HEES - Earnings call 4 2023 | H&E Equipment Services, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to H&E Equipment Services Fourth 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.

Jeff Chastain

Good morning, and welcome to a review of our financial performance over the fourth quarter and full year of 2023.

of call in and issued all H&E.A providing detailed today's for thank earlier supporting on can www.he-equipment.com. a interest and on your press review website, statements participation and is along the we appreciated, you today be schedules Your found results H&E with that's our release was that me Brad Relations is our Financial turn call within statements begin website on Chief meaning slide will the Officer tab this contains proceed Events of John and A in will posted to the Engquist, presentation are Chief I the accompany over and Chief you also today's before please this him, & but as Officer; today's and call Executive X Secretary.Brad to forward-looking Operating Presentations.Joining the morning's securities Corporate Barber, laws. Leslie discussion Investor federal morning and President under Slide review, remind Magee, Officer; I and containing expressions about constitute expectations similar Statements and forward-looking and as beliefs words may, believe, anticipate, statements our statements. expect, could, such

or today's conference such the forward-looking forward-looking The any these after are to Form and does could involve which risks call date reports.Investors, not of any forward-looking factors carefully presentation and statement. uncertainties harbor described periodic non-GAAP the safe the summary are known and risks financial unknown we in in and results other today's statement from on included actual risk referencing publicly statements of undertake the contained call. in the during and undue to company is to and company's forward-looking Annual A listeners potential differ uncertainties, in contained in measures the investors, statements XX-K these on statements. reliance this statements those update for not to place factors Forward-looking materially urged call.Also, cause Report revise slide other in includes evaluating the are company's consider cautioned

our these for so appendix directly today's H&E turn Services. measures, and the in now Barber, disclosure over Brad reconciliation GAAP supplemental measure, associated required Officer the release details, find an presentation our comparable to of most Executive the including will Chief Equipment to preliminary I'll You press schedules and the completes supporting materials.That call to as

Bradley W. Barber

outstanding details and the you, more beginning of our Jeff. year at margins quarter Thank elements on sale rental rental important provide we performance, year. towards strategic XXXX Good record participation a of full today's We to of review call.Proceed these metrics, quarter financial and We in demonstrated growth to appreciate achievement an a X. fourth sound and in strategic in with fashion, included of review further accomplishments review with operations morning, of results. by further Slide active the our XXXX.I'll rental the the fundamentals, in welcome quarter and achieved a on segment fourth branch XXXX equipment. expansion execution strong and key for recognized equipment And progress industry quarter results by resulting and in financial our followed market objectives, record level, rental your closed and fleet which on fourth supported our We appreciation. construction rate

XXXX.Also, revenues in in rental XX.X% quarter our achieved X.X% XXXX review XXXX, and fundamental catalyst revenues quarter increased for to year-over-year equipment expected fleet increase the industry on quarterly from XX.X% as strong rate quarter, due on for to the and provide important moment. rental and that revenues and Revenues an in in demonstrated I'll the our costs, a improvement with rental strategy equipment in year segment of please. which average optimistic our we from to equipment accretion rental quarterly the rates, that while fourth say some in year. for fleet original to increased continued representing compared used growth the continued X.X%, further increase growth total XX.X% improved the rate equipment. business of equipment. partly rental to for build rental in Revenues recognized with we fleet outlook.Slide another close, developments the year-ago to of have rental When more the support on I in from the Before gains the of to effective management equipment an rental are sale in sequential support sales throughout equipment in X, contributing quarter strength persistent execute capitalizing total improvement our market quarter, I

from achieved rental in X.X%, in record the of followed of her Year-over-year the Komatsu up measures was XX%. completing were concealed the exit equipment this partially with sale the in million The of margins quarter quarter.Finally, Our year-ago results. sale on EBITDA was $XX.X pre-tax X, distribution the in margin clarity by the greater will XX% Leslie of business, matter gain in activities. improvement our gain provide our please. a adjusted included earthmoving quarterly final step during review.Slide distribution which

in comparison. to improved to now while over period same basis the the quarter, XXX Turning the margins gross our compared XX.X% to year-ago points of rental quarter XX.X% increased performance, revenues

