GFN - Earnings call transcript Q3 2018

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

Operator

Welcome to the General Finance Corporation's Earnings Conference Call for the Third Quarter ended March 31, 2018. Hosting the call today from the company's corporate office in Pasadena, California are Mr. Jody Miller, President and Chief Executive Officer and Mr. Charles Barrantes, Executive Vice President and Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 2:30 PM Eastern Time. participants floor placed your will the all mode a questions time, presentation. the and be this have on been listen-only following At open for over pleasure It turn now Instructions] my [Operator the is call to Mr. to Wilson, General Corporation. of and Finance President, Counsel Chris Vice Secretary General ahead, go Please Mr. Wilson.

Christopher Wilson

Thank you, operator.

funds; forward-looking that believe can our are assets. financial differ that We will there that limited industries; or respect statements. correct. begin statements disputes Such not be demand U.S. difficult ability resolution from from for our relative today, adequate ability you levels litigation; cause outcomes to include, like actual to expect and labor or additional operating be customers; adverse or statements. our expectations to, a materially a by insolvencies; or may or to are the in U.S. with oil such supplies expectations but as perform Zealand call of or of of or adequate industries no and but gas part to represented key would to we conference for write-off pressures; that reasonable, could raise customer future to New Canadian variable of contain and in to in with interest described other or our industries any These meet not that assurance our construction construction prove businesses manufacturing competitive forward-looking our the ability control; to views risks disruptions; as uncertainties defaults declines for transportation borrow acquisition such Before intangible dollar rates our or capital products contract statements services all remind and goodwill our our operations; interest are secure we increases I customer this products or for results; certain demand; forward-looking do procure to and the indebtedness; and dollar; those changes rate us in our Australian, Australian the the regulatory integrate to results of and changes; forward-looking

Jody, For details time, call, at section forward-looking our Risk These Corporation website and filed forward-looking at Finance adjusted with Officer. A we we Executive of the and on also reports periodic report discuss call In see intent go President And please SEC earnings to is Factors certain as EBITDA. in included at risks, such the now, will the over update General Chief I'll regarding company Miller, our judgment how the the XX-Q. define obligation or this Form reconciliation and will of adjusted non-U.S. EBITDA and statements release more quarterly arrive GAAP this our Jody ahead. at these measures financial posted our conference and be disclaims to turn any www.generalfinance.com. of statements. in please represent

Jody Miller

discussion General of fiscal update and Thank for our we results. I brief and year an with begin third provide quarter. you Good will us XXXX Finance's on our discuss morning, today to you, Chris. quarter a fourth joining operations then appreciate outlook

Our an we'll up will overview remarks, open Chuck financial then the questions. his a CFO, following for Barrantes, call provide

first units sales, leasing improvements continued financial revenues, metrics we into the on operational year-over-year solid strong has delivered utilization, XXXX in of report geographic to third very all We are financial the another operations of EBITDA. had quarter average lease including experienced very and half quarter momentum pleased that fiscal we of leasing in fleet lease, key our rates where The both venues adjusted our and results. in

average the to continue our lines across demand its revenues end units experienced during by of markets higher where XX%, on of the operations leasing compared higher lease, see fleet rates in product increased lease utilization American and average quarter. total higher year. majority healthy North all Our to vast average We prior

in storage again to in a score portable as business high continues core patented began quarter satisfaction our the since at is indicator. Our promoter customer posted higher performing expectation world-class the net high-end and score we of very tracking rank this of XX% its and

In to business our expansion to organic addition America. storage we continue geographic growth focus container North portable of on in

