H&E Equipment Services Inc (HEES) 2024 Q3 法說會逐字稿

Good morning, and welcome to H&E Equipment Services third-quarter 2024 earnings conference call.

早上好，歡迎參加 H&E 設備服務 2024 年第三季財報電話會議。

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.

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。

Thank you, operator. Good morning and welcome to all our participants on today's call to review the third-quarter 2024 financial performance of H&E Rentals. A press release reviewing the company's results for the quarter was issued earlier today and can be found along with all supporting statements and schedules on the H&E Rentals' website, www.herentals.com.

謝謝你，接線生。早安，歡迎所有參加今天電話會議的參與者，回顧 H&E Rentals 2024 年第三季的財務表現。今天稍早發布了一份回顧該公司本季業績的新聞稿，可在 H&E Rentals 網站 www.herentals.com 上找到所有支援聲明和時間表。

A slide presentation will accompany today's discussion and is also posted on our website under the Investor Relations tab in Events and Presentations. On slide 2, you'll see that Brad Barber, our Chief Executive Officer; as well as John Enquist, President and Chief Operating Officer; and Leslie Magee, Chief Financial Officer and Corporate Secretary are all joining me on today's call.

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。在投影片 2 上，您會看到我們的執行長 Brad Barber；以及總裁兼營運長 John Enquist；和財務長兼公司秘書 Leslie Magee 都將參加今天的電話會議。

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.

布拉德將開始今天早上的回顧。但在我將電話轉交給他之前，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」等詞語的陳述以及類似表達均構成前瞻性陳述。前瞻性陳述涉及已知和未知的風險和不確定性，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。

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.

這些不確定性的摘要包含在公司今天電話會議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中風險因素中描述的風險。我們敦促投資者、潛在投資者和其他聽眾在評估前瞻性陳述時仔細考慮這些因素，並警告不要過度依賴此類前瞻性陳述。該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。

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 concludes the preliminary details for our call today.

此外，我們在今天的電話會議中引用了非公認會計準則財務指標。您將在我們的新聞稿和今天簡報資料的附錄中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。我們今天電話會議的初步細節到此結束。

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

現在我將把電話轉給 H&E Rentals 執行長 Brad Barber。

Thank you, Jeff. Good morning, and welcome to the review of our third-quarter 2024 financial results. As always, your participation and continued interest in H&E is appreciated.

謝謝你，傑夫。早安，歡迎回顧我們 2024 年第三季的財務表現。一如既往，我們感謝您的參與以及對 H&E 的持續關注。

Proceed to slide 4. With the exception of the growing megaproject opportunity, spending levels across the nonresidential construction verticals remain mixed in the third quarter with total construction spending continuing to exhibit slower year-over-year growth. The spending environment led to further constraint of key industry measures as evidenced by lower physical utilization, an incremental decline in rental rates, and ample availability of certain equipment types.

繼續幻燈片 4。除了不斷增長的大型專案機會外，第三季度非住宅建築垂直領域的支出水平仍然參差不齊，建築總支出繼續呈現同比增長放緩的趨勢。支出環境導致關鍵產業措施進一步受到限制，具體表現為實體利用率下降、租金率逐步下降以及某些設備類型的充足可用性。

The weaker measure weighed on our financial performance in the quarter with the results generally trailing the year ago period. Despite these select near-term headwinds, we continue to execute our long-term strategic grants expansion program leading to a growing operational presence across our 32-state footprint. I'll provide more details on our third quarter key financial metrics as well as the performance of our rental business segment. Also, I want to give my thoughts on the rental equipment industry as we approach 2025 and identify some factors that give us confidence and lend support to a more positive industry assessment.

較弱的指標影響了我們本季的財務業績，結果普遍落後於去年同期。儘管存在這些短期阻力，我們仍繼續執行長期策略撥款擴張計劃，從而在 32 個州的業務範圍內不斷擴大業務規模。我將提供有關我們第三季關鍵財務指標以及租賃業務部門業績的更多詳細資訊。此外，隨著 2025 年的臨近，我想談談我對租賃設備行業的看法，並找出一些給我們信心並為更積極的行業評估提供支援的因素。

Finally, I'll review the details behind our 2024 expansion achievements and some early thoughts on what comes next. Leslie will follow with an expanded commentary on our third quarter financial performance, and then, we will open the call for questions.

最後，我將回顧 2024 年擴展成就背後的詳細資訊以及對下一步發展的一些早期想法。萊斯利隨後將對我們第三季的財務業績進行詳細評論，然後我們將開始提問。

On to slide 6 please. Our third-quarter key financial metrics were mixed. Total revenues declined 4% from the year ago quarter due primarily to a more than 47% reduction in sales of rental equipment. We lowered fleet sales by design to leverage both our young fleet age and record investment in 2023. Margins on the sales of rental equipment were again very strong and exceeded 60% in the quarter.

請轉到投影片 6。我們第三季的主要財務指標好壞參半。總收入較去年同期下降 4%，主要是因為租賃設備銷售額下降超過 47%。我們有意降低車隊銷售量，以利用我們年輕的車隊年齡和 2023 年創紀錄的投資。租賃設備的銷售利潤再次非常強勁，本季超過 60%。

Total equipment rental revenues improved 3.3% in the quarter as a 240-basis point decline in physical utilization was offset by the addition of 27 new locations since the close of the third quarter of 2023, including acquired branches. On a trailing 12-month basis, our equipment rental revenues improved 9.2% compared to the same trailing 12-month period in 2023. I have more to say about our impressive expansion achievements in a moment.

本季設備租賃總收入成長 3.3%，實體利用率下降 240 個基點，被自 2023 年第三季末以來新增的 27 個新地點（包括收購的分行）所抵銷。從過去 12 個月來看，我們的設備租賃收入與 2023 年過去 12 個月相比成長了 9.2%。稍後我還要談談我們令人印象深刻的擴張成就。

Finally, our fleet size, as measured by original equipment cost or OEC, closed the third quarter at just below $3 billion, an increase of 8.1% compared to an OEC at the conclusion of the year ago quarter. The slower pace of growth in OEC in 2024 reflects our reduced gross CapEx expenditures compared to a record investment in each of the years, 2022 and 2023. Our 2024 gross fleet investment through September 30, 2024, was $327.8 million, a 45% decline compared to the same period in 2023.

最後，我們的機隊規模（以原始設備成本或 OEC 衡量）在第三季結束時略低於 30 億美元，與去年同期結束時的 OEC 相比增長了 8.1%。2024 年 OEC 成長速度放緩反映了與 2022 年和 2023 年每年創紀錄的投資相比，我們的總資本支出有所減少。截至 2024 年 9 月 30 日，我們 2024 年的機隊總投資為 3.278 億美元，與 2023 年同期相比下降 45%。

On to slide 7. Turning to our rental performance, revenues improved 2.8% in the third quarter compared to the year ago period with the addition of 27 new locations offsetting the decrease in utilization. Rental gross margins in the quarter were 51.2%, down 210 basis points from the third quarter of 2023, largely due to a decline in physical utilization in a lesser degree with rental rates.

