H&E Equipment Services Inc (HEES) 2023 Q4 法說會逐字稿

Good morning, and welcome to H&E Equipment Services Fourth Quarter 2023 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Jeff Chastain, Vice President of Investor Relations. Please go ahead.

早上好，歡迎參加 H&E 設備服務 2023 年第四季財報電話會議。今天的通話正在錄音。現在，我想將電話轉給投資者關係副總裁 Jeff Chastain 先生。請繼續。

Good morning, and welcome to a review of our financial performance over the fourth quarter and full year of 2023. Your participation on today's call is appreciated, and we thank you for your interest in H & A. A press release was issued earlier today, providing a detailed review of our results and can be found along with all supporting statements and schedules on the HNE. website that's w. w. w. dot HE dash equipment.com.

早上好，歡迎回顧我們 2023 年第四季和全年的財務表現。感謝您參加今天的電話會議，我們感謝您對H & A 的興趣。今天早些時候發布了一份新聞稿，對我們的結果進行了詳細審查，並可在HNE 上找到所有支持聲明和時間表。網站是 w. w。 w。點 HE dash Equipment.com。

A slide presentation will accompany today's discussion and is also posted on our website under the Investor Relations tab in Events and Presentations.

幻燈片簡報將伴隨今天的討論，並發佈在我們網站的「活動和簡報」中「投資者關係」標籤下。

Joining me this morning are Brad Barber, Chief Executive Officer, John Engquist, President and Chief Operating Officer, and Leslie Magee, Chief Financial Officer and Corporate Secretary. Brad will begin this morning's review, but before I turn the call over to John, please proceed to Slide 3. As I remind you that today's call contains forward-looking statements within the meaning of the federal securities laws, statements about our beliefs and expectations and statements containing words such as may, could believe, expect, anticipate and similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. As a summary of these uncertainties is included in the Safe Harbor statement contained in the company's slide presentation for today's call and includes the risks described in the Risk Factors in the Company's annual report on Form 10 K and other periodic reports investors, potential investors and other listeners are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.

今天早上與我一起出席的有執行長 Brad Barber、總裁兼營運長 John Engquist 以及財務長兼公司秘書 Leslie Magee。Brad 將開始今天早上的回顧，但在我將電話轉給 John 之前，請繼續觀看幻燈片 3。我提醒您，今天的電話會議包含聯邦證券法含義內的前瞻性陳述，有關我們的信念和期望的陳述以及包含“可能”、“可能相信”、“期望”、“預期”等詞語的陳述和類似表達構成前瞻性陳述。前瞻性陳述涉及已知和未知的風險和不確定性，這可能導致實際結果與任何前瞻性陳述中包含的結果有重大差異。由於這些不確定性的摘要包含在公司今天電話會議的幻燈片演示中所包含的安全港聲明中，並且包括公司10 K 表格年度報告和其他定期報告中的風險因素中描述的風險，投資者、潛在投資者和其他投資者我們敦促聽眾在評估前瞻性陳述時仔細考慮這些因素，並告誡聽眾不要過度依賴此類前瞻性陳述。

The Company does not undertake to publicly update or revise any forward-looking statements after the date of this conference call. Also, we are referencing non-GAAP financial measures. During today's call, you will find the required supplemental disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation and supporting schedules to our press release and in the appendix to today's presentation materials. That completes our preliminary details.

本公司不承諾在本次電話會議日期後公開更新或修改任何前瞻性陳述。此外，我們也參考非公認會計準則財務指標。在今天的電話會議中，您將找到這些措施所需的補充揭露，包括最直接可比較的 GAAP 措施以及我們新聞稿和今天簡報資料附錄中的相關調節和支援時間表。我們的初步細節就完成了。

So I'll now turn the call over to Brad Barber, Chief Executive Officer of H&E Equipment Services.

現在我將把電話轉給 H&E 設備服務公司執行長 Brad Barber。

Thank you, Jeff. Good morning and welcome to our review of fourth quarter and full year 2023 financial results. We appreciate your participation on today's call.

謝謝你，傑夫。早上好，歡迎來到我們對 2023 年第四季和全年財務表現的回顧。我們感謝您參加今天的電話會議。

I proceed to Slide 4. We closed 2023 in strong fashion with results in the fourth quarter, supported by active construction market and sound industry fundamentals, which included further rental rate appreciation. We recognize outstanding execution in our Equipment Rental segment and achieve record margins on the sale of rental equipment. And at a strategic level, we demonstrate further progress towards fleet growth and branch expansion objectives resulting in record achievement in 2023. I'll provide more details on these important elements of our fourth quarter performance, beginning with a review of key financial metrics, followed by a review of rental operations and our strategic accomplishments for the quarter and the year.

我繼續看投影片 4。在活躍的建築市場和良好的行業基本面（包括租金進一步上漲）的支持下，我們以強勁的勢頭結束了 2023 年，並在第四季度取得了業績。我們認可設備租賃部門的出色執行力，並在租賃設備銷售方面實現了創紀錄的利潤率。在策略層面上，我們在機隊成長和分公司擴張目標方面取得了進一步進展，並在 2023 年取得了創紀錄的成就。我將提供有關我們第四季度業績的這些重要要素的更多詳細信息，首先回顧關鍵財務指標，然後回顧租賃業務以及我們本季度和當年的戰略成就。

Before I close, I'll review some industry developments that are expected to provide fundamental support in 2024, contributing to our optimistic outlook.

在結束之前，我將回顧一些產業發展，預計將為 2024 年提供基本面支持，有助於我們對前景的樂觀看法。

Slide 6, please. When compared to year ago quarter, total revenues in the fourth quarter of 2023 increased 9.3% with strong support from total equipment rental revenues and sales of rental equipment. Revenues from our equipment rental business segment improved 14.9% in the quarter with the increase due partly to further gains in rental rates, which demonstrates sequential quarterly improvement throughout the year and contributed it continued to build on average rental rate accretion of 9.3% achieved in 2022. Also, we recognized an 18.3% year-over-year increase in our original fleet equipment costs, representing another important catalyst for growth for rental equipment revenues in the quarter and for the year, I have more to say on that quarterly rate improvement in our fleet growth in the mobile revenues from the sale of rental equipment increased 34.3% in the quarter as we continue to execute an effective fleet management strategy while capitalizing on persistent strength of the market for used rental equipment our sale of rental equipment achieved a record margin of 66% in the quarter. Finally, adjusted EBITDA in the quarter was up 6.5% with margins of 48% year over year. Improved the quality measures were partially concealed by 15.4 million pretax gain included in the year ago results. The gain for the sale of our commodity earthmoving distribution business, which was the final step in completing our exit from distribution activities. Leslie will provide greater clarity on this matter during her review.

請幻燈片 6。與去年同期相比，在設備租賃總收入和租賃設備銷售的強勁支持下，2023 年第四季的總收入成長了 9.3%。本季我們的設備租賃業務部門的收入增長了 14.9%，部分原因是租金率進一步上漲，這表明全年季度環比改善，並在 2022 年平均租金率增長 9.3% 的基礎上繼續發展。此外，我們認識到我們的原始車隊設備成本同比增長了 18.3%，這是本季度和全年租賃設備收入增長的另一個重要催化劑，我對我們的季度費率改善有更多話要說。由於我們繼續執行有效的車隊管理策略，同時利用二手租賃設備市場的持續強勁勢頭，本季租賃設備銷售行動收入成長了34.3%，我們的租賃設備銷售利潤率創歷史新高本季為 66%。最後，本季調整後 EBITDA 成長 6.5%，利潤率年增 48%。去年業績中包含的 1540 萬稅前收益部分掩蓋了品質措施的改進。出售我們的商品土方分銷業務的收益，這是我們完成退出分銷活動的最後一步。萊斯利將在審查期間進一步澄清此事。

Slide 7, please. Turning now to our retail performance. Revenues in the quarter improved 14.5% compared to the year ago quarter, while gross margins increased 110 basis points to 54.2% over the same period of comparison. Our performance was supported by the favorable rental rate environment with consistent annual cumulative improvement continuing to serve as a mean meaningful component for growth rates in the quarter were 3.8% ahead of the fourth quarter in 2022 and 0.8% better on a sequential quarterly basis for the year. Rental rates posted a year over year average improvement of 5.6%, adding to the average improvement of 9.3% in 2022. Strong revenue support was also realized through growth and expansion efforts. As I mentioned earlier, we grew our rental fleet 18.3% or $432.6 million on a year-over-year basis. Also, we added a record number of new branch locations through the combination of our work for our program and a strategic acquisition. I'll expand my discussion of strategic accomplishments in among physical fleet utilization averaged 68.4% in the quarter with the 360 basis point decline, largely a function of further normalization of utilization in 2023 compared to the announced sustainable measured during 2022.

