Retail sales off to a good start in 2023?
If you have read the latest PLASTICS Size and Impact report, chances are you’ve learned that 89% of plastic products ended up in the personal consumption column. Given that two-thirds of the U.S. gross domestic product (GDP) is personal consumption expenditures, strong consumer spending data are greeted with optimism in the plastics industry. According to the advanced retail sales estimates by the U.S. Census Bureau for January of 2023, U.S. retail sales rose by 3.0% from December and 6.4% from a year earlier. Retail sales in all business categories, except for gasoline stations which had zero growth, increased in January. Department store sales increased the most by 17.5% followed by food services and drinking locales which rose by 7.2%. The strong increased sales in these business categories including motor vehicle and parts dealers, furniture stores, and electronics and appliances stores, could increase plastics shipments as inventories are replenished. This, however, hinges on the retailer’s inventories-to-sales ratio. The retailers’ amount of inventory relative to the number of sales was 1.26 in December, according to the U.S. Census Bureau. While this ratio has been increasing throughout 2022, prior to the COVID-19 recession it stayed above 1.40. Some factors to consider Monthly data tend to be noisy or have high variability—not an indication of a trend. U.S. retail sales estimates are reported in nominal terms or without adjusting for inflation. The Consumer Price Index was up 0.5% in January. Headline inflation was 6.4% in January – negligibly lower from 6.5% in December. In real terms, or adjusted for inflation, the retail sales growth in January is lower than the nominal estimates. One possible implication of robust consumer spending during an inflationary environment is higher consumer debt. Consumer loans consisting of credit cards and other revolving credit at all commercial banks rose $14.7 billion in January from December. It was a 16.8% increase from a year earlier. Debt-driven growth has limits and could be problematic during an economic slowdown. A weaker labor market, although not a current issue but likely during a low-growth economic environment, could generate higher unemployment rates and negatively affect household personal income. Cautiously optimistic If the economy continues to stay strong, and consumers remain engaged, plastic product shipments could increase as plastics and plastic products are part of household consumption. However, with the U.S. economic outlook continuing to evolve, a single data point does not reflect an underlying growth momentum in the economy. The U.S. economy is adjusting from a robust 5.9% post-COVID-19 growth rate in 2021 to long-run sustainable growth. The likelihood that the U.S. will grow below 2022’s 2.1% GDP growth remains. The First Quarter 2023 Survey of Professional Forecasters of the Federal Reserve Bank of Philadelphia shares this view.
Hamilton introduces new U-Grooved Industrial Track Wheels
The new U-Grooved track wheels are ideal when working in applications with crane cables, pulleys, rolling gates, and doors In Hamilton’s latest line of new industrial wheels, U-Grooved Track Wheels are designed for easy rolling along straight or curvy tracks or pipes. With a capacity range of 1000 – 7000 lbs., U-Groove Wheels are a great solution when working with crane cables or pulleys, or using rolling gates and doors. They’re also common in food services, washdown, and other industries where tubed tracks are commonplace. “We saw a large volume of Hamilton customers special ordering our U-Grooved industrial track wheels so we decided to add them to our everyday product offering,” said Mark Lippert, President of Hamilton Caster. “We will now manufacture the wheels more efficiently and shorten their lead time, providing a big win for our customers.” Hamilton engineers designed this track wheel with flexibility in mind. The new U-Grooved Track Wheels come in standard sizes ranging from 4 to 10-inch diameters in three materials: steel, stainless steel, and nylon. This series of wheels offer a variety of groove depths and widths that accommodate a wide range of pipe sizes and track materials. Each wheel is fitted with precision-sealed ball bearings for easy rolling and maintenance-free operation. Hamilton’s Steel U-Grooved Wheels, machined from 1045 steel, are the strongest, most durable of the series, and provides the highest load-bearing capacity. The Stainless Steel U-Grooves are machined from Type 303 stainless steel. This makes them ideal for harsh, corrosive environments such as chemical and food processing plants, and pharmaceutical operations. Hamilton’s Nylast® U-Groove wheels are made from solid cast high-performance nylon, specially formulated with finely divided particles of molybdenum disulfide (MoS2) to enhance its load-bearing capability while maintaining impact resistance. The U-Grooved Nylast® Wheel is resistant to moisture and chemicals while providing necessary floor protection. This results in an industrial wheel well-suited for corrosive environments or applications where sanitary conditions are important. Optional accessories include custom machined bores with keyway and/or set screws, as well as slick poly or rubber-coated treads. Hamilton can also machine custom sizes up to 25-inch diameters and other materials to match your exact specs. Should a size or configuration not be a standard, Hamilton will always custom design and build what is needed.
AAR Reports Rail Traffic for the week ending February 18, 2023
The Association of American Railroads (AAR) has reported U.S. rail traffic for the week ending February 18, 2023. For this week, total U.S. weekly rail traffic was 466,932 carloads and intermodal units, down 6.5 percent compared with the same week last year. Total carloads for the week ending February 18 were 229,227 carloads, down 3.9 percent compared with the same week in 2022, while U.S. weekly intermodal volume was 237,705 containers and trailers, down 8.8 percent compared to 2022. Four of the 10 carload commodity groups posted an increase compared with the same week in 2022. They included motor vehicles and parts, up 1,396 carloads, to 13,664; petroleum and petroleum products, up 1,378 carloads, to 10,630; and farm products excl. grain, and food, up 940 carloads, to 17,132. Commodity groups that posted decreases compared with the same week in 2022 included coal, down 6,178 carloads, to 66,566; grain, down 3,118 carloads, to 21,864; and miscellaneous carloads, down 1,419 carloads, to 7,843. For the first seven weeks of 2023, U.S. railroads reported a cumulative volume of 1,603,005 carloads, up 0.3 percent from the same point last year; and 1,631,109 intermodal units, down 7.8 percent from last year. Total combined U.S. traffic for the first seven weeks of 2023 was 3,234,114 carloads and intermodal units, a decrease of 4.0 percent compared to last year. North American rail volume for the week ending February 18, 2023, on 12 reporting U.S., Canadian, and Mexican railroads totaled 335,772 carloads, up 0.3 percent compared with the same week last year, and 313,084 intermodal units, down 8.3 percent compared with last year. Total combined weekly rail traffic in North America was 648,856 carloads and intermodal units, down 4.0 percent. North American rail volume for the first seven weeks of 2023 was 4,461,274 carloads and intermodal units, down 2.2 percent compared with 2022. Canadian railroads reported 82,527 carloads for the week, up 11.1 percent, and 59,995 intermodal units, down 6.9 percent compared with the same week in 2022. For the first seven weeks of 2023, Canadian railroads reported a cumulative rail traffic volume of 976,106 carloads, containers, and trailers, up 4.7 percent. Mexican railroads reported 24,018 carloads for the week, up 10.2 percent compared with the same week last year, and 15,384 intermodal units, down 5.8 percent. Cumulative volume on Mexican railroads for the first seven weeks of 2023 was 251,054 carloads and intermodal containers and trailers, down 3.2 percent from the same point last year. To view the weekly traffic charts, click here.
