HEES - Earnings call transcript Q1 2021 | H&E Equipment Services, Inc.

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Operator

Good morning, and welcome to H&E Equipment Services First Quarter 2021 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.

Kevin Inda

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

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

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

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

Bradley Barber

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

Engquist, the begin I John our Chief Chairman; Kevin Executive I'll Vice Relations. discuss X. today Officer; and Slide call our the are Inda, will Financial our on Leslie quarter Investor On me with first financial more briefly Magee, of business and our President our your the our and provide quarter results review growth performance please. an After, on for Leslie questions. strategy. trends we will will in highlights, update X, detail. Slide take rental in

closed We are utilization. first levels. it the returned the Demand and as continued for maybe our storm markets our the XX% increasingly storm becoming winter Despite Slide lower-than-expected hit in the our performance from and storm results progresses. an rental significant year areas. year-ago business. the were please. $X.X we the further and some are first down making a or from the hardest of approximately our February the cleared, quarter momentum extended forward financial with our Even million in end-user had from towards optimistic improvement the that The our of pleased this to particularly X, business operational as near pre-pandemic in in to the branches quarter a an unexpected rental continued week. of revenues and with improve headwind historic disruption, during severity cycle X.X%, was throughout after strides Total in quarter, were we impact for weather impact the are nearly

quarter, utilization physical cadence our during of the some improving look let our the at trends in during period. the customer momentum demand provide frame rental on Now To business. me color additional the

XXXX full the surpassed month. before up of impact From to a the XX.X% increased utilization down the we which physical in later XXX levels, points that From February, utilization basis basis and end fourth eventually utilization of basis basis in despite the for another first of COVID we February realized be call, quarter, January, winter our of was Thus, net XX rose landed expect the just Also, another year-ago. the which As March, seasonality. was of early started of utilization in was just during of we impact I quarter utilization from first within our this rental Currently, very time significantly we the to utilization year business. XXX said end good points a XXXX end the of under the XXX on year typical and our basis the the running X,XXX end period basis slightly is points XX% XXX storms. to challenging December higher quarter points. to due the nearly the XXXX, points. gained than which January a to of ahead March, from the end end points we the of From for year-ago, same

pleased are X% We rental X.X% down the year-ago X.X% versus declines sequentially, rates fourth and improvement are also our and and in quarter. that stabilizing of X.X% from

increases. progress we to show seasonal positive As into we the rates stronger sequential quarters, see rental expect

positive industry also in January the in highest since level XX.X The and February, certainly February Momentum key from encouraged correlates sentiment we to The into nearly Index revised XXX.X, recent are the the X.X% the in of months. the years. indicators. three ABI which in continues rose from shown year. March have recent point Backlog The XX.X customers, rebound also the Customer of increasingly to XXX by solid grow several We Index highest July move reaching Indicator as XXXX. reading with This Dodge increased to ABC ABC Confidence our improvement data

be passes in is With H&E. fleet bill we a project. we range would federal an good of consisting or Any million rental the products, a infrastructure table dirt proposal likely we $X.X time, will As potential to billion over of our of total to the and earthmoving benefit benefit see are meaningful and a how know, comprising from position $XXX unfolds. a on that wide XX% infrastructure-related bill

projects Energy-related earlier provide back coming The and billion projects construction than is about Texas XX.X% are much waiting well. new there restrictions in announced observations XXXX, COVID-XX quickly let bill. work our fiscal lifted some infrastructure other not me is many year Texas specifically with new up abundant. recently Gulf an DOT in Texas. business year-over-year. the on Furthermore, fully which almost Let Coast, is is doing it would state and associated $XX

very these ensure and are Coast. bullish Additionally, business again. never to massive the states Overall, spending well as positive mass We other Texas our power these demand havoc as industry failures Texas, issues projects wreak on outages, joining on continue storms winter to in major a along system about result with Correcting the problems. other could will and indicators be significant remain and failures conditions effort. It water in opportunities is solid, infrastructure occur Gulf improve.

