Q4 2019 Earnings Call
Good day, everyone and welcome to the mobile money 2000 like in fourth quarter Conference call.
I would like to inform you that this conference is being recorded that all participants are currently listen only mode.
There's also presentation that accompanies this conference call, but you can access that mobile minis website.
Www Dot mobile many dot com.
The investors page.
Before turning the call over to Kelly Williams Mobile Minis, Chief Executive Officer, I will read the Safe Harbor statement.
Before the presentation and my comments again local many wouldn't like to remind you that some of the statements that responses to your questions and that's conference call May include forward looking statements.
They are subject to future events and uncertainties that could cause our actual results could differ materially from these statements any forward looking statements that should be considered in conjunction with the cautionary statements in our press release under risk factors include in our filings with the FTC that your mobile mini encourages you to read.
In addition, please refer to be Investor section of mobile Minis website to find additional disclosures and reconciliations of non-GAAP financial measures that will be used on todays conference call.
Now I will turn the call over to probably volumes.
Good morning, everyone and welcome to mobile Minis fourth quarter 2019 conference call I'm, Kelly, William Mobile Minis, President and CEO and with me today is van Welch, our executive VP and CFO .
I will review the operational highlights of the quarter, the current business environment, and our strategy well ban will discuss the Q4 financial.
We'll then open the call up to questions.
I encourage you to review the full quarterly presentation, providing more detailed results for your reference which has also been posted to our website.
Let me begin by saying that 2018 with a record year free cash flow generation for mobile many.
The company's $143 million in free cash flow for 2019, nearly doubled prior years number reflecting the underlying strength of our business model and improvements made in working capital as well as disciplined capital strategy.
This free cash flow generation provided us considerable flexibility to execute on our balanced capital allocation plan in 2019 that supported growth initiatives and return value to shareholders well also paying down debt.
We closed for acquisitions during the year in North America storage solutions, and we returned more than $77 million or 54% of free cash flow to shareholders in the form of dividends and share repurchases.
So overall unimpressive 2019 capped off by a strong fourth quarter in North America storage solutions.
Core rental rate increases of 4.5% a favorable mix and managed services revenue growth drove 4.1% year over year rental growth in the fourth quarter for North America storage solutions with an average always see utilization nearing 81%.
The combination of increased revenue, our ongoing efficiency enhancements and variable compensation Tailwinds drove a 17.6% increase in adjusted EBITDA.
North America closed the quarter with an impressive 47.3% adjusted EBITDA margin.
One favorable impact in our financial performance in both Q4 and full year 2019 came from the product mix in North America storage solution.
Ground level offices workloads positively impacted rental revenue growth from all perspective rate.
Volume and mix.
For the fourth quarter, the core rates on glows increased by a meaningful 10% with rates on newly place close up 11.8%.
Average glow units on rent for the quarter increased by 7% year over year.
Growth potential for glows stems from strong customer demand and a higher price point than containers.
In North America storage solutions National account revenue continues to be greater than 35% of segment rental revenue on an annual basis.
We believe that building closer national customer relationships will continue to grow this revenue.
As we anticipated on the last earnings call. The peak seasonal units on rent in 2019 did indeed be 2017th peak, but trailed 28 teens due to the onetime large volume order in late 2018.
This unfavorable comparison affected the latter part of Q4, 2019 and will impact trucking and rental revenue in Q1 2020 as a comparison to Q1 2019.
Our core units on rent remain above prior year, and our pipeline of pending orders leaves us optimistic about 2020 in North America storage.
In 2019, we further separated ourselves from the pack as a premium provider by expanding our brand as a one stop shop through managed services, where we partner with strategic vendors to arrange for re rented items.
In 2019 managed services conducted over 5100 transactions.
Taken pump solutions rental revenues increased 5% for full year 2019, with adjusted EBITDA margin expansion of 230 basis points to 34%, primarily due to a strong performance of 16% year over year rental revenue growth in the first half of 2019.
For Q4, 2019 tank and pump rental revenues decreased 11% compared to the prior year, while achieving adjusted EBITDA margin of 32%.
Revenue related to the downstream market, which represents the majority of our tank in pulp business was down compared to the prior year fourth quarter.
Q4 2018 is results included several larger turnarounds that did not repeat this year and we experienced more softening in the underlying industrial market in Q4 2019 than expected.
