Hello and welcome to the Herc Holdings Q1 earnings call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press STAR followed by the number one on your telephone keypad. If you would like to withdraw your question, press STAR one again and please limit to one question and one follow up. Now I would like to turn the call over to Leslie Hunziker, Head of Investor Relations. Leslie, please go ahead. Thank you, operator and good morning everyone. Today we're reviewing our first quarter 2025 results with comments on operations and our financials, including our view of the industry and our strategic outlook. The prepared remarks will be followed by an open Q and A. Earlier today, our press release and presentation slides were furnished and our 10-Q was filed with the SEC. All are posted on the events page of our IR website. Now let's move on to our safe harbor and GAAP reconciliation on slide 3. Today's call will include forward looking statements. These statements are based on the environment as we see it today and therefore involve risks and uncertainties. I would caution you that our actual results could differ materially from the forward looking statements made on this call. You should also refer to the Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2024. In addition to the financial results presented on a GAAP basis, we'll be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliations for these non-GAAP measures to the closest GAAP equivalent can be found in the conference call materials. A replay of this call can be accessed via dial-in or through the webcast on our website. Replay instructions were included in our earnings release this morning. We have not given permission for any other recording of this call and do not approve or sanction any transcribing of the call. Finally, please mark your calendars to join our management meetings at the Bank of America Industrials Conference in New York on May 13th and the KeyBanc Industrials Conference in Boston on May 29th. We hope to see you at one of these events. This morning, I'm joined by Larry Silber, President and Chief Executive Officer, Aaron Birnbaum, Senior Vice President and Chief Operating Officer, and Mark Humphrey, Senior Vice President and Chief Financial Officer. I'll now turn the call over to Larry. Thank you, Leslie, and good morning everyone. Our first quarter results reflect the strength and resiliency of our diversified business model and best-in-class talent. Team Herc continued to demonstrate remarkable flexibility and disciplined leadership in a macro environment characterized by divergent trends between strength in national accounts from new large project development and challenges in the local market related to prolonged elevated interest rates. The team also executed very well navigating demand volatility in the recent quarter resulting from unusually cold weather in late January and mid-February in the southern states, which caused us to temporarily close some of our branches and further impact the daily and weekly local rentals during that period. Despite the headwinds, we continue to leverage our broad capabilities, capture new opportunities and focus on what we control while maintaining a strong commitment to safety and serving our customers. With utilization snapping back in March and incremental upside from 2024 acquisitions and strong megaproject activity, we delivered equipment rental revenue growth of approximately 5% in the quarter excluding the Cinelease business which is currently held for sale. We continue to follow our playbook, leveraging branch network scale, our broad fleet mix, technology, leadership and capital and operating discipline to position us to manage across the cycle and generate sustainable growth over the long term. Now let's turn to slide number four for a rundown of on these growth strategies. As you know, in the first quarter we executed a merger agreement to acquire H&E Equipment Services and its 160 U.S. branch locations to expand our scale, geographic coverage and long term opportunities. Integrating this acquisition will be our primary focus over the next several years and therefore as stated, we are pausing other M&A initiatives for the time being and completing the remaining in-flight greenfields. Of those, we opened three new facilities in the quarter. The H&E acquisition, like others before it, helped to drive revenue and fleet efficiencies in key metropolitan areas in line with our urban market growth strategy. In addition to its desirable locations, H&E brings complementary fleet categories, valuable new team members with a strong cultural fit, and greater local account presence while improving our national account capabilities. At its core, the acquisition strategy for H&E is no different than the strategy used for the other 50-plus acquisitions we've completed and while it's our largest, we view this as quite manageable. Moving on to our fleet mix strategy, we're continuing to increase specialty fleet CapEx to be able to cross sell our expert solutions to acquired gen rent customers, to capture share of wallet opportunities