Good afternoon, everyone. Thanks for joining us as we continue day three of Baird's Industrial Conference. I'm Justin Hauke. I'm the senior associate covering specialty contractors, along with Andy Wittmann for the engineering, construction, and facility services names. So presenting next is Custom Truck One Source. This is a unique equipment rental company, kind of specializing in a lot of niche markets with some really strong secular growth dynamics. So Chris Eperjesy is here. He's the company's Chief Financial Officer. He's gonna run through about, you know, 10 minutes or so to give us an overview. We've also got Brian Perman from IR in the audience. And then there's no breakout, but this is obviously a rather informal setting, so we'll do some Q&A at the end, too. But Chris, please. Good morning, everyone. Maybe just to start high level, give you a little bit of an overview of the company. So Custom Truck is a leading integrator, provider of specialty equipment. I'll touch on some of the charts on the lower right there, just to give you an idea of some of the end markets. So our biggest end market would be T&D, so utility space, roughly 65% of our revenue. Infrastructure, broadly defined, is about 20%, and then telecom and rail are each about 5%. In terms of our overall size of our fleet, we have about $1.5 billion of original equipment cost in our fleet. That represents about 10,200 units in the fleet. In terms of the overall size of the company, our TTM revenue is about $1.83 billion, a little over 2,400 employees now, and our LTM adjusted EBITDA is $433 million. In terms of the split of our revenue, you'll see in the lower right there, about two-thirds of our revenue comes from new and used sales, just under a third comes from our rental business, and then the balance comes from parts and services. In terms of that rental fleet, we have roughly... you know, you see 31% there is buckets, 17% diggers, other T&D is 22%, and then a mix across the other end market categories. In terms of our footprint, we have about 35 locations across the US and Canada. And so with that, maybe just a little bit more information in terms of our most recent results. So we had another strong quarter, you know, which is continuing kind of the theme from this year, posted, you know, good revenue, adjusted gross profit, and EBITDA growth. As it shows there, 21% revenue growth in the quarter, 14% adjusted gross profit, 9% adjusted EBITDA. The difference there between the revenue and the adjusted EBITDA in terms of the flow-through, is just the mix of our business. Our new equipment sales business tends to have lower margin than our rental business, and it's outperforming now. As you can see below, TES revenue was up roughly 33% in the quarter, year over year, 12% for our ERS business. Earlier in the year, we talked about a couple of big investments we're making to expand our capacity at our facility in Union Grove, which is now completed and online. A larger project at our main campus in Kansas City, we expect to come online here in the fourth quarter. In a couple slides, I'll talk a little bit about our leverage, but we continue to delever. We, at the time of our deal in April 2021, we had 4.6 times leverage. We're now down to 3.3. Ultimately, our goal is to get below 3 times leverage. In terms of favorable end markets, you know, I think this is one of the compelling stories. Obviously, we have, you know, four key end markets in terms of utility, infrastructure, rail, and telecom, all of which, you know, have really good growth, you know, in terms of the CAGRs for the past few years, as well as expectations, as we look forward. You can see there's some of the sizing of the total spend in each of those markets. We also... You know, as you look at our customer base, it's a high, you know, very diverse customer base, over 3,000 customers, not very concentrated in terms of revenue. Our top 15 customers represent about 25% of revenue. We do have one customer that's roughly 4%, but it falls off pretty quickly after that, and as you'll see there, we have, you know, long tenure, long-term relationship with our customers, 15+ years with each of our top customers. One of the things that we think makes Custom Truck unique and also, you know, creates a competitive mode for us, is our differentiated one-stop-shop model. And so we sell products, we rent products, we sell both new and used equipment, we offer aftermarket parts and services, we offer financing, we help our customers dispose of units. You'll also see on the left, we have, you know, really good unit economic advantages, just given our size and scale, having that combination of the two businesses with our OEM, chassis OEM customers or vendors, body OEMs, as well as attachment OEMs. W e think the model really creates a unique opportunity for us and really benefits our customers in terms of, you know, the ability to do pretty much everything for them. In terms of our footprint, we've talked about this a lot in the past. We do have 35 locations. We are in the process of, you know, trying to expand that. There's a number of different areas that we think, 5 key areas in particular, where we think we have an opportunity: the Pacific Northwest, Northern California, the New York, New Jersey metro area, the Carolinas, and then down in the Southwest. And so, you know, those are areas that we're looking to expand, just to have our footprint. We do have product everywhere, and you know, having locations where we can service product and certainly turn rental units is a big opportunity for us as we look forward. We continue to expand our technicians. We have over 350 