a is and we has all range like in capitalize high improving in growing market growth the conditions. X, the segment have tools and Our position and to strong please. on We construction these exposure an to geographies. markets. our of verticals wide non-residential other expansive Slide healthy H&E footprint end

me an Let update strategy. by conclude providing growth on our

to growth branches Carolina. In that presence branches in terms track With opening our of on the goal have Lodi, in plans, organic is XX Concord, in expansion quarter Lodi, North to this first California new starts We of in our expect we team expand believe and opened eight accomplish our this and state. XX two further our California we year. to

Thus the branches branch in Georgia. Charlotte quarter, in Our in in Longview, number including of new to Tennessee; Murfreesboro, H&E we eight. state branch our and North Marietta, another brings compliment opened Macon, Georgia; far have the Concord, existing Knoxville, Carolina five the second Tennessee; branches, will Texas; and

new Central from XX clearly provide in with past location the state We city Dallas, gives is growing Georgia in our existing locations able a and in will our the now third second positions convenience our Atlanta, Texas. us miles from just business have XX Louisiana in allows to growth market. customers With Knoxville to Our Tennessee. and a we Shreveport, years be new us of are to near and seven cities our upon in component activity five. in municipalities. the our branch the between to capture and locations Longview, increases new With areas business and fastest between support our adequately positions open customer Macon executing XX nearby us Texas greater Murfreesboro serve Nashville growing Marietta customers facility existing year-to-date, we location current fifth Atlanta, to the and in strategy. third largest this Savannah and Opelika. of facilities state one the total branch branches

detail. and strong segments turn scale specialty Leslie? our sheet opportunities Lastly, for and rental will quarter to will our remains in expand and explore more this, I existing compliment first capital geographic discuss product to in further deploy acquisitions and the financial Leslie offering. business we over our general With now the results call balance our that to are continuing to

Leslie Magee

and Good morning, Brad. everyone, you, thank

more with results. proceed of our for financial Let's details Slide XX

quarter charge in first goodwill As due related included a of year's reminder, an to to impairment goodwill connection COVID-XX with results our impact test interim to a the business events non-cash certain $XX triggering the from the pandemic. identified prior million impairment

storm. utilization XXXX fleet only were Rental prior points only to XXX especially the compared to or a million this business rates decreased impact declined in $XXX.X year-ago. from Now the X.X% were pleased revenues to total a the to quarter year-ago. the our period our let only same down million from sequentially. to decreased year. first quarter million a results. down the year-over-year, We year basis on me Even year-ago, points $X.X period. to move the were that to or $XXX.X to million dollar rates compared X.X% decreased the to XX XX.X% to COVID-XX, prior size X.X% of was XX% revenues $XXX.X business by XX.X% compared compared winter $XX.X comparable Consequently, given from our with Rental returns quarter million our year our The last though however, basis time decreased current million impact comparable $XXX significant before period X% or

million Sales improvement million increased $XX.X million and sales XX.X% fleet XX.X% equipment year. $X.X increase was of the Used of total equipment except the sales comprised increased or equipment result of $XX.X used primarily sales. million all XX% New $XX.X our to result last new was period. or in rental primarily in categories, both to sales sales The compared product crane higher $XX.X million XX.X% comparable in to crane. from

million and $XX.X a generated revenue XX.X% service year-ago. is a down from basis, in parts on which segments Our combined

and because profit million $XX on margins. gross margins a used of discussion a XX.X% were Gross Moving equipment a profit revenue year-ago, decreased lower to with margins to from XX.X% to XX.X% year-ago. rentals compared combined and of Consolidated gross mix. sales on primarily

