Earnings call transcript Q2 2023

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Operator

Good morning, and welcome to H&E Equipment Services Second Quarter 2023 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 sir.

Jeff Chastain

morning, good and you, everyone. Thank review Welcome and H&E. quarter results second you to for in our thank interest your XXXX continued of participation and

press statement and issued at results the be second www.he-equipment.com. reporting schedules along today website, found supporting and can A was all with HME release our earlier quarter

is by in slide the the Relations tab presentation, website discussion HME can also Our under accompanied this which and Presentations. Events morning at a be found Investor

managers will Engquist, Secretary. On Chief today. a Operating see joining Slide senior Chief John me and are of Officer, Officer, you President Barber, Brad Corporate X, Financial Officer Magee, They list Chief and Executive Leslie and

I federal expectations and to could, and statements about contains Before call forward-looking believe, and over and securities I'll our the anticipate expressions beliefs today's Brad, your slide constitute of meaning as laws. call the within attention such may, expect, Statements forward-looking similar statements. the turn remind call statements to X you words containing other that

statements any Forward-looking differ contained unknown those which uncertainties from materially results and in cause risks actual statement. could to known forward-looking involve and

described of not call. undue to or in after A call factors the on contained place includes the for not company's in this date statements carefully cautioned presentation other update potential in to these today's is does urged are evaluating The publicly Form the forward-looking factors these revise are consider periodic forward-looking in listeners conference statements on company's to risks and safe undertake forward-looking company annual the other in and any reliance statements. and the harbor XX-K slide the risk uncertainties summary the Investors, investors of statement and included report reports.

non-GAAP today's financial we measures during Also, are call. referencing

and measure supplemental You release disclosure measures, GAAP to the the presentation materials. the reconciliation will required appendix most an our today's associated as directly press schedules in to comparable for and supporting including find these

of over H&E to Executive Brad Equipment turn Barber, Officer Chief the I'll call now Services.

Brad Barber

your Good today’s XXXX Thank review to second Jeff. participation on and morning, welcome our of appreciate call. quarter you, We results. financial

begin financial transition with in drivers and strong quarterly Slide to our quarter. and the then touch will rental financial X, high-level please. I'll upon of Proceed business of performance. a this the I progress to achieved the review morning second highlights major

Next, and served observations on I to our identifying want to perspective the equipment regarding the for end industry, discuss optimism XXXX. the our that of developments of rental outlook XXXX have reinforce remainder offering recent and

targets. our the our continued strategic XXXX I will growth industry, revised to bring Lastly, confidence date considering in with you up

financials, we to of follow Lastly, the review be and structure and including capital we will second will performance, liquidity. the an address your with happy Then of quarter business update equipment our questions.

superb reported financial H&E please. second results quarter. in X, Slide the

backlogs healthy project yielding expected, period As demand prevailed appreciation. the further throughout industry with customer rate conditions steady and strong

We successful also initiative in from benefited launched the growth XXXX.

We new our are achievement. and important substantial very strategic strong fleet financial open. significant in expansion led to locations factors with XXXX the these Collectively, made in six growth focused quarter targets on progress

Both significantly. with effort in management grew basis record increase and loss Our included growth levels which remain EBITDA were XXX a point and a quarter, the quarter. used EBITDA, while approached growth compared revenues for XX.X% reflecting measures equipment the XX% year levels equipment for as equipment the robust. Record revenue used ago. Total margin market in and up growth in effectively increase to rental was impressive level the revenues revenues in from year-over-year for sales, total profit margin, posted each to reported record notable

nearly $X.X growth we $XXX successful fleet in led the record see, in of by execution made objectives, strategic These achievements quarter that ending our were a quarterly the financial increase possible million by our billion. rental

network, The new six branch of Our current included as quarter. warm the growing the these these XX open equally of rental over starts mentioned, to want review so in XX which drivers. fleet performance major last and added across rental expanding our was an I months, impressive, was distributed business

