Custom Truck One Source, Inc. (NYSE:CTOS) Q4 2024 Earnings Call Transcript

Custom Truck One Source, Inc. (NYSE:CTOS) Q4 2024 Earnings Call Transcript March 5, 2025

Operator: Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Custom Truck One Source, Inc. fourth quarter and full year 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. Complete press star and the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Brian Perman, Vice President of Investor Relations. Please go ahead.

Brian Perman: 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 a discussion of some of the factors that could cause actual results to differ, please refer to the risk factors section of the company’s filings with the SEC. Additionally, please note you can find reconciliations of the historical non-GAAP financial measures discussed during the call in the press release we issued yesterday afternoon.

That press release and our fourth quarter investor presentation are posted on the investor relations section of our website. We filed our 2024 10-K with the SEC yesterday afternoon. Today’s discussion of our results of operations for Custom Truck One Source, Inc. or Custom Truck is presented on a historical basis as of or for the three and twelve months ended December 30, 2024, from prior periods. Joining me today are Ryan McMonagle, CEO, and Chris Eperjesy, CFO. I will now turn the call over to Ryan.

Ryan McMonagle: Thank you, Brian, and welcome everyone to today’s call. Custom Truck ended 2024 on a very positive note. Our ERS and APS segments benefited from the strong improvement in utility-related demand that we saw in the third quarter, which continued through the end of the year. GES had a record quarter in Q4 and a record year, exceeding a billion dollars in annual sales for the first time. Last year’s performance highlights the resilience of our end markets and our ability to adapt to meet customers’ needs in a rapidly changing business. We feel that our performance in Q4 sets us up well for the turn to growth that we anticipate in 2025. Our Q4 results show that the trends that we experienced in our T&D end markets in Q3 continued through the end of the year.

We saw sequential improvements in our two main rental KPIs, average OEC on rent and average utilization. These trends align with our utility contractor customers’ expectations of sustained and increased activity through the end of last year, which they expect to continue into 2025. About 55% of our total revenue comes from the utility end market, which includes both transmission and distribution work. We are witnessing significant growth in electricity demand, driven by AI-driven data center development, grid upgrades, and investments in electrification trends. Recent industry reports projected a 24% to 29% increase in US electricity demand by 2035, nearly double the previous forecast. These trends provide strong tailwinds for our future growth.

We view transmission line mile completions and IOU rate case approvals as key indicators of utility end market demand. Our recent trends and customer interactions confirm that the conditions in the utility end market are continuing to normalize. We continue to see attractive rental demand across our utility and other primary end markets as well, including infrastructure, rail, and telecom, which positions us well for a strong start to the year and supports our outlook for ERS for 2025. Chris will detail our ERS segment performance, but I’d like to highlight key trends. Average OEC on rent for Q4 was over $1.2 billion, a 12% sequential quarterly increase. In addition, average utilization for Q4 was just under 79%, a 570 basis points sequential improvement versus Q3.

In Q4, rental revenue was up 15% versus Q3, the second consecutive quarter of sequential growth in rental revenue, a first since 2022. With the recovery in our transmission equipment utilization, we continue to see mid-seventies to below eighty percent utilization rates across most of our fleet and end market, demonstrating the long-term resilience of our markets. The uptick in rental activity and customer optimism also boosted rental asset sales, marking the third consecutive quarter of sequential improvement, with Q4 up 13% from Q3. We continue to leverage the recent strength in ERS to selectively invest in our rental fleet. At the end of Q4, our total OEC was just over $1.5 billion, our highest quarter-end level and up nearly $22 million in the quarter.

We’ve continued to invest during Q1 to ensure we have adequate equipment to meet current and projected rental demand. In June of this year, we expect to open a new branch in Portland, Oregon. This new branch highlights our confidence in the strength of the rental market. Through our investment in both our rental fleet and expanded physical presence, we believe we are well-positioned to capitalize on the anticipated growth in 2025 and beyond. As we expected, Q4 was our strongest quarter of the year for our TES segment, which saw a record quarterly revenue of over $300 million, up 18% sequentially and up 3% compared to Q4 of 2023. Full-year TES revenue exceeded $1 billion for the first time, which was up almost 7% versus 2023 following almost 29% growth in 2023.

