H&E Equipment Services saw market conditions improving in the third quarter, but revenues remain well below prior year levels.
Third quarter revenues for the US-based company came to $289.3 million, 18.1% lower than the same period in 2019.
This was largely the result of a year-on-year 18.8% decrease in total equipment rental revenues to $165.8 million.
Brad Barber, CEO and President of H&E, said, “However, our ongoing actions to reduce capital expenditures and operating costs resulted in significant free cash flow for the quarter. We have also continued to improve our leverage and liquidity.”
Adjusted EBITDA decreased 22.5% to $98.8 million in the third quarter of 2020, compared to a year ago, yielding a margin of 34.1% of revenues versus 36.1% in the equivalent period of 2019.
Average time utilisation in the third quarter was 63.8%. This was up 439 basis points from the second quarter, but was below the 71.4% recorded a year ago.
Barber said, “We are encouraged that demand in our end-user rental markets accelerated during the third quarter.”
Average rental rates were 4% below prior year levels, and they dropped by 0.4% sequentially.
Barber expressed some positivity, saying, “The current environment could further increase the secular shift toward renting equipment versus owning, creating greater opportunities for us to increase market share.
“Based on our improving visibility, we plan to accelerate our growth strategy. This includes significantly increasing the number of warm starts next year. We remain focused on pursuing acquisition opportunities in both the general rental and specialty rental businesses.”