X XXXX to were to impact margin of XX.X% following modest revenues over the largely Slide compared One accounting, Rental XX.X% purchase in in comparison. ago of of the were please. year the Rental second to acquisition Source. the to margins period of On the quarter compared decline growth was XX.X% quarter. up due The

to the first achieved financial margins of on quarter Leslie rental solid basis will provide review. a gain compared gross points. XXXX, the further XXX detail When of

excluding compared pricing sequential to X.X% a in quarterly Rental from were benefited year the second performance, operations another of rental rates ago quarter quarter back on the basis. Source, Our quarter, were One X.X% strong up and

the second rental remain of XX.X% XXXX, unusual XXX points. the XXXX, Physical the of a normal period improved during same XXXX, time improved compared to in six second months of represented in quarter quarter compared of the quarter supply Through basis viewed period among rates When to X.X% industry. the when the in tight the compared in XXXX, to first same utilization a out best utilization, XX.X% physical fell and the first historically of industry.

fleet, XXX sequential Finally, rental of a dollar unchanged. primarily better to compared was the due basis utilization basis improve in rental utilization in quarterly the the points second our on essentially of XX.X% growth Despite was quarter second XXXX, dollar rates. XX.X% to quarter or significant

on our and that some to development now I opportunities lead perspective want additional including growth. material the for should to rental prospects equipment industry, address

in XXXX, was up please. Bureau. U.S. Through X, the second construction persisted according construction Census Slide [Ph] through spending fundamentals quarter, industry by year-over-year to part the segment XX% to On important in spending. supported non-residential this Strong May, resilient

through remain place, to with expect XXXX. in and we them result, project XXXX a positive As for sustain increasingly implications healthy backlog

rental with equipment infrastructure industry. the demand, include indicators further the spending construction witnessing and these serve geographies the and number Construction are a growth of are or have Along manufacturing mix. solidly as stability we sizable escalation of demonstrated implying and projects we of the and ago mega programs, expect increased projects, construction a of non-residential in funded expansion large callous solid we're a months which public of basis private and scale, steady representing to spending component for across throughout continued growing XXXX. into of remain active Also, in ahead year installations recent our project serve measures, leading federally

the encouraged produce and a dynamic forces to major We these business industry are XXXX balance for strong by opportunities of of attractive and fundamentals the and projects combination into stimulus and XXXX. solid throughout expect

our and as company we the our and toward for success. second turn XXXX position I Leslie, achieved to in Finally, substantial growth over revised future progress targets call the before quarter expansion the objectives disclose address want to I and

please. X, Slide

Our rental business on will expansion network. branch initiatives remain and our have and been centered fleet

the $XXX totaled June approximately XXXX. in investment record representing expenditure million second by Regarding XXth, our gross fleet, capital quarterly $XXX the company and through a the capital of quarter million resulted investment in

second compared billion the milestone. yet original on our representing As rental increase the to June size the measured as XX% we close XXth, the by totaled approximately when company fleet another XXXX quarter, was of OEC $X.X equipment cost it

the open the and As branch regions. mentioned Coast six comments, Southeast, density mid-Atlantic quarter, locations our improving Intermountain in Gulf earlier in in my we

third the Additional and locations open in set to fourth are quarters.

in across additions, states at As current XXX of presentation. is we that branch a appendix XX% locations. branch quarter, quarter count the locations network included year-over-year second our representing map branch stood concluded required XX the warm second in of with of inclusive growth our today’s A noted starts of

growth We a and value follow we approach to execution. and strong disciplined expansion

our confidence to Accordingly, level We raise continuation believe market of have of changing XXXX growth response consistently appropriate the heightened an in conditions. demonstrated an our attractive we to ability fundamentals. to decision adapt industry initiatives is to our

also financial H&E for future believe essential we as We properly is it and growth enhanced performance. position

range $XXX a locations, from has $XXX raised XXXX additions million to expenditure to to increased of range anticipated XX capital to XXXX million million. up up XX $XXX Also, XX of locations. branch our to we a Our from to target $XXX XX have million,

demonstrated In in financial to we conclusion, significantly of growth pure the our margins. H&E. our operating while quarter XXXX, potential we have is of focus began consistent further second Since rental and performance revenues capability play transition in a financial elevating evidence

systems A potential. commitment of represented our drivers expansion with and robust dedicated growth and ample technical capital, rising a critical to workforce combined

the about on ability to we effectively demonstrate new we excellence operational confident address opportunities continue our our forward plans I achievements. as our and rental throughout industry in the to excited footprint. are the expanded for are We new look equipment and updating execute prospects our growth to future

provide Now, I'll slide the a review over Leslie the and Leslie? financial second will who our performance. of quarter call on to turn XX

