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

Joe Hanna: Yes. Well, because as I have said, we are in the early innings. We have some geographies that are just doing a better job than others. And that’s as we continue to get our arms around this initiative, that’s part of our – the gains that we know that we have that are out there are getting everyone on the same sheet of music and everybody growing in the same direction. And so those are just normal implementation issues that we have when we roll out something like this. And I think we are doing a very nice job of it. I am not concerned about any particular customer groups that are pushing back, or any particular geographies that are not being receptive to this. It’s actually going quite well for us. And we are very excited about what the future holds there.

Keith Pratt: Yes. Marc, I would just add, if we look at how applicable the new Mobile Modular Plus services are to the different customer groups, there is more that’s applicable on the commercial side compared to the education side. So, when you look at some of the gains we are getting, you can think of it as a lot of the opportunity near-term is being recognized with the commercial customer base.

Marc Riddick: Okay. That’s very helpful. Thank you. And then one of the things that I was sort of thinking about, and with everything that’s sort of going really well so far with Modular in particular. I was sort of thinking about sort of should we be rethinking what the general ceiling is when it comes to utilization, or is it more that the gains are going to be more focused on the pricing side, which certainly seems to be the case. I was wondering, what you have seen so far changes any thoughts or views as to maybe what the utilization floor and ceiling is going forward for Modular.

Joe Hanna: Yes. Marc, I mean running the business at the 80% level is pretty good. And we like it when it’s in that range. We do have room to go up a bit. But due to the geographic diversity and the fleet diversity that we have, it’s tough to run it much, much higher than that. So, what do we do in that case, that’s where we, in some locations have very, very high utilization, that’s where we fund new capital expenditures and we have done that very, very carefully this year and anticipate that we will have opportunities to do that in 2024. So, we have the lying time. We have got the relationships with suppliers to be able to make that happen. And so that’s our kind of lever that we can pull there to make sure that we continue to fund our growth.

Marc Riddick: Great. And then the last one for me, I wondering if you can sort of give us an update. You made mention of some of the acquisitions that you have done since Vesta and some of the tuck-in opportunities and the like. So, one of you could give us maybe an update on maybe what you are seeing there, and as far as – potential targets as far as what’s out there and/or whether the pricing has changed, or is it fairly similar to what we were experiencing earlier in the year? Thanks.

Joe Hanna: Sure. Well, first of all the acquisitions that we have done outside of Vesta, the tuck-ins, we have been very pleased with. They are integrated. They are growing the way we have expected them to grow. And so that’s been a very nice add to the business. As far as our pipeline, we have an active and robust pipeline for additional tuck-ins. And we would like to continue to utilize tuck-ins in certain areas as another way to grow the business. Pricing for those opportunities, I would say, generally doesn’t really change much depending on economic conditions, because you have sellers that are positioned their business to be sold in a variety of different circumstances. A lot of times it’s related to a change in a life event or somebody that wants to retire out of their business.