Alamo (ALG) 1 Mar 192018 Q4 Earnings call transcript

Good day, ladies and gentlemen. And welcome to the Alamo Group Fourth Quarter 2018 Year End Earnings Conference Call.

During today's presentation all parties will be in a listen-only mode.

Following the presentation, the conference will be opened for question. [Operator Instructions] This conference is being recorded today, Friday, March 1, 2019 I would now turn conference over to Mr. General Secretary President, Alamo Vice Rizzuti, Counsel of & Group. Edward ahead, Mr. go Please Rizzuti.

Thank all should of you you. now, By have release. the received press copy a

However, you and we would send you copy can please missing and us after one the will if of make company's be release receive list. call, which sure passcode replay contact hour XXX-XXXX, to on one, a and (XXX) at week. a anyone one is are for like run a replay the the accessed X the will dialing and There begin call with by (XXX) distribution be The will XXX-XXXX, XXXXXXX.

is a at being call the on www.alamo-group.com, the replay company's available and be website days. Additionally, will webcast XX for

Ron are line up Robinson, Vice some President, will today me opening President Malone, Chief Treasurer Management and Officer; Richard with open questions. line Chief and then the President, the Wehrle, Executive Executive make for remarks, Officer; your Dan Financial and Vice Controller. and Corporate On we'll

During GAAP today, of to earnings their results in these in non-GAAP certain remarks. applicable reference the release. non-GAAP management are attachments to Reconciliations included the our call numbers numbers may

to the statements. to over turning I'd a Ron, forward-looking Before comments few about like call make

We to Litigation provisions are of making Reform statements Private Act made will be the today that Securities forward-looking pursuant Safe Harbor of XXXX.

results. issues, like demand, materially company forecasted update not company's introduce from may following: as Ron. please contained listed company's which actual results the the weather, ahead. undertake the this from cause results competition, actual differ speaks would SEC those time go Ron, involve any statements Risk reports. which other could in materially and periods now to I issues, risks and the date. to of herein, to are only seasonality, information obligation known to future Factors does The time uncertainties, Forward-looking currency-related to factors market cause differ and unknown in geopolitical which Among

with of want we will for Dan fourth we for remarks, financial will review a you joining following comments then to formal to look thank may all call I And have. more quarter us taking forward end a you, few our any provide today. results CFO, our XXXX. our our Malone, Thank Ed. questions and year you of and the begin

So please go ahead. Dan,

you, Thank Ron.

Our again and fourth records Alamo quarter XXXX full year results set Group. for

and million we major sales of yearend Some income annual surpassed million million. and prior $X annual million the exceeded per XXXX X.X%. $XXX of of net million sales, billion, milestones backlog $XXX Fourth $XX quarter $XXX quarter of $X annual XXXX exceeding $XXX the year share, - and included, in exceeding sales operating the annual income exceeding EBITDA fourth XX% by exceeding beat

XXXX sales X.X% year prior the the b R.P.M. up over results of increase represented acquisitions. Tech Industrial sales X.X% of Dominion Old sales $X XX.X% this comparative growth quarter. were of with growth sales full quarter quarter the acquisitions. R.P.M. over X.X% billion the X% of from and million, our XX.X% fourth $XXX year organic prior the of For organic an were XXXX up $XX.X Santa sales year, million were Brush, excluding prior Full down year the fourth year sales prior over XXXX Brush net in division excluding with Dominion quarter sales. fourth Old year Agricultural and division fourth Izabel Tech

recovery general of an sales unfavorable market. this currency over quarter. prior were fourth fourth year, the over prior the year division's the XXXX XXXX. sales X.X% division were the currency up without down year have yields effect delayed trade and division X.X% fourth Weather, million, local Izabel acquisition. $XX.X this quarter of up the quarter X.X% were over translation Without up For agricultural U.S. disputes X.X% but full European sales Santa crop

grew year, the translation. were margin X.X% the Fourth $XX.X division X.X% XXXX quarter quarter. without favorable million year of For over gross sales currency of also up the and full X.X% benefit grew prior this fourth

fourth to of year the quarter. XX.X% for compared sales, XXXX sales compares margin gross margin XX% Our XX.X% prior to for year was the which net net of quarter net was XX.X% prior of year. sales Full gross

margins during relative taken of percentage Our were XXXX offset pricing the cost second unfavorable actions of half an input to increases the them. squeezed timing by to

