McGrath RentCorp (MGRC) 2023 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the McGrath RentCorp First Quarter 2023 Earnings Call. (Operator Instructions) This conference call is being recorded today, Thursday, May 4, 2023.

女士們，先生們，謝謝你們的支持。歡迎來到 McGrath RentCorp 2023 年第一季度財報電話會議。 （操作員說明）今天，即 2023 年 5 月 4 日，星期四，正在錄製此電話會議。

Before we begin, note that the matters the company management will be discussing today, that are not statements of historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our full year 2023 financial outlook as well as statements relating to the company's expectations, strategies, prospects or targets. These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected. Important factors that could cause actual results to differ materially from the company's expectations are disclosed under Risk Factors in the company's Form 10-K and other SEC filings. Forward-looking statements are made only as of the date hereof, except as otherwise required by law. We assume no obligation to date to update any forward-looking statements. In addition to the press release issued today, the company also filed with the SEC the earnings release on Form 8-K and its Form 10-Q for the quarter ended March 31, 2023.

在我們開始之前，請注意，公司管理層今天將討論的事項不是歷史事實陳述，而是 1995 年《私人證券訴訟改革法案》意義上的前瞻性陳述，包括關於我們 2023 年全年財務展望的陳述以及與公司的期望、戰略、前景或目標相關的聲明。這些前瞻性陳述不是對未來業績的保證，涉及重大風險和不確定性，可能導致我們的實際結果與預期結果存在重大差異。可能導致實際結果與公司預期存在重大差異的重要因素在公司 10-K 表格和其他 SEC 文件中的風險因素下進行了披露。前瞻性陳述僅在本協議簽署之日作出，法律另有規定的除外。我們不承擔迄今為止更新任何前瞻性陳述的義務。除了今天發布的新聞稿外，該公司還向美國證券交易委員會提交了截至 2023 年 3 月 31 日止季度的 8-K 表及其 10-Q 表收益報告。

Speaking today will be Joe Hanna, Chief Executive Officer; and Keith Pratt, Chief Financial Officer.

今天發言的是首席執行官 Joe Hanna；和首席財務官 Keith Pratt。

I will now turn the call over to Mr. Hanna. Please go ahead, sir.

我現在將電話轉給漢納先生。請繼續，先生。

Thank you, Travis. Good afternoon, everyone. Thank you for joining us on our call today. We were very pleased with our first quarter, which was unlike any other in our history. I am incredibly proud of all that we accomplished to transform and grow McGrath. We divested Adler, a noncore asset, acquired Vesta Modular, a strategic target and worked on 2 tuck-in portable storage companies, Brekke storage, which we announced on March 3, and Dixie Temporary Storage, which we announced on April 3.

謝謝你，特拉維斯。大家下午好。感謝您今天加入我們的電話會議。我們對第一季度感到非常滿意，這與我們歷史上的任何其他季度都不一樣。我為我們為改造和發展 McGrath 所取得的一切成就感到無比自豪。我們剝離了非核心資產 Adler，收購了戰略目標 Vesta Modular，並在 3 月 3 日宣布的 Brekke storage 和 4 月 3 日宣布的 Dixie Temporary Storage 兩家便攜式存儲公司開展合作。

During the quarter, we also navigated the effects of unusual weather with flawless execution and delivered on a total company basis from continuing operations 31% higher total revenues and 23% higher adjusted EBITDA. I will begin my comments with Mobile Modular. We realized rental revenue growth in all of our geographic markets and growth in our market verticals was broad-based. Customers are continuing construction projects at a strong pace and we saw no evidence of a slowdown. On the education side, rental revenues grew 8% and we heard from school districts that modernization projects are being planned as expected and specifically in our growth markets, student population influx is continuing and driving demand on a consistent basis. The Portable Storage business continued to grow nicely with a 27% increase in rental revenues and the recent tuck-in acquisitions are integrating nicely and as planned.

在本季度，我們還通過完美的執行應對了異常天氣的影響，並在整個公司的基礎上從持續運營中實現了總收入增長 31% 和調整後 EBITDA 增長 23% 的目標。我將從 Mobile Modular 開始我的評論。我們實現了所有地理市場的租金收入增長，以及垂直市場的增長基礎廣泛。客戶正在以強勁的速度繼續建設項目，我們沒有看到放緩的跡象。在教育方面，租金收入增長了 8%，我們從學區聽說現代化項目正在按預期進行規劃，特別是在我們的增長市場，學生人數持續湧入並持續推動需求。便攜式存儲業務繼續良好增長，租金收入增長了 27%，最近的收購正在按計劃順利整合。

At Mobile Modular, for the quarter, our focus on consistent execution enabled us to increase pricing, deploy new equipment and improve utilization. We had very healthy rental rates on new shipments, which were 25% higher than first quarter 2022. As the fleet cycles, this rate differential works its way into the installed base increasing rates in total. The overall effect on the bottom line is an improvement in rental operations gross profit, which we achieved in the quarter. Noteworthy during the quarter for Mobile Modular and Portable Storage, our quote volumes were greater this quarter than in the same quarter last year and close ratios have remained consistent. We have not heard of any significant indications of a slowdown in projects planned from customers.

在 Mobile Modular，本季度，我們對一致執行的關注使我們能夠提高定價、部署新設備並提高利用率。我們的新出貨量租金率非常健康，比 2022 年第一季度高出 25%。隨著機隊週期的變化，這種費率差異會影響安裝基數的總體增長率。對底線的總體影響是我們在本季度實現的租賃業務毛利潤的改善。值得注意的是，本季度移動模塊化和便攜式存儲的報價量高於去年同期，成交率保持一致。我們沒有聽說客戶計劃的項目有任何放緩的跡象。

At TRS-RenTelco, the business had positive rental revenue growth, while we felt the effects of the computer semiconductor business slowdown as chip demand has softened worldwide. All our other market verticals were up for the quarter and quote volumes were above 2022. We have taken steps to mitigate the softer demand by emphasizing sales of equipment to improve utilization. We also felt the effects of incoming equipment that due to lead times had to be ordered well ahead of projected demand. The secondary sales market was healthy in the quarter, and we have put in place extra incentives for the sales team to move equipment. I'm confident in the steps the team is taking. We have managed cycles many times, so we are pulling appropriate levers to normalize our KPIs and to keep the business strong.

