Q4 2023 McGrath RentCorp Earnings Call
Operator: To all sites on hold, we do appreciate your patience, and we ask that you please continue. Stand by; we're about to begin. Ladies and gentlemen, thank you for standing by. Welcome to the McGrath RentCorp fourth quarter 2023 earnings conference call. At this time, all conference participants are in a listen only mode. Later, we will conduct a question and answer session at that time. If you do have a question, you will need to press the star key, followed by the one on your
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Ladies and gentlemen, thank you for standing by and welcome to the Mcgrath Rent Corp, fourth quarter 2023 earnings Conference call. At this time all conference participants are in a listen only mode. Later, we will conduct a question and answer session at that time. He could do you have a question you will need to press the Starkey followed by the one on your telephone.
Operator: This conference call is being recorded today, Wednesday, February 21. Before we begin, note that the matters the company management will be discussing today that are not statements of historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the company's expectations, strategies, prospects, or targets. These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected. Important factors that could cause actual results to differ materially from the company's expectations are disclosed under risk factors in the company's Form 10-K and other SEC filings. Forward-looking statements are made only as of the date hereof.
This conference call is being recorded today Wednesday February 21st 2024.
Before we begin note that the matters the company management will be discussing today that are not statements of historical facts are forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, including statements relating to the company's expectations strategies prospects or targets.
These forward looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected.
Important factors that could cause actual results to differ materially from the company's expectations are disclosed under risk factors in the company's Form 10-K, and other S. E. C filings forward looking statements are made only as of the date hereof.
Operator: Except as otherwise required by law, we assume no obligation to update any forward-looking statements. In addition to the press release issued today, the company also filed with the SEC its earnings release on Form 8K and its Form 10K for the year ended December 31st. Speaking today will be Joe Hanna, Chief Executive Officer, and Keith Pratt, Chief Financial Officer. I will now turn the call over to Mr. Hanna.
Except as otherwise required by law, we assume no obligation to update any forward looking statements.
In addition to the press release issued today. The company also filed with the S. E C. The earnings release on form 8-K, and its Form 10-K for the year ended December 31st 2023.
Speaking today will be Joe Hanna Chief Executive Officer, and Keith Pratt Chief Financial Officer, I will now turn the call over to Mr. Hanna. Please go ahead Sir.
Joseph F. Hanna: Thank you, Bill. Good afternoon, and thank you everyone for joining us on today's call. We are pleased to be together today and look forward to providing additional perspective on our strong finish to the year. I will start with some overall comments on our fourth quarter and full year 2023 performance, and Keith will provide additional detail in his financial review before we open the call up for questions. On a total company basis, we delivered strong results in the fourth quarter. Rental revenue increased 19%, sales revenues increased 12%, and adjusted EBITDA grew by 12%. This progress was achieved with a combination of stable, modular, and storage market conditions and solid execution of our strategy. Along with a good market, our people made all the difference. Without the dedicated work of our teams across the country, we would not have realized these strong results.
Thank you Bill.
Good afternoon, and thank you everyone for joining us on today's call. We are pleased to be together today and look forward to providing additional perspective on our strong finish to the year.
I will start with some overall comments on our fourth quarter and full year 2023 performance and Keith will provide additional detail in his financial review before we open the call up for questions.
On a total company basis, we delivered strong results in the fourth quarter rental revenue increased 19% sales revenues increased 12% and adjusted EBITDA grew by 12%.
This progress was achieved with the combination of stable modular and storage market conditions and solid execution of our strategy.
Along with a good market.
Our people made all the difference.
Without the dedicated work of our teams across the country, we would not have realized the strong results.
Joseph F. Hanna: Mobile Modular had an impressive fourth quarter performance. Rental revenue increased 37%. Equipment on rent increased for the fourth quarter, both from Vesta equipment integrated into the fleet and augmented with organic growth. Pricing also continued to see healthy gains, with higher new shipment rates driving total fleet pricing positively. We maintained our focus on pricing optimization with solid gains on fleet average pricing as well as on new orders compared to a year ago. Additionally, the performance of portable storage for the quarter was healthy, with a 13% increase in rental revenues. This increase reflected strength in execution as we expanded in the markets where we operate. Our strategy to be a solution provider to our customers yielded results. We realized healthy growth with our Mobile Modular Plus and site-related services initiatives. These initiatives provided convenience and value to our customers.
