H&E Equipment Services posted an 8.9 percent rental revenue increase in the second quarter with $118.4 million compared to $108.7 million a year ago. Total revenue in the quarter increased 3 percent to $249.4 million compared to $242.1 million in the second quarter of 2016. Net income was $9.9 million compared to $7.5 million in the year-ago quarter, a 32 percent boost.
Adjusted EBITDA jumped 9.1 percent to $79.1 million in the second quarter compared to $72.5 million in last year’s Q2. New equipment sales decreased 8.5 percent to $45.7 million compared to $49.9 million in the year-ago frame. Rental gross margins were 47.6 percent in the quarter compared to 46.9 percent last year.
Average time utilization based on original equipment cost improved to 72.2 percent compared to 70.1 percent in Q216. Average rental rates increased 0.3 percent compared to a year ago and 0.3 percent sequentially.
“Demand in the non-residential construction markets we serve was strong during the second quarter and as a result, rental revenues increased 8.9 percent, physical utilization increased 210 basis points, and rental gross margins increased to 47.6 percent,” said John Engquist, CEO of H&E Equipment Services. “We also achieved a 0.3 percent positive increase in rental rates compared to a year ago and compared to the first quarter of this year. We were very pleased to see positive rates this early in the year.
“As we move into the second half of the year, we believe the trends in our business and the optimism in our end-user markets remain positive. We are also extremely excited about our pending acquisition of Neff Corporation, which we expect will significantly penetrate and grow our business in strategic business segments.”
At the end of the second quarter, the original acquisition cost of the company’s rental fleet was $1.4 billion, an increase of $73.8 million from the end of the second quarter of 2016. Dollar utilization was 34.9 percent compared to 33.9 percent for the second quarter of 2016.
For the first six months of the year, equipment rental revenue was $225.7 million compared to $211.5 million for the first six months of 2016, a 6.7-percent hike. Total revenue for the six months was $476.2 million compared to $489.1 million in the first six months of 2016, a 2.6-percent slide.
H&E Equipment Services, No. 9 on the RER 100, is based in Baton Rouge, La.
