Extreme sport: Don Ahern, Ahern Rentals
By John Wyatt07 May 2008
Even with speculation that parts of the West are entering a recession, Ahern Rentals is doing better than ever. John Wyatt talks with its President, Don Ahern, in Las Vegas
Speaking with Don Ahern, president of one of the largest rental yards in North America and probably the largest independent, you get the sense he'd rather be out in the field working on repairs to his fleet than sitting in his office answering calls and attending to administrative duties all day. Not that he is uncommunicative; actually, he's quite gregarious, but the jokes are about no dinner as a kid unless the broke-down car or lawnmower was fixed.
Growing up with this kind of understanding of how equipment runs has without a doubt helped him run a business more efficiently. He says he can service or fix any equipment in his fleet – and ALH doesn't doubt it.
Ahern entered into aerial work platforms in 1978 at the age of 24, buying such machines as the Donkee Lift and Economy aerial equipment. He believed that aerials would someday replace scaffolding.
“No one uses scaffolding anymore unless it's required. There are certain applications where a lift won't replace scaffolding. But for the most part, the scaffolding has never seen the growth the AWP market did,” says Ahern, president and founder.
So, Ahern took out a loan himself and started up his small rental operation. According to him, his big break was in the early '80s when the MGM Hotel burnt down and he supplied several machines for that project, running each unit around the clock. This opportunity he says took his business to another level, and he was able to take out a loan, purchase more equipment and grow his fleet.
Today, he runs 44 locations in 11 states. His fleet collectively is 35,000; out of that number, there are 20,000 in aerial work platforms. For a more thorough division of his aerial fleet, Ahern estimates that out of his AWP number, 2,000 are rough terrain forklifts, 5,000 are booms and the balance in his scissor lift inventory. The rental yard also has one of the youngest fleet ages in North America, at around 24 months.
The industry as a whole (including manufacturers and its customers) has reported record years for 2006 and 2007, and Ahern has not bucked the trend, reporting an extremely strong 2007. So where does he go from here?
“We're up from this time last year. This year we're running above last year at the same time. And I don't know where this recession is that people are talking about,” says Ahern. “But there are certain things in our business that are down.”
What's down appears to be earth moving equipment, which Ahern says probably has a direct correlation – if this equipment is down, aerial work platforms could be soon to follow. Even though Ahern says things are very nice for the rental yard, he is slowing his outward growth and for the time being will not be opening up new locations. “Ahern Rentals is focused on in-store growth because we created nine new stores last year. So I like to kind of grow out and then focus inward and then move forward ahead again.” He also wants to spend this time getting his fleet utilization balanced.
“Heavy earth moving equipment is dropping off and now some of the smaller earth moving equipment is dropping off. Currently, the AWP is still not [dropping off]. But you're not going to have an AWP market unless there's some slabs put in. That's why I'm not being very aggressive right now.”
Ahern Rentals buys mostly JLG equipment (handlers and booms) and Skyjack (scissors).
“In 2007, we were the fifth largest buyer from JLG in North America. I buy mostly from Skyjack on scissors. I bought 3,000 scissors from them last year,” says Ahern. Sprinkled throughout the rental yard are also Genie and Snorkel machines.
This year, Ahern says the company has dramatically slowed its purchasing of new equipment. It will buy a small amount of equipment, Ahern says, to supplement some projects that need what the company currently cannot provide. Locally, there are several jobs in Las Vegas, including the City Center project next door to the Monte Carlo Hotel on Las Vegas Blvd. It's a high profile job and Ahern has “hundreds” of its machines on the project (including some Xtreme Manufacturing telehandlers and the Italian-made Dieci low pivot boom models). Ahern also says California is “very, very busy.”
Because the company is privately held but is SCC regulated and issues bonds, Ahern was unable to comment on current dollar and cent figures. However, he does say a third of its business is in Nevada; one-third in California and the other third the rest of the locations, from as far as New Jersey and Kansas.
For the first nine months of 2006, the company reported revenues at $170.6 million; for the same period in 2007, revenues were much further up at $211.9 million. With this 2007 figure, the company reported profits for the first three quarters at $83.5 million.
Ahern believes his toughest competition is not the nationals, but the independents. “The independent guys are much harder to compete with. So when we scout out new locations, we look for where the nationals are. They are the easiest guys to compete with. They only want to do one thing and drop the price. The independents charge a little bit more and they take good care of their people,” he says.
Even after 30 years in the business, Ahern doesn't look battered through years of running a highly successful rental yard. Once the company gauges what direction the economy will take in the West, he'll decide if it's time to move forward with more locations to be opened.
“We're sitting tight here, and absorbing the equipment that we received here from last year, just to get our utilization right,” he says. “It takes energy to expand all the time.”
It's no secret that Don Ahern also operates the Xtreme Manufacturing business, whose offices are directly across the street from the rental yard's main office on Bonanza, northwest of the Strip. Xtreme is most known for its heavy duty, high pivot boom telehandlers that range in sizes from 8,000 to 12,000 pounds. The manufacturer also distributes the Dieci small-pivot boom handlers, manufactured by Dieci at its Italian plant. But what got World of Concrete attendee's attention last year was the introduction of its XRM 1967 high reach machine, probably the highest reach telehandler on the market with a maximum reach of 67 feet. Ahern believes that nobody has identified the high reach market, yet he believes there is one.
“There's another couple of floors on a building that we can reach with a telehandler because it's a lot cheaper to take it off the truck and load it on a floor than unloading a pallet, setting it down on the job site and have the tower load the material and haul it up to the floor,” says Ahern. “I'm building an even bigger one for the identically same process right now,” that will exceed 67 feet that will be out next year. “It's a little different of a machine that will go twice as high.”
Xtreme's philosophy is to chase the niche markets. “We have some things that might be in the scissor/boom category but would not be anything like what is currently. There are some people that need niche machines so we are looking at a couple projects that are one-on machines.”
But can Xtreme compete with the larger manufacturers? Ahern says Xtreme cannot. You can never beat another man at his game, he says.
According to Ahern, the Xtreme machines are for customers that are “high users, hard users” that want a workhorse machine and are willing to pay. He says the Xtreme handlers cost approximately 12% more to an end user.
“We think there is about one in every 20 customers that represent a fit for Xtreme. My market share opportunity is 5% of the market. In 2006, the telehandler market was over 20,000 machines, so my potential for 2006 was a thousand machines. In 2006, I built about 300 machines.
“In 2007, I built about 466. I think the market went down around 15,000. In 2008, my hip shot is the true market is going to be 10,000 machines. And we're going to build about 504 machines,” he says.
However, if you live away from any Ahern Rentals location don't be surprised if you haven't seen these models. Ahern wants to control the distribution of these machines and only puts these units in his rental fleet. He says he sells the units to the yards for what it costs to build them, as well as retails these.
For the last 12 years, Xtreme has also offered truck beds. These were made before the telehandlers were introduced, back in the mid-90s. Ahern designed these truck beds himself. “When you have a rollback, you have a mechanism between the bed and frame that slides backwards on tracks. On my situation, there is no track needed, so the bed comes down about six inches closer to the ground. This allows the operator to reach across and chain it down a little faster,” he says.
Ahern Rentals recently acquired Rhino's Turf Equipment, a provider of lawn and garden equipment and services. Ahern retained the company's name, which has been in business for the past 24 years. A known name in the Las Vegas area, this operation sells tractors, utility vehicles, riding mowers and other lawn care tools, as well as parts and service provider.