轉到投影片 7。就我們的租賃業績而言，第三季營收較去年同期成長 2.8%，新增 27 個地點抵銷了利用率的下降。該季度的租金毛利率為 51.2%，較 2023 年第三季下降 210 個基點，主要是由於租金率導致實體利用率下降，但程度較輕。

Rental rates in the quarter demonstrated resiliency, declining by only 0.1% on a year-over-year basis due in part to a continued shift of our rental fleet to megaproject work where greater price flexibility is matched with longer-term project assignments.

本季的租金錶現出彈性，年比僅下降 0.1%，部分原因是我們的租賃車隊持續轉向大型專案工作，其中更大的價格靈活性與長期專案任務相匹配。

Average rental rates through the nine months ending September 30, 2024, rose 1.5% compared to the same period in 2023. Physical utilization declined 240 basis points to 67.6%, reflecting lower project activity and some modest impact from the 27 new locations added over the last year. On a sequential quarterly basis, rental rates declined 0.6% while physical realization improved 120 basis points.

截至 2024 年 9 月 30 日的九個月平均租金較 2023 年同期上漲 1.5%。實際利用率下降 240 個基點至 67.6%，反映出計畫活動減少以及去年新增 27 個地點的影響不大。以季度計算，租金率下降 0.6%，而實物變現則提高 120 個基點。

Additionally, our branch expansion activity was responsible for a slight margin headwind in the quarter due to the misalignment of new branch costs and revenues generated that commonly occur before newly opened locations achieve our targeted performance metrics. As we have discussed and seen before, it is common for this misalignment to unwind over an average of 12 to 18 months. Finally, dollar utilization in the quarter was 39.4% compared to 41.5% in the third quarter of 2023.

此外，我們的分公司擴張活動導致本季利潤率略有下降，因為新開設的分公司的成本和收入通常會在新開設的分公司達到我們的目標績效指標之前出現不一致。正如我們之前討論和看到的，這種失調通常平均需要 12 至 18 個月才能緩解。最後，本季的美元利用率為 39.4%，而 2023 年第三季為 41.5%。

I now want to transition to discussing the equipment rental industry with some thoughts on the remainder of 2024, but more importantly, an early and increasingly encouraging evaluation of 2025. Slide 8, please. The 2024 equipment rental operating environment has largely developed without meaningful deviation from our expectations.

我現在想轉而討論設備租賃行業，並對 2024 年剩餘時間進行一些思考，但更重要的是，對 2025 年進行早期且越來越令人鼓舞的評估。請幻燈片 8。2024 年的設備租賃營運環境已基本發展，與我們的預期沒有明顯偏差。

Construction spending in the US continues to demonstrate the slowing rate of growth observed over the first half of 2024. Local project activity remains muted due in part to an extended period of elevated interest rates. And we continue to manage a slight oversupply of certain types of equipment. We believe a trend of moderating activity will persist through the remainder of the year with physical fleet utilization and rental rates expected to remain below year ago measures.

2024 年上半年，美國的建築支出持續呈現成長放緩的趨勢。當地專案活動仍然低迷，部分原因是利率長期處於高位。我們繼續管理某些類型設備的輕微供應過剩。我們認為，活動放緩的趨勢將持續到今年剩餘時間，實體機隊利用率和租金率預計仍低於去年同期水準。

Beyond the fourth quarter, the developing outlook for our industry is more encouraging into 2025 with many factors to consider. For example, the Dodge Momentum Index or DMI, a leading indicator of construction spending has exhibited gains for five of the last six months and remains at robust levels. Also construction employment remains on a steady upward trajectory with five consecutive months of growth through September 2024.

第四季之後，到2025年，我們產業的發展前景更加令人鼓舞，需要考慮許多因素。例如，建築支出領先指標道奇動量指數（DMI）在過去六個月中有五個月呈現上漲，並保持在強勁水平。此外，建築業就業人數仍維持穩定上升趨勢，截至 2024 年 9 月連續五個月成長。

Equally important, a cycle of easing interest rates is expected to have positive implications for local construction activity as projects are reevaluated under more favorable lending conditions. Furthermore, industry competitors continue to demonstrate a disciplined approach regarding rental rates and purchases of equipment.

同樣重要的是，隨著專案在更有利的貸款條件下重新評估，利率寬鬆週期預計將對當地建築活動產生積極影響。此外，行業競爭對手繼續在租賃費率和設備採購方面表現出嚴格的態度。

Finally, the strong expansion of megaprojects remains a significant driver of growth for our industry both today as well as into the future. An increasing number of these projects reside or are planned within our regions of operation.

最後，大型專案的強勁擴張仍然是我們行業今天和未來成長的重要推動力。越來越多的此類項目位於或計劃在我們的營運區域內進行。

On to slide 9, please. As I've noted on previous calls, megaprojects are characterized by elevated equipment volumes and extended project durations leading to premium utilization metrics and excellent yield on deployed equipment. Due to their remarkable equipment needs, multiple large equipment rental providers are active on most projects. With visibility beyond 2025, megaprojects remain a stable base of demand for construction rental equipment.

請轉到投影片 9。正如我在先前的電話會議中指出的那樣，大型專案的特點是設備數量增加和專案持續時間延長，從而導致部署設備的利用率指標較高且產量優異。由於其巨大的設備需求，多家大型設備租賃提供者活躍在大多數專案中。展望 2025 年後，大型專案仍是建築租賃設備的穩定需求基礎。

Slide 10. Our branch expansion and increased operational scale has led to greater exposure to megaprojects, including a growing presence on data centers, solar and wind farms, and LNG export facilities to name a few. Bidding activity continues to trend favorably as does equipment deployed as a percent of OEC.

幻燈片 10。我們的分公司擴張和營運規模的擴大導致我們更多地參與大型項目，包括在資料中心、太陽能和風電場以及液化天然氣出口設施等領域的業務不斷增長。投標活動持續保持良好趨勢，部署的設備佔 OEC 的比例也呈現上升趨勢。

A recent evaluation of data from Dodge Construction Network and PEC found projects with a total estimated value of $537 billion currently reside in our regions of operation. An estimated 35% of these projects have commenced construction, and H&E Equipment is deployed on nearly half of these projects. The remaining balance of projects is indicative of the robust opportunity that lies ahead for H&E and the equipment rental industry. We believe H&E's participation in megaprojects opportunities will continue to grow as our disciplined approach to branch expansion and building scale evolves.

最近對 Dodge Construction Network 和 PEC 的數據進行的評估發現，目前我們營運區域內的專案估計總價值達 5,370 億美元。據估計，這些項目中有 35% 已開始建設，其中近一半的項目部署了 H&E 設備。項目的剩餘餘額表明 H&E 和設備租賃行業面臨巨大的機會。我們相信，隨著我們對分支機構擴張和建設規模的嚴格方法的發展，H&E 參與大型計畫的機會將繼續增加。

I now want to bring you up to date on recent achievements in our strategic expansion initiatives. Slide 11, please. A record number of eight branches were added in the third quarter while the ninth branch was opened in the month of October. The strong outcome reflected the outstanding execution of our accelerated new location program, which has achieved a record 16 additional locations in 2024, exceeding our stated expansion expectation. The new locations have expanded our presence in several regions. Our US geographic coverage in 2024 has now grown to 157 locations across 32 states as of September 30.

