Q3 2025 Herc Holdings Inc Earnings Call
Speaker #2: Hello . And thank you for standing by . My name is Mark , and I will be your conference operator today . At this time , I would like to welcome everyone to her Holdings , Inc. .
Speaker #2: Third quarter 2020 Earnings Call and webcast . All lines have been placed on mute to prevent any background noise . After the speakers remarks , there will be a question and answer session .
Speaker #2: If you would like to ask a question during this time , simply press star followed by the number one on your telephone keypad and to withdraw your question , press star one again .
Speaker #2: And we kindly ask you to please limit yourself to one question and one follow-up. Now, I would like to turn the call over to Leslie Hunziker, Senior Vice President, Investor Relations.
Speaker #2: Please go ahead .
Speaker #3: Thank you . Operator and good morning , everyone . Today we're reviewing our third quarter 2020 results with comments on operations and our financials , including our view of the industry and our strategic outlook .
Speaker #3: The prepared remarks will be followed by an open Q&A . Let me remind you that today's call will include forward looking statements . These statements are based on the environment as we see it today , and are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections .
Speaker #3: These risks and uncertainties include, but are not limited to, the factors identified in the press release and Form 10-Q and in our most recent Annual Report on Form 10-K, as well as other filings with the SEC.
Speaker #3: Today , we're reporting our financial results on a GAAP basis , which include H results for June through September . In the nine month period for 2025 .
Speaker #3: In addition , we will be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance . Reconciliations for these non-GAAP measures to the closest GAAP equivalent can be found in the conference call materials .
Speaker #3: Finally , please mark your calendars to join our management meetings at the Baird Industrial Conference in Chicago on November 11th . Redburn Atlantic's virtual CEO conference on December 2nd and the Melius Research Conference in New York on December 10th .
Speaker #3: This morning , I'm joined by Larry Silber , President and Chief Executive Officer . Aaron Birnbaum Senior Vice president and chief operating officer .
Speaker #3: And Mark Humphrey , senior vice president and chief financial officer . I'll now turn the call over to Larry .
Speaker #4: Thank you , Leslie , and good morning , everyone . I want to start by thanking all of teamwork for their incredible energy , focus and commitment throughout the third quarter , integrating the largest acquisition in our industry is no small feat , but our team has truly risen to the challenge driving alignment , acceleration , accelerating progress , supporting one another , and accomplishing a large systems migration all while remaining focused on scaling operations in a mixed environment .
Speaker #4: We continue to see robust activity across mega projects and specialty solutions , underscoring the strength of our strategic positioning in the local markets .
Speaker #4: Growth is limited as new projects in the commercial sector remain on hold due to the high interest rate environment in this bifurcated landscape .
Speaker #4: Our scale advanced technology platform and diversification across geographies and markets and product lines continue to be competitive . Advantages . As enabling us to operate with agility and resilience at the same time .
Speaker #4: We're executing against our integration roadmap with discipline , speed and a clear focus on unlocking both cost and revenue synergies within our three year time frame .
Speaker #4: Let's now turn to slide number five for an update on our progress since closing the transaction . We expanded our field operating structure from 9 to 10 US regions reorganized districts and added key leadership roles to ensure operational continuity and scalability .
Speaker #4: Our original vice presidents and field support staff continued to relentlessly manage change and support our teams for growth . Early on , we completed a comprehensive sales territory optimization exercise to restructure coverage and deepen customer relationships .
Speaker #4: Given our much larger scale . And we equipped our new sales team members with a broader product offering and expert product support , they are now undergoing training on enhanced market and customer analytics and customer engagement tools .
Speaker #4: Together , these initiatives will further improve retention and strengthen the capabilities and execution of our sales force . Equally important , in the quarter , we completed the full systems integration .
Speaker #4: We got this done in just 90 days compared to the typical timeline of 6 to 18 months . For companies of a similar size and complexity .
Speaker #4: This accelerated execution reflects the strength of our internal capabilities , discipline , planning , and deep experience with enterprise technology deployments . This integration included an enterprise platform consolidation , where we transitioned the H and E branch operations from SAP to our customized rental man front end system , and Oracle ERP framework .
