BigRentz surpasses 14,000 supplier locations
The company reaffirms its commitment to improving customer experience by developing & investing in new technology, capabilities & features BigRentz has announced the significant achievement of surpassing 14,000 construction rental equipment supplier locations nationwide, further cementing the company’s position as a trusted industry leader and partner to equipment rental houses of all sizes. These new and existing locations make up one of the sector’s largest networks of suppliers and ensure that builders, technicians, developers, contractors, and others have access to the equipment they need, regardless of project size, location, or complexity. In addition to affirming its dedication to providing every industry professional with the equipment they need to complete projects on time and budget, BigRentz is also doubling down on its commitment to invest in and develop new technology to consolidate rental management in one, easy-to-use platform. The company’s strategic outlook introduces new capabilities and features both to improve the supplier experience and to meet the evolving needs of the broader industry. “We are grateful to our valued supplier partners who’ve helped us achieve this milestone and made BigRentz the go-to platform for construction equipment rentals,” said BigRentz CEO Scott Cannon, CEO. “We have big goals at BigRentz and we don’t plan to stop at 14,000 supplier locations. In addition to our goals of supporting our suppliers and growing our network, we’re doubling down on developing and improving technology needed to not only simplify the equipment rental process but also help clients solve other complicated challenges, be those related to staffing, finances or any other problem they may face.” Founded in 2012, BigRentz boasts a network of more than 6,000 equipment partners throughout the USA, giving renters access to 14,000 equipment yards through their platform. The company’s digital platform has helped redefine the rental sector, simplifying equipment procurement and project management, providing customers access to real-time data and reporting, and making costs and budgets easy to track across multiple projects. BigRentz offers an expansive range of equipment categories including aerial platforms like scissor lifts, material handling such as forklifts, heavy and earthmoving equipment, and cranes as well as job site services like dumpsters, generators, and light towers. This comprehensive offering distinguishes BigRentz from competitors, allowing customers to secure all necessary equipment from a single source. The milestone of surpassing 14,000 supplier locations is a prelude to the era of BigRentz as the go-to construction technology solution and rental provider. As the industry undergoes digital transformation, BigRentz reinforces its role in reshaping how construction businesses approach technology and resources.
Point of Rental Software acquires Record360
Acquisition to Expand Rental Inspection Software’s Reach Worldwide Record360, a rental inspection software solution, has been acquired by Point of Rental Software, the largest company globally in rental management software. The acquisition is designed to fuel Record360’s product development and growth, allowing the team to accelerate the pace of product innovation, increase its global footprint, and continue setting the standard for mobile digital documentation tools. “Point of Rental aligns with our values of bringing innovative products to market while focusing on responsible long-term growth and customer service,” said Record360 CEO Abby Chao. “Because our products are complementary, Record360 customers will benefit as we discover new features we can build into our product.” Record360 will continue to operate as its own business entity, adding inspection software to Point of Rental’s valuable suite of RMS-independent solutions, which also include e-commerce, consumer portal, electronic signature collection, and integrated payments. “We see immense potential in the abilities of Record360 to transform the industry and we’re excited to combine our resources to realize that potential,” said Point of Rental CEO Wayne Harris. “We’ll continue to prioritize Record360’s autonomy and increase integration points through the Open API so that any ERP system can fully integrate with Record360.” Leadership from both organizations will talk about the future of the united business at Point of Rental’s pre-ARA Show happy hour in New Orleans on Feb. 18. For those not able to attend, they’ll also host an online webinar to share the vision for Record360 in the weeks after the show.
United Rentals announces Record Fourth Quarter and full-year 2023 results
United Rentals, Inc. has announced the financial results for the fourth quarter of 2023 and reported its full-year results on Form 10-K. The company also announced its full-year 2024 guidance and an enhanced capital allocation strategy focused on balancing growth and returns to drive shareholder value that includes a lower targeted full-cycle leverage range, its intention to repurchase $1.5 billion of common stock in 2024 and a 10% increase in its dividend per share. Fourth Quarter 2023Highlights Total revenue of $3.728 billion, including rental revenue2 of $3.119 billion. Net income of $679 million, at a margin3 of 18.2%. GAAP diluted earnings per share of $10.01, and adjusted EPS4 of $11.26. Adjusted EBITDA4 of $1.809 billion, at a margin3 of 48.5%. Year-over-year, fleet productivity5 increased 0.3% as reported and 2.4% on a pro forma5 basis. Full-year net cash provided by operating activities of $4.704 billion; free cash flow4 of $2.306 billion, including gross payments for purchases of rental equipment of $3.714 billion. Full-year gross rental capital expenditures of $3.508 billion. Returned $1.406 billion to shareholders for the full-year, comprised of $1.000 billion via share repurchases and $406 million via dividends paid. Year-end net leverage ratio6 of 1.6x, with total liquidity6 of $3.330 billion. CEO Comment Matthew Flannery, chief executive officer of United Rentals, said, “We entered 2023 with the goal of raising the bar and I’m incredibly pleased with the team’s performance. Our fourth quarter results capped a year of new records across revenue, profits, and returns driven by a relentless commitment to serving our customers while staying laser-focused on safety and operational excellence.” Flannery continued, “We are now excited to deliver on the growth we expect in 2024, supported by our strength on large projects. Our guidance reflects the opportunities we see across our business as we leverage our competitive advantages to support our customers and outpace the market. We continue to execute on our long-held strategy to deliver profitable growth, strong free cash flow and exceptional returns. Our new leverage targets and 2024 capital allocation plans are further evidence of our commitment to driving shareholder value.” _______________ 1. A discussion of the company’s full-year 2023 results of operations is included in its Annual Report on Form 10-K filed with the SEC. 2. Rental revenue includes owned equipment rental revenue, re-rent revenue and ancillary revenue. 3. Net income margin and adjusted EBITDA margin represent net income or adjusted EBITDA divided by total revenue. 4. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted EPS (earnings per share) and free cash flow are non-GAAP measures as defined in the tables below. See the tables below for reconciliations to the most comparable GAAP measures. 5. Fleet productivity reflects the combined impact of changes in rental rates, time utilization and mix on owned equipment rental revenue. The company acquired Ahern Rentals, Inc. (“Ahern Rentals”) in December 2022. Pro forma results reflect the combination of United Rentals and Ahern Rentals for all periods presented. See the table below for more information. 