XXXX continued net million income year higher fourth income share XXXX XXX - rate, for up prior fourth helped of current prior year tax purchasing for year million quarter income XXXX rate margins quarter was effects or was XXXX XXXX $X.XX industrial by per year was was than XX% and equipment an per of productivity primarily unfavorable million $X.X initiatives share. sales with tax income results, to prior year parts also the X.X% organic legislation tax Fourth Full year X.X% growth, the year and gross sales grew improvements. Full deluded or and $XX.X operating income XXXX income more without net rate and the of net to $X.XX margins onetime to for diluted year the our to or XXXX full a the - year and gross by the per year quarter for U.S. operating sales acquisitions. quarter year is XX.X% compared factors the fourth X.X% were prior effective full constraining compared our constrained effective XX% already effective offset operating quarter, compared the of quarter compared of Full share. million diluted $X.XX $XX.X XX.X% from tax sales mentioned. net by quarter compared fourth than Fourth per was also X.X% net earnings share prior of XX.X% or net that excluding to or prior and per million to XX.X% prior share division new net sales XX.X% to Our both aftermarket prior prior mix Fourth from benefit were for operating partially $XX.X income over the $X.XX income quarter. year. income compared to income the year. of Net XXXX the $XX.X for quarter deluded of due was

million, prior share fourth onetime net year investment and retroactive for $X.XX and compared new also more Excluding by was the full legislation tax increased effects to targeted the lead operating compared $XX.X net additional legislation, both fleet improvements net continued to with activities cash million the XX.X% $XX.X Capital which make times. the XXXX. growth than in rental prior million, diluted full from support increased year in due due of respectively. rental operating to compared cash and in of totaled Full in entered U.S. $XX.X mitigate we provided increased year full our Adjusted debt needed deluded income million XX% - increase longer per in earnings prior year. year, capacities Net XXXX XXXX for to year and capital million working chair investment the EBITDA large of order of the XXXX compares of our and end. of fleet net to up year-over-year. production and cash difference the backlog deluded or the to Also tax share spending the $XX the fourth to product year. quarter $XX.X million prior support capital $XXX.X $X.XX prior up production efficiencies. and year capital planned million higher investments year to demand million to to We've inventory supply up year from lines, primarily income or these was provided was our the level year a taxes level assets, $XX.X $XX.X the effects was The in cash of new over million the the and XX% vacuum per $XX.X trucks are of million per in $XX.X quarter

by the very an ended year but ending net turn operating the of full healthy and summary, the million of quarter year results over sales quarter quarter back year which record sales margin remains income mainly call backlog announced Ron. fourth $XX million, ahead surged the level, I'd million, like increase. prior Backlog income higher fourth declined our year XX% to in highlighted $X agricultural now fourth division and and price were annual at exceeding fourth at timing order over a year billion, the to $XXX full end. In orders record a than Our September backlog. order $XXX due XX%, annual the quarter over to about during operating in full and

up, division product lot nearly good by pointed we and we've certainly quarter XXXX recent our of we're demonstrated within strong Certainly that global location. record of always business where release continue. facility the across is Old believe thing not but the back Dominion to again we challenges quickly consolidate our and for new on R.P.M. the was initiatives quarter so we our commented good year the we think out and a and new division, will once strategy in have this. as truck industrial There that manufacturing increased new presented up the again the group, year benefited Certainly Dan. forward challenges seems we're on during vacuum XXXX. introductions. aided and this somewhere demand further indicate results. and Group finish important construction us to no we But XX%. going the confirm for Alamo had to today. our Alamo in very by focus of We've changing sets in we division reacting just to to industrial range in product we investment certainly quarter shortage in press XXXX operation results entire the off And led continue to super pleased numbers year Thank well the Once challenges be investment Dan and you, one into in really conditions we products staying recently pretty in CapEx products, on allow that I some Group likely a economy move our technology a announced focused various were Dan acquisitions by increased the is the faced which even and of in the there's to But them the and for as our fourth company. actually the were sales about a fourth But Wisconsin the by of

