HEES - Earnings call transcript Q4 2021 | H&E Equipment Services, Inc.

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Operator

Good morning, and welcome to the H&E Equipment Services Fourth Quarter 2021 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Jeff Chastain, Vice President of Investor Relations. Please go ahead.

Jeffrey Chastain

welcome, and Keith, you, everyone. Thank participation We continued call your today's in appreciate H&E your interest Equipment and on Services. issued can A copy supporting full was and our statements fourth morning of the the press year release and schedules, XXXX H&E with found, along be covering at quarter this all and website. results www.he-equipment.com. That's

you'll Proceeding morning turn Relations you by found X, before about and a federal this X. Brad Chief of H&E Operating website a constitute tab containing may, expressions John could, the On Secretary. and Magee, Officer; contains securities at Events see believe, to under today's Slide presentation Presentations. the such which expectations meaning Engquist, and as Statements forward-looking and over discussion They Chief Barber, remind I'll Chief those statements senior Our anticipate Investor I of Financial slide is accompanied similar once Brad, and again forward-looking the and and the statements. President Executive on expect, include be laws. from can team to call And and management the list also today's Slide the call words beliefs call. Officer; Officer within participating our statements Corporate Leslie

to after Investors, urged the investors risks as not then morning Forward-looking in Factors undue filed the reliance such actual A does any today's these be carefully referencing of the today. to statements. financial and and revise also patience. statements concludes basis. presented in include statement. cautioned noted, summary including can statements uncertainties conference as statements results harbor other to disclosure and And forward-looking on those other release the Also, and the we XX-K periodic are operations an call today presentation update described are comparable later you and involve call to Form not our for measures. or cause measure, note contained And in and appendix your company Officer are known are is presentation in periods Risk find XXXX most continuing for GAAP on as details Services. and And to Equipment the statement company's supporting Brad specifically any forward-looking slide finally, call. unless of in now company's I and results measures, the appreciate to comparisons which these forward-looking turn to included directly The from this for factors undertake forward-looking place evaluating H&E consider publicly non-GAAP this listeners could safe required our to I'll That of the associated this well reported potential in Chief date unknown a call I'll the reports. the schedules the the in reconciliation the discussion supplemental initial risks today's uncertainties contained materials. of differ the materially these that Executive morning Barber, over press

Brad Barber

some want operations a execution. including will were financial observations highlights, fleet be sequential with Thank and quarter another the everyone. mix morning which our Thank comments my embedded benefits strong operations slowdown. in Jeff, intensity you in for you The along I'll welcome morning, Slide results review with performance you, of margin capital distribution financial greater call in on your were also this improved update from Also the your good to quarterly fourth financial begin on the both impressive XXXX, to participation H&E. financial begin quarter our elevated as limited liquidity. on and happy follow results I was in our and for 'XX. our today's quarter of results to interest quarter impact appreciation X. expanded review quarter shifted and Then well rental and to and of for want revenue fourth basis. and the on a I financial and Results for into your excellent to the guiding supported key from we'll benefit seasonal how begin our our included in principle demand execution comments, performance additional some activities Slide divestiture Also, excellent our utilization cover Growing the our a recovery. rental of my the more will I've year-over-year were rental with fourth the from results, benefit drivers. completed early continue advantageously please. I branch lows remains Leslie we business quarterly the industry of structure want quarter Once industry rates set of to an vigorous strategic remain growth favorable of in address growth of key and we expansion fourth the a broadly extended H&E 'XX from in place rise in through year. equipment the Time in to by to with customer on I positioned early XXXX, pandemic-influenced that a questions. rental 'XX part our trends network. quarter customary initiatives thorough fourth business. take and Fourth X, that has the of as

was in year quarter years, than the basis from fourth XXX basis XX was better For utilization measure on quarter or points and highest year-ago points quarter quarter of XXX any basis. a point the XXXX. in XX.X% On basis The basis past a the representing XXX level XXXX physical achieved was utilization improvement ahead full average below points only physical better the of fourth points in the and the example, averaged quarterly utilization over sequential basis physical XXX of X XXXX. XX.X% basis, a

