Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the McGrath RentCorp Second Quarter 2023 Earnings Call. At this time, all conference participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Conference call is being recorded today, Thursday, July 27, 2023.

meaning that that the historical prospects, XXXX, are forward-looking relating within company’s note be management facts the including begin, Securities to as statements today Private targets. well full or discussing not the financial statements we regarding the Act strategies, year company matters will are Litigation our Before Reform the XXXX of outlook, of expectations, statements statements of as

involve not differ materially These cause and of Form projected. guarantees significant forward-looking disclosed and and our to risks to from SEC that performance results Important are are company’s expectations materially XX-K other under cause could differ statements company’s actual results could uncertainties Factors future Risk the those filings. the factors actual that from in

only made obligation assume We of as by hereof, forward-looking the no required otherwise except statements. are statements Forward-looking as law. to any update date

issued the X-K filed the also today, press company addition Form its June and release In earnings quarter XX, XX-Q for XXXX. release to ended the the SEC on the with Form

Chief will Officer; today Hanna, Financial Executive Joe be Chief and Keith Officer. Speaking Pratt,

I Please go Mr. will call Hanna. turn sir. now to ahead, the over

Joe Hanna

everyone. call for our pleased Thank Good us on joining our quarter. second Thank Mike. report impressive you, today. afternoon, very am for I you to results

transform This our into the company business. XX%. result XX%, is performance increased and efforts the increased period, streamlined rental EBITDA the to For our revenues increased revenues XX%, a and sales focused of more diligent

another and in million are outlook respectively. revenues and as $XXX strong EBITDA to expect million, for consecutive and of and we that $XXX to say results quarter increasing be we paying the these confidence Reflecting delivered shareholders. currently million can in efforts range million another business, to $XXX our XXXX off $XXX of I are adjusted our our quarter strong

implementing our very strategy. been We have busy

results The Vesta and of and McGrath’s for on of we As business strategic in business mix completed year, XX% as divestiture quarter of a February reminder, our acquisition the total shift can accounted seen Modular. our revenues of X Adler EBITDA. adjusted in second modular total be this of XX% our

Adler the those can by be July. new activities to provided the the is support transition customary and After support end sale completed owner, we of completed,

have teams to Our very handle tasks integrate Vesta. operations extra am also the taken they normal those on grateful work run hard work for and while selfless their effort. I and business

Vesta of Our is integration planned. progressing as

reviewing new efficiently function have in detail to opportunities more together. We been

commitment are in a Our realistic, in this making investment and million that is to result as deliver $X of synergies acquisition our we EBITDA focused on happen.

of significantly a the opportunities, more I’m as effectively to together. terrific Vesta Strategically, larger coverage more resources, McGrath brings geographic seeing are combined we operate examples of that report addition already solutions for acquisition how these and happy modular it to us building a is businesses provider. as even

For very our combined and resources front the of group, and excited across we in fruition, country at opportunities are us. example, the bring we to solutions to expertise more projects are custom in modular sharing

other each know I contributions impressed new the and members. to get by better, team capabilities we and our to by go Vesta weeks continue the As be from

up both core and year-to-date Turning during business healthy Despite quoted addition. was fired before and Modular. cylinders the engine activity Vesta total, our to quote second macroeconomic all business the rental In on some Mobile quarter. education uncertainty units our were commercial

XXXX years a May been has full acquisition. our Design since It two Space

geographic advantage provides us. enabled Design growth, the Our further the are we for business additional that investment coverage of in and rental revenue Space taking

Northwest, to had an in by example, no where Modular revenues our XX% As prior quarter presence Pacific grew in over acquisition. rental the that second the Mobile

important, acquisition our to we Space Vesta applied acquisition. Design the as have Just from learnings

from increasing Vesta. the is Our and process are organized, therefore expecting improved of we better integration level success

focus Taking business. our few Storage minutes a on to Portable

Our to levels continues Quoting gains and continue team to pricing be year-over-year. performance rental strong healthy, XX%. delivering a show of increase revenue achieved

opportunities acquisitions. many to tuck-in have with business grow We this Portable both organically and Storage

up same opportunities rent also locations. new containers to In from the addition, the acquisitions Modular opened