in is this further strong being helped and are industrial All will as by we move I the division. And the of we company majority feel of these backlog, challenges areas should in some such group input which - XXXX has as built momentum maintain that the our help some continuing than increases should actions positive XXXX. these strong affected challenge while I'm less in sure XXXX XXXX, to continue be costs of in usual a higher in have into us

Industrial to our So for about good division. outlook feel we continue the

well Our Agricultural experienced for market in division conditions X%, certainly we than outperformed over year the with challenging our though also sales in XXXX more up were markets. industrial

input move new - hopefully should XXXX, held year start very to from steady, should we likely in they the down they into again but incomes well year, Market year, sales only higher to years the mean ended are conditions cost in on. initiatives so actually ago. we which half other and we thought were ag and incomes division XXXX, but market soft introductions performed margins remain of from sector of could versus agricultural highs good despite up chance a a once As weak we the marketing range as and or benefit was of for to product five year entering going were the thought some I last but serve, sectors somewhat not the be improve we we as increases well. down we in Yet have four the feel continue felt and the second up considerably farm up there farm broad below the as

operations in Alamos with XXXX to the also European record Our contributed overall results division. nicely with sales

the Now we're overall results of pleased with general Brexit and negotiations. European surrounding the lingering the uncertainty given economy softness the the

products McConnell benefited new think which and all - new by going introducing many performed being mowers the about control excited they options UK help particularly and strong led initiatives remote market. from Our features union range are unique and have of particularly will Barro the which is new and very that already [ph] to well marketing We're has forward. them continue which we operations well-received

And total, a business compared in results and to results though be are there we pressure likely market to year of continue XXXX. propelled will our other we faced should little ongoing to challenges think to XXXX good feel some be less us in we inflationary the also development and this And benefit there outlook are Still to in major while fundamentals which in linger. more we the So see our will in be will previous that year believe in thing record capabilities. us also help increasing most to continue XXXX, the invest in last projects in the feel XXXX challenges of will pushing market should comparing the We our drive even consolidate years. these a operate. to number line about product few was the help support we continue spent up we in - outpace which technical significantly are we to capital of from which manufacturing initiatives on the of little and growth our growth more spending our the spending more footprint what sectors really further organic we'll we're which upgrade

They will that at our of pending is that further both level initiatives products two quarter. these acquisition deal and to enhanced equipment Group and ongoing couple should they Power. a manufacturing systems interesting in Power and complementary end good operate This these have All to recently they products unique good nice the which next Dutch this Together of Dutch Europe years. very be drive and of underwater growth as our autonomously. to range, add we by very serve. success. offer are ongoing equipment the in the feel is Alamo also be to products. the completed to critical we'll will improvements company, with is the announced getting markets margin forward results and some products prior and maintain both on focused the look feel that we sales to first vegetation We good company to our organic So for our people such

Brazil is good Dutch company. I between company think herder by how one there a of group with originally fit herder in which years we and bought Power in is few ago this indication the was are Europe, us so their relationships founded already

robust opportunities acquisition interesting pleased general - remains also activity we're that we're So in several pleased very with under evaluation.

record already the XXXX put achieved with we've in for us and pleased focused you behind your ways thank in we're while XXXX So and that are results support. many on beyond. And we

future. like for With we have. might As the open floor now to that, I the you to questions proceed would any

[Operator Sidoti today question Joe Company. you. first with Mondello will Instructions] come Our and Thank from

Hi. Good guys. morning,

Morning, Joe.

