Good morning, and Welcome to H&E Equipment Services Fourth Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Jeff Chastain, Vice President of Investor Relations. Please go ahead. Thank you. Good morning, everyone. Welcome to a review of Fourth Quarter and Full Year 2022 results. We appreciate your participation on today's call and your continued interest in H&E Equipment Services. A press release reporting our results was issued earlier today and can be found along with all supporting statements and schedules at the H&E website, www.he-equipment.com. Our discussion this morning is accompanied by a slide presentation, which can also be found at the H&E website under the Investor Relations tab in Events and Presentations. Joining me today are Brad Barber, Chief Executive Officer, John Engquist, President and Chief Operating Officer, and Leslie Magee, Chief Financial Officer and Corporate Secretary. Brad will begin today's discussion. Before I turn the call over to him, if you'll please proceed to slide three, I'll remind you that today's call contains forward-looking statements within the meaning of the federal securities laws. Statements about our beliefs and expectations and statements containing words such as may, could, believe, expect, anticipate, and similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. A summary of these uncertainties is included in the safe harbor statement contained in the company's slide presentation for today's call and includes the risks described in the risk factors in the company's annual report on Form 10-K and other periodic reports. Investors, potential investors and other listeners are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The company does not undertake to publicly update or revise any forward-looking statements after the date of this call. Also, we are referencing non-GAAP financial measures during today's call. You will find the required supplemental disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation as supporting schedules to our press release and in the appendix to today's presentation materials. Unless specifically noted, all results and comparisons for the periods reported and discussed this morning are presented on a continuing operations basis. I'll now turn the call over to Brad Barber, Chief Executive Officer of H&E Equipment Services. Thank you, Jeff. Good morning and Welcome to our Review of Fourth Quarter and Full Year 2022 financial results. We appreciate your participation this morning. Thank you for your continued interest in H&E. Please proceed to slide four. I will begin this morning with a review of financial and strategic highlights in the quarter, followed by an update on key performance metrics in our rental business segment. Having just concluded an outstanding year for our business, I want to identify some expected drivers of activity in 2023, including favorable trends that should support another year of robust activity. I will close with a summary of our strategic achievements in 2022, which included record results in rental fleet investment and expansion of our geographic coverage. I will also identify our strategic growth initiatives for 2023. Leslie will follow with a comprehensive review of fourth quarter financial results, including business segment performance data and an update on our capital structure and liquidity. We will be happy to address your questions. Slide six, please. The fourth quarter of 2022 was one of our most productive quarters on record. We reported excellent financial results, as we have done all year, while reaching important achievements with significant implications in terms of future operations and competitive positioning. Our excellent financial performance was due in part to resilient industry trends which prevailed throughout the period, while the supply of equipment remained constrained. These favorable factors produced healthy fleet utilizations and further rate appreciation, resulting in a 25.6% year-over-year improvement in total revenues and a more than 35% increase in equipment rental revenues. EBITDA improved 56% over the same period. Each of these financial measures concluded 2022 at record levels. We also recognized some important strategic wins in the quarter, which included the sale of our Komatsu Earth Moving distribution business in December of 2022, effectively completing our transformation to a pure play rental business. This final step allows for greater revenue stability and margin appreciation throughout the cycle. The transaction resulted in a gain on the sale, which Leslie will explain as part of her financial review. We significantly advanced the integration of OneSource Equipment following the closing of our acquisition in October of 2022, adding $139 million in fleet at OEC and 10 new branches, six of which now place H&E in the Midwest. Other accomplishments include further success with our accelerated branch expansion program following the addition of two new locations in the