technicians at those, 35 locations, as well as 80 mobile technicians. So really have a wide service footprint across the U.S. and Canada. Again, this just highlights the results that I talked about earlier. Again, we've had strong performance year to date, top line growth, 24%, gross profit growth, 18% and 15% in terms of Adjusted EBITDA. As I mentioned earlier, there really is a mixed impact here because all of the businesses have maintained or expanded margins on a year-to-date basis. And so, we're just seeing the impact there of the very strong results we're seeing within our new equipment business. This chart here just lays out our revenue growth and our Adjusted EBITDA growth since the time of our deal. So we ultimately had a business combination in April of 2021 between legacy CTE, so Custom Truck & Equipment with Nesco, and since then we've had 11, you know, 11%+ in terms of CAGR for revenue, 17% for EBITDA. So we've really experienced some significant growth over the past couple of years. Our reporting segments. So we do have three reporting segments. We have ERS, which is Equipment Rental Solutions. That is the business where we rent assets, so those 10,200 units we have out there. We also sell rental assets as they, you know, either get to end of life or as we're trying to renew our fleet. Some of the key metrics that we use are utilization, so that's just average OEC on rent over the total OEC that we have. And so those are the key metrics we use there. Truck and Equipment Sales, or as we call TES, is our business for new equipment sales, and there is a little bit of used sales in there as well. And there, the key metric that we report is new sales backlog, and then we offer aftermarket parts and services across, you know, across the entire business. Balance sheet and CapEx, as I mentioned earlier, we have seen leverage come down significantly since the time of the deal. So, as at the time of the deal, it was 4.6. Every quarter, we've had a reduction of that. Most recent quarter, we're at 3.3 times. In terms of our available liquidity, so we have an ABL, $750 million ABL that is just under $500 million, so we have $250 million plus of availability on that, and almost another $300 million of suppressed availability, with the ability to upsize that facility. One area that we have had significant investment, as we're trying to grow our rental fleet, which you see on the bottom left, is our net rental CapEx. And so you'll see there, gross year to date is roughly $300 million. We set a target of north of $400 million for this year, and then the proceeds from the sale of assets is exactly that, as we sell through some of the older units within our fleet. And then in terms of our outlook, we've had multiple updates of our outlook through the year, where we've raised our guidance. And so most recently in this quarter we raised revenue guidance by $40 million on both the bottom and the top end of our range. So our current guidance is $1.765 billion-$1.87 billion, which would represent 12%-19% growth. And then in terms of our Adjusted EBITDA, $425 million-$445 million, which would represent 9%-13% growth on our $393 million from the prior year. As I mentioned, you know, one of our targets that we typically set is to what we're gonna do within our rental fleet, and so our target this year was to have gross CapEx of roughly $400 million, to grow the overall size of the fleet, a net mid-single to a high single digit. We've kind of, in this quarter, scaled that back a little bit. We think it's gonna be low single digit, just given the demand we've seen on for sale of used equipment. Just a couple of the investment highlights. C learly, we have very favorable end markets that we think just have, you know, good long-term growth for us. The differentiated one-stop-shop, where we're able to rent, sell, and help our customers sell old units as well. W e continue with the integration with Nesco to drive efficiencies within production and within our overall network. And you know, over the last two and a half years, we do have a demonstrated record of really driving top-line growth and bottom-line growth. You know, just given the end markets and the demand we're seeing, both on the rental side and new equipment side, you know, we think that's gonna continue for the next couple of years. So with that, I'll turn it over to Justin. Great. No, appreciate the overview there. So I obviously wanna talk about the recent results and, you know, maybe where you guys are right now. But before we do that, you know, start a little high level. You've been with the company now, I guess almost- Just over a year. Okay, just over a year. Just over a year. So, you know, you came to this industry for a lot of different reasons, but maybe you could just talk a little bit. I mean, there's a lot of equipment rental companies. This one's a little bit specialized in the type of offering that you have. Maybe talk a little bit about the return dynamics, the opportunity for scarcity aspects, things like that, just the competitive environment. Yeah, you know, and so in terms of, I think, big picture, you know, we think we're unique with the one-stop-shop model. W e have good relationships with the chassis manufacturers, with the attachment manufacturers. We're a top five customer with most of them. And so we think that does give us somewhat of a competitive moat when you look at who the competition is. There's really only one large competitor. It's a private company. Other than that, you know, it's really regional, and then much smaller local players, and so when you have $1.5 billion invested in your fleet, that's pretty