Good day and thank you for standing by. And welcome to the Alta Equipment Group Second Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker’s remarks, there will be a question-and-answer session. Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your speaker today, Andrew Rundle, Director of Finance. Please go ahead..

Thank you, Saline. Good afternoon, everyone, and thank you for joining us today. A press release detailing Alta’s second quarter 2021 financial results was issued this afternoon and it’s posted on our website along with a presentation designed to assist you in understanding the company’s results.

On the call with me today are Ryan Greenawalt, our Chairman and CEO; Tony Colucci, our Chief Financial Officer. For today’s call, management will first provide a review of the second quarter financial results. We will begin with some prepared remarks before we open the call for your question.

Before we get started, I’d like to remind everyone that this conference call may contain certain forward-looking statements, including statements about future financial results, our business strategy and financial outlook, achievement of the company, and other non-historical statements as described in our press release.

These forward-looking statements are subject to both known and unknown risks, uncertainties and assumptions, including those related to Alta’s growth, market opportunities and general economic and business conditions.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations.

Although, we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that occur after this call.

Descriptions of these and other risks that could cause -- it could cause actual results to differ materially from these forward-looking statements are discussed in our reports filed with the SEC, including our press release that was issued today. During this call, we may present both GAAP and non-GAAP financial measures.

A reconciliation of GAAP to non-GAAP measures is included in today’s press release and can be found on our website at investors.altaequipment.com. I will now turn the call over to Ryan.

Thank you, Andrew. And welcome everyone to our second quarter 2021 conference call. I’ll provide highlights from the quarter and then turn the call over to Tony for a review of the financial results.

The second short quarter showed the continuation of positive industry trends and a business environment favorable for both our material handling and construction equipment verticals.

Our results for the first half of the year combined with record backlog in both our material handling and construction businesses strengthen our confidence in the growth opportunities ahead at our full year outlook.

Customer demand increase each month throughout the second quarter, while new equipment supply constraints persisted and lead times extended for deliveries of new equipment, these market conditions are helping to drive increases in our rental fleet utilization, as well as demand for our replacement parts and services.

The supply/demand imbalance is also driving price appreciation of new and used equipment, and increased rental rates. Also it’s utilizing the breadth of our equipment brand portfolio and extensive inventory and rental fleet to satisfy customer demand and win new customers.

Equipment sales were higher than our internal plan for the third consecutive quarter, which supports our core growth strategy of populating our coverage area with equipment in order to provide parts and service over the intermediate and longer term.

For those who have followed the Alta story, and as I said in the past, our growth strategy is built around populating the geographic regions we serve with equipment from an increasingly wider group of manufacturers and then providing quality service from our skilled technical workforce.

This strategy drove our product support business up to 53% this quarter. Now turning to key financial highlights, revenue was $292.7 million and adjusted EBITDA came in at $28 million for the quarter. Our construction segment, which is our growth engine had an exceptional quarter and generated strong organic growth of 37.2%.

Our material handling segment, which is our more mature business, grew organically 7.7% amid supply chain constraints. I also want to highlight that our product support grew organically more than 30% over last year second quarter, another proof point that we are fully recovered from the impact of COVID.

Geographically we saw continued strength from Florida in our construction segment overall and are beginning to see some positive trends out of the New York region which was acquired last December. Additionally, equipment sales from our use and rental fleets were at all time highs, and as I mentioned, rental fleet utilization continues to decline.

Our labor productivity remains strong and we have been actively recruiting in every market we serve, adding nearly 160 technicians from this time a year ago. In the quarter we also completed the full integration of several acquisitions we made during 2020, Flagler, Hilo and Liftech onto our ERP platform.

This brought another $300 million of revenue onto our platform in the quarter and fully integrates our systems to drive both top and bottomline synergies across our enterprise. Tony will go into a bit more detail on this in his remarks.

Additionally, we continue to make significant progress on our corporate development initiatives that position as well for long-term growth.

Earlier this week, we announced the formal launch of our eMobility strategy with our agreement with Nikola Motors, a designer and manufacturer of heavy-duty commercial battery electric vehicles and fuel cell electric vehicles.

This agreement will provide Alta with exclusive rights to sell and service Nikola long-haul Class 8 trucks in the New York, New Jersey, Eastern Pennsylvania and New England markets. As you know, the EV market is in its early stages and is experiencing significant growth.

We view this initiative as a natural extension of the operational expertise we have built in the material handling segment and construction markets over the years. We also believe it aligns well with our long-term strategy as we aim to diversify our business into high growth industries, with exclusive territories anchored by premier partners.