fourth quarter, bringing the total number of new locations added in 2022 to 10. These branch additions, in combination with the acquisition of OneSource, drove an 18% year-over-year increase in our branch count, extending our operational scale. We continue to invest in our rental fleet with a gross investment of $128.3 million in the quarter, resulting in record gross expenditures for the year of $507.8 million. Our OEC concluded the quarter at a record level just under $2.4 billion or 26.8% greater than the fourth quarter of 2021. I now want to delve deeper into the results of our rental business. On to slide seven, please. Strong core fundamentals in the quarter, combined with our fleet growth, successful branch expansion program, and the addition of One Source operations, resulted in a 34.6% year-over-year increase in rental revenue to $245 million. The outcome, which was a new record for the rental business, led to a gross margin in the quarter of 53.1% or 140 basis points ahead of the year-ago quarter. Rental rates in the quarter, which exclude One Source, remained impressive, improving 10.6% when compared to the fourth quarter of 2021 and 1.8% on a sequential quarterly basis. Our average rental rate appreciation for the full year of 2022 was equally impressive, finishing the year 9.3% better than 2021. Each measure remained among best in our industry. Our SmartRATE pricing platform, which is now in use across all 10 One Source branch locations, is expected to capture valuable synergies in future periods due to the application of a dynamic pricing methodology as well as improved equipment mix at each location. Physical utilization in the fourth quarter averaged a healthy 72%, despite pressure from typical seasonal factors, including rain and winter conditions across several geographic regions. These events contributed to a decline in the measure of 110 basis points when compared to the year-ago result and 130 basis points on a sequential quarterly basis. Dollar utilization in the fourth quarter was 41.9% or 260 basis points better than the same quarter in 2021. For the year, dollar utilization averaged 40.9% or 410 basis points better than the previous year, largely demonstrating the benefits from fleet management, including improvement in fleet mix, higher rental rates, and strong physical utilization. I want to give a breakdown on our perspective on the 2023 industry outlook. Given the divergent thoughts and opinions addressing the macroeconomy in 2023, I can confirm our optimistic view of the industry has not diminished as favorable trends continue to reinforce important end markets, leading to an expectation of healthy demand for our equipment. On to slide eight, please. Customer feedback regarding non-residential and industrial project backlogs continues to indicate a robust scope of work in 2023, which is expected to drive healthy fleet utilization over the year. The encouraging customer feedback is reinforced by projections of future non-residential building activity as measured by the Dodge Momentum Index, the Construction Backlog Indicator reported by the Associated Builders and Contractors, and AIA's Architectural Billings Index. Although recent results from each of these indicators has declined from historic high readings, they continue to reflect robust non-residential construction project backlogs and active planning agendas, which is likely to bode well for 2023 and beyond. We expect equipment demand in 2023 to be supplemented by an increase in federal spending addressing U.S. infrastructure, manufacturing capabilities, and renewable energy. Many of these projects will require extended periods of time to complete. Growth in rental penetration should drive new demand for equipment as the combination of unfavorable fiscal conditions, including rising interest rates and lingering delays in equipment deliverability, tend to encourage a shift by certain customers away from ownership of equipment. A recent report from the American Rental Association disclosed that compared to 2021, rental penetration improved 150 basis points in 2022 to 53.8%. We believe further rental penetration is likely. We expect these multiple catalysts for increased rental demand to result in the continuation of healthy equipment utilization and to contribute to an attractive pricing environment characterized by modest sequential quarterly rate improvement. Non-residential and industrial construction projects accounted for 75% of our total revenues in 2022. We believe the success of our growth initiatives, including investment in our rental fleet and geographic expansion of our operational presence, has advantageously positioned our company for new opportunities in these and other end markets, while our strong mix of equipment and the young age of our fleet have been instrumental in driving greater customer interest in H&E. We remain focused on further growth initiatives in 2022 and believe this fundamentally sound industry will