleet by to

orders offerings stood product for record. remains $XX supply chassis and quarter high a strong our shortages dump now for markets the -- weighed representing current or up The strategic a approximately of industrial in with replacement composition equipment our different markets on intake remained pent-up year, this funded quarter. new We first and to as believe out our last initiatives Shifting million combination levels. publicly end execution truck of demand market bodies demand between driven though by demand have quarterly current on be XX% to with conditions. Demand across order end orders utilization balanced

on mentioned $XXX resulting in of examples projects last seeing our are early used our Infrastructure Bipartisan billion being Bill. we equipment As the from call,

sweepers, early point, material infrastructure-funded at pieces Although equipment this some the and safety-gear of of warning at street systems. use currently equipment proxy includes not in

we encouraged our in suite infrastructure of innings to are the see we prove of to demand a should still products bill. pursuant believe multiyear early remain these and While examples, uplift we what early to services for aftermarket be

We diversification positive continue for of publicly as strong also and see market efforts to business results. are funded our side share our demand the yielding

of budgets, to several range for funds provide and budgets, some taxes mechanisms including Canadian European products, our business certain water for SSG funding especially funds U.S. public-funded cleaners, U.S. for funds, around our refers general Canadian federal context To this, our pharma. sewer a provincial municipal international flagship federal wide

did million compared slightly Mexico expect million $XX reported the for the down fleet period, in pleased were safety last order we record with prior orders booked we orders in we QX year, a were QX that public in customer quarter. Recall to equipment SSG although $XX to repeat. Lastly, year an from not that this orders

lead order increasing production healthy to build aim maintain trucks on backlog Our intake. teams more and reduce focus levels continuing we continue to as to while to current times a

good We continue that scaling have ample believe to capacity production levels. to allow labor we of physical current access and for to

our of targets. used minutes of to few to take our marketplace. Growth the a multiyear many key of foundation on a continues margin on update we rental marked to raised provide which our want in Starting resonate with now an recently which internal I couple equipment strategy aftermarket. initiatives, well growth the and

offerings, trucks, street blasting addition many solutions. customers of Given new we of our for sewer our the of rental products safe and digging flagship targeting including used sweepers are cleaners, water and cohorts

Jetstream, our single-digit use rentals composition great recent is same our service time expanding the parts, XXXX, a by have water needs grown CAGR at equipment. while best team basis was our that frame. since blasting revenue XXX the a strategic of years of the points customers' at undertook as of of has jetstreams change increased example action for over to and the serve This in applications our time business, in mix strategy high aftermarket success which aftermarket sales

across We see efforts optimization other products. similar our

last a our team for safe digging X cross functional TRUVAC of over undergone our In industrial vacuum strategy has products and fact, months, commercial review our the motors. a Guzzler

process, rental other part additions incremental growth and need for and the certain of assets territories investments that service we have As identified in related assumed. of Guzzler that TRUVAC have form certain in underserved believe this a be addressing territories, in warrant currently recently we to opportunities we

beyond drag a outlook the more contemplated to As represent also to result, incremental million outlook year fleet TRUVAC incur Guzzler had year, embedded the currently XXXX allocating what to fleet for pose we been of EBITDA. These headwind to in our investments and $XX compared guidance. internal to a investments revenue these expect into over original current revenue previous By remainder our have our factors year. of to originally and of production our our we we a latest up the expect

translated the be equipment longer-term operational, expect we TRUVAC become Importantly, to following used outlook many our as the rental parts rental initial aftermarket with and investments subsequently equipment units income rental these purchasing sales into and accretive Guzzler generate period. to and customers

business believe to providing Recall, remains States in cases dealer years. the Bipartisan demand future coupled us model addition tailwind proliferation excavation cohorts. United in important the for with use rising of aftermarket an customer attractive hydro demand. leaves rising of coming the and helps for partners our from the adoption that returns, to access continue our Infrastructure This, our regarding In us new and digging Bill to safe excavation methods optimistic we

business and aftermarket newly used a our rental spanning platform. that is see powerful the offerings service, to growing we short, ecosystem In acquired equipment particularly as parts, for companies coming on

to footprint of serve over scale. house fact, the had facility In aftermarket different XXX customers us opportunity our new to at attendance. brands the team's showcased our out I in shared just in last we area, where is X open a at shared to location Federal the Denver dozen week, that It JJE allows best Signal customers attend located our

active. remains also pipeline M&A Our

our opportunities diligently on are surgically We businesses recently working new criteria. our meet evaluating while optimizing that acquired

We vehicles, of core we the sweeper electric at remains electrification momentum and development several of the the remain pleased product our Federal projects on early across our with street of new orders. family our focused Lastly, are Signal identity.

