Q4 2025 McGrath RentCorp Earnings Call

February 25, 2026

Fourth quarter 2025 earnings call.

At this time all conference participants are in a listen only mode.

Later, we will conduct a question and answer session.

At that time, if you have a question you will need to press the star key followed by the one key on your telephone.

This conference call is being recorded today Wednesday February 22026.

Before we begin note that the matters the company management will be discussing today.

And are not statements of historical facts or forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095, including statements relating to the company's expectations strategies prospects backlog or targets.

These forward looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected.

Important factors that could cause actual results to differ materially from the company's expectations are disclosed under risk factors in the company's Form 10-K, and other SEC filings.

Forward looking statements are made only as of the date hereof.

Sept as otherwise required by law, we assume no obligation to update any forward looking statements.

In addition to the press release issued today. The company also filed with the SEC earnings release form on form 8-K, and its Form 10-K, and the year ended December 31 2025.

Speaking today will be Joe Hanna Chief Executive Officer.

Phil Hawkins Chief operating officer.

Keith Pratt Chief Financial Officer.

I will now turn the call over to Mr. Hanna go ahead Sir.

Thank you Stephanie and good afternoon, everyone. We appreciate you joining us for Mcgrath, Brian Corp's fourth quarter and full year of 2025 earnings call.

This is a particularly meaningful call for me personally.

My final earnings call as CEO of Mcgrath as many of you saw in our February press release, I will retire as CEO effective April 3rd remain a director on the Mcgrath Board.

I want to start by expressing my deep gratitude to our customers our team members our board and our shareholders.

It's been an honor to lead this organization.

I'm very proud of our company culture, a reputation with customers and the growth we have realized over the past nine years.

Our board invested considerable time developing a thoughtful CEO succession plan and is confident that Phil Hawkins as the best leader to succeed me given this industry stature and experience at Mcgrath since 2004.

Mostly most recently as chief operating officer.

Bill is a seasoned industry professional with embodies the core values of our company and his experience will enable him to continue the execution of the company's strategy and maintained its positive growth trajectory.

I've had the pleasure of working with Bill for over 20 years, and I could not be happier will succeed me as CEO.

For today's call I will cover our fourth quarter and full year 2025 results. Bill will then provide comments on our business outlook and plans for 2026, Keith will share the financial details, including our financial outlook for 2026, and then we will open the call for questions.

I should also highlight that our board of directors today announced our company's quarterly cash dividend for the quarter ending March 31, 2026. This will mean Mcgrath <unk>.

Fifth consecutive annual dividend increase.

Now for the fourth quarter 2025, total company revenues rose, 5% driven by rental operations revenue growth across all three of our rental businesses.

Adjusted EBITDA increased 14% from a year ago.

I am pleased with this performance, which was driven by strong results at mobile modular and Trs <unk> telco.

Across the company, our rental businesses performed well in a mixed demand environment at mobile modular activity was steady.

Portable storage showed continued stabilization and Trs maintained the healthy momentum we saw throughout the year.

Looking first at our mobile modular business rental revenues increased 2%.

Our mobile modular plus offerings and our geographic expansion efforts gave us opportunities to grow in a slow nonresidential construction market.

We continue to benefit from the shift in demand towards Mega projects.

Helped to offset lower demand across other nonresidential construction categories.

Sales of new modular units were down in the fourth quarter and for the full year as a challenging nonresidential construction market presented fewer opportunities.

In contrast, our <unk> business had a very strong fourth quarter and full year with healthy education demand growing revenues with high gross margins.

Turning to portable storage, we continue to realize gradual top line improvement while broader commercial construction remained soft we benefited from seasonal retail business and geographic expansion.

Progress in.

In the quarter rental revenues increased 3% year over year.

Finally, Trs <unk> telco rental revenue grew by an impressive 13% in the fourth quarter. This business completed a notable year of recovery ending with sustained utilization in the low to mid sixties and healthy demand across both general purpose and communications segments.

Joe Hanna: revenues with high gross margins. Turning to Portable Storage, we continue to realize gradual top-line improvement. While broader commercial construction remains soft, we benefited from seasonal retail business and geographic expansion progress. In Q4, rental revenues increased 3% year-over-year. Finally, TRS-RenTelco. Rental revenue grew by an impressive 13% in Q4. This business completed a notable year of recovery, ending with sustained utilization in the low to mid-sixties and healthy demand across both general purpose and communication segments. As I reflect on 2025, our company had a strong Q4, which played an important role in delivering a solid full year result in a mixed environment.

Yes.

As I reflect on 2025, our company had a strong fourth quarter, which played an important role in delivering a solid full year result in a mixed environment.

Over the course of 2025 weakness in nonresidential construction created headwinds for the company, but our strategic initiatives made a positive contribution and helped offset those pressures as well as the performance at Trs and <unk>, which bolstered our overall results.

While broader commercial construction remains soft. We benefited from seasonal retail business and Geographic expansion Pro progress in the quarter rental revenues, increased 3% year-over-year,

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I want to thank each of our team members for your accomplishments and steadfast commitment to delivering the highest quality service to our customers.

To rental Revenue, grew by an impressive, 13% in the fourth quarter, this business completed, a notable year of recovery ending with sustained utilization in the low to mid-60s and healthy demand across both general purpose and communication segments.

Our culture at Mcgrath is a driving force behind our growth and it shines through in every customer interaction.

Joe Hanna: Over the course of 2025, weakness in non-residential construction created headwinds for the company. Our strategic initiatives made a positive contribution and helped offset those pressures, as well as the performance at TRS and Enviroplex, which bolstered our overall results. I want to thank each of our team members for your accomplishments and steadfast commitment to delivering the highest quality service to our customers. Our culture at McGrath is a driving force behind our growth, and it shines through in every customer interaction. Phil, over to you to comment on our business outlook and our 2026 plans.

As I reflect on 2025, our company has a strong fourth quarter, which played an important role in delivering, a solid full year result in a mixed environment.

Phil over to you to comment on our business outlook and our 2026 plants.

Thank you Joe and good afternoon, everyone I appreciate the opportunity to join the call today and to share more perspective on the business.

I'd like to start by saying Mcgrath has been my home for more than 20 years.

Over the course of 2025 weakness in non-residential construction created headwinds for the company. But our strategic initiatives, made a positive contribution and helped offset those pressures as well as the performance at TRS and enviroplex, which bolstered our overall results.

I have the opportunity to work across nearly every part of the organization.

I work closely with both Joe and key with a shared focus on disciplined execution and building long term shareholder value.

I want to thank each of our team members for your accomplishments and steadfast commitment to delivering the highest quality service to our customers.

Joe leaves behind an impressive legacy of leadership and service commitment is thoroughly ingrained throughout our company it.

Our culture and progress are a driving force behind our growth, and it shines through in every customer interaction.

Phil Hawkins: Thank you, Joe. Good afternoon, everyone. I appreciate the opportunity to join the call today and to share more perspective on the business. I'd like to start by saying McGrath has been my home for more than 20 years, and I've had the opportunity to work across nearly every part of the organization. I've worked closely with both Joe and Keith, with a shared focus on disciplined execution and building long-term shareholder value. Joe leaves behind an impressive legacy of leadership and service commitment that he is thoroughly ingrained throughout our company. It is a great honor to succeed Joe as CEO and to continue leading our capable team. As CEO, I look forward to building upon that foundation, continuing to strengthen our market positions, and leading McGrath to capture long-term opportunities that lie ahead of us while delivering value for our shareholders.

It is a great honor to succeed Joe CEO and to continue leading our capable team.

Phil over to you to comment on our business Outlook and our 2026 plans.

As CEO I look forward to building upon that foundation.

Thank you, Joe and good afternoon everyone. I appreciate the opportunity to join the call today and to share more perspective on the business.

<unk> to strengthen our market positions and leading Mcgrath to capture long term opportunities that lie ahead of us while delivering value for our shareholders.

I'd like to start by saying McGrath has been my home for more than 20 years and I've had the opportunity to work across nearly every part of the organization.

Now, let's look at the year end.

The key drivers of our performance in 2026 will be continued progress from our modular growth initiatives and building on the market recovery at Trs.

I work closely with both Joe and Keith with the short focus on disciplined execution and building long-term shareholder value.

I will discuss this further after I outlined the overall demand environment for our businesses.

Jolie's behind an impressive Legacy of leadership in service commitment that he is Thoroughly ingrained throughout our company.

In the modular business uncertain market conditions persist.

It is a great honor to succeed, Joe a CEO and to continue leading our capable team.

Nonresidential construction indicators, such as the architectural billings index or Abi remained soft.

While we do not expect meaningful improvement in the environment. This year, we have proven our ability to grow with these conditions.

As CEO. I look forward to building upon that Foundation continuing to strengthen our Market positions and leading McGrath to capture long-term opportunities that

Ahead of us.

Phil Hawkins: Let's look at the year ahead. The key drivers for our performance in 2026 will be continued progress from our modular growth initiatives and building on the market recovery at TRS. I'll discuss those further after I outline the overall demand environment for our businesses. In the modular business, uncertain market conditions persist. Non-residential construction indicators, such as the Architecture Billings Index, or ABI, remain soft. While we do not expect meaningful improvement in the environment this year, we have proven our ability to grow in these conditions. At Mobile Modular, we started 2026 with lower utilization, but with some solid momentum, driven by the ongoing success of our services and geographic expansion initiatives. In our commercial business, mega projects, such as large industrial projects, data centers, and government work, remain active.

While delivering value for our shareholders.

Now, let's look at the year ahead.

At mobile modular we started 2026 with lower utilization.

Some solid momentum driven by the ongoing success of our services.

The key drivers of our performance in 2026 will be continued progress from our modular growth initiatives.

and building on the market recovery at TRS,

And geographic expansion initiatives.

In our commercial business Mega projects, such as large industrial projects Datacenters and government work remain active.

I'll discuss those further after I outline the overall demand environment for our businesses.

in the modulars business uncertain market conditions, persist

Our fleet size and modification capabilities provide a competitive advantage in these opportunities and these strengths are helping our pipeline and bookings.

Non-residential construction indicators, such as the architectural Billings index or ABI remains soft.

In education, we expect a stable market this year.

What we do not expect, meaningful Improvement in the environment this year. We have proven our ability to grow in these conditions.

Overall, our education markets and modernization backlogs are healthy.

