HEES - Earnings call transcript Q4 2018 | H&E Equipment Services, Inc.

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Operator

Good morning, and welcome to the H&E Equipment Services Fourth Quarter 2018 Earnings Conference Call. Today’s call is being recorded. At this time, I would like to turn the call over to Mr. Kevin Inda, Vice President of Investor Relations. Please go ahead, sir.

Kevin Inda

which welcome company’s Equipment quarter results ended XX, and to conference and Nicole, this December the earlier review for XXXX, you, to Services H&E call year morning. Thank released were the fourth The which posted format on presentation, www.he-equipment.com. is at for includes website slide call today’s a our to proceed Please X. slide and Directors; Leslie today Executive Officer Chief will call Executive Magee, the Barber, Financial John Engquist, Chairman President Brad and Secretary. of Conducting be the Chief Officer Board of and Please proceed X. to slide

financial non-GAAP earnings certain and to the refer our we’ll call, GAAP of our today’s these website. reconciled in appendix each to on release, measures measures are presentation During we’ve in available which to figures this and

the and may, could, cautionary containing This offer expressions Before we as forward-looking me expectations, words start, statements. Statements such anticipate expect, call note. constitute let about our securities forward-looking and federal laws. meaning statements beliefs statements similar and the of believe, contains within the

could Harbor unknown statement. not and Forward-looking results A statements. statements cautioned forward-looking turn XX-K includes John With urged these the in forward-looking risks annual that in and these publicly statement the materially revise known factors for now summary risk consider after any to forward-looking slide conference company’s or most are any the to place carefully call. update of on the involve company undertake company’s potential I’ll to in uncertainties, date Engquist. and are of over risks uncertainties call cause the Investors, those in listeners reports. differ including to actual does from not statements contained Safe which stated, evaluating this Form the forward-looking other other periodic statements and investors factors the undue The in such to reports reliance described and call, on contained recent the today’s in also presentation and

John Engquist

XXXX call. Thank you, Equipment Services’ morning quarter H&E everyone. Kevin, to fourth earnings good and Welcome

effective the leadership Chairman year, success instrumental Chief and X, the his President, forward January Brad assumed Executive been Directors. of over Officer and of announced I we last his and past of company’s Executive appointed Board Brad to look future contribution H&E’s the we of and to As years, XX November growth. in in has was role the

financial As appropriate will its company. Executive growth to Board, Chairman planning, the on full-time plans and ensure the H&E basis. oversee I the capital I maintain and acquisition support to of merger work of strategic to structure our lead have and health with a the continue we will Leslie and opportunities to

call me let now turn So to over the Brad.

Brad Barber

morning good and John you, Thank everyone.

Before I his share leadership my fourth comments to thank John his for quarter year and full want I friendship. for about the our XXXX, and

part more as than XX team Leslie. a For worked of and years, John both with I’ve

the then as the another, finishes, including X to Slide year. Leslie and will were non-residential Services. your take the as fourth please; you, serve financial end in construction our one from for market we we quarter for of after I the Our growth other broad-based When will user work a improvement quarter the rental focus country. ongoing support John. and continued continue please; quarter comments, our demand overall conditions, roles results, X and changing, comments our fourth with will will and and Leslie we on our this H&E growth Thank across and brief the review markets my few questions. Slide benefited morning Equipment close business and our strategy results results are a will strong, in business team of

to what comp in a the ago. equipment a new quarter, fourth also business believe we year distribution sales strong Our with be expectations over performed very well exceeding

XX.X% XX.X% XX.X% approximately from from grew to due versus to a sales a pretax margins to diluted in our tax a primarily ago. year benefit XX.X% In XX.X% recorded a revenues XX.X X.X% XXX.X (inaudible) $X.XX to XXX ago, an million expense quarter, of fourth per Net X.X a ago. was gross year income improved strong the business New million tax margin ago. revenue was the compared to from year up quarter or and Adjusted XX.X from income $X.XX to fourth We the ago. year XX.X increased a million ago, in XX.X% EBITDA XX.X% an were increase or fourth income and share of a million mix million, equipment million, increased income performance million year share, segments. XX.X quarter, per several total of diluted