在 TRS-RenTelco，該業務的租金收入出現正增長，而我們感受到了全球芯片需求疲軟導致計算機半導體業務放緩的影響。本季度我們所有其他垂直市場均有所增長，報價量超過 2022 年。我們已採取措施，通過強調設備銷售以提高利用率來緩解需求疲軟。我們還感受到，由於交貨時間的原因，必須遠早於預計需求訂購進貨設備的影響。本季度二級銷售市場健康，我們為銷售團隊移動設備提供了額外的激勵措施。我對團隊正在採取的步驟充滿信心。我們已經多次管理週期，因此我們正在採取適當的手段來規範我們的 KPI 並保持業務強勁。

Turning back now to focus on the larger of the 2 divisions. We have shared on past calls that our strategic direction is to focus on growth in our modular business. With the completion of the Vesta acquisition as well as work on the 2 tuck-ins during the quarter, it should be clear that we are upholding that commitment. The Vesta acquisition provides an even greater platform for growth, giving us access to 13 additional markets as well as greater density in 15 others. The mix of commercial and education customers fits ideally with our installed base, and we can effectively integrate our operations for greater efficiency. We have been very impressed with the Vesta team as they have a depth of experience and customer focus that is a great culture fit with us.

現在回過頭來關注 2 個部門中較大的部門。我們在過去的電話會議上分享過，我們的戰略方向是專注於模塊化業務的增長。隨著 Vesta 收購的完成以及本季度 2 次收購的完成，很明顯我們正在堅持這一承諾。對 Vesta 的收購提供了一個更大的增長平台，使我們能夠進入另外 13 個市場，並在另外 15 個市場中獲得更大的密度。商業和教育客戶的組合非常適合我們的安裝基礎，我們可以有效地整合我們的運營以提高效率。 Vesta 團隊給我們留下了深刻的印象，因為他們擁有豐富的經驗和以客戶為中心的理念，這與我們的文化非常契合。

Turning to integration efforts. We are on schedule, and we've been pleased with the progress made in just a few short weeks since we closed the transactions. The teams have thoroughly planned the integration steps and we are in a rigorous schedule to ensure that all items are completed. To date, we are progressing as planned. Our first quarter financial results were in line with expectations. We have clear visibility on the most important items to get right, and I feel very confident that Vesta operations will be an important contributor to McGrath for 2023 and beyond.

轉向整合工作。我們按計劃進行，我們對在完成交易後短短幾週內取得的進展感到滿意。團隊已經全面規劃了集成步驟，我們正在製定嚴格的時間表以確保完成所有項目。迄今為止，我們正在按計劃進行。我們第一季度的財務業績符合預期。我們對最重要的項目有清晰的認識，我非常有信心 Vesta 業務將在 2023 年及以後為 McGrath 做出重要貢獻。

In our Portable Storage operations, we have achieved significant organic growth over the last few years. To expand our geographic coverage we pursued 2 notable tuck-ins to completion over the past few months. Brekke opens up the Colorado market with a fleet of 2,700 units, which is an excellent jump start for us in a vibrant and growing state. Dixie, which we completed just after the quarter end has a fleet of 800 units that will open up new geography in the South Carolina market, which is another growth area for us. Our pipeline of additional tuck-in acquisitions is robust, and we are continuing to execute our strategy. We see further opportunities to augment our strong organic growth with Portable Storage tuck-ins, and this can be an effective way to smartly deploy growth capital.

在我們的便攜式存儲業務中，我們在過去幾年中取得了顯著的有機增長。為了擴大我們的地理覆蓋範圍，我們在過去幾個月內完成了 2 次著名的收割活動。 Brekke 以 2,700 輛汽車開闢了科羅拉多市場，這對我們處於充滿活力和不斷發展的州來說是一個極好的開始。 Dixie 是我們在本季度末完成的，擁有 800 輛汽車，這將在南卡羅來納州市場開闢新的地理區域，這對我們來說是另一個增長區域。我們的額外收購渠道很強大，我們將繼續執行我們的戰略。我們看到了進一步的機會，可以通過便攜式存儲插件來增強我們強勁的有機增長，這可能是巧妙部署增長資本的有效方式。

On the modular building side, our capabilities tie into some of the large infrastructure projects that are underway in various locations across the U.S. We are well positioned to support these projects in the areas we operate. The acquisitions we completed over the past 2 years have provided a much larger geographic footprint and access to a greater customer base. Large projects are our specialty as we have a capable and experienced project management group that has been augmented with the Vesta acquisition. With our large inventory and production centers, unique in the industry, we can customize units to customer specifications, which is work we not only charge for, but also gain additional loyalty from customers as they get units tailored to their needs. This capability has been a hallmark of Mobile Modular for many years.

在模塊化建築方面，我們的能力與美國各地正在進行的一些大型基礎設施項目相關。我們有能力在我們運營的地區支持這些項目。我們在過去 2 年完成的收購提供了更大的地理足跡和更廣泛的客戶群。大型項目是我們的專長，因為我們擁有一支有能力且經驗豐富的項目管理團隊，該團隊在收購 Vesta 後得到了加強。憑藉我們在業內獨樹一幟的大型庫存和生產中心，我們可以根據客戶的規格定制設備，我們不僅對這項工作收費，而且在客戶獲得根據其需求量身定制的設備時，他們還會獲得額外的忠誠度。多年來，此功能一直是 Mobile Modular 的標誌。

Circling back to my opening statement, we were very pleased with our first quarter results and everything we accomplished in the business. This was a huge collective effort and I want to thank everyone at McGrath who went above and beyond to make this happen. We are off to a strong start for the year, and our outlook for the remainder of the year is positive. We are on full throttle execution to grow our modular business and the steps we took in the first quarter clearly demonstrate the organization has the capability to execute M&A, grow organically and deliver excellent results. We are confident in our outlook for 2023 and have raised guidance based on the performance of the business.