continue to create attractive opportunities for expansion. Slide nine, please. As I mentioned earlier, H&E successfully added 10 new branch locations in each of the last two years. The success of our branch expansion program is a critical component to our long-term strategy, and we aim to increase our footprint and location density in key geographic regions that offer impressive prospects for non-residential and industrial construction growth. Being mindful of this important growth initiative, we plan to add no fewer than 10 locations in 2023 and as many as 15, with the escalation indicative of our expansion team's continued success in identifying locations with impactful opportunities for growth. We are targeting a gross fleet investment of $500 million-$550 million in 2023 as we continue to support existing stores and the new branch locations with both a young fleet and a diversified mix of equipment. The range amounts to another year of record gross expenditures for our rental fleet. Although 2022 original gross expenditure target was reduced due to the failure of certain manufacturers to meet their commitments, we believe our OEMs have a more realistic understanding of production volumes in 2023, and that will result in achievable target range despite the persistent disruptions in the supply chain. Finally, attractive acquisition opportunities continue to appear in our industry, and an evaluation of suitable targets remains an ongoing part of our comprehensive plan for growth in 2023. Slide 10, please. We open 2023 with 120 branches across 29 states, including new markets in the Midwest, South, and greater density in the Southeast, Gulf Coast, and West Coast. Before I hand the call over to Leslie, I will close by reiterating the importance of numerous accomplishments in 2022. These include the completion of our strategic transition to a pure-play rental business, record gross investment in our rental fleet, our branch expansion program, and the acquisition of One Source. It is also important to point out our team's exceptional operational execution, which I believe has produced the industry's best rental rate performance and highest levels of physical utilization. Individually, each represents a significant achievement for the company. However, taken together, these strategic wins serve to fortify a sound base for future operations and strategic growth while escalating our competitive posture. Now on to slide 11, and I'll turn the call over to Leslie for a comprehensive review of our fourth quarter financial performance. Leslie? Thank you, Brad. Good morning, welcome everyone. Before I begin my review of the fourth quarter, I want to first expand upon Brad's earlier comment relating to the sale of our Komatsu Earth Moving distribution business. The transaction with Waukesha Pearce Industries, LLC or WPI, which closed on December 15th, 2022, resulted in cash proceeds of $29.2 million. A pretax gain of $15.4 million was recognized in the quarter, including $12.9 million recorded as a gain on the sale of property and equipment and $2.5 million as a gain on other net. As in the case of the sale of two Arkansas distribution branches in the third quarter of 2021, fourth quarter 2022 results were not adjusted for the $15.4 million gain on the sale as the transaction remains consistent with the company's exit from all material business arrangements involving distribution. For the sake of clarity, I will refer to the WPI transaction during my review. With that, I'll begin this morning on slide 12. Fourth quarter revenues totaled $353.1 million, improving $71.8 million or 25.6% when compared to the fourth quarter of 2021. The improvement was led by our rental business, where revenue rose $63 million or 34.6% on a year-over-year basis. The business segment experienced strong support from a growing fleet, excellent rental rate performance and contribution from our acquisition of One Source. We concluded the fourth quarter with a fleet size as measured by our original equipment cost or OEC of approximately $2.4 billion, representing a net increase in OEC of $498.5 million when compared to the fourth quarter of 2021. The fleet growth included a record gross investment of $507.8 million, plus $139.2 million resulting from the acquisition of One Source. Rental rates in the fourth quarter, excluding One Source, were 10.6% better than the year-ago quarter and 1.8% ahead of third quarter of 2022. We closed 2022 with average year-over-year rental rate improvements of 9.3%, among the best results in our industry. Average physical fleet utilization in the fourth quarter of 72% was 110 basis points below the year ago measure, with ordinary seasonal patterns in the quarter modestly impeding results. Across other business segments, used equipment sales in the fourth quarter saw its best result in 2022, improving to $30.2 million compared to $29.5 million in the fourth quarter of 2021. Activity in this segment has run below historic levels, due