Good morning, everyone. I'm Scott Schneeberger, the Senior Business and Industrial Services Analyst at Oppenheimer. Thank you all for joining us today. It's my pleasure to have from Custom Truck One Source CEO Ryan McMonagle, CFO Chris Eperjesy, and Vice President of Investor Relations Brian Perman here to speak on the company's investment story. Custom Truck One Source is one of the largest providers, specialty rental equipment, parts, tools, accessories, services to the electric utility transmission and distribution, telecommunications, and rail markets in North America. The differentiated one-stop shop business model, Custom Truck offers its specialized equipment to a diverse customer base for the maintenance, repair, upgrade, installation of critical infrastructure assets, including electric lines, telecommunications networks, and rail systems. The company's coast-to-coast rental fleet of more than 10,300 units includes aerial devices, boom trucks, cranes, and digger derricks, pressure diggers, stringing gear, hi-rail equipment, repair parts, tools, and accessories. We'll be using a fireside chat format. I'll start it out with some high-level questions for the majority of the time period, but there is an opportunity to ask questions. I will ask on behalf of team management, so please send those in through your device to me, and I will pose those questions. We're going to get started now. For first question, gentlemen, could you please provide an overview of the portfolio of specialty rental fleet offerings that you have and highlight their respective asset characteristics such as asset life, rental durations, and fleet age? Thanks. Absolutely, Scott. Thank you for having us as always. We appreciate you engaging in the Custom Truck story, and we love telling the story, so we're happy to be here today and answer as many questions as there may be. But sure, but we'll start with the rental fleet, and then we'll maybe pull back and talk about the company overall. But the rental fleet is a huge part of who we are and what we do. The rental fleet, we report through our ERS segment. So as we talk about some of the segment numbers, that will be clear. But the rental fleet today, as Scott said, is just over 10,000 pieces, 10,300 to be exact. We've got almost $1.5 billion of original equipment cost tied up in the rental fleet today. As Scott said, the rental fleet primarily services the T&D industry, Transmission and Distribution, or the utility industry. About 70% of the rental fleet today is made up of bucket trucks, which are used to obviously work on power lines and get up into the air, digger derricks, which are used primarily to dig holes in the ground, and then other T&D equipment. That's where we include things like our pulling and stringing equipment. We include things like our track equipment in particular. Those three categories account for about 70% of the rental fleet today. Then we have things like cranes. We have railroad equipment. Railroad equipment for us means chassis-mounted gear that has rail track, has rail gear on it so that it can run on the rail track. We have telecom equipment, and then we have other specialty vocational trucks. So things like water trucks and dump trucks and hydro excavation equipment are all included in that category. So again, overall, it's 10,000 pieces. We'll talk more about the Transmission and Distribution and market, and certainly given what we reported in Q1 here in a few questions. And then just a few stats. So the fleet today is about three and a half years old. That's the average age of the fleet. So we obviously have everything from assets that were added last quarter to assets that are of course meaningfully older. And when we think about useful life, we think that age is very young in the specialty rental category. When we think about useful life, you're talking about useful lives that are kind of in the 10 years on the short side. And some of our larger cranes have 20+ years of useful life. And so one of the things we love about the fleet is keeping a younger fleet. We think that customers prefer to use our equipment. And there's, of course, the opportunity to age the fleet if we choose to do that. So I'll stop there, Scott, and let you kind of get into the broader business. Great. Thanks. Appreciate that, Ryan. You are a unique one-stop shop business model. I think it would be good to go into how you're differentiated via your integrated production capabilities and broad offering of rental sales and aftermarket parts and services. Yeah, thanks, Scott. I'll take that one. We believe that Custom Truck has a unique value proposition, as you noted in your question. We believe that we do benefit from that integrated production capabilities with both production capabilities and the ability to customize products for our customers. We buy the chassis. We buy the attachment from the respective OEMs. What we do is we put that together. So we think there is some magic in having that integrated production capability. We also know that we have a lower cost than if we were buying those completed units from someone else, from