We saw very strong demand from our forestry and vegetation management customers at the end of the year, largely as a result of several utilities awarding contracts to many of our customers. Segment gross margin was up 45 basis points on a sequential basis but down year over year, impacted by mix and improved inventory levels across the broader industry. We anticipate this will begin to normalize later in the year. While we did deliver a very strong Q4, we did see some hesitation from our customers to buy, especially in November. We think high interest rates and some level of caution on the economy influenced this. As such, we are closely watching our order intake. In Q4, we saw a 35% increase in net orders compared to Q4 last year, and that trend is continuing so far in 2025.

During Q4, our focused effort to manage our inventory levels resulted in a significant reduction in inventory of more than $150 million versus the end of Q3, and more than $170 million from peak levels at the end of August. We expect to continue to reduce our inventory levels this year to a more normalized level. We are confident that we have sufficient inventory to meet strong customer demand for new equipment, as well as to grow our fleet to meet rental demand in our core end markets. We continue to monitor developments involving tariffs. In 2024, approximately 30% of our total purchases came from Mexico and Canada, primarily from our chassis and key attachment providers. We are working closely with our suppliers in both countries, as well as our steel and aluminum suppliers, to develop plans to be able to continue to support our customers and minimize the impact of tariffs on our operations.

Additionally, we are monitoring upcoming chassis emission regulations from CARB and the EPA, as well as any potential changes to those regulations under the new administration. The entire TES team continues to perform exceptionally well, and we are proud of the business we have built. During Q4, we closed on a sale-leaseback transaction on eight of our own properties, for net proceeds of over $52 million, which we used to reduce borrowings under the ABL and to repay other debt. We viewed this transaction as an attractive opportunity to unlock the value of certain of our own real estate and to reduce our leverage. Additionally, in January of this year, we, in Platinum Equity, jointly purchased all of Energy Capital Partners’ remaining CITAS shares at a price of $4 per share.

We felt it was an attractive opportunity to purchase a significant number of CITAS shares at a meaningful discount to the market price. With respect to our 2025 guidance, we do expect this year to be a year of growth across all three of our business segments. While Chris will provide more details, for 2025, we expect total revenue of between $1.97 and $2.06 billion and projected adjusted EBITDA between $370 million and $390 million. We will continue to focus on working capital management and free cash flow generation, which will allow us to make progress towards meeting our three times net leverage target. In closing, our business outlook remains strong, driven by long-term sustained end market demand, buoyed by megatrends and a strong competitive advantage that sets us apart.

Our multi-decade relationships with strategic suppliers and our long-tenured and diversified customer base will continue to be keys to our success. We are committed to continuing our investment and growing our industry-leading specialty rental fleet, ensuring that we remain at the forefront of the markets we serve. Additionally, our focus on continuous improvement projects throughout our business will help us maintain operational excellence. I continue to have the highest degree of confidence in the Custom Truck team and want to thank everyone for their hard work and dedication that helped us navigate last year’s challenges in the utility end market. As we begin this year on a stronger footing, we are confident that our current levels combined with strong market tailwinds will drive our expected double-digit adjusted EBITDA growth across our consolidated business in 2025.

We look forward to updating you on our progress on next quarter’s call. With that, I will turn it over to Chris to discuss our fourth quarter results in detail.

Chris Eperjesy: Thanks, Ryan. For the fourth quarter, we generated $521 million of revenue, $168 million of adjusted gross profit, and $102 million of adjusted EBITDA. All of our rental segment KPIs improved in the quarter, both on a sequential and a year-over-year basis. Average utilization of this rental fleet for Q4 was just under 79%, compared to 73% in Q3 and under 78% in Q4 of the prior year. Average OEC on rent in the quarter increased to over $1.2 billion, compared to under $1.1 billion in Q3 and $1.16 billion in Q4 of 2023. While late December saw the typical seasonal decrease in OEC on rent and utilization, so far in Q1, we have seen the expected rebound in both measures, which currently stand at more than $1.19 billion and over 78%, respectively.

