H&E Equipment Services last week announced fourth-quarter revenues for the year ended Dec. 31, with revenues increasing 24.3 percent to $217.0 million versus $174.6 million a year ago. Revenues increased 17.8 percent from the third quarter of 2011. Net income increased to $7.9 million in the fourth quarter compared to a net loss of $2.5 million a year ago. EBITDA increased 61.3 percent to $43.4 million from $26.9 million a year ago, yielding a margin of 20.0 percent compared to 15.4 percent of revenues a year ago. Rental revenues increased 21.4 percent, or $11.0 million, to $62.6 million on higher time utilization, better rates, and a larger fleet compared to a year ago.
Total revenues for the full-year 2011 increased 25.5 percent to $720.6 million from $574.2 million in 2010. Equipment rental revenues increased 28.1 percent to $228.0 million compared with $178.0 million in 2010. New equipment sales increased 31.6 percent to $220.2 million from $167.3 million in 2010. Used equipment sales increased 37.0 percent to $85.3 million compared to $62.3 million in 2010. EBITDA for 2011 increased $59.3 million to $140.3 million from $81.0 million in 2010. EBITDA as a percentage of revenues was 19.5 percent compared with 14.1 percent in 2010.
In the fourth quarter, new equipment sales increased to $86.6 million, reflecting a 36.7-percent increase from a year ago and an 86.0-percent increase from the third quarter. Increases in both comparative periods were driven by higher demand for new cranes. Gross margins were 25.8 percent as compared to 23.9 percent a year ago.
Rental gross margins increased to 44.5 percent in the fourth quarter compared to 39.2 percent a year ago and 44.0 percent in the third quarter. Average time utilization (based on original equipment cost) increased to 72.3 percent, compared to 67.0 percent a year ago and 71.8 percent in the third quarter. Average time utilization (based on units available for rent) increased to 67.3 percent compared to 62.7 percent last year and 68.9 percent in the third quarter.
Average rental rates increased 6.5 percent compared to a year ago. Dollar utilization was 33.9 percent in the fourth quarter compared to 30.2 percent a year ago and 33.7 percent in the third quarter. Rental fleet age on Dec. 31 was 43.3 months compared to an industry average of approximately 51 months.
“The fourth quarter was exceptionally strong for our business,” said John Engquist, H&E Equipment Services’ president and CEO. “Our exposure to the industrial sector continues to be very beneficial for our company. Activity related to the oil and gas industries, where we are heavily embedded, greatly increased. Commercial construction activity also showed a modest improvement during the quarter and customers demonstrated improved confidence in the recovery by making meaningful capital purchases. Our distribution business, particularly new equipment sales, far exceeded our expectations for the quarter. As a result of these improvements in market conditions and solid execution by our employees, we delivered an impressive 24.3 percent increase in revenue growth and a 61.3 percent increase in EBITDA. Net income grew to $7.9 million compared to a net loss of $2.5 million on a year-over-year basis. Every segment of our business generated solid increases in revenue and gross profit.”
At the end of the fourth quarter of 2011, the original acquisition cost of the company’s rental fleet was $736.6 million, an increase of $51.5 million from $685.1 million at the end of the fourth quarter of 2010.
“I am very pleased with our tremendous finish to 2011 and the momentum our business is carrying into 2012,” Engquist said. “We expect another solid year for our company based on the current trends. As demonstrated by our performance last year, we are well positioned to benefit from continued improvements in market conditions.”
Headquartered in Baton Rouge, La., H&E Equipment Services is No. 12 on the RER 100.