Our year over year comps as well as the current environment of the industrial market will make the first half of the year, our most challenging.
However, this division continues to see improved operating efficiency, and we anticipate revenue and EBITDA growth of the business for the full year 2020.
In the UK fourth quarter rental revenue was down approximately 4% year over year in local currency healthy rate increase of 2.4% was offset by decreased average units on rent and unfavorable mix.
In the UK recently implemented changes to conform our sales model and other infrastructure to North America operations have stabilized the business and improve the efficiency of our overall operational structure with the operational changes, we anticipate margins to improve over prior year throughout 2020.
I'm very pleased that mobile mini continues to be recognized as an employer of choice. We were honored to be named one of the most admired companies in Arizona for the second consecutive year.
Our vision to be an employer of choice is built around a committed senior leadership team who continues to invest in key affinity groups, such as our diversity Council and women's leadership group.
This focus coupled with increased training initiatives like our branch manager mentoring program is resulting in reduced employee turnover and more importantly, a more inclusive workforce to meet the demands of attracting and retaining the best employees in the industry.
Finally, despite mixed industrial market conditions.
The economic environment for the majority of our US end markets, which represents 87% of our business remained positive during the fourth quarter.
Based on our assessment of current business trends, we expect the underlying market conditions and a construction as well as retail and consumer services will remain generally healthy.
I will now handover the call to van who will cover the financials.
Thank you Kelly good morning, everyone.
I am pleased that we delivered on our evergreen model for the 12 months ended December 31st 2019, driving consolidated rental revenue up 4.2%.
Our adjusted EBITDA increased 11.8% to do and $42.9 million with a margin of 39.6% an expansion of 300 basis points as compared to full year 2018.
In addition to significant margin expansion, we had a healthy improvement in return on capital employed which also exceeded our cost of capital increase or annual dividends by 10% and de Levered to 3.6 times down from 4.2 times at December 31st 2018.
For Q4 2090.
After the effective tax rate was 22.8%.
During the quarter, we had $1 million of tax benefit related to a return to provision associated with us federal and state tax returns from previous years.
For full year 2020, we expect an effective tax rate of 26% to 27%.
Due to our well positions, we do not expect to pay meaningful use federal cash taxes until at least 2022.
Adjusted share based compensation expense totaled $2.3 million for Q4, 2019, and 11.5 million for the full year.
Share based compensation in 2020 is forecasted to be similar to 2019.
Depreciation and amortization totaled $17.6 million for Q4 2019.
$70.6 million for the full year.
We expect a slight increase from 2019 to 2020 in depreciation and amortization.
Moving onto our record free cash flow.
Increase cash from operations as well as a reduction in net capital expenditures resulted in Q4 free cash flow of $51.1 billion, a 26.2 million increase compared to the prior year quarter.
Full year 2019 free cash flow of $143 million were nearly double our levels from last year.
Total net capital expenditures, which includes spend on both fleet NPP any were $9.7 million in Q4 2018 compared to 19 million in 2018.
Gross expenditures on fleet totaled $9.6 million for the quarter 7.2 million understanding was for wish for North America storage solutions, which primarily was used to create ground level offices to support increasing demand for this product line.
Total net capital expenditures for the full year 2019 were were approximately $70 million.
Decrease a 17 million year over year.
We anticipate net capex of between 45 and $55 million in 2020.
Rolling stock such as forklift trucks as service vehicles is chiefly obtained through finance leases.
For the year ended December 31st 2019, we acquired approximately $22 million of rolling stock the finance leases, mainly to refresh existing rolling stock assets and we expect similar levels in 2020.
During the quarter, we pay dividends of $12 million at 10% year over year increase.
In addition, during the fourth quarter, we invested $8.2 billion in acquisitions.
ABS debt of 28.6 million and closed 2019 with a leverage ratio of 3.6 times.
Okay.
We're very pleased with a record 143 billion dollar free cash flow generated in 2019, which we expect to exceed in 2020.
The continued free cash flow generation reduction of leverage and more than $440 million have ample liquidity under our revolver drive a great deal of financial flexibility to carry out our capital allocation strategy in 2020 as follows.
We will continue prioritizing the acquisition of North America storage solutions and explore growth opportunities through the greenfield expansion of our services by establishing new yards and promising geographic areas for both North America storage solutions and taken punk solutions.
