Q4 2024 Custom Truck One Source Inc Earnings Call
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Regina: Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Custom Truck One Source Inc. Fourth quarter and full-year 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.
Speaker Change: Although these forward looking statements are based on management's current expectations and beliefs actual results may differ materially for a discussion of some of the factors that could cause actual results to differ please refer to the risk factors section of the company's filings with the SEC.
Speaker Change: Please note that you can find reconciliations of the historical non-GAAP financial measures discussed during the call and the press release, we issued yesterday afternoon.
Speaker Change: Press release, and our fourth quarter Investor presentation are posted on the Investor Relations section of our website.
Speaker Change: We filed our 2024 10-K with the SEC yesterday afternoon.
Speaker Change: Today's discussion of our results of operations for custom truck one source ink custom truck is presented on the historical basis as of or for the three and 12 months ended December 32024, and prior periods joining.
Speaker Change: Joining me today are Ryan Mcdonald, CEO, and Chris separate Jesse CFO.
Speaker Change: I'll now turn the call over to Ryan.
Speaker Change: Thank you, Brian and welcome everyone to today's call custom truck ended 2024 on a very positive note.
Ryan: Our Srs and the Aps segment has benefited from the strong improvement in utility related demand that we saw in the third quarter, which continued through the end of the year Ges had a record quarter in Q4 and record year.
Speaker Change: Exceeding $1 billion in annual sales for the first time.
Speaker Change: Last year's performance highlights the resilience of our end markets and our ability to adapt to meet customers' needs in a rapidly changing business environment.
Speaker Change: We feel that our performance in Q4 sets us up well for the return to growth that we anticipate in 2025.
Speaker Change: Our Q4 results show that the recovery that we experienced in our T&D end markets in Q3 continued to the end of the year we.
Speaker Change: We saw sequential improvements in our two main rental kpis.
Speaker Change: Average <unk> on rent and average utilization.
Speaker Change: These trends align with our utility contractor customers expectations of sustained and increased activity through the end of last year and which they expect to continue into 2025 about 55% of our total revenue comes from the utility end market, which includes both transmission and distribution work.
Speaker Change: We are witnessing significant growth in electricity demand driven by AI, driven data center development grid upgrades and investments in electrification trends recent.
Speaker Change: Recent industry reports projected 24% to 29% increase in U S electricity demand by 2035, nearly double the previous forecast.
Speaker Change: These trends provide strong tailwind for our future growth, we view transmission line mile completions, and the IOU rate case approvals as key indicators of utility end market demand.
Speaker Change: Our recent trends in customer interactions confirm that the conditions in the utility end market are continuing to normalize we continue to see attractive rental demand across our utility and other primary end markets as well.
Speaker Change: The infrastructure rail and telecom, which positions us well for a strong start to the year and supports our outlook for IRS for 2025.
Speaker Change: Chris will detail, our IRS segment performance, but I'd like to highlight some key trends.
Speaker Change: Average <unk> on rent for Q4 was over $1 2 billion.
Speaker Change: 12% sequential quarterly increase in addition average utilization for Q4 was just under 79% a 570 basis points sequential improvement versus Q3.
Speaker Change: In Q4 rental revenue was up 15% versus Q3, the second consecutive quarter of sequential growth in rental revenue.
Speaker Change: Since 2022.
Speaker Change: With the recovery in our transmission equipment utilization, we continue to see mid seventies below 80% utilization rates across most of our fleet and end markets demonstrating the long term resilience of our markets the uptick in rental activity and customer optimism also boosted rental asset sales.
Speaker Change: <unk>, marking the third consecutive quarter of sequential improvement with Q4 up 13% from Q3.
Speaker Change: We continue to leverage the recent strength in IRS to selectively invest in our rental fleet.
Speaker Change: At the end of Q4, our total OTC was just over $1 5 billion, our highest quarter end level and up nearly $22 million in the quarter. We've continued to invest during Q1 to ensure we have adequate equipment to meet current and projected rental demand.
