CTOS - NYSE

Ladies and gentlemen, thank you for standing by and welcome to Custom Truck One Source's Second Quarter 2024 Earnings Conference Call. Please note, this conference call is being recorded. I'd like to hand the conference call over to your host today, Brian Perman, Vice President of Investor Relations for Custom Truck. Please go ahead.

Thank you. Before we begin, we would like to remind you that management's commentary and responses to questions on today's call may include forward-looking statements, which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For discussion of some of the factors that could cause actual results to differ, please refer to the risk factor section of the company's filings with the SEC. Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during the call in the press release we issued today. That press release in our quarterly investor presentation are posted on the Investor Relations section of our website. We filed our second quarter 2024 10Q with the SEC this afternoon. Today's discussion of our results of operations, Custom Truck One Source Inc. or Custom Truck, is presented on a historical basis as of or before the three months ended June 30th, 2024, and prior periods. Joining me today are Ryan McMonagle, CEO; and Chris Eperjesy, CFO. I will now turn the call over to Ryan.

Thanks Brian and welcome everyone today's call. Since we closed the combination of Custom Truck and Nesco about three and a half years ago, our management team and our employees have all worked tirelessly to combine the two businesses to pursue an aggressive growth strategy through substantial investment in the business and to grow our production operations, all while providing unparalleled service to our customers. We have achieved these goals against the backdrop of strong secular tailwinds, driving robust demand in our end markets, as well as the impact of COVID and its subsequent effect on the global supply chain. Since merging the two businesses, we have added more than $393 million of revenue and more than $85 million of adjusted EBITDA on an LTM basis. While we delivered sequential revenue and adjusted EBITDA growth in the second quarter, we are not satisfied with our financial results in the first half of the year, and we know that they're not indicative of the earnings potential of our overall business. We continue to see healthy demand in our infrastructure, rail, and telecom end markets, which all contributed to continued strong performance in our TES segment in Q2. High levels of demand for certain products like our specialty dump trucks, roll off trucks, hydro excavators, and water trucks supports our belief that overall demand within TES is being positively impacted by the early stages of the deployment of federal infrastructure investment and JOBS Act dollars for infrastructure projects. As we've discussed before, approximately 60% of our revenue comes from the utility end market, which includes both transmission and distribution work. We continue to observe significant growth in electricity demand driven by manufacturing on shoring, AI-driven data center development, current electrification trends, as well as the deferred maintenance that is required on the country's aging grid. Transmission line development and regional interconnection continue to be the bottlenecks in meeting this future energy demand and there is a significant backlog of transmission projects that are ready to go. However, the utility markets have been meaningfully impacted in recent quarters as supply chain issues, continued high interest rates, and regulatory approval delays have all contributed to project delays, which can be seen in the low number of transmission line miles completed. Once these issues get resolved, the forecasted load growth demand provides strong tailwinds for future growth across our entire business. Additionally, we have seen and our customers have confirmed a broad base slowdown in construction spending around electric distribution resulting from lower IOU CapEx and maintenance spend management. While these trends impacted our results in the second quarter, we believe these will normalize and expect them to improve in the second half of the year and into 2025. Our TES segment delivered sequential revenue growth of more than 3% in the quarter, and revenue is up 6% year-to-date versus the same period in 2023 after more than 30% year-over-year growth