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hi everyone happy Friday thank you so much for joining us for today's webinar as you can see today we'll be breaking down the pricing and the financing for the 718 e tree handler so a little bit about who we are my name is marina Turner and I am part of the digital marketing team here at Cinnabon I help facilitate these cinah Boggan webinars and bring educational material forward to you guys and here you we have Jerry SiC Alaska and he is a key member of or at Santa book and capital and is the go-to guy when it comes to any kind of financing for Santa Boggan equipment the jumping into the agenda for today for one we will do a brief overview of the 718 E and why it's an additional it's an excellent addition to the toolbox especially if you deal with multiple trees we'll go into a quick price analysis and the total cost of ownership and then Jerry will take over and discuss the financing options as well as the leaf by the hour program that's available as well as other creative payment payment terms and then I'll wrap up with explaining what the growth kits are so you know how they can help facilitate more business for the 7:18 and finally we'll have a live Q&A at the very end if any of you guys have questions throughout the presentation that just kind of popped into your head feel free to type in your questions below the video that you're viewing there is a little button on the left hand side that says leave a question so you can go ahead and click on that type in your question I will be able to monitor and see and we'll address it towards the end if for whatever reason we can't get to all the questions or we can't answer your question don't you worry we will put together a Q&A document that we will email to everybody after the presentation all right so let's go ahead and jump right in so here at Senegal again we really strive to design and purpose-built all our equipment to help solve for the industry challenges and we really believe that better equipment leads to better business growth and especially when it comes to handling multiple trees we really believe that the 718 e tree handler is an excellent addition to your toolbox so I stated it's not ideal for every single job out there of course it's not an end-all be-all but for it's for a particular application it really excels far more than other equipment out there because it was purpose-built for the urban forestry environment as you can see roadside tree removal ROI rrow I'm sorry clearing right away I should say utility and tree obstruction clearances guardrail and sound barrier tree cutting steep Bank tree removal along bridges and highways as well as tree removal along wetland edges you know along rivers and streams and and of course storm work one of our clients took his 70 teen out after the three Nor'easters in the Northeast this past winter and he really he got some some PR with the new station but it was amazing how quickly he was able to clear the roads and get everything up and running with the 718 so of course you know safe way to remove entangled and unpredictable trees post storm and of course along building and residential perimeters so some of our clients like to take out their 718 if they have five or more trees to cut you know an end of this in the same vicinity others prefer at least ten trees so it really kind of depends you know how far the location is and you know what you deem is make sense to you so you know some of our customers have different preferences but you know they're this is not equipment that you're going to take out for one tree so just keep that in mind okay moving into the base design criteria for you know what what inspired us to design and build this equipment is of course the following for safety you know we know that this is a big concern in this industry and if we could create equipment that removes a person from the cutting area and protects them inside of a cabin cab that was what we were aiming for performance is always key productivity we wanted to drastically increase the number of trees that can be processed in an hour and therefore in a day a lot of our customers are able to do tenfold operating cost we wanted to build equipment with very low operating cost and easy maintenance and finally flexibility we wanted to provide a tool carrier that was able to operate with multiple attachments without changes to the base unit the main benefits of course reflect all of our design criteria safety you know no manual hard labor and the resulting fatigue we all know that the greater the fatigue the greater the chances of some kind of injury or accident and worse so we want to of course to avoid that and then taking the vertical aspect out of tree work and into a protected cap now will always mean you know in certain jobs tree climbers and and you know some of the manual aspects of tree work but in particular environments or circumstances where we can take the operate up harm's way you know this equipment definitely allows us to do that excuse me productivity being able to handle tree removal at scale so there's millions of dying ash trees out there that are brittle and are dangerous to climb and so being and a lot of towns are dealing with the challenges of how to handle all the dynasties so you know something like the 718 is ideal for these kinds of projects not to mention forest fires and other natural disasters that affect large amounts of trees there's just simply not enough supply to meet the demand of all the tree work that's out there and that kind of plays into relief of labor constraints and bottlenecks you know being able to do more