H&E Equipment Services has reported a 23.4% rise in its first quarter 2019 rental revenues to US$159.7 million, compared to $129.4 million in the first quarter of the previous year.
Brad Barber, the company’s CEO and President, said, “Our business is off to a strong start this year, delivering favourable results for the first quarter. Demand for equipment in our non-residential construction markets remained healthy and our rental business produced strong gains.”
Total equipment rental revenues were up 22.9% to $176.1 million, compared to $143.3 million in the equivalent period of 2018.
H&E’s revenues were also up 20.4% from the first quarter of 2018 to $313.6 million, and net income rose from $9.5 million in the first quarter of 2018 to $14.2 million in the equivalent period this year.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 24.7% to $100.9 million, compared to $80.9 million in the same period of last year, yielding a margin of 32.2% of revenues, compared to 31.1% a year ago.
The company’s new equipment sales were up 27.1% to $59.1 million and used equipment sales increased 19.2% to $29.6 million.
The improvement in gross margin from 35.5% in the first quarter of 2018 to 36.3% in the equivalent quarter this year was largely attributed to an improvement in rental and used equipment sales gross margins.
Average time utilisation was down but only marginally to 70%, compared to 70.4% in the first quarter of 2018.
The size of H&E’s rental fleet based on original acquisition cost increased 23.4% year-on-year to $1.9 billion, and average rental rates rose by 2.3% compared to the previous year, and 0.3% compared to the previous quarter.
At the end of March 2019, average rental fleet age was 35.2 months, compared to an industry average age of 46.5 months.
Barber said, “With clearer visibility into the year, our outlook remains positive. Since the return to normal seasonal conditions, project activity in our end-user markets is accelerating and physical utilisation is improving. We remain extremely focused on growing our business both organically and through acquisitions.”