and to support the incremental demand from megaprojects. Specialty solutions are a resilient product offering addressing urgent supplemental and critical demand situations. Technology is another important value driver for Herc. We continue to advance our proprietary and customized internal applications for pricing, fleet management, logistics and transportation while delivering more value to our customers through our industry leading ProControl account management platform. Finally, we are disciplined stewards of capital by strategically managing fleet investments to drive asset productivity and taking a targeted agile approach to addressing demand trends. We are focused on efficiency and driving higher returns on our investments. Now on slide number five, I want to take just a minute to preempt some of your questions about the current demand environment and the potential impact of tariffs on our business. Also, I'll provide a quick update on progress towards the closing of the acquisition. First, as we've stated, the operating landscape continues to be a tale of two contrasting trends. Our national account business is growing, fueled by federal and private funding for large construction projects like data centers, manufacturing, shoring and LNG facilities. We are not seeing any emerging cancellation trends or changes in the level of activity or scope of projects for 2025, and we are not seeing any unusual level of delays outside the normal course for modifying designs, juggling permits or securing labor. It's too early to tell how that unfolds as developers get clarity around the administration's policy outcomes. We've already seen some incremental onshoring announcements from chips and pharmaceutical manufacturers, but we'll have to wait and see how all of that plays out. Today it seems it's business as usual for the large national accounts. On the local landscape, there continue to be challenges and we'll start anniversarying those here in the second quarter. While there are ongoing opportunities in facility maintenance, municipal and infrastructure projects, and the stalwart education and healthcare end markets, other more interest rate sensitive jobs continue to be on hold, restricting overall local account growth. With interest rates remaining high, it's not getting any better, but it continues to be manageable for those of us with diverse end markets, customers, product offerings and geographic coverage. If you don't have other opportunities to pivot to, it's definitely a challenging local operating environment. Having said that, there's no real significant change for us in the local marketplace when it comes to tariffs. We don't expect any direct impact on to our procurement costs in 2025. We sourced the vast majority of our fleet domestically and orders and pricing for this year have already been secured. Regarding any indirect impact that might stem from our customers' tariff exposure, again, it's too early to tell, but for the national account product projects already underway and those that are scheduled to launch this year, as far as we know now, there have been no changes to existing plans. Strategic investments, process improvements and enterprise wide cost management are where we're focused as we work to successfully navigate this dynamic operating cycle. Now, to quickly update you on the acquisition, there's nothing really new to report if you've been following our filings. Last week we refiled our HSR application in order to give the FTC more time to complete the review process. We've been working closely with them, answering questions and supplying requested data in a timely fashion. The bottom line is that we will be supportive of their process and are confident that with a combined 6% share nationally, we won't have any unmanageable areas of concern. Sometimes these things just take time. As you know, the S-4 has been filed related to the new shares we'll be issuing. We received a first round of comments from the SEC and addressed those in an amended filing on Friday. That process is going smoothly and we have no concerns here either. The way the tender offering works is that we need to complete the regulatory review and have a majority of the shares tendered before closing. Our focus continues to be getting through the regulatory process as expeditiously as possible. Finally, we started preparing for the integration based on a targeted mid year closing. Our Integration Management Office is led by one of our most senior field executives. Our integration team, which includes leaders from HR, IT and field operations, has organized around the drivers of value and the operating model. I'm pleased with the work that's being done. At the same time we say it a lot and we say it with emphasis. We cannot take our eyes off running our business. It's my job to make sure we've got the bandwidth to be able to successfully deliver on our commitments. The integration team has clear roles and responsibilities and we've engaged the Boston Consulting Group to support our cultural integration and change management initiatives that