XXXX to margins only year-ago. due on XX.X% which XX% gross equipment gross quarter margins XX leap additional we an estimate included were XX.X% during operations quarter to basis pure from Also, X.X% billing the detail a operations compared of XXXX, from gross year-ago. basis service year-ago year-ago primarily a combined and to equipment by Income to decreased was margin. to the compared the in of with of $XX.X parts And XXXX result million time decline margin around and the million approximately pressure fleet equipment XXXX margins comparable on a in sales. on as and margins for other day loss of on quarter XX.X% XX.X% to in period gross sales compared XX.X% the on period. due was first the to accounted compared rental of XX.X% XX, quarter Slide used sales except for were $XX utilization. all margins. gross higher a rates sales for prior Included XX.X% a other Margins a from exception charge. segment, operations revenues, year as XX.X% the in For is gross were rental categories, XX.X% of million February our to $XX.X prior margins loss year year, non-cash Margins XX, increased first last were points quarter to new from crane impairment the first first which of goodwill all the compared lower Used of new please. in or product year lines new during a

million. $XX income year-ago. declines income a The operations prior to of quarter million Slide Net year $X.X from operations operations first was result a from XX.X% offsetting in of million and revenue XXXX decline first the lower quarter per X.X% million a and revenues, of was quarter income in margins in $X.X XXXX. property rate $X.X diluted and declines an share $X.XX first first income from the of primarily Excluding of XX.X% compared on a loss or revenues the share of gain $X.XX was XX.X% SG&A tax of was adjusted on The cost loss lower XXXX or of million. of in mix, impairment charge, or of or XXXX. Proceed XX. effective net of gross $XX.X in in sales equipment per compared and in income were to the basis X.X% margins Partially these lower to quarter the

Excluding adjusted $XX.X XX. in first per the tax Adjusted was was result XX.X% basis, a points EBITDA EBITDA a decrease compared quarter the Adjusted income million was XX.X%. to year-ago, margins XXXX. prior income million XX.X% as an compared year's or of of quarter year-ago, impairment quarter down this largely were rate to mix. revenue $XX.X XXX to million in quarter in charge, first of the a $XX.X basis diluted move Slide to net share On of effective the XXXX. first the Please $X.XX a

by In and addition, equipment. gain sales of with combined gross lower were lower impacted adjusted margins negatively property EBITDA on margins

As to margin. the $X.X million or offsetting aforementioned EBITDA partially adjusted declined expenses X.X% mentioned, SG&A declines

$X.X in XX.X% related lower Next, primarily million, million. expenses expenses costs, first cost reductions of first the COVID-XX’s were first employee of to and impact and in SG&A compared million quarter X.X%, to a subsequent compensation debt decreases million other expense Bad and liability a our employee-related Slide as implemented costs decreased response XX.X% workers to $X.X a business. XXXX, quarter $X.X of XX. million. expenses of the of $X.X year-ago. and to insurance decreased XXXX Legal commissions salaries, benefits, expense decrease. was quarter the to insurance or start for increase $X.X warm pay expenses decreased $X total of in reductions, our result total openings $X.X other and accrued attributable XXXX year-ago. $XX fees SG&A wages, compared and offsetting contingencies. year, taxes Employee a Approximately were compared percentage these litigation professional in decreases million and a combined the $XX.X revenues in loss Partially payroll was million incentive in headcount SG&A a health million to prior with with increase million decreased as employee

our XX. this flow from ending and Slide period CapEx CapEx million, XX, will first for fleet on gross CapEx, the you On slide, cash quarter XX-month fleet find And Next, inventory. in including was March $XX.X XXXX. transfers the non-cash

and for was was quarter Gross $XX.X fleet PP&E million. for the net rental CapEx $X.X first was net Our quarter first million. CapEx the $X.X million

million XX, Our of average flow was XXXX for cash March to fleet age quarter cash a of months. a as flow XX.X $XX.X first Free of year-ago. the compared XXXX was million free $XX.X

of Proceed reflecting XX.X% Next, on million of our or $X.X year-ago. utilization decrease fleet please. size the X.X% billion Slide utilization and Average OAC the XX. dollar based year-ago, XX% $XXX on Slide was was XX, a and rental At quarter, to a lower end the time rates. compared first from to