6. The net leverage ratio reflects net debt (total debt less cash and cash equivalents) divided by adjusted EBITDA for the trailing 12 months. Total liquidity reflects cash and cash equivalents plus availability under the asset-based revolving credit facility (“ABL facility”) and the accounts receivable securitization facility. 2024 Outlook The company provided the following outlook for 2024. 2024 Outlook 2023 Actual Total revenue $14.650 billion to $15.150 billion $14.332 billion Adjusted EBITDA7 $6.900 billion to $7.150 billion $6.857 billion Net rental capital expenditures after gross purchases $1.900 billion to $2.200 billion, after gross purchases of $3.400 billion to $3.700 billion $1.934 billion net, $3.508 billion gross Net cash provided by operating activities $4.150 billion to $4.750 billion $4.704 billion Free cash flow excluding merger and restructuring related payments8 $2.000 billion to $2.200 billion $2.314 billion Summary of Fourth Quarter 2023 Financial Results Rental revenue for the quarter increased 13.5% year-over-year to a fourth quarter record of $3.119 billion, reflecting broad-based strength of demand across the company’s end-markets and the impact of the Ahern Rentals acquisition. Fleet productivity increased 0.3% year-over-year, while average original equipment at cost (“OEC”) increased 15.1%. On a pro forma basis, rental revenue increased 7.6% year-over-year, supported by a 6.9% increase in average OEC and a 2.4% increase in fleet productivity. Used equipment sales in the quarter increased 7.1% year-over-year. Used equipment sales generated $438 million of proceeds at a GAAP gross margin of 50.0% and an adjusted gross margin9 of 55.3%, compared to $409 million at a GAAP gross margin of 58.9% and an adjusted gross margin of 61.6% for the same period last year. The year-over-year declines in the GAAP and adjusted gross margins primarily reflect the expected normalization of the used equipment market and the impact of sales of equipment acquired in the Ahern Rentals acquisition. Average fleet age was 52.4 months as of December 31, 2023. Net income for the quarter increased 6.3% year-over-year to $679 million, while net income margin decreased 120 basis points to 18.2%. Net income was a fourth quarter record excluding the fourth quarter of 2017, which included a one-time net income benefit associated with the enactment of the Tax Cuts and Jobs Act of 2017. On a pro forma basis, fourth quarter net income margin declined 40 basis points. The decrease in the company’s reported net income margin was primarily driven by the impact of the Ahern Rentals acquisition on rental and used equipment gross margins, and higher interest expense, partially offset by reductions in selling, general and administrative (“SG&A”) and income tax expenses as a percentage of revenue. While the effective income tax rate of 24.7% for the quarter decreased 390 basis points year-over-year, primarily due to the settlement in the fourth quarter 2022 of non-recurring prior year tax adjustments, the full-year effective income tax rate was largely flat year-over-year at 24.5%. _______________ 7. Information reconciling forward-looking adjusted EBITDA to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed below. 8. Free cash flow excludes merger and restructuring related payments, which cannot be reasonably predicted for
ARA announces industry contributor award recipients
Each year, the American Rental Association (ARA) honors individuals for outstanding service to the association and the equipment and event rental industry. The following are recipients of this year’s industry contributor awards, which will be presented at The ARA Show™ 2024 in New Orleans. Industry Ambassador Award: Byron Alleman This award recognizes an individual who has demonstrated long-term leadership and service to the association at the national, state, or local levels. Byron Alleman, retired owner of Lafayette Rental Service, Lafayette, La., has been a tireless ambassador for the equipment rental industry in the state of Louisiana. He spent two decades in service on the ARA of Louisiana chapter board of directors, including multiple terms in the roles of president, vice president, secretary and treasurer. Alleman hosted industry meetings at his business 14 times, traveled the state visiting fellow rental store members, and coordinated needed equipment in hurricane-damaged areas. He was awarded the ARA Region Four Person of the Year award in 2008 and again in 2016 in recognition of his efforts to advance the industry and serve members in his area. At the national level, Alleman served on the ARA Insurance Risk Management Committee in 2013 and on ARA’s Construction/Industrial & General Tool Shared Interest Group in 2016. In addition, he supported the industry’s legislative initiatives as a member of ARAPAC — ARA’s political action committee. Exemplary Service Award: Scott Pevey This award recognizes an individual or group that has significantly contributed to a defined area of association service (such as government affairs, education, technology, or workforce development). Scott Pevey, senior manager, Ditch Witch, Perry, Okla., served the equipment rental industry as a member of the ARA Board of Directors in the role of associate member director from 2021 – 2023. One of Pevey’s top achievements in this capacity was the direction and feedback he provided to the association as it restructured its communications strategy to a multimedia format. From 2018 – 2020, Pevey served on the ARA Foundation Board of Trustees. During his term, he brought the idea of the Community Impact Program to the Foundation board and was instrumental in developing the partnership between the ARA Foundation and The Toro Company Foundation to implement the program. The Community Impact Program supports local non-profits that help improve communities where members work and live. Pevey has volunteered at six of the 11 Community Impact Projects that have been hosted to date and has assisted in procuring equipment and volunteers from Ditch Witch dealers for all projects. Pevey also has helped guide the direction of The ARA Show as a member of its Exhibitor Advisory Council, serving in 2012, from 2016 – 2018, and in 2021 – 2022 while a member of the ARA Board of Directors. Industry Impact Award: Scott Woodruff This award recognizes a manufacturer supplier and/or independent manufacturer representative rental industry professional who made a significant impact on the association and/or industry during the past two years. Scott Woodruff, CEO, Tent Ox, Mechanicsburg, Pa., devoted himself to developing specialized attachments for articulating loaders. Seeing a need for this type of equipment, he set out to develop the necessary attachments to do the work of the tent rental industry. The attachments are designed to assist with not only tent installations and removals but also with moving materials around job sites in general. Woodruff markets this equipment as the Tent Ox, along with the associated attachments. Woodruff’s equipment has been key in helping many new and established rental businesses learn better and safer ways to accomplish their work. In addition to his involvement in ARA events, Woodruff is an active member of the Manufacturers and Tent Renters Association (MATRA). Rising Star Award: Stefani Donabedian The Rising Star Award recognizes a young professional who has demonstrated leadership at the grassroots level. Stefani Donabedian, vice president of Decanted Wine Truck, Hudson, Mass., recently purchased her wine bar truck, transitioning from her role in the equipment segment as a marketing consultant with Worcester, Mass.