in the first six months of last year. As I just mentioned, growth in the TES segment has been led by increased spending in our infrastructure, telecom, and rail end markets, resulting in net orders in the quarter showing an improvement versus Q1. While segment gross margin is down slightly both year-over-year and sequentially, it remains within our expected range and represents a substantial improvement since the close of the combination with Nesco. Our significant inventory investment last year has positioned us to meet the continued strong customer demand for new equipment sales and also allows us to grow our fleet to quickly serve our customers' rental and rental asset sales needs when demand returns to our core utility end market. We continue to closely follow the upcoming chassis emission regulations and are well-positioned for the anticipated demand increase resulting from the change in emission standards that is coming between now and 2027. The entire TES team continues to perform extremely well and to deliver production near record levels, something the entire organization is very proud of. Chris will walk through the details of the performance of our ERS segment, which continue to see strong utilization rates in the mid-70% to high 80% range for all end markets other than the transmission portion of utility. We are actively tracking transmission project starts, IOU rate-based approvals, and are in regular communication with our customers about their expectations for the remainder of 2024 and 2025. Based on this, we have growing confidence that the slowdown in the utility end market is indeed temporary and should begin to reverse itself in the next few quarters. We are already seeing signs of improvement in our ERS segments so far in the third quarter, particularly in fleet utilization and OEC on rent. Our rental CapEx plan for the second half of the year reflects investment in our fleet to meet demand across our end markets with a focus on those sectors where we see continued strength, particularly in our specialty vocational trucks. We are confident that the secular demand drivers that support the ERS segment are robust and will continue to provide significant growth in the years ahead. The breadth of our vehicle product offering and our ability to meet customers' rental and sales needs uniquely positions Custom Truck to capitalize on the future tailwinds created by the sustained demand, particularly a certain delayed transmission projects advance. With respect to our 2024 guidance, while we continue to have confidence in the long-term strength of our end markets and the continued execution by our teams to profitably grow our business, our updated outlook reflects the risks associated with the near-term challenges for our rental customers in the utility sector, which have been deeper and more prolonged than we anticipated, and which we expect will persist through the balance of the fiscal year. As such, we are lowering our revenue guidance for ERS by $70 million to $610 million to $640 million. Regarding TES supply chain improvements, healthy inventory levels, and continued strong backlog levels continue to improve our ability to produce and deliver more units in 2024 than in 2023. However, persistently high interest rates and uncertainty over the upcoming election are impacting our smaller customers' purchase decisions. As a result, we are lowering our revenue guidance for TES by $65 million to $1.05 billion to $1.19 billion, the midpoint of which reflects another year of double-digit revenue growth. We are also lowering our revenue guidance for APS by $15 million to $140 million to $150 million. Consolidated revenue guidance is now $1.8 billion to $1.98 billion. Given these changes, we are lowering our adjusted EBITDA guidance range to $340 million to $375 million. While we are reducing our consolidated revenue and adjusted EBITDA guidance for the year, we continue to focus on generating positive free cash flow in 2024, but expect to generate less levered free cash flow than our previous $100 million target. In closing, I continue to have the highest degree of confidence in the entire Custom Truck team and our ability to navigate the current softness in the utility end market and to deliver profitable growth and long-term value to our shareholders. With that, I'm going to turn it over to Chris to talk through the details of our first quarter [ph] results.

