H&E Equipment Services Reports Second Quarter 2019 Results

BATON ROUGE, La.–(BUSINESS WIRE)–$HEES–H&E Equipment Services, Inc. (NASDAQ: HEES) today announced results for the second quarter ended June 30, 2019.

SECOND QUARTER 2019 SUMMARY

  • Revenues increased 7.5% to $333.6 million versus $310.4 million a year ago.
  • Net income was $22.6 million in the second quarter compared to net income of $20.8 million a year ago. The effective income tax rate was 26.8% in the second quarter of 2019 and 25.5% in the second quarter of 2018.
  • Adjusted EBITDA increased 16.0% to $118.0 million in the second quarter compared to $101.8 million a year ago, yielding a margin of 35.4% of revenues compared to 32.8% a year ago.
  • Total equipment rental revenues for the second quarter of 2019 were $192.3 million, an increase of $32.8 million, or 20.6%, compared to $159.5 million a year ago (as adjusted).(1) Rental revenues (as previously reported) for the second quarter of 2019 were $173.8 million, an increase of $30.0 million, or 20.9%, compared to $143.8 million in the second quarter of 2018.(1)
  • New equipment sales decreased 21.8% to $53.6 million in the second quarter compared to $68.5 million a year ago.
  • Used equipment sales increased 12.4% to $36.1 million in the second quarter compared to $32.1 million a year ago.
  • Gross margin was 37.4% compared to 34.8% a year ago. The increase in gross margin was largely the result of a shift in revenue mix to rentals and the improvement in equipment sales and service gross margins.
  • Total equipment rental gross margins were 44.7% in the second quarters of 2019 and 2018 (as adjusted).(1) Rental gross margins (as previously reported) were 49.1% in both periods.(1)
  • Average time utilization (based on original equipment cost) was 71.2% compared to 72.0% a year ago. The size of the Company’s rental fleet based on original acquisition cost increased 15.6% from a year ago, to $1.9 billion.
  • Average rental rates increased 2.2% compared to a year ago and 0.6% sequentially.
  • Dollar utilization was 36.5% in the second quarter compared to 35.4% a year ago.
  • Average rental fleet age at June 30, 2019, was 34.6 months compared to an industry average age of 46.0 months.

____________

(1) For a reconciliation of adjustments to prior year data and historical presentations, see page 7.

Brad Barber, H&E Equipment Services’ chief executive officer and president, said, “We believe our performance is consistent with the ongoing strength in the non-residential construction markets. Our customers remain optimistic with solid visibility into their project pipelines for the remainder of this year and into 2020. As a result of strong demand during the second quarter, combined with solid operational execution, we achieved a 2.2% improvement in rates compared to a year ago and high physical utilization of 71.2%. Rental revenues increased 20.9% from the second quarter of 2018.”

Barber concluded, “Our outlook remains positive as we continue to see broad-based demand across our entire footprint encompassing all product types. The Gulf Coast remains strong and a new wave of large projects are being announced as anticipated. We believe the secular shift toward equipment rentals will continue. We remain focused on improving all areas of our business with an emphasis on growth in rental. We plan to execute this growth through same-store market share improvement, acquisitions and warm-start branch openings.”

FINANCIAL DISCUSSION FOR SECOND QUARTER 2019:

Revenue

Total revenues increased 7.5% to $333.6 million in the second quarter of 2019 from $310.4 million in the second quarter of 2018. Total equipment rental revenues increased 20.6% to $192.3 million compared to $159.5 million in the second quarter of 2018 (as adjusted).(1) Rental revenues (as previously reported) increased 20.9% to $173.8 million compared to $143.8 million in the second quarter of 2018.(1) New equipment sales were $53.6 million compared to $68.5 million a year ago. Used equipment sales increased 12.4% to $36.1 million compared to $32.1 million a year ago. Parts sales increased 5.3% to $31.9 million from $30.3 million in the second quarter of 2018. Service revenues were $16.7 million compared to $16.8 million a year ago.