回到我的開場白，我們對第一季度的業績以及我們在業務中取得的一切成就感到非常滿意。這是一項巨大的集體努力，我要感謝 McGrath 的每一位為實現這一目標而付出的努力。我們今年開局良好，我們對今年剩餘時間的展望是積極的。我們正在全速執行以發展我們的模塊化業務，我們在第一季度採取的步驟清楚地表明該組織有能力執行併購、有機增長並取得出色的成果。我們對 2023 年的前景充滿信心，並根據業務表現提高了指引。

So now I will turn the call over to Keith, who will expand on my overall comments with greater financial detail.

所以現在我將把電話轉給基思，他將以更多的財務細節來擴展我的總體評論。

Thank you, Joe, and good afternoon, everyone. As Joe highlighted, we delivered strong results in the first quarter with healthy performance across the board. Our Mobile Modular segment saw notable contributions from the Vesta Modular acquisition with 2 months of performance included in our first quarter results. Additionally, our core rental businesses excluding the performance from our recent acquisitions, continued to reflect broad-based organic growth during the quarter. In my financial review today, I'm going to provide highlights from our first quarter results and specifics of our current outlook for full year 2023 performance.

謝謝你，喬，大家下午好。正如 Joe 強調的那樣，我們在第一季度取得了強勁的業績，整體表現良好。我們的移動模塊部門從收購 Vesta 模塊中獲得了顯著貢獻，我們第一季度業績中包含了 2 個月的業績。此外，我們的核心租賃業務（不包括我們最近收購的業績）在本季度繼續反映出廣泛的有機增長。在我今天的財務回顧中，我將提供我們第一季度業績的亮點以及我們目前對 2023 年全年業績展望的具體細節。

Before getting into my detailed comments, as a reminder, on February 1, we completed the acquisition of Vesta Modular and concurrent divestiture of Adler Tank Rentals. The effects of these transformational transactions were included in the first quarter results. As a result of the divestiture of our Adler Tanks business, the company recognized a net gain on the sale of discontinued operations of $58.9 million during the quarter, which was included in both income from discontinued operations and the company's combined net income for the period. The rest of my comments will be focused on results from continuing operations which excludes the impact from the Adler gain on sale and the income from the discontinued Adler operations.

在進入我的詳細評論之前，提醒一下，2 月 1 日，我們完成了對 Vesta Modular 的收購，並同時剝離了 Adler Tank Rentals。這些轉型交易的影響已包含在第一季度業績中。由於剝離了我們的 Adler Tanks 業務，公司在本季度確認了出售終止經營業務的淨收益 5890 萬美元，這包括在終止經營業務的收入和公司當期的合併淨收入中。我的其餘評論將集中在持續經營的結果上，不包括阿德勒銷售收益的影響和停止經營的阿德勒業務的收入。

Looking at the overall corporate results for the first quarter. Total revenues increased 31% to $163.7 million. The revenue increase was from both improved rental operations and sales revenues, with Mobile Modular and TRS-RenTelco, each growing rental revenues year-over-year. First quarter adjusted EBITDA increased 23% to $61.8 million, and consolidated adjusted EBITDA margin was 38%. Breaking the results down by rental division operating performance as compared to the first quarter of 2022, Mobile Modular had an impressive quarter with adjusted EBITDA increasing 40% to $42.4 million. Total revenues increased $36 million or 40% to $126.7 million. There were increases across all revenue streams, including 32% higher rental revenues, 43% higher rental-related services revenues and 70% higher sales revenues. Vesta contributed $17.6 million total revenue and $6.8 million adjusted EBITDA for the current quarter results.

看看第一季度的整體企業業績。總收入增長 31% 至 1.637 億美元。收入增長來自於租賃業務和銷售收入的改善，其中 Mobile Modular 和 TRS-RenTelco 的租金收入均同比增長。第一季度調整後 EBITDA 增長 23% 至 6,180 萬美元，合併調整後 EBITDA 利潤率為 38%。與 2022 年第一季度相比，按租賃部門的經營業績細分結果，Mobile Modular 的季度業績令人印象深刻，調整後的 EBITDA 增長 40% 至 4240 萬美元。總收入增加 3600 萬美元或 40% 至 1.267 億美元。所有收入流均有增長，其中租金收入增長 32%，租賃相關服務收入增長 43%，銷售收入增長 70%。 Vesta 為本季度業績貢獻了 1760 萬美元的總收入和 680 萬美元的調整後 EBITDA。

In addition to the contribution from the Vesta acquisition, our rental operations sustained strong organic growth across our commercial, education and Portable Storage customer bases. Sales revenues increased 70% or $7.2 million to $17.6 million, demonstrating progress with our initiative to grow modular sales projects. Vesta contributed $6 million of the total increase in sales revenues. We continued our disciplined fleet management and achieved average fleet utilization of 79.6%, up from 77.1% a year ago. This utilization achievement was accomplished while also growing our fleet and increasing average rental rates. With our strategic investment focus on modulars further supported by our recent acquisitions, the average fleet size for the quarter increased by $170 million or 17% and average equipment on rent increased by $160.5 million or 21% as we successfully improved utilization. The average monthly rental rate for the portfolio was 2.89%, which was 9% higher than a year ago and reflects our focus on pricing optimization as well as continued healthy market conditions.

除了 Vesta 收購的貢獻外，我們的租賃業務在我們的商業、教育和便攜式存儲客戶群中保持了強勁的有機增長。銷售收入增長了 70% 或 720 萬美元，達到 1760 萬美元，表明我們在發展模塊化銷售項目方面取得了進展。 Vesta 貢獻了 600 萬美元的銷售收入增長總額。我們繼續嚴格的車隊管理，平均車隊利用率從一年前的 77.1% 上升到 79.6%。在實現這一利用率成就的同時，我們還擴大了我們的車隊並提高了平均租金。由於我們最近的收購進一步支持了我們對模塊化的戰略投資重點，本季度的平均機隊規模增加了 1.7 億美元或 17%，並且由於我們成功提高了利用率，平均設備租金增加了 1.605 億美元或 21%。該投資組合的平均月租金率為 2.89%，比一年前高出 9%，反映出我們對定價優化的關注以及持續健康的市場狀況。

Higher rental revenues were partly offset by 29% higher inventory center costs and 21% higher depreciation expense, resulting in rental margins of 56%, up from 55% a year ago.