Thanks, Ryan. For the first quarter [ph], we generated $423 million of revenue, $134 million of adjusted gross profit, and $80 million of adjusted EBITDA. Relative to last year, our second quarter results were significantly impacted by a decline in average utilization of the rental fleet to just under 72% from almost 82% in Q2 of last year. In addition, average OEC on rent in a quarter was $1.04 billion, down from just over $1.2 billion in Q2 of 2023. These declines reflect the impact of the slowdown in utility utilization that continued in the quarter, which Ryan mentioned. On rent yield was 40% for the quarter, essentially flat compared to Q2 of 2023. Given the trends in utilization and average OEC on rent, the ERS segment had $138 million of revenue in Q2, down from $169 million in Q2 of last year. While rental revenue was down marginally on a sequential basis, rental sales were up 15% sequentially, resulting in overall revenue growth for the ERS segment versus Q1. Adjusted gross profit for ERS was $83 million for Q2, down from $97 million in Q2 of 2023. Adjusted gross margin was more than 60% in the quarter, up from just under 58% in the same period last year, largely because rental revenue, which has a higher margin associated with it than rental equipment sales, comprised a larger percentage of total ERS revenue in this quarter than in Q2 2023. We continue to invest strategically in our rental fleet and sell certain age assets in the quarter, and our fleet age improved slightly to 3.4 years in the quarter. Net rental CapEx in Q2 was $50 million. Our OEC in the rental fleet ended the quarter at $1.46 billion, down marginally versus the end of Q2 of last year, but up sequentially versus the end of Q1 this year. We expect to continue to invest in the fleet in 2024, but have lowered our expected growth CapEx given the trends we're seeing in the utility end market. In the TES segment, we sold $248 million of equipment in the quarter, down 1% compared to Q2 of last year, but up more than 3% sequentially from the last quarter. Gross margin in the segment was 17.1% for the quarter, down from Q2 2023, but in line with our expected margin range for the segment. TES backlog continued to moderate, ending the quarter at just under $480 million. Net orders improved sequentially versus Q1 of this year, and just under $190 million. Strong levels of production and new equipment sales in the quarter allowed us to make headway towards reducing our backlog to a more normalized level, which currently stands in more than five and a half months of LTM TES sales. This is down from a peak of more than 12 months in early 2023, and consistent with our targeted historical average of four months to six months. Our strong and longstanding relationships with our chassis, body and attachment vendors continue to be an important driver of our record TES production. Our intentional inventory build throughout 2023 and into 2024 positions us well to meet our production, fleet growth, and sales goals for 2024 and beyond. Our APS business posted revenue of $37 million in the quarter, down slightly from Q2 of last year. Adjusted gross profit margin in this segment was 22% for Q2. Overall in Q2, the APS business was impacted by a decrease in rentals of tools and accessories, which were affected by the previously discussed utility end market softness, as well as higher material costs. Borrowings under our ABL at the end of Q1 were $587 million, an increase of $35 million versus the end of last quarter, primarily as a result of the increase in inventory and the lower than anticipated adjusted EBITDA performance in the quarter. We expect to begin to see a meaningful reduction in inventory levels at the end of this fiscal year and into next year, which should contribute to reducing the borrowings on the ABL. As of June 30th, we had approximately $160 million available and $328 million of suppressed availability under the ABL with the ability to upsize the facility. With LTM adjusted EBITDA of $376 million, we finished Q2 with net leverage of 4.1 times. Achieving net leverage below 3 times remains a primary and important goal. With respect to our guidance, given the current conditions in the utility markets, we continue to expect TES to be the primary growth driver for 2024. We believe our ERS segment will continue to experience near-term pressure and demand in the utility market as a result of regulatory approval delays and financing and supply chain factors affecting the timing of job starts. These headwinds in our utility end markets are driving lower OEC on rent and our core ERS segment that will continue for the remainder of the year. As a result, we are lowering our ERS revenue guidance by $70 million. We also expect our rental fleet based on OEC to be flat this year versus the low single digit growth we discussed on last quarter's call. Regarding TES, supply chain improvements and healthy inventory and backlog levels continue to improve our ability to produce and deliver more units in 2024 than in 2023. However, we are experiencing a bit of a reduction in demand from our smaller regional customers who are choosing to delay purchase decisions until later this year as a result of their expectation of lower interest rates. As a result, we are reducing our 2024 revenue guidance for TES by $65 million, which still reflects another year of double-digit revenue growth in the middle of the range. We are also reducing our revenue guidance for our APS segment by $15 million, reflecting the softness in the utility end market. While this all combines to reduce our consolidated revenue and adjusted EBITDA guidance for the year, we continue to focus on generating positive levered free cash flow this year, but expect it to be lower than the a $100 million we detailed in our last call. Updated guidance for our segments is as follows; we expect ERS revenue of between $610 million and $640 million; TES revenue in the range of $1.05 billion to $1.19 billion; and APS revenue of between $140 million and $150 million. This results in total revenue in the range of $1.8 billion to $1.98 billion. We are projecting adjusted EBITDA in the range of $340 million to $375 million. In closing, I want to echo Ryan's comments regarding our continued strong business outlook. Despite some temporary demand weakness in certain utility markets, we continue to be optimistic about the long-term demand drivers in our industry and our ability to return to strong revenue and adjusted EBITDA growth next year. With that, I will turn it over to the operator to open the lines for questions.

Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Justin Hauke with Robert W. Baird. Please go ahead.

Great. Good afternoon guys. I appreciate taking the call here. I guess not overly surprising to see the slowness given what some of your customers have been reporting and some of the utilities have been saying about the ongoing weakness in 2Q. But I would be curious if you could elaborate a little bit more on the anecdotal comments you gave about some of your core utility T&D markets coming back so far in 3Q. Just a little more color on that. Is it geographic-based? What's driving that? Just anything you can give us on that?

Yes, happy to do it and thanks for the question, Justin. I'll give you may be, kind of, an initial cut from what we're seeing already in July and then maybe give you some more commentary too around it, but we're seeing, for us, OEC on rent is up just over $30 million already in July. So, we are seeing it come back and it's coming back primarily in utility. So, I think that's where we're starting to see some positive trends there. So, I think that's important, which obviously improves utilization. So, utilization is up by about 200 basis points already. So, I think that's some of kind of the immediate facts that we're seeing. And then when we really segregate transmission versus distribution, just in transmission, what we're seeing for the back half is we're seeing a lot more quoting activity now that's starting to happen, which is a good leading indicator for us. Seems to be consistent with what we're watching from an expected line mile start standpoint as well on the transmission side. So, I think that's where we have, I'd say, a favorable view on the back half and certainly a positive view heading into 2025 on the transmission side. Distribution is a little bit of a different story. Distribution is where we're saying that it's, as we said in our comments up front that it seems to be normalizing. But that's where there's been a bit of a tick down, which really is seems to be consistent with our conversations now with IOUs as well because they're thinking about how they're planning their O&M spend and their CapEx spend. And then the impact, the other big piece for us to understand is the impact that they've experienced from inflation on some of these core products, whether it's transformers or conductor or even the cost of third-party labor for them. So, hopefully that helps and happy to go into more detail, if we can provide anything else.

Yes, I mean, maybe just -- what's the lead-time to turn around an equipment rental on some of this work? I mean, they call you up and it's there next week? Do they need a month notice? I mean, just trying to see what that increase in activity, how long that trickles into actually getting fleet out the door?

Yes, it’s a great -- it always depends is the answer there, but we have some activity that's immediate that we're quoting and shipping now, which is why I made that comment about OEC on rent that's already up so far in July. And then there's some that is still planning for still later this fall. So, it is a mix, but we're starting to see some of the pickup there already.

And then, I guess, the comment about the leveraged free cash flow being less than $100 million that you guys were talking about before. I know previously the year-end target for leverage was around 3.5 times with the lower cash flow and the lower EBITDA contribution here. What are you thinking, I mean, that way we'd be able to back in, I guess, to what you're thinking for pre-cash flow. What do you think you had the balance sheet this year?

Yes. Hi, Justin. It's Chris. We're not expecting it to meaningfully move versus where we are. We do think, as we get towards year end, we're going to start to see some of that inventory start to turn. We've obviously been focusing a lot on our incoming receipts. So, we should start to see the impact of some of that net working capital unlock at the end of the year, and then certainly more significantly next year. But I wouldn't model any significant reduction from the current leverage levels. There'll be a modest decrease, but we certainly won't get to the 3.5.

And just if I could squeeze it in one more quick one. It looked like in the 10-Q, you guys had a new floor financing plan with Ford. Give a little more detail on that?

Yes, it's a dedicated line that we have for Ford just to have that flexibility. In terms of favorable, I believe there's a free floor planning period, which I think is described in the Q. And originally it was a $30 million line and I think we just recently increased that I think to 42. So, it's just to have additional flexibility. Historically, we had done it on the PNC line, we just separated it out into a dedicated Ford line.

Okay, all right. Good to know. I will jump back in the queue, let anybody ask question and I might jump back after. Thank you.

Thanks Justin.

The next question comes from the line of Tami

Hey, thank you so much for the time. So, a couple of questions. The first one is, I think your gross rental CapEx is expected to be down this year given the demand weakness. And so as we think about next year, should we model more of a catch up? So, bigger than usual CapEx or, basically, I'm trying to understand how should we think about CapEx in 2025 if your expectation right now is that demand is eventually going to rebound?

Yes, it's a great -- Tami, it's good to talk to you, and it's a great question. And it is one of the beauties of the models that we can quickly pivot, right? So, when things are coming slower than we expected, like what we've talked about, we can hold back on deploying some of that CapEx. I -- we haven't provided guidance for 2025 yet. I would expect it would be a returning to normal where we talked -- at some of the levels that we've talked about in the past. But if demand comes back faster, we certainly can react to that and grow the fleet more quickly. But we haven't provided guidance, but would expect something along those lines would be about where we settle for 2025.

Understood. That is helpful. And then quickly, I'm sorry if I missed it, but rental rate growth, can you speak to what you're expecting for rental rate growth through the rest of the year and what it was in the second quarter?

Yes, in terms of our OEC on rent yield, it's been in that 40% to 41% range. I think going back four or five quarters now, I wouldn't expect it to materially be different. So, if you're modeling it, I think it's going to be in line with where it's been.