with less resources and therefore increasing company capacity so you know one person can do or one operator can do the work of three or four traditional crew members so you know that increases revenue per head so that allows a company to grow without necessarily adding additional workforce that same work first just goes a longer way and is able to take on more contracts and finally a competitive edge I mean being able to complete contracts not only safely but quickly is a huge plus you know one of our clients was able to complete a project that was kind of that was if done traditional methods with traditional methods would have taken about 20 days and he was able to do it in three days using the 718 so it's it's a you know huge difference there okay and here you will see a few photos of the 718 in action so we've taken taken out trees as you can see by you know by a stream here by some water being able to reach down even on a small slope over here cut grabbed and then you know swivel around and put into a nice neat pile is nice definitely and then the picture on the right is the 718 doing some tree removal around power lines so keeping the operator of course far away from them which is always good the next set of photos here is also similar here we have some road some roadside work and getting trees off of powerlines safely without having to you know put anyone in harm's way potentially and here are a few photos of the various attachments that can come with the 718 it's very easy to attach very quick and that allows for increased versatility for different projects so equipment is great we love it it increases productivity and of course it protects operators lives and you know as far as the owners or you know the managers it definitely provides that peace of mind that you know people are out of harm's way which is always great but the common questions that we have gotten and why we've created this webinar is the following you know how much is the equipment first of all and then will I have enough work to pay for the equipment and make a profit and are their financing releasing options available to be able to preserve my company cash flow pipin so jumping into the first of the three it will go into the price analysis and the total cost of ownership so let's all excuse me the total cost of ownership is based on five hundred and fifty thousand dollars for the equipment and breaking down the cost by including fuel and it's about two to three gallons per hour at least here in North Carolina based on our how much the fuel costs it would be about 750 per hour full maintenance would be six dollars and 20 cents per hour based on six years and ten thousand operating hours leased by the our offer the actual equipment would be fifty two dollars and seventy three cents per hour again based on six years and ten thousand operating hours and adding this all up all together the total cost comes out to sixty six dollars and forty three cents per hour so a little bit over sixty sixty six dollars so you know you can go ahead and think about what you normally make in an hour and then also keep in mind that projects that take less time to complete equal you know more revenue per hour just because you know you can do it takes less time to complete something of course that increases its its value and you're able to you know because time is money you're able to take that extra time now and dedicate to other projects that you can take on now we go into let's see here flexible and creative financing options so this is Jerry you can go ahead and take it away thanks marine I really appreciate it we'll step right into the plenty of options and one of the questions is why finance well the rates are still low so there's a lot of tractive programs that are available through Sena Boggan and with various different products whether the ownership type financing or leasing and that that's really the difference here loans and leases loans for ownership leasing is primarily usage so you use it for a certain time period where that may be a certain term 60 72 months or potentially hours which is leased by the our product which I'll I'll dig a little bit further into as we move through the presentation basically what it does it preserves cash so instead of putting an outlay of of cash up front allows you to spread that out over time and with one of the products whether depending on your company what works better for you to finance to own or finance to lease or finance just for ownership for for usage to me there may be some tax benefits you'll hear some of that during the rest of the presentation what I recommend is there there is some tax laws changing in 2019 best thing to do is really to to consult your accountants to see what would best suits you overall for your company but there are a lot of options that you can discuss with them and incentive of your capital can discuss with you if you have interest in some form of finance product I'll just kind of walk through some of the different things at a high level such as the loan and security agreement which is the most common basically a loan contract capital lease serves the same person same purpose of ownership it's just a different type contract then there's other type of operating leases uh many times you're you see them refer to its fair market value lease sometimes true leased residual lease tax relief net lease it really depends on who's using the term but basically again a lease that is the intent to own at the end of the year lease period you have the option to purchase but but your intent usually upfront as we use it for a given time period or give an hour period