H&E Equipment Services Inc (HEES) 2024 Q1 法說會逐字稿

Good morning, and welcome to H&E Equipment Services First Quarter 2024 earnings conference call. Please note, 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 2024 年第一季財報電話會議。請注意，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 first quarter 2024 financial performance. Your participation on today's call is appreciated, and we thank you for your interest in H&E. A press release reviewing our results for the quarter was issued earlier today and can be found along with all supporting statements and schedules on the H&E website, w. w. w. dot HE. dash equipment.com.

早上好，歡迎回顧 2024 年第一季財務表現。感謝您參加今天的電話會議，我們感謝您對 H&E 的興趣。今天早些時候發布了一份新聞稿，回顧了我們本季度的業績，可以在 H&E 網站 w. 上找到所有支持性聲明和時間表。 w。 w。點HE。達什設備網。

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

幻燈片簡報將伴隨今天的討論，並發佈在我們網站的「投資者關係」標籤和簡報中的活動下。

As noted on Slide 2, I'm joined today by 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 him, 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. 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. 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 as supporting schedules to our press release and in the appendix to today's presentation materials. That completes our preliminary detail. So I'll now turn the call over to Brad Barber, Chief Executive Officer of H&E.

如投影片 2 所示，今天與我會面的還有執行長 Brad Barber、總裁兼營運長 John Engquist 以及財務長兼公司秘書 Leslie Magee。Brad 將開始今天早上的審核，但在我將電話轉給他之前，請繼續觀看投影片 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。關於我們的信念和期望的陳述以及包含「可能」、「能夠」、相信、期望、預期和類似表達等詞語的陳述構成前瞻性陳述。這可能導致實際結果與所包含的結果有重大差異在任何前瞻性聲明中。這些不確定性的摘要包含在今天電話會議的公司幻燈片演示中包含的安全港聲明中，並包括公司10 K 表格年度報告和其他定期報告投資者、潛在投資者和其他聽眾的風險因素中描述的風險敦促在評估前瞻性陳述時仔細考慮這些因素，並告誡不要過度依賴此類前瞻性陳述。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 措施和相關的調整表，作為我們新聞稿的支援時間表和今天簡報資料的附錄。這就完成了我們的初步細節。現在我將把電話轉給 H&E 執行長 Brad Barber。

Thank you, Joe. Good morning, and welcome to our review of first quarter 2024 financial results. We appreciate your participation on today's call. Please proceed to Slide 4. First quarter financial results including year-over-year double digit growth across our key financial metrics, with performance once again supported by meaningful expansion in our branch network rental fleet and improvement in rental rates. The degree of year-over-year financial improvement slowed from the pace of recent quarters due in part to a moderation in some construction projects. Additionally, harsh winter weather and branch expansion impeded the physical utilization in the first quarter despite the slower anticipated Star revenues from total equipment rentals completed the 12 consecutive quarter of year-over-year double digit growth. Sales of rental equipment remained elevated, and we adjusted our fleet management objectives in the face of changing market conditions and persistent healthy demand for equipment. A more detailed explanation will follow in our key financial metrics and the performance of our rental operations. Also, I will provide updated observations on the equipment rental industry in our view of prospects and opportunities for the remainder of the year.

謝謝你，喬。早安，歡迎來到我們 2024 年第一季財務表現的回顧。我們感謝您參加今天的電話會議。請繼續看投影片 4。第一季的財務表現包括我們的關鍵財務指標同比兩位數成長，我們的分公司網路租賃車隊的有意義擴張和租金率的提高再次為業績提供了支持。財務年比改善程度較最近幾季放緩，部分原因是一些建設項目放緩。此外，儘管 Star 設備租賃總收入預計已連續 12 個季度實現兩位數增長，但惡劣的冬季天氣和分支機構擴張阻礙了第一季的實際利用率。租賃設備的銷售量保持在較高水平，面對不斷變化的市場狀況和持續健康的設備需求，我們調整了車隊管理目標。我們的關鍵財務指標和租賃業務的績效將在後面進行更詳細的解釋。此外，我還將根據我們對今年剩餘時間的前景和機會的看法，提供對設備租賃行業的最新觀察。

Finally, and before I turn the call over to Lesley for a review of our financial performance. I will bring you up to date on our 2024 growth objectives.

最後，在我將電話轉給萊斯利以審查我們的財務表現之前。我將為您介紹我們 2024 年成長目標的最新資訊。

Slide 6, please. A quick review of our key financial metrics in the quarter revealed year over year achieve with most measures. For example, total revenues grew 15.2%, supported by strong growth in total equipment rental and sale of rental equipment. Revenues from total equipment rental improved 12.7%, led by steady expansion initiatives addressing both branch and rental fleet growth and further appreciation in rental rates. Sales of rental equipment decreased 49.8% on a year-over-year basis. Lower physical utilization in the quarter, which averaged 63.6%, prompted us to modify our first quarter fleet management strategy and leverage the ongoing strength in the market for used equipment. Consequently, we achieved near record margins on the equipment we sold, which had an average age of 72 months.

請幻燈片 6。對本季主要財務指標的快速回顧顯示，大多數指標均實現了同比增長。例如，在設備租賃總額和租賃設備銷售強勁成長的支持下，總收入成長了 15.2%。設備租賃總收入成長了 12.7%，這得益於針對分公司和租賃機隊成長以及租金率進一步升值的穩定擴張措施。租賃設備銷售額較去年同期下降49.8%。本季物理利用率較低，平均為 63.6%，促使我們修改第一季的車隊管理策略，並利用二手設備市場的持續優勢。因此，我們所售設備的利潤率接近創紀錄水平，這些設備的平均使用壽命為 72 個月。

Finally, adjusted EBITDA in the quarter of $161.7 million was 13.1% better than the year ago. Result with a margin of 43.6% on a trailing 12-month basis ending March 31st, 2024, adjusted EBITDA totaled $706.9 million, up 21.7% compared to the trailing 12 months ending March 31st, 2023. Over the same period, margins improved 170 basis points to 46.6% compared to 44.9% respectively. The improvement is indicative of our successful expansion efforts.