請幻燈片 7。現在轉向我們的零售業績。本季營收較去年同期成長 14.5%，毛利率較去年同期成長 110 個基點至 54.2%。我們的業績得到了有利的租金環境的支持，持續的年度累計改善繼續成為本季度增長率的平均有意義的組成部分，比 2022 年第四季度增長 3.8%，比上一季度環比增長 0.8%年。租金率年平均提高 5.6%，2022 年平均提高 9.3%。透過成長和擴張努力也實現了強勁的收入支持。正如我之前提到的，我們的租賃機隊年增了 18.3%，即 4.326 億美元。此外，透過我們的計劃工作和策略性收購的結合，我們增加了創紀錄數量的新分支機構。我將擴大對本季度物理機隊利用率平均為68.4% 的戰略成就的討論，下降了360 個基點，這主要是與2022 年期間宣布的可持續測量相比，2023 年利用率進一步正常化的結果。

Finally, dollar utilization in the fourth quarter was 40.3% compared to the 41.9% in the fourth quarter of 2020 to support from higher rental rates in the quarter was offset by the decline in physical utilization and a modest headwind from our record expansion efforts.

最後，第四季的美元利用率為40.3%，而2020 年第四季為41.9%，這是由於該季度較高的租金率所提供的支撐，被實際利用率的下降和我們創紀錄的擴張努力帶來的溫和阻力所抵銷。

I now want to provide a more in-depth review of our strategic achievements in 2023. For the third consecutive year, H&E realized significant growth in branch expansion against our targeted initiatives. These important strategic objectives support our broader plan of transition to pure play rural focus, which began in 2021 and has been completed. Our growth of rental fleet and the addition of new branches have contributed to greater scale and increased customer engagement for our company, advancing our competitive position in the industry.

現在我想對我們2023年的策略成就進行更深入的回顧。根據我們的目標舉措，H&E 連續第三年實現了分支機構擴張的顯著成長。這些重要的策略目標支持我們向純粹農村轉型的更廣泛計劃，該計劃於 2021 年開始並已完成。我們租賃車隊的成長和新分支機構的增加有助於擴大我們公司的規模並提高客戶參與度，從而提高我們在行業中的競爭地位。

Slide 8, please. We invested $737 million in our rental fleet during the year, exceeding the upper end of our revised range of 650 million to $700 million. The record investment, which included 141 million in gross expenditures in the fourth quarter resulted in a fleet at original equipment cost or OEC of a record 2.8 billion at year end, exceeding the previous year's record OEC. by 18.3%. Following our investment in 2023, we have grown our fleet, an estimated 58% over the trailing 36 months. During this time, we've worked to achieve an optimal fleet mix that complements our geographic and customer expansion while maintaining one of the industry's youngest rental fleets at the close of 2023, our average fleet age was 39.7 months compared to an industry average of 49 months and 43.6 months at the conclusion of 2022. Also, our pace of branch expansion in 2023 was impressive. Our accelerated branch expansion program was responsible for a record 14 branch additions in the year, including three new locations in the fourth quarter. Branch additions establish greater density throughout our geographic footprint with increased emphasis on the Gulf Coast, Mid-Atlantic, Southeast and Midwest regions. As a result, we've increased our exposure to a growing number of construction projects. In addition to our branch expansion program, we accomplished further growth and improve positioning through the acquisition of an attractive and well-managed business with operations in core metropolitan statistical areas of the US one transaction, which closed in the fourth quarter added three locations in California, increasing the number of branches in 2023 to 17 or 14% increase across our branch network when compared to the branch count at the end of 2020 to an impressive and an impressive 41% since the beginning of 2021. Our focus on growth initiatives will be maintained in 2024. As indicated by our new growth objectives for the year, which I'll turn to now. We plan to moderate our 2024 gross fleet expenditures to a range of 450 million to $500 million. The reduction follows our accelerated capital spending over the second half of 2023 when we elected to capitalize on improvements in equipment availability. We believe our record fleet expenditures in 2023 and young fleet age advantageously positioned the Company to benefit from the ongoing growth in construction markets throughout 2020 full.

請幻燈片 8。年內，我們在租賃機隊上投資了 7.37 億美元，超出了我們修訂後的 6.5 億至 7 億美元範圍的上限。這項創紀錄的投資（包括第四季 1.41 億美元的總支出）導致年底機隊原始設備成本或 OEC 達到創紀錄的 28 億美元，超過了上一年創紀錄的 OEC。 18.3%。繼 2023 年投資後，我們的機隊規模在過去 36 個月內成長了 58%。在此期間，我們努力實現最佳機隊組合，以補充我們的地理和客戶擴張，同時在2023 年底保持行業最年輕的租賃機隊之一，我們的平均機隊年齡為39.7 個月，而行業平均年齡為49 個月，到 2022 年底為 43.6 個月。此外，我們在 2023 年的分公司擴張速度令人印象深刻。我們的加速分行擴張計畫導致年內新增 14 家分行，創下歷史紀錄，其中包括第四季度新增的 3 家分行。分支機構的增加在我們的整個地理範圍內建立了更大的密度，並更加重視墨西哥灣沿岸、大西洋中部、東南部和中西部地區。因此，我們增加了對越來越多建築項目的投資。除了我們的分支機構擴張計劃外，我們還通過收購一家具有吸引力且管理良好的企業（該企業在美國核心大都市統計區開展業務）實現了進一步的增長並提高了定位。其中一項交易於第四季完成，在加州增加了三個辦事處，到2023 年，我們的分行數量將增加到17 個，與2020 年底的分行數量相比，我們的分行網路數量將增加14% ，自2021 年初以來將增加41%，令人印象深刻。2024 年我們將持續專注於成長計畫。正如我們今年新的成長目標所表明的那樣，我現在將談到這個目標。我們計劃將 2024 年的機隊總支出控制在 4.5 億至 5 億美元之間。這項削減是在 2023 年下半年加速資本支出之後進行的，當時我們選擇利用設備可用性的改善。我們相信，我們 2023 年創紀錄的機隊支出和年輕的機隊年齡使公司能夠從 2020 年建築市場的持續成長中受益。

Regarding our branch network. Our strategic plans in 2024 will again include 12 to 15 new location openings from our branch expansion program. We've already begun our 2024 expansion with a new location in Texas added in January. In addition, branch growth could be enhanced through attractive acquisition opportunities that offer access to fiber construction markets in the U.S. as demonstrated by our latest acquisition, which closed last month, adding one location in each Phoenix and Denver. As of today, our branch network consists of 140 branches across 30 states, including our first quarter of 2024 additions from the Lone Star program and our latest acquisition.

關於我們的分行網路。我們 2024 年的策略計畫將再次包括透過分行擴張計畫開設 12 至 15 個新地點。我們已經開始 2024 年的擴張，並於 1 月在德克薩斯州增加了一個新地點。此外，透過有吸引力的收購機會可以增強分支機構的成長，這些收購機會提供了進入美國光纖建設市場的機會，正如我們上個月完成的最新收購所證明的那樣，在菲尼克斯和丹佛各增加了一個地點。截至今天，我們的分行網路由遍布 30 個州的 140 家分行組成，包括 2024 年第一季透過 Lone Star 計畫新增的分行和最新的收購。

Before I turn the call over to Leslie, I want to close with some thoughts on the outlook for 2024 and why we remain optimistic on industry fundamentals.