We expect to increased dividend payments at 10% per year as well as opportunistically repurchase Treasury stock under our program and finally, we will use the remaining free cash flow to further reduce debt.
With that.
I will return the call to Kelly, Thank you very much.
Thank you van we enter 2020 proposition of operational and financial strength with a large and diversified customer base and a sustainable operational cadence.
Customers continue to validate our reputation as a premium provider of products and services as evidenced by our 2019, NPS and customer EFOR scores being the highest in company history.
We're the leader in storage products market coverage technology and customer service. The platform. We have built can continue to grow and improve our business in the future as we execute on our growth strategy.
We will continue to balance growth with improved margins and free cash flow generation all in an effort to maximize value for our shareholders.
Our evergreen targets continue to capture a strategic objectives over a cycle and specifically for the full year 2020, we expect our full year rental revenue growth to achieve GDP plus two to three by balancing rate and volume.
We expect EBITDA margins to expand over 40%.
We also expect to increase return on capital employed and again exceed our cost of capital.
Im very pleased with our 2019 performance and look forward to building on our success in 2020.
Finally, we'll be hosting an investor day in New York City on on Tuesday March 10th and look forward to seeing many of you there.
I'll now turn the call over to the operator for instructions on the Q1 day. Thank you very much.
Thank you will now be conducting a question answer session, if you'd like to be placing the question Q. Please press star one on your telephone keypad.
Confirmation tone will indicate your line is on the question Q.
You may prestart, two if you'd like Kubrick question from the Q.
Participants using speaker equipment and may be necessary to pick up or handset before pressing star one.
One moment, please what we pull for questions.
Our first question today is coming from Scott Schneeberger from Oppenheimer. Your line is now live.
Thanks, very much good morning.
Thanks Scott.
Hey, Kelly I guess first question.
Rental rate in storage solutions accelerated.
On new units and just wanted to wanting to get the kind of why and how behind that and what that means for the coming year and what rental rate progression could be specifically in storage solutions into 2020, and then and then maybe touching on some of some of the end markets, where where you're seeing.
Differences thanks, Sir.
So I think when you look at rental rates, we've always had that expectation of growing rate somewhere between two and 3% and have had a lot of success over the course of the last five or six years and doing so.
One other things that we've benefited from here is a shift in mix you can.
As mentioned in the prepared remarks, there that the ground level offices.
Our growing at a faster paced than containers are glows are about 13% of the of the overall.
Product mix, there and we've got.
Much higher rate increases I think our new units on rent are up nearly 12% there, but we also have national account improvement there on the storage side of close to 4% and so I think if you. If you go back over the last couple of years as you think about the mix shift that we've had from.
From National accounts from 12, or 15% to 35% that came with a bit of a volume discount where today I think we've proven out to these customers the service levels or are solid and so we're able to go go get rate increases there. So I'd say, it's a combination of the two things there and I do anticipate.
Art, new rates are going out were a little over 6% on our core business. So I do anticipate to probably stronger than than our history. There would would indicate Scott.
Great. Thank you for that.
And then.
Really strong adjusted EBITDA margin.
Expansion.
I see on Slide 19, you talk about some of the puts and takes on the in Opex, but I'd just like you to go level deeper and you're looking for for a better than 40% EBITDA margin next year, So how will things like the.
The incentive plan variable incentive plan, you mentioned payroll cost transportation costs, and then also the bad Guy being higher bad debt expense, how did those play in the quarter and how do you see them, helping or hurting and other factors in next year and expenses.
Sure I think first off when you think of margin expansion would go back to the rental rates I mean, the flow through on rental rates is going to be obviously in that the 95% to 97%.
The only thing we've got there is commission costs you pointed out some of the other operational efficiencies I think we're certainly better at logistics.
We are seeing a big reduction and outside hauling.
Due to the focus in transportation.
We certainly have had a big boost with technology I think when you think back to our work order system with Sep I think we created a baseline for labor costs and other efficiencies there we bill more damages because we've got mobile devices and the ability to take pictures Doc you sign.
A lot of these things have been a big benefit there obviously the variable comp.
Has been a tailwind for us, but I think it's important to understand that the Vale variable comp in 2019 was that target. So.
Though it was a.