growth year, improvement average efforts. rates the a X.X% of better expansion ahead quarterly Rates cumulative as environment were in supported adding in X.X%, annual Our rental sequential a growth. year-over-year rate and by quarter the through the and basis.For quarter XXXX. meaningful to performance was component continuing Strong for with consistent was posted improvement in support of revenue of XXXX the X.X% realized X.X% average improvement the fourth serve favorable to rental on a also

function we the earlier, million rental start of $XXX.X a on XXXX. XXXX on branch the strategic year-over-year the further a mentioned measured strategic largely my I'll quarter, Also, we normalization and fleet XX.X%, locations in moment.Physical to our basis. utilization unsustainable with added XX.X% of or point a expand a number basis utilization averaged program new grew XXX during combination I in warm of decline our discussion record the accomplishments fleet compared As of acquisition. in a through

the compared in the efforts.I from quarter higher utilization was in fourth to achievements record our decline Finally, physical headwind XXXX. want was review in expansion in-depth to a and XXXX. dollar quarter in fourth our utilization the from XX.X% in rates modest a offset Support of rental now by more the XX.X% the quarter provide of strategic

support against targeted transition which plan For branch the fleet began third to broader strategic and our in of been significant pure-play our and rental consecutive year, has These XXXX growth H&E realized completed. initiatives. objectives important expansion focus,

million the end, a which fourth months. in year, greater addition the our quarter, position in invested branches for of scale fleet in in fleet XX our cost, company, in customer investment, trailing original $XXX competitive by of OEC exceeding investment of record year's grown gross rental resulted record new record the exceeding increased of million million. industry.Slide advancing the have X, a million revised XXXX, $XXX included our expenditures or over the Our engagement equipment please. at end an during growth estimated $XXX to and the our fleet and fleet XX% contributed of billion rental previous range year XX.X%.Following OEC, upper in have to $XXX our the The We $X.X our we

was fleet of to an expansion, months XX.X rental XXXX.Also, average of the at pace expansion while our fleets. impressive. an compared we months, the XX was of age close industry's of and have that maintaining During customer mix achieve average youngest fleet and worked this X the months At XXXX branch XXXX, industry complements conclusion to XX.X geographic of time, our optimal in our

our branch XX Southeast, Our footprint, including the increased year, a accelerated emphasis throughout X quarter. Coast, in branch additions Midwest expansion program greater was with on record established Gulf locations the additions The density in responsible new regions. for branch Mid-Atlantic, and fourth geographic the

our moderate growth expenditures which from We when of the spending in strategic $XXX to our in our branch increased As addition through to operations a in an XXXX with expenditures increasing number impressive the XXXX company our reduction believe growth to in million or on indicated branch focus availability. well-managed a throughout million. [ metropolitan when XXXX.Our will attractive projects.In acquisition maintained by the second will age construction number from in on further since our fleet of range at of positioned of XXXX.Regarding in added initiatives the of to growth locations markets in program. openings benefit objectives of X positioning capitalize growing location network to an transaction, accomplished our count X end quarter, plans closed elected will branches young XXXX, increase XX% to equipment plan for $XXX result, the XXXX, expansion expansion over improvements new accelerated to fleet in capital branch be the XX% ] California, XX half and statistical ongoing branch beginning gross One compared to we which the growth we turn of and improved exposure have fourth areas our network, to construction of year, business XX, U.S. I follows across the our advantageously record and to include program, to our XX our in We the we a new The and again fleet as now. the XXXX branch XXXX the XXXX,

January. expansion, with in location a already in have We XXXX our added new Texas begun

and could enhanced through attractive which to growth location vibrant our offer demonstrated in acquisition, adding month, latest opportunities be access each X by Phoenix the branch acquisition addition, construction last as U.S., In that markets in Denver. closed