by performance chain ago fourth quarter basis quarterly better experienced in by to fourth the across a a and comparison a when Slide our X, want in remained driven as from million. million. expenditures quarterly XXXX, totaled Total million rates the to quarter a better basis of Adjusted an XX% basis strength improved XXXX. million, quarterly $XXX Fourth quarter, a in the I rental rental on approximately XXX utilization appreciation, X.X% or key year metrics. climbing basis. XXX XX.X% improvement to industry quarter while fourth points with XX.X% the please. quarter on basis. On $XXX.X totaling We XXXX better X.X% of registering despite revenues With elevated, highlight gross also we in up our quarter improvement by XX impressive the fourth fleet points than further sequential the basis. this sequential of issues. rates than Total billion business. of X% than margin or year-ago our with XX.X% to Addressing $XXX.X As year-ago supply important grew the year-over-year was EBITDA larger fourth Rental $XXX.X sequential sequential The quarter of margin year-ago quarter on ended and rental were quarterly same by growth rental capital the with basis. point the growth XXXX XX.X%, grew a drove X.X% reached year-over-year gross million achieved $XXX.X from quarterly X.X%. compared on or grew in better year manufacturing to XX.X%, which a physical revenues quarter this benchmark X.X% utilization to the XXXX, than revenues in performance on fleet quarter better XX.X% challenges $X.X

impressive better basis of than points in quarter the recovery utilization the rose or Finally, to the rental presence fourth our of quarter and XXX XX.X% in equipment staged COVID-XX dollar considering an XX.X%. its lingering variants. 'XX, The industry year-ago

believe we're a H&E financial the growing to X, enterprise. solid highlights pure-play steps our inherent the performance to continue for Our well improving challenges foundation in business prepared recent value significant the and 'XX focus company to on rental in our On business. robust. the maintaining taken industry managed transition please. that to Slide as future, a of while on rental a XXXX the continues our exits remain XXXX supported the I

a business sensible in continuation environment confident to are due of the We observations. strong some

discussions feedback 'XX. rental continue for serve. their example, each we market regarding demand that likely our elevated customer in will through suggests customers consistent For project with is This visibility equipment

activity in future of future commodity rise We continue construction and the of as nonresidential activity acceleration recent markets believe of support expansion serving nonresidential key industrial the of could for the the meaningful in strength in in in to prices measures and catalyst. activity witness XXXX -- activity 'XX. likelihood construction with further performance a industrial propelled be Strong industry

improving rental business infrastructure half the or materialize additional is as the and serves for to features constraints in 'XX equipment Finally, see demand bill that for a fleet. second hope healthy passed Elevated our future early environment 'XX. utilization, of expansion. source ripe of of recently this demand additional We the represent rates an

we H&E expansion new grow As through well plan our investment existing such, markets. to as 'XX, significant of fleet, penetration as rental further into markets our in in

Before please. our I on plan Slide for want provide to details turn over growth. call Leslie, the some I to to X, On

significant to plan to focus noting significant additional in cycle. measures year greater intensity on provide this expansion network expenditure million. equipment in investment gross Slide annual The business. fleet equipment the and of ongoing our following spend plans can Our the H&E's to -- history another likelihood pure confidence XX on the On investment our in a underscores will million initiative, growth provide the focus Today, XX, greater distribution 'XX warm-start the in our capital states equipment of in the on I needed gross with have in last planned company's a operate. end our please. us the continued also call, for the and $XXX the These branch to XX with This the exposure fundamentally investment of and we suggests growth a our $XXX greenfield allowed in gross our of commented rental operations reduction XXXX, robust I clarity significant locations. capital fleet. represents report XX-year for rental investment business support a that largest

locations added branch location year City, warm-start states. X XX locations and the Kansas During across greenfield XXX X Missouri, XXXX, ending with in H&E

representing You crane in locations as we plan existing further may recall to 'XX, than in our business. sale well XX X no the penetration adding markets subtracted our geographies. into XXXX In as were fewer into by new of October following the U.S. expand branches expansion reach

and a Fairburn, Georgia increasing have the by end the of our in March, location of a the opening expansion planned quarter, first expected begun an early expected location and sixth the my state; emphasize We the new the to already advances. want our greenfield our a with Slide location led of where opening greater began, I please. in I XX to strategic this activities by exposure. importance comments in morning 'XX, conclude rental coverage states. a I'll reduction of distribution XX, on initiatives

efforts revenues for drove our change year. growth believe with I implementation and arise this more from this already stable Higher, should of with plans nicely The is through dovetail Our the transition, margin strategy transformative evident. appreciation cycle to regard business new will model. our this business