H&E Equipment Services reports Fourth Quarter and Full Year 2022 results
H&E Equipment Services, Inc. has announced results for the fourth quarter and full year that ended December 31, 2022, bringing to close a year of record financial performance and significant expansion. On October 1, 2021, the Company sold its crane business, (the “Crane Sale”). All results and comparisons for the periods reported are presented on a continuing operations basis with the Crane Sale reported as discontinued operations in certain statements and schedules accompanying this report. Fourth Quarter 2022 summary Revenues increased 25.6% to $353.1 million compared to $281.3 million in the fourth quarter of 2021. Net income was $51.2 million compared to $21.7 million in the fourth quarter of 2021. The effective income tax rate was 26.1% compared to 25.8% in the fourth quarter of 2021. EBITDA (earnings before interest, taxes, depreciation, and amortization) increased 56.1% to $171.5 million compared to $109.9 million in the fourth quarter of 2021, resulting in a margin of 48.6% of revenues compared to 39.1% over the same period of comparison. Total equipment rental revenues were $275.7 million, an increase of $72.0 million, or 35.3%, compared to $203.7 million in the fourth quarter of 2021. Rental revenues were $245.0 million, an increase of $63.0 million, or 34.6%, compared to $182.0 million in the fourth quarter of 2021. Used equipment sales increased 2.5% to $30.2 million compared to $29.5 million in the same quarter of 2021. Margins also improved to 51.2% compared to 39.3% in the fourth quarter of 2021. New equipment sales totaled $21.5 million, a decline of 4.5% when compared to $22.5 million in the fourth quarter of 2021. Gross margin improved to 45.1% compared to 42.0% in the same quarter of 2021. Total equipment rental gross margins were 47.9% compared to 46.3% in the fourth quarter of 2021. Rental gross margins were 53.1% compared to 51.7% over the same period of comparison. Average time utilization (based on original equipment cost) was 72.0% compared to 73.1% in the fourth quarter of 2021. The Company’s rental fleet based on original acquisition cost ended 2022 at approximately $2.4 billion, representing a 26.8% increase from 2021. Average rental rates, excluding One Source, improved by 10.6% when compared to the fourth quarter of 2021 and 1.8% when compared to the third quarter of 2022. Dollar utilization improved to 41.9% compared to 39.3% in the fourth quarter of 2021. The average rental fleet age on December 31, 2022, was 43.6 months compared to an industry average age of 53.3 months. Closed the sale of the Komatsu earthmoving distribution business for proceeds of $29.2 million. A gain of $15.4 million was recognized on the sale and recorded as a $12.9 million gain on the sale of property and equipment and a $2.5 million gain on other, net. Paid regular quarterly cash dividend of $0.275 per share of common stock. Brad Barber, chief executive officer, summarized H&E’s superior performance in the fourth quarter, commenting, “Our results showed solid fleet utilization, continued gains in equipment pricing, further fleet growth, and branch expansion. In addition, figures for the quarter included the operations from One Source Equipment Rentals, Inc. (“One Source”) following the closing of our acquisition on October 1, 2022. Physical fleet utilization remained at a healthy level, averaging 72.0% despite pressure from typical seasonal factors that contributed to a decline in the measure of 110 basis points when compared to the fourth quarter of 2021 and 130 basis points on a sequential quarterly basis. Rental rates, which exclude One Source, improved by 10.6% compared to the same quarter a year ago and 1.8% on a sequential quarterly basis. Both measures remained among the best in our industry. Our fleet original equipment cost (“OEC”) closed the quarter at a record of approximately $2.4 billion, with gross capital expenditures in the quarter of $128.3 million and a record gross investment of $507.8 million for all of 2022. Finally, we opened two new branch locations in the quarter, closing the year with a total of 10 branch openings for the second consecutive year. We began 2023 with a network of 120 branches across 29 states.” Mr. Barber explained the Company’s optimism for 2023, stating, “Favorable trends have emerged in the equipment rental industry and represent a promising outlook. We expect the robust business environment to persist through the year as strong project backlogs and accelerating federally funded programs escalate spending, particularly in the non-residential and industrial end markets. We believe these positive trends are sustainable, due in part to a rise in federal programs addressing improvements in infrastructure that require extended periods to complete. In addition, we expect further growth in rental penetration to drive new demand for equipment as the combination of unfavorable fiscal conditions, including rising interest rates, and lingering delays in equipment deliverability encourage a shift by certain customers away from the ownership of equipment. These multiple catalysts for increased rental demand should maintain healthy equipment utilization and contribute to an attractive pricing environment characterized by modest sequential quarterly rate improvement.” In closing remarks, Mr. Barber described the Company’s growth objectives for 2023 and stressed the importance of a successful expansion strategy. He summed up the year by saying, “Numerous achievements in 2022, which included the completion of our transition to a pure-play rental business and 18% growth in our branch location count, have served to fortify a sound base for future operations and strategic growth. These achievements contributed to our impressive financial performance, including record revenues and margins, while adding greater scale after our expansion into new geographies and increased branch density in existing regions. We remain focused on further growth initiatives in 2023 and believe this fundamentally sound industry will continue to create opportunities. Growth initiatives for the year include further expansion of our branch network, with a revised range of 10 to 15 new locations, up from 10 new branches in each of the last two years. Also, we are targeting a gross fleet investment of $500 million to $550 million as we continue to support existing stores and the new branch locations with both a young fleet and a diversified mix of equipment lines. Finally, attractive acquisition opportunities continue to appear in our industry and an evaluation of suitable targets remains part of our
361: Flytrex at Manifest 2023
Joining The New Warehouse from Manifest 2023 is Yariv Bosch, the Co-founder, and CEO of Flytrex, a company focused on on-demand commercial drone delivery. They have five stations in North Carolina and Texas, with between 20 to 40 different restaurants available per station. Be sure to tune in to find out how drone delivery works, how it fits into the logistics space, and what Yariv thinks is the future of drone delivery. Key Takeaways Flytrex delivers hot food from restaurants to the backyards of hungry customers in North Carolina and Texas. They also have partnerships with Walmart and other retailers for groceries and retail, but their primary focus is food delivery. Delivery involves runners picking up orders at the restaurant and placing them into the drone, which hovers approximately 80 feet before dropping them off in a customer’s backyard or public spot. Yariv shares the success Flytrex has had in Holly Springs, North Carolina. After a year within the area, sixty percent of households have downloaded the app and made at least one order. Flytrex has been working with the FAA and other Civil Aviation Authorities for five years to certify their drones commercially. EP 361: Flytrex at Manifest 2023
Southworth International Group appoints Dr. Mirka Wilderer to the Board of Directors
SIGI, the parent company of several of the world’s leading manufacturers of ergonomic vertical positioning equipment, has announced the appointment of Dr. Mirka Wilderer to its board of directors. One of the top female executives in the water industry, Dr. Wilderer earned her doctorate in international business from Germany’s Carl von Ossietzky University of Oldenburg. She started her career at Siemens and has most recently served as the Chief Executive Officer of De Nora Water Technologies. She has worked across four continents leading business growth and transformation while enabling and empowering access to one of our world’s most precious resources – safe and sustainable water. “Dr. Wilderer brings a unique skill set and a fresh perspective to our growth journey,” said SIGI Board Chairman Timothy Cabot. “We will lean heavily on her experience and insights as we continue to execute our strategic plan while supporting our customers in making their employees’ work experience more productive, safer and easier.” “SIGI has an outstanding industry reputation for innovation and leadership aligned with a long-term vision and strong set of core values,” said Wilderer. “I look forward to helping them build upon this base.” The SIGI Board of Directors was recognized in 2019 as a Private Company Board of the Year by Private Company Director, Directors and Boards, and Family Business magazines.