Speaker Change: In June of this year, we expect to open a new branch in Portland, Oregon. This new branch highlights our confidence in the strength of the rental market.
Speaker Change: Through our investment in both our rental fleet and expanded physical presence. We believe we are well positioned to capitalize on the anticipated growth in 2025 and beyond.
Speaker Change: As we expected Q4 was our strongest quarter of the year for our <unk> segment, which saw a record quarterly revenue of over $300 million.
Speaker Change: Up 18% sequentially and up 3% compared to Q4 of 2023.
Speaker Change: Full year Ges revenue exceeded $1 billion for the first time, which was up almost 7% versus 2023, following almost 29% growth in 2023.
Speaker Change: We saw very strong demand from our forestry, our vegetation management customers at the end of the year largely as a result of several utilities awarding contracts to many of our customers.
Speaker Change: Segment gross margin was up 45 basis points on a sequential basis, but down year over year impacted by mix and improved inventory levels across the broader industry.
Speaker Change: We anticipate this will begin to normalize later in the year.
Speaker Change: While we did deliver a very strong Q4, we did see some hesitation from our customers to buy especially in November.
Speaker Change: We think high interest rates and some level of caution on the economy influence. This.
Speaker Change: As such we are closely watching our order intake in Q4, we saw a 35% increase in net orders.
Speaker Change: Compared to Q4 last year and that trend is continuing so far in 2025.
During Q4, our focused efforts to manage our inventory levels resulted in a significant reduction in inventory of more than $150 million versus the end of Q3 and more than $170 million from peak levels at the end of August.
Speaker Change: We expect to continue to reduce our inventory levels this year to a more normalized level.
Speaker Change: We are confident that we have sufficient inventory to meet strong customer demand for new equipment as well as to grow our fleet to meet rental demand in our core end markets.
Speaker Change: We continue to monitor developments involving tariffs in 2020 for approximately 30% of our total purchases came from Mexico, and Canada, primarily from our chassis and key attachment providers, we're working closely with our suppliers in both countries as well as our steel.
Speaker Change: And aluminum suppliers to develop plans to be able to continue to support our customers and minimize the impact of tariffs on our operations.
Speaker Change: Additionally, we are monitoring upcoming chassis emission regulations from carb and the EPA as well as any potential changes to those regulations under the new administration.
Speaker Change: The entire Ges team continues to perform exceptionally well.
Speaker Change: We are proud of the business we have built.
Speaker Change: During Q4, we closed on a sale leaseback transaction on eight of our own properties for net proceeds of over $52 million.
Speaker Change: Which we used to reduce borrowings under the ABL and to repay other debt.
Speaker Change: We view this transaction as an attractive opportunity to unlock the value of certain of our owned real estate and to reduce our leverage. Additionally in January of this year.
Speaker Change: And platinum equity jointly purchased all of energy capital partners remaining <unk> shares at a price of $4 per share.
Speaker Change: We felt it was an attractive opportunity to purchase a significant number of <unk> shares at a meaningful discount to the market price.
Speaker Change: With respect to our 2025 guidance, we do expect this year to be a year of growth across all three of our business segments.
Chris: While Chris will provide more details for 2025, we expect total revenue of between $1 97 and $2.06 billion.
Chris: And projected adjusted EBITDA between $370 million and $390 million we.
Chris: We will continue to focus on working capital management and free cash flow generation.
Chris: Which will allow us to make progress towards meeting our three times net leverage target.
Chris: In closing our business outlook remains strong driven by long term sustained end market demand buoyed by Megatrends in a strong competitive advantage that sets us apart.
Chris: Our multi decade relationships with strategic suppliers, and our long tenured and diversified customer base will continue to be keys to our success. We are committed to continuing our investment in growing our industry, leading specialty rental fleet, ensuring that we remain at the forefront of the markets. We serve Additionally, our focus.
Chris: On continuous improvement projects throughout our business will help us maintain operational excellence I continue to have the highest degree of confidence in the custom truck team and want to thank everyone for their hard work and dedication that helped us navigate last year's challenges in the utility end market.