allows our operators to focus on our customers and our business. Communication is going to be a key to a successful outcome, so that will be a priority all along the way. Now I'll turn the call over to Aaron who will talk a little bit more about operating trends and then Mark will take you through the first quarter Business Performance Drivers Aaron Thanks Larry and good morning everyone. I first want to thank our team for their continued tremendous efforts leveraging areas of upside and executing strategically and with agility. Just like in any best in class culture, they continue to prioritize customer success and a safety first focus. Safety is at the core of everything we do. As you can see on slide 7, our major internal safety program focuses on perfect days and we strive for 100% perfect days throughout the organization. In the first quarter on a branch by branch measurement, all of our operations achieved at least 96% of days as perfect. Equally notable, our total reportable incident rate remains better than the industry's benchmark of 1.0, reflecting our high standards and commitment to the safety of our people and our customers. Turning to slide 8, we are successfully addressing the needs of both local contractors and large national accounts, continuing to target a 60-40 revenue split long term as this diversification provides for growth and resiliency. Local accounts represented 53% of rental revenue in the first quarter compared with 55% a year ago. Despite the slowdown in local project starts as interest rates remained elevated, we are expanding in select regions where infrastructure, education, local utilities and facility maintenance repair projects are underway. On the national account side, government and private funding for new large and mega projects is still quite robust. We're continuing to win our targeted 10-15% share of the project opportunities with several new megaprojects on deck this year and the 2024 project still ramping up. Moving to Slide 9, as you know, we've laid out a net fleet capex plan for 2025 that's roughly 35% lower year over year at the midpoint of our guide. Continuing to improve fleet efficiency and address the dynamic market is the intended goal, and we'll do that by aligning equipment category classes with demand, digesting the 2024 acquired fleet, and remaining agile with expenditures given the overall health of the supply chain. In keeping with those priorities, in the first quarter we spent roughly 55% less on new fleet than in the prior year quarter. 2025 fleet investments are targeted for the typical replacement fleet, certain mega project needs, and growth in specialty categories. We also disposed of 56% more fleet on an OEC basis last quarter versus a year ago to rotate older equipment and pull the 2024 acquired fleet for optimal equipment quality mix and utilization. At the same time, we continue to actively shift sales into the higher return retail and wholesale channels, helping to level set values in a stabilizing used equipment market. In the first quarter we realized proceeds of 45% of OEC on our equipment dispositions. You can see our fleet composition at OEC on the right side of the page. Total fleet was $6.9 billion as of March 31, 2025 with specialty fleet representing about 24% of the total excluding the Cinelease assets. Our base fleet is about $6.7 billion and our higher margin specialty fleet would be about 20% of that with plenty of room to continue to grow. Having a diversified offering that includes specialty fleet is an advantage for us in addressing the comprehensive needs of both local and national account customers. Delivering value added expert solutions to meet these customers' critical or emergency requirements provides another degree of operating resilience for our business. Speaking with the topic of resiliency, let's turn to slide 10 where you can see that despite the uncertain sentiment swirling in the general market, industrial spending and non residential construction starts still show plenty of opportunity for growth built on a foundation of megaproject development and infrastructure investments. Taking a look at the updated industrial spending forecast at the top left, Industrial Info Resources is projecting 2025 to be another strong year of capital and maintenance spending at $503 billion. Dodge's forecast for non residential construction starts in 2025 is estimated to increase 8% to $482 billion. Additionally, there's another $357 billion in infrastructure projects forecasted for 2025. That's also an 8% increase over 2024. The dotted line on these charts reflects growth over pre-pandemic peak levels. You can see that this year and the next three years are currently projected to be some of the strongest periods of activity that this industry has seen. We have also included a trend chart for megaproject starts in the upper right quadrant that gives you a snapshot of the year-to-year growth of the largest construction project starts in North America over the last two years. For 2025, the chart continues to show a substantial number of megaprojects launching this