H&E Equipment Services Reports Third Quarter 2019 Results

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

THIRD QUARTER 2019 SUMMARY

  • Revenues increased 9.6% to $353.0 million versus $322.1 million a year ago.
  • Net income increased 33.4% to $28.4 million in the third quarter compared to net income of $21.3 million a year ago. The effective income tax rate was 26.7% in the third quarter of 2019 and 26.4% in the third quarter of 2018.
  • Adjusted EBITDA increased 17.9% to $127.5 million in the third quarter compared to $108.2 million a year ago, yielding a margin of 36.1% of revenues compared to 33.6% a year ago.
  • Total equipment rental revenues for the third quarter of 2019 were $204.1 million, an increase of $31.4 million, or 18.2%, compared to $172.8 million a year ago (as adjusted).(1) Rental revenues (as previously reported) for the third quarter of 2019 were $184.8 million, an increase of $28.8 million, or 18.4%, compared to $156.0 million in the third quarter of 2018.(1)
  • New equipment sales decreased 4.7% to $65.0 million in the third quarter compared to $68.2 million a year ago.
  • Used equipment sales increased 2.9% to $31.2 million in the third quarter compared to $30.3 million a year ago.
  • Gross margin was 37.4% compared to 35.6% a year ago. The increase in gross margin was largely the result of a shift in revenue mix to rentals and higher equipment rental gross margins.
  • Total equipment rental gross margins were 46.3% in the third quarter of 2019 compared to 45.2% in the third quarter of 2018 (as adjusted).(1) Rental gross margins (as previously reported) were 50.8% in the third quarter of 2019 compared to 50.0% a year ago.(1)
  • Average time utilization (based on original equipment cost) was 71.4% compared to 71.0% a year ago. The size of the Company’s rental fleet based on original acquisition cost increased 12.3% from a year ago, to $2.0 billion.
 _____________________

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

  • Average rental rates increased 2.4% compared to a year ago and 1.0% sequentially.
  • Dollar utilization was 37.5% in the third quarter compared to 35.9% a year ago.
  • Average rental fleet age at September 30, 2019, was 34.9 months compared to an industry average age of 45.6 months.

Brad Barber, H&E Equipment Services’ chief executive officer and president, said, “Our third quarter results were solid as we continued to experience broad-based demand for rental equipment throughout our end-user construction markets. We achieved a 2.4% improvement in rates compared to a year ago and physical utilization increased 40 basis points to 71.4%, which helped drive an 18.4% increase in rental revenues.”

Barber concluded, “We are pleased with our year-to-date performance and ability to capitalize on the ongoing strength and opportunities in the well-diversified construction markets we serve throughout our 23-state footprint. Increasing the scale of our rental business continues to be a strategic priority for our business. We expect to achieve this goal through organic growth, acquisitions and warm-start store openings. Based on our current performance, solid level of project activity and our customers’ feedback, our market outlook remains positive.”

FINANCIAL DISCUSSION FOR THIRD QUARTER 2019:

Revenue

Total revenues increased 9.6% to $353.0 million in the third quarter of 2019 from $322.1 million in the third quarter of 2018. Total equipment rental revenues increased 18.2% to $204.1 million compared to $172.8 million in the third quarter of 2018 (as adjusted).(1) Rental revenues (as previously reported) increased 18.4% to $184.8 million compared to $156.0 million in the third quarter of 2018.(1) New equipment sales were $65.0 million compared to $68.2 million a year ago. Used equipment sales increased 2.9% to $31.2 million compared to $30.3 million a year ago. Parts sales were $31.5 million, the same as the year ago period. Service revenues increased 10.2% to $18.1 million compared to $16.4 million a year ago.

Gross Profit

Gross profit increased 15.2% to $132.1 million from $114.7 million in the third quarter of 2018. Gross margin was 37.4% for the quarter ended September 30, 2019, as compared to 35.6% for the quarter ended September 30, 2018. On a segment basis, gross margin on total equipment rentals was 46.3% in the third quarter of 2019 compared to 45.2% in the third quarter of 2018 (as adjusted).(1) Rental margins (as previously reported) were 50.8% in the third quarter of 2019 compared to 50.0% a year ago.(1) On average, rental rates were 2.4% higher than rates in the third quarter of 2018. Time utilization (based on original equipment cost) was 71.4% in the third quarter of 2019 compared to 71.0% a year ago.