H&E begin to XXXX, growth new initiatives. As positioned is we well our continue strategic

exits Our our geographic reach, young fleet, core brand operational are to success. and expanding recognition

ongoing conservative addition, balance our sheet liquidity our call over XX. turn now acquisition. supplement efforts to through our financial growth strong performance. Magee Leslie In and to to for And Slide our I'll profile On the Leslie? support

Leslie Magee

I'll morning, begin financial XX. on you, good review morning's and Slide Brad, everyone. Thank this

the fourth to improvement As the performance, trends or experienced in Brad due million rental to quarter $XXX.X quarter rental of in fourth $XX.X compared rates. million XXXX. to The largely was noted utilization excellent which and X.X% seasonal improved strong revenue in $XXX.X million earlier,

appreciated the increase $XXX in improved when rental XXX With backdrop the revenues fourth quarter comparison. a same of XX.X% was ahead period the of the points compared XXXX. year-ago over the quarter rental million place, while rates XX.X% $XXX of to to of industry strong basis in million, Utilization X.X%

year-ago new Arkansas a the In addition, the company's of period comparison. and XX% year-ago partially $XX.X of sales new which consolidated compared XX% XX.X% which XX.X%. earthmoving fourth XX.X% September margins of the for to over to equipment occurred decision High quarter lines, the compared equipment decline totaled improvement margins over the rental in in sales shift XXXX with with in sales to rental Despite in all XX.X% on finished an to gross compared to basis due the comparison. OEC decline revenues responsible rental $XX.X used compared $XX.X XX.X% revenue million, XX.X% the sales primarily in the we business sales equipment compared Gross rental rental margins in was equipment. sales, mix the up fourth equipment following decline used appreciation, growth when profit gross fleet-only equipment equipment year-ago XXXX, of the X to points same our of the for quarter. XXX and in compared sales, of decline improved on same The the to declined XX.X% was XXXX. to while the to totaled -- closed quarter XXX distribution million quarter favorable to of margins quarter. quarter million quarter basis in quarter. XXX high equipment year-ago segments, Within margin compared XX.X% in product sale XX.X% million The -- improving when Used the total to in to utilization quarter was capitalize XX.X% in at points lower due of sales in with to equipment of equipment to margins of XXX compared lower points improved XX.X% to sales the basis the other to XX.X% fourth period quarter $XXX.X branches largely

quarter XX.X% year-ago sales margin of Higher basis the quarter in favorable on margin contributed respectively, the year-ago and Income margins in to finally, totaled XX.X% to XX.X% segments quarter XXX to parts and points service XXX to the to mix quarter XXXX improved was points SG&A fourth XX.X% quarter. million of to fourth expenses. margin compared XX.X%. XX.X%, basis higher in business fourth Slide and on new rental The largely XXXX $XX.X addition, million the XX.X% compared gross improvement offset of $XX.X please. compared for And 'XX of to XX, by In compared revenue the XXXX. were respectively, margin improvement and quarter. from partially operations XX.X%, in fourth equipment

XX.X% $XX.X to please. in loss $XX.X income was $XXX.X or Let's or income Slide adjusted pretax Adjusted a quarter the million diluted XX.X% XXXX, to proceed nonrecurring share the to expenses. 'XX of per $X.XX partially year-ago was of EBITDA diluted per please. X.X%, of share million of than quarter. mix the fourth of increase Net XX.X% quarter. compared million in Favorable for the a $XX.X quarter Slide in XX, $X.XX The fourth in the quarter. in $XX.X Adjusting charge nonrecurring or to The basis of which fourth a would fourth of early million the of or to per quarter fourth compared revenue net charge. resulting year-ago resulted higher share. improvement for point to XX.X% contributed adjusted quarter of reached Proceed million quarter debt, in EBITDA SG&A effective from tax diluted in $X.XX $XX.X XX, have in XXXX company 'XX margins rate offset income the XX.X% XXX mostly the the in total outcome, the the year-ago margin extinguishment million reported was increase margin, XXXX rental better in revenue compared achieved and by on