year with a total dollar value exceeding $250 million. We estimate we are only in the early to middle innings of the multi-year opportunity, depending on the project type, whether it is infrastructure, LNG, data centers, et cetera. As we stated, our goal is to capture 10%-15% of these opportunities. We do not take the chart out of beyond this year because visibility is less clear for actual start dates of those projects still in the planning phases, but there is an additional $2 trillion in the megaproject pipeline. Of course there is some overlap in projects among these four data sets, but no matter how you look at it, for companies with the safety record, product breadth, technologies and capabilities to service customers at the national account level, the opportunities for growth remain significant. Turning to Slide 11, I will state the obvious. Diversification is an important strategy for fostering sustainable growth and navigating economic cycles. As Herc has diversified into new end markets, geographies and products and services over the last nine years, we have reduced our reliance on a single industry or customer. We've become more resilient to downturns and more adaptable to emerging opportunities like the mega project developments, technology advancements that support customer productivity, and the secular shift from ownership to rental, especially in the specialty category classes. We believe we're well positioned to manage dynamic markets, and the integration of H&E will further bolster our capabilities and therefore our opportunities. With that, I'll pass the call on to Mark. Thanks, Aaron, and good morning everyone. I'm starting on Slide 13 with a summary of our key metrics for the first quarter. For clarification, these are our GAAP results that include Cinelease, which, as has been discussed, is classified as assets held for sale. I'll just make a couple of quick points here before turning the focus to the core results. In the first quarter, rental revenue increased 2.8% and adjusted EBITDA was flat at $339 million. We recorded a net loss in the first quarter related to $74 million of H&E transaction costs. However, on an adjusted basis, net income was $37 million. We have nothing new to report on the sale of Cinelease. As we continue our negotiations toward a deal, let's move to Slide 14. Here we outline our core financial results, which exclude Centlease from both periods in order to give you a better sense of how the base business performed in the quarter. A full reconciliation of quarterly performance metrics can be found on slide 24 in the appendix of our presentation. For the first quarter, equipment rental revenue was up 4.9% year over year in line with our internal expectations made up of increases in both rate and OEC fleet on rent, partially offset by an unfavorable mix primarily resulting from equipment inflation year over year. For clarification, when it comes to revenue, fleet inflation is in the mix to adjust the volume measured at OEC dollars to a unit metric. REBITDA during the first quarter was up slightly, but REBITDA margin and flow through were under pressure from one less calendar day in February compared with 2024 and a greater contribution this year from less efficient acquisitions in greenfields versus last year. Also, the local market weakness had not started until the second quarter last year, so we had a tougher comp this first quarter managing the fixed cost absorption including the increased insurance expense year over year. We will anniversary that in the second quarter. Adjusted EBITDA increased 2.7% compared with last year's first quarter, benefiting from higher total revenue. Adjusted EBITDA margin was impacted by higher revenue from sales of used equipment, which generate a lower margin than rental revenue. Trailing 12 month ROIC for the core business declined 110 basis points to 9.8% at the end of the quarter. The variance year over year relates to the impact of the local market slowdown and inefficiencies associated with new acquisitions in greenfields over time. The maturation of newer locations, greater fleet efficiency from our prudent onboarding of new fleet and the recovery in the local market will drive ROIC improvement. Shifting to capital management on slide 15, you can see that we generated $49 million of free cash flow in the first quarter on higher operating cash flow and disciplined net capital expenditures. Our current leverage ratio is 2.5 times. We remain confident in our business model and are committed to increasing shareholder value. In the first quarter, we declared a quarterly dividend of $0.70, which represents a 5% increase in our annual dividend to $2.80 per share. If you flip to slide 16, you can see that on our standalone 2025 guidance is unchanged. As noted, our guidance excludes the performance of Centlease. Despite the weather-related choppiness to demand in the first quarter, March rebounded nicely and April month to date is meeting our expectations for growth. Acquisitions completed and mega projects launched in the back half of last year will continue to provide