We all tuck-ins Dixie, Brekke Inland end two of in the closed just of second and on We the are executing quarter, the these. quarter. after Storage another first and

a To acquisitions provide in over months two fleet we for what operate business. units, we a branch X,XXX color our now some to no jumpstart to on to completed This earlier way wonderful from do and and is a additional tuck-ins there, business the build. customer tuck-in had ago, six us, with we can Colorado have a list of

is opportunities The them Our grow. well, and Portable executing many to next over tuck-ins have high that been has Storage confidence plant continue from years. I growth geographies new in pipeline and possibilities flag will to of begin team we the to have for see robust, we and strong several the

our business. to Turning TRS-RenTelco

quarter Softness continued business revenues by with in X%. rental the declining and second computer into the semiconductor

to last The we seeing in and were is semiconductor any in verticals flat account. market year. single other The the concentrated slowness broad-based accounts are not

from it project believe the customers second demand there more cash half are conserving and are plans This in that as the year fluctuations projects that closing in appears to the get of moved the that some from of to are result reality. from the longer many been queue. should many industry severe recovering taking have resulting is opportunities We pandemic. planned Currently,

and We before. have cycles this successfully seen like through managed

our has team important steps been several to taking results. TRS improve Our

and selling been fleet to improve the have utilization. We right-size equipment

availability appropriately. have purchases and new our matched In equipment addition, we as ensure to continue will needed inventory and reduced demand are

a Our quarter-over-quarter, the remainder efforts work for fleet will progress further small of the to and we make resulted year. size reduction in have

the at the of shared TRS in management is they’re high, competence focused before, team As very and I business level our have optimally. ensuring operates on

back the growth. opportunities we more continue have be half the could of As to pleased our with XXXX, I not we enter robust

a and in years. lot a of next opportunities runway focus are to EBITDA our few grow have to modular We to business multi-year continue for the effort on

overlap performing already been there has within provide new improve geographies encouraging and in closed has to for only been not us acquisitions to It are well The little see very but operate. that sales the teams. to expand, which for result areas in also are different the density growth as we we Modular we deploy and our should serving Vesta between continued means for capabilities sets systems, we customers. That rental of opportunities inventory opportunities This and center customers. Mobile extensive logistics both

in quarter our of current remains the rental orders, tailwind to in call have average equipment notable fleet new for I and the we as our pricing rent. shared rental on prices a opportunities overall for place This is business a in this difference new for deploy units future. dynamic we continue benefit shipping are foreseeable levels that first that from we should to for compared the

at to the more and our trajectory from are experienced right. Mobile and million proficient and and Modular combination realized we Plus sales customers. these we continuing to the see $XX services We gain our these traction as of to of both become site-related up Year-to-date, is in services revenues results opportunities from teams providing the the initiatives over have and

of so should accelerate time. their of this resources and very path little business, of did our over addition sales the Vesta type fleet

these positioned well of very two We meaningful both initiatives. stream to deliver revenue from are a

cost shift a saw also Modular and of and customers well. resources, knew to with put secular and solution is had that so even also we effective Solutions Modular Modular an an the custom country. is as us Custom Mobile Vesta third the clearly in that experienced and value rental provide larger there across space where Our strategic initiative growing of capable This The buildings in stronger is acceptance myriad sales in is Solutions projects modular combination Custom Vesta position viable for of a would applications. area the we

Our of substantial. opportunities is pipeline

many are considering a how very buildings first projects. choice modular customers their We as pleased with for are

deploy the we As company’s growth, we also successfully effectively. capital strategic manage must

are We smartly and have it invest offering are to potential. and that and in areas solid many returns long-term places doing

example. healthy, and especially new pricing, increase at overall fleet. we deploy example, the deploy but have acquisitions level, new just two are that This Space bringing to recent need and also are XX% equipment. they’re shy seeing With is as utilization opportunities that locations rates For continues the both and in growth utilization, capital our fleet improve encouraging, Vesta, we legacy be one just of we looking Design to largest

in As and trifecta, way responsible I have three operating prior are a progress is shared we and I metrics it a all inventory our very an call several of indicator positive now. there our calls, times opportunities, capital deployment. and on business to healthy right manage

continue date, cannot Before the our over results today’s but I because quarter due next call and to significant my opportunities have to not years. to year deliver the second for of hide growth the we Keith, to several to only in EBITDA turn I call, also over enthusiasm level

is message and deliver. focus When we take year, uncertainty, the the increasing this is streamline second advantage to am is year full and growth of Our geopolitical which full navigate time I business outlook our while opportunities and to working. to XXXX, a like macroeconomic for strategy financial our year of can modular proud it a

has and I all groups, everyone and entire and our each customers our been as and doing other exemplary would for like across businesses shareholders. an with our to thank for corporate for job employee leadership team our

financial the positioned to successfully XXXX. remainder and for very new the well are of executing McGrath, We is are solid we deliver results