Raymond names finalist for International Forklift of the Year
Raymond® 8910 enclosed end rider pallet truck to be tested this March at International Intralogistics and Forklift of the Year (IFOY) Test Days in Dortmund, Germany The Raymond Corporation’s 8910 end rider pallet truck has been named a finalist for an International Intralogistics and Forklift Truck of the Year (IFOY) Award, which recognizes the industry’s best intralogistics products and system solutions from around the world. Adaptability, operator comfort, and sustainability features make the 8910 pallet truck perfect for a range of tasks, especially long hauls. With intuitive, easy-to-use controls and a roomy operator compartment with enhanced ergonomics, the 8910 pallet truck is ideal for heavy-duty, high-throughput and long-haul applications. The pallet truck features ergonomically enhanced steering and a deadman pedal requiring less effort to operate, along with auto-slowdown, automatic drive-tire centering on startup, and other operator-friendly features. Equipped with power steering, the Raymond® 8910 pallet truck is a quiet and energy-efficient lift truck. Full integration with the iWAREHOUSE® Fleet and Warehouse Optimization System gives operators access to the complete portfolio of Raymond telematics, allowing easy access to critical equipment and labor performance data. “The 8910 is a highly versatile product that combines operator comfort with technology integration,” said Chad Kritzman, product manager at The Raymond Corporation. “Operators will appreciate features like auto-slowdown and the tighter turning radius, while fleet and facility managers will have access to data that can help optimize workforce, machine and facility performance.” In addition to offering a host of operator-comfort and performance features, the 8910 can be equipped for specific facilities and applications — including horizontal transport, loading and unloading, cold storage, and dock work — and is available with various fork lengths and load capacities. “We’re proud to be honored once again as a finalist for the IFOY Award,” said Michael Field, president and CEO, of The Raymond Corporation. “The 8910 is the product of Raymond’s 100-year history of innovation and our commitment to designing equipment that helps customers optimize their distribution and warehousing operations and that enables an unmatched level of productivity.” The IFOY Award honors the best industrial lift trucks and intralogistics solutions of the year as selected by a jury of leading international logistics media. Test days are held in Dortmund, Germany, in mid-March, when IFOY experts test all the nominated products. Test parameters include productivity, energy efficiency, safety, ergonomics, and design. For more information surrounding the IFOY Test Days, visit https://www.ifoy.org/en/.
AAR statement on DOT Rail Safety announcement
AAR President and CEO Ian Jefferies issued the following statement in response to the U.S. Department of Transportation’s Tuesday release calling for specific rail safety and operational measures in response to the recent East Palestine, Ohio accident. “No community should ever face the events of February 3rd. This is why railroads are steadfastly committed to solutions-oriented steps that directly address the cause of the accident and could prevent a similar accident from occurring elsewhere. “The NTSB’s independent investigators continue their work to identify the accident’s root cause and contributing factors. That investigation must continue unimpeded by politics and speculation so NTSB’s findings can guide what additional measures may have prevented this accident. “All stakeholders – railroads along with federal, state, and local officials – must work to restore the public’s trust in the safety and security of our communities. We can only do that by letting the facts drive the post-accident response. At this time, the focus must be on the most pressing issue at hand – ensuring the community of East Palestine has all the support they need as it moves forward.”
Competition for talent
As you are reading this month’s edition, many of you are most likely planning to attend ProMat 2023 at the end of the month. I know I am eagerly looking forward to catching up with industry colleagues, suppliers, OEMs, and distributors. It is my assumption that attendance will be at record levels as was with MODEX 2022 where that show saw a 20% increase in attendance to its 2018 show. I know attendees will be looking forward to seeing the latest technologies in the material handling and supply chain industry, including automation, robotics, and artificial intelligence. As labor shortage continues to be a trend with our industry’s target customers such as warehouses, fulfillment centers, etc., these warehousing companies are looking to automation, robotics, and artificial intelligence to not only attract and retain a younger generation but also to fill the voids of said shortage of labor in warehousing facilities. Now you are thinking, okay, we know this, ‘So what does this have to do with your Aftermarket column topic, Chris?’ Well, the labor shortage is not only affecting your customers and prospective customers’ facilities, it has been a hot topic within dealerships and continues to remain as such. The competition for talent is no longer just a topic about your service technician workforce. In addition to service technicians, the competition for parts professionals, sales staff, office personnel, and management continues to be fierce. As an MHEDA business trend for 2023 states: ‘Members are competing for talent across industries and must be aware of current compensation levels, benefits, and flexible working opportunities in order to address recruitment and retention challenges.’ The ability to attract, recruit, and retain talent will have an impact on the success of your entire operation. Many dealers that have been on the growth trajectory the past few years often share with me the same conundrum; their service growth is still limited by the lack of technicians available to hire within the industry. The math is simple; you cannot increase your service revenue if you are unable to increase your service capacity to attract new customers and get more equipment signed up for service agreements if you are not staffed with an adequate amount of service technicians. As many of the Baby Boomer generation of skilled technicians retiring from the workforce, dealers and independent service providers continue to face a shortage of technicians and they will have to continue to find ways to attract the younger generation to this profession. Our industry has recognized this trend for several years now, in fact, a while back MHEDA partnered with the Manufacturing Skill Standards Council (MSSC) to create the Certified Forklift Technician (CFT) program. I believe this will continue to aid in the effort to close the gap on the shortage of technicians in our industry. I also think the younger generations (Millennials and Gen Z) have not been exposed to this profession or skill set when they were in high school, as previous generations were, with courses such as automotive class. If high school students are not exposed to skilled trades, such as being a technician in high school, how are they going to know that this career path exists when they graduate? Furthermore, with this skilled trade being in such high demand, how can we educate the students that may be interested knowing that there is a career path waiting for them that does not require years and years of college, not to mention the skyrocketing tuition costs that come with going to college? I firmly believe high schools should get back to having these courses as an option for students to explore this career path, rather than just solely deploying a ‘one-size fits all’ mentality of only preparing these students for college. The competition for the existing pool of skilled service technicians remains fierce in our industry. Increased compensation levels as a tactic to recruit and attract service technicians lead to increased service labor rates that are then passed on to the end customer; which in turn can also have an impact on your profitability depending on what your market can tolerate for service labor rates. A department within dealerships that is near and dear to me in my current role is the Parts Department. I continue to hear from dealers that they are also having trouble filling the labor gap in finding experienced parts professionals. Parts Departments are also seeing their older, experienced and skilled generation of parts professionals retire from the workforce. The talent pool of parts professionals within our industry that are equipped with an established knowledge of ITA truck and carriage classifications, most common parts, understand the various model and serial numbers for major OEMs, and have part numbers memorized in their heads, is shrinking as well. In addition to having technical parts knowledge and experience, successful parts professionals have strong customer service and sales skills with abilities to work effectively and efficiently over the phone, by email and at the parts counter. Dealers will need to continue to invest in their training efforts to develop the next generation of skilled parts professionals, while also investing in technologies that make the research or lookup of parts easier, managing inventory more efficiently, and the transaction of a parts sale seamless. Technologies such as an intuitive ERP business system and the ability to for online parts sales (e-commerce) will also help close the labor gap within the parts departments, allowing your skilled parts professionals to work more effectively and profitably. At a recent industry event, a presenter said the following that resonated as it relates to the Parts Department, “Your customer will wait for a part; however, they will not wait for a response.” As you are looking to recruit, attract, and retain talent within your operation, I feel that is a very important concept to consider when you hire and train your staff and invest in technologies to optimize your operations. I look forward to expanding on this topic in future articles. About
A Winner or a Loser?
