H&E rental revenues fall 22.1%
By Patrick Hill08 May 2009
Rental revenues at H&E Equipment Services fell 22.1% to US$55.5 million in the first quarter of 2009. That was a decline of $15.7 million from $71.2 million in the same period in 2008 for the US equipment sales and rental company.
Overall revenues for the company in the quarter decreased 24.2% to $186.2 million, compared to $245.8 million a year ago.
John Engquist, president and chief executive officer, said, "We continue to downsize our fleet and operations based on current demand and the anticipation that the environment persists for the remainder of the year...Our focus on the industrial sector has and continues to be beneficial to our business, but no industry is proving immune to the current economy."
Rental gross margin fell to 36.7% from 46.3% during the quarter. H&E said the fall was the result of a 9.9% decline in rental rates and a 13% reduction in time utilisation, compared to the same period in 2008.Time utilisation during the first quarter was 56.1%.
H&E said the value of its rental fleet at original cost was $763.2 million at the end of March, which is 4.5% down from 12 months ago and 2.9% down on the end of 2008.
The Louisiana-based company reduced rental fleet spending during the quarter and ended the period with negative net rental capital expenditure. It also reduced head count by 3% and cut other operating costs.
EBITDA fell $18.3 million to $38.1 million (20.4% of revenues), compared to $56.4 million (22.9% of revenues) a year ago. Income from operations decreased 57.6% to $11.1 million, compared to $26.2 million in 2008.
H&E operates 62 facilities coast-to-coast across the middle and southern parts of the United States. It sells, rents and provides parts and service support for aerial platform equipment, cranes, earthmoving equipment, and industrial lift trucks.