Gross margins on new equipment sales were 11.6% in the third quarter compared to 11.5% a year ago. Gross margins on used equipment sales were 31.3% compared to 32.3% a year ago. Gross margins on parts sales were 26.4% in the third quarter of 2019 compared to 26.5% a year ago. Gross margins on service revenues increased to 67.4% for the third quarter of 2019 compared to 65.7% in the third quarter of 2018.

Rental Fleet

At the end of the third quarter of 2019, the original acquisition cost of the Company’s rental fleet was $2.0 billion, an increase of $216.2 million from the end of the third quarter of 2018. Dollar utilization for the third quarter of 2019 was 37.5% compared to 35.9% for the third 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 third quarter of 2019 were $77.3 million compared with $70.3 million the prior year, a $7.0 million, or 9.9%, increase. SG&A expenses in the third quarter of 2019 as a percentage of total revenues were 21.9% compared to 21.8% a year ago. Employee salaries, wages, payroll taxes and related employee benefit and other employee related expenses increased $3.1 million, primarily as a result of our acquisition since September 30, 2018, and a larger workforce and higher incentive compensation related to increased profitability. Facility related expenses, primarily rent expense, increased $1.0 million. Insurance expense increased $0.7 million and depreciation and amortization increased $0.6 million. Expenses related to Greenfield branch expansions increased $0.8 million compared to a year ago.

Income from Operations

Income from operations for the third quarter of 2019 increased 22.5% to $55.5 million, or 15.7% of revenues, compared to $45.3 million, or 14.1% of revenues, a year ago.

Interest Expense

Interest expense was $17.3 million for the third quarter of 2019 compared to $16.7 million a year ago.

Net Income

Net income was $28.4 million, or $0.79 per diluted share, in the third quarter of 2019 compared to net income of $21.3 million, or $0.59 per diluted share, in the third quarter of 2018. The effective income tax rate was 26.7% in the third quarter of 2019 and 26.4% in the third quarter of 2018.

Adjusted EBITDA

Adjusted EBITDA for the third quarter of 2019 increased 17.9% to $127.5 million compared to $108.2 million in the third quarter of 2018. Adjusted EBITDA as a percentage of revenues was 36.1% compared with 33.6% in the third 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 third quarter 2019 results today, October 24, 2019 at 10:00 a.m. (Eastern Time). To listen to the call, participants should dial 323-794-2575 approximately 10 minutes prior to the start of the call. A telephonic replay will become available after 1:00 p.m. (Eastern Time) on October 24, 2019, and will continue through November 2, 2019, by dialing 719-457-0820 and entering the confirmation code 8854109.

The live broadcast of H&E Equipment Services’ quarterly conference call will be available online at www.he-equipment.com on October 24, 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

 

Nine Months Ended

 

 

Sept. 30,

 

Sept. 30,

 

Sept. 30,

 

Sept. 30,

 

 

2019

 

2018

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

 

Equipment rentals

 

$

204,132

 

 

$

165,415

 

 

$

572,563

 

 

$

455,167

 

New equipment sales

 

 

65,010

 

 

 

68,233

 

 

 

177,709

 

 

 

183,265

 

Used equipment sales

 

 

31,180

 

 

 

30,294

 

 

 

96,942

 

 

 

87,287

 

Parts sales

 

 

31,499

 

 

 

31,484

 

 

 

93,798

 

 

 

89,916

 

Service revenues

 

 

18,105

 

 

 

16,426

 

 

 

50,398

 

 

 

48,250

 

Other

 

 

3,071

 

 

 

10,289

 

 

 

8,822

 

 

 

29,102

 

Total revenues

 

 

352,997

 

 

 

322,141

 

 

 

1,000,232

 

 

 

892,987

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Equipment rentals

 

 

 

 

 

 

 

 

Rental depreciation

 

 

63,065

 

 

 

55,060

 

 

 

181,647

 

 

 

152,700

 

Rental expense

 

 

27,889

 

 

 

22,936

 

 

 

79,676

 

 

 

66,281

 

Rental other

 

 

18,620

 

 

 

15,007

 

 

 

52,742

 

 

 

40,637

 

 

 

 

109,574

 

 

 

93,003

 

 

 

314,065

 

 

 

259,618

 

New equipment sales

 

 

57,475

 

 

 

60,394

 

 

 

156,638

 

 

 

162,465

 

Used equipment sales

 

 

21,409

 

 

 

20,512

 

 

 

63,742

 

 

 

59,221

 

Parts sales

 

 

23,171

 

 

 

23,129

 

 

 

68,750

 

 

 

65,677

 

Service revenues

 

 

5,898

 

 

 

5,628

 

 

 

16,261

 

 

 

16,430

 

Other

 

 

3,342

 

 

 

4,745

 