We plan to leverage our existing footprint and deep knowledge in electro-mobility to meet this growing demand and deliver world class service to Nikola customers.

Not only are we excited about this partnership from a business opportunity, but this also aligns with our ESG principles and helping to reduce emissions and drive environmental sustainability. We also continue to build on the great success we’ve been experiencing from our logistics and warehousing solutions group.

Since acquiring PeakLogix roughly one year ago, we have seen a significant increase in the number of opportunities we’ve had to help our customer base reduce their facility costs, increase throughput, improve productivity and gain efficiencies in their warehousing process.

PeakLogix currently has a record backlog and has seen significant demand from customers for the implementation of innovative technologies like automation and robotics to help streamline operations.

This unique capability has also helped us to broaden our scope with a full service solution increase -- and increase sell-through opportunities, expanding our ability to win new business and drive growth in our customer base. We also recently entered a partnership with a small robotics company to enhance our capabilities in this space.

We believe that partnership complements our warehouse automation and software solution capabilities, and supports the growing demand for robotics and automation in the material handling space. PeakLogix remains one of our most exciting growth opportunities.

On the M&A front, our pipeline remains strong and we continue to be in active discussions with other equipment dealers in both our construction and material handling businesses. The operational improvements we made in 2020 to mitigate the impact of the pandemic are driving scale and improving profitability.

These strategic actions combined with a significantly improved operating environment and strong macro tailwind, position as well this year and beyond. We remain well capitalized and are primed to take advantage of targeted acquisition opportunities that drive long-term growth.

We also have several longer term strategic opportunities on the horizon, including continued expansion with the -- within the warehousing and logistics space, and our entry into the commercial vehicle sector. Both of which provide extremely high growth potential and strategic alignment with our customer demand.

Lastly, we could not have done anything with the hard work, dedication and resiliency of the Alta team members. Thank you. I will now call -- turn the call over to Tony to discuss our second quarter financial results.

Tony?.

Thanks, Ryan. Good afternoon, everyone. And thank you for your interest in Alta Equipment Group and our second quarter 2021 financial results. I hope that you and your had a fun summer as we head into the back half of 2021. My remarks today will focus on four key areas.

First, I’ll be presenting our second quarter results which we are pleased with, as we’ve now closed the COVID gap from 2020 entirely and look forward to growing our business in the second half of 2021 and beyond. As part of that commentary, I also briefly recap our April high yield bond rates and its positive impact on our balance sheet.

Second, as much as been made of the supply chain constraints which have impacted many industries including ours, I’d like to highlight for investors management’s view of how the current supply chain situation is impacting Alta, and how we believe our business model is responding to the situation on a department-by-department basis.

Third, given that it’s been a full year since the Flagler acquisition in Florida, which was the largest in the company’s history, I’ll present some important metrics that highlight our ability to improve targets value and realize expected synergies as we implement our strategic approach to the market.

As part of that commentary, I also briefly touch on some integration wins, we had in Q2 from a business system perspective. Last, I want to provide some thoughts on Alta’s newly announced commercial EV opportunity from a financial viewpoint and how we are framing this opportunity in relation to capital deployment.

Before I begin, it should be noted that there are several slides in our presentation, which was released prior to our call that presents our quarterly and year-to-date numbers in greater detail than what I will discuss here today.

I encourage everyone on today’s call to review our presentation and our 10-Q, which is available on our Investor Relations website at altaequipment.com. For the first portion of my prepared remarks, I’ll provide an overview of our second quarter performance.

Starting with the income statement, for the quarter, the company reported total revenue of $293 million, which is a record sales quarter for our business. Inside this $293 million of revenue for the quarter is a 23.5% organic sales increase over Q2 2020, which was heavily affected by the pandemic.

However, to lesser impacted Q3 and Q4 of last year, the second quarter of 2021 compares extremely well from a sales perspective, as we’re seeing increased demand for our products and services across all of our revenue streams.

Once again and this is three quarters in a row now, we saw continued strengthen in equipment sales, especially as it relates to used equipment and rental fleet sales, as rental fleet sales for the quarter came in at $36 million.

Also when considering just our equipment sales over the last three quarters, we populated nearly $500 million of equipment into the field, which bodes extremely well for the future of our high margin, product support departments and our longer term prospects.

Speaking of our product support business, which is made up of parts and service, we realized an impressive $87 million in revenue for the quarter, another company high watermark, achieving 31% organic increase year-over-year on a consolidated basis.