result, project please; tax and effective rate of to X ago, improvement quarter. dollar levels; remains healthy rates the negative XX.X% in prior X.X difference utilization rate XXX.X% in XX% was Our a was we the continue activity will construction a as to year-over-year Slide primary more versus of increased great comparison the revenues prior XXX quarter, and a point utilization benefit, fourth to XX.X% non-residential physical compared rental the a fourth period details increased X% Leslie in fourth quarter the ago. and year tax year-over-year sequentially. the our achieve our income, in market million which on and driver effective XXXX, tax and tax year versus the was expense, XX.X% income provide in net

remain we improving quality our of revenues. on focused Lastly, the rental

Greenfields our we improve XXXX. please; continue expect The since as rates. with physical Texas, X locations, rental we while We-Rent-It various also in well opened and of branch XXXX, with Slide the gained the illustrates on that leading CEC in region, our slide the X. closed XX the acquisition acquisition as We total to eight footprint February in the industry Rental the this utilizations, in Inc. acquired locations existing our XX sites six which we’ve branches we beginning including

slide, growth growth to see make which details the a fleet comments being also market validated are pipeline into key Slide evaluated. markets’, of our I’d month this locations existing construction our markets improve opportunities the business. of market. in as The like can characteristics these acquisition is, the a our that in last from results believe opportunities by our in for is the XX the on a mix you are market expansion map, density year. The few we end-user on on this healthy. strategic is construction takeaway we new X end this the on generation opportunities of revenue As both the We strength believe acquisition for data with regarding solid advantage please; non-residential pursuing have focus basis our

next as trends positive on conditions. we highlight the serve the the well, and slide, strong I’ll The other end markets user in market remain

We that variety also is continues involved have mix construction in of We a a believe a diversified be to wide competitive types age well. for and projects. fleet advantage our customer as base that business of

to month youngest in for remain and age through to The Analytics markets, consecutive American for XX months, of in XX projecting threshold. is markets at indicators year-over-year outlook The to despite we XX for market Both building full with months spend industry believe in spending compared US Architectural XXXX rental construction reported XXXX, a positive. projects Institute prices. an fluctuation The X.X% months. have in Dodge in We have American grew in XX measured Billing XXXX. are is in solid year XX.X America XXXX. industry XXXX, XXXX. the grow Architects XXXX, of increases up X.X% X.X% Index Data center industry energy entered with residential that was The XXth solid XXXX. continued non-residential oil expansion North that in and the of in the months. also X.X% for of planning its Rental the consecutive next momentum have continues to Association also above Slide index from shown XXXX. indicate growth and spending serve construction in construction X.X% XXXX, indicate in the remained X.X% industry and fleets XX.X one average please; we the The forecasting public November revenue customer index

of revenues, oil is on our exposure related industry at remains demand energy projects X% total gas to strong. While low and

XX%. the time in quarter, and markets our During fourth was focus gas utilization oil

Permian branches are benefiting support general the our also increased As elevated in to a projects the energy activity. Ford construction result Eagle of in non-residential energy serve markets basins, these and increase from that activity related

is Another growth Mackenzie The wave projects Wood of four to occur, also along to since Coast energy several from large is billion energy with October. beginning injecting liquefied region into new in the our next industry projects the scale forecasting announced being Gulf research Gulf the industrial gas Coast in projects natural call years. several XXXX, accelerate of over last with expected the XX

our level is this the outlook customers our market remain very in and Lastly, user to their Overall, confident of positive the projects important pipelines. end demand about year. for me; regarding

the turn to over call financial results Leslie our in Now detail. for Leslie? I’ll more

Leslie Magee

you, I’ll end many from with and Brad. begin excited everyone to performed detail. well slide respects. such Good and business to morning, on in cover results were strong the financial XXXX results, We our more thank XX

the go just into at ahead I’ll the So this and move quarter of details time.

of largely which utilization time year revenues a compared to XX.X physical last million, of XXXX, Our OEC mentioned, year XX.X% prior fleet Conversely, driven year earthmoving with in to and our increased ago, XX.X% based the XX.X% or to the Physical utilization XX.X% comp. utilization by and strength compared increased AWP distribution significant decline was same utilization our XX.X% on And XXX rental revenues increased year physical quarter, XX.X% mostly ago. period XXX business. crane average expansion utilization for high, combined with the basis, challenging both compared to the a OEC on result Brad compared due both of lower year. The total ago million. in to of an to rental to a a as million the was fourth in the AWP in quarter, remained

product lift year. X% Our improved again utilization last in in rates sequentially, lines and lift With were truck. product quarter this except versus strong XX.X% rates, except all improved truck. all increasing rates year-over-year our XX% also Rates in increased returns X.X% lines dollar rental

and of New X.X our million respectively. up new higher million, equipment Sales XX.X AWP a of compared sales X.X% or XX.X% as $XX.X improvement higher XX% and were in result use equipment which ago. fleet equipment sales. a largely X.X% aerial compared million was to to from XX.X The to sales, sales crane or million rental year. net comprised sales driven Used this XX.X% primarily last equipment total by X.X used sales increased year XX% quarter, to million, to increased