Speaker #4: Our proprietary pricing engine also is now fully integrated with centralized controls in place to ensure consistency , protect margins , and align pricing decisions with our broader business goals .
Speaker #4: Our logistics system , called on the Go , is also now operational across the expanded network to improve delivery accuracy and optimize route planning at the lowest possible cost .
Speaker #4: As we deployed our business Intelligence suite across the acquired locations , giving us real time visibility . Beginning this month into combined performance metrics , customer behavior and operational KPIs .
Speaker #4: Finally , our industry leading customer facing technology pro controlled by Herc Rentals , is now available to our entire customer portfolio enabling equipment , renting , tracking and asset management and control from any device , anywhere .
Speaker #4: We view these systems integrations not just as a technical milestone , but as strategic enablers . They're going to allow us to scale faster , operate smarter , and deliver more value to our customers and shareholders .
Speaker #4: The systems alignment marks a turning point for the first time. Beginning in the fourth quarter, we have full visibility into our combined business and are now positioned to analyze the operations at a more granular district and branch level.
Speaker #4: Specifically , this quarter , we're drilling down into three key areas . First , productivity . We're using the data to benchmark performance , flagging underperforming locations for deeper review and identifying top tier branches where we can replicate best practices to drive operational improvement across the organization .
Speaker #4: Second , expense management . We want to pinpoint additional variable cost saving opportunities , discontinue activities that do not align with our strategic priorities , and eliminate inefficiencies at the local level .
Speaker #4: And third fleet management . After having conducted a full audit of our combined equipment assets in the third quarter , we made good progress of disposing underutilized off brand and aged acquisition fleet .
Speaker #4: Aaron will share some of those details , but our focus on fleet management is ongoing as we rebalance our portfolio to match demand patterns , optimize mix and support scalable growth .
Speaker #4: Another way we're scaling the business for 2026 and beyond is by optimizing our network footprint . We've undertaken a market by market analysis of our combined branch locations with a goal of reducing redundancies and enabling better product allocation to further strengthen our market presence over the next six months , we expect to consolidate some general rental branches for cost and operational efficiencies .
Speaker #4: We'll repurpose certain of those branches into standalone specialty equipment locations . In other instances , we'll further expand access to our specialty solutions by Co-locating specialty equipment within existing general rental facilities .
Speaker #4: These initiatives are expected to result in about 50 additional specialty locations , increasing our specialty network by 25% next year and supporting accelerated growth in these high margin product categories .
Speaker #4: Overall , we're making excellent progress on the integration our teams are getting acclimated , our systems are unified , our customers are already seeing early benefits .
Speaker #4: We remain confident in our ability to deliver the full value of the acquisition , both in terms of cost efficiencies and accelerated growth .
Speaker #4: While continuing to deliver on our long term growth strategies , which are outlined on slide number six . As we've said , integrating this acquisition is our primary focus , and therefore we have paused other M&A initiatives for the time being and are completing completing the remaining in-flight greenfields .
Speaker #4: Year to date , we added 17 greenfield facilities , of which six were opened in the third quarter , and we have roughly ten more new location openings planned for the fourth quarter .
Speaker #4: Capitalizing on the secular shift from ownership to rental , particularly in the specialty market and yielding greater value from megaprojects through specialty solutions , is a key focus for us .
Speaker #4: Further cross-selling specialty gear is an important component of the revenue synergies with H-a . In line with this strategy , we've continued to overindex our gross CapEx plans towards specialty with a goal of increasing this category as a percent of our overall fleet composition , long term .
Speaker #4: And of course , repurposing general rental branches into pro solutions facilities . As I just mentioned , will support specialty equipment capacity for the 160 plus acquired locations .
Speaker #4: Finally , we continue to elevate our industry leading pro control by Kirk Reynolds Technology offering with new efficiency features and controls , seamless navigation and tailored experiences , all in a single app .
Speaker #4: Addressing our customers more complex and expanding needs while we work through the integration of Harr , we'll continue to follow our playbook , leveraging branch network scale , our broad fleet mix , technology , leadership and capital , and operating discipline to position us to manage across the cycle and generate substantial growth over the long term .
