HRI - Earnings call transcript Q4 2024

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Operator

Thank you for standing by. My name is Karen, and I will be your conference separator today. At this time, I would like to welcome everyone to the Herc Holdings Fourth Quarter and Full Year 2024 Earnings Call and webcast.

[Operator Instructions]

the to turn floor Hunziker, now yours. is will call Leslie over the I

Leslie Hunziker

operations and everyone. filed Conference good Rentals operator, and fourth on and our release you, Thank prepared IR morning, the by were slides SEC. and Earlier our furnished financials, strategic Year to All website. quarter our and of reviewing results and Webcast. and full open posted page presentation an view Events comments Fourth XX-K remarks our Welcome Full XXXX we're the on and Earnings was our including Call our today, industry press followed of with XXXX year Today, Quarter Q&A. will Herc the be The to are outlook.

safe see on based and therefore, today made X. differ statements statements. move on Slide include our results forward-looking actual we call are involve materially These on you and statements I let's could from call. as reconciliation it to Today's the environment this would GAAP will caution forward-looking uncertainties. that and our risks the harbor on Now

the should ended You to Factors for Risk of December annual refer report XX-K Form XX, the our XXXX. on section also year

our Reconciliations a In these call -- we discussing on performance. a non-GAAP earnings the in found conference accessed this in non-GAAP the material. believe evaluating be closest results information instructions dial-in can can the Replay measures the morning. is this were our via GAAP webcast addition replay equivalent through A for be to we presented GAAP release call operating website. or on included of company's that financial to basis, will be useful in

any other not this given not sanction any and recording do of call. transcribing have the of We permission approve or call for

join Conference, your the mark management to February. in please JPMorgan's Yield Miami both calendars High Barclays Conference Industrial meetings or at in our Finally,

in March. Industrial York be We New JPMorgan will attending the in Conference also

Birnbaum, President one Financial Officer; Larry Mark of morning, Chief Chief Vice Senior at I'm to call Officer. you see to Aaron Chief those the Humphrey, joined President now This turn Larry. I'll by Operating and and and President Officer; Silber, hope We over Vice events. Senior and Executive

Lawrence Silber

level everyone. that of you, is the without efforts Leslie, work It each direct the prouder the goes come to key Team experience. XXXX, striving growth Herc performance hard improve morning, day reflection our team. a our financial and record strategies, employees' of customers' results Her saying to good and the both be couldn't of work business I translated members every of In our and metrics Thank across into who of and

our Let on and me Slide our give customers growth was exceptional effective a collaboration on value of of to starting an strategy, our you growth year Agile XXXX delivery update #X. and first shareholders.

our strategies against metropolitan past branches the our locations. through greenfield year, market XX revenue Over long-term opened execution scale, X our key share in and further with in and more growth drive we efficiencies in added urban bolstered resiliency acquisitions, We market these areas will Together, line XX and strong opportunities. XXXX strategy.

fleet while density acquisitions local new capabilities. reinforcing to our addition fit account cultural categories, bring desirable locations, strong team and complementary the a with account new In national members valuable

capture acquire incremental to and the support opportunities order fleet cross-sell to comes When be expert to we CapEx our it in specialty for share mega able GenRent mix to projects. wallet customers of XXXX, increased to our in fleet demand solutions to

and in in long-term the our rate more strategies began last sensitive delivering achieved end contributions in when year value in optimization. fleet the pricing These productivity We markets early with to interest short operating course, continuous our also paid technology systems and slowing of increased off second to term and our concert initiative and logistics improvement EX customers investments OS efficiencies improvements, quarter.

The operating they just dynamic successfully navigate cost management this process us to enterprise-wide as improvements that are and intended cycle, enabled strategic investments to do.