some other providers out there. So we think there's real unit economic advantages when you think about rental economics and then the sales gross margin that we realize. On the rental front, as Ryan noted, we have a rental fleet that's nearly $1.5 billion of original equipment costs and over 10,300 units strong. On the sales side, our new and used sales of equipment were over $1.2 billion last year and another probably $250 million-$300 million of product that we built here and then put into our rental fleet. And then certainly rounding out our offering is we have the aftermarket parts and services across now 40 locations, which provide that flexibility in managing our rental fleet, but also allows us to offer superior customer service for both rental and sales customers. Then kind of rounding out our product offering, we also have finance offerings via Custom Truck Capital, and then we also have the ability to help our customers as well as our rental operations team with the disposal of assets as they come off rent. So we really think there are real customer benefits from the one-stop shop. We can provide that end-to-end solution. We offer one single point of contact for our customers, whether they're renting equipment, buying equipment, or having equipment service. And then, of course, we have the ability to customize that equipment, given our integrated production capabilities, to really fit their needs. And all of this, in the end, benefits us because it does provide, we believe, superior unit economics. It certainly creates a competitive size and scale advantage for us. It allows for production efficiencies, given both the rental and the new equipment build, and allows for cost leverage. And then, of course, all of this really leads to the ability for us to increase the customer share of wallet. And so as we look at the business, we're really happy with the ROICs that we generate from both selling assets or kind of the annualized IRR that we're generating over the life of a rental asset. And certainly, in the end, when we sell it, they tend to maintain very high residual value. So again, we think the one-stop shop provides a unique value proposition for Custom Truck and our customers. Thanks, Chris. Probably now a good time to get into the end markets you serve and kind of a discussion on current demand trends that you're witnessing. Sure. Yeah, there are, Scott, we talk about four primary end markets. And in particular, the largest end market is utility or T&D, Transmission and Distribution. So I mentioned the T&D is about 70% of our rental fleet. It's about 60% of our overall, right? So it is our largest end market by far. And look, there are very good macro demand drivers still in T&D, right? When we think about kind of AI and what's happening with data center demand short term, when you think about electrification that's coming and continuing to require more and more power, when you think about just the investment that has to happen in the grid, those are all very good demand drivers. We can talk about some now, but we are seeing so very good macro perspective. That's certainly what we believe. It's certainly what we see. It's certainly how we're thinking about our investment horizon then. We are seeing kind of a short-term pocket of slowing demand, which we'll talk about in a minute. I think it's important, right, to understand that we think it's short term. We think there are certainly very clear things to track, right, that will demonstrate when that comes back. We're looking, obviously, we're talking to our customers first and foremost. I think that's the most important thing that we're doing on a daily basis. We've got great relationships with our customers who are typically the utility contractors. We're kind of listening to them as they talk about their own backlog and the work that they're doing. Then we're tracking more of kind of IOU CapEx and what's happening kind of from a macro perspective, both with IOUs and their CapEx spending, and then also with some of the larger transmission jobs that are out there. The short-term pocket we're seeing is mostly driven by transmission, right? So we're seeing that our OEC on rent for our transmission equipment in particular is off meaningfully. All of the other parts of our rental fleet are very close to normal and very historic utilization rates, so in the high 70s up into the 80% range. So we're still seeing very good utilization outside of the transmission category. So that's something we'll come back to. Transmission and Distribution are the biggest part of our end market. The next biggest end market that we serve, Scott, is infrastructure. Infrastructure accounts for just under 25% of revenue. That is a category that we sell into more than we rent into. So that's reflected some in our TES numbers and our TES performance, where even with an overall disappointing Q1, we had very good growth in the TES segment. It was up 15%. That's really where specialty infrastructure works for us. That's specialty dump trucks. It's things like our water trucks. It's things like our tractors and our trailers. It's things