WSC - Earnings call transcript Q3 2024 | WillScot Holdings Corporation

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Operator

Welcome to the Third Quarter 2024 WillScot Earnings Conference Call. My name is Sherry, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I would now like to turn the call over to Nick Girardi, Vice President, SP&A, Nick, you may begin.

Nick Girardi

Good evening, and welcome to the WillScot Third Quarter 2024 Earnings Call. include and Chief Chief call Tim Officer; today's President Boswell, Financial on Brad Executive Soultz, and Participants Officer. website. Today's on presentation WillScot the found Investor Relations material section of may be the X Slide safe our harbor contains statements.

statements forward-looking making be will during presentation Q&A and the session. our We

operations and a to many subject and control. variety beyond which are are our risks uncertainties, business Our of of

a result, today's from comments. our As actual materially results may differ

to description actual possible SEC. With complete call more filings of safe refer results risks, Soultz. differ a that our cause to the over in For could that, statements other to and please and the our the harbor factors Brad I'll presentation turn the with

Bradley Soultz

Good I'm joining Nick. Thanks, Chief thank WillScot. everyone, us Brad you today. for Executive afternoon, and Soultz, Officer of

Slide despite our in to XX, that continues well executed a worse environment on than anticipated. QX be team As we market highlighted

of also well EBITDA of and On ledger, and initiatives were capital XX.X%, the us levels. several that to key position beyond. adjusted enterprise-wide XXXX advance were levels return free and the positive cash flow And we've near at invested record continued for side adjusted record on margins

us XXXX and On now off XX% which impacted the year. encouraging quarter footage our cautious in the tracking in construction the pipeline was more saw makes side, in towards the that QX, the both XX% a negative square year-over-year contraction, with lot of nonresidential starts levels. end quarter below of we in Consistent are delays order the and activity

accounts Similar prior factoring rate construction starts. bulk into continue is both decline decisions up project larger projects projects remains of more among to election and backlogs contractors. sensitive we to and heard from to national sentiment we made the see increasingly strong customers timing larger smaller, and their commercial the However, for point customer our the quarters, demand steady and

is a this believe portion the right. demand do pushing simply So to of we this that's

indirect which levels activity million the forecast over is top costs we approximately and our to on by reacted in quarter cost quarter, to lower quarter. This margin in annualized flexibility us quickly the year-over-year the we $XX model, the in and executed the million into XXXX the of and heading the for reduced margin positions that of Given expansion our sequential delivered to relative expansion well beyond. contributed takeout variable for $XX that and we

proven and very had the spoke cases, the X margin McGrath and So the years moderate immediate to to ambitious ago. Heading across and in portfolio. straightforward. our We're for into our the that XXXX, has achieved delivering next allowed not execute that asked is headwinds a playbook established term, exceeded continuing the we well team into it's already we me many although have head driving in XXX% milestones operating optimizing as ago. Many executing return while customers and, and business, to comes focused remain when through volume to investors to growth quarter on X-year the termination volume-related to year, headwinds X- anticipated And do we we us the those after of we're just have those extent the continue what transaction? separately

initiatives, and ahead expanding we and unique As space our speed allow efficiency to full continue differentiate investments which further Slide in with depicted ongoing to operational do on move us customer-focused portfolio XX, solutions. will

sales we service the along of QX, and with team. XXXX, satisfaction. combined as and streamlining to legacy to head optimize sales meaningful we and tools. we we QX, the opportunity from teams. In order-to-cash back WillScot WillScot customer a completed to and In leverage into systems represents improve process and we'll combined Mini a focus office processes leverage represents launched field brand platform QX, powerful consolidated the points both efficiency in we recall digital employee to our field our turning experience, the marketing under our our and and website, order further of new And heading continue to believe dispatch a drive introduced the service all operating growth cash standpoint. Optimization customer final operating integration sustainable significant major of our Mobile and consolidation these will These our customer and into of are right service that while and investments XXXX. and customer enhance organic also You

space existing when to expand to among depicted markets our we're of combination to set turn, which of combined our and new sanitation, as approaching including diverse of structures space also X, And opportunities end they of Slide new value full organic in in can, proposition entire customers storage, customers. Individually, these solutions. innovation. we incubation. offering, portfolio on expose with that core adjacencies our new Additionally, acquisitions offer of Collectively, further balanced with product a and solutions, a control offer these all climate investment, our back continue extend and differentiated others, we portfolio clearspan are to