Tailwind in terms of the margin expansion what you look at in terms of 2020 is would be spot on in terms of how we would plan that variable comp which is right at target. So.
All those factors together and the fact that we've got a disciplined.
Operate all operational cadence would would tell us that we expect to continue to grow margins.
Thanks, one more if I could sneak in before I turn it over.
Capex guidance.
Excluding capital leases for 2020 of 45 to 55 million is a significant.
Decrease from from past years could you just elaborate on on.
Where that changes coming from.
Thanks, Scott This is Ben I mean, if you look at some of things that we've done certainly over the last year too in terms of capital if interest efficiency, we're seeing that play play out where a lot smarter perhaps than than what we've been been in the past also.
If you look at the the utilization factors that we have in both.
Both storage and taken pump I think we've got some room and unavailable fleet are available fleet.
That that we can first put those Korea before we.
We expand into into capital expenditure. So I think we're in really good shape I mean, I think that 45 to 55 million is going to get us to the targeted levels that we talked about of.
The GDP plus two to three.
In terms of revenue perspective.
Great Thanks, and that that the excess capacity was that I didn't catch you made a said it was that storage or tank and if in storage did that.
How are you doing on those those 3000 custom made units you got you got from China. How is the out there has been applied.
Very good I mean, the 3000 units that we got from China first of all they were manufactured at a very high quality Theyre all now on the ground.
In locations, where we want them to be.
And in the ready to to be utilized some of them already being utilized obviously in terms of being the beat on red.
But that that's certainly playing into the factor of the capital expenditure guidance and forecasts that we've given for 2000.
Hi, Thanks, I'll turn it over appreciate.
Thanks Scott.
Good.
Thanks. Your next question is coming from Andrew Wittmann from Baird. Your line is now live.
Great. Thanks, Hey, guys.
I wanted to build a little bit on Scott's question asked a little bit different way in the past.
You guys talked about your incremental EBITDA margins being north of 60%, you're saying Theyre up here, which is great I'm just wondering if there's any change in your view as to the incremental margin targets you've laid out the past as it relates to 2020 now that.
Certainly your incremental margins were much better than that in 2019, you mentioned some of the benefit you had from variable compensation, but but.
Now the 2020 seems to be stacking up as a little bit more normal year in terms of the cost structure.
60, still the right way of thinking about it or there are puts and takes that we should be considering in the.
Yes, that's Andrew I think first of all I.
I'm really looking to updating the other evergreen model.
I think if you look at 2019, we virtually achieved every target that we had set there and the evergreen model and I I think there's a couple of things that come into play here and I intend as we review the evergreen model, both the capital allocation strategy to to kind of unveiled at at the Investor day, but I think when you look at.
At different ways, we're going to grow the business one of them as through managed services, which doesn't require capital, but it is at margins that are slightly dilutive to the overall organization today.
I think there are other areas of opportunity for us to grow the business things like used equipment sales or what we referenced as flip sales, which really we don't have to touch the unit, we can drive significant EBITDA, but it comes at lower margins. So I don't know them Im going to tell you that appoint a 60% flow through but I can't tell you. It's it's fairly close I think our our emphasis our.
This here is to grow the margin and we can do that at 50% flow through and we can.
Enhance our returns to the shareholder and to do all of the right things here without running a 60% flow through but I think if you. If you keep in mind that discipline around how we look at rental rates. If you keep in mind the operational efficiencies.
I think we're in that neighborhood I'm, just not sure I'd point you to 60, Okay. That's great context. Thanks for that Kelly I guess since you mentioned and I wanted to ask about any way as if you could just I'm curious if now that managed services has been part of your strategy bigger part of started its growth going to continue to grow and be part of your strategy I'm. Just wondering if you could you give us some khan.
Maybe than on the amount of revenue that that contributed in 2019.
Or even in the fourth quarter I'm, just kind of curious as to how that's factoring into the the company's PML today.
Hi, Andrew Q4.
We did about $4.1 million of revenue in managed services for the year.
We did around 10.6 million.
Thats up from about the under 5 million in the in 2019, Yeah, Andrew just to follow back up here. There is obviously a lot of room to grow here, we haven't built out this.
The strategy is there were very effective with managed services at a national level. We've got over 2000 units on rent the opportunity for us is to grow the vendor network and the strategic partnerships and that's really where the plan has got to come into play for US here because once we are able to get the sales reps, which is our largest lead generation tool here.