borrowings we We $X.X with of hand operate end to had at net credit. continue end, million liquidity quarter, more quarter outstanding the on We had no letters ABL of first facility of and availability the at than near-term million no million our ample cash under quarter end. $XXX.X $XXX maturities. of of and cash At of amended

have is availability of Our paid million per approval, net common billion, share no we low our And Board are at our continue in at $XXX.X the regular used charge subject first $X.XXX the quarter, to availability which to Also, the leverage to nearly again stock dividends if always We end while With excess remains concerns. applicable. first our X.Xx. dividend. dividend intent pay quarter. it of of is is to the excess covenant determining $X the our springing was fixed measurement covenant

into session. get the questions. Q&A instructions now please Operator, provide for Let's

Operator

now We The Ramsey Thompson comes begin session. from go question question-and-answer Instructions] Please ahead. Group. [Operator will Steven first the of Research

Steven Ramsey

size to the Good year? CapEx of and be CapEx level maybe you you maybe down morning. slowing prefer you constraints would higher, to you how to the prefer coming the but obviously, I improving what do from Would for Maybe Hey. the your front? start about down fleet mean, even in, on rest the with, manufacturers outlook at do think X%, seasonality CapEx

Bradley Barber

answer speaking, Yes. that CapEx year. had Leslie had Good to to we've able as Steve. we increase. to There very a most the But orders We've I Price are our would full-year, a seven no the little really we're Q. faster. the with in and forward. very, opened now That's anything in bit challenge. to price got be little early. pull headwind an opportunity pull in meet minimal in protected been generally But mentioned. these pleased expectations. the of morning, products, for different think we start there The is, have some forward a If We products. have isolator our for been cases, would we forward We SG&A a related costs zero We've pulling Greenfield/warm of concerns. little very

So that got we're fill expectations. we've plan our to the satisfied

Steven Ramsey

thinking that of weather up? Is And Are on the winter do how caught hits kind from expect then work Great. catch-up? fleet maybe about seeing weather winter QX. you the any higher Or impact, rent there? partly QX in it already Okay. you catch-up

Bradley Barber

part The two shutdown utilization, disruption, placed is you're of having on the our and extended on XX% then referring impact some certainly specific one it. our that had pause That of our we it of business. a in to impacts the pause week better locations

that we resumed, close So that recently – to XX% part up to question, back your utilization. to we've – run to

adequate service replace demand or just satisfied and shape. side. had that. QX, continuing our The can't in service it resume man that good not in on-rent specific in but we're parts not got really lose in on on pent-up you to was But trend our business. parts area and demand. us to it When So the of service but impact our and resumed rental has had side an with the a to improve we they're on It's we're and more of hours, business, We've impact parts lost. those side, on QX

back is to we utilization that Our trend expectations, expect and trending continue. XX%, approaching to our

Steven Ramsey

Okay. Great. last one And me. for quick one

from outlook, you force you is sales or and optimistic about discussed And and you the feedback what the talked field, what seeing hearing macros your less the clearly customer you're from of some clarify than that? hearing data. can had macro if from you're customers share the in improving and Your sales maybe what some more or in you're force

Bradley Barber

It's if total my we sales did say, talking no, more coming fleet buy optimistic, to clearly, group of and you a have the were much plan. would They the need a more. real of view them, we adequate extent they ask had people to to

improvements we're to grow opportunities, higher we the these balance And to see remainder right make going we optimism field, that trying much of year. the in expect against so as the we're where that continue fleet, also the for to but is to

Steven Ramsey

Excellent. Thank you.