including products We SSG and siren are we our orders product control, Switch Go expect for within new also to the a begin Class month. mass next universal introducing and X accepting several businesses, warning

outlook $X.XX range execution from operational $X.XX to our adjusted to setting full with the strong the backlog $X.XX record outlook $X.XX. offerings company of prior our rest a we first range raising of our new quarter, performance, initiatives, and our backlog for products this our With both to remained year our strategic aftermarket of and Turning continued and orders against year. quarter Demand new the for are our records. and EPS our to again

in originally parts increases of first and demand our contemplates to fleet view rental reflects offerings. the prioritization guidance this As external from The slots to service given healthy QX investments noted, higher outlook than our gradual build anticipated QX, quarter continued our growth our strategy. aftermarket for our in also of and and customers

reaffirming outlook between $X.X we net time, year also full billion are this our and sales At $X.XX billion.

margin the double-digit to half target earnings in We range. pretax continue of EBITDA upper also and and performance improvement expect our

Lastly, $XX we CapEx to million of $XX the for outlook our are million year. maintaining

time, I Operator? think this At questions. for we're ready

from Our Barger first Steve KeyBanc comes Capital Instructions] question with [Operator Markets.

the huge want Obviously, with channel. to start first a dealer I focus.

dealers slide a percentage growth the and on a their for it to share? substantial consider the market realistically, grow You share spent opportunity lower whole of internal have in What have share what region share initiatives. versus where be hard will percentage you'd

Yes.

over we this -- initiative market with closely understand better undertaken in our and moving So year, last beginning share. working XXXX partners year dealer we've to into

in effort. his Felix that leading role fact, strategy In is

And partners. strong we dealer have several very

of And our believe, of opportunity, we agree this organic all there's would some initiatives with move growth of grow we a to forward. market helpful. think them particularly been initiative I as has share, lot

of out. guess the for I as -- okay, meaning the and infrastructure meaningful you initiatives those revenue rental percentage as you place push to all what drive in channel is optimized is aftermarket,

think opportunities we there's always improve. I think to

with We move and dealer new customers talked partners equipment, equipment then used have for several we strong as about new of ecosystem the that up door terms opens in that sales, forward. rental we the we've think

opportunities improve forward. identify We we continue to as move always to

X Okay. channel. just about more I'll And -- I'll the ask

I target or know aftermarket is mentioned include you for and is, the it a little to backlog rental around where hard new equipment for that with it's build rental quarter. think less. I XX% this to And your

seems for in margin basis. aftermarket more or opportunity. a like much equipment can is, the favorable? trying versus it on favorable question and selling it capital Just is to you or or third-party rental benefit The line How compare return a because on big gauge

-- think into fleet, of over equipment the X a a piece a piece you our service of of rental to at put a and I optimal when piece the used rent of of of look cycle years for you we the the kind you it equipment then sell consider Yes, you that it you Steve, time X get when as period and revenue life period parts equipment.

to equipment retain put aftermarket When kind equipment versus refer our look And at to to we of new resale we it's through well. as that it attractive it. sale, tends whole pretty value more return ecosystem that its a

a while and yes, return the with new that's to fleet. we -- than investments 'XX, the more are may it the be were returns making we're standpoint, EBITDA sale. in From to explain attractive So in equipment the longer-term trying a what headwind

And that's the investment. so of from the a return X drivers standpoint, for really

And what's both exciting with us our because for dealer for that used that, it's customers us opens price point. for up equipment is at a different it particularly partners, and new

No, there's get understood. seems of in But Yes. dealer like opportunity lot line. of back a that, It with of lot channel. facets through I'll the a different

Our next Moore question Securities. comes from CJS Chris with

just And with maybe for rental second. stay we'll a fleet the

the about rental of talked could QX? piece you fair some that third-party that, to bit say impact component of normally production on to a took QX. some have you that supply, impacts help that Is of obviously, you it little So fleet -- QX offset from

now, QX. we shift did from yes, to Right rental some QX of the delivery

In addition, about cross-functional this of result a as as we force. talked task

baked the and investing guidance equipment. this We gave of will our equipment morning. improved $XX in into million up safe We digging we to be equipment that all that Guzzler

shape. we think pretty So in we're good

helpful. Got you. That's

You a talked little bit. this about

deeper be I of point the some sweeper few of at and years, street the just safety of the on spending, XX% evolve at infrastructure next that sounds timing. a go the by that Or And over as should roughly XX%? early touched how maybe look think products things to I balance some more equipment timing? focus. I into little It are like So your the want would

Yes.

sweeping, trucks to limited examples far So systems. thus with dump respect some we seen believe then particularly and safety we've warning our equipment, street