The modular business remains our largest long term growth opportunity.

At mobile modular, we started 2026 with lower utilization, but with some solid momentum driven by the ongoing success of our services and Geographic expansion initiatives.

Turning to portable storage, we remain hopeful that the market demand has stabilized.

While industry utilization remains low our order activity has shown some positive momentum.

Phil Hawkins: Our fleet size and modification capabilities provide a competitive advantage in these opportunities, and these strengths are helping our pipeline and bookings. In education, we expect a stable market this year. Overall, our education markets and modernization backlogs are healthy. The modular business remains our largest long-term growth opportunity. Turning to Portable Storage, we remain hopeful that the market demand has stabilized. While industry utilization remains low, our order activity has shown some positive momentum, and we are starting 2026 with a slightly higher rental revenue run rate than at the beginning of 2025. At the same time, profitability remains a key challenge in this highly competitive market. We are laser-focused on improving sales effectiveness to get more units out on rent while protecting margin.

In our commercial business, mega projects such as large industrial projects, data centers, and government work remain active.

Our Fleet size and modification capabilities.

And we are starting 2026 slightly higher rental revenue run rate and at the beginning of 2025.

Provide a competitive advantage in these opportunities and these strengths are helping our Pipeline and bookings.

At the same time profitability remains a key challenge in this highly competitive market.

We are laser focused on improving sales effectiveness to get more units out on rent while protecting margin.

In education, we expect a stable Market this year overall, our education markets and modernization backlogs are healthy.

We will continue to invest in growing our presence in existing markets expanding into new locations aligned with demand and pursuing tuck in acquisitions that support our growth.

The modular business remains our largest long-term growth opportunity.

Turning Affordable Storage. We remain hopeful that the market demand is stabilized.

Prs is entering 2026 with good momentum we.

While industry utilization remains low, our order activity is shown some positive momentum.

We see continued strength in aerospace and defense data centers and semiconductor segments.

and we are starting 2026 with the slightly higher rental Revenue, run rate and at the beginning of 2025

Our 2026 performance will be accomplished through a strong leadership team with deep technical expertise.

And the ability to deploy capital effectively.

Phil Hawkins: We will continue to invest in growing our presence in existing markets, expanding into new locations aligned with demand, and pursuing tuck-in acquisitions that support our growth. TRS is entering 2026 with good momentum. We see continued strength in aerospace and defense, data centers, and semiconductor segments. Our 2026 performance will be accomplished through a strong leadership team with deep technical expertise and the ability to deploy capital effectively. In summary, across McGrath, we are entering 2026 in a healthy position. We are confident that our strategy is sound, and we have the right team to execute. With that, I will turn the call over to Keith, who will take you through the financial details for the Q and our outlook for 2026.

At the same time, profitability remains a key challenge in this highly competitive market. We are laser focused on improving sales Effectiveness to get more units out on rent. While protecting margin

In summary across the graph we are entering 2026.

The position.

We are confident.

Strategy is sound and we have the right team to execute.

That support our growth.

With that I will turn the call over to Keith who will take you through the financial details of our quarter and our outlook for 2026.

PRS is entering 2026 with good momentum.

Thank you Phil and good afternoon, everyone.

We see continued strength in aerospace and defense, data centers, and semiconductor segments.

Before I give the financial details and the outlook for 2026 I want to recognize Joe for his leadership and many years of service to Mcgrath.

Our 2026 performance will be accomplished through a strong leadership team with deep technical expertise and the ability to deploy capital effectively.

Joe has played a critical role in shaping the company's strategy.

In summary across the graph, we are entering 2026 in a healthy position.

Driving results.

<unk> the business for long term success.

We are confident that our strategy is sound and we have the right team to execute.

I also wanted to congratulate Phil on his well deserved appointment to CEO.

And I have worked closely together.

Keith Pratt: Thank you, Phil, and good afternoon, everyone. Before I give the financial details and outlook for 2026, I want to recognize Joe for his leadership and many years of service to McGrath. Joe has played a critical role in shaping the company's strategy, driving results, and positioning the business for long-term success.... I also want to congratulate Phil on his well-deserved appointment to CEO. Phil and I have worked closely together. He brings deep strategic, operational, and financial knowledge of the business, and I'm confident he will provide strong leadership as we continue to execute our strategy. Now onto the financial highlights. As Joe mentioned, we delivered strong results in the Q4, driven by increased revenue across each of our businesses and the strong Adjusted EBITDA performance at Mobile Modular and TRS-RenTelco.

With that, I will turn the call over to Keith. We will take you through the financial details of our quarter, and our outlook for 2026.

Brings deep strategic operational and financial knowledge of the business.

Thank you, Phil, and good afternoon, everyone.

I am confident you will provide strong leadership as we continue to execute our strategy.

So now onto the financial highlights.

before I give the financial details and I'll look for 2026, I want to recognize Joe for his leadership and many years of service to McGrath

As Joe mentioned, we delivered strong results in the fourth quarter.

Driven by increased revenue across each of our businesses.

Joe has played a critical role in shaping, the company's strategy, driving results and positioning the business for long-term success.

The strong adjusted EBITDA performance at mobile modular and Trs from Telecom.

I also want to congratulate Phil on his well-deserved appointment to CEO.

Looking at the overall corporate results for the fourth quarter.

Total revenues increased 5% to $257 million.

With rental operations, increasing 6% and sales revenues, increasing 5% during the quarter.

Phil and I have worked closely together. He brings deep strategic, operational and financial knowledge of the business. And I'm confident, he will provide strong leadership as we continue to execute our strategy.

Adjusted EBITDA increased 14% to $105 million.

so now on to the financial highlights,

Reviewing mobile modular is operating performance as compared to the fourth quarter of 2024.

As Joe mentioned, we delivered strong results in the fourth quarter, driven by increased revenue across each of our businesses.

Mobile modular had a good quarter with adjusted EBITDA, increasing 13% to $68 7 million.

Keith Pratt: Looking at the overall corporate results for Q4, total revenues increased 5% to $257 million, with rental operations increasing 6% and sales revenues increasing 5% during the quarter. Adjusted EBITDA increased 14% to $105 million. Reviewing Mobile Modular's operating performance as compared to Q4 2024, Mobile Modular had a good quarter, with Adjusted EBITDA increasing 13% to $68.7 million. Total revenues increased 2% to $175.8 million. The business saw 2% higher rental revenue and 10% higher rental-related services revenues, primarily due to higher site-related services projects, which were partially offset by 1% lower sales revenues. Total gross profit grew 9% for the quarter, driven by a higher mix of used equipment sales, which have higher margins than new sales.

And the strong adjusted, Evita performance at mobile modular, and TRS for Telco.

Total revenues increased 2% to $175 8 million.

looking at the overall corporate results for the fourth quarter, total revenues, increased 5% to 257 million

The business saw a 2% higher rental revenue and 10% higher rental related services revenues, primarily due to higher site related services projects.

with rental operations increasing 6% and sales revenues, increasing 5% during the quarter.

Adjusted even dot increased 14% to 105 million.

Which were partially offset by 1% lower sales revenues.

Total gross profit grew 9% for the quarter.

Reviewing Mobile Modular's operating performance as compared to the fourth quarter of 2024,

Driven by a higher mix of used equipment sales, which have higher margins with new sales.

Mobile modular had a good quarter with adjusted, Evita increasing 13% to 68.7 million.

Rental related services also delivered growth and at higher margins than a year ago.

Total revenues increased 2% to $175.8 million.

Average fleet utilization was 71, 3% compared to 76% a year earlier.

Consistent with the challenging demand environment experienced throughout the year.

The business saw 2% higher rental, revenue and 10%, higher rental, related Services, revenues primarily due to higher site related Services projects.

Fourth quarter returns of rental units were higher the new shipments.

which were partially offset by 1% lower sales revenues.

Fourth quarter monthly revenue per unit on rent increased 6% year over year to $874.

Total gross profit grew 9% for the quarter.

Keith Pratt: Rental-related services also delivered growth and at higher margins than a year ago. Average fleet utilization was 71.3%, compared to 76% a year earlier. Consistent with the challenging demand environment experienced throughout the year, Q4 returns of rental units were higher than new shipments. Q4 monthly revenue per unit on rent increased 6% year-over-year to $874. For new shipments over the last 12 months, the average monthly revenue per unit decreased 3% to $1,169. We continue to make progress with our modular services offerings. Mobile Modular Plus revenues increased to $10.5 million from $8.4 million a year earlier, and site-related services increased to $10 million, up from $6.9 million.

Driven by a higher mix of used equipment sales, which have higher margins than new sales.

For new shipments over the last 12 months the average monthly revenue per unit decreased 3% to $1169.

Rental related Services, also delivered growth and at higher margins than a year ago.

We continue to make progress with our modular services offerings mobile modular plus revenues increased to $10 5 million from $8 4 million a year earlier.

Average Fleet utilization was 71.3% compared to 76% a year earlier.

Site related services increased to $10 million up from $6 9 million.

Consistent with the challenging demand environment experienced throughout the year, fourth quarter returns of rental units were higher than new shipments.

Overall mobile modular had a good quarter as we continued to make progress with our modular solutions growth strategy.

Fourth quarter monthly revenue per unit on rent increased 6% year-over-year to $874.

Turning to the review of portable storage.

For new shipments over the last 12 months, the average monthly Revenue per unit decreased 3%.

Adjusted EBITDA for portable storage was $9 6 million a decrease of 3% compared to the prior year, partially driven by lower margin on our delivery and pickup services and reflecting a very competitive market.

To 1,169.

Rental revenues for the quarter increased 3% to $17 3 million benefiting from some incremental seasonal retail business, while commercial construction activity remains soft.

Keith Pratt: Overall, Mobile Modular had a good quarter as we continued to make progress with our modular solutions growth strategy. Turning to the review of Portable Storage, Adjusted EBITDA for Portable Storage was $9.6 million, a decrease of 3% compared to the prior year, partly driven by lower margin on our delivery and pickup services and reflecting a very competitive market. Rental revenues for the quarter increased 3% to $17.3 million, benefiting from some incremental seasonal retail business, while commercial construction activity remained soft. Average utilization for the quarter was 61.2%, which was comparable to a year ago. Quarterly utilization was relatively steady throughout the year and provided an indication that demand conditions are showing signs of stabilization. Turning now to the review of TRS-RenTelco. Adjusted EBITDA was $23.1 million, an increase of 21% compared to last year.