moving which mega Cinelease the is really to advantages Last project year's the of performance Slide Herc's XXXX our includes participation. emphasized business. Now financial X. scorecard, This

diversity, Our customer our acquisitions specialty project equipment discipline. course, and and geographic cost our of and, strategic services,

for revenue for For adjustment $X.XX the full of just is Net greater from included fleet an diluted years The asset which this in value held year industry results over year-over-year. strikes. year, change equipment after XX%, studio of of to value outpacing an entertainment fair efficiency rental currently market up per was our full of slower-than-anticipated of crippling the the sale. labor for share asset Cinelease income business, X growth the the the asset recovery

our valuation based was over the on EPS analysis impact up and received just the higher market softer XXXX in is over locations, inefficiencies making revenue detail as EBITDA process. adjusted On recent Greenfields. in a time. $XX.XX from year-over-year the and per current shift was favorable scale ongoing and new ROIC Ultimately, offers from a through strong specialty share, being drive from will X% basis, through sales long-term new markets near-term in few from These for comp the last acquisitions will Cinelease over the these Adjusted the walk we them channels. Mark you local increased used which year-over-year margin locations plan. on also proceeds Our mature, efficiencies, of year. drivers new a in and comparison minutes. profitability about sales improving an equipment offset national our improve drag account by growth an impacted the component key they typical of

let's XXXX, some #X to thoughts. Slide share to jump to ahead Looking

anniversary that you Herc this year. the tell to proud celebrates I'm its team First, XXth

of a legacy to service this years proud opportunities made demands has the excited defined by impact been our of as to we've We're meet innovation, customers and are and that we've collaboration for evolved for commitment journey the of Our excellence about ever-changing ahead and the in success come. industry. the lie to continuing the

our a dependency last our put positioning vertical reduces demand we've opportunities nature the The business today from the a important you or markets or lot single to years, end upside on in As and market. shifts into any work dynamic for of type allow our over of geographies. a company product which is resiliency, diversified know, X

sensitive and continued the solutions, allow overall us projects XXXX, the strength for XXXX care, it offset we're signals interest year. For than maintenance health industry strength for full contribution projects demand revenue should our growth markets to and revenue data specialty with half benefits of again the ramp-up the year mega the from and seeing of in local LNG, rental back new and increasing with of outpace projects, along semiconductors, project more infrastructure. weakness recent in centers, in special industrial rate commercial from education acquisitions starts mega this persistent together

When recent it a of comes potential their acquisitions time, towards XXX network work local build our continue to to top in challenging acquisitions. our greenfield in same support strategic greenfields year, through geographic the density strategy as we'll expansion, full the environment. they this want to in we elevate and margin At markets

target well Our our our ratio range. is leverage balance is and sheet strong, within

the themselves move top forward that So selectively fit in expand will criteria, presence our to as markets. our XXX opportunities North American present

continuing we'll costs carefully fleet assets the For manage margin and as always, while CapEx, our support our growth to and business. of

fourth then and will Mark bit full business operating trends, more talk take will the performance little and about specific range. support that year a our more quarter through our Aaron guidance takes you Now and puts Aaron?

Aaron Birnbaum

quarter our environment new work the our of to demand Larry, safer on company of fourth We managing do. building the is Primary the strong outperformance thank we tremendous minimize our communities another and quarter good they a to and morning, quarter the last we together for We in. market and managing and environment, and all the variability team and emergency finished they Thanks, and of for our revenue efforts everyone. impact costs records want the customers this operate at the employees, the achieved Safety everything to core in hit and events work while customers adjusted through EBITDA. year with for year. response I

on at on In our on branch-by-branch safety days, measurement, can focuses perfect which strategy. strive perfect X, of making and our XX% commitment standards markets. is locations, for in XX% our total urban and safety days all metropolitan total fourth industry's the Larry you In of program XXX% a growth major recordable Greenfield through greenfield our X, X by quarter, XXXX, As of about rate XX months our progress perfect. XXXX. and the we great as our notable, a over we the better reflecting least our customers. opened remains locations over increase to Equally On XXX and bringing the operations last days organization. high people market we than and the Slide mentioned, And Slide as acquisitions see expanding to top incident are internal XX achieved benchmark our on of throughout the X.X.

also final construction. acquisition industrial to We in growth adding more X robust branch which is year, that's an the area of Louisiana, our our locations network in made seeing

This to U.S. most customers of serving in commercial industrial transactions populated specialty XXXX acquisition XX the branches. areas locations and are brings X Roughly our new of the total the XX% in in locations, new

complement network. filters. acquisition existing in general market financial past XXX in opportunities fit we've that equipment consolidation, extremely rental XXXX, more key cultural than As markets market Herc high-growth we've businesses you've this the strategically investing our seen added we to We our current position. strategy, active specialty in XX Since in network into focus strengthen in the billion geographies with late and strategic, locations years, initiated and companies our been branch X $X on and when

market approximately our national us growth. Over our of share, in mix and the enhance period, through extremely revenue specialty we to capture same rapid This has locations. cross-selling greenfield allowed elevate XX a account capabilities period opened