-based Mobile Air & Power Rentals. Donabedian joined the ARA of Massachusetts board in 2020 and currently serves in the role of president. To supplement her ARA state board duties, Donabedian has participated in ARA’s Leadership Conference, an event designed to educate and motivate emerging leaders within the association. As a member of the ARA Young Professional (YP) Network, Donabedian has attended several YP conferences and has served on the Young Professionals Committee since 2022. In her capacity as a committee member, Donabedian has helped spearhead the YP learning track in RentalU, ARA’s online education and training platform. Donabedian also has supported the industry’s legislative initiatives as a member of ARAPAC — ARA’s political action committee — and as a participant at ARA’s 2023 National Legislative Caucus in Washington, D.C. In recognition of her efforts within the industry and ARA, Donabedian was named one of Rental Management magazine’s “12 to Watch Under 40” in 2022 and in 2023, she received the ARA Region One Leadership Impact Award. Leadership Impact Awards These awards recognize an individual in each of the ARA 10 regions whose leadership benefited their state and/or local association and its members over the past year. Region One: Dan Morris, Kennebec Equipment Rental Co., Fairfield, Maine Region Two: Tina Behnke Spencer, AirPac Rents, Front Royal, Va. Region Three: Brandon Ahlgren, CERP, Elite Events & Rentals, Tampa, Fla. Region Four: Jennifer Rodriguez, CERP, Marianne’s Rentals, Oklahoma City, Okla. Region Five: Sean Williams, ECP-SM, First Place Rental, Oswego, Ill. Region Six: John Schupp, Rental Supply, O’Fallon, Mo. Region Seven: Herb White, Continental Divide Marketing, Golden, Colo. Region Eight: Tim Allen, Allen Rental, Roseburg, Ore. Region Nine: Michelle Nelson, ECP-ST, MK Equipment Corp., Honolulu Region 10: Jim Boddez, Five Bo, St. Albert, Alberta, Canada
H&E Equipment Services signs Definitive Agreement to acquire Phoenix-Based Precision Rentals
Based in Phoenix, Ariz., Precision operates a branch in Phoenix and a second location in Aurora, CO H&E Equipment Services just announced the signing of a definitive agreement to acquire the business of Precision Rentals. Based in Phoenix, Ariz., Precision operates a branch in Phoenix and a second location in Aurora, Colo. Precision offers a mix of general rental assets with a total fleet size, as measured by original equipment cost, of approximately $70 million and an attractive average fleet age of 37 months. The transaction is expected to close during the first quarter of 2024, following regulatory clearance and other customary closing conditions. Brad Barber, CEO of H&E Equipment Services Inc., identified compelling strategic benefits associated with the acquisition. “Since 2006, Precision Rentals has successfully grown its equipment rental business through a focus on reliability, fleet diversity and exceptional customer service,” said Barber. “The company’s branch operations are in cities with strong construction activity and excellent future opportunities, including several mega projects. The acquisition is expected to expand the H&E customer base as branch density is increased across the Phoenix and Denver metropolitan areas.” H&E continues to grow its branch network in 2023 through organic expansion and acquisitions, with 17 branches added through November, and an additional two branches upon this transaction.
Rental Hall of Fame inductees announced
Each year, the American Rental Association (ARA) honors individuals for outstanding service to the association and the rental industry. This year, two longtime rental industry leaders will become the newest inductees into the Rental Hall of Fame and will be honored at The ARA Show™ 2024 in New Orleans. The Rental Hall of Fame was created in 2000 to honor those individuals who have changed the trajectory of the equipment and event rental industry. Each year, nominations are accepted to recognize outstanding industry leaders who have made a substantial and lasting impact on the industry’s success and growth at the national and/or international level. “The Rental Hall of Fame is ARA’s most prestigious award. This year, we recognize two individuals whose contributions made a significant impact on growing the equipment and event rental industry. Their dedication has been felt across the rental community and we look forward to bestowing them with the rental industry’s highest honor,” says Tony Conant, ARA CEO. Bruce Campbell, Do It Best Corp., Fort Wayne, Ind. Bruce Campbell, an equipment rental industry veteran began his career in 1968 in Fort Wayne, Ind., as an employee of an independent rental store. In 1974 he relocated to the Cincinnati area. Then in 1984, he founded L&B Equipment Rental in Harrison, Ohio. As a rental operator, Campbell served a term as vice president of the ARA of Ohio and two terms as president of the Greater Cincinnati Tool Rental Association. In 1989, he earned an ARA President’s Image Award for L&B Equipment Rental. Campbell sold his rental business in 1992, retired, and became a rental consultant. In 1994, Campbell was instrumental in the launching of a rental program for Do it Best Corp., then known as HWI (Hardware Wholesalers, Inc.). Do it Best Corp., a cooperative that supplies products and services to independent hardware, lumber, and home improvement retailers, was looking for an expert with rental knowledge to help develop the program. Campbell contributed his consulting services to the initiative and helped many Do it Best Corp. members become successful rental operators. Campbell helped create the Do it Best Rental School – a member education event through which he provided extensive knowledge of equipment, procedures, safety, the latest trends and strong financial knowledge. Through this program, Campbell aimed to instill high standards and the importance of product quality, inventory and customer service. Over the years, Campbell has worked to continuously enhance the Do it Best Rental School’s curriculum and offerings. Along the way, he has served as an invaluable resource for learning all aspects of the rental industry for program members across the U.S. and abroad. Campbell also strongly advocates for his Do it Best Rental School students to become active in ARA both locally and nationally. Jay D. Chapin, Taylor Rental Corp., Springfield, Mass. The late Jay D. Chapin of Westfield, Mass., past president and co-founder of Taylor Rental Corp., began working at Dealer Supply Co. in 1959, the same year that the organization put together the first Taylor Rental franchise. He became vice president of Dealer Supply Co. in 1963. Chapin was named company president in 1971, and in 1972 Dealer Supply Co. became Taylor Rental Corp. Seven years later, there were 626 Taylor Rental Centers (TRCs) in full operation in 49 states in the U.S. As president of the organization, Chapin helped family owned, small-business entrepreneurs prosper by backing them with the knowledge, experience and opportunities that a major corporation could provide. Under Chapin’s leadership, Taylor Rental Corp. was at the forefront when digital information was in its infancy in the rental industry. In the late 1970s, he introduced TOPIC–the TRC equivalent of Taylor Rental Corp.’s proprietary point-of-sale computer system, CompuRent. In 1982, he made CompuRent available to independent rental outlets. During his career, Chapin developed many products, programs and services that enabled TRC franchises to grow and expand the rental concept in communities throughout the U.S. He instituted a team of business management consultants to provide on-site guidance and support to franchisees, developed private-label products to enhance brand recognition, created in-store designs and signage, built a 100,000-sq.-ft. warehouse to allow for faster delivery of products to franchisees, and instituted national advertising programs. Chapin also encouraged TRC members’ involvement in ARA.
