The Dig

Todd Backman, President and CEO of Florida Coast Equipment and Big Orange Rental, discusses how they prepared for and managed the impact of hurricanes on their dealership and rental operations. They prioritize the safety of their employees and customers, prepping their stores and equipment for potential damage. They also ensure that essential equipment like generators and chainsaws are available in affected areas. The response to the hurricanes is ongoing, with some areas still underwater and ongoing demand for equipment. The rental business has seen increased demand, with priority given to existing accounts.

Welcome to The Dig, where equipment finance news editors connect with industry leaders and dealers to discuss news analysis, market trends, tips, and more. I am Johnny Martinez II, Senior Associate Editor of Equipment Finance News, the one news source for both dealers and lenders. And on today's episode of The Dig, I'm joined by Todd Backman, President and CEO of Florida Coast Equipment and Big Organe Rental, and I'll let Todd introduce himself. Thanks for joining us today. Yeah.

Happy to be here. Yeah. I'm Todd, President of Florida Coast and President and CEO of Florida Coast Equipment and Big Orange Rental. We are a 14-location Kubota dealership as well as Big Orange Rental, which is our rental arm. But even that is predominantly Kubota equipment, focusing in Florida. We have stores from Ocala to the Keys, which is basically three-quarters of the 80% of the population in Florida, 260 employees, and I'm excited to have a conversation today about what's going on in the industry.

Fantastic. Well, again, thank you so much for joining us. And, you know, you talked about it so much of what, well, everything you guys do is based in the Florida region, which has been drastically impacted by not one but two hurricanes that have come through. And so with the Florida market being impacted by these hurricanes, first off, how did you guys prepare to kind of manage the situation both at the dealership level and at the rental level because there's some subtle differences between the two? Yeah.

Yeah. So, look, the first and foremost we want to do is go, okay, guys, let's look at this from the human perspective. What do the individuals need to do at home? And so what we try to do, which can be fairly disruptive, is that anything that's in the cone kind of four days out, you know, four to five days out, we start prepping the store no matter where it is. And so if there's a chance that it's going to get affected, we start prepping the store.

And that is literally, you know, getting machines off of racks and getting things down, anything that can fly away or become a projectile, get it on the ground, get it inside, making sure crates are cleaned up, making sure trash is cleaned up, just kind of the really basics. And what we try to do is get in front of that so that when we're 24 hours out, people can go home and get their homes ready because a lot of times the people are waiting for the last minute to do their homes, but we try to get in front of it from the dealership perspective so that people can get out and take care of their homes.

The other thing we do is that, you know, if the East Coast isn't going to get affected, but the West Coast is, whether it's grapplers, generators, chainsaws, we try to get that stuff to the affected markets as quickly as possible. And kind of the way that goes is really the five days leading up to a storm, you're going to sell generators, you're going to sell chainsaws, that's what it's going to be, gas cans, whatever is essential to kind of get through that initial wave.

And so we try to get that stuff in quickly. Molly and her team are working on the marketing side to make sure folks know what we have and what we don't have because gas cans, you may have a floor full of gas cans and two days later you have no gas cans. You may have generators and then you don't have them. It just is a matter of how quickly these things go. And so that's kind of the first run.

Then right before the storm it's, you know, making sure that we have everybody's phone number, know where everybody's going. I usually am the first one in and so I'll usually go in and maybe another member of our team will go in. We find a hotel close to what we believe is going to be the most affected area. We're going in to make sure that we have Starlinks ready to go coming out of the storm and things like that.

So we want to kind of get in as quickly as possible. First and foremost, we're trying to check with our staff as quickly as we can, hey, is everybody safe? Everybody good to go? Then we're looking at our facilities. And then the immediate thing is like, okay, guys, this is go time. You know, we get up in the morning and say we're going to deliver superior customer service on rival product support every day. You find out whether you really believe that or whether you're able to do that after a storm because guys are putting together machines without power there.

You're doing contracts without power. You have no internet. You have no phones. I mean, you go third world country really quickly after a storm and so anything we can do on the front end to prepare for that is simple. I mean, things as simple as price books. In the old days, you had paper price books. Now everything's online so we're making sure that we're downloading price books coming out of making sure that if we have no power, we have no internet, that we can still get it.

And if you haven't lived through a storm, I mean, when the cell towers go, I mean, you have nothing. I mean, you have Starlink and that's it. People don't realize. You know, the old days you had paper contracts and you had paper quotes and all that. You don't have any of that. Everything is electronic now so you've got to figure out how to operate back in the dark ages again when this happens. And so anything you can do to prepare for that is what we're spending our time on.

