Toromont Industries Ltd
TSX:TIH
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
109.5
134.85
|
| Price Target |
|
We'll email you a reminder when the closing price reaches CAD.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Toromont Industries Ltd
You don't have any saved screeners yet
Good morning, today is April 26, 2018. Welcome to the Toromont to announce the first quarter 2018 results conference call. Please be advised that this call is being recorded. Your host for today will be Mr. Paul R. Jewer. Please go ahead, Mr. Jewer.
Thank you, Valerie and good morning, everyone. Thank you for joining us today to discuss the results of Torment Industries for the first quarter of 2018. Also on the call with me is Scott Medhurst, President and Chief Executive Officer. Before we continue, I'd like to advise listeners that this presentation may contain forward looking statements and information that are subject to certain risks, uncertainties and assumptions. For a complete discussion of these factors, risks and uncertainties that may lead to actual results or events differing materially from those expected, refer to Toromont's press release from yesterday, which is available on our website. We assume you've had an opportunity to review our press release from yesterday and as such, we'll focus on the key highlights. Scott will begin with a few remarks, some comments and our outlook and an update on the integration, after which I'll review the operating group results and financial position. Then we'll be more than happy to answer your questions. Scott?
Thank you, Paul, and good morning, everyone. We are pleased with the results for our first quarter, following the significant acquisition we completed late last year. While maintaining a strong commitment to serve our customers, we remain focused on the integration of our newly acquired businesses and are pleased with the progress achieved. Our Equipment Group teams achieved growth in revenues, which together with the strong bookings, backlogs and service work in process levels, point to the increased activity levels seen this year. CIMCO continued to execute very well in Canada. Consolidated revenues were up 64% in the quarter, reflecting $241 million generated at Toromont QM. Revenues at our legacy businesses increased 6%. Net earnings were up 14% in the quarter to $30.8 million. The legacy businesses reported strong year-over-year growth of 19%, while contributions from QM were more than offset by the acquisition-related interest expense and integration-related costs. In the Equipment Group, the expansion of our territories to include Quebec in Atlantic Canada is expected to be transformative to the long-term performance of our company. Effective execution will be required to realize on the significant potential of a combined presence in key Canadian economic sectors. We are further encouraged by the long-term outlook for infrastructure spending across all territories from both the federal and provincial governments. The parts and service business continues to be active and provides a measure of stability and opportunity for further growth. Our shops remain busy, and we continue to hire technicians in anticipation of an increase in demand. Increased activity in the mining space has translated to increased bookings and sales, and we are cautiously optimistic that there is opportunity for continued growth. In the meantime, production continues, which is good for our product support business. And consequently, incremental equipment sales to support the growth and expansion. On the integration front, we continue to take a step-wise approach and remain in the early stages of the process. The first step, which started on Day 1 and is ongoing, was devoted to encouraging and supporting our 2,100 new employees to remain focused on safety and effective execution. Step 2 involved key leadership appointments, leveraging the talent pools of both organizations to appoint entirely from within and align our management structure to best serve our regional and vertical markets. As a result, managers from both legacy Toromont and Toromont QM took on new responsibilities within the large organization. We continue to fine-tune the go-to-market structure with the ultimate goal of ensuring senior leaders take a hands-on ownership approach with a great deal of autonomy, but also with full accountability for the outcomes achieved. It will take time to broadly embed Toromont's approach in the acquired operations, but we are on our way. Following this step, integrating Battlefield, a cat rental store, across the new territory operating separately from the heavy equipment arm of the business took focus. This initiative is taking hold as we will gradually expand to a full rental service business that can operate effectively over all 12 months of the year. Toromont material handling was also consolidated given the separate mandate. Step 4 was formulating mining and power systems division for the entire territory. This will provide a consistent customer experience while providing the needed expertise and knowledge. Progress is being made on this front. Step 5 was introducing the Toromont strategies and specific objectives to align the entire enterprise. The focus here remains on demonstrating to your customers that we are in fact stronger together by sharing best practices across all disciplines as a means of standardizing the systems, improving our execution, driving efficiency and producing steady growth. Weaved into all these steps is deeper operational analysis in all facets of the business, which is ongoing. Over at CIMCO, the sustained momentum reflects our strong market presence and solid reputation as a leader in these markets. Though much work lies ahead, we are making inroads in expanding our U.S. presence. Strong booking activity and record backlogs bode well for future prospects. Across the organization, long-term product support growth trends, together with the diversity of markets and the new and significantly expanded territory, a strong management group and solid financial underpinning provide substantial opportunities for continued success. I will now turn the call over to Paul to take you through highlights of the financial results. Paul?