In the organization onboard and make it very easy for them to to select vendors it'll go at a much much faster pace I don't want to call. It a pilot anymore. I think it's an initiative. We think is is grabbing shape, but it's there are few other pieces, we've got to get put in place airport to accelerate.
Yes.
Makes sense.
I think we probably the next question I wanted to ask would be on your taken pump business, particularly here.
Clearly the fourth quarter.
Saw more material signs of weakness that you kind of talked about in the last conference call, but I think given you guys would admit is came in a little bit weaker than expected. So given that I just maybe some color on you mentioned some turnarounds in come through and that makes sense. Those are always unpredictable, but in terms of the customer line up where maybe pending orders that you have.
Here in the backlog right now clearly you're seeing something.
Let's give you confidence, saying it sounded like first half, maybe a little bit weaker but the second half you feel like there's going to enough growth to drive growth for the year I think thats what I heard so can you just talked about some of the dynamics you're seeing in those end markets to give us some confidence that EBITDA could in fact be up in 2020. Despite.
The fourth quarter here.
Sure I think you.
Had referenced this but they are there we had the turnaround very few cases, where they push the were smaller turnarounds. We had a couple of historic turnarounds and if you can remember Q4, we.
We have 17, we signed a considerable amount MSR phase and we saw some of those really kick off in latter half of 2018 and so these comps are a little bit more challenging that said, we also have one or two large customers that that did differ spending and maintenance and there are.
Couple of our largest customers and so our belief here is that based on their indications that we'll we'll be going through those projects here before the year is out but I think there's also an ownership here from our standpoint, where we're really focused on becoming a more disciplined sales organization to win more at the local level.
To be a more to get more local transactional wins I think that some of the discipline that we have on the storage side around sales and sales process, specifically with Salesforce, our CRM as got room for improvement. So I think that some of this is market driven and some of this is an opportunity for us to continue to engage.
Appropriately with our Salesforce to win more locally so.
Yes, I still think we saw we've seen utilization up.
Three or so percentage points since the start of the year and the comps are little tougher here in the first quarter or two but I do have a lot of confidence not only are they are weaker koppers comps the second half a year, but I think that that business isn't.
Isn't completely going away here, we just had a couple of customers this loan.
Okay and then just one last one from me for Van I guess, when you went to the order of your capital priorities to sub debt reduction is the last thing on there. So 3.6 times I think it was the number you ended the year van is that that kind of where we're thinking status quo here or how do we think about your leverage targets today as you head into 2020 in where you want.
On a really be.
Well I think if you look at the let me certainly if you look at 2019, Andrew we were able to do as Kelly mentioned, the balanced capital allocation, where we focused on a number of things including share repurchases.
As well as acquisition.
And in continued to pay down debt.
In 2019.
So we're we're certainly looking at growth.
In North America storage solutions, and continuing along the lines of making those kinds of acquisitions that we did in the latter half of 2019, we did for those in 2019, we added about 2300 units.
Associated with those with those acquisitions.
We expect we're going to continue to do that and focus on that growth but.
No share repurchases still we did $28 million, where the share repurchases in 2019.
We're going to be opportunistic on that end.
But.
Certainly leverage I would anticipate that that will still.
The a factor of.
Decreasing leverage as we said many times in the past at 3.6 times and with our operating model that we have in the free cash flow that we generate we're happy with that.
But there'll be some room for further leverage reduction in 2020 as well.
Alright, great guys. Thanks.
Okay.
Thank you as a reminder, at star one to be placed in the question Q. Our next question is coming from Sam England from Berenberg. Your line is now live.
Hi, guys that just a couple from me the Hsas will just wanted how you're thinking about the business heading into 2017, what are you seeing any signs of recovery.
Whether it's two at each site.
Hey, Sam good morning, yes.
I actually pointed to this in the prepared or more remarks, I think that where where we are seeing some signs of life here in terms of our pending orders.
And I think Thats, a thats a real positive thats, we've shifted to the US based land based model and.
I feel very very good about where we are over there.
I think it's probably going to be a bit of a challenge here I mean right until Brexit is completely resolved I think theres still a little bit of uncertainty, but I do believe we've we've implemented some some strategy and some changes there that are going to increase margins.