Gotcha. And, you know, now we're a few months removed. How has the response sort of been at the dealership level both in terms of, hey, here's what we've done to kind of move forward and get our operations going, but also, you know, now we're starting to get to the back end of it. We're returning to whatever normal is at this point, right, because they try to get back to 100% normal. Yeah. So this storm was really strange.

One, the devastation was way worse than what the media covered. Obviously things in North Carolina had been so bad that what happened here was small. But, I mean, it's – look, we're talking November 15th today. We still have communities that are still underwater from that storm. So we haven't come out of it. There was – you know, there was a couple of pictures of the Tampa Bay Stadium and things like that. But that really wasn't the damage.

If you live in the northeast, you'll probably understand this best, is that, you know, usually after a big snowstorm, the main highways, they get clear really quickly and they look good. But the side roads were a disaster for weeks. That's really where we are right now. The main roads are clear, but there were tons of coastal flooding damage done. This storm did not bring the normal wind damage that you see in a lot of places. But it was tons of flooding, tons of inland flooding, and the damage on this was not – you didn't look at one area and it'd just be devastated.

You would drive two hours over a big rainstorm and then you'd show up and it looked like you had a massive flood. It didn't look like a hurricane, it looked like a massive flood. Then you'd drive across to Vero and, I mean, the tornadoes just wiped the place out. And so, you know, it's been spotty as far as how do you recover from that. So what we didn't get was that normal deal where, you know, you'd have massive powder towerages, they'd build one for weeks and things like that.

So you didn't see that normal storm there. Our Plant City store is still, I mean, 40%, 50% up, and we don't see any end in sight. Land O'Lakes store probably sold 100% more still than they sold all of last year. You know, those things are still going. And so – and look, our Plant City store went 10 days without power. So we were building machines and doing things in the dark, and honestly, we're not out of that hole yet.

It takes a while. Now, obviously, we've got other locations we can pull from and support, but that's been tough. I mean, look, one of the other issues that we faced there was we really couldn't get into Plant City all that well because there was no fuel for a significant amount of time. And so you couldn't get fuel for – we had fuel for the dealership, but even once that was gone, you didn't have the ability to run trucks, you didn't have the ability to get delivery trucks because you couldn't get things in.

So it took us a little bit longer to get out of it. With that said, we're on the back end of this now where it is just – it's kind of, I would say, normal. It's business, but it's business that's on steroids maybe right now. And so people are still really tired. People are running really hard. And what you'll see now is that – what we generally see is that for two to four months after a storm, you experience really high demand.

And then, honestly, that – when I say high demand, maybe you're up 30, 40 points. What we will see now is that that west coast and the area that was affected by it, they'll probably for the next 12 months run 10% higher than the rest of all of our locations because there's just that amount of work that needs to be done. And what's interesting is this storm was not like what we saw in Fort Myers two years ago and Naples the year before that.

Those storms, you could see you were up 20, 30%, 24 months after the storm hit. Just the damage was so bad. And so that's kind of what it begins to look like. What you've got now is a really tired team. You're just trying to support however you can because customers are tired. People are tired. And they've been running pretty hard for a couple months now. Gotcha. And just out of curiosity, is there a distinguishing there between the normal dealership locations and the rental locations? Or is it just kind of everything is going through the – No.

So everything's there together. Look, the reality in rental is that everybody all of a sudden wants to rent, and that becomes a gigantic problem. So there's no secret about this, is that the first people that get taken care of are our existing accounts. And really, even there, you've got to prioritize, is this someone that rents from me once a year or is this someone that rents from us all the time, they count on us. And so the first priority is taking care of those guys.

Second priority is the guys that are your casual renters. And then whatever else is left will rent, but honestly the fraud is so rampant after a storm that you've got to be really careful. We just won't rent just to anybody after a storm. We want to know who they are. We want to know that they're established in the market. And so rental obviously goes through the roof. The other problem with after a storm, and there's always that thing of you drive it like a rental.

I mean, after a storm, I mean, people take SPLs and they do stuff that they should have done with a dozer with it. And so you've got to really be clear about what you can and what you can't do with our equipment on the rental side. But when you come out of it, rental gets even more of a juice at that time. And look, here's the hard part, is that rental demand goes through the roof and sales go through the roof.

And so you start to go, okay, am I going to sell new machines or am I going to put new machines in our rental fleet? And you've got to begin to make those distinctions. But you can't overfleet yourself because when that initial boom goes away, you've got to have use for those machines. Yes, you know, that makes a ton of sense. And I think that's exactly the type of stuff that, you know, other dealers in your area or other dealers impacted by natural disasters really benefit from kind of that insight is that you've got to be careful how you manage this stuff because those margins can change so quickly.