Thanks, Scott. Let's look at the opening results in more detail, starting with the Equipment Group. Execution was good amidst challenges across the broader supply chain. Toromont QM contributed $241.4 million in total revenues, an 18% increase from revenues generated in the first quarter of 2017. For the legacy businesses, revenues increased 3% with higher product support and rentals offsetting lower total equipment sales. New equipment sales in the legacy businesses increased 15% with strong demand in the construction sector, partially offset by decreases in power systems, mining and ag sales. Used equipment sales were down 36% due in part to challenges in sourcing used iron and a strategic decision to reduce dispositions of the rental fleet. Total equipment sales at Toromont QM were $102.1 million, a 21% increase versus last year. Construction market sales accounted for more than half of the revenues, mining and power system sales almost a 1/3, and lift trucks, the remainder. Rental revenues in the legacy business increased 12%. Growth in power and light equipment rentals continued and served to offset lower revenues from the heavy fleet and equipment on rent purchased with purchase options, both of which benefited from significant activity in Newfoundland last year. At Toromont QM, rental revenues of $18.6 million represented a 7% increase over last year, approximately 2/3 of which were generated from the light equipment fleet and lift trucks. At the end of March 2018, our net investment on the rental fleet was $478.6 million. During the quarter, we invested $27.9 million into our rental fleet net of dispositions, which is $11.6 million higher than last year. Product support revenues of the legacy businesses increased 7% in the quarter on good rebuild activity levels, particularly in mining. At Toromont QM, product support revenues which represented half of its total revenues, were up 17% in the quarter. Gross profit margins increased 90 basis points in the quarter, despite a dilutive effect from Toromont QM versus the legacy businesses. Selling and administrative expenses increased with the incremental expense at QM and the integration-related costs. Excluding these, the expense ratio was 10 basis points higher. Operating income increased $10.7 million in the quarter, including a contribution of $5.7 million net of integration-related costs from Toromont QM. Operating income from the legacy businesses increased 14% in the quarter, with operating income margin up 110 basis points to 10.8%. Bookings of $370 million in the quarter reflected good activity levels across most sectors in both the legacy businesses and at Toromont QM. Backlogs increased to $437 million, including $184 million at Toromont QM, most of which is delivered over the remainder of this year. Now turning to CIMCO. CIMCO reported good results in the Canadian operations, while U.S. results were softer. Package revenues were up 53% in the quarter with growth of 66% in Canada and 11% in the U.S. Industrial activity increased in both Canada and the U.S., while recreational activity was up only in Canada. Product support revenues were down 3% reflective of a decrease in Canada. Margins decreased 430 basis points as higher product support margins were more than offset by lower package margins and an unfavorable sales mix of product support revenues to total. Package margins in the first quarter of last year benefited from good product close-outs and favorable onetime adjustments not repeated. Selling and administrative expenses were largely unchanged from last year. Operating income increased 21% on higher revenues and was 5.4% of revenues, consistent with that reported last year at this time. Bookings were down 5% against a tough prior year comparator, which included several large orders in the U.S. Backlogs of $157 million were at record levels for this time of year, with most expected to be delivered over the remainder of this year. As Scott pointed out earlier, we're pleased with the first quarter results. We think about it this way. In our seasonally weakest market, earnings at the legacy businesses were up 19% versus a year ago. In our new QM businesses, we generated net income this year which traditionally was not the result. This was offset by financing interest expenses and some integration costs. And EPS was mildly diluted by the shares issued on acquisition. We are on our way with the business integration, although there is still much work to be done. As we've consistently said, this is not an overnight endeavor. We are focused on the long runway of growth. At March 31, our overall financial position remains strong. We repaid $150 million against our credit facility and ended the quarter with cash of $171.2 million. Our net debt to total capitalization ratio was 33%. That concludes our prepared remarks, and we will be pleased to take your questions. Valerie?