Speaker #4: We are committed to our goal of becoming the supplier , employer and investment of choice for the equipment rental industry . Now , I'll turn the call over to Aaron , who will talk a little bit more about operating trends , and then Mark will take you through the third quarter financial performance and outlook .
Speaker #4: Aaron .
Speaker #5: Thanks , Larry , and good morning , everyone . As we continue executing on this important integration , I also want to personally thank our teams for their incredible commitment and perseverance , whether navigating change , supporting integration efforts , or pushing forward on growth initiatives , their resilience and focus have been exceptional .
Speaker #5: They have continued to show up for our customers , for each other and for the future . We're building together that dedication is what drives our momentum , and it's what sets teamwork apart .
Speaker #5: Equally important to our success is our unwavering commitment to safety. Safety is at the core of everything we do and is an immediate priority.
Speaker #5: We onboarded 2500 new team members into our health and safety program in the third quarter , as you can see on slide eight , our major internal safety program focuses on perfect days .
Speaker #5: We strive for 100% perfect days throughout the organization . In the third quarter , on a branch by branch measurement , all of our operations achieved at least 97% days as perfect .
Speaker #5: Also notable , our total recordable incident rate remains better than the industry's benchmark of 1.0 , reflecting our high standards and commitment to the safety of our people and our customers .
Speaker #5: Turning to slide nine . We are operating in a disproportionate demand environment where the local market remains affected by interest rate sensitive commercial construction .
Speaker #5: While Mega activity continues to be robust . In the third quarter , local accounts represented 52% of rental revenue , compared with 53% a year ago on a pro forma basis .
Speaker #5: On the national accounts side , private funding for new large scale projects is still quite robust . We kicked off several new mega projects in the third quarter as the push for reshoring manufacturing , along with increases in LNG export capacity and the expansion of artificial intelligence .
Speaker #5: We are continuing to drive new construction demand. We are winning our targeted 10% to 15% share of these project opportunities, with even more new mega projects on deck and current projects still ramping up. As a combined company, we'll continue to target a 60% local and 40% national revenue split long term.
Speaker #5: Knowing that this diversification provides for growth and resiliency . Sticking with the topic of resiliency , let's turn to slide ten , where you can see that despite the uncertain sentiment in the general market around interest rate , interest rates and tariffs , industrial spending and non-residential construction starts still show plenty of opportunity for growth .
Speaker #5: Built on a foundation of mega project development and infrastructure investments . Taking a look at the updated industrial spending for forecast at the top left , Industrial Info Resources is projecting strong capital and maintenance spending through the end of the decade .
Speaker #5: Dodge is forecast for non-residential construction starts in 2025 , is estimated at $467 billion , a 4% increase year over year , with 3 to 6% growth continuing in each successive year .
Speaker #5: Additionally , the Mega Project chart in the upper right quadrant gives you a snapshot of the total dollar value in US construction projects starts over the last two years , and a growth projection that exceeds $650 billion for 2025 .
Speaker #5: We estimate we are only in the early to middle innings of this multiyear opportunity . We don't take the chart out beyond this year because visibility is less clear for actual start dates .
Speaker #5: Of those projects, still in the planning phases. But there are trillions of dollars in the mega project pipeline that aren't accounted for here.
Speaker #5: Finally , there's another $346 billion in infrastructure projects estimated for 2025 . That's a roughly 6% increase over 2024 . And infrastructure construction activity is expected to further strengthen in the out years .
Speaker #5: Of course , there is some overlap in projects among these four data sets , but no matter how you look at it , for companies with the safety record , product breadth , technologies and capabilities to service customers at the national account level , the opportunities for growth remain significant .
Speaker #5: Moving to slide 11, let me take a minute to walk you through how we're managing fleet levels and equipment mix in response to this dynamic and evolving landscape.
Speaker #5: First , we are rightsizing our fleet and aligning brand consistency to drive operational efficiency and long term value . At the same time , we're making targeted investments in specialty equipment to unlock revenue synergies , ensuring we're not just leaner , but also more capable and better aligned with high value opportunities .