We continue to make progress with our modular services offerings. Mobile Modular Plus revenues increased to $10.5 million from $8.4 million a year earlier, and site-related services increased to $10 million, up from $6.9 million. Overall, Mobile Modular had a good quarter as we continue to make progress with our modular solutions growth strategy.

Average utilization for the quarter was 61, 2%.

Turning to the review of portable storage.

Which was comparable to a year ago.

Quarterly utilization was relatively steady throughout the year and provided an indication that demand conditions are showing signs of stabilization.

Adjusted EBITDA for Portable Storage was $9.6 million, a decrease of 3% compared to the prior year.

Turning now to the review of Trs from Telco.

Partly driven by lower margins on our delivery and pickup services and reflecting a very competitive market.

Adjusted EBITDA was $23 1 million, an increase of 21% compared to last year.

<unk> had another strong quarter with total revenues up 19% to $40 6 million driven by higher rental and.

Benefiting from some incremental seasonal retail business while commercial construction activity remains soft.

Average utilization for the quarter was 61.2%.

<unk> sales revenues.

Which was comparable to a year ago.

Rental revenues increased 13% to $28 7 million as the industry continued to experience improved demand conditions.

Demand was robust throughout the quarter with a modest seasonal slowdown at year end.

Quarterly utilization was relatively steady throughout the year and provided an indication that the man conditions are showing signs of stabilization.

Turning now to the review of TRS from Telco.

Average utilization for the quarter was 64, 5% up from 59, 1% a year ago.

Keith Pratt: TRS had another strong quarter, with total revenues up 19% to $40.6 million, driven by higher rental and sales revenues. Rental revenues increased 13% to $28.7 million, as the industry continued to experience improved demand conditions. Demand was robust throughout the quarter, with a modest seasonal slowdown at year-end. Average utilization for the quarter was 64.5%, up from 59.1% a year ago, and rental margins improved to 44% from 40% a year ago. Sales revenues were notably strong in the quarter, increasing 42% to $10.3 million, and with gross margins at 64% compared to 58% a year ago. The remainder of my comments will be on a total company basis. Q4 selling and administrative expenses increased $2.7 million to $54.4 million.

Adjusted Eva was 23.1 million and increase of 21% compared to last year.

And rental margins improved to 44% from 40% a year ago.

Sales revenues were notably strong in the quarter, increasing 42% to $10 3 million.

And with gross margins at 64% compared to 58% a year ago.

TRS had another strong quarter with total revenues up, 19% to 40.6 million driven by higher rental and sales, revenues rental revenues. Increased 13% to 28.7 million as the industry continued to experience improved demand conditions,

The remainder of my comments will be on a total company basis.

demand was robust throughout the quarter with a modest seasonal slowdown at year end.

Fourth quarter, selling and administrative expenses increased $2 7 million to $54 4 million.

Interest expense was $6 5 million decrease of $2 4 million as the result of lower average interest rates and lower average debt levels during the quarter.

Average utilization for the quarter was 64.5% up from 59.1% a year ago.

My rental margins improved to 44% from 40% a year ago.

The fourth quarter provision for income taxes was based on an effective tax rate of 26, 4% compared to 25% a year earlier.

Sales revenues were notably strong in the quarter, increasing 42% to 10.3 million.

And with gross margins at 64% compared to 508% a year ago.

Turning to our full year cash flows.

The remainder of my comments will be on a total company basis.

Cash flow highlights net cash provided by operating activities was 256 million.

Keith Pratt: Interest expense was $6.5 million, a decrease of $2.4 million as a result of lower average interest rates and lower average debt levels during the quarter. The Q4 provision for income taxes was based on an effective tax rate of 26.4%, compared to 25% a year earlier. Turning to our full year cash flows. Cash flow highlights. Net cash provided by operating activities was $256 million, compared to $374 million in the prior year. The decrease was primarily attributed to the absence of the non-recurring $180 million merger termination payment received from WillScot in 2024, net of $63 million McGrath merger costs. Rental equipment purchases were $143 million, compared to $191 million in the prior year.

Fourth quarter selling and administrative expenses, increased 2.7 million to 54.4 million.

<unk> $374 million in the prior year.

The decrease was primarily attributed to the absence of the nonrecurring $180 million merger termination payment received from well Scott in 2024 net of $63 million a branch merger costs.

Interest expense was 6.5 million. Decrease of 2.4 million as the result of lower average, interest rates and lower average debt levels during the quarter.

Rental equipment purchases were $143 million.

The fourth quarter, provision for income. Taxes was based on an effective tax rate of 26.4% compared to 25% a year earlier.

Compared to $191 million in the prior year.

In addition to investments in new fleet healthy cash generation allowed us to pay a $48 million in shareholder dividends.

Turning to our full year. Cash flows. Uh cash flow highlights. Net cash provided by operating activities was 256 million compared to 374 million in the prior year.

At quarter end, we had net borrowings of $515 million and the ratio of funded debt to the last 12 months actual adjusted EBITDA was $1 42 to one.

Yeah.

Finally, our 2026 financial outlook.

The decrease was primarily attributed to the absence of the non-recurring 180 million merger. Termination payment received from will Scott in 2024, net of 63 million McGrath merger costs.

For the full year, we currently expect total revenue between 945 and $995 million.

Rental equipment purchases were 143 million.

Keith Pratt: In addition to investments in new fleet, healthy cash generation allowed us to pay $48 million in shareholder dividends. At quarter end, we had net borrowings of $515 million, and the ratio of funded debt to the last twelve months actual Adjusted EBITDA was 1.42 to 1. Finally, our 2026 financial outlook. For the full year, we currently expect total revenue between $945 and 995 million. Adjusted EBITDA between $360 and 378 million. Gross rental equipment capital expenditures between $180 and 200 million. Our current outlook for each of our businesses is as follows: We continue to see solid opportunities at Mobile Modular, where we have multiple growth initiatives in progress, and we expect this business to grow Adjusted EBITDA in 2026.

Compared to 191 million in the prior year.

Adjusted EBITDA between 360 and $378 million.

Gross rental equipment capital expenditures between 180 and $200 million.

In addition to investments in new fleet, healthy cash generation allowed us to pay $48 million in shareholder dividends.

Our current outlook for each of our businesses is as follows.

We continue to see solid opportunities at mobile modular where we have multiple growth initiatives in progress and we expect this business to grow adjusted EBITDA in 2026.

At quarter end, we had net borrowings of 515 million and the ratio of funded debt to the last 12 months actual adjusted, Evita was 1.42 to 1.

Finally, our 2026 Financial Outlook.

Given encourage utilization levels, we have equipment available to meet demand and most established markets.

For the full year, we currently expect total revenue between 945 and 995 million.

We expect to spend approximately $5 million to $8 million higher operating expenses in 2026 preparing available fleet to meet customer orders.

Adjusted EBITDA between $360 million and $378 million.

Gross rental equipment, Capital expenditures between 180 and 200 million.

Last year, we increased the size of our sales team to broaden our geographic coverage and as we enter 2026, we see good momentum in several new regional markets, where we will invest capital in new rental equipment to support demand.

Our current UGL look for each of our businesses is as follows.

Keith Pratt: Given current utilization levels, we have equipment available to meet demand in most established markets. We expect to spend approximately $5 to 8 million higher operating expenses in 2026, preparing available fleet to meet customer orders. Last year, we increased the size of our sales team to broaden our geographic coverage, as we enter 2026, we see good momentum in several new regional markets where we will invest capital in new rental equipment to support demand. At Portable Storage, we see some signs of more stable demand in a very competitive environment. Until utilization improves, we expect it will be challenging to grow Adjusted EBITDA, 2026 performance is expected to be comparable to 2025. At TRS, market conditions improved last year, we expect to see more growth in 2026. As a result, TRS should contribute higher Adjusted EBITDA again this year.

We continue to see solid opportunities at mobile module, where we have multiple growth initiatives in progress, and we expect this business to grow adjusted Ava in 2026.

Yeah.

In portable storage, we see some signs of more stable demand and a very competitive environment.

Given current utilization levels. We have equipment available to meet demand in most established markets,

Until utilization improves we expect it will be challenging to grow adjusted EBITDA and.

In 2026 performance is expected to be comparable to 2025.

we expect to spend approximately 5 to 8 million higher, operating expenses in 2026 preparing, available Fleet to meet customer orders.

At Trs market conditions improved last year, and we expect to see more growth in 2026.

As a result.

<unk> should contribute to higher adjusted EBITDA again this year.

Last year, we increased the size of our sales team to broaden our geographic coverage. And as we enter 2026, we see good momentum. There are several new regional markets where we will invest capital in new rental equipment to support demand.

Given recent high utilization levels and our growth outlook for the business, we expect to increase capital investment in Trs in 2026.

Our environment business, which sells a new modular classroom units had a very strong 2025 with strong revenue growth and higher gross margins than a year earlier.

Until utilization improves. We expect it will be challenging to grow adjusted. Evida

And 2026 performance is expected to be comparable to 2025.

For 2026, we expect revenues margins and adjusted EBITDA to be in a more normalized less.

At TRS, market conditions improved last year, and we expect to see more growth in 2026.

Keith Pratt: Given recent high utilization levels and our growth outlook for the business, we expect to increase capital investment in TRS in 2026. Our level and closer to 2024 levels. $225 to 229 million. In summary, we remain-. Thank you, Keith. Before we open the call for questions... Incredibly proud of what we've built together. To our team members, thank you for your-.

Level and closer to 2024 levels.

As a result TRS should contribute higher adjusted? Evida again, this year.

Our 2026 outlook also includes the following expectations for the company.

Given recent High utilization levels, and our growth outlook for the business.

Until equipment depreciation expense of $85 million to $89 million.

We expect to increase capital investment in TRS in 2026.

Our.

Direct cost of rental operations of $122 million to $126 million.

SG&A expense of 200 $225 million to $229 million and.

And interest expense of approximately $26 million to $29 million.

In summary, we remain committed to building long term shareholder value through signed strategic focus disciplined capital allocation and consistent execution.

Level and closer to 2024 levels.

I will now turn the call over to Joe.

Thank you Keith.

Before we open the call for questions. This company has been a major part of my life for 22 years and I am incredibly proud of what we've built together on.