Gross Profit

Gross profit increased 15.4% to $124.8 million from $108.1 million in the second quarter of 2018. Gross margin was 37.4% for the quarter ended June 30, 2019, as compared to 34.8% for the quarter ended June 30, 2018. On a segment basis, gross margin on total equipment rentals was 44.7% in both the second quarter of 2019 and the second quarter of 2018 (as adjusted).(1) Rental margins (as previously reported) were 49.1% in both periods.(1) On average, rental rates were 2.2% higher than rates in the second quarter of 2018. Time utilization (based on original equipment cost) was 71.2% in the second quarter of 2019 compared to 72.0% a year ago.

Gross margins on new equipment sales were 12.2% in the second quarter compared to 10.7% a year ago. Gross margins on used equipment sales increased to 35.4% from 32.3% a year ago. Gross margins on parts sales were 26.9% in the second quarter of 2019 compared to 27.6% a year ago. Gross margins on service revenues increased to 68.0% for the second quarter of 2019 compared to 65.7% in the second quarter of 2018.

Rental Fleet

At the end of the second quarter of 2019, the original acquisition cost of the Company’s rental fleet was $1.9 billion, an increase of $260.3 million from the end of the second quarter of 2018. Dollar utilization for the second quarter of 2019 was 36.5% compared to 35.4% for the second quarter of 2018.

___________

(1) For a reconciliation of adjustments to prior year data and historical presentations, see page 7.

Selling, General and Administrative Expenses

SG&A expenses for the second quarter of 2019 were $77.8 million compared with $69.0 million the prior year, an $8.8 million, or 12.7%, increase. SG&A expenses in the second quarter of 2019 as a percentage of total revenues were 23.3% compared to 22.3% a year ago. Employee salaries, wages, payroll taxes and related employee benefit and other employee related expenses increased $4.8 million, primarily as a result of our acquisition since June 30, 2018, and a larger workforce and higher incentive compensation related to increased profitability. Facility related expenses, primarily rent expense, increased $1.9 million. Depreciation and amortization increased $0.5 million. Expenses related to Greenfield branch expansions increased $0.8 million compared to a year ago.

Income from Operations

Income from operations for the second quarter of 2019 increased 10.6% to $47.7 million, or 14.3% of revenues, compared to $43.1 million, or 13.9% of revenues, a year ago.

Interest Expense

Interest expense was $17.3 million for the second quarter of 2019 compared to $15.7 million a year ago.

Net Income

Net income was $22.6 million, or $0.63 per diluted share, in the second quarter of 2019 compared to net income of $20.8 million, or $0.58 per diluted share, in the second quarter of 2018. The effective income tax rate was 26.8% in the second quarter of 2019 and 25.5% in the second quarter of 2018.

Adjusted EBITDA

Adjusted EBITDA for the second quarter of 2019 increased 16.0% to $118.0 million compared to $101.8 million in the second quarter of 2018. Adjusted EBITDA as a percentage of revenues was 35.4% compared with 32.8% in the second quarter of 2018.

Non-GAAP Financial Measures

This press release contains certain Non-GAAP measures (EBITDA, Adjusted EBITDA and recasting of certain revenue and cost of revenue numbers detailed below). Please refer to our Current Report on Form 8-K for a description of these measures and of our use of these measures. These measures as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these Non-GAAP measures are not a measurement of financial performance or liquidity under GAAP and should not be considered as alternatives to the Company’s other financial information determined under GAAP.

Conference Call

The Company’s management will hold a conference call to discuss second quarter 2019 results today, July 25, 2019 at 10:00 a.m. (Eastern Time). To listen to the call, participants should dial 323-794-2598 approximately 10 minutes prior to the start of the call. A telephonic replay will become available after 1:00 p.m. (Eastern Time) on July 25, 2019, and will continue through August 3, 2019, by dialing 719-457-0820 and entering the confirmation code 9872990.

The live broadcast of H&E Equipment Services’ quarterly conference call will be available online at www.he-equipment.com on July 25, 2019, beginning at 10:00 a.m. (Eastern Time) and will continue to be available for 30 days. Related presentation materials will be posted to the “Investor Relations” section of the Company’s web site at www.he-equipment.com prior to the call. The presentation materials will be in Adobe Acrobat format.

About H&E Equipment Services, Inc.