So again, we very we're in think innings. early

But to XX%. understand, particularly going. were hard or truck dump have because we million up they dump it's trucks Sometimes with where multi-uses saw $XX orders they're

was So encouraging. that

forward. White We that company believe we and is House multiyear for move we of monitor provide cadence beginning website, as tailwind and continue a the that to will projects the the

obviously, from Signal. EV hurdle the like just any not biggest electrification very last significant for important. Maybe coming necessarily customers it. move looks is cost new X Federal The X to It me. product Got by the development, to cost,

the understand Just trying of kind and might medium term? thoughts your what seeing be over what to you're there

Yes.

street be to showcased show. on tenet we continues EV So our small, the EV important single we And although price encouraged of but seem of still the for dump pace we manufacture. that committed don't chassis NPD continue the as that development to We EV by And continuing does particularly, NTA trucks several our increasing of the electric product, are around fully the be sweeper move to will an and at we We're to orders it's objection. the sales program. -- introduced But biggest cost forward efforts. expect increase. our

next comes Shlisky question from D.A. Mike with Our Davidson.

it's to I is your small business. get just bucket of some world, equipment detail a across in others part of the of using other on of et relatively the of a parts construction safety they're It's certain large rentals. plans of certain kinds more trucks, proportion dump want sites, you whether and It infrastructure kinds trucks from cetera. still to for a lot

of Kind rental here? can this of guess business term, to be? think large of of ought do your more kind I kind of you long or curious, far a could I'm how percent go how

Yes.

X thing to think many And buys that's and can I truck, usually the think the we the between the when in it's about rent years. is truck. ecosystem. times situations that's XX months the renting a that the And entity but important vary, truck

to the that is addition important part parts in ecosystem it's of used and service. So that equipment an

of We in time you look can rental you growth it in the field. Furthermore, rental into over support that if changed efforts business XXXX. in we see meaningfully began the And fleet, at our several we and have investment strong hasn't continue to company. their given partners, the the our

used critical going kind our business grow. is aftermarket ecosystem we that back about, that And continued And is we we continue we a talk part business of is to again, of sell it and grow. part of it rent, That's to which ecosystem. that's there's largest believe as that that's, continuing the parts equipment, service also to that and that parts, to

So to it. is pretty much putting that, the you're recap of then just kind assets in added now

a revenues? of make your rental You broader overall or don't much have the lost lion's to plan really share a

the a Yes. about territories investment in talked we're was just investment that specific assumed. we Mike, making certain recently we

So it it's investments the additions product. we look it our product by we at look We more -- and geography. look at to the by fleet, at

very in how So we're selective and when we add.

And that so this recent that's really for the driver most investment we're making.

it. secondly, way, some ask you about for feeling you're wanted any vocational Class in here. to Got supply point, OEM of this point? for it X in Or your At feel factor them investment chassis then about I And is supply. that production? increases this gating to the not right all you're year how now I'm of at the curious chassis, as chassis These do

good. chassis X issue is We an for us. not feel supply really Class

Seaport with Liptak Walt from comes question Research. next Our

the I wanted about backlog. to ask quarter. Good

at at strong which this like backlog at too point now You point is a had billion, what -- $X.X and the is orders a is bad thing? But the big there which the and becomes quarter backlog thing. great a

we're which translates trucks I we've think throughput very at building various our businesses. focused on increased talked more as into about,

first had we're year. the of progress the our for have at X up was our We lead supply focused before some the issue production in reducing periods and XX% making March, we third-party Streeter chain times on facility

Signal our So the we're efforts. system the implementation XX/XX of Federal and -- operating with and

through expect down. increased expect lead times throughput year maintaining come those to we the continue strong while We to orders,

you should down? the do comes How around the the this think the like if of end do backlog level we at year? stay $X Great. Okay. successful? billion year we it And through about Or think you're

Yes.

want time, lead that shipping to Jennifer the obviously, to we production order but intake. more, at think as reduce healthy those maintaining what want also we by same I increasing mentioned, times and

of number, nature. production, a really think increasing So healthy that our than that of the day, year per rates for kind goals But order rather focus increasing maintain we I backlog want our objectives -- level. intake things build on to are

that's So the really focus.

then big wanted dump to the the And on How basis? dump last is great. just the of And an the and orders revenue in that. trends questions were about some sounds That I Okay. couple orders, business what the truck for around annual years? the ask truck

Because the the couple whatever about were not supply issues you some order talked years, I'm or last pent-up recalling chain and demand. on of chassis that there levels and maybe in

So you big the growth of years? for the I last the And that couple how wonder help quantify for if can revenue was rate business? what

Yes.