I spend hours on a daily basis reading and listening to information regarding the equipment industries, rental industries, and the economy in general. Summing up all that has transpired and presented to me by various sources since the beginning of the year have provided me with enough to write a book about. But don’t worry, we will cover the major points in this month’s contribution to MHW. I decided on the Winner/Looser title after attending an online seminar presented by Nomi Prins via Rouge Economics. I really enjoy her almost daily emails and find them quite useful. In an event, Nomi started the presentation by stating that every time Congress passes a major spending bill both private and public companies will EITHER fall on the “WINNER” side or the “LOSER” side because of the changes in our laws or plans contained in the spending bill. Kind of makes sense. Nomi then went through a few examples, and it even made more sense. For example. As EV products increase the demand for the materials to produce batteries increases as do the prices for these materials. WINNER – Mining companies as well as EV parts suppliers. LOOSER- Car or vehicle manufacturers will have to increase the price of their products as well as lose future parts and service business. I also read an article in the European rental magazine and find that OEMs in Europe are selling more and more products direct to rental companies and end users. In another publication, I see that the demand for EV products is in high demand. Selling direct means dealers are being transformed into service providers, who are going to lose work because EVs require less maintenance and are made up of fewer parts. What do dealers do with their current fleets and how will the valuation of those units impact dealer sustainability and solvency? Another comment in the EU publication noted that there is a buying frenzy in terms of OEMs. If this takes place you have to believe that the consolidation of dealers is close behind. You get the drift…..The demand and requirements of conversion to EV are creating both “WINNERS AND LOSERS”, which can generate benefits if dealers plan to put themselves on the W side. Dealers with access to capital can do this. Hedge funds will jump on the bandwagon to assist as they have been with related industries. This consolidation may already be in the works. I work in Chicago and in the rental business and within the last five years the major public rental companies have bought out privately owned dealers and rental companies to the point where there are only a couple of independent rental companies in the market. As they say on TV….”What’s in your wallet? Some good news on the manufacturing front. The growth of annual reshoring and foreign direct job announcements increased from 6000/year in 2010 to 350,000 /year in 2022. Who will be the W or L regarding this change? All I know is after seeing the internal operation of the Tesla plant in Texas I did not see a lot of people or lift trucks moving materials through the process. Robots were doing most of the work. How will your company plan for this opportunity? Material handling dealers benefited from the expansion of distribution centers to bring completed products closer to end users. Do your products and services supplied on the distribution side carry over to the manufacturing side? Are OEMs addressing this opportunity to help you understand this new revised market? You have to assume that EVs will be a big part of the manufacturing question as well. I also listened in to the Davos meeting last week. They had Jamie Dimon from JP Morgan Chase on and asked him about his comments regarding a recession in the offing. He replied, “As CEO of JP Morgan Chase I have a responsibility to plan for any and every event they can think of”. A recession. Expansion. Interest rates. Inflation. Deflation. The length of the rate hikes. China coming back into the world economy. Energy costs. Customer exposure and so on. In short, do not stick to one program without having an “out” if you need it. Dimon said they are reviewing their risks three years out. Speaking of China, what happens this year in China will impact the war on inflation and the number of rate hikes. If China’s consumption rebounds, it could drive prices considerably higher. And the L could be manufacturers and distributors who find another round of price hikes to deal with. So where do material handling dealers fit into this crazy economic maze? Probably on the W side in some cases and the L side in terms of EV and solvency issues. What you can probably count on is the inflation battle will be longer with interest rates higher for some time, especially if China steps up economic activity. As part of your thought process, I would get a handle on what your company is worth. What you can do to improve that value. How you can blend in with the EV dynamo. How you can add value to current customers. How you can add value and provide needed services to manufacturers. And one last off-the-wall consideration is whether you have any children interested in the material handling business. I ask about the children because I work on a number of M&A projects and find that a well-run profitable business isn’t being passed down to the next generation. When I ask “why?”, I am told they are not interested. Unfortunately, I find this to be the case 80% of the time. Drives me nuts. A lot to think about. …..and plan for. About the Columnist: Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail [email protected] to contact Garry.