What happens in the auto industry…..
OEM’s and Lift Truck dealers have always been paying close attention to what is happening in the auto industry, thinking that these large major industrial players that also sell via dealer networks are a step ahead of the equipment industry, and that most of the current as well as any expected financial and economic changes incurred by the car industry will eventually wind up on the equipment dealer’s doorstep. And you know what, that is probably truer than you think. For example, let’s consider the latest auto industry adventure called the latest UAW contract renewal terms. They are asking for some substantial pay increases as well as benefit adjustments. The Ford contract asked for 25% increases over the term of the contract which will put the top rate up to $40 an hour, with a 68% increase for starting wages to over $28 an hour. That makes the top wage salary alone $83000, plus health and retirement benefits. All in, you are probably pushing $140,000 to $150,000 a year. This will not take place upon the agreement by the workers to accept the plan, but over the term of the new contract. So how will this new contract impact the auto industry? The PRICE of cars will increase, as if they haven’t already. The cost of REPAIRS will increase, as if they didn’t already. PARTS costs will increase for parts generated by the OEM. And my best guess is they will sell fewer cars annually compared to the past. OEM’s will reduce the number of employees by automating the build process along the lines of Tesla. Their stock prices will feel the negative impact of all the above. So, if what happens in the auto industry eventually winds up in your office, what can you expect and what can you do about it. I will bet you a cigar (Dean will provide them for you) that every manager reading this column will hear about the UAW deal from employees expecting to receive a comp adjustment starting January 1, 2024. Most of you have probably received these requests already. And since your techs, parts and rental folks drive your absorption factor, you probably will have to do something to keep them on board since we all know there is demand for experienced techs and parts personnel. So where does this leave you, the material handling dealer? Let’s compare the list above to your operation. If you increase your any fixed or variable costs (like payroll and benefits) you will have to sell more or INCREASE PRICING, thus increasing margin dollars to cover the new cost levels. The cost of your REPAIRS will have to be increased to maintain service margins, including work performed on maintenance contracts. Any PARTS department cost increases will also have to be covered via pricing upgrades. Seeing how all these factors impact new unit sales, I suspect customers will shop for the units and in the end your new unit sales will be lower than expected. Used sales and pure rental transactions should increase. Probably the biggest issue a dealer will have to investigate is how his/her competitors are doing regarding the same issues. If they hold to their current pricing, you have a problem. You will have to predict your competitor’s next move. You will need to find ways to improve productivity which will improve profit margins on a high percentage of your sales. To add to your problems, you will need to assist manufacturers and warehouse customers to improve productivity (this may come with a substantial cost component). Your CFO will need to play around with these various budget and cash flow implications. You could wind up with two or three versions to track, depending on how the sales numbers work out. Monthly and quarterly budgets are required along with the related cash flow analysis. We are talking about quite a bit of work here which may need to be outsourced. When you ponder your options long enough you come to realize that no matter what happens you need to take steps to improve productivity. Improve productivity and all the other problems become manageable because you have the flexibility to adjust as necessary without putting yourself in a bind financially. I also wanted to comment on last month’s column. In the Material Handling Wholesaler reader survey conducted in July you asked for more current info regarding ESOP’s. Consequently, I asked Nathan Perkins to provide some comments on the current state of the ESOP market and he produced a small book doing it. In any event it is a readable overview of the current ESOP market. If enough of you have questions, we can have a ZOOM meeting to discuss any questions you may have. So let us know if such a meeting would be beneficial and we will put it together. And, as mentioned before, there would be no disclosure of who is asking the questions. Next month, we will provide our annual tax report, current taxes as well as potential changes to the code. If you have any tax questions you would like addressed, please contact me and we will follow up and report next month. About the Columnist: Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.
ARA’s quarterly forecast shows increased optimism, slower growth and resilient markets
Rental revenue projections increase in U.S. and Canada heading into 2024 In its updated forecast, the American Rental Association (ARA) indicates that United States equipment rental industry’s growth will soften but still grow. Last quarter, the year-over-year growth was expected to be 7.6% in 2023 and 3.1% in 2024. The most current projections indicate 11.8% growth in 2023 totaling $71.5 billion in construction and general tool rental revenue. As for 2024, a 7.1% revenue increase is now expected. This forecast includes both traditional and specialty as the new industry measure. Last quarter the association corrected the forecast that underestimated non-residential construction spending by at least 20% and ‘specialty rental’ in overall rental revenues. “We are more bullish this quarter than last quarter,” says Scott Hazelton, managing director at S&P Global. “We are seeing a decent uptick with inflation moderating and our projections are relatively similar — stagnant but strong. It’s important to note that there will be more growth in construction and industrial equipment (CIE) than in general tool.” Earlier in the year, the forecast predicted a recession that did not materialize. While the first two quarters of the year proved slow, third quarter revenues are very strong, and the quarter four projections appear that way as well. “The biggest change is in the general tool revenue projection,” Hazelton says. “This is probably a function of timing with manufacturing strikes and that the housing market has been more resilient than we thought it would be. People are renovating homes because they are staying in them and home values are trending upwards so there is incentive to invest in their homes.” Canadian equipment rental revenue growth is higher in 2023 compared to last quarter’s projections due to inflation and resilient demand. The CIE outlook in Canada is slower growth with strong levels of activity in 2024, that is a 3.7% revenue increase, making it a $4.5 billion industry with stronger growth anticipated in outbound years, a 7.2% revenue increase in 2025 and 5.7% in 2026. There are some very real issues with Canada’s housing market and that is the primary cause of the revenue decline in 2023, totaling $971 million. In 2024, the projected general tool revenue will total $963 million, a 0.9% decline from 2023. ARA’s quarterly member survey showed conflicting results amongst members with half of respondents saying they expect to see a revenue increase in quarter four and half expecting a revenue decrease. This quarter there was also an increase in members who believe the situation for business is more stagnant. For more in-depth economic data, visit www.ARArental.org/ara-rentalytics, to learn more about RentalyticsTM.