在將電話轉給 Leslie 之前，我想以一些關於 2024 年前景的想法以及我們對行業基本面保持樂觀的原因作為結束語。

Slide 9, please. We believe equipment rental industry fundamentals in 2024 so far, but supported by several appealing factors. These factors include a forecast by Dodge Construction network for 7% year over year. Improvement in construction starts also a continuation of healthy nonresidential and industrial pipe project backlog as conveyed by our customer base. These backlogs are expected to support our view of higher equipment demand as the year progresses. In addition, megaprojects are increasingly responsible for the expected progression of demand in 2024 and beyond. These active implant projects represent a significant catalyst of construction across our large expansive geography and underscores the importance of our branch expansion efforts H&E as actual exposure crosses 30 stages geographic footprint. With many of these projects residing in our Gulf Coast, Mid-Atlantic, Midwest and Southeast regions. These four regions collectively account for 71% of our branch network. As we had noted previously, mega projects typically require multiple years to complete and consume large quantities of equipment for extended periods of time.

請幻燈片 9。我們相信 2024 年迄今設備租賃業基本面良好，但有幾個有吸引力的因素支撐。這些因素包括道奇建築網絡預測年增 7%。正如我們的客戶群所傳達的那樣，施工的改善也開始了健康的非住宅和工業管道項目積壓的持續。隨著時間的推移，這些積壓預計將支持我們對設備需求增加的看法。此外，大型專案對 2024 年及以後的需求預期成長的影響越來越大。這些活躍的植入計畫代表了我們廣闊地理範圍內建設的重要催化劑，並強調了我們 H&E 分支機構擴張工作的重要性，因為實際暴露跨越了 30 個階段的地理足跡。其中許多項目位於墨西哥灣沿岸、大西洋中部、中西部和東南部地區。這四個地區合計占我們分公司網路的 71%。正如我們之前指出的，大型專案通常需要多年才能完成，並在較長時間內消耗大量設備。

Finally, we remain confident that growing rental penetration will be a steady and meaningful catalyst for increased industry growth as the attractiveness of equipment rental over ownership continues to evolve. Recently, the American Rental Association announced rental penetration improved to 56.4% in 2023, up from 53.5% in 2022. The measures now and we are 30 basis points below the previous pandemic.

最後，我們仍然相信，隨著設備租賃相對於所有權的吸引力不斷發展，不斷增長的租賃滲透率將成為行業增長的穩定且有意義的催化劑。最近，美國租賃協會宣布，租賃滲透率將從 2022 年的 53.5% 提高至 2023 年的 56.4%。現在的措施比之前的疫情低了 30 個基點。

Time to conclude, 2023 was another year characterized by a strong and steady achievement throughout the Company. We set new highs across many of our key financial metrics with the record results supported by strong pricing discipline. Since the end of 2020, we have achieved cumulative pricing improvements of 15.8% including 5.6% in 2023. We believe our performance is best in class over the trailing 36 month period. We have successfully expanded our branch location count by an impressive 41%, including 17 locations added in 2023. With the start of 2024, we have demonstrated further expansion, including an acquisition that adds two locations in large and growing markets. And our first warm start of the year, a new location in Texas that represents the 26 H&E branch in the state. We have reaffirmed our commitment 2020 for further branch expansion with a targeted 12 to 15 new locations during the year. Also over the last 36 months, we've effectively demonstrated our operational capabilities as evidenced by our nearly 60% growth of our rental fleet OUC., while at the same time achieving steady growth in our margins and profitability. These accomplishments demonstrate our commitment to robust financial performance, disciplined growth and operational excellence while leading to a stronger competitive base.

總而言之，2023 年是整個公司強勁而穩定成就的另一年。我們在許多關鍵財務指標上創下了新高，並在嚴格的定價紀律的支持下創下了創紀錄的業績。自 2020 年底以來，我們的定價累計提高了 15.8%，其中 2023 年實現了 5.6%。我們相信，在過去 36 個月內，我們的表現是同類中最好的。我們已成功將分行數量增加了 41%，其中包括 2023 年新增的 17 個分行。2024 年初，我們展示了進一步的擴張，包括在大型且不斷增長的市場中增加兩個地點的收購。我們今年的第一個溫暖的開始是在德克薩斯州設立一個新地點，代表該州的 26 個 H&E 分支機構。我們重申了 2020 年進一步擴張分行的承諾，目標是年內開設 12 至 15 個新分行。同樣在過去 36 個月中，我們有效地展示了我們的營運能力，租賃機隊 OUC 成長近 60% 就證明了這一點，同時我們的利潤率和獲利能力也實現了穩定成長。這些成就顯示我們致力於實現穩健的財務表現、嚴格的成長和卓越的運營，同時打造更強大的競爭基礎。

Slide 10, please. I'll now turn the call over to Leslie, who will provide a review of our fourth quarter financial performance.

請投影片 10。我現在將把電話轉給萊斯利，他將對我們第四季度的財務業績進行審查。

And lastly, thank you, Brad, and good morning and welcome, everyone. Before I begin my review, I wanted to remind you that results for the fourth quarter of 2022 included a $15.4 million pretax gain resulting from the sale of our Surmont two earthmoving distribution business. Since the transaction was consistent with our strategy to completely exit distribution activities.

最後，謝謝你，布拉德，早安，歡迎大家。在開始評論之前，我想提醒您，2022 年第四季的業績包括因出售我們的 Surmont 兩台土方分銷業務而產生的 1540 萬美元稅前收益。由於該交易符合我們完全退出分銷活動的策略。

Results for the fourth quarter of 2022 are presented with no adjustment for the gain on sale model. Occasional references to the prior year gain is intended to facilitate a more accurate basis when making a year-over-year comparison of financial performance.

2022 年第四季的業績未對銷售收益模型進行調整。偶爾提及上一年的收益是為了在財務表現逐年比較時提供更準確的基礎。

Let's continue beginning with slide 11, an overview of fourth quarter revenues gross profit and gross margin.

讓我們繼續從投影片 11 開始，概述第四季的營收、毛利和毛利率。

Slide 11, please. Total revenues in the fourth quarter were $385.8 million, an improvement of $32.7 million or 9.3% compared to the fourth quarter of 2022. The improvement was due largely to higher revenues from rentals and sales of rental equipment revenues from rentals increased 14.5% to $280.6 million compared to $245 million in the year ago quarter. We experienced another quarter of impressive fleet growth and renewal rate appreciation with these two factors contributing to the record outcome.

請投影片 11。第四季總營收為 3.858 億美元，比 2022 年第四季增加 3,270 萬美元，增幅為 9.3%。這項改善主要是由於租賃和銷售收入增加，租賃設備租賃收入成長了 14.5%，達到 2.806 億美元，而去年同期為 2.45 億美元。我們又經歷了一個季度令人印象深刻的機隊成長和續訂率上升，這兩個因素促成了創紀錄的成果。

As Brad reported, our rental fleet as measured by OEC., concluded the quarter at approximately $2.8 billion or 18.3% ahead of a year ago. Measure rental rates display further improvement in the quarter, up 3.8% compared to the fourth quarter of 2022 and 0.8% sequentially. For the year, our average rental rate improvement was 5.6%. Sales of rental equipment in the fourth quarter reached 40.6 million, up 34.3% from the year ago quarter. The increase was indicative of the continued strength of the used equipment market, combined with the success of our fleet management strategy, new equipment sales were $9.8 million, declining 54.5% in the quarter compared to $21.5 million in the fourth quarter of 2020 to the year-over-year comparison continued to demonstrate the absence of the Kmart to earthmoving distribution business, which was sold in December 2022. Gross profit totaled 186.3 million in the fourth quarter, up $27 million or 16.9% compared to the year ago quarter. Gross margins in the quarter improved 320 basis points to 48.3% compared to the prior year quarter, with the improvement attributable to favorable revenue mix and higher margins on rental and sales of rental equipment. Total equipment rental margins were 48.2% in the fourth quarter, up from 47.9% in the year ago quarter with rental margins improving to 54.2% compared to 53.1% over the same period of comparison. Margins on sales of rental equipment reached a record 66% compared to 51.2% in the year ago quarter. And while Margins on new equipment sales were 15.3% compared to 13.6% and year end quarter.