New Industrial Manufacturing planned projects drop 36% in January 2023 from previous month
IMI SalesLeads announced the January 2023 results for the newly planned capital project spending report for the Industrial Manufacturing industry. The Firm tracks North American planned industrial capital project activity; including facility expansions, new plant construction, and significant equipment modernization projects. Research confirms 130 new projects in January as compared to 177 in December 2022 in the Industrial Manufacturing sector. The following are selected highlights on new Industrial Manufacturing industry construction news. Industrial Manufacturing – By Project Type Manufacturing/Production Facilities – 111 New Projects Distribution and Industrial Warehouse – 69 New Projects Industrial Manufacturing – By Project Scope/Activity New Construction – 36 New Projects Expansion – 51 New Projects Renovations/Equipment Upgrades – 53 New Projects Plant Closings – 13 New Projects Industrial Manufacturing – By Project Location (Top 10 States) Georgia – 10 New York – 14 Indiana – 8 Texas – 8 Wisconsin – 8 California – 7 Florida – 7 Michigan – 7 Alabama – 6 South Carolina – 6 Largest Planned Project During the month of January, our research team identified 14 new Industrial Manufacturing facility construction projects with an estimated value of $100 million or more. The largest project is owned by General Motors, who is planning to invest $795 million for the renovation and equipment upgrades on their manufacturing facilities in FLINT, MI, and BAY CITY, MI. They are currently seeking approval for the project. Top 10 Tracked Industrial Manufacturing Projects TEXAS: EV mfr. is planning to invest $770 million for the expansion of their manufacturing facility in AUSTIN, TX by 1.4 million sf. Construction will occur in four phases, with the completion of the first phase slated for early 2024. WEST VIRGINIA: An energy storage technology company is planning to invest $760 million in the construction of a battery manufacturing facility in WEIRTON, WV. They are currently seeking approval for the project. Completion is slated for 2024. NUNAVUT: A mining company is planning to invest $483 million in the construction of a processing facility in KITIKMEOT, NU. Construction is expected to begin in 2023, with completion slated for 2025. NORTH CAROLINA: A pharmaceutical company is planning to invest $450 million for the expansion of its processing facility in DURHAM, NC. They are currently seeking approval for the project. Completion is slated for 2027. GEORGIA: A specialty contractor is planning to invest $420 million in the construction of a manufacturing facility in LOCUST GROVE, GA. They are currently seeking approval for the project. Completion is slated for 2025. TENNESSEE: Automotive mfr. is planning to invest $250 million for the expansion of its manufacturing facility in DECHERD, TN. They are currently seeking approval for the project. KENTUCKY: Steel products mfr. is planning to invest $244 million for the expansion, renovation, and equipment upgrades on their manufacturing facility in GHENT, KY. They are currently seeking approval for the project. GEORGIA: Automotive component mfr. is planning to invest $205 million for the construction of a manufacturing facility at 4822 Hwy 301 S. in STATESBORO, GA. They have recently received approval for the project. Completion is slated for Fall 2024. TENNESSEE: Tire mfr. is planning to invest $174 million for a 600,000 SF expansion and equipment upgrades at their manufacturing and distribution facility in DAYTON, TN. They have recently received approval for the project. INDIANA: Material handling equipment mfr. is planning to invest $130 million for the construction of a manufacturing and office facility in NOBLESVILLE, IN. They have recently received approval for the project. They will relocate their headquarter operations upon completion. About the Author: Since 1959, IMI SalesLeads, based out of Jacksonville, FL has been providing Industrial Project Reports on companies that are planning significant capital investments in their industrial facilities throughout North America. Our professional research team identifies new construction, expansion, relocation, major renovation, equipment upgrades, and plant closing project opportunities so that our clients can focus sales and marketing resources on the target accounts that have an impending need for their products, services, and indirect materials.
Top-down selling!
What does the Guggenheim Museum (a classic modern art museum in NYC housed in a building designed by Frank Lloyd Wright) have in common with sales success? They recommend that you start at the top. The building is one big circular ramp. You take an elevator to the top floor and casually walk down eight inspiring floors. It’s the same in sales. Why start at the bottom and fight your way up through people who can’t decide, and who’ll use their one ounce of power to make your life miserable? Take the elevator and start at the top, man. Don’t walk uphill! Where do you start? How high up the ladder do you dare go when making an initial approach to a prospect? The rule is…The higher you start, the more success you’re likely to meet. Getting there properly can be tricky. If you just ask for the president, the owner, the boss, or the fearless leader, you may get through, but it will pay you to prepare before making a call to the CEO, especially if the prospect represents an important sale to you. Here is a four-step plan for contacting and scoring a CEO appointment: Get ready before you start. You only have one shot at it, make it your best one Have a written game plan. Target 1 to 10 companies and define in writing what you want to accomplish and what it will take to get what you want. Be totally prepared to sell before you make the call. Have everything (sales pitch, concept, samples, daily planner) prepared, and in front of you before you make the first call. Identify the leader (by name) and get as much information and as many characteristics as you can. Make calls to underlings, associates and associations to get pertinent information before you make the big call. Use the right tactics when getting to and getting through ASK FOR HELP. If you get the president’s secretary, get her name and use it. Be polite, but firm. Be professional. Persist you can’t take the first no or rebuff. Get his name You can try “how do you spell his last name?” but it’s embarrassing to hear JONES. If they won’t put you through the first time… Get his extension number Get the best time to call Find out when he usually arrives Find out when he takes lunch Find out who sets his calendar Find out if he leaves the building at lunch Find out when he leaves for the day An example: You call; the secretary says, “Mr. Jones is on vacation.” You say, “Wow, that’s great, Sally, where did he go?” Get anything personal you can (golf, sales meeting time, staff meeting time, important new product) and refer to it subtly when you get him or her on the phone. Make sure the person closest to the boss likes you. Take a chance on humor. Try this line: I know you actually run the company, but could I speak to the person who thinks they do? When you get him or her on the phone, shoot quickly Have your opening line. Get right to the point. Make it compelling (the best Power Question and statement of your life). Ask for no more than 5 minutes (offer to be thrown out if you go past 5). Have 5 comebacks if you are initially rebuffed. Notes about the CEO and the process… CEOs are hard to get to, harder to appoint, and easiest to sell. If the CEO is interested, he or she will take you by the hand and introduce you to the team member (underling) who will actually do the deal. The CEO always knows where to send you to get the job done. If they try to pawn you off without seeing you, it means you have not delivered a powerful enough message and he’s not interested. The solution? Fix it. Keep trying until you get an appointment. If you start lower than the top, there is danger. No matter how powerful someone says they are or appears to be, they usually have to ask someone else for final approval EXCEPT THE CEO. They usually just ask their secretary or administrative assistant if they liked you. Get the picture? The benefits are obvious… The leader is always the decider. The CEO may not be directly involved in purchasing what you’re selling, but his or her introduction after a brief “interest generating” meeting can be the difference between the sale and no sale. The power of being introduced by the CEO down to the decision-maker is as real as you would hope it is. Beware of the handoff: If the boss tries to hand you off too early (before the proposed five-minute meeting), don’t accept it. Say “I appreciate your wanting to delegate, but the reason I wanted to meet with you personally is that this will impact your business significantly. I’d like five minutes to show you the highlights and get your reaction before I talk with anyone else in your firm. I know your time is valuable if I take more than 5 minutes, you can throw me out.” Make your five-minute meeting the best you ever had Have a proposal in writing. Have notes on everything you want to cover. Have a list of anticipated questions and answers. Have samples or something to demonstrate. Have credibility builders your best letter, something in print. Be early. Look as sharp as you’ve ever looked. Be knowledgeable and have answers in terms of how it works for the buyer. Be memorable. The thing that sets you apart, the thing that gets remembered is the thing that leads to the sale. Deliver You have one chance. Don’t blow it by not following through. It’s the most challenging, rewarding fun you can have in sales! The secret of Top-Down Selling is the 4.5 R’s… Be resourceful Be ready (prepared) Be relentless Be remembered There is a 4.5 “R” Risk it.