Speaker #5: Our fleet strategy is also calibrated to support the divergent operating environment , scaling and repositioning fleet to meet national demand , while maintaining flexibility in local markets .
Speaker #5: In the third quarter , we executed against this strategy increasing gross CapEx seasonally and expanding our specialty equipment offering in line with our much larger branch network and our revenue synergy goals .
Speaker #5: We're still expecting gross fleet CapEx of 900 million to $1.1 billion for 2025 . Also in the latest quarter , we nearly doubled disposals on an EC basis versus last year .
Speaker #5: As we work to optimize our larger general rental fleet post acquisition realized proceeds were 41% of ASC on those equipment dispositions . Given the significant amount of fleet we were selling and the variance in brand quality , more sales went through the auction channel this quarter than in the recent past .
Speaker #5: Once we have the fleet in a more optimal position , we'll resume our channel shift strategy to the higher return wholesale and retail outlets for the full year .
Speaker #5: We're still expecting disposals at OEC of 1.1 to $1.2 billion . We're tracking at about 75% of that target , with the remainder coming in the fourth quarter .
Speaker #5: I know there's strong interest in our 2026 CapEx plan , but it's still early in the process . So we're not yet in a position to to share specifics , but from a high level , I can tell you that we have an especially young fleet today .
Speaker #5: As a result of the HD acquisition, we'd like to get it back to her historical average fleet age. So, that's something that will be considered in our fleet plan.
Speaker #5: Also , we fully expect continued growth in national accounts and specialty solutions next year . We're planning our fleet by mix and geography to support that momentum .
Speaker #5: At the same time , demand visibility for local projects remains highly compressed , which reinforces the need for agility in both how we manage our existing fleet and the pace of planning for 2026 .
Speaker #5: The scale we've gained bolsters our ability to respond to near-term trends and local markets , while also leveraging efficiencies to prepare for the start of a cyclical recovery .
Speaker #5: But it's important to remember that a pickup in local demand typically lags interest rate reductions . Developers still need time to secure financing , and contractors have to obtain permits and mobilize labor for planned projects .
Speaker #5: So we're being thoughtful and disciplined in our planning , balancing short term responsiveness with long term readiness . Turning to slide 12 . I'll continue to state the obvious .
Speaker #5: Diversification is an important strategy for fostering sustainable growth and navigating economic cycles . As Herc has diversified into new end markets , geographies and products and services over the last nine years , we have reduced our reliance on a single industry or customer .
Speaker #5: We become more resilient to downturns and more adaptable to emerging opportunities, like the mega project developments, technology advancements that support customer productivity, and the secular shift from ownership to rental, especially in the specialty category.
Speaker #5: We believe we are well positioned to manage dynamic markets, and the acquired scale further bolsters our capacity and therefore our opportunities.
Speaker #5: With that , I'll pass the call on to mark .
Speaker #6: Thanks , Aaron , and good morning , everyone . I'm starting on slide 14 with a summary of our key metrics for the third quarter , which includes Sinhalese results for July .
Speaker #6: As you may have seen , we completed the sale of Sinhalese on July 31st with proceeds used to pay down our ABL for the third quarter .
Speaker #6: On a GAAP basis , equipment rental revenue was up approximately 30% year over year , driven by the acquisition of Harre and strong contributions from megaprojects and specialty Solutions .
Speaker #6: Adjusted EBITDA increased 24% compared with last year's third quarter , benefiting from the higher equipment rental revenue as well as used equipment sales .
Speaker #6: Adjusted EBITDA margin was primarily impacted by a higher proportion of our used equipment sold through the lower margin auction channel , as we work to align the acquired fleet also affecting margin was lower fixed cost absorption .
Speaker #6: As a result of the ongoing moderation in certain local markets where Hadh was overweighted as well as acquisition related redundant costs preceding the full impact of cost synergies , which excludes used equipment sales , was up 22% during the third quarter .
Speaker #6: EBITDA margin was 46% , impacted by the lower margin acquired business . Margin improvement will come from equipment rental revenue growth and a shift over time to a higher margin product mix , as well as delivery of the full cost synergies and improved variable cost management from the increased scale .