正如 Brad 所報導的那樣，根據 OEC 的衡量，我們的租賃機隊本季營收約為 28 億美元，比去年同期成長 18.3%。衡量租金率的指標顯示本季進一步改善，與 2022 年第四季相比上漲 3.8%，比上一季上漲 0.8%。今年，我們的平均租金率提高了 5.6%。第四季租賃設備銷量達4,060萬台，較去年同期成長34.3%。這一成長顯示二手設備市場的持續強勁，加上我們車隊管理策略的成功，新設備銷售額為 980 萬美元，與 2020 年第四季的 2,150 萬美元相比，本季下降了 54.5%同比比較繼續表明凱馬特沒有土方分銷業務，該業務於2022 年12 月出售。第四季毛利總計1.863億美元，較去年同期成長2,700萬美元，成長16.9%。與去年同期相比，本季的毛利率提高了 320 個基點，達到 48.3%，這一改善歸因於有利的收入組合以及租賃設備租賃和銷售利潤率的提高。第四季設備租賃總利潤率為 48.2%，高於去年同期的 47.9%，租金利潤率從去年同期的 53.1% 提高至 54.2%。租賃設備的銷售利潤率達到創紀錄的 66%，去年同期為 51.2%。新設備銷售利潤率為 15.3%，而年末季為 13.6%。

Slide 12. Fee income from operations in the fourth quarter totaled $81.2 million compared to $78.8 million in the fourth quarter of 2020 to a margin of 21.1% was achieved in the fourth quarter of 2023 compared to 22.3% in the fourth quarter of 2020 year ago. Results included the previously noted gain from the sale of the Komatsu earthmoving distribution business was $12.9 million recorded as a gain on the sale of property and equipment contributing 360 basis points to the prior year.

幻燈片 12。第四季的營運費用收入總計 8,120 萬美元，而 2020 年第四季為 7,880 萬美元，2023 年第四季的利潤率為 21.1%，而 2020 年第四季的利潤率為 22.3%。業績包括先前提及的出售小鬆土方分銷業務的收益為 1,290 萬美元，記錄為出售財產和設備的收益，比上一年貢獻了 360 個基點。

Margin. Proceed to Slide 13, please. Net income from continuing operations in the fourth quarter totaled $53.5 million compared to $51.2 million in the fourth quarter of 2022 results in the prior year includes a $15.4 million gain from the sales of Komatsu earthmoving business. Diluted net income per share in the fourth quarter was $1.47 per share compared to diluted net income per share of $1.41 in the year ago quarter. Certain discrete items in the fourth quarter reduced the effective income tax rate to 19.4% compared to 26.1% by the same quarter in 2022.

利潤。請繼續觀看幻燈片 13。第四季持續營運淨利潤總計 5,350 萬美元，而前一年 2022 年第四季業績為 5,120 萬美元，其中包括小鬆土方業務銷售帶來的 1,540 萬美元收益。第四季稀釋後每股淨利潤為 1.47 美元，去年同期稀釋後每股淨利為 1.41 美元。第四季的某些離散項目將有效所得稅率降低至 19.4%，而 2022 年同一季度為 26.1%。

Proceed to Slide 14, please. Adjusted EBITDA improved to $185.2 million in the fourth quarter compared to $173.9 million in the fourth quarter of 2022 which included $15.4 million resulting from the gain on the sale of the Komatsu earthmoving distribution business. Adjusted EBITDA margin in the fourth quarter was 48% compared to 49.2% in the fourth quarter of 2022, with a modest year-over-year decline due entirely to the gain on the sale in the prior year quarter. Which contributed 440 basis points to the prior year margin.

請繼續看投影片 14。第四季調整後 EBITDA 增至 1.852 億美元，而 2022 年第四季為 1.739 億美元，其中包括出售小鬆土方分銷業務帶來的收益 1,540 萬美元。第四季調整後 EBITDA 利潤率為 48%，而 2022 年第四季為 49.2%，年比小幅下降，這完全是由於去年同期的銷售收益所致。這為前一年的利潤率貢獻了 440 個基點。

Next on Slide 15, please. Sg&a expense in the fourth quarter increased $12.1 million for $106.6 million compared to 94.5 million in the year ago quarter. The higher expenses were largely due to employee salaries, wages, payroll taxes and other benefits as well as an increase in facilities, promotional and depreciation expenses.

接下來請看投影片 15。第四季的銷售、管理及行政費用增加了 1,210 萬美元，達到 1.066 億美元，而去年同期為 9,450 萬美元。費用增加主要是由於員工工資、工資、工資稅和其他福利以及設施、促銷和折舊費用的增加。

Sg&a expense in the quarter included $6.3 million of expansion and acquisition costs compared to the same quarter in 2022. Fourth quarter 2023 expenses were 27.6% of revenues compared to 26.8% in the year ago quarter Slide 16, please. Gross rental fleet capital expenditures in the fourth quarter, including noncash transfers from inventory, totaled 141.4 million. Net rental fleet capital expenditures were 101 million. Gross PP&E capital expenditures in the quarter were $28.5 million at 26.5 million. Net of sales of PP&E, net cash provided by operating activities totaled $129 million in the fourth quarter compared to $102 million in the year-ago quarter and free cash flow used in the fourth quarter was 27.7 million compared to free cash flow used of $128 million over the same period of comparison company's rental fleet remained among the youngest in the industry with an average age of 39.7 months compared to an industry average age of 49 months. The fourth quarter measure continued a trend of steady improvement in 2023 and compare to an average age of 41.1 months in the third quarter and 43.6 months on December 31st, 2022.

與 2022 年同季相比，本季的銷售、管理和行政費用包括 630 萬美元的擴張和收購成本。2023 年第四季費用佔營收的 27.6%，去年同期為 26.8%（投影片 16）。第四季租賃車隊資本支出總額（包括庫存非現金轉移）總計 1.414 億美元。淨租賃車隊資本支出為1.01億美元。本季 PP&E 資本支出總額為 2,850 萬美元，至 2,650 萬美元。扣除PP&E 銷售額後，第四季經營活動提供的淨現金總額為1.29 億美元，去年同期為1.02 億美元，第四季使用的自由現金流為2,770 萬美元，而去年同期使用的自由現金流為1.28 億美元同期，對比公司的租賃機隊仍然是行業中最年輕的，平均機齡為 39.7 個月，而行業平均機齡為 49 個月。第四季的指標延續了 2023 年穩定改善的趨勢，而第三季的平均年齡為 41.1 個月，2022 年 12 月 31 日為 43.6 個月。

Slide 17, please. Based on original equipment costs on December 31st, 2023, our rental fleets have totaled approximately 2.8 billion, an increase of 432.6 million or year-over-year growth of 18.3%. Average dollar utilization in Q4 was 40.3% compared to 41.9% in the prior year quarter. Normalized physical fleet utilization, record fleet growth and range expansion every year contributed to the modest decline in demand.

請投影片 17。以2023年12月31日原始設備成本計算，我們的租賃車隊總數約為28億輛，增加4.326億輛，年增18.3%。第四季的平均美元利用率為 40.3%，而去年同期為 41.9%。正常化的實際機隊利用率、創紀錄的機隊成長和每年的航程擴張導致需求小幅下降。

Slide 18, please we maintained strong balance sheet metrics throughout 2023, closing the year with net debt of approximately $1.4 billion. Our net leverage measure of 2.1 times remains at the low end of our target range. And our interest coverage ratio of 11.3 times continues to improve up from 10 times at the end of 2022 with no maturities before December 2028. On our $1.25 billion of senior unsecured notes, our capital structure remains robust.

請投影片 18，我們在 2023 年全年保持了強勁的資產負債表指標，年底淨債務約為 14 億美元。我們 2.1 倍的淨槓桿率仍處於目標範圍的低端。我們的利息覆蓋率從 2022 年底的 10 倍繼續提高至 11.3 倍，且在 2028 年 12 月之前沒有到期日。就我們 12.5 億美元的優先無擔保票據而言，我們的資本結構仍然穩健。

Moving on Slide 19, please. Finally, our liquidity position on December 31st, 2023 totaled $564.5 million, while excess availability under the ABL facility displayed steady improvements throughout 2023, closing the year at approximately 1.8 billion, up from $1.5 billion on December 31st, 2022. And M&A availability as defined by the ABL agreement remains 75 million. And note that excess availability is a measurement used to determine whether a springing fixed charge is applicable with excess availability of 1.8 billion and we continue to have no covenant concerns.

