Ladies and gentlemen, thank you for joining us. Welcome to the McGrath RentCorp Third Quarter 2020 Conference Call. All participants are currently in a listen-only mode. We will have a question-and-answer session later. This call is being recorded today, Thursday, October 29, 2020. Before we start, please note that the management will be discussing forward-looking statements that may include our financial outlook for the third quarter of 2020, as well as our expectations and strategies. These statements are not guarantees of future performance and involve risks and uncertainties that could lead to actual results differing from what we project. The impact of the COVID-19 pandemic is still developing, and we cannot fully predict its effects on the company's financial condition and future operations. The discussion regarding our financial condition is also subject to the ongoing consequences of the pandemic. Additionally, various factors that may cause actual results to differ from our expectations are detailed in the Risk Factors section of our Form 10-K and other SEC filings. Forward-looking statements are made as of today. Unless required by law, we do not intend to update these statements. Along with the press release issued today, we also filed the earnings release on Form 8-K and Form 10-Q with the SEC. Speaking today will be Joe Hanna, Chief Executive Officer, and Keith Pratt, Chief Financial Officer. I will now turn the call over to Mr. Hanna. Please go ahead.

Thank you, Dilem. Good afternoon and thank you for joining us on today's call. I will start the call with some overall remarks and comment on our third quarter 2020 performance and our look ahead. Keith will provide additional detail in his financial review and outlook comments. Following the COVID-19 disruption we experienced in the second quarter, we were hopeful that conditions would improve in the third quarter and that materialized. Across the enterprise, we navigated uncertain conditions with the pandemic and I am pleased to say we completed the quarter with our teams on the job with minimal COVID-19 operational interference. I am proud of the job all of our employees did during the quarter to support each other and serve our customers. Mobile Modular rental revenues grew both year-over-year and sequentially versus the second quarter by 1%. Portable Storage rental revenues grew year-over-year by 2% and sequentially by 3%. We had varying demand conditions across our geographies. In education, we saw more students back in classrooms on the eastern half of the country, less so on the West Coast. Projects underway have continued and school districts are currently focused on safety and learning conditions for the students returning to campus. Commercially, rental revenues year-over-year were flat for the quarter. We receive both rental and sale orders for hurricane relief, as well as COVID-19-related projects. Utilization dipped slightly in the quarter due to fewer shipments and normal return activity. Overall, the division executed well and delivered solid results. At TRS-RenTelco rental revenues grew year-over-year by 3% and sequentially by 6%. General Purpose rental revenues were up sequentially 4% with continued strength in aerospace and defense and semiconductor, as well as 5G testing in the lab for new product development. Communications rental revenues increased 10% sequentially, as carriers resumed their rollout of 5G infrastructure in the field, although at a slow pace. We were pleased with how the business performed in the quarter. At Adler rental revenues decreased year-over-year by 22%, but grew sequentially 3%. We saw low demand for oil and gas related projects, as well as downstream refinery turnarounds. We hope that the second quarter troughed and believe that to be the case, as overall conditions improved in markets with less exposure to oil and gas. However, activity was at a slower pace compared to a year ago and the pricing environment was competitive. We are running the business to maximize cash for the enterprise, with disciplined cost management and minimal new rental fleet investment. At Mobile Modular we made it a priority over the last year to bring more service offerings to our customer base to be further viewed as a solutions provider, not just an equipment supplier. Some of those services involve site improvements that accompany a building rental. Other options include the ability to offer a sale of a permanent modular solution as an alternative to a rental solution. The benefits of modular construction have gained momentum in the market and customer behavior reflects it. We are positioning ourselves to take full advantage of that trend and it is showing in our results. Sales at Mobile Modular increased by $12 million compared to the third quarter of 2019. Assessing the demand picture as we go forward, we still have the uncertainty of COVID-19 and how it may impact the economy. We are hopeful that some of the positive demand conditions that we've recently experienced during the third quarter will continue with a reminder that we typically experience seasonal fluctuations in demand based on weather, the holidays and other factors that are normal fourth quarter occurrences. Companywide we continue to operate effectively, despite the pandemic disruptions to serve our customers with the exceptional service they have come to expect over time. We are working hard to complete 2020 with the enterprise on solid footing. Now, let me turn the call over to Keith, who will take you through our financial review.