現在我想向您介紹我們策略擴張計劃的最新成就。請投影片 11。第三季新增 8 家分行，數量創歷史新高，而 10 月則開設了第 9 家分行。這項強勁成果反映了我們加速新地點計畫的出色執行，該計畫在 2024 年新增了 16 個地點，創歷史新高，超出了我們既定的擴張預期。新地點擴大了我們在多個地區的業務。截至 9 月 30 日，我們在 2024 年的美國地理覆蓋範圍現已擴大到 32 個州的 157 個地點。

When accounting for both new locations and branches added through acquisition, our branch count is up over 14% following the close of 2023, and approximately, 54% since the close of 2021. Both measures are a dominant accomplishment within our industry. Our target range for 2024 gross fleet expenditures remains $350 million to $400 million with growth expenditures through the third quarter of $328 million.

如果考慮到新地點和透過收購增加的分支機構，我們的分支機構數量自 2023 年底以來增加了 14% 以上，自 2021 年底以來增加了約 54%。這兩項措施都是我們產業內的一項顯著成就。我們對 2024 年機隊總支出的目標範圍仍然是 3.5 億至 4 億美元，截至第三季的成長支出為 3.28 億美元。

To conclude, our expansion achievements remain a significant highlight in 2024. Our growth trajectory remains among the best in the industry, as evidenced by a 54% increase in branch count since the close of 2021. Our approach to expansion is disciplined and includes a thorough evaluation of long-term growth trends for each location under consideration.

總而言之，我們的擴張成就仍然是 2024 年的一大亮點。自 2021 年底以來，我們的分公司數量增加了 54%，這證明我們的成長軌跡仍然是業界中最好的。我們的擴張方法是嚴格的，包括對每個考慮地點的長期成長趨勢進行全面評估。

We know that with the addition of each new branch location, we fortify our competitive position in the equipment rental industry. At the same time, we grow our presence in attractive geographies with attractive long-term construction opportunities and establish a platform for future financial improvement. The modest headwind associated with our growth initiatives are insignificant when compared to the long-term financial contribution that is possible from a well-executed plan. Our expansion represents an investment in our future and will benefit H&E for decades to come.

我們知道，隨著每個新分公司的增加，我們將鞏固我們在設備租賃行業的競爭地位。同時，我們在具有吸引力的長期建設機會的有吸引力的地區擴大業務，並為未來的財務改善建立平台。與執行良好的計劃可能帶來的長期財務貢獻相比，與我們的成長計劃相關的適度阻力是微不足道的。我們的擴張是對未來的投資，並將在未來幾十年內使 H&E 受益。

With this, I'm going to ask you to proceed to slide 12, and I will now turn the call over to Leslie, who will discuss the third-quarter financial performance in greater detail. Leslie?

說到這裡，我將請您繼續觀看幻燈片 12，現在我將把電話轉給 Leslie，他將更詳細地討論第三季的財務表現。萊斯利？

Thank you, Brad. Good morning, and welcome. everyone. I'll begin this morning with slide 13 and a review of third-quarter revenues, gross profit, and profit margins.

謝謝你，布拉德。早上好，歡迎光臨。每個人。今天早上我將從幻燈片 13 開始回顧第三季的營收、毛利和利潤率。

Revenues in the third quarter totaled $384.9 million, down $15.8 million or 4% compared to the third quarter of 2023. The decrease was primarily due to a $ 24.9 million decrease in sales of rental equipment, partially offset by a $10.4 million increase in equipment rental revenues. Rental revenues improved $7.8 million in the quarter or 2.8% to $288.1 million compared to $280.3 million in the year ago quarter.

第三季營收總計 3.849 億美元，比 2023 年第三季減少 1,580 萬美元，即 4%。下降的主要原因是租賃設備銷售額減少 2,490 萬美元，但部分被設備租賃收入增加 1,040 萬美元所抵銷。本季租金收入成長 780 萬美元，成長 2.8%，達到 2.881 億美元，去年同期為 2.803 億美元。

The improvement was driven in part by further expansion of our branch network with 27 new locations added since the close of the third quarter of 2023. A total of 19 branches resulted from our accelerated new location strategy with eight branches added to acquisitions. And in addition, our fleet original equipment cost or OEC closed the third quarter up $220.1 million or 8.1% compared to the year ago quarter, resulting in an OEC of just below $3 billion.

這項改善的部分原因是我們的分行網路進一步擴張，自 2023 年第三季末以來新增了 27 家分行。加速新址策略後，我們總共開設了 19 家分行，其中 8 家分行是透過收購增加的。此外，第三季我們的車隊原始設備成本或 OEC 與去年同期相比成長了 2.201 億美元，即 8.1%，導致 OEC 略低於 30 億美元。

These increases were partially offset by lower demand and rental rates. Physical utilization of 67.6% was down 240 basis points from the year ago measure, due largely to weaker demand and a modest oversupply of equipment. On a sequential quarterly basis, physical utilization improved 120 basis points.

這些成長被需求和租金率的下降部分抵消。物理利用率為 67.6%，比去年同期下降 240 個基點，這主要是由於需求疲軟和設備供應適度過剩。按季度計算，物理利用率提高了 120 個基點。

Rental rates in the quarter posted a slight decrease of 0.1%, following three years of quarterly rate gains. Rates were down 0.6% on a sequential quarterly basis.

繼三年季度租金上漲後，本季租金小幅下降 0.1%。利率季減 0.6%。

Sales of rental equipment totaled $27.8 million in the third quarter, down $24.9 million from the third quarter of 2023. Reduced fleet sales of nearly 50% follows our continued fleet management strategy. Revenue from the sale of new equipment increased 11.2% in the third quarter to $14.1 million compared to $12.6 million in the year ago quarter.

第三季租賃設備銷售額總計 2,780 萬美元，比 2023 年第三季減少 2,490 萬美元。遵循我們持續的車隊管理策略，車隊銷售量減少了近 50%。第三季新設備銷售收入成長 11.2%，達到 1,410 萬美元，去年同期為 1,260 萬美元。

Gross profit in the third quarter declined 9% to $171.5 million compared to $188.4 million in the third quarter of 2023. Gross margin in the quarter was 44.5% compared to 47% in the year ago quarter with the decrease due primarily to a decline in rental margins and an unfavorable revenue mix.

第三季的毛利下降 9%，至 1.715 億美元，而 2023 年第三季的毛利為 1.884 億美元。本季毛利率為 44.5%，而去年同期毛利率為 47%，下降的主要原因是租金利潤率下降和不利的收入組合。

As Brad explained earlier, our rental operations experienced lower year-over-year margins due to headwinds resulting from lower utilization and rental rates and our branch expansion initiatives. Total equipment rental margins were 45.3% compared to 47.4% in the year ago quarter while rental margins were 51.2% compared to 53.3% over the same period of comparison.

正如布拉德早些時候解釋的那樣，由於利用率和租金率下降以及我們的分支機構擴張計劃帶來的不利因素，我們的租賃業務的利潤率同比下降。設備總租賃利潤率為 45.3%，去年同期為 47.4%；租賃利潤率為 51.2%，去年同期為 53.3%。

Reviewing our business segments, margins on the sale of rental equipment remain near record levels at 60.2% compared to 58.5% in the year ago quarter, while margins on the sale of new equipment were 19.8% compared to 13.2% over the same period of comparison.