Mobile modular had impressive fourth quarter performance rental revenue increased 37% equipment.
Equipment on rent increase for the fourth quarter, both from vast equipment integrated into the fleet and augmented with organic growth.
Pricing also continued to see healthy gains with higher new shipment rates driving total fleet pricing positively.
We maintained our focus on pricing optimization with solid gains on fleet average pricing as well as pricing on new orders compared to a year ago.
Additionally, the performance of portable storage for the quarter was healthy with a 13% increase in rental revenues.
This increase reflected strength in execution as we expanded in the markets, where we operate.
Our strategy to be a solutions provider to our customers yielded results, we realized healthy growth with our mobile modular plus and site related services initiatives.
These initiatives provided convenience and value to our customers.
Joseph F. Hanna: In addition, modular equipment sales revenues increased 21% for the quarter. The organization infrastructure we have built to enable custom modular sales gained traction in the market, and our team was more productive. At T.R.S.
In addition, modular equipment sales revenues increased 21% for the quarter.
The organization infrastructure, we have built to enable custom modular sales gained traction in the market and our team was more productive.
At Trs <unk> telco rental revenues decreased by 11%, reflecting continued weakness in the computer and semiconductor part of the business.
Joseph F. Hanna: Rintelco's rental revenues decreased by 11%, reflecting continued weakness in the computer and semiconductor part of the business. To adjust for the softer market conditions, we reduced purchases of new equipment and sold some of the fleet, reducing our fleet size by 9.5 million during the quarter. Our team was very focused on managing the portfolio effectively in varied market conditions. We continued work on the VESTA integration during the year. In November, we successfully moved all VESTA transaction and financial systems over to McGrath, and we are now fully integrated. Overall, Vesta has performed very well, and we saw many successes in the combined businesses during the fourth quarter and for all of 2023. I'm very proud of everything we accomplished in 2023.
To adjust for the softer market conditions, we reduced purchases of new equipment and sold fleet, reducing our fleet size by $9 5 million during the quarter.
Our team was very focused on managing the portfolio effectively in varied market conditions.
We continued work on divesting integration during the year in November we successfully moved all of the Asda transaction and financial systems over Tim Mcgrath and we are now fully integrated.
Overall Vesta has performed very well and we saw many successes in the combined businesses during the fourth quarter and for all of 2023.
I am very proud of everything we accomplished in 2023 integrating vast up was a lot of extra effort for our teams who tirelessly work to ensure we achieved all of our internal milestones on time and with success.
Joseph F. Hanna: Integrating Vesta was a lot of extra effort for our teams, who tirelessly worked to ensure we achieved all of our internal milestones on time and with success. Simultaneously, we executed well on our growth initiatives with positive moves in pricing and utilization while also finding opportunities to deploy new fleets. In addition, we completed three portable storage tuck-in acquisitions, opening some new markets and increasing density in others. We also grew new modular sales as we continued to position ourselves as a solutions provider to a wider customer base. All of this demonstrated the successful execution of our strategy that we implemented over the past few years. Reflecting on the impressive performance track record of McGrath, none of this would have been possible without the dedication and commitment of our entire McGrath workforce.
Simultaneously, we executed well on our growth initiatives with positive moves in pricing and utilization, while also finding opportunities to deploy new fleet.
In addition, we completed three portable storage tuck in acquisitions opening some new markets and increasing density and others.
We also grew new modular sales as we continue to position ourselves as a solutions provider to a wider customer base.
All of this demonstrates successful execution of our strategy that we implemented over the past few years.
Reflecting on the impressive performance track record for Mcgrath, none of it would have been possible without the dedication and commitment of our entire Mcgrath workforce.
Joseph F. Hanna: This is a special company filled with people who truly understand the meaning of service to each other and to our customers. The engagement and level of commitment have been truly inspiring to me, and I'm privileged to lead such a wonderful group of people. To everyone, I would like to extend my sincere thank you for a job well done in 2023. You should all be very proud.
This is a special company filled with people, who truly understand the meaning of service to each other and to our customers.