最後，本季調整後 EBITDA 為 1.617 億美元，比去年同期成長 13.1%。截至 2024 年 3 月 31 日的過去 12 個月利潤率為 43.6%，調整後 EBITDA 總計 7.069 億美元，較截至 2023 年 3 月 31 日的過去 12 個月增長 21.7%。同期，利潤率提高了 170 個基點，從 44.9% 升至 46.6%。這項改進顯示我們的擴張努力取得了成功。

Slide 7, please.

請幻燈片 7。

Moving to a discussion of our rental performance. Revenues in the quarter improved 12.8% compared to the year ago quarter, with stable gross margins of 48.5% compared to 48.4% in the first quarter of 2023. On a trailing 12-month basis ending March 31st, 2020 for rental revenues grew 19.8% compared to the trailing 12 months ending March 31st, 2023, which again demonstrates the positive contribution from our expansion efforts. Our growth initiatives were a meaningful contributor to the year-over-year improvement. We added 20 new branches over this time frame, including 15 warm start locations and five locations added through pursuit of acquisitions. Also, we grew our rental fleet 15.7% or 383 million, resulting in a fleet value as measured by original equipment cost of just over 2.8 billion on March 31st, 2024. Our focus on growth will continue in 2024, as I will explain in a moment.

接下來討論我們的租賃業績。本季營收較去年同期成長 12.8%，毛利率穩定為 48.5%，而 2023 年第一季為 48.4%。截至 2020 年 3 月 31 日的過去 12 個月，租金收入較截至 2023 年 3 月 31 日的過去 12 個月增長了 19.8%，這再次證明了我們的擴張努力所做出的積極貢獻。我們的成長舉措對年比改善做出了有意義的貢獻。在此期間，我們新增了 20 個分支機構，其中包括 15 個熱啟動地點和透過收購增加的 5 個地點。此外，我們的租賃機隊成長了 15.7%，即 3.83 億架，截至 2024 年 3 月 31 日，以原始設備成本衡量的機隊價值略高於 28 億美元。我們將在 2024 年繼續關注成長，我稍後將對此進行解釋。

Rental rates in the quarter improved 2.9% on a year-over-year basis, adding to the consistent rate appreciation seen since 2022. On a sequential basis, rates in the first quarter experienced a slight decline of 0.2%, although a slow rate of change is expected in 2024. We continue to benefit from the gains achieved in rental rates over the past 24 months have now produced better than a 17% increase in rate through the first quarter of 2024. Physical fleet utilization in the first quarter averaged 63.6% or year-over-year decline of 370 basis points. As previously mentioned, the decrease was attributed to lower than anticipated construction activity as well as project delays resulting from reoccurring unfavorable weather conditions with the work interruptions most pronounced across our Western operations.

本季租金率年增 2.9%，延續了 2022 年以來的持續租金上漲趨勢。環比來看，第一季利率小幅下降 0.2%，但預計 2024 年變動率將緩慢。我們持續受惠於過去 24 個月取得的租金收益，截至 2024 年第一季度，租金增幅超過 17%。第一季實體機隊利用率平均為 63.6%，較去年同期下降 370 個基點。如前所述，減少的原因是建築活動低於預期，以及不利天氣條件反覆出現導致專案延誤，其中我們西部業務的工作中斷最為明顯。

Finally, dollar utilization in the quarter was 37% compared to 38.6% in the first quarter of 2023, 160 basis point reduction was due primarily to lower physical utilization in the quarter, which included a modest headwind from the additional 15 local warm start locations and five acquired branches over the last 12 months.

最後，本季的美元利用率為37%，而2023 年第一季為38.6%，減少了160 個基點，主要是由於本季的實體利用率較低，其中包括額外15 個當地熱啟動地點帶來的溫和阻力以及過去 12 個月內有 5 家收購了分公司。

Next, I want to discuss some industry trends that we have observed through the first four months of the year and how these evolving developments are expected to weigh on our expectations for the remainder of the year.

接下來，我想討論我們在今年前四個月觀察到的一些行業趨勢，以及這些不斷變化的發展預計將如何影響我們對今年剩餘時間的預期。

Slide 8, please.

請幻燈片 8。

Our industry has enjoyed a phenomenal period of growth over the last two years, highlighted by rapid expansion in nonresidential and industrial construction projects. The increase in construction activity has been supplemented by numerous federal programs in support of reshoring efforts, green energy initiatives and infrastructure improvements, leading to a prolonged period of robust industry fundamentals. This highly attractive business environment is not ending, but appears in the interim to be assuming a normal footing or transition to a moderating growth levels compared to the exceptional rate of growth in construction spending and strong business dynamics experienced over the last 24 months. We believe the easing in the progression of construction spending is in part, the result of a higher for longer interest rate environment and generally tightening lending standards. This higher interest rate environment, together with the ongoing recovery in our industry, supply chain has led to greater supply of rental equipment. Even though non-residential and industrial project backlogs remain healthy, the rate of new project starts has slowed in early 2024. We note several factors that are expected to be instrumental in maintaining or possibly improving upon an environment that at present is increasingly defined as one possessing moderate growth prospects and steady industry fundamentals. These factors include continued escalation of mega-projects and include the construction of data centers, semiconductor fabrication facilities, LNG export terminals, and numerous green energy projects. As we've noted previously, mega-projects typically require multiple years to complete and consume large quantities of equipment for extended periods of time. Also, we have observed an increase in the number of infrastructure projects, including road and highway construction and repairs and construction of transportation facilities. We expect to experience growth in infrastructure projects into the future.