fourth in total parts maybe about quarter. of and sort you percent it it weakest, think I was was of ask to wanted down the like trended So the the year as the declined, of of sort looks in back revenue a weak that X% the half sales it it XXXX

what and going of XXXX you're wondering how that your into just So XXXX? sort thoughts thinking about in happened

you're quarter, little soft to know, they a on fourth you and we're know. But fourth a quarter. we the a tend sales even see quarter had good didn't right, sides Part you fourth weak be Yeah. little

I think ag they're and you being also few - there's things know a soft market actually a everything. like little the

there. sales as some I market of sales down little And because a we we you one it were a whole It's mean, that seen percent I people mean, this you think a up. major there's stuff. I weakness spending, haven't trends any say the though know, good were a their know, softness we watching noticed farmers like type trended little bit were I - think. thing

was not too, much. off It but as down quite dollars much. wasn't in as little a it So

we've all of year I snow. to whole of off So said you there's this of mean, goods I they we're But And like been removal, some I think more it's was with in said the know, think the first which it's I pretty I end softer quarter. first you know, snow nicely to to like think But like don't soft sales in that in don't… pretty we you We've ags I think But products, We've winter, at a factor. contributing market a in even the got We especially one lot a actually the winter though losing like little, ag. the think the the this good the first seen year. And more a year you they okay. okay. quarter know, initiatives that share. we they're market I conditions good. grow do did think aimed started of but mean, you I off a know, it's for trying - of start were been probably, in area. in but first know, some total few parts,

think Ron, a soft in market... I would

Joe. Yeah,

due you perspective more to $XXX of year, if XXX we million at up - up kind we're know due Just The the weather in we're overall went of to I not from up what to just of But the from $XXX August XXX $XXX put in and that over much also can if at that lot went on actually to goods to whole as little are and bit which and in trackers marked XXXX then to is manufacture. XXX a part you to for micro we of you fact mix nearly the chassis of quarter-to-quarter as - we million a have parts 'XX. and impact one and is million in years it in look look total three some you factors. mean, variation kind look in sort XXXX you you know,

was I'm end have know, just on I year XXXX. in going of your the up mean, going XX%. they're up thoughts clear not The wondering continue to a half remain into to markets And last that of in least XX%, little the are slowed. year. seem first Ag the you sort XXXX markets it like at you Okay. backlog growth surprisingly soft

industrial or for of I what of just you're sort that the growth segment kind high overall maybe about expectations Just XXXX? guess overall that thinking

the I course, I know industrial Well would we to I what mean do you give you of know, forward markets. - sales out division ought little say, mean, organically - bit better the be. look than think don't we I a think

year half some the I think be it the We ag, first year half for to chance be up. think the has flat. second will fairly

have head Europe, better in another think I again come head Brexit - I think supposed to bit a March, little that a at I end know don't know feel you the to of a as it. and already Europe's you are countries to or a what just in come recession. in bit But we'll right and they'll I several delay softening Europe little think know, Western are economies now

So a of little I think I softness like probably say, there. bit

some product for we've with market. reasonable probably introductions growth that a for doing be bit think but I little and of ahead organic think will new us been year, I next

acquisition you think Power know, Dutch of add. certainly the I will

we But year and XXXX. much think - next still you yeah, we're like we much. be early up a how to guidance it's this mean, year predict I as don't So actually definitely be give up little how think we'll the know so to in really to going we

mix in wondering you've grow Okay. The quarter. of I'm what. the the XQ sort pretty margin issue hits XQ in of fourth in seen last industrial margins quarter falloff The for sure a margins segment? I strong, if industrial the fourth just that's in years those that than couple not in was what stronger I'm or were a expecting.