England in third we completed of April, we container storage Vermont acquisition in container business During the an Kentucky. quarter, further in business Central storage of acquisition a a New the market. presence adding south-central completed In

the four Atlanta Carolina, acquisitions Georgia in America, Carolina, Additionally, state. we Greenfield date which branch. and Greenville South opened Greenville, centrally in our placed we Charlotte, is in completed two To have have Greenfield Central locations. first North between our a branch and North

serving are U.S. of MSAs XXX We now healthy. our top pipeline XX in the acquisition the and remains

allowed quarter to last also sequential $XXX in more increase a results. quarter from pricing, up a basis and from has and appointed higher from utilization strong quarter be Our with XX% Texas very up a utilization The our the a in and year. average XX% quarter, liquid year-over-year rates containment row. tank America in growth customers business generating again to achieve as sequential both second experienced We utilization activity in selective XX% quarter from gas ago. achieved and vibrant for have XX% The third North was row. for us quarter well. quarter, to average monthly delivered for oil year up and up lease a sequentially for quarter a production revenue from the seventh us both second the once is the enabled the in XX% Frac average higher which second fleet quarter of leasing in same We rate rates the in sixth

container second to chassis. specialized sequential our external in Our consecutive for other improvement North demand and related products, frac to fourth due customers. American is an sales its manufacturing operations delivered quarter of This in increase steel tank particularly ongoing quarter increase

Standalone leasing continue quarter. third for We improvement and for EBITDA modest for quarter positive or was second to adjusted offices consecutive operation GLOs the manufacturing level ground also the loss North year's the produce last EBITDA our over operations. American

region. Now the to Asia turning Pacific

Pacific region Asia primarily leasing the last was year-over-year growth sales revenue. made to by momentum company sales order in positive with large-scale The in we and the a Our utility to quarter its driven growth follow-on both in sector. the continued

New number last the As quarters were new mining markets we growth during state this across sectors. seven introduced leasing all Wales. is period. have consumer -- for in product locations the on a used mentioned and increase up broad-based quarter recycling construction, in revenue across on of of special set leasing sixth of that The delivered end revenues in well stations was year-over-year This South utilization the that's -- containerized nice number increases as the with and as from fleet consistent in improvement lease growth is to a last averaging a

build to Our a Greenfield the would growth This leading share market extent the combination become by team across of of upon to available number openings organic initiatives. growth continue region its accretive and that and implementing include the acquisitions.

East through business. we redeployment in Asia-Pacific openings leasing During its quarter for the Greenfield to continues three. of location outright work third also normal to the one fleet workforce year-to-date on Perth, bringing the either region accommodation course of or to Management sales opened through Greenfield

does and year-to-date we XXXX Now, increasing are fourth now our what EBITDA not consolidated will all very adjusted fiscal in the quarter, fourth increase $XXX with the impact our the last results. by year I to work fiscal $XXX XX% dedication in be of into million to our million This take the for I discuss the account pleased hard our from XXXX consolidated quarter. to range and at conclude, would we guidance acquisitions the any may additional revenue results call. Based on XXXX. financial year strong expect XX% in for -- outlook company employees from To very provide that outlook like financial wide outlook. We of that from of fiscal year on will am occur

over including and share and number have wide America market strengthening years pay-off Asia-Pacific we several our growth to North footprint the continues growth strategy Company in Our our expanding opportunities still last region. a of discipline

the call Charles now Our I performance finish well positions also year to the financial XXXX. us Barrantes foundation for his the fiscal will strong laying solid while review. year-to-date turn over to fiscal for

Charles Barrantes

Thanks Jody.

which on substantial our some and filling on report XX-Q quarterly our read be we [indiscernible] will and Form information which of encourage contains our and document as the company, at this about be SEC I will time shortly website, will today. investors it We both amount of parties the it on discuss to interested available other

million American Leasing to period, million an the operations, financial An in including non-manufacturing operations of manufacturing of oil last increase In XX%. third and of XX%. third to were of inter-company at million including in quarter $XX.X compared driven quarter to million during sectors. gas increases XX% $XXX,XXX comprise of basis third year-over-year $XX.X year. revenues compared $X.X year. of the compared of our fiscal quarter from the period of and compares over $XX.X increased year's XX% same XX% million revenue of and fiscal the million of sales year XX% from for North American fiscal for XXXX commercial quarter Total total of prior quarter Turning our XXXX. $XX.X to as American $XXX,XXX. XX% were primarily operation. leasing Non-manufacturing were year million North the of by This revenues our year prior total sales for quarter a total on avenues by construction leasing revenues North Leasing third $XX.X an ago were third increase XXXX the over increase Revenues quarter $XX.X the the in the an the sales third inter-company to million quarter results. to our sales year the increase $X.X the