like our hydro excavators and our roll-off equipment that we put in that category. I think we're continuing to see very good demand for those types of pieces of equipment. We think some of that is related to the IIJA and some of the federal dollars that are flowing. That seems to be where we're seeing federal dollars flow in the near term. So we feel good kind of about that end market. And then the other two that we talk about are rail and telecom. Each of those are about 5% of our revenue. And we are seeing continued opportunity to invest in telecom. We see opportunity to continue to sell equipment into that market. We have some rental that we're putting into that market. And then rail to us is kind of I kind of call it that steady plotter where there's just continued demand for rail equipment in the Class I railroads and the commuter rail and in some of the short line rail too. And so those are our four primary end markets. We have a bullish call on all four of them. T&D is the largest, as I said. We think we're riding through kind of a short-term wall here, but fully expect that it will come back. We've been talking about later this year and certainly feel good about the implications for that sector for 2025 and then 2026 as well. Thanks, Ryan. Yeah, let's delve in a little deeper on that right now. Last week, you reported first quarter a little bit below expectations, and it was this low in the T&D market. If you can speak a little bit more specifically as to how it impacted you, what you're seeing as far as the short-term negative impact, how it's impacting you, and some things maybe you can do in the interim. As you just mentioned, you anticipate everything should be back on track by 2025. But let's and I don't know that you can predict when it will come out of the wall, but any thoughts on that as well on timing to the extent you can gauge that? Thanks. Sure. Yep. No. And as I said upfront, T&D is about 70% of our rental fleet. It's about 60% of our overall revenue. And certainly, when there's a lull in Transmission and Distribution, it certainly impacts our ERS segment the most. And that's what we've seen so far in Q1. It's certainly how we're thinking about the rest of 2024. But it means a decrease in rental revenue, which is what we talked about on the call. And the fleet is running kind of in the low 70% from a utilization perspective right now. And so that is below, obviously, where it's been for the last 10 quarters, 12 quarters. And so we're managing through that piece of business. But that impacts ERS revenue. The other thing that we've seen is that we've seen some pullback in the sale of rental assets as they're coming out of the fleet. So when we gave guidance in Q1, those were the two things that really impacted our revenue guidance more than anything as we pulled back our ERS revenue guidance there. What we're watching, as I said, what we're watching, though, to say when is it going to turn are first and foremost our conversations with our customers, great relationships with our customers, and so kind of ongoing dialogue about when are they expecting to go back to work. They all have a view that there is a delay in the work. They are not talking about any work that's been canceled. And so to me, there is a delay in when that work has to be done, which is consistent with the macro view of what's going on, the amount of investment that has to be made in the T&D sector. So we're listening to that. As I said, we're also watching what's happening with some of the larger transmission projects and some of the regulatory hurdles that are in place when you think about some of what FERC and their meeting coming up actually next week, where they're going to provide some more guidance on approval of some of these jobs. And then we're also watching what's happening more broadly with funding for IOUs. And as they think about how they're raising capital, how they're deploying capital in both transmission projects and distribution projects and generation projects as well. And so we're trying to take a macro view of what's happening from a spend perspective, and then what are we seeing from our customers' perspective to really make sure we've got a good sense for what's going on in that market, when it will return. As you said, Scott, we don't know if it will return right away. We think it will return soon. That's certainly based on our conversations with our customers. We've talked about the latter half of this year for sure, but do feel like it should be possible in 2025. Now with a few more days since we've reported, we feel like what we've been talking about is consistent with what a lot of the public utility contractors have been talking about over the last week or so as well. We feel like it's consistent from how we're understanding it and how they're talking about it and how we are talking about it so far in 2025. Thanks. Just a real quick follow-up on that, Ryan. Do you feel that you're maintaining market share? I realize you have this low, and it's tough to call, but are you guys holding up fairly well as far as what you can be doing? We do. Yeah, no, it's