The Company is one of the largest integrated equipment services companies in the United States with 96 full-service facilities throughout the West Coast, Intermountain, Southwest, Gulf Coast, Mid-Atlantic and Southeast regions. The Company is focused on heavy construction and industrial equipment and rents, sells, and provides parts and services support for four core categories of specialized equipment: (1) hi-lift or aerial platform equipment; (2) cranes; (3) earthmoving equipment; and (4) industrial lift trucks. By providing equipment rental, sales, on site parts, repair, and maintenance functions under one roof, the Company is a one-stop provider for its customers’ varied equipment needs. This full service approach provides the Company with multiple points of customer contact, enabling it to maintain a high quality rental fleet, as well as an effective distribution channel for fleet disposal and provides cross-selling opportunities among its new and used equipment sales, rentals, parts sales, and services operations.

Forward-Looking Statements

Statements contained in this press release that are not historical facts, including statements about H&E’s beliefs and expectations, are “forward-looking statements” within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations are forward-looking statements. Statements containing the words “may”, “could”, “would”, “should”, “believe”, “expect”, “anticipate”, “plan”, “estimate”, “target”, “project”, “intend”, “foresee” and similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following: (1) general economic conditions and construction and industrial activity in the markets where we operate in North America; (2) our ability to forecast trends in our business accurately, and the impact of economic downturns and economic uncertainty in the markets we serve; (3) the impact of conditions in the global credit and commodity markets and their effect on construction spending and the economy in general; (4) relationships with equipment suppliers; (5) increased maintenance and repair costs as we age our fleet and decreases in our equipment’s residual value; (6) our indebtedness; (7) risks associated with the expansion of our business and any potential acquisitions we may make, including any related capital expenditures, or our inability to consummate such acquisitions; (8) our possible inability to integrate any businesses we acquire; (9) competitive pressures; (10) security breaches and other disruptions in our information technology systems; (11) adverse weather events or natural disasters; (12) compliance with laws and regulations, including those relating to environmental matters, corporate governance matters and tax matters, as well as any future changes to such laws and regulations; and (13) other factors discussed in our public filings, including the risk factors included in the Company’s most recent Annual Report on Form 10-K. Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission, we are under no obligation to publicly update or revise any forward-looking statements after the date of this release. These statements are based on the current beliefs and assumptions of H&E’s management, which in turn are based on currently available information and important, underlying assumptions. H&E is under no obligation to publicly update or revise any forward-looking statements after this press release, whether as a result of any new information, future events or otherwise. Investors, potential investors, security holders and other readers are urged to consider the above mentioned factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.

H&E EQUIPMENT SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Amounts in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

2019

 

2018

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

Equipment rentals

$

192,302

 

 

$

152,714

 

 

$

368,431

 

 

$

289,752

 

New equipment sales

 

53,596

 

 

 

68,539

 

 

 

112,699

 

 

 

115,032

 

Used equipment sales

 

36,128

 

 

 

32,140

 

 

 

65,762

 

 

 

56,993

 

Parts sales

 

31,871

 

 

 

30,281

 

 

 

62,299

 

 

 

58,432

 

Service revenues

 

16,725

 

 

 

16,788

 

 

 

32,293

 

 

 

31,824

 

Other

 

2,975

 

 

 

9,902

 

 

 

5,751

 

 

 

18,813

 

Total revenues

 

333,597

 

 

 

310,364

 

 

 

647,235

 

 

 

570,846

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

Equipment rentals

 

 

 

 

 

 

 

Rental depreciation

 

61,434

 

 

 

51,171

 

 

 

118,582

 

 

 

97,640

 

Rental expense

 

27,019

 

 

 

22,073

 

 

 

51,787

 

 

 

43,345

 

Rental other

 

17,847

 

 

 

13,530

 

 

 

34,122

 

 

 

25,630

 

 

 

106,300

 

 

 

86,774

 

 

 

204,491

 

 

 

166,615

 

New equipment sales

 

47,064

 

 

 

61,226

 

 

 

99,163

 

 

 

102,071

 

Used equipment sales

 

23,321

 

 

 

21,772

 

 

