Rental revenues rise at H&E
By Helen Wright06 May 2014
US rental and sales company H&E Equipment Services has reported an increase in first quarter revenues and earnings, with growth in both its rental and direct sales divisions.
The company, based in Baton Rouge, Louisiana, said overall revenues for the three months to the end of March, 2014, were up 11.7% year-on-year to US$ 237 million.
Net income jumped 55.7% to $7.4 million, while EBITDA was up 22.2% to $62.7 million. The first quarter margin stood at 26.4%, against 24.2% a year ago.
Rental revenues increased 14.4% year-on-year to $86.2 million compared to a year ago. H&E said the first quarter gross margin for rental was 45.2%, compared to 44.6% a year ago, with average rental rates up 2.5%.
The company added that its average rental fleet age at March 31, 2014, was 34.4 months – compared to an industry average age of 45 months.
Meanwhile, new equipment sales were up 30.4% against the first quarter of 2013 to $69.5 million, with a gross margin of 30.7%, compared to 30.4% a year ago.
H&E CEO John Engquist said continued strength in the company’s rental and distribution businesses fuelled the positive results.
“Despite challenging weather conditions earlier in the year, rental revenues increased 14.4% compared to a year ago on a 45.2% margin, and new equipment sales grew 30.4% compared to a year ago as demand for cranes and earthmoving was high. We are extremely pleased with such a solid start to the year.”
Mr Engquist added that the company had a positive outlook for the rest of 2014. “We see the recovery in commercial construction is gaining momentum. Customer demand accelerated significantly in March and current construction activity is outpacing year-ago levels across all of our key markets, including our less industrial focused regions.
“We believe significant growth opportunities continue to exist in the markets we serve. We expect continued market penetration and growth during the rest of 2014.”