過去兩年，我們的行業經歷了驚人的增長期，其中非住宅和工業建設項目的快速擴張尤為突出。建築活動的增加得到了眾多支持回流工作、綠色能源計劃和基礎設施改善的聯邦計劃的補充，從而導致了長期強勁的行業基本面。這種極具吸引力的商業環境並未結束，但與過去 24 個月中建築支出的驚人增長率和強勁的商業動態相比，似乎暫時處於正常基礎或過渡到溫和的增長水平。我們認為，建築支出成長放緩的部分原因是長期較高的利率環境和普遍收緊的貸款標準。這種較高的利率環境，加上我們產業、供應鏈的持續復甦，導致租賃設備的供應增加。儘管非住宅和工業項目積壓保持健康，但新項目開工率在 2024 年初有所放緩。我們注意到一些因素預計將有助於維持或可能改善目前日益被定義為具有適度成長前景和穩定行業基本面的環境。這些因素包括大型專案的持續升級，包括資料中心、半導體製造設施、液化天然氣出口終端和眾多綠色能源專案的建設。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。此外，我們還發現基礎設施項目數量增加，包括道路和高速公路建設以及交通設施的維修和建設。我們預計未來基礎設施項目將會成長。

Finally, we note favorable trends in rental penetration and the steady growth in construction employment these critical factors reinforce nonresidential construction and industrial project activity and serve as the foundation in support of elevated long-term industry growth.

最後，我們注意到租金滲透率的有利趨勢和建築業就業的穩定成長，這些因素加強了非住宅建築和工業項目活動，並成為支持長期行業成長的基礎。

Before I hand the call over to Leslie, I want to close with an update on our growth initiatives, including investment in our rental fleet and further branch expansion.

在將電話轉交給萊斯利之前，我想以我們的成長計劃的最新情況作為結束語，包括對租賃車隊的投資和進一步的分支機構擴張。

On to Slide 9, please, considering my updated thoughts on the industry, we have reduced our 2024 guidance for gross fleet investments with the steadying of industry fundamentals justifying a more balanced approach to capital spending over the year growth capital investment, our fleet is now expected to range from 350 million to $400 million, down from our initial guidance for 2020 for a 450 million to $500 million. Our revised spending follows a more than 60% increase in our rental fleet OEC. over the last 36 months ending March 31st, 2024, in addition to maintaining one of the industry's youngest fleets with an average age of 39.9 months, our focus on fleet growth has resulted in a superior fleet mix to address the needs of a growing base of customers. Also with the availability of equipment for manufacturers returning to normal, we could quickly increase our spending range should industry demand accelerate. The revised spending range will adequately address the planned growth in 2024 across our branch network, which remains at 12 to 15 new locations as we continue to demonstrate strong execution from our accelerated branch expansion strategy. Also, additional branch growth in 2024 could be achieved through the acquisition of attractive rental operations as demonstrated by the acquisition of Precision rental, which closed in the first week of 2024, and the recently announced pending acquisition of four locations in the state of Montana following the expected close of the latest transaction in the second quarter of 2024, H. and E. will operate 145 branches across 30 states, including eight branch additions since the close of 2023.

請看投影片9，考慮到我對該行業的最新看法，隨著行業基本面的穩定，我們降低了2024 年對總機隊投資的指導，證明在今年增長的資本投資中採取更平衡的資本支出方法是合理的，我們的機隊現在是預計將在 3.5 億至 4 億美元之間，低於我們對 2020 年 4.5 億至 5 億美元的初步指引。我們的租賃機隊 OEC 增加了 60% 以上，因此我們調整了支出。在截至 2024 年 3 月 31 日的過去 36 位顧客。此外，隨著製造商的設備供應恢復正常，如果產業需求加速，我們可以迅速增加支出範圍。修訂後的支出範圍將充分滿足我們分行網絡 2024 年的計劃增長，隨著我們繼續展示加速分行擴張戰略的強大執行力，分行網絡仍保持在 12 至 15 個新地點。此外，透過收購具有吸引力的租賃業務，可以在2024 年實現額外的分行成長，如收購Precision Rental（於2024 年第一週完成）以及最近宣布的即將收購蒙大拿州四個地點所證明的那樣。

To conclude, we remain in a business environment with encouraging prospects. Our industry is expected to demonstrate further growth in 2024, but at a slower pace than we had become accustomed to over the last 24 months. According to Dodge Construction network construction starts are projected to improve 7% in 2024, while U.S. equipment rental revenue is expected to grow nearly 8% as reported by the American Rental Association as equipment rental industry goes through a period of transition in 2024. Our significant expansion over the last 36 months will undoubtedly prove beneficial. In addition to the previously mentioned growth in our fleet, we've expanded our branch network more than 40% over the same 36 month period on a continued operations basis, building a larger presence in key regions of the US, which possess ongoing growth opportunities.

總而言之，我們仍然處於前景令人鼓舞的商業環境中。我們的產業預計將在 2024 年實現進一步成長，但成長速度將低於我們過去 24 個月所習慣的速度。根據 Dodge Construction 的數據，預計 2024 年網路建設開工量將成長 7%，而美國租賃協會報告稱，隨著設備租賃行業在 2024 年經歷轉型期，美國設備租賃收入預計將增長近 8%。我們過去 36 個月的大幅擴張無疑是有益的。除了前面提到的機隊成長之外，我們還在持續營運的 36 個月期間內將分公司網路擴展了 40% 以上，在美國關鍵地區建立了更大的業務，這些地區擁有持續的成長機會。

Now more than ever, H&E is better positioned to capture developing business opportunities while remaining focused on future growth and improving financial performance.

現在，H&E 比以往任何時候都更有能力抓住發展中的商機，同時繼續專注於未來成長和改善財務表現。

Now on to slide 10, and I'll turn the call over to Leslie, who will provide a review of our first quarter financial performance. Leslie?

現在轉到投影片 10，我將把電話轉給 Leslie，他將對我們第一季的財務表現進行回顧。萊斯利？

Thank you, Brad. Good morning and welcome, everyone out again this morning, slide 11 and a of first quarter revenues. Gross profit and profit margins. Total revenues in the first quarter were $371.4 million, a 48.9 million improvement compared to the first quarter of 2023, higher revenues from rentals and sales of rental equipment were largely responsible for the 15.2% increase. Revenues from rentals increased 12.8% to 261.7 million compared to $232.1 million in the same quarter of 2023. Our expansion initiatives, once again proved significant and stimulating further revenue growth with the fleet at original equipment cost of over $2.8 billion.