quarter the compared million revenues quarter fifth XX%, was positively quarter consecutive XX.X our XX.X up margin XXXX third in a is the the basis, for sale leasing leasing between increase containers mentioned, revenues quarter foreign prior in In year's revenues improvement as adjusted third utility the adjusted America, in EBITDA North of X% especially manufacturing for leasing for currency year-over-year up demand EBITDA a XX% for of revenue Revenues of translation favorable with X.X adjusted XX% On XX% up Asia-Pacific year-over-year the third was EBITDA to X.X a or Adjusted frac quarter, of GLOs. of saw in construction, our from year XX%, million adjusted the Sales effect compared were in year's large total million and the EBITDA. increased fiscal last due an by growth increasing As quarter EBITDA with the primarily and mainly increased XXXX tank increase in Jody revenues the and compared adjusted X and an by containers percentage of million, increase $XX.X impacted in In our ago office for from prior the year-over-year. year. a to periods. XX.X totaled XX%, Asia-Pacific operations over Consolidated of by This was an and million sector of $XX.X third year of million million X.X currency third XX%. operation events local up amount EBITDA region Star's were Pac-Van a the quarter, the million. the modified XX.X was mining million, times Lone operations in with -- quarter XX%. sectors. special in due was

operations, for third quarter manufacturing loss compared EBITDA stand-alone last XXX,XXX. on of year's to For EBITDA basis, our quarter adjusted XXX,XXX a was the adjusted

At X.X to was higher third rate interest a XXXX average the from for last for higher preferred XX.X% quarter $X.XX was to X.X% higher stock. last our Asia-Pacific's third loss the XX% the currency the X.X% average basis, the year's or the expense On higher include interest common Net EBITDA third an the of versus ago in adjusted a expense quarter the third for the third to XX%. X.X% interest, a share our year in American quarter due borrowings, year rate and Both an stronger Asia-Pacific in of a $X.X the on stockholders quarter Australian operations, million adjusted as million per Asia-Pacific increase by XXXX up from million million primarily of $X.X X.X a area region attributable X.X net the by versus interest periods third prior $XXX,XXX for year. X.X or average year. quarter of EBITDA X.X of dollar Interest paid weighted of dividends in loss the to periods. million The expense X.X driven increased million $X.XX improvement share, diluted a compared approximately period, quarter increase in per local North was quarter. was of year over due million ago higher approximately weighted by the in was from million, quarter. in between

of before year cash and flow year combination first fiscal XX.X due we fleet prior compared free but flow as XX.X same was million profitability activity free operating XXXX of This year's assets liabilities. nine to higher and from months the For the the cash in primarily period. and generate of factors, million of timing management to

for CapEx As flow to we activities and define reminder, a inventory, acquisitions. and operating estate investment in be cash from business real and adjusted fleet, free net cash changes non-manufacturing

lease invested net consisting XXXX, America XX.X compare million X.X and America the XX.X year X.X million the Pacific. For XX.X Pacific XX million North of the CapEx the in in fleet as the million first Asia to in fiscal nine in Asia million year fleet, in North net quarter, the months company ago million of a in and

balance net leverage trailing at due in X.X the leverage to with XX, of of million Royal XXX.X XXXX, of of finance with net the was million the to to cash of shares borrowings times. million, Wolf. acquisition used of and increase X.X This June The the million our held had a total total and sheet, new debt compares respectively publicly equivalents ratio XX, at debt the primarily XX.X times with XXX.X Turning company and for XX months. March X.X

to leasing had were XXth. at our days XX.X days, at net times American XX leverage were borrow XXth, credit back its XX, XXXX. Day Receivables and in now the its under XXst, has Pacific for American to million facility September the Our $XXX and North June March comments operation had million our million $XX.X that transaction. million XX question-and-answer like operations at leasing outstanding March and which was declined concludes I to under as XXst, operations X.X and ratio call to Asia This borrow to to our At facility. as as Asia-Pacific June at XX and since sales prepared Australian operator million turn available for would credit available session. $XXX North March respectively XX.X dollars leasing compared the compared receivables XXst XX XX.X of