a great question, and thanks for asking that. But yes, we do. We feel like we're executing well. We don't feel like we are losing to somebody else in the market. We feel like we're holding on to share, continuing to grow where we can. And there are pockets of growth, right? I mean, the rental fleet is at 72% utilization. And so there's north of $1 billion of equipment that's on rent. So we are continuing to grow. We're continuing to add assets where we can and continuing to deploy to put assets on rent where it makes sense. But yes, we absolutely feel like we are maintaining share even in the slowdown. And let me answer the second part of your question too, which I skipped. But because we're seeing a bit of a slowdown, there's two things that we're doing. We're obviously managing the cost side of our business as much as we can. And so being very thoughtful in how we deploy SG&A and the pace at which we grow, we're being thoughtful in how we deploy SG&A in the context of, "Hey, we know that this is going to come back. We believe that this is going to come back later this year and heading into next year." So we want to be thoughtful, obviously, on how we manage the SG&A side of the business. And the other thing that we're doing, which we reaffirmed, was we're very focused on generating cash this year, which I'll let Chris talk to more a little bit later in our conversation. But we're very focused on generating cash and so improving that even when the rental business slows down, we can pull back on our CapEx and generate cash during this time period as well. Excellent. Thanks. I want to circle back. You were mentioning infrastructure and the infrastructure bill. Just what are you seeing there? It sounds like you're pretty happy with the demand. And those funds were slow to flow. So just curious what you're seeing on that versus maybe this time last year or just three, six months ago and what the outlook looks like. Yep. I think we think that we're starting to see some of those funds flow. We're thinking first on the infrastructure side of the business. The IIJA will impact both our infrastructure end market and our utility end market. We think we're starting to see some of those dollars flow that are impacting infrastructure right now. So as we think about the demand that we're continuing to see in things like our dump trucks and our roll-off trucks and our water trucks in particular, we think that there is some impact from federal dollars there, which is good. We're starting to hear about some federal dollars being released for more transmission-type work. It's still hearing. It's not seeing yet. And so I think those are still early days from some of that capital and it being deployed into some of the transmission projects that have been announced. We feel like that will be a continued good tailwind later this year and certainly heading into next year on that side of the business as well. Thanks. Let's hit also on supply chain. Certainly, the last couple of years, there have been some supply chain constraints that have impacted the market in your business. It seems like that's been alleviating, but maybe not completely. Could you discuss some of the indicators you track there, what you hear from suppliers, and just the state of the union on that and going forward? Yep. No. Certainly, supply chain was absolutely an issue for the last two years for us. It's something we talked about, just availability of equipment coming into COVID and certainly in the last two years. We believe that it has improved. It's certainly not the hindrance that it was, right? So there's a couple of areas I'll talk about, Scott. On the chassis side, we feel like there is much more availability of chassis, Class 8 chassis in particular. There's certainly availability there. I think that obviously, some of the chassis OEMs are seeing some pullback, and they're over-the-road business. I think it frees up some Class 8 chassis for more vocational applications. So we're seeing good flow of Class 8 chassis. We're seeing pretty good flow on the Class 7 side as well, which are the two areas that we primarily participate. And then we're seeing the availability of Class 5 chassis as well. And so I think overall, we feel pretty good about the chassis situation. There are still pockets, to your point, Scott. There are still pockets of things that are causing some delays. There are some constraints and things like transmissions that I think are impacting unlimited availability there, but it's still very good. And then our attachment suppliers, I think, have been able to perform well. So attachment suppliers have been able to deliver much better clips. And I think we feel very good about the relationship with Terex, who's our largest attachment provider, and then other names like Versalift and Galbreath, which are large suppliers to us as well. So we feel good about that. And then we talked about several quarters ago, the team had done a lot of work to make sure we've got broad diversity when it comes to the body suppliers. And so I think we're starting to see the benefits of that. So we feel like that flow