significant headwind for a competitor to overcome. In terms of the economics, you know, one of the metrics that we often quote is on our rental fleet, we quote a 20%+ ROIC on those units, and that's over the life of an asset. So we rent those units. Typically, we're getting gross margin-adjusted gross margins of roughly 75%. Ultimately, at the end of life, which can be anywhere from a few years to, you know, up to 10 years, we'll sell those units. Residual values have maintained very high, you know, out six, seven, eight years as high as 60%+. And so over the life of that asset, we're typically seeing, you know, low- to mid-20% ROICs, and so we think that's a compelling, you know, investment proposition f or our shareholders, is to have that kind of return on those. We have seen on the new equipment side, a pretty significant expansion in our margins there. Two years ago, I think we were right around 10%, and now we've had quarters more recently where we're 17%-18%, as we look at really expanding into certain specialty and vocational end markets that we think have greater returns. Yeah, and I mean, this is one of the key bottlenecks among many for your customers, is, you know, being able to get equipment. You guys had supply chain issues earlier that you've been able to resolve, your backlogs at kind of these, you know, well over normal levels. But, you know, I guess it's important, that to stress these aren't, this isn't equipment that you can just go get from anybody to work on this. And then also, how penetrated is the rental market in within the clients that you know you look at versus maybe just generic construction? Yeah. We used to have a chart here. I wish we had it, 'cause now I'm gonna forget the figures, so I may look to Brian. But, you know, the general rental space, you know, I think penetration is in the 50%-60% kind of range. I think in the specialty rental, it's 20%-25%, so there's a long ways to go there, and we think there's, you know, upside in terms of, you know, more penetration o n the specialty rental side. And I forgot the second part of your question. Sorry. I was just saying the penetration rate. Yeah. Yeah. Yeah. And so, you know, clearly there's an opportunity there. You know, we wanna do what our customers want us to do. That's why we like the one-stop-shop model. If they wanna purchase an asset, we're able to do that. We have financing, so we're able to help them finance. If they want to rent, you know, as I mentioned, those have great returns for us. So we're... What's interesting is, even with the rise of interest rates, we've continued to see demand on both sides, very strong demand. And so, you know, our backlog is had been as high as over a year. It was roughly 13 months. We're now in that 9-10-month range. We think on a go-forward basis, a more normalized level would be 4-6 months. So you know, it coming down is not a bad thing. It's something that we hope will happen over time. To your comments about the supply chain, you go back, I guess it's six, seven quarters ago, and we had maybe a little over $400 million of inventory. We were definitely constrained from a supply chain. We weren't getting the chassis we needed. We weren't getting the attachments. You know, fast-forward, and we definitely saw at the end of last year an acceleration of an improvement in the overall supply chain. We got back to normalized levels on inventory, probably carrying a little bit more than we normally would as we look at the growth for the balance of this year and into next year. Yeah, no, I think that's an important thing, too, is that easing of the supply chain. I mean, one of the things throughout the year is, you know, you've consistently been able to raise the revenue guidance as you've been able to deploy that fleet. You know, if you just look at it from a headline perspective, you see that the margin's compressing. You made the comment about mix. I think that's a really important... Maybe you could just elaborate on kind of the difference in margin between rental and sales fleet as you work down the backlog. Yeah. So if you look at our three segments, you have ERS, TES, and APS, which is the smallest. Within ERS, there's two components there. There's rental revenue, so the assets that are out on rent. Adjusted gross profit there is mid-70s%, and we've been able to maintain that. The rental asset sales, which is effectively selling those assets as they come off of rent or end of life, you know, typically have been in the low-20% range. And then TES, which had been, you know, high single digit 10%, is now in the 17%-18% range. Where we've seen the most growth has been in TES and rental asset sales, and so on average, that's kind of blending down. But all three of them, including APS, have seen expanded margins over the past couple of years. And so if you look at our EBITDA margin, I think we're in the 23%-24% range. We had been as high as 25-26. That purely is a mixing of the different segments, 'cause all three of our segments, we've seen margins expand. Yeah, and even within the segment level, to your point b ecause the rental segment, you've been selling some old fleet.. Exactly. How's the average age of the fleet moved down? Yeah. I think at the time of the deal, so back in April of 2021, I think it was just under four years, roughly, and we're down to about 3.5 years, which we think is the youngest fleet in the industry. And so, a lot of the rental asset sales we've focused on, that we've pulled out, are really some of those older assets. So then maybe the flip side of that is, you know, the free cash flow you talked about, you've had to put capital out