360: Logistics Innovation with Pitney Bowes
Live from Manifest 2023 in the Pitney Bowes booth, The New warehouse was pleased to interview Stephanie Cannon, Senior Vice President of Operations Excellence and Collaborative Innovation. Pitney Bowes is a global technology company that provides innovative solutions to businesses worldwide. Their services include shipping, mailing, data management, e-commerce, and financial services. Stephanie discusses Robots as a Service (RaaS), autonomous transportation, and the collaborative innovation program with robotics companies like Plus One Robotics and Ambi Robotics. Key Takeaways The Collaborative Innovation Program from Pitney Bowes works with emerging tech companies to create solutions for eCommerce problems such as monotonous jobs, high turnover, and lack of data. The collaborative approach versus integrator works together to solve the problem, build the product roadmap, and deploy technology rapidly when needed. This approach allows for the rapid deployment of technology when needed while preserving cash and capital. Stephanie believes Collaboration with hourly employees to develop solutions has been critical in adopting new technology. Gaining feedback from employees on the floor allows them to feel their opinions are taken into account and creates a career path for robot operators. Regarding autonomous vehicles for logistics, Stephanie believes the middle mile is the most attractive due to only going a specific mileage per day and the repeatable route. She adds that Pitney Bowes is investing a lot of time and energy in efforts to automate transportation. EP 360: Logistics Innovation with Pitney Bowes
Cat® Lift Trucks continues its legacy as Official Lift Truck Provider for the Houston Livestock Show and Rodeo™
Mitsubishi Logisnext Americas, the exclusive manufacturer, and provider of Cat® lift trucks across North, Central, and South America, announced that Cat Lift Trucks will return as the Official Lift Truck Provider for the 2023 Houston Livestock Show and Rodeo™. For 19 consecutive years, Cat Lift Trucks and its local dealer Darr Equipment Co, have played a critical role in the production of the largest livestock exhibition and rodeo in the world. The Houston Livestock Show and Rodeo is a beloved tradition for over 2.5 million visitors and 30,000 exhibitors each year, showcasing the very best in agriculture, entertainment, and western heritage. As the official lift truck provider, Cat Lift Trucks and Darr Equipment Company will provide top-of-the-line equipment and experienced technicians to ensure a smooth and safe operation at the Houston Livestock Show and Rodeo. This year, Cat Lift Trucks has committed to providing over 140 forklifts to keep the show running smoothly, from setup to tear down throughout the 300-acre complex. “The Houston Livestock Show and Rodeo is proud to have Cat Lift Trucks as our official lift truck provider,” said Dr. Chris Boleman, president and CEO of Houston Livestock Show and Rodeo. “Their commitment to excellence and support of our event makes them a valuable partner and we look forward to continuing our long-standing relationship for many years to come.” “We are honored to continue our partnership with the Houston Livestock Show and Rodeo and help keep the annual Houston tradition moving,” said John Sneddon, executive vice president of Sales and Marketing at Mitsubishi Logisnext Americas. “Our commitment to providing top-quality equipment, exceptional service and educational opportunities aligns with the values of the Houston Livestock Show and Rodeo, making this partnership a natural fit.” Cat Lift Trucks also provides a scholarship program to invest in the future generation of leaders and innovators. Each year, the scholarship program honors an outstanding Houston-area high-school senior interested in pursuing a four-year degree related to the material handling industry. This year’s winner will be honored at the 2023 Houston Livestock Show and Rodeo™ and awarded a $5,000 scholarship to go towards their higher education. Since its launch in 2005, the Cat Lift Trucks scholarship program has awarded $135,000 in educational assistance to 27 Houston-area students. The 2023 Houston Livestock Show and Rodeo will begin Tuesday, Feb. 28, and run through Sunday, March 19, 2023.
The future of supply chains is within your grasp
With over 900 of the world’s leading manufacturing and supply chain solution providers under one roof, you can see firsthand what the future holds – and find the tools you need to shockproof your operations and move your business forward. From hands-on demonstrations to 150 educational seminars and four exciting keynote speeches, attending ProMat is your unrivaled opportunity in 2023 to find solutions, connect with your peers and leading solution providers and learn the latest trends and technologies that can help you touch the future of supply chain success. WHY ATTEND PROMAT 2023? Discover new ways to reduce operating costs & increase efficiency Find ideas for streamlining and automating your operations Build strong business relationships with your peers and suppliers from around the world See the latest equipment and tech solutions, in person, in-action Participate in thought-provoking keynotes and more than 150 educational seminars on emerging trends and technologies 2023 SHOW HOURS Monday | March 20, 10:00 AM – 5:00 PM Tuesday | March 21, 10:00 AM – 5:00 PM Wednesday | March 22, 10:00 AM – 5:00 PM Thursday | March 23, 10:00 AM – 3:00 PM make new contacts. discover cutting-edge solutions. take advantage of the latest trends As the speed of manufacturing and logistics operations continues to accelerate, your company’s future success depends on today’s forward-thinking decisions. On March 20-23, supply chain professionals from across the world will have an incredible opportunity to connect, learn, share and get a front-row seat to where our world is headed. So whatever solutions you need to move your business – and your career – forward, you’ll find them all at ProMat 2023. FIND YOUR NEXT BIG IDEA AT THE STARTUP PAVILION The StartUp Pavilion is a specialized area on the ProMat show floor where companies showcase emerging supply chain tech and innovation. IN-PERSON EXPERIENCES, OUTSTANDING RESULTS There’s no substitute for meeting face-to-face and watching equipment and technology operate in real-time. ProMat 2023 gives you the chance to do both. ProMat brings the manufacturing and supply chain industry’s most influential thought leaders and next-generation solutions together under one roof to create the ideal environment for learning, networking, and problem-solving. SET YOURSELF UP FOR FUTURE SUCCESS The future of the manufacturing and supply chain industry starts at ProMat. It’s where the brightest minds in the industry come together. In an industry that’s constantly evolving, you have to stay ahead of the curve, which is why ProMat brings together all the products, services, and know-how you need to compete in the world we now live in. NO RISK, PLENTY OF REWARDS In addition to free attendance, ProMat 2023 offers all the resources you need to get your management’s approval to come to Chicago in March. Visit promatshow.com/approval to find proposal writing tips and budgeting strategies. After all, the connections, education, and solution-sourcing at ProMat could positively impact your business for years to come. EXPLORE GLOBAL OPPORTUNITIES ProMat is an international event with manufacturing and supply chain professionals attending from the United States and across the globe. To accommodate our international visitors, we offer special interpreting services, meeting rooms, and matchmaking tools to help you take full advantage of the global economy. UNSURPASSED EDUCATIONAL OPPORTUNITIES ProMat gives you a preview of what lies ahead in the manufacturing and supply chain industries. Whether it’s a new product or technology, a new process, ESG, or a regulation that’s going to impact the way you do business, you’ll learn about it here. With a comprehensive educational program of keynotes and show floor educational seminars led by industry experts and leading authorities, ProMat 2023 offers you the insight and information you need to tackle today’s challenges – and prepare for what the future holds.