-- elevate accretive with our take network best and this get new Also, fit. XX will also for XXXX, those we're product continued to supporting to fully Greenfields our year opportunities months through the are XX pursue branch acquisitions. recent we our margin. operating focus We line to going to on we strategic progress Acquisitions about and increase as expansion in

focus XX that cross-selling our over to time the and accelerate the months help capturing the synergies on acquisitions should line value. elevating maximize last productivity So fleet completed from

On growth. of and core that specialty for we part through Slide of Acquisitions continue in grow equipment XX, are Greenfields portfolio diverse our new to see our fleet can you opportunities investments. just

is spent roughly is specialty fleet And than the repositioning Greenfields less at mega of fleet composition the fleet we equipment year, OEC is billion on December XX, needed it total, existing the XXXX. exclude $X.X efficiency, XX% geographies robust demand billion, grow. comes $X of last the page. XX% on our in specialty assets, fleet to softer acquisitions, and fleet you we fleet to We continue side would Cinelease with dynamics fleet prioritized right our base more to room with fleet Total local plenty now management, from growth. and a to in projects, about higher-margin new for When record about fleet. When layered Our of be as in XXXX. flux, new to markets as then growth optimize of

OEC fleet in We dispositions a with our normal year. of an on last also disposed of more plan for XX% seasonal less cadence keeping basis

the phenomenal time job activities of a plateauing location balancing with right successfully had the we of in and the fleet growth. project did team right timing place the making at the mega local right Our market sure

with increase optimize further on to year's productivity million to supporting specialty expenditures little more from is weighted our We're pipeline. equipment gross project a goal million, primary of than planning fleet we for acquired a repositioning. benefit last as last to fleet $XXX of our $XXX fleet XXXX, focus and and mega our year For

When equipment the used it a helping continue comes in market. sales and to shift to wholesale to actively level dispositions, higher-return retail set we'll values channels, into normalizing

Turning to XX. Slide

slowdown for infrastructure, underway. local represented growth are we of remain from as addressing and regions resiliency. utilities elevated, XX-XX in where diversification year. expanding in split facility both are accounts needs as rental full and long greenfield through growth national are rates maintenance a the provides local to as the large the organic of Local well fourth repair gains XX% Despite XX% and in projects successfully acquisitions and locations project local We term and for education, revenue the interest and accounts, quarter revenue target this continuing starts share contractors select as

private and quite government large On the new robust. still account mega national and side, is funding for projects

XXXX the and We up. our the continue projects XX% to to project several share this year win new with targeted on XX% deck project ramping of still mega opportunities

projects mega service top and specialty technology us distinguishes our advancements, logistics end for market capabilities and These X project big as to Turning expanded incremental as to Slide continue across XX. solution-based expertise us represent market new coverage, opportunities provider offering, verticals. a

to outsized activity We I'll the win expect that, of share call continue an pass Mark. XXXX. in to to on project the With mega again

W. Humphrey

with Thanks, for Aaron, and Slide on starting of the fourth a good quarter. metrics morning, summary XX our everyone. key I'm

In in results. XX.X% talked we loss million. quarter XX.X% net to are which sale. discussed, clarification, increased results classified just For quick these before I'll of for that $XXX to is revenue record make adjusted fourth increased the GAAP Canales, the core our Larry quarter, rental held a as you assets incurred already been related EBITDA has to a Cinelease. turning and the focus include the the through as points here couple

Form XX-K. You the our disclosure can also of Footnote in review

Slide to XX. move Let's

which Here, sense the reconciliation a of from in of XX both exclude we be the core A results, performed order can our give financial better base Cinelease metrics performance how the full found appendix XX in periods of outline in quarterly you Slides presentation. and our on quarter. business to

cross-selling revenue XX.X% expectations, our rental national to less a total health in specialty overall organic from education, the Based continued Mega projects an up from data, market as growth MRO year-over-year. on business business historical as and significantly the rental was on or and double-digit size while Carolina For Herc the and both rental led quarter, contributions Florida the equipment outpace a fourth and North affected. average acquisitions growth of growth Contributions of as basis. our projects than volume from in the well local grew revenue the solutions. benchmark organic result markets municipal revenue line with recent rental account to rental as hurricanes smaller care, result of