Thank you, Joe. Since the COVID-19 pandemic began, our teams have continued to do a great job in adapting to the new operating norms. They did all this while also delivering good third quarter results. For the third quarter of 2020, total revenues decreased 10% to $156.4 million from $173.6 million a year ago. The company's 20% operating profit decrease for the quarter was primarily driven by a $6.1 million decrease in gross profit from sales revenues and $2.5 million decrease in gross profit from rental revenues. The decrease in total company revenue and operating profit was primarily a result of lower new modular classroom sales at our Enviroplex business, which in 2019 had a large concentration of its annual sales completed in the third quarter. Net income decreased 13% to $28.1 million from $32.5 million, and earnings per diluted share decreased 13% to $1.15 from $1.32. Now, I will break the results down by reviewing rental division operating results and performance, compared to the third quarter of 2019. Mobile Modular total revenues increased $9.1 million or 11% to $95.4 million on higher sales and rental revenues, partly offset by lower rental related services revenues. Rental revenues for the quarter increased 1% from a year ago, which was driven by higher average monthly rental rates. Sales revenues increased $12.6 million or 76% to $29.3 million primarily on hire new equipment sales to educational customers. We achieved rental revenue growth from our education markets, as well as in our Portable Storage business, despite the softer business conditions compared to a year ago. Equipment preparation costs, included in other direct costs of rental operations decreased 8% to $11.8 million, due in part to lower shipment activity levels during the quarter. As a result, rental margins increased to 63% from 61%. Average modular rental equipment for the quarter was $829 million, which was an increase of $27 million. Average fleet utilization for the third quarter decreased to 76.3% from 79.4%. At TRS-RenTelco, total revenues increased $1.8 million or 5% to $35.9 million on higher sales and rental revenues. Rental revenues for the quarter increased 3%, primarily driven by 7% higher average equipment on rent, which was partly offset by 4% lower average monthly rental rates. The lower average rental rates reflect a continued mix shift towards more General Purpose Equipment rentals that tend to have longer term transactions compared to communications. Rental margins decreased to 41% from 45%. We saw 12% growth in rental revenues from General Purpose, partly offset by 11% lower revenues from communications. Average electronics rental equipment for the quarter was $336 million, which was an increase of $22 million. Average utilization for the third quarter increased to 67.1% from 66.9%. At Adler tank rentals, total revenues decreased $5.5 million or 22% to $19.3 million on lower rental and rental related services revenues. Rental revenues for the quarter decreased 22% primarily from 19% lower average equipment on rent and 4% lower average monthly rental rates. The rental revenue decrease reflected weaker demand caused by COVID-19 related business disruptions and the lower price of oil and gas, with five of our six end markets having lower rental revenues compared to last year's third quarter. Rental margins decreased to 55% from 60%. Adler's average rental equipment for the quarter was $315 million, which was an increase of $1 million. Average utilization for the third quarter decreased to 44.1% from 54.5%. Moving on, the remainder of my comments will be on a total company basis. Total company equipment sales revenues decreased to $42.3 million from $50.9 million a year ago. This decrease was primarily due to $22.4 million lower sales revenues at Enviroplex, which had a large concentration of its sales in the third quarter of 2019, partly offset by higher sales revenues at Mobile Modular and TRS-RenTelco. The timing of sales revenues can fluctuate from quarter-to-quarter and year-to-year, depending on customer requirements, availability of used equipment for sale and other factors. We currently expect total company sales revenues for the fourth quarter to be higher than a year ago and total full year sales to be 9% to 13% above 2019. Selling and administrative expenses decreased $0.7 million or 2% to $30.9 million, reflecting disciplined cost management. Interest expense was $2 million, a decrease of 38% as a result of 28% lower average interest rates and 14% lower average debt levels. The third quarter provision for income taxes was based on an effective tax rate of 20.8%, compared to 25.3% a year earlier. Our 2020 year-to-date cash flow highlights include, net cash provided by operating activities was $131.5 million, a decrease of $5.4 million compared to 2019. The continued solid year-to-date cash flows supported organic investment in the business, increased dividend payments and share repurchases, while also reducing debt. These strong cash flow characteristics demonstrate the company's resilient business model during a period of economic weakness. We invested $65.7 million for rental equipment purchases, mostly at TRS-RenTelco and Mobile Modular, and $9.6 million for property, plant and equipment purchases. Partly offsetting these investments was $33.8 million of proceeds from sales of us rental equipment. Dividend payments to shareholders were $29.6 million. The company repurchased 282,000 shares of common stock, totaling $13.6 million or an average price of $48.25 per share. There were no repurchases of common stock during 2019. Net borrowings decreased $43.5 million to $250 million during the first nine months of 2020. At quarter end, the company had capacity to borrow an additional $282 million under its lines of credit and the ratio of funded debt to the last 12 months actual adjusted EBITDA was 1.04 to 1. Third quarter 2020 adjusted EBITDA decreased 11% to $62.7 million compared to a year ago and the consolidated adjusted EBITDA margin was 40%, compared to 41% a year ago. Our definition of adjusted EBITDA and a reconciliation of adjusted EBITDA to net income are included in the quarters press release. Finally, turning to our financial outlook. For the fourth quarter of 2020, we expect total revenue between $140 million and $150 million, adjusted EBITDA between $58 million and $63 million, gross rental equipment capital expenditures between $10 million and $13 million. Keep in mind the following regarding our outlook. The impact of COVID-19 on the economy and on our business continues to evolve and is difficult to assess. In addition, visibility is limited at Adler tank rentals and TRS-RenTelco because of the short rental terms in both businesses.