Now, this level of year-over-year growth was somewhat expected in our material handling segment, given the impact that COVID had on our product support business in Q2 of last year.

And if there’s a takeaway here, it’s that we are confident that our material handling product support is now fully back to pre-pandemic levels and on the road to sustainable growth, like it was prior to COVID. On the construction side, we’re really proud to report that our product support business also grew 30% on an organic basis.

Recall that our construction product support business was less impacted by COVID, which leads us to believe this is a validation of our business model and our ability to grow the most important aspects of our business effectively. I’ll touch more on that later in my prepared remarks.

From an EBITDA perspective, we realized $28 million in adjusted pro forma EBITDA for the quarter, which is an improvement of $3.6 million over the adjusted pro forma level of second quarter 2020, representing the first quarter since the beginning of the pandemic, where we have picked up EBITDA versus the previous year’s comp.

It’s also the highest quarterly pro forma EBITDA we’ve recorded as a public company. Additionally, our trailing 12-month pro forma adjusted EBITDA comes in at $102.3 million, as that measure continues to trend up and toward our guidance range of $110 million to 115 million for the fiscal year, which we reaffirmed in our press release earlier today.

Another encouraging metric for the quarter and another positive byproduct of the current supply/demand imbalance in the equipment markets is the increased -- to the continued increase in the physical utilization of our rental fleet, which was over 65% at June 30, represent almost a 20% increase versus the same time last year.

Lastly, and I get a lot of detail on our new high yield bond on our Q1 call, but given is not fully accounted for in our second quarter 10-Q I thought I’d give a quick repack -- recap. In short, the $350 million five-year bond accomplished several major items simultaneously for our business and our capital structure.

It immediately reduced and fixed our cost of debt at a favorable level. It created $150 million of liquidity by paying down our ABL and uncapping suppressed availability. It removed some restrictive covenants of a term loan that was constraining our ability to access more cost effective first lien capital.

And most significantly, we believe this new capital structure gives us tremendous runway for the future. Future transactions cannot be accretive to shareholders when it comes to financing the next dollar of capital needed to execute on M&A and other growth -- strategic growth initiatives. To that end, let me give a quick update on the balance sheet.

We ended the quarter with approximately $290 million of available ability on our line of credit and leverage came in at 3.4 times forward 2021 EBITDA, certainly comfortable positions on both metrics.

Now, moving to the second area of my prepared remarks, Ryan, and I’ve taken a lot of questions from investors over the past quarter on how the current supply chain environment, especially as it relates to our key OEMs is impacting our business and so I wanted to provide our view of how the current backdrop impacts cash flows at Alta.

First, I would refer call participants to slide 19 of our investor presentation, which illustrates my comment this year. Similar to the lens we use to view our business as we move through COVID, we’re taking a segment based department-by-department approach to framing up the impacts of the current situation.

To start with and to be clear, the primary is specific to the receipt of new equipment from our OEMs.

While we’ve incurred some pressure related to parts availability, we would classify this as more of an inconvenience, where it’s a real threat in the short-term and a distant second place relative to the issues going on with new equipment deliveries.

Internally, when we frame up the impact department-by-department, we first analyze the department’s cash generative capabilities on a relative basis, high, medium and low. Second, we analyze the severity of the supply chain issues on each department and the grid on slide 19 shows the results of our view.

As you can see, and it probably goes without saying, the inability to source new equipment is impactful to our ability to generate cash flows within our new department.

However, similar to some of the discussions we had on COVID, we need to keep in mind that the razor -- we need to keep in mind the razor and blade philosophy that our new equipment sales, relatively speaking, is not a large cash generator for our business but an avenue to feel population.

As a result, while the current situation may be difficult on our OEMs ability to generate cash flows on new equipment, the impact on us on a dealer, as a dealer is rather muted in relative terms. Moving to used equipment and equipment out of our rental fleet.

First, we designate these revs -- we designate these revenue streams from these departments as moderate from a cash generation perspective for Alta, meaning that they are more impactful overall cash flow versus new equipment sales, but less impactful than part service and rental.

For this area, simple supply and demand economics are at play and when there’s a scarcity of new equipment supply coming into the market, the demand for and in turn so as pricing. Given the size and quality of our used and lightly used equipment in our rental fleet today, we are well positioned to benefit from record level pricing.

To-date and in our estimation over the near-term, it’s that -- our view is that any EBITDA shortfalls observed in new equipment sales will at least be offset by gains via sales in used and rental equipment.