較高的租金收入部分被庫存中心成本增加 29% 和折舊費用增加 21% 所抵消，導致租金利潤率為 56%，高於一年前的 55%。

At TRS-RenTelco, adjusted EBITDA was $20.6 million, which was comparable to last year. Total revenues increased $2.6 million or 8% to $36.1 million. We saw increases in both rental operations and sales revenues. Rental revenues for the quarter increased 2%. We saw continued demand for both general purpose equipment and communications rentals, partly offset by softer demand from the computer semiconductor market. The average monthly rental rate was 4.14%, up 3% compared to a year ago. This higher average rental rate, coupled with comparable average equipment on rent reflects stable demand and pricing for both general purpose and communications equipment rentals. Average utilization for the first quarter was 59.2% compared to 64.6% a year ago and rental margins were 40% compared to 41% a year ago.

TRS-RenTelco 的調整後 EBITDA 為 2060 萬美元，與去年持平。總收入增加 260 萬美元或 8% 至 3610 萬美元。我們看到租賃業務和銷售收入都有所增長。本季度的租金收入增長了 2%。我們看到對通用設備和通信租賃的持續需求，部分被計算機半導體市場的疲軟需求所抵消。平均每月租金為4.14%，較一年前上升3個百分點。這種較高的平均租金率，加上可比較的平均設備租金，反映了通用和通信設備租賃的穩定需求和定價。第一季度的平均利用率為 59.2%，而一年前為 64.6%，租金利潤率為 40%，而一年前為 41%。

The decline in average utilization during the quarter reflects the softer demand from the computer semiconductor market as well as extended supply lead times for new equipment. Sales revenues increased 30% year-over-year to $5.1 million with gross profit increasing 19% to $2.9 million. The remainder of my comments will be on a total company basis from continuing operations.

本季度平均利用率的下降反映出計算機半導體市場的需求疲軟以及新設備的供應交貨期延長。銷售收入同比增長 30% 至 510 萬美元，毛利潤增長 19% 至 290 萬美元。我的其餘評論將基於持續運營的整個公司。

First quarter selling and administrative expenses increased $24.9 million to $57.5 million. The increase included $14.2 million in acquisition and divestiture-related transactions costs and $3 million of Vesta expenses. Interest expense was $7.5 million, an increase of $5.2 million as a result of higher average interest rates and $142.1 million higher average debt levels during the quarter, which was primarily the result of the funding of the Vesta and Brekke acquisitions. The fourth quarter provision for income taxes was based on an effective tax rate of 23.8% compared to 23.5% a year earlier.

第一季度銷售和管理費用增加 2490 萬美元至 5750 萬美元。增加額包括 1,420 萬美元的收購和資產剝離相關交易成本和 300 萬美元的 Vesta 費用。利息支出為 750 萬美元，增加了 520 萬美元，這是由於本季度平均利率上升和平均債務水平上升 1.421 億美元，這主要是收購 Vesta 和 Brekke 的資金所致。第四季度所得稅撥備基於 23.8% 的有效稅率，而去年同期為 23.5%。

Turning to our year-to-date cash flow highlights. Net cash provided by operating activities was $35.7 million compared to $51.7 million in the prior year with transaction expenses accounting for most of the reduction. Rental equipment purchases, excluding equipment received from the Vesta acquisition, were $77.7 million compared to $39.4 million in the prior year. With healthy modular demand pipelines and high fleet utilization, we have front-loaded some of our new rental equipment capital spending for the year. The total cash paid for acquisitions of Vesta and Brekke was $453.6 million, emphasizing our strategic initiatives to grow the modular segment. In addition to significant investments in new fleet and the acquisitions in the quarter, healthy cash generation allowed us to pay $11.4 million in shareholder dividends.

轉向我們年初至今的現金流亮點。經營活動提供的現金淨額為 3570 萬美元，上年同期為 5170 萬美元，減少的大部分是交易費用。租賃設備的購買，不包括從 Vesta 收購中收到的設備，為 7770 萬美元，而上一年為 3940 萬美元。憑藉健康的模塊化需求管道和高機隊利用率，我們提前加載了今年的一些新租賃設備資本支出。為收購 Vesta 和 Brekke 支付的現金總額為 4.536 億美元，強調了我們發展模塊化細分市場的戰略舉措。除了對新機隊的重大投資和本季度的收購外，健康的現金生成使我們能夠支付 1140 萬美元的股東股息。

At quarter end, we had net borrowings of $658.8 million comprised of $100 million notes outstanding and $558.8 million under our credit facility with capacity to borrow an additional $91.2 million under our lines of credit. The ratio of funded debt to the last 12 months actual adjusted EBITDA was 2.2:1.

截至季度末，我們的淨借款為 6.588 億美元，包括 1 億美元的未償票據和 5.588 億美元的信貸額度，並有能力根據我們的信貸額度再藉入 9120 萬美元。融資債務與過去 12 個月實際調整後 EBITDA 的比率為 2.2:1。

Finally, turning to our updated 2023 financial outlook. For the full year, we are increasing our outlook and currently expect results from continuing operations to be total revenue between $790 million and $820 million. Adjusted EBITDA between $300 million and $315 million. Gross rental equipment capital expenditures between $190 million and $210 million. Please note that our adjusted EBITDA outlook excludes transaction costs related to the Vesta acquisition and Adler divestiture. And also excludes the income from discontinued operations and the gain on sale from the Adler divestiture. We're very proud of McGrath's strong first quarter performance. As we look ahead for the remainder of the year, we will be working hard to integrate the acquired businesses while staying focused on furthering our modular growth strategies.

最後，轉向我們更新的 2023 年財務展望。對於全年，我們提高了預期，目前預計持續經營的總收入將在 7.9 億美元至 8.2 億美元之間。調整後的 EBITDA 在 3 億美元至 3.15 億美元之間。租賃設備資本支出總額在 1.9 億美元至 2.1 億美元之間。請注意，我們調整後的 EBITDA 展望不包括與 Vesta 收購和 Adler 資產剝離相關的交易成本。並且還不包括終止經營業務的收入和阿德勒資產剝離的銷售收益。我們為 McGrath 第一季度的強勁表現感到非常自豪。展望今年剩餘時間，我們將努力整合收購的業務，同時繼續專注於進一步推進我們的模塊化增長戰略。

That concludes our prepared remarks. Travis, you may now open the lines for questions.