回顧我們的業務部門，租賃設備的銷售利潤率仍接近歷史最高水平，為 60.2%，而去年同期為 58.5%，而新設備的銷售利潤率為 19.8%，而去年同期為 13.2% 。

Slide 14, please. Income from operations in the third quarter was $60.7 million, a decline of 23.4% compared to $79.2 million in the third quarter of 2023. The year ago result included a pretax $5.7 million noncash goodwill impairment charge. Adjusted income from operations, excluding the third quarter 2023 impairment charge, was $84.9 million. The margin for the third quarter of 2024 declined to 15.8% compared to 19.8% in the year ago quarter or 21.2% calculated using adjusted income from operation, which excludes the impairment charge. The lower margin was due primarily to higher SG&A expense, lower rental margins, and an unfavorable revenue mix.

請幻燈片 14。第三季營運收入為 6,070 萬美元，較 2023 年第三季的 7,920 萬美元下降 23.4%。一年前的業績包括稅前 570 萬美元的非現金商譽減損費用。調整後的營運收入（不包括 2023 年第三季的減損費​​用）為 8,490 萬美元。2024 年第三季的利潤率下降至 15.8%，去年同期為 19.8%，根據調整後的營運收入（不包括減損費用）計算為 21.2%。利潤率較低的主要原因是銷售管理費用較高、租金利潤率較低、收入組合不利。

Proceed to slide 15, please. Net income in the third quarter was $31.1 million or $0.85 per diluted share compared to net income of $48.9 million or $1.35 per diluted share in the third quarter of 2023. Adjusted net income in the third quarter of 2023, excluding the goodwill impairment charge, was $53 million or $1.46 per diluted share. Our effective income tax rate in the third quarter was 28.3% compared to 26.1% for the same quarter in 2023.

請繼續看投影片 15。第三季淨利為 3,110 萬美元，即稀釋後每股收益 0.85 美元，而 2023 年第三季淨利為 4,890 萬美元，即稀釋後每股收益 1.35 美元。2023 年第三季調整後淨利（不含商譽減損費用）為 5,300 萬美元，即稀釋後每股收益 1.46 美元。我們第三季的有效所得稅率為 28.3%，而 2023 年同一季為 26.1%。

Proceed to slide 16, please. Adjusted EBITDA in the third quarter declined 8.4% to $175.3 million compared to $191.4 million in the year ago quarter. The adjusted EBITDA margin was 45.6% compared to 47.8% in the third quarter of 2023 with the decline due primarily to higher SG&A expenses and lower margins on equipment rentals.

請繼續看投影片 16。第三季調整後 EBITDA 下降 8.4%，至 1.753 億美元，去年同期為 1.914 億美元。調整後的 EBITDA 利潤率為 45.6%，而 2023 年第三季為 47.8%，下降的主要原因是 SG&A 費用增加和設備租賃利潤率下降。

Next, slide 17, please. SG&A expense in the third quarter totaled $112.4 million compared to $104.2 million in the third quarter of 2023. The $8.2 million or 7.9% increase was due to our previously mentioned branch expansion initiatives, which contributed approximately $11 million in expenses following the 27 new locations over the period.

接下來請播放投影片 17。第三季的銷售、管理及行政費用總計 1.124 億美元，而 2023 年第三季為 1.042 億美元。820 萬美元或 7.9% 的增長是由於我們之前提到的分支機構擴張計劃，該計劃在此期間新增 27 個分支機構後貢獻了約 1100 萬美元的費用。

New branch operating expenses which incurred well ahead of the commencement of operations led to an increase in facilities and depreciation and amortization expenses as well as salaries, wages, and other employee expenses. SG&A in the third quarter was 29.2% of revenues compared to 26% in the third quarter of 2023, largely due to branch expansion costs combined with a 4% decrease in total revenues resulting from lower year-to-year fleet sales.

在開始營運之前就發生的新分行營運費用導致設施、折舊和攤提費用以及薪資、薪資和其他員工費用增加。第三季的銷售、管理及行政費用佔收入的 29.2%，而 2023 年第三季為 26%，主要是由於分公司擴張成本以及車隊銷售較去年同期下降導致總收入下降 4%。

Slide 18, please. Gross rental fleet capital expenditures in the third quarter totaled $131.3 million with net rental fleet capital expenditures of $103.5 million. For the nine months ended September 30, 2024, these figures were $327.8 million and $217.3 million respectively. Our gross fleet investment through September 2024 was approximately 45% lower than the gross investment over the same period in 2023, in accordance with our fleet management strategy ahead of lower fleet utilization.

請幻燈片 18。第三季租賃車隊資本支出總額為 1.313 億美元，租賃車隊資本支出淨額為 1.035 億美元。截至 2024 年 9 月 30 日的九個月，這些數字分別為 3.278 億美元和 2.173 億美元。根據我們在降低機隊利用率之前的機隊管理策略，截至 2024 年 9 月，我們的機隊總投資比 2023 年同期的總投資低約 45%。

Gross PP&E capital expenditures in the third quarter was $16.8 million or $14.9 million net of sales of PP&E. And for the nine months ended September 30, 2024, gross PP&E capital expenditures totaled $93.9 million with net PPZ&E CapEx of $86.4 million.

第三季 PP&E 資本支出總額為 1,680 萬美元，扣除 PP&E 銷售額後為 1,490 萬美元。截至 2024 年 9 月 30 日的九個月，PP&E 資本支出總額為 9,390 萬美元，PPZ&E 資本支出淨額為 8,640 萬美元。

Free cash flow used over the nine months ended September 30, 2024, was $56 million compared to free cash flow used of $175.5 million during the same period in 2023. Excluding acquisitions, adjusted free cash flow totaled $101.8 million for the nine months ended September 30, 2024.

截至 2024 年 9 月 30 日的九個月內使用的自由現金流為 5,600 萬美元，而 2023 年同期使用的自由現金流為 1.755 億美元。不包括收購，截至 2024 年 9 月 30 日的九個月調整後自由現金流總計 1.018 億美元。

Next, on slide 19. We closed the third quarter with a fleet size based on original equipment cost of just below $3 billion, representing an increase of $220.1 million or 8.1% compared to OEC on September 30, 2023. Fleet growth in 2024 includes nearly $100 million in fleet from acquisitions.

接下來，在投影片 19 上。截至第三季末，我們的機隊規模（基於原始設備成本）略低於 30 億美元，與 2023 年 9 月 30 日的 OEC 相比增加了 2.201 億美元，即 8.1%。2024 年機隊成長包括近 1 億美元的機隊收購。

Our average fleet age at the close of the quarter was 40.8 months compared to an industry average age of 47.9 months. Average dollar utilization in the third quarter was 39.4% compared to 41.5%. In the same quarter of 2023 and 38.6% in the second quarter of 2024. The year-over-year decline of 210 basis points was indicative of lower physical utilization and rental rates and a slight impact from our new branch locations.

截至本季末，我們的機隊平均機齡為 40.8 個月，而業界平均機齡為 47.9 個月。第三季的平均美元利用率為 39.4%，去年同期為 41.5%。2023年同季及2024年第二季分別成長38.6%。年比下降 210 個基點，顯示實體利用率和租金率較低，以及我們新設立的分行地點造成的輕微影響。

Slide 10, please. Our capital structure remained solid with steady debt measures, including a net leverage ratio of 2.2 times compared to a target range of 2 to 3 times. Additionally, we have no debt maturities before December 2028 on our $1.25 billion of senior unsecured notes and senior secured credit facility.