This is an area we believe we have best-in-class talent and relationships to continue to source and sell used equipment to satisfy our customers’ demands until a supply chain issues subside.

In the rental department, first, this department is classified as highly cash generated for Alta and similar to the supply demand remarks I just made, the dearth of new equipment in the market is driving utilization of our rental fleet as customers are filling the void in their own fleets with our rental equipment.

As I mentioned earlier, our physical utilization was approximately 65% at June 30 and we’ve also observed that rental rates have trended higher, the current situation to be viewed as bullish for the rental department. On to the service department, this department is also classified as highly cash generative for Alta.

This high margin department also acts as the linkage to our customers’ equipment. In terms of the impact, the equipment supply constraint is having on the department ensure customers existing fleets are not being replenished. So age and hours of existing fleets continue to rise with each passing month.

As the age and hours rise against the backdrop where uptime matters, the need for service technicians and repairs and maintenance will increase. This aging and utilization phenomenon is positive for the demand of our technicians time and our labor productivity overall.

Lastly, the parts department, which is another department classified as highly cash generative for Alta is directly correlated to the service departments activity and assuming we can continue to source parts at the current pace, which we believe will be the case then it follows that all the tailwinds described for service would manifest in the parts department as well.

Again, the current environment is bullish for our parts department. So, in summary, four of our five departments are revenue streams. We believe will actually benefit relatively speaking from the lack of new equipment supply in the market today and over the short run. New equipment sales will be pressured.

However, this department is not a cash -- large cash flow generator for Alta overall. To be clear, so long as there’s field population in our geographies being utilized in demand for rental fleet Alta’s cash flow profile will remain intact and potentially benefit as the equipment industry supply chains normalize.

Moving on to the third area of my prepared remarks, I’d like to give a brief update on Flagler acquisition from early last year. We believe our experience with Flagler is reflective of our ability to execute post-close as we look to realize the opportunities and synergies identified during the sourcing and diligence process.

Additionally, Flagler was the largest deal in the company’s history and given that we’ve full year of operating under the Alta brand, I thought it was appropriate to provide an update on that investment.

First, I would refer call participants to slide 20 of our investor presentation, which shows our experience thus far in Florida and some key metrics. As we shared with investors during the IPO roadshow in late 2019, early 2020, recall that our two major theses in the Flagler deal were that, one, the dealership was under technicians, if you will.

They didn’t have enough techs for the amount of field population they generated in the size of the Florida market. And two, they lacked the ancillary OEMs specifically in the road and compact segments.

As a result, we saw an opportunity to expand their product portfolio, which would both increase and diversify the revenue base and bring large end markets into play.

For item number one, and as you can see on slide 20, we’ve increased annual product support revenue by almost $12 million or 25% in year one and we’ve increased tech headcount by 41%, or 26 heads.

Given the operational and market headwinds that we had to endure over the first 12 months of ownership down in Florida, we couldn’t be more excited about these results, which validate our investment thesis.

As for item number two, we’ve added several impactful product offerings in the Florida market, including leading road equipment manufacturers in Roadtec and Peterson, compact equipment suppliers an AVANT and YANMAR. And a multitude of manufacturers in the invest -- environmental processing space via our dealer arrangement with Ecoverse.

Importantly, most all of these OEM arranges -- arrangements give us exclusive rights to the product and OEM parts for all Florida. Last, but certainly not least, and this is an important intangible that you will not see in a profit and loss statement is we’ve had a great industry talent and leadership with this acquisition.

The results we achieved down in Florida in year one, which we still view as the beginning could not have been achieved without the team’s appetite to do more and the regional leaderships’ ability to be confident enough in themselves to be open to what we believe is an enhanced operating philosophy. Thank you and congratulations to our Florida team.

Before I move on to the last area of my remarks and in the vein of M&A integration, I would point investors to slide 21. This slide presents where we stand with integrating our 2019 and 2020 M&A targets onto our business system.

As you will know, and we were very busy in this regard in the second quarter, we have now -- we now have 90% of our business operating in a common ERP platform. This allows us much more visibility into our business in real time, allows geographies to share inventories and customer data, and helps us track and drive key KPIs in our business.

This win in Q2 cannot be overstated and a big thank you to all the Alta employees who had a role in the Q2 systems integration. Moving on to last area of my comments, I want to add to Ryan’s remarks on Alta’s commercially the opportunity from a financial perspective and how we are framing the opportunity relative to risk and capital deployment.