The engagement and level of commitment has been truly inspiring to me and I am privileged to lead such a wonderful group of people.
To everyone I would like to extend my sincere. Thank you for a job well done in 2023.
You should all be very proud.
Joseph F. Hanna: On January 29th, we announced the merger with Will Scott Mobile Mini for $3.8 billion. This marks a transformation for McGrath as we become part of a new organization. Our focus will remain on execution of our plans and delivering positive financial results. We will not be providing any financial guidance or outlook for 2024.
On January 29, we announced the merger with well Scott mobile mini for $3 8 billion.
This marks a transformation from Mcgrath as we become part of a new organization.
Our focus will remain on execution of our plan and delivering positive financial results.
We will not providing any financial guidance or outlook for 2020 for this conference call will address only our fourth quarter and full year 2023 results additional.
Keith E. Pratt: This conference call will address only our fourth quarter and full year 2023 results. Additional information about the merger will be set forth in the joint proxy statement that we will file together with Will Scott. Now, let me turn the call over to Keith.
Additional information about the merger will be set forth in the joint proxy statement that we will file together with well Scott.
Now, let me turn the call over to Keith.
Keith E. Pratt: Thank you, Joe, and good afternoon, everyone. As Joe highlighted, we delivered strong results in the fourth quarter, driven by the performance of our mobile modular and portable storage businesses. Looking at the overall corporate results for the fourth quarter, total revenues increased 21% to $221.6 million, and adjusted EBITDA increased 12% to $87.9 million. During the fourth quarter, we determined that our portable storage business met the accounting standards criteria for separate recognition in a reportable segment.
Thank you Joe and good afternoon, everyone as Joe highlighted we delivered strong results in the fourth quarter driven by the performance in our mobile modular and portable storage businesses.
Looking at the overall corporate results for the fourth quarter total.
Total revenues increased 21% to $221 6 million and adjusted EBITDA increased 12% to $87 9 million.
During the fourth quarter, we determined that our portable storage business met the accounting standards criteria for separate recognition in our reportable segment.
Keith E. Pratt: Our discussion today will therefore include separate reviews of both our mobile modular and portable storage disaggregated segments. Turning to a review of MobileModular's operating performance as compared to the fourth quarter of 2022, MobileModular had an impressive quarter with adjusted EBITDA increasing 27% to $54.1 million. Total revenues increased 36% to $150.7 million. There were increases across all revenue streams, including 37% higher rental revenues, 50% higher rental related services revenues, and 21% higher sales revenues. The VESTA modular acquisition was an important contributor to fourth quarter results and accounted for approximately two-thirds of mobile modular rental revenue growth. In addition to the contributions from Vesta, our rental operations experienced strong organic growth across our commercial and education customer bases. Sales revenues increased $7.4 million to $42.3 million, demonstrating the execution of our initiative to grow modular sales projects. We continued our disciplined fleet management on a much larger fleet and achieved a 32% higher average rental equipment on rent, with average fleet utilization of 79.7% compared to 80.5% a year ago. Keep in mind that we have achieved this healthy total fleet utilization while integrating Vestas Fleet, which was utilized in the mid-70s at the time of acquisition.
Our discussion today will therefore include separate reviews of both our mobile modular and portable storage disaggregated segments.
Turning to review of mobile modular is operating performance as compared to the fourth quarter of 2022.
Mobile modular had an impressive quarter with adjusted EBITDA, increasing 27% to $54 1 million.
Total revenues increased 36% to $157 million.
There were increases across all revenue streams, including 37% higher rental revenues.
50% higher rental related services revenues and 21% higher sales revenues.
Divest a modular acquisition was an important contributor to fourth quarter results and the content for approximately two thirds of mobile modular rental revenue growth.
In addition to the contributions from Vesta, our rental operations experienced strong organic growth across our commercial and education customer basis.
Sales revenues increased seven 4 million to $42 3 million demonstrating execution of our initiatives to grow modular sales projects.
We continued our disciplined fleet management on a much larger fleet and achieved a 32% higher average rental equipment on rent with.
With average fleet utilization of 79, 7% compared to 85% a year ago.
Keep in mind that we have achieved this healthy total fleet utilization, while integrating best its fleet, which was utilized in the mid seventies at time of acquisition.