請繼續看投影片 19。最後，我們截至2023 年12 月31 日的流動性部位總計為5.645 億美元，而ABL 工具下的超額可用性在2023 年全年穩步改善，全年結束時約為18 億美元，高於2022 年12月31 日的15 億美元。ABL 協定定義的併購可用性仍為 7,500 萬。請注意，超額可用性是一種衡量標準，用於確定彈性固定費用是否適用於 18 億的超額可用性，而且我們仍然沒有契約問題。

And finally, we paid our regular quarterly dividend of $0.275 per share of common stock in the fourth quarter of 2023. And while dividends are subject to board approval is our intent to continue to pay the dividend.

最後，我們在 2023 年第四季支付了每股普通股 0.275 美元的定期季度股息。雖然股息須經董事會批准，但我們打算繼續支付股息。

Slide 20, please. Throughout 2023, HD. continued to redefine its improving financial potential while strengthening its competitive position in the equipment rental industry with persistent and sound industry fundamentals in place, we proceeded with a steady approach to growth and expansion resulting in another year of record financial achievement.

請投影片 20。整個2023年，高清。持續重新定義其不斷改善的財務潛力，同時加強其在設備租賃行業的競爭地位，憑藉持久而良好的行業基本面，我們繼續穩步增長和擴張，導致又一年創紀錄的財務成就。

Our improved financial execution in 2023 was seen throughout numerous performance measures with records established for total revenues of $1.5 billion, consolidated gross profit of approximately $685 million, gross profit margin of 46.6% and adjusted EBITDA of $688 million. Also, revenues from equipment rentals exceeded $1 billion for the first time in our 62 year history, representing 24% growth over the previous year. While gross margins is then remain at better than 30%.

我們在2023 年的財務執行情況得到了改善，這體現在多項績效指標中，總收入達到15 億美元，綜合毛利約為6.85 億美元，毛利率為46.6%，調整後EBITDA 為6.88 億美元。此外，設備租賃收入在我們 62 年的歷史上首次突破 10 億美元，比前一年增長 24%。而毛利率則維持在30%以上。

As Brad noted earlier, please raise a branch expansion initiatives played a key role in our financial achievements by reinforcing our competitive position across much of our geographic footprint with 18.3% growth in our fleet are original equipment costs and 14% year over year expansion across our branch network.

正如Brad 早些時候指出的那樣，請提出分支機構擴張計劃，透過加強我們在大部分地區的競爭地位，在我們的財務成就中發揮了關鍵作用，我們的機隊原始設備成本增長了18.3%，我們的業務年增了14%。分公司網路。

We conclude 2023 with the fleet size and mix and the branch density to better address and it did drive the construction activity, our exit from distribution activities and transition to a pure rental focus has been a winning strategy for H&E, resulting in higher and more stable revenues and impressive margin appreciation. As we transition to 2024, we will maintain our focus on greater branch depth and measured fleet growth. We possess the financial resources needed to pursue further growth objectives, including a conservative capital structure with no debt maturities before 2020 and improving debt metrics that remain at the low end of our target range and ample liquidity. Significant opportunities for growth are a reality of equipment rental industry, and we expect our more robust position in the industry to drive further financial achievement and expansion.

到2023 年，我們的機隊規模和組合以及分支機構密度將得到更好的解決，這確實推動了建築活動，我們退出分銷活動並過渡到純租賃業務，這一直是H&E 的製勝策略，從而帶來更高、更穩定的收入收入和令人印象深刻的利潤增值。當我們過渡到 2024 年時，我們將繼續關注更大的分支機構深度和可衡量的機隊成長。我們擁有實現進一步成長目標所需的財務資源，包括保守的資本結構（2020 年之前沒有債務到期）、改善仍處於目標範圍低端的債務指標以及充足的流動性。設備租賃行業的現實是巨大的成長機會，我們預計我們在該行業中更穩固的地位將推動進一步的財務成就和擴張。

We are now ready to begin the Q&A period. Operator, would you please provide instructions, sir? Our call participants and assemble the queue.

我們現在準備開始問答階段。接線員，請您指點一下，先生？我們召集參與者並排隊。

(Operator Instructions) Seth Weber, Wells Fargo.

（操作員說明）Seth Weber，富國銀行。

Hey, guys, good morning. Thanks for taking the questions on, Brad, I wanted to, I guess, dig in a little bit more on the CapEx guide for 2024. Just really trying to unpack that a little bit and trying to understand on how much of that is really a reflection of the pull forward that you just added more fleet in 2023 versus any kind of change that you're seeing and from an end-market demand perspective and whether you think this does lower CapEx level for 2024 on Kent support kind of more of a flattish fleet utilization level for 2024 and maybe a flattish dollar utilization level? Thanks.

嘿，夥計們，早安。感謝您提出問題，Brad，我想，我想進一步深入了解 2024 年的資本支出指南。只是真的試圖稍微解開這一點，並試圖了解其中有多少真正反映了您在 2023 年增加更多機隊所帶來的拉力，以及您所看到的來自終端市場的任何變化從需求角度來看，您是否認為這會降低肯特郡2024 年的資本支出水平，從而支持2024 年船隊利用率持平，甚至美元利用率持平？謝謝。

Yes, good morning. I think there are a few things to consider. You start off by asking you Was any of it a pull forward. We clearly brought in more capital in Q4, including late Q4 than we would traditionally up. Partly those were assets that were currently highly utilized throughout the majority of the fourth quarter. They're assets that are historically highly utilized throughout the year and it kind of takes a picture of our view of the market in front of us here in 2024. So I think it's fair to think we pulled a little CapEx forward in that respect. Otherwise, we didn't need all of that in late November and December, but we're looking forward in that respect so that that piece of it, secondarily, supply certainly catching up with demand and we're starting to see a more normalized environment in many regards. I think that across the whole question is where the utilization going to be for the year. You know, we're really disciplined on rates. We're going to remain disciplined on rates. We know this advent and evolution of mega-projects could weigh on rates a little bit as we continue to do more of that type of work and less of our spot rate work. All of those things come in through a combination where we had a, you know, a harsher than expected. January with weather. There were a few days we had about 25% to 30% of our locations closed in the last few weeks. That weather seemingly is past us. We've seen incremental utilization increases each week and almost every day of each week. So we're headed the right direction. I think our utilization is going to be slightly pressured during the first half of the year on a year over year, keeping in mind coming out of 22 and early 23, we were still up against really different. We're still up against some difficult comps in the back half of the year. We are managing and we expect to show some leverage as it was stated differently to show positive year over year.

是的，早安。我認為有幾件事需要考慮。你首先要問你是否有任何一個推動力。我們在第四季（包括第四季末）顯然引入了比傳統上更多的資本。其中部分是目前第四季大部分時間都高度利用的資產。從歷史上看，它們是全年利用率很高的資產，這在某種程度上反映了我們對 2024 年市場的看法。因此，我認為我們在這方面提前了一點資本支出是公平的。否則，我們在 11 月底和 12 月不需要所有這些，但我們在這方面有所期待，因此，其次，供應肯定會趕上需求，我們開始看到更加正常化的情況環境等諸多方面。我認為整個問題在於今年的利用率將在哪裡。你知道，我們在費率方面非常嚴格。我們將繼續遵守利率紀律。我們知道，隨著我們繼續進行更多此類工作並減少即期利率工作，大型專案的出現和發展可能會對利率產生一些影響。所有這些事情都是透過一個組合出現的，你知道，我們的情況比預期的更加嚴厲。一月與天氣有關。在過去幾週內，我們有幾天關閉了大約 25% 到 30% 的門市。那樣的天氣似乎已經過去了。我們發現利用率每週以及幾乎每天都在增加。所以我們正朝著正確的方向前進。我認為我們的使用率在今年上半年將比去年同期略有壓力，請記住，在 22 年後和 23 年初，我們仍然面臨著非常不同的情況。今年下半年我們仍然面臨一些困難的比賽。我們正在管理，我們預計會表現出一些槓桿作用，因為有不同的表達，以顯示出與去年同期相比積極的效果。

Physical utilization improvements in the back half of this year are so upset a lot to say we're moderating our capital spend. We can get what we need for manufacturers in a much more reasonable time line with good predictability, and we're managing for a normal environment that's going to allow for nice growth, particularly in rental revenues while we continue to increase returns.