largely to tight equipment supplies. Higher sales of earth-moving and aerial work platforms were largely offset by lower sales of materials handling equipment. New equipment sales declined 4.5% to $21.5 million compared to $22.5 million in the same quarter of 2021. Consolidated gross profit in the fourth quarter improved $41.2 million or 34.8% to $159.4 million, compared to $118.2 million in the year ago quarter. With the improvement, the consolidated gross margin grew to 45.1% compared to 42% over the same period of comparison. The 310 basis point improvement was due largely to higher rental margins and sales of used equipment along with a favorable revenue mix. Total equipment rental margins were 47.9% in the fourth quarter of 2022, compared to 46.3% in the year ago quarter. Comparing other results to the year ago quarter, rental margins were 53.1% compared to 51.7%. Used equipment margins were 51.2% compared to 39.3%, with fleet-only margins, which exclude used equipment obtained through trade-ins, coming in at 54.5% compared to 41.9%. Margins on new equipment sales were 13.6% compared to 14.5%. Finally, margins on parts sales improved 28.6% compared to 25.8%, while service margins finished the quarter at 63.9% compared to 63.5%. Slide 13, please. Income from operations increased $37.2 million in the fourth quarter of 2022, or 89.4% to $78.8 million compared to $41.6 million in the fourth quarter of 2021. The margin in the fourth quarter improved to 22.3% compared to 14.8% in the year-ago quarter. The improvement was due primarily to gains on the sale of property, plant, and equipment totaling $13.9 million, of which $12.9 million related to the previously mentioned transaction with WPI. Higher gross margins on rentals, used equipment sales, and a favorable revenue mix of revenues contributed to the margin improvement. Let's proceed to slide 14. Net income in the fourth quarter totaled $51.2 million or $1.41 per diluted share, compared to $21.7 million or $0.59 per diluted share in the year-ago quarter. Our effective income tax rate in the fourth quarter was 26.1% compared to 25.8% for the same quarter in 2021. Proceed to slide 15, please. EBITDA in the fourth quarter increased $61.7 million to $171.5 million compared to $109.9 million in the fourth quarter of 2021. The 56.1% increase compared to a 25.6% improvement in revenue and resulted in an EBITDA margin of 48.6% in the fourth quarter compared to 39.1% in the year ago quarter. Our transaction with WPI contributed 440 basis points to our fourth quarter margin due to the pre-tax $15.4 million gains recorded in the sale of PP&E and other net. Of greater significance, the margin benefited from an improved mix of revenues, higher margins on used equipment sales and rentals, and a favorable result from SG&A, which decreased in the quarter as a percentage of revenue. Next slide, 16, please. Regarding SG&A, expenses in the fourth quarter totaled $94.5 million, an increase of $17.1 million or 22% compared to the fourth quarter of 2021. The increase was due primarily to employee salaries, wages, and variable compensation, as well as increased headcount. In addition, higher facility expenses, professional fees, and depreciation added to the quarter-over-quarter increase. As a percentage of revenue, SG&A expenses in the fourth quarter declined 80 basis points to 26.8% compared to 27.5% in the prior year quarter. Approximately $3.3 million of the increased expense in the quarter was attributable to the addition of One Source, with another $3.6 million related to our branch expansion efforts, which added 10 new branches over the year. Slide 17. Capital expenditures in the fourth quarter totaled $128.3 million, including non-cash transfers from inventory, resulting in a total gross capital investment for the year of $507.8 million. Net rental fleet capital expenditures in the fourth quarter were $100.3 million, with net rental fleet expenditures for the year totaling $424.1 million. Gross PP&E capital expenditures for the fourth quarter were $15.1 million. Following the transaction with WPI, we recorded net PP&E proceeds of $4.9 million. Our average fleet age as of December 31, 2022 increased to 43.6 months compared to 40.3 months in the year ago quarter and 40.6 months in the third quarter of 2022. Despite the increase, which followed the acquisition of the One Source fleet, our fleet age continued to compare favorably to the industry average fleet age of 53.3 months. Net cash provided by operating activities totaled $102 million in the fourth quarter and $313.2 million for the year, free cash flow used in the fourth quarter and full year of 2022 was $128 million and $233.3 million, respectively, demonstrating the company's focus on fleet growth and expansion through new branch locations and acquisitions. Slide 18. As I noted earlier, our rental fleet size based on original equipment cost closed 2022 at approximately $2.4 billion, an increase of $498.5 million or 26.8% larger