Keith E. Pratt: The average monthly rental rate for the portfolio was 2.75%, which was 4% higher than a year ago and reflects our focus on pricing optimization, as well as healthy market conditions. Rental revenues increased by 37% while inventory center costs increased 29% and depreciation expense increased 37%, resulting in rental margins of 63%, up from 62% a year ago. Similar to last quarter, I will share additional data that help illustrate our progress with our modular business strategic focus. Fourth quarter monthly revenue per unit on rent increased 15% year over year to $743 for new shipments over the last 12 months. The average monthly revenue per unit increased 13% to $1,059.
The average monthly rental rates for the portfolio was 275%, which was 4% higher than a year ago and reflects our focus on pricing optimization as well as healthy market conditions.
Rental revenues increased by 37%, while inventory center costs increased 29% and depreciation expense increased 37%.
<unk> and rental margins of 63% up from 62% a year ago.
Similar to last quarter I will share additional data that help illustrate our progress with our modular business strategic focus.
Fourth quarter monthly revenue per unit on rent increased 15% year over year to $743.
For new shipments over the last 12 months.
The average monthly revenue per unit increased 13% to $1059.
Keith E. Pratt: These pricing dynamics are significant positive revenue drivers. As the rental fleet churns, we expect a rental revenue tailwind as the average rental unit price for all units on rent moves towards current market rates. Progress with Mobile Modular Plus is embedded in these data points and is an additional growth driver. We continue to make progress with our modular services offerings. For the full year 2023, Mobile Modular Plus revenues increased to $27.5 million from $19.1 million a year earlier, and site-related services increased to $24.5 million, up from $14.1 million. As I mentioned earlier, we are now providing portable storage information as a separate segment, disaggregated from the mobile modular segment.
These pricing dynamics are significant positive revenue drivers.
As the rental fleet churns, we expect our rental revenue tailwind as the average rental unit pricing for all units on rent moves towards current market rates.
Progress with mobile modular plus he has embedded in these data points and is an additional growth driver.
We continue to make progress with our modular services offerings for.
For the full year 2023, mobile modular plus revenues increased to $27 5 million from $19 1 million a year earlier.
And site related services increased to $24 5 million up from $14 1 million.
As I mentioned earlier, we are now providing portable storage information as a separate segment disaggregated from the mobile modular segment.
Keith E. Pratt: So I will now provide a review of portable storage in the fourth quarter. Adjusted EBITDA for portable storage was $12.8 million, an increase of 20% compared to the prior year. During the quarter, we saw increases in all revenue streams at portable storage, resulting in a total revenue increase of 18% to $27 million. Rental revenues for the quarter increased 13% to $19.8 million, and rental margins were 87%, up from 86% a year earlier. The average monthly rental rent was 4.02%, an increase of 7%, which reflects healthy market conditions. Average rental equipment on rent increased 6%, while average utilization for the quarter was 74.8% compared to 84.9% a year ago. Turning now to a review of the TRS-Rentel code. Adjusted EBITDA was $20.7 million, a decrease of 18% compared to last year. Total revenues decreased $6.2 million, or 15%, to $35.2 million. Rental revenues for the quarter decreased 11% as we experienced continued softness in semiconductor related demand. The average monthly rental rate was 4.16%, a decrease of 1%.
So I will now provide a review of portable storage in the fourth quarter.
Adjusted EBITDA for portable storage was $12 8 million, an increase of 20% compared to the prior year.
During the quarter, we saw increases in all revenue streams at portable storage, resulting in a total revenue increase of 18% to $27 million.
Rental revenues for the quarter increased 13% to <unk>.
$19 8 million.
Rental margins were 87% up from 86% a year earlier.
The average monthly rental rate was 4.02% an increase of 7% which reflects healthy market conditions.
Average rental equipment on rent increased 6%.
While average utilization for the quarter was 74, 8% compared to 84, 9% a year ago.
Turning now to review of Trs <unk> telco.
Adjusted EBITDA was $20 7 million, a decrease of 18% compared to last year.
Total revenues decreased $6 2 million or 15% to $35 2 million.
Rental revenues for the quarter decreased 11% as we experienced continued softness in semiconductor related demand.
The average monthly rental rate was 416% a decrease of 1%.