Bradley Barber

you. Thank

Operator

The Stifel. next from is go question ahead. Stanley Please of Elliott

Stanley Elliott

for Hey. sure You're XX%, rent? look trying question. that like Good seemed thinking make off, about those Starting how maybe if sort you kind X% taking of that the morning, a impact, kind through of Thank thinking the just off come just of headwind. to we’re you But weather correctly? curious do about the items at all everyone. flow that it

Bradley Barber

Yes.

going you of lose all get do momentum them you off don't your forward. What is certainly Some come rent.

step our to utilization continued out, pointed we As January. week every up has in

in was to question, of well every rents. in quarter that When that prepared we my do fourth the it get call call, think about in covered you some second we as physical the continuing January cadence February, talked comments. January. on was over improving I your in And I end But just off answer improved sequentially week week our had utilization.

so and and and before just certainly news a couple Good back you that in don't, kind running place that storm we're off certainly your as lose that resumed geography and You is momentum tread and were as all weeks of in that stand hurts. or you hits. of we since optimistic for water broader

Stanley Elliott

whether like increase things backlogs, the supply equipment have OEMs months lot of do penetration or chain channel this next new disruptions, the and the XX even actually cycle facing you purchases? some that, could With guys a relative rental over a are to view

Bradley Barber

the – for occur. it's time. to likely rental is is to continue think I penetration My that rental been believe to the the in that direction some likely the trending and going longer-term trend in frankly I quite short-term, is view in

Stanley Elliott

the we especially the then, more way year SG&A, with, there and be lastly, of kind think of new what Is the locations the And of terms about of two moving with of lots in that balance slowdown like cadence parts then or the the to opening? should to add. some look any

Bradley Barber

that detail, time. mean, opened short to Leslie give but to got the… right. we've period I this it, want color little a let in you seven more slowdown, give of I'll you do had nailed Yes. we've Leslie, some we these a pretty locations on

Leslie Magee

Sure.

I largely really really to last to start on revenue. So is have. because related cadence as expected the QX we for warm highest we stated unchanged our strategy just we percent compared And and the the that, the of that of to always XXXX. is at XX.X% that's full-year that revenue call, view revenues seasonality. of that due to that percent And XXXX of percent of a And a imply as ended the pressure

begin gave. that down that to to So I down year should settle that progresses overall the as guidance

Stanley Elliott

Best Perfect. Thank of you, guys. luck.

Bradley Barber

you. Thank

Operator

next is The of of America. Please go Bank from question Gilardi ahead. Ross

Ross Gilardi

morning, Good guys.

Bradley Barber

Ross. morning, Good

Ross Gilardi

and the Hey, of that timing about Brad. little Texas more Can helpful. you spend [indiscernible] that there of it as Any should will color where projects? spent infrastructure talk and be a when get types to bit

Bradley Barber

and year to the comments earlier as year me. referring in of the primarily. do was in in largely later let front DOT throughout schedule was roads prepared What and in projects But generally, to specifically spending, have so not they're year. I Those opposed will the bridges, this I let

But little be to letting going I projected And up what's would bit I a about XX% to would see assurance the to is, I research on year-over-year. nice trend. their tell that's need is give to So think more that. typical you you firm

Ross Gilardi

any that really order you and that as seeing And then you share companies? and fleet didn't Interesting. are Okay. obtain early independent the to smaller yourselves national to rental market maybe as struggling signs losing chains did rental are

Bradley Barber

they're I if not believe. their I certainty, can orders did tell product not they to have going What you get what is is in,

have to a on horizon, not most a of So to did rental lot order insights they But order going in in I small competitors. me they're get think very they view that have time, in to so this And they don't early. blocked point would the… short a out if generally, that probably short imply not ordered at I

Ross Gilardi

Got it.

more Okay. organic to something and urgency how And of forward? investment areas you just address is by it gradually specialty you you and H&E? mean, or of lastly, are just had about more kind are build Or up? then will thinking feeling either wish you at going to it most are what I M&A compelling of specialty

Bradley Barber

Yes. Good question.

and are us needle they come could our Anything we've that products. consider, be and would slow as existing open know to earthmoving XX%, a going trend you move we What here. talked that plays it's for safety know, the with process others XX% acquisition we think those faster certainly opportunity of about as be would an I investigating along. well our space to

serious, be H&E, period customer here become of the of business. time, I existing more allow just it'll business be are optimistic. as growth, importantly, penetrate tell other of synergistic acquisitions of customers, done, and more relatively for disciplined focused larger We're we'll at something bring crazy, So of but small a – at same not do some things the going every time, organic our anything we're to our we're and still we're and the Over given you them the especially, that look us we would to a piece us looking, part urgency is we're right a but piece deeper. enough and we're in to sense years going getting our and would base same to