[Operator Instructions] Our first question is from Cherilyn Radbourne with TD Securities.
Wanted to hit first on a comment that you make in the MD&A and saying that you feel the Q1 results reflect good execution and amidst challenges across the broader supply chain -- broader supply chain and clearly, the ability to store used iron was one of those. Maybe you can hit on some of the others.
Yes, well, again, when we say we are pleased with the execution, we've got to remember this integration is in full motion here and so I think the team did a solid job in a very active environment, driving growth and continuous improvement, because there is a lot of focus on the integration as well and changes with leadership positions. In terms of used equipment, we're in a tighter environment to purchase but we are still purchasing but those numbers were down on a year-over-year. And the other thing we're being attentive to, Cherilyn, is the retail demand signals and then relative to our supply right now. So there was some slippage with some motors being pushed out relative to deliveries. And so we're being attentive, and that's why our disposition of the rental fleets was down both at heavy rents as well as in the rental services business, it was almost down over $4 million from year-over-year comparison. So there is some changes going on there that we're being very attentive to as we execute the opportunities.
And then in terms of the rental business, it sounds like there were some sort of issues there in terms of a difficult prior year comparable on the heavy rent side and also an interruption of a major project during the winter months, maybe you can address those issues.
Yes, it's really -- it's a year-over-year tough comp there. The major project work was a little more active last year with our heavy rental fleet. So that caused year-over-year downturn in the comparison and the utilization was down on that heavy fleet. The rental services was very good with improved revenue utilization and rental revenues were actually up 15% on the legacy. So it's first quarter, I think the weather might have played a bit of -- I hate using the weather as an excuse, but when we see our propane sales significantly increase on the rental services, that to me is a reflection of a little harder winter and so some of the activity wasn't as strong on some of the construction projects.
Well, I think we're all aware it's been a long winter, certainly in Eastern Canada. It struck me that, that might have had an impact on the broader Equipment Group, not just their rental business. Would you agree with that?
Yes, again, I think the weather played a bit of a factor, but I don't like to use too many excuses. But that's the reality of it. The heavy rental was down on the rentaling.
And then last one from me before I pass it on, $1.7 million of pretax integration costs, can you give any further color on what that was?
It's a mixture between -- there were some severance costs that we certainly encountered in the quarter. So that would be the majority of it, Cherilyn, about a $1 million in total. And then the balance of the mixture of onetime professional services costs and some other elements to branding.
Our next question is from Michael Doumet with Scotiabank.
You mentioned that you didn't typically generate net income in Q1, and I just wanted to clarify that I heard that right. And you also previously commented on the enhanced seasonality of that particular business. So the question, I mean, is it fair to assume that margins remain relatively on trend? I just want to make sure that there isn't any sort overreaction to Toromont QM's margins in the quarter.
No, I think everything's in line. And broadly, we tried to paint it as we see it, right. So as mentioned in the text of my speech here this morning and as we characterized in the actual MD&A itself and the press release, the legacy business, the bottom line was up 90% year-over-year and we certainly made a bit of money at QM and traditionally, this is no criticism of the past organization in any way, shape or form, it's just size and scale and traditionally their first quarter wasn't a profitable one. So that wasn't visible, I guess, as you folks had the opportunity to put your models together on a quarterly basis, that certainly creates some problems on that front. That's what I was referencing when I mentioned enhanced seasonality in response to a question last quarter.
Okay. And is it fair to assume that the enhanced seasonality plays out the opposite way and in stronger revenue quarters as we think of sort of a margin expectation for the year?