XX.X% service At our margin; and combined million gross basis, million million XX.X I’ll XX.X in to mix up as compared year XX.X% and margin ago. XX.X% Our were from time, margins shift combined gross of consolidated increased and ago, X.X% segments result profit our in in and delivered primarily equipment a on to to in revenue sales. this rentals year-over-year ago, or year XXX.X profit with a a from to move parts improved higher new revenue revenues, million year XXX.X a a margins on rental to

and the rental costs expenses segment; XX%, maintenance and and during quarter diluted corporate in XX.X% for a of XX.X%, revenues, the to XX% million, due new fleet increased revenue on XX.X% of share XXXX For in lines. XX.X benefit to in XX.X% The increase as to a primarily year fourth Margins of were gross diluted or please; or year as the ago, rental result and of million mix to XX.X million a XX% XXXX, for quarter Parts tax reminder, a last equipment federal year XX per basis of other million $X.XX we XX.X% primarily tax and in gross assets income slide the quarter, rental year rental sales by our margin was compared $X.XX Proceed strong per XX.X%, for from net revenues. equipment rate deferred to product recorded ago XX.X to XX% a higher Slide XX.X% one-time as equipment share compared of enacted a income margin quarter gross to million XXXX, fourth to lower a year, margins XXXX. new pure quarter of to the of was or rental XXXX, XX.X largely increased the repair operations were and compared decrease revenues ago compared quarter, were margins XX.X% fourth in sales XX; compared margins the on quarter. Used the percentage the a to compared were with margins result fourth our quarter, due quarter and to due businesses. results to of of detailed higher only compared revenues ago. liabilities, tax sales margins in a rental income gross an and year of the a on net December combined ago. XX.X% in in of all the service of and XX.X revaluation fourth income income in

ago. Our in corporate of difference from versus year effective tax XX.X% million, the XXXX, increase this income previously an ago. year compared federal income operations quarter, in XX. increased of was that $XX.X reasons was in margin XX.X%. pre-tax on on income the the Please negative move to Margins million a income year a increase basis a primary ago to or quarter, from compared XXX a XX.X decrease XX.X% million discussion EBITDA rate XX%. the the slide fourth with mentioned to fourth XX. XX.X% rate tax an expanded the XXX.X to year quarter Adjusted XXX.X% XX.X% XX% Margins Note slide of a to X.X ago, was for million points to due from

larger Next million in prior the the slide SG&A fourth employee The year, completed percentage of million to compensation expenses expenses other fourth related and increased a to a to were CEC due to and compared X.X increase. for benefit were ago. our million, Labor quarter SG&A XX.X% of XXXX revenues the SG&A rent year and Inc. higher or million XXXX with Rental costs, quarter XX XX; a XX.X% in wages, a of higher compared X.X acquisitions X.X improved costs total workforce incentives, XXXX, related million the expenses million, of labor, profitability. as increase was and and largely in facility XX.X related XX.X XX.X% employee respectively. expenses

resulting amortization results the In to the of Rental million, expansions year fourth CEC XXXX for X.X expense, from the a recognition X.X Expenses of associated related of Inc. quarter purchase Greenfield with to compared million branch addition, assets our allocation. ago. and increased intangible increased price

and quarter XX.X Next capital including the quarter capital fourth were X.X inventory [$XX.X] XX; PP&E fleet expenditures quarter for growth for X.X on our the million. slide the million. CapEx net during was Gross rental million, transfers from fleet expenditures and was million net non-cash were