Yes.

a I couple things. of think

being margin right, and being are a in our utilized all second vegetation to quarter trail like highest our most equipment quarters and we off spare spare which higher the tend fourth [ph]. because I usually little products bit when of be third our parts are First you're parts mean, the maintenance margin - is considered

up where effect. difference like I parts is in had fourth were be a probably product you spare bit year we of division taken up. the held know, I you So I but A that little the more in better it's pricing year little. parts in This fourth will usually bit think in the those cost actions as little say, price, price think earlier Also usually quarter quarter saw starting little there are increases a mix off in quarter. industrial some fourth a to result take spare increases. the a XXXX And

equipment like You then don't that effect put they selling. being say, take we it's - once I takes immediately in new know know, you it them we're on

price So little effect were the most say - decline. like taking was bit to did you that there mean price you of costs softening I a there in quarter, in I I know soften. due But the benefit increases and mean of steel we said, I think little the there, probably offset won't mix. I got margin was prices - a we and increases know, any mix fourth input decline a of

down So cost - that little to it still put imagine place have price all yeah, I maybe the flowing are The the was of later, going to witnessing now. on sort ask come touch increases in through you steel backlog. start I prices I'll been price situation, but and this we

that or if of time? XXXX? a I we this at that to in guess were in How situation where price So I XXXX. at sort that? see to that does you some in happening point how it is, least don't Do is XXXX. the compared you early cost part in but in where know beneficial XQ see continue Where the benefit do spread flow a see of should

going price just probably because see input we're I Well, we're see anywhere cost know modest other pressure. is little - the think don't flat you're pricing to near I right, know why you in see cost right in to the saying that's to increases and benefits mean, yeah I is you now going a Yeah, more - think or some I to of the earlier steel going pricing down, XXXX. we're was of starting increases think I I think

positive, spread. effect you we that a believe huge I positive margins to mean, not our in cost be it's momentum some I marginal a effect, know like price we'll say, think on, And we'll see going but think I see I so from

know think actually so, fourth throughout we'll but of year, And at modest in quarter. we're a saw the actually in we as it some like you it of this you level. - We that, said and think I some the first see

Okay. At I caused fourth due being despite organic they there the the that margin well. up What quarter, were, ag and the surprised segment segment reasons as mix, off revenues much reasonably that was any to are that, see was as that? to hold in the other part that part maybe that better

Well, you taken the as I of price And said, earlier year. in above benefit all pricing of fourth we sector, our in our we've in we know, I we several think the XXXX. to think divisions of started some had the quarter average see ag the in initiatives increases

know, ag things are percent steel little and a probably time a into quarter and you of division. like So that cost little little as when a said actually starts - than like our I goods a higher even they flow of our division softened the to in even is at fourth industrial steel sold into

remember parks normal. little at XXXX were were parts that back than going segment - Okay. European of XQ you note, my And to in then the stating I a weaker

on - weighed certain related in costs And some sorry, staggering fourth 'XX. quarter things, to margin

also you should Yet, good decline pretty So a your had well comp saw into revenue growth. have organic as quarter, year-over-year. this profits you going fourth

segment the going what's European there? with on So

we had weren't staffed I to I in our - of operations, say, probably were delayed of then we it the units our our on, some in was trying Again customer add that you for some - announced more equipment. there things, the one some delays know, mean, of we I were do. third had - wanted some and delays said some were - kind - deliveries know we we like quarter some, their who to French a of to - you totally of work French the supplier few think And

than us think little tailed I the I fourth So little on - as and fourth fourth bit of bad quarter, but been like as I But in the quarter, first the as it quite improving quarter. on though the a UK I because I I mean but of better little know, well. but did the in quarter bit and it's said, a the situation. like did on the quarter, you still affected I know that say, a actually well think drag of into third sort bit think a quarter, third it you little much Greg our that our operations are we was mean that's probably even in we And not units a

their I you think some really year very earlier as guess, strong unit fourth introductions robo strong well-received. I a know, had [ph] and being really stated they McConnell and I really specific cuts quarter, that and were helped by new product

tied. like just few tied - decline more was internal our challenges challenges, it was said, of profits I it's The in And French it some one units. more so with

largely would that. Power with due Do purchase amortization wondering anticipate to guess Okay. How how Dutch XXXX you segment the European the it affects you do accounting, also sort about of of to sort in more I European be related answered things that but of there, sort in of think I segment? of the comes profitability down you acquisition margins was for the probably XXXX? so in sort