And I do think that over the course of the first couple of quarters here will continue to.
To see improvement in terms of revenue and I'm very confident from margin standpoint that you will see year over year improvement really starting within.
The first half of the here in the year here.
Great. Thanks, and then the next almost around tank and I wondered if youre, giving anything or planning to do anything on the cost side in that business or is it too early and you might see how the business recoveries in the past off before deciding whether to do anything.
Yes, I think if you're thinking we're always obviously looking to manage costs and optimizer maximize our our margins here I think that.
Where we look at this business right now is that we've got still got an opportunity to grow we've got about five locations designated as geographic expansion opportunities and we've got a much more talented group over here in terms of personnel as well. So we'll certainly see how it progresses, but we're always looking to manage.
Managed cost efficiently here and again I think that we're gaining efficiency and then turn will continue to see margin expansion here I think we just got to make sure we get the revenue picked up here the first half of the year.
Great. Thanks very much.
Right Sam Thank you.
Thank you. Our next question is coming from Kevin Mccarthy from Credit Suisse. Your line is allies.
Hey, guys as of Palmer on for Kevin. Thanks for taking my question looking at the Carlyle offices nice freight growth there.
Kind of get a sense of the across opportunity. There are you seeing any of your existing.
Customers in storage solutions can utilize those or how should we think about the go to market.
Gary there.
Yes, sure the ground level office has been a core product offering of ours really.
Since the company got in business I think that how I might look at a Palmer the.
This is.
This is an offering when once we divested of the mobiles that the became very compelling in terms of us really trying to drive value. There I think one of the unique things about this product offering as we basically convert standard shipping containers and a standing standard shipping container comes in.
By 20, or eight by 40 and mobile mini historically manufactured these units to have 10 foot wide.
Offices here and at our 10th of why containers and so when we basically designated the 10th of White container as a conversion opportunity to the ground level office. So we've got.
Two feet wider obviously for the customer and I always kind of joke about it an airline we're willing to pay for six inches more room for seat comfort you can imagine these guys that are in the office for.
Up to multiple years that a couple of additional feet mean, a big differences. So thats really been a big part of our go to market strategy, but it's still been a core product offering the cross selling we do find that we rent more containers win.
When when glows go out there we're able to couple of those so I think it's a big opportunity for us going forward as we continue to accelerate.
Use of capital under these capital conversions.
Awesome. Thank you and then just one follow up you guys.
Made some bolt on acquisitions here in 2019 can you talk about the integration of those assets.
Just a housekeeping question for fan how much did acquisitions contribute to revenue in the quarter and the full year.
Yes polymer we we really don't we don't we don't track that.
I would say that for the full year was a fairly minimal.
But I mentioned the number of units they were.
They were they were highly utilized.
Units.
Is that we acquired.
But we don't we don't really separate and track.
Sure kind of revenue I would say just speaking to the integration that with something that.
Palmer, we hadn't done a storage acquisition for about four years and part of that was as I've spoken to historically the kind of the.
The big transformation. The organization went through because we are today were operationally efficient enough to be able to integrate and acquisition and obviously, where we're paying for these typically five to six times, they're very accretive to the overall business, but retaining the customer is critical for us and so we've put a lot of measurements in place.
Through the integration process.
To hold rates for those customers to prove out the differentiation in our containers and service levels. We operated 24, seven service, which really nobody in the industry does and so I think that we certainly see retention rates of these customers to be much higher.
Awesome. Thank you very much.
Okay. Thank you.
And once again, ladies and gentlemen that far one if you like to be placed in the question Q. Our next question is coming from Stanley Elliott from Stifel. Your line is now lives.
Hey, good morning, guys think fit man.
Thanks, and have managed to take my cell phone call. So.
Okay I can ask that question.
Could you guys talk a little bit more about kind of expectations for the retail portion of the business on a go forward basis as for starters.
Sure. So I think Theres theres really two two components when we think of retail here one obviously has been.
Really advantageous to us and Thats, the remodel business with some of the largest retailers as as they look to compete and enhance the in store experience. That's something I think weve certainly taken advantage of and I anticipate 2020 in terms of the remodels to be similar to 2019.
We continue to really build stronger relationships with these largest retailers.