quarter -- was second year-over-year. the higher pricing in X.X% quarter the the Pricing in

mix was For fleet rent season. the rate pricing and tools the and full supporting shoulder dollar Acquisitions on year, improved rate utilization initiatives, the on market over weighed advanced rental XXXX local in with positive an and year. X.X% up fleet efficiency fleet of slower all efficiency

nonrental overall with year efficiency for expense assets the fund full was in and for interest to invest expense rental fleet sale. organic fourth was increased by income to quarter the borrowings XXXX. and Net amortization intangibles in both acquisitions related in However, positive impacted to and held associated acquisition We on higher higher equipment addition loss

[ and XXX up to fourth was catch management impacts business impact end from in relates the slowdown for newer declined operating at SG&A gained these and our was cost the of greater leverage on revenues quarterly points local XXXX. was at recovery REBITDA a expanded. maturation from ROIC margin year-over-year has our on offsetting inefficiencies in ROIC Greenfields. basis sequential with as dynamics XX-month cost Partially in nearly discipline EBITDA quarter new strong a core fleets the flow-through Trailing fleet XX%. during record prudent the market the new the the ] enterprise-wide XX.X% improved marketplace. year and improvement. variance at with Point X,XXX drive from onboarding locations, half work the of time, since the our High quarter quarter market The the improved in basis to of done the changing will reached the associated points to the the benefiting in second the of local and compared acquisitions in the efficiency the with basis XX%. EBITDA first XXXX from half. fourth second flow-through Over

made In year-over-year the revenue to fourth and XXXX a higher XX% and and bridges fleet I'll rent. increase up increase on XXXX of increase of X.X%, in offset XX.X% quarter mix X.X% rate and turn an reflecting of was in was OEC an EBITDA the give to to revenue you you the let's XX, fourth chart, roughly visual of equipment net through more rent. favorable a on Mix equipment from rental walk Now inflation the reconciliation. quarter adjusted Slide

clarification, in OEC growth XXXX revenue X.X unit line fleet the For a Of inflation organic mix volume came revenue, quarter, metric. to top the dollars and at the is came it from points adjust X to points comes to rental the from in measured when acquisitions.

revenue XXXX year growth of rental from X the of the XX% contributing the For points organic and roughly split X acquisitions. growth, full points was

year's efficient increased in quarter, new and quarter. well XX. Shifting expense XX.X% slowing maintained on rental and management, last from Slide Adjusted fleet but margin, local Greenfields OEC to effectively compared overall direct as which we the less benefiting market, with operating as was fourth fourth disposals EBITDA proceeds capital the by lower from the acquisitions SG&A on higher management revenue. adjusted And EBITDA benefited favorable impacted

maturities Higher You resulted our flow no expenditures growth flow ample in the disciplined million can business we operating near-term free XXXX. see capital $XXX to through in goals fund our and cash we allocate net cash invest as to have liquidity in continue of to cycle. and capital

in increase for and strong year primary Info a nonresidential spending industrial forecast look $XXX at in are value. model a to We $X.XX for last year. quarter, represents quarterly share. Resources billion. remain to estimated share And our which XXXX updated at Slide per In Taking is X% $XXX end starts XXXX the a Industrial increase our business construction $X.XX the XX declared spending dividend annual at $X.XXX be our the per forecast the of and are a markets. to committed increasing is X% continued of maintenance top in the strength projecting billion. we fourth snapshot week, highlighting capital shareholder to we to left, On confident another announced dividend Dodge's

levels. XXXX. increase charts $XXX XXXX. growth there's over in another reflects peak an dotted The line forecasted these X% billion over projects pre-pandemic Additionally, in for That's infrastructure

years year to America the You for largest in the projected X are construction some projects over can seen. activity you that continued we it's launching of et of And North early chart only a opportunity number whether type, that XX% year-to-year as and also projects of years This depending of we're The industry our capture in opportunities. to We've multiyear innings on the the to be next the goal right the this gives X XXXX. the the substantial year. middle of strongest upper XX% a the in project centers, these and data this snapshot project of for project We LNG, mega this chart starts stated, included to growth the infrastructure, shows trend see cetera. periods of mega has last quadrant. is

