Faiza Alwy: And then I wanted to touch on the deal. And Brad, I absolutely appreciate your comments around how you don’t want to engage in hypotheticals and all of that. But in your comments, you sound very confident about the deal getting done. And I think that’s in stark contrast to a lot of, to what a lot of investors believe. So I wonder if you can give us a peek into what type of discussions, questions you’re getting from the regulators and sort of what your defenses in terms of the consolidation happening in the space?
Brad Soultz: Look, we’ve said it’s a great transaction. We have high confidence in closing. We said the transaction would require filing. We made the filing. The filing was selected for review. We’re complying with the review. And I think other than what I’ve already shared in my prepared comments we’re not going to get into further details and speculation here.
Operator: Thank you. One moment for our next question. And that will come from the line of Angel Castillo with Morgan Stanley. Your line is open.
Angel Castillo: I just wanted to go back to an earlier comment about pricing or some of the moves in volume not necessarily being driven by kind of market share loss or any impact because of pricing. Just could you give us a little bit more color on that and what gives you comfort around some of the moves being more kind of macro or project related rather than anything related to kind of a pricing dynamic? I think, if I recall correctly, some of the reported numbers from a graph showed kind of growth in some of the units on rent. So just wanted to understand some of the differences and kind of what gets you comfortable around the pricing side.
Tim Boswell: In terms of the McGrath report, they reported a utilization decline and a pretty meaningful one. So the unit on rent growth was via acquisition. So I think that was maybe just a misinterpretation of that piece. We can identify the retail exposure within the storage portfolio. As of Q1, non-residential square footage starts were down 13% year-over-year. And non-res square footage starts have been down for over the past 12 months if you look at year-over-year. So you know that overall volume of activity, at least in the construction market, has contracted. I can also go back and look at where units on rent are today versus where they were in 2019 and were up meaningfully since that time. And non-res square footage start volume are in line with 2019. So that tells me there hasn’t been a meaningful share trade over that period of time, granted it has been a pretty volatile period as you go from 2019 into COVID then the rebound, and then to where we are today.
Angel Castillo: And then just wanted to go back to the mid-single-digit sequential kind of implication for the full-year guide. Can you just give us a little bit more of a sense for what kind of mix is within that in terms of how much is kind of unit-on-rent improvement versus how much is just rental rate and VAPS, kind of sequential pick up here?
Tim Boswell: Yes. So we continue to have a storage sequential headwind going into Q2, right? And I expect that sequentially those volumes then improve in Q3 and Q4. Sequentially, modular volumes are improving, right? So I expect that continues. And I think the rate trends frankly have been very stable and predictable, and I don’t see anything in our leading indicators right now that would suggest that’s changing as we roll the model forward. So frankly, more similar than different as we compare our leasing KPIs sitting here today versus the original expectations for the year with storage volume being the one change.
Operator: Thank you. One moment for our next question. And that will come from the line of Philip Ng with Jefferies. Your line is open.
Philip Ng: Tim, if I heard you correctly, you’re expecting margins to be flat sequentially and it kind of stepped up in 3Q, 4Q and the full year it’s up about 50 basis points. So if my math is correct, I think it implies a pretty sizable step up first half, second half call it 600 basis points. And you’re telling me modular is stronger versus storage and storage I think has higher margin. So what kind of gives you the confidence of that nice step-up in margin in the back half which seems pretty outsized versus seasonality?
Tim Boswell: It’s the same lease revenue build sequentially that we expected through the course of the year. As we get more storage movements that we anticipate through the remainder of the year, you get better leverage off of the trucking fleet. And so D&I margins, Phil, actually do impact the overall margin profile of the business and that will be a benefit. And then the third lever is really resulting more from the implementation of our field service and dispatch platform, which we executed in Q1. And this, what this does is this allows us in any given market through a single dispatcher to leverage our trucks, our drivers, our service crews across any of the customer activities that we’re servicing, whether it’s a storage delivery or return or modular delivery or return or setting up furniture in any of our equipment.
So to date, before the integration of the two teams locally, we basically had redundancy across all of those functions. Now I don’t view this as a huge cost reduction initiative by any means, but in any given local market, if we’ve got a HVAC technician that resided at a modular branch, well, we can use that HVAC technician across the entire fleet now and maybe not use as much third-party service and third-party transportation. Then there are also some efficiency implications for our back office by virtue of having the entire company on one system. And you can almost think of this, Phil, as the realization of some of the cost synergies that we expected from the Mobile Mini acquisition a few years ago. Obviously, much more value has been created through our commercial initiatives over the past few years.
But now that we’re on a single CRM front end, ERP backbone, and field service platform, I expect we’re going to be unlocking efficiencies here, not just in the second half of the year, but going into 2025 as well.
Philip Ng: And Tim, on this initiative, you’re talking about the dispatch, that’s largely going to flow through the dispatch, that’s largely going to flow through the D&I side on the margin side or is it actually going to flow through modular and storage as well?
Tim Boswell: I think you can see it on the leasing margin. I think you can see it in D&I, and I think we’ll see it in SG&A. So I think it’s going to touch us in a lot of ways.
Philip Ng: And then you gave some great color on modular in terms of units on rent, largely unchanged, storage a little weaker, more flat sequentially. It would be helpful to kind of give us a little more context in the back half on how to think about the progression just because just frankly there’s less visibility. Any update on the retail side of things? Have you heard any stronger pull through perhaps in the back half or still TBD at this point on the retail side?
Tim Boswell: No specific order information to share with you as it relates to Q4. But as I said, I think a quarter or so ago, hard to see it being much worse than it was. The activation volumes and order rates that Brad referenced in storage are building sequentially as we go into Q2. Now that is normal and to be expected from a seasonality standpoint, but we are seeing it, right? So that does give us reason to expect unit-on-rent to flatten sequentially. And you would normally see a build from Q2 into Q3 and then Q4 is always, frankly, the highest quarter-four unit-on-rent in storage. So, our expectations there, I think, are pretty modest and based on kind of a normal seasonal progression from where we are today.
Operator: Thank you. I’m showing no further questions in the queue at this time. I would like to turn the call back over to Mr. Nick Girardi for any closing remarks.
Nick Girardi: Thank you, Sherry. Thank you all for your interest in WillScot Mobile Mini. If you have additional questions after today’s call, please contact me.
Operator: Thank you. Ladies and gentlemen, this concludes today’s conference. You may now disconnect.
