Q3 2022 Alta Equipment Group Inc Earnings Call

Attention to all participants please hold at the conference call will begin shortly again all participants. Please hold the conference call will begin shortly.

[music].

Okay.

Good afternoon.

And thank you for attending the Alta equipment Group third quarter 2022 earnings Conference call. My name is dawn pain out of your moderator for today's call I will now turn the call to Jason Demeyer director of SEC reporting and technical accounting with Alta equipment group, Sir the floor is yours.

Thank you Dante good afternoon, everyone and thank you for joining us today.

A press release detailing <unk> third quarter 2022 financial results was issued this afternoon and is posted on our website along with a presentation designed to assist you in understanding the company's results.

On the call with me today are Ryan Greenwald, our chairman and CEO and Tony <unk>, Our Chief Financial Officer for today's call management will first provide a review of the third quarter financial results. We will begin with some prepared remarks before we open the call for your questions.

Before we get started I'd like to remind everyone that this conference call may contain certain forward looking statements, including statements about future financial results, our business strategy and financial outlook achievements of the company and other non historical statements as described in our press release. These forward looking statements are subject to both known and unknown.

The risks uncertainties and assumptions, including those related to <unk> growth market opportunities and general economic and business conditions.

We have based these forward looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business financial condition and results of operations.

Although we believe these expectations are reasonable we undertake no obligation to revise any statement to reflect changes that occur after this call.

Description of these and other risks that could cause actual results to differ materially from these forward looking statements.

First in our reports filed with the SEC.

Including our press release that was issued today.

During this call we may present, both GAAP and non-GAAP financial measures a reconciliation of GAAP to non-GAAP measures is included in today's press release and can be found on our website at investors I'll tell ya equipment Dot Com I will now turn the call over to Ryan.

Thank you Jason Good afternoon, everyone and thank you for joining us today I will discuss our third quarter financial highlights the continued strength of our business and the current market conditions.

Then provide an update regarding our solid execution upon our growth strategy, including our recent acquisition of eco versus in the M&A environment going forward.

Tony Colucci will then provide a more in depth review of our third quarter results.

But before I get into our third quarter highlights I want to recognize our employees because without their hard work and dedication our strong performance would not be possible in particular I would like to commend the altra team for exemplifying our guiding principle of one team as employees from across the company rallied to support our Florida based team members affected by the devastation of Hurricane Ian.

We are proud of our culture and our corporate purpose of delivering trust that makes a difference it was inspiring to see our passionate ulta team members step up to help our customers neighbors and coworkers in such a stressful and turbulent time.

Now referencing slide five of our Investor presentation for the third quarter, our business continued to deliver consistent and solid growth our position in the market is unique in our success continues to be driven by both organic expansion and successful M&A activity.

As a result, our total revenue increased 37, 3% to $405 million.

As of the end of the third quarter, we have generated $1 $1 billion in total revenue roughly equal to our total revenue for full year 2021.

We continue to deliver solid revenue gains in both our construction and material handling segments as Tony will detail in his comments. We also continue to achieve positive GAAP net income compared to a loss a year ago.

Adjusted EBITDA also continues to grow increasing 39, 2% to $44 million versus the year ago quarter and is nearly surpassed 2021 levels on a year to date basis supply chain headwinds headwinds continue to persist, but it's stabilized a robust product support business continues to <unk>.

Arrive as lead times for new equipment are driving more repair and rebuild business from our existing field population tight availability has also kept pricing for both the used equipment and rental rates at elevated levels. Our strong performance continues to reflect the consistency in our business and the stability in the markets we serve.

Demand for parts and service continues to be at high levels and sales backlogs remain at record record levels. Our rental fleet continues to benefit from increased financial and physical utilization with higher rates driven primarily by the continued supply demand imbalance the tight labor market is pushing companies to increasingly adopt integrated and automated material.

<unk> solutions, and then a longer term basis. We also remained encouraged at several federal initiatives are likely to positively impact the extension of the cycle, including the $550 billion infrastructure, Bill and the chips and the inflation reduction X, which promote promote increased investment in manufacturing and renewable energy.

A related trends the repatriating of advanced manufacturing to the U S is directly benefiting many areas of altice geographic footprint and the great Lakes region and in the northeast.

Let me conclude with an update on our growth strategy.