Look, broadly, we have -- there's substantial differences we pointed out at multiple points between our accounting and the legacy accounting. But roughly, just to provide some visibility to it, if you look at over the course of the last 3 years, the profitability profile on average in this -- this is lumpy and changes, it would be in minus 10% in their first quarter, 25% in their second quarter, 40% in the third quarter and then 45% in their fourth quarter. So like I said, that doesn't lock down. It's not guidance, but at least it's helpful in understanding the financial information that was presented to you previously in the business acquisition report. Is that helpful?
That's very helpful. I was just about to say that that's appreciated. So maybe just flipping to second question. I mean Toromont QM's SG&A came to about 20% of revenues. It's a level above the legacy Toromont business. Again, some of its probably attributable to enhanced seasonality. But given that you've highlighted that Toromont QM as a revenue story, much more than a cost story, should we think of just margin expansion largely driven by operational leverages as you get to be more efficient? Or we know you've initially leveraged the cost base to generate additional revenues?
Essentially, we are extremely focused as we've been consistently articulating. We're extremely focused on growing this business. This is not a synergy story which is why we're reticent to want to share synergy targets, which we do not have internally. We want to grow this business for all of us, for our shareholders, for our employees, for our key stakeholders, including Caterpillar and that's where our focus lies. So certainly, seasonality would be a component of that number and we'll see how this unfolds going forward.
Mike, just a little more color there. What we're focused on here is continuous improvement and both on growth in the operational efficiencies, and we've already started to see that. I mean, we were very pleased with our Quebec on the product support side, and we already started leveraging the enterprise there to drive some higher growth there through labor utilization and some other resources. So that's what we're focused on is continuous improvement. And again, we demonstrated that with the -- Quebec was up 17% on the product support court side, so that's encouraging.
Our next question is from Jacob Bout with CIBC.
So Caterpillar reports earlier this week, lots of focus on shrinking margins, price increases. Maybe talk about your ability to pass on these price increases? And maybe talk a bit about what your competitors are doing?
So this is not unusual. I mean we've all been in this game a long time and what we focus on as a company is working closely with Caterpillar to provide the value propositions to win the business. And that's where I think how we always go about it. And that's a combination of our services, our products and the strength of our infrastructure and how we present that to our customers to make a difference. And so that's how we handle those situations, have done it that way for a long time. The competitive environment, we've commented on before, is still there. We still have some moving parts with Tier 3, Tier 4. But again, we're where we want to be with this expansion and we're pleased that Caterpillar blessed us on this front and we think we can compete more effectively, once we get all the moving parts in place here.
Can you talk about any changes in supply chain logistics?
There we have felt a bit of slippage due to some orders being moved out with certain product families and that's why we're monitoring it closely, have been very focused on the retail side. And so that's why we're not -- we didn't dispose of some of the units out of those rental fleets in the first quarter while we monitor retail availability.
Last question, just on the backlog. So give us a breakdown on the Equipment Group between the construction, power system and minings -- or in mining. Maybe just talk a bit about where you saw the improvement -- majority of the improvement either quarter-on-quarter or year-on-year?
On the backlog with legacy, we saw real improvement in the mining sector, particularly on new. It was up about 87% and tractor up 58%. So we're -- and even CIMCO, like we're really encouraged with our backlog there was up 14%. So that was encouraging as we go forward.
Our next question is from Ben Cherniavsky with Raymond James.
I know you've mentioned a few times already, but I'm still trying to understand the comments around less disposal in the rental fleet. Can you just clarify what was driving that decision? You're saying that the tight supply chain to purchase allowed you -- or incented you to keep more fleet in rental [indiscernible] there? Or what was the thinking there?
Yes, so what we did was because of some slippage on some product coming in, we felt we would move some of the units over to availability for the retail activity, which was increasing in the quarter. And so we kept the iron in the heavy and rental services fleets rather than we sometimes disposing of in the quarter. So that was the tactical move that took place.
So because the rental channel was strong?
Rental channel was strong at rental services. We had increased utilization there, both in our light and heavy fleets in the rental services business. And just with some of these products availability, we thought, you know what, let's just hold on here, because we're anticipating some good rental activity and similar story on the heavy rents.