to expand fleet and the inventories, but maybe that becomes a tailwind now as you work down that backlog. Yeah, definitely. We definitely think, you know, setting a... You know, and we'll give guidance at the end of this quarter, but, setting a, you know, a free cash flow positive target for next year, that'll be more meaningful. Getting to the 3x leverage target that we've set, you know, is very realistic for next year. And at the same time, continuing to invest in growing that fleet, 'cause we do expect, and I think we said on the earnings call, you know, our gross number this year was $400 million. We think next year it'll be an even bigger number. Okay. All right. Oh, sure. Last year, you had a return on invested capital somewhere between 8%-10%, if I take out the intangible assets. How does that compare to the 20% that you- You want to repeat the question, too, just- Yeah. So the question was, that when I talked about the equipment rental business, and that we had 20% ROICs on that, when you adjust out on our financial statements, the GAAP financial statements, for intangibles, you get an 8%-10%. I think, part of the answer is, of course, you have corporate costs that are gonna be in there that are not necessarily purely allocated to the rental, the rental side, when I give you the 20%, so that would, that would be one. Two is, I'm not sure how you're calculating your NOPAT, and so if you're... We exclude certain things like, depreciation and amortization, which, I'm assuming you do as well. So I don't have a good answer for why there's the big delta there. I'd probably have to get back to you on that. Okay. A part of the answer is there's also some noise with respect to sales-type lease accounting. Yeah. So that'll adjust the ERS segment, and so there, that's a little bit more complicated to get that side of the answer, and then, of course, there's some of the purchase accounting things that impact the GAAP financials. So on the most recent quarter, which was just Tuesday night, so one of the things you guys talked about, so obviously, the outlook increased, but your rental utilization came down a little bit. The expectation for fleet growth, you know, came down from mid to high single digits to low single digits. Can you talk a little bit about what's driving that in the near term, how you think about that going into 2024, and just elaborate on that? Yeah. So coming out of Q2, we had noted that we saw, throughout the course of Q2, that, utilization was coming down within the T&D space, in particular within the distribution space. And what we were hearing from our customers was there were some supply chain issues with transformers, as well as some of the equipment, and so you know, we reached kind of our trough in July. We've seen now a 400 basis point improvement from there to up to 81%, so we exited the quarter at 81%. Obviously, 400 basis points, you can go back to the trough, which was 77% in mid-July. We definitely think it's temporary. We think it's, you know, it is a little bit of a headwind here at the beginning of Q4, but certainly don't expect it to be anything, you know, a long-term issue. Still as bullish as we've been in terms of overall demand, across all of our end markets. Yeah, I mean, I think it's an important thing to emphasize, 'cause you're not talking about customers cutting their CapEx budgets, it's really t hey're facing kind of where you were a year ago, which is they're working on the project. They just can't bring... You're kind of the last mile of bringing in the equipment. Exactly. Yeah. Yeah. So, that's a little bit of a, I guess, a difference, versus- Absolutely. Yeah. Yeah. All right, what about, you know, and maybe one of the offsetting that was a positive on the rental side is, you know, the pricing sustainability. Mm-hmm. I think your pricing is up 7% or so year to date. Year to date, yeah. What does that compare to historically, and how much elasticity is there, given there is a scarcity impact of what you're delivering? Yeah. You know, I think last year we did, we had a 10% increase. This year, early this year, we had a 6%. We've talked about the fact that typically, the pricing only goes to effect as an asset comes off of rent and goes back on rent. So that can take, you know, I think, on average the rental period is 13 months, and so it'll take 13 months for that to flow through. We're gonna continue to see the benefit of that next year. We clearly expect that there will be some pricing next year as well. O ur goal is to maintain or expand margins, and, you know, we think in this environment, we'll be able to do that and continue to do that next year. What about the, philosophically, I mean, are you agnostic between rental and sale? I would think the rental is probably the thing that's a little more sensitive to near-term impacts, but, all else equal, are you trying to be more rental or indifferent? I mean, we are indifferent. We wanna do what the customer wants. Okay. And so, you know, there's different dynamics for each. Obviously, the sale of a new piece of equipment is immediate cash generation. Yeah. Putting something on rent is gonna take time to get the capital back, you know, but it is at a very high rate. You know, we talked about the high ROICs that we get there, and so, you know, at the end of the day, we're largely indifferent. We wanna do what the customer wants. Okay. I've got one more. Well, I've got seven more, but I'll do one more before I open it up, and that's just on the capital allocation. You've got a somewhat, you know, illiquid stock. Mm-hmm. You accelerated buybacks here in the third quarter, and because of that