Speaker #6: Our net income in the third quarter included $38 million of transaction costs , primarily related to the acquisition on an adjusted basis , net income was $74 million , shifting to capital management on slide 15 , you can see that we generated $342 million of free cash flow , net of transaction costs , in the nine months ended September 30th , 2025 , which was in line with our expectations , our current leverage ratio is 3.8 times .
Speaker #6: Our goal is to return to the top of our target range of 2 to 3 times by year end 2027 , as revenue and cost synergies drive higher , EBITDA flow through and less capital will be required to achieve the revenue synergies due to scale benefits on the utilization of existing fleet .
Speaker #6: The combined entity will be capitalized to maintain financial strength and flexibility. On slide 16, we're reiterating our 2025 guidance. When we set the guide a month into the integration, we modeled the back half of the year using the second quarter trends.
Speaker #6: We were seeing for each of the legacy companies . Of course , in any large scale acquisition , integrating the acquired operations and acclimating new team members as a phase in ongoing effort .
Speaker #6: We're starting to get a better read on the pacing of training , upskilling and re-engaging the acquired team , and we're making good progress on backfilling for the H and E sales force .
Speaker #6: Attrition occurred with strong patterns in place for recruiting candidates and onboarding and training new hires. Despite a lot of moving pieces with the integration overall, the guidance still feels about right.
Speaker #6: Based on current visibility . Two points I'd like to call out for the fourth quarter . First , unless something big happens in the next two weeks will likely have a tougher comp from a US weather standpoint .
Speaker #6: With last year benefiting from about 2 to 3 points of hurricane related pro forma revenue upside for the combined company . Second , when it comes to fourth quarter adjusted EBITDA , you should expect that we'll continue to utilize the auction channel more than hurt typically would , as we're still rightsizing the acquired fleet with a focus on dispositions of off brand and aged general rental equipment .
Speaker #6: This shift in channel mix will continue to pressure proceeds and therefore the use sales margin with the completed systems integration now providing a uniform , granular view of the entire company , we're putting action plans in place to address any underperforming areas or foundational inefficiencies .
Speaker #6: All of that will better position us as we plan for 2026 . Longer term , based on all the opportunity we see , we remain confident in the strategic value of this combination and our ability to achieve both the full revenue and cost synergies over the next three years .
Speaker #6: With that , operator , we'll take our first question .
Speaker #2: We will now begin the question and answer session . If you would like to ask a question , simply press star , followed by the number one on your telephone keypad and your first question comes from the line of MiG Dobre with Baird .
Speaker #2: Please go ahead .
Speaker #7: Thanks for taking the question . Good morning everyone . I guess my my first question goes to this comment on the right sizing of the fleet .
Speaker #7: And I'm kind of curious where you are in this process . Do you expect to be largely done with this in the fourth quarter , or is this kind of stretching into 2026 , and is there any way to maybe get us to better understand the the magnitude of of the work that needs to be done here , either in terms of the , you know , amount of OEC that needs to be disposed or or any other way that you want to frame it .
Speaker #5: Yeah . MiG , this is Aaron . I'll take that question . A lot of the heavy lifting was done in Q3 . We still have more work to do as we go through Q4 .
Speaker #5: As long as the 2026 kind of landscape , economic demand landscape is good , we'll be essentially kind of closing that part of it out that the two three higher disposals in Q3 was really related to just some rebalancing of the fleet .
Speaker #5: On the E side . They didn't do their normal cadence of disposals that they historically would have done in Q1 and Q2 . So we had to catch up on that .
Speaker #5: And then just some of the brand mix, you know, the operations are more efficient when you've got a standardized kind of manufacture-type fleet.
Speaker #5: So that's what some of the shaping was done . And , you know , we we feel good . What we got done .
Speaker #5: But as we mentioned , you know , a little more auction activity than we typically would do . And as we get into 26 , we'll get back to our normal cadence of getting the higher retail wholesale channel MiG .
Speaker #6: This is this is Mark . Maybe just a couple of other points there . You know , I think when you think about , you know what Aaron said , going back to Q2 and the comments we made then we thought that there was probably call it 250 , $300 million of activity that needed to happen in the back half of the year to sort of rightsize or better rightsize that fleet for the territories .
