H&E rental revenues hit but positive signs appear

06 August 2009

Rental revenues at H&E Equipment Services in the US fell by 33.4% to US$50.1 million for the second quarter of the year. Total revenues, including H&E's large new equipment sales business, fell by 36.2% to $180.2 million compared to the same quarter in 2008. Net profits fell to $0.3 million from $16.1 million.

"The recession continues to heavily impact our non-residential construction and industrial end-markets," said John Engquist, H&E Equipment Services' president and chief executive officer. "In spite of very weak demand for our products and services, we were able to remain profitable, increase liquidity and strengthen our balance sheet."

"While business conditions did not improve during the second quarter, we are encouraged by some positive signs that we are seeing in the economy," said Mr Engquist.

"The banking system appears to have stabilised and credit markets have improved. We are also encouraged by signs of stabilisation in the utilisation of our rental fleet. I believe we have successfully scaled our business to the current environment and are well positioned to take advantage of the recovery when it begins."

H&E said that dollar utilisation was 27.1% compared to 37.5% for the second quarter of 2008, reflecting lower year-over-year average rental rates and lower time utilization. On average, rental rates declined 15.8% as compared to the second quarter of 2008, while time utilization was 55.3% in the second quarter of 2009 compared to 67.9% a year ago.

Meanwhile, the company is advertising a used AWP "liquidation sale" on its website, offering "deeply discounted prices. The product on offer - with prices listed - include Skyjack, Genie and JLG scissors; JLG and Genie booms; and Gehl, Genie and JLG telehandlers.

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