Thank you, sir. I show our first question comes from Scott Schneeberger from Oppenheimer. Please go ahead.

Thanks very much. Good afternoon. In Mobile Modular, just curious, the rental revenue growth decelerated year-over-year in the third quarter from the second quarter. You guys touched on it a little bit, but I'm just curious what you're seeing, it sounds like the growth was rate and not volume. So just curious, is there seasonality at play here? Is there a slowdown from trend? Just looking to get a little bit more behind the demand environment?

Yeah. Scott, I can give you some color on that. I would say it's mostly due to just a slower economic backdrop that we're experiencing right now and results varied pretty significantly from region to region in Mobile Modular. I mean, we saw strong government work. We saw some continued project work from school districts. We saw general construction infrastructure, some projects there continue and we've continued to land some of those. I would just say that the pace is just a little slower this year than it was last year and that's what contributed to the slowing topline growth there.

Thanks. How should we think about, I know it's early, you're not going to guide next year, but how should we think about trends heading into next year? I know visibility is tough. But is this slower economic environment COVID driven? Have you seen any activity kind of on a net basis of pickup in classroom activity based on COVID or just not material? And maybe just kind of hears on those right now? Thanks.

Yeah. Sure. Well, I wish I could answer with clarity into next year. It's just an uncertain environment. And so to go into next year, I think is, we need to see how some things are going to play out here. One, we have an election. Two, we still have uncertainty due to COVID that I think is really going to be difficult for us to project very far out. And so getting into 2021, it's just hard to see where school districts are going to be spending their money and what their appetite is going to be for projects, so just real difficult to predict at this point past the end of this year.

Okay. And then on the classrooms, any here and now activity that's worth reporting?

I would say, we have, like I said, in the prepared remarks, we've seen projects that are in the field continue. And I would say that school districts at this point are really focused on trying to provide a good learning environment for kids that have come back. I think what we've seen them do for the most part, is instead of getting additional facilities to facilitate social distancing, they've really tried to solve that with split schedules. And so I can't really say that we've seen an uptick in order activity because of COVID and we really haven't seen significant returns because of COVID, too, because at the same time, districts are holding on to the classrooms that they have, so it's been pretty steady.

Scott, if I could just add just to remember, the education business is seasonal. We've really completed the season that typically is busy in the summer months. And again, for the third quarter, I think, they have albeit a slight increase, but an increase in rental revenue that was accounted for by the education part of the business is pretty good under the circumstances. And really, from this point, for the next number of months, education tends to be a little quieter and more of the activities on the commercial side.

Thank you. I appreciate your insights. Could we get an update on the current state of 5G and how it compares to your expectations from a few months ago, as well as your thoughts on its future? Thank you.

Sure. We've been very pleased. Well, let me back up a second. I think, as we've communicated in the past, we're seeing demand for 5G both in the labs and that supports our General Purpose rentals. And then there's the field work, which is both wired and wireless communications rentals. So, if you look at our General Purpose rentals, we've been very pleased with the level of activity that we've seen related to 5G. There is quite a bit of R&D work that's taking place in the labs right now, and we're benefiting from that in renting General Purpose Equipment. Now, as far as the communications fleet, I would say that the pandemic seems to have slowed down some of the deployment of 5G related upgrades that carriers are introducing in the field and so that's taken just a little bit longer to pick back up. But it really does not worry me at all, because there is just so much momentum with 5G that this is just merely a pause or just a timing issue before this work continues in the field. I know when carriers are going to start to introduce upgraded handsets that have 5G capability, it's certainly going to drive that demand out in the field and I'm sure we're going to benefit from that. It's just a little slower, but overall, not alarming at this point.

Okay. I'd like to conclude by discussing Adler, which continues to face pressure, but that's not unexpected. Are there any signs of improvement or decline, especially in the upstream oil and gas sector? I understand that five of the six markets have been struggling. Is the decline primarily in the upstream sector, with others showing less downside? Or is there a general downturn across the board? Are you noticing any specific changes, either positive or negative, in the upstream sector? Thank you.