Chris: As we begin this year on a stronger footing, we are confident that our current activity levels combined with strong market <unk> will drive our expected double digit adjusted EBITDA growth across our consolidated business in 2025, we look forward to updating you on our progress on next quarter's call.
Chris: With that I will turn it over to Chris to discuss our fourth quarter results in detail.
Chris: Thanks, Ryan for the fourth quarter, we generated $521 million of revenue $168 million of adjusted gross profit and $102 million of adjusted EBITDA.
Chris: All of our rental segment Kpis improved in the quarter, both on a sequential and a year over year basis average utilization of the rental fleet for Q4 was just under 79% compared to 73% in Q3 and under 78% in Q4 of the prior year.
Chris: Average always see on rent in the quarter increased to over $1 2 billion compared to under $1 1 billion in Q3, and $1 6 billion in Q4 of 2023.
Chris: While late December saw the typical seasonal decrease in <unk> on rent and utilization. So far in Q1, we are seeing the expected rebound in both measures, which currently stand at more than $1 $109 billion and over 78% respectively.
Chris: The <unk> segment had $172 million of revenue in Q4 down from $185 million in Q4 of 2023. However.
Chris: However, given the sustained improvements in utilization and average always see on rent in the quarter rental revenue was up 15% sequentially.
Chris: In addition increased overall demand for equipment helped drive the 13% sequential improvement in rental asset sales as well.
Chris: Both trends resulted in overall revenue growth for the IRS segment, increasing for the third straight quarter.
Chris: Adjusted gross profit for IRS was $105 million for Q4 down marginally from $107 million in Q4 of 2023, but up 20% sequentially.
Chris: Adjusted gross margin for <unk> was 61% in the quarter up from 58% in both Q3 and the same period last year.
For Q4, we maintain margins in the expected range of the low to mid 70% range for rental revenue and mid to high 20% range for rental asset sales on.
Chris: <unk> yield was over 38% for the quarter up slightly from Q3.
Chris: Net rental Capex in Q4 was $71 million and our fleet age improved slightly to three two years.
Chris: Or are we seeing the rental fleet ended the year at 152 billion.
Chris: Up $60 million versus year end, 2023, and up $22 million versus the end of Q3.
Chris: We expect to continue to invest in the fleet this year and expect to grow our OCC by mid single digit percentage versus the end of 2024 as.
Chris: As we always do we will adjust our capex plans throughout the year to reflect our customers' demand to both rent equipment and purchased used equipment out of our fleet.
Chris: And the Tes segment, we sold $308 million of equipment in Q4, a quarterly record and an increase of 3% compared to Q3 of the previous year and our more than 18% increase sequentially from Q3 <unk>.
Chris: Total <unk> revenue for the year was $1 1 billion. The first time annual <unk> sales exceeded $1 billion.
Chris: Gross margin in the segment was 16, 6% for the quarter down from Q4, 2023, but up 45 basis points from the previous quarter.
Chris: For 2024, <unk> gross margin was just under 17% in line with our expected margin range for the segment.
Chris: CES gross margin continues to be impacted by mix and improved inventory levels across the broader industry.
Chris: CES, new sales backlog moderated in the quarter ending the year at just under $370 million.
Chris: <unk> strong levels of production in new equipment sales in the quarter allowed us to make headway towards reducing our backlog to a more normalized level, which currently stands at more than four months of annual <unk> sales consistent with our targeted historical average of four to six months.
Chris: Net orders improved in Q4 to $280 million up over 90% on a sequential basis and up 35% compared to Q4 of 2023.
Chris: We've continued to see strong order flow so far in 2025 with backlog currently sitting at $445 million up more than 20% since year end.
That combined with ongoing feedback from our customers regarding their equipment needs for 2025 provides us with confidence that we will continue to see revenue growth in TTS.
Chris: Our strong and long standing relationships with our chassis body in a catchment vendors continue to be an important driver of our record <unk> production.
Chris: Our current level of inventory positions us well to meet our production fleet growth and sales goals for the year.