Ross Gilardi

a on quick just – follow-up. just Well, that

low assets that. like, mean, high curious these it to to most you double-digit of acquire. dilution mean, would you about to single-digit, like margins. I a build anything willing all businesses tolerate EBITDA crazy, if seem or terms it's not? how for I actually be some competition seems lot a when upfront as asked In footprint hard you guys I define you for urgency, could of know. There's just Just these to we start of a go are to you respond – to

Bradley Barber

It's I hypothetical business. opposed to bring That It's to opportunities going said, would be able could as in a of type growth we you. considered rental forward we across our a gave that being example into certainty. spread and on footprint business a to not extent allow possible. maybe not to too leverage it we a have We experience we're high one our us of day evasive. And to – it in we otherwise to can far don't have general just bring mean of pay unless grow us What would opportunity to price time I that itself. the lean tag that being the have degree that in off evaluate and pay possible may to what over that or period

Ross Gilardi

enough. you. Thank Okay. Fair

Bradley Barber

Thank you. Ross.

Operator

UBS. The next is Fisher go question from Steven Please ahead. of

Steven Fisher

Thanks. Good morning, guys.

Bradley Barber

Good morning.

Steven Fisher

I flat up? I were that is it was or actually What trying maybe stabilization, or to left off the still rate just exit – down rates. that quarter? wanted start about year-over-year decline. talked know you X% frame you the you the as was the to Is on which on

Bradley Barber

we’re quarter sequentially, measurement. over two-tenths last down in Well, our

to of the looking have that's I So probably that that information you're for. what guides only I kind directionally could you give

Steven Fisher

to Okay. point? on kind the see we'll that start at I'm rates anticipating I quarter if a second you're in guess year-over-year just up curious basis of those some

Bradley Barber

Yes.

quarters. you well. Let future. other had as I'd me going near down over is our about rates show have be to of our It that We sequential. it cadence for those And anticipation improvement try quarterly speak on is start will a to questions, anticipation, the stepped answer a my rate number if to happy sequential

And we QX, to year-over-year points that down over excuse two-tenths different cadence demand comments times. think but to four-tenths I certainly we were don't we to in how will with it think momentum is percent, question rates. the previous intersect in QX, to the a And back of move starting How current just will a that to, in XX we're get rental of environment? the QX to question that coming us QX and at out or business. long over start take does I eclipse takes within a a supply real get that QX prepared down believe now Again, me, tough it I'm our percent that answer is, basis us of these long do making positive rates, to previous I'm direction. in seasonally

current rate position the little guide going you me supply back a And better going be sequential to that seen be and to discipline on competitors optimistic the and quarter we're much but I've very able discipline in and Give environment so, news year-over-year. and is, demand I'll from the see we're quicker, our that marketplace we're improvement. moving demand into the good supply, driven. or to a we the push are can exists H&E, those With in rates where

Steven Fisher

have this of the optimism it just and point would have would typically helpful. out That's you it. before at compares characterize I'm visibility to field. that the how you how little at I talked time about bit the year? half for you visibility second the of you some a Got guess, the this And in curious

Bradley Barber

Code. the customers conducting Engquist, otherwise. more John small, medium, Chief meetings, customer Well, specifically talking and there the are sales We're a this. large, size, we President things. our our with And and has iConnect – our Operating regional that few of Officer conversations diversification really go within and the sales We then been SIC by what meetings anecdotal to or data support along there's CRMX. force, course, of use lot call,