of product has improved and is not kind of a constraint for us. There are still one-off issues, right, that show up. That will always be the nature of our business, but certainly feel like supply chain has improved. And Chris has talked about it, but we've made the decision to make sure we are carrying plenty of inventory to help mitigate kind of any disruption in that supply chain. I think that's been strategic and has been a big part of why we've been able to grow as much as we did last year, 29% revenue growth on the TES side of the business and then 15% revenue growth there so far this year as well. Thanks. Sounds good. Now, putting this all together and going to the rental environment and the wall in T&D, imagine that puts some strain on pricing. But if you could just speak to the environment and how you're weathering it and your strategy. Yeah. No, I think, look, historically, we've been talking about being able to take price to offset inflation. We're seeing kind of input costs increase, I think. In the good news camp, we're not seeing kind of the pace of inflation that we've seen over the last several years. And so, Scott, when you layer that into what's going on from the demand side of the equation, when you think about rental utilization in particular, we have made the decision to not increase price there. We've been able to hold price largely from rental rates that we're charging. We still have some of the price increases that we communicated last year that will continue to flow through the business, right? If you remember, it takes about 12 months for our fleet to cycle. So we're still able to generally hold kind of those pricing numbers. Then on the TES side of the business, I think we've tried to hold price as best we can. In Q1, we did report some expansion of our TES gross margin. A lot of that was due to operational efficiencies from our production team there sort of to continue to kind of try to take out costs on that side of the business. Given what's going on the demand side, there is more pressure on price, but we're doing the best we can to manage that as the market will allow us to. I've got a couple of questions in the queue, and we've got 10 minutes left. So I'm going to ask one or two more, but I want to make sure we have time to get to those queuing up. So I guess one thing, just this is a kind of high-level question that I've had, is your approach to existing and new customers in both rental and sales, what's your approach? What's your process? Yeah. It's a great question. And we see a lot of room to grow, right, there on both sides of the business. So there are new customers. Look, there are new customers that we've brought into our rental business even in the last quarter that have contributed a meaningful portion of the rental revenue that we realized in Q1. So we're still finding plenty of new customers there. We talk about overall kind of $30 billion-plus addressable market when you think about new sales and you think about rental. And so even today, just over $1.8 billion, right, there's still plenty of room to grow and to continue to grow market share in both the rental category and on the sales side of the business. So we think there are plenty of new customers, and then we think there's opportunity to expand share of wallet with existing customers also. The sales commercial team and the rental commercial team are both focused on that. Selling the broad breadth of product that we have in the portfolio is a big part of that and then challenging the team to go after new customer acquisition as well. I think we're seeing good dividends from both of those strategies. Thanks. One more before we get to the lines. You made two tuck-in acquisitions in the first quarter, and you've also been doing some new branch openings in the back of 2023. Can you just speak to your expansion approach and maybe a little bit more detail on the recent acquisitions? Thanks. Yeah, I'll go ahead and take that one, Scott. Thanks. We've been talking over the past couple of years that one of the areas where focus is really the opportunity to invest in some of the underserved regions that we had on our footprint. That was the Pacific Northwest, Northern California, New York, New Jersey metro area, the Carolinas, and then the Southwest. And so as you mentioned or noted, we've announced three openings: Casa Grande, Arizona; Sacramento; and Salt Lake City, Utah; and then recently, two acquisitions, one at the end of Q1 and then one just after Q1 and Q2, relatively small, again, a part of our strategy to really expand that national footprint, especially into underserved regions. And so as we think about M&A, it really is going to be more of these kind of tuck-in strategic as we look at the footprint. In terms of the pipeline, there's nothing that I would call of size. The one that was disclosed in our Q1 was $1.5 million. The one that was in Q2 wasn't that much bigger. So they're going to be relatively small in terms of size. In terms of our branch opening strategy, we've said publicly 1-3 a year is kind of the right number to think about as we go forward, as we