Alta Equipment Group Inc.

impact first quarter when you were exiting 2025. You know, and when I look at, like, say, the last five years, you know, and just I just kind of wanted to see, you know, any differential. You know, the average sequential decline over the last five years has been 18 and a half, and the median has been down 26 and a half, and you were down almost 40 percent. You know, I guess the question is, do you see, or I mean, maybe if you thought about it, that this change with regards to depreciation and being able to expense is going to change the season and healthy of the equipment business to where you would have perhaps more robust fourth quarters than you might have had historically in week or first quarters for the same reason?

And I think that the one big beautiful bill here in the declines or the increases and decreases. I think the numbers, you know, as I recall, Q3, we did roughly $300 million of new and used equipment sales. I'm sorry, $200 million. Q4, we did $300 million. And then Q1 here, we do another $200 million or so. And so that radical sort of, or violent, if you will, up and down. I do think the one big beautiful bill You know, now that we have, it was new for 25. And so I do, I don't expect it to be as violent going forward. Uh, I would be surprised. Um, I think this was, um, a lot of people that were waiting for that to be in place, uh, maybe for a couple of years, but now that it is in place, uh, I wouldn't, we're always going to have year end buyers to take advantage of tax depreciation. But I, I, my, my gut is telling me in my history. that this year was a little bit of an anomaly.

Okay. And then my last question shifting over to the rental fleet and it's been touched on. You know, I mean, I think it's admirable and it's actually, you know, it's going to be pretty exciting as you bring this fleet in line and start, you know, improving the utilization rates of your rental fleet. You know, you brought it down sequentially, looks like the last four quarters. You know, right now you're ending rental fleets at 525 million. At what point do you find that your fleet is right-sized? I mean, is it 500 million? Is it 450 million? Is there, you know, some kind of way for us to kind of think about that and maybe a timeline of where you think you're going to get there?

Yeah, Ted, I think, you know, the plan, the plan, based on the plan for this year, which, as I mentioned, we're a little, we were several million dollars off in Q1 on just rental revenue. But for us, it's not necessarily, based on the plan, I should say this to answer your question, we expect it to be sub $500 million by the end of the year on that, what was, what is at the end of Q1 525. Based on what we know about rental the rental revenues in the plan. Now we're a little bit below that, which potentially means we will drop even further below the 500. But for us, it's finding utilization targets versus nominal levels of fleet. And we've got to go out and compete for business too and start to drive revenue. So it's more about the numerator-denominator than it is hitting a target. That's a long way of saying the original plan was to be sub 500Million. Uh, we've given Q1 performance that's still intact and we expect to be there by the end of the year.

What would be your target in terms of that utilization rate?

We want to be in the high sixties from a, a, a sort of what we would call dollar weighted time utilization, like physical utilization of fleet on rent. over a calendar year divided by total fleet. And what that typically means is that our rental revenue is trading divided by average acquisition cost is something in the mid to high 30s, what we would call dollar utilization or financial utilization. We're just not there yet. Okay.

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