謝謝你，布拉德。早安，歡迎大家，今天早上大家再次出來，幻燈片 11 和第一季收入。毛利和利潤率。第一季的總收入為 3.714 億美元，比 2023 年第一季增加了 4,890 萬美元，租賃設備租賃和銷售收入的增加是導致 15.2% 成長的主要原因。租賃收入成長 12.8%，達到 2.617 億美元，而 2023 年同一季度為 2.321 億美元。我們的擴張計劃再次被證明意義重大，並刺激了原始設備成本超過 28 億美元的機隊進一步收入成長。

At the close of the first quarter, we grew our rental fleet $383 million or 15.7% compared to our OEC on March 31st, 2023, while expanding our network of branches, 17% over the same period. Also, average rental rates were 2.9% ahead of rates in the first quarter of 2023. On a sequential basis, rates in the first quarter declined 0.2%. Sales of rental equipment totaled $48.1 million in the first quarter, up 49.8% on a year-over-year basis. As Brad explained earlier with utilization in the quarter failing to meet our expectations. We opportunistically sold equipment into a healthy used equipment market where margins remained elevated. Sales of new equipment equipment improved to $10.4 million in the first quarter or 33.2% ahead of the year ago results. The increase was due primarily to higher sales of material handling and aerial work platforms.

截至第一季末，與 2023 年 3 月 31 日的 OEC 相比，我們的租賃機隊成長了 3.83 億美元，即 15.7%，同時擴大了我們的分公司網絡，同期成長了 17%。此外，平均租金比 2023 年第一季高 2.9%。從環比來看，第一季利率下降了 0.2%。第一季租賃設備銷售額總計4,810萬美元，較去年同期成長49.8%。正如布拉德早些時候解釋的那樣，本季的利用率未能達到我們的預期。我們機會主義地將設備出售給一個健康的二手設備市場，該市場的利潤率仍然很高。第一季新設備銷售額增至 1,040 萬美元，比去年同期成長 33.2%。這一增長主要是由於物料搬運和高空作業平台的銷售增加。

Gross profit totaled $164.9 million in the quarter, up $23.5 million or 16.6% compared to the year ago quarter. Gross margins of 44.4% were up modestly compared to 43.8% in the first quarter of 2023 with the increase, largely the result of higher gross margins on the sale of rental equipment and a favorable revenue mix.

該季度毛利總計 1.649 億美元，比去年同期成長 2,350 萬美元，增幅 16.6%。毛利率為 44.4%，較 2023 年第一季的 43.8% 略有上升，主要原因是租賃設備銷售毛利率提高以及有利的收入組合。

Federal Equipment Rental margins finished the quarter at 43.3% compared to 43.6% in the year ago quarter, while rental margins were essentially unchanged at 48.5% compared to 48.4% over the same period of comparison.

聯邦設備租賃利潤率本季結束時為 43.3%，去年同期為 43.6%，而租賃利潤率基本保持不變，為 48.5%，而去年同期為 48.4%。

Finally, margins on sales of rental equipment remained at near record levels in the quarter at 62.9% compared to 58.6% in the year ago quarter, while margins on new equipment sales improved to 17% compared to 13.3% over the same period of comparison.

最後，本季租賃設備銷售利潤率維持在接近歷史最高水準的水平，為 62.9%，而去年同期為 58.6%，而新設備銷售利潤率則從去年同期的 13.3% 提高至 17%。

Slide 12 please.

請投影片 12。

Income from operations totaled $52 million in the first quarter compared to $46.7 million in the first quarter of 2023. The 11.4% increase resulted in a margin of 14% compared to 14.5% in the year ago quarter, with the lower margin due to increased SG&A expense, partially offset by higher gross margins on sales of rental equipment and favorable revenue mix.

第一季營運收入總計 5,200 萬美元，而 2023 年第一季營運收入為 4,670 萬美元。11.4% 的成長導致利潤率達到 14%，而去年同期為 14.5%，利潤率較低是由於 SG&A 費用增加，但部分被租賃設備銷售毛利率上升和有利的收入組合所抵消。

Proceed to Slide 13, please. Net income in the first quarter totaled EUR25.9 million or mostly steady compared to $25.7 million in the first quarter of 2023. Diluted net income per share in the first quarter was $0.71, unchanged from the year ago quarter.

請繼續看投影片 13。第一季淨利潤總計 2,590 萬歐元，與 2023 年第一季的 2,570 萬美元相比基本持平。第一季稀釋後每股淨利潤為 0.71 美元，與去年同期持平。

Our effective income tax rate in the first quarter was 26.5% compared to 26.1% for the same quarter in 2023.

我們第一季的有效所得稅率為 26.5%，而 2023 年同一季度為 26.1%。

Proceed to Slide 14. Place adjusted EBITDA in the first quarter improved 13.1% to $161.7 million compared to $143 million in the year ago quarter. Higher SG&A expense and lower gross margins on total equipment rental and on parts service and others led to a first quarter adjusted EBITDA margin of 43.6% or modestly below 44.4% reported in the year ago quarter.

繼續幻燈片 14。第一季調整後 EBITDA 成長 13.1%，達到 1.617 億美元，去年同期為 1.43 億美元。SG&A 費用增加以及總設備租賃、零件服務及其他毛利率下降導致第一季調整後 EBITDA 利潤率為 43.6%，略低於去年同期報告的 44.4%。

Next slide 15, please. Sg&a expense in the first quarter increased 18.9 million to $114.3 million compared to $95.3 million in the year ago quarter. The higher expenses were attributable to increased employee salaries, wages, payroll taxes, and other benefits. Also when considering our steady growth initiatives, higher expenses relating to facilities, depreciation and amortization and professional fees contributed to the increase in the quarter. First Quarter 2024 expenses were 30.8% of revenues compared to 29.6% in the year ago quarter when compared to the previous quarter and 2023 First Quarter 2020 for SG&A expense included 10 million of costs associated with our branch expansion and acquisition activities with 20 new locations added over the period.

