Herc Holdings Inc.

Thank you for standing by. My name is John and I'll be your conference operator for today. At this time, I would like to welcome everyone to the Herc Holdings Third Quarter 2024 earnings call at webcast. All lines have been placed in mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. To withdraw your question, please press star one again. Thank you. I would now like to turn the call over to Leslie Hunziker, Head of Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to HERC Rental's third quarter 2024 earnings conference call and webcast. Earlier today, our press release and presentation slides were furnished, and our 10Q was filed with the SEC. All are posted on the events page of our IR website. Today, we're reviewing our third quarter 2024 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. Now let's move to our safe harbor and GAAP reconciliation 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, 2023. In addition to the financial results presented on a GAAP basis, we'll be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliation for these non-GAAP measures and to the closest GAAP equivalent can be found in the conference call material. A replay of this call can be accessed via dial-in or through the 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. Finally, please mark your calendars to join our management meetings at the Baird Global Industrials Conference in Chicago on November 12th, North Coast Research's Virtual Management Access Forum on November 13th, Redburn Atlantic's Virtual CEO Conference on December 3rd, and the Mellius Research Conference in New York on December 11th. We hope to see you there. This morning I'm joined by Larry Silber, President and Chief Executive Officer, Aaron Birnbaum, Senior Vice President and Chief Operating Officer, and Mark Humphrey, Senior Vice President and Chief Financial Officer. I'll now turn the call over to Larry.

Thank you, Leslie, and good morning, everyone. Let's turn to slide number four. In the third quarter, we continue to deliver on our long-term growth strategies, focusing on the fundamentals of increasing market share and geographic density for scale, optimizing fleet mix with greater penetration of our specialty equipment, and leveraging proprietary and industry data and technologies to enhance our competitive position and customer satisfaction. We're continuing to make good progress on all of these initiatives. Year to date, we've acquired 26 locations and opened 16 greenfield branches that will drive market share and revenue efficiencies in key metropolitan areas. in line with our urban market growth strategy. In addition to desirable locations, the acquisitions bring complimentary fleet categories, valuable new team members with a strong cultural fit, and new local account opportunities. Our enhanced fleet mix allows us to cross-sell our specialty products to these typically GenRent customers. We've increased our specialty fleet capex this year to support share of wallet opportunities as well as the incremental demand for megaprojects and potential business with customers in newer and market verticals where we're capturing greater penetration. Now, moving to slide five, this is our year-to-date financial scorecard, which includes the Sinalese business. With the softness in the local market continuing as developers await further interest rate cuts, this year's operating performance really emphasizes the advantages of HERCs, megaproject participation, customer project and geographic diversity, specialty equipment and services, strategic acquisitions, and of course, pricing discipline. Rental rate was up 2.3% year-over-year in the quarter and 3.5% year-to-date. That's on top of a tough comp of 7.2% over the same nine-month period last year and a 5.4% rate increase in the first three quarters of 2022. Further pricing is improving on a sequential basis, reflecting our leadership as well as ongoing industry discipline. And based on benchmark data, Herc volume continues to significantly outpace overall rental market growth on both an organic and total revenue basis. Adjusted EBITDA margin is running slightly ahead of last year to date results, despite an unfavorable trade-off in profitability as 2024 acquisitions and greenfields initially generate lower incremental margins than our established local account business. Ultimately, Over an 18 to 24-month period, these new locations will become fully accretive and will further help drive scale efficiencies that make them a valuable component of our long-term profitability plan. Year-to-date, ROIC is being impacted by some near-term inefficiencies, including those from new locations, which will improve over time. Mark will walk you through the year-over-year comparison in detail in just a minute. But on a favorable note, Fleet efficiency on an organic basis is positive for the nine months year to date, and that's due to a strong execution by our fleet, sales, and operations team. In such a dynamic market, they've stayed focused on fleet productivity, and it's paid off. As we think about the remainder of the year, let me jump to slide number six to share some thoughts. We expect, once again, generate record rental revenue in the fourth quarter as megaprojects accelerate, new acquisitions provide incremental contributions, and a revenue related to our support of the recovery efforts for the two recent hurricanes are captured. When it comes to margin, we're going to continually to carefully manage the cost structure and fleet utilization to address this near-term disparity of demand we're seeing between certain regions, customer, and project type. We'll also continue our efforts to pull synergies from recent acquisitions as quickly as possible to enhance profitability. Experience, agility, and discipline will help navigate this timing issue in the local market. For NetFleet CapEx, we've taken in most of our new fleet at this point, and we'll ramp up seasonal dispositions over the next two months. Our fleet group has done an excellent job in managing the timing and allocation of investments in new equipment, and adjusting the amounts of new fleet against fleet dispositions based on regional demand trends. From what we're continuing to see in the industry data, the overall market is being equally disciplined when it comes to fleet growth. As always, we'll manage our costs and assets carefully while we continue to support the growth of our business. Aaron will talk a little bit more about current operating trends, and then Mark will take you through the core business performance and more specific puts and takes that support our full-year guidance range. Aaron?