The success of which is clear in our financial results and on track as evidenced by our recent transactions referencing slide slipped seven since we went public in 2020, we have completed 13 acquisitions, representing total revenue of $440 million, we believe that the long term trends driving consolidation remain and we do not anticipate slowing from.

Our acquisitive growth strategy.

Our acquisition of Yale Industrial trucks are privately held Yale lift truck dealer with five locations in South Eastern Canada is progressing very well and we have added several new OEM vendor relationships to expand our product offering for the Ontario, and Quebec markets. We expect that additional allied product line sales will result in growth of the product support business over time dry.

The additional part sales and technician head count as we mentioned in our previous call. The addition of the Canadian region to Altice exclusive territory. It takes us to approximately 20% of the North American addressable market for lift trucks and creates additional opportunity to cross sell the integrated solutions of our <unk> material handling business.

We recently closed our acquisition of eco versus industry industries.

Which provides us with the master dealer rights to distribute best in class environmental equipment and replacement parts to dealers and customers throughout North America.

This immediately positions altra as an industry leader in the rapidly growing market of eco friendly waste solutions and material recycling, which we believe represents a significant opportunity for our business.

Make a couple of points on how eco versus meets our strategic M&A criteria.

First we look for businesses that are anchored by our relationship with our market leading manufacturer of premium products with exclusive territorial rights. Secondly, we look for businesses, where the field population of equipment creates a new <unk> revenue streams in the form of aftermarket sales of replacement parts and product support services. We also prioritize businesses with cross selling.

<unk> across our other product offerings and with the opportunity to grow what we call wallet share of our customers' spend for all the categories we cover.

We believe <unk> checks all the boxes and as our first entre into master dealer relationships with equipment manufacturers. We are excited to have the eco versus team on board and we see exciting organic opportunities to expand in the fast growing environmental equipment space.

Lastly in terms of growth, we continue to build out our capabilities in E mobility as we position Ulta is the dealer of the future and look for ways to leverage our platform and existing infrastructure to capitalize on emerging market trends and support our customers' evolving needs to close we are very encouraged about our strong financial performance thus far in 2022.

And believe our business has significant opportunities for the balance of this year and into 2023.

Again, I want to thank the altra team for their significant accomplishments and I'll now turn the call over to Tony.

Thanks, Ryan and good evening, everyone and thank you for your interest in Alta equipment group and our third quarter 2022 financial results I Hope that you and your families are looking forward to the holiday season, and a strong finish to 2022 as we are here at Ulta.

Before I begin I want to welcome our new team members from eco versus to the Ultra family. The senior leadership team is committed to building upon the legacy that the eco versus team has established we look forward to earning your trust and demonstrating what we call one team.

My remarks today will focus on three areas first I'll be presenting our third quarter results, which were again strong across the board. Despite news headlines related to the macro economy. Our business is performing well in the current climate as our service centric model and market diversity and breadth of offerings are benefiting us in an otherwise chop.

Choppy operating environment.

Second I will provide the eco versus the profile of the eco versus acquisition from a financial perspective as this deal has a unique structure when compared to our typical acquisitions lastly, I'll provide commentary related to the increase we made to our 2022 adjusted EBITDA guidance, which was noted in todays press release.

Lease.

Before I get to my talking points. It should be noted that I will be referencing slides from our investor presentation throughout the call today I'd encourage everyone on today's call to review our presentation and our 10-Q, which is available on our Investor Relations website at <unk> Dot com.

For the first portion of my prepared remarks and in line with slides 10 through 13 in the earnings deck third quarter performance for the quarter. The company recorded revenue of $405 million, representing consecutive quarters, where quarterly revenue exceeded the $400 million Mark recall that breaching $400 million of revenue in the second quarter.

<unk> was the first time for that milestone in the company's history.

Embedded in the $405 million of revenue is at 21, 8% organic sales increase over Q3 2021, making for a sizable beat on a comparative basis.

From a nominal dollar perspective, the majority of the quarter over quarter revenue related to approximately $72 million in additional equipment sales with $45 million.

Of that figure coming through on an organic basis.

This increase continues to be a function of the supply and demand imbalance in the heavy equipment and material handling marketplace and our business.

And our business, taking competitive market share in certain geographies.

Focusing on specific revenue streams, our product support business lines continued to realize strong organic growth in both segments with that figure increasing an impressive 17, 3% in the material handling segment and 15, 8% in the construction segment year over year.

