Herc Holdings Inc.

And welcome to the Herc Holdings Third Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance today, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note, today's event is being recorded. I would now like to turn the conference over to Elizabeth Tagashi. Please go ahead.

Thank you, Rocco, and thank you all for joining us this morning. Welcome, everyone, to our third quarter 2021 earnings conference call. Earlier today, our press release, presentation slides, and 10Q were filed with the SEC, and all of them are posted on the events page of our IR website at ir.herkrentals.com. This morning, I'm joined by Larry Silver, President and Chief Executive Officer, Aaron Birnbaum, Senior Vice President and Chief Operating Officer, and Mark Erion, Senior Vice President and Chief Financial Officer. We'll review our third quarter and year-to-date results with comments on operations and our financials, including our view of the industry and our strategic outlook. The prepared remarks will be followed by an open Q&A. Before we begin our formal remarks, I'd like to remind you to review are safe harbor statements on slide three. Today's call will include forward-looking statements. These statements are based on the environment as we see it today, and therefore involve risks and uncertainties. I would caution you that our actual results could differ materially from the forward-looking statements made on this call. You should also refer to the risk factor section of our annual report on Form 10-K for the year ended December 31, 2020. In addition to the financial results presented on a GAAP basis, we will be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliations for these non-GAAP measures to the closest GAAP equivalent can be found in the conference call materials. Finally, a replay of this call can be accessed via dial-in or through a webcast on our website. Replay instructions were included in our earnings release this morning. We have not given permission for any other recording of this call and do not approve or sanction any transcribing of the call. I'll now turn the call over to Larry.

Thank you, Elizabeth, and good morning, everyone. Please turn to slide number four. Our third quarter results continue to demonstrate outstanding operational execution and reflect new records in many of our financial metrics. Slide four shows the third quarter results over the last three years. Given the unusual performance in 2020 due to the impact of COVID-19, we share a comparison with not only 2020 but 2019. As you can see, our performance in 2021 clearly accelerated our growth trajectory. Equipment rental revenue was $519.6 million in the third quarter, an increase of 29.2% or $117.3 million compared to the prior year and 13.1% over 2019. This increase was driven by solid performance in our core business and growing market share from our specialty businesses, both of which continue to outpace our pre-pandemic performance in 2019. Adjusted EBITDA grew by 25% over prior year and 17.4% over 2019. Our focus on operating leverage improved year-over-year adjusted EBITDA margin by 160 basis points to 44.7% in the third quarter of 2021. We reported net income of $72.3 million, or $2.37 per diluted share in the third quarter, compared with $39.9 million, or $1.35 per diluted share last year. We are on our way to a record 2021. This is an exciting time for Team HERC, And as you know from our growth goals we presented at our recent investor day, we have the appetite and desire to achieve greater success. Our industry-leading rate management delivered strong results in a favorable operating environment, which benefited from tight equipment supply and steady rental demand. Given the indications for the rest of the year, we are affirming the full-year adjusted EBITDA guidance range we provided at our investor day of $870 million to $890 million, which was the third time we raised guidance. Now, please turn to slide number five. 2021 has turned out to be a pivotal year for the equipment rental industry. Tight supplies of equipment and steady demand have created an optimal environment for us. We increased dollar utilization year over year by 840 basis points to 46 percent in the third quarter, reflecting improved volume, mix, and rate. Our focus on the top MSAs in North America and filling out our urban density and select locations is driving both our greenfield and acquisition targets. Since December 2020, we completed five acquisitions for a cumulative total purchase price of $280 million and announced our sixth acquisition, Rapid Equipment Rental of Toronto, earlier this month. We also recently announced the declaration of our first quarterly dividend of 50 cents per share to shareholders of record as of October 20th and payable on November 4th. Our strong year-to-date performance is clearly providing the momentum and growth that we expect going forward. Now please turn to slide number six. With a history of over 56 years in the equipment rental industry, our 5,100 plus team members works hard to ensure our customers achieve optimal performance safely, efficiently, and effectively every day. Everything we do is built on our promise and commitment to help our customers and communities build a brighter future. As of today, we are now operating approximately 295 locations across the United States and Canada in 39 states and five provinces. We're excited about the momentum we are generating and in developing our M&A pipelines. Please turn to slide number seven. We introduced our strategy shifting into high gear at our investor day last month. The business model is simple, yet it takes experience and commitment to truly capitalize on the opportunities we have in an expanding addressable equipment market and truly fragmented industry. Our team is hungry to take advantage of the exceptional opportunity before us. Now, for more details about our operations in the quarter, and our outlook. Here's Aaron Birnbaum, our chief operating officer.