H&E opens new branch in Conroe, Texas
Effective November 13, 2023, H&E Equipment Services Inc. (H&E) announces the opening of its Conroe branch, its fifth rental location in the greater Houston market and the 25th in the state of Texas. Since the beginning of the second quarter of 2023, H&E has opened 14 new branches across the country, with four of those in the Lone Star State. The facility is located at 530 Frazier Commerce Drive, Conroe, TX 77303-5380, phone 936-286-3900. It includes a fully fenced yard area, offices, and a repair shop and carries a variety of construction and general industrial equipment. “The location of our Conroe branch gives H&E total coverage of the Houston area, especially the growing market north of the Woodlands. The new facility covers the territory between our Houston, Katy, and Bryan branches, so customers in outlying areas have more convenient service” says Branch Manager Tesha McGruder. “Our close proximity to I-45, state highways 105 and 75, and other major roadways is ideal for getting our new fleet to job sites quickly.” The Conroe branch specializes in the rental of aerial lifts, earthmoving equipment, telescopic forklifts, compaction equipment, generators, light towers, compressors, and more and represents the following manufacturers: Allmand, Atlas Copco, Bomag, Case, Club Car, Cushman, Doosan, Gehl, Generac Mobile, Genie, Hamm, Hilti, Husqvarna, JCB, JLG, John Deere, Kobelco, Kubota, LayMor, Ledwell, Lincoln Electric, Link-Belt Excavators, MEC, Miller, Multiquip, Polaris, Sany, Skyjack, SkyTrak, Sullair, Sullivan-Palatek, Tag, Towmaster, Unicarriers, Wacker Neuson, Yanmar, and others.
H&E opens new branch in Texarkana, Texas
Effective November 6, 2023, H&E Equipment Services Inc. (H&E) announces the opening of its Texarkana branch. The location on the Texas-Arkansas line makes it the company’s 24th rental location in the state of Texas, but it is the third branch to serve the Arkansas market, primarily in the southwestern area of the state. So far this year, H&E has opened 13 new branches across the country. The facility is located at 4300 Gazola Street, Texarkana, TX 75501-7136, phone 430-455-4000. It includes a fully fenced yard area, offices, and a repair shop and carries a variety of construction and general industrial equipment. “H&E has extended its coverage across the Texas-Arkansas state line to easily reach any project between our existing Longview, Shreveport, El Dorado, and Little Rock branches. We’ve added greater fleet availability to the area, and the location of our new facility allows quick access to I-30, I-49, and state highways that branch off in all directions, so delivery of rental equipment to job sites is timely and efficient,” says Branch Manager Hunter Hatfield. “I’ve worked from our Dallas branch for many years, so I’ve hit the ground running and can help customers secure the right equipment for their projects from this new location.” The Texarkana branch specializes in the rental of aerial lifts, earthmoving equipment, telescopic forklifts, compaction equipment, generators, light towers, compressors, and more and represents the following manufacturers: Allmand, Atlas Copco, Bomag, Case, Club Car, Cushman, Doosan, Gehl, Generac Mobile, Genie, Hamm, Hilti, Husqvarna, JCB, JLG, John Deere, Kobelco, Kubota, LayMor, Ledwell, Lincoln Electric, Link-Belt Excavators, MEC, Miller, Multiquip, Polaris, Sany, Skyjack, SkyTrak, Sullair, Sullivan-Palatek, Tag, Towmaster, Unicarriers, Wacker Neuson, Yanmar, and others.
Know your Key Performance Indicators in rental management
As the calendar turns to November, it’s hard to believe that it’s been over a year now since becoming a regular contributor in this Aftermarket column. In last month’s edition, I wrote about the topic of relational capital; the intangible asset that encompasses the network of relationships you build with your customers, partners, and employees. My personal relational capital has allowed me to regularly get inspiration for content to contribute to this monthly column. So, with that, this month’s inspiration came from my attendance at the recent MHEDA Rental and Used Equipment Management Conference in Chicago. The goal of the conference was not only to enhance rental and used equipment management skills, but also to increase the profitability of said departments. A common topic shared after speaker presentations and during round-table discussions was the topic of having dedicated technicians for your rental equipment. Let us further explore this topic. Many dealerships I visit tend to have a dedicated rental equipment department. The rental department managers are responsible for making the service and parts decisions for the equipment within. Many of the rental management professionals I spoke to at this conference shared the same sentiment: When it comes to managing a rental fleet, where efficiency and reliability are paramount, the role of dedicated technicians cannot be overstated. Whether your dealership rents forklifts, construction equipment, or any other type of machinery, having a team of specialists solely focused on maintaining and servicing your rental fleet can be a game-changer. Three important rental management KPIs that are related to aftermarket parts and service include: Maintenance Costs: Monitoring the expenses related to maintaining your rental fleet. Costs include technician labor, spare parts, as well as any other 3rd party maintenance costs. Regular maintenance can extend the lifespan of your equipment and reduce long-term costs. Employee Productivity: It is important to regularly measure the productivity of your staff involved in the rental process, including sales, customer service, maintenance and logistics. Downtime: Monitoring the amount of time your rental equipment is out of service due to maintenance, repairs, waiting on spare parts, and other reasons. Reducing downtime is crucial for maximizing profitability. These three KPIs (Key Performance Indicator) are why it’s recommended to have dedicated technicians servicing your rental equipment. Dedicated technicians are the heart and soul of your rental fleet maintenance. They are the ones who will know the intricacies of your equipment. By specializing in the specific make and model of forklifts or any machinery within your fleet. They can develop an intimate familiarity that extends far beyond the operator’s manual. Their expertise enables them to swiftly diagnose issues, execute efficient repairs, and minimize downtime. These specialists are the guardians of your machinery, ensuring it operates at peak performance. Consistency is a cornerstone of dedicated technician teams. With a singular focus on your rental fleet, they adhere to a standardized maintenance and inspection regimen. Every forklift, aerial work platform, or other machine receives the same meticulous care, enhancing reliability, safety, and unwavering quality assurance. Technician efficiency is a precious commodity. With dedicated technicians, you gain an edge in efficiency. These specialists are not distracted by the demands of everyday service calls with a wide array of customer owned equipment. Their undivided attention translates into quicker turnaround times for maintenance and repairs, ultimately benefiting your bottom line. Preventive maintenance is the key to cost savings and a well-run rental fleet. Dedicated technicians excel at identifying and rectifying issues before they escalate into costly problems. By proactively addressing maintenance needs, they keep downtime to a minimum and ensure that the machines in your fleet remain reliable money-making machines. Dedicated technicians create accountability and clear lines of responsibility. With a specialized team in place, it’s easier to pinpoint who is responsible for the condition of each machine. This accountability fosters a culture of excellence and ensures that your forklifts or other equipment are consistently kept in optimal working condition. These dedicated technicians also maintain meticulous records of all maintenance and repair activities for each piece of equipment in your rental fleet. This documentation is invaluable for tracking the history of each machine, adhering to maintenance schedules, and ensuring compliance with safety regulations. Dedicated technicians are the driving force behind your rental fleet’s success. Their expertise, consistency, and commitment to excellence ensure the continued reliability of your equipment and elevate your service quality. In the competitive landscape of equipment rentals, dedicated technicians are a strategic investment that propels your business towards operational excellence and customer satisfaction. By having a team of dedicated technicians responsible for servicing your rental fleet, you not only ensure the well-being of your equipment but also elevate the overall quality of service you provide to your valued customers. In the competitive world of equipment rentals, dedicated technicians are an investment that pays dividends in operational excellence. Downtime is lost time. So, look to employ dedicated technicians for your rental equipment to ensure operational efficiency, profitability, and customer satisfaction. The presence of dedicated technicians instills a sense of accountability and excellence in the management of your rental fleet, making them an indispensable asset for success. About the Author: Chris Aiello is the Business Development Manager at TVH Parts Co. He has been in the equipment business for 16-plus years as a service manager, quality assurance manager, and business development manager. Chris now manages a national outside sales team selling replacement parts and accessories in various equipment markets such as material handling, equipment rental, and construction/earthmoving dealerships.