Speaker #6: It was going in . And I would say , you know , as we sit here through Q3 , probably half of that was completed , maybe a little bit more than that in the third quarter .
Speaker #6: And so , you know , the expectation would be better right sizing the fleet as we get through fourth quarter such that next year we can lean on aging the fleet and disposing of less gear .
Speaker #6: .
Speaker #7: All right . That's helpful . Thank you . Then maybe a question on your overall mix . The national accounts account for , if I'm not mistaken , pretty much a record as far as my back as my model goes .
Speaker #7: So a lot more business done with national accounts , I guess that would be consistent with your comment on mega being an area of growth , as you sort of think about 2026 , I do wonder if if this business mega-projects , National Accounts is to some extent dilutive to margins , if this is something that we need to think about as we as we think about the margin framework for next year .
Speaker #7: And I'm not asking for guidance . I'm just asking for some color as to as to how this portion of the business is really impacting you .
Speaker #4: Yeah , Meg , Larry , I'll take that . Look , we're we're expecting obviously , for the same type of activity to continue into 26 because as you know , until interest rates , you know , have a substantial reduction , which maybe we'll see tomorrow another 25 basis points , who knows .
Speaker #4: It usually takes 6 to 9 to as long as 12 months for that to trickle down into the local market to make that , you know , a more attractive business opportunity .
Speaker #4: And certainly spur the activity for us in the local market , which remains somewhat muted overall , though , we don't find that there's any significant margin dilution .
Speaker #4: Because remember, when we put equipment out at a national account or a mega project, you have minimal movement of that project.
Speaker #4: You're not having , you know , excessive delivery there . And and we also , you know , have a larger volume of equipment out there .
Speaker #4: And we tend to also get a lot more specialty product out on those projects that that are opportunistic for us as we go along .
Speaker #4: So we don't see much dilution at all . Relative to continuing in this trend .
Speaker #2: And your next question comes from the line of Tammy Zaccaria with J.P. Morgan . Tammy , please go ahead .
Speaker #8: Hi . Good morning . Thank you so much . My first question is on the comment you made about combining some of the gen rent locations .
Speaker #8: I think you said you're going to have 50 additional specialty . Is it the right way to think about it that about 100 of the general rental locations would close and those would sort of merge and become 50 specialty ?
Speaker #8: Or how should I think about the interchange between the two ?
Speaker #5: No , not at all . Actually , our branch count increased dramatically as a result of the acquisition . The way we want you to think about it .
Speaker #5: Is there were I'll put it in two buckets . One , we have a strategy where we typically do a branch and branch , right .
Speaker #5: So that's how we kind of scale the business. We'll open a specialty business inside of a general rental branch and let it mature.
Speaker #5: And once it gets enough scale , then we'll pop it off and have its own standalone location . That's really what's the fuel with the 50 new locations , as we go through , you know , next year's period , there were just a handful of locations that HD where they're like one mile away from our branch and we could consolidate those .
Speaker #5: And in those cases , we're turning those into a specialty branch right away sooner than we typically would . But we're not closing branches from that would be dilutive to what our strategy is .
Speaker #5: So we like the scale and it gives us a bigger footprint , which allows us to solve the market needs better .
Speaker #8: Understood . That's super helpful . And my second question now that you're the two businesses are on the same platform , it gives you more visibility into the combined business .
With the training, with the education, with the, uh, introduction to our technology platform, you know, that's an enabler for these salespeople to earn more money, and it's also a retention device. So we're, uh, we're excited about that being behind us for the most part. And you want to, yeah, we're seeing on the revenue synergy side. We're seeing, you know, it's early innings; we're just getting started with it. You know, we're introducing some of the specialty products to...
Customers that were on the H needs side Regional type customers, um, and we're getting some good traction, right? So it's, uh, some of the products we offer weren't offered at H&A and the customers were able to kind of move their share of wallet our Direction. So, it's, we're we're, um, we're happy with the progress is, but we got a lot more work to do.
Your next question comes from the line of Canet Newman, but keep on capital markets. Cannot, please, go ahead.
Hey, good morning, guys.
Morning.
Morning morning.
