H&E Equipment Services Reports Fourth Quarter 2004 Results

April 6, 2005 -- Rental is back, according to January 31 third quarter and December 31 fourth quarter earnings recently reported by several national rental companies. An increase in rentals, new and used equipment sales, and parts and service sales were just a few areas showing growth for H&E Equipment Services, NES Rentals, United Rentals, and Sunbelt.

 

H&E Equipment Services, Baton Rouge, La., announced its fourth quarter revenues increased $24 million, or 22.3%, from the fourth quarter in 2003, making it the company's strongest quarter in 2004. Net income for Q4 2004 was $1.8 million, compared to the $7.2 million net loss for Q4 2003.

 

Fourth quarter equipment rental revenues were $43.7 million compared to $38.6 million for the fourth quarter of 2003, reflecting an increase of $5.1 million, or 13.2%. The overall increase was primarily due to a $4.7 million increase in aerial work platform equipment rental revenue. Fourth quarter new equipment sales were $36.3 million, up $13.2 million, or 57.1%, from the fourth quarter of 2003. Fourth quarter used equipment sales were $23 million, representing a $4.1 million, or 21.7%, increase from $18.9 million for the fourth quarter of 2003.

 

New and used equipment sales increased across all product lines, except for a $0.6 million decrease in sales of used other equipment. Parts sales and service revenues for the fourth quarter of 2004 collectively were $21.9 million, representing a $0.2 million, or 0.9%, increase compared to $21.7 million for the fourth quarter of 2003.

 

Chicago, Ill.-based NES Rentals announced its total 2004 revenues were $588 million, an increase of 4%, or $21 million, over 2003 revenues. President and CEO Andrew Studdert attributes the improved performance to strength in the industrial and construction markets, operational efficiencies within NES, efficient fleet usage, and the rollout of NES's aggressive pricing strategy and marketing program.

 

Rental revenues accounted for 84% of NES's total revenues in 2004. A strong post-emergence cash flow from operations of $97 million in 2004 allowed the company to invest $100 million in new equipment, up from $34 million in 2003, which is a direct result of the company's recent debt restructuring, new credit facility, and stronger operations. Used equipment sales rose to $43 million in 2004, compared to $30 million in 2003. The increased sales were driven by management's focus on improving fleet age, equipment mix, and increases in used equipment pricing.

 

Ashtead Group plc, parent company of Sunbelt Rentals, Charlotte, N.C., announced its results for the third quarter ending January 31, 2005, in which Sunbelt's turnover grew 16.7% to $501.6 million for the first nine months of the fiscal year. This reflects the 7% growth in rental rates and an increase in the nine month's utilization rate from 65% to 70% while the fleet size remained broadly constant. The nine month figures reflect further strong growth in the third quarter where turnover was up 19.3%, compared with the same period last year. Sunbelt's turnover improvement reflected market share gains and growth in non-residential construction, as well as the continued shift from ownership to rental. Sunbelt's divisional operating profit was up 93.2% in the third quarter from $11.8 million to $22.8 million. For the year to date, it grew 59.5% to $84.7 million, representing a margin of 16.9% (2004 • 12.4%). 

 

While its 2004 results won't be finalized until June, United Rentals, Greenwich, Conn., announced it expects to meet or exceed the outlook provided in the third quarter earnings release last October. Highlights from the company's expected results include a total revenue increase of 12.7% for the fourth quarter, reaching $836.4 million, and 8.4% for the full year 2004, which reaches a record $3.11 billion. Same-store rental revenues in the general rentals segment, which includes more than 600 types of construction, aerial, industrial, and homeowner equipment, increased 13.1% for the fourth quarter and 10.9% for the full year. The size of the rental fleet, as measured by the original equipment cost, increased to $3.7 billion on December 31, 2004, from $3.5 billion on December 31, 2003. The age of the rental fleet was 40 months at the end of 2004 and 2003.

 

NationsRent, Fort Lauderdale, Fla., will hold a conference call on Friday, April 8 at 2 p.m. EST to discuss fourth quarter and full-year financial results and general business conditions.