The ERS segment had $172 million of revenue in Q4, down from $185 million in Q4 of 2023. However, given the sustained improvements in utilization and average OEC on rent in the quarter, rental revenue was up 15% sequentially. In addition, increased overall demand for equipment helped drive the 13% sequential improvement in rental asset sales as well. Both trends resulted in overall revenue growth for the ERS segment, increasing for the third straight quarter. Adjusted gross profit for ERS was $105 million for Q4, down marginally from $107 million in Q4 of 2023, but up 20% sequentially. Adjusted gross margin for ERS was 61% in the quarter, up from 58% in both Q3 and the same period last year. For Q4, we maintained margins in the expected range of the low to mid-seventy percent range for rental revenue and mid to high twenty percent range for rental asset sales.

On rent yield was over 38% for the quarter, up slightly from Q3. Net rental CapEx in Q4 was $71 million, and our fleet age improved slightly to 3.2 years. Our OEC in the rental fleet ended the year at $1.52 billion, up $60 million versus year-end 2023 and up $22 million versus the end of Q3. We expect to continue to invest in the fleet this year and expect to grow our OEC by mid-single digits percentage versus the end of 2024. As we always do, we will adjust our CapEx plans throughout the year to reflect our customers’ demand to both rent equipment and purchase used equipment out of our fleet. In the TES segment, we sold $308 million of equipment in Q4, a quarterly record and an increase of 3% compared to Q3 of the previous year and a more than 18% increase sequentially from Q3.

Total TES revenue for the year was $1.1 billion, the first time annual TES sales exceeded a billion dollars. Gross margin in the segment was 16.6% for the quarter, down from Q4 2023, but up 45 basis points from the previous quarter. For 2024, TES gross margin was just under 17%, in line with our expected margin range for the segment. TES gross margin continues to be impacted by mix and improved inventory levels across the broader industry. TES new sales backlog moderated in the quarter, ending the year at just under $370 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 at more than four months of annual TES sales, consistent with our targeted historical average of four to six months.

Net orders improved in Q4 to $280 million, up over 90% on a sequential basis and up 35% compared to Q4 of 2023. We’ve continued to see strong order flow so far in 2025, with backlog currently sitting at $445 million, up more than 20% since year-end. That, combined with ongoing feedback from our customers regarding their equipment needs for 2025, provides us with confidence that we will continue to see revenue growth in TES. Our strong and long-standing relationships with our chassis, body, and attachment vendors continue to be an important driver of our record TES production. Our current level of inventory positions us well to meet our production, fleet growth, and sales goals for the year. Our APS business posted revenue of $41 million in Q4, up more than 6% from Q4 of the previous year, and up 11% sequentially.

Adjusted gross profit margin in the segment was more than 29% for Q4, slightly lower than Q4 of 2023, but up substantially compared to Q2 and Q3 of 2024. Overall, in Q4, the APS business was impacted by an increase in rentals, tools, and accessories, which were positively impacted by the improved fundamentals in the utility end market. Borrowings under our ABL at the end of 2024 were $583 million, a decrease of $45 million versus the end of Q3. As Ryan mentioned, we closed on a sale-leaseback transaction on eight of our own properties in Q4, resulting in more than $52 million of net proceeds, which we used to reduce outstandings under our ABL and to repay other debt. In addition, during Q4, we began to see the benefits of our inventory management efforts, which resulted in an inventory reduction of more than $150 million in Q4 and more than $120 million in reduced balances under our floor plan lines.

We expect to continue to reduce our inventory this year, which should contribute to lower balances on our floor plan lines as well as reduced borrowings on the ABL. As of year-end, we have $364 million available and over $158 million of suppressed availability under the ABL. With 2024 adjusted EBITDA of $340 million, we finished 2024 with net leverage of 4.5 times. We expect that reduced inventory levels and floor plan balances, as well as our returning to growth and the impact of lower interest rates, will all contribute to increased levered free cash flow generation in 2025, which we intend to use to reduce our net leverage. Achieving net leverage below three times remains a primary and important goal for us and one that we expect to achieve sometime in fiscal 2026.

Our initial 2025 guidance for our segments is as follows. We expect ERS revenue of between $666 and $690 million, TES revenue in the range of $1.16 to $1.21 billion, and APS revenue between $150 and $160 million. This results in total revenue in the range of $1.97 to $2.06 billion. We are projecting adjusted EBITDA in a range of $370 million to $390 million and net rental CapEx of just under $200 million. In addition, as we have begun to make progress on unwinding our significant strategic investments, we expect to generate meaningful levered free cash flow in 2025, setting a target of $50 to $100 million. Given our projected adjusted EBITDA growth and free cash generation, we expect to make progress in fiscal 2025 towards our stated goal to achieve a net leverage ratio of below three times, with a target to get below four times by the end of this fiscal year.