We don't trillion dates visibility start because $X planning is phases, in pipeline. out the clear this take more the of still actual there less chart those is projects in beyond for nearly year the but

course, technologies growth data projects level, account national sets, are overlap breadth you for these with matter Of but capabilities, from and some no it opportunities at the X the are service at customers there significant. to how look product companies the in for

can If year. this XXXX you highlights which our outpace guidance, see flip continue Slide plan again growth XX, to to our market you to

million the reflecting equipment bit last in aged guidance normal at acquisition and is replacement mega of the fleet be As locations. noted, fleet million CapEx our Net more excludes of between the equipment new is be Cinelease. the continued including digesting range, opportunities performance $XXX efficiency, roughly improvement year. and million. Expenditures our estimated plan $XXX weighted Starting the projects a demand versus with specialty will of and incremental CapEx, XXXX fleet towards invest $XXX midpoint to for Greenfield gross to

growth Greenfields relatively where and of local new is second the as the year by of annualization offset last with plan project completed contributions in a fleet mega specialty acquisitions revenue X% of is the in aligned new locations market existing well of than Our and ramp-up half flat as greenfield X%, cross-selling, from projects. more to rental large starts

guide rental we against year-over-year rate positive inflation Our also assumes work as continued headwinds.

with we're proprietary to most no the best, capture rental industry that lot specific longer and optimization competitive systems We've that market. our is metrics. every the us fleet efficiency going disclosures XXXX, internal This of use a price here and on transaction. the rate strategic I'll tools consistent in us in at practice. a had pricing focus report enables appropriate put of note approach Our disadvantage feedback in to

will will to we've metrics from forward our So representing we $X.XX between more adjusted billion, the precise X% of updates another X%. Benefiting directional $X.XX EBITDA the pricing billion year profitable shared be ranging leverage, operating going estimate than growth be and in past. from

across growth plenty intend with to our comes and our manufacturing, of demand maintenance operator, provides strong We to strong the cycle. the opportunity to Overall, grow invest commercial and that industrial continue we're of the we'll in our we metrics infrastructure projects financial the from to business. deliver the industrial as proven the along take continue phase markets, stability and even through slower question. on to of strategies first execute support With that, experiencing long-term

Operator

[Operator Instructions]

first Research. the Your from Rob from line Wertheimer Melius comes question of

Robert Wertheimer

the that. is of lower then EBITDA, a be question EBITDA or the and than lower versus going little bit a on a I little rental you operating revenue the be to midpoint guess, come -- revenue -- revenue guess, on whatever inflation, would and got look, I with My where on bit X%, fleet rental outlook

EBITDA leads the pluses there that midpoint on the and there? And So abnormal below? that you minus talk guide could to of any pressure through is you

W. Humphrey

Mark. it's Rob,

guiding year's X% to projecting that we're really, disposals each think line. be on X% level. will I the But equipment to last we're rental at

equipment how is board and of of that. your sort slower REBITDA margin, you revenue bit of across revenue. handle So defending in a growing we'll is that will, total the sort that's so only that rental And implying your the component sort expectations around equipment the left then than if used forecasting

And there. in range a so there's

adjusted you and from of that's sort been so I range XX get XX, running math, think XX probably The that from growth to you just an XX EBITDA there last years, of it's couple if year-end to perspective. to result

Robert Wertheimer

and years disclosure many especially, that the in is How industry you away. that capture ago, X pricing inflation? are equipment years general, years you I order think going do then offset you And depreciation there. stop the than need higher able I expense. ago, than -- to to understand more run In do higher it. with guess, H&E still higher to XX I'll Got rental the rate

W. Humphrey

it's No, a question, Yes. great Rob.

I versus on my basis, to last look inflation present a its price the right? we're don't at really, we in experienced fleet X think X this from of one-year Sort gear. X thinking perspective, the right, perspective inflation to over where our right, about XX years, we've of cycle the buying life of years, over and that has our really been majority

the evaluate that to if received date. so offset actually inflation you time, of over inflation And that sort lift of to that pricing that we've we've period

longer-term more inside much and it's obviously, overall of P&L perspective, sort a then an of the P&L pricing that's from able And be get. again, with the go offset to we So to our want that's of inflation a view. lift,