今年下半年物理利用率的改善令人非常沮喪，以至於我們正在減少資本支出。我們可以在更合理的時間內以良好的可預測性獲得製造商所需的東西，並且我們正在管理一個正常的環境，這將允許良好的增長，特別是在租金收入方面，同時我們繼續增加回報。

Okay. And so do you think so rental rate then I think it was high threes here in the fourth quarter. Do you think it settles in I don't know, 2.5 range and two to three. Is that a good way to think about it for the year. Can you talk about does that and does that offset our inflation costs for you guys?

好的。那你是否也這麼認為，那麼我認為第四季的租金率是很高的。你認為它會穩定下來嗎？我不知道，2.5 範圍和 2 到 3。這是思考這一年的好方法嗎？您能談談這是否可以抵消我們的通貨膨脹成本嗎？

Yes, I'll let John speak more to the rail rates broadly, I can tell you we're expecting no, you know, inflation and pricing at 24 compared to 23. So that's one part of that conversation. I think it's difficult I mean, Q1 is always the most difficult quarter due to our seasonality to predict where we're going with rate. We feel very good about rate rates are stable. Rates are likely to improve at some level. To the extent we get pressure on rates, it's going to be around megaprojects. And again, if you look at rates in isolation without understanding the weighting of the mix and I think be a little misleading because I would not want you or anyone else on this call to believe that we expect declining returns as we participate more mega-projects quite the contrary. John, you want to add anything else?

是的，我會讓約翰更廣泛地談論鐵路費率，我可以告訴你，我們預計 24 日與 23 日相比，不會出現通貨膨脹和定價。這就是那次談話的一部分。我認為這很困難，我的意思是，由於我們的季節性因素，第一季始終是最困難的季度。我們對利率穩定感到非常滿意。利率可能會在某種程度上有所提高。就我們面臨的利率壓力而言，這將是圍繞大型項目進行的。再說一次，如果你在不了解組合權重的情況下孤立地看待利率，我認為有點誤導，因為我不希望你或本次電話會議上的任何其他人相信，隨著我們參與更多的大型項目，我們預期回報率會下降恰恰相反。約翰，你還想補充什麼嗎？

Yes. And just to add on what Brad said, going back to his opening comments, 15.8% rate improvement cumulative over the last three years. That's exceptionally strong. Looking forward, we don't expect to have rate increases at that same pace. We think rates are going to moderate. We do expect rates to be positive for the year. Now what does that mean? We expect incremental improvement. I don't want to put a number out there today. As Brett stated, these mega-projects are going to have an impact on our rental rates, but there is a trade off large volumes of equipment on rent for extended periods of time. So as we get further into the year. I think we'll have a better view of that, but we are expecting positive rates for the year.

是的。回到 Brad 的開場白，補充 Brad 所說的話，過去三年累計成長率提高了 15.8%。那是異常的強。展望未來，我們預期利率不會以同樣的速度上漲。我們認為利率將會放緩。我們確實預計今年利率將為正值。這是什麼意思？我們期望逐步改進。我今天不想透露具體數字。正如布雷特所說，這些大型專案將對我們的租金產生影響，但需要權衡大量設備的長期租金。隨著我們進入今年。我認為我們對此會有更好的看法，但我們預計今年的利率將為正值。

Okay. And then maybe just Leslie, just quick follow-up with the lower CapEx on fair to assume that free cash flow should be positive for 2024?

好的。然後也許只是 Leslie，只是快速跟進較低的資本支出，公平地假設 2024 年自由現金流應該為正？

Yes, good morning, Seth. As again, I think that is functioning now with the normalized environment, normalized CapEx spending that we've talked about and guided to, we expect to be free cash flow positive.

是的，早上好，賽斯。再說一遍，我認為現在在我們已經討論和指導的正常化環境、正常化資本支出支出下正在發揮作用，我們預計自由現金流將為正值。

Great. Okay. I'll pass it on. Thank you, guys.

偉大的。好的。我會把它傳遞下去。感謝你們。

Thank you.

謝謝。

Steven Fisher, UBS.

史蒂文費雪，瑞銀。

I'm sorry on Mr. Good morning and congrats on a nice finish to the year. I know you tend to keep your formal guidance fairly focused, but maybe just to follow up on some of the questions, just to trying to discern whether you think this is a year where EBITDA can grow maybe to start with your lower gross CapEx and your overall fleet expected to grow, stay steady or shrink?

我對早安先生感到抱歉，並祝賀您今年取得了良好的成績。我知道你傾向於保持你的正式指導相當集中，但也許只是為了跟進一些問題，只是為了試圖辨別你是否認為今年 EBITDA 可以增長，也許從你較低的總資本支出和你的收入開始。整體機隊預計會成長、維持穩定還是收縮？

I think you said rental revenues you expect to grow, but there is also some it sounds like maybe flat to lower utilization, but also slightly higher rates and challenges put all those pieces together to see if there's a picture on EBITDA direction that we can put together?

我想你說過你預計租金收入會成長，但也有一些聽起來可能持平或利用率較低，但利率也略高，挑戰將所有這些部分放在一起，看看是否有關於EBITDA 方向的圖片，我們可以將其放在一起？

Yes, Stephen, good morning. Our EBITDA is absolutely going to grow. Our rental revenue is absolutely going to grow and our fleet absolutely going to grow. You know, what's changing is and I like the way Seth asked the question. We pulled a little CapEx forward in Q4. We still have a healthy number in front of us, although it's not a record number, our rental fleet sitting at 39.7 months, we're going to sell a little bit less this year. We just have less need. We really caught up on our fleet rotation that will cycle during 2022 due to lack of manufacture availability. So you're going to see growth capital, we're going to open 12 to 15 locations. Our rates if they go anywhere other than solidly up, will only be tampered by high utilization, large volumes of equipment or megaprojects and then we're going to get the benefit. Of course, this year as we do in any year of our fleet growth and the 18.3%, some of that came in the back half of the year, we'll get just to characterize it a full year benefit. So yes, I expect our rental revenue and the associated EBITDA, the overall business to continue to grow will have a little bit less contribution from fleet sales. But otherwise, we're going to have a really nice year with continued growth and increased profitability.

是的，史蒂芬，早安。我們的 EBITDA 絕對會成長。我們的租賃收入絕對會成長，我們的機隊也絕對會成長。你知道，改變的是我喜歡塞斯問問題的方式。我們在第四季提前了一點資本支出。我們面前仍然有一個健康的數字，儘管這不是創紀錄的數字，我們的租賃車隊為 39.7 個月，今年我們的銷售量會稍微減少。我們只是需求減少了。由於缺乏製造可用性，我們確實趕上了將於 2022 年進行的機隊輪換。所以你會看到成長資本，我們將開設 12 到 15 個地點。如果我們的費率除了穩定上漲以外的任何地方，只會受到高利用率、大量設備或大型項目的影響，然後我們就會受益。當然，今年正如我們在機隊成長的任何一年中所做的那樣，18.3％（其中一些是在今年下半年出現的），我們將其描述為全年效益。所以，是的，我預計我們的租賃收入和相關的 EBITDA，整體業務的持續成長將來自車隊銷售的貢獻稍微減少。但除此之外，我們將度過非常美好的一年，持續成長並提高獲利能力。

That's very helpful. And then in terms of how you see the year playing out on the nonresidential construction markets, how are you thinking about what's happening in the first half of the year on a year-over-year basis versus the second half of the year year over year? I mean, you mentioned a number of times about perhaps increased focus on on mega projects or just curious about the cadence and timing. Are these things that you expect to really be a big factor in the first half? Or is that more kind of second half weighted?

這非常有幫助。然後，就您如何看待今年非住宅建築市場的情況而言，您如何看待今年上半年與下半年同比發生的情況？我的意思是，您多次提到可能會增加對大型專案的關注，或者只是對節奏和時機感到好奇。您預計這些事情真的會成為上半年的重要因素嗎？或者說下半場的權重比較大？

Well, there are factors currently with their growing factor. And that factor will only increase with every passing month and every passing quarter. So they will be a bigger impact in the back half of the year than they are this year.