Our as of months. average was fleet December XX.X XX age

flow this GAAP and and we’ve presentation. XX.X this free [XX.X] compares million Our flow for of year cash end the to free was cash the a fourth quarter at ago, million, the reconciliations of included

or Xst, on Next which our credit. XXXX, size year from breakup ago. XX; revenues, rate net year-end, ABL to XXXX. year to maintain to was million. of a date XX.X X Gross Average quarter of in XXXX to million to end operations continues please; follow-through availability growth letters the million billion under from XXX.X to end-user We related at cost. revenues on review million X.X facility, it was the dollar December end balance which slide acquisitions very growth XXX.X XXXX. X.X reflects or the in of lower million revenues a sheet our and let XX please; demand XX.X% On of fourth to from growth the primarily XXXX. strategy. a our to includes XXX.X of or at fourth are solid slide million million XX.X% slide merger execution, ABL strong from merger quarter, structure, in XXXX at the capital of operational billion XX.X% XXX.X of is million outstanding our increased XX.X% February increase, believe comfortable million increased the a rental year-ago profit XX%, XX.X% OEC the utilization facility of ample of full Proceed by our extend and outstanding we compared XXX.X Income in balance XXXX (inaudible) markets, XX.X% included fleet billion, to or XXX.X amended ago. of XXX maturity with million amended February basis XXX.X to the and X.X we on from net to points. X.X [risk] interest was XX strategy. We million which with our liquidity based proceeds, Proceed in XXXX in increased stated and increased year compared period, to XX The or quickly our Total of our fee support XX.X% results, me had

net proceeds, the increased Excluding income operations XXXX from XX.X%.

from assets The Our EBITDA of share XX.X% per XXXX. effective income in XXX.X net compared or due XX.X income XXX.X from our million XXXX, XX% was $X.XX as income XX% compared compared tax or deferred diluted benefit in million re-measurement adjusted share, in to negative income EBITDA percentage net XX.X%, with resulting was tax in corporate $X.XX increased to a of Adjusted rate per I million in and for federal as the decrease the to recorded XX.X% XXXX. to We revenues of tax million XXXX, income and of a XXXX, to tax one-time diluted XXXX XX.X liabilities, was from rate XXXX. in previously in XX.X% mentioned. XX.X% million XXX.X

as Our free use acquisitions flow XX.X million free higher flow XXX XXXX, million a to year. compared XXXX, and of largely during the complete investment in of XXX.X of [free] to cash net was our approximately two million million XXX of result used in cash a

$X.XX I’ll Brad. We share total turn common dividend with dividends XXXX. time, also call at the per during back continued And quarter to paid our payment of this each

Brad Barber

on warm store focused slide same Leslie. to We our business, opportunity. and their XX; dedication. of to additional acquisitions, growth for hard want year I work Thank good our XXXX thank to start for employees all the Please and remain you, through proceed a was

quarterly X. XXth consecutive on we cash dividend our Lastly, December paid

please each review instructions. always to dividends approval Operator, and As quarter. Board provide subject future are

Operator

our with from take first We’ll Instructions] Neil question Buckingham [Operator Frohnapple Research.

Neil Frohnapple

you strength XXXX but sounds on could fleet it underlying your like for talk running invested the for and demand, have outlook about fleet significant low, ‘XX. utilization You in just larger a allocation in amount currently capital XXXX? significantly fleet year-over-year, positive time First, plans higher extremely obviously in a given in is age is you a

So the dynamic manage and in talk you’re about and at about CapEx you growth just XXXX whether plan thinking this how to moment? could how you

John Engquist

Our our fleet growth. current moderate view to is

a of the as our going focused to comments. our We’re well on prepared certainly to fleet; continue revenues in grow quality rental my we’re improving stated

point get We’ve of got the about level benefit and certainly would revenues. this going capital to that acquisitions well heck investment. these be investment from XXXX performing last the full we’re We’re within but growth to a you moderated of we see going year growing, at more year, a to and expect from are very give metrics some improved have the but commentary

Neil Frohnapple

Brad, higher your light comparison, then and more sales you could the new then in forward? sales granularity on the the the year-over-year crane sort difficult quarter, just outlook going And business extremely this provide drove for what especially equipment stronger-than-expected in of of

Brad Barber

years, in seize X to million, between were good large said for be are to late $X a million, from some and assets, few X can the cranes difficult and quarter, customer very availability deal. a which demand these we pinpoint, able able those of we product were As capitalize really (inaudible) quality million to assets,

as exceeded it it it’s internal consistent, expectations, sales been we it to a but in crane certainly getting QX. been, lumpy, can that So couple saying tell little our own you remains and pertains a more I of for we’ve has years