Leslie Magee

Good XX with begin I’ll quarter review profit and and a Thank Brad. gross you, of welcome and everyone. second profit margins. morning revenues slide

and $XXX.X of quarter second our by $XX.X from was to higher compared equipment reaching Second date increase million. level quarter the improved highest sales. million used The revenues revenues rentals of led quarterly XXXX, XX.X% to

quarter Rental comments. to I revenues review Growth in want impactful rising million And these of the in developments, rental in together our year-over-year rates quantifying improved with fleet the year $XXX.X to compared to to million contributed XX.X% the strong ago $XXX.X result. some rental Brad's quarter.

fleet, million billion. equipment cost over by the Our OEC measured to or second as rental our just or grew original XXXX, $X.X $XXX.X of quarter XX% from

the the were compared demonstrate X.X% In improvement addition, of and excluding rental first year sequential second in XXXX. X.X% rate ago the than quarterly better in One Source, to we rates quarter, quarter when continue the quarter to gaining quarter

the second quarter, below year of ago in Physical XX.X%. the utilization XX.X% was measure

quarter expansion outcome fleet second XX% other impeded growth the in was initiatives. The our and modestly by

a compared by utilization stated, intensified year is However, XX.X% as Brad representative the lingering when equipment in result to which normalized supply the ago shortage. was quarter, a more of

million year quarter in sales $XX.X to the ago million equipment compared Used $XX.X XXX.X% quarter. improved the second to in

because sound types a seen to in we equipment capture of availability have moderate change used of in equipment attractive improvement this opportunities a of the and able market. were certain We

our activities. compared from New from million of with in exit second December XXXX of which quarter million equipment a business, resulting Distribution to decline quarter in the XXXX completed sales $XX.X declined Komatsu of the Earthmoving distribution our divestiture $X.X the XX.X%

in gross to quarter. second $XXX.X million or $XX in million quarter year increased Consolidated ago the $XXX.X to compared XX.X% profit million the

on a offset result, margins the used higher with a to gross gross margin gross to of largely rentals. margins and partially XXXX improved mix a on to As XX.X% lower basis quarter XX.X% second revenue favorable in sales, the quarter compared increase by equipment point in due XXX profit

margins primarily rental equipment were XX.X%. fleet rental from expense in the XX.X% the fair margins of impact XXXX were to to depreciation resulting margins XX.X% quarter and ago compared the of in purchase mark-up associated rental declines quarter second value accounting These to year higher in the One the compared the from acquired due and were Total XX.X% Source. of

to XX.X% compared used to quarter, margins margins through to Comparing increased fleet-only to ago obtained equipment improving compared year excluding with the other equipment results XX.X% XX.X% XX.X%. trade-in used to

new Margins finished at compared unchanged on XX.X% on XX.X% equipment service compared to quarter XX% XX.X%. to sales were and compared to to margins XX.X% XX.X% finally parts at margins sales largely improved while the

XX, slide to at of quarter please. or a on $XX.X XXXX. in million Income closed from compared Moving second quarter the operations to $XX.X million XX.X% the increase when second

improved Source Operating rental percent revenue of A the from acquisition. to the margins contribute revenues income sales to year margin. by used quarter. on higher SG&A margins equipment ago to margin mix, factors XX.X% offset lower improved a XX.X% and were favorable partially lower One gross the These resulting compared in as

in $X.XX operations quarter from or or to share compared Proceed $X.XX per year income XX.X% diluted diluted $XX.X XX, in Net per $XX.X please. continuing to increased share second ago million quarter. to the the million slide

income for second in the the Our XXXX. compared same to effective XX.X% XX.X% to rate quarter declined quarter tax in

quarter in margin of basis used margins XXXX increase as sales, in XX, an million Slide please. increase $XXX.X the or revenues. improved than primarily to was improvement on the due XXX compared second in a XX.X% to in better $XXX.X comparison quarter of in revenue to revenues At points the mix, with improved and in percentage EBITDA in the EBITDA year equipment margin the to quarter. the the the XX.X%, XX.X% a ago gross of quarter, quarter million higher SG&A total second lower