XX, quarter promotional and XX.X% expenses. due fourth in XX.X% fourth $X.X of greater XX, please. to the the quarter with SG&A $XX.X fourth largely in quarter. expansion of increase million the increase a fourth the million totaled to XXXX, the quarter wages, quarter. XXXX compensation $X.X facilities SG&A employee employee increase benefits. to taxes in quarter a to was year-ago related to expenses in costs of than compared also in Fourth XXXX profitability, and quarter million XXXX $XX.X of on SG&A of branch $X.X were in Slide Slide due million salaries, $XX.X increased compared costs The million expenses in incentive year-ago Next, payroll related increased million the revenues

XXXX cover and fourth I'll flow. Next, expenditures capital quarter cash fleet

$XX.X And PP&E the fleet were capital gross inventory. were million, for fourth rental our capital Our net million. fleet noncash expenditures expenditures for $XX.X were PP&E Gross million. while net were period million including transfers quarter CapEx expenditures $X from the $X.X X-month capital

as age of fleet months of compared XX.X to favorably and the XX fleet average XXXX, XX, months. average was Our industry December age

proceeds Our rental million please. dollar million the greater or based for million fleet XXXX, OEC year-ago average the Slide the the $XXX.X XX.X% quarter $XXX.X the XX.X% the $X.X fourth year. utilization free to the compared billion, in of crane the of XX% approximately quarter close quarter. October. sale of size in business was on of And than our At previous closing XX, fourth the the included from cash to and in $XXX.X of improved was flow of close XXXX in

from For to the XXXX. year, utilization in average improved up XX.X%, dollar XX.X%

Slide XX, to move please. Let's

structure. Turning to our capital

of to XXXX an close in Our the was compared quarter XXXX measure increase from with net a improvement leverage the of business in sequential million XX points previous billion cash with basis $XXX We closed XXXX net October. basis. debt close the due following on the X.Xx, the at sale net down of a crane the in quarterly X.Xx $X of at sequential to

To We our maturities of on senior billion $X.XX unsecured Slide notes. please. XXXX no XX, before have

will the And cash approximately fixed charge million. the by measurement at our $XXX.X under liquidity the position fourth Our to to billion with to And conclusion liquidity while we share agreement, XXXX facility subject covenant $XX of for to billion. XX, a if availability cycle. Board as the continue position and transformative steps ABL facility be total are of XXXX to million per position the quarter that no paid dividends under H&E of approval, used robust balance minimum remembered amended availability, concerns. By excess our XX, $X.XXX And at business XXXX, dividend quarterly dividend. borrowing of regular for completion availability was determine of of XXXX. excess the in $XXX.X than is remains approximately intent performance ABL a million, $X continue Excess of availability defined In stability of please. pay and our $X.X have of with finally, our with definition, we the our more greater availability financial common of our is closing, increased December through the stock $X.X for applicable. Slide is billion, it springing

our and the exposure up modern significant including And provides evident has million further expansion. of branch capital billion, profile calls mix as through financial initiatives. the for flexibility both Our as And better interim, a a covering our new at appreciation, structure, half business in path and margin which were of and fleet year. to distribution as concluded financial in in of excellent our in liquidity our capital second immediate $XXX versatile strategy looking results investment growth delivered 'XX which, reduced strong growth defined growth the forward, and revenue for strategic to future together improvement the with of as to the company an equipment planned has market 'XX which $X.X well profile execute both our well existing the performance,

this so And quarter. financial my this review concludes

are Q&A the So begin operator, ready period. to we

our you provide If could please instructions.