While the new expect year, XXXX, XXXX. we of they These to expand market levers adjacencies our in and were contributions modest and run the double doubled business. can rate these course the grow represent our throughout total from in addressable their again

shareholders to anticipate during expect year. you for our to on optimistic execute our and take we more since ahead of next inherent economic expansion the the any this head our Tim Day we that on continue in and of adjacent to a which we're capital, our strategy, modest that than[ our allocation Investor continued our framework. Meanwhile, announce return a developments year X.X will and count hosting resulted Looking verticals, XXXX. capital will reduction organic next updates growth Investor new will of we capital our center those XXXX we'll into of before advancements of solutions, billion end, investments extremely with respect this longer-term in XX% Day applicable allocation views growth, our Themes human we to our in half Taking logistics disciplined a first XXXX, end platform. To up process. X-year the to and through in delivered think view, we preliminary targets technology, strong has financial remain budgeting for capital ] as set growth, to to share in X-

always, authorization, to bit per And part but $X continue billion. In driven as and acquisitions by shareholders of demand meantime, market Directors organic driven, products, our in over tuck-in As increased a will markets, to core by capital flawless in our smaller that we're including to transactions markets We'll executed pursuing. detail. surplus conditions, share CapEx we've our that of and which we'll hand available in more that, already value-added a we'll also recently Board return to that pipeline. we we our through adjacent QX our be categories milestone. With outlook laser-focused I'll execute to already free reprime as on new flow in to QX few share both and and the it towards remain Tim discuss $X cash progress repurchase our QX execution continue

Timothy Boswell

model bright not and the good and evening, everyone. positioned spots working as when Page shows quarter although did our we for plenty us of the coming markets Brad, we quarter. see of expected QX, revised Thanks, XX recovery outlook out is that give of confidence Clearly, the summary stabilize. out a and play high-level the

contraction square we've the since impacted footage and deeper been That expected X we years, largest and has For construction context, of financial nonresidential in volumes. seen contraction crisis. the global longer has than last the

our flexibility margin allocating share tuck-ins both as those through we the cash capital the platform. with and returns, has However, technology shareholder we last flow margins into and per a the moderating with XXXX. Meanwhile, improvements to are given playbook months. ROIC XXXX. flow leveraging progress flow increasing predictable volume as free a gives historically, creation, XX effective we stable over free back value XX% improving cash and across are organic opportunities, cash year, structure familiar quite which flow formula and adjusted into structural and us cost supports remains best-in-class are in free heading by headwinds and progress and been as and remains conversion implemented, Free economic expected $X.XX we've to cash stable our

we team. strength the So platform strategy, quite and of remain capabilities unique WillScot in our our confident and the

primarily Revenue X%, $XXX by leasing Turning were These in volume were installation to revenues delivery revenues, revenues X% X%, and of well leasing revenue. respectively, Page offset year-over-year, headwinds and by as storage which which VAPS, both million impacting up driven X% modular declined respectively. down XX. sales in XX% and were as

up results and XX% products months, of we've value-added X% delivered been rates penetration delivered modular So overall, prior expecting grow last this in quarter, rates to rapidly the with Value-added third products units average with inflected versus penetration which for for trend over the offsetting Storage and rates real rates X% excited a up no up solid average to rental some quarter, X%. average up year-over-year market place customer recent up pricing continued to change rates time storage. up improvements monthly trends into next with heading no XX%. Growth in stable modular to And X.X% and are other challenging competitive environment the to monthly putting Average effectively. There I'm storage quarter. year our a portfolio rates the rental about we're were changes more offering testament in proposition. value monthly underlying systemic the present rates across in rates and is positively these XX the of real year. turnkey modular average

of sequentially. In we always our revenues pleased expected the half was $XXX basis up up XX.X%, up generated profitability, year-over-year XX approximately heading year last we the to at of which continue basis and X% margin expectations. points relative trajectory of in terms the margin in so said, itself be XXXX. That versus EBITDA, into adjusted late a quarter in of our million XX margins We second year, came to expand to with points

offset variable executed annualized reduction the million approximately during reductions executed the that quarter. $XX of $XX million variable cost with takeout So in on we That QX. that that we built of indirect cost were over cost

So full another based year XXXX. next year place modest on into that, sequential have continued on we the of expansion for margin QX and we heading in into expansion initiatives based year expect

adjusted disclosed QX, per cash in our last continuing share fee, adjusted adjusted we approximately months. and back September operating $X.XX of earnings adjusted McGrath XX million, EBITDA $X.XX per of performance. This isolate of termination incurred to quarter and resulted the and the As broken of operations have for $X.XX free we $XXX including metrics financial in costs, the $XX the from million flow these share backed over deal out million, we diluted of $XXX of income adjusted in