請投影片 10。我們的資本結構保持穩健，債務指標穩定，淨槓桿率為 2.2 倍，目標範圍為 2 至 3 倍。此外，我們的 12.5 億美元優先無擔保票據和優先擔保信貸安排在 2028 年 12 月之前沒有債務到期。

Proceed to slide 21. We closed the third quarter with cash and borrowing availability or liquidity of $472.4 million while excess availability under the $750 million ABL facility was approximately $1.6 billion. Our minimum availability as defined by the ABL agreement remains $75 million. With excess availability of $1.6 billion, we remain free of any covenant concerns.

繼續看投影片 21。第三季結束時，我們的現金和借款可用性或流動性為 4.724 億美元，而 7.5 億美元的 ABL 融資下的超額可用性約為 16 億美元。ABL 協議規定的最低可用金額仍為 7,500 萬美元。憑藉 16 億美元的超額可用性，我們仍然沒有任何盟約問題。

Finally, we paid our regular quarterly dividend of $0.275 per share of common stock in the third 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 年第三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 22, please. To close, as expected, we continue to observe a slower pace of construction spending in the third quarter resulting in lower demand for our services and financial performance that trailed our year ago results. It is worth noting our decision in 2021 to transition our operating focus to a pure rental business model was driven by our motivation to improve the consistency of our financial performance, meaning improved revenue and margin stability during cyclical weakness and material revenue and margin appreciation through periods of cyclical expansion.

請投影片 22。最後，正如預期的那樣，我們繼續觀察到第三季建築支出放緩，導致對我們服務的需求下降，財務表現落後於去年同期的業績。值得注意的是，我們在2021 年決定將營運重點轉向純租賃業務模式，這是出於我們提高財務業績一致性的動機，這意味著在週期性疲軟期間提高收入和利潤率穩定性，並在各時期實現實質收入和利潤率升值的周期性擴張。

We have already demonstrated gains from our pure play focus especially during the market expansion in 2022 and 2023. And the same is true as we manage through the current market dynamics.

我們已經展示了我們專注於純業務的收益，特別是在 2022 年和 2023 年的市場擴張期間。我們在應對當前的市場動態時也是如此。

Also, our commitment to the steady expansion of our business will continue to intensify our competitive position as we establish greater geographic diversification and operating scale. As Brad noted earlier, our expansion initiatives represent an investment in our future, providing substantial long-term financial benefit, but there is a near term cost as we have pointed out.

此外，隨著我們建立更大的地域多元化和經營規模，我們對業務穩步擴張的承諾將繼續增強我們的競爭地位。正如布拉德早些時候指出的，我們的擴張計劃代表了對未來的投資，提供了大量的長期財務利益，但正如我們所指出的，短期成本也存在。

Many of the 27 new locations added since the end of the third quarter of 2023 are already contributing to our financial performance. Additional expansion in 2025 will position H&E to capture new project opportunities as we continue to build our presence in attractive regions of the US while further advancing our competitive position in the equipment rental industry.

自 2023 年第三季末以來新增的 27 個地點中，許多地點已經為我們的財務表現做出了貢獻。2025 年的額外擴張將使 H&E 能夠抓住新的專案機會，繼續在美國有吸引力的地區建立業務，同時進一步提升我們在設備租賃行業的競爭地位。

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

我們現在準備開始問答階段。操作員，請提供指示。謝謝。

(Operator Instructions) Steven Fisher, UBS.

（操作員說明）Steven Fisher，UBS。

Thanks. Good morning, all. I just want to start off with a clarification. Last quarter, you talked about the decline in rental rates as a function of mix of megaprojects. Can you maybe just parse out what the rate impact would be excluding the megaproject impact? Would it still be negative year over year as a function of just the broader market conditions? And what's the expectation you have there for Q4.

謝謝。大家早安。我只想先澄清一下。上個季度，您談到了大型專案組合帶來的租金下降。能否分析一下排除大型專案影響後的利率影響是多少？僅根據更廣泛的市場狀況，它是否仍會逐年出現負值？您對第四季的期望是什麼？

Steven, good morning. We're not providing the rates at that level. But let me say that when we view our small- and medium-sized customer base, those rates still see some incremental gains. And it's a very fair conclusion that the entirety of our decrease is because of our moving product to these larger megaprojects for longer duration.

史蒂文，早安。我們不提供該水平的費率。但我要說的是，當我們審視中小型客戶群時，這些費率仍然會出現一些增量成長。這是一個非常公平的結論，我們的整體下降是因為我們將產品轉移到這些更大的大型項目，持續時間更長。

So no end market, local market, small-, medium-sized customer price degradation to -- none, zero. And in some cases, still, we're getting minimal gains. Our price decrease is clearly reflective of our transition of more OEC to mega projects.

因此，沒有終端市場、本地市場、中小型客戶，價格就會下降到——無、零。在某些情況下，我們所獲得的收益仍然微乎其微。我們的價格下降顯然反映了我們將更多 OEC 轉變為大型專案。

Okay. And then I guess just to follow on to that, when you have a more positive outlook for 2025. In theory, if the rental rates are still holding in there positive on the non-megaprojects, I'm curious if you think that would continue in '25? And really just more of the question about, do you think you could see any stabilization of your rental rates overall, especially, if you're -- I guess, in light of the fact that you might have even more megaprojects next year? So just curious if there's a path to stabilizing rental rates in '25.

好的。然後我想，當你對 2025 年有更積極的展望時，就可以繼續下去。理論上，如果非大型專案的租金率仍然保持在正值，我很好奇您是否認為這種情況會在 25 年繼續下去？事實上，更多的問題是，您認為整體租金率是否會穩定，尤其是，我想，考慮到明年您可能會有更多的大型專案？所以只是好奇是否有辦法在 25 年穩定租金率。

Sure. I think there certainly can be. I have no doubt we're going to continue to deploy more product to megaprojects. And that's going to have some incremental decline or incremental pull on our rental rates, as you saw in this quarter. I have no reason to believe that the rate trajectory will be dissimilar to what we've seen here in the most recent quarter., so really small but likely incrementally down on a sequential basis.

當然。我認為肯定有可能。我毫不懷疑我們將繼續向大型專案部署更多產品。正如您在本季度看到的那樣，這將對我們的租金率產生一些增量下降或增量拉動。我沒有理由相信利率軌跡將與我們在最近一個季度看到的有所不同，如此之小，但可能會逐季度逐步下降。

The question of when will we see an inflection so that it levels out completely and has no more downward trajectory, and more importantly, starts to increase is difficult to answer. I think that's possible in the back half of '25. The discipline we see with our competitors buying product -- we're all focused on one thing and that is continuing to get returns for our investors.

我們何時會看到拐點，使其完全趨於平穩，不再有下降軌跡，更重要的是，開始增加，這個問題很難回答。我認為這在 25 年下半年是可能的。我們在競爭對手購買產品時看到的紀律——我們都專注於一件事，那就是繼續為我們的投資者獲得回報。

So I don't see a lack of disciplined behavior. At some point in time, these decrease in interest rates will make local project work more desirable from a cost standpoint. And when that happens, we fully expect to see price increases start to improve. But I anticipate -- let me answer one more way.