incremental upside in the second quarter this year and will lap the local market slowdown that began last year. For a better comp for net CapEx, we're tracking to our guide and expect by midyear we'll have executed on approximately 45% of our gross CapEx plan given the seasonal ramp in the second quarter heading into the peak season. Overall, the strong demand we're experiencing for large projects in the manufacturing, industrial and infrastructure markets, along with the stability that comes from industrial and commercial maintenance projects, provides plenty of opportunity to continue to grow even through the slower phase of the cycle. Finally, on slide 17, I thought I'd reiterate our confidence in the value creation opportunity that the H&E acquisition brings to Herc. The two most frequently asked questions we're getting from investors are about the durability of the revenue synergy target and the path to deleveraging post close. When it comes to revenue synergies and evaluating these opportunities, we brought to bear our M&A experience over the past five years where we've been successful in integrating our specialty fleet across our acquired general rental customer base. Supporting improved returns on fully integrated acquisitions, we have achieved our target synergized multiple. Like those businesses, H&E's offering is predominantly general rental, which provides us substantial cross selling white space where we can bring our specialty fleet and expertise in rental solutions to their customers. We also have general rental opportunities that combined with H&E's expanded location network propelled a better valuation proposition across customer accounts. For our base case, we're confident in our ability to achieve the revenue synergies over the three year integration period with the expectation of 20% captured in year one primarily focused around general rental cross selling and then ramping up to 60% in year two with specialty cross selling and the balance in year three. Regarding the path to deleveraging, the revenue and cost synergies are also expected to drive higher free cash flow conversion given that our EBITDA flow through will be meaningfully higher than existing margins with relatively lower capital to achieve that EBITDA reflecting better utilization of existing fleet and a purchasing shift to higher utilization specialty fleet, the combined entity will be capitalized to maintain financial strength and flexibility. All in all, we're excited about all of the opportunities ahead and believe the combination with H&E will create benefits for shareholders, employees and customers. With that, operator, we'll take our first question. We will now begin the question and answer session. If you would like to ask a question at this time, simply press star followed by the number one on your telephone keypad. Again, please limit to one question and one follow up. We will pause for a short moment to compile the Q and A roster and your first question comes from the line of Jerry Revich with Goldman Sachs. Jerry, please go ahead. Yes, hi. Good morning everyone. Good morning, Jerry. Mark, I'm wondering if we just continue the conversation you mentioned in April. The results were in line with your expectations for the full year guide. I think just pulling the pieces together, that implies dollar utilization turned north of 40% in April. Can you just comment on that? Is that the magnitude of recovery that you saw in April? Because that's what to get the full year run rate, if that's linear over the coming quarters? I think that's what the math would imply. Is that what you saw in April or are you banking on a continued. Great question, Jerry. That's really spot on. I guess maybe I'd go a step further and say that really the dollar utilization improved in March to that at the levels that we're sort of comping against from prior year. You know that is essentially what's carried through at least through the first half ish of April. I think then you would expect sort of the normalized cadence of dollar utilization as you work your way through the quarters where you would have a normal build from Q1 into Q2 and a build from Q3 into Q4 and then sort of stabilizing at or around that level for 4Q. Super. Appreciate the color. And then. Larry, can I ask in terms of the pricing discipline that you're seeing in the industry, can you just comment on that? Obviously everyone's seeing just general cost inflation and you know, the industry data I think has been pretty mixed. One indicator showed a modest contraction in pricing in March. Can you just talk about what you're seeing in the market and what's your view on the industry pricing discipline that you're seeing based on all of the indicators you track? Yeah, well, you know, as you know, we stopped reporting on pricing per se, you know, in any detail. I would tell you that, you know, we continue to feel, you know, comfortable that there is discipline. The industry is not over fleeted and we'll have to, you know, adjust according to what happens in the local market. Generally we're seeing fairly constant and