Operator

Sachs. Goldman Our Revich from line Jerry next comes the of from question

Unknown Analyst

as question move me. This rate Jerry. is into Quick for contemplate then does XQ? are your what on for versus guidance XXXX? for What Clay sequentially expectations we run And

W. Humphrey

we said, price to built for a going going is less forward, but Yes. there get answers. in we're the perspective be I those to think, as we're I expectation that's XXXX, mean, directional pricing with going positive pointed from not just

Unknown Analyst

talked more about the can follow-up, CapEx. then rental a have rental? in particularly especially it know And it. you on quick specialty data such as as relates the pipeline, M&A I Got growth to you

the M&A Just pipeline front. curious on

Lawrence Silber

pipeline around continues measured The has to be geographical a we prevalent. fit. at a fit, robust very sure We as cultural opportunities all process a Look, as have a well of types it M&A. to make take look Yes.

prepared M&A you opportunistic. evaluate is and in as consolidation. to participate market pipeline. And we continued continue are we'll So market that know, But to

Operator

Your JP next from of Tami Zakaria the question comes line from Morgan.

Tami Zakaria

My first more question strategic. is

protect H&A I'm peers big in One with your buy of those your on one states? folded to thoughts? share do of that? markets your into So are to competitors. gain once planning in some smaller How would key curious, the Any you what strategy what your And of be is or larger thoughts URI? that overlap

Lawrence Silber

think thing. specific But deals the that stable It results good we those typically really an important overall, part industry, in a we out. long-term play which more strategy. on Look, is let our of a industry. We don't is comment happened consolidation in

Tami Zakaria

comments it. That's versus directional general versus thinking then rental on how The growth And gen Got for helpful. to question year. rent. about revenue X% there? the specialty rent one X% specialty you're in on guide Any

W. Humphrey

I we mean will needs weighted this a buy the bit to little customers. see think given just more that I in Yes. that remarks said our from the prepared rent we be gen specialty the year

through overall sort the you when to think of I it's roll the that of mix fleet, meaningful. not

But so those a printed opportunities think needed. buy to buy we'll specialty the and the the at And continue end day, as pursue weighted. as of I sort of specialty we've it is bit more

Operator

of Thompson Research from line Group. the from Steven comes question next Ramsey Your

Steven Ramsey

line magnitude specialty larger revenue of trends growth that of to you even talk your overall, to XXXX thought. specialty recently and more embedded the directionally experienced how Maybe continue order rental the Can specialty revenue to in peers?

Aaron Birnbaum

XXXX, growth for business. profile especially Well, in our a case, than our core was stronger

such trench and invest Greenfields. some XXXX, into with acquisitions as will We specialty and comment that we but lines other don't And diversions. of a on our illustrate continue peers series also to build their began in specialty how to they

Steven Ramsey

what like Okay. the expected business? in Maybe can general is second that ramping level revenue half the mega in dovetail you then with just That's XXXX. of second growth, looks trend that impacting XX% showed much that the near mega half projects How you saw really national year-over-year. and growth your projects of is how that's ramping? reflect from is customers strong kind that fair. does And And in

Aaron Birnbaum

Steve, local in this and we mentioned, slowing. markets environment, term, heard we familiar, Long you've we been as have to local Yes. a But national split you're accounts. as want the said, XX-XX

been mega XXXX, XX the we will the side. project be in case. side, opportunities we'd our the that And now national So lot in envision have that specifically like more in a of account visibility have right

completely market not XXXX going view how just we because that's the that XX-XX, bit of but we're to little in long So term was fundamentals. how XX-XX line a

W. Humphrey

And stated XXXX, thought going on half to Stephen, throughout loaded is add I think I which really referencing would be we that back projects mega into seeing to we there. XXXX that, maybe were that the just what you're and that

cadence as think a more XXXX, look think we I normalized. to that bit I becomes out

a to as see a XXXX. you're we walk the from now not blip of of we going through or have cadence is what Mega growth big expectation, our So sort normalized