Keith, to will expand financial So my now detail. call turn over comments on greater who with I’ll the overall

Keith Pratt

Thank you, Joe, and good afternoon, everyone.

on excludes in highlighted, gain quarter, discontinued be comments by focused impact Modular which in operations. the driven segment. from the the results and Adler today Joe from the income performance strong As delivered continuing the sale from operations, My Adler we Mobile on second results will our

and the revenues to overall million. XX% increased at second the increased adjusted XX% total corporate EBITDA for $XXX results $XX quarter, to million, Looking

contributions higher growth Vesta, XX% had and from the McGrath XX% total adjusted revenue Before EBITDA.

to of higher Mobile revenue revenues review impressive adjusted quarter revenues, and XX% increased EBITDA higher Total to to XX% $XX.X $XXX.X an compared million. sales million. all XX% rental were quarter $XX.X the services performance Modular’s related as including now streams, had revenues. second increases to increasing revenues, across rental Modular or with Mobile XX% Turning XX% million There operating XXXX. higher

Vesta and adjusted to $XX.X the EBITDA $XX.X results. contributed total million million revenue quarter current

Before revenue higher EBITDA. adjusted these XX% impressive total growth an contributions XX% Mobile and from Vesta, had Modular

portable organic commercial, to storage and acquisition, the addition our across rental growth customer strong from our education bases. contribution operations In the experienced Vesta

million $XX.X increase Sales revenues. XX% initiative to total to million with sales in grow million, projects. Vesta our of good demonstrating modular $XX.X $XX.X increased or progress revenues the sales contributed

disciplined our management utilization rates. accomplished achieved increasing and of continued was average achievement rental We average while fleet fleet XX.X% utilization from our This fleet also up growing year ago. a and XX.X%

by modulars, increased XX%, as $XXX million size for million fleet focus average acquisitions, our on quarter portfolio The and supported With monthly increased investment or on pricing further average was center was expense utilization. the rental which resulting equipment ago, average X% our and improved the XX% on $XXX our XX% from rental as recent successfully or strategic the rate rent we conditions. by by higher market X.XX%, while reflects healthy of up year than in optimization continued a well as year Rental increased and XX% inventory revenues a X% XX% ago. increased by XX%, margins increased costs depreciation for focus

adjusted was continued TRS-RenTelco, to general decrease rentals in in reflects of year. ago. The pricing year revenues. purpose X% increase by to softness stable to experienced for operations rental for rental We equipment. compared and the of lower quarter which in million million, an softening communications a up review a EBITDA was rate a last purpose revenues mix to $X.X in year X%. offset revenues to X% conditions partly the X.XX%, general monthly semiconductor-related a increased compared $XX.X sales Total a ago, resulting demand We compared flat both average during million. quarter, decreased and or shift Rental rentals $XX.X saw communications were revenues X% in while Turning

extended reflects average utilization was to the during XX.X% The the XX% quarter a for demand year lead XX.X%, were decline supply compared rental quarter for XX% semiconductor softer market, the equipment. the as Average utilization ago, new well times compared in margins as from a and to ago. year

better $X.X increasing Sales current $X.X profit million align sales gross increased with increase The to to revenues with demonstrates to million. focus demand. year-over-year in our on market inventory XX% revenues XX% reducing

from remainder comments The operations. my basis a be of company total on will continuing

amortization expenses increased selling to increased of million, million. expenses administrative and $X.X addition included of Vesta Modular quarter million which and administrative by million selling $X.X intangibles. $XX.X Second The $XX

acquisitions. the was $X.X an result expense $XXX funding rates our of as $X.X million primarily Interest million average during the quarter, of of the debt result million, average increase and was higher higher levels of which interest

for earlier. provision XX.X% quarter income effective second rate tax XX.X%, of taxes was year The to based an on a compared

of million provided our million, compared Net prior Turning in to were received the highlights. million, transaction recent from flow reduction. compared year million most to was activities prior expenses Rental the $XX cash cash with $XX equipment year-to-date excluding purchases, acquisitions, accounting the by operating year. to in for equipment $XXX $XX