continue to expand that geographic footprint. And maybe just to touch on one other topic, as we think about all this in terms of our capital allocation strategy, we do still want to delever. We had set a goal to get below 3. We've modified that to 3.5 times. At the time of the deal close back in April 2021, we were 4.6. We got as low as 3.3 at the end of or the middle of last year. As Ryan mentioned, we've had some significant investment, which we think is very strategic in inventory as we look at supply chain and the growth we're going to experience. And so that was one area. And then also, given where the stock price has been trading, we thought it was a good use of capital to buy back some of our shares. And so it has delayed a little bit, that target to get below 3, but we do expect to generate $100 million of free cash flow this year, leveraged free cash flow that we'll use to pay down some debt to get us back below that 3.5x leverage. Okay. Thanks. I appreciate that, Chris. That was one of the questions. So good that we got out ahead of that latter part on capital allocation. Let me go over to our questions. All right. Can you comment on what utilization is embedded in 2024 guidance relative to first-quarter rental utilization? Scott, I'm sorry. I missed the first part of that. Could you just? Yeah. I didn't phrase it well. Let me read it again. Can you comment on what utilization is embedded in 2024 guidance relative to first-quarter rental utilization? Yeah. I think the way I'd answer that, and Ryan can provide additional color, we've said that for the last couple of quarters, certainly coming out of Q4, we've been in kind of that low- to mid-70% range. Except for transmission, we're in the mid-high 70s to high 80s for pretty much all the other end markets. The guidance would kind of at the low end of the range would say you don't see any meaningful movement from there, maybe just kind of a moderate movement. The high end of the range would say certainly in the second half of the year, you'd see a little bit more of kind of an increase going on, particularly in the T&D space. And so that's kind of the guidance we've given or the color around our guidance to kind of give some clarity there. Thanks. Just a few minutes left, and one more here. Please discuss and compare the return profile of your rental business relative to that of your sales business and your aftermarket parts and service business. Yeah. I'll start, and Chris, you certainly please kind of provide some more numbers around it. But we're comfortable with the return profile of each business. And I'm going to really focus on the ERS segment and the TES segment, so our rental business and our sales business, very different return profiles, very different margin profiles, right? So kind of the incremental dollar of rental revenue generates kind of mid-70s% from a gross margin perspective when we add an incremental asset in fleet. Chris mentioned kind of an annualized IRR calc for those rental assets that's kind of in that high teens to low 20s. So that's understanding the cash flow profile of one asset, incremental asset that's added to the rental fleet, plus the residual value to come up with that IRR calc. So that's based on actual realized IRR. So we're comfortable with that. Obviously, there's an asset intensity to that. So we're deploying capital. As you see in our cash flow statement, as you see in the almost $1.5 billion of capital we have deployed there. So we're comfortable with that return profile. And then on the sales side of the business, we're generating kind of, call it, mid-teens gross margins on selling assets. As we've talked about, when you think about the cash flow profile there, you're more asset-light from a use of cash perspective. We'll buy assets. We'll buy chassis. We'll buy attachments from Peterbilt or Freightliner from Terex. But we'll use our floor plan facility to finance the majority of that spend. And then we're generating kind of mid-teens returns from a mid-teens gross margin perspective. So those are the two kind of fundamental differences about the business. I don't know, Chris, if you want to go deeper on that. No, I think you hit the main points. And then I would emphasize the TES business is relatively asset-light. So it may have a lower gross margin, but it has very good ROICs just given that it's a very asset-light business. And so I think that's an important point to point out. And then we've talked historically about APS, that we really have prioritized the service component of that for keeping our rental fleet active and going. And so it has been an area that's probably been a little bit constrained on margin expansion just given that we think it's a better use of that resource to make sure we have our rental fleet up and running and servicing those units. Great. Thanks, guys. We're just up against time. I think we're going to wrap it there. Appreciate all the insight and appreciate you guys being here today and participating in the conference. Thanks, Scott. Thanks, Scott. Appreciate you having us. You bet. Take care. Thanks, everyone on the line. Bye-bye.