Chris: Our Aps business posted revenue of $41 million in the quarter up more than 6% from Q4 of the previous year and up 11% sequentially.
Chris: Adjusted gross profit margin in the segment was more than 29% for Q4 slightly lower than Q4 of 2023, but up substantially compared to Q2 and Q3 of 2024.
Chris: Overall in Q4, the Aps business was impacted by an increase in rentals of tools and accessories, which were positively impacted by the improved fundamentals in the utility end market.
Borrowings under our ABL at the end of 2024 or $583 million.
Speaker Change: A decrease of $45 million versus the end of Q3 as Ryan mentioned, we closed on a sales leaseback transaction on eight of our owned properties in Q4, resulting in more than $52 million of net proceeds, which we used to reduce outstandings under our ABL and to repay other debt and.
Speaker Change: Addition, during Q4, we began to see the benefits of our inventory management efforts, which resulted in an inventory reduction of more than $150 million in Q4, and more than $120 million and reduce balances under our floor plan lines.
Speaker Change: We expect to continue to reduce our inventory this year, which should contribute to lower balances on our floor plan lines as well as reduced borrowings on the ABL.
Speaker Change: As of yearend, we had $364 million available in over $158 million of suppressed availability under the ABL.
Speaker Change: With 2024, adjusted EBITDA of $340 million. We finished 2024 with net leverage of four five times, we expect that reduced inventory levels and floorplan balances as well as our returning to growth and the impact of lower interest rates will all contribute to increased levered free cash flow generation in 2025.
Speaker Change: Which we intend to use to reduce our net leverage achieving net leverage below three times remains a primary and important goal for us and one that we expect to achieve sometime in fiscal 2026 or.
Speaker Change: Our initial 2025 guidance for our segments is as follows we expect <unk> revenue of between 660 and $690 million.
Speaker Change: <unk> revenue in the range of $1, one six to $1 billion to $1 billion in Aps revenue of between 150 and $160 million. This results in total revenue in the range of $1 $97 billion to $2.06 billion.
Speaker Change: We are projecting adjusted EBITDA in a range of $370 million to $390 million and net rental capex of just under $200 million.
Speaker Change: In addition, as we have begun to make progress on unwinding, our significant strategic investment in inventory over the last three years, we expect to generate meaningful levered free cash flow in 2025, setting a target of $50 million to $100 million.
Speaker Change: Given our projected adjusted EBITDA growth and free cash generation, we expect to make progress in fiscal 2025 towards our stated goal to achieve a net leverage ratio below three times with a target to get below four times by the end of this fiscal year.
Speaker Change: In closing I want to Echo Brian's comments regarding our continued strong business outlook. Despite the demand weakness we experienced for most of last year and certain utility markets. We continue to be optimistic about the long term demand drivers in our industry and our ability to return to double digit adjusted EBITDA growth this year.
Speaker Change: With that I will turn it over to the operator to open the line for questions operator.
Speaker Change: At this time I would like to remind everyone in order to ask a question press star followed by the number one on your telephone keypad. Our first question will come from the line of Justin Hauke Robert W. Baird. Please go ahead.
Speaker Change: Great.
Speaker Change: Morning, everybody.
Speaker Change: I guess my first question I wanted to I think I asked something similar last quarter, but I'm still struggling with it in terms of that Ges revenue guidance.
Speaker Change: Your forecast here is for I guess 12, 5% growth at the midpoint, but when we look at the backlog, it's down $300 million year over year, almost 50% and even with the $445 million that you called out as kind of where you're sitting today, it's still down 35% year over year.
Speaker Change: I'm just trying to understand the confidence on.
Speaker Change: Why there is such a wide disconnect where the backlog is versus the forecast and the visibility you have to add those.
Speaker Change: The CES orders come in.
Justin Hauke: Yes, Justin good to hear from you and always happy to talk through it with you but.
Justin Hauke: A couple of things one I think as we've talked about normalized backlog for US is kind of four to six months is what we've talked about.