H&E relocates branch in Pompano Beach Florida
Effective October 18, 2023, H&E Equipment Services Inc. (H&E) has announced the relocation of its Pompano Beach, FL, branch. The facility is now located at 1660 N. Powerline Road, Pompano Beach, FL 33069-1623, phone 954-781-3099. The newly renovated property includes a fully fenced yard area, offices, and a separate repair shop and carries a variety of construction and general industrial equipment. “Our Pompano Beach location is just 2.6 miles northwest of our previous address. The newly renovated facility provides a comfortable environment, has a larger, more efficient yard to hold a variety of fleet, and maintains direct access to I-95 to move equipment quickly,” says Branch Manager Anthony Wallace. “And with our Hollywood branch just 17 miles south, we can work together to quickly locate available equipment and provide faster response time to job sites throughout South Florida.” The Pompano Beach branch specializes in the rental of aerial lifts, earthmoving equipment, telescopic forklifts, compaction equipment, generators, light towers, compressors, and more and represents the following manufacturers: Allmand, Atlas Copco, Bomag, Case, Club Car, Cushman, Doosan, Gehl, Generac Mobile, Genie, Hamm, Hilti, Husqvarna, JCB, JLG, John Deere, Kobelco, Kubota, LayMor, Ledwell, Lincoln Electric, Link-Belt Excavators, MEC, Miller, Multiquip, Polaris, Sany, Skyjack, SkyTrak, Sullair, Sullivan-Palatek, Tag, Towmaster, Unicarriers, Wacker Neuson, Yanmar, and others.
The ARA Show 2024 returns to The Big Easy in February
The ARA Show™ returns to The Big Easy when the world’s largest equipment and event rental trade show makes its way to the Ernest N. Morial Convention Center in New Orleans, Louisiana, February 18 – 21, 2024. The American Rental Association’s (ARA) annual trade show is a can’t-miss event with nearly 40 hours of education and more than 19 hours of trade show excitement over three days with more than 630 exhibitors. Registration for The ARA Show 2024 opens Tuesday, October 17. Both current and prospective ARA members can take advantage of incentive pricing through October 31, and advance pricing through February 15. “We are thrilled to bring The ARA Show 2024 back to New Orleans for an engaging, insightful and fun week for our members. Last year’s show set the bar high and we’re excited to carry that momentum forward with a mix of educational programs, professional networking and our popular social gatherings throughout the week,” says Tony Conant, ARA CEO. The excitement begins on Saturday, February 17, with the return of EventsU. Designed specifically for event rental professionals, the one-day program gives attendees an opportunity to hear from industry leaders on topics including event rental safety, tenting and the latest trends, plus exclusive networking with their event rental industry peers. The ARA Show 2024 officially kicks off with a full day of education sessions on Sunday, February 18. An unmatched array of exceptional sessions will feature professional speakers, industry experts and rental peers. Content on a variety of relevant and timely topics will be offered that appeals to rental professionals at every level. The keynote address — sponsored by ARA Insurance — will be delivered by John Taffer on Monday, February 19. Host and executive producer of Paramount Network’s “Bar Rescue,” Taffer relies on four decades of hospitality, entertainment and nightlife industry experience to advise companies on resetting their business models to ensure future success. Taffer is the best-selling author of three books, in addition to being featured in Forbes Magazine, Rolling Stone and the New York Times. As part of his keynote presentation, Taffer will share the business management expertise he has offered to thousands of businesses and Fortune 500 companies. Immediately following Taffer’s keynote session, the trade show floor will open for two and a half days of product introductions, the latest innovations and Show-Only Specials that allow attendees to fit more equipment and services into their budgets with exclusive deals. “There is a lot of excitement about The ARA Show 2024 being back in New Orleans and that is evident with more than 630 exhibitors confirmed and limited booth space remaining,” says Christine Hammes, ARA Vice President Association Services/Events. “That presents a great opportunity for our members and prospective members to prepare for a successful year ahead by bringing together the education, products and services tailored to their business needs.” Other featured networking events during The ARA Show 2024 include the ARA Young Professionals Network Reception, ARA’s Industry Awards Lunch, Regional Receptions, Women in Rental Breakfast, ARA’s Tuesday Night Event at House of Blues New Orleans featuring Mitchell Tenpenny and more. Advanced registration and ticket requirements may apply. The ARA Show 2024 registration opens Tuesday, October 17. For complete show details, including registration and pricing information, visit ARAshow.org.
H&E opens new branch in Daytona Beach Florida
Effective October 4, 2023, H&E Equipment Services Inc. (H&E) announces the opening of its Daytona Beach branch, its 13th rental location in the state of Florida. Since the beginning of the second quarter of 2023, H&E has opened 12 new branches across the country, and this is the fifth new location in the Sunshine State since the second half of 2022. The facility is located at 998 Bellevue Avenue, Daytona Beach, FL 32114-5162, phone 386-368-7301. It includes a fully fenced yard area, offices, and a repair shop and carries a variety of construction and general industrial equipment. “The location of our Daytona Beach branch gives H&E total coverage of the Atlantic Coast and Central Florida. The new facility is located between H&E’s Jacksonville and Palm Bay branches, and our Orlando and Ocala locations are even closer, so we can source equipment and reach any job site across the area with ease,” says Branch Manager Stefan Garza. “Our proximity to I-95, I-4, U.S. 1, and A1A is ideal for getting our new fleet to job sites.” The Daytona Beach branch specializes in the rental of aerial lifts, earthmoving equipment, telescopic forklifts, compaction equipment, generators, light towers, compressors, and more and represents the following manufacturers: Allmand, Atlas Copco, Bomag, Case, Club Car, Cushman, Doosan, Gehl, Generac Mobile, Genie, Hamm, Hilti, Husqvarna, JCB, JLG, John Deere, Kobelco, Kubota, LayMor, Ledwell, Lincoln Electric, Link-Belt Excavators, MEC, Miller, Multiquip, Polaris, Sany, Skyjack, SkyTrak, Sullair, Sullivan-Palatek, Tag, Towmaster, Unicarriers, Wacker Neuson, Yanmar, and others.