First, from a strategic perspective, the Class 8 over-the-road truck segment has long been on Ryan and Alta’s strategic map.

In fact, as we’ve mentioned investors previously there are several examples amongst our sister lift truck and construction dealers across the industry landscape that has -- have successful Class 8 dealerships, as there are natural synergies between the verticals as it relates to operations, business model, KPIs and technical talent needed to be successful.

We’ve always viewed the overall -- over-the-road truck market as the most logical fit in terms of a potential third vertical.

We have a proven track record at driving market share for our OEM partners and building best-in-class service operations that keep customers equipment up and running and we intend to use the playbook now in the commercial EV market.

To illuminate the strategy from a financial perspective, we see the entry into this market as further monetizing and leveraging the existing intangible value of Alta, which has been tested, refined, challenged, enhanced and invested in over many years.

From a business model perspective, we intend to have the same approach to the commercial EV segment, as we do in our material handling and CE segments, its new/used parts service and realm, so nothing changes there.

From a capital allocation perspective, dramatically, we view this as an asset-light and risk-light entry into an exciting and potentially significant opportunity. We will meet customer demand with the supply of inventory, purpose built facilities and technical talent.

The current plan is to initially leverage our existing infrastructure in the Northeast and then to ladle capital onto this segment, as it evolves and treat the risk and reward profile of additional investment appropriately as we go along.

Another way to think about our entry into this segment is to contemplate the level of capital investment in time that would have been necessary to purchase truck dealerships throughout the Northeast, and recreate the territory that we now have covered through the Nikola partnership. I don’t know what that number would be.

But I’m certain the financial investment we’re contemplating to pursue the same opportunity those acquisitions would have presented us fails in comparison. I’d like to close by noting that we don’t believe our entry into this segment will materially affect our earnings for the remainder of the year.

And certainly, as visibility into and materiality of the segment comes into focus for management, we will update investors accordingly.

In closing, given our second quarter results, the current business landscape, the impacts of the recent boundaries, and the organic and inorganic opportunities that continue to present themselves from a growth perspective, we remain excited about Alta’s future and continuing to execute for Alta’s shareholders for the remainder of 2021.

Thank you for your time and attention. And I will turn it back over to the Operator for Q&A..

Thank you. We have our first question coming from the line of Alex Rygiel with B. Riley Securities. Your line is open..

Hi. Good morning. This is actually Min Cho for Alex. Congratulations on a really strong quarter and thank you for all the detail you provided on the slides. Very helpful..

Thanks. Good evening, Min..

Are you there? Okay. Sorry..

We are there. Okay..

I just have a couple of questions, in terms of the legal agreement and I understand that still very early on. And I know, Tony, you talked about, tech success base investment going forward.

But could you talk a little bit about thoughts on the capital requirements in terms of buying parts and just training of the technicians for that part of the business?.

Sure, Min. It’s a good question.

If you’ve heard me talk about our parts and service operations in the material handling side of the business and in the CE side of the business, I’ve almost referred to or I have referred to the cash flows from that business as free EBITDA, because the capital intensity of running a parts and service operation is just not very capital intensive.

And so we view this in the same way that putting parts on the shelf that typically in a normal dealership world are going to turn 3 times to 5 times a year, very capital efficient.

And then when you talk about the investment related to training techs, that’s something we’re doing on a regular basis, when new models come out for our OEMs and so training technicians is, frankly, already built into our cash flow.

So we’d see this as no different, which is why we view this as, certainly, from a parts and service perspective as nothing different than we’ve done in the past, which is asset-light..

Got you. And could you talk about who maybe some of the initial customers could be in the Northeast. I know, Nikola had done some work with Budweiser and they probably have some distribution locations as well.

Can you talk about any cross-selling of opportunities with your material handling business?.

Sure, Min. This is Ryan and I’ll take that. We think that the cross-selling opportunities will be some of the same early adopter of the hydrogen fuel cells for material handling. There aren’t any specific names that we would point to in the Northeast. But these are going to be target accounts at are large retailers and distributors.

So the likes of Amazon, Walmart and Anheuser-Busch is a great example..

And also just given your liquidity now and that -- you’ve made so much progress integrating your acquisition, can you talk a little bit about M&A pipeline and potential timing and maybe size of anything that could occur in the year?.

Min, we will probably stay away from any specifics, but what we can say is that, the pipeline is still there and we are having active conversations across each of the segments really. And we -- M&A is part of Alta’s DNA. It has been for over 10 years. And we expect it to be going forward as well.