 

42,333

 

 

 

38,709

 

Parts sales

 

23,290

 

 

 

21,931

 

 

 

45,579

 

 

 

42,548

 

Service revenues

 

5,359

 

 

 

5,752

 

 

 

10,363

 

 

 

10,802

 

Other

 

3,482

 

 

 

4,806

 

 

 

6,825

 

 

 

9,413

 

Total cost of revenues

 

208,816

 

 

 

202,261

 

 

 

408,754

 

 

 

370,158

 

 

 

 

 

 

 

 

 

Gross Profit

 

124,781

 

 

 

108,103

 

 

 

238,481

 

 

 

200,688

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

77,840

 

 

 

69,046

 

 

 

156,487

 

 

 

134,926

 

Merger Costs

148

68

267

220

 

Gain on sales of property and equipment, net

 

880

 

 

 

4,114

 

 

 

1,621

 

 

 

4,887

 

 

 

 

 

 

 

 

 

Income from Operations

 

47,673

 

 

 

43,103

 

 

 

83,348

 

 

 

70,429

 

 

 

 

 

 

 

 

 

Interest expense

 

(17,267

)

 

 

(15,693

)

 

 

(34,122

)

 

 

(30,346

)

Other income, net

 

489

 

 

 

459

 

 

 

1,021

 

 

 

854

 

Income before provision for income taxes

 

30,895

 

 

 

27,869

 

 

 

50,247

 

 

 

40,937

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

8,281

 

 

 

7,098

 

 

 

13,390

 

 

 

10,688

 

Net income

$

22,614

 

 

$

20,771

 

 

$

36,857

 

 

$

30,249

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE:

 

 

 

 

 

 

 

Basic – Net income per share

$

0.63

 

 

$

0.58

 

 

$

1.03

 

 

$

0.85

 

Basic – Weighted average number of common shares outstanding

 

35,826

 

 

 

35,634

 

 

 

35,807

 

 

 

35,613

 

Diluted – Net income per share

$

0.63

 

 

$

0.58

 

 

$

1.02

 

 

$

0.84

 

Diluted – Weighted average number of common shares outstanding

 

36,016

 

 

 

35,906

 

 

 

35,994

 

 

 

35,893

 

Dividends declared per common share

$

0.275

 

 

$

0.275

 

 

$

0.55

 

 

$

0.55

 

 

H&E EQUIPMENT SERVICES, INC.

 

SELECTED BALANCE SHEET DATA (unaudited)

 

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

 

2019

 

2018

 

Cash

 

$

6,701

 

$

16,677

 

Rental equipment, net

 

 

1,244,499

 

 

1,141,498

 

Total assets

 

 

2,060,247

 

 

1,727,181

 

Total debt (1)

 

 

1,233,378

 

 

1,121,487

 

Total liabilities

 

 

1,784,656

 

 

1,470,378

 

Stockholders’ equity

 

 

275,591

 

 

256,803

 

Total liabilities and stockholders’ equity

 

$

2,060,247

 

$

1,727,181

 

 (1

)

Total debt consists of the aggregate amounts on the senior secured credit facility, senior unsecured notes and finance or capital lease obligations.

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands)

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

22,614

 

$

20,771

 

$

36,857

 

$

30,249

 

Interest Expense

 

17,267

 

 

15,693

 

 

34,122

 

 

30,346

 

Provision for income taxes

 

8,281

 

 

7,098

 

 

13,390

 

 

10,688

 

Depreciation

 

68,622

 

 

57,372

 

 

132,290

 

 

109,725

 

Amortization of intangibles

 

1,097

 

 

780

 

 

2,049

 

 

1,485

 

 

 

 

 

 

 

 

 

 

EBITDA

$

117,881

 

$

101,714

 

$

218,708

 

$

182,493

 

 

 

 

 

 

 

 

 

 

Merger costs

148

68

267

220

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

118,029

 

$

101,782

 

$

218,975

 

$

182,713

 

 

H&E EQUIPMENT SERVICES, INC.

