Tony Colucci: New equipment, as we’ve said since we started doing these calls four years ago, is always as part of the reason we only do an annual guide, number one. And the other part of the reason we don’t guide to revenue because as we saw in the fourth quarter, things can really kind of ebb and flow. And sometimes these ebbs and flows are difficult to just project quarter-over-quarter. And the other thing, when we sit down and we budget, we have great confidence in our parts and service lines, or relative confidence, I should say, versus the equipment line item, which can be more impacted by macro trends, interest rates, sentiment, et cetera, et cetera. Now all the things all the signs point toward a strong 2024. As Ryan mentioned in his remarks, DOT budget is looking strong.
Talking to our customers who are working on these projects, kind of ready to let it fly here as the spring hits us. And so we feel pretty good. The reason that we feel like we can hold that line rather to maybe being down, and I’ll caveat all of this in saying being down a little bit off of peak wouldn’t be the worst thing ever, especially given the GPs and how impactful they are to EBITDA relative to rental revenue or parts and service. But that said, we do have some areas of our business where we expect to take share. And that’s, I guess, what I would highlight to answer your question specifically. So we’ve got places that we’ve just entered to — entered into in the past 18 months like Toronto in the metro handling space, where we expect to take share.
And there’s some other pockets in Upstate New York on the construction side, and the list goes on. So it would be us taking share that could help maybe offset what might be flat to down market.
Steve Hansen: And just as a follow-up to your capital allocation decision for the year, I mean, how do you view that framework between buyback and growth or even deleveraging for that point? I mean, how are you viewing that window right now? I mean, the stock is completely disconnected, I think, as you suggest. Does it not make sense to maybe focus on the buyback and some deleveraging as opposed to more growth? I mean, how are you really thinking about that for the year relative to M&A pipeline?
Tony Colucci: Yes, Steve. We’ve got a slide in the deck that suggests we’re trading at that Ault would be trading at something like 5.8, I think the number is in the deck, forward EBITDA. So that multiple, despite it being something maybe that we feel is not appropriate is still a bit higher than where we’ve transacted at in the past, in the M&A pipeline 4 to 5. So we still think even if we’re trading at 6, there’s a turn or 2 of spread there relative to the M&A pipeline. And that’s before you get into any sort of synergies or discussions about what we can do with the business versus where it might be today. So, some of it is time. What does the pipeline look like in the over the near-term? And where are we at in the calendar, right?
We’ve talked about Q1 being a little bit rougher. And so we just kind of monitor the situation and kind of on a real time basis are always kind of thinking about that decisioning. The other element that you mentioned was leverage and we also want to be mindful of that. And so especially where interest rates are, we may have had felt differently twoyears ago about that tenant of the framework of this decision because interest rates were much lower. So I’m not trying to evade your answer, but there’s all of the different dynamics that come into that scenario. But we still think that M&A would — we could do M&A in an accretive fashion. Interest rates being higher would suggest we’d want to delever. But if those two things aren’t there, then we wouldn’t hesitate to buy back.
Operator: Next question is from the line of Min Cho with B. Riley.
Min Cho : Congrats on the strong — end to a strong year. Couple of questions. In terms of 4Q rental rates, can you talk to kind of what the trends were on a year-over-year basis? And it sounds like for 2024, Tony, I think that you said that you expect it to be pretty flat, excluding any inflationary impact but if you could just confirm that please?
Tony Colucci: Yes. I think I can just to take your question in reverse. I think we can confirm that. We would expect inflationary maybe a little bit more there. So much I want to just point out too though, so much of our rental business is a function of our service prowess. And when we’re renting large 40 ton articulated dump trucks effectively customers are renting our technicians in a lot of ways. And so while if there’s an asset to be rented that has cost of capital and return on capital, that need to develop a rental rate, we also have this other component of labor that we need to be compensated for. And so, I say that because sometimes we feel like, we may be able to get a premium relative to some of the things that you might see in the industry, what relative to maybe URI talking to rental rates or some of the other publicly traded pure play rental houses.
So maybe we can do a little bit better, but I don’t think we’re expecting to, I guess is the point there when we talk about the guide. The first part of your question on rates and how they played out in ‘23, I would say mid single-digits is probably where we landed there. I saw something the other day that said the last three years around 20% give or take of total increase in rental rates. I would put us in that category over the last three years, with this year being mid single-digits, maybe a tick north of there.
