H&E Equipment Services reported a 19.8-percent third-quarter revenue increase from $153.8 million a year ago to $184.3 million in the recently concluded quarter. Net income increased to $4.8 million compared with a loss of $3.8 million a year ago. EBITDA increased 65.2 percent to $40.4 million compared to $24.5 million in last year’s third quarter, yielding a margin of 21.9 percent compared with 15.9 percent of revenues last year.
Rental revenues soared 26.8 percent to $61.2 million, compared with $48.3 million a year ago.
For the first nine months of 2011, total volume increased 26.1 percent from $399.5 million in 2010 to $503.5 million this year. Rental revenue for the nine-month period went from $126.4 million last year to $165.4 million this year, a 30.8-percent boost.
The distribution portion of H&E’s business showed a nice jump of 84.8 percent in used equipment sales and a 10.9-percent leap in parts and service revenues for the quarter. Gross margin was 29.2 percent, compared to 24.6 percent a year ago. Rental gross margins went from 37.5 percent in Q310 to 44 percent in Q311.
Average time utilization increased to 68.9 percent compared to 62.3 percent last year and 67.1 percent for the second quarter (based on units available for rent). Average time utilization based on original equipment cost increased to 71.8 percent from 65.9 percent a year ago.
Average rental rates jumped 8.9 percent compared to a year ago and improved 4.1 percent compared to the second quarter. It was the second consecutive quarter of both positive year-over-year and sequential rental rates.
“The third quarter was another strong quarter for our business as we grew rental revenue in excess of 25 percent compared to a year ago for the fourth consecutive quarter,” said John Engquist, president and CEO. “Our distribution business also showed solid performance despite the modest rate of recovery in the construction markets. Also, we were very pleased with a 141-percent increase in our pre-tax earnings on a sequential basis even though revenues were consistent in the second and third quarters. We continue to focus on profitable growth and are benefitting from operating leverage in our business model.
“We are entering the fourth quarter with momentum in our business and our outlook for the quarter is positive. We expect strong demand for rental equipment again this quarter based on current trends and discussions with our customers. Although activity regarding equipment purchases has increased as customers consider capital expenditures before year end, the timing of these purchases is difficult to predict. Depending on the timing of these potential purchases and normal seasonality, the third quarter could be our peak period of 2011. This would not be unusual as the third quarter is historically our strongest period of the year.”
Based in Baton Rouge, La., H&E Equipment Services is No. 12 on the RER 100.