Parts and service revenues were $116 million for the quarter, another new record for that metric.

I'd like to focus on that number momentarily and provide some historic perspective on it in 2019 prior to the IPO. The company was averaging approximately $40 million a quarter of parts and service revenue.

Three years later, we're realizing almost three times that figure on a quarterly basis.

This type of growth doesn't come easy and it comes one work order at a time and is a testament to our 150 skilled technicians and our service management teams capacity to run a large best in class operation, which touches thousands of pieces of equipment and customers each month make no mistake, our parts and service revenue is indicative.

Five of our policies operators as the product support and of our business requires excellence that comes in equal parts Human resources Technology management health and safety logistics and grid congratulations to our operations team on another great quarter.

Moving on to our rental business and this is another department that continues to have a really solid 2022 for the quarter, we realized double digit organic growth of 12, 5% and rental revenue based on a continually increasing rental rate environment and an increase in physical utilization when compared to last year.

Moving on from revenue to EBITDA on a pro forma basis, adjusted EBITDA was $44 million for the quarter, which is up 39, 2% or $12 4 million from the third quarter 2021 on a year to date basis, the company produced $115 million $100.

$2 4 million and adjusted EBITDA versus $83 $1 million last year or a 39% increase on a trailing 12 month basis, we achieved a $163 million of adjusted pro forma EBITDA, which converted into a $111 7 million of economic EBIT at four four.

68, 5% conversion rate on EBITDA as I've mentioned on previous calls with the asset light businesses, we've added to our platform via M&A and our organic growth in parts service and rental we expect it to drive this conversion metric higher in 2022 and results through the third quarter are in line with that expectation.

Lastly, on cash flow and as depicted on slide 13 of our investor deck on an adjusted pro forma.

Prior to growth Capex in our view this metric is indicative of economic earnings associated with driving equity value for shareholders.

Finally for the quarter. The company was again profitable on a GAAP net income basis is that number came in at $4 4 million.

Quick update on the balance sheet, and our credit profile as of quarter end and referencing slide 14, specifically, we ended the quarter with approximately $270 million in cash and liquidity on our revolving line of credit and total leverage came in at three three times 2022, adjusted pro forma EBITDA, notably.

We were able to acquire why Canada, a sizeable acquisition relatively speaking effectively hold our liquidity position and de lever the balance sheet during the quarter.

Now for the second area of my prepared remarks, I want to summarize the eco versus deal for investors.

And in particular, its unique structure and its impact on <unk> from a financial perspective.

First we've added approximately $64 million of revenue and $10 million of EBITDA to the business on an annualized basis with the acquisition the consideration paid and the deal came in four tranches tranche $142 $5 million in cash at close tranche $2 million to $5 million and ultra stock at close tranche three.

<unk>, a five year $6 million seller note and tranche for $16 million of.

<unk> consideration.

<unk> from a total purchase price of close perspective, if we combine the first three charges of consideration we are entering the deal at five times EBITDA.

And it is important to note that given the asset light nature of the eco versus business model EBITDA and pre tax earnings are somewhat interchangeable in terms of the relation to free cash flow.

At five times pre tax earnings. This deal is immediately accretive to all the shareholders and as minimally impactful to our leverage profile.

As it relates to the contingent consideration or the earn out I would say that the seller believes strongly.

As do we and eco versus ability to grow in the coming years, and we wanted to structure a deal that would reward the seller for future growth, but also wouldn't inflate the deal multiple for ultra shareholders over time in other words. This structure allows the seller to realize the benefit of incremental growth without the buyer having to pay a growth multiple for the deal.

To summarize eco versus has the ability to earn an additional $16 million of contingent consideration to the extent they increase earnings beyond the $10 million of annual EBITDA, but given the structure of the earn out any consideration paid relative to the earn out won't increase the deal multiple paid by Ulta beyond five times.

As it relates to historic M&A and again to provide some historic perspective, I mentioned earlier in the call that our pro forma annualized EBITDA as of September 22 was $163 million.

<unk> that also has annual EBITDA at the IPO was $94 million and the and the $42 million of EBITDA that has come through M&A. It follows that we've been able to grow EBITDA by $27 million on an organic basis and less than three years, suggesting that the engines of our growth strategy both M&A.

And organic have been running strong.

The last area of my remarks, and as presented in slide 18, I'd like to discuss the increase we made to our 2022 adjusted EBITDA guidance.