than our fleet size at the close of 2021 and a record level for H&E. Average dollar utilization in the fourth quarter of 2022 improved to 41.9% compared to 39.3% in the prior year quarter. Let's move to slide 19, please. Net debt at December 31, 2022 was approximately $1.2 billion compared to $892.7 million at December 31, 2021. The increase was due to a decline in cash and cash equivalents following the acquisition of OneSource and our continued investment in the rental fleet. Net leverage in the fourth quarter was 2.2x, essentially unchanged from the year-ago quarter. We have no maturities before 2028 on our $1.25 billion of senior unsecured notes. Slide 20, please. Our liquidity position at December 31st, 2022 totaled $820.7 million, including a cash balance of $81.3 million and borrowing availability under our amended ABL facility of $739.4 million. Excess availability under the ABL facility improved to approximately $1.5 billion at December 31st, compared to approximately $1.1 billion at December 31st, 2021. The increase in availability reflects the continued investment in our fleet, our minimum availability as defined by the ABL agreement remains $75 million. By definition, excess availability is the measure used to determine if our springing fixed charge is applicable. With our excess availability of $1.5 billion, we continue to have no covenant concerns. We recently completed an extension of our ABL facility with the $750 million credit facility extended 5five years to February 2028. We paid our regular quarterly dividend of $0.275 per share of common stock in the fourth quarter of 2022. While dividends are subject to board approval, it is our intent to continue to pay the dividend. Slide 21. In summary, H&E reached a new level of financial performance in 2022 as our timely shift to greater rental intensity served as a highly influential catalyst for improvement. This successful transition, together with a dynamic business environment, led to many achievements over the year. They included records in the categories of total revenues, total rental revenues, gross margin, and rental gross margin. In addition, EBITDA generation surpassed the half billion dollar level, closing the year at a record EBITDA margin of 43% or 600 basis points better than 2021. These financial accomplishments, together with record fleet investment and an 18% increase in our branch count, were significant contributors to a year of remarkable growth. With new strategic initiatives established for 2023, our growth targets will be supported by ample resources and a conservative capital structure, including a liquidity position of approximately $800 million. We have no senior unsecured note maturities until 2028, and at 2.2x, our leverage ratio remains at the low end of our guidance range of 2x-3x. We are prepared to build from our successes in 2022. We believe superior operational foundation is in place as we enter 2023. With that, operator, we are ready to begin our Q and A period. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question is from Seth Weber with Wells Fargo Securities. Please go ahead. Hey, guys. Good morning. Thanks for taking the question. I guess, maybe for Brad, just trying to think through how we should be thinking about your rental gross margin, in, you know, in the lens of the acquisitions that you've been doing and the new branch openings. Is that, does that create a near-term headwind on rental margin? Just how should we be thinking about, you know, full year incremental guidance or incremental targets for the rental business going on? Sure. Good morning, Seth. I'll take the first part of that. Leslie may have something to add, but your assumption is correct. Between the purchase accounting associated with the fleet, where we have some additional depreciation for a period of time with One Source, and then, of course, the warm starts. While we're very happy, our group of warm starts, the all 20 that we've opened in the last two years are performing as a group exceptionally well, but they're a drag. I mean, it takes them a while to ramp up to the levels. They're a drag in several different categories, but they're generating solid EBITDA and, of course, adding actually greater value than we had planned for them to. We're happy, but yeah, they're a headwind. As it pertains to the incremental margin, Leslie, would you have some help, Seth? Sure. Good morning, Seth. Our rental gross margin flow through will, as Brad stated, continue to be impacted by higher depreciation, resulting from the fair value markup of the fleet obtained through One Source. A few other things to keep in mind. You know, we expect that 2023 will include periods of normal seasonality following a year of really little seasonality, from a utilization perspective. You know, playing into rental gross margin flow through is also rates, and Brad or John may wanna add some color, but the expectation of rates continuing at 2022 levels, you know, is probably