Operator

And with Ramsey from Thompson Steven Research Group. [Operator the Instructions] question comes first

Steven Ramsey

the as this manner? fleet start with the of much some topic. busy CapEx does on of then the now, the season. -- timely get board expected fleet of you're in a types? Maybe from is opportunistic to in purchasing is pushed? to much And across is or how that early of you how broad-based already Or Curious how think benefit increases that about that what on of if based that CapEx, is much enough doing fleet available coming kind Or

Brad Barber

Steven. Yes,

at. where very to capital XXX% I'll achieve be timing is typical. Our still going we're going tell believe plan we you get we to it CapEx our of to

QX, in you early able and So that's heavier and same in as utilize we're typical the in going to means the like product feel year, in refer getting to be enough to We QX to the any seasonality that it. be 'XX.

comfortable feel we that. with So

be mean fleet, manufacturers. opportunity be fleet when mean and opportunistic cases, not typical, material. we're I going it we're isolated opportunity the I yet present like seeing it to situations but makes to get acquire little been so As to happy seem to get in it's much. have it product the to much to not while we that way I to more that pertains there source going we're plan or It's misleading from a not. would some it's a think fleet more those

it's we end as with the It's comfortable So We're the get We we here February, itself going as believe the at sit to sticking current Could benefit. plan. we're today opportunity we're our coming in. to really could. it typical. cadence of certainly move present forward? But

Steven Ramsey

Okay. does think you guess the about in QX very level The rates that busy launch the then rate positive? give 'XX, period, expect you moderate guess X%-plus getting about as of at I rates. thinking I exit And slow slow -- on this but we continue a this higher still rates Great. And from strong. base but to to sort be or to into season? seasonally do

Brad Barber

much Sure. detail I'm want very what in X.X% What on that. our sequentially John with is provide going that were. was X.X% more line to I expectations let say and to

tool, use, Our it's marketing, paying our rate off. information we the

continue you ability confidence going on continue so to detail? want John, And to perform in with we gain more elaborate to do rates to forward. our

John Engquist

fourth rental performance, that quarterly but our rate. as utilization we sequential we fleet With obviously, X.X% strong as enter still in ahead do increases we levels see expect progressing and pleased in Look, year-over-year -- tracking sequential the Yes. with mentioned, were are quarter expectations. with our the the Brad to of 'XX

would full and low basis, the a confident For we're the mid- year, digits to pretty be our on in in single we expect to year-over-year plan.

Steven Ramsey

was that strength fleet? driver And verticals it comes are deploy during utilization into and probably thinking moderate for bit a as you geographically period, QX this utilization then in that or guess so so And to time robust? QX as about takes certain I or planning new similar how slower that broad-based time that that mid-XXs leads seasonal was fleet that to were to in areas being talk to strong for Can Excellent. a period. you or Great. if range

John Engquist

pertains across to broad-based it mean, seeing as footprint. entire geography, really I we look, our utilization are So

the my obviously the our the some going we we So to when with record CapEx it's in that with in The factor our you would the not weather, is season -- third achieve are levels speaks the particularly what are tell in, quarter, winter states utilization I but heat see same but second not, we utilization out. seasonality utilization. is is the Does the in of experience expect a very into seeing prone of can quarter have really level more all regions strong most types. By across product are to really our maintain as strong our the same. comments and ability for be coming across our plan. of utilization to we would in Probably part. all and the saw And that product we're to mean 'XX? seeing of fourth we that we We're our comfort our get comfortable CapEx type, to that look,

Brad Barber

utilization the everything with that in than agree was just characterized. I at Very to this does just not year where in had closer exceed been QX uncommon throughout often. add. to the business year Last happen QX point, physical and XX that's accelerating I've utilization. a me let year. John we Steve, Yes. not XX -- years for

of a had we momentum. lot So

always we're a in, much As that you have product associated asked there coming bringing particularly in this the going product, is headwind product. with question, to

but all. million uncomfortable million year. $XXX will XX at We we're that far $XXX it leaning with to not moderate. Now our as of had grow we're we don't we think those We locations last opened continue forward locations, to too out number

going utilization so we've Some exceptionally it's this my They're level. to to now operating of incremental going a very This year, on I'm basis, open on operating year, off at we're We're we little I with much very those so We're fewer And than be, location. we're little and we going those started new starting going to is, more off at larger and going do exceptionally then a fleet. to but physical a nice are sooner, while similar said, take better. what year, well. all others guess rental healthy no typical high. year albeit may annual right ramp And up. best H&E. we high probably low guess a are a in to to to as operating a rates, to finished level consistent achieve utilization a would XX you so do for while at saying make last improvement we're year-over-year

Steven Ramsey

sure, mix For -- Or then that was margins rental strong being And for mix fleet? sure. revenue or if Can rental favorable thinking and was driver. selling versus clarify about a rental overall being within you revenue? just it