and increase. quarter and please. of million SG&A as to expenses, $XX.X XX were variable secondary quarter-over-quarter professional The to increased as was compensation compared the Higher the to contributors million to employee $XX.X million in expense attributable increase well SG&A the year-ago or Slide depreciation wages, second XX.X% increased facility salaries, quarter. fees, in headcount. $XX.X

the year prior the Expressed as in prior close from XX.X% quarter Approximately a $X.X expense revenues, opened increased to SG&A expenses since the down were was in quarter. in quarter. quarter the attributable of of the or of XX.X% percentage acquired year branches the million

quarter the the or Gross of Net quarter was were Slide rental of $XXX expenditures capital the for PP&E $XX.X CapEx totaled $XX $XXX.X non-cash inclusive gross quarter rental transfers PP&E. fleet in net XX, in million. capital inventory sales million. fleet from million of expenditures million

quarter $XXX.X comparison. million cash provided cash million flow second of activities by $XX.X million XXXX. $XX.X $XX used in totaled quarter operating flow the same quarter was cash in compared over Free Net compared of in of million the used period to free the the to

of from the months, was the first down of favorably age rental months. XX, age continued months the average XXXX XX.X average our compare The XXXX, in on fleet XX.X quarter fleet to XX.X of and to industry average June

please. XX, Slide

second was Our quarter than $X.X the XXXX $XXX.X in was Average the equipment billion our prior and the exceeded quarter compared and of original or conclusion XX.X% size XX, XXXX. quarter the size in rental XXXX quarter second fleet to costs XX.X% first fleet at on dollar based XXXX. utilization of larger June XX.X% XX% of the on approximately of million in

on X.X from Slide times, billion, from unchanged XXXX approximately second Net XXXX. up XX, with quarter December XX, concluded December $X.X on please. the measure XX, slightly debt was of XX, June XXXX. We leverage net billion $X.X

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

XX, Slide please.

million, on December the billion, while was XX, liquidity up $X.X on Our XX, facility $XXX.X position billion XXXX. June availability $X.X totaled XXXX approximately excess from ABL under

is by minimum we $X.X determine And And concerns. excess Our charge defined is to availability to ABL note continue as used remains our of availability, our with measurement $XX the springing covenant have excess million. fixed no billion, availability coverage whether that the agreement, applicable.

$X.XXX Finally, we of quarter dividend second of paid regular in the XXXX. our share common per quarterly stock of

pay approval, dividend. While to is subject the are dividends to it board intent our continue to

summary, over improved financial XX% Slide over this of our respectively, XX, continuing our which up which operations locations from year, metrics and And XX%, the activities, cash continue They both were XX%, have almost by over to fleet include of OEC in EBITDA, with demonstrate net with we XX%, period. objectives. strong defined In up income approximately operating our please. up income execution from branch provided and significantly operations up last and was XX%. growth net

growth have yet second country their XX strategically while have in of others XX the achieved The in located in approaching measures record the quarter, levels added financial Several including starts the the six months, potential. last been are warm new full in highs. quarter, high reach areas second and to

to already remain sound or As increasingly non-residential growing are to Brad major fundamentals place. the by projects stated backlogs a earlier, of underpinned industry backlog add that in are impressive expected

our further financial We revenues, are industry, growth in and the we determination equipment industry as plans successful are expenditures a capital as by a and branch five annual accelerating expansion for developments rental gross the to and participant by encouraged these strategy resources because top and achieve have we measured success.

you. you We're please our period. the ready Would Thank Q&A assemble queue. the begin provide and participants call to now to instructions

Operator

question first Group. Thompson ahead. Research Please go from Today's Steven [Operator Instructions] you. comes with Thank Ramsey

Steven Ramsey

the revolve to quarters. second the down to maybe be year-over-year fleet declines past questions CapEx size could half time utilization XXX start each pressured is similar XXX it or utilization more I with morning. in deployed? that show have we BIPs time a larger BIPs of around Should Good the expect few as two to and

Brad Barber

constraints. to referred, was we XXXX time QX our look increase. of extreme Steven. see look typical crept north since window started history have think but was typical so we answer when morning, XX-year average. When week utilization, with a quarter and as We here the over actually we just I up supply a bit we anything and the the expect the of and I a at pretty is Good second we fully appreciate little question seasonal XX%

a So we expect to see seasonal uptick.

We not are done.