not a fair assumption. Right. Okay. Thank you for that. Just maybe Leslie, a follow-up on just the CapEx guidance. Should we assume the cadence is a more traditional cadence, you know, kinda second, third quarter weighted? You know, the last couple years have been kinda all over the map. Do you feel like 2023 is a more traditional, you know, cadence of bringing in fleet, or do you think it's gonna be spread out across the year again? As of now, Seth, I think we are looking at more of a normal cadence throughout the year. Seth, I want to go back and additionally respond. Leslie mentioned, because I want to be really clear here, our outlook is solid for this year, very positive. But as she mentioned, you know, 10% rate improvement year-over-year, we are not expecting to produce 10% again. We far outpaced the Rouse benchmark last year. We are exceptionally pleased with our group. We think the execution was fantastic. Our fleet mix has continued to improve. The use of SmartRATE is fully supported by our sales force, and that is why we are getting these excellent outcomes. That being said, what we are really comfortable with is that we are going to continue to get incremental sequential performance in rates going forward. We are not giving up on rate improvement or think we won't have it. We are going to have rate improvement. To Leslie's comment, it just won't be at the same record-setting levels. Yeah. Understood, guys. I appreciate it. Thanks again. Thank you. The next question is from Steven Ramsey with Thompson Research Group. Please go ahead. Hi. Good morning. wanted to ask first on mega projects, clearly a big story in non-res and for rental companies. How much of a factor is this in your recent results? As you look at 2023, even just order of magnitude, is this a sizable percentage of rental revenue? Sure. Good morning, Steven. In our existing results you're looking at, it's so nominal, it wouldn't show up. That being said, we've got our company, you know, broken into three divisions, East, West, and Central, and we have currently active mega projects, more specifically, infrastructure, governmental supported infrastructure projects in each area of the country. We're starting to see that work. We've got equipment on project as we speak. It's emerging. I think it's only going to further accelerate as we move throughout the year. How material it becomes, you know, I don't know that we're ready to give guidance on it, but we're very encouraged, and it's gonna become a meaningful piece of additional market opportunity going forward. It's positive to see that it's existing today. We're on these projects, and we will be on more projects every time we get on a call for the rest of this year, for sure. That's helpful. A quick add-on to this topic. Do you need to shift strategically or operationally in any way to fully take advantage of this, or is this just normal operations, with an added, you know, market opportunity? No. There's no shift. I would say what's important, you know, is our strategic sales efforts, well in advance of the opportunities. When you're dealing with projects, you know, that are measured starting with $1 billion and maybe as much as $40 billion or $50 billion, you don't wait too late to participate. We're strategic in making sure that we approach these at the right time with the right strategy. Operationally, you know, we execute the same way we always have. It's just associated with fleet management and our sales force effort. Okay. Great. Then thinking, about your regions with half of your gross profits coming from the Gulf Coast and the Southeast, clearly a great place to be now and for the long term, how much do you want to grow in that geography with more fleet and branches, or would you prefer, expanding in other geographies? Maybe your branch openings reflect some of this. Just any thoughts there? The short answer is, of course, both. We are not deterred by the density. We like greater density. This Southeast region where we arrive at roughly 50% of our gross margin, I think arguably has been and will likely be the hottest part of the country for sustainability and growth. That being said, we have tremendous opportunity to continue to expand our reach, as evidenced by some of our excitement with One Source putting us in 6 new markets in the Midwest. You're gonna see us do both. If we had to toss a coin and pick one or the other, we're gonna look at the robustness of the marketplace, we're gonna look at available facilities, and then we're gonna look at the team we can assemble, and that's what's going to drive us to either increase density or to spread out a little bit further. We're happy with our footprint. You'll see us filling it out as well as expanding it. Great. Last quick one for me, and I may have missed this in the prepared comments. On SG&A leverage, good leverage against total revenue in the fourth quarter and strong performance as a percentage of rental revenue, can you talk about