The ARA Foundation and Toro partner to build sensory riding path for therapeutic equestrian center
The American Rental Association (ARA) Foundation, in partnership with The Toro Company Foundation, completed a community impact project in Langley, British Columbia, Canada to benefit Pacific Riding for Developing Abilities (PRDA). PRDA is a not-for-profit, therapeutic equestrian riding center dedicated to enhancing the quality of life for individuals with a wide range of abilities. On September 6 and September 7, volunteers from all three organizations worked together to improve two indoor riding arenas, create a sensory riding path — a key new component to the therapy program, and trench in the paddock area to provide an electrical conduit so the electrical cords are underground, improving safety for staff and volunteers. “It was wonderful to see rental members donating equipment and their time to improve the facilities at PRDA. Each project had a significant impact on enhancing the quality of the experience for the individuals served and gave ARA members networking opportunities and a chance to gain new skills while giving back to the community,” said Judson McNeil, ARA Foundation director of programs and fundraising. To complete the work at PRDA, more than 30 volunteers from ARA, The Toro Company Foundation and PRDA staff moved 1,800 pounds of arena footing material and resurfaced the two riding areas, over a two-day period. Others painted the extensive baseboards and created the sensory path. All projects required the use of different equipment provided by local rental stores. “We are beyond grateful for the generous support from ARA and The Toro Company Foundation for the significant impact they have made in support of PRDA riders,” said Erin Julihn, PRDA director of operations. “Each of the completed projects significantly supports the therapeutic riding experience of PRDA riders, empowering the PRDA staff and volunteers to best serve each one’s individual needs.” The PRDA project is the second Community Impact project the ARA Foundation has completed in partnership with The Toro Company Foundation in 2023. The next project is planned for September 27 in Bigfork, Montana.
United Rentals announces departure of Dale Asplund, EVP & Chief Operating Officer
Michael Durand, SVP of Sales & Operations promoted to EVP & Chief Operating Officer United Rentals, Inc. has announced that Dale Asplund, executive vice president and chief operating officer, will be leaving the company on September 29, 2023, to take the role of president and chief executive officer at another public company outside of the equipment rental industry. Mr. Asplund joined United Rentals in 1998, and was named chief operating officer in 2019. He will remain in an active role with United Rentals through September 29 to ensure a smooth transition to Michael Durand, who is being promoted to chief operating officer. Mr. Durand joined United Rentals in 2002 as a branch manager and has held roles of increasing scope through the present day, including district manager, region vice president, and his current role of senior vice president of sales and operations. Mr. Durand has been an integral leader across all aspects of sales and operations at United Rentals, including the company’s go-to-market strategy, large acquisition integrations, operations strategy, and operational excellence. He has built strong and enduring relationships within United Rentals and its customer base over his more than two decade career, making him the ideal choice to follow Mr. Asplund as chief operating officer. Matthew Flannery, chief executive officer of United Rentals, said, “We expect this to be a seamless transition between two seasoned leaders who have worked closely together for many years. Mike is a proven leader whose numerous contributions have delivered strong results across the company. I’m confident that his operational expertise and demonstrated ability to lead our business will play a key role in our continued focus to drive profitable growth and generate shareholder value.” Flannery continued, “We deeply appreciate Dale’s truly extraordinary contributions to making United Rentals the company it is today. On a personal note, I want to thank Dale for his incredible partnership, leadership, and commitment to our employees and shareholders. We wish him the very best as he assumes a new career opportunity.”
H&E opens new brnach in Wichita KS
H&E Equipment Services Inc. hasannounced the opening of its Wichita branch, its first rental location in the state of Kansas. Since the beginning of the second quarter of 2023, H&E has opened 11 new branches across the country. The company now serves 30 states. The facility is located at 3540 S Hoover Road, Wichita, KS 67215-1213, phone 316-869-0100. It includes a large yard area, offices, and a repair shop and carries a variety of construction and general industrial equipment. “Our new Wichita branch is centrally located to reach both the large metropolitan market and also surrounding areas beyond. We already have established branches in Kansas City, Oklahoma City, and Tulsa, so this new location bridges the geographic gap between them and brings additional fleet and resources to customers in the region. Our proximity to I-35 and many feeder highways allows us quick delivery times and responsiveness,” says Branch Manager Cody Richardson. “I’m a Wichita native and started in the equipment business here 20 years ago. I know the area and am excited to introduce H&E to my state.” The Wichita branch specializes in the rental of aerial lifts, earthmoving equipment, telescopic forklifts, compaction equipment, generators, light towers, compressors, and more and represents the following manufacturers: Allmand, Atlas Copco, Bomag, Case, Club Car, Cushman, Doosan, Gehl, Generac Mobile, Genie, Hamm, Hilti, Husqvarna, JCB, JLG, John Deere, Kobelco, Kubota, LayMor, Ledwell, Lincoln Electric, Link-Belt Excavators, MEC, Miller, Multiquip, Polaris, Sany, Skyjack, SkyTrak, Sullair, Sullivan-Palatek, Tag, Towmaster, Unicarriers, Wacker Neuson, Yanmar, and others.
H&E open new branch in Columbia MO
Effective September 5, 2023, H&E Equipment Services Inc. (H&E) announces the opening of its Columbia branch, its third rental location covering the state of Missouri. Since the beginning of the second quarter of 2023, H&E has opened 10 new branches across the country. The facility is located at 5611 Brown Station Road, Columbia, MO 65202-2779, phone 573 615-7101. It includes a large equipment yard, offices, and a repair shop and carries a variety of construction and general industrial equipment. “We expanded into the Midwest just two years ago, and our acquisition of One Source Equipment Rentals last October instantly increased our footprint in the region. We’re maintaining the traction with this new branch in Missouri, which is situated centrally to serve Columbia and the entire state – north to Iowa, south to Arkansas, and areas between our existing locations in the Kansas City and St. Louis markets,” says Branch Manager Robert Kerbo. “We’re continuing to add fleet and efficiencies in the region, and being located close to I-70 and Hwy. 63 means we can source equipment for our customers from nearby branches if needed and move it to their job site quickly and efficiently.” The Columbia branch specializes in the rental of aerial lifts, earthmoving equipment, telescopic forklifts, compaction equipment, generators, light towers, compressors, and more and represents the following manufacturers: Allmand, Atlas Copco, Bomag, Case, Club Car, Cushman, Doosan, Gehl, Generac Mobile, Genie, Hamm, Hilti, Husqvarna, JCB, JLG, John Deere, Kobelco, Kubota, LayMor, Ledwell, Lincoln Electric, Link-Belt Excavators, MEC, Miller, Multiquip, Polaris, Sany, Skyjack, SkyTrak, Sullair, Sullivan-Palatek, Tag, Towmaster, Unicarriers, Wacker Neuson, Yanmar, and others.