 

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

 

(Amounts in thousands)

 

Quarter Ended 6/30/18(1)

 

Quarter

Ended

6/30/19

 

As

Previously

Reported

Hauling

Fees(a)

As Currently

Reported

Other

Rental

Fees(b)

As Adjusted

As Currently

Reported

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals(2)

 

 

Rentals

$

143,829

 

$

 

$

143,829

 

$

 

$

143,829

 

 

$

173,837

 

 

Rentals other

 

 

 

8,885

 

 

8,885

 

 

6,788

 

 

15,673

 

 

 

18,465

 

 

Total equipment rentals

 

143,829

 

 

8,885

 

 

152,714

 

 

6,788

 

 

159,502

 

 

 

192,302

 

 

New equipment sales

 

68,539

 

 

 

 

68,539

 

 

 

 

68,539

 

 

 

53,596

 

 

Used equipment sales

 

32,140

 

 

 

 

32,140

 

 

 

 

32,140

 

 

 

36,128

 

 

Parts sales

 

30,281

 

 

 

 

30,281

 

 

 

 

30,281

 

 

 

31,871

 

 

Services revenues

 

16,788

 

 

 

 

16,788

 

 

 

 

16,788

 

 

 

16,725

 

 

Other

 

18,787

 

 

(8,885

)

 

9,902

 

 

(6,788

)

 

3,114

 

 

 

2,975

 

 

Total revenues

 

310,364

 

 

 

 

310,364

 

 

 

 

310,364

 

 

 

333,597

 

 

 

 

COST OF REVENUES

 

 

Rental depreciation

 

51,171

 

 

 

 

51,171

 

 

 

 

51,171

 

 

 

61,434

 

 

Rental expense

 

22,073

 

 

 

 

22,073

 

 

 

 

22,073

 

 

 

27,019

 

 

Rental other

 

 

 

13,530

 

 

13,530

 

 

1,402

 

 

14,932

 

 

 

17,847

 

 

 

73,244

 

 

13,530

 

 

86,774

 

 

1,402

 

 

88,176

 

 

 

106,300

 

 

New equipment sales

 

61,226

 

 

 

 

61,226

 

 

 

 

61,226

 

 

 

47,064

 

 

Used equipment sales

 

21,772

 

 

 

 

21,772

 

 

 

 

21,772

 

 

 

23,321

 

 

Parts sales

 

21,931

 

 

 

 

21,931

 

 

 

 

21,931

 

 

 

23,290

 

 

Services revenues

 

5,752

 

 

 

 

5,752

 

 

 

 

5,752

 

 

 

5,359

 

 

Other

 

18,336

 

 

(13,530

)

 

4,806

 

 

(1,402

)

 

3,404

 

 

 

3,482

 

 

Total cost of revenues

 

202,261

 

 

 

 

202,261

 

 

 

 

202,261

 

 

 

208,816

 

 

 

 

GROSS PROFIT

 

 

Equipment rentals

 

 

Rentals

 

70,585

 

 

 

 

70,585

 

 

 

 

70,585

 

 

 

85,384

 

 

Rentals other

 

 

 

(4,645

)

 

(4,645

)

 

5,386

 

 

741

 

 

 

618

 

 

 

70,585

 

 

(4,645

)

 

65,940

 

 

5,386

 

 

71,326

 

 

 

86,002

 

 

New equipment sales

 

7,313

 

 

 

 

7,313

 

 

 

 

7,313

 

 

 

6,532

 

 

Used equipment sales

 

10,368

 

 

 

 

10,368

 

 

 

 

10,368

 

 

 

12,807

 

 

Parts sales

 

8,350

 

 

 

 

8,350

 

 

 

 

8,350

 

 

 

8,581

 

 

Services revenues

 

11,036

 

 

 

 

11,036

 

 

 

 

11,036

 

 

 

11,366

 

 

Other

 

451

 

 

4,645

 

 

5,096

 

 

(5,386

)

 

(290

)

 

 

(507

)

 

Total gross profit

$

108,103

 

 

$

 

 

$

108,103

 

 

$

 

 

$

108,103

 

 

$

124,781

 

 

 

 

GROSS MARGIN

 

 

Equipment rentals

 

 

Rentals

 

49.1

%

 

 

 

49.1

%

 