Keith E. Pratt: Average utilization for the quarter was 58.9% compared to 63% a year ago, and rental margins were 41% compared to 42% a year ago. Sales revenues decreased 34% year-over-year to $5.8 million, with gross profit decreasing to $3.2 million as a result of lower sales revenues and decreased margins. To address the challenging business conditions at TRS, we maintained our return on capital discipline. We reduced new equipment capital spending, focused on sales of used equipment, and reduced fleet size based on the original cost of equipment from a peak of $398 million at the end of March to $374 million at the end of December. We continue to make progress with reducing fleet size to better align with demand conditions. The remainder of my comments will be on a total company basis from the continuing operation.
Average utilization for the quarter was 58, 9% compared to 63% a year ago.
And rental margins were 41% compared to 42% a year ago.
Sales revenues decreased 34% year over year to $5 8 million with a gross profit decreasing to $3 2 million as a result of lower sales revenues and decreased margins.
To address the challenging business conditions at Trs, we maintained our return on capital discipline.
We reduced new equipment capital spending.
Focused on sales of used equipment.
And reduced fleet size based on original cost of equipment.
A peak of $398 million at the end of March to $374 million at the end of December.
We continued to make progress with reducing fleet size to better align with demand conditions.
The remainder of my comments will be on a total company basis from continuing operations.
Keith E. Pratt: Fourth quarter selling and administrative expenses increased $15 million to $54.5 million. The increase primarily reflects the addition of Vesta, higher variable compensation, and 1.7 million of M&A transaction expenses. Interest expense was $12.1 million, an increase of $8 million as the result of higher average interest rates and $317 million higher average debt levels during the quarter, which was primarily the result of funding our acquisition. The fourth quarter provision for income taxes was based on an effective tax rate of 26.7%, compared to 21.8% a year earlier.
Fourth quarter, selling and administrative expenses increased $15 million $264 5 million.
The increase primarily reflects the addition of Baxter.
Higher variable compensation.
And $1 7 million of M&A transaction expenses.
Interest expense was $12 1 million, an increase of $8 million.
As a result of higher average interest rates and $317 million higher average debt levels during the quarter, which was primarily the result of funding of our acquisitions.
The fourth quarter provision for income taxes was based on an effective tax rate of 26, 7%.
Compared to 21, 8% a year earlier.
Keith E. Pratt: The increase was primarily due to changes in business mix by state. Turning to our year-to-date cash flow highlights, net cash provided by operating activities was $95 million, compared to $194 million in the prior year. Tax payments related to the gain-on-sale of Adler tank rentals accounted for most of the reduction.
The increase was primarily due to changes in business mix by state.
Turning to our year to date cash flow highlights net cash provided by operating activities was $95 million compared to $194 million in the prior year.
Tax payments related to the gain on sale of Adler tank rentals accounted for most of the reduction.
Keith E. Pratt: Rental equipment purchases, excluding equipment received from recent acquisitions, were $230 million, compared to $188 million in the prior year. The total cash paid for acquisitions year to date of Vesta, Brekkie, Dixie, and Inland was $462 million. Proceeds from the sale of Adler Tank Rentals were $268 million.
Rental equipment purchases, excluding equipment received from recent acquisitions were $230 million compared to $188 million in the prior year.
The total cash paid for acquisitions year to date of Vesta, Breaky, Dixie and England was $462 million.
Proceeds from the sale of Adler tank rentals were $268 million.
Keith E. Pratt: In addition to significant investments in the new fleet and the acquisitions, healthy cash generation allowed us to pay $46 million in shareholder dividends. At quarter end, we had net borrowings of $763 million, comprised of $175 million in notes outstanding and $588 million under our lines of credit, with capacity to borrow an additional $62 million under these lines of credit. The ratio of funded debt to the last 12 months' actual adjusted EBITDA was 2.34 to 1.
In addition to significant investments in new fleet and the acquisitions.
Cash generation allowed us to pay $46 million in shareholder dividends.
At quarter end, we had net borrowings of $763 million comprised of 175 million notes outstanding and $588 million under our lines of credit with capacity to borrow an additional $62 million under these lines of credit.
The ratio of funded debt to the last 12 months actual adjusted EBITDA was $2 three four to one.