Moving rates run activities Net expenditures lines. Again, capital organic primarily a year be to by were X% continues a quite was $XXX property costs, cash deal XX. and for free would year-over-year, XX% $XX year-over-year to were provided margin. million broken deal $XX due quarter have up accelerating our adjusted million, newer in operating flow with to sale costs. totaled up in to the Cash broken product large Page strong excluding million last and QX $XXX million excluding

we our business XXXX. of very overall cash So free flow feel continue about good our cash And trajectory the heading efficiency into conversion to model.

months, towards cash visibility cash a XX free and share share which count. That's XX% versus yield last cash $XXX cash track at business. over today's the Free longer-term up milestone. down the compounding million per XX% million an remains prior of an cash a free market, $X.XX our adjusted flow flow at cash market Over Cash in remain represents LTM flow free free represents X% strength share the is XX adjusted share flow our period milestone capitalization. margin, $XXX our and per rates and per on of on on year flow flow free we mid-teens totaled September $X flow incredible

ticked of revolver availability, are rate allocation choose, excess internally We X/XX repurchases. and have deal and quarter, to XX% by leverage standpoint. Between our Turning EBITDA interest and cash Leverage approximately of billion our capital remain to we year so we resumption months capacity to swaps, so costs last is we the net X.Xx from to up our approximately due our breakage our turn account have when generated target payment X.Xx a inside significant structure unconstrained floating XX. XX% to XX per Taking and into fixed of the range of liquidity. Page $X.X turn debt in rate. debt X.Xx, adjusted one a to of share deleverage flow

have So higher bonds interest continue and exposure coupon opportunistically we opportunities interest immediate rates to have moderate. rate if refinance to limited

cost year. pretax XXXX at average weighted our XXXX, senior our XX, September of notes stands As X.X%. note debt in secured mature June of I'll next

repay notes. We to ABL have simply on XXXX ample liquidity draw our revolver available and the

Investor we optimize largely some or $XXX line capital. Page flow, the XX with to choosing the and with of CapEx right-hand over thereof, capital our outlined options shows combination ABL the cost million our much cash remains bond to in of likely which the year. XXXXs $XXX generated XX framework in of a the internally consistent between and So last capacity available at XX allocation we over into market at our last have $XXX refinance chart, months, Day. months, by our time the range of increases very our the to million our target guidance end framework million XXXX net the In of is multiple

months, over shareholders. We've $XXX Over $XXX which which period, costs period. Clearspan the highlighted the our in were reduced share by were this lines during of the of have year. majority we approximately deal last returned last QX count product over acquisitions, LTM million to to cold and this $XXX we the million broken primarily million allocated storage tuck-in XX months, the X.X% to the And XX in and

it's However, that behind returns our us, how forward. see framework move those will reallocated to are to in we capital be and easy as shareholder

Just over in delivered had have high to past we we the the would that share the repurchase. XX% growth free capital cash teens allocated example, as the flow that an per been year

allocate, again annually framework with Investor discuss based consistent extent we've our $XXX billion. the with billion in detail So will on Directors repurchase increased allocation of share adjustments, how to cash strong returns. Heading visibility, continue between in available flow into we And our last and to capital the to critical we Board authority Day. capital to the next we rationale see returns XXXX, several compound overall, years. million $X our and for operated is $X And of we how to is make at you our that September which our

expected half of XX our on reduced our reality outlook a Before turning of year-to-date to is outlook continue a to first said, this the that are into degree expected, for half, headwinds absolutely deeper performance to Also still it QX, customers Page our political Based volumes. markets from the than likely meaningful back operating Brad, rate shows moderate our not reflects of improvement primarily our run our in volume to into midpoint XXXX. to QX and prior headwinds to margin our lower revenue billion relative although assumptions meaningful nonresidential around expected for landscape, XXXX. do the even that adjusted we and QX which rate EBITDA, revised visibility entering and seeing XXXX and as on are we represents outlook. That full the interest certainty that more as second longer we the we we've positive side, relative we construction despite into to But expansion in and progress the continue leverage XXXX, bottoming July. we get $X.XXX the

free would margins, anticipate is trajectory markets So when base XXXX. for capital stronger clear all towards on and are flow disappointed respond results, with which stabilize, are powerfully short-term still the while cash what our return we longer-term invested our case we in and

for So current share we at to year. our thinking about least want that framework

are today Our beginning moderating improved certain as nonres declines for incurred we year, year. flatten through to case the see sitting balanced for XXXX underlying we to both in continued organic base scenarios, This longer-term which execution which deceleration starts and areas, and we all in be in opportunities. headwinds some we'll XXXX, revenue the acknowledgment and supports the we prepared opportunities is here assumes progress growth double-digit for we see, a and will have the volume do contrast commercial expansion the margin think be year we'll recent opportunities. tangible of newer and modest all combination developing very the of Obviously, lines. That actively supports and product across growth in upside we've

sitting here year. organic for we the is today, internal set the this to generally targets our So using framework are

welcoming with shareholders, before soon. the in look our transparency second strive with with our the expectations most high for and to assumptions, from partnership of appreciate our holidays we insights year, to ongoing you with you of Phoenix, in customers. We always, likely first Investor and over coming our Day welcome As meeting next for forward team have half XX,XXX operating the many our details

any that, closing So with Brad, thoughts?