嗯，目前有一些因素正在成長。而且這個因素只會隨著每個月和每季的過去而增加。因此，它們在下半年的影響將比今年更大。

From a seasonality standpoint, we always see again some some folks have been and I know you're not one of them. You know, the business very well, but some people have been focused on the you know, the unsustainable level of utilization we ran in 22 with almost 30 years in the business. We've never seen an environment like that we're in today or the normalized environment where we're going to continue to get incremental gains on physical utilization. And as I stated to the previous questioner we fully expect to show some leverage in our physical utilization on the back half of this year, while we're growing our rental fleet, improving our returns.

從季節性的角度來看，我們總是會再次看到一些人曾經去過，但我知道你不是其中之一。你知道，這項業務做得很好，但有些人一直關注我們在 22 年、近 30 年的業務中所運行的不可持續的利用率水平。我們從未見過像今天這樣的環境或正常化的環境，我們將繼續獲得物理利用率的增量效益。正如我對前一個提問者所說，我們完全希望在今年下半年在我們的實際利用率方面表現出一些槓桿作用，同時我們正在擴大我們的租賃車隊，提高我們的回報。

Perfect. Thank you very much.

完美的。非常感謝。

Thank you.

謝謝。

Steven Ramsey, Thompson Research Group.

史蒂文·拉姆齊，湯普森研究小組。

Hi, good morning. Wanted to continue that conversation on the demand outlook. First of all, on the local markets, do you expect basically non megaproject demand to grow? And then thinking about megaprojects, appreciate the cadence for this year. It looks like megaproject attributable revenue. Will it be higher this year than last. Could you maybe talk order of magnitude the year-over-year increase and that could come from mega-projects?

早安.希望繼續討論需求前景。首先，在當地市場上，您預期非大型專案的需求基本上會成長嗎？然後考慮大型項目，欣賞今年的節奏。它看起來像是大型專案的應佔收入。今年會比去年更高嗎？您能否談談同比增長的數量級，這可能來自大型專案？

The first part of the question is we do expect to see the non megaproject activity continue to grow all of the construction data for the 13 state geography. We cover points to that feedback from our customers points to and then our activity on a daily basis is substantiating literally as we speak. As far as the cadence of megaprojects, I know we're fairly vague and that's not intended to be that way. But in our last quarterly update, we talked about some of these projects we lead on while we're the fourth largest rental company in the U.S. or fifth largest, depending on what ranking you look at, we can be hypercompetitive on any of these particular projects that are within our geography with more than 60,000 machines we have in our rental fleet that being stated their towers we dominate or lead on the project. There's times we take a secondary position there. Sometimes we slot in a tertiary or third or fourth position, depending on the opportunity. It's difficult to paint the picture. What we know is there a large volume of equipment being sent out every day from us and our competitors. I feel like we're in an incredibly disciplined environment with our all viewing our opportunities going forward in mega-projects will be a bigger part each quarter going forward of our revenue. That's great stability. It will be great yield, as John talked about the rental rate trade-off, and we'll tried to give you more clarity as we go forward.

問題的第一部分是，我們確實期望看到非大型項目活動繼續增長 13 個州的所有建設數據。我們涵蓋了客戶的回饋意見，然後我們每天的活動就如我們所說的那樣得到了證實。就大型專案的節奏而言，我知道我們相當模糊，而且事實並非如此。但在我們上一季的更新中，我們討論了我們領導的一些項目，而我們是美國第四大或第五大租賃公司，這取決於您所看到的排名，我們可以在這些特定的任何一個方面具有超強的競爭力我們的租賃機隊中擁有 60,000 多台機器，這些項目位於我們的地理範圍內，據稱我們在該項目中占主導地位或領先。有時我們在那裡佔據次要地位。有時我們會根據機會排在第三、第三或第四。描繪這幅畫是很困難的。據我們所知，我們和我們的競爭對手每天都會發出大量設備。我覺得我們處於一個非常嚴格的環境中，我們所有人都認為我們在大型專案中的機會將在每個季度的收入中佔據更大的比例。這是非常好的穩定性。這將是巨大的收益，正如約翰談到的租金率權衡，我們將盡力為您提供更多的清晰度，因為我們前進。

Okay, great. Thank you. And then on the acquired companies, you've had a very disciplined history in doing M&A. Maybe talk to why now with these companies and the considerations and opportunities for pricing, general margin improvement and strengthening geographics positioning in these areas.

好的，太好了。謝謝。對於被收購的公司，你們在併購方面有著非常嚴格的歷史。也許可以談談為什麼現在與這些公司合作，以及定價、整體利潤率改善和加強這些領域的地理定位的考慮因素和機會。

Our team has done a nice job of finding the right types of opportunities that better align with us. We go back just a year year and a half ago I had stated publicly there was anything we were disappointed or very frustrated with was our inability to do more acquisitions. We've got the balance sheet. We've got the systems. We've got the teams to integrate them. We've got a great track record of buying these businesses, integrating them efficiently and for those businesses to produce as to our expectations. And it's been nice to see, you know, two or three acquisitions here in the last 18, 24 months. The good news is our funnel is full of more quality, small acquisitions. You can never perfectly handicap what your ratio closes will be on these deals. But I will tell you we're very pleased that more of these deals are Jack in the Box for us. They fit our profile. We can deploy more capital. They have good teams are in great markets and we look forward to more acquisitions like that going forward.

我們的團隊在尋找更適合我們的合適機會方面做得很好。就在一年半前，我曾公開表示，我們感到失望或非常沮喪的是我們無法進行更多收購。我們有資產負債表。我們已經有了系統。我們有團隊來整合它們。我們在收購這些企業、有效整合它們以及讓這些企業按照我們的期望進行生產方面擁有良好的記錄。很高興看到過去 18、24 個月內發生了兩到三起收購。好消息是我們的管道充滿了更多優質的小型收購。你永遠無法完全限制這些交易的收盤比率。但我要告訴你的是，我們很高興看到更多這樣的交易對我們來說是「盒子裡的傑克」。他們符合我們的形象。我們可以部署更多的資本。他們擁有優秀的團隊和廣大的市場，我們期待未來有更多類似的收購。

Okay, helpful. And then on specialty equipment. You've clearly done very well without that being a large part of your equipment portfolio. But I assume it's maybe still on the strategic radar. Could you update us on how you're thinking about specialty equipment as part of the H&E fleet over time through?

好的，有幫助。然後是特種設備。顯然，您已經做得非常好，而這並不是您設備組合的很大一部分。但我認為它可能仍在戰略雷達上。您能否向我們介紹一下您對特殊設備作為 H&E 車隊一部分的看法？

Larry, I will let John respond to that.

拉里，我會讓約翰對此做出回應。

Yes, Steven. So it obviously specialty is on our radar and is part of our plan. We're currently executing today the strategy to roll out of Pump & Power division. As we sit here today, we ended the year with 10 locations. And most of these are shared facilities with existing operations. But we have grown that fleet from essentially nothing to a meaningful piece of the business in a relatively short amount of time. As we looking forward, we're going to continue to add locations on an annual basis, and we think there's a really nice opportunity for a specialty in our future.

是的，史蒂文。因此，顯然，它的專業性已在我們的關注範圍內，並且是我們計劃的一部分。我們目前正在執行推出泵浦與動力部門的策略。當我們今天坐在這裡時，我們以 10 個地點結束了這一年。其中大部分是與現有業務共享的設施。但我們在相對較短的時間內將該機隊從幾乎沒有發展成為業務中有意義的一部分。展望未來，我們將繼續每年增加地點，我們認為未來對於專業來說這是一個非常好的機會。

Yes, Steven, let me let me add the 10 locations John referred to this is not embedded in the 12 to 15 guidance or in the 14 that we opened last year. He also stated that we're just taking this really practical approach. We're using shared facilities, separate teams, separate assets, hit the branch within a branch, if you will. So it's nice we're bringing on assets and high-quality people and deploying them is organic growth is not the fastest way to grow your business, but it's certainly safe and it's certainly profitable and it's no different with specialty than it is with the 14 warm starts or the 34 I think we've opened in the last couple of years.