Operator: We are very proud of McGrath's strong fourth quarter and full year performance, and we are fully focused on solid execution in 2024. That concludes our prepared remarks. Bo, you may now open the lines for questions. Thank you very much, Mr. Pratt. Ladies and gentlemen, at this time, if you would like to ask a question, please press the star one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two.
We are very proud of Mcgrath strong fourth quarter and full year performance.
And we are fully focused on solid execution in 2024.
That concludes our prepared remarks.
So you may now open the lines for questions.
Thank you very much Mr. Pratt, ladies and gentlemen at this time, if you would like to ask a question. Please press star one on your telephone keypad, you may remove yourself from the queue at any time by pressing star to once again that is star one to ask a question and we will pause for a moment to allow questions to queue.
Operator: Once again, that is star number one to ask a question, and we will pause for a moment to allow questions. And we'll take our first question this afternoon from Scott Schneeberger at Oppenheimer. Thanks very much. Good afternoon, Joe.
And we'll take our first question this afternoon from Scott Schneeberger at.
Oppenheimer.
Thanks, very much good afternoon, Joe good afternoon Keith.
Scott Schneeberger: Thanks, Scott. Hey, I want to start out just volume trends in mobile modular. If you could address, I guess now we haven't broken out. But in modular and portable storage, I understand you're not going to provide guidance for 2024. But I'm curious what type of momentum you have as you're exiting 2023. Sounds good.
Hi, Scott.
Hey, I wanted to start out just volume trends in mobile modular.
If you could address.
I guess now we havent broken that but.
In modular and portable storage I understand youre not going to provide guidance for 2024, but I'm curious what type of momentum you have as you're exiting 2023.
Joseph F. Hanna: But I just want to get a sense of, is that something that can persist? Or are we near a tail end? Yeah, Scott, let me try and help there. I'll give you a couple of data points. And you can see some of this in the new disaggregated segmentation.
It sounds good but I just wanted to get a sense of.
Is that something that can persist or are we near a.
Thanks.
Yes, Scott, let me try to help there and I'll give you a couple of data points and you can see some of this in the new disaggregated segmentation and we had more equipment on rent in the modular segment equipment on rent in the fourth quarter was up 32%.
Keith E. Pratt: We had more equipment on rent in the modular segment. Equipment on rent in the fourth quarter was up 32%. If you look at the increase, obviously, a big portion of that was related to the Vesta acquisition. But if you strip out the impact of Vesta, our organic growth in the modular fleet was up about 9%. So about a 9% increase in the original cost of equipment on rent.
You look at the increase obviously, a big portion of that was related to the best acquisition, but if you strip out the impact of best.
Our organic growth in the modular fleet.
It was up about 9% so about a 9% increase on original cost of equipment on rent. So I think that is a good indicator of positive market conditions and positive.
Keith E. Pratt: So I think that is a good indicator of positive market conditions and positive real work done by our teams. If you look over on the portable storage side, we also had an increase in equipment on rent. In that part of the business, equipment on rent in the fourth quarter was up around 6%.
Really work done by our teams.
You look over in the portable storage side. We also had an increase in equipment on rent in that part of the business equipment on rent in the fourth quarter was up around 6% I would say most of that is related to the M&A that we did during the year 2023 as you may recall, we had three tuck in acquisitions.
Keith E. Pratt: I would say most of that is related to the M&A that we did during the year 2023. As you may recall, we had three tuck-in acquisitions. And so what we saw in the fourth quarter was certainly contribution from the acquisitions. We had positive conditions in much of the market, slightly positive, but a bit softer conditions in the retail portion of the business. That is not a huge segment for us, but it is a segment we participate in.
And so what we saw in the fourth quarter wise and certainly contribution from the acquisitions, we had done positive conditions in much of the market slightly positive, but a bit softer conditions in the retail portion of the business that is not a huge segment for us but it is a segment we.
Support in and we saw a sort of shorter and softer retail contribution in the fourth quarter, when compared with a year ago.
Keith E. Pratt: And we saw a sort of shorter and softer retail contribution in the fourth quarter when compared with a year ago. Thanks, Keith, appreciate that. And just one more on the volume theme. Any comments on quoting activity, new order activity, just what you're hearing from customers out there, large and small? I would say, yeah, go ahead, go ahead, Keith.