and turn that back in and replace that with another piece of equipment in addition to that there's a fixed price purchase option lease it's a lease to say that serves the same purpose as as usage the difference with the fixed price purchase option lease is on your contract that actually states for you how much you can purchase that that equipment for at the end of time I'll walk through not get too deep with it but the loan and security agreement again it's another form of ownership financing you make your monthly payments at the end of the term you're the owner of the equipment if you'd like to pay off somewhere early within the term because for whatever reason you have a your heavy on cash or something there is that option there's a minimal penalty to for prepayment and again it depends on the structure of your transaction where there may not be so again that's something we work through transaction by transaction and something to check with your accountants for looking at depreciation options to bring it to their attention and see if it makes more sense for you in your business the potentially own versus leasing and again each country are each each account or each company is different based on your needs the capital lease again if the user intends to own the equipment at the end of the lease it's a different type of lease a different type of contract where again if you make all your payments all the way through you are the owner at the end of the term and the dollar they don't they don't come after you for a dollar it's just the structure and many times this type of contract is used where a company has a master lease where they do various different type of finance products so for in most commonly when we're financing Senatobia units if it's ownership it's typically under a loan document under the operating lease user that don't necessarily intend on the equipment but you do have the option at the end if your things evolved maybe you feel that it might be best to be able to retain that piece of equipment for an extended period of time when you reach the end of the lease you have that option to buy it out for a price for a purchase option or you can lease it on a month-to-month basis or or turn it in those are your options on on under a leasing structure many many companies may be familiar or use some form of releasing product when they're financing their their company vehicles if the company vehicles operate under under mileage the lease operates under operating hours so it's designed for a specific term certain amount of hours and you run that out and I'll get into lease by the hour because there is a extension of it's an extension of a lease which gives you some options again you have off-balance sheet financing which is currently the structure for for leasing today but again some of that is changing depending on your company and depending on the structure in 2019 there'll be some tax law changes so it's best to check with your accountant they have not been implemented yet and so the timeframe may be different by each company your your your leasing will give you your lowest monthly payment again it concerns a little more capital and typically it's a hundred percent financing when you're doing recent now I'll talk briefly about least by the hour if this is a product that is taking a Constanta type lease product and offering some unique flexibility where a typical lease structure is designed off of certain terms for the example that marina showed earlier with 72 months 10,000 hours to for 2,000 hours a year so for at least by the our structure it you to structure into to calculate a payment you need to have a term a sell price and know what your hours are so you can determine what the future value of the equipment would be but the difference between a standard lease and a lease by the hour on a standard lease your contract is running out in the example out to 72 months and for whatever reason on a lease and it's the same thing not only for understandable capital it's under any elite standardly structure that you would have with any piece of equipment from any manufacturer if you ran 72 months but ran more than 10,000 hours you potentially could be faced with overtime charges so where we want to try to avoid that we came up with a product called lease by the hour and unfortunately we had a video that that the link is not work did not do not come through so we'll be following up so you'll be able to see the video that gives a high-level overview of the product itself but I'm going to talk through that anyway what basically the leased by the hour does it gives you flexibility flexibility of hours so which happens if you have a 72 month 10,000 hour contract if you hit your 10,000 hours at 60 months you've satisfied the contract and the contract is over so it eliminates any concern of any type of overtime hours now under the example 2,000 hours a year you may ask well I'm not going to run 2,000 hours a year every structure is different for each custom r so there may be situations where where someone says we'll look I'm going are going to be only running say 1500 hours a year so that's what we would structure your your your lease upon again leasing is not for everyone it's designed primarily for usage and at the end of term typically you're turning that piece of machinery in to get another piece or you can then extend the difference also with lease by the hour if you reach the end that say you 72 months 10,000 hours use in that example again and you reach a 72 months and you still haven't reached your hours you can you can then lease on a month-to-month basis and it reduces your monthly