Operator

line And our Scott of question first your with Instructions] from open. Scott Schneeberger line Oppenheimer. the [Operator comes is

Scott Schneeberger

being a and I'm You good in guys [indiscernible] are very about going with oil and prices see are you clearly growth? direction now. with customers quarter of these continued you just how what down very interacting new pricing all different were curious things are volume

Jody Miller

say Jody. This continuing be things I'd consistent. to is very are

the first lease ample of them to I for there as have I plan with And which think our to advance sure for tanks in Permian. instead in some make it. is partner starting so there is turning out availability, seem demand which obviously strong back a to We can very positive customers high for especially on rent in time is customers we make the do we some relationships but think giving continue those they well. schedules and as long-term tanks are

Scott Schneeberger

helping side Going tax I it's strong to trend how pricing be sustainable year is? of the of construction you guess the that it going is lot and the you, reform there, lot the What strong throughout do activity. like [Pac-Van] believe looks environment a a

Jody Miller

seen First, increases every across we favorable product price have line.

be continue all that's think like would seem and strong. to is to pretty stable going sector construction we So to

I the trends very think future So we are continue. on our current and will optimistic

Scott Schneeberger

How control that turn run rate you about can it to thinking don't environment of margin over. guidance that? EBITDA more know from leveraging solid, type are you obviously but look the can ahead last do you me things one just looking we I what as the year you what optimize the in pretty the and but fiscal are want business? the seems to forward we give internally with quarter on I'll out And but

Jody Miller

are has a we and pricing in national to efficiency there But Yes, through so organic has as think years acquisitions become we the think feel obviously like to flow that highest as growth, available. we well revenue leasing our we I operations, investing think in we're many value make accounts still we touching areas within opportunity, are add our improvements that come. can still and

Scott Schneeberger

I One Thanks. more for before it over. me, turn

you a little the also in have Do idea, So you the the heard [indiscernible] give there? Greenfield just I I an guys month. Thanks. so bit you was and missed obviously did perspective if can acquisitions

Charles Barrantes

was that acquisition, the Scott. the so amount was a million in under Yes, $X

Jody Miller

[indiscernible].

Scott Schneeberger

And -- you you an is did density of have type area, in activity thanks. that that in other that what standalone that Okay, have or that is some how adjacent then much area? of to kind

Jody Miller

have market, a newer so we're to year, couple in our did branches it's Kentucky and we [Technical of and we last No, market good pretty area location, not of will then smaller area expand England exciting us. the the Difficulty] kind England again New growth vibrant market excited an just that a acquisition very very for is but huge the New market a see

Operator

Brent comes line The with D.A. from Davidson. question of next the Thielman

Brent Thielman

sort kind of be you for of of have kind the focused you looking updates visibility Asia a your America. color more following than in level But a into and can what think little color businesses. were you're 'XX, maybe I North come FY more we guess you there. around ago, more about are Pacific of year I and is on some may feel I take as just thinking of on optimistic and know guidance qualitative the any you up FY Jody, like 'XX,

Jody Miller

Pacific, we did be will say Asia- the to that you would sale the know that duplicate. harder on I So large

it's of improve But and with help bit really optimistic little expand that the some construction the question a are leasing positive should utilities we're big more to Australia is so just the whatnot. yesterday You in say that a leasing. in announced on over discussions the and to infrastructure opportunity years a would I know which we and continues mark. side They

a I leasing side. positive think the to the of So of an from hoping on more the there. duplicate bit point we're view It's side sales and that Asia-Pacific unknown is little

you North think stated I America is as very in positive.

very to construction optimistic outlook our good sectors other think good will continue, so all very feel very others like very we're is similar looks in there. that I it we energy looks the

Brent Thielman

side, about, the maybe in your Okay. with was than unusual And it consistent expectations? was then higher SG&A Chuck, little on there I kind thought anything it of

Charles Barrantes

No unusual revenue Brent it's there, with it's much our our volume. nothing pretty consistent volume,

lower as actually a it's it So last was of percentage of third year. quarter than revenues

So nothing unusual.