Bradley Soultz

quickly, trust would Tim line for to you you thank said, just shareholders partner No, customers solution critical continued customers; that space for with other to please needs. Operator, our as continuously I'd meet open XX,XXX like while the their capital, Q&A? the employees importantly, caring for and our for the most our bar us to each with thank raising and

Operator

our line Schneeberger And first the from Scott will Oppenheimer. [Operator question Instructions] with come of

Scott Schneeberger

start I'll to a with pricing follow after going then off question. and volume the I'm question, with

volume shared what could it between glimpse behind of of maybe volume repeatedly storage modular volume So about XXXX, and you a why for headwind and just moderating substantiation guys view kind break the -- were referenced thinking the moderating out volume and the segment? you little -- the headwind some you you put

Timothy Boswell

this I'll to Yes, on you have average is versus year Tim. prior Scott, that look closer been unit would deficit I down Entering X%. XXXX, at mean about start. the X%. in QX, rent if you're

heading to converge, QX. And of the similar dynamic expected continuing rent. you coming see of units on So Sitting October, not rent XXX,XXX I'd are we in pushing towards we units a see into although storage. in out expect the degree here to today actually end that slowly on

QX. if we volume us in XXXX, into into continues, that sequential degree although, not business, than seeing heading smaller puts in in build again, XXXX to are the coming it we we which had deficit again, So storage expected a the

year, means headwind it we business those on forceful to other revenue have the is as as would this lean drive that It that we're means relative we talked about levers that in just the been dynamic can entering not growth. lease which that's So to. referring

Scott Schneeberger

Understood. Great. Okay.

you for with bigger On modular now? is, VAPS to share picture have core that for storage how you metric up in right then the be rate? And the delivery pricing deck referenced the would modular categories pricing rates the the slide the regard perspective, kind of XX% there's a storage could I'm and what is this integrity X% curious, both year-over-year, year-over-year. guys that up

Timothy Boswell

maybe to monthly cover start increase Well, rate you one saw the from just I meant I'm X.X% me around up that sequentially you it. We question expected saw average QX, Scott, VAPS, year-over-year. of let so not storage to rate core related I what back as rental out -- is come And QX understood Okay. to it if call. we sure as don't -- coming the QX that modestly exactly we which

break take have then storage storage VAPS up year-over-year. And you of that. was contribution about the If X% top controlled out climate the that AMR and you down that, traditional on of

also is to again, called of on X% have up area unit been where little X% So third-party in Cold billing rate correctly excluding cold, that stability XX% right in up That's last delivered sequentially year-over-year going value-added we now mix that, of move storage, story, course a And you excluding year-over-year story which in rates, through of the year. Not an not year-over-year storage, versus up year-over-year services, rental traditional it's is stronger going it a the to X% of modular, VAPS, about encouraging would average last the deemphasizing. rent is for of the September budgeted a change have VAPS. ton that the was portfolio. pretty volume quarter, spot kind see continue become about remains on per year-over-year. And in of AMR a are spot up modular increased the unit which of in in the unit XXXX. course overall, yes, of if rate rent moved this continuation meaningfully that with into more It year, about X% bigger although degree some year. But we the would year the seeing where the storage to up out quarter. about than in products have you a time were rates, but then average we exclude we're rates through this rates

Scott Schneeberger

opposed kind categories. you VAPS the get core I spot was confused looking was the I on. way Yes, trailing the two VAPS mention, rate Yes. with got XX on in looking to of to for it for it That's but just pricing get really the spot. the weeks isolation into to I as

it covered a you bit yes, So there.

the And wanted two Just to you you it? directionally, is particular, covered how feel to it, if categories, add fine. that's spot of trending a in modular you'd sense of get like anything in with or each

Timothy Boswell

of you not modular, seen the might a it's of little in complex haven't is sequentially standpoint. spot from weaker by surprisingly, right? trending takes some year. offices, In just break course into it are as the a But ton through down an the going sequentially Yes. stronger movement in and as portfolio ground puts there next example. as overall, We product year a level the fleet, flat, a expect, little of of There the mix you category, kind flat

Operator

for moment and William the Tim next come that will our of line with from Blair. question, Mulrooney One