stable pricing. Thank you. Your next question comes from the line of Rob Wertheimer with Melius Research. Rob, please go ahead. Hi. Thanks. Good morning. I wonder if you could talk a l ittle bit more about your, yeah, good morning, your EBITDA margin performance in the quarter and maybe give us a range of revenue scenarios that you need in order. To post positive margin. I mean, maybe just talk about the factors that led to the margin decline and then where do you kind of need to be above stall speed on margin? Maybe that's the day in February. Maybe that's rate. Maybe that's. Let me just talk through the margin dynamics on different revenue scenarios. Thanks. Yeah, I mean, I think that you're sort of staring at right quarter to quarter. You have sort of 150 basis points sort of decrement. The reality is that that's occurring in Q1, lowest revenue quarter. The reality is that's about $10 million. You know, at the end of the day we're not talking about huge dollars, even though the margin profile certainly looks bigger than that when you're just talking about 150 basis points. It's happening in Q1. Obviously that's our lowest quarter of the season. I think the other thing that is sort of skewing the comp is the fact that there is one less calendar day in 2025 Q1 versus 2024's Q1, which took the benefit of an extra day. Okay, I got it. Could you just talk about how you spent on fleet through the year? You did not change your CapEx outlook. You were maybe a little bit conservative. I think you touched on this in one Q. All else equal, are you trying to be a little bit more tactical this year in case the environment weakens, or is that just random, you know, random variance? I do not know whether that is a signal that you are being more cautious on state deployment. I will stop. I don't think. There's any signaling in it. It was just sort of reacting to the quarter and how it played out. Right. We talked about sort of the choppiness of the demand profile in both, you know, January and February. And so, you know, I think, you know, gross CapEx adds to, from an OEC perspective were about $75 million in Q1. I don't think there's anything to read through to that because, you know, at the end of the day, I think by the end of the second quarter, we'll probably be somewhere in that 45% of the CapEx guide. So essentially sort of halfway through it. You know, as a reminder, 2 and 3 are the big CapEx adds as we build into season, and Q1 and 4 are sort of the disposition quarters sort of all in. I don't think, Rob, you would read anything into that other than just sort of the choppiness that started the quarter. Thank you. Your next question comes from the line of Tami Zakaria with J.P. Morgan. Tami, Sami, please go ahead. Hey, good morning. Thank you so much for taking your question. My first question is I think there's some general talks about a potential macro slowdown later this year or possibly a recession. Even given all the tariff conversations, I was wondering, does your current guide embed a recession scenario in it? If not, how should we think about the possibility of that? No, I mean, I think, you know, the guide as it sits today is sort of what we see today, you know, and that is sort of a no growth, local market environment, which we stated when we released guidance. The backfill to that is growth in the infrastructure and megaproject environment. If the macro were to change significantly, then, you know, that theoretically could cause us to sort of change our guide too. Understood, that's helpful. Related to the pending acquisition, I know you laid out some synergy targets. I was wondering, was there any customer attrition embedded in that synergy target? Sometimes there's some natural customer churn after major acquisitions like that between two parties. Was anything like that embedded in your synergy target or not really? No, there absolutely was. We assumed a 10% dis-synergy customer churn, which we took sort of. When you think about sort of the guide, the revenue synergy guide, about 60% of that churn was year one and 40% of that churn was in the second year post close. Is that 10% sort of close to normally you would see in a year or higher than that? Ask me that question one more time, Tammy. Is that 10% churn that you just mentioned baked into the synergy target? Is that the normal rate of churn or is that elevated versus what you see normally? Yeah, I would say it's probably right in line. I would also tell you that that's sort of above sort of the normalized attrition rate that the rental companies. Sort. Of experience on a year-to-year basis. Great, thank you. Your next question comes from the line of Steven Ramsey with Thompson Research Group. Steven, please go ahead. Good morning. Wanted to think about mega projects being key to supporting the 5% growth outlook and the mega project start level being over two times the last couple years. Leading my question, mega projects where you are the primary supplier or large supplier with this, with the start pickup what you have in hand, is that enough to support a sustained sort of mid