我們準備好的發言到此結束。特拉維斯，你現在可以打開問題熱線了。

(Operator Instructions) We do have a question from Scott Schneeberger with Oppenheimer.

（操作員說明）我們確實有 Scott Schneeberger 和 Oppenheimer 提出的問題。

I have a few questions. I'd like to start out, I guess, on Mobile Modular, it sounds like the pricing was quite strong. Could you speak, I guess, Keith, a little bit more specifically to each of the asset -- the key asset classes, their categories, commercial, education and portable. It sounds like broad-based strong but more some places than others. Just kind of curious what you are seeing there and sustainability?

我有幾個問題。我想從 Mobile Modular 開始，聽起來定價相當高。我想，基思，你能否更具體地談談每項資產——關鍵資產類別、它們的類別、商業、教育和便攜式。這聽起來像是基礎廣泛的強大但有些地方比其他地方更多。只是有點好奇你在那裡看到了什麼和可持續性？

Yes, Scott, Joe remarked, the 25% lift on modular deliveries year-over-year. We're seeing strong pricing there. I would say the comment is, overall, very strong pricing. We've put a lot of technology to work, a lot of new disciplines in how we price over the last few years. That continues to yield benefit for us in the market. And I would say all that toolkit is used across the board. As you know, when we run the business, we're balancing, putting fleet to work with getting attractive pricing. And our goal is to achieve overall good economic returns on the capital that we're managing. And you really see this with ongoing gains on the pricing front as well as really strong utilization.

是的，Scott，Joe 評論道，模塊化交付量同比增長了 25%。我們在那裡看到了強勁的定價。我想說的是，總的來說，定價非常高。在過去的幾年裡，我們已經將大量技術投入使用，在定價方面採用了許多新規則。這繼續為我們在市場上帶來好處。我會說所有的工具包都被廣泛使用。如您所知，當我們經營業務時，我們正在平衡，讓車隊與獲得有吸引力的價格一起工作。我們的目標是在我們管理的資本上實現整體良好的經濟回報。你真的看到了這一點，定價方面的持續收益以及非常高的利用率。

And I would point out our utilization, it was down slightly from the fourth quarter. That's a function of the Vesta fleet that we added, which was not quite as highly utilized as our legacy modular fleet. So I do want to keep that in focus as well. Very good achievements by the business, strong gains on pricing, very healthy utilization and absorbing the best of fleet.

我要指出我們的利用率，它比第四季度略有下降。這是我們添加的 Vesta 艦隊的一個功能，它的利用率不如我們的傳統模塊化艦隊。所以我也想關注這一點。業務取得了非常好的成績，定價收益強勁，利用率非常高，吸收了最好的船隊。

Scott, I'll just chime in there to really quick. We saw nice pricing in -- for a new fleet that's going out. We saw nice pricing increases there for both modulars and Portable Storage. So in both of those parts of the business.

斯科特，我很快就會插話。我們看到了不錯的定價——對於即將推出的新機隊。我們看到模塊化和便攜式存儲的價格都出現了不錯的上漲。所以在業務的這兩個部分。

Excellent. I have a few more here. Could you guys -- probably, Joe, could you speak to the classroom environment, particularly California, but across your geographies. In your prepared remarks, sounds like that's still strong. It was good to hear weather did not really -- it's obviously a lot of your geographies endured some tough weather, but it sounds like you handled that very well in the quarter. But back to the core of the question, how is the classroom outlook for this year, sounds good, but if you can go in a little deeper, I would appreciate it.

出色的。我這裡還有一些。伙計們，喬，你們能不能談談課堂環境，尤其是加利福尼亞州，但要跨越你們的地域。在你準備好的發言中，聽起來仍然很強大。很高興聽到天氣不是真的——很明顯你們的很多地區都經歷了一些惡劣的天氣，但聽起來你們在本季度處理得很好。但回到問題的核心，今年的課堂前景如何，聽起來不錯，但如果你能深入一點，我將不勝感激。

Yes. The classroom outlook is good, and that really ties back to funding in California since you asked about that specifically. The vast majority of local bond measures that get put out to voters get passed. And that's continued to happen over the last several election cycles, and there's money out there available. And so what we're seeing is even with shifting of population in California, we're seeing a lot of activity on the Central Valley right now, where there's growth in student population that's taking place. And so that's been very good.

是的。課堂前景很好，這真的與加州的資金有關，因為你專門問過這個問題。向選民推出的絕大多數地方債券措施都獲得通過。在過去的幾個選舉週期中，這種情況一直在發生，而且那裡有可用的資金。因此，我們所看到的是，即使在加利福尼亞州人口轉移的情況下，我們現在也看到中央山谷有很多活動，那裡的學生人數正在增長。所以這非常好。

Way over on the East Coast, as an example, in some states that have typically been a little bit slower for us, we're actually seeing a lot of money be deployed right now. North Carolina, as an example, they just haven't done much lately and they're actually really starting to spend money on growth because that's a nice growth state, people are moving there, and they're realizing that their facilities scheduling is behind and they need to get more schools built. So that's been a good environment for us. Florida really doing well down there. So it's just been a good environment, and we're -- we have a good outlook for this year in terms of classroom placements.

例如，在東海岸，在一些對我們來說通常有點慢的州，我們實際上看到現在部署了很多錢。舉個例子，北卡羅來納州，他們最近沒有做太多事情，他們實際上真的開始在增長上花錢，因為這是一個很好的增長狀態，人們正在搬到那裡，他們意識到他們的設施調度落後了他們需要建造更多的學校。所以這對我們來說是一個很好的環境。佛羅里達州確實做得很好。所以這是一個很好的環境，而且我們 - 我們對今年的課堂佈置有很好的展望。

Sounds good. Still in Mobile Modular, just curious an update on site-related services and Mobile Modular Plus, still early stages in both, a little bit more advanced in site-related services. But just how are you progressing there? I don't know that you've quantified or broken out that component, but anything qualitative you could share would be great.