 

 

49.1

%

 

 

49.1

%

 

Rentals other

 

 

 

-52.3

%

 

-52.3

%

 

79.3

%

 

4.7

%

 

 

3.3

%

 

 

49.1

%

 

-52.3

%

 

43.2

%

 

79.3

%

 

44.7

%

 

 

44.7

%

 

New equipment sales

 

10.7

%

 

 

 

10.7

%

 

 

 

10.7

%

 

 

12.2

%

 

Used equipment sales

 

32.3

%

 

 

 

32.3

%

 

 

 

32.3

%

 

 

35.4

%

 

Parts sales

 

27.6

%

 

 

 

27.6

%

 

 

 

27.6

%

 

 

26.9

%

 

Services revenues

 

65.7

%

 

 

 

65.7

%

 

 

 

65.7

%

 

 

68.0

%

 

Other

 

2.4

%

 

52.3

%

 

51.5

%

 

-79.3

%

 

-9.3

%

 

 

-17.0

%

 

Total gross margin

 

34.8

%

 

 

 

34.8

%

 

 

 

34.8

%

 

 

37.4

%

 (1)

(a) We have recast the prior year period information to conform to the current year presentation of hauling fees and related cost of revenues included within Equipment Rentals rather than included within Other Revenues as previously reported.

(b) Upon our adoption of the new lease accounting guidance (ASC 842), certain ancillary fees associated with our equipment rental activities, such as damage waiver income, environmental fees and fuel and other recovery fees, are properly included within our Rental Revenue segment rather than Other Revenues as previously reported. Because we elected to not recast prior periods upon ASC 842 adoption, the table above recasts these amounts on an “As Adjusted” basis to conform to the current year presentation.

(2)

Pursuant to SEC Regulation S-X, our equipment rental revenues are aggregated and presented in our unaudited consolidated statements of income in this press release as a single line item, “Equipment Rentals”. The above table disaggregates our equipment rental revenues for discussion and analysis purposes only.

 

H&E EQUIPMENT SERVICES, INC.

 

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

 

(Amounts in thousands)

 

Six Months Ended 6/30/18(1)

 

Six Months

Ended

6/30/19

 

As

Previously

Reported

Hauling

Fees(a)

As Currently

Reported

Other

Rental

Fees(b)

As Adjusted

As Currently

Reported

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals(2)

 

 

Rentals

$

273,190

 

$

 

$

273,190

 

$

 

$

273,190

 

 

$

333,497

 

 

Rentals other

 

 

 

16,562

 

 

16,562

 

 

13,055

 

 

29,617

 

 

 

34,934

 

 

Total equipment rentals

 

273,190

 

 

16,562

 

 

289,752

 

 

13,055

 

 

302,807

 

 

 

368,431

 

 

New equipment sales

 

115,032

 

 

 

 

115,032

 

 

 

 

115,032

 

 

 

112,699

 

 

Used equipment sales

 

56,993

 

 

 

 

56,993

 

 

 

 

56,993

 

 

 

65,762

 

 

Parts sales

 

58,432

 

 

 

 

58,432

 

 

 

 

58,432

 

 

 

62,299

 

 

Services revenues

 

31,824

 

 

 

 

31,824

 

 

 

 

31,824

 

 

 

32,293

 

 

Other

 

35,375

 

 

(16,562

)

 

18,813

 

 

(13,055

)

 

5,758

 

 

 

5,751

 

 

Total revenues

 

570,846

 

 

 

 

570,846

 

 

 

 

570,846

 

 

 

647,235

 

 

 

 

COST OF REVENUES

 

Rental depreciation

97,640

97,640

97,640

118,582

 
 

Rental expense

 

43,345

 

 

 

 

43,345

 

 

 

 

43,345

 

 

 

51,787

 

 

Rental other

 

 

 

25,630

 

 

25,630

 

 

2,967

 

 

28,597

 

 

 

34,122

 

140,985

25,630

166,615

2,967

169,582

204,491

 
 

New equipment sales

 

102,071

 

 

 

 

102,071

 

 

 

 

102,071

 

 

 

99,163

 

 

Used equipment sales

 