payment by 20% so it does provide some advantages on a standard structured lease you have a monthly payment and I'll give it I'll show you an example of what we have few more slides down the difference with lease by the hour you have a base payment so which means for for standard structure if you're talking and for the example at 2000 hours or 10000 hours over 72 months or 2000 hours a year you're permitted to operate 167 hours a month on the release by the hour structure if you run 167 hours you only owe the base payment if you run over 167 hours let's say for the UFC 101 170 hours you have your base payment which is always consistent throughout the term 167 hours and you ran three extra hours you would pay three hours times your costs per hour it's easy to calculate it's actually structured and given to you right when you're quoted and also on your dock on your lease document if you run under your hundred sixty-seven hours let's say for instance you only ran 167 hours are banked towards your following months so you don't lose out if you run under so it gives you a lot of advantage in especially if you're moving if you're if you find that business is going to continue to increase and that maybe you might reach that our limitation at some point before the actual contract term that was originally designed in this case 72 months for the example and you do that at 60 months 58 months 62 months whenever that might be once you reach that obligation your lease is over and then you do still have options to purchase continue a month-to-month or purchase the equipment so those options do not change again the least by the hours and extension of a standard lease product here's just a few thoughts when you look at a traditional fair market value lease versus released by the hour again you're looking at cool of maximum hours with a minimum annual usage so which is mean 167 hours per month or 2,000 hours a year for the example you have a flexible term because your term may end early you have to have a term upfront to be able to calculate attainment but then it's flexible it's all really based and driven by the hours of your usage there's no overtime and typically you're turning and that the life cycle of that equipment out of the least by the hour at the actual time you want that to end so you're not keeping equipment beyond their usable life again this is kind of maybe talking through some of the things that we talked about that I met may have mentioned a little more flexibility the pool of hours to pull from no overtime there's no need to rotate equipment because then some operations that's the case where you have to rotate because some equipment gets more hours and others so into the balanced usage based based on your Remagen worry the more you're working it typically the more money that you're making and that's that that and one less usage there's maybe on the slower times so you're paying less when business is slower 20% discount if you extend that lease there's no early termination fees so what that means is you run out of your contract there there's there's no there's no fees as if you follow through through the end of your contract whether it be hours and/or term and it's a reduced monthly payment so in so many times you can match up your expenses based on your usage again there's some other creative terms again if they're said you have the conventional loan you're the least you have at least by the hour there could be things a your your seasonal skip type of payments it can be possibly some deferred payments up front there's quarterly there's an you there's annually there's many different structures you can they don't have to be the traditional 24 36 48 60 you can be any of those terms in between so there's there's there's many different finance options that are available to you we encourage you to ask us if that if you're thinking something see see if it fits it may not but it's good to ask this kid kind of give you an example and this is working off a standard lease versus a standard loan product off the $550,000 unit a 16 month term if you're doing as a loan gives you an idea ten ten thousand five hundred dollars and change is your your loan payment if you release that product based on the structure of the sixty month or the two thousand hours a month this happens to be sixty month term it's roughly seventy five hundred dollars so it reduces your payment by roughly twenty nine hundred or twenty-nine percent and again if you're not intending to own there could be a cost savings to you Marino switch that back to you all right Thank You Jerry all right I know I'd like to talk a little bit about what the 718 a growth kits are you may or may not have seen some of the blog's we've had out about them but basically it's a complimentary six month marketing package kit that we've created to feed your 7:18 with new business the purpose is basically to keep the 718 busy and we do that with advertising in your local area towards your target demographic and we also help facilitate your own demo days to your local prospects whether it be your current client base or potential prospects you know utility companies municipalities etc etc so we help facilitate that and in general we provide an overall kind of consulting type of service so we can identify any gaps or areas of opportunity for your business to grow so you know the 7:18 yes it's awesome equipment we love it it's very innovative and revolutionary to the urban forestry industry but we also want you to look at it as a method to grow to grow your company and our goal with that is simply to help you guys be successful you know when you're successful