Custom Truck One Source, Inc. (NYSE:CTOS) Q4 2022 Earnings Call Transcript

Ryan McMonagle: Yes, Mike, good to — good to talk to you. Yes, we we’re feeling good about utilization, so I think, we, we mentioned that utilization in Q4 was up to 86%, right? So we, finished the year very strong from an overall utilization standpoint and strong utilization has held so far through Q1. And so, we are feeling good from a demand standpoint. We have, a significant portion of the new equipment we’re adding has a reservation against it. We don’t work quite that far forward that we have visibility of the whole year from a new equipment reservation standpoint, but, but we see utilization staying strong through the full year of ’23.

Michael Shlisky: Okay. also in your comments, you had mentioned investing in your footprint. I’m just curious if you update us on whether you have your eye on any new locations coming in 2023 at all?

Ryan McMonagle: There are, we’ve mentioned I think in our investor deck we, we mentioned six kind of broad markets, the Pacific Northwest and Northern California and the Southwest and the Carolinas and New York and New Jersey, where we know that we need to add to our footprint so those are certainly the target mar, so those are certainly the target markets that we’re focused on. nothing imminent to report from a new location, but, we’re actively working in all those markets to, to look at both opening up a Greenfield site and then also looking at kind of local or regional m and a opportunities in those markets as well.

Michael Shlisky: Okay. And maybe the last one for me is on the pricing of new equipment in 2023. You’ve had to success with pricing so far, but do you think you’ve got more room to grow in 2023 and it’s not going to be more optimistic than just passing along higher costs?

Ryan McMonagle: I think we’ve always taken the view of let’s let the market kind of dictate pricing. And so as backlogs continue to grow, we’ve tried to work closely with our customers to, to be able to pass along cost increases where we see them and then just also react to how the market seems to be seems to be pricing equipment. Okay. I’ll leave it there guys. Thanks so much.

Operator: Thank you. Our next question is from Kenneth Chung with Citigroup. Please proceed with your question.

Kenneth Chung: Thank you guys. Good afternoon. The first question just on if there’s any help you can provide as to from a full year perspective, I mean that the, the quarterly cadence and the seasonality has been disrupted by all kinds of factors especially in ’22, given the supply chain issues, but you’re almost halfway through March. Can you just give us an a sense that any kind of handholding that you would provide in terms of any just parameters and from a seasonality perspective in ’23, from a either revenue end or EBITDA perspective?

Chris Eperjesy: Yeah, sure. Hi Tim, this is Chris. As we don’t give quarterly guidance, but just to give you some general color, if you look back the past two years in terms of our EBITDA, I think it’s been roughly split 45ish percent, first half 55%, second half. I think revenue split was similar in 2022. We would expect a similar kind of flow in cadence in 2023. We just had extremely strong fourth quarter, and so our expectations for Q1 are probably more in that mid single digit in terms of EBITDA growth for q1. But that’s, that’s probably about as much as I can give you right now. So 45, 55, first half, second half, and kind of mid single digit growth on EBITDA in Q1 versus Q1 of last year.