是的，史蒂文，讓我補充約翰提到的 10 個地點，這並沒有嵌入到 12 到 15 個指南中，也沒有包含在我們去年開設的 14 個地點中。他也表示，我們只是採取這種非常實用的方法。我們正在使用共享設施、單獨的團隊、單獨的資產，如果您願意的話，可以在分支機構中進行分支機構。因此，很高興我們引進資產和高素質人才，並部署他們。有機成長並不是發展業務的最快方式，但它肯定是安全的，而且肯定是有利可圖的，而且專業領域與14 世紀沒有什麼不同。熱啟動或我認為我們在過去幾年中已經開業了 34 家。

Okay, that's helpful. Thank you, guys.

好的，這很有幫助。感謝你們。

Thank you.

謝謝。

[Jamie Wyland, Wyland Management.]

[傑米懷蘭，懷蘭管理公司。]

It's good to see that your demand is growing both for national accounts and local markets. Can you tell us what percentage of your business is national accounts? What was it in 2023? And what would you expect it to be in 2024?

很高興看到您對國民帳戶和本地市場的需求都在增長。您能告訴我們國民帳戶佔您業務的比例是多少嗎？2023年是什麼情況？您預計 2024 年會怎樣？

Thank you for the question, we do not disclose our ratios of a national account or or large account or single source. But the thing I'm very comfortable giving you that our large customer base continues to grow, and we're happy about that. Those larger customers generally characterize greater stability, larger volumes of equipment for longer periods of time, notwithstanding mega project. Right. So aside from mega-projects, that's been a focus of ours, but unfortunately, we just we do not disclose those ratios.

謝謝您的提問，我們不會透露國民帳戶或大帳戶或單一來源的比率。但我很樂意告訴您的是，我們龐大的客戶群持續成長，我們對此感到高興。這些較大的客戶通常具有更高的穩定性、更大的設備數量和更長的時間，儘管專案規模很大。正確的。因此，除了大型專案之外，這一直是我們的重點，但不幸的是，我們只是不披露這些比率。

Craig, given the free cash flow you expect to achieve in the current fiscal year, what are your thoughts on the stock buyback moving forward?

克雷格，考慮到您預計在本財年實現的自由現金流，您對未來的股票回購有何看法？

Yes, a stock buyback is always a potential. It's we've talked about capital allocation. We consistently meet both our Finance Committee and of course, our whole board and make these considerations. But what we're focused on is looking for acquisition opportunities and further growing H&E Equipment Services. So I wouldn't want to lead anyone to a likelihood of a stock buyback, which of 100% likely as we continue to pay our dividend, we continue to step out these 15 ish locations a year. Our we continue to see same-store growth as we deploy capital to the existing previously matured locations. And we are aggressively looking for acquisitions that fit the profile we need. Those are those are where you're going to more likely see us deploy capital never going to rule out of stock buyback. But right now we're in growth mode.

是的，股票回購總是有可能的。這是我們討論的資本配置。我們始終如一地與財務委員會以及整個董事會會面並做出這些考慮。但我們的重點是尋找收購機會並進一步發展 H&E 設備服務。因此，我不想讓任何人有可能進行股票回購，隨著我們繼續支付股息，這種可能性是 100%，我們每年都會繼續走出這 15 個左右的地點。隨著我們將資本部署到現有的先前成熟的地點，我們將繼續看到同店成長。我們正在積極尋找符合我們需求的收購。這些是你更有可能看到我們部署資本的地方，永遠不會排除股票回購的可能性。但現在我們正處於成長模式。

Excellent. And lastly, your fleet age is obviously the youngest in the industry, but what is your target level for what your fleet age would be to optimize the profitability of the business?

出色的。最後，您的機隊年齡顯然是業內最年輕的，但是您的機隊年齡的目標水平是多少，以優化業務的盈利能力？

We of course, we have levers within fleet management with product mix. What I can tell you is our our fleet age is well below an optimum age. If we were just managing a steady state of business, you've got your numerator and denominator. When you grow at the levels, we have been growing our rental fleet, it pushes your fleet age down. So we're happy about that. Just pent up opportunity for us to age it further if we need to or like to. But you were asking in a normal cycle and we've matured and scale where we would be it certainly could be much older than where we are today is lessening up. I pointed out, I think the industry average is close to 50 months and were under 40. So we're in a great position there.

當然，我們在車隊管理和產品組合方面擁有槓桿。我可以告訴您的是，我們的機隊年齡遠低於最佳年齡。如果我們只是管理穩定的業務狀態，那麼您就得到了分子和分母。當您的水平不斷增長時，我們一直在擴大租賃機隊，這會降低您的機隊年齡。所以我們對此感到高興。如果我們需要或願意的話，只是為我們保留了進一步老化的機會。但你問的是在一個正常的周期中，我們已經成熟了，我們的規模肯定會比我們今天的規模小得多。我指出，我認為行業平均時間接近 50 個月，低於 40 個月。所以我們在那裡處於有利地位。

Okay. As part of the decline in the number of new branches, you're opening up?

好的。由於新分行數量下降，你們要開業嗎？

The decline in fleet age or the with the client to get our MBA.

機隊年齡的下降或與客戶一起獲得MBA學位。

Fleet age.

艦隊年齡。

Look at that as part of its fleet rotations, fleet replacement and growth at same stores. And certainly we deployed primarily brand new product to these locations I mean, we we may move some existing assets. But when your utilization's running as high as ours does on an annual basis, we're deploying primarily new capital to these locations.

將其視為其車隊輪換、車隊更換和同一門市成長的一部分。當然，我們主要在這些地點部署了全新產品，我的意思是，我們可能會轉移一些現有資產。但是，當您的利用率每年與我們一樣高時，我們將主要向這些地點部署新資本。

Passionate nice job fellows.

熱情的好工作夥伴。

Thank you.

謝謝。

Seth Weber, Wells Fargo.

賽斯‧韋伯，富國銀行。

Hi. Thanks for taking a follow-up. Just on Brad, on used equipment pricing, used equipment margins were surprisingly high here in the fourth quarter on any guidance on how we should be thinking about Mark Hughes sale margins for 2024 and just what you're seeing in the market?

你好。感謝您的跟進。就 Brad 而言，關於二手設備定價，第四季度二手設備利潤率出乎意料地高，我們應該如何考慮 Mark Hughes 2024 年的銷售利潤率以及您在市場上看到的情況有何指導？

Yes, Seth, we're going to stick with our 50% plus growth margin expectation on the year. At some point in time, we expect to see moderation has been interesting as we've deployed technology to help us isolate the assets to sell the pricing to sell them in the markets to sell them through. We've done well at some level, exceeded our own initial expectations and we've recalibrated their expectations. I suspect that Q1 will probably be closer to 60%. But our view for the full year is you're 50% plus.

是的，Seth，我們將堅持今年 50% 以上的成長率預期。在某個時間點，我們預計會看到適度的變化，因為我們已經部署了技術來幫助我們隔離資產，以定價出售它們，然後在市場上出售它們。我們在某種程度上做得很好，超越了我們最初的期望，我們重新調整了他們的期望。我懷疑第一季可能會接近 60%。但我們對全年的預期是 50% 以上。

Got it. Okay. Thank you, guys. Appreciate it.

知道了。好的。感謝你們。欣賞它。

Thank you.

謝謝。

This concludes the question-and-answer session. I would like to turn the conference back over to Jeff Chastain for any closing remarks.

問答環節到此結束。我想將會議轉回傑夫·查斯坦（Jeff Chastain）發表閉幕詞。

Okay. Then with that, we'll conclude today's call. We do appreciate everyone taking the time to join us today and for your continued interest in H&E. We look forward to speaking with you again. And Betsy, thank you for your assistance on today's call. Good day, everyone.

好的。然後，我們就結束今天的電話會議。我們非常感謝大家今天抽出時間加入我們，並感謝你們對 H&E 的持續關注。我們期待再次與您交談。貝特西，感謝您在今天的電話會議上提供的幫助。今天是個好日子。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。