H&E opens new branch in Wilmington
Effective August 30, 2023, H&E Equipment Services Inc. (H&E) announced the opening of its Wilmington branch, its 10th rental location in the state of North Carolina. Since the beginning of 2023, H&E has opened nine new branches across the country, with three of those in the Tar Heel State. The facility is located across from the Port of Wilmington at 851 Sunnyvale Drive, Wilmington, NC 28412-1151, phone 910 756-4100. It includes a fully fenced yard area, offices, and a repair shop and carries a variety of construction and general industrial equipment. “The location of our newest North Carolina branch gives us greater reach along the Atlantic coastline, both north and into South Carolina, and covers the southeastern portion of the state below our existing Raleigh facility. Adding more fleet in this area allows us to supply customers in Wilmington and up to Elizabethtown, Lumberton, and New Bern, to name just a few cities well within our service area,” says District Manager Justin Gnagy. “Our proximity to I-40 and highways 17, 74, and 421 is ideal and allows us to deliver equipment to job sites across the area quickly and efficiently.” The Wilmington branch specializes in the rental of aerial lifts, earthmoving equipment, telescopic forklifts, compaction equipment, generators, light towers, compressors, and more and represents the following manufacturers: Allmand, Atlas Copco, Bomag, Case, Club Car, Cushman, Doosan, Gehl, Generac Mobile, Genie, Hamm, Hilti, Husqvarna, JCB, JLG, John Deere, Kobelco, Kubota, LayMor, Ledwell, Lincoln Electric, Link-Belt Excavators, MEC, Miller, Multiquip, Polaris, Sany, Skyjack, SkyTrak, Sullair, Sullivan-Palatek, Tag, Towmaster, Unicarriers, Wacker Neuson, Yanmar, and others.
Buy-Lease-Rent Financing status: You better sit down for this
At this time in our economic lives this topic has a lot of pros and cons to consider before deciding what dealers need to do, what customers want to do and how dealers need to assist customers meet their goals using proper financial options. When we consider the three variables involved (buy-rent-lease)…. the pandemic equipment pricing for both new and used equipment…..interest rates along with new bank loan agreements and covenants……the inability of customers to handle the monthly nut now required if a unit is purchased or part of a long-term rental program. And then there is the collateral risk associated with lease residuals as well as book values four or five years out where the book value or residual will not even be close to reasonable once the new and used markets get back to a “normal” status where new unit pricing has decreased and there is adequate supply of used units available causing used sales to return to a “normal” as some percentage of recent new unit cost. Let’s face it folks, someone must pay for these crazy new and used costs and still make a buck doing it. Check out the auto industry to see how this is working out for them. There are dealers taking new and used cars to auction to try to get rid of them, and they are not hitting the reserves to make a deal. Banks are doing the same thing with repos. What I saw today watching CNBC is that CarMax is doing better because the glut of used cars for sale is causing pricing to soften to the point where they are improving their bottom line. The commentator also noted that more car customers are keeping their rides longer and buying used cars because they cannot afford a new one. If this same scenario repeats itself for other types of financial assets, the players will wind up in the same situation be that an OEM, Dealer, Customer or Bank. And if you think this situation is going away any time soon, think again. The supply and demand situation may continue to lower the cost to build new units, but it may be accompanied by a recession as well as continued high interest rates. In other words, this scenario of tighter money with less financing availability will take years to play out a delay out causing the value of used units (including rental units) to decrease to where you are upside down on the residual and/or book value which converts to taking losses on units purchased at pandemic rates. Is there money available for purchasing or leasing a unit. Yes, there is, but at a cost customers may not want to deal with. Interest rates could be somewhere between 8-13% depending on the FICO score, years in business and the ability to establish that you are running a profitable business. To give you some perspective on this issue I found in the June 17th issue of John Mauldin’s THOUGHTS FROM THE FRONT LINE, specifically a comment by Peter Boockvar which is as follows: “The credit crunch is here, and this will take not quarters, but years to play out if the cost of capital remains high. Understand too that many small and medium businesses have to pay an interest rate on a loan that is above 10% if they can even get one. Things in the private economy worked ok at 3-4% interest rates, not so much at 10% as were on a whole new economic playing field that I don’t think is being fully appreciated.” To which John Mauldin added. “Read that quote two or three times. An entire generation of investors and business leaders has never known a capital-constrained economy. Can they adjust? Probably, but not easily or instantly.” Let’s assume that I am one of those younger folks going through this type of economy for the first time. I have a company to run and need to have my material handling equipment operating properly to keep my efficiency levels where they need to be generating a proper Gross Profit that converts to budgeted profit and cash flow. Keeping that GP % means keeping costs where they are at because I don’t have the ability to pass on cost increases to my customers. Let’s further assume that I stay up to date on economic matters and thus expect higher costs for materials, services and especially equipment, which are big ticket items. What will my thought process be under these circumstances? Do I need new units? Can I find a used unit if I need it? Do I have anything to trade-in at these aggressive values? What will it cost to finance a new or used unit? Can I afford it? Wonder what it would cost to refurb the units I have? Maybe I should lease them? But if I am leasing new units won’t the lease cost also rise due to the cost of the units? I wonder if I can get the OEM or Dealer to buy down the interest rate. Would an RPO work for me in this situation? Can I gain enough newfound efficiency to cover the higher cost of the units? I do not want to get stuck with a residual value or book value I can’t recover. How do I avoid this? Can I just do a rent-to-rent deal for the months in the year when I need more units? How will a purchase impact my loan covenants? For that matter how will a lease impact my loan covenants? Being that I have worked primarily in two equipment industries …. material handling and construction equipment, I am comfortable calculating what a rental rate should be to cover the cost with a “standard” level of usage over a five-year period, and what to expect the residual value to be assuming proper maintenance has been incurred. Having this knowledge would also cover budgeting for the purchase of new or