In closing, I want to echo Ryan’s comments regarding our continued strong business outlook. Despite the demand weakness we experienced for most of last year in certain utility markets, we continue to be optimistic about the long-term demand drivers in our industry and our ability to return to double-digit adjusted EBITDA growth this year. With that, I will turn it over to the operator to open the line for questions. Operator?

Q&A Session

Operator: Our first question will come from the line of Justin Hauke with Robert W. Baird.

Justin Hauke: Great. Good morning, everybody. I guess, my first question I wanted to I think I asked something similar last quarter, but I’m still struggling with it in terms of the TES Revenue guidance. Your forecast here is for I guess, twelve and a half percent growth at the midpoint. But when we look at the backlog, you know, it’s down three hundred million year over year almost fifty percent. And even with the four hundred and forty five million that you called out is kinda where you’re sitting today. It’s still down thirty five percent year over year. But I’m just trying to understand the confidence on why there’s such a wide disconnect from where the backlog is versus the forecast and the visibility have to have those the CES orders come in.

Yep. Justin, good to hear from you, and I always happy to talk through it with you. But, you know, a couple things. One, I think, is we’ve talked about normalized backlog for us is kind of four to six months is what we’ve talked about. Really since since being public, and so we’re coming off elevated backlog, which take you know, which goes back to the kind of some of what we talked about a year ago, really eighteen months ago. At this point. So what we’re watching closely, Justin, are orders. And we’re seeing kind of net orders as I said in my kind of prepared remarks are up. In the fourth quarter, and we’re seeing that trend continue. In Q1. And so, you know, that’s kind of our bottoms up build. On where revenue growth is. If you look at kind of the history of TES growth too, you saw seven percent growth last year.

You saw twenty nine percent growth. In twenty twenty three, And so, you know, it’s it’s continuing to trend that way. And when we look addressable market, you know, there’s a lot of opportunity for us to continue to grow share. In all of the end markets we serve. So, you know, that’s our that’s our bottoms up build based on customers and we’ve tried to provide some range there. You’re right. Kind of on the midpoint, I think the lower end of that growth is still single digits, low double digit growth. And so I think that’s where our confidence is. In in the number that we put out. And Justin, this is Chris. Maybe just one other data point just to use some of the data you’re using If you look at Q3 of twenty three and Q3 of twenty four going into the fourth quarter, The backlog was down four hundred million year over year.

But we still posted growth and had our best quarter ever TES. I think we had growth of roughly three percent. And so you there’s not a direct correlation there, I think, that you’re trying to make with the backlog.

Justin Hauke: Yeah. Okay. Alright. But yeah, that that second point, I guess, helps because I I guess, otherwise, I would think of it as as a headwind because you know, coming off of having so such a know, Yeah. Elongated months of backlog would have know, kinda given you artificially high revenue, but but maybe that correlation doesn’t come out that way. I I I guess maybe my second question is just You know, in thinking about the seasonality, of your guidance for the year, I think, you know, usually, the first half’s been kind of forty five percent of your revenue and EBITDA. Second half’s is fifty five percent. But twenty four had certainly a softer first half start So I guess I was just curious in terms of the growth cadence Now that the transmission spend has kind of come back, you know, if that becomes more balanced this year or if that still is kind of a the relative seasonality that you’re you’re thinking Yeah.

Justin, as we look at it, we actually expect to have it similar again this year. I think this year finished just off of that forty five fifty five. It could be slightly less than the forty five, slightly more than the fifty five, but you know, plus or minus one or two percent, it’s gonna be similar forty five, fifty five split between the first half, second half, both on revenue and EBITDA.

Justin Hauke: Okay. And then maybe one one final one before I jump back in the queue. Just on the the cash proceeds from the sale leaseback, said made a lot of sense to do that, and it’s good to see the free cash coming in. I’m just curious how that translates into I guess, savings on your your lease expense for for twenty five. And does that show up as kind of a reduction interest expense, or does it know, run through as branch cost and in gross margin? Just trying to understand that a little bit better too.

