Bradley Barber: Yes. Steven, Good morning. Our EBITDA is absolutely going to grow. Our rental revenue is absolutely going to grow, and our fleet is absolutely going to grow. What’s changing is — and I like the way Seth asked the question. We pulled a little CapEx forward in Q4. We still have a healthy number in front of us, although it’s not a record number. Our rental fleet is sitting at 39.7 months. We’re going to sell a little bit less this year. We just have less need. We really caught up on our fleet rotation that was stifled during 2022 due to lack of manufacturer availability. So, you’re going to see growth capital. We’re going to open 12 to 15 locations. Rates, if they go anywhere other than solidly up, will only be tampered by high utilization, large volumes of equipment on mega projects.
And then, we’re going to get the benefit, of course, this year, as we do in any year, of our fleet growth. I think 18.3%, some of that came in the back half of the year. We’ll get, just to characterize it, a full-year benefit. So, yes, expect our rental revenue and the associated EBITDA of the overall business to continue to grow. We’ll have a little bit less contribution from fleet sales, but otherwise we’re going to have a really nice year with continued growth and increased profitability.
Steven Fisher: That’s very helpful. And then, in terms of how you see the year playing out on the non-residential construction markets, how are you thinking about what’s happening in the first half of the year on a year-over-year basis versus the second half of the year, year-over-year? I mean, you mentioned a number of times about perhaps increased focus on mega projects. Just curious about the cadence and timing. Are these things that you expect to really be a big factor in the first half, or is that more kind of second half weighted?
Bradley Barber: Well, they’re a factor currently, but they’re a growing factor, and that factor will only increase with every passing month and every passing quarter. So, they will be a bigger impact in the back half of the year than they are this year. From a seasonality standpoint, we always see, again, some folks have been, and I know you’re not one of them, you know the business very well, but some people have been focused on the unsustainable level of utilization we ran in 2022. With almost 30 years in the business, we’ve never seen an environment like that. What we’re in today is a normalized environment where we’re going to continue to get incremental gains on physical utilization. And as I stated to the previous questioner, we fully expect to show some leverage in our physical utilization on the back half of this year while we’re growing our rental fleet and improving our returns.
Steven Fisher: Perfect. Thank you very much.
Bradley Barber: Thank you.
Operator: The next question comes from Steven Ramsey with Thompson Research Group. Please go ahead.
Steven Ramsey: Hi. Good morning. I wanted to continue that conversation on the demand outlook. First of all, on the local markets, do you expect basically non-mega project demand to grow? And then thinking about mega projects, appreciate the cadence for this year, it looks like mega project attributable revenue will be higher this year than last. Could you maybe talk order of magnitude, the year-over-year increase that could come from mega projects?
Bradley Barber: The first part of the question is, we do expect to see the non-mega project activity continue to grow. All the construction data for the 30-state geography, we cover points to that. Feedback from our customers points to it. And our activity on a daily basis is substantiating it literally as we speak. As far as the cadence of mega projects, I know we’re fairly vague, it’s not intended to be that way, but in our last quarterly update, I talked about some of these projects we lead on. While we’re the fourth largest rental company in the U.S., or fifth largest depending on what ranking you look at, we can be hyper competitive on any of these particular projects that are within our geography with more than 60,000 machines we have in our rental fleet.
That being stated, there are times we dominate or lead on the project, there’s times we take the secondary position, and then sometimes we slide in a tertiary or third or fourth position depending on the opportunity. It’s difficult to paint the picture. What we know is, there are large volumes of equipment being sent out every day from us and our competitors. I feel like we’re in an incredibly disciplined environment with how we’re all viewing our opportunities going forward. And mega projects will be a bigger part each quarter going forward of our revenue. That’s great stability. It will be great yield, as John talked about with the rental rate trade-off. And we’ll try to give you more clarity as we go forward.
Steven Ramsey: Okay. Great. Thank you. And then, on the acquired companies, you had a very disciplined history in doing M&A. Maybe talk to why now with these companies and the considerations and opportunities for pricing, general margin improvement, and strengthening geographic positioning in these areas.
Bradley Barber: Yes. Our team has just done a nice job of finding the right types of opportunities that better align with us. If we go back just a year, 1.5 years ago, I stated publicly, if there was anything we were disappointed or very frustrated with was our inability to do more acquisitions. We’ve got the balance sheet. We’ve got the systems. We’ve got the teams to integrate them. We’ve got a great track record of buying these businesses, integrating them efficiently, and for those businesses to produce to our expectations. And it’s been nice to see two or three acquisitions here in the last 18, 24 months. The good news is, our funnel is full of more quality, small acquisitions. You can never perfectly handicap what your ratio of closes will be on these deals.