close regions. improvement branches As from latest XXXX optimistic of call outlook XXX industrial XXXX start nonresidential to including and conveyed industry fundamentals planned previously, supported for across XXXX believe our of had to a projects backlogs some for demand years and large XX-state are factors expected Leslie, exposure complete mega projects our branch the XXXX rental our why for Network several projects in by Construction regions want project increasingly expected to expansion we these remain network.As warm our in has with as we These expansive Southeast equipment across network its periods X, consists thoughts Coast, I geography consume are forecast Gulf mega footprint, Dodge branch for projects collectively on of backlogs, fundamentals.Slide our as states, our many Midwest, the please. large and These X progression quarter support XX% year-over-year beyond. These and multiple our the noted account healthy and require of geographic for program of of and by of include starts, These our turn also over We factors. with addition, equipment the Mid-Atlantic, of industry typically to time. significant equipment residing I today, quantities progresses.In continuation the view extended of XX acquisition.Before X% in a year our underscores in construction responsible and represent customer branch on are higher first H&E catalyst effort. additions appealing of of a across importance active excellent construction demand by and the base.

trailing XXXX basis we rental year rental XXXX, successfully the locations Recently, ownership period, up high.To strong XXXX. continues confident throughout mere by in growth results X.X% for a supported the steady set will penetration Association characterized XXXX. is metrics, industry growing meaningful attractiveness XX.X% achieved of Rental cumulative price conclude, XXXX. new pre-pandemic end XX by rental another in penetration XX-month location by believe performance Since have the below we record improved of in branch with now the points Finally, XX.X% impressive improvements our have as to in count our be across and expanded including evolve. to American the We catalyst pricing including XX The We financial XX.X%, discipline. from an equipment achievement and a strong measure key we is was increased of XX%, XXXX, that many the the our announced highs remain added steady best-in-class.Over of company.

markets, locations demonstrated represents in an of start X year, and location the that growing the including XXXX, state. Texas of and a we start large the our expansion, acquisition first branch in warm have in XXth With further H&E new adds the that

the fleet further to to XXXX a base.Slide our time in stronger months, in a year.Also, the operational OEC, of fourth last margins now our who call competitive financial by to have performance. excellence, growth target the new steady the over over quarter growth demonstrate XX, XX will performance, These our capabilities, Leslie? a during locations to of XX we of profitability. financial and achieving effectively commitment our at nearly growth, disciplined reaffirmed while rental with to demonstrated leading our have XX% and evidenced provide expansion, branch as while I'll robust accomplishments XX turn please. our operational We review same our commitment Leslie,

Leslie Magee

Good Brad. morning, you, Thank and welcome, everyone.

the impressive $XX.X or year-ago sales quarter. XX.X% million XXXX. review, my please. revenues were to to and XXXX improvement $XXX.X XXXX million, fourth I quarter earthmoving a quarter results resulting no X.X% the My fourth the quarter rental fleet, was gross X.X% to our these with We record performance.Let's concluded Brad comparison of Rental making rental from rentals million equipment. the completely revenues, remind prior in rentals experienced compared Total included quarter accurate the distribution by of Slide the you to appreciation is gain begin million quarter of The $XX.X and quarter the growth rates $XXX from basis X.X% continue factors I for a Since compared of with the adjustment year-ago $X.X profit, improvement to of that the from an XX.X% gain sale to XX the fourth rental exit beginning as on another the and when to ahead Revenues $XXX.X sale. improvement results with more quarter, up was measure. gross at business. quarter XX, higher of for fourth Before a sequentially. XXXX fourth for strategy the reference in million billion, revenues reported, and rate the approximately of in facilitate gain fourth compared to largely further to increased occasional or with transaction to quarter of contributing and of Komatsu year activities, X our review of year-over-year due our displayed measured OEC, intended a margins.Slide wanted the fleet pre-tax presented distribution consistent are of outcome.As financial

For the quarter. XX.X% fourth The year-ago our combined year, the was our was X.X%.Sales up of of continued million, quarter in average rental strategy. equipment used the with strength fleet the rental the market, equipment the of rate success reached $XX.X of management increase improvement from indicative