Justin Hauke: Since being public and so we're coming off elevated backlog, which takes which goes back to kind of some of what we talked about a year ago really 18 months ago.
Justin Hauke: At this point, so what we're watching closely adjusting our orders and we're seeing kind of net orders as I said in my prepared remarks are up in the fourth quarter and we're seeing that trend continue.
Justin Hauke: In Q1, and so that's kind of a bottoms up build on on where revenue growth is if you look at kind of the history of Tds growth too you saw 7% growth last year, you saw 29% growth in.
Justin Hauke: 2023.
Justin Hauke: And so.
Justin Hauke: It's continuing to trend that way and when we look at addressable market. There is a lot of opportunity for us to continue to grow share.
Justin Hauke: All of the end markets we serve.
Justin Hauke: That's our that's our bottoms up build based on customers.
And we've tried to provide some range there.
Justin Hauke: <unk> kind of on the mid point.
Justin Hauke: The lower end of that growth is still high single digits low double digit growth.
Justin Hauke: And so I think that's where our confidence is.
Justin Hauke: And the number that we put out and Justin This is Chris maybe just one other data point just to use some of the data youre using if you look at Q3 of 23 in Q3 of 'twenty four going into the fourth quarter and the backlog was down $400 million year over year, but we still posted growth and had our best quarter ever in CES I think we had growth of roughly 3%.
Justin Hauke: So theres not a direct correlation there I think that you are trying to make with the backlog.
Justin Hauke: Yes, Okay, alright, yes that second point I guess helps.
Justin Hauke: I guess, otherwise I would think of it as a headwind because you're coming off of having such a.
Justin Hauke: Okay.
Justin Hauke: Yes elongated months of backlog would have kind of given your artificially high.
Justin Hauke: Revenue, but maybe that correlation.
Justin Hauke: Doesn't come out that way I guess.
Justin Hauke: Question is just.
Justin Hauke: When thinking about the seasonality of your guidance for the year.
Justin Hauke: Usually the first half spend kind of 45% of your revenue and EBITDA second half, 55% by 'twenty four.
Justin Hauke: Certainly a softer first half start so I guess I was just curious in terms of kind of the growth cadence now.
Justin Hauke: Now that the transmission spend has kind of come back.
Justin Hauke: That becomes more balanced this year, our <unk>, Canada and <unk>.
Justin Hauke: Seasonality that Youre rethinking.
Justin Hauke: Yes, Justin as we look at it we actually expect to have it similar again. This year I think this year finished just off of that $45 55, it could be slightly less than the 45 slightly more than the 55, plus or minus one or 2%, it's going to be similar 45 55 split between the first half second half both on revenue and EBITDA.
Justin Hauke: Okay, and then maybe one final one before I jump back in the queue just on the.
Justin Hauke: The cash proceeds from the sale leaseback or has that made a lot of sense to do that and it's good to see the free cash coming in I'm, just curious how that translates into.
Justin Hauke: I guess savings on your lease expense for 25 and does that show up.
Justin Hauke: That's kind of a reduction in interest expense or does it run through its branch cost and gross margin I'm, just trying to understand how with energy.
Justin Hauke: Yes, actually Justin it'll actually be an incremental lease expense and so we sold those eight properties in our leasing them back and so to answer your question. It will be roughly four 5% to $5 million a year of a headwind which is baked into our guidance.
Justin Hauke: And the majority of that will show up in cost of goods sold.
Justin Hauke: A small portion of it will show up.
Justin Hauke: SG&A, but the split is roughly 80 20.
Justin Hauke: Okay, Alright, so most of you. Thank you.
Justin Hauke: Yes.
Justin Hauke: Thanks Joseph.
Speaker Change: Our next question will come from the line of Scott Schneeberger with Oppenheimer. Please go ahead.
Scott Schneeberger: Thank you Scott Good morning, Hi, guys.
Speaker Change: Hey, good morning.
John: Morning, John.
John: Hey, it's Dan on for Scott. Thank you for taking our question here.
John: Could we can we start on margin.