Uh maybe from my first question. Um mark it it seems like gross margins in the quarter came in a bit lower than I would have expected, but you did Leverage sgna, uh, a little bit stronger than my model. Is there any way you could help us just to mention how to think about gross margin? Sequentially, third quarter to fourth quarter, just giving all the moving pieces, maybe off a little bit of help on how we think about sgna dollars going forward.
Able proximity into the fourth quarter, recognizing that, um, you know, there's probably a little less coming through the funnel in the fourth quarter shoulder period. So I don't think that there'll be a ton of movement, but I think generally speaking, you're probably a little less efficient in the fourth quarter just from, um, you know, an overall revenue sort of downtick as you get into the November and December time frame.
Okay, no, that's very helpful.
um,
You know, I'm sorry if I missed it but you know, did you disclose how much he's contributed to rental revenue and ibida on the quarter? I'm just trying to get a sense of what core dollar you was like the end of the quarter. Yeah.
You didn't hear that because I can't give it. Um, you know, we we wouldn't be doing our job can if I could still sort of pull apart and tell you the performance of hne and hurt. Um I can't um and therefore I won't. Um but I would tell you that sort of overall um the business on hold performed about the way that we thought it would inside a Q3.
Your next question comes from the line of our timer with meal. Use research Rob, please, go ahead. Yeah. Hi thanks. Good morning. Um, a couple questions. Uh Larry you touched on, if I didn't, if I didn't miss here, you touched on uh employee retention and you're kind of go on the positive direction now with, uh, re hiring rehiring and then uh,
Attrition is stopped uh, customer attrition. Can you talk about that on H&D? Kind of former accounts if we come through all the, the synergies, as you kind of, uh, thought in recent quarters and then I'll just bolt on my second 1 when you've had a chance to look at the business more closely. Now, how does rental rates Stack Up and what do you need to do? If it's below, what do you need to do and what time frame to kind of improve service levels or broaden out service levels and and improve that, thank you.
Yeah. Look, you know what? I, what I said and what I hope came through is that we've stabilized, uh, the the attrition that had happened prior to close and we feel that that is now at a normalized level with no further significant. Uh, you know, attrition that we're expecting. That would be any different from what we would experience, you know, with her, uh, on a normalized basis. Um, so, you know, I think we're, we're okay there. Um, but remember we have, we have backfilled a lot of those positions with um, folks that have been in our black
I can go to what we call our PSA program, Professional Sales Associate Program. So they're going into new territories, they're on a learning curve, picking up new responsibilities, and we'll have some training and education to do over the course, you know, with the balance of the year and into early next year. But, um, you know, it'll have to ramp up, you know, probably into Q2 when we see them become, you know, fully effective. Um, and, uh, you know, as you know, that usually takes over a 2 to 3 year period for a salesperson to sort of really understand their territories and really perform at the levels we'd like them to perform at. Uh, I'll pass the other side over to Aaron relative to, you know, your comments on pricing and where it was and what we're doing to get back to, um, you know, the overall HERC coverage. Yeah, over to you, Rob. So, um,
I'd say to Larry's Point the the attrition and all that stabilized, sq3 went through, we focused a lot on integration. We got the reorganization all done. And now we're back to kind of like Performance Management and and um, you know, developing our sales team with the go to market strategies, we already have, um, when HD came into the business, their pricing was lower than the her. So we're working on moving that through the needle upward with our tools and systems that we have, we talked about um some of our pricing tools that are proprietary to her. So, you know, they're learning the tools.
Moved on. So we've got all the data; we're moving forward with our CRM and our sales efforts to engage with those customers. Some of those engagements take, you know, three or four, maybe even five different cycles of connection. But, um, we know that we've got a great rental operation, and we're confident those customers will come back over time. We're happy where we are in the process right now.
Okay, thank you.
That concludes our question and answer session. I will now turn the call back over to Leslie hanser for closing remarks. Lastly,
Thank you for joining us on the call. Today we look forward to updating you on our progress, in the quarters to come. Of course if you have any further questions, please don't hesitate to reach out to us. Have a great day,
That concludes our question and answer session.
Uh, this concludes today's call. You may now disconnect.