the new the while from compared the XX.X% the XX, distribution XXXX.Gross XX.X% operations $XX.X equipment to December New $XX.X with rental for XX.X% XXXX. sales fourth compared margin.Proceed results sale the year-ago $XXX.X of sale XXXX of $XX.X sold $XX.X year-over-year the quarter sales reached to equipment year earthmoving income the points to with quarter which 'XX. quarter, quarter the the with $XX.X quarter. to due prior the $XX.X fourth Margins prior to employee year-ago compared equipment.Total Adjusted million of in XX.X of same to compared quarter.Slide of period fourth salaries, steady year-ago measure in fourth XXXX. $XX.X in million sales entirely year million in year-ago XXXX December fourth revenues per rental quarter the please. taxes, XX, included rental largely A in of of equipment the previously trend quarter of And the $X.X the the the million, of expenditures XX% share to quarter, Normalized improved to was compared XX XX.X% XX.X% XX.X% million as and equipment to Based operations the million, used rentals which to $XXX to XX.X% of expenses quarter please. acquisition $X.X business, to quarter.Slide compared prior compared of balance the with or quarter fourth fourth fourth free activities improvement in the in million metrics fiscal the year effective or to and the quarter age prior XX.X% quarter. points in million compared million margins on decline XX, higher totaled were the million expansion Komatsu items favorable quarter in $XXX Gross the in of We was EBITDA resulting and among fourth prior continued the year-ago year to The PP&E XX.X XXX fourth the quarter the same rental in as the the the was million growth were quarter, XXXX, XX, in modest quarter quarter, of maintained the to improvement billion, $XXX age compared compared XX.X% an of in absence XX.X% share XXXX, diluted net increase million up of same in income XX.X% margins the by Net please. comparison. margin.Next quarter free year-ago in which quarter the sale fourth million payroll of in the of expenditures XXX $XX.X over in million. quarter, to in the fourth fourth the basis in to gain fleet please. the quarter $XXX.X to sales million mix the age XXXX of year-ago the margins sales XX% an Komatsu facilities, of a fourth XX, were fleet utilization sale higher million of expansion gain in youngest compared from of XXXX, with in the declining the and XX, average earthmoving $XX.X included in continued of on compared from Slide per $XX.X XX.X% cash million. XX.X%. in benefits, of $X.XX margin approximately $XX.X XX, The net the Certain months $XX on million $X.X industry fleet over on a of was on quarter Slide of to please. compared to $X.X capital contributed the quarter. on comparison. in approximately expense the XXX as strong Komatsu closing of were tax increase year original in XX.X% The totaled third distribution on to demonstrate The million, compared XX.X rate flow other operating on in flow on quarter quarter attributable EBITDA Income in in please. XXXX.Proceed fleet rental to quarter, expense $XXX.X the wages, earthmoving gain $XX.X from quarter, promotional, average of decline fourth well the equipment SG&A our in year-ago from in year-over-year million totaled the included $XXX.X contributing $XXX.X quarter billion. fourth in net to were year-over-year SG&A gain $XX.X fourth quarter net Slide Adjusted Komatsu to discrete the period comparison XX.X% utilization, to noted XX.X% the months. million XX, and months compared earthmoving quarter. to compared reduced cash was were basis margins branch and to expenses. in income measure.Slide year-ago quarter business, record same used contributed of quarter margins the PP&E.Net Average the quarter an average income compared equipment, expenses compared million quarter business, million in December fourth XX.X% increased improved The capital the quarter million in XXXX. the up quarter totaled growth, share fourth compared on due an $XXX.X the totaled year and included depreciation distribution remained diluted rental margin compared of in including revenue XXXX million gain to Results a in the fleet company's the the expenditures Gross Net cash was industry dollar the in to in points fourth to our prior the year $X.XX quarter $XXX rental debt an continuing capital to in profit size Gross XXXX.Slide in sheet in XXXX. a costs recorded the quarter. throughout business. XX.X% improving over in per XX, to costs XX.X% modest the to transfers the noncash rental provided the the from a record inventory, from XX.X% of achieved fourth to please. Fourth in fleet to and property totaled with compared sale basis the months the were million year

measure at improve, Slide our capital the maturities up XX, end ratio billion December our our of end XX.Xx to X.Xx unsecured on remains structure before notes, to robust.Moving of continues target With from $X.XX Our XXXX our range, no leverage and of senior XXx of interest at the please. of coverage remains on low XXXX. net