It's So that's anecdotal. all more positive. probably

out, on familiar, our times. many utilization as I statistic. it’s earthmoving Something – earthmoving the it’s point an Is indicator number, can cycle you're early talked we've physical that Steven, the about

in utilization was XXXX. Our exactly is same in earthmoving the point this time at it

much larger. is not Our fleet

matches than was not been that it The larger of larger just in million nice projects. earthmoving being to is it. fleet stable, somewhat internally about point year. behind a on decline to fleet, to what's I indicator that XXXX. outstanding a catch was think utilization it's physical done maybe is and slightly It's come That we that XXXX, $XX did these us which the an going

So XXXX, at painted want think everything oversell utilization to and it's And to I incrementally to start rates believe opportunity the for don't real. see, I it's improve on I very look moves right stability but we we to direction, at. our

Steven Fisher

of talked about you stimulus how in advance bit plays in lastly, sense. how to watching up those start And then Make orders to you see infrastructure the dollars just kind or see putting to and that fleeting a to what flowing. little is really prepared you're of that, start you're to so have just would start out, trying when for they

Bradley Barber

on we estimates have that want see to do understand a markets, bill growth are would our would dollars some we're Since of dollars where would spent. in high of geography. the be. dollars XX We most those expect be large and going the We within to Yes. state percent to how many of the may are

So consider. there is of things we have to would a variety

sit don't we more opportunity still very have I here on tell likely are an with if to in today. for this be many XXXX us fleet, you would bring improving scenario on returns that there we just the our we a For that bill And it know as shovel-ready the on timing. to. infrastructure every sense. want would of focused more I projects we're year, discipline,

Steven Fisher

Got it. a Thanks lot.

Bradley Barber

Thank you.

Operator

The is Barry Asset Management. of go Haimes Instructions] question from ahead. next Sage Please [Operator

Barry Haimes

much. I of a very questions. had Thanks couple

amount. the fair steel a is, price with So up of one first

higher weren't, in your your orders price increasing price You put order you've mentioned your much would protected. rates rental And then or you up if gone have much But levels. for CapEx to how fleet prices equipment guys got lease in rates how versus which you've at those on go you have book? to justify, up

was that the question? first So

Bradley Barber

no and Sure. maintained had manufacturers. points have to say percent product. surcharge. the would most steel around steel position is some levels The today of generalize with of that price in seen them I X.X% steel probably vary That that a they're X% surcharges their being said, we've really those conversations of by still particular our or

base So to there's down of every revenue the for X% level a the X%, range. second more, more you return just To achieve to obtain go if part previously. you the to your rental you pay question, need getting were you

that have product between – so products the that to protect as returns newer us rental obviously to target and is for rental The that's products the and business. And good historically so you newest as over there's But that a has want cost the basically. time. same well older increase obtain news to of revenue you flow a the your in moves through in blend everything in

Barry Haimes

alternative a Thanks. to energy. Great. question related had I And then

If for versus that. in equipment or would traditional versus guys at Are to those there for of the wind power feel solar types were it Thanks. sell gas-fired Just a of be equipment plant. sort you some let's say similar? intensity you a each What rent three? look Is differences? of the big

Bradley Barber

differences. some are far related mix all power tell of goes product products. There a project I'll as They large issue quantities we're on. is as There type solar. between what agnostic consume you of

in the to closer are way ground, air. turbines is while Solar wind the up

some is about differences deliver construction talked you to those segments the field product of commercial across We've products of I sites. we all many types fungibility times. the energy tell our the there in many, we products to deliver the are products. that products So will our that same obvious

any We're of participating each in regard. outstanding give specialist those today. us of a all not And on the opportunity. you we're three So classifications mentioned

Barry Haimes

much. Appreciate the Thanks help. Great. very

Bradley Barber

for the Thank question. you

Operator

for session. the question-and-answer Barber our Brad would remarks. closing to back concludes I over turn conference like This to

Bradley Barber

the earnings thank look attend first We to just group want XXXX for forward you. to time Thank call. quarter We everyone to our quarter. taking revising next this

Operator

Thank The for now conference presentation. attending today's you has concluded.

now disconnect. may You

H&E Equipment Services (HEES) 27 Apr 212021 Q1 Earnings call transcript