AAR Reports Rail Traffic for the week ending February 11, 2023
The Association of American Railroads (AAR) has reported U.S. rail traffic for the week ending February 11, 2023. For this week, total U.S. weekly rail traffic was 473,972 carloads and intermodal units, down 6.2 percent compared with the same week last year. Total carloads for the week ending February 11 were 233,382 carloads, down 1.6 percent compared with the same week in 2022, while U.S. weekly intermodal volume was 240,590 containers and trailers, down 10.2 percent compared to 2022. Four of the 10 carload commodity groups posted an increase compared with the same week in 2022. They included nonmetallic minerals, up 1,963 carloads, to 30,253; petroleum and petroleum products, up 987 carloads, to 10,662; and farm products excl. grain, and food, up 510 carloads, to 17,330. Commodity groups that posted decreases compared with the same week in 2022 included grain, down 3,173 carloads, to 21,241; chemicals, down 2,015 carloads, to 32,667; and forest products, down 966 carloads, to 9,369. For the first six weeks of 2023, U.S. railroads reported a cumulative volume of 1,373,778 carloads, up 1 percent from the same point last year; and 1,393,404 intermodal units, down 7.7 percent from last year. Total combined U.S. traffic for the first six weeks of 2023 was 2,767,182 carloads and intermodal units, a decrease of 3.6 percent compared to last year. North American rail volume for the week ending February 11, 2023, on 12 reporting U.S., Canadian, and Mexican railroads totaled 335,732 carloads, up 1.4 percent compared with the same week last year, and 316,515 intermodal units, down 9.8 percent compared with last year. Total combined weekly rail traffic in North America was 652,247 carloads and intermodal units, down 4.3 percent. North American rail volume for the first six weeks of 2023 was 3,812,418 carloads and intermodal units, down 1.8 percent compared with 2022. Canadian railroads reported 80,828 carloads for the week, up 10.5 percent, and 59,672 intermodal units, down 11.4 percent compared with the same week in 2022. For the first six weeks of 2023, Canadian railroads reported a cumulative rail traffic volume of 833,584 carloads, containers, and trailers, up 5.1 percent. Mexican railroads reported 21,522 carloads for the week, up 4.9 percent compared with the same week last year, and 16,253 intermodal units, up 4.5 percent. Cumulative volume on Mexican railroads for the first six weeks of 2023 was 211,652 carloads and intermodal containers and trailers, down 4.3 percent from the same point last year. To view the weekly traffic charts, click here.
Report: Women’s representation in staffing leadership grew in 2022
42% of CEO/Owners in Staffing Are Women vs. 8.8% in Fortune 500 Companies The percentage of women who serve as chief executive officers and owners in the staffing industry more than doubled from 2020 to 2022, according to a new survey released by the Women Business Collaborative with support from the American Staffing Association, National Association of Personnel Services, Staffing Industry Analysts, and TechServe Alliance. The percentage of female CEOs and owners in the staffing industry reached 42% in 2022, up from less than 20% in 2020. Notable findings include Women comprise 66% of staffing’s internal workforce but only 37% of board seats. 53% of CEO and owner roles at small agencies are filled by women, compared with 18% at large firms. Salary review and equalization jumped from the fourth most common activity to advance women in leadership in 2020 to the most common in 2022. “Women’s voices continue to grow in the staffing industry, but we still have work to do to reach full gender parity,” said Threase Baker, chair of the American Staffing Association. “I am so proud of the WBC and the four supporting organizations and research firms that helped us with this historic second benchmark survey on gender equity in the staffing industry,” noted Kip Wright, a board member with the WBC. “While the survey provides encouraging insight into the progress our industry has made around this critical topic, there is much we can learn from our participants to help further guide us along this journey toward true and lasting gender equity.” Join thought leaders in the industry for a webinar to discuss the survey results and explore how staffing professionals can continue to elevate and support women in the industry. The webinar, hosted by TechServe Alliance, will take place Thursday, March 16, at 12:30 p.m. Eastern time. Register to attend at us02web.zoom.us/webinar/register/6016757891529/WN_HVCAjbKOQ9q-Zv46IZB3ZQ. To learn more about the findings of this survey, download the report from Staffing Industry Analysts at staffingindustry.com/Research/Research-Reports/Americas/Insights-on-Gender-Parity-in-the-US-Staffing-Industry. Results can also be accessed on a dynamic dashboard at wbcollaborative.org/insights/results-dashboard-wbc-benchmark-survey-on-gender-equity-in-the-staffing-industry/.