Benjamin Luke McFadden

Tim the it thinking This your modular business. are on Or the coming the we is need start transactional come. lag start next one of to With how this more expectation side? curious that component cuts on the [indiscernible] the about back side see coming around to Maybe units improvement we more cuts further on do Is to about year? just before rate down, of at start see here? Just really rates should to modular we you to we a interest Mulrooney. few kind rate think as point some see for

Timothy Boswell

This and perspective. can I'll is you Tim. start, add your Brad,

of the magnitude I as think cuts. as is important certainty the

lines. And the in it's the at performance be volume to equation that more maybe just longer. our maybe takes when benefit the bit the market either can Certainty way, only estate of hurdles. black look simply real certain allows white transactional a a didn't the to which meet white business, year-over-year market has especially different stimulate contract on product commercial of and all cuts economic relative from it long. just populate So then net otherwise coming [ in product actually you slightly among ]. modular, single we whites unit lot projects of But And year up and adjust, we're as is the with product been complex terms that. we lines black on a as that pretty within rent glows transactional the And and that it's the tougher FLEX and

Benjamin Luke McFadden

That's of Understood. helpful. just storage then on business. one maybe of the kind And the side

you quarter, XQ sequential maybe outlined last the of XQ, it more think previous expectation slide to of step-up retail retail versus an seasonal, for normalized in on expectations. trends more I like around seems a just some in XX,XXX the bit from side seeing and deck, storage units commentary kind on of but from pressure the based

about the should the business fourth dynamics quarter? curious heading any we storage seasonal just how retail side So into of the on think

Timothy Boswell

retail The of side out much QX. like is very expected coming shaping up we

XXX,XXX you probably we'll a I storage October with expect for on on yes, rent that to near XXX,XXX the So minute units rent quarter. the said see as ago, relative end I on average

storage. we're So both seeing and across that absolutely modular build

coming back to you with XX% kind reduced If lines. expected out we QX. We've retail of performing of overall line QX. our outlook all today pretty in product delivery But much component about across it expectations our what is actually contrast just where by was the in

Operator

that for the Research from next One Thompson moment will question, Steven line come Ramsey Group. our and of with

Steven Ramsey

nonres of year great a being XXXX about activity. thinking Was

back look I headwind you more in at about coming XXXX this where just starts current? units do where you units against to duration time thinking this look the you start if X-year of entering those lease at a you environment. see average frame, do this to the differently, or it were guess, double as You're low

Timothy Boswell

forecast question. really unit size, year returns the numbers: the it's XX,XXX is is tends of rent as north on good to volume probably an just rent. I is in on returns true reverse comes this units the modular, if have just this proportionately. to been Steven, extent portfolio to for It's would come XXXX, and in down you Tim. rent give And down And of look a some round to over back Total units XX,XXX just on

the on seen down, it's of the actually storage the equation side and we've So side more come return pronounced of the even business.

we of tends because just in kind think benefit bit volume about bit this portfolio a on rent the from is of that because the you actually That be a talked simply dynamic some of to smaller. get return little mitigates the I a headwinds last quarter. a new unit a that little portfolio demand bit

Steven Ramsey

Okay. helpful. slowly but volume progress to commercial portfolio environment about starts as these through have, roll bottoming playing think That's initiatives? thought first I the you cross-selling then that with think improve benefits out curious that you And then to wanted wider and you with because your than about more of you I'm come what how

Bradley Soultz

and sales complete and the combined the two Yes, ops optimization, effectiveness, I'll scenes, teams in this is behind year a digital customer tools, unveiled portals, Brad. start. And mentioned I portfolio demand legacy cetera. my sales prepared of the remarks et we

have I effect And And selling X don't in two the basic need as tools really we as the different everything in think is of place now. into digital all they place. went got in team now it's products. We've majority those selling the one So everything. And third people quarter. different tools

gives it adjacencies again, and of into us, only some So that excitement modular and into these then cross-sell more really look we the not with the back gain further adjacencies can storage into and traction core. XXXX we from but as beyond afield

Operator

will and with Andrew line the come One that Wittmann of question, moment our Baird. for from next

Andrew J. Wittmann

guys wanted last saying guess, I into bit you quarter, were relatively that a were you XX%. activations were this to, And your modular they were I little X% flat down saying way. down dig Yes, your I different in quarter, guess, the were basis. I the think a the that I activation, storage, they -- on Great. slide in volumes activations year-over-year were guess, at looking

even isn't weaker if last -- a and sequentially, aren't why I that softer, next I'm were thought So saw volumes this help stabilizing not I quarter? little clarify activations are you the guess, could activations you were maybe of understanding, but going be it flat that. quarter kind why quarter to volumes weaker, bit