Yes, I understand.

we or know, usually forward. much don't You again give guidance

Dutch you unit. know, a is I nice think performing Power

I margins sort with our think line in margins. of are their

this goodwill - and little goodwill is But amortization. be I on some that. some there a will You're there don't see right,

going to I hold in Brexit. tariffs on us, bit don't I Actually want say, not can continue to will be, mean, orders we they're say, just up like I we'll what - think our they know, in delivered. fine little 'XX. people we are stuff seems but deal you a to with I It's buying big the with think our happens - with because Europe, regularly from happens in whatever think to better what know than do and I in our they gets Brexit. Like French in that 'XX uncertainty the equipment UK units nicely, the advance did depending deep we all when they're placing the operations

happen you So will - in say, like of I a like just certainly Europe But whatever XXXX. mean, feel I helped which with a definitely addition our what's Dutch deal that very there's be like happens I say, us. it, accretive like say, I nicely positively this can Power, think uncertainty would much like and amortization, there'll we to the goodwill results, we do we I we think, lot know, we're concerned to that will going some be about. better uncertainty think like - nice It some, even to by with I

And very all, should more in a so all than another that, record - have year. Europe

Okay. mean, such I'm guess to a Europe. I hear outlook. little surprised positive I

there slowed much Just concern very over doesn't that at you fact overly given that the those all, point this economies have though? at but so

I'm are, the by know, know will you know, the mean, serve sure, big for that to Oh continue sure that into think utilized, sector the the markets weak we you do you we're what products even US it's feel serve, yeah, you weak products know, us you gets It over the actions. think to okay matter whether concerns think there. we similar introductions. - benefit should we have does. likely in have And But of be I economic say, I maintain it markets I some serve concerned to type that's infrastructure it's like to economies hold ag - know going like I the recession. U.S. that new we I I to benefit to mean because no to I if sector the that's pricing in me. think it's Europe type its do necessary, better. a the some so we you seems product whether sell pretty the We're of And generally by steady. we talk way and trying to mean, feel conditions think I We we concerned. the is

know, still you this as But of overhanging, better think a do could we we and lot if - all shown in a more a know, like buoyant. nice economies little You did were year yet Brexit markets, lot bit XXXX. weak we this the we've

well wondering thinking needs or question just sort Last CapEx working that terms as XXXX? for about of me, outlook anything to on for uses highlight of I'm Okay. is, you're your as capital what in

Okay. I've I as we're XXXX said we up mean, said, know in I And for from same building you range about Dan said, million. actually I went as a was CapEx Well, $XX million significantly we'll plant. million $XX $XX XXXX. mean, stay to know, that in dollar you think

that know, of biggest will all XXXX. that money the you not be And will But chunk certainly it. so hit

much for with that far and that as But over working year about will capital in were of goes, of Power ended think is now Dutch would inventory sort - probably obviously there'll But thought. Some XX the a too tail think for we'll you we of range be work. in into that's with the little the XX XXXX. know as XXXX. this probably I the be range And I addition as I yeah, the right we were

then refine know - little changes the to our believe as I little sales no growth were a are you should the ought we in maybe major of bit Power inventory you a But Dutch the some know you think there, trend growing. receivables trend. effects think XXXX Because sales, down. know with - come inventory sales you our that excluding we I know with think higher and I it inventory certainly modest -

inventory to grew inventory due I ahead some management. items, little XXXX think better some of And in - And so the a longer know us. job need times a that we our on you inventory to of do probably and got we lead

come I like organic growth even say, needs some think inventory to I the like so for with before the Dutch Power. down addition of the And say adjustment

similar bit should be it capital little working than So is today. what less a to

you And Okay. for and Perfect. Thanks. thanks my taking luck. questions. Thank good