Operator

from Our of Tyler from next comes Neil Redburn Atlantic. question the line

Neil Tyler

A couple questions, please. of

more really outlook, specifically, cash CapEx the on Firstly, free generation. flow

opportunities around referred You've M&A. the talked obviously to

was the the peers of the assets are that you are there in multiples what softening are those? I -- realism mentioning purchase yet terms market, reflected your prices is seeing being in in available for asked that the of and wondered for whether for there hadn't and One just deals some

guess, proceeds envelope, even generate the like north I that that million single looks free should with mind, through. back it from cash you in flow be some of to plus as $XXX And of potentially able comes lease

you to that? Given landscape, that of M&A sort opportunity deploy most of see do

Lawrence Silber

have for We we'll as But certainly goes a M&A know, I past. we're Yes. think consolidation time we'll giving is that CapEx as the to and the to M&A for we budget continue consolidation is opportunistic something that evaluate we'll But believe participate around and in. good don't in on. you industry opportunities. Look, have as look

rent much. date, expand far multiples, to multiples haven't we As that on the seen as gen

rental it. that. as expect, and along recently. that evaluate but we've that's to I ones have for be certainly -- specialty growth and bit around a those be would mix opportunities on the our that likely we'll higher. evaluate future come multiples multiples as opportunities the And expand, They're Certainly, will fit could and at But we'll looked

W. Humphrey

maybe other of just Neil, And clarification. one point

I now, no XXXX, anticipation, least a cash as at that free north of And to our time. $XXX a stands taxpayer will Fed from flow be it a cash the think for that's change legislation first million. build for

needs from into model flow that so And perspective. cash baked a to free as well your be

Neil Tyler

it. Got

in that's even follow-up, really, guess terms, helpful. as Okay. That's to volume terms sort terms. average looks the limited kind question, value contraction perhaps OEC just of I in growth And in it though of going be very a modeling of

on by, points got the by guide in you've the utilization to like Is be basis you amount. to what, you're XXX, headroom to some that sort looks that? revenue able So fleet about up scope perhaps. way improve efficiency of thinking the XXX that rental push If got

W. Humphrey

XXX to in efficient I ask. is certainly, is say always and I Moving our is gargantuan embedded a to intent Neil, would more the to that of guide. utilization guess fleet basis make you, XXX points that some it our

Operator

Dobre the comes question from line Next Mig Baird. from of

Mircea Dobre

state. a want not about more California. If have in XX% your locations I to I mistaken, I'm in sizable pretty exposure question than branch know California. that of ask quick you are

to into eventually So Maybe that of what seeing you reconstruction are you sort in what's that? have you contributing business effort 'XX,'XX? do the fires guidance Angeles? your do how What embedded Los think about these maybe exposure wake of in and to your in

Aaron Birnbaum

of see I was Nothing assets. other at to in so special going the And fires rebuild. nothing from all of California. probably go guidance the that's, just emergency like responses. said we care attention needed that's think into embedded funding to of that paying We a I the those disaster the we're moment, our handle kind like as guidance. what lot But areas the the the can beginning, It's deployed in comes response. they initial a in at -- customers response equipment took be We slow is to

W. Humphrey

maybe or think by one fires as of there point our impacted I is that branches were And well. none damaged the other

Mircea Dobre

impacted. that mostly it residential for That's know good if on the was don't line. to down the business hear. ends It seemed I you that like was

Then is key a your right to the the services win and you're of -- the have you -- that margin, what offering? in sort products percentage Okay. that my with end of of terms follow-up

Aaron Birnbaum

question take I'll your part second the Well, of first.

the data than much the use center the On what will project of centers, it technology rental use go and we it for metric the on might accurate. it's the rest a our bit data business. so We the how be a probably project, much because much less how and there's size opportunity a in computers cost, the place, little into of like of

your first how On in the what 'XX, are? 'XX the question, change the it projects part of was opportunities to versus mega related

Mircea Dobre

grow look in to $XXX project your for if in the at combined spend nonres billion $XX for growing mean, I these Yes. infrastructure, is But -- here, mathematically, then going XXXX. just in the out projections starts call mega we billion. you

infrastructure. little projects something So obviously, just in that a looking mega is nonresi for captured was there's in around that. these I not And more context

Aaron Birnbaum

in majority data mean, public most there's show privately activity, think on correlation private of going sets, of the getting. traditional between or of piece best mega big we're privately And think funded. them, in the into far are -- Dodge area, the data -- and I some non-res maybe crossover, a the there but not and I I really like mega maybe we them the projects way a don't you're up that find answer megaprojects as I can are Dodge is lot that after funded some that nonres falling as the are

Operator

next KeyBanc line the from comes Capital Kenneth from Markets. Your question of Newman