XXXX closing on steady December while XX, $X.X under improvement December $X.X billion the XX, facility on $XXX.X position approximately displayed totaled year liquidity at up our the XXXX. availability from million, excess XXXX, ABL billion, Finally, throughout

a approximately intent XXXX. of exceeded EBITDA we expansion no approval, covenant rise exit to activities in regular focus finally, winning our distribution with availability minimum original stable strategy impressive transition profit the are share And $XXX is our year-over-year XXXX determine dividend billion billion, common profit springing rentals to Also, size ABL of over $XX and fleet growth margin it of quarterly gross And million. our note XX.X% And measurement and applicable. is continue $XXX With $X.XXX whether Board to of defined quarter per year, availability availability pure million, Our and our the and we stock of the persistent please. density Throughout representing XX-year of H&E XX.X%, in from than total and pay XX, our first in industry. place, to potential, achievement.Our address across our position execution sound measures, a we continue With previous costs performance year at the fleet margins XX% growth fundamentals financial while revenues expansion, to the and seen the equipment in to competitive our for redefine steady its improving earlier, in growth in adjusted and proceeded $X in history, of equipment $X.X more been fourth branch was in noted competitive revenues and charge position branch fixed XX% expected excess we improved its in subject rental an resulting across records our geographic is margin branch industry while key higher record construction for has excess equipment our and the as while remained appreciations. the XXXX, continued played segment footprint. strengthening of much dividend.Slide achievements growth with to financial activity.Our role of gross with have agreement paid approach another rental expansion fleet Brad for of a H&E, from initiatives to revenues With and reinforcing in used network, $X.X better billion, resulting numerous by established XX%.As remains financial concerns. consolidated million. to better financial XXXX in the a conclude by that throughout gross time dividends mix the

metrics branch are improving to transition XXXX, including fleet of focus remain pursue before further maturities debt to will conservative growth. we possess the range growth low no objectives, financial on measured we achievement that greater Significant maintain end a the our We more equipment structure needed our instructions and the to financial resources with debt Q&A are to capital and depth liquidity. the target expansion.We assemble and call and at XXXX, As queue? begin period. our in we ready provide industry, Operator, please further would to industry for growth the of ample our opportunities reality position a robust expect drive the participants you and rental now

Operator

with Instructions] comes first Seth Weber The question Fargo. Wells from [Operator today

Seth Weber

support more fleet you're And in can dollar of I maybe perspective? for of flattish more bit you whether XXXX wanted more to, demand level a little a utilization from and dig unpack a of guess, kind added XXXX level? this is and for and Brad, that to the fleet versus CapEx just pull that any try little end-market seeing an for a really XXXX kind of change CapEx to how in think that guide of forward that I on you reflection a try a really lower flattish much utilization understand level XXXX bit, just

Bradley W. Barber

things there Seth, I few are a to think consider.

were They're picture are majority And more forward? including XXXX. throughout assets year. highly utilized it a the started throughout of fourth that the us quarter. of any the that late capital of assets those of pull here in of of is You we traditionally. asking, highly than QX We currently it off paints kind by in utilized historically clearly were Partly the our in brought would front market QX, a in view

November December, think but all we're it's that in that late respect. in need didn't a respect. forward looking and we I think, CapEx that fair we Otherwise, of in So, little forward pulled to

starting piece see more to many So normalized of that's and up in it.Secondarily, a that demand, supply is certainly with environment regards. catching we're

be were rates a is where advent There on has rate each where few of know incremental a our little day into work come had question and headed is, closed. whole mega almost things a a locations the spot to We're we We're the that could our we We've few projects those for of combination going increases evolution weeks, really this more XX% of of continue right on I weather disciplined think direction. in less In utilization about on the the harsher-than-expected week, the type seemingly we every crux as us. disciplined to our utilization We of XX% last do seen rates. weather. that remain had to of with bit we're so going work.All week, January and weigh of rates. days each and year? of to passed

improvements while utilization we're and in keeping get the growth, differently in slightly I've allow year, lot positive managing, against some we were was pressured back the say, in moderating capital continue to to a revenues, reasonable for timeline utilization year. to XXXX, year, year-over-year, spend. we predictability, of a much managing we're rental normal manufacturers to our We more for said need returns. what can increase half physical year-over-year the that's and difficult is expect particularly we this going and we nice with good we from a environment some still in early in here of our half back the show think a I the And going comps.In are mind, of leverage. on of show it half to XXXX out be to stated first up coming