Thanks, Keith I appreciate that and just one more on the on the on the volume theme.
Any comments on quoting activity, new order activity, just what youre seeing hearing from customers out there.
And small thank you.
I would say Yeah go ahead go ahead Keith.
I would say again good activity levels for the fourth quarter and as we exited the year business conditions overall fairly stable.
Keith E. Pratt: Yeah, I would say, again, good activity levels for the fourth quarter. And as we exited the year, business conditions overall were fairly stable. I would agree with that. Stable is a good word.
I would agree with that stable stable is a good word.
Okay. Thanks, guys on that.
Joseph F. Hanna: Okay, thanks guys for that. Kind of the same question, but now on the pricing front, appreciate the charts you share, which tell a good story. But if either you'd like to elaborate on the pricing momentum you have right now, maybe categorize it into modular, large, small project, any way you'd like to break it out. But just curious what you're seeing overall and with a little bit of detail.
The same question, but now on the pricing front I appreciate the the charts you share.
Which which tells a good story, but it's either you'd like to elaborate on.
The pricing momentum you have right now maybe categorize and modular large small project any way you'd like to break it out, but just curious what youre seeing overall and with with a little bit of detail. Thanks, Yes.
Yes, Scott I mean, I would say that what we've experienced this year.
Joseph F. Hanna: Thanks. Yeah, Scott. I mean, I would say that what we've experienced this year was, you know, continued momentum with pricing. And that went all the way into Q4 for us. So we've been able to continue to increase prices both in our education and commercial parts of the business. And that just follows the trend that we've been following the entire year, and I believe it just shows that there's still room to increase prices. And we don't see that ending any time soon.
Continued momentum with pricing and that just.
When all the way into the into Q4 for US. So we're been able to continue to increase pricing both in our education and commercial part of the business and that just follows the trend that we were.
Following the entire year and I believe it just reflects that.
Still room to increase pricing.
And.
We don't see that that ending anytime soon.
Alright, Thanks, guys just a couple more from me.
Just curious at mobile modular plus site related services, maybe some discussion of the product categories, where you are having some of the most success.
Joseph F. Hanna: Alright, thanks guys. Just a couple more from me. Just curious, Mobile Modular Plus, site-related services, maybe some discussion of the product categories where you're having the most success. Thanks. Well, with Mobile Modular Plus, I mean, it's our offering of products inside of the building. So it could be furniture, it could be, you know, coffee makers, water coolers, whatever it is that holds tanks, things like that, damage waivers, and we're seeing growth in all of those areas. And so it's been pretty broad-based, and we've been very pleased with the traction that we've gotten within the sales force. Site-related services, you know, are things that are done outside the buildings. For somebody who wants more of a turnkey approach, and that could be walkways, overhead covers, other types of landscaping, or driveways or whatever somebody wants to have to use when they have the building installed to make it more than just, you know, having a trailer delivered.
Well with with mobile modular plus I mean, it's our offering of.
Product inside of the building so it could be furniture it could be.
Coffeemakers water coolers, whatever it is that holding tanks things like that.
Damage waivers and we're seeing growth in all of those areas.
So it's been pretty broad based and we've been very pleased with the traction that we've gotten within the sales force.
Site related services are things that are done outside the buildings for someone who wants more of a turnkey approach that could be walkways overhead covers.
Other types of landscaping or driveways or whatever somebody wants to have to use when they had the building and start to make it more than just having a trailer delivered and so we had opportunities to do that in the quarter or two and it actually was a very nice quarter for us in our site.
Related services. So those are just some of the applications for both of those segments.
Thanks.
Vesta congratulations it looks like all your integration initiatives are now complete and I know thats, a big step so so kudos there.
Joseph F. Hanna: And so we had opportunities to do that in the quarter, too, and it actually was a very good quarter for us in our site-related services. So those are just some of the applications for both of those segments. Thanks. Now, Vesta, congratulations. It looks like all your integration initiatives are now complete, and I know that's a big step, so kudos there. Synergies, if you could remind us, I know that there was an EBITDA Synergy run rate of $8 million by 2024. Just maybe a progress report right here at this time at the end of 2023, Joe or Keith, about where you stand with that and if there's any update to what you think you can procure there. Yeah, I would say Scott, as we really have indicated throughout the journey with Vesta, we're very pleased with the business. We're really pleased with the great work done by the joint team, Thrive Integration. We feel very good about all of our financial goals, including synergies, in terms of what we expected and what we have accomplished to date and the outlook for the business. Thanks. And just one last one.