Brent Thielman

[that]? I is, time be into And where where number on this over year, are should or that that targeting Okay. as as portion time guess guess of I next following a over up momentum continues you that

Charles Barrantes

honest, as it we to Well but expect over percentage targeted a be Brent haven't be time of lower we to yet. really a to percentage

Jody Miller

obviously We our think, goal. and we get more that's efficient can

steadily large like down believe. to we chunks won't there So I move but be

Charles Barrantes

-- it's the anything revenues. to the variable percentages, Yes. Brent, than to a of probably total going leasing More the be is improve percentage greater going

as line down As you that percentage. the know and high-XXs XXs drop ultimately to into we that the will increase EBITDA

Brent Thielman

line just and correct? foreign presume I maybe that's more. mostly X.X million. other FX then is item that And related, that one exchange The

Charles Barrantes

-- is so non-cash we the for which rights a acquisition the derivative, primarily Strictly Royal financing feature the is derivative. separately has that change value -- purposes of the in in that embedded relates treated for Brent purposes. a note Wolf the accounting have is that in of it's a conversion it of What No. the accounting convertible

Jody Miller

options like. and stock Similar to the or

Operator

of comes Robert Our with Maltbie line question Singular Research. next from the

Robert Maltbie

will manager. of a with Eisen is from a portfolio weather. questions. bit specific, Greg He for the under few a them [pointing] today, couple you he perspective with separately, have more specific I But I'm catch-up the a of

and leverage. the desire XX So I appreciation to your reduce nice your guess, equity in firstly given the months over last

in do the any to appreciation see markets common? your capital opportunities given You so the and

Jody Miller

But the time, obviously I events the would what we're a capital considers barring not the XXXX. which and have or at due are of not capital in delever any financing really Directors that this probably the then at would senior Robert, an the refinancing say the venue next of certainly Absent equity in be point that looking transaction the notes, July in the significantly like. Board you. of changing need and anything company, -- capital

Robert Maltbie

may Just answered. partially have been

verticals your exposure and of various global and and the What globally? you're greatest strength upticks seeing vertical your at the various Looking various exposures. operations in in parts

Jody Miller

Yes.

So good. strong well. for in and sector very it's North think has energy steady been the is very been stable outlook But been as construction the has consistent I very construction very America obviously and

lot If much you sectors and smaller. we look the more is through a the have whole, going much, at volume energy construction

nice, both So get and of advantage of diversification good sectors. the very are to different all we take our because kind is

Robert Maltbie

I and been there Finally you what XXXX well a moving into specific flattening, see levels of your how it's to business exposed know to XXXX. improvement drive. But

Jody Miller

be So very been Permian good going I the have to to has think is good. are stable, oil obviously been and a for while all pretty prices activity say and there solid indicators the

optimistic the stable our So what exceptionally been we tier we that there and feel are are predictable on well. very are very more the top that area like outlook. operations in customers And have

Operator

the Securities. question of from line comes Our with next Brian Gagnon Gagnon

Brian Gagnon

heard that peak you things sure at just is said your from that I correctly. I X.X the its want make correct? and of Chuck leverage went X.X Couple to currently now

Charles Barrantes

That is correct.

Brian Gagnon

a get guidance you least us two have think give the years? your Where so us over do direction, leverage So to year giving some can and at we can sense. next without you

Charles Barrantes

little a somewhere and X.X where spot that two Brian X. below, should next somewhere sweet would able within years to get I the our around we said think year to within bit publicly and we be leverage X around between

Brian Gagnon

about quickly refinancing how so the you there? higher delevering and Australia in out and are to think and thinking everybody vein about cost same that the Board Jody in that begin you And can

Charles Barrantes

will for to us is of obviously robust our to delever, publicly in looking more for sort we but Australian continue plan. facilities And intend there delevering America dollars in some Australia. plan we Australia within investment be into as us refinancing Well, has are some commercial to to a more the North years. continue we've acquisition But two at for which opportunities that is pipeline, to a in stated game

Brian Gagnon

you looks down approximately paid it million because and Yes, the had XX over half? quarter like last

Charles Barrantes

Sounds about right.