Bradley Soultz

in despite this to and That square let tale the is Brad. second Andy, a two was Yes, jump of nonresi trending first you through flat are Tim prior quarter basically foots were But correct, We'll a year-over-year, the year. activations basically modular worlds. down bit. quarter being

You effect. mitigation, projects smaller quarter, mitigating drag, larger projects. with continue that. will, respect outsized complex to had touched of see right? which construction with We primarily on drivers fully And a we for the demand fleet, that to the mega number just In you still our was third full we have if driving didn't the

Timothy Boswell

add, sure Yes. to business. I'm in have the modular than a not Andy, other lot I more

have to of we year both is the volume lower slightly. unit on think return back end I But expectation modular last and assumption across relative outlook, storage. our the pulled rent certainly,

I talking of So plays pushed when this when it's back we out, I where relative bottoming right to I said think July. in XXXX were to definitely -- was the about and forecasting kind in

Andrew J. Wittmann

quarter little do to the in improves average or quarter? question ask Got does is, it. better third the on rent think different in the in a the the that the fourth ask question X% units this maybe bit you or more decline way a quarter fourth to Maybe way it decline in

Timothy Boswell

deficit On in around there's right probably modular, now. for modular, to where close we're X% we're sitting I think that storage, the deficit Andy, potential certainly on continue to and that

Andrew J. Wittmann

Okay.

actions cost million quarter, so so million run on about rate, of talked that. a a wanted stabilizing talking talked that that basis? equals annualized of the Sorry, just about spread some are just think relative that the $XX million $XX million something that million I also quarter, annualized you plus annualized in the you on $XX clarification $XX an Last about. one. Was quarter. on $XX we is you should to or And it number, So Was of a an like million then guys $XX $XX as clarification that quarter? wanted this I million

Timothy Boswell

Andy. in $XX would planned July million costs Yes. frame, relative lower to It what the was have we variable time

our we the we activation the would million one the if So gladly cost in that right? And with out got goes that that is that's of into through the variable calc. of The percent adjusted our reasons to the least business. that going say, the you in or of annualize and XX-ish the up of SG&A despite volume that demand operating takeout coming impact is probably in $XX $XX in play of in the we of the to margin volume that's you QX, million million we've cost variable that progress the appropriate line volumes variable is it primarily support did margins in going cost out pulled that $XX absolutely leverage SG&A -- But EBITDA put saw into of the business. the XXXX." Now flow-through million into as gross So leasing actually kind annualized We $XX and cost quarter, see driven, back quarter, tailwind business. see of flows and at an we forecast of supporting profit right? a not "Hey, and that headwind

Operator

Faiza of line come will that and question, the next our for from Deutsche Alwy Bank. with moment One

Faiza Alwy

Yes.

clarify to the reported modular pricing? for LTM confirm So Can the pricing sort pricing, is both storage relative spot on what and to between gap or of I you wanted pricing.

Timothy Boswell

Yes, Faiza, the flat, growing spread storage cold XX% business. a the on it's but on storage, about side modular, on spread. of about with favorable And a it's

Faiza Alwy

Understood. curious, and of And in strategies light should we in ahead gaps those light inflation of think your how XXXX, I just decelerating? looking I'm about pricing Okay. guess into

Timothy Boswell

new excited sitting I kind just which have a platform next system. We're the price to as recommendations Faiza, we configuration a actively here products. change be very bundling to some new into goal reimplementing building Yes. per pricing would there's system. there quote to, further that year, our we of any again, about are concurrently our AI-informed now, right will populate we'll fleet also very, and say, strategy technology of say of I'm quoting automate And and but is into not out able products, just then value-added complementary kind the go

building are proposals for reps sales As out customers.

we're customers business. year actively value-added think, out-of-term examples in of out-of-term and parts contract on both year. We those which one solution, average. which right we looking of biggest increases, opportunity -- testing is the inflationary One to think cross-selling A/B the is, behavior, reasons they first you'll different actively of is doing the different stability working the many majority units of we're own out-of-term a and probably The testing as challenge is But vast at the it our the on. And go sometime. half next so than that. technology in in on process, different products continue recall and the go our strength one interesting for. That's to as longer to live the just we're we're rate as into help pretty next retain of the them that tools relates example I business actually I providing storage actively of portion the in escalators AMR We're seeing of in see of programs

Faiza Alwy

Great. really just volumes. then And can on ask good color. I That's if

do units Just your how think data, construction to or sitting whether recover? Because on quickly to that we've ABI and volumes under how lag of you XX. I typically, at -- ABI -- you ABI and we've from about talked looking the do XX- been outside, still like think it's generally, can sort is like XX-month know the quickly activation there's rent,

macro And us of as sort do of you there? give do from think sense see do need of when a what to to what normal? -- a we perspective get you So