So so that segment is certainly I think we're optimistic on I think when you look at the seasonal side of the business I think that Theres, there's less opportunity than there was a five or six years ago. I don't think it's significantly less Stanley, but we have gained market share as.
We've gone and progressed through the last five or six years again I don't think it's a major decline and I think that was that was asked fibers are four or five years ago, certainly considering Amazon in some of the other ecommerce opportunities that were out there, but our relationships are stronger we continue to gain a little bit of market share and like I said it was a really strong seasonal year.
If you excluded the the onetime event that we had last year.
And.
Could you talk a little bit about the that the cadence and maybe the tech investments going forward.
We think some of that kind of rolling off is certainly helping the margins, which have been fantastic here, but maybe talk about the tech investments on a go forward basis, and how that's allowing you to more quickly integrate some of these acquisitions you guys have.
Absolutely I appreciate you, bringing that up I touched on it just a little bit earlier, but technology has been a big part of our improvement in operating efficiency I mean, theres a couple of different ways. We can go I think one of the things you're seeing with the decline in Dsos that we've got customers our largest customers that are on our mobile mini connect.
Portal and paying online and that's certainly driven driven down dsos for us significantly, but I think operationally when you look at our the implementation of our handheld devices.
We were able to build more damages, we're able to take pictures Doc you sign is certainly they have been a big advantage for us with the customer being able to electronically sign and have that documentation.
The efficiencies that are coming out of S&P are significant and I think we're still just getting started I think the portals got a lot more opportunity for it for us to transition customers over to that.
I think one of the biggest has been the work order system.
Which again allowed us to identify the repair costs on these units, which we didnt have until Sep and from there we were able to really identify kind of a baseline for labor costs and understand and measure productivity in the yard and from there our supply chain group and specifically asset management's just in an outstanding job.
Of identifying opportunities there.
Everything from paint reduction.
To to productivity measurement of how long it takes to repair units to inventory.
Parts inventory those things it's been a big piece of this operational efficiency improvement you're seeing Stanley I'll, just I'll just jump in and add to what Kelly said that on the work order system and S&P in general and it's enabled us not only manage the repair costs costs more efficiently, but also our keys to capital is we're going to repair.
Your first before we make any capital expenditure. That's one of the reason I referred to us being smarter in the earlier with with the question. This got hit its associated with this effort that we're being a lot smarter on repairs, which are leading to us being much smarter on capital efficiency and in doing cap.
Total expenditures.
No doubt and then lastly, kind of more broadly love to get your thoughts on the cycle. I mean, this time last year I think everybody was.
Answered about a recession a lot of that seems to be off the table and we're hearing generally positive commentary on the ground.
Love to hear what some of your customers are saying, especially with.
Your assets being longer life consideration and rental.
Sure.
I am.
We have our our pending pipeline orders, which as we've got about 90 days viewpoint here with that with those.
That are that are up to prior year and that gives us optimism certainly for 2020 and I think as I mentioned, we've got a pretty good look at the Remodels that that's one piece of it. So when you look at construction.
We're playing to 2020 being a similar or slightly better than than 2019 actually even pointing into 2021. So we haven't gotten any customer feedback that the cause us causes us great concern, we have talked about a bit of an industrial slowdown.
But again, even that I don't think.
Is something thats overly concerning I mean that lot of that is in the upstream and it does carry over into the downstream.
But.
There is also opportunity for us to improve here and again I think that the tank side of the business as much more efficient and lastly, I think Stanley I'd point to the UK, where again, it's a little bit more difficult for us to understand.
Theres still some of that uncertainty around Brexit, but I am confident that once we get a little bit more clarity over there that the construction side with we'd certainly look to make up a pretty big turned but again, we are much more efficient and I still anticipate margin expansion in.
And it really all three segments here.
The UK use storage and in tank and pump here over the course of course of the full year.
Great. Thanks, guys. Appreciate the time that's left right. Thank you.
Thank you we reached one of our question answer session.
Turn to fall back over to management for any further closing comments.
Alright. Thank you very much I appreciate everybody joining us here for the Q4 2019 call and we'll look forward to seeing those of you that are able to attend with us at the Investor Day March 10th in New York City and for those of you that won't we'll look forward to the Q1 2020 call. Thank you very much.
Thank you that does conclude today's teleconference. You may disconnect. Your lines. This time and have a wonderful day, we thank you for your participation today.