The Brekke and $XXX Vesta, total portable to storage our strategic and of cash paid Dixie for million, acquisitions was emphasizing grow the modular initiatives businesses.

addition acquisitions, healthy pay fleet In new to shareholder $XX cash and allowed in significant million investments to in generation dividends. us

EBITDA funded At was quarter notes with the $XX borrow borrowings to we of of our lines had debt XX under credit last million of outstanding X.XX end, under of million facility our comprised capacity months, million and one. million, credit. net $XXX an $XXX adjusted ratio to to XXX The actual additional

financial outlook. updated Turning next XXXX our to

year, continuing rental $XXX capital EBITDA expenditures million million million. and $XXX total Adjusted between million to currently the $XXX results from operations between revenue Gross and million. For million. between $XXX be $XXX we full expect and $XXX equipment,

reflects outlook for stronger updated sales projects. Our a revenue new modular outlook

with a softer somewhat rental outlook outlook Our at outlook at unchanged an is operations stronger offset Mobile largely incrementally Modular, by TRS. largely

overall of also outlook. offset partly investment the TRS rental have at slightly our ongoing investments leading by expenditure reduced We capital modular lower pace gross equipment to

to Before with the a to centered more expand growth modular segment. comments am McGrath’s on Joe going earlier take made closing, longer-term our on respect I time opportunities to bit

data and successfully available is illustrate to presentation, on been in modular opportunities integrated investor website legacy data point included a points and investor the Vesta yet units, I This and our systems. today. lie All business which fully data our not will will highlight second our that excludes our into would reporting ahead. be share that relations I quarter like from is which have the to few progress help our

expand will Joe’s on I First, pricing comments.

$XXX the and X% during building a year-over-year the rent classroom increase. modular second fleet, to revenue on our increased the For from unit quarter, for monthly average $XXX,

year new shipments the last per monthly was unit XX this XX-month over revenue last earlier, A $XXX. For the months, average average revenue $XXX. was

a see we unit new with up pricing, a XX% So positive year-over-year is full basis. which trend on

operating and maintain factors support Also, over and equipment on impact new higher incurred region, monthly necessary to Keep changes number and the per mind product that have can a few can in offset other last of capital the based to vary contract been rental revenue the unit. pricing years Pricing for higher fleet. costs significantly type, costs customers our term, factors.

revenue These pricing dynamics drivers. are significant positive long-term

as fleet the tailwind pricing rental churns, unit the towards rental for have been As on rental we moving which units market turn rates, average in a all higher. current moves expect revenue rent

is Plus and Our with progress for in data Modular an embedded Mobile growth additional points is early us. these opportunity

up before just contributed $X.X million year from earlier. from site-related services year-to-date, our $XX year-to-date As Modular business, services Site-related year-to-date, modular Joe portable Plus earlier, legacy over million $X.X initiatives a million a and Modular earlier. up year even in mentioned million revenue Mobile contributed $X.X Plus Mobile contributed $XX.X Vesta our for storage. and million

with We are they are in these early the initiatives contributions. making innings positive and growing

been our also have million. sales we of we modular new million progress sales, in good new while $XX making equipment. with $XX XXXX, Back last of achieved achieved year We

With this to the growth expect see we further year beyond. and addition of Vesta,

rental our opportunities and all have grow of storage. top fleets this, further On to portable we modulars for

continue increase markets organic As disciplined focused we have acquisitions. we strategically and to presence of have in to demonstrated, opportunities a combination through many investment geographic our

underway, of As we and ahead. that our opportunities lie are near the significant business about transformation Joe highlighted, with excited well long-term the

second proud of quarter performance. McGrath’s We strong are very

working strategies. our for while on continue the hard integrate look to we year, we focused growth ahead staying of modular this will businesses, furthering to long-term acquired the be remainder As

That the concludes our for you lines open prepared questions. remarks. Mike, now may

Operator

from Thank Instructions] question you. [Operator with comes And Oppenheimer. Schneeberger our first Scott