359: Simplifying Sortation with CloudSort
Derek Szopa, Founder and CEO of CloudSort, joins The New Warehouse podcast to provide insight into how the company is redefining the middle mile for shippers and carriers with its cloud-based sortation technology. CloudSort redefines the middle mile by eliminating unnecessary steps and adding value touches, ultimately reducing costs and creating a better customer experience. Key Takeaways Derek shares that his background in the middle mile fueled his passion for educating and delivering solutions in this segment. One of the challenges is alleviating some of the tension between supply and demand. CloudSort’s cloud-based sortation technology allows virtually anyone to group and route to get shipments delivered innovatively and seamlessly. CloudSort simplifies the sortation process—eliminating steps, reducing defects, lowering costs, and allowing flexibility to curate delivery experiences. The proprietary technology requires limited automation and is easy to use, enabling packages to be sorted quickly at origin fulfillment centers or docks. Derek believes that leveraging technology for sorting increases accuracy and reduces defects, enabling precise package allocation to carriers. CloudSort allows shippers to sort earlier, potentially at their dock, to gain more shipping time. He explains how the system is flexible and dynamic, enabling shippers to make changes quickly and curate a delivery experience according to their needs. The New Warehouse Podcast EP 359: Simplifying Sortation with CloudSort
Herc Holdings reports record Full Year 2022 results and announces 2023 Full Year guidance
Fourth Quarter Highlights – Equipment rental revenue increased 31.5% to a record $713.1 million – Total revenues increased 36.0% to a record $786.0 million – Net income increased 36.2% to $97.8 million, or $3.27 per diluted share – Adjusted EBITDA grew 40.8% to a record $361.2 million and adjusted EBITDA margin expanded 160 basis points to 46.0% – Repurchased approximately 510,000 shares of common stock Full Year Highlights – Equipment rental revenue increased 33.6% to a record $2,551.5 million – Total revenues increased 32.1% to a record $2,738.8 million – Net income increased 47.2% to $329.9 million, or $10.92 per diluted share – Adjusted EBITDA increased 37.2% to a record $1,227.2 million and adjusted EBITDA margin expanded 160 basis points to 44.8% – Repurchased approximately 1,050,000 shares of common stock – Full-year 2023 guidance announced at $1.45 billion to $1.55 billion for adjusted EBITDA and $1.0 billion to $1.2 billion for net rental equipment capital expenditures Herc Holdings Inc. (“Herc Holdings” or the “Company”) has reported financial results for the quarter and full year that ended December 31, 2022. Equipment rental revenue was $713.1 million and total revenues were $786.0 million in the fourth quarter of 2022, compared to $542.4 million and $578.0 million, respectively, for the same period last year. In the fourth quarter of 2022, the Company reported a net income of $97.8 million, or $3.27 per diluted share, an increase of 38.6% compared to $71.8 million, or $2.36 per diluted share, in the same 2021 period. “From beginning to end, 2022 was an exceptionally strong year for us, with record performance across key financial metrics,” said Larry Silber, president and chief executive officer. “Operating momentum and market share growth continued in every region driven by robust demand, improved pricing, strategic fleet investments, end market diversity, and greater branch-network efficiencies. “Through the hard work of the last several years, we are better positioned than ever to capitalize on a variety of growth avenues, including local market penetration, increased rentals of higher-margin specialty equipment, and trends relating to the multi-year fiscal stimulus and re-shoring mega projects. As a market leader with a strong reputation, broad-based capabilities, and service solutions, in 2023 we expect to continue to outpace industry expansion and capitalize on operating leverage while laying a foundation for long-term, profitable growth.” Silber continued, “The impressive progress we’re making is a direct result of the dedication and relentless execution of the entire Herc team. I want to thank them for their outstanding work and continuing commitment to our growth initiatives.” 2022 Fourth Quarter Financial Results Total revenues increased 36.0% to $786.0 million compared to $578.0 million in the prior-year period. The year-over-year increase of $208.0 million was primarily related to an increase in equipment rental revenue of $170.7 million, reflecting positive pricing of 6.6% and an increased volume of 28.6%. Sales of rental equipment also increased by $35.2 million during the period. Dollar utilization decreased to 43.5% compared to 44.6% in the prior-year period primarily due to a mix of equipment on rent. Direct operating expenses of $276.7 million increased 26.2% compared to the prior-year period. The $57.5 million increase was primarily related to strong rental activity and increases in payroll and related expenses associated with additional headcount, in addition to higher maintenance, fuel prices, and facilities expenses. Depreciation of rental equipment increased 29.0%, or $33.0 million, to $146.8 million due to higher year-over-year average fleet size. Non-rental depreciation and amortization increased 35.4%, or $6.8 million, to $26.0 million primarily due to the amortization of acquisition intangible assets. Selling, general and administrative expenses increased 24.9% to $112.2 million compared to $89.8 million in the prior-year period. The $22.4 million increase was primarily due to increases in selling expenses, including commissions and other variable compensation increases, general payroll and benefits, and travel expenses. Interest expense increased to $41.3 million compared with $22.5 million in the prior-year period due to increased balances and interest rates on the ABL Credit Facility and AR Facility. Net income was $97.8 million compared to $71.8 million in the prior-year period. Adjusted net income increased 37.2% to $102.8 million, or $3.44 per diluted share, compared to $74.9 million, or $2.46 per diluted share, in the prior-year period. The effective tax rate was 26.6% compared to 21.4% in the prior-year period. Adjusted EBITDA increased 40.8% to $361.2 million compared to $256.5 million in the prior-year period, while adjusted EBITDA margin increased 160 basis points to 46.0% compared to 44.4% in the prior-year period. 2022 Full-Year Financial Results Total revenues increased 32.1% to $2,738.8 million compared to $2,073.1 million in the prior-year period. The year-over-year increase of $665.7 million was related to an increase in equipment rental revenue of $641.1 million, reflecting positive pricing of 5.8% and an increased volume of 31.8%. Sales of rental equipment also increased by $12.6 million during the period. Dollar utilization increased to a record 43.3% compared to 43.0% in the prior-year period primarily due to increased volume and rate. Direct operating expenses of $1,027.7 million increased 31.4% compared to the prior-year period. The $245.4 million increase was primarily due to strong rental activity and increases in payroll and related expenses associated with additional headcount, in addition to increases in maintenance, fuel prices, facilities, delivery and freight, and re-rent expenses related to the corresponding increase in re-rent revenue. Depreciation of rental equipment increased 27.4%, or $115.2 million, to $535.9 million during 2022 due to higher year-over-year average fleet size. Non-rental depreciation and amortization increased 39.6%, or $26.9 million, to $94.9 million primarily due to the amortization of acquisition intangible assets. Selling, general and administrative expenses increased 31.9% to $410.1 million compared to $310.8 million in the prior-year period. The $99.3 million increase was primarily due to increases in selling expenses, including commissions and other variable compensation, general payroll and benefits, and travel expense. Interest expense increased to $122.0 million compared with $86.3 million in the prior-year period due to increased balances and interest rates on the ABL Credit Facility and AR Facility. Net income was $329.9 million compared to
ABCO Systems earns prestigious award from MHEDA
ABCO Systems has been awarded the prestigious MVP (Most Valuable Partner) Award for its accomplishments in 2022 from the premier material handling trade association, MHEDA (Material Handling Equipment Distributors Association). Award recipients must satisfy a rigorous set of criteria with less than 10% of the association’s membership earning the award. As a 2023 MVP, ABCO Systems has successfully demonstrated a commitment to business excellence, professionalism, and good stewardship. To qualify for the annual MVP Award companies are required to provide evidence of their commitment to their partners in business including their customers, employees, and suppliers. They must satisfy criteria in the following important areas: Industry Advocacy Customer Service & Safety Practices Business Networking Continuing Education Business Best Practices “This is a tremendous honor for ABCO Systems,’’ CEO Seth Weisberg said. “We’ve prided ourselves for more than 30 years in helping clients implement the tools they need to succeed. From warehouse design to warehouse automation, we’ve set the standard in helping companies find solutions to their distribution challenges.” “The MVP Award recognizes the best-of-the-best in our industry and is displayed with honor,” said John L. Gelsimino President of All Lift Service Co. Inc. and 2023 MHEDA Chairman. “To check all the boxes from education, industry best practices, awards, networking, employee engagement, giving back, and much more, MHEDA is proud to have so many companies achieve this award.” ABCO Systems is a full-service design and build material handling company based in New Jersey. The company helps clients improve efficiency and processes with warehouse automation solutions. The Material Handling Equipment Distributors Association (MHEDA) is the premier trade association dedicated to serving all segments of the material handling business community. MHEDA represents close to 600 companies in the material handling equipment business. Located in suburban Chicago, the association provides services to companies seeking to improve their business through education, networking, benchmarking, and best practices. For more information, visit www.mheda.org.