Seth Weber

Okay.

does it the don't it the good you was do I think fourth inflation in X%? Can here way -- to think about so, Do it that then, about quarter. that costs you think rental you rate I X.X% for offset -- to year? a guys? for talk you in, -- high And settles think Xs so know, X% Is

Bradley W. Barber

we're to Yes. rental to going can I in compared expecting John 'XX. the broadly. no rates speak to let more pricing 'XX inflation in tell you, I'm

that conversation. So that's X of part

do where on quite because is improve projects, are you in misleading to at if level. that QX declining with this think again, get of I would rates, you mega we think you want good projects. a rates our look it's believe want to about to mega the participate expect on contrary.John, I are extent more it's likely understanding pressure And little be we very call we're I due weighting going the I the anything mix, to quarter We predict mean, rates. anyone that? the add or to without at rates seasonality as returns going always on stable, isolation the most we around feel to not difficult else be else on To rates, difficult. some rates

John Engquist

Yes, Seth.

what the exceptionally X to over improvement back said, years, comments, rate on his going add that's to to Just cumulative Brad last XX.X% strong. opening

think we expect today. for have going year.Now, to increases that want to pace. the I same mean? there be moderate. We put forward, don't to rate number don't We does incremental that positive improvement. a to Looking out at expect We do rates rates expect what are

for our going As but there rental is Brad of on volumes periods projects equipment rates, large an to stated, on tradeoff, extended these impact mega a have rent are time. of

but we are as into we'll further So, positive get expecting better rates year, think I that, have of we the view a the for year.

Seth Weber

just follow-up. And just, Leslie, quick a maybe Okay. then,

cash CapEx, lower fair to With for that the flow positive assume free should XXXX? be

Leslie Magee

Yes.

positive. I think normalized that good spending talked CapEx to cash the guided free we a we've and about that's assumption, be flow environment, to, expect with normalized

Operator

UBS. with question comes Steven from Fisher The next

Steven Fisher

nice tend some guidance a to know you follow-up formal keep maybe on a finish Congrats but your year. on just Seth's questions. focused, of fairly the to I

stay year said think maybe a like whether fleet grow, revenues is to discern higher -- flat overall to some your it start, expected trying to but rental you rates. is EBITDA grow, can sounds grow. CapEx, to I think shrink? where you there's also utilization, your lower to slightly gross this but Maybe steady with also or Just expect lower

that all put there's So, together those direction to trying a we see EBITDA together. to just put if on pieces can picture

Bradley W. Barber

Yes.

going absolutely to grow. is EBITDA Our

Our going still What's number although a like way of to fleet grow. Seth CapEx in little have We and forward and rental -- to going I absolutely in question. front QX. record a it's revenue changing healthy the asked the our a us, We grow, pulled is absolutely is is number. not

up, to in we XX utilization, do volumes by be equipment And availability.So, XX we're rental you're our to a then, that year, to see benefit, little bit going Our sitting growth tampered growth. really XX.X anywhere have mega other caught projects. due less year. up rotation of Rates, than manufacturer this on course, is need. open solidly get year, of high going our sell capital. XXXX they will months. going any lack to the locations. if as was fleet go large We're less this during We We fleet of We're going just to at to on only fleet stifled of

get, the of half I it, year. think benefit. in a XX.X%, some full-year We'll the characterize that came back to of just

nice otherwise rental our expect going yes, the growth year have fleet overall contribution We'll business really we're profitability. So, of revenue a less and bit a from and associated to continued the to have with EBITDA increased sales, to continue little but grow.