We have utilization not today. peaked on

will not tomorrow. have peaked We

quarter. will continue get to We incremental the throughout improvement

would is I not is you to possible, year's end going believe that back at are nor under just Now, circumstances. want up to That not the last practical we to utilization. physical it lead

before, continued capital, business. trend, of is improvement, we seasonal in very We we see for are growth levels as flow-through the a rate to have happy typical incremental going achieved going are bringing substantial fleet provide that to so and those more that a lot never we are positive

Steven Ramsey

And fleet getting be level, larger when is, meaningfully Helpful. will this do expect I delivered? Okay. this CapEx at on a you higher, this clearly on What much impact or am to results have greater impact XXXX XXXX?

Brad Barber

for CapEx don’t will of will change get a want holds I Well, have QX is record. vast QX. going CapEx me, pretty it the the CapEx will in was year year, excuse going certainly of and we a is in majority the QX majority comes by the bring impact, our record, come year we lead guided the take the in this because the quarter, that of high That business. traditional to to has the QX, remainder that on you of QX in believe but impact QX. are to and we but in That second case. but for is been business typically not will greater level our that typical not what the XXXX for majority remaining your full the gross will a It to QX, be year. just far

we some benefit are and next going this year, of greater impact impact we to will full get year course So, some get but year.

Steven Ramsey

to environment stay pressure has do the incremental half or the similar one of you been? this Basically, get it XXXX? more year last and then me any rate times as topic. on appears as number And expect larger rental It next OEMs, over a improving the early companies you second are rate few of Helpful. as quarters, the can a delivered expect delivery in for Okay. from do favorable orders

Brad Barber

increased John, it We is seven-tenths today. we comments as go-forward stable of on going reported a of remain a X.X%. you as it pricing, sequentially, on kind QX fully do I have I think any is percent in pricing to just basis? expect

John Engquist

do the third Yes, last Steve. not at basis, fourth more as On now, year. go-forward expect in sequential we and the quarter rate levels a same improvement

improvement do with QX Going do the What last back are going and QX We impact at same round into see a quarter quarters. to sequential to more consistent second rate from an year, typical that comfortable be next season rate but the about third uptick we're those quarter is two sequential on out to X.X%. we not levels. expect we then for our was seasonal improvement expect

Steven Ramsey

Excellent thank you.

Operator

Thank you and Weber Seth with go question from next ahead. our Fargo. comes today Wells Please

Unidentified Analyst

Hi guys Stavitzky this on taking morning morning. good [Ph] Seth Larry my Thanks is for questions. for this

to is I gross So know function it or project go Is the CapEx greater equipment a more the it from availability activity? wanted OEMs back raise. to availability of you

Brad Barber

the and check wouldn't take that's so projects check. Well absolutely of of CapEx we so concerns mole we no there projects continuation the emerging about fundamentally basis. typical activity fundamental big that more a or with traditional more our box these large continuation project the have We

raise think were XXXX. I to to last product CapEx CapEx enough it three about to to a I'm the guidance, impact handful the pertains guidance when support on manufacturers we ability As our our forced again Larry, very had of a reduce year speaking of our large secure

to I've team. our when more to saying calling us were with you meeting to who is to That's that it do have decided was and down year want with was and time guide, million that overstate believe a the we $XXX up been to we As very letting on and want will with lead the as fundamentals up the that ensure there internal that expected year produce knowing pleased ensure the they're X it? to this going again Well very that with product. the now behind you are pleased got we not we showing to case. partners ends comfortable to you I entered this to had no of the we product they're needed wouldn't product did of that as CapEx manufacturer we're not I'm with this expectations. us these tell in us one with, the with XX half our X we and ability we're deploy raise partnered this can I've we how just time and both market strategic on do manufacturers bring purchases we

Unidentified Analyst

type you're Thank guess what fleet I of that. -- fleet. great. adding what fleet are what Okay you adding that you is for And the just the what additional

Brad Barber

come the our It's come on typical, year. investment, nothing there will unique percent mixed in so mix the a the the It for current unique has there's that hours in fits typical nothing about into or squarely of of of remainder on a standpoint. product

Unidentified Analyst

guys, a Got it. lot it. appreciate Thanks

Brad Barber

Thank you Larry.

