Philip Ng : Okay. Tim, I guess your guidance for the full year, if I heard you correctly, I mean, at least you’re seeing some green shoots on modular. So your base case for units on rent inflecting there seems more than reasonable. But what if the retail doesn’t come back and kind of languishes here? And you don’t see that pick up perhaps in the back half, I don’t know if that’s what you’re baking in for storage, how meaningful is that to your ability to kind of hit the midpoint of your full year EBITDA? It still seems like you got enough levers on price mix, but any context would be helpful.
Tim Boswell: To your point, we have so many levers in this business to offset what I would characterize — in your question, there’s a relatively minor headwind, if that’s what we’re faced with, is a no storage retail recovery in the second half of the year. We’ve got pricing levers, value-added products levers, margin levers. I don’t view that as a significant concern relative to the midpoint of the guidance given that we’ve taken a pretty conservative approach for the year as it relates to storage volumes. So look, as has been our history, we’re trying to put forth numbers that we believe we can deliver. In order to get to the upside of this range, I think more has to go right, you probably need some of that storage end market recovery in a more significant way.
Maybe some tuck-in M&A helps get you to the top end of the range, maybe stronger margin performance than we’re expecting is an upside lever to get you to the top end of the range. But we’ve got multiple ways to win that I think get us to the midpoint.
Philip Ng: Okay. Appreciate the color.
Operator: Our next question comes from the line of Brent Thielman with D.A. Davidson. Your line is open.
Brent Thielman : Thanks guys. Just a couple quick ones for me. Tim, I was hoping you could just level set us on interest expense expectations for 2024, just obviously, pre-McGrath. And then my second question, is there anything that precludes you from continuing with the buyback while we wait for the McGrath closure?
Tim Boswell: Yes. So on your first question, it’s actually a good one. As we state in the materials, we’re on about a $212 million cash interest run rate, inclusive of the swaps that we executed in January. That does not include about another $12 million or so of noncash deferred financing fees that are amortizing through the P&L. And I know some analysts out there are missing that, especially as you look at the Q4 numbers, right? So you got to take the cash interest, add another $12 million and you should be, at least on our current run rate, around $225 million of GAAP interest expense for the year, divide that by 4 for the current quarterly run rate. What we do with the debt balance as we progress through the year, obviously, there are different scenarios there that we’ll adjust for.
But that’s the right baseline as you think about where we’re at heading into Q1. We did pause the buyback in the middle of Q4 when we got to the point of having material non-public information relating to the possibility of a McGrath transaction. So the buyback has been on hold since that time. And as long as we have material, nonpublic information, then we will not be in the repurchase market, but that can change here as we release earnings obviously and as the transaction progresses. So it’s kind of a period-by-period determination as to whether or not we should be in the market from a repurchase standpoint.
Brent Thielman : Okay. Understood. I thought of one other, if I could. Just you talked a lot about the end markets, especially retail non-res here. I think I’m more interested in I guess some of the other things you’re doing internally that can move the needle on volume, without obviously wanting to sacrifice the higher lease rates you’ve earned here. I’ve heard you mention consolidating branches, sales forces, et cetera. But anything we can think of as sort of share capture initiatives irregardless of what these markets afford you over the next 12 months?
Tim Boswell: Yes, there are quite a few, Brent. I mean the field realignment is very meaningful. We’ve got a single general manager now responsible for every geographic market that we serve, a single leader and team that’s accountable to our customers, and responsible for presenting all of our solutions at every opportunity to all of our customers. So that is a structural change that supports cross-selling. It is enabled by the consolidation of our CRM. Not only did we consolidate the CRM, we launched an algorithm-enabled opportunity prioritization tool for our sales reps, which takes some of the guesswork out of what is the next best opportunity that a sales rep should be working. And those recommendations are tailored to our sales reps based on their role, whether they’re responsible for a territory or maybe they’re responsible for a certain product category.
We are supporting that. We’re in the early stages of supporting that with much more sophisticated digital marketing tools, which we’re starting to pilot here in Q1 and going into Q2. And we’ve got opportunities in enterprise accounts and vertical business development. So there’s a fairly long list of things, in my opinion, that have the potential to drive volumes irrespective of markets, but they’re also relatively early stage. So we haven’t assumed any benefit of those in our assumptions for the first half of the year, but they’re all quite logical and potentially impactful both individually and collectively. So I’m really excited about those investments and those changes in our structure that we made through the course of 2023. And frankly, we’re getting a little bit impatient.
We want to see the production that comes out of those investments. That’s what we’re excited to see here in 2024.
Brent Thielman: Excellent. Thank you.
Operator: Our next question comes from Angel Castillo with Morgan Stanley. Your line is open.