Yes, that’s helpful. But I was more wondering about the rental rate inflation, that's what I'm trying to understand. Like did rental rates go up in the quarter?

No, they've been relatively flat for the past few quarters.

And is it expected to be flat for the remainder of the year?

I wouldn't expect it to materially move, no.

Got it. Thank you.

Next question comes from the line of Michael Shlisky with D.A. Davidson. Please go ahead.

Hi, good afternoon thanks -- hi there, thanks for taking my questions. You mentioned in your release and in your comments that some customers are waiting for the election to make any decisions. I think it was mainly on purchasing. Does your fourth quarter or your first quarter 2025 results depend on who wins? And is there a real difference you think in the outlook for T&D maintenance and activity with either party in the White House?

Mike, good to talk to you. Certainly we're not making any assumption about who wins. I think the comment was really around two things there as expected rate cuts have not occurred. I think a lot of our smaller customers are waiting on those rate decreases to happen and therefore expect their borrowing cost to be down. So, I think that's a piece. And then we are hearing that from those same customers who it'd say the smaller contractors that we service. I think they're just waiting on some certainty around the election. Certainly, no strong view one way or the other with regards to results there, but I think there's just certainty around it. And two things I'd point you to typically the fourth quarter is always our strongest sales quarter, so that is normal for us. And certainly, when we look back on prior election years, that seems to have been what's happened where we've seen a meaningful uptick in the fourth quarter after the election. So, that's what it's based on, not anything about who might win given the current environment.

Got it. Also, can you walk us through the CapEx plan and the idea of potentially holding off on investing for some period of time? If you haven't had things out in the field on rent that haven't been used as much, I'd be curious why you want to go half a year or a year older in your asset base if there's no real difference in how it might look or perform because it hasn't been used?

Yes, I think the thought on holding back on some CapEx is for growth CapEx there, Mike. So, you're right, we've been continuing to keep the age of the fleet about where it's been. I think the age of the fleet today is just under three and a half years, so it's continuing to hold there. It's where will flex from a CapEx perspective is on growth CapEx. And that's what the comment was about. If we're not seeing a meaningful uptick in utility demand, we won't invest more heavily there to grow that part of the segment. And so there'll still be some swapping or some replacement that does happen in that segment. And then where there are opportunities we will continue to invest to grow. Where we're seeing that now is really around some of the specialty vocational trucks. So, that's been a more meaningful portion of the additions that we've made this year, which I think is an encouraging sign as you think about 2025 and beyond.

Okay. And then maybe lastly, and I'm sorry for the very, very basic question, but I think I'd like to hear it from you on an earnings call here. Is there a world where data centers can get all the power that they need, EVs can get all the power that they need given the growth rates that are expected of these two areas in the future and the AI as well as a corollary there? Is there a world in which all these things can get the power they need without using Custom Truck at a much higher level than they are today, either utilization or more fleet assets?

Not the way we see it, Mike, for sure. No, I think that's -- and to me it's the unlock some of those things that I think will be a great tailwind for our business. We believe that they will come, certainly all conversations point that way, but we are just waiting for those things to happen which is both an increase in the transmission line mile complete that needs to occur. And then obviously the additional investment as you're thinking about some of these other things like AI data centers coming online and obviously electrification. So, those are the great tailwinds. We know that we will be able to take advantage of them. It's just when they come and as we've said, we're seeing it now start to build in the latter half of this year and feel optimistic about where 2025 will be for both sides, for both the rental fleet and for the sales side of our business.

Okay. Thanks. I'll pass it along.

The next question comes from the line of Brian Brophy with Stifel. Please go ahead.

Yes, thanks. Good afternoon. Appreciate you taking my question here. So, just on TES, gross margins were a little bit lower than a year ago. Is there anything to call out specifically there or is this just in the range of normal? And then how should we be thinking about those margins here in the back half?

Yes, Brian, this Chris Eperjesy. We've guided coming into the year in that 16% to 18% range, and I know that's a broad range, but for us, this right within in line with expectations. Q1 and then also Q2 of last year were two of the best quarters we've ever had. We wouldn't model anything different than where we've been at in that 16.5% to 18% range is going to be pretty consistent.