So total XX% the dump trucks of represent our revenues. about

I that or million call in the think on XX% we mentioned were $XX business that up the year-over-year. orders

there nice seen some we've what really chassis So the is with flow. growth improvement in the of

because chassis recent years. We trends, do a there is recent is demand business flow to has believe that point in the your where that, that been of some the business on pent-up -- impacted by the tightness in

and saw pent-up us there with the demand do gives in going to is is we improvement in we believe QX demand. pent-up encouragement what So chassis, that there that be

had which I about kind able is we've And have as seen to some encouraging what our because we we think think businesses of been geographically, also of -- is expand really earlier the of We probably the dump funding dump area, X that think Bill earlier truck. for potential end the is there. trucks the about question and would a be Infrastructure on

we're in probably come. encouraged there's more what and I So think QX with we to saw

got said. reiterating team. having early We've I'll expansion really focused good just a some add Ian of growth on kind they're what successes. and market share geographic very and Yes, there, They're

more businesses really dump quarter by truck our supply, to improved the with chassis . come. So good and

from Sidoti comes question Burns next Inc. with Our Greg

rental the more of Given the the diverting backlog the maybe little and about extended substantial maybe production a towards calculus lead the just times, thought you talk bit can behind fleet.

looking -- needing dynamic you're those? even in lead for what's with to both to make fleet do not could manage be but times, idea are how the I and understand we get does want that could the same in maybe hand down time, hand to that Like you investments longer-term lead it into the the were the this rental the times that also at also there? in those higher factor opportunity, decision

Yes.

think is TRUVAC Greg, talking that talking and investment, only I the about we're Guzzler. about specifically, we're

lead those And area the an are product so probably be would what times for in normal. we call will lines, that

and in So situation same we'd with we're lead like. than the those sweepers cleaners are where probably sewer not more times extended

it's on really normal. So where investment times lines the are product focused is the not lead

So that's area. X

strength that and fleet, need need to is replenish. creates we've that it's reason add the equipment that the that there other used just to units seen sales The more to that given of

prioritize shifting of We to customers. in production there the talked some QX about

So fleet there add the is in to that We had to shift that QX. we units planned had.

QX. Some now shifted to of that has

So for guide. piece the and investment are our we're is the somewhat more The TRUVAC that's kind of Guzzlers neutral to And lead the talking that year, full is on side. times normal. where area primarily about incremental prior again,

service, for opportunities And parts be an particular, add used important to monitor prepared parts, assume that along the used these rental I utilization equipment our carefully safe believe and for we continue sales there, be in Guzzler there that see we we with and and specifically And for because additional company. want and fleet we growth guess territories, is I'd service. will to to to area we that equipment, digging respond as

with Stonegate question next Storms from comes Capital Our Dave Markets.

Dave today. sitting for Preston in Graham

guess type tuck-ins forward? in business the remarks on the I what any M&A sense pipeline of environment in that strong. to going be mentioned your you M&A color make share could and You seeing prepared continues additional your for you're what can

Yes.

think We're over these have in right time. number different a of sourced, are now. pretty a cases, opportunities many period we a in of Again, opportunities. developed that relationships we're and we've I longer on working place good

a come. to of So pipeline forward. we will is move to full as meaningful that part I reiterate growth be more our continue And guess story M&A I'll and

I open our together. in at to together was remarks, A out last under then It all mentioned Federal I really see week of some in of exciting Denver happens umbrella. my prepared growth what good house. our working brands and some you organic initiatives Signal X of example was when bring these M&A

fleet But hard I guess more what orders. it's And Very Got quarter, you're fleet of from you touched from Last on predict. large follow-up. demand little bit in Obviously, sort the it. some helpful. your seeing could perspective? then a a the some talk about orders, customers lumpiness you fleet of X to

Yes.

business. So we're tough SSG the believe 'XX. an dump had And sign the one of encouraged of again, by, board kind they orders, talked and despite funded $XX fact that the which was industrial strong. Mexico as and orders side, year-over-year across because demand QX the health encouraged we strong. And to were is balanced million it's the truck publicly And about important were very a our things the the particularly of of was comparable onetime between is we pretty in the of the encouraging order we

over no Jennifer are at now questions There for further Sherman turn closing time. would I back like floor to the to this comments.

their for long-term In and dealers would We and for and strategic us you prospects today, stockholders, you that We for on framework. we to customers closing, are the to joining against confident soon. would reiterate our we'll I to businesses focused remain talk employees, express support. in like distributors, like our to continued our markets. Thank our our executing thanks

This teleconference. concludes today's

at Thank for your participation. you this You time. your may disconnect lines