RSC's Q2 Numbers Top First Quarter Results

July 19, 2005 — After showing record financial results in the first quarter of 2005, RSC Equipment Rental, Scottsdale, Ariz., posted an even stronger second quarter, surpassing results from the same quarter last year. Gunnar Brock, CEO of Atlas Copco, the parent company of RSC Equipment Rental, announced the results in Atlas Copco's interim quarterly report issued yesterday in Stockholm, Sweden.

 

Some of the highlights from the report included total revenue growth of 8 percent; rental revenue growth of 14 percent, operating profit increase of 57 percent, EBITDA (earnings before interest, taxes, depreciation

and amortization) margin of 40 percent, return on operating capital of 23 percent,  and rental fleet utilization of 69 percent. (Note: Certain percentages may vary slightly from the Atlas Copco interim report due to currency differences.)

 

Total revenues for RSC were $384 million in the second quarter of 2005, an increase of 8 percent over the second quarter of 2004. Most of that growth came from rate and volume improvements in equipment rentals. Same store rental revenue increased by 17 percent, while sales of used equipment increased by 18 percent. Rental fleet utilization in the quarter improved to 69 percent from 66 percent last year.

 

Operating profit rose to $85 million in the second quarter of 2005, an increase of 57 percent over the same quarter of the previous year. The continued positive development of rental rates, increased rental volumes, and ongoing capital and cost-efficiency improvements all contributed to these strong results. In spite of increased volume and generally higher activity level, operating costs for the second quarter of 2005 remained flat as compared to the same quarter of

2004. As a result, EBITDA improved to 40 percent from 31 percent in 2004. Return on operating capital employed also increased in the quarter to 23 percent from 13 percent in 2004, outperforming the cost of capital for the company and thereby continuing to generate economic value.

 

"Similar to Atlas Copco, RSC's first strategic objective is to lead the industry in customer satisfaction,” said Tom Zorn, president and CEO of RSC Equipment Rental. “RSC is also strongly focused on driving continuous improvement in operating efficiency, return on capital employed, and revenue growth. We emphasize generating positive economic value added first, then we focus on revenue growth, a strategy that sets us apart from many of our competitors.”