I am excited about where mcgrath is headed.

225 to 229 million.

The right strategy, the right teams and the right leadership.

I would like to specifically call out the executive team and thank them for their support during my tenure.

In summary, we remain.

To our team members. Thank you for your dedication.

To our customers. Thank you for your trust.

To our shareholders. Thank you for your investment in our company.

Thank you, Keith. Before we open the call for questions,

Stephanie you May now open the lines for questions.

Thank you so if you'd like to ask a question press star one on your keypad to lead the Q&A anytime press Star two once again Thats star one to ask a question and we'll pause for just a moment to allow everyone a chance to join the queue.

Incredibly proud of what we've built together.

We will take our first question from Scott Schneeberger with Oppenheimer. Please go ahead. Your line is open.

Operator: Question, press star one on your keypad. We'll pause for just a moment to allow everyone a chance to join the queue. Scott Schneeberger with Oppenheimer. Please go ahead.

To our team members. Thank you for your

Hey, guys, it's Daniel on for Scott. Thank you for taking our question.

First off congrats to Joe on sale.

And best of luck going forward to both of you.

Thank you.

Question. Press star 1 on your keypad.

Yes.

to leave the

Jumping into the questions.

Historically, you guys have guided.

The initial guide pretty conservatively out of the gate.

pause for just a moment to let everyone a chance to join the queue.

How do you see the the drivers this year that could potentially take you take you above that that guidance range.

Scott Schneberger with Oppenheimer, please go ahead. Your question?

Daniel It's Keith let me make a couple of comments I think the first thing is it's always hard to develop the financial outlook and I always at this time of the year reflected a couple of things first of all the calendar. It's still very early in the year and if you look at our business typically the second half of the year.

Scott Schneeberger: Bill, best of luck going forward. Yeah, jumping into the questions that could potentially take you above that guidance range?

Um, on the best of luck going forward.

Here's the biggest contributor to our financial performance. So we really have to be humble at the start and stay there is a lot we don't know, especially about second half.

Yeah, jumping into the questions. Um,

Right now in particular, the macro presents some challenges we've talked at length about the non res construction markets. Some of the challenges there we're not assuming a change in those conditions this year.

that could uh, potentially take you uh, take your Bob that

Keith Pratt: Make a couple of comments. I think the first thing is, it's always hard to develop the financial outlook, and I always, at this time of year, reflect on a couple of things. If you look at our business, typically the second half of the. Be humble at the start and say there's a lot we don't know, especially about the second half. I think right now, in particular, the macro, whereas construction markets, some of the challenges there, we're not assuming a change in those conditions this year. Obviously, I outlined looking across our businesses, there's a little bit of a different outlook in the, in the context for each business.

Obviously, I outlined looking across our businesses there is a little bit of a different outlook in the context for each business.

That the guidance range, take a couple of comments. I—I think the first thing is, it's always hard to develop the financial outlook. And I always, at this time of the year, reflect on a couple of—

You look at what things.

Things. And if you look at our business, typically the second half of the

Can present upside in our year, it's really looking at each of the businesses and each of the initiatives, we have underway and saying we do more we made greater progress that is reflected in the initial guide that's not an easy thing to do our team did a phenomenal job last year, particularly right through the fourth quarter.

Humble at the start and say this a lot. We don't know especially about the second half.

I think right now in particular, the macro,

But thats that gives you some context, we have a lot to work with its early in the year. We are clear on strategy and we have a team that knows how to execute but its still not an easy environment.

whereas construction markets, some of the challenges there, we're not assuming a change in those conditions this year and obviously, I outlined looking across our businesses, there's a little bit of a different Outlook.

Keith Pratt: If you look at what things can present upside in our year, it's really looking at each of the businesses and each of the initiatives we have underway and saying, we do more, we make greater progress than is reflected in the initial guide. That's not an easy thing to do. Our team did a phenomenal job last year, particularly right through Q4. That gives you some context. We have a lot to work with. It's early in the year. We are clear on strategy, and we have a team that knows how to execute, but it's still not an easy environment. One other thing I will say, when you look at the revenue range being quite wide, what would push you to the upper end? It's really the sales activity in our Mobile Modular business.

One other thing I would say when you look at the revenue range being quite wide.

Push you to the upper end, it's really the sales activity in our mobile modular business. That's an area, where if you look at the details of last year, we actually took a step back.

Didn't sell as much on the new equipment side, even though our used equipment sales were up a bit but if we look at back part of the business. We have a good team we have a lot of good opportunities we see in the market. We think it's a great long term opportunity, but it's very hard to predict exactly where that can land. So we're assuming.

Some growth there if we do well it could be pushing its more towards the upper end on the other hand, if it's a difficult year it could push us lower within our range from a revenue point of view.

Keith Pratt: That's an area where if you look at the details of last year, we actually took a step back. We didn't sell as much on the new equipment side, even though our used equipment sales were up a bit. If we look at that part of the business, we have a good team. We have a lot of good opportunities we see in the market. We think it's a great long-term opportunity, but it's very hard to predict exactly where that can land. We're assuming some growth there. If we do well, it could be pushing us more towards the upper end. On the other hand, if it's a difficult year, it could push us lower within our range from a revenue point of view.

Got it that's a helpful overview. Thank you.

Switching gears to your initiatives and mobile modular we saw real nice exploration and the growth there for both mobile module plus inside related services.

By being in a period of tough environment now could you speak to accelerate momentum you're seeing for those offerings.

Thanks, Phil.

We're happy with the progress, we're making in capturing additional profitability on every project with these service offerings, our product and service offerings come with a building that's more modular plus and our construction services outside of the building site related services continue to grow at double digit rates we have.

Fourth quarter. Um, but that gives you some context. We have a lot to work with; it's early in the year, we are clear on strategy, and we have a team that knows how to execute, but it's still not an easy environment. Um, one other thing I will say when you look at the revenue range being quite wide—what would push you to the upper end? It's really the sales activity in our Mobile Modular business. That scenario, where if you look at the details of last year, we actually took a step back. Um, we didn't sell as much on the new equipment side, even though our used equipment sales were up a bit. But if we look at that part of the business, um, we have a good team, we have a lot of good opportunities we see in the market, we think it's a great long-term opportunity, but it's very hard to predict exactly where that can land. So, we're assuming some growth there. If we do well, it could be pushing us more towards the upper end; on the other hand, if it's a difficult year, it could push us lower within our range, from around.

Revenue point of view.

Scott Schneeberger: Got it. That's a helpful overview. Thank you. Switching gears to your initiatives in Mobile Modular. We saw a real nice acceleration in the growth there for both Mobile Modular Plus and site-related services, I mean, despite being in a pretty tough environment now. Could you speak to the accelerated momentum you've seen for those offerings? Thanks.

Several customers many customers that see value in having one provider provide those activities wall. Our units are on the job side and before you did to get there.

Got it. That's a helpful overview. Thank you. Uh, Switching gears to uh, your initiatives. Uh, in Mobile modular. Uh, we saw a real nice acceleration in the growth there for both mobile module plus and site related Services. Uh I mean, despite being in them through the tough environment now C could you speak to our accelerator momentum, you've seen uh for those those offerings. Thanks.

Got it thank you.

Phil Hawkins: Thanks. This is Phil. We're happy with the progress we're making in capturing additional profitability on every project with these service offerings. Our product and service offerings come with the building, that's Mobile Modular Plus, and our construction services outside the building. Site-related services continue to grow at double-digit rates. We have many customers that see value in having one provider provide those activities while our units are on the job site and before our units get there.

Switching to Trs rental revenue growth really accelerated nicely in the quarter.

Could you please elaborate on what drove that acceleration and.

What type of visibility you have to sustain this momentum into into 26. Thank you.

Sure we were very happy with how Trs performed.

Thanks. This is Phil. We're happy with the progress. We're making and capturing additional profitability on every project with these service offerings. Our product and service offerings. Come with the building, that's mobile modular plus. And our Construction Services outside the building site related Services, continue to grow at Double Digit rates. We have

Where we actually there is.

Two different components to their rental business. They are one is our general purpose fleet and the other is our communications fleet.

Several customers, many customers, see value in having one provider provide those activities while our units are on the job site. And before you get there,

Scott Schneeberger: Got it. Thank you. Switching to TRS, rental revenue growth really accelerated nicely in the quarter. Could you please elaborate on what drove that acceleration and how what type of visibility you have to sustain this momentum into 2026? Thank you.

The general purpose fleet saw growth in aerospace and defense and semiconductor business, which is just a recovery at more projects that we're seeing in that customer base and then over on the communications fleet, we're seeing a nice demand from data.

Data centers and if you think about the data center all of different connections.

Joe Hanna: Sure. We were very happy with how TRS performed. We actually, you know, there's 2 different components to the rental business there. One is our general purpose fleet, and the other is our communications fleet. The general purpose fleet saw growth in aerospace and defense and semiconductor business, which is just a recovery and more projects that we're seeing in that customer base. Over on the communications fleet, we're seeing a nice demand from data centers. If you think about a data center, all the different connections, the testing that has to be done, it's very intensive and requires, you know, considerable amounts of test equipment to get those facilities up and running.

Got it. Thank you. And, uh, switching to TRS rental Revenue growth, really accelerated nicely, uh, in the quarter. Uh, could you please elaborate on, what drill. Acceleration and uh, how how how what type of visibility you have to sustain this momentum into into 26? Thank you.

Testing that has to be done it's very intensive and requires considerable amounts of test equipment to get those facilities up and running so well.

We're the company that people go to when they need that equipment in and it worked out very nicely for us during the year and especially in Q4.

Sure. We were very happy with how TRS performed. Um we are, we actually, you know, there's uh 2 different components to the rental business. There, 1 is our general purpose Fleet and the other is our Communications Fleet.

Yeah, one thing I'd add is in that business, we typically see some slowdown in activity as we get to the period from Thanksgiving to year end and this year business remained strong with really very little drop off in activity through December 31, there was a little bit of a dip right at the end, but I would.

Characterize that as a very healthy very consistent fourth quarter and finish to the year and a good example of where things really broke in our favor in that business.

Joe Hanna: We're the company that people go to when they need that equipment, and it worked out very nicely for us during the year and especially in Q4.