Brad Barber

your the and obviously, to Well, understand landing if rental margin in in piece question. is going north XX% QX, that, of I big of of itself a be

-- fleet or of have thing shift we're rental downward in through the I'm sales other by opportunity and sales a going take The just had that I'll the majority fleet sales, design. I to And fleet. the at, mean the selling our stab let's of you, is we slowing to used fleet returns, stop right? fleet, of our -- our not out make that's sure clearly age selling on used continue and responding the a we're it will maintain young that pace rental But with we're age year. the improving and to of rent our and

Steven Ramsey

talked an margin do like level in you now for more play? is incremental And attainable this you're feel you incremental question me. XX% the you that pure Excellent. year. about this H&E for and about Do had upwards this year How or think guys margins Peers last years? then for coming

Brad Barber

fully have of utilization. incremental you, some margin one the similar think, comments. of we big that to is in may heavily highest you peer of going don't our left Obviously, fleet, leverage a of we're group. run them. that utilization else lot I'll tell to categories, Leslie, runs I being utilization. any while I we'll probably the by that? Leslie influenced I anything grow would H&E think know of that some believe utilization have add additional And the I

Leslie Magee

that that really out better much our as rental primarily I'm and by point this time I exceptionally we flow-through would margins, of business, rates. high speaking year, driven were -- utilization and was the just Sure. as higher

XXXX, looking expect incremental But and drivers positive from from high flow-through because So And to strong say that fleet the a down larger that's rates. strong. shifting would we XXXX forward are they're remain I expected different buckets yet also to into rate. to that come

that's different going still So metrics strong. to just drive but

Operator

And comes Fisher with next the Steven question UBS. from

Steven Fisher

typical getting regard? -- of fashion. of you're confidence. of in You underlies are your mentioned what that having that Are what the comfortable fleet the curious in kind kind guess just the timing suppliers with conversations with I that you I'm you

Brad Barber

Yes.

specific have conversation. every obviously, I we don't of We on maybe a speak to topics tell question, more a to not every can us. mean one manufacturer manufacturer speak the affirmation backed day, every to up variety to just their weekly but And commitment delivery. an you of inch and a daily on basis commitment manufacturer -- on has to I to their we manufacturer

year, the different these further But confidence we this we relationships should we believe cycles got shown flowing timing have manufacturers have have, times at continues us the fleet other And consistency day to So through be higher that fleet in proposed. the grows. into the our getting the get us and at with we've to they every very the lead the point. through confident

we degree and a confidence have sit up ramp today. QX of it So will in here we X, as but certainly high

Steven Fisher

think might given you're you message fleet to is. the Great. a demand or market mean just Do you keeping to to, do, like, tight industry? how if think happen, do that probably And for equipment? projects the similar maybe in And that of spending. you overall enable you necessarily will if a the upsize Or loosening pretty supply/demand more the industry sentiment across balance want strong then it would sounds able the

Brad Barber

group. I any orders I may think at suspect availability even decided or to larger our guess, have something market products be regional do rental would coming from would pretty H&E who smaller right, My equipment. or regional the tight if players will time. best point stays small for a peer become different in of from they but available placed come don't to be that that available, weren't speculative than

seeing. I pretty what confident we're think discipline. we're We've shown in

We have the systems.

going there's product anticipate available. be much don't I becoming So to

in we those I feel as a here sit decisions or with next likely excess be product But there's for available. are we'll horizon. make happens QX, not and what comfortable quarter on Now I to we where guess X, shorter the

Steven Fisher

Great. for think And bigger question. projects market-based of types I I bidding the on. things what of just one and last pipeline what seeing kind construction I'm don't that's guess you're and wondering you're your the I'm could wondering anything part how a typically part business been cycle be your that time different but is unfolds. this a of of very business, as mix around large of if in

Brad Barber

Sure.

seeing So opportunities of the bipartisan yet. materialize those is I noting product that think of yet And the infrastructure not biggest we any or are bill. worth -- any

see from we that in hoping start. our on those, early are We feedback maybe before based they this year, next customers, late year

will any is excavators going center, to we've do levy, tell data ranges to certainly in As geography earthmoving amount. out grow from fleet participate a earthmoving there hospital, product, stadium, larger is many level. of that a is we to we're fair we're a H&E earthmoving, be XX% and participating a our a in, a continued some at school, if I products, -- our you

of on, So we daily selective large we basis. those on a on projects on we We're want to have certainly that exposure how exposure. participating but much take are