John Engquist

And in market in there probably has there some a I on fourth modest, and demand for has trough I that been long quarter. pent-up the think pretty recovery been crane has the and so capitalize think we been the

Neil Frohnapple

to follow-up was there? thoughts that just gross coming in new strength And I’ll pricing it just you. the equipment margin quarter, or mix drove the quick that, primarily some positive in what a the as pass through, was a And on. Thank any

Brad Barber

every team from focused margins revenues I is the revenue source, improving we the new always are certainly including our in focused We sales. improve can, it very has and to an on mix, our you would impact on quality of extent tell to that been but trying

Operator

our Research Thompson Group. to next from question we’ll And move Steven Ramsey on with

Brian Biros

Brian it’s the for that generally underperforming, strong actually is This there total or positive overall areas there company? perhaps across might Are the Steven. Biros not much US underperforming as fleet that US rates a the any pockets are are as or on see are any environment, but across just too

Brad Barber

we I’d spread. type, geographies, really. product No, And look and look not we tell equally revenue we source, at rental. within at look even pretty you, at It’s

Our performance and period-over-period spread, equally across our pretty is for improvement similar geographies product all pretty mix. utilization is

I’ll but as very of it and you revenues. competitors outlook pertains is being on as no positive to that we very population XXXX their well, our our to of I So, quality pertains of over quality concern and tell see focused equipment, of revenues to going results, our it our as be discipline the for the XXXX similar believe to growth rational meaning

Brian Biros

a little And some follow-up; cautious, the about just appreciated? a have seen something a even negative overall or was that they’re guys quick then or had outlook share would that maybe back positive I XXXX, that’s board, wondering half that’s XXXX trend heard, any across of pretty the regional or more topic be on color [contact] we’ve Not you XXXX. if cautious and

John Engquist

concern. been positive. that some issues resolved, kind some macro some With Look, think, we the trade for there that is get oil I a market very little is of give has people bit, environment out are we this calls said volatile. think Yeah, housing the hope issues John. that softened There there

So we’re to but I overall, positive think environment. those paying very think attention we a everybody’s things, in

Brad Barber

add I’d is for not for our decreasing. Coast the XXXX and increasing also actually Yes. that Gulf outlook

in best we probably possibly all country, So, I could be think but the footprint we in. cover the of the most country, not and of we’re

view XXXX. may remaining be hear things from geographies, throughout you is somewhere strong offset the But our could that an to also So else.

Operator

from we’ll take Capital with Seth RBC question our Markets. next Weber And

Unidentified Analyst

that sort that rate about or I think step the of Seth. for on back of does as wondering SG&A sales, we new is [Brendan] run should that levels, down. the it of is if This kind was the is XX% current

Leslie Magee

and year and some So that as contribute ran expect XXXX, full to at you SG&A into the contributes factors that of a And as as and certainly we just you percent the then we our rental our a that portion on also grow business, segments of more locations, do is growing start, to look company. (inaudible) revenues to primarily warm rental acquisitions business, XX.X% going revenues, of people takes that. looking XXXX, pressure be the run we percent it know, focus our other at to have slight when on that I of be whether that a if business, our new we’ll than and have it does our

So that to. I would that’s point factor the other

as a we XXXX am as see SG&A base that. slight that, XXXX, in will but a of in look to when So more some revenues percentage I will pressure I at speaking

Unidentified Analyst

from I seen if the was real if then the touch could off wondering bottom. picking rebuild quickly of And your you’ve of kind market, I just positive there, coming crane any up on outlook here. again. Obviously is activity

Brad Barber

have the we level We activity, range do not still repair rebuild or traditional we’ve rebuild, type so we have, products, minimal seeing damage of some seen some the considerable but we’re that nowhere in enjoyed continue structural to typical, historically. on yes, but still

Unidentified Analyst

quarter? your sales in one acquisitions was I And the the can, if one to from last contribution what

Leslie Magee

so sort We the thing. haven’t necessary, we’re consolidating really branches really operate transferring we for integrated separately public that and of do equipment all, just that fully because if those broken out they’re as

up would to tell number. you the you contributions not for the remove a solid. I still acquisitions, just pure really quarter, the double-digit, is were very, from the company it’s very So if

So will that’s that. I about give as much color on as

Operator

with move Stanley next on from Stifel. our question And we’ll Elliott to

Stanley Elliott

or be think to there where or an is leverage about my expansion a Greenfield that growth from the kind then comfort with changed, to we but of is next When And perspective would are just preference levels, (inaudible), that kind a of hasn’t for all feeling your into M&A of it great? year, get kind you plans the from perspective?

