Herc Holdings Inc.

Hello and welcome to the Herc Holding Q1 earnings call and webcast. All lines have been placed on 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, see the press star followed by the number one on your telephone keypad. If you would like to return your question, press star one again. And please limit to one question and one follow-up. Now, I would like to turn the call over to Leslie Hunziker, Head of Investor Relations Leslie, please go ahead.

Thank you, operator, and good morning, everyone. Today, we're reviewing our first quarter 2025 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. Earlier today, our press release and presentation slides were furnished, and our thank you was filed with the SEC. All are posted on the events page of our IR website. Now, let's move on to our safe harbor and gap 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, 2024. 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. Reconciliations beneath non-GAAP measures to the closest GAAP equivalent can be found in the conference call materials. 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 Bank of America Industrials Conference in New York on May 13th. and the KeyBank Industrials Conference in Boston on May 29th. We hope to see you at one of these events. This morning, I'm joined by Larry Silver, 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. Our first quarter results reflect the strength and resiliency of our diversified business model and best-in-class talent. Team HERC continued to demonstrate remarkable flexibility and discipline leadership in a macro environment characterized by divergent trends between strength and national accounts from new large project development and challenges in the local market related to prolonged elevated interest rates. The team also executed very well navigating demand volatility in the recent quarter resulting from unusually cold weather in late January and mid-February in the southern states. which caused us to temporarily close some of our branches and further impacted daily and weekly local rentals during that period. Despite the headwinds, we continued to leverage our broad capabilities, capture new opportunities, and focus on what we control, while maintaining a strong commitment to safety and serving our customers. With utilization snapping back in March, an incremental upside from 2024 acquisitions, and strong megaproject activity, We delivered equipment rental revenue growth of approximately 5% in the quarter, excluding the Sinalese business, which is currently held for sale. We continue to follow our playbook, leveraging branch network scale, our broad fleet mix, technology leadership, and capital and operating discipline to position us to manage across the cycle and generate sustainable growth over the long term. Now, let's turn to slide number four for a rundown on these growth strategies. As you know, in the first quarter we executed a merger agreement to acquire H&E Equipment Services and its 160 U.S. branch locations to expand our scale, geographic coverage, and long-term opportunities. Integrating this acquisition will be our primary focus over the next several years, and therefore, as stated, we are pausing other M&A initiatives for the time being and completing the remaining in-flight greenfields. Of those, we opened three new facilities in the quarter. The H&E acquisition, like others before it, helped to drive revenue and fleet efficiencies in key metropolitan areas in line with our urban market growth strategy. In addition to its desirable locations, H&E brings complementary fleet categories, valuable new team members with a strong cultural fit, and greater local account presence while improving our national account capabilities. At its core, the acquisition strategy for H&E is no different than the strategy used for the other 50-plus acquisitions we've completed. And while it's our largest, we view this as quite manageable. Moving on to our fleet mix strategy, we're continuing to increase specialty fleet CapEx to be able to cross-sell our expert solutions to acquire GenRent customers. to capture share of wallet opportunities and to support the incremental demand from megaprojects. Specialty Solutions are a resilient product offering addressing urgent, supplemental, and critical demand situations. Technology is another important value driver for HERC. We continue to advance our proprietary and customized internal applications for pricing, fleet management, logistics and transportation, while delivering more value to our customers through our industry-leading, pro-control account management platform. Finally, we are disciplined stewards of capital by strategically managing fleet investments to drive asset productivity and taking a targeted, agile approach to addressing demand trends. We are focused on efficiency and driving higher returns on our investments. Now, on slide number five, I want to take just a minute to preempt some of your questions about the current demand environment and the potential impact of tariffs on our business. Also, I'll provide a quick update on progress towards the closing of the acquisition. First, as we've stated, the operating landscape continues to be a tale of two contrasting trends. Our national account business is growing, fueled by federal and private funding for large construction projects like data centers manufacturer insuring, and LNG facilities. We are not seeing any emerging cancellation trends or changes in the level of activity or scope of projects for 2025. And we are not seeing any unusual level of delays outside the normal course for modifying designs, juggling permits, or securing labor. It's too early to tell how that unfolds as developers get clarity around the administration's policy outcomes. We've already seen some incremental insuring announcements from chips and pharmaceutical manufacturers. But we'll have to wait and see how all of that plays out. Today, it seems it's business as usual for the large national accounts. On the local landscape, there continues to be challenges, and we'll start anniversaring those here in the second quarter. While there are ongoing opportunities in facility maintenance, municipal and infrastructure projects, and the stalwart education and healthcare end markets, Other more interest rate sensitive jobs continue to be on hold, restricting overall local account growth. With interest rates remaining high, it's not getting any better, but it continues to be manageable for those of us with diverse end markets, customers, product offerings, and geographic coverage. If you don't have other opportunities to pivot to, it's definitely a challenging local operating environment. Having said that, there's no real significant change for us in the local marketplace. When it comes to tariffs, we don't expect any direct impact to our procurement costs in 2025. We've sourced the vast majority of our fleet domestically, and orders and pricing for this year have already been secured. Regarding any indirect impact that might stem from our customers' tariff exposure, again, it's too early to tell. But for the national account projects already underway and those that are scheduled to launch this year, as far as we know now, There have been no changes to existing plans. Strategic investments, process improvement, and enterprise-wide cost management are where we're focused as we work to successfully navigate this dynamic operating cycle. Now, to quickly update you on the acquisition. There's nothing really new to report if you've been following our filings. Last week, we refiled our HSR application in order to give the FTC more time to complete their review process. We've been working closely with them, answering questions and supplying requested data in a timely fashion. The bottom line is that we will be supportive of their process and are confident that with a combined 6% share nationally, we won't have any unmanageable areas of concern. Sometimes these things just take time. As you know, the S4 has been filed related to the new shares we'll be issuing. We received a first round of comments from the SEC and addressed those in an amended filing on Friday. So that process is going smoothly and we have no concerns here either. The way the tender offering works is that we need to complete the regulatory review and have a majority of the shares tendered before closing. So our focus continues to be getting through the regulatory process as expeditiously as possible. Finally, we started preparing for the integration based on a targeted mid-year closing. Our integration management office is led by one of our most senior field executives. Our integration team, which includes leaders from HR, IT, and field operations, has organized around the drivers of value and the operating model. I'm pleased with the work that's being done. At the same time, We say it a lot, and we say it with emphasis. We cannot take our eyes off running our business. It's my job to make sure we've got the bandwidth to be able to successfully deliver on our commitments. The integration team has clear roles and responsibilities, and we've engaged the Boston Consulting Group to support our cultural integration and change management initiatives. That allows our operators to focus on our customers and our business. Communication is going to be a key to a successful outcome. So that will be a priority all along the way. Now I'll turn the call over to Aaron, who will talk a little bit more about operating trends. And then Mark will take you through the first quarter business performance drivers. Aaron.