所以我不認為有缺乏紀律行為的情況。在某個時間點，從成本的角度來看，利率的下降將使本地專案工作變得更加可取。當這種情況發生時，我們完全期望看到價格上漲開始改善。但我預計——讓我用另一種方​​式回答。

We anticipate zero price decreases with our small and medium customers. We are not going to invest and grow our business in the face of declining rates with our traditional customer base. And as we've talked about many times, and I think most folks understand, megaprojects come with an attribute of this long-term large quantity of products deployed on a particular job, which still gives a very positive yield.

我們預計中小型客戶的價格為零。面對傳統客戶群的利率下降，我們不會投資和發展我們的業務。正如我們多次談論的那樣，我想大多數人都明白，大型專案具有長期在特定工作上部署大量產品的屬性，這仍然會帶來非常積極的收益。

Steven Ramsey, Thompson Research Group.

史蒂文·拉姆齊，湯普森研究小組。

Good morning. Wanted to -- think about megaprojects a bit more. Kind of, two questions on that. Is the competitive backdrop on megaprojects still favorable or competitive pressures evolving in a way that maybe makes the returns not as attractive as early on? And then, secondly, as you think about capturing this opportunity from a strategic standpoint, do you think you need to limit your exposure here in any way? Or is it just go full throttle at megaprojects until local markets come back and then you shift a bit to capture that?

早安.我想多考慮一下大型專案。有點，有兩個問題。大型專案的競爭背景是否仍然有利，或者競爭壓力的演變可能導致回報不像早期那麼有吸引力？其次，當您考慮從策略角度抓住這個機會時，您認為您是否需要以任何方式限制您在這裡的風險敞口？還是只是全速推進大型項目，直到當地市場恢復，然後你稍微調整一下以抓住這一點？

Sure. Well, let me take the first question first. From a competitive standpoint, no change. Their competitive rate is a substantial factor for their cost, but we're not seeing any more aggression or further declines in rental rates. So it's more of the same.

當然。好吧，我先回答第一個問題。從競爭的角度來看，沒有改變。他們的競爭性價格是其成本的一個重要因素，但我們沒有看到任何更多的侵略或租金率的進一步下降。所以它更像是一樣的。

To the second part of your question, there are a variety of things we considered. It's certainly not foot on the gas and just take all we can get. Frankly, we could lower pricing a little bit more and achieve a little bit more. So we want to be measured in what we're going after.

對於你問題的第二部分，我們考慮了很多事情。這當然不是全力以赴、盡力。坦白說，我們可以再降低一點價格，取得更多成果。因此，我們希望衡量我們所追求的目標。

When we talk about this $537 billion that's addressable within our opportunity, we're talking about projects that are really close to our existing facilities. We're not stretching out and talking about things hundreds of miles away. We're talking about things that are very close and that we plan to call on.

當我們談論在我們的機會範圍內可以解決的這 5,370 億美元時，我們談論的是非常接近我們現有設施的項目。我們不會伸懶腰談論數百英里之外的事情。我們正在談論一些非常接近並且我們計劃呼籲的事情。

It depends on the geography. It depends on the nature of the product -- project. It depends on the customer that we may be dealing with. So we are very selective, and there are many other variables. But those are the three primary variables we consider as we're pricing these projects out.

這取決於地理位置。這取決於產品的性質—項目。這取決於我們可能處理的客戶。所以我們是非常有選擇性的，還有很多其他的變數。但這些是我們在為這些項目定價時考慮的三個主要變數。

But no more aggression. It's more of the same. I don't think anyone's going to become inherently more aggressive, going forward. So I think we understand the environment very well and we're going to pick the ones that fit our variables as best possible.

但不再有攻擊性。這更多的是相同的。我不認為任何人會變得天生更具侵略性，繼續前進。所以我認為我們非常了解環境，我們將盡可能選擇最適合我們變數的環境。

Okay. That's helpful. And then want to think about your intrinsic growth strategy long term with this kind of backdrop. If the demand environment in 2025 stays like this, mixed between locals lagging and mega's growing, does this change your view on increasing locations at the 12 to 15 kind of pace to position yourself for the longer term? Just kind of curious how you assess your growth strategy in a world where the sluggishness stays a bit longer.

好的。這很有幫助。然後在這種背景下考慮你的長期內在成長策略。如果 2025 年的需求環境保持這樣的狀態，既有本地企業的滯後，也有大型企業的成長，這是否會改變您對以 12 至 15 種速度增加地點以實現長期定位的看法？只是有點好奇，在一個經濟低迷持續時間更長的世界裡，您如何評估自己的成長策略。

We certainly don't like the current sluggishness or the pace that it's slowing to the level it has. It's a lot more fun to open locations in a more robust environment. That said, and to your question, if we see the same type of environment going forward, we're going to continue to open 12 to 18 locations a year. We just opened our 16th location of the year, which we're basically done for this year's openings, based off of our schedule. But with the same environment that we're looking at today, you can expect us to open 12 to 18 locations in 2025.

我們當然不喜歡當前的低迷狀態或放緩的速度。在更穩健的環境中開設分店會更有趣。也就是說，對於你的問題，如果我們未來看到同樣類型的環境，我們將繼續每年開設 12 到 18 家門市。我們剛剛開設了今年的第 16 家分店，根據我們的日程安排，今年的開幕基本上已經完成。但在我們今天面臨的環境相同的情況下，預計我們將在 2025 年開設 12 至 18 家門市。

If we were to see, you know, a real decline, of course, we would be more measured in doing so. But as I said in my prepared statements, these are long-term investments. These are going to serve to give us returns for decades to come. And we announced them all individually. But we're going to the highest profile, most durable markets that contain substantial long-term growth opportunity for construction. So we're really comfortable with what we're doing in this current environment. We're going to do more of the same.

當然，如果我們看到真正的下降，我們會更加謹慎地這樣做。但正如我在準備好的聲明中所說，這些都是長期投資。這些將在未來幾十年為我們帶來回報。我們單獨宣布了它們。但我們將進入最引人注目、最持久的市場，其中蘊藏著巨大的建築業長期成長機會。因此，我們對當前環境下所做的事情感到非常滿意。我們將做更多相同的事情。

If we see something shift more negatively, which is not our current view, then we certainly could and would slow down. But at this level, this is a very safe investment. It's going to pay a return for a long time.

如果我們看到某些事情發生更負面的變化（這不是我們目前的觀點），那麼我們當然可以而且會放慢速度。但從這個層面來看，這是一項非常安全的投資。長期付出就會有回報。

Tim Thein, Citigroup.

提姆泰恩，花旗集團。

Formally, I guess -- good morning. Just the first question is on -- and it maybe preliminary at this point, but just high level, how you're thinking about capital in '25 relative to the target this year that -- from a gross perspective of $350 million to $400 million? On the one hand, to the extent you go backwards to some degree on time this year but based on the optimism that you outlined and the potential for further rate hikes and what that may spur in '25, I guess, you have competing forces there. So maybe just some initial thoughts in terms of what you and the Board are thinking about from a capital perspective in '25.