Operator

B. our And question Alex next Riley go with you. today from Rygiel ahead. Please comes Thank Securities.

Alex Rygiel

quarter. Good here. morning nice and very Few questions

south a west your seems below gross talk First, that in due gross profit can expand suspected plans you branch limited profit in count. that maybe a of to to bit national the about your branches and number average to improve territory

Brad Barber

percent at suspect more Obviously you’re how a or that's but of product I a may so looking basis. just is it's indicative and invested what percent the OEC you're all not of just count those unique at they revenues be. that's size very of to well. speaking of represented gross we gross locations It about particular locations that's margin a in just vary locations those the Alex it's XXX the a and of just the big performed quality profit derive

Alex Rygiel

seeing some the profits Sorry or about utilization strength outliers identify you anything can sort of either across nature? But regions that. gross some upon you're trends or of in regional also that that obvious expand of or

Brad Barber

of question There the position that's no beauty in. we're right. are outliers, the great Yes,

these across a Now when single particular we may if leading every at is get to a the look so granular and in or But improvements, across flattish nothing we aggregated It's level. something improvements, to geography out I you that. specific groups achieving there strength really everyone everyone mean could is that location nice guess, better incrementally be achieving like about that just picture to running utilization to if I one to product strong, we board in rate rate call want we get are returns. is the want which traditional talk board. is utilization

Alex Rygiel

Great. Thank you.

Brad Barber

you. Thank

Operator

Instructions] Stanley Our comes Please Stifel. go question [Operator next with Elliott from ahead.

Stanley Elliott

morning terms XX going the year? in at the How things you and On lines. growth Thank an question. a bumped a think legwork you amount up store real of end of we an When of XX. low everyone. good next similar we for of I to you would have strategy locations, in terms kind bit along do into imagine Hey like it the little estate there's Should those organic expect sort to commitments? that? should make about those of

Brad Barber

facilities, Stanley, and good a have you. biggest Yes to morning with we I it's are the entering market. mean product. Facilities hurdle people,

With start people from again these big of the lead far train there window a start still to and with six-month exceptions. six-month are times kind about a are one. manufacturer warm the a few normal. with Most for window from lead we times isolated And locations. expand onboard generally and the manufacturer, need facilities People,

periods As in prepared the time. extended comments, her Leslie be mentioned only markets we going to for to best plan of we're

that doing some me located, in actually but properly come. just so cases or And XXXX, for decades excuse XXXX not XXXX to we're built-to-suits or ensure to we're

So yes. answer broader the is the question,

and low cost, state and with tremendous low returns. go-forward us to XX locations as we very fully if to basis. high expect produce risk, know These to are add should footprint You our on XX XX our up, expand current ramp And continue that ability a you to so opportunity our elect, density. absolutely density, have we see And to exists.

Stanley Elliott

there I the organic that M&A of kind if of seeing Is you're on? opportunities planning there, growth guess, it you fair assume, maybe a environment, little what can about still talk the terms up out you're ranks to in that bit

Brad Barber

them the Many simply look maybe quarter It acquisition. that's the times we When up of rank. right part our be opportunities of not overpay end an now. next does for I you M&A, will the age acquisition We'll calculation and for investment. we're I the quality talking fleet, working next can the at the working tell we we all think about of fleet, quarter.

We the two, I have forward a three, within that we one, can would our or to adds disruption of they're our seen that. just love a deals to we say is acquisitions little And opportunistic growth. the to dedicated I it and than because four to no business our to out that's point to going and more year team digest there. truth with a focus have do have to be expect But some

hope to to tuck-in one, price and fair our we a paid So can is year about feel good two we acquisitions one see and you it perfect up interim. levels. at seen, businesses the the poorly invested poorly to do us run at in end participate We're We going upon those a you know frustrated kind of some of when levels at. or we've transact not

Stanley Elliott

of point then clarification. just of kind lastly, And

improvement of sequential piece, through In think balance kind the year. of guys you about the terms of I the talked rate

year? kind talked kind basis, we what like prior kind me, we market's than year-over-year you it about I that? higher Could a be the digit increase. might still price end sort of where is calls right of curious Just a Is think on maybe on think up that, or mid-single on a telling pardon of now. of we the that

John Engquist

Yes, Stanley, I'll take that.