 

 

10,167

 

 

 

14,158

 

Total cost of revenues

 

 

220,869

 

 

 

207,411

 

 

 

629,623

 

 

 

577,569

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

132,128

 

 

 

114,730

 

 

 

370,609

 

 

 

315,418

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

 

77,296

 

 

 

70,346

 

 

 

233,783

 

 

 

205,272

 

Merger costs

 

  

47

 

219

314

439

Gain on sales of property and equipment, net

 

 

718

 

 

 

1,153

 

 

 

2,339

 

 

 

6,040

 

 

 

 

 

 

 

 

 

 

Income from Operations

 

 

55,503

 

 

 

45,318

 

 

 

138,851

 

 

 

115,747

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(17,331

)

 

 

(16,715

)

 

 

(51,453

)

 

 

(47,061

)

Other income, net

 

 

588

 

 

 

368

 

 

 

1,609

 

 

 

1,222

 

Income before provision for income taxes

 

 

38,760

 

 

 

28,971

 

 

 

89,007

 

 

 

69,908

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

10,329

 

 

 

7,657

 

 

 

23,719

 

 

 

18,345

 

 

 

 

 

 

 

 

 

 

Net income

 

$

28,431

 

 

$

21,314

 

 

$

65,288

 

 

$

51,563

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE:

 

 

 

 

 

 

 

 

Basic – Net income per share

 

$

0.79

 

 

$

0.60

 

 

$

1.82

 

 

$

1.45

 

Basic – Weighted average number of common shares outstanding

 

 

35,893

 

 

 

35,719

 

 

 

35,835

 

 

 

35,649

 

Diluted – Net income per share

 

$

0.79

 

 

$

0.59

 

 

$

1.81

 

 

$

1.44

 

Diluted – Weighted average number of common shares outstanding

 

 

36,046

 

 

 

35,926

 

 

 

36,012

 

 

 

35,904

 

Dividends declared per common share

0.275

$

0.275

 

$

0.825

$

0.825

 

H&E EQUIPMENT SERVICES, INC.

SELECTED BALANCE SHEET DATA (unaudited)

(Amounts in thousands)

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

2019

 

2018

Cash

 

$

10,596

 

$

16,677

Rental equipment, net

 

 

1,262,663

 

 

1,141,498

Total assets

 

 

2,068,835

 

 

1,727,181

Total debt (1)

 

 

1,254,741

 

 

1,121,487

Total liabilities

 

 

1,774,917

 

 

1,470,378

Stockholders’ equity

 

 

293,918

 

 

256,803

Total liabilities and stockholders’ equity

 

$

2,068,835

 

$

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

September 30,

 

Nine Months Ended

September 30,

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

28,431

 

$

21,314

 

$

65,288

 

$

51,563

 

Interest Expense

 

17,331

 

 

16,715

 

 

51,453

 

 

47,061

 

Provision for income taxes

 

10,329

 

 

7,657

 

 

23,719

 

 

18,345

 

Depreciation

 

70,320

 

 

61,342

 

 

202,610

 

 

171,067

 

Amortization of intangibles

 

1,042

 

 

930

 

 

3,091

 

 

2,415

 

 

 

 

 

 

 

 

 

 

EBITDA

$

127,453

 

$

107,958

 

$

346,161

 

$

290,451

 

 

 

 

 

 

 

 

 

 

Merger costs

47

219

314

 

 

439

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

127,500

 

$

108,177

 

$

346,475

 

$

290,890

 

 

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands)

Quarter Ended 9/30/18(1)

 

Quarter

Ended

9/30/19

As

Previously

Reported

Hauling

Fees(a)

As Currently

Reported

Other

Rental

Fees(b)

As Adjusted

As Currently

Reported

REVENUES

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals(2)

 

Rentals

$

156,037

 

$

 

$

156,037

 

$

 

$

156,037

 

 

$

184,797

 

Rentals other

 

 

 

9,378

 

 

9,378

 

 

7,356

 

 

16,734

 

 

 

19,335

 

Total equipment rentals

 

156,037

 

 

9,378

 

 

165,415

 

 

7,356

 

 

172,771

 

 

 

204,132

 

New equipment sales

 

68,233

 

 

 

 

68,233

 

 

 

 

68,233

 

 

 

65,010

 

Used equipment sales

 

30,294

 

 

 

 

30,294

 

 

 

 

30,294

 

 

 

31,180

 

Parts sales

 

31,484

 

 

 

 

31,484

 

 

 

 

31,484

 

 

 

31,499

 

Services revenues

 

16,426

 

 