The general purpose, Fleet saw growth and Aerospace and defense and semiconductor business, which is just a a recovery and more projects that we're seeing in that customer base. And then over on the communications Fleet we're seeing a a nice demand from uh data centers. And if you think about a data center, all the different connections, the testing that has to be done. It's very, uh, intensive and requires, you know, considerable amounts of test equipment to get

Joe Hanna: We're the company that people go to when they need that equipment, and it worked out very nicely for us during the year and especially in Q4.

For the final quarter of the year.

Keith Pratt: Yeah, one thing I'd add is, in that business, we typically see some slowdown in activity as we get to the period from Thanksgiving to year-end. This year, business remained strong with really very little drop-off in activity through December 31st. There was a little bit of a dip right at the end. I would characterize that as a very healthy, very consistent Q4 and finish to the year, and a good example of where things really broke in our favor in that business for the final Q4 of the year.

get those facilities up and running and so we're the we're the company that people go to when they need that equipment and and it worked out very nicely for us during the year and especially in Q4

Got it thanks guys.

Thank you we'll take our next question from Manav Patnaik with Barclays. Please go ahead. Your line is open.

Hi, Good afternoon. This is roni Kennedy on for Manav. Thank you for taking our questions and congratulations to the both Joe and Phil.

The CEO transition it sounds like it was thoughtful should be smooth seamless fill you spoke of the strategic continuity and continued disciplined execution or are there any areas, whether it's portfolio management or mix M&A appetite capital returns, where your approach may differ even if suddenly for Joe's once you step into the CEO role.

Very healthy, very consistent, fourth quarter, and finish to the year, and a good example of where things really broken. Our favor in that business, uh, for the, for the final quarter of the year.

Scott Schneeberger: Got it. Thanks, guys.

Got it. Thanks guys.

Operator: Thank you. We'll take our next question from Manav Patnaik with Barclays. Please go ahead, your line is open.

Thanks Ryan.

Joe keep an eye on.

We're closely together along with other members of our leadership team to craft, a current strategy and refresh that over the last several years and those strategic initiatives are in progress we're happy with the progress, we're making I don't expect any near term changes.

Thank you. We'll take our next question from Anav Nath with Barclays. Please go ahead. Your line is open.

Ronan Kennedy: Hi, good afternoon. This is Ronan Kennedy on for Manav. Thank you for taking our questions, and congratulations to you both, Joe and Phil. The CEO transition, you know, it sounds like it was thoughtful, should be smooth to seamless. Phil, you spoke of strategic continuity and continued disciplined execution. Are there any areas, whether it's portfolio management or mix, M&A appetite, and capital returns, where your approach may differ, even if subtly from Joe's once you step into the CEO role?

Got it thank you and beyond the performance of Trs and virus flex.

As a total company basis, $4 25, which specific strategic initiatives were most impactful in offsetting the non resi headwinds and which do you anticipate will be most impactful for 'twenty six.

Hi. Good afternoon. This is Ronan. Kennedy on from and off. Thank you for taking our questions and congratulations to you both Joe and Phil um the CEO transition. You know, it sounds like it was thoughtful, should be smooth to seamless. So you spoke of strategic continuity and continued, discipline execution. Are there any areas whether its portfolio management or mix m&a appetite Capital returns where your approach May differ. Um, even if subtly for Joe's, once you step into the CEO role,

Phil Hawkins: Thanks, Ronan. I think Joe, Keith, and I have worked closely together, along with other members of our leadership team, to craft our current strategy and refresh that over the last several years. Those strategic initiatives are in progress. We're happy with the progress we're making. I don't expect any near-term changes.

Yes.

I would say geographic expansion.

Additional sales people, we added into the market in 2025 that we talked about on prior calls momentum we have in those markets coming into 2026 or one of the biggest drivers and offsetting that.

Thanks Ron. Thank Joe, Keith. And I work closely together, along with other members of our leadership team to craft or current strategy and, and refresh that over the last several years, and those strategic initiatives are in progress. We're happy with the progress we're making and I don't expect any near-term changes.

Ronan Kennedy: Got it. Thank you. Beyond the performance of TRS and Enviroplex, you know, as a total company basis for 2025, which specific strategic initiatives were most impactful in offsetting the non-resi headwinds, and which do you anticipate will be most impactful for 2026?

Impact that we're seeing some of the more challenged areas of the commercial market.

Thank you I appreciate it and then with the mobile modular starting 'twenty six slower utilization.

But guiding to the adjusted EBITDA growth, even with higher operating expenses and Capex to prepare fleet can you walk us through the bridge on that and what the key drivers are there whether it's pricing utilization the mobile modular site related mix or end.

Got it. Thank you and Beyond the performance of TRS enviroplex. Um you know is a total company basis 425 which specific strategic initiatives were most impactful in offsetting the non-res headwinds in which do you anticipate will be most impactful for 26?

Phil Hawkins: I would say geographic expansion. The additional salespeople we added into the market in 2025 that we talked about on prior calls, momentum we have in those markets coming into 2026 are one of the biggest drivers in offsetting the impact that we're seeing to some of the more challenged areas of the commercial market.

From.

Take standpoint cost absorption and then what's the incremental margin on the.

Mobile modular plus.

I would say Geographic expansion, the additional salespeople, we added into the market in 2025 that we talked about on prior calls momentum. We have in those markets coming into 2026 or 1 of the biggest drivers in offsetting the

Surfaces services versus base rental.

Impact that we're seeing to some of the more challenged areas of the commercial market.

Ronan Kennedy: Thank you. Appreciate it. Then with Mobile Modular starting 26 lower utilization, but guiding to the Adjusted EBITDA growth, even with higher operating expenses and CapEx to prepare fleet, can you walk us through the bridge on that and what the key drivers are there, whether it's pricing, utilization, the Mobile Modular, site-related mix, or, you know, from a take standpoint, cost absorption? Then what's the incremental margin on the Mobile Modular Plus and Site Services versus base rental?

Yes, a lot to unpack there what I would say Ronan is.

Phil alluded to it we've got several initiatives in play, but we feel good about so as always theres a range of possible outcomes here will be working to try and make the most of each of those initiatives areas.

Thank the geographic expansion is important to call out.

Staffed up over 25, we feel good about the traction we're getting in the market will put new capital to work because a lot of that geographic coverage is in areas where we.

Thank you, appreciate it. And then with, uh, mobile modular starting 26th with lower utilization. Um, but guiding to the adjusted Eva growth, even with higher operating expenses and capex to prepare Fleet, can you walk us through the bridge on that? And what the key drivers are there whether it's pricing utilization, the mobile modular site related mix or and you know from

We don't either have equipment in the market or we don't have the right kind of equipment available in our fleet.

I take standpoint cost absorption, and then what's the incremental margin on the Mobile Modular Plus and Site Services versus base rental?

Keith Pratt: Yeah, a lot to unpack there. What I would say, Ronan, is, and Phil alluded to it, we've got several initiatives in play that we feel good about. As always, there's a range of possible outcomes here. We'll be working to try and make the most of each of those initiative areas. I think the geographic expansion is important to call out. We staffed up over 25. We feel good about the traction we're getting in the market. We'll put new capital to work because a lot of that geographic coverage is in areas where we don't either have equipment in the market or we don't have the right kind of equipment available in our fleet. In terms of margin impact, I wouldn't see margin impact being dramatically different within the individual revenue streams.

In terms of margin impact.

Wouldn't see margin impact being dramatically different within the individual revenue streams. So areas like mobile modular plus areas like site related services I would look at what we've done historically.

I've said margins are probably going to stay pretty consistent.

Really the biggest wildcard is the sales piece of the business you saw in the fourth quarter, even though sales were down a bit for mobile modular we actually increased our gross profit contribution from sales and that would be impact of a higher mix of used sales. So when we turn that and look into 'twenty six again there.

Yeah, a lot to unpack there. Uh, what I would say, Ronin is—and still alluded to it—we've got several initiatives in play that we feel good about. So, as always, there's a range of possible outcomes here. We'll be working to try and make the most of each of those initiative areas. Uh, I think the geographic expansion is important to call out. We staffed up over 25; we feel good about the traction we're getting in the market. We'll put new capital to work, because a lot of that geographic coverage is in areas where we don't either have equipment in the market or we don't have the right kind of equipment available in our fleet.

As a range of possibilities here, we put put our best estimates on the table, but we look a lot of our own sensitivities.

Keith Pratt: Areas like Mobile Modular Plus, areas like site-related services, I would look at what we've done historically, and said, margins are probably going to stay pretty consistent. Probably the biggest wild card is the sales piece of the business. You saw in the Q4, even though sales were down a bit for Mobile Modular, we actually increased our gross profit contribution from sales, and that was the impact of a higher mix of used sales. When we turn that and look into 26, again, there's a range of possibilities here. We put our best estimates on the table, but we look a lot around sensitivities. That area, a little bit hard to tell, but I think we have a realistic midpoint in our range that reflects some continued progress with sales at Mobile Modular.

So that area, a little bit hard to tell but I think we would be realistic.

In our range that reflects some continued progress with sales at mobile modular probably not as heavier weighting towards the used sales more on the U and that can be.

Slightly detrimental from a margin point of view, so let us know if you'd like more color I know you touched on a lot of.

Individual topics there.

Um, in terms of margin impact uh I wouldn't see margin impact. Being dramatically different within the individual revenue streams. So areas like mobile modular plus areas like psych related Services. I would look at what we've done historically. Uh and set margins are probably going to stay pretty consistent. Um, probably the biggest wild card is the sales piece of the business. Uh, you saw on the fourth quarter, even though sales were down a bit for mobile modular, we actually increase our gross profit contribution from sales and that would be the impact of a a higher mix of used sales. So when we turn that and look at

No. That's great. Thank you very much and then mask on the monthly revenue per unit rose, 6% year over year, while you ship and revenue per unit fell 3% could you talk about the drivers there whether it's from mix drive pricing customer driven and potential implications for the portfolio and future economics.

Keith Pratt: Probably not as heavy a weighting towards the used sales, more on the new, and that can be slightly detrimental from a margin point of view. Let us know if you'd like more color. I know, I know you touched on a lot of individual topics there.

The portfolio insurance.

Sure I'd, probably start with the 6% increase in the revenue per unit on rent. So that's really looking at all of our assets that are held by customers at our at work. So to speak that is really the key metric and you see that 6% lift is very good in this environment, we're very pleased with that the offset.