But I guess the long and the short of it is we still see opportunity M&A wise in both segments of our existing business..

This is Ryan. Min, I would just add that the structural themes of consolidation remain very much alive, so that -- we still see continued runway for our strategy..

Right. Thank you. I’ll hop back into the queue..

We have our next question coming from the line of Bryan Fast with Raymond James. Your line is open..

Thanks. Good afternoon, guys. Just the first question here, when we think about, I guess, the Northeastern and the Midwest business relative to the Florida business.

Can you just talk about what kind of synergies you get between the North and the South, just trying to get a sense of how easy it is to move equipment freely or parts between the two regions, if demand warranted?.

Sure. I’ll take that. This is Ryan. That is a -- that synergy is a significant part of our excitement around the Florida deal and we’re seeing it play out in reality. It’s a four season market. It’s also a large and growing market.

So, examples of the synergies are equipment coming off lease or off rent at the end of the season in the North, where we’re going to go into frost and not have a lot of earthmoving going on, those assets are easily transferable to the South where they can be put in the rental fleets and utilized or sold into the market and become part of our field population.

And then conversely, Florida is a -- it’s a large market. We’re very active in it. And because it’s large and we’re making a market, we’re taking in trades, we’re bringing in lease returns, we have a constant supply of lightly used machinery that we can move to the North to meet demand.

So that there’s definitely for us a theme right now and using our scale, using the breadth of our portfolio to win business, because today, the supply chain constraints are making it very difficult to operate for our customers, but a good environment for us to show our capabilities and try to win share..

Okay. Good color. And then just could you speak to the extent of whether I guess like restrictions are still a limiting factor here or if I guess hiring and retaining techs is more of a limiting issue going forward.

I guess I’m just trying to get a sense of maybe what are the challenges going forward, given that the recovery is just strong here?.

Sure. So we are in an industry where technical talent has been in short supply since pretty -- far before the pandemic. So the pressures remain there. Our industry is -- it’s highly skilled. It’s high wages and so we are not having a problem attracting talent but some of the -- and other industries are experiencing.

So we’re meeting the demands of the market in terms of recruiting..

Bryan, I was going to jump in, I think the first part of your question was site restrictions and the way I took that was maybe related to COVID..

Yeah..

And we’re not seeing any….

Yeah..

Yeah. We’re not seeing any impact that way at the moment in terms of our technicians being able to get out like to fix equipment..

Okay. That’s it for me..

Just a little more math here I was just going to add that there’s some regional pockets of where supply chain related to COVID is more of a factor and keeping the market tempered versus actual infection rates, just wanted to clarify that..

Okay. Thanks..

We have our next question coming from the line of Matt Summerville with D.A. Davidson. Your line is open..

Good afternoon, Ryan and Tony..

Good afternoon..

This is Will Jellison on for Matt Summerville today.

I’d like to start by asking you about what kind of trends you saw in your end markets throughout the quarter from April to June and then starting into July, what was relatively strong and what might have been relatively soft?.

This is Ryan. I’ll take that. So I think the way for us to think about that is that all of the markets were strong. All were recovering incrementally quarter-over-quarter.

Where we still see some and it’s what I referenced on the previous question, we’re seeing in areas related to manufacturing stops and starts and it’s happening in a slower pace because of the supply chain constraints. So we sit here in the Metro Detroit area where the demand is obviously there for automobiles.

We’ve got supply chain shortages, so that they can manufacture that through our output..

Well, from a demand perspective, as Ryan and I have our regional meetings and segment meetings quarterly. We asked the same question about end markets and in each of the regional meetings, everybody had to think long and hard about an end market that was where activity wasn’t high.

There were very few, if any, that we were able to point to, if that gives you more..

Yeah. That’s useful. Thank you. And then follow up, where do you expect selling, general and administrative, how that might trend for the rest of this 2021 from around $72 million level, you just recorded..

Yeah. Will, we -- when we talk about SG&A, the -- it really comes in three different buckets, it’s personnel, which is or in our case the personnel. It does include some level of variable costs, especially as it relates to salesmen and saleswomen commissions. So there are some variability there. But the vast majority of that level is fixed.

So long as new equipment and new used and rental equipment sales stay at the levels they were in Q2. I would expect that number not fluctuate a whole lot over the remainder of the year..

Okay. Great. Thank you..

Thank you. This concludes today’s Q&A session. Thank you for participating. You may now disconnect..