Okay. Thank you. That’s helpful. And then more of a housekeeping modeling item. The equipment sales within ERS obviously have been volatile here the past couple of quarters, how should we be thinking about revenue there in the back half?

It is the most volatile of our segments and within the ERS segment is the rental asset sales, just given that there's RPO sales, which are the customer's right, to purchase a unit that's on rent, and then there's other assets that get sold off of rent. And then we also have other rental assets sales that we pull out of the fleet. And so it does, it is typically the hardest one to predict. And then accounting -- there's accounting convention, there was sales type lease accounting that can somewhat change those figures that makes it difficult to predict. Having said all that certainly the first two quarters were unusually low. If you go back and look at what we've done over the past eight, nine, 10 quarters, I think we've averaged in a quarter around $60 million a quarter, and I think the last two quarters have averaged about $35 million. So, we would expect to see some meaningful growth in the second half of the year. I hope that answered your question.

Yes, and the only thing I'll add, Brian, too is the fourth quarter is normally the biggest and there's a lot of different reasons for that, but that historically has been the case. So, some pickup in the third quarter and then a bigger lift in the fourth quarter would be normal -- more normal.

Appreciate it. Very helpful. I will pass it on. Thanks.

The next question comes from the line of Nicole DeBlase with Deutsche Bank. Please go ahead.

Yes, thanks. Good afternoon guys.

Good afternoon Nicole.

Maybe just starting with the revised guidance, does it still embed a half-on-half step up in EBITDA in the second half? So, just trying to get a sense of to what extent you guys feel like you've de-risked the guidance for the push outs that you've seen in utility relative to embedding a step up since you've seen a recovery in July?

Yes, we feel comfortable with the range. Obviously, there's different things have to happen in terms of getting to the top of the range. We talked about the fact that we've seen pretty meaningful increase in OEC on rent in the month of July. I think we're up close to $35 million, 200 basis points on utilization. You'd have to see a trend like that continue to get to the high end of our range. Certainly that's not what we're modeling internally, but that's what it would take to get there. As Ryan just touched on, Q4 is always our strongest quarter. I think the last three years, it's ranged from just under 20% to almost 40% higher than any other quarter or average of the first three quarters. We would expect to see a similar phenomenon this year as well. I think one difference is if we get past the election, if there are some rate cuts, if some of the regulatory and funding issues are solved, clearly we have the inventory, which would've been a constraint in the past, just given some supply chain issues that we will not have now, including finished products. And so that also could be a potential tailwind as we look at being able to get closer to the higher end of the range.

So, maybe -- if I could just finish that off, like does that mean that the low end of the range doesn't really embed a recovery at all and it's just a normal half-on-half seasonal EBITDA uplift? Am I interpreting that correctly?

Yes, I mean, I think, yes, I think in terms of magnitude, certainly the seasonal fourth quarter strength is going to be a part of it. We are expecting to see sequential improvement in Q3 although somewhat moderate, low-to-mid single-digit growth on revenue and EBITDA in the third quarter. And so a lot of the growth that we're expecting is going to come in the fourth quarter. And then the OEC on rent, we are expecting to see some recovery. It's just the magnitude. So, the lower end would be a much more modest recovery on OEC on rent and the higher end would be a more accelerated trend we've seen in July.

Okay, got it. Thank you. That’s helpful. And then just on the APS business there, the growth margins contracted quite a bit year-on-year, definitely came in lower than our expectations. Anything going on there and how to think about the rest of the year?

I think in our comments, we talked about the fact that rental was down, we're continuing to prioritize the rental fleet over third-party service. And so both of those would have a negative impact on margins. There is some cost increases that we're seeing there as well. So, I wouldn't model anything significant there. I think we're going to see some of the same of what we've seen in the first half. There could be a slight improvement in the second half.

And Nicole, we probably should have even guided a little bit better there. But part of the APS business is a block rental business, which is highly correlated with transmission, so which is obviously very high from a gross margin percentage standpoint. So, that's a portion of that business that has been weaker in the first half of the year, so, which is impacting margin there as well.

Got it. Thanks. I'll pass it on.

I'll now turn the call back over to Ryan McMonagle for closing remarks.

Great. Thanks everyone for your time today and your interest in Custom Truck. We look forward to speaking with you on the next quarterly earnings call. And in the meantime, please don't hesitate to reach out with any questions. Thank you again and have a good evening.