H&E Equipment Services posted a 26.8-percent 2010 fourth-quarter revenue increase compared with the fourth quarter of 2009. Total revenues were $174.6 million compared with $137.7 million in the year-ago period.
Equipment rentals increased 26.3 percent in the fourth quarter, with the company posting $51.6 million compared with $40.9 million for the year-ago quarter.
Sequentially, total revenues increased 13.5 percent in the fourth quarter compared with the third quarter, while rental revenues jumped 6.8 percent on a sequential basis.
Sales of new equipment leaped 71.7 percent in the fourth quarter, with $63.4 million in Q410 compared with $36.9 million in the year-ago quarter.
Rental gross margins increased to 39.2 percent in the fourth quarter compared with 27.1 percent a year ago and 37.5 percent in the third quarter.
Average time utilization, based on units available for rent, increased to 62.7 percent compared to 53.3 percent last year. Average time utilization based on original equipment cost increased to 67 percent, compared to 55.4 percent a year ago. Dollar utilization was 30.2 percent in the fourth quarter compared to 23.9 percent a year ago.
Rental rates improved 2.2 percent sequentially from the third quarter, the second consecutive quarter of sequential rental rate improvement. Rental fleet age on Dec. 31, 2010, was 43 months compared to an industry average of about 53 months, the company said.
“With significant gains on both a year-over-year and sequential basis, we are pleased with our performance during the fourth quarter,” said John Engquist, president and CEO. “We continue to be encouraged by the improvements in market conditions. Year over year, our total revenues increased in excess of 25 percent, driven by continued growth in our rental business and higher demand for new equipment. The quarter’s results also reflected improved gross margins and EBITDA margins. Despite typical seasonal patterns in the latter part of the fourth quarter, our business delivered strong sequential improvement with double-digit increases in revenues, gross profit and EBITDA.”
Engquist said improving market conditions in the third and fourth quarter of 2010 will continue into 2011.
“Our outlook for 2011 is positive as the industrial markets we serve remain very strong, construction activity is slowly recovering in several of our markets that were hit the hardest by the recession and overall economic conditions are expected to further improve during the year,” Engquist added. “Although we continue to operate with limited visibility, particularly in our distribution businesses, many macro-economic indicators are pointing to improved conditions and performance during 2011.”
While the second half of the year was much improved compared with 2009, because of the slow business conditions in the first half, total revenues dropped from $679.7 million in 2009 to $574.1 million in 2010, a 15.5-percent decrease. Rental revenues for the full year were $178 million, compared with $191.5 million for the full year of 2009, a 7-percent drop.
Based in Baton Rouge, La., H&E Equipment Services is No. 11 on the RER 100.