SG&A leverage in 2023 or the longer term? Sure. Let Leslie respond to that. Sure. Just as a reminder, you know, we finished the full year 2022 at 27.6% of revenues. Considering our warm start strategy, you know, I think this is a fair assumption for now moving into 2023. Great. Thank you. The next question is from Steven Fisher with UBS. Please go ahead. Thanks. Good morning. Just wanted to follow up on the rates. Brad, you mentioned the potential for modest sequential quarterly rate improvement. Can you just maybe give us a sense of how that translates year-over-year? I know you said you wouldn't do another 10%, I guess others have targeted kind of mid-single-digit range. Does that sound about right in your mind as well, or how are you thinking about that? It does sound about right, mid-single digits. You know, what's going to be interesting, Steven, as the year unfolds, we know we feel very certain we're going to continue to get these incremental gains quarter to quarter to quarter. We've got momentum coming into the year. I think our view is more currently in the 3%-5% range, but yeah, mid-single digits. Are you gonna continue to report that like ex One Source, or will that just be sort of a combined measure? We are going to... let me tell you, the reason we're reporting it ex One Source is One Source did not have the data, the year ago data supplied to Rouse that would've allowed us to adequately do a measure. We would've had to have a placeholder or an assumptive placeholder to measure against. So for the first 12 months, we were not going to report with One Source. I'd additionally say that there's a lot of opportunity with One Source for rate improvement, and we're seeing that already. John, do you wanna add to some of what we're seeing with One Source with the SmartRATE currently? Yeah. Obviously we've got them onto our platform now. We did, that was one of the big synergies when we looked at One Source, was the pricing synergies. You know, now that we have them active on our system, we're already seeing solid sequential month-over-month increases. We expect that to continue, and we expect a lot for 2023, all positive there. That's great. What about the impact of OneSource on utilization? Do you see opportunities there to improve utilization as well, and how will that be reported? Yes, we do. We do. You know, they're not running at the same levels that we are currently. Again, we see that as an opportunity, you know, not only with the utilization, but with the fleet mix. That's something that we're focused on. You know, we're gonna continue to make those improvements throughout the year. We look forward to reporting on that progress later in the year. Obviously, their physical utilization is just reflecting our overall company performance because we, you know, we measure that at a point in time, so we know where we are there. As John just stated, that's another opportunity, and we're very pleased with our progress with that team so far. Great. Just lastly, you know, there's been a lot of discussion on the call about the strength of demand and the mega projects and across the regions. I guess I'm curious, if you can give us a sense of what variations you see in demand at this point. You know, we do sense there is some mixed messages coming from various parts of the non-residential construction market as interest rates kind of filter through. How do you see that variation or do you not see it kind of filtering into your business at all? We just don't see it as much and, I've seen some of the same reporting I think you may be referring to or similar reporting, and I think we're a little more isolated with the geography we cover. I mean, these, you know, high growth 29 states we happen to be in are holding up better than some of the areas where I've seen some pauses. We feel as strong today as we did a quarter or two quarters ago about the opportunities in front of us. These mega projects, whether they be stimulus related or not, are just gonna be additional fuel for our fire. Terrific. Thanks very much. Thank you. The next question is from Stanley Elliott with Stifel. Please go ahead. Hi, good morning. This is Brian Brophy on for Stanley. Congrats on the quarter. I was hoping you could talk a little bit more about SmartRATE. Give us a little bit more color on some of the actions you're taking there. What's your sense for how much that contributed to the rate growth in the fourth quarter? Well, you know, SmartRATE is a dynamic program that's proprietary to our company. We've developed it for probably five or six years at this point, and we continue to perfect it as we move forward. It uses a variety of data points, both real-time, existing with what's going on within our branch, within our division, region, or districts, of course, as well as market related data. We use customer profile, size of customers, and many other data points. Again, since it's proprietary, we don't talk, you know, in any greater detail about