Brad Barber

our your part first; we last not of question the on answer changed far me as our to comfort. perspective nor Let is expect change, as leverage it do

acquisition, As we’re what we it Greenfield don’t to strategy. do existing versus opportunistic. as territories locations, existing a a opposed we have have at enter we H&E We starts, does typically presence, are more or more warm recognition, pulse If to more are on hand. really refer how a we people are Greenfields the view look where where likely it’s is we we we to first warm referred acquisitions market, pertains not customer new some employees, base, warm start or, look to name have existing to when frequently through some have our the finger at some customers, we now

we So, an looking we’re to a likely but both. through we’re expansion. not a and to enter the looking map, We by do new to growth but acquisition, markets can market fill you at that’s going new through how tell of enter we’re the in happy well, geography we’re would to as at certainly, balance our existing Greenfields, continue with as acquisitions

John Engquist

do to not would move of year that, I And material leverage one any can add a comment and tuck-in in way. these acquisitions, smaller two we we acquisitions to three type our think

Stanley Elliott

payback I been on and those the has agree impressive. pretty

coming of projects, mentioned that, in projects larger thoughts get sense that anticipation million I X that and of in On Gulf on a X so you crane the of guess expanding sorts had XXXX? you those the mentioned any some to that do and around these sales, people the some kind are be their Coast of larger seem to million you X fleets, of size, some of million,

Brad Barber

heated and again we on now million, better for there. starts product Stanley, that generally it’s more about increased rough on seeing had activity to very market all-terrain the up of None mix point of it’s in of a spotty, seeing it’s Crawler anticipation around are the of of some moves out spoke our product Gulf of product, not XXXX. cranes price really still for really of activity cranes, the as XXXX works the late Coast projects speaking rental still you products the a referred and are but issue. The we’re on in quoting RT and been of and about up a terrain spotty, the from fleet heck some the some just And additional in at on new lot fleet (inaudible) sales these RT yet, products. the $X side,

limited, not surprised it’s move but us kind That’s are that’s selling one new we’ve some point. to the So of faster. this products, area, forward we seen

Stanley Elliott

kind hear infrastructure that percent sort it’s the But on all out Washington, year. further handicapped. mentioned And great? in of to you are some thoughts that last the of any I’m hard same coming later from be hearing positive of about confidence you have me thinking bill, you that potential we’re starting of do or the had slide, and any more commentary sort would assuming and

Brad Barber

be to for you, sector, like it development. on would an very the to obviously entire it’s Washington us. be would handicap I’m infrastructure a positive But how handicap, hard you going beyond bill is huge the know rental in chaos

John Engquist

very that base. to regions, our add thing one their they’re in and employees is, getting talk from the field. the Their I bullish are is our customer Look we would view this

the as and of thing hearing directions; the we So, well the we’re same some reported here it end-user material. absolutely are both from in as

Operator

We to Erika will with UBS. move Instructions] [Operator Jackson on

Erika Jackson

more know and them digging I a improving discipline. focused just quality the revenue with said XXXX. expectations had question on growing I of rental them, your into you’re for you

year? expecting takes rental I know dollar within be about those of three like rates and but time of year-over-year all and kind utilization kind are puts up comps the So, the you are hard, and metrics just utilization, to of next and thinking

Brad Barber

that Rental running I ahead, with it conditions continue achieved ‘XX continue do of rates, in of the weather think us going XXXX up. Right trend. will to we got utilization be have that kind current we over inch year-over-year. improve we Probably expect incrementally that’s short Utilization, can ‘XX. positive, be we’re started And and all similar year recover. term likely utilization, will performance. we we think to our believe remain scenario, three physical to year-over-year in now fiscal out, we a flattish I what could

XXXX. for to a chance have three all continue think, improve do I yes, reasonable to So

Erika Jackson

then just question industry are of broader from other And guys traditional affected players are seen that one that that of rental acquiring kind increased from have are Has competition rental consolidation, have more, making and similarly, the any at players the impact players? acquisition. then maybe on landscape on companies, all, you kind industry any seen you your maybe you a new industry, competitive consolidation