Look, when a storm happens, you need to exert an incredible amount of discipline because you could load up your fleet or you could, I mean, you could make some massive mistakes because everybody's got tons of cash and everybody's willing to pay whatever and do whatever. And three months down the road, you all of a sudden find yourself 20% overfleeted. Or if you don't have control of AP and AR, you know, you've got customers that know you've got a crud of money and they've already left town.

I mean, the amount of people that pour into Florida after a storm is real. And look, we need that. So I'm not criticizing that because we need that support of people coming in to help us get cleaned up. But with that comes some crooks. And so you've just got to have super discipline and make sure you know what you're doing. Gotcha. And one of the things you talked about there as well is the people coming in, right? There's a lot of help coming in, but there's also a lot of going on in the community in that regard.

And so, you know, from your perspective, what role have dealers such as yourself sort of played in the community response? I know one of the things I saw is you guys were working with the National Guard when they were coming in to try to make sure they had what they needed. What is that role that equipment dealers need to play in the community, especially in times like this? So, look, at the end of the day, and our vision and vision values is that we want to build relationships.

We're not in the business of selling tractors and tracklers. And so we want to serve the communities that we're a part of. And so, generally speaking, we're going to get involved with National Guard and linemen. Those are the first guys that are in. And whether it's we can help feed them, whether we can help, you know, with hotel, whatever we can do early on with those guys as you were working on, because the linemen have a really dangerous job and honestly essential to get us going again.

And the National Guard, I mean, people get desperate. And so having those guys here and helping folks get out and secure the area are important. And so this year we spent a lot of time feeding National Guard, especially on that West Coast and things like that. So what we do is kind of we look for opportunities, but a lot of the communities that we're in kind of know, hey, this is where Florida Coast Sweetspot usually is.

And so they'll reach out to us pretty early on and say, hey, we've got this going on. Can you guys take care of food for these days and things like that? And that's usually where we jump in. Yes, and again, you know, sort of with online, you've already talked about the sun, but how long do you kind of foresee the impact of these storms really driving the Florida equipment market? So it, I hate to say this, it just depends on how bad the damage is.

If you look at what took place in Fort Myers, I think it was two years ago now, that was the big one there. I mean, Lee County, Charlotte County, that market's still 30, 40% hotter than the rest of the state. The damage was just so wide and so severe. And so the first step is let's just get the trees out of the road. The second step is now we've got to clean up all the debris. I mean, there were islands completely decimated, and homes, and neighborhoods.

And so then you've got to get the debris out of there. And then, okay, now we've got to rebuild. And that just takes time. I mean, one, materials, you know, everybody, inventories are better across the board. But labor isn't. And so it comes down to, okay, I have the materials, do I have the labor, do I have the machinery, can I get to it? Can I move, you know, building in Florida is not easy. I mean, there's just no sense of what's about it.

Our county government, we probably have some of the best in the business and understand development, but things just don't happen overnight. And so you've got to get new plans drawn, you've got to get, and you've got to rebuild. And so, look, Naples, or, you know, Charlotte County South, before these storms, had another year ahead of them. This last storm, I think you'll probably see well into Q2, Q3 next year, in that Sarasota to Tampa market. It was more isolated, but the damage was real.

And there'll be some, once we get everything cleaned up, we've got to go back to the drawing board and figure out what they want to, what it's going to look like now, going forward. Or are we, is it going to be residential, is it going to be commercial, are we going to make a new tourist destination? And those things often end up in massive public disputes. I mean, you know, whoever your elected city council is at the time is going to make some really big impacts.

Fort Myers Beach will never look like what it did again. I mean, it was this really cool, quaint town where the majority of families had owned these beach homes for 50 years, and they were from the Midwest. You know, and this is up for debate, but chances are it's going to look like Margaritaville over the next couple of years. And there's a lot of pros and cons to that. I'm not picking a side on that, but that's a real public debate that takes time.

And obviously, they're working with infrastructure and things like that while they're figuring that out. But that also can prolong these rebuilds. Right. And then for you guys as both the dealership and the rental house, you've got to kind of leave the room of, okay, where are we headed? What are we doing? What do we need to stock up on? What do we need to be prepared with to make sure we can meet the demands that are here? Yeah.

Look, the question for us is that, are we going to need a ton of zero-turn mowers to go in because we're going to put up new houses and new small properties and things like that in? Or is this going to be major commercial development? And that's land clearing, and that's different products. And you're going to need all of it at certain periods of the time there. But what's it going to look like going forward? Is this going to be...

This used to be a 200-unit compact tractor market. Well, is it going to now be a 25-unit compact tractor market and a 200-unit mower market? Because instead of having five acres, now people are going to have an acre. Those are the pieces you just don't know. Everybody needs a skid steer and a mini excavator and things like that to get whatever we're building built. So you're going to have that demand. Well, what is the products that are going to be needed and in demand post that? Will it look the same? And look, that gets really...