38,709

 

 

 

 

38,709

 

 

 

 

38,709

 

 

 

42,333

 

 

Parts sales

 

42,548

 

 

 

 

42,548

 

 

 

 

42,548

 

 

 

45,579

 

 

Services revenues

 

10,802

 

 

 

 

10,802

 

 

 

 

10,802

 

 

 

10,363

 

 

Other

 

35,043

 

 

(25,630

)

 

9,413

 

 

(2,967

)

 

6,446

 

 

 

6,825

 

 

Total cost of revenues

 

370,158

 

 

 

 

370,158

 

 

 

 

370,158

 

 

 

408,754

 

 

 

 

GROSS PROFIT

 

 

Equipment rentals

 

Rentals

132,205

132,205

132,205

163,128

 
 

Rentals other

 

 

 

(9,068

)

 

(9,068

)

 

10,088

 

 

1,020

 

 

 

812

 

 

 

132,205

 

 

(9,068

)

 

123,137

 

 

10,088

 

 

133,225

 

 

 

163,940

 

 

New equipment sales

 

12,961

 

 

 

 

12,961

 

 

 

 

12,961

 

 

 

13,536

 

 

Used equipment sales

 

18,284

 

 

 

 

18,284

 

 

 

 

18,284

 

 

 

23,429

 

 

Parts sales

 

15,884

 

 

 

 

15,884

 

 

 

 

15,884

 

 

 

16,720

 

 

Services revenues

 

21,022

 

 

 

 

21,022

 

 

 

 

21,022

 

 

 

21,930

 

 

Other

 

332

 

 

9,068

 

 

9,400

 

 

(10,088

)

 

(688

)

 

 

(1,074

)

 

Total gross profit

$

200,688

 

$

 

$

200,688

 

$

 

$

200,688

 

 

$

238,481

 

 

 

 

GROSS MARGIN

 

 

Equipment rentals

 

 

Rentals

 

48.4

%

 

 

 

48.4

%

 

 

 

48.4

%

 

 

48.9

%

 

Rentals other

 

 

 

-54.8

%

 

-54.8

%

 

77.3

%

 

3.4

%

 

 

2.3

%

 

 

48.4

%

 

-54.8

%

 

42.5

%

 

77.3

%

 

44.0

%

 

 

44.5

%

 

New equipment sales

 

11.3

%

 

 

 

11.3

%

 

 

 

11.3

%

 

 

12.0

%

 

Used equipment sales

 

32.1

%

 

 

 

32.1

%

 

 

 

32.1

%

 

 

35.6

%

 

Parts sales

 

27.2

%

 

 

 

27.2

%

 

 

 

27.2

%

 

 

26.8

%

 

Services revenues

 

66.1

%

 

 

 

66.1

%

 

 

 

66.1

%

 

 

67.9

%

 

Other

 

0.9

%

 

54.8

%

 

50.0

%

 

-77.3

%

 

-11.9

%

 

 

-18.7

%

 

Total gross margin

 

35.2

%

 

 

 

35.2

%

 

 

 

35.2

%

 

 

36.8

%

(1)

(a) We have recast the prior year period information to conform to the current year presentation of hauling fees and related cost of revenues included within Equipment Rentals rather than included within Other Revenues as previously reported.

(b) Upon our adoption of the new lease accounting guidance (ASC 842), certain ancillary fees associated with our equipment rental activities, such as damage waiver income, environmental fees and fuel and other recovery fees, are properly included within our Rental Revenue segment rather than Other Revenues as previously reported. Because we elected to not recast prior periods upon ASC 842 adoption, the table above recasts these amounts on an “As Adjusted” basis to conform to the current year presentation.

(2)

Pursuant to SEC Regulation S-X, our equipment rental revenues are aggregated and presented in our unaudited consolidated statements of income in this press release as a single line item, “Equipment Rentals”. The above table disaggregates our equipment rental revenues for discussion and analysis purposes only.

Contacts

Leslie S. Magee

Chief Financial Officer

225-298-5261

lmagee@he-equipment.com

Kevin S. Inda

Vice President of Investor Relations

225-298-5318

kinda@he-equipment.com

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