how we weight these variables. What I can tell you is the combination of our professional sales force, understanding the power of this information and being motivated to use it at the point of need, is what has transpired to give us this better than 10% increase, you know, Q4 over Q4. Also, as I've mentioned, I believe earlier, maybe in the first question, we far outpaced, I believe we far outpaced all of our competitors, larger competitors, last year with rate improvement. We have access to the Rouse benchmark data that lets us know we outpaced the benchmark by a nice margin as well. Our view of that moderating should not be interpreted that there's anything going on in the marketplace or that we are less focused in any way of achieving greater rates. It's just there is a marketplace out there. We have to be competitive. We're going to. You'll see more incremental gains going forward. Got it. Yeah, that's helpful. Thank you. On used gross margins, obviously quite strong this past year. How sustainable do you think that trend is going into 2023 or at some point do you think we start to normalize back to, you know, mid-30-ish type of used equipment margins that you guys have historically put up? Thanks. Yeah, Brian, I'll take that one. You know, we don't see ourselves going back to the mid-30 gross margin on used sales. You know, the used markets today, pricing is strong. You know, we know that pricing peaked out late last year, but from what we're seeing, we see continued strength. I mean, I would not be surprised for us to continue on with used margins in the 50% range. You know, again, we expect a healthy used equipment market for the balance of the year and confident we can achieve that level. Got it. Thanks. That's really helpful. Then, can you help us with the modeling impact from the Komatsu distribution sale? How should we think about that flowing through 2023? The biggest thing to point out is I would say that the Komatsu business that we sold was accounted for a little more than half, a little more than 50% of our new equipment sales. You know, definitely keep that into account. As well as, you know, we would expect our parts and service business to decline related to the Komatsu sale, not at that same rate because the bulk of the revenue sold were new. That's very helpful. I'll pass it on. Thank you. Again, if you have a question, please press star then one. The next question is from Alex Riggio with B. Riley. Please go ahead. Thank you. In the past, I think you've stated that you would spend more on your rental fleet if the equipment was available. I guess my question here is, has the global supply chain for new equipment improved at all? And if so, how should we think about sort of that, the outlook for the supply chain through 2023? Yeah. Good morning, Alex. I don't believe that the supply chain has improved enough to talk about an improvement. I think what has improved is our manufacturers understand the environment they're in and their planning is much more crisp this year than it was the same time a year ago. No, there's still a real disruption out there. There's still a lack of availability, and we are still in a position where we could take more equipment than we're currently planning for in our existing forecast. It won't let up. I mean, look, the bright side of this is it just continues to emphasize the supply and demand imbalance that gives us the confidence on, you know, solid utilization going forward in this incremental improvement in rental rates on a sequential basis. Secondly, as it relates to OneSource, you know, I think it was expected that utilization would be below kind of company averages for some time. Do you have any better visibility on that and when it might kinda reach company averages? Yeah. I would say in the back half of the year. You know, you look at the, you know, where the One Source locations are, most of which are in the Midwest, you know, seasonality is a bigger factor there than, you know, what we would typically see in some other markets. I would say as we get later into the year, into the, you know, third quarter, that we should start to see that level out and get closer to those company averages. You know, look, this could be a 12-month project or it could happen a little bit sooner, but we are focused on it and we know there's an opportunity to improve. Yeah. We're getting positive gains already. Yeah. I second John's comments there. I think that group will be performing at company utilization levels by year end, if not sooner. Very helpful. Thank you very much. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Jeff Chastain for any closing remarks. Okay. Thanks, Gary. Go ahead and conclude today's call. We appreciate everyone taking the time to join us today and for your continued interest in the company. We look forward to speaking with you again soon. Gary, thanks again for the assistance, and good day, everyone. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.