聽起來不錯。仍然在 Mobile Modular 中，只是好奇站點相關服務和 Mobile Modular Plus 的更新，兩者都還處於早期階段，在站點相關服務方面更先進一些。但你在那裡進展如何？我不知道您是否已經量化或分解了該組件，但是您可以分享任何定性的東西都會很棒。

Yes. We have not broken that out at this point, but we're seeing growth in both of those areas as well as our custom sales that we've been emphasizing. So we're still really got the accelerator down on those things. It's emphasized and important to the division to grow those initiatives, and that's what's happening. So we're very pleased with all of the metrics that we're seeing from both the Mobile Modular Plus and site-related services, so all up and to the right.

是的。我們目前還沒有打破這一點，但我們看到這兩個領域以及我們一直強調的定制銷售都在增長。所以我們仍然真的在這些事情上加速了。該部門強調並重要的是發展這些計劃，這就是正在發生的事情。因此，我們對我們從 Mobile Modular Plus 和站點相關服務中看到的所有指標感到非常滿意，所有這些指標都是正確的。

A few more here. One, in TRS, it sounded like from your commentary, you ordered ahead of time, I guess, supply chain constraints anticipating certain demand that may not have arisen. It sounds like semiconductor specifically. But you said you've incentivized your sales team to rightsize the fleet appropriately. It sounds like that's foreshadowing of even more challenging utilization levels to come. Is that how we should interpret that? Or is this something that is a shorter-term speed bump that you're going to navigate through successfully and move beyond quickly?

這裡還有一些。第一，在 TRS 中，從你的評論中聽起來，你提前訂購了，我猜，供應鏈限制預期可能沒有出現的某些需求。聽起來特別像半導體。但是您說您已經激勵您的銷售團隊適當調整機隊規模。聽起來這預示著更具挑戰性的利用率水平即將到來。我們應該這樣解釋嗎？或者這是一個短期的減速帶，您將成功通過并快速超越？

Yes, Scott, it's a good question. Here's what's interesting about what's happening right now. When we look at our quote volumes, we look at our activity on our website, specifically TRS because I checked into this, it's actually quite healthy. And our -- actually, our pipeline right now is over 10% higher than it was at the same time last year in the first quarter. So it's really encouraging to see those indicators out there. And the semiconductor softness we just have to manage through it. Hopefully, it's not something that's going to be pervasive for an extended period here. But we have had some fleet come in that we ordered in the fourth quarter that hit our shelves. And if we don't see us having a good eyesight on moving that equipment out for rental opportunities, we're going to sell it.

是的，斯科特，這是個好問題。以下是目前正在發生的事情的有趣之處。當我們查看我們的報價量時，我們會查看我們網站上的活動，特別是 TRS，因為我對此進行了檢查，它實際上非常健康。而我們 - 實際上，我們現在的管道比去年同期第一季度高出 10% 以上。所以看到這些指標真的很令人鼓舞。我們只需要通過它來管理半導體的軟性。希望這不會在很長一段時間內普遍存在。但是我們已經收到了一些我們在第四季度訂購的艦隊，這些艦隊已經上架了。如果我們看不到我們有足夠的眼光將這些設備移出出租機會，我們將出售它。

And like I said in my prepared comments, we've incented the sales force to do that, and that's exactly what's taking place. And that really kicked off in early April. So I see this as a cycle for us. We've managed these types of things before, and I think we're well prepared to continue to do that. So I'm not overly concerned about it.

就像我在準備好的評論中所說的那樣，我們已經激勵銷售人員這樣做，而這正是正在發生的事情。這真的在 4 月初開始。所以我認為這對我們來說是一個循環。我們以前處理過這些類型的事情，我認為我們已經做好了繼續這樣做的準備。所以我並不過分擔心它。

Scott, one way you can maybe think about the electronics business is in normal healthy times. Good utilization in that business is in the mid-60s. That's really good. I think with COVID and the disruption to ordering equipment and the extended lead times, as you commented, it's harder on our team to get exactly the right product on the shelf, so to speak, in a timely fashion. You have to make estimates much further ahead of the point of demand. So we've seen utilization drop more to the low 60s level. And I think that's probably an appropriate level with the disruptions to supply lead times. And when we saw it drop below 60, that's just not common for us, and that's why Joe described the kinds of actions that we take.

斯科特，您可以考慮電子業務的一種方式是在正常健康時期。該業務的良好利用率是在 60 年代中期。這非常好。我認為，由於 COVID 和訂購設備的中斷以及交貨時間的延長，正如您所評論的那樣，我們的團隊很難及時將正確的產品放在貨架上。您必須在需求點之前做出更遠的估計。所以我們看到利用率下降到 60 年代的低水平。而且我認為這可能是供應提前期中斷的適當水平。當我們看到它降至 60 以下時，這對我們來說並不常見，這就是為什麼喬描述了我們採取的各種行動。

It does take a few quarters to work through a situation like that. It just means we're not running the business, I'd say, at our optimum level because we've got one portion of the market, which has got weaker demand than we typically would expect.

解決這樣的情況確實需要幾個季度。這只是意味著我們沒有以最佳水平經營業務，因為我們佔據了市場的一部分，其需求比我們通常預期的要弱。

That's helpful color. I want to turn it now to front-loading the CapEx. Could you delve in a little bit more to where that allocation is going? Clearly, overall robustness. So I could probably guess, but Keith, could you share the kind of magnitude of full year expectations, how you're thinking about CapEx for the full year and the cadence?

這是有用的顏色。我現在想把它轉為預先加載資本支出。您能否更深入地研究分配的去向？顯然，整體穩健性。所以我可能會猜到，但是基思，你能否分享一下全年預期的規模，你如何看待全年的資本支出和節奏？

Sure. A couple of things, Scott. First thing is our overall CapEx plans for the year. At this point, we haven't made a change. If you look at the guidance, the initial range we gave in February, $190 million to $210 million, that remained the same in our update. We have front-loaded, and you can see that in the cash flow statement. The vast majority of the spend is going into the modular segment. And within that segment, it's more heavily weighted on the modular building side, although we're still funding Portable Storage very enthusiastically as well. There's still good opportunity there.