and the CapEx, you kind of deferred out getting your, your leverage below three, which is, I think your long-term target. Just philosophically, you know, the rationale for that, how you're thinking about capital allocation for 2024, why three times is the right leverage? Yeah. Well, you know the mythical 3x, so we hear it pretty much in every meeting we ever have. You know, it is a goal for us. We certainly wanna get below 3x leverage. We think this business, you know, has performed very well and can perform very, very well at the current leverage levels. But we get it, that it is a target we've set for ourselves. We are gonna continue to invest in the fleet, so there will be that investment that we're gonna have next year. This year, as we looked at the growth that we are experiencing, the expected growth for next year, we thought it was the right decision while there was availability in terms of supply chain, of chassis, of attachments, to make sure that we were protecting ourselves for the growth we're gonna experience here in Q4 next year, and so it was a conscious decision to do that on a near-term basis. But we feel very confident that we're gonna be able to generate cash next year to get us below that 3x, you know, sometime mid-next year. Okay. Sure, Andy. I was just wondering, basically, obviously there's a backlog for the sales, and that makes sense. But, do your customers need to queue up basically to tell you when they're coming in, and need a truck? And how has that changed, over the last year or two? Yeah, so I mean, we, certainly there's a lot of conversations with the customers. We, we track that data and track that information. It's not the same as with new equipment. We don't have, like, a backlog that's generated. W e know customers want equipment. We know equipment that is coming through. You know, I talked about the $400 million of gross CapEx. You know, we're talking with customers. They know that equipment is coming, and we're getting ready. Our leases are month to month, largely, and so that. It's not the same level of visibility you get on a new new piece of equipment order. But it really is, it's more of the day-to-day kind of interacting with customers and really understanding what their projects are, what pieces of equipment they're gonna need, you know, how they're planning out in terms of, you know, the length of time they're gonna have any individual unit that's gonna be out there on rent. And so it really is more just, you know, constant interaction with our customers. I mean, on that point, is that, o ne of the things I was surprised by the guidance, you know, is just the range for the quarter. Mm-hmm. Because it implies either up a fair amount or down a fair amount. Mm-hmm. Is that the piece that's, you know, hard to forecast in terms of a one-quarter impact? I would say of the three, rental revenue is the easier one to project. Certainly, you know, as we do a range for each of the segments, we don't expect them all to come in at the bottom or necessarily all to come in at the top, and so you get a little bit of that noise going on, which is why the range is so wide. T he hardest one probably for us to project and estimate is rental asset sales, because there's RPOs, which are contractual rights of a customer to buy a unit, which they can exercise, you know, at a certain time, and we can't always, we don't always have great visibility to that. Back to your last question, there's also other units where it may be an old unit that we wanna take out of the fleet, and so then we will actively try to market that and sell it. And, you know, these are all titled goods, and so the timing of whether you get it done, you know, at a particular point at the end of a quarter, because typically, in order to recognize it, you have to receive the cash, it has to be titled, and it has to be delivered. Yeah. And so it, it gets a little bit complicated, in particular, in the fourth quarter, in particular, at the end of the year. All right. So low single-digit rental in 4Q, and then the variability is whatever happens on the sales then? Exactly. Okay. Anything else from the audience? Okay. You know, one other thing, I guess, you know, it doesn't really get a lot of attention, but your aftermarket parts and services business. You've done some restructuring in that business. You've also invested in some site expansions. Mm-hmm. Can you elaborate on that? And just, from a footprint standpoint, where are you not able to offer that service or if at all? Yeah. And so all of our locations obviously would have parts and service. Part of the investment we're making in the Kansas City campus is gonna help us expand some of the things on the PTA side which is parts, tools, and accessories. And so we think there's an opportunity there for selling kits and other things, you know, that actually go with vehicles as we sell them, so there's upside there. One area that we've been challenged on the APS side is on the service side, as we've, you know, seen the demand, you know, the high, you know, last year, high 80% utilization. As assets are coming off, those service techs need to service those units to put them back on rent, and so that has impacted the APS business because we prioritize the rental fleet. As we add new sites, as we expand sites, it should provide, you know, a little more opportunity for some uplift there in APS in the future. Great. I think I'm probably gonna leave it there 'cause we've only got about a minute left, unless there's anything else from the audience. Otherwise, thank you very much, Chris. Thank you. Brian, thank you as always, for being here. Thank you.