Scott Schneeberger

new modular predominantly – but much. and sales the this rental is very afternoon. that increase. start with out you segment, strong I to overall Thanks the that believe Good say like heard unchanged. I in I’d guidance Keith,

stronger being TRS. It’s is it offset in However, Mobile just Modular. by

Modular, the environment the there? rental that in very sounds takeaway Mobile So and is good demand

Keith Pratt

Scott, business. year about that’s a It to Feel It is for really electronics good business. wanted tougher what is modular exactly the we our convey.

conservative So part see But in which half business. in is healthy And the more year. modular something of exactly the we the we’re somewhat we looks second very that’s focused what outlook. business the the sales of this on, for

Scott Schneeberger

it Okay. sounds And like. the as for same well, rental said would Mobile Modular or be

Keith Pratt

as as business Joe very the Correct. second part good about in We the very of conditions. at I quarter mean, well. feel overachieving good mentioned, that demand we’re

Scott Schneeberger

much. really second how change guess Is your the in Thanks. the answer? haven’t versus dissected and segment outlook quarter part that the increased? I to any the And half, I of the sales it of much as rental guidance in by outperformance or second and

Keith Pratt

both. Yes. did good It’s We very had been a expected. We of second quarter. better than

second into get we go good very through year, the as we we of As feel July. half the

you our As can numbers. anyone look at Scott, know,

it the the second few quickly learn even profitability. of quickly. little how completed turn and one bigger The prospects is It tends feel a be contribution the lot cautious lot tempers to there’s the half less revenue. little get to and are to good projects year a and it where business TRS the months we being a about outlook moves But bit, next that very a the much about we over more area visibility. We’ll more

at how cautious pick at up of a could over get outlook. year. looking taking half the things it. second if this that’s But we’re We better We’re the surprised point,

Scott Schneeberger

XX CapEx, to offset is is Modular modular I understandable on are thanks. kind we environment a and seeing Modular? enough, going for are have based assume bit, Mobile to I situation. questions because But CapEx demand Keith, pushing a high thematic be to looking just you rental of be impressive. you on a little running Fair next that very and utilization Are as there to increase similar guidance there’s said. looking class a you’re and hot? year really high in Mobile CapEx and little partial on TRS a in bit delve of you the with a is you want tweaking XX.X, But CapEx and that’s down this what know your mentioned – into overall to tail that’s well should of out going it’s on Is CapEx? the

Keith Pratt

Yes, Scott.

the back a year I what’s February. situation. all, at at more bit did demand essence throttled we or little you’ve given a for full today happening. the of spent First modulars, we think more – in We’ve We’ve and to of expect than back spend captured we expect TRS, modulars the at little March

really do hard We disciplined. we capital. indicative feel very look and We opportunities the to, try we remain to again, before look we where the So but seeing. add at returns about pretty opportunities maximize capital can we have. the to business always need we And it’s that flexible we on we’re be and that then adding regional much fleet the good at

is, thing opportunities. That frontload to we very call, I this on mentioned did positions point would and was other for market It The year. this the out able somewhat on to capitalize well deliberate. be in we the CapEx us our last

us positioned. where well that today. So good we feel are We leaves about

get deployed opportunities the we’ve business. in and the we’re We to for, have and market build equipment it pursuing access planned to that

Scott Schneeberger

I’m on ask well business Thank commercial curious Could Thanks. rental what your Mobile I as Modular as education demand? market? And your you. is driving

Joe Hanna

– based. is Scott. side business, the on the commercial the Actually of pretty demand broad Yes, the

space healthcare, types like recreational can local projects it’s we’re projects healthcare, of country, some the the government If examples you across facility a look space give admin. I for state and for that admin for park and admin of And seeing. you

strong. actually is work government Our

Our petrochem this the for Houston area actually plant year actually work too. customers our with is around strong pretty

it’s just verticals. really all – So our it’s through market

catch for areas classrooms facilities is population but like good we’re modernization significantly. not Florida, side, districts up seeing growth, only and school demand. get also Texas, as We’re to try seeing high for that on growth has there changed for the that’s the up their just demand education projects, strong. speed. nothing Carolinas, In And to And now

we’ve – been perspective. broad-based really we’re pleased So on very a

Scott Schneeberger

seeing Thanks, you’re in not Joe. as Are which you’re you seeing I reshoring are any national Modular, specific know some and in projects well? of you but Mobile yet with involved? very projects geographies mega large these

Joe Hanna

projects. activity industrial where There’s have a the presence. We we are general involved in amount in of upturn some and large

We’re participating, no question.