當然。有幾件事，斯科特。首先是我們今年的總體資本支出計劃。在這一點上，我們還沒有做出改變。如果您查看指南，我們在 2 月份給出的初始範圍為 1.9 億美元至 2.1 億美元，在我們的更新中保持不變。我們已經提前加載，您可以在現金流量表中看到這一點。絕大部分支出都用於模塊化領域。在該細分市場中，它更側重於模塊化構建方面，儘管我們仍然非常熱情地資助便攜式存儲。那裡仍然有很好的機會。

On the modular building side, we're supporting both the commercial side and the education side. We've seen very good market opportunities on the commercial side. And I would say that the new CapEx is being tilted more towards markets where we're still growing the business and essentially gaining share. So if you think of the design space acquisition that opened up a presence in a lot of the Western states, we're now in those markets for a couple of years, and we've seen a lot of opportunity to grow and add capital in an attractive manner. And that's what we're doing, and that's where we're continuing to invest.

在模塊化建築方面，我們支持商業方面和教育方面。我們在商業方面看到了非常好的市場機會。我要說的是，新的資本支出更傾向於我們仍在發展業務並從根本上獲得份額的市場。因此，如果你想到在許多西方國家開闢業務的設計空間收購，我們現在已經進入這些市場幾年了，我們已經看到了很多增長和增加資本的機會一種有吸引力的方式。這就是我們正在做的，也是我們繼續投資的地方。

And similarly, some of the East Coast markets, Joe referenced North Carolina, as an example. Those are markets where we've been in the region for a while, but we haven't really reached our targeted level of presence. And so those are still long-term growth markets for McGrath and we're still in a prudent way, continuing to invest in the market, add equipment where we see the right opportunity. So this is all part of the longer-term strategy. The level of CapEx in what I'd call our very strong legacy markets is not as big a factor. We already have a lot of equipment in California. We have a very good presence there. But the balance is more on those growth markets, markets where we still have a lot of opportunity to take on a bigger role in the market.

同樣，一些東海岸市場，喬以北卡羅來納州為例。這些是我們在該地區已經存在一段時間的市場，但我們還沒有真正達到我們的目標水平。因此，對於 McGrath 來說，這些市場仍然是長期增長的市場，我們仍然以謹慎的方式繼續投資市場，在我們看到合適機會的地方增加設備。所以這都是長期戰略的一部分。在我稱之為非常強大的傳統市場中，資本支出水平並不是一個重要因素。我們在加州已經有很多設備。我們在那裡有很好的存在。但平衡更多地放在那些增長市場上，我們仍然有很多機會在市場上發揮更大作用的市場。

Sounds good. Congrats on your multiple acquisitions of -- acquisitions off late and the strong start to the year. I'll turn it over.

聽起來不錯。祝賀你的多次收購——收購遲到，今年開局強勁。我會把它翻過來。

Thank you, Scott.

謝謝你，斯科特。

Thank you.

謝謝。

Our next question comes from Marc Riddick with Sidoti.

我們的下一個問題來自 Marc Riddick 和 Sidoti。

So I wanted to -- and this is actually kind of a question I almost never asked, but I sort of was curious about given it's encouraging that you guys weren't hit with the weather given kind of almost everybody else was. I was sort of curious, though, as to maybe from an opportunistic standpoint, we've seen extreme weather, not just in California, but other parts of the country. So I wondered if you had any thoughts on whether or not that could either boost a little demand for classrooms, whether there's anything that could end up being an opportunity from what you're seeing there relative to maybe prior years?

所以我想——這實際上是一個我幾乎從未問過的問題，但我有點好奇，因為令人鼓舞的是你們沒有受到天氣的影響，而幾乎其他人都受到了天氣的影響。不過，我有點好奇，也許從機會主義的角度來看，我們已經看到了極端天氣，不僅在加利福尼亞，而且在這個國家的其他地方。所以我想知道你是否有任何想法，這是否會增加對教室的一點需求，是否有任何事情最終會成為你在那裡看到的相對於前幾年的機會？

Marc, if it's tied to weather, I wouldn't say there's anything really, really significant that's taking place. In California, just as an example, there were certain areas that got flooded. Now that had a tendency to kind of push some construction projects and things like that. But -- and I think that we did get some school opportunities there because of flooding that took place. But overall, kind of the weather is an event and we deal with that particular event when it happens and then we move on. So I'm not seeing any kind of long-term effects that would affect the business at this point.

馬克，如果它與天氣有關，我不會說正在發生任何非常非常重要的事情。舉個例子，在加利福尼亞州，某些地區被洪水淹沒了。現在有一種推動一些建設項目和類似事情的趨勢。但是——我認為由於發生了洪水，我們確實在那裡獲得了一些上學機會。但總的來說，某種天氣是一個事件，當它發生時我們會處理該特定事件，然後我們繼續前進。所以我目前沒有看到任何會影響業務的長期影響。

Okay. Great. And then -- so I wanted to shift gears a little bit. We haven't had a chance to talk as much about. It's been a, I guess, now about a year -- a little over a year, I guess, now. Actually, I guess, more than a year, the time flies, since the Design Space and Kitchens To Go. So I was wondering if you could sort of give an update on that because you did make mention of sort of some of the learnings that took place particularly with Design Space. And sort of how that would play into the integration efforts with Vesta. So, maybe you could give a bit of an update there.

好的。偉大的。然後 - 所以我想稍微改變一下。我們還沒有機會談那麼多。我想，現在已經過去了大約一年——我想，現在已經一年多一點了。實際上，我想，自從設計空間和廚房開始以來，時間過得真快。所以我想知道您是否可以對此進行更新，因為您確實提到了一些特別是在 Design Space 中學到的東西。以及這將如何影響與 Vesta 的整合工作。所以，也許你可以在那裡提供一些更新。

Yes. It's a good question, Marc. When we closed Design Space, McGrath actually hadn't completed a transaction of that size really ever. And so we -- what I like to refer to the team is that you have to develop muscle tone for certain things like this. And we actually hadn't developed that muscle tone. And so we went through some learning there as we acquired that business and integrated it into our systems. And I think from that experience, we have a really good process that we developed for Vesta. And I think we're coming into that acquisition more organized and with a more clear understanding of what we need to get and when we need to get it.