Bradley Soultz

is Faiza, jump this Tim and can Brad, in. then

the see in seasonally. about you'll think of and you If January, both markets slowest storage, February, for basically part just year are activity. slower December, core underlying modular November, the the It's we

joke in reminder, if year is we'll would who's in, White core et of clarity see start next will, to a House, quarter a see be little I rates, as you of would there. It to those kick So improvement and sequential improvements see that coincides from terms the benefits March is with expect in to really cetera. start the expect of probably any the when in also we'll And earliest certainly, have we really second we could which volume to also, top a aside start markets. would driver, on back retail remodels when be

Operator

next One of with the moment come question, Stanley. from Angel will and our Castillo for line that Morgan

Angel Castillo Malpica

And heard last today, back kind I the I XX% latest between seems there. I on is of to you if that, quarter. Again, correct, if what apologize and that of if that on and I what's I'm misheard say, inflecting? on that XX% clarify has apologize maybe lots the it numbers, just modular. if wanted I But not guess, just AMR is side. spot to XX% down going AMR I Just the answer, driving thought I of spot spread so and Can if spot kind misunderstood earnings on the was you confidence that imply the of kind modular to come mistaken, circle maybe on? that in the is And but that

Timothy Boswell

and XX% last Yes, been on I XX%. that modular, think down we at quarter from were had

year, I last forget periods that. exact I think the for

out X, that's just flat contraction mix the flat the going compression X from So more out it spot there definitely variation. than course some were seen year. is the that was the themselves. I But volume the course spot, year today's has And today's through units product any sequentially of which of is and the has X, on returning there. That's through of earlier back in rented going been spread. that sequentially X, modular ago that years call older units and rates a going out we've of with been at you're going spot spot stable said extremely the

Angel Castillo Malpica

earlier to follow then up I commentary on around And helpful. Very wanted maybe XXXX. just some

that of below what we continue second contraction first and just -- be think you half first the the a Is of you you that to and I can talk half And of demand, as perspective? with heard things to that this the some second 'XX. expect of should a we expansion just cadence think about more envision right dynamic cadence around now, maybe maybe do your we're about you margin are -- a combined it's maybe kind bottoming growth that half the conversations some still will of as therefore, bottoming on into I half of of kind well non-resi kind improvements XXXX kind do continued as say that? seeing be of going year? Or if to from

Timothy Boswell

we're it newer the a with it's And recipes of real kind we the little kind Yes. just pricing commercial you a our stabilization is that is It's planning couple a we've on margin, think the scenarios standpoint flatter our talked the own year. We're product initiatives you about, early probably through the markets, of that in think we a that different give lost some expansion, first progress speak. Brad some growth finishing between year for then on control. year can with I a different and year of because assume different crystal probably appropriate momentum the going have the year half lines. are our from as a a speak. On drive -- to of revenue sequential very as modest and growth and margin of recipes here. But working got levers the to kind basis, year-over-year of guidance I clear process for

Operator

line Patnaik One that the Manav Barclays. from of come and moment with our question, next for will

John Ronan Kennedy

has a question about a on confirm multiple-faceted storage for please acquisitions McGrath also please diversification expect typical a This FLEX, to clearspan, standpoint if referenced a is I thing then Manav. do a benefit talking organic cold the of you I In I and quarterly is storage should front, on market for Ronan from percentage for a in in was a potentially have possibility this we the the approach, of there. Kennedy ability stability, an there was as consistency think activity? M&A the about standpoint, buybacks, somewhat $XXX capital million spend type impaired in catch-up M&A think commercial that Could your is cadence expected it in some FTC on larger been then legacy from investment Is allocation, On CapEx, to review? And where in occur, education of entry end refurbs, clearspan key think primarily assets a cold result I how and and adjacencies? And the for possibility? into should basis? on may, we

Bradley Soultz

about else over From large $X off, tuck-in into cold so a one that knock forward. adjacencies. has of been billion looking think has there. I'll acquisitions. About I Tim perspective, in a and is storage modular. Well, jump the several way then new to pipeline majority lot last over back right with and been a the there's X/X little Everything years deployed clearspan storage, looking We've a think in.

growth So deployment growth, out M&A put we VAPS we and are repriming XX% think I mentioned But an there and I feel to still don't we I remarks. that during maintenance coming of prepared the that the to pipeline fund capital to forward, a assume bit, transaction. going -- work back tuck-in my and ample include expect as in And any of like pipeline constraints undue are continued there's into see McGrath for these adjacencies. new will