Chris Eperjesy: Yeah. Actually, Justin, it’ll actually be an incremental lease expense. And so we sold those eight properties and are leasing them back. And so to answer your question, it’ll be roughly four and a half to five million dollars a year of a headwind, which is baked into our guidance. And the majority of that will show up in cost of goods sold. A small portion of it will show up in SG and A, but I the split is roughly eighty twenty.

Justin Hauke: Okay. Alright. So mostly in cons? Thank you. I I’ll I’ll jump.

Chris Eperjesy: Thanks, Justin.

Operator: Our next question will come from the line of Scott Schneeberger with Oppenheimer. Please go ahead.

Scott Schneeberger: Thank you. Good morning. Hi, guys.

Ryan McMonagle: Hey. Good morning.

Scott Schneeberger: Good morning. How are you doing?

Ryan McMonagle: Hey. It’s it’s Daniel on for Scott. Thank you for taking our question here. Could we start on margin? You mentioned the headwind on cost of goods sold, but Chris, can you please go through the puts and the takes on margin in twenty twenty five and also provide some perspective of what the assumptions what the impacts from the tariffs you have assumed across the financial statements. Thank you. Yeah. I’ll start on margins, and I’ll let Ryan add some color on tariffs. Our margin targets continue to be relatively consistent than what we said in the past. So take them one by one. On the rental side, you know, still low to mid kinda seventy percent margins, and it’ll fluctuate based on what we see on rent and repair and maintenance costs in any particular quarter, but that I think the range is low.

Seventy percent to mid seventy percent kind of range on used equipment sales, you know, kind of in the mid twenties has been our target. And then on TES, you know, we’ve said kinda mid teens, you know, it’s gonna be higher in some quarters, could be slightly lower, but on average kind of a mid teens margin profile. Yeah. And with Daniel, I’ll take care of us. But, look, there’s two two things I think that as you’re thinking about CTAS are important. Right? One is kind of the the natural hedge that’s built in to the business, which really comes from parts. Right? First is the rental fleet. We got a billion five in the rental fleet. It’s young. It’s three point just over three point one years old. I think is our average age now. So you’ve got some built in hedge just from the capital that’s already deployed there.

And then the second part of that is inventory. So we talked about the decline you saw in inventory, which is important. We’re glad we demonstrated that in the fourth quarter, but we still have Just over a billion dollars of inventory on the balance sheet, and so you’ve got some built in hedge as we think about how we manage that inventory. In twenty twenty five. And then the last piece is know, we’re working closely with our suppliers. So we do we do receive chassis and some of our attachments from both Mexico and Canada. And so we’re working closely with our suppliers, and we think we’ll be able to mitigate the majority of the cost increase. We have underwritten a little bit of cost increase, like, in our p and l. But we think we’ll be able to to manage really mitigate majority of the cost increase as we’re heading into twenty five.

And I see this is all happening in real time. So we’re, you know, we’re adjusting kind of as as necessary and we’re prioritizing, obviously, making sure we can take care of our customers. Got it. Thank you. On on on rental yield, Improve sequentially. How do you think about the outlook there, the pricing environment overall, and when do you see that inflect on a year on year basis? Yeah. No. It’s a good question. And look, we think it will hold to continue to improve as we head into twenty twenty five. So obviously, as the as the business environment improves, you know, we’re selective and how we are able to increase price, and so we’ll do so and have taken some of those actions in twenty twenty five already. So I think thinking about holding to slightly improving in twenty five you know, should be should be consistent with what we’re assuming.

For this year? Got it. Thank you. And final one for me. I mean, I know PS covered early, but I’m curious on the infrastructure bill benefit. Where do you think we stand? I mean, you you you have seen some benefit. But where do you think we stand on the curve there from seeing those funds flow and impact your business? Yeah. I still think it’s I still think it’s early. I do think there is some benefit benefit, right, that we’re seeing in from the IIJA in particular. So we are seeing some benefit there, and I think it’s kinda mid innings would be how I would describe it, at this point. So I think it’s I do think it’s it is a continued tailwind. For us heading into twenty twenty five. Got it. So much.

Operator: Our next question will come from the line of Tami Zakaria with JPMorgan. Please go ahead.