Okay. And when you guys look at your rental platform in Quebec and some your ambitions there being, I mean -- and as you built out that platform in Ontario, you had done some acquisitions over the years, albeit, somewhat more tuck-in. But is that an approach you might consider in the Quebec market to build out your platform?
That certainly could be complementary.
And could you give us a -- just a quick update on the ag markets, what you principally saw there in the first quarter?
It's early but we were pleased with our combine activity in bookings in there in the first quarter. So that was encouraging for us in terms of the activity. I think we'll have a much better read on the industry activity here in the second quarter. That's when you really get a read on the ag side.
Just finally, sort of a routine question from me with you guys, but just given your focus on CIMCO in the U.S., can you just speak to how that's progressing. It sounded like Canada was the outperformer there. I think you had -- you lapped tough comp on the U.S. But is there -- how is your progress there unfolding?
We're progressing and our quoting activity, which we're keeping a close eye on a quarter-to-quarter basis, was slightly up from last year in the quarter. What we were disappointed with in there was the execution side of the business. We had some bumps in there on executions, some estimating, and so we're getting into the root cause there quickly and addressing that.
Our next question is from Devin Dodge with BMO Capital Markets.
So even highlighting that lead times from CAT have been kind of extending out, just wondering, have you seen this stabilized? Just wondering if we are going to be see this again in Q2? And is there any way or how should we be thinking about how much revenue that you would have expected to get in new equipment revenue in Q1 that maybe got pushed out into Q2?
Part of that was also due to some customers not being in a sense of urgency, I think, because of weather as well that caused some of the slippage in the backlog but -- this was product by product. And our inventory levels are up a bit, so we're comfortable there on that front. And we're working closely with Caterpillar here. There was some slippage that pushed some orders out and that's why we're being attentive to the demand signals coming on the retail side and just monitoring that. And we're trying to be very attentive to acquiring good used iron as well, which is a bit tighter. So we've got some great people in the organization that are monitoring things closely and keeping an eye open for good used iron as well.
Okay. So have you seen that slippage, that kind of stabilize or -- I'm just trying to get a sense, whether this maybe -- we're going to talking about this next quarter as well?
I'll just stick with the quarter. We saw some slippage in the quarter, and we're working closely with Caterpillar on that front going forward.
Okay. Okay. And then to switch to Toromont QM. I know you guys highlighted the seasonality, which is really helpful. Just wondering if there's any other costs or any other margin impacts that impacted this business in Q1 that may not recur in the balance of the year? I think previously, you talked about amortization related to the backlog. Just any color there would be helpful.
Yes, certainly, there's some element. There's a variety of puts and takes that we're dealing with, Devin, right. So there are a variety of costs that we would have incurred. There is a variety of elements where we've recognized some savings versus previous organization. Amortization backlog wasn't a big factor, probably about $500,000 or $600,000 in the quarter. Just a little bit of that to come, probably another $1.5 million or so from the backlog from [indiscernible]. So that's it. That's relatively straight forward. We're focused on the operations. We're very focused on integrating the businesses, and we're excited about the opportunities we have in front of us.
Okay. Okay. And maybe last one from me. The MD&A mentioned that there was some favorable transition terms from suppliers that had impacted your accounts payable. Just can you provide a bit of color there to -- what -- help us understand what that means.
It essentially means, just -- as we work through the transition from a variety of suppliers, then we just look at some extensions to trade terms or other favorable terms that are available and that helped us in the quarter.
Our next question is from Maxim Sytchev with National Bank Financial.
Paul, just wanted to clarify the comment that you made about the retail signals. Are you seeing it sort of further strengthening? Or are you talking about slippage on that front? And just -- and how you position sort of the rest of the business according to that?
In the first quarter, Max, we saw some uptick in industry activity, particularly on that construction side. So that's what we're referencing there, okay, on the new sales.
Correct. Okay. Okay. Now, that's helpful. And then question on the accounts receivables. There was almost a $43 million amount owning to the company as far as acquisition. What is that exactly, Paul?