We've increased the range unexpected adjusted EBITDA for 2022 to be between 155 and $158 million up from $147 million to a $152 million. Previously there were three primary factors that influence our thinking around the new guide for fiscal 2022 adjusted EBITDA.

First we have to acknowledge our outperformance in Q3 relative to expectations when determining guidance for year end.

We're confident that the strength, we've seen thus far in 2022 and parts and service will continue through the end of the year and into 2023. We are also confident in the continued demand for equipment and our ability to deliver strong equipment sales numbers in Q4, given what we have in our yards and into our shops currently.

Given this we are expecting to outpace last year's Q4, adjusted EBITDA performance on an organic basis. It's important to note that our Q4 performance in 2022, sorry, 2021 was extremely strong and was a record record quarter for the company at the time.

Third on the list of factors, we must also layer in two months of eco versus performance into the results for the fourth quarter.

Given those three positive factors, we felt it appropriate to raise our guidance once again this quarter, one caveat to make here when comparing Q4 expectations relative to Q3's performance is that investors should be reminded that our rental business in the north are seasonal and we always see a natural reduction in rental revenue and corresponding EBITDA as the colder weather.

It starts to impact the business in the back half of the quarter specifically.

All told and when considering that we began the year with an expectation of $137 million to $142 million and adjusted EBITDA for fiscal 2022, we will be extremely pleased with the results for the year that lands within the updated guidance range.

In closing I want to congratulate my colleagues at Alta on another great quarter, there support for one another and our collective purpose to deliver trust that makes a difference.

Thank you for your time and attention and I'll turn it back over to the operator for Q&A.

Thank you Sir.

If you would like to ask a question. It is star one on your telephone keypad.

For any reason you would like to remove that question is star two and as a reminder, if you are using a speakerphone. Please remember to pick up your handset before asking your question. We will pause briefly as questions are registered.

Our first question comes from the line of one Matt Summerville with D. A Davidson your line is now open.

Hey.

Excuse me a couple of questions first just on.

The acquisition can you talk maybe a little bit more about the Tam and the long term organic trajectory.

In the waste.

Recycling titled Market Youre looking at.

And whether or not there's more deals to be done here and whether this can be.

A material piece.

All because business going forward over the long term.

And then Paul.

I'll take I'll take that this is Ryan.

Matt This this.

Sector is in its early innings. The U S market is catching up to western Europe .

We're up in terms of the market size and today <unk>.

<unk>, which is the flagship OEM that comes with the eco versus business.

Our measuring their share globally around 20%.

So.

The total addressable market that we see today is a global business, that's less than $2 billion of equipment machinery.

What we're defining as this environmental sector.

We think that the organic growth of the sector is going to be phenomenal in the U S market is poised to be a big part of that is it sort of catches up with the European counterparts.

So we don't think that we need to acquire anything to participate in their organic growth story. This is really more of a through the sub dealer channel and through our own APR really trying to drive adoption of these types of machines and part of why our master dealer relationship makes sense with some <unk>.

Our products as they are they are specialty products that have a long long.

Sales cycle, they require a lot of engineering expertise to sell them in a lot of handholding from <unk>.

Some party and so that's where <unk> comes into play they are experts in that area. So it will be.

We will keep that team in place and we'll leverage them across the.

The geographies that we operate in and continue to support our sub dealers and not and just trying to grow that overall market for recycling.

Great. Thank you for that and then maybe Ryan I was hoping maybe do a little bit of a deeper dive.

On some of the key end markets in which you participate in I know you list them on the slide some effect, which is great, but maybe on a relative basis, the organic and material handling over 30%, obviously sort of off the charts, maybe if you could spend a minute, particularly on that business from dig and where are you seeing the most demand for equipment. The most demand.

Parts and you mentioned in the release that there's obviously signs of macro slowing have you seen any.

Any signs of slowing in the business any customers canceling orders for equipment.

Maybe speak to that in more detail. Thank you.

Yeah, Hey, Matt its Tony if you don't mind I'll take that one.

I'll take the backend first we have we have yet to see any sort of.

Increase in cancellations.

Of equipment.

And I always try to remind everybody that our business is.

<unk> kind of impacted by equipment sales in general.

Some of that 30% that you're referring to.

Is equipment driven and so.

What that what that means for US is we were able to.