 

 

16,426

 

 

 

 

16,426

 

 

 

18,105

 

Other

 

19,667

 

 

(9,378

)

 

10,289

 

 

(7,356

)

 

2,933

 

 

 

3,071

 

Total revenues

 

322,141

 

 

 

 

322,141

 

 

 

 

322,141

 

 

 

352,997

 

 

COST OF REVENUES

 

Rental depreciation

 

55,060

 

 

 

 

55,060

 

 

 

 

55,060

 

 

 

63,065

 

Rental expense

 

22,936

 

 

 

 

22,936

 

 

 

 

22,936

 

 

 

27,889

 

Rental other

 

 

 

15,007

 

 

15,007

 

 

1,673

 

 

16,680

 

 

 

18,620

 

 

77,996

 

 

15,007

 

 

93,003

 

 

1,673

 

 

94,676

 

 

 

109,574

 

New equipment sales

 

60,394

 

 

 

 

60,394

 

 

 

 

60,394

 

 

 

57,475

 

Used equipment sales

 

20,512

 

 

 

 

20,512

 

 

 

 

20,512

 

 

 

21,409

 

Parts sales

 

23,129

 

 

 

 

23,129

 

 

 

 

23,129

 

 

 

23,171

 

Services revenues

 

5,628

 

 

 

 

5,628

 

 

 

 

5,628

 

 

 

5,898

 

Other

 

19,752

 

 

(15,007

)

 

4,745

 

 

(1,673

)

 

3,072

 

 

 

3,342

 

Total cost of revenues

 

207,411

 

 

 

 

207,411

 

 

 

 

207,411

 

 

 

220,869

 

 

GROSS PROFIT

 

Equipment rentals

 

Rentals

 

78,041

 

 

 

 

78,041

 

 

 

 

78,041

 

 

 

93,843

 

Rentals other

 

 

 

(5,629

)

 

(5,629

)

 

5,683

 

 

54

 

 

 

715

 

 

78,041

 

 

(5,629

)

 

72,412

 

 

5,683

 

 

78,095

 

 

 

94,558

 

New equipment sales

 

7,839

 

 

 

 

7,839

 

 

 

 

7,839

 

 

 

7,535

 

Used equipment sales

 

9,782

 

 

 

 

9,782

 

 

 

 

9,782

 

 

 

9,771

 

Parts sales

 

8,355

 

 

 

 

8,355

 

 

 

 

8,355

 

 

 

8,328

 

Services revenues

 

10,798

 

 

 

 

10,798

 

 

 

 

10,798

 

 

 

12,207

 

Other

 

(85

)

 

5,629

 

 

5,544

 

 

(5,683

)

 

(139

)

 

 

(271

)

Total gross profit

$

114,730

 

$

 

$

114,730

 

$

 

$

114,730

 

 

$

132,128

 

 

GROSS MARGIN

 

Equipment rentals

 

Rentals

 

50.0

%

 

 

 

50.0

%

 

 

 

50.0

%

 

 

50.8

%

Rentals other

 

 

 

-60.0

%

 

-60.0

%

 

77.3

%

 

0.3

%

 

 

3.7

%

 

50.0

%

 

-60.0

%

 

43.8

%

 

77.3

%

 

45.2

%

 

 

46.3

%

New equipment sales

 

11.5

%

 

 

 

11.5

%

 

 

 

11.5

%

 

 

11.6

%

Used equipment sales

 

32.3

%

 

 

 

32.3

%

 

 

 

32.3

%

 

 

31.3

%

Parts sales

 

26.5

%

 

 

 

26.5

%

 

 

 

26.5

%

 

 

26.4

%

Services revenues

 

65.7

%

 

 

 

65.7

%

 

 

 

65.7

%

 

 

67.4

%

Other

 

-0.4

%

 

60.0

%

 

53.9

%

 

-77.3

%

 

-4.7

%

 

 

-8.8

%

Total gross margin

 

35.6

%

 

 

 

35.6

%

 

 

 

35.6

%

 

 

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)

Nine Months Ended 9/30/18(1)

 

Nine Months

Ended 9/30/19

As

Previously

Reported

Hauling

Fees(a)

As Currently

Reported

Other

Rental

Fees(b)

As Adjusted

As Currently

Reported

REVENUES

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals(2)

 

Rentals

$

429,227

 

$

 

$

429,227

 

$

 

$

429,227

 

 

$

518,294

 

Rentals other

 

 

 

25,940

 

 

25,940

 

 

20,411

 

 

46,351

 

 

 

54,269

 

Total equipment rentals

 