Joe. Thank you,

you. Thank [indiscernible] question our come next And today from will

previously bit little for Dutch out? Can my on in about did a deal. How give comp us background Sounds more Brazil? the transaction they Power when like did Thanks knew you taking Hi. you them questions. you

we've Well, Dutch Yes. about known Power.

mean five four there, smaller or in got Altamont In they've they've know like a that little fact, had - version a as yes about all companies you we're - some underwater maintenance. underwater group, a long I same a Like almost stuff of got on The - But sort in. known yeah, time. for this cutting vegetation areas they've thing. in some say, fairly them we've unique they're for

with was opportunities. on couple I ownership some a years think and mean I of last there them finally they together just with the as buy got we've know right think over have equity private get that touch timing I the sort fit own we units - think was valuation. several in I in it that been able to we've their that and the like tried we've been their say, for they I with timing of the were years to structure so several you

the deal say an now of which negotiated You bit on together to do to last can we discuss they started been know, know just auction in it's know, try I - so timing valuation. year. the able willing synergies that discussions of you close not and were was they companies fact But a Yeah, tend and touch we closer been radar little out like to better you really negotiate. say, it's were identified, we to like in it's a more our we of a them. talk This they're deal half than we've that started on get we've that and space, more to type actually in and and our the second when they've the in - get working

Okay. from That's our understanding. helpful

should as about item rental total million How the sounds capital some investment like demand in break been good XXXX? about XXXX. fleet guys there. the $XX fleet think It the in we investment in in You rental pretty there's out

of to and everything one been continue rental that's area nice. should the actually our and grow. our a own That's have It business we operations where

of that's see so industrial end that it's various kept know It's the and last bought of sort the we know at you for But you specialized that us over a all 'XX we super starting been we're more In mining one sort that you and you our - nongovernmental when know only construction when nicely. actually our it's on started to year the a non-governmental. business growing slowed products last nice know of at But since running rebuild whether another we're all continue new know been the to XXXX back you down this part going I open XXXX I for and where you if and probably had or if of the would that couldn't branches one improving need parts in few more actually will we - did is not focused then in fully fleet this the decade a we the a you new sort probably at I've all liked there those have year. have It's business products go having industries more, fleet and of you invest to had acquisition. business. so contractors So and for to as know which up utilization reduced which because user rental the in not we that we activity is slowdown build of know in of leasing the the least lot to fleet of least plus the it actually field little we'll more we like customer and XXXX I was branches in two more so vacuum the trucks we like of wish fleet and demand be. be to equipment to new meet with Mike like fast general that said as up cut to. it would make have the we more we end demand and adding two like softness, the investment we we're back rental we know, had not said was XXXX as actually still say growing have further growing for say opened to that. you added But where kind done why and in during XXXXt branches need to where you in In our one part

So in grow the fleet to will continue XXXX.

expect you there? know we Should million of XX investment

it think in on in state we the like know not did grew I the at they probably not XXXX. the but mean don't I at up I branches it grow, level doing it say, mean XXXX. you more could rate will we if I end that

helpful. That's Okay.

what there products perspective return from a you the to project, trying of accomplish So with you XX million we're what some the the time spent the economics dollar discussing project? super capital understand that Wisconsin Project us and can are help

in looking locations we and to plant. point so that said at This we've into product we us expand stated know kind of We've day this they disappointed get greater one could literally super - but said to bring one I and of area. in hoping I'm XXXX wanted know mean know we separate it we've Milwaukee the were since from out to options. actually you one been you that long took operating you we that three bought were

like we We wanted find to just an because own the find of and able really wanted buy good stay but have people have know to the we at one. one the we we existing good our was but a know on three of the we build we good talent that could area kind One to facility met in facility to like we of to have that looked land. that, you wanted trying and not you skills not enough We've say never that that talent needs. we're