Take delivery of supply that's been in the backlog for quite some time now from from Hyster, Yale specifically and get that delivered in the third quarter, which led to the higher equipment sales.

When you think about organic.

Numbers in the in the product support departments parts and service and rental those are still high teens low twenty's in the material handling segment and it's broad based Matt.

It's anywhere from the automotive sector that continues to run.

And be busy from from what we can see.

All the way through.

Certainly human sustenance grocery and food and beverage.

And then just logistics and warehousing in ecommerce in general so.

We have yet to identify.

Soft end market on the material handling side to your question.

And the growth in general is coming from.

There is always price and quantity right we.

We are pushing more parts out the door, we've added head count from a mechanics perspective, that's the quantity, but we've also.

Moderately increased pricing to those two things combined.

For the organic numbers that you see here.

Great. Thank you for that Tony I'll get back with you.

Thank you for your question Sir.

Our next line of question comes from the line of Alex <unk> with B Riley. Your line is now open.

Mr. <unk> your line is open.

Thank you good evening guys.

At that time.

Quick questions here as it relates to the new and used equipment sales line.

Global supply chain has obviously been a challenge and it seems like also has done an exceptional job.

Getting the equipment sort of delivered into its customers.

On time basis here, but I guess my question is more broadly speaking do you feel like you've been.

Sure.

Supplying the market.

And is there upside here if the supply chain improves and then kind of on the flip side. The supply chain does improve do you think there's downside risk to the margin of that business.

I think Alex this is Tony good evening.

I think both those things are true meaning.

If we had more equipment given the backlog, where you literally have customers names on orders right at the OEM.

It follows that if we have that supply we would get it out the door. So.

To the extent that the supply chain continues.

Continues to to to ease up a little bit we would be able to get more and more equipment out the door given the level of demand.

And then it.

It would be disingenuous, we've seen we've seen an uptick in margins.

And because of the dearth of equipment Thats out there specifically in the us markets.

Where we've realized some good margins relative to history I think if things do break loose we would probably expect those those margins to come in a little bit having said that to the extent. It is all set by volume to my previous point on price and quantity nominal GP.

Probably probably stays stays flat all things equal but.

We're still working off of record volumes.

Thank you Ryan.

Brian made a point to mentioned in his remarks.

We still have a volatile supply chain for equipment.

But its not worsening from our perspective.

And in our and our Oems I think are doing.

Fantastic job kind of navigating it.

And getting us equipment.

The other thing I would mention Alex as we benefited from our scale.

Throughout this whole episode in terms of being one of the larger.

Volvo dealers, our hyster Yale dealers in the country as well as.

Filling with ancillary product lines, and having relationships with JCB and Kubota and case, New Holland and the list goes on and so by virtue of not being kind of tied to one OEM.

I think that's played itself out in the topline new and used equipment.

Very helpful and then as it relates to the hurricane that you referenced.

You talk about or quantify the negative impact. It may have had on the September quarter, and then possibly talk about the negative or positive impact it could have in the fourth quarter.

I'll take that Alex it's hard to see any real negative immediate impact everyone really rallied to keep the business.

And <unk>.

Active in supporting our customers and if anything Covid gave us kind of addressed or a hurdle for how we are an essential business we have to be open.

And people need our equipment in times of emergency so.

The business didn't really Miss a beat and long term.

Well, we are cautiously watching what's happening with just with housing in general and we don't feel that we're overly tied to the residential construction side.

We think that the hurricane cleanup as can actually create more demand.

If anything so I don't see a negative impact and then just in terms of our industry.

Unfortunately, natural disasters create more need for equipment and it becomes a little bit of a demand driver.

Alex just to put a fine point on that for Q3.

Immaterial impact to the financials from the hurricane.

And then lastly, just one modeling question.

It sounded like there was a suggestion that due to seasonality. Obviously, there is a little bit of a feed that typically develops in the fourth quarter.

How do you see that playing out this year and when we layer in the.

Acquisition.

Do you still see that feed in reported results.

We do I do Alex.

It is.

A function of our I think the feed the more that we grow and we add we add Emma.

M&A like like eco versus here most.

Most recently, the phase will become less and less but the reality is we still have a material.

Portion of our rental fleet in the northern parts of the U S.

So the phase <unk>.

We will be there it would be.

It's nice here in Michigan in the last couple of weeks, which is good to see but it's coming.