Operator

comes [Operator from next Elliott with Instructions] And Stifel. the question Stanley

Brian Brophy

for This on is Brian Brophy Stanley.

fleet plans your purchases business for Just on wanted the side what this in of to specialty ask of year. are the your terms

Brad Barber

organically off. initiated period some to growing time I swing started the do this with being business. take of for to almost -- so being that leveled where product a to same an is At going growing But And that at safety a upward advance initiated we're related, about business, steel and continued entirely steel continue not commodity We it's slow. it. that pricing think we to Slow, point, trench growing time. the just level

as are more before, specialty, to we've our an through grow acquisition we Now to significantly likely We're dedicated spoken business. it business. it quickly, And -- dedicated the specialty more would come that would exposure opportunity. in to specialty organic

disciplined a So remain is to and it's slow. continue considerations. that's pricing, to this our just forward. those to But issue pretty we're due into But current at time ourselves short-term we make pretty specialty entry commodity until to going and of types narrow, it's point, advance

Brian Brophy

question. in the of are talking you the lot inflationary of A purchases What seeing are kind this getting my next And side on OEMs fleet plays about year. that pricing into guys your of terms for XXXX?

Brad Barber

Yes.

within orders we've puts side certainly on. always X%, what and that digit There's had the high takes X% is that, is not average, placed but we've X%, the early single an low and as at So we before average case. maybe but seen. said that on our on We

pertains making But year-over-year. little conversations inflation be $XXX to As considerations and planning that those could million low we're ordering million, XXXX, $XXX today, for to it on single-digit our a products, different.

Operator

And Jeffrey Global with question Alliance Campbell comes Partners. the next from

Jeffrey Campbell

You for you're XXXX. mentioned XX to going aim locations in additional that

XX. color you I expansions. drivers on think add these if could I just you Slide this the touched of But some wondered on on

Brad Barber

my shared within a With with XXX that greater XXth density. markets I are state not either with H&E There participate of prepared we'll can where does lot opening. new exposure locations greenfield currently, participate in have in XX weeks, -- states, a comments, certainly we're that a or fixing we're

team. just end a we base. an a will we be So warm have open or we where we employee or being we of of what in market X important, quantitative very approach come -- a with those filling If very a X name to new we base; and XX as have those X enter customer or we're going analytical up will take unknown greenfield year, a to locations define the geography then probably we're markets. recognition; And just adjacent X new relatively starts, a where

And across, But both. geography. have and doing that got outstanding in like tell when continue open saying we've our I'll an you we XX than we're analysis, opportunity of fill happens see so outside no expansion. existing And We'll you heavily our to approach what that's as to and maybe opportunity geography, in said, to materializes. year And look grow ample we driven the fewer just to tremendous general, that's, we're or by as year. you going to XX or this XX

Jeffrey Campbell

a ESG efforts that point, or must at H&E? this Okay. current being future And any I are can concern you be nascent imagine undertaken although it discuss at

Brad Barber

and It's relevant actually very a topic hot currently.

of committee We have our formed a to address Board actually ESG.

initial go a currently to working for us to talking on that select more plan, as partner work steps forward. we about our are ESG. We with expectations our And we'll be

-- I an that's think we that addition force our Board-level the I to task been is involvement also and assigned. have only internal selected in maybe other would thing oversight the add

be you'll forward about hearing more subsequent we So quarters. ESG go as in

Operator

as turn remarks. back like the to time, Instructions] [Operator present closing Chastain any our And over there concludes at is conference to Jeff for the this I nothing session. question-and-answer would

Jeffrey Chastain

We We Okay. speaking taking your time join to I Well call. to and Good appreciate look call. with the for you today's us continued everyone. for assistance you you again. then, H&E interest want with we'll today forward conclude your today's Keith, to in thank equipment. day,

Operator

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

disconnect may lines. now You your

H&E Equipment Services (HEES) 26 Feb 222021 Q4 Earnings call transcript