That was just simply the finalization of the adjustment to working capital, which is normal element of any transaction.
Okay, correct. And then is it possible to get an update to how we should be thinking about your investment in rentals and CapEx ex rentals for 2018, just directionally speaking, if it's possible?
Yes, absolutely. What we look at, we traditionally share that with you. So one of the things that we're most excited about is our opportunity to expand our rental footprint. And certainly as it looks at the rental services business in Battlefield, that's a significant opportunity for us. So last year, we would have invested a net $70 million or so in the rental fleet. This year, I think we'll double that. So we're looking at probably $140 million. Now all of this depends on our ability to execute and the ability to absorb that into the fleet, but we do have quite an opportunity there. As we look at PP&E, I mean, I think, obviously, with the expanded enterprise, last year we're net about $40 million. This year we'll be in net about $50 million. And all that, obviously, is subject to final execution in our final requirements. The bottom line is we also have the flexibility to respond. So as we see opportunities presented, we have the opportunity to respond with investment. That's the benefit of a strong balance sheet.
Max, what we really -- we really need to increase and broaden our allied products in our new territory so we can operate effectively over the 12-month period. That's a great opportunity for us and we've got the structure the business properly to be able to execute.
Okay. And correct me if I'm wrong. I believe, last year you made a comment that deployment of rental capital into the QM territory is predicated on, obviously, have sort of all the systems up to snuff, training, all that stuff. So is this everything in place right now and you feel comfortable deploying that much capital?
We're probably the most advanced in this area of any of the integration efforts. So we think that we'll have our systems in place later this summer and we'll be rolling out Battlefield's legacy, footprint, model and systems to the QM businesses. I think we're in a good position. We've realigned the organization. We're well situated to seize the opportunity. We just have to execute.
Right. Can you maybe -- talking about sort of integration culture and things like that, in terms of retention, any commentary there?
Yes, we're being very attentive to the culture and that's why we're working very closely with our leadership team. And they're doing a very good job integrating new business processes, while also being attentive to our people. So overall we're quite pleased. The technicians, we're really pleased and we're working on increasing our headcounts on the technician front, and so that's gone well is how we're integrating the technicians and responding to the demand signals there.
One of the things that's quite fortunate, as we look at [indiscernible] technicians, probably didn't anticipate fully the power of it as we approach the acquisition, is the power of the CAT culture within both organizations. Both organizations bled CAT yellow blood. And as a consequence, there is a lot of familiarity between people, processes, practices and that focus on the customer. So that's very meaningful and continues to this day.
Okay. We're able to transfer some of the access capacity between the 2 locations for rebuilt and things like that. Are we starting to see that already?
Yes. We started to see that in the quarter leveraging some of the resources and that's why we were able to, I think, drive some increased product support business in new territory and vice versa. We're seeing that. I mean, we just got up and running with our renovated CRC platform in Montreal, and that's going to be very positive for us overall for the entire enterprise. And we're just working on how we leverage that capacity and improve things on that front.
And maybe just last question for the rest of the year in terms of the used momentum. And I understand it's a very fluid situation, but any color you can provide there.
Yes, I just think it's going to continue right now being a tight environment to purchase there. We did purchase iron in the quarter. Just we think we'll be positioned well. But it's a little more difficult to acquire good used iron right now. What was encouraging again was our rebuild quoting activity was up, I think, over 45% on the legacy business. So that shows you that, that still has legs in there. Now, we've got to go win it and earn it. But lots of activity on that front as well.
There are no further questions registered at this time, I would like to turn the meeting back over to you, Mr Jewer.
Thank you, Valerie. Before concluding the call, I'd like to remind listeners that our Annual and Special Meeting of Shareholders will be held today at 10 a.m. in the Tuscana Banquet Hall at the Hilton Garden Inn in Vaughan. We'd be pleased to see you there. The meeting will also be available live via audio webcast, which can be accessed at our website tormont.com. Thank you, and that concludes our call for today. [Foreign Language]
Thank you. The conference has now ended. Please disconnect your lines at this time. And we thank you for your participation.