single digit growth outlook beyond this year? Yeah, our pipeline where we sit now versus the kind of the growth trajectory we've had in the mega success from last year and then how we look out forward, it is enough to keep us in the guide range of 5% growth for the enterprise. Okay, okay, that's helpful. Flipping to the local markets, is your strategy for capturing business in the local markets, is it different than it was in 2024? You've talked about disciplined pricing, but I'm curious if your go to market approach is changing in any way to make s ure you keep that share. We have a comprehensive go to market strategy which is attributed to our local sales team in the field. We updated that a couple years ago so it hasn't changed from 2024. The go to market strategy gives incentives for acquiring new business revenue health like diversifying your rental across our specialty businesses, things of that nature. It hasn't changed since 2024. It is the same go to market that we'll use when the H&E Equipment Services acquisition is brought on board. Okay, that's helpful, thank you. Your next question comes from the line of Kyle Menges with Citigroup. Kyle, please go ahead. Thank you. I was hoping if you could provide some color on just what you're seeing in the core end markets. I know you touched on it a little bit, but maybe just color on what you're hearing from customers, both national and local, post Inauguration Day. Have tariffs entered the conversation at this point? What are you hearing from customers on tariffs and how that could maybe impact projects or capex this year? I'll answer it in two different ways. First, from the larger national accounts that are doing the big projects, especially like mechanical general contractors, electric contractors, they got plenty of work and you know, that's going to continue on. We believe the local markets, of course, have slowed down. You know, if you have local contractors, they're probably, you know, feeling a slower pace of construction activity as it relates to the tariff activity. It's really early for us to get that kind of pulse. We're not hearing much from our contractor base about them changing their direction. We're certainly not seeing an abundance of delays of projects. It's really just early in that phase. We are paying close attention to that. As we all know, it's a moving target right now, but we're paying close attention to it. Got it. Understandable. On margins, equipment rental margins were a bit light in the quarter. Understand it was some just lower fixed cost absorption and I guess how much was also related to weather and some branch shutdowns in the quarter and then just any other cost pressures that were maybe unexpected in the quarter that we should be thinking about or paying attention to? No, I mean, I think that you. Know, one sort of the reduced. Margin comparably over Q1 of 2024 was, was certainly anticipated. Right. I think as Q1 of last year, you know, the used equipment market continued to sort of moderate as you worked your way through 2024. I think it just shows, you know, primarily through the proceeds percentage last year was 49% and this year was closer to 45%. You know, so you think about sort of a 10% ish sort of reduction there. I think the good news on that front is, is that we view the used equipment market as stabilized. It's sort of been that way, you know, through the back half of 2024 and into Q1. You know, I think that sort of coupled with, you know, fixed costs that, you know, in Q1 it's sort of your most exposed quarter because it's your smallest revenue quarter. I mentioned in my prepared remarks, you know, we hadn't crossed over sort of the increased insurance expense that we talked about last year. Q2, so that was a comparable. Or. A comp that wasn't necessarily there last year. Q1 and then just general, you know, M&A and greenfield activity and covering off that fixed cost component is more exposed in Q1 because the revenue is certainly less. Got it. Thank you guys. Thank you. Your next question comes from the line of Ken Newman with KeyBanc Capital Markets. Ken, please go ahead. Hey, good morning guys. Morning. Morning Ken, thank you. For my first question, Mark, you know. Just thinking about the flow through, obviously there's a lot of moving pieces that. You talked through just now. Is it fair to say that flow? Through also normalized in March and is are we back to that more normalized, call it 40-50% type of range in the second quarter here? Yeah, I think that's fair to say. I think that, you know, like, you know, it sort of, it falls into place once sort of the demand normalizes which we saw in March and you know, that was sort of the result sort of across the board dollar yield I mentioned earlier, flow through, et cetera. Got it. That's helpful. For my follow up, you. Know, I did want to ask what's. Driving the confidence that local account activity stays stable through year end? You know, I think you guys are acknowledging that the visibility within that market still remains kind of choppy. You're not seeing, you know, it seems somewhat