John: You mentioned the headwind on cost of goods sold but Chris can you. Please go through the puts and takes on margin in 2025 and also provide some perspective on what the assumptions what the impacts from the tariffs you have assumed across the financial statements. Thank you, yes, I will start on margins and then I'll, let Brian add.
John: Some color on tariffs our margin targets continue to be relatively consistent in what we said in the past and so I'll take them one by one on the rental side still low to mid kind of 70% margins and it'll fluctuate based on what we see on rent and repair and maintenance costs in any particular quarter, but I think the range is low 70% to mid 70%.
John: Kind of range.
John: On used equipment sales kind of in the mid Twenty's has been our target and then on Ges, We've said kind of mid teens, it's going to be higher in some quarters can be slightly lower but on average kind of a mid teens margin profile.
Yes.
John: Jamie I'll take tariffs, but look there's two two things I think that as youre thinking about say to US are important one is kind of the natural hedge that is built in to the business, which really comes from two parts right versus the rental fleet. So we've got $1 five in the rental fleet. It's young its three just over $3. One years old I think is our average age now so you've got some.
John: Built in hedge just from the capital that's already deployed there and then the second part of that is inventory. So we talked about the decline we saw in inventory, which is important we're glad we demonstrated that in the fourth quarter, but we still have just over $1 billion of inventory on the balance sheet and so you've got some built in hedge as we think about how we manage that inventory.
John: In 2025, and then the last piece is we're working closely with our suppliers. So we do we.
John: I mean, we do receive chassis and some of our attachments from both Mexico and Canada.
John: And so we're working closely with our suppliers and we think we'll be able to mitigate the majority of the cost increase we have underwritten a little bit of cost increase in our P&L, but we think we'll be able to manage through and mitigate the majority of the cost increase as we're heading into 25 and obviously this is all happening in real time so.
John: We're adjusting as necessary.
John: And we are prioritizing, obviously, making sure we can take care of our customers.
Speaker Change: Got it thank you.
John: Oh.
John: Rental yield.
John: Improved sequentially, how do you think about the outlook there the pricing environment overall, and when do you see that inflect on a year on year basis.
John: Yes, no. It's a good question and look we think it will pull to continue to improve as we head into 2025, So obviously as the as the business environment improves.
John: We're selective in how we are able to increase price and so we will do so and have taken some of those actions in 2025 already.
John: So I think thinking about holding to slightly improving in 'twenty five.
Speaker Change: Should be should.
John: It should be consistent with what we're assuming for this year.
John: Got it thank you and final one from me I know.
John: This was covered earlier, but I'm curious on the <unk>.
John: Infrastructure build benefit.
John: When do you think we stand I mean, you have seen some benefit but what do you think we stand on the curve there from seeing those funds flow again.
John: Back to your business.
John: Yes, I still think I still think it's early I do think there is some benefit that we're seeing and from the.
John: In particular.
John: So we are seeing some benefit there and I think it's kind of mid innings would be how I would describe it at this point. So I think it's I do think it's it is a continued tailwind for us heading into 2025.
Speaker Change: Got it thanks, so much.
Speaker Change: Our next question will come from the line of Tami Zakaria with Jpmorgan. Please go ahead.
Tami Zakaria: Hey, good morning, Thank you so much.
Speaker Change: Andrew.
Speaker Change: It's great to see utilization I think you said moved up to 78% quarter to date.
Speaker Change: Could you just provide some color on what what the progression of that could look like that's embedded in the full year guide.
Speaker Change: Yes.
Speaker Change: I'll start and maybe Chris can give some more specifics, but tammy you are right. The utilization performed well in Q4, right. There's always a little bit of a slowdown that happens kind of at the very end of the year, but we are seeing utilization continue to hold in that range. So we talked about kind of that high <unk> to low <unk> range, which feels like what will be able to deliver.
Speaker Change: This year and so I would say most importantly for our utility customers in particular, we're seeing both transmission and distribution.
Speaker Change: Kind of returned to what I would call more normal utilization levels, which are in that range.