much comps to comfortable the to say. a second in, rate by going going percentage in say for for I'm fourth sets X-ish range I for year? exit as for or increase the an we're with So, feel something, exit the I digits quarter, mean for We and earlier, said the somewhere half. seasonality quarter that rate. you what sequential But full should the feel the after X% the in hopefully, something third tougher mid-single in second comfortable

Brad Barber

that of our to me the quarter as our improving impressive have second in if Yes. sit XX% rates rental quarter here today. let an started of we XXXX, add the second XXXX. rates Since could. Stanley, I We rental we increased

don't are I to indication an softening rates want not give that So, that's anyone because case. the

You should produce price improvements going consistent forward. us see incremental expect to

And can I the improvement there is out with of there the we leading That said, that XX% feel XXXX. at. that certain price since chip away second we're industry only being market very a quarter

reaching going one quarters. where rate. as last you the said, we're gains to the when against get percent a from XXXX. contest continue may these two X-ish John that try be we're we're So But to fantastic you have weight And exit can to carrying calculate the And case. number incremental all point that's we as

Stanley Elliott

have guys luck. great for much Yes job. so time Thanks and no the absolutely best you done a of

Brad Barber

Stanley. you Thank

Operator

Thank you.

ISI. next Oliver comes go Our Evercore Please from ahead. question with Liao

David Raso

the time time obviously how how of spirit bigger at above which was X%, heard XX% just kind year, always thinking case you're exit time happens something from that level Raso but this Hi rates. just against to dramatic for about I'm it rate this start quarter, is curious you it going of of thinking your you a obviously actually is the comment you just from where you give time Evercore. the end a very history obviously sense getting time the the improvement the about Unless quarter last the balance about that David and how some last a question upper about [Indiscernible] that year year base a in the is into is unique. to as is conversation well us XXs. Hi quick traditional for I every you're still quarter picture of influencing versus CapEx quarter. of you of And question seasonal up the fourth think the Can be was appears next

the view to high of trying you time rate? you. next sense a XXs year you how get a versus Thank balancing CapEx going in Just

Brad Barber

focussed or traditionally higher of it folks time. David on and focus industry. XX-year H&E on we is always positively. you the have XXXX more question. obviously I XXXX in do physical highest to lot for thank view look a the utilization window We a of better mean of ran has the

to a other return. a going dollar if Our that changed for be not ourselves manage on complexion attributes typical year, the over and which backside comfortable more mix exiting easier are waited the four to. next our has entry carries product earth levels job, it also are first year utilization question higher is the We've this the enthusiasm the little physical dampen a a there not. It's last to years. lower at physical you we will substantially three, really need yet nice and utilization But moving, to will when fleet

if here our look we to the enter XXXX the sit we year we match numbers for enthusiasm achieve going there's and forward the enthusiastic to that. today very momentum CapEx and fully will are expect and and achieve We shift as balance of we're with a unless

David Raso

at is if you still historically to say you at if similar that starting little that I'm little CapEx fair think the XXXX next it you turn with a you year, Is rate. to general can to trade what that's represent level degree that to minimum time with next base raise you a of time trying the for but fair it the there's Well high you demands balance is right a or more of would CapEx off said science level case get level a a year a I'm get and always some rate is at year and exiting year. and that a comfort appear you're least still time at thoughts and little a art on when least little way the and that's it,

Brad Barber

then to to continue that we'll business. window talk raise XXXX. to to of expect for invest on we XXXX. rental you better here if a narrow comfortable going time that get is CapEx exist rate and really when I our that we not our rental fundamentals we and about doing we CapEx that continue start we I'm that what grow to we're talking stating type is utilization have we're can Yes about for And of expect and What or clearly tell do

David Raso

Thank so I appreciate much question. for that. the you

Brad Barber

you. Thank

Operator

you. Thank to Jeff ladies and remarks. And and I our gentlemen, Chastain would this any for session. question turn closing over back the conference concludes answer

Jeff Chastain

and everyone today's your Rocco forward We'll interest today. you us day again your appreciate conclude look the to time H&E. taking we We assistance to call and Good join we Okay. everyone. today continued updating and appreciate in

Operator

attending This you thank you today's all Thank for call. today's sir. concludes conference We presentation.

disconnect day. a have your now and lines may You wonderful

H&E Equipment Services (HEES) 27 Jul 232023 Q2 Earnings call transcript