429,227

 

 

25,940

 

 

455,167

 

 

20,411

 

 

475,578

 

 

 

572,563

 

New equipment sales

 

183,265

 

 

 

 

183,265

 

 

 

 

183,265

 

 

 

177,709

 

Used equipment sales

 

87,287

 

 

 

 

87,287

 

 

 

 

87,287

 

 

 

96,942

 

Parts sales

 

89,916

 

 

 

 

89,916

 

 

 

 

89,916

 

 

 

93,798

 

Services revenues

 

48,250

 

 

 

 

48,250

 

 

 

 

48,250

 

 

 

50,398

 

Other

 

55,042

 

 

(25,940

)

 

29,102

 

 

(20,411

)

 

8,691

 

 

 

8,822

 

Total revenues

 

892,987

 

 

 

 

892,987

 

 

 

 

892,987

 

 

 

1,000,232

 

 

COST OF REVENUES

 

Rental depreciation

 

152,700

 

 

 

 

152,700

 

 

 

 

152,700

 

 

 

181,647

 

Rental expense

 

66,281

 

 

 

 

66,281

 

 

 

 

66,281

 

 

 

79,676

 

Rental other

 

 

 

40,637

 

 

40,637

 

 

4,640

 

 

45,277

 

 

 

52,742

 

 

218,981

 

 

40,637

 

 

259,618

 

 

4,640

 

 

264,258

 

 

 

314,065

 

New equipment sales

 

162,465

 

 

 

 

162,465

 

 

 

 

162,465

 

 

 

156,638

 

Used equipment sales

 

59,221

 

 

 

 

59,221

 

 

 

 

59,221

 

 

 

63,742

 

Parts sales

 

65,677

 

 

 

 

65,677

 

 

 

 

65,677

 

 

 

68,750

 

Services revenues

 

16,430

 

 

 

 

16,430

 

 

 

 

16,430

 

 

 

16,261

 

Other

 

54,795

 

 

(40,637

)

 

14,158

 

 

(4,640

)

 

9,518

 

 

 

10,167

 

Total cost of revenues

 

577,569

 

 

 

 

577,569

 

 

 

 

577,569

 

 

 

629,623

 

 

GROSS PROFIT

 

Equipment rentals

 

Rentals

 

210,246

 

 

 

 

210,246

 

 

 

 

210,246

 

 

 

256,971

 

Rentals other

 

 

 

(14,697

)

 

(14,697

)

 

15,771

 

 

1,074

 

 

 

1,527

 

 

210,246

 

 

(14,697

)

 

195,549

 

 

15,771

 

 

211,320

 

 

 

258,498

 

New equipment sales

 

20,800

 

 

 

 

20,800

 

 

 

 

20,800

 

 

 

21,071

 

Used equipment sales

 

28,066

 

 

 

 

28,066

 

 

 

 

28,066

 

 

 

33,200

 

Parts sales

 

24,239

 

 

 

 

24,239

 

 

 

 

24,239

 

 

 

25,048

 

Services revenues

 

31,820

 

 

 

 

31,820

 

 

 

 

31,820

 

 

 

34,137

 

Other

 

247

 

 

14,697

 

 

14,944

 

 

(15,771

)

 

(827

)

 

 

(1,345

)

Total gross profit

$

315,418

 

$

 

$

315,418

 

$

 

$

315,418

 

 

$

370,609

 

 

GROSS MARGIN

 

Equipment rentals

 

Rentals

 

49.0

%

 

 

 

49.0

%

 

 

 

49.0

%

 

 

49.6

%

Rentals other

 

 

 

-56.7

%

 

-56.7

%

 

77.3

%

 

2.3

%

 

 

2.8

%

 

49.0

%

 

-56.7

%

 

43.0

%

 

77.3

%

 

44.4

%

 

 

45.1

%

New equipment sales

 

11.3

%

 

 

 

11.3

%

 

 

 

11.3

%

 

 

11.9

%

Used equipment sales

 

32.2

%

 

 

 

32.2

%

 

 

 

32.2

%

 

 

34.2

%

Parts sales

 

27.0

%

 

 

 

27.0

%

 

 

 

27.0

%

 

 

26.7

%

Services revenues

 

65.9

%

 

 

 

65.9

%

 

 

 

65.9

%

 

 

67.7

%

Other

 

0.4

%

 

56.7

%

 

51.4

%

 

-77.3

%

 

-9.5

%

 

 

-15.2

%

Total gross margin

 

35.3

%

 

 

 

35.3

%

 

 

 

35.3

%

 

 

37.1

%

(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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