It will be inevitable. So the feed will be there, but I think if we look back historically, it will be less and less of the fade given kind of our <unk>.

How diversified we are now.

Thank you very much.

Thanks, Alex.

Thank you for your question Sir.

Our next line of questions comes from the line of one Ted Jackson with Northland Securities.

Your line is now open.

Thank you congratulations on the quarter.

I assume you can hear me.

Yeah, Hey, guys I have we gotcha gotcha.

Uh huh.

Alright, sorry, I'm in an airport right now.

The first one is just kind of a fun question is just kind of a little update on what's going on with the <unk>.

Distribution business.

Kind of just an update on that.

Sure.

Ted This is Ryan so.

The update there is that we're continuing to work.

<unk> stage sales opportunities.

The consistent theme is that with selling the battery electric vehicle. There is a need for integration of the charging infrastructure, which has long lead times and so while it is lengthening the sales cycle. It is also creating tangential opportunities for us the credential is ourselves and build out service offerings as a company so I would say.

And the last quarter, that's where we've been focused.

As building out our team and focused on.

Helping our customers navigate the needed infrastructure and continuing to develop late stage sales opportunities where.

Confident that we'll have some trucks in customers hands in the next year.

Okay, then just shifting over to <unk> I mean, I'm not sure if anyone has put <unk> into their forecast yet for next fiscal year, but assuming that they are not just maybe a little discussion with regards to how.

We think about putting that into the model.

$64 million on a trailing 12 month basis.

And EBITDA.

I assume it would be something a bit more of a wall and then.

Maybe talk through.

How it might layer in on a seasonal.

Level as well.

Yes, it's good question Ted.

And I agree with your number $64 million revenue $10 million of EBITDA. This this business does not have rental rents.

Our rental revenue line they'll do some demos and things like that but this is not a.

By a bunch of rental fleet and rented out they are.

Buying equipment from from their Oems and turning it to their to their dealer network and Theyre doing the same thing with with parts.

We would be we would expect some growth given kind of the tailwind that Ryan referred to from a macro perspective.

They're there.

Experiencing the same thing that we're experiencing in our construction and material handling business, which has high demand lots of backlog supply chain issues with Oems et cetera et cetera.

Eco versus doing today about eight or $900000 a month in parts revenue.

We're going to report <unk> as part of a new segment in our business called equipment distribution given its master.

Dealer agreements status, and so youll be able to see kind of parts on a quarterly basis.

What we know from our legacy businesses, when we have more sales and field population the parts.

Jill will trail and grow grow kind of on a lag basis.

We expect to growth Ted it's probably too early to talk about exactly what that what that number looks like from eco berth but.

<unk> been a 20, 25% growth company historically.

And we would hope to be able to continue that.

And is there any seasonality to it.

Oh, sorry no.

There may be a little bit of seasonality.

And their sales season, where they're selling earlier in the year.

So that customers can have equipment.

March April .

But.

We shouldnt see a lot of seasonality to it I guess is the long and the short of it.

Okay and then my last question is I, just wanted to jump over to the warehouse automation business.

I mean, you've seen clearly a lot of slowdown in E Commerce, and Amazon has kind of put a hold on.

New distribution centers and people were saying, they're subletting space can you spend a little time kind of talking about what youre seeing in that particular segment of your business and how it might impact you and then I'll step out of line.

Hey, this is Ryan I'll take that so.

We keep fielding questions about that kind of headline number about warehouse space and what we're seeing is it actual.

Old warehouse space is being retrofitted and a lot of these projects are still are still happening and we haven't seen any slowdown in demand for warehouse integration or are.

Autonomy type solutions in fact, I would say that and I referenced this in my remarks, we think that labor tightness is actually driving a lot of.

Appetite for this type of project and historically it was all based on ROI today Roy is part of it but just being able to achieve results as part of it to being able to move product and had the certainty of it.

Being able to keep their operations running with a lack of talent out there.

Okay, Hey, thanks for the time, congrats on the quarter again.

Thanks Ted.

Thank you for your question Sir.

At this time there are currently no questions registered so again, if you'd like to asking a question. It is star one.

There are no questions registered so I would now like to.

Pass the conference over to our management for any closing remarks.

That's it for management, thanks for joining us this evening that concludes our remarks.

<unk>.

And with that we'll conclude today's Alta equipment group third quarter 2022 earnings call. Thank you for your participation you may now disconnect your line.

Okay.