Kenneth Newman

just us my maybe you expectations the bit quarter I was weaker. could [indiscernible] think were XX we year. little dollar for here know down a or this core Aaron, just the basis or help Fourth XXXX. curious about Mark I'm for in first cadence if points question, of

you XX think for up points. I core the hope it in or dollar flat down was XXXX? basis can Do think be fleet [indiscernible]

W. Humphrey

on mix specialty of XXXX. more think a goal mean, hold I mean that's the manage into sort the that I you dollar think Yes. sort fleet I -- all of a in to is it's it's Ken. question, I great -- bit to

to I on that's XXXX, . XXXX dollar fleet hold as can is think and the overall weighed on as markets obviously, to challenge marketplace, our in the utilization in nature to we [indiscernible] dollar local manage slowing the efficiently that of certainly the

Kenneth Newman

with kind are fleet my to this industry on taking when the growth in I'm approach Okay. two, industry you you here. primarily do think due if local being so, And curious, then the Obviously, leads the supply that's follow-up disciplined I'm more And assuming year. perspective? to you One, that? of a side. do of bit agree to a especially the overfleeted, reaches equilibrium a from

Lawrence Silber

we disciplined. Look, being industry don't quite We as overfleeted, frankly. really it's Yes. the been view think quite

think We've what local in disposals. we've just new and the seeing seen starts the of slowdown you're market rates. I of local really the the new in in the think discipline sort seen in I discipline activity market. is But

think going well. So as as an accordingly there's they OEMs I think have some their see report on. overfleeting you'll responded I And from don't that And I forecasts earnings. of think the

W. Humphrey

just another And maybe point. Ken,

XXXX that approach I as as fairly And fleet think a a took of acquired we well. was rolling we're into significant I end say disciplined through would mentioned think in we I XXXX, there back M&A.

right? lens this are to And through front We that the level to digest and that guide of us. that the into that so we then what look And laid we've trying opportunities I fleet we efficiency, at the to here look of fleet forward is respond some as out XXXX. see essentially fleet think in need at

Operator

next the El comes from of question Sherif Sabbahy Your line Bank of from America.

Sherif El-Sabbahy

just to the flow. cash on ask wanted I

think at relevant? Could of cash investor on parts free ops. flow you cash positive flow moving your in be from You what maybe is from color Investor for cash Day, in the guided terms the most gave us your frame you might free some outlook scenario year,

W. Humphrey

the net growth what from million laid right, think sort more and $XXX -- $XXX with to a area out I that maybe page would how we there. into moderated that is that where falling fleet I million, sort I frame, of scenario deck. it Sherif, of think, It it's were that be of forget rev

expecting think a to And at be that's cash taxpayer then place this point highlighting a Fed to are we as in again, well. the reasonable just run. fact I So that time,

Operator

Your of Gabelli comes Funds. next question Sponheimer line from the from Brian

Brian Sponheimer

taxpayer. obviously, going mentioned, you're you cash Mark, to be a

administration tax for items that brought be standpoint, on depreciation from what be would wish exchange, have are plan out to going with bonus either a that's list either coming et new that. We kind like a that the back cetera,

W. Humphrey

foremost. Brian, so administration I to first mean, the on taxpayer long. it's that focused bonus this is is wish really, sort I It's than corporate. much of But the and think individual very depreciation list point, the more right, probably But

to into of And here and forecast sits what so and know XXXX. I we've what it sort tried think is as project today we

Brian Sponheimer

Along local in given the those quoting us, any too activity lines, remains murky? election that change or just on a clarity little behind the visibility, just just is

Lawrence Silber

spot No, Yes. you're on, Brian.

gets from -- make we're -- rate still the investments cuts market, in are Fed relative it's to before that ramps or we're going think point to type to activity going the I think up to projects. those where least local to willing the I of at some folks require

Fed those it's just So there. murky, take resistance there'll projects. not I we until think type think the see initiating of that continued And it's I it's a action, to not be

Operator

call And concludes our I now will Hunziker session. that turn closing over Q&A to the for remarks. Leslie

Leslie Hunziker

our to on us We in forward joining for come. call you quarters today. look on updating the Thank the to you progress

if a day. hesitate course, please Of to us. to you have Have great don't reach any questions, out

Herc (HRI) 13 Feb 252024 Q4 Earnings call transcript