RSC Equipment Rental Reaches Record Financial Results in Q3
October 21, 2005 — RSC Equipment Rental,
According to the report, third quarter achievements for RSC Equipment Rental included 13 percent organic rental revenue growth; operating profit margin of 25.6 percent, EBITDA (earnings before interest, taxes, depreciation and amortization) margin of 43 percent; return on operating capital employed of 24 percent; and 72 percent rental fleet utilization.
Total revenues for RSC were $404 million in the third quarter of 2005, compared to $377 million in the third quarter of 2004. Most of the growth came from rate and volume improvements in equipment rentals. Sales of used equipment increased by 13 percent and rental fleet utilization in the quarter improved to 72 percent from 70 percent in the same quarter last year.
Operating profit rose to $104 million in the third quarter of 2005, the company's highest ever, and an increase of 32 percent over the same quarter of the previous year. RSC reports it has reached quarter-over-quarter increases in operating profit for the 10th consecutive time. The continued positive development of rental rates, increased rental volumes, and ongoing capital and cost-efficiency improvements all contributed to these strong results.
Total operating costs for the third quarter were only slightly higher than the previous year, in spite of the volume growth and a $2.5 million reserve taken for costs related to hurricanes Katrina and Rita. As a result, EBITDA improved to 43 percent from 37 percent in 2004. Likewise, return on operating capital employed increased in the quarter to 24 percent from 16 percent in 2004, significantly outperforming the cost of capital for the company.