請下一張投影片 15。第一季的銷售、管理及行政費用增加了 1,890 萬美元，達到 1.143 億美元，而去年同期為 9,530 萬美元。費用增加是由於員工薪資、薪資、薪資稅和其他福利的增加。此外，在考慮我們的穩定成長計畫時，與設施、折舊和攤提以及專業費用相關的費用增加也導致了本季的成長。與上一季及2023 年相比，2024 年第一季的費用佔營收的30.8%，而去年同期為29.6%。的1000 萬美元成本，新增了20 個分公司期間。

Slide 16, please. Gross rental fleet capital expenditures in the first quarter, including noncash transfers from inventory, totaled 74.4 million. Net rental fleet capital expenditures were $26.6 million. In addition, gross PP&E CapEx in the quarter was 39.1 million or 37.5 million. Net of sales of PP&E net cash provided by operating activities totaled 83.4 million in the first quarter compared to $43.2 million in the year ago quarter. Free cash flow used in the quarter was 58.9 million compared to free cash flow used in the year ago quarter of $13.2 million, excluding the acquisition and thus adjusted free cash flow in the first quarter of 2024 was 62.6 million.

請幻燈片 16。第一季租賃車隊資本支出總額（包括庫存非現金轉移）總計 7,440 萬美元。淨租賃車隊資本支出為 2,660 萬美元。此外，本季 PP&E 資本支出總額為 3,910 萬美元或 3,750 萬美元。第一季營業活動提供的 PP&E 銷售額淨額為 8,340 萬美元，去年同期為 4,320 萬美元。本季使用的自由現金流為 5,890 萬美元，而去年同期使用的自由現金流為 1,320 萬美元（不包括收購），因此 2024 年第一季調整後的自由現金流為 6,260 萬美元。

Moving to Slide 17, please. Based on original equipment cost, our average fleet as on March 31st, 2024 was just over $2.8 billion, representing growth of $383 million or 15.7% compared to the SEC on March 31st, 2023. We closed the first quarter with an average fleet age of 39.9 months compared to an industry average fleet age of 48.9 months. Average dollar utilization in the quarter was 37% compared to 38.6% in the year ago quarter. As normalized industry fundamentals including lower time utilization contributed to the decline in the quarter.

請轉到投影片 17。根據原始設備成本，截至 2024 年 3 月 31 日，我們的平均機隊成本略高於 28 億美元，與 SEC 2023 年 3 月 31 日相比增長了 3.83 億美元，即 15.7%。第一季結束時，我們的機隊平均機齡為 39.9 個月，而業界平均機隊機齡為 48.9 個月。本季的平均美元利用率為 37%，而去年同期為 38.6%。由於行業基本面正常化，包括時間利用率較低，導致了本季的下滑。

Slide 18, please. Our balance sheet metrics remained strong with a net leverage measure on March 31st, 2024 of 2.1 times, unchanged from the measure at December 31st, 2023 and the year ago quarter and 2023. The measure remains well within our target range of two to three times, and we have no maturities before December 2028 on our 1.25 billion of senior unsecured notes.

請幻燈片 18。我們的資產負債表指標仍然強勁，2024 年 3 月 31 日的淨槓桿率為 2.1 倍，與 2023 年 12 月 31 日、去年同期和 2023 年的指標持平。該指標仍遠在我們兩到三倍的目標範圍內，而且我們的 12.5 億優先無擔保票據在 2028 年 12 月之前沒有到期日。

Slide 19, please. Finally, a review of our liquidity profile indicates liquidity of $492.1 million on March 31st, 2024, while excess availability under the ABL facility closed the first quarter at approximately 1.7 billion compared to $1.8 billion on December 31st, 2023, and at $1.5 billion on March 31st, 2023, our minimum availability as defined by the ABL agreement, remains 75 million, with excess availability of $1.7 billion. We continue to have no covenant concerns.

請投影片 19。最後，對我們的流動性狀況的審查表明，2024 年3 月31 日的流動性為4.921 億美元，而第一季ABL 設施下的超額可用性約為17 億美元，而2023 年12 月31 日為18 億美元，3 月為15 億美元至 2023 年 31 日，ABL 協定定義的最低可用性仍為 7,500 萬，超額可用性為 17 億美元。我們仍然沒有聖約問題。

Finally, we paid our regular quarterly dividend of $0.275 per share of common stock in the first quarter of 2024. While dividends are subject to Board approval. It is our intent to continue to pay the dividend.

最後，我們在 2024 年第一季支付了每股普通股 0.275 美元的定期季度股息。而股息須經董事會批准。我們打算繼續支付股利。

Slide 20, please. In summary, our financial performance in the first quarter revealed healthy year-over-year improvement in several important financial metrics. Despite a more subdued level of business activity, we accomplished double digit growth in rental revenues, consolidated gross profit and adjusted EBITDA. Also our rental margins and margins on consolidated gross profit and adjusted EBITDA were stable in the quarter and remained at levels that were difficult to achieve less than three years ago, which was before our transition to a pure rental focus. This project progression to a pure rental business model has effectively laid the foundation for improved financial performance through the cycle, with enhanced prospects for higher revenue generation and better margin performance. As Brad explained earlier, and I'll reiterate encouraging industry prospects remain evident in 2024, and AT&T is better positioned to capture emerging opportunities as we leverage our more robust presence in the US over the past 36 months, we have grown our branch network more than 40%, including 17% over the last 12 months and further growth ambitions for 2024 remain in intact. We expect to imminently close our third acquisition in five months, increasing our branch network to 145 locations across 30 states while intensifying our exposure to plan and ongoing nonresidential and industrial project activity, our decision to further curtail gross fleet investment in 2024 is not expected to hinder our expansion objectives, but will enhance our ability to fine-tune utilization across our fleet while improving the prospects for meaningful free cash flow generation during the year.