Brian Gagnon

So can I numbers actually like below leverage when down look in it at look two you get it the about X.XX years?

Charles Barrantes

Yes.

Brian Gagnon

for holding incremental question Last things constant has all each of incremental it? dollar what revenue, me, EBITDA margin to attached

Charles Barrantes

have vary been We of tried on mark, for on X.XX $X.XX always flow-through the dollar but depending it circumstances is sometimes does target. the kind has our

Jody Miller

margin. And I'll have sales relates revenues specifically as say revenues the different on our leasing would a impact to obviously

So leasing. we are talking about

Brian Gagnon

I Now some that got the stability was about or Lone At grade trending quarter. high [X.XX] think you high last utilization now to per question. month got pricing the thinking the of Star, customers? that you you Jody in mentioned of and at I higher? rental point get average that are what is can where How one you more you've a that

Jody Miller

trend. think I earlier it's think positive I as I a indicated

trend, kind have lose changing were We things the on tanks, which tanks. is supply didn't the an so short now customers of they old when

is total small of a very the piece pie on rental Our rig. of a tank the

their of impact So cost. any material up rates have on kind we can not move and

continues utilization to very strong. So to we want of that, deal again with, we've to we try selected kind be the continue want do to customer to

things keep I is think and those have think up. biggest now like So opportunity moving rates right there that if it I opportunities continue our that is we'll

Charles Barrantes

specifically or Brian also, that let Lone both average and Star say the me X.XX Pac-Van. is rate the composite a just operations for of

Jody Miller

Pac-Van at because service are full company. the Pac-Van rates through higher than user Star where Lone Yeah service much we're end subleasing

Brian Gagnon

Okay.

So a levels at of historical EBITDA there seeing. you chance that Star? what can you're Is get that to back is kind Lone

Jody Miller

future huge Obviously the well. as think as think it did near level in going didn't it fast the hit would that it's we take a bottom I in decreases, to with as the while.

to has little rate still know efficiency a strong we there's but that's million a think optimistic but side continues a pretty again at obstacles on through and the we're opportunity those Labor view well side. problem XX right on rates. know mainly run on and a you Star now we're So some rate you there be think as the I future around working Lone bit

Operator

question next Capital. Jack SIAR line comes from the Our of with Silver

Jack Silver

There of is work we're in on. the a rates that Good longer the in but all of fuse I'm towards morning things very to the general business or I a quarter, the on on really everybody. is including they've that who sure drill we Ron no the Terrific number proud done for down everybody call the in and that cycle picture. incredible other touched haven't could market sensitivity the business in extent interest you on everybody what is short ultimately cycle. to factors regarding upset know want

is effect in company company. a Your cyclical

business talk How storage or or of whether business through and through percentage fracking type in Are longer percentage short-term? the to roughly represent to even something these in the represents what it's visibility customers visibility very in portable commitments you of much your the -- business you in leases term you about have a when East. Pac-Van So your do What than percentage them. term, leasing business? what the have short leases -- Far the what

Jody Miller

Jack, So comments. Thanks for the

think I with is thing one big so many is industries. touch our advantage we company a

we're very So very, diverse.

the except what's Star. about longer sector, you term tanks term start Lone through are energy the when typically going contracts talking Pac-Van So on

care stay much longer and tier the there rate But the longer as where is term sector. happening. that us stability see stable if that top customers we Star that. much gives weed we've Permian, obviously more take see out the hurt Lone mainly daily it of long-term than tanks don't our very where turned the that's there. off is From some a stability we down, customers it side been, So kind Obviously as energy energy don't in happening, in which the us, the far view of

So that's visibility have kind as energy sector. far of on we as as

stay side, of contracts. out over on typically on average. offices and On Pac-Van longer the average modular and term Many our stuff are the long mobile year rentals

out. six and of typical side, modular turn when emptied time is get to not So out but they your months, out can agreements they some get mobile Again typically put containers, stay full on returned. and of to periods we yes, on the after product, there storage tend longer containers when units but month-to-month, contractual it's