我想，正式來說──早安。第一個問題是——目前可能是初步的，但只是高水準的，你如何考慮 25 年的資本相對於今年的目標——從 3.5 億美元到 4 億美元的總額來看？一方面，今年的時間在某種程度上倒退了，但基於您概述的樂觀情緒以及進一步加息的潛力以及 25 年可能帶來的刺激，我想，您那裡有競爭力量。因此，也許只是您和董事會在 25 年從資本角度思考的一些初步想法。

Sure. Well, let me -- thank you for the question, Tim. Our CapEx for the remainder of this year is going to be -- and I know you're speaking to '25. It's going to be primarily replacement. Our growth capital is now spent for the year. So in Q4, we'll have replacement capital.

當然。好吧，讓我——謝謝你的提問，提姆。我們今年剩餘時間的資本支出將是——我知道你正在談論「25」。它將主要是替換。我們的成長資本現已用於今年。因此，在第四季度，我們將擁有重置資本。

We're in the middle of our budgeting process as we speak. So we're just not in a position to comment on CapEx, going forward. I can tell you that we're seeing better pricing for manufacturers in selected cases. So we'll get a little bit better rental power on what we do spend next year, but it's just really too early to comment.

正如我們所說，我們正處於預算編制過程中。因此，我們無法對未來的資本支出發表評論。我可以告訴你，在某些情況下，我們看到製造商可以享受更好的定價。因此，我們明年的支出將獲得更好的租金能力，但現在評論還為時過早。

Again, bear in mind, we're planning on 12 to 18 new locations in 2025. I think everyone's familiar with what we deploy in capital to open a location where they typically mature in the first full 12 months. Those locations are continuing to exceed our expectations. Again, we're going to the best markets we can find that independently are offering plenty of opportunity. But as far as '25 CapEx, it will be -- we'll be talking about that as we wrap the year up.

再次請記住，我們計劃在 2025 年開設 12 至 18 個新地點。我想每個人都熟悉我們為開設一個地點而部署的資本，通常在前 12 個月內就成熟了。這些地點繼續超出我們的預期。同樣，我們將進入我們所能找到的最好的市場，這些市場獨立地提供大量的機會。但就 25 年資本支出而言，我們將在年底時討論這個問題。

Got it. Okay. And, maybe just from the gleaning, what you may be able to from a time perspective. You're different, obviously being heavy in the earthmoving category, which, I think, tends to be a little bit more early cycle whereas aerials can tend to be utilized more later in a project life cycle. I'm just curious as to what you can or maybe can't glean in terms of where we are just across that construction cycle. If there are any notable trends you're seeing across utilization of your major product classes?

知道了。好的。而且，也許只是從收集到的信息來看，從時間的角度來看你可能能夠做到什麼。你是不同的，顯然在土方工程類別中很重，我認為，這往往是一個更早期的周期，而天線往往可以在專案生命週期的後期使用更多。我只是好奇你能或不能收集到我們在整個建設週期中的哪些資訊。您在主要產品類別的使用中是否發現了任何顯著的趨勢？

Yeah, we've actually seen earthmoving make some improvements year over year. That's a product where we've not invested as much in this calendar year as we have before, to your question. But it's showing nice signs of improvement. Traditionally or typically, it's our highest dollar utilization category. And at this point in time, I can tell you when we look forward to 2025, we're not looking unfavorably at any particular product and certainly earthmoving is going to continue to be an opportunity for us.

是的，我們實際上已經看到土方工程逐年取得了一些進展。對於你的問題，我們在今年對這個產品的投資沒有以前那麼多。但它顯示出良好的改善跡象。傳統上或通常來說，這是我們資金利用率最高的類別。此時此刻，我可以告訴你，當我們展望 2025 年時，我們不會對任何特定產品持不利態度，而且土方工程肯定將繼續成為我們的機會。

John, do you have anything to add to that?

約翰，你還有什麼要補充的嗎？

The only thing I would add, Tim, and to Brad's point, we have shown some improvement in earthmoving utilization. And while we don't give specifics on each and every product line that we cover, they're not all equal. I mean, obviously, there's -- we have different utilization levels with different product lines. But again, moving forward, 2025 is going to be interesting, but it is a good sign to see earthmoving not only improving but up on a year-over-year basis.

提姆，我唯一要補充的是，對於布拉德的觀點，我們在土方利用率方面取得了一些進步。雖然我們沒有詳細說明我們所涵蓋的每條產品線，但它們並不完全相同。我的意思是，顯然，我們對不同的產品線有不同的利用率。但同樣，展望未來，2025 年將會很有趣，但這是一個好兆頭，我們可以看到土方工程不僅有所改善，而且逐年上升。

All right. Maybe I'll sneak in one last one. On these new stores that you opened, you talked about typical 12- to 18-month misalignment as you kind of ramp up and the revenues lag the cost. As you've done more of it, you continue to do more of these. Is that shortening that time horizon, just as you -- there's some learnings along the way, maybe you become more efficient. Obviously, the market backdrop is a little softer. So I'm just curious if there's -- and maybe. it's a location by location thing. But if you've seen any trend in terms of that timeline as you bring on more of these new locations?

好的。也許我會偷偷溜進去最後一張。在您開設的這些新店中，您談到了典型的 12 至 18 個月的錯位，因為您的業務規模有所增長，並且收入落後於成本。當你已經做了更多的事情時，你會繼續做更多的事情。是不是縮短了時間範圍，就像你一樣——一路上學到了一些東西，也許你會變得更有效率。顯然，市場背景有些疲軟。所以我只是好奇是否有——也許有。這是一個逐個地點的事情。但是，當您引入更多這些新地點時，您是否在時間表方面看到了任何趨勢？

Yeah, we have seen the timeline compress. Years ago, we used to talk in terms of 18 to 24 months for these locations to operate it, kind of like business metrics, time utilization, maintenance costs, [what have you]. We've seen that compress. The thing that's been different for us since June of '23, in the last 17 months, we've opened 30 locations. And so on a base of locations that we started on, it's certainly been part of what weighs incrementally on our utilization and incrementally on our SG&A.

是的，我們已經看到時間軸被壓縮了。幾年前，我們常常談論這些地點的營運時間為 18 到 24 個月，有點像是業務指標、時間利用率、維護成本，[你有什麼]。我們已經看到了這種壓縮。自 2023 年 6 月以來，情況有所不同，在過去 17 個月裡，我們開設了 30 家門市。因此，在我們開始的地點基礎上，它無疑是逐漸影響我們的利用率和SG&A 的因素的一部分。

But to your question of how we progress, we're really comfortable in that 12 to 18 months. We're always looking to improve. But that's what we've grown to expect through our performance and improvements. And, of course, we look to shorten that as best possible. We're very comfortable that we can be productive and produce like business metrics, and they continue to grow over a number of years depending on the marketplace.

但對於你問的我們進展如何的問題，我們在這 12 到 18 個月裡真的很舒服。我們一直在尋求改進。但這就是我們透過我們的表現和改進所期望的。當然，我們希望盡可能縮短這一時間。我們非常滿意我們可以提高生產力並產生類似的業務指標，並且它們根據市場的情況在幾年內持續成長。

Alex Rygiel, B. Riley FBR.