Ronan Kennedy: No, that's great. Keith, thank you very much. May I ask, on the monthly revenue per unit, I think it rose 6% year-over-year, while new shipment revenue per unit fell 3%. Could you talk about the drivers there, whether it's, you know, from mix drive, pricing, customer driven, and potential implications for the portfolio and future economics as the portfolio turns?

The 26th. Again, there's a range of possibilities here. We put put our best estimates on the table, but we look a lot a lot sensitivities. Um, so that area a little bit hard to tell, but I think we have a realistic, uh, midpoint in our range that reflects some continued progress with sales at mobile modular. Probably not as heavy, a weighting towards the use sales more on the new and that can be uh a slightly detrimental for the margin point of view. So uh, let us know if there if you'd like more color. I I know you touched on a lot of uh individual topics there.

With fewer units on rent and that netted out to about 2% clinical growth for the quarter.

In terms of new Activations.

Based on an LTM look at new shipments.

Number there was down by 3%. So it was down from 12, 3% to $11 69, I think theres a few things going on there first we are within those numbers, we are making progress with <unk> plus.

Insurance.

Keith Pratt: Sure. I'd probably start with the 6% increase in the revenue per unit on rent. That's really looking at all of our assets that are held by customers and are at work, so to speak. That is really the key metric, and you see that 6% lift is very good in this environment. We're very pleased with that. The offset was fewer units being on rent, and that netted out to about 2% rental growth for the quarter. In terms of new activations, based on an LTM look at new shipments, the number there was down by 3%. It was down from 1,203 to 1,169. I think there's a few things going on there. First, we are within those numbers. We are making progress with MN Plus.

If we look at the base wind that is actually lower and that's for a couple of reasons. The primary reason is mix related when we look at the types of units the regions. They're in the contracts there on mix plays a big factor, there and making the base rent lower but in addition, we're also seeing parts of the market.

Modulus are very competitive.

Others are more stable, but there's definitely a lot of competition in the marketplace. So that's how I would sort of summarize what we're seeing I think when we look at the economic opportunity. There is still a significant gap between the revenue we're getting for units in our fleet today, and where we're executing new shipments that combination of disciplined.

Keith Pratt: If we look at the base rent, that is actually lower, and that's for a couple of reasons. The primary reason is mix related. When we look at the types of units, the regions they're in, the contracts they're on, mix plays a big factor there in making the base rent lower. In addition, we're also seeing parts of the market for modulars are very competitive. Others are more stable, but there's definitely a lot of competition in the marketplace. That's how I would sort of summarize what we're seeing. I think when we look at the economic opportunity, there's still a significant gap between the revenue we're getting for units in our fleet today and where we're executing new shipments.

Sure. I I probably start with the 6% increase in the revenue per unit on rent. So that's really looking at all of our assets that are, uh, held by customers and are at work, so to speak. That is really the key metric and you see that 6% lift is very good in this environment. We're very pleased with that. The offset was fewer units being on rent and that net it out to about 2%, rental growth for the quarter. Um, in terms of new activations. Um, based on an LTM, look at new shipments. Uh, the number there was done by 3%, so it was done, uh, from 1203 to 1169. Uh, I think there's a few things going on there. First, we are within those numbers. We are making progress with MN Plus.

Um, if we look at the base rent, that is actually lower and

On base unit pricing good progress with services, there's still an opportunity over time.

With that we buy as much as 33%.

Thank you very much for all that I appreciate it I'll turn it over thank you.

Thank you we'll take our next question from Daniel Moore with CJS Securities. Please go ahead. Your line is open.

Thank you good afternoon, Joe Congratulations going out on a strong note so to speak.

And Phil Congratulations to you look forward to working more closely going forward.

Keith Pratt: That combination of discipline on base unit pricing, good progress with services, there's still an opportunity over time, to raise that fleet rate by as much as 33%.

That's for a couple of reasons. The primary reason is mix related. When we look at the types of units, the Regions, they're in the contracts. They're on mix plays a big factor there in making the base rent lower. But in addition, we're also seeing parts of the market for modulars are very competitive. Uh, others are more stable, but there's definitely a lot of competition in the marketplace. So that's how I would, sort of summarize, what we're seeing. I think, when we look at the Economic Opportunity, there's still a significant gap between the revenue. We're getting for units in our Fleet today and where we're

Thanks, Dan.

And of course capped.

Capex.

Purchases of new rental equipment, you touched on central PA, we have seen a tick higher than Q4 as well as a higher guide for 'twenty six.

For executing new shipments that combination of discipline on base unit pricing, good progress with Services. There's still an opportunity over time um to raise that Fleet grid by as much as 33%.

Ronan Kennedy: Thank you very much for all of that. Appreciate it. I'll turn it over. Thank you.

Is that primarily yes.

Thank you very much for all that. Appreciate it. I'll turn it over. Thank you.

Phil Hawkins: Thank you. We'll take our next question from Daniel Moore with CJS Securities. Please go ahead. Your line is open.

Operator: Thank you. We'll take our next question from Daniel Moore with CJS Securities. Please go ahead. Your line is open.

Expanding into new geographies.

Just talk about the confidence that you have to turn off the capex, a little bit more and acquire more rental equipment in the in this environment.

Daniel Moore: Thank you. Good afternoon. Joe, congratulations. Going out on a strong note, so to speak. Phil, congratulations to you. Look forward to working, you know, more closely going forward.

Thank you, we'll take our next question. From Daniel Moore with CJs Securities. Please go ahead. Your line is open.

Yes. It was still the primary driver of that higher capex on the modular side of the business is definitely geographic expansion or growing our fleet in a newer market there are some.

Thank you. Good afternoon, uh, Joe—congratulations on going out on a strong note, so to speak.

Uh, look forward to working, you know, more closely going forward.

Phil Hawkins: Thanks, Dan.

Daniel Moore: Of course. CapEx or, you know, purchases of new rental equipment, you touched on several times, you know, ticked higher in Q4 as well as the higher guide for 2026. Is that primarily, kind of expanding into new geographies? You know, just talk about the confidence that you have to turn on the CapEx spigot a little bit more, and acquire more rental equipment than the in this environment.

Thank you.

Product areas of our portfolio in mature markets, where we'd also be adding and then Trs the health of the Trs business is another place where the capex will be likely higher but it was a year ago.

Yeah, Dan always good to look at history. When you look at that number it really takes us back to a level similar to what we spent in 2024, it's still lower than what we spent in 2023.

Of course, um capex or, you know, purchases of new rental equipment, be touched on several times, you know, take care and Q4 as well as the the higher guide for 26. Um, is that primarily uh, kind of expanding into new geographies? Um, you know, and just talk about the the confidence that you have to turn on. You know, the capex, spigot a little bit more and acquire, more rental equipment in the, in this environment.

Phil Hawkins: The primary driver of that higher CapEx on the modular side of the business is definitely geographic expansion. We're growing our fleet in a newer market. There are some product areas of our portfolio in mature markets where we'd also be adding, and then TRS, the health of the TRS business is another place, where the CapEx will be likely higher than it was a year ago.

One other comment I'll make is that the portion of additional spend it also includes.

Maintenance capex on some of our modular units, where we're doing a long term refurb on the unit.

And we're not really adding any units to the fleet and so think of a number order of magnitude of around $20 million in that Capex guide is really.

Keith Pratt: Yeah, Dan, always good to look at history when you look at that number. It really takes us back to a level similar to what we spent in 2024. It's still lower than what we spent in 2023. One other comment I'll make is that the portion of additional spend, it also includes maintenance CapEx on some of our modular units, where we're doing a long-term refurb on the unit, and we're not really adding any units to the fleet. Think of a number, order of magnitude around $20 million in that CapEx guide that is really extending the life of units we already own, as opposed to adding units.

Extending the life of units, we already own as opposed to adding units.

Yes, Dan. This is Phil, the primary driver of that higher capex on the modular side of the business is definitely Geographic expansion where we're growing. Our Fleet in a newer Market. There are some uh product areas of our portfolio and mature markets where we'd also be adding. And then TRS the health of the TRS business is another place where the the capex will be likely higher than it was a year ago.

Got it that's helpful.

<unk>.

Any color Keith kind of the cadence of growth and margins embedded in the 26th guide starting with Q1, how do we see kind of a revenue and EBITDA growth.

And how do you see progressing over the course of the year.

Yes, the way I would look at it is we're not assuming business conditions getting any better anytime soon so I would look at the first quarter is maybe be more comparable to how we started last year.

Second quarter, probably more of the same and then second half of the year by banner Bank, we're likely to be seen more impact from deploying some of that new capital, particularly in some of the new modular markets, that's sort of high would characterize it at a very high level.

Daniel Moore: Got it. Helpful. Any color, Keith, on kind of the cadence of growth and margins embedded in the 26 guide? You know, starting with Q1, how do we see kind of revenue and EBITDA growth, and how do you see it progressing over the course of the year?

Yeah, and then always good to look at history when you look at that number, it really takes us back to a level similar. To what we spent in 2024, it's still lower than what we spent in 2023, uh, and 1 other comment. I'll make is that the portion of additional spend? It also includes, uh, maintenance capex on some of our modular units where we're doing a long-term refurb on the unit. And we're not really adding any units to the fleet and so think of a number order, a magnitude or on 20 million in that capex guide. That is really, um, extending the life of units. We already own as opposed to adding units.

Got it helpful. Um,

Very good.

Keith Pratt: Yeah, the way I would look at it is, we're not assuming business conditions get any better anytime soon. I would look at Q1 as maybe being more comparable to how we started last year. Q2, probably more of the same, second half of the year, by then, I think we're likely to be seeing more impact from deploying some of that new capital, particularly in some of the new modular markets. That's sort of how I would characterize it at a very high level.

Any color teeth, um, kind of the Cadence of growth in in margins embedded in the 26 guide, you know, starting with q1, how do we see kind of Revenue and EBA dog growth and Hennessy, progressing over the course of the year.

I have one more I guess just from a capital allocation perspective.

Obviously, you picked up the dividend balance sheet is in great shape maybe.

Maybe talk about the M&A pipeline for 'twenty six.

And kind of strategic priority from a capital allocation perspective this year.

We continue to have an active M&A pipeline.

We're consistently looking for opportunities, particularly in those geographic areas that we would like to enter.