Tami Zakaria: Hey. Good morning. Thank you so much. So it’s it’s great to see utilization. I think you said moved up to seventy eight percent quarters a day. Could you just provide some color what what the progression of that could look like that’s embedded in the full year guide?

Ryan McMonagle: Yeah. I’ll I’ll start and maybe Chris can give some more specific But, Tammy, you’re right. The utilization performed well in Q4. Right? There’s always a little bit of a slowdown. That happens kind of at the very end of the year, but we’re seeing utilization continue to hold. That range. So we talked about kind of that high seventies to low eighties range. Which feels like what we’ll be able to deliver this year. And so I would say most importantly, Our utility customers in particular, we’re seeing both transmission and distribution kinda return to what I’d call more normal. Utilization levels, which are in that range.

Tami Zakaria: Got it. Okay. Understood. So so the guide embeds somewhere between high seventy to low eighty. So it could move up to low eighty at some point during the year.

Ryan McMonagle: Yeah. It it normally look at you know, in in normal years, yes, you a little bit of an increase in the spring. A little bit of an increase in the fall. And, at this point, you know, we would expect that that would continue. We’re hearing a lot of our customers are talking about very good demand on the transmission side. Right now, projects that are underway where more equipment is needed here in the coming weeks and months and so I think that’s what would drive utilization a bit higher in our business.

Tami Zakaria: Understood. That’s very helpful. And one quick modeling question. I think I heard you say forty five fifty five is the Split between one half and second half. So within one half, is it would it be right to model one one case or the low point of the year and then use see gradual improvement.

Ryan McMonagle: Yes. That would be accurate. And know, we had a really strong fourth quarter in Q4 for our new sales. We would expect it to start a little bit slower in Q1 So I in your modeling, we we you know, year over year Q1, could be, you know, down slightly to up slightly. Versus Q1 of last year, and then that’ll help you get to Q2. But we expect, you know, that forty five to yeah. Forty five fifty five, maybe slightly less than forty five, maybe slightly more than fifty five. Second half of the year.

Tami Zakaria: Great. Thank you.

Ryan McMonagle: Thanks, Tammy.

Operator: Again, for any questions, press star one. And our next question will come from the line of Brian Brophy with Stifel. Please go ahead.

Brian Brophy: Hey, guys. This is Andrew on for Brian Burkey. Thank you for taking my question. Last quarter, you gave us an estimate of how much of a benefit there was from emergency restoration. Is there anything you can provide us on that this quarter?

Ryan McMonagle: Yeah. It’s a good it’s a good question. Look, we’re still seeing some of the benefits. There’s still work happening on the East Coast. Right now, we’re seeing some benefits in in the Carolinas. From that, and then are obviously seeing some demand for equipment out west as well for some of the fires in California. So I would say that it was less than it was in the fourth quarter, but there’s still is some benefit. And I think some of it, you know, as as more rebuilding happens, I think that where kind of the breadth of our product offering will will have been will will will again benefit from, you know, offering some of the heavier, especially vocational trucks in particular. So I do think there is some benefit. I think it’s less than it was in Q4. In in Q3, but it’s not sorry. In it’s not we haven’t we haven’t quantified it because I don’t think it’s overly significant right now.

Brian Brophy: And then I was wondering how you’re thinking about real estate property sales going forward. Sounded like this was something you’re continuing to evaluate So bring a passion on my value elsewhere Is this something we should expect more of in the future? And if so, any idea, I think, value of properties you’re looking at or timing or potential proceeds. Thank you.

Ryan McMonagle: Yep. No. It’s a good question. No. That was the majority of the properties that we own. And so, no, I don’t think it’s something that we would plan to do again in the future. It just felt like it was the it was the right time to be able to unlock some of the value in that real estate, and yet still have really long leases in place be able to to be able to use those properties for, you know, the the foreseeable future. Thank you.

Operator: And that will conclude our question and answer session. I will now hand the call back over to Ryan McMonagle for any closing remarks.

Ryan McMonagle: Great. Thanks everyone for your time today and for your interest in Custom Truck. We look forward to speaking with you on our next quarterly earnings call. And in the meantime, please do not hesitate to reach out with any questions. Thank you again, and have a great day.

Operator: This concludes today’s meeting. You may now disconnect.