Custom Truck One Source, Inc.

Hello, and welcome to the Custom Truck OneSource fourth quarter 2021 earnings conference call and webcast. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Brian Perman, Vice President, Investor Relations. Please go ahead, sir.

Thank you and good afternoon. Before we begin, we would like to remind you that management's commentary and responses to questions on today's call may include forward-looking statements which, by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the risk factors section of the company's filings with the SEC. Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during the call in the press release issued today. The press release we issued this afternoon and the presentation for today's call are posted on the investor relations section of our website. We will be filing our 2021 10-K with the SEC next week. Today's discussion of our results of operations for Custom Truck OneSource Inc. or Custom Truck is presented on a historical basis as of or for the three months and the full year end of December 31st, 2021, and prior periods. While our reported results can only include Custom Truck OneSource LP for the period since the April 1st, 2021 merger date, we have presented and will be discussing today pro forma combined results as if NESCO and Custom Truck had operated together for all periods. We believe such combined information is useful to compare how the combined company has performed over time. Joining me today are Fred Ross, CEO, Brian Cmonigle, President and COO, and Brad Meter, CFO. I will now turn the call over to Fred.

Thanks, Brian. I'd like to welcome everyone to today's call. As we report on our first fiscal year operating as a combined company, it is clear that the combination of Nesco and Custom Truck has been successful. With the integration of the business largely complete, we can further focus on providing unparalleled service to our customers, growing our market share, and delivering value creation to our shareholders. I'd like to thank all of our employees, customers, suppliers who supported our business, particularly given some of the challenges our industry has faced for the last two years. Strong Q4 and full-year results highlight the incredible performance by our team. Looking at Q4 on a pro forma basis compared to the prior year quarter, adjusted EBITDA was up 15% despite slightly lower revenues. On a full year basis, adjusted EBITDA was up 13% when you fully adjust for the inventory and accounts receivable reserve charges that we noted during Q2 of 2021. Q4 revenue declined less than $1 million compared to the previous quarter and $49 million versus Q4 of 2020. This decline reflects the impact of continued supply chain issues, particularly on new equipment sales in the early part of the quarter. Our ERS business continues to perform very well, with utilization increasing to 83.7% for the quarter, up from 78.2% for Q4 of 2020 and 81.4% in Q3 of 2021. Our TES business continues to see very strong demand with backlog growing to a record of 412 million, up by 22% just since the end of Q3 and 169% since the end of 2020. Strong demand for both rental and new sales has provided us the opportunity to push price up an appropriate degree. Those price increases coupled with the fantastic job our team has done to control cost and find operating efficiencies has allowed us to expand margins across all key business segments. Finally, we continue to make good progress towards reducing our pro forma leverage, ending the year just below four times after fully adjusting for the previously mentioned reserve charges down from approximately 4.6 times at the time of the merger. Our strong 2020 run results reflect the benefits of our unique business model, on our focus on end markets that exhibit very strong underlining fundamentals. Scale and strong supply relationships allowed us to meet our customers' rental and sales demands during 2021 to the greatest extent possible to navigate various external challenges. Our outlook for 2022 reflects continued excellent diversity of demands across our end markets, which will be further extended as we begin to see the benefits of the infrastructure bill. hopefully in late 2022 or early 2023. While our outlook is tempered by the continued impact of supply chain issues and inflation, we are confident that we will continue to navigate these to the best extent possible. During 2022, we expect to see continued strong revenues, adjusted EBITDA, margin growth across our business segments. Overall, I could not be more excited about the continued favorable prospects for Custom Trucks. With that, I will turn it over to Ryan.