Brad Barber

opportunity Not cast to some really, it’s of with seem competition opportunity is employees customers. going similar We to No. There same suspect find of quality and new ours with from be more operating a the size and of the larger More are is same. acquired. select good players? believe the companies’ always news there, the our all the and and revenues. out improving We is, we’re on will in I disciplined collectively players focused of we get I everyone way very

Operator

from And of we’ll take question Michael a America. Bank Feniger with

Michael Feniger

I this XXXX? view aggressive raw CapEx? pricing on the XXXX We’re and strong suppliers seeing you’re cost you a your fleet higher on Is some seeing getting at from of pricing, your in complain inflation, backdrop, really in equipment suppliers you about guys heavily with and on know invested higher materials, is rental should the in benefit. that changing the all supplier base seeing what are

Brad Barber

It’s not.

X% to an from probably but a seeing are have increase as no heavier than got sources. to few alternative been certainly average. who X% suppliers a little We’re that, There we’ve

no, a healthy need get view anything in we deter price of but and get need business that’s that our unreasonable for ours, they increases some not would way. growing asking from to they’re to So, our

very So price mild very, you know increase.

Michael Feniger

just That’s used really categories? that across market, last values seeing are months few over helpful, has lastly, with your the equipment equipment changed the anything abnormal and you anything just in

Brad Barber

values of equipment is very healthy. used our seasonally been but remain adjusted, kind No. Everything

Operator

Company. next And Mastoris from Bill Baird we’ll with & our question take

Bill Mastoris

substantially like I’d tuck-in acquisitions go back is the to comments, leverage, articulated you which you move your the and to are sheet? annually stretch talked X some you right to far that significantly without change could needle little when earlier did still in about balance willing bit as I to impacting find the assume your you maybe three, two range X to of John, But a the earlier. how business, acquisition, if the

John Engquist

comfortable a We leverage would four in transformational with be times acquisition.

Bill Mastoris

have crane comments sales as though the to since beat a just which maybe signs those might see death, accurate or year, slowed an just I there appears the it little hate portrayal a side, this to given up of Is sub-segments picking be on your then you that crane bit. the end the And down little of bit?

Brad Barber

fair compared be will sales normally year QX Well that this give ‘XX. is you in I call of in larger tell don’t up, continues, now, crane short-term would response sales to our that improving the on spotty it’s hard quarters month get very view we’ve it slow future, do going and we’re a time I said certainly continue, question, will tell our the the you just you, I this one offer Quoting crawler to what won’t but for to not We volume under product. probably to in your I can as pick at have if slowdown we you that’s or to activity that many, month our nor in QX feeling has got don’t particularly down, point. we’ve the as that it’s been don’t going to is business, whole of belt, it’s we many of crane but that so quarters, want in but necessarily one visibility pickup. kind to the similar as but the think

Operator

Weber Capital And with RBC our Seth from we’ll question final take Markets.

Seth Weber

Seth It’s here.

regs lot guess about back into a the show I factoring of talk getting if if if to front your can the like higher rate, get equipment trying the in are anti-regulations on of that’s was last on Just a wondering going week, this ANSI actually equipment. you CapEx you week, all you rental or earlier there’s out certified ANSI I of forward? or at charge decisions feel

Brad Barber

shorter answer past from like the on final period it bleeds going X So, but Tier the forward. regulation, certain that there been X where Are interim, orders determinations and with and the like it’s Seth, is all that others we not is the federal the regulation we were certified, customers in answer X obviously opportunistic and kind will make of We’ve change on is, horizon. Tier already everything a products increases those the in some absolutely to final – quickly, Tier because a charges, steel some a time. pulled changes before difference of through our adds that over of get substantial

capital to can as We’re on not do you in or are into is, allowing forced pricing I go return to But and anyway. up. plan in a dollar our utilization invested our what our business, we up, we eat that tell push costs our on margins

Operator

closing Barber at the turn And I are time back queue. any over to no there Brad this will remarks. in further questions for the call

Brad Barber

Sure. year We’d of fourth more to for everyone our to taking like you providing at look time we on solid you. and full Thank quarter get call, to QX. forward the results and end thank

Operator

Once you. ladies does conclude conference. gentlemen, today’s Thank again, and appreciate We your participation. that

disconnect. You now may

H&E Equipment Services (HEES) 22 Feb 192018 Q4 Earnings call transcript