And the timing on those is always uncertain based on finding the right assets right business in the right geographies at the right valuation continues to be part of our.

Yeah, the way I would look at it is, we're not assuming, uh, business conditions get any better anytime soon. So, I would look at the first quarter as maybe be more comparable to how we started last year. Um, second quarter, probably more of the same and then second half of the Year by then. I think we're likely to be seeing more impact from deploying. Some of that new capital, particularly in some of the new modular markets. That's sort of how I would characterize it at a very high level.

Daniel Moore: Very good. Let's see if I have one more. I guess, just from a capital allocation perspective, obviously ticked up the dividend, balance sheet's in great shape. Maybe talk about the M&A pipeline for 2026, and, you know, kind of strategic priorities from a capital allocation perspective this year.

Very good. Um,

Financial ambition model and.

So.

I don't want to.

Very good thank you again for the color.

26. Um, and and, you know, kind of strategic priorities from Capital allocation perspective this year.

Thank you well move now to Steven Ramsey with Thompson Research Group. Please go ahead. Your line is open.

Phil Hawkins: We continue to have an active M&A pipeline. We're consistently looking for opportunities, particularly in those geographic areas that we would like to enter. The timing on those is always uncertain, based on finding the right assets, right business, and the right geography at the right valuation. It continues to be part of our financial allocation model and place that we spend a lot of time.

Hi, good evening and extend my congratulations as well.

Speaking about the geographic expansion can you give a little bit more flavor.

On the.

The ingredients for how you go to market, if it's modular and storage.

How youre thinking about going to densely populated areas versus Mega project oriented areas and then maybe lastly in the areas, which success how much is modular plus in Srs a factor.

We continue to have an active M&A pipeline. We're consistently looking for opportunities, particularly in those geographic areas that we would like to enter. Um, and the timing on those is always uncertain based on finding the right assets, right business, and the right geography at the right valuation. It continues to be part of our financial allocation model and, uh, a place that we spend a lot of time.

Daniel Moore: Very good. Thank you again for the help, the color.

Very good. Thank you again, for the help of the caller.

Operator: Thank you. We'll move now to Steven Ramsey with Thompson Research Group. Please go ahead, your line is open.

Steven Ramsey: Hi, good evening, and, I extend my congratulations as well. When thinking about the geographic expansion, can you give a little bit more flavor on how the ingredients for how you go to market, if it's modular and storage, how you're thinking about going to densely populated areas versus mega-project-oriented areas? Maybe lastly, in the areas with success, how much is ModularPlus and SRS a factor, or attaching to those wins?

Thank you. We'll move now to Stephen Ramsey with Thompson research group. Please go ahead. Your line is open.

Or attaching to those wins.

Alright, the way I would think about geographic expansion as we are looking for.

Metro areas and based on Metros that states that are strong opportunities for both for our entire modular solutions platform, which would include modular and portable storage and all the service offerings that you referenced and that so when we enter a new market our goal is to.

Hi, good evening, and let me extend my congratulations as well. When thinking about geographic expansion, can you give a little bit more flavor on the ingredients for how you go to market? If it's modular and storage, how are you thinking about going into densely populated areas versus mega project-oriented areas? And then maybe, lastly, in the areas where you've seen success?

All of those offerings.

And then it always helps if there is some large mega projects in those markets that provided a nice anchor, but we believe that can be demonstrated through entering the Pacific northwest after design space Midwest under best.

How much is modular plus and SRS a factor uh or attaching to those wins.

Phil Hawkins: All right. The way I would think about geographic expansion is we are looking for metro areas. Based on metro areas, then states that are strong opportunities for our entire Modular Solutions platform, which would include modulars, Portable Storage, and all the serviced offerings that you referenced in that. When we enter a new market, our goal is to provide all those offerings. It always helps if there's some large mega projects in those markets that provide a nice anchor. We believe that, and we've demonstrated through entering the Pacific Northwest after Design Space, Midwest after Vesta, that we can enter these markets, come in with quality people and processes, and add CapEx and take share or participate in growth that exists in that market.

all right, the way I would think about uh, Geographic expansion is we are looking for

We can enter these markets.

Come in with quality people and processes and add Capex and Ti.

Metro areas and based on metros that states that are

Sure, we'll participate in growth that exist in that market.

Okay.

Question on more modular clause.

I think you think about that being a small part of the partial portion of the revenue on mute it really becomes more impactful as you gave more units on rent in that market and youre seeing that flywheel build over time so.

Wouldn't say, that's a material needle mover early in the process.

Okay. That's helpful. Thank you and then maybe to continue on.

Strong opportunities exist for both—for the entire Modular Solutions platform, which would include modulars, portable storage, and all the service offerings that you referenced in that. So, when we enter a new market, our goal is to provide all those offerings, and then it always helps if there's some large, uh, mega projects in those markets that provide a nice anchor. But we believe that—and we've demonstrated through entering the Pacific Northwest after Design Space, and the Midwest after Besta—that we can enter these markets.

Srs and modular plus chilling such great growth makes up $74 million or 16% of modular segment rental revenue.

Come in with quality people um, and processes and that capex and take share or participate in both the existing that market.

Steven Ramsey: Okay.

Phil Hawkins: Maybe to add to your question on both ModularPlus. I think, you know, you think about that being a small portion of the revenue on unit, it really becomes more impactful as you get more units on rent in that market, and you're seeing that flywheel build over time. I wouldn't say that's a material needle mover early in the process.

Do you expect the strong double digit growth of those product lines.

<unk> in 2026.

I think we have.

Okay, to add to your question on both Modular Plus, um, I think, you know, you think about that being a small part or partial portion of the revenue on a unit. It really becomes more impactful as you get more units on rent in that market, and you're seeing that flywheel build over time. So, I wouldn't say that's...

We believe there's a nice long term opportunity there.

Material needle. Mover early in the process.

Steven Ramsey: Okay. That's helpful. Thank you. Maybe to continue on, SRS and ModularPlus showing such great growth, makes up $74 million or 16% of modular segment rental revenue. Do you expect the strong double-digit growth of those product lines to continue in 2026?

On the penetrations increase on the mobile module plus side, we add more service that offer offering we think theres room to continue turning that flywheel and get lift on the site related services side that could be lumpier right those are larger.

Okay, that's helpful. Thank you. And then maybe to continue on uh SRS and modular plus showing such great growth makes up 74 million or 16% of modular segment rental Revenue.

Revenue items tied to specific projects and those can little bit lying sales tend to be a little little lumpier. The process. We believe we've got runway to continue to grow those.

Do you expect the strong double-digit growth of those product lines?

To continue in 2026.

Phil Hawkins: I think we have, we believe there's nice long-term opportunity there, as penetrations increase on the Mobile Modular Plus side, we add more service to that offering. We think there's room to continue turning that flywheel and get lift. On the site-related services side, that could be lumpier, right? Those are larger revenue items tied to specific projects, and those can, you know, a little bit like sales, tend to be a little lumpier in the process. We believe we've got runway to continue to grow those. I'd be careful about the trajectory that we bake in there and how long that high growth that we've seen can continue.

I'd be careful about the trajectory that we baked in there now.

High growth that we see it continue yes, David one thing I'd point out is we've been doing this for a few years. So as we if you will anniversary some of the success of earlier and then plus contracts, sometimes we will have returned in units which actually.

The number done because they come back and they had <unk> plus all the contract and so simply replacing back with another contract that is M. N plus is necessary to hold the line. So.

We've made a lot of progress we think theres more opportunity we broadened the offering those are all good long term drivers, but keep in mind as we start rotating here.

Keith Pratt: Yeah, Steven, one thing I'd point out is we've been doing this for a few years, so as we, if you will, anniversary some of the success of earlier MM Plus contracts, sometimes we'll have returning units, which actually bring the number down because they come back, and they had MM Plus on the contract. Simply replacing that with another contract that is MM Plus is necessary to hold the line. Again, we've made a lot of progress. We think there's more opportunity. We've broadened the offering. Those are all good long-term drivers, but keep in mind, as we start rotating here, some of our earlier success has to be replaced.

Some of our earlier success has to be replaced.

Okay. That's helpful perspective, and then last one for me.

Data centers with Trs can you talk about how much you can do to grow intentionally that product set or how much of it is following customers and then with data centers being supportive of Trs growth can you put.

I think we have uh uh believe there's dice long-term opportunity there um on the as penetrations increase on the mobile module plus side. And we add more service to that off offering. We think there's room to continue turning that flywheel and get lift on the site related Services side that could be lumpier right? Those are larger uh um Revenue items tied to specific projects and those can you know, a little bit like sales tend to be a little little lumpier, the process. We believe we've got Runway to continue to grow those. Um, I'd be careful about the trajectory that we baked in there and how long that high growth that we've seen can continue. Yeah. Stephen 1 thing, I'd point out is we'd be doing this for a few years. So, as we, if you will anniversary some of the success of earlier MN plus contracts, sometimes we'll have returned

Units, which actually bring the number down because they come back and they had MN Plus on the contract. And so, simply replacing that with another contract that is MN Plus is necessary to hold the line.

The data center vertical into some kind of context the size within total Trs revenue.

So, uh, again, we made a lot of progress, we think there's more opportunity. We've broadened the offering. Those are all good, long-term drivers uh but keep in mind as we start rotating here, uh, some of our earlier success uh, has to be replaced.

Steven Ramsey: Okay, that's helpful perspective. Last one for me, serving data centers with TRS. Can you talk about how much you can do to grow intentionally that product set, or how much of it is following customers? With data centers being supportive of TRS growth, can you put the data center vertical into some kind of context of size within total TRS revenue?

Yes, I don't think we want to.

Try to give a specific size amount related to Trs, but I would characterize that work as following the existing customers that are doing fiber connections or other communications type of testing and electrical testing into that data center space. So this is the work that we do every day.

Across many different project types, we just happened to be a lot more of it in the data center projects.

Okay. Thanks, everyone.

The last 1 for me serving data centers with TRS, and you talked about how much you can do to grow intentionally that product set, or how much of it is following customers, and then with data centers, being supportive of TRS growth, can you put, uh, the data center vertical into some kind of context of size within total TRS Revenue?

Phil Hawkins: Yeah, I don't think we wanna try to give a specific size amount related to TRS, but I would characterize that work as following existing customers that are doing fiber connections or other communications type of testing and electrical testing into that data center space. This is the work that we do every day, across many different project types. There just happens to be a lot more of it in these data center projects.