From a dealership perspective, if you're selling a whole bunch of compact tractors and mowers, that's very different than a big construction dealership. And so, okay, does my shop need to look different? Do the technicians that I have in place make sense? Am I stocking... I mean, it can really change the entire... No pun intended. It can change the landscape of the dealership. Yeah, I can only imagine with all the things we've heard about technician shortages and things of that nature that that's just another variable that makes it more complicated for you guys.

It does. And look, I can't figure out how real the technician shortage is because I'd be the first one to tell you there's a technician shortage. But then I'd also be the first one to tell you that we celebrate our sales team, we pay our sales team more, and then we wonder why the hell we don't have any technicians. And then we go, well, let's just keep doing what we did before. And so that's a little bit of a sidebar there, but yes, I mean, it's just all it does is complicate things and things that we need to look at and figure out how we're going to handle going forward.

And look, I would say this, and you didn't ask this question, but I'll tell you this. What I think separates Florida Coast and what I think has made us different is that we don't give a shit how it was done yesterday. We're always looking forward to tomorrow. And I think that's which really helps us here. And so that's where I say like, hey man, if the landscape's changed and now this is not a compact tractor market, it's a construction market, okay, I can either fuss about that or we can react to that.

And we're in the business of reacting and supporting the community and the industry however we need to. Gotcha. Well, I was going to get to a similar type question, so we'll get to it now, beyond what you just said, obviously. Is there any other pieces of advice you would give to equipment dealers in your area or even nationwide as we start to kind of get ready for next year? Obviously, storms were a factor in that, but just any piece of advice.

Look, if you wake up and do business tomorrow the way you did today, you got a problem. I don't care whether it's a storm, whether it's an election, whether it's an economic issue, the world is changing, good or bad. You can fuss about it, you can debate it, it doesn't matter. It's happening. I'll give you an example that will go. Okay, there's no doubt that we have climate change. I don't care whether it's man-made or it's natural.

Who cares? I don't care about that debate. But what I do know is that things are changing. I know that tides are higher. I know that temperatures are different. I know that things are different, and so I need to react to that. I look at our business the same way. Technology is changing. Millennials, Gen X, what they want in a workplace is changing. You know, look, I'm different than a baby boomer in the way I see things, and so what I would tell people is the last thing you should ever do is get set in your ways.

Do not be self-righteous about what you think is right. If you get a couple of core values, and ours is that we are going to provide solutions. Notice I don't say we're an equipment dealer. We are going to provide solutions, and then we're going to deliver superior customer support and unrivaled product support. In 10 years, will people drive tractors? I don't know. But what I can tell you is that Florida Coast is going to constantly be evaluating that and making sure that we can support the people that are buying that equipment however they need to be supported.

And so what I would say is be, you know, Michael Jackson talks about it, man, it's about man in the mirror. Totally look every day and go, am I adjusting? Am I building a business that is serving the community and the industries that we say we're here to serve and support to make sure that I'm relevant tomorrow? To me, I'm a big college football fan. You know, part of why Nebraska is where Nebraska is today is because they just stayed committed to the wishbone way too long.

The offenses were changing, the defenses were changing, but they had Tommy Frazier and they could run the wishbone better than anybody. Guess what? For a couple of years, they were better than anyone and no one could get there. But the people that were forward-thinking are dominating college football today and Nebraska is not. I don't want to be the Nebraska of the equipment business. I want to be on the front edge of all times, and that means constantly being willing to evaluate myself, evaluate my team, evaluate my company, and evaluate how we're doing things.

Yes, you know, that makes sense, and I'm appreciative of the college football analogy. I'm a Texas Tech graduate myself, and so I've seen Mike Leach disseminate all across the world, and now somebody, even the pro level, you're seeing the Air Raid-style offense translated. The big innovation that came and now the people are following it, and to your point, those who didn't innovate fell apart. Look, and look at Mike Leach, and that's the reality of this, is that the guy was revolutionary.

I don't think he ever got his national championship. He won some big games, and he did some stuff, and it's sad to see him die kind of so tragic and so early, but the reality is he figured out that things were changing, and he was going to be a change agent. To me, I watch this business a lot, and people get really stuck in their ways, and they get, I mean, their ideas are often as stale as their facility, and I think that's ...

If you want to be good at this business, be looking at how to improve it, but more importantly, watch what your customers are doing and what they need versus what you have built. Yes, you know, that's great insight, and I thank you so much for your time and for joining us on The Dig today. Thank you for joining us for The Dig, where we aim to take the industry and you to better results. This podcast is a production of Equipment Finance News.

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