亞歷克斯·里吉爾 (Alex Rygiel)，B. 萊利 (B. Riley) FBR。

Good morning. A couple of quick questions here. First up, can you expand upon your comment that there is a slight oversupply of certain types of equipment?

早安.這裡有幾個簡單的問題。首先，您能否詳細說明您對某些類型設備略有供應過剩的評論？

Just broadly, I mean, look, our utilization being down year over year is probably the best single indicator. We talked early in the year, and every quarter, we've been slightly disappointed. We always want more product on rent. That is a product of a slight oversupply of a variety of products. There's not one product type that we're personally well overweight on. Nor is there one product type that we think the overall industry is particularly overweight on. And you've seen everyone reduce their CapEx this year. Most folks who give CapEx guides have reduced somewhere between 30% and 40%. And we'll continue to do so until we think that supply overlap is gone.

總的來說，我的意思是，我們的利用率逐年下降可能是最好的單一指標。我們在今年年初進行了討論，每個季度我們都有點失望。我們總是希望出租更多產品。那是多種產品略有供給過剩的產物。我們個人並不重視任何一種產品類型。我們認為整個產業也沒有特別看重任何一種產品類型。您已經看到今年每個人都減少了資本支出。大多數提供資本支出指南的人都減少了 30% 到 40% 之間。我們將繼續這樣做，直到我們認為供應重疊消失。

But what we're really saying is for our utilization to go up, there needs to be a little bit more work or a little bit less supply. We think -- we know megaprojects are continuing to unfold. We are hopeful that we will see the interest rate reduction start to spur, the local market work pick up in the second half of next year. And in the interim, we're going to be very disciplined as our competitors and what we're purchasing.

但我們真正想說的是，為了提高利用率，需要多做一點工作或少一點供應。我們認為——我們知道大型專案正在繼續展開。我們希望明年下半年降息開始刺激本地市場工作回溫。在此期間，我們將像我們的競爭對手一樣嚴格遵守我們所採購的產品。

And then used equipment sales are down year over year, sequentially. Can you talk a bit about the strategy there that's driving that?

然後二手設備銷量逐年下降。您能談談推動這一趨勢的策略嗎？

It's really -- it's just basic fleet management. Looking at our fleet age under 41 months today, we just don't have the volume of equipment. That's aged out that we really need to get rid of. So really, that's the main reason. We have seen some softening obviously in certain categories for used equipment sales. Auction values have continued to decline. We think that they're going to be reaching a bottom soon. But while that's not our number one priority to sell fleet through auctions. It is one piece of the puzzle. We've seen some leveling off and some steadiness with retail and wholesale. But if there's one area that's been a little concerning, it would be auction values.

這其實只是基本的車隊管理。看看我們今天的機隊年齡不到 41 個月，我們只是沒有足夠的設備數量。它已經過時了，我們確實需要擺脫它。確實，這就是主要原因。我們發現某些類別的二手設備銷售明顯疲軟。拍賣價值持續下降。我們認為他們很快就會觸底。但這並不是我們透過拍賣出售機隊的首要任務。這是拼圖中的一小部分。我們看到零售和批發業有所趨於平穩和穩定。但如果有一個領域讓人有點擔心的話，那就是拍賣價值。

Katie Fleischer, KeyBanc Capital Markets.

凱蒂‧弗萊舍 (Katie Fleischer)，KeyBanc 資本市場。

Hey. Good morning, guys. I wanted to see if you could give any commentary on how end markets trended throughout the quarter. Sounds like local accounts are still pretty depressed. And you haven't quite seen any recovery there. But just curious if you saw any incremental, either improvement or decline as you move throughout the quarter.

嘿。早安，夥計們。我想看看您能否對整個季度終端市場的趨勢發表評論。聽起來本地帳戶仍然相當低迷。而且你還沒有看到任何復甦。但只是好奇，隨著整個季度的發展，您是否看到任何增量，無論是改善還是下降。

Yeah. Well, we saw incremental improvement. Our utilization was up 120 basis points quarter over quarter. We see certainly more strength as you just characterized with megaprojects and deploying more. I don't -- we have not seen any further degradation in our local markets, but it would be unfair to say that they're picking up at the same time. But quarter over quarter, that 120 basis point utilization improvement tells you that things continue to adjust easily and that there was greater opportunity. So I think we're pretty steady as we go from here forward.

是的。好吧，我們看到了漸進式的改進。我們的利用率較上季成長了 120 個基點。我們當然看到了更多的實力，因為您剛剛描述了大型專案並部署了更多專案。我不認為——我們沒有看到我們當地市場的任何進一步惡化，但說它們同時回升是不公平的。但每季相比，利用率提高了 120 個基點，這告訴您情況會繼續輕鬆調整，並且存在更多機會。所以我認為從現在開始我們的進展相當穩定。

Okay. And then my last question is just on used equipment margins. Those have been a little bit more resilient than I would have expected this year. Just curious how you're thinking about those going into next year. Is it fair to assume that you can continue that above 60% level, going forward?

好的。我的最後一個問題是關於二手設備的利潤。這些比我今年的預期更有彈性。只是好奇你如何看待明年的那些事。假設您可以繼續保持 60% 以上的水平，這樣公平嗎？

Yeah, I think 60% going forward is going to be challenging. As I mentioned, we have seen some softening in used equipment values. As far as next year, I mean, we've stated on previous calls that we do expect to be able to maintain that 50%-plus gross margin. The past several quarters, we've achieved north of 60%. That's more a reflection of the age of the fleet that we're selling.

是的，我認為 60% 的未來將具有挑戰性。正如我所提到的，我們看到二手設備價值下降。我的意思是，就明年而言，我們在先前的電話會議中已經表示，我們確實希望能夠維持 50% 以上的毛利率。過去幾個季度，我們已經實現了 60% 以上的目標。這更反映了我們所銷售的機隊的年齡。

I believe the fleet -- the age of our fleet sold in Q3 was about 75 months, which is on par with what it was in Q3 of the previous year. But looking forward, I mean, we're -- dispositions are going to be dependent upon what fleet comes -- meets our age criteria to sell within a particular quarter. So we still stand firm that we can achieve that 50%-plus gross margin, moving forward.

我相信機隊——我們在第三季度出售的機隊的年齡約為 75 個月，與去年第三季的年齡相當。但展望未來，我的意思是，我們的配置將取決於機隊的到來，以滿足我們在特定季度內銷售的年齡標準。因此，我們仍然堅定地認為，我們可以實現 50% 以上的毛利率，繼續前進。

(Operator Instructions) Showing no further questions. This concludes our question-and-answer session. I would like to turn the conference back over to Jeff Chastain for any closing remarks.

（操作員說明）沒有顯示更多問題。我們的問答環節到此結束。我想將會議轉回傑夫·查斯坦（Jeff Chastain）發表閉幕詞。

Okay, Gary. Well, thank you. We appreciate everyone taking the time to join us today and for your continued interest in H&E Rentals. We look forward to speaking with you again.

好的，加里。嗯，謝謝。我們感謝大家今天抽出時間加入我們，並感謝您對 H&E Rentals 的持續關注。我們期待再次與您交談。

Gary, thanks for the assistance on today's call. Good day, everyone.

加里，感謝您在今天的電話會議上提供的幫助。大家好。

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

謝謝。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。