請投影片 20。總而言之，我們第一季的財務表現顯示出幾個重要財務指標較去年同期健康改善。儘管業務活動水準更加低迷，我們的租金收入、綜合毛利和調整後 EBITDA 仍實現了兩位數成長。此外，本季我們的租金利潤率、綜合毛利潤率和調整後 EBITDA 保持穩定，並保持在不到三年前（也就是我們轉向純租賃之前）難以達到的水平。該專案向純租賃業務模式的發展有效地為整個週期內財務表現的改善奠定了基礎，並增強了更高收入和更好利潤表現的前景。正如Brad 之前所解釋的那樣，我將重申，令人鼓舞的行業前景在2024 年仍然顯而易見，隨著我們在過去36 個月裡利用我們在美國更強大的業務，AT&T 能夠更好地抓住新興機遇，我們的分公司網絡也得到了進一步發展。我們預計將在五個月內立即完成第三次收購，將我們的分支機構網絡增加到30 個州的145 個地點，同時加強我們對計劃以及正在進行的非住宅和工業項目活動的投資，我們在2024 年進一步削減船隊總投資的決定預計不會阻礙我們的擴張目標，但將增強我們微調整個機隊利用率的能力，同時改善年內產生有意義的自由現金流的前景。

Operator, we are now ready to begin the Q&A period, please provide instructions.

接線員，我們現在準備開始問答階段，請提供指示。

(Operator Instructions) SureWest Sabine from Banc of America Securities.

（操作員指示）來自美國銀行證券公司的 SureWest Sabine。

Hi, good morning.

早安.

Good morning, Trey.

早上好，特雷。

Thanks for all the color that you've provided. I guess, thinking about maybe what you're seeing in the last few weeks or April that that's changed maybe a bit more. You've mentioned starts have come down and the starts data has weakened. But just looking at the size of the CapEx pullback versus the size of the pullback in starts. Could you kind of give a bit more color on maybe what's changed a bit more on top of that in the last few weeks?

感謝您提供的所有顏色。我想，想想你在過去幾週或四月所看到的情況，情況可能會發生更多變化。您提到開工率下降，開工數據也減弱。但只要看看資本支出回呼的大小與啟動回呼的大小即可。您能否對過去幾週發生的更多變化提供更多說明？

Sure, absolutely. A couple of things. You know, as we sit here today, our utilization started, but we've just north of 67%. So we are our current utilization is running well ahead of our first quarter average positive. It's been incremental was a little slower to come, but it has certainly started to come on and we're pleased with that level and can expect that to continue to improve basically on a weekly basis going forward. So that's one update.

當然，絕對。有幾件事。您知道，當我們今天坐在這裡時，我們的利用率已經開始，但剛剛超過 67%。因此，我們目前的利用率遠高於第一季的平均值。它的增量來得有點慢，但它肯定已經開始出現，我們對這個水平感到滿意，並且可以預期未來基本上每週都會繼續改善。這是一次更新。

As far as CapEx, I think it's important to to context on our last quarterly call I spoke about Q4 and really last year late last year, kind of a pull forward effect on the volume of CapEx. Reviewing the percent of capital we deployed last year as compared to our ROEC., our starting point, we deployed growth capital north of 30% last year. The net effect with Selsun, I think just north of 25%. You know, when I compare that against our peer group, we have grown we have spent more than than the comparative group. And so, you know, when we flip over to your question today, the three 50 to 400, how does that compare to what we're going to spend this year compared to what we've seen in the industry and we think it's very similar. So if you would ask me, am I disappointed that we're taking Cap Ex down a little bit disappointed that the pace of improvement and growth is moderating, but we're going to have an outstanding year here. I think the CapEx reduction is prudent. As we've spoken before, our ability to leverage and run meaningfully higher utilization of what we're doing today and have that flow through really crank up for us is positive and so must prevail. Economists are utilizations improved quite a bit since that Q1 average, we expect it to continue to do so. Rates are flattish. As you saw. We expect them to continue to be somewhere flattish, maybe a bias for upside, but no brand improved with bearing in mind that we've improved rental rates more than 17% last two years that would carry with us. And our CapEx spend as a percent of our fleet at probably right in line with what you would see with most competitors.

就資本支出而言，我認為重要的是要結合我們上一次季度電話會議的背景，我談到了第四季度以及去年年底，這對資本支出量產生了某種拉動效應。與我們的起點 ROEC 相比，回顧我們去年部署的資本百分比，我們去年部署的成長資本超過 30%。Selsun 的淨效應，我認為略高於 25%。你知道，當我與我們的同儕群體進行比較時，我們已經成長，我們的支出超過了對比群體。所以，你知道，當我們今天轉向你的問題時，三個 50 到 400，這與我們今年將要花費的錢相比，與我們在行業中看到的相比如何，我們認為這非常好。的。因此，如果你問我，我是否對我們降低資本支出感到失望，對改善和成長的步伐放緩感到有點失望，但我們將在這裡度過出色的一年。我認為削減資本支出是謹慎的。正如我們之前所說，我們能夠有效地利用我們今天正在做的事情並提高利用率，並讓流程真正為我們加速，這是積極的，因此必須佔上風。經濟學家認為，自第一季平均值以來，利用率大幅提高，我們預計這種情況將持續下去。價格持平。正如你所看到的。我們預計它們將繼續持平，可能會偏向上漲，但考慮到我們過去兩年將租金率提高了 17% 以上，品牌並沒有得到改善。我們的資本支出佔機隊的百分比可能與大多數競爭對手的情況一致。

I see.

我懂了。

And you feel post the cut here and kind of what other peers have spoken to that largely in line as how you would feel about it?

您覺得在這裡發布剪輯以及其他同行的言論很大程度上與您對此的感受一致嗎？

I do I think that math would pencil out to say that those ratios are would be in line.

我確實認為數學會指出這些比率是一致的。

Yes, thank you.

是的，謝謝。

And our next question comes from Alex Rygiel from B. Riley FBR. Alex, please go ahead.

我們的下一個問題來自 B. Riley FBR 的 Alex Rygiel。亞歷克斯，請繼續。

Thank you very much. Good morning, gentlemen.

非常感謝。早安，先生們。

Perfect.

完美的。

But first, Tom, you had record margins on your equipment sold, it seems to contradict kind of utilization a bit. So I suspect maybe you are strategically selling high-value pretzel equivalent, but maybe you can comment on that a little bit more sure.