Scott Schneeberger

Thanks. Excellent.

stronger speak update. two quarter, helpful just Could Thank more than if Just services what’s was you. would in think a the strong flowing Rental I one expected. bit be or that through could. I related now? a there about we good you

Keith Pratt

that Sure, whether in units pickup Scott. The or that’s units, they’re for bulk. elements the units revenue stream and Storage primary Portable really are delivery Modular charges

We the it’s a it are those bit things is from for and other are growing. additional And opportunity. to massive we customers tied us but expanded do getting a Joe not which that as related of for mentioned little upon revenue I rental growth site today, of services, amount

the other boost. in So is additional that’s factor That an there.

Scott Schneeberger

Understood.

site Keith, Mobile Modular… in related there, So are services

Keith Pratt

Correct.

Scott Schneeberger

or well just as there in that the rental bucket? is that Is in

Keith Pratt

which really customer of tied we’re Mobile Modular rental the that doing are to unit for rental flows through stream. revenue the the the Plus, things

Scott Schneeberger

another. Okay. is site related But services

Keith Pratt

Correct.

Scott Schneeberger

this revenue on are be. just growth I’ll Could about, not Thank Could on contributing as far you. services? – early establishment talk nicely robust and of yet, and And speak you margin site I’m time? profile wrap Modular to as from are the at And days contribution revenue anticipate Plus that you margin you time what they these but guessing over related do current will topic. up Mobile

Joe Hanna

a sore a us we our get started. Keith it make We’ve can that, profile margin add we’re with and in been point comment and here. work has as continuing to for but pleased to just not been improve I’ll Yes,

encouraging. do you to you been add have that’s want anything Keith, So there?

Keith Pratt

innings the definitely Yes. on early emphasis here. put I

about the a few for present through the it the in How doing items what The do as resonates good do of offer, early a do them? to that? to understanding our we quite it, we’re think Scott with base. we re-rent of model. is get we we really win We’re most stages way customer that How rate

else many cases. the we So somebody in don’t own but asset, does

it, Sometimes re-rent. it’s own a we but again, cases many

there And is dilutive margin rental margins. so profile our revenue actually the to

Our hit what revenue target its strong that is range. it. other again, the days. early That’s but our XX%s traction we buildings what typically These upper hands. in how this the Really get at we’re on are and opportunities in rental not point margins the to in XX% typically are on it and customer, get we focused time, is with sure they want, it understand to make their

We will figure good on out over a how to it make margin time.

Scott Schneeberger

Great. the for taking and Thanks, questions. my thanks gentlemen. on quarter Congrats all

Joe Hanna

Thanks, Scott.

Keith Pratt

Thank you.

Operator

Riddick comes And next question our from Sidoti. Marc with

Marc Riddick

afternoon. good Hi,

Joe Hanna

Hi, Marc.

Keith Pratt

Marc. Hi,

Marc Riddick

opportunities appreciated I what first commentary your color So really did the appreciated already in prepared the acquisition really of in I Colorado. you remarks all around tuck-in you’ve given. and

So in short pipeline the of all, you’re valuations, relatively do what talk similar done a little you’ve picture there. about, And and things of bigger time then what maybe why a actually period bit opportunities what first to Colorado. you’re in maybe seeing you doing to

Joe Hanna

dollars investment Yes. proprietorships – expand to owner $XX tuck-ins a their generally evolution we sale. I local a range could kind $XX from can kind We are size. million bit. million view on of several It these certain That’s for their to tuck-in. anywhere million. point that And to in something or wants how little of they company typically, They where their monetize could operators. that are that, put the be up like a they’re along and sole of

an over we is of in relationships doing years type exactly the event that pipeline. our with these the preparation for we that so when And what to develop refer folks we’re

these to folks. talking We’re

We there to have trigger, relationships they’re want the pull when with ready them. and be developed, we right so to

us comments, in a equipment case it’s that careful and very from the illustrated And bring with we base. the of into of about start up And as I opportunity that. we’re end the for about in customer And fleet. we’re zero Colorado, my great types a picky to

well have that maintained and fleet of shape. some And that’s these operators good in very

that. very a into with fold so And happy start greenfield to operation bring the and we’re that

rundown a the of So your on I Does mean, quick question? situation. that’s tuck-in answer kind that