So many, years many historic see changing. been don't and for we that's the trends that

snap outlook as optimistic now, is the perhaps of the more we're the kind far there June right that's So from booked different In as as and our areas. shot out manufacturing well. looking

Jack Silver

stability opportunity to the the actually at So and being again you your business rising given point in made comments the a is advantage. an prices and short-term customers the fracking this about that

Although one period in to it higher the question pricing a the in appearing of a again would an sense be that of, That's levels to gives utilization? it be during greater again really perceive statement. you power not advantage

Jody Miller

Yes. we And I customers certain with that agree, we've through downturn. accommodated had multiple the increases price

So to I get. one we say, to not would all you certain which have months tell once are those your didn't is thing, on one also to needed aggressive I where the more to easiest I customers will been year, able point, customers. mention we six every been we've requiring is,

they're business you the license process, going changing getting through MSA online digitally don't through a the their and customer they and So of setup portal. billing like kind to that for gives that doing now

takes work strong is a that's So a and customers, the customers of that and and after relationship get service lot billing the good well, [endured] you very paper break.

Jack Silver

limits what, practical trend remember be what to you Where 'XX? XXX% continuing hopefully about For example, think to this in, and moves are if such Are fiscal is XX%, right. a into there talked one I practical utilization or unrealistic. utilization? will I that is thing and I limits in mean, to there is strong completes there environment Are year likely you as

Jody Miller

time every tanks not lose turning is they cleaned to next bit little again in They're XXX% Then, past people the Definitely that, is XX% and after thing say the But able the favorable see to versus and them to is availability. push in up from viable, out back their inspected which would want be left would staying obviously job. rent And flow I boom for of job. get ensure us come the back rent, the starting a some there a didn't during limit the probably be time on the to range. within higher. that and they on because as a them one we're happened before

So some a normal XX% there possibility in a but rate pretty maximizing good up to that, move environment. target is little of above is

Jack Silver

a own So if are basis. level again price no to there price on to are have of though a when you? to limited on have is something wants flexibility more enjoying increases enhancements sensitivities at made somebody moment Do they that generally people even lead commitment you daily this their stay have those you literally pricing or rent you

Jody Miller

do we but Yes, get have to approved. them

good our all So we very with of customers. success had again have

do little we pricing have move back it increase that higher work You in having and we and saw that the chunk pricing that ones are but the the a large during board now won't in lower more a than time we we hey accepted you pricing. we to to steadily that's us back pricing the little ones saying And all us the bit going better the with going across pay are that year-over-year. got one customer it's have and aggressive up, with to downturns they

that into plan. So we that strategically with went

Jack Silver

debt again own regarding how to are just okay, this of and a regarding regarding position business? regard criticism that in you leverage -- fleet be in and the and appears significant is your about Is not you world that you cash where to relative in moment again a it's making do the or in talked this areas investment making moment investment the seem is strategy objectives significant that that have the appears what don't again you total or investment observation. you at this particularly again, incremental cycle It regarding particularly at -- units. appear not regarding, the in you that various a be the investments any large a and incremental flows to making an it to Right,

Jody Miller

are business are when in talking about specifically frac Jack really saying general? you the or you tank

Jack Silver

business various you can in are? through of I'm you go but talking elements No where general the the

Jody Miller

allocations. on when it to strategically Jack, mean remain this I well we way fleet can as answer comes acquisitions, investment capital I as our I disciplined organic when our it make mean we

look we includes at So because and that to and that are try particular that make investment that know markets the tanks need in we appropriate cyclical. frac is sector

we at invest sector very tanks. frac it and look gas So in with the carefully want if we incrementally to oil

rate much volume but disciplined focus absolute we through and on location increases and so is primarily delevering remain and profitability. with on still both So our our -- volume not capital profitability dollars our but

Charles Barrantes

storage Jack to and we want where of limit into the add a a in is lot side organic adding side things There capital on I'd the those. the need. we able grow storage growth be And markets don't we side of just buy on

Operator

Our next line Instructions] from the of [Operator comes Fernandez. question Louis

Louis Fernandez

of on disciplined quarter, or have Congratulations good right just your all? basically, Pac-Van. clarify at very but definitely been Well, and good at my on not staying capacity a all great most capacity you're and questions wanted now answered, growing numbers growth. growing you your to Are