但首先，湯姆，您所售設備的利潤創歷史新高，這似乎與利用率有點矛盾。因此，我懷疑您可能正在策略性地銷售高價值椒鹽捲餅等價物，但也許您可以對此發表更肯定的評論。

Yes. I think what and I think the thing that speaks most clearly to that, Alex, is the age of that fleet 72 module, which has been kind of a staple for us. We've spoken many times about our transition to a pure-play rental stated differently. As we moved away from distribution, we have greater control over that age of what we're selling out our rental fleet, we drive it based off of pricing. So the used equipment markets remain hot. I wouldn't say we're pulling forward sales. I would say we opportunistically continue to sell the older portions of our fleet and did so at outstanding margins, you know, so there's nothing about selecting the items other than there are the items that were nearing or were ready for retirement in normal course of business. And we saw the opportunity to a full of you know, so a little bit more than we've probably anticipated a quarter ago?

是的。Alex，我認為最能說明這一點的是艦隊 72 模組的年齡，它一直是我們的主要產品。我們已經多次談到純粹租賃的轉變，但表達卻有所不同。隨著我們擺脫分銷，我們可以更好地控制我們出售的租賃車隊的年齡，我們根據定價來推動它。因此二手設備市場依然火熱。我不會說我們正在推動銷售。我想說的是，我們機會主義地繼續出售我們機隊的舊部分，並且以出色的利潤這樣做，你知道，所以除了在正常業務過程中接近或準備退役的項目之外，沒有什麼可以選擇的項目。我們看到了一個充滿機會的機會，所以比我們一個季度前的預期要多一點？

And then secondly, can you talk a bit about your thoughts on capital allocation between growth CapEx and maybe share repurchases or dividends?

其次，您能否談談您對成長資本支出與股票回購或股利之間的資本分配的想法？

Yes.

是的。

We'll do it as we have. We've committed many times and we'll continue to do so. We're dedicated to our dividend, obviously, at our level of projected CapEx in our performance. That's only going to continue to improve as the year goes forward, we're going to produce a very nice amount of free cash flow that we're always going to consider, including share repurchases at this point that, you know, we're going to continue to remain focused. We've got two acquisitions. One, we've perfect that one, we're on the cusp of perfecting, and I'll tell you our outlook for additional opportunities to acquire small businesses that meet our criteria remain. We remain optimistic. So we're going to stick with what we have been doing. I wouldn't want to indicate that we're going to entertain share repurchases, but it's always on the table for discussion.

我們會照我們的方式去做。我們已經多次做出承諾，並將繼續這樣做。顯然，我們致力於我們的股息，在我們的業績中預期的資本支出水準。隨著時間的推移，這種情況只會繼續改善，我們將產生大量的自由現金流，我們總是會考慮這一點，包括此時此刻的股票回購，你知道，我們正在將繼續保持專注。我們有兩次收購。第一，我們已經完善了這一點，我們正處於完善的風口浪尖，我將告訴您，我們對收購符合我們標準的小型企業的更多機會的展望仍然存在。我們保持樂觀。所以我們將堅持我們一直在做的事情。我不想表明我們將考慮股票回購，但它總是擺在桌面上進行討論。

Thank you very much.

非常感謝。

Yes.

是的。

And our next question comes from Brian Brophy from Stifel. Brian, please go ahead.

我們的下一個問題來自 Stifel 的 Brian Brophy。布萊恩，請繼續。

Yes, thanks. Good morning, I'm just wondering if there's any particular end markets to call out or geographic regions as it relates to this softer new project activity you guys talked about your remarks. Thanks.

對了謝謝。早安，我只是想知道是否有任何特定的終端市場或地理區域需要指出，因為它與你們談論的這個較軟的新專案活動有關。謝謝。

Yes, Brian, this is John. So you know, as far as the large projects we have, we have better visibility today than what we had 90 days ago, and we're happy with what we're seeing how these rolling out particular strength with the data centers of some of the non-building infrastructure related projects, road bridges, airports, we're seeing flow there. So we're really starting to see an uptick as far as energy goes, the renewables, right? Solar is been a big beneficiary for us and it will continue to be also a wind. And of course, just general industrial as it relates to LNG and some of the other petrochemical sectors?

是的，布萊恩，這是約翰。所以你知道，就我們擁有的大型專案而言，我們今天比 90 天前擁有更好的可見性，我們很高興看到這些專案如何通過一些非建築基礎設施相關專案、公路橋樑、機場，我們看到那裡的資金流動。所以我們真的開始看到能源、再生能源的成長，對吧？太陽能是我們的一大受益者，而且它將繼續成為風能。當然，只是與液化天然氣和其他一些石化產業相關的一般工業？

It's strong.

它很強。

Yes, Steve, you asked about geography that fairly broad based. I mean, obviously in the Southeast we have more SpectraChem than we do and maybe other regions. But aside from that, all of the project types, John speaking about are fairly broad based and we're enjoying them across our footprint, they're just going to continue to escalate.

是的，史蒂夫，你問的是相當廣泛的地理問題。我的意思是，顯然在東南部我們擁有比我們甚至其他地區更多的 SpectraChem。但除此之外，約翰談到的所有項目類型都具有相當廣泛的基礎，我們在我們的足跡中很享受它們，它們只會繼續升級。

Okay, thanks. That's helpful. And then I guess on rental rates, obviously things continuing to slow a little bit there. I'm just curious how you're thinking about expectations for the remainder of the year? Thanks.

好的謝謝。這很有幫助。然後我猜租金率顯然會繼續放緩。我只是好奇你如何看待今年剩餘時間的預期？謝謝。

Yes, Brian, as Brad stated, flattish to slightly up is really what our expectation is coming out of the gate in Q1, with utilization being a little bit softer year over year. It's always more challenging to get those rate increases in a lower utilization environment. But what we see moving forward with the large projects. You know, we've spoken at depth on past calls about large projects with more aggressive pricing, and that's what we're beginning to see today and expect more of that in the back half of the year. So how is that going to translate and to rate performance for us, we think that it's going to be flattish to slightly up very helpful.

是的，布萊恩，正如布拉德所說，持平到略有上升確實是我們對第一季的預期，利用率比去年同期略有下降。在利用率較低的環境中提高速率總是更具挑戰性。但我們看到大型專案的進展。你知道，我們在過去的電話會議中深入討論了定價更激進的大型項目，這就是我們今天開始看到的情況，並預計在今年下半年會出現更多這樣的情況。那麼這對我們來說將如何轉化和評估績效，我們認為它將持平到略有上升，這非常有幫助。

Thank you. I'll pass it on.