Marc Riddick

was Yes. a hiring helpful. in about like of bulk That’s talk see given a any to to opportunities you. you’d things playing about that that bit of up if advantage little sort could on then you like you very the bit talk I you was that could to opportunities that I that. add needs that of take And front of you’d you to if areas the wondering keep little some wondering

Joe Hanna

of actually have – the Well, brought up hire of some others. drivers know don’t where that areas tougher healthy we have in across because don’t country, terms and now, have hiring had I trucks. pretty an we’ve folks we it’s fleet we in drivers many as to issue than been before Adler we a

bring right base when – our I so that the have and company able now, as revenues employee in place. And on think size of to the our folks needed. to the are a good And been we’ve

just been we But us. been now. than current that’s planned a to folks hire able for, but hasn’t may get backdrop expensive more It the needed. economic they’re real as for into have we’ve and place right Sometimes problem positions

to position the needed. So be and I able as as we continue a hire in think staff we’re good company, to to expand

Marc Riddick

we it as the going expectations full your along things or be was that about specifically if Great. years, little you into talk this timing a are if and should there lines And talk a about bit you looking thinking the wonder I of whether could what into year. at as a given about we’re the going education any education little the bit of market was far

Joe Hanna

And us. good shipments ready classrooms half for we has a online. summer, in it’s school our we in the in and as the of for classroom been the throes projects of the Currently, the and place shift in that second part the year education and year. new those been which bring expected. The Yes. And you’ll typically, see business all are as getting is results executing

second profits earlier, in the year. half of revenue the for that and said Keith of year, as half typically more So us second

And that same dynamic again. expecting so we’re

Marc Riddick

do if then are this I’m part of business, early you’re if It I’m retail there’s retailers know but had there had maybe maybe or latter too of there not, or but there challenges far. of a so that had. little But kick the to a little sort I not lot year high of the as large have there’s part the And this things not the thoughts may that in little toward parts know early I seasonal there. curious seeing a will for any a given any that or profile that be Excellent. is wondering if thought sometimes anything maybe you you sure, a

Joe Hanna

retail needle Sure. It’s these folks that some business of mover And in positioned a holidays. online storage of for not for preparation to as bring the extra business. us. We some do huge get we’re

haven’t we we seen part fairly that half but small that year. at second of But point, So a of that’ll pick business. it’s the a again, this the up suspect in lot of here whole the

Marc Riddick

relative on what normal like maybe work just you as that. be of some it’s should directionally me, thinking bit going one could we supply a of of had ago challenges about should the If sort I custom the what’s last endure chain – kind And as of maybe sort we and be heading plus went toward update, to with wonder there? or now we if of about business Excellent. year was the the I of thinking far you there’s give the thinking an things of back for past. if how are where back about certain so or parts when a –

Joe Hanna

one, the margins there. second few quarter. A improved Yes. things in Number

that. see We are very to happy

pressure just Our slightly was the that inventory rose And some pressures less from quarter. the quarters. cost in seen center that due inflationary we’ve prior in for to part just of

encouraged see to we that. so are very And

As our inventory to to do, for and very are in able make as that be That’s we that we work good work do well we far custom that positioned we centers. on. typically that margins charge

goes their quarter, is And we we, saw continue projects to that a tailored lot do going as work do so do the that. unit to something to customer we’re a it and that like we of when we’re need. the I wants to happy but do. particular a say in wouldn’t that second to specifically That’s and comes that

the So improve we overall were saw we though, margins quarter. second in pleased very that

Marc Riddick

Excellent. Thank you much. very

Joe Hanna

Thanks, Marc.

Operator

be to question. appears that gentlemen, the last and Ladies

the Let any closing Mr. call for over to me now Hanna turn back remarks.

Joe Hanna

to and you thank joining late quarter on for today in continuing interest for third to results. our the to forward speaking like review company. your look We again in us call October everyone our with I’d

Operator

today’s and for you this all Ladies concludes gentlemen, conference participation. call. Thank your

You may now disconnect.

McGrath RentCorp (MGRC) 27 Jul 232023 Q2 Earnings call transcript