Sure. I'll point out that our upstream oil and gas rentals from Adler make up only 5% of our total rental revenue, down from 10% last year. This has impacted our rental income. We are not observing a significant increase in demand at the moment. As mentioned in our prepared remarks, we believe we've hit the lowest point. As people return to driving and the economy continues to improve, we expect to see an increase in demand in the downstream sector. Currently, most of the activity and turnarounds in refineries have been delayed as companies are being cautious with their expenditures. However, we hope to see an increase in this activity next year as the economy continues to grow. Today's Q3 economic data was quite positive, and if this trend continues, we are cautiously optimistic that we will see more activity in that area.

And Scott, I just emphasize, even though conditions are tough, the business did grow rental revenues sequentially. And that growth was in markets that don't have much upstream or downstream oil and gas in the mix. So, there are some positives there. I think the team's done a great job capturing the opportunities that are available in the market. And again, growth sequentially is a good sign.

Is that execution by your sales team? Is that seasonality or otherwise? Just curious the driver there?

Yeah. I think it's a bit of both. I think, clearly, the second quarter was a very difficult period, all of the initial uncertainty around COVID and customers hesitating on starting projects. And I think we've seen some of that start to fall and then as that has occurred, our team, like others in the market, have gone out and tried to win over customers and support them in their projects, and I think we made good progress.

Excellent. Well, thanks for the color. I'll turn it over.

Thank you. I show our next question comes from the line of Marc Riddick from Sidoti. Please go ahead.

Hi. Good evening, gentlemen.

Hi, Marc.

Hi, Marc.

So wanted to touch this, first of all, as we're approaching elections, are we looking at any particular, thinking about the funding environments that you're dealing with? Are we looking at any particular election situations that are valid from a local funding basis for schools? Are there anything that we should be keeping an eye on going into next week?

From a national perspective, we are not considering any specific factors right now, so it's probably not worth discussing how things might change. However, I can mention that there are bond referendums on the ballots. For instance, in California, voters will decide on $13 billion worth of local bond referendums related to school facilities, and we will have the results next week. While the number of bond referendums is lower compared to previous years, $13.4 billion is still a significant amount, which we view positively. Additionally, California has continued to sell bonds based on Proposition 51, which passed in 2016, and they recently sold $976 million worth of bonds to fund over 300 projects. We are pleased that this money will flow into the market, as we stand to benefit from it. Although overall economic conditions are tighter than before, there are still promising indicators suggesting that funding will continue to flow to some extent.

That's certainly encouraging. And then I wanted to shift gears and if you can sort of give us an update on thoughts on maybe what you're seeing from an acquisition pipeline perspective, either maybe some regional opportunities or some tuck-in opportunities to take advantage of or maybe how that's that pipeline has evolved during the course of the pandemic?

Sure. I would say that there are always opportunities for us, we pay very close attention to the market and we have quite an active process for folks to bring those opportunities to us. We are always looking at potential M&A and I think that's demonstrated in past acquisitions that we made, where we're patient and we will wait for the right thing for the company and that has to be at the right price and a good valuation and have good equipment for us to purchase too. And so those conditions arrived and it's in the right sweet spot for us, we will definitely be at the table.

And then a last thing for me, I was wondering if you can sort of give an update on access to HR growth or, I mean, I'm sort of thinking along the lines of the old days of having shortages of drivers and alike, and I'm trying to get a sense of whether or not that you have given the employment challenges out there, if there's an opportunity for you to add folks or sort of reconfigure personnel opportunities going forward? Thanks.

I can definitely say that we are continuing to hire and have open positions. There is always some turnover in the business. We have noticed that more people are available for us to hire, which is a positive change, even though it indicates a weaker economy overall, which is not good for us. The fact that we have better access to quality candidates is encouraging. Our intention is to take advantage of this availability; if we find a good candidate, even if we don't have an immediate need, we might consider hiring for future projections. Overall, I am pleased that the situation regarding personnel seems to have improved for us.

That's encouraging. I appreciate the commentary and colors. Thanks, guys.

Yeah. Thank you, Marc.

Thank you. I show no further questions in the queue at this time, sir. At this time, I'd like to turn the call back to Mr. Hanna for closing remarks.

All right. Well, thank you Dilem. Ladies and gentlemen, I'd like to thank everyone for being on the call today and for your continuing interest in our company. We wish you all health and safety in the months ahead and we look forward to speaking with you again in late February 2021 to review our fourth quarter results.

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