謝謝。我會把它傳遞下去。

And our next question comes from Steven Ramsey from Thompson Research Group. Steven, please go ahead.

我們的下一個問題來自湯普森研究小組的史蒂文拉姆齊。史蒂文，請繼續。

Hi, everyone.

大家好。

It's John Pierce for Steven. Thanks for taking my question. As we as we think about your slower kind of rate of growth right now, are you guys seeing any competitors and maybe reducing price or maybe do you foresee any kind of irrational behavior from in any areas on the pricing side, just to kind of gain business broadly?

這是史蒂文的約翰·皮爾斯。感謝您提出我的問題。當我們考慮你們現在成長速度較慢時，你們是否看到了任何競爭對手，可能會降低價格，或者你們是否預見到定價方面的任何領域會出現任何非理性行為，只是為了獲得某種收益業務廣泛？

No, we're not look what we've seen is and again, we spoke about on previous calls broadly, we're seeing discipline with us throughout the industry, and I think that's reflected in most folks' CapEx guidance for the year. And it'll be interesting to watch how that continues to unfold for our peer group. But we see discipline discipline continued. And just with what we expect that being said, we have seen somewhat aggressive pricing on the megaprojects, not completely a surprise there. There have been some isolated situations, but there are always projects we're going to walk away from you just can't achieve 17% price improvement in two years in land every deal you would like to land. So as we've talked about, if we have a headwind that we're more concerned about regarding pricing, it's really related to mega projects, the large projects that consume a large amount of product for an extended period of time. But broadly, we're seeing disciplined and hope we continue to.

不，我們並沒有看到我們所看到的情況，我們在之前的電話會議中廣泛談到了，我們看到整個行業都在遵守紀律，我認為這反映在大多數人今年的資本支出指導中。觀察我們的同行群體如何繼續發展這一點將會很有趣。但我們看到紀律紀律仍在繼續。正如我們所期望的那樣，我們看到大型專案的定價有些激進，這並不完全令人驚訝。確實有一些孤立的情況，但總有一些項目我們會放棄你，只是無法在兩年內讓你想要達成的每筆交易的土地價格提高 17%。因此，正如我們所討論的，如果我們遇到更關心定價的不利因素，那麼它確實與大型專案有關，即在較長時間內消耗大量產品的大型專案。但總的來說，我們看到了紀律性，並希望我們能夠繼續這樣做。

Greg on the on the lower CapEx side, does this does this mean that you guys are with the branch growth? Are you populating these new branches with less fleet? Or is it just kind of a reduction in fleet you are selling off fleet kind of equally amongst everywhere?

格雷格（Greg）在較低的資本支出方面，這是否意味著你們支持分支機構的成長？您是否正在用更少的機隊來填充這些新分支機構？或者這只是您在各地平等出售機隊的機隊減少？

Yes.

是的。

I know a couple of things going on. We're absolutely are not bringing less fleet to new locations are our opportunity. We stated 12 to 15 locations for the year, and I'll tell you we've got a bias for the upside of that range. We've got nice momentum. We're selecting great markets and we've got a lot of good activity where we're going to stamp out locations throughout the year that are going to serve us well for decades. To come. And we're not we're certainly not bringing less inventory there. So we're going to bring their existing needs and grow them as we can. We're going to sell less out of our rental fleet this year than we did last in 23. So that's going to require less replacement capital. And we're moderating our same store growth as we spoke about we're very focused on returning and hopefully start showing some level of leverage in our utilization in the back half of the year.

我知道發生了幾件事。我們絕對不會減少前往新地點的機隊，這是我們的機會。我們規定了今年 12 到 15 個地點，我會告訴你，我們對這個範圍的上行有偏見。我們勢頭良好。我們正在選擇偉大的市場，我們有很多良好的活動，我們將在全年中淘汰那些將在幾十年內為我們提供良好服務的地點。來吧。我們當然不會減少那裡的庫存。因此，我們將滿足他們現有的需求並盡可能地擴大它們。今年我們租賃車隊的銷售量將低於 23 年。因此，這將需要更少的重置資本。正如我們所說，我們正在放緩同一家商店的成長，我們非常注重回歸，並希望在今年下半年開始在利用率方面顯示出一定程度的槓桿作用。

I'd have to look again, but I think that delta in Q1 was something north of 300 basis points year over year. And as we sit here today, we're probably around 200 basis points. So we're closing the gap we're going to continue. We expect to continue to close that gap and we hope to and we plan to exceed and show some leverage in utilization in the back half of the year.

我必須再看一遍，但我認為第一季的增量與去年同期相比超過了 300 個基點。當我們今天坐在這裡時，我們的利率可能在 200 個基點左右。因此，我們將繼續縮小差距。我們預計將繼續縮小這一差距，我們希望併計劃在今年下半年超越並顯示出一定的利用率槓桿。

Great.

偉大的。

Thank you.

謝謝。

Thank you.

謝謝。

And as a reminder, if you still would like to pose a question, please press star one to enter the question queue.

提醒一下，如果您仍然想提出問題，請按星號一進入問題佇列。

Yes, seeing that there are no further questions at this time. I would like to turn the conference back over to Jeff Chastain for some closing remarks.

是的，目前沒有其他問題了。我想將會議轉回傑夫·查斯坦（Jeff Chastain）做一些總結發言。

Okay, operator, thank you. If there are no more questions. We'll go ahead and conclude today's call. We 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, thank you and good day, everyone.

好的，接線生，謝謝您。如果沒有其他問題了。我們將繼續結束今天的電話會議。我們感謝大家今天抽出時間加入我們，並感謝您對 H&E 的持續關注。我們期待再次與您交談，謝謝大家，祝大家有美好的一天。

And this concludes the conference. Thank you for attending today's presentation. You may now disconnect and have a great day.

會議到此結束。感謝您參加今天的演講。您現在可以斷開連接並度過愉快的一天。