stable. My guess is that local account rental revenue was down year over year in Q1 and if that's right, I think. That's the first time since 2020. Is that the right way to think about it and then secondly, driving the confidence that that stays stable through year end? Yeah, look, I think our confidence comes from the diversification of our business and the new verticals and the new markets that we've entered as well as the addition of our specialty business into the local gen rent companies that we've acquired that give us ample opportunity to continue seeing that be positive for us. You know, I don't think it was down over last year Q1, so we are, look, it's a, we're operating at a relatively low level and I think we continue to add capability as well as diversification. That'll keep us in good stead. Okay. Thanks. Your next question comes from the line of Mig Dobre with Baird. Mick, please go ahead. Thanks for fitting me in. Just a question on margin as well. Sorry, we keep going back to this topic, but as mega projects are becoming maybe a bigger part of the mix, is this mixed negative from a margin standpoint for your business? No, it is not. I think, you know, sort of the mega project profitability profile is right in line with, as we've talked about it, you know, now for, I don't know, probably four or five quarters at a minimum. You know, I think the margin pressure in Q1 is right. Is back to what I said earlier in terms of sort of the, you know, not crossing over, anniversarying over a couple of things that happened or didn't happen in Q1 last year that sort of happened in Q2 through 4 and into Q1 of this year. The other component of that is just sort of the lowest, slowest quarter that we have and the fixed cost that we have to overcome in that. In a slowing M&A and acquisition environment. Yeah. Okay, so that's interesting because the H&E's experience with megaproject is a little bit different in their case, if I remember. Correctly, they sort of called that out. As being a bit of a headwind to margin because pricing was different. I am kind of curious how your business is maybe structured in this regard different than H&E's and how you plan to adjust that post acquisition. Yeah, I mean, I think Mick, our business is much different than H&E's. I mean there are similarities, both renting core fleet, but our breadth of products in the general rental category is much broader. We can answer the call more often on a megaproject, and then the specialty fleet, which we are just much more along in our journey than H&E. That really is the difference maker when you go into these big megaprojects, and it really neutralizes some of the price you get for volume on the general rental fleet. You get the specialty fleet, which gives you the premium part financial returns. Therefore, your stake in a megaproject looks a lot like our core business overall. You are getting that flow and extended utilization time, utilization of the fleet over time. We like it. I see. If I may squeeze one final one. Leverage is obviously on a lot of people's minds, especially after you announced this large acquisition. I am curious, maybe you can comment on how you think about the pro forma leverage profile once the transaction is closed and maybe given what has been communicated through the stock price and also the uncertain macroeconomic environment, how do you think about bringing that leverage down post close? What is the plan here? Maybe one to two years out. What are some of the levers that you can pull to maybe accelerate that process? Yeah, no, great question. I think, you know, sort of the entry or exit point, however you want to look at that, is probably just north of the 3-5 range. You know, as we've stated, you know, we believe that we'll be back inside our two to three times leverage profile within 24 months. You know, I think your question is sort of if the macro does in fact change on us post close, then it's really just running the playbook that we would run in a downside scenario. However you want to think about how deep that downside scenario is. We would cut CapEx, age the fleet, sell off excess fleet and then begin to evaluate the variable cost structure of the business to continue to protect our margin profile. Yeah, and additionally, I'll remind you, Meg, maybe I don't know, you were following us. Back when we spun from Hertz, we were levered at 4.3 times with a totally broken company and we were able to bring that leverage down quite significantly in a pretty short period of time. In this environment, neither company is a broken company. We are running two excllent companies and we expect to be able to perform as we've stated. Thank you. Good luck. Thank you. That concludes our question and answer session. I will now hand it over to Leslie Hunziker for closing remarks. Leslie. Thank you for joining us on the call today. We look forward to updating you on our progress in the quarters to come. Of course, if you have any further questions, please do not hesitate to reach out to us. Have a great day. That concludes today's call. You may now disconnect.