Synergies, if you could remind us I know that there was.
EBITDA synergy run rate 8 million by 2024.
Just maybe a progress report right here at this time at the end of 'twenty three.
Joe Keith about where you stand with that and if there's any update to what you think you can procure there. Thanks.
Got it.
Yes, I would say Scott.
We really have indicated.
Tony with best we're very pleased with the business. We're really pleased with the great work done by the joint teams to drive integration, we feel very good about all of our financial goals, including synergies in terms of what we expected and what we have accomplished to date and the outlook for the business.
Thanks, and just one last one.
We are continuing to see a bit of cyclical softness.
Semiconductors I guess.
If you can take us a level deeper on to where you are in that cycle, what you're hearing from those customers and.
And then maybe just an update on on <unk> and trend there. Thanks, so much.
Sure I mean, we've we've been dealing with this now for most of 2023.
We would have expected to come out of this trough by now.
Joseph F. Hanna: At TRS, continuing to see a bit of cyclical softness, particularly semiconductors. I guess, you know, if you can take us a level deeper on where you are in that cycle, what you're hearing from those customers, and then maybe just an update on 4G to 5G and the trends there. Thanks so much.
And we're hoping that is definitely the case I think usually the cycles don't last for significant amounts of time and in Q4, we saw just continued.
Weakness in that particular sector and so.
I just don't I can't speculate on when we think thats going to happen, but with the.
Joseph F. Hanna: Sure. I mean, we've been dealing with this now for most of 2023. We would have expected to come out of this trough by now. And, you know, we're hoping that is definitely the case. I think, usually, these cycles don't last for significant amounts of time.
More of the.
AI initiatives and research going on.
We'd like to be involved in that and are involved in that and so that's certainly a bright spot that's out there.
For the continuing five G.
That's been I.
I would say rolled out on a very very slow basis.
Joseph F. Hanna: And in Q4, you know, we saw just continued weakness in that particular sector. And so I just don't, I can't speculate on when we think that's going to happen. But with the more AI initiatives and research going on, we'd like to, you know, be involved in that, and we are involved in that. And so that's certainly a bright spot that's out there. And then for, you know, the continuing 5G, I would say, that's been, I would say, rolled out on a very, very slow basis, and tower modifications and backhaul upgrades and things like that for increased bandwidth to deal with 5G have been methodical, but I would say not on any kind of accelerated basis that we saw in 2023. It was pretty much a steady business that we got. I don't see that necessarily changing.
Tower modifications and backhaul upgrades and things like that for.
Increased bandwidth to deal with <unk> have been methodical, but I would say not.
Not in any kind of accelerated basis that we saw in 2023. It was pretty much kind of steady business that we got I don't see that necessarily changing.
Okay. Thanks, that's all from me good job.
Thank you Scott.
Thank you and just a reminder, ladies and gentlemen star one please for any further questions. This afternoon and again, we'll pause for just a moment.
And ladies and gentlemen that appears to be the last.
Question, Let me now turn the call back over to Mr. Hannah for any closing comments.
I'd like to thank everyone for joining us on the call today and for your continuing interest in our company. We look forward to speaking with you again in late April to review, our first quarter results.
Thank you, Mr Han and ladies and gentlemen. This concludes today's conference call. Thank you for your participation you may now disconnect.
Joseph F. Hanna: All right, guys. Thanks. That's all from me. Good job.
Okay.
Got it.
Hmm.
Joseph F. Hanna: Thank you, Scott. Thank you, and just a reminder, ladies and gentlemen, star one, please, for any further questions this afternoon, and again, we'll pause. And ladies and gentlemen, that appears to be the last question.
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Joseph F. Hanna: Let me now turn the call back over to Mr. Hanna. I'd like to thank everyone for joining us on the call today and for your continuing interest in our company. We look forward to speaking with you again in late April to review our first quarter results. Thank you, Mr. Hanna. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now...
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