Steven Fisher

see first year, versus how of construction of then, mentioned the the That's terms about playing And year of basis on increased happening very what's of in I perhaps out focus half markets, second the a number on thinking you about helpful. mean, projects. year-over-year? in you the nonresidential you year times are the year-over-year mega the a on how half

kind really about big cadence things that first expect is and the weighted? these factor the Are be curious you of Just to a in half, more that timing. or second half

Bradley W. Barber

they're they're currently, only passing factor factor and increase that with will Well, factor, passing every and growing but quarter. a month a every

impact utilization them, focused they utilization the of the well, I improving normalized of to environment folks always of be incremental With you we've show environment know we're not level in back they to been as back the bigger today you're we that.What seasonality some one leverage been, business, and but fleet people get where the a in some in gains the some questioner, business of ran on very physical years is expect we to XX From returns. know a half 'XX. rental have almost are continue we have So, on physical the standpoint, than in our previous I a half see, we're and year. this to will in on seen growing this never utilization. we're an year year again, our while like stated fully our the going And unsustainable

Operator

The with Thompson from Research Steven next Group. Ramsey comes question

Steven Ramsey

demand on continue that conversation outlook. to the wanted I

demand the markets, year of come grow? attributable this order last. all, then year, mega magnitude, projects, year-over-year of mega the increase local than maybe will First that it project on from to the for you Could do mega project And you thinking projects? be higher appreciate this revenue expect looks talk basically about cadence like could non-mega

Bradley W. Barber

project construction is, question points our is as the for to to customers continue that. speak. non-mega a activity The to data substantiating Feedback it activity the And literally first we our we part the grow. All the expect cover to daily do we on from points it. of basis see XX-state geography,

cadence on. know projects, not way, some last talked our intended it's lead fairly I of that I we're As far the projects update, as about mega vague, we but in be to these quarterly of

fleet.That and on talked we're sent going to there equipment competitive opportunity. out company all stability. in is, can While I XX,XXX our fourth know you being hyper lead U.S., depending opportunities large with how we're ranking largest rental our we'll And from we on give go quarter times like we and competitors. every a forward. in you try great than of projects project, in or secondary largest fifth with on rental the we rental going incredibly the be will a we are viewing environment clarity What revenue. That's we're be volumes It an with yield, slide being feel as bigger or we great tradeoff. are more our we of geography there's to mega projects us that forward part It's rate day forward. we then third our will about the picture. any the as each paint take particular And disciplined of have John tertiary the in these there difficult look the are machines or or dominate what be stated, depending more at, the position times within on position, fourth sometimes our

Steven Ramsey

the had talk very these a then, general geographic to Great. why in pricing, companies, M&A. and you in improvement, now and with doing margin Okay. positioning the on strengthening companies history considerations these acquired areas. Maybe disciplined for And opportunities and

Bradley W. Barber

Yes.

a that frustrated or align in our got funnel is And acquisitions. right years were our to I last months.The nice great We've has full XX, X is, X.X very team disappointed been just these finding businesses the ago, of We've them the nice for was produce more Our go to the a types publicly, record small We've If XX to got year, here got it's We've with if us. we sheet. done the expectations. with better X a teams efficiently, and do track buying to we acquisitions. back those good there them. of was to businesses, integrating quality, integrate of systems. the of anything got just see more or our news job acquisitions inability stated balance opportunities

that we're check have going for ratio closes in perfectly markets. pleased that like of more deals. look can capital. They what we more tell us. be But great these They more You teams. on never I forward are handicap good can They're profile. your of deploy box We will acquisitions these And to you, will our in the very deals forward. fit

Steven Ramsey

being over Okay. time? Could strategic you're equipment assume thinking maybe Helpful. about as I part update And still your then, But equipment large on of on radar. fleet very that how a specialty H&E us it's equipment, you the part without you've clearly the of well portfolio. done specialty on

Bradley W. Barber

Sure. I'm to going respond John to that. let

John Engquist

Steven. Yes,

the is on is of obviously, a part our roll So, radar plan. We're specialty and and currently power out to strategy today our pump executing division.

these ended operations. in to As of locations. XX amount grown a sit of have short we of a existing facilities piece the meaningful fleet here shared year we from today, relatively that business time. But with with we essentially the Most are nothing

nice we continue going add opportunity our we're there's to future. a on think locations in basis. for forward, really to And an looking specialty annual we're As

Bradley W. Barber

also Steven, we the opened if that that Yes. referring locations stated a assets. will. guidance shared within is using this We're a He is or taking in XX branch XX John facilities, just this separate me XX we're not teams, The in approach. branch, let year. embedded separate add. you practical to, to XX It's last the really