Speaker Change: Got it okay.
Speaker Change: So the guidance Thats somewhere between high <unk> low <unk> say it could move up to low 80 at some point during the year.
Speaker Change: Yes, it normally.
In normal years, yes, you see a little bit of an increase in the spring and a little bit of an increase in the fall and at this point, we would expect that that would continue we're hearing.
Speaker Change: A lot of our customers are talking about very good demand on the transmission side right now projects that are underway.
Speaker Change: More equipment as needed here in the coming weeks and months.
Speaker Change: And so I think thats, what would drive utilization a bit higher.
Speaker Change: In our business.
Speaker Change: Understood that's very helpful and one quick one.
Speaker Change: Modeling question.
Speaker Change: I think I heard you say $45 55 is the split.
Speaker Change: Between one half and second half so within one half.
Speaker Change: Would it be right to model, one one keys or the low point of the year and then you'd see gradual improvement.
Speaker Change: Yes that would be accurate and we had a really strong fourth quarter in Q4 for our new sales.
Speaker Change: Expected to start a little bit slower in Q1.
Speaker Change: In your modeling.
Speaker Change: Year over year, Q1 could be down slightly to up slightly versus Q1 of last year, and then that will help you get to Q2.
Speaker Change: But we expect that 45% yes.
Speaker Change: <unk> $45 55, maybe slightly less than 45, maybe slightly more than 55 second half of the year.
Speaker Change: Great. Thank you.
Scott Schneeberger: Thanks Tammy.
Speaker Change: Again for any questions Press Star one and our next question will come from the line of Brian Brophy with Stifel. Please go ahead.
Speaker Change: Hey, guys. This is Andrew on for Brian Murphy. Thank you for taking my question.
Lastly, Andy you gave us an edge.
Speaker Change: Last quarter, you gave us an estimate of how much of a benefit there was from emergency.
Speaker Change: Restoration is there anything you can provide us on that this quarter.
Speaker Change: Yes, it's a good it's a good question look we're still seeing.
Speaker Change: Some of the benefits there is still work happening on the East coast right now, we're seeing some benefits in the Carolinas.
Speaker Change: From that and then are obviously seeing.
Speaker Change: Some demand for equipment out west as well for some of the fires in California.
Speaker Change: So I would say that it was less than it was in the fourth quarter, but there still is some benefit and I think some of it is more rebuilding happens I think thats, where kind of the breadth of our product offering.
Speaker Change: We will have been will again benefit from offering some of the heavier, especially vocational trucks in particular, so I do think there is some benefit I think it is less than it was in Q4.
Speaker Change: But in Q3, but it's not sorry, it's not we haven't we haven't quantified it because I don't think it's overly significant right now.
Speaker Change: Okay.
Speaker Change: And then I was wondering how youre thinking about real estate property sales going forward. It sounded like this was something you are continuing to evaluate.
Speaker Change: Free up cash and unlock value elsewhere.
Speaker Change: Is this something we should expect more of in the future.
Speaker Change: And if so.
Speaker Change: Any idea on link value properties Youre looking at or.
Speaker Change: Aiming or potential proceeds thank you.
Speaker Change: No. It's a good question.
Speaker Change: The majority of the properties that we own.
Speaker Change: So no I don't think its something that we would.
Speaker Change: Plan to do again in the future.
Speaker Change: And just felt like it was the it was the right time to be able to unlock some of the value in that real estate and yet still have really long leases in place to be able to to be able to use those properties for.
Speaker Change: The foreseeable future.
Speaker Change: Thank you.
Speaker Change: And that will conclude our question and answer session I will now hand, the call back over to Ryan Mcmonagle for any closing remarks.
Ryan McMonagle: Great. Thanks, everyone for your time today and for your interest in custom truck. We look forward to speaking with you on our next quarterly earnings call and in the meantime, please don't hesitate to reach out with any questions. Thank you again and have a great day.
Ryan McMonagle: This concludes today's meeting you may now disconnect.
Ryan McMonagle: [music].
Ryan McMonagle: Okay.