Timothy Boswell

last you XX pie to months at the Page if the go capital I'd shows Yes, up of in Ronan, CapEx expect deck, right-hand a allocation. bit. $XXX XX chart the of net look the million

year year, than year, the of think was CapEx the QX because last are I out this we As organically. be growing mostly finish will that higher it adjacencies

costs the have account, in And we is time repurchases, the was think of the a into QX fall will deal is been acquisition allocated take the bit scenario. lever as also timing off. But just yes, platform terms in repurchase would out to volume be a that but which adding year, you should we see framework compresses that close back larger you've very last believe the returns. much magnitude same. $XXX deployed LTM year $XXX got the I the under and steady because overall, over And million that to that compound consistently valuation of tuck-in on a there can million of basis, we that,

John Ronan Kennedy

it. That's appreciate helpful and I

a is was I factoring timing White House. election had joke into On mentioned -- in the there clarification House, and think who Brad the be on decisions on will the White

political or red seen, have customers there? assessed more business? political energy the assessed you I implications the so administration, from a have think, risks of your kind risk potential or the sweep modular of Trump that Have right-shoring you you you hearing impacting Are or from onshoring, demand Harris or blue for respective potentially

Timothy Boswell

or I've a is Tim. one amount recently. is certainty been what this fair than a it other. Ronan, about I've on the more the heard preference is about And way road

You've the so got heavy two I on ticket. think, spenders,

government huge there market don't the and way care that the type shifts support one really we market, to I see but much. of of mix So or Maybe end about a change other. don't

be services If just on you there. don't We with need green is. Well, one that manufacturing energy. end and get more the much to our depending less activity change really activity a the little market where

consistent know these we're customers item So it's And pretty over later not sales it sites, but losing small than given sleep some, heard that a shorter, been a of and quarter. want but been drumbeat consistent us paradigm a what major kick just have may many that that given they we're either to during off the such clear we they're cycle retrospect, project. a built think has little outcome, on I be I operating pretty think in bit the in when for spend to tends project

Operator

Ng of Jefferies. One the question, moment that Philip will from our next and for line with come

Philip Ng

Tim, appreciate early for us an least you XXXX. giving framework at

modest You're calling growth out margin expansion. and

us do on for predict. unpack you're to be like how you you because rent been year? can comments, next just likely year, how versus help rent, think will you units on in tough but great. of about growth thinking your how So just about on AMR a sounds little unit more pretty I want it But perspective on control units it's to get down kind get rent that's next on Based

Timothy Boswell

Yes, not was to It down the the year. down be to it degree again, this start to year, although, start it same will has.

that in think to I earlier, different have headwind a talking framework we've year, can't powerful exact predict said modular KPIs out moderating of I is the the a there going to of like pathways play and couple very this still So deliver tailwind very the really course are what see mix still a through about. We that of AMR. the we high-level we're got Phil,

we and inflicting -- traction which good VAPS have across life time. VAPS, inflecting We of modular this around in signs storage expected around begin to

on said I pretty his record multiple all track game commercial you've through we as win and have have newer as I in run ways of of has as And margins We in kind got optimize product Brad XXXX. the doubling the we've next processes the that the technology primarily to got introduced potentially a lot place, through of the think see a and offerings. as think portfolio. across go to we we then rates leveraging where the clear. And the we've some volume progress there year, operational new investments that's And margin front remarks, been we here, put additions

KPIs levers expect different looking here at process. we're today. the of mix are in those than up And being ends budgeting leasing you So sitting different a that always the

we've got sure to the different our So to job is ways make result. deliver

Philip Ng

Or seeing Tim, call it, I the And that spread, know AMR that little then, outlook given can more storage, pretty I last see high demand growth quarter, based growth just next then is AMR I storage? a in different looking flattish? for you actually think it, little some modular. Is could looking on today? you're And but on you cadence thought, deliver, spread, call that different look mentioned year in than the single-digit, algo you the you're confident does you the think

Timothy Boswell

from to up they now up Yes, we pulling begin the the need see AMR. pick containers traditional on to spot rates are where

the traditional benefit cold in up, get XX% products storage growing QX. to a and storage mixed value-added going year-over-year are from in a I it get the category You're population, believe was absolutely --

down So currently if modular with low further upside that's the by probably rate improvement products spread just and that brings services. storage and mid-single across no value-added setup digits, a probably spread with but with into divide in spot that X, the for XX% you you

sitting visibility got. here So now, that's the we've right best think I

Operator

would the call queue I'm Girardi like questions this Mr. I at further back turn remarks. Nick now showing the to closing for any no to time. in over

Nick Girardi

Thank Thank interest in your for Sherry. you WillScot. you, all

please If you have additional questions me. after contact today's call,

Operator

Thank today's concludes you program. for This all participating.

You may now disconnect.

WillScot (WSC) 30 Oct 242024 Q3 Earnings call transcript