McGrath RentCorp (NASDAQ:MGRC) Q3 2023 Earnings Call Transcript

And I think we are going to be back to better opportunities once we get into next year. That’s my outlook on this part of the business.

Scott Schneeberger: And you mean whirlwind demand in semiconductors?

Joe Hanna: Yes.

Scott Schneeberger: Correct. Alright. Well, it sounds good. Yes, it doesn’t. Yes, it’s not – that wasn’t saying that it’s down. It just is in a wall. But it sounds like you anticipate improvement in next year potentially, just because you don’t see a long duration…?

Joe Hanna: Correct.

Scott Schneeberger: Thanks. I appreciate that. I will turn it over right there. Thanks.

Operator: Our next question comes from Marc Riddick, Sidoti.

Marc Riddick: Hi, good evening everyone.

Joe Hanna: Hi Marc.

Keith Pratt: Hi Marc.

Marc Riddick: So, one of the things that you touched on that I wanted to follow-up on, you had made mention of Texas and the education funding on the ballot there. One of you could talk a little bit about maybe your overall thoughts of use as far as education funding if there are any other potential hotspots for the upcoming election cycle and then of course, I have few follow-ups on that.

Joe Hanna: Yes. So, the other big market of course for us is California and then Florida. In California, there is not going to be any bond measures on a ballot this particular year, that will be next year. But I can tell you that California has actually funneled well over $1 billion from other revenue sources into facilities funding, because they need the money to go there. And so what you have in a state like this is, a lack of funding at the state level that is actually being addressed through other funding sources, so that’s a good thing. Then you have Texas, which I just mentioned, and then you have Florida, which the sales tax initiatives and things like that, that they have on ballots should receive favorable voter turnouts. And so we are expecting that that should be good for a state like that too. So, across our operating geographies, we are seeing education funding in a good place. We anticipate that will be the case next year.

Marc Riddick: Okay. Excellent. And then one of the things you mentioned in your prepared remarks were some of the findings and learnings that you have had with some of your new investor colleagues, and one of you could talk a little bit about that, and elaborate on that as far as how that plays into the future opportunity set?

Joe Hanna: Well, one of the things that we are diligently working on is achieving our $8 million synergy target that we have committed to. And what we are seeing when we bring our two teams together, is that there are a lot of really good ideas that people and teams are generating, that are going to enable us to hit that target. So, it ranges from, how we interact procedures that we have for maintaining equipment, procedures that we have for utilizing fleet between both of our companies, had the passing of sales leads, how all that system works. I mean all those things have just really gone very, very well. And so I have been very pleased at the progress we have made there. And we just have a team that is leaning forward, and doing a really wonderful job to try to have us be successful in our commitment to hit that $8 million synergy target.

Marc Riddick: Great. And then you have made mention as far as the units on rent that are going out, and the gains that you are seeing there and the benefits of plus. So, I want you to talk a little bit about sort of how that’s played out, particularly with maybe geographic mix, are certain areas a little stronger in that than others, are there certain customer groups that are more receptive to that, or has it just kind of been across the board?