Thank you we'll take our next question from Marc Riddick of Sidoti. Please go ahead. Your line is open.

Hey, good evening everyone.

Hi, Mark.

So first of all I want to start Joe. Thank you. So much it's been a pleasure working with you over all these years and certainly wish you the best on your retirement.

Oh boy.

With us today from for many years and it's certainly been a pleasure to do so with you and certainly looking forward to having a very positive retirement, well I know you're not completely gone anywhere, but it's a it's.

I don't think we want to, uh, try to give a specific size amount related to TRS, but I would characterize that work as following existing customers that are doing fiber connections, or other communications-type of testing and electrical testing into that data center space. So, this is the work that, uh, we do every day, um, across many different projects. It just happens to be a lot more of it in these data center projects.

Steven Ramsey: Okay. Thanks, everyone.

Okay. Thanks everyone.

Operator: Thank you. We'll take our next question from Marc Riddick of Sidoti. Please go ahead. Your line is open.

It's been for you and.

It's been a pleasure so congratulations there.

Thank you Mark.

Thank you. We'll take our next question from Mark Riddick of Sidoti. Please go ahead. Your line is open.

Marc Riddick: Hey, good evening, everyone.

And so we're certainly looking forward to working closer with you over over time.

Keith Pratt: Hi, Mark.

Hey, good evening, everyone.

Marc Riddick: First of all, I want to start, Joe, thank you so much. It's been a pleasure working with you over all these years, and certainly wish you the best on your retirement. You know, you've worked with us at Sidoti for many years, and it's certainly been a pleasure to do so with you, and certainly looking forward to having a very positive retirement. Well, I know you're not completely going anywhere, but it's, you know, it's good for you, and it's been a pleasure, so, full congratulations there.

I'm

And certainly wish you the best going forward.

I really really do appreciate all the color that you guys have already given on the call one of the things I did sort of want to touch a little bit on the.

On the expansion you touched on the organic pursuits on the expansion side on the geographic footprint side, maybe you can touch a little bit on the.

The potential of acquisitions I guess there hasn't.

The pace of acquisition activity hasn't been what it was prior to <unk>.

Keith Pratt: Thank you, Marc.

so first of all, I want to start Joe. Thank you so much. It's been a pleasure working with you over all these years and and certainly wish you the best on on your retirement. Um, you know, you worked with uh, with us at today, for for many years and and it's certainly been a pleasure to do so with you and certainly, uh, looking forward to having a very positive retirement. Well, I know you're not completely going anywhere but it's, uh, you know, it's it's good for you and, uh, uh, it's been a pleasure. So, um, welcome. Congratulations there.

Well, Scott, maybe you could talk a little bit about what youre seeing out there valuations appetite.

Marc Riddick: Phil, we're certainly looking forward to working closer with you over time, and certainly wish you the best going forward. I really do appreciate all the color that you guys have already given on the call. One of the things I did sort of want to touch a little bit on the expansion. You touched on the organic pursuits on the expansion side and the geographic footprint side. Maybe you can touch a little bit on the potential of acquisitions. I guess there hasn't the pace of acquisition activity hasn't been, you know, what it was prior to, you know, everything that the world's got and the like.

Thank you, Mark.

Anything interesting color wise, if you can give there would be appreciated.

Maybe I'll start with.

Reminding everyone that we did two small deals related to our geographic expansion efforts last year, one in portable storage and one of the modular side of the business. So those are examples of the type of opportunities and transactions.

Our represent our pipeline and then we look for.

Couple of things to think about are we don't determine the timing of those the owners do and so a lot of our pipeline our people that we keep in close contact with when they are ready to sell we're their first call, but they may not be ready at the particular time that we're having conversations with them.

Marc Riddick: Maybe you could talk a little bit about what you're seeing out there, valuations, appetite, you know, anything color-wise you can give there would be appreciated.

And, and Phil, we're certainly looking forward to to working closer with you over over time and, uh, and certainly wish you the best going forward. And uh, I really really do appreciate all the the color that you guys have already given on the call 1 of the things. I I I did sort of want to touch a little bit on the um, on the expansion. You you, you touch on the organic Pursuits on on the expansion side of the on the geographic side and maybe we can touch a little bit on the uh, the potential on of Acquisitions. I guess that hasn't the the pace of acquisition activity hasn't been, you know, what it was prior to you know, everything was well Scott and like maybe you could talk a little bit about what you're seeing out there, valuations appetite, uh you know, anything, anything otherwise you can get there with me appreciated.

Phil Hawkins: Maybe I'll start with reminding everyone that we did 2 small deals related to our geographic expansion efforts last year, one in Portable Storage and one in the modular side of the business. Those are examples of the type of opportunities and transactions that represent our pipeline and that we look for. I think a couple things to think about are, we don't determine the timing of those, the owners do, and so a lot of our pipeline are people that we keep in close contact with. When they're ready to sell, we're their first call, but they may not be ready at the particular time that we're having conversations with them.

And then for ones that are already there is a process to go through diligence evaluating.

To make sure it's the right fit for US and then evaluation stars have to align so I think where we are rigorous in that process. We don't feel compelled to do deals we look for for ones that makes sense for us again based on the market.

And the valuation and the.

Timing of the opportunity.

So those are the two we found this year, we continue to be hopeful that theres more it's not something that we baked into our earnings.

Our earnings guidance for our plan.

Phil Hawkins: For ones that are ready, there's a process to go through diligence, evaluating employees, making sure it's the right fit for us, and then the valuation stars have to align. I think we are rigorous in that process. We don't feel compelled to do deals. We look for ones that make sense for us, again, based on the market, and the valuation and the timing of the opportunity. Those are the two we found this year. We continue to be hopeful that there's more. It's not something that we bake into our earnings guidance or our plan.

Okay, Great and then the one thing I'm sort of so.

As a quick follow up.

As far as the timing of investments and timing of Capex is there anything we should be thinking about there as far as whether there is a.

Whether that would be concentrated in any particular part of the year or do you anticipate that sort of being.

Sort of a consistent level as you go through 2026.

Maybe I'll start with uh reminding everyone that we did 2, small deals related to our Geographic expansion efforts. Last year, 1 in portable storage and 1 in the modular side of the business. So those are examples of the type of opportunities and transactions that are represent our Pipeline. And and now we look for I think a couple things to think about are we don't determine the timing of those the owners do. And so a lot of our pipeline or people that we keep in close contact with when they're ready to sell were their first call. Um but they may not be ready at the particular time that we're having conversations with them. And then for ones that are already, there's a process to go through Villages evaluating employees and making sure it's the right fit for us and then the valuation stars have to align. So I think we're, we are rigorous in that process, we don't feel compelled to do deals. We look for for ones that make sense for us again, basically.

Yes, Mark it's a good question and I would say generally it's likely to be front loaded. So the first couple of quarters. The spend is likely to be heavier because as you heard us describe some of the earlier Q&A whatever opportunities with the geographic expansion is building the revenue base, particularly in the.

On the market and the valuation and the timing of the opportunity. And so those are the two we found this year. We continue to be hopeful that there's more. It's not something that we bake into our earnings guidance or our plan.

Marc Riddick: Okay, great. The one thing I sort of, as a quick follow-up, as far as the timing of investments and timing of CapEx, is there anything we should be thinking about there as far as whether that would be concentrated in, to any particular part of the year, or have you anticipated that sort of being, a consistent level as you go through 2025, 2026?

The second half so capital will generally be flowing earlier in the year and then youre going to see that if all goes according to plan showing up in the revenue streams, particularly in the second half.

Great. Thank you very much.

Okay great. And then the 1 thing I sort of um it's a quick follow-up uh as far as the the timing of Investments and timing of capex, is there anything we should be thinking about there as far as whether there's a whether there would be concentrated in to any particular part of the year or if you anticipate that sort of being a sort of a consistent level as you go through 2026?

Keith Pratt: Yeah, Marc, it's a good question. I would say generally it's likely to be front-loaded, so the first couple of quarters, the spend is likely to be heavier because, as you heard us describe in some of the earlier, Q&A, one of our opportunities with the geographic expansion is building the revenue base, particularly in the second half. Capital will generally be flowing earlier in the year, and then you're going to see that, if all goes according to plan, showing up in the revenue streams, particularly in the second half.

Thank you.

Ladies and gentlemen that appears to be the last question. Let me now turn the call back over to Mr. Hannah for any closing remarks.

Yeah.

Thank you Stephanie now Phil how about a few finished the closing remarks.

Yeah.

It would be my pleasure on behalf of Joe and Keith and the entire team here at Mcgrath I'd like to thank everyone for joining us on the call today and for your continuing interest in our company. We look forward to speaking with you again in late April to review, our first quarter results.

Yeah, Mark, it's a good question. I would say generally, it's likely to be front-loaded. So the first couple of quarters the span is like to be heavier. Because as you heard us described in some of the earlier, uh, Q&A 1 of our opportunities, with the geographic expansion is building the revenue base particularly in the second half. So Capital will generally be flowing earlier in the year and then you're going to see that, uh, if all goes according to plan, showing up in the revenue streams, particularly in the second half,

Phil Hawkins: Great. Thank you very much.

Great, thank you very much.

Keith Pratt: Thank you.

Thank you.

Operator: Ladies and gentlemen, that appears to be the last question. Let me now turn the call back over to Mr. Hanna for any closing remarks.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Ladies and gentlemen, that appears to be the last question. Let me now turn the call back over to Mr. Hanna for any closing remarks.

Joe Hanna: Thank you, Stephanie. Now, Phil, how about if you finish the closing remarks?

Thank you, Stephanie.

Now Phil, how about a few finish, the closing remarks?

Phil Hawkins: It would be my pleasure. On behalf of Joe and Keith and the entire team here at McGrath, I'd like to thank everyone for joining us on the call today and for your continuing interest in our company. We look forward to speaking with you again in late April to review our Q1 results.

Uh huh.

[music].

I'd be.

Yeah.

Hum.

You would be my pleasure on behalf of Joe and Keith and the entire team here of the graph. I'd like to thank everyone for joining us on the call today, and for your continuing interest, in our company, we look forward to speaking with you again, in late, April to review our first quarter results,

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect

Q4 2025 McGrath RentCorp Earnings Call

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