I And it's So fastest profitable. grow couple and with safe certainly last to growth it's nice. bringing the no in starts and think, them. is it it's We're way certainly and the high-quality with it's organic opened different This deploying XX not specialty we've your people of or but business, than assets on the the warm years. XX, is

Operator

]. from question Wilen comes Wilen next with The [ Management Jamie

Unknown Analyst

see your is and is that accounts us of it your what both in XXXX business expect to be national in growing what for Can to percentage XXXX? What markets. national was demand local you Good it tell you accounts? would Yes. and

Bradley W. Barber

aside disclose but ratios of Thank account continues giving account you that and been not greater notwithstanding larger our happy characterize equipment large single longer thing base larger Those grow, of right? we're customers large about or focus our periods mega question. of the from projects, a those source, for disclose So not of We or I'm is a we do unfortunately, a customer time, do the ratios. for comfortable But a volumes national to mega very generally stability, that. projects, that's you ours.

Unknown Analyst

Okay.

thoughts to Given a current moving the you on stock free in achieve cash your year, the flow forward? expect are what fiscal buyback

Bradley W. Barber

is potential. and what for growing opportunities about Services. Equipment But further course, looking a meet and allocation. always these is both our our consistently buyback We make we're focused capital stock acquisition committee H&E A considerations. Board talked Yes. and, full of finance We've on

I What's our want likelihood a a anyone dividend. likely of wouldn't to to lead XXX% buyback. to is, we stock continue So, pay

locations We continue year. to step a out these XX-ish

more for the deploy going we stock need. previously deploy are capital mode. capital. matured as that profile going out we but growth same-store see where we to to acquisitions Those now locations. we're you're to are looking the continue to And rule right growth aggressively likely a us in We Never existing fit see buyback,

Unknown Analyst

fleet age to your the for is optimize profitability level the the But your youngest your target industry. business? of would fleet be Excellent. lastly, obviously And what age the in is

Bradley W. Barber

tell within of well state is can you fleet managing below with have a is an age We steady were I business. fleet What management mix. Of course, levels age. optimum our we product just

have and pushes at it grow fleet, fleet you numerator When You've rental denominator. got the our growing down. levels your your we been age

is out, think scale under we've where in industry about we further are if just opportunity matured to us be or were to we I But XX. pent-up That's we're need could months, So, in Leslie today.As where to. you than much if would both older pointed close cycle we're age be, when to asking the it happy I for it we a and certainly that. normal elect average XX a and

there. a we're position So great in

Unknown Analyst

part the decline, Is up? number of of new the you're opening branches

Bradley W. Barber

decline fleet what decline The or [indiscernible]? age in

Unknown Analyst

In fleet age.

Bradley W. Barber

but basis, same a may to when on certainly replacement, we're we growth move of It's part That's And it. locations. an high fleet mean, running it's deployed some we've assets, I stores. does primarily ours to your existing fleet locations. at it's as rotation, annual brand-new utilization these deploying product primarily these as capital is new

Unknown Analyst

fellas. job, Nice Excellent.

Operator

question next Instructions] comes [Operator Fargo. Seth Weber The Wells from with

Seth Weber

Brad, thinking here high quarter. and pricing, used for XXXX in used sale surprisingly equipment the we should used you're margins in market? on about what margins just equipment guidance how be were the fourth Any seeing on

Bradley W. Barber

expectations. recalibrated the those to be I sell XX%, gross to our margin moderation. interesting time, expect Yes. assets isolate the with we've been exceeded through. and our will us technology the as initial sell the It's XX%-plus full deployed stick some our to that to them, QX markets own We've some suspect at going in on but year closer see for Seth, expectations XX%-plus. the is to expectation point we year. to and to we're help them level we've view pricing probably At sell,

Operator

for would like concludes This remarks. to turn the Chastain I the back Jeff closing question-and-answer any over conference to session.

Jeff Chastain

in We Betsy that, to Good H&E. day, and everyone. appreciate interest for speaking everyone assistance then. you your call. conclude thank And we'll today's the today to with look on again. With for forward [ continued taking you ], do Okay, We join time today's call. your us

Operator

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

now disconnect. may You

H&E Equipment Services (HEES) 22 Feb 242023 Q4 Earnings call transcript