是的。這是個好問題，馬克。當我們關閉 Design Space 時，McGrath 實際上從未真正完成過如此規模的交易。所以我們——我想對團隊說的是，你必須為這樣的某些事情發展肌肉張力。我們實際上還沒有發展出那種肌肉張力。因此，當我們收購該業務並將其集成到我們的系統中時，我們在那裡進行了一些學習。我認為從那次經歷中，我們為 Vesta 開發了一個非常好的流程。而且我認為我們正在更有條理地進行收購，並且更清楚地了解我們需要獲得什麼以及何時需要獲得它。

And I'm really happy about that, and it's working out very nicely for us. We've got very organized processes. We know exactly what we need to do. The team is really highly oriented on getting it done. And I think we've really developed much better muscle tone there. And so we've learned a lot, and we're deploying all those learnings into the Vesta acquisition and integration. So that's why I'm very pleased that it's going well so far.

我對此感到非常高興，而且對我們來說效果很好。我們有非常有條理的流程。我們確切地知道我們需要做什麼。團隊非常專注於完成它。而且我認為我們確實在那裡發展了更好的肌肉張力。所以我們學到了很多東西，我們正在將所有這些知識部署到 Vesta 的收購和整合中。所以這就是為什麼我很高興它到目前為止進展順利。

Great. And then I know we sort of discussed this a little bit, I guess. But I wanted to sort of highlight the acquisitions that were done sort of since the Vesta and Adler divestitures. I wanted to talk a little bit about sort of that expansion geographically and the various footprints that you've added with those 2 acquisitions and then maybe sort of -- is there sort of a general target as to some key markets that you might want to get into that you're not in? Or is -- are there sort of lead areas that you would sort of highlight as to where you really want to be in? And conversely, are there places you don't necessarily want to be as far as how you expand throughout the country?

偉大的。然後我知道我們對此進行了一些討論，我猜。但我想強調自 Vesta 和 Adler 資產剝離以來進行的收購。我想談談那種地理上的擴張，以及你通過這兩次收購增加的各種足跡，然後可能是——對於你可能想要的一些關鍵市場，是否有一個總體目標？進入你不在的地方？或者是 - 是否有一些領先領域，你會強調你真正想要進入的地方？相反，就您在全國范圍內的擴張方式而言，是否有您不一定想去的地方？

Yes. So the great thing about tuck-ins, especially in markets where we do not have a presence is it is a complete jump start. You get the equipment, you get some personnel typically, you get a facility that you can jump start and expand from. And so with the Brekke acquisition, as an example, we really didn't have much of a presence in Colorado. That really gets us a presence there, jumps starts us there, gets us with a good customer list and a good -- gets us in with a company that has a good reputation. And so off we go.

是的。因此，參加活動的好處在於，特別是在我們沒有涉足的市場中，這是一個完整的開始。你得到了設備，你通常得到了一些人員，你得到了一個可以快速啟動和擴展的設施。因此，以收購 Brekke 為例，我們在科羅拉多州的影響力並不大。這真的讓我們在那裡佔有一席之地，讓我們在那裡開始，讓我們擁有一個好的客戶名單和一個好的 - 讓我們進入一家享有良好聲譽的公司。所以我們走了。

And so we look for those opportunities and our list of potential acquisitions that we have is quite long, and it's a complete bonus when we get to open up a new area like we did with Brekke and we did with Dixie. Now that always doesn't happen. Sometimes somebody may come for sale in an area that we're already operating in. And that's actually a plus 2. We can get it for the right price because it increases our density and brings with it new customers. And so all these tuck-ins that we're taking a look at right now and the 2 that we pull the trigger on quite happy with, and we'd like to do more.

因此，我們尋找這些機會，我們擁有的潛在收購清單很長，當我們像對 Brekke 和 Dixie 所做的那樣開闢一個新領域時，這是一個完整的獎勵。現在這總是不會發生。有時有人可能會在我們已經開展業務的地區進行銷售。這實際上是加 2。我們可以以合適的價格獲得它，因為它增加了我們的密度並帶來了新客戶。因此，我們現在正在研究的所有這些插件以及我們非常滿意地扣動扳機的 2 個插件，我們想做更多。

Yes. If I could just add to that. We come across a lot of good local operators at some of whom have built really good quality fleets. And when there's a situation where those operators are considering selling the business, when we look at the ones that are attractive to us, a number of things really start to happen. One is we've got to do the deal with the right economics for both parties. But under McGrath's ownership, all the tools that Joe's described, we bring to bear on that new operation. So we can look at pricing optimization, we can look at adding additional services like Mobile Modular Plus some of the offerings to put inside the box. And for good operators in a good market with our backing, we can generally grow the presence in that market. So they give us more places to deploy growth capital. We've done a few of these over the years, not many. Most of our growth in Portable Storage was completely organic, but we've been seeing this is a way to add to it.

是的。如果我可以添加到那個。我們遇到了很多優秀的本地運營商，其中一些已經建立了非常優質的車隊。當這些運營商考慮出售業務時，當我們查看對我們有吸引力的業務時，許多事情就會真正開始發生。一是我們必須以對雙方都有利的經濟方式來達成協議。但在 McGrath 的領導下，Joe 描述的所有工具，我們都用於新操作。所以我們可以看看定價優化，我們可以看看添加額外的服務，比如 Mobile Modular Plus 一些產品放在盒子裡。對於有我們支持的好市場中的好運營商，我們通常可以擴大在該市場的影響力。所以他們給了我們更多的地方來部署增長資本。這些年來，我們已經完成了其中一些，但並不多。我們在便攜式存儲方面的大部分增長完全是有機的，但我們一直看到這是一種增加它的方式。

Ladies and gentlemen, that appears to be the last question. Let me now turn the call back over to Mr. Hanna for any closing remarks.

女士們，先生們，這似乎是最後一個問題。現在讓我把電話轉回給漢納先生，聽取任何結束語。

I'd like to thank everyone for joining us on the call today and for your continuing interest in our company. We look forward to speaking with you again in late July to review our second quarter results.

我要感謝大家今天加入我們的電話會議，感謝您對我們公司的持續關注。我們期待在 7 月下旬再次與您交談，回顧我們的第二季度業績。

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

女士們，先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。