Revenues decreased 37 percent to $175.6 million for H&E Equipment Services in the third quarter, compared with $278.6 million in the same period in 2008. Equipment rental revenues plunged 42.3 percent to $45.1 million compared with $78.2 million in the third quarter of 2008.
New equipment sales dove 50.2 percent to $48.7 million compared with $97.8 million in the year-ago quarter. Used equipment sales dropped 17.9 percent to $32.7 million from $39.9 million last year, while parts sales plunged 16.7 percent to $25.8 million compared to $31 million in Q308.
H&E’s sale of its Yale lift truck assets, included in the quarterly numbers, partially offset these revenue declines, particularly in used equipment sales.
EBITDA plummeted 56.4 percent to $29.3 million, a 16.7-percent margin compared to $67.2 million or a 24.2-percent margin a year ago. Net loss was $2.3 million compared to net income of $17.6 million a year ago.
The company succeeded in reducing debt by $42 million during the third quarter.
“Our business environment remains very challenging and we have not seen any seasonal increase in demand during the third quarter,” said H&E’s president and CEO John Engquist. “While we are pleased to have experienced stabilization of our fleet utilization during the third quarter, we have not seen improvement in the structural economic problems that continue to impact the demand for our products and services. While utilization has stabilized, it has stabilized at a low level. As a result, rental pricing remains weak.”
Engquist was more upbeat about balance-sheet issues. “We have successfully reduced debt and increased liquidity during this prolonged recession,” he said. “We continue to focus on our balance sheet, which positions our company to deal with the current weak environment and to take full advantage of the recovery when it begins.”
“In spite of the severe decline in our markets and the earnings results based on contraction in our top-line revenues, we continued to make significant progress in fulfilling our balance sheet objectives,” added Leslie Magee, chief financial officer. “Subsequently, we have fully repaid our revolver, leaving $312 million of borrowing availability on the credit facility and we expect to continue to generate cash throughout the fourth quarter.”
Magee added that in general H&E customers “lack a near-term need for construction equipment based on today’s limited visibility of a recovery in our end markets. We have seen few signs of a boost in the confidence levels of our end users, which is necessary to initiate increased capital spending by our customers. Consequently, we remain focused on asset management, debt reduction and cash generation. We ended the quarter with negative net rental cap-ex, further fleet reductions of $38.8 million and lower inventories.”
The company sold a substantial portion of its Yale lift truck assets in the Intermountain region, including rental fleet, new and used equipment inventories and parts inventories for about $15.7 million. At the time of the sale, the lift trucks comprised about 3.5 percent of total rental fleet assets and 71 percent of total lift trucks in the rental fleet based on net book value.
Dollar utilization was 25.5 percent for the quarter, compared to 38.8 percent for the third quarter of 2008.
Based in Baton Rouge, La., H&E Equipment Services, is No. 9 on the RER 100.