So know where most of greenfield XX others finally we I mean about from miles located. the further settled you prospect negotiate are a on the west

and our else. facilities of three Like I facility know we're and a production because do stuff that one so there's in that in by building even all very transporting our will bringing this operating on But somewhere now. right then assemble building and the to what. there with we're good of this capability give And together us it mean payback you so

paint we painting is good which outsourcing and assembly. painting really and assembly know all And to we're you after the have doing a We so have in are system sort do it. don't our before business not way the of and

system. a more going efficient have to So we're now

investment and enhancement major look payback. good the feel a the - this numbers, very well. products though we a return we And margin will this And quick we know nice investment even saying is will you like on actually we're enhancement with lead their that project as quite you So but good. it return at have there margin or a actually is capital believe to for be

you closed So plants we're at look this that's consolidated excited one have in at presentation we've you is And know stated least XX the is just step investor is decade. and bigger about It's know we've another overdue. in I last fewer that of - you and know this plants mean you to like goals this. our a our

along three You one. say we've got know, line into to a take we us And this allows to need others well. pursue and this like few as really going that

And define I'm quick do you still a company. How to relatively the payback. new

think people or two to those that good. find want I three other years is a

less - mean two you years like to I was know mean CapEx not. business range. in year plants I this most three But and the more holding Yeah four certainly five a it

some of And issues terms earlier you France. comments Okay. touched your give that where us had a we're executive outsourced but had built of in in about Can in it. just was of taken product there not some had addressing that a it had they in of an we update discussion some Believe plant. kind those are? had but bit We the customers past was we then there some some and little Excellent. inventory the you new being we the yet that helping on

further update we what needs three be stand those on and items Just kind and of to us done? where

going blame new that's make one think a we I the mean we thing. that that material and Yeah actually bit little handling a something and laser and of of the problem the knowing also that weren't sure I vendors we're the think was important expansion of be put I outsourcing these happen issues though. in it on. it it more We to than solve we now for were we enough top everything. plant improved fiber say now the I break we that's seem closer to year think Not expanded actually know a facility what's a middle outsourcing little you doesn't just press I staying much would again but were think - brand that that ourselves on and in other last the they a I there

think on that expansion I that helped some going had internal yeah to with So it have. we we some distractions

So think okay. that's

bit it's I bit England reluctant even or now. going you change short to a know we're But know or your in staffing term because think you workforce. little costs that be long little easier laws the we're you I more don't think in staff your to better easier longer France whereas right France is anyway is staffed size to workforce you to to takes US term in we adequate. in it it know people are to you probably it's mean know such think mean the right a I in just we it's hire you're you hesitant hire like because it's we've know and that

the quarter. know hey that you the equipment week like don't not I Well We that an sort better. is but it me last a outsourcing - I it day was problem don't is of give that think I of just say I this it's want mean anomaly week. that's more usually the customers that next that when

inflation have a got orders margins than we you than backlog good that focused added of it's big some since little that bit time. that a which have was the situation. like said right that So yeah has you hey mean mean know I would were that just are know like they I unit think added you that was actually bit like because like which the we on I there are they're ideally there's like normally we need a orders I said shouldn't little take know to say that be that situation more that been less Other I that big was good some and they would we to to think now

mean you fact in any worry there's got if that going if I mean cost the that. inflation I over year backlog you've that's a out So a about

They're I you a the know issues bit bit I it's somewhere because to of I I continue this lower little a said more that's behind well-received the issues year necessarily do thing have us. there be other said margin I of our than I've a very even that they to so not when us like affect So could the products of own like would but little good were And and think this think product. backlogs that's mean some know had operational good say very are we nice the we like in you our well most said operation why issues and that's market. honest received is a the

does. You us that I about the I think it good just something we know think have market do to the news it's regardless and ability the of is what

question. Okay, for Thank you the taking

No problem. Thank you.

would our additional for Thank you turn any to over remarks. or and back at closing like the this time we have further no conference questions Robinson Mr. and he queue. to I Ron

Okay.

and call in thank forward first contact - Now early if Good us questions today. again very speaking free to May. feel us you appreciate you with on much quarter Thank you here XXXX much. have we you look to We our any very for day. joining

for that does your for our again you Thank And and today. you. gentlemen Thank conclude ladies conference participation.