Herc (HRI) 16th Annual Wells Fargo Industrials & Materials Conference summary

Company overview and recent developments

• Operates in a highly fragmented $90 billion North American market with 600 locations and nearly 10,000 employees.

• Achieved 30% growth in fleet, locations, and salesforce through the H&E Equipment Services acquisition, adding 162 locations and 2,500 team members.

• Completed integration of H&E by end of Q1, establishing a larger foundation for future growth.

• Focuses on disciplined capital allocation, ongoing dividend payments, and technology investments.

Strategic initiatives and specialty business

• Expanded core business and specialty offerings, now with over 200 specialty locations, including power, pump, climate, trench, and industrial tool segments.

• Specialty business declined from 20% to 16% of fleet post-acquisition but is being rebuilt, with significant room for further scaling.

• Power segment, especially diesel and battery, is a key growth area due to AI and manufacturing demand.

• Specialty rental penetration remains low, presenting ongoing opportunities.

Industry trends and performance

• Industry-wide fleet discipline and optimization have tightened time utilization, driving higher dollar utilization.

• Self-help initiatives and synergy realization from H&E integration are expected to drive positive growth from Q2 onward.

• Pricing improvements are linked to local market resurgence, with current environment described as muted.

• Mega projects, especially in power and specialty, are driving demand for specific equipment types.