First Quarter Earnings Announced

May 4, 2005 — With the success of the late winter/early spring expositions, major manufacturers and rental companies in North America are announcing strong revenues and earnings in the first quarter of 2005. Manitowoc, Pinguely-Haulotte, Ingersoll-Rand, Gehl, Atlas Copco, and United Rentals are among those that reported strong results.

 

Manitowoc Co., Manitowoc, Wis., announced strong increases in sales and earnings for the first quarter that ended March 31, 2005. Net sales increased 30 percent to $536.9 million from $411.8 million during the same period in 2004. Of particular significance, the Crane Group's performance exceeded company expectations by increased net sales by 42 percent to $358 million, from $252.6 million in first quarter 2004. Operating earnings nearly doubled to $20.4 million, and the backlog increased substantially to $532 million, up from $340 million at the end of 2004 and $329 million at the end of Q1 2004.

 

“The strength of cranes is particularly encouraging because this business tends to lag the construction industry business cycle,” said Terry Growcock, Manitowoc's chairman and chief executive officer. “If past trends remain consistent, we are several years away from the next peak in the global crane market.” Growcock also said the crawler crane demand has been strong in many non-US markets, and the continued growth shows sign that the North American crawler crane market may begin to rebound later in 2005 or early 2006.

 

First quarter activity for Pinguely-Haulotte, L'Horme, France, includes a 71 percent growth in net sales, reaching $103.5 million for the first quarter of 2005 compared to $60.3 million in the same period of 2004. Haulotte's order book progressed about 50 percent, compared to the same period last year. The company continues to affirm its 2005 objecting with net sales and profitability growth to be 15 to 20 percent in value. Haulotte's half year sales disclosure will be release July 21, 2005.

 

Bermuda-based Ingersoll-Rand Co. reported its first quarter profits jumped 24 percent. The company earned $223.1 million for the period, up from $179.5 million in the first quarter 2004. Earnings from continuing operations, excluding acquisitions, were $232.3 million. Overall, first-quarter orders for the total company rose 5 percent, and revenues increased 13 percent. Construction equipment sales grew 22 percent to $270 million. Ingersoll-Rand said profit growth was driven by higher volumes, price increases, and productivity improvement actions. The company also raised its second quarter forecast profits from $1.55 to $1.65 per share, or $1.60 to $1.70 per share from continuing operations, and the full year outlook for earnings from continuing operations were raised from $5.75 to $5.95 per share.

 

For the first quarter of 2005, Gehl Co., West Bend, Wis., reported net sales of $419 million, an increase of $34.3 million or 41 percent from first quarter 2004. Net income for the quarter was $4.9 million, compared to net income of $2.9 million earned the same time last year. Construction equipment agricultural equipment net sales were up 54 percent and 15 percent, respectively, for the quarter, compared to the first quarter of 2004.

 

“We are off to a good start in 2005,” said William D. Gehl, chairman and chief executive officer. “Sales of telescopic handlers have been particularly strong as the rental market continues to strengthen. Our compact equipment strategic focus and emphasis on chasing costs out of every facet of our business have proven to be the right course for the company.”

 

RSC Equipment Rental's parent company Atlas Copco, Stockholm, Sweden, announced strong growth and record profit margins in the first quarter. Orders increased 17 percent, and revenues increased 10 percent in volume. The operating profit margin increased to 15.6 percent. Demand for the Group's products and services in North America continued to improve for new equipment and aftermarket products. Non-residential construction is reported to be up, which benefited the demand for rental equipment and services.

 

United Rentals, Inc., Greenwich, Conn., announces total revenues for the first quarter 2005 were $732 million, an increase of 13.5% compared with $645 million for the same period last year. Cash flow from operations for the quarter was $149 million and free cash flow was $45 million, compared with cash flow from operations of $203 million and free cash flow of $87 million for last year's first quarter. Free cash flow was after total rental and non-rental capital expenditures of $170 million in the 2005 period and $171 million in the 2004 period. The decrease in cash flow from operations and free cash flow in 2005 was attributable to less cash generated from working capital. 

The size of the rental fleet, as measured by the original equipment cost, was $3.7 billion at the end of the first quarter of 2005, and the age of the fleet was 40 months. The size and age were unchanged from year-end 2004.

 

General Rentals segment revenues represented 94% of total revenues in the first quarter of 2005, in which first quarter revenues were $688 million. This is an increase of 14.7% compared with $599 million for the first quarter of 2004. Rental rates for the first quarter increased 9.7% and same-store rental revenues increased 11.1% from the first quarter of 2004. The only bad news came from the Traffic Control segment where United continues to struggle, due in part to reduced government spending on road construction. Efforts are being made to dispose of any non-profitable operation.

 

“Our strong first quarter performance reflects the significant growth we achieved in our general rentals segment, where revenues grew 14.7% and same-store rental revenues were up 11.1%. The primary driver of this growth was the success of our ongoing rates initiative, which enabled us to improve pricing without impacting customer demand,” said Wayland Hicks, chief executive officer.

 

Hicks continued, “For the full year 2005, we anticipate total revenues of $3.4 billion, diluted earnings per share of $1.60 to $1.70 and free cash flow of at least $200 million. We expect to drive general rentals growth by improving rental rates at least 5% over last year, expanding our rental fleet, increasing contractor supplies sales by more than 30%, and opening new branches. We've opened 10 new branches this year and plan to open a total of 30 to 35 by year-end.”