Charles Barrantes

capacity our has on are the of side. our CapEx risen because limiting performance, we but growth Yeah, storage

We continue acquisitions. to do

generating continue to at do on our to We we cash. the American which to perform level keep very operations But, want Greenfields. lot Pac-Van high continue side. a is a expanding of We North

Louis Fernandez

Star. the meant you in I Yeah. of in Pac-Van tanks -- units that Lone The have. amount

of all tanks? the amount if Just at know you know to increasing wanted you are

Jody Miller

have we Right, way. yes in a

a of as has Pac-Van well. So tanks fleet

Lone Obviously of XXX So Star makes Lone lot about tank. we through Star. currently their money rented tanks have a the per more

Star from growth. been We've Star, Lone been some it's has it's So on all so it growth Lone transferred in fleet the internal Pac-Van that also supporting investment. the good been but a

within family You the is know that to all so speak. same

Charles Barrantes

we general of units significantly the have in fleet. number But frac not increased Louis in our tank

Louis Fernandez

right, it. I guess just times out all flow get Yeah and want now cash it's the great. I to good Okay, of you some right guess

I converts I it Wolf. debenture that's believe a convertible on Royal technical think right if share, [indiscernible]? per shares common the Then question, common good that strategy. it's just a X point dollars something

Charles Barrantes

$XX million note million of $XX at converts $X.XX. convertible the

Louis Fernandez

right. All how shares? many And

Charles Barrantes

A X little million. over

Louis Fernandez

do to buy at thank right, All And that? you you not all or doing back at have looking way are that any you.

Charles Barrantes

note convertible that the to per there is se. though not a buy respect back way With to

Louis Fernandez

Pac-Van within focus I And is mean growth are want in or looking that there long that any you long Pac-van term to like opportunities other where on general? any it to term pretty areas you is see growth you

Charles Barrantes

Yes.

is side So We new start]. do to on off feel that the very several success some accounts, I trends. its and continue I [cold something Pac-Van so great had to have we've we'll products opportunities think Pac-Van mentioned are on growth and do introduced well. continue through geographic we've that we expansion there's acquisition definitely taking national like

Louis Fernandez

finally months said on believe. last Chuck I produced around free then you And have cash XX.X nine the flow. you

So…

Charles Barrantes

that XX said I million is correct.

Louis Fernandez

Yeah, XX.

why is not XX XX, So full for project there a year. to reason the

Charles Barrantes

to Louis hand, I there reason on that's profitability, remember talking don't before any are see beside I other factors the about. not we're number so CapEx, other I but mean a fleet

Louis Fernandez

Yes. Definitely fleet CapEx… before

Charles Barrantes

for trending the you that. Certainly range, I'll give

Louis Fernandez

company from the you a right? year one, is -- trend be put when saying XX your and the higher, you're in next leave other likely to of Lone I going big mean goes pretty rest the the takes bump? most million And you Star

Charles Barrantes

that words, for your no in Louis. see reason trend put To I've

Louis Fernandez

June XX Lone XX, much you on don't on EBITDA million less. those Star, when Lone the and million in XX Because you look back, XX in Star, in months have you don't have XXXX the have you back from

So when you…

Charles Barrantes

Yes.

quarters. sequentially adjusted several clarification, Star point months, trailing Lone XX of obviously XX Star a EBITDA million million. around has is not improving now for Just But XX been Lone

it So just to keep want perspective. in

Louis Fernandez

That's what I meant.

free be higher? able the then million XX to XX assuming cash So months flow projection Star Lone your hold should much

Charles Barrantes

Should improve.

Operator

turn time. President Mr. Mr. Miller? at to remarks. closing for further no Miller, questions over the I call Jody CEO this to are and There would now like

Jody Miller

you, appreciate you today thank you your to I'd Thank like with for Corporation quarter. joining forward continued the next and call interest Finance in look General operator. we speaking and to

Operator

Thank you. This concludes today's conference call.

disconnect. may now You

General Finance (GFNCP) 9 May 182018 Q3 Earnings call transcript